SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (the "Agreement"), entered into as of
25 June 1997, by and among:
1. V.M.H. N.V., a company organized and existing under the laws of
Belgium, having its registered office at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇▇;
2. V.R.C. N.V., a company organized and existing under the laws of
Belgium, having its registered office at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇;
3. Ets. ▇▇▇▇▇▇ Dambois S.A., a company organized and existing under the
laws of Belgium, having its registered office at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇ ▇▇▇▇;
4. Transport International Nieuwenhuyse N.V., a company organized and
existing under the laws of Belgium, having its registered office at
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇;
5. ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇;
6. ▇▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇;
7. ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, Chemin des Ablens 2, 7900 Grandmetz;
hereinafter individually referred to as a "Seller" and collectively
as "Sellers", each acting in their capacity of shareholder of RADIO-
ACTIVE SYSTEMS, a corporation organized and existing under the laws of
Belgium, whose registered office is situated at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, registered with the Registrar of Commerce of Kortrijk under n*
91241 (hereinafter the "Company"),
AND
Detection Systems, Inc., a corporation organized and existing under
the laws of the State of New York, having its registered office at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America,
hereinafter referred to as "Buyer".
Sellers and Buyer are referred to herein from time to time
individually as a "Party" or collectively as the "Parties".
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WHEREAS, Sellers collectively own 2,557 or 78.7% of the 3,250 registered
shares issued by and representing the share capital of the Company;
WHEREAS, pursuant to that certain letter of intent dated May 20, 1997
(the "Letter of Intent"), Sellers desire to sell and Buyer desires to
purchase said 2,557 shares, upon the terms and subject to the conditions
hereinafter set forth;
WHEREAS, in connection with the Letter of Intent, Sellers and Buyer have
executed that certain escrow agreement dated May 21, 1997 (the "Escrow
Agreement"), pursuant to which Buyer has transferred an amount of USD
280,000 to an account opened by it with Generale Bank, branch office
▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Escrow Funds");
WHEREAS, Parties have agreed that they will not instruct the Generale
Bank, branch office ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, to distribute the Escrow
Funds together with interest earned on the deposit to Sellers, as
provided in the Escrow Agreement, but they shall, on the contrary,
instruct the Generale Bank to refund the Escrow Funds to Buyer; Buyer
however shall pay Sellers, at the date of execution of this Agreement,
the full amount of the purchase price for the 2,557 shares of the Company
Sellers desire to sell and Buyer desires to purchase;
WHEREAS, the official receivers of Gemel Italy S.P.A, ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, have confirmed the Company in writing
that the trade receivable that the Company has on Gemel Italy S.P.A. may
be set off against outstanding debt claims of Gemel Italy S.P.A. on the
Company and that the remaining balance due by the Company to Gemel Italy
S.P.A. shall be cancelled by Gemel Italy S.P.A. in their books; the
letter at issue of Gemel Italy S.P.A. is attached to this Agreement as
Schedule 1;
WHEREAS, the outstanding balance of said receivable on Gemel Italy S.P.A.
was discounted for BEF 1,555,386 in the Company's audited accounts
relating to the financial year ended December 31, 1996;
WHEREAS, Parties therefor have agreed to raise the price, mentioned in
article 5 of the Letter of Intent, for the 2,557 shares of the Company
Sellers desire to sell and Buyer desires to purchase, by the amount of
the trade receivable that the Company had on Gemel Italy S.P.A., being
BEF 1,555,386 and that, as such, the purchase price for the mentioned
2,557
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shares is BEF 99,897,819; it being expressly understood, however,
that in the event and at the time that it would appear that the above-
referenced set-off is legally unenforceable, Parties shall consult with
each other so as to reach an equitable solution for a downward adjustment
of said purchase price; provided, however, that said downward adjustment
shall in no event exceed BEF 1,555,386;
WHEREAS, Buyer has performed a due diligence of the business and the
assets of the Company, which included the examination of the consistent
application of the Company's valuation rules and the conformity of the
Belgian statements with the Belgian accounting law as reflected in the
audited accounts for 1996 which were prepared by Hermant Dodmont &
C* and are attached to this Agreement as Schedule 2, as well as all items
set forth in Schedule 3.
WHEREAS, Buyer has entertained a commercial relationship with the Company
over the past years as one of its main suppliers and, as such, has a
reasonable knowledge of the Company's business.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties and
covenants herein contained, the Parties agree as follows:
ARTICLE 1 - PURCHASE AND SALE OF SHARES
Upon the terms and subject to the conditions of this Agreement,
Sellers shall sell to Buyer, and Buyer shall purchase from Sellers, 2,557
registered shares representing 78.7% of the corporate capital of the
Company (the "Shares") for an aggregate purchase price (the "Purchase
Price") of BEF 99,897,819 and, at the date of execution of this
Agreement:
- Buyer shall pay to Sellers the full amount of the Purchase
Price by means of a certified check. This payment shall not entail any
costs or expenses for Sellers. The Purchase Price has been established as
set forth in article 5 of the Letter of Intent, but has been increased by
the amount of the trade receivable which the Company had on Gemel Italy
S.P.A., ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, and which
was discounted in the Company's audited accounts relating to the
financial year ended December 31, 1996.
- Immediately after having received the full Purchase Price, each
Seller shall sell, assign, transfer and deliver to
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Buyer, the number of Shares set forth beside such Seller's name
on Schedule 4 hereto, and deliver all certificate(s),
instruments and documents required to be delivered by such
Seller to validly effectuate the transfer of such Shares;
specifically, each Seller shall at that moment cause the
Company's shares register to be duly amended so as to validly
reflect the transfer of such Shares to Buyer.
ARTICLE 2 - ADJUSTMENT OF THE PURCHASE PRICE
In the event and at the time that the Company would be obliged to
reinstate the discount recorded in the Company's annual accounts relating
to the financial year ended December 31, 1996 in respect of the trade
receivable which the Company had on Gemel Italy S.P.A., ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, the Parties shall consult with
each other so as to reach an equitable solution for a downward price
adjustment and a partial reimbursement by Sellers of the Purchase Price
set forth in Article 1 hereof; it being expressly understood, however,
that the amount of said downward adjustment and partial reimbursement by
Sellers of the Purchase Price shall in no event exceed BEF 1,555,386.
ARTICLE 3 - REIMBURSEMENT OF ESCROW FUNDS
At the date of execution of this Agreement, Sellers and Buyers shall
execute an amendment to the Escrow Agreement, approved and signed by the
Generale Bank, branch office ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, instructing the
Generale Bank to distribute the Escrow Funds together with interest
earned on the deposit since May 21, 1997 to Buyer (the "Amendment"). The
Amendment is attached to this Agreement as Schedule 5.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyer that the following are
true, correct and complete as of the date of this Agreement:
4.1 ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Belgium and has
the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
4.2 AUTHORITY. Each Seller has all requisite authority to enter
into, execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly
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executed and delivered by each Seller and constitutes the valid
and binding obligation of each Seller enforceable against it in
accordance with its terms. Each Seller is entitled to sell and
procure the transfer of the full legal and beneficial ownership
in its/his Shares of the Company to Buyer, free and clear of
all encumbrances and third party's rights in accordance with
the terms of this Agreement.
4.3 NO VIOLATION OR CONFLICT. Neither the execution and delivery of
this Agreement by Sellers, nor the consummation by Sellers of the
transactions contemplated hereby or compliance by Sellers with the
provisions hereof will conflict with, or result in any violation of, or
default under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a benefit under, or
result in the creation of any security interest upon any of the
properties or assets of the Company under, any provision of the articles
of incorporation or by-laws or the comparable charter or organization
documents of the ▇▇▇▇▇▇▇.▇▇ filing or registration with, or
authorization, permit, waiver, consent or approval of, any governmental
entity or authority, including courts of competent jurisdiction, domestic
or foreign (a "Governmental Entity") is, under Belgian law, required to
be obtained or made for the execution, delivery and performance by
Sellers of this Agreement. The approval of the board of directors of the
Company, required pursuant to article 8 of the articles of incorporation
("statuten") of the Company, in case of transfer of shares of the
Company, has been obtained.
4.4 SHARES. The stated capital of the Company consists of 3,250
shares, issued in registered form, each with a nominal value of BEF
1,000, representing a total capital of BEF 3,250,000. All Shares are
validly authorized and issued, are fully paid-in and all such Shares are
free and clear of any encumbrances, liens, pledges, charges, rights of
first refusal, or security rights. However, pursuant to article 8 of the
articles of incorporation ("statuten") of the Company, the approval of
the board of directors of the Company is required in case of a transfer
of shares of the Company. Sellers have not approved any security, option,
warrant, right, call, subscription, agreement, commitment, fixed or
contingent, that directly or indirectly (i) calls for the issuance, sale,
pledge or other disposition of any shares of capital stock of the Company
or any securities convertible into, or other rights to acquire, any
shares of capital stock of the Company, (ii) obligates the Company to
grant, offer or enter into any of the foregoing or (iii) relates to the
voting or control of such capital stock, securities or rights.
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4.5 FINANCIAL SCHEDULES. Attached hereto as Schedule 2 are the
audited balance sheet (including the accompanying notes) and related
audited income statement as of and for the financial year ended December
31, 1996 for the Company (the "Financial Schedules"). The accounts
included in the Financial Schedules present fairly and in all material
respects the financial condition of the Company as of such date and the
results of operations of the Company for such period.
4.6 EVENTS SUBSEQUENT TO DECEMBER 31, 1996. (i) To the best
knowledge of Sellers, there has, since December 31, 1996, not been any
event, change or circumstance having, either individually or in the
aggregate, an effect which has, at the date of execution of this
Agreement, appeared to be materially adverse to the business, financial
condition, operation or results of operations of the Company ("Material
Adverse Effect"), or (ii) so far as Sellers know or may reasonably be
expected to know, there has not been, since December 31, 1996, any
material transaction except in the ordinary course of business relating
to the assets or the business of the Company.
4.7 TAX MATTERS. The Company has filed all tax returns and tax
reports that it was required to file. All such tax returns and tax
reports were correct and complete in all material respects. To the best
knowledge of Sellers, there are no unpaid corporate taxes of the Company,
except for corporate taxes the payment of which is not yet due, and there
are no security interests on any of the assets of the Company that arose
in connection with any failure (or alleged failure) to pay any corporate
taxes due by the Company.
4.8 LITIGATION. Except as set forth in Section A of the Disclosure
Letter attached to this Agreement as Schedule 6, there are no claims,
actions, suits, inquiries, investigations, or proceedings pending,
involving the Company.
4.9 EMPLOYEES. Except as set forth in Section B of the Disclosure
Letter attached to this Agreement as Schedule 6, the Company is not a
party or bound by any collective bargaining agreement, nor has it
experienced any strikes, grievances, claims of unfair labor practices
(i.e. practices not commonly imposed or applied by a reasonable
employer), or other collective bargaining disputes within the last five
(5) years and none is pending, or to the knowledge of Sellers,
threatened.
4.10 GENERAL. Each of the representations and warranties
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set forth in this Article 4 and the Disclosure Letter thereto
is true and accurate. Buyer has relied on the representations
and warranties of Sellers explicitly set forth in this Article
4 and on the Disclosure Letter thereto.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Seller that the following are
true, correct and complete as of the date of this Agreement:
5.1 ORGANIZATION, STANDING AND POWER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of New York and has the requisite corporate power and authority to
carry on its business as now being conducted.
5.2 AUTHORIZATION. Buyer has all requisite power and authority to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement and the performance of its
obligations hereunder have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the valid and binding
obligation of Buyer, enforceable against it in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting
the rights of creditors generally. However, as of the execution of this
Agreement, no bankruptcy, insolvency, reorganization or any other event
implying the applicability of a law affecting the rights of creditors of
Buyer is, as far as reasonably can be foreseen at this time, pending or
threatening.
5.3 NO VIOLATION - CONSENTS. Neither the execution and delivery by
Buyer of this Agreement, nor the consummation by Buyer of the
transactions contemplated hereby or compliance by Buyer with the
provisions hereof will conflict, or result in any violation of, or
default under, or give rise to a right of termination or cancellation of
this Agreement under, the articles of incorporation or by-laws or any
other charter or organization document of Buyer. No filing or
registration with, or authorization, permit, waiver, consent or approval
of, any Governmental Entity is required to be obtained or made by Buyer
in connection with the execution, delivery and performance by Buyer of
this Agreement.
5.4 DUE DILIGENCE. Buyer has performed a due diligence of the
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business and the assets of the Company. This due diligence included the
examination of the consistent application of the Company's valuation
rules and the accordance of the Belgian statements to the Belgian
accounting law as reflected in the audited accounts for 1996 which were
prepared by Hermant Dodmont & C* and are attached to this Agreement
as Schedule 2, as well as all items set forth in Schedule 3. During this
due diligence, Buyer has been assisted by the law firm Van Bael & ▇▇▇▇▇▇
and the audit company Price Waterhouse.
5.5 KNOWLEDGE OF THE COMPANY'S BUSINESS. Buyer has entertained a
commercial relationship with the Company over the past years as one of
its main suppliers and, as such, has a reasonable knowledge of the
Company's business.
5.6 DAY-TO-DAY MANAGEMENT. Buyer acknowledges that the day-to-day
management of the Company has been performed by N.V. (formerly B.V.B.A.)
SDM, a company organized and existing under the laws of Belgium, having
its registered office at ▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, registered with
the Registrar of Commerce of Kortrijk under n* 109020 and managed by ▇▇.
▇. ▇▇▇▇▇ ("SDM"), according to a co-operation agreement ("Samenwerkings-
overeenkomst") entered into between SDM and the Company on January 21,
1991. A copy of the Samenwerkingsovereenkomst is attached to this
Agreement as Schedule 7.
ARTICLE 6 - RESIGNATION OF MEMBERS OF BOARD OF DIRECTORS
Immediately following the execution of this Agreement, Sellers shall
cause their members of the Board of Directors of the Company to resign in
order to be replaced as of the date of execution of this Agreement by the
representatives of Buyer. Buyer procures that, at the first annual
general meeting of shareholders of the Company following the execution of
this Agreement, a valid discharge of liability ("kwijting") within the
meaning of article 79 of the Belgian Company Law will be granted, with
respect to the period from 1 January 1997 until the date of execution of
this Agreement, to all individuals who, at any time between 1 January
1997 and the date of execution of this Agreement, have been members of
the Board of Directors of the Company.
ARTICLE 7 - SURVIVAL AND INDEMNIFICATION
7.1 INDEMNITY PERIOD. The right on indemnification for
breach of a representation, warranty, covenant or agreement
contained in this Agreement, or in the Disclosure Letter or any
Schedule, shall only exist until 31 December 1999. After this
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date, no claim may be brought by a Party against another Party
with respect to this Agreement.
7.2 JOINT AND SEVERAL LIABILITY OF SELLERS WHICH ARE LEGAL
ENTITIES. Subject to the other provisions of this Article, the Sellers
which are legal entities are jointly and severally liable for any and all
breaches of the representations and warranties set forth in Article 4.
Each Seller which is a natural person, however, can only be held liable
for any and all breaches of the representations and warranties set forth
in Article 4, pro rata the number of shares set forth beside such
Seller's name on Schedule 4 hereto.
7.3 LIMITATION ON INDEMNIFICATION AMOUNTS. Subject to Article 7.2
hereof, the aggregate obligations and aggregate liabilities of all
Sellers for any and all breaches of:
(i) the representations and warranties set forth in Articles 4.1,
4.2 and 4.4 hereof shall in any case be limited to 35% of the Purchase
Price, as determined in Article 1 hereof, it being understood that the
obligations and liabilities of each individual Seller for such breaches
is in any event limited to 35% of the part of the Purchase Price
mentioned beside such Seller's name on Schedule 4;
(ii) the other representations and warranties, and any and all
failures to perform any covenant made by or on behalf of Sellers, under
this Agreement, the Disclosure Letter and any Schedules hereto, and any
and all other failures under this Agreement, the Disclosure Letter or any
Schedule hereto, shall in any case be limited to BEF 10,000,000.
7.4 INDEMNIFICATION. Subject to the other provisions of this
Article, and therefor without prejudice to the Articles 7.1, 7.2 and 7.3
of this Agreement, from the date of execution of this Agreement:
(i) Sellers shall only indemnify and hold harmless Buyer or its
successors (the "Representatives"), as the case may be, from and against
any losses, damages or expenses (with the exception of attorney's fees),
judgments, fines (collectively, "Damages") Buyer or its Representatives
have suffered, to the extent the Damages arise out any breach of any
representation or warranty or failure to perform any covenant
made by or on behalf of Sellers, under this Agreement or in the
Disclosure Letter or any Schedule hereto, and any and all failures
under this Agreement, the Disclosure Letter or any Schedule hereto.
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However, Sellers shall only indemnify and hold harmless Buyer
or its Representatives from and against Damages which exceed
BEF 1,000,000 for each breach of representation or warranty or
failure to perform any covenant or any other failure under
this Agreement, the Disclosure Letter or any Schedule hereto. Buyer or
its Representatives, as the case may be, shall notify Sellers within a
period of one month from the earlier of (i) the occurrence or (ii)
discovery of such breach of representations and warranties or failure to
perform a covenant or failure under this Agreement, the Disclosure Letter
or any Schedule hereto or (iii) the moment such breach of representations
and warranties or failure to perform a covenant or failure under this
Agreement, the Disclosure Letter or any Schedule hereto should reasonably
have been discovered by Buyer. In absence of such a timely notification,
Buyer looses any right to indemnification of any Damage which arises out
the concerned breach of representations or warranty or failure to perform
a covenant or failure under this Agreement, the Disclosure Letter or any
Schedule hereto.
(ii) Buyer shall indemnify and hold harmless Sellers or their
Representatives (which definition includes heirs of such Seller), as the
case may be, from and against any Damages Sellers or their
Representatives have suffered, to the extent they arise out any breach of
any representation or warranty or failure to perform any covenant made by
or on behalf of Buyer under this Agreement or any Schedule hereto or any
other failure of Buyer under this Agreement or any Schedule hereto.
Sellers or their Representatives, as the case may be, or one of the
Sellers or its Representatives, shall notify Buyer within a period of one
month from the earlier of (i) the occurrence or (ii) discovery of such
breach of representations and warranties or failure to perform a covenant
or (iii) the moment that such breach of representations and warranties or
failure to perform a covenant should reasonably have been discovered by
the concerned Seller(s). In the absence of such a timely notification,
the concerned Seller(s) loose(s) any right to indemnification of any
Damage which arises out the concerned breach of representation or
warranty or failure to perform a covenant.
(iii) Neither Sellers nor Buyer are under an obligation to indemnify
the other Party, to the extent the breach of representations or
warranties or the failure to perform any covenant made in this Agreement
or in the Disclosure Letter or any Schedule hereto or any other failure
under this Agreement, the Disclosure Letter or any Schedule hereto is due
to the behaviour of such other Party. No indemnification may be
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claimed by Buyer, based upon facts, acts, omissions or general
circumstances, the existence of which could not have been
reasonably ignored by Buyer at the date of execution of this
Agreement.
(iv) Sellers can in any event only be held liable for the breach of
representations and warranties set forth in Article 4.7 if the amount of
taxes which are due but unpaid at the date of the execution of this
Agreement exceed the amount of taxes for which provision is made in the
Financial Schedules. Buyer accepts to indemnify and hold harmless Sellers
from and against, any taxes due or payable by the Company as a result of,
or in connection with, all taxable events occurring after the date of
execution of this Agreement.
7.5 THIRD PARTY CLAIMS AND ACTIONS AGAINST THIRD PARTIES. Promptly
after receipt by any person entitled to indemnification under this
Article 7 (an "Indemnified Party") of notice of the commencement of any
action in respect of which the Indemnified Party will seek
indemnification hereunder or before the Indemnified Party brings a claim
against a third party in respect of which the Indemnified Party will
seek indemnification hereunder if the claim is rejected, the Indemnified
Party shall notify each person that is obligated to provide such
indemnification (an "Indemnifying Party") thereof in writing. Failure to
so notify the Indemnifying Party shall relieve the Indemnifying Party
from any liability that it may have to the Indemnified Party under this
Article 7 or any other Article of this Agreement, the Disclosure Letter
or any Schedule, but not from any liability that it may have to the
Indemnified Party other than under this Agreement, the Disclosure Letter
or any Schedule hereto. The Indemnifying Party shall be entitled to
participate in the defense of such action or bringing of such a claim
and, provided that within 15 days after receipt of such written notice
the Indemnifying Party confirms in writing its responsibility therefor
and reasonably demonstrates that it will be able to pay the full amount
of potential liability in connection with any such claim, to assume
control of such defense or of the bringing of such claim; PROVIDED,
HOWEVER, that:
(i) the Indemnified Party shall be entitled to participate in the
defence of such action or bringing of such claim and to employ counsel at
its own expense to assist in the handling of such claim;
(ii) the Indemnifying Party shall obtain the prior written approval
of the Indemnified Party before entering into any
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settlement of such claim or ceasing to defend against such
claim, if pursuant to or as a result of such settlement or
cessation, an order, injunction or other equitable relief would
be imposed against the Indemnified Party which, if successful,
could materially interfere with the business, operations,
assets, conditions (financial or otherwise) or prospects of the
Indemnified Party.
The Indemnified Party shall give the Indemnifying Party sufficient
access to all relevant information and documents, related to such action
or claim, and necessary to enable the Indemnifying Party to participate
in, or assume control of, the defence of such action or bringing of such
claim.
7.6 MITIGATION OF DAMAGES. Without prejudice to the right of the
Indemnifying Party, as defined in article 7.5, pursuant to Article 7.5,
Buyer and its Representatives shall, and shall cause the Company, to
mitigate to any extent any Damages that may have arisen or may still
arise from any event in respect of which indemnification by Buyer or its
Representatives is, or will be, claimed. In particular, Buyer and its
Representatives shall, and shall cause the Company, to bring any action,
suit or proceeding against any other person or persons who may be liable
or jointly liable for such Damages or for the cause of such Damages.
7.7 DETERMINATION OF INDEMNIFICATION AMOUNTS. Subject to the other
provisions of this Article, the amounts for which Sellers shall be liable
under this Article 7 shall be determined taking into consideration (i)
any insurance proceeds received by Buyer, its Representatives or the
Company or to which Buyer, its Representatives or the Company are
entitled in connection with the facts giving rise to the right of
indemnification, (ii) any reimbursements, compensations or payments from
any other person or persons received by Buyer, its Representatives or the
Company or to which Buyer, its Representatives or the Company are
entitled in connection with the facts giving rise to the right of
indemnification, (iii) any savings of taxes realized or that may be
claimed by Buyer, its Representatives or the Company, in connection with
the facts giving rise to the right of indemnification.
7.8 SUBROGATION. In the event that the Indemnifying Party shall be
obligated to indemnify the Indemnified Party pursuant to this Article 7,
the Indemnifying Party shall, upon payment of such indemnity in full, be
subrogated to all the rights of the Indemnified Party with respect to the
claims to which such indemnification relates.
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ARTICLE 8 - TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time by
mutual written consent of Buyer and Sellers.
8.2 EFFECT OF TERMINATION. Upon the termination of this Agreement
pursuant to Article 8.1 hereof, this Agreement shall forthwith become
null and void and none of the Parties hereto or any of their respective
officers, directors, employees, agents, consultants, shareholders or
principals shall have any liability or obligation hereunder or with
respect hereto.
ARTICLE 9 - MISCELLANEOUS
9.1 HEADINGS. The section headings herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
9.2 NOTICES. All notices or other communications required or
permitted hereunder shall be given in writing and shall be deemed duly
given or served when personally delivered against receipt, on the third
business day when sent by telex or telecopy (and confirmation received),
on the next business day when sent by Federal Express or other nationally
recognized overnight delivery service or on the fifth business day after
deposit with the post office for delivery by registered or certified
mail, postage prepaid (return receipt requested), as follows:
If to the Sellers:
Aforementioned address of Seller under no. 1.
If to Buyer
Aforementioned address of Buyer.
or such other address as shall be furnished in writing by such Party. Any
notice or communication changing any of the addresses set forth above
shall be effective and deemed given only upon its receipt.
9.3 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the
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Parties hereto (and, with respect to each individual Seller,
the personal representatives and heirs of such Seller) and
their respective successors and permitted assigns; PROVIDED,
HOWEVER, that neither this Agreement nor any of the rights,
interests, or obligations hereunder may be assigned by any of
the Parties hereto without the prior written consent of the
other Party; PROVIDED, FURTHER, HOWEVER, that Buyer may assign
its interests or obligations hereunder to any of its
affiliates, as defined in the Belgian Royal Decree of October
14, 1991 defining the notions parent establishment and
affiliates for the application of the Company Law
("Affiliates"), other than the Company, without the Sellers'
prior written consent. However, such assignment to any of the
Affiliates of Buyer is only binding upon Sellers to the extent
notice of assignment has been given to Sellers.
9.4 ENTIRE AGREEMENT. This Agreement (including the Schedules
hereto) embodies the entire agreement and understanding of the Parties
with respect to the transactions contemplated hereby and supersedes all
prior written or oral commitments, arrangements or understandings with
respect thereto. There are no restrictions, agreements, promises,
warranties, covenants or undertakings with respect to the transactions
contemplated hereby other than those expressly set forth herein.
9.5 MODIFICATIONS, AMENDMENTS AND WAIVERS. At any time, to the
extent permitted by Law, Buyer and Sellers may, by written agreement,
modify, amend or supplement any term or provision of this Agreement and
any term or provision of this Agreement may be waived in writing by the
Party which is entitled to the benefits thereof.
9.6 GOVERNING LAW - COMPETENT JURISDICTION. This Agreement shall be
governed by the laws of Belgium as to all matters, including but not
limited to matters of validity, construction, effect and performance. The
Courts of Kortrijk shall have exclusive jurisdiction in this respect.
9.7 SEVERABILITY. In the event that any one or more provisions of
this Agreement shall be declared to be illegal or unenforceable under any
law, rule or regulation of any government (including any supranational
legal authority) having jurisdiction over either of the Parties hereto or
their successors or permitted assigns, such illegality or
unenforceability shall not affect the validity and
enforceability of the other provisions thereof, and the Parties
shall agree upon a modification of this Agreement
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with respect to such illegal or unenforceable provision to eliminate
such invalidity.
9.8 FORCE MAJEURE. Neither Party hereunder shall be held liable or
deemed to be in default under this Agreement if prevented from
performance of its obligations by reason of force majeure or other
contingencies beyond its control, including, but not limited to, strikes,
fire, earthquakes, wars, restraints affecting transportation, natural
calamities or acts of any government or supranational legal authority.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed in eight (8) original copies as of the day and year first
above written, Buyer and each Seller acknowledging receipt of one
original copy. In addition, the Parties hereto have caused the Schedules
hereto to be duly executed in two (2) original copies as of the day and
year first above written, Buyer and Sellers acknowledging receipt of one
original copy, respectively.
[BUYER]
Detection Systems, Inc.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Officer
[SELLERS]
1. V.M.H. N.V
By /s/ [Illegible]
2. V.R.C. N.V.
By /s/ [Illegible]
3. Ets. ▇▇▇▇▇▇ Dambois S.A.
By /s/ [Illegible]
4. Transport International Nieuwenhuyze N.V.
By /s/ [Illegible]
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5. /s/ ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
6. /s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
7. /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
LIST OF SCHEDULES*
Schedule 1: Letter of Gemel Italia - April 14, 1997.
Schedule 2: Audited accounts of the Company related to the financial
year ended December 31, 1996.
Schedule 3: Disclosure regarding the due diligence performed on June
10 and 11, 1997.
Schedule 4: List of the Sellers.
Schedule 5: Amendment of the Escrow Agreement.
Schedule 6: A. Pending litigations.
B. Collective bargaining agreements.
Schedule 7: Samenwerkingsovereenkomst SDM.
Schedule 8: Statutes of Radio Active Systems.
*copies of Schedules will be provided upon request.