Exhibit 4.3

                               DATED 30 July 2002

                                  THALES SA (1)

                                     - and -

                               THE PURCHASERS (2)

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                           SALE AND PURCHASE AGREEMENT

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                                 EXECUTION COPY

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                                      INDEX

      CLAUSE

1     Definitions and Interpretation

2     Conditions

3     Business Properties

4     Sale and Purchase of Cliffstone Shares

5     Sale and Purchase of the Business

6     Liabilities to be Assumed

7     Purchase Price

8     VAT

9     Completion

10    Conduct of the Business prior to Completion

11    Indemnities

12    Release of guarantees

13    Completion Balance Sheet

14    Employment

15    Debts and Accounts Receivable

16    Inventory

17    Warranty work and Additional Services

18    Instem Manufacturing Agreement

19    Action after Completion

20    Insurance

21    Third Party Consents

22    Warranties and Limitations on Liability

<PAGE>

23    Restrictions on Thales Activities

24    Use of Corporate Names

25    Pensions

26    Confidentiality of Information

27    Corporate Governance, Registration Rights Agreement and Standstill
      Agreement

28    Notices

29    Announcements

30    Entire Agreement

31    Costs

32    Amendments and Waivers

33    Severability

34    Assignment

35    Continuing Effect

36    Counterparts

37    Governing Law

38    Contracts (Rights of Third Parties) Act 1999

39    Agent for Service

40    Gross Payments

41    Guarantee

SCHEDULES

1     The Companies

2     Apportionment

3     Properties

4     Warranties

5     Cliffstone Warranties


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6     Pensions

7     Intellectual Property Rights

8     Guarantees

9     Accounting Principles

10    Overseas Completion Requirements

11    Corporate Governance, Registration Rights Agreement and Standstill
      Agreement

12    Transitional Services Agreement

13    Prism Earn-Out Consideration Table

14    IPR Agreements

15    US Business Transfer Agreement

16    French Business Transfer Agreement

17    German Business Transfer Agreement

18    Employees

19    Relevant Employees

20    Key Employees

21    2002 Sales Determination

22    Surplus Employees

ATTESTATIONS


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                           SALE AND PURCHASE AGREEMENT

THIS AGREEMENT is made the 30th day of July, 2002

PARTIES:

(1)   THALES SA, a French societe anonyme having its registered office at 173,
      Boulevard Haussmann, Paris (75008) ("Thales");

(2)   NICE CTI SYSTEMS UK LIMITED (a company incorporated in England and Wales
      with registered number03403044) whose registered office is at 8 The
      Square, Stockley Park, Uxbridge, Middlesex UB11 1FW ("UK Purchaser");

(3)   NICE SYSTEMS SARL, a French societe a responsabilite limitee in the course
      of being set up, whose registered office will be located at 64 avenue
      Kleber, 75116 Paris, France represented for the purpose of this Agreement
      by its sole shareholder Nice CTI Systems UK Ltd., itself represented by
      Haim Shani duly empowered for the purpose hereof ("French Purchaser");

(4)   NICE SYSTEMS GMBH (a German company) whose registered office is at
      Lyonerstrasse 44-48, Frankfurt 60528, Germany ("German Purchaser");

(5)   NICE SYSTEMS INC. (a company incorporated under the laws of the State of
      Delaware , USA), whose principal place of business is at 301 Route 17
      North, Rutherford, New Jersey 07070 (the "US Purchaser");


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(6)   NICE SYSTEMS LTD. an Israeli company having its registered office at 8
      Hapnina Street, Raanana, 43107 Israel ("Nice")

      (Nice, the UK Purchaser, the French Purchaser, the German Purchaser and
      the US Purchaser being referred to in this Agreement together as the
      "Purchasers").


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BACKGROUND:

A     Thales, through its wholly owned subsidiaries identified in this Agreement
      as the Companies, carries on the Business (as defined in this Agreement)
      and is the beneficial owner or is otherwise able to procure the sale of
      the Business as a going concern and the sale of the Assets (as defined in
      this Agreement).

B     Thales has agreed to sell (or procure the sale of), and Nice has agreed to
      purchase the Business as a going concern (as defined in this Agreement)
      and the Assets (as defined in this Agreement), either directly or through
      one or more of its subsidiaries, upon the terms of this Agreement.


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<PAGE>

TERMS AGREED:

1     DEFINITIONS AND INTERPRETATION

1.1   In this Agreement and the Schedules to it unless the context otherwise
      requires the following words and expressions shall have the following
      meanings:

      "Accounting Date" means 31 December 2001;

      "Accounting Principles" means the Thales principles and accounting
      policies more particularly set out in Schedule 9 and practices in
      accordance with which the Accounts were prepared, consistently applied;

      "Accounts" means the audited accounts of each of the Companies, comprising
      the balance sheet and the profit and loss account as at the Accounting
      Date together with the notes, reports and statements included in or
      annexed to them;

      "Accounts Combination Statement" means the combination of the Accounts in
      the agreed terms;

      "Accounts Receivable" means all book debts, notes receivable and other
      rights to payment at the Completion Date arising from the operation of the
      Business before the Completion Date (including the right to receive
      payment for goods despatched or delivered and services rendered before the
      Completion Date but not invoiced before such date) but excluding any such
      debts or rights forming part of the Excluded Assets and "Accounts
      Receivable" shall be construed accordingly;


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<PAGE>

      "Additional Services" means the additional services defined in Clause
      17.2;

      "Affiliates" means in respect to any person, any other person directly or
      indirectly controlling, controlled by, or under common control with, such
      person;

      "Assets" means all of the assets and rights used in or relating to the
      Business as listed in Clause 5.1 below but excluding the Excluded Assets;

      "Assigned IPR" means those Intellectual Property Rights to be assigned
      under the Thales IPR Assignment;

      "Assumed Cliffstone Obligations" means the liabilities or obligations to
      Cliffstone as defined at sub-paragraph (d) of the definition of "Assumed
      Liabilities";

      "Assumed Liabilities" means:

      (a)   trade creditors of the Business at the Completion Date to the extent
            reflected in the Completion Balance Sheet;

      (b)   subject to Clause 17.1, performance obligations which remain to be
            performed under the Contracts excluding any licences of third party
            Intellectual Property Rights where the formal consent of the
            licensor is required and has not been obtained to enable


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            the relevant Purchaser to take an assignment of such obligations
            unless and until such consent has been obtained;

      (c)   all of the debts, obligations and other liabilities and all claims
            of and against the Companies arising before or after Completion
            which specifically relate to the Business but, in each case, only to
            the extent reflected in the Completion Balance Sheet; and

      (d)   the liabilities or obligations to Cliffstone which will be assumed
            by or attach to the UK Purchaser and the US Purchaser under the
            terms of the Cliffstone Documents following their acquisition of the
            Cliffstone Shares and the Cliffstone Note (respectively) pursuant to
            this Agreement and any other obligations assumed by Nice under
            United States company law pursuant to their holding of shares in a
            US private limited company, where, in each case such liability
            relates to the period after Completion and is not caused by any act,
            error, or omission by Thales during Thales' period of ownership of
            the Cliffstone Shares (the "Assumed Cliffstone Obligations");

      "Auditors" means, PwC, London;

      "Business" means the business of the design, development, production,
      marketing and supply of various secure voice recording, surveillance and
      replay systems and products and application software for business
      performance management solutions in contact centres, public safety and
      wholesale trading platforms and the provision of ancillary services
      currently carried on by the Companies;


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<PAGE>

      "Business Day " means a day (other than a Saturday or Sunday) on which
      banks are open for normal banking business in Paris, London, New York and
      Tel Aviv;

      "Business Information" means all information used exclusively in the
      Business including but not limited to all know-how, trade secrets,
      confidential information and other information (whether or not
      confidential and in whatever form held) owned and in the possession or
      under the control of the Companies including, without limitation, all
      formulas, designs, specifications, drawings, data, manuals and
      instructions and all customer lists, sales information and records,
      business plans and forecasts, accounting and tax records, orders,
      correspondence and enquiries and all technical or other expertise;

      "Business IPR" means the Intellectual Property Rights owned by the
      Companies and any Intellectual Property Rights owned by any other member
      of the Thales Group which is used exclusively in connection with the
      Business and/or including, but not limited to, the Assigned IPR which
      includes but is not limited to the Intellectual Property Rights set out at
      Schedule 7 but excluding the Excluded Trade Marks;

      "Business Properties" means the properties detailed in Part 1 of Schedule
      3;

      "Business Transfer Agreements" has the meaning set out in Clause 5.5;

      "Carved-Out Accounts" means the combined audited accounts of each of the
      Companies in respect of the Business, prepared according to US GAAP and
      carve-out principles for the periods ended 31 December 2000 and the
      Accounting Date or prepared according to carve-out principles but not US
      GAAP for the periods ended 31 December 1999, 31 December 2000 and the


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      Accounting Date, required to comply with SEC requirements for a 20F or F3
      filing;

      "Cliffstone" means Cliffstone Corporation, a company incorporated under
      the laws of the state of Georgia whose principal place of business is 645
      Molly Lane, Suite 150, Woodstock, Georgia 30189;

      "Cliffstone Documents" means each of:

      (a)   the Cliffstone Note;

      (b)   the Call Center Technology, Inc Investor Rights Agreement dated
            August 21, 2000 between Call Center Technology, Inc, The Racal
            Corporation, the Common Shareholders, the Series A Shareholders and
            the New Shareholders (and Amendment 2 thereto dated 10 September
            2001;

      (c)   the Stock Purchase Agreement between CCTI., Stephen M. Beckett II,
            Henry F. Yoder Jr., Cordova Technology Partners L.P. and the Racal
            Corporation dated 21 August 2000;

      (d)   the Credit Agreement between Cliffstone Corporation and Thales TRC,
            Inc. dated 10 September 2001; and

      (e)   the Security Agreement between Cliffstone Corporation and Thales
            TRC, Inc. dated 10 September 2001;

      "Cliffstone Note" means the US Dollar One Million and Five Hundred
      Thousand secured convertible promissory note entered between Thales TRC,
      Inc. and Cliffstone on September 10, 2001;

      "Cliffstone Shares" means the 3,356,335 shares of series C Convertible
      Preferred Stock par value $1 per share in Cliffstone currently held by
      Thales


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      TRC, Inc. to be transferred at Completion to Nice (or as it shall
      otherwise so direct) pursuant to the relevant transfer form;

      "Companies" means TCSA, TCSL, TCS GmbH and TCS Inc, brief details of each
      of which are set out in Schedule 1;

      "Companies Act" means the relevant legislation governing companies in each
      respective jurisdiction where the Companies are incorporated (being
      equivalent to the Companies Act 1985 in UK) and with respect to TCS, Inc.
      and Cliffstone respectively, also means the relevant legislation governing
      companies in their state of incorporation;

      "Company" means each of the Companies severally;

      "Completion" means completion of the transactions to be effected pursuant
      to this Agreement in accordance with Clause 9;

      "Completion Balance Sheet" means a consolidated balance sheet of the
      Business as at the Completion Date reflecting the Assets and Assumed
      Liabilities acquired or assumed pursuant to this Agreement prepared
      pursuant to and in accordance with Clause 13 and the Accounting
      Principles;

      "Completion Date" means the date on which Completion occurs;


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<PAGE>

      "Completion Net Asset Value" means the Net Asset Value as shown in the
      Completion Balance Sheet calculated in Dollars applying the Conversion
      Rate;

      "Conditions" means the conditions precedent to Completion specified at
      Clause 2 and "Condition" shall mean any of them;

      "Contracts" means

      (a)   the Leases;

      (b)   all contracts, engagements or orders entered into on or prior to the
            Completion Date by or on behalf of any of the Companies with
            customers for the sale of goods or the supply of services by any of
            the Companies in connection with the Business which at the
            Completion Date remain to be performed in whole or in part including
            any outstanding obligations owed to any member of the TCS Group in
            relation to the Business in respect of Inter-company Trading
            Indebtedness;

      (c)   all agreements entered into on or prior to the Completion Date by
            any member of the Thales Group in connection with the Business with
            sales representatives, sales agents or distributors which are extant
            at the Completion Date;


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<PAGE>

      (d)   all licences granted by any of the Companies in relation to the
            Business IPR;

      (e)   all licences granted in favour of any member of the Thales Group in
            relation to Intellectual Property Rights used exclusively in
            connection with the Business, including (but not limited to) those
            contained in the Disclosure Letter, except those which were intended
            to also be used outside of the Business but which, as a matter of
            fact, were only used in connection with the Business as at
            Completion, which licences shall be deemed to be "Shared Assets";
            and

      (f)   all other contracts entered into in the course of carrying on the
            Business to which any member of the Thales Group is a party and
            which have not been fully performed on the Completion Date and which
            relate to the Business.

            Notwithstanding the above, "Contracts" shall not include contracts
            or leases in respect of Business Properties, contracts with
            Employees, US Embargo Country Contracts, the contract with Coppice
            Developments Limited and contracts relating to the Excluded
            Liabilities;

      "Conversion Rate" means the mid-market spot exchange rate between the two
      relevant currencies on the relevant date as published in the Financial
      Times (London edition);

      "Cross Patents Licence Agreements" means the patent licence granted by
      Thales in respect of all group patents including the patent application
      for "Voice Activity Monitor" owned by TCSL (UK Application number: UK
      9916430.3; application date 13 July 1999, publication number GB 2352948;

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      publication date 7 February 2001; inventor Neil Martin Crick) to Alcatel
      and Thomson Multimedia;

      "Cumulative Orders" means the total cumulative value (calculated in Euro
      at the Conversion Rate on the 30 June 2002) of the recorded orders of the
      Companies received in respect of the Business in accordance with the
      provisions of Clause 7.7.6 during the period 1 January to 30 June 2002;

      "Disclosure Documents" means those documents disclosed to the Purchaser's
      Solicitors and which are scheduled and attached to the Disclosure Letter;

      "Disclosure Letter" means the letter of even date with this Agreement
      written by and on behalf of Thales to the Purchasers;

      "Dollar" or "USD" or "$" means dollar, the lawful currency of the United
      States of America;

      "Embargo Contracts" means (a) the purchase order placed by Rashed Al
      Makhawi for the supply of "Wordnet" recorders for Libya pursuant to a
      distribution agreement between Rashed Al Makhawi and TCSL (copies of the
      purchase order and the distribution agreement being attached to the
      Disclosure Letter); and (b) the purchase order placed by the Islamic
      Republic of Iran Civil Aviation Authority dated February 2002 for the
      supply of spares (a copy of which is attached to the Disclosure Letter)
      (the "Iran Contract");

      "Employees" means those employees employed by the Thales Group in the
      Business as at Completion who are to transfer to the Purchasers and who
      are listed at Schedule 18 as amended at Completion to reflect changes in
      the period between signing and Completion provided that such changes


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      have occurred in compliance with Clause 10 and the total number of
      Employees in each jurisdiction at Completion does not exceed the number of
      Employees in each jurisdiction at the date of this Agreement unless
      otherwise agreed in writing by Nice and Thales;

      "Employment Liabilities" has the meaning set out in Clause 14.1.2;

      "Encumbrances" means all pledges, charges, liens, mortgages, security
      interests, pre-emption rights, options and any other similar encumbrances
      or third party rights or claims of any similar kind (other than liens
      arising or incurred in the ordinary course of business and securing
      obligations not material in amount and provisions constituting reservation
      and retention of title clauses entered into in the ordinary course of
      business in favour of suppliers);

      "Environment" has the meaning ascribed by Section 1 (2) of the Environment
      Protection Act 1990 and equivalent law in all other countries where the
      Business has been and/or is conducted;

      "Environmental Laws" means all laws, regulations, directives and other
      measures imposed by any relevant body to which the Business has been
      subject insofar as they relate to the pollution or protection of the
      Environment;

      "Environmental Matters" means:-

      (a)   pollution or contamination;


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      (b)   the release, spillage, deposit, escape, discharge, leak, emission or
            presence of Hazardous Materials or Waste;

      (c)   exposure of any person to Hazardous Materials or Waste;

      (d)   the creation of noise, vibration, radiation or common law or
            statutory nuisance or other adverse impact on the Environment;

      (e)   worker health and safety; and

      (f)   other matters relating to the protection, condition, maintenance or
            replacement of the Environment or any part of it arising out of the
            manufacturing, processing, treatment, keeping, handling, labelling,
            use (including as a building material), possession, supply receipt,
            sale, purchase, import, export or transportation or presence of
            Hazardous Materials or Waste;

      "European Transfer Legislation" has the meaning set out in Clause
      14.2.1(a);

      "Excluded Assets " means:

      (a)   Inter-company Debts; and

      (b)   cash in hand or at a bank not included in the Completion Balance
            Sheet;

      (c)   any US Embargo Country Contracts; and


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      (d)   the Excluded Trade Marks;

      "Excluded Employees" means any persons not named at Schedule 18 as
      Employees;

      "Excluded Liabilities" means:

      (a)   Inter-company Debts and External Debt outstanding at Completion;

      (b)   Inter-company Trading Indebtedness owed by any member of the TCS
            Group to any member of the Thales Group other than the Companies;

      (c)   any liability to Taxation;

      (d)   any liability relating to US Embargo Country Contracts;

      (e)   any liability arising from or in connection with Cliffstone or
            obligations to Cliffstone, other than the Assumed Cliffstone
            Obligations;

      (f)   any liability in relation to the Excluded Employees; and

      (g)   any liability in relation to the contract with Coppice Developments
            Limited; and


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      (h)   all of the debts, obligations and other liabilities and all claims
            of and against the Companies arising before or after Completion
            which are not Assumed Liabilities;

      "Excluded Trade Marks" means the trade marks, service marks, brand names,
      certification marks, trade dress, business names, and other indications of
      origin and any Internet protocol addresses and networks, including domain
      names, e-mail addresses and world wide web (www) and http addresses,
      network names, network addresses and services which subsist of or include
      "Thales", "Thales Contact Solutions", "Racal", "Thomson", or any
      confusingly similar word or any Thales, Racal or Thomson specific logos;

      "External Debt" means the indebtedness of the Companies (in relation to
      the Business) to banks or other providers of loan finance facilities but
      excluding:

      (a)   Inter-company Debts;

      (b)   Inter-company Trading Indebtedness; and

      (c)   all amounts in respect of the Leases;

      "Fixtures and Fittings" means the fixtures (other than the Machinery and
      Equipment and any landlords' fixtures and fittings at the Business
      Properties) belonging to the Companies or any other member of the Thales
      Group and used exclusively in connection with the Business;


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<PAGE>

      "French Business" means that part of the Business operated as a going
      concern by TCSA and all the Assets used in that part of the Business by
      TCSA other than the Assigned IPR;

      "GAAP" means generally accepted accounting principles in the relevant
      country;

      "German Business" means that part of the Business operated as a going
      concern by TCS GmbH and all the Assets used in that part of the Business
      by TCS GmbH other than the Assigned IPR;

      "Goodwill" means the goodwill, custom and connections of the Companies in
      connection with the Business including the exclusive right for Nice and
      the Purchasers to represent themselves as carrying on the Business in
      succession to the Companies but, for the avoidance of doubt, shall not
      include any right to the use of the Excluded Trade Marks save as
      specifically provided for under Clause 24 of this Agreement;

      "Governmental Authority" means any United Kingdom, France, United States
      of America, Germany, Israel, or other federal, state, provincial, or local
      governmental, regulatory, or administrative authority, agency or
      commission or any court, tribunal, or judicial or arbitral body and any
      body relating to any of the foregoing or to any jurisdiction in which the
      Business has operations;

      "Guarantees" means those guarantees or obligations expressly relating to
      the Business and/or Assets and/or Assumed Liabilities entered into by
      Thales or any member of the Thales Group and now subsisting and specified
      in Schedule 8;


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<PAGE>

      "Hazardous Materials" means anything which alone or in connection with
      other things is capable of causing harm to man or to the Environment or
      any other organism supported by the Environment such as to constitute a
      breach of Environmental Laws;

      "Hedge End Landlord" has the meaning set out in paragraph 2 of part 2 of
      Schedule 3;

      "Hedge End Licence" means the license granted pursuant to paragraph 10 of
      part 2 of Schedule 3;

      "Hedge End Property" means the office premises at Hedge End, Eastleigh,
      Hampshire demised by and more particularly described in a lease dated 9
      July 1998 made between Whitbread plc, Archer Communications Systems
      Limited, and Racal Electronics plc and which is also for the purposes of
      this Agreement one of the Business Properties;

      "Hedge End Sublease" means a sublease in the agreed terms to be entered
      into between Thales Properties Limited and the UK Purchaser relating to
      the Hedge End Property;

      "ICTA 1988" means the Income and Corporation Taxes Act 1988;

      "Independent Accountants" means either (a) an independent internationally
      reputable firm of chartered accountants agreed between


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      Thales and Nice or (b) in default of agreement as to the identity of the
      independent internationally reputable firm of chartered accountants within
      5 days of either party notifying the other of its wish to appoint an
      independent firm, a specific member of an independent internationally
      reputable firm of chartered accountants to be nominated on the application
      of either party by the President for the time being of the Institute of
      Chartered Accountants in England and Wales;

      "Information Technology" means computer and telecommunication hardware,
      software, networks and/or other information technology and any aspect or
      asset of a business which relies on computer hardware, software, networks
      and other information technology (embedded or otherwise);

      "Instem Contracts" means each of the manufacturing agreement between TCSL
      and Instem Technologies Limited dated 5 November 2001, the agreement for a
      revolving credit facility between TCSL and Instem Technologies Limited
      dated 5 November 2001, the equitable charge granted by Instem Technologies
      Limited to TCSL dated 5 November 2001 and the deed of priority between
      TCSL and the Governor and Company of the Bank of Scotland dated 5 November
      2001;

      "Initial Purchase Price" means the price, exclusive of VAT, to be paid by
      the Purchasers in consideration for the Cliffstone Shares, Cliffstone
      Note, Business and Assets in accordance with this Agreement calculated in
      accordance with Clause 7.2 but excluding any Sales Earn Out Amount and any
      Earn Out Consideration payable in accordance with Clauses 7.4 and 7.7
      respectively;

      "Intellectual Property Rights" means all intellectual property in any
      jurisdiction, whether registered, pending applications or unregistered,
      including without limitation: (a) all trade marks, service marks, brand
      names,


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      certification marks, trade dress, business names and other indications of
      origin; (b) Patents; (c) trade secrets, know-how and other confidential or
      non-public business information, including ideas, manufacturing and
      production processes and techniques, research and development information,
      drawings, specifications, designs, source codes plans, proposals and
      technical data, business and marketing plans, market surveys, market
      know-how and customer lists and information; (d) writings and other
      copyright works, including computer programs, source code, object code and
      documentation (whether or not released), design right, architecture,
      database rights, and all copyrights and any non-registered copyrights to
      any of the foregoing; (e) integrated circuit topographies and mask works;
      (f) Internet protocol addresses and networks, including domain names,
      e-mail addresses, world wide web (www) and http addresses, network names,
      network addresses and services; (g) privacy and publicity rights; and (h)
      all other intellectual property rights of a similar nature or having
      equivalent or similar effect to these which may subsist anywhere in the
      world;

      "Inter-company Debts" means all amounts owing on interest bearing or
      non-interest bearing loan or current account to or by any of the
      Companies, from or to any member of the Thales Group as at Completion,
      other than Inter-company Trading Indebtedness;

      "Inter-company Trading Indebtedness" means the trading debts in the
      ordinary course of business owing to or by any of the Companies, (in
      relation to the Business) by or to any member of the Thales Group
      including in respect of goods and services supplied, and for this purpose
      trading debts arising in the ordinary course of business shall include
      charges in respect of publicity, administration and other services
      provided by members of the Thales Group;

      "Inventory" means all stocks of raw materials, supplies, work in progress,
      parts and components and finished goods and other stock-in-trade and


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      packaging held, used or owned by the Companies at the Completion Date
      exclusively for the purposes of or exclusively in connection with the
      Business, including items which although subject to reservation of title
      by the relevant sellers are under the direct or indirect control of the
      Companies including but not limited to inventory of the Business located
      at Instem or other third party locations;

      "IPR Assignment" means the agreement in the form attached at Schedule 14
      to be entered into between Thales Electronics, Thales and Nice relating to
      the assignment of the Assigned IPR;

      "IPR Licence" means the licence to be entered into between Thales
      Electronics and TCSL granting the right for TCSL to use the Assigned IPR
      in the form attached at Schedule 14;

      "IPR Licence Novation Deed" means the deed in the form attached at
      Schedule 14 to be entered into between TCSL, Thales Electronics and the UK
      Purchaser relating to the novation of the IPR Licence;

      "Key Employees" means those Employees listed at Schedule 20;

      "(pound)" or "pounds" means pounds sterling, the lawful currency of the
      United Kingdom;


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<PAGE>

      "Landlord's Consent" has the meaning set out in paragraph 2 of part 2 of
      Schedule 3;

      "Leases" means all those contracts, engagements or orders entered into on
      or prior to the Completion Date by or on behalf of the Companies in
      relation to the leasing, lease purchase or hire of goods or equipment for
      use exclusively in the Business which on the Completion Date remain to be
      performed in whole or in part;

      "Machinery and Equipment" means all the plant, machinery, equipment,
      Company owned vehicles, office, warehouse and factory equipment, furniture
      and furnishings, together with all spare parts, accessories and consumable
      supplies therefor and other goods used by the Companies exclusively in the
      Business at the Completion Date;

      "Management Accounts" the management accounts of the TCS Group (excluding
      TCSA) for the five month period ending 31 May 2002;

      "Material IPR" means all the Intellectual Property Rights used in
      connection with the Business relating to the following products:

      (a)   Renaissance;

      (b)   Wordnet (versions 1, 2 and 3);

      (c)   Tienna;

      (d)   Mirra; and

      (e)   Agent Quality Monitoring (and any applications associated therewith
            which are owned by the Companies);

      "NAV Target" means $29,982,000 being the combined net asset value of the
      Business as at 31 December 2001 calculated in accordance with the


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      Accounting Principles as extracted from the Accounts Combination
      Statement.

      "NAV Statement" means the statement agreed between Thales and Nice
      pursuant to Clause 13 or, in the event of the operation of Clause 13.4,
      the determination of the Independent Accountants of the amount which in
      their opinion is the Net Asset Value;

      "Net Asset Value" means the aggregate amount, as at the close of business
      on the Completion Date, of the consolidated fixed and current assets of
      the Business (excluding the Goodwill, the Business IPR and any other
      intangible assets) less the aggregate amount, as at the close of business
      on the Completion Date, of the consolidated liabilities of the Business
      calculated in accordance with the Accounting Principles in Dollars
      applying the Conversion Rate;

      "Nice's Accountants" means Ernst & Young, Israel;

      "Nice Shares" has the meaning given in Clause 7.1;

      "Non-UK Business" means that part of the Business carried on outside the
      United Kingdom;

      "Non-UK Employees" means those employees employed in the Business outside
      the United Kingdom as listed in Part 2 of the Schedule 18 as amended at
      Completion to reflect changes in the period between signing and Completion
      provided that such changes have occurred in compliance with Clause 10 and
      the total number of Non-UK Employees in each non-UK jurisdiction at
      Completion does not exceed the number of Non-UK


                                       26
<PAGE>

      Employees in each non-UK jurisdiction on the date of this Agreement unless
      otherwise agreed in writing by Nice and Thales;

      "Patents" means any and all patents, patent applications (including
      letters patent, industrial designs, and inventor's certificates), design
      registrations, invention disclosures, and applications to register
      industrial designs, and any and all rights to any of the foregoing
      anywhere in the world, including any provisionals, substitutions,
      extensions, supplementary protection certificates, re-examinations,
      reissues, renewals, divisions, continuations in part (or in whole),
      continued prosecution applications, requests for continued examination,
      and other similar filings or notices provided for under the laws of any
      country;

      "PAYE" means any payment of or on account of any income assessable to
      income tax under Schedule E as required under Section 203 of ICTA 1988 and
      any regulations made under it or its equivalent in any relevant
      jurisdiction;

      "Prism Product" means the Tactical Application Integration Suite product
      known as "Prism" as at the date of Completion (version 2.7.27) owned by
      Cliffstone;

      "Purchasers" means the persons defined as such in the parties clause, and
      "Purchaser" shall mean any of them;

      "Purchasers' Group" means the Purchasers and any holding company of the
      Purchasers and any subsidiaries of such holding company, holding and
      subsidiary having the meanings given in the Companies Act 1985 of the
      United Kingdom;


                                       27
<PAGE>

      "Purchasers' Solicitors" means SJ Berwin, London;

      "Records" means all books and records containing or relating exclusively
      to Business Information or on which any Business Information is recorded
      (including, without limitation, all documents and other material (whether
      in hard copy or in any forms of computer or machine readable material));

      "Registration Rights Agreement" means the registration rights agreement
      between Nice and Thales granting Thales certain rights with respect to the
      registration under the United States Securities Act of 1933 as amended
      (the "Securities Act") of the Nice Shares issued to Thales as
      consideration pursuant to this Agreement set out at Schedule 11;

      "Reseller Agreement" means the Reseller Agreement between TCSL and
      Cliffstone dated 5 December 2000 (as amended) relating to the Prism
      Product;

      "Restricted Customer" means a person who was a customer of the Business at
      any time during the two years prior to the Completion Date;

      "Restricted Supplier" means a person who was a supplier of the Business at
      any time during the two years prior to the Completion Date;

      "Relevant Employees" means those employees listed at Schedule 19;

      "Service Documents" means a claim form, application notice, order,
      judgment or other document relating to any proceedings;


                                       28
<PAGE>

      "Shared Assets" has the meaning set out in clause 5.2;

      "Surplus Employees" means those Employees of TCSA and TCS GmbH listed at
      Schedule 22;

      "Sales Earn Out Amount" has the meaning set out in Clause 7.4 and
      calculated in accordance with Schedule 21;

      "2002 Sales" means the aggregate of:

      (a)   the net sales revenues of the Companies attributable to sales of TCS
            Products for the period from 1 January 2002 and ending on the
            Completion Date as set out in the management accounts of the
            Companies and recorded in the books of the Companies as revenue for
            the period concerned, with such adjustments as are necessary to
            comply with US GAAP including, for the avoidance of doubt, the
            inclusion of net sales revenues not recognised in the Carved Out
            Accounts prepared under US GAAP for the period ending on the
            Accounting Date but properly recognised as net sales revenues in the
            period from 1 January 2002 and ending on the Completion Date under
            US GAAP; and

      (b)   the net sales revenues of the Purchasers' Group attributable to
            sales of TCS Products for the period from the Completion Date and
            ending on 31 December 2002 by reference to the published financial
            statements of Nice for the financial year ending on 31 December
            2002;

      "2002 Sales Statement" means the statement agreed between Thales and Nice
      pursuant to Schedule 21, or in the event of the operation of paragraph 2.5
      of Schedule 21, the determination of the Independent Accountants of the
      amount which is in their opinion the 2002 Sales;


                                       29
<PAGE>

      "Tax" or "Taxation" means any form of tax, duty, charge, fee, levy,
      deficiency impost, withhholding or other assessment of whatever kind or
      nature and whether created or imposed including, without limitation, any
      income tax (including income tax or amounts equivalent to income tax
      required to be deducted withheld from or accounted for in respect of any
      payment) net income, gross income, profits, gross receipts, advance
      corporation tax, inheritance tax, value added tax, escheat property,
      rates, customs and excise duties, real or personal property, sales, ad
      valorem, withholding, national insurance and social security, retirement,
      excise, employment, unemployment, minimum, estimated, severance, stamp
      duty, stamp duty reserve tax, property, occupation, environmental,
      windfall profits, use, service, net worth, payroll, franchise, license,
      capital gains tax, customs, capital transfer tax, capital duty, recording
      and other tax, duty, charge, fee, levy, deficiency, impost, withholding or
      other assessment or charge of any kind whatsoever, wherever created or
      imposed, payable to or imposed by any Tax Authority, including any
      liability therefore as a transferee or as a result of any tax sharing or
      similar agreement, together with any interest, charges, penalties, fines
      or additions to tax relating thereto;

      "Tax Authority" means any branch, office, department, agency,
      instrumentality, court, tribunal, officer, employee, designee,
      representative, or other person that is acting for, on behalf or as a part
      of any foreign or domestic government (or any political subdivision
      thereof) that is engaged in or has any power, duty, responsibility or
      obligation relating to the legislation, promulgation, interpretation,
      enforcement, regulation, monitoring, supervision or collection of or any
      other activity relating to any Tax;

      "TCSA" means Thales Contact Solutions SA a French societe anonyme whose
      registered office is at 18 avenue Dutartre, 78150 Le Chesnay, France;


                                       30
<PAGE>

      "TCS GmbH" means Thales Contact Solutions GmbH a company incorporated in
      Germany whose registered office is at Technologie Park Bergisch Gladbach,
      Friedrich-Ebert Strasse, D-51429, Bergich Gladbach, Germany;

      "TCSL" means Thales Contact Solutions Limited (a company incorporated in
      England and Wales with the registered number 560700 whose registered
      office is at Western Road, Bracknell, Berkshire RG12 1RG;

      "TCS Group" means the Companies and the Business and Assets (as the
      context may require);

      "TCS Inc" means Thales Contact Solutions Inc, a company incorporated under
      the laws of the State of Delaware , USA, whose principal place of business
      is at 480 Spring Park Place, Suite 1000, Herndon VA20170, USA;

      "TCS Products" means all of the various secure voice recording,
      surveillance and replay systems and products and application software for
      business management solutions in contact centres, public safety and
      wholesale trading platforms (including in particular the products listed
      within the definition of Material IPR) and all other products and services
      sold or supplied in the course of the Business;

      "Thales IPR Assignment" means the agreement in the form attached at
      Schedule 14 to be entered into between TCSL and Thales Electronics;

      "Thales Electronics" means Thales Electronics Plc (a company incorporated
      in England and Wales with the registered number 497098) whose registered
      office is at Western Road, Bracknell, Berkshire RG12 1RG;


                                       31
<PAGE>

      "Thales Group" means Thales and each of its subsidiaries (including the
      Companies), any holding company of Thales and all other subsidiaries of
      such holding company from time to time;

      "Thales Properties Limited" means Thales Properties Limited (a company
      incorporated in England and Wales with registered number 1153834 whose
      registered office is at Western Road, Bracknell, Berkshire RG12 1RG;

      "Thales TRC, Inc" means Thales TRC Inc a company incorporated under the
      laws of the State of Florida, USA whose principal place of business is at
      North Harrison Parkway, Building A, Suite 100, Sunrise, Florida
      33323-2899;

      "Thales' Scheme" as defined in Schedule 6;

      "Third Party Licensed IPR" means Intellectual Property Rights which are
      licensed under Contracts as defined in part (e) of the definition of
      "Contracts" other than under the Wordnet 3 Licence and the Reseller
      Agreement;

      "Transfer Regulations" means the Transfer of Undertakings (Protection of
      Employment Regulations 1981, as amended;

      "Transitional Services Agreement" means the agreement in the form attached
      as Schedule 12 to be entered into between Thales, certain members of the
      Thales Group and the Purchasers relating to the provision of specified
      services for an interim period following Completion;

      "UK Business" means that part of the Business operated as a going concern
      by TCSL and all the Assets used in that part of the Business by TCSL other
      than the Assigned IPR;


                                       32
<PAGE>

      "UK Employees" means the employees of TCSL engaged in the UK Business as
      listed in Part 1 of Schedule 18 as amended at Completion to reflect
      changes in the period between signing and Completion provided that such
      changes have occurred in compliance with Clause 10 and the total number of
      UK Employees at Completion does not exceed the number of UK Employees at
      the date of this Agreement unless otherwise agreed in writing by Nice and
      Thales;

      "US Business" means that part of the Business operated as a going concern
      by TCS Inc and all the Assets used in that part of the Business by TCS
      Inc;

      "US Embargo Countries" means any of Burma (Myanmar), Cuba, Iran, Iraq,
      Libya, Sudan, Taliban (Afghanistan), and UNITA (Angola);

      "US Employees" shall mean the Non UK Employees listed on Schedule 19 which
      are employees of TCS, Inc;

      "US Embargo Country Contracts" means any contract with a party resident in
      any of the US Embargo Countries or for the provision of goods or services
      to any person, directly or indirectly, in any of the US Embargo Countries;

      "VAT" means value added tax or its equivalent in any relevant
      jurisdiction;


                                       33
<PAGE>

      "VATA 1994" means the Value Added Tax Act 1994;

      "Warranties" means the warranties given by Thales as set out in Part 1 of
      Schedule 4 and Schedule 5 and references to "Warranty" shall be construed
      accordingly;

      "Waste" means any waste including anything which is abandoned, unwanted or
      surplus, irrespective of whether it is capable of being recovered or
      recycled or has any value;

      "Wordnet 3 Licence" means the Software Licence and Service Agreement dated
      1st March 2002 between TCSL and Origin Data Realisation Limited;

      "Works" means the carrying out of: (a) inspection, investigation, sampling
      and monitoring works; and (b) any works (including the installation,
      operation, repair or replacement of plant or equipment) in order to
      remove, remedial or contain any Environmental Matter or in order to
      prevent an Environmental Matter from arising.

1.2   In this Agreement, unless otherwise specified:

      1.2.1 the singular includes the plural and reference to any gender
            includes the other genders;

      1.2.2 references to persons include bodies corporate, unincorporated
            associations and partnerships;


                                       34
<PAGE>

      1.2.3 words and phrases defined in the Companies Act have the same
            meanings in this Agreement but the word "company" shall be construed
            so as to include any body corporate, company or corporation,
            wherever and howsoever incorporated or established;

      1.2.4 references to "Clauses" are to clauses or sub-clauses of this
            Agreement, references to "Schedules" are to the schedules to this
            Agreement and references within a Schedule to "paragraphs" are to
            paragraphs or sub-paragraphs of that Schedule;

      1.2.5 the expressions "holding company", "subsidiary" and "wholly owned
            subsidiary" shall have the meaning given in the Companies Act 1985
            of the United Kingdom;

      1.2.6 a person shall be deemed to be connected with another if that person
            is connected with another within the meaning of section 839 ICTA
            1988;

      1.2.7 references to times of the day are to London time;

      1.2.8 the expression "control" shall have the meaning given within section
            416 ICTA 1988.

1.3   In this Agreement:

      1.3.1 any reference to any statute or statutory provision includes any
            consolidation or re-enactment of the same


                                       35
<PAGE>

            and any subordinate legislation in force under the same from time to
            time;

      1.3.2 the index and headings are for reference purposes only and shall not
            affect the interpretation of this Agreement;

      1.3.3 references to documents "in the agreed terms" are to documents the
            terms of which have been agreed by or on behalf of the parties and a
            copy of which has been initialled for the purpose of identification
            by or on behalf of the parties; and

      1.3.4 references to writing shall include any methods of reproducing words
            in a legible and non-transitory form.

1.4   The Schedules are an integral part of this Agreement and shall have the
      same force and effect as if expressly set out in the body of this
      Agreement and references to this Agreement shall include the Schedules.

1.5   Any reference to any English legal term for any action, remedy, method of
      legal proceeding, legal concept or matter, legal document, legal status,
      court, official or any legal thing shall in respect of any jurisdiction
      other than England be treated as a reference to the closest equivalent
      English legal term, proceeding concept or matter in that legal
      jurisdiction.

1.6   References to the knowledge, information, belief or awareness of any
      person shall be treated as including any knowledge, information, belief or
      awareness which the person would have if the person had made all usual and
      reasonable enquiries of the Relevant Employees.


                                       36
<PAGE>

1.7   Any reference to any amount of money which is denominated in any currency
      shall where the context so requires or admits be deemed to include a
      reference to the same amount in any other currency, calculated by applying
      the closing mid point spot rate for the previous trading day as published
      in the London edition of the Financial Times on the date on which such sum
      falls to be determined.

2     CONDITIONS

2.1   Completion of the sale and purchase of the Cliffstone Shares, Cliffstone
      Note, Business and Assets shall be conditional upon the following
      conditions being satisfied in accordance with this Agreement:

      2.1.1 in respect of competition and/or anti-trust or any analogous law or
            regulation:

            (a)   a statement having been issued by the UK Office of Fair
                  Trading or the appropriate Minister in terms satisfactory to
                  the Purchaser that is not the intention of the Secretary of
                  State for Trade and Industry to refer the transaction to the
                  Competition Commission or such transaction having been so
                  referred, the Secretary of State for Trade and Industry
                  indicating that the Competition Commission has concluded that
                  such transaction is not expected to operate against the public
                  interest or, if it has not so concluded, that the Secretary of
                  State for Trade and Industry does not propose to prohibit or
                  restrain such transaction and that any undertakings he may
                  require from the Purchaser in lieu of such action


                                       37
<PAGE>

                  are in terms satisfactory to the Purchaser; and

            (b)   receipt of any necessary approval of the Tel Aviv Stock
                  Exchange, the Investment Centre of the Israel Ministry of
                  Industry and Trade and the Office of the Chief Scientist of
                  the Israel Ministry of Industry and Trade to the Issuance of
                  the Nice Shares to Thales; and

            (c)   all other filings, notifications or applications having been
                  made and all consents that are necessary under any relevant
                  national merger control rules, anti-trust or similar
                  legislation having been obtained in terms satisfactory to the
                  Purchaser and any waiting or other time or limitation periods
                  under such rules having expired, lapsed or otherwise
                  terminated in respect of the proposed acquisition by the
                  Purchaser;

      2.1.2 Thales procuring that Origin Data Realisation Limited consents to
            the following in relation to the Wordnet 3 Licence:

            (a)   an assignment from TCSL to Thales Electronics;

            (b)   the grant of a sub-licence from Thales Electronics to TCSL;

            (c)   an assignment or novation of the sub-licence referred to in
                  (b) above from TCSL to UK Purchaser; and


                                       38
<PAGE>

            (d)   an assignment from Thales Electronics to Nice,

                  or such alternative series of transactions with similar effect
                  as Nice may agree with Thales.

2.2   Thales and the Purchasers shall each use all reasonable endeavours to
      procure the due fulfilment of the Conditions as expeditiously as possible
      so far as lies within their respective powers to do so and the Purchasers
      may following written notice to Thales in their sole and absolute
      discretion waive the condition contained in Clause 2.1.2.

2.3   If the Conditions are not fulfilled by 31 December 2002, this Agreement
      (save for Clause 26 (Confidentiality), Clause 29 (Announcements) and
      Clause 31 (Costs) which shall remain in force) shall automatically
      terminate and none of the parties shall have any claim of any nature
      whatsoever against the other parties under this Agreement save that the
      rights and liabilities of the parties which have accrued prior to
      termination shall subsist.

2.4   Thales and the Purchasers undertake to keep one another informed as to
      progress towards satisfaction of the Conditions and in particular to
      disclose in writing to one another anything which will or may prevent any
      of the Conditions from being satisfied by the Completion Date immediately
      it comes to the notice of either of them.

2.5   The Purchasers shall consult and collaborate with Thales with respect to
      any filings, notifications or applications and discussions with any
      relevant, national Governmental Authority or supranational Authority.

3     BUSINESS PROPERTIES


                                       39
<PAGE>

3.1   On Completion the UK Purchaser shall enter into either the Hedge End
      Sublease or the Hedge End Licence as determined by the provisions of Part
      2 of Schedule 3.

3.2   Thales shall indemnify and keep indemnified and hold harmless Nice and the
      UK Purchaser (and, to the extent relevant, any other member of the
      Purchaser's Group) on demand in respect of any losses, liabilities,
      claims, demands, damages, costs and expenses ("Losses") arising from or in
      connection with any claim made to Nice or the UK Purchaser or any member
      of the Purchaser's Group by the Hedge End Landlord in respect of the Hedge
      End Licence or the Purchaser's use or occupation of the Hedge End
      Property.

3.3   Thales shall indemnify and keep indemnified and hold harmless Nice and the
      UK Purchaser (and, to the extent relevant, any other member of the
      Purchaser's Group) on demand in respect of any costs of relocation of the
      Business as contemplated by clause 3.5 ("Relocation Costs") required in
      the event that the Hedge End Landlord requires the UK Purchaser to vacate
      the Hedge End Property.

3.4   Thales shall indemnify and keep indemnified and hold harmless Nice and the
      UK Purchaser (and, to the extent relevant, any other member of the
      Purchaser's Group) on demand in respect of any Losses arising from the
      Hedge End Landlord denying occupation of the Hedge End Property to the UK
      Purchaser provided that such indemnity shall not apply where the UK
      Purchaser has been given written notice to vacate the Hedge End Property
      and the UK Purchaser fails to vacate within such period as would give the
      UK Purchaser a reasonable time to relocate to alternative premises
      pursuant to the procedures specified in Clause 3.5 and provided that in
      the event that the Hedge End Landlord denies occupation as aforesaid the
      UK Purchaser shall vacate the Hedge End Property as soon as reasonably
      practicable pursuant to the procedures specified in Clause 3.5.


                                       40
<PAGE>

3.5   If the Hedge End Landlord requires the UK Purchaser to vacate the Hedge
      End Property then the UK Purchaser shall conduct a search for alternative
      premises which premises shall be within the south east of England
      (excluding the Isle of Wight). Following the identification of appropriate
      premises, the UK Purchaser shall provide details of such premises to
      Thales and agree with Thales a timetable for the relocation and a
      specification for fitting out the relevant premises. The fit out of the
      premises shall be such as to satisfy the UK Purchaser's reasonable
      requirements provided that such requirements shall not exceed the
      specification at the Hedge End Property. The UK Purchaser shall be
      entitled to engage any appropriate professionals to assist it in the
      relocation or other service providers including real estate agents,
      lawyers, office designers, architects, building contractors (and all
      relevant sub-contractors) and removal services provided that Thales shall
      be entitled to require the UK Purchaser to engage such service providers
      as it shall direct from a short list of such firms provided by Thales to
      the UK Purchaser and on terms negotiated by Thales directly with such
      service providers.

3.6   The UK Purchaser shall give all reasonable assistance and support of the
      application for the consent of the Hedge End Landlord to the Hedge End
      Sublease and Nice shall, if so required by the Hedge End Landlord as a
      pre-condition of such consent provide to the Hedge End Landlord its
      guarantee of the obligations of the UK Purchaser's under the Landlord's
      Consent.

3.7   The indemnities at Clauses 3.2 and 3.3 shall not extend to any Losses or
      Relocation Costs (as the case may be) to the extent that such Losses
      and/or Relocation Costs would not have been incurred had the UK Purchaser
      complied with the provisions of Clauses 3.5 and 3.6.

3.8   The indemnities at Clauses 3.2 and 3.3 shall cease to have effect on the
      earlier of (a) the UK Purchaser voluntarily vacating Hedge End Property


                                       41
<PAGE>

      other than on notice from the Hedge End Landlord, and (b) the grant of the
      Hedge End Sublease.

3.9   The leases or other contracts to which any of the Companies or any other
      member of the Thales Group is a party in respect of the occupation by any
      of the Companies of those Business Properties (the "Relevant Business
      Properties") specified in Part 1B of Schedule 3 shall be treated as
      Assumed Liabilities notwithstanding the absence of any landlord's consent
      or any other necessary consent to assignment, transfer or other action
      necessary to vest legal and beneficial title to the Relevant Business
      Properties in the relevant Purchasers and accordingly the Purchasers in
      each jurisdiction shall assume the leases or other contracts in respect of
      the Relevant Business Properties but only to the extent that copies of
      such documents are included in the Disclosure Documents and Clause 21
      shall apply to the leases or other contracts as aforesaid as if they were
      "Contracts" for the purposes of Clause 21 provided that the Purchasers
      shall not be liable for or assume any liability for any act, neglect,
      default or omission in respect of any of the Relevant Business Properties
      committed by any member of the Thales Group or occurring before
      Completion.

4     SALE AND PURCHASE OF THE CLIFFSTONE SHARES AND NOTE

4.1   Subject to the terms of this Agreement, Thales shall or shall procure that
      Thales TRC Inc. shall sell free from Encumbrances and the UK Purchaser and
      the US Purchaser (relying on the Warranties) shall purchase, as at and
      from the Completion Date, the Cliffstone Shares and the Cliffstone Note
      (respectively) together with all rights attached or accruing to them at
      Completion.

4.2   Nice shall not be obliged to complete the purchase of any of the
      Cliffstone Shares unless the purchase of all the Cliffstone Shares, the
      Cliffstone Note


                                       42
<PAGE>

      and the purchase of the Business and Assets under this Agreement is
      completed simultaneously.

4.3   Thales undertakes to take all steps necessary to ensure all rights of
      pre-emption over any of the Cliffstone Shares and Cliffstone Note are
      waived.

4.4   Nice shall provide to Thales all reasonable assistance required by Thales
      to enable it to procure the consent of Cliffstone with respect to the sale
      of the Cliffstone Shares, the Cliffstone Note and the matters referred to
      at Clause 9.2.4.

5     SALE AND PURCHASE OF THE BUSINESS

5.1   Subject to the terms of this Agreement, Thales shall or shall procure that
      the Companies (and in relation to the Assigned IPR and the rights under
      the Wordnet 3 Licence (subject to certain obligations in respect thereof),
      Thales Electronics) shall sell free from all Encumbrances and in
      accordance with the covenant in Clause 5.3 and the Purchasers (relying on
      the Warranties) shall purchase, as at and with effect from the Completion
      Date the Business as a going concern and the Assets (to be divided between
      the Purchasers as provided in Clause 5.4 below), comprising:

      5.1.1 the Machinery and Equipment;

      5.1.2 the Fixtures and Fittings;

      5.1.3 the Inventory;

      5.1.4 the Goodwill;


                                       43
<PAGE>

       5.1.5  the benefit of the Contracts;

       5.1.6  all of the rights against third parties (including, without
              limitation, all rights in connection with such third party
              guarantees, warranties, indemnities, restrictive covenants,
              confidentiality obligations and representations and all rights of
              action of whatever kind whether or not any proceedings have
              commenced) with respect to the Business;

       5.1.7  the Business IPR;

       5.1.8  the Accounts Receivable;

       5.1.9  the Business Information;

       5.1.10 the Records; and

       5.1.11 all other property rights and all other assets of whatsoever
              nature (but not any further Intellectual Property Rights) of any
              member of the Thales Group used exclusively in relation to the
              Business.

5.2    It is understood that if any property rights or other assets or rights of
       whatsoever nature are used in the Business as of the date hereof but are
       not used exclusively in the Business but rather are also used by a member
       of the Thales Group in connection with any other business ("Shared
       Assets")


                                       44
<PAGE>

      such Shared Assets shall be dealt with in accordance with the provisions
      of Clauses 19.6 and 19.7, or clause 24 (as the case may be).

5.3   Thales covenants that it has the right to transfer or to procure the
      transfer of the legal and beneficial title to the Assets, free from
      Encumbrances and from all other rights exercisable by or claims by third
      parties other than the Cross Patents Licence Agreements and the IPR
      Licence, save only in the case of Contracts where express consent of the
      counterparty to such Contract is required for the transfer of such
      Contract.

5.4   Thales shall procure that the Companies shall sell, free from all
      Encumbrances and in accordance with the covenant contained at Clause 5.3
      above, with effect from Completion the Business as a going concern and the
      Assets to the Purchasers as follows:

      5.4.1 TCSL shall sell and the UK Purchaser shall purchase, the UK
            Business;

      5.4.2 TCSA shall sell and the French Purchaser shall purchase, the French
            Business;

      5.4.3 TCS GmbH shall sell and the German Purchaser shall purchase, the
            German Business;

      5.4.4 TCS Inc shall sell and the US Purchaser shall purchase, the US
            Business;


                                       45
<PAGE>

      5.4.5 Thales Electronics shall sell and Nice shall purchase the Assigned
            IPR and the rights under the Wordnet 3 Licence (subject to certain
            obligations in respect thereof).

5.5   In connection with the transactions contemplated by Clause 5.4 above, on
      or before Completion, the Purchasers shall enter into separate business
      transfer agreements in substantially the forms attached hereto as
      Schedules 15, 16 and 17 (each a "Business Transfer Agreement" and
      collectively the "Business Transfer Agreements") with respect to
      transferring the Business as a going concern and transferring the Assets,
      with only such modifications as are necessary in order to maintain
      substantially the same legal meaning and effect under local law as
      provided in this Agreement.

5.6   The parties acknowledge and agree that in the event of a conflict between
      the terms of this Agreement and the terms of any of the Business Transfer
      Agreements, the terms of this Agreement shall prevail.

6     LIABILITIES TO BE ASSUMED

6.1   The Purchasers shall assume responsibility as from Completion for the
      payment and performance of the Assumed Liabilities in accordance with
      Clause 6.2 and shall pay and discharge the Assumed Liabilities as the same
      fall due for payment and shall indemnify Thales, and the Companies against
      the Assumed Liabilities, and Thales declares itself to be trustee of the
      benefit of this Clause for itself and the Companies.

6.2   It is agreed that the Assumed Liabilities shall be assumed as follows:

      6.2.1 the UK Purchaser shall assume the Assumed Liabilities relating to
            the UK Business;


                                       46
<PAGE>

      6.2.2 the French Purchaser shall assume the Assumed Liabilities relating
            to the French Business;

      6.2.3 the German Purchaser shall assume the Assumed Liabilities relating
            to the German Business;

      6.2.4 the US Purchaser shall assume the Assumed Liabilities relating to
            the US Business; and

      6.2.5 Nice shall assume the Assumed Liabilities relating to the Assigned
            IPR and the Wordnet 3 Licence (subject to the satisfaction of the
            Condition at Clause 2.1.2).

6.3   The Thales Group shall continue to be responsible for the Excluded
      Liabilities and shall promptly discharge all debts, liabilities and
      obligations in connection with the Excluded Liabilities and Thales shall
      indemnify the Purchasers against all Excluded Liabilities. Nothing in this
      Agreement shall make the Purchasers liable for or assume any liability for
      any act, neglect, default or omission in respect of any of the Contracts
      committed by the Thales Group or occurring before Completion or impose any
      obligation on the Purchasers for and in respect of any product delivered
      or service performed by the Thales Group in connection with the Business
      before Completion save in respect of:

      (a)   the obligations in respect of warranty work under clause 17.1;

      (b)   the obligations in respect of the provision of Additional Services
            under clause 17.2; and


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<PAGE>

      (c)   obligations for which a specific provision has been made in the
            Completion Balance Sheet but only to the extent of such provision.

7     PURCHASE PRICE

7.1   The Initial Purchase Price shall be the Initial Cash Consideration and the
      Share Consideration referred to in clauses 7.2.1 and 7.2.2 respectively
      subject to adjustment downwards under Clauses 13 and 7.7 below and subject
      to a further adjustment upwards pursuant to Clause 7.4 or downwards
      pursuant to Clause 7.5.

7.2   The Initial Purchase Price shall comprise and be satisfied as follows:

      7.2.1 Cash consideration of $30,000,000 payable on Completion (the
            "Initial Cash Consideration"); and

      7.2.2 Share consideration of 2,187,500 Nice Shares to be issued on
            Completion to Thales (the "Share Consideration").

7.3   The Purchasers and Thales shall each comply with their respective
      obligations in Schedule 21.

7.4   If the 2002 Sales shall exceed Euro 84,000,000 then Thales shall be
      entitled to a pro rata amount equal to the Sales Earn Out Amount, which
      shall be paid to Thales by Nice on behalf of the Purchasers in accordance
      with Clause 7.6 below.


                                       48
<PAGE>

7.5   If the 2002 Sales shall be less than Euro 75,000,000 then the Purchasers
      shall be entitled to $3,000,000, which amount shall be paid by Thales to
      Nice (on behalf of the Purchasers) in accordance with Clause 7.6 below.

7.6   Any amount payable to either Thales or the Purchasers under Clauses 7.4 or
      7.5 above, as the case may be, shall be paid on the later of (i) the date
      which is within 30 days of the publication by Nice of its audited accounts
      for the financial year ending 31 December 2002 and Nice shall procure the
      publication of such audited accounts no later than 31 March 2003 and (ii)
      10 Business Days following the date upon which the 2002 Sales Statement is
      finally agreed or determined in accordance with Schedule 21. If payment is
      not made by Thales or Nice (as the case may be) on or before the due date
      for payment then interest shall accrue on the amount payable for the
      period from the due date to the date of actual payment at the rate of 2%
      above the base rate of Barclays Bank plc computed on a daily basis until
      and including the date of payment.

7.7   Price adjustment

7.7.1 If A (as defined below in this clause) is less than the Initial Purchase
      Price, then the Initial Purchase Price shall be subject to a downwards
      only adjustment if the value of the Cumulative Orders is lower than Euro
      40 (forty) million, pursuant to the following formula:

      A = $70 (seventy) million * Cumulative Orders
                                  -----------------
                                                 40

      where:

      A is the adjusted value of the Initial Purchase Price.


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<PAGE>

7.7.2 Nice shall procure that the Purchasers' management shall, as promptly as
      practicable and in any event before or at the same time as the delivery of
      the draft Completion Balance Sheet pursuant to clause 13.2, prepare and
      deliver to Thales and to Nice a statement prepared in accordance with the
      provisions of Clause 7.7.6 showing the Cumulative Orders.

7.7.3 Thales and Nice shall then seek to agree the Cumulative Orders figure by
      following the same procedures and time limits as prescribed for agreeing
      the Completion Balance Sheet pursuant to Clauses 13.2 to 13.9.

7.7.4 To the extent the adjusted value of the Initial Purchase Price (determined
      in accordance with clause 7.7.1) is less than the Initial Purchase Price,
      the consideration shall be reduced by such amount and Thales shall pay
      such amount to Nice in accordance with Clause 7.7.5. If the adjusted value
      is greater than the Initial Purchase Price then the consideration shall
      not be subject to any adjustment pursuant to this provision.

7.7.5 Any payment from Thales to Nice pursuant to Clause 7.7.4 shall be made on
      the date of payment of any shortfall pursuant to clause 13.10 of this
      Agreement in relation to the Completion Balance Sheet. If there is no such
      payment required under clause 13.10, then payment under this clause 7.7.5
      shall be made on the fifth Business Day after the date of determination or
      agreement of the Completion Balance Sheet. If payment under this clause is
      not made on or before the fifth Business Day after the date of
      determination or agreement of the Completion Balance Sheet, Thales shall,
      for the period from such date to the date of actual payment, pay to Nice
      in addition to the sum then payable, interest at the rate of 2% above the
      base rate of Barclays Bank plc computed on a daily basis until and
      including the date of payment.

7.7.6 The following shall qualify as Cumulative Orders for the purposes of the
      foregoing provisions of this Clause 7.7:


                                       50
<PAGE>

      (a)   a legally binding purchase order which constitutes an irrevocable,
            unconditional obligation of the party making the order at the price
            stated in the relevant order and such price is not subject to any
            rebate, discount or other deduction and the other terms and
            conditions do not materially differ from the Business' standard
            terms and conditions; or

      (b)   a letter of intent:

            (i)   which incorporates in reasonable detail the description of the
                  products and services to be supplied and specifies the agreed
                  price, such description and price being contained in the body
                  of the letter of intent or by reference to a quotation from
                  which such description and price can be clearly ascertained;

            (ii)  which is not inconsistent with past practice for the
                  acceptance of letters of intent for the purpose of commencing
                  the process for the fulfilment of an order; and

            (iii) is confirmed by a legally binding purchase order (in
                  accordance with part (a) above) within 30 days; or

      (c)   the letter of intent issued to TCS Inc. by iXP Corporation dated 28
            June 2002 provided such letter of intent is confirmed by a legally
            binding purchase order (as described in paragraph (a) above) issued
            on or before 31 August 2002,

      and for the avoidance of doubt no purchase order or letter of intent from
      any connected person shall qualify as a Cumulative Order. For the


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<PAGE>

      purpose of calculating Cumulative Orders the amount of the order shall be
      taken net of tax, duties and excises.

7.8   In addition to the Initial Cash Consideration and the Share Consideration,
      Thales shall be entitled to up to a further $20,000,000 (twenty million US
      dollars) dependent on net sales of Prism to third parties by any member of
      the Purchaser's Group (but, for the avoidance of doubt, excluding
      Cliffstone) for the period from the Completion Date to 31 December 2004,
      in the amounts specified in the table set out in Schedule 21 (the "Earn
      Out Consideration") such amounts being payable in cash no later than 15
      business days after publication by the board of the Purchasers of the
      audited accounts for the relevant period, on the basis that Nice shall
      procure the publication of such audited accounts by no later than the 31st
      March following the end of the relevant year. The revenue recognition
      policies governing the composition of Prism revenue shall be the revenue
      recognition policies of Nice and accordingly US GAAP as determined by
      Nice's external independent auditors.

7.9   Any payment by the Purchasers to Thales under this clause shall constitute
      a good discharge of the Purchasers' obligations under this clause and the
      Purchasers shall not be concerned to see that the monies paid are applied
      in paying Thales and members of the Thales Group in accordance with their
      respective entitlements.

7.10  The Initial Purchase Price and any other adjustments or payments made
      pursuant to Clauses 7.4 to 7.8, shall be apportioned in accordance with
      Schedule 2.

7.11  All payments referred to in this clause shall be made in immediately
      available funds in Dollars without any set-off, restriction or condition
      and without any deduction or withholding (save only as required by law) by
      a


                                       52
<PAGE>

      CHAPS transfer to such account as Nice or Thales shall specify (as the
      case may be).

7.12  For United States federal income tax purposes, the payment payable to TCS,
      Inc. in accordance with the provisions of Clause 7 as such payment may be
      adjusted pursuant to the terms of such Clause, shall be allocated among
      the assets of the US Business in the manner set forth in Schedule 2. US
      Purchaser and Thales on behalf of itself and TCS, Inc. agree to act in
      accordance with such allocation in all tax returns, reports and filings
      and to complete and timely file Form 8594 pursuant to the provisions of
      Section 1060 of the Internal Revenue Code of 1986, as amended and the
      Treasury Regulations promulgated thereunder.

7.13  The parties agree that the allocation of specific amounts to each of the
      Assets, Cliffstone Shares and Cliffstone Note (as set out in Clause 7.10
      above) is not to limit any such amount as is mentioned in Clause 7.12
      above.

7.14  Thales hereby confirms that there is no contractual obligation, or any
      other obligations whatsoever, at the Completion Date on Thales or any of
      the Companies to Cliffstone other than those set out in the provisions of
      the Cliffstone Documents.

8     VAT

8.1   All payments made pursuant to this Agreement shall be exclusive of value
      added tax which shall (where applicable) be payable in addition to the
      payments in question.

8.2   The parties consider that the sale and purchase of the Assets and the
      Business (including the transaction pursuant to the IPR Licence Novation


                                       53
<PAGE>

      Deed) from TCSL to the UK Purchaser falls within the provisions of Article
      5 of the Value Added Tax (Special Provisions) Order 1995. TCSL shall use
      its reasonable endeavours to satisfy HM Customs & Excise that the sale and
      purchase and the foregoing agreements are treated as a transfer of a going
      concern ("TOGC") under that Article and accordingly neither as a supply of
      goods nor a supply of services and the UK Purchaser undertakes to provide
      such reasonable assistance and information to TCSL as may be reasonably
      necessary for that purpose.

8.3   If HM Customs & Excise determine in writing that VAT is payable on all or
      part of the consideration payable for the transfer of the Assets and the
      Business (including the transaction pursuant to the IPR Licence Novation
      Deed), from TCSL to the UK Purchaser pursuant to this Agreement and the
      IPR Licence Novation Deed the UK Purchaser upon receipt from TCSL of a
      copy of such written determination from HM Customs & Excise shall pay the
      amount of any VAT which may properly be chargeable on such sale of the
      Assets and the Business pursuant to this Agreement. If the ruling is
      received and it arises as a consequence of any breach by the UK Purchaser
      of the provisions of the Value Added Tax (Special Provisions) Order 1995,
      the UK Purchaser shall pay the amount of any VAT to TCSL on the later of:

      8.3.1 the date prior to the last Business Day on which TCSL is liable to
            account to HM Customs & Excise for such VAT without incurring a
            potential liability to penalties and interest; and

      8.3.2 the date which is five Business Days after the delivery of a valid
            tax invoice containing the particulars prescribed in Regulation 14
            of the Value Added Tax (General) Regulations 1995 (as amended).


                                       54
<PAGE>

8.4   Where HM Customs & Excise determine that the sale and purchase of the
      Assets and the Business (including the transaction pursuant to the IPR
      Licence Novation Deed) pursuant to this Agreement was not a TOGC as a
      result of a breach of the provisions of the Value Added Tax Act (Special
      Provisions) Order 1995 by TCSL, the UK Purchaser shall pay the amount of
      any VAT to TCSL no later than five working days after the date upon which
      the UK Purchaser has received an equivalent amount by way of recovery of
      input tax from HM Customs & Excise and/or by way of reduction in its
      liability to output tax.

8.5   If, for any reason whatsoever, Nice or any Purchaser omits to take any
      action required of it under the terms of this Agreement to ensure that all
      or part of the transfer of the Business (including the transaction
      pursuant to the IPR Licence Novation Deed) represents the transfer of a
      going concern for the purposes of VATA or if Nice or the UK Purchaser
      takes any action at any time which results in all or part of the transfer
      being subject to VAT, Nice will pay to Thales upon demand the amount of
      any related assessment for penalties and/or interest which may be issued
      by Customs & Excise to TCSL under the provisions of the aforementioned act
      as a consequence of its failure to account for VAT due upon the transfer.

8.6   Thales warrants that:

      8.6.1 neither TCSL nor any relevant associate defined in paragraph 3 of
            Schedule 10 VATA has made an election to waive exemption in relation
            to any of the Business Properties pursuant to the provisions of
            paragraph 2 of Schedule 10 VATA and neither it nor any relevant
            associate has or will make such an election on or before Completion
            other than pursuant to Clause 8.7. If, subsequently, it transpires
            that TCSL or any relevant associate has made an election in relation
            to any of the Business Properties (other than pursuant to Clause
            8.7) pursuant to the provisions of paragraph 2 of Schedule 10


                                       55
<PAGE>

            VATA on or before the earlier of payment of a deposit or Completion,
            and as a consequence VAT becomes chargeable on any of the Business
            Properties (other than the Hedge End Property pursuant to Clause
            8.7), TCSL will deliver a valid tax invoice to the UK Purchaser
            containing the particulars prescribed in Regulation 14 of the Value
            Added Tax Regulations 1995. Upon receipt of the valid tax invoice
            the UK Purchaser shall pay the amount of any VAT to TCSL or any
            relevant associate no later than five working days after the date
            upon which the UK Purchaser has received an equivalent amount by way
            of recovery of input tax from HM Customs & Excise and/or by way of
            reduction in its liability to output tax. TCSL or any relevant
            associate will indemnify the UK Purchaser from any penalties,
            surcharges or interest incurred by the UK Purchaser which arise as a
            result of any amount of VAT that is subsequently determined to be
            chargeable on any of the Business Properties (other than the Hedge
            End Property pursuant to Clause 8.7) or the relevant part thereof;

      8.6.2 recovery of input tax by TCSL in respect of any of the Assets is not
            subject to the provisions contained in Part XIV or XV of the Value
            Added Tax Regulations 1995 (SI 1995/2518); and

      8.6.3 it is registered for VAT as a group registration in which TCSL is
            part under registration number 198955680.

8.7   It is intended that Thales Properties Limited will prior to Completion
      make an election to waive exemption in relation to the Hedge End Property
      and will notify HM Customs & Excise of such election pursuant to
      paragraphs


                                       56
<PAGE>

      2 and 3 of Schedule 10 of VATA and has not and will not revoke such
      election prior to Completion.

8.8   If after the UK Purchaser has paid an amount in respect of VAT pursuant to
      this Agreement, HM Customs & Excise determine that such VAT was not
      actually payable, then:

      8.8.1 TCSL will repay such amount to the UK Purchaser no later than five
            Business Days after the date of receipt of such written
            determination from HM Customs & Excise; or

      8.8.2 if TCSL has already accounted for such amount in respect of VAT at
            the time it receives such determination, TCSL shall reclaim such
            amount from HM Customs & Excise and repay such amount to the UK
            Purchaser on receiving repayment of or obtaining credit in respect
            thereof no later than five Business Days after the date of receipt
            of the repayment or the obtaining of the credit.

8.9   TCSL hereby undertakes to deliver to the UK Purchaser at Completion all
      VAT records relating to the Business referred to in Section 49 VATA 1994.
      The UK Purchaser shall preserve such records for such period as may be
      required by law, and shall allow TCSL on reasonable notice, to inspect and
      take copies thereof.

9     COMPLETION

9.1   Time and Place of Completion

      Completion of the sale and purchase of the Cliffstone Shares, Cliffstone
      Note, the Business and Assets shall take place at the offices of the


                                       57
<PAGE>

      Purchasers' Solicitors on the third Business Day following satisfaction in
      accordance with this Agreement of the last outstanding Condition, as set
      out in Clause 2, or at such other date and place as may be agreed in
      writing between Thales and Nice.

9.2   Thales' Completion Obligations

      At Completion Thales shall deliver or shall procure the delivery to the
      Purchasers (or to the Purchasers' authorised representatives in the
      relevant jurisdiction of the Companies or the Business) of:

      9.2.1 certificates representing the Cliffstone Shares accompanied by all
            instruments necessary to duly transfer all rights, title and
            interest therein to the UK Purchaser, the Cliffstone Note duly
            executed by Thales TRC Inc. in favour of the US Purchaser;

      9.2.2 any waivers, consents, stock powers or other documents which may be
            necessary to enable the UK Purchaser to be registered as the holder
            of the Cliffstone Shares and the US Purchaser to be registered as
            the holder of the Cliffstone Note;

      9.2.3 Cliffstone's consent in regard to the Investor Rights Agreement
            (referred to in the definition of the Cliffstone Documents) being
            obtained in relation to the transfer of Cliffstone Shares and any
            consent required by the Credit Agreement (referred to in the
            Cliffstone Documents) for the transfer of the Credit Agreement;


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<PAGE>

      9.2.4 (a) the IPR Licence Novation Deed duly executed as at Completion by
            TCSL and Thales Electronics; and

            (b)   the IPR Assignment duly executed by Thales Electronics and
                  Thales assigning the Assigned IPR and the rights under the
                  Wordnet 3 Licence (subject to the obligations set out therein)
                  to Nice;

            (c)   an assignment (accompanied by written evidence of Cliffstone's
                  consent to such assignment incorporating the amendment
                  referred to below) or novation from TCSL in favour of Nice of
                  the Reseller Agreement together with either an amendment
                  deleting the non-compete obligation under clause 2.5 (final
                  sentence) of the Reseller Agreement with effect from the date
                  of assignment or novation of the Reseller Agreement to Nice or
                  an irrevocable waiver of such obligation in favour of Nice and
                  all members of the Purchaser's Group but otherwise on the same
                  terms as the existing Reseller Agreement (as disclosed under
                  the Disclosure Letter).

      9.2.5 the Transitional Services Agreement duly executed as at Completion
            by Thales and/or, the relevant Thales Affiliates;

      9.2.6 a certified copy extract of the minutes of the meeting of the board
            of directors of Thales TRC Inc authorising the


                                       59
<PAGE>

              sale of the Cliffstone Shares and the Cliffstone Note, together
              with a certified copy of the certificate of incorporation, by-laws
              and other Charter documents of Thales TRC Inc.;

       9.2.7  a certified copy of the minutes of the meeting of the boards of
              directors of each of the Companies authorising if necessary the
              sale of the Business and Assets in accordance with the terms of
              this Agreement;

       9.2.8  a certified copy extract of the minutes of the board of Thales
              granting to Denis Ranque as Chairman of Thales' Board of Directors
              the power to bind Thales, which shall by reference to French
              corporate law include the authority to enter into this Agreement;

       9.2.9  the Assets which are capable of transfer by delivery with the
              intent that title in such Assets shall pass by such delivery;

       9.2.10 the financial statements more specifically described in Clause
              10.6;

       9.2.11 a letter from Thales to Nice confirming that the Companies have
              complied in all material respects with their obligations under the
              Transfer Regulations qualified only by (i) reference to the
              information provided by Nice to Thales in respect of the post
              Completion steps to be taken by the Purchasers in respect of the
              Business; and (ii) the fact that the parties have agreed that no
              steps towards fulfilment of the obligations of Thales or any of
              the


                                       60
<PAGE>

              Companies under the Transfer Regulations have been initiated prior
              to the date of this Agreement;

       9.2.12 a letter from Thales to Nice confirming that from the date of this
              Agreement to Completion, the Thales Group and the Companies have
              complied with the obligations and covenants set out at clauses
              10.1, 10.2, 10.4 and 10.5 of this Agreement;

       9.2.13 such other documents as may reasonably be required by the
              Purchasers (on reasonable notice and in any event by no later than
              twenty one days prior to Completion) to be produced at Completion
              to complete (subject to obtaining relevant consents) the sale and
              purchase of the Assets and the Business and vest title in such in
              the Purchasers (or as Nice may direct) together with all deeds and
              documents of title relating thereto;

       9.2.14 the duly executed documents to be entered into by Thales and the
              Companies and evidence of satisfaction of the other requirements
              in relation to the sale of the US Business, the French Business
              and the German Business as set out in Schedule 10; and

       9.2.15 the Thales representation letter to PricewaterhouseCoopers in
              relation to the Accounts Combination Statement in the agreed
              terms.

9.3    Nice's Completion Obligations


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<PAGE>

      9.3.1 On satisfaction of the obligations of Thales under Clause 9.2 Nice
            shall pay on behalf of itself and the relevant Purchasers to Thales
            on behalf of the Companies and Thales Electronics the Initial Cash
            Consideration (apportioned in accordance with Schedule 2).

      9.3.2 On Completion, payment by the Purchasers to Thales Electronics of
            the Initial Cash Consideration in accordance with Clause 9.3.1 shall
            be made to the following account:

            Bank: Barclays Bank plc

            Sort Code: GB 20-00-00

            Account name: Thales Electronics Plc

            Account No: 00732095

            Swift: BARCGB22

            the receipt of which by Thales shall be a good discharge to the
            Purchasers.

      9.3.3 On Completion, following satisfaction of the obligations of Thales
            under clause 9.2, the Purchasers shall deliver to Thales the Share
            Consideration as follows:

            (a)   certificates representing the Nice Shares comprised in the
                  Share Consideration, duly executed for issuance to Thales or
                  as Thales shall direct, subject to restrictions on transfer
                  consistent with this Agreement and applicable securities laws
                  and marked with legends regarding such restrictions; and

            (b)   any waivers, consents or other documents


                                       62
<PAGE>

                  which may be necessary to enable Thales to be registered as
                  the holder of the Nice Shares comprised in the Share
                  Consideration.

      9.3.4 On Completion, following satisfaction of the obligations of Thales
            under clause 9.2, the Purchasers shall deliver to Thales certified
            copies of resolutions of the board of directors of each of the
            Purchasers approving the contents of this Agreement and the
            documents referred to in it and authorising the entry into it and of
            the other documents referred to in it in accordance with the terms
            of this Agreement.

      9.3.5 On Completion, following satisfaction of the obligations of Thales
            under clause 9.2, Nice shall procure that two persons nominated by
            Thales are appointed to the board of directors of Nice in accordance
            with paragraph 3 of Schedule 11.

      9.3.6 On Completion Nice shall deliver to Thales a letter from Nice to
            Thales confirming that from the date of this Agreement to
            Completion, Nice and the Purchasers have complied with the
            obligations and covenants set out at clauses 10.5 and 10.7 of this
            Agreement.

      9.3.7 On Completion Nice shall deliver to Thales the duly executed
            documents to be entered into by the Purchasers in relation to the
            purchase of the US Business, the French Business and the German
            Business.

9.4   Interdependence of Obligations


                                       63
<PAGE>

      9.4.1 The obligations of the parties in relation to Completion are
            interdependent so that neither Thales nor the Purchasers shall be
            obliged to proceed to complete if any of the obligations of the
            other party set out in this Clause 9 are not satisfied and completed
            simultaneously.

      9.4.2 All actions at Completion take place simultaneously and no delivery
            or payment is to be taken to have been made until all deliveries and
            payments have been made.

9.5   Default in Completion

      If without the written agreement of Nice and Thales Completion is not
      effected by either of them, whether pursuant to Clause 9.4 or otherwise,
      the following provisions shall apply:

      9.5.1 either Thales or Nice may at any time thereafter serve on the other
            of them notice in writing (a "Completion Notice") to effect
            Completion within 10 Business Days, but notice shall be effective
            only if the party serving it is at the time of the service either in
            all respects ready, able and willing to proceed to effect Completion
            in accordance with the notice or is not so ready, able and willing
            to effect Completion only by reason of the default or omission of
            the other party;

      9.5.2 Upon service of a Completion Notice, the party on which the notice
            is served shall effect Completion (or procure that Completion is
            effected) within 10 Business Days after the date of service of the
            notice (excluding the day of notice) and in respect of that time
            shall be of the essence;


                                       64
<PAGE>

      9.5.3 If the party on which the Completion Notice is served does not
            comply with the terms of a Completion Notice, then the party which
            has served the Completion Notice without prejudice to any of its
            rights or remedies available under this Agreement or at law or in
            equity, may:

            (a)   institute proceedings for specific performance; or

            (b)   rescind this Agreement and institute proceedings for damages;

      9.5.4 the party serving a Completion Notice may at the request or with the
            written consent of the other party (but shall not be required to)
            extend the term of the notice for one or more specifically stated
            periods of time and the term of the Completion Notice shall then be
            deemed to expire on the last day of the extended period or periods
            and it shall operate as though this Clause stipulated such extended
            period(s) of notice in lieu of the period otherwise applicable, and
            time shall be of the essence of this Agreement accordingly. An
            extension may be given either before or after the expiry of the
            period of the notice; and

      9.5.5 nothing in this Clause shall preclude a party from suing for
            specific performance without giving a Completion Notice.

9.6   If Completion does not take place on or before the date fixed for
      Completion in accordance with Clause 9.1 (the "Original Completion Date")
      due to


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<PAGE>

      default by the Purchasers, the Purchasers shall, for the period from the
      Original Completion Date to the date of the actual payment, pay to Thales
      in addition to the sum then payable on account of the Initial Purchase
      Price, interest at the rate of 2% above the base rate of Barclays Bank plc
      on the unpaid balance of the sum then payable on account of the Initial
      Purchase Price computed on a daily basis from and including the Original
      Completion Date until and including the date of payment.

10    CONDUCT OF THE BUSINESS PRIOR TO COMPLETION

10.1  Pending Completion Thales shall procure that the Thales Group shall only
      carry on the Business in the usual and ordinary course consistent with
      prior practice so as to maintain the same as a going concern (using all
      reasonable endeavours to protect and preserve the Business, the Assets,
      customer and supplier relations, employee relations, and organisation),
      and shall not make (or agree to make) any payment other than routine
      payments in the ordinary and usual course of trading and shall ensure that
      without the written consent of Nice (such consent not to be unreasonably
      withheld or delayed taking into account the best commercial interests of
      the Business as carried on at the date of this Agreement) and except as
      expressly provided for in this Agreement:

      10.1.1 there will be no material change, other than changes in the
             ordinary day-to-day course of business consistent with prior
             practice, in the assets or liabilities of the Business;

      10.1.2 there will be no discontinuation or cessation of, or disposition
             or other dealing with, any material part of the Business and/or
             Assets;


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<PAGE>

        10.1.3  the Companies will not make any expenditure of a capital nature:

                (a)     on any single item over (pound)10,000; or

                (b)     in aggregate over (pound)50,000.

        10.1.4  there will be no creation, grant or issue or agreement to
                create, grant or issue any Encumbrance (other than liens arising
                by operation of law) over any of the Assets;

        10.1.5  no contracts will be entered into which are abnormal or
                unusually onerous in any material respect;

        10.1.6  no contracts will be entered into the term of which extends more
                than 12 months beyond the Completion Date;

        10.1.7  no contracts will be entered into which have a value (measured
                by cost or revenue) which could exceed(pound)100,000;

        10.1.8  there will be no agreement to terminate or materially vary any
                contract having an outstanding value in excess of (pound)50,000
                and no agreement to terminate or vary any other contract other
                than in the ordinary course of business;

        10.1.9  no change will be made to the terms and conditions of employment
                of the Employees which is material in aggregate and no material
                change will be made to the terms and conditions of employment of
                an individual Key Employee;


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        10.1.10 no new employee whose basic salary would exceed (pound)30,000
                per annum will be employed and no Employee whose basic salary
                exceeds (pound)30,000 per annum will be dismissed;

        10.1.11 there will be no acquisition or disposal of any interest in any
                real property or grant of any lease agreement, tenancy or
                licence or third party right or other dealing in respect of any
                of the Business Properties;

        10.1.12 no material change will be made in the practices of ordering
                supplies and raw materials, shipping finished goods, invoicing
                customers and collecting debts to those adopted in relation to
                the Business prior to execution of this Agreement;

        10.1.13 no change will be made to the Instem Contracts;

        10.1.14 no licence, sub-licence, assignment or other agreement in
                respect of or affecting any of the Business IPR will be entered
                into save for licences and/or sub-licences of Business IPR
                entered into in the ordinary course of the Business;

        10.1.15 no new contracts will be entered into in respect of Intellectual
                Property Rights which would be material to the Business;


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        10.1.16 save for debt recovery actions which are instituted in
                accordance with and carried out in a manner consistent with the
                previous practice of the Companies in connection with the
                Business, no litigation or arbitration in relation to the
                Business or Assets will be instituted; and

        10.1.17 no agreement, conditional or otherwise, to do any of the
                foregoing shall be made.

10.2    Thales undertakes that it shall not enter into any negotiations or
        discussions either directly or indirectly relating to the sale of the
        Companies or the Business or any part thereof pending Completion or
        provide any information relating to the Companies or the Business to any
        third party for the purpose of enabling any party other than the
        Purchasers to assess a potential acquisition of the Companies or the
        Business or any part thereof.

10.3    In order to facilitate observance of the provisions of this Clause 10
        the Purchasers nominate Koby Huberman (telephone number: 972 9775 3522)
        (facsimile number 972 9775 3520) as the point of contact for the
        Companies for the period pending Completion. All matters requiring the
        consent of Nice pursuant to this Clause 10 shall be addressed to
        Koby.Huberman@nice.com, cc: Meni.gal@nice.com. For the avoidance of
        doubt, Thales shall not be liable to the Purchasers under this Agreement
        or otherwise, either for any action taken with the prior written
        approval of Nice or for any action taken in the absence of a written
        consent or written refusal of consent, provided such action is taken:

        (a)     more than 24 hours following a request for consent to the
                relevant action has been submitted to Koby Huberman and no
                written objection or refusal to consent has been received by
                Thales when the matter is both urgent in nature (other than as


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<PAGE>

                a result of delay on the part of Thales or the Companies) and
                indicated as such on the relevant request for consent; or

        (b)     in any other case, more than five Business Days following a
                request for consent to the relevant action has been submitted to
                Koby Huberman and no written objection or refusal to consent has
                been received by Thales.

10.4    Between the date of this Agreement and Completion Thales shall and shall
        procure that the Companies shall:

        10.4.1  supply to the Purchasers all such information and documents in
                relation to the Business as the Purchasers or their
                representatives may from time to time reasonably request; and

        10.4.2  maintain all insurance coverage in effect as disclosed to the
                Purchasers; and

        10.4.3  as soon as reasonably practicable give written notice to Nice of
                the occurrence of any event which results or may result in any
                of the Warranties being or becoming incorrect,

        provided that nothing in this Clause 10 shall require Thales or the
        Companies to disclose to Nice or any Purchaser information relating to
        bids, tenders and/or proposals on which it is reasonably expected that
        Nice or any Nice Affiliate may have an interest in a competitive bid,
        tender or proposal.


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10.5  As from the date of this Agreement, Thales will give to nominated and
      agreed representatives of the Purchasers such access to the Business
      Properties and the Key Employees and to any other premises from which the
      Business is carried on, managed or administered as the Purchasers may
      reasonably request on reasonable notice and during normal business hours
      and such information and assistance as may be necessary to enable the
      Purchasers to monitor the Business, PROVIDED ALWAYS THAT the Purchasers
      shall not communicate with employees (other than the Key Employees),
      customers of or suppliers to the Business without the prior written
      consent (such consent not to be unreasonably withheld) of Thales. Requests
      made by Nice pursuant to this clause shall be addressed to Jim Park
      (telephone: 08707 224000) (email: jim.park@thales-cs.com) whose consent
      shall be taken to be the consent of Thales for the purpose of this Clause.

10.6  Between the date of this Agreement and Completion, Thales, at its own
      expense, shall provide Nice with the audited Carved-Out Accounts (prepared
      in accordance with US GAAP), audited and unaudited financial statements
      relating to the Business consisting of (a) an audited statement of assets
      acquired and liabilities assumed as of December 31, 2001 and 2000 and
      audited statements of operations and changes in cash flow for each of the
      two years ended December 31, 2001, and (b) unaudited statements of assets
      acquired and liabilities assumed as of June 30, 2002 and June 30, 2001,
      and unaudited statements of operations and changes in cash flow for the
      six months ended June 30, 2002 and 2001, in such form as may be required
      by Rule 3-05 or Article 11 of Regulation S-X promulgated under the United
      States federal securities laws, in connection with the preparation and
      filing of any registration statement or periodic report by Nice, including
      reports with respect to the two fiscal years of the Business ended
      December 31, 2001 of independent public accountants, and following the
      Date of Completion Thales shall, at its own expense cause its auditors to
      furnish, upon request by Nice, (a) any accountants' consents required to
      effect one or more SEC filings of such statements within the three year
      period following Completion, and (b) any "comfort letter", in form and
      substance consistent


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      with those generally provided by US auditing firms, reasonably requested
      by an underwriter of Nice securities in connection with a public offering
      or Rule 144A offering of Nice securities being effected within the three
      year period following Completion.

10.7  Between the date of this Agreement and the first to occur of (i)
      Completion, or (ii) 30 November 2002, Nice shall not:

      (a)   complete any registered public offering of its Ordinary Shares or
            ADRs in the US or Israeli public securities markets; or

      (b)   issue any of its Ordinary Shares or ADRs (or securities convertible
            into or exercisable for its Ordinary Shares or ADRs) in an
            unregistered private placement for cash in which the net proceeds to
            Nice from the sale of such securities exceed $1,000,000 and in which
            the purchasers of the securities obtain (through US SEC registration
            or otherwise) securities which are freely transferable under the US
            or Israeli securities laws within less than 12 months of Completion
            (excluding any financing or business transactions, such as debt
            financings or commercial arrangements, in which the issuance of such
            securities for cash is not the primary purpose of the transaction).

10.8  Thales shall, at its own expense, procure that all Intellectual Property
      Rights owned by TCS GmbH and TCSA are assigned to TCSL between the date of
      this Agreement and Completion but in any event prior to the date on which
      the Thales IPR Assignment is entered into.

10.9  Nice undertakes to Thales to put in place, with effect from Completion, an
      incentive program for the Key Employees to incentivise the maximisation of
      2002 Sales (the "Program"). The Program shall provide staged and


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      increasing incentives for the achievement of minimum 2002 Sales of
      EUR75,000,000 and 2002 Sales reflecting the 2002 Sales ranges set out at
      paragraph 3 of Schedule 21. It is agreed that the Program will limit the
      incentives available to double the commissions to which the Key Employees
      are currently entitled and that the Program should make it clear that no
      commissions shall be paid on sales which are outside the current ordinary
      course of the Business in terms of discounting of pricing and terms of
      orders and contracts. Nice shall only pay commissions relating to revenue
      included in the 2002 Sales Statement in respect of the period from
      Completion to 31 December 2002. Details of such program shall be
      communicated for approval to Thales by Nice within two (2) weeks from the
      signature of this Agreement.

11    INDEMNITIES

11.1  Thales shall indemnify and keep indemnified and hold harmless the
      Purchasers (and, to the extent relevant, any other member of the
      Purchasers' Group) on demand in respect of (a) damages awarded by way of
      final judgment; (b) compensation paid on final settlement; (c) reasonable
      legal costs and expenses; (d) reasonable sums paid to third parties in
      order to obtain a licence to avoid infringement; (e) reasonable sums
      incurred in respect of, and other reasonable costs of, development work to
      avoid infringement; and (f) any other reasonable costs incurred to
      mitigate the effect of the infringement suffered or incurred by the
      Purchasers (or any other member of the Purchasers' Group) arising from or
      in connection with any claim that the Prism Product and any variation or
      modification or subsequent version thereof save as set out below or its
      supply, production, sale, licensing, distribution or use infringes any
      third party Intellectual Property Rights, save as follows:

      (a)   to the extent that such infringement results from a modification or
            variation or subsequent version of the Prism Product from the form
            it was in at Completion or from any use or combination of the Prism
            Product with


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<PAGE>

            any other item of hardware, software or other item with which it was
            not used or combined at the date of Completion and where no finding
            of infringement would have occurred were it not for such
            modification, variation, subsequent version, use or combination; or

      (b)   to the extent that any sums claimed are increased as a result of a
            modification or variation or subsequent version of the Prism Product
            from the form it was in at Completion or from any use or combination
            of the Prism Product with any other item of hardware, software or
            other item with which it was not used or combined at the date of
            Completion; or

      (c)   to the extent that the infringement arises from a claim brought
            against the Purchasers (or any other member of the Purchasers'
            Group) by Cliffstone in relation to a breach or termination of the
            Reseller Agreement by the Purchasers (or any member of the
            Purchasers' Group) such breach occurring after Completion; and

      (d)   provided always that Nice (or any member of the Purchasers' Group)
            has used all reasonable commercial endeavours to procure that
            Cliffstone procures the right for Nice (or such other member of the
            Purchasers' Group) to continue to market the Prism Product or modify
            it so that it becomes non-infringing (as set out in the Reseller
            Agreement).

11.2  Thales shall indemnify and keep indemnified and hold harmless the
      Purchasers (and, to the extent relevant, any other member of the
      Purchasers' Group) on demand in respect of (a) damages awarded by way of
      final judgment; (b) compensation paid on final settlement; (c) reasonable
      legal costs and expenses; (d) reasonable sums paid to third parties in
      order to obtain a licence to avoid infringement; (e) reasonable sums
      incurred in respect of, and other reasonable costs of, development work to
      avoid


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        infringement; and (f) any other reasonable costs incurred to mitigate
        the effect of the infringement suffered or incurred by the Purchasers
        (or any other member of the Purchasers' Group) arising from or in
        connection with:

        11.2.1  any claim that any of the products or systems developed by or
                for the Companies or used exclusively in the Business which
                embody the use of the Business IPR and which are used in or
                offered for sale or licensed by the Business at Completion (and
                any variation, modification or subsequent version thereof save
                as set out below) or their supply, production, sale, licensing,
                distribution or use infringe any third party Intellectual
                Property Rights; or

        11.2.2  any breach of Warranty 8.1 as it relates to ownership of
                Business IPR save as follows:

                (a)     to the extent such infringement results from a
                        modification or variation or subsequent version of the
                        products or system from the form they were in at
                        Completion or from any use or combination of them with
                        any other item of hardware, software or other item with
                        which they were not used or combined at the date of
                        Completion and where no finding of infringement would
                        have occurred were it not for such modification,
                        variation, subsequent version, use or combination; or

                (b)     to the extent that any sums claimed are increased as a
                        result of a modification or variation or subsequent
                        version of the


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                  productsor systems from the form they were in at Completion or
                  from any use or combination of them with any other item of
                  hardware, software or other item with which they were not used
                  or combined at the date of Completion; or

            (c)   to the extent that the infringement arises as a result of the
                  fact that, as a result of the act or omission of the Purchaser
                  (or any other member of the Purchasers' Group), the Purchaser
                  (or any other member of the Purchasers' Group) no longer has,
                  after Completion, the benefit of any Intellectual Property
                  Rights which were licensed for use in the Business at
                  Completion, save where Thales or any member of the Thales
                  Group is in breach of Warranties 8.2, 8.3 or 8.6.

11.3  To the extent that the Purchasers fail to recover any losses, liabilities,
      claims, demands, damages, costs and expenses (including legal expenses)
      from Origin Data Realisation Limited ("Origin"), Thales shall indemnify
      and keep indemnified and hold harmless the Purchasers (and, to the extent
      relevant, any other member of the Purchasers' Group) on demand in respect
      of (a) damages awarded by way of final judgment; (b) compensation paid on
      final settlement; (c) reasonable legal costs and expenses; (d) reasonable
      sums paid to third parties in order to obtain a licence to avoid
      infringement; (e) reasonable sums incurred in respect of, and other
      reasonable costs of, development work to avoid infringement; and (f) any
      other reasonable costs incurred to mitigate the effect of the infringement
      suffered or incurred by the Purchasers (or any other member of the
      Purchasers' Group) arising from or in connection with any claim that the
      "Wordnet 3" product developed under the Wordnet 3 Licence (in the current
      version existing at the date of


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<PAGE>

      Completion and any variation or modification or subsequent version thereof
      save as set out below) or its supply, production, sale, licensing,
      distribution or use, infringes any third party Intellectual Property
      Rights save as follows:

      (a)   to the extent that such infringement results from a modification or
            variation or subsequent version of the Wordnet 3 product from the
            form it was in at Completion or from any use or combination of the
            Wordnet 3 product with any other item of hardware, software or other
            item with which it was not used or combined at the date of
            Completion and would not have occurred were it not for such
            modification, variation, subsequent version, use or combination; or

      (b)   to the extent that any sums claimed are increased as a result of a
            modification or variation or subsequent version of the Wordnet 3
            product from the form it was in at Completion or from any use or
            combination of the Wordnet 3 product with any other item of
            hardware, software or other item with which it was not used or
            combined at the date of Completion; or

      (c)   to the extent that the infringement arises from a claim brought
            against the Purchasers (or any member of the Purchasers' Group) by
            Origin in relation to a breach or termination of the Wordnet 3
            Licence; and

      (d)   provided always that Nice (or any other member of the Purchasers'
            Group) has exhausted all contractual remedies which it has against
            Origin under the terms of the Wordnet 3 Licence.

11.4  In respect of any claim that the Third Party Licensed IPR, in whole or in
      part or in any combination, or any products, technology or processes which
      utilise any of the Third Party Licensed IPR, infringe any third party
      Intellectual Property Rights, to the extent that Thales currently has the
      benefit of any indemnity, warranties or other equivalent protection from a
      licensor under


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      any third party agreement relating to any Third Party Licensed IPR, Thales
      subject as provided below shall indemnify and keep indemnified and hold
      harmless the Purchasers (and, to the extent relevant, any other member of
      the Purchasers' Group) on demand in respect of any losses, liabilities,
      claims, demands, damages, costs and expenses (including legal expenses)
      ("Loss") arising from or in connection with such claims. The indemnity
      given by Thales under this clause 11.4 shall only apply:

      (a)   where the third party agreement falls to be assigned or novated in
            favour of the Purchaser (or any other member of the Purchasers'
            Group) and such assignment or novation has not been perfected but
            notwithstanding the foregoing the Purchaser (or any other member of
            the Purchasers' Group) is entitled to exercise rights under such
            third party agreement;

      (b)   to the extent that Thales is able to recover such Loss from the
            licensor under the terms of its agreement with the licensor; and

      (c)   until such time as the benefit of such indemnity, warranties or
            other equivalent protection has passed to the Purchasers (or any
            other member of the Purchasers' Group) under this Agreement,

      Thales shall only be obliged to pay such money to the Purchasers (or any
      other member of the Purchasers' Group) under this Clause as and when it
      receives money from the licensor. The Purchasers shall have the right to
      conduct proceedings in respect of any such claim in the name of Thales,
      subject to the Purchasers giving Thales an indemnity as to costs in
      connection with such claim conducted by the Purchasers.


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11.5  Thales agrees to indemnify and keep indemnified and hold harmless Nice,
      the Purchasers or any member of the Purchaser's Group in respect of any
      losses, liabilities, claims, demands, damages, costs and expenses
      (including legal expenses) reasonably incurred arising from, or in
      connection with, any sums claimed by SMRC (formerly Maroc-Aviation) of
      Morocco ("SMRC") from TCSL in respect of any acts or omissions of TCSL in
      respect of the contract between TCSL, SMRC and the Moroccan Ministry of
      Transport for the supply of Wordnet with radar.

11.6  Thales shall indemnify and keep indemnified and hold harmless the
      Purchasers (and, to the extent relevant, any other member of the
      Purchaser's Group) on demand in respect of any losses, liabilities,
      claims, demands, damages, costs and expenses (including legal expenses)
      reasonably incurred arising from or in connection with any claim by
      Natural MicroSystems Europe S.A, Natural MicroSystems Corporation ("NMS")
      against the Purchasers arising from or related to any claim by NMS
      covering the subject matter of those claims of NMS detailed in the
      Disclosure Letter and relating to the Professional Services Agreement
      dated 23 June 2000 for the development of DETs board and its associated
      software and the Professional Services Agreement dated 8 March 2001.

11.7  Thales shall indemnify and keep indemnified and hold harmless the
      Purchasers (and, to the extent relevant, any other member of the
      Purchasers' group) on demand in respect of:

      (a)   any Taxation, losses, liabilities, claims, demands, damages, costs
            and expenses (including legal expenses) arising from or in
            connection with any breach of Warranty 17.17 (compliance with
            applicable Taxation laws and regulations); and

      (b)   any Taxation in respect of the Business, the Assets or the Employees
            arising in respect of:

            (i)   periods ending on or before Completion;


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            (ii)  transactions effected or deemed to have been effected on or
                  before Completion;

            (iii) income, profits or gains earned, accrued or received on or
                  before Completion; or

            (iii) payments made on or before Completion together with any costs
                  and expenses (including legal expenses) incurred in enforcing
                  the indemnity contained in this clause 11.7.

12    RELEASE OF GUARANTEES

      The Purchasers shall promptly after Completion and with effect from
      Completion, procure the release of Thales, or any Affiliates of Thales (as
      the case may be), from all of its or their respective obligations, duties
      and liabilities whatsoever in respect of the Guarantees where the
      liability guaranteed is an Assumed Liability and pending such release Nice
      hereby undertakes that it will indemnify Thales and/or any relevant
      Affiliate of Thales and keep it (or them) indemnified against all damages,
      costs, expenses or other liabilities suffered or incurred by it (or them)
      in relation to any of the Guarantees where the liability guaranteed is an
      Assumed Liability.

13    COMPLETION BALANCE SHEET

13.1  On the Completion Date or at such earlier time as agreed between Nice and
      Thales, Thales or its representatives will pull and assemble the Inventory
      for counting. Nice and/or its representatives will conduct a comprehensive
      physical stock take of the Inventory and Thales and/or its representatives
      will sign off on each count made by Nice. Nice shall produce a report
      setting out the counted number of each Inventory item. Such report will
      also set out the aggregate value of the Inventory which shall be included
      in the Completion Balance Sheet prepared by the Purchasers' management and
      audited by the


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<PAGE>

      Auditors pursuant to clause 13.2 below. If Thales and Nice are unable to
      agree upon the physical stock take within 10 Business Days of Completion,
      the matter shall be submitted for adjudication by the Independent
      Accountants.

13.2  Subject to determination of the stock take pursuant to Clause 13.1, Nice
      shall procure that the Purchasers' management shall, as promptly as
      practicable, and in any event within 60 (sixty) days following the
      determination of the physical stock take ("the First Period"), prepare and
      deliver to Thales and to Nice a draft of the Completion Balance Sheet
      together with a draft certificate (the "Auditors' Certificate") in the
      form set out in Part E of Schedule 9 addressed to Thales and to Nice
      stating that the Completion Balance Sheet (from which the NAV Statement
      shall be determined) has been prepared in accordance with this Agreement.

13.3  Thales and Nice shall attempt to agree the draft Completion Balance Sheet
      as soon as possible and in any event within 30 (thirty) days (hereinafter
      the "Second Period") after receipt of the same under Clause 13.2.

13.4  During the Second Period, Thales' accountants shall be entitled to call
      for and inspect such documents as they shall reasonably consider
      necessary.

13.5  Unless within the Second Period Thales notifies Nice in writing (setting
      out the adjustments, if any, which it proposes should be made to the draft
      Completion Balance Sheet) the draft Completion Balance Sheet shall be
      deemed to be agreed and shall, save in the event of fraud or manifest
      error, become final and binding on Thales and Nice for the purposes of
      this Agreement.

13.6  If by the end of the Second Period the draft Completion Balance Sheet has
      not been agreed, Thales shall meet with Nice so as to resolve in good
      faith


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      any differences within the following 7 (seven) days (the "7 Day Period").
      After the expiry of the 7 Day Period either Nice or Thales may refer the
      matters in dispute to the Independent Accountants. The Independent
      Accountants shall agree, amend or prepare the Completion Balance Sheet and
      determine the Net Asset Value but always in accordance with the Accounting
      Principles insofar as not otherwise agreed in accordance with the
      provisions of this Clause 13. The Independent Accountants shall be
      entitled to call for and inspect such documents as they shall reasonably
      consider necessary. The determination prepared by the Independent
      Accountants shall be delivered to Thales and Nice within 30 days of such
      submission to the Independent Accountants and shall (save in respect of
      manifest error) be final and binding on Thales and Nice for the purposes
      of this Agreement and the Independent Accountants shall act as experts and
      not as arbitrators. In acting under this clause 13.6, the Independent
      Accountants shall be entitled to the privileges and immunities of
      arbitrators. Thales and Nice shall act in good faith towards each other
      regarding such application and in particular shall endeavour with
      reasonable expedition to settle the terms of reference of the Independent
      Accountants.

13.7  Thales shall pay the charges of Thales' Accountants and Nice shall pay the
      charges of the Auditors in respect of work carried out pursuant to the
      provisions of this Clause and the charges of the Independent Accountants
      (if appointed) shall be apportioned between Thales and Nice in such
      proportions as the Independent Accountants may determine in the light of
      the merits of the objections taken by (or on behalf of) Thales to the
      physical stock take pursuant to Clause 13.1 or to the Completion Balance
      Sheet in the form despatched pursuant to Clause 13.2 as the case may be.

13.8  Thales and Nice shall respectively procure, so far as they are able, that
      the Companies, the Purchasers, the Auditors and Thales' Accountants
      respectively shall give each other and to the Independent Accountants
      access to all of their working papers or other information used as a basis
      for preparing the Completion Balance Sheet and access to personnel as may


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      reasonably be required for the purposes of considering and agreeing the
      Completion Balance Sheet.

13.9  Upon the Completion Balance Sheet having become final and binding pursuant
      to this Clause 13 (save in respect of fraud or manifest error), Nice shall
      procure that the Auditors' Certificate is finalised and signed and no
      right of appeal shall be competent with regard thereto, and neither Thales
      nor Nice nor the Independent Accountants shall be entitled to appeal or
      state a case either on a point of law or fact with regard thereto, to any
      court.

13.10 If the Completion Net Asset Value is less than the NAV Target, the amount
      of the consideration shall be reduced by an amount equal to the shortfall
      and Thales shall pay to Nice the amount of any shortfall. If the
      Completion Net Asset Value is more than the NAV Target then the
      consideration will not be subject to any adjustment. Any such payment
      shall be made on or before the fifth Business Day after the date of
      determination or agreement of the Completion Balance Sheet and shall be
      made without set-off, counterclaim, withholding or other deduction (save
      as required by law). If such payment is not made on or before the fifth
      Business Day after the date of determination or agreement of the
      Completion Balance Sheet, Thales shall, for the period from such date to
      the date of actual payment, pay to Nice in addition to the sum then
      payable, interest at the rate of 2% above the base rate of Barclays Bank
      plc computed on a daily basis until and including the date of payment.
      Payment shall be made in US Dollars.

13.11 Nice will prepare and submit to Thales and/or its representative not later
      than sixty (60) days from Completion, drafts (in substantially complete
      form so far as it is able based on the Records) of the Companies'
      Statutory Accounts and tax returns for the period from 1 January 2002 up
      to the Completion Date (the "Draft Documents"). Nice will co-operate with
      Thales and/or its auditors in respect to the audit of the Companies'
      Statutory Accounts and tax return and shall provide appropriate assistance
      and access to the accounting


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        records comprised in the Records acquired by the UK Purchaser under this
        Agreement. Thales shall be responsible for the finalisation of the Draft
        Documentation and the submission of final documents to the relevant
        authorities.

13.12   In the event of manifest error in the preparation of the Accounts
        Combination Statement, the NAV Target shall be adjusted to the extent of
        such manifest error for the purposes of this Agreement.

14      EMPLOYMENT

14.1    UK Employment Matters

        14.1.1  Thales and the Purchasers acknowledge that:

                (a)     the transfer of the UK Business pursuant to this
                        Agreement constitutes a relevant transfer of the whole
                        of the undertaking of the UK Business for the purposes
                        of the Transfer Regulations; and

                (b)     the UK Employees shall be transferred to the UK
                        Purchaser on the Completion Date subject to the right of
                        any of the UK Employees to object to their transfer
                        pursuant to the Transfer Regulations.

        14.1.2  Thales shall be liable for, and shall indemnify and keep
                indemnified the Purchasers in respect of all and any claims,
                proceedings, demands, awards, losses, damages, costs,
                liabilities, interest or expenses (including


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                reasonable legal expenses) (the "Employment Liabilities") which
                may be suffered or incurred by the Purchasers in connection with
                the employment or dismissal of any person who is not an
                Employee.

        14.1.3  Thales shall procure the performance and discharge of all
                contractual, statutory and other obligations in respect of all
                of the UK Employees up to Completion and Thales shall indemnify
                the Purchasers against any Employment Liabilities arising from
                any act or omission of Thales and the Companies or failure by
                Thales and the Companies to discharge any obligation relating to
                any of the UK Employees prior to Completion (excluding any
                liability covered by the indemnity under Clause 14.1.5).

        14.1.4  The Purchasers shall procure the performance and discharge of
                all contractual and statutory and other obligations in respect
                of all of the UK Employees after Completion and the Purchasers
                shall indemnify Thales against any Employment Liabilities
                arising from any act or omission of the Purchasers or the
                failure of the Purchasers to discharge any obligation relating
                to any of the UK Employees after Completion.

        14.1.5  Thales agrees to indemnify the Purchasers against any Employment
                Liabilities it may incur if any UK Employee or his or her
                employee representative brings a claim arising from a failure by
                Thales and its Affiliates to carry out their duty to inform and
                consult under Regulation 10 of the Transfer Regulations provided
                that such indemnity shall not apply to the extent that such
                failure arises from the failure of the Purchasers to provide
                Thales with any


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                necessary information concerning any measures (within the
                meaning of Regulation 10 of the Transfer Regulations) that the
                Purchaser intends to take in relation to any UK Employee, and
                provided further that such indemnity shall only apply in respect
                of 50% of any such Employment Liabilities to the extent that
                such failure arises from either:

                (i)     the failure of Thales and/or any Thales affiliate to
                        commence compliance with the duty to inform and consult
                        under Regulation 10 of the Transfer Regulations prior to
                        the date of this Agreement; or

                (ii)    the fact that Thales and/or any Thales Affiliate only
                        commences compliance with the duty to inform and consult
                        under Regulation 10 of the Transfer Regulations after
                        the date of this Agreement.

        14.1.6  Nice agrees to indemnify Thales against any Employment
                Liabilities if and to the extent that the same arise from the
                failure of the Purchasers to provide Thales with any necessary
                information concerning any measures (within the meaning of
                Regulation 10 of the Transfer Regulations) that the Purchaser
                intends to take in relation to any UK Employee, and Nice agrees
                to indemnify Thales against 50% of any Employment Liabilities if
                and to the extent that the same arise from either:

                (i)     the failure of Thales and/or any Thales affiliate to
                        commence compliance with the duty to inform and consult
                        under Regulation 10 of the Transfer


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                        Regulations prior to the date of this Agreement; or

                (ii)    the fact that Thales and/or any Thales Affiliate only
                        commences compliance with the duty to inform and consult
                        under Regulation 10 of the Transfer Regulations after
                        the date of this Agreement.

14.2    Non-UK Employment Matters

        14.2.1  Thales and the Purchasers acknowledge that:

                (a)     the transfer of the Non-UK Business pursuant to this
                        Agreement constitutes a transfer of an undertaking or
                        business of the Non-UK Business for the purposes of
                        European Council Directives 77/187/EEC and 2001/23/EC to
                        the extent that they have been or are to be implemented
                        by legislation in the European countries in which the
                        Non-UK Business operates ("European Transfer
                        Legislation"); and

                (b)     the Non-UK Employees shall be transferred to the
                        Purchasers on Completion subject to the right of any of
                        the Non-UK Employees to object to their transfer
                        pursuant to the European Transfer Legislation or other
                        relevant legislation in the country in which the Non-UK
                        business operates.


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        14.2.2  Thales shall be liable for and shall indemnify and keep
                indemnified the Purchasers in respect of, all and any claims,
                proceedings, demands, awards, losses, damages, costs,
                liabilities, interest or expenses (including reasonable legal
                expenses) (the "Employment Liabilities") which may be suffered
                or incurred by the Purchasers in connection with the employment
                or dismissal of any person who is not an Employee.

        14.2.3  The Purchasers shall offer employment on the basis of employment
                at will to all US Employees (the "Employment Offers"). The
                Employment Offers shall provide for the same base salary to
                which the US Employees are currently entitled as specified in
                the Disclosure Documents, and shall also contain the offer of
                additional benefits comprising the benefits offered by Nice to
                its employees in the United States.

        14.2.4  In the event that any of the US Employees decline an Employment
                Offer, such US Employee shall not be an Employee.

        14.2.5  Thales shall procure the performance and discharge of all
                contractual, statutory and other obligations in respect of all
                of the Non-UK Employees up to Completion and Thales and the
                Companies shall indemnify the Purchasers against any Employment
                Liabilities arising from any act or omission of Thales and the
                Companies or failure by Thales and the Companies to discharge
                any obligation relating to any of the Non-UK Employees on or


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                prior to Completion (excluding any liability covered by the
                indemnity under Clause 14.2.7).

        14.2.6  The Purchasers shall procure the performance and discharge of
                all contractual and statutory and other obligations in respect
                of all of the Non-UK Employees after Completion and the
                Purchasers shall indemnify Thales against any Employment
                Liabilities arising from any act or omission of the Purchasers
                or the failure of the Purchasers to discharge any obligation
                relating to any of the Non-UK Employees after Completion.

        14.2.7  Thales agrees to indemnify the Purchasers against any Employment
                Liabilities it may incur if any Non-UK Employee or his or her
                employee representative brings a claim arising from a failure by
                Thales and/or its Affiliates to carry out their duty to inform
                and consult under European Transfer Legislation or other
                relevant legislation in any other country in which the Business
                operates provided that such indemnity shall not apply to the
                extent that such failure arises from the failure of the
                Purchasers to provide Thales with any necessary information
                concerning any measures that the Purchaser intends to take in
                relation to any Non-UK Employee, and provided further that such
                indemnity shall only apply in respect of 50% of any such
                Employment Liabilities to the extent that such failure arises
                from either:

                (i)     the failure of Thales and/or any Thales affiliate to
                        commence compliance with the duty to inform and consult
                        under the European Transfer Legislation applicable to
                        the relevant Non-UK Employee prior to the date of this
                        Agreement; or


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<PAGE>

                (ii)    the fact that Thales and/or any Thales Affiliate only
                        commences compliance with the duty to inform and consult
                        under the European Transfer Legislation applicable to
                        the relevant Non-UK Employee after the date of this
                        Agreement.

        14.2.8  Nice agrees to indemnify Thales against any Employment
                Liabilities if and to the extent that the same arise from the
                failure of the Purchasers to provide Thales with any necessary
                information concerning any measures (within the meaning of
                applicable European Transfer Legislation) that the Purchaser
                intends to take in relation to any non- UK Employee, and Nice
                agrees to indemnify Thales against 50% of any Employment
                Liabilities if and to the extent that the same arise from
                either:

                (i)     the failure of Thales and/or any Thales affiliate to
                        commence compliance with the duty to inform and consult
                        under applicable European Transfer Legislation prior to
                        the date of this Agreement; or

                (ii)    the fact that Thales and/or any Thales Affiliate only
                        commences compliance with the duty to inform and consult
                        under applicable European Transfer Legislation after the
                        date of this Agreement.

        14.3    Surplus Employees

        14.3.1  Nice shall terminate the employment of the Surplus Employees
                after Completion in accordance with the provisions of Clauses
                14.3.2, 14.3.3 and 14.3.4.


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        14.3.2  Nice agrees that the relevant Purchaser shall consult with
                Thales concerning the termination of the employment of the
                Surplus Employees after Completion and shall take such steps as
                are directed by Thales in writing provided that nothing in this
                Clause 14 shall require any of the Purchasers to take any action
                which is unlawful.

        14.3.3  Nice agrees that it shall not make any offer of settlement or
                compromise to any of the Surplus Employees in relation to the
                termination of their employment without the prior consent of
                Thales.

        14.3.4  In the event that any court, tribunal or any other official body
                makes any decision, ruling or judgement that the termination of
                employment of any of the Surplus Employees shall be set aside or
                invalidated, or it is otherwise ruled that any such Surplus
                Employee shall be retained by Nice or any of the Purchasers then
                the provisions of Clause 14.3.5 shall apply in relation to the
                continued employment of such Surplus Employee(s).

        14.3.5  Thales agrees to indemnify and keep indemnified the Purchasers
                against any and all Employment Liabilities in relation to the
                employment of all the Surplus Employees ("Employment Costs") and
                all and any Employment Liabilities in relation to terminating
                the employment of all the Surplus Employees ("Termination
                Costs"), which may be suffered or incurred by the Purchasers as
                a result of employing and/or terminating the employment of the
                Surplus Employees. Employment Costs include but are not limited
                to all salaries or other contractual remuneration or payments
                (excluding bonuses and commissions payable on post Completion
                sales or performance which shall be borne by Nice) required to
                be paid to the Surplus Employees in respect of their employment
                and all and any costs or expenses incurred


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<PAGE>

                by the Purchasers in respect of the Surplus Employees including
                but not limited to providing benefits to the Surplus Employees
                and any social security contributions or income tax payments
                whether incurred before or after the date that the employment of
                the last of the Surplus Employees terminates. For the avoidance
                of doubt Termination Costs shall include, but not be limited to
                all and any payments or claims made to or by the Surplus
                Employees in respect of the termination of their employment,
                including any payment ordered by a competent court or tribunal
                including any award, fine or penalty. In respect of this Clause
                14.3.5, Employment Liabilities shall include all legal expenses
                incurred at Thales' direction or otherwise reasonably and
                necessarily incurred by Nice.

        14.3.6  Thales and Nice shall agree before Completion an estimated
                amount of the total Termination Costs (the "Estimated Costs")
                and Thales shall pay to Nice 20% of the Estimated Costs on
                Completion.

        14.3.7  Thales will pay to the French Purchaser or the German Purchaser
                (whichever is relevant) no later than 1 month before the date on
                which the Surplus Employees' salaries are due each month (the
                first such payment to be made on Completion), an amount equal
                to:

                (a)     all salaries or other contractual remuneration or
                        payments (excluding bonuses and commissions payable on
                        post Completion sales or performance which shall be
                        borne by Nice) due to the Surplus Employees in respect
                        of their employment for that month, together with any
                        other social security contributions or income tax
                        payments due; and


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                (b)     an administration charge which shall be equal to 3% of
                        the monthly Employment Costs of the Surplus Employees.

                        Any payment not made to the relevant Purchaser on the
                        due date shall incur interest at a rate of 2% above the
                        base rate of Barclays Bank plc computed on a daily basis
                        until and including the date of payment.

        14.3.8  Thales will pay to Nice upon demand any other amounts becoming
                due under Clause 14.3.5. Any payment not made to Nice within 7
                days of demand shall incur interest at a rate of 2% above the
                base rate of Barclays Bank plc computed on a daily basis until
                and including the date of payment.

14.4    Any claim under the indemnities contained in this Clause 14 shall be
        dealt with as a "Third Party Claim" in accordance with Clause 22.17 to
        22.21.

15      DEBTS AND ACCOUNTS RECEIVABLE

15.1    Thales agrees that it will if so requested by Nice use or procure that
        the Companies or other members of the Thales Group shall use all
        reasonable endeavours (at the expense of Nice) to assist in the
        collection of the Accounts Receivable.

15.2    Thales will procure that the Purchasers shall have access to view the
        bank accounts of the Companies into which Accounts Receivable are paid
        for a period of 15 months following Completion. Thales will, and will
        procure that the Companies and other members of the Thales Group will,
        hold any payments in respect of the Accounts Receivable received by any
        member of the Thales Group upon trust for the Purchasers and will
        account to Nice for the same as soon as reasonably practicable and in
        any event within 7 days of demand by way of a telegraphic transfer to
        the following account:


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      Bank:             Mellon Bank, Pittsburg, PA 15285

      ABA #:            043-000-261

      Credit To:        Merrill Lynch

      Account #:        1011730

      For Further Credit to:     Nice

      Account #:        879-07L19

      Swift:            Melnus 3P

      If Thales fails to pay to Nice an amount in respect of Accounts Receivable
      within 7 days of demand then Thales shall pay interest at the rate of 2%
      above the base rate of Barclays Bank plc on such sum until the date of
      actual payment.

15.3  The Purchasers shall take such steps to collect the Accounts Receivable as
      is consistent with the prior practice of the Companies in connection with
      the Business provided that this obligation shall not require the
      Purchasers to institute or threaten any proceedings to collect the
      Accounts Receivable or to cease doing business with the relevant customer
      or to take any step which is not at the date of this Agreement a step or
      proceeding that would not be taken by the Companies in the collection of
      debts of the Business as part of the normal routine of the Business in the
      collection of debts of the Business.

15.4  Prior to the date which is 15 (fifteen) months after the Completion Date,
      Thales shall not itself take any step to collect any of the Accounts
      Receivable (unless requested by Nice in accordance with Clause 15.1), and
      shall not do anything to hinder their collection by the Purchasers.

15.5  If Thales should receive any communication or payment in respect of any
      Accounts Receivable, it shall as soon as reasonably practicable give a
      copy of such communication or payment or details in writing to the
      Purchasers.


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<PAGE>

15.6  If prior to the date which is 15 (fifteen) months after Completion the
      Purchasers shall, without the written consent of Thales, settle,
      compromise or release any of the Accounts Receivable then the original
      total amount of the relevant Accounts Receivable settled, compromised or
      released shall not be capable of reassignment to Thales pursuant to Clause
      15.9.

15.7  The Purchasers will, from the date of Completion until the first
      anniversary thereof provide to Thales within 20 days of the end of each
      calendar month a statement showing the Accounts Receivable received in the
      previous month and the balance of Accounts Receivable still to be
      received.

15.8  If on or after 15 (fifteen) months from the Completion Date, the Purchaser
      shall have failed to recover any Account Receivable, provided that:

      (a)   the Purchasers are not in breach of their obligations in Clause 15.3
            and have provided a description of the steps taken pursuant to such
            obligations, including any copy correspondence relating to the
            collection of the relevant Accounts Receivable; and

      (b)   the Purchasers have not settled, compromised or agreed to release
            such Account Receivable (whether in whole or in part) without the
            written consent of Thales,

      then the provisions in Clause 15.9 shall take effect.

15.9  Subject to the provisions of Clause 15.8:


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      15.9.1 the relevant Purchaser shall be entitled to assign all its rights
            and interest in such Account Receivable to Thales (or as it may
            direct); and

      15.9.2 upon such assignment:

            (a)   Thales shall pay or procure the payment in full to the
                  relevant Purchaser of the Account Receivable to the extent not
                  previously received by the Purchaser; and

            (b)   the Purchaser shall provide Thales with a statement in respect
                  of each Account Receivable assigned pursuant to clause 15.9.1
                  setting out the action taken by the Purchaser in the
                  collection of the Accounts Receivable, together with any
                  relevant correspondence relating thereto; and

      15.9.3 following payment under Clause 15.9.2 Thales shall be free to take
            such steps as it shall deem appropriate to collect the Account
            Receivable.

15.10 In the event that any Account Receivable becomes unrecoverable due to
      either:

      (a)   the insolvency of the debtor; or


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      (b)   where any part or all of the Account Receivable is disputed by the
            debtor and where Thales acknowledges that such Account Receivable is
            incorrect in whole or part or otherwise not a valid debt
            outstanding;

      then the provisions of clause 15.9 shall apply to the Account Receivable
      (or the unpaid amount) regardless of whether 15 months has elapsed since
      the date of Completion.

15.11 The Purchasers agree that they will, if so requested by Thales, use all
      reasonable endeavours (at the expense of Thales) to assist Thales in the
      collection of any Account Receivable re-assigned pursuant to Clause 15.9.
      The Purchasers will hold any payment in respect of any Account Receivable
      re-assigned pursuant to Clause 15.9 upon trust for Thales and will account
      to Thales for the same as soon as reasonably practicable and in any event,
      within 7 days of demand.

16    INVENTORY

16.1  Following the expiry of the year ending 31 December 2003, the Purchasers
      shall procure that the auditors of the Purchasers shall calculate the
      value of the Inventory included in the Completion Balance Sheet unsold at
      31 December 2003 (if any) ("the Unsold Inventory") by reference to its
      book value in the Completion Balance Sheet (the "Inventory Shortfall
      Amount") and the Purchasers shall serve upon Thales a notice (the
      "Inventory Shortfall Notice") of the amount of the Inventory Shortfall
      Amount and details of the calculation of such amount. Upon receipt of the
      Inventory Shortfall Notice, Thales shall have 10 days in which to inspect
      the relevant Inventory and to either agree the Inventory Shortfall Amount
      or serve a notice (a "Notice of Objections") on the Purchasers giving
      reasons why the amount is disputed.


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      If no Notice of Objection is served in the 14 day period referred to above
      then Thales shall be deemed to have agreed the Inventory Shortfall Amount.
      If the Inventory Shortfall Amount is not agreed within 14 days of service
      of the Notice of Objections, then either party may appoint an independent
      firm of accountants (the "Independent Firm") to determine the amount of
      the Inventory Shortfall Amount. The Independent Firm shall act as experts
      and not as arbitrators. The determination of the Independent Firm shall be
      binding and final save in respect of manifest error. The costs of the
      Independent Firm shall be shared equally between Thales and the
      Purchasers.

16.2  Following agreement or determination of the Inventory Shortfall Amount
      Nice shall serve upon Thales a notice confirming that Unsold Inventory is
      available for collection upon reasonable notice with details of the
      location of the Unsold Inventory.

16.3  Upon the earlier of the collection of the Unsold Inventory and 10 Business
      Days from the date of the notice referred to in Clause 16.2 above Thales
      shall pay to the Purchasers such Inventory Shortfall Amount.

16.4  The Purchasers agree that Inventory held at Completion shall be
      incorporated into any products sold prior to 31 December 2003 which
      incorporate categories of Inventory held at Completion unless all items of
      the relevant category of Inventory have been exhausted.

17    WARRANTY WORK AND ADDITIONAL SERVICES

17.1  Thales agrees to indemnify and keep indemnified the Purchasers on demand
      from time to time in respect of the cost to the Purchasers of performing
      warranty work under Contracts where the sales under such Contracts were
      recognised prior to the Completion Date to the extent that such
      expenditure


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      in aggregate exceeds the reserve for such amounts provided in the
      Completion Balance Sheet. For the purposes of this clause the cost to the
      Purchasers of performing warranty work, subject to the provisions of
      Clause 17.4, shall be the invoiced cost where the work is performed by a
      third party contractor and where the work is performed by a Purchaser's
      own labour force, at an equivalent cost as the relevant Purchaser could
      have had the work performed by a third party contractor.

17.2  Where sales are recognised prior to Completion under any Contract where
      the customer has the right under the Contract to receive additional
      services or products ("Additional Services"), the Purchasers hereby agree
      to perform the Additional Services demanded by the customer provided
      always that:

      (a)   where the customer has an obligation to pay for the Additional
            Services, the Purchasers shall be directly entitled to such payment;
            and

      (b)   where the existing Contract does not provide for further payment by
            the customer and no specific provision or inadequate provision has
            been made in the Completion Balance Sheet, Thales shall pay the cost
            of such Additional Services (or the amount not provided for, as the
            case may be) to the Purchasers. In such case, the cost to the
            Purchasers of performing the Additional Services, subject to the
            provisions of Clause 17.4, shall be the invoiced cost where the work
            is performed by a third party contractor and where the work is
            performed by a Purchaser's own labour force, at an equivalent cost
            as the relevant Purchaser could have had the work performed by a
            third party contractor.

17.3  Thales will, and will procure that the Companies and other members of the
      Thales Group will, hold any payments in respect of the Additional Services


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      made to them upon trust for the Purchasers and will account to the
      Purchasers for the same on demand.

17.4  In performing any warranty work which is governed by Clause 17.1 or
      Additional Services which are governed by Clause 17.2 the work carried out
      and the standard of such work shall be such work at such standard as is
      reasonably necessary to comply with the obligations provided for by the
      relevant Contract and the cost of the performance of the relevant work,
      whether carried out by a Purchaser's own workforce or a third party
      contractor, shall be calculated accordingly.

18    INSTEM Manufacturing Agreement

18.1  For the avoidance of doubt, Nice or its nominee assumes the rights and
      obligations of TCSL under the Instem Contracts.

18.2  "Manufacturing Management Charge" and "Contract Year" shall have the
      meanings given in the Instem Manufacturing Agreement.

18.3  Thales shall indemnify and keep indemnified the Purchasers on demand
      following the end of the relevant Contract Year in respect of any
      shortfall payments and applicable Manufacturing Management Charge which
      fall to be made pursuant to Clause 14 of the Instem Manufacturing
      Agreement as follows:

      (a)   100% of the shortfall together with the Manufacturing Management
            Charge applicable to that shortfall in the first Contract Year as
            provided in Clause 14.2 of the Instem Manufacturing Agreement; and


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<PAGE>

      (b)   50% of the shortfall in the second Contract Year as provided in
            Clause 14.3 of the Instem Manufacturing Agreement.

18.4  Nice shall procure the delivery to Thales at the request of Thales of all
      information reasonably necessary to verify the amount of any payment due
      to be paid by Thales under Clause 18.3.

19    ACTION AFTER COMPLETION

19.1  Thales will procure that all notices, correspondence, information, orders
      or enquiries relating to the Business which are received by any member of
      the Thales Group on or after Completion shall be passed to Nice as soon as
      is reasonably practicable.

19.2  Thales will procure that all monies or other items which are received by
      the Thales Group on or after Completion in connection with the Business
      shall as soon as reasonably practicable and in any event within 7 days be
      passed or paid to Nice or such member of Nice Group as Nice may direct
      and, pending such passing or payment, shall be held on trust for Nice or
      such member. Nice will procure that all monies or other items which are
      received by any member of Nice Group on or after Completion in connection
      with any business of any member of the Thales Group which is not acquired
      pursuant to this Agreement shall, as soon as reasonably practicable and in
      any event within 7 days, be passed or paid to Thales or such member of the
      Thales Group as Thales may direct and, pending such passing or payment,
      shall be held on trust for Thales or such member.

19.3  The Purchasers shall following Completion retain in good order and for a
      period not less than that for which Thales retains any liability under
      this


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      Agreement, all of the books, accounts, records and returns of the Business
      in respect of the period prior to the Completion Date.

19.4  The Purchasers shall, following Completion, provide to Thales or any
      member of the Thales Group in response to reasonable request for such
      information from Thales:

      (a)   all reasonable access during business hours on reasonable notice to
            examine (and if necessary to take copies of) such books, accounts,
            records and returns as are referred to in Clause 19.3; and

      (b)   all reasonable access to Nice's employees as it may reasonably
            request (and at Thales' cost) to enable Thales to deal with any
            correspondence, telephone calls, queries or requests from third
            parties including, without limitation, any governmental or
            regulatory authority and any person who was a customer or supplier
            of the Business prior to the Completion Date; and

      (c)   such other information and assistance as may reasonably be required
            by Thales,

      in order for Thales of any Thales Affiliate to prosecute, defend of
      otherwise deal with any liability comprised in the Excluded Liabilities.

19.5  Save insofar as such costs arise in relation to the Purchaser recording
      title to any Business IPR at any relevant registry, Thales shall at its
      own cost, from time to time on reasonable notice, do or procure the doing
      of all such acts and/or execute or procure the execution of all such
      documents in a form required and necessary for giving full effect to this
      Agreement and securing to the Purchasers the full benefit of the Business
      and Assets and the other


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<PAGE>

      rights, powers and remedies conferred upon the Purchasers in this
      Agreement.

19.6  In respect of any Shared Assets, Thales shall use its reasonable
      endeavours to secure for the Purchasers, for the same period as any member
      of the Thales Group has such benefit and/or use, the continued benefit
      and/or use of such Shared Assets in the same manner as the Shared Assets
      were used in the Business in the 12 month period prior to Completion and
      Thales shall procure that the cost to the Purchasers for the continued
      benefit or entitlement to such Shared Assets shall be no greater than the
      historical cost to the Business of such benefits or entitlements subject
      to a reasonable inflation allowance.

19.7  For the avoidance of doubt and without prejudice to clause 19.6, Thales
      shall grant or procure the grant to the Purchasers of the right and
      licence to the full benefit and use (as enjoyed by the Business prior to
      Completion) of all and any Intellectual Property Rights (other than
      Excluded Trade Marks) which are Shared Assets and which are owned by
      Thales or any member of the Thales Group, on a non-exclusive perpetual,
      irrevocable, royalty free, fully paid up basis for use exclusively in the
      business being acquired hereunder, except to the extent that such licence
      cannot lawfully be granted under any statutes or regulations in which case
      such licence shall be granted to the Purchasers on the most favourable
      lawful terms.

19.8  Exchange of Nice Shares for Nice ADRs

      19.8.1    Upon effectiveness of the Shelf Registration Statement (as
                defined in the Registration Rights Agreement), Nice shall
                remove, or cause to be removed, from the certificates
                representing the Nice Shares comprising the Share Consideration
                the restrictive legend relating to the Securities Act of 1933,
                as amended, and shall use commercially reasonable efforts to
                ensure that such Nice


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                Shares are thereafter eligible for deposit under the Deposit
                Agreement dated as of January 24, 1996, as amended and restated
                as of July 22, 1997, by and among Nice, The Bank of New York, as
                Depositary thereunder, and the owners and holders of Nice ADRs
                thereunder (the "ADR Facility"), in exchange for Nice ADRs
                representing such Nice Shares. Notwithstanding the foregoing,
                the Nice Shares comprising the Share Consideration and any Nice
                ADRs issued in exchange therefore shall continue to be subject
                to restrictions on transfer consistent with this Agreement and
                Schedule 11 attached hereto and the standstill agreement
                referred to therein.

        19.8.2  In order to ensure compliance with the contractual restrictions
                on transfer and manner of sale set forth in Schedule 11 attached
                hereto, at Completion Thales shall designate one broker or
                dealer of Thales' choice through whom Thales will coordinate and
                effect any and all sales of any Nice Shares or Nice ADRs
                comprising the Share Consideration, shall provide Nice with
                contact information for a designated contact person at the
                offices of such broker or dealer, and shall advise such broker
                or dealer in writing (with receipt acknowledged by such broker
                to Nice and Thales) of the restrictions set forth in Schedule 11
                attached hereto, including providing such broker or dealer with
                a copy of Schedule 11. Thales may change such designated broker
                or dealer at any time by providing notice of such change to
                Nice, provided such newly designated broker or dealer is advised
                in writing (with receipt acknowledged by such broker to Nice and
                Thales) of the restrictions set forth in Schedule 11 attached
                hereto, including providing such broker or dealer with a copy of
                Schedule 11, and provided that at all times only


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                one broker or dealer shall be designated as the applicable
                broker or dealer under this Section 19.8.2.

19.9    Embargo Contracts

        19.9.1  The UK Purchaser undertakes to Thales with, subject to Clause
                19.9.4, effect from Completion to act as sub-contractor to TCSL
                and to carry out and perform and complete all the outstanding
                obligations and liabilities created by or arising under the
                Embargo Contracts and shall indemnify Thales and keep it fully
                indemnified against all liabilities, losses, actions,
                proceedings, costs, claims, demands and expenses brought or made
                against or incurred by Thales and/or TCSL in respect of the
                non-performance or defective or negligent performance or
                termination of the Embargo Contracts following Completion.

        19.9.2  In consideration for the UK Purchaser agreeing to act as
                sub-contractor to TCSL and fulfil the obligations of TCSL under
                the Embargo Contracts pursuant to Clause 19.9.1, Thales shall or
                shall procure that the benefit of all payments received by TCSL
                or any member of the Thales Group shall be held on trust for
                Nice and shall be passed to the UK Purchaser as soon as
                reasonably practicable following receipt.

        19.9.3  The UK Purchaser acknowledges that the performance of the
                Embargo Contracts shall include all interface with the relevant
                distribution channel and if relevant, end-user, and that TCSL
                shall merely hold the Embargo Contracts in its name, and Thales
                agrees to procure that TCSL shall not amend the terms of the
                Embargo Contracts.


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        19.9.4  The UK Purchaser shall take no steps in the performance of the
                Iran Contract unless and until advised to do so by TCSL in
                writing.

19.10   Coppice Developments Limited

        Following Completion the UK Purchaser agrees that it will perform the
        obligations of TCSL to Coppice Developments Limited ("Coppice") under
        the third party manufacturer's agreement between TCSL and Coppice dated
        5 February 2002 (a copy of which is attached to the Disclosure Letter)
        (the "Coppice Contract") in accordance with its terms at the date of
        this Agreement and Thales shall make payments to the UK Purchaser in the
        same amounts and on the same terms as the payments due to TCSL from
        Coppice under the terms of the Coppice Contract. Thales agrees to
        procure that TCSL shall not amend the terms of the Coppice Contract.

20      INSURANCE CLAIMS

        To the extent that an accident occurs or has occurred or any loss or
        damage is incurred or has been incurred at any time on or before the
        date of Completion in relation to the Business which is covered by
        insurance policies in the name of or otherwise maintained by any member
        of the Thales Group then Thales shall or shall procure that the relevant
        member of the Thales Group shall, subject to being indemnified by the
        relevant Purchaser in respect of all costs reasonably incurred in
        connection with pursuing such claim or loss, pursue such claim or loss
        on behalf of the relevant Purchaser and, upon receipt of insurance
        monies in respect of such claim or loss, pay such monies forthwith to
        the relevant Purchaser net of all expenses (including legal fees (if
        any) incurred with the prior written consent of Nice) incurred and not
        previously reimbursed by the relevant Purchaser.


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21      THIRD PARTY CONSENTS

21.1    Without prejudice to the Condition in clause 2, the subject of which
        shall not be governed by this Clause 21, if any consent or approval of
        any person who is not a party to this Agreement is required to enable
        the relevant Purchaser to take the assignment of or perform any Contract
        and any such consent or approval has not been received at or prior to
        Completion:

        21.1.1  this Agreement shall not constitute an assignment or attempted
                assignment of any such Contract whose terms would be broken by
                an assignment or attempted assignment;

        21.1.2  the assignment of each Contract shall be conditional upon such
                consent, and the parties shall co-operate to obtain such consent
                as soon as practicable;

        21.1.3  until such time as such consent or approval is received, the
                Companies shall be deemed to, and Thales shall procure that the
                Companies shall, insofar as is legally possible, hold the
                benefit thereof in trust for the Purchasers and the Purchasers
                shall (if such sub-contracting is permissible and lawful under
                the Contract in question) as the relevant Company's
                sub-contractor perform all the obligations of the relevant
                Company under such Contract.

21.2    Where following Completion, any of the Purchasers act as the
        sub-contractor to any of the Companies in the performance of any
        Contract in accordance with Clause 21.1.3 the Purchasers shall indemnify
        the relevant Company


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      and keep it fully indemnified against all liabilities, losses, action,
      proceedings, costs, claims, demands and expenses brought or made against
      or incurred by the relevant Company in respect of the non-performance or
      defective or negligent performance by the relevant Purchaser of the
      relevant Contract.

22    WARRANTIES AND LIMITATIONS ON LIABILITY

22.1  Thales warrants to the Purchasers that each of the Warranties set out in
      Part 1 of Schedule 4 and Schedule 5 are true and accurate at the date of
      this Agreement.

22.2  Nice warrants to Thales that each of the warranties set out in Part 2 of
      Schedule 4 are true and accurate at the date of this Agreement.

22.3  The Purchasers shall not be entitled to claim that any fact causes any of
      the Warranties to be breached or renders any of the Warranties misleading
      if it has been fairly disclosed in reasonable detail to the Purchasers in
      the Disclosure Letter. For the avoidance of doubt:

      (a)   if a document is referred to in the Disclosure Letter but a copy of
            such document is not included in the Disclosure Documents, the
            contents of such document will not be deemed to have been fairly
            disclosed to the Purchasers; and

      (b)   if a document is referred to in the Disclosure Letter but a partial,
            rather than a complete, copy of such document is not included in the
            disclosure Documents then the relevant document shall only be deemed
            disclosed to the Purchaser to the extent actually included in the
            Disclosure Letter.


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22.4  Thales acknowledges that the Purchasers have entered into this Agreement
      in reliance upon the Warranties.

22.5  Each of the Warranties shall be separate and independent and, save as
      expressly provided to the contrary, shall not be limited or restricted by
      reference to or inference from any other Warranty.

22.6  Each of the Warranties shall be given on the date of this Agreement and
      shall be deemed to be repeated on the Completion Date except for the
      Warranty set out at paragraph 4.3 of Part I of Schedule 4. The Warranties
      deemed repeated at Completion shall be made on the basis that at
      Completion any reference to "the date of this Agreement", whether express
      or implied, in the Warranties or in any of the definitions in Clause 1.1
      (Definitions and Interpretation) and used in such Warranties (except in
      the definition of the "Disclosure Letter") shall be deemed to be
      substituted by a reference to the Completion Date. Notwithstanding that
      the Warranties set out at paragraphs 3.1, 3.2, 3.8, 3.9, 3.11, 3.12(a),
      7.1 and 11.3 of Part I of Schedule 4 shall be deemed repeated at
      Completion, the Purchasers shall not be entitled to claim that any fact
      arising between the date of this Agreement causes any such Warranties not
      to be true or accurate if it has been fairly disclosed in reasonable
      detail to the Purchasers in the Completion Disclosure Letter.

22.7  Thales will deliver to the Purchasers immediately before Completion a
      letter (the "Completion Disclosure Letter") confirming that the Warranties
      are true and accurate as at the Completion Date (as if repeated as
      described in sub-Clause 22.6) except as regards any matter or event
      occurring between the date of this Agreement and the Completion Date fair
      and reasonable details of which are set out in the Completion Disclosure
      Letter to the intent that such confirmations shall confer the same rights
      on the Purchasers as if each was set out in this Agreement as a Warranty.
      The Completion Disclosure


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      Letter shall not effect the right of the Purchasers to place reliance on
      the Warranties, except as provided in Clause 22.6.

22.8  Thales hereby undertakes to disclose promptly to Nice in writing
      immediately upon becoming aware of any matter, event or circumstance which
      may arise or becomes known to it after the date of this Agreement and
      before, or at the time of Completion which would or may make any of the
      Warranties inaccurate and would accordingly constitute a breach of the
      relevant Warranty.

      If, details of any matter disclosed in the Completion Disclosure Letter
      results in the Warranties, in the absence of such disclosure, not being
      true and accurate at Completion, then Thales acknowledges and agrees that
      the Purchasers shall be entitled to take action and to recover damages to
      the same extent which they would have been entitled had such disclosure
      not been made by Thales in the Completion Disclosure Letter (or otherwise)
      prior to Completion, except as provided in Clause 22.6.

22.9  The Purchasers shall not be entitled to recover more than once in respect
      of any one matter or set of circumstances giving rise to a claim under the
      Warranties and/or any indemnity and/or under any other provision of this
      Agreement. No claim for loss of profits will be recoverable for breach of
      Clause 5.3 or either Warranty 8.1 or 8.5 where the relevant claim would
      fall within the scope of the indemnities in Clauses 11.1, 11.2, 11.3 and
      11.4 but for the exceptions provided therein.

22.10 The benefit of the Warranties and all other rights of the Purchasers
      hereunder may be assigned in whole or in part, but always subject to the
      limitations on liability contained in this Clause 22, and without
      restriction by the Purchasers to any company which is a member of the
      Purchasers' Group and which succeeds in title to any of the businesses, in
      whole or in part, comprised in the Business. Provided that the benefit of
      the Warranties and all other rights assigned pursuant to this clause shall
      cease to have


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        effect and shall no longer be enforceable against Thales and/or any
        Thales Affiliate in the event that the assignee ceases to be a member of
        the Purchasers' Group.

22.11   In the event of the Purchasers becoming aware of any matter which may
        involve Thales in liability pursuant to the Warranties or the
        indemnities in Clauses 6 (Excluded Liabilities), 11 (Indemnities) and 14
        (Employment), and such matter is not a Third Party Claim (as defined in
        Clause 22.18) then the Purchasers shall procure that notice thereof
        (stating in reasonable details the nature of the claim and so far as
        practicable, the amount claimed) is provided to Thales within forty-five
        (45) days of the Purchasers becoming aware of the relevant matter, but
        any failure to give such notice or particulars shall not affect the
        rights of the Purchasers except that Thales shall not be liable in
        respect of any such claim to the extent that any liability of Thales is
        increased or Thales is otherwise prejudiced by such failure.

22.12   No claim shall be brought against Thales in respect of any breach of the
        Warranties or the indemnities set out in Clause 11 (other than the
        indemnities at Clauses 11.4, 11.5 and 11.6) unless Nice has given Thales
        written notice of the claim (stating in reasonable detail the nature of
        the claim and, so far as practicable, the amount claimed):

        22.12.1 in respect of any claim relating to Taxation, on or before the
                date which is 90 days from the last date on which any Tax
                Authority may make a claim or consent in or take any other step
                which may give rise to a claim relating to Taxation;

        22.12.2 in respect of any claim relating to any Intellectual Property
                Rights (other than a claim in respect of Wordnet 3 under clause
                11.3 or under the Warranties) matters, on or before the fourth
                anniversary of the Completion Date;


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        22.12.3 in respect of any claim relating to Wordnet 3 under clause 11.3
                or under the Warranties, on or before the third anniversary of
                the Completion Date;

        22.12.4 in respect of any claim relating to any other matters on or
                before the date which is two (2) years after the Completion
                Date.

22.13   The aggregate amount of the liability of Thales under:

        (a)     the Warranties;

        (b)     the indemnity in relation to the Prism Product at Clause 11.1;

        (c)     the indemnity in relation to Business IPR at Clause 11.2;

        (d)     the indemnity in relation to Wordnet 3 at clause 11.3; and

        (e)     the provisions of this Agreement in relation to the performance
                of warranty work at Clause 17;

        shall not exceed the aggregate of 60% (sixty per cent) of the aggregate
        of the Initial Cash Consideration (as defined in Clause 7.2.1) together
        with any further cash consideration received by Thales or the Companies
        as at the date of the relevant claim less any amount paid by Thales to
        the Purchasers by way of reduction of the consideration pursuant to
        Clauses 7.5, 7.7 and 13 provided that Thales' liability under Clause
        11.3 (or warranty 8.5 relating to


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      Wordnet 3) shall be limited to $12,500,000. For the avoidance of doubt,
      the provisions of this Clause 22.13 shall not affect or limit the
      liability of Thales in relation to any claim relating to the indemnities
      and/or provisions of this Agreement in respect of Clause 11.5 (SMRC),
      Clause 11.6 (NMS), Clause 11.7 (Tax), Clause 15 (Accounts Receivable),
      Clause 16 (Inventory), Clause 18 (the Instem Manufacturing Agreement),
      Clause 6 (the Excluded Liabilities) and any other provision of this
      Agreement.

22.14 No liability shall attach to Thales in respect of any individual claim
      under the Warranties, the indemnity relating to the Prism Product at
      Clause 11.1, the indemnity relating to Business IPR at Clause 11.2 or the
      indemnity relating to Wordnet 3 at Clause 11.3 for which it would, in the
      absence of this provision, be liable, unless such claim exceeds
      (pound)15,000 (fifteen thousand pounds). For the avoidance of doubt, the
      provisions of this Clause 22.14 shall not affect or limit the liability of
      Thales in relation to any claims made by the Purchasers relating to the
      indemnities and/or the provisions of this Agreement relating to Clause
      11.5 (SMRC), Clause 11.6 (NMS), Clause 11.7 (Tax), Clause 17 (warranty
      work), Clause 15 (Accounts Receivable), Clause 16 (Inventory), Clause 18
      (the Instem Manufacturing Agreement) Clause 6 (the Excluded Liabilities)
      and any other provisions of this Agreement.

22.15 The Purchasers shall not be entitled to damages in respect of any claim or
      claims under any of the Warranties, the indemnity relating to the Prism
      Product at Clause 11.1 or the indemnity relating to Business IPR at Clause
      11.2 and Wordnet 3 at Clause 11.3 unless and until the aggregate amount of
      all claims exceeds $600,000 (six hundred thousand dollars), but if this
      amount is exceeded, Thales' liability shall be for the total amount of the
      claims and shall not be limited to the excess. For the avoidance of doubt,
      the provisions of this Clause 22.15 shall not affect or limit the
      liability of Thales in relation to any claims made by the Purchasers
      relating to the indemnities and/or the provisions of this Agreement
      relating to Clause 11.5 (SMRC), Clause 11.6 (NMS), Clause 11.7 (Tax),
      Clause 17 (warranty work), Clause 15 (Accounts Receivable), Clause 16
      (Inventory), Clause 18 (the


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      Instem Manufacturing Agreement), Clause 6 (the Excluded Liabilities) and
      any other provisions of this Agreement.

22.16 None of the limitations contained in clauses 22.12, 22.13 and 22.14 and
      22.15 shall apply to any breach of any Warranty or indemnity which (or the
      delay in discovery of which) is the consequence of fraud, by any member of
      the Thales Group or any officer or employee of any member of the Thales
      Group. None of the limitations contained in clauses 22.3, 22.12, 22.13,
      22.14, 22.15 and 22.22 shall apply to any breach of warranty 2.7 (Accounts
      Combination Statement).

22.17 In the following provisions of this clause 22, the expression "Indemnified
      Party" means any of the Purchasers or any member of the Purchasers' Group
      or Thales or any member of the Thales Group, as the case may be, who has
      any claim under Clauses 3.2 (Hedge End), 6.1 (Assumed Liabilities), 6.3
      (Excluded Liabilities), 14 (Employment), 11 (Indemnities), or 25.2
      (Pensions) or under the Warranties and the expression "Indemnifying Party"
      means Thales or (or other relevant member of the Thales Group) or any
      Purchaser (or other relevant member of the Purchasers' Group) as the case
      may be.

22.18 If an Indemnified Party becomes aware of any matter, act, omission or
      circumstances that may give rise to a claim against the Indemnifying Party
      and the claim in question is a result of or in connection with a claim by
      or liability to a third party ("Third Party Claim") then the Indemnified
      Party shall procure that notice of such Third Party Claim is given as soon
      as reasonably practicable and in any event within twenty one (21) days to
      the Indemnifying Party, and the Indemnified Party shall provide to the
      Indemnifying Party sufficient information as may reasonably be required to
      assess the validity of the claim in question, but any failure to give such
      notice or provide such information shall not affect the rights of the
      relevant Indemnified Party except that the Indemnifying party shall not be
      liable to the Indemnified Party in


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      respect of a Third Party Claim to the extent that any liability of the
      Indemnifying Party is increased or the Indemnifying Party is otherwise
      prejudiced by such failure.

22.19 If the Indemnifying Party agrees that it is liable to the Indemnified
      Party in respect of the claim in question (to the extent the Third Party
      Claim is successful) and the Indemnifying Party indemnifies and secures
      the Indemnified Party against all reasonable out-of-pocket costs and
      expenses incurred by it, and any loss arising in respect of the relevant
      claim under this Agreement as finally determined, within 10 Business Days
      of being notified of the Third Party Claim, the Indemnified Party and any
      member of its group shall, subject to clauses 22.20 and 22.21:

      (a)   take such action as the Indemnifying Party may reasonably require
            after consultation with the Indemnified Party to avoid, resist,
            contest or compromise such Third Party Claim or matter which gives,
            or may give, rise to such a claim;

      (b)   not make any admission of liability, agreement, compromise or
            settlement with any person, body or authority nor consent to the
            entry of any judgment or final order in relation to any such Third
            Party Claim except with prior consultation with, and the prior
            agreement (not to be unreasonably withheld or delayed) of, the
            Indemnifying Party;

      (c)   if so required by the Indemnifying Party ensure (or, as appropriate,
            shall procure that each Indemnified Party shall ensure) that the
            Indemnifying Party is placed in a position to take on or take over,
            in any such case in the name and on behalf of, the Indemnified Party
            (or any


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            member of its group concerned), the conduct of all proceedings
            and/or negotiations of whatever nature arising in connection with
            the Third Party Claim in question, including the appointment of
            solicitors or other professional advisers, and provide (or, as
            appropriate, procure that each Indemnified Party provides) such
            information, original or copy documents, access to systems and/or
            personnel and assistance as the Indemnifying Party may reasonably
            require in connection with the preparation for, and conduct of, such
            proceedings and/or negotiations provided that the Indemnifying Party
            shall keep the Indemnified Party informed of the progress of any
            proceedings and shall consult with the Indemnified Party prior to
            taking any action which may materially and adversely affect the
            Indemnified Party or the Business. If the Indemnified Party decides
            to retain solicitors or other professional advisers in addition to
            those retained by the Indemnifying Party, it shall do so at its own
            cost.

      (d)   If the Indemnifying Party does not take over the management of the
            claim, then the Indemnified Party shall consult the Indemnifying
            Party on the conduct of the claim and keep the Indemnifying Party
            fully and regularly informed of all proceedings and/or negotiations
            and of any financial sums which will be claimed under the indemnity
            and will only compromise, settle, discharge or otherwise dispose of
            the claim with the prior written consent of the Indemnifying Party
            (such consent not to be unreasonably withheld or delayed).

22.20 The Indemnified Party shall not take any step to admit, compromise,
      settle, discharge or otherwise deal with any Third Party Claim at any time
      prior to notification of such Third Party Claim to the Indemnifying Party
      or pending


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      the Indemnifying Party's consideration of the Third Party Claim. Provided
      that the Indemnified Party has complied with its obligations under this
      Clause and Clauses 22.17 and 22.18, the Indemnified Party shall be at
      liberty, without reference to the Indemnifying Party and without prejudice
      to its rights against the Indemnifying Party, to admit, compromise,
      settle, discharge or otherwise deal with any Third Party Claim:

      (a)   if the Indemnifying Party fails to request the Indemnified Party to
            take any appropriate action within a reasonable period after receipt
            of the notice given under clause 22.18 above; or

      (b)   if no response is received from the Indemnifying Party within a
            reasonable period in relation to any continuing dispute, negotiation
            or correspondence; or

      (c)   if the Indemnifying Party fails to secure and indemnify the
            Indemnified Party as required by clause 22.19 above.

22.21 The Indemnified Party and any member of its group shall be at liberty,
      without prejudice to its rights against the Indemnifying Party, to admit,
      compromise, settle, discharge or otherwise deal with any Third Party Claim
      if the Third Party Claim relates to any Intellectual Property Rights and
      such claim could materially and adversely affect the Business including,
      for the avoidance of doubt, the ongoing financial performance of the
      Business, provided that the Indemnified Party shall keep the Indemnifying
      Party informed of the progress of any proceedings and shall consult with
      the Indemnified Party prior to compromising, settling, discharging or
      otherwise dealing with such a Third Party Claim.


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22.22   No liability shall attach to Thales in respect of any claim under the
        Warranties and/or the indemnities set out in Clause 11:

        22.22.1 to the extent that the matter, event or circumstance giving rise
                to the relevant claim was provided for in the Completion Balance
                Sheet;

        22.22.2 unless proceedings in respect of the claim shall have been
                issued and served on Thales before the date nine months
                following the date on which notice of the claim was given to
                Thales in accordance with Clause 22.12;

        22.22.3 to the extent that the claim or breach would not have arisen but
                for some act, omission, transaction or arrangement whatsoever
                carried out at the written request or with the written approval
                of Nice or its authorised representatives prior to Completion or
                which was expressly authorised by this Agreement; and

        22.22.4 to the extent that the matter giving rise to the claim would not
                have arisen but for the passing of, or any change in, after the
                date of this Agreement, any law, rule, regulation,
                interpretation of law or administrative practice of any
                government, governmental department, agency or regulatory body
                or any increase in the rates of Tax or any imposition of Tax, in
                any case not actually or prospectively in force at the date of
                this Agreement.

22.23   The Purchasers shall, in relation to any loss or liability which might
        give rise to a claim under:

        (a)     the Warranties; or


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        (b)     any Third Party Claim which relates to Intellectual Property
                Rights in relation to which Nice have exercised their rights
                under Clause 22.21 to take conduct of such claim and the
                indemnities contained in clauses 11.1, 11.2, 11.5 and 11.6,

        take all reasonable steps to avoid or mitigate such loss or liability.

22.24   Thales undertakes that if any claim is made against it or any of the
        other members of the Thales Group in connection with the sale of the
        Assets or the Cliffstone Shares or the Cliffstone Note to the
        Purchasers, none of them will make any claim against any Employee on
        whom it may have relied before agreeing to the terms of this Agreement
        or authorising any statement in the Disclosure Letter.

22.25   Thales expressly disclaims all liability and responsibility for any
        forecast, business projection or evaluation contained within or derived
        or capable of being derived from:

        22.25.1 any investigation carried out or made by or on behalf of the
                Purchasers in the course of due diligence or other enquiry prior
                to the Purchasers entering into this Agreement; or

        22.25.2 any other data, document, record or information Disclosed.

22.26   No liability shall attach to Thales in respect of any claim under the
        Warranties to the extent that the relevant facts, matters or
        circumstances giving rise to the claim were actually known by the
        Purchasers to constitute a breach of Warranty.


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23      RESTRICTIONS ON THALES ACTIVITIES

23.1    Thales undertakes with the Purchasers that without the written consent
        of Nice it will not and shall procure that each Affiliate of Thales
        shall not, either on its own account or in conjunction with or on behalf
        of any other person:

        23.1.1  for a period of three (3) years from the Completion Date carry
                on or be engaged, concerned or interested, directly or
                indirectly, whether as a partner, shareholder, director,
                consultant, agent or otherwise in any business which is
                competitive with the Business as such business is carried on at
                Completion;

        23.1.2  for a period of 18 (eighteen) months from the Completion Date
                entice away or attempt to solicit or entice away from the
                Purchasers any Employee who is a senior employee of the
                Business, whether or not such person would commit a breach of
                his contract by reason of leaving such employment.;

        23.1.3  for a period of three years from the Completion Date solicit or
                endeavour to entice away from the Purchasers the business or
                custom of a Restricted Customer with a view to providing goods
                or services to that Restricted Customer in competition with the
                Business as carried on at the Completion Date;

        23.1.4  for a period of three years from the Completion Date provide
                goods or services to or otherwise have any business dealings
                with any Restricted Customer in the


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                course of any business concern which is in competition with the
                Business as carried on at the Completion Date;

        23.1.5  for a period of three years from the Completion Date to the
                detriment of any of the Purchasers, persuade or endeavour to
                persuade any Restricted Supplier to cease doing business or
                materially reduce its business with any of the Purchasers;

        23.1.6  for a period of three years from the Completion Date to the
                detriment of any of the Purchasers, receive goods or services
                from or otherwise have any business dealings with any Restricted
                Supplier in the course of any business concern which is in
                competition with the Business as carried on at the date hereof;
                and

        23.1.7  assist any other person to do any of the foregoing things.

23.2    While the restrictions contained in this Clause 23 are considered by the
        parties to be reasonable in all the circumstances, it is recognised that
        restrictions of the nature in question may fail for technical reasons
        and accordingly it is agreed and declared that if any of such
        restrictions shall be adjudged to be void as going beyond what is
        reasonable in all the circumstances for the protection of the legitimate
        business interests of the Purchasers but would be valid if part of the
        wording was deleted or the periods reduced or the range of activities or
        area dealt with reduced in scope, the said restriction shall apply with
        such modifications as may be necessary to make it valid and effective.

23.3    Nothing in Clause 23.1 shall prevent Thales or any Affiliate of Thales
        from:


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        23.3.1  acquiring after Completion, a company or business (a "Relevant
                Transaction"), which carries on the business of the design,
                development, production, marketing and supply of various secure
                voice recording and replay systems and products or application
                software for customer performance management solutions in either
                contact centres, public safety or wholesale trading platforms
                and the provision of related ancillary services (a "Relevant
                Business") (and the provisions of Clause 23.1.1 shall not apply
                to any such company or business) provided that the acquisition
                of the company or business carrying on the Relevant Business is
                an incidental part of the Relevant Transaction. For the
                avoidance of doubt if the aggregate sales of the company or
                business carrying on the Relevant Business is above 10 per cent.
                of the aggregate sales of all the companies or businesses
                acquired pursuant to the Relevant Transaction, or, if the annual
                turnover of the company or business carrying on the Relevant
                Business is in excess of $20 million, the company or business
                carrying on the Relevant Business shall not be regarded as
                incidental; and

        23.3.2  the acquisition of shares or convertible debentures of a company
                listed on any recognised stock exchange market which is
                significantly (i.e. more than 10% of total sales) engaged in a
                business competitive with the Business, provided that Thales or
                any Affiliate of Thales in aggregate does not acquire directly
                or indirectly shares or convertible debentures which constitute
                or can be constituted to consist more than 5 per cent of the
                share capital of such company.


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23.4  In the event that Thales, pursuant to Clause 23.1, is permitted to acquire
      a Relevant Business Thales undertakes to inform Nice of such acquisition,
      in writing, in reasonable detail, within two weeks of the completion of
      the Relevant Transaction. Nice shall then have a period of 90 days from
      the date of receipt of the notice of Thales, to serve a notice of its wish
      to purchase the company or business carrying on the Relevant Business. The
      parties agree to negotiate in good faith to conclude the sale of the
      company or business carrying on the Relevant Business within 3 months from
      the date of Nice's notice stating its desire to purchase such company or
      business.

24    USE OF CORPORATE NAMES

      The Purchasers undertake that they shall not, and will procure that the
      members of the Purchasers' Group shall not, make use of the Excluded Trade
      Marks at any time after the Completion Date, save only that the Purchasers
      shall be entitled from the Completion Date in connection with the
      Business:

      (a)   for a period of 6 months to use up existing stocks of trade
            literature, labels, manuals, packaging and other printed material
            bearing any of the Excluded Trade Marks or any part thereof;

      (b)   for a period of 3 months to continue to display any of the Excluded
            Trade Marks or any part thereof as it appears on any existing
            nameplate, building sign or vehicle;

      (c)   for a period of 6 months to cover or remove any of the Excluded
            Trade Marks or any part thereof from any existing stocks of
            products;


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<PAGE>

      provided that any goodwill derived from use of the Excluded Trade Marks by
      the Purchasers' or members of the Purchasers' Group pursuant to this
      Clause 24 shall accrue to Thales.

25    PENSIONS

25.1  Each of Thales and the Purchasers shall comply, or shall procure
      compliance with Schedule 6 (Pensions).

25.2  Thales shall indemnify and keep indemnified the Purchasers (for themselves
      and as trustee for any other member of the Purchasers' Group) on demand
      against any liabilities, claims, actions or proceedings which may be
      suffered or incurred by, or made against the Purchasers or any other
      member of the Purchasers' Group (including without limitation all legal
      and other professional fees and expenses incurred) arising in connection
      with or as a consequence of the provision of retirement benefits
      (contractual or otherwise) for and in respect of the Non-UK Employees and
      their dependants in respect of or attributable to any period prior to
      Completion.

26    CONFIDENTIALITY OF INFORMATION

26.1  Each party undertakes to the other that it shall and shall procure that
      all members of its Group shall treat as strictly confidential all
      information received or obtained by it or its employees, agents or
      advisers as a result of entering into or performing this Agreement
      including information relating to the provisions of this Agreement, the
      negotiations relating to this Agreement, the subject matter of this
      Agreement or the business or affairs of the other and subject to the
      provisions of Clause 26.2 that it will not at any time hereafter make use
      of or disclose or divulge to any person such information and shall use all
      reasonable endeavours to prevent the publication or disclosure of any such
      information.


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<PAGE>

26.2  The restrictions contained in Clause 26.1 or 26.3 shall not apply so as to
      prevent any party, Thales or the Companies from making any disclosure
      required by law or for the purpose of any judicial proceedings or by any
      securities exchange or supervisory or regulatory or governmental body
      pursuant to rules to which it is subject wherever situated or from making
      any disclosure to any professional adviser, auditors and bankers for the
      purposes of obtaining advice (provided always that the provisions of this
      Clause 26 shall apply to, and such party shall procure that they apply to
      and are observed in relation to, the use or disclosure by such
      professional adviser of the information provided to him) nor shall the
      restrictions apply in respect of any information which comes into the
      public domain otherwise than by a breach of this Clause 26.

26.3  Thales undertakes at all times after the Completion Date not to disclose
      to any other person or use any Business Information which is not in the
      public domain.

26.4  The restrictions contained in this Clause 26 shall continue to apply after
      the termination of this Agreement without limit in time.

27    CORPORATE GOVERNANCE, LOCK-UP, ORDERLY MARKETING ARRANGEMENTS, STANDSTILL
      AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

27.1  The rights and obligations of Thales and Nice with respect to the
      registration under the Securities Act, of the Nice Shares issued to Thales
      as the Share Consideration in accordance with Clause 7.2.2 are set forth
      in the Registration Rights Agreement attached hereto as Schedule 11.


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<PAGE>

27.2  The rights and obligations of Thales and Nice with respect to the
      corporate governance of Nice and restrictions on the trading of Nice
      Shares by Thales are set forth in Schedule 11.

27.3  Thales has also agreed to be bound by the terms and conditions of a stand
      still agreement substantially in the form of Schedule 11 hereto.

28    NOTICES

28.1  All notices and other communications relating to this Agreement:

      28.1.1 shall be in English and in writing;

      28.1.2 shall be delivered by hand or sent by facsimile;

      28.1.3 shall be delivered or sent to the party concerned at the relevant
             address or number, as appropriate, and marked as shown in Clause
             28.2, subject to such amendments as may be notified from time to
             time in accordance with this Clause 28 by the relevant party to the
             other party. That notice shall only be effective on the date
             falling 5 clear Business Days after the notification has been
             received or such later date as may be specified in the notice;

      28.1.4 Any notice given under this Agreement shall, in the absence of
             earlier receipt, be deemed to have been duly given as follows:

            (a)   if delivered personally, on delivery;


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<PAGE>

      (b)   if sent by facsimile, when dispatched provided a valid transmission
            acknowledgement is obtained from the addressees' facsimile machine
            appears correctly at the start and end of the sender's fax.

28.2  The initial details for the purposes of Clause 28 are:

      Thales SA
      173 Boulevard Haussmann
      75415 Paris Cedex 08
      France
      Facsimile n(degree) 00 33 1 53 77 82 63
      For the attention of Pierre CHARRETON
                           Thales Group General Counsel

      The Purchasers
      Nice Systems
      8 Hapnina Street
      Raanana, 43107
      Israel
      facsimile n(degree)972 9775 3520
      for the attention of: Koby Huberman

28.3  Any notice given under this Agreement outside normal working hours in the
      place to which it is addressed shall be deemed not to have been given
      until the start of the next period of normal working hours in such place.


                                      127
<PAGE>

28.4  No notice under this Agreement may be withdrawn or revoked except by
      notice given in accordance with this Clause 28.

28.5  The provisions of this Clause 28 shall not apply in relation to the
      service of Service Documents

29    ANNOUNCEMENTS

29.1  The parties mutually agree to take all reasonable care to avoid any act
      which may reflect adversely on or be harmful to the business reputation or
      prestige of the other and without prejudice to the generality of the
      foregoing agree that (save as required by law or stock exchange
      regulations) any press announcements or circular letters which may be made
      or sent out by the Thales Group or the Purchasers and any other
      disclosures relating to this Agreement or its subject matter shall be
      subject to the prior written approval of Thales and Nice, such approvals
      not to be unreasonably withheld or delayed and may be given either
      generally or in a specific case or cases and may be subject to conditions.

29.2  The restrictions contained in this Clause 29 shall continue to apply after
      termination of this Agreement without limit in time.

30    ENTIRE AGREEMENT

30.1  This Agreement (together with the documents referred to herein) represent
      the entire agreement between the parties in relation to the subject matter
      of this Agreement and supersedes any previous agreement whether written or
      oral between the parties in relation to the subject matter. Accordingly,
      all other terms, conditions, representations, warranties and other
      statements


                                      128
<PAGE>

      which would otherwise be implied (by law or otherwise) shall not form part
      of this Agreement.

30.2  Each of the parties acknowledges and agrees that this clause 30 shall not
      apply to any statement, representation or warranty made fraudulently or to
      any provision of this Agreement which was induced by, or otherwise entered
      into as a result of, fraud, for which the remedies shall be all those
      available under the law governing this Agreement.

31    COSTS

      Each party shall be responsible for all the costs and expenses incurred by
      it in connection with and incidental to the preparation and completion of
      this Agreement, the other documents referred to in this Agreement and the
      sale and purchase of the Business and Assets.

32    AMENDMENTS AND WAIVERS

32.1  No amendment or variation of the terms of this Agreement shall be
      effective unless it shall be made or confirmed in a written document
      signed by both Nice and Thales.

32.2  No delay in exercising or non-exercise by either party of its rights under
      or in connection with this Agreement shall operate as a waiver or release
      of that right. Rather, any such waiver or release must be specifically
      granted in writing signed by the party granting it.

33    SEVERABILITY


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<PAGE>

      If at any time any part of any provision of this Agreement shall be or
      become illegal, invalid or unenforceable in any respect under the law of
      any jurisdiction, then such provision shall be deemed to be severed from
      this Agreement and the remainder of the provisions of this Agreement shall
      remain valid and enforceable.

34    ASSIGNMENT

34.1  Save as otherwise provided, no party may assign any of its rights under
      this Agreement without the prior written consent of the others.

34.2  The parties agree that the benefits of this Agreement may be assigned (in
      whole or in part) by the Purchasers to, and may be enforced by, any member
      of the Purchasers' Group (an "Assignee"), which is the legal owner of the
      Business or Assets (save as provided in Clause 34.3) as if it were the
      relevant Purchaser under this Agreement.

34.3  Where the Purchasers or any member of the Purchasers' Group cease to hold
      at least 50% (fifty per cent.) of the entire issued share capital of an
      Assignee, the Purchasers shall procure that before they so cease, they
      shall assign the benefit of their rights under this Agreement to another
      continuing member of the Purchasers' Group.

35    CONTINUING EFFECT

      Each provision of this Agreement and any other documents referred to in it
      which is capable of being performed after but which has not been performed
      at or before Completion and all Warranties, indemnities, covenants and
      other undertakings and obligations contained in or entered into in
      accordance with


                                      130
<PAGE>

      this Agreement shall continue in full force and effect after Completion
      notwithstanding Completion.

36    COUNTERPARTS

      This Agreement may be entered into in any number of counterparts and by
      the parties to it on separate counterparts but shall not be effective
      until each party has executed at least one counterpart, each if which when
      so executed and delivered shall be an original, but all counterparts
      together shall constitute one and the same instrument.

37    GOVERNING LAW

      This Agreement shall be governed by and construed in accordance with
      English law and the parties submit to the non-exclusive jurisdiction of
      the English Courts in relation to any claim or matter arising out of this
      Agreement.

38    CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

      No person, who is not a party to any contract incorporating these
      conditions, shall have any rights under the Contracts (Rights of Third
      Parties) Act 1999 to enforce any term of that contract.

39    AGENT FOR SERVICE

39.1  Thales irrevocably appoints Thales Corporate Services Limited of 2
      Dashwood Lang Road, Bourne Business Park, Addlestone, Surrey KT15 2NE to
      be its agent for the receipt of Service Documents. It agrees that any


                                      131
<PAGE>

      Service Document may be effectively served on it in connection with
      proceedings in England and Wales by service on its agent effected in any
      manner permitted by the Civil Procedure Rules.

      39.1.1 If the agent at any time ceases for any reason to act as such,
            Thales shall appoint a replacement agent having an address for
            service in England or Wales and shall notify the other Purchasers of
            the name and address of the replacement agent. Failing such
            appointment and notification, the Purchasers shall be entitled by
            notice to Thales to appoint a replacement agent to act on behalf of
            Thales. The provisions of this Clause 39 applying to service on an
            agent apply equally to service on a replacement agent.

      39.1.2 A copy of any Service Document served on an agent shall be sent by
            post to Thales. Failure or delay in so doing shall not prejudice the
            effectiveness of service of the Service Document.

39.2  Nice irrevocably appoints Nice CTI Systems UK Limited of 8 The Square,
      Stockley Park, Uxbridge, Middlesex UB11 1FW to be its agent for the
      receipt of Service Documents. It agrees that any Service Document may be
      effectively served on it in connection with proceedings in England and
      Wales by service on its agent effected in any manner permitted by the
      Civil Procedure Rules.

      39.2.1 If the agent at any time ceases for any reason to act as such, Nice
             shall appoint a replacement agent having an address for service in
             England or Wales and shall notify the other Purchasers of the name
             and address of the replacement agent. Failing such appointment and


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<PAGE>

                notification, the Purchasers shall be entitled by notice to Nice
                to appoint a replacement agent to act on behalf of Nice. The
                provisions of this Clause 39 applying to service on an agent
                apply equally to service on a replacement agent.

        39.2.2  A copy of any Service Document served on an agent shall be sent
                by post to Nice. Failure or delay in so doing shall not
                prejudice the effectiveness of service of the Service Document.

39.3    "Service Document" means, for the purposes of this Clause 39 a claim
        form, application notice, order, judgment or other document relating to
        any proceedings.

40      Gross Payments

        If any amount payable to the Purchasers by Thales or by the Purchasers
        to Thales:

        (a)     in respect of or in connection with any Warranty being breached,
                untrue or misleading or any indemnity or undertaking; or

        (b)     under any other clause of this Agreement;

        is subject to Taxation, such additional amounts shall be paid to the
        Purchasers by Thales or by the Purchasers to Thales so as to ensure that
        the net amount received by the Purchasers or Thales is equal to the
        amount


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<PAGE>

      the Purchasers or Thales should have received had the payment not been so
      subject to Taxation.

41    Guarantee

      In consideration of Thales entering into this Agreement, Nice hereby
      unconditionally and irrevocably guarantees to Thales and to the Companies
      the performance by the Purchasers of their obligations under this
      Agreement and the payment of any liability of the Purchasers under this
      Agreement.

      EXECUTION

      The parties have shown their acceptance of the terms of this Agreement by
      executing it at the end of the Schedules.


                                      134
<PAGE>

     ATTESTATIONS

     Signed by                                 )
        /s/                                    )
     for and on behalf of                      )
     THALES SA                                 )
     in the presence of:                       )

     Signed by                                 )
         /s/                                   )
     for and on behalf of                      )
     Nice cti systems uk limited               )
     in the presence of:                       )

     Signed by                                 )
         /s/                                   )
     for and on behalf of                      )
     Nice systems sarl                         )
     in the presence of:                       )

     Signed by                                 )
        /s/                                    )
     for and on behalf of                      )
     NICE SYSTEMS GMBH                         )
     in the presence of:                       )

     Signed by                                 )
        /s/                                    )
     for and on behalf of                      )
     Nice systems inc.                         )
     in the presence of:                       )

     Signed by                                 )
        /s/                                    )
     for and on behalf of                      )
     NICE SYSTEMS Ltd                          )
     in the presence of:                       )

<PAGE>

                                                           EXHIBIT 4.3 SCHEDULES

                                   SCHEDULE 1

                                  THE COMPANIES

THALES CONTACT SOLUTIONS LIMITED

Place of Incorporation          :         England and Wales

Registered Number               :         560700

Registered Office               :         Western Road, Bracknell,
                                          Berkshire RG12 1RG
                                          England

THALES CONTACT SOLUTIONS S.A.

Place of Incorporation          :         France

Registered Number               :         B424442135 Versailles

Registered Office               :         18 avenue Dutartre
                                          78150 Le Chesnay
                                          France

THALES CONTACT SOLUTIONS INC.

Place of Incorporation          :          U.S.A. (Delaware)

Registered Number               :

Registered Office               :         480 Spring Park Place
                                          Suite 1000
                                          Herndon VA20170
                                          USA

THALES CONTACT SOLUTIONS GMBH

Place of Incorporation          :         Germany

Registered Number               :         HRB5492 Bergisch Gladbach

Registered Office               :         Technologie Park Bergisch Gladbach
                                          Friedrich-Ebert Strasse
                                          D-51429
                                          Bergisch Gladbach
                                          Germany

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<PAGE>

                                   SCHEDULE 2

                                  APPORTIONMENT



The Purchase Price will be allocated on a fair and reasonable basis on the
Completion Date and thereafter as follows:

     o    Intellectual Property is allocated a value of US$4,000,000 (four
          million dollars).

     o    The net tangible assets of the Business as at the Completion Date of
          each of TCSL, TCS Inc., TCSA, TCS GmbH shall be allocated at fair
          market value in US Dollars in each case based on the Conversion Rate
          on the Completion Date and the Initial Purchase Price allocated
          accordingly to each asset of the respective Thales selling entity.

     o    The CCTI stock will be valued at the nominal amount of US$1,000 (one
          thousand dollars).

     o    The CCTI Note will be valued at a nominal amount of US$1,000 (one
          thousand dollars).

     o    The remainder of the Initial Purchase Price and/or any adjustment
          thereto, shall be allocated to various intangible assets (Goodwill and
          Other Intangibles) and will be allocated 65% to the UK Purchaser and
          35% to the US Purchaser.

     o    The Earnout Consideration payable pursuant to Clause 7.8 of the
          Agreement will be allocated to Goodwill and will be allocated to and
          paid by Nice to:

                TCS Inc:                 85%

                Thales TRC Inc:          10%

                TCSL:                     5%


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<PAGE>

     o    Any other payments, including payments made in respect of warranties
          and/or indemnity claims, shall be treated in accordance with the then
          current generally accepted accounting principles.


     PAYMENT SHALL BE EFFECTED AS FOLLOWS:



     Item                        Seller                        Acquirer
     ----                        ------                        --------



     UK Business                 TCSL                          UK Purchaser

     French Business             TCSA                          French Purchaser

     German Business             TCS GmbH                      German Purchaser

     US Business                 TCS Inc.                      US Purchaser



     Business IPR                Thales Electronics PLC        Nice

     Cliffstone Shares           Thales TRC Inc.               UK Purchaser

     Cliffstone Note             Thales TRC Inc.               US Purchaser

     Earnout Consideration       TCS Inc.: 85%                 Nice: 100%

                                 Thales TRC Inc.: 10%

                                 TCSL: 5%



                                      123
<PAGE>

                                   SCHEDULE 3

                             THE BUSINESS PROPERTIES


PART 1 - LIST OF PROPERTIES

A - HEDGE END PROPERTY

     Tollbar Way
     Hedge End
     Southampton
     Hampshire
     SO30 2ZP


B - RELEVANT BUSINESS PROPERTIES

UNITED KINGDOM

     418/419,
     150 Minories
     London
     EC3N 1LS


UNITED STATES

1    480 Spring Park Place
     Suite 1000
     Herndon
     VA 20170

2    Part 35th Floor
     One Penn Plaza
     New York


FRANCE

1    18 avenue Dutartre
     78150 Le Chesnay
     France

2    14 Rue des Erables
     78150
     Rocquencourt
     France


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<PAGE>

GERMANY

1    Technologie Park Bergisch Gladbach
     Friedrich-Ebert Strasse
     D-51429 Bergisch Gladbach
     Germany

2    Buro Nr. 7
     Stock des Hauses Wittestr 30K
     13509
     Berlin


REPUBLIC OF IRELAND

     Arena House
     Arena Road
     Sandyford
     Dublin 18



THE NETHERLANDS

     Bedrijvencentrum Gadering
     Hoefsmidstraat
     319 4 AA Hoogvliet
     The Netherlands



SPAIN

     222, De La Calle Arturo Sonia
     Madrid
     Spain


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<PAGE>

PART 2 - HEDGE END PROPERTY SUBLEASE


1.     On or after Completion and subject to the provisions of the rest of this
       Schedule 3 Part 2 Thales shall procure the granting of by Thales
       Properties Limited and the Purchasers shall procure that the UK Purchaser
       shall take a sublease of the Hedge End Property in the agreed form
       subject to any variations or amendments agreed between the parties (both
       acting reasonably).


2.     Thales shall at its own expense use all reasonable endeavours to procure
       the written consent of the landlord and the superior landlord of the
       Hedge End Property (both hereinafter referred to as "the Hedge End
       Landlord") by deed to the granting of the sublease of the Hedge End
       Property referred to in paragraph 1 (the "Landlord's Consent") and will
       promptly make application for Landlord's Consent and will supply a copy
       of its application for Landlord's Consent to the UK Purchaser and will
       keep the UK Purchaser informed of progress with the application for
       Landlord's Consent.


3.     The UK Purchaser shall in connection with Thales' application for
       Landlord's Consent promptly supply such information including accounts
       and references and provide such assistance to Thales as may reasonably be
       required to ensure that Landlord's Consent can be obtained at the
       earliest practical date.


4.     The Purchasers shall in pursuance of the application for Landlord's
       consent procure that the UK Purchaser enters into direct covenants with
       the Hedge End Landlord in the form reasonably required by the Hedge End
       Landlord to pay the rents reserved by and observe and perform the
       covenants and conditions contained in the proposed sublease of the Hedge
       End Property and if reasonably so required the Purchasers will procure a
       guarantee from Nice for the purposes of Landlord's Consent (but for the
       avoidance of doubt no other or further guarantee or other form of
       security or payment) in respect of such obligations such guarantee to be
       in a form reasonably acceptable to the Hedge End Landlord.

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<PAGE>


5.     If the Hedge End Landlord refuses Landlord's Consent and the UK Purchaser
       wishes to remain in occupation of the Hedge End Property then:


5.1    Unless the UK Purchaser and Thales both agree that the Landlord is
       entitled to refuse consent, Thales shall procure that Thales Properties
       Limited will at the joint cost of Thales and of the UK Purchaser promptly
       apply to a court of competent jurisdiction for a declaration that the
       Landlord's Consent has been unreasonably refused and shall diligently
       pursue such proceedings and shall keep the UK Purchaser fully informed of
       its application to the court and of the court's decision and will not
       without the UK Purchaser's consent withdraw or settle such proceeding.


5.2    If the UK Purchaser and Thales are unable to agree whether the Landlord's
       Consent is being unreasonably refused then either party may at any time
       elect to refer the matter to a UK qualified barrister of not less than 10
       years' call and experience in property matters ("Counsel") for
       determination. The identity of such Counsel shall be agreed between the
       UK Purchaser and Thales both acting reasonably or in the absence of
       agreement as to the identity of Counsel the matter shall be referred by
       either party to the Chairman of the Bar Council or his duly appointed
       deputy who shall appoint Counsel to determine the issue. If Counsel's
       opinion is that there is a 50% or greater than 50% chance of success in
       an application for a declaration that the Landlord is unreasonably
       refusing consent then Thales shall procure that Thales Properties will
       apply to a court of competent jurisdiction for a declaration in
       accordance with the provisions of paragraph 5.1 above.

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<PAGE>

5.3    The fees of Counsel shall be shared equally between Thales and the UK
       Purchaser.


6.     The UK Purchaser shall be deemed to lease with full knowledge and notice
       in all respects of the actual state and condition of the Hedge End
       Property and shall take the same in that state and condition.


7.     Insofar as any of the obligations covenants or conditions relating to the
       Hedge End Property contained in this Agreement remain to be observed or
       performed this Agreement shall continue in full force and effect
       notwithstanding Completion.


8.     If Landlord's Consent has not been obtained on or before Completion the
       following provisions shall apply:


8.1    Thales and the Purchasers shall remain bound to each other in respect of
       the remaining provisions of this Agreement;


8.2    completion of the proposed sublease shall be postponed to the tenth
       Business Day after whichever is the later of:-


       8.2.1  receipt by Thales of Landlord's Consent;


       8.2.2  the provision of an engrossment of the agreed form of sublease for
              the Hedge End Property to the UK Purchaser or its solicitors; or


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<PAGE>

       8.2.3  grant of the Court Order referred to in paragraph 14.


9.1    If:


9.1.1  the Hedge End Landlord complains in writing about the occupation of the
       Hedge End Property by the UK Purchaser and requires the UK Purchaser to
       immediately vacate the Hedge End Property and threatens to take
       proceedings to recover possession of the Hedge End Property either party
       shall be entitled by giving at least 7 days' notice in writing to the
       other party (accompanied in the case of any notice served by Thales or
       Thales Properties by a copy of the Hedge End Landlord's letter requiring
       the UK Purchaser to vacate) at any time thereafter (but before Landlord's
       Consent is granted) electing to withdraw the Hedge End Property from this
       part of this Schedule of this Agreement; or


9.1.2  the UK Purchaser shall at any time prior to grant of Landlord's Consent
       serve at least 3 months' written notice of its desire to terminate this
       part of this Schedule to this Agreement; or


9.1.3  the Hedge End Landlord takes any steps to interfere with or prevent
       access to or use of the Hedge End Property by the UK Purchaser the UK
       Purchaser shall be entitled by giving at least one day's written notice
       to the other party to terminate this part of the Schedule of this
       Agreement.


       THEN upon expiry of the notice referred to in paragraph 9.1.1 9.1.2 or
       9.1.3 above (as appropriate) the provisions of this part 2 of Schedule 3
       of this Agreement shall cease and be of no further effect (but without
       prejudice to any antecedent breach of this Agreement) but the provisions
       of paragraph 9.2 shall apply.

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<PAGE>

9.2    Upon expiry of any notice served pursuant to paragraph 9.1.1 or 9.1.2 or
       9.1.3 above the following provisions shall apply:


9.2.1  Thales and the Purchasers shall be released from any obligation to
       complete the proposed sublease of the Hedge End Property (but without
       prejudice to any antecedent breach of this Agreement);


9.2.2  the Hedge End Property shall be promptly vacated and the UK Purchaser
       shall deliver it up with vacant possession to Thales in accordance with
       the terms of this Agreement and the UK Purchaser shall cease to be a
       licensee and shall as soon as reasonably practicable make good any damage
       caused by it or any of its licensees or visitors or agents to the Hedge
       End Property to Thales' reasonable satisfaction; and


9.2.3  the Purchasers shall forthwith remove any registration of this Agreement
       whether by way of caution or otherwise in any registers relating to the
       Hedge End Property.


10.    The following provisions of this paragraph shall apply in the case of the
       Hedge End Property with respect to the period from the date of Completion
       to whichever is the earlier of the date of the grant of the proposed
       sublease of the Hedge End Property and the date of exclusion of the Hedge
       End Property from this part of this Schedule of this Agreement under
       paragraph 9 (the relevant date being referred to in this paragraph and in
       paragraphs 11 and 13 below as "the End Date"):


10.1   the UK Purchaser shall enter the Hedge End Property and occupy it as
       licensee only according to the terms of this part of this Schedule of
       this Agreement;


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<PAGE>

10.2   from Completion to the End Date (both dates inclusive):


       10.2.1 the UK Purchaser shall be responsible for, and if necessary
              reimburse Thales against all rates water rates insurance service
              charges and other outgoings and also for all gas electricity and
              other services consumed at the Hedge End Property;


       10.2.2 the UK Purchaser shall pay to Thales Properties Limited an amount
              equal to the rent reserved and other payments payable under the
              proposed sublease of the Hedge End Property as and when the same
              fall due and shall observe and perform the covenants and
              conditions on the part of the tenant contained in the proposed
              sublease of the Hedge End Property (as far as consistent with a
              licence and so far as they are not inconsistent with the
              provisions of this Part 2 of Schedule 3 of this Agreement) and the
              terms of this part of this Agreement and shall indemnify Thales
              Properties Limited fully against all proceedings proper costs
              claims demands expenses loss and liability of whatsoever nature
              and howsoever arising out of any breach non-observance or
              non-performance of those covenants provided that the UK Purchaser
              shall only be required to pay value added tax upon production to
              it of a valid value added tax invoice containing the particulars
              prescribed in Regulation 14 of the Value Added Tax (General)
              Regulations 1995 (as amended);


       10.2.3 the UK Purchaser shall bear all third party public liability and
              employer's liability risks attached to the occupation and use of
              the Hedge End Property.


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       10.2.4 Thales shall procure that Thales Properties Limited shall observe
              and perform the conditions on the part of the lessor in the
              proposed sublease of the Hedge End Property (so far as consistent
              with a licence and so far as they are not inconsistent with the
              provisions of this Part 2 of Schedule 3 of this Agreement).


11.    The UK Purchaser shall in respect of the Hedge End Property from the date
       of completion until the End Date not purport to:


11.1   grant give issue or agree to grant give or issue any consent or approval;


11.2   vary or waive performance or observance or agree to vary or to waive
       performance or observance of any of the terms of any document relating to
       the Hedge End Property (except the proposed sublease);


11.3   serve any notice (whether contractual common law or statutory) on the
       Hedge End Landlord or issue any proceedings or take any step in any
       proceedings (provided that for the avoidance of doubt any proceedings
       issued or steps taken in any proceedings relating to a breach by Thales
       of its obligations under this Agreement and any steps taken in connection
       with any proceedings issued pursuant to paragraph 5 of this part of this
       Schedule shall not be deemed to be a breach of this paragraph 11.3); or


11.4   grant or agree to grant any lease licence or other document under which
       any person shall be entitled to occupy any part or parts of the Hedge End
       Property provided that the UK Purchaser shall be entitled to share
       occupation of the Hedge End Property with any


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       group company (as that expression is defined in section 42 of the
       Landlord and Tenant Act 1954) provided that no relationship of landlord
       and tenant is created by such sharing of occupation and provided that if
       the UK Purchaser vacates the Hedge End Property in any of the
       circumstances envisaged in paragraph 9.1 of this part of this Schedule it
       shall procure that any sharing company shall also vacate the Hedge End
       Property and provided that details of any such group company are notified
       to Thales before the commencement of such sharing.


12.1   The UK Purchaser shall promptly notify Thales Properties Limited in
       writing of any notice application registration or other communication
       which the UK Purchaser may give or receive in respect of the Hedge End
       Property (but excluding any value added tax election notices or
       acknowledgements served or received by the UK Purchaser).


12.2   Thales shall procure that Thales Properties Limited will notify the UK
       Purchaser in writing of any notice or application registration or other
       communication which Thales Properties Limited may give or receive in
       respect of the Hedge End Property.


13.    The UK Purchaser agrees with Thales Properties Limited in respect of the
       Hedge End Property for the period from the date of Completion up to the
       End Date it will:


13.1   not carry out any alteration or addition to the said Property nor change
       the existing use of the said Property provided that the UK Purchaser
       shall be entitled to reconfigure the Hedge End Property and carry out
       internal non structural alterations without consent but subject to first
       notifying Thales Properties Limited of the proposed works and subject to
       the UK Purchaser reinstating any works which it has carried out pursuant
       to this paragraph 13.1 to Thales' reasonable satisfaction if it is
       required or chooses to vacate the Hedge End Property in accordance with
       sub-paragraphs 9.1.1 or 9.1.2 or 9.1.3 hereof;


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13.2   not make any application for planning permission;


13.3   not make any application to the Hedge End Landlord (but provided that any
       steps which the UK Purchaser takes pursuant to this part of this Schedule
       3 in order to facilitate grant of Landlord's Consent shall not be
       considered a breach of this obligation);


13.4   promptly notify Thales in writing of any notice received of any breach or
       infringement or alleged or perceived breach or infringement of any
       obligation restriction stipulation condition right declaration or other
       matter relating to the Hedge End Property and of which breach or
       infringement or alleged or perceived breach or infringement the UK
       Purchaser or anyone authorised on behalf of the UK Purchaser has
       knowledge.


14.    Thales shall procure that Thales Properties Limited and the UK Purchaser
       shall at Thales' cost apply to the Court for an order excluding the
       security of tenure provisions of the Landlord and Tenant Act 1954 (as
       amended) in respect of the sublease of the Hedge End Property to be
       granted pursuant to paragraph 1 of this part of this Schedule and shall
       use all reasonable endeavours to obtain the same. The grant of the
       sublease is conditional on the relevant Court order being obtained.


15.    From the date of this Agreement until the date on which the Underlease
       dated 9 July 1998 between Whitbread plc (1) Archer Communications Systems
       Limited (2) and Racal Electronics plc (3)


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       ("the Underlease") has been assigned (with the Hedge End Landlord's
       written consent) to Thales Properties Limited Thales shall procure that
       Thales Properties Limited shall:


15.1   observe and perform the conditions on the part of the assignee pursuant
       to the Agreement for Assignment dated 12 March 2001 between Archer
       Communications Systems Limited (1) and Thales Properties Limited (2)
       ("the Agreement to Assign");


15.2   not rescind the Agreement to Assign pursuant to clause 6.1 of the
       Agreement to Assign or any variation thereof or otherwise terminate the
       Agreement to Assign;


15.3   not vary the Agreement to Assign without the consent of the UK Purchaser;


15.4   take all reasonable steps to procure such extension of the expiry date
       referred to in clause 6 of the Agreement to Assign as is sufficient in
       all the circumstances to enable assignment of the Underlease to Thales
       Properties Limited to take place.


16.    Thales shall at its own cost procure that Thales Properties Limited shall
       take all necessary steps and use all reasonable endeavours to obtain
       grant of a valid fire certificate in respect of the Hedge End Property as
       it exists at the date of Completion provided that Thales shall not be
       liable hereunder to obtain the grant of a valid fire certificate in
       respect of any alterations carried out to the Hedge End Property by the
       UK Purchaser.


                                      135
<PAGE>

DATED                                                                       2002
--------------------------------------------------------------------------------







                          THALES PROPERTIES LIMITED (1)







                              THE UK PURCHASER (2)







                                    NICE (3)






             ------------------------------------------------------



                                    SUBLEASE



                                       OF



                          OFFICE BUILDING AT HEDGE END

                               EASTLEIGH HAMPSHIRE



             -------------------------------------------------------


                                      136
<PAGE>

THIS SUBLEASE is made the            day of                                 2002

BETWEEN:

(1)    the Lessor THALES PROPERTIES LIMITED (Company number 1153834) whose
       registered office is at Western Road Bracknell Berkshire RG12 1RG and
       whoever for the time being owns the interest in the Premises which gives
       the right to possession of them when this Lease ends

(2)    the Lessee [THE UK PURCHASER] whose registered office is at [ ] and (so
       far as the law admits or allows) whoever for the time being is entitled
       to the Premises under this Lease and (if the Lessee is an individual) the
       Lessees Personal Representatives

(3)    the Guarantor [NICE] whose registered office is at [ ]



1.     DEFINITIONS


1.1    The following terms used in this Lease (with necessary variations) have
       the following meanings unless the context otherwise requires:-

"CONDUITS" means sewers pipes wires drains cables and other conducting media and
       ancillary equipment for the passage of Utilities

"THE HEADLEASE" means a Lease dated 19 July 1989 and made between Midland Bank
       Pension Trust Limited (1) and Whitbread & Company plc (2) as varied by a
       Deed of Variation dated 2 February 1995 and made between Midland Bank
       Pension Trust Limited (1) and Whitbread (2)

"THE INSURED RISKS" has the same meaning as is given to that expression in the
       Headlease

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"INTEREST" means interest at the rate of four per centum above the base rate of
         Bank of Scotland plc from time to time (or of such other London
         Clearing Bank as the Lessor may by notice in writing to the Lessee
         nominate from time to time) during the period from the date on which
         the expenditure is incurred or from which the interest is to run to the
         date of payment as well before as after any judgment

"THE INTERMEDIATE LANDLORD" means the Landlord under the Intermediate Lease and
         includes its successors in title (if any) its and their Superior
         Landlords

"THE INTERMEDIATE LEASE" means an Underlease dated 9 July 1998 between Whitbread
         plc (1) Archer Communications Systems Limited (2) and Racal Electronics
         plc (3)

"THE LESSOR'S SURVEYOR" means any suitably qualified chartered surveyor or
         firm appointed by or acting for the Lessor (including an employee of
         the Lessor) to perform the function of a Surveyor for any of the
         purposes of this Lease

"NOTICES" all notices required in this Lease shall be in writing addressed (in
         the case of notices to be served on a company) to the registered office
         of the party served and all demands shall be in writing

"THE PAINTING YEARS" means those years in which the Headlease requires the
         exterior and interior (as the case may be) of the Premises to be
         painted

"PERMITTED PART" means either a complete floor of the Premises (save for toilet
         staircases and corridors used in common) a complete wing of the
         Premises or a complete floor within a wing of the Premises (in each
         case save as aforesaid)

"THE PLANNING ACTS" means the Town & County Planning Act 1990 the Planning
         (Consequential Provisions) Act 1990 the Planning (Listed Buildings and
         Conservation Areas) Act 1990 the Planning (Hazardous Substances) Act
         1990 and all other legislation relating to town and country planning

"THE PREMISES" means the whole of the office building at Hedge End, Eastleigh
         being the whole of the premises comprised in the Intermediate Lease

"THE RENT" means from and including the Term Commencement Date the yearly rent
         of (pound)420,000 or such other aMOUNT as is payable as rent from time
         to time under this Lease following increase and review in accordance
         with Clause 6 of this Lease

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<PAGE>

"REVIEW DATE" means 24 June 2004 and 24 June 2009

"REVIEW  PERIOD" means each period on and from a Review Date to and including
       the date immediately before the next succeeding Review Date or (as the
       case may be) on and from the relevant Review Date to and including the
       date of expiry of the Term

"THE SPECIFIED USE" means use as offices

"THE SUPERIOR LANDLORD" means the landlord under the Headlease and includes its
       successors in title (if any) its and their superior landlords

"THE TERM" means a term from and including the Term Commencement Date to and
       including 19 June 2014 but subject always to the provisions for earlier
       termination herein contained

"THE TERM COMMENCEMENT DATE" means [                          ] 2002

"UTILITIES" means water gas electricity telephone drainage soil air heating and
       other services or utility supplies

1.2    References to any right exercisable by or permissions granted to the
       Lessor shall unless expressed to the contrary include the exercise of
       such right or permission by the Superior Landlord the Intermediate
       Landlord and those persons authorised by the Lessor or the Superior
       Landlord or the Intermediate Landlord respectively and unless otherwise
       expressed in this Lease any consent or permission required of the Lessor
       shall be deemed to include a requirement for and be conditional upon the
       issue of such consent or permission from the Superior Landlord and the
       Intermediate Landlord and the payment of their respective reasonable
       costs fees and disbursements (including Value Added Tax) for such consent

1.3    Any covenant by the Lessee not to do any act or thing shall include an
       obligation not to permit such act or thing to be done

1.4    Unless expressed to the contrary all rights of entry granted to the
       Lessee or reserved to the Lessor under this Lease shall be exercisable
       only at reasonable times and upon reasonable prior written notice (except
       in case of emergency when no notice need be given)

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<PAGE>

1.5    Where the context so admits or requires the singular shall include the
       plural and vice versa the masculine gender shall include the feminine and
       neuter genders and vice versa and where the Lessor or the Lessee or any
       Guarantor shall be two or more individuals expressed or implied to be
       made by or with any such individuals shall be deemed to be made by or
       with them jointly and severally

1.6    Any reference to statute whether specifically or in general shall include
       any statutory extension modification or re-enactment of it and all
       regulations by-laws directions or orders made under it or deriving
       validity from it

1.7    Paragraph and Schedule headings the index and the front sheet do not form
       part of this Lease and shall not be taken into account in the
       construction or interpretation of it

1.8    Unless expressly stated to the contrary nothing in this Lease confers on
       any one other than the parties to it any right pursuant to the Contracts
       (Rights of Third Parties) Act 1999


2.     DEMISE RENT AND TERM

       In consideration of the rent reserved and of the Lessees and the
       Guarantors covenants contained in this Lease the Lessor (at the request
       of the Guarantor) demises the Premises to the Lessee for the Term
       TOGETHER WITH the rights (in common with the Lessor and all others
       entitled to exercise such rights) specified in the First Schedule but
       RESERVING to the Lessor (in common with all others from time to time
       entitled to exercise such rights) the rights specified in the Second
       Schedule and SUBJECT to the matters referred to in Part II of the Third
       Schedule to the Headlease and to the matters contained in the Property
       and Charges Registers of Title Number HP389500 (so far as such matters in
       each case continue to affect the Premises and are capable of being
       enforced) the Lessee PAYING in each year the Rent clear of all deductions
       by equal quarterly payments in advance on the usual quarter days the
       first payment to be made on the day of 2002

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<PAGE>

3.     LESSEES COVENANTS

       The Lessee covenants with the Lessor as follows:-

3.1    RENT

                            To pay without any deduction or set off the Rent on
                            the days and in the manner mentioned in Clause 2

3.2    OUTGOINGS

                            To pay and indemnify and keep indemnified the Lessor
                            against all rates taxes charges assessments and
                            outgoings whatsoever (including but not limited to
                            Uniform Business Rate) during the Term assessed or
                            charged in respect of the Premises or any part of
                            them or on the owner or occupier of them whether or
                            not in the nature of those now in being (but
                            excluding any payable by the Lessor as a result of
                            any disposal of dealing with or ownership of the
                            Lessor's interest in this Lease or its receipt of
                            the rents)

3.3    PUBLIC UTILITIES

                            To pay and keep the Lessor indemnified against all
                            charges for Utilities used in the Premises during
                            the Term and the cost of the periodic rental of any
                            meters and other equipment supplied to the Premises
                            during the Term

3.4    STATUTORY REQUIREMENTS

       At the Lessee's expense (and to the reasonable satisfaction of the
       Lessor's Surveyor) to comply with the requirements of any present or
       future statutes and/or of any competent authority in respect of the
       Premises or their use whether by the owner or by the occupier of them and
       not to do any act or thing by reason of which the Lessor may under any
       such statutes and/or the requirements of any such authority incur or have
       imposed upon it or become liable to pay any levy penalty damages
       compensation costs charges or expenses and to keep the Lessor indemnified
       against all breaches of the provisions of such statutes and/or
       requirements and all costs damages and expenses incurred under them and
       produce to the Lessor such licences consents and other documents and
       evidence as the Lessor may reasonably require in order to satisfy itself
       that the provisions of this Clause 3.4 have been complied with in all
       respects

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<PAGE>

3.5    ALTERATIONS

                            Not to cut or maim any part of the Premises nor make
                            any addition improvement or alteration to the
                            Premises either external or internal whether
                            structural or otherwise PROVIDED THAT on obtaining
                            the written consent of the Lessor (such consent not
                            to be unreasonably withheld or delayed) the Lessee
                            may make additions or alterations to the interior of
                            the Premises of a non-structural nature PROVIDED
                            HOWEVER THAT any such consent shall in addition to
                            any other reasonable covenants contain (and if not
                            so contained shall be deemed to imply) a covenant
                            that if required the Lessee shall at the
                            determination of the Term reinstate and make good
                            the Premises as if such additions or alterations had
                            not been made and PROVIDED FURTHER that no such
                            consent shall be required for the installation or
                            removal of demountable partitioning

3.6    REPAIRS

       3.6.1  At all times during the Term to observe and perform the covenants
              and conditions as to repair on the part of the tenant contained in
              the Headlease (but subject always to the exceptions therein
              contained) and to indemnify the Lessor from and against any
              actions proceedings claims damages costs expenses or losses
              arising from any breach non-observance or non-performance of those
              covenants and conditions both during and at the end of the Term
              PROVIDED however that nothing in this Lease shall require the
              Lessee to put keep or hand back the Premises in any better state
              of repair decoration or condition than that subsisting at the date
              of this Lease as evidenced by the Schedule of Condition attached
              to the Intermediate Lease

       3.6.2  To be responsible for an make good any damage caused by the
              bursting or overflow or obstruction of any part of the water
              sanitary or

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<PAGE>

              heating installation in or serving the Premises arising as a
              result of any act or omission of the Lessee or its subtenants
              servants or agents

       3.6.3  To keep clean the windows in the Premises and to clean them at
              least once a month

3.7    DECORATION

              To paint with at least two coats of good quality paint or such
              other treatment as may be appropriate in a good and workmanlike
              manner all parts of the Premises usually painted or treated in
              each of the Painting Years all painting or treatment during the
              last three months of the Term to be first approved in writing by
              the Lessor (such approval not to be unreasonably withheld or
              delayed) and at the same time with every painting or other
              treatment throughout the Term to varnish colour or treat such
              parts of the Premises as are usually so treated

3.8    INSURANCE CHARGE, ITEMS OF COMMON USE ETC.

              To pay to the Lessor on written demand the whole of (a) the
              Insurance Charge payable under the Headlease (b) all reasonable
              costs and expenses properly incurred from time to time by the
              Intermediate Landlord under the provisions of paragraphs 5, 6,
              7.02 and 8 of the Fifth Schedule to the Headlease (save to the
              extent that any costs fees and expenses arising under those
              paragraphs relate to a breach consequent upon an act or omission
              of the Intermediate Landlord and/or the Superior Landlord) and (c)
              a fair and reasonable proportion to be reasonably determined by
              the Intermediate Landlord's Surveyor of any sums (including fees
              reasonably and properly incurred) which the Intermediate Landlord
              may properly expend for the repair painting lighting cleaning
              replacing renewal (where beyond reasonable economic repair)
              maintenance and preservation of all passage ways pavements roads
              areas Conduits party walls party structure fences or other
              conveniences belonging to or used or enjoyed in common between

                                      143
<PAGE>

              the Premises and adjoining or neighbouring land or premises
              together with an additional reasonable sum by way of the any
              administration charge payable by the Landlord to the Intermediate
              Landlord

3.9    ENTRY TO INSPECT ETC.

       3.9.1  To permit the Lessor with all necessary materials and equipment at
              reasonable times to enter the Premises to view their condition
              whereupon the Lessor may serve upon the Lessee notice specifying
              any breach of covenant for which the Lessee is liable under this
              Lease and if the Lessee shall not have rectified such breach
              within two calendar months after service of such notice or within
              such shorter period as may reasonably be specified by such notice
              the Lessor may without further notice enter the Premises to
              execute the works required to rectify such breach (and the Lessee
              shall give the Lessor all necessary facilities so to do) and the
              proper cost incurred by the Lessor in so doing together with
              Interest from the date such cost shall have been incurred to the
              date of payment shall be paid by the Lessee to the Lessor upon
              demand and shall be recoverable from the Lessee as a debt or (at
              the Lessor's option) as rent in arrear

       3.9.2  To permit the Lessor at reasonable times to enter the Premises to
              exercise any of the rights which the Lessor has under this Lease
              and for any other purpose connected with the Lessor's interest in
              the Premises including (but not limited to) inspection of the
              Health and Safety File referred to in Clause 3.17.13 and 3.21 the
              persons entering making good any damage caused to the Premises by
              such entry without unreasonable delay and provided that the Lessor
              causes as little interference or disturbance to the Lessee's
              business as reasonably possible the lessor shall not be liable to
              pay compensation in respect of the same to the Lessee

3.10   USE RESTRICTIONS

       3.10.1 Not to use the Premises or any part of them for any illegal or
              immoral purpose nor for any noisy or offensive trade or business
              nor

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              for anything which may become a nuisance or damage to the owners
              or occupiers of adjoining or neighbouring premises Provided that
              the provisions of this clause 3.10.1 shall not prevent the Lessee
              from using the Premises for what they normally use their premises
              for if the Lessee is not by doing so in breach of any of its other
              covenants in this Lease

       3.10.2 Not to discharge any trade or deleterious wastes or anything
              corrosive or harmful into the sewers nor anything but storm water
              and surface water into the surface water drains nor anything which
              may cause any obstruction or deposit in the sewers or drains
              serving the Premises and to take all reasonable precautions to
              prevent any leakage or escape of water or gas from the Premises

       3.10.3 Not to allow on the Premises anything which is or may be dangerous
              radioactive or explosive or specially combustible or inflammable

       3.10.4 Not to trade or display goods or (save as expressly provided by
              this Lease) erect or place signs or advertising material outside
              the Premises nor to cause any obstruction outside the Premises

       3.10.5 Not to use on the Premises any machinery (other than such machines
              as shall be reasonably necessary for the Specified Use) without
              the prior written consent of the Lessor and in particular (but
              without limiting the generality of these covenant) not to use on
              the Premises any coin or token operated gaming machines nor any
              equipment machinery or other thing which shall cause dangerous
              vibrations or overloading of the electrical circuits serving the
              Premises

       3.10.6 Not at any time at such a volume as to be obstructively audible
              outside the Premises to play in the Premises any musical
              instrument or sound reproducing amplifying or receiving equipment

       3.10.7 Not to erect any pole mast aerial wire or dish for receiving
              satellite transmissions upon the outside of the Premises or upon
              the inside of the Premises where visible from the outside save
              where the permitted use of the Premises necessarily requires the
              same and then only with the Lessor's prior written consent (not to
              be unreasonably withheld or delayed)

                                      145
<PAGE>

3.11   SPECIFIED USE

       Not to use the Premises except for the Specified Use 3.12 EASEMENTS ETC.

       To use all reasonable endeavours to prevent any easement or right
       benefiting the Premises from being obstructed or lost and not to allow
       any encroachment easement or right to be made acquired or attempted to be
       made or acquired over the Premises nor to acknowledge that any right
       enjoyed by the Premises is enjoyed by consent of any other person and to
       give immediate notice to the Lessor if any easement right or encroachment
       affecting or likely to affect the Premises shall be made or attempted and
       at the Lessor's request but the joint cost of the Lessee and the Lessor
       to take such steps as may be reasonably required to prevent or licence
       such easement right or encroachment failing which within a reasonable
       period the Lessor and others authorised by it may enter the Premises and
       take such steps and the reasonable cost properly incurred by the Lessor
       arising out of the Lessee's failure to take such steps together with
       interest shall be paid by the Lessee to the Lessor on demand

3.13   SIGNS ETC.

       Not to display any signs notices or advertisements in or on the Premises
       without the prior written approval in writing of the Lessor such approval
       not to be unreasonably withheld or delayed so long as the Lessee shall
       comply with the provisions of paragraph 15 of the Fifth Schedule to the
       Headlease

3.14   LETTING NOTICES

       To permit the Lessor to affix to the Premises (but so as not materially
       to obscure the windows or materially to interfere with or disturb the
       Lessee's permitted use of the Premises) a letting notice (during the last
       six months of the Term) and (at any time during the Term) a "for sale"
       notice which notices in either case (provided they do not interfere with
       or disturb the Lessee's permitted use of the Premises) shall not be moved
       removed or obscured and to permit persons with written authority from the
       Lessor or its agents on prior notice at reasonable times of the day to
       view the Premises

3.15   EXPENSES

                                      146
<PAGE>

       To pay all reasonable expenses (including professional fees and costs)
       properly incurred by the Lessor the Intermediate Landlord or the Superior
       Landlord and any of their respective professional advisers incidental to

       3.15.1 the preparation and service of notices under or in or in bona fide
              contemplation of proceedings under Sections 146 and/or 147 of the
              Law of Property Act 1925 and/or under the Leasehold Property
              (Repairs) Act 1938 notwithstanding that any right of re-entry or
              forfeiture may have been waived by the Lessor or any notice served
              on the Lessee may have been complied with or forfeiture is avoided
              otherwise than by relief granted by the Court

       3.15.2 the enforcement whether during or after the end of the Term of any
              of the Lessee's covenants and the preparation and/or service of
              all notices and schedules relating to breaches of the Lessee's
              covenants (including all inspections necessary for the preparation
              and/or service of such notices or schedules and/or for
              ascertaining compliance with them)

       3.15.3 all reasonable costs properly incurred in connection with all
              applications by the Lessee for any consent required under this
              Lease or any request made by the Lessee relating to the Premises
              whether under this Lease or otherwise and whether or not such
              consent is refused or such application withdrawn but not where the
              same is unlawfully or unreasonably withheld or delayed

       3.15.4 the recovery of any arrears of rent or other monies payable under
              this Lease

3.16   RETURN POSSESSION

       At the end of the Term (however it ends) to return possession of the
       Premises to the Lessor clean and in the state of repair and decoration in
       which this Lease requires the Lessee to keep them and having first
       replaced any Lessor's fixtures and fittings which may be missing or
       damaged with others of a similar kind and quality to the reasonable
       satisfaction of the Lessor's Surveyors and (unless the Lessor shall in
       writing have relieved the Lessee of such obligation) having removed or
       effaced all signs and having removed all tenants and trade fixtures

                                      147
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       and fittings and partitioning from and reinstated the Premises to their
       state and condition subsisting prior to the carrying out of any
       alterations or additions made during the Term and having made good to the
       Lessor's reasonable satisfaction and at the Lessee's expense any damage
       resulting from such removal and effacing and reinstatement and from the
       removal of any tenant's and trade fixtures and fittings

3.17   ASSIGNMENT, UNDERLETTING ETC.

       3.17.1 Not to assign or charge only part of the Premises

       3.17.2 Not to charge by way of fixed charge the whole of the Premises
              without the prior written consent of the Lessor (which shall not
              be unreasonably withheld in respect of a bona fide charge in
              favour of a clearing bank or other major financial institution)
              provided that no consent will be required for a floating charge
              over the whole

       3.17.3 Not to assign the whole of the Premises without the prior written
              consent of the Lessor (which it will not unreasonably withhold or
              delay) PROVIDED that the Lessor shall be entitled to withhold its
              consent (i) if it shall not be satisfied (acting reasonably) that
              the proposed assignee is of adequate financial standing and is
              capable of paying the rents payable under and observing and
              performing the Lessee's covenants and the conditions contained in
              this Lease and that the Lessor shall be entitled (ii) to require
              the Lessee to pay to the Lessor all rents and other ascertainable
              sums which shall have fallen due (unless they are the subject of a
              bona fide dispute) prior to the date of the assignment (iii) to
              require that the Lessee enter into a Deed in such form as the
              Lessor may reasonably require by which the Lessee shall guarantee
              payment of the rents and performance and observance of the
              Lessee's covenants and the conditions contained in this Lease by
              the proposed assignee so long as this Lease shall remain vested in
              the assignee such Deed being an Authorised Guarantee Agreement for
              the purposes of the Landlord and Tenant (Covenants) Act 1995 ("the
              1995 Act") (iv) to require that any proposed assignee shall before
              being allowed into occupation enter into direct obligations with
              the Lessor in a

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              form which the Lessor shall reasonably require and either (v) to
              require (if the Lessor shall reasonably so determine) that not
              more than two guarantors for that assignee reasonably acceptable
              to the Lessor shall enter into obligations by Deed in favour of
              the Lessor in the form set out in the Second Schedule to this
              Lease (mutatis mutandis) or (vi) (where no guarantee under (v) is
              given) to require (if the Lessor shall reasonably so determine)
              the proposed assignee to execute and deliver to the Lessor prior
              to the assignment a Rent Deposit Deed in such form and for such
              sum as the Lessor shall reasonably determine and pay by way of
              cleared funds the whole of the sum so determined

       3.17.4 Save for an underletting of the whole or a Permitted Part of the
              Premises in accordance with the following provisions of this
              Clause 3.17 or an assignment or charge in accordance with the
              preceding provisions of this clause 3.17 not to underlet share
              part with possession or occupation of or grant any licence or
              declare any trust in respect of the whole or any part of the
              Premises and not in any event to permit or create more than three
              occupancies in the Premises PROVIDED THAT the Lessee may permit
              any member of the same group of companies as the Lessee or of the
              Guarantor or any associated company to occupy the whole or part of
              the Premises without the consent of the Lessor so long as the
              relationship of landlord and tenant is not thereby created and so
              long as such occupation shall be terminated upon such member
              ceasing to be a member of such group or an associated company as
              aforesaid and provided that the Lessee shall keep the Lessor
              informed of the identity of all such occupiers of the Premises

       3.17.5 Not to underlet the whole or a Permitted Part of the Premises
              without the prior written consent of the Lessor (which shall not
              be unreasonably withheld) in the case of an underletting at the
              best rent reasonably obtainable for the premises being underlet
              without taking a fine or premium and containing (i) provisions for
              the upward review of the rent at the same dates as provided by
              this Lease and (ii) no provisions in

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                any way commuting rent and (iii) other obligations on the part
                of the underlessee consistent with and no less onerous than the
                obligations of the Lessee under this Lease (other than the
                covenant to pay the rent reserved by this Lease)

        3.17.6  That every underlease and sub-underlease whether mediate or
                immediate shall contain no less onerous restrictions on
                assignment underletting parting with possession sharing
                occupation and granting of licences and the same provisions for
                direct covenants and registration as are contained in this Lease

        3.17.7  To procure that any proposed underlessee shall before being
                allowed into occupation enter into a direct covenant with the
                Lessor to perform and observe all the Lessees covenants (other
                than the covenant to pay rent) and the conditions contained in
                this Lease so far as they relate to or affect the underlet
                premises and so long as the term to be created by such
                underlease shall remain vested in such underlessee and (if the
                Lessor shall so reasonably require) that respectable and
                responsible guarantors for such underlessee shall enter into
                covenants by Deed in favour of the Lessee and the Lessor in such
                form as the Lessor may reasonably require in the light of the
                proposed underlessee's liabilities

        3.17.8  Not to waive expressly or impliedly any of the covenants imposed
                in any underlease but upon any breach forthwith to use all
                reasonable endeavours to enforce those covenants

        3.17.9  To procure that any provisions for the review of rent under any
                underlease shall be pursued diligently and upon request to
                provide the Lessor with such information as it shall reasonably
                require in connection with such review

        3.17.10 To give the Lessor notice (and if the Lessor reasonably so
                requires at the Lessee's expense to procure that some other
                person or corporation acceptable to the Lessor executes a
                guarantee in such form as the Lessor shall reasonably require)
                within fifty six days of the death or bankruptcy during the Term
                of any person who has or shall have guaranteed to the Lessor the
                payment of the rent and the observance

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                and performance of the Lessees covenants under this Lease or of
                such person (being a company) suffering a receiver to be
                appointed or passing a resolution to wind up or entering into
                liquidation

        3.17.11 Not to reduce the rent payable nor to vary any of the provisions
                of nor to give any consent required under any permitted
                underlease without the previous written consent of the Lessor
                which shall not be unreasonably withheld or delayed where such
                consent if required under this Lease is not to be unreasonably
                withheld or delayed

        3.17.12 At the request of the Lessor to use its reasonable endeavours to
                terminate lawfully any underlease which is not permitted under
                this Lease

        3.17.13 Upon completion of each assignment of this Lease to deliver to
                the assignee the duplicate of any Health and Safety File for the
                Premises prepared under the Construction (Design and Management)
                Regulations 1994 ("the CDM Regulations") complete and fully up
                dated and obtain a written acknowledgement from the assignee of
                receipt of such duplicate and of its understanding of the nature
                and purpose of the File and promptly to produce to the Lessor a
                true copy of such acknowledgement

        3.17.14 To procure that before the grant of any underlease of THE
                PREMISES OR a Permitted Part a court order is obtained under the
                provisions of Section 38(4) of the Landlord and Tenant Act 1954
                (as amended by Section 5 of the Law of Property Act 1969)
                excluding the provisions of Sections 24-28 inclusive of that Act
                in relation to the proposed underlease (the agreement excluding
                those provisions being contained in the proposed underlease) and
                that a certified copy of the order is supplied to the Lessor

3.18    REGISTRATION

        3.18.1  Within fourteen days after any assignment of this Lease to give
                written notice to the Lessor of the name and address of the
                party to whom all future demands for rent and other moneys
                payable under this Lease are to be addressed and within
                twenty-one days after any assignment

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                charge by way of fixed charge underlease or devolution of the
                Premises or any part of them or any interest in them (including
                the surrender or forfeiture of any underlease) or change of name
                of the Lessee or any guarantor to give notice of such event in
                writing to the Solicitors for the time being of the Lessor and
                to provide them with a certified copy of the document effecting
                such event and to pay to such Solicitors a registration fee
                of(pound)25.00 or such larger sum as such Solicitors shall
                reasonably require

         3.18.2       Within 21 days after the rent payable upon review of rent
                      in any underlease of the Premises or any part of them
                      shall have been ascertained (whether by agreement
                      arbitration or otherwise) to notify the Lessor in writing
                      of the rent so ascertained and deliver to the Lessor a
                      certified copy of the award of any arbitrator or expert
                      engaged in connection with such review and as soon as
                      practicable thereafter a memorandum recording the revised
                      rent signed by or on behalf of the parties to such review

3.19    NOTICES

        At the Lessees expense to comply with any notice order proposal
        requisition direction or other thing received from a competent authority
        and affecting or likely to affect the Premises their use or their owner
        or occupier or the Lessors interest in the Premises and forthwith to
        deliver to the Lessor a copy of such notice order proposal requisition
        direction or other thing and at the reasonable request of the Lessor to
        make or join with the Lessor in making such objections and
        representations against or in respect of any such matters as the Lessor
        shall reasonably deem expedient

3.20    NOT TO OVERLOAD ETC.

        Not to erect on or suspend from the Premises or any part of them
        anything which will or may overload any floor wall roof or any other
        part of the structure or structural frame of the Premises

3.21    COMPLIANCE WITH STATUTE

        Without prejudice to the general terms of Clause 3.4 at all times during
        the Term to comply at the Lessee's expense with the provisions of any
        relevant legislation

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        for the time being in force including the Town & County Planning Act
        1990 and Safety at Work etc. Act 1974 the Factories Act 1961 the Offices
        Shops and the Railway Premises Act 1963 The Fire Precautions Act 1971
        the CDM Regulations the Public Health Acts and the Clean Air Acts and
        with any regulations or orders made and all licences consents and
        conditions granted or imposed under such legislation so far as the same
        relate to or affect the Premises or their use their owner or occupier or
        the Lessors interest in them and as often as occasion shall require to
        obtain at the Lessee's expense all such licences and consents as may be
        necessary under such legislation for any use of or permitted
        improvements alterations or additions to the Premises and not to do or
        omit on or about the Premises any act or thing by reason of which the
        Lessor may under any such legislation incur or become liable to pay any
        levy penalty damages compensation costs charges or expenses and at all
        times during the Term to ensure that the Lessor and the Health and
        Safety Executive are promptly notified of any changes to the Health and
        Safety File in respect of the Premises prepared under the CDM
        Regulations (the Lessee being (as it hereby acknowledges) "the client"
        for the purposes of those Regulations) so that in particular the Lessor
        can satisfy itself that the original of any such File maintained by it
        is complete and up to date and to keep the Lessor fully indemnified
        against all proceedings costs expenses and demands in relation to any
        such matters and to produce to the Lessor such licences consents and
        other documents and evidence as the Lessor may reasonably require in
        order to satisfy itself that the provisions of this Clause 3.21 have
        been complied with in all respects

3.22    PLANNING

        3.22.1  Not to apply for nor procure the application by any third party
                for any planning consent (which expression shall include any
                outline or detailed consent or any approval of reserved matters
                or any appeal to the Secretary of State for the Environment)
                relating to the Premises (whether or not in conjunction with
                other premises) without the Lessor's prior written consent which
                shall not be unreasonably withheld or delayed in respect of any
                matter in relation to which the Lessor's consent is not under
                the other provisions of this Lease to be unreasonably withheld
                or delayed

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        3.22.2  As soon as practicable after the grant of planning consent to
                the Lessee to give to the Lessor a full copy of it and of the
                application for it and its supporting drawings and
                specifications and calculations (if any)

        3.22.3  Unless the Lessor shall otherwise direct the Lessee shall carry
                out or cause to be carried out before the end of the Term any
                works stipulated to be carried out to the Premises by a date
                later than the end of the Term as a condition of any planning
                consent which may have been implemented by the Lessee during the
                Term

        3.22.4  To produce to the Lessor such plans documents and evidence as
                the Lessor may reasonably require in order to satisfy itself
                that the provisions of this Clause 3.22 have been complied with
                in all respects

3.23    VALUE ADDED TAX

        Where by virtue of any of the provisions of this Lease the Lessee is
        required to pay or repay to the Lessor or to any other person any costs
        fee charge or expense or other sum in respect of the supply of any goods
        or services by the Lessor or any other person (including for the
        avoidance of doubt any rent payable hereunder) then save where the
        Lessor is entitled to recover the same the Lessee shall also be required
        to pay and shall keep the Lessor and such other person indemnified
        against the amount of any Value Added Tax which may be chargeable in
        respect of such supply or which the Lessor may elect to charge in
        respect of it PROVIDED THAT a valid Value Added Tax invoice containing
        the particulars prescribed in Regulation 14 of the Value Added Tax
        (General) Regulations 1995 (as amended) is rendered to the Lessee in
        respect of the supply of any goods or services by the Lessor

3.24    INDEMNITY

        To indemnify the Lessor against all liability and costs (including any
        increase in insurance premium) in respect of any breach of covenant on
        the part of the Lessee or any works carried out at any time during the
        Term to the Premises by the Lessee anything now or during the Term
        attached to or projecting from the Premises any act neglect or omission
        by the Lessee or any underlessee or by their respective servants or
        agents or by any persons in the Premises with the

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        actual or implied authority of any of them or out of infringement
        disturbance or destruction during the Term by the Lessee of any right or
        easement

3.25    INFORMATION

        To provide within fourteen days of receipt of a written request from the
        Lessor such information as the Lessor may reasonably require as to the
        occupation of the Premises including details of all underlettings and
        licences granted by the Lessee and the full names and addresses of all
        persons in actual or deemed possession of the Premises and each and
        every part of them

3.26    NOTIFY DAMAGE

        Immediately upon becoming aware of it to give written notice to the
        Lessor of any damage to the Premises caused by any of the Insured Risks
        and of any defect in the Premises which if not remedied might give rise
        to any third party claim or to any obligation on the Lessor to do or
        refrain from doing any act or thing to comply with any legal duty of
        care and at all times to display and maintain on the Premises all
        notices which the Lessor may from time to time reasonably require to be
        displayed but which shall not be required to be displayed in such a
        position as to interfere with the Lessee's business

3.27    BAILIFF'S FEES

        To pay all fees properly incurred by the Lessor to any bailiff
        instructed by the Lessor for the collection of any rent or other sum due
        under this Lease

3.28    FIRE FIGHTING EQUIPMENT AND SECURITY

        3.28.1  To keep the Premises supplied and equipped with all fire
                fighting and extinguishing appliances from time to time required
                by law or required by the insurers of the Premises such
                appliances being kept open to inspection and properly maintained
                and not to obstruct the access to or means of working such
                appliances or the means of escape from the Premises in case of
                fire

        3.28.2  To take expeditiously all requisite steps to obtain any
                necessary fire certificate for the Premises

        3.28.3  To ensure that at all times the Lessor has written notice of the
                name and address and telephone number of at least one keyholder
                of the Premises

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        3.28.4  At any time that the Premises or any part of them is unoccupied
                to take all reasonable precautions to prevent vandalism theft
                and unlawful occupation

3.29    INTERMEDIATE LEASE

        Not to do omit suffer or permit in relation to the Premises any act or
        thing that would or might cause the Lessor to be in breach of the
        Intermediate Lease or that if done omitted suffered or permitted by the
        Lessor would or might constitute a breach of the covenants on the part
        of the tenant and the conditions contained in the Intermediate Lease and
        to observe the covenants referred to in the Property and Charges
        Register of title HP389500 (so far as aforesaid) and to indemnify the
        Lessor against all actions claims costs expenses and liabilities in
        respect of them

4.      LESSOR'S COVENANTS

        The Lessor covenants with the Lessee as follows:

4.1     QUIET ENJOYMENT

        That the Lessee paying the rent and other monies payable under and
        observing and performing the Lessee's covenants and stipulations
        contained in this Lease shall peaceably hold and enjoy the Premises
        during the Term without any interruption by the Lessor or any person
        rightfully claiming by through under or in trust for it or by title
        paramount

4.2     HEADLEASE

        4.2.1   To pay the rents reserved by the Intermediate Lease and to
                perform and observe the tenants covenants and conditions
                contained therein insofar as the Lessee is not liable for such
                performance under the covenants on its part contained in this
                Lease and to indemnify the Lessee against all actions costs
                claims expenses and liabilities in respect of any breach of this
                covenant

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        4.2.2   On the request and at the reasonable cost of the Lessee to use
                all reasonable endeavours to enforce the covenants on the part
                of the Intermediate Landlord contained in the Intermediate Lease

        4.2.3   To use all reasonable endeavours at the cost of the Lessee to
                obtain the consent of the Intermediate Landlord whenever the
                Lessee makes application for any consent required under this
                Sublease and such consent is also required pursuant to the
                provisions of the Intermediate Lease

        4.2.4   To provide on request details of the insurance maintained by the
                Superior Landlord (or the Lessor as the case may be) in respect
                of the Premises and to use reasonable endeavours to procure that
                the interest of the Lessee is noted on the policy of insurance
                whether by specific or general indorsement

4.3     Unless otherwise directed in writing by the Lessee or its successors in
        title or unless the Lessee or its successors in title no longer has any
        legal interest in the Premises at the time of service of the notice
        herein referred to the Lessor hereby covenants that it will not serve
        notice to terminate the Intermediate Lease pursuant to Clause 7(2) of
        the Intermediate Lease and that it will procure that upon any assignment
        of the interest of the Lessor as tenant under the Intermediate Lease the
        assignee will enter into a covenant in identical terms to this covenant
        directly with the Lessee or its successors in title

5.      PROVISOS

        PROVIDED ALWAYS and it is agreed between the parties as follows:

5.1     INTEREST

        That if the rent or any part of it shall at any time be unpaid within 7
        days of the due date or any other monies due by the Lessee to the Lessor
        shall at any time be unpaid within fourteen days of the due date
        (whether in respect of rent any formal demand shall have been made or
        not) then the Lessee shall on demand pay to the Lessor in addition
        Interest on such sum for the period from the date when such sum became
        due to the date of payment to the Lessor

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5.2     FORFEITURE

        That

        5.2.1   if the rent or any part of it or any Interest payable or any
                other monies due by the Lessee to the Lessor shall at any time
                be unpaid for twenty one days (whether in respect of rent any
                formal demand shall have been made or not) or

        5.2.2   if the Lessee shall fail to perform or observe any of its
                covenants or stipulations in this Lease or

        5.2.3   if the Lessee for the time being shall be wound up or an
                administration order made against it/him or is adjudged bankrupt
                or enters into liquidation (except voluntarily for the purpose
                of amalgamation or reconstruction) or suffer a Receiver or an
                Administrative Receiver or a Receiver and Manager to be
                appointed or become subject to an administration order under the
                Insolvency Act 1986 or enter into an agreement or composition
                for the benefit of its creditors or have a receiving order made
                against him

        then it shall be lawful for the Lessor or any persons duly authorised by
        it to forfeit this Lease by entering the Premises or any part of them
        and the Term shall thereupon absolutely cease and be of no further
        effect but without affecting any liability in respect of any breach of
        any of the Lessee's or guarantor's covenants which shall already have
        accrued

5.3     EXCLUSION OF WARRANTY

        Nothing in this Lease or in any consent granted by the Lessor under this
        Lease shall imply or warrant that the Premises may be used for the
        purpose permitted by this Lease so far as concerns any statutes relating
        to town and country planning or that any alterations or additions or
        other works to the Premises which the Lessor may permit under the
        provisions of this Lease will not require planning permission and it is
        agreed that in entering into this Lease the Lessee does not rely on any
        such warranty given by the Lessor or by any person on its behalf

5.4     LESSEE'S EFFECTS

        The Lessee hereby irrevocably appoints the Lessor to be its agent to
        store or dispose of any effects left by the Lessee on the Premises after
        the end of the

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        Term on such terms as the Lessor thinks fit and without the Lessor being
        liable to the Lessee save to account for the net proceeds of sale less
        the cost of storage (if any) and any other expenses reasonably incurred
        by the Lessor PROVIDED THAT the Lessee will indemnify the Lessor against
        any liability incurred by it to any third party whose property shall
        have been sold by the Lessor in the mistaken belief (which shall be
        presumed unless the contrary be proved) that such property belonged to
        the Lessee and was liable to be dealt with as such pursuant to the
        provisions of this clause 5.4

5.5     ACCEPTANCE OF RENT

        5.5.1   The demand for and/or acceptance of any of the rents reserved by
                or any other monies due under this Lease by the Lessor or its
                agents shall not constitute or be deemed a waiver of any of the
                Lessees or any guarantors or subtenants covenants nor of any
                breach of such covenants or of any of the conditions contained
                in this Lease or in any Underlease or of any of the Lessor's
                remedies in respect of such breach and neither the Lessee nor
                any guarantor nor any subtenant shall in any proceedings for
                forfeiture plead or otherwise propose any such demand or
                acceptance as a waiver by the Lessor or as a defence for the
                Lessee guarantor or such sub-tenant (as the case may be)

        5.5.2   If the Lessor shall (by virtue of its reasonable belief that the
                Lessee or any guarantor or any subtenant is in breach of
                covenant or condition or might acquire against the Lessor any
                right or entitlement not expressly hereby granted) refrain from
                demanding or accepting rent or any other moneys due under this
                Lease then Interest shall be payable by the Lessee upon such
                rent or moneys for the period during which the Lessor shall so
                properly refrain

5.6     NOTICES

        Any notice required to be served on any party shall be sufficiently
        served if it is sent by recorded delivery or registered post in a
        stamped envelope addressed to the Lessee Lessor or any guarantor at its
        registered office or address for service in the United Kingdom but if
        there shall be no such address at its last known place of abode or
        business and if sent by recorded delivery or registered post

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        such service shall be deemed to be made on the working day following the
        date of posting

5.7     RENT SUSPENSION

        In the event of the Premises or any part of them at any time during the
        Term being damaged or destroyed by any of the Insured Risks (as that
        expression is defined in the Headlease) in respect of which the Lessor
        or the Intermediate Landlord or the Superior Landlord (as appropriate)
        is indemnified under insurance of the Premises so as to render the
        Premises incapable of occupation and use then (save to the extent that
        the insurance moneys become irrecoverable through any act or default of
        the Lessee or any person under its control) the rent reserved by this
        Lease or a fair proportion of it according to the nature and extent that
        the Premises shall be incapable of occupation and use shall be suspended
        until either the Premises shall again be capable of use and occupation
        or for a period ("the Rent Insurance Period") equal to the number of
        years for which insurance against loss of rent has been effected under
        the Superior Landlord's covenant in the Headlease (whichever is the
        shorter period)

5.8     LESSOR'S LIABILITY

        In any case where the facts are or should reasonably be known to the
        Lessee the Lessor shall not in any event be liable to the Lessee in
        respect of any failure of the Lessor to perform any of its obligations
        to the Lessee hereunder whether express or implied unless and until the
        Lessor has or ought reasonably to have become aware of the facts giving
        rise to the failure and the Lessor has failed within a reasonable time
        to remedy the same

5.9     HEADLEASE RENT REVIEWS

        The Lessee shall subject to the prior approval of the Lessor and of the
        Intermediate Landlord (such approval not to be unreasonably withheld or
        delayed) at its own expense act as the agents for the Lessor and the
        Intermediate Landlord in conducting the review of rent under the
        Headlease at 24 June 2004 and 24 June 2009 and in doing so the Lessee
        shall keep the Lessor and the Intermediate Landlord informed at all
        times of the progress of and all material aspects of all negotiations
        between the Lessee and the Superior Landlord and/or their respective
        surveyors or agents and shall give full and

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        proper consideration to all proposals observations and arguments in
        respect of such reviews as the Lessor or the Intermediate Landlord may
        make or raise and shall put (or procure to be put) such proposals
        observations and arguments to the Superior Landlord and/or its surveyors
        or agents or to any independent expert appointed to determine the review
        of rent under the Headlease PROVIDED that the Lessee shall not settle
        such reviews of rent or agree any rent payable following such reviews
        without the prior express written approval of the Lessor and of the
        Intermediate Landlord (such approval not to be unreasonably withheld or
        delayed)

5.10    Exclusion of Landlord and Tenant Act 1954

        Having been authorised so to do by an Order of the [ ] County Court
        dated the [ ] day of [ ] 2002 under the provisions of section 38(4) of
        the Landlord and Tenant Act 1954 the Lessor and the Lessee hereby agree
        that the provisions of sections 24-28 of the said Act shall be excluded
        in relation to the tenancy hereby created

6.      RENT INCREASE AND REVIEW

6.1     During each Review Period the Lessee shall pay to the Lessor in each
        year rent being whichever is the greater of a sum equal to the rent
        payable immediately prior to the relevant Review Date or such reviewed
        rent as may be agreed or determined as provided below (whichever is the
        greater)

6.2     The Rent shall be reviewed in accordance with the provisions of
        paragraphs 3 to 5 of Part 1 of the Fourth Schedule of the Headlease
        which provisions shall be incorporated in this Lease as if the same were
        set out herein in extenso so that references in those provisions to "the
        Landlord" and "the Tenant" after such incorporation are references to
        the Lessor and the Lessee in this Lease but with the following
        modifications:

                6.2.1   "the Review Date" and "the Review Period" are defined as
                        set out in clause 1.1 6.2.2 In the definition of the
                        "Market Rent":

                6.2.2.1 "12 years" shall be substituted for "25" years in line 8

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                6.2.2.2 references to "this Lease" mean this Sublease

                6.2.2.3 in disregard (d) the words "or the Superior Landlord or
                        the Intermediate Landlord" shall be added after "the
                        Landlord"

                6.3     The expression "the Rent" shall be substituted for the
                        expression "the Rent under this part of this Schedule"

7.      OPTIONS TO TERMINATE LEASE

7.1     If by damage or destruction by an Insured Risk (as that expression is
        defined in the Headlease) the Premises or a substantial part of them
        shall at any time be rendered unfit for occupation or use for the
        Specified Use or inaccessible and the Premises shall not have been
        reinstated and rendered capable of occupation for the Specified Use by
        three months before the end of the Rent Insurance Period then either
        party may thereupon determine the Term and this Lease by not less than
        three calendar months notice in writing to that effect served upon the
        other and upon the expiration of such notice this Lease and the Term
        shall cease and be of not further effect (but without affecting the
        liability of the Lessor or the Lessee for any breach of covenant which
        shall already have accrued) PROVIDED that no such notice shall be valid
        if served more than five weeks after the expiration of the Rent
        Insurance Period or if at that date of service or expiration of such
        notice the Premises shall in fact have been so reinstated and rendered
        capable of occupation and use for the Specified Use and PROVIDED that
        any insurance monies payable under the policy of insurance for the
        Premises shall be paid to and belong to the Lessor or the Superior
        Landlord (as the case may be) for its own use

7.2     If the Lessee shall desire to terminate this Lease at any time during
        the period of 12 months after the Term Commencement Date (but on no
        other date) and shall have served on the Lessor not less than 3 calendar
        months prior written notice of such desire this Lease shall upon expiry
        of the notice served by the Lessee cease and absolutely determine (but
        without prejudice to any rights or claims in respect of any subsisting
        breach of covenant) and the Lessee shall deliver up to the Lessor full
        vacant possession of the Premises and materially in accordance with the
        covenants on the part of the Lessee hereinbefore contained

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8.      GUARANTOR'S COVENANTS

        The Guarantor in consideration of the grant of this Lease to the Lessee
        at the request of the Guarantor covenants with the Lessor in the manner
        set out in the Second Schedule

IN WITNESS whereof the parties have executed this Lease as their Deed the day
and year first before written

                               THE FIRST SCHEDULE
                                     PART I
                                 RIGHTS GRANTED
The rights granted by the Second Schedule to the Headlease


                                     PART II
                                 RIGHTS RESERVED
The exceptions and reservations contained in the Third Schedule to the Headlease



                               THE SECOND SCHEDULE
                                    GUARANTEE

The Guarantor guarantees to and covenants with and for the benefit of the Lessor
(which expression shall for the purpose of this guarantee and covenant include
the Lessor's successors in title to the reversion without the need for express
assignment)

1.      that the Lessee (here meaning [ ]) will at all times (a) until a
        permitted assignment of this Lease by the Lessee pay the rent and all
        other sums agreed to be paid by the Lessee when due and will also duly
        perform and observe its covenants and the stipulations in this Lease and
        (b) after a permitted assignment of this Lease duly perform and observe
        its covenants and the stipulations contained in any Deed which the
        Lessee shall enter into under

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        the terms of Clause 3.17.3 of this Lease ("an Authorised Guarantee
        Agreement") and that the Guarantor will if the Lessee shall make any
        default in payment of such rent or any other sums or in the performance
        and observance of such covenants and stipulations pay the rent and
        monies and observe or perform the covenants or stipulations in respect
        of which the Lessee shall be in default and will make good to and
        indemnify the Lessor in respect of all losses damages liability costs
        and expenses sustained by the Lessor through the default of the Lessee
        PROVIDED ALWAYS that the liability of the Guarantor shall be no greater
        than the liability of the Lessee to the Lessor in respect of the act or
        default giving rise to the liability and any neglect or forbearance of
        the Lessor in endeavouring to obtain payment of the rent or other monies
        when the same become due or any refusal by the Lessor to accept rent
        tendered by or on behalf of the Lessee at a time when the Lessor may be
        entitled (or would after service of a notice under Section 146 of the
        Law of Property Act 1925 be entitled) to re-enter the Premises or any
        delay by the Lessor in taking any steps to enforce performance or
        observance of the said covenants or stipulations and any time or
        indulgence which may be given by the Lessor to the Lessee or the fact
        that the reversion to this Lease may have been assigned or that the
        Lessee may have ceased to exist or be under any legal limitation or any
        immunity disability or incapacity or any other act or thing (save for
        the provisions of the 1995 Act) whereby but for this provision the
        Guarantor would have been released shall not release or in any way
        lessen or affect the liability of the Guarantor under this guarantee

2.      that if the Lessee shall enter into liquidation or become bankrupt and
        the liquidator or trustee shall disclaim or surrender this Lease or if
        this Lease shall be forfeited or if the Lessee shall cease to exist then
        the Guarantor will be required by the Lessor in writing within three
        months after such disclaimer or other event accept from the Lessor a
        lease of the Premises for a term equal to the residue of the Term
        unexpired at the date of such disclaimer or other event and containing
        the same rent covenants provisos and other terms as this Lease shall
        execute and deliver to the Lessor a counterpart and shall pay the
        reasonable and proper costs of such new lease

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3.      that if for any reason the Lessor does not require the Guarantor of any
        of them to accept a new lease of the Premises as mentioned above then
        the Guarantors shall pay to the Lessor on demand an amount equal to the
        rent reserved by and other sums payable under this Lease at the date of
        such disclaimer or other event for the period commencing with such date
        and ending of whichever is the earliest of the following dates:

                3.1     the expiration of six calendar months after such date
                3.2     the expiration of the Term
                3.3     the date (if any) upon which the Premises shall be
                        re-let


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                                   SCHEDULE 4

                                   WARRANTIES

                                     PART 1



1       CAPACITY OF THALES AND THE COMPANIES

1.1     Thales and each of the Companies are duly organised and validly existing
        under all applicable laws.

1.2     Thales and the Companies have the requisite power and authority to enter
        into and perform this Agreement and the other documents which are to be
        executed by each of them pursuant to this Agreement (the "Thales
        Completion Documents").

1.3     The Thales Completion Documents will, when executed by Thales and each
        of the Companies constitute binding obligations of Thales and each of
        the Companies in accordance with their respective terms.

1.4     The execution and delivery of, and the performance by Thales and each of
        the Companies of their respective obligations under the Thales
        Completion Documents will not:

        1.4.1   result in a breach of, or constitute a default under, any
                instrument to which Thales or any of the Companies is a party or
                by which Thales or any of the Companies is bound; or

        1.4.2   result in a breach of any order, judgment or decree of any court
                or governmental agency to which Thales or any of the Companies
                is a party or by which Thales or any of the Companies is bound;
                or

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        1.4.3   require the consent of the shareholders of Thales or any of the
                Companies or of any other person; or

        1.4.4   require Thales or any of the Companies to obtain any consent or
                approval of, or give any notice to or make any registration
                with, any governmental or other authority which has not been
                obtained or made at the date hereof both on an unconditional
                basis and on a basis which cannot be revoked (save pursuant to
                any legal or regulatory entitlement to revoke the same other
                than by reason of any misrepresentation or misstatement).


        OVERSEAS OPERATIONS


1.5     The description of the overseas operations of the Business set out in
        the Disclosure Letter is a true and accurate description of the overseas
        operations of the Business.



2       FINANCIAL


2.1     The Accounts of TCSL have been prepared in accordance with the
        requirements of all relevant statutes and with generally accepted
        accountancy principles and practice applicable or prevailing in the
        United Kingdom and show a true and fair view of the assets and
        liabilities of TCSL and of its profits or loss for financial period
        ending on the Accounting Date.


2.2     The Accounts of TCSA have been prepared in accordance with the
        requirements of all relevant statutes and with generally accepted
        accountancy principles and

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        practice applicable or prevailing in France and show a true and fair
        view of the assets and liabilities of TCSA and of its profits or loss
        for the financial period ending on the Accounting Date.


2.3     The Accounts of TCS GmbH have been prepared in accordance with the
        requirements of all relevant statutes and with generally accepted
        accountancy principles and practice applicable or prevailing in Germany
        and show a true and fair view of the assets and liabilities of TCS GmbH
        and of its profits or loss for the financial period ending on the
        Accounting Date.


2.4     The Accounts of TCS Inc. have been prepared in accordance with the
        requirements of all relevant statutes and with generally accepted
        accountancy principles and practice applicable or prevailing in the
        United States of America and show a true and fair view of the assets and
        liabilities of TCS Inc. and of its profits or loss for the financial
        period ending on the Accounting Date.


2.5     Without limiting the generality of warranties 2.1 to 2.4 (inclusive) the
        results shown by the Accounts of TCSL and the audited accounts of TCSL
        for the period ending 31 December 2000 did not (except as therein
        disclosed) record any "extraordinary" or "exceptional" item (as such
        terms are currently interpreted by Financial Reporting Standards
        applicable to any of the Companies).


2.6     Thales confirms that it has reviewed all entries regarding TCS Companies
        combination that have been prepared according to the accounting
        principles of this Agreement. As result of this review Thales confirms
        that it is not aware of adjustments, whether in terms of additional
        provisions for inventory, additional provisions for liabilities or other
        adjustments that are, or reasonably could be, of relevance in the
        context of Nice obligation to provide an audit certificate on the
        Completion Accounts of TCS at the Completion Date.

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2.7     Thales confirms that the Accounts Combination Statement has been
        prepared in accordance with the Accounting Principles and further
        confirms that it has reviewed all the consolidation entries that have
        been prepared in order to produce the consolidated accounts of Thales
        (both in terms of the holding company consolidation and any relevant
        consolidations at intermediate holding company level) at 31 December
        2001 and 30 June 2002 and there are no consolidation adjustments,
        whether in terms of additional provisions for inventory, additional
        provisions for liabilities or other adjustments that are, or could
        reasonably be held to be, of relevance in the context of the calculation
        of the NAV Target.


        MANAGEMENT ACCOUNTS


2.8     Attached to the Disclosure Letter are the Management Accounts together
        with the unaudited financial report of TCSA to 30 June 2002.


2.9     The Management Accounts reasonably and fairly represent the profits or
        losses of each of the TCS Group (excluding TCSA) for the five month
        period to 31 May 2002 and the unaudited financial report of TCSA to 30
        June 2002 reasonably and fairly represents the profits or losses of TCSA
        for the six month period to 30 June 2002.


        OPERATION OF THE BUSINESS


2.10    Since the Accounting Date:


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        2.10.1  each of the Companies have carried on the Business in the
                ordinary and usual course with a view to maintaining the same as
                a going concern and without entering into any transaction, or
                assuming any liability which is not in the ordinary and usual
                course of the Business; except as contemplated by or permitted
                by the terms of this Agreement;


        2.10.2  there has been no material interruption or alteration in the
                nature, scope or manner of the business of any of the Companies;


        2.10.3  no substantial customer of or supplier to any of the Companies
                (being a customer or supplier accounting for more than 5% (five
                per cent) of the turnover of the Business for the accounting
                period ending on the Accounting Date) has:


                (a)     indicated that it is likely to cease trading with or
                        supply to any of the Companies;


                (b)     indicated that it is likely to reduce substantially its
                        trading with any of or supplies to the Companies; or


                (c)     indicated that it is likely to change substantially the
                        terms upon which it is prepared to trade with or supply
                        to any of the Companies (other than normal price and
                        minor changes);


        2.10.4  there has been no material increase in the average collection
                periods for the debtors and no material decrease in the payment
                periods for the creditors and each of the Companies have
                continued to pay all creditors

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                and received payments from all debtors in the ordinary course of
                their business consistent with the normal practice of the
                Business;


        2.10.5  none of the Companies have acquired, sold, transferred or
                otherwise disposed of any material assets or cancelled, waived,
                released or discounted in whole or in part any material rights,
                debts or claims of any of the Companies, except in each case in
                the ordinary course of the business of any of the Companies and
                in a manner consistent with prior practice; except as
                contemplated by or permitted by the terms of this Agreement;


        2.10.6  the Companies have not entered into any commitment involving
                capital expenditure on capital account which is still
                outstanding;


        2.10.7  other than changes in the amount of Cumulative Orders of the
                Business in the period 1 January 2002 to 30 June 2002 as
                provided for in clause 7.7 of this Agreement, there has been no
                material adverse change in the financial or trading position or
                (save to the extent that the same would be likely to affect to a
                similar extent generally all companies carrying on similar
                businesses in the United Kingdom, France, Germany or the United
                States) in the prospects of the Business taken as a whole and no
                event, fact or matter has occurred which is likely to give rise
                to any such change;


        2.10.8  no material debtor of the Business has been released by Thales
                or any of the Companies on terms that it pays less than the book
                value of its debt and no material debt owing to Thales or any of
                the Companies in connection with the Business taken as a whole
                has been deferred, subordinated or written off or;


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        2.10.9  no material change has been made in the terms of employment of
                the Employees (other than those required by law);


        2.10.10 no debts or other receivables and no stock, goods, plant,
                machinery or equipment of any of the Companies (in relation to
                the Business) have been factored or sold, or agreed to be sold,
                apart from the sales of finished products in the routine course
                of trading;


        2.10.11 neither Thales or any of the Companies (in relation to the
                Business) have offered material price reductions, discounts or
                allowances on sales of trading stock or services;


        2.10.12 no agreements have been entered into or give effect or
                arrangements put in place to transfer any customers or suppliers
                of the Business to the business of any of Thales or any of the
                Companies;


2.11    The Disclosure Letter incorporates a list of all outstanding guarantees,
        performance bonds, letters of credit or similar instruments given by
        Thales or any of the Companies or any other person in respect of the
        Business.


        GRANTS AND ALLOWANCES


        2.12.1  The Disclosure Letter contains full particulars of all central
                and local government grants, subsidies and allowances which have
                been applied for or received by Thales or any of the Companies
                relating to the Business during the last four (4) years. No such
                grant, subsidy or allowance will become repayable by the
                Purchasers as a result of the sale of the Business.


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<PAGE>

        2.12.2  Neither Thales or any of the Companies has done or failed to do
                any act or thing which could result in all or any part of an
                investment grant or similar payment or allowance made or due to
                be made to it becoming repayable or forfeited by it.


        COMPLIANCE WITH APPLICABLE LAWS


2.13    The Companies have conducted the Business in all material respects in
        accordance with all applicable laws and regulations of the United
        Kingdom or any other jurisdiction in respect of whose laws the Business
        is subject.


2.14    The Companies are not in default in any order, decree or judgment of any
        court or any governmental or regulatory authority (whether in the United
        Kingdom or any other jurisdiction) which applies to the Business.


        US EMBARGO ENTITIES


2.15    Neither Thales or any of the Companies is, in relation to the Business,
        party to any subsisting agreement, obligation or arrangement relating to
        the conduct of Business with any person, entity, governmental body or
        organisation of or in a US Embargo Country.


3       EMPLOYEES


3.1     The Employees are all the employees employed in the Business as at the
        date of this Agreement.

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3.2     In relation to each Employee there are contained in the Disclosure
        Letter full particulars of:


        3.2.1   any written service or employment agreement or (as appropriate)
                any standard form of particulars of employment applicable and
                issued to Employees;


        3.2.2   each Employee's name, sex, job title, place of work and date of
                commencement of employment (including any employment with a
                previous employer which counts as continuous employment for the
                purposes of any relevant employment legislation in the
                jurisdiction in which the relevant employer is incorporated);


        3.2.3   each Employee's rate of remuneration, bonus and commission, any
                other benefit of any kind to which they are entitled or which is
                regularly provided or made available to Employees and the period
                of notice, entitlement to holidays and holiday bonuses
                applicable to Employees;


        3.2.4   particulars of any collective agreement affecting Employee's
                terms of employment, including disciplinary or grievance
                procedures and any procedures to be followed in the case of
                redundancy or dismissal; and


        3.2.5   details of any other terms and conditions of employment.


3.3     There are no subsisting contracts for the provision by any person of any
        consultancy services to the Companies in connection with the Business.


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3.4     Save as disclosed in the Disclosure Letter the Companies have no
        profit-sharing, share option or share incentive schemes or other
        employee benefit plans (excluding retirement benefit plans) in relation
        to any Employee.


3.5     Save as disclosed in the Disclosure Letter the Companies have no
        collective bargaining agreements or arrangements with trade unions, or
        employee bodies (whether or not elected), relating to the Employees.


3.6     Thales and/or the Companies are not in connection with the Business
        involved in any industrial or trade dispute or any other dispute or
        negotiation of a material nature with any trade union, body of employees
        or material number of employees.


3.7     Save to the extent (if any) to which provision or allowance has been
        made in the Accounts:


        3.7.1   no liability has been incurred by any of the Companies for
                redundancy payments or for compensation for wrongful or unfair
                dismissal or in relation to the dismissal of any employee of the
                Companies or for failure to comply with any order for the
                reinstatement or re-engagement of any employees or for breach of
                contract or for breach of any other legislative provision; and


        3.7.2   no gratuitous payment has been made or promised by any of the
                Companies in connection with the actual or proposed termination
                or suspension of employment or variation of any contract of
                employment of any present or former director or employee.


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3.8     No employee of any of the Companies is suffering from any medical
        condition, long term sickness or disability which has necessitated or,
        so far as Thales is aware, is expected to necessitate absence from work
        for a period of eight weeks or longer.


3.9     None of the Employees are on maternity leave on the date of this
        Agreement.


3.10    There is no outstanding or threatened claim or dispute by or with any
        unions or any other body representing all or any of the Employees of any
        of the Companies in relation to their employment by any of the Companies
        nor so far as Thales is aware are there any circumstances likely to give
        rise to any such claim or dispute.


3.11    No change, and no negotiation or request for a change in the emoluments
        or other terms of engagement of any of the Employees is due or would
        ordinarily take place consistent with past practice of the Business
        within six months from the date of this Agreement.


3.12    (a) No Employee of any of the Companies has given or so far as Thales is
        aware is expected to give notice terminating his contract of employment
        nor is under notice of dismissal. (b) So far as Thales is aware no
        Employee has threatened (or is expected to threaten) any litigation,
        arbitration or mediation, administration or criminal proceeding in
        connection with or arising from his employment.


3.13    Thales and the Companies have maintained up-to-date and adequate records
        regarding the employment of the Employees (including, without
        limitation, details of terms of employment, payment of sick pay and
        maternity pay, income tax and social security contributions,
        disciplinary and health and safety matters and adequate records for the
        purposes of the time keeping under relevant legislation).

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3.14    Thales and the Companies have not borrowed any money from any of the
        Employees and have not made any loans to any of the Employees which have
        not been repaid in full.


3.15    There are no schemes or agreements in operation under which any of the
        Employees is entitled to a bonus, commission or profit related
        remuneration of any kind payable or calculated by reference in whole or
        in part to the turnover, profits, sales or other financial performance
        of the Business, Thales or the Companies or any company connected with
        Thales or the Companies.


3.16    All contracts of service or consultancy or for services with directors
        or employees or other persons providing personal services to the
        Business whether directly or indirectly can be terminated by three
        months' notice or less without giving rise to any claim for damages or
        compensation (other than a statutory redundancy payment or statutory
        compensation for dismissal, if applicable).


3.17    There is no express term of employment for any Employee which provides
        that a sale of the Business shall entitle the Employee to treat such
        sale as amounting to a breach of the contract or entitling him to any
        payment or benefit whatsoever or entitling him to treat himself as
        redundant or otherwise dismissed or released from any obligation.


3.18    Thales and the Companies have no obligation to make any payment on
        redundancy in excess of a statutory redundancy payment and Thales and
        the Companies have not operated any discretionary practice of making any
        such excess payments. Thales and the Companies do not have a written
        redundancy policy.

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3.19    There is no agreement between Thales and the Companies and an Employee
        with respect to his/her employment, his ceasing to be employed or his
        retirement that is not included in his/her written terms of employment
        or previous employment other than retirement benefits disclosed at
        Schedule 6 and/or the Disclosure Letter.


4       PENSIONS


        In this warranty schedule:

        "PERSONAL PENSION SCHEME" means the personal pension scheme approved for
        the purposes of Chapter IV of Part XIV of ICTA 1988 to which the Thales
        Group makes employer contributions in respect of Mr McKay.

        "APPROVED" means approved by the Inland Revenue for the purposes of
        Chapter 1 of Part XIV of ICTA 1988.


4.1     Save for the Personal Pension Scheme and Thales' Schemes as at the date
        of this Agreement there are not (and never have been any) agreements,
        arrangements, customs or practices (whether legally enforceable or not)
        in operation for the provision of or payment of contributions towards
        any pensions, allowances, lump sums or other like benefits on before or
        after retirement or death or termination of employment (whether
        voluntary or not), or disablement for the benefit of any Employee or an
        Employee's dependants, nor has any proposal been announced or promise
        made to establish any such agreement, arrangement or practice and no
        individual has any contractual entitlement for the provision of
        retirement benefits other than in accordance with the relevant governing
        provisions of the Personal Pension Scheme and Thales' Schemes as
        disclosed to the Purchasers. The Companies have duly complied with all
        applicable legal and administrative requirements relating to stakeholder
        pension schemes (as defined in Section 1(1) of the Welfare Reform and
        Pensions Act

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        1999) and has disclosed all material details of the pension schemes
        designed by the Companies in relation to the Employees.


4.2     All particulars of each of the Thales' Schemes required to permit the
        Purchasers to form a true and fair view of each of the Thales' Schemes,
        their legal status and the benefits provided or to be provided
        (including contingently) under them for Employees or an Employee's
        dependants have been provided in the Disclosure Letter including for the
        avoidance of doubt:


        4.2.1   a copy of each agreement, deed and all rules governing or
                relating to the Thales' Schemes;


        4.2.2   a copy of each explanatory document of current effect including
                the members' booklet and any announcements issued to an Employee
                who is or may become a member of any of the Thales' Schemes;


        4.2.3   details of the employer and employee contribution rates in
                respect of each of the Thales' Schemes.


4.3     There is attached to the Disclosure Letter a schedule of Employees who
        are members of the Thales' Schemes as at the date of this Agreement.


4.4     No discretion or power has been exercised under any of the Thales'
        Schemes to augment benefits or provide a benefit which would not
        otherwise be provided.


4.5     The life insurance benefit payable under any of the Thales' Schemes
        other than in respect of TCSI and the US Employees on the death of a
        member of any of the

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        Thales' Schemes is at the date of this Agreement fully insured under a
        policy effected with an insurance company and all insurance premiums
        payable have in respect of that insurance policy been paid.


4.6     No plan, proposal or intention to amend, discontinue (in whole or in
        part) or exercise a discretion in relation to any of the Thales' Schemes
        has been communicated to any member of the Thales' Schemes.


4.7     No amount due in respect of the Personal Pension Scheme or to any of the
        Thales' Schemes in respect of an Employee is unpaid.


4.8     Each of the Thales' Schemes are Approved and each have been designed to
        comply with, and have been administered in accordance with, all
        applicable legal and administrative requirements.


4.9     No assurance, promise or guarantee (oral or written) has been made or
        given to the beneficiary of the Personal Pension Scheme of a particular
        level or amount of benefits to be provided for or in respect of him or
        her under the Personal Pension Scheme on retirement, death or leaving
        employment.


4.10    The Disclosure Letter contains details of the rate at which Thales Group
        has agreed to make employer contributions into the Personal Pension
        Scheme.


        NON-UK PENSION WARRANTIES


        "OVERSEAS EMPLOYEES" has the same meaning as Non-UK Employees.


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        "OVERSEAS PENSION SCHEMES" means each of: The Thales North American
        Pension Plan, the Thales America 401(k) Plan; the Racal SIP II Plan and
        any other pension scheme or similar arrangement (other than a state
        scheme) to which any of the Overseas Employees make (or have agreed to
        make contributions or other payments).

        "STATE SCHEMES" means each state pension scheme to which any of the
        employers of any of the Overseas Employees are required by law to make
        contributions or payments.


4.11    Save for the Overseas Pension Schemes and the State Schemes, there are
        not (and never have been) any agreements, arrangements, customs or
        practices (whether legally enforceable or not) in operation for the
        provision of or payment of contributions towards any pensions,
        allowances, lump sums or other like benefits on before or after
        retirement or death or termination of employment (whether voluntary or
        not) or disability for the benefit of any Overseas Employee or the
        dependants of such a person, nor has any proposal been announced or
        promise made to establish any such agreement, arrangement or practice
        and no individual has any contractual entitlement for the provision of
        retirement benefits other than in accordance with the relevant governing
        provisions of the Overseas Pension Schemes as disclosed to the
        Purchaser.


4.12    Thales has supplied the Purchaser with copies of all agreements, deeds,
        declarations, insurance contracts and other relevant documents governing
        the Overseas Pension Schemes and an accurate outline description of the
        amount and nature of benefits and the circumstances in which such
        benefits are payable under each of the Overseas Pension Schemes.


4.13    Each of the Overseas Pension Schemes has been designed to comply with
        and has been administered in accordance with all applicable legal and
        regulatory requirements.

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4.14    All amounts which have fallen due for payment by any of the employers of
        any of the Overseas Employees in respect of any of the Overseas Pension
        Schemes or any of the State Schemes have been paid.


4.15    The Purchaser will not have any liability under any of the Overseas
        Pension Schemes upon Completion.


4.16    No assurances or undertakings (whether legally binding or not) have been
        given to any of the Employees as to the continuance or introduction or
        increase or improvement of any retirement, death, sickness or disability
        scheme.


4.17    No assurance, promise or guarantee (oral or written) has been made or
        given to any individual of a particular level or amount of benefits to
        be provided for or in respect of him or her under the Overseas Pension
        Schemes on retirement, death or leaving employment.


5       PROPERTY


5.1     The Business Properties shown in Schedule 3 represent all the freehold
        and leasehold land and premises owned, leased, used or occupied by the
        relevant Company or in which it has an interest.


5.2     The particulars of the Business Properties shown in Part 1 of Schedule 3
        are true, correct and complete in all respects and the relevant Company
        or the relevant Thales Affiliate is the beneficial owner and has good
        and marketable title to the interest set out therein in relation to the
        Business Properties, free from Encumbrances. The Business Properties
        have the benefit of all necessary rights

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        and easements required for the continued use thereof for the purposes of
        the relevant Company, which rights are not subject to any restriction
        limitation or the right of any third party to determine the same.


5.3     No notice of any breach of the covenants, stipulations and conditions
        contained in the Leases of the Business Properties has been received by
        the Thales Properties Limited or the relevant Company and all outgoings
        payable in respect of the Business Properties and invoiced to Thales
        Properties Limited or the relevant Company have been duly paid.


5.4     No notice has been received by Thales, Thales Properties Limited, any
        Thales Affiliate or any of the Companies of any breach of covenant for
        repair and redecoration contained in the Leases of the Business
        Properties and there are no circumstances which will or might entitle
        any landlord or other person to exercise any powers of entry or to take
        possession thereof or which would otherwise restrict or terminate the
        continued possession and quiet enjoyment thereof for the purposes of the
        business of the relevant Company as presently carried on.


5.5     There are no covenants, restrictions, stipulations, easements or quasi
        easements or privileges affecting the Business Properties or any part
        thereof which are of an unduly onerous nature or which conflict with the
        present user thereof or which would affect the use or continued use
        thereof for the purposes of the business of any of the Companies nor are
        there any rights, easements or privileges in the continued existence of
        which is doubtful or uncertain as the withdrawal or cessation of which
        would affect the use or continued use of the Business Properties for the
        purposes of the Business.


5.6     So far as is necessary for the continued use thereof for the purposes of
        the business of any of the Companies to the extent or in the manner in
        which it is now used the Business Properties and the use thereof for the
        purposes of the

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        business carried on by any of the Companies comply in all material
        respects with all applicable laws, ordinances, rules, regulations and
        requirements including without limitation those relating to planning and
        fire precautions and all building laws and by-laws affecting the same
        and all applicable statutory and by-laws as to fire precautions, public
        health, the environment or otherwise.


5.7     No notice, action or proceedings affecting the Business Properties has
        been served or commenced by any person and there are no facts known to
        Thales, Thales Properties Limited and the relevant Trade Affiliates
        which are likely to result in any such notice, action or process being
        served or commenced.


5.8     The Business Properties are not affected by any of the following
        matters:


        5.8.1   any closing order, demolition order or clearance order; or


        5.8.2   any enforcement notice which has not been complied with; or


        5.8.3   any order or proposal for the compulsory acquisition or
                requisition of the whole or part thereof or the modification of
                any planning permission or discontinuance of any use of the
                removal of any building on the Business Properties; or


        5.8.4   any agreement with any planning authority statutory undertaking
                or other public body or authority regarding the use or
                development thereof.


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5.9     There are no outstanding disputes between any of the Companies, Thales
        Properties Limited or any Thales Affiliate and any person or entity
        relating to the Business Properties or their use.


5.10    The Companies have in their possession or under their control all deeds
        and documents relating to the Business Properties relevant to the
        interest of the Companies in the Business Properties.


5.11    The Business Properties are in a reasonable state of repair and
        condition having regard to the age of the Business Properties.


5.12    The replies given to enquiries raised by the Purchaser's Solicitors in
        respect of the Business Properties are true and correct in all material
        respects.


6       ASSETS


6.1     Each of the Assets other than any Intellectual Property Rights (subject,
        in the case of the Inventory, to retention of title where applicable)
        are:


        6.1.1   legally and beneficially owned by Thales and each of the
                Companies free from Encumbrances;


        6.1.2   not the subject of any hire purchase, leasing, lease purchase or
                credit-sale agreements, agreements for conditional sale or sale
                by instalments;


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        6.1.3   not subject to any agreement or commitment entered into by
                Thales and each of the Companies to give or create any of the
                interests described in 6.1.2 above and; and


        6.1.4   in the possession of or under the control of Thales or one of
                the Companies.


6.2     All of the fixed and movable plant, machinery, vehicles, office,
        warehouse and factory equipment, furniture and furnishings used in the
        Business are in reasonable repair having regard to their age and are
        capable of being used either for the purpose for which they were
        acquired or for the purpose for which they are now used by any of the
        Companies.


6.3     All of the raw materials, work in progress, parts and components and
        finished goods of Thales or one of the Companies are of a quality usable
        in the ordinary course of business except for obsolete and slow moving
        items that are provided for in the Accounts.


6.4     The fixed asset registers of the Companies provide a complete and
        accurate record of all plant, machinery, equipment and vehicles owned by
        Thales and the Companies and used in respect of the Business.


7       CONTRACTS

7.1     The Disclosure Letter contains:

        7.1.1   copies of:

                (a)     Contracts within category (c) of the "Contracts"
                        definition;

                (b)     all contracts, engagements or orders entered into by any
                        of the Companies with customers for the sale of goods or
                        the supply

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                        of services in connection with the Business which remain
                        to be performed in whole or in part having value in
                        excess of (pound)500,000 (or (US$500,000 in respect of
                        any such contract in US dollars); anD

                (c)     all other material Contracts;

                that remain to be performed (in whole or in part) by the
                Company; and


        7.1.2   a list of all other Contracts within the categories (a), (b) and
                (f) of the "Contracts" definition that remain to be performed
                (in whole or in part) by the Company.

7.2     The contracts currently subsisting relating to the Business to which
        Thales or any of the Companies is a party do not include:


        7.2.1   any contract for the purchase or use by Thales or any of the
                Companies of materials, supplies or equipment which is in excess
                of the requirements of Thales or any of the Companies for the
                normal operating purposes of the Business;


        7.2.2   any unusual or unusually onerous contract;


        7.2.3   any contract that cannot be terminated without penalty or
                compensation on 12 months' notice or less;


        7.2.4   any contract restricting the freedom of action of any of Thales
                or any of the Companies in relation to the normal Business
                activities or in relation to the territory in which the Business
                is conducted;

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        7.2.5   any contract not made in the ordinary course of the Business;


        7.2.6   any contract which by virtue of the acquisition of the Business
                by the Purchasers will result in:


                (a)     any other party being by virtue of the terms of such
                        contract relieved of any obligation or entitled to
                        exercise any right (including any right of termination,
                        any consent to assignment or any right of pre-emption or
                        other option); or


                (b)     Thales or any of the Companies being in default under
                        any such agreement or arrangement or in a liability or
                        obligation of Thales or any of the Companies being
                        created or increased;


        7.2.7   any contract which was entered into otherwise than by way of
                bargain at arm's length;


        7.2.8   any contract which establishes any joint venture, consortium,
                partnership or profit (or loss) sharing agreement or
                arrangement;



        7.2.9   any contract which contains any liability (present or future)
                under any financial or performance guarantee or indemnity or
                letter of credit;


7.3     Each contract to which the Thales or any of the Companies are now a
        party is valid and subsisting and there is no subsisting breach of any
        thereof which could lead to a claim for compensation, damages, specific
        performance or an injunction being made against Thales or any of the
        Companies or which could entitle a third

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        party to call in any moneys before the normal due date thereof which
        will in any such case materially and adversely affect the Business.


7.4     No party with whom Thales or any of the Companies have entered into any
        contract or arrangement is in default thereunder being a default which
        would have a material and adverse effect on the financial or trading
        position of the Business.


7.5     With respect to each of the contracts currently subsisting to which
        Thales and/or each of the Companies is a party in connection with the
        Business:


        7.5.1   Thales and/or each of the Companies has not received any notice
                of termination;


        7.5.2   the Companies have the technical and other capabilities and the
                human and material resources (including Inventory and
                promotional materials) to enable it to fulfil, perform and
                discharge all its outstanding obligations in the ordinary
                course.


7.6     The Disclosure Letter contains details of all subsisting arrangements,
        trading or otherwise, between the Companies and Thales or any Thales
        Affiliate.


7.7     Neither Thales nor any of the Companies (in relation to the Business)
        has outstanding any bid or tender or sale or service proposal which is
        substantial in relation to the Business or which has been issued in
        expectation of a loss following acceptance.

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7.8     No guarantee, indemnity, warranty or representation has been given to
        any customer in respect of goods or services supplied which would
        operate to extend the guarantee or warranty implied by law or contained
        in Thales' standard terms of business (a copy of which is attached to
        the Disclosure Letter).


MANUFACTURING AGREEMENT WITH INSTEM TECHNOLOGIES LIMITED


7.9     The copies of the documents contained in the Disclosure Documents in
        respect of the arrangements with Instem Technologies Limited constitute
        the entire agreement between the Companies and Instem Technologies
        Limited in connection with the Business.


7.10    There is no conflict between the rights granted by TCSL to Instem
        Technologies Limited and the rights granted by TCSL to each of Coppice
        Developments Limited and Precision Applications Limited.


        DISTRIBUTION AGREEMENTS


7.11    The Companies do not make any direct sales to end customers (i.e. sales
        which are not made indirectly, for example, through a distributor)
        except as disclosed.


7.12    Except as disclosed, the Companies have not entered into any exclusive
        distribution agreements with any person


7.13    The Companies have not granted any conflicting rights to different
        persons under the terms of any exclusive distribution, representative or
        agency arrangements,

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        and in particular, exclusive distribution rights have not been granted
        to more than one person in respect of the same territory or products.


7.14    None of the Companies' agreements with third parties grant distribution
        rights in respect of any products other than products which are sold by
        the Companies in connection with the Business.


        RELATIONSHIPS WITH IBM


7.15    The Companies have in place maintenance and service contracts with
        customers which generate sufficient income for TCSL to cover their
        payment obligations to IBM (UK Limited ("IBM") under all of the
        arrangements of TCSL with IBM.


7.16    The copies of the documents contained in the Disclosure Documents in
        respect of the arrangements with IBM constitute the entire agreement
        between the Companies and IBM in connection with the Business.


8       INTELLECTUAL PROPERTY


8.1     The Disclosure Letter and Schedule 7 contain true and accurate lists of
        all material Business IPR in any jurisdiction which are held or
        beneficially owned by the Companies. The Companies are the sole legal
        and beneficial owners of all Business IPR save as disclosed in the
        Disclosure Letter or Schedule 7.


8.2     The Disclosure Letter contains a true and accurate list of all material
        licensing or sub-licensing agreements or arrangements under which the
        Companies have the use of the Intellectual Property Rights of a third
        party for the purposes of the Business, and copies of such licences are
        included in the Disclosure Documents. No member of the Thales Group
        which is party to any such agreements or arrangements is in breach
        thereof and so far as Thales is aware no other party to such agreements
        or arrangements is in breach thereof.

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8.3     So far as Thales is aware, no act has been done or omitted to be done
        and no event has occurred or is likely to occur which may render any
        registered or registrable Business IPR subject to revocation, compulsory
        licence, cancellation or amendment or may prevent the grant or
        registration of a valid registered or registrable Intellectual Property
        Right pursuant to a pending application.


8.4     The Disclosure Letter contains a true and accurate list of all material
        agreements or arrangements under which any member of the Thales Group
        has granted to any other person any license, or other right in relation
        to the Business IPR and of all Contracts falling within (d) of the
        definition of Contracts.


8.5     None of (a) the products or systems developed by or for the Companies or
        used exclusively in the Business and which embody the use of the
        Business IPR and which are used in or offered for sale or licensed by
        the Business at Completion; or (b) the Prism Product; or (c) the Wordnet
        3 product as it exists at Completion; or (d) so far as Thales is aware
        no other part of the Business currently carried on by the Companies,
        infringes any Intellectual Property Rights of any other person or
        involves the unauthorised use of confidential information and so far as
        Thales is aware no member of the Thales Group has received any notice of
        any alleged infringement of the Intellectual Property Rights of any
        third party in relation to the Business and, save as set out in the
        Disclosure Letter, so far as Thales is aware no member of the Thales
        Group is aware of any circumstances (including any act or omission to
        act) likely to give rise to such a claim.


8.6     No Business IPR and no benefit of use of Intellectual Property Rights
        which are the subject of a Contract falling within (e) of the definition
        of Contract will be lost,

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        or rendered liable to any right of termination or cessation by any third
        party, by virtue of the acquisition by the Purchasers of the Business,
        save as stated in the Disclosure Letter.


8.7     So far as Thales is aware, there exists no actual or threatened
        infringement by any third party of Business IPR (including misuse of
        confidential information) or any event likely to constitute such an
        infringement nor has Thales (or any member of the Thales Group)
        acquiesced in the unauthorised use by any third party of any Business
        IPR.


8.8     So far as Thales is aware, no claims have been made or threatened in
        writing by employees or ex-employees of the Business under any statutory
        inventor compensation provision, or like employee compensation
        provision, in any jurisdiction, and no employee or previous employee of
        the Thales Group who in the case of his or her employment created,
        disclosed or developed work in which Intellectual Property Rights
        subsist have any ownership of, or rights to, such Intellectual Property
        Rights in relation to the Business IPR.


8.9     Neither the Business IPR , nor so far as Thales is aware any other
        Material IPR are subject to any Encumbrance. The interest of Thales
        under any contract in respect of Business IPR or Material IPR is not
        subject to any Encumbrance and so far as Thales is aware the interest of
        any other party under any such contract is not subject to any
        Encumbrance.


8.10    All renewal fees required for the maintenance of the Business IPR have
        been paid.


8.11    None of the Business IPR or, so far as Thales is aware, other Material
        IPR are the subject of any litigation, opposition, arbitration,
        mediation or administrative or

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        criminal proceedings and no such proceedings are so far as Thales is
        aware, threatened in writing.


8.12    The Business IPR, together with the Intellectual Property Rights which
        are the subject of a Contract falling within (e) of the definition of
        Contract as so licensed under such Contracts, are adequate to carry on
        the Business in the manner currently carried on and to fulfil its
        existing contracts save to the extent that the Purchasers need to
        replace the Excluded Trade Marks.


8.13    Save as set out in the Disclosure Letter, no member of the Thales Group
        other than the Companies uses any Business IPR.


8.14    Thales warrants that:

        (a)     the software licensed by Funk Software Inc. to TCSL is not used
                in the Business as carried on at Completion and has not been
                used in the Business in the 12 months immediately preceding
                Completion;

        (b)     TCSL is the absolute legal and beneficial owner of the
                Intellectual Property Rights in the elements of the "Tienna" and
                "Renaissance" products except for the Tienna "SS7" signaling
                protocol owned by Natural MicroSystems Corporation ("Natural");

        (c)     Natural and members of its group are not developing as at the
                date of Completion and have not in the 12 months immediately
                preceding Completion been contracted to develop any products or
                Intellectual Property Rights for use in the Business other than
                that described in paragraph (b) above;

        (d)     the software developed by Cliffstone for TCSL which related to
                TCSL's "Agent Quality Thales 3" product is not used in the
                Business as carried on at Completion and has not been used in
                the Business in the 12 months immediately preceding Completion;

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        (e)     other than as listed in the French Disclosure Letter and the
                German Disclosure Letter, TCSA and TCS GmbH do not own any other
                Intellectual Property Rights and no products or processes have
                been made available to any persons which incorporate any TCSA or
                TCS GmbH Intellectual Property Rights and none of the Companies
                are legally bound to make such products or processes available;
                and

        (f)     no distributors, resellers (or other third party who has entered
                into an agreement with the Companies for the supply of Business
                products to end-users) of the Companies have made any
                modifications to any products in respect of which they have been
                granted distributor or reseller rights by the Companies.

        (g)     All Intellectual Property Rights which are disclosed under the
                French Disclosure Letter and the German Disclosure Letter have
                been created by employees of, and are owned by, TCSA and TCS
                GmbH.

        (h)     The Cross Patents Licence Agreements do not impose any ongoing
                obligations on the Purchasers other than an obligation not to
                derogate from the grant of a non-exclusive licence of any
                patents being transferred to the Purchasers pursuant to this
                Agreement to Alcatel in the field of civil telecommunications
                and Thomson Multimedia in the field of multimedia on electronics
                consumer products broadcast and network equipment.


9       INFORMATION TECHNOLOGY

9.1     A list of the Information Technology used by the Business and by each
        Company and all agreements, arrangements or understandings relating to
        the maintenance, development, support, security, disaster recovery,
        management and utilisation of the Information Technology used by the
        Business (including software licences, escrow agreements relating to the
        deposit of sources codes, facilities management and computer bureau
        services agreements) are disclosed in the Disclosure Letter.

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<PAGE>

9.2     There are no material defects relating to the Information Technology
        used by the Business and the Information Technology used by the Business
        has the capacity and performance necessary to fulfil the present
        requirements of the Business.

9.3     No Company and no member of the Thales Group has disclosed to any third
        party any source code or algorithms relating to any software owned
        (either solely or jointly) by any of the Companies or by any member of
        the Thales Group in relation to the Business.

9.4     Details of any domain name, other than a domain name falling within the
        Excluded Trademarks, registered by any of the Companies or by any member
        of the Thales Group in connection with the Business are disclosed in the
        Disclosure Letter.

9.5     In the three years prior to the Completion Date there has been no bug,
        breakdown or virus affecting the Information Technology used (in
        relation to the Business) which has caused any material disruption to
        the Business.

10      CONFIDENTIAL INFORMATION

10.1    No disclosure has been made of any confidential information of the
        Companies in connection with the Business save in the ordinary course of
        business and upon the Companies having taken appropriate steps to secure
        the confidential nature of any such disclosure or as a result of
        publication which follows the filing of a patent application. Thales or
        the Companies are not aware of any material breach of such
        confidentiality obligations by any third party.

10.2    The Companies are not a party to any contract or arrangement under which
        it is or may be under obligation to make any disclosure of confidential
        information of the Companies in connection with the Business save in the
        ordinary course of business and upon the Companies having taken
        appropriate steps to secure the confidential nature of any such
        disclosure.


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11      INSURANCE


11.1    Thales and each of the Companies have maintained insurance cover in
        respect of the Business against risks normally insured against by
        companies carrying on a similar business, and in particular have
        maintained all insurance required by statute and product liability and
        environmental impairment liability insurance.


11.2    The Disclosure Letter contains particulars of all insurances maintained
        for the benefit of the Business. Such insurances are in full force and
        effect, all premiums in respect of the insurances maintained in respect
        of the Business have been paid when due and no such insurance policies
        have lapsed and the Companies have not committed any act or omitted to
        do anything which would render such insurances void or invalid or
        increase the premiums payable or affect the level or type of cover
        provided by such insurances.


11.3    There is no claim outstanding by Thales or any of the Companies under
        any of the Companies insurance policies relating to the Business or the
        Assets, nor are Thales or the Companies aware of any circumstances
        likely to give rise to such a claim.


12      PRODUCT LIABILITY

12.1    None of the Companies have, within the previous 18 months, received any
        claim from any third party relating to any product or service of the
        Business manufactured, sold or supplied which, was in any material
        respect, defective, other than defects which are covered in the ordinary
        course of business by any warranties or representations expressly given
        or implied by law in respect of the sale or supply of any such product.

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12.2    TCSL has not received a prohibition notice, a notice to warn or a
        suspension notice under the Consumer Protection Act 1987.


12.3    TCS GmbH has not received a prohibition notice, a notice to warn or a
        suspension notice under the German Product Liability Act
        ("Produkthaftungsgesetz").


12.4    TCSA has not received a prohibition notice, a notice to warn or a
        suspension notice under the relevant French law or other rules and
        regulations promulgated by local governmental authorities.


12.5    TCS Inc. has not received save as disclosed in the Disclosure Letter,
        any notice or other written communication from any US federal, state or
        local governmental authorities or administrative agency or body, or from
        any industry or standards-setting body, alleging any deficiencies in, or
        proposing to investigate or recall, any product or service of the
        Business sold or licensed or offered for sale or license in the United
        States.


13      LITIGATION


13.1    None of the Companies nor any person for whose acts or defaults any of
        the Companies may be vicariously liable are engaged whether as plaintiff
        or defendant or otherwise in any civil, criminal or arbitration
        proceedings or any proceedings before any tribunal (save for debt
        collection by each of the Companies in the ordinary course of the
        business for amounts which are not material) in connection with the
        Business and save as disclosed in the Disclosure Letter, so far as
        Thales is aware there are no proceedings threatened, pending or expected
        against any of the Companies and save as disclosed in the Disclosure
        Letter, neither Thales nor the Companies are aware of any facts or

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        circumstances which are likely to give rise to such litigation or
        arbitration, administrative or criminal proceedings or to any
        proceedings against a director or employee (past or present) of Thales
        or any of the Companies in respect of any act or default for which
        Thales or any of the Companies might be vicariously liable in connection
        with the Business.


13.2    So far as Thales is aware neither Thales nor any of the Companies are
        the subject of any official or governmental investigation or enquiry in
        respect of the affairs of Thales or any of the Companies in connection
        with the Business and no such investigations or enquiries are pending or
        expressly threatened against Thales or any of the Companies nor is
        Thales aware of any circumstances likely to lead to any such
        investigation or enquiry.


13.3     There is no order or judgment of any court or any governmental
         authority outstanding against Thales or any of the Companies in
         connection with the Business.


14      CONDUCT OF BUSINESS


        Neither Thales nor any of the Companies have done or omitted to do
        anything in breach of any relevant law, statutory requirement, by laws
        or regulations applicable to the conduct of the Business where such
        contravention would have a material adverse effect on the continued
        operation of the Business after Completion.


15      LICENCES AND CONSENTS


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15.1    All necessary licences, consents, permits, approvals, authorities
        (public and private) for or in connection with carrying on the Business
        now carried on by each of Thales or the Companies are listed in the
        Disclosure Letter and have been obtained by Thales and/or the Companies
        to enable each of the Companies to carry on the Business lawfully in the
        places and in the manner in which the Business is now carried on and all
        such licences, consents, permits, approvals and authorities are valid
        and subsisting and are not subject to any unusual or unusually onerous
        conditions having a material effect on the conduct of the Business and
        have been complied with in all material respects, no written notice has
        been received regarding any breach and none of the Companies are in
        material breach of any of the same nor so far as Thales is aware are
        there any circumstances which indicate that any material licence,
        consent, permission or approval is likely to be revoked. This warranty
        does not cover any licences, consents, permits, approvals or authorities
        which are contained in any of the contracts and are the subject of
        separate warranties above.


15.2    To the best knowledge of Thales and the Companies, none of the licences,
        permissions, authorisations or consents referred to in paragraph 15.1
        above contain a right for the other party to revoke or not renew, in
        whole or in part, such licences, permissions, authorisations or consents
        as a result of the acquisition of the Business.


16      ENVIRONMENTAL AND HEALTH


16.1    Thales and each of the Companies in relation to the Business and the
        Business Properties have complied at all times and in all respects with
        Environmental Law and there are and have been no acts or omissions of
        any of Thales or any of the Companies in relation to the Business,
        Business Properties and Environmental Matters which could give rise to
        fines, penalties, losses, damages, costs, expenses or liabilities or
        could require any Works.

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16.2    All Environmental Permits (if applicable) have been obtained and are in
        full force and effect, and no material operating or capital expenditure
        is required or proposed in relation to Environmental Matters under any
        such Environmental Permits.


16.3    So far as Thales is aware, no Environmental Matters exist or have arisen
        at or about any of the Business Properties which could give rise to any
        fines, penalties, losses, damages, costs, expenses or liabilities or
        could require Works. So far as Thales and each of the Companies are
        aware, no such matters are likely to arise.


16.4    Thales nor any of the Companies in relation to the Business or in
        relation to the Business Properties is or have been involved in any
        litigation proceedings, claim or complaint by any person under
        Environmental Laws, and so far as Thales is aware none is threatened and
        none is likely to arise. Thales, has not received any notice of
        communication or information alleging any liability in relation to
        Environmental Matters or that any Works are required or stating or
        suggesting that there is or might be any pollution, contamination or
        nuisance at or from any Business Property.


16.5    Neither Thales nor any of the Companies has any liability in respect of
        Environmental Matters under any contract or other agreement relating to
        the sale or other disposal or grant of any interest or rights in
        relation to any shares, land or other assets.

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17      TAXATION MATTERS


17.1    Neither Thales nor any of the Companies is involved in any dispute with
        any Tax Authority concerning any matter in any way affecting either the
        Business or any of the Assets to be transferred under this Agreement.


17.2    The Disclosure Letter sets out details of any investigation (including
        the consequences thereof but ignoring routine inspections) by any Tax
        Authority within six years prior to the date hereof into or affecting
        the payment of Taxation in respect of the Business and of any disputes
        with any Taxation authority in relation to Taxation matters relating to
        the Business.


17.3    The Disclosure Letter sets out details of any payments made or due to or
        by Thales or any of the Companies in relation to the Business in respect
        of which either Thales or any of the Companies or the payer is under an
        obligation to deduct Tax or would be under such an obligation but for a
        written authorisation issued by any Tax Authority permitting payment
        without such deduction.


17.4    There is no reason why any part of the price payable by the Purchaser
        that is apportioned under this Agreement to those of the Assets which
        are plant or machinery for the purposes of Part II of the Capital
        Allowances Act 2001 should not, assuming such apportioned price
        represents capital expenditure incurred for the purposes of the
        Purchaser's trade, qualify in full for writing down allowances; none of
        such Assets are leased (as in the meaning of section 105 of such Act);
        and Thales accepts that no election may be made in respect of any of
        such Assets pursuant to section 266 of such Act.

17.5    In respect of any Assets which are plant and machinery for the purposes
        of Part II of the Capital Allowances Act 2001 and which are fixtures (as
        defined in section 173(1) of the Capital Allowances Act 2001) at
        Completion either (a) no person

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        has been or will have become entitled to allowances in respect of any
        Expenditure incurred on the provision of the fixture or, (b) if any
        person has become so entitled that person has been, is or will be
        required to bring the disposal receipts in respect of the fixture into
        account under section 55 of the Capital Allowances Act 2001.


17.6    None of the Contracts, other than any relating to the acquisition of the
        Assets, involve any future liabilities which when incurred will not be
        deductible in computing profits for Tax purposes.


17.7    No Tax Authority has agreed to operate any special arrangement (being an
        arrangement which is not based on a strict application of the relevant
        legislation) in relation to the Business, whether in respect of benefits
        provided to its officers or employees, the valuation of its stock, the
        depreciation of its assets or any administrative or other matter
        whatsoever.


17.8    None of the Assets are wasting assets within section 44 of the Taxation
        of Chargeable Gains Act 1992 which do not qualify for capital
        allowances.


17.9    Thales and the Companies have properly operated the PAYE system or
        equivalent system in any relevant jurisdiction deducting income tax and
        national insurance contributions (and any other social security
        contribution) as required from all payments to, or treated as made to,
        the Employees (and has deducted all amounts which are required to be
        deducted from wages, salaries or other benefits) and has punctually
        accounted to the relevant Tax Authority for all amounts of Tax and
        national insurance contributions (and any other social security
        contribution) due to them.


17.10   Proper records have been maintained by Thales and the Companies in
        respect of all PAYE (or equivalent system in any relevant jurisdiction)
        and national insurance contributions (and any other social security
        contribution) deductions and/or payments.

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17.11   Thales and the Companies have maintained and obtained accounts, records,
        invoices and other documents (as the case may be) appropriate or
        requisite for the purposes of VAT arising in respect of the Business
        which are complete, correct and up-to-date.


17.12   Neither Thales nor any of the Companies is liable to any abnormal or any
        non-routine payment, or any forfeiture, penalty, interest or surcharge,
        or to the operation of any penal provision, in relation to VAT.


17.13   Neither Thales nor any of the Companies has been required to give
        security to any Tax Authority for payment of VAT.


17.14   The Disclosure Letter sets out details of any investigation (including
        the consequences thereof) by any Tax Authority within six years prior to
        the date hereof into or affecting the payment of VAT in respect of the
        Business.


17.15    None of the Assets are chargeable assets of a business which, if
         transferred to a body corporate treated as a member of a group under
         section 43 of the VATA as a going concern, would give rise to a
         liability on that body corporate or the representative member of the
         group of which that body corporate is a member under section 44 of the
         VATA.

17.16   All documents in the possession or under the control of Thales or any of
        the Companies which establish or are necessary to establish the title of
        Thales or any of the Companies to the Assets have been duly stamped and
        any applicable stamp duties or charges in respect of such documents have
        been duly accounted

                                      204
<PAGE>

        for and paid, and no such documents which are outside the United Kingdom
        would attract stamp duty if they were brought in to the United Kingdom.


17.17   Thales and the Companies have complied with all applicable Taxation laws
        and regulations relating to the Business and/or the Assets of any
        jurisdiction in respect of whose Taxation laws and regulations the
        Business and/or the Assets is subject where non-compliance could result
        in the Purchaser or any of its subsidiaries being required to pay
        Taxation which it would otherwise not be required to pay.


18      RECORDS ETC.


18.1    All the books, records and systems (including but not limited to
        computer systems) and all data and information relating to the Business
        have been adequately maintained or operated or otherwise held by Thales
        or the Companies at all times and such Books and Records have been
        retained by the Companies for such periods as may be required by the
        relevant law of the jurisdiction in which the Companies are
        incorporated.


18.2    Save as disclosed in the Disclosure Letter, none of the records,
        systems, controls, data or other information of each of the Companies in
        connection with the Business is recorded, stored, maintained, operated
        or otherwise dependent upon or held by any means (including any
        electronic, mechanical or photographic process whether computerised or
        not) which (including all means of access thereto and therefrom) are not
        under the exclusive ownership and direct control of any of the
        Companies.


18.3    None of the Companies, or, to the knowledge of Thales, any of the
        respective officers or directors of the Companies, is presently (I)
        using any funds of the

                                      205
<PAGE>

        Companies for any unlawful contribution, endorsement, gift,
        entertainment or other unlawful expense relating to political activity;
        (ii) making any direct or indirect unlawful payment to any foreign or
        domestic regulatory body official or employee from any funds of the
        Companies, or (iii) making any bribe, unlawful payoff, influence
        payment, "kickback" or other unlawful payment to any person with respect
        to the Business.


19      INSOLVENCY


19.1    No order has been made and no resolution has been passed for the winding
        up of Thales or any of the Companies or for a provisional liquidator to
        be appointed in respect of Thales or any of the Companies and no
        petition has been prepared and no meeting has been convened for the
        purpose of winding up of Thales or any of the Companies.


19.2    No administration order has been made and no petition for such an order
        has been presented in respect of any of Thales or any of the Companies.


19.3    No receiver (which expression shall include an administrative receiver)
        has been appointed in respect of Thales or any of the Companies or all
        or any of the assets of Thales or any of the Companies.


19.4    Neither Thales nor any of the Companies is insolvent, or unable to pay
        its debts within the meaning of section 123 Insolvency Act 1986.


19.5    No voluntary arrangement has been proposed under section 1 Insolvency
        Act 1986 in respect of Thales or any of the Companies.

                                      206
<PAGE>

19.6    No bankruptcy order has been made in respect of any of Thales or any of
        the Companies or a petition for such an order presented.


19.7    No application has been made in respect of Thales or any of the
        Companies for an interim order under section 253 Insolvency Act 1986.


19.8    Neither Thales nor any of the Companies are unable to pay or to have no
        reasonable prospect of being able to pay any debts as those expressions
        are defined in section 268 Insolvency Act 1986.


19.9    No event in respect of any of the Companies or the Business has occurred
        in any of the jurisdictions in which the Business is conducted analagous
        with any of the events specified in the foregoing sub-paragraphs of this
        paragraph 19.


20      COMMISSIONS ETC.


        Save as disclosed in the Disclosure Letter, no commissions, introductory
        fees, bonuses or other payments or gifts having a monetary value have
        been paid or made available or agreed to be paid or made available by
        Thales or any of the Companies to any person, firm or company in
        relation to any transaction implemented under or contemplated in this
        Agreement.


21      COMPETITION AND FAIR TRADING LAWS


21.1    Neither Thales nor any of the Companies, in relation to the business,
        has done anything which contravenes or is likely to contravene, requires
        notification or is, or is likely to be, or has been the subject of any
        enquiry, complaint, investigation or proceeding under any of the
        provisions of the Fair Trading Act 1973, the EC

                                      207
<PAGE>

        Treaty, the Competition Act 1980 or the Competition Act 1998 or any
        other competition, anti-trust, anti-monopoly or anti-cartel legislation
        or regulation in any country of the world in which or with which it does
        business. Furthermore, Neither Thales nor any of the Companies is a
        member or party to any agreement or arrangement which required
        registration under the Restrictive Trade Practices Acts 1976 and 1977.


21.2    Neither Thales nor any of the Companies have in relation to the
        Business, received any process, notice or other communication (formal or
        informal) by or on behalf of the Office of Fair Trading (whether under
        the Fair Trading Act 1973, the Competition Act 1980, the Competition Act
        1998 or otherwise), the Competition Commission, the Secretary of State
        for Trade and Industry, the Commission of the European Communities, the
        EFTA Surveillance Authority, the US Fair Trade Commission or any other
        authority having jurisdiction in competition matters in relation to any
        aspect of the Business or any agreement, arrangement, concerted practice
        or course of conduct to which either Thales or any of the Companies is,
        or is alleged to be, a party in relation to the Business.


21.3    Neither Thales nor any of the Companies are involved in any practice or
        agreement as a result of which it is likely to receive any such process,
        notice or communication as is referred to in paragraph 21.2 above.


21.4    Neither Thales nor any of the Companies are subject to any order or
        judgment given by any court or governmental or regulatory authority, or
        party to any undertaking or assurance given to any such court authority,
        in relation to competition matters which is still in force.


21.5    Neither Thales nor any of the Companies have been in receipt of any aid
        which would be construed as falling within Article 87(1) of the EC
        Treaty and is not

                                      208
<PAGE>

        aware of any pending or threatened investigation, complaint, action or
        decision in relation to the receipt or alleged receipt by it of any aid
        or alleged aid.


22      INVESTMENT REPRESENTATIONS


22.1    In evaluating the suitability of an investment in the Nice Shares, no
        member of the Thales Group has relied upon any representations or other
        information (whether written or oral) from Nice, other than the
        representations and warranties contained herein and upon investigations
        made by it in making the decision to invest in Nice.


22.2    Each member of the Thales Group is aware that an investment in Nice
        involves a high degree of risk.


22.3    Each member of the Thales Group acknowledges that any information
        furnished by Nice does not constitute investment, accounting, tax or
        legal advice. Moreover, such person is not relying upon any information
        furnished by Nice with respect to such person's tax and other economic
        considerations in connection with its investment in Nice. In regard to
        the Tax and other economic considerations related to such investment,
        each member of the Thales Group has relied on the advice of, or has
        consulted with, only its own professional advisors.


22.4    Each member of the Thales Group is aware that the Nice Shares are being
        offered and sold by means of an exemption under the Securities Act and
        exemptions under certain United States state securities laws for
        non-public offerings and under the Israel Securities Law and regulations
        promulgated thereunder and that each member of the Thales Group makes
        the representations, declarations and warranties as contained in this
        Section 22 with the intent that the same shall be relied upon by Nice in
        determining its suitability as a purchaser of such securities.

                                      209
<PAGE>

22.5    Each member of the Thales Group is aware that it cannot sell or
        otherwise transfer the Nice Shares without registration under the
        Securities Act and applicable state securities laws or without an
        exemption therefrom, and that certain restrictions apply to trading the
        Nice Shares in Israel under the Israel Securities Law and regulations
        promulgated thereunder and is aware that it will be required to bear the
        financial risks of its purchase for an indefinite period of time
        because, among other reasons, such securities have not been registered
        with any regulatory body of any state of the United States and,
        therefore, cannot be transferred or resold unless subsequently
        registered under applicable state securities laws or an exemption from
        such registration is available. Each member of the Thales Group also
        understands that except as provided for under the Registration Rights
        Agreement, Nice is under no obligation to register the resale by any
        member of the Thales Group of Nice Shares or to assist it in complying
        with any exemption from registration under applicable United States
        federal or state securities laws or under the Israel Securities Law and
        regulations promulgated thereunder.


22.6    Each member of the Thales Group recognises that no regulatory body has
        recommended or endorsed the purchase of the Nice Shares or passed upon
        the adequacy or accuracy of the information set forth herein, and that
        Nice is relying on the truth and accuracy of the representations,
        declarations and warranties made by each member of the Thales Group as
        contained herein in selling the Nice Shares.


22.7    Each member of the Thales Group has at all times been given the
        opportunity to obtain additional information, to verify the accuracy of
        the information received and to ask questions of and receive answers
        from certain representatives of Nice concerning the terms and conditions
        of each member of the Thales Group's investment in Nice and the nature
        and prospects of Nice's business.

                                      210
<PAGE>

22.8    Each member of the Thales Group further acknowledges that the
        transferability of the Nice Shares shall also be restricted by the
        contractual "lock-up" provisions contained in this Agreement. Thus, each
        member of the Thales Group realises that it cannot expect to be able to
        liquidate its investment in Nice readily or at all in case of an
        emergency.


22.9    Each member of the Thales Group is acquiring the Nice Shares for
        investment purposes, for its own account and not with a view to or in
        connection with any public distribution or resale of such securities to
        or for the accounts of others.


22.10   Each member of the Thales Group understands and agrees that a
        restrictive legend will be placed on all certificates representing the
        Nice Shares.


                                      211
<PAGE>

                                     PART 2

                             PURCHASERS' WARRANTIES



1       Each of the Purchasers have the requisite corporate power to execute,
        deliver and perform, and have taken all necessary corporate or other
        action to authorise the execution, delivery and performance of this
        Agreement. This Agreement will constitute legal, valid and binding
        obligations of the Purchasers enforceable in accordance with its terms.


2       The execution and delivery of, and the performance by the Purchasers of
        their obligations under, this Agreement will neither:


        2.1     result in a breach of any provision of their constitutional
                documents; or


        2.2     result in a breach of, or constitute a default under, any
                instrument to which, prior to Completion, any of the Purchasers
                is a party or by which any of the Purchasers is bound; or


        2.3     require the consent of the shareholders of any of the
                Purchasers; or


        2.4     result in a breach of any order, judgment or decree of any court
                or governmental agency to which any of the Purchasers is a party
                or by which any of the Purchasers is bound.


3       Other than the consents, permissions, approvals and agreements set forth
        in Clause 2.1.1 of this Agreement (the receipt or satisfaction of which,
        in accordance with Clause 2 of this Agreement, is a condition to the
        Completion of the transactions contemplated by this Agreement), all
        consents, permissions, approvals and agreements of third parties that
        are necessary or desirable for the

                                      212
<PAGE>

        Purchasers to obtain in order to enter into and perform this Agreement
        in accordance with its terms have been obtained in writing.

4       No representation or warranty by the Purchasers in this Agreement nor
        any certificate or schedule, furnished or to be furnished to Thales in
        connection with the consummation of the transactions contemplated by
        this Agreement, contains or will contain any untrue statement of a
        material fact.

5       Except for the filings, permits, authorisations, consents and approvals
        as may be required under, and other applicable requirements of, the
        Exchange Act, the HSR Act or any other applicable antitrust laws or
        authorities, the TASE, the Investment Centre of the Israel Ministry of
        Industry and Trade and the Office of the Chief Scientist of the Israel
        Ministry of Industry and Trade, none of the execution, delivery or
        performance of this Agreement by Nice or the Purchasers, the issuance of
        the Ordinary Shares evidenced thereby by Nice, nor the consummation by
        each of Nice and the Purchasers of the transactions contemplated hereby
        or compliance by each of Nice and the Purchasers with any of the
        provisions hereof will (i) conflict with or result in any breach of any
        provisions of the certificate of incorporation, the by-laws or similar
        organisational documents of Nice; (ii) require any filing with, or
        permit, authorisation, consent or approval of any Governmental Authority
        or other person( including without limitation, consents from parties to
        contracts, loans, leases and other agreements to which Nice is a party
        ); (iii) require any consent, approval, or notice under, or result in a
        violation or breach of, or constitute (with or without due notice or the
        passage of time or both) a default (or give rise to any right of
        termination, amendment, cancellation or acceleration) under, any of the
        terms, conditions or provisions of any agreement to which Nice is a
        party; or (iv) violate any order, writ, injunction, decree, statute,
        rule or regulation applicable to Nice or the Purchasers, any of their
        respective properties or assets, excluding from the foregoing clauses
        (ii) and (iii) such violations, breaches or defaults which would not,
        individually or in the aggregate, have a material adverse effect on Nice
        or the ability of Nice to consummate the transactions contemplated
        hereby.

                                      213
<PAGE>

6       There are no actions, suits or proceedings by or, to the knowledge of
        Nice or the Purchasers, investigations by or before any Governmental
        Entity which are pending or, to the knowledge of Nice or the Purchasers,
        threatened in writing against Nice or the Purchasers, which challenge
        the validity of this Agreement or any action taken by Nice or the
        Purchasers pursuant to this When issued, the Shares and the ADSs will be
        duly authorized, validly issued and fully paid and will have the rights
        and privileges set forth in the Nice articles of association or the ADR
        Facility, as applicable, and will be issued free and clear of all Liens,
        voting trusts, proxies, calls or commitments of any kind.

7       When issued, the Shares and the ADSs will be duly authorized, validly
        issued and fully paid and will have the rights and privileges set forth
        in the Nice articles of association or the ADR Facility, as applicable,
        and will be issued free and clear of all Liens, voting trusts, proxies,
        calls or commitments of any kind.

8       Upon effectiveness of the Registration Statement, and upon being
        admitted for trading or authorized for quotation on Nasdaq, the ADRs
        will be freely transferable in the United States, but shall nevertheless
        remain subject to the provisions of Schedule 11 to this Agreement.

                                      214
<PAGE>

                                   SCHEDULE 5

                              CLIFFSTONE WARRANTIES



1       TITLE TO CLIFFSTONE SHARES


1.1     Thales TRC Inc. is the sole legal and beneficial owner of the Cliffstone
        Shares and the sole legal and beneficial owner of the Cliffstone Note.


1.2     All of the Cliffstone Shares and the Cliffstone Note are validly issued
        and fully paid.


1.3     The Cliffstone Shares constitute between 35 and 40% of the fully diluted
        share capital of Cliffstone.


1.4     In respect of the Cliffstone Shares and/or the Cliffstone Note there
        are:

        (a)     no Encumbrances over or affecting them;

        (b)     no agreements, arrangements or obligations to give or create any
                Encumbrances over them; and

        (c)     no claims have been made that any person is entitled to any
                Encumbrances over them.


2       CAPACITY OF THALES TRC, INC.


2.1     Thales TRC, Inc. is duly organised and validly existing under all
        applicable laws.

                                      215
<PAGE>


2.2     Thales TRC, Inc. has the requisite power and authority to enter into and
        perform this Agreement and the other documents which are to be executed
        by it pursuant to this Agreement (the "TRC Completion Documents").


2.3     The TRC Completion Documents will, when executed by Thales TRC, Inc.
        constitute a binding obligation on Thales TRC, Inc. in accordance with
        their respective terms.


2.4     The execution and delivery of, and the performance by Thales TRC, Inc.
        of its respective obligations under the TRC Completion Documents will
        not:


        2.4.1   result in a breach of, or constitute a default under, any
                instrument to which either Thales TRC, Inc. is a party or by
                which Thales TRC, Inc. is bound; or


        2.4.2   result in a breach of any order, judgment or decree of any court
                or governmental agency to which Thales TRC, Inc. is a party or
                by which Thales TRC, Inc. is bound; or


        2.4.3   require the consent of the shareholders of Thales TRC, Inc. or
                of any other person; or


        2.4.4   require Thales TRC, Inc. to obtain any consent or approval of,
                or give any notice to or make any registration with, any
                governmental or other authority which has not been obtained or
                made at the date hereof both on an unconditional basis and on a
                basis which cannot be revoked (save pursuant to any legal or
                regulatory entitlement to revoke the same other than by reason
                of any misrepresentation or misstatement).

                                      216
<PAGE>

3       COMPLIANCE WITH THE CLIFFSTONE DOCUMENTS


        Each of Thales, Thales TRC, Inc. and the Thales Group have at all times
        complied with and are not in breach of the terms of any of the
        Cliffstone Documents and each of Thales, Thales TRC, Inc. and the Thales
        Group are not aware of the counter parties to the Cliffstone Documents
        being in breach of any of their obligations thereunder.


                                      217
<PAGE>

                                   SCHEDULE 6

                                    PENSIONS

                              PART 1 - UK PENSIONS


        Employees of the Business who are members ("Members") of the Racal Group
        Staff Pension and Life Assurance Scheme, the Racal Group Executive
        Manager & Senior Manager Pension Scheme, the Racal Group Executive
        Pension Plan and the Thomson Retirement Benefit Scheme ("Thales'
        Schemes") will be treated as leaving service on the Completion Date for
        pension purposes. Thales will use its reasonable endeavours to procure
        that the Trustees of Thales' Schemes will provide Members with the
        normal leaving service benefits under the provisions of the relevant
        Thales Schemes (which will be advised to the individual Members
        concerned).



                        PART 2 - OVERSEAS PENSION SCHEMES


        US Employees and all other current employees of TCS, Inc., if any, who
        are members (" Members") of the Thales North America Pension Plan, the
        Thales North America 401K Plan and the SIP-II Plan will be treated as
        leaving TCS, Inc.'s service on the Completion Date and will be treated
        in accordance with the terms and conditions contained in each of the
        above described plan dealing with terminate employees. Thales will
        advise individual Members of their rights and benefits under said plans
        on or shortly after the Completion Date.


                                      218
<PAGE>
<TABLE>
<CAPTION>


                                                             SCHEDULE 7


                                                    INTELLECTUAL PROPERTY RIGHTS

                                                            BUSINESS IPR


TRADEMARKS OWNED BY TCSL

<S>                        <C>           <C>               <C>             <C>               <C>           <C>
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

        Trademark              COUNTRY      APPLICATION      APPLICATION       REGISTRATION     RENEWAL             COMMENTS
                                                                DATE
                                              NUMBER                             NUMBER          DATE
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
A-MUX LOGO                 UK            2059568           5/3/96          2059568           5/3/06
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

BIG PICTURE TECHNOLOGY     CTM           2052991           24/1/01
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           76/288370         20/7/01
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

CALLMASTER                 Norway        912590            23/5/91         155604            11/3/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           UK            1452564           9/1/91          1452564           9/1/08
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

GEOSTORE                   UK            1007802           9/3/73          1007802           9/3/08
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

INVESTIGATOR               CTM           1832823           31/8/00         1832823           31/8/10
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           76/149047         18/10/00
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

MIRRA                      CTM           830786            21/5/98         830786            21/5/08
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           75/508202         25/6/98         2476967           14/8/11       Affidavit due 14/8/06
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

RAPIDAX                    USA           113149            7/11/90         1745086           5/1/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           UK            1444906           22/10/90        1444906           22/10/07
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

RENAISSANCE                CTM           1307636           14/9/99         1307636           14/9/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
</TABLE>

                                              219
<PAGE>
<TABLE>
<CAPTION>
<S>                        <C>           <C>               <C>             <C>               <C>           <C>
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

        Trademark              COUNTRY      APPLICATION      APPLICATION       REGISTRATION     RENEWAL             COMMENTS
                                                                DATE
                                              NUMBER                             NUMBER          DATE
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           75/837065         1/11/99
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

STOREHOUSE                 UK            1140237           13/9/80         1140237           13/9/11
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

STOREMED                   UK            1176989           18/6/82         1176989           18/6/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

STORENET                   UK            1049140           7/7/75          1049140           7/7/06
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

STOREPLEX                  France        92431479          24/8/92         92431479          24/8/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           Germany       R52808/9 WZ       21/8/92         2051506           21/8/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           75/662730         18/3/99         2378956           22/8/10       Affidavit due 22/8/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           UK            1509634           14/8/92         1509634           14/8/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

TIENNA                     CTM           1387570           18/11/99        1387570           18/11/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           75/924305         22/02/00
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

TRUNKNET                   CTM           1133156           9/4/99          1133156           9/4/09
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           75/698405         5/5/99
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

WORDNET                    France        9556446           24/3/95         9556446           24/3/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           Germany       39512614          22/3/95         39512614          22/3/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           74/649882         20/3/95         2093445           2/9/07        Affidavit due 2/9/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           UK            2013801           10/3/95         2013801           10/3/05
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

WORDSAFE                   Denmark       3542/91           2/10/92         9057/92           2/10/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           USA           107236            19/10/90        1745083           5/1/03
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
</TABLE>

                                                                220
<PAGE>

<TABLE>
<CAPTION>
<S>                        <C>           <C>               <C>             <C>               <C>           <C>
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

        Trademark              COUNTRY      APPLICATION      APPLICATION       REGISTRATION     RENEWAL             COMMENTS
                                                                DATE
                                              NUMBER                             NUMBER          DATE
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------


-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           UK            1439866           7/9/90          1439866           7/9/07
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------

                           Norway        912591            23/5/91         153406            26/11/02
-------------------------- ------------- ----------------- --------------- ----------------- ------------- ----------------------
</TABLE>


                                                                221
<PAGE>
<TABLE>
<CAPTION>


PATENT OWNED BY TCSL
--------------------


------------------ ------------------ ------------- ------------- ------------- ------------- ------------------- -----------------

     PATENT TITLE   REGISTERED OWNER   APPLICATION   APPLICATION   PUBLICATION   PUBLICATION      INVENTOR(S)        COMMENTS
                                         NUMBER         DATE          NUMBER        DATE
------------------ ------------------ ------------- ------------- ------------- ------------- ------------------- -----------------

<S>                <C>                  <C>            <C>           <C>            <C>        <C>                 <c>
VOICE ACTIVITY     Thales Contact       9916430.3      13/7/99       2352948        7/2/01     Neil Martin Crick   Not yet granted
MONITOR            Solutions
------------------ ------------------ ------------- ------------- ------------- ------------- ------------------- -----------------
</TABLE>





THIRD PARTY'S RIGHTS
--------------------



License of this patent has been granted under general Cross Patents License
Agreements signed between Trader and:

        -       Alcatel in the field of Civil Telecommunications

        -       Thomson Multimedia in the field of multimedia or electronics
                consumer products, broadcast and network equipment.


                                      222
<PAGE>


<PAGE>
<TABLE>
<CAPTION>


COPYRIGHT / DESIGN RIGHTS - HARDWARE
------------------------------------



The following items are all covered by design documentation. Ownership is with
Thales Contact Solutions Ltd.

<S>                                                                           <C>
----------------------------------------------------------------------------- -----------------------------------------------------

                               HARDWARE ITEM                                                          Comments
----------------------------------------------------------------------------- -----------------------------------------------------

ICR 64 Recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Rapidax Ranger recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Wordsafe Maxima recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Wordnet series 1 recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Wordnet series 2 recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Wordnet series 3 recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Tienna recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Mirra recorder
----------------------------------------------------------------------------- -----------------------------------------------------

Redac radar recording integration card
----------------------------------------------------------------------------- -----------------------------------------------------

PDET (Programmable Digital Extension Extension Tap Card                       Wordnet and Mirrra
----------------------------------------------------------------------------- -----------------------------------------------------

PCM32 line card                                                               Tienna
----------------------------------------------------------------------------- -----------------------------------------------------

DSP card                                                                      Wordnet
----------------------------------------------------------------------------- -----------------------------------------------------

DSP Chip                                                                      Mirra
----------------------------------------------------------------------------- -----------------------------------------------------
</TABLE>


                                      223
<PAGE>

<TABLE>
<CAPTION>

COPYRIGHT / DESIGN RIGHTS - SOFTWARE
------------------------------------



The following items are all covered by design documentation and source code
listings. Ownership is with Thales Contact Solutions Ltd

<S>                                                                           <C>
----------------------------------------------------------------------------- -----------------------------------------------------

                               SOFTWARE ITEM                                                             Comments
----------------------------------------------------------------------------- -----------------------------------------------------

Mirra Management software
----------------------------------------------------------------------------- -----------------------------------------------------

Wordnet series 1 operating software
----------------------------------------------------------------------------- -----------------------------------------------------

Wordnet series 2 operating software                                           Developed by Origin - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------

Tienna operating software                                                     Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------

CMSU software                                                                 Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------

RTT (Replay to Turret) software                                               Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------

Replay server software                                                        Currently at release 7.0
----------------------------------------------------------------------------- -----------------------------------------------------

SARA (Search and Replay application)
----------------------------------------------------------------------------- -----------------------------------------------------

SARA NG (Search and Replay application)
----------------------------------------------------------------------------- -----------------------------------------------------

RECO (Radar and voice scenario reconstruction replay application)
----------------------------------------------------------------------------- -----------------------------------------------------

Investigator search and replay application                                    Currently at release 7.0 (4.1 in general release)
----------------------------------------------------------------------------- -----------------------------------------------------

Investigator RX Scenario reconstruction replay application (was Radio Currently
at release 2.0 Replay)
----------------------------------------------------------------------------- -----------------------------------------------------

AQM (Agent Quality Management) application                                    Currently at release 3.0 (2.2 in general release)
----------------------------------------------------------------------------- -----------------------------------------------------

Call confirm and last message replay applications                             Currently both at release 1.0
----------------------------------------------------------------------------- -----------------------------------------------------

MCC (Media Control Centre) application                                        Currently at release 1.0
----------------------------------------------------------------------------- -----------------------------------------------------

Wordnet vendor object recorder control software for Prism application         Developed by Cliffstone - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------

Renaissance dashboard system management application
----------------------------------------------------------------------------- -----------------------------------------------------
</TABLE>


                                      224
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                           <C>
----------------------------------------------------------------------------- -----------------------------------------------------
QA recorder screen and voice recording application                            Developed by Cliffstone - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------

Smart logger application                                                      Development by Cliffstone incomplete - IPR with TCSL
----------------------------------------------------------------------------- -----------------------------------------------------

RecorderLink recorder integration software                                    Currently at release 3.5
----------------------------------------------------------------------------- -----------------------------------------------------

Web replay application                                                        Not released
----------------------------------------------------------------------------- -----------------------------------------------------

Switch decoder signal processing software                                     Various decoders for a range of telephone switches
----------------------------------------------------------------------------- -----------------------------------------------------
</TABLE>


                                      225
<PAGE>

DESIGN RIGHTS - DATABASE
------------------------



The following items are all covered by design documentation. Ownership is with
Thales Contact Solutions Ltd

<TABLE>
<CAPTION>
<S>                                                    <C>
------------------------------------------------------ ---------------------------------------------------------------

                    DATABASE ITEM                                                 Comments
------------------------------------------------------ ---------------------------------------------------------------

Tracker database                                       Uses Microsoft JET technology
------------------------------------------------------ ---------------------------------------------------------------

Tienna database                                        Uses Microsoft SQL server technology
------------------------------------------------------ ---------------------------------------------------------------

CMSU database                                          Uses Microsoft SQL server technology
------------------------------------------------------ ---------------------------------------------------------------



DESIGN RIGHTS - ARCHITECTURE
----------------------------



The following items are all covered by design documentation. Ownership is with
Thales Contact Solutions


------------------------------------------------------ ---------------------------------------------------------------

                  ARCHITECTURE ITEM                                               Comments
------------------------------------------------------ ---------------------------------------------------------------

Renaissance Architecture                               Currently at release 7.0
------------------------------------------------------ ---------------------------------------------------------------
</TABLE>



DOMAIN NAMES
------------



The following domain names have been registered by Thales Contact Solutions.


                                      226
<PAGE>
<TABLE>
<CAPTION>
<S>                                                    <C>
------------------------------------------------------ ---------------------------------------------------------------

                     DOMAIN NAME                                                  COMMENTS
------------------------------------------------------ ---------------------------------------------------------------

Bigpictech.com
------------------------------------------------------ ---------------------------------------------------------------
</TABLE>



                                      227
<PAGE>


SOFTWARE OWNED BY TCS GMBH
--------------------------


DATAX CONVERTOR SOFTWARE


SOFTWARE OWNED BY TCS SA
------------------------

<TABLE>
<CAPTION>
<S>                                                                             <C>
-----------------------------------------------------------------------------------------------------------------------------------

              NOM                 VERSION   LICENCE     SYSTEME D'EXPLOITATION   TYPE D'ENREGISTREUR          DATE DE SORTIE
-----------------------------------------------------------------------------------------------------------------------------------

       REECOUTE IMMEDIATE           1,9      Poste    Windows 9x/NT/2000               WORDNET                      //
-----------------------------------------------------------------------------------------------------------------------------------

     INTERFACE SERVEUR TCS           1       Site     SERVEUR :Windows NT/2000      WORDNET/MIRRA      Diponible Fin Aout avec une
                                                      CLIENT: Tous systemes                            version beta Fin juillet
                                                      d'exploitations
-----------------------------------------------------------------------------------------------------------------------------------

     CONVERTISSEUR WAVE TCS          1       Poste    Windows 9x/NT/2000            WORDNET/MIRRA                   //
-----------------------------------------------------------------------------------------------------------------------------------

REECOUTE IMMEDIATE TCS Pocket PC     1       Poste    Windows CE (Pocket PC)        WORDNET/MIRRA                Fin Aout
-----------------------------------------------------------------------------------------------------------------------------------

   REECOUTE IMMEDIATE TCS PC         1       Poste    Unix,  Linux,  Mac OS         WORDNET/MIRRA             Fin Septembre
                                                      version beta Fin juillet
                                                      tous les systemes
                                                      suportant le JAVA)
-----------------------------------------------------------------------------------------------------------------------------------

        LIEN CENTORE 15              1                Windows 9x/NT/2000               WORDNET                      //
-----------------------------------------------------------------------------------------------------------------------------------

        LIEN CENTORE 15              2                Windows 9x/NT/2000               WORDNET                  Fin Avril
-----------------------------------------------------------------------------------------------------------------------------------

          SUPERVISEUR                        Poste    Windows 9x/NT/2000               WORDNET
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      228
<PAGE>


                                   SCHEDULE 8

                                   GUARANTEES





1       Those bonds and guarantees listed at Disclosure Document UK.A.4
        excluding those bonds and guarantees relating to Iran including (but not
        limited to) those in relation to the Civil Aviation Organisation (issued
        on 29 March 1995 and 20 February 1998) and the State Purchasing
        Organisation (performance bonds issued on 28 September 1994 and 9
        January 1998) ("the Iran Guarantees")


2       A guarantee given by Thales to Barclays Bank Plc in respect of any
        liability of TCSL arising from those bonds and guarantees given by
        Barclays Bank plc to support obligations of the Companies with respect
        to the Business as listed at Disclosure Document UK.A.4 but excluding
        the Iran Guarantees


3       A guarantee proposed to be given by TCSL in respect of obligations of
        TCS GmbH under an agreement for the sale of certain assets and the
        novation of certain contracts to Origin Data Realisation GmbH disclosed
        at Disclosure Document UK.A.42


                                      229
<PAGE>

                                   SCHEDULE 9

                              ACCOUNTING PRINCIPLES

The Completion Balance Sheet shall be prepared in the form set out in part D of
this Schedule. The Completion Balance Sheet shall be drawn up in accordance
with:


A       GENERAL ACCOUNTING PROCEDURES


        (i)     the specific accounting policies, procedures and practices set
                out in paragraph C below;


        (ii)    to the extent not inconsistent with paragraph A(i) above, then:


                (a)     Assets and Assumed Liabilities of the Business of the US
                        Company shall be accounted for in accordance with US
                        GAAP;


                (b)     Assets and Assumed Liabilities of the Business of the UK
                        Company shall be accounted for in accordance with UK
                        GAAP;


                (c)     Assets and Assumed Liabilities of the Business of the
                        German Company shall be accounted for in accordance with
                        German GAAP;


                (d)     Assets and Assumed Liabilities of the Business of the
                        French Company shall be accounted for in accordance with
                        French GAAP; and


                the GAAP of the relevant country shall in each case be applied
                in accordance with the same accounting policies, procedures and
                practices adopted in the preparation of the Accounts and in
                particular the provisions against the realisable value of assets
                and liabilities shall be prepared on a basis consistent with
                that applied in the Accounts.


                                      230
<PAGE>

B       GENERAL


1       The Completion Balance Sheet shall be expressed in Dollars and amounts
        in other currencies shall be translated into Dollars at the Conversion
        Rate prevailing on the Completion Date.


2       All records and work papers related to the preparation and audit of the
        Accounts shall be made available to the Auditors.


3       Inventory wherever situated shall be included in the Completion Balance
        Sheet and valued in accordance with the Accounting Principles.


4       Excluded Assets and Excluded Liabilities shall not be included in the
        Completion Balance Sheet.


C       SPECIFIC ACCOUNTING PROCEDURES


1       The Completion Net Asset Value will be determined from the combination
        of the Assets and Assumed Liabilities (which shall be deducted from the
        Assets) of the Companies, which will have been prepared in accordance
        with the accounting rules described above, subject to:


o   Elimination of all intra TCS Group receivables and payables whether trade or
    financial and intra Thales Group receivables and payables whether trade or
    financial

o   Elimination of investments in combined Companies (eg TCSL investment in TCS
    GmbH)

o   Elimination of unrealised profit included in inventory

o   Elimination of pension related assets or liabilities, deferred taxes and any
    accrued expenses related to Thales Group debts

o   Any other steps required solely for combination purposes to equitably arrive
    at the Completion Net Asset Value as mutually agreed by the parties or
    failing agreement as finally determined by Independent Accountants.


2       Inventory in excess of Euro 13,325,000 (being 105% of the amount of
        Inventory shown in the Combination Accounts) shall be disregarded and
        shall be valued as nil for the purposes of the Completion Balance Sheet.


3       A provision shall be made in respect of accrued not taken holiday pay.

                                      231
<PAGE>


4       A provision shall be made for bonuses and commissions to be paid after
        Completion which relate to a period of performance prior to Competition.


D       FORM OF COMPLETION BALANCE SHEET


        (See following page)


E       FORM OF AUDITORS' CERTIFICATE


        (to be prepared on the notepaper of the Auditors)

        To:       Thales

                  Nice

        date

        reference

        Gentlemen

        The Company

        We refer to the Sale and Purchase Agreement ("the Agreement") made
        between Thales and Nice on 2002 for the sale of the Business and the
        Assets as therein defined. Words and expressions defined for the purpose
        of the Agreement are to have the same meanings in this letter.

        In accordance with clause [13] of the Agreement we attach, initialled
        for identification, draft Completion Balance Sheet and a statement of
        the Net Asset Value as at the Completion Date. The statement shows a Net
        Asset Value of Euro [ ] and therefore in accordance with the Agreement
        and by reference to the Target Net Asset Value the amount payable by [ ]
        to [ ] is Euro[ ].

        In our opinion the draft Completion Balance Sheet have been prepared in
        all material respects in accordance with Clauses [13] of the Agreement
        and the Accounting Instructions.

        Yours faithfully

        Auditors


                                      232
<PAGE>

                                   SCHEDULE 10

                        OVERSEAS COMPLETION REQUIREMENTS





                            PART 1 - THE US BUSINESS



        OBLIGATIONS OF THALES, THE THALES GROUP, NICE AND THE PURCHASERS


1.1     To enter into an assignment and assumption agreement in the agreed
        terms.


1.2     To enter into a bill of sale in the agreed terms.


1.3     To enter into a stock and promissory note purchase agreement in the
        agreed terms in relation to the Cliffstone Shares and the Cliffstone
        Note.


1.4     To enter into a trademark assignment agreement in the agreed terms.


1.5     To enter into a patent assignment agreement in the agreed terms.


                                      233
<PAGE>


                          PART 2 - THE FRENCH BUSINESS



1       OBLIGATIONS OF THALES, TCSA, NICE AND THE FRENCH PURCHASER


        To enter into a French Business Transfer agreement in the agreed terms.


2       OBLIGATIONS OF THALES AND/OR TCSA


        To deliver to Nice a certified copy of the shareholders resolution of
        TCSA:


        (a)     authorising the transfer of the French Business; and


        (b)     approving the transfer of the registered office of TCSA to a new
                location.


                                      234
<PAGE>


                          PART 3 - THE GERMAN BUSINESS



1       OBLIGATIONS OF THALES, TCS GMBH AND GERMAN ACQUISITION CO


1.1     To enter into a German Business Transfer Agreement in the agreed terms.


1.2     To initial a complete list of assets at Completion.



2       OBLIGATIONS OF THALES AND/OR TCS GMBH


2.1     To deliver to Nice a certified copy extract from the current commercial
        register of TCS GmbH. shareholders of TCS GmbH authorising the managing
        director of TCS GmbH to sell the German Business.


                                      235
<PAGE>

                                   SCHEDULE 11

  CORPORATE GOVERNANCE, REGISTRATION RIGHTS AGREEMENT AND STANDSTILL AGREEMENT

          Corporate Governance; Lock Up; Orderly Marketing Arrangements



1       The parties recognise that the Share Consideration will result in the
        Thales Group holding 2,187,500 Nice Shares. Nice hereby represents and
        warrants that no Ordinary Shares of Nice have been issued since December
        31, 2001 or will be issued prior to the Completion Date other than (i)
        upon exercise of options or purchases of Nice Shares by employees,
        officers or directors of, or consultants to, Nice, whether pursuant to
        Nice's current or any future written compensatory plans or agreements or
        otherwise in the ordinary course of business or (ii) as otherwise
        permitted by the terms and conditions of the Sale and Purchase
        Agreement. Thales hereby confirms its understanding of the current
        company business strategy of Nice as previously presented to Thales.
        Thales hereby acknowledges and agrees that Nice may, from time to time,
        issue additional Nice Shares, resulting in dilution of Thales'
        percentage interest in Nice. Thales will have no special right of first
        refusal or other pre-emptive rights in respect of any further issue of
        Nice Shares save for any rights it might hold together with the other
        Shareholders in Nice, under Israeli law or the rules of NASDAQ or the
        ISA.

2       Thales has also agreed to be bound by the terms and conditions of a
        standstill agreement substantially in the form of Schedule 11.1 hereto.

3       On Completion, the board of directors of Nice (the "Board") shall
        appoint two persons nominated by Thales to the Board one of whom may at
        Thales' election serve on the audit committee of the Board. If Thales
        sells or otherwise disposes of more than 50% of the Nice Shares
        constituting the Share Consideration, then one of Thales' appointees to
        the Board shall immediately resign and the remaining director nominated
        by Thales (if applicable) may at Thales' election serve on the audit
        committee of the Board. If Thales sells or otherwise disposes of more
        than seventy-five percent (75%) of the Nice Shares constituting the
        Share Consideration, or if

                                      236
<PAGE>

        the Thales Group holds less than 2% of all issued and outstanding
        Ordinary Shares of Nice, then Thales' remaining appointee to the Board
        (if applicable) shall, if requested by Nice or the Board, immediately
        resign from the Board (and the audit committee, if applicable). The
        appointment and maintenance in office of such director(s) shall be
        subject to the corporate laws of Israel, the articles of association of
        Nice, Israel securities laws, and the rules and regulations of the
        Israel Securities Authority ("ISA"), the Tel Aviv Stock Exchange
        ("TASE") and the Nasdaq National Market ("Nasdaq"). Without derogating
        from the generality of the foregoing, Thales acknowledges that the
        shareholders of Nice have the right to appoint the members of the Board,
        and accordingly, the appointment of Thales' nominees as aforesaid is
        subject to the confirmation of such appointments, or re-appointment, by
        the shareholders of Nice at the next annual meeting of shareholders. It
        is anticipated that the Board will hold at least four meetings annually
        (one in Europe and three in Israel on an annual basis) with all meetings
        held in English.

        Nice shall provide to the members of the Board of Nice designated by
        Thales indemnification rights and insurance coverage in each case on
        terms no less favourable than those available to other members of the
        Board of Nice from time to time.

4.      (a)     Except as provided in paragraph 6 below, Thales hereby agrees
                that Thales will not sell, assign, transfer, pledge, encumber or
                otherwise dispose of :

                (i)     any of the Nice Shares comprising the Share
                        Consideration prior to the first anniversary of
                        Completion;

                (ii)    more than twenty--five percent (25%) of the Nice Shares
                        comprising the Share Consideration prior to the second
                        anniversary of Completion; and

                (iii)   more than fifty percent (50%) of the Nice Shares
                        comprising the Share Consideration prior to the end of
                        thirty (30) months after Completion.

                                      237
<PAGE>

        (b)     In addition, Thales hereby further agrees that (i) neither
                Thales nor any of its affiliates will engage in any hedging or
                monetization strategies with respect to the Nice Shares
                (including, without limitation, short sales, purchasing
                cash-settled put options, writing covered call options, or
                cashless collar options) at any time prior to the first
                anniversary of Completion; and (ii) neither Thales nor any of
                its affiliates will engage in any short sales at any time during
                which Thales has a nominee on the Board of Directors of Nice.

5.      The following principles shall apply to the manner and timing of sale of
        the Nice Shares comprising the Share Consideration:

        (a)     At any time during which one or more nominees of Thales serve on
                the Board or during which no nominee of Thales serves on the
                Board solely due to one or more of the following (hereinafter,
                an "Acceptable Reason"): (i) Thales has failed to nominate an
                individual to the Board; (ii) Thales' nominees, if nominated or
                elected to serve as directors of a public company, would deprive
                the company of any rights, priviledges, exemptions or other
                benefits that would otherwise be available to the company under
                Israeli law or the rules or regulations of Nasdaq, the SEC or
                the ISA, and Thales has failed to nominate a replacement nominee
                whose service would not have a similar effect on the company; or
                (iii) all of Thales' nominees have resigned pursuant to
                paragraph 8 below :

                (i)     all sales of Nice Shares comprising the Share
                        Consideration shall be effected through Nasdaq;

                (ii)    no sales of Nice Shares comprising the Share
                        Consideration shall take place at a discount of more
                        than ten percent (10%) to the last reported sale price
                        immediately prior to the trade or the previous day's
                        closing sale price on Nasdaq as applicable; and

                (iii)   Thales must give Nice two Nasdaq trading days notice
                        prior to a sale comprising one percent (1%) or more of
                        the issued and outstanding shares of Nice. Following
                        such notification

                                      238
<PAGE>

                        by Thales, Nice shall keep confidential the subject
                        matter of such notification and shall not engage in any
                        activities with respect to the subject matter of such
                        notification that would violate the rules and
                        regulations of Nasdaq, TASE or the ISA.

                (iv)    All sales of Nice Shares comprising the Share
                        Consideration (whether or not made under a registration
                        statement, under SEC Rule 144, or otherwise), shall be
                        subject to the provisions of the Registration Rights
                        Agreement, and to any restrictions imposed by Nice's
                        internal policies regarding sales by officers, directors
                        and "affiliates" of Nice (Thales acknowledging that it,
                        for so long as it has a designee on the board or
                        beneficially owns 5% or more of the outstanding shares,
                        will be an "affiliate" of Nice for purposes of such
                        policies).

        (b)     At any time during which Thales does not have one or more
                nominees on the Board for any reason other than an Acceptable
                Reason:

                (i)     no sales of Nice Shares shall take place at a discount
                        of more than ten percent (10%) to the lower of (i) the
                        last reported sale price immediately prior to the trade
                        or (ii) the previous day's closing sale on Nasdaq, as
                        applicable; and

                (ii)    no transaction not effected through the Nasdaq shall
                        take place unless Nice is given not less than five
                        business days' notice of such transaction and a right of
                        first refusal to acquire, or cause its designee to
                        acquire, the relevant securities on the same terms as
                        offered in such off-market transaction, provided that
                        Nice's right of first refusal will expire if Nice or its
                        designee fails to purchase the shares within the five
                        business day period, and provided, further that Nice
                        shall not have a right of first refusal:

                                      239
<PAGE>

                        (A)     when such off-market transaction is to a
                                Financial Institution (as defined below) acting
                                as intermediary who no later than the date of
                                its purchase of the Nice Shares has committed to
                                dispose of the Nice Shares in transactions
                                effected on Nasdaq to multiple financial
                                institutions; or

                        (B)     the transaction involves a sale to a single
                                Financial Institution purchasing Nice Shares for
                                its own account;

                        but where either (A) or (B) above shall be applicable,
                        two business days' prior notice must be given to Nice
                        before the relevant transaction is effected. Following
                        such notification by Thales, Nice shall keep
                        confidential the subject matter of such notification and
                        shall not engage in any activities with respect to the
                        subject matter of such notification that would violate
                        federal or state securities laws or the rules or
                        regulations of Nasdaq, TASE or the ISA.

                        For purposes of the foregoing, "Financial Institution"
                        shall mean any registered securities broker, dealer,
                        market maker, or regulated bank that does not control,
                        is not under common control with, and is not controlled
                        by any individual, partnership, corporation (including a
                        business trust), limited liability company, joint stock
                        company, trust, unincorporated association, joint
                        venture or other entity (each a "Person") that is
                        engaged in a business competitive with the Business or
                        the business of Nice. For purposes of the foregoing, the
                        term "control" (including the terms "controlled by" and
                        "under common control with"), when used with respect to
                        a specified Person, means the possession, directly or
                        indirectly, of the power to direct or cause the
                        direction of the management or policies of such Person,
                        whether through ownership of voting securities or
                        partnership or other

                                      240
<PAGE>

                        ownership interests, by contract or otherwise; PROVIDED
                        that, without limiting the generality of the foregoing,
                        (a) any Person (including family members of such Person)
                        which owns, directly or indirectly, securities
                        representing 20% or more of the value or ordinary voting
                        power of a corporation or 20% or more of the partnership
                        or other ownership interests (based upon value or vote)
                        of any other Person is deemed to control such
                        corporation or other Person, (b) a general partner shall
                        always be deemed to control any partnership of which it
                        is a general partner, and (c) a member-manager of a
                        limited liability company shall always be deemed to
                        control any limited liability company of which it is a
                        manager.

        (iii)   All sales of Nice Shares comprising the Share Consideration
                (whether or not made under a registration statement, under SEC
                Rule 144, or otherwise), shall be subject to the provisions of
                the Registration Rights Agreement.

6.      Upon expiration of the lock up periods described in paragraph 4 above,
        Thales may sell, assign, transfer or otherwise dispose of Nice Shares
        subject to the orderly marketing arrangements described in paragraph 5
        above and in accordance with applicable law.

7.      Notwithstanding the provisions of paragraphs 4 and 5, Thales shall be
        permitted to effect the following transfers of Nice Shares:

        (a)     Any transfer of Nice Shares to any Affiliate of Thales; provided
                that the transferee is, and acknowledges in writing that it is,
                with respect to the transferred Nice Shares, subject to all of
                the restrictions set forth in this Schedule and in the
                Standstill Agreement;

        (b)     Any bona fide pledge of Nice shares to a financial institution
                as security for any indebtedness of Thales; provided that the
                pledgee is, and acknowledges in writing that it is, with respect
                to the pledged Nice Shares, subject to all of the restrictions
                set forth in this Schedule and in the Standstill Agreement;

                                      241
<PAGE>

        (c)     Any transfer of Nice Shares in connection with the sale of all
                or substantially all the assets of Thales; provided that the
                transferee is, and acknowledges in writing that it is, with
                respect to the transferred Nice Shares, subject to all of the
                restrictions set forth in this Schedule and in the Standstill
                Agreement and provided further that the provisions of paragraph
                3 of this Schedule shall apply only to Thales and shall not
                apply to any such transferee;

        (d)     Any deposit of Nice Shares with the Depositary in exchange for
                ADRs, or any withdrawal of Nice Shares from the Depositary upon
                surrender of ADRs under the Deposit Agreement, dated as of
                January 24, 1996, by and among the Bank of New York, as
                depositary, Nice and holders of ADRs.

8.      In the event of a significant bona fide disagreement with Nice's company
        strategy (a "Bona Fide Dispute") at any time after the first anniversary
        of Completion that results in the resignation of all of Thales' nominees
        to the Board (but excluding a resignation of said board members for any
        other reason), the lock up periods described in paragraph 4 above shall
        be reduced to the lesser of 6 months or the remaining lock up period for
        the Nice Shares still subject to such restrictions as of the date of
        resignation of Thales' appointed nominees to the Board. Notwithstanding
        the foregoing, the Nice Shares shall remain subject to the orderly
        marketing arrangements described in paragraph 5(b) above. In the event
        that, for any reason other than a Bona Fide Dispute or an Acceptable
        Reason (as defined above), Thales' nominees to the Board are not
        appointed or re-appointed by Nice, or are removed or replaced by Nice,
        the restrictions contained in paragraph 1, 2, 4 and 5(a) (but not 5(b))
        shall terminate forthwith. Such restrictions shall not terminate upon
        the voluntary resignation of Thales' nominees to the Board.

9.      During any period of time in which: (i) Thales has the right to
        designate, or in which (ii) Thales has serving on Nice's Board, one or
        more nominee directors, Thales agrees to vote its Nice Shares in favour
        of Nice's Board's recommendation as to additions, removals or
        substitutions to the Board and

                                      242
<PAGE>

        Thales further agrees not, individually or jointly with any others, to
        initiate, propose, encourage, support or vote for the appointment or
        removal of any other person to the Board or any shareholder proposal
        relating to the appointment or removal of any nominee to the Board,
        which is not supported by Nice's Board.


                                      243
<PAGE>

================================================================================





                          REGISTRATION RIGHTS AGREEMENT



                                 BY AND BETWEEN







                                     [NICE]



                                       AND



                                    [THALES]





                      DATED AS OF [________________], 2002







                                      244
<PAGE>

                          REGISTRATION RIGHTS AGREEMENT



This Registration Rights Agreement (this "Agreement"), dated as of
______________, 2002, is entered into by and between [Nice], a corporation
organized under the laws of Israel (the "Company") and [Thales], a company
organized under the laws of France (the "Initial Holder").



                                    RECITALS


WHEREAS, the Initial Holder and the Company have entered into a Sale and
Purchase Agreement, dated [________________], 2002 (the "Sale and Purchase
Agreement") pursuant to which the Company has agreed to purchase from the
Initial Holder certain securities and other assets of the Initial Holder
described therein for the consideration described therein;

WHEREAS, pursuant to the terms of the Sale and Purchase Agreement, the Company
will issue or cause to be issued [2,187,500] American Depository Shares of the
Company ("ADSs"), each representing one Ordinary Share, par value 1.00 New
Israeli Shekel per share, of the Company (each, an "Ordinary Share") to the
Initial Holder;

WHEREAS, pursuant to the terms of the Sale and Purchase Agreement, the ADSs and
Ordinary Shares issued to the Initial Holder are subject to certain restrictions
on transfer pursuant to (A) Schedule 11 to the Sale and Purchase Agreement,
including prohibitions on any transfers within the first year following their
issuance, limitations on transfers in subsequent periods, and limitations on the
manner of sale (including pricing) of ADSs and any American Depositary Receipts
representing ADSs ("ADRs), and (B) US and Israeli securities laws;

WHEREAS, pursuant to the terms of the Sale and Purchase Agreement, the Company
has agreed to eliminate certain of the restrictions under US and Israeli
securities laws by entering into this Agreement to provide the Initial Holder
with registration rights with respect to the ADSs and Ordinary Shares issued to
the Initial Holder pursuant to the terms of the Sale and Purchase Agreement; and

WHEREAS, the Company and the Initial Holder desire to enter into this
Registration Rights Agreement to provide for such registration rights on the
terms set forth herein.

NOW THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements contained herein, the parties hereto hereby
agree as follows:

1.      Certain Definitions.

        As used in this Agreement, the following terms shall have the meanings
        ascribed to them below:

                                      245
<PAGE>

1.1.    "AFFILIATE" shall have the meaning given to it in Rule 12b-2 of the
        General Rules and Regulations under the Exchange Act.

1.2.    "COMMISSION": the Securities and Exchange Commission.

1.3.    "EXCHANGE ACT": the Securities Exchange Act of 1934, as amended.

1.4.    "HOLDER" or "HOLDERS": the Initial Holder for so long as it shall hold
        Registrable Securities and any transferee of Registrable Securities to
        whom the Initial Holder shall assign or transfer any rights hereunder,
        PROVIDED that such transferee has agreed in writing to be bound by this
        Agreement and the transfer restrictions set forth in Schedule 11 to the
        Sale and Purchase Agreement in respect of such Registrable Securities.

1.5.    "PERSON": any natural person, corporation, partnership, firm,
        association, trust, government, governmental agency or other entity,
        whether acting in an individual, fiduciary or other capacity.

1.6.    "REGISTRABLE SECURITIES": the ADSs issued to the Holder pursuant to the
        terms of the Sale and Purchase Agreement and the Ordinary Shares
        underlying such ADSs. As to any particular Registrable Securities, such
        securities shall cease to be Registrable Securities when (I) a
        registration statement with respect to the sale of such securities shall
        have been declared effective under the Securities Act and such
        securities shall have been disposed of in accordance with such
        registration statement, or (ii) such securities are eligible to be sold
        or distributed pursuant to Rule 144 (or any successor provision) under
        the Securities Act within any consecutive three month period (including,
        without limitation, pursuant to Rule 144(k)) without volume limitations.

1.7.    "SECURITIES ACT": the Securities Act of 1933, as amended.

2.      Registration Rights.

2.1     SHELF REGISTRATION STATEMENT

        (a)     Obligation to File and Maintain. Subject to the prior receipt by
                the Company of the audited financial statements, auditors'
                report and current accountants' consent required by Section 10.6
                of the Sale and Purchase Agreement, the Company agrees to
                prepare and, within two hundred seventy (270) days following the
                Completion Date (as defined in the Sale and Purchase Agreement)
                and in any event not later than June 30, 2003 (or, if later, the
                date that the Company's report on Form 20-F is required to be
                filed with the Commission), to file with the Commission, one (1)
                registration statement for an offering to be made on a
                continuous basis pursuant to Rule 415 under the Securities Act,
                as such Rule may be amended from time to time, or any similar
                rule or regulation hereafter adopted by the Commission, covering
                all of the Registrable Securities held by the Holders (such
                registration, the "Shelf Registration Statement"). The Shelf
                Registration Statement shall be on Form F-3 under the

                                      246
<PAGE>

                Securities Act or another appropriate form selected by the
                Company (and reasonably acceptable to the participating Holders)
                permitting registration of such Registrable Securities for
                resale by the participating Holders in the manner or manners
                reasonably designated by them (not including underwritten
                offerings). The Company shall use its reasonable commercial best
                efforts to cause the Shelf Registration Statement to be declared
                effective by the Commission pursuant to the Securities Act no
                later than the one year anniversary of the Completion Date, and
                to keep the Shelf Registration Statement continuously effective
                under the Securities Act until the later of (i) the third
                anniversary of the Completion Date or (ii) the date on which all
                of such securities are eligible to be sold or distributed
                pursuant to Rule 144 (or any successor provision) under the
                Securities Act within any consecutive three month period
                (including, without limitation, pursuant to Rule 144(k)) without
                volume limitations (such period, the "Effectiveness Period");
                provided, that the Effectiveness Period shall be extended by
                that number of days which is equal to the aggregate number of
                days that the selling Holders are required to suspend use of the
                Shelf Registration Statement pursuant to actions or events
                described in Section 3 of this Agreement.

        (b)     Selling Securityholder Information. The Company may require each
                participating Holder to furnish to the Company such information
                regarding the Holder and the distribution of the Registrable
                Securities as the Company may from time to time reasonably
                require for inclusion in the Shelf Registration Statement, and
                the Company may exclude from such registration the Registrable
                Securities of any Holder that fails to furnish such information
                within twenty (20) business days after delivery of such request
                by the Company. Each Holder agrees to furnish to the Company all
                information required to be disclosed in order to make the
                information previously furnished to the Company by such Holder
                not misleading.

        (c)     The Company represents and warrants that it currently meets the
                requirements for use of Form F-3 for registration of the public
                resale of the Registrable Securities and has no knowledge of any
                facts which would cause the Company to fail to meet such
                requirements. In the event that after the Completion Date Form
                F-3 is not available for the registration of the public resale
                of Registrable Securities pursuant to the terms herein, the
                Company shall use reasonable efforts to (i) register the public
                resale of the Registrable Securities on another appropriate
                short form, reasonably acceptable to the Holders, and (ii)
                undertake to register the Registrable Securities on Form F-3 as
                soon as such form is available; PROVIDED, that the Company shall
                maintain the effectiveness of the Shelf Registration Statement
                then in effect until such time as a Shelf Registration Statement
                on Form F-3 covering the Registrable Securities has been
                declared effective; PROVIDED, further that the combined
                effectiveness period of all Shelf Registration Statements
                covering the Registrable Securities shall not be longer than the
                Effectiveness Period.

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2.2     REGISTRATION PROCEDURES.
        In connection with the preparation and filing of the Shelf Registration
        Statement, the Company shall, as expeditiously as practicable:

        (a)     prepare and file with the Commission a registration statement on
                Form F-3 under the Securities Act or another appropriate form
                selected by the Company (and reasonably acceptable to the
                participating Holders) for the disposition of the Registrable
                Securities of the Holders, which shall comply as to form in all
                material respects with the requirements of the applicable form
                and include all financial statements required by the Commission
                to be filed therewith, and the Company shall use its best
                efforts to cause such registration statement to become and
                remain effective (PROVIDED, HOWEVER, that before filing a
                registration statement or prospectus or any amendments or
                supplements thereto, or comparable statements under securities
                or blue sky laws of any jurisdiction, the Company will furnish
                to one counsel for the Holders participating in the planned
                offering (selected by the Holders of a majority of the
                Registrable Securities included in such registration) copies of
                all such documents proposed to be filed (including all exhibits
                thereto), which documents will be subject to the reasonable
                review and reasonable comment of such counsel;

        (b)     prepare and file with the Commission such pre- and
                post-effective amendments and supplements to such registration
                statement and the prospectus used in connection therewith as may
                be necessary to keep such registration statement effective until
                the expiration of the Effectiveness Period and to comply with
                the provisions of the Securities Act with respect to the sale or
                other disposition of all Registrable Securities covered by such
                registration statement in accordance with the intended methods
                of disposition by the seller or sellers thereof set forth in
                such registration statement;

        (c)     furnish, without charge, to each seller of such Registrable
                Securities such number of copies of such registration statement,
                each pre- and post-effective amendment and supplement thereto
                (in each case including all exhibits), and the prospectus
                included in such registration statement (including each
                preliminary prospectus) in conformity with the requirements of
                the Securities Act, and other documents, as such seller may
                reasonably request in order to facilitate the public sale or
                other disposition of the Registrable Securities owned by such
                seller (the Company hereby consenting to the use in accordance
                with all applicable laws and the provisions of this Agreement of
                each such registration statement (or amendment or post-effective
                amendment thereto) and each such prospectus (or preliminary
                prospectus or supplement thereto) by each such seller of
                Registrable Securities in

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                connection with the offering and sale of the Registrable
                Securities covered by such registration statement or
                prospectus);

        (d)     use its reasonable commercial best efforts to register or
                qualify the Registrable Securities covered by such registration
                statement under such other securities or "blue sky" laws of such
                jurisdictions as any sellers of Registrable Securities shall
                reasonably request, and do any and all other acts and things
                which may be reasonably necessary or advisable to enable such
                sellers to consummate the disposition of the Registrable
                Securities in such jurisdictions, except that in no event shall
                the Company be required to qualify to do business as a foreign
                corporation in any jurisdiction where it would not, but for the
                requirements of this paragraph (e), be required to be so
                qualified, to subject itself to taxation in any such
                jurisdiction or to consent to general service of process in any
                such jurisdiction;

        (e)     promptly notify each Holder selling Registrable Securities
                covered by such registration statement: (i) when the
                registration statement, any pre-effective amendment, the
                prospectus or any prospectus supplement related thereto or
                post-effective amendment to the registration statement has been
                filed and, with respect to the registration statement or any
                post-effective amendment, when the same has become effective
                (with such notification by fax or email on the same day as such
                filing or effectiveness); (ii) of any request by the Commission
                or state securities authority for amendments or supplements to
                the registration statement or the prospectus related thereto or
                for additional information; (iii) of the issuance by the
                Commission of any stop order suspending the effectiveness of the
                registration statement or the initiation of any proceedings for
                that purpose; (iv) of the receipt by the Company of any
                notification with respect to the suspension of the registration
                or qualification of any Registrable Securities for sale under
                the securities or blue sky laws of any jurisdiction or the
                initiation of any proceeding for such purpose; and (v) of the
                existence of any fact of which the Company becomes aware which
                results in the registration statement, the prospectus related
                thereto or any document incorporated therein by reference
                containing an untrue statement of a material fact or omitting to
                state a material fact required to be stated therein or necessary
                to make any statement therein not misleading; and, if the
                notification relates to an event described in clause (v), the
                Company shall (A) promptly, and in any event within ten (10)
                business days, prepare and file with the Commission a prospectus
                supplemented or amended so that, as thereafter delivered to the
                purchasers of such Registrable Securities, such prospectus shall
                not include an untrue statement of a material fact or omit to
                state a material fact required to be stated therein or necessary
                to make the statements therein in the light of the circumstances
                under which they were made not misleading and (B) promptly
                furnish to each such seller a reasonable number of copies of
                such supplemented or amended prospectus. In the event the
                Company shall give any such notice, the Effectiveness Period
                shall be

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                extended by the number of days during such period from and
                including the date of the giving of such notice to and including
                the date when each seller of any Registrable Securities covered
                by such registration statement shall have received the copies of
                the supplemented or amended prospectus;

        (f)     comply with all applicable rules and regulations of the
                Commission;

        (g)     (i) cause all such Registrable Securities covered by such
                registration statement to be listed on the principal US
                securities exchange on which similar securities issued by the
                Company are then listed (if any), if the listing of such
                Registrable Securities is then permitted under the rules of such
                exchange, or (ii) if no similar securities are then so listed,
                use its best efforts to cause all such Registrable Securities to
                be listed on a national securities exchange or, failing that,
                secure designation of all such Registrable Securities as a
                National Association of Securities Dealers, Inc. Automated
                Quotation System ("NASDAQ") "national market system security"
                within the meaning of Rule 11Aa2-1 of the Commission or, failing
                that, secure NASDAQ authorization for such securities and,
                without limiting the generality of the foregoing, take all
                reasonable commercial actions that may be required by the
                Company as the issuer of such Registrable Securities in order to
                facilitate the registration of at least two market makers as
                such with respect to such securities with the National
                Association of Securities Dealers, Inc. (the "NASD");

        (h)     provide and cause to be maintained a transfer agent and
                registrar for all such Registrable Securities covered by such
                registration statement not later than the effective date of such
                registration statement;

        (i)     deliver promptly to each Holder participating in the offering
                copies of all correspondence between the Commission and the
                Company, its counsel or auditors and all memoranda relating to
                discussions with the Commission or its staff with respect to the
                registration statement, other than those portions of any such
                correspondence and memoranda which contain information subject
                to attorney-client privilege with respect to the Company, and,
                upon receipt of such confidentiality agreements as the Company
                may reasonably request, make reasonably available for inspection
                by any seller of such Registrable Securities covered by such
                registration statement, and by any attorney, accountant or other
                agent retained by any such seller, all pertinent financial and
                other records, pertinent corporate documents and properties of
                the Company, and cause all of the Company's officers, directors
                and employees to supply all information reasonably requested by
                any such seller, attorney, accountant or agent in connection
                with such registration statement;

        (j)     use its reasonable commercial best efforts to obtain the
                withdrawal of any order suspending the effectiveness of the
                registration statement;

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        (k)     provide a CUSIP number for all Registrable Securities, not later
                than the effective date of the registration statement;

        (l)     furnish to each Holder participating in the offering, without
                charge, at least one signed copy of the registration statement
                and any post-effective amendments thereto, including financial
                statements and schedules, all documents incorporated therein by
                reference and all exhibits (including those incorporated by
                reference);

        (m)     cooperate with the selling Holders of Registrable Securities to
                facilitate the timely preparation and delivery of certificates
                not bearing any restrictive legends representing the Registrable
                Securities to be sold, and cause such Registrable Securities to
                be issued in such denominations and registered in such names in
                accordance with the instructions of the selling holders of
                Registrable Securities at least three business days prior to any
                sale of Registrable Securities; and

        (n)     take all such other commercially reasonable actions as are
                necessary or advisable in order to expedite or facilitate the
                disposition of such Registrable Securities.

        The Company may require as a condition precedent to the Company's
        obligations under this Section 2.2 that each seller of Registrable
        Securities as to which any registration is being effected furnish the
        Company such information regarding such seller and the distribution of
        such securities as the Company may from time to time reasonably request,
        provided that such information shall be used only in connection with
        such registration.

        Each Holder of Registrable Securities agrees that upon receipt of any
        notice from the Company of the happening of any event of the kind
        described in clause (v) of paragraph (e) of this Section 2.2, such
        Holder will discontinue such Holder's disposition of Registrable
        Securities pursuant to the registration statement covering such
        Registrable Securities until such Holder's receipt of the copies of the
        supplemented or amended prospectus contemplated by paragraph (e) of this
        Section 2.2 and, if so directed by the Company, will deliver to the
        Company (at the Company's expense) all copies, other than permanent file
        copies, then in such Holder's possession of the prospectus covering such
        Registrable Securities that was in effect at the time of receipt of such
        notice. In the event the Company shall give any such notice, the
        Effectiveness Period shall be extended by the number of days during such
        period from and including the date of the giving of such notice to and
        including the date when each seller of any Registrable Securities
        covered by such registration statement shall have received the copies of
        the supplemented or amended prospectus contemplated by paragraph (e) of
        this Section 2.2.

        If any such registration statement or comparable statement under "blue
        sky" laws refers to any Holder by name or otherwise as the Holder of any
        securities of the Company, then such Holder shall have the right to
        require (i) the insertion therein of language, in form and substance
        satisfactory to such Holder and the Company, to the effect that the
        holding by such Holder of such

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        securities is not to be construed as a recommendation by such Holder of
        the investment quality of the Company's securities covered thereby and
        that such holding does not imply that such Holder will assist in meeting
        any future financial requirements of the Company, or (ii) in the event
        that such reference to such Holder by name or otherwise is not in the
        judgment of the Company, as advised by counsel, required by the
        Securities Act or any similar federal statute or any state "blue sky" or
        securities law then in force, the deletion of the reference to such
        Holder.

2.3      REGISTRATION EXPENSES.
        (a)     "EXPENSES" shall mean any and all fees and expenses incident to
                the Company's performance of or compliance with this Agreement,
                including, without limitation: (i) Commission, stock exchange or
                NASD registration and filing fees and all listing fees and fees
                with respect to the inclusion of securities in NASDAQ, (ii) fees
                and expenses incurred in complying with United States or Israeli
                securities or state blue sky laws, (iii) printing expenses, (iv)
                messenger and delivery expenses, (v) fees and disbursements of
                counsel for the Company, (vi) fees and disbursements of all
                independent public accountants (including the expenses of any
                audit and/or "cold comfort" letter) and fees and expenses of
                other persons, including special experts, retained by the
                Company, (vii) fees associated with the issuance of the
                Company's American Depository Shares, evidenced by ADRs issued
                pursuant to the Deposit Agreement, dated as of January 24, 1996,
                by and among the Bank of New York, as depositary, the Company
                and holders of American Depositary Receipts (the "ADR
                FACILITY"), and (viii) fees and expenses, if any, relating to
                the maintenance, administration or amendment of the depository
                facility for the ADSs in connection with the sale of any
                Registration Securities (collectively, "EXPENSES").

        (b)     The Company shall pay all Expenses with respect to the
                registration contemplated by this Agreement whether or not such
                registration becomes effective or remains effective for the
                period contemplated by Section 2.1.

        (c)     Notwithstanding the foregoing, (x) the provisions of this
                Section 2.3 shall be deemed amended to the extent necessary to
                cause these expense provisions to comply with "blue sky" laws of
                each state in which the offering is made and (y) in connection
                with any registration hereunder, each Holder of Registrable
                Securities being registered shall pay all transfer taxes, if
                any, attributable to the Registrable Securities included in the
                offering by such Holder and (z) the Company shall, in the case
                of all registrations under this Agreement, be responsible for
                all its internal expenses (including, without limitation, all
                salaries and expenses of its officers and employees performing
                legal or accounting duties).

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2.4     NO REQUIRED SALE.
        Nothing in this Agreement shall be deemed to create an independent
        obligation on the part of any Holder to sell any Registrable Securities
        pursuant to any effective registration statement.

2.5     INDEMNIFICATION.
        (a)     In the event of any registration of any securities of the
                Company under the Securities Act pursuant to this Agreement, the
                Company will, and hereby does, indemnify and hold harmless, to
                the fullest extent permitted by law, the seller of any
                Registrable Securities covered by such registration statement,
                its directors, officers, fiduciaries, employees and stockholders
                or general and limited partners (and the directors, officers,
                employees and stockholders thereof), and each other Person, if
                any, who controls such seller within the meaning of the
                Securities Act, against any and all losses, claims, damages or
                liabilities, joint or several, actions or proceedings (whether
                commenced or threatened) in respect thereof ("CLAIMS") and
                expenses (including reasonable fees of counsel and any amounts
                paid in any settlement effected with the Company's consent,
                which consent shall not be unreasonably withheld or delayed) to
                which each such indemnified party may become subject under the
                Securities Act or otherwise, insofar as such Claims or expenses
                arise out of or are based upon (i) any untrue statement or
                alleged untrue statement of a material fact contained in any
                registration statement under which such securities were
                registered under the Securities Act or the omission or alleged
                omission to state therein a material fact required to be stated
                therein or necessary to make the statements therein not
                misleading, (ii) any untrue statement or alleged untrue
                statement of a material fact contained in any preliminary, final
                or summary prospectus or any amendment or supplement thereto,
                together with the documents incorporated by reference therein,
                or the omission or alleged omission to state therein a material
                fact required to be stated therein or necessary in order to make
                the statements therein, in the light of the circumstances under
                which they were made, not misleading, or (iii) any violation by
                the Company of any federal, state or common law rule or
                regulation applicable to the Company and relating to action
                required of or inaction by the Company in connection with any
                such registration, and the Company will reimburse any such
                indemnified party for any legal or other expenses reasonably
                incurred by such indemnified party in connection with
                investigating or defending any such Claim as such expenses are
                incurred; PROVIDED, HOWEVER, that the Company shall not be
                liable to any such indemnified party in any such case to the
                extent such Claim or expense arises out of or is based upon any
                untrue statement or alleged untrue statement of a material fact
                or omission or alleged omission of a material fact made in such
                registration statement or amendment thereof or supplement
                thereto or in any such prospectus or any preliminary, final or
                summary prospectus in reliance upon and in conformity with
                written information furnished to the Company by or on behalf of
                such indemnified party specifically for use therein; and

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                PROVIDED, FURTHER, that in no event shall the Company indemnify,
                or be deemed to indemnify, any such Person in connection with
                any actions taken by such Person in his or her capacity as a
                director of the Company to the extent that such indemnification
                is not permitted by applicable law. Such indemnity and
                reimbursement of expenses shall remain in full force and effect
                regardless of any investigation made by or on behalf of such
                indemnified party and shall survive the transfer of such
                securities by such seller.

        (b)     Each Holder of Registrable Securities that are included in the
                securities as to which any registration under this Agreement is
                being effected shall, severally and not jointly, indemnify and
                hold harmless (in the same manner and to the same extent as set
                forth in paragraph (a) of this Section 2.5) to the extent
                permitted by law the Company, its officers and directors, each
                Person controlling the Company within the meaning of the
                Securities Act and all other prospective sellers and their
                directors, officers, general and limited partners and respective
                controlling Persons with respect to any untrue statement or
                alleged untrue statement of any material fact in, or omission or
                alleged omission of any material fact from, such registration
                statement, any preliminary, final or summary prospectus
                contained therein, or any amendment or supplement thereto, if
                such statement or alleged statement or omission or alleged
                omission was made in reliance upon and in conformity with
                written information furnished to the Company or its
                representatives by or on behalf of such Holder specifically for
                use therein and reimburse such indemnified party for any legal
                or other expenses reasonably incurred in connection with
                investigating or defending any such Claim as such expenses are
                incurred; PROVIDED, HOWEVER, that the aggregate amount which any
                such Holder shall be required to pay pursuant to this Section
                2.5(b) and Sections 2.5(c) and (e) shall in no case be greater
                than the amount of the net proceeds received by such person upon
                the sale of the Registrable Securities pursuant to the
                registration statement giving rise to such claim. Such indemnity
                shall remain in full force and effect regardless of any
                investigation made by or on behalf of such indemnified party and
                shall survive the transfer of such securities by such Holder.

        (c)     Indemnification similar to that specified in the preceding
                paragraphs (a) and (b) of this Section 2.5 (with appropriate
                modifications) shall be given by the Company and each seller of
                Registrable Securities with respect to any required registration
                or other qualification of securities under any state securities
                and "blue sky" laws.

        (d)     Any person entitled to indemnification under this Agreement
                shall notify promptly the indemnifying party in writing of the
                commencement of any action or proceeding with respect to which a
                claim for indemnification may be made pursuant to this Section
                2.5, but the failure of any indemnified party to provide such
                notice shall not relieve the indemnifying party of its
                obligations under the preceding paragraphs of this Section 2.5,
                except to the extent the indemnifying party is

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                materially prejudiced thereby and shall not relieve the
                indemnifying party from any liability which it may have to any
                indemnified party otherwise than under this Article 2. In case
                any action or proceeding is brought against an indemnified party
                and it shall notify the indemnifying party of the commencement
                thereof, the indemnifying party shall be entitled to participate
                therein and, unless in the reasonable opinion of outside counsel
                to the indemnified party a conflict of interest between such
                indemnified and indemnifying parties may exist in respect of
                such claim, to assume the defense thereof jointly with any other
                indemnifying party similarly notified, to the extent that it
                chooses, with counsel reasonably satisfactory to such
                indemnified party (who shall not, except with the consent of the
                indemnified party, be counsel to the indemnifying party), and
                after notice from the indemnifying party to such indemnified
                party that it so chooses, the indemnifying party shall not be
                liable to such indemnified party for any legal or other expenses
                subsequently incurred by such indemnified party in connection
                with the defense thereof other than reasonable costs of
                investigation; PROVIDED, HOWEVER, that (i) if the indemnifying
                party fails to take reasonable steps necessary to defend
                diligently the action or proceeding within 20 days after
                receiving notice from such indemnified party that the
                indemnified party believes it has failed to do so; or (ii) if
                such indemnified party who is a defendant in any action or
                proceeding which is also brought against the indemnifying party
                reasonably shall have concluded that there may be one or more
                legal defenses available to such indemnified party which are not
                available to the indemnifying party; or (iii) if representation
                of both parties by the same counsel is otherwise inappropriate
                under applicable standards of professional conduct, then, in any
                such case, the indemnified party shall have the right to assume
                or continue its own defense as set forth above (but with no more
                than one firm of counsel for all indemnified parties in each
                jurisdiction, except to the extent any indemnified party or
                parties reasonably shall have concluded that there may be legal
                defenses available to such party or parties which are not
                available to the other indemnified parties or to the extent
                representation of all indemnified parties by the same counsel is
                otherwise inappropriate under applicable standards of
                professional conduct) and the indemnifying party shall be liable
                for any expenses therefor. No indemnifying party shall, without
                the written consent of the indemnified party, effect the
                settlement or compromise of, or consent to the entry of any
                judgment with respect to, any pending or threatened action or
                claim in respect of which indemnification or contribution may be
                sought hereunder (whether or not the indemnified party is an
                actual or potential party to such action or claim) unless such
                settlement, compromise or judgment (A) includes an unconditional
                release of the indemnified party from all liability arising out
                of such action or claim and (B) does not include a statement as
                to or an admission of fault, culpability or a failure to act, by
                or on behalf of any indemnified party.

        (e)     If for any reason the foregoing indemnity is unavailable or is
                insufficient to hold harmless an indemnified party under
                Sections 2.5(a), (b) or (c),

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                then each indemnifying party shall contribute to the amount paid
                or payable by such indemnified party as a result of any Claim in
                such proportion as is appropriate to reflect the relative fault
                of the indemnifying party, on the one hand, and the indemnified
                party, on the other hand, with respect to such offering of
                securities. The relative fault shall be determined by reference
                to, among other things, whether the untrue or alleged untrue
                statement of a material fact or the omission or alleged omission
                to state a material fact relates to information supplied by the
                indemnifying party or the indemnified party and the parties'
                relative intent, knowledge, access to information and
                opportunity to correct or prevent such untrue statement or
                omission. If, however, the allocation provided in the second
                preceding sentence is not permitted by applicable law, then each
                indemnifying party shall contribute to the amount paid or
                payable by such indemnified party in such proportion as is
                appropriate to reflect not only such relative faults but also
                the relative benefits of the indemnifying party and the
                indemnified party as well as any other relevant equitable
                considerations. The parties hereto agree that it would not be
                just and equitable if contributions pursuant to this Section
                2.5(e) were to be determined by pro rata allocation or by any
                other method of allocation which does not take account of the
                equitable considerations referred to in the preceding sentences
                of this Section 2.5(e). The amount paid or payable in respect of
                any Claim shall be deemed to include any legal or other expenses
                reasonably incurred by such indemnified party in connection with
                investigating or defending any such Claim. No person guilty of
                fraudulent misrepresentation (within the meaning of Section
                11(f) of the Securities Act) shall be entitled to contribution
                from any person who was not guilty of such fraudulent
                misrepresentation. Notwithstanding anything in this Section
                2.5(e) to the contrary, no indemnifying party (other than the
                Company) shall be required pursuant to this Section 2.5(e) to
                contribute any amount in excess of the net proceeds received by
                such indemnifying party from the sale of Registrable Securities
                in the offering to which the losses, claims, damages or
                liabilities of the indemnified parties relate, less the amount
                of any indemnification payment made pursuant to Sections 2.5(b)
                and (c).

        (f)     The indemnity agreements contained herein shall be in addition
                to any other rights to indemnification or contribution which any
                indemnified party may have pursuant to law or contract and shall
                remain operative and in full force and effect regardless of any
                investigation made or omitted by or on behalf of any indemnified
                party and shall survive the transfer of the Registrable
                Securities by any such party.

        (g)     The indemnification and contribution required by this Section
                2.5 shall be made by periodic payments of the amount thereof
                during the course of the investigation or defense, as and when
                bills are received or expense, loss, damage or liability is
                incurred.

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3       "Market Stand-Off" Agreement/Black-Out Periods.

        (a)     During the Effectiveness Period, each Holder that, at any time
                within twenty (20) trading days prior to the effectiveness of
                the registration statement referred to below, owns 5% or more of
                the Company's issued and outstanding equity securities, if
                requested by the Company and the managing underwriter, shall
                agree that, during the period of ninety (90) days (or such
                lesser time period as is agreed to by all officers and directors
                of the Company and all holders of 5% or more of the Company's
                issued and outstanding equity securities) following the
                effective date of a registration statement of the Company filed
                under the Securities Act in connection with an underwritten
                offering, it shall not sell or otherwise transfer or dispose of
                (other than to donees or partners who agree to be similarly
                bound) any ADSs or Ordinary Shares of the Company held by it
                except any ADSs or Ordinary Shares of such Holder included in
                such registration; PROVIDED, HOWEVER, that any Holder that holds
                less than 5% of the Company's issued and outstanding equity
                securities for each of the twenty (20) trading days prior to the
                effectiveness of such registration statement may, commencing on
                the thirty-first (31st) day after the effective date of the
                registration statement, sell ADSs or Ordinary Shares
                representing up to the greater of (x) 1% of the Company's then
                issued and outstanding equity securities or (y) the average
                weekly trading volume of the Company's equity securities during
                the four week period ending on the effective date of the
                registration statement; and PROVIDED, FURTHER, that:

                (i)     the foregoing agreement by the Holder shall be in
                        writing in a form reasonably satisfactory to the Holder;

                (ii)    such agreement shall be applicable only to a
                        registration statement initiated by the Company which
                        covers ADSs or Ordinary Shares to be sold on its behalf
                        to the public in a firmly committed underwritten
                        offering; and

                (iii)   all officers and directors of the Company and all
                        holders of 5% or more of the Company's issued and
                        outstanding equity securities enter into similar
                        agreements.

                (b)     Notwithstanding anything herein to the contrary, the
                        Company shall be entitled to postpone or suspend (but
                        not for a period exceeding 60 days or until the Company
                        notifies the Holders of the termination of any black-out
                        period) the filing or effectiveness of a registration
                        statement otherwise required to be prepared and filed by
                        it pursuant to Section 2.1 or require the Holders not to
                        sell under the Shelf Registration Statement as provided
                        for under Section 2.1 if the Company determines, in its
                        good faith judgment, or if the managing underwriter for
                        any underwritten offering advises the Company in
                        writing, that such registration and offering, continued
                        effectiveness or sale would interfere with any material
                        financing, acquisition, disposition, corporate
                        reorganization or other material transaction involving
                        the Company or

                                      257
<PAGE>

                        any of its subsidiaries or public disclosure thereof
                        would be required prior to the time such disclosure
                        might otherwise be required, or when the Company is in
                        possession of material information that it deems
                        advisable not to disclose in a registration statement (a
                        "VALID BUSINESS REASON BLACK-OUT PERIOD"), PROVIDED,
                        HOWEVER, that (A) the Holders shall not be prohibited
                        from selling ADSs or Ordinary Shares pursuant to the
                        Shelf Registration Statement for 120 days after the
                        Shelf Registration Statement is declared effective by
                        the Commission, (B) the aggregate number of days
                        included in all Valid Business Reason Blackout Periods
                        during any consecutive six (6) months shall not exceed
                        sixty (60) days and (C) there shall not be more than
                        four (4) Valid Business Reason Black-Out Periods during
                        any consecutive twelve (12) month period. The Company
                        shall not be entitled to initiate a Valid Business
                        Reason Black-Out Period unless it shall (i) to the
                        extent permitted or required by agreements with other
                        security holders of the Company, concurrently prohibit
                        sales by such other security holders under registration
                        statements covering securities held by such other
                        security holders during such Valid Business Reason
                        Blackout Period and (ii) concurrently prohibit purchases
                        and sales in the open market by directors and executive
                        officers of the Company during such Valid Business
                        Reason Blackout Period.

                (c)     Each Holder further acknowledges and agrees that such
                        Holder may have access to confidential information that
                        constitutes material non-public information regarding
                        the Company for purposes of the securities laws of the
                        United States, and that such laws prohibit any person
                        who has material non-public information about a company
                        from purchasing or selling securities of such company,
                        or from communicating such information to any other
                        person under circumstances in which it is reasonably
                        foreseeable that such person is likely to purchase or
                        sell such securities.


4       General.

4.1     ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES.
        The Company agrees that it shall not effect or permit to occur any
        combination or subdivision of shares or any change in the number of
        Ordinary Shares represented by each ADS unless and until the Company has
        filed a registration statement with the Commission (or duly amended an
        existing effective registration statement), such that, after giving
        effect to such combination, subdivision or change, there shall be a
        sufficient number of registered ADSs to represent all Ordinary Shares
        underlying Registrable Securities held by all of the Holders pursuant to
        this Agreement.


4.2     MERGERS, ETC.
        The Company shall not, directly or indirectly, enter into any merger,
        consolidation or reorganization in which the Company shall not be the
        surviving corporation unless the proposed surviving corporation shall,
        prior to such merger, consolidation or reorganization, agree in writing
        to assume the

                                      258
<PAGE>

        obligations of the Company under this Agreement, and thereafter
        references hereunder to "Registrable Securities" shall be deemed to be
        references to the securities that the Holders of the Registrable
        Securities receive in exchange for Registrable Securities under any such
        merger, consolidation or reorganization; PROVIDED, HOWEVER, that the
        provisions of this Agreement shall not apply in the event of any merger,
        consolidation or reorganization in which the Company is not the
        surviving corporation if all Holders of Registrable Securities are
        entitled to receive in exchange for their Registrable Securities
        consideration consisting solely of (i) cash, (ii) securities of the
        acquiring corporation that may be immediately sold to the public without
        registration under the Securities Act or (iii) securities of the
        acquiring corporation that the acquiring corporation has agreed to
        register within 90 days of the completion of the transaction for resale
        to the public pursuant to the Securities Act.


4.3     RULE 144
        For so long as any Holder holds Registrable Securities and the Company
        is subject to the reporting requirements of the Securities Exchange Act
        of 1934, as amended (the "EXCHANGE ACT"), the Company covenants that it
        will timely file the reports required to be filed by it under the
        Securities Act or the Exchange Act (including, but not limited to, the
        reports under Sections 13 and 15(d) of the Exchange Act referred to in
        subparagraph (c)(1) of Rule 144 under the Securities Act), and will take
        such further action as any Holder of Registrable Securities may
        reasonably request, all to the extent required from time to time to
        enable such Holder to sell Registrable Securities without registration
        under the Securities Act within the limitation of the exemptions
        provided by (i) Rule 144 under the Securities Act, as such Rule may be
        amended from time to time, or (ii) any similar rule or regulation
        hereafter adopted by the Commission.


4.4     NOMINEES FOR BENEFICIAL OWNERS.
        If Registrable Securities are held by a nominee for the beneficial owner
        thereof, the beneficial owner thereof may, at its option, be treated as
        the Holder of such Registrable Securities for purposes of any request or
        other action by any Holder or Holders of Registrable Securities pursuant
        to this Agreement (or any determination of any number or percentage of
        Ordinary Shares constituting Registrable Securities held by any Holder
        or Holders of Registrable Securities contemplated by this Agreement);
        provided that the Company shall have received assurances reasonably
        satisfactory to it of such beneficial ownership.


4.5     AMENDMENTS AND WAIVERS.
         This Agreement may be amended, modified, supplemented or waived only
         upon the written agreement of the party against whom enforcement of
         such amendment, modification, supplement or waiver is sought.


4.6     NOTICES.
        Except as otherwise provided in this Agreement, notices and other
        communications under this Agreement shall be in writing and delivered

                                      259
<PAGE>

        personally, by telecopy (with confirmation sent within three business
        days by overnight courier) or by overnight courier, addressed to such
        party at the address set forth below:

                (i)     if to the Company, to:

                        [Nice]

                        with a copy to:

                        Brown Raysman Millstein Felder & Steiner LLP
                        900 Third Avenue
                        New York, NY 10022
                        Telecopy: (212) 895-2900
                        Attn: David M. Warburg, Esq.

                (ii)    if to the Initial Holder, to:

                        [Thales]

                        with a copy to:

                        Fried, Frank, Harris, Shriver & Jacobson
                        Suite 800
                        1001 Pennsylvania Ave., NW
                        Washington, DC   20004
                        Telecopy:  (202) 639-7004
                        Attn:  Andrew P. Varney, Esq.

        Each Holder, by written notice given to the Company in accordance with
        this Section 4.6 may change the address to which such notice or other
        communications are to be sent to such Holder. All such notices and
        communications shall be deemed to have been received on the date of
        delivery thereof, if delivered by hand, on the fifth day after the
        mailing thereof, if mailed, on the next day after the sending thereof,
        if by overnight courier, when answered back if telexed and when receipt
        is acknowledged, if telecopied.


4.7     MISCELLANEOUS.
                (a)     This Agreement shall be binding upon and inure to the
                        benefit of and be enforceable by the parties hereto and
                        the respective successors and assigns of the parties
                        hereto, whether so expressed or not. No Person other
                        than a Holder shall be entitled to any benefits under
                        this Agreement, except as otherwise expressly provided
                        herein. This Agreement and the rights of the parties
                        hereunder may be assigned by any of the parties hereto
                        to any transferee of Registrable Securities, provided
                        that such transferee agrees in writing to be bound by
                        this Agreement and the transfer restrictions set forth
                        in Schedule 11 to the Sale and Purchase Agreement in
                        respect of such Registrable Securities.

                                      260
<PAGE>

                (b)     This Agreement (with the documents referred to herein or
                        delivered pursuant hereto) embodies the entire agreement
                        and understanding between the parties hereto and
                        supersedes all prior agreements and understandings
                        relating to the subject matter hereof.

                (c)     This Agreement shall be construed and enforced in
                        accordance with and governed by the laws of the State of
                        New York without giving effect to the conflicts of law
                        principles thereof.

                (d)     The headings in this Agreement are for convenience of
                        reference only and shall not limit or otherwise affect
                        the meaning hereof. All Section references are to this
                        Agreement unless otherwise expressly provided.

                (e)     This Agreement may be executed in any number of
                        counterparts, each of which shall be an original, but
                        all of which together shall constitute one instrument.

                (f)     Any term or provision of this Agreement which is invalid
                        or unenforceable in any jurisdiction shall, as to such
                        jurisdiction, be ineffective to the extent of such
                        invalidity or unenforceability without rendering invalid
                        or unenforceable the remaining terms and provisions of
                        this Agreement or affecting the validity or
                        enforceability of any of the terms or provisions of this
                        Agreement in any other jurisdiction.

                (g)     It is hereby agreed and acknowledged that it will be
                        impossible to measure in money the damages that would be
                        suffered if the parties fail to comply with any of the
                        obligations herein imposed on them and that in the event
                        of any such failure, an aggrieved person will be
                        irreparably damaged and will not have an adequate remedy
                        at law. Any such person shall, therefore, be entitled to
                        injunctive relief, including specific performance, to
                        enforce such obligations, without the posting of any
                        bond and if any action should be brought in equity to
                        enforce any of the provisions of this Agreement, none of
                        the parties hereto shall raise the defense that there is
                        an adequate remedy at law.

                (h)     Each party hereto shall do and perform or cause to be
                        done and performed all such further acts and things and
                        shall execute and deliver all such other agreements,
                        certificates, instruments, and documents as any other
                        party hereto reasonably may request in order to carry
                        out the intent and accomplish the purposes of this
                        Agreement and the consummation of the transactions
                        contemplated hereby.

                                      261
<PAGE>

4.8     NO INCONSISTENT AGREEMENTS; SECURITIES REMAIN SUBJECT TO OTHER
        CONTRACTUAL RESTRICTIONS.
        Neither the Company nor any Holder has, prior to the date of this
        Agreement entered into, or will, on or after the date of this Agreement
        enter into, any agreement with respect to its securities which is
        inconsistent with the rights granted in this Agreement or otherwise
        conflicts with the provisions hereof. Notwithstanding this Agreement and
        the effectiveness of any Shelf Registration Statement, the Holder
        acknowledges that pursuant to the terms of the Sale and Purchase
        Agreement, the ADSs and Ordinary Shares issued to the Holder are subject
        to certain restrictions on transfer pursuant to Schedule 11 to the Sale
        and Purchase Agreement, including prohibitions on any transfers within
        the first year following their issuance, limitations on transfers in
        subsequent periods, and limitations on the manner of sale (including
        pricing) of ADSs and any American Depositary Receipts representing ADSs,
        and that such restrictions shall apply, in accordance with the terms of
        the Sale and Purchase Agreement to sales or other transfers proposed to
        be effected pursuant to any Shelf Registration Statement.

                                      262
<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set forth above.


                                           [NICE]


                                           By:__________________________________

                                           Name:

                                           Title:




                                           [THALES]


                                           By:__________________________________

                                           Name:

                                           Title:


                                      263
<PAGE>

                              STANDSTILL AGREEMENT



        STANDSTILL AGREEMENT (this "AGREEMENT"), dated as of _____________, 2002
[TO BE DELIVERED AT, AND EFFECTIVE AS OF THE EXECUTION OF THE DEFINITIVE SALE
AND PURCHASE AGREEMENT], by and between [THALES] ("[THALES]"), a
________________ having an address at __________________ and [NICE] ("[Nice]"),
a ________________ having an address at __________________.



                                    RECITALS



        WHEREAS, Thales and Nice have entered into that certain Sale and
Purchase Agreement, dated as of _________, 2002 (the "SALE AND PURCHASE
AGREEMENT") whereby Thales has agreed to sell, and Nice has agreed to purchase,
the Business (as defined in the Sale and Purchase Agreement) as a going concern
and the Assets (as defined in the Sale and Purchase Agreement), either directly
or through its subsidiaries, upon the terms of the Sale and Purchase Agreement
(the "TRANSACTION"); and


        WHEREAS, Nice is an Israeli company whose American Depository Receipts
("ADRS") are listed on the NASDAQ Stock Market and is subject to the applicable
provisions of the Securities Act of 1933, the Securities and Exchange Act of
1934 (the "EXCHANGE ACT") and the rules and regulations promulgated by the
Securities and Exchange Commission and NASDAQ, and Thales will be required to
effect certain filings pursuant to those laws, rules and regulations from time
to time with respect to its ownership of ___________ Ordinary Shares and/or ADRs
evidencing such Ordinary Shares in Nice (the "NICE SHARES") issued as partial
consideration in the Transaction; and


        WHEREAS, as a material condition of Nice entering into the Sale and
Purchase Agreement, Nice requires that Thales execute and deliver this
Agreement; and


        WHEREAS, Nice and Thales have agreed that it is in their mutual
interests to enter into this Agreement as hereinafter described.


        NOW, THEREFORE, in consideration of the premises, covenants, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

                                      264
<PAGE>

        1.      RESTRICTION ON CERTAIN ACTIONS.


                        (a)     During the term of this Agreement, neither
                                Thales nor any of its controlled Affiliates (as
                                such term is defined in Rule 12b-2 of Regulation
                                12B under the Exchange Act) (collectively, the
                                "THALES Group") will do any of the following
                                without the prior written consent of the Board
                                of Directors of Nice:


                (i)     acquire, offer to acquire, or agree to acquire, directly
                        or indirectly, including as part of a group (within the
                        meaning of Section 13(d)(3) of the Exchange Act), by
                        purchase or otherwise, beneficial ownership of any
                        securities or direct or indirect rights to acquire any
                        securities of Nice if, as a result of such acquisition:


                (A)     the securities so acquired or offered or agreed to be
                        acquired by any one or more members of the Thales Group,
                        together with all securities of Nice (excluding the
                        Share Consideration) acquired by all members of the
                        Thales Group within the twelve months preceding such
                        acquisition, in the aggregate represent or, if so
                        acquired, would represent more than two percent (2%) of
                        the number of Ordinary Shares of Nice issued and
                        outstanding as of the Completion Date (as defined in the
                        Sale and Purchase Agreement) after giving effect to the
                        Nice securities to be issued at Completion (as defined
                        in the Sale and Purchase Agreement); or


                (B)     the securities so acquired or offered or agreed to be
                        acquired by any one or more members of the Thales Group,
                        together will all securities of Nice (including any
                        portion of the Share Consideration) then beneficially
                        owned by any member of the Thales Group, in the
                        aggregate represent or, if so acquired would represent
                        more than twenty-four percent (24%) of the number of
                        Ordinary Shares of Nice issued and outstanding as of the
                        Completion Date after giving effect to the Nice
                        securities to be issued at Completion.


                (ii)    at any time during which Thales has one or more nominees
                        on the Board of Directors of Nice or during which Thales
                        has no nominees on the Board due to their voluntary
                        resignation, or due to an Acceptable Reason,

                                      265
<PAGE>


                (A)     grant any proxies (as defined in the Exchange Act) with
                        respect to any voting securities of Nice, or securities
                        convertible or exchangeable into such securities (except
                        as recommended by the Board of Directors of Nice) or
                        deposit any such securities in a voting trust or enter
                        into any other arrangement or agreement with respect to
                        the voting thereof; or


                (B)     make, or in any way participate in, directly or
                        indirectly, any solicitation of proxies to vote (as such
                        terms are used in the rules of the Securities and
                        Exchange Commission), or seek to advise or influence any
                        person or entity with respect to the voting of any
                        voting securities of Nice;


        PROVIDED that, notwithstanding the foregoing, Thales shall be entitled
        to accept or participate in any unsolicited proposal from any
        independent third party with respect to any of the transactions
        described in the foregoing clauses (A) and (B) on the same terms, and
        subject to the same conditions, as would apply to any other shareholder
        of Nice;


                (iii)   offer, propose, seek to enter into, make any public
                        announcement with respect to, or otherwise solicit (with
                        or without conditions), any acquisition transaction,
                        business combination or other similar extraordinary
                        transaction involving Nice or any of its subsidiaries or
                        any of its or their securities or assets; PROVIDED that,
                        notwithstanding the foregoing, Thales shall be entitled
                        to accept or participate in any unsolicited proposal
                        from any independent third party with respect to any
                        such transaction on the same terms, and subject to the
                        same conditions, as would apply to any other shareholder
                        of Nice; or


                (iv)    request Nice or any of its representatives, directly or
                        indirectly, to amend or waive any provision of this
                        Agreement.


        2. TERM. The term of this Agreement shall be for the period commencing
        on the date hereof and ending on the second anniversary of Completion
        (as defined in the Sale and Purchase Agreement); PROVIDED that this
        Agreement shall terminate, and be of no further force or effect,
        immediately upon

                                      266
<PAGE>

        termination of the Sale and Purchase Agreement; and PROVIDED, FURTHER
        that, in the event that, for any reason other than a Bona Fide Dispute
        or an Acceptable Reason (each as defined in Schedule 12 to the Sale and
        Purchase Agreement), Thales' nominees to the Board of Directors of Nice
        are not appointed or re-appointed by Nice, or are removed or replaced by
        Nice, this Agreement shall terminate and be of no further force or
        effect (but, for the avoidance of doubt, this Agreement will not
        automatically terminate upon the voluntary resignation of Thales'
        nominees).


        3.REMEDIES. Thales acknowledges and agrees that (i) the provisions of
        this Agreement are reasonable and necessary to protect the proper and
        legitimate interests of Nice and (ii) Nice would be irreparably harmed
        in the event that any of the provisions of this Agreement were not
        performed in accordance with their specific terms or were otherwise
        breached, making any remedy at law inadequate. Accordingly, Thales
        further acknowledges and agrees that (i) Nice shall be entitled to an
        injunction and/or injunctions to redress breaches or threatened breaches
        hereof and to specific performance, in addition to any other appropriate
        relief, all of the same being cumulative, and (ii) that Nice may apply
        to any court of competent jurisdiction for specific performance,
        injunctive or other relief to enforce this Agreement and/or to prevent
        any violation of it, and shall not be required to post any bond as a
        condition of procuring such injunctive or other equitable relief.


        4.      MISCELLANEOUS.


                4.1.    ENTIRE AGREEMENT. This Agreement and the Sale and
                        Purchase Agreement constitutes the entire agreement
                        between the parties hereto and supersedes any prior
                        understandings, agreements, or representations by or
                        between the parties, written or oral, to the extent they
                        relate in any way to the subject matter hereof.


                4.2.    SEVERABILITY. If any term, provision or restriction
                        contained in this Agreement is held invalid, void, or
                        unenforceable by a court of competent jurisdiction, the
                        remaining terms and provisions hereof shall remain in
                        full force and effect and shall in no way be affected,
                        impaired or invalidated.


                4.3.    SUCCESSOR AND ASSIGNS. This Agreement shall be binding
                        upon Thales and its respective heirs, personal
                        representatives, and successors, and shall inure to the
                        benefit of Nice and its successors and assigns.

                                      267
<PAGE>

                4.4.    GOVERNING LAW. This Agreement shall be governed by and
                        construed in accordance with the domestic laws of the
                        State of New York without giving effect to any choice or
                        conflict of law provision or rule (whether of the State
                        of New York or any other jurisdiction) that would cause
                        the application of the laws of any jurisdiction other
                        than the State of New York.


                4.5.    AMENDMENTS AND WAIVERS. No amendment of any provision of
                        this Agreement shall be valid unless the same shall be
                        in writing and signed by Nice. No waiver by Nice of any
                        default or breach hereunder, whether intentional or not,
                        shall be deemed to extend to any prior or subsequent
                        default or breach hereunder or affect in any way any of
                        Nice's rights arising by virtue of any prior or
                        subsequent such occurrence.


                        4.6. CONSTRUCTION. The parties hereto have participated
                        jointly in the negotiation and drafting of this
                        Agreement. In the event an ambiguity or question of
                        intent or interpretation arises, this Agreement shall be
                        construed as if drafted jointly by all of the parties
                        and no presumption or burden of proof shall arise
                        favoring or disfavoring any party by virtue of the
                        authorship of any of the provisions of this Agreement.


                        4.7. COUNTERPARTS. This Agreement may be executed in one
                        or more counterparts, each of which shall be deemed an
                        original but all of which together will constitute one
                        and the same instrument.


                                      268
<PAGE>


        y IN WITNESS WHEREOF, the parties hereto have caused this Standstill
Agreement to be executed by their duly authorized officers on the date first
above written.





                                              [THALES]





                                              By:___________________________

                                              Name:

                                              Title:





                                              [NICE]





                                              By:___________________________

                                              Name:

                                              Title:



                                      269
<PAGE>

                                   SCHEDULE 12

                         TRANSITIONAL SERVICES AGREEMENT






                                      270
<PAGE>

DATED                                                                       2001







                                   THALES (1)





                                       AND





                                    NICE (2)









                      -------------------------------------



                         TRANSITIONAL SERVICES AGREEMENT



                      ------------------------------------


                                      271
<PAGE>

CONTENTS





1        Definitions and Interpretation

2        Provision of Services

3        Service Fees

4        Vehicle Leases and Cards

5        Warranties and Limitations of Liability

6        Force Majeure

7        Modifications

8        Termination

9        Consequences of Termination

10       Sub-contracting, Assignment and Affiliates

11       Confidentiality

12       Entire Agreement and Variation of Terms

13       Waiver; Remedies

14       Severability of Provisions

15       Notices

16       Counterparts

17       Dispute Resolution

18       Governing Law and Jurisdiction



Schedules

1        Services

2        Vehicles

3        Terms and Conditions relating to Secondments


                                      272
<PAGE>

THIS AGREEMENT is made the           day of                                2002



BETWEEN:



(1)     [Thales] a French societe anonyme having its registered office at 173
        Boulevard Haussmann, Paris (75008) ("Thales"); and



(2)     [Nice] an Israeli company having its registered office at Hapnina
        Street, Raanana, 43107, Israel ("Nice")



BACKGROUND



(A)     Thales, Nice and others entered into an agreement for the sale and
        purchase of the business and assets of certain Thales subsidiaries on [
        ] July 2002 (the "Sale Agreement").



(B)     This Agreement is the Transitional Services Agreement referred to in the
        Sale Agreement and describes the arrangements for the provision of
        certain services and facilities by Thales and certain Affiliates of
        Thales to Nice on a temporary basis following Completion (as defined in
        the Sale Agreement).



(C)     This Agreement also makes provision relating to the assignment of leases
        of vehicles and the use of petrol cards.



IT IS AGREED AS FOLLOWS:



1       DEFINITIONS AND INTERPRETATION

                                      273
<PAGE>

1.1     Words and expressions defined in the Sale Agreement shall have the same
        meaning in this Agreement, and the following words and expressions in
        this Agreement shall have the meanings respectively set opposite them:

<TABLE>
<CAPTION>
<S>                                                  <C>

         "ACTUAL COSTS"                              has the meaning given at clause 3.2;



         "CARDS"                                     those petrol cards issued to employees  who
                                                     have the benefit of a company car;



         "CONTRACTS"                                 the PHH Lease Contract and the PHH Service
                                                     Contract and the HSBC Lease Contract;



         "DISPUTE RESOLUTION PROCEDURE"              the procedure for resolving disputes under this
                                                     Agreement described in clause 19;



         "HSBC LEASE CONTRACT"                       The Contract Hire Master Agreement dated 2
                                                     August 2001 between Thales Corporate Services
                                                     Limited and HSBC Vehicle Finance (UK) Limited as
                                                     amended by an Endorsement dated 2 August 2001;

</TABLE>

                                      274
<PAGE>

<TABLE>
<CAPTION>
<S>                                                  <C>

         "PHH LEASE CONTRACT"                        the Contract Hire Agreement dated 27 March 1997
                                                     between Racal Electronics Plc (now Thales
                                                     Electronics Plc) and PHH Vehicle Management
                                                     Services PLC (now Arval PHH Business Solutions
                                                     Limited) as amended by an Addendum Agreement
                                                     dated 25 July 2001;



         "PHH SERVICES CONTRACT"                     the Master Maintenance and Management Services
                                                     Agreement dated 13 August 1997 between Racal
                                                     Electronics Plc (now Thales Electronics Plc) and
                                                     PHH Vehicle Management Services PLC (now Arval
                                                     PHH Business Solutions Limited);



         "PHH VEHICLES"                              those vehicles details of which are at Part 1 of
                                                     Schedule 4;


         "PRIOR PERIOD"                              the 6-month period immediately preceding the
                                                     Completion Date;

         "SALE AGREEMENT"                            the agreement dated [ ] July 2002 made between
                                                     Thales, Nice and others;

         "SERVICE COMMENCEMENT DATE"                 the Completion Date;

         "SERVICE FEES"                              the amounts to be paid for the provision of the
                                                     Services pursuant to this Agreement;

         "SERVICE PROVIDER"                          the party noted in Schedule 1 as providing a
                                                     Service in accordance with this Agreement;

         "SERVICE PREMIUM"                           the amount being a percentage of Actual Costs
                                                     payable in respect of the Services as part of
                                                     the Service Fee and specified for each Service
                                                     at Schedule 1;
</TABLE>

                                      275
<PAGE>
<TABLE>
<CAPTION>
<S>                                                  <C>

        "SERVICE RECIPIENT"                          the party noted in Schedule 1 as receiving a
                                                     Service in accordance with this Agreement;

        "SERVICES"                                   the services numbered Service 1 to Service 9
                                                     more particularly described in Schedule 1;

        "SERVICE                                     TERMINATION DATE" the date noted in Schedule 1
                                                     as the service termination date for a given
                                                     service, or such later date as the parties may
                                                     agree in writing;

        "VEHICLES"                                   the PHH Vehicles and the HSBC Vehicles;.
</TABLE>

1.2     In this Agreement, unless the context otherwise requires:

        1.2.1   references to this Agreement include references to this
                Agreement, its Background and its Schedules as varied,
                supplemented and/or replaced in any manner from time to time;

        1.2.2   references to any party shall, where relevant, be deemed to be
                references to or to include, as appropriate, their respective
                lawful successors, assigns or transferees;

        1.2.3   references to the background, clauses, Schedules and
                sub-divisions of them are references to the Background and
                clauses of, and Schedules to, this Agreement and sub-divisions
                of them respectively;

        1.2.4   references to any enactment shall be deemed to include
                references to such enactment as re-enacted, amended or extended
                before the date of this Agreement and any subordinate
                legislation made from time to time under it;


                                      276
<PAGE>

        1.2.5   references to a "person" include any individual, company,
                corporation, firm, partnership, joint venture, association,
                organisation, institution, trust or agency, whether or not
                having a separate legal personality;

        1.2.6   references to the one gender include all genders and references
                to the singular shall include the plural and vice versa;

        1.2.7   headings are inserted for convenience only and shall be ignored
                in construing this Agreement;

        1.2.8   the words "company", "subsidiary", "subsidiary undertaking" and
                "holding company" have the meanings given to them by the
                Companies Act 1985.

2       PROVISION OF SERVICES

2.1     The Services shall be provided by the Service Provider to the Service
        Recipient, subject to and in accordance with the terms of this Agreement
        from the Service Commencement Date until the Service Termination Date
        unless otherwise terminated pursuant to this Agreement.

2.2     Any Service Provider may change part or all of the Services at any time
        to the extent such changes are:

        2.2.1   necessary to take account of legal or regulatory requirements
                affecting the Service or the Service Provider's business;

        2.2.2   required by a third party which has the right to require them.

        The Service Provider shall use its reasonable endeavours to provide the
        Service Recipient with as much notice as may be practicable of any such
        change.

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2.3     A Service Provider shall be entitled to suspend all or any part of the
        Services until further notice on notifying the other either orally
        (confirmation in writing) or in writing with immediate effect in order
        to comply with an order, instruction of Government, an emergency
        services organisation or other competent administrative authority,
        provided that, where practicable the relevant Service Provider shall:

        2.3.1   give the Service Recipient reasonable prior notice in writing;
                and

        2.3.2   use its reasonable endeavours to minimise the disruption caused
                by and the duration of any such suspension.

2.4     The parties shall co-operate in endeavouring to ensure that at all times
        there are in place such contracts, licences and other consents of third
        parties as are necessary to enable the relevant Service Providers to
        provide the Services in accordance with this Agreement.

2.5     The Service Recipient shall provide all such information, data and
        materials as the Service Provider may reasonably require to enable it to
        supply the Services.

2.6     Thales will procure that each Service Provider performs and fulfils its
        duties and obligations as set out in this Agreement as if such Service
        Provider was a party to it.

2.7     Nice will procure that each Service Recipient performs and fulfils its
        duties and obligations as set out in this Agreement as if such Service
        Recipient was a party to it.

3       SERVICE FEES

3.1     Nice shall pay or procure the payment to the relevant Service Provider
        of the Service Fees for the Services in accordance with this clause.

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3.2      The Service Fee for each Service shall be the actual costs incurred by
         the relevant Service Provider in providing the relevant Service
         ("Actual Costs"), including without limitation:

        3.2.1   the costs of, and associated with, any additional overheads as
                are reasonably necessary for the continued provision of the
                relevant Service; and

        3.2.2   the actual costs levied by third parties to enable the Service
                Provider to provide and the Service Recipient to receive the
                Services to the extent that such costs are not otherwise
                required to be incurred by the Service Provider for its own
                business purposes;

        plus the relevant Service Premium.

3.3     A statement of the Actual Costs and Service Premium and an invoice for
        the relevant Service Fee for each month shall be provided to the
        relevant Service Recipient in respect of each Service within six weeks
        of the end of that month period.

3.4     In respect of each Service, the Service Recipient shall pay to the
        Service Provider within 14 days of receipt of invoice, the full amount
        of such invoice without deduction, set off or counterclaim.

3.5     All amounts due under this Agreement shall be paid in full, in pounds
        sterling.

3.6     All overdue amounts payable under this Agreement shall bear interest at
        a rate of two per cent per annum over the base lending rate of Barclays
        Bank plc, calculated on a daily basis for the period from the due date
        of such payment up to and including the date of payment in full, whether
        before or after any judgement. Interest shall continue to accrue on a
        daily basis notwithstanding termination of this Agreement for any cause
        whatsoever.

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3.7     In the event of a dispute, the parties shall use the Dispute Resolution
        Procedure provided that the monthly payments of Service Fees shall
        continue to be made during any use of the Dispute Resolution Procedure.

3.8     All charges and fees referred to in this Agreement are exclusive of all
        taxes and duties of any nature (including, but not limited to, Value
        Added Tax ("VAT") in the United Kingdom) which shall be payable in
        addition if required by law (subject, in the case of VAT to production
        of a proper VAT invoice ).

4       VEHICLE LEASES AND CARDS

4.1     Nice shall from the Completion Date (but subject to the provisions of
        this clause 4) carry out and perform for its own account, with respect
        only to the Vehicles, the Contracts.

4.2     Thales and Nice shall use their respective reasonable endeavours to
        procure that the other party to the Contracts shall consent to the
        Vehicles becoming subject to agreements between Nice and that other
        party in a form substantially the same as the Contracts and the removal
        of the Vehicles from the terms of the Contracts with effect from the
        Completion Date (whether by contract, assignment, novation or
        otherwise).

4.3     Nice shall indemnify and keep indemnified Thales and any Affiliate of
        Thales from and against all costs, claims, demands, liabilities,
        expenses or damages arising out of or in connection with the Contracts
        in respect of the period after the Completion Date, except where such
        cost, claim, demand, liability, expense or damage shall arise wholly or
        partly as a result of the failure by Thales or any Affiliate of Thales
        duly to perform and comply with the terms of the relevant Contract prior
        to the Completion Date.

4.4     If, after Completion, such consent as is referred to in clause 4.2 shall
        be sought but refused or is not obtained within fifty days of the
        Completion Date,

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        the parties shall discuss alternative proposals in relation to the
        relevant Contracts and Vehicles and in default of agreement within a
        further period of ten days, Nice shall or shall procure that where
        failure of consent relates to:-

        i)      the PHH Lease Contract in respect of the PHH Vehicles, the PHH
                Vehicles are returned to Thales; and/or

        ii)     The HSBC Lease Contract in respect of the HSBC Vehicles, the
                HSBC Vehicles are returned to Thales;

        and in each or either case Nice shall indemnify and keep Thales and any
        Affiliate of Thales indemnified from and against all costs, claims,
        demands, liabilities, expenses or damages arising from such Contracts in
        the period from the Completion Date, including but not limited to the
        cost of termination of the leases of the Vehicles following the return
        thereof to Thales.

4.5     Nice shall indemnify and keep Thales and any Affiliate of Thales
        indemnified from and against all costs, claims, demands, liabilities,
        expenses or damages arising from the use at any time following the
        Completion Date, of the Cards.

5       WARRANTIES AND LIMITATIONS OF LIABILITY

5.l     Each Service Provider warrants that:

        5.1.1   the Services will be provided with reasonable skill and care and
                shall in all material respects be consistent with those Services
                as provided in the Prior Period;

        5.1.2   they will comply with all applicable laws in carrying out the
                Services and, in so far as they are able, retain all necessary
                licences, permissions and consents required to enable the other
                party to use the Services.

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5.2     The Parties shall be liable inter se as expressly provided in this
        Agreement, but shall have no other obligation, duty or liability
        whatsoever in contract, tort or otherwise to the other in relation to
        the Services.

5.3     Notwithstanding any other provisions of this Agreement (other than
        clause 5.4) the aggregate liability of each party to the others shall be
        limited in respect of claims arising out of or in connection with the
        provision of the Services, the Service Provider replacing any
        non-conforming Service or otherwise refunding the Service Fee in
        relation to that Service.

5.4     Nothing in this Agreement shall exclude or restrict any party's
        liability for death or personal injury resulting from its negligence as
        defined in the Unfair Contract Terms Act 1977.

5.5     The Parties shall not be liable to each other under this Agreement in
        contract, tort or otherwise, including any liability for negligence, for
        any loss of revenue, business contracts, anticipated savings, profits or
        any indirect or consequential loss. For the purpose of this clause 5.5,
        "anticipated savings" means any expense which the party expects to avoid
        incurring or to incur in a lesser amount than would otherwise have been
        the case by reason of using the Services.

5.6     The provisions of this clause 5 shall continue to apply notwithstanding
        the termination or expiry of this Agreement.

6       FORCE MAJEURE

6.1     If either party is prevented, hindered or delayed from or in performing
        any of its obligations under this Agreement by a Force Majeure Event,
        then:

        6.1.1   that party's obligations under this Agreement shall be suspended
                for so long as the Force Majeure Event continues and to the
                extent that that party is so prevented, hindered or delayed;

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<PAGE>

        6.1.2   promptly after commencement of the Force Majeure Event that
                party shall notify the other party in writing of the occurrence
                of the Force Majeure Event, the date of commencement of the
                Force Majeure Event and the effects of the Force Majeure Event
                on its ability to perform its obligations under this Agreement;

        6.1.3   that party shall use all reasonable efforts to mitigate the
                effects of the Force Majeure Event upon the performance of its
                obligations under this Agreement; and

        6.1.4   immediately after the cessation of the Force Majeure Event that
                party shall notify the other party in writing of the cessation
                of the Force Majeure Event and shall resume performance of its
                obligations under this Agreement as soon as reasonably
                practicable.

6.2     For the purposes of this clause, "Force Majeure Event" means any event
        beyond the reasonable control of a party including, without limitation,
        strikes, lock-outs, labour disputes, industrial action, Acts of God,
        war, riot, civil Commotion, terrorist activities, market disruption such
        that relevant stock and other markets ate not able to open for business
        or to function properly, compliance with any law or governmental order,
        rule, regulation or direction of any overriding emergency procedures,
        storm or (insofar as the same are beyond such party's reasonable
        control) breakdown of plant or machinery, accident, fire, loss of power
        or technical failure of software or hardware.

6.3     Each party shall inform the other as soon as is practicable of any
        circumstances that are likely to affect the performance of its
        obligations hereunder.

7       MODIFICATIONS

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<PAGE>

7.l     At any time during the duration of this Agreement, any Service Recipient
        may request and any Service Provider may recommend changes to the
        Services. Any such changes to Services or new services agreed between
        the parties shall become "Services" for the purpose of this Agreement.

7.2     Except as otherwise stated, this Agreement may only be modified if such
        modification is in writing and signed by a duly authorised
        representative of each party.

8       TERMINATION

8.1     This Agreement shall commence on the Completion Date and, unless
        terminated in accordance with this clause 8 shall continue until the
        last Service Termination Date.

8.2     This Agreement may be terminated by the parties forthwith by written
        notice to the others if:

        8.2.1   the other party convenes a meeting of its creditors or if a
                proposal is made for a voluntary arrangement (within Part I of
                the Insolvency Act 1986) or a proposal for any other composition
                or scheme of arrangement with (or assignment for the benefit of)
                its creditors or if the other party is unable to pay its debts
                (within the meaning of section 123 of the Insolvency Act 1986)
                or if a trustee, receiver, administrative receiver or similar
                officer is appointed in respect of all or any part of the
                business or assets of that other party or if a petition is
                presented (and not discharged within 30 days) or a meeting is
                convened for the purpose of considering a resolution or other
                steps are taken (and are not withdrawn or otherwise negated
                within 30 days) for the winding up of that other party or for
                the making of an administrative order (otherwise than for the
                purpose of amalgamation or reconstruction) or if that party
                ceases to

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<PAGE>

                carry on business as a going concern or ceases to be in a
                position to fulfil this Agreement or suffers an event in a
                foreign jurisdiction analogous to or comparable with any of the
                foregoing; and

        8.2.2   there is a change of control (as defined in section 416 of the
                Income and Corporation Taxes Act 1988) of the other party other
                than by way of an intra-group reorganisation within that party's
                group;

        8.2.3   if the other party commits a material breach of an obligation
                under this Agreement and, if the breach is capable of remedy,
                does not remedy the breach within 14 days starting on the
                Business Day after receipt of notice from the first party of the
                breach.

8.3     The Service Recipient may terminate any Service which is provided to it
        under this Agreement on four weeks' written notice to Thales and the
        Service Provider.

9       CONSEQUENCES OF TERMINATION

9.1     In the event of termination for any reason whatsoever of this Agreement,
        Thales and Nice shall procure that all relevant members of their
        respective Groups shall:

        9.1.1   immediately cease to make use of the relevant Services;

        9.1.2   (at its own cost) promptly to return all documents, manuals,
                statements and other such materials, and all copies thereof, of
                whatever nature supplied under or in connection with such
                parties' performance hereunder and which contains confidential
                or proprietary information of the other party. If requested,
                each party shall certify that it has fully complied in all
                respects with this provision upon the return of any such
                documentation or materials;

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<PAGE>

        9.1.3   at the request and cost of a former Service Recipient provide
                that recipient or its agents with all reasonable assistance
                necessary to effect the transfer of the provision of the
                relevant Services to another third party supplier; . 9.1.4 for a
                reasonable period following termination, allow access to their
                premises on reasonable prior notice during normal business hours
                for the purpose of removing any or all of the Service
                Recipient's data, records and inventory.

9.2     Any termination of this Agreement shall, unless otherwise provided for
        herein, be without prejudice to any other rights or remedies to which
        either party may be entitled hereunder or at law and shall not affect
        any accrued rights or liabilities of either party nor the coming into
        force or the continuance in force of any provision hereof which is
        expressly or by implication intended to come into force or to continue
        in force on or after such termination.

9.3     The following clauses shall continue in force and remain operative
        notwithstanding termination of this Agreement for whatever reason: 4, 5,
        11, 13, 15, 17 and 18.

10      SUB-CONTRACTING, ASSIGNMENT AND AFFILIATES

        Neither party may assign or transfer any of its rights or obligations
        under this Agreement without the prior written consent of the other.

11      CONFIDENTIALITY

11.1    Each of the parties hereto agrees to keep confidential all confidential
        information disclosed pursuant to or in the performance of this
        Agreement and to use such information solely for the purposes of
        carrying out its obligations under this Agreement.

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<PAGE>

11.2    The provisions of clause 11.1 shall not apply to information which is
        publicly known or which subsequently becomes publicly known other than
        as a result of a breach of this clause 11.

12      ENTIRE AGREEMENT AND VARIATION OF TERMS

12.1    This Agreement, the Sale Agreement and the documents referred to
        therein, contains the entire agreement and understanding of the parties
        and supersedes all prior agreements, understandings or arrangements
        (both oral and written) relating to the subject matter of this
        Agreement. In case of conflict with the Sale Agreement and the documents
        referred to therein, the provisions of this Agreement shall take
        precedence with respect to the subject matter of this Agreement.

12.2    No variation of any of the terms of this Agreement (or of any other
        documents referred to herein) shall be effective unless made in writing
        and signed by or on behalf of each party.

13      WAIVER; REMEDIES

13.1    Any waiver of a breach of any of the terms of this Agreement or of any
        default hereunder shall not be deemed a waiver of any subsequent breach
        or default and shall in no way affect the other terms of this Agreement.

13.2    Except as otherwise specifically provided in this Agreement, no failure
        to exercise and no delay on the part of any party in exercising any
        right, remedy, power or privilege of that party under this Agreement and
        no course of dealing between the parties shall be construed or operate
        as a waiver thereof, nor shall any single or partial exercise of any
        right, remedy, power or privilege preclude any other or further exercise
        thereof or the exercise of any other right, remedy, power or privilege.

14      SEVERABILITY OF PROVISIONS

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<PAGE>

         If any provision of this Agreement is held to be illegal, invalid or
         unenforceable in whole or in part in any jurisdiction this Agreement
         shall, as to such jurisdiction, continue to be valid as to its other
         provisions and the remainder of the affected provisions and the
         legality, validity and enforceability of such provision in any other
         jurisdiction shall be unaffected .

15      NOTICES

15.1    Any notice or other communication to be given under this Agreement shall
        be in writing, shall be deemed to have been duly served on, given to or
        made in relation to a party if it is left at the authorised address of
        that party or sent by facsimile transmission to the fax machine situated
        at such address specified below and shall if:

        15.1.1  personally delivered, be deemed to have been received at the
                time of delivery; or

        15.1.2  posted to an inland address in the United Kingdom, be deemed to
                have been received on the second Business Day after the date of
                posting and if posted to an overseas address, be deemed to have
                been received on the fifth Business Day after the date of
                posting; or

        15.1.3  sent by facsimile transmission, be deemed to have been received
                upon receipt by the sender of a facsimile transmission report
                (or other appropriate evidence) that the facsimile has been
                transmitted to the addressee;

        Provided that where delivery or transmission occurs after 6.00 pm on a
        Business Day or at any time on a day which is not a Business Day,
        receipt shall be deemed to occur at 9.00 am on the next following
        Business Day.

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15.2    For the purposes of this clause the authorised address of each party
        shall be the address set out below (including the details of the
        facsimile number and person for whose attention notice of communication
        is to be addressed) or such other address (and details) as that party
        may notify to the other in writing from time to time in accordance with
        the requirements of this clause:

        15.2.1  Thales:

                  173 Boulevard Haussmann
                  75415 Paris Cedex 08
                  France
                  Facsimile No:   00331 53 77 8263
                  Attention:      Pierre Charreton, Trade Group General Counsel

        Nice:

                  8 Hapnina Street
                  Raanana, 43107
                  Israel
                  Facsimile No:   001 927 9775 3520
                  Attention:      Koby Huberman

        with a copy to:

16      COUNTERPARTS

        This Agreement may be executed in any number of counterparts, each of
        which when executed and delivered shall be an original, but all of which
        when taken together shall constitute a single instrument.

17      DISPUTE RESOLUTION

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<PAGE>

17.1    Any question or difference of opinion which may arise between the
        parties concerning any aspect of the Services shall be referred in the
        first instance to senior management of the parties in dispute, who shall
        use their reasonable efforts to resolve the dispute.

17.2    In the event that a dispute cannot be resolved by agreement of the
        parties within 15 days, the parties shall refer the dispute to an expert
        to be agreed between the parties or, in default of agreement, to be
        appointed upon the application of any party by the President for the
        time being of the Law Society, such expert to act only as an expert and
        not as an arbitrator. Such person shall be instructed to reach his
        decision as soon as reasonably practicable. The decision of the expert
        shall (in the absence of fraud or manifest error) be final and binding
        on the parties. The fees or costs of such an expert and his appointment
        shall be borne by the parties equally, unless such expert shall decide
        one party has acted unreasonably, in which case he shall have discretion
        as to costs.

18      GOVERNING LAW AND JURISDICTION

18.1    This Agreement shall be governed by, construed and interpreted in
        accordance with English law.

18.2    Subject to the provisions of clause 17, the courts of England shall have
        exclusive jurisdiction to settle any claim, dispute or matter of
        difference which may arise out of or in connection with this Agreement
        (including, without limitation, claims for set-off or counterclaim) or
        the legal relationships established by this Agreement.

19      CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

        No person who is not a party to this Agreement shall have any rights
        under the Contracts (Rights of Third Parties) Act 1999 to enforce any
        term of this Agreement.


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The parties have shown their acceptance of the terms of this Agreement by
executing it at the end of the Schedules.




                                      291
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                                   SCHEDULE 1

                                    SERVICES

SERVICE 1

Service Provider:                   Thales GeoSolutions (Australasia) Limited

Service Recipient:                  Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the
                                    Service Commencement Date

Service Premium:                    Nil

Service:                            Provision of office space and facilities at
                                    3 Powells Road, Brookvale, New South Wales
                                    2100,  Australia (the "Premises")

                                    Service Provider shall permit the T
                                    Fitzgerald and J Prince to have access to
                                    and use of the Premises on the same basis as
                                    such access and use has been provided by the
                                    Service Provider in the Prior Period.

SERVICE 2

Service Provider:                   Thales e-Security (Asia) Limited

Service Recipient:                   Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the
                                    Service Commencement Date

Service Premium:                    7%

Service:                            Provision of office space and facilities at
                                    Units 2205 - 2206, 22/F Vicwood Plaza, 199
                                    Des Voeux Road, Central Hong Kong, PRC (the
                                    "Premises")

                                    Service Provider shall permit the Alex Chang
                                    and Jenny Leung (the "HK Employees") to have
                                    access to and use of the Premises on the
                                    same basis as such access and use has been
                                    provided by the Service Provider in the
                                    Prior Period.

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<PAGE>

SERVICE 3

Service Provider:                   Thales e-Security (Asia) Limited

Service Recipient:                   Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the
                                    Service Commencement Date

Service Premium:                    7%

Service:                            Provision of residential apartment for the
                                    use of T McGinty (the "Premises").

                                    Service Provider shall permit T McGinty to
                                    continue to occupy the the Premises on the
                                    same basis as such occupation has been
                                    provided in the Prior Period.



SERVICE 4

Service Provider:                   Thales e-Security (Asia) Limited

Service Recipient:                   Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the
                                    Service Commencement Date

Service Premium:                    7%

Service:                            Secondment of the HK Employees.

                                    Service Provider shall make the services of
                                    the HK Employees available to the Service
                                    Recipient on the same basis as those
                                    services have been provided in the Prior
                                    Period and subject always to the overriding
                                    provisions of Schedule 3.


SERVICE 5


Service Provider:                   Thales GeoSolutions Netherlands BV

Service Recipient:                  Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the Service
                                    Commencement Date.

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Service Premium                     5%

Service:                            Administration and payment of payroll in
                                    respect of C Van Gaalen on the same basis as
                                    such services have been provided to TCSL in
                                    the Prior Period.


SERVICE 6

Service Provider:                   Thales e-Security (Asia) Limited

Service Recipient:                  Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the Service
                                    Commencement Date

Service Premium                     5%

Service:                            Administration and payment of payroll in
                                    respect of T McGinty, A Chan and J Leung on
                                    the same basis as such services have been
                                    provided to TCSL in the Prior Period.


SERVICE 7

Service Provider:                   Thales Contact Solutions Limited

Service Recipient:                  Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the Service
                                    Commencement Date

Service Premium:                    7%

Service:                            Secondment of Hassan Hamada, Rajith Mathath
                                    and Richard Richardson (the "ME Employees").

                                    Service Provider shall make the services of
                                    the ME Employees available to the Service
                                    Recipient on the same basis as those
                                    services have been available to the Business
                                    in the Prior Period and subject always to
                                    the overriding provisions of Schedule 3.

SERVICE 8

Service Provider:                   Thales Contact Solutions Limited

Service Recipient:                  Nice CTI Systems UK Limited


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<PAGE>

Service Termination Date:           The date six months following the Service
                                    Commencement Date

Service Premium:                    7%

Service:                            The maintenance of the existing arrangement
                                    for the use of the UAE Office by the ME
                                    Employees.

                                    "UAE Office" means the office space at Al
                                    Makhari Building, Umm Harrier Road, PO Box
                                    6246, Dubai, UAE, the use of which is
                                    governed by an arrangement at Disclosure
                                    Document Q&R 76.


SERVICE 9

Service Provider:                   Thales GeoSolutions (Australia) (Pty)
                                    Limited

Service Recipient:                  Nice CTI Systems UK Limited

Service Termination Date:           The date six months following the Service
                                    Commencement Date.

Service Premium:                    5%

Service:                            Administration and payment of payroll in
                                    respect of T Fitzgerald and J Prince on the
                                    same basis as such services have been
                                    provided to TCSL in the Prior Period.


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<PAGE>

                                   SCHEDULE 2

                                    VEHICLES

              THOSE VEHICLES LISTED AT DISCLOSURE DOCUMENT UK.A.47.


                                      296
<PAGE>

                                   SCHEDULE 3

                  TERMS AND CONDITIONS RELATING TO SECONDMENTS


1       DURATION


        Subject to the terms of this Agreement, the Secondment will continue
        until the Service Termination Date.


2       SECONDMENT SERVICES


        During the Secondment, the Service Recipient will have the sole right to
        supervise and control the Employee. The Service Provider will have no
        knowledge of and therefore no responsibility for, and no liability with
        respect to the day to day activities of the Employee.


3       CONTINUING EMPLOYMENT BY SERVICE PROVIDER


3.1     During the Secondment, the Employee will remain employed by the Service
        Provider on the terms and conditions of employment subsisting as at the
        Completion Date (the "Employment Contract"). The Service Provider will
        second the Employee to the Service Recipient on the terms of the
        Employment Contract.


3.2     Nothing in this Agreement is intended to create a relationship of
        employer and employee between the Service Recipient and the Employee.


4       DUTIES OF SERVICE PROVIDER


4.1     The Service Provider will pay the Employee's salary and provide all
        contractual and other benefits to which the Employee is entitled under
        his Employment Contract.

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<PAGE>

4.2     The Service Provider will be responsible for making appropriate tax and
        other deductions from the Employee's remuneration, as may be required
        under applicable law. The Service Provider agrees to indemnify and keep
        indemnified the Service Recipient in respect of any claim that may be
        made by the relevant authorities against the Service Recipient for
        income tax or other deductions as may be required under applicable law
        in respect of the Employee.

5       DUTIES OF SERVICE RECIPIENT

5.1     The Service Recipient will maintain a record of the Employee's sickness
        and holiday absence and will notify the Service Provider of such absence
        and provide a copy of such record to the Service Provider on a monthly
        basis on or around the first day of each month.

5.2     The Service Recipient will provide the Service Provider with such
        information as it reasonably requires to comply with all applicable law
        relating to the Secondment.

6       TERMINATION OF EMPLOYMENT

6.1     If the Employee's employment with the Service Provider ends for any
        reason, the Secondment will automatically terminate. The Service
        Provider will not be required to second a replacement employee unless
        requested to do so by the Service Recipient, and then only on terms to
        be agreed between the parties.

6.2     The Service Recipient will indemnify and keep the Service Provider
        indemnified against any costs and expenses including, without
        limitation, statutory or contractual redundancy costs, incurred in
        relation to the termination of employment of the Employee where such
        termination of employment is by reason of redundancy on termination of
        the Employee's Secondment.

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7       PROLONGED ABSENCE

        If the Employee is away from work for any reason for more than four
        consecutive weeks, the Service Recipient may terminate the Secondment on
        four weeks prior written notice. The Service Provider will not be
        required to second a replacement for any period of absence of the
        Employee unless requested to do so by the Service Recipient and then
        only on terms to be agreed between the parties.

8       TERMINATION

8.1     Either party may terminate the Secondment immediately by giving written
        notice to the other if:

        8.1.1   the Employee does or omits to do anything (whether in connection
                with the Secondment or not) which would allow the Service
                Provider to terminate his employment summarily; or

        8.1.2   the Service Provider dismisses the Employee, the Employee
                voluntarily resigns or the Employee's employment with the
                Service Provider ends for any reason; or

        8.1.3   the Employee acts in a way which is harmful in the reasonable
                opinion of the Service Recipient to the Service Recipient's
                business (whether in connection with the Secondment or not); or

        8.1.4   the Employee is guilty of dishonesty or is convicted of an
                offence (whether in connection with the Secondment or not).

8.2     If either party commits any material breach of their obligations under
        this Agreement the other may terminate this Agreement and the Secondment
        with immediate effect by written notice.

                                      299
<PAGE>

8.3     The Service Recipient shall be entitled to terminate the Secondment on
        four weeks prior written notice to the Serviced Provider if the Service
        Provider changes any of the Employee's terms and conditions such that
        the fees payable under clause 3 in respect of the Secondment are
        increased by more than 10%.

9       CONFIDENTIALITY

9.1     The Service Provider will not and will procure that the Employee will
        not use or disclose to any person including, without limitation, the
        Service Provider itself, any trade secrets or confidential information
        of the Service Recipient which the Employee receives or obtains during
        the Secondment. This restriction will continue after this Agreement
        ends.

9.2     The Service Provider will procure that, at the end of the Secondment or
        earlier if requested by the Service Recipient, the Employee returns to
        the Service Recipient all documents and other materials belonging or
        relating to the Service Recipient.

10      DISCIPLINARY MATTERS

        If any disciplinary or grievance matter arises in relation to the
        Employee during the Secondment, the Service Recipient will notify the
        Service Provider as soon as possible. The Service Provider will deal
        with the matter in accordance with its disciplinary or grievance
        procedure. The Service Recipient will provide whatever assistance is
        reasonably necessary.

11      PROPERTY DAMAGE

        The Service Recipient agrees to assume responsibility for and releases
        and agrees to defend and indemnify the Service Provider and its
        affiliates from and against any and all claims in respect of any damage
        to or loss of property

                                      300
<PAGE>

        owned by the Service Recipient, its affiliates or partners or their
        contractors and which is caused by the Employee whilst on Secondment.

12      DAMAGES

        In no event shall the Service Provider be liable, and the Service
        Recipient assumes responsibility, for any special, indirect or
        consequential damages, loss of profit, loss of revenue, loss of
        contract, loss of opportunity, loss of use of the facilities or other
        property, or business interruption or costs resulting from non-operation
        or increased expense of operation or maintenance, or costs of finance
        and any other similar types of losses suffered or incurred by the
        Service Recipient, howsoever caused to the extent that such losses are
        caused as a result of the actions of the Employee whilst on Secondment
        in the course of performing the Secondment Services.


                                      301
<PAGE>


Signed by......................................   )
for and on behalf of                              )
[THALES]                                          )




Signed by......................................   )
for and on behalf of                              )
[NICE]                                            )






                                      302
<PAGE>

                                   SCHEDULE 13

                       PRISM EARN-OUT CONSIDERATION TABLE



The Earn Out Consideration referred to in Clause 7.8 shall be calculated in
accordance with the table set out below:

<TABLE>
<CAPTION>

                  -------------------------------------------------------------------------------------------------

                  ------------------------------------------------------------------------------------------------
                  PRISM EARN-OUT CONSIDERATION TABLE (THE AMOUNTS SET FORTH BELOW ARE STAND ALONE FOR EACH
                  RESPECTIVE YEAR)
                  -------------------------------------------------------------------------------------------------

                  ACTUAL PRISM REVENUE IN CALENDAR YEAR        2002 EARN OUT     2003 EARN OUT      2004 EARN OUT
                  2002, 2003 OR 2004 (EURO)                        (US$)             (US$)              (US$)
                  ------------------------------------------ ----------------- ----------------- ------------------
<S>                                                          <C>               <C>               <C>
                  Less than EUR6 million                     0                 0                 0
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR6 million - under EUR7 million          $1 million        0                 0
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR7 million - under EUR8 million          $2 million        0                 0
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR8 million - under EUR9 million          $3 million        0                 0
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR9 million - under EUR10 million         $4 million        0                 0
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR10 million - under EUR12 million        $5 million        0                 0
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR12 million - under EUR14 million        $5 million        $1.5 million      $1.5 million
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR14 million - under EUR16 million        $5 million        $3 million        $3 million
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR16 million - under EUR18 million        $5 million        $4.5 million      $4.5 million
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR18 million - under EUR20 million        $5 million        $5 million        $5 million
                  ------------------------------------------ ----------------- ----------------- ------------------

                  EUR20 million and above                    $5 million        $7.5 million      $7.5 million
                  ------------------------------------------ ----------------- ----------------- ------------------
</TABLE>


                                      303
<PAGE>

                                   SCHEDULE 14

                                 IPR AGREEMENTS






                                      304
<PAGE>

DATED                                                                       2002
--------------------------------------------------------------------------------






THALES CONTACT SOLUTIONS LIMITED

THALES ELECTRONICS PLC






--------------------------------------------------------------------------------

                   ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS

--------------------------------------------------------------------------------





                                      305
<PAGE>

THIS AGREEMENT is made on                                                   2002

BETWEEN

(1)     THALES CONTACT SOLUTIONS LIMITED (registered number 560700) whose
        registered office is at Western Road, Bracknell, Berks RG12 1RG (the
        "Assignor"); and

(2)     THALES ELECTRONICS PLC (registered number 497098) whose registered
        office is at Western Road, Bracknell, Berkshire RG12 1RG (the
        "Assignee").

BACKGROUND

(A)     The Assignor is the proprietor of the Assignor IPR (as defined below).

(B)     Thales SA has granted patent licences over all group patents, including
        the Patent Application, to Alcatel and Thomson Multimedia ("Cross
        Patents Licence Agreements").

(C)     The Assignor wishes to assign to the Assignee and the Assignee wishes to
        acquire the Assignor IPR on the terms and conditions set out below.

1       DEFINITIONS

1.1     In this Agreement the following expressions have the following meanings
        unless inconsistent with the context:

<TABLE>
<CAPTION>
<S>                                             <C>
        "ASSIGNOR IPR"                          All Intellectual Property Rights owned by
                                                Assignor including but not limited to the Trade
                                                Marks the Patent Application and the copyright
                                                and any design rights in the Copyright Works but
                                                excluding the Excluded Trade Marks.

        "COPYRIGHT WORKS"                       The works identified in SCHEDULE 3.

        "DOMAIN NAME"                           The domain name identified in Part 3 of Schedule 1

        "EXCLUDED TRADE MARKS"                  means the trade marks, service marks, brand
                                                names, certification marks, trade dress,
                                                business names and
</TABLE>

                                      306
<PAGE>
<TABLE>
<CAPTION>
<S>                                             <C>

                                                other indications of origin and any Internet
                                                protocol addresses and networks, including
                                                domain names, e-mail addresses, and world wide
                                                web (www) and http addresses, network names,
                                                network addresses, and services which subsist of
                                                or include "Thales", "Thales Contract
                                                Solutions", Racal", "Thomson" or any confusingly
                                                similar work or any Thales, Racal or Thomson
                                                specific logos.
</TABLE>

                                      307
<PAGE>
<TABLE>
<CAPTION>
<S>                                             <C>
        "INTELLECTUAL PROPERTY RIGHTS"          All intellectual property in any jurisdiction,
                                                whether registered, pending applications or
                                                unregistered, including without limitation: (a)
                                                all trade marks, service marks, brand names,
                                                certification marks, trade dress, business names
                                                and other indications of origin; (b) Patents;
                                                (c) trade secrets, know-how and other
                                                confidential or non-public business information,
                                                including ideas, manufacturing and production
                                                processes and techniques, research and
                                                development information, drawings,
                                                specifications, designs, source codes plans,
                                                proposals and technical data, business and
                                                marketing plans, market surveys, market know-how
                                                and customer lists and information; (d) writings
                                                and other copyright works, including computer
                                                programs, source code, object code and
                                                documentation (whether or not released), design
                                                right, architecture, database rights, and all
                                                copyrights and any non-registered copyrights to
                                                any of the foregoing; (e) integrated circuit
                                                topographies and mask works; (f) Internet
                                                protocol addresses and networks, including
                                                domain names, e-mail addresses, world wide web
                                                (www) and http addresses, network names, network
                                                addresses and services; (g) privacy and
                                                publicity rights; and (h) all other intellectual
                                                property rights of a similar nature or having
                                                equivalent or similar effect to these which may
                                                subsist anywhere in the world;

        "PATENT APPLICATION"                    the application for the grant of a patent
                                                particulars of which are contained in SCHEDULE 2
</TABLE>

                                      308
<PAGE>
<TABLE>
<CAPTION>
<S>                                             <C>
        "PATENTS"                               any and all patents, patent applications
                                                (including letters patent, industrial designs,
                                                and inventor's certificates), design
                                                registrations, invention disclosures, and
                                                applications to register industrial designs, and
                                                any and all rights to any of the foregoing
                                                anywhere in the world, including any
                                                provisionals, substitutions, extensions,
                                                supplementary protection certificates,
                                                re-examinations, reissues, renewals, divisions,
                                                continuations in part (or in whole), continued
                                                prosecution applications, requests for continued
                                                examination, and other similar filings or
                                                notices provided for under the laws of any
                                                country;

        "REGISTERED TRADE MARKS"                the registered trade marks particulars of which
                                                are contained in PART 1 of SCHEDULE 1

        "TRADE MARK APPLICATIONS"               The trade mark applications identified in PART
                                                2 of SCHEDULE 1.

        "TRADE MARKS"                           the Registered Trade Marks and the trade marks
                                                the subject of the Trade Mark Applications and
                                                the Domain Name means the Software Licence and
                                                Service Agreement dated 1st

        "WORDNET 3 LICENCE"                     March 2002 between TCSL and Origin Data
                                                Realisation Limited;
</TABLE>

2       CONSIDERATION

        In consideration of the Assignor entering into this Agreement, the
        Assignee shall pay to the Assignor upon signature of this Agreement the
        sum of US$4,000,000 (four million US dollars) such sum to be left
        outstanding on inter-company loan account.

3       TRADE MARKS

                                      309
<PAGE>

3.1     The Assignor assigns to the Assignee absolutely with full title
        guarantee the Trade Marks including the goodwill in the Trade Marks and
        the full and exclusive benefit of each of them, including all statutory
        and common law rights and the right to sue for past infringements and to
        retain any damages obtained as a result of such action.

3.2     The Assignor agrees at the expense of the Assignee to execute such
        further documents, and take such actions and do such things, as may be
        reasonably requested by the Assignee to give full effect to the terms of
        this Agreement and to secure the full right, title and interest of the
        Assignee in the Trade Marks.

4       PATENT APPLICATION

4.1     The Assignor assigns to the Assignee absolutely with full title
        guarantee:

        4.1.1   the Assignor's right to apply for, prosecute and be granted the
                patent or obtain similar protection throughout the world for the
                invention(s) claimed in the Patent Application and any remaining
                right to claim priority therefrom (including under the Paris
                Convention for applications in countries or territories outside
                the UK), any remaining right to file continuations,
                continuations in part, divisionals or seek re-examination or
                re-issue, so that the grant of any patent or similar protection
                shall be in the name of and vest in the Assignee;

        4.1.2   all the rights of the Assignor to, and its title to and interest
                in, the Patent Application;

        4.1.3   all and any other rights and powers arising or accruing from the
                Patent Application, including without limitation the right to
                sue for damages and to have the benefit of any other remedies
                for infringement of any patents subsisting under the Patent
                Application occurring before the date of this Agreement.

        subject to the Cross Patents Licence Agreements.

4.2     The Assignor agrees at the expense of the Assignee to execute such
        further documents, and take such actions and do such things as may be
        reasonably requested by the Assignee, to give full effect to the terms
        of this Agreement, and to secure the full right title and interest of
        the Assignee in the Patent Application.

                                      310
<PAGE>

5       COPYRIGHT

5.1     The Assignor assigns to the Assignee absolutely with full title
        guarantee:

        5.1.1   any and all copyright and design right which it owns, if any, in
                the Copyright Works;

        5.1.2   all rights and powers arising or accrued from the Copyright
                Works, including without limitation the right to sue for damages
                and other remedies and to have the benefit of any remedy
                obtained on any supposed infringement of such Copyright Works
                before the date of this Agreement; and

        5.1.3   the right to apply for copyright and design protection in any
                part of the world in relation to all or any of the Copyright
                Works, including without limitation the right to apply for
                renewals and extensions.

5.2     The Assignor agrees at the expense of the Assignee to execute such
        further documents and take such actions and do such things as may be
        reasonably requested by the Assignee to give full effect to the terms of
        this Agreement (including without limitation assisting the Assignee in
        the resolution of any question concerning the Copyright Works) and to
        secure the full right, title and interest of the Assignee in the
        Copyright Works.

6       OTHER INTELLECTUAL PROPERTY RIGHTS

6.1     The Assignor assigns with full title guarantee all Assignor IPR (other
        than the Trade Marks, Patent Application and the copyright and design
        right in the Copyright Works which are dealt with above) to the Assignee
        absolutely.

6.2     The Assignor agrees at the expense of the Assignee to execute such
        further documents and take such actions and do such things as may be
        reasonably requested by the Assignee to give full effect to the terms of
        this Agreement and to secure the full right, title and interest of the
        Assignee to the Assignor IPR set out in clause 6.1 above.

7       WORDNET 3 SOFTWARE

7.1     The Assignor assigns to the Assignee all rights to which the Assignor is
        entitled under the Wordnet 3 Licence, subject to the obligations under
        the Wordnet 3 Licence.

                                      311
<PAGE>

7.2     The Assignor agrees that it shall do or procure the doing of all such
        acts and things and shall execute or procure the execution of all such
        documents as may be required to vest in the Assignee all rights granted
        under this clause 7 in accordance with this Agreement and otherwise to
        comply with its terms.

7.3.    The parties hereto agree to use reasonable endeavours to enter into a
        deed of novation with Origin Data Realisation Limited to novate the
        Wordnet 3 Licence in favour of the Assignee or any subsequent Assignee
        within 28 days of this Agreement.

8       COUNTERPARTS

        This Agreement may be executed in any number of counterparts, each of
        which so executed will be an original, but together will constitute one
        and the same instrument.

9       CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

        The parties to this Agreement do not intend that any of its terms will
        be enforceable by virtue of the Contracts (Rights of Third Parties) Act
        1999 by any person not a party to it.

10      GOVERNING LAW AND JURISDICTION

10.1    The formation, existence, construction, performance, validity and all
        aspects whatsoever of this Agreement or of any term of this Agreement
        will be governed by the law of England and Wales.

10.2    The courts of England and Wales will have non-exclusive jurisdiction to
        settle any disputes that may arise out of or in connection with this
        Agreement. The parties irrevocably agree to submit to that jurisdiction.

AS WITNESS the hands of the parties or their duly authorised agents for and on
behalf of the parties on the date stated at the beginning of this Agreement

Executed on behalf of       )
THALES CONTACT SOLUTIONS    )
LIMITED                     )
ASSIGNOR                    )
in the presence of:         )
                            Director
                            Director/Secretary

                                      312
<PAGE>

Executed on behalf of       )
THALES ELECTRONICS PLS      )
ASSIGNOR                    )
in the presence of:         )
                            Director

                            Director/Secretary



                                      313
<PAGE>
<TABLE>
<CAPTION>

                                                     SCHEDULE 1

                                         PART 1 - THE REGISTERED TRADE MARKS


------------------------------ ----------------- ------------------ -------------- ------------------ -------------

          Trademark                COUNTRY          APPLICATION      APPLICATION     REGISTRATION       RENEWAL
                                                                         DATE
                                                      NUMBER                            NUMBER            DATE
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
<S>                            <C>               <C>                <C>            <C>                <C>
A-MUX LOGO                     UK                2059568            5/3/96         2059568            5/3/06
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

CALLMASTER                     Norway            912590             23/5/91        155604             11/3/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               UK                1452564            9/1/91         1452564            9/1/08
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

GEOSTORE                       UK                1007802            9/3/73         1007802            9/3/08
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

INVESTIGATOR                   CTM               1832823            31/8/00        1832823            31/8/10
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

MIRRA                          CTM               830786             21/5/98        830786             21/5/08
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               USA               75/508202          25/6/98        2476967            14/8/11
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

RAPIDAX                        USA               113149             7/11/90        1745086            5/1/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               UK                1444906            22/10/90       1444906            22/10/07
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

RENAISSANCE                    CTM               1307636            14/9/99        1307636            14/9/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

STOREHOUSE                     UK                1140237            13/9/80        1140237            13/9/11
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

STOREMED                       UK                1176989            18/6/82        1176989            18/6/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

STORENET                       UK                1049140            7/7/75         1049140            7/7/06
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

STOREPLEX                      France            92431479           24/8/92        92431479           24/8/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               Germany           R52808/9 WZ        21/8/92        2051506            21/8/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               USA               75/662730          18/3/99        2378956            22/8/10
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               UK                1509634            14/8/92        1509634            14/8/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

TIENNA                         CTM               1387570            18/11/99       1387570            18/11/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

TRUNKNET                       CTM               1133156            9/4/99         1133156            9/4/09
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

WORDNET                        France            9556446            24/3/95        9556446            24/3/05
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               Germany           39512614           22/3/95        39512614           22/3/05
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
</TABLE>

                                                        314
<PAGE>
<TABLE>
<CAPTION>
<S>                            <C>               <C>                <C>            <C>                <C>
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
                               USA               74/649882          20/3/95        2093445            2/9/07
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               UK                2013801            10/3/95        2013801            10/3/05
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

WORDSAFE                       Denmark           3542/91            2/10/92        9057/92            2/10/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               Norway            912591             23/5/91        153406             26/11/02
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               USA               107236             19/10/90       1745083            5/1/03
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               UK                1439866            7/9/90         1439866            7/9/07
------------------------------ ----------------- ------------------ -------------- ------------------ -------------


                                        PART 2 - THE TRADE MARK APPLICATIONS


------------------------------ ----------------- ------------------ -------------- ------------------ -------------

          Trademark                COUNTRY          APPLICATION      APPLICATION     REGISTRATION       RENEWAL
                                                                        DATE
                                                      NUMBER                            NUMBER            DATE
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

BIG PICTURE TECHNOLOGY         CTM               2052991            24/1/01
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

                               USA               76/288370          20/7/01
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

INVESTIGATOR                   USA               76/149047          18/10/00
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

RENAISSANCE                    USA               75/837065          1/11/99
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

TIENNA                         USA               75/924305          22/02/00
------------------------------ ----------------- ------------------ -------------- ------------------ -------------

TRUNKNET                       USA               75/698405          5/5/99
------------------------------ ----------------- ------------------ -------------- ------------------ -------------
</TABLE>


                                                PART 3 - DOMAIN NAME



                                                        315
<PAGE>
<TABLE>
<CAPTION>

                                                     SCHEDULE 2

                                               THE PATENT APPLICATION

<S>                <C>                <C>                <C>            <C>                <C>
------------------ ------------------ ----------------- -------------- --------------- -------------- ---------------

  PATENT TITLE     REGISTERED OWNER     APPLICATION     APPLICATION     PUBLICATION     PUBLICATION    INVENTOR(S)
                                           NUMBER       DATE               NUMBER          DATE
------------------ ------------------ ----------------- -------------- --------------- -------------- ---------------

VOICE ACTIVITY     Thales Contact     UK 9916430.3      13/7/99        GB 2352948      7/2/01         Neil Martin
MONITOR            Solutions                                                                          Crick
------------------ ------------------ ----------------- -------------- --------------- -------------- ---------------
</TABLE>


                                                        316
<PAGE>


                                   SCHEDULE 3

                               THE COPYRIGHT WORKS


COPYRIGHT & DESIGN RIGHTS IN SOFTWARE ITEMS REPRESENTED IN DESIGN DOCUMENTATION
AND SOURCE CODE LISTINGS.



- Mirra Management Software

- Wordnet Series 1 operating software

- Wordnet Series 2 operating software (developed by Origin Data Realisation, IPR
owned by TCSL)

- Tienna operating software (various releases leading to current release 7.0)

- CMSU Software (various releases leading to current release 7.0)

- RTT Replay to Turret Software (various releases leading to current release
7.0)

- RSMA Renaissance System Management Application (various releases leading to
current release 7.0)

- Replay Server software (various releases leading to current release 7.0)

- SARA Search and Replay application

- SARA NG Search and Replay application

- RECO Radar and Voice Scenario Reconstruction Replay application

- Investigator Search and Replay application (various releases leading to
  current release 7.0 but only up to 4.1 in general release)

- Investigator RX (formerly Radio Replay) Scenario Reconstruction Replay
  application (various releases leading to current release 2.0)

- AQM Agent Quality Management application (various releases leading to current
  release 3.0 but only up to 2.2 in general release)

- Call Confirm & Last Message Replay - Last message Replay applications -both
release 1.0

- MCC Media Control Centre application release 1.0

- Wordnet Vendor Object recorder control software for Prism Integration
  (developed by Cliffstone, IPR owned by TCSL)

- Renaissance Dashboard System Management application

- QA Recorder screen and voice recording application (developed by Cliffstone,
IPR owned by TCSL)


                                       317
<PAGE>

- Smart Logger application (incomplete - developed by Cliffstone, IPR owned by
TCSL)

- RecorderLink recorder integration software (various releases leading to
current release 3.5)

- Web Replay Application (not released)

- Switch Decoder signal processing software (lengthy list of decoders for
various telephone switches)

- Datax Converter software

- Reecoute Immediate software (version 1.9)

- Interface Servieur TCS software (version 1)

- Convertisseur Wave TCS software (version 1)

- Reecoute Immediate Software (Pocket PC) (version 1)

- Reecoute Immediate TCS PC software (version 1)

- Lien Centore 15 software (version 1)

- Lien Centore 15 software (version 2)

- Superviseur software



DATABASE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION



- Tracker database design rights (MicroSoft JET technology)

- Tienna database design rights (MicroSoft SQL Server technology)

- CMSU database design rights (MicroSoft SQL Server technology)



ARCHITECTURE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION



- Renaissance Architecture (various releases up to current release 7.0)



                                       318
<PAGE>




DATED                                                                       2002
--------------------------------------------------------------------------------












THALES ELECTRONICS PLC

THALES CONTACT SOLUTIONS LIMITED











--------------------------------------------------------------------------------

                                   LICENCE

--------------------------------------------------------------------------------


                                      319
<PAGE>


THIS AGREEMENT is made on                           2002

BETWEEN

(1)     THALES ELECTRONICS PLC (Registered No 497098) whose registered office is
        at Western Road, Bracknell, Berkshire RG12 1RG ("the Licensor")

(2)     THALES CONTACT SOLUTIONS LIMITED (Registered No 560700) whose registered
        office is at Western Road, Bracknell, Berks RG12 1RG ("the Licensee")

1       DEFINITIONS

        In this Agreement the following expressions have the following meanings
        unless inconsistent with the context:

        "THE COMMENCEMENT DATE"                 The date of this Agreement

<TABLE>
<CAPTION>
<S>                                             <C>
        "THE DOMAIN NAME"                       The domain name identified in Part 3 of Schedule 1

        "COPYRIGHT WORKS"                       The works identified in SCHEDULE 3.

        "INTELLECTUAL PROPERTY RIGHTS"          All intellectual property in any jurisdiction, whether registered,
                                                pending applications or unregistered, including without limitation: (a)
                                                all trade marks, service marks, brand names, certification marks, trade
                                                dress, business names and other indications of origin; (b) Patents; (c)
                                                trade secrets, know-how and other confidential or non-public business
                                                information, including ideas, manufacturing and production processes and
                                                techniques, research and development information, drawings,
                                                specifications, designs, source codes plans, proposals and technical
                                                data, business and marketing plans, market surveys, market know-how and
                                                customer lists and information; (d) writings and other copyright works,
                                                Including computer programs, source code, object code and documentation
                                                (whether or not
</TABLE>

                                      320
<PAGE>
<TABLE>
<CAPTION>
<S>                                             <C>

                                                released), design right, architecture, database rights, and all
                                                copyrights, and any non-registered. Copyrights to any of the foregoing;
                                                (e) integrated circuit topographies and mask works; (f) Internet
                                                protocol addresses and networks, including domain names, e-mail
                                                addresses, world wide web (www) and http addresses, network names,
                                                network addresses and services; (g) privacy and publicity rights; and
                                                (h) all other intellectual property rights of a similar nature or having
                                                equivalent or similar effect to these which may subsist anywhere in the
                                                world

        "THALES IPR ASSIGNMENT"                 The agreement executed of even date between Thales Contact Solutions
                                                Limited (as assignor) and Thales Electronics Plc (as assignee).

        "LICENSEE'S GROUP"                      Means the Licensee and any holding company of the Licensee and any
                                                subsidiaries of such holding company, holding and subsidiary having the
                                                meanings given in the Companies Act 1985 of the United Kingdom.

        "LICENSOR                               IPR" All Intellectual Property Rights acquired by the Licensor under the
                                                Thales IPR Assignment including but not limited to the Trade Marks, the
                                                Patents, the Patent Applications and the copyright and any design rights
                                                in the Copyright Works, other than the assignment of the rights under
                                                the Wordnet 3 Licence.

        "PATENTS"                               Any and all patents, patent applications (including letters patent,
                                                industrial designs, and inventor's certificates), design registrations,
                                                invention disclosures, and applications to register industrial designs,
                                                and any and all rights to any of the foregoing anywhere in the world,
                                                including any provisionals, substitutions,
</TABLE>

                                      321
<PAGE>
<TABLE>
<CAPTION>
<S>                                             <C>

                                                extensions, supplementary protection certificates, re-examinations,
                                                reissues, renewals, divisions, continuations in part (or in whole),
                                                continued prosecution applications, requests for continued examination,
                                                and other similar filings or notices provided for under the laws of any
                                                country;

        "PATENT APPLICATION"                    The application for the grant of a patent particulars of which are
                                                contained in SCHEDULE 2

        "REGISTERED TRADE MARKS"                The trade marks particulars of which are contained in PART 1 of
                                                SCHEDULE 1

        "TRADE MARKS"                           The Registered Trade Marks and the trade marks the subject of

                                                the Trade Mark Applications and the Domain Names "TRADE MARK
                                                APPLICATIONS" The trade mark applications, particulars of which are
                                                contained in Part 2 of Schedule 1

        "WORDNET 3 LICENCE"                     Means the Software Licence and Service Agreement dated 1st March 2002
                                                between the Licensee and Origin Data Realisation Limited subsequently
                                                assigned to Thales Electronics plc under the Thales IPR Assignment.
</TABLE>

2       PERMISSION TO USE

2.1     The Licensor grants to the Licensee during the Term of this Agreement a
        licence to use the Licensor IPR with the right to sub-license for the
        Term of such Licensor IPR to members of the Licensee's Group.

2.2     The Licensor grants to the Licensee during the Term of this Agreement a
        sub-licence of the Wordnet 3 Licence so far as the Licensor is permitted
        to do so under the terms of the Wordnet 3 Licence.

                                      322
<PAGE>

3       CONSIDERATION

        The Licensee shall pay the Licensor the sum of US$32,050 per week in
        arrears during the Term.

4       OWNERSHIP OF THE LICENSOR IPR

4.1     The Licensee acknowledges that the Licensor IPR are and will remain the
        property of the Licensor, and the Licensee shall not acquire any title
        or interest in the Licensor IPR or goodwill as a result of the
        Licensee's use of them.

4.2     The Licensee shall not do or permit to be done, nor omit to do in
        connection with its use of the Licensor IPR, any act or thing which
        would or might jeopardise or invalidate any registration of the Licensor
        IPR or which might prejudice the right or title of the Licensor to any
        of the Licensor IPR.

5       TERM AND TERMINATION

5.1     This Agreement comes into effect on the Commencement Date and unless
        terminated earlier under the provisions of this Agreement remains in
        force until termination by either party giving to the other not less
        than three months' prior written notice ("the Term"). The Licence in
        relation to each Licensor IPR shall only remain in force so long as each
        Licensor IPR subsists.

5.2     Either party may terminate this Agreement by notice in writing to the
        other if the other is in material breach of this Agreement and shall
        have failed (where the breach is capable of remedy) to remedy the breach
        within 30 days of the receipt of a request in writing from the party not
        in breach to remedy the breach, such request setting out the breach and
        indicating that failure to remedy the breach may result in termination
        of this Agreement.

5.3     In addition to the powers of termination contained elsewhere in this
        Agreement the Licensor shall be entitled to terminate this Agreement
        immediately by notice in writing to the Licensee on any of the following
        grounds:

        5.3.1   the Licensee becomes the subject of voluntary arrangement under
                section 1 Insolvency Act 1986;

        5.3.2   the Licensee is unable to pay its debts within the meaning of
                section 123 Insolvency Act 1986;

                                      323
<PAGE>

        5.3.3   the Licensee has a receiver, manager, administrator or
                administrative receiver appointed over all or any parts of its
                undertaking, assets or income;

        5.3.4   the Licensee has passed a resolution for its winding-up;

        5.3.5   the Licensee has a petition presented to any court for its
                winding-up or for an administration order; or

        5.3.6   an analogous event happens in any other jurisdiction.

6       CONSEQUENCES OF TERMINATION

        The termination of this Agreement howsoever caused is without prejudice
        to the rights, duties and liabilities of either party accrued prior to
        termination. The clauses of this Agreement which expressly or impliedly
        have effect after termination will continue to be enforceable
        notwithstanding termination.

7       ASSIGNMENT

        The Licensee may not assign the benefit or delegate the burden of this
        Agreement without the prior written consent of the Licensor which shall
        not be unreasonably withheld or delayed. The Licensor may assign this
        Agreement on disposing of the Licensor IPR without the consent of the
        Licensee.

8       GOVERNING LAW AND JURISDICTION

8.1     This Agreement is governed by, and shall be construed in accordance with
        English law.

8.2     The courts of England and Wales shall have non-exclusive jurisdiction to
        settle any disputes which may arise out of or in connection with this
        Agreement. The parties agree to submit to such jurisdiction.

9       COUNTERPARTS

        This Agreement may be executed in any number of counterparts, and by the
        parties on separate counterparts, each of which so executed and
        delivered shall constitute an original, but all the counterparts shall
        together constitute one and the same instrument.

                                      324
<PAGE>

AS WITNESS the hands of the parties or their duly authorised agents for and on
behalf of the parties on the date stated at the beginning of this Agreement


Executed on behalf of           )
THALES ELECTRONICS PLC          )
LICENSOR                        )
in the presence of:             )

                                Director


                                Director/Secretary




Executed on behalf of           )
THALES CONTACT SOLUTIONS        )
LIMITED                         )
LICENSOR                        )
in the presence of:             )



                                Director


                                Director/Secretary



                                      325
<PAGE>
<TABLE>
<CAPTION>

                                                     SCHEDULE 1

                                         PART 1 - THE REGISTERED TRADE MARKS

<S>                            <C>               <C>                <C>              <C>              <C>
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

          Trademark                COUNTRY          APPLICATION       APPLICATION     REGISTRATION      RENEWAL
                                                                         DATE
                                                      NUMBER                             NUMBER           DATE
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

A-MUX LOGO                     UK                2059568            5/3/96           2059568          5/3/06
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

CALLMASTER                     Norway            912590             23/5/91          155604           11/3/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               UK                1452564            9/1/91           1452564          9/1/08
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

GEOSTORE                       UK                1007802            9/3/73           1007802          9/3/08
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

INVESTIGATOR                   CTM               1832823            31/8/00          1832823          31/8/10
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

MIRRA                          CTM               830786             21/5/98          830786           21/5/08
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               USA               75/508202          25/6/98          2476967          14/8/11
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

RAPIDAX                        USA               113149             7/11/90          1745086          5/1/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               UK                1444906            22/10/90         1444906          22/10/07
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

RENAISSANCE                    CTM               1307636            14/9/99          1307636          14/9/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

STOREHOUSE                     UK                1140237            13/9/80          1140237          13/9/11
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

STOREMED                       UK                1176989            18/6/82          1176989          18/6/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

STORENET                       UK                1049140            7/7/75           1049140          7/7/06
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

STOREPLEX                      France            92431479           24/8/92          92431479         24/8/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               Germany           R52808/9 WZ        21/8/92          2051506          21/8/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               USA               75/662730          18/3/99          2378956          22/8/10
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               UK                1509634            14/8/92          1509634          14/8/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

TIENNA                         CTM               1387570            18/11/99         1387570          18/11/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

TRUNKNET                       CTM               1133156            9/4/99           1133156          9/4/09
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

WORDNET                        France            9556446            24/3/95          9556446          24/3/05
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               Germany           39512614           22/3/95          39512614         22/3/05
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               USA               74/649882          20/3/95          2093445          2/9/07
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               UK                2013801            10/3/95          2013801          10/3/05
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

WORDSAFE                       Denmark           3542/91            2/10/92          9057/92          2/10/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               Norway            912591             23/5/91          153406           26/11/02
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

                               USA               107236             19/10/90         1745083          5/1/03
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
</TABLE>

                                                        326
<PAGE>
<TABLE>
<CAPTION>
<S>                            <C>               <C>                <C>              <C>              <C>
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------

          Trademark                COUNTRY          APPLICATION       APPLICATION     REGISTRATION      RENEWAL
                                                                         DATE
                                                      NUMBER                             NUMBER           DATE
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------


------------------------------ ----------------- ------------------ ---------------- ---------------- -------------
                               UK                1439866            7/9/90           1439866          7/9/07
------------------------------ ----------------- ------------------ ---------------- ---------------- -------------




                                   PART 2 - THE REGISTERED TRADE MARK APPLICATIONS


------------------------------ --------------- ------------------ ------------------ ---------------- -------------

          Trademark               COUNTRY         APPLICATION     APPLICATION DATE    REGISTRATION      RENEWAL

                                                    NUMBER                               NUMBER           DATE
------------------------------ --------------- ------------------ ------------------ ---------------- -------------

BIG PICTURE TECHNOLOGY         CTM             2052991            24/1/01
------------------------------ --------------- ------------------ ------------------ ---------------- -------------

                               USA             76/288370          20/7/01
------------------------------ --------------- ------------------ ------------------ ---------------- -------------

INVESTIGATOR                   USA             76/149047          18/10/00
------------------------------ --------------- ------------------ ------------------ ---------------- -------------

RENAISSANCE                    USA             75/837065          1/11/99
------------------------------ --------------- ------------------ ------------------ ---------------- -------------

TIENNA                         USA             75/924305          22/02/00
------------------------------ --------------- ------------------ ------------------ ---------------- -------------

TRUNKNET                       USA             75/698405          5/5/99
------------------------------ --------------- ------------------ ------------------ ---------------- -------------
</TABLE>



                                                PART 3 - DOMAIN NAME


bigpictech.com


                                                        327
<PAGE>
<TABLE>
<CAPTION>

                                   SCHEDULE 2

                             THE PATENT APPLICATION

<S>               <C>            <C>              <C>               <C>              <C>              <C>
----------------- -------------- ---------------- ----------------- ---------------- ---------------- ---------------

PATENT TITLE      REGISTERED     APPLICATION      APPLICATION DATE  PUBLICATION      PUBLICATION      INVENTOR(S)
                  OWNER          NUMBER                             NUMBER           DATE
----------------- -------------- ---------------- ----------------- ---------------- ---------------- ---------------

VOICE ACTIVITY    Thales         UK 9916430.3     13/7/99           GB 2352948       7/2/01           Neil Martin
MONITOR           Contact                                                                             Crick
                  Solutions
----------------- -------------- ---------------- ----------------- ---------------- ---------------- ---------------
</TABLE>



                                                        328
<PAGE>

                                   SCHEDULE 3


                               THE COPYRIGHT WORKS


COPYRIGHT & DESIGN RIGHTS IN SOFTWARE ITEMS REPRESENTED IN DESIGN DOCUMENTATION
AND SOURCE CODE LISTINGS.



- Mirra Management Software

- Wordnet Series 1 operating software

- Wordnet Series 2 operating software (developed by Origin Data Realisation, IPR
owned by TCSL)

- Tienna operating software (various releases leading to current release 7.0)

- CMSU Software (various releases leading to current release 7.0)

- RTT Replay to Turret Software (various releases leading to current release
7.0)

- RSMA Renaissance System Management Application (various releases leading to
current release 7.0)

- Replay Server software (various releases leading to current release 7.0)

- SARA Search and Replay application

- SARA NG Search and Replay application

- RECO Radar and Voice Scenario Reconstruction Replay application

- Investigator Search and Replay application (various releases leading to
  current release 7.0 but only up to 4.1 in general release)

- Investigator RX (formerly Radio Replay) Scenario Reconstruction Replay
  application (various releases leading to current release 2.0)

- AQM Agent Quality Management application (various releases leading to current
  release 3.0 but only up to 2.2 in general release)

- Call Confirm & Last Message Replay - Last message Replay applications -both
release 1.0

- MCC Media Control Centre application release 1.0

- Wordnet Vendor Object recorder control software for Prism Integration
  (developed by Cliffstone, IPR owned by TCSL)

- Renaissance Dashboard System Management application


                                       329
<PAGE>

- QA Recorder screen and voice recording application (developed by Cliffstone,
IPR owned by TCSL)

- Smart Logger application (incomplete - developed by Cliffstone, IPR owned by
TCSL)

- RecorderLink recorder integration software (various releases leading to
current release 3.5)

- Web Replay Application (not released)

- Switch Decoder signal processing software (lengthy list of decoders for
various telephone switches)

- Datax Converter software

- Reecoute Immediate software (version 1.9)

- Interface Servieur TCS software (version 1)

- Convertisseur Wave TCS software (version 1)

- Reecoute Immediate Software (Pocket PC) (version 1)

- Reecoute Immediate TCS PC software (version 1)

- Lien Centore 15 software (version 1)

- Lien Centore 15 software (version 2)

- Superviseur software



DATABASE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION



- Tracker database design rights (MicroSoft JET technology)

- Tienna database design rights (MicroSoft SQL Server technology)

- CMSU database design rights (MicroSoft SQL Server technology)



ARCHITECTURE DESIGN RIGHTS REPRESENTED IN DESIGN DOCUMENTATION



- Renaissance Architecture (various releases up to current release 7.0)


                                      330
<PAGE>

DATED                                                                       2002
--------------------------------------------------------------------------------










THALES ELECTRONICS PLC

NIGHT

TRADER SA









--------------------------------------------------------------------------------

                 ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS

--------------------------------------------------------------------------------





                                      331
<PAGE>

THIS AGREEMENT is made on                                                   2002

BETWEEN

(1)     THALES ELECTRONICS PLC (registered number 560700) whose registered
        office is at Western Road, Bracknell, Berks RG12 1RG (the "Assignor");
        and

(2)     NIGHT [(registered number )] whose registered office is at (the
        "Assignee"); and

(3)     THALES SA a French societe anonyme having its registered office at 173,
        Boulevard Haussmann, Paris (75008) ("Thales").

BACKGROUND

(A)     The Assignor is the proprietor of the Assignor IPR assigned to it and
        has rights under the Wordnet 3 Licence (subject to certain obligations)
        pursuant to an Agreement dated [ ] with Thales Contact Solutions Limited
        attached at Schedule 1 ("the Thales IPR Assignment").

(B)     By an Agreement dated [ ] the Assignor has licensed the Assignor IPR and
        granted a sub-licence to the extent possible of the Wordnet 3 Licence to
        Thales Contact Solutions Limited ("the IPR Licence").

(C)     Thales has granted patent licences over all group patents, including the
        Patent Application, to Alcatel and Thomson Multimedia ("Cross Patents
        Licence Agreements").

(D)     By an Agreement dated [ ] ("the SPA") between Thales, Night and other
        purchasers, Thales has agreed to procure that the Assignor assigns the
        Assignor IPR and the rights under the Wordnet 3 Licence to the Assignee
        on the terms and conditions set out below subject to the terms and
        conditions of the SPA.

1       INTERPRETATION

        All defined terms (except for Assignor, Assignee and Thales, which shall
        have the meanings set out in this Agreement) shall have the meanings set
        out in the Thales IPR Assignment.

                                      332
<PAGE>

2       CONSIDERATION

        In consideration of the sum of US$4,000,000 (four million US dollars)
        paid by the Assignee to the Assignor, receipt of which the Assignor
        hereby acknowledges, the Assignor hereby enters into the terms of this
        Agreement.

3       ASSIGNMENT

        The Assignor assigns to the Assignee all such right, title and interest
        as it acquired in the Assignor IPR and the rights under the Wordnet 3
        Licence subject to the obligations in clause 7 of the Thales IPR
        Assignment under the Thales IPR Assignment subject to the IPR Licence
        and the Cross Patents Licence Agreements. The Assignor also assigns the
        right to sue for infringements of the Assignor IPR which have occurred
        since the Thales IPR Assignment and to retain any damages obtained as a
        result of such action.

4       FURTHER ASSURANCE

4.1     The Assignor agrees at its own expense to execute such further
        documents, and take such actions and do such things (including, without
        limitation, co-operating with the Assignee to enable the Assignee, at
        Assignee's cost promptly to record itself as the registered proprietor
        of any registered rights transferred to it under this Agreement), as may
        be reasonably requested by the Assignee to give full effect to the terms
        of this Agreement and to secure the full right, title and interest of
        the Assignee in the Assignor IPR.

4.2     The parties hereto agree to use reasonable endeavours to enter into a
        deed of novation with Origin Data Realisation Limited to novate the
        Wordnet 3 Licence in favour of the Assignee within 28 days of this
        Agreement.

5       REGISTRATION

        Assignee shall, at its cost, promptly record itself as registered
        proprietor of any registered rights transferred to it under this
        Agreement.

6       REMEDIES

        The Assignee agrees that if it has any claim for breach of this
        Agreement against either the Assignor and/or Thales then to the extent
        that such claim is

                                      333
<PAGE>

        capable of being the subject of a claim against Thales under the SPA, it
        shall bring such claim solely against Thales under the SPA and not
        against the Assignor and/or Thales under this Agreement.

7       COUNTERPARTS

        This Agreement may be executed in any number of counterparts, each of
        which so executed will be an original, but together will constitute one
        and the same instrument.

8       CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

        The parties to this Agreement do not intend that any of its terms will
        be enforceable by virtue of the Contracts (Rights of Third Parties) Act
        1999 by any person not a party to it.

9       GOVERNING LAW AND JURISDICTION

9.1     The formation, existence, construction, performance, validity and all
        aspects whatsoever of this Agreement or of any term of this Agreement
        will be governed by the law of England and Wales.

9.2     The courts of England and Wales will have non-exclusive jurisdiction to
        settle any disputes that may arise out of or in connection with this
        Agreement. The parties irrevocably agree to submit to that jurisdiction.

AS WITNESS the hands of the parties or their duly authorised agents for and on
behalf of the parties on the date stated at the beginning of this Agreement

                                      334
<PAGE>

Executed on behalf of           )
THALES ELECTRONICS PLC          )
ASSIGNOR                        )
in the presence of:             )


                                Director


                                Director/Secretary


Executed on behalf of           )
NIGHT                           )
ASSIGNEE                        )
in the presence of:             )


                                Director


                                Director/Secretary


Executed on behalf of           )
THALES SA                       )
in the presence of:             )


                                Director


                                Director/Secretary


                                      335
<PAGE>

DATED                                                                       2002
--------------------------------------------------------------------------------








THALES CONTACT SOLUTIONS LIMITED

[UK Acquisition Co]

THALES ELECTRONICS PLC









--------------------------------------------------------------------------------

                              DEED OF NOVATION

--------------------------------------------------------------------------------


                                      336
<PAGE>

THIS DEED OF NOVATION is made on the day of                                 2002

BETWEEN

(1)     THALES CONTACT SOLUTIONS LIMITED (Registered Number 560700) whose
        registered office address is at Western Road, Bracknell, Berks RG12 1RG
        ("the Assignor")

(2)     [UK Acquisition Co] (Registered Number [NUMBER]) whose registered office
        is at [ADDRESS] ("the Assignee")

(3)     THALES ELECTRONICS PLC (registered number 497098)] whose registered
        office is at Western Road, Bracknell, Berkshire RG12 1RG ("the Third
        Party")

BACKGROUND

(A)     This novation deed is supplemental to a licence agreement between the
        Assignor and the Third Party dated [DATE] attached at Schedule 1 ("the
        IPR Licence") under which the Third Party granted the Assignor a licence
        to use Licensor IPR (as defined in the IPR Licence).

(B)     The Assignor has transferred its business to the Assignee pursuant to a
        Sale and Purchase Agreement of even date ("SPA") and the Third Party is
        assigning the Licensor IPR and the rights under the Wordnet 3 Licence
        (as defined in the IPR Licence)to the Assignee's holding company.

(C)     The Assignor wishes to be released from the IPR Licence and the Third
        Party agrees to release the Assignor in consideration of the Assignee's
        undertaking to perform the IPR Licence and to be bound in place of the
        Assignor.

OPERATIVE PROVISIONS

1       The Assignee undertakes to the Third Party to perform from the date of
        this Deed obligations on the Assignor's part contained in the IPR
        Licence and to be bound by the terms of the IPR Licence in every way as
        if the Assignee were a party to the IPR Licence from the date of this
        Deed instead of the Assignor.

                                      337
<PAGE>

2       In consideration of the undertaking of the Assignee in CLAUSE 1 and with
        the consent of the Third Party, the Assignor assigns all its rights
        (including without limitation any present, future or contingent interest
        or right to any sums or damages payable under or in connection with the
        IPR Licence) from the date of this Deed under the IPR Licence to the
        Assignee.

3       In consideration of the Assignor procuring the undertaking of the
        Assignee in CLAUSE 1, the Third Party releases and discharges the
        Assignor from all claims, obligations, demands and duties whatsoever in
        respect of the IPR Licence accruing from the date of this Deed and
        accepts the liability of the Assignee upon the IPR Licence instead of
        the liability of the Assignor for all claims, obligations, demands and
        duties accruing on or after the date of this Deed under the IPR Licence.

4       The Third Party undertakes with the Assignee to perform its liabilities
        and obligations under the IPR Licence as if the Assignee had at all
        times been party to the IPR Licence instead of the Assignor and
        acknowledges that the Assignee shall be entitled to enjoy the benefit of
        the IPR Licence instead of the Assignor.

5       The formation, existence, construction, performance, validity and all
        aspects whatsoever of this Deed or of any term of this Deed shall be
        governed by English law. The English courts shall have non-exclusive
        jurisdiction to settle any disputes which may arise out of or in
        connection with this Deed. The parties to this Deed agree to submit to
        that jurisdiction.

6       To the extent provided for in Clause 6 of the SPA, the Assignee agrees
        to indemnify, keep indemnified and hold harmless the Assignor from and
        against all costs (including the costs of enforcement), expenses,
        liabilities (including any tax liability), injuries, losses (which
        includes, without limitation, direct, indirect and consequential loss
        and loss of profit), damages, claims, demands, proceedings or legal
        costs (on a full indemnity basis) and judgments which the Assignor
        incurs or suffers as a consequence of a direct or indirect breach or
        negligent performance or failure in performance by the Assignee of the
        terms of the IPR Licence from the date of this Deed or of this Deed.

                                      338
<PAGE>

7       The parties to this Deed do not intend that any of its terms will be
        enforceable by virtue of the Contracts (Rights of Third Parties) Act
        1999 by any person not a party to it.

8       This Agreement may be executed in any number of counterparts, each of
        which so executed will be an original, but together will constitute one
        and the same instrument.

This document has been executed and delivered as a deed on the date stated at
the beginning of this Deed.

                                      339
<PAGE>

THE COMMON SEAL of                      )
THALES CONTACT SOLUTIONS                )
LIMITED                                 )
was affixed in the presence of:         )


                                        Director:


                                        Director/Secretary:





THE COMMON SEAL of                      )
[UK Acquisition Co]                     )
was affixed in the presence of:         )


                                        Director:


                                        Director/Secretary:


THE COMMON SEAL of                      )
THALES ELECTRONICS PLC                  )
was affixed in the presence of:         )


                                        Director:


                                        Director/Secretary:



                                      340
<PAGE>

                                   SCHEDULE 15

                         US BUSINESS TRANSFER AGREEMENT







                                      341
<PAGE>

                       ASSIGNMENT AND ASSUMPTION AGREEMENT


        THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT") is entered
into as of ______________, _____,[COMPLETION DATE] by and among Trader SA, a
French societe anonyme having its registered office at 173 Boulevard Haussmann,
Paris, France (75008) ("TRADER"), Trader TRC, Inc., a Delaware corporation and
indirect wholly-owned subsidiary of Trader ("TRC"), Trader Contact Solutions
Inc., a Delaware corporation and wholly-owned subsidiary of TRC ("ASSIGNOR"),
Night-Systems Ltd., a company organized under the laws of Israel having its
registered office at 8 Hapnina Street, Ra'anana 43107, Israel ("NIGHT"), and
[Night/Trader US Acquisition Corp.], a [Delaware] corporation and wholly-owned
subsidiary of Night ("ASSIGNEE") .



                               W I T N E S S E T H

        WHEREAS, Trader, through certain of its wholly owned subsidiaries, is
engaged, among other things, in the business of the design, development,
production, marketing and supply of various secure voice recording, surveillance
and replay systems and products and application software for business
performance management solutions in contact centres, public safety and wholesale
trading platforms and the provision of ancillary services currently carried on
by the Assignors (the "BUSINESS");

        WHEREAS, Trader has agreed to sell, or procure the sale of, and Night
has agreed to purchase, substantially all of the assets of the Business, either
directly or through one or more of its subsidiaries;

        WHEREAS, Trader, Night, Assignee and certain of Night's other
subsidiaries (Night, Assignee and such other subsidiaries being collectively
referred to herein as the "PURCHASERS") have entered into that certain Sale and
Purchase Agreement dated as of ______________ __, 2002 (the "SALE AND PURCHASE
AGREEMENT") providing, subject to the terms and conditions set forth therein,
for the sale, transfer, assignment and delivery by Trader to the Purchasers of
the Business as a going concern and the Assets (each as defined in the Sale and
Purchase Agreement);

        WHEREAS, pursuant to Section 5.4.4 of the Sale and Purchase Agreement,
Trader has agreed to cause Assignor to sell to Assignee, and Assignee has agreed
to purchase from Assignor, that part of the Business operated as a going concern
by Assignor and all the Assets used in that part of the Business by Assignor
(the "US BUSINESS");

        WHEREAS, pursuant to Section 6.2.4 of the Sale and Purchase Agreement,
Assignee has agreed to assume that portion of the Assumed Liabilities (as
defined in the Sale and Purchase Agreement) as relates to the US Business (the
"US BUSINESS ASSUMED LIABILITIES"); and

        WHEREAS, Assignor is entering into this Agreement for the purpose of
assigning and transferring to Assignee all of Assignor's rights, liabilities and
obligations in and relating to the US Business pursuant to Section 5.4.4 of the
Sale and Purchase Agreement; and

        WHEREAS, Assignee is executing and delivering this Agreement for the
purpose of assuming the US Business Assumed Liabilities pursuant to Section
6.2.4 of the Sale and Purchase Agreement.

                                      342
<PAGE>

        NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and agreements contained herein and in the Sale and
Purchase Agreement, the parties hereto agree as follows:

        1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Sale and
Purchase Agreement.

        2. ASSIGNMENT. Assignor, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby sells,
transfers, conveys, assigns and delivers to Assignee all of Assignor's right,
title, and interest in, to or under all of the Assets constituting the US
Business that are owned or held by them, including, without limitation, each of
the following as they relate to or comprise the US Business: the Goodwill and
any other intangible assets included as part of the Assets of the US Business,
the benefit of the Contracts, all of the rights against third parties
(including, without limitation, all rights in connection with such third party
guarantees, warranties, indemnities, restrictive covenants, confidentiality
obligations and representations and all rights of action of whatever kind
whether or not any proceedings have commenced) with respect to the US Business,
the Accounts Receivable, the Business Information, the Records, and all other
property rights and all other assets of whatsoever nature of any member of the
Trader Group used exclusively in relation to the US Business.

        3. ASSUMPTION. Assignee hereby accepts such assignment and assumes and
agrees to perform any and all of the US Business Assumed Liabilities from and
after the Completion Date, subject to the terms and conditions of the Sale and
Purchase Agreement. Except for the US Business Assumed Liabilities, Assignee is
not assuming any liabilities or obligations of Assignor or any of Assignor's
affiliates or of the Business of any kind, character or description, whether
known, unknown, accrued, absolute, contingent or otherwise and, except as
otherwise contemplated by the Sale and Purchase Agreement, Assignor and its
affiliates shall continue to be responsible for all such liabilities and
obligations other than the US Business Assumed Liabilities from and after the
Completion Date.

        4. BINDING AGREEMENT; AMENDMENTS. This Agreement shall be binding on
each of the parties and their respective heirs, representatives, successors and
assigns. This Agreement may not be modified except by an instrument in writing
which is signed by each of the parties.

        5. GOVERNING LAW. This Agreement, including all matters of construction,
validity and performance, shall in all respects be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
in such State and to be performed entirely within such State, without giving
effect to principles relating to conflicts of law.

                                      343
<PAGE>

        6. FURTHER ASSURANCES. Each of Assignor, TRC and Trader hereby covenants
and agrees that, from time to time at Assignee's or Night's request after
delivery of this Agreement and without further consideration, Assignor, TRC
and/or Trader, as the case may be, will do, execute, acknowledge and deliver, or
will cause to be done, executed, acknowledged and delivered, all and any such
further acts, conveyances, transfers, assignments, instruments and assurances as
may be reasonably required to effectively grant, convey, assign, transfer and
set over to and vest in Assignee any and all of the Assets of the US Business.

        7. OTHER AGREEMENTS PREVAIL. Assignor and Assignee hereby acknowledge
and agree that neither the representations and warranties nor the rights or
remedies of any party under the Sale and Purchase Agreement shall be deemed to
be enlarged, modified or altered in any way by this Agreement. In the event of a
conflict between the terms of this Agreement and the terms of the Sale and
Purchase Agreement, the terms of the Sale and Purchase Agreement shall prevail.

        8. COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.

                            [signature page follows]



                                      344
<PAGE>

        IN WITNESS WHEREOF, this Assignment and Assumption Agreement has been
duly executed as of the date first above written.

ASSIGNOR:                                  ASSIGNEE:
TRADER CONTACT SOLUTIONS INC.              [NIGHT/TRADER US ACQUISITION CORP.]



                                           By:    _____________________________
By:    _____________________________
                                                  Name:
       Name:
                                                  Title:
       Title:
                                           ACKNOWLEDGED AND AGREED:

ACKNOWLEDGED AND AGREED:
                                           NIGHT SYSTEMS LTD.


TRADER SA
                                           By:    _____________________________

                                                  Name:

                                                  Title:
By:    _____________________________

       Name:

       Title:


TRADER TRC, INC.




By:    _____________________________

       Name:

       Title:


                                      345
<PAGE>

                                  BILL OF SALE

        KNOW ALL MEN BY THESE PRESENTS, that TRADER CONTACT SOLUTIONS INC.
("SELLER"), a Delaware corporation and wholly-owned subsidiary of TRADER TRC,
INC. ("TRC"), which is itself a Delaware corporation and an indirect
wholly-owned subsidiary of TRADER SA, a French societe anonyme having its
registered office at 173 Boulevard Haussmann, Paris, France (75008)("TRADER"),
for good and valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, and intending to be legally bound, does hereby sell,
transfer, convey, set over and deliver to [Night/Trader US Acquisition Corp.]
("BUYER"), its successors and assigns, all of Seller's right, title and interest
in and to the Assets comprising the US Business (capitalized terms used, but not
defined in this bill of sale having the meanings ascribed thereto in that
certain Sale and Purchase Agreement dated as of ______________ __, 2002 by and
among Seller, Buyer, Trader, Night-Systems Ltd, a company organized under the
laws of Israel having its registered office at 8 Hapnina Street, Ra'anana,
Israel ("NIGHT") and certain other subsidiaries of Night (the "SALE AND PURCHASE
AGREEMENT")), including, without limitation, to the extent related to or
comprising the US Business, the Machinery and Equipment, the Fixtures and
Fittings, the Inventory and all other property rights and all other assets of
whatsoever nature used exclusively in relation to the Business.

        Seller hereby constitutes and appoints Buyer the true and lawful
attorney of Seller, with full authority and power of substitution, in the name
and stead of Seller, but on behalf and for the benefit of Buyer to demand and
receive any and all of such Assets, to give receipts and releases for and in
respect of the same, or any part thereof, and to execute on behalf of Seller
additional instruments of transfer and assignment and do all acts and things in
relation to such Assets which Buyer or Night shall deem reasonably required in
order to transfer and assign to and vest in Buyer full right and title to and in
all of such Assets.

        Seller hereby covenants that from time to time and at Buyer's request
and without further consideration, Seller shall do, execute, acknowledge and
deliver or shall cause to be done, executed, acknowledged and delivered all and
every such further acts, transfers, conveyances, assignments, powers of attorney
and assurances as reasonably may be required for assuring, conveying,
transferring, confirming and vesting unto Buyer of any of such Assets.

        Nothing in this instrument, express or implied, is intended or shall be
construed to confer upon, or give to, any person, firm or corporation other than
Buyer and its successors and assigns, any remedy or claim under or by reason of
this instrument or by any of its terms, covenants or conditions, and all the
terms, covenants and conditions, promises and agreements in this instrument
contained shall be for the sole and exclusive benefit of Buyer, its successors
and assigns.

                            [signature page follows]



                                      346
<PAGE>



        IN WITNESS WHEREOF, the undersigned have executed this Bill of Sale on
this _____ day of ___________________, ____.


                                                TRADER CONTACT SOLUTIONS INC.




        By:_____________________________

        Name:

        Title:





                                      347
<PAGE>

                  STOCK AND PROMISSORY NOTE PURCHASE AGREEMENT



        This STOCK AND PROMISSORY NOTE PURCHASE AGREEMENT (the "Agreement"),
dated as of __________ __, ___________ (the "Effective Date"), by and between
Trader TRC Inc., a corporation organized under the laws of the State of Delaware
("Seller") and [Night-Systems Ltd., a company organized under the laws of Israel
("Purchaser")]


        WHEREAS, Seller is the record owner of Three Million Three Hundred
Fifty-Six Thousand, Three Hundred Thirty-Five (3,356,335) shares of Series C
Convertible Preferred Stock, par value $1.00 per share (the "Cliffstone
Shares"), of Cliffstone Corporation ("Cliffstone");


        WHEREAS, Seller is a party to that certain Credit Agreement dated as of
September 10, 2001 between Cliffstone, as Borrower, and Seller, as Lender, as
amended by that certain First Amendment to Credit Agreement dated as of March
12, 2002 (the "Credit Agreement") and Seller is the holder and record owner of a
senior secured convertible promissory note, dated [March 12, 2002], in the
aggregate principal amount of One Million Five Hundred Thousand United States
Dollars (US$ 1,500,000) issued under the Credit Agreement by Cliffstone in favor
of Seller (the "Cliffstone Note");


        WHEREAS, Trader SA, a French societe anonyme having its registered
office at 173 Boulevard Haussmann, Paris, France (75008) and the parent entity
of Seller ("Trader"), Purchaser, and certain of Purchaser's subsidiaries have
entered into that certain Sale and Purchase Agreement dated as of ______________
__, 2002 (the "Sale and Purchase Agreement") providing, subject to the terms and
conditions set forth therein, for the sale, transfer, assignment and delivery by
Trader to Purchaser and its subsidiaries of the Business and Assets described
therein;


        WHEREAS, pursuant to Section 4 of the Sale and Purchase Agreement,
Trader has agreed to cause Seller to sell to Purchaser, and Purchaser has agreed
to purchase from Seller, the Cliffstone Shares and the Cliffstone Note;


        WHEREAS, Seller is entering into this Agreement for the purpose of
selling, assigning and transferring to Purchaser all of Seller's right, title
and interest in and to the Cliffstone Shares and the Cliffstone Note as
contemplated by the Sale and Purchase Agreement; and


        WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, subject to the terms and conditions set forth herein and
in the Sale and Purchase Agreement, all of the Cliffstone Shares and the
Cliffstone Note for the consideration set forth in the Sale and Purchase
Agreement.


                                      348
<PAGE>


        NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and conditions contained herein and in the Sale and Purchase
Agreement (including the purchase price set forth in Section 7 of the Sale and
Purchase Agreement), the parties hereto, intending to be legally bound, hereby
agree as follows:


        SECTION 1. PURCHASE AND SALE OF THE CLIFFSTONE SHARES. Subject to the
terms and conditions set forth herein, Purchaser hereby agrees to purchase from
Seller, and Seller hereby agrees to sell, transfer and assign to Purchaser, all
of Seller's right, title and interest in and to the Cliffstone Shares for a
portion of the purchase price set forth in Section 7 of the Sale and Purchase
Agreement, payable and allocable as provided for in the Sale and Purchase
Agreement.


        SECTION 2. PURCHASE AND SALE OF THE CLIFFSTONE NOTE. Subject to the
terms and conditions set forth herein, Purchaser hereby agrees to purchase from
Seller, and Seller hereby agrees to sell, transfer and assign to Purchaser, all
of Seller's right, title and interest in and to the Cliffstone Note for a
portion of the purchase price set forth in Section 7 of the Sale and Purchase
Agreement, payable and allocable as provided for in the Sale and Purchase
Agreement.


        SECTION 3. CLOSING. Upon the terms and subject to the conditions set
forth herein, the consummation of the purchase and sale of the Cliffstone Shares
and the Cliffstone Note (the "Closing") shall occur simultaneously with, and at
the same location as, the completion of the transactions contemplated by the
Sale and Purchase Agreement. At the Closing, Seller shall deliver to Purchaser
stock certificates of Cliffstone (the "Certificates"), duly endorsed in blank or
accompanied by a stock power duly endorsed in blank and in proper form for
transfer, representing the Cliffstone Shares, together with the original,
manually executed copy of the Cliffstone Note, also duly endorsed and in proper
form for transfer to Purchaser.


        SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Purchaser as follows:


        4.1 BINDING EFFECT. This Agreement has been duly executed and delivered
by Seller and constitutes the legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms except as such
enforceability may be limited by (a) bankruptcy, insolvency, moratorium,
reorganization and other laws affecting creditors' rights generally, and (b)
general principles of equity, regardless of whether asserted in a proceeding in
equity or at law.

                                      349
<PAGE>


        4.2 OWNERSHIP OF THE SELLER SHARES. Seller has good and valid title to
the Cliffstone Shares and the Cliffstone Note free and clear of all liens,
charges, claims or encumbrances that may have been created by Seller. To the
best of Seller's knowledge, there are no outstanding or authorized options,
warrants, rights, calls, commitments, conversion rights, rights of exchange or
other agreements of any character, contingent or otherwise, providing for the
purchase, issuance or sale of any of the Cliffstone Shares, or any arrangements
that require or permit any Cliffstone Shares to be voted by or at the discretion
of anyone other than Seller, and there are no restrictions of any kind on the
transfer of the Cliffstone Shares other than (a) restrictions on transfer set
forth in that certain Investor Rights Agreement, dated as of August 21, 2000, as
amended by Amendment No. 2 thereto, dated as of September 10, 2001 (as so
amended, the "Investor Rights Agreement"), (b) restrictions on transfer imposed
by the Securities Act of 1933, as amended (the "1933 Act"); and (c) restrictions
on transfer imposed by applicable state securities or "Blue Sky" laws.


        4.3 NO REQUIRED CONSENTS. Seller has obtained all consents and approvals
required with respect to the transfer of the Cliffstone Shares and the
Cliffstone Note to Purchaser as contemplated by this Agreement, including,
without limitation, any consents or approvals required under the terms and
conditions of the Investor Rights Agreement, the Credit Agreement or the
Cliffstone Note, and the Seller has otherwise complied in all respects with its
obligations under the Investor Rights Agreement in connection with the sale of
the Cliffstone Shares to Purchaser and under the Credit Agreement in connection
with the sale of the Cliffstone Note to Purchaser.


        4.4 NO FURTHER REPRESENTATIONS OR WARRANTIES. Seller makes no
representations or warranties except as expressly set forth herein.


        SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller as follows:


        5.1 BINDING EFFECT. This Agreement has been duly executed and delivered
by Purchaser and constitutes the legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms except as
such enforceability may be limited by (a) bankruptcy, insolvency, moratorium,
reorganization and other laws affecting creditors' rights generally and (b)
general principles of equity, regardless of whether asserted in a proceeding in
equity or at law.


                                      350
<PAGE>

        5.2 INVESTMENT REPRESENTATIONS. Purchaser acknowledges, represents and
warrants to Seller as follows:


        (a) Purchaser acknowledges that neither the Cliffstone Shares nor the
Cliffstone Note have been registered under the 1933 Act or other applicable
federal or state statutes regulating the purchase and sale of securities.


        (b) Purchaser is acquiring the Cliffstone Shares and the Cliffstone Note
solely for its own account for the purpose of investment and not as a nominee or
agent for any other person and not with a view to, or for offer or sale in
connection with, any distribution thereof.


        SECTION 6. INDEMNIFICATION.


        6.1 Seller shall indemnify and hold harmless Purchaser, and its
respective heirs, agents, assigns, affiliates, successors and personal
representatives, from and against any and all damages, losses, obligations,
claims, actions or causes of action, encumbrances, costs, expenses (including
reasonable attorneys' fees incurred by Purchaser in any action or proceeding
between Seller and Purchaser) or other liabilities of any kind or nature
(collectively, "Damages") arising from the breach by Seller of any
representation, warranty or agreement made by Seller hereunder.


        6.2 Purchaser shall indemnify and hold harmless Seller, its officers,
directors, stockholders, affiliates and their respective heirs, agents, assigns,
affiliates, successors and personal representatives from and against any and all
Damages arising from the breach by Purchaser of any representation, warranty or
agreement made by Purchaser hereunder.


        6.3 The indemnification provisions set forth herein shall be the
exclusive remedy any party may have with respect to any and all Damages arising
out of the transactions contemplated by this Agreement.


        SECTION 7. ADDITIONAL TERMS.


        7.1 The representations, warranties, and agreements of Purchaser and
Seller contained herein shall survive the Effective Date without limit.


        7.2 Neither party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the other party; PROVIDED,
HOWEVER, that any

                                      351
<PAGE>

party may make any public disclosure it believes in good faith, and upon the
advice of counsel, is required by applicable law (in which case the disclosing
party will advise the other party prior to making the disclosure and the wording
of such disclosure shall be mutually agreed to by the parties).


        7.3. Each of Seller and Purchaser will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.


        7.4 This Agreement (a) together with the Sale and Purchase Agreement and
the other agreements contemplated thereby, incorporates the entire understanding
and agreement of the parties and supersedes all previous agreements and/or
discussions between Purchaser and Seller solely with respect to the subject
matter hereof; (b) may not be amended or modified except in a writing executed
by Purchaser and Seller; and (c) shall be governed by, construed and enforced in
accordance with the laws of the State of New York, without giving effect to such
State's conflict of laws principles.


        7.5 In any action or proceeding arising out of, related to, or in
connection with this Agreement, the parties consent to be subject to the
jurisdiction and venue of (a) the courts of the State of New York, and (b) the
United States District Court for the Southern District of New York. Each of the
parties consents to the service of process in any action commenced hereunder by
certified or registered mail, return receipt requested, or by any other method
or service acceptable under federal law or the laws of the State of New York.


        7.6 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document.


        7.7 This Agreement shall be binding upon and shall inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.


                                      352
<PAGE>

        IN WITNESS WHEREOF, the parties hereto intending to be legally bound
hereby, have duly executed this Agreement as of the date first-above written.



                                     SELLER:



                                                TRADER TRC INC.







                                                By: _________________________

                                                Name:

                                                Title:





PURCHASER:



NIGHT-SYSTEMS LTD.





By: _________________________

Name:

Title:



                                      353
<PAGE>

                                   SCHEDULE 16

                       FRENCH BUSINESS TRANSFER AGREEMENT





SUMMARY OF FRENCH BUSINESS TRANSFER AGREEMENT

Agreement between:

Thales Contact Solutions SA(Seller)
             and
NICE Systems SARL(Buyer)


The agreement covers the transfer by Seller to Buyer of all of the assets
relating to the voice recording business of Seller in France including
customers, material,equipment ,contracts, etc. Buyer undertakes all of the
employment agreements with the Seller employees, the sub lease for Seller's
premises and receivables and payables relating to the transferred assets. The
agreement includes standard representations by TCS for the period commencing
April 2001, prior to which they did not own the business.
The agreement is subject to French Law.



                                      354
<PAGE>





                                   (NOT USED)





                                      355
<PAGE>



                                   SCHEDULE 17

                       GERMAN BUSINESS TRANSFER AGREEMENT



                                      356
<PAGE>

                            ASSET PURCHASE AGREEMENT
                            ------------------------

                  (hereinafter referred to as the "Agreement")




                                     Between



                          Trader Contact Solutions GmbH

                       Technologie Park Bergisch Gladbach

                             Friedrich-Ebert-Strasse

                             51429 Bergisch Gladbach

                        AG Bergisch Gladbach HRB No. 5492

                    (hereinafter referred to as the "Seller")



  duly represented by its managing director Clifford Francis Tomaszewski, with
                    power to represent the Seller on his own



                                       and



                               [German Purchaser]



                  (hereinafter referred to as the "Purchaser")

  duly represented by its managing director [________], with power to represent
                            the Purchaser on his own.


The managing director of the Seller is authorised to effect the transaction
contemplated in this Agreement by means of a shareholder resolution dated [___],
a certified copy of which is attached to Schedule [____] of the Sale and
Purchase Agreement.




                                    SECTION 1

                                     PARTIES

1.      The Seller is a limited liability company, incorporated under the laws
        of the Federal Republic of Germany, registered in the Commercial
        Register of Bergisch Gladbach under company registration number HRB
        5429.

                                      357
<PAGE>

2.      The Purchaser is registered at [ ].



                                    SECTION 2

           GENERAL DESCRIPTION OF THE SUBJECT MATTER OF THIS AGREEMENT


1.      The Seller intends to sell and to transfer its entire business as a
        going concern pursuant to the provisions of this Agreement to the
        Purchaser. For the purposes of the Agreement, the business shall mean
        the complete operations of the Seller, namely the business of the
        design, development, production, marketing and supply of various secure
        voice recording, surveillance and replay systems and products and
        application software for business performance management solutions in
        contact centres, public safety and wholesale trading platforms and the
        provision of ancillary services carried on by the Seller as at
        Completion Date (hereafter "the Business").


2.      The Seller and the Purchaser refer to the Sale and Purchase Agreement
        dated [___] between [TRADER SA and NIGHT] to which this Agreement has
        been attached. Unless specifically addressed in this Agreement, any
        provisions of the Sale and Purchase Agreement shall apply (with the
        necessary changes having been made) to the sale of the Business
        hereunder. The Sale and Purchase Agreement is - for this purpose -
        incorporated into this Agreement. 3. The effectiveness of this Agreement
        and the stipulations herein shall be subject to the Conditions as
        stipulated in the Sale and Purchase Agreement, in particular as outlined
        in clause 2 of the Sale and Purchase Agreement. Terms with capital
        letters shall, unless specified expressively herein, have the meaning as
        defined in the Sale and Purchase Agreement.


                                    SECTION 3

                                      SALE


1.      The Seller hereby sells as of the Completion Date and under the terms
        and conditions of the Sale and Purchase Agreement (and therefore under
        English law) to the Purchaser the Business as a going concern, in
        particular:


(1)     the Machinery and Equipment, in particular, but not exclusively, as
        listed in EXHIBIT [____];


(2)     the Fixtures and Fittings in particular, but not exclusively, as listed
        in EXHIBIT [____];

                                      358
<PAGE>

(3)     the Inventory in particular, but not exclusively, as listed in EXHIBIT
        [____];


(4)     the Goodwill and any other intangible assets in particular, but not
        exclusively, as listed in EXHIBIT [____];


(5)     the benefit of the Contracts in particular, but not exclusively, as
        listed in EXHIBIT [____];


(6)     all of the rights against third parties (including, without limitation,
        all rights in connection with such third party guarantees, warranties,
        indemnities, restrictive covenants, confidentiality obligations and
        representations and all rights of action of whatever kind whether or not
        any proceedings have been commenced) with respect to the Business in
        particular, but not exclusively, as listed in EXHIBIT [____];


(7)     the Business IPR in particular, but not exclusively, as listed in
        EXHIBIT [____];


(8)     the Accounts Receivable in particular, but not exclusively, as listed in
        EXHIBIT [____];


(9)     the Business Information in particular, but not exclusively, as listed
        in EXHIBIT [____];


(10)    the Records in particular, but not exclusively, as listed in EXHIBIT
        [____];

(11)    all other property rights and all other assets of whatsoever nature of
        any member of the Trader Group used exclusively in relation to the
        Business;


(12)    All exhibits referred to in this section reflect the status of the
        contents of the respective exhibits as of the date on each of the
        respective exhibits. Seller and Purchaser agree to update these exhibits
        as of the Signing and Completion Date mutually.


2.      The Purchaser accepts this sale.


3.      Excluded Assets shall not be sold.


                                      359
<PAGE>

                                    SECTION 4

                             TRANSFER OF THE ASSETS


1.      The Seller hereby transfers, and assigns title and possession of all
        assets enumerated specifically in section 3 (1) to (11) with effect as
        of the Completion Date. The parties shall transfer possession by means
        of a joint inspection on the Completion Date.


        The Purchaser accepts this transfer of title in the assets.


2.      If individual assets among the assets which are sold are not in the
        possession of the Seller as of today or the Completion Date the Seller
        herewith assigns as of the Completion Date its right to regain
        possession against whomever has possession at such time, either directly
        or indirectly, to the Purchaser instead of delivering such assets at the
        Closing. The Purchaser accepts such assignment.


3.      Should any of the above-mentioned assets have been delivered by a vendor
        to the Seller with reservation of ownership until the full purchase
        price has been paid, the Seller herewith assigns as of the Completion
        Date all rights to obtain full title to the Purchaser. The Purchaser
        accepts the assignment.


4.      The Parties agree that with transfer of the assets, all rights that
        relate to these assets and may be claimed and enforced against third
        parties will be passed on to the Purchaser as well.


5.      The Seller shall not assume any Excluded Liabilities under any of the
        foregoing provisions.





                                    SECTION 5

          TRANSFER OF AGREEMENTS, CONTRACTS AND RIGHTS AND LIABILITIES



1.      Any and all Contracts (and claims or rights resulting therefrom) in
        particular as listed in EXHIBIT [___], any other rights and/or claims
        even if they are not based on Contracts and Assumed Liabilities, in
        particular as listed in EXHIBIT [___], but not any Excluded Liabilities
        in particular as listed in EXHIBIT [___] are herewith assigned as of the
        Completion Date to the Purchaser. Purchaser accepts such

                                      360
<PAGE>

        assignment. Contrary to section 5(1) sentence 1 and section 8 (6) of
        this Agreement the agreements, contracts and/ or liabilities relating to
        the Business listed in EXHIBIT [___] shall not be assigned or
        transferred to the Purchaser.


2.      The Purchaser assumes - in its legal relation to the Seller - by way of
        assignment herewith with effect as of the Completion Date - any
        liabilities arising from these agreements with the consequence that the
        Seller is released from these obligations. Purchaser accepts such
        assignment.


3.      The Seller has already obtained the written consents from some
        contractual parties to the transfers of contracts. The respective
        consent notices are attached as EXHIBIT [____].]


4.      The Seller assigns and transfers as of the Completion Date to the
        Purchaser all rights, in particular as emanating from the services
        offered by the Seller to third parties still valid at the date of the
        Closing, in particular as listed in EXHIBIT [____]. The Seller accepts
        such assignment and transfer and also assumes with effect as of the
        Closing date any and all obligations which arose from these offers, with
        the effect of discharging the Seller from its obligations.


        The Seller assigns and transfers as of the Completion Date to the
        Purchaser all of the rights against third parties (including, without
        limitation, all rights in connection with such third party guarantees,
        warranties, indemnities, restrictive covenants, confidentiality
        obligations and representations and all rights of action of whatever
        kind whether or not any proceedings have been commenced) with respect to
        the Business in particular, but not exclusively, as listed in EXHIBIT
        [____]. Purchaser accepts such assignment.


5.      The Seller shall not assume any Excluded Liabilities under any of the
        foregoing provisions.


                                    SECTION 6

                                    EMPLOYEES


1.      The Purchaser assumes and honors the employment contracts of all active
        and non retired employees as of the Completion Date, the names of which
        are listed in EXHIBIT [___] to the extent as provided for by German law.


                                      361
<PAGE>

        The employees have been informed about the transaction by the Purchaser
        and the Seller by means of a letter substantially in the form as
        attached as Schedule [___].


                                    SECTION 7

                                 PURCHASE PRICE



        The purchase price for the Business shall be the amount determined in
        accordance with the Sale and Purchase Agreement (in particular, but not
        limited to clauses 7 and 8).


                                    SECTION 8

                                  MISCELLANEOUS



1.      Amendments and additions to this Agreement must be in writing. Written
        form can be waived only in writing.


2.      The Parties to this Agreement commit themselves to treat its content
        confidentially.


3.      The English Language version of this Agreement shall be the governing
        version for purposes of effectiveness, interpretation and construction
        of its terms. even if a German convenience translation may be rendered.


4.      This Agreement has been entered into to effect the valid sale of assets
        under English law (agreement to sell and transfer title in section 3
        hereafter) and transfer of title in assets under German law (section 4
        and 5 hereafter), such transfer to occur as provided for by clauses
        5.4.3 and 5.5. of the Sale and Purchase Agreement.


        The applicable law for clauses 4, 5 and 6 only of this Agreement are the
        laws of the Federal Republic of Germany. The UN Convention on the Sale
        of Goods shall be excluded. For any other provisions of this Agreement,
        the Laws of England shall govern. This choice of law provision shall be
        governed and construed in accordance with English law.

                                      362
<PAGE>

        The parties agree that any rights, obligations or remedies as regards
        the sale of the Business as contemplated in this Agreement and the Sale
        and Purchase Agreement shall only be exercised and can only be based on
        the rights, remedies and obligations as created by the Sale and Purchase
        Agreement.


5.      The English courts shall have non-exclusive jurisdiction.

6.      The parties to this Agreement acknowledge and agree that in case of a
        conflict between this Agreement and the Sale and Purchase Agreement the
        Sale and Purchase Agreement shall prevail.


7.      Should one or several provisions of this Agreement be null and void,
        display gaps or become unenforceable, the validity of this Agreement as
        such shall not be in question. Rather, this Agreement is to be
        interpreted and construed under such circumstances in a manner which
        allows for the preservation of the content and intent of the Parties as
        much and as widely as possible. The Parties herewith obligate one
        another to replace any invalid or unenforceable provision with a valid
        and enforceable one so that the economic meaning of the provision that
        is to be replaced is preserved as much as possible.






                             Datum/Date [..........]











                              ---------------------

                          Trader Contact Solutions GmbH



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                         ------------------------------

                               [German Purchaser]






Exhibit 3(1):              Machinery and Equipment.


Exhibit 3(2):              Fixtures and Fittings.


Exhibit 3(3):              Inventory.


Exhibit 3(4):              Goodwill and Intangible Assets.


Exhibit 3(5):              Benefit of Contracts.


Exhibit                    3(6): All rights against third parties
                           (including, without limitation, all rights in
                           connection with such third party guarantees,
                           warranties, indemnities, restrictive covenants,
                           confidentiality obligations and representations
                           and all rights of action of whatever kind
                           whether or not any proceedings have been
                           commenced) with respect to the Business. [To the
                           extent not covered under Exhibit 3(5)].


Exhibit 3(7):              Business IPR.


Exhibit 3(8):              Accounts Receivable.


Exhibit 3(9):              Business Information.


Exhibit 3(10):             The Records.


Exhibit                    3(11): All other property rights and all other
                           assets of whatsoever nature of any member of the
                           Trader Group used exclusively in relation to the
                           Business.

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<PAGE>

Exhibit 5(1):              Contracts.


Exhibit 5(1)(2):           Rights and/or Claims not based on Contracts or
                           Assumed Liabilities.


Exhibit 5(1)(3):           Excluded Liabilities.


Exhibit 5(1)(4)            Excluded agreements, contracts and liabilities.


Exhibit 5(3):              Consent notices.


Exhibit                    5(4): Rights arising from Services offered by
                           Seller to third parties still valid at
                           Closing.[To the extent not covered under Exhibit
                           5(1)].


Exhibit                    5(4)(2): All rights against third parties
                           (including, without limitation, all rights in
                           connection with such third party guarantees,
                           warranties, indemnities, restrictive covenants,
                           confidentiality obligations and representations
                           and all rights of action of whatever kind
                           whether or not any proceedings have been
                           commenced) with respect to the Business. [To the
                           extent not covered under Exhibit 5(1)].



Exhibit 6(1):              Employment contracts of all active and non-retired
                           employees as of the Completion\ Date.



Exhibit 6(1)(2):           Agreed form of Letter of Information to Employees.


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                                   SCHEDULE 18

                                    EMPLOYEES







                                      366
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                                   SCHEDULE 19



                               RELEVANT EMPLOYEES







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                                   SCHEDULE 20

                                  KEY EMPLOYEES









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                                   SCHEDULE 21

                                     PART A

                            2002 SALES DETERMINATION



1       PRINCIPLES FOR PREPARATION OF THE 2002 SALES STATEMENT


        The 2002 Sales Statement shall be prepared on the basis of US GAAP and
        subject to US GAAP, as adopted in the preparation of Nice's financial
        statements.


2       PREPARATION OF THE 2002 SALES STATEMENT


2.1     Nice shall procure that the Purchasers' management shall, as promptly as
        practicable, and in any event within 60 (sixty) days of 31 December 2002
        ("the First Period"), prepare and deliver to Thales and to Nice a draft
        of the 2002 Sales Statement together with a draft certificate (the
        "Nice's Accountant's Certificate") in the form set out in Part B of this
        Schedule 21 addressed to Thales and to Nice stating that the 2002 Sales
        Statement has been prepared in accordance with this Agreement.


2.2     Thales and Nice shall attempt to agree the draft 2002 Sales Statement as
        soon as possible and in any event within 30 (thirty) days (the "Second
        Period") after receipt of the same under paragraph 2.


2.3     During the Second Period, Thales' Accountants shall be entitled to call
        for an inspection of such documents as they shall reasonably consider
        necessary. Nice shall procure that the Companies, the Purchasers and
        Nice's Accountants respectively shall give each other and to Thales'
        Accountants access to all of their records, working papers or other
        information used as a basis for preparing the 2002 Sales Statement and
        access to personnel as may reasonably be required for the purposes of
        considering and agreeing the 2002 Sales Statement.


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<PAGE>


2.4     Unless within the Second Period Thales notifies Nice in writing (setting
        out the adjustments, if any, which it proposes should be made to the
        draft 2002 Sales Statement the draft 2002 Sales Statement shall be
        deemed to be agreed and shall, save in the event of fraud or manifest
        error, become final and binding on Thales and Nice for the purposes of
        this Agreement.


2.5     If by the end of the Second Period the draft 2002 Sales Statement has
        not been agreed, Thales shall meet with Nice so as to resolve in good
        faith any differences within the following 7 (seven) days (the "7 Day
        Period"). After the expiry of the 7 Day Period either Nice or Thales may
        refer the matters in dispute to the Independent Accountants. The
        Independent Accountants shall agree, amend or prepare the 2002 Sales
        Statement and determine the 2002 Sales but always in accordance with the
        principles set out in paragraph 1 of this Schedule insofar as not
        otherwise agreed in accordance with the provisions of this Schedule 21.
        The Independent Accountants shall be entitled to call for and inspect
        such documents as they shall reasonably consider necessary. The
        determination prepared by the Independent Accountants shall be delivered
        to Thales and Nice within 30 days of such submission to the Independent
        Accountants and shall (save in respect of manifest error) be final and
        binding on Thales and Nice for the purposes of this Agreement and the
        Independent Accountants shall act as experts and not as arbitrators. In
        acting under this clause 2.5 the Independent Accountants shall be
        entitled to the privileges and immunities of arbitrators. Thales and
        Nice shall act in good faith towards each other regarding such
        application and in particular shall endeavour with reasonable expedition
        to settle the terms of reference of the Independent Accountants.


2.6     Thales shall pay the charges of Thales' Accountants and Nice shall pay
        the charges of Nice's Accountants in respect of work carried out
        pursuant to the provisions of this Schedule and the charges of the
        Independent Accountants (if appointed) shall be apportioned between
        Thales and Nice in such proportions as the Independent Accountants may
        determine in the light of the merits of the objections taken by (or on
        behalf of) Thales to the 2002 Sales Statement in the form despatched
        pursuant to paragraph 2.2.

                                      370
<PAGE>


2.7     Thales and Nice shall respectively procure, so far as they are able,
        that the Companies, the Purchasers, Nice's Accountants and Thales'
        Accountants respectively shall give each other and to the Independent
        Accountants access to all of their working papers or other information
        used as a basis for preparing the 2002 Sales Statement and access to
        personnel as may reasonably be required for the purposes of considering
        and agreeing the 2002 Sales Statement.


2.8     Upon the 2002 Sales Statement having become final and binding pursuant
        to this Schedule (save in respect of fraud or manifest error), Nice
        shall procure that the Nice's Accountant's Certificate is finalised and
        signed and no right of appeal shall be competent with regard thereto,
        and neither Thales nor Nice nor the Independent Accountants shall be
        entitled to appeal or state a case either on a point of law or fact with
        regard thereto, to any court.


                                      371
<PAGE>

3       Sales Earn Out Amount

        The Sales Earn Out Amount shall be calculated by reference to the table
        set out below such that for every Euro by which the 2002 Sales exceeds
        Euro 84,000,000, up to and including the sum of Euro 88,000,000, Thales
        shall be entitled to a Dollar by way of the Sales Earn Out and if the
        2002 Sales are Euro 88,000,001 or above then Thales shall be entitled to
        a further $1,000,000 save that the Sales Earn Out Amount shall in no
        event exceed $5,000,000:




        Earn Out       Euro Sales Range                       Sales Earn Out

                       From                    To             Amount

                       84,000,000 or below                                 $0

            1          84,000,001              85,000,000          $1,000,000

            2          85,000,001,             86,000,000          $2,000,000

            3          86,000,001              87,000,000          $3,000,000

            4          87,000,001              88,000,000          $4,000,000

            5          88,000,001 and above                        $5,000,000




                                      372
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                                     PART B

                         NICE'S ACCOUNTANT'S CERTIFICATE


                (to be prepared on the notepaper of the Auditors)

To:    Thales

       Nice

Date

Reference

Gentleman

The Company

We refer to the Sale and Purchase Agreement ("the Agreement") made between
Thales and Nice on _________________________ 2002 for the sale of the Business
and the Assets as therein defined. Words and expressions defined for the purpose
of the Agreement have the same meanings in this letter.

In accordance with Clause 7.3 and Schedule 21 of the Agreement we attach,
initialled for identification, draft 2002 Sales Statement. The statement shows
2002 Sales of Euro [ ] and therefore in accordance with the Agreement and by
reference to the table set out in Schedule 21 the amount payable by [ ] to [ ]
is Dollars [ ].

In our opinion the 2002 Sales Statement has been prepared in all material
respects in accordance with Schedule 21 of the Agreement.

Yours faithfully



Nice's Accountants

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                                   SCHEDULE 22

                                SURPLUS EMPLOYEES




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