EXHIBIT 2.1
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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
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ARTICLE 1
Transfer of Shares and Assets in Exchange for Cash,
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Amtech Stock and the Assumption of Liabilities
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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
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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
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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
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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
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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 Xxxx, 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
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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
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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 Xxxx 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
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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
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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
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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
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10.1 Permitted Termination............................................... 51
10.2 Break-up Fees....................................................... 51
10.3 Notice of Termination............................................... 52
ARTICLE 11
Indemnification
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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
ix
(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
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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:
1
ARTICLE 1
Transfer of Shares and Assets in Exchange for
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Cash, Amtech Stock and the Assumption of Liabilities
----------------------------------------------------
1.1 Transfer of Shares. Subject to the "Pre-Closing Transfers" (as
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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 xxx 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,
2
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 xxxx registrations and
service xxxx 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
Concessionaria Da Ponte 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
4
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
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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
5
defined in Section 3.15(a) or any third party) as a consequence of the Closing
("Change 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. Xxxxx & Sons, Inc., Account Number 068-876-8-00, for further credit to
Amtech Corporation, Account Number 231-71008-1-2, ABA Number 000000000 (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
6
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 "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
7
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 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").
8
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:
(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
9
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;
(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
10
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 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,
11
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. Xxxxxxx X. Xxxxx, 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.
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)
12
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 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx, 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
13
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,
15
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.
(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
16
applied on a basis consistent with the consolidated financial statements of
Amtech and its subsidiaries as of December 31, 1995.
(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.
17
3.3 Accounts Receivable. All accounts, notes and drafts receivable
-------------------
(including unbilled receivables) of TSG are bona fide, represent transactions
actually made in the 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 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxxx, Xxx Xxxxxx 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.
18
3.6 Real Property.
-------------
(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:
19
(i) Each member of TSG has obtained and currently maintains all
material permits, licenses and other authorizations (the "Environmental
Permits") which 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.
20
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.
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.
21
(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.
(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.
22
(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 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 xxxx registrations and service xxxx 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
23
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.
(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 Xxxx 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
xxxx, 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,
24
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.
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
25
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 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,
26
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.
(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.
27
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 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.
28
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 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.
29
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.
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
30
concerning the matters to which such representations and warranties relate,
including without limitation diligent inquiry of the key personnel of TSG.
(Article 4 follows)
31
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
32
has taken no action which would give rise to, any claim for a broker's or
finder's fee to be 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.
33
ARTICLE 5
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: Xxx Xxxxxxxx, General Counsel, Amtech Corporation,
00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Telephone: 000-000-0000,
and Facsimile: 000-000-0000.
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
34
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.
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 Xxxx 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 xxxx,
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
35
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
---------------------------------
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
36
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.
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)
37
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.
38
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 Xxxxxx X. Xxxxxxxx, 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 Xxxx-Xxxxx-Xxxxxx 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, Xxxxx Xxxx,
Xxxxx Xxxx and Xxxxxx Xxxxxxxx (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.
39
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.
40
7.7 Opinion of Counsel for UNOVA. UNOVA shall have delivered to Amtech
----------------------------
the written opinion of Xxxxxx X. Xxxxxxx, 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)
41
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
42
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.
------------------------------------------------
43
(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.
44
8.7 Change of Amtech Name. Within ten business days following the Closing
---------------------
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
45
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 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) xxx 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
46
inventory value on such tags up to a maximum payment of $100,000.
(Article 9 follows)
47
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.
48
(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 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
49
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.
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)
50
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.
51
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)
52
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
53
Closing Date, except for the Assumed Employee Obligations, or (ii) arising as a
consequence of the transactions provided for in this Agreement;
(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
54
(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 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
55
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.
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
56
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 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
57
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 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
58
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.
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)
59
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
60
telecommunication device capable of creating a written record which acknowledges
receipt, as follows:
(a) Amtech or AI. If such notice is directed to Amtech or AI, it
------------
shall be sent to: Amtech Corporation, 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000, Fax No. 972/000-0000, Attention: General Counsel, with a copy to
Xxxxxx & Xxxx L.L.P., 0000 Xxxx, Xxxxxx, Xxxxx 00000, Fax No. 214/000-0000,
Attention: Xxxxxxx X. Xxxxxx, 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., 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000, Fax No:
(000) 000-0000, Attention: General Counsel, with copy to: Intermec Technologies
Corporation, 0000 00xx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000, Fax No: (425)
000-0000, 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
61
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.
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)
62
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/ Xxxxxxxx X. Eagle
--------------------------------
Name: Xxxxxxxx X. Eagle
--------------------------------
Title: Authorized Representative
--------------------------------
INTERMEC TECHNOLOGIES CORPORATION
By: /s/ Xxxxxxxx X. Eagle
--------------------------------
Name: Xxxxxxxx X. Eagle
--------------------------------
Title: Authorized Representative
--------------------------------
INTERMEC TECHNOLOGIES S.A.
By: /s/ Xxxx Xxxxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxxx
--------------------------------
Title: President Director General
--------------------------------
AMTECH CORPORATION
By: /s/ Xxxxx X. York
--------------------------------
Name: Xxxxx X. York
--------------------------------
Title: CFO
--------------------------------
AMTECH INTERNATIONAL S.A.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
--------------------------------
Title: Managing Director
--------------------------------
63
LIST OF EXHIBITS
to
PURCHASE AND SALE AGREEMENT
---------------------------
Exhibit Description Page Reference
------- ----------- --------------
A-1 Certain Excluded Assets...................................... 3
A-2 Certain Final Closing Balance Sheet Adjustments.............. 6
B INTENTIONALLY OMITTED
C Allocation of Purchase Price................................. 8
D Certain Assumed Liabilities.................................. 8
E Certain Unassumed Liabilities................................10
F Opinion of Counsel for Amtech................................39
G Nonsolicitation Agreement....................................39
H INTENTIONALLY OMITTED
I Opinion of Counsel for UNOVA.................................41
J Dallas Sublease..............................................41
64
LIST OF SCHEDULES
to
PURCHASE AND SALE AGREEMENT
---------------------------
Schedule Description Page Reference
-------- ----------- --------------
3.1(e) Subsidiaries and Other Equity Investments.........................16
3.1(g) Capitalization and Shareholders...................................16
3.2(a) December Financials...............................................16
3.2(b) 1996 Financials...................................................16
3.2(c) Events Subsequent to December Balance Sheet.......................17
3.2(d) Indebtedness......................................................17
3.3 Accounts Receivable...............................................18
3.4 Inventory Valuation Policy........................................18
3.5 Mortgages, Security Interests, Liens, and Other
Encumbrances of Title............................................18
3.6(a) Owned Real Property...............................................19
3.6(b) Realty Leases (as Lessee).........................................19
3.6(f) Environmental Matters.............................................19
3.8(a) Sales Orders, Bids and Proposals..................................21
3.8(b) Purchase Orders...................................................21
3.8(c) Sales Representative, Distributor and Dealer Agreements...........21
3.8(d) Personal Property Leases (as Lessee)..............................21
3.8(e) Noncompetition Agreements or Covenants............................21
3.8(f) Confidential Nondisclosure Agreements.............................21
3.8(g) Consultant Agreements.............................................22
3.8(h) Guarantees........................................................22
65
3.8(i) Powers of Attorney, Proxies.......................................22
3.8(j) Letters of Credit, Surety, Bid and Performance Bonds..............22
3.8(k) Derivatives.......................................................22
3.8(l) Major Customers and Suppliers.....................................22
3.8(m) Contracts with Affiliates.........................................22
3.8(n) Other Contracts...................................................23
3.9 Suitability and Good Repair.......................................23
3.10(a) Intellectual Property Rights......................................23
3.10(b) Licenses of Intellectual Property Rights to
or from Third Parties............................................24
3.10(d) Registration and Maintenance Fees.................................24
3.11 Infringement and Indemnification..................................24
3.12 Confidential Information or Trade Secrets.........................24
3.13(b) Performance and Documentation of TSG Software.....................25
3.13(c) Development of TSG Software.......................................25
3.13(d) Protection of TSG Software........................................26
3.14 Product and Service Warranties....................................26
3.15(a) Employees.........................................................26
3.15(b) Indebtedness to Employees.........................................26
3.15(c) Loans or Advances to Employees....................................26
3.15(f) Employee Benefit Plans............................................27
3.15(g) Employment Contracts..............................................27
3.15(h) Open Employment Requisitions......................................27
3.16 Pending or Threatened Claims, Litigation and
Governmental Proceedings.........................................28
3.17 Judgments, Orders and Consent Decrees.............................28
66
3.19 Franchises, Permits, Etc..........................................28
3.20 Economic Sanctions and Questionable Payments......................28
3.21 Taxes.............................................................29
3.22(a) Insurance Policies................................................29
3.22(b) Bank Accounts.....................................................30
3.23 Required Consents (Buying Entities)...............................30
4.5 Required Consents (Selling Entities)..............................33
67
A-1
Credit Xxxxxxxx
Xxxx # 00000
Xxxxxx # 00000
A/C # 0000000570M
RIB 50
US $ A/C
(This is the Amtech International USD account, which Intermec Technologies S.A.
is not purchasing and into which the French Purchase Price is to paid.)
EXHIBIT A-2
FINAL CLOSING BALANCE SHEET ADJUSTMENTS
1. Any account receivable related to Project numbers 81001 (American
Freightways-Fuel Pilot) and 81003 (Fort Worth Carriers) will be written-off.
As of December 31, 1997, these accounts receivable totaled $93,879.
2. Unless a purchase order has been received prior to the settlement of the
Final Closing Balance Sheet pursuant to Section 1.7, any inventory related to
inventory items AS8450-8 and A11810 will be reserved for at 50% of their value,
such value being determined in accordance with past practices. These inventory
items had a value of FF 184,931 and FF 118,614, respectively, as of March 31,
1998.
3. It is Amtech's practice to reserve for 90% of the total value of inventory
identified as obsolete, including field service parts identified as obsolete.
Obsolete inventory, including obsolete field service parts, will be reserved for
in accordance with past practice except that, in the event that the 10% not
reserved for exceeds $25,000, such amount in excess of $25,000 will be reserved
at 100% of value. For example, if the 10% of obsolete parts not reserved for is
$27,000, $2,000 of such amount will be reserved.
4. It is Amtech's practice to reserve for 65% of the total value of
demonstration equipment. Demonstration equipment will be reserved for in
accordance with past practice except that, in the event that the 35% not
reserved for exceeds $25,000, such amount in excess of $25,000 will be reserved
at 100% of value.
5. It is Amtech's practice to reserve for certain identified warranty expense
exposures and to maintain a general reserve for warranty.
(a) The reserve for certain identified warranty exposures shall include,
but not be limited to, the following amounts:
Kansas Turnpike $200,000
Georgia 400 $ 50,000
Thailand $ 25,000
With respect to the Kansas Turnpike, Georgia 400 and Thailand, the warranty
exposures are also subject to a further agreement between the parties as
cited in Section 8.13.
(b) The general reserve for warranty shall be the greater of $200,000 or
1.2% of the trailing twelve months' costs of shipment.
6. The Final Closing Balance Sheet shall include an accrual of $150,000
related to Hong Kong taxes.
7. The Final Closing Balance Sheet shall include an accrual of all amounts due
to employees through the Closing Date under any bonus plan covering the period
between January 1, 1998 and December 31, 1998.
8. The Final Closing Balance Sheet shall include an accrual for management
bonuses through the Transfer Date using the same plan concepts as per the 1997
management bonus plan except that all such bonuses will be based on meeting or
exceeding the budgeted operating profits previously supplied to UNOVA. Such
accrual will be reduced by any amount already provided for under item 7 above.
9. All inventories related to Thailand and BEFIC shall be reserved for at
100%. A further agreement between the Parties is cited in Section 8.11.
10. The Final Closing Balance Sheet shall include a prepaid expense in the
amount of $20,000 related to the Ballpark at Arlington. A further agreement
between the Parties is cited in Section 8.12.
11. The Final Closing Balance Sheet shall include an accrual of the year-to-
date employer match under Amtech's 401(k) plan.
12. The Final Closing Balance Sheet shall not include any reserves for
downsizing, relocation, or reorganization of TSG (including its Paris office).
13. With respect to that certain contract which is identified on Schedule
3.8(a) as the "FDOT Contract," the contract value (base contract and amendments
one through five) is $38,873,000, the estimated cost at completion is
$44,436,000, yielding a negative margin of $5,563,000. Based on the foregoing
amount, the balance sheet reserve shall be stated at between $4,600,000 and
$4,700,000. No additional reserve shall be recorded with respect to the FDOT
Contract on the Final Closing Balance Sheet.
14. The value of the Passkey software on the Final Closing Balance Sheet will
be $3,283,000, adjusted for normal capitalization and amortization for the month
of May consistent with past practices.
15. The Final Closing Balance Sheet shall include a reserve for software
licensing in the amount of $36,666.
EXHIBIT C
Allocation of Purchase Price
----------------------------
No additional agreements.
EXHIBIT D
CERTAIN ASSUMED LIABILITIES
---------------------------
None
EXHIBIT E
CERTAIN UNASSUMED LIABILITIES
-----------------------------
None
EXHIBIT G
NONSOLICITATION AGREEMENT
-------------------------
THIS AGREEMENT, made and entered into on the 11/th/ day of June, 1998,
between _________________ (the "Restricted Party"), and UNOVA, Inc. ("UNOVA"), a
Delaware corporation. The Restricted Party and UNOVA are sometimes referred to
collectively as the "Parties" and individually as a "Party."
RECITALS
A. UNOVA, Intermec Technologies Corporation ("Intermec") and Intermec
Technologies S.A. ("French Subsidiary"), on the one part (UNOVA, Intermec and
French Subsidiary are referred to collectively as the "Buying Entities"), and
Amtech Corporation ("Amtech") and Amtech International S.A. ("AI"), on the other
part, have entered into that certain Agreement (the "Purchase and Sale
Agreement"), dated June 11, 1998, pursuant to which (i) Intermec will purchase
from Amtech the outstanding capital stock of Amtech Systems Corporation, Amtech
World Corporation and AMGT Corporation, and (ii) French Subsidiary will purchase
from AI substantially all of the assets of AI (said transactions are referred to
collectively as the "Transaction").
B. Section 6.11 of the Purchase and Sale Agreement requires, as a
condition precedent to the obligations of the Buying Entities to consummate the
Transaction, that the Parties shall have entered into this Agreement.
C. The Restricted Party desires to induce UNOVA to consummate the
Transaction.
D. Capitalized terms used and not otherwise defined in this Agreement
shall have the meanings ascribed to them in the Purchase and Sale Agreement.
NOW, THEREFORE, in consideration of the premises, the Parties agree as
follows:
1. Nonsolicitation Agreement. The Restricted Party covenants and agrees
-------------------------
that for a period of two years following the Transfer Date (the "Restricted
Period"), he or it, as applicable shall not solicit, encourage, facilitate or
induce any customer, supplier, agent, sales representative, consultant, employee
or licensee of any "UNOVA Company" (as defined below) to discontinue his or its
business relationships with any UNOVA Company in respect of the Business. The
Restricted Party further covenants and agrees that during the Restricted Period,
he or it, as applicable shall not solicit, as an employee, independent
contractor or otherwise, or hire any "Continuing Employee" (as defined in
Section 8.5(a) of the Purchase and Sale Agreement) or any individual who is on
the date of this Agreement an
1
employee of Intermec or any of its subsidiaries (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 the Restricted Party 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. For purposes of this Agreement, 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.
2. Resolution of Disputes. In the event of any dispute between UNOVA and
----------------------
the Restricted Party 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. The
Restricted Party shall bear all costs and expenses of his 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.
3. Injunctive and Equitable Relief. The Restricted Party agrees that the
-------------------------------
remedy of a UNOVA Company at law for any breach of Section 1 may be inadequate
and that in the event of any such breach or violation by the Restricted Party
(as determined by arbitration under Section 2), such UNOVA Company shall be
entitled to injunctive relief in addition to any other remedy, at law, in equity
or under this Agreement to which such UNOVA Company may be entitled. Without
limiting the generality of the preceding sentence, the Parties acknowledge and
agree that it is impossible to measure in money all of the damages that would
accrue to such UNOVA Company by reason of any breach of Section 1. The
Restricted Party waives in advance any claim or defense, in any arbitration that
may in the future be commenced by such UNOVA Company to enforce such provisions,
that such UNOVA Company has an adequate remedy at law.
4. Beneficiaries. All UNOVA Companies are beneficiaries under this
-------------
Agreement and any UNOVA Company shall be entitled to commence arbitration under
Section 2 to enforce this Agreement without the necessity of joining any other
UNOVA Company.
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:
(a) The Restricted Party. If such notice is directed to the
--------------------
Restricted Party, it shall be sent to: __________________________________, or
to such other
2
person or place as the Restricted Party shall have specified to UNOVA in writing
by a notice in accordance with this Section 5.
(b) UNOVA. If such notice is directed to UNOVA, it shall be sent to:
-----
UNOVA, Inc., 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000,
Fax No: (000) 000-0000, Attention: General Counsel, with copy to: Intermec
Technologies Corporation, 0000 00/xx/ Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000,
Fax No: (000) 000-0000, Attention: Group Counsel, or to such other person or
place as UNOVA shall have specified to the Restricted Party in writing by a
notice in accordance with this Section 5.
6. Governing Law. This Agreement shall be construed and interpreted in
-------------
accordance with the laws of the State of Delaware without regard to its
conflicts of law rules.
7. Counterparts; 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.
8. 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 UNOVA Company to enforce at any time any
provision of this Agreement shall not be deemed a waiver of any right of a UNOVA
Company to subsequently enforce such provision. All remedies afforded in this
Agreement shall be taken and construed as cumulative, that is, in addition to
every other remedy provided in this Agreement or by law.
9. Construction. This Agreement shall be interpreted without regard to
------------
any presumption or rule requiring construction against the Party causing such
Agreement to be drafted.
10. Entire Agreement. This Agreement and the Purchase and Sale Agreement
----------------
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.
IN WITNESS WHEREOF, the Parties, intending to be legally bound, have caused
this Agreement to be executed on and as of the date first above set forth.
UNOVA, Inc.
By:
----------------------------- ------------------------------------
The Restricted Party
Title:
-----------------------------
3
EXHIBIT J
DALLAS SUBLEASE
---------------
SUBLEASE
--------
This Sublease is made as of June 11, 1998 between Intermec
Technologies Corporation, a Washington corporation having an office and place of
business at 0000 00xx Xxxxxx Xxxx, Xxxxxxx, XX 00000, as sublessor
("Sublessor"), and Amtech Corporation, a Texas corporation, having an office and
place of business at 00000 Xxxxxx Xxxxxxx Xxxxx 000, Xxxxxx, Xxxxx 00000 as
sublessee ("Sublessee").
In consideration of the terms, covenants and conditions of this
Sublease, the parties hereto covenant and agree:
1. DEMISE OF THE PREMISES
----------------------
a. Sublessor has leased certain premises ("Lease Premises") in the
building ("Building") known as 00000 Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx
00000, pursuant to a lease dated November 14, 1996 (the "Lease")
made by Rosemeade Office Development, L.P., as landlord
("Landlord") and Amtech Corporation, as Tenant, and Tenant's
interest in the Lease was assigned to Sublessor as Tenant under the
Lease. A copy of the Lease has been delivered to Sublessee and
Sublessee acknowledges receipt thereof.
b. Subject to the provisions of the Lease, Sublessor subleases and
demises to Sublessee and Sublessee hires and takes from Sublessor,
the following described premises within the Lease Premises, being
10,000 square feet of net rentable space ("Sublease Premises"),
together with all the improvements, appurtenances, rights,
privileges and easements in anywise pertaining to the Sublease
Premises including, but not limited to, the right of ingress to and
egress from the Sublease Premises and parking facilities, and the
right to use in common with the Landlord, Sublessor and other
tenants of the Building, the
c. Common areas of the Building ("Common Areas"), which are the
elevators, stairways, corridors, entranceways, restrooms, parking
facilities, and other similar facilities that exist in and about
the Building, and that are generally available to all tenants in
the Building.
2. TERM
----
The term of this Sublease shall commence on June 11, 1998 and end on
September 10, 1998, unless sooner terminated or extended as provided in this
Sublease.
3. RENT
----
Sublessee shall pay One and 00/100 Dollar ($1.00) in advance on the
first day as rent for the term of this Sublease. Rent shall be paid to Sublessor
at its address first above written, unless Sublessor shall designate some other
payee or address for the payment by giving written notice to that effect to
Sublessee.
4. UTILITIES AND SERVICES
----------------------
a. Sublessor shall cause Landlord to furnish and equip the Building
and provide utilities and services thereto as required by the terms
of the Lease.
b. Sublessor shall promptly, upon obtaining knowledge that the same
are due, pay Sublessor's Proportionate Share of the costs of all
utilities and services that Sublessor is required to either pay or
reimburse Landlord pursuant to the Lease. If the Sublease Premises
are separately metered for certain utilities, Sublessee shall cause
those utility accounts to be placed in Sublessee's name, and shall
promptly pay all utility bills directly to the applicable utility
before same become past due.
5. USE OF SUBLEASE PREMISES
------------------------
The Sublease Premises may be used for the purposes of offices, sales,
showroom, and for other lawful purposes of a nature which are not hazardous, not
a nuisance and are not prohibited by the terms of the Lease.
6. LEASE PROVISIONS
----------------
Except for Articles 3,4, and 10 of the Lease and to the extent not
otherwise inconsistent with the agreements and understandings expressed in this
Sublease or applicable only to the original parties to the Lease, the terms,
provisions, covenants and conditions of the Lease are hereby incorporated herein
by reference on the following understandings:
a. The term "Landlord" used therein, shall refer to Sublessor
hereunder and its successors and assigns; and the term "Tenant", as
used therein, shall refer to Sublessee hereunder.
b. In any case where the Landlord reserves the right to enter the
Sublease Premises, said right shall inure to the benefit of the
Landlord as well as to Sublessor.
2
c. With respect to work, services, repairs, repainting and restoration
or the performance of other obligations required of the Landlord
under the Lease, Sublessor's sole obligation with respect thereto
shall be to request the same, on request in writing by Sublessee,
and to use reasonable efforts to obtain the same from the Landlord.
Sublessor shall have no obligation to commence litigation or
arbitration, nor to expend any money in connection therewith.
d. Sublessee hereby expressly assumes and agrees to perform all of the
terms, obligations, covenants and conditions required by the Lease
to be performed by Sublessor with respect to the Sublease Premises
and not to do, suffer or permit anything to be done with respect to
the Sublease Premises, which would result in a default under the
Lease or cause the Lease to be terminated or forfeited.
e. Sublessor shall maintain the Lease in full force and effect during
the entire term of this Sublease subject, however, to any earlier
termination of the Lease without the fault of Sublessor.
f. Sublessee shall not assign this Sublease or further sublease the
Sublease Premises, in whole or in part, and shall make no
alterations or improvements to the Sublease Premises without: (i)
The prior written consent of Sublessor (which consent Sublessor
agrees not to unreasonably withhold); and (ii) the prior written
consent of the Landlord (if required by the Lease). Any purported
assignment or sublease in violation hereof shall be void as to
Sublessor.
g. Sublessee shall not create, permit or suffer any liens,
encumbrances or charges upon the Sublease Premises.
7. INSURANCE
---------
a. Liability Insurance: Sublessee shall, at Sublessee's expense,
obtain and keep in force during the term of this Sublease, a policy
of comprehensive public liability insurance issued by an insurance
company licensed to write such insurance in the State of Texas,
insuring Sublessor and Sublessee against any liability arising out
of the use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be in an amount of not
less than Two Million Dollars ($2,000,000.00) for injury to or
death of one or more persons in any one accident or occurrence.
Such insurance shall further insure Sublessor and Sublessee against
liability for property damage of at least One Million Dollars
($1,000,000.00). Said insurance shall have an owner's protective
liability endorsement
3
attached thereto. If Sublessee fails to procure and maintain said
insurance, Sublessor may, but shall not be required to, procure and
maintain the same, but at the expense of Sublessee.
b. Personal Property Insurance: Sublessee shall obtain and keep in
force during the term of this Lease, a policy or policies of
insurance covering loss or damage to Sublessee's personal property,
inventory, machinery, equipment and trade fixtures, in the amount
of the full replacement value thereof, against all perils included
within the classification of fire, extended coverage, vandalism,
malicious mischief, and special perils (all risk).
c. Insurance Policies: Sublessee shall deliver to Sublessor
certificates evidencing the existence of the amount of liability
insurance required hereunder with loss payable clauses satisfactory
to Sublessor. No such policy shall be cancelable or subject to
reduction of coverage or other modification except after ten (10)
days prior written notice to Sublessor. Sublessee shall, within ten
(10) days prior to the expiration of such policies, furnish
Sublessor with renewals thereof; or, if Sublessee fails to do so,
Sublessor may, at its option, order such insurance and charge the
cost thereof to Sublessee, which amount shall be due and payable as
Additional Rent to Sublessor together with Sublessee's next Monthly
Rent installment.
d. Mutual Waiver of Subrogation: Except for Sublessor's self-
insurance, if any, Sublessee and Sublessor each hereby waive any
and all rights of recovery against the other or against the
officers, employees, agents and representatives of the other, for
loss of or damage to such waiving party or its property or the
property of others under its control, where such loss or damage is
insured against under any insurance policy in force at the time of
such loss or damage. Sublessee and Sublessor shall, upon obtaining
the policies of insurance required hereunder, give notice to the
insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Sublease if required by the
respective carrier.
8. LEASE RIGHTS
------------
Sublessor's rights under the Lease (excepting such rights as are
personal to the Sublessor), may be enforced against the Landlord by Sublessee in
its own name or in Sublessor's name, provided Sublessee advises Sublessor in
writing at least seven (7) days before taking any action to enforce such rights.
Sublessee agrees to reimburse Sublessor for any reasonable attorney fees or
other expenses incurred by Sublessor as a result of any such action.
4
9. HAZARDOUS MATERIALS
-------------------
a. The term "Hazardous Material" means any hazardous or toxic
substance, material or waste which was, is or becomes regulated, by
any local government authority, the State of Texas, or the United
States Government. The term "Hazardous Material" includes, without
limitation, any material or substance which is (i) friable
asbestos; (ii) designated as a "hazardous substances" pursuant to
Section 311 of the Federal Water Pollution Control Act (33 U.S.C.
(S) 1317); (iii) defined as a "hazardous waste" pursuant to Section
1004 of the Federal Resource Conservation and Recovery Act, 42
U.S.C. (S) 6901 et seq. ("RCRA"); (iv) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
(S) 9601 et seq. ("CERCLA"); or (v) designated as a "hazardous
material" pursuant to Section 1803 of the Hazardous Materials
Transportation Act, 49 U.S.C. (S) 1801 et seq.
b. The term "Material Contamination" means any unlawful contamination
of the Sublease Premises, however caused, the remediation of which
would cost, at the time such contamination is discovered, more than
Five Thousand Dollars ($5,000.00) to complete. In no event, shall
the preceding sentence be construed as a "deductible" with respect
to Sublessee's liabilities and obligations, nor be construed to
limit or reduce any liability or obligation of Sublessee under the
terms of this Sublease or applicable law if such Material
Contamination occurs.
c. Sublessee shall not cause or permit any Hazardous Material to be
brought upon, kept or used in, on or about the Lease Premises
except such Hazardous Material as is or will be necessary to
Sublessee's business and will be transported, kept, stored, used,
discharged, generated, released and disposed of in a manner that
complies with all laws regulating any such Hazardous Material.
d. Sublessee shall, promptly upon knowledge thereof, advise Sublessor
in writing of (a) any Material Contamination of the Sublease
Premises; (b) any unlawful transportation, storage, use, discharge,
generation, release or disposal of Hazardous Material on, about, to
or from the Sublease Premises; (c) any and all enforcement,
cleanup, removal or other governmental or regulatory actions
instituted or threatened by any federal, state or local
governmental agency with respect to Hazardous Material affecting
the Sublease Premises or the operations of Sublessee thereon or
therefrom, and (d) all claims made or threatened by any third party
against Sublessee or the Sublease
5
Premises relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Material
brought upon, transported, kept, stored, used, generated,
discharged or released or disposed of on, about, to or from the
Sublease Premises.
e. For purposes of this Sublease, any decline in the fair market value
of the Land and Building shall be calculated with reference to the
date upon which such contamination is discovered.
f. This indemnification of Sublessor by Sublessee in Paragraph 14
hereof shall survive the expiration or prior termination of this
Sublease, and the costs and expenses recoverable under this
indemnity shall include, without limitation, costs incurred in
connection with any investigation of site conditions and any clean-
up, remedial, removal or restoration work required by any federal,
state or local government agency or political subdivision because
of Hazardous Material present in the building, soil, water or air
on, under or about the Sublease Premises. Without limiting the
foregoing, if the presence of any Hazardous Material on the
Sublease Premises caused or permitted by Sublessee results in any
contamination of the Sublease Premises, Sublessee shall promptly
take all actions at its sole expense as are necessary to return the
Sublease Premises to the condition existing prior to the
introduction thereto of such Hazardous Material.
10. MAINTENANCE AND REPAIRS
-----------------------
Except for repairs and replacements required of Landlord pursuant to
the Lease, Sublessee shall provide, at its own cost and expense, all repairs,
including replacements, necessary to the Sublease Premises, its walls, floors,
ceilings, electrical conduits, mechanical systems and plumbing.
11. ALTERATIONS, IMPROVEMENTS & INSTALLATIONS BY SUBLESSEE
------------------------------------------------------
Sublessee shall make no alterations or improvements to the Premises
without Landlord's prior written consent, which may be withheld for any reason.
12. SUBLEASE PREMISES "AS IS"
------------------------
Sublessee shall accept the Sublease Premises in their "as is"
condition, and acknowledges that no representations with respect to their
condition have been made to it.
6
13. SIGNS
-----
Sublessor shall, at Sublessee's sole cost and expense, cause Landlord
to provide Sublessee with a listing of its name on the directory board in the
lobby of the Building, and if no such directory board exists, signs in such
locations in the Building and on the Land as shall advertise Sublessee's
occupancy of the Sublease Premises or direct visitors, guests, business
invitees, and the like to the Sublease Premises, all as may be permitted by
Sublessee's Landlord. Sublessee shall not otherwise place or paint any sign on
or in the Building or on the Land except in compliance with the terms of the
Lease, and if Landlord's consent is required, without first obtaining Landlord's
consent.
14. INDEMNITY
---------
Sublessee shall indemnify and hold Sublessor and Landlord harmless
from and against any and all claims arising from Sublessee's use of the Sublease
Premises, or from the conduct of Sublessee's business or from any activity, work
or things done, suffered or permitted by Sublessee in or about the Sublease
Premises or elsewhere, and shall further indemnify and hold Sublessor and
Landlord harmless from and against any and all claims arising from any breach or
default in the performance of any obligation on Sublessee's part to be performed
under the terms of this Sublease, or arising from any negligence of Sublessee,
or any of Sublessee's agents, contractors or employees, and from and against all
costs, attorney fees, expenses and liabilities incurred in the defense of any
such claim or any action or proceeding brought thereon; and in case any action
or proceeding be brought against Sublessor or Landlord by reason of any such
claim, Sublessee, upon notice from Sublessor, shall defend the same at
Sublessee's expense by counsel satisfactory to Sublessor. Sublessee, as a
material part of the consideration hereunder to Sublessor, hereby assumes all
risk of damage to property or injury to persons in, upon or about the Sublease
Premises arising from any cause (except acts of Sublessor), and Sublessee hereby
waives all claims in respect thereof against Sublessor.
15. HOLDING OVER
------------
If Sublessee remains in possession of the Sublease Premises after the
expiration of the term of this Sublease, Sublessee shall be deemed to be a
subtenant from month-to-month only, at the market monthly rental rate in effect
for similar buildings in the area, and governed in all other things, except as
to the duration of the term, by the provisions of this Sublease. Either party
may then terminate such month-to-month tenancy by giving to the other party at
least thirty (30) days prior written notice of termination.
16. SURRENDER
---------
At the expiration of the term of this Sublease, Sublessee will quit
and surrender possession of the Sublease Premises to Sublessor in as good
condition as when
7
delivered by Sublessor, excepting ordinary wear and tear, and as provided in the
clauses of this Sublease entitled: MAINTENANCE AND REPAIRS; ALTERATIONS,
IMPROVEMENTS & INSTALLATIONS BY Sublessee.
17. NOTICES
-------
All notices, requests, demands or other communications hereunder must
be in writing executed by an authorized representative of the party responsible
therefore, and must be given, and shall be deemed given, when delivered either
by hand or telecopy, or other telecommunications device capable of creating a
written record (which must be confirmed by certified mail); or shall be deemed
given when actually received if given by mailing prepaid certified or overnight
mail (including privately-owned air courier services) (a) if to Sublessor at its
address above set forth, with a copy to UNOVA, Inc., Attn: Real Estate
Department, 000 X. Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000; or (b) if to
Sublessee at its address set forth above or to such other person or place party
shall designate to the other party in writing. Any notice delivered personally
in the manner provided herein shall be deemed given upon actual receipt.
18. QUIET ENJOYMENT
---------------
Sublessor covenants that, so long as Sublessee is not in breach of the
terms and conditions of this Sublease, Sublessee shall peaceably and quietly
have, hold and enjoy the Sublease Premises for the lease term hereof, without
unreasonable interference or disturbance from Sublessor, subject to the
provisions of this Sublease.
19. MISCELLANEOUS
-------------
Each of the terms and agreements herein contained are binding upon and
inure to the benefit of the parties, their heirs, personal and legal
representatives, successors and assigns. This Sublease is the entire agreement
made between the parties and may not be modified except by an agreement in
writing signed by all the parties hereto or their successors in interest.
20. ENTIRE AGREEMENT
----------------
This Sublease Agreement contains all of the understandings of the
parties, and all representations made by either party to the other prior hereto
are merged herein.
21. MODIFICATIONS
-------------
This Sublease Agreement may not be modified in any respect, except by
a document in writing executed by both parties hereto or their respective
successors.
8
22. ACCEPTANCE
----------
Execution of this Sublease by Sublessee constitutes an offer which
shall not be deemed accepted by Sublessor until Sublessor has executed this
Sublease and Sublessee has received a duplicate original copy thereof.
THE PARTIES HERETO have duly executed this Sublease, being duly
authorized to do so.
SUBLESSOR: INTERMEC TECHNOLOGIES CORPORATION
By:
---------------------------
Its:
---------------------------
Date:
---------------------------
SUBLESSEE: AMTECH CORPORATION
By:
---------------------------
Its:
---------------------------
Date:
---------------------------
9
