Execution Version

 
SHARE PURCHASE AGREEMENT
 
This SHARE PURCHASE AGREEMENT (this “Agreement”), dated 28 December 2007, is
entered into
 
BY AND BETWEEN
 
Mr. Manfred Knütel, Ch. Des Vignes-Perdues 15, CH-2022 Bevaix, and Mr.
Hans-Peter Salvisberg, Schlossallee 9 ; CH 3280 Greng, (Switzerland) (the
“Sellers”)
 
AND
 
MEAS Europe, a corporation existing under the laws of France, with its corporate
seat at 105, Avenue du General-Eisenhower, BP 1036, 31023 Tolouse Cedex (the
“Buyer”) and Measurement Specialties, Inc., a New Jersey (USA) corporation
(“Guarantor”).
 
WITNESSETH

WHEREAS, the Sellers own 100% of the capital stock of Intersema Microsystems
S.A., a corporation (société anonyme) established under the laws of Switzerland,
with its corporate seat at 11, chemin des Chapons des Prés, 2022 Bevaix
(Switzerland) (“IMSA”);
 
WHEREAS, IMSA owns 100% of the capital stock of Intersema Sensoric SA, a
corporation (société anonyme) established under the laws of Switzerland, with
its corporate seat at 11, chemin des Chapons des Prés, 2022 Bevaix (Switzerland)
(“ISSA”);
 
WHEREAS, the Sellers are willing to sell, and the Buyer is willing to purchase
all of the capital stock of IMSA on the terms and conditions contained herein;
 
NOW THEREFORE, in consideration of the promises and the mutual agreements
contained herein, the parties agree as follows:
 
Article 1: DEFINITIONS
 
Terms expressed in capital letters in this Agreement are used as defined in this
Article or elsewhere in the Agreement.
 
“Acknowledgements of Debt” shall have the meaning specified in Section 3.2 of
this Agreement.
 
“Buyer” shall have the meaning specified at the beginning of this Agreement.
 
59250.000016 ATLANTA 704414v11
“Cash” shall have the meaning specified in Article 3, ingress, of this
Agreement.
 

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“Closing” shall mean the closing of the transactions contemplated by this
Agreement.
 
“Closing Date” shall have the meaning specified in Section 4.1 of this
Agreement.
 
“Deemed Dividend Distribution” shall mean benefits (i) granted to a shareholder
or a related party for which neither IMSA nor ISSA receives adequate
compensation and (ii) which would not be granted to an independent third party
on such terms and conditions.
 
“EBITDA” shall mean earnings before interest, taxes, depreciation and
amortization, determined in accordance with GAAP and ISSA’s historical
practices.
 
“Earn-Out” shall have the meaning specified in Section 3.3 of this Agreement.
 
“Excess Net Cash” shall mean eighty percent (80%) of the Net Cash of IMSA and
ISSA, in excess of 1 (one) million CHF, as estimated in good faith by the
parties no later than 3 (three) working days prior to the Closing Date. For the
avoidance of doubt, if the Net Cash of IMSA and ISSA is eleven (11) million CHF,
the Excess Net Cash shall equal eight (8) million CHF (80% of (11 million CHF-1
million CHF).
 
“Financial Statements” shall have the meaning specified in Section 5.6 of this
Agreement.
 
“Fundamental Representations” shall mean any of the Sellers’ representations and
warranties set forth in any of Sections 5.1 (Organization and Standing), 5.2
(Authority and Enforceability), 5.3 (No Conflict), 5.4 (Ownership of the
Shares), and 5.5 (Ownership of the shares of ISSA) of this Agreement.
 
“GAAP” shall mean the accounting rules as per the Swiss Code of Obligations
applied on a consistent basis.
 
“IMSA” shall have the meaning specified in the preamble.
 
“ISSA” shall have the meaning specified in the preamble.
 
“Net Cash” shall mean the sum of the cash of IMSA according to balance sheet
line item no. 1020 and of ISSA according to balance sheet line items no. 1000,
1010, 1020, 1021, 1022, 1024, 1025, 1026, 1050, 1051 and 1052, plus the sum of
the claims of ISSA according to balance sheet line items no. 14601 and 14602,
all as per the Closing Date as estimated by the parties in good faith no later
than 3 (three) working days prior to the Closing Date and all in CHF, converted,
if need be, into CHF at the exchange rates as per the Closing Date as estimated
by the parties in good faith no later than 3 (three) working days prior to the
Closing Date.
 
“Ordinary Future Profits” shall mean profits derived from the current ordinary
business activity of IMSA and ISSA after Closing, excluding extraordinary
profits derived from (i) dissolution of hidden reserves and provisions existing
as per December 31, 2006 due to conversion of Swiss GAAP to United States GAAP
and (ii) dissolution of any other hidden reserves and provisions existing as per
December 31, 2006.
 
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“Purchase Price” shall mean all the purchase price elements specified in Article
3 of this Agreement.
 
“Sellers” shall have the meaning specified at the beginning of this Agreement.
 
“Shares” means 100% (one hundred percent) of the capital stock of IMSA.
 
“Signing Date” shall mean the date of the signing of this Agreement which is the
date first above mentioned.
 
“Third Party Claims” shall have the meaning specified in Section 8.3 of this
Agreement.
 
Article 2: SALE OF SHARES - TRANSFER OF OWNERSHIP
 
2.1 Sale of Shares. Upon the terms and subject to the conditions of this
Agreement, the Sellers irrevocably undertake to sell to the Buyer, and the Buyer
agrees to irrevocably buy from the Sellers upon the same terms and subject to
the same conditions, the Shares.
 
2.2 Transfer of Ownership. Transfer of ownership in the Shares shall take place
on the Closing Date. The Buyer shall have full ownership and enjoyment of the
Shares as from the Closing Date with all rights associated thereto, including
all dividend rights which shall be voted subsequently to the Closing Date.
 
Article 3: PURCHASE PRICE
 
The sale of the Shares is hereby agreed and accepted for a purchase price of 27
(twenty-seven) million CHF, plus Excess Net Cash (together the “Cash”), plus the
Acknowledgements of Debt and, provided certain conditions are met, the Earn-Out.
The Purchase Price shall be paid as follows:
 
3.1 Cash. The Buyer shall pay the Cash at Closing as specifically set forth in
Exhibit N.
 
3.2 Acknowledgements of Debt. Each of the Sellers shall receive at Closing a 5
(five) million CHF acknowledgement of debt from the Buyer, payable, subject to
Section 8.4 of this Agreement, in 4 (four) annual installments of 1.25 (one
point twenty-five) million CHF to each of the Sellers, to the accounts
designated by each of the Sellers) (the “Acknowledgements of Debt”). The
Acknowledgements of Debt shall be substantially in the form attached hereto as
Annex 1. The Acknowledgements of Debt shall bear interest on the outstanding
principal at the rate of 4.5% (four point five percent) per annum, resulting in
the payment to each of the Sellers of a 0.55 (zero point fifty-five) million CHF
in interest over the duration of the Acknowledgement of Debt to each of the
Sellers, to the accounts designated by each of the Sellers.
 
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3.3 Earn-Out. Provided certain EBITDA thresholds as specified hereafter are
achieved during the calendar year 2009, and subject to Section 8.4 of this
Agreement, the Sellers shall receive up to an additional 20 (twenty) million CHF
(the “Earn-Out”) according to the following terms.
 

 
(i)
The Sellers shall receive from the Buyer 100% (one hundred percent) of the
Earn-Out (+i.e. 50% of the Earn-Out to each of the Sellers, to the accounts
designated by each of the Sellers) if ISSA’s EBITDA for calendar year 2009 is
greater than 7.5 (seven point five) million CHF.

 

(ii)
The Sellers shall not receive any of the Earn-Out from the Buyer if ISSA’s
EBITDA for calendar year 2009 is less than 5.3 (five point three) million CHF.

(iii)
If ISSA generates EBITDA between 5.3 (five point three) and 7.5 (seven point
five) million CHF, the Earn-Out shall be paid pro-rata (i.e. 50% of the
pro-rated Earn-Out to each of the Sellers, to the accounts designated by each of
the Sellers) (for example, if 2009 EBITDA is 6.4 (six point four) million CHF,
Sellers shall receive from the Buyer 10 million CHF under the earn-out
((6.4-5.3)/(7.5-5.3) * 20).

Subject to Section 8.4 of this Agreement, the Earn-Out shall be paid within 15
(fifteen) days following the date of approval of the unaudited 2009 financial
statements by the shareholders of ISSA which shall occur at the latest on March
31, 2010.
 
The Buyer shall use all commercially reasonable efforts to maximize ISSA’s
EBITDA during the calendar year 2009. The Buyer shall in particular abstain from
having charged to ISSA any management fees and, except as required by applicable
law or tax rules or regulation, royalty payments, by related companies and any
costs in excess of an amount that would be at arm’s length.
 
Article 4: CLOSING; TRANSACTIONS
 
4.1 Closing. The Closing shall be held on the date hereof (the “Closing Date”)
at the offices of Walder Wyss & Partners, Zurich (Switzerland), or such other
place and time as the parties hereto shall designate.
 
4.2 Closing Transactions and Deliveries. The Sellers and the Buyer hereby agree
that, at the Closing, the following actions shall occur simultaneously:
 
(a) Purchase and Sale of the Shares. Upon the terms and conditions contained in
this Agreement and in consideration of the Purchase Price, (i) the Sellers shall
sell and transfer the Shares of IMSA to the Buyer and the Buyer shall purchase
and accept the transfer of the Shares of IMSA.
 
(b) Delivery of the Shares. The Sellers shall (i) deliver the share certificates
of IMSA representing all of the Shares duly endorsed in a manner legally
sufficient, under applicable laws, to transfer to the Buyer the full ownership
of, and good and valid title to, the Shares (ii) deliver IMSA's board resolution
approving the transfer of all of the Shares to the Buyer in accordance with
IMSA's articles of association, (iii) remit the shareholders’ registry of IMSA
to the Buyer, (iv) execute the transfer of the Shares in the shareholders’
registry of IMSA, and (v) provide all documents and take all actions which are
necessary to transfer good and valid title to the Shares to the Buyer and to
accurately reflect ownership of the Shares in the shareholders’ registry of
IMSA.
 
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(c) Resignation of the Members of the Board of Directors of IMSA and ISSA. The
Sellers shall deliver to the Buyer documents evidencing the resignation,
effective as of the Closing Date, of the members of the board of directors of
IMSA and of ISSA.
 
(d) Delivery of Release Certificate or Bank Cashier’s Check. The Buyer shall
deliver to the Sellers the evidence of irrevocable wire transfers to the bank
accounts designated by the Sellers no later than 3 (three) working days before
the Closing Date representing the Buyer’s payment of the Cash in accordance with
the provisions of Section 3.1 of this Agreement.
 
(e) Execution of the Acknowledgements of Debt. The Sellers and the Buyer shall
execute the Acknowledgements of Debt.
 
(f) Employment Agreements. ISSA and the Sellers shall enter into the employment
agreements substantially in the form attached hereto as Annex 2.
 
Article 5: REPRESENTATIONS AND WARRANTIES OF THE SELLERS
 
The Sellers hereby represents and warrants to the Buyer as follows:
 
5.1 Organization and Standing of IMSA and ISSA. Each of IMSA and ISSA (i) are
corporations duly incorporated, validly existing and in good standing under the
Laws of Switzerland, (ii) have the requisite corporate power to carry on its
business as now being conducted and to own or lease the properties it now owns
or leases, and (iii) is duly qualified in good standing in each jurisdiction in
which the conduct of its business requires such qualification.
 
5.2 Authority and Enforceability. The Sellers have full power, right and
authority to execute this Agreement and to complete the transactions
contemplated hereby. The Agreement has been duly executed by the Sellers and
constitutes the legal, valid and binding obligation of the Sellers, enforceable
against the Sellers in accordance with its terms. Each decision taken by IMSA
and ISSA since September 30, 2004 has been taken in accordance with the
applicable provisions of the corporate charter of such companies. True and
complete copies of the corporate charter and other constituent documents of IMSA
and ISSA, of the amendments thereto and of all minutes of meetings of the
shareholders or directors of IMSA and ISSA held since September 30, 2004 have
been delivered to the Buyer. Neither IMSA nor ISSA has ever become insolvent or
has been the subject of any bankruptcy, liquidation, or other procedure
applicable to companies in difficulties such as detection and administration
orders by a Commercial Court.
 
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5.3 No Conflict. Neither the execution of this Agreement nor the execution of
the transactions contemplated hereby will conflict with, result in any violation
of, or constitute an infringement under (i) any provisions of the corporate
charter of IMSA, (ii) any judgment or injunction of any court or administrative
authority that is binding upon the Sellers, (iii) any law or regulation of
Switzerland, its cantonal or administrative authorities, or any jurisdiction in
which the Sellers are doing business, or (iv) any contract to which the Sellers,
IMSA or ISSA are a party.
 
5.4 Ownership of the Shares. The Sellers are the owner of the records of the
Shares and have good and marketable title to the Shares, free and clear of all
liens, encumbrances, preemptive rights or claims of any kind of any third party.
The Shares constitute 100% (one hundred percent) of the outstanding shares of
capital stock of IMSA. To the best of the Sellers’ knowledge full title to the
Shares will pass to the Buyer on the Closing Date, free and clear of all liens,
encumbrances, preemptive rights or claims of any kind of any third party.
 
5.5 Ownership of the shares of ISSA. IMSA is the owner of the records of 100%
(one hundred percent) of the shares of ISSA and has good and marketable title to
the shares of ISSA, free and clear of all liens, encumbrances, preemptive rights
or claims of any kind of any third party. The shares of ISSA held by IMSA
constitute 100% (one hundred percent) of the outstanding shares of capital stock
of ISSA.
 
5.6 Financial Statements. Exhibit A contains copies of (i) the audited balance
sheet of IMSA and ISSA as of December 31, 2006, as of December 31, 2005, and as
of December 31, 2004 together with the related profit and loss statements and
the notes thereto for the fiscal years ending on such dates as specified, in
each case audited by PWC PricewaterhouseCoopers AG, Neuchatel; and (ii) the
unaudited balance sheet of IMSA and ISSA as at October 31, 2007 together with
the related profit and loss statements and the notes thereto for the period
starting on January 1, 2007 and ending on October 31, 2007 (collectively (i) and
(ii), the “Financial Statements”).
 
The Financial Statements (i) have been prepared from, and are consistent with,
the books and records of IMSA and of ISSA respectively, especially with regard
to the provisions and reserves, and (ii) fairly represent, in accordance with
Swiss GAAP, the financial position of IMSA and of ISSA as of their respective
dates, and the related results of their operations for the financial periods
ending on such dates.
 
5.7 Properties.
 
(a) Real Property. Exhibit B contains a true and complete list of all items of
real property that IMSA and ISSA own and of all leases pursuant to which they
occupy real property as tenants. Except as specifically set forth in Exhibit B,
to the best of Sellers’ knowledge these properties have been constructed and
operated in accordance with all applicable building codes and planning
permissions, pollution control, safety and other laws and regulations of local
governments and administrative authorities.
 
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(b) Machinery and Equipment. Except as disclosed in Exhibit C all items of
machinery and equipment actually used in the production are used by IMSA and
ISSA for their intended purposes and are in good operating conditions and state
of repair. They have been operated and are currently operated in accordance with
all applicable laws and regulations.
 
(c) Intellectual Property Rights. Exhibit D contains a true and complete list of
all registered patents, internet domain names and trademarks of IMSA and ISSA,
all of which are valid and subsisting. Neither IMSA nor ISSA, has infringed or
is currently infringing any intellectual property right of any third party.
 
(d) Stock and Inventories. Except as disclosed in Exhibit E all stock and
inventories of products and work in process as reflected in the Financial
Statements physically existed at the date of this Agreement and were properly
valued in accordance with Swiss GAAP.
 
(e) Receivables. Except as disclosed in Exhibit F each account receivable
contained in the Financial Statements or outstanding at the Closing Date is
valid and existing, and arose or will have arisen in the ordinary course of
IMSA’s or ISSA’s business. Except with respect to bad debt reserves as contained
in the Financial Statements and except as disclosed in Exhibit F, each such
account receivable is recoverable at its nominal value within customary
deadlines, without requiring that any suit or administrative or judicial debt
collection proceeding be launched against, any debtor.
 
5.8 Insurance. Exhibit G contains a true and complete list of all insurance
policies presently providing coverage of the assets or operations of IMSA and
ISSA. Each of these policies is in full force and effect. They have been
adequate in scope and amount to cover all prudent and reasonably foreseeable
risks which have arisen in the conduct of IMSA’s and ISSA’s business prior to
the date of this Agreement. IMSA and ISSA are not in breach of their obligations
with respect to the payment of any premium or to the execution of their other
duties with respect to these policies and, to the best of the Sellers’
knowledge, no fact exists which would afford the basis for any such policy to be
voided on account of any act, omission or non-disclosure on the part of IMSA and
ISSA.
 
5.9 Authorizations. All material governmental licenses, authorizations, consents
and approvals required for the operation of the business of IMSA and ISSA have
been obtained and are in full force and effect. The business of IMSA and ISSA
are and have been conducted in material compliance with the terms and conditions
of all governmental licenses, authorizations, consents and approvals required
for the operation of the business of IMSA and ISSA and in accordance with all
applicable laws or regulations of any local government or administrative
authority.
 
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5.10 Taxes - Social Security. IMSA and ISSA have filed in due time all returns
required by law in respect of all contributions or taxes, whether corporate
income tax, customs, VAT, social security taxes, or any other tax, and each such
return correctly reflects all information required to be reported thereon. All
information provided in such returns, forms and declarations is true, complete
and accurate in all material respects. Taxes attributable to IMSA and ISSA that
were due and payable have been paid in due time. As of the date of this
Agreement, IMSA and ISSA shall not have incurred any liability based on failure
to pay taxes. There is no claim pending alleging that IMSA or ISSA has failed to
pay any tax in due time and, to the best of the Sellers’ knowledge, no such
claim is threatened. The Sellers do not know of any audit or investigation
pending with respect to any liability of any of IMSA and ISSA for any tax.
 
5.11 Employees. IMSA’s and ISSA’s employment contracts conform to the applicable
laws and collective bargaining agreements. IMSA and ISSA have fulfilled their
funding obligations under all pension and benefit plans to which they have been
required to contribute with respect to their employees.
 
5.12 Dispute. Except as listed in Exhibit H, there is no claim, legal action or
arbitration by any party, including, but not limited to employees of IMSA and
ISSA, pending or, to the best of the Sellers’ knowledge, threatened against IMSA
and ISSA.
 
5.13 Contracts or other commitments. Except for the contracts listed in Exhibit
I, IMSA and ISSA are not parties to any oral or written contract (i) that will
continue for a period of more than 12 (twelve) months from the Closing Date
without any possibility to give notice of termination without any adverse
consequences as a result of such termination, or (ii) under which payments will
be due by IMSA and ISSA in excess of CHF 50,000 (or the equivalent of this
Agreement in any other currency), in aggregate, or (iii) that is not cancelable
by IMSA and ISSA on notice of not longer than 90 (ninety) days and without
liability, penalty or premium of any kind, or (iv) that is a loan or other
financing agreement as borrower, lender, guarantor, grantor of security
interest.
 
The contracts listed in Exhibit I, are valid, binding and in full force and
effect, enforceable in accordance with their respective terms, and, to the best
of the Sellers’ knowledge, all their provisions materially conform with any
national or regional law, regulation or authorization. To the best of the
Sellers’s knowledge, IMSA and ISSA are not in default under any contract to
which they are parties nor does exist any event which, with the passage of time
or giving of notice, would constitute any such default. The Sellers have no
knowledge of any cancellation of, or threat to cancel, any contract to which
IMSA and ISSA are parties or of any pending bankruptcy, insolvency or similar
proceeding with respect to any party to any such contract.
 
Except as listed in Exhibit J, IMSA and ISSA have not made any commitment
whatsoever to public, national or the cantonal authorities or agencies, labor
organizations or any other party, relating to the amount of its investments or
the number of its employees.
 
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5.14 Environmental matters. Except as disclosed in Exhibit K, to the best of the
Sellers’ knowledge, (i) IMSA and ISSA are conducting and have been conducting
their business in material compliance with all applicable national or cantonal
environmental laws and regulations, including but not limited to, laws and
regulations relating to air and water pollution control and environmental waste,
(ii) IMSA and ISSA have been issued with and operate in material compliance with
all permits, certificates, licenses, approvals and other authorizations and
registrations, if any, and have filed all notifications and reports relating to
any chemical substance used in its business, air emissions, effluent discharges
and any waste storage, treatment and disposal required in connection with the
operation of its business, if any. There is no outstanding notice or violation,
injunction, claim, suit or other proceeding, administrative, civil or criminal,
pending or, to the best of Seller’s knowledge, threatened against IMSA and ISSA
by any public regulatory or control entity, with respect to any alleged
violation of any material environmental law or regulation, or with respect to
any clean-up material, in connection with the conduct of its business. To the
best of the Sellers’ knowledge all substances or wastes generated by IMSA and
ISSA in the conduct of its business, which are subject to laws and regulations
regarding their storage, treatment and disposal, if any, have been transported
and stored in material compliance with such laws and regulations.
 
5.15 Conduct of Business. Except as disclosed in Exhibit L since December 31,
2006, IMSA and ISSA have not:
 
(a) incurred any liability or obligation, other than in the ordinary course of
business;
 
(b) failed to pay or discharge any material liability or obligation when it
became due and payable;
 
(c) sold, transferred or otherwise disposed of, mortgaged, pledged or subjected
to lien or any other encumbrance any of their assets, whether tangible or
intangible, or agreed to take any such action, except inventory items and other
similar items in the ordinary course of business;
 
(d) incurred any additional commercial bank or similar loans or amended the
terms of, or extended the time for payment of, any such existing loan, or made
any loans, advances or guarantees to any person or equity, including without
limitation salary advances to any director, employee or officer, or agreed to
take any such action;
 
(e) suffered (i) any damage to or loss of assets used in their business, this
damage or loss not being fully covered by insurance, which, individually, or on
aggregate, have materially affected or are likely in the future to materially
affect the financial condition, net worth or profitability of IMSA or ISSA, or
(ii) any change in their business or financial condition, including, but not
limited to, sales, costs or liabilities;
 
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(f) increased the annual compensation, commissions or other benefits of any
director, officer or employee other than in the ordinary course of business in
line with past practices; or
 
(g) declared or made any dividend payment or any other payment or distribution
to any shareholder, or redeemed or purchased or otherwise acquired any of their
capital stock, or agreed to take any such action.
 
5.16 Customers. Exhibit O contains a forecast of future sales by ISSA and IMSA
to its twenty (20) largest customers. This forecast was prepared by the Sellers
to their best knowledge, it being understood that such forecasts are always
forward-looking statements and thus always somewhat speculative.
 
5.17 Suppliers. Exhibit P contains a list of the ten (10) largest suppliers of
raw materials for products of IMSA and ISSA for the twelve month period ending
October 31, 2007. Except as disclosed in Exhibit P, in the last twelve (12)
months, the Sellers have not received any written notice or have any actual
knowledge that any such supplier intends to materially adversely modify its
relationship with IMSA and ISSA (including, without limitation, material price
increases or any material adverse modification to the availability of parts or
materials).
 
No statement made or given by the Sellers in this Agreement and no statement
contained in any Exhibit to this Agreement contains any untrue statement of a
material fact or omits to state any fact necessary, in light of the
circumstances, in order to make such statement not misleading.
 
Article 6: GUARANTIES OF THE BUYER
 
The Buyer guarantees to the Sellers as follows:
 
6.1 Organization and Standing. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of France.
 
6.2 Authority and Enforceability. The Buyer has full power, right and authority
to execute this Agreement and to complete the transactions contemplated hereby.
The Agreement has been duly executed by the Buyer and constitutes the legal,
valid and binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms.
 
6.3 No Conflict. Neither the execution of this Agreement nor the execution of
the transactions contemplated hereby will conflict with, result in any violation
of, or constitute an infringement under (i) any provisions of the corporate
charter of Buyer; (ii) any judgment or injunction of any court or administrative
authority that is binding upon the Buyer, (iii) any law or regulation of
Switzerland, its cantonal or administrative authorities, or any jurisdiction in
which the Buyer is doing business, or (iv) any contract to which the Buyer is a
party.
 
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6.4 Consents. No consent, approval, order or authorization of, or registration,
declaration or filing with any governmental, judicial or regulatory agency or
authority is required with respect to the Buyer in connection with the
execution, delivery or enforceability of this Agreement or the consummation of
any of the transactions contemplated hereby.
 
Article 7: COVENANTS OF THE PARTIES RE: TAX MATTERS AND RELATED INDEMNIFICATION
 
7.1 Post-Closing Covenant of the Buyer. During a five-year period starting on
the Closing Date, the Buyer covenants and agrees that:
 
(a) the Buyer shall not cause IMSA and ISSA to make any dividend payment or
Deemed Dividend Distribution that would reduce distributable reserves/retained
earnings existing according to those certain audited financial statements of
IMSA and ISSA dated as of December 31, 2006;
 
(b) the Buyer shall not merge IMSA and ISSA or either IMSA and ISSA with the
Buyer or a company related to the Buyer;
 
(c) the Buyer shall not create any security interest into the assets of IMSA
and/or ISSA to secure loans to be used to finance the Purchase Price, provided,
however, that Buyer shall be allowed to pledge the shares of IMSA or ISSA for
such purpose or otherwise;
 
(d) the Buyer shall not grant any loan from IMSA or ISSA or any of their
subsidiaries to the Buyer or any affiliate of the Buyer to be used to finance
the Purchase Price;
 
(e) the Sellers acknowledge that there will be no other limitation on the
distribution of Ordinary Future Profits than those listed in this Section 7.1.
 
7.2 Indemnification by Buyer. In the event of breach of Section 7.1 by Buyer,
the Buyer shall indemnify Sellers as the case may be for any damage suffered by
the Sellers as a result of Buyer breach of Section 7.1 of this Agreement.
 
Article 8: INDEMNIFICATION BY THE SELLERS
 
8.1 Indemnification Obligations. The Sellers shall be liable for, and shall
indemnify the Buyer and hold them harmless for any and all damage suffered by
the Buyer resulting from (i) any material breach, untruth or inaccuracy
contained within and of the representations or warranties of the Sellers
contained in this Agreement, (ii) the failure of the Sellers to comply with any
of their obligations in this Agreement, and (iii) the failure of ISSA to
transition to the new IS1030 integrated circuit in a manner necessary to avoid
any interruption of ordinary course sales by ISSA of finished product
(notwithstanding any disclosures in Exhibit M related to such transition), it
being understood that there is no damage if and to the extent (A) the matter
giving raise to the respective claim of the Buyer has been fully provided for in
the Financial Statements, (B) IMSA, ISSA or the Buyer is entitled to and
receives an insurance payment which fully covers such damage, or (C) to the
extent such damage was increased by the Buyer’s failure to mitigate the damages.
 
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8.2 Limitation of Indemnification Obligations. The Sellers shall have no
obligation to indemnify the Buyer pursuant to Section 8.1 until the total damage
exceeds 300,000 CHF. The obligations of the Sellers to indemnify the Buyer
pursuant to Section 8.1, except with respect to Fundamental Representations,
shall be limited to the lesser of (i) 15 (fifteen) million CHF or (ii) the sum
of the Acknowledgements of Debt and Earn-Out, less the amount of the
Acknowledgements of Debt and Earn-Out previously paid to the Sellers. The
duration of the indemnification obligation of the Sellers shall be 2 (two) years
from the Closing Date, with the exception of warranties and representations set
forth in Sections 5.10 (Taxes-Social Security) and 5.14 (Environmental) of this
Agreement in which case the duration of such obligation shall be 4 (four) years
from the Closing Date. The Sellers shall not be released from their obligations
under this Section 8 as a result of any knowledge that the Buyer has or may have
of the situation, as a result, in particular, of any investigations made by the
Buyer, its representatives and counsel except that the Sellers shall have no
obligation to indemnify the Buyer pursuant to Section 8.1 if the matter giving
raise to the respective claim of the Buyer has been fairly disclosed in Exhibit
M, which exhibit shall include only specific detailed disclosures. The approval
of the financial statements for the fiscal year 2007 by the shareholders meeting
of IMSA and/or ISSA shall not constitute, and shall not be regarded as
constituting, a limitation in any way or waiver of the Buyer's right under this
Section 8.
 
8.3 Indemnification Procedure. The Buyer shall, at the latest after 30 business
day after have learned of the relevant facts, provide the Sellers with notice of
all third party actions, suits, proceedings, claims, demands or assessments
subject to the indemnification provisions of this Article 8 (collectively “Third
Party Claims”), brought at any time following the Closing Date of this
Agreement, and shall otherwise make available all relevant information material
to the defense of any Third Party Claims. The Sellers shall have the right to
elect to participate in the defence of any such Third Party Claim at their sole
expense, and no claim shall be settled or compromised without the consent of the
Sellers unless the Sellers shall have failed, after the lapse of a reasonable
time, but in no event more than 30 (thirty) days, after receiving notice of such
a Third Party Claim, to participate in the defence of the same. If the Sellers
wishes, it may control the defence of such litigation, at its own expense,
insofar as such a claim relates to the liability of the Sellers. The Buyer’s
failure to give notice in time or to provide copies of documents or to furnish
relevant data in connection with any Third Party Claim shall constitute a
defense (in part or in whole) to any claim for indemnification for the Sellers,
even if such failure shall not result in any prejudice to the Sellers.
 
Any indemnifiable claim that is not a Third Party Claim shall be asserted by
written notice from the Buyer to the Sellers; any failure to give such notice
will waive the rights of the Buyer even if the rights of the Sellers are not
actually prejudiced.
 
12

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8.4 Set-off. The Buyer shall have the right to set off against the amounts due
under the Acknowledgements of Debt and the Earn-Out, any claim which the Buyer
might have against the Sellers, including, but not limited to claims for
breaches of the representations and warranties contained in this Agreement.
 
Article 9: MISCELLANEOUS
 
9.1 Amendment/Waivers. This Agreement may be amended only by the written
agreement of the parties; any such written agreement shall specifically refer to
this provision and the provision to be amended. Any provision of this Agreement
may be waived only by an instrument in writing signed by the party or parties
against whom or for which the enforcement of such waiver is sought, and such
instrument shall specifically refer to this provision and the provision to be
waived.
 
9.2 Entire Agreement. This Agreement and the Exhibits and Annexes hereto
constitute the entire Agreement between the parties with respect to the subject
matter of this Agreement and supersede any other agreement between any of the
parties with respect to such subject matter.
 
9.3 Binding Effect/Assignment/Third Parties. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. Any assignment of this Agreement or the rights hereunder by
any of the parties without the prior written consent of the other parties shall
be void. Nothing in this Agreement, express or implied, is intended to confer
upon any person other than the parties any rights or remedies by virtue of this
Agreement.
 
9.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of Switzerland without regard to its
conflict of laws principles.
 
9.5 Disputes. Any dispute, controversy or claim arising out of, or in connection
with, this Agreement shall be finally settled under the Rules of Arbitration of
the International Chamber of Commerce in force on the date when the Notice of
Arbitration is submitted in accordance with these Rules. The number of
arbitrators shall be three. The seat of arbitration shall be in Geneva
(Switzerland). The Arbitration shall be conducted in English.
 
13

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9.6 Notices. Any notice or other communication under this Agreement shall be in
writing and shall be delivered by hand, telecopied or sent by registered or
certified mail, return receipt requested, addressed as follows:
 
If to the Sellers:
 
Manfred Knütel
Ch. Des Vignes-Perdues 15
CH-2022 Bevaix

Telecopier: +41 32 847 9568

Hans-Peter Salvisberg
Schlossallee 9
CH 3280 Greng

Telecopier: +41 32 847 9568

With a copy to:M. Vischer
Walder, Wyss & Partners
Seefeldstrasse 123
P.O. Box 1236
CH-8034 Zürich

Telecopier: ++41 44 498 98 99

If to the Buyer or the Guarantor:

c/o Measurement Specialties, Inc.
1000 Lucas Way
Hampton, VA 23666
Attention: Frank Guidone, CEO

Telecopier: +1 575-766-4347

With a copy to: Joseph B. Alexander, Jr., Esq.
Hunton & Williams LLP
Bank of America Plaza, Suite 4100
Atlanta, Georgia 30308-2216

Telecopier: +1 404-602-9004

Any such notice or communication shall be deemed to have been given when
delivered (in the case of hand delivery), sent (in the case of telecopy) or
received (in the case of registered mail).
 
9.7 Severability. If any provision in this Agreement is or becomes invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other provisions of this Agreement will nevertheless remain in full effect so
long as the economic or legal substance of the transactions contemplated by it
is not affected in any material manner adverse to any of the parties. The
parties shall nevertheless negotiate in good faith to replace any such invalid
or unenforceable provision with a provision which so far as is reasonably
possible leads to the same result.
 
14

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9.8 Liability. The liability of the Sellers under this Agreement shall be
several and not joint and several, in proportion to their shareholdings in IMSA.
 
9.9 Guarantee. In consideration of the Sellers entering into this Agreement, the
Guarantor unconditionally and irrevocably guarantees to the Sellers pursuant to
article 111 of the Swiss Code of Obligations the due and punctual performance
and observance by the Buyer of all the Buyer’s obligations, and the punctual
discharge by the Buyer of all the Buyer’s liabilities to the Sellers, arising
under this Agreement. Payments by the Guarantor to the Sellers pursuant to this
Section 9.9 solely with respect to the obligations of the Buyer under the
Acknowledgements of Debt shall be suspended so long as a Default or Event of
Default (as each such term is defined in the Credit Agreement referred to below)
exists and is continuing under that certain Amended and Restated Credit
Agreement, dated as of April 3, 2006, among General Electric Capital Corporation
for itself, as a lender, and as agent for the lenders party thereto from time to
time, Guarantor, as borrower, and certain of Guarantor’s affiliates and
subsidiaries (as the same now exists and may hereafter be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
 
15

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

 
Execution Version
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed, where
applicable, by their duly authorized respective representatives each as at the
date first above written.
 

           
The Sellers:
           

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

Name: Mr. Manfred Knütel

 

           

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

Name: Mr. Hans-Peter Salvisberg

 

   
The Buyer:
             
MEAS Europe

 

    By:    

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

    Name:      

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

 
    Title:      

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

 

 

   
The Guarantor:
             
Measurement Specialties, Inc.

 

    By:    

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

    Name:      

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

 
    Title:      

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

 

 
16

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

 
ANNEXES

Annex 1  
 Acknowledgements of Debt
      Annex 2   Employment Agreement

 
EXHIBITS
 

Exhibit A   Financial Statements       Exhibit B   Real Property       Exhibit C
  Machinery and Equipment       Exhibit D   Intellectual Property       Exhibit
E   Stock and Inventories       Exhibit F   Receivables       Exhibit G  
Insurance       Exhibit H   Disputes       Exhibit I   Contracts       Exhibit J
  IMSA’s Commitments       Exhibit K   Environmental Matters       Exhibit L  
Conduct of Business       Exhibit M   Disclosures       Exhibit N   Payment of
Cash       Exhibit O   Customers       Exhibit P   Suppliers

 
17

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Acknowledgement of Debt

Dated as of December 28, 2007
 
The undersigned, MEAS Europe, a corporation existing under the laws of France,
with its corporate seat at 105, avenue du Général Eisenhower, BP 1036, 31023
Toulouse, Cédex (hereinafter referred to as “Debtor”, acknowledges that it shall
pay to Mr. Manfred Knütel, Ch. Des Vignes-Perdues 15, CH-2022 Bevaix
(Switzerland) (hereinafter referred to as “Payee”), or order, at the address set
forth below for notices to Payee or at such other place as payee may from time
to time designate, the principal sum of five million (5,000,000) CHF, together
with accrued interest thereon.

The entire principal balance of this Acknowledgement of Debt, together with all
unpaid accrued interest thereon, shall be paid in 4 (four) annual installments
of 1.25 (one point two five) million CHF on December 28, 2008, December 28,
2009, December 28, 2010 and December 28, 2011, respectively. The unpaid
principal balance of this Acknowledgement of Debt shall bear interest from the
date hereof at a rate of interest equal to four point five percent (4.5%) per
annum. Interest chargeable hereunder shall be calculated on the basis of a three
hundred sixty-five (365) day year for actual days elapsed.

Debtor may prepay all or part of the principal balance under this
Acknowledgement of Debt, without premium or penalty provided, however, with each
prepayment Debtor shall also pay the interest, if any, accrued on the principal
amount being prepaid to the date of such prepayment.

All payments hereunder are to be applied first to the payment of accrued
interest, if any, and the balance remaining applied to the payment of principal.
All principal and interest, if any, due hereunder is payable in lawful money of
Switzerland.

All amounts payable under this Acknowledgement of Debt may be made with set-off,
deduction or counterclaim, as provided in Article 8.4 of the share purchase
agreement dated as of the date of this Acknowledgement of Debt and entered into
between and among the Debtor, the Payee and the other signatories thereto
(hereinafter referred to as the “Share Purchase Agreement”).

Payments under this Acknowledgement of Debt shall be made on account opened in
the name of the Payee as follows:

Beneficiary: Manfred Knütel, Bevaix
IBAN: CH3900290290404464.40R
Swift: UBSWCHZH80A
Bank name: UBS SA, Place Pury 5, CH-2001 Neuchâtel

18

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

 
The Debtor agrees not to assign this Acknowledgement of Debt or any of our
obligations hereunder without the prior written consent of the Payee. The Payee
may at any time assign its rights and transfer its obligations under this
Acknowledgement of Debt to any person, provided and to the extent that such
person (the assign) acknowledges and agrees, and cause its possible assigns to
acknowledge and agree, that the Debtor shall have the right to make any payment
due hereunder with set-off, deduction or counterclaim of any claim that the
Debtor might have against the Payee or its assigns including, but not limited to
claims for breaches of the representations and warranties contained in the Share
Purchase Agreement. Any assignment which would not comply this clause, is null
and void.
 
Payments by Debtor to Payee hereunder shall be suspended so long as a Default or
Event of Default (as each such term is defined in the Credit Agreement referred
to below) exists and is continuing under that certain Amended and Restated
Credit Agreement, dated as of April 3, 2006, among General Electric Capital
Corporation for itself, as a lender, and as agent for the lenders party thereto
from time to time, Measurement Specialties, Inc., a New Jersey corporation, as
borrower (“MSI”), and certain of MSI’s affiliates and subsidiaries (as the same
now exists and may hereafter be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”).

IF, FIVE (5) DAYS AFTER WRITTEN NOTICE OF THE SAME, MAKER SHALL CONTINUE IN ITS
FAILURE TO PAY INTEREST AND PRINCIPAL AS PROVIDED HEREUNDER, THEN THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE, TOGETHER WITH INTEREST ACCRUED THEREON, SHALL
THEREUPON BE IMMEDIATELY DUE AND PAYABLE AT THE OPTION OF THE PAYEE OR ITS
PERMITTED ASSIGNS HEREOF..

All notices or demands required or permitted hereunder shall be in writing and
shall be deemed given when actually delivered or on the third business day
following the day on which the same shall have been mailed by registered or
certified mail, postage prepaid, addressed as follows:

If to Debtor: 
c/o Measurement Specialties, Inc.
1000 Lucas Way
Hampton, VA 23666
Attention: Frank Guidone, CEO
Telecopier: +1 575-766-4347

If to Payee: 
Manfred Knütel
Ch. Des Vignes-Perdues 15
CH-2022 Bevaix

Telecopier: +41 32 847 9568

19

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

 
Either Debtor or Payee may change its respective address or addressee by giving
notice of such change to the other party in the manner provided herein. For this
purpose only, unless and until such written notice is actually received, the
address and addressee specified for each party shall be deemed to continue in
effect for all purposes.

This Acknowledgement of Debt and all transactions hereunder and/or evidenced
hereby shall be governed by, construed under and enforced in accordance with the
substantive laws of Switzerland. Any dispute, controversy or claim arising out
of, or in connection with, this note shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce in force on the date when
the Notice of Arbitration is submitted in accordance with these Rules. The
number of arbitrators shall be three. The seat of arbitration shall be in Geneva
(Switzerland). The Arbitration shall be conducted in English.

No amendment, modification or supplement of any provision of this
Acknowledgement of Debt shall be valid or effective unless made in writing and
signed by a duly authorized officer of each Party or its permitted assigns.

If any provision of this Acknowledgement of Debt, or the application thereof,
shall, for any reason and to any extent, be held invalid, illegal or
unenforceable, the remainder of this Acknowledgement of Debt shall be applied
and interpreted so as to reasonably effect the intent of the Parties hereto. The
Parties further agree to replace such void or unenforceable provision by
provision which will achieve, to the extent possible, the economic, business and
other purposes of the void and unenforceable provision. In any case the
remainder of this Agreement shall remain in full force and effect and shall not
be affected thereby.

In witness whereof the undersigned has executed this Acknowledgement of Debt to
be effective as of the date written above.
 

   
Debtor:
             
MEAS Europe

 

    By:    

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

    Name:      

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

 
    Title:      

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

 

 

   
Payee:
             
Mr. Manfred Knütel
     
 

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

 
20

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

Acknowledgement of Debt

Dated as of December 28, 2007
 
The undersigned, MEAS Europe, a corporation existing under the laws of France,
with its corporate seat at 105, avenue du Général Eisenhower, BP 1036, 31023
Toulouse, Cédex (hereinafter referred to as “Debtor”, acknowledges that it shall
pay to Mr. Hans-Peter Salvisberg, Schlossallee 9 ; CH 3280 Greng, (Switzerland)
(hereinafter referred to as “Payee”), at the address set forth below for notices
to Payee or at such other place as payee may from time to time designate, the
principal sum of five million (5,000,000) CHF, together with accrued interest
thereon.

The entire principal balance of this Acknowledgement of Debt, together with all
unpaid accrued interest thereon, shall be paid in 4 (four) annual installments
of 1.25 (one point two five) million CHF on December 28, 2008, December 28,
2009, December 28, 2010 and December 28, 2011, respectively. The unpaid
principal balance of this Acknowledgement of Debt shall bear interest from the
date hereof at a rate of interest equal to four point five percent (4.5%) per
annum. Interest chargeable hereunder shall be calculated on the basis of a three
hundred sixty-five (365) day year for actual days elapsed.

Debtor may prepay all or part of the principal balance under this
Acknowledgement of Debt, without premium or penalty provided, however, with each
prepayment Debtor shall also pay the interest, if any, accrued on the principal
amount being prepaid to the date of such prepayment.

All payments hereunder are to be applied first to the payment of accrued
interest, if any, and the balance remaining applied to the payment of principal.
All principal and interest, if any, due hereunder is payable in lawful money of
Switzerland.

All amounts payable under this Acknowledgement of Debt may be made with set-off,
deduction or counterclaim, as provided in Article 8.4 of the share purchase
agreement dated as of the date of this Acknowledgement of Debt and entered into
between and among the Debtor, the Payee and the other signatories thereto
(hereinafter referred to as the “Share Purchase Agreement”).

Payments under this Acknowledgement of Debt shall be made on account opened in
the name of the Payee as follows:

Beneficiary: Hans Peter Salvisberg, Greng
IBAN: CH53 0844 0535 6133 0013 5
Swift: COOPCHBB
Bank name: Bank Coop, 35, Rue de Romont, 1700 Fribourg (Switzerland)

21

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

 
The Debtor agrees not to assign this Acknowledgement of Debt or any of our
obligations hereunder without the prior written consent of the Payee. The Payee
may at any time assign its rights and transfer its obligations under this
Acknowledgement of Debt to any person, provided and to the extent that such
person (the assign) acknowledges and agrees, and cause its possible assigns to
acknowledge and agree, that the Debtor shall have the right to make any payment
due hereunder with set-off, deduction or counterclaim of any claim that the
Debtor might have against the Payee or its assigns including, but not limited to
claims for breaches of the representations and warranties contained in the Share
Purchase Agreement. Any assignment which would not comply this clause, is null
and void.
 
Payments by Debtor to Payee hereunder shall be suspended so long as a Default or
Event of Default (as each such term is defined in the Credit Agreement referred
to below) exists and is continuing under that certain Amended and Restated
Credit Agreement, dated as of April 3, 2006, among General Electric Capital
Corporation for itself, as a lender, and as agent for the lenders party thereto
from time to time, Measurement Specialties, Inc., a New Jersey corporation, as
borrower (“MSI”), and certain of MSI’s affiliates and subsidiaries (as the same
now exists and may hereafter be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”).

IF, FIVE (5) DAYS AFTER WRITTEN NOTICE OF THE SAME, MAKER SHALL CONTINUE IN ITS
FAILURE TO PAY INTEREST AND PRINCIPAL AS PROVIDED HEREUNDER, THEN THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE, TOGETHER WITH INTEREST ACCRUED THEREON, SHALL
THEREUPON BE IMMEDIATELY DUE AND PAYABLE AT THE OPTION OF THE PAYEE OR ITS
PERMITTED ASSIGNS HEREOF..

All notices or demands required or permitted hereunder shall be in writing and
shall be deemed given when actually delivered or on the third business day
following the day on which the same shall have been mailed by registered or
certified mail, postage prepaid, addressed as follows:

If to Debtor: 
c/o Measurement Specialties, Inc.
1000 Lucas Way
Hampton, VA 23666
Attention: Frank Guidone, CEO
Telecopier: +1 575-766-4347

If to Payee: 
Hans-Peter Salvisberg
Schlossallee 9
CH 3280 Greng

Telecopier: +41 32 847 9568

22

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

 
Either Debtor or Payee may change its respective address or addressee by giving
notice of such change to the other party in the manner provided herein. For this
purpose only, unless and until such written notice is actually received, the
address and addressee specified for each party shall be deemed to continue in
effect for all purposes.

This Acknowledgement of Debt and all transactions hereunder and/or evidenced
hereby shall be governed by, construed under and enforced in accordance with the
substantive laws of Switzerland. Any dispute, controversy or claim arising out
of, or in connection with, this note shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce in force on the date when
the Notice of Arbitration is submitted in accordance with these Rules. The
number of arbitrators shall be three. The seat of arbitration shall be in Geneva
(Switzerland). The Arbitration shall be conducted in English.

No amendment, modification or supplement of any provision of this
Acknowledgement of Debt shall be valid or effective unless made in writing and
signed by a duly authorized officer of each Party or its permitted assigns.

If any provision of this Acknowledgement of Debt, or the application thereof,
shall, for any reason and to any extent, be held invalid, illegal or
unenforceable, the remainder of this Acknowledgement of Debt shall be applied
and interpreted so as to reasonably effect the intent of the Parties hereto. The
Parties further agree to replace such void or unenforceable provision by
provision which will achieve, to the extent possible, the economic, business and
other purposes of the void and unenforceable provision. In any case the
remainder of this Agreement shall remain in full force and effect and shall not
be affected thereby.

In witness whereof the undersigned has executed this Acknowledgement of Debt to
be effective as of the date written above.
 

   
Debtor:
             
MEAS Europe

 

    By:    

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

    Name:      

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

 
    Title:      

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

 

 

   
Payee:
             
Mr. Hans-Peter Salvisberg
     
 

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

 

 
23

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

Execution Version
 
INTERSEMA SENSORIC SA
 
EMPLOYMENT AGREEMENT
 
24

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

EMPLOYMENT AGREEMENT
 
between
 

INTERSEMA SENSORIC SA Employer
Chemin Chapons-des-Prés 11
 
Bevaix, Neuchâtel
Switzerland
 

 
and
 

Mr. Manfred Knütel Employee
Ch. Des Vignes-Perdues 15, CH-2022 Bevaix (Switzerland)
 

The Employer and the Employee are also referred to as “Party” or “Parties”.
 
25

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

TABLE OF CONTENTS

I.
Beginning of Employment
25
II.
Position
25
A.
Function
25
B.
Duties and Responsibilities
25
III.
Place of Work
25
IV.
Compensation
25
A.
Base Salary
25
B.
Bonus
25
C.
Acknowledgements of the Employee
25
a)
Nature of Additional Payments
25
b)
Conditionality
25
D.
No other Compensation
25
E.
Deductions
25
V.
Expenses
25
VI.
Company Car
25
VII.
TERM and Termination
25
A.
Term
25
B.
Termination for Valid Reasons
25
VIII.
Working Time
25
IX.
Vacation
25
X.
Holidays and Compelling Absence
25
A.
Holidays
25
B.
Compelling Absences
25
XI.
Illness, Accident and Death
25
A.
Medical Certificate
25
B.
Daily Allowance Insurance
25
C.
Occupational and Non-occupational Accidents
25
XII.
Intellectual Property Rights
25
XIII.
Data Protection and Privacy
25
XIV.
Non-Competition and Non-Solicitation
25
XV.
Confidentiality
25
XVI.
Miscelleanous
25
A.
Entire Agreement
25
B.
Severability
25
C.
Amendments
25
D.
Governing Law and Jurisdiction
25
E.
Execution
25
F.
Waiver
25
G.
Survival
25

 
26

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EMPLOYMENT AGREEMENT
 
Article 10: BEGINNING OF EMPLOYMENT
 
The employment of the Employee (the “Employment”) starts on 28 December 2007
(the “Commencement Date”).
 
Article 11: POSITION
 
11.1
Function

 
The Employee shall assume the function as General Manager of Operations and
Research and Development.
 
11.2
Duties and Responsibilities

 
It is understood that the duties and responsibilities arising out of the above
function includes all tasks customarily or reasonably incidental to such
function and those expressly mentioned in this Employment Agreement.
 
Upon consultation with the Employee, the Employer may assign to the Employee any
additional or new duties or responsibilities as deemed reasonable or appropriate
by the Employer in the course and fulfilment of its business.
 
The Employee shall carefully perform all work assigned to the Employee, and
loyally safeguard the Employer’s legitimate interests.
 
The Employee is not entitled to work for any third party or to engage in any
gainful employment without the written approval of the Employer.
 
Article 12: PLACE OF WORK
 
The Employee’s principal place of work shall presently be in Bevaix, Neuchâtel
(Switzerland) at the main office of the Employer. The Employer may request the
Employee to travel in the course of the Employment in order to perform his
obligations and duties under the Employment Agreement, but such travel shall be
limited and reasonably agreed among the Employer and the Employee in advance.
 
Article 13: COMPENSATION
 
13.1
Base Salary

 
The Employee shall receive an annual base salary of CHF 185,000 gross (the “Base
Salary”), payable in twelve monthly instalments at the end of the month, plus
any mandatory contributions for family and children allowances.
 
27

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

 
13.2
Bonus

 
The Employee shall be entitled to a discretionary bonus payment of up to twenty
percent (20%) of the Base Salary (the “Bonus”) in accordance with the Employer’s
bonus plan (the “Bonus Plan”) as amended from time to time by the Employer. The
goals for the Bonus shall be established and mutually agreed to by the Employer
and the Employee at the beginning of each fiscal year.
 
13.3
Acknowledgements of the Employee

 
(a)
Nature of Additional Payments

 
The Employee acknowledges and agrees that any entitlements granted and payments
made in addition to the Base Salary, including, but not limited to any bonuses,
participations, or gratuities of the Employer or another group company (the
“Additional Payments”) are not part of the salary legally or contractually owed
by the Employer and are made at full discretion of the Employer or the company
granting such bonus, participation or gratuity, respectively. Any Additional
Payments shall not create any obligation of the Employer or other group company
to make such Additional Payments in future and shall not create any right or
entitlement of the Employee to such Additional Payments in future even if paid
over consecutive years and without express reservation.
 
(b)
Conditionality

 
Any Additional Payments, if any, are subject to the condition that no notice of
termination has been given under this Employment Agreement by the later of the
end of the respective calendar year. In case of a termination of the Employment
Agreement by the Employer, this condition is deemed to be fulfilled except where
the termination was made by the Employer for cause (not limited to valid reasons
entitling the Employer to a termination without notice pursuant to article 337
Swiss Code of Obligations). Further conditions may be defined in the respective
documents governing such Additional Payments.
 
13.4
No other Compensation

 
The Employee acknowledges and agrees that he shall not be entitled to receive
any other compensation or benefit of any nature from the Employer except as
expressly provided for in this Employment Agreement.
 
28

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

 
13.5
Deductions

 
From the salary (as defined by the applicable laws and regulations, which may
include bonuses, allowances, participations and other benefits in addition to
the Base Salary) any portions of Employee’s social security contributions (AHV
(Old-age and surviving dependents insurance)/IV (Disability insurance)/EO (Wage
compensation), ALV (Unemployment insurance), UV (Accidence insurance), premiums
to pension schemes (cp. Regulations of the pension fund) and withholding taxes,
if any, will be deducted and withheld by the Employer from the payments made to
the Employee.
 
Article 14: EXPENSES
 
The Employee shall be entitled to reimbursement by the Employer of out-of-pocket
business expenses (including mobile phone expenses) reasonably incurred by the
Employee during the Employment in the performance of the Employee’s duties under
this Employment Agreement, including expenses which may be charged to a company
credit card, subject to (i) the submission of relevant vouchers and receipts and
(ii) the compliance with the reimbursement policies of the Employer possibly
established and amended from time to time. The Employee shall further be
entitled to reimbursement by the Employer of out-of-pocket business expenses by
the Employee during the Employment in the performance of the Employee’s duties
under this Employment Agreement, absent submission of relevant vouchers and
receipts, at a fixed rate of CHF 15,000 per year.
 
Article 15: COMPANY CAR
 
Throughout the course of this Employment the Employee shall be entitled to use
the existing company car (BMW X5) free of charge. The Employee is entitled to
use the car for private or business purposes. The Employee shall be reimbursed
for petrol expenses for business as well as for private journeys. However, the
reimbursement is subject to the submission of relevant vouchers and receipts.
The conclusion and the expenses for the comprehensive cover insurance, the motor
vehicle tax, maintenance, tires, vignette will be paid by the Employer.
 
29

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Article 16: TERM AND TERMINATION
 
16.1
Term

 
The Employment shall be of a definite time (the “Employment Period”) commencing
on the Commencement Date and ending on the date that is two (2) years after the
Commencement Date.
 
16.2
Termination for Valid Reasons

 
The Employment Agreement may be terminated by either Party for valid reasons
pursuant to Article 337 of the Swiss Code of Obligations at any time.
 
Article 17: WORKING TIME
 
The weekly working hours for the Employee are at least 40 hours per week.
 
The Employee shall work extra hours and overtime, if required and to the extent
such work can reasonably be expected in good faith.
 
The Base Salary as defined in Section 13.1 hereunder includes any and all
remuneration for such overtime, and the Employee shall have no entitlement to
additional compensation for such overtime, whether in cash nor in kind.
 
Article 18: VACATION
 
The Employee is entitled to twenty-five (25) business days of vacation per
calendar year.
 
The Employer has the right to determine when the Employee shall take vacation.
However, the Employer shall take the Employees requests in due consideration. If
the Employee requests to take vacation he shall reasonably prior to the intended
vacation inform the responsible executive. In any event the Employee shall
provide for suitable internal representation and he shall care for the ongoing
service of important affairs during his vacation.
 
The vacation entitlement is based on one complete calendar year. For the year in
which the Employment relationship begins or ends, the vacation entitlement is
calculated pro rata temporis. The Employee shall not be entitled to retain
unused vacation days in excess of an aggregate of (25) business days of
vacation.
 
30

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Article 19: HOLIDAYS AND COMPELLING ABSENCE
 
19.1
Holidays

 
On federal and cantonal Holidays the Employee is not obliged to work.
 
19.2
Compelling Absences

 
To the extent necessary or required, Employees are eligible to take time off for
compelling reasons (as specified below).
 
Compelling Absences include, but are not limited to, the following events for
which the time off as set forth below apply (stated in business days):
 

 
·
Marriage of Employee:             
2 days
         
·
Attendance of wedding of a family member or close relative:
1 day
         
·
Birth of Employee’s child:
2 days
         
·
Death or illness of:
 

 

 
·
close family member or person living in the same household: 3 days          
·
other family member: 2 day          
·
close relative or friend: 1 day

 

 
·
Moving:
1 day
         
·
Medical or dental care:
as required
         
·
Public duties:
as required

 
Compelling Absences do not constitute a ground for a deduction of the Employees’
entitlements to the Base Salary or vacation, unless the absence exceeds the time
period as set forth above.
 
Article 20: ILLNESS, ACCIDENT AND DEATH
 
20.1
Medical Certificate

 
If the Employee’s absence exceeds five business days, the Employee shall, as
soon as practicable furnish a medical certificate. However, the Employer
reserves the right to demand for a medical certificate in case of any absence,
irrespective of the length of the absence. The Employer is entitled to ask the
Employee to consult a medical examiner at the Employer’s expense.
 
31

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20.2
Daily Allowance Insurance

 
If an Employee is prevented from performing the Employee’s duties arising out of
or relating to the Employment due to illness (not deliberately self-inflicted by
the Employee) or due to an accident (not deliberately self-inflicted by the
Employee), then the Employer will continue to pay the base salary pursuant to
the collective daily allowance insurance (Taggeldversicherung) of the Employer,
provided that the conditions of the collective daily allowance insurance are
being met and that the Employee complies with the conditions of the collective
daily allowance insurance and with the directives of the Employer. In principle,
the daily allowance insurance provides for the following coverage:
 
90% of the Base Salary during up to 730 days after a waiting period of 30 days.
 
During the waiting period of 30 days 100% of the Base Salary according to
Section 13.1 is paid to the Employee.
 
The insurance premium for the daily allowance insurance is paid one half each by
the Employer and the Employee.
 
20.3
Occupational and Non-occupational Accidents

 
During the Employment the Employee is insured for occupational and
non-occupational accidents. Premiums for occupational accident insurance and
occupational sickness insurance are paid by the Employer. Premiums for
non-occupational accident insurance are paid by the Employee.
 
90% of the Base Salary is paid after a waiting period of 30 days.
 
During the waiting period of 30 days 100% of the Base Salary according to
Section 13.1 is paid to the Employee.
 
Article 21: INTELLECTUAL PROPERTY RIGHTS 
 
The Employer is entitled to all work results and all intellectual property
created by the Employee in the course of or in connection with the employment
(notwithstanding whether in pursuance or fulfilment of a contractual duty or
not, whether individually or with the assistance of any other individual or
entity), and all such work results, intellectual property and related rights
vest irrevocably in the Employer. This transfer and assignment of work results,
intellectual property and related rights is worldwide, unlimited in time,
unrestricted in scope and encompasses all rights and exploitations, whether
currently known or arising in the future. To the extent certain jurisdictions do
not provide for the assignability of work results or intellectual property and
related rights, the Employee grants to the Employer a worldwide, irrevocable,
exclusive, transferable and sublicensable, royalty-free, unlimited and
unrestricted license to use, modify, develop and exploit such work results,
intellectual property and related rights, including the right to sub-license, is
hereby granted by the Employee to the Employer. Compensation for the transfer of
these Intellectual Property Rights or their licensing, respectively, is included
in the Base Salary according to Section 13.1.
 
32

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To the extent permitted by law, the Employee agrees no to put forward any claim
regarding possible moral rights in connection with any work under this section.
The Employee acknowledges that the Base Salary includes reasonable compensation
for the fact that the inventions and intellectual property rights referred to
above will vest in the Employer by operation of law or transfer by the Employee
of such rights.
 
The Employee will, upon first demand of the Employer, execute any documents,
declarations, deeds of assignment or similar as may be requested by the Employer
for evidence or perfection of the above transfer and assignment.
 
Article 22: DATA PROTECTION AND PRIVACY
 
The Employer will comply with the Swiss Data Protection Act. The Employer will
only collect personal data of the Employee insofar as necessary for the
execution and performance of the Employment and the obligations resulting
therefrom or if required to do so by law.
 
The Employee herewith agrees that personal data may be transferred to affiliated
companies of the Employer and further third parties within and outside of
Switzerland if such transfer is required in connection with the Employment, the
execution of the Employment Agreement, the performance of any obligations
resulting from the Employment, the work organization of the Employer or
otherwise required by Swiss law or the laws of any other relevant jurisdiction.
The Employer shall ensure that personal data will be secured against
unauthorized access if a transfer is contemplated. The Employee has the right to
withdraw his consent at any time.
 
Article 23: NON-COMPETITION AND NON-SOLICITATION
 
The Employee agrees that during the Employment Period and for a period of two
years after termination of the Employment Period (the “Restricted Period”) he
will not directly, indirectly, once, occasionally or professionally, under his
name or under a third party name, on behalf of his own or on behalf of third
parties compete with the Employer within the scope of its business. The Employee
furthermore agrees that he will not participate in any way in any enterprise
competing with the Employer, and he also agrees not to found or assist any
business being active in the same line of business as the Employer. This
non-compete undertaking shall be effective for the whole territory of the
business activities of the Employer and each of its group companies during the
Employment and at the moment of termination of the Employment.
 
33

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During Restricted Period the Employee shall abstain from, directly or indirectly
via any company owned or controlled by the Employee, enticing away, soliciting
or interfering with (i) any personnel from the Employer or (ii) any person who
is or was a client of the Employer.
 
In the event the Employee breaches any of the obligations pursuant to this
Section Article 23: a penalty of CHF 30,000 shall be owed by the Employee to the
Employer for any such breach. However, the payment of the penalty does not
release the Employee from further complying with the respective obligation. In
addition, the Employer reserves the right to claim compensation for damages as
well as the right to the remedy of specific performance.
 
Article 24: CONFIDENTIALITY
 
The Employee will have access to confidential and proprietary information
relating to the business and operations of the Employer and their clients. Such
confidential and proprietary information constitutes a unique and valuable asset
of the Employer and their acquisition required great time and expense. The
disclosure or any other use of such confidential or proprietary information,
other than for the sole benefit of the Employer, would be wrongful and would
cause irreparable harm to the Employer or other group companies.
 
The Employee is under a strict duty to keep all confidential and proprietary
information strictly and permanently confidential and, accordingly, shall not
during the Employment or after termination of the Employment directly or
indirectly use for any purpose other than for the sole benefit of the Employer,
or disclose or permit to be disclosed to any third person or entity, any
confidential or proprietary information without first obtaining the written
consent of the responsible executive and the party concerned, if applicable,
except if required to do so by law.
 
34

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

 
The Employee may not make any statement to the media related to confidential
information, as far as he is not authorized to do so by the responsible
executive.
 
Upon termination of this Employment Agreement for any reason, the Employee shall
return to the Employer all files and any company documents concerning the
business of the Employer in his possession or open to his access, including all
designs, customer and price lists, printed material, documents, sketches, notes,
drafts as well as copies thereof, regardless whether or not the same are
originally furnished by the Employer.
 
The Employer reserves the right to the remedy of specific performance of the
Employee’s obligations in addition to any damages.
 
Article 25: MISCELLEANOUS
 
25.1
Entire Agreement

 
This Employment Agreement constitutes the complete Employment Agreement between
the Parties regarding its subject matter and supersedes all prior oral and/or
written agreements, representations and/or communications, concerning the
subject matter hereof.
 
25.2
Severability

 
If any provision of this Employment Agreement is held to be unenforceable for
any reason, it shall be adjusted rather than voided, if possible, in order to
achieve the intent of the Parties to this Employment Agreement to the fullest
extent possible. In any event, all other provisions of this Employment Agreement
shall remain valid and enforceable to the fullest extent possible.
 
25.3
Amendments

 
Any amendments or supplementation of this Employment Agreement shall require
written form. The written form may be dispensed only in writing.
 
25.4
Governing Law and Jurisdiction

 
This Employment Agreement shall be construed in accordance with and governed by
Swiss law (without giving effect to the principles of conflicts of law).
 
Any dispute, controversy or claim arising out of or in connection with this
Employment Agreement, including the validity, invalidity, breach or termination
thereof, and including tort claims, shall be exclusively submitted to and
determined by the courts of Neuchâtel, Switzerland, without prejudice to a
possible appeal to the Swiss Federal Tribunal.
 
35

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25.5
Execution

 
The Parties have duly executed this Agreement in two originals.
 
25.6
Waiver

 
The waiver by either Party of any breach of this Agreement by the other Party
shall not be effective unless in writing, and no such waiver shall operate or be
construed as the waiver of the same or another breach on a subsequent occasion.
 
25.7
Survival

 
Sections XII through XV, inclusive, shall survive and continue in full force in
accordance with their terms notwithstanding the expiration or termination of
this Agreement or the Employment Period.
 
[Signature Page Follows]
 
36

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Signatures

Intersema Sensoric SA (Employer)
 

           

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

Place, date    

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

[name]     [title]

 

           

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

Place, date    

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

[name]     [title]

 
Mr. Manfred Knütel (Employee)
 

           

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

Place, date    

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

Mr. Manfred Knütel

 
37

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

Execution Version
 
INTERSEMA SENSORIC SA
 
EMPLOYMENT AGREEMENT
 
38

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

EMPLOYMENT AGREEMENT
 
between
 

INTERSEMA SENSORIC SA Employer
Chemin Chapons-des-Prés 11
 
Bevaix, Neuchâtel
Switzerland
 

 
and
 

Mr. Hans-Peter Salvisberg Employee
Schlossallee 9 ; CH 3280 Greng (Switzerland)
 

 
The Employer and the Employee are also referred to as “Party” or “Parties”.
 
39

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TABLE OF CONTENTS

I.
Beginning of Employment
27
II.
Position
27
A.
Function
27
B.
Duties and Responsibilities
27
III.
Place of Work
27
IV.
Compensation
27
A.
Base Salary
27
B.
Bonus
28
C.
Acknowledgements of the Employee
28
a)
Nature of Additional Payments
28
b)
Conditionality
28
D.
No other Compensation
28
E.
Deductions
29
V.
Expenses
29
VI.
Company Car
29
VII.
TERM and Termination
30
A.
Term
30
B.
Termination for Valid Reasons
30
VIII.
Working Time
30
IX.
Vacation
30
X.
Holidays and Compelling Absence
31
A.
Holidays
31
B.
Compelling Absences
31
XI.
Illness, Accident and Death
31
A.
Medical Certificate
31
B.
Daily Allowance Insurance
32
C.
Occupational and Non-occupational Accidents
32
XII.
Intellectual Property Rights
32
XIII.
Data Protection and Privacy
33
XIV.
Non-Competition and Non-Solicitation
33
XV.
Confidentiality
34
XVI.
Miscelleanous
35
A.
Entire Agreement
35
B.
Severability
35
C.
Amendments
35
D.
Governing Law and Jurisdiction
35
E.
Execution
36
F.
Waiver
36
G.
Survival
36

40

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EMPLOYMENT AGREEMENT
 
Article 26: BEGINNING OF EMPLOYMENT
 
The employment of the Employee (the “Employment”) starts on 28 December 2007
(the “Commencement Date”).
 
Article 27: POSITION
 
27.1
Function

 
The Employee shall assume the function as General Manager Administration.
 
27.2
Duties and Responsibilities

 
It is understood that the duties and responsibilities arising out of the above
function includes all tasks customarily or reasonably incidental to such
function and those expressly mentioned in this Employment Agreement.
 
Upon consultation with the Employee, the Employer may assign to the Employee any
additional or new duties or responsibilities as deemed reasonable or appropriate
by the Employer in the course and fulfilment of its business.
 
The Employee shall carefully perform all work assigned to the Employee, and
loyally safeguard the Employer’s legitimate interests.
 
The Employee is not entitled to work for any third party or to engage in any
gainful employment without the written approval of the Employer.
 
Article 28: PLACE OF WORK
 
The Employee’s principal place of work shall presently be in Bevaix, Neuchâtel
(Switzerland) at the main office of the Employer. The Employer may request the
Employee to travel in the course of the Employment in order to perform his
obligations and duties under the Employment Agreement, but such travel shall be
limited and reasonably agreed among the Employer and the Employee in advance.
 
Article 29: COMPENSATION
 
29.1
Base Salary

 
The Employee shall receive an annual base salary of CHF 185,000 gross (the “Base
Salary”), payable in twelve monthly instalments at the end of the month, plus
any mandatory contributions for family and children allowances.
 
41

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29.2
Bonus

 
The Employee shall be entitled to a discretionary bonus payment of up to twenty
percent (20%) of the Base Salary (the “Bonus”) in accordance with the Employer’s
bonus plan (the “Bonus Plan”) as amended from time to time by the Employer. The
goals for the Bonus shall be established and mutually agreed to by the Employer
and the Employee at the beginning of each fiscal year.
 
29.3
Acknowledgements of the Employee

 
(a)
Nature of Additional Payments

 
The Employee acknowledges and agrees that any entitlements granted and payments
made in addition to the Base Salary, including, but not limited to any bonuses,
participations, or gratuities of the Employer or another group company (the
“Additional Payments”) are not part of the salary legally or contractually owed
by the Employer and are made at full discretion of the Employer or the company
granting such bonus, participation or gratuity, respectively. Any Additional
Payments shall not create any obligation of the Employer or other group company
to make such Additional Payments in future and shall not create any right or
entitlement of the Employee to such Additional Payments in future even if paid
over consecutive years and without express reservation.
 
(b)
Conditionality

 
Any Additional Payments, if any, are subject to the condition that no notice of
termination has been given under this Employment Agreement by the later of the
end of the respective calendar year. In case of a termination of the Employment
Agreement by the Employer, this condition is deemed to be fulfilled except where
the termination was made by the Employer for cause (not limited to valid reasons
entitling the Employer to a termination without notice pursuant to article 337
Swiss Code of Obligations). Further conditions may be defined in the respective
documents governing such Additional Payments.
 
29.4
No other Compensation

 
The Employee acknowledges and agrees that he shall not be entitled to receive
any other compensation or benefit of any nature from the Employer except as
expressly provided for in this Employment Agreement.
 
42

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29.5
Deductions

 
From the salary (as defined by the applicable laws and regulations, which may
include bonuses, allowances, participations and other benefits in addition to
the Base Salary) any portions of Employee’s social security contributions (AHV
(Old-age and surviving dependents insurance)/IV (Disability insurance)/EO (Wage
compensation), ALV (Unemployment insurance), UV (Accidence insurance), premiums
to pension schemes (cp. Regulations of the pension fund) and withholding taxes,
if any, will be deducted and withheld by the Employer from the payments made to
the Employee.
 
Article 30: EXPENSES
 
The Employee shall be entitled to reimbursement by the Employer of out-of-pocket
business expenses (including mobile phone expenses) reasonably incurred by the
Employee during the Employment in the performance of the Employee’s duties under
this Employment Agreement, including expenses which may be charged to a company
credit card, subject to (i) the submission of relevant vouchers and receipts and
(ii) the compliance with the reimbursement policies of the Employer possibly
established and amended from time to time. The Employee shall further be
entitled to reimbursement by the Employer of out-of-pocket business expenses by
the Employee during the Employment in the performance of the Employee’s duties
under this Employment Agreement, absent submission of relevant vouchers and
receipts, at a fixed rate of CHF 15,000 per year.
 
Article 31: COMPANY CAR
 
Throughout the course of this Employment the Employee shall be entitled to use
the existing company car (Jaguar XJ8) free of charge. The Employee is entitled
to use the car for private or business purposes. The Employee shall be
reimbursed for petrol expenses for business as well as for private journeys.
However, the reimbursement is subject to the submission of relevant vouchers and
receipts. The conclusion and the expenses for the comprehensive cover insurance,
the motor vehicle tax, maintenance, tires, vignette will be paid by the
Employer.
 
43

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Article 32: TERM AND TERMINATION
 
32.1
Term

 
The Employment shall be of a definite time (the “Employment Period”) commencing
on the Commencement Date and ending on the date that is two (2) years after the
Commencement Date.
 
32.2
Termination for Valid Reasons

 
The Employment Agreement may be terminated by either Party for valid reasons
pursuant to Article 337 of the Swiss Code of Obligations at any time.
 
Article 33: WORKING TIME
 
The weekly working hours for the Employee are at least 40 hours per week.
 
The Employee shall work extra hours and overtime, if required and to the extent
such work can reasonably be expected in good faith.
 
The Base Salary as defined in Section 13.1 hereunder includes any and all
remuneration for such overtime, and the Employee shall have no entitlement to
additional compensation for such overtime, whether in cash nor in kind.
 
Article 34: VACATION
 
The Employee is entitled to twenty-five (25) business days of vacation per
calendar year.
 
The Employer has the right to determine when the Employee shall take vacation.
However, the Employer shall take the Employees requests in due consideration. If
the Employee requests to take vacation he shall reasonably prior to the intended
vacation inform the responsible executive. In any event the Employee shall
provide for suitable internal representation and he shall care for the ongoing
service of important affairs during his vacation.
 
The vacation entitlement is based on one complete calendar year. For the year in
which the Employment relationship begins or ends, the vacation entitlement is
calculated pro rata temporis. The Employee shall not be entitled to retain
unused vacation days in excess of an aggregate of (25) business days of
vacation.
 
44

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Article 35: HOLIDAYS AND COMPELLING ABSENCE
 
35.1
Holidays

 
On federal and cantonal Holidays the Employee is not obliged to work.
 
35.2
Compelling Absences

 
To the extent necessary or required, Employees are eligible to take time off for
compelling reasons (as specified below).
 
Compelling Absences include, but are not limited to, the following events for
which the time off as set forth below apply (stated in business days):
 

 
·
Marriage of Employee:             
2 days
         
·
Attendance of wedding of a family member or close relative:
1 day
         
·
Birth of Employee’s child:
2 days
         
·
Death or illness of:
 

 

 
·
close family member or person living in the same household: 3 days          
·
other family member: 2 day          
·
close relative or friend: 1 day

 

 
·
Moving:
1 day
         
·
Medical or dental care:
as required
         
·
Public duties:
as required

 
Compelling Absences do not constitute a ground for a deduction of the Employees’
entitlements to the Base Salary or vacation, unless the absence exceeds the time
period as set forth above.
 
Article 36: ILLNESS, ACCIDENT AND DEATH
 
36.1
Medical Certificate

 
If the Employee’s absence exceeds five business days, the Employee shall, as
soon as practicable furnish a medical certificate. However, the Employer
reserves the right to demand for a medical certificate in case of any absence,
irrespective of the length of the absence. The Employer is entitled to ask the
Employee to consult a medical examiner at the Employer’s expense.
 
45

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36.2
Daily Allowance Insurance

 
If an Employee is prevented from performing the Employee’s duties arising out of
or relating to the Employment due to illness (not deliberately self-inflicted by
the Employee) or due to an accident (not deliberately self-inflicted by the
Employee), then the Employer will continue to pay the base salary pursuant to
the collective daily allowance insurance (Taggeldversicherung) of the Employer,
provided that the conditions of the collective daily allowance insurance are
being met and that the Employee complies with the conditions of the collective
daily allowance insurance and with the directives of the Employer. In principle,
the daily allowance insurance provides for the following coverage:
 
90% of the Base Salary during up to 730 days after a waiting period of 30 days.
 
During the waiting period of 30 days 100% of the Base Salary according to
Section 13.1 is paid to the Employee.
 
The insurance premium for the daily allowance insurance is paid one half each by
the Employer and the Employee.
 
36.3
Occupational and Non-occupational Accidents

 
During the Employment the Employee is insured for occupational and
non-occupational accidents. Premiums for occupational accident insurance and
occupational sickness insurance are paid by the Employer. Premiums for
non-occupational accident insurance are paid by the Employee.
 
90% of the Base Salary is paid after a waiting period of 30 days.
 
During the waiting period of 30 days 100% of the Base Salary according to
Section 13.1 is paid to the Employee.
 
Article 37: INTELLECTUAL PROPERTY RIGHTS 
 
The Employer is entitled to all work results and all intellectual property
created by the Employee in the course of or in connection with the employment
(notwithstanding whether in pursuance or fulfilment of a contractual duty or
not, whether individually or with the assistance of any other individual or
entity), and all such work results, intellectual property and related rights
vest irrevocably in the Employer. This transfer and assignment of work results,
intellectual property and related rights is worldwide, unlimited in time,
unrestricted in scope and encompasses all rights and exploitations, whether
currently known or arising in the future. To the extent certain jurisdictions do
not provide for the assignability of work results or intellectual property and
related rights, the Employee grants to the Employer a worldwide, irrevocable,
exclusive, transferable and sublicensable, royalty-free, unlimited and
unrestricted license to use, modify, develop and exploit such work results,
intellectual property and related rights, including the right to sub-license, is
hereby granted by the Employee to the Employer. Compensation for the transfer of
these Intellectual Property Rights or their licensing, respectively, is included
in the Base Salary according to Section 13.1.
 
46

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To the extent permitted by law, the Employee agrees no to put forward any claim
regarding possible moral rights in connection with any work under this section.
The Employee acknowledges that the Base Salary includes reasonable compensation
for the fact that the inventions and intellectual property rights referred to
above will vest in the Employer by operation of law or transfer by the Employee
of such rights.
 
The Employee will, upon first demand of the Employer, execute any documents,
declarations, deeds of assignment or similar as may be requested by the Employer
for evidence or perfection of the above transfer and assignment.
 
Article 38: DATA PROTECTION AND PRIVACY
 
The Employer will comply with the Swiss Data Protection Act. The Employer will
only collect personal data of the Employee insofar as necessary for the
execution and performance of the Employment and the obligations resulting
therefrom or if required to do so by law.
 
The Employee herewith agrees that personal data may be transferred to affiliated
companies of the Employer and further third parties within and outside of
Switzerland if such transfer is required in connection with the Employment, the
execution of the Employment Agreement, the performance of any obligations
resulting from the Employment, the work organization of the Employer or
otherwise required by Swiss law or the laws of any other relevant jurisdiction.
The Employer shall ensure that personal data will be secured against
unauthorized access if a transfer is contemplated. The Employee has the right to
withdraw his consent at any time.
 
Article 39: NON-COMPETITION AND NON-SOLICITATION
 
The Employee agrees that during the Employment Period and for a period of two
years after termination of the Employment Period (the “Restricted Period”) he
will not directly, indirectly, once, occasionally or professionally, under his
name or under a third party name, on behalf of his own or on behalf of third
parties compete with the Employer within the scope of its business. The Employee
furthermore agrees that he will not participate in any way in any enterprise
competing with the Employer, and he also agrees not to found or assist any
business being active in the same line of business as the Employer. This
non-compete undertaking shall be effective for the whole territory of the
business activities of the Employer and each of its group companies during the
Employment and at the moment of termination of the Employment.
 
47

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During Restricted Period the Employee shall abstain from, directly or indirectly
via any company owned or controlled by the Employee, enticing away, soliciting
or interfering with (i) any personnel from the Employer or (ii) any person who
is or was a client of the Employer.
 
In the event the Employee breaches any of the obligations pursuant to this
Section Article 23: a penalty of CHF 30,000 shall be owed by the Employee to the
Employer for any such breach. However, the payment of the penalty does not
release the Employee from further complying with the respective obligation. In
addition, the Employer reserves the right to claim compensation for damages as
well as the right to the remedy of specific performance.
 
Article 40: CONFIDENTIALITY
 
The Employee will have access to confidential and proprietary information
relating to the business and operations of the Employer and their clients. Such
confidential and proprietary information constitutes a unique and valuable asset
of the Employer and their acquisition required great time and expense. The
disclosure or any other use of such confidential or proprietary information,
other than for the sole benefit of the Employer, would be wrongful and would
cause irreparable harm to the Employer or other group companies.
 
The Employee is under a strict duty to keep all confidential and proprietary
information strictly and permanently confidential and, accordingly, shall not
during the Employment or after termination of the Employment directly or
indirectly use for any purpose other than for the sole benefit of the Employer,
or disclose or permit to be disclosed to any third person or entity, any
confidential or proprietary information without first obtaining the written
consent of the responsible executive and the party concerned, if applicable,
except if required to do so by law.
 
48

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The Employee may not make any statement to the media related to confidential
information, as far as he is not authorized to do so by the responsible
executive.
 
Upon termination of this Employment Agreement for any reason, the Employee shall
return to the Employer all files and any company documents concerning the
business of the Employer in his possession or open to his access, including all
designs, customer and price lists, printed material, documents, sketches, notes,
drafts as well as copies thereof, regardless whether or not the same are
originally furnished by the Employer.
 
The Employer reserves the right to the remedy of specific performance of the
Employee’s obligations in addition to any damages.
 
Article 41: MISCELLEANOUS
 
41.1
Entire Agreement

 
This Employment Agreement constitutes the complete Employment Agreement between
the Parties regarding its subject matter and supersedes all prior oral and/or
written agreements, representations and/or communications, concerning the
subject matter hereof.
 
41.2
Severability

 
If any provision of this Employment Agreement is held to be unenforceable for
any reason, it shall be adjusted rather than voided, if possible, in order to
achieve the intent of the Parties to this Employment Agreement to the fullest
extent possible. In any event, all other provisions of this Employment Agreement
shall remain valid and enforceable to the fullest extent possible.
 
41.3
Amendments

 
Any amendments or supplementation of this Employment Agreement shall require
written form. The written form may be dispensed only in writing.
 
41.4
Governing Law and Jurisdiction

 
This Employment Agreement shall be construed in accordance with and governed by
Swiss law (without giving effect to the principles of conflicts of law).
 
Any dispute, controversy or claim arising out of or in connection with this
Employment Agreement, including the validity, invalidity, breach or termination
thereof, and including tort claims, shall be exclusively submitted to and
determined by the courts of Neuchâtel, Switzerland, without prejudice to a
possible appeal to the Swiss Federal Tribunal.
 
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41.5
Execution

 
The Parties have duly executed this Agreement in two originals.
 
41.6
Waiver

 
The waiver by either Party of any breach of this Agreement by the other Party
shall not be effective unless in writing, and no such waiver shall operate or be
construed as the waiver of the same or another breach on a subsequent occasion.
 
41.7
Survival

 
Sections XII through XV, inclusive, shall survive and continue in full force in
accordance with their terms notwithstanding the expiration or termination of
this Agreement or the Employment Period.
 
[Signature Page Follows]
 
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Signatures

Intersema Sensoric SA (Employer)
 

           

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Place, date    

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[name]     [title]

 

           

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Place, date    

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[name]     [title]

 
Mr. Hans-Peter Salvisberg (Employee)
 

           

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Place, date    

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Mr. Hans-Peter Salvisberg

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