Exhibit 4.3
DATED 30 July 2002
THALES SA (1)
- and -
THE PURCHASERS (2)
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SALE AND PURCHASE AGREEMENT
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EXECUTION COPY
INDEX
CLAUSE
1 Definitions and Interpretation
2 Conditions
3 Business Properties
4 Sale and Purchase of Cliffstone Shares
5 Sale and Purchase of the Business
6 Liabilities to be Assumed
7 Purchase Price
8 VAT
9 Completion
10 Conduct of the Business prior to Completion
11 Indemnities
12 Release of guarantees
13 Completion Balance Sheet
14 Employment
15 Debts and Accounts Receivable
16 Inventory
17 Warranty work and Additional Services
18 Instem Manufacturing Agreement
19 Action after Completion
20 Insurance
21 Third Party Consents
22 Warranties and Limitations on Liability
23 Restrictions on Thales Activities
24 Use of Corporate Names
25 Pensions
26 Confidentiality of Information
27 Corporate Governance, Registration Rights Agreement and Standstill
Agreement
28 Notices
29 Announcements
30 Entire Agreement
31 Costs
32 Amendments and Waivers
33 Severability
34 Assignment
35 Continuing Effect
36 Counterparts
37 Governing Law
38 Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
39 Agent for Service
40 Gross Payments
41 Guarantee
SCHEDULES
1 The Companies
2 Apportionment
3 Properties
4 Warranties
5 Cliffstone Warranties
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6 Pensions
7 Intellectual Property Rights
8 Guarantees
9 Accounting Principles
10 Overseas Completion Requirements
11 Corporate Governance, Registration Rights Agreement and Standstill
Agreement
12 Transitional Services Agreement
13 Prism Earn-Out Consideration Table
14 IPR Agreements
15 US Business Transfer Agreement
16 French Business Transfer Agreement
17 German Business Transfer Agreement
18 Employees
19 Relevant Employees
20 Key Employees
21 2002 Sales Determination
22 Surplus Employees
ATTESTATIONS
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SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made the 30th day of July, 2002
PARTIES:
(1) THALES SA, a French societe anonyme having its registered office at ▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (75008) ("Thales");
(2) NICE CTI SYSTEMS UK LIMITED (a company incorporated in England and Wales
with registered number03403044) whose registered office is at ▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("UK Purchaser");
(3) NICE SYSTEMS SARL, a French societe a responsabilite limitee in the course
of being set up, whose registered office will be located at ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ represented for the purpose of this Agreement
by its sole shareholder Nice CTI Systems UK Ltd., itself represented by
▇▇▇▇ ▇▇▇▇▇ duly empowered for the purpose hereof ("French Purchaser");
(4) NICE SYSTEMS GMBH (a German company) whose registered office is at
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ("German Purchaser");
(5) NICE SYSTEMS INC. (a company incorporated under the laws of the State of
Delaware , USA), whose principal place of business is at ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "US Purchaser");
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(6) NICE SYSTEMS LTD. an Israeli company having its registered office at ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ("Nice")
(Nice, the UK Purchaser, the French Purchaser, the German Purchaser and
the US Purchaser being referred to in this Agreement together as the
"Purchasers").
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BACKGROUND:
A Thales, through its wholly owned subsidiaries identified in this Agreement
as the Companies, carries on the Business (as defined in this Agreement)
and is the beneficial owner or is otherwise able to procure the sale of
the Business as a going concern and the sale of the Assets (as defined in
this Agreement).
B Thales has agreed to sell (or procure the sale of), and Nice has agreed to
purchase the Business as a going concern (as defined in this Agreement)
and the Assets (as defined in this Agreement), either directly or through
one or more of its subsidiaries, upon the terms of this Agreement.
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TERMS AGREED:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement and the Schedules to it unless the context otherwise
requires the following words and expressions shall have the following
meanings:
"Accounting Date" means 31 December 2001;
"Accounting Principles" means the Thales principles and accounting
policies more particularly set out in Schedule 9 and practices in
accordance with which the Accounts were prepared, consistently applied;
"Accounts" means the audited accounts of each of the Companies, comprising
the balance sheet and the profit and loss account as at the Accounting
Date together with the notes, reports and statements included in or
annexed to them;
"Accounts Combination Statement" means the combination of the Accounts in
the agreed terms;
"Accounts Receivable" means all book debts, notes receivable and other
rights to payment at the Completion Date arising from the operation of the
Business before the Completion Date (including the right to receive
payment for goods despatched or delivered and services rendered before the
Completion Date but not invoiced before such date) but excluding any such
debts or rights forming part of the Excluded Assets and "Accounts
Receivable" shall be construed accordingly;
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"Additional Services" means the additional services defined in Clause
17.2;
"Affiliates" means in respect to any person, any other person directly or
indirectly controlling, controlled by, or under common control with, such
person;
"Assets" means all of the assets and rights used in or relating to the
Business as listed in Clause 5.1 below but excluding the Excluded Assets;
"Assigned IPR" means those Intellectual Property Rights to be assigned
under the Thales IPR Assignment;
"Assumed Cliffstone Obligations" means the liabilities or obligations to
Cliffstone as defined at sub-paragraph (d) of the definition of "Assumed
Liabilities";
"Assumed Liabilities" means:
(a) trade creditors of the Business at the Completion Date to the extent
reflected in the Completion Balance Sheet;
(b) subject to Clause 17.1, performance obligations which remain to be
performed under the Contracts excluding any licences of third party
Intellectual Property Rights where the formal consent of the
licensor is required and has not been obtained to enable
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the relevant Purchaser to take an assignment of such obligations
unless and until such consent has been obtained;
(c) all of the debts, obligations and other liabilities and all claims
of and against the Companies arising before or after Completion
which specifically relate to the Business but, in each case, only to
the extent reflected in the Completion Balance Sheet; and
(d) the liabilities or obligations to Cliffstone which will be assumed
by or attach to the UK Purchaser and the US Purchaser under the
terms of the Cliffstone Documents following their acquisition of the
Cliffstone Shares and the Cliffstone Note (respectively) pursuant to
this Agreement and any other obligations assumed by Nice under
United States company law pursuant to their holding of shares in a
US private limited company, where, in each case such liability
relates to the period after Completion and is not caused by any act,
error, or omission by Thales during Thales' period of ownership of
the Cliffstone Shares (the "Assumed Cliffstone Obligations");
"Auditors" means, PwC, London;
"Business" means the business of the design, development, production,
marketing and supply of various secure voice recording, surveillance and
replay systems and products and application software for business
performance management solutions in contact centres, public safety and
wholesale trading platforms and the provision of ancillary services
currently carried on by the Companies;
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"Business Day " means a day (other than a Saturday or Sunday) on which
banks are open for normal banking business in Paris, London, New York and
Tel Aviv;
"Business Information" means all information used exclusively in the
Business including but not limited to all know-how, trade secrets,
confidential information and other information (whether or not
confidential and in whatever form held) owned and in the possession or
under the control of the Companies including, without limitation, all
formulas, designs, specifications, drawings, data, manuals and
instructions and all customer lists, sales information and records,
business plans and forecasts, accounting and tax records, orders,
correspondence and enquiries and all technical or other expertise;
"Business IPR" means the Intellectual Property Rights owned by the
Companies and any Intellectual Property Rights owned by any other member
of the Thales Group which is used exclusively in connection with the
Business and/or including, but not limited to, the Assigned IPR which
includes but is not limited to the Intellectual Property Rights set out at
Schedule 7 but excluding the Excluded Trade Marks;
"Business Properties" means the properties detailed in Part 1 of Schedule
3;
"Business Transfer Agreements" has the meaning set out in Clause 5.5;
"Carved-Out Accounts" means the combined audited accounts of each of the
Companies in respect of the Business, prepared according to US GAAP and
carve-out principles for the periods ended 31 December 2000 and the
Accounting Date or prepared according to carve-out principles but not US
GAAP for the periods ended 31 December 1999, 31 December 2000 and the
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Accounting Date, required to comply with SEC requirements for a 20F or F3
filing;
"Cliffstone" means Cliffstone Corporation, a company incorporated under
the laws of the state of Georgia whose principal place of business is ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
"Cliffstone Documents" means each of:
(a) the Cliffstone Note;
(b) the Call Center Technology, Inc Investor Rights Agreement dated
August 21, 2000 between Call Center Technology, Inc, The Racal
Corporation, the Common Shareholders, the Series A Shareholders and
the New Shareholders (and Amendment 2 thereto dated 10 September
2001;
(c) the Stock Purchase Agreement between CCTI., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇ Technology Partners L.P. and the Racal
Corporation dated 21 August 2000;
(d) the Credit Agreement between Cliffstone Corporation and Thales TRC,
Inc. dated 10 September 2001; and
(e) the Security Agreement between Cliffstone Corporation and Thales
TRC, Inc. dated 10 September 2001;
"Cliffstone Note" means the US Dollar One Million and Five Hundred
Thousand secured convertible promissory note entered between Thales TRC,
Inc. and Cliffstone on September 10, 2001;
"Cliffstone Shares" means the 3,356,335 shares of series C Convertible
Preferred Stock par value $1 per share in Cliffstone currently held by
Thales
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TRC, Inc. to be transferred at Completion to Nice (or as it shall
otherwise so direct) pursuant to the relevant transfer form;
"Companies" means TCSA, TCSL, TCS GmbH and TCS Inc, brief details of each
of which are set out in Schedule 1;
"Companies Act" means the relevant legislation governing companies in each
respective jurisdiction where the Companies are incorporated (being
equivalent to the Companies ▇▇▇ ▇▇▇▇ in UK) and with respect to TCS, Inc.
and Cliffstone respectively, also means the relevant legislation governing
companies in their state of incorporation;
"Company" means each of the Companies severally;
"Completion" means completion of the transactions to be effected pursuant
to this Agreement in accordance with Clause 9;
"Completion Balance Sheet" means a consolidated balance sheet of the
Business as at the Completion Date reflecting the Assets and Assumed
Liabilities acquired or assumed pursuant to this Agreement prepared
pursuant to and in accordance with Clause 13 and the Accounting
Principles;
"Completion Date" means the date on which Completion occurs;
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"Completion Net Asset Value" means the Net Asset Value as shown in the
Completion Balance Sheet calculated in Dollars applying the Conversion
Rate;
"Conditions" means the conditions precedent to Completion specified at
Clause 2 and "Condition" shall mean any of them;
"Contracts" means
(a) the Leases;
(b) all contracts, engagements or orders entered into on or prior to the
Completion Date by or on behalf of any of the Companies with
customers for the sale of goods or the supply of services by any of
the Companies in connection with the Business which at the
Completion Date remain to be performed in whole or in part including
any outstanding obligations owed to any member of the TCS Group in
relation to the Business in respect of Inter-company Trading
Indebtedness;
(c) all agreements entered into on or prior to the Completion Date by
any member of the Thales Group in connection with the Business with
sales representatives, sales agents or distributors which are extant
at the Completion Date;
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(d) all licences granted by any of the Companies in relation to the
Business IPR;
(e) all licences granted in favour of any member of the Thales Group in
relation to Intellectual Property Rights used exclusively in
connection with the Business, including (but not limited to) those
contained in the Disclosure Letter, except those which were intended
to also be used outside of the Business but which, as a matter of
fact, were only used in connection with the Business as at
Completion, which licences shall be deemed to be "Shared Assets";
and
(f) all other contracts entered into in the course of carrying on the
Business to which any member of the Thales Group is a party and
which have not been fully performed on the Completion Date and which
relate to the Business.
Notwithstanding the above, "Contracts" shall not include contracts
or leases in respect of Business Properties, contracts with
Employees, US Embargo Country Contracts, the contract with Coppice
Developments Limited and contracts relating to the Excluded
Liabilities;
"Conversion Rate" means the mid-market spot exchange rate between the two
relevant currencies on the relevant date as published in the Financial
Times (London edition);
"Cross Patents Licence Agreements" means the patent licence granted by
Thales in respect of all group patents including the patent application
for "Voice Activity Monitor" owned by TCSL (UK Application number: UK
9916430.3; application date 13 July 1999, publication number GB 2352948;
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publication date 7 February 2001; inventor ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇) to Alcatel
and Thomson Multimedia;
"Cumulative Orders" means the total cumulative value (calculated in Euro
at the Conversion Rate on the 30 June 2002) of the recorded orders of the
Companies received in respect of the Business in accordance with the
provisions of Clause 7.7.6 during the period 1 January to 30 June 2002;
"Disclosure Documents" means those documents disclosed to the Purchaser's
Solicitors and which are scheduled and attached to the Disclosure Letter;
"Disclosure Letter" means the letter of even date with this Agreement
written by and on behalf of Thales to the Purchasers;
"Dollar" or "USD" or "$" means dollar, the lawful currency of the United
States of America;
"Embargo Contracts" means (a) the purchase order placed by Rashed Al
Makhawi for the supply of "Wordnet" recorders for Libya pursuant to a
distribution agreement between Rashed Al Makhawi and TCSL (copies of the
purchase order and the distribution agreement being attached to the
Disclosure Letter); and (b) the purchase order placed by the Islamic
Republic of Iran Civil Aviation Authority dated February 2002 for the
supply of spares (a copy of which is attached to the Disclosure Letter)
(the "Iran Contract");
"Employees" means those employees employed by the Thales Group in the
Business as at Completion who are to transfer to the Purchasers and who
are listed at Schedule 18 as amended at Completion to reflect changes in
the period between signing and Completion provided that such changes
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have occurred in compliance with Clause 10 and the total number of
Employees in each jurisdiction at Completion does not exceed the number of
Employees in each jurisdiction at the date of this Agreement unless
otherwise agreed in writing by Nice and Thales;
"Employment Liabilities" has the meaning set out in Clause 14.1.2;
"Encumbrances" means all pledges, charges, liens, mortgages, security
interests, pre-emption rights, options and any other similar encumbrances
or third party rights or claims of any similar kind (other than liens
arising or incurred in the ordinary course of business and securing
obligations not material in amount and provisions constituting reservation
and retention of title clauses entered into in the ordinary course of
business in favour of suppliers);
"Environment" has the meaning ascribed by Section 1 (2) of the Environment
Protection Act 1990 and equivalent law in all other countries where the
Business has been and/or is conducted;
"Environmental Laws" means all laws, regulations, directives and other
measures imposed by any relevant body to which the Business has been
subject insofar as they relate to the pollution or protection of the
Environment;
"Environmental Matters" means:-
(a) pollution or contamination;
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(b) the release, spillage, deposit, escape, discharge, leak, emission or
presence of Hazardous Materials or Waste;
(c) exposure of any person to Hazardous Materials or Waste;
(d) the creation of noise, vibration, radiation or common law or
statutory nuisance or other adverse impact on the Environment;
(e) worker health and safety; and
(f) other matters relating to the protection, condition, maintenance or
replacement of the Environment or any part of it arising out of the
manufacturing, processing, treatment, keeping, handling, labelling,
use (including as a building material), possession, supply receipt,
sale, purchase, import, export or transportation or presence of
Hazardous Materials or Waste;
"European Transfer Legislation" has the meaning set out in Clause
14.2.1(a);
"Excluded Assets " means:
(a) Inter-company Debts; and
(b) cash in hand or at a bank not included in the Completion Balance
Sheet;
(c) any US Embargo Country Contracts; and
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(d) the Excluded Trade Marks;
"Excluded Employees" means any persons not named at Schedule 18 as
Employees;
"Excluded Liabilities" means:
(a) Inter-company Debts and External Debt outstanding at Completion;
(b) Inter-company Trading Indebtedness owed by any member of the TCS
Group to any member of the Thales Group other than the Companies;
(c) any liability to Taxation;
(d) any liability relating to US Embargo Country Contracts;
(e) any liability arising from or in connection with Cliffstone or
obligations to Cliffstone, other than the Assumed Cliffstone
Obligations;
(f) any liability in relation to the Excluded Employees; and
(g) any liability in relation to the contract with Coppice Developments
Limited; and
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(h) all of the debts, obligations and other liabilities and all claims
of and against the Companies arising before or after Completion
which are not Assumed Liabilities;
"Excluded Trade Marks" means the trade marks, service marks, brand names,
certification marks, trade dress, business names, and other indications of
origin and any Internet protocol addresses and networks, including domain
names, e-mail addresses and world wide web (www) and http addresses,
network names, network addresses and services which subsist of or include
"Thales", "Thales Contact Solutions", "Racal", "Thomson", or any
confusingly similar word or any Thales, Racal or Thomson specific logos;
"External Debt" means the indebtedness of the Companies (in relation to
the Business) to banks or other providers of loan finance facilities but
excluding:
(a) Inter-company Debts;
(b) Inter-company Trading Indebtedness; and
(c) all amounts in respect of the Leases;
"Fixtures and Fittings" means the fixtures (other than the Machinery and
Equipment and any landlords' fixtures and fittings at the Business
Properties) belonging to the Companies or any other member of the Thales
Group and used exclusively in connection with the Business;
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"French Business" means that part of the Business operated as a going
concern by TCSA and all the Assets used in that part of the Business by
TCSA other than the Assigned IPR;
"GAAP" means generally accepted accounting principles in the relevant
country;
"German Business" means that part of the Business operated as a going
concern by TCS GmbH and all the Assets used in that part of the Business
by TCS GmbH other than the Assigned IPR;
"Goodwill" means the goodwill, custom and connections of the Companies in
connection with the Business including the exclusive right for Nice and
the Purchasers to represent themselves as carrying on the Business in
succession to the Companies but, for the avoidance of doubt, shall not
include any right to the use of the Excluded Trade Marks save as
specifically provided for under Clause 24 of this Agreement;
"Governmental Authority" means any United Kingdom, France, United States
of America, Germany, Israel, or other federal, state, provincial, or local
governmental, regulatory, or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body and any
body relating to any of the foregoing or to any jurisdiction in which the
Business has operations;
"Guarantees" means those guarantees or obligations expressly relating to
the Business and/or Assets and/or Assumed Liabilities entered into by
Thales or any member of the Thales Group and now subsisting and specified
in Schedule 8;
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"Hazardous Materials" means anything which alone or in connection with
other things is capable of causing harm to man or to the Environment or
any other organism supported by the Environment such as to constitute a
breach of Environmental Laws;
"Hedge End Landlord" has the meaning set out in paragraph 2 of part 2 of
Schedule 3;
"Hedge End Licence" means the license granted pursuant to paragraph 10 of
part 2 of Schedule 3;
"Hedge End Property" means the office premises at Hedge End, Eastleigh,
Hampshire demised by and more particularly described in a lease dated 9
July 1998 made between Whitbread plc, ▇▇▇▇▇▇ Communications Systems
Limited, and Racal Electronics plc and which is also for the purposes of
this Agreement one of the Business Properties;
"Hedge End Sublease" means a sublease in the agreed terms to be entered
into between Thales Properties Limited and the UK Purchaser relating to
the Hedge End Property;
"ICTA 1988" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"Independent Accountants" means either (a) an independent internationally
reputable firm of chartered accountants agreed between
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Thales and Nice or (b) in default of agreement as to the identity of the
independent internationally reputable firm of chartered accountants within
5 days of either party notifying the other of its wish to appoint an
independent firm, a specific member of an independent internationally
reputable firm of chartered accountants to be nominated on the application
of either party by the President for the time being of the Institute of
Chartered Accountants in England and Wales;
"Information Technology" means computer and telecommunication hardware,
software, networks and/or other information technology and any aspect or
asset of a business which relies on computer hardware, software, networks
and other information technology (embedded or otherwise);
"Instem Contracts" means each of the manufacturing agreement between TCSL
and Instem Technologies Limited dated 5 November 2001, the agreement for a
revolving credit facility between TCSL and Instem Technologies Limited
dated 5 November 2001, the equitable charge granted by Instem Technologies
Limited to TCSL dated 5 November 2001 and the deed of priority between
TCSL and the Governor and Company of the Bank of Scotland dated 5 November
2001;
"Initial Purchase Price" means the price, exclusive of VAT, to be paid by
the Purchasers in consideration for the Cliffstone Shares, Cliffstone
Note, Business and Assets in accordance with this Agreement calculated in
accordance with Clause 7.2 but excluding any Sales Earn Out Amount and any
Earn Out Consideration payable in accordance with Clauses 7.4 and 7.7
respectively;
"Intellectual Property Rights" means all intellectual property in any
jurisdiction, whether registered, pending applications or unregistered,
including without limitation: (a) all trade marks, service marks, brand
names,
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certification marks, trade dress, business names and other indications of
origin; (b) Patents; (c) trade secrets, know-how and other confidential or
non-public business information, including ideas, manufacturing and
production processes and techniques, research and development information,
drawings, specifications, designs, source codes plans, proposals and
technical data, business and marketing plans, market surveys, market
know-how and customer lists and information; (d) writings and other
copyright works, including computer programs, source code, object code and
documentation (whether or not released), design right, architecture,
database rights, and all copyrights and any non-registered copyrights to
any of the foregoing; (e) integrated circuit topographies and mask works;
(f) Internet protocol addresses and networks, including domain names,
e-mail addresses, world wide web (www) and http addresses, network names,
network addresses and services; (g) privacy and publicity rights; and (h)
all other intellectual property rights of a similar nature or having
equivalent or similar effect to these which may subsist anywhere in the
world;
"Inter-company Debts" means all amounts owing on interest bearing or
non-interest bearing loan or current account to or by any of the
Companies, from or to any member of the Thales Group as at Completion,
other than Inter-company Trading Indebtedness;
"Inter-company Trading Indebtedness" means the trading debts in the
ordinary course of business owing to or by any of the Companies, (in
relation to the Business) by or to any member of the Thales Group
including in respect of goods and services supplied, and for this purpose
trading debts arising in the ordinary course of business shall include
charges in respect of publicity, administration and other services
provided by members of the Thales Group;
"Inventory" means all stocks of raw materials, supplies, work in progress,
parts and components and finished goods and other stock-in-trade and
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packaging held, used or owned by the Companies at the Completion Date
exclusively for the purposes of or exclusively in connection with the
Business, including items which although subject to reservation of title
by the relevant sellers are under the direct or indirect control of the
Companies including but not limited to inventory of the Business located
at Instem or other third party locations;
"IPR Assignment" means the agreement in the form attached at Schedule 14
to be entered into between Thales Electronics, Thales and Nice relating to
the assignment of the Assigned IPR;
"IPR Licence" means the licence to be entered into between Thales
Electronics and TCSL granting the right for TCSL to use the Assigned IPR
in the form attached at Schedule 14;
"IPR Licence Novation Deed" means the deed in the form attached at
Schedule 14 to be entered into between TCSL, Thales Electronics and the UK
Purchaser relating to the novation of the IPR Licence;
"Key Employees" means those Employees listed at Schedule 20;
"(pound)" or "pounds" means pounds sterling, the lawful currency of the
United Kingdom;
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"Landlord's Consent" has the meaning set out in paragraph 2 of part 2 of
Schedule 3;
"Leases" means all those contracts, engagements or orders entered into on
or prior to the Completion Date by or on behalf of the Companies in
relation to the leasing, lease purchase or hire of goods or equipment for
use exclusively in the Business which on the Completion Date remain to be
performed in whole or in part;
"Machinery and Equipment" means all the plant, machinery, equipment,
Company owned vehicles, office, warehouse and factory equipment, furniture
and furnishings, together with all spare parts, accessories and consumable
supplies therefor and other goods used by the Companies exclusively in the
Business at the Completion Date;
"Management Accounts" the management accounts of the TCS Group (excluding
TCSA) for the five month period ending 31 May 2002;
"Material IPR" means all the Intellectual Property Rights used in
connection with the Business relating to the following products:
(a) Renaissance;
(b) Wordnet (versions 1, 2 and 3);
(c) Tienna;
(d) ▇▇▇▇▇; and
(e) Agent Quality Monitoring (and any applications associated therewith
which are owned by the Companies);
"NAV Target" means $29,982,000 being the combined net asset value of the
Business as at 31 December 2001 calculated in accordance with the
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Accounting Principles as extracted from the Accounts Combination
Statement.
"NAV Statement" means the statement agreed between Thales and Nice
pursuant to Clause 13 or, in the event of the operation of Clause 13.4,
the determination of the Independent Accountants of the amount which in
their opinion is the Net Asset Value;
"Net Asset Value" means the aggregate amount, as at the close of business
on the Completion Date, of the consolidated fixed and current assets of
the Business (excluding the Goodwill, the Business IPR and any other
intangible assets) less the aggregate amount, as at the close of business
on the Completion Date, of the consolidated liabilities of the Business
calculated in accordance with the Accounting Principles in Dollars
applying the Conversion Rate;
"Nice's Accountants" means Ernst & Young, Israel;
"Nice Shares" has the meaning given in Clause 7.1;
"Non-UK Business" means that part of the Business carried on outside the
United Kingdom;
"Non-UK Employees" means those employees employed in the Business outside
the United Kingdom as listed in Part 2 of the Schedule 18 as amended at
Completion to reflect changes in the period between signing and Completion
provided that such changes have occurred in compliance with Clause 10 and
the total number of Non-UK Employees in each non-UK jurisdiction at
Completion does not exceed the number of Non-UK
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Employees in each non-UK jurisdiction on the date of this Agreement unless
otherwise agreed in writing by Nice and Thales;
"Patents" means any and all patents, patent applications (including
letters patent, industrial designs, and inventor's certificates), design
registrations, invention disclosures, and applications to register
industrial designs, and any and all rights to any of the foregoing
anywhere in the world, including any provisionals, substitutions,
extensions, supplementary protection certificates, re-examinations,
reissues, renewals, divisions, continuations in part (or in whole),
continued prosecution applications, requests for continued examination,
and other similar filings or notices provided for under the laws of any
country;
"PAYE" means any payment of or on account of any income assessable to
income tax under Schedule E as required under Section 203 of ICTA 1988 and
any regulations made under it or its equivalent in any relevant
jurisdiction;
"Prism Product" means the Tactical Application Integration Suite product
known as "Prism" as at the date of Completion (version 2.7.27) owned by
Cliffstone;
"Purchasers" means the persons defined as such in the parties clause, and
"Purchaser" shall mean any of them;
"Purchasers' Group" means the Purchasers and any holding company of the
Purchasers and any subsidiaries of such holding company, holding and
subsidiary having the meanings given in the Companies ▇▇▇ ▇▇▇▇ of the
United Kingdom;
27
"Purchasers' Solicitors" means ▇▇ ▇▇▇▇▇▇, London;
"Records" means all books and records containing or relating exclusively
to Business Information or on which any Business Information is recorded
(including, without limitation, all documents and other material (whether
in hard copy or in any forms of computer or machine readable material));
"Registration Rights Agreement" means the registration rights agreement
between Nice and Thales granting Thales certain rights with respect to the
registration under the United States Securities Act of 1933 as amended
(the "Securities Act") of the Nice Shares issued to Thales as
consideration pursuant to this Agreement set out at Schedule 11;
"Reseller Agreement" means the Reseller Agreement between TCSL and
Cliffstone dated 5 December 2000 (as amended) relating to the Prism
Product;
"Restricted Customer" means a person who was a customer of the Business at
any time during the two years prior to the Completion Date;
"Restricted Supplier" means a person who was a supplier of the Business at
any time during the two years prior to the Completion Date;
"Relevant Employees" means those employees listed at Schedule 19;
"Service Documents" means a claim form, application notice, order,
judgment or other document relating to any proceedings;
28
"Shared Assets" has the meaning set out in clause 5.2;
"Surplus Employees" means those Employees of TCSA and TCS GmbH listed at
Schedule 22;
"Sales Earn Out Amount" has the meaning set out in Clause 7.4 and
calculated in accordance with Schedule 21;
"2002 Sales" means the aggregate of:
(a) the net sales revenues of the Companies attributable to sales of TCS
Products for the period from 1 January 2002 and ending on the
Completion Date as set out in the management accounts of the
Companies and recorded in the books of the Companies as revenue for
the period concerned, with such adjustments as are necessary to
comply with US GAAP including, for the avoidance of doubt, the
inclusion of net sales revenues not recognised in the Carved Out
Accounts prepared under US GAAP for the period ending on the
Accounting Date but properly recognised as net sales revenues in the
period from 1 January 2002 and ending on the Completion Date under
US GAAP; and
(b) the net sales revenues of the Purchasers' Group attributable to
sales of TCS Products for the period from the Completion Date and
ending on 31 December 2002 by reference to the published financial
statements of Nice for the financial year ending on 31 December
2002;
"2002 Sales Statement" means the statement agreed between Thales and Nice
pursuant to Schedule 21, or in the event of the operation of paragraph 2.5
of Schedule 21, the determination of the Independent Accountants of the
amount which is in their opinion the 2002 Sales;
29
"Tax" or "Taxation" means any form of tax, duty, charge, fee, levy,
deficiency impost, withhholding or other assessment of whatever kind or
nature and whether created or imposed including, without limitation, any
income tax (including income tax or amounts equivalent to income tax
required to be deducted withheld from or accounted for in respect of any
payment) net income, gross income, profits, gross receipts, advance
corporation tax, inheritance tax, value added tax, escheat property,
rates, customs and excise duties, real or personal property, sales, ad
valorem, withholding, national insurance and social security, retirement,
excise, employment, unemployment, minimum, estimated, severance, stamp
duty, stamp duty reserve tax, property, occupation, environmental,
windfall profits, use, service, net worth, payroll, franchise, license,
capital gains tax, customs, capital transfer tax, capital duty, recording
and other tax, duty, charge, fee, levy, deficiency, impost, withholding or
other assessment or charge of any kind whatsoever, wherever created or
imposed, payable to or imposed by any Tax Authority, including any
liability therefore as a transferee or as a result of any tax sharing or
similar agreement, together with any interest, charges, penalties, fines
or additions to tax relating thereto;
"Tax Authority" means any branch, office, department, agency,
instrumentality, court, tribunal, officer, employee, designee,
representative, or other person that is acting for, on behalf or as a part
of any foreign or domestic government (or any political subdivision
thereof) that is engaged in or has any power, duty, responsibility or
obligation relating to the legislation, promulgation, interpretation,
enforcement, regulation, monitoring, supervision or collection of or any
other activity relating to any Tax;
"TCSA" means Thales Contact Solutions SA a French societe anonyme whose
registered office is at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇;
30
"TCS GmbH" means Thales Contact Solutions GmbH a company incorporated in
Germany whose registered office is at Technologie Park Bergisch Gladbach,
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇ Gladbach, Germany;
"TCSL" means Thales Contact Solutions Limited (a company incorporated in
England and Wales with the registered number 560700 whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"TCS Group" means the Companies and the Business and Assets (as the
context may require);
"TCS Inc" means Thales Contact Solutions Inc, a company incorporated under
the laws of the State of Delaware , USA, whose principal place of business
is at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇;
"TCS Products" means all of the various secure voice recording,
surveillance and replay systems and products and application software for
business management solutions in contact centres, public safety and
wholesale trading platforms (including in particular the products listed
within the definition of Material IPR) and all other products and services
sold or supplied in the course of the Business;
"Thales IPR Assignment" means the agreement in the form attached at
Schedule 14 to be entered into between TCSL and Thales Electronics;
"Thales Electronics" means Thales Electronics Plc (a company incorporated
in England and Wales with the registered number 497098) whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
31
"Thales Group" means Thales and each of its subsidiaries (including the
Companies), any holding company of Thales and all other subsidiaries of
such holding company from time to time;
"Thales Properties Limited" means Thales Properties Limited (a company
incorporated in England and Wales with registered number 1153834 whose
registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"Thales TRC, Inc" means Thales TRC Inc a company incorporated under the
laws of the State of Florida, USA whose principal place of business is at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇;
"Thales' Scheme" as defined in Schedule 6;
"Third Party Licensed IPR" means Intellectual Property Rights which are
licensed under Contracts as defined in part (e) of the definition of
"Contracts" other than under the Wordnet 3 Licence and the Reseller
Agreement;
"Transfer Regulations" means the Transfer of Undertakings (Protection of
Employment Regulations 1981, as amended;
"Transitional Services Agreement" means the agreement in the form attached
as Schedule 12 to be entered into between Thales, certain members of the
Thales Group and the Purchasers relating to the provision of specified
services for an interim period following Completion;
"UK Business" means that part of the Business operated as a going concern
by TCSL and all the Assets used in that part of the Business by TCSL other
than the Assigned IPR;
32
"UK Employees" means the employees of TCSL engaged in the UK Business as
listed in Part 1 of Schedule 18 as amended at Completion to reflect
changes in the period between signing and Completion provided that such
changes have occurred in compliance with Clause 10 and the total number of
UK Employees at Completion does not exceed the number of UK Employees at
the date of this Agreement unless otherwise agreed in writing by Nice and
Thales;
"US Business" means that part of the Business operated as a going concern
by TCS Inc and all the Assets used in that part of the Business by TCS
Inc;
"US Embargo Countries" means any of Burma (Myanmar), Cuba, Iran, Iraq,
Libya, Sudan, Taliban (Afghanistan), and UNITA (Angola);
"US Employees" shall mean the Non UK Employees listed on Schedule 19 which
are employees of TCS, Inc;
"US Embargo Country Contracts" means any contract with a party resident in
any of the US Embargo Countries or for the provision of goods or services
to any person, directly or indirectly, in any of the US Embargo Countries;
"VAT" means value added tax or its equivalent in any relevant
jurisdiction;
33
"VATA 1994" means the Value Added Tax ▇▇▇ ▇▇▇▇;
"Warranties" means the warranties given by Thales as set out in Part 1 of
Schedule 4 and Schedule 5 and references to "Warranty" shall be construed
accordingly;
"Waste" means any waste including anything which is abandoned, unwanted or
surplus, irrespective of whether it is capable of being recovered or
recycled or has any value;
"Wordnet 3 Licence" means the Software Licence and Service Agreement dated
1st March 2002 between TCSL and Origin Data Realisation Limited;
"Works" means the carrying out of: (a) inspection, investigation, sampling
and monitoring works; and (b) any works (including the installation,
operation, repair or replacement of plant or equipment) in order to
remove, remedial or contain any Environmental Matter or in order to
prevent an Environmental Matter from arising.
1.2 In this Agreement, unless otherwise specified:
1.2.1 the singular includes the plural and reference to any gender
includes the other genders;
1.2.2 references to persons include bodies corporate, unincorporated
associations and partnerships;
34
1.2.3 words and phrases defined in the Companies Act have the same
meanings in this Agreement but the word "company" shall be construed
so as to include any body corporate, company or corporation,
wherever and howsoever incorporated or established;
1.2.4 references to "Clauses" are to clauses or sub-clauses of this
Agreement, references to "Schedules" are to the schedules to this
Agreement and references within a Schedule to "paragraphs" are to
paragraphs or sub-paragraphs of that Schedule;
1.2.5 the expressions "holding company", "subsidiary" and "wholly owned
subsidiary" shall have the meaning given in the Companies ▇▇▇ ▇▇▇▇
of the United Kingdom;
1.2.6 a person shall be deemed to be connected with another if that person
is connected with another within the meaning of section 839 ICTA
1988;
1.2.7 references to times of the day are to London time;
1.2.8 the expression "control" shall have the meaning given within section
416 ICTA 1988.
1.3 In this Agreement:
1.3.1 any reference to any statute or statutory provision includes any
consolidation or re-enactment of the same
35
and any subordinate legislation in force under the same from time to
time;
1.3.2 the index and headings are for reference purposes only and shall not
affect the interpretation of this Agreement;
1.3.3 references to documents "in the agreed terms" are to documents the
terms of which have been agreed by or on behalf of the parties and a
copy of which has been initialled for the purpose of identification
by or on behalf of the parties; and
1.3.4 references to writing shall include any methods of reproducing words
in a legible and non-transitory form.
1.4 The Schedules are an integral part of this Agreement and shall have the
same force and effect as if expressly set out in the body of this
Agreement and references to this Agreement shall include the Schedules.
1.5 Any reference to any English legal term for any action, remedy, method of
legal proceeding, legal concept or matter, legal document, legal status,
court, official or any legal thing shall in respect of any jurisdiction
other than England be treated as a reference to the closest equivalent
English legal term, proceeding concept or matter in that legal
jurisdiction.
1.6 References to the knowledge, information, belief or awareness of any
person shall be treated as including any knowledge, information, belief or
awareness which the person would have if the person had made all usual and
reasonable enquiries of the Relevant Employees.
36
1.7 Any reference to any amount of money which is denominated in any currency
shall where the context so requires or admits be deemed to include a
reference to the same amount in any other currency, calculated by applying
the closing mid point spot rate for the previous trading day as published
in the London edition of the Financial Times on the date on which such sum
falls to be determined.
2 CONDITIONS
2.1 Completion of the sale and purchase of the Cliffstone Shares, Cliffstone
Note, Business and Assets shall be conditional upon the following
conditions being satisfied in accordance with this Agreement:
2.1.1 in respect of competition and/or anti-trust or any analogous law or
regulation:
(a) a statement having been issued by the UK Office of Fair
Trading or the appropriate Minister in terms satisfactory to
the Purchaser that is not the intention of the Secretary of
State for Trade and Industry to refer the transaction to the
Competition Commission or such transaction having been so
referred, the Secretary of State for Trade and Industry
indicating that the Competition Commission has concluded that
such transaction is not expected to operate against the public
interest or, if it has not so concluded, that the Secretary of
State for Trade and Industry does not propose to prohibit or
restrain such transaction and that any undertakings he may
require from the Purchaser in lieu of such action
37
are in terms satisfactory to the Purchaser; and
(b) receipt of any necessary approval of the Tel Aviv Stock
Exchange, the Investment Centre of the Israel Ministry of
Industry and Trade and the Office of the Chief Scientist of
the Israel Ministry of Industry and Trade to the Issuance of
the Nice Shares to Thales; and
(c) all other filings, notifications or applications having been
made and all consents that are necessary under any relevant
national merger control rules, anti-trust or similar
legislation having been obtained in terms satisfactory to the
Purchaser and any waiting or other time or limitation periods
under such rules having expired, lapsed or otherwise
terminated in respect of the proposed acquisition by the
Purchaser;
2.1.2 Thales procuring that Origin Data Realisation Limited consents to
the following in relation to the Wordnet 3 Licence:
(a) an assignment from TCSL to Thales Electronics;
(b) the grant of a sub-licence from Thales Electronics to TCSL;
(c) an assignment or novation of the sub-licence referred to in
(b) above from TCSL to UK Purchaser; and
38
(d) an assignment from Thales Electronics to Nice,
or such alternative series of transactions with similar effect
as Nice may agree with Thales.
2.2 Thales and the Purchasers shall each use all reasonable endeavours to
procure the due fulfilment of the Conditions as expeditiously as possible
so far as lies within their respective powers to do so and the Purchasers
may following written notice to Thales in their sole and absolute
discretion waive the condition contained in Clause 2.1.2.
2.3 If the Conditions are not fulfilled by 31 December 2002, this Agreement
(save for Clause 26 (Confidentiality), Clause 29 (Announcements) and
Clause 31 (Costs) which shall remain in force) shall automatically
terminate and none of the parties shall have any claim of any nature
whatsoever against the other parties under this Agreement save that the
rights and liabilities of the parties which have accrued prior to
termination shall subsist.
2.4 Thales and the Purchasers undertake to keep one another informed as to
progress towards satisfaction of the Conditions and in particular to
disclose in writing to one another anything which will or may prevent any
of the Conditions from being satisfied by the Completion Date immediately
it comes to the notice of either of them.
2.5 The Purchasers shall consult and collaborate with Thales with respect to
any filings, notifications or applications and discussions with any
relevant, national Governmental Authority or supranational Authority.
3 BUSINESS PROPERTIES
39
3.1 On Completion the UK Purchaser shall enter into either the Hedge End
Sublease or the Hedge End Licence as determined by the provisions of Part
2 of Schedule 3.
3.2 Thales shall indemnify and keep indemnified and hold harmless Nice and the
UK Purchaser (and, to the extent relevant, any other member of the
Purchaser's Group) on demand in respect of any losses, liabilities,
claims, demands, damages, costs and expenses ("Losses") arising from or in
connection with any claim made to Nice or the UK Purchaser or any member
of the Purchaser's Group by the Hedge End Landlord in respect of the Hedge
End Licence or the Purchaser's use or occupation of the Hedge End
Property.
3.3 Thales shall indemnify and keep indemnified and hold harmless Nice and the
UK Purchaser (and, to the extent relevant, any other member of the
Purchaser's Group) on demand in respect of any costs of relocation of the
Business as contemplated by clause 3.5 ("Relocation Costs") required in
the event that the Hedge End Landlord requires the UK Purchaser to vacate
the Hedge End Property.
3.4 Thales shall indemnify and keep indemnified and hold harmless Nice and the
UK Purchaser (and, to the extent relevant, any other member of the
Purchaser's Group) on demand in respect of any Losses arising from the
Hedge End Landlord denying occupation of the Hedge End Property to the UK
Purchaser provided that such indemnity shall not apply where the UK
Purchaser has been given written notice to vacate the Hedge End Property
and the UK Purchaser fails to vacate within such period as would give the
UK Purchaser a reasonable time to relocate to alternative premises
pursuant to the procedures specified in Clause 3.5 and provided that in
the event that the Hedge End Landlord denies occupation as aforesaid the
UK Purchaser shall vacate the Hedge End Property as soon as reasonably
practicable pursuant to the procedures specified in Clause 3.5.
40
3.5 If the Hedge End Landlord requires the UK Purchaser to vacate the Hedge
End Property then the UK Purchaser shall conduct a search for alternative
premises which premises shall be within the south east of England
(excluding the Isle of Wight). Following the identification of appropriate
premises, the UK Purchaser shall provide details of such premises to
Thales and agree with Thales a timetable for the relocation and a
specification for fitting out the relevant premises. The fit out of the
premises shall be such as to satisfy the UK Purchaser's reasonable
requirements provided that such requirements shall not exceed the
specification at the Hedge End Property. The UK Purchaser shall be
entitled to engage any appropriate professionals to assist it in the
relocation or other service providers including real estate agents,
lawyers, office designers, architects, building contractors (and all
relevant sub-contractors) and removal services provided that Thales shall
be entitled to require the UK Purchaser to engage such service providers
as it shall direct from a short list of such firms provided by Thales to
the UK Purchaser and on terms negotiated by Thales directly with such
service providers.
3.6 The UK Purchaser shall give all reasonable assistance and support of the
application for the consent of the Hedge End Landlord to the Hedge End
Sublease and Nice shall, if so required by the Hedge End Landlord as a
pre-condition of such consent provide to the Hedge End Landlord its
guarantee of the obligations of the UK Purchaser's under the Landlord's
Consent.
3.7 The indemnities at Clauses 3.2 and 3.3 shall not extend to any Losses or
Relocation Costs (as the case may be) to the extent that such Losses
and/or Relocation Costs would not have been incurred had the UK Purchaser
complied with the provisions of Clauses 3.5 and 3.6.
3.8 The indemnities at Clauses 3.2 and 3.3 shall cease to have effect on the
earlier of (a) the UK Purchaser voluntarily vacating Hedge End Property
41
other than on notice from the Hedge End Landlord, and (b) the grant of the
Hedge End Sublease.
3.9 The leases or other contracts to which any of the Companies or any other
member of the Thales Group is a party in respect of the occupation by any
of the Companies of those Business Properties (the "Relevant Business
Properties") specified in Part 1B of Schedule 3 shall be treated as
Assumed Liabilities notwithstanding the absence of any landlord's consent
or any other necessary consent to assignment, transfer or other action
necessary to vest legal and beneficial title to the Relevant Business
Properties in the relevant Purchasers and accordingly the Purchasers in
each jurisdiction shall assume the leases or other contracts in respect of
the Relevant Business Properties but only to the extent that copies of
such documents are included in the Disclosure Documents and Clause 21
shall apply to the leases or other contracts as aforesaid as if they were
"Contracts" for the purposes of Clause 21 provided that the Purchasers
shall not be liable for or assume any liability for any act, neglect,
default or omission in respect of any of the Relevant Business Properties
committed by any member of the Thales Group or occurring before
Completion.
4 SALE AND PURCHASE OF THE CLIFFSTONE SHARES AND NOTE
4.1 Subject to the terms of this Agreement, Thales shall or shall procure that
Thales TRC Inc. shall sell free from Encumbrances and the UK Purchaser and
the US Purchaser (relying on the Warranties) shall purchase, as at and
from the Completion Date, the Cliffstone Shares and the Cliffstone Note
(respectively) together with all rights attached or accruing to them at
Completion.
4.2 Nice shall not be obliged to complete the purchase of any of the
Cliffstone Shares unless the purchase of all the Cliffstone Shares, the
Cliffstone Note
42
and the purchase of the Business and Assets under this Agreement is
completed simultaneously.
4.3 Thales undertakes to take all steps necessary to ensure all rights of
pre-emption over any of the Cliffstone Shares and Cliffstone Note are
waived.
4.4 Nice shall provide to Thales all reasonable assistance required by Thales
to enable it to procure the consent of Cliffstone with respect to the sale
of the Cliffstone Shares, the Cliffstone Note and the matters referred to
at Clause 9.2.4.
5 SALE AND PURCHASE OF THE BUSINESS
5.1 Subject to the terms of this Agreement, Thales shall or shall procure that
the Companies (and in relation to the Assigned IPR and the rights under
the Wordnet 3 Licence (subject to certain obligations in respect thereof),
Thales Electronics) shall sell free from all Encumbrances and in
accordance with the covenant in Clause 5.3 and the Purchasers (relying on
the Warranties) shall purchase, as at and with effect from the Completion
Date the Business as a going concern and the Assets (to be divided between
the Purchasers as provided in Clause 5.4 below), comprising:
5.1.1 the Machinery and Equipment;
5.1.2 the Fixtures and Fittings;
5.1.3 the Inventory;
5.1.4 the Goodwill;
43
5.1.5 the benefit of the Contracts;
5.1.6 all of the rights against third parties (including, without
limitation, all rights in connection with such third party
guarantees, warranties, indemnities, restrictive covenants,
confidentiality obligations and representations and all rights of
action of whatever kind whether or not any proceedings have
commenced) with respect to the Business;
5.1.7 the Business IPR;
5.1.8 the Accounts Receivable;
5.1.9 the Business Information;
5.1.10 the Records; and
5.1.11 all other property rights and all other assets of whatsoever
nature (but not any further Intellectual Property Rights) of any
member of the Thales Group used exclusively in relation to the
Business.
5.2 It is understood that if any property rights or other assets or rights of
whatsoever nature are used in the Business as of the date hereof but are
not used exclusively in the Business but rather are also used by a member
of the Thales Group in connection with any other business ("Shared
Assets")
44
such Shared Assets shall be dealt with in accordance with the provisions
of Clauses 19.6 and 19.7, or clause 24 (as the case may be).
5.3 Thales covenants that it has the right to transfer or to procure the
transfer of the legal and beneficial title to the Assets, free from
Encumbrances and from all other rights exercisable by or claims by third
parties other than the Cross Patents Licence Agreements and the IPR
Licence, save only in the case of Contracts where express consent of the
counterparty to such Contract is required for the transfer of such
Contract.
5.4 Thales shall procure that the Companies shall sell, free from all
Encumbrances and in accordance with the covenant contained at Clause 5.3
above, with effect from Completion the Business as a going concern and the
Assets to the Purchasers as follows:
5.4.1 TCSL shall sell and the UK Purchaser shall purchase, the UK
Business;
5.4.2 TCSA shall sell and the French Purchaser shall purchase, the French
Business;
5.4.3 TCS GmbH shall sell and the German Purchaser shall purchase, the
German Business;
5.4.4 TCS Inc shall sell and the US Purchaser shall purchase, the US
Business;
45
5.4.5 Thales Electronics shall sell and Nice shall purchase the Assigned
IPR and the rights under the Wordnet 3 Licence (subject to certain
obligations in respect thereof).
5.5 In connection with the transactions contemplated by Clause 5.4 above, on
or before Completion, the Purchasers shall enter into separate business
transfer agreements in substantially the forms attached hereto as
Schedules 15, 16 and 17 (each a "Business Transfer Agreement" and
collectively the "Business Transfer Agreements") with respect to
transferring the Business as a going concern and transferring the Assets,
with only such modifications as are necessary in order to maintain
substantially the same legal meaning and effect under local law as
provided in this Agreement.
5.6 The parties acknowledge and agree that in the event of a conflict between
the terms of this Agreement and the terms of any of the Business Transfer
Agreements, the terms of this Agreement shall prevail.
6 LIABILITIES TO BE ASSUMED
6.1 The Purchasers shall assume responsibility as from Completion for the
payment and performance of the Assumed Liabilities in accordance with
Clause 6.2 and shall pay and discharge the Assumed Liabilities as the same
fall due for payment and shall indemnify Thales, and the Companies against
the Assumed Liabilities, and Thales declares itself to be trustee of the
benefit of this Clause for itself and the Companies.
6.2 It is agreed that the Assumed Liabilities shall be assumed as follows:
6.2.1 the UK Purchaser shall assume the Assumed Liabilities relating to
the UK Business;
46
6.2.2 the French Purchaser shall assume the Assumed Liabilities relating
to the French Business;
6.2.3 the German Purchaser shall assume the Assumed Liabilities relating
to the German Business;
6.2.4 the US Purchaser shall assume the Assumed Liabilities relating to
the US Business; and
6.2.5 Nice shall assume the Assumed Liabilities relating to the Assigned
IPR and the Wordnet 3 Licence (subject to the satisfaction of the
Condition at Clause 2.1.2).
6.3 The Thales Group shall continue to be responsible for the Excluded
Liabilities and shall promptly discharge all debts, liabilities and
obligations in connection with the Excluded Liabilities and Thales shall
indemnify the Purchasers against all Excluded Liabilities. Nothing in this
Agreement shall make the Purchasers liable for or assume any liability for
any act, neglect, default or omission in respect of any of the Contracts
committed by the Thales Group or occurring before Completion or impose any
obligation on the Purchasers for and in respect of any product delivered
or service performed by the Thales Group in connection with the Business
before Completion save in respect of:
(a) the obligations in respect of warranty work under clause 17.1;
(b) the obligations in respect of the provision of Additional Services
under clause 17.2; and
47
(c) obligations for which a specific provision has been made in the
Completion Balance Sheet but only to the extent of such provision.
7 PURCHASE PRICE
7.1 The Initial Purchase Price shall be the Initial Cash Consideration and the
Share Consideration referred to in clauses 7.2.1 and 7.2.2 respectively
subject to adjustment downwards under Clauses 13 and 7.7 below and subject
to a further adjustment upwards pursuant to Clause 7.4 or downwards
pursuant to Clause 7.5.
7.2 The Initial Purchase Price shall comprise and be satisfied as follows:
7.2.1 Cash consideration of $30,000,000 payable on Completion (the
"Initial Cash Consideration"); and
7.2.2 Share consideration of 2,187,500 Nice Shares to be issued on
Completion to Thales (the "Share Consideration").
7.3 The Purchasers and Thales shall each comply with their respective
obligations in Schedule 21.
7.4 If the 2002 Sales shall exceed Euro 84,000,000 then Thales shall be
entitled to a pro rata amount equal to the Sales Earn Out Amount, which
shall be paid to Thales by Nice on behalf of the Purchasers in accordance
with Clause 7.6 below.
48
7.5 If the 2002 Sales shall be less than Euro 75,000,000 then the Purchasers
shall be entitled to $3,000,000, which amount shall be paid by Thales to
Nice (on behalf of the Purchasers) in accordance with Clause 7.6 below.
7.6 Any amount payable to either Thales or the Purchasers under Clauses 7.4 or
7.5 above, as the case may be, shall be paid on the later of (i) the date
which is within 30 days of the publication by Nice of its audited accounts
for the financial year ending 31 December 2002 and Nice shall procure the
publication of such audited accounts no later than 31 March 2003 and (ii)
10 Business Days following the date upon which the 2002 Sales Statement is
finally agreed or determined in accordance with Schedule 21. If payment is
not made by Thales or Nice (as the case may be) on or before the due date
for payment then interest shall accrue on the amount payable for the
period from the due date to the date of actual payment at the rate of 2%
above the base rate of Barclays Bank plc computed on a daily basis until
and including the date of payment.
7.7 Price adjustment
7.7.1 If A (as defined below in this clause) is less than the Initial Purchase
Price, then the Initial Purchase Price shall be subject to a downwards
only adjustment if the value of the Cumulative Orders is lower than Euro
40 (forty) million, pursuant to the following formula:
A = $70 (seventy) million * Cumulative Orders
-----------------
40
where:
A is the adjusted value of the Initial Purchase Price.
49
7.7.2 Nice shall procure that the Purchasers' management shall, as promptly as
practicable and in any event before or at the same time as the delivery of
the draft Completion Balance Sheet pursuant to clause 13.2, prepare and
deliver to Thales and to Nice a statement prepared in accordance with the
provisions of Clause 7.7.6 showing the Cumulative Orders.
7.7.3 Thales and Nice shall then seek to agree the Cumulative Orders figure by
following the same procedures and time limits as prescribed for agreeing
the Completion Balance Sheet pursuant to Clauses 13.2 to 13.9.
7.7.4 To the extent the adjusted value of the Initial Purchase Price (determined
in accordance with clause 7.7.1) is less than the Initial Purchase Price,
the consideration shall be reduced by such amount and Thales shall pay
such amount to Nice in accordance with Clause 7.7.5. If the adjusted value
is greater than the Initial Purchase Price then the consideration shall
not be subject to any adjustment pursuant to this provision.
7.7.5 Any payment from Thales to Nice pursuant to Clause 7.7.4 shall be made on
the date of payment of any shortfall pursuant to clause 13.10 of this
Agreement in relation to the Completion Balance Sheet. If there is no such
payment required under clause 13.10, then payment under this clause 7.7.5
shall be made on the fifth Business Day after the date of determination or
agreement of the Completion Balance Sheet. If payment under this clause is
not made on or before the fifth Business Day after the date of
determination or agreement of the Completion Balance Sheet, Thales shall,
for the period from such date to the date of actual payment, pay to Nice
in addition to the sum then payable, interest at the rate of 2% above the
base rate of Barclays Bank plc computed on a daily basis until and
including the date of payment.
7.7.6 The following shall qualify as Cumulative Orders for the purposes of the
foregoing provisions of this Clause 7.7:
50
(a) a legally binding purchase order which constitutes an irrevocable,
unconditional obligation of the party making the order at the price
stated in the relevant order and such price is not subject to any
rebate, discount or other deduction and the other terms and
conditions do not materially differ from the Business' standard
terms and conditions; or
(b) a letter of intent:
(i) which incorporates in reasonable detail the description of the
products and services to be supplied and specifies the agreed
price, such description and price being contained in the body
of the letter of intent or by reference to a quotation from
which such description and price can be clearly ascertained;
(ii) which is not inconsistent with past practice for the
acceptance of letters of intent for the purpose of commencing
the process for the fulfilment of an order; and
(iii) is confirmed by a legally binding purchase order (in
accordance with part (a) above) within 30 days; or
(c) the letter of intent issued to TCS Inc. by iXP Corporation dated 28
June 2002 provided such letter of intent is confirmed by a legally
binding purchase order (as described in paragraph (a) above) issued
on or before 31 August 2002,
and for the avoidance of doubt no purchase order or letter of intent from
any connected person shall qualify as a Cumulative Order. For the
51
purpose of calculating Cumulative Orders the amount of the order shall be
taken net of tax, duties and excises.
7.8 In addition to the Initial Cash Consideration and the Share Consideration,
Thales shall be entitled to up to a further $20,000,000 (twenty million US
dollars) dependent on net sales of Prism to third parties by any member of
the Purchaser's Group (but, for the avoidance of doubt, excluding
Cliffstone) for the period from the Completion Date to 31 December 2004,
in the amounts specified in the table set out in Schedule 21 (the "Earn
Out Consideration") such amounts being payable in cash no later than 15
business days after publication by the board of the Purchasers of the
audited accounts for the relevant period, on the basis that Nice shall
procure the publication of such audited accounts by no later than the 31st
March following the end of the relevant year. The revenue recognition
policies governing the composition of Prism revenue shall be the revenue
recognition policies of Nice and accordingly US GAAP as determined by
Nice's external independent auditors.
7.9 Any payment by the Purchasers to Thales under this clause shall constitute
a good discharge of the Purchasers' obligations under this clause and the
Purchasers shall not be concerned to see that the monies paid are applied
in paying Thales and members of the Thales Group in accordance with their
respective entitlements.
7.10 The Initial Purchase Price and any other adjustments or payments made
pursuant to Clauses 7.4 to 7.8, shall be apportioned in accordance with
Schedule 2.
7.11 All payments referred to in this clause shall be made in immediately
available funds in Dollars without any set-off, restriction or condition
and without any deduction or withholding (save only as required by law) by
a
52
CHAPS transfer to such account as Nice or Thales shall specify (as the
case may be).
7.12 For United States federal income tax purposes, the payment payable to TCS,
Inc. in accordance with the provisions of Clause 7 as such payment may be
adjusted pursuant to the terms of such Clause, shall be allocated among
the assets of the US Business in the manner set forth in Schedule 2. US
Purchaser and Thales on behalf of itself and TCS, Inc. agree to act in
accordance with such allocation in all tax returns, reports and filings
and to complete and timely file Form 8594 pursuant to the provisions of
Section 1060 of the Internal Revenue Code of 1986, as amended and the
Treasury Regulations promulgated thereunder.
7.13 The parties agree that the allocation of specific amounts to each of the
Assets, Cliffstone Shares and Cliffstone Note (as set out in Clause 7.10
above) is not to limit any such amount as is mentioned in Clause 7.12
above.
7.14 Thales hereby confirms that there is no contractual obligation, or any
other obligations whatsoever, at the Completion Date on Thales or any of
the Companies to Cliffstone other than those set out in the provisions of
the Cliffstone Documents.
8 VAT
8.1 All payments made pursuant to this Agreement shall be exclusive of value
added tax which shall (where applicable) be payable in addition to the
payments in question.
8.2 The parties consider that the sale and purchase of the Assets and the
Business (including the transaction pursuant to the IPR Licence Novation
53
Deed) from TCSL to the UK Purchaser falls within the provisions of Article
5 of the Value Added Tax (Special Provisions) Order 1995. TCSL shall use
its reasonable endeavours to satisfy HM Customs & Excise that the sale and
purchase and the foregoing agreements are treated as a transfer of a going
concern ("TOGC") under that Article and accordingly neither as a supply of
goods nor a supply of services and the UK Purchaser undertakes to provide
such reasonable assistance and information to TCSL as may be reasonably
necessary for that purpose.
8.3 If HM Customs & Excise determine in writing that VAT is payable on all or
part of the consideration payable for the transfer of the Assets and the
Business (including the transaction pursuant to the IPR Licence Novation
Deed), from TCSL to the UK Purchaser pursuant to this Agreement and the
IPR Licence Novation Deed the UK Purchaser upon receipt from TCSL of a
copy of such written determination from HM Customs & Excise shall pay the
amount of any VAT which may properly be chargeable on such sale of the
Assets and the Business pursuant to this Agreement. If the ruling is
received and it arises as a consequence of any breach by the UK Purchaser
of the provisions of the Value Added Tax (Special Provisions) Order 1995,
the UK Purchaser shall pay the amount of any VAT to TCSL on the later of:
8.3.1 the date prior to the last Business Day on which TCSL is liable to
account to HM Customs & Excise for such VAT without incurring a
potential liability to penalties and interest; and
8.3.2 the date which is five Business Days after the delivery of a valid
tax invoice containing the particulars prescribed in Regulation 14
of the Value Added Tax (General) Regulations 1995 (as amended).
54
8.4 Where HM Customs & Excise determine that the sale and purchase of the
Assets and the Business (including the transaction pursuant to the IPR
Licence Novation Deed) pursuant to this Agreement was not a TOGC as a
result of a breach of the provisions of the Value Added Tax Act (Special
Provisions) Order 1995 by TCSL, the UK Purchaser shall pay the amount of
any VAT to TCSL no later than five working days after the date upon which
the UK Purchaser has received an equivalent amount by way of recovery of
input tax from HM Customs & Excise and/or by way of reduction in its
liability to output tax.
8.5 If, for any reason whatsoever, Nice or any Purchaser omits to take any
action required of it under the terms of this Agreement to ensure that all
or part of the transfer of the Business (including the transaction
pursuant to the IPR Licence Novation Deed) represents the transfer of a
going concern for the purposes of VATA or if Nice or the UK Purchaser
takes any action at any time which results in all or part of the transfer
being subject to VAT, Nice will pay to Thales upon demand the amount of
any related assessment for penalties and/or interest which may be issued
by Customs & Excise to TCSL under the provisions of the aforementioned act
as a consequence of its failure to account for VAT due upon the transfer.
8.6 Thales warrants that:
8.6.1 neither TCSL nor any relevant associate defined in paragraph 3 of
Schedule 10 VATA has made an election to waive exemption in relation
to any of the Business Properties pursuant to the provisions of
paragraph 2 of Schedule 10 VATA and neither it nor any relevant
associate has or will make such an election on or before Completion
other than pursuant to Clause 8.7. If, subsequently, it transpires
that TCSL or any relevant associate has made an election in relation
to any of the Business Properties (other than pursuant to Clause
8.7) pursuant to the provisions of paragraph 2 of Schedule 10
55
VATA on or before the earlier of payment of a deposit or Completion,
and as a consequence VAT becomes chargeable on any of the Business
Properties (other than the Hedge End Property pursuant to Clause
8.7), TCSL will deliver a valid tax invoice to the UK Purchaser
containing the particulars prescribed in Regulation 14 of the Value
Added Tax Regulations 1995. Upon receipt of the valid tax invoice
the UK Purchaser shall pay the amount of any VAT to TCSL or any
relevant associate no later than five working days after the date
upon which the UK Purchaser has received an equivalent amount by way
of recovery of input tax from HM Customs & Excise and/or by way of
reduction in its liability to output tax. TCSL or any relevant
associate will indemnify the UK Purchaser from any penalties,
surcharges or interest incurred by the UK Purchaser which arise as a
result of any amount of VAT that is subsequently determined to be
chargeable on any of the Business Properties (other than the Hedge
End Property pursuant to Clause 8.7) or the relevant part thereof;
8.6.2 recovery of input tax by TCSL in respect of any of the Assets is not
subject to the provisions contained in Part XIV or XV of the Value
Added Tax Regulations 1995 (SI 1995/2518); and
8.6.3 it is registered for VAT as a group registration in which TCSL is
part under registration number 198955680.
8.7 It is intended that Thales Properties Limited will prior to Completion
make an election to waive exemption in relation to the Hedge End Property
and will notify HM Customs & Excise of such election pursuant to
paragraphs
56
2 and 3 of Schedule 10 of VATA and has not and will not revoke such
election prior to Completion.
8.8 If after the UK Purchaser has paid an amount in respect of VAT pursuant to
this Agreement, HM Customs & Excise determine that such VAT was not
actually payable, then:
8.8.1 TCSL will repay such amount to the UK Purchaser no later than five
Business Days after the date of receipt of such written
determination from HM Customs & Excise; or
8.8.2 if TCSL has already accounted for such amount in respect of VAT at
the time it receives such determination, TCSL shall reclaim such
amount from HM Customs & Excise and repay such amount to the UK
Purchaser on receiving repayment of or obtaining credit in respect
thereof no later than five Business Days after the date of receipt
of the repayment or the obtaining of the credit.
8.9 TCSL hereby undertakes to deliver to the UK Purchaser at Completion all
VAT records relating to the Business referred to in Section 49 VATA 1994.
The UK Purchaser shall preserve such records for such period as may be
required by law, and shall allow TCSL on reasonable notice, to inspect and
take copies thereof.
9 COMPLETION
9.1 Time and Place of Completion
Completion of the sale and purchase of the Cliffstone Shares, Cliffstone
Note, the Business and Assets shall take place at the offices of the
57
Purchasers' Solicitors on the third Business Day following satisfaction in
accordance with this Agreement of the last outstanding Condition, as set
out in Clause 2, or at such other date and place as may be agreed in
writing between Thales and Nice.
9.2 Thales' Completion Obligations
At Completion Thales shall deliver or shall procure the delivery to the
Purchasers (or to the Purchasers' authorised representatives in the
relevant jurisdiction of the Companies or the Business) of:
9.2.1 certificates representing the Cliffstone Shares accompanied by all
instruments necessary to duly transfer all rights, title and
interest therein to the UK Purchaser, the Cliffstone Note duly
executed by Thales TRC Inc. in favour of the US Purchaser;
9.2.2 any waivers, consents, stock powers or other documents which may be
necessary to enable the UK Purchaser to be registered as the holder
of the Cliffstone Shares and the US Purchaser to be registered as
the holder of the Cliffstone Note;
9.2.3 Cliffstone's consent in regard to the Investor Rights Agreement
(referred to in the definition of the Cliffstone Documents) being
obtained in relation to the transfer of Cliffstone Shares and any
consent required by the Credit Agreement (referred to in the
Cliffstone Documents) for the transfer of the Credit Agreement;
58
9.2.4 (a) the IPR Licence Novation Deed duly executed as at Completion by
TCSL and Thales Electronics; and
(b) the IPR Assignment duly executed by Thales Electronics and
Thales assigning the Assigned IPR and the rights under the
Wordnet 3 Licence (subject to the obligations set out therein)
to Nice;
(c) an assignment (accompanied by written evidence of Cliffstone's
consent to such assignment incorporating the amendment
referred to below) or novation from TCSL in favour of Nice of
the Reseller Agreement together with either an amendment
deleting the non-compete obligation under clause 2.5 (final
sentence) of the Reseller Agreement with effect from the date
of assignment or novation of the Reseller Agreement to Nice or
an irrevocable waiver of such obligation in favour of Nice and
all members of the Purchaser's Group but otherwise on the same
terms as the existing Reseller Agreement (as disclosed under
the Disclosure Letter).
9.2.5 the Transitional Services Agreement duly executed as at Completion
by Thales and/or, the relevant Thales Affiliates;
9.2.6 a certified copy extract of the minutes of the meeting of the board
of directors of Thales TRC Inc authorising the
59
sale of the Cliffstone Shares and the Cliffstone Note, together
with a certified copy of the certificate of incorporation, by-laws
and other Charter documents of Thales TRC Inc.;
9.2.7 a certified copy of the minutes of the meeting of the boards of
directors of each of the Companies authorising if necessary the
sale of the Business and Assets in accordance with the terms of
this Agreement;
9.2.8 a certified copy extract of the minutes of the board of Thales
granting to ▇▇▇▇▇ ▇▇▇▇▇▇ as Chairman of Thales' Board of Directors
the power to bind Thales, which shall by reference to French
corporate law include the authority to enter into this Agreement;
9.2.9 the Assets which are capable of transfer by delivery with the
intent that title in such Assets shall pass by such delivery;
9.2.10 the financial statements more specifically described in Clause
10.6;
9.2.11 a letter from Thales to Nice confirming that the Companies have
complied in all material respects with their obligations under the
Transfer Regulations qualified only by (i) reference to the
information provided by Nice to Thales in respect of the post
Completion steps to be taken by the Purchasers in respect of the
Business; and (ii) the fact that the parties have agreed that no
steps towards fulfilment of the obligations of Thales or any of
the
60
Companies under the Transfer Regulations have been initiated prior
to the date of this Agreement;
9.2.12 a letter from Thales to Nice confirming that from the date of this
Agreement to Completion, the Thales Group and the Companies have
complied with the obligations and covenants set out at clauses
10.1, 10.2, 10.4 and 10.5 of this Agreement;
9.2.13 such other documents as may reasonably be required by the
Purchasers (on reasonable notice and in any event by no later than
twenty one days prior to Completion) to be produced at Completion
to complete (subject to obtaining relevant consents) the sale and
purchase of the Assets and the Business and vest title in such in
the Purchasers (or as Nice may direct) together with all deeds and
documents of title relating thereto;
9.2.14 the duly executed documents to be entered into by Thales and the
Companies and evidence of satisfaction of the other requirements
in relation to the sale of the US Business, the French Business
and the German Business as set out in Schedule 10; and
9.2.15 the Thales representation letter to PricewaterhouseCoopers in
relation to the Accounts Combination Statement in the agreed
terms.
9.3 Nice's Completion Obligations
61
9.3.1 On satisfaction of the obligations of Thales under Clause 9.2 Nice
shall pay on behalf of itself and the relevant Purchasers to Thales
on behalf of the Companies and Thales Electronics the Initial Cash
Consideration (apportioned in accordance with Schedule 2).
9.3.2 On Completion, payment by the Purchasers to Thales Electronics of
the Initial Cash Consideration in accordance with Clause 9.3.1 shall
be made to the following account:
Bank: Barclays Bank plc
Sort Code: GB 20-00-00
Account name: Thales Electronics Plc
Account No: ▇▇▇▇▇▇▇▇
Swift: ▇▇▇▇▇▇▇▇
the receipt of which by Thales shall be a good discharge to the
Purchasers.
9.3.3 On Completion, following satisfaction of the obligations of Thales
under clause 9.2, the Purchasers shall deliver to Thales the Share
Consideration as follows:
(a) certificates representing the Nice Shares comprised in the
Share Consideration, duly executed for issuance to Thales or
as Thales shall direct, subject to restrictions on transfer
consistent with this Agreement and applicable securities laws
and marked with legends regarding such restrictions; and
(b) any waivers, consents or other documents
62
which may be necessary to enable Thales to be registered as
the holder of the Nice Shares comprised in the Share
Consideration.
9.3.4 On Completion, following satisfaction of the obligations of Thales
under clause 9.2, the Purchasers shall deliver to Thales certified
copies of resolutions of the board of directors of each of the
Purchasers approving the contents of this Agreement and the
documents referred to in it and authorising the entry into it and of
the other documents referred to in it in accordance with the terms
of this Agreement.
9.3.5 On Completion, following satisfaction of the obligations of Thales
under clause 9.2, Nice shall procure that two persons nominated by
Thales are appointed to the board of directors of Nice in accordance
with paragraph 3 of Schedule 11.
9.3.6 On Completion Nice shall deliver to Thales a letter from Nice to
Thales confirming that from the date of this Agreement to
Completion, Nice and the Purchasers have complied with the
obligations and covenants set out at clauses 10.5 and 10.7 of this
Agreement.
9.3.7 On Completion Nice shall deliver to Thales the duly executed
documents to be entered into by the Purchasers in relation to the
purchase of the US Business, the French Business and the German
Business.
9.4 Interdependence of Obligations
63
9.4.1 The obligations of the parties in relation to Completion are
interdependent so that neither Thales nor the Purchasers shall be
obliged to proceed to complete if any of the obligations of the
other party set out in this Clause 9 are not satisfied and completed
simultaneously.
9.4.2 All actions at Completion take place simultaneously and no delivery
or payment is to be taken to have been made until all deliveries and
payments have been made.
9.5 Default in Completion
If without the written agreement of Nice and Thales Completion is not
effected by either of them, whether pursuant to Clause 9.4 or otherwise,
the following provisions shall apply:
9.5.1 either Thales or Nice may at any time thereafter serve on the other
of them notice in writing (a "Completion Notice") to effect
Completion within 10 Business Days, but notice shall be effective
only if the party serving it is at the time of the service either in
all respects ready, able and willing to proceed to effect Completion
in accordance with the notice or is not so ready, able and willing
to effect Completion only by reason of the default or omission of
the other party;
9.5.2 Upon service of a Completion Notice, the party on which the notice
is served shall effect Completion (or procure that Completion is
effected) within 10 Business Days after the date of service of the
notice (excluding the day of notice) and in respect of that time
shall be of the essence;
64
9.5.3 If the party on which the Completion Notice is served does not
comply with the terms of a Completion Notice, then the party which
has served the Completion Notice without prejudice to any of its
rights or remedies available under this Agreement or at law or in
equity, may:
(a) institute proceedings for specific performance; or
(b) rescind this Agreement and institute proceedings for damages;
9.5.4 the party serving a Completion Notice may at the request or with the
written consent of the other party (but shall not be required to)
extend the term of the notice for one or more specifically stated
periods of time and the term of the Completion Notice shall then be
deemed to expire on the last day of the extended period or periods
and it shall operate as though this Clause stipulated such extended
period(s) of notice in lieu of the period otherwise applicable, and
time shall be of the essence of this Agreement accordingly. An
extension may be given either before or after the expiry of the
period of the notice; and
9.5.5 nothing in this Clause shall preclude a party from suing for
specific performance without giving a Completion Notice.
9.6 If Completion does not take place on or before the date fixed for
Completion in accordance with Clause 9.1 (the "Original Completion Date")
due to
65
default by the Purchasers, the Purchasers shall, for the period from the
Original Completion Date to the date of the actual payment, pay to Thales
in addition to the sum then payable on account of the Initial Purchase
Price, interest at the rate of 2% above the base rate of Barclays Bank plc
on the unpaid balance of the sum then payable on account of the Initial
Purchase Price computed on a daily basis from and including the Original
Completion Date until and including the date of payment.
10 CONDUCT OF THE BUSINESS PRIOR TO COMPLETION
10.1 Pending Completion Thales shall procure that the Thales Group shall only
carry on the Business in the usual and ordinary course consistent with
prior practice so as to maintain the same as a going concern (using all
reasonable endeavours to protect and preserve the Business, the Assets,
customer and supplier relations, employee relations, and organisation),
and shall not make (or agree to make) any payment other than routine
payments in the ordinary and usual course of trading and shall ensure that
without the written consent of Nice (such consent not to be unreasonably
withheld or delayed taking into account the best commercial interests of
the Business as carried on at the date of this Agreement) and except as
expressly provided for in this Agreement:
10.1.1 there will be no material change, other than changes in the
ordinary day-to-day course of business consistent with prior
practice, in the assets or liabilities of the Business;
10.1.2 there will be no discontinuation or cessation of, or disposition
or other dealing with, any material part of the Business and/or
Assets;
66
10.1.3 the Companies will not make any expenditure of a capital nature:
(a) on any single item over (pound)10,000; or
(b) in aggregate over (pound)50,000.
10.1.4 there will be no creation, grant or issue or agreement to
create, grant or issue any Encumbrance (other than liens arising
by operation of law) over any of the Assets;
10.1.5 no contracts will be entered into which are abnormal or
unusually onerous in any material respect;
10.1.6 no contracts will be entered into the term of which extends more
than 12 months beyond the Completion Date;
10.1.7 no contracts will be entered into which have a value (measured
by cost or revenue) which could exceed(pound)100,000;
10.1.8 there will be no agreement to terminate or materially vary any
contract having an outstanding value in excess of (pound)50,000
and no agreement to terminate or vary any other contract other
than in the ordinary course of business;
10.1.9 no change will be made to the terms and conditions of employment
of the Employees which is material in aggregate and no material
change will be made to the terms and conditions of employment of
an individual Key Employee;
67
10.1.10 no new employee whose basic salary would exceed (pound)30,000
per annum will be employed and no Employee whose basic salary
exceeds (pound)30,000 per annum will be dismissed;
10.1.11 there will be no acquisition or disposal of any interest in any
real property or grant of any lease agreement, tenancy or
licence or third party right or other dealing in respect of any
of the Business Properties;
10.1.12 no material change will be made in the practices of ordering
supplies and raw materials, shipping finished goods, invoicing
customers and collecting debts to those adopted in relation to
the Business prior to execution of this Agreement;
10.1.13 no change will be made to the Instem Contracts;
10.1.14 no licence, sub-licence, assignment or other agreement in
respect of or affecting any of the Business IPR will be entered
into save for licences and/or sub-licences of Business IPR
entered into in the ordinary course of the Business;
10.1.15 no new contracts will be entered into in respect of Intellectual
Property Rights which would be material to the Business;
68
10.1.16 save for debt recovery actions which are instituted in
accordance with and carried out in a manner consistent with the
previous practice of the Companies in connection with the
Business, no litigation or arbitration in relation to the
Business or Assets will be instituted; and
10.1.17 no agreement, conditional or otherwise, to do any of the
foregoing shall be made.
10.2 Thales undertakes that it shall not enter into any negotiations or
discussions either directly or indirectly relating to the sale of the
Companies or the Business or any part thereof pending Completion or
provide any information relating to the Companies or the Business to any
third party for the purpose of enabling any party other than the
Purchasers to assess a potential acquisition of the Companies or the
Business or any part thereof.
10.3 In order to facilitate observance of the provisions of this Clause 10
the Purchasers nominate ▇▇▇▇ ▇▇▇▇▇▇▇▇ (telephone number: ▇▇▇ ▇▇▇▇ ▇▇▇▇)
(facsimile number 972 9775 3520) as the point of contact for the
Companies for the period pending Completion. All matters requiring the
consent of Nice pursuant to this Clause 10 shall be addressed to
▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇, cc: ▇▇▇▇.▇▇▇@▇▇▇▇.▇▇▇. For the avoidance of
doubt, Thales shall not be liable to the Purchasers under this Agreement
or otherwise, either for any action taken with the prior written
approval of Nice or for any action taken in the absence of a written
consent or written refusal of consent, provided such action is taken:
(a) more than 24 hours following a request for consent to the
relevant action has been submitted to ▇▇▇▇ ▇▇▇▇▇▇▇▇ and no
written objection or refusal to consent has been received by
Thales when the matter is both urgent in nature (other than as
69
a result of delay on the part of Thales or the Companies) and
indicated as such on the relevant request for consent; or
(b) in any other case, more than five Business Days following a
request for consent to the relevant action has been submitted to
▇▇▇▇ ▇▇▇▇▇▇▇▇ and no written objection or refusal to consent has
been received by Thales.
10.4 Between the date of this Agreement and Completion Thales shall and shall
procure that the Companies shall:
10.4.1 supply to the Purchasers all such information and documents in
relation to the Business as the Purchasers or their
representatives may from time to time reasonably request; and
10.4.2 maintain all insurance coverage in effect as disclosed to the
Purchasers; and
10.4.3 as soon as reasonably practicable give written notice to Nice of
the occurrence of any event which results or may result in any
of the Warranties being or becoming incorrect,
provided that nothing in this Clause 10 shall require Thales or the
Companies to disclose to Nice or any Purchaser information relating to
bids, tenders and/or proposals on which it is reasonably expected that
Nice or any Nice Affiliate may have an interest in a competitive bid,
tender or proposal.
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10.5 As from the date of this Agreement, Thales will give to nominated and
agreed representatives of the Purchasers such access to the Business
Properties and the Key Employees and to any other premises from which the
Business is carried on, managed or administered as the Purchasers may
reasonably request on reasonable notice and during normal business hours
and such information and assistance as may be necessary to enable the
Purchasers to monitor the Business, PROVIDED ALWAYS THAT the Purchasers
shall not communicate with employees (other than the Key Employees),
customers of or suppliers to the Business without the prior written
consent (such consent not to be unreasonably withheld) of Thales. Requests
made by Nice pursuant to this clause shall be addressed to ▇▇▇ ▇▇▇▇
(telephone: ▇▇▇▇▇ ▇▇▇▇▇▇) (email: ▇▇▇.▇▇▇▇@▇▇▇▇▇▇-▇▇.▇▇▇) whose consent
shall be taken to be the consent of Thales for the purpose of this Clause.
10.6 Between the date of this Agreement and Completion, Thales, at its own
expense, shall provide Nice with the audited Carved-Out Accounts (prepared
in accordance with US GAAP), audited and unaudited financial statements
relating to the Business consisting of (a) an audited statement of assets
acquired and liabilities assumed as of December 31, 2001 and 2000 and
audited statements of operations and changes in cash flow for each of the
two years ended December 31, 2001, and (b) unaudited statements of assets
acquired and liabilities assumed as of June 30, 2002 and June 30, 2001,
and unaudited statements of operations and changes in cash flow for the
six months ended June 30, 2002 and 2001, in such form as may be required
by Rule 3-05 or Article 11 of Regulation S-X promulgated under the United
States federal securities laws, in connection with the preparation and
filing of any registration statement or periodic report by Nice, including
reports with respect to the two fiscal years of the Business ended
December 31, 2001 of independent public accountants, and following the
Date of Completion Thales shall, at its own expense cause its auditors to
furnish, upon request by Nice, (a) any accountants' consents required to
effect one or more SEC filings of such statements within the three year
period following Completion, and (b) any "comfort letter", in form and
substance consistent
71
with those generally provided by US auditing firms, reasonably requested
by an underwriter of Nice securities in connection with a public offering
or Rule 144A offering of Nice securities being effected within the three
year period following Completion.
10.7 Between the date of this Agreement and the first to occur of (i)
Completion, or (ii) 30 November 2002, Nice shall not:
(a) complete any registered public offering of its Ordinary Shares or
ADRs in the US or Israeli public securities markets; or
(b) issue any of its Ordinary Shares or ADRs (or securities convertible
into or exercisable for its Ordinary Shares or ADRs) in an
unregistered private placement for cash in which the net proceeds to
Nice from the sale of such securities exceed $1,000,000 and in which
the purchasers of the securities obtain (through US SEC registration
or otherwise) securities which are freely transferable under the US
or Israeli securities laws within less than 12 months of Completion
(excluding any financing or business transactions, such as debt
financings or commercial arrangements, in which the issuance of such
securities for cash is not the primary purpose of the transaction).
10.8 Thales shall, at its own expense, procure that all Intellectual Property
Rights owned by TCS GmbH and TCSA are assigned to TCSL between the date of
this Agreement and Completion but in any event prior to the date on which
the Thales IPR Assignment is entered into.
10.9 Nice undertakes to Thales to put in place, with effect from Completion, an
incentive program for the Key Employees to incentivise the maximisation of
2002 Sales (the "Program"). The Program shall provide staged and
72
increasing incentives for the achievement of minimum 2002 Sales of
EUR75,000,000 and 2002 Sales reflecting the 2002 Sales ranges set out at
paragraph 3 of Schedule 21. It is agreed that the Program will limit the
incentives available to double the commissions to which the Key Employees
are currently entitled and that the Program should make it clear that no
commissions shall be paid on sales which are outside the current ordinary
course of the Business in terms of discounting of pricing and terms of
orders and contracts. Nice shall only pay commissions relating to revenue
included in the 2002 Sales Statement in respect of the period from
Completion to 31 December 2002. Details of such program shall be
communicated for approval to Thales by Nice within two (2) weeks from the
signature of this Agreement.
11 INDEMNITIES
11.1 Thales shall indemnify and keep indemnified and hold harmless the
Purchasers (and, to the extent relevant, any other member of the
Purchasers' Group) on demand in respect of (a) damages awarded by way of
final judgment; (b) compensation paid on final settlement; (c) reasonable
legal costs and expenses; (d) reasonable sums paid to third parties in
order to obtain a licence to avoid infringement; (e) reasonable sums
incurred in respect of, and other reasonable costs of, development work to
avoid infringement; and (f) any other reasonable costs incurred to
mitigate the effect of the infringement suffered or incurred by the
Purchasers (or any other member of the Purchasers' Group) arising from or
in connection with any claim that the Prism Product and any variation or
modification or subsequent version thereof save as set out below or its
supply, production, sale, licensing, distribution or use infringes any
third party Intellectual Property Rights, save as follows:
(a) to the extent that such infringement results from a modification or
variation or subsequent version of the Prism Product from the form
it was in at Completion or from any use or combination of the Prism
Product with
73
any other item of hardware, software or other item with which it was
not used or combined at the date of Completion and where no finding
of infringement would have occurred were it not for such
modification, variation, subsequent version, use or combination; or
(b) to the extent that any sums claimed are increased as a result of a
modification or variation or subsequent version of the Prism Product
from the form it was in at Completion or from any use or combination
of the Prism Product with any other item of hardware, software or
other item with which it was not used or combined at the date of
Completion; or
(c) to the extent that the infringement arises from a claim brought
against the Purchasers (or any other member of the Purchasers'
Group) by Cliffstone in relation to a breach or termination of the
Reseller Agreement by the Purchasers (or any member of the
Purchasers' Group) such breach occurring after Completion; and
(d) provided always that Nice (or any member of the Purchasers' Group)
has used all reasonable commercial endeavours to procure that
Cliffstone procures the right for Nice (or such other member of the
Purchasers' Group) to continue to market the Prism Product or modify
it so that it becomes non-infringing (as set out in the Reseller
Agreement).
11.2 Thales shall indemnify and keep indemnified and hold harmless the
Purchasers (and, to the extent relevant, any other member of the
Purchasers' Group) on demand in respect of (a) damages awarded by way of
final judgment; (b) compensation paid on final settlement; (c) reasonable
legal costs and expenses; (d) reasonable sums paid to third parties in
order to obtain a licence to avoid infringement; (e) reasonable sums
incurred in respect of, and other reasonable costs of, development work to
avoid
74
infringement; and (f) any other reasonable costs incurred to mitigate
the effect of the infringement suffered or incurred by the Purchasers
(or any other member of the Purchasers' Group) arising from or in
connection with:
11.2.1 any claim that any of the products or systems developed by or
for the Companies or used exclusively in the Business which
embody the use of the Business IPR and which are used in or
offered for sale or licensed by the Business at Completion (and
any variation, modification or subsequent version thereof save
as set out below) or their supply, production, sale, licensing,
distribution or use infringe any third party Intellectual
Property Rights; or
11.2.2 any breach of Warranty 8.1 as it relates to ownership of
Business IPR save as follows:
(a) to the extent such infringement results from a
modification or variation or subsequent version of the
products or system from the form they were in at
Completion or from any use or combination of them with
any other item of hardware, software or other item with
which they were not used or combined at the date of
Completion and where no finding of infringement would
have occurred were it not for such modification,
variation, subsequent version, use or combination; or
(b) to the extent that any sums claimed are increased as a
result of a modification or variation or subsequent
version of the
75
productsor systems from the form they were in at Completion or
from any use or combination of them with any other item of
hardware, software or other item with which they were not used
or combined at the date of Completion; or
(c) to the extent that the infringement arises as a result of the
fact that, as a result of the act or omission of the Purchaser
(or any other member of the Purchasers' Group), the Purchaser
(or any other member of the Purchasers' Group) no longer has,
after Completion, the benefit of any Intellectual Property
Rights which were licensed for use in the Business at
Completion, save where Thales or any member of the Thales
Group is in breach of Warranties 8.2, 8.3 or 8.6.
11.3 To the extent that the Purchasers fail to recover any losses, liabilities,
claims, demands, damages, costs and expenses (including legal expenses)
from Origin Data Realisation Limited ("Origin"), Thales shall indemnify
and keep indemnified and hold harmless the Purchasers (and, to the extent
relevant, any other member of the Purchasers' Group) on demand in respect
of (a) damages awarded by way of final judgment; (b) compensation paid on
final settlement; (c) reasonable legal costs and expenses; (d) reasonable
sums paid to third parties in order to obtain a licence to avoid
infringement; (e) reasonable sums incurred in respect of, and other
reasonable costs of, development work to avoid infringement; and (f) any
other reasonable costs incurred to mitigate the effect of the infringement
suffered or incurred by the Purchasers (or any other member of the
Purchasers' Group) arising from or in connection with any claim that the
"Wordnet 3" product developed under the Wordnet 3 Licence (in the current
version existing at the date of
76
Completion and any variation or modification or subsequent version thereof
save as set out below) or its supply, production, sale, licensing,
distribution or use, infringes any third party Intellectual Property
Rights save as follows:
(a) to the extent that such infringement results from a modification or
variation or subsequent version of the Wordnet 3 product from the
form it was in at Completion or from any use or combination of the
Wordnet 3 product with any other item of hardware, software or other
item with which it was not used or combined at the date of
Completion and would not have occurred were it not for such
modification, variation, subsequent version, use or combination; or
(b) to the extent that any sums claimed are increased as a result of a
modification or variation or subsequent version of the Wordnet 3
product from the form it was in at Completion or from any use or
combination of the Wordnet 3 product with any other item of
hardware, software or other item with which it was not used or
combined at the date of Completion; or
(c) to the extent that the infringement arises from a claim brought
against the Purchasers (or any member of the Purchasers' Group) by
Origin in relation to a breach or termination of the Wordnet 3
Licence; and
(d) provided always that Nice (or any other member of the Purchasers'
Group) has exhausted all contractual remedies which it has against
Origin under the terms of the Wordnet 3 Licence.
11.4 In respect of any claim that the Third Party Licensed IPR, in whole or in
part or in any combination, or any products, technology or processes which
utilise any of the Third Party Licensed IPR, infringe any third party
Intellectual Property Rights, to the extent that Thales currently has the
benefit of any indemnity, warranties or other equivalent protection from a
licensor under
77
any third party agreement relating to any Third Party Licensed IPR, Thales
subject as provided below shall indemnify and keep indemnified and hold
harmless the Purchasers (and, to the extent relevant, any other member of
the Purchasers' Group) on demand in respect of any losses, liabilities,
claims, demands, damages, costs and expenses (including legal expenses)
("Loss") arising from or in connection with such claims. The indemnity
given by Thales under this clause 11.4 shall only apply:
(a) where the third party agreement falls to be assigned or novated in
favour of the Purchaser (or any other member of the Purchasers'
Group) and such assignment or novation has not been perfected but
notwithstanding the foregoing the Purchaser (or any other member of
the Purchasers' Group) is entitled to exercise rights under such
third party agreement;
(b) to the extent that Thales is able to recover such Loss from the
licensor under the terms of its agreement with the licensor; and
(c) until such time as the benefit of such indemnity, warranties or
other equivalent protection has passed to the Purchasers (or any
other member of the Purchasers' Group) under this Agreement,
Thales shall only be obliged to pay such money to the Purchasers (or any
other member of the Purchasers' Group) under this Clause as and when it
receives money from the licensor. The Purchasers shall have the right to
conduct proceedings in respect of any such claim in the name of Thales,
subject to the Purchasers giving Thales an indemnity as to costs in
connection with such claim conducted by the Purchasers.
78
11.5 Thales agrees to indemnify and keep indemnified and hold harmless Nice,
the Purchasers or any member of the Purchaser's Group in respect of any
losses, liabilities, claims, demands, damages, costs and expenses
(including legal expenses) reasonably incurred arising from, or in
connection with, any sums claimed by SMRC (formerly Maroc-Aviation) of
Morocco ("SMRC") from TCSL in respect of any acts or omissions of TCSL in
respect of the contract between TCSL, SMRC and the Moroccan Ministry of
Transport for the supply of Wordnet with radar.
11.6 Thales shall indemnify and keep indemnified and hold harmless the
Purchasers (and, to the extent relevant, any other member of the
Purchaser's Group) on demand in respect of any losses, liabilities,
claims, demands, damages, costs and expenses (including legal expenses)
reasonably incurred arising from or in connection with any claim by
Natural MicroSystems Europe S.A, Natural MicroSystems Corporation ("NMS")
against the Purchasers arising from or related to any claim by NMS
covering the subject matter of those claims of NMS detailed in the
Disclosure Letter and relating to the Professional Services Agreement
dated 23 June 2000 for the development of DETs board and its associated
software and the Professional Services Agreement dated 8 March 2001.
11.7 Thales shall indemnify and keep indemnified and hold harmless the
Purchasers (and, to the extent relevant, any other member of the
Purchasers' group) on demand in respect of:
(a) any Taxation, losses, liabilities, claims, demands, damages, costs
and expenses (including legal expenses) arising from or in
connection with any breach of Warranty 17.17 (compliance with
applicable Taxation laws and regulations); and
(b) any Taxation in respect of the Business, the Assets or the Employees
arising in respect of:
(i) periods ending on or before Completion;
79
(ii) transactions effected or deemed to have been effected on or
before Completion;
(iii) income, profits or gains earned, accrued or received on or
before Completion; or
(iii) payments made on or before Completion together with any costs
and expenses (including legal expenses) incurred in enforcing
the indemnity contained in this clause 11.7.
12 RELEASE OF GUARANTEES
The Purchasers shall promptly after Completion and with effect from
Completion, procure the release of Thales, or any Affiliates of Thales (as
the case may be), from all of its or their respective obligations, duties
and liabilities whatsoever in respect of the Guarantees where the
liability guaranteed is an Assumed Liability and pending such release Nice
hereby undertakes that it will indemnify Thales and/or any relevant
Affiliate of Thales and keep it (or them) indemnified against all damages,
costs, expenses or other liabilities suffered or incurred by it (or them)
in relation to any of the Guarantees where the liability guaranteed is an
Assumed Liability.
13 COMPLETION BALANCE SHEET
13.1 On the Completion Date or at such earlier time as agreed between Nice and
Thales, Thales or its representatives will pull and assemble the Inventory
for counting. Nice and/or its representatives will conduct a comprehensive
physical stock take of the Inventory and Thales and/or its representatives
will sign off on each count made by Nice. Nice shall produce a report
setting out the counted number of each Inventory item. Such report will
also set out the aggregate value of the Inventory which shall be included
in the Completion Balance Sheet prepared by the Purchasers' management and
audited by the
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Auditors pursuant to clause 13.2 below. If Thales and Nice are unable to
agree upon the physical stock take within 10 Business Days of Completion,
the matter shall be submitted for adjudication by the Independent
Accountants.
13.2 Subject to determination of the stock take pursuant to Clause 13.1, Nice
shall procure that the Purchasers' management shall, as promptly as
practicable, and in any event within 60 (sixty) days following the
determination of the physical stock take ("the First Period"), prepare and
deliver to Thales and to Nice a draft of the Completion Balance Sheet
together with a draft certificate (the "Auditors' Certificate") in the
form set out in Part E of Schedule 9 addressed to Thales and to Nice
stating that the Completion Balance Sheet (from which the NAV Statement
shall be determined) has been prepared in accordance with this Agreement.
13.3 Thales and Nice shall attempt to agree the draft Completion Balance Sheet
as soon as possible and in any event within 30 (thirty) days (hereinafter
the "Second Period") after receipt of the same under Clause 13.2.
13.4 During the Second Period, Thales' accountants shall be entitled to call
for and inspect such documents as they shall reasonably consider
necessary.
13.5 Unless within the Second Period Thales notifies Nice in writing (setting
out the adjustments, if any, which it proposes should be made to the draft
Completion Balance Sheet) the draft Completion Balance Sheet shall be
deemed to be agreed and shall, save in the event of fraud or manifest
error, become final and binding on Thales and Nice for the purposes of
this Agreement.
13.6 If by the end of the Second Period the draft Completion Balance Sheet has
not been agreed, Thales shall meet with Nice so as to resolve in good
faith
81
any differences within the following 7 (seven) days (the "7 Day Period").
After the expiry of the 7 Day Period either Nice or Thales may refer the
matters in dispute to the Independent Accountants. The Independent
Accountants shall agree, amend or prepare the Completion Balance Sheet and
determine the Net Asset Value but always in accordance with the Accounting
Principles insofar as not otherwise agreed in accordance with the
provisions of this Clause 13. The Independent Accountants shall be
entitled to call for and inspect such documents as they shall reasonably
consider necessary. The determination prepared by the Independent
Accountants shall be delivered to Thales and Nice within 30 days of such
submission to the Independent Accountants and shall (save in respect of
manifest error) be final and binding on Thales and Nice for the purposes
of this Agreement and the Independent Accountants shall act as experts and
not as arbitrators. In acting under this clause 13.6, the Independent
Accountants shall be entitled to the privileges and immunities of
arbitrators. Thales and Nice shall act in good faith towards each other
regarding such application and in particular shall endeavour with
reasonable expedition to settle the terms of reference of the Independent
Accountants.
13.7 Thales shall pay the charges of Thales' Accountants and Nice shall pay the
charges of the Auditors in respect of work carried out pursuant to the
provisions of this Clause and the charges of the Independent Accountants
(if appointed) shall be apportioned between Thales and Nice in such
proportions as the Independent Accountants may determine in the light of
the merits of the objections taken by (or on behalf of) Thales to the
physical stock take pursuant to Clause 13.1 or to the Completion Balance
Sheet in the form despatched pursuant to Clause 13.2 as the case may be.
13.8 Thales and Nice shall respectively procure, so far as they are able, that
the Companies, the Purchasers, the Auditors and Thales' Accountants
respectively shall give each other and to the Independent Accountants
access to all of their working papers or other information used as a basis
for preparing the Completion Balance Sheet and access to personnel as may
82
reasonably be required for the purposes of considering and agreeing the
Completion Balance Sheet.
13.9 Upon the Completion Balance Sheet having become final and binding pursuant
to this Clause 13 (save in respect of fraud or manifest error), Nice shall
procure that the Auditors' Certificate is finalised and signed and no
right of appeal shall be competent with regard thereto, and neither Thales
nor Nice nor the Independent Accountants shall be entitled to appeal or
state a case either on a point of law or fact with regard thereto, to any
court.
13.10 If the Completion Net Asset Value is less than the NAV Target, the amount
of the consideration shall be reduced by an amount equal to the shortfall
and Thales shall pay to Nice the amount of any shortfall. If the
Completion Net Asset Value is more than the NAV Target then the
consideration will not be subject to any adjustment. Any such payment
shall be made on or before the fifth Business Day after the date of
determination or agreement of the Completion Balance Sheet and shall be
made without set-off, counterclaim, withholding or other deduction (save
as required by law). If such payment is not made on or before the fifth
Business Day after the date of determination or agreement of the
Completion Balance Sheet, Thales shall, for the period from such date to
the date of actual payment, pay to Nice in addition to the sum then
payable, interest at the rate of 2% above the base rate of Barclays Bank
plc computed on a daily basis until and including the date of payment.
Payment shall be made in US Dollars.
13.11 Nice will prepare and submit to Thales and/or its representative not later
than sixty (60) days from Completion, drafts (in substantially complete
form so far as it is able based on the Records) of the Companies'
Statutory Accounts and tax returns for the period from 1 January 2002 up
to the Completion Date (the "Draft Documents"). Nice will co-operate with
Thales and/or its auditors in respect to the audit of the Companies'
Statutory Accounts and tax return and shall provide appropriate assistance
and access to the accounting
83
records comprised in the Records acquired by the UK Purchaser under this
Agreement. Thales shall be responsible for the finalisation of the Draft
Documentation and the submission of final documents to the relevant
authorities.
13.12 In the event of manifest error in the preparation of the Accounts
Combination Statement, the NAV Target shall be adjusted to the extent of
such manifest error for the purposes of this Agreement.
14 EMPLOYMENT
14.1 UK Employment Matters
14.1.1 Thales and the Purchasers acknowledge that:
(a) the transfer of the UK Business pursuant to this
Agreement constitutes a relevant transfer of the whole
of the undertaking of the UK Business for the purposes
of the Transfer Regulations; and
(b) the UK Employees shall be transferred to the UK
Purchaser on the Completion Date subject to the right of
any of the UK Employees to object to their transfer
pursuant to the Transfer Regulations.
14.1.2 Thales shall be liable for, and shall indemnify and keep
indemnified the Purchasers in respect of all and any claims,
proceedings, demands, awards, losses, damages, costs,
liabilities, interest or expenses (including
84
reasonable legal expenses) (the "Employment Liabilities") which
may be suffered or incurred by the Purchasers in connection with
the employment or dismissal of any person who is not an
Employee.
14.1.3 Thales shall procure the performance and discharge of all
contractual, statutory and other obligations in respect of all
of the UK Employees up to Completion and Thales shall indemnify
the Purchasers against any Employment Liabilities arising from
any act or omission of Thales and the Companies or failure by
Thales and the Companies to discharge any obligation relating to
any of the UK Employees prior to Completion (excluding any
liability covered by the indemnity under Clause 14.1.5).
14.1.4 The Purchasers shall procure the performance and discharge of
all contractual and statutory and other obligations in respect
of all of the UK Employees after Completion and the Purchasers
shall indemnify Thales against any Employment Liabilities
arising from any act or omission of the Purchasers or the
failure of the Purchasers to discharge any obligation relating
to any of the UK Employees after Completion.
14.1.5 Thales agrees to indemnify the Purchasers against any Employment
Liabilities it may incur if any UK Employee or his or her
employee representative brings a claim arising from a failure by
Thales and its Affiliates to carry out their duty to inform and
consult under Regulation 10 of the Transfer Regulations provided
that such indemnity shall not apply to the extent that such
failure arises from the failure of the Purchasers to provide
Thales with any
85
necessary information concerning any measures (within the
meaning of Regulation 10 of the Transfer Regulations) that the
Purchaser intends to take in relation to any UK Employee, and
provided further that such indemnity shall only apply in respect
of 50% of any such Employment Liabilities to the extent that
such failure arises from either:
(i) the failure of Thales and/or any Thales affiliate to
commence compliance with the duty to inform and consult
under Regulation 10 of the Transfer Regulations prior to
the date of this Agreement; or
(ii) the fact that Thales and/or any Thales Affiliate only
commences compliance with the duty to inform and consult
under Regulation 10 of the Transfer Regulations after
the date of this Agreement.
14.1.6 Nice agrees to indemnify Thales against any Employment
Liabilities if and to the extent that the same arise from the
failure of the Purchasers to provide Thales with any necessary
information concerning any measures (within the meaning of
Regulation 10 of the Transfer Regulations) that the Purchaser
intends to take in relation to any UK Employee, and Nice agrees
to indemnify Thales against 50% of any Employment Liabilities if
and to the extent that the same arise from either:
(i) the failure of Thales and/or any Thales affiliate to
commence compliance with the duty to inform and consult
under Regulation 10 of the Transfer
86
Regulations prior to the date of this Agreement; or
(ii) the fact that Thales and/or any Thales Affiliate only
commences compliance with the duty to inform and consult
under Regulation 10 of the Transfer Regulations after
the date of this Agreement.
14.2 Non-UK Employment Matters
14.2.1 Thales and the Purchasers acknowledge that:
(a) the transfer of the Non-UK Business pursuant to this
Agreement constitutes a transfer of an undertaking or
business of the Non-UK Business for the purposes of
European Council Directives 77/187/EEC and 2001/23/EC to
the extent that they have been or are to be implemented
by legislation in the European countries in which the
Non-UK Business operates ("European Transfer
Legislation"); and
(b) the Non-UK Employees shall be transferred to the
Purchasers on Completion subject to the right of any of
the Non-UK Employees to object to their transfer
pursuant to the European Transfer Legislation or other
relevant legislation in the country in which the Non-UK
business operates.
87
14.2.2 Thales shall be liable for and shall indemnify and keep
indemnified the Purchasers in respect of, all and any claims,
proceedings, demands, awards, losses, damages, costs,
liabilities, interest or expenses (including reasonable legal
expenses) (the "Employment Liabilities") which may be suffered
or incurred by the Purchasers in connection with the employment
or dismissal of any person who is not an Employee.
14.2.3 The Purchasers shall offer employment on the basis of employment
at will to all US Employees (the "Employment Offers"). The
Employment Offers shall provide for the same base salary to
which the US Employees are currently entitled as specified in
the Disclosure Documents, and shall also contain the offer of
additional benefits comprising the benefits offered by Nice to
its employees in the United States.
14.2.4 In the event that any of the US Employees decline an Employment
Offer, such US Employee shall not be an Employee.
14.2.5 Thales shall procure the performance and discharge of all
contractual, statutory and other obligations in respect of all
of the Non-UK Employees up to Completion and Thales and the
Companies shall indemnify the Purchasers against any Employment
Liabilities arising from any act or omission of Thales and the
Companies or failure by Thales and the Companies to discharge
any obligation relating to any of the Non-UK Employees on or
88
prior to Completion (excluding any liability covered by the
indemnity under Clause 14.2.7).
14.2.6 The Purchasers shall procure the performance and discharge of
all contractual and statutory and other obligations in respect
of all of the Non-UK Employees after Completion and the
Purchasers shall indemnify Thales against any Employment
Liabilities arising from any act or omission of the Purchasers
or the failure of the Purchasers to discharge any obligation
relating to any of the Non-UK Employees after Completion.
14.2.7 Thales agrees to indemnify the Purchasers against any Employment
Liabilities it may incur if any Non-UK Employee or his or her
employee representative brings a claim arising from a failure by
Thales and/or its Affiliates to carry out their duty to inform
and consult under European Transfer Legislation or other
relevant legislation in any other country in which the Business
operates provided that such indemnity shall not apply to the
extent that such failure arises from the failure of the
Purchasers to provide Thales with any necessary information
concerning any measures that the Purchaser intends to take in
relation to any Non-UK Employee, and provided further that such
indemnity shall only apply in respect of 50% of any such
Employment Liabilities to the extent that such failure arises
from either:
(i) the failure of Thales and/or any Thales affiliate to
commence compliance with the duty to inform and consult
under the European Transfer Legislation applicable to
the relevant Non-UK Employee prior to the date of this
Agreement; or
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(ii) the fact that Thales and/or any Thales Affiliate only
commences compliance with the duty to inform and consult
under the European Transfer Legislation applicable to
the relevant Non-UK Employee after the date of this
Agreement.
14.2.8 Nice agrees to indemnify Thales against any Employment
Liabilities if and to the extent that the same arise from the
failure of the Purchasers to provide Thales with any necessary
information concerning any measures (within the meaning of
applicable European Transfer Legislation) that the Purchaser
intends to take in relation to any non- UK Employee, and Nice
agrees to indemnify Thales against 50% of any Employment
Liabilities if and to the extent that the same arise from
either:
(i) the failure of Thales and/or any Thales affiliate to
commence compliance with the duty to inform and consult
under applicable European Transfer Legislation prior to
the date of this Agreement; or
(ii) the fact that Thales and/or any Thales Affiliate only
commences compliance with the duty to inform and consult
under applicable European Transfer Legislation after the
date of this Agreement.
14.3 Surplus Employees
14.3.1 Nice shall terminate the employment of the Surplus Employees
after Completion in accordance with the provisions of Clauses
14.3.2, 14.3.3 and 14.3.4.
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14.3.2 Nice agrees that the relevant Purchaser shall consult with
Thales concerning the termination of the employment of the
Surplus Employees after Completion and shall take such steps as
are directed by Thales in writing provided that nothing in this
Clause 14 shall require any of the Purchasers to take any action
which is unlawful.
14.3.3 Nice agrees that it shall not make any offer of settlement or
compromise to any of the Surplus Employees in relation to the
termination of their employment without the prior consent of
Thales.
14.3.4 In the event that any court, tribunal or any other official body
makes any decision, ruling or judgement that the termination of
employment of any of the Surplus Employees shall be set aside or
invalidated, or it is otherwise ruled that any such Surplus
Employee shall be retained by Nice or any of the Purchasers then
the provisions of Clause 14.3.5 shall apply in relation to the
continued employment of such Surplus Employee(s).
14.3.5 Thales agrees to indemnify and keep indemnified the Purchasers
against any and all Employment Liabilities in relation to the
employment of all the Surplus Employees ("Employment Costs") and
all and any Employment Liabilities in relation to terminating
the employment of all the Surplus Employees ("Termination
Costs"), which may be suffered or incurred by the Purchasers as
a result of employing and/or terminating the employment of the
Surplus Employees. Employment Costs include but are not limited
to all salaries or other contractual remuneration or payments
(excluding bonuses and commissions payable on post Completion
sales or performance which shall be borne by Nice) required to
be paid to the Surplus Employees in respect of their employment
and all and any costs or expenses incurred
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by the Purchasers in respect of the Surplus Employees including
but not limited to providing benefits to the Surplus Employees
and any social security contributions or income tax payments
whether incurred before or after the date that the employment of
the last of the Surplus Employees terminates. For the avoidance
of doubt Termination Costs shall include, but not be limited to
all and any payments or claims made to or by the Surplus
Employees in respect of the termination of their employment,
including any payment ordered by a competent court or tribunal
including any award, fine or penalty. In respect of this Clause
14.3.5, Employment Liabilities shall include all legal expenses
incurred at Thales' direction or otherwise reasonably and
necessarily incurred by Nice.
14.3.6 Thales and Nice shall agree before Completion an estimated
amount of the total Termination Costs (the "Estimated Costs")
and Thales shall pay to Nice 20% of the Estimated Costs on
Completion.
14.3.7 Thales will pay to the French Purchaser or the German Purchaser
(whichever is relevant) no later than 1 month before the date on
which the Surplus Employees' salaries are due each month (the
first such payment to be made on Completion), an amount equal
to:
(a) all salaries or other contractual remuneration or
payments (excluding bonuses and commissions payable on
post Completion sales or performance which shall be
borne by Nice) due to the Surplus Employees in respect
of their employment for that month, together with any
other social security contributions or income tax
payments due; and
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(b) an administration charge which shall be equal to 3% of
the monthly Employment Costs of the Surplus Employees.
Any payment not made to the relevant Purchaser on the
due date shall incur interest at a rate of 2% above the
base rate of Barclays Bank plc computed on a daily basis
until and including the date of payment.
14.3.8 Thales will pay to Nice upon demand any other amounts becoming
due under Clause 14.3.5. Any payment not made to Nice within 7
days of demand shall incur interest at a rate of 2% above the
base rate of Barclays Bank plc computed on a daily basis until
and including the date of payment.
14.4 Any claim under the indemnities contained in this Clause 14 shall be
dealt with as a "Third Party Claim" in accordance with Clause 22.17 to
22.21.
15 DEBTS AND ACCOUNTS RECEIVABLE
15.1 Thales agrees that it will if so requested by Nice use or procure that
the Companies or other members of the Thales Group shall use all
reasonable endeavours (at the expense of Nice) to assist in the
collection of the Accounts Receivable.
15.2 Thales will procure that the Purchasers shall have access to view the
bank accounts of the Companies into which Accounts Receivable are paid
for a period of 15 months following Completion. Thales will, and will
procure that the Companies and other members of the Thales Group will,
hold any payments in respect of the Accounts Receivable received by any
member of the Thales Group upon trust for the Purchasers and will
account to Nice for the same as soon as reasonably practicable and in
any event within 7 days of demand by way of a telegraphic transfer to
the following account:
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Bank: Mellon Bank, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA #: ▇▇▇-▇▇▇-▇▇▇
Credit To: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Account #: ▇▇▇▇▇▇▇
For Further Credit to: Nice
Account #: 879-07L19
Swift: Melnus 3P
If Thales fails to pay to Nice an amount in respect of Accounts Receivable
within 7 days of demand then Thales shall pay interest at the rate of 2%
above the base rate of Barclays Bank plc on such sum until the date of
actual payment.
15.3 The Purchasers shall take such steps to collect the Accounts Receivable as
is consistent with the prior practice of the Companies in connection with
the Business provided that this obligation shall not require the
Purchasers to institute or threaten any proceedings to collect the
Accounts Receivable or to cease doing business with the relevant customer
or to take any step which is not at the date of this Agreement a step or
proceeding that would not be taken by the Companies in the collection of
debts of the Business as part of the normal routine of the Business in the
collection of debts of the Business.
15.4 Prior to the date which is 15 (fifteen) months after the Completion Date,
Thales shall not itself take any step to collect any of the Accounts
Receivable (unless requested by Nice in accordance with Clause 15.1), and
shall not do anything to hinder their collection by the Purchasers.
15.5 If Thales should receive any communication or payment in respect of any
Accounts Receivable, it shall as soon as reasonably practicable give a
copy of such communication or payment or details in writing to the
Purchasers.
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15.6 If prior to the date which is 15 (fifteen) months after Completion the
Purchasers shall, without the written consent of Thales, settle,
compromise or release any of the Accounts Receivable then the original
total amount of the relevant Accounts Receivable settled, compromised or
released shall not be capable of reassignment to Thales pursuant to Clause
15.9.
15.7 The Purchasers will, from the date of Completion until the first
anniversary thereof provide to Thales within 20 days of the end of each
calendar month a statement showing the Accounts Receivable received in the
previous month and the balance of Accounts Receivable still to be
received.
15.8 If on or after 15 (fifteen) months from the Completion Date, the Purchaser
shall have failed to recover any Account Receivable, provided that:
(a) the Purchasers are not in breach of their obligations in Clause 15.3
and have provided a description of the steps taken pursuant to such
obligations, including any copy correspondence relating to the
collection of the relevant Accounts Receivable; and
(b) the Purchasers have not settled, compromised or agreed to release
such Account Receivable (whether in whole or in part) without the
written consent of Thales,
then the provisions in Clause 15.9 shall take effect.
15.9 Subject to the provisions of Clause 15.8:
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15.9.1 the relevant Purchaser shall be entitled to assign all its rights
and interest in such Account Receivable to Thales (or as it may
direct); and
15.9.2 upon such assignment:
(a) Thales shall pay or procure the payment in full to the
relevant Purchaser of the Account Receivable to the extent not
previously received by the Purchaser; and
(b) the Purchaser shall provide Thales with a statement in respect
of each Account Receivable assigned pursuant to clause 15.9.1
setting out the action taken by the Purchaser in the
collection of the Accounts Receivable, together with any
relevant correspondence relating thereto; and
15.9.3 following payment under Clause 15.9.2 Thales shall be free to take
such steps as it shall deem appropriate to collect the Account
Receivable.
15.10 In the event that any Account Receivable becomes unrecoverable due to
either:
(a) the insolvency of the debtor; or
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(b) where any part or all of the Account Receivable is disputed by the
debtor and where Thales acknowledges that such Account Receivable is
incorrect in whole or part or otherwise not a valid debt
outstanding;
then the provisions of clause 15.9 shall apply to the Account Receivable
(or the unpaid amount) regardless of whether 15 months has elapsed since
the date of Completion.
15.11 The Purchasers agree that they will, if so requested by Thales, use all
reasonable endeavours (at the expense of Thales) to assist Thales in the
collection of any Account Receivable re-assigned pursuant to Clause 15.9.
The Purchasers will hold any payment in respect of any Account Receivable
re-assigned pursuant to Clause 15.9 upon trust for Thales and will account
to Thales for the same as soon as reasonably practicable and in any event,
within 7 days of demand.
16 INVENTORY
16.1 Following the expiry of the year ending 31 December 2003, the Purchasers
shall procure that the auditors of the Purchasers shall calculate the
value of the Inventory included in the Completion Balance Sheet unsold at
31 December 2003 (if any) ("the Unsold Inventory") by reference to its
book value in the Completion Balance Sheet (the "Inventory Shortfall
Amount") and the Purchasers shall serve upon Thales a notice (the
"Inventory Shortfall Notice") of the amount of the Inventory Shortfall
Amount and details of the calculation of such amount. Upon receipt of the
Inventory Shortfall Notice, Thales shall have 10 days in which to inspect
the relevant Inventory and to either agree the Inventory Shortfall Amount
or serve a notice (a "Notice of Objections") on the Purchasers giving
reasons why the amount is disputed.
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If no Notice of Objection is served in the 14 day period referred to above
then Thales shall be deemed to have agreed the Inventory Shortfall Amount.
If the Inventory Shortfall Amount is not agreed within 14 days of service
of the Notice of Objections, then either party may appoint an independent
firm of accountants (the "Independent Firm") to determine the amount of
the Inventory Shortfall Amount. The Independent Firm shall act as experts
and not as arbitrators. The determination of the Independent Firm shall be
binding and final save in respect of manifest error. The costs of the
Independent Firm shall be shared equally between Thales and the
Purchasers.
16.2 Following agreement or determination of the Inventory Shortfall Amount
Nice shall serve upon Thales a notice confirming that Unsold Inventory is
available for collection upon reasonable notice with details of the
location of the Unsold Inventory.
16.3 Upon the earlier of the collection of the Unsold Inventory and 10 Business
Days from the date of the notice referred to in Clause 16.2 above Thales
shall pay to the Purchasers such Inventory Shortfall Amount.
16.4 The Purchasers agree that Inventory held at Completion shall be
incorporated into any products sold prior to 31 December 2003 which
incorporate categories of Inventory held at Completion unless all items of
the relevant category of Inventory have been exhausted.
17 WARRANTY WORK AND ADDITIONAL SERVICES
17.1 Thales agrees to indemnify and keep indemnified the Purchasers on demand
from time to time in respect of the cost to the Purchasers of performing
warranty work under Contracts where the sales under such Contracts were
recognised prior to the Completion Date to the extent that such
expenditure
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in aggregate exceeds the reserve for such amounts provided in the
Completion Balance Sheet. For the purposes of this clause the cost to the
Purchasers of performing warranty work, subject to the provisions of
Clause 17.4, shall be the invoiced cost where the work is performed by a
third party contractor and where the work is performed by a Purchaser's
own labour force, at an equivalent cost as the relevant Purchaser could
have had the work performed by a third party contractor.
17.2 Where sales are recognised prior to Completion under any Contract where
the customer has the right under the Contract to receive additional
services or products ("Additional Services"), the Purchasers hereby agree
to perform the Additional Services demanded by the customer provided
always that:
(a) where the customer has an obligation to pay for the Additional
Services, the Purchasers shall be directly entitled to such payment;
and
(b) where the existing Contract does not provide for further payment by
the customer and no specific provision or inadequate provision has
been made in the Completion Balance Sheet, Thales shall pay the cost
of such Additional Services (or the amount not provided for, as the
case may be) to the Purchasers. In such case, the cost to the
Purchasers of performing the Additional Services, subject to the
provisions of Clause 17.4, shall be the invoiced cost where the work
is performed by a third party contractor and where the work is
performed by a Purchaser's own labour force, at an equivalent cost
as the relevant Purchaser could have had the work performed by a
third party contractor.
17.3 Thales will, and will procure that the Companies and other members of the
Thales Group will, hold any payments in respect of the Additional Services
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made to them upon trust for the Purchasers and will account to the
Purchasers for the same on demand.
17.4 In performing any warranty work which is governed by Clause 17.1 or
Additional Services which are governed by Clause 17.2 the work carried out
and the standard of such work shall be such work at such standard as is
reasonably necessary to comply with the obligations provided for by the
relevant Contract and the cost of the performance of the relevant work,
whether carried out by a Purchaser's own workforce or a third party
contractor, shall be calculated accordingly.
18 INSTEM Manufacturing Agreement
18.1 For the avoidance of doubt, Nice or its nominee assumes the rights and
obligations of TCSL under the Instem Contracts.
18.2 "Manufacturing Management Charge" and "Contract Year" shall have the
meanings given in the Instem Manufacturing Agreement.
18.3 Thales shall indemnify and keep indemnified the Purchasers on demand
following the end of the relevant Contract Year in respect of any
shortfall payments and applicable Manufacturing Management Charge which
fall to be made pursuant to Clause 14 of the Instem Manufacturing
Agreement as follows:
(a) 100% of the shortfall together with the Manufacturing Management
Charge applicable to that shortfall in the first Contract Year as
provided in Clause 14.2 of the Instem Manufacturing Agreement; and
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(b) 50% of the shortfall in the second Contract Year as provided in
Clause 14.3 of the Instem Manufacturing Agreement.
18.4 Nice shall procure the delivery to Thales at the request of Thales of all
information reasonably necessary to verify the amount of any payment due
to be paid by Thales under Clause 18.3.
19 ACTION AFTER COMPLETION
19.1 Thales will procure that all notices, correspondence, information, orders
or enquiries relating to the Business which are received by any member of
the Thales Group on or after Completion shall be passed to Nice as soon as
is reasonably practicable.
19.2 Thales will procure that all monies or other items which are received by
the Thales Group on or after Completion in connection with the Business
shall as soon as reasonably practicable and in any event within 7 days be
passed or paid to Nice or such member of Nice Group as Nice may direct
and, pending such passing or payment, shall be held on trust for Nice or
such member. Nice will procure that all monies or other items which are
received by any member of Nice Group on or after Completion in connection
with any business of any member of the Thales Group which is not acquired
pursuant to this Agreement shall, as soon as reasonably practicable and in
any event within 7 days, be passed or paid to Thales or such member of the
Thales Group as Thales may direct and, pending such passing or payment,
shall be held on trust for Thales or such member.
19.3 The Purchasers shall following Completion retain in good order and for a
period not less than that for which Thales retains any liability under
this
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Agreement, all of the books, accounts, records and returns of the Business
in respect of the period prior to the Completion Date.
19.4 The Purchasers shall, following Completion, provide to Thales or any
member of the Thales Group in response to reasonable request for such
information from Thales:
(a) all reasonable access during business hours on reasonable notice to
examine (and if necessary to take copies of) such books, accounts,
records and returns as are referred to in Clause 19.3; and
(b) all reasonable access to Nice's employees as it may reasonably
request (and at Thales' cost) to enable Thales to deal with any
correspondence, telephone calls, queries or requests from third
parties including, without limitation, any governmental or
regulatory authority and any person who was a customer or supplier
of the Business prior to the Completion Date; and
(c) such other information and assistance as may reasonably be required
by Thales,
in order for Thales of any Thales Affiliate to prosecute, defend of
otherwise deal with any liability comprised in the Excluded Liabilities.
19.5 Save insofar as such costs arise in relation to the Purchaser recording
title to any Business IPR at any relevant registry, Thales shall at its
own cost, from time to time on reasonable notice, do or procure the doing
of all such acts and/or execute or procure the execution of all such
documents in a form required and necessary for giving full effect to this
Agreement and securing to the Purchasers the full benefit of the Business
and Assets and the other
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rights, powers and remedies conferred upon the Purchasers in this
Agreement.
19.6 In respect of any Shared Assets, Thales shall use its reasonable
endeavours to secure for the Purchasers, for the same period as any member
of the Thales Group has such benefit and/or use, the continued benefit
and/or use of such Shared Assets in the same manner as the Shared Assets
were used in the Business in the 12 month period prior to Completion and
Thales shall procure that the cost to the Purchasers for the continued
benefit or entitlement to such Shared Assets shall be no greater than the
historical cost to the Business of such benefits or entitlements subject
to a reasonable inflation allowance.
19.7 For the avoidance of doubt and without prejudice to clause 19.6, Thales
shall grant or procure the grant to the Purchasers of the right and
licence to the full benefit and use (as enjoyed by the Business prior to
Completion) of all and any Intellectual Property Rights (other than
Excluded Trade Marks) which are Shared Assets and which are owned by
Thales or any member of the Thales Group, on a non-exclusive perpetual,
irrevocable, royalty free, fully paid up basis for use exclusively in the
business being acquired hereunder, except to the extent that such licence
cannot lawfully be granted under any statutes or regulations in which case
such licence shall be granted to the Purchasers on the most favourable
lawful terms.
19.8 Exchange of Nice Shares for Nice ADRs
19.8.1 Upon effectiveness of the Shelf Registration Statement (as
defined in the Registration Rights Agreement), Nice shall
remove, or cause to be removed, from the certificates
representing the Nice Shares comprising the Share Consideration
the restrictive legend relating to the Securities Act of 1933,
as amended, and shall use commercially reasonable efforts to
ensure that such Nice
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Shares are thereafter eligible for deposit under the Deposit
Agreement dated as of January 24, 1996, as amended and restated
as of July 22, 1997, by and among Nice, The Bank of New York, as
Depositary thereunder, and the owners and holders of Nice ADRs
thereunder (the "ADR Facility"), in exchange for Nice ADRs
representing such Nice Shares. Notwithstanding the foregoing,
the Nice Shares comprising the Share Consideration and any Nice
ADRs issued in exchange therefore shall continue to be subject
to restrictions on transfer consistent with this Agreement and
Schedule 11 attached hereto and the standstill agreement
referred to therein.
19.8.2 In order to ensure compliance with the contractual restrictions
on transfer and manner of sale set forth in Schedule 11 attached
hereto, at Completion Thales shall designate one broker or
dealer of Thales' choice through whom Thales will coordinate and
effect any and all sales of any Nice Shares or Nice ADRs
comprising the Share Consideration, shall provide Nice with
contact information for a designated contact person at the
offices of such broker or dealer, and shall advise such broker
or dealer in writing (with receipt acknowledged by such broker
to Nice and Thales) of the restrictions set forth in Schedule 11
attached hereto, including providing such broker or dealer with
a copy of Schedule 11. Thales may change such designated broker
or dealer at any time by providing notice of such change to
Nice, provided such newly designated broker or dealer is advised
in writing (with receipt acknowledged by such broker to Nice and
Thales) of the restrictions set forth in Schedule 11 attached
hereto, including providing such broker or dealer with a copy of
Schedule 11, and provided that at all times only
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one broker or dealer shall be designated as the applicable
broker or dealer under this Section 19.8.2.
19.9 Embargo Contracts
19.9.1 The UK Purchaser undertakes to Thales with, subject to Clause
19.9.4, effect from Completion to act as sub-contractor to TCSL
and to carry out and perform and complete all the outstanding
obligations and liabilities created by or arising under the
Embargo Contracts and shall indemnify Thales and keep it fully
indemnified against all liabilities, losses, actions,
proceedings, costs, claims, demands and expenses brought or made
against or incurred by Thales and/or TCSL in respect of the
non-performance or defective or negligent performance or
termination of the Embargo Contracts following Completion.
19.9.2 In consideration for the UK Purchaser agreeing to act as
sub-contractor to TCSL and fulfil the obligations of TCSL under
the Embargo Contracts pursuant to Clause 19.9.1, Thales shall or
shall procure that the benefit of all payments received by TCSL
or any member of the Thales Group shall be held on trust for
Nice and shall be passed to the UK Purchaser as soon as
reasonably practicable following receipt.
19.9.3 The UK Purchaser acknowledges that the performance of the
Embargo Contracts shall include all interface with the relevant
distribution channel and if relevant, end-user, and that TCSL
shall merely hold the Embargo Contracts in its name, and Thales
agrees to procure that TCSL shall not amend the terms of the
Embargo Contracts.
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19.9.4 The UK Purchaser shall take no steps in the performance of the
Iran Contract unless and until advised to do so by TCSL in
writing.
19.10 Coppice Developments Limited
Following Completion the UK Purchaser agrees that it will perform the
obligations of TCSL to Coppice Developments Limited ("Coppice") under
the third party manufacturer's agreement between TCSL and Coppice dated
5 February 2002 (a copy of which is attached to the Disclosure Letter)
(the "Coppice Contract") in accordance with its terms at the date of
this Agreement and Thales shall make payments to the UK Purchaser in the
same amounts and on the same terms as the payments due to TCSL from
Coppice under the terms of the Coppice Contract. Thales agrees to
procure that TCSL shall not amend the terms of the Coppice Contract.
20 INSURANCE CLAIMS
To the extent that an accident occurs or has occurred or any loss or
damage is incurred or has been incurred at any time on or before the
date of Completion in relation to the Business which is covered by
insurance policies in the name of or otherwise maintained by any member
of the Thales Group then Thales shall or shall procure that the relevant
member of the Thales Group shall, subject to being indemnified by the
relevant Purchaser in respect of all costs reasonably incurred in
connection with pursuing such claim or loss, pursue such claim or loss
on behalf of the relevant Purchaser and, upon receipt of insurance
monies in respect of such claim or loss, pay such monies forthwith to
the relevant Purchaser net of all expenses (including legal fees (if
any) incurred with the prior written consent of Nice) incurred and not
previously reimbursed by the relevant Purchaser.
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21 THIRD PARTY CONSENTS
21.1 Without prejudice to the Condition in clause 2, the subject of which
shall not be governed by this Clause 21, if any consent or approval of
any person who is not a party to this Agreement is required to enable
the relevant Purchaser to take the assignment of or perform any Contract
and any such consent or approval has not been received at or prior to
Completion:
21.1.1 this Agreement shall not constitute an assignment or attempted
assignment of any such Contract whose terms would be broken by
an assignment or attempted assignment;
21.1.2 the assignment of each Contract shall be conditional upon such
consent, and the parties shall co-operate to obtain such consent
as soon as practicable;
21.1.3 until such time as such consent or approval is received, the
Companies shall be deemed to, and Thales shall procure that the
Companies shall, insofar as is legally possible, hold the
benefit thereof in trust for the Purchasers and the Purchasers
shall (if such sub-contracting is permissible and lawful under
the Contract in question) as the relevant Company's
sub-contractor perform all the obligations of the relevant
Company under such Contract.
21.2 Where following Completion, any of the Purchasers act as the
sub-contractor to any of the Companies in the performance of any
Contract in accordance with Clause 21.1.3 the Purchasers shall indemnify
the relevant Company
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and keep it fully indemnified against all liabilities, losses, action,
proceedings, costs, claims, demands and expenses brought or made against
or incurred by the relevant Company in respect of the non-performance or
defective or negligent performance by the relevant Purchaser of the
relevant Contract.
22 WARRANTIES AND LIMITATIONS ON LIABILITY
22.1 Thales warrants to the Purchasers that each of the Warranties set out in
Part 1 of Schedule 4 and Schedule 5 are true and accurate at the date of
this Agreement.
22.2 Nice warrants to Thales that each of the warranties set out in Part 2 of
Schedule 4 are true and accurate at the date of this Agreement.
22.3 The Purchasers shall not be entitled to claim that any fact causes any of
the Warranties to be breached or renders any of the Warranties misleading
if it has been fairly disclosed in reasonable detail to the Purchasers in
the Disclosure Letter. For the avoidance of doubt:
(a) if a document is referred to in the Disclosure Letter but a copy of
such document is not included in the Disclosure Documents, the
contents of such document will not be deemed to have been fairly
disclosed to the Purchasers; and
(b) if a document is referred to in the Disclosure Letter but a partial,
rather than a complete, copy of such document is not included in the
disclosure Documents then the relevant document shall only be deemed
disclosed to the Purchaser to the extent actually included in the
Disclosure Letter.
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22.4 Thales acknowledges that the Purchasers have entered into this Agreement
in reliance upon the Warranties.
22.5 Each of the Warranties shall be separate and independent and, save as
expressly provided to the contrary, shall not be limited or restricted by
reference to or inference from any other Warranty.
22.6 Each of the Warranties shall be given on the date of this Agreement and
shall be deemed to be repeated on the Completion Date except for the
Warranty set out at paragraph 4.3 of Part I of Schedule 4. The Warranties
deemed repeated at Completion shall be made on the basis that at
Completion any reference to "the date of this Agreement", whether express
or implied, in the Warranties or in any of the definitions in Clause 1.1
(Definitions and Interpretation) and used in such Warranties (except in
the definition of the "Disclosure Letter") shall be deemed to be
substituted by a reference to the Completion Date. Notwithstanding that
the Warranties set out at paragraphs 3.1, 3.2, 3.8, 3.9, 3.11, 3.12(a),
7.1 and 11.3 of Part I of Schedule 4 shall be deemed repeated at
Completion, the Purchasers shall not be entitled to claim that any fact
arising between the date of this Agreement causes any such Warranties not
to be true or accurate if it has been fairly disclosed in reasonable
detail to the Purchasers in the Completion Disclosure Letter.
22.7 Thales will deliver to the Purchasers immediately before Completion a
letter (the "Completion Disclosure Letter") confirming that the Warranties
are true and accurate as at the Completion Date (as if repeated as
described in sub-Clause 22.6) except as regards any matter or event
occurring between the date of this Agreement and the Completion Date fair
and reasonable details of which are set out in the Completion Disclosure
Letter to the intent that such confirmations shall confer the same rights
on the Purchasers as if each was set out in this Agreement as a Warranty.
The Completion Disclosure
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Letter shall not effect the right of the Purchasers to place reliance on
the Warranties, except as provided in Clause 22.6.
22.8 Thales hereby undertakes to disclose promptly to Nice in writing
immediately upon becoming aware of any matter, event or circumstance which
may arise or becomes known to it after the date of this Agreement and
before, or at the time of Completion which would or may make any of the
Warranties inaccurate and would accordingly constitute a breach of the
relevant Warranty.
If, details of any matter disclosed in the Completion Disclosure Letter
results in the Warranties, in the absence of such disclosure, not being
true and accurate at Completion, then Thales acknowledges and agrees that
the Purchasers shall be entitled to take action and to recover damages to
the same extent which they would have been entitled had such disclosure
not been made by Thales in the Completion Disclosure Letter (or otherwise)
prior to Completion, except as provided in Clause 22.6.
22.9 The Purchasers shall not be entitled to recover more than once in respect
of any one matter or set of circumstances giving rise to a claim under the
Warranties and/or any indemnity and/or under any other provision of this
Agreement. No claim for loss of profits will be recoverable for breach of
Clause 5.3 or either Warranty 8.1 or 8.5 where the relevant claim would
fall within the scope of the indemnities in Clauses 11.1, 11.2, 11.3 and
11.4 but for the exceptions provided therein.
22.10 The benefit of the Warranties and all other rights of the Purchasers
hereunder may be assigned in whole or in part, but always subject to the
limitations on liability contained in this Clause 22, and without
restriction by the Purchasers to any company which is a member of the
Purchasers' Group and which succeeds in title to any of the businesses, in
whole or in part, comprised in the Business. Provided that the benefit of
the Warranties and all other rights assigned pursuant to this clause shall
cease to have
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effect and shall no longer be enforceable against Thales and/or any
Thales Affiliate in the event that the assignee ceases to be a member of
the Purchasers' Group.
22.11 In the event of the Purchasers becoming aware of any matter which may
involve Thales in liability pursuant to the Warranties or the
indemnities in Clauses 6 (Excluded Liabilities), 11 (Indemnities) and 14
(Employment), and such matter is not a Third Party Claim (as defined in
Clause 22.18) then the Purchasers shall procure that notice thereof
(stating in reasonable details the nature of the claim and so far as
practicable, the amount claimed) is provided to Thales within forty-five
(45) days of the Purchasers becoming aware of the relevant matter, but
any failure to give such notice or particulars shall not affect the
rights of the Purchasers except that Thales shall not be liable in
respect of any such claim to the extent that any liability of Thales is
increased or Thales is otherwise prejudiced by such failure.
22.12 No claim shall be brought against Thales in respect of any breach of the
Warranties or the indemnities set out in Clause 11 (other than the
indemnities at Clauses 11.4, 11.5 and 11.6) unless Nice has given Thales
written notice of the claim (stating in reasonable detail the nature of
the claim and, so far as practicable, the amount claimed):
22.12.1 in respect of any claim relating to Taxation, on or before the
date which is 90 days from the last date on which any Tax
Authority may make a claim or consent in or take any other step
which may give rise to a claim relating to Taxation;
22.12.2 in respect of any claim relating to any Intellectual Property
Rights (other than a claim in respect of Wordnet 3 under clause
11.3 or under the Warranties) matters, on or before the fourth
anniversary of the Completion Date;
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22.12.3 in respect of any claim relating to Wordnet 3 under clause 11.3
or under the Warranties, on or before the third anniversary of
the Completion Date;
22.12.4 in respect of any claim relating to any other matters on or
before the date which is two (2) years after the Completion
Date.
22.13 The aggregate amount of the liability of Thales under:
(a) the Warranties;
(b) the indemnity in relation to the Prism Product at Clause 11.1;
(c) the indemnity in relation to Business IPR at Clause 11.2;
(d) the indemnity in relation to Wordnet 3 at clause 11.3; and
(e) the provisions of this Agreement in relation to the performance
of warranty work at Clause 17;
shall not exceed the aggregate of 60% (sixty per cent) of the aggregate
of the Initial Cash Consideration (as defined in Clause 7.2.1) together
with any further cash consideration received by Thales or the Companies
as at the date of the relevant claim less any amount paid by Thales to
the Purchasers by way of reduction of the consideration pursuant to
Clauses 7.5, 7.7 and 13 provided that Thales' liability under Clause
11.3 (or warranty 8.5 relating to
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Wordnet 3) shall be limited to $12,500,000. For the avoidance of doubt,
the provisions of this Clause 22.13 shall not affect or limit the
liability of Thales in relation to any claim relating to the indemnities
and/or provisions of this Agreement in respect of Clause 11.5 (SMRC),
Clause 11.6 (NMS), Clause 11.7 (Tax), Clause 15 (Accounts Receivable),
Clause 16 (Inventory), Clause 18 (the Instem Manufacturing Agreement),
Clause 6 (the Excluded Liabilities) and any other provision of this
Agreement.
22.14 No liability shall attach to Thales in respect of any individual claim
under the Warranties, the indemnity relating to the Prism Product at
Clause 11.1, the indemnity relating to Business IPR at Clause 11.2 or the
indemnity relating to Wordnet 3 at Clause 11.3 for which it would, in the
absence of this provision, be liable, unless such claim exceeds
(pound)15,000 (fifteen thousand pounds). For the avoidance of doubt, the
provisions of this Clause 22.14 shall not affect or limit the liability of
Thales in relation to any claims made by the Purchasers relating to the
indemnities and/or the provisions of this Agreement relating to Clause
11.5 (SMRC), Clause 11.6 (NMS), Clause 11.7 (Tax), Clause 17 (warranty
work), Clause 15 (Accounts Receivable), Clause 16 (Inventory), Clause 18
(the Instem Manufacturing Agreement) Clause 6 (the Excluded Liabilities)
and any other provisions of this Agreement.
22.15 The Purchasers shall not be entitled to damages in respect of any claim or
claims under any of the Warranties, the indemnity relating to the Prism
Product at Clause 11.1 or the indemnity relating to Business IPR at Clause
11.2 and Wordnet 3 at Clause 11.3 unless and until the aggregate amount of
all claims exceeds $600,000 (six hundred thousand dollars), but if this
amount is exceeded, Thales' liability shall be for the total amount of the
claims and shall not be limited to the excess. For the avoidance of doubt,
the provisions of this Clause 22.15 shall not affect or limit the
liability of Thales in relation to any claims made by the Purchasers
relating to the indemnities and/or the provisions of this Agreement
relating to Clause 11.5 (SMRC), Clause 11.6 (NMS), Clause 11.7 (Tax),
Clause 17 (warranty work), Clause 15 (Accounts Receivable), Clause 16
(Inventory), Clause 18 (the
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Instem Manufacturing Agreement), Clause 6 (the Excluded Liabilities) and
any other provisions of this Agreement.
22.16 None of the limitations contained in clauses 22.12, 22.13 and 22.14 and
22.15 shall apply to any breach of any Warranty or indemnity which (or the
delay in discovery of which) is the consequence of fraud, by any member of
the Thales Group or any officer or employee of any member of the Thales
Group. None of the limitations contained in clauses 22.3, 22.12, 22.13,
22.14, 22.15 and 22.22 shall apply to any breach of warranty 2.7 (Accounts
Combination Statement).
22.17 In the following provisions of this clause 22, the expression "Indemnified
Party" means any of the Purchasers or any member of the Purchasers' Group
or Thales or any member of the Thales Group, as the case may be, who has
any claim under Clauses 3.2 (Hedge End), 6.1 (Assumed Liabilities), 6.3
(Excluded Liabilities), 14 (Employment), 11 (Indemnities), or 25.2
(Pensions) or under the Warranties and the expression "Indemnifying Party"
means Thales or (or other relevant member of the Thales Group) or any
Purchaser (or other relevant member of the Purchasers' Group) as the case
may be.
22.18 If an Indemnified Party becomes aware of any matter, act, omission or
circumstances that may give rise to a claim against the Indemnifying Party
and the claim in question is a result of or in connection with a claim by
or liability to a third party ("Third Party Claim") then the Indemnified
Party shall procure that notice of such Third Party Claim is given as soon
as reasonably practicable and in any event within twenty one (21) days to
the Indemnifying Party, and the Indemnified Party shall provide to the
Indemnifying Party sufficient information as may reasonably be required to
assess the validity of the claim in question, but any failure to give such
notice or provide such information shall not affect the rights of the
relevant Indemnified Party except that the Indemnifying party shall not be
liable to the Indemnified Party in
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respect of a Third Party Claim to the extent that any liability of the
Indemnifying Party is increased or the Indemnifying Party is otherwise
prejudiced by such failure.
22.19 If the Indemnifying Party agrees that it is liable to the Indemnified
Party in respect of the claim in question (to the extent the Third Party
Claim is successful) and the Indemnifying Party indemnifies and secures
the Indemnified Party against all reasonable out-of-pocket costs and
expenses incurred by it, and any loss arising in respect of the relevant
claim under this Agreement as finally determined, within 10 Business Days
of being notified of the Third Party Claim, the Indemnified Party and any
member of its group shall, subject to clauses 22.20 and 22.21:
(a) take such action as the Indemnifying Party may reasonably require
after consultation with the Indemnified Party to avoid, resist,
contest or compromise such Third Party Claim or matter which gives,
or may give, rise to such a claim;
(b) not make any admission of liability, agreement, compromise or
settlement with any person, body or authority nor consent to the
entry of any judgment or final order in relation to any such Third
Party Claim except with prior consultation with, and the prior
agreement (not to be unreasonably withheld or delayed) of, the
Indemnifying Party;
(c) if so required by the Indemnifying Party ensure (or, as appropriate,
shall procure that each Indemnified Party shall ensure) that the
Indemnifying Party is placed in a position to take on or take over,
in any such case in the name and on behalf of, the Indemnified Party
(or any
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member of its group concerned), the conduct of all proceedings
and/or negotiations of whatever nature arising in connection with
the Third Party Claim in question, including the appointment of
solicitors or other professional advisers, and provide (or, as
appropriate, procure that each Indemnified Party provides) such
information, original or copy documents, access to systems and/or
personnel and assistance as the Indemnifying Party may reasonably
require in connection with the preparation for, and conduct of, such
proceedings and/or negotiations provided that the Indemnifying Party
shall keep the Indemnified Party informed of the progress of any
proceedings and shall consult with the Indemnified Party prior to
taking any action which may materially and adversely affect the
Indemnified Party or the Business. If the Indemnified Party decides
to retain solicitors or other professional advisers in addition to
those retained by the Indemnifying Party, it shall do so at its own
cost.
(d) If the Indemnifying Party does not take over the management of the
claim, then the Indemnified Party shall consult the Indemnifying
Party on the conduct of the claim and keep the Indemnifying Party
fully and regularly informed of all proceedings and/or negotiations
and of any financial sums which will be claimed under the indemnity
and will only compromise, settle, discharge or otherwise dispose of
the claim with the prior written consent of the Indemnifying Party
(such consent not to be unreasonably withheld or delayed).
22.20 The Indemnified Party shall not take any step to admit, compromise,
settle, discharge or otherwise deal with any Third Party Claim at any time
prior to notification of such Third Party Claim to the Indemnifying Party
or pending
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the Indemnifying Party's consideration of the Third Party Claim. Provided
that the Indemnified Party has complied with its obligations under this
Clause and Clauses 22.17 and 22.18, the Indemnified Party shall be at
liberty, without reference to the Indemnifying Party and without prejudice
to its rights against the Indemnifying Party, to admit, compromise,
settle, discharge or otherwise deal with any Third Party Claim:
(a) if the Indemnifying Party fails to request the Indemnified Party to
take any appropriate action within a reasonable period after receipt
of the notice given under clause 22.18 above; or
(b) if no response is received from the Indemnifying Party within a
reasonable period in relation to any continuing dispute, negotiation
or correspondence; or
(c) if the Indemnifying Party fails to secure and indemnify the
Indemnified Party as required by clause 22.19 above.
22.21 The Indemnified Party and any member of its group shall be at liberty,
without prejudice to its rights against the Indemnifying Party, to admit,
compromise, settle, discharge or otherwise deal with any Third Party Claim
if the Third Party Claim relates to any Intellectual Property Rights and
such claim could materially and adversely affect the Business including,
for the avoidance of doubt, the ongoing financial performance of the
Business, provided that the Indemnified Party shall keep the Indemnifying
Party informed of the progress of any proceedings and shall consult with
the Indemnified Party prior to compromising, settling, discharging or
otherwise dealing with such a Third Party Claim.
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22.22 No liability shall attach to Thales in respect of any claim under the
Warranties and/or the indemnities set out in Clause 11:
22.22.1 to the extent that the matter, event or circumstance giving rise
to the relevant claim was provided for in the Completion Balance
Sheet;
22.22.2 unless proceedings in respect of the claim shall have been
issued and served on Thales before the date nine months
following the date on which notice of the claim was given to
Thales in accordance with Clause 22.12;
22.22.3 to the extent that the claim or breach would not have arisen but
for some act, omission, transaction or arrangement whatsoever
carried out at the written request or with the written approval
of Nice or its authorised representatives prior to Completion or
which was expressly authorised by this Agreement; and
22.22.4 to the extent that the matter giving rise to the claim would not
have arisen but for the passing of, or any change in, after the
date of this Agreement, any law, rule, regulation,
interpretation of law or administrative practice of any
government, governmental department, agency or regulatory body
or any increase in the rates of Tax or any imposition of Tax, in
any case not actually or prospectively in force at the date of
this Agreement.
22.23 The Purchasers shall, in relation to any loss or liability which might
give rise to a claim under:
(a) the Warranties; or
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(b) any Third Party Claim which relates to Intellectual Property
Rights in relation to which Nice have exercised their rights
under Clause 22.21 to take conduct of such claim and the
indemnities contained in clauses 11.1, 11.2, 11.5 and 11.6,
take all reasonable steps to avoid or mitigate such loss or liability.
22.24 Thales undertakes that if any claim is made against it or any of the
other members of the Thales Group in connection with the sale of the
Assets or the Cliffstone Shares or the Cliffstone Note to the
Purchasers, none of them will make any claim against any Employee on
whom it may have relied before agreeing to the terms of this Agreement
or authorising any statement in the Disclosure Letter.
22.25 Thales expressly disclaims all liability and responsibility for any
forecast, business projection or evaluation contained within or derived
or capable of being derived from:
22.25.1 any investigation carried out or made by or on behalf of the
Purchasers in the course of due diligence or other enquiry prior
to the Purchasers entering into this Agreement; or
22.25.2 any other data, document, record or information Disclosed.
22.26 No liability shall attach to Thales in respect of any claim under the
Warranties to the extent that the relevant facts, matters or
circumstances giving rise to the claim were actually known by the
Purchasers to constitute a breach of Warranty.
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23 RESTRICTIONS ON THALES ACTIVITIES
23.1 Thales undertakes with the Purchasers that without the written consent
of Nice it will not and shall procure that each Affiliate of Thales
shall not, either on its own account or in conjunction with or on behalf
of any other person:
23.1.1 for a period of three (3) years from the Completion Date carry
on or be engaged, concerned or interested, directly or
indirectly, whether as a partner, shareholder, director,
consultant, agent or otherwise in any business which is
competitive with the Business as such business is carried on at
Completion;
23.1.2 for a period of 18 (eighteen) months from the Completion Date
entice away or attempt to solicit or entice away from the
Purchasers any Employee who is a senior employee of the
Business, whether or not such person would commit a breach of
his contract by reason of leaving such employment.;
23.1.3 for a period of three years from the Completion Date solicit or
endeavour to entice away from the Purchasers the business or
custom of a Restricted Customer with a view to providing goods
or services to that Restricted Customer in competition with the
Business as carried on at the Completion Date;
23.1.4 for a period of three years from the Completion Date provide
goods or services to or otherwise have any business dealings
with any Restricted Customer in the
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course of any business concern which is in competition with the
Business as carried on at the Completion Date;
23.1.5 for a period of three years from the Completion Date to the
detriment of any of the Purchasers, persuade or endeavour to
persuade any Restricted Supplier to cease doing business or
materially reduce its business with any of the Purchasers;
23.1.6 for a period of three years from the Completion Date to the
detriment of any of the Purchasers, receive goods or services
from or otherwise have any business dealings with any Restricted
Supplier in the course of any business concern which is in
competition with the Business as carried on at the date hereof;
and
23.1.7 assist any other person to do any of the foregoing things.
23.2 While the restrictions contained in this Clause 23 are considered by the
parties to be reasonable in all the circumstances, it is recognised that
restrictions of the nature in question may fail for technical reasons
and accordingly it is agreed and declared that if any of such
restrictions shall be adjudged to be void as going beyond what is
reasonable in all the circumstances for the protection of the legitimate
business interests of the Purchasers but would be valid if part of the
wording was deleted or the periods reduced or the range of activities or
area dealt with reduced in scope, the said restriction shall apply with
such modifications as may be necessary to make it valid and effective.
23.3 Nothing in Clause 23.1 shall prevent Thales or any Affiliate of Thales
from:
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23.3.1 acquiring after Completion, a company or business (a "Relevant
Transaction"), which carries on the business of the design,
development, production, marketing and supply of various secure
voice recording and replay systems and products or application
software for customer performance management solutions in either
contact centres, public safety or wholesale trading platforms
and the provision of related ancillary services (a "Relevant
Business") (and the provisions of Clause 23.1.1 shall not apply
to any such company or business) provided that the acquisition
of the company or business carrying on the Relevant Business is
an incidental part of the Relevant Transaction. For the
avoidance of doubt if the aggregate sales of the company or
business carrying on the Relevant Business is above 10 per cent.
of the aggregate sales of all the companies or businesses
acquired pursuant to the Relevant Transaction, or, if the annual
turnover of the company or business carrying on the Relevant
Business is in excess of $20 million, the company or business
carrying on the Relevant Business shall not be regarded as
incidental; and
23.3.2 the acquisition of shares or convertible debentures of a company
listed on any recognised stock exchange market which is
significantly (i.e. more than 10% of total sales) engaged in a
business competitive with the Business, provided that Thales or
any Affiliate of Thales in aggregate does not acquire directly
or indirectly shares or convertible debentures which constitute
or can be constituted to consist more than 5 per cent of the
share capital of such company.
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23.4 In the event that Thales, pursuant to Clause 23.1, is permitted to acquire
a Relevant Business Thales undertakes to inform Nice of such acquisition,
in writing, in reasonable detail, within two weeks of the completion of
the Relevant Transaction. Nice shall then have a period of 90 days from
the date of receipt of the notice of Thales, to serve a notice of its wish
to purchase the company or business carrying on the Relevant Business. The
parties agree to negotiate in good faith to conclude the sale of the
company or business carrying on the Relevant Business within 3 months from
the date of Nice's notice stating its desire to purchase such company or
business.
24 USE OF CORPORATE NAMES
The Purchasers undertake that they shall not, and will procure that the
members of the Purchasers' Group shall not, make use of the Excluded Trade
Marks at any time after the Completion Date, save only that the Purchasers
shall be entitled from the Completion Date in connection with the
Business:
(a) for a period of 6 months to use up existing stocks of trade
literature, labels, manuals, packaging and other printed material
bearing any of the Excluded Trade Marks or any part thereof;
(b) for a period of 3 months to continue to display any of the Excluded
Trade Marks or any part thereof as it appears on any existing
nameplate, building sign or vehicle;
(c) for a period of 6 months to cover or remove any of the Excluded
Trade Marks or any part thereof from any existing stocks of
products;
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provided that any goodwill derived from use of the Excluded Trade Marks by
the Purchasers' or members of the Purchasers' Group pursuant to this
Clause 24 shall accrue to Thales.
25 PENSIONS
25.1 Each of Thales and the Purchasers shall comply, or shall procure
compliance with Schedule 6 (Pensions).
25.2 Thales shall indemnify and keep indemnified the Purchasers (for themselves
and as trustee for any other member of the Purchasers' Group) on demand
against any liabilities, claims, actions or proceedings which may be
suffered or incurred by, or made against the Purchasers or any other
member of the Purchasers' Group (including without limitation all legal
and other professional fees and expenses incurred) arising in connection
with or as a consequence of the provision of retirement benefits
(contractual or otherwise) for and in respect of the Non-UK Employees and
their dependants in respect of or attributable to any period prior to
Completion.
26 CONFIDENTIALITY OF INFORMATION
26.1 Each party undertakes to the other that it shall and shall procure that
all members of its Group shall treat as strictly confidential all
information received or obtained by it or its employees, agents or
advisers as a result of entering into or performing this Agreement
including information relating to the provisions of this Agreement, the
negotiations relating to this Agreement, the subject matter of this
Agreement or the business or affairs of the other and subject to the
provisions of Clause 26.2 that it will not at any time hereafter make use
of or disclose or divulge to any person such information and shall use all
reasonable endeavours to prevent the publication or disclosure of any such
information.
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26.2 The restrictions contained in Clause 26.1 or 26.3 shall not apply so as to
prevent any party, Thales or the Companies from making any disclosure
required by law or for the purpose of any judicial proceedings or by any
securities exchange or supervisory or regulatory or governmental body
pursuant to rules to which it is subject wherever situated or from making
any disclosure to any professional adviser, auditors and bankers for the
purposes of obtaining advice (provided always that the provisions of this
Clause 26 shall apply to, and such party shall procure that they apply to
and are observed in relation to, the use or disclosure by such
professional adviser of the information provided to him) nor shall the
restrictions apply in respect of any information which comes into the
public domain otherwise than by a breach of this Clause 26.
26.3 Thales undertakes at all times after the Completion Date not to disclose
to any other person or use any Business Information which is not in the
public domain.
26.4 The restrictions contained in this Clause 26 shall continue to apply after
the termination of this Agreement without limit in time.
27 CORPORATE GOVERNANCE, LOCK-UP, ORDERLY MARKETING ARRANGEMENTS, STANDSTILL
AGREEMENT AND REGISTRATION RIGHTS AGREEMENT
27.1 The rights and obligations of Thales and Nice with respect to the
registration under the Securities Act, of the Nice Shares issued to Thales
as the Share Consideration in accordance with Clause 7.2.2 are set forth
in the Registration Rights Agreement attached hereto as Schedule 11.
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27.2 The rights and obligations of Thales and Nice with respect to the
corporate governance of Nice and restrictions on the trading of Nice
Shares by Thales are set forth in Schedule 11.
27.3 Thales has also agreed to be bound by the terms and conditions of a stand
still agreement substantially in the form of Schedule 11 hereto.
28 NOTICES
28.1 All notices and other communications relating to this Agreement:
28.1.1 shall be in English and in writing;
28.1.2 shall be delivered by hand or sent by facsimile;
28.1.3 shall be delivered or sent to the party concerned at the relevant
address or number, as appropriate, and marked as shown in Clause
28.2, subject to such amendments as may be notified from time to
time in accordance with this Clause 28 by the relevant party to the
other party. That notice shall only be effective on the date
falling 5 clear Business Days after the notification has been
received or such later date as may be specified in the notice;
28.1.4 Any notice given under this Agreement shall, in the absence of
earlier receipt, be deemed to have been duly given as follows:
(a) if delivered personally, on delivery;
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(b) if sent by facsimile, when dispatched provided a valid transmission
acknowledgement is obtained from the addressees' facsimile machine
appears correctly at the start and end of the sender's fax.
28.2 The initial details for the purposes of Clause 28 are:
Thales SA
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 08
France
Facsimile n(degree) 00 33 1 53 77 82 63
For the attention of Pierre CHARRETON
Thales Group General Counsel
The Purchasers
Nice Systems
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇
facsimile n(degree)972 9775 3520
for the attention of: ▇▇▇▇ ▇▇▇▇▇▇▇▇
28.3 Any notice given under this Agreement outside normal working hours in the
place to which it is addressed shall be deemed not to have been given
until the start of the next period of normal working hours in such place.
127
28.4 No notice under this Agreement may be withdrawn or revoked except by
notice given in accordance with this Clause 28.
28.5 The provisions of this Clause 28 shall not apply in relation to the
service of Service Documents
29 ANNOUNCEMENTS
29.1 The parties mutually agree to take all reasonable care to avoid any act
which may reflect adversely on or be harmful to the business reputation or
prestige of the other and without prejudice to the generality of the
foregoing agree that (save as required by law or stock exchange
regulations) any press announcements or circular letters which may be made
or sent out by the Thales Group or the Purchasers and any other
disclosures relating to this Agreement or its subject matter shall be
subject to the prior written approval of Thales and Nice, such approvals
not to be unreasonably withheld or delayed and may be given either
generally or in a specific case or cases and may be subject to conditions.
29.2 The restrictions contained in this Clause 29 shall continue to apply after
termination of this Agreement without limit in time.
30 ENTIRE AGREEMENT
30.1 This Agreement (together with the documents referred to herein) represent
the entire agreement between the parties in relation to the subject matter
of this Agreement and supersedes any previous agreement whether written or
oral between the parties in relation to the subject matter. Accordingly,
all other terms, conditions, representations, warranties and other
statements
128
which would otherwise be implied (by law or otherwise) shall not form part
of this Agreement.
30.2 Each of the parties acknowledges and agrees that this clause 30 shall not
apply to any statement, representation or warranty made fraudulently or to
any provision of this Agreement which was induced by, or otherwise entered
into as a result of, fraud, for which the remedies shall be all those
available under the law governing this Agreement.
31 COSTS
Each party shall be responsible for all the costs and expenses incurred by
it in connection with and incidental to the preparation and completion of
this Agreement, the other documents referred to in this Agreement and the
sale and purchase of the Business and Assets.
32 AMENDMENTS AND WAIVERS
32.1 No amendment or variation of the terms of this Agreement shall be
effective unless it shall be made or confirmed in a written document
signed by both Nice and Thales.
32.2 No delay in exercising or non-exercise by either party of its rights under
or in connection with this Agreement shall operate as a waiver or release
of that right. Rather, any such waiver or release must be specifically
granted in writing signed by the party granting it.
33 SEVERABILITY
129
If at any time any part of any provision of this Agreement shall be or
become illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, then such provision shall be deemed to be severed from
this Agreement and the remainder of the provisions of this Agreement shall
remain valid and enforceable.
34 ASSIGNMENT
34.1 Save as otherwise provided, no party may assign any of its rights under
this Agreement without the prior written consent of the others.
34.2 The parties agree that the benefits of this Agreement may be assigned (in
whole or in part) by the Purchasers to, and may be enforced by, any member
of the Purchasers' Group (an "Assignee"), which is the legal owner of the
Business or Assets (save as provided in Clause 34.3) as if it were the
relevant Purchaser under this Agreement.
34.3 Where the Purchasers or any member of the Purchasers' Group cease to hold
at least 50% (fifty per cent.) of the entire issued share capital of an
Assignee, the Purchasers shall procure that before they so cease, they
shall assign the benefit of their rights under this Agreement to another
continuing member of the Purchasers' Group.
35 CONTINUING EFFECT
Each provision of this Agreement and any other documents referred to in it
which is capable of being performed after but which has not been performed
at or before Completion and all Warranties, indemnities, covenants and
other undertakings and obligations contained in or entered into in
accordance with
130
this Agreement shall continue in full force and effect after Completion
notwithstanding Completion.
36 COUNTERPARTS
This Agreement may be entered into in any number of counterparts and by
the parties to it on separate counterparts but shall not be effective
until each party has executed at least one counterpart, each if which when
so executed and delivered shall be an original, but all counterparts
together shall constitute one and the same instrument.
37 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law and the parties submit to the non-exclusive jurisdiction of
the English Courts in relation to any claim or matter arising out of this
Agreement.
38 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person, who is not a party to any contract incorporating these
conditions, shall have any rights under the Contracts (Rights of Third
Parties) ▇▇▇ ▇▇▇▇ to enforce any term of that contract.
39 AGENT FOR SERVICE
39.1 Thales irrevocably appoints Thales Corporate Services Limited of ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ Business Park, Addlestone, Surrey KT15 2NE to
be its agent for the receipt of Service Documents. It agrees that any
131
Service Document may be effectively served on it in connection with
proceedings in England and Wales by service on its agent effected in any
manner permitted by the Civil Procedure Rules.
39.1.1 If the agent at any time ceases for any reason to act as such,
Thales shall appoint a replacement agent having an address for
service in England or Wales and shall notify the other Purchasers of
the name and address of the replacement agent. Failing such
appointment and notification, the Purchasers shall be entitled by
notice to Thales to appoint a replacement agent to act on behalf of
Thales. The provisions of this Clause 39 applying to service on an
agent apply equally to service on a replacement agent.
39.1.2 A copy of any Service Document served on an agent shall be sent by
post to Thales. Failure or delay in so doing shall not prejudice the
effectiveness of service of the Service Document.
39.2 Nice irrevocably appoints Nice CTI Systems UK Limited of ▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ to be its agent for the
receipt of Service Documents. It agrees that any Service Document may be
effectively served on it in connection with proceedings in England and
Wales by service on its agent effected in any manner permitted by the
Civil Procedure Rules.
39.2.1 If the agent at any time ceases for any reason to act as such, Nice
shall appoint a replacement agent having an address for service in
England or Wales and shall notify the other Purchasers of the name
and address of the replacement agent. Failing such appointment and
132
notification, the Purchasers shall be entitled by notice to Nice
to appoint a replacement agent to act on behalf of Nice. The
provisions of this Clause 39 applying to service on an agent
apply equally to service on a replacement agent.
39.2.2 A copy of any Service Document served on an agent shall be sent
by post to Nice. Failure or delay in so doing shall not
prejudice the effectiveness of service of the Service Document.
39.3 "Service Document" means, for the purposes of this Clause 39 a claim
form, application notice, order, judgment or other document relating to
any proceedings.
40 Gross Payments
If any amount payable to the Purchasers by Thales or by the Purchasers
to Thales:
(a) in respect of or in connection with any Warranty being breached,
untrue or misleading or any indemnity or undertaking; or
(b) under any other clause of this Agreement;
is subject to Taxation, such additional amounts shall be paid to the
Purchasers by Thales or by the Purchasers to Thales so as to ensure that
the net amount received by the Purchasers or Thales is equal to the
amount
133
the Purchasers or Thales should have received had the payment not been so
subject to Taxation.
41 Guarantee
In consideration of Thales entering into this Agreement, Nice hereby
unconditionally and irrevocably guarantees to Thales and to the Companies
the performance by the Purchasers of their obligations under this
Agreement and the payment of any liability of the Purchasers under this
Agreement.
EXECUTION
The parties have shown their acceptance of the terms of this Agreement by
executing it at the end of the Schedules.
134
ATTESTATIONS
Signed by )
/s/ )
for and on behalf of )
THALES SA )
in the presence of: )
Signed by )
/s/ )
for and on behalf of )
Nice cti systems uk limited )
in the presence of: )
Signed by )
/s/ )
for and on behalf of )
Nice systems sarl )
in the presence of: )
Signed by )
/s/ )
for and on behalf of )
NICE SYSTEMS GMBH )
in the presence of: )
Signed by )
/s/ )
for and on behalf of )
Nice systems inc. )
in the presence of: )
Signed by )
/s/ )
for and on behalf of )
NICE SYSTEMS Ltd )
in the presence of: )
EXHIBIT 4.3 SCHEDULES
SCHEDULE 1
THE COMPANIES
THALES CONTACT SOLUTIONS LIMITED
Place of Incorporation : England and Wales
Registered Number : 560700
Registered Office : ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
THALES CONTACT SOLUTIONS S.A.
Place of Incorporation : France
Registered Number : B424442135 Versailles
Registered Office : ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
THALES CONTACT SOLUTIONS INC.
Place of Incorporation : U.S.A. (Delaware)
Registered Number :
Registered Office : ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇
THALES CONTACT SOLUTIONS GMBH
Place of Incorporation : Germany
Registered Number : HRB5492 Bergisch Gladbach
Registered Office : Technologie Park Bergisch Gladbach
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇-▇▇▇▇▇
Bergisch Gladbach
Germany
121
SCHEDULE 2
APPORTIONMENT
The Purchase Price will be allocated on a fair and reasonable basis on the
Completion Date and thereafter as follows:
o Intellectual Property is allocated a value of US$4,000,000 (four
million dollars).
o The net tangible assets of the Business as at the Completion Date of
each of TCSL, TCS Inc., TCSA, TCS GmbH shall be allocated at fair
market value in US Dollars in each case based on the Conversion Rate
on the Completion Date and the Initial Purchase Price allocated
accordingly to each asset of the respective Thales selling entity.
o The CCTI stock will be valued at the nominal amount of US$1,000 (one
thousand dollars).
o The CCTI Note will be valued at a nominal amount of US$1,000 (one
thousand dollars).
o The remainder of the Initial Purchase Price and/or any adjustment
thereto, shall be allocated to various intangible assets (Goodwill and
Other Intangibles) and will be allocated 65% to the UK Purchaser and
35% to the US Purchaser.
o The Earnout Consideration payable pursuant to Clause 7.8 of the
Agreement will be allocated to Goodwill and will be allocated to and
paid by Nice to:
TCS Inc: 85%
Thales TRC Inc: 10%
TCSL: 5%
122
o Any other payments, including payments made in respect of warranties
and/or indemnity claims, shall be treated in accordance with the then
current generally accepted accounting principles.
PAYMENT SHALL BE EFFECTED AS FOLLOWS:
Item Seller Acquirer
---- ------ --------
UK Business TCSL UK Purchaser
French Business TCSA French Purchaser
German Business TCS GmbH German Purchaser
US Business TCS Inc. US Purchaser
Business IPR Thales Electronics PLC Nice
Cliffstone Shares Thales TRC Inc. UK Purchaser
Cliffstone Note Thales TRC Inc. US Purchaser
Earnout Consideration TCS Inc.: 85% Nice: 100%
Thales TRC Inc.: 10%
TCSL: 5%
123
SCHEDULE 3
THE BUSINESS PROPERTIES
PART 1 - LIST OF PROPERTIES
A - HEDGE END PROPERTY
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
B - RELEVANT BUSINESS PROPERTIES
UNITED KINGDOM
418/419,
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
1 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
2 Part ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
1 ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
2 ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
124
GERMANY
1 Technologie Park Bergisch Gladbach
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇-▇▇▇▇▇ Bergisch Gladbach
Germany
2 Buro Nr. 7
Stock des Hauses ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ OF IRELAND
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇
THE NETHERLANDS
Bedrijvencentrum Gadering
▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
222, De La Calle ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Spain
125
PART 2 - HEDGE END PROPERTY SUBLEASE
1. On or after Completion and subject to the provisions of the rest of this
Schedule 3 Part 2 Thales shall procure the granting of by Thales
Properties Limited and the Purchasers shall procure that the UK Purchaser
shall take a sublease of the Hedge End Property in the agreed form
subject to any variations or amendments agreed between the parties (both
acting reasonably).
2. Thales shall at its own expense use all reasonable endeavours to procure
the written consent of the landlord and the superior landlord of the
Hedge End Property (both hereinafter referred to as "the Hedge End
Landlord") by deed to the granting of the sublease of the Hedge End
Property referred to in paragraph 1 (the "Landlord's Consent") and will
promptly make application for Landlord's Consent and will supply a copy
of its application for Landlord's Consent to the UK Purchaser and will
keep the UK Purchaser informed of progress with the application for
Landlord's Consent.
3. The UK Purchaser shall in connection with Thales' application for
Landlord's Consent promptly supply such information including accounts
and references and provide such assistance to Thales as may reasonably be
required to ensure that Landlord's Consent can be obtained at the
earliest practical date.
4. The Purchasers shall in pursuance of the application for Landlord's
consent procure that the UK Purchaser enters into direct covenants with
the Hedge End Landlord in the form reasonably required by the Hedge End
Landlord to pay the rents reserved by and observe and perform the
covenants and conditions contained in the proposed sublease of the Hedge
End Property and if reasonably so required the Purchasers will procure a
guarantee from Nice for the purposes of Landlord's Consent (but for the
avoidance of doubt no other or further guarantee or other form of
security or payment) in respect of such obligations such guarantee to be
in a form reasonably acceptable to the Hedge End Landlord.
126
5. If the Hedge End Landlord refuses Landlord's Consent and the UK Purchaser
wishes to remain in occupation of the Hedge End Property then:
5.1 Unless the UK Purchaser and Thales both agree that the Landlord is
entitled to refuse consent, Thales shall procure that Thales Properties
Limited will at the joint cost of Thales and of the UK Purchaser promptly
apply to a court of competent jurisdiction for a declaration that the
Landlord's Consent has been unreasonably refused and shall diligently
pursue such proceedings and shall keep the UK Purchaser fully informed of
its application to the court and of the court's decision and will not
without the UK Purchaser's consent withdraw or settle such proceeding.
5.2 If the UK Purchaser and Thales are unable to agree whether the Landlord's
Consent is being unreasonably refused then either party may at any time
elect to refer the matter to a UK qualified barrister of not less than 10
years' call and experience in property matters ("Counsel") for
determination. The identity of such Counsel shall be agreed between the
UK Purchaser and Thales both acting reasonably or in the absence of
agreement as to the identity of Counsel the matter shall be referred by
either party to the Chairman of the Bar Council or his duly appointed
deputy who shall appoint Counsel to determine the issue. If Counsel's
opinion is that there is a 50% or greater than 50% chance of success in
an application for a declaration that the Landlord is unreasonably
refusing consent then Thales shall procure that Thales Properties will
apply to a court of competent jurisdiction for a declaration in
accordance with the provisions of paragraph 5.1 above.
127
5.3 The fees of Counsel shall be shared equally between Thales and the UK
Purchaser.
6. The UK Purchaser shall be deemed to lease with full knowledge and notice
in all respects of the actual state and condition of the Hedge End
Property and shall take the same in that state and condition.
7. Insofar as any of the obligations covenants or conditions relating to the
Hedge End Property contained in this Agreement remain to be observed or
performed this Agreement shall continue in full force and effect
notwithstanding Completion.
8. If Landlord's Consent has not been obtained on or before Completion the
following provisions shall apply:
8.1 Thales and the Purchasers shall remain bound to each other in respect of
the remaining provisions of this Agreement;
8.2 completion of the proposed sublease shall be postponed to the tenth
Business Day after whichever is the later of:-
8.2.1 receipt by Thales of Landlord's Consent;
8.2.2 the provision of an engrossment of the agreed form of sublease for
the Hedge End Property to the UK Purchaser or its solicitors; or
128
8.2.3 grant of the Court Order referred to in paragraph 14.
9.1 If:
9.1.1 the Hedge End Landlord complains in writing about the occupation of the
Hedge End Property by the UK Purchaser and requires the UK Purchaser to
immediately vacate the Hedge End Property and threatens to take
proceedings to recover possession of the Hedge End Property either party
shall be entitled by giving at least 7 days' notice in writing to the
other party (accompanied in the case of any notice served by Thales or
Thales Properties by a copy of the Hedge End Landlord's letter requiring
the UK Purchaser to vacate) at any time thereafter (but before Landlord's
Consent is granted) electing to withdraw the Hedge End Property from this
part of this Schedule of this Agreement; or
9.1.2 the UK Purchaser shall at any time prior to grant of Landlord's Consent
serve at least 3 months' written notice of its desire to terminate this
part of this Schedule to this Agreement; or
9.1.3 the Hedge End Landlord takes any steps to interfere with or prevent
access to or use of the Hedge End Property by the UK Purchaser the UK
Purchaser shall be entitled by giving at least one day's written notice
to the other party to terminate this part of the Schedule of this
Agreement.
THEN upon expiry of the notice referred to in paragraph 9.1.1 9.1.2 or
9.1.3 above (as appropriate) the provisions of this part 2 of Schedule 3
of this Agreement shall cease and be of no further effect (but without
prejudice to any antecedent breach of this Agreement) but the provisions
of paragraph 9.2 shall apply.
129
9.2 Upon expiry of any notice served pursuant to paragraph 9.1.1 or 9.1.2 or
9.1.3 above the following provisions shall apply:
9.2.1 Thales and the Purchasers shall be released from any obligation to
complete the proposed sublease of the Hedge End Property (but without
prejudice to any antecedent breach of this Agreement);
9.2.2 the Hedge End Property shall be promptly vacated and the UK Purchaser
shall deliver it up with vacant possession to Thales in accordance with
the terms of this Agreement and the UK Purchaser shall cease to be a
licensee and shall as soon as reasonably practicable make good any damage
caused by it or any of its licensees or visitors or agents to the Hedge
End Property to Thales' reasonable satisfaction; and
9.2.3 the Purchasers shall forthwith remove any registration of this Agreement
whether by way of caution or otherwise in any registers relating to the
Hedge End Property.
10. The following provisions of this paragraph shall apply in the case of the
Hedge End Property with respect to the period from the date of Completion
to whichever is the earlier of the date of the grant of the proposed
sublease of the Hedge End Property and the date of exclusion of the Hedge
End Property from this part of this Schedule of this Agreement under
paragraph 9 (the relevant date being referred to in this paragraph and in
paragraphs 11 and 13 below as "the End Date"):
10.1 the UK Purchaser shall enter the Hedge End Property and occupy it as
licensee only according to the terms of this part of this Schedule of
this Agreement;
130
10.2 from Completion to the End Date (both dates inclusive):
10.2.1 the UK Purchaser shall be responsible for, and if necessary
reimburse Thales against all rates water rates insurance service
charges and other outgoings and also for all gas electricity and
other services consumed at the Hedge End Property;
10.2.2 the UK Purchaser shall pay to Thales Properties Limited an amount
equal to the rent reserved and other payments payable under the
proposed sublease of the Hedge End Property as and when the same
fall due and shall observe and perform the covenants and
conditions on the part of the tenant contained in the proposed
sublease of the Hedge End Property (as far as consistent with a
licence and so far as they are not inconsistent with the
provisions of this Part 2 of Schedule 3 of this Agreement) and the
terms of this part of this Agreement and shall indemnify Thales
Properties Limited fully against all proceedings proper costs
claims demands expenses loss and liability of whatsoever nature
and howsoever arising out of any breach non-observance or
non-performance of those covenants provided that the UK Purchaser
shall only be required to pay value added tax upon production to
it of a valid value added tax invoice containing the particulars
prescribed in Regulation 14 of the Value Added Tax (General)
Regulations 1995 (as amended);
10.2.3 the UK Purchaser shall bear all third party public liability and
employer's liability risks attached to the occupation and use of
the Hedge End Property.
131
10.2.4 Thales shall procure that Thales Properties Limited shall observe
and perform the conditions on the part of the lessor in the
proposed sublease of the Hedge End Property (so far as consistent
with a licence and so far as they are not inconsistent with the
provisions of this Part 2 of Schedule 3 of this Agreement).
11. The UK Purchaser shall in respect of the Hedge End Property from the date
of completion until the End Date not purport to:
11.1 grant give issue or agree to grant give or issue any consent or approval;
11.2 vary or waive performance or observance or agree to vary or to waive
performance or observance of any of the terms of any document relating to
the Hedge End Property (except the proposed sublease);
11.3 serve any notice (whether contractual common law or statutory) on the
Hedge End Landlord or issue any proceedings or take any step in any
proceedings (provided that for the avoidance of doubt any proceedings
issued or steps taken in any proceedings relating to a breach by Thales
of its obligations under this Agreement and any steps taken in connection
with any proceedings issued pursuant to paragraph 5 of this part of this
Schedule shall not be deemed to be a breach of this paragraph 11.3); or
11.4 grant or agree to grant any lease licence or other document under which
any person shall be entitled to occupy any part or parts of the Hedge End
Property provided that the UK Purchaser shall be entitled to share
occupation of the Hedge End Property with any
132
group company (as that expression is defined in section 42 of the
Landlord and Tenant Act 1954) provided that no relationship of landlord
and tenant is created by such sharing of occupation and provided that if
the UK Purchaser vacates the Hedge End Property in any of the
circumstances envisaged in paragraph 9.1 of this part of this Schedule it
shall procure that any sharing company shall also vacate the Hedge End
Property and provided that details of any such group company are notified
to Thales before the commencement of such sharing.
12.1 The UK Purchaser shall promptly notify Thales Properties Limited in
writing of any notice application registration or other communication
which the UK Purchaser may give or receive in respect of the Hedge End
Property (but excluding any value added tax election notices or
acknowledgements served or received by the UK Purchaser).
12.2 Thales shall procure that Thales Properties Limited will notify the UK
Purchaser in writing of any notice or application registration or other
communication which Thales Properties Limited may give or receive in
respect of the Hedge End Property.
13. The UK Purchaser agrees with Thales Properties Limited in respect of the
Hedge End Property for the period from the date of Completion up to the
End Date it will:
13.1 not carry out any alteration or addition to the said Property nor change
the existing use of the said Property provided that the UK Purchaser
shall be entitled to reconfigure the Hedge End Property and carry out
internal non structural alterations without consent but subject to first
notifying Thales Properties Limited of the proposed works and subject to
the UK Purchaser reinstating any works which it has carried out pursuant
to this paragraph 13.1 to Thales' reasonable satisfaction if it is
required or chooses to vacate the Hedge End Property in accordance with
sub-paragraphs 9.1.1 or 9.1.2 or 9.1.3 hereof;
133
13.2 not make any application for planning permission;
13.3 not make any application to the Hedge End Landlord (but provided that any
steps which the UK Purchaser takes pursuant to this part of this Schedule
3 in order to facilitate grant of Landlord's Consent shall not be
considered a breach of this obligation);
13.4 promptly notify Thales in writing of any notice received of any breach or
infringement or alleged or perceived breach or infringement of any
obligation restriction stipulation condition right declaration or other
matter relating to the Hedge End Property and of which breach or
infringement or alleged or perceived breach or infringement the UK
Purchaser or anyone authorised on behalf of the UK Purchaser has
knowledge.
14. Thales shall procure that Thales Properties Limited and the UK Purchaser
shall at Thales' cost apply to the Court for an order excluding the
security of tenure provisions of the Landlord and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (as
amended) in respect of the sublease of the Hedge End Property to be
granted pursuant to paragraph 1 of this part of this Schedule and shall
use all reasonable endeavours to obtain the same. The grant of the
sublease is conditional on the relevant Court order being obtained.
15. From the date of this Agreement until the date on which the Underlease
dated 9 July 1998 between Whitbread plc (1) ▇▇▇▇▇▇ Communications Systems
Limited (2) and Racal Electronics plc (3)
134
("the Underlease") has been assigned (with the Hedge End Landlord's
written consent) to Thales Properties Limited Thales shall procure that
Thales Properties Limited shall:
15.1 observe and perform the conditions on the part of the assignee pursuant
to the Agreement for Assignment dated 12 March 2001 between ▇▇▇▇▇▇
Communications Systems Limited (1) and Thales Properties Limited (2)
("the Agreement to Assign");
15.2 not rescind the Agreement to Assign pursuant to clause 6.1 of the
Agreement to Assign or any variation thereof or otherwise terminate the
Agreement to Assign;
15.3 not vary the Agreement to Assign without the consent of the UK Purchaser;
15.4 take all reasonable steps to procure such extension of the expiry date
referred to in clause 6 of the Agreement to Assign as is sufficient in
all the circumstances to enable assignment of the Underlease to Thales
Properties Limited to take place.
16. Thales shall at its own cost procure that Thales Properties Limited shall
take all necessary steps and use all reasonable endeavours to obtain
grant of a valid fire certificate in respect of the Hedge End Property as
it exists at the date of Completion provided that Thales shall not be
liable hereunder to obtain the grant of a valid fire certificate in
respect of any alterations carried out to the Hedge End Property by the
UK Purchaser.
135
DATED 2002
--------------------------------------------------------------------------------
THALES PROPERTIES LIMITED (1)
THE UK PURCHASER (2)
NICE (3)
------------------------------------------------------
SUBLEASE
OF
OFFICE BUILDING AT HEDGE END
EASTLEIGH HAMPSHIRE
-------------------------------------------------------
136
THIS SUBLEASE is made the day of 2002
BETWEEN:
(1) the Lessor THALES PROPERTIES LIMITED (Company number 1153834) whose
registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ and
whoever for the time being owns the interest in the Premises which gives
the right to possession of them when this Lease ends
(2) the Lessee [THE UK PURCHASER] whose registered office is at [ ] and (so
far as the law admits or allows) whoever for the time being is entitled
to the Premises under this Lease and (if the Lessee is an individual) the
Lessees Personal Representatives
(3) the Guarantor [NICE] whose registered office is at [ ]
1. DEFINITIONS
1.1 The following terms used in this Lease (with necessary variations) have
the following meanings unless the context otherwise requires:-
"CONDUITS" means sewers pipes wires drains cables and other conducting media and
ancillary equipment for the passage of Utilities
"THE HEADLEASE" means a Lease dated 19 July 1989 and made between Midland Bank
Pension Trust Limited (1) and Whitbread & Company plc (2) as varied by a
Deed of Variation dated 2 February 1995 and made between Midland Bank
Pension Trust Limited (1) and Whitbread (2)
"THE INSURED RISKS" has the same meaning as is given to that expression in the
Headlease
137
"INTEREST" means interest at the rate of four per centum above the base rate of
Bank of Scotland plc from time to time (or of such other London
Clearing Bank as the Lessor may by notice in writing to the Lessee
nominate from time to time) during the period from the date on which
the expenditure is incurred or from which the interest is to run to the
date of payment as well before as after any judgment
"THE INTERMEDIATE LANDLORD" means the Landlord under the Intermediate Lease and
includes its successors in title (if any) its and their Superior
Landlords
"THE INTERMEDIATE LEASE" means an Underlease dated 9 July 1998 between Whitbread
plc (1) ▇▇▇▇▇▇ Communications Systems Limited (2) and Racal Electronics
plc (3)
"THE LESSOR'S SURVEYOR" means any suitably qualified chartered surveyor or
firm appointed by or acting for the Lessor (including an employee of
the Lessor) to perform the function of a Surveyor for any of the
purposes of this Lease
"NOTICES" all notices required in this Lease shall be in writing addressed (in
the case of notices to be served on a company) to the registered office
of the party served and all demands shall be in writing
"THE PAINTING YEARS" means those years in which the Headlease requires the
exterior and interior (as the case may be) of the Premises to be
painted
"PERMITTED PART" means either a complete floor of the Premises (save for toilet
staircases and corridors used in common) a complete wing of the
Premises or a complete floor within a wing of the Premises (in each
case save as aforesaid)
"THE PLANNING ACTS" means the Town & County Planning ▇▇▇ ▇▇▇▇ the Planning
(Consequential Provisions) ▇▇▇ ▇▇▇▇ the Planning (Listed Buildings and
Conservation Areas) ▇▇▇ ▇▇▇▇ the Planning (Hazardous Substances) ▇▇▇
▇▇▇▇ and all other legislation relating to town and country planning
"THE PREMISES" means the whole of the office building at Hedge End, Eastleigh
being the whole of the premises comprised in the Intermediate Lease
"THE RENT" means from and including the Term Commencement Date the yearly rent
of (pound)420,000 or such other aMOUNT as is payable as rent from time
to time under this Lease following increase and review in accordance
with Clause 6 of this Lease
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"REVIEW DATE" means 24 June 2004 and 24 June 2009
"REVIEW PERIOD" means each period on and from a Review Date to and including
the date immediately before the next succeeding Review Date or (as the
case may be) on and from the relevant Review Date to and including the
date of expiry of the Term
"THE SPECIFIED USE" means use as offices
"THE SUPERIOR LANDLORD" means the landlord under the Headlease and includes its
successors in title (if any) its and their superior landlords
"THE TERM" means a term from and including the Term Commencement Date to and
including 19 June 2014 but subject always to the provisions for earlier
termination herein contained
"THE TERM COMMENCEMENT DATE" means [ ] 2002
"UTILITIES" means water gas electricity telephone drainage soil air heating and
other services or utility supplies
1.2 References to any right exercisable by or permissions granted to the
Lessor shall unless expressed to the contrary include the exercise of
such right or permission by the Superior Landlord the Intermediate
Landlord and those persons authorised by the Lessor or the Superior
Landlord or the Intermediate Landlord respectively and unless otherwise
expressed in this Lease any consent or permission required of the Lessor
shall be deemed to include a requirement for and be conditional upon the
issue of such consent or permission from the Superior Landlord and the
Intermediate Landlord and the payment of their respective reasonable
costs fees and disbursements (including Value Added Tax) for such consent
1.3 Any covenant by the Lessee not to do any act or thing shall include an
obligation not to permit such act or thing to be done
1.4 Unless expressed to the contrary all rights of entry granted to the
Lessee or reserved to the Lessor under this Lease shall be exercisable
only at reasonable times and upon reasonable prior written notice (except
in case of emergency when no notice need be given)
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1.5 Where the context so admits or requires the singular shall include the
plural and vice versa the masculine gender shall include the feminine and
neuter genders and vice versa and where the Lessor or the Lessee or any
Guarantor shall be two or more individuals expressed or implied to be
made by or with any such individuals shall be deemed to be made by or
with them jointly and severally
1.6 Any reference to statute whether specifically or in general shall include
any statutory extension modification or re-enactment of it and all
regulations by-laws directions or orders made under it or deriving
validity from it
1.7 Paragraph and Schedule headings the index and the front sheet do not form
part of this Lease and shall not be taken into account in the
construction or interpretation of it
1.8 Unless expressly stated to the contrary nothing in this Lease confers on
any one other than the parties to it any right pursuant to the Contracts
(Rights of Third Parties) ▇▇▇ ▇▇▇▇
2. DEMISE RENT AND TERM
In consideration of the rent reserved and of the Lessees and the
Guarantors covenants contained in this Lease the Lessor (at the request
of the Guarantor) demises the Premises to the Lessee for the Term
TOGETHER WITH the rights (in common with the Lessor and all others
entitled to exercise such rights) specified in the First Schedule but
RESERVING to the Lessor (in common with all others from time to time
entitled to exercise such rights) the rights specified in the Second
Schedule and SUBJECT to the matters referred to in Part II of the Third
Schedule to the Headlease and to the matters contained in the Property
and Charges Registers of Title Number HP389500 (so far as such matters in
each case continue to affect the Premises and are capable of being
enforced) the Lessee PAYING in each year the Rent clear of all deductions
by equal quarterly payments in advance on the usual quarter days the
first payment to be made on the day of 2002
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3. LESSEES COVENANTS
The Lessee covenants with the Lessor as follows:-
3.1 RENT
To pay without any deduction or set off the Rent on
the days and in the manner mentioned in Clause 2
3.2 OUTGOINGS
To pay and indemnify and keep indemnified the Lessor
against all rates taxes charges assessments and
outgoings whatsoever (including but not limited to
Uniform Business Rate) during the Term assessed or
charged in respect of the Premises or any part of
them or on the owner or occupier of them whether or
not in the nature of those now in being (but
excluding any payable by the Lessor as a result of
any disposal of dealing with or ownership of the
Lessor's interest in this Lease or its receipt of
the rents)
3.3 PUBLIC UTILITIES
To pay and keep the Lessor indemnified against all
charges for Utilities used in the Premises during
the Term and the cost of the periodic rental of any
meters and other equipment supplied to the Premises
during the Term
3.4 STATUTORY REQUIREMENTS
At the Lessee's expense (and to the reasonable satisfaction of the
Lessor's Surveyor) to comply with the requirements of any present or
future statutes and/or of any competent authority in respect of the
Premises or their use whether by the owner or by the occupier of them and
not to do any act or thing by reason of which the Lessor may under any
such statutes and/or the requirements of any such authority incur or have
imposed upon it or become liable to pay any levy penalty damages
compensation costs charges or expenses and to keep the Lessor indemnified
against all breaches of the provisions of such statutes and/or
requirements and all costs damages and expenses incurred under them and
produce to the Lessor such licences consents and other documents and
evidence as the Lessor may reasonably require in order to satisfy itself
that the provisions of this Clause 3.4 have been complied with in all
respects
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3.5 ALTERATIONS
Not to cut or maim any part of the Premises nor make
any addition improvement or alteration to the
Premises either external or internal whether
structural or otherwise PROVIDED THAT on obtaining
the written consent of the Lessor (such consent not
to be unreasonably withheld or delayed) the Lessee
may make additions or alterations to the interior of
the Premises of a non-structural nature PROVIDED
HOWEVER THAT any such consent shall in addition to
any other reasonable covenants contain (and if not
so contained shall be deemed to imply) a covenant
that if required the Lessee shall at the
determination of the Term reinstate and make good
the Premises as if such additions or alterations had
not been made and PROVIDED FURTHER that no such
consent shall be required for the installation or
removal of demountable partitioning
3.6 REPAIRS
3.6.1 At all times during the Term to observe and perform the covenants
and conditions as to repair on the part of the tenant contained in
the Headlease (but subject always to the exceptions therein
contained) and to indemnify the Lessor from and against any
actions proceedings claims damages costs expenses or losses
arising from any breach non-observance or non-performance of those
covenants and conditions both during and at the end of the Term
PROVIDED however that nothing in this Lease shall require the
Lessee to put keep or hand back the Premises in any better state
of repair decoration or condition than that subsisting at the date
of this Lease as evidenced by the Schedule of Condition attached
to the Intermediate Lease
3.6.2 To be responsible for an make good any damage caused by the
bursting or overflow or obstruction of any part of the water
sanitary or
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heating installation in or serving the Premises arising as a
result of any act or omission of the Lessee or its subtenants
servants or agents
3.6.3 To keep clean the windows in the Premises and to clean them at
least once a month
3.7 DECORATION
To paint with at least two coats of good quality paint or such
other treatment as may be appropriate in a good and workmanlike
manner all parts of the Premises usually painted or treated in
each of the Painting Years all painting or treatment during the
last three months of the Term to be first approved in writing by
the Lessor (such approval not to be unreasonably withheld or
delayed) and at the same time with every painting or other
treatment throughout the Term to varnish colour or treat such
parts of the Premises as are usually so treated
3.8 INSURANCE CHARGE, ITEMS OF COMMON USE ETC.
To pay to the Lessor on written demand the whole of (a) the
Insurance Charge payable under the Headlease (b) all reasonable
costs and expenses properly incurred from time to time by the
Intermediate Landlord under the provisions of paragraphs 5, 6,
7.02 and 8 of the Fifth Schedule to the Headlease (save to the
extent that any costs fees and expenses arising under those
paragraphs relate to a breach consequent upon an act or omission
of the Intermediate Landlord and/or the Superior Landlord) and (c)
a fair and reasonable proportion to be reasonably determined by
the Intermediate Landlord's Surveyor of any sums (including fees
reasonably and properly incurred) which the Intermediate Landlord
may properly expend for the repair painting lighting cleaning
replacing renewal (where beyond reasonable economic repair)
maintenance and preservation of all passage ways pavements roads
areas Conduits party walls party structure fences or other
conveniences belonging to or used or enjoyed in common between
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the Premises and adjoining or neighbouring land or premises
together with an additional reasonable sum by way of the any
administration charge payable by the Landlord to the Intermediate
Landlord
3.9 ENTRY TO INSPECT ETC.
3.9.1 To permit the Lessor with all necessary materials and equipment at
reasonable times to enter the Premises to view their condition
whereupon the Lessor may serve upon the Lessee notice specifying
any breach of covenant for which the Lessee is liable under this
Lease and if the Lessee shall not have rectified such breach
within two calendar months after service of such notice or within
such shorter period as may reasonably be specified by such notice
the Lessor may without further notice enter the Premises to
execute the works required to rectify such breach (and the Lessee
shall give the Lessor all necessary facilities so to do) and the
proper cost incurred by the Lessor in so doing together with
Interest from the date such cost shall have been incurred to the
date of payment shall be paid by the Lessee to the Lessor upon
demand and shall be recoverable from the Lessee as a debt or (at
the Lessor's option) as rent in arrear
3.9.2 To permit the Lessor at reasonable times to enter the Premises to
exercise any of the rights which the Lessor has under this Lease
and for any other purpose connected with the Lessor's interest in
the Premises including (but not limited to) inspection of the
Health and Safety File referred to in Clause 3.17.13 and 3.21 the
persons entering making good any damage caused to the Premises by
such entry without unreasonable delay and provided that the Lessor
causes as little interference or disturbance to the Lessee's
business as reasonably possible the lessor shall not be liable to
pay compensation in respect of the same to the Lessee
3.10 USE RESTRICTIONS
3.10.1 Not to use the Premises or any part of them for any illegal or
immoral purpose nor for any noisy or offensive trade or business
nor
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for anything which may become a nuisance or damage to the owners
or occupiers of adjoining or neighbouring premises Provided that
the provisions of this clause 3.10.1 shall not prevent the Lessee
from using the Premises for what they normally use their premises
for if the Lessee is not by doing so in breach of any of its other
covenants in this Lease
3.10.2 Not to discharge any trade or deleterious wastes or anything
corrosive or harmful into the sewers nor anything but storm water
and surface water into the surface water drains nor anything which
may cause any obstruction or deposit in the sewers or drains
serving the Premises and to take all reasonable precautions to
prevent any leakage or escape of water or gas from the Premises
3.10.3 Not to allow on the Premises anything which is or may be dangerous
radioactive or explosive or specially combustible or inflammable
3.10.4 Not to trade or display goods or (save as expressly provided by
this Lease) erect or place signs or advertising material outside
the Premises nor to cause any obstruction outside the Premises
3.10.5 Not to use on the Premises any machinery (other than such machines
as shall be reasonably necessary for the Specified Use) without
the prior written consent of the Lessor and in particular (but
without limiting the generality of these covenant) not to use on
the Premises any coin or token operated gaming machines nor any
equipment machinery or other thing which shall cause dangerous
vibrations or overloading of the electrical circuits serving the
Premises
3.10.6 Not at any time at such a volume as to be obstructively audible
outside the Premises to play in the Premises any musical
instrument or sound reproducing amplifying or receiving equipment
3.10.7 Not to erect any pole mast aerial wire or dish for receiving
satellite transmissions upon the outside of the Premises or upon
the inside of the Premises where visible from the outside save
where the permitted use of the Premises necessarily requires the
same and then only with the Lessor's prior written consent (not to
be unreasonably withheld or delayed)
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3.11 SPECIFIED USE
Not to use the Premises except for the Specified Use 3.12 EASEMENTS ETC.
To use all reasonable endeavours to prevent any easement or right
benefiting the Premises from being obstructed or lost and not to allow
any encroachment easement or right to be made acquired or attempted to be
made or acquired over the Premises nor to acknowledge that any right
enjoyed by the Premises is enjoyed by consent of any other person and to
give immediate notice to the Lessor if any easement right or encroachment
affecting or likely to affect the Premises shall be made or attempted and
at the Lessor's request but the joint cost of the Lessee and the Lessor
to take such steps as may be reasonably required to prevent or licence
such easement right or encroachment failing which within a reasonable
period the Lessor and others authorised by it may enter the Premises and
take such steps and the reasonable cost properly incurred by the Lessor
arising out of the Lessee's failure to take such steps together with
interest shall be paid by the Lessee to the Lessor on demand
3.13 SIGNS ETC.
Not to display any signs notices or advertisements in or on the Premises
without the prior written approval in writing of the Lessor such approval
not to be unreasonably withheld or delayed so long as the Lessee shall
comply with the provisions of paragraph 15 of the Fifth Schedule to the
Headlease
3.14 LETTING NOTICES
To permit the Lessor to affix to the Premises (but so as not materially
to obscure the windows or materially to interfere with or disturb the
Lessee's permitted use of the Premises) a letting notice (during the last
six months of the Term) and (at any time during the Term) a "for sale"
notice which notices in either case (provided they do not interfere with
or disturb the Lessee's permitted use of the Premises) shall not be moved
removed or obscured and to permit persons with written authority from the
Lessor or its agents on prior notice at reasonable times of the day to
view the Premises
3.15 EXPENSES
146
To pay all reasonable expenses (including professional fees and costs)
properly incurred by the Lessor the Intermediate Landlord or the Superior
Landlord and any of their respective professional advisers incidental to
3.15.1 the preparation and service of notices under or in or in bona fide
contemplation of proceedings under Sections 146 and/or 147 of the
Law of Property ▇▇▇ ▇▇▇▇ and/or under the Leasehold Property
(Repairs) ▇▇▇ ▇▇▇▇ notwithstanding that any right of re-entry or
forfeiture may have been waived by the Lessor or any notice served
on the Lessee may have been complied with or forfeiture is avoided
otherwise than by relief granted by the Court
3.15.2 the enforcement whether during or after the end of the Term of any
of the Lessee's covenants and the preparation and/or service of
all notices and schedules relating to breaches of the Lessee's
covenants (including all inspections necessary for the preparation
and/or service of such notices or schedules and/or for
ascertaining compliance with them)
3.15.3 all reasonable costs properly incurred in connection with all
applications by the Lessee for any consent required under this
Lease or any request made by the Lessee relating to the Premises
whether under this Lease or otherwise and whether or not such
consent is refused or such application withdrawn but not where the
same is unlawfully or unreasonably withheld or delayed
3.15.4 the recovery of any arrears of rent or other monies payable under
this Lease
3.16 RETURN POSSESSION
At the end of the Term (however it ends) to return possession of the
Premises to the Lessor clean and in the state of repair and decoration in
which this Lease requires the Lessee to keep them and having first
replaced any Lessor's fixtures and fittings which may be missing or
damaged with others of a similar kind and quality to the reasonable
satisfaction of the Lessor's Surveyors and (unless the Lessor shall in
writing have relieved the Lessee of such obligation) having removed or
effaced all signs and having removed all tenants and trade fixtures
147
and fittings and partitioning from and reinstated the Premises to their
state and condition subsisting prior to the carrying out of any
alterations or additions made during the Term and having made good to the
Lessor's reasonable satisfaction and at the Lessee's expense any damage
resulting from such removal and effacing and reinstatement and from the
removal of any tenant's and trade fixtures and fittings
3.17 ASSIGNMENT, UNDERLETTING ETC.
3.17.1 Not to assign or charge only part of the Premises
3.17.2 Not to charge by way of fixed charge the whole of the Premises
without the prior written consent of the Lessor (which shall not
be unreasonably withheld in respect of a bona fide charge in
favour of a clearing bank or other major financial institution)
provided that no consent will be required for a floating charge
over the whole
3.17.3 Not to assign the whole of the Premises without the prior written
consent of the Lessor (which it will not unreasonably withhold or
delay) PROVIDED that the Lessor shall be entitled to withhold its
consent (i) if it shall not be satisfied (acting reasonably) that
the proposed assignee is of adequate financial standing and is
capable of paying the rents payable under and observing and
performing the Lessee's covenants and the conditions contained in
this Lease and that the Lessor shall be entitled (ii) to require
the Lessee to pay to the Lessor all rents and other ascertainable
sums which shall have fallen due (unless they are the subject of a
bona fide dispute) prior to the date of the assignment (iii) to
require that the Lessee enter into a Deed in such form as the
Lessor may reasonably require by which the Lessee shall guarantee
payment of the rents and performance and observance of the
Lessee's covenants and the conditions contained in this Lease by
the proposed assignee so long as this Lease shall remain vested in
the assignee such Deed being an Authorised Guarantee Agreement for
the purposes of the Landlord and Tenant (Covenants) Act 1995 ("▇▇▇
▇▇▇▇ ▇▇▇") (iv) to require that any proposed assignee shall before
being allowed into occupation enter into direct obligations with
the Lessor in a
148
form which the Lessor shall reasonably require and either (v) to
require (if the Lessor shall reasonably so determine) that not
more than two guarantors for that assignee reasonably acceptable
to the Lessor shall enter into obligations by Deed in favour of
the Lessor in the form set out in the Second Schedule to this
Lease (mutatis mutandis) or (vi) (where no guarantee under (v) is
given) to require (if the Lessor shall reasonably so determine)
the proposed assignee to execute and deliver to the Lessor prior
to the assignment a Rent Deposit Deed in such form and for such
sum as the Lessor shall reasonably determine and pay by way of
cleared funds the whole of the sum so determined
3.17.4 Save for an underletting of the whole or a Permitted Part of the
Premises in accordance with the following provisions of this
Clause 3.17 or an assignment or charge in accordance with the
preceding provisions of this clause 3.17 not to underlet share
part with possession or occupation of or grant any licence or
declare any trust in respect of the whole or any part of the
Premises and not in any event to permit or create more than three
occupancies in the Premises PROVIDED THAT the Lessee may permit
any member of the same group of companies as the Lessee or of the
Guarantor or any associated company to occupy the whole or part of
the Premises without the consent of the Lessor so long as the
relationship of landlord and tenant is not thereby created and so
long as such occupation shall be terminated upon such member
ceasing to be a member of such group or an associated company as
aforesaid and provided that the Lessee shall keep the Lessor
informed of the identity of all such occupiers of the Premises
3.17.5 Not to underlet the whole or a Permitted Part of the Premises
without the prior written consent of the Lessor (which shall not
be unreasonably withheld) in the case of an underletting at the
best rent reasonably obtainable for the premises being underlet
without taking a fine or premium and containing (i) provisions for
the upward review of the rent at the same dates as provided by
this Lease and (ii) no provisions in
149
any way commuting rent and (iii) other obligations on the part
of the underlessee consistent with and no less onerous than the
obligations of the Lessee under this Lease (other than the
covenant to pay the rent reserved by this Lease)
3.17.6 That every underlease and sub-underlease whether mediate or
immediate shall contain no less onerous restrictions on
assignment underletting parting with possession sharing
occupation and granting of licences and the same provisions for
direct covenants and registration as are contained in this Lease
3.17.7 To procure that any proposed underlessee shall before being
allowed into occupation enter into a direct covenant with the
Lessor to perform and observe all the Lessees covenants (other
than the covenant to pay rent) and the conditions contained in
this Lease so far as they relate to or affect the underlet
premises and so long as the term to be created by such
underlease shall remain vested in such underlessee and (if the
Lessor shall so reasonably require) that respectable and
responsible guarantors for such underlessee shall enter into
covenants by Deed in favour of the Lessee and the Lessor in such
form as the Lessor may reasonably require in the light of the
proposed underlessee's liabilities
3.17.8 Not to waive expressly or impliedly any of the covenants imposed
in any underlease but upon any breach forthwith to use all
reasonable endeavours to enforce those covenants
3.17.9 To procure that any provisions for the review of rent under any
underlease shall be pursued diligently and upon request to
provide the Lessor with such information as it shall reasonably
require in connection with such review
3.17.10 To give the Lessor notice (and if the Lessor reasonably so
requires at the Lessee's expense to procure that some other
person or corporation acceptable to the Lessor executes a
guarantee in such form as the Lessor shall reasonably require)
within fifty six days of the death or bankruptcy during the Term
of any person who has or shall have guaranteed to the Lessor the
payment of the rent and the observance
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and performance of the Lessees covenants under this Lease or of
such person (being a company) suffering a receiver to be
appointed or passing a resolution to wind up or entering into
liquidation
3.17.11 Not to reduce the rent payable nor to vary any of the provisions
of nor to give any consent required under any permitted
underlease without the previous written consent of the Lessor
which shall not be unreasonably withheld or delayed where such
consent if required under this Lease is not to be unreasonably
withheld or delayed
3.17.12 At the request of the Lessor to use its reasonable endeavours to
terminate lawfully any underlease which is not permitted under
this Lease
3.17.13 Upon completion of each assignment of this Lease to deliver to
the assignee the duplicate of any Health and Safety File for the
Premises prepared under the Construction (Design and Management)
Regulations 1994 ("the CDM Regulations") complete and fully up
dated and obtain a written acknowledgement from the assignee of
receipt of such duplicate and of its understanding of the nature
and purpose of the File and promptly to produce to the Lessor a
true copy of such acknowledgement
3.17.14 To procure that before the grant of any underlease of THE
PREMISES OR a Permitted Part a court order is obtained under the
provisions of Section 38(4) of the Landlord and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
(as amended by Section 5 of the Law of Property Act 1969)
excluding the provisions of Sections 24-28 inclusive of that Act
in relation to the proposed underlease (the agreement excluding
those provisions being contained in the proposed underlease) and
that a certified copy of the order is supplied to the Lessor
3.18 REGISTRATION
3.18.1 Within fourteen days after any assignment of this Lease to give
written notice to the Lessor of the name and address of the
party to whom all future demands for rent and other moneys
payable under this Lease are to be addressed and within
twenty-one days after any assignment
151
charge by way of fixed charge underlease or devolution of the
Premises or any part of them or any interest in them (including
the surrender or forfeiture of any underlease) or change of name
of the Lessee or any guarantor to give notice of such event in
writing to the Solicitors for the time being of the Lessor and
to provide them with a certified copy of the document effecting
such event and to pay to such Solicitors a registration fee
of(pound)25.00 or such larger sum as such Solicitors shall
reasonably require
3.18.2 Within 21 days after the rent payable upon review of rent
in any underlease of the Premises or any part of them
shall have been ascertained (whether by agreement
arbitration or otherwise) to notify the Lessor in writing
of the rent so ascertained and deliver to the Lessor a
certified copy of the award of any arbitrator or expert
engaged in connection with such review and as soon as
practicable thereafter a memorandum recording the revised
rent signed by or on behalf of the parties to such review
3.19 NOTICES
At the Lessees expense to comply with any notice order proposal
requisition direction or other thing received from a competent authority
and affecting or likely to affect the Premises their use or their owner
or occupier or the Lessors interest in the Premises and forthwith to
deliver to the Lessor a copy of such notice order proposal requisition
direction or other thing and at the reasonable request of the Lessor to
make or join with the Lessor in making such objections and
representations against or in respect of any such matters as the Lessor
shall reasonably deem expedient
3.20 NOT TO OVERLOAD ETC.
Not to erect on or suspend from the Premises or any part of them
anything which will or may overload any floor wall roof or any other
part of the structure or structural frame of the Premises
3.21 COMPLIANCE WITH STATUTE
Without prejudice to the general terms of Clause 3.4 at all times during
the Term to comply at the Lessee's expense with the provisions of any
relevant legislation
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for the time being in force including the Town & County Planning ▇▇▇
▇▇▇▇ and Safety at Work etc. ▇▇▇ ▇▇▇▇ the ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ the Offices
Shops and the Railway Premises Act 1963 The Fire Precautions ▇▇▇ ▇▇▇▇
the CDM Regulations the Public Health Acts and the Clean Air Acts and
with any regulations or orders made and all licences consents and
conditions granted or imposed under such legislation so far as the same
relate to or affect the Premises or their use their owner or occupier or
the Lessors interest in them and as often as occasion shall require to
obtain at the Lessee's expense all such licences and consents as may be
necessary under such legislation for any use of or permitted
improvements alterations or additions to the Premises and not to do or
omit on or about the Premises any act or thing by reason of which the
Lessor may under any such legislation incur or become liable to pay any
levy penalty damages compensation costs charges or expenses and at all
times during the Term to ensure that the Lessor and the Health and
Safety Executive are promptly notified of any changes to the Health and
Safety File in respect of the Premises prepared under the CDM
Regulations (the Lessee being (as it hereby acknowledges) "the client"
for the purposes of those Regulations) so that in particular the Lessor
can satisfy itself that the original of any such File maintained by it
is complete and up to date and to keep the Lessor fully indemnified
against all proceedings costs expenses and demands in relation to any
such matters and to produce to the Lessor such licences consents and
other documents and evidence as the Lessor may reasonably require in
order to satisfy itself that the provisions of this Clause 3.21 have
been complied with in all respects
3.22 PLANNING
3.22.1 Not to apply for nor procure the application by any third party
for any planning consent (which expression shall include any
outline or detailed consent or any approval of reserved matters
or any appeal to the Secretary of State for the Environment)
relating to the Premises (whether or not in conjunction with
other premises) without the Lessor's prior written consent which
shall not be unreasonably withheld or delayed in respect of any
matter in relation to which the Lessor's consent is not under
the other provisions of this Lease to be unreasonably withheld
or delayed
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3.22.2 As soon as practicable after the grant of planning consent to
the Lessee to give to the Lessor a full copy of it and of the
application for it and its supporting drawings and
specifications and calculations (if any)
3.22.3 Unless the Lessor shall otherwise direct the Lessee shall carry
out or cause to be carried out before the end of the Term any
works stipulated to be carried out to the Premises by a date
later than the end of the Term as a condition of any planning
consent which may have been implemented by the Lessee during the
Term
3.22.4 To produce to the Lessor such plans documents and evidence as
the Lessor may reasonably require in order to satisfy itself
that the provisions of this Clause 3.22 have been complied with
in all respects
3.23 VALUE ADDED TAX
Where by virtue of any of the provisions of this Lease the Lessee is
required to pay or repay to the Lessor or to any other person any costs
fee charge or expense or other sum in respect of the supply of any goods
or services by the Lessor or any other person (including for the
avoidance of doubt any rent payable hereunder) then save where the
Lessor is entitled to recover the same the Lessee shall also be required
to pay and shall keep the Lessor and such other person indemnified
against the amount of any Value Added Tax which may be chargeable in
respect of such supply or which the Lessor may elect to charge in
respect of it PROVIDED THAT a valid Value Added Tax invoice containing
the particulars prescribed in Regulation 14 of the Value Added Tax
(General) Regulations 1995 (as amended) is rendered to the Lessee in
respect of the supply of any goods or services by the Lessor
3.24 INDEMNITY
To indemnify the Lessor against all liability and costs (including any
increase in insurance premium) in respect of any breach of covenant on
the part of the Lessee or any works carried out at any time during the
Term to the Premises by the Lessee anything now or during the Term
attached to or projecting from the Premises any act neglect or omission
by the Lessee or any underlessee or by their respective servants or
agents or by any persons in the Premises with the
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actual or implied authority of any of them or out of infringement
disturbance or destruction during the Term by the Lessee of any right or
easement
3.25 INFORMATION
To provide within fourteen days of receipt of a written request from the
Lessor such information as the Lessor may reasonably require as to the
occupation of the Premises including details of all underlettings and
licences granted by the Lessee and the full names and addresses of all
persons in actual or deemed possession of the Premises and each and
every part of them
3.26 NOTIFY DAMAGE
Immediately upon becoming aware of it to give written notice to the
Lessor of any damage to the Premises caused by any of the Insured Risks
and of any defect in the Premises which if not remedied might give rise
to any third party claim or to any obligation on the Lessor to do or
refrain from doing any act or thing to comply with any legal duty of
care and at all times to display and maintain on the Premises all
notices which the Lessor may from time to time reasonably require to be
displayed but which shall not be required to be displayed in such a
position as to interfere with the Lessee's business
3.27 BAILIFF'S FEES
To pay all fees properly incurred by the Lessor to any bailiff
instructed by the Lessor for the collection of any rent or other sum due
under this Lease
3.28 FIRE FIGHTING EQUIPMENT AND SECURITY
3.28.1 To keep the Premises supplied and equipped with all fire
fighting and extinguishing appliances from time to time required
by law or required by the insurers of the Premises such
appliances being kept open to inspection and properly maintained
and not to obstruct the access to or means of working such
appliances or the means of escape from the Premises in case of
fire
3.28.2 To take expeditiously all requisite steps to obtain any
necessary fire certificate for the Premises
3.28.3 To ensure that at all times the Lessor has written notice of the
name and address and telephone number of at least one keyholder
of the Premises
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3.28.4 At any time that the Premises or any part of them is unoccupied
to take all reasonable precautions to prevent vandalism theft
and unlawful occupation
3.29 INTERMEDIATE LEASE
Not to do omit suffer or permit in relation to the Premises any act or
thing that would or might cause the Lessor to be in breach of the
Intermediate Lease or that if done omitted suffered or permitted by the
Lessor would or might constitute a breach of the covenants on the part
of the tenant and the conditions contained in the Intermediate Lease and
to observe the covenants referred to in the Property and Charges
Register of title HP389500 (so far as aforesaid) and to indemnify the
Lessor against all actions claims costs expenses and liabilities in
respect of them
4. LESSOR'S COVENANTS
The Lessor covenants with the Lessee as follows:
4.1 QUIET ENJOYMENT
That the Lessee paying the rent and other monies payable under and
observing and performing the Lessee's covenants and stipulations
contained in this Lease shall peaceably hold and enjoy the Premises
during the Term without any interruption by the Lessor or any person
rightfully claiming by through under or in trust for it or by title
paramount
4.2 HEADLEASE
4.2.1 To pay the rents reserved by the Intermediate Lease and to
perform and observe the tenants covenants and conditions
contained therein insofar as the Lessee is not liable for such
performance under the covenants on its part contained in this
Lease and to indemnify the Lessee against all actions costs
claims expenses and liabilities in respect of any breach of this
covenant
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4.2.2 On the request and at the reasonable cost of the Lessee to use
all reasonable endeavours to enforce the covenants on the part
of the Intermediate Landlord contained in the Intermediate Lease
4.2.3 To use all reasonable endeavours at the cost of the Lessee to
obtain the consent of the Intermediate Landlord whenever the
Lessee makes application for any consent required under this
Sublease and such consent is also required pursuant to the
provisions of the Intermediate Lease
4.2.4 To provide on request details of the insurance maintained by the
Superior Landlord (or the Lessor as the case may be) in respect
of the Premises and to use reasonable endeavours to procure that
the interest of the Lessee is noted on the policy of insurance
whether by specific or general indorsement
4.3 Unless otherwise directed in writing by the Lessee or its successors in
title or unless the Lessee or its successors in title no longer has any
legal interest in the Premises at the time of service of the notice
herein referred to the Lessor hereby covenants that it will not serve
notice to terminate the Intermediate Lease pursuant to Clause 7(2) of
the Intermediate Lease and that it will procure that upon any assignment
of the interest of the Lessor as tenant under the Intermediate Lease the
assignee will enter into a covenant in identical terms to this covenant
directly with the Lessee or its successors in title
5. PROVISOS
PROVIDED ALWAYS and it is agreed between the parties as follows:
5.1 INTEREST
That if the rent or any part of it shall at any time be unpaid within 7
days of the due date or any other monies due by the Lessee to the Lessor
shall at any time be unpaid within fourteen days of the due date
(whether in respect of rent any formal demand shall have been made or
not) then the Lessee shall on demand pay to the Lessor in addition
Interest on such sum for the period from the date when such sum became
due to the date of payment to the Lessor
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5.2 FORFEITURE
That
5.2.1 if the rent or any part of it or any Interest payable or any
other monies due by the Lessee to the Lessor shall at any time
be unpaid for twenty one days (whether in respect of rent any
formal demand shall have been made or not) or
5.2.2 if the Lessee shall fail to perform or observe any of its
covenants or stipulations in this Lease or
5.2.3 if the Lessee for the time being shall be wound up or an
administration order made against it/him or is adjudged bankrupt
or enters into liquidation (except voluntarily for the purpose
of amalgamation or reconstruction) or suffer a Receiver or an
Administrative Receiver or a Receiver and Manager to be
appointed or become subject to an administration order under the
Insolvency Act 1986 or enter into an agreement or composition
for the benefit of its creditors or have a receiving order made
against him
then it shall be lawful for the Lessor or any persons duly authorised by
it to forfeit this Lease by entering the Premises or any part of them
and the Term shall thereupon absolutely cease and be of no further
effect but without affecting any liability in respect of any breach of
any of the Lessee's or guarantor's covenants which shall already have
accrued
5.3 EXCLUSION OF WARRANTY
Nothing in this Lease or in any consent granted by the Lessor under this
Lease shall imply or warrant that the Premises may be used for the
purpose permitted by this Lease so far as concerns any statutes relating
to town and country planning or that any alterations or additions or
other works to the Premises which the Lessor may permit under the
provisions of this Lease will not require planning permission and it is
agreed that in entering into this Lease the Lessee does not rely on any
such warranty given by the Lessor or by any person on its behalf
5.4 LESSEE'S EFFECTS
The Lessee hereby irrevocably appoints the Lessor to be its agent to
store or dispose of any effects left by the Lessee on the Premises after
the end of the
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Term on such terms as the Lessor thinks fit and without the Lessor being
liable to the Lessee save to account for the net proceeds of sale less
the cost of storage (if any) and any other expenses reasonably incurred
by the Lessor PROVIDED THAT the Lessee will indemnify the Lessor against
any liability incurred by it to any third party whose property shall
have been sold by the Lessor in the mistaken belief (which shall be
presumed unless the contrary be proved) that such property belonged to
the Lessee and was liable to be dealt with as such pursuant to the
provisions of this clause 5.4
5.5 ACCEPTANCE OF RENT
5.5.1 The demand for and/or acceptance of any of the rents reserved by
or any other monies due under this Lease by the Lessor or its
agents shall not constitute or be deemed a waiver of any of the
Lessees or any guarantors or subtenants covenants nor of any
breach of such covenants or of any of the conditions contained
in this Lease or in any Underlease or of any of the Lessor's
remedies in respect of such breach and neither the Lessee nor
any guarantor nor any subtenant shall in any proceedings for
forfeiture plead or otherwise propose any such demand or
acceptance as a waiver by the Lessor or as a defence for the
Lessee guarantor or such sub-tenant (as the case may be)
5.5.2 If the Lessor shall (by virtue of its reasonable belief that the
Lessee or any guarantor or any subtenant is in breach of
covenant or condition or might acquire against the Lessor any
right or entitlement not expressly hereby granted) refrain from
demanding or accepting rent or any other moneys due under this
Lease then Interest shall be payable by the Lessee upon such
rent or moneys for the period during which the Lessor shall so
properly refrain
5.6 NOTICES
Any notice required to be served on any party shall be sufficiently
served if it is sent by recorded delivery or registered post in a
stamped envelope addressed to the Lessee Lessor or any guarantor at its
registered office or address for service in the United Kingdom but if
there shall be no such address at its last known place of abode or
business and if sent by recorded delivery or registered post
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such service shall be deemed to be made on the working day following the
date of posting
5.7 RENT SUSPENSION
In the event of the Premises or any part of them at any time during the
Term being damaged or destroyed by any of the Insured Risks (as that
expression is defined in the Headlease) in respect of which the Lessor
or the Intermediate Landlord or the Superior Landlord (as appropriate)
is indemnified under insurance of the Premises so as to render the
Premises incapable of occupation and use then (save to the extent that
the insurance moneys become irrecoverable through any act or default of
the Lessee or any person under its control) the rent reserved by this
Lease or a fair proportion of it according to the nature and extent that
the Premises shall be incapable of occupation and use shall be suspended
until either the Premises shall again be capable of use and occupation
or for a period ("the Rent Insurance Period") equal to the number of
years for which insurance against loss of rent has been effected under
the Superior Landlord's covenant in the Headlease (whichever is the
shorter period)
5.8 LESSOR'S LIABILITY
In any case where the facts are or should reasonably be known to the
Lessee the Lessor shall not in any event be liable to the Lessee in
respect of any failure of the Lessor to perform any of its obligations
to the Lessee hereunder whether express or implied unless and until the
Lessor has or ought reasonably to have become aware of the facts giving
rise to the failure and the Lessor has failed within a reasonable time
to remedy the same
5.9 HEADLEASE RENT REVIEWS
The Lessee shall subject to the prior approval of the Lessor and of the
Intermediate Landlord (such approval not to be unreasonably withheld or
delayed) at its own expense act as the agents for the Lessor and the
Intermediate Landlord in conducting the review of rent under the
Headlease at 24 June 2004 and 24 June 2009 and in doing so the Lessee
shall keep the Lessor and the Intermediate Landlord informed at all
times of the progress of and all material aspects of all negotiations
between the Lessee and the Superior Landlord and/or their respective
surveyors or agents and shall give full and
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proper consideration to all proposals observations and arguments in
respect of such reviews as the Lessor or the Intermediate Landlord may
make or raise and shall put (or procure to be put) such proposals
observations and arguments to the Superior Landlord and/or its surveyors
or agents or to any independent expert appointed to determine the review
of rent under the Headlease PROVIDED that the Lessee shall not settle
such reviews of rent or agree any rent payable following such reviews
without the prior express written approval of the Lessor and of the
Intermediate Landlord (such approval not to be unreasonably withheld or
delayed)
5.10 Exclusion of Landlord and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Having been authorised so to do by an Order of the [ ] County Court
dated the [ ] day of [ ] 2002 under the provisions of section 38(4) of
the Landlord and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ the Lessor and the Lessee hereby agree
that the provisions of sections 24-28 of the said Act shall be excluded
in relation to the tenancy hereby created
6. RENT INCREASE AND REVIEW
6.1 During each Review Period the Lessee shall pay to the Lessor in each
year rent being whichever is the greater of a sum equal to the rent
payable immediately prior to the relevant Review Date or such reviewed
rent as may be agreed or determined as provided below (whichever is the
greater)
6.2 The Rent shall be reviewed in accordance with the provisions of
paragraphs 3 to 5 of Part 1 of the Fourth Schedule of the Headlease
which provisions shall be incorporated in this Lease as if the same were
set out herein in extenso so that references in those provisions to "the
Landlord" and "the Tenant" after such incorporation are references to
the Lessor and the Lessee in this Lease but with the following
modifications:
6.2.1 "the Review Date" and "the Review Period" are defined as
set out in clause 1.1 6.2.2 In the definition of the
"Market Rent":
6.2.2.1 "12 years" shall be substituted for "25" years in line 8
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6.2.2.2 references to "this Lease" mean this Sublease
6.2.2.3 in disregard (d) the words "or the Superior Landlord or
the Intermediate Landlord" shall be added after "the
Landlord"
6.3 The expression "the Rent" shall be substituted for the
expression "the Rent under this part of this Schedule"
7. OPTIONS TO TERMINATE LEASE
7.1 If by damage or destruction by an Insured Risk (as that expression is
defined in the Headlease) the Premises or a substantial part of them
shall at any time be rendered unfit for occupation or use for the
Specified Use or inaccessible and the Premises shall not have been
reinstated and rendered capable of occupation for the Specified Use by
three months before the end of the Rent Insurance Period then either
party may thereupon determine the Term and this Lease by not less than
three calendar months notice in writing to that effect served upon the
other and upon the expiration of such notice this Lease and the Term
shall cease and be of not further effect (but without affecting the
liability of the Lessor or the Lessee for any breach of covenant which
shall already have accrued) PROVIDED that no such notice shall be valid
if served more than five weeks after the expiration of the Rent
Insurance Period or if at that date of service or expiration of such
notice the Premises shall in fact have been so reinstated and rendered
capable of occupation and use for the Specified Use and PROVIDED that
any insurance monies payable under the policy of insurance for the
Premises shall be paid to and belong to the Lessor or the Superior
Landlord (as the case may be) for its own use
7.2 If the Lessee shall desire to terminate this Lease at any time during
the period of 12 months after the Term Commencement Date (but on no
other date) and shall have served on the Lessor not less than 3 calendar
months prior written notice of such desire this Lease shall upon expiry
of the notice served by the Lessee cease and absolutely determine (but
without prejudice to any rights or claims in respect of any subsisting
breach of covenant) and the Lessee shall deliver up to the Lessor full
vacant possession of the Premises and materially in accordance with the
covenants on the part of the Lessee hereinbefore contained
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8. GUARANTOR'S COVENANTS
The Guarantor in consideration of the grant of this Lease to the Lessee
at the request of the Guarantor covenants with the Lessor in the manner
set out in the Second Schedule
IN WITNESS whereof the parties have executed this Lease as their Deed the day
and year first before written
THE FIRST SCHEDULE
PART I
RIGHTS GRANTED
The rights granted by the Second Schedule to the Headlease
PART II
RIGHTS RESERVED
The exceptions and reservations contained in the Third Schedule to the Headlease
THE SECOND SCHEDULE
GUARANTEE
The Guarantor guarantees to and covenants with and for the benefit of the Lessor
(which expression shall for the purpose of this guarantee and covenant include
the Lessor's successors in title to the reversion without the need for express
assignment)
1. that the Lessee (here meaning [ ]) will at all times (a) until a
permitted assignment of this Lease by the Lessee pay the rent and all
other sums agreed to be paid by the Lessee when due and will also duly
perform and observe its covenants and the stipulations in this Lease and
(b) after a permitted assignment of this Lease duly perform and observe
its covenants and the stipulations contained in any Deed which the
Lessee shall enter into under
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the terms of Clause 3.17.3 of this Lease ("an Authorised Guarantee
Agreement") and that the Guarantor will if the Lessee shall make any
default in payment of such rent or any other sums or in the performance
and observance of such covenants and stipulations pay the rent and
monies and observe or perform the covenants or stipulations in respect
of which the Lessee shall be in default and will make good to and
indemnify the Lessor in respect of all losses damages liability costs
and expenses sustained by the Lessor through the default of the Lessee
PROVIDED ALWAYS that the liability of the Guarantor shall be no greater
than the liability of the Lessee to the Lessor in respect of the act or
default giving rise to the liability and any neglect or forbearance of
the Lessor in endeavouring to obtain payment of the rent or other monies
when the same become due or any refusal by the Lessor to accept rent
tendered by or on behalf of the Lessee at a time when the Lessor may be
entitled (or would after service of a notice under Section 146 of the
Law of Property ▇▇▇ ▇▇▇▇ be entitled) to re-enter the Premises or any
delay by the Lessor in taking any steps to enforce performance or
observance of the said covenants or stipulations and any time or
indulgence which may be given by the Lessor to the Lessee or the fact
that the reversion to this Lease may have been assigned or that the
Lessee may have ceased to exist or be under any legal limitation or any
immunity disability or incapacity or any other act or thing (save for
the provisions of the ▇▇▇▇ ▇▇▇) whereby but for this provision the
Guarantor would have been released shall not release or in any way
lessen or affect the liability of the Guarantor under this guarantee
2. that if the Lessee shall enter into liquidation or become bankrupt and
the liquidator or trustee shall disclaim or surrender this Lease or if
this Lease shall be forfeited or if the Lessee shall cease to exist then
the Guarantor will be required by the Lessor in writing within three
months after such disclaimer or other event accept from the Lessor a
lease of the Premises for a term equal to the residue of the Term
unexpired at the date of such disclaimer or other event and containing
the same rent covenants provisos and other terms as this Lease shall
execute and deliver to the Lessor a counterpart and shall pay the
reasonable and proper costs of such new lease
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3. that if for any reason the Lessor does not require the Guarantor of any
of them to accept a new lease of the Premises as mentioned above then
the Guarantors shall pay to the Lessor on demand an amount equal to the
rent reserved by and other sums payable under this Lease at the date of
such disclaimer or other event for the period commencing with such date
and ending of whichever is the earliest of the following dates:
3.1 the expiration of six calendar months after such date
3.2 the expiration of the Term
3.3 the date (if any) upon which the Premises shall be
re-let
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SCHEDULE 4
WARRANTIES
PART 1
1 CAPACITY OF THALES AND THE COMPANIES
1.1 Thales and each of the Companies are duly organised and validly existing
under all applicable laws.
1.2 Thales and the Companies have the requisite power and authority to enter
into and perform this Agreement and the other documents which are to be
executed by each of them pursuant to this Agreement (the "Thales
Completion Documents").
1.3 The Thales Completion Documents will, when executed by Thales and each
of the Companies constitute binding obligations of Thales and each of
the Companies in accordance with their respective terms.
1.4 The execution and delivery of, and the performance by Thales and each of
the Companies of their respective obligations under the Thales
Completion Documents will not:
1.4.1 result in a breach of, or constitute a default under, any
instrument to which Thales or any of the Companies is a party or
by which Thales or any of the Companies is bound; or
1.4.2 result in a breach of any order, judgment or decree of any court
or governmental agency to which Thales or any of the Companies
is a party or by which Thales or any of the Companies is bound;
or
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1.4.3 require the consent of the shareholders of Thales or any of the
Companies or of any other person; or
1.4.4 require Thales or any of the Companies to obtain any consent or
approval of, or give any notice to or make any registration
with, any governmental or other authority which has not been
obtained or made at the date hereof both on an unconditional
basis and on a basis which cannot be revoked (save pursuant to
any legal or regulatory entitlement to revoke the same other
than by reason of any misrepresentation or misstatement).
OVERSEAS OPERATIONS
1.5 The description of the overseas operations of the Business set out in
the Disclosure Letter is a true and accurate description of the overseas
operations of the Business.
2 FINANCIAL
2.1 The Accounts of TCSL have been prepared in accordance with the
requirements of all relevant statutes and with generally accepted
accountancy principles and practice applicable or prevailing in the
United Kingdom and show a true and fair view of the assets and
liabilities of TCSL and of its profits or loss for financial period
ending on the Accounting Date.
2.2 The Accounts of TCSA have been prepared in accordance with the
requirements of all relevant statutes and with generally accepted
accountancy principles and
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practice applicable or prevailing in France and show a true and fair
view of the assets and liabilities of TCSA and of its profits or loss
for the financial period ending on the Accounting Date.
2.3 The Accounts of TCS GmbH have been prepared in accordance with the
requirements of all relevant statutes and with generally accepted
accountancy principles and practice applicable or prevailing in Germany
and show a true and fair view of the assets and liabilities of TCS GmbH
and of its profits or loss for the financial period ending on the
Accounting Date.
2.4 The Accounts of TCS Inc. have been prepared in accordance with the
requirements of all relevant statutes and with generally accepted
accountancy principles and practice applicable or prevailing in the
United States of America and show a true and fair view of the assets and
liabilities of TCS Inc. and of its profits or loss for the financial
period ending on the Accounting Date.
2.5 Without limiting the generality of warranties 2.1 to 2.4 (inclusive) the
results shown by the Accounts of TCSL and the audited accounts of TCSL
for the period ending 31 December 2000 did not (except as therein
disclosed) record any "extraordinary" or "exceptional" item (as such
terms are currently interpreted by Financial Reporting Standards
applicable to any of the Companies).
2.6 Thales confirms that it has reviewed all entries regarding TCS Companies
combination that have been prepared according to the accounting
principles of this Agreement. As result of this review Thales confirms
that it is not aware of adjustments, whether in terms of additional
provisions for inventory, additional provisions for liabilities or other
adjustments that are, or reasonably could be, of relevance in the
context of Nice obligation to provide an audit certificate on the
Completion Accounts of TCS at the Completion Date.
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2.7 Thales confirms that the Accounts Combination Statement has been
prepared in accordance with the Accounting Principles and further
confirms that it has reviewed all the consolidation entries that have
been prepared in order to produce the consolidated accounts of Thales
(both in terms of the holding company consolidation and any relevant
consolidations at intermediate holding company level) at 31 December
2001 and 30 June 2002 and there are no consolidation adjustments,
whether in terms of additional provisions for inventory, additional
provisions for liabilities or other adjustments that are, or could
reasonably be held to be, of relevance in the context of the calculation
of the NAV Target.
MANAGEMENT ACCOUNTS
2.8 Attached to the Disclosure Letter are the Management Accounts together
with the unaudited financial report of TCSA to 30 June 2002.
2.9 The Management Accounts reasonably and fairly represent the profits or
losses of each of the TCS Group (excluding TCSA) for the five month
period to 31 May 2002 and the unaudited financial report of TCSA to 30
June 2002 reasonably and fairly represents the profits or losses of TCSA
for the six month period to 30 June 2002.
OPERATION OF THE BUSINESS
2.10 Since the Accounting Date:
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2.10.1 each of the Companies have carried on the Business in the
ordinary and usual course with a view to maintaining the same as
a going concern and without entering into any transaction, or
assuming any liability which is not in the ordinary and usual
course of the Business; except as contemplated by or permitted
by the terms of this Agreement;
2.10.2 there has been no material interruption or alteration in the
nature, scope or manner of the business of any of the Companies;
2.10.3 no substantial customer of or supplier to any of the Companies
(being a customer or supplier accounting for more than 5% (five
per cent) of the turnover of the Business for the accounting
period ending on the Accounting Date) has:
(a) indicated that it is likely to cease trading with or
supply to any of the Companies;
(b) indicated that it is likely to reduce substantially its
trading with any of or supplies to the Companies; or
(c) indicated that it is likely to change substantially the
terms upon which it is prepared to trade with or supply
to any of the Companies (other than normal price and
minor changes);
2.10.4 there has been no material increase in the average collection
periods for the debtors and no material decrease in the payment
periods for the creditors and each of the Companies have
continued to pay all creditors
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and received payments from all debtors in the ordinary course of
their business consistent with the normal practice of the
Business;
2.10.5 none of the Companies have acquired, sold, transferred or
otherwise disposed of any material assets or cancelled, waived,
released or discounted in whole or in part any material rights,
debts or claims of any of the Companies, except in each case in
the ordinary course of the business of any of the Companies and
in a manner consistent with prior practice; except as
contemplated by or permitted by the terms of this Agreement;
2.10.6 the Companies have not entered into any commitment involving
capital expenditure on capital account which is still
outstanding;
2.10.7 other than changes in the amount of Cumulative Orders of the
Business in the period 1 January 2002 to 30 June 2002 as
provided for in clause 7.7 of this Agreement, there has been no
material adverse change in the financial or trading position or
(save to the extent that the same would be likely to affect to a
similar extent generally all companies carrying on similar
businesses in the United Kingdom, France, Germany or the United
States) in the prospects of the Business taken as a whole and no
event, fact or matter has occurred which is likely to give rise
to any such change;
2.10.8 no material debtor of the Business has been released by Thales
or any of the Companies on terms that it pays less than the book
value of its debt and no material debt owing to Thales or any of
the Companies in connection with the Business taken as a whole
has been deferred, subordinated or written off or;
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2.10.9 no material change has been made in the terms of employment of
the Employees (other than those required by law);
2.10.10 no debts or other receivables and no stock, goods, plant,
machinery or equipment of any of the Companies (in relation to
the Business) have been factored or sold, or agreed to be sold,
apart from the sales of finished products in the routine course
of trading;
2.10.11 neither Thales or any of the Companies (in relation to the
Business) have offered material price reductions, discounts or
allowances on sales of trading stock or services;
2.10.12 no agreements have been entered into or give effect or
arrangements put in place to transfer any customers or suppliers
of the Business to the business of any of Thales or any of the
Companies;
2.11 The Disclosure Letter incorporates a list of all outstanding guarantees,
performance bonds, letters of credit or similar instruments given by
Thales or any of the Companies or any other person in respect of the
Business.
GRANTS AND ALLOWANCES
2.12.1 The Disclosure Letter contains full particulars of all central
and local government grants, subsidies and allowances which have
been applied for or received by Thales or any of the Companies
relating to the Business during the last four (4) years. No such
grant, subsidy or allowance will become repayable by the
Purchasers as a result of the sale of the Business.
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2.12.2 Neither Thales or any of the Companies has done or failed to do
any act or thing which could result in all or any part of an
investment grant or similar payment or allowance made or due to
be made to it becoming repayable or forfeited by it.
COMPLIANCE WITH APPLICABLE LAWS
2.13 The Companies have conducted the Business in all material respects in
accordance with all applicable laws and regulations of the United
Kingdom or any other jurisdiction in respect of whose laws the Business
is subject.
2.14 The Companies are not in default in any order, decree or judgment of any
court or any governmental or regulatory authority (whether in the United
Kingdom or any other jurisdiction) which applies to the Business.
US EMBARGO ENTITIES
2.15 Neither Thales or any of the Companies is, in relation to the Business,
party to any subsisting agreement, obligation or arrangement relating to
the conduct of Business with any person, entity, governmental body or
organisation of or in a US Embargo Country.
3 EMPLOYEES
3.1 The Employees are all the employees employed in the Business as at the
date of this Agreement.
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3.2 In relation to each Employee there are contained in the Disclosure
Letter full particulars of:
3.2.1 any written service or employment agreement or (as appropriate)
any standard form of particulars of employment applicable and
issued to Employees;
3.2.2 each Employee's name, sex, job title, place of work and date of
commencement of employment (including any employment with a
previous employer which counts as continuous employment for the
purposes of any relevant employment legislation in the
jurisdiction in which the relevant employer is incorporated);
3.2.3 each Employee's rate of remuneration, bonus and commission, any
other benefit of any kind to which they are entitled or which is
regularly provided or made available to Employees and the period
of notice, entitlement to holidays and holiday bonuses
applicable to Employees;
3.2.4 particulars of any collective agreement affecting Employee's
terms of employment, including disciplinary or grievance
procedures and any procedures to be followed in the case of
redundancy or dismissal; and
3.2.5 details of any other terms and conditions of employment.
3.3 There are no subsisting contracts for the provision by any person of any
consultancy services to the Companies in connection with the Business.
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3.4 Save as disclosed in the Disclosure Letter the Companies have no
profit-sharing, share option or share incentive schemes or other
employee benefit plans (excluding retirement benefit plans) in relation
to any Employee.
3.5 Save as disclosed in the Disclosure Letter the Companies have no
collective bargaining agreements or arrangements with trade unions, or
employee bodies (whether or not elected), relating to the Employees.
3.6 Thales and/or the Companies are not in connection with the Business
involved in any industrial or trade dispute or any other dispute or
negotiation of a material nature with any trade union, body of employees
or material number of employees.
3.7 Save to the extent (if any) to which provision or allowance has been
made in the Accounts:
3.7.1 no liability has been incurred by any of the Companies for
redundancy payments or for compensation for wrongful or unfair
dismissal or in relation to the dismissal of any employee of the
Companies or for failure to comply with any order for the
reinstatement or re-engagement of any employees or for breach of
contract or for breach of any other legislative provision; and
3.7.2 no gratuitous payment has been made or promised by any of the
Companies in connection with the actual or proposed termination
or suspension of employment or variation of any contract of
employment of any present or former director or employee.
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3.8 No employee of any of the Companies is suffering from any medical
condition, long term sickness or disability which has necessitated or,
so far as Thales is aware, is expected to necessitate absence from work
for a period of eight weeks or longer.
3.9 None of the Employees are on maternity leave on the date of this
Agreement.
3.10 There is no outstanding or threatened claim or dispute by or with any
unions or any other body representing all or any of the Employees of any
of the Companies in relation to their employment by any of the Companies
nor so far as Thales is aware are there any circumstances likely to give
rise to any such claim or dispute.
3.11 No change, and no negotiation or request for a change in the emoluments
or other terms of engagement of any of the Employees is due or would
ordinarily take place consistent with past practice of the Business
within six months from the date of this Agreement.
3.12 (a) No Employee of any of the Companies has given or so far as Thales is
aware is expected to give notice terminating his contract of employment
nor is under notice of dismissal. (b) So far as Thales is aware no
Employee has threatened (or is expected to threaten) any litigation,
arbitration or mediation, administration or criminal proceeding in
connection with or arising from his employment.
3.13 Thales and the Companies have maintained up-to-date and adequate records
regarding the employment of the Employees (including, without
limitation, details of terms of employment, payment of sick pay and
maternity pay, income tax and social security contributions,
disciplinary and health and safety matters and adequate records for the
purposes of the time keeping under relevant legislation).
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3.14 Thales and the Companies have not borrowed any money from any of the
Employees and have not made any loans to any of the Employees which have
not been repaid in full.
3.15 There are no schemes or agreements in operation under which any of the
Employees is entitled to a bonus, commission or profit related
remuneration of any kind payable or calculated by reference in whole or
in part to the turnover, profits, sales or other financial performance
of the Business, Thales or the Companies or any company connected with
Thales or the Companies.
3.16 All contracts of service or consultancy or for services with directors
or employees or other persons providing personal services to the
Business whether directly or indirectly can be terminated by three
months' notice or less without giving rise to any claim for damages or
compensation (other than a statutory redundancy payment or statutory
compensation for dismissal, if applicable).
3.17 There is no express term of employment for any Employee which provides
that a sale of the Business shall entitle the Employee to treat such
sale as amounting to a breach of the contract or entitling him to any
payment or benefit whatsoever or entitling him to treat himself as
redundant or otherwise dismissed or released from any obligation.
3.18 Thales and the Companies have no obligation to make any payment on
redundancy in excess of a statutory redundancy payment and Thales and
the Companies have not operated any discretionary practice of making any
such excess payments. Thales and the Companies do not have a written
redundancy policy.
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3.19 There is no agreement between Thales and the Companies and an Employee
with respect to his/her employment, his ceasing to be employed or his
retirement that is not included in his/her written terms of employment
or previous employment other than retirement benefits disclosed at
Schedule 6 and/or the Disclosure Letter.
4 PENSIONS
In this warranty schedule:
"PERSONAL PENSION SCHEME" means the personal pension scheme approved for
the purposes of Chapter IV of Part XIV of ICTA 1988 to which the Thales
Group makes employer contributions in respect of ▇▇ ▇▇▇▇▇.
"APPROVED" means approved by the Inland Revenue for the purposes of
Chapter 1 of Part XIV of ICTA 1988.
4.1 Save for the Personal Pension Scheme and Thales' Schemes as at the date
of this Agreement there are not (and never have been any) agreements,
arrangements, customs or practices (whether legally enforceable or not)
in operation for the provision of or payment of contributions towards
any pensions, allowances, lump sums or other like benefits on before or
after retirement or death or termination of employment (whether
voluntary or not), or disablement for the benefit of any Employee or an
Employee's dependants, nor has any proposal been announced or promise
made to establish any such agreement, arrangement or practice and no
individual has any contractual entitlement for the provision of
retirement benefits other than in accordance with the relevant governing
provisions of the Personal Pension Scheme and Thales' Schemes as
disclosed to the Purchasers. The Companies have duly complied with all
applicable legal and administrative requirements relating to stakeholder
pension schemes (as defined in Section 1(1) of the Welfare Reform and
Pensions Act
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1999) and has disclosed all material details of the pension schemes
designed by the Companies in relation to the Employees.
4.2 All particulars of each of the Thales' Schemes required to permit the
Purchasers to form a true and fair view of each of the Thales' Schemes,
their legal status and the benefits provided or to be provided
(including contingently) under them for Employees or an Employee's
dependants have been provided in the Disclosure Letter including for the
avoidance of doubt:
4.2.1 a copy of each agreement, deed and all rules governing or
relating to the Thales' Schemes;
4.2.2 a copy of each explanatory document of current effect including
the members' booklet and any announcements issued to an Employee
who is or may become a member of any of the Thales' Schemes;
4.2.3 details of the employer and employee contribution rates in
respect of each of the Thales' Schemes.
4.3 There is attached to the Disclosure Letter a schedule of Employees who
are members of the Thales' Schemes as at the date of this Agreement.
4.4 No discretion or power has been exercised under any of the Thales'
Schemes to augment benefits or provide a benefit which would not
otherwise be provided.
4.5 The life insurance benefit payable under any of the Thales' Schemes
other than in respect of TCSI and the US Employees on the death of a
member of any of the
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Thales' Schemes is at the date of this Agreement fully insured under a
policy effected with an insurance company and all insurance premiums
payable have in respect of that insurance policy been paid.
4.6 No plan, proposal or intention to amend, discontinue (in whole or in
part) or exercise a discretion in relation to any of the Thales' Schemes
has been communicated to any member of the Thales' Schemes.
4.7 No amount due in respect of the Personal Pension Scheme or to any of the
Thales' Schemes in respect of an Employee is unpaid.
4.8 Each of the Thales' Schemes are Approved and each have been designed to
comply with, and have been administered in accordance with, all
applicable legal and administrative requirements.
4.9 No assurance, promise or guarantee (oral or written) has been made or
given to the beneficiary of the Personal Pension Scheme of a particular
level or amount of benefits to be provided for or in respect of him or
her under the Personal Pension Scheme on retirement, death or leaving
employment.
4.10 The Disclosure Letter contains details of the rate at which Thales Group
has agreed to make employer contributions into the Personal Pension
Scheme.
NON-UK PENSION WARRANTIES
"OVERSEAS EMPLOYEES" has the same meaning as Non-UK Employees.
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"OVERSEAS PENSION SCHEMES" means each of: The Thales North American
Pension Plan, the Thales America 401(k) Plan; the Racal SIP II Plan and
any other pension scheme or similar arrangement (other than a state
scheme) to which any of the Overseas Employees make (or have agreed to
make contributions or other payments).
"STATE SCHEMES" means each state pension scheme to which any of the
employers of any of the Overseas Employees are required by law to make
contributions or payments.
4.11 Save for the Overseas Pension Schemes and the State Schemes, there are
not (and never have been) any agreements, arrangements, customs or
practices (whether legally enforceable or not) in operation for the
provision of or payment of contributions towards any pensions,
allowances, lump sums or other like benefits on before or after
retirement or death or termination of employment (whether voluntary or
not) or disability for the benefit of any Overseas Employee or the
dependants of such a person, nor has any proposal been announced or
promise made to establish any such agreement, arrangement or practice
and no individual has any contractual entitlement for the provision of
retirement benefits other than in accordance with the relevant governing
provisions of the Overseas Pension Schemes as disclosed to the
Purchaser.
4.12 Thales has supplied the Purchaser with copies of all agreements, deeds,
declarations, insurance contracts and other relevant documents governing
the Overseas Pension Schemes and an accurate outline description of the
amount and nature of benefits and the circumstances in which such
benefits are payable under each of the Overseas Pension Schemes.
4.13 Each of the Overseas Pension Schemes has been designed to comply with
and has been administered in accordance with all applicable legal and
regulatory requirements.
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4.14 All amounts which have fallen due for payment by any of the employers of
any of the Overseas Employees in respect of any of the Overseas Pension
Schemes or any of the State Schemes have been paid.
4.15 The Purchaser will not have any liability under any of the Overseas
Pension Schemes upon Completion.
4.16 No assurances or undertakings (whether legally binding or not) have been
given to any of the Employees as to the continuance or introduction or
increase or improvement of any retirement, death, sickness or disability
scheme.
4.17 No assurance, promise or guarantee (oral or written) has been made or
given to any individual of a particular level or amount of benefits to
be provided for or in respect of him or her under the Overseas Pension
Schemes on retirement, death or leaving employment.
5 PROPERTY
5.1 The Business Properties shown in Schedule 3 represent all the freehold
and leasehold land and premises owned, leased, used or occupied by the
relevant Company or in which it has an interest.
5.2 The particulars of the Business Properties shown in Part 1 of Schedule 3
are true, correct and complete in all respects and the relevant Company
or the relevant Thales Affiliate is the beneficial owner and has good
and marketable title to the interest set out therein in relation to the
Business Properties, free from Encumbrances. The Business Properties
have the benefit of all necessary rights
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and easements required for the continued use thereof for the purposes of
the relevant Company, which rights are not subject to any restriction
limitation or the right of any third party to determine the same.
5.3 No notice of any breach of the covenants, stipulations and conditions
contained in the Leases of the Business Properties has been received by
the Thales Properties Limited or the relevant Company and all outgoings
payable in respect of the Business Properties and invoiced to Thales
Properties Limited or the relevant Company have been duly paid.
5.4 No notice has been received by Thales, Thales Properties Limited, any
Thales Affiliate or any of the Companies of any breach of covenant for
repair and redecoration contained in the Leases of the Business
Properties and there are no circumstances which will or might entitle
any landlord or other person to exercise any powers of entry or to take
possession thereof or which would otherwise restrict or terminate the
continued possession and quiet enjoyment thereof for the purposes of the
business of the relevant Company as presently carried on.
5.5 There are no covenants, restrictions, stipulations, easements or quasi
easements or privileges affecting the Business Properties or any part
thereof which are of an unduly onerous nature or which conflict with the
present user thereof or which would affect the use or continued use
thereof for the purposes of the business of any of the Companies nor are
there any rights, easements or privileges in the continued existence of
which is doubtful or uncertain as the withdrawal or cessation of which
would affect the use or continued use of the Business Properties for the
purposes of the Business.
5.6 So far as is necessary for the continued use thereof for the purposes of
the business of any of the Companies to the extent or in the manner in
which it is now used the Business Properties and the use thereof for the
purposes of the
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business carried on by any of the Companies comply in all material
respects with all applicable laws, ordinances, rules, regulations and
requirements including without limitation those relating to planning and
fire precautions and all building laws and by-laws affecting the same
and all applicable statutory and by-laws as to fire precautions, public
health, the environment or otherwise.
5.7 No notice, action or proceedings affecting the Business Properties has
been served or commenced by any person and there are no facts known to
Thales, Thales Properties Limited and the relevant Trade Affiliates
which are likely to result in any such notice, action or process being
served or commenced.
5.8 The Business Properties are not affected by any of the following
matters:
5.8.1 any closing order, demolition order or clearance order; or
5.8.2 any enforcement notice which has not been complied with; or
5.8.3 any order or proposal for the compulsory acquisition or
requisition of the whole or part thereof or the modification of
any planning permission or discontinuance of any use of the
removal of any building on the Business Properties; or
5.8.4 any agreement with any planning authority statutory undertaking
or other public body or authority regarding the use or
development thereof.
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5.9 There are no outstanding disputes between any of the Companies, Thales
Properties Limited or any Thales Affiliate and any person or entity
relating to the Business Properties or their use.
5.10 The Companies have in their possession or under their control all deeds
and documents relating to the Business Properties relevant to the
interest of the Companies in the Business Properties.
5.11 The Business Properties are in a reasonable state of repair and
condition having regard to the age of the Business Properties.
5.12 The replies given to enquiries raised by the Purchaser's Solicitors in
respect of the Business Properties are true and correct in all material
respects.
6 ASSETS
6.1 Each of the Assets other than any Intellectual Property Rights (subject,
in the case of the Inventory, to retention of title where applicable)
are:
6.1.1 legally and beneficially owned by Thales and each of the
Companies free from Encumbrances;
6.1.2 not the subject of any hire purchase, leasing, lease purchase or
credit-sale agreements, agreements for conditional sale or sale
by instalments;
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6.1.3 not subject to any agreement or commitment entered into by
Thales and each of the Companies to give or create any of the
interests described in 6.1.2 above and; and
6.1.4 in the possession of or under the control of Thales or one of
the Companies.
6.2 All of the fixed and movable plant, machinery, vehicles, office,
warehouse and factory equipment, furniture and furnishings used in the
Business are in reasonable repair having regard to their age and are
capable of being used either for the purpose for which they were
acquired or for the purpose for which they are now used by any of the
Companies.
6.3 All of the raw materials, work in progress, parts and components and
finished goods of Thales or one of the Companies are of a quality usable
in the ordinary course of business except for obsolete and slow moving
items that are provided for in the Accounts.
6.4 The fixed asset registers of the Companies provide a complete and
accurate record of all plant, machinery, equipment and vehicles owned by
Thales and the Companies and used in respect of the Business.
7 CONTRACTS
7.1 The Disclosure Letter contains:
7.1.1 copies of:
(a) Contracts within category (c) of the "Contracts"
definition;
(b) all contracts, engagements or orders entered into by any
of the Companies with customers for the sale of goods or
the supply
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of services in connection with the Business which remain
to be performed in whole or in part having value in
excess of (pound)500,000 (or (US$500,000 in respect of
any such contract in US dollars); anD
(c) all other material Contracts;
that remain to be performed (in whole or in part) by the
Company; and
7.1.2 a list of all other Contracts within the categories (a), (b) and
(f) of the "Contracts" definition that remain to be performed
(in whole or in part) by the Company.
7.2 The contracts currently subsisting relating to the Business to which
Thales or any of the Companies is a party do not include:
7.2.1 any contract for the purchase or use by Thales or any of the
Companies of materials, supplies or equipment which is in excess
of the requirements of Thales or any of the Companies for the
normal operating purposes of the Business;
7.2.2 any unusual or unusually onerous contract;
7.2.3 any contract that cannot be terminated without penalty or
compensation on 12 months' notice or less;
7.2.4 any contract restricting the freedom of action of any of Thales
or any of the Companies in relation to the normal Business
activities or in relation to the territory in which the Business
is conducted;
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7.2.5 any contract not made in the ordinary course of the Business;
7.2.6 any contract which by virtue of the acquisition of the Business
by the Purchasers will result in:
(a) any other party being by virtue of the terms of such
contract relieved of any obligation or entitled to
exercise any right (including any right of termination,
any consent to assignment or any right of pre-emption or
other option); or
(b) Thales or any of the Companies being in default under
any such agreement or arrangement or in a liability or
obligation of Thales or any of the Companies being
created or increased;
7.2.7 any contract which was entered into otherwise than by way of
bargain at arm's length;
7.2.8 any contract which establishes any joint venture, consortium,
partnership or profit (or loss) sharing agreement or
arrangement;
7.2.9 any contract which contains any liability (present or future)
under any financial or performance guarantee or indemnity or
letter of credit;
7.3 Each contract to which the Thales or any of the Companies are now a
party is valid and subsisting and there is no subsisting breach of any
thereof which could lead to a claim for compensation, damages, specific
performance or an injunction being made against Thales or any of the
Companies or which could entitle a third
188
party to call in any moneys before the normal due date thereof which
will in any such case materially and adversely affect the Business.
7.4 No party with whom Thales or any of the Companies have entered into any
contract or arrangement is in default thereunder being a default which
would have a material and adverse effect on the financial or trading
position of the Business.
7.5 With respect to each of the contracts currently subsisting to which
Thales and/or each of the Companies is a party in connection with the
Business:
7.5.1 Thales and/or each of the Companies has not received any notice
of termination;
7.5.2 the Companies have the technical and other capabilities and the
human and material resources (including Inventory and
promotional materials) to enable it to fulfil, perform and
discharge all its outstanding obligations in the ordinary
course.
7.6 The Disclosure Letter contains details of all subsisting arrangements,
trading or otherwise, between the Companies and Thales or any Thales
Affiliate.
7.7 Neither Thales nor any of the Companies (in relation to the Business)
has outstanding any bid or tender or sale or service proposal which is
substantial in relation to the Business or which has been issued in
expectation of a loss following acceptance.
189
7.8 No guarantee, indemnity, warranty or representation has been given to
any customer in respect of goods or services supplied which would
operate to extend the guarantee or warranty implied by law or contained
in Thales' standard terms of business (a copy of which is attached to
the Disclosure Letter).
MANUFACTURING AGREEMENT WITH INSTEM TECHNOLOGIES LIMITED
7.9 The copies of the documents contained in the Disclosure Documents in
respect of the arrangements with Instem Technologies Limited constitute
the entire agreement between the Companies and Instem Technologies
Limited in connection with the Business.
7.10 There is no conflict between the rights granted by TCSL to Instem
Technologies Limited and the rights granted by TCSL to each of Coppice
Developments Limited and Precision Applications Limited.
DISTRIBUTION AGREEMENTS
7.11 The Companies do not make any direct sales to end customers (i.e. sales
which are not made indirectly, for example, through a distributor)
except as disclosed.
7.12 Except as disclosed, the Companies have not entered into any exclusive
distribution agreements with any person
7.13 The Companies have not granted any conflicting rights to different
persons under the terms of any exclusive distribution, representative or
agency arrangements,
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and in particular, exclusive distribution rights have not been granted
to more than one person in respect of the same territory or products.
7.14 None of the Companies' agreements with third parties grant distribution
rights in respect of any products other than products which are sold by
the Companies in connection with the Business.
RELATIONSHIPS WITH IBM
7.15 The Companies have in place maintenance and service contracts with
customers which generate sufficient income for TCSL to cover their
payment obligations to IBM (UK Limited ("IBM") under all of the
arrangements of TCSL with IBM.
7.16 The copies of the documents contained in the Disclosure Documents in
respect of the arrangements with IBM constitute the entire agreement
between the Companies and IBM in connection with the Business.
8 INTELLECTUAL PROPERTY
8.1 The Disclosure Letter and Schedule 7 contain true and accurate lists of
all material Business IPR in any jurisdiction which are held or
beneficially owned by the Companies. The Companies are the sole legal
and beneficial owners of all Business IPR save as disclosed in the
Disclosure Letter or Schedule 7.
8.2 The Disclosure Letter contains a true and accurate list of all material
licensing or sub-licensing agreements or arrangements under which the
Companies have the use of the Intellectual Property Rights of a third
party for the purposes of the Business, and copies of such licences are
included in the Disclosure Documents. No member of the Thales Group
which is party to any such agreements or arrangements is in breach
thereof and so far as Thales is aware no other party to such agreements
or arrangements is in breach thereof.
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8.3 So far as Thales is aware, no act has been done or omitted to be done
and no event has occurred or is likely to occur which may render any
registered or registrable Business IPR subject to revocation, compulsory
licence, cancellation or amendment or may prevent the grant or
registration of a valid registered or registrable Intellectual Property
Right pursuant to a pending application.
8.4 The Disclosure Letter contains a true and accurate list of all material
agreements or arrangements under which any member of the Thales Group
has granted to any other person any license, or other right in relation
to the Business IPR and of all Contracts falling within (d) of the
definition of Contracts.
8.5 None of (a) the products or systems developed by or for the Companies or
used exclusively in the Business and which embody the use of the
Business IPR and which are used in or offered for sale or licensed by
the Business at Completion; or (b) the Prism Product; or (c) the Wordnet
3 product as it exists at Completion; or (d) so far as Thales is aware
no other part of the Business currently carried on by the Companies,
infringes any Intellectual Property Rights of any other person or
involves the unauthorised use of confidential information and so far as
Thales is aware no member of the Thales Group has received any notice of
any alleged infringement of the Intellectual Property Rights of any
third party in relation to the Business and, save as set out in the
Disclosure Letter, so far as Thales is aware no member of the Thales
Group is aware of any circumstances (including any act or omission to
act) likely to give rise to such a claim.
8.6 No Business IPR and no benefit of use of Intellectual Property Rights
which are the subject of a Contract falling within (e) of the definition
of Contract will be lost,
192
or rendered liable to any right of termination or cessation by any third
party, by virtue of the acquisition by the Purchasers of the Business,
save as stated in the Disclosure Letter.
8.7 So far as Thales is aware, there exists no actual or threatened
infringement by any third party of Business IPR (including misuse of
confidential information) or any event likely to constitute such an
infringement nor has Thales (or any member of the Thales Group)
acquiesced in the unauthorised use by any third party of any Business
IPR.
8.8 So far as Thales is aware, no claims have been made or threatened in
writing by employees or ex-employees of the Business under any statutory
inventor compensation provision, or like employee compensation
provision, in any jurisdiction, and no employee or previous employee of
the Thales Group who in the case of his or her employment created,
disclosed or developed work in which Intellectual Property Rights
subsist have any ownership of, or rights to, such Intellectual Property
Rights in relation to the Business IPR.
8.9 Neither the Business IPR , nor so far as Thales is aware any other
Material IPR are subject to any Encumbrance. The interest of Thales
under any contract in respect of Business IPR or Material IPR is not
subject to any Encumbrance and so far as Thales is aware the interest of
any other party under any such contract is not subject to any
Encumbrance.
8.10 All renewal fees required for the maintenance of the Business IPR have
been paid.
8.11 None of the Business IPR or, so far as Thales is aware, other Material
IPR are the subject of any litigation, opposition, arbitration,
mediation or administrative or
193
criminal proceedings and no such proceedings are so far as Thales is
aware, threatened in writing.
8.12 The Business IPR, together with the Intellectual Property Rights which
are the subject of a Contract falling within (e) of the definition of
Contract as so licensed under such Contracts, are adequate to carry on
the Business in the manner currently carried on and to fulfil its
existing contracts save to the extent that the Purchasers need to
replace the Excluded Trade Marks.
8.13 Save as set out in the Disclosure Letter, no member of the Thales Group
other than the Companies uses any Business IPR.
8.14 Thales warrants that:
(a) the software licensed by Funk Software Inc. to TCSL is not used
in the Business as carried on at Completion and has not been
used in the Business in the 12 months immediately preceding
Completion;
(b) TCSL is the absolute legal and beneficial owner of the
Intellectual Property Rights in the elements of the "Tienna" and
"Renaissance" products except for the Tienna "SS7" signaling
protocol owned by Natural MicroSystems Corporation ("Natural");
(c) Natural and members of its group are not developing as at the
date of Completion and have not in the 12 months immediately
preceding Completion been contracted to develop any products or
Intellectual Property Rights for use in the Business other than
that described in paragraph (b) above;
(d) the software developed by Cliffstone for TCSL which related to
TCSL's "Agent Quality Thales 3" product is not used in the
Business as carried on at Completion and has not been used in
the Business in the 12 months immediately preceding Completion;
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(e) other than as listed in the French Disclosure Letter and the
German Disclosure Letter, TCSA and TCS GmbH do not own any other
Intellectual Property Rights and no products or processes have
been made available to any persons which incorporate any TCSA or
TCS GmbH Intellectual Property Rights and none of the Companies
are legally bound to make such products or processes available;
and
(f) no distributors, resellers (or other third party who has entered
into an agreement with the Companies for the supply of Business
products to end-users) of the Companies have made any
modifications to any products in respect of which they have been
granted distributor or reseller rights by the Companies.
(g) All Intellectual Property Rights which are disclosed under the
French Disclosure Letter and the German Disclosure Letter have
been created by employees of, and are owned by, TCSA and TCS
GmbH.
(h) The Cross Patents Licence Agreements do not impose any ongoing
obligations on the Purchasers other than an obligation not to
derogate from the grant of a non-exclusive licence of any
patents being transferred to the Purchasers pursuant to this
Agreement to Alcatel in the field of civil telecommunications
and Thomson Multimedia in the field of multimedia on electronics
consumer products broadcast and network equipment.
9 INFORMATION TECHNOLOGY
9.1 A list of the Information Technology used by the Business and by each
Company and all agreements, arrangements or understandings relating to
the maintenance, development, support, security, disaster recovery,
management and utilisation of the Information Technology used by the
Business (including software licences, escrow agreements relating to the
deposit of sources codes, facilities management and computer bureau
services agreements) are disclosed in the Disclosure Letter.
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9.2 There are no material defects relating to the Information Technology
used by the Business and the Information Technology used by the Business
has the capacity and performance necessary to fulfil the present
requirements of the Business.
9.3 No Company and no member of the Thales Group has disclosed to any third
party any source code or algorithms relating to any software owned
(either solely or jointly) by any of the Companies or by any member of
the Thales Group in relation to the Business.
9.4 Details of any domain name, other than a domain name falling within the
Excluded Trademarks, registered by any of the Companies or by any member
of the Thales Group in connection with the Business are disclosed in the
Disclosure Letter.
9.5 In the three years prior to the Completion Date there has been no bug,
breakdown or virus affecting the Information Technology used (in
relation to the Business) which has caused any material disruption to
the Business.
10 CONFIDENTIAL INFORMATION
10.1 No disclosure has been made of any confidential information of the
Companies in connection with the Business save in the ordinary course of
business and upon the Companies having taken appropriate steps to secure
the confidential nature of any such disclosure or as a result of
publication which follows the filing of a patent application. Thales or
the Companies are not aware of any material breach of such
confidentiality obligations by any third party.
10.2 The Companies are not a party to any contract or arrangement under which
it is or may be under obligation to make any disclosure of confidential
information of the Companies in connection with the Business save in the
ordinary course of business and upon the Companies having taken
appropriate steps to secure the confidential nature of any such
disclosure.
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11 INSURANCE
11.1 Thales and each of the Companies have maintained insurance cover in
respect of the Business against risks normally insured against by
companies carrying on a similar business, and in particular have
maintained all insurance required by statute and product liability and
environmental impairment liability insurance.
11.2 The Disclosure Letter contains particulars of all insurances maintained
for the benefit of the Business. Such insurances are in full force and
effect, all premiums in respect of the insurances maintained in respect
of the Business have been paid when due and no such insurance policies
have lapsed and the Companies have not committed any act or omitted to
do anything which would render such insurances void or invalid or
increase the premiums payable or affect the level or type of cover
provided by such insurances.
11.3 There is no claim outstanding by Thales or any of the Companies under
any of the Companies insurance policies relating to the Business or the
Assets, nor are Thales or the Companies aware of any circumstances
likely to give rise to such a claim.
12 PRODUCT LIABILITY
12.1 None of the Companies have, within the previous 18 months, received any
claim from any third party relating to any product or service of the
Business manufactured, sold or supplied which, was in any material
respect, defective, other than defects which are covered in the ordinary
course of business by any warranties or representations expressly given
or implied by law in respect of the sale or supply of any such product.
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12.2 TCSL has not received a prohibition notice, a notice to warn or a
suspension notice under the Consumer Protection ▇▇▇ ▇▇▇▇.
12.3 TCS GmbH has not received a prohibition notice, a notice to warn or a
suspension notice under the German Product Liability Act
("Produkthaftungsgesetz").
12.4 TCSA has not received a prohibition notice, a notice to warn or a
suspension notice under the relevant French law or other rules and
regulations promulgated by local governmental authorities.
12.5 TCS Inc. has not received save as disclosed in the Disclosure Letter,
any notice or other written communication from any US federal, state or
local governmental authorities or administrative agency or body, or from
any industry or standards-setting body, alleging any deficiencies in, or
proposing to investigate or recall, any product or service of the
Business sold or licensed or offered for sale or license in the United
States.
13 LITIGATION
13.1 None of the Companies nor any person for whose acts or defaults any of
the Companies may be vicariously liable are engaged whether as plaintiff
or defendant or otherwise in any civil, criminal or arbitration
proceedings or any proceedings before any tribunal (save for debt
collection by each of the Companies in the ordinary course of the
business for amounts which are not material) in connection with the
Business and save as disclosed in the Disclosure Letter, so far as
Thales is aware there are no proceedings threatened, pending or expected
against any of the Companies and save as disclosed in the Disclosure
Letter, neither Thales nor the Companies are aware of any facts or
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circumstances which are likely to give rise to such litigation or
arbitration, administrative or criminal proceedings or to any
proceedings against a director or employee (past or present) of Thales
or any of the Companies in respect of any act or default for which
Thales or any of the Companies might be vicariously liable in connection
with the Business.
13.2 So far as Thales is aware neither Thales nor any of the Companies are
the subject of any official or governmental investigation or enquiry in
respect of the affairs of Thales or any of the Companies in connection
with the Business and no such investigations or enquiries are pending or
expressly threatened against Thales or any of the Companies nor is
Thales aware of any circumstances likely to lead to any such
investigation or enquiry.
13.3 There is no order or judgment of any court or any governmental
authority outstanding against Thales or any of the Companies in
connection with the Business.
14 CONDUCT OF BUSINESS
Neither Thales nor any of the Companies have done or omitted to do
anything in breach of any relevant law, statutory requirement, by laws
or regulations applicable to the conduct of the Business where such
contravention would have a material adverse effect on the continued
operation of the Business after Completion.
15 LICENCES AND CONSENTS
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15.1 All necessary licences, consents, permits, approvals, authorities
(public and private) for or in connection with carrying on the Business
now carried on by each of Thales or the Companies are listed in the
Disclosure Letter and have been obtained by Thales and/or the Companies
to enable each of the Companies to carry on the Business lawfully in the
places and in the manner in which the Business is now carried on and all
such licences, consents, permits, approvals and authorities are valid
and subsisting and are not subject to any unusual or unusually onerous
conditions having a material effect on the conduct of the Business and
have been complied with in all material respects, no written notice has
been received regarding any breach and none of the Companies are in
material breach of any of the same nor so far as Thales is aware are
there any circumstances which indicate that any material licence,
consent, permission or approval is likely to be revoked. This warranty
does not cover any licences, consents, permits, approvals or authorities
which are contained in any of the contracts and are the subject of
separate warranties above.
15.2 To the best knowledge of Thales and the Companies, none of the licences,
permissions, authorisations or consents referred to in paragraph 15.1
above contain a right for the other party to revoke or not renew, in
whole or in part, such licences, permissions, authorisations or consents
as a result of the acquisition of the Business.
16 ENVIRONMENTAL AND HEALTH
16.1 Thales and each of the Companies in relation to the Business and the
Business Properties have complied at all times and in all respects with
Environmental Law and there are and have been no acts or omissions of
any of Thales or any of the Companies in relation to the Business,
Business Properties and Environmental Matters which could give rise to
fines, penalties, losses, damages, costs, expenses or liabilities or
could require any Works.
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16.2 All Environmental Permits (if applicable) have been obtained and are in
full force and effect, and no material operating or capital expenditure
is required or proposed in relation to Environmental Matters under any
such Environmental Permits.
16.3 So far as Thales is aware, no Environmental Matters exist or have arisen
at or about any of the Business Properties which could give rise to any
fines, penalties, losses, damages, costs, expenses or liabilities or
could require Works. So far as Thales and each of the Companies are
aware, no such matters are likely to arise.
16.4 Thales nor any of the Companies in relation to the Business or in
relation to the Business Properties is or have been involved in any
litigation proceedings, claim or complaint by any person under
Environmental Laws, and so far as Thales is aware none is threatened and
none is likely to arise. Thales, has not received any notice of
communication or information alleging any liability in relation to
Environmental Matters or that any Works are required or stating or
suggesting that there is or might be any pollution, contamination or
nuisance at or from any Business Property.
16.5 Neither Thales nor any of the Companies has any liability in respect of
Environmental Matters under any contract or other agreement relating to
the sale or other disposal or grant of any interest or rights in
relation to any shares, land or other assets.
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17 TAXATION MATTERS
17.1 Neither Thales nor any of the Companies is involved in any dispute with
any Tax Authority concerning any matter in any way affecting either the
Business or any of the Assets to be transferred under this Agreement.
17.2 The Disclosure Letter sets out details of any investigation (including
the consequences thereof but ignoring routine inspections) by any Tax
Authority within six years prior to the date hereof into or affecting
the payment of Taxation in respect of the Business and of any disputes
with any Taxation authority in relation to Taxation matters relating to
the Business.
17.3 The Disclosure Letter sets out details of any payments made or due to or
by Thales or any of the Companies in relation to the Business in respect
of which either Thales or any of the Companies or the payer is under an
obligation to deduct Tax or would be under such an obligation but for a
written authorisation issued by any Tax Authority permitting payment
without such deduction.
17.4 There is no reason why any part of the price payable by the Purchaser
that is apportioned under this Agreement to those of the Assets which
are plant or machinery for the purposes of Part II of the Capital
Allowances Act 2001 should not, assuming such apportioned price
represents capital expenditure incurred for the purposes of the
Purchaser's trade, qualify in full for writing down allowances; none of
such Assets are leased (as in the meaning of section 105 of such Act);
and Thales accepts that no election may be made in respect of any of
such Assets pursuant to section 266 of such Act.
17.5 In respect of any Assets which are plant and machinery for the purposes
of Part II of the Capital Allowances Act 2001 and which are fixtures (as
defined in section 173(1) of the Capital Allowances Act 2001) at
Completion either (a) no person
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has been or will have become entitled to allowances in respect of any
Expenditure incurred on the provision of the fixture or, (b) if any
person has become so entitled that person has been, is or will be
required to bring the disposal receipts in respect of the fixture into
account under section 55 of the Capital Allowances ▇▇▇ ▇▇▇▇.
17.6 None of the Contracts, other than any relating to the acquisition of the
Assets, involve any future liabilities which when incurred will not be
deductible in computing profits for Tax purposes.
17.7 No Tax Authority has agreed to operate any special arrangement (being an
arrangement which is not based on a strict application of the relevant
legislation) in relation to the Business, whether in respect of benefits
provided to its officers or employees, the valuation of its stock, the
depreciation of its assets or any administrative or other matter
whatsoever.
17.8 None of the Assets are wasting assets within section 44 of the Taxation
of Chargeable Gains ▇▇▇ ▇▇▇▇ which do not qualify for capital
allowances.
17.9 Thales and the Companies have properly operated the PAYE system or
equivalent system in any relevant jurisdiction deducting income tax and
national insurance contributions (and any other social security
contribution) as required from all payments to, or treated as made to,
the Employees (and has deducted all amounts which are required to be
deducted from wages, salaries or other benefits) and has punctually
accounted to the relevant Tax Authority for all amounts of Tax and
national insurance contributions (and any other social security
contribution) due to them.
17.10 Proper records have been maintained by Thales and the Companies in
respect of all PAYE (or equivalent system in any relevant jurisdiction)
and national insurance contributions (and any other social security
contribution) deductions and/or payments.
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17.11 Thales and the Companies have maintained and obtained accounts, records,
invoices and other documents (as the case may be) appropriate or
requisite for the purposes of VAT arising in respect of the Business
which are complete, correct and up-to-date.
17.12 Neither Thales nor any of the Companies is liable to any abnormal or any
non-routine payment, or any forfeiture, penalty, interest or surcharge,
or to the operation of any penal provision, in relation to VAT.
17.13 Neither Thales nor any of the Companies has been required to give
security to any Tax Authority for payment of VAT.
17.14 The Disclosure Letter sets out details of any investigation (including
the consequences thereof) by any Tax Authority within six years prior to
the date hereof into or affecting the payment of VAT in respect of the
Business.
17.15 None of the Assets are chargeable assets of a business which, if
transferred to a body corporate treated as a member of a group under
section 43 of the VATA as a going concern, would give rise to a
liability on that body corporate or the representative member of the
group of which that body corporate is a member under section 44 of the
VATA.
17.16 All documents in the possession or under the control of Thales or any of
the Companies which establish or are necessary to establish the title of
Thales or any of the Companies to the Assets have been duly stamped and
any applicable stamp duties or charges in respect of such documents have
been duly accounted
204
for and paid, and no such documents which are outside the United Kingdom
would attract stamp duty if they were brought in to the United Kingdom.
17.17 Thales and the Companies have complied with all applicable Taxation laws
and regulations relating to the Business and/or the Assets of any
jurisdiction in respect of whose Taxation laws and regulations the
Business and/or the Assets is subject where non-compliance could result
in the Purchaser or any of its subsidiaries being required to pay
Taxation which it would otherwise not be required to pay.
18 RECORDS ETC.
18.1 All the books, records and systems (including but not limited to
computer systems) and all data and information relating to the Business
have been adequately maintained or operated or otherwise held by Thales
or the Companies at all times and such Books and Records have been
retained by the Companies for such periods as may be required by the
relevant law of the jurisdiction in which the Companies are
incorporated.
18.2 Save as disclosed in the Disclosure Letter, none of the records,
systems, controls, data or other information of each of the Companies in
connection with the Business is recorded, stored, maintained, operated
or otherwise dependent upon or held by any means (including any
electronic, mechanical or photographic process whether computerised or
not) which (including all means of access thereto and therefrom) are not
under the exclusive ownership and direct control of any of the
Companies.
18.3 None of the Companies, or, to the knowledge of Thales, any of the
respective officers or directors of the Companies, is presently (I)
using any funds of the
205
Companies for any unlawful contribution, endorsement, gift,
entertainment or other unlawful expense relating to political activity;
(ii) making any direct or indirect unlawful payment to any foreign or
domestic regulatory body official or employee from any funds of the
Companies, or (iii) making any bribe, unlawful payoff, influence
payment, "kickback" or other unlawful payment to any person with respect
to the Business.
19 INSOLVENCY
19.1 No order has been made and no resolution has been passed for the winding
up of Thales or any of the Companies or for a provisional liquidator to
be appointed in respect of Thales or any of the Companies and no
petition has been prepared and no meeting has been convened for the
purpose of winding up of Thales or any of the Companies.
19.2 No administration order has been made and no petition for such an order
has been presented in respect of any of Thales or any of the Companies.
19.3 No receiver (which expression shall include an administrative receiver)
has been appointed in respect of Thales or any of the Companies or all
or any of the assets of Thales or any of the Companies.
19.4 Neither Thales nor any of the Companies is insolvent, or unable to pay
its debts within the meaning of section 123 Insolvency ▇▇▇ ▇▇▇▇.
19.5 No voluntary arrangement has been proposed under section 1 Insolvency
▇▇▇ ▇▇▇▇ in respect of Thales or any of the Companies.
206
19.6 No bankruptcy order has been made in respect of any of Thales or any of
the Companies or a petition for such an order presented.
19.7 No application has been made in respect of Thales or any of the
Companies for an interim order under section 253 Insolvency ▇▇▇ ▇▇▇▇.
19.8 Neither Thales nor any of the Companies are unable to pay or to have no
reasonable prospect of being able to pay any debts as those expressions
are defined in section 268 Insolvency ▇▇▇ ▇▇▇▇.
19.9 No event in respect of any of the Companies or the Business has occurred
in any of the jurisdictions in which the Business is conducted analagous
with any of the events specified in the foregoing sub-paragraphs of this
paragraph 19.
20 COMMISSIONS ETC.
Save as disclosed in the Disclosure Letter, no commissions, introductory
fees, bonuses or other payments or gifts having a monetary value have
been paid or made available or agreed to be paid or made available by
Thales or any of the Companies to any person, firm or company in
relation to any transaction implemented under or contemplated in this
Agreement.
21 COMPETITION AND FAIR TRADING LAWS
21.1 Neither Thales nor any of the Companies, in relation to the business,
has done anything which contravenes or is likely to contravene, requires
notification or is, or is likely to be, or has been the subject of any
enquiry, complaint, investigation or proceeding under any of the
provisions of the Fair Trading ▇▇▇ ▇▇▇▇, the EC
207
Treaty, the Competition ▇▇▇ ▇▇▇▇ or the Competition ▇▇▇ ▇▇▇▇ or any
other competition, anti-trust, anti-monopoly or anti-cartel legislation
or regulation in any country of the world in which or with which it does
business. Furthermore, Neither Thales nor any of the Companies is a
member or party to any agreement or arrangement which required
registration under the Restrictive Trade Practices Acts 1976 and 1977.
21.2 Neither Thales nor any of the Companies have in relation to the
Business, received any process, notice or other communication (formal or
informal) by or on behalf of the Office of Fair Trading (whether under
the Fair Trading ▇▇▇ ▇▇▇▇, the Competition ▇▇▇ ▇▇▇▇, the Competition ▇▇▇
▇▇▇▇ or otherwise), the Competition Commission, the Secretary of State
for Trade and Industry, the Commission of the European Communities, the
EFTA Surveillance Authority, the US Fair Trade Commission or any other
authority having jurisdiction in competition matters in relation to any
aspect of the Business or any agreement, arrangement, concerted practice
or course of conduct to which either Thales or any of the Companies is,
or is alleged to be, a party in relation to the Business.
21.3 Neither Thales nor any of the Companies are involved in any practice or
agreement as a result of which it is likely to receive any such process,
notice or communication as is referred to in paragraph 21.2 above.
21.4 Neither Thales nor any of the Companies are subject to any order or
judgment given by any court or governmental or regulatory authority, or
party to any undertaking or assurance given to any such court authority,
in relation to competition matters which is still in force.
21.5 Neither Thales nor any of the Companies have been in receipt of any aid
which would be construed as falling within Article 87(1) of the EC
Treaty and is not
208
aware of any pending or threatened investigation, complaint, action or
decision in relation to the receipt or alleged receipt by it of any aid
or alleged aid.
22 INVESTMENT REPRESENTATIONS
22.1 In evaluating the suitability of an investment in the Nice Shares, no
member of the Thales Group has relied upon any representations or other
information (whether written or oral) from Nice, other than the
representations and warranties contained herein and upon investigations
made by it in making the decision to invest in Nice.
22.2 Each member of the Thales Group is aware that an investment in Nice
involves a high degree of risk.
22.3 Each member of the Thales Group acknowledges that any information
furnished by Nice does not constitute investment, accounting, tax or
legal advice. Moreover, such person is not relying upon any information
furnished by Nice with respect to such person's tax and other economic
considerations in connection with its investment in Nice. In regard to
the Tax and other economic considerations related to such investment,
each member of the Thales Group has relied on the advice of, or has
consulted with, only its own professional advisors.
22.4 Each member of the Thales Group is aware that the Nice Shares are being
offered and sold by means of an exemption under the Securities Act and
exemptions under certain United States state securities laws for
non-public offerings and under the Israel Securities Law and regulations
promulgated thereunder and that each member of the Thales Group makes
the representations, declarations and warranties as contained in this
Section 22 with the intent that the same shall be relied upon by Nice in
determining its suitability as a purchaser of such securities.
209
22.5 Each member of the Thales Group is aware that it cannot sell or
otherwise transfer the Nice Shares without registration under the
Securities Act and applicable state securities laws or without an
exemption therefrom, and that certain restrictions apply to trading the
Nice Shares in Israel under the Israel Securities Law and regulations
promulgated thereunder and is aware that it will be required to bear the
financial risks of its purchase for an indefinite period of time
because, among other reasons, such securities have not been registered
with any regulatory body of any state of the United States and,
therefore, cannot be transferred or resold unless subsequently
registered under applicable state securities laws or an exemption from
such registration is available. Each member of the Thales Group also
understands that except as provided for under the Registration Rights
Agreement, Nice is under no obligation to register the resale by any
member of the Thales Group of Nice Shares or to assist it in complying
with any exemption from registration under applicable United States
federal or state securities laws or under the Israel Securities Law and
regulations promulgated thereunder.
22.6 Each member of the Thales Group recognises that no regulatory body has
recommended or endorsed the purchase of the Nice Shares or passed upon
the adequacy or accuracy of the information set forth herein, and that
Nice is relying on the truth and accuracy of the representations,
declarations and warranties made by each member of the Thales Group as
contained herein in selling the Nice Shares.
22.7 Each member of the Thales Group has at all times been given the
opportunity to obtain additional information, to verify the accuracy of
the information received and to ask questions of and receive answers
from certain representatives of Nice concerning the terms and conditions
of each member of the Thales Group's investment in Nice and the nature
and prospects of Nice's business.
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22.8 Each member of the Thales Group further acknowledges that the
transferability of the Nice Shares shall also be restricted by the
contractual "lock-up" provisions contained in this Agreement. Thus, each
member of the Thales Group realises that it cannot expect to be able to
liquidate its investment in Nice readily or at all in case of an
emergency.
22.9 Each member of the Thales Group is acquiring the Nice Shares for
investment purposes, for its own account and not with a view to or in
connection with any public distribution or resale of such securities to
or for the accounts of others.
22.10 Each member of the Thales Group understands and agrees that a
restrictive legend will be placed on all certificates representing the
Nice Shares.
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PART 2
PURCHASERS' WARRANTIES
1 Each of the Purchasers have the requisite corporate power to execute,
deliver and perform, and have taken all necessary corporate or other
action to authorise the execution, delivery and performance of this
Agreement. This Agreement will constitute legal, valid and binding
obligations of the Purchasers enforceable in accordance with its terms.
2 The execution and delivery of, and the performance by the Purchasers of
their obligations under, this Agreement will neither:
2.1 result in a breach of any provision of their constitutional
documents; or
2.2 result in a breach of, or constitute a default under, any
instrument to which, prior to Completion, any of the Purchasers
is a party or by which any of the Purchasers is bound; or
2.3 require the consent of the shareholders of any of the
Purchasers; or
2.4 result in a breach of any order, judgment or decree of any court
or governmental agency to which any of the Purchasers is a party
or by which any of the Purchasers is bound.
3 Other than the consents, permissions, approvals and agreements set forth
in Clause 2.1.1 of this Agreement (the receipt or satisfaction of which,
in accordance with Clause 2 of this Agreement, is a condition to the
Completion of the transactions contemplated by this Agreement), all
consents, permissions, approvals and agreements of third parties that
are necessary or desirable for the
212
Purchasers to obtain in order to enter into and perform this Agreement
in accordance with its terms have been obtained in writing.
4 No representation or warranty by the Purchasers in this Agreement nor
any certificate or schedule, furnished or to be furnished to Thales in
connection with the consummation of the transactions contemplated by
this Agreement, contains or will contain any untrue statement of a
material fact.
5 Except for the filings, permits, authorisations, consents and approvals
as may be required under, and other applicable requirements of, the
Exchange Act, the HSR Act or any other applicable antitrust laws or
authorities, the TASE, the Investment Centre of the Israel Ministry of
Industry and Trade and the Office of the Chief Scientist of the Israel
Ministry of Industry and Trade, none of the execution, delivery or
performance of this Agreement by Nice or the Purchasers, the issuance of
the Ordinary Shares evidenced thereby by Nice, nor the consummation by
each of Nice and the Purchasers of the transactions contemplated hereby
or compliance by each of Nice and the Purchasers with any of the
provisions hereof will (i) conflict with or result in any breach of any
provisions of the certificate of incorporation, the by-laws or similar
organisational documents of Nice; (ii) require any filing with, or
permit, authorisation, consent or approval of any Governmental Authority
or other person( including without limitation, consents from parties to
contracts, loans, leases and other agreements to which Nice is a party
); (iii) require any consent, approval, or notice under, or result in a
violation or breach of, or constitute (with or without due notice or the
passage of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any agreement to which Nice is a
party; or (iv) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Nice or the Purchasers, any of their
respective properties or assets, excluding from the foregoing clauses
(ii) and (iii) such violations, breaches or defaults which would not,
individually or in the aggregate, have a material adverse effect on Nice
or the ability of Nice to consummate the transactions contemplated
hereby.
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6 There are no actions, suits or proceedings by or, to the knowledge of
Nice or the Purchasers, investigations by or before any Governmental
Entity which are pending or, to the knowledge of Nice or the Purchasers,
threatened in writing against Nice or the Purchasers, which challenge
the validity of this Agreement or any action taken by Nice or the
Purchasers pursuant to this When issued, the Shares and the ADSs will be
duly authorized, validly issued and fully paid and will have the rights
and privileges set forth in the Nice articles of association or the ADR
Facility, as applicable, and will be issued free and clear of all Liens,
voting trusts, proxies, calls or commitments of any kind.
7 When issued, the Shares and the ADSs will be duly authorized, validly
issued and fully paid and will have the rights and privileges set forth
in the Nice articles of association or the ADR Facility, as applicable,
and will be issued free and clear of all Liens, voting trusts, proxies,
calls or commitments of any kind.
8 Upon effectiveness of the Registration Statement, and upon being
admitted for trading or authorized for quotation on Nasdaq, the ADRs
will be freely transferable in the United States, but shall nevertheless
remain subject to the provisions of Schedule 11 to this Agreement.
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SCHEDULE 5
CLIFFSTONE WARRANTIES
1 TITLE TO CLIFFSTONE SHARES
1.1 Thales TRC Inc. is the sole legal and beneficial owner of the Cliffstone
Shares and the sole legal and beneficial owner of the Cliffstone Note.
1.2 All of the Cliffstone Shares and the Cliffstone Note are validly issued
and fully paid.
1.3 The Cliffstone Shares constitute between 35 and 40% of the fully diluted
share capital of Cliffstone.
1.4 In respect of the Cliffstone Shares and/or the Cliffstone Note there
are:
(a) no Encumbrances over or affecting them;
(b) no agreements, arrangements or obligations to give or create any
Encumbrances over them; and
(c) no claims have been made that any person is entitled to any
Encumbrances over them.
2 CAPACITY OF THALES TRC, INC.
2.1 Thales TRC, Inc. is duly organised and validly existing under all
applicable laws.
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2.2 Thales TRC, Inc. has the requisite power and authority to enter into and
perform this Agreement and the other documents which are to be executed
by it pursuant to this Agreement (the "TRC Completion Documents").
2.3 The TRC Completion Documents will, when executed by Thales TRC, Inc.
constitute a binding obligation on Thales TRC, Inc. in accordance with
their respective terms.
2.4 The execution and delivery of, and the performance by Thales TRC, Inc.
of its respective obligations under the TRC Completion Documents will
not:
2.4.1 result in a breach of, or constitute a default under, any
instrument to which either Thales TRC, Inc. is a party or by
which Thales TRC, Inc. is bound; or
2.4.2 result in a breach of any order, judgment or decree of any court
or governmental agency to which Thales TRC, Inc. is a party or
by which Thales TRC, Inc. is bound; or
2.4.3 require the consent of the shareholders of Thales TRC, Inc. or
of any other person; or
2.4.4 require Thales TRC, Inc. to obtain any consent or approval of,
or give any notice to or make any registration with, any
governmental or other authority which has not been obtained or
made at the date hereof both on an unconditional basis and on a
basis which cannot be revoked (save pursuant to any legal or
regulatory entitlement to revoke the same other than by reason
of any misrepresentation or misstatement).
216
3 COMPLIANCE WITH THE CLIFFSTONE DOCUMENTS
Each of Thales, Thales TRC, Inc. and the Thales Group have at all times
complied with and are not in breach of the terms of any of the
Cliffstone Documents and each of Thales, Thales TRC, Inc. and the Thales
Group are not aware of the counter parties to the Cliffstone Documents
being in breach of any of their obligations thereunder.
217
SCHEDULE 6
PENSIONS
PART 1 - UK PENSIONS
Employees of the Business who are members ("Members") of the Racal Group
Staff Pension and Life Assurance Scheme, the Racal Group Executive
Manager & Senior Manager Pension Scheme, the Racal Group Executive
Pension Plan and the Thomson Retirement Benefit Scheme ("Thales'
Schemes") will be treated as leaving service on the Completion Date for
pension purposes. Thales will use its reasonable endeavours to procure
that the Trustees of Thales' Schemes will provide Members with the
normal leaving service benefits under the provisions of the relevant
Thales Schemes (which will be advised to the individual Members
concerned).
PART 2 - OVERSEAS PENSION SCHEMES
US Employees and all other current employees of TCS, Inc., if any, who
are members (" Members") of the Thales North America Pension Plan, the
Thales North America 401K Plan and the SIP-II Plan will be treated as
leaving TCS, Inc.'s service on the Completion Date and will be treated
in accordance with the terms and conditions contained in each of the
above described plan dealing with terminate employees. Thales will
advise individual Members of their rights and benefits under said plans
on or shortly after the Completion Date.
218
SCHEDULE 7
INTELLECTUAL PROPERTY RIGHTS
BUSINESS IPR
TRADEMARKS OWNED BY TCSL
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
Trademark COUNTRY APPLICATION APPLICATION REGISTRATION RENEWAL COMMENTS
DATE
NUMBER NUMBER DATE
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
A-MUX LOGO UK 2059568 5/3/96 2059568 5/3/06
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
BIG PICTURE TECHNOLOGY CTM 2052991 24/1/01
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 76/288370 20/7/01
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 23/5/91 155604 11/3/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
UK 1452564 9/1/91 1452564 9/1/08
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
GEOSTORE UK 1007802 9/3/73 1007802 9/3/08
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 31/8/00 1832823 31/8/10
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 76/149047 18/10/00
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 21/5/98 830786 21/5/08
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 75/508202 25/6/98 2476967 14/8/11 Affidavit due 14/8/06
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 7/11/90 1745086 5/1/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
UK 1444906 22/10/90 1444906 22/10/07
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 14/9/99 1307636 14/9/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
219
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
Trademark COUNTRY APPLICATION APPLICATION REGISTRATION RENEWAL COMMENTS
DATE
NUMBER NUMBER DATE
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 75/837065 1/11/99
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
STOREHOUSE UK 1140237 13/9/80 1140237 13/9/11
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
STOREMED UK 1176989 18/6/82 1176989 18/6/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
STORENET UK 1049140 7/7/75 1049140 7/7/06
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
STOREPLEX France 92431479 24/8/92 92431479 24/8/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
Germany R52808/9 WZ 21/8/92 2051506 21/8/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 75/662730 18/3/99 2378956 22/8/10 Affidavit due 22/8/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
UK 1509634 14/8/92 1509634 14/8/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 18/11/99 1387570 18/11/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 75/924305 22/02/00
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 9/4/99 1133156 9/4/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 75/698405 5/5/99
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
WORDNET France 9556446 24/3/95 9556446 24/3/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
Germany 39512614 22/3/95 39512614 22/3/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 74/649882 20/3/95 2093445 2/9/07 Affidavit due 2/9/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
UK 2013801 10/3/95 2013801 10/3/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
WORDSAFE Denmark 3542/91 2/10/92 9057/92 2/10/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
USA 107236 19/10/90 1745083 5/1/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
220
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
Trademark COUNTRY APPLICATION APPLICATION REGISTRATION RENEWAL COMMENTS
DATE
NUMBER NUMBER DATE
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
UK 1439866 7/9/90 1439866 7/9/07
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 23/5/91 153406 26/11/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
221
PATENT OWNED BY TCSL
--------------------
------------------ ------------------ ------------- ------------- ------------- ------------- ------------------- -----------------
PATENT TITLE REGISTERED OWNER APPLICATION APPLICATION PUBLICATION PUBLICATION INVENTOR(S) COMMENTS
NUMBER DATE NUMBER DATE
------------------ ------------------ ------------- ------------- ------------- ------------- ------------------- -----------------
VOICE ACTIVITY Thales Contact 9916430.3 13/7/99 2352948 7/2/01 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Not yet granted
MONITOR Solutions
------------------ ------------------ ------------- ------------- ------------- ------------- ------------------- -----------------
THIRD PARTY'S RIGHTS
--------------------
License of this patent has been granted under general Cross Patents License
Agreements signed between Trader and:
- Alcatel in the field of Civil Telecommunications
- Thomson Multimedia in the field of multimedia or electronics
consumer products, broadcast and network equipment.
222
COPYRIGHT / DESIGN RIGHTS - HARDWARE
------------------------------------
The following items are all covered by design documentation. Ownership is with
Thales Contact Solutions Ltd.
----------------------------------------------------------------------------- -----------------------------------------------------
HARDWARE ITEM Comments
----------------------------------------------------------------------------- -----------------------------------------------------
ICR 64 Recorder
----------------------------------------------------------------------------- -----------------------------------------------------
Rapidax Ranger recorder
----------------------------------------------------------------------------- -----------------------------------------------------
Wordsafe Maxima recorder
----------------------------------------------------------------------------- -----------------------------------------------------
Wordnet series 1 recorder
----------------------------------------------------------------------------- -----------------------------------------------------
Wordnet series 2 recorder
----------------------------------------------------------------------------- -----------------------------------------------------
Wordnet series 3 recorder
----------------------------------------------------------------------------- -----------------------------------------------------
Tienna recorder
----------------------------------------------------------------------------- -----------------------------------------------------
▇▇▇▇▇ recorder
----------------------------------------------------------------------------- -----------------------------------------------------
Redac radar recording integration card
----------------------------------------------------------------------------- -----------------------------------------------------
PDET (Programmable Digital Extension Extension Tap Card Wordnet and Mirrra
----------------------------------------------------------------------------- -----------------------------------------------------
PCM32 line card Tienna
----------------------------------------------------------------------------- -----------------------------------------------------
DSP card Wordnet
----------------------------------------------------------------------------- -----------------------------------------------------
DSP ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------- -----------------------------------------------------
223
COPYRIGHT / DESIGN RIGHTS - SOFTWARE
------------------------------------
The following items are all covered by design documentation and source code
listings. Ownership is with Thales Contact Solutions Ltd
----------------------------------------------------------------------------- -----------------------------------------------------
SOFTWARE ITEM Comments
----------------------------------------------------------------------------- -----------------------------------------------------
▇▇▇▇▇ Management software
----------------------------------------------------------------------------- -----------------------------------------------------
Wordnet series 1 operating software
----------------------------------------------------------------------------- -----------------------------------------------------
Wordnet series 2 operating software Developed by Origin - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------
Tienna operating software Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------
CMSU software Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------
RTT (Replay to Turret) software Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------
Replay server software Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------
▇▇▇▇ (Search and Replay application)
----------------------------------------------------------------------------- -----------------------------------------------------
▇▇▇▇ ▇▇ (Search and Replay application)
----------------------------------------------------------------------------- -----------------------------------------------------
RECO (Radar and voice scenario reconstruction replay application)
----------------------------------------------------------------------------- -----------------------------------------------------
Investigator search and replay application Currently at release 7.0 (4.1 in general release)
----------------------------------------------------------------------------- -----------------------------------------------------
Investigator RX Scenario reconstruction replay application (was Radio Currently
at release 2.0 Replay)
----------------------------------------------------------------------------- -----------------------------------------------------
AQM (Agent Quality Management) application Currently at release 3.0 (2.2 in general release)
----------------------------------------------------------------------------- -----------------------------------------------------
Call confirm and last message replay applications Currently both at release 1.0
----------------------------------------------------------------------------- -----------------------------------------------------
MCC (Media Control Centre) application Currently at release 1.0
----------------------------------------------------------------------------- -----------------------------------------------------
Wordnet vendor object recorder control software for Prism application Developed by Cliffstone - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------
Renaissance dashboard system management application
----------------------------------------------------------------------------- -----------------------------------------------------
224
----------------------------------------------------------------------------- -----------------------------------------------------
QA recorder screen and voice recording application Developed by Cliffstone - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------
Smart logger application Development by Cliffstone incomplete - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------
RecorderLink recorder integration software Currently at release 3.5
----------------------------------------------------------------------------- -----------------------------------------------------
Web replay application Not released
----------------------------------------------------------------------------- -----------------------------------------------------
Switch decoder signal processing software Various decoders for a range of telephone switches
----------------------------------------------------------------------------- -----------------------------------------------------
225
DESIGN RIGHTS - DATABASE
------------------------
The following items are all covered by design documentation. Ownership is with
Thales Contact Solutions Ltd
------------------------------------------------------ ---------------------------------------------------------------
DATABASE ITEM Comments
------------------------------------------------------ ---------------------------------------------------------------
Tracker database Uses Microsoft JET technology
------------------------------------------------------ ---------------------------------------------------------------
Tienna database Uses Microsoft SQL server technology
------------------------------------------------------ ---------------------------------------------------------------
CMSU database Uses Microsoft SQL server technology
------------------------------------------------------ ---------------------------------------------------------------
DESIGN RIGHTS - ARCHITECTURE
----------------------------
The following items are all covered by design documentation. Ownership is with
Thales Contact Solutions
------------------------------------------------------ ---------------------------------------------------------------
ARCHITECTURE ITEM Comments
------------------------------------------------------ ---------------------------------------------------------------
Renaissance Architecture Currently at release 7.0
------------------------------------------------------ ---------------------------------------------------------------
DOMAIN NAMES
------------
The following domain names have been registered by Thales Contact Solutions.
226
------------------------------------------------------ ---------------------------------------------------------------
DOMAIN NAME COMMENTS
------------------------------------------------------ ---------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇.▇▇▇
------------------------------------------------------ ---------------------------------------------------------------
227
SOFTWARE OWNED BY TCS GMBH
--------------------------
DATAX CONVERTOR SOFTWARE
SOFTWARE OWNED BY TCS SA
------------------------
-----------------------------------------------------------------------------------------------------------------------------------
NOM VERSION LICENCE SYSTEME D'EXPLOITATION TYPE D'ENREGISTREUR DATE DE SORTIE
-----------------------------------------------------------------------------------------------------------------------------------
REECOUTE IMMEDIATE 1,9 Poste Windows 9x/NT/2000 WORDNET //
-----------------------------------------------------------------------------------------------------------------------------------
INTERFACE SERVEUR TCS 1 Site SERVEUR :Windows NT/2000 WORDNET/▇▇▇▇▇ Diponible Fin Aout avec une
CLIENT: Tous systemes version beta Fin juillet
d'exploitations
-----------------------------------------------------------------------------------------------------------------------------------
CONVERTISSEUR WAVE TCS 1 Poste Windows 9x/NT/2000 WORDNET/▇▇▇▇▇ //
-----------------------------------------------------------------------------------------------------------------------------------
REECOUTE IMMEDIATE TCS Pocket PC 1 Poste Windows CE (Pocket PC) WORDNET/▇▇▇▇▇ Fin Aout
-----------------------------------------------------------------------------------------------------------------------------------
REECOUTE IMMEDIATE TCS PC 1 Poste Unix, Linux, Mac OS WORDNET/▇▇▇▇▇ Fin Septembre
version beta Fin juillet
tous les systemes
suportant le JAVA)
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ 15 1 Windows 9x/NT/2000 WORDNET //
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ 15 2 Windows 9x/NT/2000 WORDNET Fin Avril
-----------------------------------------------------------------------------------------------------------------------------------
SUPERVISEUR Poste Windows 9x/NT/2000 WORDNET
-----------------------------------------------------------------------------------------------------------------------------------
228
SCHEDULE 8
GUARANTEES
1 Those bonds and guarantees listed at Disclosure Document UK.A.4
excluding those bonds and guarantees relating to Iran including (but not
limited to) those in relation to the Civil Aviation Organisation (issued
on 29 March 1995 and 20 February 1998) and the State Purchasing
Organisation (performance bonds issued on 28 September 1994 and 9
January 1998) ("the Iran Guarantees")
2 A guarantee given by Thales to Barclays Bank Plc in respect of any
liability of TCSL arising from those bonds and guarantees given by
Barclays Bank plc to support obligations of the Companies with respect
to the Business as listed at Disclosure Document UK.A.4 but excluding
the Iran Guarantees
3 A guarantee proposed to be given by TCSL in respect of obligations of
TCS GmbH under an agreement for the sale of certain assets and the
novation of certain contracts to Origin Data Realisation GmbH disclosed
at Disclosure Document UK.A.42
229
SCHEDULE 9
ACCOUNTING PRINCIPLES
The Completion Balance Sheet shall be prepared in the form set out in part D of
this Schedule. The Completion Balance Sheet shall be drawn up in accordance
with:
A GENERAL ACCOUNTING PROCEDURES
(i) the specific accounting policies, procedures and practices set
out in paragraph C below;
(ii) to the extent not inconsistent with paragraph A(i) above, then:
(a) Assets and Assumed Liabilities of the Business of the US
Company shall be accounted for in accordance with US
GAAP;
(b) Assets and Assumed Liabilities of the Business of the UK
Company shall be accounted for in accordance with UK
GAAP;
(c) Assets and Assumed Liabilities of the Business of the
German Company shall be accounted for in accordance with
German GAAP;
(d) Assets and Assumed Liabilities of the Business of the
French Company shall be accounted for in accordance with
French GAAP; and
the GAAP of the relevant country shall in each case be applied
in accordance with the same accounting policies, procedures and
practices adopted in the preparation of the Accounts and in
particular the provisions against the realisable value of assets
and liabilities shall be prepared on a basis consistent with
that applied in the Accounts.
230
B GENERAL
1 The Completion Balance Sheet shall be expressed in Dollars and amounts
in other currencies shall be translated into Dollars at the Conversion
Rate prevailing on the Completion Date.
2 All records and work papers related to the preparation and audit of the
Accounts shall be made available to the Auditors.
3 Inventory wherever situated shall be included in the Completion Balance
Sheet and valued in accordance with the Accounting Principles.
4 Excluded Assets and Excluded Liabilities shall not be included in the
Completion Balance Sheet.
C SPECIFIC ACCOUNTING PROCEDURES
1 The Completion Net Asset Value will be determined from the combination
of the Assets and Assumed Liabilities (which shall be deducted from the
Assets) of the Companies, which will have been prepared in accordance
with the accounting rules described above, subject to:
o Elimination of all intra TCS Group receivables and payables whether trade or
financial and intra Thales Group receivables and payables whether trade or
financial
o Elimination of investments in combined Companies (eg TCSL investment in TCS
GmbH)
o Elimination of unrealised profit included in inventory
o Elimination of pension related assets or liabilities, deferred taxes and any
accrued expenses related to Thales Group debts
o Any other steps required solely for combination purposes to equitably arrive
at the Completion Net Asset Value as mutually agreed by the parties or
failing agreement as finally determined by Independent Accountants.
2 Inventory in excess of Euro 13,325,000 (being 105% of the amount of
Inventory shown in the Combination Accounts) shall be disregarded and
shall be valued as nil for the purposes of the Completion Balance Sheet.
3 A provision shall be made in respect of accrued not taken holiday pay.
231
4 A provision shall be made for bonuses and commissions to be paid after
Completion which relate to a period of performance prior to Competition.
D FORM OF COMPLETION BALANCE SHEET
(See following page)
E FORM OF AUDITORS' CERTIFICATE
(to be prepared on the notepaper of the Auditors)
To: Thales
Nice
date
reference
Gentlemen
The Company
We refer to the Sale and Purchase Agreement ("the Agreement") made
between Thales and Nice on 2002 for the sale of the Business and the
Assets as therein defined. Words and expressions defined for the purpose
of the Agreement are to have the same meanings in this letter.
In accordance with clause [13] of the Agreement we attach, initialled
for identification, draft Completion Balance Sheet and a statement of
the Net Asset Value as at the Completion Date. The statement shows a Net
Asset Value of Euro [ ] and therefore in accordance with the Agreement
and by reference to the Target Net Asset Value the amount payable by [ ]
to [ ] is Euro[ ].
In our opinion the draft Completion Balance Sheet have been prepared in
all material respects in accordance with Clauses [13] of the Agreement
and the Accounting Instructions.
Yours faithfully
Auditors
232
SCHEDULE 10
OVERSEAS COMPLETION REQUIREMENTS
PART 1 - THE US BUSINESS
OBLIGATIONS OF THALES, THE THALES GROUP, NICE AND THE PURCHASERS
1.1 To enter into an assignment and assumption agreement in the agreed
terms.
1.2 To enter into a ▇▇▇▇ of sale in the agreed terms.
1.3 To enter into a stock and promissory note purchase agreement in the
agreed terms in relation to the Cliffstone Shares and the Cliffstone
Note.
1.4 To enter into a trademark assignment agreement in the agreed terms.
1.5 To enter into a patent assignment agreement in the agreed terms.
233
PART 2 - THE FRENCH BUSINESS
1 OBLIGATIONS OF THALES, TCSA, NICE AND THE FRENCH PURCHASER
To enter into a French Business Transfer agreement in the agreed terms.
2 OBLIGATIONS OF THALES AND/OR TCSA
To deliver to Nice a certified copy of the shareholders resolution of
TCSA:
(a) authorising the transfer of the French Business; and
(b) approving the transfer of the registered office of TCSA to a new
location.
234
PART 3 - THE GERMAN BUSINESS
1 OBLIGATIONS OF THALES, TCS GMBH AND GERMAN ACQUISITION CO
1.1 To enter into a German Business Transfer Agreement in the agreed terms.
1.2 To initial a complete list of assets at Completion.
2 OBLIGATIONS OF THALES AND/OR TCS GMBH
2.1 To deliver to Nice a certified copy extract from the current commercial
register of TCS GmbH. shareholders of TCS GmbH authorising the managing
director of TCS GmbH to sell the German Business.
235
SCHEDULE 11
CORPORATE GOVERNANCE, REGISTRATION RIGHTS AGREEMENT AND STANDSTILL AGREEMENT
Corporate Governance; Lock Up; Orderly Marketing Arrangements
1 The parties recognise that the Share Consideration will result in the
Thales Group holding 2,187,500 Nice Shares. Nice hereby represents and
warrants that no Ordinary Shares of Nice have been issued since December
31, 2001 or will be issued prior to the Completion Date other than (i)
upon exercise of options or purchases of Nice Shares by employees,
officers or directors of, or consultants to, Nice, whether pursuant to
Nice's current or any future written compensatory plans or agreements or
otherwise in the ordinary course of business or (ii) as otherwise
permitted by the terms and conditions of the Sale and Purchase
Agreement. Thales hereby confirms its understanding of the current
company business strategy of Nice as previously presented to Thales.
Thales hereby acknowledges and agrees that Nice may, from time to time,
issue additional Nice Shares, resulting in dilution of Thales'
percentage interest in Nice. Thales will have no special right of first
refusal or other pre-emptive rights in respect of any further issue of
Nice Shares save for any rights it might hold together with the other
Shareholders in Nice, under Israeli law or the rules of NASDAQ or the
ISA.
2 Thales has also agreed to be bound by the terms and conditions of a
standstill agreement substantially in the form of Schedule 11.1 hereto.
3 On Completion, the board of directors of Nice (the "Board") shall
appoint two persons nominated by Thales to the Board one of whom may at
Thales' election serve on the audit committee of the Board. If Thales
sells or otherwise disposes of more than 50% of the Nice Shares
constituting the Share Consideration, then one of Thales' appointees to
the Board shall immediately resign and the remaining director nominated
by Thales (if applicable) may at Thales' election serve on the audit
committee of the Board. If Thales sells or otherwise disposes of more
than seventy-five percent (75%) of the Nice Shares constituting the
Share Consideration, or if
236
the Thales Group holds less than 2% of all issued and outstanding
Ordinary Shares of Nice, then Thales' remaining appointee to the Board
(if applicable) shall, if requested by Nice or the Board, immediately
resign from the Board (and the audit committee, if applicable). The
appointment and maintenance in office of such director(s) shall be
subject to the corporate laws of Israel, the articles of association of
Nice, Israel securities laws, and the rules and regulations of the
Israel Securities Authority ("ISA"), the Tel Aviv Stock Exchange
("TASE") and the Nasdaq National Market ("Nasdaq"). Without derogating
from the generality of the foregoing, Thales acknowledges that the
shareholders of Nice have the right to appoint the members of the Board,
and accordingly, the appointment of Thales' nominees as aforesaid is
subject to the confirmation of such appointments, or re-appointment, by
the shareholders of Nice at the next annual meeting of shareholders. It
is anticipated that the Board will hold at least four meetings annually
(one in Europe and three in Israel on an annual basis) with all meetings
held in English.
Nice shall provide to the members of the Board of Nice designated by
Thales indemnification rights and insurance coverage in each case on
terms no less favourable than those available to other members of the
Board of Nice from time to time.
4. (a) Except as provided in paragraph 6 below, Thales hereby agrees
that Thales will not sell, assign, transfer, pledge, encumber or
otherwise dispose of :
(i) any of the Nice Shares comprising the Share
Consideration prior to the first anniversary of
Completion;
(ii) more than twenty--five percent (25%) of the Nice Shares
comprising the Share Consideration prior to the second
anniversary of Completion; and
(iii) more than fifty percent (50%) of the Nice Shares
comprising the Share Consideration prior to the end of
thirty (30) months after Completion.
237
(b) In addition, Thales hereby further agrees that (i) neither
Thales nor any of its affiliates will engage in any hedging or
monetization strategies with respect to the Nice Shares
(including, without limitation, short sales, purchasing
cash-settled put options, writing covered call options, or
cashless collar options) at any time prior to the first
anniversary of Completion; and (ii) neither Thales nor any of
its affiliates will engage in any short sales at any time during
which Thales has a nominee on the Board of Directors of Nice.
5. The following principles shall apply to the manner and timing of sale of
the Nice Shares comprising the Share Consideration:
(a) At any time during which one or more nominees of Thales serve on
the Board or during which no nominee of Thales serves on the
Board solely due to one or more of the following (hereinafter,
an "Acceptable Reason"): (i) Thales has failed to nominate an
individual to the Board; (ii) Thales' nominees, if nominated or
elected to serve as directors of a public company, would deprive
the company of any rights, priviledges, exemptions or other
benefits that would otherwise be available to the company under
Israeli law or the rules or regulations of Nasdaq, the SEC or
the ISA, and Thales has failed to nominate a replacement nominee
whose service would not have a similar effect on the company; or
(iii) all of Thales' nominees have resigned pursuant to
paragraph 8 below :
(i) all sales of Nice Shares comprising the Share
Consideration shall be effected through Nasdaq;
(ii) no sales of Nice Shares comprising the Share
Consideration shall take place at a discount of more
than ten percent (10%) to the last reported sale price
immediately prior to the trade or the previous day's
closing sale price on Nasdaq as applicable; and
(iii) Thales must give Nice two Nasdaq trading days notice
prior to a sale comprising one percent (1%) or more of
the issued and outstanding shares of Nice. Following
such notification
238
by Thales, Nice shall keep confidential the subject
matter of such notification and shall not engage in any
activities with respect to the subject matter of such
notification that would violate the rules and
regulations of Nasdaq, TASE or the ISA.
(iv) All sales of Nice Shares comprising the Share
Consideration (whether or not made under a registration
statement, under SEC Rule 144, or otherwise), shall be
subject to the provisions of the Registration Rights
Agreement, and to any restrictions imposed by Nice's
internal policies regarding sales by officers, directors
and "affiliates" of Nice (Thales acknowledging that it,
for so long as it has a designee on the board or
beneficially owns 5% or more of the outstanding shares,
will be an "affiliate" of Nice for purposes of such
policies).
(b) At any time during which Thales does not have one or more
nominees on the Board for any reason other than an Acceptable
Reason:
(i) no sales of Nice Shares shall take place at a discount
of more than ten percent (10%) to the lower of (i) the
last reported sale price immediately prior to the trade
or (ii) the previous day's closing sale on Nasdaq, as
applicable; and
(ii) no transaction not effected through the Nasdaq shall
take place unless Nice is given not less than five
business days' notice of such transaction and a right of
first refusal to acquire, or cause its designee to
acquire, the relevant securities on the same terms as
offered in such off-market transaction, provided that
Nice's right of first refusal will expire if Nice or its
designee fails to purchase the shares within the five
business day period, and provided, further that Nice
shall not have a right of first refusal:
239
(A) when such off-market transaction is to a
Financial Institution (as defined below) acting
as intermediary who no later than the date of
its purchase of the Nice Shares has committed to
dispose of the Nice Shares in transactions
effected on Nasdaq to multiple financial
institutions; or
(B) the transaction involves a sale to a single
Financial Institution purchasing Nice Shares for
its own account;
but where either (A) or (B) above shall be applicable,
two business days' prior notice must be given to Nice
before the relevant transaction is effected. Following
such notification by Thales, Nice shall keep
confidential the subject matter of such notification and
shall not engage in any activities with respect to the
subject matter of such notification that would violate
federal or state securities laws or the rules or
regulations of Nasdaq, TASE or the ISA.
For purposes of the foregoing, "Financial Institution"
shall mean any registered securities broker, dealer,
market maker, or regulated bank that does not control,
is not under common control with, and is not controlled
by any individual, partnership, corporation (including a
business trust), limited liability company, joint stock
company, trust, unincorporated association, joint
venture or other entity (each a "Person") that is
engaged in a business competitive with the Business or
the business of Nice. For purposes of the foregoing, the
term "control" (including the terms "controlled by" and
"under common control with"), when used with respect to
a specified Person, means the possession, directly or
indirectly, of the power to direct or cause the
direction of the management or policies of such Person,
whether through ownership of voting securities or
partnership or other
240
ownership interests, by contract or otherwise; PROVIDED
that, without limiting the generality of the foregoing,
(a) any Person (including family members of such Person)
which owns, directly or indirectly, securities
representing 20% or more of the value or ordinary voting
power of a corporation or 20% or more of the partnership
or other ownership interests (based upon value or vote)
of any other Person is deemed to control such
corporation or other Person, (b) a general partner shall
always be deemed to control any partnership of which it
is a general partner, and (c) a member-manager of a
limited liability company shall always be deemed to
control any limited liability company of which it is a
manager.
(iii) All sales of Nice Shares comprising the Share Consideration
(whether or not made under a registration statement, under SEC
Rule 144, or otherwise), shall be subject to the provisions of
the Registration Rights Agreement.
6. Upon expiration of the lock up periods described in paragraph 4 above,
Thales may sell, assign, transfer or otherwise dispose of Nice Shares
subject to the orderly marketing arrangements described in paragraph 5
above and in accordance with applicable law.
7. Notwithstanding the provisions of paragraphs 4 and 5, Thales shall be
permitted to effect the following transfers of Nice Shares:
(a) Any transfer of Nice Shares to any Affiliate of Thales; provided
that the transferee is, and acknowledges in writing that it is,
with respect to the transferred Nice Shares, subject to all of
the restrictions set forth in this Schedule and in the
Standstill Agreement;
(b) Any bona fide pledge of Nice shares to a financial institution
as security for any indebtedness of Thales; provided that the
pledgee is, and acknowledges in writing that it is, with respect
to the pledged Nice Shares, subject to all of the restrictions
set forth in this Schedule and in the Standstill Agreement;
241
(c) Any transfer of Nice Shares in connection with the sale of all
or substantially all the assets of Thales; provided that the
transferee is, and acknowledges in writing that it is, with
respect to the transferred Nice Shares, subject to all of the
restrictions set forth in this Schedule and in the Standstill
Agreement and provided further that the provisions of paragraph
3 of this Schedule shall apply only to Thales and shall not
apply to any such transferee;
(d) Any deposit of Nice Shares with the Depositary in exchange for
ADRs, or any withdrawal of Nice Shares from the Depositary upon
surrender of ADRs under the Deposit Agreement, dated as of
January 24, 1996, by and among the Bank of New York, as
depositary, Nice and holders of ADRs.
8. In the event of a significant bona fide disagreement with Nice's company
strategy (a "Bona Fide Dispute") at any time after the first anniversary
of Completion that results in the resignation of all of Thales' nominees
to the Board (but excluding a resignation of said board members for any
other reason), the lock up periods described in paragraph 4 above shall
be reduced to the lesser of 6 months or the remaining lock up period for
the Nice Shares still subject to such restrictions as of the date of
resignation of Thales' appointed nominees to the Board. Notwithstanding
the foregoing, the Nice Shares shall remain subject to the orderly
marketing arrangements described in paragraph 5(b) above. In the event
that, for any reason other than a Bona Fide Dispute or an Acceptable
Reason (as defined above), Thales' nominees to the Board are not
appointed or re-appointed by Nice, or are removed or replaced by Nice,
the restrictions contained in paragraph 1, 2, 4 and 5(a) (but not 5(b))
shall terminate forthwith. Such restrictions shall not terminate upon
the voluntary resignation of Thales' nominees to the Board.
9. During any period of time in which: (i) Thales has the right to
designate, or in which (ii) Thales has serving on Nice's Board, one or
more nominee directors, Thales agrees to vote its Nice Shares in favour
of Nice's Board's recommendation as to additions, removals or
substitutions to the Board and
242
Thales further agrees not, individually or jointly with any others, to
initiate, propose, encourage, support or vote for the appointment or
removal of any other person to the Board or any shareholder proposal
relating to the appointment or removal of any nominee to the Board,
which is not supported by Nice's Board.
243
================================================================================
REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
[NICE]
AND
[THALES]
DATED AS OF [________________], 2002
244
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of
______________, 2002, is entered into by and between [Nice], a corporation
organized under the laws of Israel (the "Company") and [Thales], a company
organized under the laws of France (the "Initial Holder").
RECITALS
WHEREAS, the Initial Holder and the Company have entered into a Sale and
Purchase Agreement, dated [________________], 2002 (the "Sale and Purchase
Agreement") pursuant to which the Company has agreed to purchase from the
Initial Holder certain securities and other assets of the Initial Holder
described therein for the consideration described therein;
WHEREAS, pursuant to the terms of the Sale and Purchase Agreement, the Company
will issue or cause to be issued [2,187,500] American Depository Shares of the
Company ("ADSs"), each representing one Ordinary Share, par value 1.00 New
Israeli Shekel per share, of the Company (each, an "Ordinary Share") to the
Initial Holder;
WHEREAS, pursuant to the terms of the Sale and Purchase Agreement, the ADSs and
Ordinary Shares issued to the Initial Holder are subject to certain restrictions
on transfer pursuant to (A) Schedule 11 to the Sale and Purchase Agreement,
including prohibitions on any transfers within the first year following their
issuance, limitations on transfers in subsequent periods, and limitations on the
manner of sale (including pricing) of ADSs and any American Depositary Receipts
representing ADSs ("ADRs), and (B) US and Israeli securities laws;
WHEREAS, pursuant to the terms of the Sale and Purchase Agreement, the Company
has agreed to eliminate certain of the restrictions under US and Israeli
securities laws by entering into this Agreement to provide the Initial Holder
with registration rights with respect to the ADSs and Ordinary Shares issued to
the Initial Holder pursuant to the terms of the Sale and Purchase Agreement; and
WHEREAS, the Company and the Initial Holder desire to enter into this
Registration Rights Agreement to provide for such registration rights on the
terms set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements contained herein, the parties hereto hereby
agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
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1.1. "AFFILIATE" shall have the meaning given to it in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
1.2. "COMMISSION": the Securities and Exchange Commission.
1.3. "EXCHANGE ACT": the Securities Exchange Act of 1934, as amended.
1.4. "HOLDER" or "HOLDERS": the Initial Holder for so long as it shall hold
Registrable Securities and any transferee of Registrable Securities to
whom the Initial Holder shall assign or transfer any rights hereunder,
PROVIDED that such transferee has agreed in writing to be bound by this
Agreement and the transfer restrictions set forth in Schedule 11 to the
Sale and Purchase Agreement in respect of such Registrable Securities.
1.5. "PERSON": any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
1.6. "REGISTRABLE SECURITIES": the ADSs issued to the Holder pursuant to the
terms of the Sale and Purchase Agreement and the Ordinary Shares
underlying such ADSs. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (I) a
registration statement with respect to the sale of such securities shall
have been declared effective under the Securities Act and such
securities shall have been disposed of in accordance with such
registration statement, or (ii) such securities are eligible to be sold
or distributed pursuant to Rule 144 (or any successor provision) under
the Securities Act within any consecutive three month period (including,
without limitation, pursuant to Rule 144(k)) without volume limitations.
1.7. "SECURITIES ACT": the Securities Act of 1933, as amended.
2. Registration Rights.
2.1 SHELF REGISTRATION STATEMENT
(a) Obligation to File and Maintain. Subject to the prior receipt by
the Company of the audited financial statements, auditors'
report and current accountants' consent required by Section 10.6
of the Sale and Purchase Agreement, the Company agrees to
prepare and, within two hundred seventy (270) days following the
Completion Date (as defined in the Sale and Purchase Agreement)
and in any event not later than June 30, 2003 (or, if later, the
date that the Company's report on Form 20-F is required to be
filed with the Commission), to file with the Commission, one (1)
registration statement for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act,
as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission, covering
all of the Registrable Securities held by the Holders (such
registration, the "Shelf Registration Statement"). The Shelf
Registration Statement shall be on Form F-3 under the
246
Securities Act or another appropriate form selected by the
Company (and reasonably acceptable to the participating Holders)
permitting registration of such Registrable Securities for
resale by the participating Holders in the manner or manners
reasonably designated by them (not including underwritten
offerings). The Company shall use its reasonable commercial best
efforts to cause the Shelf Registration Statement to be declared
effective by the Commission pursuant to the Securities Act no
later than the one year anniversary of the Completion Date, and
to keep the Shelf Registration Statement continuously effective
under the Securities Act until the later of (i) the third
anniversary of the Completion Date or (ii) the date on which all
of such securities are eligible to be sold or distributed
pursuant to Rule 144 (or any successor provision) under the
Securities Act within any consecutive three month period
(including, without limitation, pursuant to Rule 144(k)) without
volume limitations (such period, the "Effectiveness Period");
provided, that the Effectiveness Period shall be extended by
that number of days which is equal to the aggregate number of
days that the selling Holders are required to suspend use of the
Shelf Registration Statement pursuant to actions or events
described in Section 3 of this Agreement.
(b) Selling Securityholder Information. The Company may require each
participating Holder to furnish to the Company such information
regarding the Holder and the distribution of the Registrable
Securities as the Company may from time to time reasonably
require for inclusion in the Shelf Registration Statement, and
the Company may exclude from such registration the Registrable
Securities of any Holder that fails to furnish such information
within twenty (20) business days after delivery of such request
by the Company. Each Holder agrees to furnish to the Company all
information required to be disclosed in order to make the
information previously furnished to the Company by such Holder
not misleading.
(c) The Company represents and warrants that it currently meets the
requirements for use of Form F-3 for registration of the public
resale of the Registrable Securities and has no knowledge of any
facts which would cause the Company to fail to meet such
requirements. In the event that after the Completion Date Form
F-3 is not available for the registration of the public resale
of Registrable Securities pursuant to the terms herein, the
Company shall use reasonable efforts to (i) register the public
resale of the Registrable Securities on another appropriate
short form, reasonably acceptable to the Holders, and (ii)
undertake to register the Registrable Securities on Form F-3 as
soon as such form is available; PROVIDED, that the Company shall
maintain the effectiveness of the Shelf Registration Statement
then in effect until such time as a Shelf Registration Statement
on Form F-3 covering the Registrable Securities has been
declared effective; PROVIDED, further that the combined
effectiveness period of all Shelf Registration Statements
covering the Registrable Securities shall not be longer than the
Effectiveness Period.
247
2.2 REGISTRATION PROCEDURES.
In connection with the preparation and filing of the Shelf Registration
Statement, the Company shall, as expeditiously as practicable:
(a) prepare and file with the Commission a registration statement on
Form F-3 under the Securities Act or another appropriate form
selected by the Company (and reasonably acceptable to the
participating Holders) for the disposition of the Registrable
Securities of the Holders, which shall comply as to form in all
material respects with the requirements of the applicable form
and include all financial statements required by the Commission
to be filed therewith, and the Company shall use its best
efforts to cause such registration statement to become and
remain effective (PROVIDED, HOWEVER, that before filing a
registration statement or prospectus or any amendments or
supplements thereto, or comparable statements under securities
or blue sky laws of any jurisdiction, the Company will furnish
to one counsel for the Holders participating in the planned
offering (selected by the Holders of a majority of the
Registrable Securities included in such registration) copies of
all such documents proposed to be filed (including all exhibits
thereto), which documents will be subject to the reasonable
review and reasonable comment of such counsel;
(b) prepare and file with the Commission such pre- and
post-effective amendments and supplements to such registration
statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective until
the expiration of the Effectiveness Period and to comply with
the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Securities covered by such
registration statement in accordance with the intended methods
of disposition by the seller or sellers thereof set forth in
such registration statement;
(c) furnish, without charge, to each seller of such Registrable
Securities such number of copies of such registration statement,
each pre- and post-effective amendment and supplement thereto
(in each case including all exhibits), and the prospectus
included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of
the Securities Act, and other documents, as such seller may
reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such
seller (the Company hereby consenting to the use in accordance
with all applicable laws and the provisions of this Agreement of
each such registration statement (or amendment or post-effective
amendment thereto) and each such prospectus (or preliminary
prospectus or supplement thereto) by each such seller of
Registrable Securities in
248
connection with the offering and sale of the Registrable
Securities covered by such registration statement or
prospectus);
(d) use its reasonable commercial best efforts to register or
qualify the Registrable Securities covered by such registration
statement under such other securities or "blue sky" laws of such
jurisdictions as any sellers of Registrable Securities shall
reasonably request, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition of the Registrable
Securities in such jurisdictions, except that in no event shall
the Company be required to qualify to do business as a foreign
corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (e), be required to be so
qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any
such jurisdiction;
(e) promptly notify each Holder selling Registrable Securities
covered by such registration statement: (i) when the
registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been
filed and, with respect to the registration statement or any
post-effective amendment, when the same has become effective
(with such notification by fax or email on the same day as such
filing or effectiveness); (ii) of any request by the Commission
or state securities authority for amendments or supplements to
the registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for
that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the registration
or qualification of any Registrable Securities for sale under
the securities or blue sky laws of any jurisdiction or the
initiation of any proceeding for such purpose; and (v) of the
existence of any fact of which the Company becomes aware which
results in the registration statement, the prospectus related
thereto or any document incorporated therein by reference
containing an untrue statement of a material fact or omitting to
state a material fact required to be stated therein or necessary
to make any statement therein not misleading; and, if the
notification relates to an event described in clause (v), the
Company shall (A) promptly, and in any event within ten (10)
business days, prepare and file with the Commission a prospectus
supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall
not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein in the light of the circumstances
under which they were made not misleading and (B) promptly
furnish to each such seller a reasonable number of copies of
such supplemented or amended prospectus. In the event the
Company shall give any such notice, the Effectiveness Period
shall be
249
extended by the number of days during such period from and
including the date of the giving of such notice to and including
the date when each seller of any Registrable Securities covered
by such registration statement shall have received the copies of
the supplemented or amended prospectus;
(f) comply with all applicable rules and regulations of the
Commission;
(g) (i) cause all such Registrable Securities covered by such
registration statement to be listed on the principal US
securities exchange on which similar securities issued by the
Company are then listed (if any), if the listing of such
Registrable Securities is then permitted under the rules of such
exchange, or (ii) if no similar securities are then so listed,
use its best efforts to cause all such Registrable Securities to
be listed on a national securities exchange or, failing that,
secure designation of all such Registrable Securities as a
National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") "national market system security"
within the meaning of Rule 11Aa2-1 of the Commission or, failing
that, secure NASDAQ authorization for such securities and,
without limiting the generality of the foregoing, take all
reasonable commercial actions that may be required by the
Company as the issuer of such Registrable Securities in order to
facilitate the registration of at least two market makers as
such with respect to such securities with the National
Association of Securities Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such
registration statement not later than the effective date of such
registration statement;
(i) deliver promptly to each Holder participating in the offering
copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the
registration statement, other than those portions of any such
correspondence and memoranda which contain information subject
to attorney-client privilege with respect to the Company, and,
upon receipt of such confidentiality agreements as the Company
may reasonably request, make reasonably available for inspection
by any seller of such Registrable Securities covered by such
registration statement, and by any attorney, accountant or other
agent retained by any such seller, all pertinent financial and
other records, pertinent corporate documents and properties of
the Company, and cause all of the Company's officers, directors
and employees to supply all information reasonably requested by
any such seller, attorney, accountant or agent in connection
with such registration statement;
(j) use its reasonable commercial best efforts to obtain the
withdrawal of any order suspending the effectiveness of the
registration statement;
250
(k) provide a CUSIP number for all Registrable Securities, not later
than the effective date of the registration statement;
(l) furnish to each Holder participating in the offering, without
charge, at least one signed copy of the registration statement
and any post-effective amendments thereto, including financial
statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by
reference);
(m) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates
not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to
be issued in such denominations and registered in such names in
accordance with the instructions of the selling holders of
Registrable Securities at least three business days prior to any
sale of Registrable Securities; and
(n) take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the
disposition of such Registrable Securities.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.2 that each seller of Registrable
Securities as to which any registration is being effected furnish the
Company such information regarding such seller and the distribution of
such securities as the Company may from time to time reasonably request,
provided that such information shall be used only in connection with
such registration.
Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind
described in clause (v) of paragraph (e) of this Section 2.2, such
Holder will discontinue such Holder's disposition of Registrable
Securities pursuant to the registration statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (e) of this
Section 2.2 and, if so directed by the Company, will deliver to the
Company (at the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such
notice. In the event the Company shall give any such notice, the
Effectiveness Period shall be extended by the number of days during such
period from and including the date of the giving of such notice to and
including the date when each seller of any Registrable Securities
covered by such registration statement shall have received the copies of
the supplemented or amended prospectus contemplated by paragraph (e) of
this Section 2.2.
If any such registration statement or comparable statement under "blue
sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to
require (i) the insertion therein of language, in form and substance
satisfactory to such Holder and the Company, to the effect that the
holding by such Holder of such
251
securities is not to be construed as a recommendation by such Holder of
the investment quality of the Company's securities covered thereby and
that such holding does not imply that such Holder will assist in meeting
any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not in the
judgment of the Company, as advised by counsel, required by the
Securities Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such
Holder.
2.3 REGISTRATION EXPENSES.
(a) "EXPENSES" shall mean any and all fees and expenses incident to
the Company's performance of or compliance with this Agreement,
including, without limitation: (i) Commission, stock exchange or
NASD registration and filing fees and all listing fees and fees
with respect to the inclusion of securities in NASDAQ, (ii) fees
and expenses incurred in complying with United States or Israeli
securities or state blue sky laws, (iii) printing expenses, (iv)
messenger and delivery expenses, (v) fees and disbursements of
counsel for the Company, (vi) fees and disbursements of all
independent public accountants (including the expenses of any
audit and/or "cold comfort" letter) and fees and expenses of
other persons, including special experts, retained by the
Company, (vii) fees associated with the issuance of the
Company's American Depository Shares, evidenced by ADRs issued
pursuant to the Deposit Agreement, dated as of January 24, 1996,
by and among the Bank of New York, as depositary, the Company
and holders of American Depositary Receipts (the "ADR
FACILITY"), and (viii) fees and expenses, if any, relating to
the maintenance, administration or amendment of the depository
facility for the ADSs in connection with the sale of any
Registration Securities (collectively, "EXPENSES").
(b) The Company shall pay all Expenses with respect to the
registration contemplated by this Agreement whether or not such
registration becomes effective or remains effective for the
period contemplated by Section 2.1.
(c) Notwithstanding the foregoing, (x) the provisions of this
Section 2.3 shall be deemed amended to the extent necessary to
cause these expense provisions to comply with "blue sky" laws of
each state in which the offering is made and (y) in connection
with any registration hereunder, each Holder of Registrable
Securities being registered shall pay all transfer taxes, if
any, attributable to the Registrable Securities included in the
offering by such Holder and (z) the Company shall, in the case
of all registrations under this Agreement, be responsible for
all its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing
legal or accounting duties).
252
2.4 NO REQUIRED SALE.
Nothing in this Agreement shall be deemed to create an independent
obligation on the part of any Holder to sell any Registrable Securities
pursuant to any effective registration statement.
2.5 INDEMNIFICATION.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Agreement, the
Company will, and hereby does, indemnify and hold harmless, to
the fullest extent permitted by law, the seller of any
Registrable Securities covered by such registration statement,
its directors, officers, fiduciaries, employees and stockholders
or general and limited partners (and the directors, officers,
employees and stockholders thereof), and each other Person, if
any, who controls such seller within the meaning of the
Securities Act, against any and all losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether
commenced or threatened) in respect thereof ("CLAIMS") and
expenses (including reasonable fees of counsel and any amounts
paid in any settlement effected with the Company's consent,
which consent shall not be unreasonably withheld or delayed) to
which each such indemnified party may become subject under the
Securities Act or otherwise, insofar as such Claims or expenses
arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any
registration statement under which such securities were
registered under the Securities Act or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary, final
or summary prospectus or any amendment or supplement thereto,
together with the documents incorporated by reference therein,
or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, or (iii) any violation by
the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action
required of or inaction by the Company in connection with any
such registration, and the Company will reimburse any such
indemnified party for any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigating or defending any such Claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be
liable to any such indemnified party in any such case to the
extent such Claim or expense arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
or omission or alleged omission of a material fact made in such
registration statement or amendment thereof or supplement
thereto or in any such prospectus or any preliminary, final or
summary prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of
such indemnified party specifically for use therein; and
253
PROVIDED, FURTHER, that in no event shall the Company indemnify,
or be deemed to indemnify, any such Person in connection with
any actions taken by such Person in his or her capacity as a
director of the Company to the extent that such indemnification
is not permitted by applicable law. Such indemnity and
reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such
securities by such seller.
(b) Each Holder of Registrable Securities that are included in the
securities as to which any registration under this Agreement is
being effected shall, severally and not jointly, indemnify and
hold harmless (in the same manner and to the same extent as set
forth in paragraph (a) of this Section 2.5) to the extent
permitted by law the Company, its officers and directors, each
Person controlling the Company within the meaning of the
Securities Act and all other prospective sellers and their
directors, officers, general and limited partners and respective
controlling Persons with respect to any untrue statement or
alleged untrue statement of any material fact in, or omission or
alleged omission of any material fact from, such registration
statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if
such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with
written information furnished to the Company or its
representatives by or on behalf of such Holder specifically for
use therein and reimburse such indemnified party for any legal
or other expenses reasonably incurred in connection with
investigating or defending any such Claim as such expenses are
incurred; PROVIDED, HOWEVER, that the aggregate amount which any
such Holder shall be required to pay pursuant to this Section
2.5(b) and Sections 2.5(c) and (e) shall in no case be greater
than the amount of the net proceeds received by such person upon
the sale of the Registrable Securities pursuant to the
registration statement giving rise to such claim. Such indemnity
shall remain in full force and effect regardless of any
investigation made by or on behalf of such indemnified party and
shall survive the transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.5 (with appropriate
modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration
or other qualification of securities under any state securities
and "blue sky" laws.
(d) Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the
commencement of any action or proceeding with respect to which a
claim for indemnification may be made pursuant to this Section
2.5, but the failure of any indemnified party to provide such
notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.5,
except to the extent the indemnifying party is
254
materially prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Article 2. In case
any action or proceeding is brought against an indemnified party
and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein and, unless in the reasonable opinion of outside counsel
to the indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist in respect of
such claim, to assume the defense thereof jointly with any other
indemnifying party similarly notified, to the extent that it
chooses, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified
party that it so chooses, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
investigation; PROVIDED, HOWEVER, that (i) if the indemnifying
party fails to take reasonable steps necessary to defend
diligently the action or proceeding within 20 days after
receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; or (ii) if
such indemnified party who is a defendant in any action or
proceeding which is also brought against the indemnifying party
reasonably shall have concluded that there may be one or more
legal defenses available to such indemnified party which are not
available to the indemnifying party; or (iii) if representation
of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any
such case, the indemnified party shall have the right to assume
or continue its own defense as set forth above (but with no more
than one firm of counsel for all indemnified parties in each
jurisdiction, except to the extent any indemnified party or
parties reasonably shall have concluded that there may be legal
defenses available to such party or parties which are not
available to the other indemnified parties or to the extent
representation of all indemnified parties by the same counsel is
otherwise inappropriate under applicable standards of
professional conduct) and the indemnifying party shall be liable
for any expenses therefor. No indemnifying party shall, without
the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such
settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out
of such action or claim and (B) does not include a statement as
to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under
Sections 2.5(a), (b) or (c),
255
then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of any Claim in
such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and the indemnified
party, on the other hand, with respect to such offering of
securities. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or
omission. If, however, the allocation provided in the second
preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to the amount paid or
payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative faults but also
the relative benefits of the indemnifying party and the
indemnified party as well as any other relevant equitable
considerations. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section
2.5(e) were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the
equitable considerations referred to in the preceding sentences
of this Section 2.5(e). The amount paid or payable in respect of
any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding anything in this Section
2.5(e) to the contrary, no indemnifying party (other than the
Company) shall be required pursuant to this Section 2.5(e) to
contribute any amount in excess of the net proceeds received by
such indemnifying party from the sale of Registrable Securities
in the offering to which the losses, claims, damages or
liabilities of the indemnified parties relate, less the amount
of any indemnification payment made pursuant to Sections 2.5(b)
and (c).
(f) The indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified
party and shall survive the transfer of the Registrable
Securities by any such party.
(g) The indemnification and contribution required by this Section
2.5 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when
bills are received or expense, loss, damage or liability is
incurred.
256
3 "Market Stand-Off" Agreement/Black-Out Periods.
(a) During the Effectiveness Period, each Holder that, at any time
within twenty (20) trading days prior to the effectiveness of
the registration statement referred to below, owns 5% or more of
the Company's issued and outstanding equity securities, if
requested by the Company and the managing underwriter, shall
agree that, during the period of ninety (90) days (or such
lesser time period as is agreed to by all officers and directors
of the Company and all holders of 5% or more of the Company's
issued and outstanding equity securities) following the
effective date of a registration statement of the Company filed
under the Securities Act in connection with an underwritten
offering, it shall not sell or otherwise transfer or dispose of
(other than to donees or partners who agree to be similarly
bound) any ADSs or Ordinary Shares of the Company held by it
except any ADSs or Ordinary Shares of such Holder included in
such registration; PROVIDED, HOWEVER, that any Holder that holds
less than 5% of the Company's issued and outstanding equity
securities for each of the twenty (20) trading days prior to the
effectiveness of such registration statement may, commencing on
the thirty-first (31st) day after the effective date of the
registration statement, sell ADSs or Ordinary Shares
representing up to the greater of (x) 1% of the Company's then
issued and outstanding equity securities or (y) the average
weekly trading volume of the Company's equity securities during
the four week period ending on the effective date of the
registration statement; and PROVIDED, FURTHER, that:
(i) the foregoing agreement by the Holder shall be in
writing in a form reasonably satisfactory to the Holder;
(ii) such agreement shall be applicable only to a
registration statement initiated by the Company which
covers ADSs or Ordinary Shares to be sold on its behalf
to the public in a firmly committed underwritten
offering; and
(iii) all officers and directors of the Company and all
holders of 5% or more of the Company's issued and
outstanding equity securities enter into similar
agreements.
(b) Notwithstanding anything herein to the contrary, the
Company shall be entitled to postpone or suspend (but
not for a period exceeding 60 days or until the Company
notifies the Holders of the termination of any black-out
period) the filing or effectiveness of a registration
statement otherwise required to be prepared and filed by
it pursuant to Section 2.1 or require the Holders not to
sell under the Shelf Registration Statement as provided
for under Section 2.1 if the Company determines, in its
good faith judgment, or if the managing underwriter for
any underwritten offering advises the Company in
writing, that such registration and offering, continued
effectiveness or sale would interfere with any material
financing, acquisition, disposition, corporate
reorganization or other material transaction involving
the Company or
257
any of its subsidiaries or public disclosure thereof
would be required prior to the time such disclosure
might otherwise be required, or when the Company is in
possession of material information that it deems
advisable not to disclose in a registration statement (a
"VALID BUSINESS REASON BLACK-OUT PERIOD"), PROVIDED,
HOWEVER, that (A) the Holders shall not be prohibited
from selling ADSs or Ordinary Shares pursuant to the
Shelf Registration Statement for 120 days after the
Shelf Registration Statement is declared effective by
the Commission, (B) the aggregate number of days
included in all Valid Business Reason Blackout Periods
during any consecutive six (6) months shall not exceed
sixty (60) days and (C) there shall not be more than
four (4) Valid Business Reason Black-Out Periods during
any consecutive twelve (12) month period. The Company
shall not be entitled to initiate a Valid Business
Reason Black-Out Period unless it shall (i) to the
extent permitted or required by agreements with other
security holders of the Company, concurrently prohibit
sales by such other security holders under registration
statements covering securities held by such other
security holders during such Valid Business Reason
Blackout Period and (ii) concurrently prohibit purchases
and sales in the open market by directors and executive
officers of the Company during such Valid Business
Reason Blackout Period.
(c) Each Holder further acknowledges and agrees that such
Holder may have access to confidential information that
constitutes material non-public information regarding
the Company for purposes of the securities laws of the
United States, and that such laws prohibit any person
who has material non-public information about a company
from purchasing or selling securities of such company,
or from communicating such information to any other
person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or
sell such securities.
4 General.
4.1 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES.
The Company agrees that it shall not effect or permit to occur any
combination or subdivision of shares or any change in the number of
Ordinary Shares represented by each ADS unless and until the Company has
filed a registration statement with the Commission (or duly amended an
existing effective registration statement), such that, after giving
effect to such combination, subdivision or change, there shall be a
sufficient number of registered ADSs to represent all Ordinary Shares
underlying Registrable Securities held by all of the Holders pursuant to
this Agreement.
4.2 MERGERS, ETC.
The Company shall not, directly or indirectly, enter into any merger,
consolidation or reorganization in which the Company shall not be the
surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing
to assume the
258
obligations of the Company under this Agreement, and thereafter
references hereunder to "Registrable Securities" shall be deemed to be
references to the securities that the Holders of the Registrable
Securities receive in exchange for Registrable Securities under any such
merger, consolidation or reorganization; PROVIDED, HOWEVER, that the
provisions of this Agreement shall not apply in the event of any merger,
consolidation or reorganization in which the Company is not the
surviving corporation if all Holders of Registrable Securities are
entitled to receive in exchange for their Registrable Securities
consideration consisting solely of (i) cash, (ii) securities of the
acquiring corporation that may be immediately sold to the public without
registration under the Securities Act or (iii) securities of the
acquiring corporation that the acquiring corporation has agreed to
register within 90 days of the completion of the transaction for resale
to the public pursuant to the Securities Act.
4.3 RULE 144
For so long as any Holder holds Registrable Securities and the Company
is subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), the Company covenants that it
will timely file the reports required to be filed by it under the
Securities Act or the Exchange Act (including, but not limited to, the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 under the Securities Act), and will take
such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the Commission.
4.4 NOMINEES FOR BENEFICIAL OWNERS.
If Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its option, be treated as
the Holder of such Registrable Securities for purposes of any request or
other action by any Holder or Holders of Registrable Securities pursuant
to this Agreement (or any determination of any number or percentage of
Ordinary Shares constituting Registrable Securities held by any Holder
or Holders of Registrable Securities contemplated by this Agreement);
provided that the Company shall have received assurances reasonably
satisfactory to it of such beneficial ownership.
4.5 AMENDMENTS AND WAIVERS.
This Agreement may be amended, modified, supplemented or waived only
upon the written agreement of the party against whom enforcement of
such amendment, modification, supplement or waiver is sought.
4.6 NOTICES.
Except as otherwise provided in this Agreement, notices and other
communications under this Agreement shall be in writing and delivered
259
personally, by telecopy (with confirmation sent within three business
days by overnight courier) or by overnight courier, addressed to such
party at the address set forth below:
(i) if to the Company, to:
[Nice]
with a copy to:
▇▇▇▇▇ Raysman ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(ii) if to the Initial Holder, to:
[Thales]
with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Each Holder, by written notice given to the Company in accordance with
this Section 4.6 may change the address to which such notice or other
communications are to be sent to such Holder. All such notices and
communications shall be deemed to have been received on the date of
delivery thereof, if delivered by hand, on the fifth day after the
mailing thereof, if mailed, on the next day after the sending thereof,
if by overnight courier, when answered back if telexed and when receipt
is acknowledged, if telecopied.
4.7 MISCELLANEOUS.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and
the respective successors and assigns of the parties
hereto, whether so expressed or not. No Person other
than a Holder shall be entitled to any benefits under
this Agreement, except as otherwise expressly provided
herein. This Agreement and the rights of the parties
hereunder may be assigned by any of the parties hereto
to any transferee of Registrable Securities, provided
that such transferee agrees in writing to be bound by
this Agreement and the transfer restrictions set forth
in Schedule 11 to the Sale and Purchase Agreement in
respect of such Registrable Securities.
260
(b) This Agreement (with the documents referred to herein or
delivered pursuant hereto) embodies the entire agreement
and understanding between the parties hereto and
supersedes all prior agreements and understandings
relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of
New York without giving effect to the conflicts of law
principles thereof.
(d) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect
the meaning hereof. All Section references are to this
Agreement unless otherwise expressly provided.
(e) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.
(f) Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
(g) It is hereby agreed and acknowledged that it will be
impossible to measure in money the damages that would be
suffered if the parties fail to comply with any of the
obligations herein imposed on them and that in the event
of any such failure, an aggrieved person will be
irreparably damaged and will not have an adequate remedy
at law. Any such person shall, therefore, be entitled to
injunctive relief, including specific performance, to
enforce such obligations, without the posting of any
bond and if any action should be brought in equity to
enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is
an adequate remedy at law.
(h) Each party hereto shall do and perform or cause to be
done and performed all such further acts and things and
shall execute and deliver all such other agreements,
certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions
contemplated hereby.
261
4.8 NO INCONSISTENT AGREEMENTS; SECURITIES REMAIN SUBJECT TO OTHER
CONTRACTUAL RESTRICTIONS.
Neither the Company nor any Holder has, prior to the date of this
Agreement entered into, or will, on or after the date of this Agreement
enter into, any agreement with respect to its securities which is
inconsistent with the rights granted in this Agreement or otherwise
conflicts with the provisions hereof. Notwithstanding this Agreement and
the effectiveness of any Shelf Registration Statement, the Holder
acknowledges that pursuant to the terms of the Sale and Purchase
Agreement, the ADSs and Ordinary Shares issued to the Holder are subject
to certain restrictions on transfer pursuant to Schedule 11 to the Sale
and Purchase Agreement, including prohibitions on any transfers within
the first year following their issuance, limitations on transfers in
subsequent periods, and limitations on the manner of sale (including
pricing) of ADSs and any American Depositary Receipts representing ADSs,
and that such restrictions shall apply, in accordance with the terms of
the Sale and Purchase Agreement to sales or other transfers proposed to
be effected pursuant to any Shelf Registration Statement.
262
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set forth above.
[NICE]
By:__________________________________
Name:
Title:
[THALES]
By:__________________________________
Name:
Title:
263
STANDSTILL AGREEMENT
STANDSTILL AGREEMENT (this "AGREEMENT"), dated as of _____________, 2002
[TO BE DELIVERED AT, AND EFFECTIVE AS OF THE EXECUTION OF THE DEFINITIVE SALE
AND PURCHASE AGREEMENT], by and between [THALES] ("[THALES]"), a
________________ having an address at __________________ and [NICE] ("[Nice]"),
a ________________ having an address at __________________.
RECITALS
WHEREAS, Thales and Nice have entered into that certain Sale and
Purchase Agreement, dated as of _________, 2002 (the "SALE AND PURCHASE
AGREEMENT") whereby Thales has agreed to sell, and Nice has agreed to purchase,
the Business (as defined in the Sale and Purchase Agreement) as a going concern
and the Assets (as defined in the Sale and Purchase Agreement), either directly
or through its subsidiaries, upon the terms of the Sale and Purchase Agreement
(the "TRANSACTION"); and
WHEREAS, Nice is an Israeli company whose American Depository Receipts
("ADRS") are listed on the NASDAQ Stock Market and is subject to the applicable
provisions of the Securities Act of 1933, the Securities and Exchange Act of
1934 (the "EXCHANGE ACT") and the rules and regulations promulgated by the
Securities and Exchange Commission and NASDAQ, and Thales will be required to
effect certain filings pursuant to those laws, rules and regulations from time
to time with respect to its ownership of ___________ Ordinary Shares and/or ADRs
evidencing such Ordinary Shares in Nice (the "NICE SHARES") issued as partial
consideration in the Transaction; and
WHEREAS, as a material condition of Nice entering into the Sale and
Purchase Agreement, Nice requires that Thales execute and deliver this
Agreement; and
WHEREAS, Nice and Thales have agreed that it is in their mutual
interests to enter into this Agreement as hereinafter described.
NOW, THEREFORE, in consideration of the premises, covenants, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
264
1. RESTRICTION ON CERTAIN ACTIONS.
(a) During the term of this Agreement, neither
Thales nor any of its controlled Affiliates (as
such term is defined in Rule 12b-2 of Regulation
12B under the Exchange Act) (collectively, the
"THALES Group") will do any of the following
without the prior written consent of the Board
of Directors of Nice:
(i) acquire, offer to acquire, or agree to acquire, directly
or indirectly, including as part of a group (within the
meaning of Section 13(d)(3) of the Exchange Act), by
purchase or otherwise, beneficial ownership of any
securities or direct or indirect rights to acquire any
securities of Nice if, as a result of such acquisition:
(A) the securities so acquired or offered or agreed to be
acquired by any one or more members of the Thales Group,
together with all securities of Nice (excluding the
Share Consideration) acquired by all members of the
Thales Group within the twelve months preceding such
acquisition, in the aggregate represent or, if so
acquired, would represent more than two percent (2%) of
the number of Ordinary Shares of Nice issued and
outstanding as of the Completion Date (as defined in the
Sale and Purchase Agreement) after giving effect to the
Nice securities to be issued at Completion (as defined
in the Sale and Purchase Agreement); or
(B) the securities so acquired or offered or agreed to be
acquired by any one or more members of the Thales Group,
together will all securities of Nice (including any
portion of the Share Consideration) then beneficially
owned by any member of the Thales Group, in the
aggregate represent or, if so acquired would represent
more than twenty-four percent (24%) of the number of
Ordinary Shares of Nice issued and outstanding as of the
Completion Date after giving effect to the Nice
securities to be issued at Completion.
(ii) at any time during which Thales has one or more nominees
on the Board of Directors of Nice or during which Thales
has no nominees on the Board due to their voluntary
resignation, or due to an Acceptable Reason,
265
(A) grant any proxies (as defined in the Exchange Act) with
respect to any voting securities of Nice, or securities
convertible or exchangeable into such securities (except
as recommended by the Board of Directors of Nice) or
deposit any such securities in a voting trust or enter
into any other arrangement or agreement with respect to
the voting thereof; or
(B) make, or in any way participate in, directly or
indirectly, any solicitation of proxies to vote (as such
terms are used in the rules of the Securities and
Exchange Commission), or seek to advise or influence any
person or entity with respect to the voting of any
voting securities of Nice;
PROVIDED that, notwithstanding the foregoing, Thales shall be entitled
to accept or participate in any unsolicited proposal from any
independent third party with respect to any of the transactions
described in the foregoing clauses (A) and (B) on the same terms, and
subject to the same conditions, as would apply to any other shareholder
of Nice;
(iii) offer, propose, seek to enter into, make any public
announcement with respect to, or otherwise solicit (with
or without conditions), any acquisition transaction,
business combination or other similar extraordinary
transaction involving Nice or any of its subsidiaries or
any of its or their securities or assets; PROVIDED that,
notwithstanding the foregoing, Thales shall be entitled
to accept or participate in any unsolicited proposal
from any independent third party with respect to any
such transaction on the same terms, and subject to the
same conditions, as would apply to any other shareholder
of Nice; or
(iv) request Nice or any of its representatives, directly or
indirectly, to amend or waive any provision of this
Agreement.
2. TERM. The term of this Agreement shall be for the period commencing
on the date hereof and ending on the second anniversary of Completion
(as defined in the Sale and Purchase Agreement); PROVIDED that this
Agreement shall terminate, and be of no further force or effect,
immediately upon
266
termination of the Sale and Purchase Agreement; and PROVIDED, FURTHER
that, in the event that, for any reason other than a Bona Fide Dispute
or an Acceptable Reason (each as defined in Schedule 12 to the Sale and
Purchase Agreement), Thales' nominees to the Board of Directors of Nice
are not appointed or re-appointed by Nice, or are removed or replaced by
Nice, this Agreement shall terminate and be of no further force or
effect (but, for the avoidance of doubt, this Agreement will not
automatically terminate upon the voluntary resignation of Thales'
nominees).
3.REMEDIES. Thales acknowledges and agrees that (i) the provisions of
this Agreement are reasonable and necessary to protect the proper and
legitimate interests of Nice and (ii) Nice would be irreparably harmed
in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached, making any remedy at law inadequate. Accordingly, Thales
further acknowledges and agrees that (i) Nice shall be entitled to an
injunction and/or injunctions to redress breaches or threatened breaches
hereof and to specific performance, in addition to any other appropriate
relief, all of the same being cumulative, and (ii) that Nice may apply
to any court of competent jurisdiction for specific performance,
injunctive or other relief to enforce this Agreement and/or to prevent
any violation of it, and shall not be required to post any bond as a
condition of procuring such injunctive or other equitable relief.
4. MISCELLANEOUS.
4.1. ENTIRE AGREEMENT. This Agreement and the Sale and
Purchase Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior
understandings, agreements, or representations by or
between the parties, written or oral, to the extent they
relate in any way to the subject matter hereof.
4.2. SEVERABILITY. If any term, provision or restriction
contained in this Agreement is held invalid, void, or
unenforceable by a court of competent jurisdiction, the
remaining terms and provisions hereof shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated.
4.3. SUCCESSOR AND ASSIGNS. This Agreement shall be binding
upon Thales and its respective heirs, personal
representatives, and successors, and shall inure to the
benefit of Nice and its successors and assigns.
267
4.4. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the
State of New York without giving effect to any choice or
conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other
than the State of New York.
4.5. AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be
in writing and signed by Nice. No waiver by Nice of any
default or breach hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent
default or breach hereunder or affect in any way any of
Nice's rights arising by virtue of any prior or
subsequent such occurrence.
4.6. CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by all of the parties
and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
4.7. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an
original but all of which together will constitute one
and the same instrument.
268
y IN WITNESS WHEREOF, the parties hereto have caused this Standstill
Agreement to be executed by their duly authorized officers on the date first
above written.
[THALES]
By:___________________________
Name:
Title:
[NICE]
By:___________________________
Name:
Title:
269
SCHEDULE 12
TRANSITIONAL SERVICES AGREEMENT
270
DATED 2001
THALES (1)
AND
NICE (2)
-------------------------------------
TRANSITIONAL SERVICES AGREEMENT
------------------------------------
271
CONTENTS
1 Definitions and Interpretation
2 Provision of Services
3 Service Fees
4 Vehicle Leases and Cards
5 Warranties and Limitations of Liability
6 Force Majeure
7 Modifications
8 Termination
9 Consequences of Termination
10 Sub-contracting, Assignment and Affiliates
11 Confidentiality
12 Entire Agreement and Variation of Terms
13 Waiver; Remedies
14 Severability of Provisions
15 Notices
16 Counterparts
17 Dispute Resolution
18 Governing Law and Jurisdiction
Schedules
1 Services
2 Vehicles
3 Terms and Conditions relating to Secondments
272
THIS AGREEMENT is made the day of 2002
BETWEEN:
(1) [Thales] a French societe anonyme having its registered office at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (▇▇▇▇▇) ("Thales"); and
(2) [Nice] an Israeli company having its registered office at ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ ("Nice")
BACKGROUND
(A) Thales, Nice and others entered into an agreement for the sale and
purchase of the business and assets of certain Thales subsidiaries on [
] July 2002 (the "Sale Agreement").
(B) This Agreement is the Transitional Services Agreement referred to in the
Sale Agreement and describes the arrangements for the provision of
certain services and facilities by Thales and certain Affiliates of
Thales to Nice on a temporary basis following Completion (as defined in
the Sale Agreement).
(C) This Agreement also makes provision relating to the assignment of leases
of vehicles and the use of petrol cards.
IT IS AGREED AS FOLLOWS:
1 DEFINITIONS AND INTERPRETATION
273
1.1 Words and expressions defined in the Sale Agreement shall have the same
meaning in this Agreement, and the following words and expressions in
this Agreement shall have the meanings respectively set opposite them:
"ACTUAL COSTS" has the meaning given at clause 3.2;
"CARDS" those petrol cards issued to employees who
have the benefit of a company car;
"CONTRACTS" the PHH Lease Contract and the PHH Service
Contract and the HSBC Lease Contract;
"DISPUTE RESOLUTION PROCEDURE" the procedure for resolving disputes under this
Agreement described in clause 19;
"HSBC LEASE CONTRACT" The Contract Hire Master Agreement dated 2
August 2001 between Thales Corporate Services
Limited and HSBC Vehicle Finance (UK) Limited as
amended by an Endorsement dated 2 August 2001;
274
"PHH LEASE CONTRACT" the Contract Hire Agreement dated 27 March 1997
between Racal Electronics Plc (now Thales
Electronics Plc) and PHH Vehicle Management
Services PLC (now Arval PHH Business Solutions
Limited) as amended by an Addendum Agreement
dated 25 July 2001;
"PHH SERVICES CONTRACT" the Master Maintenance and Management Services
Agreement dated 13 August 1997 between Racal
Electronics Plc (now Thales Electronics Plc) and
PHH Vehicle Management Services PLC (now Arval
PHH Business Solutions Limited);
"PHH VEHICLES" those vehicles details of which are at Part 1 of
Schedule 4;
"PRIOR PERIOD" the 6-month period immediately preceding the
Completion Date;
"SALE AGREEMENT" the agreement dated [ ] July 2002 made between
Thales, Nice and others;
"SERVICE COMMENCEMENT DATE" the Completion Date;
"SERVICE FEES" the amounts to be paid for the provision of the
Services pursuant to this Agreement;
"SERVICE PROVIDER" the party noted in Schedule 1 as providing a
Service in accordance with this Agreement;
"SERVICE PREMIUM" the amount being a percentage of Actual Costs
payable in respect of the Services as part of
the Service Fee and specified for each Service
at Schedule 1;
275
"SERVICE RECIPIENT" the party noted in Schedule 1 as receiving a
Service in accordance with this Agreement;
"SERVICES" the services numbered Service 1 to Service 9
more particularly described in Schedule 1;
"SERVICE TERMINATION DATE" the date noted in Schedule 1
as the service termination date for a given
service, or such later date as the parties may
agree in writing;
"VEHICLES" the PHH Vehicles and the HSBC Vehicles;.
1.2 In this Agreement, unless the context otherwise requires:
1.2.1 references to this Agreement include references to this
Agreement, its Background and its Schedules as varied,
supplemented and/or replaced in any manner from time to time;
1.2.2 references to any party shall, where relevant, be deemed to be
references to or to include, as appropriate, their respective
lawful successors, assigns or transferees;
1.2.3 references to the background, clauses, Schedules and
sub-divisions of them are references to the Background and
clauses of, and Schedules to, this Agreement and sub-divisions
of them respectively;
1.2.4 references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or extended
before the date of this Agreement and any subordinate
legislation made from time to time under it;
276
1.2.5 references to a "person" include any individual, company,
corporation, firm, partnership, joint venture, association,
organisation, institution, trust or agency, whether or not
having a separate legal personality;
1.2.6 references to the one gender include all genders and references
to the singular shall include the plural and vice versa;
1.2.7 headings are inserted for convenience only and shall be ignored
in construing this Agreement;
1.2.8 the words "company", "subsidiary", "subsidiary undertaking" and
"holding company" have the meanings given to them by the
Companies ▇▇▇ ▇▇▇▇.
2 PROVISION OF SERVICES
2.1 The Services shall be provided by the Service Provider to the Service
Recipient, subject to and in accordance with the terms of this Agreement
from the Service Commencement Date until the Service Termination Date
unless otherwise terminated pursuant to this Agreement.
2.2 Any Service Provider may change part or all of the Services at any time
to the extent such changes are:
2.2.1 necessary to take account of legal or regulatory requirements
affecting the Service or the Service Provider's business;
2.2.2 required by a third party which has the right to require them.
The Service Provider shall use its reasonable endeavours to provide the
Service Recipient with as much notice as may be practicable of any such
change.
277
2.3 A Service Provider shall be entitled to suspend all or any part of the
Services until further notice on notifying the other either orally
(confirmation in writing) or in writing with immediate effect in order
to comply with an order, instruction of Government, an emergency
services organisation or other competent administrative authority,
provided that, where practicable the relevant Service Provider shall:
2.3.1 give the Service Recipient reasonable prior notice in writing;
and
2.3.2 use its reasonable endeavours to minimise the disruption caused
by and the duration of any such suspension.
2.4 The parties shall co-operate in endeavouring to ensure that at all times
there are in place such contracts, licences and other consents of third
parties as are necessary to enable the relevant Service Providers to
provide the Services in accordance with this Agreement.
2.5 The Service Recipient shall provide all such information, data and
materials as the Service Provider may reasonably require to enable it to
supply the Services.
2.6 Thales will procure that each Service Provider performs and fulfils its
duties and obligations as set out in this Agreement as if such Service
Provider was a party to it.
2.7 Nice will procure that each Service Recipient performs and fulfils its
duties and obligations as set out in this Agreement as if such Service
Recipient was a party to it.
3 SERVICE FEES
3.1 Nice shall pay or procure the payment to the relevant Service Provider
of the Service Fees for the Services in accordance with this clause.
278
3.2 The Service Fee for each Service shall be the actual costs incurred by
the relevant Service Provider in providing the relevant Service
("Actual Costs"), including without limitation:
3.2.1 the costs of, and associated with, any additional overheads as
are reasonably necessary for the continued provision of the
relevant Service; and
3.2.2 the actual costs levied by third parties to enable the Service
Provider to provide and the Service Recipient to receive the
Services to the extent that such costs are not otherwise
required to be incurred by the Service Provider for its own
business purposes;
plus the relevant Service Premium.
3.3 A statement of the Actual Costs and Service Premium and an invoice for
the relevant Service Fee for each month shall be provided to the
relevant Service Recipient in respect of each Service within six weeks
of the end of that month period.
3.4 In respect of each Service, the Service Recipient shall pay to the
Service Provider within 14 days of receipt of invoice, the full amount
of such invoice without deduction, set off or counterclaim.
3.5 All amounts due under this Agreement shall be paid in full, in pounds
sterling.
3.6 All overdue amounts payable under this Agreement shall bear interest at
a rate of two per cent per annum over the base lending rate of Barclays
Bank plc, calculated on a daily basis for the period from the due date
of such payment up to and including the date of payment in full, whether
before or after any judgement. Interest shall continue to accrue on a
daily basis notwithstanding termination of this Agreement for any cause
whatsoever.
279
3.7 In the event of a dispute, the parties shall use the Dispute Resolution
Procedure provided that the monthly payments of Service Fees shall
continue to be made during any use of the Dispute Resolution Procedure.
3.8 All charges and fees referred to in this Agreement are exclusive of all
taxes and duties of any nature (including, but not limited to, Value
Added Tax ("VAT") in the United Kingdom) which shall be payable in
addition if required by law (subject, in the case of VAT to production
of a proper VAT invoice ).
4 VEHICLE LEASES AND CARDS
4.1 Nice shall from the Completion Date (but subject to the provisions of
this clause 4) carry out and perform for its own account, with respect
only to the Vehicles, the Contracts.
4.2 Thales and Nice shall use their respective reasonable endeavours to
procure that the other party to the Contracts shall consent to the
Vehicles becoming subject to agreements between Nice and that other
party in a form substantially the same as the Contracts and the removal
of the Vehicles from the terms of the Contracts with effect from the
Completion Date (whether by contract, assignment, novation or
otherwise).
4.3 Nice shall indemnify and keep indemnified Thales and any Affiliate of
Thales from and against all costs, claims, demands, liabilities,
expenses or damages arising out of or in connection with the Contracts
in respect of the period after the Completion Date, except where such
cost, claim, demand, liability, expense or damage shall arise wholly or
partly as a result of the failure by Thales or any Affiliate of Thales
duly to perform and comply with the terms of the relevant Contract prior
to the Completion Date.
4.4 If, after Completion, such consent as is referred to in clause 4.2 shall
be sought but refused or is not obtained within fifty days of the
Completion Date,
280
the parties shall discuss alternative proposals in relation to the
relevant Contracts and Vehicles and in default of agreement within a
further period of ten days, Nice shall or shall procure that where
failure of consent relates to:-
i) the PHH Lease Contract in respect of the PHH Vehicles, the PHH
Vehicles are returned to Thales; and/or
ii) The HSBC Lease Contract in respect of the HSBC Vehicles, the
HSBC Vehicles are returned to Thales;
and in each or either case Nice shall indemnify and keep Thales and any
Affiliate of Thales indemnified from and against all costs, claims,
demands, liabilities, expenses or damages arising from such Contracts in
the period from the Completion Date, including but not limited to the
cost of termination of the leases of the Vehicles following the return
thereof to Thales.
4.5 Nice shall indemnify and keep Thales and any Affiliate of Thales
indemnified from and against all costs, claims, demands, liabilities,
expenses or damages arising from the use at any time following the
Completion Date, of the Cards.
5 WARRANTIES AND LIMITATIONS OF LIABILITY
5.l Each Service Provider warrants that:
5.1.1 the Services will be provided with reasonable skill and care and
shall in all material respects be consistent with those Services
as provided in the Prior Period;
5.1.2 they will comply with all applicable laws in carrying out the
Services and, in so far as they are able, retain all necessary
licences, permissions and consents required to enable the other
party to use the Services.
281
5.2 The Parties shall be liable inter se as expressly provided in this
Agreement, but shall have no other obligation, duty or liability
whatsoever in contract, tort or otherwise to the other in relation to
the Services.
5.3 Notwithstanding any other provisions of this Agreement (other than
clause 5.4) the aggregate liability of each party to the others shall be
limited in respect of claims arising out of or in connection with the
provision of the Services, the Service Provider replacing any
non-conforming Service or otherwise refunding the Service Fee in
relation to that Service.
5.4 Nothing in this Agreement shall exclude or restrict any party's
liability for death or personal injury resulting from its negligence as
defined in the Unfair Contract Terms ▇▇▇ ▇▇▇▇.
5.5 The Parties shall not be liable to each other under this Agreement in
contract, tort or otherwise, including any liability for negligence, for
any loss of revenue, business contracts, anticipated savings, profits or
any indirect or consequential loss. For the purpose of this clause 5.5,
"anticipated savings" means any expense which the party expects to avoid
incurring or to incur in a lesser amount than would otherwise have been
the case by reason of using the Services.
5.6 The provisions of this clause 5 shall continue to apply notwithstanding
the termination or expiry of this Agreement.
6 FORCE MAJEURE
6.1 If either party is prevented, hindered or delayed from or in performing
any of its obligations under this Agreement by a Force Majeure Event,
then:
6.1.1 that party's obligations under this Agreement shall be suspended
for so long as the Force Majeure Event continues and to the
extent that that party is so prevented, hindered or delayed;
282
6.1.2 promptly after commencement of the Force Majeure Event that
party shall notify the other party in writing of the occurrence
of the Force Majeure Event, the date of commencement of the
Force Majeure Event and the effects of the Force Majeure Event
on its ability to perform its obligations under this Agreement;
6.1.3 that party shall use all reasonable efforts to mitigate the
effects of the Force Majeure Event upon the performance of its
obligations under this Agreement; and
6.1.4 immediately after the cessation of the Force Majeure Event that
party shall notify the other party in writing of the cessation
of the Force Majeure Event and shall resume performance of its
obligations under this Agreement as soon as reasonably
practicable.
6.2 For the purposes of this clause, "Force Majeure Event" means any event
beyond the reasonable control of a party including, without limitation,
strikes, lock-outs, labour disputes, industrial action, Acts of God,
war, riot, civil Commotion, terrorist activities, market disruption such
that relevant stock and other markets ate not able to open for business
or to function properly, compliance with any law or governmental order,
rule, regulation or direction of any overriding emergency procedures,
storm or (insofar as the same are beyond such party's reasonable
control) breakdown of plant or machinery, accident, fire, loss of power
or technical failure of software or hardware.
6.3 Each party shall inform the other as soon as is practicable of any
circumstances that are likely to affect the performance of its
obligations hereunder.
7 MODIFICATIONS
283
7.l At any time during the duration of this Agreement, any Service Recipient
may request and any Service Provider may recommend changes to the
Services. Any such changes to Services or new services agreed between
the parties shall become "Services" for the purpose of this Agreement.
7.2 Except as otherwise stated, this Agreement may only be modified if such
modification is in writing and signed by a duly authorised
representative of each party.
8 TERMINATION
8.1 This Agreement shall commence on the Completion Date and, unless
terminated in accordance with this clause 8 shall continue until the
last Service Termination Date.
8.2 This Agreement may be terminated by the parties forthwith by written
notice to the others if:
8.2.1 the other party convenes a meeting of its creditors or if a
proposal is made for a voluntary arrangement (within Part I of
the Insolvency Act 1986) or a proposal for any other composition
or scheme of arrangement with (or assignment for the benefit of)
its creditors or if the other party is unable to pay its debts
(within the meaning of section 123 of the Insolvency Act 1986)
or if a trustee, receiver, administrative receiver or similar
officer is appointed in respect of all or any part of the
business or assets of that other party or if a petition is
presented (and not discharged within 30 days) or a meeting is
convened for the purpose of considering a resolution or other
steps are taken (and are not withdrawn or otherwise negated
within 30 days) for the winding up of that other party or for
the making of an administrative order (otherwise than for the
purpose of amalgamation or reconstruction) or if that party
ceases to
284
carry on business as a going concern or ceases to be in a
position to fulfil this Agreement or suffers an event in a
foreign jurisdiction analogous to or comparable with any of the
foregoing; and
8.2.2 there is a change of control (as defined in section 416 of the
Income and Corporation Taxes Act 1988) of the other party other
than by way of an intra-group reorganisation within that party's
group;
8.2.3 if the other party commits a material breach of an obligation
under this Agreement and, if the breach is capable of remedy,
does not remedy the breach within 14 days starting on the
Business Day after receipt of notice from the first party of the
breach.
8.3 The Service Recipient may terminate any Service which is provided to it
under this Agreement on four weeks' written notice to Thales and the
Service Provider.
9 CONSEQUENCES OF TERMINATION
9.1 In the event of termination for any reason whatsoever of this Agreement,
Thales and Nice shall procure that all relevant members of their
respective Groups shall:
9.1.1 immediately cease to make use of the relevant Services;
9.1.2 (at its own cost) promptly to return all documents, manuals,
statements and other such materials, and all copies thereof, of
whatever nature supplied under or in connection with such
parties' performance hereunder and which contains confidential
or proprietary information of the other party. If requested,
each party shall certify that it has fully complied in all
respects with this provision upon the return of any such
documentation or materials;
285
9.1.3 at the request and cost of a former Service Recipient provide
that recipient or its agents with all reasonable assistance
necessary to effect the transfer of the provision of the
relevant Services to another third party supplier; . 9.1.4 for a
reasonable period following termination, allow access to their
premises on reasonable prior notice during normal business hours
for the purpose of removing any or all of the Service
Recipient's data, records and inventory.
9.2 Any termination of this Agreement shall, unless otherwise provided for
herein, be without prejudice to any other rights or remedies to which
either party may be entitled hereunder or at law and shall not affect
any accrued rights or liabilities of either party nor the coming into
force or the continuance in force of any provision hereof which is
expressly or by implication intended to come into force or to continue
in force on or after such termination.
9.3 The following clauses shall continue in force and remain operative
notwithstanding termination of this Agreement for whatever reason: 4, 5,
11, 13, 15, 17 and 18.
10 SUB-CONTRACTING, ASSIGNMENT AND AFFILIATES
Neither party may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the other.
11 CONFIDENTIALITY
11.1 Each of the parties hereto agrees to keep confidential all confidential
information disclosed pursuant to or in the performance of this
Agreement and to use such information solely for the purposes of
carrying out its obligations under this Agreement.
286
11.2 The provisions of clause 11.1 shall not apply to information which is
publicly known or which subsequently becomes publicly known other than
as a result of a breach of this clause 11.
12 ENTIRE AGREEMENT AND VARIATION OF TERMS
12.1 This Agreement, the Sale Agreement and the documents referred to
therein, contains the entire agreement and understanding of the parties
and supersedes all prior agreements, understandings or arrangements
(both oral and written) relating to the subject matter of this
Agreement. In case of conflict with the Sale Agreement and the documents
referred to therein, the provisions of this Agreement shall take
precedence with respect to the subject matter of this Agreement.
12.2 No variation of any of the terms of this Agreement (or of any other
documents referred to herein) shall be effective unless made in writing
and signed by or on behalf of each party.
13 WAIVER; REMEDIES
13.1 Any waiver of a breach of any of the terms of this Agreement or of any
default hereunder shall not be deemed a waiver of any subsequent breach
or default and shall in no way affect the other terms of this Agreement.
13.2 Except as otherwise specifically provided in this Agreement, no failure
to exercise and no delay on the part of any party in exercising any
right, remedy, power or privilege of that party under this Agreement and
no course of dealing between the parties shall be construed or operate
as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
14 SEVERABILITY OF PROVISIONS
287
If any provision of this Agreement is held to be illegal, invalid or
unenforceable in whole or in part in any jurisdiction this Agreement
shall, as to such jurisdiction, continue to be valid as to its other
provisions and the remainder of the affected provisions and the
legality, validity and enforceability of such provision in any other
jurisdiction shall be unaffected .
15 NOTICES
15.1 Any notice or other communication to be given under this Agreement shall
be in writing, shall be deemed to have been duly served on, given to or
made in relation to a party if it is left at the authorised address of
that party or sent by facsimile transmission to the fax machine situated
at such address specified below and shall if:
15.1.1 personally delivered, be deemed to have been received at the
time of delivery; or
15.1.2 posted to an inland address in the United Kingdom, be deemed to
have been received on the second Business Day after the date of
posting and if posted to an overseas address, be deemed to have
been received on the fifth Business Day after the date of
posting; or
15.1.3 sent by facsimile transmission, be deemed to have been received
upon receipt by the sender of a facsimile transmission report
(or other appropriate evidence) that the facsimile has been
transmitted to the addressee;
Provided that where delivery or transmission occurs after 6.00 pm on a
Business Day or at any time on a day which is not a Business Day,
receipt shall be deemed to occur at 9.00 am on the next following
Business Day.
288
15.2 For the purposes of this clause the authorised address of each party
shall be the address set out below (including the details of the
facsimile number and person for whose attention notice of communication
is to be addressed) or such other address (and details) as that party
may notify to the other in writing from time to time in accordance with
the requirements of this clause:
15.2.1 Thales:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇
Facsimile No: 00331 53 77 8263
Attention: Pierre Charreton, Trade Group General Counsel
Nice:
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇
Facsimile No: 001 927 9775 3520
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
16 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original, but all of which
when taken together shall constitute a single instrument.
17 DISPUTE RESOLUTION
289
17.1 Any question or difference of opinion which may arise between the
parties concerning any aspect of the Services shall be referred in the
first instance to senior management of the parties in dispute, who shall
use their reasonable efforts to resolve the dispute.
17.2 In the event that a dispute cannot be resolved by agreement of the
parties within 15 days, the parties shall refer the dispute to an expert
to be agreed between the parties or, in default of agreement, to be
appointed upon the application of any party by the President for the
time being of the Law Society, such expert to act only as an expert and
not as an arbitrator. Such person shall be instructed to reach his
decision as soon as reasonably practicable. The decision of the expert
shall (in the absence of fraud or manifest error) be final and binding
on the parties. The fees or costs of such an expert and his appointment
shall be borne by the parties equally, unless such expert shall decide
one party has acted unreasonably, in which case he shall have discretion
as to costs.
18 GOVERNING LAW AND JURISDICTION
18.1 This Agreement shall be governed by, construed and interpreted in
accordance with English law.
18.2 Subject to the provisions of clause 17, the courts of England shall have
exclusive jurisdiction to settle any claim, dispute or matter of
difference which may arise out of or in connection with this Agreement
(including, without limitation, claims for set-off or counterclaim) or
the legal relationships established by this Agreement.
19 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person who is not a party to this Agreement shall have any rights
under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any
term of this Agreement.
290
The parties have shown their acceptance of the terms of this Agreement by
executing it at the end of the Schedules.
291
SCHEDULE 1
SERVICES
SERVICE 1
Service Provider: Thales GeoSolutions (Australasia) Limited
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the
Service Commencement Date
Service Premium: Nil
Service: Provision of office space and facilities at
▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (the "Premises")
Service Provider shall permit the T
▇▇▇▇▇▇▇▇▇▇ and J Prince to have access to
and use of the Premises on the same basis as
such access and use has been provided by the
Service Provider in the Prior Period.
SERVICE 2
Service Provider: Thales e-Security (Asia) Limited
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the
Service Commencement Date
Service Premium: 7%
Service: Provision of office space and facilities at
▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇, ▇▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, 199
Des Voeux Road, Central Hong Kong, PRC (the
"Premises")
Service Provider shall permit the ▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇ (the "HK Employees") to have
access to and use of the Premises on the
same basis as such access and use has been
provided by the Service Provider in the
Prior Period.
292
SERVICE 3
Service Provider: Thales e-Security (Asia) Limited
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the
Service Commencement Date
Service Premium: 7%
Service: Provision of residential apartment for the
use of T ▇▇▇▇▇▇▇ (the "Premises").
Service Provider shall permit T ▇▇▇▇▇▇▇ to
continue to occupy the the Premises on the
same basis as such occupation has been
provided in the Prior Period.
SERVICE 4
Service Provider: Thales e-Security (Asia) Limited
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the
Service Commencement Date
Service Premium: 7%
Service: Secondment of the HK Employees.
Service Provider shall make the services of
the HK Employees available to the Service
Recipient on the same basis as those
services have been provided in the Prior
Period and subject always to the overriding
provisions of Schedule 3.
SERVICE 5
Service Provider: Thales GeoSolutions Netherlands BV
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the Service
Commencement Date.
293
Service Premium 5%
Service: Administration and payment of payroll in
respect of C Van Gaalen on the same basis as
such services have been provided to TCSL in
the Prior Period.
SERVICE 6
Service Provider: Thales e-Security (Asia) Limited
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the Service
Commencement Date
Service Premium 5%
Service: Administration and payment of payroll in
respect of T ▇▇▇▇▇▇▇, A ▇▇▇▇ and J ▇▇▇▇▇ on
the same basis as such services have been
provided to TCSL in the Prior Period.
SERVICE 7
Service Provider: Thales Contact Solutions Limited
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the Service
Commencement Date
Service Premium: 7%
Service: Secondment of Hassan ▇▇▇▇▇▇, ▇▇▇▇▇▇ Mathath
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (the "ME Employees").
Service Provider shall make the services of
the ME Employees available to the Service
Recipient on the same basis as those
services have been available to the Business
in the Prior Period and subject always to
the overriding provisions of Schedule 3.
SERVICE 8
Service Provider: Thales Contact Solutions Limited
Service Recipient: Nice CTI Systems UK Limited
294
Service Termination Date: The date six months following the Service
Commencement Date
Service Premium: 7%
Service: The maintenance of the existing arrangement
for the use of the UAE Office by the ME
Employees.
"UAE Office" means the office space at Al
Makhari Building, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇, ▇▇▇, the use of which is
governed by an arrangement at Disclosure
Document Q&R 76.
SERVICE 9
Service Provider: Thales GeoSolutions (Australia) (Pty)
Limited
Service Recipient: Nice CTI Systems UK Limited
Service Termination Date: The date six months following the Service
Commencement Date.
Service Premium: 5%
Service: Administration and payment of payroll in
respect of T ▇▇▇▇▇▇▇▇▇▇ and J Prince on the
same basis as such services have been
provided to TCSL in the Prior Period.
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SCHEDULE 2
VEHICLES
THOSE VEHICLES LISTED AT DISCLOSURE DOCUMENT UK.A.47.
296
SCHEDULE 3
TERMS AND CONDITIONS RELATING TO SECONDMENTS
1 DURATION
Subject to the terms of this Agreement, the Secondment will continue
until the Service Termination Date.
2 SECONDMENT SERVICES
During the Secondment, the Service Recipient will have the sole right to
supervise and control the Employee. The Service Provider will have no
knowledge of and therefore no responsibility for, and no liability with
respect to the day to day activities of the Employee.
3 CONTINUING EMPLOYMENT BY SERVICE PROVIDER
3.1 During the Secondment, the Employee will remain employed by the Service
Provider on the terms and conditions of employment subsisting as at the
Completion Date (the "Employment Contract"). The Service Provider will
second the Employee to the Service Recipient on the terms of the
Employment Contract.
3.2 Nothing in this Agreement is intended to create a relationship of
employer and employee between the Service Recipient and the Employee.
4 DUTIES OF SERVICE PROVIDER
4.1 The Service Provider will pay the Employee's salary and provide all
contractual and other benefits to which the Employee is entitled under
his Employment Contract.
297
4.2 The Service Provider will be responsible for making appropriate tax and
other deductions from the Employee's remuneration, as may be required
under applicable law. The Service Provider agrees to indemnify and keep
indemnified the Service Recipient in respect of any claim that may be
made by the relevant authorities against the Service Recipient for
income tax or other deductions as may be required under applicable law
in respect of the Employee.
5 DUTIES OF SERVICE RECIPIENT
5.1 The Service Recipient will maintain a record of the Employee's sickness
and holiday absence and will notify the Service Provider of such absence
and provide a copy of such record to the Service Provider on a monthly
basis on or around the first day of each month.
5.2 The Service Recipient will provide the Service Provider with such
information as it reasonably requires to comply with all applicable law
relating to the Secondment.
6 TERMINATION OF EMPLOYMENT
6.1 If the Employee's employment with the Service Provider ends for any
reason, the Secondment will automatically terminate. The Service
Provider will not be required to second a replacement employee unless
requested to do so by the Service Recipient, and then only on terms to
be agreed between the parties.
6.2 The Service Recipient will indemnify and keep the Service Provider
indemnified against any costs and expenses including, without
limitation, statutory or contractual redundancy costs, incurred in
relation to the termination of employment of the Employee where such
termination of employment is by reason of redundancy on termination of
the Employee's Secondment.
298
7 PROLONGED ABSENCE
If the Employee is away from work for any reason for more than four
consecutive weeks, the Service Recipient may terminate the Secondment on
four weeks prior written notice. The Service Provider will not be
required to second a replacement for any period of absence of the
Employee unless requested to do so by the Service Recipient and then
only on terms to be agreed between the parties.
8 TERMINATION
8.1 Either party may terminate the Secondment immediately by giving written
notice to the other if:
8.1.1 the Employee does or omits to do anything (whether in connection
with the Secondment or not) which would allow the Service
Provider to terminate his employment summarily; or
8.1.2 the Service Provider dismisses the Employee, the Employee
voluntarily resigns or the Employee's employment with the
Service Provider ends for any reason; or
8.1.3 the Employee acts in a way which is harmful in the reasonable
opinion of the Service Recipient to the Service Recipient's
business (whether in connection with the Secondment or not); or
8.1.4 the Employee is guilty of dishonesty or is convicted of an
offence (whether in connection with the Secondment or not).
8.2 If either party commits any material breach of their obligations under
this Agreement the other may terminate this Agreement and the Secondment
with immediate effect by written notice.
299
8.3 The Service Recipient shall be entitled to terminate the Secondment on
four weeks prior written notice to the Serviced Provider if the Service
Provider changes any of the Employee's terms and conditions such that
the fees payable under clause 3 in respect of the Secondment are
increased by more than 10%.
9 CONFIDENTIALITY
9.1 The Service Provider will not and will procure that the Employee will
not use or disclose to any person including, without limitation, the
Service Provider itself, any trade secrets or confidential information
of the Service Recipient which the Employee receives or obtains during
the Secondment. This restriction will continue after this Agreement
ends.
9.2 The Service Provider will procure that, at the end of the Secondment or
earlier if requested by the Service Recipient, the Employee returns to
the Service Recipient all documents and other materials belonging or
relating to the Service Recipient.
10 DISCIPLINARY MATTERS
If any disciplinary or grievance matter arises in relation to the
Employee during the Secondment, the Service Recipient will notify the
Service Provider as soon as possible. The Service Provider will deal
with the matter in accordance with its disciplinary or grievance
procedure. The Service Recipient will provide whatever assistance is
reasonably necessary.
11 PROPERTY DAMAGE
The Service Recipient agrees to assume responsibility for and releases
and agrees to defend and indemnify the Service Provider and its
affiliates from and against any and all claims in respect of any damage
to or loss of property
300
owned by the Service Recipient, its affiliates or partners or their
contractors and which is caused by the Employee whilst on Secondment.
12 DAMAGES
In no event shall the Service Provider be liable, and the Service
Recipient assumes responsibility, for any special, indirect or
consequential damages, loss of profit, loss of revenue, loss of
contract, loss of opportunity, loss of use of the facilities or other
property, or business interruption or costs resulting from non-operation
or increased expense of operation or maintenance, or costs of finance
and any other similar types of losses suffered or incurred by the
Service Recipient, howsoever caused to the extent that such losses are
caused as a result of the actions of the Employee whilst on Secondment
in the course of performing the Secondment Services.
301
Signed by...................................... )
for and on behalf of )
[THALES] )
Signed by...................................... )
for and on behalf of )
[NICE] )
302
SCHEDULE 13
PRISM EARN-OUT CONSIDERATION TABLE
The Earn Out Consideration referred to in Clause 7.8 shall be calculated in
accordance with the table set out below:
-------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
PRISM EARN-OUT CONSIDERATION TABLE (THE AMOUNTS SET FORTH BELOW ARE STAND ALONE FOR EACH
RESPECTIVE YEAR)
-------------------------------------------------------------------------------------------------
ACTUAL PRISM REVENUE IN CALENDAR YEAR 2002 EARN OUT 2003 EARN OUT 2004 EARN OUT
2002, 2003 OR 2004 (EURO) (US$) (US$) (US$)
------------------------------------------ ----------------- ----------------- ------------------
Less than EUR6 million 0 0 0
------------------------------------------ ----------------- ----------------- ------------------
EUR6 million - under EUR7 million $1 million 0 0
------------------------------------------ ----------------- ----------------- ------------------
EUR7 million - under EUR8 million $2 million 0 0
------------------------------------------ ----------------- ----------------- ------------------
EUR8 million - under EUR9 million $3 million 0 0
------------------------------------------ ----------------- ----------------- ------------------
EUR9 million - under EUR10 million $4 million 0 0
------------------------------------------ ----------------- ----------------- ------------------
EUR10 million - under EUR12 million $5 million 0 0
------------------------------------------ ----------------- ----------------- ------------------
EUR12 million - under EUR14 million $5 million $1.5 million $1.5 million
------------------------------------------ ----------------- ----------------- ------------------
EUR14 million - under EUR16 million $5 million $3 million $3 million
------------------------------------------ ----------------- ----------------- ------------------
EUR16 million - under EUR18 million $5 million $4.5 million $4.5 million
------------------------------------------ ----------------- ----------------- ------------------
EUR18 million - under EUR20 million $5 million $5 million $5 million
------------------------------------------ ----------------- ----------------- ------------------
EUR20 million and above $5 million $7.5 million $7.5 million
------------------------------------------ ----------------- ----------------- ------------------
303
SCHEDULE 14
IPR AGREEMENTS
304
DATED 2002
--------------------------------------------------------------------------------
THALES CONTACT SOLUTIONS LIMITED
THALES ELECTRONICS PLC
--------------------------------------------------------------------------------
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS
--------------------------------------------------------------------------------
305
THIS AGREEMENT is made on 2002
BETWEEN
(1) THALES CONTACT SOLUTIONS LIMITED (registered number 560700) whose
registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the
"Assignor"); and
(2) THALES ELECTRONICS PLC (registered number 497098) whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the
"Assignee").
BACKGROUND
(A) The Assignor is the proprietor of the Assignor IPR (as defined below).
(B) Thales SA has granted patent licences over all group patents, including
the Patent Application, to Alcatel and Thomson Multimedia ("Cross
Patents Licence Agreements").
(C) The Assignor wishes to assign to the Assignee and the Assignee wishes to
acquire the Assignor IPR on the terms and conditions set out below.
1 DEFINITIONS
1.1 In this Agreement the following expressions have the following meanings
unless inconsistent with the context:
"ASSIGNOR IPR" All Intellectual Property Rights owned by
Assignor including but not limited to the Trade
Marks the Patent Application and the copyright
and any design rights in the Copyright Works but
excluding the Excluded Trade Marks.
"COPYRIGHT WORKS" The works identified in SCHEDULE 3.
"DOMAIN NAME" The domain name identified in Part 3 of Schedule 1
"EXCLUDED TRADE MARKS" means the trade marks, service marks, brand
names, certification marks, trade dress,
business names and
306
other indications of origin and any Internet
protocol addresses and networks, including
domain names, e-mail addresses, and world wide
web (www) and http addresses, network names,
network addresses, and services which subsist of
or include "Thales", "Thales Contract
Solutions", Racal", "Thomson" or any confusingly
similar work or any Thales, Racal or Thomson
specific logos.
307
"INTELLECTUAL PROPERTY RIGHTS" All intellectual property in any jurisdiction,
whether registered, pending applications or
unregistered, including without limitation: (a)
all trade marks, service marks, brand names,
certification marks, trade dress, business names
and other indications of origin; (b) Patents;
(c) trade secrets, know-how and other
confidential or non-public business information,
including ideas, manufacturing and production
processes and techniques, research and
development information, drawings,
specifications, designs, source codes plans,
proposals and technical data, business and
marketing plans, market surveys, market know-how
and customer lists and information; (d) writings
and other copyright works, including computer
programs, source code, object code and
documentation (whether or not released), design
right, architecture, database rights, and all
copyrights and any non-registered copyrights to
any of the foregoing; (e) integrated circuit
topographies and mask works; (f) Internet
protocol addresses and networks, including
domain names, e-mail addresses, world wide web
(www) and http addresses, network names, network
addresses and services; (g) privacy and
publicity rights; and (h) all other intellectual
property rights of a similar nature or having
equivalent or similar effect to these which may
subsist anywhere in the world;
"PATENT APPLICATION" the application for the grant of a patent
particulars of which are contained in SCHEDULE 2
308
"PATENTS" any and all patents, patent applications
(including letters patent, industrial designs,
and inventor's certificates), design
registrations, invention disclosures, and
applications to register industrial designs, and
any and all rights to any of the foregoing
anywhere in the world, including any
provisionals, substitutions, extensions,
supplementary protection certificates,
re-examinations, reissues, renewals, divisions,
continuations in part (or in whole), continued
prosecution applications, requests for continued
examination, and other similar filings or
notices provided for under the laws of any
country;
"REGISTERED TRADE MARKS" the registered trade marks particulars of which
are contained in PART 1 of SCHEDULE 1
"TRADE ▇▇▇▇ APPLICATIONS" The trade ▇▇▇▇ applications identified in PART
2 of SCHEDULE 1.
"TRADE MARKS" the Registered Trade Marks and the trade marks
the subject of the Trade ▇▇▇▇ Applications and
the Domain Name means the Software Licence and
Service Agreement dated 1st
"WORDNET 3 LICENCE" March 2002 between TCSL and Origin Data
Realisation Limited;
2 CONSIDERATION
In consideration of the Assignor entering into this Agreement, the
Assignee shall pay to the Assignor upon signature of this Agreement the
sum of US$4,000,000 (four million US dollars) such sum to be left
outstanding on inter-company loan account.
3 TRADE MARKS
309
3.1 The Assignor assigns to the Assignee absolutely with full title
guarantee the Trade Marks including the goodwill in the Trade Marks and
the full and exclusive benefit of each of them, including all statutory
and common law rights and the right to ▇▇▇ for past infringements and to
retain any damages obtained as a result of such action.
3.2 The Assignor agrees at the expense of the Assignee to execute such
further documents, and take such actions and do such things, as may be
reasonably requested by the Assignee to give full effect to the terms of
this Agreement and to secure the full right, title and interest of the
Assignee in the Trade Marks.
4 PATENT APPLICATION
4.1 The Assignor assigns to the Assignee absolutely with full title
guarantee:
4.1.1 the Assignor's right to apply for, prosecute and be granted the
patent or obtain similar protection throughout the world for the
invention(s) claimed in the Patent Application and any remaining
right to claim priority therefrom (including under the Paris
Convention for applications in countries or territories outside
the UK), any remaining right to file continuations,
continuations in part, divisionals or seek re-examination or
re-issue, so that the grant of any patent or similar protection
shall be in the name of and vest in the Assignee;
4.1.2 all the rights of the Assignor to, and its title to and interest
in, the Patent Application;
4.1.3 all and any other rights and powers arising or accruing from the
Patent Application, including without limitation the right to
▇▇▇ for damages and to have the benefit of any other remedies
for infringement of any patents subsisting under the Patent
Application occurring before the date of this Agreement.
subject to the Cross Patents Licence Agreements.
4.2 The Assignor agrees at the expense of the Assignee to execute such
further documents, and take such actions and do such things as may be
reasonably requested by the Assignee, to give full effect to the terms
of this Agreement, and to secure the full right title and interest of
the Assignee in the Patent Application.
310
5 COPYRIGHT
5.1 The Assignor assigns to the Assignee absolutely with full title
guarantee:
5.1.1 any and all copyright and design right which it owns, if any, in
the Copyright Works;
5.1.2 all rights and powers arising or accrued from the Copyright
Works, including without limitation the right to ▇▇▇ for damages
and other remedies and to have the benefit of any remedy
obtained on any supposed infringement of such Copyright Works
before the date of this Agreement; and
5.1.3 the right to apply for copyright and design protection in any
part of the world in relation to all or any of the Copyright
Works, including without limitation the right to apply for
renewals and extensions.
5.2 The Assignor agrees at the expense of the Assignee to execute such
further documents and take such actions and do such things as may be
reasonably requested by the Assignee to give full effect to the terms of
this Agreement (including without limitation assisting the Assignee in
the resolution of any question concerning the Copyright Works) and to
secure the full right, title and interest of the Assignee in the
Copyright Works.
6 OTHER INTELLECTUAL PROPERTY RIGHTS
6.1 The Assignor assigns with full title guarantee all Assignor IPR (other
than the Trade Marks, Patent Application and the copyright and design
right in the Copyright Works which are dealt with above) to the Assignee
absolutely.
6.2 The Assignor agrees at the expense of the Assignee to execute such
further documents and take such actions and do such things as may be
reasonably requested by the Assignee to give full effect to the terms of
this Agreement and to secure the full right, title and interest of the
Assignee to the Assignor IPR set out in clause 6.1 above.
7 WORDNET 3 SOFTWARE
7.1 The Assignor assigns to the Assignee all rights to which the Assignor is
entitled under the Wordnet 3 Licence, subject to the obligations under
the Wordnet 3 Licence.
311
7.2 The Assignor agrees that it shall do or procure the doing of all such
acts and things and shall execute or procure the execution of all such
documents as may be required to vest in the Assignee all rights granted
under this clause 7 in accordance with this Agreement and otherwise to
comply with its terms.
7.3. The parties hereto agree to use reasonable endeavours to enter into a
deed of novation with Origin Data Realisation Limited to novate the
Wordnet 3 Licence in favour of the Assignee or any subsequent Assignee
within 28 days of this Agreement.
8 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which so executed will be an original, but together will constitute one
and the same instrument.
9 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The parties to this Agreement do not intend that any of its terms will
be enforceable by virtue of the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇ by any person not a party to it.
10 GOVERNING LAW AND JURISDICTION
10.1 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Agreement or of any term of this Agreement
will be governed by the law of England and Wales.
10.2 The courts of England and Wales will have non-exclusive jurisdiction to
settle any disputes that may arise out of or in connection with this
Agreement. The parties irrevocably agree to submit to that jurisdiction.
AS WITNESS the hands of the parties or their duly authorised agents for and on
behalf of the parties on the date stated at the beginning of this Agreement
Executed on behalf of )
THALES CONTACT SOLUTIONS )
LIMITED )
ASSIGNOR )
in the presence of: )
Director
Director/Secretary
312
Executed on behalf of )
THALES ELECTRONICS PLS )
ASSIGNOR )
in the presence of: )
Director
Director/Secretary
313
SCHEDULE 1
PART 1 - THE REGISTERED TRADE MARKS
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
Trademark COUNTRY APPLICATION APPLICATION REGISTRATION RENEWAL
DATE
NUMBER NUMBER DATE
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
A-MUX LOGO UK 2059568 5/3/96 2059568 5/3/06
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 23/5/91 155604 11/3/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
UK 1452564 9/1/91 1452564 9/1/08
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
GEOSTORE UK 1007802 9/3/73 1007802 9/3/08
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 31/8/00 1832823 31/8/10
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 21/5/98 830786 21/5/08
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
USA 75/508202 25/6/98 2476967 14/8/11
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 7/11/90 1745086 5/1/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
UK 1444906 22/10/90 1444906 22/10/07
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 14/9/99 1307636 14/9/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
STOREHOUSE UK 1140237 13/9/80 1140237 13/9/11
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
STOREMED UK 1176989 18/6/82 1176989 18/6/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
STORENET UK 1049140 7/7/75 1049140 7/7/06
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
STOREPLEX France 92431479 24/8/92 92431479 24/8/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
Germany R52808/9 WZ 21/8/92 2051506 21/8/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
USA 75/662730 18/3/99 2378956 22/8/10
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
UK 1509634 14/8/92 1509634 14/8/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 18/11/99 1387570 18/11/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 9/4/99 1133156 9/4/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
WORDNET France 9556446 24/3/95 9556446 24/3/05
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
Germany 39512614 22/3/95 39512614 22/3/05
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
314
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
USA 74/649882 20/3/95 2093445 2/9/07
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
UK 2013801 10/3/95 2013801 10/3/05
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
WORDSAFE Denmark 3542/91 2/10/92 9057/92 2/10/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 23/5/91 153406 26/11/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
▇▇▇ ▇▇▇▇▇▇ 19/10/90 1745083 5/1/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
UK 1439866 7/9/90 1439866 7/9/07
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
PART 2 - THE TRADE ▇▇▇▇ APPLICATIONS
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
Trademark COUNTRY APPLICATION APPLICATION REGISTRATION RENEWAL
DATE
NUMBER NUMBER DATE
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
BIG PICTURE TECHNOLOGY CTM 2052991 24/1/01
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
USA 76/288370 20/7/01
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
INVESTIGATOR USA 76/149047 18/10/00
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
RENAISSANCE USA 75/837065 1/11/99
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
TIENNA USA 75/924305 22/02/00
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
TRUNKNET USA 75/698405 5/5/99
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
PART 3 - DOMAIN NAME
315
SCHEDULE 2
THE PATENT APPLICATION
------------------ ------------------ ----------------- -------------- --------------- -------------- ---------------
PATENT TITLE REGISTERED OWNER APPLICATION APPLICATION PUBLICATION PUBLICATION INVENTOR(S)
NUMBER DATE NUMBER DATE
------------------ ------------------ ----------------- -------------- --------------- -------------- ---------------
VOICE ACTIVITY Thales Contact UK 9916430.3 13/7/99 GB 2352948 7/2/01 ▇▇▇▇ ▇▇▇▇▇▇
MONITOR Solutions ▇▇▇▇▇
------------------ ------------------ ----------------- -------------- --------------- -------------- ---------------
316
SCHEDULE 3
THE COPYRIGHT WORKS
COPYRIGHT & DESIGN RIGHTS IN SOFTWARE ITEMS REPRESENTED IN DESIGN DOCUMENTATION
AND SOURCE CODE LISTINGS.
- ▇▇▇▇▇ Management Software
- Wordnet Series 1 operating software
- Wordnet Series 2 operating software (developed by Origin Data Realisation, IPR
owned by TCSL)
- Tienna operating software (various releases leading to current release 7.0)
- CMSU Software (various releases leading to current release 7.0)
- RTT Replay to Turret Software (various releases leading to current release
7.0)
- RSMA Renaissance System Management Application (various releases leading to
current release 7.0)
- Replay Server software (various releases leading to current release 7.0)
- ▇▇▇▇ Search and Replay application
- ▇▇▇▇ ▇▇ Search and Replay application
- RECO Radar and Voice Scenario Reconstruction Replay application
- Investigator Search and Replay application (various releases leading to
current release 7.0 but only up to 4.1 in general release)
- Investigator RX (formerly Radio Replay) Scenario Reconstruction Replay
application (various releases leading to current release 2.0)
- AQM Agent Quality Management application (various releases leading to current
release 3.0 but only up to 2.2 in general release)
- Call Confirm & Last Message Replay - Last message Replay applications -both
release 1.0
- MCC Media Control Centre application release 1.0
- Wordnet Vendor Object recorder control software for Prism Integration
(developed by Cliffstone, IPR owned by TCSL)
- Renaissance Dashboard System Management application
- QA Recorder screen and voice recording application (developed by Cliffstone,
IPR owned by TCSL)
317
- Smart Logger application (incomplete - developed by Cliffstone, IPR owned by
TCSL)
- RecorderLink recorder integration software (various releases leading to
current release 3.5)
- Web Replay Application (not released)
- Switch Decoder signal processing software (lengthy list of decoders for
various telephone switches)
- Datax Converter software
- Reecoute Immediate software (version 1.9)
- Interface Servieur TCS software (version 1)
- Convertisseur Wave TCS software (version 1)
- Reecoute Immediate Software (Pocket PC) (version 1)
- Reecoute Immediate TCS PC software (version 1)
- ▇▇▇▇ ▇▇▇▇▇▇▇ 15 software (version 1)
- ▇▇▇▇ ▇▇▇▇▇▇▇ 15 software (version 2)
- Superviseur software
DATABASE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION
- Tracker database design rights (MicroSoft JET technology)
- Tienna database design rights (MicroSoft SQL Server technology)
- CMSU database design rights (MicroSoft SQL Server technology)
ARCHITECTURE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION
- Renaissance Architecture (various releases up to current release 7.0)
318
DATED 2002
--------------------------------------------------------------------------------
THALES ELECTRONICS PLC
THALES CONTACT SOLUTIONS LIMITED
--------------------------------------------------------------------------------
LICENCE
--------------------------------------------------------------------------------
319
THIS AGREEMENT is made on 2002
BETWEEN
(1) THALES ELECTRONICS PLC (Registered No 497098) whose registered office is
at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("the Licensor")
(2) THALES CONTACT SOLUTIONS LIMITED (Registered No 560700) whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("the Licensee")
1 DEFINITIONS
In this Agreement the following expressions have the following meanings
unless inconsistent with the context:
"THE COMMENCEMENT DATE" The date of this Agreement
"THE DOMAIN NAME" The domain name identified in Part 3 of Schedule 1
"COPYRIGHT WORKS" The works identified in SCHEDULE 3.
"INTELLECTUAL PROPERTY RIGHTS" All intellectual property in any jurisdiction, whether registered,
pending applications or unregistered, including without limitation: (a)
all trade marks, service marks, brand names, certification marks, trade
dress, business names and other indications of origin; (b) Patents; (c)
trade secrets, know-how and other confidential or non-public business
information, including ideas, manufacturing and production processes and
techniques, research and development information, drawings,
specifications, designs, source codes plans, proposals and technical
data, business and marketing plans, market surveys, market know-how and
customer lists and information; (d) writings and other copyright works,
Including computer programs, source code, object code and documentation
(whether or not
320
released), design right, architecture, database rights, and all
copyrights, and any non-registered. Copyrights to any of the foregoing;
(e) integrated circuit topographies and mask works; (f) Internet
protocol addresses and networks, including domain names, e-mail
addresses, world wide web (www) and http addresses, network names,
network addresses and services; (g) privacy and publicity rights; and
(h) all other intellectual property rights of a similar nature or having
equivalent or similar effect to these which may subsist anywhere in the
world
"THALES IPR ASSIGNMENT" The agreement executed of even date between Thales Contact Solutions
Limited (as assignor) and Thales Electronics Plc (as assignee).
"LICENSEE'S GROUP" Means the Licensee and any holding company of the Licensee and any
subsidiaries of such holding company, holding and subsidiary having the
meanings given in the Companies ▇▇▇ ▇▇▇▇ of the United Kingdom.
"LICENSOR IPR" All Intellectual Property Rights acquired by the Licensor under the
Thales IPR Assignment including but not limited to the Trade Marks, the
Patents, the Patent Applications and the copyright and any design rights
in the Copyright Works, other than the assignment of the rights under
the Wordnet 3 Licence.
"PATENTS" Any and all patents, patent applications (including letters patent,
industrial designs, and inventor's certificates), design registrations,
invention disclosures, and applications to register industrial designs,
and any and all rights to any of the foregoing anywhere in the world,
including any provisionals, substitutions,
321
extensions, supplementary protection certificates, re-examinations,
reissues, renewals, divisions, continuations in part (or in whole),
continued prosecution applications, requests for continued examination,
and other similar filings or notices provided for under the laws of any
country;
"PATENT APPLICATION" The application for the grant of a patent particulars of which are
contained in SCHEDULE 2
"REGISTERED TRADE MARKS" The trade marks particulars of which are contained in PART 1 of
SCHEDULE 1
"TRADE MARKS" The Registered Trade Marks and the trade marks the subject of
the Trade ▇▇▇▇ Applications and the Domain Names "TRADE ▇▇▇▇
APPLICATIONS" The trade ▇▇▇▇ applications, particulars of which are
contained in Part 2 of Schedule 1
"WORDNET 3 LICENCE" Means the Software Licence and Service Agreement dated 1st March 2002
between the Licensee and Origin Data Realisation Limited subsequently
assigned to Thales Electronics plc under the Thales IPR Assignment.
2 PERMISSION TO USE
2.1 The Licensor grants to the Licensee during the Term of this Agreement a
licence to use the Licensor IPR with the right to sub-license for the
Term of such Licensor IPR to members of the Licensee's Group.
2.2 The Licensor grants to the Licensee during the Term of this Agreement a
sub-licence of the Wordnet 3 Licence so far as the Licensor is permitted
to do so under the terms of the Wordnet 3 Licence.
322
3 CONSIDERATION
The Licensee shall pay the Licensor the sum of US$32,050 per week in
arrears during the Term.
4 OWNERSHIP OF THE LICENSOR IPR
4.1 The Licensee acknowledges that the Licensor IPR are and will remain the
property of the Licensor, and the Licensee shall not acquire any title
or interest in the Licensor IPR or goodwill as a result of the
Licensee's use of them.
4.2 The Licensee shall not do or permit to be done, nor omit to do in
connection with its use of the Licensor IPR, any act or thing which
would or might jeopardise or invalidate any registration of the Licensor
IPR or which might prejudice the right or title of the Licensor to any
of the Licensor IPR.
5 TERM AND TERMINATION
5.1 This Agreement comes into effect on the Commencement Date and unless
terminated earlier under the provisions of this Agreement remains in
force until termination by either party giving to the other not less
than three months' prior written notice ("▇▇▇ ▇▇▇▇"). The Licence in
relation to each Licensor IPR shall only remain in force so long as each
Licensor IPR subsists.
5.2 Either party may terminate this Agreement by notice in writing to the
other if the other is in material breach of this Agreement and shall
have failed (where the breach is capable of remedy) to remedy the breach
within 30 days of the receipt of a request in writing from the party not
in breach to remedy the breach, such request setting out the breach and
indicating that failure to remedy the breach may result in termination
of this Agreement.
5.3 In addition to the powers of termination contained elsewhere in this
Agreement the Licensor shall be entitled to terminate this Agreement
immediately by notice in writing to the Licensee on any of the following
grounds:
5.3.1 the Licensee becomes the subject of voluntary arrangement under
section 1 Insolvency ▇▇▇ ▇▇▇▇;
5.3.2 the Licensee is unable to pay its debts within the meaning of
section 123 Insolvency ▇▇▇ ▇▇▇▇;
323
5.3.3 the Licensee has a receiver, manager, administrator or
administrative receiver appointed over all or any parts of its
undertaking, assets or income;
5.3.4 the Licensee has passed a resolution for its winding-up;
5.3.5 the Licensee has a petition presented to any court for its
winding-up or for an administration order; or
5.3.6 an analogous event happens in any other jurisdiction.
6 CONSEQUENCES OF TERMINATION
The termination of this Agreement howsoever caused is without prejudice
to the rights, duties and liabilities of either party accrued prior to
termination. The clauses of this Agreement which expressly or impliedly
have effect after termination will continue to be enforceable
notwithstanding termination.
7 ASSIGNMENT
The Licensee may not assign the benefit or delegate the burden of this
Agreement without the prior written consent of the Licensor which shall
not be unreasonably withheld or delayed. The Licensor may assign this
Agreement on disposing of the Licensor IPR without the consent of the
Licensee.
8 GOVERNING LAW AND JURISDICTION
8.1 This Agreement is governed by, and shall be construed in accordance with
English law.
8.2 The courts of England and Wales shall have non-exclusive jurisdiction to
settle any disputes which may arise out of or in connection with this
Agreement. The parties agree to submit to such jurisdiction.
9 COUNTERPARTS
This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, each of which so executed and
delivered shall constitute an original, but all the counterparts shall
together constitute one and the same instrument.
324
AS WITNESS the hands of the parties or their duly authorised agents for and on
behalf of the parties on the date stated at the beginning of this Agreement
Executed on behalf of )
THALES ELECTRONICS PLC )
LICENSOR )
in the presence of: )
Director
Director/Secretary
Executed on behalf of )
THALES CONTACT SOLUTIONS )
LIMITED )
LICENSOR )
in the presence of: )
Director
Director/Secretary
325
SCHEDULE 1
PART 1 - THE REGISTERED TRADE MARKS
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
Trademark COUNTRY APPLICATION APPLICATION REGISTRATION RENEWAL
DATE
NUMBER NUMBER DATE
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
A-MUX LOGO UK 2059568 5/3/96 2059568 5/3/06
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 23/5/91 155604 11/3/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
UK 1452564 9/1/91 1452564 9/1/08
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
GEOSTORE UK 1007802 9/3/73 1007802 9/3/08
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 31/8/00 1832823 31/8/10
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 21/5/98 830786 21/5/08
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
USA 75/508202 25/6/98 2476967 14/8/11
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 7/11/90 1745086 5/1/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
UK 1444906 22/10/90 1444906 22/10/07
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 14/9/99 1307636 14/9/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
STOREHOUSE UK 1140237 13/9/80 1140237 13/9/11
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
STOREMED UK 1176989 18/6/82 1176989 18/6/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
STORENET UK 1049140 7/7/75 1049140 7/7/06
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
STOREPLEX France 92431479 24/8/92 92431479 24/8/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
Germany R52808/9 WZ 21/8/92 2051506 21/8/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
USA 75/662730 18/3/99 2378956 22/8/10
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
UK 1509634 14/8/92 1509634 14/8/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 18/11/99 1387570 18/11/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 9/4/99 1133156 9/4/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
WORDNET France 9556446 24/3/95 9556446 24/3/05
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
Germany 39512614 22/3/95 39512614 22/3/05
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
USA 74/649882 20/3/95 2093445 2/9/07
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
UK 2013801 10/3/95 2013801 10/3/05
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
WORDSAFE Denmark 3542/91 2/10/92 9057/92 2/10/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 23/5/91 153406 26/11/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
▇▇▇ ▇▇▇▇▇▇ 19/10/90 1745083 5/1/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
326
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
Trademark COUNTRY APPLICATION APPLICATION REGISTRATION RENEWAL
DATE
NUMBER NUMBER DATE
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
UK 1439866 7/9/90 1439866 7/9/07
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
PART 2 - THE REGISTERED TRADE ▇▇▇▇ APPLICATIONS
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
Trademark COUNTRY APPLICATION APPLICATION DATE REGISTRATION RENEWAL
NUMBER NUMBER DATE
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
BIG PICTURE TECHNOLOGY CTM 2052991 24/1/01
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
USA 76/288370 20/7/01
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
INVESTIGATOR USA 76/149047 18/10/00
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
RENAISSANCE USA 75/837065 1/11/99
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
TIENNA USA 75/924305 22/02/00
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
TRUNKNET USA 75/698405 5/5/99
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
PART 3 - DOMAIN NAME
▇▇▇▇▇▇▇▇▇▇.▇▇▇
327
SCHEDULE 2
THE PATENT APPLICATION
----------------- -------------- ---------------- ----------------- ---------------- ---------------- ---------------
PATENT TITLE REGISTERED APPLICATION APPLICATION DATE PUBLICATION PUBLICATION INVENTOR(S)
OWNER NUMBER NUMBER DATE
----------------- -------------- ---------------- ----------------- ---------------- ---------------- ---------------
VOICE ACTIVITY Thales UK 9916430.3 13/7/99 GB 2352948 7/2/01 ▇▇▇▇ ▇▇▇▇▇▇
MONITOR Contact ▇▇▇▇▇
Solutions
----------------- -------------- ---------------- ----------------- ---------------- ---------------- ---------------
328
SCHEDULE 3
THE COPYRIGHT WORKS
COPYRIGHT & DESIGN RIGHTS IN SOFTWARE ITEMS REPRESENTED IN DESIGN DOCUMENTATION
AND SOURCE CODE LISTINGS.
- ▇▇▇▇▇ Management Software
- Wordnet Series 1 operating software
- Wordnet Series 2 operating software (developed by Origin Data Realisation, IPR
owned by TCSL)
- Tienna operating software (various releases leading to current release 7.0)
- CMSU Software (various releases leading to current release 7.0)
- RTT Replay to Turret Software (various releases leading to current release
7.0)
- RSMA Renaissance System Management Application (various releases leading to
current release 7.0)
- Replay Server software (various releases leading to current release 7.0)
- ▇▇▇▇ Search and Replay application
- ▇▇▇▇ ▇▇ Search and Replay application
- RECO Radar and Voice Scenario Reconstruction Replay application
- Investigator Search and Replay application (various releases leading to
current release 7.0 but only up to 4.1 in general release)
- Investigator RX (formerly Radio Replay) Scenario Reconstruction Replay
application (various releases leading to current release 2.0)
- AQM Agent Quality Management application (various releases leading to current
release 3.0 but only up to 2.2 in general release)
- Call Confirm & Last Message Replay - Last message Replay applications -both
release 1.0
- MCC Media Control Centre application release 1.0
- Wordnet Vendor Object recorder control software for Prism Integration
(developed by Cliffstone, IPR owned by TCSL)
- Renaissance Dashboard System Management application
329
- QA Recorder screen and voice recording application (developed by Cliffstone,
IPR owned by TCSL)
- Smart Logger application (incomplete - developed by Cliffstone, IPR owned by
TCSL)
- RecorderLink recorder integration software (various releases leading to
current release 3.5)
- Web Replay Application (not released)
- Switch Decoder signal processing software (lengthy list of decoders for
various telephone switches)
- Datax Converter software
- Reecoute Immediate software (version 1.9)
- Interface Servieur TCS software (version 1)
- Convertisseur Wave TCS software (version 1)
- Reecoute Immediate Software (Pocket PC) (version 1)
- Reecoute Immediate TCS PC software (version 1)
- ▇▇▇▇ ▇▇▇▇▇▇▇ 15 software (version 1)
- ▇▇▇▇ ▇▇▇▇▇▇▇ 15 software (version 2)
- Superviseur software
DATABASE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION
- Tracker database design rights (MicroSoft JET technology)
- Tienna database design rights (MicroSoft SQL Server technology)
- CMSU database design rights (MicroSoft SQL Server technology)
ARCHITECTURE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION
- Renaissance Architecture (various releases up to current release 7.0)
330
DATED 2002
--------------------------------------------------------------------------------
THALES ELECTRONICS PLC
NIGHT
TRADER SA
--------------------------------------------------------------------------------
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS
--------------------------------------------------------------------------------
331
THIS AGREEMENT is made on 2002
BETWEEN
(1) THALES ELECTRONICS PLC (registered number 560700) whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "Assignor");
and
(2) NIGHT [(registered number )] whose registered office is at (the
"Assignee"); and
(3) THALES SA a French societe anonyme having its registered office at ▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (75008) ("Thales").
BACKGROUND
(A) The Assignor is the proprietor of the Assignor IPR assigned to it and
has rights under the Wordnet 3 Licence (subject to certain obligations)
pursuant to an Agreement dated [ ] with Thales Contact Solutions Limited
attached at Schedule 1 ("the Thales IPR Assignment").
(B) By an Agreement dated [ ] the Assignor has licensed the Assignor IPR and
granted a sub-licence to the extent possible of the Wordnet 3 Licence to
Thales Contact Solutions Limited ("the IPR Licence").
(C) Thales has granted patent licences over all group patents, including the
Patent Application, to Alcatel and Thomson Multimedia ("Cross Patents
Licence Agreements").
(D) By an Agreement dated [ ] ("the SPA") between Thales, Night and other
purchasers, Thales has agreed to procure that the Assignor assigns the
Assignor IPR and the rights under the Wordnet 3 Licence to the Assignee
on the terms and conditions set out below subject to the terms and
conditions of the SPA.
1 INTERPRETATION
All defined terms (except for Assignor, Assignee and Thales, which shall
have the meanings set out in this Agreement) shall have the meanings set
out in the Thales IPR Assignment.
332
2 CONSIDERATION
In consideration of the sum of US$4,000,000 (four million US dollars)
paid by the Assignee to the Assignor, receipt of which the Assignor
hereby acknowledges, the Assignor hereby enters into the terms of this
Agreement.
3 ASSIGNMENT
The Assignor assigns to the Assignee all such right, title and interest
as it acquired in the Assignor IPR and the rights under the Wordnet 3
Licence subject to the obligations in clause 7 of the Thales IPR
Assignment under the Thales IPR Assignment subject to the IPR Licence
and the Cross Patents Licence Agreements. The Assignor also assigns the
right to ▇▇▇ for infringements of the Assignor IPR which have occurred
since the Thales IPR Assignment and to retain any damages obtained as a
result of such action.
4 FURTHER ASSURANCE
4.1 The Assignor agrees at its own expense to execute such further
documents, and take such actions and do such things (including, without
limitation, co-operating with the Assignee to enable the Assignee, at
Assignee's cost promptly to record itself as the registered proprietor
of any registered rights transferred to it under this Agreement), as may
be reasonably requested by the Assignee to give full effect to the terms
of this Agreement and to secure the full right, title and interest of
the Assignee in the Assignor IPR.
4.2 The parties hereto agree to use reasonable endeavours to enter into a
deed of novation with Origin Data Realisation Limited to novate the
Wordnet 3 Licence in favour of the Assignee within 28 days of this
Agreement.
5 REGISTRATION
Assignee shall, at its cost, promptly record itself as registered
proprietor of any registered rights transferred to it under this
Agreement.
6 REMEDIES
The Assignee agrees that if it has any claim for breach of this
Agreement against either the Assignor and/or Thales then to the extent
that such claim is
333
capable of being the subject of a claim against Thales under the SPA, it
shall bring such claim solely against Thales under the SPA and not
against the Assignor and/or Thales under this Agreement.
7 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which so executed will be an original, but together will constitute one
and the same instrument.
8 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The parties to this Agreement do not intend that any of its terms will
be enforceable by virtue of the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇ by any person not a party to it.
9 GOVERNING LAW AND JURISDICTION
9.1 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Agreement or of any term of this Agreement
will be governed by the law of England and Wales.
9.2 The courts of England and Wales will have non-exclusive jurisdiction to
settle any disputes that may arise out of or in connection with this
Agreement. The parties irrevocably agree to submit to that jurisdiction.
AS WITNESS the hands of the parties or their duly authorised agents for and on
behalf of the parties on the date stated at the beginning of this Agreement
334
Executed on behalf of )
THALES ELECTRONICS PLC )
ASSIGNOR )
in the presence of: )
Director
Director/Secretary
Executed on behalf of )
NIGHT )
ASSIGNEE )
in the presence of: )
Director
Director/Secretary
Executed on behalf of )
THALES SA )
in the presence of: )
Director
Director/Secretary
335
DATED 2002
--------------------------------------------------------------------------------
THALES CONTACT SOLUTIONS LIMITED
[UK Acquisition Co]
THALES ELECTRONICS PLC
--------------------------------------------------------------------------------
DEED OF NOVATION
--------------------------------------------------------------------------------
336
THIS DEED OF NOVATION is made on the day of 2002
BETWEEN
(1) THALES CONTACT SOLUTIONS LIMITED (Registered Number 560700) whose
registered office address is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
("the Assignor")
(2) [UK Acquisition Co] (Registered Number [NUMBER]) whose registered office
is at [ADDRESS] ("the Assignee")
(3) THALES ELECTRONICS PLC (registered number 497098)] whose registered
office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("the Third
Party")
BACKGROUND
(A) This novation deed is supplemental to a licence agreement between the
Assignor and the Third Party dated [DATE] attached at Schedule 1 ("the
IPR Licence") under which the Third Party granted the Assignor a licence
to use Licensor IPR (as defined in the IPR Licence).
(B) The Assignor has transferred its business to the Assignee pursuant to a
Sale and Purchase Agreement of even date ("SPA") and the Third Party is
assigning the Licensor IPR and the rights under the Wordnet 3 Licence
(as defined in the IPR Licence)to the Assignee's holding company.
(C) The Assignor wishes to be released from the IPR Licence and the Third
Party agrees to release the Assignor in consideration of the Assignee's
undertaking to perform the IPR Licence and to be bound in place of the
Assignor.
OPERATIVE PROVISIONS
1 The Assignee undertakes to the Third Party to perform from the date of
this Deed obligations on the Assignor's part contained in the IPR
Licence and to be bound by the terms of the IPR Licence in every way as
if the Assignee were a party to the IPR Licence from the date of this
Deed instead of the Assignor.
337
2 In consideration of the undertaking of the Assignee in CLAUSE 1 and with
the consent of the Third Party, the Assignor assigns all its rights
(including without limitation any present, future or contingent interest
or right to any sums or damages payable under or in connection with the
IPR Licence) from the date of this Deed under the IPR Licence to the
Assignee.
3 In consideration of the Assignor procuring the undertaking of the
Assignee in CLAUSE 1, the Third Party releases and discharges the
Assignor from all claims, obligations, demands and duties whatsoever in
respect of the IPR Licence accruing from the date of this Deed and
accepts the liability of the Assignee upon the IPR Licence instead of
the liability of the Assignor for all claims, obligations, demands and
duties accruing on or after the date of this Deed under the IPR Licence.
4 The Third Party undertakes with the Assignee to perform its liabilities
and obligations under the IPR Licence as if the Assignee had at all
times been party to the IPR Licence instead of the Assignor and
acknowledges that the Assignee shall be entitled to enjoy the benefit of
the IPR Licence instead of the Assignor.
5 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Deed or of any term of this Deed shall be
governed by English law. The English courts shall have non-exclusive
jurisdiction to settle any disputes which may arise out of or in
connection with this Deed. The parties to this Deed agree to submit to
that jurisdiction.
6 To the extent provided for in Clause 6 of the SPA, the Assignee agrees
to indemnify, keep indemnified and hold harmless the Assignor from and
against all costs (including the costs of enforcement), expenses,
liabilities (including any tax liability), injuries, losses (which
includes, without limitation, direct, indirect and consequential loss
and loss of profit), damages, claims, demands, proceedings or legal
costs (on a full indemnity basis) and judgments which the Assignor
incurs or suffers as a consequence of a direct or indirect breach or
negligent performance or failure in performance by the Assignee of the
terms of the IPR Licence from the date of this Deed or of this Deed.
338
7 The parties to this Deed do not intend that any of its terms will be
enforceable by virtue of the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇ by any person not a party to it.
8 This Agreement may be executed in any number of counterparts, each of
which so executed will be an original, but together will constitute one
and the same instrument.
This document has been executed and delivered as a deed on the date stated at
the beginning of this Deed.
339
THE COMMON SEAL of )
THALES CONTACT SOLUTIONS )
LIMITED )
was affixed in the presence of: )
Director:
Director/Secretary:
THE COMMON SEAL of )
[UK Acquisition Co] )
was affixed in the presence of: )
Director:
Director/Secretary:
THE COMMON SEAL of )
THALES ELECTRONICS PLC )
was affixed in the presence of: )
Director:
Director/Secretary:
340
SCHEDULE 15
US BUSINESS TRANSFER AGREEMENT
341
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT") is entered
into as of ______________, _____,[COMPLETION DATE] by and among Trader SA, a
French societe anonyme having its registered office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇ (75008) ("TRADER"), Trader TRC, Inc., a Delaware corporation and
indirect wholly-owned subsidiary of Trader ("TRC"), Trader Contact Solutions
Inc., a Delaware corporation and wholly-owned subsidiary of TRC ("ASSIGNOR"),
Night-Systems Ltd., a company organized under the laws of Israel having its
registered office at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇'▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ("NIGHT"), and
[Night/Trader US Acquisition Corp.], a [Delaware] corporation and wholly-owned
subsidiary of Night ("ASSIGNEE") .
W I T N E S S E T H
WHEREAS, Trader, through certain of its wholly owned subsidiaries, is
engaged, among other things, in the business of the design, development,
production, marketing and supply of various secure voice recording, surveillance
and replay systems and products and application software for business
performance management solutions in contact centres, public safety and wholesale
trading platforms and the provision of ancillary services currently carried on
by the Assignors (the "BUSINESS");
WHEREAS, Trader has agreed to sell, or procure the sale of, and Night
has agreed to purchase, substantially all of the assets of the Business, either
directly or through one or more of its subsidiaries;
WHEREAS, Trader, Night, Assignee and certain of Night's other
subsidiaries (Night, Assignee and such other subsidiaries being collectively
referred to herein as the "PURCHASERS") have entered into that certain Sale and
Purchase Agreement dated as of ______________ __, 2002 (the "SALE AND PURCHASE
AGREEMENT") providing, subject to the terms and conditions set forth therein,
for the sale, transfer, assignment and delivery by Trader to the Purchasers of
the Business as a going concern and the Assets (each as defined in the Sale and
Purchase Agreement);
WHEREAS, pursuant to Section 5.4.4 of the Sale and Purchase Agreement,
Trader has agreed to cause Assignor to sell to Assignee, and Assignee has agreed
to purchase from Assignor, that part of the Business operated as a going concern
by Assignor and all the Assets used in that part of the Business by Assignor
(the "US BUSINESS");
WHEREAS, pursuant to Section 6.2.4 of the Sale and Purchase Agreement,
Assignee has agreed to assume that portion of the Assumed Liabilities (as
defined in the Sale and Purchase Agreement) as relates to the US Business (the
"US BUSINESS ASSUMED LIABILITIES"); and
WHEREAS, Assignor is entering into this Agreement for the purpose of
assigning and transferring to Assignee all of Assignor's rights, liabilities and
obligations in and relating to the US Business pursuant to Section 5.4.4 of the
Sale and Purchase Agreement; and
WHEREAS, Assignee is executing and delivering this Agreement for the
purpose of assuming the US Business Assumed Liabilities pursuant to Section
6.2.4 of the Sale and Purchase Agreement.
342
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and agreements contained herein and in the Sale and
Purchase Agreement, the parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Sale and
Purchase Agreement.
2. ASSIGNMENT. Assignor, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby sells,
transfers, conveys, assigns and delivers to Assignee all of Assignor's right,
title, and interest in, to or under all of the Assets constituting the US
Business that are owned or held by them, including, without limitation, each of
the following as they relate to or comprise the US Business: the Goodwill and
any other intangible assets included as part of the Assets of the US Business,
the benefit of the Contracts, all of the rights against third parties
(including, without limitation, all rights in connection with such third party
guarantees, warranties, indemnities, restrictive covenants, confidentiality
obligations and representations and all rights of action of whatever kind
whether or not any proceedings have commenced) with respect to the US Business,
the Accounts Receivable, the Business Information, the Records, and all other
property rights and all other assets of whatsoever nature of any member of the
Trader Group used exclusively in relation to the US Business.
3. ASSUMPTION. Assignee hereby accepts such assignment and assumes and
agrees to perform any and all of the US Business Assumed Liabilities from and
after the Completion Date, subject to the terms and conditions of the Sale and
Purchase Agreement. Except for the US Business Assumed Liabilities, Assignee is
not assuming any liabilities or obligations of Assignor or any of Assignor's
affiliates or of the Business of any kind, character or description, whether
known, unknown, accrued, absolute, contingent or otherwise and, except as
otherwise contemplated by the Sale and Purchase Agreement, Assignor and its
affiliates shall continue to be responsible for all such liabilities and
obligations other than the US Business Assumed Liabilities from and after the
Completion Date.
4. BINDING AGREEMENT; AMENDMENTS. This Agreement shall be binding on
each of the parties and their respective heirs, representatives, successors and
assigns. This Agreement may not be modified except by an instrument in writing
which is signed by each of the parties.
5. GOVERNING LAW. This Agreement, including all matters of construction,
validity and performance, shall in all respects be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
in such State and to be performed entirely within such State, without giving
effect to principles relating to conflicts of law.
343
6. FURTHER ASSURANCES. Each of Assignor, TRC and Trader hereby covenants
and agrees that, from time to time at Assignee's or Night's request after
delivery of this Agreement and without further consideration, Assignor, TRC
and/or Trader, as the case may be, will do, execute, acknowledge and deliver, or
will cause to be done, executed, acknowledged and delivered, all and any such
further acts, conveyances, transfers, assignments, instruments and assurances as
may be reasonably required to effectively grant, convey, assign, transfer and
set over to and vest in Assignee any and all of the Assets of the US Business.
7. OTHER AGREEMENTS PREVAIL. Assignor and Assignee hereby acknowledge
and agree that neither the representations and warranties nor the rights or
remedies of any party under the Sale and Purchase Agreement shall be deemed to
be enlarged, modified or altered in any way by this Agreement. In the event of a
conflict between the terms of this Agreement and the terms of the Sale and
Purchase Agreement, the terms of the Sale and Purchase Agreement shall prevail.
8. COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
[signature page follows]
344
IN WITNESS WHEREOF, this Assignment and Assumption Agreement has been
duly executed as of the date first above written.
ASSIGNOR: ASSIGNEE:
TRADER CONTACT SOLUTIONS INC. [NIGHT/TRADER US ACQUISITION CORP.]
By: _____________________________
By: _____________________________
Name:
Name:
Title:
Title:
ACKNOWLEDGED AND AGREED:
ACKNOWLEDGED AND AGREED:
NIGHT SYSTEMS LTD.
TRADER SA
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
TRADER TRC, INC.
By: _____________________________
Name:
Title:
345
▇▇▇▇ OF SALE
KNOW ALL MEN BY THESE PRESENTS, that TRADER CONTACT SOLUTIONS INC.
("SELLER"), a Delaware corporation and wholly-owned subsidiary of TRADER TRC,
INC. ("TRC"), which is itself a Delaware corporation and an indirect
wholly-owned subsidiary of TRADER SA, a French societe anonyme having its
registered office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ (75008)("TRADER"),
for good and valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, and intending to be legally bound, does hereby sell,
transfer, convey, set over and deliver to [Night/Trader US Acquisition Corp.]
("BUYER"), its successors and assigns, all of Seller's right, title and interest
in and to the Assets comprising the US Business (capitalized terms used, but not
defined in this ▇▇▇▇ of sale having the meanings ascribed thereto in that
certain Sale and Purchase Agreement dated as of ______________ __, 2002 by and
among Seller, Buyer, Trader, Night-Systems Ltd, a company organized under the
laws of Israel having its registered office at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇'▇▇▇▇▇,
▇▇▇▇▇▇ ("NIGHT") and certain other subsidiaries of Night (the "SALE AND PURCHASE
AGREEMENT")), including, without limitation, to the extent related to or
comprising the US Business, the Machinery and Equipment, the Fixtures and
Fittings, the Inventory and all other property rights and all other assets of
whatsoever nature used exclusively in relation to the Business.
Seller hereby constitutes and appoints Buyer the true and lawful
attorney of Seller, with full authority and power of substitution, in the name
and stead of Seller, but on behalf and for the benefit of Buyer to demand and
receive any and all of such Assets, to give receipts and releases for and in
respect of the same, or any part thereof, and to execute on behalf of Seller
additional instruments of transfer and assignment and do all acts and things in
relation to such Assets which Buyer or Night shall deem reasonably required in
order to transfer and assign to and vest in Buyer full right and title to and in
all of such Assets.
Seller hereby covenants that from time to time and at Buyer's request
and without further consideration, Seller shall do, execute, acknowledge and
deliver or shall cause to be done, executed, acknowledged and delivered all and
every such further acts, transfers, conveyances, assignments, powers of attorney
and assurances as reasonably may be required for assuring, conveying,
transferring, confirming and vesting unto Buyer of any of such Assets.
Nothing in this instrument, express or implied, is intended or shall be
construed to confer upon, or give to, any person, firm or corporation other than
Buyer and its successors and assigns, any remedy or claim under or by reason of
this instrument or by any of its terms, covenants or conditions, and all the
terms, covenants and conditions, promises and agreements in this instrument
contained shall be for the sole and exclusive benefit of Buyer, its successors
and assigns.
[signature page follows]
346
IN WITNESS WHEREOF, the undersigned have executed this ▇▇▇▇ of Sale on
this _____ day of ___________________, ____.
TRADER CONTACT SOLUTIONS INC.
By:_____________________________
Name:
Title:
347
STOCK AND PROMISSORY NOTE PURCHASE AGREEMENT
This STOCK AND PROMISSORY NOTE PURCHASE AGREEMENT (the "Agreement"),
dated as of __________ __, ___________ (the "Effective Date"), by and between
Trader TRC Inc., a corporation organized under the laws of the State of Delaware
("Seller") and [Night-Systems Ltd., a company organized under the laws of Israel
("Purchaser")]
WHEREAS, Seller is the record owner of Three Million Three Hundred
Fifty-Six Thousand, Three Hundred Thirty-Five (3,356,335) shares of Series C
Convertible Preferred Stock, par value $1.00 per share (the "Cliffstone
Shares"), of Cliffstone Corporation ("Cliffstone");
WHEREAS, Seller is a party to that certain Credit Agreement dated as of
September 10, 2001 between Cliffstone, as Borrower, and Seller, as Lender, as
amended by that certain First Amendment to Credit Agreement dated as of March
12, 2002 (the "Credit Agreement") and Seller is the holder and record owner of a
senior secured convertible promissory note, dated [March 12, 2002], in the
aggregate principal amount of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Dollars (US$ 1,500,000) issued under the Credit Agreement by Cliffstone in favor
of Seller (the "Cliffstone Note");
WHEREAS, Trader SA, a French societe anonyme having its registered
office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ (75008) and the parent entity
of Seller ("Trader"), Purchaser, and certain of Purchaser's subsidiaries have
entered into that certain Sale and Purchase Agreement dated as of ______________
__, 2002 (the "Sale and Purchase Agreement") providing, subject to the terms and
conditions set forth therein, for the sale, transfer, assignment and delivery by
Trader to Purchaser and its subsidiaries of the Business and Assets described
therein;
WHEREAS, pursuant to Section 4 of the Sale and Purchase Agreement,
Trader has agreed to cause Seller to sell to Purchaser, and Purchaser has agreed
to purchase from Seller, the Cliffstone Shares and the Cliffstone Note;
WHEREAS, Seller is entering into this Agreement for the purpose of
selling, assigning and transferring to Purchaser all of Seller's right, title
and interest in and to the Cliffstone Shares and the Cliffstone Note as
contemplated by the Sale and Purchase Agreement; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, subject to the terms and conditions set forth herein and
in the Sale and Purchase Agreement, all of the Cliffstone Shares and the
Cliffstone Note for the consideration set forth in the Sale and Purchase
Agreement.
348
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and conditions contained herein and in the Sale and Purchase
Agreement (including the purchase price set forth in Section 7 of the Sale and
Purchase Agreement), the parties hereto, intending to be legally bound, hereby
agree as follows:
SECTION 1. PURCHASE AND SALE OF THE CLIFFSTONE SHARES. Subject to the
terms and conditions set forth herein, Purchaser hereby agrees to purchase from
Seller, and Seller hereby agrees to sell, transfer and assign to Purchaser, all
of Seller's right, title and interest in and to the Cliffstone Shares for a
portion of the purchase price set forth in Section 7 of the Sale and Purchase
Agreement, payable and allocable as provided for in the Sale and Purchase
Agreement.
SECTION 2. PURCHASE AND SALE OF THE CLIFFSTONE NOTE. Subject to the
terms and conditions set forth herein, Purchaser hereby agrees to purchase from
Seller, and Seller hereby agrees to sell, transfer and assign to Purchaser, all
of Seller's right, title and interest in and to the Cliffstone Note for a
portion of the purchase price set forth in Section 7 of the Sale and Purchase
Agreement, payable and allocable as provided for in the Sale and Purchase
Agreement.
SECTION 3. CLOSING. Upon the terms and subject to the conditions set
forth herein, the consummation of the purchase and sale of the Cliffstone Shares
and the Cliffstone Note (the "Closing") shall occur simultaneously with, and at
the same location as, the completion of the transactions contemplated by the
Sale and Purchase Agreement. At the Closing, Seller shall deliver to Purchaser
stock certificates of Cliffstone (the "Certificates"), duly endorsed in blank or
accompanied by a stock power duly endorsed in blank and in proper form for
transfer, representing the Cliffstone Shares, together with the original,
manually executed copy of the Cliffstone Note, also duly endorsed and in proper
form for transfer to Purchaser.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Purchaser as follows:
4.1 BINDING EFFECT. This Agreement has been duly executed and delivered
by Seller and constitutes the legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms except as such
enforceability may be limited by (a) bankruptcy, insolvency, moratorium,
reorganization and other laws affecting creditors' rights generally, and (b)
general principles of equity, regardless of whether asserted in a proceeding in
equity or at law.
349
4.2 OWNERSHIP OF THE SELLER SHARES. Seller has good and valid title to
the Cliffstone Shares and the Cliffstone Note free and clear of all liens,
charges, claims or encumbrances that may have been created by Seller. To the
best of Seller's knowledge, there are no outstanding or authorized options,
warrants, rights, calls, commitments, conversion rights, rights of exchange or
other agreements of any character, contingent or otherwise, providing for the
purchase, issuance or sale of any of the Cliffstone Shares, or any arrangements
that require or permit any Cliffstone Shares to be voted by or at the discretion
of anyone other than Seller, and there are no restrictions of any kind on the
transfer of the Cliffstone Shares other than (a) restrictions on transfer set
forth in that certain Investor Rights Agreement, dated as of August 21, 2000, as
amended by Amendment No. 2 thereto, dated as of September 10, 2001 (as so
amended, the "Investor Rights Agreement"), (b) restrictions on transfer imposed
by the Securities Act of 1933, as amended (the "1933 Act"); and (c) restrictions
on transfer imposed by applicable state securities or "Blue Sky" laws.
4.3 NO REQUIRED CONSENTS. Seller has obtained all consents and approvals
required with respect to the transfer of the Cliffstone Shares and the
Cliffstone Note to Purchaser as contemplated by this Agreement, including,
without limitation, any consents or approvals required under the terms and
conditions of the Investor Rights Agreement, the Credit Agreement or the
Cliffstone Note, and the Seller has otherwise complied in all respects with its
obligations under the Investor Rights Agreement in connection with the sale of
the Cliffstone Shares to Purchaser and under the Credit Agreement in connection
with the sale of the Cliffstone Note to Purchaser.
4.4 NO FURTHER REPRESENTATIONS OR WARRANTIES. Seller makes no
representations or warranties except as expressly set forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller as follows:
5.1 BINDING EFFECT. This Agreement has been duly executed and delivered
by Purchaser and constitutes the legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms except as
such enforceability may be limited by (a) bankruptcy, insolvency, moratorium,
reorganization and other laws affecting creditors' rights generally and (b)
general principles of equity, regardless of whether asserted in a proceeding in
equity or at law.
350
5.2 INVESTMENT REPRESENTATIONS. Purchaser acknowledges, represents and
warrants to Seller as follows:
(a) Purchaser acknowledges that neither the Cliffstone Shares nor the
Cliffstone Note have been registered under the 1933 Act or other applicable
federal or state statutes regulating the purchase and sale of securities.
(b) Purchaser is acquiring the Cliffstone Shares and the Cliffstone Note
solely for its own account for the purpose of investment and not as a nominee or
agent for any other person and not with a view to, or for offer or sale in
connection with, any distribution thereof.
SECTION 6. INDEMNIFICATION.
6.1 Seller shall indemnify and hold harmless Purchaser, and its
respective heirs, agents, assigns, affiliates, successors and personal
representatives, from and against any and all damages, losses, obligations,
claims, actions or causes of action, encumbrances, costs, expenses (including
reasonable attorneys' fees incurred by Purchaser in any action or proceeding
between Seller and Purchaser) or other liabilities of any kind or nature
(collectively, "Damages") arising from the breach by Seller of any
representation, warranty or agreement made by Seller hereunder.
6.2 Purchaser shall indemnify and hold harmless Seller, its officers,
directors, stockholders, affiliates and their respective heirs, agents, assigns,
affiliates, successors and personal representatives from and against any and all
Damages arising from the breach by Purchaser of any representation, warranty or
agreement made by Purchaser hereunder.
6.3 The indemnification provisions set forth herein shall be the
exclusive remedy any party may have with respect to any and all Damages arising
out of the transactions contemplated by this Agreement.
SECTION 7. ADDITIONAL TERMS.
7.1 The representations, warranties, and agreements of Purchaser and
Seller contained herein shall survive the Effective Date without limit.
7.2 Neither party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the other party; PROVIDED,
HOWEVER, that any
351
party may make any public disclosure it believes in good faith, and upon the
advice of counsel, is required by applicable law (in which case the disclosing
party will advise the other party prior to making the disclosure and the wording
of such disclosure shall be mutually agreed to by the parties).
7.3. Each of Seller and Purchaser will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
7.4 This Agreement (a) together with the Sale and Purchase Agreement and
the other agreements contemplated thereby, incorporates the entire understanding
and agreement of the parties and supersedes all previous agreements and/or
discussions between Purchaser and Seller solely with respect to the subject
matter hereof; (b) may not be amended or modified except in a writing executed
by Purchaser and Seller; and (c) shall be governed by, construed and enforced in
accordance with the laws of the State of New York, without giving effect to such
State's conflict of laws principles.
7.5 In any action or proceeding arising out of, related to, or in
connection with this Agreement, the parties consent to be subject to the
jurisdiction and venue of (a) the courts of the State of New York, and (b) the
United States District Court for the Southern District of New York. Each of the
parties consents to the service of process in any action commenced hereunder by
certified or registered mail, return receipt requested, or by any other method
or service acceptable under federal law or the laws of the State of New York.
7.6 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document.
7.7 This Agreement shall be binding upon and shall inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.
352
IN WITNESS WHEREOF, the parties hereto intending to be legally bound
hereby, have duly executed this Agreement as of the date first-above written.
SELLER:
TRADER TRC INC.
By: _________________________
Name:
Title:
PURCHASER:
NIGHT-SYSTEMS LTD.
By: _________________________
Name:
Title:
353
SCHEDULE 16
FRENCH BUSINESS TRANSFER AGREEMENT
SUMMARY OF FRENCH BUSINESS TRANSFER AGREEMENT
Agreement between:
Thales Contact Solutions SA(Seller)
and
NICE Systems SARL(Buyer)
The agreement covers the transfer by Seller to Buyer of all of the assets
relating to the voice recording business of Seller in France including
customers, material,equipment ,contracts, etc. Buyer undertakes all of the
employment agreements with the Seller employees, the sub lease for Seller's
premises and receivables and payables relating to the transferred assets. The
agreement includes standard representations by TCS for the period commencing
April 2001, prior to which they did not own the business.
The agreement is subject to French Law.
354
(NOT USED)
355
SCHEDULE 17
GERMAN BUSINESS TRANSFER AGREEMENT
356
ASSET PURCHASE AGREEMENT
------------------------
(hereinafter referred to as the "Agreement")
Between
Trader Contact Solutions GmbH
Technologie Park Bergisch Gladbach
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇-Strasse
51429 Bergisch Gladbach
AG Bergisch Gladbach HRB No. 5492
(hereinafter referred to as the "Seller")
duly represented by its managing director ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, with
power to represent the Seller on his own
and
[German Purchaser]
(hereinafter referred to as the "Purchaser")
duly represented by its managing director [________], with power to represent
the Purchaser on his own.
The managing director of the Seller is authorised to effect the transaction
contemplated in this Agreement by means of a shareholder resolution dated [___],
a certified copy of which is attached to Schedule [____] of the Sale and
Purchase Agreement.
SECTION 1
PARTIES
1. The Seller is a limited liability company, incorporated under the laws
of the Federal Republic of Germany, registered in the Commercial
Register of Bergisch Gladbach under company registration number HRB
5429.
357
2. The Purchaser is registered at [ ].
SECTION 2
GENERAL DESCRIPTION OF THE SUBJECT MATTER OF THIS AGREEMENT
1. The Seller intends to sell and to transfer its entire business as a
going concern pursuant to the provisions of this Agreement to the
Purchaser. For the purposes of the Agreement, the business shall mean
the complete operations of the Seller, namely the business of the
design, development, production, marketing and supply of various secure
voice recording, surveillance and replay systems and products and
application software for business performance management solutions in
contact centres, public safety and wholesale trading platforms and the
provision of ancillary services carried on by the Seller as at
Completion Date (hereafter "the Business").
2. The Seller and the Purchaser refer to the Sale and Purchase Agreement
dated [___] between [TRADER SA and NIGHT] to which this Agreement has
been attached. Unless specifically addressed in this Agreement, any
provisions of the Sale and Purchase Agreement shall apply (with the
necessary changes having been made) to the sale of the Business
hereunder. The Sale and Purchase Agreement is - for this purpose -
incorporated into this Agreement. 3. The effectiveness of this Agreement
and the stipulations herein shall be subject to the Conditions as
stipulated in the Sale and Purchase Agreement, in particular as outlined
in clause 2 of the Sale and Purchase Agreement. Terms with capital
letters shall, unless specified expressively herein, have the meaning as
defined in the Sale and Purchase Agreement.
SECTION 3
SALE
1. The Seller hereby sells as of the Completion Date and under the terms
and conditions of the Sale and Purchase Agreement (and therefore under
English law) to the Purchaser the Business as a going concern, in
particular:
(1) the Machinery and Equipment, in particular, but not exclusively, as
listed in EXHIBIT [____];
(2) the Fixtures and Fittings in particular, but not exclusively, as listed
in EXHIBIT [____];
358
(3) the Inventory in particular, but not exclusively, as listed in EXHIBIT
[____];
(4) the Goodwill and any other intangible assets in particular, but not
exclusively, as listed in EXHIBIT [____];
(5) the benefit of the Contracts in particular, but not exclusively, as
listed in EXHIBIT [____];
(6) all of the rights against third parties (including, without limitation,
all rights in connection with such third party guarantees, warranties,
indemnities, restrictive covenants, confidentiality obligations and
representations and all rights of action of whatever kind whether or not
any proceedings have been commenced) with respect to the Business in
particular, but not exclusively, as listed in EXHIBIT [____];
(7) the Business IPR in particular, but not exclusively, as listed in
EXHIBIT [____];
(8) the Accounts Receivable in particular, but not exclusively, as listed in
EXHIBIT [____];
(9) the Business Information in particular, but not exclusively, as listed
in EXHIBIT [____];
(10) the Records in particular, but not exclusively, as listed in EXHIBIT
[____];
(11) all other property rights and all other assets of whatsoever nature of
any member of the Trader Group used exclusively in relation to the
Business;
(12) All exhibits referred to in this section reflect the status of the
contents of the respective exhibits as of the date on each of the
respective exhibits. Seller and Purchaser agree to update these exhibits
as of the Signing and Completion Date mutually.
2. The Purchaser accepts this sale.
3. Excluded Assets shall not be sold.
359
SECTION 4
TRANSFER OF THE ASSETS
1. The Seller hereby transfers, and assigns title and possession of all
assets enumerated specifically in section 3 (1) to (11) with effect as
of the Completion Date. The parties shall transfer possession by means
of a joint inspection on the Completion Date.
The Purchaser accepts this transfer of title in the assets.
2. If individual assets among the assets which are sold are not in the
possession of the Seller as of today or the Completion Date the Seller
herewith assigns as of the Completion Date its right to regain
possession against whomever has possession at such time, either directly
or indirectly, to the Purchaser instead of delivering such assets at the
Closing. The Purchaser accepts such assignment.
3. Should any of the above-mentioned assets have been delivered by a vendor
to the Seller with reservation of ownership until the full purchase
price has been paid, the Seller herewith assigns as of the Completion
Date all rights to obtain full title to the Purchaser. The Purchaser
accepts the assignment.
4. The Parties agree that with transfer of the assets, all rights that
relate to these assets and may be claimed and enforced against third
parties will be passed on to the Purchaser as well.
5. The Seller shall not assume any Excluded Liabilities under any of the
foregoing provisions.
SECTION 5
TRANSFER OF AGREEMENTS, CONTRACTS AND RIGHTS AND LIABILITIES
1. Any and all Contracts (and claims or rights resulting therefrom) in
particular as listed in EXHIBIT [___], any other rights and/or claims
even if they are not based on Contracts and Assumed Liabilities, in
particular as listed in EXHIBIT [___], but not any Excluded Liabilities
in particular as listed in EXHIBIT [___] are herewith assigned as of the
Completion Date to the Purchaser. Purchaser accepts such
360
assignment. Contrary to section 5(1) sentence 1 and section 8 (6) of
this Agreement the agreements, contracts and/ or liabilities relating to
the Business listed in EXHIBIT [___] shall not be assigned or
transferred to the Purchaser.
2. The Purchaser assumes - in its legal relation to the Seller - by way of
assignment herewith with effect as of the Completion Date - any
liabilities arising from these agreements with the consequence that the
Seller is released from these obligations. Purchaser accepts such
assignment.
3. The Seller has already obtained the written consents from some
contractual parties to the transfers of contracts. The respective
consent notices are attached as EXHIBIT [____].]
4. The Seller assigns and transfers as of the Completion Date to the
Purchaser all rights, in particular as emanating from the services
offered by the Seller to third parties still valid at the date of the
Closing, in particular as listed in EXHIBIT [____]. The Seller accepts
such assignment and transfer and also assumes with effect as of the
Closing date any and all obligations which arose from these offers, with
the effect of discharging the Seller from its obligations.
The Seller assigns and transfers as of the Completion Date to the
Purchaser all of the rights against third parties (including, without
limitation, all rights in connection with such third party guarantees,
warranties, indemnities, restrictive covenants, confidentiality
obligations and representations and all rights of action of whatever
kind whether or not any proceedings have been commenced) with respect to
the Business in particular, but not exclusively, as listed in EXHIBIT
[____]. Purchaser accepts such assignment.
5. The Seller shall not assume any Excluded Liabilities under any of the
foregoing provisions.
SECTION 6
EMPLOYEES
1. The Purchaser assumes and honors the employment contracts of all active
and non retired employees as of the Completion Date, the names of which
are listed in EXHIBIT [___] to the extent as provided for by German law.
361
The employees have been informed about the transaction by the Purchaser
and the Seller by means of a letter substantially in the form as
attached as Schedule [___].
SECTION 7
PURCHASE PRICE
The purchase price for the Business shall be the amount determined in
accordance with the Sale and Purchase Agreement (in particular, but not
limited to clauses 7 and 8).
SECTION 8
MISCELLANEOUS
1. Amendments and additions to this Agreement must be in writing. Written
form can be waived only in writing.
2. The Parties to this Agreement commit themselves to treat its content
confidentially.
3. The English Language version of this Agreement shall be the governing
version for purposes of effectiveness, interpretation and construction
of its terms. even if a German convenience translation may be rendered.
4. This Agreement has been entered into to effect the valid sale of assets
under English law (agreement to sell and transfer title in section 3
hereafter) and transfer of title in assets under German law (section 4
and 5 hereafter), such transfer to occur as provided for by clauses
5.4.3 and 5.5. of the Sale and Purchase Agreement.
The applicable law for clauses 4, 5 and 6 only of this Agreement are the
laws of the Federal Republic of Germany. The UN Convention on the Sale
of Goods shall be excluded. For any other provisions of this Agreement,
the Laws of England shall govern. This choice of law provision shall be
governed and construed in accordance with English law.
362
The parties agree that any rights, obligations or remedies as regards
the sale of the Business as contemplated in this Agreement and the Sale
and Purchase Agreement shall only be exercised and can only be based on
the rights, remedies and obligations as created by the Sale and Purchase
Agreement.
5. The English courts shall have non-exclusive jurisdiction.
6. The parties to this Agreement acknowledge and agree that in case of a
conflict between this Agreement and the Sale and Purchase Agreement the
Sale and Purchase Agreement shall prevail.
7. Should one or several provisions of this Agreement be null and void,
display gaps or become unenforceable, the validity of this Agreement as
such shall not be in question. Rather, this Agreement is to be
interpreted and construed under such circumstances in a manner which
allows for the preservation of the content and intent of the Parties as
much and as widely as possible. The Parties herewith obligate one
another to replace any invalid or unenforceable provision with a valid
and enforceable one so that the economic meaning of the provision that
is to be replaced is preserved as much as possible.
Datum/Date [..........]
---------------------
Trader Contact Solutions GmbH
363
------------------------------
[German Purchaser]
Exhibit 3(1): Machinery and Equipment.
Exhibit 3(2): Fixtures and Fittings.
Exhibit 3(3): Inventory.
Exhibit 3(4): Goodwill and Intangible Assets.
Exhibit 3(5): Benefit of Contracts.
Exhibit 3(6): All rights against third parties
(including, without limitation, all rights in
connection with such third party guarantees,
warranties, indemnities, restrictive covenants,
confidentiality obligations and representations
and all rights of action of whatever kind
whether or not any proceedings have been
commenced) with respect to the Business. [To the
extent not covered under Exhibit 3(5)].
Exhibit 3(7): Business IPR.
Exhibit 3(8): Accounts Receivable.
Exhibit 3(9): Business Information.
Exhibit 3(10): The Records.
Exhibit 3(11): All other property rights and all other
assets of whatsoever nature of any member of the
Trader Group used exclusively in relation to the
Business.
364
Exhibit 5(1): Contracts.
Exhibit 5(1)(2): Rights and/or Claims not based on Contracts or
Assumed Liabilities.
Exhibit 5(1)(3): Excluded Liabilities.
Exhibit 5(1)(4) Excluded agreements, contracts and liabilities.
Exhibit 5(3): Consent notices.
Exhibit 5(4): Rights arising from Services offered by
Seller to third parties still valid at
Closing.[To the extent not covered under Exhibit
5(1)].
Exhibit 5(4)(2): All rights against third parties
(including, without limitation, all rights in
connection with such third party guarantees,
warranties, indemnities, restrictive covenants,
confidentiality obligations and representations
and all rights of action of whatever kind
whether or not any proceedings have been
commenced) with respect to the Business. [To the
extent not covered under Exhibit 5(1)].
Exhibit 6(1): Employment contracts of all active and non-retired
employees as of the Completion\ Date.
Exhibit 6(1)(2): Agreed form of Letter of Information to Employees.
365
SCHEDULE 18
EMPLOYEES
366
SCHEDULE 19
RELEVANT EMPLOYEES
367
SCHEDULE 20
KEY EMPLOYEES
368
SCHEDULE 21
PART A
2002 SALES DETERMINATION
1 PRINCIPLES FOR PREPARATION OF THE 2002 SALES STATEMENT
The 2002 Sales Statement shall be prepared on the basis of US GAAP and
subject to US GAAP, as adopted in the preparation of Nice's financial
statements.
2 PREPARATION OF THE 2002 SALES STATEMENT
2.1 Nice shall procure that the Purchasers' management shall, as promptly as
practicable, and in any event within 60 (sixty) days of 31 December 2002
("the First Period"), prepare and deliver to Thales and to Nice a draft
of the 2002 Sales Statement together with a draft certificate (the
"Nice's Accountant's Certificate") in the form set out in Part B of this
Schedule 21 addressed to Thales and to Nice stating that the 2002 Sales
Statement has been prepared in accordance with this Agreement.
2.2 Thales and Nice shall attempt to agree the draft 2002 Sales Statement as
soon as possible and in any event within 30 (thirty) days (the "Second
Period") after receipt of the same under paragraph 2.
2.3 During the Second Period, Thales' Accountants shall be entitled to call
for an inspection of such documents as they shall reasonably consider
necessary. Nice shall procure that the Companies, the Purchasers and
Nice's Accountants respectively shall give each other and to Thales'
Accountants access to all of their records, working papers or other
information used as a basis for preparing the 2002 Sales Statement and
access to personnel as may reasonably be required for the purposes of
considering and agreeing the 2002 Sales Statement.
369
2.4 Unless within the Second Period Thales notifies Nice in writing (setting
out the adjustments, if any, which it proposes should be made to the
draft 2002 Sales Statement the draft 2002 Sales Statement shall be
deemed to be agreed and shall, save in the event of fraud or manifest
error, become final and binding on Thales and Nice for the purposes of
this Agreement.
2.5 If by the end of the Second Period the draft 2002 Sales Statement has
not been agreed, Thales shall meet with Nice so as to resolve in good
faith any differences within the following 7 (seven) days (the "7 Day
Period"). After the expiry of the 7 Day Period either Nice or Thales may
refer the matters in dispute to the Independent Accountants. The
Independent Accountants shall agree, amend or prepare the 2002 Sales
Statement and determine the 2002 Sales but always in accordance with the
principles set out in paragraph 1 of this Schedule insofar as not
otherwise agreed in accordance with the provisions of this Schedule 21.
The Independent Accountants shall be entitled to call for and inspect
such documents as they shall reasonably consider necessary. The
determination prepared by the Independent Accountants shall be delivered
to Thales and Nice within 30 days of such submission to the Independent
Accountants and shall (save in respect of manifest error) be final and
binding on Thales and Nice for the purposes of this Agreement and the
Independent Accountants shall act as experts and not as arbitrators. In
acting under this clause 2.5 the Independent Accountants shall be
entitled to the privileges and immunities of arbitrators. Thales and
Nice shall act in good faith towards each other regarding such
application and in particular shall endeavour with reasonable expedition
to settle the terms of reference of the Independent Accountants.
2.6 Thales shall pay the charges of Thales' Accountants and Nice shall pay
the charges of Nice's Accountants in respect of work carried out
pursuant to the provisions of this Schedule and the charges of the
Independent Accountants (if appointed) shall be apportioned between
Thales and Nice in such proportions as the Independent Accountants may
determine in the light of the merits of the objections taken by (or on
behalf of) Thales to the 2002 Sales Statement in the form despatched
pursuant to paragraph 2.2.
370
2.7 Thales and Nice shall respectively procure, so far as they are able,
that the Companies, the Purchasers, Nice's Accountants and Thales'
Accountants respectively shall give each other and to the Independent
Accountants access to all of their working papers or other information
used as a basis for preparing the 2002 Sales Statement and access to
personnel as may reasonably be required for the purposes of considering
and agreeing the 2002 Sales Statement.
2.8 Upon the 2002 Sales Statement having become final and binding pursuant
to this Schedule (save in respect of fraud or manifest error), Nice
shall procure that the Nice's Accountant's Certificate is finalised and
signed and no right of appeal shall be competent with regard thereto,
and neither Thales nor Nice nor the Independent Accountants shall be
entitled to appeal or state a case either on a point of law or fact with
regard thereto, to any court.
371
3 Sales Earn Out Amount
The Sales Earn Out Amount shall be calculated by reference to the table
set out below such that for every Euro by which the 2002 Sales exceeds
Euro 84,000,000, up to and including the sum of Euro 88,000,000, Thales
shall be entitled to a Dollar by way of the Sales Earn Out and if the
2002 Sales are Euro 88,000,001 or above then Thales shall be entitled to
a further $1,000,000 save that the Sales Earn Out Amount shall in no
event exceed $5,000,000:
Earn Out Euro Sales Range Sales Earn Out
From To Amount
84,000,000 or below $0
1 84,000,001 85,000,000 $1,000,000
2 85,000,001, 86,000,000 $2,000,000
3 86,000,001 87,000,000 $3,000,000
4 87,000,001 88,000,000 $4,000,000
5 88,000,001 and above $5,000,000
372
PART B
NICE'S ACCOUNTANT'S CERTIFICATE
(to be prepared on the notepaper of the Auditors)
To: Thales
Nice
Date
Reference
Gentleman
The Company
We refer to the Sale and Purchase Agreement ("the Agreement") made between
Thales and Nice on _________________________ 2002 for the sale of the Business
and the Assets as therein defined. Words and expressions defined for the purpose
of the Agreement have the same meanings in this letter.
In accordance with Clause 7.3 and Schedule 21 of the Agreement we attach,
initialled for identification, draft 2002 Sales Statement. The statement shows
2002 Sales of Euro [ ] and therefore in accordance with the Agreement and by
reference to the table set out in Schedule 21 the amount payable by [ ] to [ ]
is Dollars [ ].
In our opinion the 2002 Sales Statement has been prepared in all material
respects in accordance with Schedule 21 of the Agreement.
Yours faithfully
Nice's Accountants
373
SCHEDULE 22
SURPLUS EMPLOYEES
374
