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Exhibit 10.2
DATED: DECEMBER 19, 2003
THALES UNDERWATER SYSTEMS PTY LTD (1)
SERCEL AUSTRALIA PTY LTD (2)
SALE AND PURCHASE AGREEMENT
relating to the
MARINE SEISMIC BUSINESS
of
THALES UNDERWATER SYSTEMS PTY LTD
INDEX
CLAUSE Page
1 Definitions and Interpretation 1
2 Agreement to Sell and Purchase 10
3 Purchase Price 13
4 Taxes 13
5 Completion 13
6 Business Contracts 15
7 Transferred Employees 16
8 Superannuation 18
9 Receivables 18
10 Warranties 18
11 Claims 19
12 Limitations of Liability 23
13 Seller's Undertakings 25
14 Purchaser's Undertakings 27
15 Further Assurances and Assistance 28
16 Confidential Information 28
17 Costs 29
18 Interest on Overdue Amounts 29
19 Entire Agreement 29
20 Continuing Effect 29
21 Severability 29
22 Amendments, Waivers and Rights 30
23 Assignment 30
24 Notices 30
25 Counterparts 31
26 Law And Settlement of Disputes 32
27 Rights of Third Parties 32
28 GST 32
29 Termination 33
30 Execution 34
MIXED CAPITAL COMPANY
SALES AND PURCHASE AGREEMENT
REVOLVING CREDIT FACILITY AGREEMENT
CERTIFICATION
CERTIFICATION
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SCHEDULES
1 Accounts
Part 1 - Accounts
Part 2 - Accounting Principles
2 Business Intellectual Property
3 Business Contracts and Leaseholds
4 Covered Employees
5 Plant, Fixtures and Fittings and Motor Vehicles
Part 1 - Plant, Fixtures and Fittings
Part 2 - Motor Vehicles
6 Offer Letters
7 The Property
Part 1 - Description of the Property
Part 2 - Lease Agreement
8 Employees
Part 1 - Relevant Australian Employees
Part 2 - Relevant U.K. Employees
Part 3 - Company Employees
Part 4 - Transferred Australian Employees
Part 5 - Transferred U.K. Employees
Part 6 - Schedule of certain accrued benefits
9 Seller Intellectual Property
Part 1 - Seller Intellectual Property
Part 2 - License Agreement
10 Transitional Service Agreement
11 Warranties
Part 1 - Seller's Warranties
Part 2 - Purchaser's Warranties
12 Apportionment of Closing Purchase Price
13 Earnout
14 Instruments of Conveyance
Part 1 - Deed of Sale and General Assignment
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Part 2 - Deed of Sale and General Assignment
Part 3 - Trade Mark Assignment Deed
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SALE AND PURCHASE AGREEMENT
DATE: DECEMBER 19, 2003
PARTIES:
1 THALES UNDERWATER SYSTEMS PTY LTD, a company incorporated in New
South Wales, Australia, with registered number ACN073 076 212, whose
registered office is at 274 Victoria Road, Rydalmere, NSW 2116,
AUSTRALIA (the "Seller"); and
2 SERCEL AUSTRALIA PTY LTD, a company incorporated in New South Wales,
Australia, with registered number ACN 107 312 041, whose registered
office is at Level 17, The Chifley Tower, 2 Chifley Square, Sydney,
NSW 2000, AUSTRALIA (the "Purchaser"), acting on its own behalf and
on behalf of the Purchaser's Designees (as such term is defined
below);
BACKGROUND:
A. The Seller is engaged, inter alia, in the Business (as such term,
and such other capitalized terms as are used without definition
in these recitals, are defined in clause 1.1 below) both directly
and through the Company.
B. The Purchaser wishes to (i) purchase the Assets and the Shares,
and (ii) acquire the right to use all other properties, assets
and rights of the Seller's Group which are used or held for use
in connection with the Business, such that, on the terms herein
set forth, the Purchaser will, on and as of the Completion Date,
acquire, as a going concern, ownership of or the right to use the
properties, assets and rights of the Seller's Group which are
used or held for use in connection with the conduct of the
Business as currently conducted, and, in such connection, is
willing, on and as of the Completion Date, to assume
responsibility and liability for the Assumed Liabilities,
provided that the Seller retains responsibility and liability for
the Excluded Liabilities.
C. In furtherance of the foregoing, it is contemplated that on the
Completion Date, the Seller and the Purchaser will enter, inter
alia, into a Lease Agreement in respect of the Property, a
Licence Agreement in respect of the Seller Intellectual Property
and a Transitional Services Agreement.
TERMS AGREED:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the following words and expressions shall
have the following meanings:
"Accounts" the unaudited management accounts of the
Business comprising a pro forma balance
sheet as at November 30, 2003 and a pro
forma profit and loss account for the
period which commenced on January 1,
2003 and ended on November 30, 2003, a
copy of which is attached as Part 1 of
Schedule 1;
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"Accounting Principles" the Thales accounting
policies and principles
applied consistently to
the audited annual
financial statements of
the Seller and described
in Part 2 of Schedule 1;
"Advance Receipts" all sums received by or
on behalf of the Seller
prior to the Completion
Date in respect of the
Business but relating or
attributable to or paid
in respect of any period
on or after the
Completion Date;
"Assets" the assets of the
Business described in
clause 2.1;
"Assumed Liabilities" the obligations,
liabilities and duties of
the Seller relating to
the Business agreed to be
assumed by the Purchaser
under this Agreement, as
described in clause 2.5;
"Balance Sheet" the pro forma balance
sheet of the Business as
at November 30, 2003
included in the Accounts;
"Business" such part of the business
of the Seller's Group as
is specific to civilian
marine seismic oil and
gas exploration equipment
and systems, including
the researching into,
development, design,
manufacture, marketing,
sale and maintenance of
the said equipment and
systems at the Completion
Date, excluding any
defence, naval, security
and military business or
application of the
Seller's Group;
"Business Contracts" the Customer Contracts,
the Supplier Contracts,
the Maintenance
Contracts, the Equipment
Contracts, the Computer
Agreements, the
Intellectual Property
Contracts, the Leasehold
Contracts and all other
Contracts (including
equipment and machinery
leases, service
agreements, non-compete
agreements and options to
purchase or sell any
properties, assets or
rights) entered into by
the Seller exclusively in
connection with the
Business to the extent
that they remain to be
performed or remain in
force at the Completion
Date (but specifically
excluding any loan
agreements, guarantees or
similar financing
arrangements (other than
the customer and
Equipment Contracts)),
including the Contracts
so identified in
Schedule 3;
"Business Day" any day other than a
Saturday or a Sunday or a
day which is a bank or
public holiday in New
South Wales, Australia,
and/or France, and/or the
United States;
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"Business Intellectual Property" all Intellectual
Property owned by the
Seller and used or
held for use
exclusively in
connection with the
Business at the
Completion Date,
including the
Intellectual Property
specified in
Schedule 2;
"Business Name(s)" the names THOMSON
MARCONI, THALES,
THALES UNDERWATER
SYSTEMS, THALES
UNDERWATER SYSTEMS PTY
LTD, THALES UNDERWATER
SYSTEMS SEISMIC Inc.
or any name including
the word THALES,
GEC-MARCONI, THOMSON,
MARCONI or TUS or any
colourable imitation
of it;
"Company" THALES UNDERWATER
SYSTEMS SEISMIC Inc.,
a company incorporated
under the laws of
Delaware, having its
place of business in
Houston, Texas, USA,
wholly owned by the
Seller;
"Completion" completion of the sale
and purchase of the
Assets and the Shares
pursuant to and in
accordance with the
terms of this
Agreement, as
described in clause 5;
"Completion Date" the date on which
Completion actually
occurs;
"Computer Systems Agreements" all arrangements,
agreements and other
Contracts (including
without limitation,
licences of software)
entered into by the
Seller exclusively in
connection with the
Business pursuant to
which any third party
provides any element
of systems installed
on the Computers to
the Business
(including all
arrangements relating
to the provision of
maintenance and
support, security,
disaster recovery,
facilities management,
bureau and on-line
services to the
Business) to the
extent that they
remain to be performed
or remain in force at
the Completion Date,
including the
Contracts so
identified in
Schedule 3;
"Computers" all computer hardware
owned or used by the
Seller in the Business
at the Completion
Date;
"Contract" any contract,
agreement, obligation,
promise, commitment,
note or other
undertaking in
writing;
"Covered Employees" the employees of the
Seller's Group listed
in Schedule 4;
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"Customer Contracts" all engagements, orders
or other Contracts
entered into by the
Seller exclusively in
connection with the
Business for the sale or
supply of goods or
equipment or the
provision of services by
the Seller to third
parties to the extent
that they remain to be
performed or remain in
force at the Completion
Date, including the
Contracts so identified
in Schedule 3;
"Disclosed Information" information fairly
disclosed to the
Purchaser in reasonable
detail in the data room
prepared by the Seller
and contained in the
disclosure binders signed
for identification
purposes by the Seller
and the Purchaser on the
date hereof;
"Equipment Contracts" all hire purchase
agreements, leasing
agreements, lease
purchase agreements,
credit sale agreement and
agreements or other
Contracts for conditional
sale or sale by
instalments entered into
by the Seller exclusively
in connection with the
Business and to which any
of the Assets are subject
as at the Completion
Date, including the
Contracts so identified
in Schedule 3;
"Fixed Assets" all tangible assets
included in the Plant and
the Fixtures and
Fittings;
"Fixtures and Fittings" all fixtures (other than
the Plant) and all
fittings, furniture,
utensils, templates,
implements, chattels and
equipment wherever
situated owned by the
Seller and used or held
for use exclusively in
connection with the
Business at the
Completion Date,
including the items
listed in Part 1 of
Schedule 5;
"Goodwill" the goodwill, custom and
connection of the Seller
in relation to the
Business, together with
the exclusive right for
the Purchaser and its
successors and assigns to
carry on the Business and
respectively to represent
themselves as carrying on
the Business in
succession to the Seller
but excluding the
Business Names and the
Seller Intellectual
Property;
"Governmental Authorization" any approval, consent,
permit, ruling, waiver,
exemption, concession or
other authorization
issued or granted by a
governmental authority;
"Group" the Purchaser's Group
and/or the Seller's
Group, as the context
requires;
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"Intellectual Property" all rights of industrial
or intellectual property,
including:
a) patents, trade marks, service marks, trade names, registered
designs and copyrights and applications for any of the above
and the right to apply for these or similar rights in any
country in any part of the world; and
b) rights in inventions, discoveries, improvements, processes,
formulae, trade secrets, technology and know-how (whether
patentable or not), data, drawings, designs, specifications,
manufacturing files and technical information of all kinds;
"Intellectual Property Contracts" all Contracts
entered into by the
Seller exclusively
in connection with
the Business in
relation to the
licensing or use of
Intellectual
Property to the
extent that they
remain to be
performed or remain
in force at the
Completion Date,
including the
Contracts so
identified in
Schedule 3;;
"Judgement" any award, decision,
injunction,
judgement, order or
ruling entered,
issued, made or
rendered by any
court or other
governmental
authority;
"Law" any law, statute,
regulation, rule,
ordinance, principle
of common law,
order, judgement or
decree of any
governmental
authority;
"Lease Agreement" an agreement in the
form attached as
Part 2 of Schedule 7
providing for the
terms and conditions
upon which the
Seller shall let the
Property to the
Purchaser at
Completion;
"Leasehold Contracts" all Contracts
pursuant to which
the Seller has any
leasehold interest
in real property and
entered into by the
Seller exclusively
in connection with
the Business to the
extent that they
remain to be
performed or remain
in force at the
Completion Date,
including the
Contract listed in
Schedule 3;
"Leaseholds" leasehold interests
in any property held
by the Seller
pursuant to the
Leasehold Contracts;
"License Agreement" an agreement in the
form attached as
Part 2 of Schedule 9
providing for the
terms and conditions
upon which the
Seller (on its own
behalf and on behalf
of any other
relevant member of
the Seller's Group)
shall license the
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Seller Intellectual Property
to the Purchaser at
Completion;
"Licences and Permits" all Governmental
Authorizations that are held
by the Seller and
specifically relate to the
conduct of the Business;
"Maintenance Contracts" all Contracts entered into
by the Seller exclusively in
connection with the Business
for the servicing,
maintenance or repair of
goods and equipment sold or
supplied by the Seller prior
to the Completion Date or of
any of the Assets to the
extent that they remain to
be performed or remain in
force at the Completion
Date, including the
Contracts so identified in
Schedule 3;
"Motor Vehicles" the vehicles owned by the
Seller and used exclusively
in connection with the
Business, as listed in
Part 2 of Schedule 5;
"Offer Letters" the form of employment offer
made by the Purchaser and/or
it Designees before and in
view of Completion to the
Relevant Employees attached
as Schedule 6;
"Plant" all items of fixed plant,
equipment and machinery,
wherever situated, owned by
the Seller and used or held
for use exclusively in
connection with the Business
at the Completion Date,
including those items listed
in Schedule 5;
"Prepayments" all amounts paid on or prior
to the Completion Date by or
on behalf of the Seller so
far as the same relate to
liabilities and obligations
in connection with the
carrying on of the Business
in its ordinary course in
respect of any period after
the Completion Date (but
excluding, for the avoidance
of doubt, liabilities in
respect of Taxation);
"Property" the premises owned by the
Seller and occupied by and
used for the purposes of the
Business to be let to the
Purchaser at Completion,
particulars of which are set
out in Part 1 of Schedule 7;
"Purchaser's Designees" (x) Sercel Inc., an Oklahoma
corporation, in respect of
the Shares, and (y) Sercel
England Ltd., an English
company, in respect of the
assets and rights included
in the Assets which are held
by TUS UK;
"Purchaser's Group" the Purchaser, its holding
company and all companies
and undertakings which now
or from
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time to time are
subsidiaries of the
Purchaser or of any
such holding company;
"Receivables" all trade and other
debts owing to or
accrued in favour of
the Seller as at the
Completion Date in
respect of the Business
(whether or not then
invoiced and whether or
not then due and
payable) together with
the benefit of any
security in relation to
such debts;
"Records" all lists of customers
and suppliers, all
manufacturing files,
all operating manuals
and all books and
records relating
exclusively to the
Business or to any of
the Assets (including
all files and
correspondence with
governmental
authorities or other
third parties related
to the Business or any
of the Assets) and all
sales literature which
is used, or capable of
being used, exclusively
in connection with the
Business as at the
Completion Date;
"Relevant Australian Employees" the employees of the
Seller employed in
Australia in connection
with the Business on
the date hereof and
listed in Schedule 8;
"Relevant Employees" the Relevant Australian
Employees and the
Relevant U.K.
Employees,
collectively;
"Relevant U.K. Employees" the employees of TUS UK
employed in the United
Kingdom in connection
with the Business on
the date hereof and
listed in Schedule 8;
"Security Interest" any encumbrance,
mortgage, charge,
assignment for the
purpose of security,
pledge, lien or any
other security interest
of any kind (other than
liens arising or
incurred in the
ordinary course of
trading including
provisions constituting
reservation or
retention of title
clauses) and any
agreement, whether
conditional or
otherwise, to create
any of the foregoing;
"Seller's Funds" the complying
superannuation funds
operated by third
parties in Australia
which provide
accumulation benefits
only in respect of the
Relevant Australian
Employees and to which
the Seller contributes
in respect of the
Relevant Australian
Employees (including
the Superannuation
Trust of Australia);
"Seller's Group" the Seller, its holding
companies and all
companies and
undertakings which now
or from time to time
are subsidiaries of the
Seller or of any such
holding company
(excluding, where the
context so requires,
the Company);
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"Seller Intellectual Property" all Intellectual
Property (other than
the Business
Intellectual
Property) owned by
the Seller or any
other member of the
Seller's Group and
used or held for use
in the Business at
the Completion Date
but not exclusively,
as listed in
Schedule 9, (but
excluding any
positioning and
steering device for
streamer (BIRDs and
BIRDs 2D
Intellectual
Property));
"Shares" one thousand (1,000)
shares, par value
U.S.$ 1.00 per
share, in the share
capital of the
Company;
"Stock" all the stock in
trade, finished
stocks, partly
finished stocks,
work in progress,
raw materials,
stores and
components of the
Seller in connection
with the Business at
the Completion Date
(including any
rights under
warranties given by
suppliers);
"Supplier Contracts" all engagements,
orders and other
Contracts entered
into by the Seller
in connection with
the Business for the
sale or supply of
goods or equipment
or the provision of
services to the
Seller by third
parties in
connection with the
Business to the
extent they remain
to be performed or
remain in force at
the Completion Date,
including the
Contracts so
identified in
Schedule 3;
"Tax" or "Taxation" all taxes, levies,
duties, imports,
charges and
withholdings of any
nature whatsoever or
wheresoever imposed
and all penalties,
charges and interest
relating thereto;
"Transitional Services Agreement" an agreement in the
form attached to
this document as
Schedule 10
providing for the
terms and conditions
of the support
services to be
supplied to the
Purchaser in
relation to the
Business by the
Seller (or the
relevant member of
the Seller's Group)
further to
Completion;
"TUS UK" Thales Underwater
Systems Ltd., a
company organized
under the laws of
England and Wales
and a member of the
Seller's Group; and
"Warranties" the warranties set
out in Schedule 11
and "Warranty" shall
be construed
accordingly.
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1.2 Each of the following additional terms has the meaning
specified therefor in the clause indicated below opposite
such term:
Term Clause
Claim Notice 11.3.1
Closing Purchase Price 3.1
Cumulative Threshold Amount 12.3.2
Direct Claim 11.3.1
Direct Claim Review Period 11.3.4
Earnout 3.4
Excluded Assets 2.2
Excluded Liabilities 2.5
GST 28
GST Act 28
Indemnified Party 11.3
Indemnifying Party 11.3
Individual Claim Threshold Amount 12.3.1
Losses 11.1
Offers 7.1
Maximum Purchaser Warranty Amount 12.1
Maximum Seller Warranty Amount 12.1
Purchaser's Warranties 10.2
Reduction Amount 7.4
relevant claim 12.2
second batch 2.2
Seller's Warranties 10.1
Settlement Offer 11.3.3.4
Thales Undertaking 5.2.11
third batch 2.1
Third Party 11.3.1
Third Party Claim 11.3.1
Third Party Claim Review Period 11.3.3
Transferred Australian Employees 7.2
Transferred Employee 7.2
Transferred U.K. Employees 7.2
Veritas/Viking Agreement 2.1
1.3 In this Agreement, unless the context requires otherwise, any reference to:
1.3.1 a "party" or "the parties" is to a party or the
parties (as the case may be) to this Agreement;
1.3.2 a clause or Schedule is to a clause of or schedule
to this Agreement and any reference made in a
Schedule to a Part or a Paragraph is to a part or
paragraph of that Schedule;
1.3.3 "this Agreement" includes the Schedules which form
part of this Agreement for all purposes;
1.3.4 a statute or statutory provision shall, unless
otherwise expressly provided, be construed as
references to such provisions as respectively
amended, consolidated, extended or re-enacted as at
the date of this Agreement (as the context requires)
and to any orders, regulations, instruments or other
subordinate legislation made under the relevant
statute;
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1.3.5 words denoting any gender shall include the other
genders, references to the singular include the
plural (and vice versa) and references to persons
include firms, corporations and unincorporated
associations;
1.3.6 the words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without
limitation"; and
1.3.7 the word "liabilities" shall be deemed to be followed
by the phrase "(whether known or unknown, accrued,
absolute, contingent or otherwise)".
1.4 Any statement qualified by the expression "to the best of the
knowledge, information and belief of the Seller" or "so far as
the Seller is aware" or any similar expression shall be
construed as being limited to matters of which the Covered
Employees have knowledge, having made all usual and reasonable
enquiries, and shall not have imported to it any wider meaning
or interpretation.
1.5 The words "holding company" and "subsidiary" have the same
meanings as in the Corporations Act 2001 (Cth).
1.6 The index and headings are included for convenience only and
shall not affect the interpretation or construction of this
Agreement.
1.7 When calculating the period of time within which or following
which any act is to be done or step taken, the date which is
the reference day in calculating such period shall be excluded
and if the last day of such period is not a Business Day, the
period shall end on the next day which is a Business Day.
1.8 In the event that any provision of the Lease Agreement, the
License Agreement or the Transitional Services Agreement is in
direct conflict and incompatible with a provision of clauses 1
through 30 of this Agreement (including the Schedules
referenced therein (other than Schedule 7 (Part 2), Schedule 9
(Part 2) and Schedule 10)), the provision of this Agreement
(including such Schedules other than Schedule 7 (Part 2),
Schedule 9 (Part 2) and Schedule 10) shall prevail.
2 AGREEMENT TO SELL AND PURCHASE
2.1 Subject to the terms of this Agreement, at Completion, the
Seller shall sell (or procure the sale) with full title
guarantee and transfer (or procure the transfer), and the
Purchaser (or the Purchaser's Designees, in respect of the
Shares and the Assets located in the UK only) shall
purchase, free from all Security Interests (x) the Shares,
and (y) all of the right, title and interest of the Seller
(or TUS UK in the case of the Assets located in the U.K.)
in the following properties, rights and assets (the
"Assets"):
2.1.1 the Goodwill;
2.1.2 the Business Contracts;
2.1.3 the Business Intellectual Property;
2.1.4 the Stock;
2.1.5 the Records;
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2.1.6 the Computers;
2.1.7 the Motor Vehicles;
2.1.8 the Receivables and all cheques, bills, notes and
securities relating to the Receivables;
2.1.9 the Plant and the Leaseholds;
2.1.10 the Fixtures and Fittings;
2.1.11 the Licences and Permits (to the extent
transferable); and
2.1.12 any other properties, assets or rights of any type
or nature (tangible or intangible) used or held
for use exclusively in connection with the
Business at the Completion Date (excluding any
assets specified in clauses 2.2.1 through 2.2.7);
(it being agreed that notwithstanding any other provision of
this Agreement: (x) the Assets shall be deemed to include all
trade receivables, Receivables and Advance Receipts related to
the delivery of the third batch of products amounting to USD $
2,809,000 (the "third batch") under the Veritas/Viking
Agreement referenced in Schedule 3 (the "Veritas/Viking
Agreement"); and (y) the Assumed Liabilities shall, for the
purposes of clause 2.5, be deemed to include any and all
obligations, liabilities and duties of the Seller under the
Veritas/Viking Agreement in relation to the delivery of the
third batch, provided that prior to Completion, the Seller
shall have taken all steps necessary so as to fulfil the
delivery date for the third batch).
For the avoidance of doubt, it is acknowledged that none of the
services or leaseholds provided by the Seller's Group under the
Transitional Services Agreement or the Lease shall be
considered to form part of the Assets.
2.2 There shall be excluded from the sale and purchase subject of
this Agreement and retained by the Seller the following assets
(the "Excluded Assets"):
2.2.1 cash in hand (including cash floats held in
relation to the Business at the Completion
Date) and cash at bank (whether on current or
deposit account) relating to the Business
including uncleared cheques received on the
Completion Date;
2.2.2 the Advance Receipts;
2.2.3 the benefit of the Prepayments;
2.2.4 all the Business Names and the Seller's
Intellectual Property;
2.2.5 all assets or rights related directly to "birds"
or "birds 2D" (positioning and steering device for
streamer);
2.2.6 all real property or leasehold interests in any
real property owned or held by the Seller except
for the Real Property Leaseholds;
2.2.7 all securities or other interests in any entities
(other than the Shares) owned or held by the
Seller; and
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2.2.8 all other property, rights and assets of the
Seller not specified in clause 2.1;
(it being agreed that notwithstanding any other provision of
this Agreement: (x) the Excluded Assets shall be deemed to
include all trade receivables, Receivables and Advance Receipts
related to the delivery of the second batch of products
amounting to USD$ 3,301,000 (the "second batch") under the
Veritas/Viking Agreement, even if the delivery of the second
batch occurs after the Completion Date; and (y) the Excluded
Liabilities shall be deemed to include any and all obligations,
liabilities and duties of the Seller under the Veritas/Viking
Agreement in relation to the delivery of the second batch).
2.3 At Completion, the Property shall be let upon and subject to
the terms and conditions set out or referred to in the Lease
Agreement.
2.4 At Completion, the Seller Intellectual Property will be
licensed to the Purchaser upon and subject to the terms and
conditions set out or referred to in the Licence Agreement.
2.5 At Completion, the Purchaser shall be deemed to have assumed
responsibility and liability for the following obligations,
liabilities and duties of the Seller (the "Assumed
Liabilities") and shall pay, discharge or perform the same when
due:
2.5.1 any and all obligations, liabilities and duties of the
Seller relating exclusively to the Business and the
Assets (i) existing as of the date of the Balance
Sheet, but only if and to the extent that the same are
accrued or reserved for on the Balance Sheet and
remain unpaid and undischarged on the Completion Date;
or (ii) incurred in the ordinary course of business
after the date of the Balance Sheet, to the extent
that the same remain unpaid and undischarged on the
Completion Date; except in each case, for: (A)
liabilities for Taxes relating to or arising out of
the Business accruing, or pertaining to any event or
time period occurring at or prior to Completion,
(B) liabilities in respect of employees or employee
benefit or pension plans, except to the extent
specifically provided in clause 2.5.3 below with
respect to the Transferred Australian Employees, and
(C) any liabilities in respect of money borrowed or
other financial indebtedness (other than pursuant to
the Equipment Contracts) and any intercompany payables
owed to other members of the Seller's Group which do
not represent ordinary course trade payables;
2.5.2 any and all obligations, liabilities and duties of the
Seller arising after the Completion Date under the
Business Contracts identified in Schedule 3; and
2.5.3 any and all liabilities of the Seller in respect of
Transferred Australian Employees to the extent
specifically provided in clause 7.6.
Notwithstanding any other provision of this Agreement or any
disclosure made to the Purchaser, the Purchaser shall not assume, and
the Seller shall retain responsibility and liability for and shall
pay, discharge or perform when due, any obligations, liabilities or
duties of the Seller relating to (x) the Excluded Assets, or (y) the
operation of the Business or the ownership of the Assets prior to
Completion other than the Assumed Liabilities (all obligations,
liabilities and duties of the Seller other than the Assumed
Liabilities are hereinafter referred to as the "Excluded
Liabilities").
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2.6 The sale and purchase of each of the Assets and the Shares
shall be interdependent and completed simultaneously.
3 PURCHASE PRICE
3.1 The aggregate purchase price payable at Completion for the
Assets and the Shares, exclusive of GST, shall be €
21,689,392 (twenty one million six hundred eighty-nine
thousand three hundred ninety-two euro) (the "Closing
Purchase Price"), being the amount equal to the excess of (x)
€22,000,000 (twenty-two million euro) over (y) 70% of the
Reduction Amount computed in accordance with Section 7.4.
3.2 The Closing Purchase Price shall be apportioned in accordance
with Schedule 12.
3.3 In addition to the Closing Purchase Price, and subject to the
Completion having occurred, the Seller shall be entitled to
receive an earnout payable in relation to calendar years 2004
and 2005 (the "Earnout"), determined and paid in accordance
with the provisions of Schedule 13, as additional
consideration for the Assets and the Shares, provided that in
no event shall the cumulative aggregate amount of the Earnout
exceed the amount of € 4,400,000 (four million four hundred
thousand euro).
4 TAXES
4.1 The Seller shall bear any liability for Tax arising from its
or the Company's conduct of the Business or ownership of the
Shares or Business before the Completion Date.
4.2 Any Taxes whatsoever payable in respect of the sale of the
Assets and the Shares, including income taxes on capital
gains, in any jurisdiction shall be borne by the party
legally liable to pay such tax(es). Stamp duties, if
applicable, shall be borne and paid exclusively by the
Purchaser.
5 COMPLETION
5.1 Provided that the conditions to the respective obligations
of the parties set forth below in this clause 5.1 have been
satisfied or waived by the appropriate parties, Completion
shall take place at the offices of Tavernier Tschanz, 11-bis
rue Toepffer, 1206 Geneva, Switzerland, at 9 a.m. on
January 2, 2004 (or at such other time, date or location as
the parties may agree). Subject to the provisions of clause
29, failure to consummate the Completion at the time, date
and location determined pursuant to this clause 5.1 shall
not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
5.1.1 The obligation of the Seller to sell the Assets and
the Shares and to take the other actions required to
be taken by the Seller at Completion is subject to
the satisfaction, at or prior to Completion, of each
of the following conditions (any one or more of
which may be waived by the Purchaser, in whole or in
part, in its sole discretion):
5.1.1.1 all the Seller's Warranties shall have
been accurate in all material respects as
of the date of this Agreement, and shall
be accurate in all material respects as of
the Completion Date as if made on the
Completion Date; and
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5.1.1.2 the Seller shall have duly performed and
complied with, in all material respects, all
the covenants, obligations and other
undertakings that the Seller is required to
perform or to comply with pursuant to this
Agreement at or prior to the Completion.
5.1.2 The obligation of the Purchaser to purchase the
Assets and the Shares, to assume the Assumed
Liabilities and to take the other actions required
to be taken by the Purchaser at Completion is
subject to the satisfaction, at or prior to
Completion, of each of the following conditions (any
one or more of which may be waived by the Seller, in
whole or in part, in its sole discretion):
5.1.2.1 all the Purchaser's Warranties shall have
been accurate in all material respects as of
the date of this Agreement, and shall be
accurate in all material respects as of the
Completion Date as if made on the Completion
Date; and
5.1.2.2 the Purchaser shall have duly performed and
complied with, in all material respects, all
the covenants, obligations and other
undertakings that the Purchaser is required
to perform or to comply with pursuant to this
Agreement at or prior to the Completion.
5.1.3 The waiver of any condition based on the accuracy of
any Warranty, or on the performance of or compliance
with any covenant, obligation or undertaking, will not
affect the right to indemnification or other remedy
based on such Warranties, covenants, obligations or
undertakings.
5.2 At Completion, the Seller shall deliver to (or procure the
delivery to) the Purchaser (or to the Purchaser's
Designees, as agreed) of:
5.2.1 duly executed copies of deeds of sale and general
assignment in the forms attached as Parts 1 and 2 of
Schedule 14;
5.2.2 all the Assets which are capable of passing by delivery
when, by virtue of such delivery, title to those Assets
shall pass to the Purchaser;
5.2.3 all the Business Contracts and the Records;
5.2.4 a duly executed copy of the deed of assignment of the
Business Intellectual Property in the form attached as
Part 3 of Schedule 14;
5.2.5 a share certificate representing the Shares along with
duly executed stock powers sufficient to transfer good
title to the Shares to Sercel Inc., as the Purchaser's
Designee, together with (i) the share register, ledger,
books and records of the Company, (ii) a certified copy
of an extract of the minutes of a meeting of board of
directors of the Seller, as the shareholder of the
Company, authorising the execution and performance by
the Seller of this Agreement, and (iii) resignation of
Mr. Antoine Lagomarsino as member of the Company's board
of directors, effective at Completion;
5.2.6 a certified copy of an extract of the minutes of a
meeting of the board of directors of the Seller
authorising the execution by the Seller of this
Agreement
5.2.7 duly executed notices of disposition of all Motor Vehicles;
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5.2.8 a duly executed copy of the Lease Agreement;
5.2.9 a duly executed copy of the License Agreement; and
5.2.10 a duly executed copy of the Transitional Services Agreement.
5.3 At Completion, the Seller shall permit the Purchaser to
enter into the Property made available under the Lease
Agreement and to take possession of the Business.
5.4 At Completion, the Purchaser (on its own behalf and on
behalf of the Purchaser's Designees) shall pay the Closing
Purchase Price to the Seller by wire transfer of
immediately available funds to such bank account as the
Seller shall have previously indicated to the Purchaser,
and shall deliver to the Seller:
5.4.1 a duly executed copy of the Lease Agreement;
5.4.2 a duly executed copy of the License Agreement;
5.4.3 a duly executed copy of the Transitional Services Agreement; and
5.4.4 a certified copy of an extract of the minutes of
a meeting of the board of directors of the
Purchaser authorising the execution by the
Purchaser of this Agreement.
6 BUSINESS CONTRACTS
6.1 The Purchaser undertakes to the Seller with effect from the
Completion Date to assume the obligations, liabilities and
duties and become entitled to the benefits of the Seller
under the Business Contracts and to carry out and perform
and complete all the obligations, liabilities and duties
created by or arising under the Business Contracts after the
Completion Date (in each case, to the extent provided by
clause 2.5).
6.2 The Seller undertakes with effect from the Completion Date
to assign to the order of the Purchaser, or to procure the
assignment to the order of the Purchaser of, all the
Business Contracts which are capable of assignment without
the consent of other parties.
6.3 Insofar as any of the Business Contracts are not assignable
to the Purchaser without the agreement of or novation by or
consent to the assignment from another party, this Agreement
shall not constitute an assignment or attempted assignment
if such assignment or attempted assignment would constitute
a breach of such Business Contracts. In the event that
consent or novation is required for such assignment:
6.3.1 the Seller at the Purchaser's request shall use all
reasonable endeavours with the co-operation of the
Purchaser to procure such novation or assignment as
aforesaid;
6.3.2 unless and until any such Business Contract shall be
novated or assigned as aforesaid, the Seller shall
hold such Business Contract on trust for the Purchaser
and its successors in title absolutely and the
Purchaser shall (if such sub-contracting is
permissible and lawful under the Business Contract
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in question) as the Seller's sub-contractor perform
all the obligations of the Seller under such Business
Contract; and
6.3.3 unless and until any such Business Contract shall be
novated or assigned, the Seller will (so far as it
lawfully may) give all such assistance to the
Purchaser and at the Purchaser's cost as the
Purchaser may reasonably require to enable the
Purchaser to enforce the Seller's rights under such
Business Contract and (without limitation) will
provide information in relation to such Business
Contract as the Purchaser may reasonably require from
time to time.
6.4 To the extent that any payment is made to the Seller in
respect of a Business Contract on or after the Completion
Date, the Seller shall receive the same as trustee and
shall account to the Purchaser for the same on the
Completion Date or, if received thereafter, within ten
(10) Business Days of receipt.
7 TRANSFERRED EMPLOYEES
7.1 Prior to the date of this Agreement, the Purchaser has offered
the Relevant Employees employment to commence on the
Completion Date pursuant to the Offer Letters in the form
attached as Schedule 6 (adapted as appropriate for the
Relevant U.K. Employees) (the "Offers").
7.2 The Relevant Employees who have accepted an Offer prior to the
date hereof (respectively, the "Transferred Australian
Employees" and the "Transferred U.K. Employees" and,
collectively, the "Transferred Employees") are identified as
such in Parts 4 and 5 of Schedule 8. Relevant Australian
Employees who decide to accept their Offer after the date
hereof, whether in writing or by coming to the Property to
work after Completion in accordance with the Offer Letters
shall also be deemed to be Transferred Australian Employees.
The Purchaser shall inform the Seller in writing of any
Relevant Australian Employees who shall so accept their Offers
after the date hereof.
7.3 On the Completion Date, the Seller shall
7.3.1 with respect to the Transferred Australian Employees:
7.3.1.1 release the Transferred Australian Employees
from employment with the Seller, with effect
immediately prior to the Completion Date;
7.3.1.2 pay the Transferred Australian Employees all
monies owed to them by the Seller as of the
Completion Date, with the exception of
accrued annual leave, long service leave and
sick leave; and
7.3.1.3 provide the Purchaser with copies of all
records relating to the employment of the
Transferred Australian Employees with the
Seller, including leave records and
employment terms.
7.3.2 with respect to the Transferred U.K. Employees, procure that TUS UK:
7.3.2.1 releases the Transferred U.K. Employees from
employment with TUS UK, with effect
immediately at the Completion Date;
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7.3.2.2 pays the Transferred U.K. Employees all
monies owed to them by TUS UK as of the
Completion Date, with the exception of
accrued annual leave, long service leave and
sick leave; and
7.3.2.3 provides the Purchaser with copies of all
records relating to the employment of the
Transferred U.K. Employees with TUS UK,
including leave records and employment
terms.
7.4 In connection with the computation of the Closing Purchase
Price, the Seller has previously delivered to the
Purchaser a computation of the value of accrued annual
leave (including applicable loadings) and long service
leave in respect of the Transferred Employees (the
"Reduction Amount"), a copy of which is attached as Part 6
of Schedule 8. To the extent that it is determined within
ninety (90) days after the Completion that such
computation of the Reduction Amount was incomplete or
inaccurate in any respect, the parties shall promptly make
any payments required to put the parties in the same
position as they would have been in had such computation
of the Reduction Amount been made fully and accurately
prior the date hereof and reflected in the computation of
the Closing Purchase Price.
7.5 After Completion, the Seller (x) with respect to the
Transferred Australian Employees, shall be responsible
(and shall indemnify the Purchaser against all claims)
for, and (y) with respect to the Transferred U.K.
Employees, shall procure that TUS UK shall be responsible
(and shall indemnify the Purchaser against all claims)
for:
7.5.1 the salary, wages, sales commission, bonuses and
all other employment related payments or
benefits (including any allowances or benefits)
of all such Transferred Employees for the period
up to and including the Completion Date
(excluding the value of accrued annual leave
(including applicable loadings) and long service
leave taken into account in the computation
required by clause 7.4), from which date the
Purchaser will be responsible for them; and
7.5.2 all Taxes (including fringe benefits tax and
payroll tax) payable on the amounts referred to
in clause 7.5.1 in respect of the period up to
and including the Completion Date (whether such
Taxes become due before, on or after the
Completion Date).
7.6 After Completion, and subject to performance by the Seller of its
obligations under clause 7.5, the Purchaser shall be responsible
(and shall indemnify the Seller or TUS UK, as applicable, against
all claims) for salary, wages, sales commission, bonuses and all
other employment-related payments or benefits (including any
allowances or benefits), holiday pay (including applicable
loadings), and other leave entitlements which are or may become
payable after the Completion Date to any Transferred Employee
under any contract of employment, industrial instrument
(including award) or statutory entitlement.
7.7 Notwithstanding anything to the contrary in clauses 7.5 and 7.6,
it is understood and agreed that the Purchaser or the relevant
member of the Purchaser's Group shall be responsible for any
redundancy payments which may become due to any of the
Transferred Employees by reason of their eventual termination by
the Purchaser or any member of the Purchaser's Group after the
Completion Date (including any portion of any such payment
resulting from or attributable to a Transferred Employee's prior
service with the Seller's Group), and that the Seller (and TUS UK
in respect of the Transferred U.K. Employees) shall have no
liability for any such payments.
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8 SUPERANNUATION
The applicable Australian statutory rules at the date of Completion
shall apply with regard to the pensions and related benefits of the
Transferred Australian Employees (Superannuation rules). As far as
practicable and subject to third parties rights, each of the parties
shall execute all documents and do all things necessary to substitute
the Purchaser for the Seller as the contributing employer to the
Seller's Funds in respect of the Transferred Australian Employees with
effect from Completion.
9 RECEIVABLES
9.1 The Seller shall on or after Completion execute or procure
the execution of any assignment or other instrument of
transfer necessary to assign or transfer the Receivables
to the Purchaser, and unless and until any such assignment
or other instrument of transfer shall be executed will:
9.1.1 As soon as practicable after Completion despatch
letters to all persons from whom the Receivables are
owing, instructing such persons to account in respect
of the Receivables to the Purchaser or as the
Purchaser may direct and shall provide copies of all
such letters to the Purchaser;
9.1.2 Account to the Purchaser or as the Purchaser may
direct in respect of any payment received by the
Seller in respect of the Receivables (including any
interest payment received) after Completion Date and,
pending such accounting, shall hold all sums so
received in trust for the Purchaser; and
9.1.3 Not after Completion engage in any correspondence or
discussion concerning any Receivable with any person
from whom such Receivable shall be due and shall
forward to the Purchaser all correspondence or other
communications received by the Seller from any such
person or any person acting on its behalf.
10 WARRANTIES
10.1 The Seller warrants to the Purchaser that the Warranties set
out in Part 1 of Schedule 11 (the "Seller's Warranties") are
true and accurate on and as of the date hereof and will be
true and accurate on and as of the Completion Date.
10.2 The Purchaser warrants to the Seller that the Warranties set
out in Part 2 of Schedule 11 (the "Purchaser's Warranties")
are true and accurate on and as of the date hereof and will
be true and accurate on and as of the Completion Date.
10.3 Each of the parties hereby acknowledges that it is not
entering into this Agreement in reliance on any warranties
or representations except insofar as the same are set forth
in the Warranties.
10.4 The Seller's Warranties are given subject to the information
contained in the Disclosed Information to the extent that
such information is sufficient on its face to reasonably
inform the Purchaser of a specific exception to a Warranty,
except that, notwithstanding any other provision of this
Agreement, the Seller's Warranties set
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forth in clauses 1.1 and 2.3 of the Seller's Warranties
shall not be qualified or limited in respect by any
information contained in the Disclosed Information.
10.5 Each of the Warranties shall be separate and independent and
save as expressly provided to the contrary shall not be
limited by reference to any other Warranty or any other term
of this Agreement.
10.6 The Warranties, together with any other provisions of this
Agreement which shall not have been fully performed at
Completion, shall remain in force notwithstanding
Completion.
11 CLAIMS
11.1 Subject to the provisions and limitations of clauses 11
and 12, the Seller shall indemnify and hold harmless the
Purchaser from and against, and pay or reimburse the
Purchaser for, any damages, losses, liabilities, claims,
reasonable costs or expenses (including interest,
reasonable costs of investigation and defence and
reasonable attorneys' fees) ("Losses") actually suffered
or incurred by the Purchaser or the Company resulting or
arising from or in connection with:
11.1.1 any breach of any of the Seller's Warranties;
and
11.1.2 any Excluded Liabilities, including any claim by
any party against the Purchaser with respect to
any Excluded Liabilities.
11.2 Subject to the provisions and limitations of clauses 11
and 12, the Purchaser shall indemnify and hold harmless
the Seller from and against, and pay or reimburse the
Seller for, any Losses actually suffered or incurred by
the Seller resulting or arising from or in connection
with:
11.2.1 any breach of any the Purchaser's Warranties;
and
11.2.2 any Assumed Liabilities, including any claim by
any party against the Seller with respect to any
Assumed Liabilities.
11.3 The party making a claim for indemnification under this
clause 11 is hereinafter referred to as the "Indemnified
Party" and the party against whom such claims are asserted
under this clause 11 is hereinafter referred to as the
"Indemnifying Party". All claims by any Indemnified Party
under this clause 11 shall be asserted and resolved as
follows:
11.3.1 In the event that (i) any claim, demand or other
proceeding is asserted or instituted by any
person (including a governmental authority)
other than the parties hereto and members of
their respective Groups (a "Third Party") which,
if successful, could give rise to Losses for
which an Indemnifying Party would be liable to
an Indemnified Party hereunder (any such claim,
demand or proceeding, a "Third Party Claim"), or
(ii) any Indemnified Party hereunder shall have
a claim to be indemnified by any Indemnifying
Party hereunder which does not involve a Third
Party Claim (any such claim, a "Direct Claim"),
the Indemnified Party shall deliver to the
Indemnifying Party a written notice (a "Claim
Notice") specifying in reasonable detail, to the
extent known to the Indemnified Party, the
factual basis of such Third Party Claim or
Direct Claim and the amount or estimated amount
of related Losses (which estimate shall not be
conclusive of the final amount thereof) and
shall
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provide such available supporting evidence as may
reasonably be required by the Indemnifying Party to
assess the merits of the Third Party Claim or Direct
Claim and the computation or estimate of Losses.
The Indemnified Party shall send a Claim Notice:
(i) in the case of a Third Party Claim, by no later
than twenty-one (21) days (or such shorter period as
may be warranted under the circumstances) after its
receipt of actual notice of such Third Party Claim;
and (ii) in the case of a Direct Claim, by no later
than sixty (60) days after the Managing Director (or
if none, the person exercising substantially
equivalent functions) of the Indemnified Party
becomes aware that a basis exists for making a claim
for indemnification under this clause 11.
11.3.2 From and after the delivery of a Claim Notice, the
Indemnified Party shall:
11.3.2.1 at the reasonable request of the
Indemnifying Party, grant the Indemnifying
Party and its professional advisors
reasonable access to the books, records and
properties of the Indemnified Party (or of
the Company, if the Seller is the
Indemnifying Party) to the extent
reasonably related to the matters to which
the Claim Notice relates and as permitted
by the Laws, regulations or rules
applicable to the Indemnified Party, and
11.3.2.2 subject to the Indemnifying Party providing
an indemnity to the Indemnified Party in
respect of all costs, liabilities, claims
and reasonable expenses which may be
incurred by the Indemnified Party as a
result of the same, at the reasonable
request of the Indemnifying Party and to
the extent reasonably related to the claim
in question, make (or if the Purchaser is
the Indemnified Party, procure that the
Company makes) any counterclaim against any
person asserting a Third Party Claim or any
cross-claim against any other person which
may be liable, provided that the
Indemnified Party shall not be obligated to
take any such action as it may reasonably
consider to be, directly or indirectly,
detrimental or contrary to its own interest
or that of its Group.
11.3.3 In the event of a Third Party Claim:
11.3.3.1 The Indemnifying Party shall have twenty-one
(21) days following its receipt of the
relevant Claim Notice (or such shorter period
as may be warranted under the circumstances)
(the "Third Party Claim Review Period") to
make such investigation of the underlying
claim as it considers necessary or desirable
and to notify the Indemnified Party whether or
not it disputes its liability to the
Indemnified Party in respect of such Third
Party Claim (which notice shall set forth in
reasonable detail the basis for such
objection). If the Indemnifying Party so
notifies the Indemnified Party during the
Third Party Claim Review Period that it
disputes its liability to the Indemnified
Party in respect of the relevant Third Party
Claim, the Indemnified Party shall have the
right to initiate proceedings against the
Indemnifying Party in accordance with clause
26. If the Indemnifying Party fails to so
notify the Indemnified Party during the Third
Party Claim Review Period that it disputes its
liability to the Indemnified Party in respect
of the relevant Third Party Claim, the
Indemnifying Party shall be
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deemed to have acknowledged its liability to the
Indemnified Party in respect of such Third Party
Claim.
11.3.3.2 In the event that a Third Party Claim is made
against an Indemnified Party for which the sole
relief demanded is money damages which are fully
covered by the Indemnifying Party's
indemnification obligations under this Agreement
and as to which (x) no conflict of interest
exists between the interests of the Indemnified
Party and the members of its Group and those of
the Indemnifying Party and the members of its
Group, (y) the Indemnified Party has not made a
good faith determination that there is a
reasonable probability that the underlying claim
may adversely affect it or members of its Group
other than as a result of monetary damages for
which it would be entitled to indemnification
under this Agreement, and (z) the Indemnifying
Party has expressly acknowledged in writing to
the Indemnified Party that it is within the
scope of and subject entirely to its
indemnification obligations, the Indemnifying
Party, if it so elects by giving written notice
to such effect to the Indemnified Party, may
assume control the defence of such Third Party
Claim and retain (at its expense) legal counsel
of its choice, reasonably acceptable to the
Indemnified Party, to represent the Indemnified
Party (including the Company, if the Purchaser
is the Indemnified Party). If the Indemnifying
Party shall have so elected to assume control of
the defence of a Third Party Claim: (a) the
Indemnifying Party shall diligently conduct the
defence of such Third Party Claim, keep the
Indemnified Party reasonably informed of the
development of the underlying claim, and with
reasonable promptness provide the Indemnified
Party with copies of all material notices,
written communications and filings (including
court papers) made by or on behalf of any of the
parties to the Third Party Claim; and (b) the
Indemnified Party shall have the right to
participate, at its expense, in the defence of
such Third Party Claim with legal counsel of its
choice.
11.3.3.3 In the event that the Indemnifying Party:
(x) shall fail to notify the Indemnified Party
pursuant to clause 11.3.3.2 that it has elected
to assume control of the defence of a Third
Party Claim (or shall notify the Indemnified
Party that it has elected not to assume control
of the defence of a Third Party Claim), or
(y) at any time after it shall have notified the
Indemnified Party pursuant to clause 11.3.3.2
that it has elected to assume control of the
defence of a Third Party Claim, shall fail to
diligently conduct the defence of such Third
Party Claim, the Indemnified Party (or if the
Purchaser is the Indemnified Party, the Company)
shall have the right to conduct the defence of
such Third Party Claim and shall have the right
to retain counsel of its choice, reasonably
acceptable to the Indemnifying Party. If the
Indemnified Party shall have assumed control of
the defence of a Third Party Claim: (a) the
Indemnified Party shall keep the Indemnifying
Party reasonably informed of the development of
the underlying claim and with reasonable
promptness provide the Indemnifying Party with
copies of all material notices, written
communications and filings (including court
papers) made by or on behalf of any of the
parties to the Third Party Claim; and (b) the
Indemnifying Party shall have the
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right to participate, at its expense, in the
defence of any such Third Party Claim with
legal counsel of its choice, reasonably
acceptable to the Indemnified Party.
11.3.3.4 The Indemnifying Party shall not be liable for
any Third Party Claim settled or otherwise
compromised without its prior written consent.
In such connection, if (x) the Indemnified
Party (or the Company, if the Purchaser is the
Indemnifying Party) shall receive from a Third
Party or (y) the Indemnified Party shall
propose to make to a Third Party, an offer to
compromise or settle such Third Party Claim (a
"Settlement Offer"), the Indemnified Party
shall notify the Indemnifying Party of such
Settlement Offer with reasonable promptness
following receipt thereof from the Third Party
and reasonably in advance of responding
thereto, or reasonably in advance of making
such Settlement Offer, and shall provide with
such notice all related supporting
documentation reasonably required to enable
the Indemnifying Party to assess the relative
merits of the Settlement Offer. At the request
of either of the parties, the parties will
consult in good faith with respect to any such
Settlement Offer. The Indemnifying Party shall
then determine in the exercise of its business
judgement whether or not to consent to the
Settlement Offer, but shall not unreasonably
withhold or delay any such consent (with such
consent being deemed given if the Indemnifying
Party shall not have responded in writing
within fifteen (15) days (or such shorter
period as may be reasonable under the
circumstances) of its receipt of a request for
consent). If a Settlement Offer is received
(for which the sole relief provided is
monetary damages), which the Indemnifying
Party, but not the Indemnified Party, is
willing to accept, the Indemnified Party may
elect to continue the defence of the Third
Party Claim at its own expense, in which case
the liability of the Indemnifying Party shall
be limited to the lesser of: (x) Losses
calculated as if the Third Party Claim were
settled in accordance with the proposed
Settlement Offer, or (y) the Losses actually
suffered by the Indemnified Party taking into
account the final resolution of the Third
Party Claim.
If the Indemnifying Party shall have assumed
control of the defence of a Third Party Claim
pursuant to clause 11.3.3.2, the Indemnifying
Party shall not agree to any Settlement Offer
in respect of such Third Party Claim without
the consent of the Indemnified Party, which
consent shall not be unreasonably withheld or
delayed (and which consent shall be deemed
given if the Indemnified Party shall not have
responded in writing within fifteen (15) days
(or such shorter period as may be reasonable
under the circumstances) of its receipt of a
request for consent), unless the Settlement
Offer: (i) releases the Indemnified Party
(and, if the Purchaser is the Indemnified
Party, the Company) completely in connection
with such Third Party Claim; (ii) does not,
and cannot be reasonably expected to,
otherwise adversely affect the Indemnified
Party (and, if the Purchaser is the
Indemnified Party, the Company), and (iii) is
fully funded by the Indemnifying Party.
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Any final settlement by the Indemnifying Party of a Third Party
Claim (provided that the Indemnifying Party has performed all of
its obligations under the relevant settlement agreement) in
accordance with the provisions of the foregoing paragraph and
paragraph 11.3.3.2 shall release the Indemnifying Party from any
further obligation to indemnify the Indemnified Party in respect
of amounts claimed by the relevant third party pursuant to such
Third Party Claim.
11.3.4 In the event of a Direct Claim, the Indemnifying
Party shall have forty-five (45) days following
its receipt of the relevant Claim Notice (the
"Direct Claim Review Period") to make such
investigation of the corresponding claim as it
considers necessary or desirable. If the
Indemnified Party and the Indemnifying Party
agree, on or prior to the expiration of the
Direct Claim Review Period, upon the validity and
amount of such claim, the Indemnifying Party
shall pay to the Indemnified Party, within
fifteen (15) days following the date of such
agreement, the full agreed amount of such claim.
If the Indemnified Party and the Indemnifying
Party fail to agree on or prior to the date of
the expiration of the Direct Claim Review Period
upon the validity or the amount of the Direct
Claim, or if the Indemnifying Party notifies the
Indemnified Party that it disputes its liability
to the Indemnified Party in respect of the
corresponding claim, the Indemnified Party shall
have the right to initiate proceedings against
the Indemnifying Party in accordance with clause
26.
11.4 Each party shall (and in the case of the Purchaser, shall
procure that the Company shall) in relation to any loss or
liability which might give rise to a claim for
indemnification under this Agreement against the other
party, use its commercially reasonable endeavours to take
all available steps to avoid or mitigate such loss or
liability, provided that no party shall be obligated to take
any such action that it reasonably considers to be, directly
or indirectly, detrimental or contrary to its own interest
or that of its Group.
11.5 If, notwithstanding any other provision of this Agreement,
any payment is made by the Seller in or towards the
settlement of any claim made under this Agreement and the
Purchaser subsequently recovers or procures the recovery
from a third party (including insurers) of an amount which
is referable to that claim (and in the event that the
Purchaser becoming entitled subsequent to such payment by
the Seller to make such recovery the Purchaser undertakes
(having due regard for the interests of the Purchaser and
the Company) to procure that all reasonable steps are taken
to enforce such recovery), the Purchaser shall forthwith
repay to the Seller an amount equal to whichever is the
lesser of:
11.5.1 the amount recovered from the third party
after deduction of all reasonable and
evidenced expenses of recovery; and
11.5.2 the amount paid by the Seller in or towards
settlement of the claim.
12 LIMITATIONS OF LIABILITY
12.1 The aggregate liability of the Seller in respect of
claims brought by the Purchaser for breach of the
Seller's Warranties shall not exceed 17.5% (seventeen
and one-half per cent) of the sum of (i) the Closing
Purchase Price, and (ii) any amounts paid by
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the Purchaser to the Seller pursuant to clause 3.4 (the
"Maximum Seller Warranty Amount").
The aggregate liability of the Purchaser in respect of
claims brought by the Seller for breach of the
Purchaser's Warranties shall not exceed the 17.5%
(seventeen and one-half per cent) of the sum of (i) the
Closing Purchase Price, and (ii) any amounts owed by the
Purchaser to the Seller pursuant to clause 3.4 (the
"Maximum Purchaser Warranty Amount").
Neither the Seller nor the Purchaser shall be liable
towards the other for any indirect or consequential
damage under this Agreement (such as but not limited to
loss of profit or loss of revenue to the extent that the
same would constitute indirect or consequential damages
under Australian law) for which neither party shall incur
any liability towards the other whatsoever.
12.2 The Purchaser shall not be entitled to make any claim for
breach of Warranty against the Seller under this
Agreement (a "relevant claim") or to recover any Losses
in respect of any such claim:
12.2.1 if the matter, event or circumstance giving rise
to the relevant claim was provided as Disclosed
Information and, pursuant to clause 10.4,
qualifies or limits the relevant Warranty; or
12.2.2 unless notice in writing (containing the
information referred to in clause 11.3.1) has
been received by the Seller on or before:
i) in the case of a relevant claim relating to
Taxes, June 30, 2009; and
ii) in the case of a relevant claim relating to any
matter other than Taxes, June 30, 2005.
If at any time prior to the relevant expiration date specified
above, a Claim Notice is delivered in accordance with the terms
of this Agreement, the corresponding claim shall survive until
such time as it is fully and finally resolved.
12.3 The Seller shall be under no liability in respect
of a relevant claim unless:
12.3.1 the amount of the Losses in respect of which
the Purchaser is entitled to be indemnified as
a result of such claim exceeds €75,000
(seventy five thousand euro) (the "Individual
Claim Threshold Amount") (it being understood
that if the amount of such Losses exceeds the
Individual Claim Threshold Amount, the
Seller's payment obligation shall extend to
the entire amount of such Losses, including
the amount up to the Individual Claim
Threshold Amount, subject however to clause
12.3.2 below and clause 12.1 above);
12.3.2 the aggregate amount of Losses in respect of
which the Seller is obligated to indemnify the
Purchaser under clause 12.3.1 in respect of
all relevant claims made by the Purchaser
exceeds € 750,000 (seven hundred fifty
thousand euro) (the "Cumulative Threshold
Amount") (it being understood that if the
amount of such Losses shall exceed the
Cumulative Threshold Amount, the Seller's
payment obligation shall extend to the entire
amount of such Losses, including the amount up
to the Cumulative Threshold Amount however
subject to clause 12.1 above).
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For the purposes of the foregoing clause 12.3.1, in the
event of a series of relevant claims based on the same or
a related set of facts, events or circumstances, such
series of claims shall be treated as a single claim and
the aggregate total of the Losses resulting from such
series of claims shall be used to determine whether the
Individual Claim Threshold Amount has been exceeded.
12.4 If a relevant claim arises in respect of a matter event or
circumstance where the Purchaser recovers from some other
person (including insurers) any loss or damage arising
therefrom, then the liability of the Seller (after taking
into account the limitations on the liability of the
Seller referred to in this clause 12) shall be reduced by
the amount so recovered after deduction of all reasonable
expenses of recovery.
12.5 No liability shall attach to the Seller in respect of any
relevant claim if and to the extent that:
12.5.1 the relevant claim would not have arisen or would
have been less but for any act, omission,
transaction or arrangement (or any combination of
any of the same) of the Purchaser or any member of
the Purchaser's Group or any successor in title to
the Shares or their respective directors,
employees or agents taken other than in good faith
after Completion;
12.5.2 the relevant claim arises or is increased as a
result of the passing of, or any change in, or any
change in the interpretation of, any Law, rule,
regulation or administrative practice of any
government, government department, local or state
agency, authority regulatory or fiscal body after
the date of this Agreement;
12.5.3 the relevant claim arises or is increased as a
result of the Purchaser not complying with its
obligations under this Agreement; or
12.5.4 the Losses suffered or incurred by the Purchaser
have been made good or have been otherwise
compensated for without cost to the Purchaser or
any member of the Purchaser's Group.
12.6 The amount of any successful claim against the Seller for
breach of Warranty under this Agreement shall constitute
or be deemed to constitute a reduction in the Purchase
Price.
12.7 No claims of the Purchaser under this clause shall be set
off against any sum due to the Seller by the Purchaser
under this Agreement, under any circumstances whatsoever.
13 SELLER'S UNDERTAKINGS
13.1 During the period from the date hereof through to
Completion (or the earlier termination of this Agreement
pursuant to clause 29), the Seller shall conduct (and
shall procure that the Company conducts) the Business
solely in the ordinary course and on a basis consistent
with past practices, and shall not take any action or
omit to take any action within its control (and shall
procure that the Company does not take any action or
omit to take any action within its control) which action
or omission would result in a breach of any of the
Seller's Warranties as of the Completion Date.
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13.2 For the sole purpose of protecting the Purchaser in
respect of the Goodwill and the value of the Shares, as
from the Completion, the Seller shall not, and shall
procure that no other companies or undertakings which
now or from time to time are subsidiaries of the Seller:
13.2.1 for a period of:
i) 2 years after the Completion Date;
ii) 2 years after the second anniversary of the Completion Date;
iii) 2 years after the fourth anniversary of the Completion Date; and
iv) 1 year after the sixth anniversary of the Completion Date;
and within:
a) Australia and the United States;
b) Europe excluding the territory of the European Union
(as it may be defined from time to time);
c) Asia; or
d) anywhere else in the world except the territory of the
European Union (as it may be defined from time to
time),
either on its own account or in conjunction with or on behalf
of any person, and whether directly or indirectly, carry on,
participate in or be engaged, concerned or interested in
setting up or acquiring any business similar to or competitive
or likely to be competitive with the Business; and
13.2.2 for a period of:
i) 2 years after the Completion Date;
ii) 1 year after the second anniversary of the Completion Date;
and within the European Union (as it may be
defined from time to time), either on its own
account or in conjunction with or on behalf of
any person, and whether directly or
indirectly, carry on, participate in or be
engaged, concerned or interested in setting up
or acquiring any business similar to or
competitive or likely to be competitive with
the Business; and
13.2.3 for a period of two (2) years after the
Completion Date, either on its own account or
in conjunction with or on behalf of any
person, and whether directly or indirectly,
employ, solicit or entice away from the
employment of the Purchaser, the employer of
any Transferred U.K. Employee or the Company
any Transferred Australian Employee, any
Transferred U.K. Employee or any other
officer, manager or employee employed by any
of them in connection with the Business at or
after the Completion Date (whether or not such
person would commit a breach of his contract
of employment by reason of leaving service).
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13.3 Nothing set forth in clause 13.2 shall operate to prevent the
Seller's Group (collectively) from owning not more than 5% of
any class of the issued share capital of a company if such
securities are listed and regularly dealt in on any
internationally recognised investment exchange.
13.4 The Seller acknowledges that each of the prohibitions and
restrictions contained in the provisions of clause 13.2:
(a) must be read and construed and will have effect as a
separate, severable and independent prohibition or
restriction and will be enforceable accordingly;
(b) is reasonable as to period, territorial limitation and
subject matter; and
(c) confers a benefit on the Purchaser which is no more than
that which is reasonably and necessarily required by the
Purchaser for the maintenance and protection of the
Goodwill and the value of the Shares sold to the
Purchaser under this Agreement.
It is the intention of the parties that all combinations
of the prohibitions and restrictions will apply and be
enforceable and that only those which a court, in
exercising its discretion, may hold to be an
unreasonable restraint of trade will be severed.
13.5 As from the Completion Date, the Seller will sell and
deliver hydrophones to the Purchaser, as and when
ordered by the Purchaser, on reasonable terms and
conditions and at market prices on a basis consistent
with deliveries performed by the Seller to the Business
prior to Completion Date.
14. PURCHASER'S UNDERTAKINGS
14.1 As from the Completion, and in respect of Business Names:
14.1.1 The Purchaser undertakes that it shall not,
and will procure that the members of the
Purchaser's Group shall not make use of the
Business Names or any other name or mark
confusingly similar to any of them or any
logos and colours associated with such names,
trade names or trade marks at any time after
the Completion Date, save only that the
Purchaser and the Company shall be entitled,
solely in connection with the Business:
14.1.1.1 for a period of thirty (30) days after
Completion, to use the name "Thales" as
part of the company name of the Company
subject to clause 14.1.2 and to use up
existing inventories of letter paper,
invoices, general stationery, trade
literature, labels, manuals, packaging
and other printed materials bearing the
Business Names;
14.1.1.2 for a period of sixty (60) days after
Completion, to continue to display the
Business Names as they appear on any
existing nameplate, building sign,
vehicle, or any other equipment or
instruments part of the Assets or
belonging to the Company;
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14.1.1.3 for a period of one hundred eighty
(180) days after Completion to dispose of
any existing inventories of products to
which the Business Names have been
applied and remain visible.
14.1.2 Promptly after the Completion Date but not later
than thirty days after such date, the Purchaser
shall procure that the corporate name of the
Company is changed and shall provide to Thales
as soon as reasonably practicable evidence,
reasonably satisfactory to Thales of the
Purchaser's compliance with this clause.
14.2 The Purchaser acknowledges that it has been informed by
the Seller that all insurance cover for the Business will
cease as at the Completion, and undertakes to procure
that as of Completion, the Purchaser, the Company and the
Property benefit, to the extent available on commercially
reasonable terms, from insurance cover of the types, on
terms, and in such amounts as are substantially
consistent (in view of their size, locations and
activities) with the insurance cover currently applicable
to the Sercel Group generally, except that until
January 31, 2004, the Seller shall maintain its current
insurance coverage for the Property in accordance with
the terms of the Lease.
15 FURTHER ASSURANCES AND ASSISTANCE
15.1 On and after the Completion Date, the Seller shall:
15.1.1 do, execute and perform all such acts,
assignments, transfers, deeds, documents and
things (or procure the doing, execution or
performance of them) as the Purchaser may from
time to time reasonably require for the purpose
of vesting in it the full benefit of the
Business and Assets;
15.1.2 from time to time supply to the Purchaser such
information and assistance as the Purchaser may
reasonably require for the purpose of
implementing the provisions of this Agreement;
and
15.1.3 give to the Purchaser all reasonable assistance
to enable the Purchaser to enforce or obtain the
full benefit of any rights against third parties
hereby transferred to the Purchaser.
15.2 As from the Completion Date, the Seller and the
Purchaser shall each give to the other such
reasonable access to the books, accounts, records and
returns of the other relating to or in connection
with the Business as conducted up to the Completion
Date as the other may reasonably require for
legitimate business purposes (including the right to
take copies and extracts on reasonable advance
notice) within the period of five (5) calendar years
from the Completion Date and will during the said
period keep the same in good order.
16 CONFIDENTIAL INFORMATION
The Seller shall not, after Completion, and shall procure that no
other member of the Seller's Group, disclose or use for any purpose
any confidential or proprietary information concerning the
Business, any of the Assets or the Company, except: (i) to the
extent required by applicable Law or stock exchange regulations or
by any competent governmental authority; (ii) to its professional
advisers under circumstances of confidentiality; or (iii) to the
extent that such information is at the
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date hereof or hereafter becomes public knowledge otherwise than
through improper disclosure by any person.
17 COSTS
Except as otherwise expressly provided in this Agreement, 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 and the sale and
purchase under this Agreement.
18 INTEREST ON OVERDUE AMOUNTS
Interest shall be payable by any party on any amount which
shall not be paid by it to the other party by the due date
for its payment, as determined in accordance with the terms
of this Agreement. Such interest shall accrue and be
calculated on a daily basis, both before and after any
Judgement, at a per annum rate equal to EURIBOR plus 2%, for
the period from the due date for its payment until the date
on which it shall actually be paid. Interest shall be
compounded annually and shall be payable on demand. All
payments required to be made under the terms of this
Agreement shall be made in euro.
19 ENTIRE AGREEMENT
19.1 This Agreement, and the documents referred to in it,
constitutes the entire agreement and understanding of the
parties and supersedes all prior negotiations, discussions,
correspondence, communications, understandings and
agreements between the parties relating to the subject
matter of this Agreement and all prior drafts of this
Agreement.
19.2 Each of the parties acknowledges and agrees that in entering
into this Agreement, and the documents referred to in it, it
does not rely on, and shall have no remedy in respect of,
any statement, representation, warranty or understanding
(whether negligently or innocently made) of any person
(whether party to this Agreement or not) other than as
expressly set out in this Agreement or in any other
documents delivered in connection herewith.
20 CONTINUING EFFECT
Each provision of this Agreement shall continue in full force
and effect after Completion, unless such provision has been
fully performed on or before Completion.
21 SEVERABILITY
If at any time any part of any provision of this Agreement shall
be or become invalid or unenforceable in any respect, 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.
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22 AMENDMENTS, WAIVERS AND RIGHTS
22.1 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 parties.
22.2 No delay in exercising or non-exercise by either party
of any 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.
22.3 The rights and remedies of each party under this
Agreement shall be cumulative and not exclusive of any
rights or remedies of that party under the general Law,
subject to the limitations set forth in Article 12. Each
party may exercise each of its rights as often as it
shall think necessary.
23 ASSIGNMENT
Neither party may assign any of its rights under this Agreement
without the prior written consent of the other party. Except to
the extent that the Purchaser shall have assigned all or any of
its rights to indemnification under the terms of this Agreement to
a permitted assign, the Purchaser shall be deemed to have retained
its right to indemnification pursuant to the provisions of this
Agreement in respect of all the Shares and Assets (but shall not
be allowed to transfer or assign them without the prior written
consent of the Seller), notwithstanding the purchase of any Shares
or Assets by the Purchaser's Designees or any sale, transfer or
other disposition of all or a part of the Shares or Assets after
the Completion, as if it had at all times retained ownership of
all the Shares and Assets, for the duration set forth in this
Agreement.
24 NOTICES
24.1 Any notice required to be given under this Agreement shall
be in writing signed on behalf of the party giving it and
may be served by (i) delivering it by hand against an
acknowledgement of delivery dated and signed by the
recipient, (ii) sending it by registered mail (postage
prepaid, return receipt requested) to the address of the
relevant party set out in clause 24.2 or (iii) sending it by
facsimile transmission confirmed by registered mail (postage
prepaid, return receipt requested) posted no later than the
following Business Day (with any such facsimile transmission
to be deemed received at the time indicated on the
corresponding activity report, a copy of which shall be
included in the confirmation by mail) (provided that any
notice or communication which is received after 5:15 p.m.
(local time in the place of receipt) on a Business Day or on
any day which is not a Business Day shall be deemed received
only at 8:30 a.m. (local time in the place of receipt) on
the next Business Day). Any such notice or other
communication shall be effective only upon actual receipt
thereof by its intended recipient.
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24.2 Any notice required to be given under this Agreement shall be sent to:
24.2.1 the Seller at:
274 Victoria Road
Rydalmere, NSW 2116
Australia
Facsimile No: +61 2 9848 3888
For the attention of: Managing Director
with a copy to:
THALES Corporate Legal Services
45, rue de Villiers
92526 Neuilly sur Seine
France
Facsimile No: +33 (0)1 57 77 84 77
For the attention of: Alexandre de Juniac
24.2.2 the Purchaser at:
c/o Sercel Holding
16 rue de Bel Air
44470 Carquefou
France
Facsimile No: +33 (0)2 40 30 31 32
Attention: Managing Director
with a copy to:
Sercel Holding
16 rue de Bel Air
44470 Carquefou
France
Facsimile No: +33 (0)2 40 30 31 32
Attention: Mr. Thierry Le Roux
Ms. Valérie Féry
or to such other address or facsimile number as may be validly
notified from time to time by either party to the other party.
25 COUNTERPARTS
This Agreement may be entered into in any number of counterparts
and by the parties to it on separate counterparts, each of which
when so executed and delivered shall be an original, but all
counterparts together shall constitute one and the same
instrument.
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26 LAW AND SETTLEMENT OF DISPUTES
26.1 This Agreement shall be governed by, and construed and
enforced in accordance with, the Laws of New South Wales,
Australia.
26.2 Any dispute that the Parties shall fail to resolve
amicably shall be finally settled in accordance with the
Rules of Arbitration of the International Chamber of
Commerce, by one (1) or more arbitrator(s) designated in
accordance with the said Rules. The Arbitration shall be
held in Sydney, New South Wales, Australia.
27 RIGHTS OF THIRD PARTIES
Except as expressly provided herein, a person who is not a
party to this Agreement shall have no right to enforce any of
its terms. This Agreement is for the sole and exclusive
benefit of the parties to this Agreement and their successors
and permitted assigns.
28 GST
(a) The Seller and the Purchaser agree that it is their
intention that the supply of the Assets and the Business
pursuant to this Agreement be the supply of a going
concern for the purposes of section 38-325 of the GST Act
and that the supply be GST-free for the purposes of the
GST law.
(b) The Seller will supply to the Purchaser all of the things
necessary for the continued operation of the enterprise
for the purposes of that section and the Seller will carry
on the enterprise until the day of the supply.
(c) The supply is for consideration, and the Purchaser
warrants that it is registered or required to be
registered for GST.
(d) If GST is payable by reference to or in connection with
this Agreement on a Taxable Supply (other than the supply
of the Assets and the Business) made under, by reference
to or in connection with this Agreement, the amount of GST
payable in respect of that supply must be paid as
additional consideration. This clause does not apply if
the supplier chooses to apply the margin scheme.
(e) Any reference in the calculation of any amount payable
under this Agreement to a cost, expense or other liability
incurred by a party must exclude the amount of any input
tax credit in relation to that cost, expense or other
liability.
(f) No additional amount is payable under clause 28(d) until
the recipient of the supply has received a tax invoice or
adjustment note.
(g) For the purpose of this clause the following words have
the following meaning or meanings:
'GST' means the tax that is payable under the GST law and
imposed as goods and services tax as set out in the GST
Act.
'GST Act' means the A New Tax System (Goods and Services
Tax) Act 1999, as amended, or if that Act does not exist
for any reason, any other Act
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imposing or relating to the imposition or administration of a goods
and service tax in Australia.
'adjustment note'; 'consideration'; 'enterprise'; 'GST-free'; 'GST
law'; 'input tax credit'; 'margin scheme'; 'registered'; 'required
to be registered'; 'supply'; 'supply of a going concern'; 'tax
invoice'; and 'taxable supply' have the respective meanings given
to each of those terms in the GST Act.
29 TERMINATION
29.1 This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time prior
to the Completion Date:
29.1.1 by the written agreement of the Seller and the
Purchaser;
29.1.2 by either the Seller or the Purchaser if a court
of competent jurisdiction or any governmental
authority shall have issued an order or other
Judgement or taken any other action (which order
or other Judgement the parties hereto shall use
their commercially reasonable endeavours to
lift), which permanently restrains, enjoins or
otherwise prohibits the transactions
contemplated by this Agreement;
29.1.3 by either the Seller or the Purchaser if a
material breach of any provision of this
Agreement has been committed by the other party
and such breach has not been waived;
29.1.4 (i) by the Seller if any of the conditions in
clause 5.1.1 has not been satisfied as of the
Completion Date or if satisfaction of such
condition is or becomes impossible (other than
through the failure of the Seller to comply with
its obligations under this Agreement), and the
Seller has not waived such condition on or prior
to the Completion Date, or (ii) by the Purchaser
if any of the conditions in clause 5.1.2 has not
been satisfied as of the Completion Date or if
satisfaction of such condition is or becomes
impossible (other than through the failure of
the Seller to comply with its obligations under
this Agreement), and the Seller has not waived
such condition on or prior to the Completion
Date; or
29.1.5 by either the Seller or the Purchaser if
Completion shall not have occurred (other than
through the failure of any party seeking to
terminate this Agreement to comply fully with
the obligations hereunder) on or prior to
12:00 p.m. (Geneva time) on January 2, 2004.
provided, however, that for purposes of this clause 29,
(x) the Purchaser shall be deemed to be in compliance
with its obligations under clause 5.4 hereof through and
until 12:00 p.m. (Geneva time) on January 8, 2004, and
(y) the time and date set forth in clause 29.1.5 shall
be deemed to read "12:00 p.m. (Geneva time) on
January 8, 2004", if the Purchaser is able to
demonstrate that prior to 12:00 p.m. (Geneva time) on
January 2, 2004 it (or another member of its Group) gave
irrevocable instructions to a first class bank in France
to pay the Closing Purchase Price in immediately
available funds to the account specified for such
purpose by the Seller.
29.2 Upon any termination of this Agreement pursuant to
clause 29.1, all further obligations of the parties
hereunder, other than pursuant to clause 17, shall
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terminate, except that nothing herein shall relieve any party from
liability for any antecedent breach of this Agreement.
30 EXECUTION
The parties have shown their acceptance of the terms of this
Agreement by executing it at the end of the Schedules, in
Geneva, Switzerland, on the date first above written.
EXECUTION:
SIGNED by )
duly authorised for and on behalf of )
THALES UNDERWATER )
SYSTEMS PTY LTD
SIGNED by )
duly authorised for and on behalf of )
SERCEL AUSTRALIA PTY LTD )
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STATEMENT OF INCOME (NOVEMBER 2003)
THALES UNDERWATER SYSTEMS Pty Seismic
Currency = kAUD
CURRENT MONTH CUMULATIVE (2003) YEAR END
Actual Actual Forecast
Total Sales 7,076 16,992 26,324
of which Inter-TUS Sales - 97 67
Cost of Sales (5,121 ) (12,502 ) (19,271 )
Gross Profit 1,955 4,490 7,053
% of Sales 27.6 % 26.4 % 26.8 %
Positive Cost Variances Traded 191 386 252
Negative Cost Variances Traded (1 ) (208 ) (220 )
(Under)/Over Recoveries - (400 ) (200 )
Provisions (Created & Applied)/Released 48 1,323 769
Adjusted gross profit 2,192 5,592 7,654
% of Sales 31.0 % 32.9 % 29.1 %
Self Funded Research & Development 8 (1,736 ) (1,756 )
Bid & Demonstration Expenses - (642 ) (686 )
Business Line Development (107 ) (597 ) (708 )
BL Contribution 2,093 2,616 4,504
% of Sales 29.6 % 15.4 % 17.1 %
Thales Research & Technologies Fees - - -
Thint Fees - - -
Lobbying & DAFI Fees - -
Sales & Marketing Expenses - (122 ) (109 )
Net Cost of Warranties & Customer Depr. - -
G&A Expenses - (2,469 ) (1,884 )
Thales Group Corporate Fees (106 ) (253 ) (394 )
Income from operations 1,987 (228 ) 2,117
% of Sales 28.1 % (1.3 %) 8.0 %
Table of Contents
Seismic (Rydalmere) Balance Sheet as at 30 November 2003
Assets
Current Seismic
Cash
1000 CASH-HAND
1010 CASH-BANK 1,112,664.66
1,112,664.66
Inventories
1100 RAW MAT&SUB
1110 CIP 2,857,547.05
1145 PROG PAYMENT (353,664.73 )
1150 INVENTORY PROV
2,503,882.32
Receivables
1200 TDEBTORS 1,407,983.14
1210 PROVN TDEBTS
1220 SUBCONTRACT DEP 621,017.40
2,029,000.54
Other Assets
1300 UNREAL EXCH VAR
1310 STAFF ADV
1315 STAFF LOAN 1,483.50
1330 SUND DEBTOR
1340 FITB
1350 PREPAY
1360 RECOVERABLE DEPOSITS
1370 GST (INPUT)
1371 GST RECEIPT FROM ATO
1380 INTERCOMPANY DEBTORS 120,396.82
1390 INVESTMENTS IN SUBS
121,880.32
Non-Current
Fixed Assets
1400 FA COST-DEPRECIABLE 6,692,777.41
1401 FA COST-NOT DEPREC.
1405 ACCRUED FA
1410 FA ACC DEPN (2,846,196.00 )
3,846,581.41
Intangibles
1500 GOODWILL
1510 AMORT GW
1520 IP 4,204,000.00
1530 AMORT IP (1,558,983.50 )
2,645,016.50
Total Assets 12,259,025.75
Table of Contents
Seismic (Rydalmere) Balance Sheet as at 30 November 2003
Liabilities
Current
Accounts Payable
2000 TCREDITORS
2010 TACCRUAL
2020 ACC EXPENSE
2030 GRN NO INV-non proj
2031 GRN NO INV-proj
Provisions
2100 BONUS PROV (78,047.83 )
2110 AL PROV (326,370.00 )
2120 ON-COSTS PROV (111,476.52 )
2130 FBT PROV
2140 ITP
2150 PAYROLL TAX PROV
2160 RESTRUCTURING PROV
2170 LOSS ON CONTRACTPROV
(515,894.36 )
Other Liabilities
2200 PAY CLEARING
2220 DITL
2250 GST (OUTPUT)
2251 GST PAYMENT TO ATO
Non-Current
Payables
2300 ADV PAYMENT
2310 LOANS
2320 LSL PROV (338,759.00 )
2330 WARRANTY (710,590.85 )
2340 LONG TERM LIABILITY (885,000.00 )
(1,934,349.85 )
Total
Liabilities (2,450,244.21 )
Net Assets 9,808,781.54
Table of Contents
THALES ACCOUNTING PRINCIPLES CORPORATE CONTROL
AND METHODS
ACCOUNTING CONTENTS DESCRIPTIVE Issue : 14/06/2002
STANDARDS AND SUMMARY ------------------
PROCEDURES Page : 1/4
A - Introduction and presentation
This chapter explains how to use the manual, and
describes the importance and scope of each part.
B - Conceptual framework
This chapter indicates and defines the purpose and
primary qualitative characteristics of the financial
statements, and their content. The theoretical basis of
each accounting principle refers to this framework.
C - Financial statement format and content
This chapter contains both standard and French formats
for the individual financial statements. It
consequently includes the balance sheet, statements of
income analyzed by function and by nature of revenues
and expenses, and statements of cash flow and variation
in shareholders' equity and other equity and other
equity instruments. The content of each statement line
is described. Rules to be followed for preparation of
the notes to the financial statements are also given.
D - Intangible and tangible assets
This chapter covers the elements constituting these
balance sheet lines, and reporting procedures for lease
contract transactions.
E - Investments of manufacturing companies
This chapter is concerned with investments in
subsidiaries, other investments (other securities and
long-term loans), marketable securities, cash and
receivables due from other Group companies.
F - Investments and liabilities of financial institutions
G - Foreign currency transactions of financial institutions
These chapters are largely linked to the same
theoretical bases as Chapters E and S. Their purpose is
to consider accounting for financial instruments in
detail, and Chapters F and G are consequently relevant
with respect to transactions conducted by financial
institutions. However, any unit directly involved in
the financial markets should also refer to these
chapters.
H - Inventories and work in process
This chapter deals with all operating assets in
general. The particularities of accounting for
inventories of Consumer Electronics products and
goods-for-resale are included. Valuation and the
treatment of work in process for long-term contracts,
which represent the greater part of Defense Electronics
business, are dealt with in more detail in Chapter O «
Accounting for long-term contracts ».
Table of Contents
THALES ACCOUNTING PRINCIPLES CORPORATE CONTROL
AND METHODS
ACCOUNTING CONTENTS DESCRIPTIVE Issue : 14/06/2002
STANDARDS AND