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PURCHASE AND SALE AGREEMENT
BETWEEN
UNOVA, INC.,
INTERMEC TECHNOLOGIES CORPORATION
AND
INTERMEC TECHNOLOGIES S.A.
ON THE ONE PART
AND
AMTECH CORPORATION
AND
AMTECH INTERNATIONAL S.A.
ON THE OTHER PART
DATED
JUNE 11, 1998
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TABLE OF CONTENTS
ARTICLE 1
TRANSFER OF SHARES AND ASSETS IN EXCHANGE FOR CASH,
AMTECH STOCK AND THE ASSUMPTION OF LIABILITIES
1.1 Transfer of Shares. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Transfer of Assets. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 338(h)(10) Election . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 Transfers Prior to Closing. . . . . . . . . . . . . . . . . . . . . 4
(a) Transfer of CS. . . . . . . . . . . . . . . . . . . . . . . 4
(b) Transfer of Intellectual and Other Property . . . . . . . . 4
(c) Intercompany Payables and Receivables . . . . . . . . . . . 4
(d) Brazilian Notes . . . . . . . . . . . . . . . . . . . . . . 4
(e) Definition of Adjusted TSG. . . . . . . . . . . . . . . . . 4
(f) Costs of Pre-Closing Transfers. . . . . . . . . . . . . . . 5
1.6 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.7 Purchase Price and Payment. . . . . . . . . . . . . . . . . . . . . 5
(a) Determination of Purchase Price . . . . . . . . . . . . . . 5
(b) Payment of Estimated Purchase Price . . . . . . . . . . . . 6
(c) Settlement of Purchase Price. . . . . . . . . . . . . . . . 7
(d) Allocation of Purchase Price. . . . . . . . . . . . . . . . 7
1.8 Liabilities Assumed by French Subsidiary. . . . . . . . . . . . . . 8
1.9 Unassumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . 8
1.10 Right to Contest. . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.11 Nonassignable Contracts and Rights. . . . . . . . . . . . . . . . . 10
1.12 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . 11
i
1.13 Certain Other Transfers . . . . . . . . . . . . . . . . . . . . . . 11
1.14 Resignation of Board Member . . . . . . . . . . . . . . . . . . . . 12
1.15 Lease of Dallas Real Property . . . . . . . . . . . . . . . . . . . 12
ARTICLE 2
TRANSFER DATE, CLOSING DATE AND CLOSING
2.1 Transfer Date, Closing Date and Closing . . . . . . . . . . . . . . 13
2.2 Notice and Right to Cure. . . . . . . . . . . . . . . . . . . . . . 13
2.3 Reconciliation of Cash. . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLING ENTITIES
3.1 Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Due Organization and Qualification. . . . . . . . . . . . . 15
(b) Power and Authority to Conduct Business . . . . . . . . . . 15
(c) Power and Authority to Enter Into Agreements. . . . . . . . 15
(d) Due Execution and Enforceability. . . . . . . . . . . . . . 15
(e) Subsidiaries and Other Equity Investments . . . . . . . . . 16
(f) Articles and By-laws. . . . . . . . . . . . . . . . . . . . 16
(g) Capitalization and Shareholders . . . . . . . . . . . . . . 16
3.2 Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) December Balance Sheet. . . . . . . . . . . . . . . . . . . 16
(b) 1996 Financials . . . . . . . . . . . . . . . . . . . . . . 16
(c) Events Subsequent to December Balance Sheet . . . . . . . . 17
(d) Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 17
(e) Financial Resources of Amtech . . . . . . . . . . . . . . . 17
3.3 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . 18
ii
3.4 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.5 Mortgages, Security Interests, Liens and Other
Encumbrances of Title . . . . . . . . . . . . . . . . . . . . . . . 18
3.6 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Owned Real Property . . . . . . . . . . . . . . . . . . . . 19
(b) Realty Leases (as Lessee) . . . . . . . . . . . . . . . . . 19
(c) Violation of Applicable Laws or Restrictive Covenants . . . 19
(d) Governmental Plans. . . . . . . . . . . . . . . . . . . . . 19
(e) Construction, Condemnation and Access . . . . . . . . . . . 19
(f) Environmental Matters . . . . . . . . . . . . . . . . . . . 19
(g) Utilities . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.7 Right to Use Properties and Assets. . . . . . . . . . . . . . . . . 21
3.8 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . 21
(a) Sales Orders, Bids and Proposals. . . . . . . . . . . . . . 21
(b) Purchase Orders . . . . . . . . . . . . . . . . . . . . . . 21
(c) Sales Representative, Distributor and Dealer Agreements . . 21
(d) Personal Property Leases (As Lessee). . . . . . . . . . . . 21
(e) Noncompetition Agreements or Covenants. . . . . . . . . . . 21
(f) Confidential Nondisclosure Agreements . . . . . . . . . . . 21
(g) Consultant Agreements . . . . . . . . . . . . . . . . . . . 22
(h) Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . 22
(i) Powers of Attorney; Proxies . . . . . . . . . . . . . . . . 22
(j) Letters of Credit, Surety, Bid and Performance Bonds. . . . 22
(k) Derivatives . . . . . . . . . . . . . . . . . . . . . . . . 22
(l) Major Customers and Suppliers . . . . . . . . . . . . . . . 22
(m) Contracts with Affiliates . . . . . . . . . . . . . . . . . 23
(n) Other Contracts . . . . . . . . . . . . . . . . . . . . . . 23
(o) Contract Defaults . . . . . . . . . . . . . . . . . . . . . 23
3.9 Suitability and Good Repair . . . . . . . . . . . . . . . . . . . . 23
3.10 Patents, Trade Names, Trademarks, Service Marks and Copyrights. . . 23
(a) Intellectual Property Rights. . . . . . . . . . . . . . . . 23
(b) Licenses of Intellectual Property Rights To or
From Third Parties. . . . . . . . . . . . . . . . . . . . . 24
(c) No Infringement . . . . . . . . . . . . . . . . . . . . . . 24
(d) Registration and Maintenance Fees . . . . . . . . . . . . . 24
3.11 Patent, Trade Name, Trademark, Service ▇▇▇▇, or Copyright
Infringement and Indemnification. . . . . . . . . . . . . . . . . . 24
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3.12 Confidential Information or Trade Secrets . . . . . . . . . . . . . 24
3.13 Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Definition. . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Performance; Documentation. . . . . . . . . . . . . . . . . 25
(c) Development . . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Protection of TSG Software. . . . . . . . . . . . . . . . . 26
3.14 Product and Service Warranties. . . . . . . . . . . . . . . . . . . 26
3.15 Employees; Employee Benefits. . . . . . . . . . . . . . . . . . . . 26
(a) Employees; Recent Terminations. . . . . . . . . . . . . . . 26
(b) Indebtedness to Employees . . . . . . . . . . . . . . . . . 26
(c) Loans or Advances to Employees. . . . . . . . . . . . . . . 26
(d) Collective Bargaining Agreements. . . . . . . . . . . . . . 26
(e) Other Labor Matters . . . . . . . . . . . . . . . . . . . . 27
(f) Employee Benefit Plans. . . . . . . . . . . . . . . . . . . 27
(g) Employment Contracts. . . . . . . . . . . . . . . . . . . . 27
(h) Open Employment Requisitions. . . . . . . . . . . . . . . . 27
3.16 Pending or Threatened Claims, Litigation and Governmental
Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.17 Judgments, Orders and Consent Decrees . . . . . . . . . . . . . . . 28
3.18 Compliance With Laws. . . . . . . . . . . . . . . . . . . . . . . . 28
3.19 Franchises, Permits, Etc. . . . . . . . . . . . . . . . . . . . . . 28
3.20 Economic Sanctions and Questionable Payments. . . . . . . . . . . . 28
3.21 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.22 Insurance and Banking . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Insurance Policies. . . . . . . . . . . . . . . . . . . . . 29
(b) Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . 30
3.23 Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.24 No Breach of Statute or Contract. . . . . . . . . . . . . . . . . . 30
3.25 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . 30
3.26 True and Accurate Schedules . . . . . . . . . . . . . . . . . . . . 30
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3.27 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.28 Duty of the Selling Entities to Make Inquiry. . . . . . . . . . . . 30
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UNOVA, INTERMEC AND FRENCH SUBSIDIARY
4.1 Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Due Organization. . . . . . . . . . . . . . . . . . . . . . 32
(b) Power and Authority to Enter Into Agreement . . . . . . . . 32
(c) Due Execution and Enforceability. . . . . . . . . . . . . . 32
4.2 Claims, Litigation and Governmental Proceedings . . . . . . . . . . 32
4.3 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . 32
4.4 No Breach of Statute or Contract. . . . . . . . . . . . . . . . . . 33
4.5 Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.6 Sufficient Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.7 Title to UNOVA Shares . . . . . . . . . . . . . . . . . . . . . . . 33
4.8 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 5
CONDUCT OF BUSINESS PENDING CLOSING DATE
5.1 Full Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.2 Carry On In Regular Course. . . . . . . . . . . . . . . . . . . . . 34
5.3 No Increase in Compensation or Benefits . . . . . . . . . . . . . . 34
5.4 Sales Orders, Bids and Proposals. . . . . . . . . . . . . . . . . . 35
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5.5 Purchase Orders . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.6 Patent, Trademark, Trade Name, Copyright and Service
▇▇▇▇ Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.7 Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.8 Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . 35
5.9 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.10 Other Contracts and Commitments . . . . . . . . . . . . . . . . . . 35
5.11 Insurance, Maintenance and Repair . . . . . . . . . . . . . . . . . 36
5.12 Preservation of Organization. . . . . . . . . . . . . . . . . . . . 36
5.13 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.14 Compliance With Laws. . . . . . . . . . . . . . . . . . . . . . . . 36
5.15 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.16 Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . 36
5.17 Nondisclosure by the Buying Entities. . . . . . . . . . . . . . . . 36
5.18 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 6
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYING ENTITIES TO CLOSE
6.1 Representations and Warranties True at Closing Date . . . . . . . . 38
6.2 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . 38
6.3 Compliance With Agreement . . . . . . . . . . . . . . . . . . . . . 38
6.4 Secretary's Certificate . . . . . . . . . . . . . . . . . . . . . . 38
6.5 Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . 38
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6.6 Certificates of Good Standing . . . . . . . . . . . . . . . . . . . 38
6.7 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.8 Proceedings and Instruments Satisfactory. . . . . . . . . . . . . . 39
6.9 Opinion of Counsel for Amtech . . . . . . . . . . . . . . . . . . . 39
6.10 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . 39
6.11 Nonsolicitation Agreements. . . . . . . . . . . . . . . . . . . . . 39
6.12 Elimination of Liens. . . . . . . . . . . . . . . . . . . . . . . . 39
6.13 Resignation of Directors and Officers . . . . . . . . . . . . . . . 39
6.14 Certified Copies of Articles and By-laws. . . . . . . . . . . . . . 39
ARTICLE 7
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLING ENTITIES TO CLOSE
7.1 Representations and Warranties True at Closing Date . . . . . . . . 40
7.2 Compliance With Agreement . . . . . . . . . . . . . . . . . . . . . 40
7.3 Secretary's Certificate . . . . . . . . . . . . . . . . . . . . . . 40
7.4 Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . 40
7.5 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.6 Proceedings and Instruments Satisfactory. . . . . . . . . . . . . . 40
7.7 Opinion of Counsel for UNOVA. . . . . . . . . . . . . . . . . . . . 41
7.8 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . 41
7.9 Dallas Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.10 Performance Bonds . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.11 Fairness Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . 41
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ARTICLE 8
COVENANTS OF THE PARTIES
8.1 Access to Books and Records . . . . . . . . . . . . . . . . . . . . 42
8.2 Further Instruments and Assurances. . . . . . . . . . . . . . . . . 42
8.3 Nondisclosure by Amtech . . . . . . . . . . . . . . . . . . . . . . 42
8.4 Litigation Cooperation. . . . . . . . . . . . . . . . . . . . . . . 42
8.5 Certain Employee Matters. . . . . . . . . . . . . . . . . . . . . . 43
(a) Employment and Employee Benefits. . . . . . . . . . . . . . 43
(b) Certain Retained Responsibility . . . . . . . . . . . . . . 43
(c) WARN Act. . . . . . . . . . . . . . . . . . . . . . . . . . 43
(d) Certain Severance Liability . . . . . . . . . . . . . . . . 43
8.6 Collection and Repurchase of Accounts Receivable. . . . . . . . . . 43
(a) Collection of Accounts Receivable . . . . . . . . . . . . . 44
(b) Repurchase of Accounts Receivable . . . . . . . . . . . . . 44
8.7 Change of Amtech Name . . . . . . . . . . . . . . . . . . . . . . . 45
8.8 Performance Bonds . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.9 Collection of Brazilian Notes . . . . . . . . . . . . . . . . . . . 45
8.10 Immunity from Infringement. . . . . . . . . . . . . . . . . . . . . 46
8.11 Thailand and BEFIC Inventory. . . . . . . . . . . . . . . . . . . . 46
8.12 Texas Rangers . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.13 Agreements Regarding Certain Contracts. . . . . . . . . . . . . . . 46
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ARTICLE 9
NONCOMPETITION AND NONSOLICITATION AGREEMENT
9.1 Noncompetition Agreement. . . . . . . . . . . . . . . . . . . . . . 48
9.2 Limitations on Noncompetition Agreement . . . . . . . . . . . . . . 48
9.3 Nonsolicitation . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.4 Definition of Competitive Business. . . . . . . . . . . . . . . . . 49
9.5 Definition of UNOVA Company . . . . . . . . . . . . . . . . . . . . 49
9.6 Injunctive and Equitable Relief . . . . . . . . . . . . . . . . . . 49
9.7 Benefit of Noncompetition Agreement . . . . . . . . . . . . . . . . 50
ARTICLE 10
TERMINATION
10.1 Permitted Termination . . . . . . . . . . . . . . . . . . . . . . . 51
10.2 Break-up Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.3 Notice of Termination . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification by Amtech and AI. . . . . . . . . . . . . . . . . . 53
(a) Misrepresentation or Breach of Warranty . . . . . . . . . . 53
(b) Breach of Covenant or Agreement . . . . . . . . . . . . . . 53
(c) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(d) Product Liability . . . . . . . . . . . . . . . . . . . . . 53
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(e) Employee Claims . . . . . . . . . . . . . . . . . . . . . . 53
(f) Unassumed Liabilities . . . . . . . . . . . . . . . . . . . 54
(g) Material Contract Defaults. . . . . . . . . . . . . . . . . 54
(h) Violation of Laws . . . . . . . . . . . . . . . . . . . . . 54
(i) Environmental Liability . . . . . . . . . . . . . . . . . . 54
(j) Infringement. . . . . . . . . . . . . . . . . . . . . . . . 54
(k) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 54
(l) AMGT Liabilities. . . . . . . . . . . . . . . . . . . . . . 54
(m) GEC Alsthom Contract. . . . . . . . . . . . . . . . . . . . 54
(n) WaveNet Liabilities . . . . . . . . . . . . . . . . . . . . 54
(o) Change of Control Payments. . . . . . . . . . . . . . . . . 55
11.2 Indemnification by UNOVA and Intermec . . . . . . . . . . . . . . . 55
(a) Misrepresentation or Breach of Warranty . . . . . . . . . . 55
(b) Breach of Covenant or Agreement . . . . . . . . . . . . . . 55
(c) Assumed Liabilities . . . . . . . . . . . . . . . . . . . . 55
(d) Performance Bonds . . . . . . . . . . . . . . . . . . . . . 55
(e) Post Closing Operations . . . . . . . . . . . . . . . . . . 55
(f) Product Liability . . . . . . . . . . . . . . . . . . . . . 55
(g) Change of Control Payments. . . . . . . . . . . . . . . . . 55
11.3 Claims for Reimbursement. . . . . . . . . . . . . . . . . . . . . . 55
11.4 Defense and Settlement of Third-Party Claims. . . . . . . . . . . . 56
11.5 Limitations on Indemnification. . . . . . . . . . . . . . . . . . . 58
(a) Duration. . . . . . . . . . . . . . . . . . . . . . . . . . 58
(b) Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
11.6 Actual Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . 59
11.7 Consequential Damages; Mitigation . . . . . . . . . . . . . . . . . 59
11.8 Exclusive Remedy. . . . . . . . . . . . . . . . . . . . . . . . . . 59
11.9 Indemnity Payments. . . . . . . . . . . . . . . . . . . . . . . . . 59
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ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Public Statements and Press Releases. . . . . . . . . . . . . . . . 60
12.2 Costs and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 60
12.3 Amendment and Modification. . . . . . . . . . . . . . . . . . . . . 60
12.4 No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
12.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(a) Amtech or AI. . . . . . . . . . . . . . . . . . . . . . . . 61
(b) UNOVA, Intermec or French Subsidiary. . . . . . . . . . . . 61
12.6 Counterparts and Facsimile. . . . . . . . . . . . . . . . . . . . . 61
12.7 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.8 Schedules and Exhibits. . . . . . . . . . . . . . . . . . . . . . . 61
12.9 Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.11 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.12 No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . 62
12.13 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.14 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.15 Resolution of Disputes. . . . . . . . . . . . . . . . . . . . . . . 62
12.16 Covenants Regarding Remaining Amtech Subsidiaries . . . . . . . . . 62
SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
LIST OF EXHIBITS TO PURCHASE AND SALE AGREEMENT. . . . . . . . . . . . . . 64
LIST OF SCHEDULES TO PURCHASE AND SALE AGREEMENT . . . . . . . . . . . . . 65
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made and entered into on the 11th day of June, 1998 (the
"Agreement Date"), between UNOVA, INC. ("UNOVA"), a Delaware corporation, and
INTERMEC TECHNOLOGIES CORPORATION ("Intermec"), a Washington corporation and
a wholly-owned subsidiary of UNOVA, and INTERMEC TECHNOLOGIES S.A. ("French
Subsidiary"), a French corporation and a wholly-owned subsidiary of Intermec,
on the one part (UNOVA, Intermec and French Subsidiary are sometimes referred
to collectively as the "Buying Entities"), and AMTECH CORPORATION ("Amtech"),
a Texas corporation, and AMTECH INTERNATIONAL S.A. ("AI"), a French
corporation, on the other part (collectively, the "Selling Entities").
UNOVA, Intermec, French Subsidiary, Amtech and AI are sometimes referred to
collectively as the "Parties" and individually as a "Party."
W I T N E S S E T H:
WHEREAS, Amtech Systems Corporation ("ASC"), a Delaware corporation;
Amtech World Corporation ("AWC"), a Delaware corporation (including its
interest in its majority-owned subsidiary, Amtech Systems Hong Kong Ltd.
("ASHK"), a Hong Kong limited liability company, but excluding its direct
subsidiary, CardKey Sicherssysteme GmbH ("CS"), a German limited liability
company); AMGT Corporation ("AMGT"), a Delaware corporation; and AI are
referred to collectively as "TSG";
WHEREAS, TSG is engaged in the business of radio frequency
identification technology design, development and application, including
without limitation wireless data systems for electronic toll collection, rail
and motor fleet tracking, and access control to parking and other structures,
and the manufacture, sale and servicing of such applications, including
without limitation software development, systems integration and transaction
processing services (the "Business");
WHEREAS, Intermec desires to purchase from Amtech, and Amtech desires to
sell to Intermec, the outstanding capital stock of ASC, AWC (excluding CS)
and AMGT (collectively, the "Purchased Subsidiaries"); and French Subsidiary
desires to purchase from AI, and AI desires to sell to French Subsidiary,
substantially all of the assets of AI, all upon the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual benefits
to be derived from this Agreement and the transactions provided for in this
Agreement, the Parties agree as follows:
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ARTICLE 1
TRANSFER OF SHARES AND ASSETS IN EXCHANGE FOR
CASH, AMTECH STOCK AND THE ASSUMPTION OF LIABILITIES
1.1 TRANSFER OF SHARES. Subject to the "Pre-Closing Transfers" (as
defined in Section 1.5), on the "Closing Date" (as defined in Section 2.1)
but effective as of the "Transfer Date" (as defined in Section 2.1), Amtech
shall (and shall cause any other person or entity that owns any qualifying
shares in any of the Purchased Subsidiaries to) validly sell, transfer,
assign and deliver to Intermec, free and clear of all "Liens" (as defined in
Section 3.5), all of the outstanding shares of capital stock (the "Shares")
of each of the Purchased Subsidiaries.
1.2 TRANSFER OF ASSETS. Except as otherwise provided in Section 1.3,
on the Closing Date but effective as of the Transfer Date, AI shall validly
sell, transfer, assign, grant, convey and deliver to French Subsidiary, free
and clear of all Liens other than "Permitted Liens" (as defined in Section
3.5), all of AI's right, title and interest in and to its properties, rights
and assets of every kind, nature and description, whether tangible or
intangible and wherever situated (such properties, rights and assets are
referred to as the "Purchased Assets"), including without limitation the
goodwill of its business and the name "Amtech International." Except as
otherwise provided in Section 1.3, the Purchased Assets shall include without
limitation the following: cash on hand and in banks, bank accounts, trade
and other accounts, notes and drafts receivable; leases, leasehold
improvements and other interests in realty; machinery and equipment,
including test equipment and fully depreciated equipment; tools and tooling,
including any rights in respect of tools and tooling owned by AI and in the
possession of others; supplies on hand; inventories of raw materials,
work-in-process, finished goods, spare parts, replacement and component
parts, including without limitation any such inventory identified as excess
or obsolete; all rights, if any, held by AI in respect of any customer
furnished materials; motor vehicles; transportation, packing and delivery
equipment and supplies; office equipment and supplies; packaging material
and sales literature; furniture and furnishings; indemnity, fidelity and
contract bonds issued by third parties in favor of AI; causes of action,
suits, judgments, claims and demands of any nature; franchises, licenses,
approvals and permits (to the extent transferable); computer programs and
software; research, engineering and technical designs, specifications,
drawings, databases, know-how, research and development files, laboratory
books and information; customer and vendor lists; trademarks, trade names,
service marks, copyrights, patents, licenses, processes, inventions,
formulae, trade secrets and royalties, including all registrations,
applications and related international priority rights and all rights to ▇▇▇
for past infringement; manufacturer and seller warranties on any goods,
fixtures, or services provided to AI; advance payments, prepaid items and
expenses, rights of offset and credits of all kinds; investments;
advertising materials, catalogs, price lists, mailing lists; photographs,
production data, sale and promotional materials and records, purchasing
materials and records; bids and sales and service proposals,
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including any rights to revoke or withdraw the same; purchase orders and
purchase commitments; utility and sundry deposits, customer orders and
customer contracts; medical, safety and health supplies; leases for
equipment and all other leases, contracts and other agreements made on behalf
of AI or which inure primarily to its benefit; and all rights and
entitlements of AI.
1.3 EXCLUDED ASSETS. Notwithstanding anything in this Agreement to
the contrary, the Purchased Assets shall not include any right, title or
interest in or to any of the following properties, rights or assets of AI
(collectively, the "Excluded Assets"):
(a) Any and all claims for refunds, carrybacks or
carryforwards in connection with income or other "Taxes" (as defined in
Section 3.21) for tax periods ending on or prior to the Transfer Date and all
returns and other documents filed by AI with any taxing authority;
(b) Any intercompany receivable balance due from any
"Affiliate" (as defined in Section 3.8(m)) of AI;
(c) All insurance policies and self-insurance programs and
any coverage or other rights under such policies and self-insurance programs,
except for any insurance policies identified on Schedule 3.22(a) as "Assumed
Insurance Policies";
(d) All claims, rights and proceeds under any compensation,
benefit or profit sharing plan generally applicable to present or former
employees of AI, or under the trust agreements related to such plans, except
to the extent the related liability is specifically assumed by French
Subsidiary pursuant to this Agreement;
(e) Any property, right or asset arising from and directly
related to the defense, release, compromise, discharge or satisfaction of any
of the "Unassumed Liabilities" (as defined in Section 1.9) unless such
property, right or asset is included on the "Final Closing Balance Sheet" (as
defined in Section 1.7(a));
(f) All books, records, files and data pertaining to any of
the Excluded Assets or any of the Unassumed Liabilities;
(g) Any rights of AI under this Agreement;
(h) AI's franchise to be a corporation and its articles of
incorporation and by-laws (or their substantial equivalents), as amended and
in effect, other corporate records pertaining to its corporate existence and
all books and records of a nature required by law to be maintained by AI; and
(i) Those certain properties, rights and assets of AI set
forth on Exhibit A-1.
3
1.4 338(h)(10) ELECTION. As soon as practicable following the
Closing Date, the Parties shall (i) cooperate in the preparation and filing
of an election (the "Election") under Section 338(h)(10) or 338(g) or both of
the Internal Revenue Code of 1986, as amended (the "Code") with respect to
the purchase and sale of the Shares (including the deemed purchase of the
shares of ASHK), and (ii) take all such action as is required in order to
give effect to the Election for state, local and foreign tax purposes to the
greatest extent permitted by law. Amtech shall pay all Taxes attributable to
the making of the Election.
1.5 TRANSFERS PRIOR TO CLOSING. Prior to the time of "Closing" (as
defined in Section 2.1) on the Closing Date, Amtech shall (and, if
applicable, shall cause any of its subsidiaries that are not members of TSG
(collectively, the "Remaining Amtech Subsidiaries") to) take the actions
described in paragraphs (a) through (d) below (the "Pre-Closing Transfers"):
(a) TRANSFER OF CS. AWC shall validly transfer to Amtech,
one of the Remaining Amtech Subsidiaries or a third party all of the interest
of AWC in CS.
(b) TRANSFER OF INTELLECTUAL AND OTHER PROPERTY. Amtech
shall (and shall cause the relevant Remaining Amtech Subsidiaries, if
applicable, to) validly transfer to ASC all assets, including without
limitation (i) all patents, patent applications, trade names, trademarks,
trademark registrations and trademark applications, service marks, service
▇▇▇▇ registrations and service ▇▇▇▇ applications, copyright registrations and
copyright registration applications, both domestic and foreign, and (ii)
business records relevant to TSG or the Business, in each case, that are used
or held for use by TSG but which are not held by any member of TSG. It is
understood and agreed that individual formal assignment documents and the
registration thereof in the relevant jurisdictions will occur following the
Closing Date. For purposes of the representations and warranties of the
Selling Entities contained in this Agreement, such assets shall be considered
the assets of TSG.
(c) INTERCOMPANY PAYABLES AND RECEIVABLES. Amtech shall
cause to be paid or collected in full, contributed to capital or converted to
equity any intercompany payable balance due to any member of TSG from Amtech
and any intercompany receivable balance payable by any member of TSG to
Amtech, except for intercompany balances between Amtech and AI.
(d) BRAZILIAN NOTES. Amtech shall cause AWC to transfer to
Amtech equitable title to those certain secured promissory notes due to AWC
from Concession ▇▇▇ ▇▇ ▇▇▇▇▇ Rio Niteroi S.A., and that certain unsecured
promissory note due to AWC from Construtora OAS (collectively, the "Brazilian
Notes"), with AWC retaining only legal title to the Brazilian Notes.
(e) DEFINITION OF ADJUSTED TSG. After the transfers
described in paragraphs (a) through (d) above have been made, ASC, AWC
(including ASHK and its
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interest in Autopass Co. Ltd ("ACL"), but excluding CS), AMGT and AI are
referred to collectively as "Adjusted TSG."
(f) COSTS OF PRE-CLOSING TRANSFERS. Any taxes or other costs
arising in connection with the Pre-Closing Transfers shall be paid solely by
Amtech and/or the relevant Remaining Amtech Subsidiaries and/or a third
party, if any.
1.6 CONSIDERATION. For and in consideration of the transfer to
Intermec of the Shares and the transfer to French Subsidiary of the Purchased
Assets, (i) UNOVA (as agent for Intermec) shall, on and as of the dates
indicated in Section 1.7, pay and remit to Amtech the "Non-French Purchase
Price" (as defined in Section 1.7(a)(i) below), in accordance with and to the
extent provided in Section 1.7, and (ii) French Subsidiary shall (a) on and
as of the dates indicated in Section 1.7, pay and remit to AI the "French
Purchase Price" (as defined in Section 1.7(a)(i) below), and (b) on the
Closing Date but effective as of the Transfer Date, assume the "Assumed
Liabilities" (as defined in Section 1.8), in accordance with and to the
extent provided in Section 1.8 (as limited by Section 1.9).
1.7 PURCHASE PRICE AND PAYMENT.
(a) DETERMINATION OF PURCHASE PRICE.
(i) The purchase price (the "Purchase Price") for the
Shares and the Purchased Assets is the amount equal to the "Closing Net Book
Value" (as defined below) PLUS $1,650,000 (the "Premium"); PROVIDED, HOWEVER,
that if the value of the 2,211,900 shares of common stock of Amtech held by
UNOVA (the "UNOVA Shares") (based on the closing market price on NASDAQ on
the Closing Date) (the "UNOVA Shares Value") is greater or less than
$10,000,000 (which is the amount paid by UNOVA for the UNOVA Shares on
November 3, 1997), the Purchase Price shall be increased or decreased by the
amount of such difference. The "Closing Net Book Value" shall mean the net
book value of the net assets of Adjusted TSG as of the Transfer Date, as
reflected on a balance sheet of Adjusted TSG as of the Transfer Date (the
"Final Closing Balance Sheet"), prepared in accordance with subparagraph (ii)
below. The "French Purchase Price" shall mean that portion of the Closing
Net Book Value representing the Purchased Assets and Assumed Liabilities of
AI; and the "Non-French Purchase Price" shall mean the Purchase Price less
the French Purchase Price.
(ii) The Final Closing Balance Sheet shall be prepared
in accordance with generally accepted accounting principles ("GAAP") applied
on a basis consistent with that used in the preparation of the "December
Balance Sheet" (as defined in Section 3.2(a)); PROVIDED, HOWEVER that (1) the
Final Closing Balance Sheet shall not include (A) those portions of Amtech
and its consolidated subsidiaries that are not part of Adjusted TSG, (B) any
of the Excluded Assets or Unassumed Liabilities of AI, (C) any assets or
liabilities related to any federal income Taxes, and (D) the Brazilian Notes,
(2) any amount that will become payable by any member of TSG to any
"Employee" (as defined in Section 3.15(a) or any third party) as a
consequence of the Closing ("Change
5
of Control Payments") shall be reflected as a liability on the Final Closing
Balance Sheet, (3) the Final Closing Balance Sheet shall include such other
adjustments as are described on Exhibit A-2, and (4) all account balances
denominated in foreign currencies shall be translated into United States
Dollars using the currency exchange rates in effect on the Transfer Date, as
published in the WALL STREET JOURNAL on the first business day following the
Transfer Date.
(iii) Within 45 days following the Closing Date, Amtech,
with the assistance and cooperation of UNOVA, shall prepare and deliver to
UNOVA a balance sheet of Adjusted TSG as of the Transfer Date (the
"Preliminary Closing Balance Sheet"), prepared in accordance with
subparagraph (ii) above. UNOVA shall have 30 days following its receipt of
the Preliminary Closing Balance Sheet (the "Review Period") to review the
same for compliance with subparagraph (ii) above. On or before the
expiration of the Review Period, UNOVA shall deliver to Amtech a written
statement accepting or objecting to the Preliminary Closing Balance Sheet.
In the event that UNOVA shall object to the Preliminary Closing Balance
Sheet, such statement shall include an itemization of UNOVA's objections and
its reasons therefor. If no such statement is delivered by UNOVA to Amtech
within the Review Period, UNOVA shall be deemed to have accepted the
Preliminary Closing Balance Sheet.
(iv) In the event that UNOVA shall accept or shall be
deemed to have accepted the Preliminary Closing Balance Sheet as prepared and
delivered by Amtech, the Preliminary Closing Balance Sheet shall constitute
the Final Closing Balance Sheet for purposes of determining the Purchase
Price. In the event, however, that UNOVA shall object to the Preliminary
Closing Balance Sheet, UNOVA and Amtech shall promptly meet and in good faith
attempt to resolve the issues that are in dispute. In the event that the
issues in dispute shall not have been resolved within 30 days following
Amtech's receipt of UNOVA's statement of objections to the Preliminary
Closing Balance Sheet, such disputed issues shall be resolved within an
additional 60 days by Price Waterhouse (the "Independent Firm"). The costs
and expenses of the Independent Firm in reviewing the issues in dispute shall
be borne fifty percent (50%) by UNOVA and fifty percent (50%) by Amtech. The
Preliminary Closing Balance Sheet, as adjusted to reflect the adjustments
agreed upon by such Parties or determined in accordance with this Section
1.7(a)(iv), shall constitute the Final Closing Balance Sheet for purposes of
determining the Purchase Price.
(b) PAYMENT OF ESTIMATED PURCHASE PRICE. At Closing, (1)
UNOVA (as agent for Intermec) shall pay to Amtech, by wire transfer of
immediately available funds to the bank account at FNB - Maryland, Account
Name: Alex. ▇▇▇▇▇ & Sons, Inc., Account Number 068-876-8-00, for further
credit to Amtech Corporation, Account Number 231-71008-1-2, ABA Number
▇▇▇▇▇▇▇▇▇ (the "Amtech Bank Account"), the amount equal to $20,000,000 (the
"Estimated Non-French Cash Purchase Price"), (2) French Subsidiary shall pay
to AI, by wire transfer of immediately available funds to an account
designated by AI in writing within two business days (a "business day" being
a day on which banks are not authorized or required to close in California or
Texas) prior to Closing (the "AI Bank Account"), the amount equal to $100,000
(the
6
"Estimated French Purchase Price"), which is the Parties' best estimate of
the French Purchase Price, and (3) UNOVA shall transfer and assign to Amtech
the UNOVA Shares. The sum of the Estimated Non-French Cash Purchase Price
and the UNOVA Shares Value is referred to as the "Estimated Non-French
Purchase Price," and the sum of the Estimated Non-French Purchase Price, the
Estimated French Purchase Price and the UNOVA Shares Value is referred to as
the "Estimated Purchase Price." It is understood and agreed that the amount
of cash payable by UNOVA to Amtech and by French Subsidiary to AI at Closing
shall remain unchanged regardless of whether the UNOVA Shares Value is less
than, greater than or equal to $10,000,000.
(c) SETTLEMENT OF PURCHASE PRICE. In the event that the
Purchase Price (as finally determined pursuant to Section 1.7(a)) is greater
or less than the Estimated Purchase Price (such excess or deficiency being
referred to as the "Adjustment"), on or before the third business day
following the date upon which the Purchase Price is finally determined, the
Adjustment shall be paid as follows: (i) If the Non-French Purchase Price is
greater than the Estimated Non-French Purchase Price, UNOVA shall pay to
Amtech the excess of the Non-French Purchase Price over the Estimated
Non-French Purchase Price, plus interest on such amount from the Closing Date
to the date of payment at the rate of six percent (6%) per annum ("Purchase
Price Adjustment Interest Rate"); (ii) If the French Purchase Price is
greater than the Estimated French Purchase Price, French Subsidiary shall pay
to AI the excess of the French Purchase Price over the Estimated French
Purchase Price, plus interest on such amount from the Closing Date to the
date of payment at the Purchase Price Adjustment Interest Rate; (iii) if the
Non-French Purchase Price is less than the Estimated Non-French Purchase
Price, Amtech shall pay to UNOVA the excess of the Estimated Non-French
Purchase Price over the Non-French Purchase Price, plus interest on such
amount from the Closing Date to the date of payment at the Purchase Price
Adjustment Interest Rate; and (iv) if the French Purchase Price is less than
the Estimated French Purchase Price, AI shall pay to French Subsidiary the
excess of the Estimated French Purchase Price over the French Purchase Price,
plus interest on such amount from the Closing Date to the date of payment at
the Purchase Price Adjustment Interest Rate.
(d) ALLOCATION OF PURCHASE PRICE. The consideration given by
Intermec and French Subsidiary under this Agreement (including without
limitation the payment of the Purchase Price and the assumption of the
Assumed Liabilities) shall be allocated among the Shares and the Purchased
Assets in accordance with Section 1060 and/or Section 338 of the Code, the
regulations under the Code and in accordance with Exhibit C. Within 60 days
following the date upon which the Purchase Price is finally determined, UNOVA
shall prepare Form 8023 and shall furnish a copy thereof to Amtech. If
Amtech does not object to the Form 8023 prepared by UNOVA within 30 days
following its receipt thereof, such statement shall be final for purposes of
this Agreement. In the event, however, that Amtech objects to the Form 8023
within 30 days after the receipt thereof, Amtech and UNOVA shall meet
promptly and in good faith attempt to resolve any objections of Amtech and to
use their best efforts to agree upon the allocation among the Shares and the
Purchased Assets. In the event that Amtech and
7
UNOVA are unable to resolve their differences over the Form 8023, such
differences shall be resolved in accordance with Section 12.15. The Parties
agree to reflect the allocation finally determined pursuant to this Section
1.7(d) in filing their respective tax returns or declarations for foreign,
federal, state or local income tax purposes.
1.8 LIABILITIES ASSUMED BY FRENCH SUBSIDIARY. Except as otherwise
provided in Section 1.9, on the Closing Date but effective as of the Transfer
Date, French Subsidiary shall assume and agree to pay, perform, and
discharge, as the case may be, the following (and only the following) debts,
liabilities and obligations of AI as of the Transfer Date (collectively, the
"Assumed Liabilities"):
(a) Those which are reflected in the December Balance Sheet and
which shall not have been paid or discharged on or prior to the Transfer Date;
(b) Those incurred in the ordinary course of business from
December 31, 1997 to the Transfer Date and which are reflected on the Final
Closing Balance Sheet;
(c) All obligations of AI arising after the Transfer Date
under those certain contracts and commitments (i) described on Schedules
3.6(b), 3.8(a), 3.8(b), 3.8(c), 3.8(d), 3.8(e), 3.8(f), 3.8(g), 3.8(m),
3.8(n), 3.10(b), 3.15(g) and 3.15(h) (collectively, the "Scheduled Executory
Contracts"), (ii) that are of the same type or kind as the Scheduled
Executory Contracts but which fall below the minimum threshold amount, term
or materiality, if any, of the contracts required to be set forth on said
Schedules, and (iii) entered into by AI between the Agreement Date and the
Closing Date in compliance with Article 5 (the contracts and commitments
described in this paragraph (c) are referred to collectively as the "Assumed
Executory Contracts");
(d) Liability for all product and service warranty
obligations of AI to the extent the same are provided for on the Final
Closing Balance Sheet;
(e) Liability for accrued wages, salary and vacation pay and
sick pay, to the extent set forth on the Final Closing Balance Sheet (the
"Assumed Employee Obligations"); and
(f) Those certain debts, liabilities and obligations described
on Exhibit D.
1.9 UNASSUMED LIABILITIES. Subject to the limitations set forth in
Section 11.5, French Subsidiary shall not assume or be liable or responsible
for, and AI shall retain, pay, perform and discharge, as the case may be, any
and all debts, liabilities or obligations of AI of any kind whatsoever,
whether arising out of or relating to the Purchased Assets or the operation
of the Business or otherwise prior to the Transfer Date other than the
Assumed Liabilities (collectively, the "Unassumed Liabilities").
Notwithstanding anything to the contrary contained in Section 1.8, but
subject to the limitations set forth in Section 11.5, the Unassumed
Liabilities shall include without limitation the following debts, liabilities
and obligations of AI as of the Transfer Date:
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(a) Any debt, liability or obligation of AI to taxing or
other governmental authorities for any foreign, federal, state or local
income or other Taxes which relate to periods ending on or prior to the
Transfer Date;
(b) Any intercompany payable balances due to any Affiliate of
AI;
(c) Liability for damage to property, death or bodily injury
or for related punitive, consequential or other damages ("Product Liability")
arising out of any product sold by, or any service rendered by, AI on or
prior to the Transfer Date;
(d) Any debt, liability or obligation incurred on or prior to
the Transfer Date to any present or former employees of AI or under any
collective bargaining agreement or any compensation or benefit plan generally
applicable to the present or former employees of AI (including without
limitation pension and medical benefit plans), except for the Assumed
Employee Obligations;
(e) Any debt, liability or obligation for borrowed money,
including without limitation all bank indebtedness of any sort, or any
guarantee of the obligations of another for borrowed money;
(f) Liabilities arising under any insurance policies or
self-insurance programs, except for the Assumed Insurance Policies;
(g) Any debt secured by or directly related to any of the
Excluded Assets;
(h) Any debt, liability or obligation (i) arising under the
"Environmental Laws" and based upon any activities or conditions which
existed on or prior to the Transfer Date, or any "Environmental Activity"
occurring on or prior to the Transfer Date (as such terms are defined in
Section 3.6(f)), or (ii) for any failure of AI or any other person to comply
with all applicable Environmental Laws on or prior to the Transfer Date;
(i) Any debt, liability or obligation of AI to any current or
former directors, officers or employees of AI, including without limitation
any liability arising out of the transactions provided for in this Agreement,
except for the Assumed Employee Obligations;
(j) Any debt, liability or obligation in respect of any
complaint, suit, action, arbitration or regulatory, administrative or
governmental proceeding or investigation which is threatened in writing or
pending on the Transfer Date (including without limitation those matters
disclosed on Schedule 3.16), or instituted after the Transfer Date, to the
extent it relates to the Business conducted by AI on or prior to the Transfer
Date;
9
(k) Any debt, liability or obligation arising from any
violation or alleged violation by AI of any applicable statute, law,
ordinance, rule, regulation, order or decree to the extent it relates to the
Business conducted by AI on or prior to the Transfer Date;
(l) Any debt, liability or obligation in respect of the
Excluded Assets;
(m) Any debt, liability or obligation to AI's respective
present, former or future shareholders in their capacity as shareholders;
(n) Any breach by AI occurring prior to the Transfer Date
under any of the Assumed Executory Contracts;
(o) Any debt, liability or obligation under any contract or
agreement with any party, except for the Assumed Executory Contracts;
(p) The infringement occurring prior to the Transfer Date of
any patents, trade names, trademarks, service marks, copyrights, "Software"
(as defined in Section 3.13), know-how, industrial property, technology or
other proprietary rights of others by any method, process, procedure,
apparatus, or equipment used by AI in the Business; and
(q) Those certain debts, liabilities or obligations of AI set
forth on Exhibit E.
1.10 RIGHT TO CONTEST. The assumption and agreement by French
Subsidiary to pay, perform and discharge the Assumed Liabilities shall not
prohibit French Subsidiary from contesting with a third party, in good faith
and at the expense of French Subsidiary, the amount, validity or
enforceability of any thereof.
1.11 NONASSIGNABLE CONTRACTS AND RIGHTS. To the extent that the
assignment by AI of any contract, property, right or asset to be assigned to
French Subsidiary pursuant to this Agreement shall require the consent or
approval of any other party, and such consent or approval shall not have been
obtained on or prior to the time of Closing on the Closing Date, this
Agreement shall not constitute a contract to assign the same if an attempted
assignment would constitute a breach thereof or would in any way adversely
affect the rights of AI (or French Subsidiary, as assignee) thereunder. If
any such consent or approval is required but not obtained on or prior to the
time of Closing on the Closing Date, AI and French Subsidiary covenant and
agree that in such case, AI shall continue to deal with the other contracting
party or parties, with the benefits and obligations of AI under such
contract, property, right or asset after the Transfer Date accruing to French
Subsidiary; AI shall hold all moneys received thereunder for the benefit of
French Subsidiary and shall pay the same to French Subsidiary when received;
AI shall make all payments thereunder when due, and French Subsidiary shall
pay the same to AI simultaneous with such payment; and the Parties shall use
all reasonable efforts without payment of any penalty or fee to obtain and
secure any and all consents and approvals that
10
may be necessary to effect the valid sale, transfer or assignment of the same
to French Subsidiary without change in any of the material terms or
conditions thereof, including without limitation the formal assignment or
novation of any of the same, if so required. AI and French Subsidiary
further covenant and agree to make or complete such transfers as soon as
reasonably possible and to cooperate with each other in any other reasonable
arrangement designed to provide for French Subsidiary the benefits of and the
obligations under such properties, rights or assets, including without
limitation enforcement for the benefit of French Subsidiary of any and all
rights of AI against the other party thereto arising out of the breach or
cancellation thereof by such other party or otherwise.
1.12 POWER OF ATTORNEY. Effective as of the time of Closing on the
Closing Date, AI hereby irrevocably and unconditionally constitutes and
appoints French Subsidiary (and its successors and permitted assigns) the
true and lawful attorneys of AI with full power of substitution on behalf of
and for the benefit of French Subsidiary and at the expense of French
Subsidiary, for and in the name or otherwise on behalf of AI, (a) to collect
for the account of French Subsidiary all items hereby transferred to French
Subsidiary (including the power to endorse checks and other instruments in
connection therewith), (b) to institute and prosecute, in the name of AI,
French Subsidiary or otherwise, and at the expense of French Subsidiary, all
proceedings which French Subsidiary may deem necessary or proper in order to
collect, assert or enforce any claim, right or title of any kind in or to the
Purchased Assets hereby sold, transferred or assigned to French Subsidiary,
and (c) to defend and compromise any and all actions, suits or proceedings in
respect of any of the Purchased Assets hereby sold, transferred or assigned
to French Subsidiary. AI covenants and agrees that the foregoing powers are
coupled with an interest and are and shall be irrevocable by AI. AI further
covenants and agrees that French Subsidiary shall retain for its own account
any amounts collected pursuant to the foregoing powers, including any sums
payable as interest in respect thereof, and AI covenants and agrees to pay or
deliver to French Subsidiary, when received by AI, any amounts or property
which may be received by AI in respect of any of the Purchased Assets which
are to be sold, transferred or assigned to French Subsidiary pursuant to this
Agreement.
1.13 CERTAIN OTHER TRANSFERS. On or prior to the Transfer Date,
Amtech shall (and shall cause each of the Remaining Amtech Subsidiaries to)
transfer to ASC the benefit of all obligations of any of the Employees in
favor of Amtech or such Remaining Amtech Subsidiary under any agreements,
including without limitation invention assignment,
noncompetition/nonsolicitation, dispute resolution agreements, and the
noncompetition, nonsolicitation, and the dispute resolution provisions of any
stock option agreements, between such Employee and Amtech or such Remaining
Amtech Subsidiary.
1.14 RESIGNATION OF BOARD MEMBER. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, UNOVA's designee
to the Board of Directors of Amtech (the "Amtech Board"), shall resign from
the Amtech Board immediately following the assignment of the UNOVA Shares to
Amtech.
11
1.15 LEASE OF DALLAS REAL PROPERTY. On the Closing Date but effective
as of the Transfer Date, Intermec or its designated assignee shall assume all
obligations of the tenant accruing after the Transfer Date under that certain
lease identified on Schedule 3.6(b) as, and is hereinafter referred to as,
the "Dallas Lease" under which Amtech is leasing certain property (the
"Dallas Property") for the benefit of a portion of TSG and certain of the
Remaining Amtech Subsidiaries and shall use reasonable efforts (without being
required to incur any penalty or fee) to cause Amtech to be released in full
from any and all obligations and liabilities thereunder arising after the
Transfer Date; PROVIDED that there shall be no increase in the lease rate
under the terms of the Dallas Lease as a result of such assumption and/or
novation.
(Article 2 follows)
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ARTICLE 2
TRANSFER DATE, CLOSING DATE AND CLOSING
2.1 TRANSFER DATE, CLOSING DATE AND CLOSING. Consummation of the
purchase and sale of the Shares and the Purchased Assets and the other
transactions provided for in this Agreement (the "Closing") shall take place
at the offices of UNOVA, located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, on June 11, 1998 (the "Closing Date"), commencing at 10:00 a.m.
on such date, or at such other date or time or other place as the Parties may
mutually agree upon in writing; PROVIDED, HOWEVER, that for determination of
all amounts required to be determined as of the Transfer Date and for
purposes of reporting business transactions for tax purposes and for
financial reporting purposes, the purchase and sale of the Shares and the
Purchased Assets and all other transactions provided in this Agreement to
occur as of the Transfer Date shall be deemed to have occurred simultaneously
and shall be effective at 11:59 PM (Pacific time) on May 31, 1998 (the
"Transfer Date").
2.2 NOTICE AND RIGHT TO CURE. At all times prior to the time of
Closing on the Closing Date, the Parties shall promptly notify each other in
writing of the existence of any condition or the occurrence of any event
which will or is likely to result in the failure to satisfy any one or more
of the conditions set forth in Articles 6 and 7. If any of such conditions
shall not have been satisfied or waived on or by the date on which the
Closing is otherwise scheduled, then, subject to Section 10.1(b) and provided
that such Party is not in breach of this Agreement, the Party which is unable
to meet such condition shall have a reasonable time and a reasonable
opportunity (not to exceed seven business days) to extend the Closing Date in
order to satisfy, at its expense, such condition or conditions.
2.3 RECONCILIATION OF CASH. UNOVA and Amtech shall perform a cash
reconciliation with respect to the period between the Transfer Date and the
Closing Date (the "Interim Period"), in accordance with this Section 2.3. In
the event that the amount of cash receipts obtained by the Selling Entities
in respect of Adjusted TSG during the Interim Period (the "Cash Receipts") is
greater or less than the cash disbursements made by the Selling Entities in
respect of Adjusted TSG during the Interim Period (the "Cash Disbursements")
(the amount of such difference is referred to as the "Cash Difference") (i)
Amtech shall pay the Cash Difference plus applicable interest to UNOVA (if
the Cash Receipts are greater than the Cash Disbursements), or (ii) UNOVA
shall pay the Cash Difference plus applicable interest to Amtech (if the Cash
Receipts are less than the Cash Disbursements). On the date of delivery of
the Preliminary Closing Balance Sheet, Amtech shall deliver to UNOVA a
statement setting forth Amtech's calculation of the Cash Difference (the
"Preliminary Cash Difference"). UNOVA shall accept, object to or be deemed to
have accepted the Preliminary Cash Difference at the same time and in the
same manner as it responds the Preliminary Closing Balance Sheet. Payment of
the Cash Difference, plus interest thereon from the Closing Date to the date
of payment at the
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Purchase Price Adjustment Interest Rate, shall be made at the same time and
in the same manner as payment of the Adjustment.
(Article 3 follows)
14
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLING ENTITIES
Each of the Selling Entities represents and warrants to the Buying
Entities as follows, which representations and warranties shall be deemed
reaffirmed and republished on the Closing Date as if made again on and as of
the Closing Date:
3.1 CORPORATE MATTERS.
(a) DUE ORGANIZATION AND QUALIFICATION. Each of the Selling
Entities, the Purchased Subsidiaries and ASHK (the Purchased Subsidiaries and
ASHK are referred to collectively as the "Acquired Subsidiaries") is a
corporation or limited liability company duly incorporated or formed, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization and is qualified to conduct business as a
foreign corporation in all jurisdictions where the conduct of its business or
the ownership of its assets requires qualification, except where the failure
to be so qualified would not have a material adverse effect on its business,
assets, financial condition or results of operations. To the knowledge of
Amtech, ACL is a limited liability company duly formed, validly existing and
in good standing under the laws of its jurisdiction of organization and is
qualified to conduct business in all jurisdictions where the conduct of its
business or the ownership of its assets requires qualification, except where
the failure to be so qualified would not have a material adverse effect on
its business, assets, financial condition or results of operations.
(b) POWER AND AUTHORITY TO CONDUCT BUSINESS. Each member of
TSG has the corporate power and authority to own its properties, rights and
assets and to conduct its business as now conducted.
(c) POWER AND AUTHORITY TO ENTER INTO AGREEMENTS. Each of
the Selling Entities has the power and authority to enter into this Agreement
and the other agreements provided for herein (the "Related Agreements") to
which it is a party and, subject to the conditions provided in this
Agreement, to consummate the transactions provided for in this Agreement and
the Related Agreements.
(d) DUE EXECUTION AND ENFORCEABILITY. The execution,
delivery and performance by and on behalf of each of the Selling Entities of
this Agreement and the Related Agreements to which it is a party have been
duly and validly authorized and approved by its board of directors and
shareholders, if required, and no other corporate action is necessary or
required to authorize it to execute this Agreement and such Related
Agreements and to perform its obligations under this Agreement and such
Related Agreements. This Agreement constitutes, and such Related Agreements
(when executed by the parties to them) will constitute, the valid and legally
binding obligations of each of the Selling Entities enforceable in accordance
with their respective terms and conditions, except to the extent the same may
be limited by bankruptcy, insolvency, reorganization,
15
moratorium or similar laws affecting creditors' rights generally or by
general equitable principles.
(e) SUBSIDIARIES AND OTHER EQUITY INVESTMENTS. Set forth on
Schedule 3.1(e) is a list and description of all direct or indirect
subsidiaries or other equity investments of Amtech or any of its subsidiaries
in any corporation, company, partnership, joint venture or other entity
relating to TSG or the Business.
(f) ARTICLES AND BY-LAWS. Amtech has previously marked for
identification and delivered to UNOVA true and complete copies of the
articles of incorporation and by-laws (or their substantial equivalents), as
amended and in effect, of each of the Acquired Subsidiaries.
(g) CAPITALIZATION AND SHAREHOLDERS. Set forth on Schedule
3.1(g) is a list and description of the authorized, issued and outstanding
capital stock or member interests of each of the Acquired Subsidiaries, all
options or warrants to purchase shares of capital stock or member interests
of any of the Acquired Subsidiaries, and any securities convertible into
shares of capital stock or member interests of any of the Acquired
Subsidiaries. Also set forth on Schedule 3.1(g) is a list of the names and
addresses of all holders of shares of capital stock or member interests of
any of the Acquired Subsidiaries, options or warrants to purchase shares of
capital stock or member interests of any of the Acquired Subsidiaries or
securities convertible into shares of capital stock or member interests of
any of the Acquired Subsidiaries. All Shares are duly and validly issued,
fully paid, and owned of record as set forth on Schedule 3.1(g).
3.2 FINANCIAL.
(a) DECEMBER BALANCE SHEET. Set forth on Schedule 3.2(a) is
the audited, consolidated balance sheet of Amtech and its subsidiaries as of
December 31, 1997 (the "December Balance Sheet"), as audited by Ernst & Young
L.L.P. ("E&Y"), and the related statement of income for the year then ended
(collectively, the "December Financials"). Except as otherwise disclosed on
Schedule 3.2(a), the December Financials fairly present the consolidated
financial position of Amtech and its subsidiaries as of December 31, 1997,
and the results of its operations for the year then ended, in accordance with
GAAP applied on a basis consistent with the "1996 Financials" (as defined in
Section 3.2(b)).
(b) 1996 FINANCIALS. Set forth on Schedule 3.2(b) are the
balance sheet of Amtech and its subsidiaries as of December 31, 1996, and the
related statement of income for the year then ended (collectively, the "1996
Financials"), as audited by E&Y. Except as otherwise disclosed on Schedule
3.2(b), the 1996 Financials fairly present the consolidated financial
position of Amtech and its subsidiaries as of December 31, 1996 and the
results of its operations for the year then ended, in accordance with GAAP
applied on a basis consistent with the consolidated financial statements of
Amtech and its subsidiaries as of December 31, 1995.
16
(c) EVENTS SUBSEQUENT TO DECEMBER BALANCE SHEET. Since
December 31, 1997, there has not been any of the following, except as
otherwise disclosed on Schedule 3.2(c):
(i) Any material adverse change in the conduct,
financial position or operating results of the Business, from that reflected
in the December Financials;
(ii) Any damage or destruction (whether or not covered
by insurance) materially and adversely affecting any properties, rights or
assets of TSG;
(iii) Any sale or other disposition of any capital asset
used in the Business with an original cost in excess of $25,000;
(iv) Any increase in the wage, salary, commission or
other compensation (other than routine increases granted in the ordinary
course of business and consistent with past practice) payable or to become
payable by any member of TSG to any of its employees, or any change in any
existing, or creation of any new, insurance or other plan under which such
member provides benefits to such employees;
(v) Any declaration, setting aside or payment of any
dividend or any distribution with respect to the shares of capital stock of
any of the Acquired Subsidiaries (other than any dividend of CS), or any
direct or indirect redemption, purchase or other acquisition of any such
shares;
(vi) Any grant of any options or warrants to acquire
any shares of capital stock of any of the Acquired Subsidiaries; or
(vii) To the knowledge of the Selling Entities, any
release or waiver by any member of TSG of any material claim or right.
(d) INDEBTEDNESS. Set forth on Schedule 3.2(d) is a list and
description of all notes, loan agreements and other instruments pursuant to
which any member of TSG is obligated for borrowed moneys (other than borrowed
moneys which will be repaid, forgiven or converted into equity (PROVIDED that
Amtech will indemnify UNOVA for any consequences thereof) at or prior to
Closing and customary trade payables incurred in the ordinary course of
business) and the outstanding balance of principal and interest thereunder as
of a recent date.
(e) FINANCIAL RESOURCES OF AMTECH. Following the Closing
Date, Amtech will have adequate financial resources to operate the remaining
business of Amtech, AI and the Remaining Amtech Subsidiaries and to pay,
perform and discharge all of the Unassumed Liabilities.
3.3 ACCOUNTS RECEIVABLE. All accounts, notes and drafts receivable
(including unbilled receivables) of TSG are bona fide, represent transactions
actually made in the
17
ordinary course of business, are valid and subject to no counterclaim or
setoff, and, to the best of the knowledge of the Selling Entities, are
collectible in the ordinary course of business, except (i) to the extent of
the reserve for uncollectible accounts provided for in the books and records
of TSG or (ii) as otherwise disclosed on Schedule 3.3. The representations
and warranties made in this Section 3.3 shall terminate on the final
determination of the Final Closing Balance Sheet.
3.4 INVENTORIES. Set forth on Schedule 3.4 is a description of the
inventory valuation policy of TSG. All inventories of TSG are usable and
salable in the ordinary course of business, except for slow-moving, damaged
or obsolete items, all of which have been written down to net realizable
value or adequate reserves have been provided therefor, and the value at
which inventories are recorded in the books and records of TSG reflects the
normal inventory valuation policy of TSG, applied on a basis consistent with
prior periods, of stating inventory at the lower of cost or market, which
inventory valuation policy is further described on Schedule 3.4. The
representations and warranties made in this Section 3.4 shall terminate on
the final determination of the Final Closing Balance Sheet.
3.5 MORTGAGES, SECURITY INTERESTS, LIENS AND OTHER ENCUMBRANCES OF
TITLE. For purposes of this Agreement, a "Lien" shall mean any lien,
encumbrance, mortgage, pledge, hypothecation, charge, option, right of first
refusal, lease, license or other conflicting ownership or security interest
in favor of any third party. "Permitted Liens" shall mean (i) Liens for
taxes that are not yet due and payable or that are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established, (ii) workers', repairmens' and similar Liens imposed by law that
have been incurred in the ordinary course of business, (iii) Liens and other
title defects, easements, encroachments and encumbrances that do not,
individually or in the aggregate, materially impair value or continued use as
currently conducted of the property to which they relate, (iv) retention of
title agreements with suppliers entered into in the ordinary course of
business, (v) the rights of others to customer deposits, (vi) the Lien on
that certain land and buildings located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ in which a portion of TSG currently operates in favor
of International Bank of Commerce, which Lien secures the letter of credit in
favor of the issuer of the performance bond related to the performance of the
FDOT Contract, (vii) Liens securing any of the liabilities disclosed on the
December Balance Sheet, (viii) Liens incurred in the ordinary course of
business under leases or securing purchase money indebtedness, and (ix)
zoning, entitlement, building and other land use regulations imposed by
governmental authorities having jurisdiction over any real property that are
not violated by the current use and operation of such real property. Except
(a) for Permitted Liens or (b) as set forth on Schedule 3.5, (i) Amtech owns
the Shares of record and beneficially, (ii) AI has good title to all of the
Purchased Assets, and (iii) the members of TSG have good title to their
respective properties, rights and assets, in each case free and clear of all
Liens.
3.6 REAL PROPERTY.
18
(a) OWNED REAL PROPERTY. Set forth on Schedule 3.6(a) is a
list of all real property owned by any member of TSG or in which it has any
equity interest and a general description of all buildings and other
structures situated thereon (the "Owned Real Property"). All structures
constituting part of the Owned Real Property are in good condition and repair
(subject to ordinary wear and tear) and are fit for the purposes to which
they are being put. No member of TSG has disposed of any Owned Real Property
within the past two years, except as otherwise disclosed on Schedule 3.6(a).
(b) REALTY LEASES (AS LESSEE). Set forth on Schedule 3.6(b)
is a list of all realty leases or similar contracts (the "Leases") under or
pursuant to which any member of TSG leases or rents (as lessee or sublessee)
any land, building or other realty. The Leases are in full force and effect
in accordance with their respective terms, and the relevant member of TSG is
in compliance in all material respects with all terms and conditions of the
Leases, including the payment of rent. Except as otherwise disclosed on
Schedule 3.6(b), the premises leased pursuant to the Leases are in good
condition and repair (subject to ordinary wear and tear) and are reasonably
fit for the purposes to which they are being put.
(c) VIOLATION OF APPLICABLE LAWS OR RESTRICTIVE COVENANTS.
No written notice of violation of any applicable law (including without
limitation any zoning law), covenant, condition, restriction or easement
affecting any real property owned, leased or occupied by any member of TSG in
respect of the Business (the "Real Property") or its use or occupancy, which
violation would materially impair the value or continued use of the property
to which it relates has been given to any member of TSG by any governmental
entity or other person entitled to enforce the same.
(d) GOVERNMENTAL PLANS. To the knowledge of the Selling
Entities, there is no plan, study or effort by any governmental entity that
would materially and adversely affect the current use or occupancy of the
Real Property.
(e) CONSTRUCTION, CONDEMNATION AND ACCESS. To the knowledge
of the Selling Entities, there is no plan to construct, modify or realign any
street, highway, power lines, or pipelines, or any eminent domain proceeding,
which would result in the taking of all or any part of the Real Property or
would materially and adversely affect its use or occupancy. Each parcel of
the Real Property has full and free access to a presently existing public
right-of-way, and, to the knowledge of the Selling Entities, there is no
governmental proceeding, fact or condition which would materially impair or
result in the termination of any such access. Each member of TSG has full
and free right to use all access points relating to the Real Property
currently used by it in the Business.
(f) ENVIRONMENTAL MATTERS. Except as set forth on Schedule
3.6(f), to the knowledge of the Selling Entities:
(i) Each member of TSG has obtained and currently
maintains all material permits, licenses and other authorizations (the
"Environmental Permits") which
19
are presently required to be obtained by it with respect to the operation of
the Business or any Real Property under applicable federal, state, local and
foreign laws, and applicable regulations relating to pollution or protection
of the environment, including without limitation laws and regulations
relating to emissions, discharge, releases of any "Hazardous Substance" (as
defined below) into the environment (including without limitation ambient
air, surface water, ground water, drinking water supply, land surface or
subsurface strata located both on and off-site) or otherwise relating to the
manufacture, processing, distribution, generation, use, removal, abatement,
remediation, treatment, storage, disposal, transport, recycling, reclamation,
management, handling, import or export of any Hazardous Substance (the
"Environmental Laws"). The term "Hazardous Substance" shall mean any toxic
or hazardous constituents, pollutants, waste waters, byproducts,
contaminants, chemicals, compounds, substances, materials or wastes,
including without limitation asbestos, polychlorinated biphenyls ("PCB's"),
petroleum or any petroleum products or other constituents or petroleum-based
derivatives or urea formaldehyde. No member of TSG has been notified in
writing by any governmental entity that any of the Environmental Permits will
be modified, suspended or revoked.
(ii) Each member of TSG is in material compliance with
the terms and conditions of the Environmental Permits and with all applicable
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental Laws.
(iii) There is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, order,
investigation, proceeding, notice or demand letter received by or pending
against any member of TSG in respect of any Real Property or any site off the
Real Property relating to the Environmental Laws or any code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved under such Environmental Laws.
(iv) There has been no occurrence of any storage,
holding, existence, release, spill, emission, discharge, generation,
processing, treatment, abatement, removal, recycling, reclamation, disposal,
handling, use or transportation of any Hazardous Substance from, under, into,
at or on any Real Property (an "Environmental Activity") which has resulted
or is reasonably likely to result in a violation by or a material liability
of any member of TSG under the Environmental Laws, or which has or may result
in the contamination of any Real Property.
(g) UTILITIES. All electric, gas, water, sewage,
communications and other utilities necessary or advisable for the operation
of the Business on the Real Property are sufficient for the normal operation
of the Business as presently conducted thereon.
3.7 RIGHT TO USE PROPERTIES AND ASSETS. No member of TSG is using
any properties, rights or assets to conduct the Business which are not duly
owned, leased, or licensed by it.
20
3.8 CONTRACTS AND COMMITMENTS.
(a) SALES ORDERS, BIDS AND PROPOSALS. Set forth on Schedule
3.8(a) is a list of each individual outstanding sales order, sales contract,
bid or sales proposal of any member of TSG (including without limitation
those for the provision of products, the installation of systems or the
maintenance of systems) in excess of $250,000. Amtech has provided UNOVA
with access to true and correct copies of all outstanding sales orders, sales
contracts, bids or sales proposals of TSG (the "Sales Orders"), except to the
extent such access may be restricted by applicable laws, regulations or
contract terms. Except as otherwise indicated on Schedule 3.8(a), all Sales
Orders currently in effect have been made in the ordinary course of business,
at arms' length and at the Transfer Date are not currently expected to result
in a loss upon completion of performance.
(b) PURCHASE ORDERS. Set forth on Schedule 3.8(b) is a list
and description of each individual outstanding purchase order and purchase
commitment of TSG in excess of $50,000. Amtech has provided UNOVA with
access to true and correct copies of all purchase orders and purchase
commitments of TSG ("Purchase Orders"). Except as otherwise indicated on
Schedule 3.8(b), all Purchase Orders have been incurred in the ordinary
course of business and at arms' length, and are not in excess of the normal
requirements of the Business or at any excessive price.
(c) SALES REPRESENTATIVE, DISTRIBUTOR AND DEALER AGREEMENTS.
Set forth on Schedule 3.8(c) is a list of all outstanding sales
representative, sales agent, dealer and distributor agreements and similar
contracts or agreements of TSG.
(d) PERSONAL PROPERTY LEASES (AS LESSEE). Set forth on
Schedule 3.8(d) is a list of each individual lease, contract and other
agreement under which any member of TSG leases or rents (as lessee) any
machinery, equipment, motor vehicle or other personal property with a rental
obligation exceeding $6,000 per annum and which is not on its face terminable
at any time by the relevant member of TSG without any additional payment,
indemnity or penalty upon 30 days or less notice.
(e) NONCOMPETITION AGREEMENTS OR COVENANTS. Set forth on
Schedule 3.8(e) is a list of every binding agreement or other binding
commitment imposing on any member of TSG any restriction on the manner in
which it may conduct the Business or use its assets in competition with any
third party.
(f) CONFIDENTIAL NONDISCLOSURE AGREEMENTS. Set forth on
Schedule 3.8(f) is a list of all written agreements between any member of TSG
and any of its customers, suppliers or others which contain provisions for
the nondisclosure by any member of TSG of confidential or proprietary
information.
(g) CONSULTANT AGREEMENTS. Set forth on Schedule 3.8(g) is a
list of all outstanding consultant agreements (other than agreements listed
on Schedule 3.8(c)) of TSG which are not capable of termination on 90 days
notice or less.
21
(h) GUARANTEES. Set forth on Schedule 3.8(h) is a list of
any obligation, contingent or otherwise, of Amtech in respect of the Business
or any member of TSG directly or indirectly guaranteeing any debt of any
other person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of Amtech in respect
of the Business or any member of TSG (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) any debt of any other person
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered
into for the purpose of assuring in any other manner the holder of such debt
or the payment thereof (in whole or in part) (other than endorsements for
collection or deposit in the ordinary course of business). Separately
identified on Schedule 3.8(h) are any of the foregoing with respect to which
the credit of Amtech shall not be replaced by the credit of UNOVA on or after
the Closing Date (the "Amtech Remaining Guarantees"), although the Selling
Entities shall be indemnified in respect of the Amtech Remaining Guarantees
as provided in Section 11.2(d).
(i) POWERS OF ATTORNEY, PROXIES. Set forth on Schedule
3.8(i) is a list of all outstanding powers of attorney or proxies granted by
any member of TSG.
(j) LETTERS OF CREDIT, SURETY, BID AND PERFORMANCE BONDS.
Set forth on Schedule 3.8(j) is a list of all commercial letters of credit,
stand-by letters of credit, surety, bid, performance bonds and other similar
instruments (i) securing the obligations of any member of TSG or (ii)
securing any outstanding payment obligations of a third party to Amtech in
respect of the Business or any member of TSG.
(k) DERIVATIVES. Set forth on Schedule 3.8(k) is a list of
any obligation of Amtech in respect of the Business or any member of TSG in
respect of any rate swap transaction, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
(l) MAJOR CUSTOMERS AND SUPPLIERS. Set forth on Schedule
3.8(l) is a list of the ten largest customers and the ten largest suppliers
of the Business for the fiscal year ending on December 31, 1997, including
the dollar amounts represented by each such customer or supplier, during such
fiscal year.
(m) CONTRACTS WITH AFFILIATES. Set forth on Schedule 3.8(m)
is a list of any lease, license, contract or agreement between Amtech in
respect of the Business or any member of TSG on the one hand, and any
Affiliate of any such party, or any officer, director, of any such party, or
the spouse or other family member of any such individual, on the other hand.
All such contracts are on normal commercial terms, except as
22
otherwise indicated on Schedule 3.8(m). As used herein, "Affiliate" means,
with respect to any person, any other person controlling, controlled by, or
under common control with such person. For purposes of this Agreement, the
term "control" (including, with correlative meanings, the terms "controlled
by" and "under common control with" as used with respect to any person) means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person whether through
ownership of voting securities, by contract or otherwise.
(n) OTHER CONTRACTS. Set forth on Schedule 3.8(n) is a list
of any other contract or commitment of Amtech in respect of the Business or
any member of TSG that is material to the Business and which is not of the
type required to be disclosed in any other Schedule to this Agreement
pursuant to the provisions hereof. For purposes of this paragraph, a
contract or commitment shall be deemed to be material if the consideration
remaining to be paid by Amtech or such member thereunder exceeds $250,000 and
is not capable of termination on 90 days notice or less.
(o) CONTRACT DEFAULTS. To the knowledge of the Selling
Entities, no member of TSG is in default in any material respect under any of
its contracts listed on Schedules 3.8(a) - 3.8(n).
3.9 SUITABILITY AND GOOD REPAIR. The tangible assets of TSG are in
good working condition and repair (considering balance sheet reserves and
subject to ordinary wear and tear), fit for the purposes to which they are
being put and sufficient for the conduct of the Business as it is currently
being conducted, except as otherwise disclosed on Schedule 3.9.
3.10 PATENTS, TRADE NAMES, TRADEMARKS, SERVICE MARKS AND COPYRIGHTS.
(a) INTELLECTUAL PROPERTY RIGHTS. Set forth on Schedule
3.10(a) is a list and description of all patents, patent applications, trade
names, trademarks, trademark registrations and trademark applications,
service marks, service ▇▇▇▇ registrations and service ▇▇▇▇ applications,
copyright registrations and copyright registration applications, both
domestic and foreign, which are presently or by the Closing will be owned by
a member of TSG in respect of the Business. The assets listed on Schedule
3.10(a), all patent disclosures, chip registrations and their applications,
if any, and all "Software" (as defined in Section 3.13), know-how, industrial
property, technology or other proprietary rights which are owned by Amtech or
any of its subsidiaries in respect of the Business are referred to as the
"Intellectual Property." Except as otherwise indicated on Schedule 3.10(a),
the members of TSG presently own, or by the Closing will own, all right,
title and interest in and to the Intellectual Property, validly and
beneficially, free and clear of all Liens, with all rights afforded therein
under applicable law. To the knowledge of the Selling Entities, none of the
Intellectual Property is the subject of any claim or challenge of adverse
ownership (except for the licenses set forth on Schedule 3.10(b)) or
invalidity asserted by any third party, nor is there any basis upon which a
claim or challenge could be made.
23
(b) LICENSES OF INTELLECTUAL PROPERTY RIGHTS TO OR FROM THIRD
PARTIES. Set forth on Schedule 3.10(b) is a list and description of (i) all
licenses, assignments and other transfers of Intellectual Property granted to
others by any member of TSG or Amtech in respect of the Business and (ii) all
licenses, assignments and other transfers of patents, trade names,
trademarks, service marks, copyrights, trade secrets, Software, know-how,
industrial property, technology or other proprietary rights granted to any
member of TSG or Amtech in respect of the Business by others (other than
pre-packaged or off the shelf software). Except as disclosed on Schedule
3.10(b), none of the licenses described above is subject to termination,
cancellation or change in its terms or provisions or cause a payment to
become due from Amtech or any member of TSG as a result of this Agreement or
the transactions provided for in this Agreement.
(c) NO INFRINGEMENT. To the knowledge of the Selling
Entities, no person or entity is infringing, or has misappropriated, any
Intellectual Property.
(d) REGISTRATION AND MAINTENANCE FEES. Amtech or the
relevant member of TSG has paid all maintenance, renewal or similar fees
required by the applicable government agencies to maintain any of the
registrations made in respect of the Intellectual Property identified in
Schedule 3.10(a), except for those which are not yet due and payable or as
otherwise disclosed on Schedule 3.10(d). Amtech or the relevant member of
TSG has filed responses to all actions from applicable governmental agencies
that have become due relating to any Intellectual Property, and has paid all
costs and charges relating to such actions, including without limitation
legal fees.
3.11 PATENT, TRADE NAME, TRADEMARK, SERVICE ▇▇▇▇ OR COPYRIGHT
INFRINGEMENT AND INDEMNIFICATION. Set forth on Schedule 3.11 is a list of
all indemnification claims made against Amtech in respect of the Business or
any member of TSG for infringement of any patent, trade name, trademark,
service ▇▇▇▇, copyright, Software, know-how, industrial property, technology
or other proprietary rights of others, and the amounts paid by Amtech or such
member of TSG in respect of such claims.
3.12 CONFIDENTIAL INFORMATION OR TRADE SECRETS. Except as set forth
on Schedule 3.12, there are no written claims or demands of any person
pertaining to, or any proceedings which are pending or, to the knowledge of
the Selling Entities, threatened, which challenge the rights of Amtech in
respect of the Business or any member of TSG in respect of any proprietary or
confidential information or trade secrets used in the conduct of the
Business. To the knowledge of the Selling Entities, no methods, processes,
procedures, apparatus or equipment used in the Business use or include any
proprietary or confidential information or trade secrets misappropriated from
any person or entity. To the knowledge of the Selling Entities, neither
Amtech in respect of the Business nor any member of TSG has any confidential
information owned or claimed by third parties not rightfully in its
possession, and Amtech and the relevant members of TSG have complied in all
material respects with all agreements, understandings and licenses governing
the use of any confidential information used in the Business that is owned or
claimed by third parties.
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3.13 SOFTWARE.
(a) DEFINITION. For purposes of this Agreement, "Software"
shall mean a computer program or any part of such computer program (excluding
pre-packaged or off the shelf Software), whether in source code, object code
or in any other form, whether recorded on tape or on any other media, and all
modifications, enhancements or corrections made to such program, and all
documentation relating to such program that is reasonably required to operate
such program, including any flow charts, designs, instructions, job control
procedures and manuals relating to such program in printed or machine
readable form. All Software that is used in the manufacture or use of the
products of the Business or is under development for use in the manufacture
or use of the products of the Business (the "TSG Software").
(b) PERFORMANCE; DOCUMENTATION. TSG Software performs, as to
all substantial operational features, generally in accordance with the
current published description of the TSG Software and is free from defects
that substantially affect system performance, except to the extent otherwise
indicated on Schedule 3.13(b). Set forth on Schedule 3.13(b) is (i) a
characterization of the documentation of the TSG Software, and (ii) an
analysis of the extent to which the performance or the functionality of the
TSG Software and any hardware developed or manufactured by TSG is affected by
dates prior to, during and after the year 2000.
(c) DEVELOPMENT. To the knowledge of the Selling Entities,
no present or former employee of TSG is, or is now expected to be, in default
under any term of any employment agreement or arrangement, any noncompetition
agreement or arrangement or any other agreement or arrangement, in each case,
relating to TSG Software or its development or exploitation, except as
otherwise disclosed on Schedule 3.13(c). Except as otherwise disclosed on
Schedule 3.13(c), (i) TSG Software was developed entirely by the employees of
TSG or by independent contractors, (ii) the TSG Software that was developed
by the employees of TSG was developed as part of their employment
responsibilities during the time that they were employees only of TSG, and to
the knowledge of the Selling Entities, TSG Software does not include any
inventions of such employees made prior to the time of their employment by
TSG or any intellectual property of any previous employer of such employees,
and (iii) each of the contracts with third parties who developed any TSG
Software provides that the software developed under such contract is a work
made for hire or otherwise belongs to Amtech.
(d) PROTECTION OF TSG SOFTWARE. To the knowledge of the
Selling Entities, except as otherwise disclosed in Schedule 3.13(d), there is
no breach of any confidentiality agreement in favor of any member of TSG
relating to the TSG Software by any third parties. Except as disclosed in
the licenses set forth on Schedule 3.10(b), neither Amtech in respect of the
Business nor any member of TSG has conveyed or granted to any third parties
any other rights to TSG Software, nor is it obligated to grant or convey any
rights to license, market, incorporate in other Software, sell or otherwise
use any such
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Software, and (to the knowledge of the Selling Entities) no third party has
unauthorized access to the documentation, source code or similar material for
such Software.
3.14 PRODUCT AND SERVICE WARRANTIES. Set forth on Schedule 3.14 are
the standard product and service warranty policies of TSG. Except as
otherwise indicated on Schedule 3.14, no member of TSG has granted or
extended any currently outstanding product or service warranty that is
materially different from the standard policies set forth on Schedule 3.14.
3.15 EMPLOYEES; EMPLOYEE BENEFITS.
(a) EMPLOYEES; RECENT TERMINATIONS. Set forth on Schedule
3.15(a) is a list of the names and titles of all current employees of TSG
(the "Employees"). Amtech has previously furnished to UNOVA a schedule
showing the current rates of compensation of each of the Employees and any
applicable incentive or other compensation arrangements. Also set forth on
Schedule 3.15(a) is a list by location in the United States of the number of
former employees of the Business whose employment with any member of TSG was
terminated within the 90-day period preceding the Agreement Date.
(b) INDEBTEDNESS TO EMPLOYEES. No member of TSG is indebted
to any of its present or former employees in any amount whatsoever, other
than for accrued wages, bonuses and related benefits and reasonable
reimbursable business expenses incurred in the ordinary course of business,
except as otherwise disclosed on Schedule 3.15(b).
(c) LOANS OR ADVANCES TO EMPLOYEES. No member of TSG has
outstanding and unsatisfied, in whole or in part, any loan or advance to any
of its present or former employees, other than reasonable advances for
business and related expenses made in the ordinary course of business, except
as otherwise disclosed on Schedule 3.15(c).
(d) COLLECTIVE BARGAINING AGREEMENTS. There are no
collective bargaining or similar agreements between the relevant member of
TSG on the one hand, and any group of employees, union or labor organization,
on the other hand; and no such agreement or understanding is presently
proposed or under discussion.
(e) OTHER LABOR MATTERS. To the knowledge of the Selling
Entities, TSG is in compliance in all material respects with all applicable
laws relating to employment, employment practices, terms and conditions of
employment, wages and hours. Within the last two years, no member of TSG has
experienced any union organizing activity or any work stoppage due to any
labor disagreement with respect to the Employees. There is no strike,
slowdown or stoppage pending or threatened against any member of TSG.
26
(f) EMPLOYEE BENEFIT PLANS. Set forth on Schedule 3.15(f) is
a list of all employee benefit plans in effect for the benefit of the present
or former employees of any member of TSG or any group of such employees, or
for the benefit of dependents of any of them (collectively, the "Compensation
and Benefit Plans"), including without limitation any pension, life and
dependent life, accidental death and health insurance (including medical,
dental and vision), hospitalization, medical examination, savings, bonus,
deferred compensation, incentive compensation, holiday, vacation, severance
pay, tax preparation assistance and equalization, pay-in-lieu, sick pay, sick
leave, disability, tuition refund, service award, company car, car allowance,
scholarship, relocation, patent award, living allowances, housing allowances,
annual home leave costs, employee assistance, travel accident, dependent
schooling and supplements, fringe benefit and other employee benefit plans,
contracts, policies or practices providing employee or executive compensation
or benefits. Amtech has previously provided UNOVA with access to each of the
Compensation and Benefit Plans. There is no Compensation and Benefit Plan
that is subject to Title IV of the Employee Retirement Income Security Act of
1974, as amended. Neither Amtech nor any member of TSG has committed to
establish any agreement or arrangement of the type required to be disclosed
on Schedule 3.15(f), except as otherwise indicated on such Schedule. Each of
the Compensation and Benefit Plans complies, and has been administered in
compliance in all material respects, with all applicable laws and
regulations. All contributions and premium payments required to be made with
respect to the Compensation and Benefit Plans by the Transfer Date have been
made in due time or properly accrued for in the books and records of TSG.
(g) EMPLOYMENT CONTRACTS. Set forth on Schedule 3.15(g) is a
list of all written contracts between any member of TSG and any of the
Employees. Amtech has provided UNOVA with access to true and correct copies
of all such contracts. There are no other binding employment agreements,
oral or written.
(h) OPEN EMPLOYMENT REQUISITIONS. Set forth on Schedule
3.15(h) is a list of all written offers of employment (the "Open Employment
Requisitions") made by any member of TSG to any individual, which offers are
outstanding on the Agreement Date.
3.16 PENDING OR THREATENED CLAIMS, LITIGATION AND GOVERNMENTAL
PROCEEDINGS. Set forth on Schedule 3.16 is a list and description of every
complaint, suit, action, arbitration or regulatory, administrative or
governmental proceeding or investigation or any other proceeding or
investigation which is pending or, to the knowledge of the Selling Entities,
threatened against any member of TSG. No investigation, suit, action or
other judicial or governmental proceeding is pending or, to the knowledge of
the Selling Entities, threatened before any court or governmental agency
which is likely to result in the restraint or prohibition of, or the
obtaining of substantial damages in connection with, this Agreement or the
consummation of the transactions provided for in this Agreement.
3.17 JUDGMENTS, ORDERS AND CONSENT DECREES. Except as set forth on
Schedule 3.17, no member of TSG is subject to any judgment, order or decree
of, or agreement
27
with, any court, arbitrator or regulatory authority materially limiting,
restricting or adversely affecting the conduct of the Business; and no such
proceeding is pending or, to the knowledge of the Selling Entities,
threatened against any member of TSG.
3.18 COMPLIANCE WITH LAWS. To the knowledge of the Selling Entities,
the Business has been conducted in compliance and conformity in all material
respects with all applicable laws, regulations, orders, judgments,
injunctions, awards or decrees. Without limiting the generality of the
foregoing, Amtech in respect of the Business and the members of TSG have
complied in all material respects with all state abandoned or unclaimed
property laws.
3.19 FRANCHISES, PERMITS, ETC. Except as otherwise disclosed on
Schedule 3.19, each of the relevant members of TSG has obtained and is in
compliance in all material respects with all terms and conditions of all
material governmental and business franchises, permits, licenses and other
authorizations (collectively, the "Authorizations"), including without
limitation FCC certification or licensing requirements and certificates of
occupancy, that are necessary for it to conduct the Business as and where it
is now conducted. Except as otherwise indicated on Schedule 3.19, no member
of TSG has received any notice from a relevant person or authority that any
such Authorization is to be revoked or will not be renewed, and none of the
Selling Entities is aware of any factors that would prejudice the continuance
or renewal of the Authorizations following the sale of the Shares to Intermec
and the sale of the Purchased Assets to French Subsidiary as of the Transfer
Date. The Selling Entities have no knowledge of any pending or threatened
regulatory change, whether domestic or foreign, which would adversely affect
its business or business prospects or require product changes.
3.20 ECONOMIC SANCTIONS AND QUESTIONABLE PAYMENTS. To the knowledge
of the Selling Entities, no member of TSG has any contracts, agreements,
arrangements or understandings in effect with, or any outstanding bids or
proposals to, the governments of Iran, Iraq, Libya, North Korea, Cuba, or any
agency, subdivision or component of any such governments or any national
entity owned by such governments or any legal person or entity located in
such countries, except as otherwise disclosed on Schedule 3.20. Except for
commission arrangements entered into in the ordinary course of business and
consistent with past practice, no member of TSG has provided (or has any
contracts, agreements, arrangements or understandings to provide) any payment
of money or other remuneration or benefit of any kind to any party to obtain
or retain business, other than gifts or entertainment that are consistent
with its customary business practices, are limited in value and do not
violate any applicable law or, to the best of the knowledge of the Selling
Entities, customer's ethical practices.
3.21 TAXES. For purposes of this Agreement, the term "Taxes" means
all forms of tax, wherever levied or imposed, of whatever nature and whether
past, present or future, and all penalties, charges, costs and interest
relating to the same and any penalties chargeable for noncompliance with any
statutory provisions or regulations in connection therewith. To the
knowledge of the Selling Entities, each of Amtech in respect of the
28
Business and the members of TSG has filed on a timely basis with all
appropriate governmental authorities all Tax returns and Tax reports required
to be filed by it. To the knowledge of the Selling Entities, all such
returns and reports are complete and accurate and have been prepared on a
basis consistent with that of previous years, except as otherwise disclosed
on Schedule 3.21. Where the statute of limitations has not expired for the
income tax liability of Amtech in respect of the Business and/or the members
of TSG, no waivers or extensions of the applicable statutes of limitations
have been given, except as otherwise disclosed on Schedule 3.21. Each of
Amtech in respect of the Business and the members of TSG has paid or made
proper reserves in its books and records in accordance with GAAP for all
Taxes due in respect of the Business which are known to Amtech or the members
of TSG, whether or not shown or required to be shown on any Tax return. The
books and records of Amtech in respect of the Business and the members of TSG
reflect a break-down of any provision or accrual for Taxes reflected in such
books and records among the various periods to which it applies. Except as
may be required by the severance agreement set forth on Schedule 3.21, none
of the Selling Entities nor any of the Buying Entities will be required, as a
result of the transactions contemplated by this Agreement, to make any
payment, any portion of which will be an "excess parachute payment" to any
person who is a "disqualified individual" (as such terms are defined in
Section 280G of the Code) with respect to Amtech in respect of the Business
or any member of TSG, determined without regard to whether such payment is
reasonable compensation for personal services actually rendered or to be
rendered. Except as otherwise disclosed on Schedule 3.21, neither Amtech in
respect of the Business nor any member of TSG is a party to any tax sharing,
allocation or indemnification agreement.
3.22 INSURANCE AND BANKING
(a) INSURANCE POLICIES. Set forth on Schedule 3.22(a) is a
list of all insurance policies (including the terms of any self-insurance
programs) and bonds (excluding instruments referred to in Section 3.8(j)) in
force for the current policy year, with respect to the business, operations,
properties, assets and employees of TSG. Identified on Schedule 3.22(a) as
the "Assumed Insurance Policies" are any insurance policies of AI that will
be transferred to French Subsidiary pursuant to Section 1.2.
(b) BANK ACCOUNTS. Set forth on Schedule 3.22(b) is a list
of the names and locations of all banks or similar financial institutions in
which any member of TSG maintains an account, the account numbers and the
names of all persons authorized to sign checks, drafts or other instruments
drawn thereon.
3.23 REQUIRED CONSENTS. Set forth on Schedule 3.23 is a list of any
material consent, approval or authorization of, or exemption by, or filing
with, any governmental or regulatory authority or private third party that is
required in connection with the execution, delivery and performance by the
Selling Entities of this Agreement and the Related Agreements to which either
of them is a party.
29
3.24 NO BREACH OF STATUTE OR CONTRACT. Except to the extent that any
of the consents, approvals and authorizations set forth on Schedule 3.23
shall not have been obtained prior to Closing, neither the execution and
delivery by each of the Selling Entities of this Agreement and the Related
Agreements to which it is a party, nor compliance by it with the terms and
provisions of such agreements, will breach or violate any applicable statute,
law, ordinance, rule or regulation of any governmental authority, domestic or
foreign, or any of the terms, conditions or provisions of the articles of
incorporation and by-laws (or their substantial equivalents) of any of the
Selling Entities, or any judgment, order, injunction, decree, material
contract, material agreement or other material instrument to which such
Selling Entity is a party or by which any of its properties, rights or assets
are bound.
3.25 BROKER'S OR FINDER'S FEES. No person or firm other than Amtech
and its Affiliates (and their respective directors, officers and employees)
has arranged, or participated in arranging, on behalf of the Selling
Entities, the transactions provided for in this Agreement. There are no
broker's or finder's fees to be paid by Amtech in connection with the
transactions provided for in this Agreement. Amtech has no knowledge of, and
has taken no action which would give rise to, any claim for a broker's or
finder's fee to be paid by UNOVA in connection with the consummation of the
transactions provided for in this Agreement.
3.26 TRUE AND ACCURATE SCHEDULES. Amtech has furnished UNOVA with
access to or copies of true, accurate and complete copies of all documents
listed in any Schedule.
3.27 RECORDS. The books and records of TSG are reasonably complete
and fairly and accurately set out and disclose all material transactions
involving the Business.
3.28 DUTY OF THE SELLING ENTITIES TO MAKE INQUIRY. To the extent that
any of the representations and warranties made by the Selling Entities in
this Agreement are qualified by the knowledge or belief of the Selling
Entities, each of the Selling Entities represents and warrants that it has
made due and reasonable inquiry and investigation concerning the matters to
which such representations and warranties relate, including without
limitation diligent inquiry of the key personnel of TSG.
(Article 4 follows)
30
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UNOVA, INTERMEC AND FRENCH SUBSIDIARY
Each of the Buying Entities represents and warrants to the Selling
Entities as follows, which representations and warranties shall be deemed
reaffirmed and republished on the Closing Date as if made again on and as of
the Closing Date:
4.1 CORPORATE MATTERS.
(a) DUE ORGANIZATION. Each of the Buying Entities is a
corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation.
(b) POWER AND AUTHORITY TO ENTER INTO AGREEMENT. Each of the
Buying Entities has the corporate power and authority to enter into this
Agreement and the Related Agreements to which it is a party and, subject to
the conditions provided in this Agreement, to consummate the transactions
provided for in this Agreement and such Related Agreements.
(c) DUE EXECUTION AND ENFORCEABILITY. The execution,
delivery and performance by and on behalf of each of the Buying Entities of
this Agreement and the Related Agreements to which it is a party have been
duly and validly authorized and approved by its board of directors, and no
other corporate action is necessary or required to authorize it to execute
this Agreement and such Related Agreements and to perform its obligations
under this Agreement and such Related Agreements. This Agreement
constitutes, and such Related Agreements (when executed by the parties to
them) will constitute, the valid and legally binding obligations of the
Buying Entities, enforceable in accordance with their respective terms and
conditions, except to the extent the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles.
4.2 CLAIMS, LITIGATION AND GOVERNMENTAL PROCEEDINGS. No
investigation, suit, action or other judicial or governmental proceeding is
pending or, to the best of the knowledge of the Buying Entities, threatened
before any court or governmental agency which is likely to result in the
restraint or prohibition of, or the obtaining of substantial damages in
connection with, this Agreement or the consummation of the transactions
provided for in this Agreement.
4.3 BROKER'S OR FINDER'S FEES. Except for UNOVA and its Affiliates
(and their respective directors, officers and employees), no person or firm
has arranged, or participated in arranging, on behalf of UNOVA, the
transactions provided for in this Agreement. There are no broker's or
finder's fees to be paid by UNOVA in connection with the transactions
provided for in this Agreement. UNOVA has no knowledge of, and has taken no
action which would give rise to, any claim for a broker's or finder's fee to
be
31
paid by Amtech in connection with the consummation of the transactions
provided for in this Agreement.
4.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery by each of the Buying Entities of this Agreement and the Related
Agreements to which it is a party, nor compliance by it with the terms and
provisions of such agreements, will breach or violate any applicable statute,
law, ordinance, rule or regulation of any governmental authority, domestic or
foreign, or any of the terms, conditions or provisions of the certificate of
incorporation or by-laws of any of the Buying Entities, or any judgment,
order, injunction, decree, material contract, material agreement or other
material instrument to which such Buying Entity is a party or by which any of
its properties, rights or assets are bound.
4.5 REQUIRED CONSENTS. Set forth on Schedule 4.5 is a list of any
material consent, approval or authorization of, or exemption by, or filing
with, any governmental or regulatory authority or private third party that is
required in connection with the execution, delivery and performance by the
Buying Entities of this Agreement and the Related Agreements to which either
of them is a party.
4.6 SUFFICIENT FUNDS. The Buying Entities have the financial
capability to purchase the Shares and the Purchased Assets on the terms and
subject to the conditions set forth in this Agreement and to pay the Assumed
Liabilities as they become due and payable. UNOVA has available on hand,
from its working capital or currently available credit facilities, all of the
cash that Intermec and French Subsidiary will need to consummate the purchase
of the Shares and the Purchased Assets and to pay the Assumed liabilities as
they become due and payable and will provide Intermec and French Subsidiary
with immediately available funds if necessary to enable them to satisfy all
of their payment obligations hereunder when due.
4.7 TITLE TO UNOVA SHARES. UNOVA owns the UNOVA Shares of record and
beneficially free and clear of all Liens.
4.8 INSPECTION. Each of the Buying Entities is an informed and
sophisticated participant in the transactions contemplated by this Agreement
and has been advised by persons experienced in the evaluation and purchase of
the Shares and the Purchased Assets, and along with such persons has
undertaken such investigation, and has been provided with and has evaluated
such documents and information, as the Buying Entities and their advisors
have deemed necessary to enable them to make an informed and intelligent
decision with respect to the execution, delivery and performance of this
Agreement. Anything herein to the contrary notwithstanding, each of the
Buying Entities acknowledges that the applicable Buying Entities are
acquiring the Shares and the Purchased Assets without any representation or
warranty, express or implied, by either Amtech or AI or any of their
Affiliates except as expressly set forth herein.
ARTICLE 5
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CONDUCT OF BUSINESS PENDING CLOSING DATE
With respect to the period from the Transfer Date to the Closing Date,
the Parties agree that the following provisions apply as if this Agreement
were executed on the Transfer Date:
5.1 FULL ACCESS. UNOVA and its authorized representatives shall have
reasonable access during normal business hours and upon reasonable advance
notice, but without unreasonably interrupting business, to all the premises
and to all books of account, records and properties of TSG and Amtech in
respect of the Business, including without limitation the right to inspect,
examine, audit and photocopy all such books of account and records and, in
particular, those relative to the December Financials; and (ii) Amtech shall
furnish or cause to be furnished to UNOVA and its authorized representatives
all information with respect to the business and affairs of TSG as UNOVA may
reasonably request. UNOVA shall direct all such requests for information to
the Amtech representative as follows: ▇▇▇ ▇▇▇▇▇▇▇▇, General Counsel, Amtech
Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Telephone: ▇▇▇-▇▇▇-▇▇▇▇, and Facsimile: ▇▇▇-▇▇▇-▇▇▇▇.
5.2 CARRY ON IN REGULAR COURSE. Amtech shall (and shall cause the
Acquired Subsidiaries to) carry on the Business in the ordinary course and
consistent with past practices, except to the extent of any actions taken
with the consent of UNOVA, and except as required by the provisions of this
Agreement. Amtech shall (and shall cause the Acquired Subsidiaries to)
consult with the individual designated by UNOVA to Amtech in writing as the
"UNOVA Representative" on matters pertaining to the Business which would
require the consent of the UNOVA Representative prior to Amtech or the
Acquired Subsidiaries taking any action with respect thereto under this
Article 5. Amtech shall cause the members of TSG to comply with all
reasonable directives of the individual designated by UNOVA to Amtech in
writing as the "UNOVA R&D Representative" with respect to the research and
development activities of TSG in the area of radio frequency identification.
In the event that this Agreement is terminated and the transactions provided
for in this Agreement are abandoned as contemplated by Section 10.1 or 10.2,
no Party shall be liable to any other Party for damages arising from the
actions or omissions of TSG, whether at the request or with the consent of
the UNOVA Representative, the UNOVA R&D Representative or otherwise.
5.3 NO INCREASE IN COMPENSATION OR BENEFITS. Amtech shall not (and
shall not permit the Acquired Subsidiaries to), without the prior consent of
UNOVA, (i) hire or employ any new salaried personnel of the Business (other
than pursuant to any of the Open Employment Offers listed on Schedule
3.15(h)), (ii) grant any increase in the rates of pay (other than routine
increases granted in the ordinary course of business consistent with past
practice) of the personnel of the Business, (iii) extend the duration of any
employment contract of any Employee or any consulting contract of any
consultant of the Business, or (iv) by means of any new or existing
compensation or employee benefit plan increase the compensation or amount or
level of benefits of any such Employee or consultant.
33
5.4 SALES ORDERS, BIDS AND PROPOSALS. Amtech shall not (and shall
not permit the Acquired Subsidiaries to), without the prior consent of UNOVA,
enter into any sales order, sales contract, bid or sales proposal relating to
TSG, other than (i) sales orders, sales contracts, bids and sales proposals
made in the ordinary course of business not in excess of $100,000 and which
are not bid at an anticipated loss, or (ii) any sales orders or sales
contracts which result from and are substantially in accord with a bid or
sales proposal set forth on Schedule 3.8(a).
5.5 PURCHASE ORDERS. Amtech shall not (and shall not permit the
Acquired Subsidiaries to), without the prior consent of UNOVA, enter into any
purchase order or purchase commitment relating to TSG, other than individual
purchase orders or purchase commitments made in the ordinary course of
business and not in excess of $50,000.
5.6 PATENT, TRADEMARK, TRADE NAME, COPYRIGHT AND SERVICE ▇▇▇▇
LICENSES. Amtech shall not (and shall not permit the Acquired Subsidiaries
to) negotiate or enter into any license of any patent, trademark, trade name,
service ▇▇▇▇, copyright, technology or other proprietary right, whether as
licensor or as licensee relating to TSG.
5.7 SALE OF ASSETS. Amtech shall not (and shall not permit the
Acquired Subsidiaries to), without the prior consent of UNOVA, sell or
otherwise dispose of any assets of TSG except for sales made pursuant to any
of the Sales Orders and other sales in the ordinary course of business of
individual assets with an original cost of no more than $25,000.
5.8 CAPITAL EXPENDITURES. Amtech shall not (and shall not permit the
Acquired Subsidiaries to), without the prior consent of UNOVA, make any
capital expenditures relating to TSG unless such expenditure is made pursuant
to a purchase order set forth on Schedule 3.8(b) or is less than $50,000.
5.9 INDEBTEDNESS. Amtech shall not (and shall not permit the
Acquired Subsidiaries to) create any indebtedness or guarantee or become
contingently liable for the obligations of another other than (i) in the
ordinary course of business, (ii) pursuant to existing contracts or
commitments disclosed in the Schedules, (iii) pursuant to contracts or
commitments permitted by this Agreement, or (iv) by Amtech if not related to
TSG or the Business.
5.10 OTHER CONTRACTS AND COMMITMENTS. Amtech shall not (and shall not
permit the Acquired Subsidiaries to), without the prior consent of UNOVA,
enter into any lease, agreement, undertaking, contract or commitment
involving a liability on the part of any member of TSG in excess of $100,000
or having a term in excess of one year (other than as permitted by this
Agreement). To the extent of its legal power, Amtech shall not permit ACL to
enter into any business combination with any other entity without the prior
consent of UNOVA.
5.11 INSURANCE, MAINTENANCE AND REPAIR. Amtech shall (and shall cause
the
34
Acquired Subsidiaries to) continue in full force and effect its existing
insurance and bonding coverages in respect of the properties, assets and
Employees of the Business.
5.12 PRESERVATION OF ORGANIZATION. Subject to the terms of this
Agreement, Amtech shall (and shall cause the Acquired Subsidiaries to) use
all reasonable efforts to preserve the business organization of the Business
intact, to keep available to Intermec and French Subsidiary the Employees, to
maintain in effect all existing material qualifications, franchises,
licenses, permits, consents, authorizations and registrations of TSG and to
preserve the present relationships of TSG with its suppliers, customers and
others having business relations with it.
5.13 NO DEFAULT. Amtech shall not (and shall not permit the Acquired
Subsidiaries to) knowingly do any act or omit to do any act which would cause
a breach or violation in any material respect of any of its contracts
described in the Schedules to this Agreement.
5.14 COMPLIANCE WITH LAWS. Amtech shall (and shall cause the Acquired
Subsidiaries to) comply in all material respects with all applicable
statutes, laws, ordinances, rules and regulations as are required for the
operation of the Business.
5.15 CONSENTS. The Parties, in cooperation and after consultation and
mutual agreement, shall take all reasonable action (without payment of any
penalty or fee other than any fees required in connection with the "H-S-R
Act" (as defined in Section 6.10)) required to obtain all consents, approvals
and agreements of, and to give all notices and make all filings with, any
third parties, including governmental authorities, necessary to authorize,
approve or permit the transfer to the Buying Entities of the Shares, the
Purchased Assets and the Assumed Liabilities as provided for in this
Agreement.
5.16 CONDITIONS PRECEDENT. The Parties shall use all reasonable
efforts to assure that the conditions precedent set forth in Articles 6 and 7
are satisfied or waived on or prior to June 11, 1998, to the extent that
satisfaction of such conditions precedent is within their reasonable control.
5.17 NONDISCLOSURE BY THE BUYING ENTITIES. The Buying Entities shall
hold in confidence, and shall use all reasonable efforts to cause their
representatives to hold in confidence, between the Agreement Date and the
Closing Date, any and all confidential or secret information in respect of
the Business furnished to it or its representatives by Amtech and its
subsidiaries in connection with this Agreement and not to disclose or publish
such information without the prior consent of Amtech. In the event that this
Agreement is terminated and the transactions provided for in this Agreement
are abandoned as contemplated by Section 10.1 or 10.2, the terms of that
certain Confidentiality Agreement between Amtech and Western Atlas Inc.
("Western"), the predecessor of UNOVA, dated October 7, 1997 (the
"Confidentiality Agreement"), shall remain in full force and effect in
accordance with its terms, and each of the Buying Entities confirms that it
will comply with Western's obligations thereunder.
35
5.18 EXCLUSIVITY. Until this Agreement is terminated and the
transactions provided for in this Agreement are abandoned as contemplated by
Section 10.1 or 10.2, neither Amtech nor its agents, representatives or any
other person acting on its behalf shall, directly or indirectly, initiate
contact with, solicit or encourage any inquiries, proposals or offers by,
participate in any discussions or negotiations with, or disclose any
information concerning TSG, or otherwise assist, facilitate or encourage, any
person (other than the Buying Entities) in connection with any possible
proposal regarding a sale of substantially all of the assets or the capital
stock of TSG or any similar transaction.
(Article 6 follows)
36
ARTICLE 6
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYING ENTITIES TO CLOSE
Each and every obligation of the Buying Entities to be performed on the
Closing Date shall be subject to the satisfaction on or prior to the time of
Closing on the Closing Date of each of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. The
representations and warranties made by the Selling Entities in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made again and reaffirmed on and as of the Closing Date.
6.2 NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the financial position, operating results or assets of TSG
from that reflected or disclosed in the Schedules and Exhibits to this
Agreement.
6.3 COMPLIANCE WITH AGREEMENT. Each of the Selling Entities shall
have performed and complied in all material respects with all of the
obligations under this Agreement which are to be performed or complied with
by it on or prior to the Closing Date.
6.4 SECRETARY'S CERTIFICATE. Amtech shall have delivered to UNOVA
the certificate of the Secretary, Assistant Secretary or other authorized
officer of each of the Selling Entities certifying as of the Closing Date to
the authorization and approval of the transactions provided for in this
Agreement and the Related Agreements by duly adopted resolutions of its board
of directors.
6.5 COMPLIANCE CERTIFICATE. Amtech shall have delivered to UNOVA the
certificate of the President, a Vice President or other authorized officer of
each of the Selling Entities certifying as of the Closing Date to the
fulfillment of the conditions set forth in Sections 6.1, 6.2 and 6.3.
6.6 CERTIFICATES OF GOOD STANDING. Amtech shall have delivered to
UNOVA certificates, dated as of a date not more than 30 days prior to the
Closing Date, issued by the appropriate governmental authorities, evidencing
the good standing of each of the Acquired Subsidiaries as domestic
corporations of their respective jurisdiction of incorporation or
organization and as foreign corporations qualified to transact business in
all jurisdictions where the nature or extent of its activities or the
ownership of its assets requires qualification, except where the failure to
be so qualified would not have a material adverse effect on the business,
assets, financial condition or results of operations of such Acquired
Subsidiary.
37
6.7 NO LITIGATION. No investigation, suit, action or other judicial
or governmental proceeding shall be pending before any court or governmental
agency which is likely to result in the restraint or prohibition, or the
obtaining of substantial damages in connection with this Agreement or the
consummation of the transactions provided for in this Agreement, and no
order, judgment, injunction, decree or award of any court or governmental
agency shall be in effect forbidding or enjoining the consummation of the
transactions provided for in this Agreement.
6.8 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings,
corporate or other, to be taken by the Selling Entities in connection with
the transactions provided for in this Agreement and the Related Agreements,
and all related documents, shall be reasonably satisfactory in form and
substance to UNOVA; and Amtech shall have made available to UNOVA for
examination the originals or true and correct copies of all documents which
UNOVA may reasonably request in connection with said transactions.
6.9 OPINION OF COUNSEL FOR AMTECH. Amtech shall have delivered to
UNOVA the written opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, counsel for Amtech, dated
the Closing Date and addressed to UNOVA, in the form of Exhibit F.
6.10 CONSENTS AND APPROVALS. The Parties shall have obtained all
necessary and material authorizations, consents and approvals required for
the valid consummation of the transactions provided for in this Agreement,
and each of them shall be in full force and effect, and all applicable
waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "H-S-R Act") shall have expired or been terminated.
6.11 NONSOLICITATION AGREEMENTS. Each of Cardkey Systems, Inc.,
Cardkey Systems Ltd., Amtech Europe Limited, Cotag International Limited,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively, the "Restricted
Parties") shall have executed and delivered to UNOVA, for execution by UNOVA,
a nonsolicitation agreement, substantially in the form set forth as Exhibit G
(a "Nonsolicitation Agreement").
6.12 ELIMINATION OF LIENS. Amtech shall have caused any material Lien
(other than Permitted Liens) on any of the properties, rights or assets of
any member of TSG to be eliminated.
6.13 RESIGNATION OF DIRECTORS AND OFFICERS. Amtech shall cause all of
the directors and officers of the Acquired Subsidiaries (other than those
officers designated by UNOVA within three days prior to the Closing Date to
remain) to resign effective as of the Closing.
6.14 CERTIFIED COPIES OF ARTICLES AND BY-LAWS. Amtech shall have
delivered to UNOVA certified copies of the articles of incorporation and
by-laws (or their substantial equivalents), as amended and in effect, of each
of the Acquired Subsidiaries.
38
ARTICLE 7
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLING ENTITIES TO CLOSE
Each and every obligation of the Selling Entities to be performed on the
Closing Date shall be subject to the satisfaction on or prior to the time of
Closing on the Closing Date of each of the following conditions:
7.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. The
representations and warranties made by the Buying Entities in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made again and reaffirmed on and as of the Closing Date.
7.2 COMPLIANCE WITH AGREEMENT. Each of the Buying Entities shall
have performed and complied in all material respects with all of the
obligations under this Agreement which are to be performed or complied with
by it on or prior to the Closing Date.
7.3 SECRETARY'S CERTIFICATE. UNOVA shall have delivered to Amtech
the certificate of the Secretary or Assistant Secretary of each of the Buying
Entities certifying as of the Closing Date to the authorization and approval
of the transactions provided for in this Agreement and the Related Agreements
by duly adopted resolutions of its board of directors.
7.4. COMPLIANCE CERTIFICATE. UNOVA shall have delivered to Amtech the
certificate of a Vice President of UNOVA certifying as of the Closing Date,
on behalf of each of the Buying Entities, to the fulfillment of the
conditions set forth in Sections 7.1 and 7.2.
7.5 NO LITIGATION. No investigation, suit, action or other judicial
or governmental proceeding shall be pending before any court or governmental
agency which is likely to result in the restraint or prohibition, or the
obtaining of substantial damages in connection with this Agreement or the
consummation of the transactions provided for in this Agreement, and no
order, judgment, injunction, decree or award of any court or governmental
agency shall be in effect forbidding or enjoining the consummation of the
transactions provided for in this Agreement.
7.6 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings,
corporate or other, to be taken by the Buying Entities in connection with the
transactions provided for in this Agreement and the Related Agreements, and
all related documents, shall be reasonably satisfactory in form and substance
to Amtech; and UNOVA shall have made available to Amtech for examination the
originals or true and correct copies of all documents which it may reasonably
request in connection with said transactions.
39
7.7 OPINION OF COUNSEL FOR UNOVA. UNOVA shall have delivered to
Amtech the written opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Senior Vice President
and General Counsel of UNOVA, dated the Closing Date and addressed to Amtech,
in the form of Exhibit I.
7.8 CONSENTS AND APPROVALS. The Parties shall have obtained all
necessary and material authorizations, consents and approvals required for
the valid consummation of the transactions provided for in this Agreement,
and each of them shall be in full force and effect, and all applicable
waiting periods under the H-S-R Act shall have expired or been terminated.
7.9 DALLAS SUBLEASE. Intermec shall have executed and delivered to
Amtech, for execution by Amtech, a sublease in the form of Exhibit J (the
"Dallas Sublease"), pursuant to which Amtech will sublease from Intermec a
portion of the Dallas Property for no less than 90 days at a rate of $1 and
otherwise on the terms and conditions provided for in the Dallas Sublease.
7.10 PERFORMANCE BONDS. UNOVA shall have provided evidence reasonably
satisfactory to Amtech that on or promptly following the Closing, the credit
of UNOVA will be substituted for that of Amtech underlying the Performance
Bonds other than the Amtech Remaining Guarantees.
7.11 FAIRNESS OPINION. Amtech shall have received a fairness opinion
in form and substance reasonably satisfactory to the Amtech Board.
(Article 8 follows)
40
ARTICLE 8
COVENANTS OF THE PARTIES
8.1 ACCESS TO BOOKS AND RECORDS. From and after the Closing Date,
(i) Amtech and its authorized representatives shall have reasonable access,
during normal business hours and upon reasonable notice, to inspect and
examine and the right to photocopy all books of account and records of the
TSG that were acquired by Intermec and French Subsidiary pursuant to this
Agreement and which relate to the affairs and business of TSG conducted on or
prior to the Transfer Date (and following the Transfer Date, to the extent
relevant to the performance by the Selling Entities of their obligations
under this Agreement); PROVIDED that such inspection, examination and
photocopying shall be conducted so as not to unreasonably interfere with the
Business, and (ii) UNOVA and its authorized representatives shall have
reasonable access, during normal business hours and upon reasonable notice,
to inspect and examine and the right to photocopy all books of account and
records of the Selling Entities that were retained by the Selling Entities
pursuant to this Agreement and which relate to the affairs and business of
TSG conducted on or prior to the Transfer Date; PROVIDED that such
inspection, examination and photocopying shall be conducted so as not to
unreasonably interfere with the business of the Selling Entities.
8.2 FURTHER INSTRUMENTS AND ASSURANCES. From and after the Closing
Date, the Parties shall execute and deliver, or cause to be executed and
delivered, to each other such further instruments and shall take such other
action as may be reasonably required to fully and effectively carry out the
transactions contemplated by this Agreement and the Related Agreements.
8.3 NONDISCLOSURE BY AMTECH. Each of the Selling Entities covenants
and agrees that for a period of four years from and after the Transfer Date,
it shall hold in confidence (and shall use reasonable efforts to cause its
officers, directors and Affiliates to hold in confidence) any and all
proprietary, confidential or secret information or data of the Selling
Entities in respect of the Business and not to disclose, publish or use the
same unless (i) such disclosure or publication is required by law or any
stock exchange or inter-dealer quotation system on which the securities of
Amtech are traded, (ii) the prior written consent of UNOVA has been obtained,
or (iii) the same has been theretofore publicly disclosed by any of the
Buying Entities or otherwise ceased to be secret or confidential as evidenced
by general public knowledge.
8.4 LITIGATION COOPERATION. In the event that any Party shall
participate in any suit, action, proceeding or investigation concerning the
Business conducted on or prior to the Transfer Date (excluding any such suit,
action, proceeding or investigation between Amtech, on the one hand, and
UNOVA or Intermec, on the other hand), the Parties shall, upon the request of
the Party involved in such litigation, cooperate fully with such Party at
such Party's expense in connection therewith, except to the extent that such
litigation
41
arises from a breach by any such Party of any representation, warranty,
covenant or agreement contained in this Agreement and the Related Agreements.
8.5 CERTAIN EMPLOYEE MATTERS.
(a) EMPLOYMENT AND EMPLOYEE BENEFITS. Subject to Section
8.5(d) below, French Subsidiary shall offer employment as of the Closing Date
to substantially all of the employees of AI. Those employees who accept such
offer and all employees of the members of TSG other than AI are referred to
collectively as the "Continuing Employees." UNOVA shall credit the
Continuing Employees with years of continuous service with Amtech for
purposes of eligibility and vesting under UNOVA's employee benefit plans, to
the extent permitted under the terms of such plans. Amtech shall cease
accrual of benefits with respect to any Continuing Employee under any of its
employee benefit plans. Amtech shall cause all unvested deposits of the
Continuing Employees in Amtech's 401(k) plan to become vested as of the
Closing Date. UNOVA shall offer all Continuing Employees the opportunity to
enroll in UNOVA's 401(k) plan (the "FSSP") subject to the enrollment
requirements of the FSSP. As soon as UNOVA shall have reasonably concluded
that Amtech's 401(k) plan is tax-qualified, it shall cause the FSSP to accept
the direct rollover of the pre-tax account balance for a Continuing Employee
under Amtech's 401(k) plan, whether or not such Continuing Employee elects to
enroll as an active participant in the FSSP.
(b) CERTAIN RETAINED RESPONSIBILITY. AI shall bear and
discharge any and all liability to any present or former employee of AI
arising from his or her employment by AI (i) accrued on or prior to the
Closing Date, except for the Assumed Employee Obligations, or (ii) arising as
a consequence of the Closing. Subject to Section 8.5(d) below, Amtech and
the Remaining Amtech Subsidiaries shall bear and discharge any and all
liability to each of their former employees arising from his or her
employment prior to the Closing Date by Amtech or such Acquired Amtech
Subsidiary.
(c) WARN ACT. The Selling Entities shall comply with the
applicable provisions of the Worker Adjustment and Retraining Notification
Act of 1988 (the "WARN Act") and any similar federal, state or local law, if
any, at all times prior to the Closing Date. The Buying Entities shall
comply with the applicable provisions of the WARN Act and any similar
federal, state or local law, if any, at all times following the Closing Date.
(d) CERTAIN SEVERANCE LIABILITY. In the event that French
Subsidiary does not offer employment to all of the employees of AI (those to
whom it does not offer employment are referred to as the "Rejected
Employees"), UNOVA shall be responsible for the statutory severance payable
to all Rejected Employees who are full-time, salaried employees on the
Agreement Date, up to a maximum of nine such Rejected Employees.
8.6 COLLECTION AND REPURCHASE OF ACCOUNTS RECEIVABLE.
42
(a) COLLECTION OF ACCOUNTS RECEIVABLE. On the date of
delivery of the Preliminary Closing Balance Sheet, Amtech shall deliver to
Intermec listings of the invoices and the unpaid amount of each and any other
items making up the total billed accounts receivable included on the
Preliminary Closing Balance Sheet. During the 180-day period following the
Transfer Date (the "Collection Period"), Intermec shall (and shall cause the
relevant members of TSG to) use the normal collection procedures used in the
Business (but in no event shall any of them be obligated to file or perfect
any liens or file or prosecute any suit as part of its collection effort) to
collect all billed accounts, notes and drafts receivable which are legally
due under the relevant contract and which will be included in the Final
Closing Balance Sheet (the "Transfer Date Receivables"). For purposes of the
foregoing sentence, "legally due under the relevant contract" means the
amount billed excluding any retention permitted under such contract until the
conditions of such retention are fulfilled. Any payments received by
Intermec or French Subsidiary or any member of TSG from any person who is the
account debtor on any of the Transfer Date Receivables (a "Customer") shall
be applied as specified by the Customer, unless it is uncertain which invoice
is being paid, in which case, payments shall be applied in the order of the
oldest invoice first. Amtech shall promptly remit to Intermec any payments
that it or any of the Remaining Amtech Subsidiaries may receive in respect of
any of the Transfer Date Receivables. Intermec and French Subsidiary shall
(and shall cause the relevant members of TSG to) make and keep detailed
records of amounts collected in respect of the Transfer Date Receivables
until such time as the "Uncollected Receivables" (as defined in paragraph (b)
below) are assigned to Amtech pursuant to paragraph (b) below.
(b) REPURCHASE OF ACCOUNTS RECEIVABLE. Promptly following
the expiration of the Collection Period, Intermec shall deliver to Amtech a
statement setting forth (i) a list and description of the Transfer Date
Receivables that were not collected during the Collection Period (the
"Uncollected Receivables"), and (ii) a schedule setting forth the calculation
of the aggregate amount of Uncollected Receivables LESS the reserve provided
for Uncollected Receivables on the Final Closing Balance Sheet PLUS interest
on such net amount from the Closing Date to the date of payment to Intermec
at the Purchase Price Adjustment Interest Rate. Within 10 business days
following Amtech's receipt of such statement, Amtech shall pay to Intermec,
by wire transfer of immediately available funds, the amount of such
statement, including applicable interest, and upon receipt of such payment,
Intermec and French Subsidiary shall (and shall cause the relevant members of
TSG to) assign without recourse the Uncollected Receivables to Amtech.
Following such assignment, (i) Intermec and French Subsidiary shall (and
shall cause the relevant members of TSG to) remit to Amtech any payments it
shall receive on such Uncollected Receivables, and (ii) Amtech shall consult
with Intermec prior to instituting any legal proceedings or taking any other
extraordinary measures to collect the Uncollected Receivables, and if
requested by Intermec, shall refrain from instituting such legal proceedings
or taking such other extraordinary measures if Intermec, French Subsidiary
or the relevant member of TSG retains or repurchases the Uncollected
Receivable in question.
8.7 CHANGE OF AMTECH NAME. Within ten business days following the
Closing
43
Date, Amtech shall adopt a fictitious name (the "DBA") that does not include
"Amtech" or derivations thereof. Promptly following the Closing Date, Amtech
shall make all appropriate filings with respect to the DBA in all counties in
which Amtech or the Remaining Amtech Subsidiaries conduct business under the
name Amtech. At the sooner of the first annual meeting of Amtech's
shareholders held after the Closing Date or August 30, 1998, Amtech shall
submit to its shareholders a proposal that they approve Amtech's change of
its corporate name to a name that does not include "Amtech" or derivations
thereof (the "Corporate Name Change"), and shall recommend approval of such
proposal. As promptly as practicable after the Closing Date, Amtech shall
cause each of the Remaining Amtech Subsidiaries whose name includes the word
"Amtech" to change its corporate name to a name that does not include the
word "Amtech" or derivations thereof. From and after the Closing Date,
Amtech and AI shall (and shall cause the Remaining Amtech Subsidiaries to)
cease to use the name "Amtech" or "Amtech Corporation" or derivations
thereof, except (i) as necessary to effect the name changes provided for in
the foregoing sentence, (ii) in connection with its trading symbol prior to
the effectiveness of the Corporate Name Change, (iii) in connection with any
required use of its legal name (rather than the DBA) prior to the
effectiveness of the Corporate Name Change, and (iv) to use up existing
stationery, packing, shipping, invoices, purchase orders and similar supplies
which bear the name "Amtech" for the period necessary to exhaust such
supplies, but in no event longer than the later of the date of the
effectiveness of the Corporate Name Change and six months from and after the
Transfer Date; PROVIDED, HOWEVER, that from and after the tenth business day
following the Closing Date, Amtech and AI shall (and shall cause the relevant
Remaining Amtech Subsidiaries to) overprint, overstamp, apply an appropriate
label or otherwise obliterate the name "Amtech" on such items; and PROVIDED,
FURTHER, HOWEVER, that from and after the Closing Date, neither Amtech nor AI
shall (and shall not permit any of the Remaining Amtech Subsidiaries to)
represent or hold itself out to the public as representing or being
affiliated with TSG; and PROVIDED, FURTHER, HOWEVER, that Amtech shall
indemnify, defend and hold harmless the "Buying Interests" from any "Loss"
(as such terms are defined in Section 11.1) suffered by any of the Buying
Interests as a result of use of the name "Amtech" (or derivations thereof)
following the Closing Date.
8.8 PERFORMANCE BONDS. UNOVA shall after the Agreement Date use its
best efforts to substitute effective as of the Closing its credit for the
credit of Amtech securing the obligations of any member of TSG under any of
its or their executory contracts (the "Performance Bonds"), including without
limitation those contracts and agreements set forth on Schedules 3.8(h) and
(j) but excluding Performance Bonds identified on Schedule 3.8(h) as the
"Amtech Remaining Guarantees." Pending such substitution, Amtech shall keep
the Performance Bonds in full force and effect. SEE Section 11.2(d)
regarding indemnification in connection with the Performance Bonds.
8.9 COLLECTION OF BRAZILIAN NOTES. As and when payments of principal
and interest are made to AWC under the Brazilian Notes, Intermec shall cause
AWC to promptly remit such amounts to Amtech. At any time after the Closing,
at the option of Amtech, which shall be exercised, if at all, by giving
written notice to UNOVA, UNOVA
44
shall cause AWC to assign to Amtech or its designee legal title to the
Brazilian Notes.
8.10 IMMUNITY FROM INFRINGEMENT. UNOVA shall not (and shall not
permit any of its subsidiaries, including the members of TSG following the
Closing Date, to) ▇▇▇ Amtech or any of the Remaining Amtech Subsidiaries (for
so long as such Remaining Amtech Subsidiaries are Affiliates of Amtech) for
infringement of any Intellectual Property presently owned by or assigned to
any member of TSG or assigned to UNOVA or any of its subsidiaries pursuant to
this Agreement, to the extent that such infringement is caused by the
manufacture, use or sale of products of Amtech or the Remaining Amtech
Subsidiaries, which products exist on the Closing Date.
8.11 THAILAND AND BEFIC INVENTORY. In the event that following the
Closing Date, any of the Buying Entities or any member of TSG shall sell any
of the inventories related to the Thailand or BEFIC contracts, which
inventories shall be fully reserved on the Final Closing Balance Sheet
pursuant to Section 1.7(a)(ii) and Exhibit A-2, UNOVA shall pay to Amtech an
amount (the "Inventory Payment") equal to eighty percent (80%) of the "Net
Proceeds" (as hereinafter defined) of such sale; PROVIDED, HOWEVER, that in
no event will the Inventory Payment be less than fifty percent (50%) of the
original inventory value less the "Deductions" (as hereinafter defined).
"Net Proceeds" shall mean the sales price received less the following (the
"Deductions"): any selling, general or administrative expenses directly
related to such inventory, and costs required to be invested in such
inventory to make it saleable, and any shipping costs. In the event that such
inventory shall not have been sold prior to December 31, 1999, Amtech will
have the right until March 31, 2000 to have such inventory delivered to
Amtech, at its expense.
8.12 TEXAS RANGERS. Prior to the conclusion of the 1998 season and
subsequent to the Closing Date, UNOVA shall be entitled to receive, upon
request, tickets to the Texas Rangers games and access to Amtech's suite at
the Ballpark at Arlington up to an aggregate value of $20,000. UNOVA shall
have no liability or obligation related to such tickets subsequent to the
conclusion of the 1998 season.
8.13 AGREEMENTS REGARDING CERTAIN CONTRACTS. If any of the Selling
Entities or any member of TSG expects to incur warranty costs on the
Thailand, Kansas Turnpike or Georgia 400 contracts, in each case, in excess
of the amount of the respective warranty reserves provided for such contracts
on the Final Closing Balance Sheet, UNOVA shall request Amtech's prior
written consent to incur such costs ("Excess Warranty Costs"), which consent
shall not be unreasonably withheld or delayed. Following UNOVA's receipt of
such consent by Amtech, such Selling Entity or member of TSG may incur such
Excess Warranty Costs, and Amtech shall pay to UNOVA the amount of such
Excess Warranty Costs actually incurred by such Selling Entity or member of
TSG. Separately, if the Thailand customer pays for, or returns, all or a
portion of the 10,100 tags advanced to it by Amtech, UNOVA shall remit to
Amtech the gross profit or inventory value on such tags up to a maximum
payment of $100,000.
(Article 9 follows)
45
ARTICLE 9
NONCOMPETITION AND NONSOLICITATION AGREEMENT
9.1 NONCOMPETITION AGREEMENT. For and in consideration of the
benefits to be derived, directly and indirectly, from this Agreement, each of
the Selling Entities covenants and agrees that for the period beginning on
the Closing Date and ending five years following the Transfer Date, it shall
not (and shall not permit any of the Remaining Amtech Subsidiaries to) (the
Selling Entities and the Remaining Amtech Subsidiaries are referred to
collectively as the "Restricted Parties"), directly or indirectly, as
principal, partner, joint venturer, shareholder, investor, owner, employee,
officer, director or consultant or otherwise own, manage, operate, finance,
control, engage in, consult with in respect of a Competitive Business or
otherwise participate in the ownership, management, operation, research,
development, financing or control of (each of the foregoing is referred to as
a "Prohibited Affiliation"), any business activity included within the
"Competitive Business" (as defined in Section 9.4) at any place or locale
worldwide. Amtech further agrees to enforce for the benefit of UNOVA and its
subsidiaries any noncompetition or nonsolicitation covenants of any of the
officers and directors of Amtech or the Remaining Amtech Subsidiaries to the
extent such covenants would be breached if such officers and directors were
Restricted Parties bound by the provisions of this Article 9.
9.2 LIMITATIONS ON NONCOMPETITION AGREEMENT.
(a) None of the Restricted Parties shall be prohibited from
(i) entering into a Prohibited Affiliation with respect to any corporation,
partnership or other business entity (a "Company") partially engaged in the
Competitive Business, PROVIDED that such activities do not generate more than
fifteen percent (15%) of the revenues or represent more than fifteen percent
(15%) of the assets of such Company or PROVIDED that such Prohibited
Affiliation is not with respect to the Competitive Business activities of the
Company, (ii) the ownership of not more than ten percent (10%) of any class
of debt or equity securities of any Company engaged in the Competitive
Business, provided that such securities are listed on a stock exchange or
traded in an inter-dealer quotation system, (iii) entering into any
Prohibited Affiliation with the express written consent of UNOVA, (iv) the
continued conduct of the "ESG Business" which for purposes of this Agreement
shall mean the design, manufacture, supply, installation, service and support
of the products, software and systems for all forms of electronic security,
security management, access control of all types (including vehicle control
and parking using microwave RFID systems designed and manufactured by third
parties), time, attendance and video badging, asset management, shop floor
data collection and monitoring and all applications for RFID products and
systems operating at frequencies of less than 30 MHz, or (v) the sale of the
ESG Business to a Competitive Business.
(b) In the event that any provision of this Article 9 shall
be held invalid, illegal, void, inoperative or unenforceable in an
arbitration pursuant to Section
46
12.15 by reason of the geographic or business scope or the duration of such
provision, such invalidity, illegality or unenforceability shall attach only
to the scope or duration of such provision and shall not affect or render
invalid, illegal, void, inoperative or unenforceable any other provision of
this Agreement, and, to the fullest extent permitted by law, this Agreement
shall be construed as if the geographic or business scope or the duration of
such provision had been more narrowly drafted so as not to be invalid,
illegal, void, inoperative or unenforceable.
9.3 NONSOLICITATION. Each of the Selling Entities covenants and
agrees that for a period of two years following the Closing Date (the
"Nonsolicitation Period"), it shall not (and shall not permit any of the
other Restricted Parties (for so long as they are Affiliates of Amtech) to)
solicit, encourage or induce any customer, supplier, agent, sales
representative, consultant, employee or licensee of any "UNOVA Company" (as
defined in Section 9.5 below) to discontinue his, her or its business
relationships with any UNOVA Company in respect of the Business. Each of the
Selling Entities further covenants and agrees that during the Nonsolicitation
Period, such Selling Entity shall not solicit, as an employee, independent
contractor or otherwise, or hire any Continuing Employee or any individual
who on the Agreement Date is an employee of a UNOVA Company (other than such
persons who have resigned from employment entirely of their own accord at
least six months prior to any solicitation or hiring by any of the Selling
Entities or have been involuntarily terminated) and, in each case, who is at
such time or has been within six months prior thereto an employee of any
UNOVA Company in respect of the Business except with the prior written
consent of UNOVA or by means of general advertising.
9.4 DEFINITION OF COMPETITIVE BUSINESS. The term "the Competitive
Business" shall mean the business of microwave radio frequency identification
technology design or development, or both, including without limitation
microwave wireless data systems for electronic toll collection, rail or
intermodal, or the manufacture, sale or servicing of such technologies,
including without limitation software development, systems integration or
transaction processing services related to such microwave wireless data
systems. For purposes of this paragraph, "microwave" shall mean a frequency
of 300 MHz or higher.
9.5 DEFINITION OF UNOVA COMPANY. The term "UNOVA Company" shall mean
Intermec and each of its subsidiaries as of the Closing Date and French
Subsidiary and the members of TSG and ACL following the Closing Date).
9.6 INJUNCTIVE AND EQUITABLE RELIEF. Each of the Selling Entities
agrees that the remedy of damages for any breach of Article 9 may be
inadequate and that in the event of any such breach by any of the Selling
Entities (as determined by arbitration under Section 12.15), any of the
Buying Entities or any of the UNOVA Companies that is affected by such breach
shall be entitled to injunctive relief in addition to any other remedy, at
law, in equity or under this Agreement to which it may be entitled.
47
9.7 BENEFIT OF NONCOMPETITION AGREEMENT. Notwithstanding anything in
this Agreement to the contrary, this Article 9 is for the benefit of each of
the Buying Entities and each UNOVA Company that is engaged in the Business,
and the provisions of this Article 9 may be enforced by any such entity as if
it had been a named party to this Agreement.
(Article 10 follows)
48
ARTICLE 10
TERMINATION
10.1 PERMITTED TERMINATION. This Agreement may be terminated
immediately upon the receipt of notice of termination as provided for in
Section 10.3, and the transactions provided for in this Agreement may be
abandoned, without liability on the part of the Party effecting such
termination:
(a) By mutual written consent of Amtech and UNOVA;
(b) By either UNOVA or Amtech, if the purchase and sale of
the Shares and the Purchased Assets as provided for in this Agreement has not
been consummated (for any reason other than a breach of any representation,
warranty, covenant or agreement contained in this Agreement by the Party
seeking to so terminate) on or before June 11, 1998;
(c) By UNOVA, if any of the conditions of Article 6 of this
Agreement have not been satisfied on or before June 11, 1998 and have not
been waived by UNOVA in writing;
(d) By Amtech, if any of the conditions of Article 7 of this
Agreement have not been satisfied on or before June 11, 1998 and have not
been waived by Amtech in writing;
(e) By UNOVA, if any of the Selling Entities files on or
before the Closing Date a petition in bankruptcy, reorganization, liquidation
or receivership or a petition in bankruptcy, reorganization or receivership
is filed on or before the Closing Date against any of the Selling Entities;
(f) By Amtech, if any of the Buying Entities files on or
before the Closing Date a petition in bankruptcy, reorganization, liquidation
or receivership or a petition in bankruptcy, reorganization or receivership
is filed on or before the Closing Date against any of the Buying Entities; or
(g) By either Amtech or UNOVA if an order is issued that
prohibits or enjoins the Closing and becomes final and non-appealable.
10.2 BREAK-UP FEES. If either Amtech or UNOVA terminates this
Agreement for any reason other than those specified in Section 10.1, the
Party so terminating this Agreement shall pay to the other Party a fee of
$300,000, UNLESS the reason for termination is due to the failure of a
condition precedent to such terminating Party's obligation to Close that was
not within such terminating Party's reasonable control.
49
10.3 NOTICE OF TERMINATION. Any Party terminating this Agreement in
accordance with Section 10.1 or Section 10.2 shall give the other Parties
prompt written notice of termination, setting forth in reasonable detail the
cause of termination.
(Article 11 follows)
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ARTICLE 11
INDEMNIFICATION
11.1 INDEMNIFICATION BY AMTECH AND AI. In order to induce the Buying
Entities to enter into this Agreement and to consummate the transactions
contemplated hereby, Amtech and AI each covenants and agrees to and shall
indemnify the Buying Entities and their respective officers, directors and
Affiliates (collectively, the "Buying Interests") and shall hold the Buying
Interests harmless against and with respect to any and all losses, damages,
costs or expenses (including without limitation those incurred in connection
with all related investigations, defenses, settlements, judgments and
reasonable attorneys' fees and costs) except to the extent specifically
provided for on the Final Closing Balance Sheet ("Losses" or individually a
"Loss") suffered or incurred by the Buying Interests and resulting from or
arising out of:
(a) MISREPRESENTATION OR BREACH OF WARRANTY. Any
misrepresentation or breach of warranty by any of the Selling Entities of any
of its representations or warranties set forth in this Agreement (including
the Schedules and Exhibits), the Related Agreements or in any certificate
delivered to any of the Buying Entities pursuant to or in connection with
this Agreement;
(b) BREACH OF COVENANT OR AGREEMENT. Any breach or
nonfulfillment by any of the Selling Entities of any of its covenants,
agreements or other obligations set forth in this Agreement (including the
Schedules and Exhibits) or the Related Agreements;
(c) TAXES. (i) Any liability of any of the Selling Entities
or any member of TSG for Taxes for any taxable year or taxable period (or
portion thereof) ending on or prior to the Transfer Date but excluding any
liability caused by the actions of the Buying Entities after the Closing (for
this purpose, the taxable year of any entity taxed as a partnership, in which
any of the Selling Entities or any member of TSG owns an interest, shall be
deemed to end on the Transfer Date) or for any Tax attributable to the
Election or to an election under state, local or foreign law similar to the
election available under Section 338(h)(10) of the Code with respect to the
purchase and sale of the Shares; and (ii) any several liability of the
Selling Entities under Treasury Regulation 1.1502-6 or any similar provision
of state, local or foreign law for Taxes of any person other than UNOVA and
its subsidiaries after the Transfer Date for any period.
(d) PRODUCT LIABILITY. Product Liability arising out of any
product sold by, or any service rendered by, any member of TSG on or prior to
the Transfer Date;
(e) EMPLOYEE CLAIMS. Any claim or other legal recourse by
any present or former employee of any member of TSG (i) arising from his or
her employment with such member of TSG at any time prior to the time of
Closing on the Closing Date, except for the Assumed Employee Obligations, or
(ii) arising as a consequence of the transactions provided for in this
Agreement;
51
(f) UNASSUMED LIABILITIES. Any of the Unassumed Liabilities;
(g) MATERIAL CONTRACT DEFAULTS. Any material breach
occurring on or prior to the Transfer Date of any of the material executory
contracts of any member of TSG, except to the extent that the consequences of
such default are reflected in the Final Closing Balance Sheet;
(h) VIOLATION OF LAWS. The violation prior to the Transfer
Date by Amtech in respect of the Business or any member of TSG of any
applicable foreign, federal, state or local laws, regulations, orders,
judgments, injunctions, awards or decrees;
(i) ENVIRONMENTAL LIABILITY. Any debt, liability or
obligation of Amtech in respect of the Business or any member of TSG arising
under the Environmental Laws and based upon any activities or conditions
which occurred or existed on or prior to the Transfer Date, or for any
Environmental Activity occurring on or prior to the Transfer Date;
(j) INFRINGEMENT. Subject to Section 8.10, "Third Party
Claims" (as defined in Section 11.3) arising from the infringement occurring
on or prior to the Transfer Date of any patents, trade names, trademarks,
service marks, copyrights, Software, know-how, industrial property,
technology or other proprietary rights of others by any method, process,
procedure, apparatus, or equipment used by Amtech in the Business or any
member of TSG;
(k) LITIGATION. Any complaint, action or proceeding brought
by any third party arising from the acts or omissions of Amtech in respect of
the Business or any member of TSG on or prior to the Transfer Date;
(l) AMGT LIABILITIES. Any debt, liability or obligation of
AMGT that is not reflected on the Final Closing Balance Sheet;
(m) GEC ALSTHOM TRANSPORT. Any amount paid for the late
delivery of equipment to SNCF (direction des Achats) in excess of the amount
provided for such penalty on the Final Closing Balance Sheet; PROVIDED,
HOWEVER, that Amtech shall have the right to approve in advance the
settlement of any dispute with the customer with respect to such penalty to
the extent that such settlement exceeds the amount of such reserve;
(n) WAVENET LIABILITIES. Any debt, liability or obligation
arising from WaveNet International, Inc. ("WaveNet"), a former subsidiary of
Amtech, or as a consequence of the disposition of WaveNet; and
(o) CHANGE OF CONTROL PAYMENTS. Any Change of Control
Payments that are not reflected on the Final Closing Balance Sheet.
11.2 INDEMNIFICATION BY UNOVA AND INTERMEC. In order to induce Amtech
to enter into this Agreement and to consummate the transactions contemplated
hereby, each
52
of UNOVA and Intermec covenants and agrees to and shall indemnify the Selling
Entities and their respective officers, directors and Affiliates
(collectively, the "Selling Interests") and shall hold the Selling Interests
harmless against and with respect to any and all Losses suffered or incurred
by the Selling Interests and resulting from or arising out of:
(a) MISREPRESENTATION OR BREACH OF WARRANTY. Any
misrepresentation or breach of warranty by any of the Buying Entities of any
of its representations or warranties set forth in this Agreement (including
the Schedules and Exhibits), the Related Agreements or in any certificate,
document or instrument delivered to any of the Buying Entities pursuant to or
in connection with this Agreement and the Related Agreements;
(b) BREACH OF COVENANT OR AGREEMENT. Any breach or
nonfulfillment by any of the Buying Entities of any of its covenants,
agreements or other obligations set forth in this Agreement (including the
Schedules and Exhibits) or the Related Agreements;
(c) ASSUMED LIABILITIES. Any of the Assumed Liabilities,
except to the extent that any of the Buying Interests is entitled to
indemnification from Amtech or AI under Section 11.1 with respect to such
Loss;
(d) PERFORMANCE BONDS. Any of the Performance Bonds or the
Dallas Lease, to the extent such Loss arises after the Transfer Date;
(e) POST CLOSING OPERATIONS. The operation of the Business
by Intermec and its subsidiaries (including the members of TSG following the
Closing Date), except to the extent that any of the Buying Interests are
entitled to indemnification with respect to such matter under Section 11.1;
(f) PRODUCT LIABILITY. Product Liability arising out of any
product sold by, or any service rendered by, any member of TSG after the
Transfer Date; and
(g) CHANGE OF CONTROL PAYMENTS. Any Change of Control
Payments that are reflected on the Final Closing Balance Sheet.
11.3 CLAIMS FOR REIMBURSEMENT. In the event that any of the Buying
Interests or the Selling Interests shall have (i) suffered any Loss, or (ii)
received any notice of the commencement of any action, proceeding or
investigation or the making of any claim or demand by a third party (a "Third
Party Claim"), in each case, in respect of which indemnification may be
sought by such party pursuant to this Article 11, the party who shall have
suffered such Loss or received such notice of such Third Party Claim and who
shall seek indemnification in respect thereof (the "Indemnified Party") shall
give Amtech or UNOVA, as the case may be (the "Indemnifying Party"), prompt
written notice of such Loss or Third Party Claim setting forth in reasonable
detail such information as it shall have pertaining thereto and the
Indemnified Party's demand for indemnification in respect thereof.
53
In the case of Third Party Claims, written notice thereof shall
be given to the Indemnifying Party as promptly as practicable; PROVIDED,
HOWEVER, that the failure of any Indemnified Party to give timely notice
shall not affect rights to indemnification hereunder if (i) such failure to
give timely notice does not materially affect the ability or right of the
Indemnifying Party to defend such Third Party Claim and the Indemnifying
Party is not otherwise materially prejudiced thereby, and (ii) actual notice
is given to the Indemnifying Party within a reasonable time.
The Indemnifying Party shall have 30 days from the date of
receipt of said notice (the "Investigation Period") to investigate and
dispute the nature, validity or amount of any such claim of Loss or Third
Party Claim. During the Investigation Period, the Indemnified Party shall
cooperate with the Indemnifying Party for the purpose of such investigation
and, without limitation, the Indemnified Party shall make available to the
Indemnifying Party the information relied upon by the Indemnified Party to
substantiate the Indemnified Party's claim, and the Indemnifying Party shall
have reasonable access, during normal business hours, to the books, records
and other documents of the Indemnified Party relating to such claim and shall
have the right to take copies at its expense of such relevant books, records
and documents for the purpose of such investigation. In the event that the
Indemnifying Party shall dispute the nature, validity or amount of a claim
hereunder, the Indemnifying Party shall give the Indemnified Party written
notice of such dispute within the Investigation Period, and the relevant
Parties shall meet promptly thereafter and in good faith attempt to resolve
such dispute. To the extent that such Parties cannot resolve any dispute by
agreement within 21 days following such notice of dispute, such dispute shall
be resolved pursuant to Section 12.15.
In the absence of a dispute, the Indemnifying Party shall
promptly, and in any event not later than the expiration of the Investigation
Period, reimburse the Indemnified Party in full for such Loss, as set forth
in the notice. In the event that the Indemnifying Party shall dispute only
the amount (and not the validity) of the claim, the Indemnifying Party shall,
concurrently with the delivery of its notice of dispute, pay to the
Indemnified Party any undisputed portion of the claim.
11.4 DEFENSE AND SETTLEMENT OF THIRD-PARTY CLAIMS. In the event of a
Third Party Claim, if the Indemnifying Party acknowledges that, as between it
and the Indemnified Party, it is obligated to indemnify the Indemnified Party
in connection with such Third Party Claim, then such Indemnifying Party shall
have the option to take control of the defense and investigation of such
Third Party Claim, and to employ and engage attorneys of its own choice to
handle and defend the same, at the Indemnifying Party's sole cost, risk and
expense (the "Direct Litigation Option"). The Indemnifying Party may elect
to exercise the Direct Litigation Option by giving prior written notice to
the Indemnified Party. If the Indemnifying Party so elects, the Indemnified
Party shall cooperate in all reasonable respects with the Indemnifying Party
and such attorneys in the investigation, trial and defense of such Third
Party Claim and any appeal arising therefrom and shall permit access to the
personnel of the Indemnified Party and to any relevant books, records and
documents within the possession or control of Indemnified Party in
54
connection with such claim and to take copies of such relevant materials at
the expense of the Indemnifying Party; PROVIDED, HOWEVER, that the
Indemnified Party may, at its own cost, participate in (but not control) such
investigation, trial and defense of such Third Party Claim and any appeal
arising therefrom. If the Indemnifying Party does not elect the Direct
Litigation Option, then the Indemnified Party shall defend against the Third
Party Claim in the manner it deems appropriate.
The Indemnifying Party may settle a Third Party Claim upon 30
days prior written notice (the "Settlement Review Period") to the other
Party, and such settlement shall be binding upon all the Parties; PROVIDED,
HOWEVER, that except as otherwise provided with respect to an unauthorized
"Non-Monetary Settlement" (as defined below in this Section 11.4), if within
the Settlement Review Period the Indemnified Party shall have objected to
such settlement, the Indemnifying Party shall either, at the election of the
Indemnified Party: (i) contest the claim at the expense of the Indemnified
Party (provided the Indemnified Party shall advance to the Indemnifying Party
such expenses as may subsequently be incurred), or (ii) permit the
Indemnified Party to defend the claim on its behalf and at its expense
provided that the Indemnified Party shall keep the Indemnifying Party advised
on a timely basis of all developments with respect to such claim and permit
the Indemnifying Party to participate, at its election and expense, in the
defense of such claim. Upon the resolution of a Third Party Claim a proposed
settlement of which the Indemnified Party shall have rejected as provided in
this paragraph (a "Rejected Settlement"), the Indemnifying Party's
responsibility with respect to such claim shall be limited to the amount of
the proposed settlement plus all costs and expenses incurred in connection
with the defense of such Third Party Claim on or prior to the date on which
the Rejected Settlement was rejected by the Indemnified Party.
Any settlement or finally determined claim resulting from such
contest which is made in accordance with this Section 11.4, together with the
total expenses of such contest, shall be binding on the Parties for purposes
of this Agreement.
Notwithstanding anything to the contrary contained in this
Section 11.4, the Indemnifying Party shall not, without the prior written
consent of the Indemnified Party, consent to the entry of any judgment or
enter into any settlement that (a) provides for non-monetary relief binding
on the Indemnified Party or (b) does not include an unconditional and
complete release of the Indemnified Party by the claimant (a "Non-Monetary
Settlement"). In the event that a Non-Monetary Settlement is proposed by the
Indemnifying Party and the Indemnified Party does not consent thereto, the
Indemnifying Party shall continue to be responsible for the full amount of
the costs, expenses and any settlement or judgment with respect to such Third
Party Claim in accordance with this Article 11.
11.5 LIMITATIONS ON INDEMNIFICATION.
(a) DURATION. Claims for indemnification under Section 11.1
or 11.2 must be made, if at all, prior to December 31, 2000 (the "Indemnity
Period"), except for
55
claims by a Buying Interest pursuant to Sections 11.1(a) (Misrepresentation
and Breach of Warranty), to the extent it is based on a breach of Section 3.5
(Mortgages, Security Interests, Liens, and Other Encumbrances of Title),
11.1(b) (Breach of Covenant or Agreement) and 11.1(f) (Unassumed
Liabilities), to the extent it is based on an Unassumed Liability described
in paragraphs (a), (b), (d), (e), (f), (g), (i), (k), (n) or (o) of Section
1.9 (the "Absolute Unassumed Liabilities"), which may be made at any time
prior to the tenth anniversary of the Transfer Date, and claims pursuant to
Section 11.1(c) (Taxes), which may be made at any time prior to the
expiration of the applicable statute of limitations. Indemnification
pursuant to Section 11.1 or 11.2 shall be payable after the expiration of the
Indemnity Period, so long as the claim was identified and asserted in
reasonable detail prior to such expiration. No claims for indemnification
(except as aforesaid) may be made after the expiration of the Indemnity
Period.
(b) AMOUNT.
(i) Notwithstanding anything to the contrary contained
in Section 11.1, neither Amtech nor AI shall be obligated to pay any claims
for indemnification pursuant to Section 11.1 until the aggregate of all
Losses exceeds $250,000 (the "Threshold"), except for claims pursuant to
Sections 11.1(a) (Misrepresentation and Breach of Warranty), to the extent it
is based on a breach of Section 3.5 (Mortgages, Security Interests, Liens,
and Other Encumbrances of Title), 11.1(b) (Breach of Covenant or Agreement),
11.1(c) (Taxes), and 11.1(f) (Unassumed Liabilities), to the extent it is
based on an Absolute Unassumed Liability, which are not subject to the
Threshold. After the aggregate of Losses (except as aforesaid) exceeds the
Threshold, indemnification shall be paid for the full amount of all Losses,
on a first dollar basis. Claims for indemnification pursuant to Sections
11.1(a) (Misrepresentation and Breach of Warranty), to the extent it is based
on a breach of Section 3.5 (Mortgages, Security Interests, Liens, and Other
Encumbrances of Title), 11.1(b) (Breach of Covenant or Agreement), 11.1(c)
(Taxes), and 11.1(f) (Unassumed Liabilities), to the extent it is based on an
Absolute Unassumed Liability, shall be paid from the first dollar of Loss.
(ii) Notwithstanding anything to the contrary contained
in Section 11.1, the maximum amount of indemnification that Amtech or AI
shall be obligated to pay pursuant to Section 11.1 shall be $10,000,000 (the
"Cap"), except for indemnification pursuant to Sections 11.1(c) (Taxes), and
11.1(f) (Unassumed Liabilities), to the extent it is based on an Absolute
Unassumed Liability, which are not subject to the Cap.
11.6 ACTUAL KNOWLEDGE. Neither Party shall have any liability under
this Agreement for Losses arising from or relating to a breach of any
representation or warranty if the Indemnifying Party can establish that the
Indemnified Party had actual knowledge on or before the Closing Date of the
condition or event constituting such breach.
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11.7 CONSEQUENTIAL DAMAGES; MITIGATION. No Party shall have any
obligation to indemnify or hold harmless any Party for (a) consequential
Losses arising out of any interruption of business, loss of profits, loss of
use of facilities, loss of goodwill or other direct damages or (b) any other
Losses to the extent same are (i) caused, contributed to or exacerbated by
the actions of the Indemnified Party, or (ii) recovered by the Indemnified
Party under any insurance policy listed on Schedule 3.22(a) and the premiums
for which were paid prior to the Transfer Date, or (iii) offset by tax
savings realized and received on account of such Losses by the Indemnified
Party or any of its Affiliates.
11.8 EXCLUSIVE REMEDY. This Article 11 sets forth the exclusive
remedy for monetary damages owing from Amtech or AI to the Buying Interests
and from UNOVA or Intermec to the Selling Interests that arise from the
matters described in Sections 11.1 and 11.2, except for any claims in which
fraud is proven. Each of the Parties hereby waives any claim or cause of
action (other than a claim or cause of action in which fraud is proven) for
monetary damages that it might assert against the other, with respect to the
matters described in Sections 11.1 and 11.2, whether under common law or
under any environmental, securities, trade or other law.
11.9 INDEMNITY PAYMENTS. All payments made pursuant to this Article
11 (other than payments of interest) shall be treated by the Parties on all
tax returns as an adjustment of the Purchase Price.
(Article 12 follows)
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ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 PUBLIC STATEMENTS AND PRESS RELEASES. No Party shall make, issue
or release any public announcement, press release, public statement or public
acknowledgment of the terms, conditions and status of the transactions
provided for in this Agreement, without the prior written consent of the
other Parties as to the content and time of release and the media in which
such statement or announcement is to be made; PROVIDED, HOWEVER, that in the
case of announcements, statements, acknowledgments or revelations which any
Party, in the opinion of such Party's counsel, is required by law or
regulations, including those of public stock exchanges or inter-dealer
quotation system on which the securities of such Party or its Affiliates are
traded, to make, issue or release (a "Legally Required Statement"), the
making, issuing or releasing of any such Legally Required Statement shall not
constitute a breach of this Agreement if such Party shall have given, to the
extent reasonably possible, three days prior notice to the other Party, and
shall have attempted, to the extent reasonably possible, to clear such
disclosure with the other Party. Each Party agrees that it will not
unreasonably withhold or delay any such consent or clearance.
12.2 COSTS AND EXPENSES. Each Party shall be responsible for and bear
its respective costs and expenses in connection with, or arising out of, the
negotiation and execution of this Agreement and the Related Agreements and
consummation of the transactions provided for in this Agreement and the
Related Agreements; PROVIDED, HOWEVER, that (i) UNOVA and Amtech shall each
be responsible for fifty percent (50%) of all registration, sales, transfer,
use and other such taxes and fees, if any, arising out of the sale and
transfer to Intermec of the Shares, and (ii) Amtech shall be responsible for
all registration, sales, transfer, use and other such taxes and fees, if any,
arising out of the sale and transfer to French Subsidiary of Purchased Assets
pursuant to this Agreement.
12.3 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified, supplemented or terminated only by a writing executed on behalf of
each of the Parties.
12.4 NO ASSIGNMENT. No Party shall assign, in whole or in part, this
Agreement or its respective rights and obligations hereunder without the
express prior written consent of the other Parties; PROVIDED, HOWEVER, that
either UNOVA or Amtech shall have the right to assign its rights under this
Agreement to any of its direct or indirect subsidiaries, but notwithstanding
any such assignment such Party shall remain liable for all of its liabilities
and obligations under this Agreement.
12.5 NOTICES. All notices, requests, demands or other communications
hereunder must be in writing and executed by an authorized representative of
the Party responsible therefor, and must be given either by hand or telecopy,
telefax or other telecommunication device capable of creating a written
record which acknowledges receipt, as follows:
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(a) AMTECH OR AI. If such notice is directed to Amtech or
AI, it shall be sent to: Amtech Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Fax No. 972/▇▇▇-▇▇▇▇, Attention: General Counsel, with
a copy to ▇▇▇▇▇▇ & ▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Fax No.
214/▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or to such other person or place
as Amtech shall have specified to UNOVA in writing by a notice in accordance
with this Section 12.5.
(b) UNOVA, INTERMEC OR FRENCH SUBSIDIARY. If such notice is
directed to UNOVA, Intermec or French Subsidiary, it shall be sent to:
UNOVA, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: General Counsel, with copy to: Intermec
Technologies Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Group Counsel, or to such other person
or place as UNOVA shall have specified to Amtech in writing by a notice in
accordance with this Section 12.5.
12.6 COUNTERPARTS AND FACSIMILE. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute but one and the same
instrument, and any of such counterparts may be delivered by facsimile
transmission.
12.7 CAPTIONS. The captions and table of contents contained in this
Agreement are provided for convenience of reference only and shall not be
deemed to constitute a part of this Agreement.
12.8 SCHEDULES AND EXHIBITS. One complete set of the Schedules and
Exhibits has been marked for identification and delivered to each of the
Parties prior to the execution and delivery of this Agreement. The Schedules
and Exhibits are an integral part of this Agreement and are incorporated into
this Agreement by this reference.
12.9 WAIVER; REMEDIES. No single or partial waiver of any breach of
any provision of this Agreement shall be held to be a waiver of any other or
subsequent breach, and the failure of a Party to enforce at any time any
provision of this Agreement shall not be deemed a waiver of any right of any
such Party to subsequently enforce such provision.
12.10 GOVERNING LAW. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Delaware, without
regard to its conflict of laws rules.
12.11 SEVERABILITY. In the event that any provision or any portion of
any provision of this Agreement shall be held invalid, illegal or
unenforceable under applicable law, such invalidity, illegality or
unenforceability shall attach only to such provision and shall not affect or
render invalid, illegal or unenforceable, and, to the fullest extent
permitted by law, such provision shall be construed so as not to be invalid,
illegal or unenforceable.
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12.12 NO THIRD PARTY BENEFICIARIES. Except to the extent otherwise
specifically provided in Articles 9 and 11, nothing in this Agreement,
whether express or implied, is intended to confer any rights or remedies
under or by reason of this Agreement on any persons other than the Parties
and their respective successors and permitted assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or liability
of any third persons to any Party, nor shall any provision of this Agreement
give any third persons any right of subrogation or action against any Party.
12.13 CONSTRUCTION. This Agreement and the Related Agreements shall be
interpreted without regard to any presumption or rule requiring construction
against the Party causing such agreements to be drafted.
12.14 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules and the Related Agreements constitute the sole understanding and
agreement of the Parties with respect to the subject matter of this Agreement
and supersede and cancel all prior understandings and agreements.
12.15 RESOLUTION OF DISPUTES. In the event of any dispute between any
of the Parties, the Selling Interests or the Buying Interests arising out of
or relating to this Agreement or the performance, breach, validity or
interpretation or enforcement of this Agreement, such dispute shall be
submitted to arbitration and finally settled under the Commercial Rules of
the American Arbitration Association by an arbitrator appointed in accordance
with those Rules. The place of the arbitration shall be Los Angeles,
California. The award and findings of such arbitrator shall be conclusive
and binding upon the Parties, and judgment upon such award may be entered in
any court of competent jurisdiction. Amtech shall bear all costs and
expenses of its advisors and one-half of the costs and expenses of the
arbitration, and UNOVA shall bear all costs and expenses of its advisors and
one-half of the costs and expenses of the arbitration.
12.16 COVENANTS REGARDING REMAINING AMTECH SUBSIDIARIES. It is
understood and agreed that the continuing covenants of any of the Parties
under this Agreement with respect to the Remaining Amtech Subsidiaries shall
apply to each Remaining Amtech Subsidiary for only such time as such
Remaining Amtech Subsidiary is an Affiliate of Amtech.
(signature page follows)
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IN WITNESS WHEREOF, the Parties, intending to be legally bound, have
caused this Agreement to be executed on and as of the Agreement Date.
UNOVA, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. EAGLE
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Eagle
Title: Authorized Representative
INTERMEC TECHNOLOGIES CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. EAGLE
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Eagle
Title: Authorized Representative
INTERMEC TECHNOLOGIES S.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Project Director General
AMTECH CORPORATION
By: /s/ ▇▇▇▇▇ ▇. YORK
------------------------------------
Name: ▇▇▇▇▇ ▇. York
Title: CFO
AMTECH INTERNATIONAL S.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
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