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EXHIBIT 2.1
DATED
MARCONI CORPORATION PLC
AND
WEIGH-TRONIX UK LIMITED
________________________________________________________________
SHARE SALE AND PURCHASE AGREEMENT
IN RESPECT OF
AVERY BERKEL
________________________________________________________________
Slaughter and May
35 Basinghall Street
London EC2V 5DB
(FM/RRO)
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CONTENTS
________
PAGE
____
1. INTERPRETATION 1
2. CONDITIONS 1
3. SALE AND PURCHASE OF THE AVERY BERKEL SHARES 5
4. CONSIDERATION 6
5. COMPLETION 6
6. GEC'S WARRANTIES AND UNDERTAKINGS 6
7. RESTRICTIONS ON GEC GROUP 9
8. FURTHER WARRANTIES AND UNDERTAKINGS 12
9. PURCHASER'S REMEDIES AND GEC'S LIMITATIONS ON LIABILITY 28
10. CONDUCT OF BUSINESS BEFORE COMPLETION 30
11. PENSION ARRANGEMENTS 32
12. AGGREGATED COMPLETION BALANCE SHEET 32
13. REMEDIES AND WAIVERS 38
14. ASSIGNMENT 38
15. FURTHER ASSURANCE 40
16. ENTIRE AGREEMENT 40
17. NOTICES 41
18. ANNOUNCEMENTS 42
19. COSTS AND EXPENSES 43
20. COUNTERPARTS 43
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21. TIME OF ESSENCE 43
22. EFFECT OF COMPLETION 43
23. INVALIDITY 44
24. GOVERNING LAW 44
25. JURISDICTION 44
26. PROPERTY PROVISIONS 44
SCHEDULE 1 DEFINITIONS 47
SCHEDULE 2 COMPLETION ARRANGEMENTS 63
SCHEDULE 3 THE WARRANTIES 67
SCHEDULE 4 LIMITATIONS ON GEC'S LIABILITY 98
SCHEDULE 5 PENSION ARRANGEMENTS 109
SCHEDULE 6 TAX COVENANT 127
SCHEDULE 7 BASIC INFORMATION ABOUT THE AVERY BERKEL
GROUP COMPANIES AND THE ASSOCIATE COMPANIES 128
SCHEDULE 8 PROPERTY SCHEDULE 129
SCHEDULE 9 CONDUCT OF BUSINESS BEFORE COMPLETION 172
SCHEDULE 10 CONDITIONS 175
SCHEDULE 11 ACCOUNTING AND OTHER INFORMATION PER
SUB-CLAUSE 8.22(B) 178
SCHEDULE 12 DORMANT COMPANIES 179
SCHEDULE 13 UNFUNDED LIABILITY 182
SCHEDULE 14 PRINCIPAL WARRANT TERMS 186
2
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THIS AGREEMENT (this "AGREEMENT") is made on March, 2000
BETWEEN:
1. MARCONI CORPORATION PLC (previously The General Electric Company, p.l.c.)
(registered in England No. 67307) having its registered office at One
Bruton Street, London W1X 8AQ ("GEC");
AND
2. WEIGH-TRONIX UK LIMITED (registered in England registered no. 3943960)
having its registered office at Broadwalk House, 5 Appold Street, London
EC2A 2HA (the "PURCHASER")
WHEREAS:
GEC has agreed to sell and transfer, or procure the sale and transfer of,
the Avery Berkel Shares and the Purchaser has agreed to purchase them on
the terms and conditions of this Agreement.
IT IS AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 The Schedules form part of this Agreement and shall have the same force and
effect as if expressly set out in the body of this Agreement and any
reference to this Agreement shall include the Schedules.
1.2 Certain words and expressions used in this Agreement are defined in
Schedule 1.
2. CONDITIONS
2.1 The obligations of the Purchaser and GEC are in all respects conditional
upon those matters listed in Schedule 10 on the terms hereof.
2.2 The parties will each use all reasonable endeavours promptly to fulfil or
procure the fulfilment of the conditions listed in Schedule 10 and will
notify each other party immediately upon the satisfaction of such
conditions.
2.3 Within 5 Business Days of the date hereof, and without prejudice to sub-
clause 2.2, GEC and the Purchaser shall notify The Irish Minister for
Enterprise, Trade and Employment in accordance with Section 5 of the Irish
Mergers, Take-overs and Monopolies (Control) Act 1978 (as amended).
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2
2.4 Within 5 Business Days of the date hereof, and without prejudice to sub-
clause 2.2, the parties hereto shall file or supply, or cause to be filed
or supplied, all material applications, notifications and information
required to be filed or supplied by them pursuant to the HSR Act and, with
respect to South Africa, the Competition Act no. 89 of 1998.
2.5 Within 5 Business Days of the date hereof, and without prejudice to sub-
clause 2.2, the parties hereto shall file a control notification in
accordance with Section 39 of the German Act against Restrictions of
Competition.
2.6 The conditions listed in Schedule 10 may be waived as described in sub-
clause 2.8, and the period in which any such conditions are to be satisfied
may be extended, but only with the consent of both GEC and the Purchaser.
2.7 GEC undertakes to disclose in writing to the Purchaser, and the Purchaser
undertakes to disclose in writing to GEC, as soon as reasonably practicable
after it comes to the notice of either of them, anything which will or may
prevent any of the conditions listed in Schedule 10 from being satisfied on
or before the date falling five Business Days before the Longstop Date in
particular (and without limitation) any proceedings or possible proceedings
intimating that a relevant regulatory consent may be withheld.
2.8 If any of the conditions listed in paragraphs (A)-(F) and (H)-(J) of
Schedule 10 (other than, in the case of GEC, those listed in paragraphs
(E), (F), (I) or (J) of Schedule 10) is not fulfilled (notwithstanding the
required reasonable endeavours in sub-clause 2.2 and the other terms of
this clause 2) or, where relevant, is not waived on or before the fifth
Business Day prior to the Longstop Date, either GEC or the Purchaser shall
be entitled to terminate this Agreement by notice in writing to the other
provided that GEC shall not be entitled so to terminate this Agreement by
reason of the condition listed in paragraph (E), (F), (I) or (J) of
Schedule 10 not being so satisfied or fulfilled. Conditions (E), (F), (I)
and (J) of Schedule 10 may only be waived by the Purchaser. Conditions (A)-
(D), (G) and (H) of Schedule 10, if capable of waiver, may only be waived
by both GEC and the Purchaser.
2.9 If this Agreement is terminated in accordance with sub-clause 2.8, 2.10,
2.11, 2.14, 9.5 or 9.6 all obligations of the parties under this Agreement
shall end except for those expressly stated to continue without limit in
time but (for the avoidance of
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3
doubt) all rights and liabilities of the parties which have accrued before
termination shall continue to exist.
2.10 (A) In the event that:
(i) there shall occur a Global Market Collapse after the date upon
which the Facilities are entered into and which is subsisting
when Completion would otherwise occur; and
(ii) any of the Lenders shall have validly exercised in writing any
right against the Borrower pursuant to any of the Facilities to
refuse to advance all or a substantial part of that part of the
Purchase Price which the Borrower intends on the date hereof to
draw from the Facilities for the purposes of enabling the
Purchaser to finance in whole or in part the Purchase Price on
grounds of the occurrence of such Global Market Collapse,
then the Purchaser shall be entitled by giving notice in writing (the
"DEFERRAL NOTICE") promptly to GEC attaching a copy of the written
notice from the Lender described in paragraph (ii) above to defer
Completion to such Business Day during the period beginning on the
date of the service of the Deferral Notice upon GEC and ending 60 days
thereafter as the Purchaser shall, on not less than five Business
Days' written notice, notify GEC. The Purchaser's rights in this
paragraph (A) may only be exercised once.
(B) Clause 10 shall for the avoidance of doubt continue to apply following
service of the Deferral Notice upon GEC.
(C) If the Global Market collapse is still subsisting upon the expiry of
such 60 day period, the Purchaser shall be entitled to terminate this
Agreement by notice in writing to GEC.
2.11 The Purchaser shall only be able to invoke the condition set out in
paragraph (G) of Schedule 10 if the Purchaser provides a copy of a written
notice from any of the Lenders constituting a valid exercise by such Lender
under any of the Facilities of the Lender's right to refuse to advance all
or a substantial part of the advances for the purposes of enabling the
Purchaser to finance in whole or in part the Purchase Price as a result of
the occurrence of an event, development or circumstance of the type
described in such paragraph on or prior to the date on which Completion
would otherwise occur. If the Purchaser
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validly invokes the condition set out in paragraph (G) of Schedule 10 as
described in the foregoing provisions of this sub-clause 2.11, the
Purchaser shall be entitled simultaneously to terminate this Agreement by
notice in writing to GEC.
2.12 (A) The Purchaser shall provide a copy of the Facilities (and such
ancillary documents relating thereto as GEC may reasonably request) to
GEC promptly after execution of the same excluding any parts thereof
which are commercially sensitive to any member of the Purchaser's
Group.
(B) The Purchaser shall provide a copy of the term sheet and related
commitment letters (or similar documents) whether or not in draft
relating to the Facilities to GEC no later than five Business Days
after the date upon which the same are issued excluding any parts
thereof which are commercially sensitive to any member of the
Purchaser's Group.
(C) The Purchaser shall provide to GEC and GEC's advisers drafts of the
Facilities from time to time as they are prepared excluding any parts
thereof which are commercially sensitive to any member of the
Purchaser's Group.
2.13 The parties shall discuss in good faith after the date hereof whether a
notification of this Agreement is required to be made to the Competition
Authority under the Competition Acts 1991-1996 in Ireland. If notification
is required to be made by applicable law, sub-clause 2.2 shall apply to
such notification and the making of such notification and, if applicable,
the obtaining of the relevant clearance or expiry of the relevant waiting
period shall be deemed to be a condition listed in Schedule 10 which is
capable of waiver, and the period in which such condition may be satisfied
may be extended, but only with the consent of both GEC and the Purchaser.
References to the conditions listed in paragraphs (A)-(D) shall include a
reference to the condition described in this sub-clause 2.13 if applicable.
2.14 (A) The Purchaser agrees to use all reasonable endeavours with the purpose
of securing sufficient funding (whether by way of debt or equity) to
enable it to pay the Purchase Price at Completion. In the event that
the Purchaser shall, notwithstanding such reasonable endeavours
obligation, have been unable on or prior to Completion to have raised
sufficient funding, then this Agreement shall terminate and the
provisions of sub-clause 2.9 shall apply mutatis mutandis (PROVIDED
that such reasonable endeavours
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5
obligation shall not require the Purchaser or any member of the
Purchaser's Group to enter into arrangements on other than normal
commercial terms for a borrower and for a purpose of this nature).
(B) The provisions of sub-clauses 2.10, 2.11, 9.5, 9.6 and any other
provision of this Agreement which grants rights to the Purchaser in
respect of the Facilities (other than sub-clause 8.22) (including
without limitation rights of termination and in respect of condition
(G) of Schedule 10) shall be suspended until such time as the
definitive agreements for the Facilities are executed. This paragraph
applies notwithstanding anything in this Agreement to the contrary.
(C) Simultaneously with exercising any right of termination which may have
arisen pursuant to paragraph (A) above, the Purchaser shall provide
written notice to GEC specifying in reasonable detail the matters it
has undertaken to discharge its reasonable endeavours obligation in
paragraph (A) above including, without limitation, a certificate
stating the detailed terms upon which the Purchaser was prepared to
accept funding for all or part of the Purchase Price.
3. SALE AND PURCHASE OF THE AVERY BERKEL SHARES
GEC shall sell or procure the sale of the Avery Berkel Shares with full
title guarantee and the Purchaser shall purchase and pay for or procure the
purchase of and payment for the Avery Berkel Shares. The Avery Berkel
Shares shall be free from all claims, Encumbrances and equities whatsoever
and shall be sold with all rights attached or accruing to them at
Completion including, without limitation, the right to receive all
dividends, distributions or any return of capital hereafter declared, paid
or made in respect of periods commencing on or after Completion but
excluding the dividends in specie and other distributions described in the
documents attached to the Disclosure Letter as items EX/GA/UK/33/103 and
EX/CEN2/9. This clause 3 shall not be considered to be breached by reason
of the matters undertaken, or the matters to be undertaken in performance
of the resolutions passed and decisions made at, the board and general
meetings of GAIL and GAL or to be undertaken as set out in the documents
attached to the Disclosure Letter as items EX/GA/UK/33/103 and EX/CEN2/9.
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4. CONSIDERATION
The total consideration for the sale of the Avery Berkel Shares shall be
the payment by the Purchaser to GEC of the Purchase Price which shall be
allocated as follows, subject to mutually agreeable revision prior to
Completion (such agreement to revision not to be unreasonably withheld or
delayed) after the parties' assessment of the value of the intangible
assets of such companies:
(A) (Pounds)70,000,000 to GAIL; and
(B) (Pounds)35,000,000 to MVBP.
5. COMPLETION
5.1 Completion shall take place on the Completion Date at the London offices of
GEC's Solicitors, and such other locations as the parties may agree.
5.2 At Completion, GEC shall do or procure the carrying out of those things
listed in Schedule 2 Part 1 and the Purchaser shall do or procure the
carrying out of those things listed in Schedule 2 Part 2.
5.3 Neither GEC nor the Purchaser shall be obliged to perform its obligations
in respect of Completion unless the other party complies in all material
respects with the requirements of sub-clause 5.2 and Part 1 and 2 of
Schedule 2 respectively.
5.4 Neither GEC nor the Purchaser shall be obliged to complete the sale and
purchase of any of the Avery Berkel Shares unless the sale and purchase of
all the Avery Berkel Shares is completed simultaneously. This sub-clause
shall not limit any other clause of this Agreement and in particular clause
13.
6. GEC'S WARRANTIES AND UNDERTAKINGS
6.1 Subject to clause 9 and Schedule 4, GEC warrants to the Purchaser in the
terms of the Warranties at the date of this Agreement (except for the
Warranty in paragraph 2.6 of Schedule 3 which is made upon the March 1998
Accounts and the March 1999 Accounts being finalised prior to Completion by
GEC's Accountants) but gives no further or other warranties.
6.2 Subject to paragraph 2.2 of Schedule 4, each of the Warranties shall be
construed as a separate and independent warranty and, save as provided to
the contrary in any of the Share Purchase
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Documents, shall not be limited by the terms of any other Warranty.
6.3 GEC:
(A) waives, and will procure that all other members of the GEC Group will
waive, any rights, remedies or claims GEC or any other member of the
GEC Group may have from time to time against any Avery Berkel Group
Company, any director of an Avery Berkel Group Company or any Employee
with respect to claims arising out of any information, opinion or
advice supplied or given (or omitted to be supplied or given) to GEC
or any other member of the GEC Group in connection with the proposed
entering into of this Agreement or the other Share Purchase Documents
and the sale of the Avery Berkel Shares, other than in the case of
fraud, wilful misstatement or wilful omission; and
(B) agrees that any such rights, remedy or claim shall not constitute a
defence to any claim by the Purchaser under or in relation to this
Agreement (including the Warranties) or the other Share Purchase
Documents.
6.4 GEC agrees that it shall not, and that no other member of the GEC Group
shall, make any claim following Completion upon any member of the Avery
Berkel Group which relates to the costs of or penalties upon termination,
or early termination, or failure to purchase a particular quantity of
supply, products, goods or services in relation to any head office supply,
services or sales agreement or bulk purchase, supply, services or sales
agreement to which any member of the GEC Group is a party (in each case a
"GROUP CONTRACT") to the extent such termination or failure is a result of
the change of control contemplated by this Agreement or that member of the
Avery Berkel Group ceasing to be a member of the GEC Group provided, for
the avoidance of doubt, that this sub-clause 6.4 shall have no effect in
relation to any obligations or amounts which are due or owing or required
to be performed or paid between a member of the Avery Berkel Group, on the
one hand, and either a member of the GEC Group or the supplier under any
supply, services or sales agreement or bulk purchase agreement to which an
Avery Berkel Group Company is a party (excluding Group Contracts), on the
other hand, in respect of trading in the ordinary course. GEC shall have no
obligations under, and shall not be restricted by, this sub-clause 6.4 with
respect to any Group Contract with respect to an Avery Berkel Group Company
if that Avery Berkel Group Company remains a beneficiary under, or party
to, the purchase, supply, services or sales agreement in question after
Completion.
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6.5 GEC undertakes to disclose in writing to the Purchaser any matter or thing
which would be reasonably likely to entitle the Purchaser to exercise its
rights pursuant to sub-clause 9.4 as soon as is reasonably possible after
it comes to the notice of GEC from the date hereof to the time of
Completion.
6.6 GEC covenants with the Purchaser (who consents thereto) to procure that all
amounts in the nature of indebtedness, excluding amounts arising in the
ordinary course of trading between members of the GEC Group and members of
the Avery Berkel Group, subject to applicable law, which are outstanding on
the date hereof or, to the extent reasonably practicable, arise after the
date hereof and prior to Completion between members of the GEC Group (on
the one hand) and members of the Avery Berkel Group (on the other hand) are
repaid on or prior to Completion.
6.7 At the request of the Purchaser, made at any time within the three months
following the Completion Date, GEC shall as soon as reasonably practicable
and in any event within one month of such request, provide or procure the
provision of copies (or originals where available) of all registration and
renewal certificates and current renewal certificates for any registered
Intellectual Property owned by the Avery Berkel Group, and copies of all
the application documentation in connection with all applications to
register any Intellectual Property in the name of an Avery Berkel Group, as
are in the reasonable control of GEC and in so far as such documents are
not in the possession of the Avery Berkel Group.
6.8 As soon as reasonably practicable after the date hereof, GEC shall instruct
GEC's Accountants to prepare the February Accounts, the March 1998 Accounts
and the March 1999 Accounts for submission in final form to GEC and the
Purchaser as soon as reasonably practicable. The Purchaser and the
Purchaser's Accountants shall be entitled to review the February Accounts,
the March 1998 Accounts and the March 1999 Accounts for five Business Days
following their submission and GEC shall ensure GEC's Accountants provide
such access to the Purchaser's Accountants to the working papers of GEC's
Accountants relating thereto as the Purchaser may reasonably request
subject to the Purchaser and the Purchaser's Accountants providing such
undertakings to GEC and GEC's Accountants as to confidentiality, indemnity
or otherwise as they may reasonably request. The fees, costs and expenses
of GEC's Accountants shall be payable by GEC.
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7. RESTRICTIONS ON GEC GROUP
7.1 GEC shall not and shall procure that no member of the GEC Group (either
itself or by instructing an agent) nor any officer or employee of GEC or
any member of the GEC Group shall make use of or divulge to any third party
(other than GEC's professional advisers) any confidential information,
which is the property of an Avery Berkel Group Company save only:
(A) insofar as the same has become public knowledge otherwise than,
directly or indirectly, through GEC's breach of this sub-clause 7.1 or
the failure of the agents, officers or employees referred to above to
keep the same confidential; or
(B) to the extent required by law or by any supervisory body or regulatory
body; or
(C) to the extent GEC reasonably considers necessary as a result of any
claim by the Purchaser for breach of Warranty or other provision of
this Agreement or relating to the other Share Purchase Documents; or
(D) to the extent GEC or any member of the GEC Group has a right (provided
such right has not arisen through GEC's breach of this sub-clause 7.1
or the failure of the agents, officers or employees referred to above
to keep the same confidential or pursuant to an arrangement reached
between GEC and an Avery Berkel Group Company between the date hereof
and Completion unless such arrangement is in the ordinary course of
trading or pursuant to documents attached to the Disclosure Letter) to
make use of or divulge any such confidential information relating to
an Avery Berkel Group Company on any other account including, without
limitation, in its capacity as a supplier, customer or distributor of
an Avery Berkel Group Company.
7.2 Save as otherwise agreed by the Purchaser in writing, notwithstanding
anything in sub-clause 7.1 to the contrary, and subject to sub-clause 7.3,
GEC undertakes with the Purchaser (as trustee for itself and the Avery
Berkel Group Companies) that it will not and that it will procure that no
member of the GEC Group will:
(A) for a period of three years (or two years in respect of the Restricted
Business in the Republic of Ireland) after the Completion Date, either
on its own or in conjunction with or as agent for any person, carry on
the Restricted
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Business in any jurisdiction in the world in competition with
the Avery Berkel Group;
(B) for a period of two years after the Completion Date, either on its own
or in conjunction with or as agent for any person, solicit, persuade
or induce or seek to solicit, persuade or induce any of the Employees
whose basic salary at the date hereof is in excess of (Pounds)50,000
to leave the employment of any Avery Berkel Group Company except for a
person who responds to a public advertisement which is not solely
aimed at such Employee or who is first approached when no longer an
employee of an Avery Berkel Group Company or of any other member of
the Purchaser's Group.
7.3 Nothing in sub-clause 7.2 shall restrict any member of the GEC Group
from:
(A) carrying on or developing the business currently carried on by the GEC
Group anywhere in the world provided that any Restricted Business
thereby undertaken is only an incidental part of such business;
(B) (without prejudice to the generality of paragraph (A) above)
distributing products in Hong Kong, China, Taiwan, Macau, Bangladesh,
New Zealand, Fiji, Tonga, Samoa, the Cook Islands or the Scott Base,
whether or not such products compete with any product offered by any
Avery Berkel Group Company;
(C) acquiring the whole or any part of a body corporate which carries on
any Restricted Business or the whole or any part of a business which
includes the carrying on of the Restricted Business, except that where
more than one-third (or, in any case, more than (Pounds)16,000,000) of
the turnover of the body corporate or of the business acquired as set
out in the latest available audited accounts of that body corporate or
business consists of Restricted Business, GEC shall use its reasonable
endeavours to procure the disposal of such Restricted Business within
12 months following completion of its acquisition;
(D) holding less than 10 per cent. of any class of shares or debentures
listed on the London Stock Exchange Limited or any other recognised
stock exchange;
(E) acquiring or holding any interest in any joint venture (whether
incorporated or unincorporated) except where such joint venture is a
subsidiary of GEC provided that the
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primary purpose of the business of that joint venture is not the
conduct of the Restricted Business; or
(F) performing any arrangement with, or as separately agreed by, an Avery
Berkel Group Company unless such arrangement or agreement is reached
between GEC and an Avery Berkel Group Company between the date hereof
and Completion unless such arrangement or agreement is in the ordinary
course of trading or pursuant to documents attached to the Disclosure
Letter.
7.4 Each of the undertakings in sub-clause 7.2 is a separate and independent
undertaking and if one or more undertakings is held to be void or
unenforceable, the validity of the remaining undertakings shall not be
affected.
7.5 GEC agrees that the restrictions and undertakings contained in clause 7.2
are reasonable and necessary for the protection of the Purchaser's
legitimate interests in the goodwill of the Avery Berkel Group but if any
such restriction or undertaking shall be found to be void or voidable, but
would be valid and enforceable if some part or parts of the restriction or
undertaking were deleted such restriction or undertaking shall apply with
such modifications as may be necessary to make it valid and enforceable.
7.6 Without prejudice to sub-clause 7.5 if any restriction or undertaking is
found by any court or other competent authority to be void or unenforceable
the parties shall negotiate in good faith to replace such void or
unenforceable restriction or undertaking with a valid provision, which, as
far as possible, has the same legal and commercial effect as that which it
replaces.
7.7 (A) GEC shall procure that each member of GEC Group whose corporate name
contains either of the names "Avery" or "Berkel" shall as soon as
reasonably practicable following Completion and in any event by the
date falling one month after Completion pass all required resolutions
to change its corporate name to a name which does not include either
such name or any name intended or likely to be confused or associated
with either of such names (excluding, for the avoidance of doubt, any
of the GEC Names) and shall procure the registration of the new name
with the appropriate registry promptly thereafter. Upon receipt of
confirmation from the appropriate court or registry that such name
change has been effected, GEC shall
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provide to the Purchaser written proof that such name change has been
effected.
(B) Within 7 days of Completion, GEC shall procure that the GEC Group
ceases to operate any web-sites under domain names including either of
the names "Avery" or "Berkel".
(C) GEC shall further procure that from 28 days after Completion no member
of the GEC Group shall use or continue to use either of the names
"Avery" or "Berkel" or any similar name (whether on any of its stocks
or tooling or otherwise) in carrying on its business.
(D) This sub-clause 7.7 shall be subject to any arrangement or agreement
separately agreed by or with the Purchaser or any member of the Avery
Berkel Group and shall not preclude any member of the GEC Group from
complying in any respect with any applicable law or regulation or
practice.
8. FURTHER WARRANTIES AND UNDERTAKINGS
8.1 The Purchaser warrants to GEC as follows:
(A) it has the requisite power and authority to enter into and perform this
Agreement and the other Share Purchase Documents to which it is party;
(B) this Agreement constitutes and the other Share Purchase Documents to
which it is party will, when executed, constitute obligations binding
on it; and
(C) the execution and delivery of, and the performance of its obligations
under this Agreement and the other Share Purchase Documents to which it
is party will (or with the giving of notice or lapse of time or both
would) not:
(i) result in a breach of a statutory provision or regulation
applicable to it of any provision of its memorandum or articles of
association or other constitutional documents;
(ii) result in a breach of any order, judgment or decree of any court
or governmental agency to which it or any member of the
Purchaser's Group is a party or by which it or any member of the
Purchaser's Group is bound; or
(iii) require the consent of its shareholders.
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8.2 The Purchaser undertakes to use its reasonable endeavours to procure that,
as soon as reasonably practicable following Completion, GEC and each other
member of the GEC Group is released from the GEC Securities and undertakes
to hold GEC, for itself and as trustee for its subsidiaries and the
relevant members of the GEC Group, indemnified and to keep it and them
indemnified from and against all actions, claims, proceedings, loss,
damage, payments, costs or expenses incurred by GEC or any member of the
GEC Group in relation to or arising out of any such GEC Securities.
8.3 GEC undertakes to use its reasonable endeavours to procure that, as soon as
reasonably practicable following Completion, the Purchaser and each member
of the Avery Berkel Group is released from the Securities and undertakes to
hold the Purchaser, for itself and as trustee for the relevant members of
the Avery Berkel Group, indemnified and to keep it and them indemnified
from and against all actions, claims, proceedings, loss, damage, payments,
costs or expenses incurred by the Purchaser or any member of the Avery
Berkel Group in relation to or arising out of any such Securities.
8.4 The Purchaser acknowledges that the GEC Names are and shall remain the
property of the GEC Group and that nothing in this Agreement shall transfer
nor shall operate as an agreement to transfer any right, title or interest
in any of the GEC Names to the Purchaser or any member of the Purchaser's
Group.
8.5 Subject to sub-clause 8.7, the Purchaser undertakes that it shall not and
shall procure that no Avery Berkel Group Company nor any other member of
the Purchaser's Group shall make any use of any trade marks or business or
corporate names consisting of or incorporating any of the GEC Names and/or
any trade mark or business or corporate name confusingly similar thereto in
relation to any goods or services or in the conduct of its business from
time to time.
8.6 The Purchaser shall procure that each Avery Berkel Group Company whose
corporate name contains any of the GEC Names shall as soon as reasonably
practicable following Completion and in any event by the date falling one
month after Completion pass all required resolutions to change its
corporate name to a name which does not include the GEC Names or any name
intended or likely to be confused or associated with the same (excluding,
for the avoidance of doubt, Avery Berkel) and shall procure the
registration of the new name with the appropriate registry promptly
thereafter. Upon receipt of confirmation from the appropriate court or
registry that such name change has been
<PAGE>
14
effected, the Purchaser shall provide to GEC written proof that such name
change has been effected. The Purchaser shall procure that within 7 days of
Completion each Avery Berkel Group Company ceases to operate any web-sites
under domain names including any of the GEC Names.
8.7 The Purchaser undertakes that it shall procure:
(A) that from immediately following Completion, no stationery, purchase
order, invoice, receipt or other similar document containing any
reference to any of the GEC Names is printed, ordered or produced for
use by an Avery Berkel Group Company (or in connection with its
business) and that each Avery Berkel Group Company shall from
immediately following Completion, to the extent practicable, cease to
use any stationery, purchase order, invoice, receipt or other similar
document containing any reference to any of the GEC Names or shall
only use such stationery, purchase order, invoice, receipt or other
similar document after having deleted, pasted over or placed a sticker
over such references, except to the extent required by law provided
that the Purchaser shall procure that no member of the Avery Berkel
Group uses any stationery, purchase order, invoice, receipt or similar
document containing any reference to the GEC Names in entering into or
undertaking any contract from immediately following Completion;
(B) as soon as reasonably practicable, and in any event no later than
three months from the Completion Date, the removal of the GEC Names
from all premises, signs and vehicles which are used by or in
connection with any Avery Berkel Group Company;
(C) that from immediately following Completion no brochures, leaflets or
similar documents and no packaging containing any reference to the GEC
Names shall be printed, ordered or produced for use by an Avery Berkel
Group Company (or in connection with its business) and, with respect
to existing brochures, leaflets or similar documents and packaging
containing a reference to the GEC Names, that the relevant Avery
Berkel Group Company shall use its reasonable endeavours to ensure
that such references are deleted, pasted over or a sticker is put over
such references; and
(D) subject to the foregoing provisions of this sub-clause 8.7, that it
and each member of the Avery Berkel Group will use its respective
reasonable endeavours to procure that from immediately following
Completion no stocks, goods, products
<PAGE>
15
or services are manufactured, produced or provided showing or having
marked thereon or using the GEC Names provided that any stocks, goods
or products which, at the date hereof, show the GEC Names or have the
GEC Names marked thereon may be used by the Avery Berkel Group
Companies in the conduct of their business as carried on at the date
hereof.
8.8 The Purchaser shall procure the grant by the Avery Berkel Group with effect
from the Completion Date of a non-exclusive, irrevocable, royalty-free,
world-wide, perpetual licence to GEC for the benefit of itself and each
other member of the GEC Group to use (subject to sub-clauses 7.2 and 7.3)
all Intellectual Property (excluding the Avery Berkel Names) owned by any
member of the Avery Berkel Group and used in any part of the business of
the GEC Group now or at any time prior to Completion (excluding for the
avoidance of doubt the Avery Berkel Group Names, except as separately
agreed by the Purchaser or the Avery Berkel Group, subject to clause 10).
The licence shall be transferable by GEC to any purchaser (whether by
shares or assets) of all or a substantial part of any business using all or
any of such Intellectual Property.
8.9 GEC shall procure the grant by the GEC Group with effect from the
Completion Date of a non-exclusive, irrevocable, royalty-free, world-wide,
perpetual licence to the Purchaser for the benefit of itself and each
member of the Avery Berkel Group to use all Intellectual Property owned by
any member of the GEC Group and used in any part of the business of the
Avery Berkel Group now or at any time prior to Completion (excluding, for
the avoidance of doubt, the GEC Names). The licence shall be transferable
by the Purchaser to any purchaser (whether by shares or assets) of all or a
substantial part of any business using all or any of such Intellectual
Property.
8.10 If either GEC or the Purchaser discovers at any time after Completion that
any Avery Berkel Group Company owns any Intellectual Property at the
Completion Date which relates exclusively to any business carried on by the
GEC Group prior to the Completion Date, it shall immediately notify the
other. Thereafter, at the request and expense of GEC, the Purchaser
undertakes to execute such documents as GEC may reasonably require in order
to effect the assignment of any such Intellectual Property to the member of
the GEC Group nominated by GEC.
8.11 If either GEC or the Purchaser discovers at any time after Completion that
any GEC Group Company owns any Intellectual
<PAGE>
16
Property at the Completion Date which relates exclusively to any business
carried on by the Avery Berkel Group prior to the Completion Date, it shall
immediately notify the other. Thereafter at the request and expense of the
Purchaser, GEC undertakes to execute such documents as the Purchaser may
reasonably require in order to effect the assignment of any such
Intellectual Property to the member of the Purchaser's Group nominated by
the Purchaser.
8.12 The Purchaser undertakes itself to, and to procure that each Avery Berkel
Group Company shall, provide to GEC and any person authorised by GEC for
six years from Completion such access to the senior management, premises
and all the Books and Records and title deeds of the Avery Berkel Group and
the Associate Companies as GEC or any person authorised by GEC may
reasonably require in connection with the conduct of the business of the
GEC Group including without limitation the statutory audit of the GEC Group
for the financial period ended 31st March, 2000 and the proposed US listing
or the previous ownership of the Avery Berkel Group by the GEC Group or the
integration, and management, of the Benelux Companies into, and as part of,
the GEC Group upon reasonable notice and subject to giving such
undertakings as to confidentiality as the Purchaser or the relevant Avery
Berkel Group Company may reasonably require and the Purchaser shall, and
shall procure that the relevant Avery Berkel Group Company does, instruct
its directors and employees to give promptly all information and
explanations to GEC or any person authorised by GEC as they may reasonably
request in connection therewith.
8.13 GEC undertakes itself to, and to procure that each GEC Group Company shall,
provide to the Purchaser and any person authorised by the Purchaser for six
years from Completion such access to the premises and all the Books and
Records and title deeds of the GEC Group as the Purchaser or any person
authorised by the Purchaser may reasonably require in connection with the
conduct of the business of the Avery Berkel Group or the previous ownership
of the Avery Berkel Group by the GEC Group upon reasonable notice and
subject to giving such undertakings as to confidentiality as GEC or the
relevant GEC Group Company may reasonably require and GEC shall, and shall
procure that the relevant GEC Group Company does, instruct its directors
and employees to give promptly all information and explanations to the
Purchaser or any person authorised by the Purchaser as they may reasonably
request in connection therewith.
8.14 The Purchaser shall procure the grant by the Avery Berkel Group, with
effect from the Completion Date, of a non-exclusive,
<PAGE>
17
irrevocable, royalty-free, worldwide, perpetual licence to GEC for the
benefit of itself and each other member of the GEC Group to use all rights
under any patent or patent application (or any patent derived therefrom)
owned by any member of the Avery Berkel Group at the Completion Date for
the purpose of carrying on or developing any business conducted by the GEC
Group prior to Completion other than the Restricted Business (unless
permitted pursuant to sub-clause 7.3).
8.15 The Purchaser acknowledges that it is aware of the matters undertaken, and
to be undertaken in performance of the resolutions passed and decisions
made at, the board and general meetings of GAIL and GAL as set out in the
documents attached to the Disclosure Letter as item EX/GA/UK/33/103. The
Purchaser agrees that it will not, and will procure that no member of the
Purchaser's Group shall, take any steps to challenge the validity,
performance, satisfaction or enforceability thereof, except as may be
required by law.
8.16 (A) Subject to the following paragraphs of this sub-clause 8.16, GEC
covenants to pay on an indemnity basis the Purchaser (for itself and
as trustee for each member of the Avery Berkel Group) an amount equal
to the aggregate of all liabilities, losses, costs and expenses which
any Avery Berkel Group Company may hereafter suffer or incur (in this
sub-clause 8.16, together "LOSSES") as a result of the failure by any
member of the GEC Group to inform and/or consult with the works
council or trade union (if any) of the following companies pursuant to
the requirements of:
(i) the laws of France in relation to the indirect change of control
of Berkel S.A. contemplated by this Agreement;
(ii) the laws of the Netherlands in relation to the transfer of the
shares of Van Berkel Nederland B.V. and Berkel Produktie
Rotterdam B.V. to GEC prior to the date hereof; or
(iii)the laws of Belgium in relation to the transfer of the shares of
Berkel n.v./s.a. to GEC prior to the date hereof.
(B) The provisions of paragraphs 3.3-3.7 and 3.9-3.12 of Schedule 4 shall
apply, mutatis mutandis, to any matter which might fall within this
clause, as they apply for the purposes of any claim or other matter
referred to in such paragraphs provided that any liability of GEC
pursuant to
<PAGE>
18
paragraph (A) shall subsist (and shall be required to be discharged)
notwithstanding that the Purchaser has not completed or exhausted the
requirements in certain of such paragraphs to pursue an insurer or
other third party. If the Purchaser or a member of the Purchaser's
Group has a right against an insurer or other third party in respect
of the Loss in question, then nothing in this paragraph (B) shall
relieve or lessen any obligation of the Purchaser or member of the
Purchaser's Group to notify, make a claim or demand upon or pursue
such insurer or other third party and if the discharge by GEC of its
obligation to pay in paragraph (A) above would prejudice the right, or
the likelihood of the successful exercise of that right, against the
relevant insurer or third party, GEC shall advance the amount of the
Loss required to be paid by GEC pursuant to paragraph (A) above to the
Purchaser which shall promptly be reimbursed to GEC upon recovery from
the insurer or other third party. Any reimbursement pursuant to this
paragraph (B) by the Purchaser to GEC shall be after the deduction of
all reasonable costs, charges and expenses incurred by the Purchaser
or relevant member of the Purchaser's Group in recovering the relevant
sum from the insurer or other third party;
(C) GEC shall not be liable under this clause to the extent that any Loss
arises wholly or partly as a result of any failure on the part of any
member of the Purchaser's Group to provide information, undertake any
consultation or other process, hold discussions or participate in
meetings as the same may have been required by applicable law or
otherwise for the purposes of the matters set out in sub-clause
8.16(A)(i)-(iii) above.
(D) GEC shall not be liable to make any payment pursuant to sub-clause
8.16(A) above unless written notice demanding payment, specifying in
reasonable detail the calculation of such demand and the circumstances
giving rise thereto, has been given to GEC by the Purchaser on or
before the first anniversary of the Completion Date.
8.17 (A) Subject to the following paragraphs of this sub-clause 8.17, the
Purchaser covenants to pay on an indemnity basis GEC (for itself and
as trustee for each member of the GEC Group) an amount equal to the
aggregate of all liabilities, losses, costs and expenses which any GEC
Group Company may hereafter suffer or incur (in this sub-clause 8.17,
together "LOSSES") as a result of the failure by the Purchaser to
provide Berkel S.A. or GEC with such
<PAGE>
19
information as is necessary to allow the corporate officers of Berkel
S.A. to strictly comply with Article L.432-1 paragraph 3 of the French
Labour Code in relation to the indirect change of control of Berkel
S.A. contemplated by this Agreement.
(B) The provisions of paragraphs 3.3-3.7 and 3.9-3.12 of Schedule 4 shall
apply, mutatis mutandis, to any matter which might fall within this
clause, as they apply for the purposes of any claim or other matter
referred to in such paragraphs provided that any liability of the
Purchaser pursuant to paragraph (A) shall subsist (and shall be
required to be discharged) notwithstanding that GEC has not completed
or exhausted the requirements in certain of such paragraphs to pursue
an insurer or other third party. If GEC or a member of the GEC Group
has a right against an insurer or other third party in respect of the
Loss in question, then nothing in this paragraph (B) shall relieve or
lessen any obligation of GEC or member of the GEC Group to notify,
make a claim or demand upon or pursue such insurer or other third
party and if the discharge by the Purchaser of its obligation to pay
in paragraph (A) above would prejudice that right, or the likelihood
of the successful exercise of that right, against the relevant insurer
or third party, the Purchaser shall advance the amount of the Loss
required to be paid by the Purchaser pursuant to paragraph (A) above
to GEC which shall promptly be reimbursed to the Purchaser upon
recovery from the insurer or other third party. Any reimbursement
pursuant to this paragraph (B) by GEC to the Purchaser shall be after
the deduction of all reasonable costs, charges and expenses incurred
by GEC or relevant member of the GEC Group in recovering the relevant
sum from the insurer or other third party;
(C) The Purchaser shall not be liable under this clause to the extent that
any Loss arises wholly or partly as a result of any failure on the
part of any member of the GEC Group or the Avery Berkel Group to
provide information, undertake any consultation or other process, hold
discussions or participate in meetings as the same may have been
required by applicable law or otherwise for the purposes of the
matters set out in sub-clause 8.17(A) above.
(D) The Purchaser shall not be liable to make any payment pursuant to sub-
clause 8.17(A) above unless written notice demanding payment,
specifying in reasonable detail the calculation of such demand and the
circumstances giving
<PAGE>
20
rise thereto, has been given to the Purchaser by GEC on or before the
first anniversary of the Completion Date.
8.18 (A) Subject to the following paragraphs of this sub-clause 8.18, GEC
covenants to pay on an indemnity basis the Purchaser (for itself and
as trustee for each member of the Avery Berkel Group) an amount equal
to the aggregate of all liabilities, losses, costs and expenses which
any Avery Berkel Group Company may hereafter suffer or incur as a
result of:
(i) the execution by an Avery Berkel Group Company of those documents
attached to the Disclosure Letter as items EX/GA/UK/00/9,
EX/GA/UK/00/11 and EX/GA/UK/00/15 or the performance by an Avery
Berkel Group Company prior to Completion of its obligations
pursuant thereto
(ii) the articles of Berkel Operations GmbH and/or W&T Avery (Scales)
Limited not stating that the entire share capital of that company
is held by members of the Avery Berkel Group;
(iii) the transfers of the shares of the Benelux Companies to GEC
pursuant to those documents attached to the Disclosure Letter as
items EX/MB/NED/00/7 or the performance by an Avery Berkel Group
Company prior to Completion of its obligations pursuant thereto;
(iv) the recapitalisation of the amounts owing on inter-company
account by MVBP to GEC as described on those documents attached
to the Disclosure Letter as items EX/CEN2/16.
(B) The provisions of paragraphs 3.3-3.7 and 3.9-3.12 of Schedule 4 shall
apply, mutatis mutandis, to any matter which might fall within this
clause, as they apply for the purposes of any claim or other matter
referred to in such paragraphs provided that any liability of GEC
pursuant to paragraph (A) shall subsist (and shall be required to be
discharged) notwithstanding that the Purchaser has not completed or
exhausted the requirements in certain of such paragraphs to pursue an
insurer or other third party. If the Purchaser or a member of the
Purchaser's Group has a right against an insurer or other third party
in respect of the Loss in question, then nothing in this paragraph (B)
shall relieve or lessen any obligation of the Purchaser or member of
the Purchaser's Group to notify, make a claim or
<PAGE>
21
demand upon or pursue such insurer or other third party and if the
discharge by GEC of its obligation to pay in paragraph (A) above would
prejudice that right, or the likelihood of the successful exercise of
that right, against the relevant insurer or third party, GEC shall
advance the amount of the Loss required to be paid by GEC pursuant to
paragraph (A) above to the Purchaser which shall promptly be
reimbursed to GEC upon recovery from the insurer or other third party.
Any reimbursement pursuant to this paragraph (B) by the Purchaser to
GEC shall be after the deduction of all reasonable costs, charges and
expenses incurred by the Purchaser or relevant member of the
Purchaser's Group in recovering the relevant sum from the insurer or
other third party;
(C) GEC shall not be liable to make any payment pursuant to sub-clause
8.18(A) above unless written notice demanding payment, specifying in
reasonable detail the calculation of such demand and the circumstances
giving rise thereto, has been given to GEC by the Purchaser on or
before the fifth anniversary of the Completion Date.
(D) The Purchaser shall not be entitled to make any claim, and GEC shall
not be liable in respect of any claim, under this sub-clause 8.18
which relates to Taxation.
8.19 (A) Subject to the following paragraphs of this sub-clause 8.19, GEC
covenants to pay on an indemnity basis the Purchaser (for itself and
as trustee for each member of the Avery Berkel Group) an amount equal
to any amount which the Purchaser or GAL becomes obligated to pay to
the relevant authority which constitutes a repayment of the amount
received by GAL from that authority as a result of the non-observance
prior to the date hereof of the conditions on which such amount was
advanced by that authority as such matters are described in the
documents attached to the Disclosure Letter as items SUP/GA/UK/33/4
provided that this sub-clause 8.19 shall not be construed so as to
impose any obligation on the Purchaser or any member of the Avery
Berkel Group to cure any such non-observance of those conditions and
the indemnity in this sub-clause 8.19 shall apply notwithstanding any
failure on the part of the Avery Berkel Group or the Purchaser to
remedy any such non-observance.
(B) The provisions of paragraphs 3.3-3.7 and 3.9-3.12 of Schedule 4 shall
apply, mutatis mutandis, to any matter which might fall within this
clause, as they apply for the
<PAGE>
22
purposes of any claim or other matter referred to in such paragraphs
provided that any liability of GEC pursuant to paragraph (A) shall
subsist (and shall be required to be discharged) notwithstanding that
the Purchaser has not completed or exhausted the requirements in
certain of such paragraphs to pursue an insurer or other third party.
If the Purchaser or a member of the Purchaser's Group has a right
against an insurer or other third party in respect of the Loss in
question, then nothing in this paragraph (B) shall relieve or lessen
any obligation of the Purchaser or member of the Purchaser's Group to
notify, make a claim or demand upon or pursue such insurer or other
third party and if the discharge by GEC of its obligation to pay in
paragraph (A) above would prejudice that right, or the likelihood of
the successful exercise of that right, against the relevant insurer or
third party, GEC shall advance the amount of the Loss required to be
paid by GEC pursuant to paragraph (A) above to the Purchaser which
shall promptly be reimbursed to GEC upon recovery from the insurer or
other third party. Any reimbursement pursuant to this paragraph (B) by
the Purchaser to GEC shall be after the deduction of all reasonable
costs, charges and expenses incurred by the Purchaser or relevant
member of the Purchaser's Group in recovering the relevant sum from
the insurer or other third party;
(C) GEC shall not be liable to make any payment pursuant to sub-clause
8.19(A) above unless written notice demanding payment, specifying in
reasonable detail the calculation of such demand and the circumstances
giving rise thereto, has been given to GEC by the Purchaser on or
before the sixth anniversary of the Completion Date.
(D) The Purchaser agrees that it shall, and shall procure that each member
of the Purchaser's Group shall, not contact (directly or indirectly)
the relevant authority described pursuant to paragraph (A) above in
connection with amounts received by GAL as described pursuant to
paragraph (A) above.
8.20 At least 21 days before the Completion Date the Purchaser shall offer Dick
Goddard employment, subject to Completion, on appropriate terms and
conditions having regard to his current position and terms of remuneration
immediately before the date of this Agreement. During the period between
the Completion Date and the date when Mr. Goddard accepts such offer of
employment, if at all, GEC shall use its reasonable endeavours including
exercising its rights under his contract of employment
<PAGE>
23
to second Mr. Goddard to Avery Berkel to act as managing director of the
Avery Berkel Group and on terms that during such period of secondment the
Purchaser shall (conditionally on Completion) indemnify the member of the
GEC Group which is Mr Goddard's employer against any losses, liabilities,
cost damages or expenses arising from Mr. Goddard's employment.
8.21 If any amount payable to the Purchaser by GEC pursuant to any of the
indemnities and covenants to pay on an indemnity basis given by GEC under
this Agreement including under sub-clauses 8.16, 8.18, 8.19, 8.30 and 8.31
is subject to Taxation, GEC shall, instead of paying such amount, pay to
the Purchaser such amount as, after Taxation, shall ensure that the
Purchaser receives the same amount as if the amount in question had not
been subject to Taxation. If following the payment of an additional amount
under the foregoing provisions of this sub-clause 8.21, the Purchaser
subsequently obtains the benefit of a saving, reduction, credit or payment
in respect of Tax in consequence of which the net after-Tax amount received
by the Purchaser is greater than the amount which would have been payable
had no additional payment been so required, the Purchaser shall pay to GEC
such sum as shall leave the Purchaser (after such payment) in no better and
no worse position than it would have been had no additional payment been so
required within five Business Days of receipt of the benefit of the saving,
reduction, credit or repayment of Tax as the case may be. The provisions of
this sub-clause shall apply mutatis mutandis to any amount payable by the
Purchaser to GEC pursuant to sub-clause 8.17.
8.22 (A) GEC acknowledges that the Purchaser intends to complete an
accountants' report (and due diligence for that purpose) and a legal
due diligence report in respect of the Avery Berkel Group prior to
Completion and, accordingly, from the date of this Agreement until
Completion (or, if earlier, for the avoidance of doubt, the date upon
which this Agreement is terminated in accordance with its terms), GEC
shall procure that appointed representatives of the Purchaser, upon
giving reasonable notice and subject to giving such undertakings as to
confidentiality as GEC or its advisers may reasonably require, shall
be allowed, during normal business hours, reasonable access for that
purpose (which GEC may, in its reasonable discretion, require to be
supervised) to:
(i) the books and records of the Avery Berkel Group (including,
without limitation, forecasts, projects, budgets, all statutory
books, minute books, leases, contracts, insurance policies and
records, supply
<PAGE>
24
lists and customer lists) together with the right to take copies
at the expense of the Purchaser, subject to any restrictions on
access or copying which may be imposed by any party other than
the GEC Group or the Avery Berkel Group; and
(ii) senior management of the Avery Berkel Group and such other
Employees as GEC may agree, such agreement not to be unreasonably
withheld or delayed.
(B) It being acknowledged by GEC that the Borrower requires the information,
accounts and access referred to below in paragraphs (B)(i) and (ii) prior
to making a drawing under the Facilities to enable the Purchaser to fund
all or part of the Purchase Price:
(i) GEC shall procure between the date hereof and Completion that the
senior management of the Avery Berkel Group provide reasonable
assistance to the Purchaser and its representatives at the Purchaser's
cost upon reasonable notice and subject to giving such undertakings as
to confidentiality as GEC may reasonably require for the purposes of
(x) the preparation of a prospectus or similar document to be issued
in connection with a high yield bond issue by a member of the
Purchaser's Group for the purposes of funding all or a substantial
part of the Purchase Price (the "REGISTRATION STATEMENT") and (y) the
submission by the senior management of the Avery Berkel Group to the
Purchaser's Accountants of that accounting and other information
described on Schedule 11 in relation to the Avery Berkel Group, save
to the extent that the provision of such assistance would interfere
with the ability of the senior management to perform their roles in
the Avery Berkel Group, provided that the Purchaser shall procure that
such Registration Statement (or ancillary documents) makes no
reference to any member of the GEC Group or the GEC Names without the
prior written consent of GEC (such consent not to be unreasonably
withheld or delayed) and that a copy thereof (and the drafts thereof)
shall be provided to GEC promptly upon issue; and
(ii) GEC shall procure that as soon as reasonably practicable after the
date of this Agreement and in any event prior to Completion GEC's
Accountants perform the accounting work described in Schedule 11
<PAGE>
25
in relation to the Avery Berkel Group and provide the required
financial statements and information described therein in relation to
the Avery Berkel Group to the Purchaser and the Purchaser's
Accountants subject to the Purchaser and the Purchaser's Accountants
providing such undertakings as to confidentiality, indemnity or
otherwise as GEC or GEC's Accountants may reasonably require. The
fees, costs and expenses of GEC's Accountants in performing such work
shall be payable by GEC.
8.23 Promptly after signature of this Agreement, the Purchaser undertakes,
subject to compliance by GEC with its obligations under sub-clauses 6.8 and
8.22(B), to procure the preparation of the Registration Statement for the
issue by the relevant member of the Purchaser's Group of high yield bonds
for the purposes of raising approximately $120,000,000 and to issue the
same as soon as reasonably practicable after the later of delivery of the
accounts and information required to be delivered under sub-clauses 6.8 and
8.22(B) and the satisfaction of the conditions set out in Schedule 10
(subject always to sub-clauses 2.8, 2.10, 2.11, 2.14, 9.4, 9.5 and 9.6).
The Purchaser will keep GEC informed of the progress of the fund raising.
8.24 The Purchaser undertakes to use all reasonable endeavours to ensure
(insofar as it is able) that the proceeds of the Facilities are available
for Completion as soon as possible and prior to the Longstop Date PROVIDED
that such reasonable endeavours obligation shall not require the Purchaser
or any member of the Purchaser's Group to enter into arrangements on other
than normal commercial terms for a borrower and for a purpose of this
nature.
8.25 The Purchaser confirms that the balance of the Purchase Price is to be
funded by the subscription monies for at least $36,400,000 of common stock
and will, subject to the terms thereof, use its reasonable endeavours to
procure (insofar as it is able) that such funds (or funds from other
resources, if any, reasonably available to it on normal commercial terms
for a borrower and a purpose of this nature) are available at Completion.
8.26 GEC agrees and acknowledges that the Purchaser shall be entitled to take
out such insurance policies as it may consider appropriate in respect of
the Avery Berkel Group or activities of any member of the Avery Berkel
Group. Prior to taking out any such policies, the Purchaser shall consult
GEC.
<PAGE>
26
8.27 If the Purchaser considers that members of the Avery Berkel Group will
require the provision of certain services which are currently provided to
the Avery Berkel Group by members of the GEC Group, the Purchaser shall, as
soon as reasonably practicable after the date of this Agreement give
written notice to GEC of the services (the "SERVICES") which, in its
reasonable opinion, members of the Avery Berkel Group will require post-
Completion. Such services may include a period of participation in a GEC
Employee Benefit Arrangement where such continued participation is
permitted by law and the trustees or managers of the scheme and represents
a usual arrangement following the sale of the business or shares. The
written notice shall specify the period(s) during which the Services are
required and shall specify the terms and conditions upon which the Avery
Berkel Group would be willing to receive the benefit of such Services. GEC
and the Purchaser shall negotiate in good faith with a view to agreeing
prior to Completion (i) the specification of Services to be provided; and
(ii) the period(s) during which, and terms on which, such Services are to
be provided.
8.28 Between the date hereof and Completion, GEC shall use all reasonable
endeavours to reply, and shall procure that each member of the GEC Group
and the Avery Berkel Group replies, in good faith, in full as soon as
reasonably possible to the Pensions Questionnaire in relation to the Avery
Berkel Group and the emboldened and double asterisked questions in the long
form William M. Mercer Report dated 9th February, 2000 and amended on 6th
March, 2000.
8.29 (A) The parties acknowledge that their present estimate of the Recognised
Unfunded Liability is (Pounds)5,373,000. Following the replies to the
Pensions Questionnaire pursuant to sub-clause 8.28 above, the parties
shall discuss in good faith the amount of the Recognised Unfunded
Liability with the intention to estimate further such amount prior to
Completion.
(B) The Purchase Price shall be reduced (or, if the Recognised Unfunded
Liability is a positive asset, increased) by an amount equal to half
of the Recognised Unfunded Liability as estimated by the parties by
mutual agreement in good faith following the discussions described in
(A) above (the "ESTIMATED UNFUNDED LIABILITY").
8.30 GEC shall remain responsible for any entitlement of an Employee or Dick
Goddard to a retention bonus payable as a result of Completion and shall
indemnify the Purchaser against all
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27
liabilities, obligations, costs, claims and demands arising therefrom.
8.31 (A) Subject to the following paragraphs of this sub-clause 8.31, GEC
covenants to pay on an indemnity basis the Purchaser (for itself and
as trustee for each member of the Avery Berkel Group) an amount equal
to the aggregate of all liabilities, losses, costs and expenses (in
this sub-clause 8.31, together "LOSSES") which any Avery Berkel Group
Company may hereafter suffer or incur as a result of any liability
under any Employee Benefit Arrangement (for the avoidance of doubt
excluding any Recognised Unfunded Liabilities and Disclosed
Unrecognised Liabilities) relating to any period of service prior to
the Completion Date in any jurisdiction other than the United Kingdom
to the extent that such liability is not disclosed by the Disclosure
Letter or any of the documents attached to the Disclosure Letter. For
the purposes of this sub-clause 8.31 such Losses will be valued in
accordance with the General Mechanism set out in Part III of Schedule
13 after deduction of the value calculated in accordance with Part III
of Schedule 13 of any assets which are available to satisfy such
liabilities and are not already recognised as an asset in the Closing
Net Assets.
(B) The provisions of paragraphs 3.3-3.7 and 3.9-3.12 of Schedule 4 shall
apply, mutatis mutandis, to any matter which might fall within this
clause, as they apply for the purposes of any claim or other matter
referred to in such paragraphs provided that any liability of GEC
pursuant to paragraph (A) shall subsist (and shall be required to be
discharged) notwithstanding that the Purchaser has not completed or
exhausted the requirements in certain of such paragraphs to pursue an
insurer or other third party. If the Purchaser or a member of the
Purchaser's Group has a right against an insurer or other third party
in respect of the Losses in question, then nothing in this paragraph
(B) shall relieve or lessen any obligation of the Purchaser or member
of the Purchaser's Group to notify, make a claim or demand upon or
pursue such insurer or other third party and if the discharge by GEC
of its obligation to pay in paragraph (A) above would prejudice the
right, or the likelihood of the successful exercise of that right,
against the relevant insurer or third party, GEC shall advance the
amount of the Losses required to be paid by GEC pursuant to paragraph
(A) above to the Purchaser which shall promptly be reimbursed to GEC
upon recovery from the insurer or other third party. Any reimbursement
pursuant
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28
to this paragraph (B) by the Purchaser to GEC shall be after the
deduction of all reasonable costs, charges and expenses incurred by
the Purchaser or relevant member of the Purchaser's Group in
recovering the relevant sum from the insurer or other third party ;
(C) GEC shall not be liable to make any payment pursuant to sub-clause
8.31(A) above unless written notice demanding payment, specifying in
reasonable detail the calculation of such demand and the circumstances
giving rise thereto, has been given to GEC by the Purchaser on or
before the third anniversary of the Completion Date.
(D) GEC shall not be obliged to pay any amount under paragraph (A) above
until the aggregate amount for which GEC would (but for this paragraph
(D)) be liable exceeds (Pounds)1,000,000 in which event GEC shall only
be liable to the extent that such aggregate amount exceeds
(Pounds)1,000,000.
(E) If, between the date hereof and Completion, the parties agree that the
Pensions Questionnaire has not been replied to by GEC (or the relevant
member of the GEC Group or of the Avery Berkel Group) to an extent
which is as full as reasonably practicable, then the parties shall
discuss the amount of (Pounds)1,000,000 described in paragraph (D)
above with a view to reducing such amount.
8.32 An amount equal to the Disclosed Unrecognised Liabilities as adjusted in
accordance with Part V of Schedule 13 (for the avoidance of doubt only 51%
of the adjustment made in accordance with Part V of Schedule 13 for the
Indian benefit arrangements will be considered) will be included in the
Closing Net Assets for the purpose of the Aggregated Completion Balance
Sheet.
9. PURCHASER'S REMEDIES AND GEC'S LIMITATIONS ON LIABILITY
9.1 The Purchaser's right to claim that a Warranty has been breached shall be
limited as set out in sub-clause 9.2 and in Schedule 4 and no liability
shall attach to GEC in respect of claims under the Warranties and, where so
stated, the other provisions of this Agreement and the Share Purchase
Documents, as the case may be, if and to the extent that such limitations
apply.
9.2 The Purchaser shall not be entitled to claim that any fact causes any of
the Warranties to be breached if it was fairly disclosed in or pursuant to
the Disclosure Letter or in any document delivered with or referred to in
the Disclosure Letter including, without limitation, the Disclosure
Documents.
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29
9.3 If, following Completion, the Purchaser becomes aware that there has been
any breach of the Warranties or any other term of this Agreement the
Purchaser shall not be entitled to treat this Agreement as terminated but
shall, subject to Schedule 4 and applicable law, be entitled to claim
damages under this Agreement.
9.4 (A) If, between the time of this Agreement and Completion, the Purchaser
becomes aware that any of the Warranties were breached when made at
the date hereof or, if the Warranties had been repeated immediately
prior to Completion by reference to the circumstances then subsisting,
would have been breached at such time so as to give rise to a claim
under the Warranties in excess of (Pounds)5,000,000, then GEC or the
Purchaser shall be entitled to terminate this Agreement or defer
Completion to a date not more than 28 days after the date on which
Completion would otherwise have occurred by notice in writing to the
other provided that, if any such breach of the Warranties is capable
of remedy and within 10 Business Days of GEC receiving notice of the
breach such breach is remedied by GEC without cost or liability to the
Avery Berkel Group or the Purchaser, then the Purchaser shall not be
entitled to terminate this Agreement.
(B) If this Agreement is terminated in accordance with sub-clause 9.4(A),
then the Purchaser shall not be entitled to claim damages on the basis
that any matter causes any of the Warranties to be breached or renders
any Warranty misleading or under any covenant or provision of this
Agreement or have any other remedy and all obligations of the parties
under this Agreement shall end except for those expressly stated to
continue without limit in time.
(C) If the Purchaser's right of termination pursuant to paragraph (A)
above shall have arisen and the Purchaser does not exercise such
right, then the Purchaser shall not be entitled to claim damages or
have any other remedy under the Warranties or under any covenant or
provision of any of the Share Purchase Documents with respect to any
of the matters which gave rise to such right (including, without
limitation, those matters which would have given rise to a claim in
excess of (Pounds)5,000,000).
9.5 (A) If those Financing Conditions which are beyond the Purchaser's
reasonable control are not satisfied on or prior to the date on which
Completion would otherwise
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30
occur, then GEC or the Purchaser shall be entitled to terminate this
Agreement by notice in writing to the other.
(B) The Purchaser undertakes to GEC to use its reasonable endeavours to
ensure insofar as it is able that all the Financing Conditions are
satisfied, fulfilled or waived so as to permit the Borrower to draw
upon the Facilities in order to enable it to fund all or part of the
Purchase Price at Completion PROVIDED that such reasonable endeavours
shall not require the Purchaser or any member of the Purchaser's Group
to agree to borrow funds on other than normal commercial terms for a
borrower and for a purpose of this nature.
(C) The Purchaser shall only be able to terminate this Agreement pursuant
to paragraph (A) above if the Purchaser provides a copy of a written
notice from any of the Lenders, constituting a valid refusal by the
Lender to advance all or a substantial part of that part of the
Purchase Price which the Borrower intends on the date hereof to draw
from the Facilities as a result of non-satisfaction of any of the
Financing Conditions.
9.6 (A) If one or more of the Lenders fails, in breach of the terms of the
Facilities, to advance at Completion all or a substantial part of that
part of the Purchase Price which the Borrower intends on the date
hereof to draw from the Facilities, then GEC or the Purchaser shall be
entitled to terminate this Agreement by notice in writing to the
other.
(B) The Purchaser agrees to use its reasonable endeavours in relation to
the Facilities to ensure, insofar as it is able, that the Lenders are
not in breach of their obligation under the Facilities to advance all
or such part of the Purchase Price as described in paragraph (A) above
at Completion.
(C) The Purchaser shall only be able to terminate this Agreement pursuant
to paragraph (A) above if the Purchaser certifies the Lender's default
to GEC prior to Completion with such evidence and detail as GEC may
reasonably require in relation to such default.
10. CONDUCT OF BUSINESS BEFORE COMPLETION
10.1 Subject to sub-clause 10.3, GEC will procure that, between the time of this
Agreement and Completion, each member of the Avery Berkel Group will carry
on business in the normal course and in
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31
particular shall not do any of those matters set out in Schedule 9 without
the prior consent of the Purchaser (not to be unreasonably withheld or
delayed).
10.2 GEC agrees that it will not deliberately undertake any act, and will
procure that each member of the GEC Group and of the Avery Berkel Group
does not deliberately undertake any act, which would be reasonably likely
to result in any of the Warranties being breached between the time of this
Agreement and Completion.
10.3 Notwithstanding anything to the contrary in sub-clause 10.1 above or
Schedule 9, GEC shall be entitled to procure:
(A) that members of the Avery Berkel Group repay any amounts in the nature
of indebtedness (excluding any amounts owing to trade creditors which
shall be dealt with in the ordinary course) between the time of this
Agreement and Completion;
(B) that members of the Avery Berkel Group deal with their interests, or
perform obligations in respect of their interests, in immovable
properties or other assets (including, without limitation, the shares
of Berkel nv/sa, Van Berkel Nederland BV and Berkel Produktie
Rotterdam BV) consistently with the disclosures made in relation to
any of the foregoing in the Disclosure Letter; and
(C) that members of the Avery Berkel Group undertake those matters
described in the document attached to the Disclosure Letter as item
EX/CEN2/9, EX/MB/NED/00/7, EX/CEN2/16 and EX/GA/UK/33/103 provided
that members of the Avery Berkel Group may only enter into the IT
Services Agreement and the Benelux Agreements once such documents are
in the Agreed Form and the Purchaser covenants not unreasonably to
withhold or delay its consent to the execution and substance of such
documents after the date hereof and acknowledges that such documents
are substantially in the Agreed Form at the date hereof.
10.4 GEC undertakes that neither it nor any member of the GEC Group will
instruct any member of the Avery Berkel Group to undertake any act or
omission with the intent to affect artificially the amount of trade
creditors, trade debtors or stock of the Avery Berkel Group which would
otherwise be reflected in the Aggregated Completion Balance Sheet with a
view to provoking an Adjustment.
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32
11. PENSION ARRANGEMENTS
Each of GEC and the Purchaser shall comply with Schedule 5.
12. AGGREGATED COMPLETION BALANCE SHEET
12.1 GEC shall procure that as soon as reasonably possible, and in any event
within 60 days of the Completion Date, a draft Aggregated Completion
Balance Sheet and a draft statement of Closing Net Assets are prepared in
accordance with, firstly, the accounting principles, policies, bases and
methods and the same management judgments and level of prudence as actually
adopted in the preparation by GEC (or the relevant member of the GEC Group
or of the Avery Berkel Group) of the Aggregated Accounts (the "HISTORIC
PRACTICE"), and secondly, the accounting principles, practices and policies
of Marconi plc which are set out in the most recent annual report and
accounts of that company applied in accordance with practices, policies and
methodologies consistent with the preparation of the Aggregated Accounts,
provided that (in each case other than in the case of the methodology
referred to in Schedule 13) to the extent that any of the foregoing
accounting principles, practices, policies, bases or methodologies
(including Historic Practice) are contrary to, or inconsistent with, the
requirements of generally accepted accounting principles in the United
Kingdom in issue and applicable at the Completion Date ("UK GAAP") then UK
GAAP shall prevail, but all of the foregoing shall be subject to paragraphs
(A)-(Q) below:
(A) the Aggregated Completion Balance Sheet shall aggregate the
consolidated balance sheets of GAIL (including, for the avoidance of
doubt, Avery India Limited) and MVBP and shall include as investment
in associates the Avery Berkel Group's share of the aggregate assets
less the aggregate liabilities of the Identified Companies as shown in
the most recent monthly management accounts of the Identified
Companies as at the Completion Date. Goodwill on consolidation and
inter company accounts between the Avery Berkel Group Companies will
be eliminated in the Aggregated Completion Balance Sheet. The balance
sheets will be translated into pounds sterling at the closing mid-
points of the spot rates of the exchange rates for the relevant
currencies ruling on the Completion Date, as quoted in the Financial
Times published in London on the first Business Day following the
Completion Date or, in the absence of which, the rate of exchange for
such translation as quoted by HSBC Bank plc at 5:00 PM on the
Completion Date;
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33
(B) no account shall be taken of events occurring or information only
becoming available after 90 days after Completion;
(C) no account shall be taken of any changes in ownership of the Avery
Berkel Group Companies or any change in management strategy, direction
or priority which results from the change of ownership contemplated by
this agreement;
(D) no provision or accrual will be included for the costs of the
Purchaser or of GEC in relation to this Agreement and the transaction
contemplated thereby;
(E) no account shall be taken of (a) any proposals or arrangements (actual
or proposed) in connection with the financing of the Purchaser's
acquisition of the Avery Berkel Group Companies (including granting
any security in respect of the shares or the assets of any Avery
Berkel Group Company) or (b) any acts or proposals of the Purchaser in
relation to any Avery Berkel Group Company's dealings with its
customers or suppliers, the Avery Berkel Group's sales or for which a
provision would otherwise be made;
(F) no provision or reserve will be included for redundancy,
rationalisation or restructuring costs other than for any redundancy,
rationalisation or restructuring costs determined by the board of
directors of an Avery Berkel Group Company prior to Completion;
(G) Taxation shall be provided for as if an accounting period of GEC ended
on the Completion Date for the purposes of section 12(3) of ICTA 1988
and the equivalent thereof in any relevant jurisdiction. Provision
shall be made for Taxation (including deferred Tax) payable and
recoverable in respect of periods up to and including the period ended
on the Completion Date. For the purposes of the calculation of the
Closing Net Assets, the amount of any deferred Tax assets shall be as
so calculated but shall not be more than (Pounds)228,000;
(H) insurance prepayments and accruals in respect of the Avery Berkel
Group (or any Avery Berkel Group Company) at the Completion Date in
respect of insurance cover that is cancelled by GEC with effect from
Completion will be written off in the Aggregated Completion Balance
Sheet;
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34
(I) the minority interests in the Indian Companies will be included within
Share Capital and Reserves in the Aggregated Completion Balance Sheet
and will not be deducted in arriving at the Closing Net Assets;
(J) no account shall be taken of any reappraisal of the value of any fixed
assets of any Avery Berkel Group Company after 31st March, 1999 other
than to allow for applicable depreciation for the period to the
Completion Date;
(K) so as to include a provision in respect of the Recognised Unfunded
Liability as well as any Disclosed Unrecognised Liabilities in
accordance with the methodology set out in Schedule 13;
(L) no provision for the costs of the preparation of the February
Accounts, the March 1998 Accounts and the March 1999 Accounts or the
work required for the purposes of sub-clause 8.22 and Schedule 11
shall be included;
(M) no provision will be included nor any asset shown in respect of the
Australian Tax Losses (as defined in the Tax Covenant);
(N) any assets held for re-sale immediately prior to Closing will be
recorded at the lower of depreciated historical cost and the expected
re-sale value, less any costs to be incurred in the sale;
(O) an adjustment will be made to balance sheet items at the Completion
Date to remove any inter-group profit or loss on assets or liabilities
arising from transactions between Avery Berkel Group Companies and GEC
Group Companies after 1st January, 2000, other than arising in the
ordinary course of business;
(P) (i) stock will be subject to the Avery Berkel Group's normal year end
procedures and book to physical reconciliations will be performed
and all book to physical stock differences noted from physical
counts will be recorded as appropriate;
(ii) debtors and sales cut-off will be applied using appropriate cut-
off procedures, in a manner consistent with practices employed at
the year end;
(iii) creditors and purchases cut-off will be applied using
appropriate cut-off procedures, as at the year-end;
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35
(Q) amounts expensed in prior years under Historic Practice will not be
capitalised in the Aggregated Completion Balance Sheet including, but
not limited to, marketing and advertising costs, debt issuance costs,
employee benefits costs and future tax credits.
12.2 GEC shall deliver to the Purchaser as soon as reasonably possible and in
any event within 60 days of the Completion Date the draft Aggregated
Completion Balance Sheet and draft statement of Closing Net Assets and, if
the Completion Date is after 30th April 2000, the draft Compliance
Certificate.
12.3 The Purchaser and the Purchaser's Accountants shall be entitled to review
the draft Aggregated Completion Balance Sheet and the draft statement of
Closing Net Assets during the 60 day period following receipt from GEC.
12.4 At or before the end of the 60 day review period referred to in sub-clause
12.3, the Purchaser will either:
(A) notify GEC that the Purchaser accepts the draft Aggregated Completion
Balance Sheet and the draft statement of Closing Net Assets in their
entirety, in which case the Closing Net Assets shown in the draft
statement of Closing Net Assets shall be deemed to be the Closing Net
Assets and the Aggregated Completion Balance Sheet shall be deemed to
be the draft Aggregated Completion Balance Sheet; or
(B) deliver to GEC written notice of those items and, where practicable,
the amount in the draft Aggregated Completion Balance Sheet and the
draft statement of Closing Net Assets which the Purchaser disputes, in
which case the aggregate value of the Avery Berkel Group's assets and
the aggregate amount of the liabilities of the Avery Berkel Group not
affected by the Disputed Items will be deemed to be as set forth in
the draft Aggregated Completion Balance Sheet and draft statement of
Closing Net Assets and only the items or amounts identified by the
Purchaser (the "DISPUTED ITEMS") shall be deemed to be in dispute.
12.5 (A) If the Purchaser delivers notice under sub-clause 12.4(B) then the
parties shall use their respective reasonable endeavours to agree the
Disputed Items within 30 days, or such longer period as may be agreed
between the parties, failing which agreement, such Disputed Items
shall be referred for final binding determination to such firm of
accountants of international repute excluding PricewaterhouseCoopers
and Deloitte & Touche (the
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36
"EXPERT") as GEC and Purchaser may agree or, in the absence of
agreement within 14 days following the expiry of such 30 day period,
as may be selected at the request of either party by the President of
the Institute of Chartered Accountants in England and Wales, with
instructions that the Expert so selected render its decision within 30
days of such referral. In each case, the Expert so selected (either by
the parties or otherwise) shall act as expert and not as arbitrator
and the unresolved Disputed Items will be by the Expert so selected in
accordance with sub-clause 12.1 and such adjustments as are required
to be made as a result of the Expert's determination of such Disputed
Items shall be made to the draft Aggregated Completion Balance Sheet
and the draft Statement of Closing Net Assets which, following such
adjustments, shall then constitute the Aggregated Completion Balance
Sheet and the statement of Closing Net Assets. Absent manifest error,
the decision of the Expert so selected will be binding on the parties.
(B) In any reference to the Expert pursuant to paragraph (A) above:
(i) the costs of the Expert shall be paid by GEC and the Purchaser
equally or as otherwise determined by the Expert; and
(ii) each of GEC and the Purchaser shall respectively provide or
procure the provision to the Expert of all such information as
the Expert shall reasonably require including by their respective
advisers and the Books and Records and personnel of the Avery
Berkel Group (in the case of the Purchaser) and of the GEC Group
(in the case of GEC).
12.6 If the Closing Net Assets is equal to the Agreed Amount then the Adjustment
will equal zero. If the Closing Net Assets is greater than the Agreed
Amount, the Adjustment will be a positive amount equal to the amount by
which the Closing Net Assets is greater than the Agreed Amount. If the
Closing Net Assets is less than the Agreed Amount, the Adjustment will be a
negative amount equal to the amount by which the Closing Net Assets is less
than the Agreed Amount.
12.7 Within seven Business Days of the agreement or determination of the
Closing Net Assets:
(i) if the Adjustment is a positive amount the Purchaser shall pay to GEC
an amount equal to such Adjustment;
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37
(ii) if the Adjustment is a negative amount, GEC shall pay to the Purchaser
an amount equal to such Adjustment; and
(iii) if the Recognised Unfunded Liability as adjusted in accordance with
Part IV of Schedule 13 is a different amount to the Estimated Unfunded
Liability, then GEC shall pay an amount equal to half such difference
(if such difference is a positive amount) to the Purchaser or the
Purchaser shall pay an amount equal to half such difference (if such
difference is a negative amount) to GEC.
Any payment under this sub-clause 12.7(i) or (ii) shall only be made after
taking into consideration the Estimated Adjustment added to the Purchase
Price paid at Completion pursuant to paragraph 2(A) of Schedule 2.
12.8 The party (if any) making a payment under sub-clause 12.7 shall pay,
together with the sum to be paid thereunder, a further amount equivalent to
interest thereon at a rate equal to the sterling base rate from time to
time of the HSBC Bank plc, as if accrued from day to day from and including
the Completion Date up to (but not including) the date of actual payment.
All payments under sub-clauses 12.7 and 12.8 shall be made by way of
adjustment to the Purchase Price and allocated to the Avery Berkel Company
of which the Avery Berkel Group Company which gave rise to the adjustment
is a subsidiary or associated undertaking and in a manner consistent with
the original allocation.
12.9 The Purchaser shall, and shall procure that the Avery Berkel Group
Companies shall, co-operate fully with GEC and GEC's Accountants in respect
of the matters contemplated by this clause 12 and shall procure that GEC
and GEC's Accountants shall be given access without charge (and to the
extent reasonable) upon request to the working papers of the Purchaser, the
Avery Berkel Group and their accountants and those of the Purchaser's
Accountants and also to the accounting records and other relevant books and
records of the Purchaser, the Avery Berkel Group Companies and access to
relevant employees and advisers of the Purchaser and the Avery Berkel Group
Companies in relation to the draft Aggregated Completion Balance Sheet and
draft statement of Closing Net Assets.
12.10 GEC shall, and shall procure that each member of the GEC Group shall, co-
operate fully with the Purchaser and the Purchaser's Accountants in respect
of the matters contemplated by this clause 12 and shall procure that the
Purchaser and the
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38
Purchaser's Accountants shall be given access without charge (and to the
extent reasonable) upon request to the working papers of GEC and those of
GEC's Accountants and also to the accounting records and other relevant
books and records of GEC, members of the GEC Group and access to the
relevant employees and advisers of GEC and members of the GEC Group in
relation to the draft Aggregated Completion Balance Sheet and draft
statement of Closing Net Assets.
12.11 The Purchaser shall, and shall procure that the management, Employees and
accountants of each Avery Berkel Group Company shall, provide all such
information as GEC and GEC's Accountants may require for the purposes of
the discharge of GEC's obligation in sub-clause 12.1 above. This sub-
clause 12.11 is without prejudice to sub-clause 12.9.
12.12 Following the agreement or determination of the Closing Net Assets between
the parties, if the Completion Date is after 30th April, 2000 GEC shall
procure that GEC's Accountants provide a Compliance Certificate to GEC and
the Purchaser.
13. REMEDIES AND WAIVERS
13.1 No delay or omission on the part of either party to this Agreement in
exercising any right, power or remedy provided by law or under this
Agreement or any other documents referred to in it shall :
(A) impair such right, power or remedy; or
(B) operate as a waiver thereof
except in respect of any right, power or remedy exercisable by the
Purchaser under the provisions relating to limitations on liability under
the Warranties as set out in clause 9 and Schedule 4.
13.2 The single or partial exercise of any right, power or remedy provided by
law or under this Agreement shall not preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
14. ASSIGNMENT
14.1 Save as set out in sub-clause 14.2, this Agreement and the benefits
(including the Warranties) and obligations under it and any part of it
shall not be assignable by the Purchaser except that the Purchaser may,
upon giving written notice to GEC,
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39
assign the benefit (but not the burden) of this Agreement to a member of
the Purchaser's Group and the terms of such assignment shall provide that:
(A) any such assignee remains a member of the Purchaser's Group;
(B) before such assignee ceases to be a member of the Purchaser's Group,
the Purchaser will procure that the benefit of this Agreement is
assigned to the Purchaser or (upon giving further written notice to
GEC) to another company within the Purchaser's Group (any such
further assignment to be subject to the same conditions as set out in
this sub-clause 14.1) and provided that all benefits or rights
assigned by any assignment permitted by this sub-clause 14.1 shall
cease to be enforceable upon such assignee so ceasing to be a member
of the Purchaser's Group; and
(C) any assignee, including a subsequent assignee, shall agree with GEC
that if the liability of GEC shall be increased by reason of such
assignment, the assignee shall be entitled to claim against GEC only
such amount as would equal GEC's liability had no assignment taken
place.
14.2 The Purchaser shall be entitled to charge and assign all or any of the
Purchaser's rights under the Share Purchase Documents to the Lender and
its successors and assigns, as agent and security trustee by way of
security for the borrowings of the Purchaser's Group to be made pursuant
to the Facilities for the purposes of the transaction contemplated by this
Agreement, provided that no such charge or assignment shall relieve the
Purchaser or any assignee of any of its obligations hereunder and provided
further that if the liability of GEC shall be increased by reason of such
charge or assignment, the chargee or assignee shall be entitled to claim
against GEC only such amount as would equal GEC's liability had no such
charge or assignment taken place and provided further that the Purchaser
shall have no rights under this sub-clause 14.2 unless the Purchaser draws
upon the Facilities to fund all or a substantial part of the Purchase
Price.
14.3 This Agreement and the benefits and obligations under it and any part of
it shall not be assignable by GEC except that GEC may, upon giving written
notice to the Purchaser assign the benefit (but not the burden) of this
Agreement to a member of the GEC Group provided that:
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40
(A) any such assignee remains a member of the GEC Group;
(B) before such assignee ceases to be a member of the GEC Group, GEC will
procure that the benefit of this Agreement is assigned to GEC or
(upon giving further written notice to the Purchaser) to another
company within the GEC Group (any such further assignment to be
subject to the same conditions as set out in this sub-clause 14.3)
and provided that all benefits or rights assigned by any assignment
permitted by this sub-clause 14.3 shall cease to be enforceable upon
such assignee so ceasing to be a member of the GEC Group; and
(C) if the liability of the Purchaser shall be increased by reason of
such assignment, the assignee shall be entitled to claim against the
Purchaser only such amount as would equal the Purchaser's liability
had no assignment taken place.
15. FURTHER ASSURANCE
Each of the parties shall from time to time, on being required to do so by
the other, now or at any time in the future, execute or procure the
execution of all such documents in a form reasonably satisfactory to the
party concerned for giving full effect to this Agreement and securing to
the Purchaser or GEC (as the case may be) the full benefit of the rights,
powers and remedies conferred upon them in this Agreement.
16. ENTIRE AGREEMENT
16.1 This Agreement, the Tax Covenant, the Environmental Deed, the Warrant, the
Option Letter, the Disclosure Letter and any other documents referred to
in this Agreement (together, the "SHARE PURCHASE DOCUMENTS") constitute
the whole and only agreement between the parties relating to the sale and
purchase of the Avery Berkel Shares and, save to the extent expressly set
out in any of the Share Purchase Documents, supersede and extinguish any
prior drafts, agreements, undertakings, representations, warranties,
promises, assurances and arrangements of any nature whatsoever, whether or
not in writing, relating thereto.
16.2 Each party acknowledges that save to the extent expressly set out in this
Agreement, in entering into the Share Purchase Documents on the terms set
out therein, it is not relying upon any agreement, undertaking,
representation, warranty, promise, assurance or arrangement of any nature
whatsoever made or given by any other party or any other person, whether
or not in
<PAGE>
41
writing, at any time prior to the execution of this Agreement (including
without limitation any statement made, information given or opinion
expressed in the Information Memorandum or in any Disclosure Document) or
any warranty or condition implied by statute or otherwise and no
representations or warranties are given by GEC save for the Warranties.
16.3 Neither of the parties shall have any right of action against the other
party to this Agreement arising out of or in connection with any
agreement, undertaking, representation, warranty, promise, assurance or
arrangement of any nature whatsoever referred to in sub-clause 16.1 or
16.2 above (except in the case of fraud and/or save to the extent
expressly set out in the Share Purchase Documents).
16.4 The parties hereto do not intend that any term of this Agreement should be
enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999,
by any person who is not a party to this Agreement provided that this sub-
clause shall not prejudice the enforceability of any right or promise
given to a person as trustee for any other person pursuant to the terms
hereof.
17. NOTICES
17.1 Any notice or other communication given or made under or in connection
with the matters contemplated by this Agreement shall, unless expressly
stated otherwise, be in writing, other than writing on the screen of a
visual display unit or other similar device which shall not be treated as
writing for the purposes of this clause.
17.2 Any such notice or other communication shall be addressed as provided in
sub-clause 17.4 and sent by personal delivery or by first class post
Provided that if, in accordance with the above provisions, any such notice
or other communication is sent given or made outside Working Hours, such
notice or other communication shall be deemed to be sent given or made at
the start of Working Hours on the next Business Day.
17.3 In the absence of evidence of earlier receipt, a notice or other
communication is deemed given:
(i) if sent by personal delivery, when left at the address specified in
clause 17.4; and
(ii) if sent by first class post, two Business Days after it is posted.
<PAGE>
42
17.4 The relevant addressee and address of each party for the purposes of
this Agreement, subject to sub-clause 17.5, are:
<TABLE>
<CAPTION>
Name of party Addressee Address
------------- --------- -------
<S> <C> <C>
GEC The Secretary One Bruton Street,
London, W1X 8AQ
with a copy to Slaughter and May (FM/RRO) 35 Basinghall Street
London EC2V 5DB
The Purchaser The Company Secretary Broadwalk House
5 Appold Street
London EC2A 2HA
</TABLE>
17.5 Either party may notify the other party to this Agreement of a change to
its name, relevant addressee or address for the purposes of sub-clause
17.4 provided that such notification shall only be effective on:
(A) the date specified in the notification as the date on which the
change is to take place; or
(B) if no date is specified or the date specified is less than five clear
Business Days after the date on which notice is given, the date
falling five clear Business Days after notice of any such change has
been given.
18. ANNOUNCEMENTS
18.1 Subject to sub-clause 18.2 no public announcement concerning the sale of
the Avery Berkel Shares or any ancillary matter shall be made by either
party without the prior written approval of the other, such approval not
to be unreasonably withheld or delayed provided that the Purchaser shall
be entitled to issue the Registration Statement (subject to the proviso in
sub-clause 8.22(B)).
18.2 Either party may make a public announcement concerning the sale of the
Avery Berkel Shares or any ancillary matter if required by the law of any
relevant jurisdiction or any securities exchange or regulatory or
governmental body to which either party is subject, wherever situated,
including (without limitation) the London Stock Exchange Limited or The
Panel on Takeovers and Mergers, whether or not the requirement has the
force of law, Provided that any such announcement shall be made only after
consultation with the other party (to the extent practicable).
18.3 The restrictions contained in this clause shall continue to apply after
Completion without limit in time.
<PAGE>
43
19. COSTS AND EXPENSES
The Purchaser shall bear and pay the cost of all stamp duty, stamp duty
reserve tax and other similar duty, levy or tax and all registration fees
which may result in any jurisdiction from the execution and performance of
this Agreement and the other agreements entered into pursuant hereto and
the transfer of the Avery Berkel Shares to the Purchaser and the
transactions contemplated hereby. Nothing in this clause shall make the
Purchaser liable for any stamp duty or equivalent transfer tax to the
extent that the duty or tax levied relates to the transfer of any assets to
any member of the Avery Berkel Group following Completion or prior (if
unpaid) as a result of any Warranty being untrue when given. Save as
otherwise stated in this clause or in any other provision of this
Agreement, each party shall pay its own costs and expenses in relation to
the negotiations leading up to the sale and transfer of the Avery Berkel
Shares and in relation to the preparation, execution and carrying into
effect of this Agreement and all other documents referred to in it and the
transactions contemplated hereby.
20. COUNTERPARTS
20.1 This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
20.2 Each counterpart shall constitute an original of this Agreement, but all
the counterparts shall together constitute but one and the same instrument.
21. TIME OF ESSENCE
Save as otherwise expressly provided, time is of the essence of each
provision of this Agreement.
22. EFFECT OF COMPLETION
22.1 All provisions of this Agreement shall, so far as they are capable of being
performed or observed, continue in full force and effect notwithstanding
Completion except in respect of those matters then already performed and
Completion shall not constitute a waiver of any of the Purchaser's rights
in relation to this Agreement or the Share Purchase Documents.
<PAGE>
44
22.2 Without prejudice to clause 22.1 the Warranties shall not be extinguished
by Completion.
23. INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
then such provision will be deemed to be severed from this Agreement and if
possible replaced by a lawful provision which carries out, as closely as
possible, the intention of the parties under this Agreement and where
permissible that shall not affect or impair:
(A) the legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or
(B) the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.
24. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
25. JURISDICTION
Each party to this Agreement irrevocably agrees that any Proceedings
against it may be brought in the courts of England. Nothing contained in
this clause shall limit either party's rights to take Proceedings against
the other in any other court of competent jurisdiction, nor shall the
taking of Proceedings in one or more jurisdictions preclude the taking of
Proceedings in any other jurisdiction, whether concurrently or not, to the
extent permitted by the law of such other jurisdiction.
26. PROPERTY PROVISIONS
26.1 GEC shall indemnify the Purchaser against all costs, claims, damages,
demands and liabilities arising out of the transfer to GEC of the leasehold
properties at 39 Raglan Street, Coventry and 329/333 High Street, Stratford
by GAL (in satisfaction of a dividend in specie declared prior to the date
hereof as disclosed in the Disclosure Letter) without the consent of the
relevant landlord to such transfer first being obtained and GEC will use
all reasonable endeavours to procure that GAL submits and diligently
pursues applications for such consent.
<PAGE>
45
26.2 (A) GEC shall as soon as reasonably practicable following the date of this
Agreement procure that GEC Avery Properties Limited shall (at its own
cost) apply for voluntary first registration of all that land conveyed
to Avery Properties Limited at Tamebridge by a conveyance dated 14th
July 1972 between W&T Avery Limited (1) and GEC Avery Properties
Limited (2) ("the Tamebridge Land") and GEC shall (for so long as it
is able to do so) procure that GEC Avery Properties Limited shall (1)
use all reasonable endeavours to deal with any Land Registry
requisitions and (2) pay all Land Registry fees payable in connection
with such application.
(B) The Purchaser will, for so long as the Tamebridge Land is vested in an
Avery Berkel Company, procure that the relevant Avery Berkel Company
will allow GEC and its authorised agents to have reasonable access to
the deeds and documents of title (including pre-registration deeds) to
the Tamebridge Land for inspecting and to produce copies.
26.2 GEC shall as soon as reasonably practicable procure the transfer to GAL of
the Avery Berkel Properties at Unit 1 Ashley Hill Estate Bristol and 34/36
Napier Court, Wardpark Industrial Estate, Cumbernauld and shall pay all
stamp duty and registration fees in connection with such transfers.
26.3 Before Completion, GEC must procure that the following documents in respect
of the property known as One Berkel Drive, LaPorte, Indiana, USA are
provided to the Purchaser or its solicitors:
(i) a commitment to issue title insurance; and
(ii) an opinion from an appropriately qualified US Counsel regarding the
zoning of the property.
26.4 GEC shall as soon as reasonably practicable (to the extent it has not done
so at the date of this Agreement) procure the grant to GAL of leasehold
interests in the following properties, upon the terms of the draft Leases
contained within the Disclosure Documents:-
(i) Car Park, Sertec House
(ii) 75 Campbell Road, Maidstone;
(iii) Waterhouse Lane, Chelmsford;
<PAGE>
46
(iv) Boughton Road, Rugby;
(v) East Lane Business Park, Wembley;
(vi) Land at Titchfield, Fareham;
(vii) Magnet House, Bristol
provided that, in the case of the Leases to be granted at Sertec site car
park and 75 Campbell Road, Maidstone, the relevant Lease shall contain a
modified repairing obligation which shall state that the Tenant shall in
each case maintain and keep the relevant Property in no worse state and
condition than is evidenced by a photographic schedule of condition to be
agreed between the parties and attached to the relevant Lease, and in this
regard the Purchaser agrees to provide to GEC (at the Purchaser's cost)
copies of the relevant schedules of condition as soon as reasonably
practicable following the date of this Agreement.
AS WITNESS the hands of the duly authorised representatives of the parties
the day and year first above written.
<PAGE>
47
SCHEDULE 1
DEFINITIONS
(A) In this Agreement, unless otherwise specified the following terms and
expressions shall have the following respective meanings:
"ACCOUNTS" the financial statements of GAIL and GAL for
the year ended on the Accounts Date, including
a balance sheet and profit and loss account, a
copy of each of which is attached to the
Disclosure Letter as items GA/UK/00/2.1/3 and
GA/UK/33/2.1/3;
"ACCOUNTS DATE" 31st March, 1999;
"ACT" the Companies Act 1985, as amended;
"ADJUSTMENT" means the amount (which may be a positive or
negative amount) by which the Closing Net
Assets exceeds or is less than the Agreed
Amount;
"AGREED AMOUNT" (Pounds)46,375,000;
"AGREED FORM" in relation to any document means such
document in a form agreed and initialled for
the purposes of identification by or on behalf
of the Purchaser or by or on behalf of the
Seller;
"AGGREGATED ACCOUNTS" the aggregated unaudited profit and loss
account and balance sheet of the Avery Berkel
Group (including for this purpose the
Associated Companies and the Benelux
Companies) for the year ended on 31st March,
1998 and separately for the year ended on the
Accounts Date, a copy of which is attached to
the Disclosure Letter as item EX/CEN2/17 and
EX/CEN2/1;
"AGGREGATED COMPLETION the balance sheet which is an aggregation of
BALANCE SHEET" the consolidated balance sheet of GAIL and
its subsidiaries and subsidiary and
associated undertakings and the consolidated
balance sheet of MVBP and its subsidiaries
and subsidiary and associated undertakings as
at the Completion Date,
<PAGE>
48
prepared and agreed pursuant to clause 12;
"ASSOCIATE COMPANIES" the following companies, or any of them:
(A) Avery India Limited;
(B) Schenk Avery Limited;
(C) Ceylon Weighing Machines Limited;
(D) Avery Kenya Limited;
(E) Constructora de Basculas S.A. de C.V.;
(F) Berkel Obrecht AG;
(G) Berkel Scanvekt A.S.; and
(H) Kenya Scale Co.;
"ASSOCIATE COMPANY SHARES" the issued shares in the Associate Companies;
"AVERY BERKEL COMPANIES" GAIL and MVBP and "Avery Berkel Company"
means either of the Avery Berkel Companies
individually;
"AVERY BERKEL GROUP" GAIL, MVBP and those subsidiaries and
subsidiary undertakings details of which such
companies are set out in Part B of Schedule
7, or any of them, but (for the avoidance of
doubt) excluding the Indian Companies for the
purposes of Schedule 3;
"AVERY BERKEL GROUP COMPANY" any member of the Avery Berkel Group and
"Avery Berkel Group Companies" means such
members collectively, but (for the avoidance
of doubt) excluding the Indian Companies for
the purposes of Schedule 3;
"AVERY BERKEL GROUP the issued shares in the Avery Berkel Group
COMPANIES SHARES" Companies, as set out in Parts A and B of
Schedule 7;
"AVERY BERKEL NAMES" each of the names Avery, Berkel, Avery Berkel
Oertling and Brecknell;
"AVERY BERKEL GROUP NAMES" means Avery, Berkel, Avery Berkel, Oertling
Brecknell;
"AVERY BERKEL PROPERTIES" the Overseas Properties and the UK Properties
and "Avery Berkel Property" means any one of
them;
<PAGE>
49
"AVERY BERKEL SHARES" the GAIL Shares and the MVBP Shares;
"BENELUX AGREEMENTS" the Distributor Agreement between GAL and Van
Berkel Nederland B.V., the Slicer Supply
Agreement between Berkel Produktie Rotterdam
B.V. and GAL and related intellectual property
agreements (including with respect to Berkel
n.v./s.a.) to be entered into between such
companies and also MVBP between the date
hereof and Completion, a draft of which in
substantially the Agreed Form has been
delivered to the Purchaser's Solicitors prior
to the date hereof;
"BENELUX COMPANIES" (A) Van Berkel Nederland B.V.;
(B) Berkel Produktie Rotterdam B.V.; and
(C) Berkel n.v./s.a.;
or any of them;
"BOOKS AND RECORDS" has its common law meaning and includes,
without limitation, all notices,
correspondence, orders, inquiries, drawings,
plans, books of account and other documents
and all computer disks or tapes or other
machine legible programmes or other records;
"BORROWER" the member of the Purchaser's Group which is
to enter into the Facilities as borrower prior
to Completion;
"BUSINESS DAY" a day (other than a Saturday or a Sunday) on
which banks generally are open for business in
London other than solely for trading and
settlement in Euro;
"CERTIFICATED PROPERTIES" each of the freehold and leasehold properties
described in Part I of Schedule 8 and
"Certificated Property" means any one of them;
"CLOSING NET ASSETS" the amount established by reference to the
Aggregated Completion Balance Sheet, and
stated in the statement of Closing Net Assets
(prepared and agreed pursuant to clause 12),
as being equal to the aggregate of the values
of the assets
<PAGE>
50
(including tangible but excluding intangible
assets) less the aggregate of the values of
the liabilities, in each case as at the
Completion Date;
"COMPLETION" completion of the sale and purchase of the
Avery Berkel Shares under this Agreement;
"COMPLETION DATE" the fifth Business Day after the day on which
the last of those conditions listed in
paragraphs (A)-(F) and (H)-(J) of Schedule 10
shall have been satisfied or waived in
accordance with this Agreement or, if the
Purchaser serves the notice described in sub-
clause 9.4(A), the fifth Business Day
following GEC's remedying of the breach as
described in such sub-clause (if later) but,
in any event, no earlier than the first
Business Day falling after 7 weeks after the
date of submission of the February Accounts,
the March 1998 Accounts, the March 1999
Accounts and the other financial information
described in Schedule 11 as required to be
supplied, or procured, by GEC or any member of
the Avery Berkel Group to GEC and the
Purchaser pursuant to sub-clauses 6.8 and
8.22(B) (unless the Purchaser so elects by not
less than 5 Business Days notice in writing to
GEC) and no later than the Longstop Date, or
such other date as the parties may agree,
subject in each case to sub-clauses 2.8, 2.10,
2.11, 2.14, 9.4, 9.5 and 9.6;
"COMPLIANCE CERTIFICATE" a certificate signed by GEC's Accountants
addressed to the Purchaser and GEC, including
if GEC's Accountants so require a disclaimer
of liability to the Purchaser, stating that
the Aggregated Completion Balance Sheet and
the Closing Net Assets as finally agreed or
determined pursuant to clause 12 have been
determined in accordance with clause 12;
"DEFERRAL NOTICE" has the meaning given to it in sub-clause
2.10;
<PAGE>
51
"DISCLOSED UNRECOGNISED the aggregate amount of the liabilities of
LIABILITIES" the Avery Berkel Group in respect of the
matters set out in Part II of Schedule 13 as
at the Completion Date in respect of service
prior to such Completion Date but on the basis
that only 51% of the value of the liabilities
for the Indian benefit arrangements shall be
included;
"DISCLOSURE DOCUMENTS" has the meaning given to it in the Disclosure
Letter;
"DISCLOSURE LETTER" the letter dated the date hereof written by
GEC to the Purchaser for the purposes of
clause 9 and delivered to the Purchaser or the
Purchaser's Solicitors before the execution of
this Agreement;
"DORMANT COMPANIES" those companies listed in Schedule 12, or any
of them;
"EMPLOYEE" a person employed by any Avery Berkel Group
Company at the date hereof (including any
officer of such Company);
"EMPLOYEE BENEFIT means any legally enforceable plan, fund,
ARRANGEMENT" scheme, programme, contract, policy or
arrangement for Employees and/or former
employees of the Avery Berkel Group, but
excluding associate companies where less than
50% of the equity is held, and those entitled
under them providing pensions, lump sum
benefits payable on retirement, US type
deferred compensation plans, post retirement
medical benefits, termination indemnities and
gratuities (excluding severance and redundancy
payments) and IBNR type provisions for self
insured benefits payable on death, disability,
accident and medical claims;
"ENCUMBRANCE" any mortgage, charge (fixed or floating),
pledge, lien, hypothecation, trust, right of
set-off, right of pre-emption or other third
party right;
"ENVIRONMENT" any and all organisms (including without
limitation man), ecosystems, property and
<PAGE>
52
the following media: air, (including without
limitation, the air within buildings and the
air within other natural or man-made
structures whether above or below ground);
water (including without limitation, water
under or within land or in drains or sewers
and coastal and inland waters); and land
(including without limitation, land under
water);
"ENVIRONMENTAL AUDITS" means the audits carried out by Dames & Moore
and NNC on behalf of GEC which for the
avoidance of doubt are attached to the
Disclosure Letter;
"ENVIRONMENTAL DEED" the environmental deed referred to, inter
alia, in Schedule 2 and initialled by or on
behalf of GEC and the Purchaser for the
purposes of identification and to be executed
at Completion;
"ENVIRONMENTAL LAWS" any and all international, EU, national,
federal state or local statutes (which for the
avoidance of doubt shall include Section 57 of
the Environment Act 1995 and the first set of
guidance and regulations adopted under those
provisions and any subsequent set of such
statutory guidance or relations to the extent
that it does not impose more onerous
obligations or increased liability than would
have been the case under the first set of such
statutory guidance or regulations (the "NEW
CONTAMINATED LAND POWER")), bylaws, orders,
regulations or subordinate legislation or
common law (excluding those laws relating
specifically to town planning matters and to
the health and safety of workers in the work
place) which are in force and binding on the
Avery Berkel Group or Avery Berkel Properties
at the date of this Agreement and which have
as a purpose or effect the protection of,
and/or the prevention of harm or damage to,
the Environment and/or the provision of
remedies in respect of harm or damage to the
Environment;
<PAGE>
53
"ENVIRONMENTAL WARRANTIES" means the warranties in paragraph 22 of
Schedule 3;
"ESTIMATED ADJUSTMENT" the Adjustment, as estimated by GEC in good
faith and notified to the Purchaser not less
than 3 Business Days prior to Completion;
"FACILITIES" those sources of debt finance which the
Purchaser has on or before the date hereof
informed GEC are its intended sources to be
used for funding the Purchase Price at
Completion including the Senior Loan and the
high yield bond (as referred to in the
commitment letter from Lehman Brothers Inc.
and others in a draft dated 7th March, 2000)
or such alternative sources of finance as the
Purchaser may after the date hereof agree with
GEC (such agreement not to be unreasonably
withheld or delayed) in good faith to use as
its intended sources for funding the Purchase
Price at Completion;
"FEBRUARY ACCOUNTS" the combined profit and loss account of the
Avery Berkel Group (including for this purpose
Avery India Limited at 100 per cent.) for the
11 month period ended 26th February, 2000 to
be prepared by GEC's Accountants pursuant to
instructions to be given by GEC appropriate to
ensure compliance in all material respects
with GEC's obligations in relation to Schedule
11 and agreed to by the Purchaser (such
agreement not to be unreasonably withheld or
delayed) and to be delivered to GEC and the
Purchaser prior to Completion;
"FINANCING CONDITIONS" the conditions to which the obligations of
the Lender to advance funds under the
Facilities are or will (upon execution of the
Facilities) be subject;
"GAIL" GEC Avery International Limited (registered
in England no. 42732);
<PAGE>
54
"GAIL SHARES" the 36,900,498 issued ordinary shares in the
capital of GAIL;
"GAL" GEC Avery Limited (registered in England no.
595129);
"GEC'S ACCOUNTANTS" Deloitte & Touche;
"GEC GROUP" Marconi plc (registered in England no.
3846429) and all subsidiaries and subsidiary
undertakings from time to time of Marconi plc
other than the Avery Berkel Group, or any of
them;
"GEC GROUP COMPANY" any member of the GEC Group and "GEC Group
Companies" means such members collectively;
"GEC NAMES" any of the names GEC, General Electric,
General Electric Company and Marconi;
"GEC PLAN" has the meaning given to it in Schedule 5;
"GEC SECURITIES" any guarantee, indemnity, performance bond or
other security or contingent obligation in the
nature of a financial obligation including,
without limitation, letters of comfort or
support entered into or granted by GEC or any
GEC Group Company in relation to or arising
out of any obligations or liabilities of any
Avery Berkel Group Company;
"GEC'S SOLICITORS" Slaughter and May;
"GLOBAL MARKET COLLAPSE" a fundamental collapse either in the
international capital markets for high yield
bonds of entities equivalent to the Purchaser
or the relevant member of the Purchaser's
Group or the capacity of the senior or
syndicated debt markets, in each case, for
amounts comparable to the amount of the
Purchase Price proposed by the Purchaser to be
sourced from such markets which fundamentally
affects such markets for such purpose in
Europe or the United States of America;
<PAGE>
55
"HSR ACT" the Hart-Scott-Rodino Antitrust Improvement
Act of 1976, as amended, and the rules and
regulations promulgated thereunder;
"ICTA" the Income and Corporation Taxes Act 1988;
"IDENTIFIED COMPANIES" the Associate Companies excluding the Indian
Companies;
"INDIAN COMPANIES" means Avery India Limited and Schenk Avery
Limited, or either of them;
"INFORMATION MEMORANDUM" the Information Memorandum dated November,
1999 in connection with the transaction
contemplated by this Agreement;
"INTELLECTUAL PROPERTY" patents, trade marks and service marks,
business names, domain names, rights in
designs, copyrights (whether or not any of
these is registered and including applications
for registration of any such thing), rights in
inventions, Know-How, trade secrets and other
confidential information, rights in databases
and topography rights and all rights or forms
of protection of a similar nature or having an
equivalent or similar effect to any of these
which may subsist anywhere in the world;
"IT SERVICES AGREEMENT" the Agreement for the Provision of the
Transitional IT Services between GAL and the
Benelux Companies to be entered into between
the date hereof and prior to Completion, a
draft of which in substantially the Agreed
Form has been delivered to the Purchaser's
Solicitors prior to the date hereof;
"KNOW-HOW" means industrial, technical or commercial
information and techniques, in whatever form
stored, including without limitation, data
relating to inventions, formulae, test
results, testing procedures, specifications,
quotations, marketing methods and any such
information contained
<PAGE>
56
in reports, research and project reports and
instruction and training manuals;
"LENDER" the lenders to members of the Purchaser's
Group for the purpose of financing all or a
substantial part of the Purchase Price or any
other commercial lenders who provide moneys on
any subsequent refinancing of that financing;
"LONGSTOP DATE" 31st July, 2000 or, if the Purchaser serves
the Deferral Notice, the day which is 60 days
and five Business Days later;
"MANAGEMENT ACCOUNTS" the aggregated unaudited management accounts
of the Avery Berkel Group (including for this
purpose Avery India Limited) as at, and for
the 9 month period ended on, 31st December
1999, a copy of which is attached to the
Disclosure Letter as attachment 4;
"MARCH 1998 ACCOUNTS" the audited combined profit and loss account
and balance sheet and cashflow statement of
the Avery Berkel Group (including for this
purpose the Associated Companies and the
Benelux Companies) for the year ended on 31st
March, 1998 to be prepared by GEC's
Accountants pursuant to instructions to be
given by GEC appropriate to ensure compliance
with Schedule 11 and agreed to by the
Purchaser (such agreement not to be
unreasonably withheld or delayed) and to be
delivered to GEC and the Purchaser prior to
Completion;
"MARCH 1999 ACCOUNTS" the audited combined profit and loss account
and balance sheet and cashflow statement of
the Avery Berkel Group (including for this
purpose the Associate Companies and the
Benelux Companies) for the year ended on 31st
March, 1999 to be prepared by GEC's
Accountants pursuant to instructions to be
given by GEC appropriate to ensure compliance
in all material respects with GEC's
obligations in relation to Schedule 11 and
agreed to
<PAGE>
57
by the Purchaser (such agreement not to be
unreasonably withheld or delayed) and to be
delivered to GEC and the Purchaser prior to
Completion;
"MVBP" Maatschappij van Berkel's Patent BV
(registered in Rotterdam no. 40723);
"MVBP SHARES" the 65,244,080 issued ordinary shares and the
200 issued priority shares in the capital of
MVBP or such other shares as may be in issue
following the recapitalisation and/or
conversion of the capital of MVBP to occur on
or around the date hereof;
"NOTARIAL DEED" a deed in such form and substance as may be
required by Dutch law for the purposes of
transferring the MVBP Shares to the Purchaser
(or its nominees) in the form agreed between
the parties prior to Completion (such
agreement not to be unreasonably withheld or
delayed);
"OPTION LETTER" the Option Letter in the Agreed Form to be
executed at Completion in relation to the
acquisition of the share capital of the
Benelux Companies by the Purchaser;
"OVERSEAS PROPERTIES" each of the overseas properties described in
Part III of Schedule 8 and "Overseas Property"
means any one of them;
"PENSIONS QUESTIONNAIRE" the questionnaire in the Agreed Form relating,
inter alia, to pensions and employee
healthcare benefits;
"PERMITS" as at the date of this Agreement any and all
licences, consents, permits, authorisations,
approvals, registrations, permissions, made or
issued pursuant to or under, or required by,
Environmental Laws in relation to the conduct
of the business of each Avery Berkel Group
Company;
"PROCEEDINGS" any proceeding, suit or action arising out of
or in connection with this Agreement;
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58
"PURCHASE PRICE" (Pounds)105,000,000, as adjusted as described
(inter alia) in sub-clause 8.29(B) and
pursuant to the other terms of this Agreement;
"PURCHASER'S ACCOUNTANTS" PricewaterhouseCoopers;
"PURCHASER'S GROUP" the Purchaser, its subsidiaries and subsidiary
undertakings, any holding company of the
Purchaser and all other subsidiaries or
subsidiary undertakings of any such holding
company in each case from time to time;
"PURCHASER'S SOLICITORS" Ashurst Morris Crisp;
"RECOGNISED UNFUNDED the aggregate of the liabilities of the Avery
LIABILITY" Berkel Group in respect of the matters set out
in Part I of Schedule 13 as at the Completion
Date in respect of service prior to such
Completion Date less both (Pounds)700,000 in
respect of the Northwestern Mutual life
assurance policies and any other assets which
are available to satisfy the Recognised
Unfunded Liabilities in respect of the benefit
arrangements set out in Schedule 13 Part I.1
and I.2 and are not already recognised as an
asset in the Closing Net Assets;
"RELIEF" has the same meaning as given in the Tax
Covenant;
"REGISTRATION STATEMENT" has the meaning given in sub-clause 8.22(B);
"RESTRICTED BUSINESS" (i) the manufacture and sale of industrial
weighing equipment used for weighing,
filling, counting and related computer-
linked weighing equipment; vehicle
weighing systems; precision balances;
retail weighing scales for shops and
supermarkets; slicers, breadslicers,
mincers, choppers, mixers and
tenderisers; and
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(ii) the provision of maintenance and repair
services relating to any of the equipment
described in sub-paragraph (i) above,
as all such business is conducted by the
Avery Berkel Group as at the date hereof;
"SECURITIES" any guarantee, indemnity, performance bond or
other security or contingent obligation in the
nature of a financial obligation including,
without limitation, letters of comfort or
support entered into or granted by any Avery
Berkel Group Company in relation to or arising
out of any obligations or liabilities of any
GEC Group Company;
"SENIOR EMPLOYEE" any Employee whose basic salary for the year
ended on the Accounts Date was in excess of
(Pounds)30,000 per annum;
"SENIOR LOAN" the senior credit facilities to be made
available by, or as arranged by, the Lender
pursuant to the Senior Term Loan Facilities
(as defined in the commitment letter from
Lehman Brothers Inc. and others in draft dated
7th March, 2000) proposed to be entered into
by the Borrower prior to Completion for the
purposes of funding all or part of the
Purchase Price;
"SHARE PURCHASE DOCUMENTS" has the meaning given in sub-clause 16.1;
"SYSTEMS" means all computer or information technology
systems material to the business of the Avery
Berkel Group;
"TAX AND TAXATION" each have the meaning given to them in the
Tax Covenant;
"TAX COVENANT" the tax covenant referred to, inter alia, in
Schedule 2 and set out in Schedule 6;
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"UK PROPERTIES" each of the United Kingdom properties
described in Part II of Schedule 8 and "UK
Property" means any one of them;
"US DEFERRED each have the meaning given in Schedule 5;
ARRANGEMENT" AND
"US SCHEME"
"VAT" any tax imposed by a member state of the
European Union pursuant to the Sixth Council
Directive of the European Communities;
"WARRANT" the warrant, reflecting the principal terms
set out in Schedule 14, over the equity
capital of Weigh-Tronix LLC to be issued by
the Purchaser in favour of GEC (or such member
of the GEC Group as GEC shall prior to
Completion nominate) at Completion;
"WARRANTIES" the warranties set out in Schedule 3 given by
GEC and "WARRANTY" shall be construed
accordingly; and
"WORKING HOURS" 9.30 a.m. to 5.30 p.m. on a Business Day.
(B) In this Agreement, unless otherwise specified:
(i) references to clauses, sub-clauses, paragraphs, sub-paragraphs, and
Schedules are to clauses, sub-clauses, paragraphs, sub-paragraphs of,
and schedules to, this Agreement;
(ii) a reference to any statute or statutory provision shall be construed
as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted except to the extent that any
amendment or modification made after the date of this Agreement would
increase or alter the liability of GEC or the Purchaser under this
Agreement;
(iii)references to "(Pounds)" are references to the lawful currency for the
time being of the United Kingdom;
(iv) references to a "COMPANY" shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
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61
(v) references to a "PERSON" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association or partnership (whether or not having
separate legal personality);
(vi) a person shall be deemed to be connected with another if that person
is connected with another within the meaning of section 839 of the
Income and Corporation Taxes Act 1988;
(vii)references to writing shall include any modes of reproducing words
in a legible and non-transitory form;
(viii) references to the knowledge or awareness of GEC (or any similar
expression) in relation to the Warranties shall be deemed to refer to
the actual knowledge of GEC, having made reasonable enquiries of Dick
Goddard, Robin Richardson, Gerry Boothroyd, Dave Ellis, Tim Cooper,
Richard Wilkinson, Mark Busby, Alan Bunn, Sue Atkinson and Rob Fogarty
and in relation to the Environmental Warranties to the extent they
apply to UK Properties only, Tony Adcock and in relation to the
pension Warranties only, Steven Hart;
(ix) references in paragraph 17 of Schedule 3 to this Agreement to the
awareness of the Owner are to be construed as references to the actual
knowledge of Anthony Adcock;
(x) words or phrases beginning with the introduction of the word "include"
or "including" are to be interpreted without limitation;
(xi) references to times of the day are to London time;
(xii)headings to clauses and Schedules are for convenience only and do
not affect the interpretation of this Agreement;
(xiii) the Schedules and any attachments (but not the Tax Covenant) form
part of this Agreement and shall have the same force and effect as if
expressly set out in the body of this Agreement, and any reference to
this Agreement shall include the Schedules;
(xiv)references to the masculine gender shall include the feminine and
the neuter (and vice versa) and references to the singular shall
include the plural (and vice versa);
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62
(xv) any obligation imposed by this Agreement upon a party with respect to
any company which is not a wholly-owned subsidiary of that party to
procure the performance or observance of any matter by any such
company shall be construed only as an obligation on that party to
ensure so far as it is reasonably able (having regard to the relative
size of its direct or indirect shareholding in the relevant company)
that the relevant company complies with or performs or observes the
relevant matter; and
(xvi) references to any English legal term for any action, remedy, method
of judicial proceeding, legal document, statutory provision, legal
status, court, official or any legal definition, concept or thing
shall in respect of any jurisdiction other than England be deemed to
include what most nearly approximates in that jurisdiction to the
English legal term save where specific reference is made to the
relevant term in such other jurisdiction.
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63
SCHEDULE 2
COMPLETION ARRANGEMENTS
PART 1
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1. GEC'S OBLIGATIONS
At Completion, GEC shall deliver or procure the delivery to the Purchaser
or the Purchaser's Solicitors of:
(A) duly executed transfers in respect of the GAIL Shares in favour of the
Purchaser (or its nominee) and share certificates representing such
GAIL Shares in the name of the relevant transferors;
(B) a duly executed Notarial Deed in relation to the MVBP Shares;
(C) a counterpart original of the Tax Covenant duly executed by GEC;
(D) a counterpart original of the Environmental Deed duly executed by GEC;
(E) a counterpart original of the Option Letter duly executed by GEC and,
if required, a counterpart original of the Warrant duly executed by
GEC or other relevant member of the GEC Group;
(F) where not in the possession of the relevant Avery Berkel Group
Company, the statutory books (which shall be written up to but not
including the Completion Date), the certificate of incorporation (and
any certificate of incorporation on change of name) and common seal
(if any), of each Avery Berkel Group Company incorporated in England
and Wales;
(G) subject to applicable law, if required by the Purchaser, letters of
resignation from the auditors of each of the Avery Berkel Group
Companies containing (if appropriate) a statement under Section 394(1)
of the Act and an acknowledgement that they have no claim against any
Avery Berkel Group Company for compensation for loss of office or
otherwise save with respect to fees accrued;
(H) where necessary, irrevocable powers of attorney executed by each of
the holders of the Avery Berkel Shares in favour of the Purchaser (or
its nominee(s)) to enable the Purchaser
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64
(or its nominee(s)) (pending registration of the transfers of the
Avery Berkel Shares) to exercise all voting and other rights attaching
to the Avery Berkel Shares and to appoint proxies for this purpose;
(I) certificates of title in the Agreed Form dated the date of this
Agreement in respect of each of the Certificated Properties;
(J) a copy of a board or board committee resolution of GEC approving the
execution and entering into by GEC of this Agreement, the Tax
Covenant, the Environmental Deed, the Disclosure Letter, any other
Share Purchase Document to which it is a party and the transactions
contemplated herein;
(K) a letter from HSBC Bank plc addressed to GAIL in the form sent to the
Purchaser's Solicitors prior to the date hereof relating to the
release of GAIL and other bodies corporate from the GEC Group off-set
arrangements and also the completion letter relating to such release
letter duly signed by GEC, provided that GEC shall have no obligations
under this paragraph (K) unless the Purchaser has complied with its
obligations under paragraph 2(B)(vi) below;
(L) all confidentiality agreements relating to the disposal of the Avery
Berkel Group contemplated by this Agreement (subject to their terms);
(M) the deeds and documents of title for the following Properties:-
Land at Foundry Row, Redruth
Land at Carden Street, Worcester
27 Jarman Way, Orchard Road Industrial Estate, Royston
10A Humber Bridge Industrial Estate, Barton on Humber
224 Helen Street, Govan, Glasgow
9 Glebe Street. Dumfries
Intec House, Tamebridge (save to the extent these are at HM Land
Registry)
Sertec House, Tamebridge (save to the extent these are at HM Land
Registry)
Soho Foundry, Soho Lane, Smethwick
3-4 North Court, Bridgend Industrial Estate, Bridgend
Kings Street, St. Nicholas Industrial Estate, Carlisle
Chorley Street Industrial Estate, Bolton
Unit 1, Ashley Hill Trading Estate, Bristol
Unit 9, Dartford Trade Park, Dartford
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65
37 West Bowling Green Street, Edinburgh
Unit 89C, New Buildings Industrial Estate, Victoria Road, Londonderry
Unit 4, Old Town Station Industrial Estate, Swindon
3 Royal London Estate, West Road, Tottenham, London N17
72/76 Baggrave Street, Leicester
One Berkel Drive, Laport, Indiana 46350, USA
Apex Industrial Estate, Beroni, Republic of South Africa
(or, if GEC does not deliver such documents, it shall procure that
they are available for inspection and collection at GAL's registered
office or other suitable location agreed between the parties);
(N) a letter from each of the firms of solicitors responsible for the
preparation of the Certificates of Title in respect of the
Certificated Properties, addressed to such Lender as the Purchaser may
have specified not less than five Business Days prior to the
Completion Date, confirming that such Lender may rely on each
Certificate as if the relevant Certificate had been addressed to that
Lender; and
(O) a copy of the Benelux Agreements duly executed by the relevant Benelux
Companies party thereto (but only if the Purchaser shall have given
its consent thereto as contemplated by sub-clause 10.3(C)).
1.2 GEC shall procure that a board meeting of each of the Avery Berkel
Companies be held at which:
(A) it shall be resolved that each of the transfers relating to the Avery
Berkel Shares shall be approved for registration and (subject only to
the transfer being duly stamped, if so required by applicable law)
that each transferee be registered as the holder of the Avery Berkel
Shares respectively in the register of members; and
(B) the resignation of auditors (if applicable) shall be accepted;
and that a copy of the minutes of each duly held board meeting and the
resignations and acknowledgements referred to are delivered to the
Purchaser or the Purchaser's Solicitors.
1.3 GEC shall procure the signing by Dames & Moore and in respect of NNC use
reasonable endeavours to procure the signing of reliance agreements in a
suitable form (taking into account so far as is practicable the Purchaser's
requests) granting to the Purchaser
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66
(and such persons as the Purchaser may nominate to the extent that this is
permitted) at the Purchaser's cost, the right to rely on the Environmental
Audits. For the avoidance of doubt it is acknowledged by both parties that
failure to provide such reliance agreements shall not be a material breach
of this Agreement.
PART 2
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2. PURCHASER'S OBLIGATIONS
The Purchaser shall:
(A) pay to GEC to account number 10010006 in the name of The General
Electric Company, p.l.c. at HSBC Bank plc, 16 King Street, Covent
Garden, London WC2E 8JF (Branch Sort Code: 40-04-09) the Purchase
Price (which shall be adjusted by adding an amount equal to the
Estimated Adjustment);
(B) deliver to GEC's Solicitors:
(i) a counterpart original of the Notarial Deed duly executed by
the Purchaser;
(ii) a counterpart original of the Tax Covenant duly executed by
the Purchaser;
(iii) a counterpart original of the Environmental Deed duly executed
by the Purchaser;
(iv) a counterpart original of the Option Letter duly executed by the
Purchaser and a counterpart original of the Warrant duly executed
by Weigh-Tronix LLC;
(v) a certified copy of the board resolutions of the Purchaser
approving the execution and entering into by the Purchaser of the
Share Purchase Documents to which party and the transactions
contemplated herein;
(vi) a letter from HSBC Bank plc addressed to GEC in the form sent to
the Purchaser's Solicitors prior to the date hereof relating to
the release of GEC and other bodies corporate from the GEC Group
off-set arrangements and also the completion letter relating to
such release letter duly signed by the Purchaser and HSBC Bank
plc.
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SCHEDULE 3
THE WARRANTIES
1. CAPACITY AND OBLIGATIONS OF GEC
1.1 GEC has the requisite power and authority to enter into and perform this
Agreement and the other Share Purchase Documents to which it is party.
1.2 This Agreement constitutes and the other Share Purchase Documents to which
it is party will, when executed, constitute binding obligations of GEC.
1.3 The execution and delivery of, and the performance by GEC of its
obligations under this Agreement and the other Share Purchase Documents to
which it is party will (or with the giving of notice or lapse of time or
both would) not:
(A) result in a breach of any provision of the memorandum or articles of
association of GEC;
(B) result in a breach of any order, judgment or decree of any court or
governmental agency to which GEC is a party or by which GEC is bound;
or
(C) require the consent of its shareholders.
2. ACCOUNTS
2.1 The Aggregated Accounts:
(A) were properly extracted from the audited consolidation returns of the
members of the Avery Berkel Group (including for the purposes of this
paragraph (A) the Associate Companies and also including the Benelux
Companies); and
(B) were properly prepared under the accounting policies set out in Note 1
to the Aggregated Accounts.
2.2 The Accounts:
(A) were, at the time they were prepared, prepared in accordance with then
applicable Statements of Standard Accounting Practice, as adopted by
the Accounting Standards Board and published by the Institute of
Chartered Accountants in England and Wales, and the then applicable
Financial Reporting Standards, developed and issued by the
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Accounting Standards Board, applicable to a company incorporated in
England and Wales;
(B) showed a true and fair view of the state of affairs of the relevant
company as at the Accounts Date and of the profit or loss of the
relevant company for the financial year ended on such date;
(C) were prepared using accounting policies consistent with those used in
the preparation of accounts for the immediately preceding accounting
period except as described in any notes thereto; and
(D) comply with the relevant requirements of the Act.
2.3 The Management Accounts, as at the date at which they were prepared, having
regard to the purpose for which, and context in which, such accounts were
prepared:
(A) have been compiled in good faith from information properly extracted
from the books and records of the Avery Berkel Group (including for
this purpose the Associate Companies);
(B) have been compiled from information available at the time they were
prepared;
(C) have been prepared using accounting policies consistent with those
adopted by the Avery Berkel Group for the purposes of reporting to GEC
as at 31st December, 1999, and
(D) are not known by GEC to contain any misstatement which is material in
the context of the Avery Berkel Group (including for this purpose the
Associate Companies) as a whole.
2.4 So far as GEC is aware, the accounting records of each Avery Berkel Group
Company have been maintained to the extent required by applicable law to an
extent which is material in the context of the Avery Berkel Group as a
whole.
2.5 The amount of the profit for the year and of the equity shareholders funds
of the Avery Berkel Group (including for this purpose the Associate
Companies and the Benelux Companies) as shown in the March 1998 Accounts
and the March 1999 Accounts are each not materially lower than the amount
of the profit for the year and of the equity shareholders funds of the
Avery Berkel Group (including for this purpose the Associate Companies and
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69
the Benelux Companies) as shown in the relevant Aggregated Accounts.
2.6 The March 1998 Accounts and the March 1999 Accounts showed a true and fair
view of the state of affairs of the Avery Berkel Group (including for this
purpose the Associate Companies and the Benelux Companies) as at 31st
March, 1998 and the Accounts Date respectively and of the profit for the
year of the Avery Berkel Group (including for this purpose the Associate
Companies and the Benelux Companies) for the financial years ended on each
such date respectively.
3. AVERY BERKEL GROUP COMPANIES SHARES
3.1 The Avery Berkel Group Companies Shares comprise the whole of each
respective Avery Berkel Group Company's issued and allotted share capital
and all of them are fully paid up.
3.2 There is no agreement or commitment outstanding which calls for the
allotment, issue, redemption, sale, repayment or transfer of, or accords to
any person the right to call now or in the future for the allotment, issue,
redemption, sale, repayment or transfer of, any shares (including the Avery
Berkel Group Companies Shares) or debentures in or securities of any Avery
Berkel Group Company shown in Schedule 7 as being held by or for the
benefit of a member of the Avery Berkel Group (excluding, for the avoidance
of doubt, the Associate Companies).
3.3 GEC or a member of the Avery Berkel Group is the legal and beneficial owner
of all the issued shares of each Avery Berkel Group Company.
4. ARRANGEMENTS BETWEEN THE GEC GROUP AND THE AVERY BERKEL GROUP
Save for indebtedness arising in the ordinary course of trading, no
indebtedness (actual or contingent) and no contract other than at arm's
length is outstanding between any Avery Berkel Group Company and any GEC
Group Company.
5. GROUP STRUCTURE
5.1 Save for any interests held in another Avery Berkel Group Company or in an
Associate Company, no Avery Berkel Group Company has any interest in the
share capital of any body corporate or undertaking.
5.2 No Avery Berkel Group Company acts or carries on business in partnership or
through a joint venture with any other person or
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is a member (otherwise than through the holding of share capital) of any
corporate or unincorporated body, undertaking or association or holds or is
liable on any share or security which is not fully paid up or which carries
any liability.
5.3 The identity of the members of each Avery Berkel Group Company shown in
Parts A and B of Schedule 7 are true and accurate and the other facts set
out in Parts A and B of Schedule 7 and the facts set out in Schedule 8 are
true and accurate in all material respects.
5.4 Since 1st January, 1994, no Avery Berkel Group Company has effected the
sale of any share capital of any company to any person other than members
of the Avery Berkel Group.
6. OPTIONS, MORTGAGES AND OTHER ENCUMBRANCES
There is no Encumbrance on, over or affecting the Avery Berkel Group
Companies Shares or any of them and there is no agreement or commitment to
give or create any and, so far as GEC is aware, no claim has been made by
any person to be entitled to any.
7. STATUTORY RETURNS
7.1 The copies of the constitutional documents of each Avery Berkel Group
Company which are in the Disclosure Documents are complete and accurate
copies of the constitutional documents of the Avery Berkel Group Companies,
have attached to them copies of all resolutions and other documents
required by law to be so attached and set out to the extent required by
applicable law the rights and restrictions attaching to each class of share
capital of that Avery Berkel Group Company.
7.2 The statutory books (including all registers and minute books) of each
Avery Berkel Group Company are up to date and accurate in all material
respects and no written notice or allegation that has not been complied
with that any of them is incorrect or should be rectified has been received
in the three years ended on the date of this Agreement.
7.3 All documents which should have been delivered within the last three years
by each Avery Berkel Group Company to the Registrar of Companies (or its
equivalent in respect of jurisdictions other than England and Wales) have,
in all material respects, been properly so delivered.
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8. MATERIAL CONTRACTS
8.1 There is no subsisting contract to which any Avery Berkel Group Company is
a party which was entered into otherwise than in the ordinary course of
business of the Avery Berkel Group.
8.2 No Avery Berkel Group Company has received written notice that it is in
breach of any contract with its customers or its suppliers where there is a
likelihood that such breach would be material in the context of the
business of the Avery Berkel Group as a whole.
8.3 No Avery Berkel Group Company is aware of any circumstances which are
likely to lead to a claim by an Avery Berkel Group Company against any of
that company's suppliers or customers which would be material in the
context of the Avery Berkel Group as a whole.
8.4 There is attached to the Disclosure Letter a copy of all equipment rental,
hire and hire purchase contracts and finance and operating leases which
relate to assets used by any Avery Berkel Group Company to which such Avery
Berkel Group Company is a party and which involve an individual annual
charge in excess of (Pounds)50,000 and the term of which will not expire
within 12 months from the date hereof and, so far as GEC is aware, no Avery
Berkel Group Company has received written notice that it is in breach of
any such hire purchase contracts or finance or operating leases where there
is a likelihood that such breach would be material in the context of the
business of the Avery Berkel Group as a whole.
8.5 The material details of the agency and distributorship agreements to which
any Avery Berkel Group Company is party and which are material in the
context of the business of that company are attached to the Disclosure
Letter and, so far as GEC is aware, no Avery Berkel Group Company has
received written notice that it is in breach of any such agency or
distributorship agreements where there is a likelihood that such breach
would be material in the context of the business of the Avery Berkel Group
as a whole.
8.6 There is not outstanding any guarantee, indemnity, performance bond or
suretyship given by any Avery Berkel Group Company to secure any obligation
of any person not within the Avery Berkel Group.
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8.7 Neither GEC nor any GEC Group Company has given any guarantee, indemnity,
performance bond or suretyship which is outstanding to secure any
obligation of any Avery Berkel Group Company.
8.8 Material details of the Avery Berkel Group's contracts:
(A) with its largest 15 customers by sales values (including equipment
sales and service contracts, but excluding chargeable repairs)
measured on the basis of the aggregate of amounts billed by the Avery
Berkel Group for the period 1st April, 1998 to 31st March, 1999; and
(B) with its largest ten suppliers (but ignoring suppliers of capital
equipment) measured by purchase values for the year ended 31st March,
1999;
are attached to the Disclosure Letter. For these purposes, "customer" and
"supplier" means a person (the "contracting party") together with its
subsidiaries and subsidiary undertakings and its and their franchisees and
concessionaires who have contracted with a member of the Avery Berkel Group
for the purchase or, as the case may be, the supply of goods and, in the
case of a customer, includes a person (a "sub-contractor") with whom any
such contracting party (including its subsidiaries and subsidiary
undertakings and its and their franchisees and concessionaires) has
contracted for the purchase of goods of the same type where the sub-
contractor has contracted with the relevant member of the Avery Berkel
Group for the purchase of such goods, taken as a single customer or, as the
case may be, as a single supplier.
8.9 Except as regards payments due to the Avery Berkel Group, so far as GEC is
aware, no party (other than an Avery Berkel Group Company) is in default of
any agreement to which a member of the Avery Berkel Group is a party which
default is material in the context of the Avery Berkel Group as a whole.
8.10 A copy of the standard terms and conditions of business of the Avery Berkel
Group used in each of the United Kingdom, France, the United States of
America, Germany and South Africa are attached to the Disclosure Letter.
8.11 No Avery Berkel Group Company is a party to and has liability under any
material trading contract which:
(A) has an original fixed term of at least three years of which at least
six months is unexpired; or
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(B) requires payment by that member to be effected by reference to
fluctuations in any securities index or in the rate of exchange for
any currency (excluding hedging, foreign currency and treasury
management matters or pursuant to trading arrangements undertaken in
the ordinary course).
8.12 No member of the Avery Berkel Group has received notice in writing that it
has in the 12 months prior to the date hereof manufactured, sold or
supplied any product which does not in any material respect comply with
applicable law.
8.13 No member of the Avery Berkel Group has, since 31st March, 1994, effected
any general product recall of products manufactured and supplied by that
member. In this paragraph 8.13, "general product recall" means a general
direction by the central management of the Avery Berkel Group to those
persons to whom a particular category of products was supplied for the
return of 33% or more of that category of product (calculated by reference
to the aggregate value of the gross sales of that category of product in
any whole financial year of the Avery Berkel Group since that date).
8.14 So far as GEC is aware, no Avery Berkel Group Company has received written
notice that it is in material breach of its contracts taken as a whole with
any one of those customers identified pursuant to paragraph 8.8(A) above.
8.15 So far as GEC is aware, no Avery Berkel Group Company is aware of any
circumstances which are likely to lead to a material claim by an Avery
Berkel Group Company against any of those of that company's suppliers or
customers which are identified pursuant to paragraph 8.8 above.
9. EVENTS SINCE THE ACCOUNTS DATE
9.1 Since the Accounts Date:
(A) the business of the Avery Berkel Group has been carried on in its
ordinary course;
(B) no resolution of any Avery Berkel Group Company in general meeting has
been passed other than resolutions relating to the routine business of
annual general meetings;
(C) no dividend or distribution has been declared, paid or made and no
share or loan capital has been issued or agreed to be issued or put
under option by any Avery Berkel Group Company; and
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(D) no customer or supplier which falls within the requirements of
paragraph 8.8 above has notified in writing an intention to cease, or
(so far as GEC is aware) ceased, purchasing from or supplying to the
Avery Berkel Group.
9.2 A list of all individual legally binding capital commitments of each Avery
Berkel Group Company requiring expenditure after the date hereof of a
principal amount in excess of (Pounds)75,000 is attached to the Disclosure
Letter.
9.3 No Avery Berkel Group Company has, at any time since the Accounts Date,
repaid, redeemed or purchased (or agreed to repay, redeem or purchase) any
of its shares, or otherwise reduced (or agreed to reduce) its issued share
capital or any class of it or capitalised (or agreed to capitalise) in the
form of shares, debentures or other securities or in paying up any amounts
unpaid on any shares, debentures or other securities, any profits or
reserves of any class or description or passed (or agreed to pass) any
resolution to do so.
9.4 Each of the Dormant Companies has been dormant within the meaning of
section 250(3) of the Act during the period beginning on the Accounts Date
and ending on the date hereof.
9.5 Since the Accounts Date, so far as GEC is aware, no Avery Berkel Group
Company has made a distribution within the meaning of Section 263(2) of the
Act except out of profits available for the purpose.
10. GRANTS
A list and the amount of all grants, aid and subsidies paid or made to any
Avery Berkel Group Company during the last six years by, and of all
outstanding claims by any Avery Berkel Group Company for any such grant,
aid or subsidy from, any supra-national, national or local authority or
government agency are set out in the Disclosure Letter and, except in
relation to the sale of the Avery Berkel Shares, none of GEC, any GEC Group
Company or any Avery Berkel Group Company has done or failed to do any act
or thing where there is a likelihood that the same could result in all or
any part of any such grant, aid or subsidy becoming repayable or forfeited.
11. LICENCES AND RESTRICTIONS ON THE BUSINESS OF EACH AVERY BERKEL GROUP
COMPANY
11.1 The Avery Berkel Group has all material statutory and regulatory licences,
consents, permissions and approvals required for the
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carrying on of the business now being carried on by the Avery Berkel Group.
11.2 All licences, consents, permissions and approvals referred to in paragraph
11.1 above are in full force and effect and GEC is not aware that there is
a likelihood that any of such licences, consents, permissions or approvals
will be revoked or not renewed or that the terms will be altered to the
material detriment of the Avery Berkel Group, except as a result of the
change of control of the Avery Berkel Group contemplated by this Agreement.
12. BORROWINGS
12.1 Details of all overdraft, loan and other financial facilities available to
the Avery Berkel Group from any person other than a member of the GEC Group
are set out in the Disclosure Letter.
12.2 Except for the borrowings referred to in paragraph 12.1 above and except
for any obligations to a member of the Avery Berkel Group and except for
any loans made (or agreed to be made) to an employee of the Avery Berkel
Group in the ordinary course, no Avery Berkel Group Company has any
outstanding loan capital nor has any Avery Berkel Group Company incurred or
agreed to incur any borrowing which it has not repaid or satisfied, or lent
or agreed to lend any money which has not been repaid to it or owns the
benefit of any debt present or future (other than debts due to it or owed
to it in the ordinary course of trading).
13. INSOLVENCY
13.1 No resolution has been passed for the winding up of any Avery Berkel Group
Company or for a provisional liquidator to be appointed in respect of any
Avery Berkel Group Company and no meeting has been convened and, so far as
GEC is aware, no petition has been presented for the purpose of winding up
any Avery Berkel Group Company.
13.2 No administration order has been made and, so far as GEC is aware, no
petition for such an order has been presented in respect of any Avery
Berkel Group Company.
13.3 No receiver (which expression shall include an administrative receiver) has
been appointed in respect of any Avery Berkel Group Company or all or any
of its assets.
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13.4 No Avery Berkel Group Company is insolvent, or unable to pay its debts
within the meaning of section 123 Insolvency Act 1986, or has stopped
paying its debts as they fall due.
13.5 No voluntary arrangement has been proposed under section 1 Insolvency Act
1986 in respect of any Avery Berkel Group Company.
14. LITIGATION
14.1 Other than in respect of the payment and collection of debts in the
ordinary course of its business not exceeding (Pounds)50,000 per item, no
Avery Berkel Group Company is engaged in any litigation, arbitration or
criminal proceedings, whether as plaintiff, defendant or otherwise, and no
litigation, arbitration or criminal proceedings by or against any Avery
Berkel Group Company is pending, or (so far as GEC is aware) threatened,
the determination of which (in each case) would be likely to result in a
final adverse judgment against an Avery Berkel Group Company in excess of
(Pounds)100,000 in principal amount.
14.2 No Avery Berkel Group Company is subject to any order or judgment given by
any court (including, without limitation, any injunction or order for
specific performance) which is still in force and has not given any
undertaking to any court arising out of any legal proceedings which remains
outstanding.
14.3 So far as GEC is aware, there are no existing circumstances which are
substantially likely to give rise to any such litigation, arbitration or
criminal proceedings of the type described in paragraph 14.1 which would be
likely to result in a final adverse judgment against an Avery Berkel Group
Company in excess of (Pounds)100,000 in principal amount.
15. COMPLIANCE WITH LAWS AND NO INVESTIGATION
15.1 No Avery Berkel Group Company has received written notice that it is
carrying on its business in contravention of any relevant legislation
including in relation to health and safety matters which contravention has
a material and adverse effect on the business of the Avery Berkel Group as
a whole.
15.2 No Avery Berkel Group Company has received written notification including
in relation to health and safety matters that any non-routine investigation
or inquiry is being conducted by any governmental or other regulatory body
in respect of its affairs in respect of which there is a likelihood that
such investigation or inquiry will lead to proceedings or liability,
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the determination or amount of which would have a material and adverse
effect on the business of the Avery Berkel Group as a whole.
16. OWNERSHIP OF ASSETS
16.1 Each of the tangible fixed assets (other than the Avery Berkel Properties
and the Certificated Properties) included in the Aggregated Accounts as
being owned by an Avery Berkel Group Company, or acquired by an Avery
Berkel Group Company since the Accounts Date and which, if acquired before
such date, would have been included in the Aggregated Accounts, (other than
assets sold, realised or applied in the normal course of business) where
such asset has a current net book value in excess of (Pounds)10,000, is
owned both legally and beneficially by that or another Avery Berkel Group
Company and no Avery Berkel Group Company has granted any option, right to
acquire, mortgage, charge, pledge, lien or other form of security or
encumbrance over any such asset, subject in any case to retention of title
and vendor's liens arising in the ordinary course of business and liens
arising by operation of law.
16.2 So far as GEC is aware, none of the material assets which are used by any
member of the Avery Berkel Group and which are necessary for the conduct of
the business of that member as presently conducted are owned by any member
of the GEC Group.
16.3 All plant and machinery (excluding vehicles) which had an original cost in
excess of (Pounds)100,000 and has an existing book value in excess of
(Pounds)50,000 used in the business of any member of the Avery Berkel Group
is, taken as a whole, in reasonable condition (subject to fair wear and
tear) having regard to its age and in satisfactory working order.
17. OWNERSHIP OF LAND
17.1 The Avery Berkel Properties and the Certificated Properties are the only
immovable properties owned, used or occupied by an Avery Berkel Group
Company or in respect of which any Avery Berkel Group Company has any
estate, interest, right or ownership.
17.2 In relation to the Avery Berkel Properties:
(A) the relevant Avery Berkel Group Company specified in Schedule 8 as the
owner (the "Owner") of an Avery Berkel Property is legally and
beneficially entitled to that Avery Berkel Property and the Owner has
under its control all of the title deeds and documents details of
which are set out in the Disclosure Documents;
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(B) the Owner holds the Avery Berkel Property subject to the leases,
underleases, sub-leases, tenancies or licences particulars of which
are set out in the Disclosure Letter but is otherwise in physical
possession and actual occupation of the Avery Berkel Property (as
applicable);
(C) The Owner has title to the interest in the Property described in
Schedule 8 to this Agreement and such title is adequate for the use of
the Property for the purposes of the business of the Owner as it is
currently carried on;
(D) There are no encumbrances or third party interests which would inhibit
or prevent the use of the relevant Property for its current use.
(E) Each of the Avery Berkel Properties which is leasehold is held under a
lease the brief details of which are set out in Schedule 8.
17.3 In relation to the U.K. Properties:
(A) Neither GEC nor the Owner is aware of a material breach by the Owner
of any provision of any lease under which the Owner holds the U.K.
Property (excluding any breach arising out of the state and condition
of the relevant U.K. Property) where such breach is still outstanding;
(B) GEC has not received nor is it aware that the Owner as its owner has
received notice in writing of any outstanding breach nor is GEC aware
of any such breach under planning legislation in respect of the
relevant U.K. Property;
(C) GEC has not received nor is it aware that the Owner has received
notice in writing of and neither GEC nor the Owner is aware of any
compulsory purchase order affecting a material part of the relevant
U.K. Property which is currently in force; and
(D) Neither GEC nor the Owner is aware of any legal proceedings or of any
circumstance which in the reasonable opinion of GEC or the Owner will
result in legal proceedings in respect of the relevant U.K. Property
which are or are likely to be material in the context of the business
carried on by the Avery Berkel Group as a whole.
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17.4 In relation to the Overseas Properties:
(A) GEC has not been notified in writing nor is it aware that the Owner
has been notified in writing of a material breach by it of any
provision of any lease under which it holds the relevant Overseas
Property where such breach is still outstanding;
(B) GEC has not received nor is it aware that the Owner as its owner has
received notice in writing of any outstanding breach under planning
legislation in respect of the relevant Overseas Property;
(C) GEC has not received nor is it aware that the Owner has received
notice in writing of any compulsory purchase order affecting the
relevant Overseas Property which is currently in force; and
(D) GEC has not received nor is it aware that the Owner has received
notice in writing of any legal proceedings or notice in writing of any
circumstance which in the reasonable opinion of GEC or the Owner will
result in legal proceedings in respect of the relevant Overseas
Property which are or are likely to be material in the context of the
business carried on by the Avery Berkel Group as a whole.
17.5 GEC has not received nor is it aware that any Avery Berkel Group Company
has received notice in writing which is outstanding of any liability
(whether actual or contingent) in relation to any leasehold property which
such Avery Berkel Group Company has assigned or otherwise disposed of.
17.6 The information provided by GEC and by any Avery Berkel Group Company for
the purposes of each certificate of title delivered by GEC at Completion
is, so far as GEC is aware, true, complete and accurate in all material
respects and is not materially misleading.
17.7 In relation to any leasehold premises formerly vested in the appropriate
Avery Berkel Group Company and being a new tenancy for the purposes of the
Landlord and Tenant Covenants Act the appropriate Avery Berkel Group
Company has not made any request for an overriding lease pursuant to
section 19 of the Landlord and Tenant Covenants Act nor has the appropriate
Avery Berkel Group Company received any notice under section 17 of the
Landlord and Tenant Covenants Act.
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17.8 All the information produced to or given in writing to the Purchaser or
the Purchaser's Solicitors and included in the Disclosure Documents in
respect of or relating to the Properties (including replies to enquiries
and requisitions) in the course of negotiations leading up to the
execution of this Agreement is, so far as GEC is aware, true and accurate
in all material respects.
17.9 In relation to any U.K. Property, so far as GEC is aware, no Avery Berkel
Group Company has done or omitted to do anything whereby any policy of
insurance has or may become void or voidable and all requisite insurances
are in force.
17.10 So far as GEC is aware, neither GEC nor the appropriate Avery Berkel Group
Company has received any notice which is outstanding of breaches of its
obligations under the Fire Precautions Act 1971 and the appropriate Avery
Berkel Group Company has applied for and obtained fire certificates
thereunder in respect of all premises owned or occupied by it to the
extent required by such Act.
17.11 So far as GEC is aware, the U.K. Properties are not materially affected by
any outstanding disputes, notices or complaints which affect the use of
the U.K. Properties for the purposes for which they are now used.
17.12 So far as GEC is aware, each of the U.K. Properties (given its age and
location and the use to which it is put) is free of any material want of
repair which would prevent the relevant U.K. Property from being used for
the business as it is currently carried on.
18. INTELLECTUAL PROPERTY
18.1 Material and, so far as GEC is aware, correct details of all registered
Intellectual Property legally and beneficially owned by an Avery Berkel
Group Company and details of all applications for registration thereof are
set out in the Disclosure Letter.
18.2 Other than as a result of lapses or mistakes of third parties, all
registration and renewal fees required for the application for,
prosecution of and maintenance of the rights disclosed pursuant to sub-
paragraph 18.1 have been paid and all administrative steps have been taken
for the maintenance of those rights. Neither GEC nor any Avery Berkel
Group Company has not been notified in the last 12 months of any challenge
or attack by a third party or competent authority to such rights.
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18.3 The Intellectual Property owned and used by the Avery Berkel Group
Companies in relation to their businesses is free from any financial
encumbrances.
18.4 Details of all material licences (excluding shrink-wrap software licences)
granted to or by an Avery Berkel Group Company in respect of any
Intellectual Property are set out in the Disclosure Letter and, so far as
GEC is aware, no party thereto is in material breach of any such licence.
So far as GEC is aware, none of those licences will be adversely affected
by the transaction contemplated by this Agreement.
18.5 So far as GEC is aware, the processes and methods employed, the services
provided, the businesses conducted and the products used or dealt in by
the Avery Berkel Group Companies in relation to their businesses as
carried on at the date of this Agreement do not infringe the rights of any
other person in any Intellectual Property and have not done so during the
last 6 years.
18.6 So far as GEC is aware, there is no and has not been during the last six
years any unauthorised use or infringement by any person of any
Intellectual Property owned by any Avery Berkel Group Company.
18.7 So far as GEC is aware no member of the Avery Berkel Group has entered
into any confidentiality or other agreement or is subject to any duty
which restricts the free use of disclosure of any information used in the
businesses which would have a materially adverse effect upon the business.
18.8 So far as GEC is aware there has been no breach of confidentiality or
unauthorised disclosure of Know-How as a whole in the 12 months prior to
Completion which would have a materially adverse effect upon the business
of the Avery Berkel Group in the context of the Avery Berkel Group.
18.9 So far as GEC is aware there have been no proceedings, challenges or
attacks brought in the 12 months prior to Completion by any third party or
competent authority (save for routine objections, observations or
enquiries of Patent or Trade Mark Registries) to the title, subsistence,
validity, enforceability or grant of any right or interest in any
Intellectual Property owned and used by the Avery Berkel Group Companies
which would have a materially adverse effect upon the business of the
Avery Berkel Group, in the context of the Avery Berkel Group as a whole.
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18.10 So far as GEC is aware all Systems, excluding software, are owned or
operated by or are under the control of the Avery Berkel Group and are not
wholly dependent on any facilities which are not under the ownership,
operation or control of the Avery Berkel Group.
18.11 So far as GEC is aware, in the 12 months prior to Completion the Avery
Berkel Group Companies have not suffered any material failures, bugs or
breakdowns of any Systems which have caused any substantial disruption or
interpretation which would have a materially adverse effect on the
business of the Avery Berkel Group in the context of the Avery Berkel
Group as a whole.
18.12 So far as GEC is aware, all the applicable members of the Avery Berkel
Group complies in all material respects and has in place all necessary
registrations under the Data Protection Act 1984 and the Data Protection
Act 1998.
18.13 So far as GEC is aware any domain names owned by an Avery Berkel Group are
registered with an authorised body and are transferable to the Purchaser.
The internet presence of the Avery Berkel Group is wholly passive and
informational in nature and involves no interactivity between third
parties and an Avery Berkel Group Company including purchasers, sales,
leases or other commercial transactions conducted in any degree by or
through the internet presence.
18.14 So far as GEC is aware the Avery Berkel Group has not experienced any
disruption in the performance or functionality of its computer hardware,
software and networks as a result of the date change from 31st December,
1999 to 1st January, 2000 which is material in the context of the Avery
Berkel Group as a whole.
19. INSURANCES
Details of the insurance policies maintained by or on behalf of each Avery
Berkel Group Company are attached to the Disclosure Letter, and so far as
GEC is aware, all such policies are in force and no Avery Berkel Group
Company has knowingly done anything or omitted to do anything as a result
of which any of such policies is void or voidable and no claims are
outstanding for amounts in excess of (Pounds)50,000 under any such policy.
20. PENSIONS
20.1 There are no superannuation or retirement benefits or life assurance funds
schemes or arrangements provided by or on behalf
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of the Avery Berkel Group under which any of the Employees or their
dependants or spouses in the United Kingdom or the United States is
entitled to life assurance pension or other retirement benefits save in
accordance with the GEC Plan, the US Scheme and the US Deferred
Arrangement. No member of the Avery Berkel Group has any liabilities in
respect of its former employees or their dependants or spouses in the UK
or the US under any other retirement benefit schemes and in relation to
the UK under any life assurance scheme. There are no post-retiree medical
obligations in the US to which the Avery Berkel Group Companies are
required to contribute or in respect of which they meet any expenses.
20.2 No Avery Berkel Group Company incorporated in the United Kingdom or the
United States is under any contractual obligation to provide life
assurance, pension or other retirement benefits in respect of any of the
Employees or former employees save in accordance with the GEC Plan, US
Scheme or the US Deferred Arrangements.
20.3 No power to augment benefits under the GEC Plan or the US Scheme has been
exercised prior to Completion in relation to those of the Employees who
are members of it.
20.4 Each Avery Berkel Group Company incorporated in the United Kingdom which
is a participating employer for the purpose of the GEC Plan has fulfilled
all its obligations thereunder (including any obligations to pay
contributions).
20.5 The GEC Plan:
(A) is an exempt approved scheme for the purposes of Chapter I of Part XIV
of the Income and Corporation Taxes Act 1988 and so far as GEC is
aware there is no reason why such approval might be withdrawn;
(B) is not a contracted-out scheme under Section 7(3) of the Pension
Schemes Act 1993; and
(C) conforms with the preservation requirements referred to in Section
69(2) of the Pension Schemes Act 1993.
20.6 The GEC Plan, the US Scheme and so far as GEC is aware the retirement
benefit arrangements for Employees and former employees in other countries
have been operated in all material respects in accordance with all the
then applicable legal requirements and their governing documentation in
relation to each Avery Berkel Group Company and the Employees and former
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employees and there are no outstanding claims or so far as GEC is aware
matters likely to give rise to claims against the GEC Plan, the US Scheme
or any such other arrangement by any Avery Berkel Group Company or any
Employee other than routine claims for benefits.
20.7 Except for death benefits payable under the SBS all lump sum death
benefits payable on the death of a member of the GEC Plan are self insured
by the GEC Plan.
20.8 So far as GEC is aware no undertaking has been given as to the
introduction, increase, continuation or improvements of any benefits
payable under the GEC Plan the US Scheme and the US Deferred arrangements
in respect of any of the Employees.
20.9 No part time Employees have been unlawfully excluded from the GEC Plan
since 1st January, 1985.
20.10 Material details of any superannuation or retirement benefits or life
assurance funds, schemes or arrangements provided by or on behalf of each
Avery Berkel Group Company under which any of the Employees (other than
those in the United Kingdom and the United States) is entitled to life
assurance, pension or other retirement benefits are included in the
Disclosure Documents.
20.11 (A) All contributions to, and payments from, each plan in the US Scheme
that may have been required to be made in accordance with the plans,
any collective bargaining agreements, and, when applicable, Section
302 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 412 of the Internal Revenue Code of
1986, as amended ("US Code"), have been timely made.
(B) There has been no application for or waiver of the minimum funding
standards imposed by Section 412 of the US Code with respect to the
Berkel Pension Plan.
(C) The Berkel Pension Plan does not have an "accumulated funding
deficiency" within the meaning of Section 412(a) of the US Code as of
the most recent plan year.
20.12 Each plan in the US Scheme has been the subject of determination letters
from the Internal Revenue Service to the effect that such plans are
qualified and exempt from Federal income taxes under Sections 401(a) and
501(a), respectively, of the US Code, and no such determination letter has
been revoked nor, so far as GEC is aware, has revocation been threatened.
Each trust which forms a part of a plan under the US Scheme has at all
relevant times
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(i) qualified as a "domestic trust" within the meaning of Section
7701(a)(31) of the US Code and (ii) been maintained in all material
respects in compliance with Section 404(b) of ERISA.
20.13 With respect to any plan in the US Scheme subject to Title IV of ERISA, no
Avery Berkel Group Company has incurred any liability to the Pension
Benefit Guaranty Corporation, other than for the payment of premiums, all
of which have been paid when due.
20.14 With respect to any plan maintained by Berkel Incorporated that is an
employee welfare benefit plan under ERISA Section 3(2):
(A) each such plan that is a group health plan, as such term is defined in
Section 5000(b)(1) of the US Code, complies in all material respects
with the applicable requirements of Section 4980B(f) of the US Code;
and
(B) each such plan may be amended or terminated without material effect to
the Avery Berkel Group as a whole.
20.15 The Canadian pension scheme for Avery Berkel has been wound up.
21. EMPLOYEES
21.1 Details of the job title, date of commencement of employment and salary of
every Senior Employee of the Avery Berkel Group as at 28th February, 2000
are set out in the Data Room. No Senior Employee has ceased to be an
Employee and no Employee who would be a Senior Employee has been taken on
by any Avery Berkel Group Company since 28th February, 2000.
21.2 The contract of employment of each Employee may be terminated by the
employer without damages or compensation (other than that payable by
statute) by giving at any time 3 months notice or less.
21.3 No Senior Employee or director has since 28th February, 2000 given notice
or received notice terminating his contract of employment and since that
date no employer has made or proposed any material changes to the salary
or benefits of any Senior Employee.
21.4 Copies of all collective and recognition agreements (currently in force)
with any trade union or other representative body in relation to the
Employees or their standard conditions of service are attached to the
disclosure letter. So far as GEC is aware, none of the Avery Berkel Group
Companies have ever
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contributed to or has any liability or contingent liability with respect
of any multi-employer plan within the meaning of section 3(37) of ERISA.
21.5 There is now no known material dispute with any trade union or other such
representative body or so far as GEC is aware, pending or threatened in
relation to any Avery Berkel Group Company.
21.6 So far as GEC is aware no past or present Senior Employee has commenced
any litigation or arbitration or mediation, administration or criminal
proceedings in connection with or arising from his employment which is
still outstanding and likely to result in a finding adverse to such a
company in excess of (Pounds)50,000.
21.7 There is no obligation or amount due to or in respect of any Employee in
connection with or arising from his employment which is in arrears or
unsatisfied other than his normal salary and benefits of part of the month
and bonuses for bonus periods in each case current at the date of this
agreement.
21.8 Neither GEC in relation to the Avery Berkel Group or any Avery Berkel
company has had during the 3 years ended on the date of this agreement any
material strike, work stoppages, slow-down or work to rule by its
Employees
21.9 Within the year immediately preceding the date of this agreement in the UK
GEC in relation to the Avery Berkel group has not nor has any Avery Berkel
group company given notice of any redundancies to the Secretary of State
or started consultations with any Independent Trade Union under the
provisions of Part IV of the Trade Union and Labour Relations
(Consolidation) Act 1992 or any Transfer of Undertakings (Protection of
Employment) Regulation 1981 or failed in any material respect to comply
with any such obligation under the said Part IV.
21.10 So far as GEC is aware Completion will not entitle any Senior Employee who
is key to the business of any of the Avery Berkel Group Companies to
terminate his employment and/or trigger any entitlement to a severance
payment and/or liquidated damages or any other entitlements arising solely
by virtue of changes of control.
21.11 So far as GEC is aware the benefit schemes operated for all or any of the
Employees or former employees of the Avery Berkel Companies (the
"Schemes") have at all times been operated in all material respect in
accordance with their governing rules or
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terms and all applicable laws and all documents which are required to be
filed with any regulatory authority have been so filed and all tax
clearances and approvals necessary to obtain favourable tax treatment for
the Avery Berkel Companies and/or the participants in the Schemes have
been obtained and not withdrawn and so far as GEC is aware no act or
omission has occurred which has prejudiced any such tax clearance and/or
approval.
21.12 So far as GEC is aware, there are no enquires or investigations existing,
pending or threatened affecting the Avery Berkel Companies in the UK in
relation to any directors, officers or employees of such companies by the
Equal Opportunities Commission, the Commission for Racial Equality or the
Health & Safety Executive.
21.13 So far as GEC is aware the Avery Berkel Companies has not entered into any
agreement which has not been completed to acquire any undertaking or part
of one such that the EU Acquired Rights Directive (No. 77/187) may apply
thereto.
21.14 So far as GEC is aware the Avery Berkel Group Companies have complied with
all relevant provisions of the Treaty of Rome, EC Directives, statutes,
regulations relevant to any Avery Berkel Group Company's directors,
officers and employees so far as material in the context of the relevant
Avery Berkel Group Company as a whole.
21.15 No Avery Berkel Group Company has given written notification to any
Employee and no commitment has been made to terminate the employment of
any Employee by reason of redundancy.
22. THE ENVIRONMENT
22.1 So far as GEC is aware, and after having made reasonable inquiry of each
Avery Berkel Group Company, the relevant owner of each of the Avery Berkel
Properties and the Certificated Properties, the business of each Avery
Berkel Group Company is being conducted in compliance, insofar as material
to the business of the Avery Berkel Group as a whole, with Environmental
Laws.
22.2 So far as GEC is aware, and after having made reasonable inquiry of each
Avery Berkel Group Company, each Avery Berkel Group Company has obtained
and is complying in all material respects with the terms and conditions of
all Permits necessary for the operation as at the date of this Agreement
of the business of such Avery Berkel Group Company. Each current Permit
remains in full force and effect. No Avery Berkel Group Company has
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received formal written notice from the regulatory authorities which is
reasonably likely to lead to the revocation or suspension of any current
Permit. For the avoidance of doubt, the Purchaser shall not be entitled to
claim under this Warranty to the extent that the claimed losses result
from, are increased by or would not have arisen but for provisions of any
Permit which are not expressly required under Environmental Laws to be
complied with on or before the date of this Agreement, or the expiry,
amendment, review, replacement or renewal of any Permit after the date of
this Agreement.
22.3 No upgrades or changes to processes or equipment (whether at the date of
this Agreement or within 1 year thereof) which will require material
expenditure are specifically required under the terms of Permits or
pursuant to formal notice from regulatory authorities responsible for
regulation of Permits. For the avoidance of doubt, the Purchaser shall not
be entitled to claim under this warranty to the extent that the relevant
losses result from, or are increased by or would not have arisen but for
upgrades or changes to processes or equipment which exceed the minimum
that would be expressly required under Environmental Laws if the upgrade
or change to process or equipment had been required at Completion as the
business was then being carried out by Avery Berkel.
22.4 At no time within the last three years has any Avery Berkel Group Company
received any written notice, claim or other written or recorded
communication alleging any actual or potential breach of or liability
under Environmental Laws which is outstanding as at the date of this
Agreement and so far as GEC is aware and after having made reasonable
inquiry of each Avery Berkel Group Company, (except in relation to the
Relevant Properties or Former Properties (as defined in Environmental
Deed)) there are no circumstances which may lead to the same which would
have a material and adverse effect on the business of the Avery Group as a
whole.
22.5 So far as GEC is aware, and after having made reasonable inquiry of each
Avery Berkel Group Company, no PCBs, asbestos, underground storage tanks,
pipework or landfills are located on any of the Avery Berkel Properties or
Certificated Properties in circumstances that violate in any material
respect Environmental Laws.
22.6 Copies of the final form of all material environmental reports, surveys,
assessments and investigations in respect of the Avery Berkel Properties
or the Certificated Properties in the possession of GEC have been
disclosed to the Purchaser.
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22.7 In relation to Environmental Laws, no Avery Berkel Group Company is
engaged in any litigation, arbitration or criminal proceedings, whether as
plaintiff, defendant or otherwise, and no litigation, arbitration or
criminal proceedings by or against any Avery Berkel Group Company is, so
far as GEC is aware and after having made reasonable inquiry of each Avery
Berkel Group Company, pending or threatened, the determination of which
(in each case) would have a material and adverse effect on the business of
the Avery Berkel Group as a whole.
22.8 So far as GEC is aware and after having made reasonable inquiry of each
Avery Berkel Group Company, no Avery Berkel Group Company has received
written notification that any non-routine investigation or inquiry is
being conducted by any regulatory body in respect of a breach of
Environmental Laws which would have a material and adverse effect on the
business of the Avery Berkel Group as a whole.
22.9 GEC has not received, nor is it aware after having made reasonable inquiry
of each Avery Berkel Group Company, that any Avery Berkel Group Company
has received notice in writing in the last three years of any liability
actual or potential under Environmental Laws which is outstanding at the
date of this Agreement (whether actual or contingent) in relation to any
leasehold property or former property which such Avery Berkel Group
Company has assigned, disposed of or ceased to use or occupy which would
have a material and adverse effect on the business of the Avery Berkel
Group as a whole.
23. TAX
23.1 No Avery Berkel Group Company has any outstanding liability for:
(A) Taxation in any part of the world assessable or payable by reference
to profits, gains, income or distributions earned, received or paid or
arising or deemed to arise on or at any time prior to the Accounts
Date or in respect of any period ending on or before the Accounts
Date; or
(B) purchase, value added, sales or other similar tax in any part of the
world referable to transactions effected on or before the Accounts
Date; that is not provided for in the Accounts.
23.2 The amount of the provision for deferred Taxation in respect of each Avery
Berkel Group Company contained in the Accounts was, at the Accounts Date,
in accordance with accountancy practices
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generally accepted in the United Kingdom or the relevant jurisdiction of
incorporation and commonly adopted by companies carrying on businesses
similar to those carried on by that Avery Berkel Group Company.
23.3 If all facts and circumstances which are now known to the Avery Berkel
Group or to GEC had been known at the time the Accounts were drawn up, the
provision for deferred Taxation that would be contained in the Accounts
would be no greater than the provision which is so contained.
24. TAX EVENTS SINCE THE ACCOUNTS DATE
So far as GEC is aware, since the Accounts Date:
(A) no Avery Berkel Group Company has paid any dividend or made any
distribution of assets or repayment of capital by reference to which
it will or may be liable to Tax;
(B) no accounting period of any Avery Berkel Group Company has ended;
(C) there has been no disposal of any asset (including trading stock) or
supply of any service or business facility of any kind (including a
loan of money or the letting, hiring or licensing of any property
whether tangible or intangible) in circumstances where the
consideration actually received or receivable for such disposal or
supply was materially less than the consideration which could be
deemed to have been received for tax purposes;
(D) no event has occurred which will give rise to a tax liability on any
Avery Berkel Group Company calculated by reference to deemed (as
opposed to actual) income, profits or gains or which will result in
such Avery Berkel Group Company becoming liable to pay or bear a tax
liability directly or primarily chargeable against or attributable to
another person, firm or company;
(E) no disposal has taken place or other event occurred which will or may
have the effect of crystallising a liability to Taxation which should
have been included in the provision for deferred Taxation contained in
the Accounts if such disposal or other event had been planned or
predicted at the Accounts Date;
(F) no Avery Berkel Group Company has incurred expenditure of a revenue
nature or entered into a commitment to incur
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expenditure of a revenue nature which will not be deductible in
computing trading profits for the purposes of corporation tax, or be
deductible as a management expense of an investment company, other
than expenditure at a rate proportionately no greater than the
corresponding rate for the accounting period ending on the Accounts
Date; and
(G) no Avery Berkel Group Company has paid or become liable to pay any
interest or penalty in connection with any tax, has otherwise paid any
tax after its due date for payment or owes any tax the due date for
payment of which has passed or will arise in the 30 days after the
date of this Agreement.
25. TAX RETURNS, DISPUTES, RECORDS AND CLAIMS, ETC.
25.1 All proper returns required to be made and all material information
required to be supplied by or on behalf of any Avery Berkel Group Company
to any revenue or income tax authority within the last six years have been
duly made or, as the case may be, has been duly supplied.
25.2 So far as GEC is aware, there is no dispute or disagreement outstanding
nor is any contemplated at the date of this Agreement with any revenue
authority regarding liability or potential liability to any tax or duty
(including in each case penalties or interest) recoverable from any Avery
Berkel Group Company or regarding the availability of any relief from tax
or duty to such Avery Berkel Group Company and there are no circumstances
which make it likely that any such dispute or disagreement will commence.
25.3 So far as GEC is aware, each Avery Berkel Group Company has sufficient
records relating to past events, including any elections made, to
calculate the tax liability or relief which would arise on any disposal or
on the realisation of any asset owned at the Accounts Date by that Avery
Berkel Group Company or acquired by that Avery Berkel Group Company since
that date but before Completion.
25.4 Each Avery Berkel Group Company has duly submitted all claims,
disclaimers, elections, surrenders and applications which have been
assumed to have been made for the purposes of the Accounts and details of
all such claims, disclaimers, elections, surrenders and applications are
in the possession of the relevant Avery Berkel Group Company or GEC.
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25.5 The amount of tax chargeable on any Avery Berkel Group Company during any
accounting period ending on or within six years before the Accounts Date
has not, to any material extent, depended on any concession, agreement or
other formal or informal arrangement with any revenue or income tax
authority.
25.6 No Avery Berkel Group Company has received any written notice from any
revenue or income tax authority which required or will or may require it
to withhold tax from any payment made since the Accounts Date or which
will or may be made after the date of this Agreement.
26. INSTALMENT PAYMENTS, ETC.
26.1 The Disclosure Letter identifies whether or not, so far as GEC is aware,
any Avery Berkel Group Company is a "large company" within the meaning of
regulation 3 of The Corporation Tax (Instalment Payments) Regulations 1998
(the "Instalment Payments Regulations").
26.2 The Disclosure letter contains details of all instalment payments made by
or on behalf of any Avery Berkel Group Company under the Instalment
Payments Regulations since the Accounts Date and of all repayments claimed
by or on behalf of any Avery Berkel Group Company under the Instalment
Payments Regulations since the Accounts Date and, so far as GEC is aware,
the computation of each such payment or claim for repayment took proper
account of all relevant estimates and other information available to any
Avery Berkel Group Company at the time when any such payment was made or
(as the case may be) at the time when any such claim for repayment was
submitted to the Inland Revenue.
26.3 So far as GEC is aware, each Avery Berkel Group Company has sufficient
books, documents, records and other information to enable it to comply
with any notice served on it under regulations 10 or 11 of the Instalment
Payments Regulations, insofar as that notice concerns any part of the
period ending on the date of this Agreement.
26.4 No action has been taken by any Avery Berkel Group Company before the date
of this Agreement such that the provisions of regulation 14 of the
Instalment Payments Regulations could have effect in respect of any Avery
Berkel Group Company.
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27. STAMP DUTY
All documents which are in the possession of any member of the GEC Group
and in the enforcement of which any Avery Berkel Group Company is or may
be interested have been duly stamped and since the Accounts Date no Avery
Berkel Group Company has been a party to any transaction whereby any Avery
Berkel Group Company was or is or will become liable to stamp duty reserve
tax.
28. VALUE ADDED TAX
28.1 Each Avery Berkel Group Company has complied with any obligation to
register for the purposes of any purchase, value added, sales or other
similar tax in any part of the world and has complied in all material
respects with its other obligations under any legislation relating to such
tax.
28.2 The Disclosure Letter contains particulars of any inability of any Avery
Berkel Group Company resident in a member state of the European Union to
recover or obtain credit for amounts in respect of value added tax it has
incurred since the Accounts Date.
28.3 No Avery Berkel Group Company is a member of a group of companies for the
purposes of VATA and all regulations and orders made thereunder (or the
equivalent legislation where it carries on business) other than a group of
companies of which another Avery Berkel Group Company is the
representative member.
29. DUTIES, ETC.
All value added tax, import duty, excise duties and other similar taxes,
duties or charges payable to any tax authority upon the importation of
goods or in respect of any assets (including trading stock) imported,
owned or used by an Avery Berkel Group Company have been paid in full.
30. TAX ON DISPOSAL OF ASSETS
On a disposal of all its assets by an Avery Berkel Group Company for:
(A) in the case of each asset owned by an Avery Berkel Group Company at
the Accounts Date, a consideration equal to the value attributed to
that asset in preparing the Accounts; or
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(B) in the case of each asset acquired since the Accounts Date, a
consideration equal to the consideration given for the acquisition
then either:
(a) in respect of any asset falling within (A) above, the liability
to tax (if any) which would be incurred by an Avery Berkel Group
Company in respect of that asset 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 respect of any asset within (B) above, no tax liability would,
so far as GEC is aware, be incurred by an Avery Berkel Group
Company in respect of that asset.
31. NON-DEDUCTIBLE REVENUE OUTGOINGS
So far as GEC is aware, no Avery Berkel Group Company is under any
obligation to make any future payment of a revenue nature which will be
prevented (whether on the grounds of being a distribution or for any other
reason) from being deductible for corporation tax purposes, whether as a
deduction in computing the profits of a trade or as an expense of
management or as a charge on income or (in the case of Avery Berkel Group
Companies subject to UK corporation tax) as a non-trading debit under
Chapter II Part IV Finance Act 1996, by reason of any Tax legislation.
32. DEDUCTIONS AND WITHHOLDINGS
During the last six years, each Avery Berkel Group Company has made all
deductions in respect or on account of any tax from any payments made by
it which it is obliged or entitled to make and has accounted in full to
the appropriate authority for all amounts so deducted.
33. INTRA-GROUP TRANSACTIONS
No Avery Berkel Group Company has, at any time within the last six years,
acquired any asset from any other company which was, at the time of the
acquisition, a member of the same group of companies as that member for
the purposes of any tax.
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33A Close Companies
No Avery Berkel Group Company is or has within the last six years been a
company as defined by section 414 ICTA.
34. RESIDENCE
So far as GEC is aware, the country which is given in Schedule 7 as the
tax residence of each Avery Berkel Group Company is the only country whose
tax authorities seek to charge tax on the world-wide profits or gains of
that Avery Berkel Group Company and that Avery Berkel Group Company has
never paid tax on income, profits or gains to any tax authority in any
other country except that mentioned in Schedule 7 in respect of it.
35. ASSOCIATE COMPANIES
35.1 A copy of each contract to which a member of the GEC Group is party and to
which an Associate Company is also party and which is material in the
context of the business of the relevant Associate Company is attached to
the Disclosure Letter.
35.2 No member of the GEC Group is party to any agreement, and no member of the
GEC Group has made any commitment which is outstanding, which calls for
the transfer of, or accords to any person the right to call now or in the
future for the transfer of, any of the shares or debentures in or
securities of any Associate Company which are shown by Schedule 7 as being
held by a member of the Avery Berkel Group and all such shares so shown on
Schedule 7 are fully paid up.
35.3 So far as GEC is aware, no member of the Avery Berkel Group is under any
legally binding obligation to make any capital payment to any Associate
Company (ignoring obligations, commitments and payments made or to be made
in the ordinary course of business of the relevant member of the Avery
Berkel Group) which payment is material in the context of the business of
the Avery Berkel Group as a whole.
35.4 Part C of Schedule 7 accurately describes the number of shares held by an
Avery Berkel Group Company in each Associate Company and the identity of
the relevant Avery Berkel Group Company holding such shares.
35.5 So far as GEC is aware, the documents attached to the Disclosure Letter as
items EX/GA/IND/11/1 and EX/MB/MEX/11/4 are materially accurate replies as
at the date made to the questions listed in the document attached to the
Disclosure Letter as items EX/GA/IND/11/18 and EX/MB/MEX/11/5 in relation
to Avery India Limited and Constructora de Basculas S.A. de C.V.
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35A Transfer Pricing
For the six years preceding the Completion Date, appropriate documentation
evidencing any dealings between a Group Company and any other company or
person (including another group company) associated or connected with it
other than on arm's length terms has been duly prepared and no notice or
enquiry by any Taxation Authority has been made in connection with any
such dealings.
35B US Tax Issues
Berkel Inc is not subject to any loan agreement which is or is likely to
be recharacterised by the Internal Revenue Services as equity and which
will continue in force after Completion and no interest paid or payable by
Berkel Inc in respect of any related party debt has been or is likely to
be disallowed under section 163(j) of the Internal Revenue Code.
36. COMPETITION LAW
36.1 No Avery Berkel Group Company is or has been a party to or concerned in
any agreement or arrangement, or conducted itself (whether by omission or
otherwise) in a manner which:
(i) could give rise to an investigation by the Office of Fair Trading or
the Competition Commission under the Fair Trading Act 1973;
(ii) has been or is required to be furnished to the Director General of
Fair Trading pursuant to the Restrictive Trade Practices Act 1976
and 1977;
(iii) contravenes the provisions of the Resale Prices Act 1976;
(iv) constitutes a breach of any relevant undertaking, order, assurance
or other measure made under the Fair Trading Act 1973, the
Restrictive Trade Practices Acts 1976 and 1977, or the Resale Prices
Act 1976;
(v) infringes Articles 81 and/or 82 of the Treaty of Rome or their
equivalent provisions under the European Economic Area Agreement or
any other anti-trust or similar legislation in any jurisdiction;
(vi) is registrable, unenforceable or void (whether in whole or in part)
or renders it liable to civil, criminal or administrative
proceedings by virtue of any anti-trust,
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anti-monopoly, anti-cartel, consumer law or any other similar
legislation in any jurisdiction; or
(vii) breaches of the Chapter I or Chapter II prohibitions contained in
the Competition Act 1998.
36.2 The Avery Berkel Group Companies have not given an undertaking or written
assurance (whether legally binding or not) to any court or governmental
authority (including any national competition authority and the Commission
of the European Communities and the EFTA Surveillance Authority) under any
anti-trust or similar legislation in any jurisdiction.
36.3 The Avery Berkel Group Companies are not subject to an order, regulation
or decision made by any court or governmental authority (including any
national competition authority and the Commission of the European
Communities and the EFTA Surveillance Authority) under any anti-trust or
similar legislation in any jurisdiction.
36.4 The Avery Berkel Group Companies are not and have not been a party to or
concerned in any agreement, arrangement or concerted practice in respect
of which an application for negative clearance and/or an exemption has
been made to the Commission of the European Communities or the EFTA
Surveillance Authority.
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SCHEDULE 4
LIMITATIONS ON GEC'S LIABILITY
1. AGREEMENTS TO WHICH THIS SCHEDULE IS APPLICABLE
The parties intend that the provisions in this Schedule apply to the
Warranties and, where so stated, to the other provisions of this Agreement
and the Share Purchase Documents.
2. WARRANTIES
2.1 Notwithstanding anything in this Agreement to the contrary, the provisions
of this Schedule shall operate to limit the liability of GEC in respect of
any claim by the Purchaser for any breach of the Warranties and, where so
stated, the other Share Purchase Documents.
2.2 The only Warranties given:
(A) in respect of the Aggregated Accounts, the Accounts and the Management
Accounts are those contained in paragraph 2 of Schedule 3 and each of
the other Warranties shall be deemed not to be given in relation to
the Aggregated Accounts, the Accounts and the Management Accounts;
(B) in respect of any Certificated Property or Avery Berkel Property are
those (i) contained in paragraph 17 of Schedule 3; (ii) in relation to
matters at the Certificated Properties or Avery Berkel Properties
which could give rise to liability under the Warranties in paragraph
22 of the Environmental Warranties at paragraph 22 of Schedule 3 and
(iii) in relation to health and safety matters at the Certificated
Properties and the Avery Berkel Properties the Warranties at 14.3,
15.1 and 15.2 of Schedule 3, and each of the other Warranties shall be
deemed not to be given in relation to any Avery Berkel Property or
Certificated Property;
(C) and each of the other Warranties shall be deemed not to be given in
relation to any Avery Berkel Property or Certificated Property;
(D) in respect of Intellectual Property and information technology are
those contained in paragraph 18 of Schedule 3 and each of the other
Warranties shall be deemed not to be given in relation to Intellectual
Property;
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(E) in respect of pensions matters are those contained in paragraph 20 of
Schedule 3 and each of the other Warranties shall be deemed not be
given in relation to pensions matters;
(F) in respect of employment matters are those contained in paragraph 21
of Schedule 3 and each of the other Warranties shall be deemed not to
be given in relation to employment matters;
(G) in respect of matters which could give rise to liability under the
Warranties at paragraph 22 of Schedule 3 are those contained in
paragraph 22 of Schedule 3 and each of the other Warranties shall be
deemed not to be given in relation to any matter which could give rise
to liability under the Warranties at paragraph 22 of Schedule 3;
(H) in respect of Tax are those contained in paragraphs 23 to 34 and 35A
and 35B of Schedule 3 and each of the other Warranties shall be deemed
not to be given in relation to Tax; and
(I) in respect of the Associate Companies are those contained in paragraph
35 (excluding for the avoidance of doubt paragraphs 35A and 35B) of
Schedule 3 and each of the other Warranties shall be deemed not to be
given in relation to the Associate Companies.
3. LIMITATIONS ON LIABILITY UNDER WARRANTIES AND UNDERTAKINGS
3.1 LIMITATIONS ON AMOUNT
(A) GEC shall have no liability in respect of any claim or claims under
any of the Warranties or the Share Purchase Documents (except as
otherwise stated in the Share Purchase Documents), except as follows:
(i) in respect of any individual claim, unless the amount for which
GEC is finally liable exceeds (Pounds)50,000, in which event GEC
shall be liable for the full amount of such claim and not only to
the extent that such claim exceeds (Pounds)50,000 (except in
relation to the Tax Covenant, for which purpose the amount of
(Pounds)10,000 shall be substituted for each amount of
(Pounds)50,000 stated in this paragraph 3.1(A)(i)); and
(ii) in respect of all such claims, unless and until the aggregate
amount of all such claims for which GEC is
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finally liable exceeds (Pounds)1,537,500 (being the aggregate of
such claims made under both the Warranties and the Share Purchase
Documents (excluding the Environmental Deed and the Tax
Covenant)) in which event GEC shall be liable for the full amount
of all such claims and not only to the extent that the aggregate
such amount exceeds (Pounds)1,537,500;
and GEC shall be finally liable only if the amount of each such claim
and the aggregate of all such claims which are admitted or proved in a
court of competent jurisdiction or agreed between GEC and the
Purchaser exceed the relevant figure specified in sub-paragraph (i) or
(ii) (as the case may be) above Provided that paragraphs (i) and (ii)
above shall not apply in relation to the indemnity and covenants to
pay by GEC in this Agreement including sub-clauses 8.16, 8.18, 8.19
and 8.31.
(B) The aggregate liability of GEC under this Agreement (whether for
breach of the Warranties or otherwise) and the other Share Purchase
Documents shall not in any event exceed 100 per cent. of the Purchase
Price.
(C) For the purpose of sub-paragraph 3.1(A)(i), claims arising out of the
same causal event, matter or practice shall be aggregated and treated
as a single claim.
3.2 TIME LIMITS FOR BRINGING CLAIM
No claim shall be brought against GEC in respect of any breach of the
Warranties (other than a claim under the Environmental Warranties in
relation to a Protected Matter (as defined in the Environmental Deed) which
claim shall be governed by the Environmental Deed) unless the Purchaser
shall have given to GEC written notice of such claim specifying (in the
case of each claim, to the extent reasonably practicable in the
circumstances) the matter which gives rise to the breach or claim, the
nature of the breach or claim and, other than in respect of a breach which
is (and only for so long as it is) not capable of being quantified for the
purposes of paragraph 3.9, the amount claimed in respect thereof (detailing
to the extent reasonably practicable the calculation of the loss thereby
alleged to have been suffered by the Purchaser) on or before the date
falling:
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(A) on or before the seventh anniversary of Completion in respect of a
claim under the Warranties contained in paragraphs 23 to 35B of
Schedule 3;
(B) on or before the fifth anniversary of Completion in respect of a claim
under the Warranties contained in paragraph 22 of Schedule 3; and
(C) on or before the date falling 18 months after Completion in respect of
any other matters.
PROVIDED that the liability of GEC referred to in this sub-paragraph 3.2
shall absolutely determine (if such claim has not been previously
satisfied, settled or withdrawn) if legal proceedings in respect of such
claim shall not have been commenced within six months of the service of
such notice and for this purpose proceedings shall not be deemed to have
been commenced unless they shall have been properly issued and validly
served in accordance with the provisions of this Agreement upon GEC.
3.3 CONDUCT OF LITIGATION
Upon the Purchaser or a member of the Purchaser's Group becoming aware of
any claim, action or demand against it or any matter likely to give rise to
any of these in respect of the Warranties, other than in relation to Tax
(or a claim under the Environmental Warranties in relation to a Protected
Matter (which claim shall be governed by the Environmental Deed), (a
"CLAIM"), the Purchaser shall and shall procure that the relevant member of
the Purchaser's Group shall:
(A) promptly, and in any event within 20 Business Days of becoming so
aware, notify GEC by written notice as soon as it appears to the
Purchaser or relevant member of the Purchaser's Group that any such
Claim of a third party received by or coming to the notice of the
Purchaser or any member of the Purchaser's Group may result in a claim
under the Warranties provided that any failure so to notify shall not
in itself preclude the relevant claim under the Warranties from being
made;
(B) subject to GEC indemnifying the Purchaser and the relevant member of
the Purchaser's Group to their reasonable satisfaction against any
liability, costs, damages or expenses which may be reasonably and
properly incurred thereby, take such action and give such information
and access to relevant personnel, premises, chattels, documents
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and records to GEC and its professional advisers as GEC may reasonably
request (having regard to the balance of interest between the
Purchaser's interest in the trading relationships of the Avery Berkel
Group and the amount and likelihood of the actual or potential
liability of GEC under the Warranties) and the Purchaser and the
relevant member of the Purchaser's Group shall take (or procure the
taking of) such action and give (or procure the giving of) such
information and assistance in order to avoid, dispute, resist,
mitigate, settle, compromise, defend or appeal any Claim in respect
thereof or adjudication with respect thereto as GEC may reasonably
require except that the Purchaser shall not be required to institute
any proceedings against any member of the Avery Berkel Group;
(C) without prejudice to the Purchaser's rights (if any) to make a claim
against GEC under the Warranties, at the request of GEC and subject to
GEC indemnifying the Purchaser and the relevant member of the
Purchaser's Group to their reasonable satisfaction against any
liability, costs, damages or expenses which may be reasonably and
properly incurred thereby, allow GEC to take the sole conduct of such
actions as GEC may reasonably (having regard to the balance of
interest between the Purchaser's interest in the trading relationships
of the Avery Berkel Group and the amount and likelihood of the actual
or potential liability of GEC under the Warranties) deem appropriate
in connection with any such Claim in the name of the Purchaser or the
relevant member of the Purchaser's Group and in that connection the
Purchaser shall give or cause to be given to GEC all such assistance
as GEC may reasonably require in avoiding, disputing, resisting,
settling, compromising, defending or appealing any such Claim. GEC
shall:
(i) in response to reasonable requests from the Purchaser from time
to time, keep the Purchaser reasonably informed of the progress
of, and relevant matters relating to, the Claim;
(ii) provide the Purchaser with copies of such documentation relating
to the Claim as it may reasonably request subject to relevant
duties of confidentiality or other restrictions; and
(iii) give the Purchaser such opportunities as it may reasonably
request to make representations regarding the conduct of the
Claim;
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(D) make no admission of liability, agreement, settlement or compromise
with any third party in relation to any such Claim without the prior
written consent of GEC (not to be unreasonably withheld or delayed).
If GEC agrees with the third party to settle or compromise a Claim,
and the Purchaser refuses to agree to such settlement or compromise
then, if the amount for which GEC subsequently becomes liable exceeds
the figure at which it would have so settled or compromised the
relevant Claim, GEC shall not be liable for the excess amount or any
costs or liabilities incurred since the proposed date of settlement or
compromise.
Nothing in this Agreement shall relieve the Purchaser of any common law
duty to mitigate its losses hereunder and the Purchaser shall procure that
each member of the Purchaser's Group shall also comply with such common law
duty.
3.4 NO LIABILITY IF LOSS IS OTHERWISE COMPENSATED FOR
(A) General
(i) The Purchaser and those deriving title from the Purchaser on or
after Completion shall not be entitled to recover damages or
otherwise obtain reimbursement or restitution more than once
between them in respect of any individual loss arising from a
breach of the Warranties or resulting from a Protected Matter to
which the Environmental Deed applies;
(ii) No liability shall attach to GEC by reason of any breach of the
Warranties if and to the extent that the same loss occasioned to
the Purchaser or the relevant Avery Berkel Group Company or a
member of the Purchaser's Group by reason of such breach has
been recovered by the Purchaser, the relevant Avery Berkel Group
Company or relevant member of the Purchaser's Group pursuant to
any other provision of any of the Share Purchase Documents and
vice versa;
(iii) No liability shall attach to GEC by reason of any breach of the
Warranties or under any other provision of the Share Purchase
Documents to the extent that the subject of the claim has been
or is made good or is otherwise compensated for without loss or
liability to the Purchaser provided that this paragraph (iii)
shall not be construed so as to impose a specific obligation on
the Purchaser (but without prejudice to paragraphs 3.3 and
3.4(B) and (C)).
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(B) Insurances
If, in respect of any matter which would give rise to a breach of the
Warranties or under the Environmental Deed, the Purchaser or a member
of the Purchaser's Group is entitled to claim under any policy of
insurance, then the Purchaser will notify GEC in writing of the matter
giving rise to the claim, in accordance with paragraph 3.2, but will
not pursue the claim against GEC unless and until the Purchaser or the
relevant member of the Purchaser's Group shall have made a claim
against its insurers and undertaken all reasonable steps to enforce
such claim. The amount recovered from any such insurance claim (or
which would have been recovered from any claim which could have been
made had such policies or their equivalents been maintained as
aforesaid) shall then be applied to reduce or extinguish any such
claims for breach of the Warranties or under the Environmental Deed.
So long as such claim shall have been notified in accordance with
paragraph 3.2 or clause 4 of the Environmental Deed (as applicable),
then the proviso to paragraph 3.2 or clause 4 of the Environmental
Deed (as applicable) shall be amended in relation to such claim so as
to require that legal proceedings be commenced (as described therein)
within 12 months from the date on which such claim was so notified in
order for the liability of GEC in respect of such claim not to
determine.
(C) Recovery from Third Parties
(i) Where the Purchaser or a member of the Purchaser's Group is at
any time entitled to recover from some other person (excluding
members of the Avery Berkel Group) any sum in respect of any
matter giving rise to a claim under the Warranties or under the
Environmental Deed, the Purchaser shall, and shall procure that
such member of the Purchaser's Group shall, undertake all
reasonable (having regard to the balance of interest between the
Purchaser's interest in the trading relationships of the Avery
Berkel Group and the amount and likelihood of the actual or
potential liability of GEC under the Warranties) steps
(including, without limitation, undertaking proceedings) to
enforce such recovery prior to taking action against GEC (other
than to notify GEC of the claim against GEC) and, in the event
that the
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Purchaser or such member of the Purchaser's Group recovers any
amount from such other person, the amount of the claim against
GEC shall be reduced to the extent of the amount recovered, less
all reasonable costs, charges and expenses incurred by the
Purchaser or such member of the Purchaser's Group recovering
that sum from such other person. So long as such claim shall
have been notified in accordance with paragraph 3.2 or clause 4
of the Environmental Deed (as applicable), then the proviso to
paragraph 3.2 or clause 4 of the Environmental Deed (as
applicable) shall be amended in relation to such claim so as to
require that legal proceedings be commenced (as described
therein) within six months from the date on which such claim was
so notified in order for the liability of GEC in respect of such
claim not to determine;
(ii) if GEC pays at any time to the Purchaser or the relevant member
of the Purchaser's Group an amount pursuant to a claim in
respect of the Warranties or under the Environmental Deed and
the Purchaser or relevant member of the Purchaser's Group
subsequently becomes entitled (or was already entitled) to
recover from some other person any sum in respect of any matter
giving rise to such claim, the Purchaser shall, and shall
procure that the relevant member of the Purchaser's Group shall,
take all reasonable steps (including, without limitation,
undertaking proceedings) to enforce such recovery, and shall
forthwith repay to GEC so much of the amount paid by GEC to the
Purchaser or the relevant member of the Purchaser's Group as
does not exceed the sum recovered from such other person less
all reasonable costs, charges and expenses incurred by the
Purchaser or relevant member of the Purchaser's Group recovering
that sum from such other person; and
(iii) If any amount is repaid to GEC by the Purchaser or the relevant
member of the Purchaser's Group pursuant to sub-paragraph
(C)(ii) above, an amount equal to the amount so repaid shall be
deemed never to have been paid by GEC to the Purchaser for the
purposes of paragraph 3.1.
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3.5 ACTS OF THE PURCHASER
(A) No claim shall lie against GEC under the Warranties to the extent that
such claim is attributable to:
(i) any voluntary act, omission, transaction or arrangement outside
the ordinary course of business carried out at the written
request of or with the written consent of the Purchaser before
Completion; or
(ii) any voluntary act, omission, transaction or arrangement carried
out by the Purchaser or on its behalf or by persons deriving
title from the Purchaser on or after Completion.
(B) GEC shall not be liable for any breach of the Warranties or under the
Share Purchase Documents (but without limiting the terms of the
indemnity in sub-clause 8.18(A)(i) and (iii)) which would not have
arisen but for any reorganisation or change in ownership of the Avery
Berkel Group after Completion or any changes in the accounting basis
on which any member of the Avery Berkel Group values its assets or any
other change in accounting policy or practice of any member of the
Avery Berkel Group after Completion.
3.6 ALLOWANCE, PROVISION OR RESERVE IN THE COMPLETION ACCOUNTS
No matter shall be the subject of a claim for breach of any of the
Warranties or under any other provisions of the Share Purchase Documents to
the extent that allowance, provision or reserve in respect of such specific
matter shall have been made in the Completion Accounts or has been included
in calculating creditors or deducted in calculating debtors in the
Completion Accounts or shall have been otherwise taken account of or
reflected in the Completion Accounts.
3.7 RETROSPECTIVE LEGISLATION
Save as provided in respect of the Contaminated Land Power under paragraph
22 of Schedule 3, no liability shall arise in respect of any breach of any
of the Warranties if and to the extent that liability for such breach
occurs or is increased wholly or partly as a result of any legislation not
in force at the date hereof or which takes effect retrospectively.
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3.8 THE PURCHASER'S KNOWLEDGE
GEC shall not be liable under the Warranties to the extent that any of
Randy Peeler, Tom Ellis, John McCann, Larry Gunning, Vijay Tharani or Jeff
Zimmerman had actual knowledge at the date hereof of the matters forming
the basis of the claim.
3.9 NO LIABILITY FOR CONTINGENT OR NON-QUANTIFIABLE CLAIMS
If any breach of the Warranties or claim under the Environmental Deed
arises by reason of some liability of the Purchaser or of an Avery Berkel
Group Company which, at the time such breach or claim is notified to GEC,
is contingent only or otherwise not capable of being quantified, then GEC
shall not be under any obligation to make any payment in respect of such
breach or claim unless and until such liability ceases to be contingent or
becomes capable of being quantified, as the case may be. So long as such
claim shall have been notified to GEC in accordance with paragraph 3.2 or
clause 4 of the Environmental Deed (as applicable) above, then the proviso
to paragraph 3.2 or clause 4 of the Environmental Deed (as applicable)
shall be amended in relation to such claim so as to require that legal
proceedings be commenced (as described therein) within six months from the
date on which the said liability ceases to be contingent or becomes capable
of being quantified, as the case may be, in order for the liability of GEC
in respect of such claim not to determine.
3.10 NO WARRANTIES GIVEN IN RESPECT OF FORECASTS, BUDGETS OR PROJECTIONS, THE
INFORMATION MEMORANDUM OR DISCLOSURE DOCUMENTS.
The Purchaser acknowledges that no Warranties are given by GEC in respect
of forecasts, budgets or projections or, save as expressly set out in this
Agreement, in respect of any statement made, information given or opinion
expressed in the Information Memorandum or any Disclosure Document.
3.11 PAYMENT OF CLAIM TO BE REDUCTION IN PURCHASE PRICE
Any payment made by or to GEC in respect of any claim under this Agreement
or the Environmental Deed shall constitute an adjustment to the Purchase
Price payable under clause 3 of this Agreement.
3.12 PARTIAL INTERESTS
The aggregate liability of GEC under any provision of this Agreement or the
other Share Purchase Documents or in
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consequence of a breach of any provision of this Agreement (including in
respect of the Warranties) or the other Share Purchase Documents in
relation to any loss suffered by, liability incurred by or diminution in
value of any body corporate or person being a member of the Avery Berkel
Group or in which any member of the Avery Berkel Group has an interest
shall not exceed the percentage of such loss, liability or diminution in
value which is equal to the existing percentage interest (as set out in
Schedule 7) of the Avery Berkel Group in such body corporate or person.
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SCHEDULE 5
PENSION ARRANGEMENTS
PART A
UK PENSIONS
1. Interpretation
In Part A of this Schedule the following expressions shall, unless the
context otherwise requires, have the following meanings:
"ACTIVE MEMBERS" means those employees and directors of Avery Berkel Group
Companies who are in GEC Plan Pensionable Service on the Completion Date.
"ACTUARY'S LETTER" means the letter dated 6th March from the GEC Actuary to
the Purchaser's Actuary, a copy of which is annexed to Part A of this
Schedule as Appendix A.
"APPROVAL" means approval as an exempt-approved scheme under Chapter I of
Part XIV of ICTA or as an approved scheme under Chapter IV of Part XIV of
ICTA.
"GEC ACTUARY" means A J Wise of Watson Wyatt Partners, 21 Tothill Street,
Westminster, London SW1H 9LL or Graham Mitchell of their Birmingham office,
or (if neither is a partner in that firm or capable of acting) another
partner in that firm (or any reconstruction of it) nominated jointly by GEC
and the trustee for the time being of the GEC Plan.
"GEC DEED" means a definitive trust deed and rules dated 4 March 1982 as
amended constituting the GEC Plan.
"GEC PLAN" means the GEC 1972 Plan, a pension scheme currently constituted
under the GEC Deed and including SBS. Where the context so requires the
GEC Plan includes its trustee or trustees.
"GEC PLAN PENSIONABLE SERVICE" means pensionable service under the GEC
Plan.
"PARTICIPATION PERIOD" means the period starting on the day immediately
following Completion and ending on the day immediately before the Pension
Transfer Date.
"PAYMENT DATE" means the date selected by the GEC Plan and agreed by the
Purchaser's Scheme (such agreement not to be
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unreasonably withheld) not later than 14 days (a) after the GEC Actuary
shall have certified and the Purchaser's Actuary agreed the Transfer Amount
(unadjusted for the Timing Adjustment) or (b) if later after fulfilment of
the Transfer Conditions.
"PENSION TRANSFER DATE" means the date falling 6 months after the
Completion Date or such earlier date as may be agreed in writing by GEC and
the Purchaser by one months' notice or such date as the Purchaser may
notify by giving two weeks prior notice if it receives a notification
pursuant to paragraph 2.2.(B).
"PURCHASER'S ACTUARY" means Stuart Benson of William M. Mercer Limited,
Clarence House, Clarence Street, Manchester, M2 4DW or such other actuary
as may be nominated by the Purchaser.
"PURCHASER'S SCHEME" means the retirement benefits scheme or personal
pension arrangements established or nominated by the Purchaser under
paragraph 3.1. Where the context so requires the Purchaser's Scheme
includes its trustee or trustees or, if it is a personal pension
arrangement, its managers.
"SBS" means the Selected Benefit Scheme, a part of the GEC Plan.
"TIMING ADJUSTMENT" has the meaning given in the Actuary's Letter.
"TRANSFER AMOUNT" means the value of past service reserve calculated in
accordance with the Actuary's Letter attributable to Transferring Members
as at the Pension Transfer Date certified by the GEC Actuary and agreed by
the Purchaser's Actuary. For the purpose of calculating the Transfer
Amount:
(A) the amount of any liabilities or benefits arising by virtue of any
change in legislation, recognised interpretation of the law by the
European or national courts, or revenue practice after the Pension
Transfer Date shall be ignored and excluded;
(B) for the avoidance of doubt, any period of pensionable service under
the GEC Plan which is not treated as continuous with the latest period
of pensionable service (but is treated separately on a deferred
pension basis) shall be treated on a deferred basis;
(C) it is assumed that all liabilities are calculated in the light of the
equal treatment rule in Section 62 of the
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Pensions Act 1995 and assuming that Article 141 of the Treaty of Rome
has overriding effect; and
(D) any improvements to the benefits under the GEC Plan which have been
promised by an announcement shall be deemed to have been duly effected
under the GEC Plan and to have come into force on the effective date
specified in the announcement.
"TRANSFER CONDITIONS" are:
(A) that any material breach of their obligations under this Agreement by
the Purchaser or the Purchaser's Scheme notified to them in writing by
GEC or the GEC Plan has either been remedied or, if not remedied or
only partially remedied, has been declared by GEC and the GEC Plan
(without its necessarily waiving such breach) as inapplicable as a
transfer condition;
(B) that conditions in paragraphs 3.3(A) to 3.3(D) (where required) have
been and remain fulfilled (including actual approval under 3.3(A) and
3.3(B), actual conformity with the preservation requirements, if
required and the provision of an actual certificate complying with
3.3(D)); and
(C) that the trustees of the GEC Plan (who shall use all reasonable
endeavours) have obtained the approval of the pension schemes office
of the Inland Revenue to the transfer, if required.
"TRANSFERRING MEMBERS" means those Active Members who join the Purchaser's
Scheme on the Pension Transfer Date and who elect that their accrued rights
under the GEC Plan are transferred to the Purchaser's Scheme in
substantially the same form as is attached as Appendix B.
Otherwise the words and expressions used in this Schedule are as defined in
Schedule 1 to this Agreement.
2. THE GEC PLAN
2.1 Each Avery Berkel Group Company that participates in the GEC Plan on
Completion shall continue to do so in respect of the Active Members only
during the Participation Period subject to the approval of the Pension
Schemes Office of the Inland Revenue. At the end of the Participation
Period each Avery Berkel Group Company shall cease to participate in the
GEC Plan.
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2.2 GEC shall during the Participation Period:
(A) not do any act or omit to do any act likely to result in the Approval
of the GEC Plan being prejudiced or withdrawn;
(B) not without giving the Purchaser one month's prior written notice
(such notice not to expire before the date falling three months after
the Completion Date) (except with the Purchaser's consent) amend the
GEC Plan (except as required by law or any competent regulatory
authority) or exercise any discretion under the GEC Plan so as to
affect materially the interests under the GEC Plan of any Active
Member or any person claiming under him or the Adjusted Transfer
Amount;
(C) not make such an amendment as referred to in paragraph 2.2(B), without
giving the Purchaser such reasonable notice, so as to enable the
Purchaser and GEC to co-ordinate the timing of announcements to their
respective employees who are members of the GEC Plan.
2.3 The Purchaser shall during the Participation Period:
(A) deduct (or procure the deduction) from the pay of Active Members the
contributions payable by them to the GEC Plan (including contributions
to SBS) and pay the same to the GEC Plan in accordance with the time
limits imposed by the GEC Plan and GEC for all the GEC Plan's
participating companies.
(B) pay (or procure the payment) to the GEC Plan the employer's
contributions in relation to Active Members at the same percentage
rate of member's earnings as is paid by GEC to the GEC Plan (currently
6.6% of Pensionable Earnings or such revised rate as is paid by GEC to
the GEC Plan having given the Purchaser at least one month's notice of
the change) in accordance with the time limits imposed by the GEC Plan
and GEC for all its participating companies.
(C) procure that each Avery Berkel Group Company which participates in the
GEC Plan during the Participation Period:
(i) complies in all other material respects with the governing
provisions of the GEC Plan as it relates to that Avery Berkel
Group Company and its Employees who are Active Members and does
not do or omit to do any act or thing whereby the Approval of
the GEC Plan
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would be likely (in the GEC Plan's opinion) to be prejudiced;
(ii) provides GEC with any information reasonably required in
relation to each Avery Berkel Group Company's participation in
the GEC Plan for the efficient administration of the GEC Plan
promptly following a written request by GEC for such
information;
(iii) co-operates in all respects with the reasonable requests of GEC
to compliance with the requirements of the Pensions Act 1995 and
associated regulations;
(iv) at the request of GEC nominates GEC or such other person as GEC
may direct:
(a) as the appropriate person under section 21(9) (as added by
SI 1996 No 1216 as amended) of the Pensions Act 1995
(alternative proposal to member nominated directors);
(b) as its representative for the purposes of section 58(4) of
the Pensions Act 1995 (Schedule of Contributions) as
modified by the Occupational Pension Schemes (Minimum
Funding Requirement and Actuarial Valuation) Regulations
1996 SI 1996 No. 1536; and
(c) as its agent for the purpose of consultation under section
35(5) as modified by SI 1996 No. 3127 of the Pensions Act
1995 (Investment Principles);
(v) will not make any application under section 11(3) of the
Pensions Act 1995 (application to wind up).
(vi) will not increase the aggregate pensionable earnings of the
Active Members during the Participation Period by more than 5%
per annum except on such reasonable terms as GEC may require,
including without limitation, the payment of any additional
contributions;
(vii) will not exercise any power or discretion or do any act or omit
to do act which affects the benefits of any Active Member or the
final Transfer Amount, except on such terms as GEC may
reasonably require.
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3. THE PURCHASER'S SCHEME
3.1 The Purchaser shall at least two months before the Pension Transfer Date
establish or nominate a retirement benefits scheme or other appropriate
arrangement which has or is capable of having Approval and to which the GEC
Plan can make a transfer of assets without prejudicing Approval of the GEC
Plan.
3.2 Subject to paragraph 3.4 the Purchaser shall procure that the Purchaser's
Scheme shall provide in respect of the pensionable service of those Active
Members who are participating in the GEC Plan immediately prior to the
Pension Transfer Date under the Purchaser's Scheme on or after the Pension
Transfer Date benefits on a defined contribution basis (including pension,
lump sum death in service and enhanced ill health benefits (including
PHI)), in respect of which the relevant employers shall contribute a
minimum of 7.1 per cent. of the said Active Members pensionable salaries
per annum (to include the costs of administering the Purchaser's Scheme) in
addition to the payment by the relevant employers of the full rate National
Insurance Contributions to provide the SERPS pension on a contracted-in
basis or its equivalent. Actual minimum rates per member may vary whether
on an age related basis or otherwise in such manner as the Purchaser's
Actuary and the GEC Actuary may agree (such agreement not to be
unreasonably withheld).
3.3 The Purchaser shall use all its reasonable endeavours to procure that (with
such assistance of GEC, where reasonably required) at least 14 days before
the Pension Transfer Date:
(A) the Purchaser's Scheme will be (or remain) approved by the pension
schemes office of Inland Revenue as an exempt-approved or approved
scheme for the purposes of Chapter I or Chapter IV of Part XIV of
ICTA;
(B) the Purchaser's Scheme will be approved by the pension schemes office
of the Inland Revenue for the purpose of receiving the transfer
hereunder from the GEC Plan;
(C) the Purchaser's Scheme has been established (where appropriate) in
conformity with the preservation requirements of the Pension Schemes
Act 1993 and will recognise GEC Plan Pensionable Service of Active
Members as linked qualifying service; and
(D) the Purchaser's Actuary has delivered a certificate addressed to GEC
and to the GEC Plan in such terms as GEC may require confirming that
at the date the certificate is
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given the terms of the Purchaser's Scheme provide for benefits
complying with paragraphs 3.2 and 4.1 of Part A of this Schedule.
3.4 Where after the date of the Agreement but before the Pension Transfer Date
the future service benefits for the Active Members are altered by the
substitution of alternative benefits or an alternative scheme for the GEC
Plan so that the long term normal employer contribution rate is reduced
below 7.1% then the reduced rate as calculated by the GEC Actuary and
agreed by the Purchaser's Actuary shall be substituted for the 7.1% figure
in clause 3.2 above .
4. TRANSFER FROM THE GEC PLAN TO THE PURCHASER'S SCHEME
4.1 Subject to completion of the payments or transfers under 4.3 (and if
applicable 4.4) below the benefits accrued to and in respect of
Transferring Members under the GEC Plan in respect of the period up to and
including the Pension Transfer Date will cease. The Purchaser shall procure
that the part of the Transfer Amount which is agreed by the GEC Actuary and
the Purchaser's Actuary as being applicable to each Transferring Member
shall be immediately credited in full to provide benefits for and in
respect of pensionable service prior to the Pension Transfer Date for the
relevant Transferring Member under the Purchaser's Scheme. The GEC Actuary
shall for this purpose calculate the Transfer Amount on an individual basis
(using the agreed assumptions in the Actuary's Letter or using such other
assumptions for the apportionment as the GEC Actuary and the Purchaser
shall agree) and deliver those calculations to the Purchaser's Actuary for
agreement together with the calculations referred to in paragraph 4.2
below.
4.2 Immediately after the Pension Transfer Date the GEC Actuary shall begin
calculating the Transfer Amount which would be payable if all Active
Members agree to transfer their entitlements with a view to completing such
calculations within 90 days of the Pension Transfer Date and then within
the following 30 days agree such calculations with the Purchaser's Actuary.
Following the agreement of such calculations or their determination by an
independent actuary if applicable, each Active Member who has accepted
membership of the Purchaser's Scheme as at the Pension Transfer Date and is
still a member of the Purchaser's Scheme shall be offered the opportunity
to transfer their accrued rights from the GEC Plan in respect of service
prior to the Pension Transfer Date to the Purchaser's Scheme in the form
agreed by the Purchaser and GEC (neither Party's agreement to be
unreasonably withheld or delayed) and
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substantially in the form attached as Appendix B to this Schedule and any
Active Member who elects to such a transfer by receipt of his signed form
by the trustees of the GEC Plan within 30 days of the date when such forms
are posted to him shall become a Transferring Member for the purposes of
this schedule. On the expiry of this 30 days period for the return of forms
the GEC Actuary shall calculate and agree with the Purchaser's Actuary the
final Transfer Amount. For the purpose of this paragraph only, and in order
for the respective actuaries to agree the calculations undertaken by the
GEC Actuary, the GEC Actuary and the Purchaser's Actuary will agree a date
and the respective actuaries will agree the Timing Adjustment as though
this date were the Payment Date.
4.3 Subject to fulfilment of the Transfer Conditions GEC will use its
reasonable endeavours to procure that the GEC Plan will transfer to the
Purchaser's Scheme the Transfer Amount as adjusted in accordance with the
Timing Adjustment (the "Adjusted Transfer Amount") on the Payment Date. For
the avoidance of doubt for the purpose of calculating the Transfer Amount
to be paid on the Payment Date, the Timing Adjustment will be calculated in
accordance with definition set out in the Actuary's Letter and will allow
for the period up to Payment Date or, if later, two days before the actual
date of payment.
4.4 If the sum (if any) actually transferred from the GEC Plan to the
Purchaser's Scheme on or before the Payment Date in respect of the
Transferring Members is an amount which is less than the Adjusted Transfer
Amount (the amount of such difference being the Shortfall) then GEC shall
pay to the Purchaser a sum in cash equal to the Shortfall (but adjusted by
the Timing Adjustment for the period from the Payment Date to the day
immediately before the date of actual payment by GEC of an amount equal to
the Shortfall) by way of a repayment of an equivalent amount of the
consideration payable for the Avery Berkel Shares under this Agreement
within 14 days of the Payment Date. On receipt of the cash sum equal to the
Shortfall, the Purchaser shall immediately pay an amount equal to the
Shortfall to the Purchaser's Scheme which shall be credited in full to the
accounts for the Transferring Members and the GEC Actuary and the
Purchaser's Actuary shall agree how such amount should be attributed
amongst the Transferring Members accounts. If after payment of the
Shortfall the Purchaser achieves a reduction in its liability to
corporation tax as a result of being able to treat a payment of an amount
equal to the Shortfall to the Purchaser's Scheme as deductible for
corporation tax purposes the Purchaser shall pay to GEC within 14 days
after the Purchaser would otherwise have
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been liable to pay the amount of the corporation tax saved a sum equal to
that corporation tax saving.
4.5 Data pertaining to the benefits payable or prospectively or contingently
payable under the GEC Plan as at the Pension Transfer Date will be made
available to the GEC Actuary and the Purchaser's Actuary for the purpose of
enabling them to calculate and check respectively the Transfer Amount.
4.6 GEC agrees to indemnify the Purchaser (and any such payments pursuant to
this indemnity shall as far as possible be by way of repayment of the
consideration payable for the Avery Berkel Shares pursuant to this
Agreement) an amount equal to (a) any payment for which any Avery Berkel
Group Company is or becomes liable to make to the GEC Plan whether before,
at or after Completion pursuant to section 75 of the Pensions Act 1995 or
the regulations made thereunder; (b) any liability, costs, claims and
expenses arising in connection with the Berkel Limited Retirement Benefit
Plan (as merged with the GEC Plan); and any payment in excess of the amount
referred to in paragraph 2.3(B) or otherwise arising and properly payable
under the terms of this Schedule.
4.7 GEC and the Purchaser shall co operate and GEC agrees to give reasonable
assistance to the Purchaser with all communications to the Active Members
and Transferring Members in relation to the matters set out in this Part A
of Schedule 5.
4.8 If requested GEC shall use its reasonable endeavours to procure that the
actuary to the GEC Plan provides a certificate under Section 75 Pensions
Act 1995 as at the Pension Transfer Date with reference to the cessation of
participation of the Avery Berkel Group Companies in the GEC Plan subject
to the Purchaser paying the reasonable costs of the actuary to the GEC Plan
incurred in the preparation of the certificate.
5. SELECTED BENEFIT SCHEME
The Purchaser shall procure that the amount of any sums transferred from
the SBS in respect of a Transferring Member are credited in full to the
account of the relevant Transferring Member under the Purchaser's Scheme.
6. CALCULATIONS UNDER THE ACTUARY'S LETTER, ASSET TRANSFERS ETC.
All calculations under the Actuary's Letter shall be made by the GEC
Actuary (who shall on request make available to the Purchaser's Actuary
requisite information for reasonable
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verification regarding those and any other calculations which this
Agreement provides are to be made by the GEC Actuary).
7. ENTITLEMENT UNDER THE GEC PLAN CEASES
Following completion of the said transfer no Transferring Member or person
claiming through or in respect of him shall be entitled to any pension or
other receipt or benefit under the GEC Plan.
8. RELEASE
8.1 On completed receipt of the Transfer Amount from the GEC Plan, the
Purchaser shall procure that the Purchaser's Scheme will immediately assume
responsibility for all liabilities of the GEC Plan to and in respect of
Transferring Members in relation to which the Transfer Amount was paid.
8.2 The Purchaser and GEC shall use all their reasonable endeavours to procure
that at least three days before the Payment Date the trustees of the
Purchaser's Scheme and the trustees of the GEC Plan respectively enter into
a transfer agreement substantially in the form attached as Appendix C
provided that this clause 8.2 will not apply if the Transfer Amount is to
be paid to a personal pension arrangement.
9. DISPUTE RESOLUTION
9.1 The parties will use reasonable endeavours to procure that the respective
trustees or, for a group personal pension plan, managers of the GEC Plan
and the Purchaser's Scheme agree the provisions of paragraph 9.2.
9.2 Subject to paragraph 9.1 if any dispute arises as to any actuarial
determination or certification to be made or given under Part A of this
Schedule, the pensions directors of GEC and the Purchaser will discuss the
matter with a view to resolving the dispute. If the pensions directors
cannot resolve the dispute, either party may refer it to an independent
actuary, to be nominated by the Purchaser and GEC jointly or, if they
cannot agree, by the President of the Institute of Actuaries on application
by either party. The independent actuary will act as expert and not as
arbitrator, and his decision will be final and binding on the parties. His
costs will be borne equally by the GEC Plan and the Purchaser's Scheme.
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PART B
UNITED STATES BENEFITS
1. Interpretation
1.1 For the purposes of Part B of this Schedule, the following expressions
shall, unless the context otherwise requires, have the following meanings:
"BERKEL" means Berkel Incorporated.
"BERKEL PENSION PLAN" means the Berkel Incorporated Employees' Pension Plan
and Trust, as amended.
"BERKEL PENSION PLAN ASSETS" means the assets of the GEC Pension Trust
allocable to the Berkel Pension Plan.
"BERKEL PENSION TRUST" means the trust to be established or designated by
Berkel to fund the Berkel Pension Plan.
"BERKEL PLANS" means the employee benefit plans (as described in Section
3(3) of ERISA), programs, or arrangements sponsored, maintained, or
contributed to by Berkel to provide retirement, profit sharing, deferred
compensation, welfare, or other benefits to employees of Berkel and their
dependants and beneficiaries.
"PURCHASER'S SAVINGS PLAN" means the qualified defined contribution plan
established or designated by the Purchaser to cover and provide benefits to
Berkel Savings Plan Participants which may include (at the election of the
Purchaser) a defined contribution plan that is established and maintained
by an affiliate of the Purchaser under which Berkel is a participating
"BERKEL SAVINGS PLAN PARTICIPANT" means an individual described by any of
the following sub-paragraphs:
(A) an individual who is employed by an Berkel as at the Savings Transfer
Date;
(B) an individual whose most recent termination of employment occurred
prior to the Savings Transfer Date with respect to Berkel and who is
not employed as of the Savings Transfer Date by an entity that will
continue to be a participating employer under the GEC Savings Plan
after the Savings Transfer Date;
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(C) an individual who is entitled to all or a portion of a benefit accrued
under the GEC Savings Plan for an individual described in sub-
paragraph (A) or (B) above by reason of a qualified domestic relations
order (as describe in Code Section 414(p)); or
(D) an individual who is a surviving spouse or other beneficiary who is
entitled to a benefit as the result of a benefit accrued under the GEC
Savings Plan for an individual described in sub-paragraph (A) or (B)
above.
"PURCHASER'S SAVINGS TRUST" means the qualified trust established or
designated by Purchaser to receive the transfer of assets described in this
Part B from the GEC Savings Trust.
"BERKEL WELFARE PLAN PARTICIPANT" means an individual who is covered under
any portion of the GEC Welfare Plan by reason of the current or former
employment of an individual with Berkel.
"CODE" means the Internal Revenue Code of 1986, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended
"GAI" means Greensboro Associates, Inc., a Delaware corporation.
"GEC COMPANY" means each of GAI, the other companies that continue to
participate in the GEC Savings Plan after the Savings Transfer Date, and
the members of their controlled groups determined in accordance with Code
Section 414(b) or (c).
"GEC PENSION TRUST" means the GEC-USA Master Pension Investment Trust.
"GEC SAVINGS PLAN" means the GEC-USA Employees' Savings and Investment
Plan.
"GEC SAVINGS TRUST" means the GEC-USA Employees' Savings and Investment
Trust.
"GEC WELFARE PLAN" means the GEC-USA Employees' Welfare Benefit Plan.
"PENSION ASSET TRANSFER DATE" means the date on which Berkel Pension Plan
Assets are transferred to the Berkel Pension Trust. The Pension Asset
Transfer Date shall be the last business day of the calendar month, which
business day first follows the
<PAGE>
121
expiration of the 60-day period after Completion, unless GAI and Berkel
agree in writing to an earlier or later date.
"SAVINGS TRANSFER DATE" means the date on which assets and liabilities of
the GEC Savings Plan and the GEC Savings Trust related to Berkel Savings
Plan Participants are transferred to the Berkel Savings Plan and the Berkel
Saving Trust. The Savings Transfer Date shall be a date no later than the
first Friday following the expiration of the 60-day period immediately
following Completion unless GAI and Purchaser agree in writing to an
earlier or later date.
"Seller" means the GEC Group.
"US DEFERRED ARRANGEMENT" means the deferred compensation arrangement in
effect with respect to certain current and former employees at Berkel
Incorporated;
"US SCHEME" means the Berkel Pension Plan and the GEC Savings Plan;
"WELFARE PLAN CHANGE DATE" means the date of Completion unless a later date
is agreed to by GAI and Berkel on which Berkel shall cease participation in
the GEC Welfare Plan, but no event shall such date be later than 31
December following Completion.
References in this Part B of the Schedule to paragraphs are to the
paragraphs of this Part B of the Schedule unless the context otherwise
requires. Expressions whose meanings are defined in other parts of this
Agreement shall, unless the context otherwise requires, have the same
meaning in Part B of this Schedule.
1.2 GEC shall procure that GAI complies with its obligations under Part B of
this Schedule and Purchaser shall procure that Berkel complies with their
obligations under Part B of this Schedule.
2. TRANSFER FROM GEC SAVINGS PLAN TO PURCHASER SAVINGS PLAN
2.1 The obligation of the GEC Companies and the GEC Savings Plan to provide
benefits to the Purchaser Savings Plan Participants shall be transferred to
Purchaser, and the Purchaser Savings Plan in accordance with this Part B2.
2.2 Purchaser shall establish or designate the Purchaser Savings Plan and the
Purchaser Savings Trust on or before Completion and shall provide GAI with
a copy of such plan and trust at least 20 days prior to Completion. All
employee and employer
<PAGE>
122
contributions to be made by or on behalf of Purchaser Savings Plan
Participants for any pay period beginning on or after Completion shall be
made to the Purchaser Savings Plan. If, in the reasonable opinion of GAI,
the provisions of the Purchaser Savings Plan and the Purchaser Savings
Trust do not satisfy the requirements of Code Sections 401(a) and 501(a),
Berkel or the Purchaser shall furnish to GAI, prior to Completion, an
opinion of legal counsel that the Purchaser Savings Plan satisfies the
requirements of Code Section 410(a) and that the Purchaser Savings Trust is
exempt from taxation under Code Section 501(a). The Purchaser Savings Plan
shall preserve the accrued benefits and the optional forms of benefit
distribution required by Code sections 411(d)(6) and such other rights and
features required by the Code and ERISA.
2.3 Purchaser shall assume, and shall cause Berkel to assume, all the
obligations of the GEC Savings Plan and the GEC Companies to provide
benefits accrued under the GEC Savings Plan to the Purchaser Savings Plan
Participants. The account balances of the Purchaser Savings Plan
Participants under the Purchaser Savings Plan shall be transferred on the
Savings Transfer Date to the Purchaser Savings Plan. From and after the
Savings Transfer Date, the GEC Companies and the GEC Savings Plan shall
have no liability whatsoever with respect to liabilities transferred from
the GEC Savings Plan to the Purchaser Savings Plan.
2.4 GAI shall cause assets of the GEC Savings Trust equal to the total account
balances of Purchaser Savings Plan Participants to be transferred to the
Purchaser Savings Trust on the Savings Transfer Date. In no event shall the
amount transferred from the GEC Savings Trust to the Purchaser Savings
Trust be less than the amount required to be transferred under Code Section
414(l). GEC shall cause an amount equal to the account balances of the
Purchaser Savings Plan Participants as of the Savings Transfer Date to be
transferred in cash or other property acceptable to the Purchaser and GAI.
2.5 No later than 31 December, 2000 (or, if later, the end of the remedial
amendment period under Code Section 401(b)), Purchaser shall request from
the Internal Revenue Service a determination letter that the Purchaser
Savings Plan satisfies the qualification requirements of Code Section
401(a) and that the Purchaser Savings Trust is exempt from taxation under
Code Section 501(a). Purchaser shall make such changes to the Purchaser
Savings Plan and the Purchaser Savings Trust as may be required by the
Internal Revenue Service to issue a favourable determination letter.
Purchaser shall promptly provide GAI with
<PAGE>
123
a copy of the determination letter received by Purchaser with respect to
the Purchaser Savings Plan and the Purchaser Savings Trust.
2.6 Purchaser and GAI shall make, or cause to be made, such filings with the
Internal Revenue Service or any other government agency as may be required
in connection with the transfer of assets and liabilities to the Purchaser
Savings Plan and the Purchaser Savings Trust.
2.7 Following the transfer described above, GAI and Purchaser shall make such
adjustments or corrections in the amount of assets and liabilities
transferred to the Purchaser Savings Plan and Purchaser Savings Trust as
may be needed to comply with the terms of Part B of this Schedule or the
Code or ERISA. If GAI and Purchaser cannot agree, in good faith, on whether
any such adjustments or corrections are required, or the magnitude of any
such adjustments or corrections, an independent third-party appointed by
GAI (with the agreement of Berkel, which agreement shall not be
unreasonably withheld) shall decide on the adjustment or correction
required.
2.8 Purchaser shall pay all contributions in respect of the Berkel Savings Plan
Participants required to be paid to the GEC Savings Trust for pay periods
beginning on or before the Savings Transfer Date.
2.9 Purchaser shall pay to GAI all unpaid administrative and hourly charges and
expenses incurred with respect to the Purchaser Savings Plan Participants
under the GEC Savings Plan which are required to be paid to GAI in
accordance with past practice for periods on or prior to the Savings
Transfer Date.
2.10 No less than 10 days before Completion, Purchaser Savings Plan Participants
will be notified by GAI and Purchaser in a joint announcement that the
participants will, on the Savings Transfer Date, cease to be participants
in the GEC Savings Plan and will become participants in the Purchaser
Savings Plan (with effect from the Savings Transfer Date). Such
announcement will be drafted by GAI, and a draft will be provided to
Purchaser for approval (such approval not to be unreasonably withheld) at
least five working days before the announcement is to be sent. Purchaser
and GAI will arrange for the distribution of the announcement to Purchaser
Savings Plan Participants.
2.11 Purchaser shall indemnify and hold the Seller, GAI and their affiliates
harmless from all costs, benefit payments, expenses or other damages that
may result to Seller, GAI and their
<PAGE>
124
affiliates from any claim for any benefit alleged to be payable under the
GEC Savings Plan, the Purchaser Savings Plan or from the GEC Savings Trust
or the Purchaser Savings Trust with respect to the Berkel Savings Plan
Participants and their beneficiaries provided however that such
indemnification shall not apply to any act or omission of Seller, GAI or
their affiliates or agents which constitutes gross negligence or a
violation of the terms of this Agreement.
3. WELFARE PLAN COVERAGE
3.1 The obligation of the GEC Companies and the GEC Welfare Plan to provide
benefits to the Berkel Welfare Plan Participants shall cease as of the
Welfare Plan Change Date in accordance with this subpart 3.
3.2 The GEC Welfare Plan shall pay claims incurred on or prior to the Welfare
Plan Change Date that are required to be paid under the terms of the GEC
Flexible Spending Accounts Program portion of the GEC Welfare Plan. For
this purpose, a medical or dental claim is incurred on the date the service
is rendered or the product is purchased. A dependent care claim is incurred
on the date the service is provided. GAI may amend the GEC Welfare Plan to
provide that all claims of Berkel Welfare Plan Participants must be
presented for payment to the GEC Welfare Plan by the end of the calendar
month that begins after the Welfare Plan Change Date.
3.3 Berkel shall be responsible for, and shall pay to GAI, all claims incurred
by Berkel Welfare Plan Participants on or prior to the Welfare Plan Change
Date, whether paid by the GEC Welfare Plan before or after the Welfare Plan
Change Date and expenses related to such claims, including, but not limited
to, GAI's applicable administration charge. Berkel shall also pay to GAI
for the calendar month which commences after the Welfare Plan Change Date
the GAI administrative change for GEC Welfare Plan coverage which was
charged to Berkel for the calendar month in which the Completion occurred.
Berkel shall also pay to GAI any expenses incurred by GAI for the transfer
of Berkel Welfare Plan Participant information to Berkel or an entity
designated by Berkel and GAI hourly charges for the time of GAI personnel
in causing such transfer to occur.
3.4 On and after the Welfare Plan Change Date, Berkel shall assume
responsibility, and shall be liable for, providing any of the following
benefits to Berkel Welfare Plan Participants:
<PAGE>
125
(A) medical, dental, or other employee welfare benefits required to be
provided under the Consolidated Omnibus Budget Reconciliation Act of
1986 or under any provisions of the GEC Welfare Plan that require the
continuation of such benefits after termination of a Berkel Welfare
Plan Participant's normal eligibly for such benefits;
(B) medical, dental, life or other employee welfare benefits required to
be provided by reason of an Berkel Welfare Plan Participant's
disability or illness; and
(C) all other employee welfare benefits,
subject to any right to amend or terminate such benefits in the future that
may have been retained by Berkel or GAI, and Berkel shall assume liability
as of the Welfare Plan Change Date for all losses, damages, taxes, and
sanctions that relate to such benefits provided to the Berkel Welfare Plan
Participants under the GEC Welfare Plan, including, but not limited to,
liability under Code Section 4980B and Parts 6 and 7 of Title I of ERISA
provided that such assumption will not apply to losses solely resulting
from the gross negligence of GAI or its agents. Notwithstanding the
foregoing and no later than the Welfare Plan Change Date, Berkel shall
establish a flexible spending account plan (which shall be deemed a spin-
off from the GEC Welfare Plan) providing identical benefits to that
provided under the Flexible Spending Account Program under the GEC Welfare
Plan and shall continue in effect for the remainder of the calendar year in
which the Completion occurs the Flexible Spending Account Program elections
of Berkel Welfare Plan Participants that were in effect for the calendar
year in which the Completion occurred. Berkel shall also continue the
medical and dental plans in effect at Berkel at the beginning of the
calendar year in which the Completion occurs until the end of the calendar
year in which the Completion occurs.
3.5 Prior to the Welfare Plan Change Date, Berkel Welfare Plan Participants
will be notified by GAI and Berkel in a joint announcement that Berkel
Welfare Plan Participants will, on the Welfare Plan Change Date, cease to
be participants in the GEC Welfare Plan and that Berkel will be responsible
for providing welfare benefits to Berkel Welfare Plan Participants after
the Welfare Plan Change Date. Such announcement will be drafted by GAI, and
a draft will be provided to Berkel for approval (such approval not to be
unreasonably withheld) at least five working days before the announcement
is to be sent. Berkel and GAI will arrange for the distribution of the
announcement to the Berkel Welfare Plan Participants.
<PAGE>
126
3.6 Purchaser and Berkel shall indemnify and hold the Seller, GAI and their
affiliates harmless from all costs, benefit payments, expenses or other
damages that may result to Seller, GAI and their affiliates from any claim
for any benefit alleged to be payable under the GEC Welfare Plan with
respect to Berkel Welfare Plan Participants, provided however that such
indemnification shall not apply to any acts or omissions of Seller, GAI or
their affiliates or agents which constitute gross negligence or a violation
of the terms of this Agreement.
4. BERKEL PLANS
4.1 GEC shall procure that prior to the Completion Date GAI becomes the sponsor
of the Berkel Pension Plan with authority to amend the Plan and that an
amendment may be made to the Plan to cease benefit accruals on the
Completion Date.
4.2 GAI is authorised to send to all Berkel Pension Plan participants and any
affiliated union a notice under ERISA Section 204(h) regarding cessation of
benefit accruals.
4.3 The Purchaser shall indemnify the Seller, GAI and their affiliates against
any losses, liabilities, expenses, costs, damages or claims incurred in
relation to any change in the Berkel Pension Plan following the Completion
Date contemplated under the terms of this Agreement.
4.4 Berkel shall consult with the Purchaser in connection with the notice to be
provided under ERISA Section 204(h) and in connection with any negotiations
with any affiliated union in respect to the cessation of benefit accruals
under the Berkel Pension Plan.
5. GAI AS PLAN ADMINISTRATOR
GAI shall cease to be the administrator (as such term is defined in Section
3(16)(A) of ERISA) of any Berkel Plan other than the Berkel Pension Plan at
Completion.
<PAGE>
127
SCHEDULE 6
TAX COVENANT
[Circulated separately]
<PAGE>
128
SCHEDULE 7
BASIC INFORMATION ABOUT THE AVERY BERKEL GROUP COMPANIES
AND THE ASSOCIATE COMPANIES
<PAGE>
129
SCHEDULE 8
PROPERTY SCHEDULE
PART I - CERTIFICATED PROPERTIES
--------------------------------
1. FREEHOLD CERTIFICATED PROPERTIES WITH REGISTERED TITLE
<TABLE>
<CAPTION>
PROPERTY TITLE NUMBER USE REGISTERED PROPRIETOR
======================================================================================================================
<S> <C> <C> <C>
Soho Foundry, WR23527 Factory GEC Avery Limited
Foundry Lane,
Smethwick
======================================================================================================================
</TABLE>
<PAGE>
130
2. FREEHOLD CERTIFICATED PROPERTIES WITH UNREGISTERED TITLE
<TABLE>
<CAPTION>
PROPERTY DATE OF CONVEYANCE USE OWNER
TO OWNER
======================================================================================================================
<S> <C> <C> <C>
Intec Site 8th September 1952 Factory GEC Avery Properties Limited
Woodruff Way, and deed of
Tamebridge exchange dated 2nd
October 1964
======================================================================================================================
Sertec Site 8th September 1952 Factory GEC Avery Properties Limited
Woodruff Way, and deed of
Tamebridge exchange dated 2nd
October 1964
======================================================================================================================
</TABLE>
<PAGE>
131
3. LEASEHOLD CERTIFICATED PROPERTIES WITH UNREGISTERED TITLE
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT TENANT
===========================================================================================================================
<S> <C> <C> <C> <C>
72-76 Baggrave Street, 9th October 1987 Robjay Properties From 10th December GEC Avery Limited
Leicester Limited (1) 1987 to 9th December
Weighmaster 2002
Scales Limited (2)
===========================================================================================================================
</TABLE>
4. OVERSEAS CERTIFICATED PROPERTIES
<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BLACKBURN STREET, HQ OFFICES SOUTH AFRICAN SCALE CO NA NA NA
APEX INDUSTRIAL SITES, AND SERVICE (PROPRIETARY) LIMITED
PO BOX 1252, BRANCH
BENONI 1500,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
132
PART II - UK PROPERTIES
1. FREEHOLD PROPERTIES WITH REGISTERED TITLE
<TABLE>
<CAPTION>
PROPERTY TITLE NUMBER USE REGISTERED PROPRIETOR
=============================================================================================================================
<S> <C> <C> <C>
Land at Foundry Row, CL133 Depot GEC Avery Limited
Redruth
---------------------------------------------------------------------------------------------================================
Unit D1 and D2, 27 Jarman Way, HD276344 Depot GEC Avery Limited
Orchard Road Industrial
Estate,
Royston
---------------------------------------------------------------------------------------------================================
Land at Carden Street HW129553 Depot GEC Avery Limited
Worcester
---------------------------------------------------------------------------------------------================================
10A and 10B Humber Bridge HS284801 (formerly HS234537) Depot GEC Avery Limited
Industrial Estate, Barton on
Humber
=============================================================================================================================
</TABLE>
<PAGE>
133
2. FREEHOLD PROPERTIES WITH UNREGISTERED TITLE (INCLUDING UK PROPERTIES NOT
LOCATED IN ENGLAND OR WALES)
<TABLE>
<CAPTION>
PROPERTY DATE OF CONVEYANCE TO OWNER USE OWNER
=============================================================================================================================
<S> <C> <C> <C>
9 Glebe Street, 18th February 1953 Depot GEC Avery Limited
Dumfries
-----------------------------------------------------------------------------------------------------------------------------
224 Helen Street, 10th February, 1969 Office/Depot GEC Avery Limited
Govan,
Glasgow
-----------------------------------------------------------------------------------------------------------------------------
Kings Road, 31st March, 1981 Depot GEC Avery Limited
St. Peter's Port,
Guernsey
-----------------------------------------------------------------------------------------------------------------------------
43 Hillgrove Street, 8th September 1972 Depot GEC Avery Limited
St. Helier,
Jersey
-----------------------------------------------------------------------------------------------------------------------------
Land adjoining the River 14th July 1972 Part vacant, part car park GEC Avery Properties Limited
Tame, Tamebridge, West
Bromwich, Staffordshire
-----------------------------------------------------------------------------------------------------------------------------
=============================================================================================================================
</TABLE>
<PAGE>
134
3. LEASEHOLD PROPERTIES WITH REGISTERED TITLE
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE REGISTERED
PROPRIETOR
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units 3 & 4, 24th April 1992 The Welsh Commencing 24th Peppercorn rent Depot GEC Avery Limited
North Road Development December 1989
Bridgend Agency (1) and expiring
Industrial Bridgend Plant 23rd December
Estate, Limited (2) 2088
Bridgend
==================================================================================================================
</TABLE>
<PAGE>
135
4. LEASEHOLD PROPERTIES WITH UNREGISTERED TITLE (INCLUDING UK LEASEHOLD
PROPERTY NOT SITUATED IN ENGLAND OR WALES)
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Kings Street 5th November, The Council of Commencing 1st (Pounds)1,500 per Depot GEC Avery Limited
St. Nicholas 1979 the City of August 1979 and annum
Industrial Carlise (1) expiring on 31st
Estate Avery Properties July 2078
Carlisle Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
1 Sentry Lane, 7th December 1998 CUSP Limited (1) Commencing 1st (Pounds)12,500 Depot GEC Avery Limited
Mallusk GEC Avery January 1998 and per annum
Newton Abbey Limited (2) expiring 31st
Belfast December 2007
-------------------------------------------------------------------------------------------------------------------------------
Chorley Street 10th July 1984 Cobden Street, Commencing 24th (Pounds)8,250 per Depot GEC Avery Limited
Industrial Properties April 1984 and annum
Estate Limited (1) expiring 23rd
Bolton GEC Avery April 2009
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
136
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Unit 8-9 5th November 1992 Central Regional Commencing 17th (Pounds)7,000 per Depot GEC Avery Limited
Bonnybridge Council (1) August 1992 and annum
Industrial GEC Avery expiring 16th
Estate, Limited (2) August 2002
Bonnybridge
-------------------------------------------------------------------------------------------------------------------------------
Unit 4 1st June 1982 Hambro Life Commencing 25th (Pounds)16,500 Depot GEC Avery Limited
Victoria Road Assurance plc (1) March 1982 and per annum
Industrial W&T Avery expiring 24th
Estate Limited (2) March 2007
Portslade
Sussex
-------------------------------------------------------------------------------------------------------------------------------
Unit 1 Ashley 29th September Pearce Commencing 18th (Pounds)10,800 Depot GEC (sixty-nine)
Hill Trading 1978 Developments August 1978 and per annum Limited/1/
Estate Limited (1) expiring 17th
Bristol Berkel Limited August 2003
(2)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------
/1/ Vested in GEC (sixty-nine) Limited - to be vested in GEC Avery Limited
<PAGE>
137
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Hillhead Quarry, 19th September Tarmac Road Commencing 19th (Pounds)3,750 per Depot GEC Avery Limited
Harpur Hill 1995 Stone Holdings September 1995 annum
Buxton Limited (1) and expiring on
GEC Avery 30th April 2000
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
Unit 1 12th March 1999 Summerfield Commencing 25th (Pounds)28,000 Depot GEC Avery Limited
Cornbrash Park Developments December 1998 per annum
Chippenham (SW) Limited (1) and expiring on
Wiltshire GEC Avery 25th December
Limited (2) 2013
-------------------------------------------------------------------------------------------------------------------------------
34-36 Napier 24th July 1980 Cumbernauld Commencing 1st (Pounds)13,000 Depot GEC (sixty-nine)
Court and 16th Development August 1980 and per annum Limited/2/
Cumbernauld September 1980 Corporation (1) expiring on 28th
Berkel Limited November 2000
(2)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------
/2/ Vested in GEC (sixty-nine) Limited - to be vested in GEC Avery Limited
<PAGE>
138
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Unit 9 Dartford 8th July 1985 Gough Cooper & Commencing 25th (Pounds)58,000 Depot GEC Avery Limited
Trade Park Company Limited March 1981 and per annum
Dartford (1) expiring on 24th
Berkel Limited March 2006
(2)
-------------------------------------------------------------------------------------------------------------------------------
Greeba Works 11th May 1998 Mandarin Limited Commencing 12th (Pounds)1,150 per Depot GEC Avery Limited
Market Street (1) May 1998 and annum
Douglas GEC Avery expiring 11th
Isle of Man Limited (2) May 2001
-------------------------------------------------------------------------------------------------------------------------------
37 West Bowling 25th March 1983 ICFC Commencing 2nd (Pounds)12,500 Depot GEC Avery Limited
Green Street Developments July 1982 and per annum
Edinburgh Limited (1) expiring on 1st
W&T Avery July 2007
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
Unit 3, 15th July 1998 Haven Commencing 15th (Pounds)20,350 Depot GEC Avery Limited
Orchard Court Investments July 1998 and per annum
Heron Road Limited (1) expiring on 24th
Sowton GEC Avery March 2008
Industrial Limited (2)
Estate
Exeter
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
139
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Unit BT1/288C 24th September One North East Commencing 25th (Pounds)7,800 per Depot GEC Avery Limited
Team Valley 1999 (1) September, 1999 annum
Industrial GEC Avery and expiring [(Pounds)596.13
Estate Limited (2) 24th September, per month]
Gateshead, 2002
Tyne and Wear
-------------------------------------------------------------------------------------------------------------------------------
Unit 1A 6th October 1998 Store Property Commencing 6th (Pounds)39,550 Depot GEC Avery Limited
Portland Investments October 1998 and per annum
Business Park, Limited (1) expiring on 5th
Hove GEC Avery October 2013
East Sussex Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
Unit 6 5th January 1998 Culloden 3 years. (Pounds)4,900 per Depot GEC Avery Limited
9 Lotland Street Builders Limited Commencement annum
Inverness (1) Date (in 1997)
GEC Avery unknown
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
18-20 Regent 4th February 2000 Normhurst Commencing 4th (Pounds)18,000 Offices GEC Avery Limited
Street, Leeds Limited (1) GEC February 2000 per annum
Avery Limited (2) and expiring 3rd
February 2002
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
140
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Unit 89C 22nd October 1976 The Department Commencing 30th (Pounds)3,750 per Depot GEC Avery Limited
New Buildings of Commerce for March 1976 and annum
Industrial Northern Ireland expiring 29th
Estate, (1) March 1997
Victoria Road, Avery Properties
Londonderry Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
Unit 1A 11th November Fussell Pension Commencing 29th (Pounds)4,000 per Depot GEC Avery Limited
Dodnor 1998 Scheme (1) September 1998 annum
Industrial GEC Avery and expiring
Estate Limited (2) 29th September
Dodnor Lane 2003
Newport
Isle of Wight
-------------------------------------------------------------------------------------------------------------------------------
26 Old 10th June 1996 Clavon Commencing 1st (Pounds)6,000 per Depot GEC Avery Limited
Mountfield Road Investments September 1993 annum
Omagh Limited (1) and expiring
GEC Avery 31st August 1998
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
141
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Unit 15D, [Draft only Morris Young Commencing 1st (Pounds)4,590 per Depot GEC Avery Limited
Control Tower provided] Leslie (1) January 1999 and annum
Perth Airport GEC Avery expiring 31st
Business Park, Limited (2) December 2001
Perth
-------------------------------------------------------------------------------------------------------------------------------
Unit 9, 14th July 1986 PossFund Commencing 25th (Pounds)25,500 Depot GEC Avery Limited
Kempton Trade & Custodian December 1985 per annum
Business Centre Trustee Limited and expiring
Minden Road (1) 24th December
Sutton W&T Avery 2000
Surrey Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
Unit 4, 8th August 1986 Horsford Commencing 24th (Pounds)10,500 Depot GEC Avery Limited
Old Town Station Securities June 1986 and per annum
Industrial Limited (1) expiring 23rd
Estate W&T Avery June 2011
Swindon Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
142
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
3 Royal London 15th December The Royal London Commencing on (Pounds)14,121 Depot GEC Avery Limited
Estate, 1983 Mutual Insurance 24th June 1986 per annum
West Road, Society Limited and expiring on
Tottenham (1) 23rd June 2011
London N17 W&T Avery
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
Unit 11 15th December IM Properties Commencing 1st (Pounds)17,000 Depot GEC Avery Limited
Monckton Road 1997 International December 1997 per annum
Industrial Finance Limited and expiring
Estate (1) 28th February
Wakefield GEC Avery 2007
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
Unit 12 30th October 1997 IM Properties Commencing 1st (Pounds)17,000 Depot GEC Avery Limited
Monckton Road International March 1997 and per annum
Industrial Finance Limited expiring 28th
Estate (1) February 2007
Wakefield GEC Avery
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
143
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Unit 13 & 14 30th October 1997 IM Properties Commencing 1st (Pounds)34,500 Depot GEC Avery Limited
Monckton Road International March 1997 and per annum
Industrial Finance Limited expiring 28th
Estate (1) February 2007
Wakefield GEC Avery
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
56 Warton 13th December Mr Albert Rogers From 1st January (Pounds)1,100 per Residential GEC Avery Limited
House, Symphony 1999 & Dr. P Ramani 2000 to 30th calendar month
Court, (1) GEC Avery June 2000
Brindley Place, Limited (2)
Birmingham
-------------------------------------------------------------------------------------------------------------------------------
Unit 84 Willow 25.8.93 English 125 years A peppercorn Depot GEC Avery Limited
Court, Teeside Industrial expiring 31st (fixed)
Industrial Estates August, 2118
Estate, Corporation (1)
Thornaby-on-Tess GEC Avery
Limited (2)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
144
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Unit 6, missives - Brocksby 10 years (Pounds)14,000 Depot GEC Avery Limited
Blackness 12/11/1999 (Guernsey) expiring 11th per annum
Industrial Limited (1) GEC November, 2009
Estate, Avery Limited
Aberdeen (2) and
Frederick James
Edwards (3)
===============================================================================================================================
</TABLE>
<PAGE>
145
5. OTHER UK PROPERTY INTERESTS (LICENCES)
<TABLE>
<CAPTION>
PROPERTY DATE OF LEASE ORIGINAL PARTIES TERM CURRENT RENTAL USE CURRENT TENANT
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Rooms 2, 4 & 6 1st September Wrightsure 12 months (Pounds)7,620 Offices GEC Avery Limited
Edward Cecil 1999 Services Limited per annum
House (1)
West Thurrock GEC Avery
Limited (2)
--------------------------------------------------------------------------------------------------------------------
Unit 6, No 1 24th November The General 6 months (Pounds)3768 per Depot GEC Avery Limited
Substation and 1999 Electric Company annum
Unit 20B plc (1) and
Annexe Clayton GEC Avery
Industrial Limited (2)
Park,
Blackburn
Road,
Accrington
--------------------------------------------------------------------------------------------------------------------
Wembley GEC 10th September The General 6 months (Pounds)1,320 Car parking GEC Avery Limited
Estate, East 1999 Electric Company per annum
Lane plc (1) and GEC
Avery Limited (2)
====================================================================================================================
</TABLE>
<PAGE>
146
PART III - OVERSEAS PROPERTIES
------------------------------
AVERY BERKEL GROUP
AUSTRIA
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
-------------------------------------------------------------------------------------------------
LEASEHOLD
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1C NO SUD OBJEKT 30 HQ OFFICES SCHEMBER MAY 1997 APR 2000 432,200
2355 WIENER NEUDORF, AUSTRIA AND BERKEL GES.M.B.H AS
WORKSHOP
-------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
147
CANADA
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
3, 1304-44 AVENUE NE, SERVICE BERKEL PRODUCTS COMPANY DEC 1998 NOV 2001 9,360 $C
CALGARY, BRANCH LIMITED
ALBERTA,
CANADA T2E 6T7
--------------------------------------------------------------------------------------------------------------------------------
UNIT 19, SERVICE BERKEL PRODUCTS COMPANY APR 1996 MONTHLY 3,780 $C
6 COLBY COURT, BRANCH LIMITED
WATERLOO,
ONTARIO,
CANADA
--------------------------------------------------------------------------------------------------------------------------------
5169 BRADCO BLVD, HQ BERKEL PRODUCTS COMPANY JAN 1991 DEC 2000 50,820 $C
MISSISSAUGA, LIMITED
ONTARIO,
CANADA L4W 2A6
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
148
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1229 VENABLES STREET, SERVICE BERKEL PRODUCTS COMPANY FEB 1999 JAN 2002 14,196 $C
VANCOUVER, BRANCH LIMITED
CANADA V5L 2H1
--------------------------------------------------------------------------------------------------------------------------------
12760 BLVD, SERVICE BERKEL PRODUCTS COMPANY JUL 1998 JUN 2001 9,948 $C
MONTREAL, BRANCH LIMITED
QUEBEC,
CANADA H1A 3V2
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
149
FRANCE
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
36 AVENUE DE L'EUROPE, HQ, OFFICES BERKEL SA DEC 1989 DEC 2001 900,000 FF
35330 DOMONT, WAREHOUSE AND
FRANCE WORKSHOP
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
150
GERMANY
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
ARNOLD DEHNEN STRASSE 49, HQ AND BERKEL DEUTSCHLAND GMBH OCT 1997 DEC 2000 50,625 DM
D-47138 DUISBURG, OFFICES
GERMANY
--------------------------------------------------------------------------------------------------------------------------------
KARL MORIAN STRASSE 26-28, W'HOUSE BERKEL DEUTSCHLAND GMBH SEP 1999 AUG 2001 44,928 DM
47138 DUISBURG,
GERMANY
--------------------------------------------------------------------------------------------------------------------------------
SOUTERRAIN, SUB LET BERKEL DEUTSCHLAND GMBH JUN 1996 MAY 2006 21,600 DM
KILIANSTRASSE 122,
90425 NURNBERG,
GERMANY
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
151
IRELAND
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FREEHOLD
--------------------------------------------------------------------------------------------------------------------------------
GLEESON STREET, SERVICE GEC AVERY PROPERTIES NA NA NA
ATHLONE BRANCH LIMITED
COUNTY WESTMEATH,
EIRE
--------------------------------------------------------------------------------------------------------------------------------
WESTERN IND ESTATE, HQ OFFICES BERKEL NA NA NA
NAAS ROAD, AND SERVICE (IRELAND) LIMITED
DUBLIN, BRANCH
EIRE
--------------------------------------------------------------------------------------------------------------------------------
WEST END SQUARE, SERVICE GEC AVERY PROPERTIES NA NA NA
WILLIAM STREET WEST, BRANCH LIMITED
GALWAY,
COUNTY GALWAY,
EIRE
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
152
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
1 BURRIN ARCADE, SERVICE BERKEL MAR 1996 FEB 2001 5,000 IR(Pounds)
BURRIN STREET, BRANCH (IRELAND) LIMITED
CARLOW,
COUNTY CARLOW,
EIRE
--------------------------------------------------------------------------------------------------------------------------------
UNIT 2A, SERVICE BERKEL NO LEASE IN NO LEASE IN 6,500 IR(Pounds)
FORGE HILL BUSINESS PARK, BRANCH (IRELAND) LIMITED PLACE PLACE
KINSALE ROAD,
CORK,
COUNTY CORK, EIRE
--------------------------------------------------------------------------------------------------------------------------------
AARD ESMUINN, SERVICE GEC AVERY LIMITED AUG 1990 MAY 1993 1,800 IR(Pounds)
THE DEMESNE, BRANCH
DUNDALK,
COUNTY LOUTH,
EIRE
--------------------------------------------------------------------------------------------------------------------------------
UNIT 10, SERVICE BERKEL OCT 1998 DEC 1999 1,687 IR(Pounds)
ENTERPRISE SUPPORT CENTRE, BRANCH (IRELAND) LIMITED
KILMALLOCK ROAD,
LIMERICK,
COUNTY LIMERICK,
EIRE
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
153
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD (continued)
--------------------------------------------------------------------------------------------------------------------------------
WINE STREET, SERVICE BERKEL OCT 1998 SEPT 2001 2,500 IR(Pounds)
SLIGO, BRANCH (IRELAND) LIMITED
COUNTY SLIGO,
EIRE
--------------------------------------------------------------------------------------------------------------------------------
UNIT 34, SERVICE BERKEL MAY 1998 APR 2003 2,800 IR(Pounds)
JOHNSTOWN IND CENTRE, BRANCH (IRELAND) LIMITED
WATERFORD,
COUNTY WATERFORD,
EIRE
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
154
ITALY
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
20143 MILANO, HQ AND BREVETTI VAN OCT 1997 SEP 2003 325M
VIA F OLGIATI 12, OFFICES BERKEL SPA L
MILAN,
ITALY
--------------------------------------------------------------------------------------------------------------------------------
PINEROLO, OFFICES BREVETTI VAN NOV 1996 OCT 2002 36M
STRADALE SAN SECONDO N94 BERKEL SPA L
ITALY
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
155
MALAWI
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
PO BOX 51295, HQ AND W&T AVERY MAY 1999 APR 2002 216,000 K
LIMBE, OFFICES MALAWI LTD
MALAWI,
--------------------------------------------------------------------------------------------------------------------------------
PO BOX 389, SERVICE W&T AVERY MONTHLY APR 1999 5,000K
LILINGWE, BRANCH MALAWI LTD BASIS
MALAWI.
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
156
MALAYSIA
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
8A JALAN 213, HQ AVERY MALAYSIA AUG 1998 JUL 2001 141,000 RM
46050 PETALING JAYA, SDN.BHD
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
75 BATU 10, JARAN RAYA, SERVICE AVERY MALAYSIA MAY 1999 APR 2002 14,400 RM
SCUDAI, BRANCH SDN.BHD
81300 JOHOR,
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
E837 JALAN BAYAM, SERVICE AVERY MALAYSIA JAN 1997 DEC 2000 10,200 RM
JALAN DATO WONG AH JANG, BRANCH SDN.BHD
25100 KUANTAN,
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
30 JALAN NAGASARI 17, SERVICE AVERY MALAYSIA MAY 1997 APR 2000 6,600 RM
SEGAMAT BARU, BRANCH SDN.BHD
85000 SEGAMAT,
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
157
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD (continued)
--------------------------------------------------------------------------------------------------------------------------------
147 IPOH GROVE, SERVICE AVERY MALAYSIA JAN 1998 DEC 2000 9,000 RM
KUALA KANGSAR ROAD, BRANCH SDN.BHD
30010 IPOH,
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
TINGKAT 1 BLOCK A, SERVICE AVERY MALAYSIA 6,000 RM
MDLD 0616 JALAN MATAHARI, BRANCH SDN.BHD
MING HUAT IND CENTRE,
91100 LAHAD DATU,
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
379d TAMAN PERINGIT JAYA, SERVICE AVERY MALAYSIA 8,400 RM
75400 MALACCA, BRANCH SDN.BHD
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
4797 JALAN SIRAM, SERVICE AVERY MALAYSIA JAN 1999 DEC 2000 7,200 RM
12100 BUTTERWORTH, BRANCH SDN.BHD
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
LOT 3634, 1ST FLOOR, BLOCK 31, SERVICE AVERY MALAYSIA NOV 1998 OCT 1999 6,000 RM
KEMENA LAND DISTRICT, BRANCH SDN.BHD
MEDAN JAYA,
JALAN SULTAN ISKANDAR,
97000 BINTULU, SARAWAK
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
158
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD (continued)
--------------------------------------------------------------------------------------------------------------------------------
NO 7 GROUND FLOOR LOT 8235, SERVICE AVERY MALAYSIA AUG 1999 AUG 2000 4,200 RM
JALAN PENDING, BRANCH SDN.BHD
93450 KUCHING,
SARAWAK,
MALAYSIA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
159
NAMIBIA
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
PO BOX 2660, HQ W&T AVERY JAN 1999 DEC 2001 55,200 $N
WINDHOEK, NAMIBIA (PTY) LTD
NAMIBIA.
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
160
PAKISTAN
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
165-G, BLOCK 3, PECHS, HQ GEC AVERY (PRIVATE) LTD AUG 1997 JUL 2003 752,400
KHAILD BIN WALEED ROAD,
KARACHI,
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
100/4 SAINT JOHN'S PARK, SERVICE GEC AVERY (PRIVATE) LTD APR 1996 FEB 2000 221,760 RS
LAHORE, BRANCH
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
26 WEST WHARF ROAD, W'HOUSE GEC AVERY (PRIVATE) LTD ONGOING ONGOING 48,000
KARACHI,
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
BUNGALOW NO 46-47, SERVICE GEC AVERY (PRIVATE) LTD JUN 1998 JUN 2000 48,3000
AUTOBHAN ROAD, BRANCH
UNIT NO 7 LATIFABAB,
HYDERABAD,
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
161
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
28-SHAHEED-E-NILLAT MARKET SERVICE GEC AVERY (PRIVATE) LTD SEP 1998 ONGOING 1999 23,232 RS
GULISTAN COLONY NO 2, BRANCH
FAISALABAD,
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
WARAS STREET, SERVICE GEC AVERY (PRIVATE) LTD MAY 1994 ONGOING 1999 47,916 RS
POLICE LINES ROAD, BRANCH
MULTAN,
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
HOUSE NO 160A, SERVICE GEC AVERY (PRIVATE) LTD JUL 1999 JUN 2002 50,400
SECTOR 1, BRANCH
KHYABAN-E-SIR SYED,
RAWALPINDI,
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
TUFAIL ROAD, SERVICE GEC AVERY (PRIVATE) LTD FEB 1998 JAN 2001 78,000
THE MALL, BRANCH
NOWSHEHRA CANTT,
PAKISTAN
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
162
SOUTH AFRICA
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FREEHOLD
--------------------------------------------------------------------------------------------------------------------------------
53 ZASTRON STREET, SERVICE SOUTH AFRICAN SCALE CO NA NA NA
BLOEMFONTEIN 9300, BRANCH (PROPRIETARY) LIMITED
SOUTH AFRICA/3/
--------------------------------------------------------------------------------------------------------------------------------
474 UMBILO ROAD, SERVICE SOUTH AFRICAN SCALE CO NA NA NA
DURBAN 4001, BRANCH (PROPRIETARY) LIMITED
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
87 CURRIE STREET, SERVICE EDWARD WINSTON CRANE NA NA NA
QUIGNEY, BRANCH
EAST LONDON 5201,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
3 STELLA DRIVE, SERVICE SOUTH AFRICAN SCALE CO NA NA NA
MONTAGUE GARDENS, BRANCH (PROPRIETARY) LIMITED
MILNERTON 7441,
CAPE TOWN,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------
/3/ Property to be sold
<PAGE>
163
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FREEHOLD (continued)
--------------------------------------------------------------------------------------------------------------------------------
20 EDGAR LANE, SERVICE SOUTH AFRICAN SCALE CO NA NA NA
NORTH END, BRANCH (PROPRIETARY) LIMITED
PORT ELIZABETH 6001,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
LEASEHOLD /4/
--------------------------------------------------------------------------------------------------------------------------------
4A SCHEEPERSTREET, SERVICE SOUTH AFRICAN SCALE CO DEC 1995 DEC 1998 16,705 R
BETHAL 2310, BRANCH (PROPRIETARY) LIMITED
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
8 GREY STREET, SERVICE SOUTH AFRICAN SCALE CO JAN 1998 JAN 1999 22,313 R
BETHLEHEM 9700, BRANCH (PROPRIETARY) LIMITED
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
LOT 99, KULEKA UNIT NO 3, SERVICE S.A SCALE (PTY) LIMITED SEP 1998 AUG 2003 46,940 R
CHROME CRESCENT, BRANCH
EMPANGENI,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------
/4/ All rents contain an allowance for VAT at the rate of 14%
<PAGE>
164
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD (continued)
--------------------------------------------------------------------------------------------------------------------------------
PAARL STREET, SERVICE S.A. SCALE (PTY) LIMITED SEP 1997 SEP 2000 27,312 R
GEORGE 6530, BRANCH
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
55 GEORGE STREET, SERVICE S.A. SCALE CO (PTY) JUL 1998 JUL 2001 49,872 R
SALGOS CENTRE SHOP 4, BRANCH LIMITED
KIMBERLEY 8301,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
COMMISSIONER STREET, SERVICE S.A. SCALE COMPANY (PTY) JAN 1998 DEC JAN 2000 33,582 R
KLERKDORP 2570, BRANCH LIMITED
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
LOT 877, SERVICE S.A. SCALE CO NOV 1998 OCT 2001 37,214 R
79 MURCHISON STREET, BRANCH (PROPRIETARY) LIMITED
LADYSMITH 3370,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
STAND 1299, SERVICE SA SCALE CO (PROPRIETARY) JUL 1998 JUNE 2001 36,731 R
LOUIS TRICHARDT STREET NO 8, BRANCH LIMITED
NELSPRUIT,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
SHOP 5 & 6, SERVICE SA SCALE CO (PROPRIETARY) FEB 1999 JAN 2002 30,096 R
F&B CENTRE, BRANCH LIMITED
2 DEVENISH STREET,
PIETERSBURG 0700,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
165
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD (continued)
--------------------------------------------------------------------------------------------------------------------------------
563 CARL STREET, SERVICE SA SCALE CO (PROPRIETARY) MAY 1997 APR 2000 28,400 R
PRETORIA WEST 0001, BRANCH LIMITED
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
UNIT 23, LOT 573, SERVICE SA SCALE CO (PROPRIETARY) JUN 1998 JUL 2003 26,400 R
FIRST AVENUE, BRANCH LIMITED
MATSAPHA INDUSTRIAL PARK,
SWAZILAND,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
182 JAN HOFMEYER ROAD, SERVICE SA SCALE (PTY) LIMITED JAN 1999 DEC 2002 25,272 R
WELKOM 9460, BRANCH
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
SHOP NO 6, ST IRENE CENTRE, SERVICE SOUTH AFRICAN SCALE CO AUG 1998 JUL 2001 30,096 R
VAN RENSBURG STREET EXT 16, BRANCH (PTY) LIMITED
WITBANK 1035,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
1 KONTREI TRUST, SERVICE SOUTH AFRICA SCALE CO. AUG. 1997 JAN 2000 26,953 R/5/
RUBEL STREET, BRANCH (PTY) LIMITED
MARIAIS INDUSTRIES,
VRENDERBURG,
SOUTH AFRICA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/5/ Copy of Lease to be provided.
<PAGE>
166
SPAIN
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
CALLE IGNACIO IGLESIAS 19, HQ AND AVERY BERKEL SA JUL 1999 DEC 2003 6,992 PTAS
LOCAL 1-4, OFFICES
08940,
CORNELLA DE LLOBREGAT,
SPAIN
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
167
SWEDEN
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
FAGELVIKSVAGEN 18-20, HQ OFFICE BERKEL AB SEP 1998 SEP 2003 614,088 SEK
TRAPP HUS 12,
NORSBORG 14553,
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
MUSKETORGATAN 3A, SERVICE BERKEL AB SEP 1992 SEP 2001 91,328 SEK
212 43 MALMO, BRANCH
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
STUREGATAN 16, SERVICE BERKEL AB JUL 1988 SEP 2001 11,784 SEK
78431 BORLANGE, BRANCH
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
MUSKETORGATAN 3A, SERVICE BERKEL AB FEB 1997 APR 2000 16,596 SEK
BOX 109, BRANCH
590 20 MANTORP,
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
168
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD (continued)
--------------------------------------------------------------------------------------------------------------------------------
AHLMARKSG 1, SERVICE BERKEL AB FEB 1997 SEP 2000 36,544 SEK
652 24 KARLSTAD, BRANCH
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
BOLLUAGEN 13, SERVICE BERKEL AB OCT 1978 SEP 2000 11,964 SEK
81132 SANDVIKEN, BRANCH
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
BACKA BERGOGATA 10, SERVICE BERKEL AB OCT 1993 SEP 2002 128,156 SEK
422 46 HISINGSBACKA, BRANCH
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
NYGARDSGATAN 11A, SERVICE BERKEL AB JUL 1999 ONGOING 3 14,400 SEK
72219 VASTERAS, BRANCH MONTHS NOTICE
SWEDEN
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
169
USA
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FREEHOLD
--------------------------------------------------------------------------------------------------------------------------------
ONE BERKEL DRIVE, HQ OFFICES BERKEL INCORPORATED NA NA NA
LAPORT, AND MANUF'G
INDIANA 46350,
USA
--------------------------------------------------------------------------------------------------------------------------------
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
3095 PRESIDENTIAL DRIVE, SUB LET BERKEL INCORPORATED MAR 1996 APR 2001 18,000 $US
SUITE D,
ATLANTA,
GEORGIA 30340,
USA
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
170
ZIMBABWE
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FREEHOLD
--------------------------------------------------------------------------------------------------------------------------------
7 PETERBOROUGH ROAD, SERVICE AVERY ZIMBABWE (PRIVATE) NA NA NA
BELMONT, BRANCH LTD
BULAWAYO,
ZIMBABWE
--------------------------------------------------------------------------------------------------------------------------------
5 COVENTRY ROAD, SERVICE AVERY ZIMBABWE (PRIVATE) NA NA NA
GWERU, BRANCH LTD
ZIMBABWE
--------------------------------------------------------------------------------------------------------------------------------
6 PINE STREET, RESIDENCE AVERY ZIMBABWE (PRIVATE) NA NA NA
WINDSOR PARK, LTD
GWERU,
ZIMBABWE
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
171
<TABLE>
<CAPTION>
ADDRESS USE OWNER LEASE LEASE RENT
START EXP P.A.
DATE DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LEASEHOLD
--------------------------------------------------------------------------------------------------------------------------------
4 CONALD ROAD, HQ AVERY ZIMBABWE (PRIVATE) APR 1999 MAR 2000 1,647 K
GRANITESIDE, LTD
HARARE,
ZIMBABWE
--------------------------------------------------------------------------------------------------------------------------------
18 GLASGOW ROAD SERVICE AVERY ZIMBABWE (PRIVATE) DEC 1998 DEC 2001 135 K
INDUSTRIAL AREA, BRANCH LTD
MUTARE,
ZIMBABWE
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
172
SCHEDULE 9
CONDUCT OF BUSINESS BEFORE COMPLETION
1. Dispose of, or grant any option or right of pre-emption in respect of, any
assets of any member of the Avery Berkel Group except in the ordinary
course of its business and on arm's length terms and with an individual
value lower than (Pounds)50,000 save as disclosed by the Disclosure Letter.
2. Enter into any individual contract or commitment which is either outside
the ordinary course of its business or which is reasonably likely when
entered into to have a material adverse effect on the business of the
member of the Avery Berkel Group concerned.
3. Declare, make or pay any dividend or other distribution or return of
capital save to the extent already declared prior to the time hereof and
disclosed by the Disclosure Letter or to members of the Avery Berkel Group.
4. Acquire any capital asset or make any capital expenditure in excess of
(Pounds)150,000 per asset except to the extent already authorised or
committed prior to the date hereof and disclosed by the Disclosure Letter.
5. Create, extend, grant or issue any mortgage, charge, debenture, pledge,
lien, encumbrance or other security (other than liens arising in the
ordinary course of business) over the whole or any part of the assets or
undertaking of any member of the Avery Berkel Group.
6. Create, extend or grant any guarantee, indemnity, performance bond or other
security or contingent obligation in the nature of a financial obligation
including, without limitation, letters of comfort or support, affecting the
whole or any part of the assets or undertaking of any member of the Avery
Berkel Group save in each case in the ordinary course of business.
7. Create, allot or issue any shares, securities, securities convertible into
shares or any option or right to subscribe in respect of any shares,
securities or securities convertible into shares other than an allotment or
issue to a member of the Avery Berkel Group or as disclosed by the
Disclosure Letter.
8. Create, redeem or issue any loan capital or grant any option, or right to
subscribe, in respect of any loan capital other than in favour of or to a
member of the Avery Berkel Group.
<PAGE>
173
9. Make any capital commitment involving capital expenditure exceeding
(Pounds)150,000 per item (including, without limitation, the acquisition of
any assets, business, securities or company) save to the extent already
authorised prior to the date hereof and disclosed by the Disclosure Letter.
10. Form, acquire, or amend the terms of, any partnership or joint venture
arrangement which, in either case, is material except to the extent already
authorised or committed prior to the date hereof and disclosed by the
Disclosure Letter or pursuant to a contractual or other legal obligation
existing prior to the date hereof and which has been so disclosed.
11. Allow any of its insurances to lapse or knowingly do or omit to do anything
which would make any policy of insurance void or voidable, save in the
ordinary course of business or as disclosed by the Disclosure Letter.
12. Alter the provisions of its memorandum or articles of association or other
constitutional documents or adopt or pass regulations or resolutions
inconsistent therewith save as disclosed by the Disclosure Letter.
13. Reduce its share capital.
14. Engage any person as an employee of any member of the Avery Berkel Group on
a basic contractual salary of (Pounds)50,000 or more per annum (in
paragraphs 14 and 24, a "KEY EMPLOYEE") or dismiss, other than for cause,
any Key Employee (except where the engagement or dismissal process has
already commenced at the date of this Agreement) or make or announce any
material variation to the terms and conditions of employment (including,
without limitation, remuneration or other emoluments) of any Key Employee
other than increases in the ordinary course.
15. Enter into, amend, terminate or dispose (or give notice to terminate or
dispose) of any tenancy, licence or lease agreement relating to any of the
Avery Berkel Properties or the Certificated Properties or acquire or
dispose of any interest in any Avery Berkel Properties or the Certificated
Properties (except where the process relating to any such matter has
already begun at the date hereof) save as disclosed by the Disclosure
Letter.
16. Agree any review of rent or material fee payable under any tenancy, licence
or lease agreement relating to the Avery Berkel Properties or the
Certificated Properties.
<PAGE>
174
17. Waive or forgive or cancel any indebtedness owing to any member of the
Avery Berkel Group by any person or other members of the Avery Berkel Group
save in accordance with the terms upon which such indebtedness is
established.
18. Transfer, or dispose of any interest in, any shares, securities, securities
convertible into shares or any option or right to subscribe in respect of
any shares, securities, or securities convertible into shares other than to
another member of the Avery Berkel Group or as disclosed by the Disclosure
Letter.
19. Effect any material change in the nature of the business of any member of
the Avery Berkel Group including any cessation or discontinuance of the
operations of all or any material part of the business of any member of the
Avery Berkel Group save as disclosed by the Disclosure Letter.
20. Effect any change in residence for Taxation purposes of any member of the
Avery Berkel Group.
21. Incur any liability or obligation in the nature of a borrowing other than
by bank overdraft or similar short-term borrowing in the ordinary course,
save with respect to finance and operating leases.
22. Enter into any material contract outside the ordinary course of business.
23. Initiate any material change to the terms on which an Avery Berkel Group
deals with those of its customers or suppliers identified pursuant to
Warranty 8.8 other than in the ordinary course of business.
24. Initiate any material alteration to the pension benefits of any Key
Employees other than increases in such benefits which result from increases
made to the remuneration of any Key Employee in the ordinary course.
25. Enter into any material agreement, arrangement or obligation (whether
legally enforceable or not) in which a member of the GEC Group or a
director of an Avery Berkel Group Company is interested which is outside of
the ordinary course of business, save as disclosed by the Disclosure Letter
and ignoring employment matters.
26. Agree, conditionally or otherwise, to do any of the foregoing.
<PAGE>
175
SCHEDULE 10
CONDITIONS
(A) All filings having been made and all waiting periods having expired or
having been terminated in relation to the transaction contemplated by this
Agreement pursuant to the HSR Act.
(B) One of the following having taken place:
(i) receipt of a notice or a decision from the German Federal Cartel
Office ("FCO") that the prohibition requirements of s36(1) of the
German Act against Restrictions of Competition ("ARC") are not
fulfilled by the sale of all or any of the Avery Berkel Shares to the
Purchaser; or
(ii) expiry of the one month time limit laid down in s40(1) ARC without
the parties having been notified by the FCO that the FCO have entered
into an examination of the sale of all or any of the Avery Berkel
Shares to the Purchaser; or
(iii) expiry of the four months time limit (or any extension thereof) as
laid down in s40(2) ARC without the FCO having issued a prohibition
order in relation to the sale of all or any of the Avery Berkel
Shares to the Purchaser.
(C) The unconditional approval in terms of the provisions of the Competition
Act No. 89 of 1998 in South Africa having been obtained in relation to the
sale and purchase of the Avery Berkel Shares.
(D) The following having occurred, either:
(i) the Irish Minister for Enterprise, Trade & Employment (hereinafter
referred to in this paragraph (D) as the "MINISTER" having stated in
writing that she has decided not to make an Order under Section 9 of
the Irish Mergers, Take-overs and Monopolies (Control) Act 1978 (as
amended) (hereinafter referred to in this paragraph (D) as the "ACT")
in relation to the proposed acquisition of the Avery Berkel Shares by
the Purchaser; or
(ii) the Minister having made an Order under Section 9 of the Act in
relation to the proposed acquisition of the Avery Berkel Shares by
the Purchaser hereunder on terms acceptable to the Purchaser; or
(iii) the relevant period within the meaning of Section 6 of the Act having
elapsed without the Minister having made an
<PAGE>
176
Order under Section 9 of the Act in relation to the proposed
acquisition of the Avery Berkel Shares by the Purchaser hereunder; or
(iv) the Minister having decided that the Act does not apply.
(E) The adjusted earnings before interest, tax, depreciation and amortisation
("ADJUSTED EBITDA") of the Avery Berkel Group (including for this purpose
Avery India Limited at 100 per cent. but before profit for the Identified
Companies) for the 11 month period to 26th February, 2000 being not less
than (Pounds)11,931,000 as extracted from the February Accounts. Adjusted
EBITDA will be calculated from the February Accounts by excluding from
EBITDA as reported in the February Accounts the earnings impact of all of
the following expenses and charges to the extent to which they have been
charged against EBITDA for:
(i) Year 2000 and BaaN implementation costs. For the avoidance of doubt
such costs for the nine months to 31st December, 1999 were
(Pounds)1,181,000;
(ii) redundancies and reorganisation costs as defined by UK GAAP;
(iii) Dutch technical spend costs to the extent that they relate to the BPR
Slicer factory in Holland. For the avoidance of doubt such costs for
the nine months to 31st December, 1999 were (Pounds)376,000;
(iv) the costs of preparing the February Accounts and this Agreement; and
(v) the trading profits and losses, costs and profit on disposal relating
to the sale of the Avery Berkel Group's interests in former
subsidiaries and associated companies including those in Belgium,
Netherlands, Luxembourg, New Zealand, Bangladesh and Ghana and those
relating to the forecourt business.
(F) The net sales of the Avery Berkel Group (including for this purpose Avery
India Limited at 100 per cent.) being not less than (Pounds)133,860,000 as
stated in the February Accounts.
(G) There not having occurred after the date hereof, and being subsisting, any
event, development or circumstance constituting a material adverse change
in either the business, assets or financial condition of the Avery Berkel
Group taken as a whole or the capacity of those debt markets which the
Lender intends
<PAGE>
177
on the date hereof to use to fund the relevant part of the Facilities,
taking into consideration all positive changes to such matters and ignoring
any adverse change relating to, and any adverse effects of any such change
upon, the prospects or future financial and trading position of the Avery
Berkel Group and also ignoring any adverse change in national or
international financial, economic, foreign exchange or political
circumstances and the effects thereof.
(H) The March 1998 Accounts and the March 1999 Accounts having been finalised
by GEC's Accountants and submitted to GEC and the Purchaser.
(I) No member of the Avery Berkel Company Group being the registered or
beneficial owner of any of the issued share capital of any of the Benelux
Companies.
(J) GEC having materially complied with its obligations pursuant to sub-clause
8.28 in respect of the Pension Questionnaire.
<PAGE>
178
SCHEDULE 11
ACCOUNTING AND OTHER INFORMATION PER SUB-CLAUSE 8.22(B)
<PAGE>
179
SCHEDULE 12
DORMANT COMPANIES
1. W&T Avery (Kenya) Limited
2. Avery Zambia Limited
3. Berkel (Africa) (Pty) Limited
4. Avery Administration Pty Limited
5. Berkel Australia Pty Limited
6. Berkel Pty Limited
7. Brice Equipment (Wholesale) Pty Limited
8. GEC Avery Wholesale Pty Limited
9. Avery-Denison Limited
10. Avery-Hardoll Fluid Management Limited
11. Avery-Hardoll Forecourt Equipment Limited
12. Avery-Hardoll Limited
13. Berkel Limited
14. Charles W Brecknell Limited
15. GEC Avery Service Limited
16. GEC Avery Technology Limited
17. GEC Avery UK Limited
18. GEC Card Technology Limited
19. GEC Teledata Limited
20. GEC Telematic Limited
21. GEC Video Systems Limited
22. Henry Pooley & Son Limited
23. Nuemo Fillers Limited
<PAGE>
180
24. Oertling Limited
25. Pump Maintenance Limited
26. Pump Maintenance Overseas Limited
27. Telomex Limited
28. W& T Avery Limited
29. Weighmaster Scales Limited
30. Reliance Systems Limited
31. S. Parsons & Company Limited
32. W&T Avery (Scales) Limited
<PAGE>
181
1. Avery Berkel Central European Warehouse BV
2. Berkel International BV
3. Berkel Sud Americana SAC E.I.
4. Cantoni S.r.l.
5. BV Handel-en Industrie Maatschappij Handustrie
6. Zuidamerikaanse Maatschappij tot Exploitatie v/h Patent v Berkel BV
<PAGE>
182
SCHEDULE 13
UNFUNDED LIABILITY
PART I - RECOGNISED UNFUNDED LIABILITY
--------------------------------------
The Recognised Unfunded Liability are the liabilities in respect of benefit
arrangements for which provisions have been included in the estimate of
(Pounds)5,373,000 set out in clause 8.2 9(A), which are as follows.
<TABLE>
<CAPTION>
BENEFIT ARRANGEMENTS METHODOLOGY
-------------------- -----------
<C> <S> <C>
1. US Deferred Compensation Discounted present values of the
Arrangement obligations as they relate to past service
to Completion with a valuation interest
rate equal to 8% per annum
2. Unfunded German book reserves Assumptions and methods used for the
purposes of the last consolidated
financial statement prepared before the
date of this agreement
3. Termination Indemnity in Normal GEC accounting practice as applied
Italy in the last consolidated financial
statement (TFR)
4. Termination Indemnity in Normal GEC accounting practice as applied
Malaysia in the last consolidated financial
statement
5. Termination Indemnity in Normal GEC accounting practice as applied
France in the last consolidated financial
statement
6. Miscellaneous Holding Normal GEC accounting practice as applied
Company Reserve (estimated in the last consolidated financial
for identification only at statement
(Pounds)78,000)
7. Pakistan Normal GEC accounting practice as applied
in the last consolidated financial
statement.
8. US Post employment life Normal GEC accounting practice as applied
assurance benefits in the last consolidated financial
statement
</TABLE>
<PAGE>
183
If the US post employment life assurance benefits are not included in the
calculation of the (Pounds)5,373,000 set out in clause 8.2 9(A) then such
benefit arrangement will not be included in Part I of this Schedule but will be
included under part II of this Schedule.
<TABLE>
<CAPTION>
PART II - DISCLOSED
-------------------
UNRECOGNISED LIABILITIES
------------------------
BENEFIT ARRANGEMENTS METHODOLOGY
-------------------- -----------
<S> <C> <C>
1. South African Post Principles consistent with the approach
Retirement Medical used for the benefits under Part I.8
2. India Normal GEC accounting practice as applied
by GEC in India or a nearby Territory
3. Any other Employee Benefit The General Mechanism set out in Part III
Arrangements disclosed prior below.
to the date referred to in
Clause 12.1(B)
</TABLE>
<TABLE>
<CAPTION>
PART III - GENERAL MECHANISM AND
---------------------
UNDERPIN
--------
METHODOLOGY
-----------
<S> <C> <C>
1. General Mechanism The General Mechanism for the valuation
of liabilities is as follows:-
(i) the actuarial method to be applied is
the Projected Unit Credit method;
(ii) the liability should be valued using
a real discount rate assumption of 4.5%
per annum (above price inflation) and a
real salary increase assumption of 2% per
annum (above price inflation) (including
any allowance for a promotional salary
scale), and a real medical health claims
inflation rate of 2% per annum (above
price inflation). The remaining
assumptions (economic
</TABLE>
<PAGE>
184
<TABLE>
<S> <C> <C>
and demographic) should be based on the most
recent actuarial assumptions used per the
valuation of such funded or unfunded
liabilities of the relevant Avery Berkel
Group Company in the jurisdiction concerned,
if available, and otherwise, to the extent
they cannot be agreed between the
Purchaser's Actuary and the GEC Actuary on a
basis consistent with local actuarial
practice in that jurisdiction (neither
actuaries' agreement to be unreasonably
withheld) on the assumptions set out in the
Actuary's Letter as defined in Schedule 5
Part A, adjusted to take account of
differences in benefit provisions.
Assets will be valued at their market
value or where there is no recognised
market value at the immediately realisable
cash value.
2. Underpin The excess of the total liabilities
calculated under the methodology and
assumptions set out in Part III.1, after
deduction of the value of any assets which
are available to satisfy such liabilities
and are not already recognised as an asset
in the Closing Net Assets in respect of
the benefits covered under Part I.3, I.4,
I.5, I.6, I.7, I.8 II.1, II.2 and II.3
over the total amount calculated for those
benefits under Part I and Part II (again
excluding Parts I.1 and I.2) shall be
calculated (the Excess).
The Excess (whether positive or negative)
shall be apportioned between the benefit
arrangements under Part I.3-8 and Part II
1-3 on a pro-rata basis in proportion to
the liabilities for those benefit
arrangements calculated under Part III.1.
</TABLE>
<PAGE>
185
<TABLE>
<S> <C> <C>
PART IV - ADJUSTMENTS TO THE The adjustment to the Recognised Unfunded
RECOGNISED UNFUNDED LIABILITY Liability shall be the Excess apportioned
----------------------------- to these benefit arrangements
PART V- ADJUSTMENTS TO The adjustment to the "Disclosed
DISCLOSED UNRECOGNISED Unrecognised Liabilities" shall be the
LIABILITIES Excess apportioned to the benefit
----------- arrangements under Part II.1, II.2 and
II.3.
PART VI - GENERAL Clause 12.5(A) and (B) shall apply mutatis
----------------- mutandis in the event of any dispute
relating to a matter set out in this
Schedule 13. Paragraph 3.12 of Schedule 4
shall also apply mutatis mutandis.
</TABLE>
<PAGE>
186
SCHEDULE 14
PRINCIPAL WARRANT TERMS
The Warrant will reflect the following principal terms:
(i) it will be in respect of 5 per cent. of the fully diluted equity capital
at Completion of Weigh-Tronix LLC ("WT") (or equivalent parent company at
Completion);
(ii) it will contain provisions to return value to the holder in the event of
any disposal by WT of any shares or assets in which WT is interested
except for trading in the ordinary course (consistent with the benefit
derived therefrom by equity holders of WT);
(iii) the exercise price will be the same as the subscription price paid by
Berkshire, members of the WT Group and/or other investors in subscribing
for shares in WT for the purposes of the acquisition of the Avery Berkel
Group;
(iv) the Warrant will not be exercisable after the tenth anniversary of
Completion and, prior to that date, will be exercisable only in the event
of a liquidity event (to include a listing by whatever method, asset
sale, share sale of subsidiary undertakings, change of control);
(v) it will contain appropriate and market standard value shifting
protection;
(vi) it will be transferable within the GEC Group without WT's consent;
(vii) WT will provide adequate notice to the holder to permit the exercise of
subscription rights;
(viii) the equity issued pursuant to the exercise of subscription rights will
rank at least pari passu with existing ordinary equity capital;
(ix) on a winding-up, the holder will be entitled to receive such amount as it
would have received had it exercised subscription rights immediately
prior to winding-up (if there is a surplus, and after deduction of the
exercise price);
(x) the Warrant will be exercisable in whole or in part (as described in (iv)
above) at the election of the holder;
<PAGE>
187
(xi) the Warrant will contain appropriate terms to ensure that the holder is
not prejudiced upon a consolidation, sub-division or other reorganisation
of WT's equity capital;
(xii) reports, accounts and other information provided to the holders of
ordinary equity capital will be provided to the holder simultaneously as
it is provided to the holders of WT's ordinary equity capital.
<PAGE>
188
Signed by /s/ Marconi Corporation plc
Marconi Corporation plc )
Name: )
Director )
Signed by /s/ Weigh-Tronix UK Limited
Weigh-Tronix UK Limited )
Name: )
Director )
DATED
