SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (the "Agreement"), entered into as of
25 June 1997, between Xx. Xxxxxxxx Xxxxx, residing at Xxxxxxxxx 00,
Xxxxxxxx, hereinafter referred to as "Seller", acting in his capacity of
shareholder of RADIO-ACTIVE SYSTEMS, a corporation organized and existing
under the laws of Belgium, whose registered office is situated at
Xxxxxxxxxxxxxxxx 0, 0000 Xxxxxxxx (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 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of America,
hereinafter referred to as "Buyer".
Seller and Buyer are referred to herein from time to time
individually as a "Party" or collectively as the "Parties".
WHEREAS, Seller owns 650 or 20% of the 3,250 registered shares issued by
and representing the share capital of the Company;
WHEREAS, pursuant to that certain Memorandum of Understanding dated June
2, 1997 (the "MOU"), Buyer proposed to Seller to purchase said 650 shares
from Seller, contingent upon the prior successful acquisition by Buyer of
78.7% of the shares of the Company (the "78.7% Interest");
WHEREAS, Buyer has now successfully completed the acquisition of the
78.7% Interest;
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,
Seller shall sell to Buyer, and Buyer shall purchase from Seller, 650
registered shares representing 20% of the corporate capital of the
Company (the "Shares") for a purchase price (the "Purchase Price") of
BEF 25,140,235 and, at the date of execution of this Agreement:
(a) Seller shall sell, assign, transfer and deliver to Buyer, the
Shares and deliver all certificate(s), instruments and documents required
to be delivered by Seller to validly effectuate the transfer of such
Shares; specifically, Seller shall cause the Company's share register to
be duly amended so as to validly reflect the transfer of the Shares to
Buyer.
(b) Buyer shall accept and purchase the Shares from the Seller and
in payment therefor shall deliver to Seller (by intrabank transfer or
certified or official bank check) immediately available funds in an
amount equal to the amount of the Purchase Price.
The Purchase Price has been established on the basis of the per
share price paid by Buyer in consideration of the 78.7% Interest.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that the following are true,
correct and complete as of the date of this Agreement:
2.1 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.
2.2 AUTHORITY. Seller has all requisite authority to enter into,
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by Seller
and constitutes the valid and binding obligation of Seller enforceable
against it in accordance with its terms. Seller is entitled to sell and
procure the transfer of the full legal and beneficial ownership in the
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.
2.3 NO VIOLATION OR CONFLICT. Neither the execution and delivery of
this Agreement by Seller, nor the consummation by Seller of the
transactions contemplated hereby or compliance by Seller 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 (i) the
articles of incorporation or by-laws or the comparable charter or
organization documents of the Company, or (ii) any agreement, contract,
lease, permit, concession, franchise, license or other arrangement
applicable to the Company. No 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 required to be obtained or made
for the execution, delivery and performance by Seller of this Agreement.
2.4 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. There is no security, option, warrant,
right, call, subscription, agreement, commitment or understanding of any
nature whatsoever, 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.
2.5 COMPLIANCE WITH APPLICABLE LAWS AND AGREEMENTS. The Company
holds all permits, licenses, concessions, franchises, consents and
approvals of all Governmental Entities which are necessary or material to
the operation of its business, and the Company is in compliance in all
material respects with the terms of such permits, licenses, concessions,
franchises, consents and approvals. The business of the Company is not
being conducted, in conflict with, violation of or default under (i) any
judgment, order, decree, statute, law, ordinance, rule or regulation of
any Governmental Entity applicable to the Company, which violation or
default would result in any change in, or effect on, the Company
(including the business thereof) which is, or with reasonable probability
might be, materially adverse to the business, operations, assets,
condition (financial or otherwise) or prospects of the Company ("Material
Adverse Effect"), or (ii) any agreement, contract, lease, permit,
concession, franchise, license or other arrangement applicable to the
Company, which violation or default would have a Material Adverse Effect
(as defined) on the business of the Company.
2.6 FINANCIAL SCHEDULES. Attached hereto as Schedule 1 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 have been prepared in accordance with
generally accepted Belgian accounting principles and all other laws and
regulations applicable to the Company and present fairly the financial
condition of the Company as of such date and the results of operations of
the Company for such period.
2.7 EVENTS SUBSEQUENT TO DECEMBER 31, 1996. Since December 31,
1996, there has not been any (i) event, change or effect having,
individually or in the aggregate, a Material Adverse Effect (as defined)
on the business, financial condition, operation, results of operations,
or future prospects of the Company, (ii) contingency of any kind existing
or in prospect which, so far as reasonably can be foreseen at this time,
may result in any Material Adverse Effect (as defined), or (iii) material
transaction except in the ordinary course of business relating to the
assets or the business of the Company.
2.8 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. There are no
unpaid Taxes (as defined below) of the Company, except for Taxes the
payment of which is not yet due. 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 Taxes due by the Company. The Company has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, shareholder, or other third party. For purposes of
this Article, "Taxes" shall mean all direct and indirect taxes including,
without limitation, any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, environmental, customs
duties, capital, withholding, social security, real property, personal
property, sales, value added, registration, or other tax of any kind
whatsoever imposed or levied by any state, local or foreign government or
by any agencies or subdivisions thereof, including any interest,
penalty, or addition thereto, whether disputed or not.
2.9 LITIGATION. There are no claims, actions, suits, inquiries,
investigations, or proceedings pending, or to the knowledge of Sellers,
threatened, involving the Company. The Company has not received any
notice of legal proceedings or other legal notice from which it appears
that it may be or is alleged to be in violation of any laws of Belgium
relating to the environment or the health of persons. Seller is not aware
of any facts which would be likely to give rise to any such violation.
2.10 SHAREHOLDERS' LOANS. The Company is not a party to an agreement
or other instrument relating to the borrowing of money or the guaranty of
any obligation for the borrowing of money entered into or contemplated to
be entered into with any of its past or present shareholders.
2.11 CONTRACTS. The Company is not a party to (i) any agreement (or
group of related agreements), other than the agreements referred to in
Article 2.10 above, under which it has created, incurred, assumed, or
guaranteed any indebtedness for borrowed money; (ii) any agency,
distributorship, marketing, purchasing, sales, manufacturing or licensing
agreement; (iii) any agreement which is over one year in length or cannot
be terminated with a maximum one year notice period or involves the
receipt or payment of more than BEF 1,000,000; (iv) any agreement
limiting the freedom of the Company to compete in Belgium or abroad; (v)
any agreement for the employment of any individual on a full-time, part-
time, consulting, or other basis, or providing severance or termination
benefits, or any agreements pursuant to which services are provided on an
independent contractor basis or any employee leasing agreements; (vi) any
collective bargaining agreement (vii) any agreement under which the
consequences of a default or termination could have a Material Adverse
Effect on the business, financial condition, operations, results of
operations, or future prospects of the business of the Company; or (viii)
any agreement between the Company and the Sellers, whether acting
individually or collectively.
2.12 TITLE TO ASSETS. The Company has good and marketable title to
all of the assets used by it in the conduct of its business, free and
clear of any encumbrances, liens, pledges, charges, options, rights of
first refusal, mortgages or similar interests or other security rights.
2.13 LEASES. All real property leases currently used in the
Company's business are, in all material respects, valid and subsisting,
and there is not under any such lease any existing default known to the
Company or to Seller, that would be likely, either individually or in the
aggregate, to have a Material Adverse Effect (as defined), or any
condition, event or at which the passage of time or notice or both would
constitute such a default. With respect to personal property leases
currently used in the Company's business, the Company has valid and
enforceable written leases.
2.14 EMPLOYEES. 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, or other collective
bargaining disputes within the last five (5) years and none is pending,
or to the knowledge of the Company or Seller, threatened. There are no
pension, retirement or benefit plans, schemes or funds or any other
arrangement under which the Company is obliged to provide benefits of any
kinds to its employees, former employees, employees' spouse or any other
dependent.
2.15 INSURANCE. The Company has maintained insurance policies of
fire, liability, including product and environmental liability, use and
occupancy and other forms of insurance covering the business of the
Company, in amounts and against such losses and risks that are sufficient
for compliance with all requirements of law. Each such policy is in full
force and effect and all premiums are currently and fully paid up or
accruals provided for and no notice of cancellation or termination has
been received with respect to any such policy. The Company has complied
in all material respects with the provisions of such policies.
2.16 GENERAL. Each of the representations and warranties set forth
in this Article 3 and the Disclosure Letter thereto is true and accurate.
None of the representations and warranties set forth in this Article 2
shall be treated as qualified by any actual or constructive knowledge on
the part of Buyer or any of its representatives. Buyer has relied on the
representations and warranties of Seller explicitly set forth in this
Article 3 and on the Disclosure Letter thereto.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that the following are true,
correct and complete as of the date of this Agreement:
3.1 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.
3.2 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.
3.3 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, the articles of incorporation or by-laws of Buyer. No
filing or registration with, or authorization, 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.
ARTICLE 4 - COVENANT AS TO TAX MATTERS
Seller shall be liable for, and shall indemnify and hold Buyer and
the Company harmless against, all Taxes (as defined) due or payable by
the Company for any taxable year or taxable period ending on or before
the date of execution of this Agreement, but only to the extent that the
amount of such Taxes exceeds the amount of Taxes for which provision is
made in the Financial Schedules.
Without limiting the generality of the foregoing, Seller shall be
liable for, and shall indemnify and hold Buyer and the Company harmless
against, without limitation in time, any and all Taxes that may arise
out, as a result of, or in connection with, the existence and the
performance of that certain Co-operation Agreement
("Samenwerkingsovereenkomst") entered into between BVBA SDM and the
Company on January 25, 1991, a copy of which is attached hereto as
Schedule 2.
Subject and without prejudice to the foregoing, the Company shall be
liable for, and the Company and Buyer shall indemnify and hold Seller
harmless against, any and all 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.
Buyer and Seller shall cooperate with each other in giving effect to
this Article 4 and shall use their reasonable best efforts to provide
each other with such information as may be required for each Party to
satisfy its tax and audit requirements.
ARTICLE 5 - CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer required to be performed by it at the date
of execution of this Agreement shall be subject to the satisfaction, at
or prior said date, of each of the following conditions, each of which
may be waived by Buyer as provided herein except as otherwise required by
applicable law:
(i) Each of the representations and warranties of Seller contained
in this Agreement shall be true and correct in all respects as of the
date hereof.
(ii) All corporate action necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken
by Seller. All notices to, and declarations, filings and registrations
with, and consents, authorizations, approvals and waivers from,
governmental and regulatory bodies required to consummate the
transactions contemplated hereby and all other consents or waivers
required pursuant hereto shall have been made or obtained.
ARTICLE 6 - CONDITIONS TO OBLIGATIONS OF SELLER
The obligation of Seller required to be performed by it at the date
of execution of this Agreement shall be subject to the satisfaction, at
or prior to said date, of each of the following conditions, each of which
may be waived by Seller as provided herein except as otherwise required
by applicable law:
(i) Each of the representations and warranties of Buyer contained
in this Agreement shall be true and correct in all respects as of the
date hereof.
(ii) All corporate action necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken
by Buyer.
ARTICLE 7 - SURVIVAL AND INDEMNIFICATION
7.1 INDEMNITY PERIOD. Except if expressly otherwise provided
herein, all representations, warranties, covenants and agreements
contained in this Agreement, or in the Disclosure Letter or any Schedule,
certificate, document or other instrument delivered in connection
herewith shall survive until 31 December 2005.
7.2 INDEMNIFICATION AMOUNTS. In the absence of fraud or wilful
concealment, Seller's obligation and liability for any and all breaches
of:
(i) the representations and warranties set forth in Articles 2.1,
2.2 and 2.4 hereof shall be the Purchase Price, as determined in Article
1 hereof;
(ii) the other representations and warranties shall be limited to
BEF 10,000,000.
7.3 INDEMNIFICATION. Subject to the other provisions of this
Article, from and after the date of execution of this Agreement:
(i) Seller shall indemnify and hold harmless the Company and/or
Buyer and its successors, assigns and affiliates (collectively, the
"Representatives") from and against any losses, damages or expenses,
judgments, fines (collectively, "Damages") 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 Seller, under this Agreement or in the
Disclosure Letter or any Schedule, certificate, document or other
instrument contemplated hereby and delivered by Seller in connection
herewith. Buyer and/or the Company, as the case may be, shall notify
Seller promptly after the occurrence of such breach of representations
and warranties.
(ii) Buyer shall indemnify and hold harmless Seller and its
Representatives from and against any Damages 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 in any
certificate, document or other instrument contemplated hereby or
delivered by Buyer in connection herewith. Seller shall notify Buyer
promptly after the occurrence of such breach of representations and
warranties.
(iii) Seller shall indemnify and hold harmless the Company and/or
Buyer and its Representatives from and against any Damages which arise
out of future claims against the Company and/or Buyer or its
Representatives in relation to any Environmental Liability (as defined
hereafter) and any product liability, it being understood that Seller
shall retain such liability to the extent that the event causing such
Damages occurred or existed prior to the Closing. For purposes of this
provision, "Environmental Liability" means any liability related to
damages caused to the natural environment or to the health of persons by
the activities or omissions of the Company or otherwise connected with
its business including damages caused to water, air, soil by disposal of
waste.
7.4 THIRD PARTY CLAIMS. 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, the Indemnified
Party shall notify each person that is obligated to provide such
indemnification (an "Indemnifying Party") thereof in writing, but any
failure to so notify the Indemnifying Party shall not relieve it from any
liability that it may have to the Indemnified Party other than under this
Article 7. The Indemnifying Party shall be entitled to participate in the
defense of such action 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 with counsel reasonably
satisfactory to such Indemnified Party; PROVIDED, HOWEVER, that:
(i) the Indemnified Party shall be entitled to participate in the
defence 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 settlement of such
claim or ceasing to defend against such claim, if pursuant to or as a
result of such settlement or cessation, order, injunction or other
equitable relief would be imposed against the Indemnified Party; and
(iii) the Indemnifying Party shall not be entitled to control (but
shall be entitled to participate at its own expense in the defense of),
and the Indemnified Party shall be entitled to have sole control over,
the defense or settlement of (a) any claim to the extent the claim seeks
an order, injunction or other equitable relief against the Indemnified
Party which, if successful, could materially interfere with the business,
operations, assets, condition (financial or otherwise), or prospects of
the Indemnified Party or (b) any claim relating to Taxes.
7.5 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.
ARTICLE 8 - TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time by
mutual written consent of Buyer and Seller.
If Buyer or Seller shall terminate this Agreement pursuant to the
provisions hereof, such termination shall be effected by notice to the
other Party specifying the provision hereof pursuant to which such
termination is made.
8.2 EFFECT OF TERMINATION. Upon the termination of this Agreement
pursuant to Section 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, 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 Seller: At aforementioned address
If to Buyer: At aforementioned address
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 Parties hereto
(and, with respect to 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 without Seller's prior written
consent.
9.4 ENTIRE AGREEMENT. This Agreement (including the Disclosure
Letter and 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 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
(including the Schedules hereto) to be duly executed in two (2) original
copies as of the day and year first above written, Buyer and Seller each
acknowledging receipt of one original copy.
[BUYER]
Detection Systems, Inc.
By
Name: Xxxxxxxx X. Xxxxx
Title: Officer
Signature: /s/ Xxxxxxxx X. Xxxxx
[SELLER]
Xx. Xxxxxxxx Xxxxx
Signature: /s/ Xxxxxxxx Xxxxx
