EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
(LOTS 1-3)
BY AND AMONG
SCANSOFT, INC.
AND
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.,
L&H HOLDINGS USA, INC.
AND
THE OTHER SELLERS NAMED ON ANNEX A ATTACHED HERETO
DATED AS OF DECEMBER 7, 2001
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ARTICLE I - THE PURCHASE..........................................................................................2
1.1 PURCHASE AND SALE OF ASSETS AND ASSUMPTION AND ASSIGNMENT OF THE ASSIGNED CONTRACTS.....................2
1.2 ASSUMPTION OF LIABILITIES...............................................................................6
1.3 RETAINED LIABILITIES....................................................................................6
1.4 PURCHASE PRICE..........................................................................................8
1.5 THE CLOSING.............................................................................................9
1.6 ASSIGNED CONTRACTS.....................................................................................11
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE SELLERS.......................................................11
2.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER........................................................11
2.2 AUTHORITY..............................................................................................12
2.3 NON-CONTRAVENTION......................................................................................12
2.4 OWNERSHIP AND SUFFICIENCY OF ASSETS....................................................................13
2.5 ASSIGNED CONTRACTS.....................................................................................13
2.6 TAXES..................................................................................................15
2.7 INTELLECTUAL PROPERTY..................................................................................16
2.8 LITIGATION.............................................................................................18
2.9 WARRANTIES AND INDEMNITIES.............................................................................18
2.10 EMPLOYEES..............................................................................................18
2.11 BROKERS................................................................................................19
2.12 INSURANCE..............................................................................................19
2.13 RESERVED...............................................................................................19
2.14 RESERVED ..............................................................................................19
2.15 RESERVED...............................................................................................19
2.16 INVESTMENT REPRESENTATIONS.............................................................................19
2.17 RESERVED...............................................................................................20
2.18 CERTAIN SEVERANCE COSTS................................................................................20
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE BUYER........................................................20
3.1 ORGANIZATION...........................................................................................20
3.2 AUTHORIZATION OF TRANSACTION...........................................................................21
3.3 NON-CONTRAVENTION......................................................................................21
3.4 CAPITALIZATION.........................................................................................21
3.5 SEC REPORTS AND FINANCIAL STATEMENTS...................................................................21
3.6 SHARES.................................................................................................22
3.7 LITIGATION.............................................................................................22
3.8 FINANCING..............................................................................................22
3.9 BROKERS................................................................................................22
ARTICLE IV - PRE-CLOSING COVENANTS...............................................................................22
4.1 COMMERCIALLY REASONABLE EFFORTS........................................................................23
4.2 NOTICES AND CONSENTS...................................................................................23
4.3 BANKRUPTCY COVENANTS...................................................................................23
4.4 OPERATION OF BUSINESS..................................................................................24
4.5 FULL ACCESS AND CONFIDENTIALITY........................................................................24
4.6 NOTICE OF BREACHES.....................................................................................25
4.7 TRANSITION SERVICES....................................................................................25
4.8 RESERVED...............................................................................................25
4.9 EMPLOYEE MATTERS.......................................................................................25
4.10 ALLOCATION OF PURCHASE PRICE...........................................................................28
4.11 TAXES..................................................................................................28
4.12 INTELLECTUAL PROPERTY..................................................................................28
4.13 GOOD FAITH.............................................................................................28
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4.14 REGISTRATION RIGHTS....................................................................................29
4.15 ADEQUATE ASSURANCES REGARDING CONTRACTS................................................................29
4.16 RESERVED...............................................................................................28
4.17 BANKRUPTCY OR CONCORDAT PROCEEDINGS INITIATED BY OTHER SELLERS.........................................29
4.18 RESERVED...............................................................................................28
4.19 REIMBURSEMENT OF BELGIAN VAT TAXES; TAX WAIVER.........................................................29
4.20 FURTHER ASSURANCES.....................................................................................30
ARTICLE V - CONDITIONS TO CLOSING................................................................................30
5.1 CONDITIONS TO OBLIGATIONS OF THE BUYER.................................................................30
5.2 CONDITIONS TO OBLIGATIONS OF THE SELLER................................................................32
ARTICLE VI - POST CLOSING COVENANTS AND AGREEMENTS...............................................................33
6.1 PROPRIETARY INFORMATION................................................................................33
6.2 NON-COMPETITION........................................................................................33
6.3 BOOKS AND RECORDS......................................................................................34
6.4 COOPERATION............................................................................................35
6.5 RESALE OF SHARES.......................................................................................35
6.6 LEGENDS................................................................................................36
6.7 RESERVED...............................................................................................36
6.8 RECEIVABLES; ACCOUNTING................................................................................36
6.9 TRADEMARKS/DOMAIN NAMES................................................................................36
6.10 SHARED TECHNOLOGY CONTRACTS............................................................................36
6.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................................................37
6.12 NO OTHER REPRESENTATIONS...............................................................................37
6.13 DISCLOSURE SCHEDULE....................................................................................37
ARTICLE VII - RESERVED...........................................................................................37
ARTICLE VIII - TERMINATION.......................................................................................38
8.1 TERMINATION OF AGREEMENT...............................................................................38
8.2 STATUS OF AGREEMENT AFTER TERMINATION..................................................................38
8.3 FEES AND EXPENSES......................................................................................39
8.5 EXCLUSIVE REMEDY.......................................................................................39
ARTICLE IX - MISCELLANEOUS.......................................................................................39
9.1 PRESS RELEASES AND ANNOUNCEMENTS.......................................................................39
9.2 NO THIRD PARTY BENEFICIARIES...........................................................................39
9.3 ENTIRE AGREEMENT.......................................................................................40
9.4 SUCCESSION AND ASSIGNMENT..............................................................................40
9.5 COUNTERPARTS...........................................................................................40
9.6 HEADINGS...............................................................................................40
9.7 NOTICES................................................................................................40
9.8 GOVERNING LAW..........................................................................................41
9.9 JURISDICTION...........................................................................................42
9.10 WAIVER OF JURY TRIAL...................................................................................42
9.11 BULK SALES LAWS........................................................................................42
9.12 AMENDMENTS AND WAIVERS.................................................................................43
9.13 SEVERABILITY...........................................................................................43
9.14 EXPENSES...............................................................................................43
9.15 SPECIFIC PERFORMANCE...................................................................................43
9.16 CONSTRUCTION...........................................................................................43
9.17 INCORPORATION OF EXHIBITS AND SCHEDULES................................................................43
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ANNEXES
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Annex A List of Other Sellers
Annex B List of L&H Text to Speech Assets
List of Speech Processing/Dialog (and Automotive) Assets
List of Dragon Speech Processing/Dialog Assets
Annex C
List of ISI Speech Processing/Dialog Assets
List of L&H Intelligent Content Management Assets
List of L&H AudioMining Assets
List of L&H Knexys Assets
List of L&H Machine Translation Assets
EXHIBITS
--------
Exhibit A Form of ▇▇▇▇ of Sale
Exhibit B Form of Instrument of Assumption
Exhibit C RESERVED
Exhibit D RESERVED
Exhibit E Form of Promissory Note
Exhibit F Form of Registration Rights Agreement
SCHEDULES
---------
Schedule 1.1(a)(i) Tangible Personal Property
Schedule 1.1(a)(vii) Accounts Receivable
Schedule 1.1(b)(vi) Certain Excluded Contracts
Schedule 1.1(b)(ix) Additional Excluded Tangible Assets
Schedule 1.1(b)(x) Seller Names
Schedule 1.2(a) Assumption of Liabilities
Schedule 4.10 Allocation Schedule
Schedule 6.9 Trademarks /Domain Names
Disclosure Schedule
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of December 7, 2001 (this
"Agreement"), by and among ScanSoft, Inc., a Delaware corporation (the "Buyer"),
on the one hand, and Lernout & Hauspie Speech Products N.V., a corporation
organized and existing under the laws of the Kingdom of Belgium ("L&H"), L&H
Holdings USA, a Delaware corporation that is a wholly-owned subsidiary of L&H
("Holdings"), and the other corporations listed on ANNEX A to this Agreement, on
the other hand (L&H, Holdings, and the other corporations listed on ANNEX A to
this Agreement are each individually referred to herein as a "Seller" and
collectively as the "Sellers"). The Buyer and the Sellers are referred to
collectively herein as the "Parties."
W I T N E S S E T H:
WHEREAS, L&H and Holdings (the "Bankruptcy Sellers") have filed a voluntary
petition for relief under Chapter 11 of Title 11 of the United States Code (the
"U.S. Bankruptcy Code") (Case Nos. 00-4397 through 00-4399 (JHW), jointly
administered) (the "U.S. Bankruptcy Case") in the United States Bankruptcy Court
for the District of Delaware (the "U.S. Bankruptcy Court");
WHEREAS, L&H has been the subject of a concordat proceeding under the
Belgian law of July 17, 1997 on judicial composition (gerechtelijk akkoord) in
Belgium before the Commercial Court of Ieper and has been declared bankrupt (in
staat van faillissement) pursuant to a judgment of October 24, 2001 (the
"Belgian Bankruptcy Case" and together with the U.S. Bankruptcy Case, the
"Bankruptcy Cases") of the Commercial Court of Ieper (such court, together with
the bankruptcy trustees (curatoren; hereinafter the "Trustees") and the
designated judges (rechters-commissarissen) appointed in connection with the
Belgian Bankruptcy Case (the "Designated Judges", together with the Trustees,
the "Belgian Bankruptcy Authorities", and together with the U.S. Bankruptcy
Court, the "Bankruptcy Courts") pursuant to Belgian law of August 8, 1997 (the
"Belgian Bankruptcy Code" and, together with the U.S. Bankruptcy Code, the
"Bankruptcy Codes");
WHEREAS, the Sellers desire to sell, transfer and assign to the Buyer
and the Buyer desires to purchase and acquire from the Sellers (i) (A) the
assets contained within the Sellers' Text-to-Speech Asset Group, (B) the assets
contained within L&H's Speech Processing/Dialog (and Automotive Applications)
Asset Group, and (C) the assets contained within the Dragon Speech
Processing/Dialog Asset Group, as such assets are more fully described on ANNEX
B attached hereto (collectively the "Purchased Asset Groups") and (ii) the
business lines of Sellers directly relating to the development, production,
marketing and sale of the Purchased Asset Groups ((i) and (ii) together, the
"Acquired Business"; it being understood, however, that the Acquired Business
shall not include any item listed on ANNEX C attached hereto (the "Non-
Purchased Asset Groups"), or the business lines of Sellers directly relating to
the development, production, marketing and sale of the Non-Purchased Asset
Groups (together with the Non-Purchased Asset Groups, the "Non-Purchased
Business")), in each case free and clear of all liens, mortgages, security
interest, pledges, claims, encumbrances, liabilities and other obligations and
interests of every kind and nature (the "Encumbrances", it being understood,
however, that the term Encumbrances shall not include any licenses or any escrow
agreements) other than assets being sold, transferred or assigned by the Sellers
that are not Bankruptcy Sellers (the "Non-Bankruptcy Sellers"), in which case
subject to Permitted Encumbrances (as defined in Section 2.4);
WHEREAS, in connection with the transactions contemplated hereby, the
Parties hereto desire that the Assigned Contracts (as defined in Section
l.l(a)(ii)) to which L&H or Holdings is a party (the "Debtor Assigned
Contracts") be assumed by them and assigned to the Buyer pursuant to Section 365
of the U.S. Bankruptcy Code and that the Buyer succeed to all of the rights and
assume the duties and obligations thereunder which arise on or after the Closing
Date under such Debtor Assigned Contracts.
WHEREAS, subject to approval of the Bankruptcy Courts, as set forth herein,
the Sellers shall be authorized to sell the Acquired Assets to the Buyer.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and undertakings herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows.
ARTICLE I
THE PURCHASE
1.1 PURCHASE AND SALE OF ASSETS AND ASSUMPTION AND ASSIGNMENT OF THE
ASSIGNED CONTRACTS.
(a) Upon and subject to the terms and conditions of this Agreement,
the Buyer shall purchase from each Seller, and each Seller shall sell, transfer,
convey, assign and deliver to the Buyer, at the Closing (as defined in Section
1.5(a)), free and clear of all Encumbrances (other than assets being sold,
transferred, conveyed or assigned by the Non-Bankruptcy Sellers, in which case
subject to the Permitted Encumbrances, if any), for the aggregate consideration
specified below in this Article I, all of such Seller's right, title and
interest in and to the following assets of such Seller existing as of the
Closing, regardless of whether such assets existed prior to the commencement of
the Bankruptcy Cases or arising thereafter (the "Acquired Assets"):
(i) all servers, computers, network infrastructure, associated
software (used for administrative purposes), machinery,
equipment, tools and tooling, furniture, fixtures,
supplies, other tangible property and leasehold
improvements set forth on the fixed asset property
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schedule attached hereto as SCHEDULE 1.1(A)(I), as such
may be amended from time to time in the sole discretion of
the Buyer prior to Closing to add or delete any tangible
property owned by Sellers and used primarily in the
conduct of the Acquired Business;
(ii) subject to Section 1.1(b)(vi) below, all rights under all,
(A) contracts, (B) purchase and sales orders, (C)
instruments, (D) licenses and sublicenses and (E) leases,
all as set forth on SCHEDULE 1.2(a) hereto, as such
schedule may be amended from time to time prior to Closing
in accordance with Section 1.2(a) to add or delete any
items referred to in clauses (A) - (E) hereof, in each
case, to the extent such items relate to the conduct of
the Acquired Business (collectively, the "Assigned
Contracts"), it being expressly understood that Buyer will
not delete any Technology Licenses (as defined in
Section 2.4(b));
(iii) all inventory, including raw materials, work in process,
finished goods, supplies, packaging materials, spare parts
and similar items, consignment inventory and inventory
held on order or in transit to the extent used primarily
in the operation of the Acquired Business;
(iv) subject to Section 1.1(b)(v) below, all Intellectual
Property and Other Intellectual Property (as such terms
are defined in Section 2.7(a)) (collectively, the
"Acquired Intellectual Property");
(v) RESERVED;
(vi) all permits, non-intellectual property licenses,
registrations, certificates, orders, approvals,
franchises, variances and similar rights necessary for the
conduct of the Acquired Business (collectively, "Permits")
issued by or obtained from any court, arbitrational
tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (each, a
"Governmental Entity");
(vii) all extant and future (A) trade and other accounts
receivable, (B) notes and loans receivable and (C) other
rights to payment from customers of the Acquired Business
for goods sold or services rendered, together with any
security held by such Seller for the payment of any of the
foregoing thereof (the "Acquired Receivables"), in each
case, to the extent arising out of the contracts listed on
Schedule 1.2(a), excluding any of the foregoing to the
extent that they relate to Excluded Contracts (as defined
in Section 1.1(b)(vi)). Schedule 1.1(a)(vii) contains an
accurate list of Sellers' accounts receivable as of
November 30, 2001 (or later,
3
if available), which will be provided on or prior to the
Closing Date;
(viii) all payments of cash or cash equivalents received by the
Sellers from customers in respect of the Acquired
Receivables on or after the Closing Date;
(ix) except as excluded in Section 1.1(b)(vii) below, and
except for those items that otherwise constitute
Intellectual Property or Other Intellectual Property, all
books, records, files and databases (including employee
files relating to any Transferred Employees (as defined
below), and all client files and databases), documents,
correspondence, lists (including client lists),
engineering drawings or specifications, advertising and
promotional materials, studies, reports and other printed
or written materials in whatever format, written,
electronic or otherwise, relating to the items listed in
clauses (i) through (iii) above, in each case, to the
extent used in the operation of the Acquired Business; and
(x) all goodwill of such Seller relating to the Acquired
Business or the Acquired Assets.
(b) Notwithstanding the provisions of Section 1.1(a), the Acquired
Assets shall not include the following assets (collectively, the "Excluded
Assets"):
(i) the corporate charter, qualifications to conduct business
as a foreign corporation, arrangements with registered
agents relating to foreign qualifications, taxpayer and
other identification numbers, seals, minute books, stock
transfer books and other documents relating to the
organization and existence of the Sellers;
(ii) any of the rights of the Sellers under this Agreement or
the Ancillary Agreements (for purposes of this Agreement,
"Ancillary Agreements" shall mean the ▇▇▇▇ of sale in the
form attached hereto as EXHIBIT A (the "▇▇▇▇ of Sale"), the
instrument of assumption in the form attached hereto as
EXHIBIT B (the "Instrument of Assumption"), that certain
Deposit Escrow Agreement dated November 19, 2001, by and
among L&H, Buyer and Wilmington Trust Company, as escrow
agent (the "Deposit Agreement"), the promissory note in the
form attached hereto as EXHIBIT E and any other agreement
entered into by the Parties hereto in connection with this
Agreement) and other instruments referred to in Sections
1.5(b)(v) and (vi));
(iii) any avoidance actions of the Bankruptcy Sellers' bankruptcy
estate under the Bankruptcy Codes, but excluding any rights
in or to any
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of the Acquired Assets or Assigned Contracts and any
rights necessary for the Buyer to avoid losing the benefit
of any Acquired Asset or Assigned Contract;
(iv) any and all capital stock owned by any Seller in any of
its Subsidiaries (as defined in Section 2.3);
(v) any item of Intellectual Property or Other Intellectual
Property that the Buyer identifies in writing to L&H prior
to the Closing that the Buyer does not want included as
"Acquired Intellectual Property", it being understood that
such items shall not include the Technology Licenses (as
defined in Section 2.4(b)) (the "Excluded Intellectual
Property");
(vi) any contracts, agreements, instruments or licenses
identified in Schedule 1.1(b)(vi) and any other contracts,
agreements, instruments or licenses, if any, relating to
the Acquired Business that the Buyer identifies in writing
to L&H prior to Closing that the Buyer desires to exclude
from the Assigned Contracts, which exclusion shall not
include the Technology Licenses (any such excluded
contracts (the "Excluded Contracts") (the Schedule of
Assigned Contracts (as defined in Section 1.2) shall be
amended at Closing to delete such Excluded Contracts);
(vii) unless otherwise expressly provided herein, all originals
and copies of the items set forth in Section 1.1(a)(ix)
above to the extent they relate solely to the Excluded
Assets or the Retained Liabilities (as defined in Section
1.3) or, except in the case of files relating to the
Acquired Intellectual Property, are the subject of
attorney-client privilege between a Seller and its
attorneys (such Seller specifically reserving and not
waiving any and all such attorney-client privileges);
(viii) cash and cash equivalents, except as provided in Section
1.1(a)(viii);
(ix) the items listed in Schedule 1.1(b)(ix);
(x) any rights to the names listed on Schedule 1.1(b)(x);
(xi) any tax refunds to the extent that they relate to any
period or portion of any period prior to the Closing Date
(as defined in Section 1.5(a)); and
(xii) unless otherwise expressly provided, all assets and
property comprising the Non-Purchased Business.
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1.2 ASSUMPTION OF LIABILITIES. Upon and subject to the terms and conditions
of this Agreement, the Buyer shall assume, become responsible for, and discharge
when due, from and after the Closing only the following liabilities (the
"Assumed Liabilities"):
(a) all obligations of the Sellers under the Assigned Contracts that
accrue and are required to be performed from and after the Closing, provided
that SCHEDULE 1.2(A) attached hereto identifying each Assigned Contract may be
amended (i) from time to time by the Seller prior to Closing solely to add
contracts related to the Acquired Business to such schedule and (ii) from time
to time by the Buyer, in its sole discretion prior to Closing, to designate any
Assigned Contracts as an Excluded Contract, which designations shall not include
Technology Licenses (as defined on Section 2.4(b))(as such schedule is so
amended, the "Schedule of Assigned Contracts") and no liabilities arising under
any such Excluded Contract shall be assumed by the Buyer; and
(b) all obligations arising from the ownership and operation of the
Acquired Business and the Acquired Assets from and after the Closing Date.
1.3 RETAINED LIABILITIES.
(a) The Buyer shall not assume or otherwise become responsible for,
and the Sellers shall remain liable for all Retained Liabilities. For purposes
of this Agreement, the term "Retained Liabilities" shall mean any and all
liabilities or obligations (whether known or unknown, whether absolute or
contingent, whether liquidated or unliquidated, whether due or to become due,
and whether claims with respect thereto are asserted before or after the
Closing) of the Sellers or any of their respective Subsidiaries which are not
Assumed Liabilities, including without limitation:
(i) all liabilities and obligations of any Seller or its
Subsidiaries, any of its affiliates or any predecessor
employer of any current, retired, former or inactive
employee of any Seller or its Subsidiaries, any of its
affiliates or any predecessor employer, under any employee
benefit plans, incentive compensation plans, bonus plans,
pension and retirement plans, vacation plans, sabbatical
plans, profit- sharing plans (including any profit-sharing
plan with a cash-or- deferred arrangement) share purchase
and option plans, savings and similar plans, medical,
dental, travel, accident, life, disability and other
insurance and other plans or arrangements, whether written
or oral and whether "qualified" or "non-qualified";
(ii) all liabilities and obligations of any Seller or any of
their respective Subsidiaries for, on account of, or
arising from, (A) any violation of Environmental Laws (as
defined below); (B) the release of any Materials of
Environmental Concern (as defined below) into the
environment; and (C) any pending or threatened civil or
criminal litigation, written notice of violation, formal
administrative
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proceeding, or investigation, inquiry or information
request by any Governmental Entity relating to any
Environmental Law involving the Acquired Business, the
Acquired Assets or any Seller or any of its Subsidiaries.
For purposes of this Agreement, "Environmental Laws" means
any foreign, federal, state or local law, statute, rule,
regulation, judgment, order, injunction, decree,
arbitration award, agency requirement, license, permit or
approval or the common law relating to the environment or
occupational health and safety, including any statute,
regulation, administrative decision or order pertaining to
(1) treatment, storage, disposal, generation and
transportation of industrial, toxic or hazardous materials
or substances or solid or hazardous waste; (2) air, water
and noise pollution; (3) groundwater and soil
contamination; (4) the release or threatened release into
the environment of industrial, toxic or hazardous materials
or substances, or solid or hazardous waste, including
emissions, discharges, injections, spills, escapes or
dumping of pollutants, contaminants or chemicals; (5) the
protection of wild life, marine life and wetlands,
including all endangered and threatened species; (6)
storage tanks, vessels, containers, abandoned or discarded
barrels and other closed receptacles; (7) health and safety
of employees and other persons; and (8) manufacturing,
processing, using, distributing, treating, storing,
disposing, transporting or handling of materials regulated
under any law as pollutants, contaminants, toxic or
hazardous materials or substances or oil or petroleum
products or solid or hazardous waste. As used above, the
terms "release" and "environment" shall have the meaning
set forth in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended
("CERCLA"); and "Materials of Environmental Concern" shall
mean any chemicals, pollutants, contaminants, hazardous
substances (as such term is defined under CERCLA), solid
wastes and hazardous wastes (as such terms are defined
under the Resource Conservation and Recovery Act, as
amended), toxic materials, oil or petroleum and petroleum
products, asbestos, radon, mold, polychlorinated biphenyls
or any other materials subject to regulation under any
Environmental Law;
(iii) except as provided in Section 4.11, all liabilities and
obligations of any Seller for, or relating to, any Taxes
(as defined in Section 2.6(c)) for any periods (or
portions thereof) prior to Closing;
(iv) all liabilities and obligations of any Seller for, or
relating to, any Permits to the extent such liabilities
accrued prior to Closing;
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(v) except as provide in Section 4.9, all liabilities and
obligations of any Seller for, or relating to, such
Seller's employees (including, without limitation, any
liability relating to employee wages, benefits and related
taxes and any and all severance benefits or obligations or
other restructuring costs), incurred as a result of the
transactions contemplated by this Agreement, including all
Required Severance Payments (as defined in Section 4.9(d))
(vi) all liabilities and obligations of any Seller for any
broker's or finder's commission, fee or similar
compensation relating to the transactions contemplated by
this Agreement;
(vii) all liabilities and obligations of each of the Sellers for
repair, replacement or return of products sold prior to
Closing and all marketing discretionary funds, price
protection or other credits provided prior to the Closing
pursuant to an Assigned Contract (the Buyer agrees that it
will not induce or encourage customers to swap out like
for like inventory); provided, however, that Buyer will
assume responsibility for marketing discretionary funds
and other valid credits to the extent, and only to the
extent, of the amount provided on Schedule 1.1(a)(vii),
Accounts Receivable; and provided further that in no event
will Buyer be responsible for any amount of marketing
discretionary funds or other valid credits on any Assigned
Contract that exceeds the Acquired Receivable due from
that Assigned Contract as of the Closing Date; and
(viii) all liabilities of each of the Sellers arising out of any
claim, suit, action, arbitration, proceeding,
investigation or other similar matter relating to the
ownership of the Acquired Assets or the operation of the
Acquired Business prior to the Closing.
(b) With respect to the Bankruptcy Sellers, the Retained Liabilities
shall constitute claims and alleged claims in the Bankruptcy Cases; PROVIDED,
HOWEVER, that nothing herein shall grant or create any rights in favor of the
holders of Retained Liabilities or create any priority to right of payment. It
is expressly understood and agreed that the Parties intend that the Buyer shall
not be considered to be a successor to any Seller by reason of any theory of law
or equity and that the Buyer shall have no liability except as expressly
provided in this Agreement for any liability of any Seller or any of their
respective Subsidiaries.
1.4 PURCHASE PRICE.
(a) The aggregate purchase price to be paid by the Buyer for the
Acquired Assets (the "Aggregate Purchase Price") shall consist of
(i) an amount equal to U.S. $10,000,000 (the "Closing Cash
Purchase Price");
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(ii) The Buyer's promissory note in the original principal
amount of U.S. $3,500,000 in the form attached as Exhibit
E (the "Promissory Note", together with the Closing Cash
Purchase Price, the "Cash Purchase Price");
(iii) 7,400,000 shares of common stock, U.S. $0.001 par value
per share, of the Buyer (the "Shares") (As of November 26,
2001, the Shares had a value of U.S. $26,048,000 based on
a closing price of U.S. $3.52 per share.); and
(iv) the assumption by the Buyer at Closing of the Assumed
Liabilities.
(b) The Closing Cash Purchase Price, the Shares and the Promissory
Note shall be allocated among the Sellers in accordance with the allocation to
be filed by the Bankruptcy Sellers with the U.S. Bankruptcy Court prior to the
hearing for the Approval Order (as defined in Section 4.3(a)) (such allocation
in the form approved by the U.S. Bankruptcy Court at the Approval Hearing, the
"Schedule of Allocation Among Sellers"), provided that such allocation shall be
subject to further order of the U.S. Bankruptcy Court and shall be further
allocated among the Acquired Assets in the manner set forth in Section 4.10.
1.5 THE CLOSING.
(a) The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at a location as may be mutually agreed upon by
the Buyer and L&H, commencing at 9:00 a.m. Eastern Standard Time on the first
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(the "Closing Date").
(b) At the Closing:
(i) the Sellers shall deliver to the Buyer the various
certificates, instruments and documents referred to in
Section 5.1;
(ii) the Buyer shall deliver to the Sellers the various
certificates, instruments and documents referred to in
Section 5.2;
(iii) L&H shall receive the Good Faith Deposit (as defined in
the Deposit Agreement) pursuant to the terms of the
Deposit Agreement and the Buyer shall pay to L&H the
Closing Cash Purchase Price less the Good Faith Deposit in
immediately available funds by wire transfer to an account
or accounts to be designated by L&H and issue to L&H the
Shares and the Promissory Note and thereafter, L&H shall
allocate the Closing Cash Purchase Price, the Shares and
the Promissory Note in accordance with the Schedule of
Allocation Among Sellers;
9
(iv) RESERVED;
(v) or as soon as practicable after the Closing, the Sellers
shall execute and deliver to the Buyer such instruments of
conveyance, with respect to the Acquired Intellectual
Property, in forms suitable for filing with the
appropriate Governmental Entity;
(vi) the Sellers shall execute and deliver to the Buyer the
▇▇▇▇ of Sale and such other instruments of conveyance as
the Buyer may reasonably request in order to effect the
sale, transfer, conveyance and assignment to the Buyer of
all of Sellers' right, title and interest in and to the
Acquired Assets and the Buyer shall issue to L&H an
invoice for the sale of those of the Acquired Assets that
are sold by L&H, in compliance with Belgian law;
(vii) the Buyer shall execute and deliver to the Sellers the
Instrument of Assumption and such other instruments as the
Sellers may reasonably request in order to effect the
assumption by the Buyer of the Assumed Liabilities;
(viii) the Bankruptcy Sellers shall deliver or cause to be
delivered a copy of the Approval Order, entered by the
U.S. Bankruptcy Court approving this Agreement and the
consummation of the transactions contemplated hereby;
(ix) the Bankruptcy Sellers shall deliver a certificate, as of
a date not earlier than the eleventh day following the
entry of the Approval Order or if the Approval Order
includes a waiver of the stay provided for in U.S.
Bankruptcy Rules of Procedure 6004(g) and 6004(d) a
certificate as of the Closing Date of the Clerk of the
U.S. Bankruptcy Court certifying as to the absence of a
stay pending an appeal with respect to the Approval Order
(as defined in Section 4.3(a)), or if certificates to
such effect are not provided by such Clerk, then a
certified copy of the court docket for the U.S. Bankruptcy
Case establishing the absence of any such stay as of the
Closing Date;
(x) L&H shall deliver proper evidence that this Agreement has
been approved and authorized by the Belgian Bankruptcy
Authorities (the "Belgian Bankruptcy Approval");
(xi) or as soon as practicable after the Closing, the Sellers
shall deliver, and to the extent required by Buyer, shall
cause their respective Subsidiaries to deliver, to the
Buyer patent, trademark, service ▇▇▇▇, service names,
tradenames, domain name and/or copyright
10
assignments relating to the Acquired Intellectual Property
duly executed by the Sellers and/or their respective
Subsidiaries and/or, if applicable, any party to which a
security interest was granted or assignment made with
respect to the foregoing providing for the assignment and
transfer to the Buyer of all of such entity's right, title
and interest in and to all such patents, copyrights,
trademarks, service marks, service names, tradenames, d
omain names or any applications therefor and any other
Acquired Intellectual Property, in form and substance
reasonably acceptable to the Buyer and any and all files,
applications, assignments or other documents relating to
the prosecution or maintenance of any Acquired
Intellectual Property;
(xii) the Sellers shall deliver to the Buyer terminations of all
Encumbrances which are of record with respect to the
Acquired Assets in forms suitable for filing with the
appropriate Governmental Entities;
(xiii) the Sellers shall deliver to the Buyer, or otherwise put
the Buyer in control of, all of the Acquired Assets of a
tangible nature; and
(xiv) the Buyer and the Sellers shall execute and deliver to
each other cross-receipts and such other instruments,
documents or agreements, in form and substance reasonably
acceptable to the Buyer and the Sellers, as may be
necessary to effect and evidence the transactions
contemplated by this Agreement.
1.6 ASSIGNED CONTRACTS. The Sellers shall be liable for all costs to cure
any default under the Assigned Contracts that existed on or prior to the Closing
Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, severally, and not jointly, represents and warrants to the
Buyer that the statements contained in this Article II are true and correct,
except as set forth in the disclosure schedule attached hereto (the "Disclosure
Schedule"). Representations and warranties contained in this Article II that are
made with respect to the Bankruptcy Cases are made only by L&H and Holdings, as
applicable. The Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
II, and the disclosures in any section of the Disclosure Schedule shall qualify
(i) the corresponding section in this Article II and (ii) such other sections in
this Article II only to the extent that it is reasonably apparent from a reading
of such disclosure that it also qualifies or applies to such other sections.
2.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER.
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(a) Each Seller is an entity duly organized and validly existing under
the laws of its jurisdiction of incorporation as set forth on SECTION 2.1 of the
Disclosure Schedule. If applicable, each Seller is in corporate and tax good
standing in its jurisdiction of incorporation and is duly qualified to conduct
its business and is in corporate and tax good standing under the laws of each
jurisdiction in which the nature of the Acquired Business or the ownership or
leasing of the Acquired Assets requires such qualification except for
jurisdictions where the failure to so qualify would not have a Seller Material
Adverse Effect. For purposes of this Agreement, "Seller Material Adverse Effect"
means a material adverse effect, individually or in the aggregate, on the
business, financial condition or results of operations of the Acquired Business
or the condition or value of the Acquired Assets taken as a whole, provided,
however, that for purposes of this Agreement, (i) conditions or events generally
adversely affecting the speech recognition or speech synthesis industry or (ii)
adverse changes in economic, regulatory or political conditions generally in any
country where the Sellers operate the Acquired Business, in each case that do
not materially disproportionately affect the Acquired Business, shall not be
taken into account in determining whether there has been or would be a Seller
Material Adverse Effect. Each Seller has all requisite corporate power and
authority to carry on the business in which it is engaged and to own and use the
properties owned and used by it, including without limitation the Acquired
Assets.
2.2 AUTHORITY. Subject in the case of the Bankruptcy Sellers to the
Approval Order and the Belgian Bankruptcy Approval, (a) each Seller has all
requisite corporate power and authority to execute and deliver this Agreement
and the Ancillary Agreements to which it is a party and to perform its
obligations hereunder and thereunder, (b) this Agreement has been duly and
validly executed and delivered by each Seller and constitutes a valid and
binding obligation of each Seller, enforceable against each Seller in accordance
with its terms and (c) the Ancillary Agreements to which it is a party, when
delivered by each Seller at Closing, will constitute valid and binding
obligations of each Seller, enforceable against each Seller in accordance with
its respective terms. The execution and delivery by each Seller of this
Agreement and the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of each
Seller.
2.3 NON-CONTRAVENTION. Subject in the case of the Bankruptcy Sellers to the
Approval Order (as defined in Section 4.3(a)) and the Belgian Bankruptcy
Approval, neither the execution and delivery of this Agreement or the Ancillary
Agreements to which any Seller is a party, nor the consummation by any Seller of
the transactions contemplated hereby or thereby, will (a) conflict with or
violate any provision of any Seller's charter, by-laws or other corporate
organizational documents, (b) require on the part of any Seller or any
corporation with respect to which any Seller, directly or indirectly, has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors (a "Subsidiary"), any filing with, or any permit,
authorization, waiver, consent or approval of any Governmental Entity other than
any filings or notices required solely as a result of the legal or regulatory
status of the Buyer, (c) violate in any material respect any order, writ,
injunction, decree, statute, rule or regulation applicable to any Seller, the
Acquired Assets or the Acquired Business or any of its other properties or
assets, (d) conflict with, result in a breach of, constitute (with or without
due notice or lapse of time or both)
12
a material default under, result in the acceleration of obligations under,
create in any party the right to terminate, modify or cancel, or require any
notice, consent or waiver under any contract or instrument, including any
Assigned Contract (other than any Assigned Contract pursuant to which any Seller
licenses in commercial off-the-shelf software), to which any Seller or any of
its Subsidiaries is a party or by which any Seller or any of its Subsidiaries is
bound or to which the Acquired Assets or the Acquired Business is subject, or
(e) result in the imposition of any Encumbrance upon any Acquired Assets.
2.4 OWNERSHIP AND SUFFICIENCY OF ASSETS.
(a) Subject in the case of the Bankruptcy Sellers to the Approval
Order and the Belgian Bankruptcy Approval, each Seller holds good and marketable
title to the Acquired Assets and has the complete and unrestricted power and the
unqualified right to sell, assign and transfer the Acquired Assets to the Buyer.
Each Seller owns all of the Acquired Assets free and clear of all Encumbrances
except for the Encumbrances set forth on SECTION 2.4 of the Disclosure Schedule
that neither individually nor in the aggregate would have a Seller Material
Adverse Effect. Each Non-Bankruptcy Seller represents and warrants that upon the
consummation of the transactions contemplated by this Agreement, the Buyer will
become the true and lawful owner of, and will receive good and marketable title
to, the Acquired Assets, free and clear of all Encumbrances other than Permitted
Encumbrances. For purposes of this Agreement, "Permitted Encumbrances" shall
mean (i) any statutory Encumbrance arising in the ordinary course of business by
operation of law with respect to any liability that is not yet due or delinquent
and (ii) any minor imperfection of title or similar Encumbrance which, in each
case, would not individually or in the aggregate, constitute a Seller Material
Adverse Effect.
(b) The Acquired Assets and the licenses to be granted to Buyer, as
more specifically set forth on ANNEX B attached hereto are sufficient for the
conduct of the Acquired Business as currently conducted and as currently
proposed to be conducted by the Sellers. (The aforementioned licenses, together
with the licenses to be granted by Buyer, as more specifically set forth on
ANNEX B attached hereto, the "Technology Licenses.")
(c) Each tangible Acquired Asset is free from material defects, has
been maintained in accordance with normal industry practice, is in good
operating condition and repair (subject to normal wear and tear) and is suitable
for the purposes for which it is currently used.
2.5 ASSIGNED CONTRACTS.
(a) Except for Excluded Contracts, Schedule 1.2(a) of the Disclosure
Schedule sets forth a list of all material, and substantially all other,
contracts, agreements, understandings, instruments or arrangements, whether oral
or written, to which each Seller or any of its Subsidiaries is a party relating
to the Acquired Assets or the Acquired Business, including, without limitation,
all executory contracts within the meaning of U.S. Bankruptcy Code Section 365,
all purchase and sales orders, all licenses and sublicenses, all leases, all
indemnification and financing agreements, all original equipment manufacturer
agreements, distribution agreements, warranty obligations (except warranty
obligations entered in the
13
ordinary course of business) volume or quantity purchase agreement or other
similar agreement relating to the Acquired Assets or Acquired Business or joint
marketing, joint development or joint venture contract or arrangement or any
other agreement relating to the Acquired Assets or Acquired Business. Schedule
1.2(a) of the Disclosure Schedule identifies under the heading "Material
Contracts" all Assigned Contracts relating to licensees that either paid to the
Sellers more than U.S. $50,000 in the first three quarters of 2001 or (ii) have
committed more than U.S. $50,000 in future payments to the Sellers through
December 31, 2002 (collectively, the "Material Contracts"). In addition,
Schedule 1.2(a) of the Disclosure Schedule identifies, with respect to each such
contract, agreement, understanding, instrument or arrangement, (y) which Seller
is a party thereto and (z) the applicable Seller product licensed thereunder.
(b) Prior to the Closing the Sellers shall have made available to the
Buyer complete and accurate copies of the Assigned Contracts listed on SCHEDULE
1.2(a). All Assigned Contracts are in full force and effect and no Seller is in
material breach or violation of, or default under, any Assigned Contract (other
than Debtor Assigned Contracts), and no event has occurred, is pending or, to
the knowledge of the Sellers, is threatened, which, after the giving of notice,
with lapse of time, or otherwise, would constitute a material breach or default
by any Seller or any Subsidiary of any Assigned Contract.
(c) To the knowledge of the Sellers (i) no party to any Material
Contract intends to cancel, withdraw, modify or amend such Material Contract and
(ii) no party to any Assigned Contract (other than Material Contracts) intends
to cancel, withdraw, modify or amend any such Assigned Contract, if such
cancellation, withdraw, modification or amendment would, individually or in the
aggregate, constitute a Seller Material Adverse Effect. Any cure or compensation
due to any party to the Debtor Assigned Contracts or any other individual or
entity as a result of the assumption and assignment of the Debtor Assigned
Contracts to the Buyer pursuant to U.S. Bankruptcy Code Section 365(b), will be
paid by the applicable Bankruptcy Seller prior to the Closing. By the Closing,
the Bankruptcy Sellers will have obtained an order of the U.S. Bankruptcy Court
authorizing the Bankruptcy Sellers to assign the Debtor Assigned Contacts to the
Buyer pursuant to U.S. Bankruptcy Code Section 365.
(d) No Seller has granted any third party any rights in or to any of
the Assigned Contracts. Subject in the case of the Bankruptcy Sellers to the
Approval Order and the Belgian Bankruptcy Approval, each Assigned Contract is
assignable by the Sellers to the Buyer without the consent or approval of any
party and will continue to be legal, valid, binding and enforceable and in full
force and effect immediately following the Closing in accordance with the terms
thereof as in effect prior to the Closing.
(e) SECTION 2.5(e) of the Disclosure Schedule sets forth all contracts
to which any Seller or any Subsidiary of any Seller is a party that has or could
reasonably be expected to have the effect of prohibiting or materially impairing
the conduct of the Acquired Business or the use of any of the Acquired Assets by
the Buyer after the Closing, and no Assigned Contract will materially restrict
the Buyer, from and after the Closing, from selling, licensing or otherwise
distributing any technology or products, or providing services, to customers or
potential customers or any class of customers, in any geographic area, during
any period of time.
14
(f) No Assigned Contract provides any third party with the right to
receive a license or any other right to intellectual property of the Buyer or
any affiliate of the Buyer (other than to the Acquired Intellectual Property to
the extent such license or other rights are described on SECTION 2.7(c) of the
Disclosure Schedule) following the Closing as a result of the consummation of
the transactions contemplated by this Agreement.
2.6 TAXES.
(a) Each of the Sellers has timely filed all Tax Returns (as defined
below) that it was required to file, and all such Tax Returns were complete and
accurate in all material respects. No Seller is or has ever been a member of a
group of corporations with which it has filed (or been required to file)
consolidated, combined or unitary Tax Returns, other than a group of which only
the Sellers are or were members. Each group of corporations with which each
Seller has filed (or was required to file) consolidated, combined, unitary or
similar Tax Returns (an "Affiliated Group") has filed all Tax Returns that it
was required to file with respect to any period in which such Seller was a
member of such Affiliated Group (an "Affiliated Period"), and all such Tax
Returns were complete and accurate in all materials respects. Each Seller has
paid on a timely basis all Taxes that were due and payable and each member of an
Affiliated Group has paid all Taxes that were due and payable with respect to
all Affiliated Periods. All Taxes owed by any of the Sellers (whether or not
shown on any Tax Return) have been paid. None of the Sellers currently is the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by an authority in a jurisdiction where any of the
Sellers does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction. All Taxes that the Sellers are or were required by law to
withhold or collect have been duly withheld or collected and, to the extent
required, have been timely paid to the proper taxing authority. None of the
Sellers has waived or extended any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency.
(b) The Acquired Assets and the Acquired Business will be transferred
free and clear of any Encumbrance relating to or in connection with Taxes except
for Taxes assessed or incurred pursuant to Article 11 of the Belgian Value Added
Tax Code, if applicable, in connection with the sale of the Acquired Assets
(such value added taxes are referred to herein as the "Belgian VAT Taxes"). All
Taxes relating to the Acquired Assets have been or will be paid by the Sellers
for all periods (or portions thereof) prior to the Closing, and Encumbrances for
any such Taxes as have not been paid will attach to the proceeds of the sale
contemplated by this Agreement. The Sellers and any other person required to
file Tax Returns relating to the Acquired Assets and the Acquired Business have
duly and timely filed (or will file prior to the Closing) all Tax Returns
relating to the Acquired Assets and the Acquired Business required to be filed
prior to such date, and all such Tax Returns and reports are true, correct, and
complete in all material respects. There are no pending or threatened
proceedings with respect to Taxes relating to the Acquired Assets or the
Acquired Business, and there are no outstanding waivers or extensions of
statutes of limitations with respect to assessments of Taxes relating to the
Acquired Assets or the Acquired Business.
(c) For purposes of this Agreement, "Taxes" shall mean all taxes,
charges, fees, levies or other similar assessments or liabilities, including
income, gross receipts, ad
15
valorem, premium, value-added, excise, real property, personal property, sales,
use, transfer, withholding, employment, unemployment, insurance, social
security, business license, business organization, environmental, workers
compensation, payroll, profits, license, lease, service, service use, severance,
stamp, occupation, windfall profits, customs, duties, franchise and other taxes
imposed by the United States of America or any state, local or foreign
government (including without limitation, The Kingdom of Belgium), or any agency
thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any tax or any
contest or dispute thereof. For purposes of this Agreement, "Tax Returns" means
all reports, returns, declarations, statements or other information required to
be supplied to a taxing authority in connection with Taxes.
2.7 INTELLECTUAL PROPERTY.
(a) SECTION 2.7(a) of the Disclosure Schedule contains a true and
complete list, arranged according to the identity of the applicable Seller, of
all Intellectual Property and material items of Other Intellectual Property. For
purposes of this Agreement:
(i) "Intellectual Property" means (A) the items listed in ANNEX
B attached hereto and any intangible and intellectual
property rights contained in those items, including, without
limitation, copyright and trade secret rights, (B) any
patents, patent applications, provisional patent
applications, patent disclosures, and all related
continuation, continuation-in-part, divisional, reissue,
re-examination, utility model, certificate of invention and
design patents, patent application, registrations and
applications for registrations listed in ANNEX B, and (C)
any trademarks, service marks, trade dress, logos,
tradenames, domain names and corporate names and
registrations and applications for registration thereof and
copyright registrations listed in ANNEX B ; and (D) any mask
works and registrations and applications for registration
thereof listed in ANNEX B; and
(ii) "Other Intellectual Property" means all intangible and
intellectual property rights used in or being developed for
use in the Acquired Business (excluding Intellectual
Property, as defined above), including, without limitation,
inventions, specifications, technical manuals and data,
drawings, product information and data, know-how,
development work-in-progress, modifications, enhancements,
designs, concepts, techniques, methods, ideas, flow charts,
coding sheets, notes, test routine, prototypes developed in
connection with any of the foregoing, design documentation,
methodologies, processes, design information, technology,
formulae, routines, engineering specifications, engineering
work papers, and other works of authorship and proprietary
information and materials of any kind and all other
information similar in nature to the items
16
listed in this clause (ii) (except, in each case, any
intangible or intellectual property listed on ANNEX C
attached hereto).
(b) The Sellers own or have the right to use all Intellectual Property
in the operation of the Acquired Business as currently conducted and as
currently proposed to be conducted by the Sellers. Upon the consummation of the
transactions contemplated by this Agreement, each item of Intellectual Property
shall be owned by the Buyer or licensed to the Buyer, following the Closing on
substantially identical terms and conditions as it was used by the Sellers
immediately prior to the Closing. Each Seller has taken reasonable measures to
protect the proprietary nature of the Intellectual Property and to maintain in
confidence all trade secrets and confidential information, that it owns or uses
in connection with the Acquired Business. Other than licenses set forth on
SCHEDULE 1.2(a) and licenses granted in connection with the sale of commercial
off-the-shelf software, (i) no Seller has granted to any third-party and no
other person or entity has, any rights to any of the Intellectual Property; and
(ii) to the knowledge of the Sellers, no other person or entity is infringing,
violating or misappropriating any of the Intellectual Property.
(c) Section 2.7(c) of the Disclosure Schedule under the heading
"Material Third Party Contracts" identifies each license or other agreement or
type of license or other agreement from a third party which is necessary for the
conduct of the Acquired Business (the "Material Third Party Contracts").
(d) To the knowledge of the Sellers, none of the Intellectual Property
or the marketing, distribution, provision or use thereof, infringes or violates,
or constitutes a misappropriation of, any intellectual property rights of any
person or entity. Section 2.7(d) of the Disclosure Schedule lists any pending or
unresolved complaint, claim or notice, or written threat thereof, received by
any Seller or any Subsidiary alleging any such infringement, violation or
misappropriation; and the Sellers have provided to the Buyer complete and
accurate copies of all written documentation in the possession of each Seller or
any Subsidiary relating to any such complaint, claim, notice or threat. Each
Seller has made available to the Buyer complete and accurate copies of all
written documentation in its possession relating to claims or disputes known to
the Sellers concerning any Intellectual Property, other than documentation the
production of which would result in a waiver or violation of either the
attorney-client privilege or work product protections.
(e) Except as set forth on Schedule 2.7(e) of the Disclosure Schedule,
no Seller nor any Subsidiary has disclosed any source code or any other
confidential information which is a part of the Intellectual Property to any
person or entity other than employees, consultants and advisors of the Sellers
who have executed and delivered to the Sellers appropriate confidentiality
agreements agreeing to keep any such information confidential. No Seller nor any
Subsidiary has received any third party demands for source code pursuant to an
escrow agreement or any other agreement, and to the knowledge of the Sellers, no
third party has threatened against any Seller or Subsidiary to bring any action,
suit or proceeding, or other type of claim to demand any source code relating to
the Intellectual Property.
17
(f) Each Seller has received from all employees, consultants, advisors
and contractors who may assert or have asserted any right in or claim to any
Intellectual Property as an inventor, author or otherwise an assignment form,
assigning such person's or entity's rights in the Intellectual Property to such
Seller, as appropriate, which assignment forms have been filed with the
appropriate patent, trademark or other office.
(g) Each Seller has, in all material respects, paid all maintenance
fees, annuities, and similar fees, and has filed all appropriate renewals,
declarations, and other papers to keep all patents, patent applications,
trademark registrations and trademark applications in force to the extent any of
the foregoing relate to, or are used in, the Acquired Business.
2.8 LITIGATION. Except for the Bankruptcy Cases, there is no action, suit,
proceeding, claim, arbitration or investigation before any Governmental Entity
or before any arbitrator which is pending or, to the knowledge of the Sellers,
has been threatened against any Seller or any Subsidiary (a) relating to or
affecting the Acquired Assets or the Acquired Business or (b) which could
reasonably be expected to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement.
2.9 WARRANTIES AND INDEMNITIES. SECTION 2.9 of the Disclosure Schedule sets
forth (i) a list of all warranty and indemnity claims outside the ordinary
course of business currently pending against the Sellers with respect to the
Acquired Assets and (ii) a statement of the number of warranty and indemnity
claims (whether or not in the ordinary course of business) and the aggregate
dollar value of all such claims pending against the Sellers with respect to the
Acquired Assets.
2.10 EMPLOYEES.
(a) On or prior to the date of this Agreement, the Sellers have
provided to the Buyer a complete and accurate list of each current and former
employee, advisor, consultant and contractor of any Seller that has not signed
one or more written agreements (together, a "Confidentiality Agreement") under
which such person or entity (i) is or was obligated to disclose and transfer to
the Sellers, without the receipt by such person or entity of any additional
value therefor (other than normal salary or fees for consulting services), all
inventions, copyrights, developments and discoveries which, during the period of
employment or engagement with or performance of services for any Seller, he, she
or it makes or made or conceives or conceived of, either solely or jointly with
others, that relate to any subject matter with which his, her or its work for
any Seller was concerned, or relate or related to or are or were connected with
the Acquired Assets or the Acquired Business, and (ii) is obligated to maintain
the confidentiality of proprietary information of the Acquired Business. The use
of confidential information relating to the Acquired Assets and the Acquired
Business by former employees of any Seller within the scope of their employment,
if any, by the Buyer, will not conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any of the terms,
conditions or provisions of, or constitute a default under, any agreement,
contract, arrangement or understanding (whether oral or written) under which any
Seller or any such employee is now obligated, and the Sellers expressly waive,
to the extent related to the Acquired Business or the Acquired Assets, any such
breach of a Confidentiality Agreement by any former
18
employee as may occur in the course of their employment by Buyer. No employee of
the Seller will, after giving effect to the transactions contemplated herein,
own or retain any rights in or to the Acquired Assets or the Acquired Business.
To the knowledge of the Sellers, (i) no employee is in violation of any
provision of a Confidentiality Agreement, and (ii) there has been no
unauthorized use, infringement, misappropriation or disclosure by any employee,
of any Acquired Intellectual Property, which could, individually or in the
aggregate, have a material adverse effect on the Acquired Intellectual Property.
(b) On or subsequent to October 24, 2001, but prior to the date
hereof, L&H dismissed all of its then current employees ("Recently Terminated
Employees").
(c) On or prior to the date of this Agreement, the Sellers have
provided to the Buyer a complete and accurate list of (i) all persons who have
been terminated by L&H since March 31, 2001, other than the Recently Terminated
Employees which were re-hired (the "Former Employees") and who have not executed
and delivered to L&H release agreements releasing any and all claims in
connection with or arising from such Former Employee's employment with or
termination from, L&H, or any predecessor of L&H and (ii) each Recently
Terminated Employee who was rehired by L&H pursuant to a contract, the
expiration of which is on or about December 15, 2001 ("Rehired Employees");
together with the Former Employees, the "Employees"), identifying, for each
Rehired Employee, his or her, total gross annual compensation (including
year-end bonus).
(d) Except to the extent provided in Section 4.9, the Buyer will not
be liable for (i) any payments due to a Non-Transferred Employee (as defined in
Section 4.9(b)) or (ii) any payments with respect to amounts that become due and
payable on or prior to the Closing Date to any Employee.
2.11 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been conducted without the intervention of
any person or entity acting on behalf of any Seller in such a manner as to give
rise to any claim against the Buyer for any broker's or finder's commission, fee
or similar compensation.
2.12 INSURANCE. All premiums due and payable under all insurance policies
and fidelity bonds relating to the Acquired Assets have been paid through the
Closing and each Seller is otherwise in material compliance with the terms of
such policies and bonds (or other policies and bonds providing substantially
similar insurance coverage).
2.13 RESERVED.
2.14 RESERVED.
2.15 RESERVED.
2.16 INVESTMENT REPRESENTATIONS.
(a) Each Seller is either:
19
(i) an "accredited investor" (as such term is defined in Rule
501 (a) promulgated under the Securities Act of 1933, as
amended (the "Securities Act")) or
(ii) NOT a "U.S. person" (as defined in Rule 902(k) promulgated
under the Securities Act) and is NOT acquiring the Shares
for the account or benefit of any U.S. person.
(b) No Seller is acquiring the Shares with a view to, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling the same in any manner that would violate the Securities
Act or that would cause the Buyer's issuance of the Shares to the Sellers
hereunder to be in violation of the Securities Act; and, except as contemplated
by this Agreement, the Ancillary Agreements and the exhibits and schedules
hereto and thereto, no Seller has any present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof in any manner that would violate the Securities Act or
that would cause the Buyer's issuance of the Shares to the Sellers hereunder to
be in violation of the Securities Act.
(c) Each Seller has carefully reviewed the representations concerning
the Buyer contained in this Agreement and has made detailed inquiry concerning
the Buyer, its business and its personnel; the officers of the Buyer have made
available to each Seller any and all written information which it has requested
and have answered to the satisfaction of each Seller all inquiries made by any
Seller; and each Seller has sufficient knowledge and experience in finance and
business that it is capable of evaluating the risks and merits of its investment
in the Buyer by virtue of its receipt of the Shares pursuant to this Agreement
and each Seller is able financially to bear the risks thereof.
2.17 RESERVED.
2.18 CERTAIN SEVERANCE COSTS. L&H represents that all obligations of the
Sellers to pay any severance or other similar amounts to employees other than
the Belgian Retained Employees (the "Non-Transferred Belgian Employees") shall
become prepetition claims in the Belgian Bankruptcy Case for which the Buyer
cannot be held liable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants (which representations and warranties
shall terminate as of the Closing) to the Sellers as follows:
3.1 ORGANIZATION. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware. The Buyer
has all requisite corporate
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power and authority to carry on the business in which it is engaged and to own
and use the properties owned and used by it.
3.2 AUTHORIZATION OF TRANSACTION. The Buyer has all requisite corporate
power and authority to execute and deliver this Agreement and the Ancillary
Agreements and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the Ancillary Agreements by the
Buyer and the performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby by the Buyer have been duly and
validly authorized by all necessary corporate action on the part of the Buyer.
This Agreement has been duly and validly executed and delivered by the Buyer and
constitutes a valid and binding obligation of the Buyer, enforceable against it
in accordance with its terms. The Ancillary Agreements, when delivered by the
Buyer at Closing, will constitute valid and binding obligations of the Buyer,
enforceable against the Buyer in accordance with their respective terms.
3.3 NON-CONTRAVENTION. Neither the execution and delivery of this Agreement
or the Ancillary Agreements by the Buyer, nor the consummation by the Buyer of
the transactions contemplated hereby or thereby, will (a) conflict with or
violate any provision of Buyer's certificate of incorporation or by-laws, each
as amended and/or restated to date, (b) require, on the part of Buyer or any
subsidiary of Buyer, any filing with, or any permit, authorization, waiver,
consent or approval of any Governmental Entity other than any filings or notices
required solely as a result of the legal or regulatory status of any Seller and
the filing of an additional listing notification with respect to the Shares with
the Nasdaq National Market, (c) violate in any material respect any order, writ,
injunction, decree, statute, rule or regulation applicable to Buyer or any of
its properties or assets, or (d) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a material
default under, result in the acceleration of obligations under, create in any
party the right to terminate, modify or cancel, or require any notice, consent
or waiver under, any contract or instrument to which the Buyer or any of its
subsidiaries is a party or by which the Buyer or any of its subsidiaries is
bound.
3.4 CAPITALIZATION. As of the date of this Agreement, the authorized
capital stock of the Buyer consists of 140,000,000 shares of common stock,
$0.001 par value per share ("Buyer Common Stock") and 40,000,000 shares of
preferred stock, $0.001 par value per share ("Buyer Preferred Stock"). As of
October 31, 2001, (i) 51,046,133 shares of the Buyer Common Stock were issued
and outstanding, of which 656,000 shares of the Buyer Common Stock were held in
the treasury of the Buyer, all of which were duly authorized, validly issued,
fully paid and nonassessable and free of statutory pre-emptive rights and (ii)
3,562,238 shares of Buyer Preferred Stock were issued and outstanding. As of the
date of this Agreement, other than options granted by Buyer under the Buyer's
option plans as described in the Buyer SEC Reports (as defined in Section 3.5),
there are no outstanding options to purchase Buyer Common Stock with respect to
the Buyer.
3.5 SEC REPORTS AND FINANCIAL STATEMENTS.
(a) The Buyer has made available to the Sellers a true and complete
copy of each form, report, schedule, registration statement, definitive proxy
statement and other
21
document (together with all amendments thereof and supplements thereto) filed by
Buyer or any of its Subsidiaries with the Securities Exchange Commission (the
"SEC") since December 31, 2000 (as such documents have since the time of their
filing been amended or supplemented, the "Buyer SEC Reports"), which are all the
documents (other than preliminary material) that Buyer and its Subsidiaries were
required to file with the SEC since such date. As of their respective dates, the
Buyer SEC Reports (i) complied as to form in all material respects with the
requirements of the Securities Act, or the Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder (the "Exchange Act"), as the
case may be, and (ii) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) The financial statements, including all related notes and
schedules, contained in Buyer's most recent Annual Report on Form 10-K and each
Buyer SEC Report, are complete and accurate in all material respects and fairly
present the consolidated financial position of the Buyer as of the dates
indicated, and the results of its operations and cash flows for the periods then
ended, in accordance with generally accepted accounting principles applied on a
consistent basis throughout the relevant period, except as may be noted therein,
and subject in the case of the Form 10-Q for the period ended September 30, 2001
to normal year-end adjustments.
3.6 SHARES. The Shares have been duly authorized and, when issued in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable, and free of pre-emptive rights.
3.7 LITIGATION. There is no action, suit, investigation or proceeding
pending against, or to the knowledge of the Buyer, threatened against or
affecting, Buyer before any Governmental Entity which in any manner challenges
or seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement and the Ancillary Agreements.
3.8 FINANCING. The Buyer has sufficient cash, available lines of credit or
other sources of immediately available funds to enable it to make payment of the
Cash Purchase Price and any other amounts to be paid by it hereunder and under
the Ancillary Agreements.
3.9 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been conducted without the intervention of
any person or entity acting on behalf of the Buyer in such a manner as to give
rise to any claim against the Sellers for any broker's or finder's commission,
fee or similar compensation.
ARTICLE IV
PRE-CLOSING COVENANTS
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4.1 COMMERCIALLY REASONABLE EFFORTS. Each Party shall use commercially
reasonable efforts, to take all actions and to do all things necessary, proper
or advisable to consummate the transactions contemplated by this Agreement.
4.2 NOTICES AND CONSENTS. The Buyer, on the one hand, and the Sellers, on
the other hand, shall use commercially reasonable efforts to obtain all such
waivers, permits, consents, approvals or other authorizations from third parties
and Governmental Entities, and to effect all such registrations, filings and
notices with or to third parties and Governmental Entities, as may be necessary
to be obtained and effected by the Buyer, on the one hand, and the Sellers on
the other hand, in order to permit the consummation of the transactions
contemplated by this Agreement, and permit the Buyer to hold and employ the
Acquired Assets following the Closing (including, without limitation in the case
of the Sellers, those listed in SECTION 2.3 of the Disclosure Schedule).
4.3 BANKRUPTCY COVENANTS.
(a) At the Approval Hearing, as defined in the Notice of Auction
Procedures, dated October 30, 2001, related to the Bankruptcy Cases, the
Bankruptcy Sellers shall use their respective commercially reasonable efforts to
obtain the entry of an order, which may be substantially in the form of the
Approval Order, authorizing the Bankruptcy Sellers to sell the Acquired Assets
to the Buyer, which form has been provided to and is reasonably satisfactory to
Buyer ("Approval Order") and to assign the Debtor Assigned Contracts to the
Buyer (the "Assignment Order"), which may be part of the Approval Order. The
applicable Bankruptcy Seller shall be responsible for the payment at or prior to
Closing of any amounts necessary to cure any defaults which exist on the Closing
Date under the Debtor Assigned Contracts, and the Buyer shall be responsible for
providing adequate assurance of its ability to perform the obligations of the
Bankruptcy Seller under the Debtor Assigned Contracts following the Closing. The
Buyer shall use its commercially reasonable efforts to assist the Bankruptcy
Sellers in obtaining the Approval Order and the Assignment Order, as may be
necessary, including without limitation, making officers and other principals of
the Buyer available for testimony before the U.S. Bankruptcy Court.
(b) From and after the date hereof, neither the Seller nor the Buyer
shall, and each Seller and the Buyer shall ensure that none of its respective
Subsidiaries shall, take any action or fail to take any action, which action or
failure to act would reasonably be expected to (i) prevent or impede the
consummation of the transactions contemplated by this Agreement in accordance
with the terms of this Agreement, or (ii) result in (A) the reversal, avoidance,
revocation, vacating or modification (in any manner which would reasonably be
expected to materially and adversely affect the Buyer's rights hereunder) or (B)
the entry of a stay pending appeal, in the cases of each of sub-clauses (A) or
(B) of this Section, with respect to the Approval Order or the Assignment Order
or the Provision Order issued by the Bankruptcy Court pursuant to 11 U.S.C.
ss.ss.105, 363 and 365, dated October 30, 2001, related to the U.S. Bankruptcy
Case (the "Provision Order").
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(c) As soon as practical after the entry of the Approval Order, L&H
shall seek to obtain the Belgian Bankruptcy Approval. The Buyer shall use its
commercially reasonable efforts to assist the Bankruptcy Sellers in obtaining
the Belgian Bankruptcy Approval, as may be necessary, including without
limitation, making officers and other principals of the Buyer available for
testimony before the Belgian Bankruptcy Authorities.
(d) The Bankruptcy Sellers shall promptly provide the Buyer with
drafts of all documents, motions, orders, filings or pleadings that the
Bankruptcy Sellers propose to file with the Bankruptcy Courts which relate to
the consummation or approval of this Agreement, the Ancillary Agreements, or any
provision herein or therein, and will provide the Buyer with reasonable
opportunity to review and approve such filings as reasonably practical. The
Bankruptcy Sellers shall also promptly (within 24 hours) provide the Buyer with
copies of all pleadings received by or served by or upon the Bankruptcy Sellers
in connection therewith or in connection with the Belgian Bankruptcy Approval
which have not otherwise been served on the Buyer.
4.4 OPERATION OF BUSINESS. Except as contemplated by this Agreement and to
the extent not inconsistent with the Bankruptcy Codes, the operation and
information requirements of the Office of United States Trustee (the "OIRR"),
and subject to any order or direction of the U.S. Bankruptcy Court or the
Belgian Bankruptcy Authorities, during the period from the date of this
Agreement to the Closing, the Sellers shall conduct the Acquired Business in the
ordinary course of business consistent with past practice and in compliance with
applicable laws and regulations, and to the extent consistent therewith so as to
preserve the current value and integrity of the Acquired Business and the
Acquired Assets, pay all post-petition taxes as they become due and payable,
maintain insurance on the Acquired Assets (in amounts and types consistent with
past practice), and use their respective reasonable best efforts to preserve
their relationships with customers, suppliers and others having business
dealings with them. Without limiting the generality of the foregoing, prior to
the Closing and subject to the requirements of the Bankruptcy Codes, the OIRR,
any orders entered by the U.S. Bankruptcy Court or the Belgian Bankruptcy
Authorities, no Seller shall, without the prior written consent of the Buyer:
(a) sell, assign, transfer, convey, lease, license, encumber or
dispose of any Acquired Assets except in the ordinary course of business;
(b) mortgage or pledge any of the Acquired Assets or subject any
Acquired Assets to any Encumbrance other than Permitted Encumbrances;
(c) take any action permitted by this Agreement that would result in
any of the representations and warranties of any Seller set forth in this
Agreement becoming untrue in any material respect; or
(d) agree in writing or otherwise to take any of the foregoing
actions.
4.5 FULL ACCESS AND CONFIDENTIALITY.
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(a) Each Seller shall, and shall cause each of its Subsidiaries to,
permit representatives of the Buyer to have full access (at all reasonable
times, and in a manner so as not to interfere with the normal business
operations of such Seller or its Subsidiaries) to all premises, properties,
financial and accounting records, contracts, other records and documents, and
personnel, solely to the extent that they relate to the Acquired Assets.
Notwithstanding the foregoing, the Buyer shall not have access to any employment
records prior to the Closing and following the date that is ten (10) days
following the entry of the Approval Order, shall have access to the performance
records, evaluation records and other such similar information contained in the
personnel records of the Transferred Employees to the maximum extent permitted
by law unless such access would (in the reasonable judgment of the applicable
Seller) subject the disclosing Seller to liability. At no time shall Seller
provide Buyer with access to any medical records of any Transferred Employee or
to any employment records of any Non-Transferred Employee (as defined below).
(b) Without limiting the general applicability of the Confidentiality
Agreement, dated as of November 5, 2001, by and between Buyer and L&H (the
"Confidentiality Agreement"), any information provided in connection with this
Agreement, the Ancillary Agreements or the transactions contemplated hereby or
thereby relating to the Sellers or the Acquired Assets will be treated as
"Evaluation Material" under the Confidentiality Agreement.
4.6 NOTICE OF BREACHES.
(a) The Sellers shall promptly deliver to the Buyer written notice of
any event or development that would (i) render any statement, representation or
warranty of any Seller in this Agreement (including exceptions set forth in the
Disclosure Schedule) inaccurate or incomplete in any material respect, or (ii)
constitute or result in a breach by any Seller of, or a failure by any Seller to
comply with, any agreement or covenant in this Agreement applicable to any
Seller. No such disclosure shall be deemed to avoid or cure any such
misrepresentation or breach.
(b) The Buyers shall promptly deliver to the Sellers written notice of
any event or development that would (i) render any statement, representation or
warranty of the Buyer in this Agreement inaccurate or incomplete in any material
respect, or (ii) constitute or result in a breach by the Buyer of, or a failure
by the Buyer to comply with, any agreement or covenant in this Agreement
applicable to the Buyer. No such disclosure shall be deemed to avoid or cure any
such misrepresentation or breach.
4.7 TRANSITION SERVICES. Buyer and Sellers will negotiate certain services
to be provided by Sellers to Buyer to facilitate the orderly transition of the
Acquired Business. The services to be provided will be mutually agreed upon
among the Buyer and Sellers and Sellers shall receive fair compensation
therefor. Entering into any agreement with respect to such transition shall not
be a condition of Closing for any Party.
4.8 RESERVED
4.9 EMPLOYEE MATTERS.
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(a) Following the execution of this Agreement, and continuing until
the earlier of the termination of this Agreement and ten (10) days following the
entry of the Approval Order, the Buyer shall have the right to approach and
solicit for employment commencing as of or after the Closing Date any employee
of the Sellers; and in connection therewith, the Sellers and the Buyer shall
cooperate to effect an orderly transition of any of such employees hired by the
Buyer. Each Seller hereby waives, with respect to the solicitation of employment
or employment by the Buyer of any employee of such Seller, any claims or rights
the Seller has against the Buyer or any such employee under any non-hire,
non-solicitation, non-competition, confidentiality or employment agreement or
any cause of action based on similar rights arising by contract, at common law
or by statute or regulation; provided, however, that none of the foregoing
waivers shall survive the termination of this Agreement, and provided further
that the foregoing waiver of any non-hire and non-solicitation provisions is
solely for the purpose of consummating the transactions contemplated by this
Agreement and shall not extend to any solicitation or hiring by Buyer after the
ten (10) days following the entry of the Approval Order. Each Seller hereby
assigns to the Buyer but only to the extent they relate to the Acquired Assets,
the right to enforce the provisions of any non-competition agreement between
such Seller and any Transferred Employee (as defined below) hired by Buyer and
any non-hire, non-solicitation, confidentiality, assignment of inventions or
similar agreement between such Seller and any Transferred Employee hired by
Buyer. Nothing in this Section 4.9 or any other agreement to which the Sellers
may be a party, if applicable, shall prevent or inhibit Buyer from soliciting
for employment, at any time, any Former Employee or any other former employee of
the Sellers other than L&H.
(b) During the ten (10) day period after the execution of this
Agreement , the Buyer shall retain or offer employment (which offers shall be
conditioned on the closing of the transactions contemplated hereby), and assume
all employment obligations with respect to no fewer than 150 persons from a pool
consisting of (i) Rehired Employees of L&H (the "Belgian Retained Employees");
and (ii) other employees of the Sellers not otherwise employed by L&H (the
"Non-Belgian Retained Employees" and together with the Belgian Retained
Employees, the "Transferred Employees"), or, in each case, such higher number as
the Buyer may determine in its sole discretion. Of the employees that Buyer
retains or offers employment to, Buyer shall designate (i) not less than 50
which shall be Belgian Retained Employees and (ii) any combination of the
employees from a list separately provided to Buyer that Buyer retains or offers
employment to that shall be sufficient to relieve the Sellers of not less than
$2,200,000 in severance payments that Sellers are obligated to make under the
Severance Plans (as defined below). Such employment or retention must be on
terms and conditions that do not significantly diminish the Transferred
Employee's position, level or responsibility, or his or her total compensation
and benefits, in the aggregate, or require any such Transferred Employee to
relocate his or her place of employment to a location that will increase his or
her commute by more than fifty (50) miles in one direction (any of the foregoing
constituting a "Constructive Termination"). The Transferred Employees shall have
a reasonable amount of time within which to accept to reject Buyer's offer of
employment. The Buyer shall provide Sellers with the list of the Transferred
Employees in writing within ten (10) days after the execution of this Agreement
. Nothing shall require L&H to continue to employ any employees in Belgium after
December 14, 2001 or any Sellers to continue to employ any employees after the
Closing Date.
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(c) If, within six (6) months after the date of hire, Buyer terminates
a Transferred Employee without cause or takes any action that constitutes a
Constructive Termination of a Transferred Employee, and such action on the part
of Buyer results in a Seller making a payment to such Transferred Employee under
L&H's 2001 Key Employee Retention Plan ("KERP") or the severance program
authorized in accordance with the procedures set forth by the U.S. Bankruptcy
Court on January 8, 2001 (collectively, the "Severance Plans"), then Buyer shall
reimburse Seller for such amounts paid.
(d) Subject to this Section 4.9, the Buyer shall not assume any
obligations to any employee of any Seller, including the Belgian employees of
L&H, that is not hired by the Buyer at the Closing (the "Non-Transferred
Employees"), including, without limitation, any obligations or liabilities for
any dismissal benefits that each such employee shall have accepted or shall
accept in full satisfaction of his or her rights resulting from the termination
of such employee's employment by L&H (the "Required Severance Payments") or
other severance or restructuring costs. Except as set forth in Section 4.9(c)
above and as set forth in the following sentence, the Buyer shall not assume any
obligations to any employee of the Sellers, including any Transferred Employee,
for any amounts accrued prior to the Closing. If Buyer hires any Non-Transferred
Employee within one (1) month following the date that is ten (10) days following
the entry of the Approval Order, then Buyer shall, within ten (10) business days
of such employee's hire date, pay to L&H an amount equal to any severance
amounts paid to such employee by any of the Sellers pursuant to the Severance
Plans.
(e) Nothing contained in this Agreement shall confer upon any
Employee, any right with respect to employment or continuance of employment by
the Buyer, except as may be required under the Belgian Collective Bargaining
Agreement n(degree)CBA 32bis of June 7, 1985 ("CBA 32bis") with respect to the
Belgian Retained Employees, nor shall anything herein interfere with the right
of the Buyer to terminate the employment of any Transferred Employee, with or
without cause, subject to the provisions of any employment agreement with the
Buyer and applicable law. No provision of this Agreement shall create any third
party beneficiary rights in any employee, or any beneficiary or dependents
thereof, with respect to the compensation, terms and conditions of employment
and benefits that may be provided to any Employee by the Buyer or under any
benefit plan which the Buyer may maintain.
(f) During the time that this Agreement shall remain in effect and for
a period of two (2) years following the Closing, each Seller agrees on behalf of
itself and its Subsidiaries, and their respective officers, directors and agents
(the "Seller Control Group") that the members of the Seller Control Group shall
take no action, formal or informal, direct or indirect, to (i) solicit the
employment of any Transferred Employees or any other employee, consultant or
independent contractor of the Buyer other than through general advertising not
specifically directed at such employees, (ii) hire any employee of the Buyer,
except as a result of actions permitted by clause (i) above, or (iii) solicit,
entice, induce or encourage any Transferred Employees or any other employee,
consultant or independent contractor of the Buyer to terminate his, her or its
relationship with the Buyer in order to become an employee, consultant or
independent contractor of or to a person other than Buyer.
27
(g) At the written request of the Buyer, each Seller (other than L&H)
shall continue to employ such of the Transferred Employees as may have an H-1B
visa status until the Buyer shall have filed the appropriate papers with the
Immigration and Naturalization Service to have such H-IB status transferred to
the Buyer. The Buyer shall reimburse any Seller for its out-of-pocket expenses,
including for the provision of welfare and other benefits, in continuing such
employment upon receipt of a ▇▇▇▇ from the Seller in a form reasonably
acceptable to the Buyer. Each Seller shall cooperate in good faith with the
Buyer and take commercially reasonable action and execute any documents,
instruments or conveyances of any kind which may be necessary to ensure that the
Buyer owns all right, title and interest in any intellectual property created by
such employees between the Closing and the date on which the H-1B visa of such
employee is transferred to the Buyer and such employee commences working
directly for the Buyer.
4.10 ALLOCATION OF PURCHASE PRICE. The Aggregate Purchase Price shall be
allocated among the Acquired Assets in proportion to their fair market values
and not in excess thereof as provided in a schedule (the "Allocation Schedule")
mutually agreed upon by Buyer and the Sellers as soon as practicable after the
Closing Date, but in no event later than thirty (30) days following the Closing,
with the Parties agreeing to negotiate in good faith with respect to such
schedule. The Allocation Schedule shall be for purposes of complying with the
requirements of Section 1060 of the Internal Revenue Code of 1986, as amended,
and regulations thereunder. The Buyer and Sellers each agree to prepare and file
on a timely basis with the Internal Revenue Service (and applicable state Tax
authorities) substantially identical initial and supplemental Internal Revenue
Service Forms 8594 "Asset Acquisition Statements Under Section 1060" consistent
with the Allocation Schedule (and corresponding state Tax forms). If any Tax
authority challenges such allocation, the party receiving notice of such
challenge shall give the other party prompt written notice thereof, and the
parties shall cooperate in order to preserve the effectiveness of such
allocation;
4.11 TAXES. The Sellers will be solely responsible for and pay (and to the
extent that Buyer pays, reimburse Buyer for), all sales, use, transfer, added or
other similar taxes, other than Belgian VAT Taxes, if any, which shall be paid
by Buyer (collectively, the "Transaction Taxes"), if any, due as a result of the
transactions contemplated by this Agreement whether imposed by law on a Seller
or the Buyer. It is expressly understood that Buyer shall have no obligation to
take any affirmative steps nor will it oppose any attempts with respect to the
collection of the Transaction Taxes. The Sellers shall furnish to the Buyer all
resale, exempt use or other certificates as may be applicable to the
transactions contemplated by this Agreement.
4.12 INTELLECTUAL PROPERTY. The Parties agree that, unless expressly
indicated on ANNEX B and except for the licenses to the AudioMining Asset Group
as set forth on ANNEX B, the Technology Licenses shall be perpetual,
royalty-free, non-exclusive licenses, without the right to sub-license, except
in connection with the distribution of products (or to any successor in
interest).
4.13 GOOD FAITH. The Sellers agree that the Buyer has negotiated in good
faith and at arm's length with the Sellers. The Parties acknowledge and agree
that the Buyer is a "good faith purchaser" within the meaning of U.S. Bankruptcy
Code Section 363(m) and is thereby entitled to the protection afforded good
faith, arm's length buyers under the U.S. Bankruptcy Code.
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Nothing in this Agreement constitutes or shall be construed or interpreted to
constitute either a waiver of the protections afforded by Section 363(m) or the
Buyer's consent to a stay of this Agreement pending appeal.
4.14 REGISTRATION RIGHTS. The Buyer will enter into a Registration Rights
Agreement (the "Rights Agreement") with the Sellers named therein in the form
attached as EXHIBIT F.
4.15 ADEQUATE ASSURANCES REGARDING CONTRACTS. With respect to any Debtor
Assigned Contract, the Buyer shall make commercially reasonable efforts to
provide assurance as required under the Bankruptcy Code of the future
performance of such Debtor Assigned Contract by the Buyer. The Buyer shall
promptly take all actions reasonably required by L&H or Holdings to assist in
(i) obtaining the U.S. Bankruptcy Court's entry of the Approval Order, such as
furnishing affidavits, non-confidential financial information or other documents
or information for filing with the U.S. Bankruptcy Court and making the Buyer's
employees and representatives available to testify before the U.S. Bankruptcy
Court with respect to demonstrating adequate assurance of future performance by
the Buyer under any Debtor Assigned Contract that is assumed and assigned by L&H
or Holdings and (ii) obtaining any and all requisite Belgium Bankruptcy
Approval.
4.16 RESERVED.
4.17 BANKRUPTCY OR CONCORDAT PROCEEDINGS INITIATED BY OTHER SELLERS. The
Buyer agrees and acknowledges that (i) after the date hereof and until the
Closing Date the Sellers that are Non-Bankruptcy Sellers on the date hereof, or
any of them, may decide in their sole discretion based upon reasonable business
judgment, in order to facilitate the consummation of the transactions
contemplated hereby and in the Ancillary Agreements, to file bankruptcy
petitions in either the U.S. Bankruptcy Court or Belgium bankruptcy court of
competent jurisdiction, or both, and thereby become subject to bankruptcy or
concordat proceedings in the U.S. and Belgium, respectively, and become
Bankruptcy Sellers hereunder and (ii) neither the bankruptcy (faillissement) of
L&H nor any filing or commencement of a U.S. bankruptcy or Belgian concordat or
bankruptcy proceeding pursuant to the preceding clause (i) shall, in and of
itself, be deemed to be a breach of any covenant, representation or warranty of
any Seller hereunder, nor shall such event, in and of itself, constitute a
Seller Material Adverse Effect hereunder; provided, that if the filing or
commencement of a U.S. bankruptcy or Belgian concordat or bankruptcy proceeding
by any Non-Bankruptcy Seller causes the Sellers to be unable to satisfy the
conditions to closing set forth in Section 5.1 (c) or 5.1(d), the Buyer shall
have the right to terminate this Agreement in accordance with Section 8.1 (c)
hereof.
4.18 RESERVED.
4.19 REIMBURSEMENT OF BELGIAN VAT TAXES; TAX WAIVER. Both before and after
the Closing each Seller, at the request of the Buyer and without further
consideration, shall use its commercially reasonable efforts to assist Buyer (i)
in obtaining the recognition by the Belgian VAT authorities that no Belgian VAT
Taxes are due on the Purchase Price or, in the absence thereof, in obtaining
reimbursement for any Belgian VAT Taxes paid or incurred, if any, in connection
with the transactions contemplated by this Agreement and (ii) in obtaining an
29
appropriate tax lien waiver from the Commonwealth of Massachusetts in connection
with the transactions contemplated hereby.
4.20 FURTHER ASSURANCES. Both before and after the Closing, each Party will
cooperate in good faith with the other and will take all appropriate action and
execute any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the transactions
contemplated hereunder. From and after the Closing, the Sellers will promptly
refer all inquiries with respect to the ownership of the Acquired Assets to the
Buyer and execute such documents as the Buyer may reasonably request from time
to time to evidence the transfer of the Acquired Assets to the Buyer. From and
after the Closing Date, the Buyer will promptly respond to all inquiries with
respect to the Assumed Liabilities and timely pay and satisfy all Assumed
Liabilities in accordance with their terms, subject to the Buyer's right to
contest in good faith any such obligations.
ARTICLE V
CONDITIONS TO CLOSING
5.1 CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to the satisfaction or waiver by the Buyer of the following
conditions:
(a) the sale of the Acquired Assets by the Bankruptcy Sellers to the
Buyer and the assumption and assignment by the Bankruptcy Sellers of the Debtor
Assigned Contracts to the Buyer as contemplated by this Agreement shall have
been approved by the U.S. Bankruptcy Court pursuant to the Approval Order and
the Assignment Order and the Belgian Bankruptcy Approval shall have been
obtained, and such orders and Belgian Bankruptcy Approval as of the Closing
Date, shall be in full force and effect, and not stayed, modified, vacated,
amended or revoked;
(b) the Sellers shall have obtained all of the waivers, permits,
consents, approvals or other authorizations, and effected all of the
registrations, filings and notices required to be obtained or effected pursuant
to Section 4.2 except where the failure to obtain any such waivers, permits,
consents, approvals or other authorizations or to effect such registrations,
filings or notices would not, individually or in the aggregate, have a Seller
Material Adverse Effect;
(c) the representations and warranties of the Sellers set forth in
Article II that are qualified as to materiality shall be true and correct in all
respects, and all other representations and warranties of the Sellers set forth
in Article II shall be true and correct in all material respects, in each case
as of the date of this Agreement and as of the Closing as though made as of the
Closing (except to the extent such representations and warranties are
specifically made as of a particular date, in which case such representations
and warranties shall be true and correct as of such date), except where the
failure of the representations and warranties contained
30
in Article II of this Agreement to be so true and correct would not individually
or in the aggregate, constitute a Seller Material Adverse Effect;
(d) each Seller shall have performed and complied, in all material
respects, with the agreements, covenants and obligations required to be so
performed or complied with by such Seller under this Agreement as of or prior to
the Closing;
(e) (i) no action, suit or proceeding against a Non-Bankrupt Seller
shall be threatened or pending before any Governmental Entity, court or
arbitrator which would reasonably be expected to result in unfavorable judgment,
order, decree, stipulation or injunction that would (A) prevent the consummation
of any of the transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation or (C) materially affect adversely the right of the Buyer to own,
operate or control any of the Acquired Assets following the Closing, and (ii) no
judgment, order, decree, stipulation or injunction that would have the result
specified in clauses (A), (B) and (C) of this Section 5.1 (e) shall be in
effect;
(f) each Seller shall have delivered to the Buyer a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clauses (c) through (e) of this
Section 5.1 is satisfied in all respects;
(g) the Buyer shall have obtained ownership of (or the right to access
and use for a reasonable period of time after the Closing to effect the transfer
of the Acquired Assets to the Buyer) any server containing any Acquired Assets;
(h) the Sellers shall have delivered to the Buyer such documents as
are necessary to terminate all Encumbrances (other than the Permitted
Encumbrances), including without limitation, those Encumbrances listed on
SECTION 2.4 of the Disclosure Schedule, which are of record with respect to the
Acquired Assets in forms suitable for filing with the appropriate Governmental
Entities;
(i) (i) each Non-Bankruptcy Seller shall have delivered a certificate
of its Secretary or other appropriate officer certifying as to (A) board and, if
necessary, shareholder resolutions approving this Agreement and the transactions
contemplated hereby, (B) such Non-Bankruptcy Seller's charter and by-laws and
(C) incumbency of such Non-Bankruptcy Seller's officers; (ii) each
Non-Bankruptcy Seller shall have delivered certificates of good standing in its
jurisdiction of organization and in the Commonwealth of Massachusetts and (iii)
each other Seller shall have delivered (to the extent not already delivered
pursuant to clauses (i) and (ii) above), certified charter documents,
certificates as to the incumbency of officers and all such other documents and
or instruments as the Buyer shall reasonably request in connection with the
Closing;
(j) the Seller shall have delivered to the Buyer the consent of any
required third party to the assignment of the Material Third Party Contracts
that provide for technology embedded in or products bundled with the products of
the Acquired Business;
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(k) the Seller shall have delivered Schedule 1.1(a)(vii);
(l) There shall not have occurred from the period beginning on
December 14, 2001 and ending on December 18, 2001, any action, event or
occurrence that results (i) in Buyer not being able to hire a material number of
employees that it has identified as being Belgian Retained Employees, or (ii) a
diminution in the kind, value or usefulness of the Acquired Assets located in
Belgium which results in a Seller Material Adverse Effect.
(m) all actions to be taken by the Seller in connection with the
consummation of the transactions contemplated hereby and all certificates,
instruments and other documents required to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to the Buyer.
5.2 CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligation of the Sellers
to consummate the transactions to be performed in connection with the Closing is
subject to the satisfaction or waiver by the Sellers of the following
conditions:
(a) the Buyer shall have obtained all of the waivers, permits,
consents approvals or other authorizations, and effected all of the
registrations, filings and notices required to be obtained or effected by the
Buyer pursuant to Section 4.2;
(b) the representations and warranties of the Buyer set forth in
Article III that are qualified as to materiality shall be true and correct in
all respects, and all other representations and warranties of the Buyer set
forth in Article III shall be true and correct in all material respects, in each
case, as of the date of this Agreement and as of the Closing as though made as
of the Closing (except to the extent such representations and warranties are
specifically made as of a particular date, in which case such representations
and warranties shall be true and correct as of such date), except where the
failure of the representations and warranties contained in Article III of this
Agreement to be so true and correct would not individually or in the aggregate,
constitute a material adverse effect on the business, operations or financial
condition of the Buyer;
(c) the Buyer shall have performed and complied, in all material
respects, with the agreements, covenants and obligations required to be
performed or complied with under this Agreement as of or prior to the Closing;
(d) No action, suit or proceeding shall be pending or threatened
before any Governmental Entity (other than the Bankruptcy Cases) against the
Buyer wherein an unfavorable judgment, order, decree, stipulation or injunction
would (i) prevent consummation of any of the transactions contemplated by this
Agreement or (ii) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation.
(e) the Buyer shall have delivered to the Sellers a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clauses (b) through (d) of this
Section 5.2 is satisfied in all respects;
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(f) the sale of the Acquired Assets by the Bankruptcy Sellers to the
Buyer and the assumption and assignment by the Bankruptcy Sellers of the Debtor
Assigned Contracts as contemplated by this Agreement shall have been approved by
the U.S. Bankruptcy Court pursuant to the Approval Order and Assignment Order
and the Belgian Bankruptcy Approval shall have been obtained, and such orders
and Belgian Bankruptcy Approval, as of the Closing Date, shall be in full force
and effect and not stayed, modified, vacated or revoked;
(g) the Buyer shall have delivered the Promissory Note;
(h) the Buyer shall have delivered certificates representing the
Shares;
(i) The Buyer shall have filed an additional listing notification with
respect to the Shares with the Nasdaq National Market;
(j) The Buyer shall have executed the Rights Agreement; and
(k) all actions to be taken by the Buyer in connection with the
consummation of the transactions contemplated hereby and all certificates,
instruments and other documents required to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to the Seller.
ARTICLE VI
POST-CLOSING COVENANTS AND AGREEMENTS
6.1 PROPRIETARY INFORMATION. From and after the Closing, each Seller agrees
not to disclose or make use of, and shall use its commercially reasonable
efforts to cause all of its affiliates not to disclose or make use of, any
knowledge, information or documents of a confidential nature or not generally
known to the public with respect to the Acquired Assets, the Acquired Business
or with respect to the Buyer or its business (including the financial
information, technical information or data relating to the products and names of
customers of the Acquired Business), except to the extent that such knowledge,
information or documents shall have become public knowledge other than through
improper disclosure by the Sellers or an affiliate of such Seller. Each Seller
shall enforce, for the benefit of the Buyer, all confidentiality, invention
assignments and similar agreements between such Seller and any other party
relating to the Acquired Assets or the Acquired Business which are not Assigned
Contracts. Notwithstanding the foregoing, the Sellers (and the Sellers'
successors in interest or the person or persons to whom all or any portion of
the SLT Assets (as defined in the Bidding Procedures) are sold) shall have the
right to continue to use any knowledge, information or documents in connection
with the Excluded Assets to the extent such knowledge, information or documents
were used in connection with the Excluded Assets prior to the Closing Date;
PROVIDED that such use does not infringe the patents or copyrights or any of the
Intellectual Property.
6.2 NON-COMPETITION.
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(a) For a period of two (2) years after the Closing Date, each Seller
agrees not to, either directly or indirectly as a stockholder, investor,
partner, consultant or otherwise, (i) design, develop, manufacture, market, sell
or license any product or provide any service anywhere in the world which is
competitive with any product designed, developed (or under development),
manufactured, sold or licensed or any service provided by such Seller since
inception in connection with the Acquired Assets or the Acquired Business or
(ii) engage anywhere in the world in any business competitive with the Acquired
Business as currently conducted or as currently proposed to be conducted by the
Sellers. Each Seller shall enforce, for the benefit of the Buyer, all
non-competition and similar agreements between such Seller and any other party
which relating to the Acquired Assets or the Acquired Business are not Assigned
Contracts. This Section 6.2(a) shall terminate and be of no further force or
effect as to a Seller upon the closing of a transaction pursuant to which
beneficial ownership of more than 50% of the such Seller's outstanding capital
stock is transferred to a single person or entity, or a "group" (within the
meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934) of
persons or entities, in a single transaction or a series of related
transactions.
(b) Each Seller agrees that the duration and geographic scope of the
non-competition provision set forth in this Section 6.2 are reasonable. In the
event that any court determines that the duration or the geographic scope, or
both, are unreasonable and that such provision is to that extent unenforceable
such Seller and the Buyer each agree that the provision shall remain in full
force and effect for the greatest time period and in the greatest area that
would not render it unenforceable. Each Seller and the Buyer intend that this
non-competition provision shall be deemed to be a series of separate covenants,
one for each and every county of each and every state of the United States of
America and each and every political subdivision of each and every country
outside the United States of America where this provision is intended to be
effective.
(c) Each Seller shall, and shall use its respective commercially
reasonable efforts to cause its affiliates to, refer all inquiries regarding the
business, products and services of the Acquired Business to the Buyer.
6.3 BOOKS AND RECORDS. To the extent that any of the books and records
maintained by Sellers included in the Acquired Assets and the Acquired Business
("Business Books and Records") are items susceptible to duplication and are
either (x) used in connection with any of Sellers' assets or businesses other
than the Acquired Assets or the Acquired Business or (y) are required by law to
be retained by any Seller, such Seller may deliver photostatic copies or other
reproductions from which, in the case of Business Books and Records referred to
in clause (x), information solely concerning Sellers' businesses other than the
Acquired Business has been deleted. The Business Books and Records maintained by
the Sellers included in the Acquired Assets and the Acquired Business will,
following the Closing, be in the custody of the Buyer. However, the Buyer hereby
agrees, for a period of three (3) years from and after the Closing Date, to
permit L&H to have reasonable access to such Business Books and Records relating
or pertaining to the business and operations of the Sellers to the extent L&H
has need therefor in order to prepare and file tax returns and to complete the
administration of the Bankruptcy Cases. If at any time the Buyer desires to
dispose of or destroy any such records the Buyer shall provide L&H with 30 days
(the "Notice Period") prior written notice thereof. If L&H desires to retain
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any such Business Records or Books, L&H shall arrange to collect such Business
Books and Records from the Buyer, at L&H's expense. In the event that the Buyer
does not receive any notice of L&H's desire to retain any such books or records
within such Notice Period, the Buyer may then dispose of or destroy such records
or books without any further obligations.
6.4 COOPERATION.
(a) Subject to the terms and conditions of this Agreement, at any time
or from time to time after the Closing, at the Buyer's request and without
further consideration, the Sellers shall execute and deliver to the Buyer such
other instruments of sale, transfer, conveyance, assignment and confirmation,
provide such materials and information and take such other actions as Buyer may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to the Buyer, and to confirm the Buyer's title to, all of the
Acquired Assets, and, to the full extent permitted by law, to put Buyer in
actual possession and operating control of the Acquired Assets and to assist the
Buyer in exercising all rights with respect thereto, and otherwise to cause
Sellers to fulfill its obligations under this Agreement and the Ancillary
Agreements.
(b) To the extent that any Assigned Contract is not assignable without
the consent of another party, this Agreement shall not constitute an assignment
or an attempted assignment thereof if such assignment or attempted assignment
would constitute a breach thereof or a default thereunder. The Sellers shall use
their commercially reasonable efforts to obtain the consent of any third party
to the assignment of any Assigned Contract (by the provisions thereof or by
applicable law) in all cases in which such consent is or may be required (by the
provisions thereof or by applicable law) for such assignment. If, by the 180th
day following the Closing Date and after using their commercially reasonable
efforts to obtain such consent, the Sellers are unable to obtain any such
consent, then, at the Buyer's option, such Assigned Contracts shall not be
assigned and transferred by the Sellers to the Buyer at the Closing (and shall
be deemed to be Excluded Contracts) and the Buyer shall not assume the Sellers'
liabilities or obligations with respect thereto. Sellers shall cooperate with
Buyer in any reasonable arrangement designed to provide for Buyer the benefits
intended to be assigned to Buyer under the relevant Assigned Contract, including
enforcement at the cost and for the account of Buyer of any and all rights of
the applicable Seller against the other party thereto arising out of the breach
or cancellation thereof by such other party or otherwise. If and to the extent
that such arrangement cannot be made, Buyer shall have no obligation with
respect to any such Assigned Contract. The provisions of this 6.4(b) shall not
affect the right of Buyer not to consummate the transactions contemplated by
this Agreement if the condition to its obligations hereunder contained in
Section 5.1 (b) or Section 5.1 (n) has not been fulfilled.
6.5 RESALE OF SHARES.
(a) Each Seller acknowledges and understands that because the Shares
have not been registered under the Securities Act, or applicable state
securities laws, such Seller is aware that any disposition, transfer or resale
inconsistent with the Securities Act may create liability on its part and/or the
part of the Buyer.
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(b) Each Seller agrees that it will transfer the Shares only, (i)
pursuant to an effective registration statement under the Securities Act, or
(ii) pursuant to an available exemption from registration under the Securities
Act and after delivering to the Buyer an opinion of counsel satisfactory to the
Buyer to the effect that (A) registration under the Securities Act is not
required and (B) such transfer without registration will not cause the initial
issuance of the Shares by the Buyer to be in violation of Section 5 of the
Securities Act.
(c) Each Seller agrees that it will not engage in any hedging
transactions with respect to the Shares unless in compliance with the Securities
Act.
6.6 LEGENDS. Each Seller acknowledges and agrees that each certificate
representing the Shares and each certificate representing shares of capital
stock of the Buyer issued in respect of such Shares shall have the following
legend stamped on the certificate in a prominent manner, in addition to any
other legends that may be required under U.S. federal or state securities laws:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be offered, sold
or otherwise transferred, pledged or hypothecated unless and until such
shares are registered under such Act or an opinion of counsel satisfactory
to the Corporation is obtained to the effect that (i) such registration is
not required and (ii) such offer, sale, transfer pledge or hypothecation
will not cause the initial issuance of the Shares by the Buyer to be in
violation of Section 5 of the Securities Act. Hedging transactions
involving these shares may not be conducted unless in compliance with the
Securities Act of 1933."
6.7 RESERVED.
6.8 RECEIVABLES; ACCOUNTING. In the event that any Seller receives, after
the Closing Date, any payments related to accounts receivable or any other
payments related to any Assigned Contract, such Seller promptly shall forward
such payment to the Buyer. During the twelve (12) month period immediately
following the Closing, the Sellers shall provide the Buyer with a monthly
accounting of any and all such amounts received, such accounting, in a form
reasonably satisfactory to the Buyer and the Buyer shall have the right, upon
reasonable advanced notice and during normal business hours, to conduct, at its
expense, an audit of any and all of the Sellers' books and records related
thereto.
6.9 TRADEMARKS/DOMAIN NAMES. The Parties hereby acknowledge and agree that
Schedule 6.9 of the Seller Disclosure Schedule contains a complete list of (i)
the additional trademarks referred to in SECTION D.1. of ANNEX B and (ii) the
domain names to be provided pursuant to SECTION D.2. of ANNEX B.
6.10 SHARED TECHNOLOGY CONTRACTS. Buyer hereby agrees that it shall, with
respect to any Assigned Contract listed in Schedule 1.2(a) that contains the
name of a Non-Purchased
36
Asset Group under the heading of "Technology" in the column next to such
Assigned Contract (a "Shared Technology Contract") use commercially reasonable
efforts to sublicense or otherwise convey that portion of the benefits related
to the Non-Purchased Asset Group to the acquirer of such Non-Purchased Asset
Group ("Other Buyer"), subject to the Other Buyer agreeing (to the reasonable
satisfaction of the Buyer) to assume any and all of the related obligations
related to such benefits.
6.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, covenants, agreements and obligations of the Parties contained in
this Agreement shall expire on the Closing Date, and there shall be no liability
in respect thereof (other than liability arising from fraud), whether such
liability has accrued prior to the Closing Date or after the Closing Date, on
the part of any Party or its officers, directors, employees, agents and
affiliates. This Section shall not limit in any way the survival and
enforceability of any covenant or agreement of the parties hereto which by its
terms contemplates performance after the Closing Date, which shall survive for
the respective periods set forth herein.
6.12 NO OTHER REPRESENTATIONS. Notwithstanding anything to the contrary
contained in this Agreement, it is the explicit intent of each Party hereto that
the Sellers are making no representation or warranty whatsoever, express or
implied, including, but not limited to, any implied representation or warranty
as to condition, merchantability or suitability as to any of the Acquired
Assets, except those representations and warranties contained in Article II. It
is understood that, except to the extent otherwise expressly provided herein,
Buyer takes the Acquired Assets "as is" and "where is". In particular, Sellers
make no representation or warranty to Buyer with respect to (i) the information
set forth in the offering memorandum relating to the sale of the Acquired
Assets, which was delivered by Sellers to the Buyer prior to the negotiation of
this Agreement by the parties hereto or (ii) any financial projection or
forecast relating to the condition of the Acquired Assets. With respect to any
such projection or forecast delivered by or on behalf of Sellers to Buyer, Buyer
acknowledges that (i) there are uncertainties inherent in attempting to make
such projections and forecasts, (ii) it is familiar with such uncertainties,
(iii) it is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all such projections and forecasts furnished to it and
(iv) it shall have no claim against Sellers with respect thereto.
6.13 DISCLOSURE SCHEDULE. The Parties acknowledge and agree that (i) the
Disclosure Schedule may include certain items and information solely for
informational purposes for the convenience of Buyer and (ii) the disclosure by
Sellers of any matter in the Disclosure Schedule shall not be deemed to
constitute an acknowledgment by Sellers that the matter is required to be
disclosed by the terms of this Agreement or that the matter is material.
ARTICLE VII
RESERVED
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ARTICLE VIII
TERMINATION
8.1 TERMINATION OF AGREEMENT. The Parties may terminate this Agreement
prior to the Closing (whether before or after Approval Order) with the prior
authorization of their respective Boards of Directors, as provided below:
(a) the Parties may terminate this Agreement by written consent of
each Party;
(b) the Buyer may terminate this Agreement by giving written notice to
the Sellers in the event any Seller is in material breach, and the Sellers may
terminate this Agreement by giving written notice to the Buyer in the event the
Buyer is in material breach, of any representation, warranty, or covenant
contained in this Agreement; PROVIDED, HOWEVER, that in the case of a breach of
a covenant contained herein by any Party, the Party in breach shall have five
business days after written notice has been received in which to cure such
breach;
(c) the Buyer may terminate this Agreement by giving written notice to
the Sellers if the Closing shall not have occurred on or before December 18,
2001 by reason of the failure of any condition precedent under Section 5.1
hereof (unless the failure results primarily from a breach by the Buyer of any
representation, warranty or covenant contained in this Agreement);
(d) the Sellers may terminate this Agreement by giving written notice
to the Buyer if the Closing shall not have occurred on or before December 18,
2001 by reason of the failure of any condition precedent under Section 5.2
hereof (unless the failure results primarily from a breach by any Seller of any
representation, warranty or covenant contained in this Agreement);
(e) the Buyer or the Sellers may terminate this Agreement by giving
written notice to the other Party if the U.S. Bankruptcy Court has not entered
the Approval Order and the Assignment Order on or before December 18, 2001; and
(f) the Buyer or the Sellers may terminate this Agreement by giving
written notice to the other Party if the Belgian Bankruptcy Approval have not
been received within 45 days after the date of this Agreement.
8.2 STATUS OF AGREEMENT AFTER TERMINATION. Upon any termination of this
Agreement pursuant to Section 8.1, this Agreement and the Ancillary Agreements
shall become void and shall have no effect; except for those obligations in
Sections 4.5(b), 8.2, 8.3, 8.4, 9.8, 9.9, 9.10
38
and 9.14 of this Agreement and pursuant to the Confidentiality Agreement, which
shall survive the termination of this Agreement in accordance with its terms.
8.3 FEES AND EXPENSES.
(a) If Sellers terminate this Agreement pursuant to (i) Sections
8.1(b) or 8.1 (d) hereof as a result of a breach or default by Buyer of any of
its representations, warranties, covenants or agreements hereunder or the
failure, delay or inaction on the part of the Buyer to perform its obligations
hereunder or (ii) Sections 8.1(e), or 8.1(g) and the failure to obtain the
Approval Order or the Assignment Order, or the Belgian Bankruptcy Approval is a
result of the Buyer's breach of this Agreement, the Escrow Funds shall be
transferred to Sellers (as liquidated damages and not as a penalty) not later
than five (5) business days after termination.
(b) If Buyer terminates this Agreement pursuant to Section 8.1 (other
than a termination pursuant to Sections 8.1(e) or 8.1 (g) resulting from the
failure to obtain the Approval Order or the Assignment Order, or the Belgian
Bankruptcy Approval as a result of Buyer's breach of this Agreement), the Escrow
Funds will be returned to the Buyer not later than five (5) business days after
termination.
8.4 EXCLUSIVE REMEDY. The Parties acknowledge and agree that the rights and
remedies provided in this ARTICLE VIII are the exclusive rights and remedies in
the event of any breach of any representation, warranty, agreement or covenant
by the Buyer prior to the Closing other than an intentional breach. With respect
to any Party's intentional breach of this Agreement nothing herein shall limit
liability therefor.
ARTICLE IX
MISCELLANEOUS
9.1 PRESS RELEASES AND ANNOUNCEMENTS. No Party shall issue any press
release or announcement relating to the subject matter of this Agreement without
the prior approval of the Buyer and L&H, PROVIDED, HOWEVER, that (i) any Party
may make any public disclosure if such Party is advised by legal counsel that
public disclosure is required by law or regulation (in which case the disclosing
Party shall advise the other Parties of such disclosure and provide it with a
copy of the proposed disclosure prior to making the disclosure) and (ii) nothing
will prevent the Bankruptcy Sellers from publicly filing this Agreement and the
Ancillary Agreements in connection with the Bankruptcy Cases or discussing them
before the U.S. Bankruptcy Court or Belgium Bankruptcy Court, or with appointed
committees or commissioners or with the Sellers' Works Council or the Sellers'
workers representatives.
9.2 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns, except that any Other Buyer that is a
purchaser of any Non-Purchased Asset Group is an express beneficiary of Section
6.10 hereof and has the right to directly enforce Buyer's obligations under
Section 6.10 hereof.
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9.3 ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, that may have related in any way to the subject matter hereof.
9.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns and shall be binding upon any successor bankruptcy trustee
or trustees. Prior to the Closing, no Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties; provided that the Buyer may assign all or any
portion of its rights, interests and/or obligations hereunder to one or more
direct or indirect wholly-owned Subsidiaries of the Buyer, provided that any
such Subsidiary agrees in writing to be bound by all of the terms, conditions
and provisions contained herein and no such assignment relieves Buyer of its
obligations hereunder. The Buyer remains primarily liable therefor. Without
limitation to the foregoing, the Buyer may elect prior to Closing to cause a
wholly-owned Belgian Subsidiary of the Buyer, existing or in formation, to
purchase from L&H those of the Acquired Assets that are owned by L&H, PROVIDED
that the Buyer shall be jointly and severally liable with such Subsidiary for
all liabilities of the Buyer under this Agreement and that such purchase shall
in no way affect the obligations of the Sellers under this Agreement.
9.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9.6 HEADINGS. The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.7 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly delivered two
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:
If to the Seller: Lernout & Hauspie Speech Products N.V.
Curaturan
Flanders Language Valley 50
B-8900 Ieper, Belgium
Telephone: ▇▇▇-▇▇-▇▇-▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇-▇▇-▇▇▇▇
with a copy to: Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
40
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to: Liedekerke, Wolters, Waelbroeck, ▇▇▇▇▇▇▇▇▇▇▇ & Cerfontaine
Attn: Thierry Tilquin
▇, ▇▇▇▇▇▇▇▇▇ ▇▇ ▇'▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇-▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇-▇-▇▇▇-▇▇▇▇
and a copy to: ▇▇▇▇-▇▇▇▇ VANSTAEN
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇-▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇-▇-▇▇▇-▇▇▇▇
If to the Buyer: ScanSoft, Inc.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Copy to: Hill & ▇▇▇▇▇▇, a Professional Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, facsimile, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the individual for
whom it is intended. Either Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
9.8 GOVERNING LAW. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR
INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT
41
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT,
TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED AND
DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE
(WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).
9.9 JURISDICTION. Except as otherwise expressly provided in this Agreement,
the parties hereto agree that any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby shall be brought, during
the pending of the U.S. Bankruptcy Case of any Seller, be brought in the U.S.
Bankruptcy Court, and thereafter shall be brought in the United States District
Court for the District of Massachusetts or any Massachusetts State court sitting
in Suffolk County, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any cause of action
arising out of this Agreement shall be deemed to have arisen from a transaction
of business in the Commonwealth of Massachusetts, and each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 9.7 shall be deemed effective service of
process on such party.
9.10 WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN
ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON
CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10.
9.11 BULK SALES LAWS. Buyer and Sellers each hereby waive compliance by
Sellers with the provisions of the "bulk sales," "bulk transfer" or similar laws
of any state or other jurisdiction.
42
9.12 AMENDMENTS AND WAIVERS. The Parties may mutually amend any provision
of this Agreement at any time prior to the Closing; PROVIDED, HOWEVER, that any
amendment effected subsequent to the Approval Order shall be subject to the
restrictions contained in the Approval Order and that no such amendment shall be
made after obtaining the Belgian Bankruptcy Approval. No amendment of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by all of the Parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
9.13 SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
9.14 EXPENSES. Each Party shall bear its own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and thereto.
9.15 SPECIFIC PERFORMANCE. Each Party acknowledges and agrees that the
other Parties would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party agrees that the other Parties
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in the U.S. Bankruptcy
Court for the District of Delaware, in addition to any other remedy to which it
may be entitled, at law or in equity.
9.16 CONSTRUCTION. The language used in this Agreement shall be deemed to
be the language chosen by the Parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against any Party. Any reference
to any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.
9.17 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
43
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
44
IN WITNESS WHEREOF, the Parties hereto have executed this Asset
Purchase Agreement as of the date first above written.
BUYER:
SCANSOFT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
SELLERS:
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
By: /s/ ▇▇▇▇ - ▇▇▇▇ Van Staen
-----------------------------------
Name: ▇▇▇▇ - ▇▇▇▇ Van Staen
Title: Curator
L&H HOLDINGS USA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
INTERACTIVE SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
LERNOUT & HAUSPIE SPEECH
PRODUCTS USA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
45
L&H APPLICATIONS USA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
LINGUISTIC TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
L&H JAPAN KK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President General
Manager International
L&H LINGUISTICS USA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
L&H JAPAN, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President General
Manager International
46
ANNEX A - LIST OF OTHER SELLERS
LERNOUT & HAUSPIE SPEECH PRODUCTS USA, INC., a Delaware corporation.
L&H APPLICATIONS USA, INC., a Delaware corporation
LINGUISTIC TECHNOLOGIES, INC., a Delaware corporation.
L&H JAPAN KK, a Japanese corporation
L&H JAPAN, INC., a Japanese corporation
INTERACTIVE SYSTEMS, INC., a Pennsylvania corporation
L&H LINGUISTICS USA, INC., a Delaware corporation
ANNEX B
TEXT-TO-SPEECH ASSET GROUP(1)
(Owned by Lernout & Hauspie Speech Products N.V., except for **, which is owned
by Lernout & Hauspie Speech Products USA, Inc., or as otherwise expressly
indicated.)
A1. Text-to-Speech Technology
Sellers' technology that converts electronic text into speech,
including, without limitation, the TTS2500, TTS3000,
RealSpeak, RealSpeak Compact, RealSpeak UltraCompact, Dragon
TTS Technology (excluding the draglib library, which is
licensed to the Text-to-Speech Asset group under "Licensed
In", Section D.e.), TruVoice, and BeSTSpeech technologies,
(with grapheme and phoneme ("G2P") component) (collectively,
"Text-to-Speech Technology") including, but not limited to,
the following:
a. All human-generated inputs used to create, test, and
enhance Text-to-Speech Technology, including software
source code, linguistic rules, makefiles, and
scripts.
b. Text-to-Speech Technology data, comprising all
recordings and their annotations used in the creation
of voice fonts for Text-to-Speech Technology and all
speechbases derived from the recordings and
annotations.
c. All lexical data created or acquired by the Sellers
for use in Text-to-Speech Technology and L&H Speech
Processing/Dialog Technology, including all lexicons,
wordlists and enhancements to these (collectively,
"L&H Lexical Data").
d. All proprietary software tools, in object and source
code form, used to create, test, or enhance
Text-to-Speech Technology, including, without
limitation, DEPES, Speech Base Compilation
Environment, Language Development Toolkit, and
Protran.
e. All research projects, research results, and
intermediate projects derived directly from
Text-to-Speech Technology, in object code form and
machine-generated source code form, including,
without limitation, acoustic models, language models,
and voice fonts.
f. All generally released works and works-in-progress to
the extent derived from Text-to-Speech Technology in
all languages, including but not limited to,
Cantonese-Hong Kong, Dutch-Belgium,
Dutch-Netherlands, English-Great Britain, English-USA
(all voices), French, German, Italian,
--------
(1) These assets are subject to the obligations set forth in Section F.
Japanese, Korean, Mandarin-China, Norwegian,
Portuguese-Brazil, Portuguese-Portugal, Spanish-
Spain, Spanish-Mexico, and Swedish.
g. All generally released works and works-in-progress to
the extent derived from Text-to-Speech Technology on
all platforms, including but not limited to,
win9x/Mex86, win2000x86, ▇▇▇▇▇, ▇▇▇▇▇▇, Solaris
Sparc, Solarisx86, Linux x86, AIX RS6000, WinCE, and
embedded linux.
A2. Text-to-Speech Products
All Text-to-Speech Technology products (but excluding custom
automotive applications contained in the L&H Speech
Processing/Dialog Asset Group), RealSpeak Server, and
RealSpeak File Generator, (collectively, "Text-to-Speech
Products") including, but not limited to, the following:
a. All human-generated inputs used to create, test, and
enhance Text-to-Speech Products, including software
source code, linguistic rules, makefiles, scripts,
and external documentation.
b. Text-to-Speech Products data, comprising all data
used to create, test, and enhance Text-to-Speech
Products including, without limitation, the raw data
and enhancements (such as phonetic tagging of audio
data, cleansing of text corpora, and the addition of
information to lexicons) for recorded audio, text
corpora, and lexicons, if applicable, acquired from
both external sources and through internal data
collection.
c. All proprietary software tools, in object and source
code form, used to create, test, and enhance
Text-to-Speech Products, including, without
limitation, automated test tools and debug modules.
d. All of Sellers' rights in the following external
components incorporated into Text-to-Speech Products:
BST102 and LH3010 chips (custom masked versions of
the Texas Instruments TSP50C10 chip), LH3030 chips
(custom masked version of the Texas Instruments
MSP50C30 chip), and hardware dongle and license
protection software used with RealSpeak File
Generator.
e. All demonstration versions, sample applications, and
prototypes derived directly from or created for
Text-to-Speech Products.
A3. Documentation
All internal documentation relating to Text-to-Speech
Technology and Text-to-Speech Products, including documents,
notebooks, web-based documents and Lotus Notes discussion
databases.
2
B1. Patents
4,996,707 Text-to-Speech Converter of a Facsimile US 26-Feb-91
Graphic Image
5,592,585 Method for Electronically Generating a Spoken US 7-Jan-97
Message
5,727,120 Apparatus for Electronically Generating a US 10-Mar-98
Spoken Message
6,052,664 Apparatus and Method for Electrically US 18-Apr-00
Generating Spoken Message
4,979,216 Text-to-Speech Synthesis System and Method US 18-Dec-90
Using Context Dependent Vowel Allophones
5,634,084 Abbreviation and Acronym/initialism Expansion US 27-May-97
Procedures for a Text-to-Speech reader
5,943,648 Speech Signal Distribution System Providing US 24-Aug-99
Supplemental Parameter Associated Data
632,541 Text-to-Speech Converter of a Facsimile Australia 14-May-93
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Austria 3-Sep-97
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Belgium 3-Sep-97
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Denmark 3-Sep-97
Graphic Image
EP0458859 Text-to-Speech Synthesis System and Method Europe 9-Sep-99
Using Context Dependent Vowel Allophones
EP0457830 Text-to-Speech Converter of a Facsimile Europe 27-Jan-97
Graphic Image
3
0457830 Text-to-Speech Converter of a Facsimile France 3-Sep-97
Graphic Image
458859 Text-to-Speech Synthesis System and Method Germany 9-Sep-99
Using Context Dependent Vowel Allophones
0457830 Text-to-Speech Converter of a Facsimile Germany 3-Sep-97
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Italy 3-Sep-97
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Netherlands 3-Sep-97
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Spain 3-Sep-97
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Sweden 3-Sep-97
Graphic Image
0457830 Text-to-Speech Converter of a Facsimile Switzerland 3-Sep-97
Graphic Image
458859 Text-to-Speech Synthesis System and Method United Kingdom 9-Sep-99
Using Context Dependent Vowel Allophones
0457830 Text-to-Speech Converter of a Facsimile United Kingdom 3-Sep-97
Graphic Image
B2. Patent Applications
Audio Visual Interface for Family Information US 21-Jun-00 60/212,952
Manager
Corpus-Based Prosody Translation System US 29-Sep-00 60/236,475
Fast Waveform Synchronization for Concatenation US 15-Sep-00 60/233,031
and Time-Scale Modification of Speech
Speech Synthesis Using Concatenation of Speech Australia 12-Nov-99 14031/00
Waveforms
4
Speech Synthesis Using Concatenation of Speech Europe 12-Nov-99 99 972 346.3
Waveforms
Speech Synthesis Using Concatenation of Speech Japan 12-Nov-99 2000-582998
Waveforms
Speech Synthesis Using Concatenation of Speech US 12-Nov-99 09/438,603
Waveforms
Text-to-Speech Convertor of a Facsimile Graphic Canada 26-Jan-90 2035871
Image
Text-to-Speech Convertor of a Facsimile Graphic Japan 26-Jan-90 503,531/1990
Image
Time Scale Modification of Digitally Sampled US 2-Feb-01 09/776,018
Waveforms in the Time Domain
C. Copyright Registrations/Mask Works
[Intentionally left blank]
D1. Trademarks
BESTSPEECH (stylized)**
Application(s) for Registration:
None
Registration(s):
United States of America, Serial No. 1,715,362
REALSPEAK
Application(s) for Registration:
United States of America, Application No. 75/587,202
Registration(s):
Austria, Filing No. 001175090
Belgie, Filing No. 001175090
Denmark, Filing No. 001175090
European Union, Serial No. 1175090
Finland, Filing No. 001175090
France, Filing No. 001175090
Germany, Filing No. 001175090
Greece, Filing No. 001175090
Ireland, Filing No. 001175090
Italy, Filing No. 001175090
Japan, Serial No. ▇▇▇▇▇▇▇
5
Korea (South), Serial No. 497664
Luxemburg, Filing No. 001175090
Nederland, Filing No. 001175090
Portugal, Filing No. 001175090
Spain, Filing No. 001175090
Sweden, Filing No. 001175090
United Kingdom, Filing No. 001175090
TRUVOICE
Application(s) for Registration:
None.
Registration(s):
United States of America, Serial Nos. 1,769,147
and 1,892,016
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Serial No. 193011
Benelux, Serial No. 193011
Canada, Serial No. TMA512,411
China, Serial No. 1137486
Denmark, Serial ▇▇. ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
Finland, Serial No. ▇▇▇▇▇▇
▇▇▇▇▇▇, Serial No. 193011
Germany, Serial No. ▇▇▇▇▇▇
▇▇▇▇▇▇, Serial No. 193011
Indonesia, Serial No. 401087
Ireland, Serial No. ▇▇▇▇▇▇
▇▇▇▇▇, Serial No. 193011
Korea (South), Serial No. 395571
Luxemburg, Serial No. 193011
Nederland, Serial No. 193011
Portugal, Serial No. 193011
Spain, Serial No. 193011
Sweden, Serial No. 193011
Taiwan, Serial No. 784853
United Kingdom, Serial No. 193011
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are using, or
intend to use in connection with goods or services associated
with this asset group, or (2) be trademarks that Sellers have
registered or sought to register for use in connection with
goods or services associated with this asset group.]
6
D2. Domain Names
▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇.▇▇▇
E. Licenses In
The following licenses from other asset groups:
a. License to the Intelliscope Language Recognizer
product ("ILR"), in source code form, for the
purposes of (i) supporting certain Assigned Contracts
under which one or more customers of Seller(s)
received a license to ILR, and (ii) using ILR in
connection with the Acquired Business (from the ICM
Asset Group).
b. Covenant not to ▇▇▇ for making, using, selling or
offering to sell, any inventions embodied in patents
(or existing patent applications) contained within
the ICM Asset Group (from the ICM Asset Group).
F. Obligations
a. Provide a license to all L&H Lexical Data necessary
for the ISI business as currently conducted and as
currently proposed to be conducted, for the following
six (6) languages (American English, Japanese,
Korean, French, Spanish, German), to the ISI Speech
Processing/Dialog Asset Group.
b. Provide a license to the RealSpeak(TM) SDK on Win32,
in object code form, limited to use in conjunction
with existing Machine Translation Products, to the
Machine Translation Group.
7
L&H SPEECH PROCESSING/DIALOG
(AND AUTOMOTIVE APPLICATIONS) ASSET GROUP(2)
(Owned by Lernout & Hauspie Speech Products N.V., except *, which is owned by
L&H Applications USA, Inc., and ***, which is owned by Linguistic Technologies,
Inc., or as otherwise expressly indicated.)
A1. L&H Speech Processing/Dialog Technology
Sellers' technology that performs certain function(s) in
response to speech input, including, without limitation,
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, ASR1000, ASR1500, ASR1600, ASR2000,
L&H Voice Xpress(TM) Speech Recognition Engine*, Kurzweil
Voice technology*, Speech Compression Technology, Speech
Enhancement Technology (including Non-Linear Spectral
Subtraction (NSS) & Acoustic Echo Cancellation (AEC)), PODIAS
technology, Camelot-HDEC, SV200, SV1500, Grammar Studio,
Speech User Interface Toolkit (SUIT), Ukraine Natural Language
Technology, and RealDialog (but excluding such technology
specifically listed in ISI Speech Processing/Dialog Asset
Group and Dragon Speech Processing/Dialog Asset Group),
(collectively, "L&H Speech Processing/Dialog Technology")
including but not limited to:
a. All human-generated inputs used to create, test, and
enhance L&H Speech Processing/Dialog Technology,
including software source code, linguistic rules,
makefiles, and scripts.
b. All data (other than L&H Lexical Data) created or
acquired by the Sellers to create, test, or tune L&H
Speech Processing/Dialog Technology including,
without limitation, the text corpora ("L&H Text
Corpora") and the acoustic data ("L&H Acoustic
Data").
c. All proprietary software tools, in object code and
source code form, used to create, test, or enhance
L&H Speech Processing/Dialog Technology, including
OOST (object oriented speech toolkit), FTEST and NBS
(regression test framework and nightly builds),
C/python interface layers on HDEC (ctypespic), python
testing scripts for HDEC (pydec),
asr1500/asr1600/asr300 OOST-based integrated training
environment (including batch-queue system and data
preparation and analysis tools), speech analysis and
recognition tools in MATLAB, SoundTool, ADB DSDR
recording tool, and the L&H Voice Xpress(TM) language
modeling toolkit.
d. All research projects, research results, and
intermediate projects derived directly from L&H
Speech Processing/Dialog Technology, in object code
form and machine-generated source code form,
including, without limitation, acoustic models,
language models, and voice fonts.
---------
(2) These assets are subject to the obligations contained in Section F.
8
e. All generally released works and works-in-progress to
the extent derived from L&H Speech Processing/Dialog
Technology in all languages, including but not
limited to, Dutch-Belgium, Dutch-Netherlands,
English-Great Britain, English-USA, French, German,
Italian, Japanese, Korean, Mandarin-China, Norwegian,
Spanish-Spain, Spanish-Mexico, and Swedish.
f. All generally released works and works-in-progress
derived directly from L&H Speech Processing/Dialog
Technology on all platforms, including but not
limited to, win9x/Mex86, win2000x86, ▇▇▇▇▇,
▇▇▇▇▇▇,▇▇▇▇▇▇▇ Sparc, Solarisx86, Linux x86, AIX
RS6000, WinCE, and embedded linux.
A2. L&H Speech Processing/Dialog Products
All products that directly incorporate any L&H Speech
Processing/Dialog Technology, including all custom automotive
applications (but excluding technologies contained in the
Text-to-Speech Asset Group), (collectively, "L&H Speech
Processing/Dialog Products"), including but not limited to:
a. All human-generated inputs used to create, test, and
enhance L&H Speech Processing/Dialog Products,
including software source code, linguistic rules,
makefiles, and scripts.
b. L&H Speech Processing/Dialog Products data,
comprising all data used to create, test, and enhance
L&H Speech Processing/Dialog Products including
without limitation the raw data and enhancements
(such as phonetic tagging of audio data, cleansing of
text corpora, and the addition of information to
lexicons) for recorded audio, text corpora, and
lexicons, if applicable, acquired from both external
sources and through internal data collection..
c. All proprietary software tools, in object code and
source code form, used to create, test, or enhance
L&H Speech Processing/Dialog Products, including the
L&H Voice Xpress(TM) language modeling toolkit,
asrperfo, User Dictionary Editor (UDE), and test
scripts.
d. All demonstration versions, sample applications, and
prototypes that were derived directly from or created
for L&H Speech Processing/Dialog Products.
A3. Documentation
All internal documentation concerning L&H Speech
Processing/Dialog Technology and L&H Speech Processing/Dialog
Products, including documents, notebooks, and Lotus Notes
discussion databases.
9
B1. Patents:
6,044,340 Apparatus and Method for Accelerated US 28-Mar-00
Convolutional Noise Elimination
6,058,366 Generic Run-Time Engine for US 2-May-00
Interfacing Between Applications and
Speech Engines
6,085,160 Language Independent Speech US 4-Jul-00
Recognition
EP1141940 Interleaved Forward Backward Search Europe 10-Oct-01
Algorithm Having Flat Model State
Organization for Large Vocabulary
Speech Recognition
ALLOWED Interleaved Forward Backward Search US
Algorithm Having Flat Model State
Organization for Large Vocabulary
Speech Recognition
6,272,463 Multi-Resolution System and Method US 7-Aug-01
for Speaker Verification and for
Acoustic-Only Encoding of User Words
3,168,004 A Pattern Recognition Device Using an Japan 9-Mar-01
Artificial Neural Network for Context
Dependent Modeling
ALLOWED Apparatus and Method for Accelerated Australia
Convolutional Noise Elimination
EP1010168 Apparatus and Method for Accelerated Europe 12-Sep-01
Convolutional Noise Elimination
10
EP0553101 A Pattern Recognition Device Using an Belgium 30-Oct-97
Artificial Neural Network for Context
Dependent Modeling
EP0553101 A Pattern Recognition Device Using an Europe 30-Oct-97
Artificial Neural Network for Context
Dependent Modeling
EP0553101 A Pattern Recognition Device Using an France 30-Oct-97
Artificial Neural Network for Context
Dependent Modeling
EP0553101 A Pattern Recognition Device Using an Germany 30-Oct-97
Artificial Neural Network for Context
Dependent Modeling
EP0553101 A Pattern Recognition Device Using an Netherlands 30-Oct-97
Artificial Neural Network for Context
Dependent Modeling
EP0553101 A Pattern Recognition Device Using an United Kingdom 30-Oct-97
Artificial Neural Network for Context
Dependent Modeling
ALLOWED Speech Controlled Computer User US
Interface
5,963,897 Apparatus and Method for Hybrid US 5-Oct-99
Excited Linear Prediction Speech
Encoding
D446,514 Family Information Processor Interface US 14-Aug-01
4,799,262* Speech Recognition US 17-Jan-89
11
5,008,941* Method and Apparatus for US 16-Apr-91
Automatically Updating Estimates of
Undesirable Components of the Speech
Signal in a Speech Recognition System
5,101,375* Method and Apparatus for Providing US 31-Mar-92
Binding and Capitalization in
Structured Report Generation
5,127,055* Speech Recognition Apparatus and US 30-Jun-92
Method Having Dynamic Reference
Pattern Adoption
5,136,654* Vocabulary Partitioned Speech US 4-Aug-92
Recognition Apparatus
5,168,548* Integrated Voice Controlled Report US 1-Dec-92
Generating and Communicating System
5,231,670* Voice Controlled System and Method US 27-Jul-93
for Generating Text From a Voice
Controlled Input
5,280,563* Method for Optimizing a Composite US 18-Jan-94
Speech Recognition Expert
5,337,394* Speech Recognizer US 9-Aug-94
5,386,492* Speech Recognition System Utilizing US 31-Jan-95
Vocabulary Model Preselection
5,388,183* Speech Recognition Providing Multiple US 7-Feb-95
Outputs
5,465,318* Method for Generating a Speech US 7-Nov-95
Recognition Model for a
Non-Vocabulary Utterance
12
5,546,499* Speech Recognition System Utilizing US 13-Aug-96
Pre-Calculated Similarity Measurements
5,572,624* Speech Recognition System US 5-Nov-96
Accommodating Different Sources
5,671,426* Method for Organizing Incremental US 23-Sep-97
Search Dictionary
5,677,991* Speech Recognition System Using US 14-Oct-97
Arbitration Between Continuous Speech
and Isolated Word Modules
5,682,464* Word Model Candidate Preselection for US 28-Oct-97
Speech Recognition Using Precomputed
Matrix of Threshold Distance Values
5,684,924* User Adaptable Speech Recognition US 4-Nov-97
System
5,794,196* Speech recognition system US 11-Aug-98
distinguishing dictation from
commands by arbitration between
continuous speech and isolated word
modules
5,890,181* System and Method for Remotely US 30-Mar-99
Grouping Contents of an Action
History Stack
5,970,448* Historical Database Storing US 19-Oct-99
Relationships of Successively Spoken
Words
5,970,460* Speech Recognition and Editing System US 19-Oct-99
6,125,342* Pronoun Semantic Analysis System and US 26-Sep-00
Method
13
6,125,347* System for Controlling Multiple User US 26-Sep-00
Application Programs by Spoken Input
6,138,098* Command Parsing and Rewrite System US 24-Oct-00
6,260,013* Speech Recognition System Employing US 10-Jul-01
Discriminatively Trained Models
6,292,779* System and Method for Modeless Large US 18-Sep-01
Vocabulary Speech Recognition
(formerly: Apparatus and Method for
Simultaneous Multimode Dictation)
ALLOWED* System of Command Parsing and Rewrite Australia
EP0617827 (692 29 124.5 - Method for Optimizing a Composite France 6-May-99
08)* Speech Recognition Expert
EP0617827 (692 29 124.5 - Method for Optimizing a Composite Germany 6-May-99
08)* Speech Recognition Expert
EP0617827 (692 29 124.5 - Method for Optimizing a Composite Italy 6-May-99
08)* Speech Recognition Expert
EP0617827 (692 29 124.5 - Method for Optimizing a Composite United Kingdom 6-May-99
08)* Speech Recognition Expert
EP0617827* Method for Optimizing a Composite Europe 6-May-99
Speech Recognition Expert
6,161,087*** Speech-Recognition-Assisted
14
Selective Suppression of Silent and US 12-Dec-00
Filled Speech Pauses During Playback
of an Audio Recording Recursively
Excited Linear Prediction
Speech Coder
B2. Patent Applications
Access Controlled Multiuser Computer
System with Automatic Speech
Recognition US 25-Jun-98 09/104,896
Apparatus and Method for
Distinguishing Similar-Sounding
Utterances Australia 24-Sep-98 94554/98
Apparatus and Method for
Distinguishing Similar-Sounding
Utterances Canada 24-Sep-98 2,303,312
Apparatus and Method for
Distinguishing Similar-Sounding
Utterances Europe 24-Sep-98 98 947 737.7
Apparatus and Method for
Distinguishing Similar-Sounding
Utterances Japan 15-Mar-00 2000-513269
Apparatus and Method for
Distinguishing Similar-Sounding
Utterances US 24-Sep-98 09/159,838
Apparatus and Method for Accelerated
Convolution Noise Elimination Australia 13-Feb-98 64160/98
Apparatus and Method for Accelerated
Convolution Noise Elimination Canada 13-Feb-98 2,278,231
Apparatus and Method for Accelerated
Convolution Noise Elimination Japan 13-Feb-98 10-536441
Apparatus and Method for Hybrid Australia 12-Jul-00 25417/99
Excited Linear Prediction
15
Speech Encoding
Apparatus and Method for Hybrid
Excited Linear Prediction Speech
Encoding Canada 25-Feb-99 2,317,435
Apparatus and Method for Hybrid
Excited Linear Prediction Speech
Encoding Europe 25-Feb-99 99 905 132.9
Apparatus and Method for Hybrid
Excited Linear Prediction Speech
Encoding Japan 25-Feb-99 2000-533868
Apparatus and Method for Simultaneous
Multimode Dictation Australia 9-Mar-99 29012/99
Apparatus and Method for Simultaneous
Multimode Dictation Canada 9-Mar-99 2,231,299
Apparatus and Method for Simultaneous
Multimode Dictation Europe 9-Mar-99 99 909 926.0
Apparatus and Method for Simultaneous
Multimode Dictation Japan 9-Mar-99 2000-536068
Audio Visual Interface for
Telecommunications US 8-Mar-00 29/119,782
Compound Words in Speech Recognition
Systems US 20-Apr-99 09/295,424
Context-Sensitive Probabilistic
Left-Corner Parsing Models for Speech
Recognition US 5-Oct-00 60/237,983
Discriminatively Trained Models in
Continuous Speech Recognition US 5-Apr-00 09/543,202
Generic Run-Time Engine for
Interfacing Between Applications and
Speech Engines Australia 25-Feb-99 27894/99
16
Generic Run-Time Engine for
Interfacing Between Applications and
Speech Engines Canada 25-Feb-99 2,319,002
Generic Run-Time Engine for
Interfacing Between Applications and
Speech Engines Europe 25-Feb-99 99 908 464.3
Generic Run-Time Engine for
Interfacing Between Applications and
Speech Engines Japan 25-Feb-99 2000-533802
Improved Word Boundary Acoustic Units Europe 29-Sep-99 99 952 974.6
Improved Word Boundary Acoustic Units US 29-Sep-99 09/408,388
Insert/Resume/Select Through Europe 15-Jun-99 99304637.4
Insert/Resume/Select Through France 15-Jun-99 99304637.4
Insert/Resume/Select Through Germany 15-Jun-99 99304637.4
Insert/Resume/Select Through Japan 15-Jun-99 168303/99
Insert/Resume/Select Through United Kingdom 15-Jun-99 99304637.4
Insert/Resume/Select Through US 15-Jun-98 09/094611
Interface Between a Control Process
and a Target Process Australia 31-Aug-99 59053/99
Interface Between a Control Process
and a Target Process Canada 31-Aug-99 2,342,246
Interface Between a Control Process
and a Target Process Europe 7-Mar-01 99 946701.2
Interface Between a Control Process
and a Target Process US 31-Aug-99 09/387,227
Inter-Word Triphone Models (former
title: Improved Word Boundary Acoustic
Units) Australia 29-Sep-99 65019/99
17
Inter-Word Triphone Models (former
title: Improved Word Boundary Acoustic
Units) Canada 29-Sep-99 PCT/US99/22501
Language Independent Speech
Architecture US 22-Feb-01 09/791,395
Language Independent Speech Recognition Europe 8-Jul-99 99933088.9
Language Independent Speech Recognition Japan 8-Jul-99 2000-559559
Method and System for Performing Text
Edits During Audio Record Playback US 5-Oct-98 09/166,363
Method for Generating Semi-Literal
Transcripts for Speech Recognition US 18-Jan-00 09/487,398
Method for Generating Text from a
Voice Input US 21-Jan-94 08/184,664
Method for Remotely Grouping Contents
of an Action History Stack Running on
a Computer System Australia 18-May-99 51791/98
Method for Remotely Grouping Contents
of an Action History Stack Running on
a Computer System Canada 14-Nov-97 2,270,461
Method for Remotely Grouping Contents
of an Action History Stack Running on
a Computer System Europe 18-May-99 0938712
Method for Remotely Grouping Contents
of an Action History Stack Running on
a Computer System Japan 14-Oct-97 10-522817
18
Multi-Resolution System and Method for
Speaker Verification and for
Acoustic-Only Encoding of User Words Australia 3-Mar-99 28503/99
Multi-Resolution System and Method for
Speaker Verification and for
Acoustic-Only Encoding of User Words Canada 3-Mar-99 2,318,262
Multi-Resolution System and Method for
Speaker Verification and for
Acoustic-Only Encoding of User Words Europe 3-Mar-99 99 909 158.0
Multi-Resolution System and Method for
Speaker Verification and for
Acoustic-Only Encoding of User Words Japan 3-Mar-99 2000-534997
Multiuser Computer System with
Automatic Speech Recognition Canada 25-Jun-98 2,288,183
Multiuser Computer System with
Automatic Speech Recognition Europe 25-Jun-98 98 930 984.4
Multiuser Computer System with
Automatic Speech Recognition Japan 25-Jun-98 11-505402
Noise Level Adaptive Residual Echo
Suppressor US 11-Aug-00 60/224,597
Open Structured System Information
Manager for Information Entry US 23-Sep-99 09/404,566
Recursively Excited Linear Prediction
Coder US 2-Feb-01 09/775,458
Small Vocabulary Speaker Dependent
Speech Recognition US 24-Oct-00 09/695,732
Speaker Specific Language Model
Adaptation US 9-Apr-01 60/282,423
Speech Controlled Computer User
Interface Australia 5-Oct-99 62251/99
19
Speech Controlled Computer User
Interface Canada 5-Oct-99 PCT/IB99/01752
Speech Controlled Computer User
Interface Europe 5-Oct-99 99 949 290.3
Speech Dialed Telephone US 12-Oct-00 60/240,112
Speech Processor Apparatus and System US 11-May-01 09/854,137
Speech Recognition Dictionary
Enlargement Using Derived Words Australia 24-Mar-99 29534/99
Speech Recognition Dictionary
Enlargement Using Derived Words Canada 24-Mar-99 2,320,151
Speech Recognition Dictionary
Enlargement Using Derived Words Europe 24-Mar-99 99 910 634.7
Speech Recognition Dictionary
Enlargement Using Derived Words Japan 24-Mar-99 2000-541666
Speech Recognition Dictionary
Enlargement Using Derived Words US 24-Mar-99 09/275,208
Speech Recognition Providing Multiple
Outputs Japan 30-Sep-92 4-262178
Speech Recognition System Employing
Discriminatively Trained Models Australia 13-Mar-98 64636/98
Speech Recognition System Employing
Discriminatively Trained Models Canada 13-Mar-98 2,275,712
Speech Recognition System Employing
Discriminatively Trained Models Europe 13-Mar-98 98910384.1
20
Speech Recognition System Employing
Discriminatively Trained Models Japan 13-Mar-98 10-539863
Speech User Interface for Portable US 26-Feb-01 09/793,377
Personal Devices
System and Method for Multi-Modal User US 21-Jul-00 60/219,881
Interface
System of Command Parsing and Rewrite Canada 26-Jun-98 2,289,066
System of Command Parsing and Rewrite Europe 26-Jun-98 98 932 454.6
System of Command Parsing and Rewrite Hong Kong 26-Jun-98 00106273.5
System of Command Parsing and Rewrite Japan 26-Jun-98 11-506815
User Interface for Speech Recognition Australia 30-Sep-99 10973/00
System Grammars
User Interface for Speech Recognition Canada 30-Sep-99 PCT/US99/22545
System Grammars
User Interface for Speech Recognition Europe 30-Sep-99 99 954 682.3
System Grammars
User Interface for Speech Recognition US 30-Sep-99 09/410,213
System Grammars
Voice Command Navigation of Electronic Australia 30-Sep-99 61164/99
Mail Reader
Voice Command Navigation of Electronic Canada 30-Sep-99 PCT/IB99/01689
Mail Reader
Voice Command Navigation of Electronic Europe 30-Sep-99 09/408,923
Mail Reader
Voice Command Navigation of Electronic US 30-Sep-99 09/408,923
Mail Reader
21
C. Copyright Registrations/Mask Works
[To be provided.]
D1. Trademarks
PDSAY
Application(s) for Registration:
None
Registration(s):
None
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are using, or
intend to use in connection with goods or services associated
with this asset group, or (2) be trademarks that Sellers have
registered or sought to register for use in connection with
goods or services associated with this asset group.]
D2. Domain Names
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
E. Licenses In
The following licenses from other asset groups:
a. Covenant not to ▇▇▇ for making, using, selling or
offering to sell, any inventions embodied in patents
(or existing patent applications) contained within
the ICM Asset Group (from the ICM Asset Group).
F. Obligations
a. Provide license to all L&H Text Corpora and L&H
Acoustic Data necessary for the ISI business as
currently conducted and as currently proposed to be
conducted, for the following six (6) languages
(American English, Japanese, Korean, French, Spanish,
German) to the ISI Speech Processing/Dialog Asset
Group.
b. Provide license to Voice Xpress/Burlington Language
Modeling Tools, in source code form, and license to
the accompanying Language Modeling Research Database:
(Server: LNAPPBOS01/SERVER/US/LHS Filename:
databases/lmresear.nsf) containing information
relating to the Voice Xpress/Burlington Language
Modeling Tools, to the ISI Speech Processing/Dialog
Asset Group.
22
DRAGON SPEECH PROCESSING/DIALOG ASSET GROUP(3)
(Owned entirely by L&H Holdings USA, Inc., except+, which is owned by Dragon
Systems UK Research & Development Ltd., or except as otherwise expressly
indicated.)
A1. Dragon Speech Processing/Dialog Technology
Sellers' technology that performs certain function(s) in
response to speech input, and that was originally owned or
created by Dragon Systems, Inc. or its successor-in-interest,
L&H Holdings USA, Inc. ("Dragon"), including, without
limitation, the MREC Speech Recognition Engine, SMS Dictation
Pilot and the Manhattan Project, (collectively, "Dragon Speech
Processing/Dialog Technology"), consisting, without
limitation, of the following:
a. All human-generated inputs used to create, test, and
enhance Dragon Speech Processing/Dialog Technology,
including, without limitation, software source code,
linguistic rules, makefiles, and scripts.
b. All data created or acquired by Dragon to create,
test, or tune Dragon Speech Processing/Dialog
Technology.
c. All proprietary tools, in object and source code
form, used to create, test, or enhance Dragon Speech
Processing/Dialog Technology, including, without
limitation, PMREC/TMREC, MREC Acoustic Model Building
Tools, and MREC Language Model Building Tools (but
excluding the VX Language Modeling Toolkit).
d. All research projects, research results, and
intermediate projects derived directly from Dragon
Speech Processing/Dialog Technology, in object code
form and machine-generated source code form,
including, without limitation, acoustic models,
language models, and voice fonts.
A2. Dragon Speech Processing/Dialog Products
All products that directly incorporate any Dragon Speech
Processing/Dialog Technology, including, without limitation,
the SpeechOne products (but excluding those products contained
in the AudioMining Asset Group), (collectively, "Dragon Speech
Processing/Dialog Products"), consisting, without limitation,
of the following:
a. All human-generated inputs used to create, test, and
enhance Dragon Speech Processing/Dialog Products,
including, without limitation, source code for
software, linguistic rules, makefiles, scripts, and
external documentation.
----------
(3) These assets are subject to the obligations contained in Section F.
23
b. Dragon Speech Processing/Dialog Products data,
comprising all data used to create, test, and enhance
Dragon Speech Processing/Dialog Products.
c. All proprietary tools used to create, test, or
enhance Dragon Speech Processing/Dialog Products,
including, without limitation, the executable code,
documentation, and source code for SAPITEST.
d. All demonstration versions, sample applications, and
prototypes derived directly from or created for
Dragon Speech Processing/Dialog Products.
A3. Documentation
All internal documentation concerning Dragon Speech
Processing/Dialog Technology and Dragon Speech
Processing/Dialog Products, including, without limitation,
documents, notebooks, and Lotus Notes(R) discussion databases.
B1. Patents
5,809,453+ Method and Apparatus for Detecting Harmonic US 15-Sep-98
Structure in a Waveform
5,027,406 Method for Interactive Speech Recognition US 25-Jun-91
and Training
5,202,952 Large-Vocabulary Continuous Speech US 13-Apr-93
Prefiltering and Processing System
5,428,707 Apparatus and Methods for Performing US 27-Jun-95
Improved Speech Recognition
5,526,463 System for Processing a Succession of US 11-Jun-96
Utterances Spoken in Continuous or Discrete
Form
5,680,511 Systems and Methods for Word Recognition US 21-Oct-97
5,715,367 Apparatuses and Methods for Developing and US 3-Feb-98
Using Models for Speech Recognition
5,754,972 Speech Recognition System for Languages with US 19-May-98
Compound Words
24
5,765,132 Building Speech Models for New Words in a US 9-Jun-98
MultiWord Utterance
5,794,189 Continuous Speech Recognition US 11-Aug-98
5,799,279 Continuous Speech Recognition of Text and US 25-Aug-98
Commands
5,818,423 Voice Controlled Cursor Movement US 6-Oct-98
5,822,730 Lexical Tree Pre-filtering in Speech US 13-Oct-98
Recognition
5,850,627 Apparatuses and Methods for Training and US 15-Dec-98
Operating Speech Recognition Systems
5,903,864 Speech Recognition US 11-May-99
5,909,666 Speech Recognition System Which Creates US 1-Jul-99
Acoustic Model by Concatenating Acoustic
Models of Individual Words
5,915,236 Word Recognition System Which Alters Code US 22-Jun-99
Executed as a Function of Available
Computational Resources
5,920,836 Word Recognition System Using Language US 6-Jul-99
Context at Current Cursor Position to Affect
Recognition Probabilities
5,920,837 Word Recognition System Which Stores Two US 6-Jul-99
Models for Some Words and Allows Selective
Deletion of One Such Model
5,946,654 Speaker Identification Using Unsupervised US 31-Aug-99
Speech Models
5,949,886 Setting a Microphone Volume Level US 7-Sep-99
25
5,960,394 Method of Speech Command Recognition with US 28-Sep-99
Dynamic Assignment of Probabilities
According to the State of the Controlled
Applications
5,983,179 Speech Recognition System which turns its US 9-Nov-99
Voice Response On for Confirmation when it
has been turned Off without Confirmation
6,029,124 Sequential, Non-Parametric Speech US 22-Feb-00
Recognition and Speaker Identification
6,052,657 Text Segmentation and Identification of US 18-Apr-00
Topic Using Language Models
6,064,959 Error Correction in Speech Recognition US 16-May-00
6,073,097 Speech Recognition System which selects One US 6-Jun-00
of a Plurality of Vocabulary Models
6,088,671 Continuous Speech Recognition of Text and US 11-Jul-00
Commands
6,092,043 Apparatuses and Method for Training and US 18-Jul-00
Operating Speech Recognition Systems
6,092,044 Pronunciation Generation in Speech US 18-Jul-00
Recognition
6,101,468 Apparatuses and Method for Training and US 8-Aug-00
Operating Speech Recognition Systems
6,122,613 Speech Recognition Using Multiple Recognizers US 19-Sep-00
6,151,575 Rapid Adaptation of Speech Models US 21-Nov-00
26
6,163,768 Non-Interactive Enrollment in Speech US 19-Dec-00
Recognition
6,167,377 Speech Recognition Language Models US 26-Dec-00
6,212,498 Enrollment in Speech Recognition US 3-Apr-01
6,224,636 Speech Recognition using Nonparametric US 1-May-01
Speech Models
ALLOWED Case Insensitive Alphabetic Filtering in US
Word Recognition
ALLOWED Word Recognition System Determines which US
Program Unit has Focus
2297465B+ Detecting Periodicity or Harmonic Structure United 28-Apr-99
in a Waveform Kingdom
9607233+ Speech Recognition Apparatus and Methods France 4-Jun-99
0376501 Method for Interactive Speech Recognition Austria 30-Nov-89
and Training
0376501 Method for Interactive Speech Recognition Belgium 30-Nov-89
and Training
0376501 Method for Interactive Speech Recognition France 30-Nov-89
and Training
0376501 Method for Interactive Speech Recognition Germany 30-Nov-89
and Training
0376501 Method for Interactive Speech Recognition Italy 30-Nov-89
and Training
0376501 Method for Interactive Speech Recognition Luxembourg 30-Nov-89
and Training
0376501 Method for Interactive Speech Recognition ▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇▇-▇▇
and Training
0376501 Speech Recognition System United 30-Nov-89
Kingdom
27
0535146 Large-Vocabulary Continuous Speech France 1-Oct-97
Prefiltering and Processing System
0535146 Large-Vocabulary Continuous Speech Germany 1-Oct-97
Prefiltering and Processing System
0535146 Large-Vocabulary Continuous Speech United Kingdom 1-Oct-97
Prefiltering and Processing System
EP0376501 Method for Interactive Speech Recognition Europe 30-Nov-89
and Training
▇▇▇▇▇▇▇▇▇ Continuous Speech Processing System Europe 1-Oct-97
6,195,635 User-Cued Speech Recognition US 27-Feb-01
B2. Patent Applications
99307567.0 Compound Word Recognition Europe 24-Sep-99
09/163422 Compound Word Recognition US 30-Sep-98
96308182.3 Continuous Speech Recognition Europe 11-Nov-96
96308182.3 Continuous Speech Recognition France 11-Nov-96
96308182.3 Continuous Speech Recognition Germany 11-Nov-96
96308182.3 Continuous Speech Recognition Italy 11-Nov-96
96308182.3 Continuous Speech Recognition United Kingdom 11-Nov-96
96308181.5 Continuous Speech Recognition of Text and Europe 11-Nov-96
Commands
96308181.5 Continuous Speech Recognition of Text and France 11-Nov-96
Commands
96308181.5 Continuous Speech Recognition of Text and Germany 11-Nov-96
Commands
96308181.5 Continuous Speech Recognition of Text and Italy 11-Nov-96
Commands
28
96308181.5 Continuous Speech Recognition of Text and United 11-Nov-96
Commands Kingdom
98302361.5 Enrollment in Speech Recognition Europe 27-Mar-98
98302361.5 Enrollment in Speech Recognition France 27-Mar-98
98302361.5 Enrollment in Speech Recognition Germany 27-Mar-98
98302361.5 Enrollment in Speech Recognition Italy 27-Mar-98
98302361.5 Enrollment in Speech Recognition Spain 27-Mar-98
98302361.5 Enrollment in Speech Recognition United 27-Mar-98
Kingdom
98302362.3 Error Correction in Speech Recognition Europe 27-Mar-98
98302362.3 Error Correction in Speech Recognition France 27-Mar-98
98302362.3 Error Correction in Speech Recognition Germany 27-Mar-98
98302362.3 Error Correction in Speech Recognition Italy 27-Mar-98
98302362.3 Error Correction in Speech Recognition Spain 27-Mar-98
98302362.3 Error Correction in Speech Recognition United 27-Mar-98
Kingdom
09/390370 Expanding an Effective Vocabulary of a US 9-Jul-99
Speech Recognition System
Large-Vocabulary Continuous Speech Japan
Prefiltering and Processing System
97306528.7 Lexical Tree Pre-filtering in Speech Europe 22-Aug-97
Recognition
2178696 Methods and Apparatus for Detecting Harmonic Canada 10-Jun-96
Structure in a Waveform
29
2735268 Methods and Apparatus for Detecting Harmonic France 11-Jun-96
Structure in a Waveform
99304623 Non-Interactive Enrollment in Speech Europe 15-Jun-99
Recognition
168768/99 Non-Interactive Enrollment in Speech Japan 15-Jun-99
Recognition
09/094609 Non-Interactive Enrollment in Speech US 15-Jun-98
Recognition
09/432,155 Performing Recorded Actions US 10-Jun-99
98302441.5 Pronunciation Generation in Speech Europe 30-Mar-98
Recognition
98302441.5 Pronunciation Generation in Speech France 30-Mar-98
Recognition
98302441.5 Pronunciation Generation in Speech Germany 30-Mar-98
Recognition
98302441.5 Pronunciation Generation in Speech Italy 30-Mar-98
Recognition
98302441.5 Pronunciation Generation in Speech Spain 30-Mar-98
Recognition
98302441.5 Pronunciation Generation in Speech United 30-Mar-98
Recognition Kingdom
08/958,957 Rapid Adaptation of Speech Models US 28-Oct-97
09/316,191 Selecting a Target Sequence of Words that US 21-May-99
Corresponds to an Utterance
Speech Processing (formerly Lombard Speech United 15-Oct-99
Level Prediction) Kingdom
9822529.5 Speech Processing (formerly Lombard Speech US 16-Oct-98
Level Prediction)
96306255.9 Speech Recognition Europe 29-Aug-96
30
2,178,696 Speech Recognition Apparatus and Methods Canada 10-Jun-96
98302363.1 Speech Recognition Language Models Europe 27-Mar-98
98302363.1 Speech Recognition Language Models France 27-Mar-98
98302363.1 Speech Recognition Language Models Germany 27-Mar-98
98302363.1 Speech Recognition Language Models Italy 27-Mar-98
98302363.1 Speech Recognition Language Models Spain 27-Mar-98
98302363.1 Speech Recognition Language Models United 27-Mar-98
Kingdom
08/825535 Speech Recognition Language Models US 28-Mar-97
Speech Recognition System for Languages with Europe
Compound Words
Speech Recognition System for Languages with Japan
Compound Words
98903803.9 Speech Recognition Using Multiple Recognizers Europe 29-Jan-98
98903803.9 Speech Recognition Using Multiple Recognizers France 29-Jan-98
98903803.9 Speech Recognition Using Multiple Recognizers Germany 29-Jan-98
98903803.9 Speech Recognition Using Multiple Recognizers United 29-Jan-98
Kingdom
98301511.6 Speech Recognition using Nonparametric Europe 2-Mar-98
Speech Models
98301511.6 Speech Recognition using Nonparametric France 2-Mar-98
Speech Models
98301511.6 Speech Recognition using Nonparametric Germany 2-Mar-98
Speech Models
31
98301511.6 Speech Recognition using Nonparametric Italy 2-Mar-98
Speech Models
98301511.6 Speech Recognition using Nonparametric United 2-Mar-98
Speech Models Kingdom
Systems and Methods for Word Recognition France
Systems and Methods for Word Recognition Germany
Systems and Methods for Word Recognition United
Kingdom
96302536.6 Voice Controlled Cursor Movement Europe 11-Apr-96
09/535,155 Call Analysis US 24-Mar-00
09/094,611 Position Manipulation in Speech Recognition US 15-Jun-98
09/845,769 Error Correction in Speech Recognition Using US 2-May-01
a Hand-Held Device
09/878,173 Sentence-Level Confidence US 12-Jun-01
09/664,545 Homophone Selection in Speech Recognition US 18-Sep-00
09/696,685 Speech Recognition Using Word-in-Phrase US 26-Oct-00
Command
C. Copyright Registrations/Mask Works
[Intentionally left blank.]
D1. Trademarks
DRAGON
Application(s) for Registration (each owned by Lernout &
Hauspie Speech Products N.V.):
Brazil, Application Nos. 823262693 and 823262669
Guatemala, Application Nos. 2000-10163 and 200-10164
Mexico, Application Nos. 459344
32
Peru, Application Nos. 113386 and 113385
Venezuela, Application Nos. 16577/2000
Registration(s):
Australia, Serial No. 737276
Austria, Serial No. 161043
Benelux, Serial Nos. 492612 and 575110
EU, Serial No. 00052438
France, Serial No. 95 558 530
Germany, Serial No. 2060856
Italy, Serial ▇▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ (owned by Lernout &
Hauspie Speech Products N.V.)
Peru, Serial No. 00025472 (owned by Lernout &
Hauspie Speech Products N.V.)
South Africa, Serial ▇▇. ▇▇/▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
Switzerland, Serial No. 430.269
UK, Serial No. 2010510
DRAGON (plus design)
Application(s) for Registration:
None
Registration(s):
United States of America, Serial No. 1,423,358
DRAGON Design (design only)
Application(s) for Registration (each owned by Lernout &
Hauspie Speech Products N.V.):
Brazil, Application Nos. 823262642 and 823262634
Guatemala, Application Nos. 200-10159 and 2000-10155
Venezuela, Application Nos. 16583/2000
Registration(s):
United States of America, Serial Nos. 1,423,358
and 1,428,201
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Serial No. 159,703
Benelux, Serial No. 586953
Colombia, Serial No. ▇▇▇▇▇▇
▇▇▇▇▇▇, Serial No. 95 558 532
Germany, Serial No. 2060857
Italy, Serial No. 713,230
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, Serial No. 97/1353
Spain, Serial Nos. 1953594 and 1953593
33
Sweden, Serial No. 309670
Switzerland, Serial No. 430752
UK, Serial No. 2010511
Peru, Serial No. 00025482 and 0007251 (both owned
by Lernout & Hauspie Speech Products N.V.)
Colombia, Serial No. 221743
DRAGON NATURALLY SPEAKING Application(s) for Registration:
None
Registration(s)
China, Serial No. 1244419
EU, Serial No. 000524611
Japan, Serial No. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Serial No. 605964
DRAGON SYSTEMS
Application(s) for Registration:
None
Registration(s):
United States of America, Serial Nos. 1,419,515 and
1,428,200 and 1,480,770
Australia, Serial No. 715850
China, Serial No. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Serial No. 600955
DRAGONDICTATE
Application(s) for Registration:
None
Registration(s):
United States of America, Serial No. 1,769,822
Australia, Serial No. 701189
L&H VOICE XPRESS Application(s) for Registration:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, Application No. 76/103,307
Registration(s):
None
34
NATURALLY SPEAKING Application(s) for Registration:
None
Registration(s):
United States of America, Serial No. 2,254,151
NATURALLY SPEAKING
Application(s) for Registration (each owned by Lernout &
Hauspie Speech Products N.V.):
Bolivia, Application No. SM-3990
Brazil, Application No. 823262685
Guatemala, Application No. 2000-10162
Peru, Application No. 113384
NOTHING BUT SPEECH (NBS)***
Application(s) for Registration:
United States of America, Application No. 75/720,412
Registration(s):
None
POINT & SPEAK
Application(s) for Registration:
None
Registration(s):
United States of America, Serial No. 2,347,215
SAY WHAT YOU SEE*
Application(s) for Registration:
None
Registration(s):
United States of America, Serial No. 2,253,907
SELECT-AND-SAY
Application(s) for Registration:
None
Registration(s):
United States of America, Serial No. 2,440,109
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are
35
using, or intend to use in connection with goods or services
associated with this asset group, or (2) be trademarks that
Sellers have registered or sought to register for use in
connection with goods or services associated with this asset
group.]
D2. Domain Names
Voice ▇▇▇▇▇▇.▇▇▇
Voice ▇▇▇▇▇▇.▇▇▇ domain names
[To be provided.]
E. Licenses In
The following licenses from other asset groups:
a. Covenant not to ▇▇▇ for making, using, selling or
offering to sell, any inventions embodied in patents
(or existing patent applications) contained within
the ICM Asset Group (from the ICM Asset Group).
b. Covenant not to ▇▇▇ for making, using, selling or
offering to sell, any inventions embodied in patents
(or existing patent applications) contained within
the ISI Speech Processing/Dialog Asset Group (from
the ISI Speech Processing/Dialog Asset Group).
F. Obligations
a. Provide research and development agreement to the
AudioMining Asset Group.
b. Provide a license to MREC engine for use with
specific AudioMining(TM) Technology, in object code
form, developed by the MREC development teams for
AudioMining(TM) Technology to the AudioMining Asset
Group.
c. Provide a license to Dragon NaturallySpeaking(R)
Developer Suite and Dragon Vocabulary Builder, in
object code form, to the AudioMining Asset Group.
d. Assume all rights and obligations under the
Technology License Agreement, dated as of September
20, 2001, Between Lernout & Hauspie Speech Products
N.V., L&H Applications USA, Inc., L&H Holdings USA,
Inc., Linguistic Technologies, Inc. and Dictaphone
Corporation, as amended ("License Agreement"), of
L&H (as L&H is defined in such License Agreement).
e. Provide a Covenant not to ▇▇▇ for making, using,
selling or offering to sell, any inventions embodied
in patents (or existing patent applications)
contained in the list below to the ISI Asset Group.
36
5,822,730 Lexical Tree Pre-filtering in Speech Recognition US 13-Oct-98
5,715,367 Apparatuses and Methods for Developing and US 3-Feb-98
Using Models for Speech Recognition
5,903,864 Speech Recognition US 11-May-99
5,946,654 Speaker Identification Using Unsupervised US 31-Aug-99
Speech Models
6,088,671 Continuous Speech Recognition of Text and US 11-Jul-00
Commands
5,960,394 Method of Speech Command Recognition with US 28-Sep-99
Dynamic Assignment of Probabilities According
to the State of the Controlled Applications
5,915,236 Word Recognition System Which Alters Code US 22-Jun-99
Executed as a Function of Available
Computational Resources
6,092,044 Pronunciation Generation in Speech Recognition US 18-Jul-00
6,122,613 Speech Recognition Using Multiple Recognizers US 19-Sep-00
6,195,635 User-cued Speech Recognition US 27-Feb-01
37
ANNEX C
ISI SPEECH PROCESSING/DIALOG ASSET GROUP(4)
(Owned entirely by Interactive Systems, Inc., except as otherwise expressly
indicated.)
A1. ISI Speech Processing/Dialog Technology
Sellers' technology that performs certain function(s) in
response to speech input and which was originally owned or
created by Interactive Systems, Inc. ("ISI") including,
without limitation, the XCalibur Conversational Speech
Recognition engine, Open Dialog System (ODS), VoiceXML
Browser, and Open Dialog Tools Application Development
Toolkit, (collectively, "ISI Speech Processing/Dialog
Technology"), consisting, without limitation, of the
following:
a. All human-generated inputs used to create, test, and
enhance ISI Speech Processing/ Dialog Technology,
including, without limitation, software source code,
linguistic rules, makefiles, and scripts.
b. All data created or acquired by ISI to create, test,
or tune ISI Speech Processing/Dialog Technology.
c. All proprietary tools, in object code and source code
form, used to create, test, or enhance ISI Speech
Processing/Dialog Technology, including, without
limitation, Jpython- and Java-based training,
adaptation and testing environment, batch recognition
environment, ISI FSM text segmenter, Miso parser, and
the XCalibur modeling toolkit.
d. All research projects, research results, and
intermediate projects derived directly from ISI
Speech Processing/Dialog Technology, in object code
form and machine-generated source code form,
including, without limitation, acoustic models,
language models, and voice fonts.
A2. ISI Speech Processing/Dialog Asset Group Products
All products that directly incorporate any ISI Speech
Processing/Dialog Technology (but excluding custom automotive
applications contained in the L&H Speech Processing/Dialog
Asset Group), (collectively, "ISI Speech Processing/Dialog
Products"), consisting, without limitation, of the following:
-----------
(4) These assets are subject to the obligations contained in Section F. In
addition, acquisition of the assets contained within the ISI Speech
Processing/Dialog Asset Group is subject to assumption of the following
obligation, described more fully in Supplement A to the ISI Speech
Processing/Dialog Asset Group: payment in the aggregate maximum amount of
$950,000 to certain full-time employees or contractors of ISI on or before April
4, 2002. Acquirer is not required to retain the employees of ISI to submit a
qualified bid. In order to retain the employees of Interactive Systems, Inc.,
however, the acquirer would, among other things, also be obligated to retain
common senior technical management, substantial continuity of the workforce, and
occupation pursuant to a successor lease of the premises at Pittsburgh,
Pennsylvania, for a period of at least six (6) months immediately following the
acquisition, as well as agree to count years of service with the ISI as years of
service with acquirer.
38
a. All human-generated inputs used to create, test, and
enhance ISI Speech Processing/Dialog Products,
including, without limitation, software source code,
linguistic rules, makefiles, scripts, and external
documentation.
b. Speech Processing/Dialog ISI Speech Processing/Dialog
Product data, comprising all data used to create,
test, and enhance ISI Speech Processing Products.
c. All proprietary software tools, in object code and
source code form, used to create, test, or enhance
ISI Speech Processing/Dialog Products, including,
without limitation, Jpython- and Java-based training,
adaptation and testing environment, batch recognition
environment, ISI FSM text segmenter, and Miso parser.
d. All demonstration versions, sample applications, and
prototypes that were derived directly from or created
for ISI Speech Processing/Dialog Products.
A3. Documentation
All internal documentation concerning ISI Speech
Processing/Dialog Technology and ISI Speech Processing/Dialog
Products, including, without limitation, documents, notebooks,
and Lotus Notes(R) discussion databases.
B1. Patents
ALLOWED Method and Apparatus of Hierarchically Organizing US 6-NOV-98
and Adapting an Acoustic Model for Speech
Recognition and Adaptation of the Model to Unseen
Domains
B2. Patent Applications
09/680,925 Attribute-Based Word Modeling US 6-Oct-00
09/203,468 Automatic Grammar Expansion for Language Variations US 2-Dec-98
199 82 503.3 Method and Apparatus of Hierarchically Organizing and Germany 6-Jul-00
Adapting an Acoustic Model for Speech Recognition and
Adaptation of the Model to Unseen Domains
2000-581636 Method and Apparatus of Hierarchically Organizing and Japan 5-Nov-99
Adapting an Acoustic Model for Speech Recognition and
Adaptation of the Model to Unseen Domains
39
C. Copyright Registrations/Mask Works
[Intentionally left blank.]
D1. Trademarks
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are using, or
intend to use in connection with goods or services associated
with this asset group, or (2) be trademarks that Sellers have
registered or sought to register for use in connection with
goods or services associated with this asset group.]
D2. Domain Names
[To be provided.]
E. Licenses In
The following licenses from other asset groups:
a. License to Voice Xpress/Burlington Language Modeling
Tools, in source code form, and license to the
accompanying Language Model Research Database
(located in Server: LNAPPBOS01/SERVER/US/LHS
Filename: databases/lmresear.nsf) containing
information relating to the Voice Xpress/Burlington
Language Modeling Tools, (from the L&H Speech
Processing/Dialog Asset Group).
b. License to all L&H Text Corpora and L&H Acoustic Data
necessary for the ISI business as currently conducted
and as currently proposed to be conducted, for the
following six (6) languages: (American English,
Japanese, Korean, French, Spanish, German) (from the
L&H Speech Processing/Dialog Asset Group).
c. License to all L&H Lexical Data necessary for the
ISI business as currently conducted and as currently
proposed to be conducted, for the following six (6)
languages: (American English, Japanese, Korean,
French, Spanish, German) (from the Text-to-Speech
Asset Group).
d. Covenant not to ▇▇▇ for making, using, selling or
offering to sell, any inventions embodied in patents
(or existing patent applications) contained within
the ICM Asset Group (from the ICM Asset Group).
e. Covenant not to ▇▇▇ for making, using, selling or
offering to sell, any inventions embodied in patents
(or existing patent applications) contained in the
list below (from the Dragon Speech Processing/Dialog
Asset Group).
40
5,822,730 Lexical Tree Pre-filtering in Speech Recognition US 13-Oct-98
5,715,367 Apparatuses and Methods for Developing and US 3-Feb-98
Using Models for Speech Recognition
5,903,864 Speech Recognition US 11-May-99
5,946,654 Speaker Identification Using Unsupervised US 31-Aug-99
Speech Models
6,088,671 Continuous Speech Recognition of Text and US 11-Jul-00
Commands
5,960,394 Method of Speech Command Recognition with US 28-Sep-99
Dynamic Assignment of Probabilities According
to the State of the Controlled Applications
5,915,236 Word Recognition System Which Alters Code US 22-Jun-99
Executed as a Function of Available
Computational Resources
6,092,044 Pronunciation Generation in Speech Recognition US 18-Jul-00
6,122,613 Speech Recognition Using Multiple Recognizers US 19-Sep-00
6,195,635 User-cued Speech Recognition US 27-Feb-01
F. Obligations
a. Assume all rights and obligations of ISI under the
following agreements with Advanced Media, Inc.:
Master Agreement for Software Development and
Consulting Services and Remarketing of Software,
dated January 23, 1998, as amended or extended;
Software License Agreement, dated January 23, 1998,
as amended or extended; and Memorandum of Agreement,
dated January 23, 1998, as amended or extended.
b. Provide a Covenant not to ▇▇▇ for making, using,
selling or offering to sell, any inventions embodied
in patents (or existing patent applications)
contained within the ISI Speech Processing/Dialog
Asset Group to the Dragon Speech Processing/Dialog
Asset Group.
41
AUDIOMINING ASSET GROUP(5)
(Owned entirely by L&H Holdings USA, Inc.)
A1. AudioMining(TM) Products
MediaIndexer(TM), MediaIndexer(TM) acoustic model and
vocabulary upgrades, zipper software, conversion software,
MediaIndexer(TM) Enterprise (Distributed Recognition or "DR"),
AMTrial(TM), PhoneMining(TM), Web "Search Server,"
SpeechScanner(TM) media search and navigation components, and
all AudioMining(TM) related works in progress, (collectively,
"AudioMining Products"), consisting, without limitation, of
the following:
a. All human-generated inputs used to create, test, and
enhance AudioMining(TM) Products, including, without
limitation, software source code, linguistic rules,
makefiles, scripts.
b. AudioMining(TM) Products Data, comprising all data
used to create, test, and enhance AudioMining(TM)
Products (but excluding any data used for the
creation of MREC or its components, such as language
models and acoustic models).
c. All demonstration versions, sample applications, and
prototypes derived directly from or developed for
AudioMining(TM)Products.
A2. Documentation
All internal documentation relating to AudioMining(TM)
Products, including, without limitation, documents, notebooks,
and Lotus Notes(R) discussion databases.
B1. Patents
6,112,172 Interactive Searching Call Analysis US 29-Aug-00
B2. Patent Applications
[Intentionally left blank.]
C. Copyright Registrations/Mask Works
[Intentionally left blank.]
----------
(5) These assets are subject to the obligations contained in Section F.
D1. Trademarks
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are using, or
intend to use in connection with goods or services associated
with this asset group, or (2) be trademarks that Sellers have
registered or sought to register for use in connection with
goods or services associated with this asset group.]
D2. Domain Names
[To be provided.]
E. Licenses In
The following licenses from other asset groups:
a. License to MREC engine for use with specific
AudioMining(TM) Technology, in object code form,
developed by the MREC development teams for
AudioMining(TM) technology (from the Dragon Speech
Processing/Dialog Assets).
b. License to Dragon NaturallySpeaking(R)Developer
Suite and Dragon Vocabulary Builder, in object code
form (from the Dragon Speech Processing/Dialog Asset
Group).
c. Research and development agreement (from the Dragon
Speech Processing/Dialog Asset Group).
F. Obligations
[Intentionally left blank.]
ICM ASSET GROUP(6)
(Owned entirely by Lernout & Hauspie Speech Products N.V.)
A1. ICM Products
Proofing products, information products, and information
management products that were originally owned or created by
Inso Corporation, including, without limitation, International
CorrectSpell, International Hyphenator, CorrecText Grammar
Correction System, CorrectEnglish, International ProofReader,
CyberSpell, In Words, Sci Words, International ProofReader for
Java, Native English, IntelliFinder, IntelliScope Search
Enhancer, IntelliScope Query Expander, IntelliScope Retrieval
Enhancer, Quest, WebClean, IntelliScope Language Recognizer,
IntelliScope Document Summarizer, and IntelliScope Document
Categorizer (collectively, "ICM Products"), including, without
limitation:
a. All human-generated inputs used to create, test, and
enhance ICM Products, including, without limitation,
software source code, linguistic rules, makefiles,
scripts, and external documentation.
b. ICM Products data, comprising all data used to
create, test, and enhance ICM Products.
c. All proprietary tools, in object code and source code
form, used to create, test, or enhance ICM Products,
including, without limitation, Database Inflector,
Compression Programs, Data Structuring Tools, CDB,
Database Customizer.
d. All demonstration versions, sample applications, and
prototypes derived directly from or created for ICM
Products.
A2. Documentation
All internal documentation relating to ICM Products,
including, without limitation, documents, notebooks, and Lotus
Notes(R) discussion databases.
B1. Patents
6,185,524 Method and Apparatus for Automatic Identification of US 6-Feb-01
Word Boundaries in Continuous Text and Computation of
Word Boundary Scores
----------
(6) These assets are subject to the obligations contained in Section F.
4,580,241 Graphic Word Spelling Correction Using Automated US 1-Apr-86
Comparisons with Phonetic Word Skeletons
4,724,523 Method and Apparatus for the Electronic Storage and US 9-Feb-88
Retrieval of Expressions and Linguistic Information
4,730,269 Method and Apparatus for Generating Word Skeletons US 9-Mar-88
Utilizing Alpha Set Replacement and Omission
4,771,401 Apparatus and Method for Linguistic Expression US 13-Sep-88
Processing
4,773,009 Method and Apparatus for Text Analysis US 20-Sep-88
4,783,758 Automated word substitution using numerical rankings US 8-Nov-88
of structural disparity between misspelled words and
candidate substitution words
4,864,501 Word Annotation System US 5-Sep-89
4,864,502 Sentence Analyzer US 5-Sep-89
4,868,750 Collocational Grammar System US 19-Sep-89
5,680,628 Method and Apparatus for Automated Search and US 21-Oct-97
Retrieval Processing
5,794,177 Method and Apparatus for Morphological Analysis and US 11-Aug-98
Generation of Natural Language Text
5,890,103 Method and Apparatus for Improved Tokenization of US 30-Mar-99
Natural Language Text
6,035,268 Method and Apparatus for Breaking Words in a Stream of US 7-Mar-00
Text
1,203,916 Graphic Word Spelling Correction Using Automated Canada 29-Apr-86
Comparisons with Phonetic Word Skeletons
2
1,248,635 Method and Apparatus for Semi-Automatic Spelling Canada 10-Jan-89
Correction
1,257,705 Method and Apparatus for the Electronic Storage Canada 18-Jul-89
Retrieval of Expressions and Linguistic Information
1,268,558 Method and Apparatus for the Electronic Storage and Canada 1-May-90
Retrieval of Expressions and Linguistic Information
1,295,746 Method and Apparatus for Text Analysis Canada 11-Feb-92
1,300,269 Sentence Analyzer Canada 5-May-92
1,300,272 Word Annotation System Canada 5-May-92
1,301,934 Collocational Grammar System Canada 26-May-92
B2. Patent Applications
09/410,387 Apparatus and Method for Language Recognition US 30-Sep-99
09/232,045 Apparatus and Method for Multilingual Information US 15-Jan-99
Retrieval
09/539,066 Automatic Orthographic Transformation of a Text US 30-Mar-00
Stream
09/452,220 Content-Based Text Filtering US 1-Dec-99
09/780,141 Goods and Services Referring by Location US 9-Feb-01
Grammar-Package Driven Parsing US 18-Jun-01
2,227,383 Method and Apparatus for Automated Search and Canada 19-Jul-96
Retrieval Processing
96 924 650.3 Method and Apparatus for Automated Search and Europe 19-Jul-96
Retrieval Processing
99120855.4 Method and Apparatus for Automated Search and Europe 26-Oct-99
Retrieval Processing
3
10-510976 Method and Apparatus for Breaking Words in a Stream Japan 21-Aug-97
of Text
37899/00 Method and Apparatus for Improved Part-of-Speech ▇▇▇▇▇▇▇▇▇ ▇▇-▇▇▇-▇▇
Tagging
09/441,792 Method and Apparatus for Improved Part-of-Speech Europe 17-Nov-99
Tagging
2000-582999 Method and Apparatus for Improved Part-of-Speech Japan 17-Nov-99
Tagging
09/441,792 Method and Apparatus for Improved Part-of-Speech US 17-Nov-99
Tagging
09/277,264 System and Method for Providing Translation US 26-Mar-99
Resource Access
C. Copyright Registrations/Mask Works
[Intentionally left blank.]
D1. Trademarks
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are using, or
intend to use in connection with goods or services associated
with this asset group, or (2) be trademarks that Sellers have
registered or sought to register for use in connection with
goods or services associated with this asset group.]
D2. Domain Names
[To be provided.]
E. Licenses In(7)
[Intentionally left blank.]
F. Obligations
a. Provide a license to the Intelliscope Language
Recognizer product ("ILR"), in source code form, to
the Text-to-Speech Asset Group, for the purposes of
(i) supporting certain Assigned Contracts under which
one or
----------
(7) Upon prior written consent from Apptek Partners, LLC, obtain all rights
under the Software License Agreement, dated as of November 14, 2001, by and
between Lernout & Hauspie Speech Products N.V. and Apptek Partners LLC ("License
Agreement"), of L&H (as L&H is defined in the License Agreement).
4
more customers of Seller(s) received a license
to ILR, and (ii) using ILR in connection with the
Acquired Business.
b. Assume all obligations under the Software License
Agreement, dated as of November 14, 2001, by and
between Lernout & Hauspie Speech Products N.V. and
Apptek Partners LLC ("License Agreement"), of L&H
(as L&H is defined in the License Agreement).
c. Assume all rights and obligations of Lernout &
Hauspie Speech Products N.V. under a Software License
Agreement dated November 15, 2001, granting a
perpetual, irrevocable license of source code for
International Proofreader, dated November 15, 2001.
Acquirer will receive no royalties for this license.
d. Provide a Covenant not to ▇▇▇ for making, using,
selling or offering to sell, any inventions embodied
in patents (or existing patent applications)
contained within the ICM Asset Group to the
Text-to-Speech Asset Group, the L&H Speech
Processing/Dialog Asset Group, the ISI Speech
Processing/Dialog Asset Group, and the Dragon Speech
Processing/Dialog Asset Group.
5
KNEXYS ASSET GROUP(8)
(Owned entirely by Lernout & Hauspie Speech Products N.V.)
A1. Knexys Technology
All core linguistic components, including, without limitation,
ConceptNet, Morphology, Parser, Query Builder, Linguistic
Image Builder, and Lexicon Verticalization Tools; all
Information extraction technologies, including, without
limitation, Language Identifier, Topic Identifier, Summarizer,
Categorizer, Question Clusterer, and Feature Extractor; and
all information retrieval technologies, including, without
limitation, Crawler, Indexer, and Search Engine,
(collectively, "Knexys Technology"), consisting, without
limitation, of the following:
a. All human-generated inputs used to create, test, and
enhance Knexys Technology, including, without
limitation, software source code, linguistic rules,
makefiles, and scripts.
b. Knexys Technology data, comprising all data used to
create, test, and enhance Knexys Technology
originally owned or created by the Knexys Company.
c. All proprietary tools, in object code and source code
form, used to create, test, or enhance Knexys
Technology, including, without limitation, Morphology
management and build tools, ConceptNet Editors
(Bellevue, Zunga, Comucopia, Guacamole),
IntegrityChecker, and import and compression tools.
d. All research projects, research results, and
intermediate projects derived directly from Knexys
Technology, in object code form and machine-generated
source code form, including, without limitation,
acoustic models, language models, and voice fonts.
A2. Knexys Products
All products that directly incorporate any Knexys Technology,
including, without limitation, iKM Answers 1.0 Application,
iKM Answers 1.0 SDK, iKM Topics 1.0, and iKM Analytics 1.0
Services, (collectively, "Knexys Products") consisting,
without limitation, of the following:
a. All human-generated inputs used to create, test, and
enhance Knexys Products, including, without
limitation, software source code, linguistic rules,
makefiles, scripts, and external documentation.
-----------
(8) These assets are subject to the obligations contained in Section F.
2
b. Knexys Products Data, comprising all data used to
create, test, and enhance Knexys Products originally
owned or created by the Knexys Company.
c. All proprietary tools, in object code and source code
form, used to create, test, or enhance Knexys
Products, including, without limitation, T-Qual
(retrieval quality control system).
d. All demonstration versions, sample applications, and
prototypes derived directly from or developed for
Knexys Products.
A3. Documentation
All internal documentation concerning Knexys Technology or
Knexys Products, including, without limitation, documents,
notebooks, and Lotus Notes(R) discussion databases.
B1. Patents
[Intentionally left blank.]
B2. Patent Applications
[Intentionally left blank.]
C. Copyright Registrations/Mask Works
[Intentionally left blank.]
D1. Trademarks
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are using, or
intend to use in connection with goods or services associated
with this asset group, or (2) be trademarks that Sellers have
registered or sought to register for use in connection with
goods or services associated with this asset group.]
D2. Domain Names
[To be provided.]
E. Licenses In
[Intentionally left blank.]
3
F. Obligations
[Intentionally left blank.]
4
MACHINE TRANSLATION ASSET GROUP(9)
(Owned entirely by L&H Applications USA, Inc.)
A1. Machine Translation Technology
The Barcelona engine ("Machine Translation Technology"),
consisting, without limitation, of the following:
a. All human-generated inputs used to create, test, and
enhance Machine Translation Technology, including,
without limitation, software source code, linguistic
rules, makefiles, and scripts.
b. Machine Translation Technology data, comprising all
data used to create, test, and enhance Machine
Translation Technology.
c. All proprietary tools, in object code and source
code form, used to create, test, or enhance Machine
Translation Technology.
A2. Machine Translation Products
All products that directly incorporate any Machine Translation
Technology, including, without limitation, Power Translator(R)
Pro, L&H Simply Translating(TM) Deluxe, L&H Simply
Translating(TM), and L&H(TM) Web Translator (collectively,
"Machine Translation Products"), including, without
limitation:
a. All human-generated inputs used to create, test, and
enhance Machine Translation Products, including,
without limitation, software source code, linguistic
rules, makefiles, scripts, and external
documentation.
b. Machine Translation Products data, comprising all
data used to create, test, and enhance Machine
Translation Products.
c. All proprietary tools, in object code and source
code form, used to create, test, or enhance Machine
Translation Products.
d. All demonstration versions, sample applications, and
prototypes derived directly from or developed for
Machine Translation Products.
A3. Documentation
All internal documentation relating to Machine Translation
Technology or Machine Translation Products, including, without
limitation, documents, notebooks, and Lotus Notes(R)
discussion databases.
---------
(9) These assets are subject to the obligations contained in Section F.
B. Patents/Patent Applications
[Intentionally left blank.]
C1. Copyright Registrations
TX4448195 Power Translator professional for DOS: US 13-Jun-97
Russian to/from English version 3.0
TX4448196 Power Translator professional for DOS: US 13-Jun-97
Russian to/from English version 2.0
TX4448197 Power Translator professional for DOS: US 13-Jun-97
Russian to/from English version 1.0
TXu786796 Telegraph user's guide US 26-Jun-97
TXu806997 Barcelona translation software engine US 26-Jun-97
VAu406963 Telegraph computer screens US 20-Aug-97
VAu407042 Power translator computer screens US 20-Aug-97
C2. Mask Works
[Intentionally left blank.]
D1. Trademarks
POWER TRANSLATOR
Application(s) for Registration (all owned by Lernout &
Hauspie Speech Products N.V.):
Argentina, Filing Nos. 2305403
Bolivia, Filing Nos. ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, Filing Nos. 2000-10161
Mexico, Filing Nos. 459341
Venezuela, Filing Nos. 16581/2000
Registration(s):
United States of America, Serial No. 1,811,489
POWER TRANSLATOR PRO
Application(s) for Registration:
Brazil, Filing Nos. 819900311
Registration(s):
Peru, Serial No. 47242
2
SIMPLY TRANSLATING
Application(s) for Registration (all owned by Lernout &
Hauspie Speech Products N.V.):
United States of America, Application No. 76/115,188
Argentina, Filing No. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Application No. 823262707
Mexico, Filing No. 459345
Registration(s):
None
[The parties shall agree upon the trademarks or service marks
(collectively, "trademarks"), if any, that will be included in
this asset group. The trademarks that may be included must
either (1) be trademarks that Sellers have used, are using, or
intend to use in connection with goods or services associated
with this asset group, or (2) be trademarks that Sellers have
registered or sought to register for use in connection with
goods or services associated with this asset group.]
D2. Domain Names
[To be provided.]
E. Licenses In
License to the RealSpeak(TM) SDK on Win32, in object code
form, limited to use in conjunction with existing Machine
Translation Products (from the Text-to-Speech Asset Group).
F. Obligations
[Intentionally left blank.]
3
EXHIBIT A
▇▇▇▇ OF SALE
This ▇▇▇▇ OF SALE, dated December ____, 2001 (this "▇▇▇▇ of Sale"), is
executed and delivered by Lernout & Hauspie Speech Products N.V., a corporation
organized under the laws of the Kingdom of Belgium, L&H Holdings USA, Inc., a
Delaware corporation, and each of the other sellers named on EXHIBIT A to the
Purchase Agreement (as defined below) (each a "Seller" and collectively, the
"Sellers"), to ScanSoft, Inc., a Delaware corporation (the "Buyer"). All
capitalized words and terms used in this ▇▇▇▇ of Sale and not defined herein
shall have the respective meanings ascribed to them in the Asset Purchase
Agreement, dated as of December 7, 2001 (the "Purchase Agreement"), by and among
the Buyer and the Sellers.
WHEREAS, pursuant to the Purchase Agreement, the Sellers have agreed to
sell, transfer, convey, assign and deliver to the Buyer the Acquired Assets and
the Buyer has agreed to assume from the Sellers the Assumed Liabilities;
NOW, THEREFORE, in consideration of the mutual promises set forth in
the Purchase Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each Seller hereby agrees as
follows:
1. Each Seller hereby sells, transfers, conveys, assigns and delivers
to the Buyer, its successors and assigns, to have and to hold forever, all of
such Seller's respective right, title and interest in, to and under all of the
Acquired Assets.
2. Each Seller hereby covenants and agrees that it will, at the request
of the Buyer and without further consideration, execute and deliver such other
instruments of sale, transfer, conveyance and assignment, and take such other
action, as may reasonably be necessary to more effectively sell, transfer,
convey and assign to the Buyer, and confirm the Buyer's title to, all of the
Acquired Assets to the full extent permitted by law to put the Buyer in actual
possession and operating control thereof, to assist the Buyer in exercising all
rights with respect thereto and to carry out the purpose and intent of the
Purchase Agreement.
3. Each Seller does hereby irrevocably constitute and appoint the Buyer
its true and lawful attorney, with full power of substitution, in its name or
otherwise, and on behalf of such Seller, or for its own use, to claim, demand,
collect and receive at any time and from time to time any and all of the
Acquired Assets, and to prosecute the same at law or in equity and, upon
discharge thereof, to complete, execute and deliver any and all necessary
instruments of satisfaction and release.
4. Each Seller, by its execution of this ▇▇▇▇ of Sale, and the Buyer,
by its acceptance of this ▇▇▇▇ of Sale, hereby acknowledges and agrees that
neither the representations and warranties nor the rights, remedies or
obligations of the Sellers or the Buyer under the Purchase Agreement shall be
deemed to be enlarged, modified or altered in any way by this ▇▇▇▇ of Sale.
5. This ▇▇▇▇ of Sale may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
6. THIS ▇▇▇▇ OF SALE, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS ▇▇▇▇ OF SALE, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED
UPON OR ARISING OUT OF THIS ▇▇▇▇ OF SALE OR THE TRANSACTIONS CONTEMPLATED BY
THIS ▇▇▇▇ OF SALE (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY),
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL
RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED AND DETERMINED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO ANY
CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY
OTHER JURISDICTION).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Sellers and the Buyer have caused this ▇▇▇▇ of
Sale to be duly executed under seal as of and on the date first above written.
SELLERS:
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
By:___________________________________
Name:
Title:
L&H HOLDINGS USA, INC.
By:___________________________________
Name:
Title:
INTERACTIVE SYSTEMS, INC.
By:___________________________________
Name:
Title:
LERNOUT & HAUSPIE SPEECH
PRODUCTS USA, INC.
By:___________________________________
Name:
Title:
L&H APPLICATIONS USA, INC.
By:__________________________________
Name:
Title:
LINGUISTIC TECHNOLOGIES, INC.
By:__________________________________
Name:
Title:
L&H JAPAN K.K.
By:__________________________________
Name:
Title:
L&H LINGUISTICS USA, INC.
By:__________________________________
Name:
Title:
LERNOUT & HAUPSIE JAPAN INC.
By:__________________________________
Name:
Title:
ACCEPTED:
SCANSOFT, INC.
By:___________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: SVP & Chief Financial Officer
EXHIBIT B
INSTRUMENT OF ASSUMPTION OF LIABILITIES
This INSTRUMENT OF ASSUMPTION OF LIABILITIES, dated December ___, 2001
(this "Instrument of Assumption"), is made by ScanSoft, Inc., a Delaware
corporation (the "Buyer"), in favor of Lernout & Hauspie Speech Products N.V., a
corporation organized under the laws of the Kingdom of Belgium, L&H Holdings
USA, Inc., a Delaware corporation and each of the other sellers named on EXHIBIT
A to the Purchase Agreement (as defined below) (each a "Seller" and
collectively, the "Sellers"). All capitalized words and terms used in this
Instrument of Assumption and not defined herein shall have the respective
meanings ascribed to them in the Asset Purchase Agreement, dated as of December
7, 2001 (the "Purchase Agreement"), by and among the Buyer and the Sellers.
WHEREAS, pursuant to the Purchase Agreement, the Sellers have agreed to
sell, transfer, convey, assign and deliver to the Buyer the Acquired Assets; and
WHEREAS, in partial consideration therefor, the Purchase Agreement
requires the Buyer to assume the Assumed Liabilities;
NOW, THEREFORE, in consideration of the mutual promises set forth in
the Purchase Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Buyer hereby agrees as
follows:
1. The Buyer hereby assumes and agrees to perform, pay and discharge
when due the Assumed Liabilities.
2. The Buyer does not hereby assume and shall not otherwise be
responsible for, and the Sellers shall remain liable for, all of the Retained
Liabilities.
3. Nothing contained herein shall require the Buyer to perform, pay or
discharge any liability, obligation or commitment expressly assumed by the Buyer
herein so long as the Buyer in good faith contests or causes to be contested the
amount or the validity thereof.
4. Nothing herein shall be deemed to deprive the Buyer of any defenses,
set-offs or counterclaims which a Seller may have had or which the Buyer shall
have with respect to any of the Assumed Liabilities.
5. The Buyer, by its execution of this Instrument of Assumption, and
each Seller, by its acceptance of this Instrument of Assumption, hereby
acknowledges and agrees that neither the representations and warranties nor the
rights, remedies or obligations of the Buyer or the Sellers under the Purchase
Agreement shall be deemed to be enlarged, modified or altered in any way by this
Instrument of Assumption.
5. This Instrument of Assumption may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6. THIS INSTRUMENT OF ASSUMPTION, THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS INSTRUMENT OF ASSUMPTION, AND ANY CLAIM OR CONTROVERSY
DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS INSTRUMENT OF
ASSUMPTION OR THE TRANSACTIONS CONTEMPLATED BY THIS INSTRUMENT OF ASSUMPTION
(WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND
INTERPRETED, CONSTRUED AND DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF DELAWARE (WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THAT
WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Buyer and the Sellers have caused this
Instrument of Assumption of Liabilities to be duly executed under seal as of and
on the date first above written.
BUYER:
SCANSOFT, INC.
By:___________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: SVP & Chief Financial Officer
ACCEPTED:
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
By:___________________________________
Name:
Title:
L&H HOLDINGS USA, INC.
By:___________________________________
Name:
Title:
INTERACTIVE SYSTEMS, INC.
By:___________________________________
Name:
Title:
LERNOUT & HAUSPIE SPEECH
PRODUCTS USA, INC.
By:___________________________________
Name:
Title:
L&H APPLICATIONS USA, INC.
By:___________________________________
Name:
Title:
LINGUISTIC TECHNOLOGIES, INC.
By:___________________________________
Name:
Title:
L&H JAPAN K.K.
By:___________________________________
Name:
Title:
LERNOUT & HAUSPIE JAPAN INC.
By:___________________________________
Name:
Title:
L&H LINGUISTICS USA, INC.
By:___________________________________
Name:
Title:
Exhibit E
PROMISSORY NOTE
$3,500,000 December , 2001
FOR VALUE RECEIVED, the undersigned, ScanSoft, Inc., a Delaware
corporation, (the "MAKER") hereby promises to pay to the order of Lernout &
Hauspie Speech Products, N.V., a corporation organized and existing under the
laws of the Kingdom of Belgium ("L&H") and its assigns, on behalf of L&H and L&H
Holdings USA, a Delaware corporation and a wholly-owned subsidiary of L&H
("HOLDINGS") and certain other corporations listed on the attached EXHIBIT A,
(collectively the "Payees"), the principal sum of Three Million Five Hundred
Thousand Dollars ($3,500,000), and to pay interest at a per annum rate of nine
percent (9%) on the principal amount. This note is issued pursuant to an asset
purchase agreement dated December 7, 2001, by and among the Maker herein and the
Payees herein ("Purchase Agreement"). The allocation of payments hereunder shall
be made in lawful money of the United States of America.
1. PRINCIPAL AND INTEREST. Payments of principal and interest in the
amount of One Hundred Thirty-three Thousand Six Hundred Twenty and 82/100
Dollars ($133,620.82) shall become due an payable on the fifteenth (15th) day of
each March, June, September and December commencing on March 15, 2002, for a
total of eleven (11) payments (each, a "Payment Date"). All remaining principal
and interest shall become due on December 15, 2004 (the "Final Payment Date").
All payments made hereunder shall be made in lawful money of the United States
of America .
2. PREPAYMENTS. The unpaid principal sum of this note may be prepaid in
full at any time and in part, from time to time, together with accrued interest
on the whole amount of said principal sum remaining unpaid to the date of
payment without penalty or premium.
3. PAYMENTS. All payments of principal and interest on this note shall
be payable at the address of L&H set forth in the Purchase Agreement, or at such
other place as the holder of this note may from time to time in writing
designate at least fifteen (15) days before such payment is due.
4. EVENT OF DEFAULT. "EVENT OF DEFAULT", wherever used herein, means
any one of the following events (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(i) default in the payment of any principal or interest in
respect of this note if not cured within ten (10) Business Days
following the applicable Payment Date or the Final Payment Date, as the
case may be; or
(ii) default in the payment of the unpaid balance of this
note at the Final Payment Date; or
(iii) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Maker bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Maker
under Federal bankruptcy law or any other applicable Federal or state
law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Maker or of any
substantial part of the property of the Maker, or ordering the winding
up or liquidation of the affairs of the Maker, and the continuance of
any such decree or order unstayed and in effect for a period of sixty
(60) consecutive days; or
(iv) the institution by the Maker of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by the Maker to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by the Maker of a petition or answer or consent seeking
reorganization or relief under Federal bankruptcy law or any other
applicable Federal or state law, or the consent by the Maker to the
filing of such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Maker or of any substantial part of the property of the Maker, or the
making by the Maker of an assignment for the benefit of creditors, or
the admission by the Maker in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the
Maker in furtherance of any such action; or
5. REMEDIES. If there is an Event of a Default, the holder hereof may,
at its option, after giving the undersigned written notice of its intent,
declare the unpaid balance of the note to be immediately due and payable, in
addition to exercising any other remedies it has at law. Notwithstanding the
foregoing, if an Event of Default referenced in paragraph (iii) or paragraph
(iv) of Section 4 occurs, the unpaid balance of this note shall automatically
become due and payable immediately without any declaration or other action on
the part of the holder all of which are hereby expressly waived by the Maker.
6. WAIVER. The undersigned, and every endorser and guarantor of this
note, hereby waives presentment, demand, notice of dishonor, notice of
acceleration, protest, and all other demands and notices in connection with the
delivery, acceptance, performance, default, or enforcement of this note or of
any rights hereunder, assents to any extension or postponement of the time of
payment of this note or any other indulgence, and hereby waives any rights of
set-off or counterclaim.
7. NOTICES. Notices to the undersigned shall be deemed given when
delivered in hand to the undersigned or three (3) days after being mailed by
registered or certified mail, postage prepaid, return receipt requested, to the
undersigned at ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other address
of which the undersigned shall have notified the holder of this note in writing.
- 2 -
8. GOVERNING LAW. THIS NOTE, THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS NOTE, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON
OR ARISING OUT OF THIS NOTE OR THE TRANSACTIONS CONTEMPLATED BY THIS NOTE
(WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND
INTERPRETED, CONSTRUED AND DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF DELAWARE (WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THAT
WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).
9. JURISDICTION. Except as otherwise expressly provided in this note,
the parties hereto agree that any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this note or the transactions contemplated hereby shall be brought, during the
pending of the U.S. Bankruptcy Case (as such term is defined in the Purchase
Agreement) of any Payee, be brought in the U.S. Bankruptcy Court, and thereafter
shall be brought in the United States District Court for the District of
Massachusetts or any Massachusetts State court sitting in Suffolk County, so
long as one of such courts shall have subject matter jurisdiction over such
suit, action or proceeding, and that any cause of action arising out of this
note shall be deemed to have arisen from a transaction of business in the
Commonwealth of Massachusetts, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court.
10. ASSIGNMENT. L&H may at any time and from time to time, without the
consent of the Maker, assign all or any portion of its rights under this note to
one or more Payees, and, upon L&H giving notice of such assignment to the Maker
specifying the interest hereunder being assigned and the Payee to which such
interest is being assigned, each reference herein to L&H shall (solely in
respect of the interest so assigned) constitute a reference to such assignee (as
if such assignee were named herein) rather than L&H.
IN WITNESS WHEREOF, the undersigned has executed this note as an
instrument under seal, all as of the day, month, and year first written above.
SCANSOFT, INC.
By:
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
- 3 -
Exhibit F
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the ____ day
of December, 2001 by and among ScanSoft, Inc., a Delaware corporation (the
"Company"), on the one hand, and Lernout & Hauspie Speech Products N.V., a
corporation organized and existing under the laws of the Kingdom of Belgium
("L&H"), L&H Holdings USA, a Delaware corporation that is a wholly-owned
subsidiary of L&H ("Holdings"), and the other corporations listed on ANNEX A to
this Agreement, on the other hand (L&H, Holdings, and the other corporations
listed on ANNEX A to this Agreement are each individually referred to herein as
a "Seller" and collectively as the "Sellers"). The Company and the Sellers are
referred to collectively herein as the "Parties."
WHEREAS, the Company and the Sellers have entered into the Asset Purchase
Agreement (the "Asset Purchase Agreement") dated as of December 7, 2001, whereby
the Sellers will receive shares (the "Shares") of Company common stock, $0.001
par value (the "Common Stock"); and
WHEREAS, the Company and the Sellers desire to provide for the rights of the
Sellers with respect to the registration of the Shares according to the terms of
this Agreement.
NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. REGISTRATION RIGHTS.
1.1 DEFINITIONS.
(a) The term "Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
(b) The term "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(c) The term "Holder" means the Sellers, as a holder of Registrable Securities,
and any holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been transferred in accordance with Section 1.8
hereof;
(d) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document by the
Commission.
(e) The term "Registrable Securities" means the Shares; provided, however, that
any Shares or other securities referred to above that have been sold to the
public pursuant to a
registered public offering or Rule 144 under the Securities Act shall cease to
be Registrable Securities.
(f) The term "Securities Act" means the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations thereunder,
all as the same shall be in effect from time to time.
1.2 REQUEST FOR REGISTRATION.
(a) If the Company shall receive a written request from the Holders of at least
50% of the Registrable Securities then outstanding that the Company file a
registration statement under the Securities Act covering the registration of at
least 50% of the Registrable Securities then outstanding (as such number may be
appropriately adjusted for stock splits, combinations, and the like) or such
lesser amount of shares as shall constitute all of the Registrable Securities
then outstanding, then the Company shall, subject to the limitations of
subsection 1.2(b), use all reasonable commercial efforts to effect as soon as
practicable the registration under the Securities Act of all Registrable
Securities that the Holders request to be registered within 20 days of the
mailing of such notice by the Company in accordance with Section 2.2. The
Parties acknowledge that the rights of the holders under Section 1.3 of that
certain Registration Rights agreement dated March 2, 1999 by and between the
Company and Xerox Corporation shall be applicable to a registration effected
pursuant to this Section 1.2.
(b) If the Holders of Registrable Securities initiating the registration request
pursuant to subsection 1.2(a) ("Initiating Holders") intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 1.2 and the Company shall include such information in the written
notice referred to in subsection 1.2(a). The underwriter or underwriters shall
be selected by a majority in interest of the Initiating Holders and shall be
reasonably acceptable to the Company. In such event, the right of any such
Holder to include such Holder's Registrable Securities in such registration
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the Initiating
Holders and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in Section 1.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section 1.2, if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Initiating Holders shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities
owned by each Holder; provided, however, that the number of shares of
Registrable Securities to be included in such underwriting shall not be reduced
unless all other securities are first entirely excluded from the underwriting.
2
(c) If the Company is qualified to use Form S-3 (or any comparable successor
form or forms) at the time any registration statement is to be filed pursuant to
this Section 1.2, such registration statement shall be filed on Form S-3. If the
Company is not qualified to use Form S-3 at the time any registration statement
is to be filed pursuant to this Section 1.2, such registration statement shall
be filed on Form S-1 (or any comparable successor form or forms).
(d) Notwithstanding the foregoing, if the Company shall furnish to the
Initiating Holders a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the Company it
would be seriously detrimental to the Company for such registration statement to
be filed and it is therefore essential to defer the filing of such registration
statement, the Company shall have the right to defer such filing for a period of
not more than 60 days after receipt of the request of the Initiating Holders
(or, if the Company is engaged or has fixed plans to engage in a registered
public offering as to which the Holders may include Registrable Securities
pursuant to Section 1.3, not more than 180 days after the effective date of such
offering); provided, however, that the Company may not utilize this right more
than once in any 12-month period.
1.3 OBLIGATIONS OF THE COMPANY.
Whenever required under this Section 1 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the Commission a registration statement with respect
to such Registrable Securities and use all reasonable efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder,keep such
registration statement effective ("Effectiveness Period") until the earliest of
(i) the date that is eighteen (18) months after the Initiating Holders have
notified the Company that they are demanding a registration pursuant to Section
1.2 hereof; (ii) the two year anniversary of the date of Asset Purchase
Agreement and (iii) the date on which the distribution contemplated by the
registration statement has been completed. In the event that, in the judgment of
the Company, it is advisable to suspend use of the prospectus relating to such
registration statement for a discrete period of time (a "Deferral Period") due
to pending material corporate developments or similar material events that have
not yet been publicly disclosed and as to which the Company believes public
disclosure will be prejudicial to the Company, the Company shall deliver a
certified resolution of the Board of Directors of the Company, signed by a duly
authorized officer of the Company, to each Holder, to the effect of the
foregoing and, upon receipt of such certificate, such Holders agree not to
dispose of such Holders' Registrable Securities covered by such registration or
prospectus (other than in transactions exempt from the registration requirements
under the Securities Act); provided, however, that such Deferral Period shall be
no longer than 75 days. The Effectiveness Period shall be extended for a period
of time equal to such Deferral Period.
(b) Prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration
3
statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders of the Registrable Securities covered by such
registration statement such numbers of copies of a prospectus, including a
preliminary prospectus, and any amendment or supplement thereto and a reasonable
number of copies of the then-effective registration statement and any
post-effective amendment thereto, all in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of such Registrable Securities.
(d) Use all reasonable commercial efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders
thereof; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.
(f) Notify each Holder of Registrable Securities covered by such registration
statement, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and at the request of any such Holder prepare and furnish to such Holder a
reasonable number of copies of a supplement or an amendment to such prospectus
as may be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(g) Furnish, at the request of any Holder requesting registration of Registrable
Securities pursuant to this Section 1, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 1, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) in the case of an underwritten
public offering a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is
4
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters.
(h) Cause all Registrable Securities covered by the registration statement to be
listed on each securities exchange or automated quotation system on which shares
of Common Stock are then listed. If any of such shares are not so listed, the
Company shall cause such shares to be listed on the securities exchange or
automated quotation system as may be reasonably requested by the Holders of a
majority of the Registrable Securities being registered.
(i) Permit a single firm of counsel designated as selling stockholders' counsel
by the holders of a majority in interest of the Registrable Securities to
review, at the Holders' expense, the registration statement and all amendments
and supplements thereto a reasonable period of time prior to their filing with
the Commission and state authorities, and shall not file any document in a form
to which such counsel reasonably objects.
(j) Cause the Company's officers, directors and independent certified public
accountants to supply all information reasonably requested by a representative
of any Holder of Registrable Securities, and any attorney or accountant retained
by such Holder, in connection with such registration; provided, however, that
such representatives, attorneys or accountants of the Holders enter into a
confidentiality agreement, in form and substance reasonably satisfactory to the
Company, prior to the release or disclosure of any such information.
1.4 OBLIGATIONS OF THE HOLDERS.
(a) It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Agreement that the selling Holders shall furnish to
the Company such information regarding themselves, the Registrable Securities
held by them, and the intended method of disposition of such securities as shall
be required to effect the registration of the Registrable Securities. The
Company shall have no obligation with respect to any registration requested
pursuant to Section 1.2 of this Agreement if the number of shares of Registrable
Securities to be included in the requested registration does not equal or exceed
the number of shares required to trigger the Company's obligation to initiate
such registration as specified in subsection 1.2(a) above.
(b) Upon the receipt by a Holder of any notice from the Company of (i) the
existence of any fact or the happening of any event as a result of which the
prospectus included in a registration statement filed pursuant to the terms
hereof, as such registration statement is then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) the issuance by
the Commission of any stop order or injunction suspending or enjoining the use
or the effectiveness of such registration statement or the initiation of any
proceedings for that purpose, or the taking of any similar action by the
securities regulators of any state or other jurisdiction, or (iii) the request
by the Commission or any other federal or state governmental agency for
amendments or supplements to such registration statement or
5
related prospectus or for additional information related thereto, such
Holder shall forthwith discontinue disposition of such Holder's Registrable
Securities covered by such registration or prospectus (other than in
transactions exempt from the registration requirements under the Securities Act)
until such Holder's receipt of the supplemented or amended prospectus or until
such Holder is advised in writing by the Company that the use of the applicable
prospectus may be resumed. In such a case, the Effectiveness Period shall be
extended by the number of days from and including the date of the giving of such
notice to and including the date when each Holder shall have received a copy of
the supplemented or amended prospectus or when such Holder is advised in writing
by the Company that the use of the applicable prospectus may be resumed. The
Company shall use all reasonable commercial efforts to limit the duration of any
discontinuance of disposition of Registrable Securities pursuant to this
section.
1.5 EXPENSES.
(a) Except as set forth herein, the Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of
Registrable Securities with respect to the registrations pursuant to Section
1.2, including (without limitation) all registration, filing and qualification
fees, printers' and accounting fees relating or apportionable thereto, fees and
disbursements of counsel for the Company, blue sky fees and expenses, including
fees and disbursements of counsel related to all blue sky matters, fees and
expenses of listing any Registrable Securities on any securities exchange or
automated quotation system on which shares of Common Stock are then listed, the
expenses of providing materials pursuant to Section 1.4 hereof, but excluding
stock transfer taxes that may be payable by the selling Holders, and all
underwriting discounts and commissions relating to Registrable Securities
covered by such registration, which shall be borne by the Holders.
(b) Notwithstanding subsection 1.5(a), the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 1.2 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses); provided, however, that if such
withdrawal occurs prior to the date the registration statement shall have become
effective and as of the time of such withdrawal, such Holders have learned of a
material adverse change in the business, properties, results of operations or
financial condition of the Company from that known to such Holders at the time
of their request and have withdrawn the request with reasonable promptness
following disclosure by the Company of such material adverse change, then the
Holders shall not be required to pay any of such expenses and shall retain their
rights pursuant to Section 1.2.
1.6 DELAY OF REGISTRATION. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.7 INDEMNIFICATION.
6
In the event any Registrable Securities are included in a registration statement
under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and hold harmless
each Holder of such Registrable Securities, the officers and directors of each
such Holder, any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities (joint or several) to which they may become subject under
the Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; and the Company will reimburse
each such Holder, officer or director, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.7(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
officer, director, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Securities Act, any underwriter and any other Holder
selling securities in such registration statement or any of its directors or
officers or any person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, or underwriter or controlling person, or
other such Holder or director, officer or controlling person may become subject,
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or controlling person, other
Holder, officer, director, or controlling person in connection with
investigating or
7
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this subsection 1.7(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld; provided, that, in no
event shall any indemnity under this subsection 1.7(b) exceed the net proceeds
from the sale of the Registrable Securities received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 1.7 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.7, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified parties
which may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 1.7 to the extent the indemnifying party was actually damaged or
suffered any loss or incurred any additional expense as a result thereof, but
the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 1.7. An indemnifying party shall not, without the prior
written consent of the indemnified parties, settle, compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
by such indemnified parties (whether or not the indemnified parties are actual
or potential parties to such claim or action) unless such settlement, compromise
or consent includes a release of such indemnified party reasonably acceptable to
such indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) If the indemnification provided for in this Section 1.7 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, liability, claim, damage, or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage, or
expense as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by
8
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
(f) The obligations of the Company and Holders under this Section 1.7 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.8 ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to cause the Company to register Registrable Securities pursuant to
this Section 1 may be transferred or assigned by a Holder, in whole or in part,
without any prior written consent of the Company, to (a) a wholly-owned
subsidiary of the Holder or a successor to substantially all the business or
assets of the Holder or (b) a transferee or assignee of 10% or more of the then
outstanding Registrable Securities; provided that the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice
of the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being transferred or assigned; and
provided, further, that the transferee or assignee of such rights assumes in
writing the obligations of such Holder under this Section 1.
1.9 REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the
Holders the benefits of Rule 144 under the Securities Act and any other rule or
regulation of the Commission that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company agrees
to:
(a) make and keep public information available, as those terms are understood
and defined in Rule 144, at all times after the date hereof;
(b) file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, upon request (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the Commission which permits the selling of any such
securities without registration.
1.10 RESERVED
9
1.11 RESERVED
1.12 SUBORDINATION. Notwithstanding anything set forth herein, the registration
rights conferred herein are subordinate in all respects to the registration
rights conveyed to Xerox Corporation in that certain Registration Rights
Agreement by and among Visioneer, Inc. and Xerox Corporation dated March 2,
1999, except to the extent the Sellers are Other Holders as defined in that
certain Registration Rights Agreement by and among Visioneer, Inc. and Xerox
Corporation dated March 2, 1999.
2. MISCELLANEOUS.
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and permitted assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
2.2 NOTICES. Unless otherwise provided, any notice, request, demand or other
communication required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified, or when sent by telecopier (with receipt confirmed and
promptly confirmed by personal delivery, U.S. first class mail, or courier), or
overnight courier service, or upon deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed as follows (or at
such other address as a party may designate by notice to the other):
If to the Company: ScanSoft, Inc.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Seller: Lernout & Hauspie Speech Products N.V.
Curaturan
Flanders Language Valley 50
B-8900 Ieper, Belgium
Telephone: ▇▇▇-▇▇-▇▇-▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇-▇▇-▇▇▇▇
with a copy to: Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
10
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
2.3 SEVERABILITY. If one or more provisions of this Agreement are held to be
unenforceable, invalid or void by a court of competent jurisdiction, such
provision shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
2.4 ENTIRE AGREEMENT; AMENDMENTS.
(a) This Agreement contains the entire understanding of the parties with respect
to the matters covered herein and supersedes all prior agreements and
understandings, written or oral, between the parties relating to the subject
matter hereof.
(b) Any term of this Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Company and the Holders of a majority of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder of any Registrable Securities then
outstanding, each future Holder of all such Registrable Securities, and the
Company. No waiver of any default with respect to any provision, condition or
requirement hereof shall be deemed to be a continuing waiver in the future
thereof or a waiver of any other provision, condition or requirement hereof; nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right accruing to it thereafter.
2.5 GOVERNING LAW. This Agreement shall be governed by and construed under the
laws of the State of Delaware (irrespective of its choice of law principles).
2.6 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
2.7 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. Any reference in this Agreement to a statutory
provision or rule or regulation promulgated thereunder shall be deemed to
include any similar successor statutory provision or rule or regulation
promulgated thereunder.
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ScanSoft, Inc.
By: ______________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: SVP & Chief Financial Officer
The Sellers
Lernout & Hauspie Speech Products N.V.
By: _________________________________
Name: _______________________________
Title: ______________________________
L&H Holdings USA, Inc.
By: _________________________________
Name: _______________________________
Title: ______________________________
12
Interactive Systems, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
Lernout & Hauspie Speech Products USA, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
L&H Applications USA, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
13
Linguistic Technologies, Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
L&H Japan K.K.
By: ________________________________
Name: ______________________________
Title: _____________________________
Lernout & Hauspie Japan Inc.
By: ________________________________
Name: ______________________________
Title: _____________________________
14