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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
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Amtech Corporation
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(Name of Issuer)
Common Stock, par value $.01 per Share
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(Title of Class of Securities)
032329 10 4
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(CUSIP Number)
Norman L. Roberts, Senior Vice President and General Counsel
UNOVA, Inc.
360 North Crescent Drive, Beverly Hills, California 90210;
(310) 888-2700
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
April 9, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 032329 10 4 13D
-----------
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
UNOVA, INC.
IRS IDENTIFICATION NO. 95-4647021
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
N/A
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(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
00
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned 2,211,900
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
-0-
--------------------------------------------------
(9) Sole Dispositive Power
2,211,900
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(10) Shared Dispositive Power
-0-
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
2,211,900
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
13.06%
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(14) Type of Reporting Person*
HC
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
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AMENDMENT NO. 1 TO
SCHEDULE 13D
relating to the
Common Stock, $.01 par value per Share
of
Amtech Corporation
The information previously reported in UNOVA's Schedule 13D, dated
November 3, 1997 (the "November 13D"), is amended and supplemented with the
following information. Terms used herein and not otherwise defined have the
meanings given to such terms in the November 13D.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
In the November 13D, UNOVA reported that the amount of funds used by UNOVA
to purchase the Shares was $7,500,000. In addition, as previously reported,
UNOVA paid to the Company $2,500,000 as an advance fee for RFID technology to be
developed by the Company. However, as reported in the November 13D, the
Agreement stipulated that if UNOVA and the Company were unable to conclude a
technology development agreement, the entire sum of $10,000,000 paid to the
Company would be deemed to represent the purchase price for the Shares. Since,
as described below, such technology development agreement has not been
concluded, the purchase price paid by UNOVA for the Shares is now deemed to be
$10,000,000.
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Item 4. PURPOSE OF TRANSACTION
As previously reported in the November 13D, UNOVA purchased the Shares
to induce the Company to negotiate a research and development alliance with
UNOVA for the purpose of developing and marketing radio frequency
identification ("RFID") technology. Subsequent to the filing of the November
Schedule 13D, UNOVA announced on December 23, 1997, that it had acquired
proprietary seimconductor technology for RFID, which offers memory for data
storage and wireless transmission capability on a tag or label, from
International Business Machines Corporation.
In March, 1998, UNOVA disclosed that it and the Company had been unable
to agree on the structure of a proposed product development alliance and were
exploring other mutually agreeable means to complete the RFID development.
On April 9, 1998, UNOVA and the Company announced they had signed a
letter of intent (the "Letter of Intent") with respect to the proposed
purchase by UNOVA or one of its subsidiaries of the Company's RFID business
unit known as the Transportation Systems Group. The purchase price is
expected to be approximately $27 million, subject to certain adjustments.
The Letter of Intent provides that UNOVA, at its option, may satisfy
$10,000,000 of such purchase price by transferring the Shares to the Company.
Under the terms of the Letter of Intent UNOVA would also have the option to
pay such portion of the purchase price of the Company's Transportation
Systems Group
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in cash and retain the Shares. In that case, the rights of UNOVA under the
Agreement, which was filed as Exhibit 2 to the November Schedule 13D,
including the rights to require registration under the Securities Act of 1933
of the Shares, would remain intact.
In the event that UNOVA elects to pay in cash the entire purchase price
for the Company's Transportation Systems Group (in lieu of paying part in
cash and transferring the Shares to the Company), the Company would have the
option, exercisable on the date of closing only, to repurchase the Shares at
the closing price of the Company's Common Stock as reported in the NASDAQ
national market system quotations on the date of the closing of the purchase
by UNOVA of the Transportation Systems Group.
If UNOVA transferred the Shares to the Company, or if the Company
exercised its option to repurchase the Shares, UNOVA would cease to have the
rights granted under the Agreement, including the right to designate a
nominee for election to the Company's Board of Directors. The Company's
present designee serving on the Company's Board, Michael E. Keane, would
agree to resign as a director of the Company promptly upon the transfer to
the Company of the Shares.
UNOVA accordingly amends the November Schedule 13D with respect to the
transaction provided for in the Letter of Intent and reports that UNOVA
presently is party to a plan which would involve the sale or transfer of a
material amount of assets of the
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Company, as well as a probable change in the present board of directors of
the Company.
UNOVA further notes that the Letter of Intent contemplates that,
following the acquisition by UNOVA of the Company's Transportation Systems
Group, UNOVA would have the right to use the name "Amtech" in connection with
the assets purchased, and the Company would change its name (and the names of
its subsidiaries where applicable) to a name not including the word "Amtech."
The purchase of the Transportation Systems Group is subject to the
negotiation and execution of a definitive agreement for the transaction,
approval by the boards of directors of UNOVA and the Company, and other
customary conditions. Accordingly, there is no assurance that the purchase
will be completed.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Item 6 of the November 13D is hereby amended and supplemented to
incorporate the information set forth above with respect to the transactions
provided for in the Letter of Intent.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
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Exhibit 3 - Letter Agreement between Amtech Corporation and UNOVA, Inc.
dated April 8, 1998, with respect to proposed purchase and sale of the
Transportation Systems Group of Amtech.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete and correct.
UNOVA, INC.
By: /s/ MICHAEL E. KEANE
----------------------------
Michael E. Keane
Senior Vice President and
Chief Financial Officer
Dated: April 17, 1998
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ANNEX A
The names, addresses and principal occupations of the directors and executive
officers of UNOVA, Inc. are as follows:
<TABLE>
<CAPTION>
BUSINESS/HOME ADDRESS: PRINCIPAL OCCUPATION:
<S> <C> <C>
Edward J. Borey Intermec Technologies Vice President of UNOVA,
Corporation Inc. and Chief Operating
6001 36th Avenue West, Officer of UNOVA's
Everett, Washington, 98203-9280 Automated Data
Systems Group
Alton J. Brann UNOVA, Inc. Chairman of the Board and
360 North Crescent Drive Chief Executive Officer and
Beverly Hills, California 90210 a director of UNOVA, Inc.
Stephen E. Frank Southern California President and Chief
(outside director of Edison Company Operating Officer of
UNOVA, Inc.) 2244 Walnut Grove Avenue Southern California
Rosemead, CA 92770 Edison Company, a
subsidiary of Edison
International.
Orion L. Hoch 55 Melanie Lane Chairman Emeritus of Litton
(outside director of Atherton, CA 94027 Industries, Inc.
UNOVA, Inc.)
Steven B. Sample University of Southern President of the University
(outside director of California of Southern California.
UNOVA, Inc.) University Park
Los Angeles, California
90089-0012
William D. Walsh Sequoia Associates Partner of Sequoia
(outside director of Building 2, Suite 140 Associates, a private
UNOVA, Inc.) 3000 Sand Hill Road investment firm.
Menlo Park, CA 94025
Michael E. Keane UNOVA, Inc. Senior Vice President and
360 North Crescent Drive Chief Financial Officer of
Beverly Hills, California 90210 UNOVA, Inc.
Michael Ohanian Intermec Technologies Senior Vice President and
Corporation Group Executive, Automated
6001 36th Avenue West, Data Systems, of
Everett, Washington 98203-9280 UNOVA, Inc.
Norman L. Roberts UNOVA, Inc. Senior Vice President and
360 North Crescent Drive General Counsel of
Beverly Hills, California 90210 UNOVA, Inc.
</TABLE>
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<TABLE>
<S> <C> <C>
Clayton A. Williams UNOVA Industrial Automation Senior Vice President and
Systems, Inc. Group Executive, Industrial
5663 E. Nine Mile Road Automation Systems of
Warren, MI 48091 UNOVA, Inc.
Charles A. Cusumano UNOVA, Inc. Vice President, Finance, of
360 North Crescent Drive UNOVA, Inc.
Beverly Hills, California 90210
</TABLE>
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EXHIBIT 3
PRIVATE AND CONFIDENTIAL
April 17, 1998
Amtech Corporation
19111 Dallas Parkway, Suite 300
Dallas, TX 75281-3106
Attention: David P. Cook
Re: Acquisition of Transportation Systems Group - Letter of Intent
Ladies and Gentlemen:
This letter sets forth the terms and conditions, in general, under which it
is proposed that UNOVA, Inc. or one of its wholly-owned subsidiaries
("UNOVA") would purchase from Amtech Corporation ("Amtech") the
"Transportation Systems Group" (as defined in paragraph 1(a) below) (the
"Proposed Transaction"). If this proposal is accepted by Amtech, this letter
will evidence the intentions of UNOVA and Amtech to proceed diligently to
negotiate the terms and conditions of a mutually satisfactory definitive
written agreement (the "Definitive Agreement") regarding the Proposed
Transaction.
1. FORM OF PROPOSED TRANSACTION.
(a) SHARE AND ASSET PURCHASE. UNOVA would purchase (i) all of the
outstanding capital stock (the "Shares") of Amtech Systems Corporation ("ASC"),
a Delaware corporation; Amtech World Corporation ("AWC"), a Delaware corporation
(including its direct subsidiary, Amtech Systems Hong Kong Ltd. ("ASHK"), a Hong
Kong limited liability company, and its interest in its indirect affiliate,
Autopass Co. Ltd. ("ACL"), a Hong Kong limited liability company, but excluding
its direct subsidiary, CardKey
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Sicherssysteme GmbH ("CS"), a German limited liability company); AMGT
Corporation ("AMGT"), a Delaware corporation; and (ii) substantially all of
the assets (the "Purchased Assets"), of Amtech International ("AI"), a French
corporation (ASC, AWC (including ASHK and ACL but excluding CS), AMGT and the
net assets of AI are referred to collectively as the "Transportation Systems
Group" or "TSG").
(b) 338(h)(10) ELECTION. UNOVA and Amtech would agree to make an election
under Section 338(h)(10) of the Internal Revenue Code with respect to the
purchase of the Shares.
(c) TRANSFERS PRIOR TO CLOSING. Prior to consummation of the Proposed
Transaction (the "Closing"), (i) AWC would transfer CS to Amtech or another
subsidiary of Amtech that is not included in TSG or otherwise dispose of CS,
(ii) Amtech would cause any assets, including without limitation intellectual
property and business records, that are used or held for use by TSG but which
are not held by any member of TSG to be transferred to a member of TSG, and
(iii) at the option of UNOVA, ASC would transfer that certain real property
located in Albuquerque, New Mexico (the "Albuquerque Property") to Amtech or one
of its subsidiaries that is not within TSG. TSG, following the transfers
described in the foregoing sentence, is referred to as "Adjusted TSG." Any
taxes or other costs arising in connection with such transfers would be paid
solely by Amtech.
2. CONSIDERATION.
(a) PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Shares and the Purchased Assets would be the amount equal to the sum of the
"Base Purchase Price" (as defined in paragraph (b) below) and the "Contingent
Purchase Price" (as defined in paragraph (e) below).
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(b) BASE PURCHASE PRICE. The "Base Purchase Price" would be the amount
equal to the "Closing Net Book Value" (as defined below) LESS the book value of
the "Brazilian Notes" (as defined in paragraph (e) below) PLUS $2,650,000 (the
"Premium"); PROVIDED, HOWEVER, that if UNOVA elects to exclude the Albuquerque
Property, the Premium would be reduced to $650,000. The "Closing Net Book
Value" would mean the net book value of the net assets of Adjusted TSG as of the
date of Closing (the "Closing Date"), as reflected on a balance sheet of
Adjusted TSG as of the Closing Date (the "Final Closing Balance Sheet"), which
would be prepared in accordance with generally accepted accounting principles
("GAAP") applied on a basis consistent with that used in the preparation of the
audited consolidated balance sheet of Amtech and its subsidiaries as of December
31, 1997, except that (i) the Final Closing Balance Sheet would not include (1)
those portions of Amtech and its consolidated subsidiaries that are not part of
Adjusted TSG, and (2) the Brazilian Notes, and (ii) to the extent that the
estimate at completion on the FDOT Contract (the "FDOT EAC") shall have
deteriorated from its position at January 31, 1998 (the "January FDOT EAC"),
such deterioration would be reflected in the reserve for FDOT (in accordance
with GAAP) on the Final Closing Balance Sheet, but to the extent that the FDOT
EAC shall have improved from the January FDOT EAC, such improvement would not be
reflected.
(c) PAYMENT OF BASE PURCHASE PRICE. At Closing, UNOVA would (i) pay to
Amtech in cash the amount equal to the parties' best estimate of the Base
Purchase Price (the "Estimated Base Purchase Price") LESS the sum of $10,000,000
and the "Escrow Amount" (as defined in clause (ii) of this sentence), (ii) pay
into the "Escrow" (as defined in paragraph (d) below) $2,000,000 (the "Escrow
Amount"), and (iii) transfer and assign to
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Amtech 2,211,900 shares of common stock of Amtech (the "UNOVA Shares");
PROVIDED, HOWEVER, that at the option of UNOVA, UNOVA may instead (x) pay to
Amtech in cash the Estimated Base Purchase Price LESS the Escrow Amount, and
(y) pay into the Escrow the Escrow Amount (the option described in this
proviso is referred to as the "All Cash Option"). In the event that UNOVA
elects the All Cash Option, (1) UNOVA's rights arising under that certain
agreement (the "Equity Agreement"), dated October 31, 1997, between UNOVA and
Amtech, pursuant to which UNOVA purchased the UNOVA Shares, would remain
intact, and (2) Amtech would have the option to purchase the UNOVA Shares at
the closing market price on the Closing Date. If UNOVA does not elect the
All Cash Option, or if it does elect the All Cash Option and Amtech elects to
purchase the UNOVA Shares, Michael E. Keane, UNOVA's designee to the Board of
Directors of Amtech (the "Amtech Board"), would resign from the Amtech Board.
Any difference between the Estimated Base Purchase Price and the Base
Purchase Price as finally determined (the "Adjustment"), together with
applicable interest, would be paid by UNOVA to Amtech or refunded by Amtech
to UNOVA in cash within three business days following the final determination
of the Base Purchase Price. Prior to execution of the Definitive Agreement,
UNOVA and Amtech will reevaluate the appropriateness of the Escrow Amount.
(d) ESCROW. The Escrow Amount would be placed into an interest-bearing
escrow account (the "Escrow") to be used as a source (but not the sole source)
of indemnification of UNOVA under the Definitive Agreement. Interest earned on
the funds in the Escrow would be paid to Amtech periodically. On the first
anniversary of the Closing Date, the balance in the Escrow would be reduced to
$1,000,000 plus the amount of any
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indemnification claims that are then pending, and any balance in the Escrow
in excess of such amount would be released to Amtech. On the second
anniversary of the Closing Date (the "Escrow Termination Date"), any
unclaimed funds in the Escrow would be released to Amtech, as follows. If no
indemnification claims are pending on the Escrow Termination Date, the entire
balance in the Escrow would be released to Amtech, and the Escrow would then
terminate. If any indemnification claims are pending on the Escrow
Termination Date, (i) those funds reasonably estimated to satisfy such claims
(the "Claimed Amount") would remain in the Escrow, and the Escrow would
continue until the resolution of all such claims, and (ii) all funds in
excess of the Claimed Amount would be released to Amtech.
(e) CONTINGENT PURCHASE PRICE. As and when payments of principal and
interest are made to AWC under those certain promissory notes (the "Brazilian
Notes") due from the relevant customer in Brazil, UNOVA would cause such amounts
to be promptly paid to Amtech. The amount of such payments, if, when and to the
extent received by AWC, is referred to as the "Contingent Purchase Price." In
the event that payments under the Brazilian Notes are not being made to AWC, at
the option of Amtech, AWC would assign the Brazilian Notes to Amtech.
(f) ASSUMPTION OF LIABILITIES. In addition to the payment of the Purchase
Price, UNOVA would assume specified liabilities of AI, including without
limitation balance sheet liabilities and obligations under executory contracts.
3. ACCOUNTS RECEIVABLE GUARANTEE. Amtech would agree to purchase any billed
accounts receivable of Adjusted TSG that are legally due under the relevant
contract, which are included in the Final Closing Balance Sheet and which remain
uncollected 180 days following the Closing Date, but only to the extent that the
aggregate amount of such
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uncollected accounts receivable exceeds the reserve provided therefor on the
Final Closing Balance Sheet, for the face amount of such receivables (without
giving effect to any write-down of such receivables following the Closing
Date) plus interest on such amount from the Closing Date to the date of
payment.
4. EMPLOYEE MATTERS.
(a) EMPLOYMENT ARRANGEMENTS. It would be a condition of UNOVA's
obligation to proceed with the Proposed Transaction that acceptable
employment arrangements shall have been made with certain key members of the
management of Adjusted TSG, including Jeremy A. Landt, John E. Wilson and
other employees to be identified by UNOVA.
(b) CERTAIN EMPLOYEE BENEFITS. Amtech would cause the employees of
Adjusted TSG to become vested in their account balances in the Amtech 401-K
plan, to the extent permissible by law and under the terms of such plan, and
UNOVA would permit the employees of Adjusted TSG to roll over such account
balances into the UNOVA Financial Security and Savings Program (the "FSSP")
as soon as practicable following the Closing Date. UNOVA would credit such
employees with years of continuous service with Adjusted TSG for purposes of
eligibility and vesting under the FSSP and any other employee benefit plans
that UNOVA would offer to the employees of Adjusted TSG.
5. REAL PROPERTY MATTERS.
(a) DALLAS REAL PROPERTY. UNOVA would assume (or would cause a member
of Adjusted TSG to assume) as of the Closing Date that certain lease of the
real property located in Dallas, Texas, in which a portion of TSG currently
operates (the "Dallas Property"); PROVIDED that there is no increase in the
lease rate under the terms of such lease.
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UNOVA or the relevant member of Adjusted TSG would sublease to Amtech for $1
per month the portion of the Dallas Property that is currently occupied by
Amtech and its subsidiaries (other than TSG) for a period of up to 90 days
following the Closing Date.
(b) ALBUQUERQUE PROPERTY. In the event that UNOVA elects to exclude
the Albuquerque Property from the transaction, on the Closing Date, UNOVA
would enter into a lease (the "Albuquerque Lease") of such property on a
triple-net basis at current market rates. The Albuquerque Lease would have
an initial term of ten years with the option to renew the lease for two
additional five-year periods.
(c) ENVIRONMENTAL MATTERS. As part of its due diligence, UNOVA would
engage a nationally recognized environmental consulting firm to conduct a
Phase I assessment (and further assessments or testing if warranted based on
the results of the Phase I assessment) of the environmental condition of the
real properties of Adjusted TSG.
6. REMARKETER AGREEMENT. Following the Closing Date, UNOVA and Amtech
would use reasonable efforts to negotiate an agreement under which (i)
Amtech, in respect of its Electronic Security Group ("ESG"), would become a
remarketer for certain products of UNOVA and TSG, and (ii) UNOVA, in respect
of TSG, would become a remarketer for certain products of ESG.
7. AMTECH NAME. Amtech would consent to the use by UNOVA (if it is a
subsidiary of UNOVA, Inc.) of the name "Amtech Corporation." On the Closing
Date or as soon as practicable thereafter, Amtech would change its name and
would cause each of its subsidiaries or affiliates whose name includes "Amtech"
to change its name to a name that does not include "Amtech."
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8. INDEMNIFICATION. In addition to indemnification provisions that are
customary in transactions of this type, Amtech would agree to indemnify UNOVA
for (i) any debts, liabilities or obligations of AMGT that are not provided for
on the Final Closing Balance Sheet, and (ii) the costs incurred by UNOVA (a) in
resolving certain problems identified by the Kansas Turnpike and Georgia 400
customers, and (b) in connection with the Thailand contract, in each case in
excess of the reserve provided therefor on the Final Closing Balance Sheet.
9. IMMUNITY FROM INFRINGEMENT. UNOVA would covenant that neither itself nor
any of its subsidiaries (including any member of Adjusted TSG following the
Closing) would sue Amtech for infringement of any of the patents and patent
applications or patent disclosures (when issued) presently owned by or assigned
to TSG or UNOVA, to the extent that such infringement is caused by the
manufacture, use and sale of existing products of Amtech or its subsidiaries
(other than Adjusted TSG).
10. NONCOMPETITION. Amtech would agree not to compete in the business of
Adjusted TSG for a period of five years following the Closing Date.
11. PERFORMANCE BONDS. UNOVA would use its reasonable efforts to substitute
its credit for the credit of Amtech under any performance bonds securing the
obligations of any member of Adjusted TSG under any of its executory contracts.
Pending such substitution, UNOVA would indemnify Amtech for any liability
incurred by Amtech under such bonds.
12. COLLECTION OF BRAZILIAN NOTES. UNOVA would agree to use its reasonable
efforts to collect the Brazilian Notes.
13. CONDITIONS OF PROPOSED TRANSACTION. The Proposed Transaction outlined in
this letter would be subject to satisfaction of the following conditions
precedent:
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(a) DEFINITIVE AGREEMENT. The negotiation, preparation and execution
of the Definitive Agreement among UNOVA and Amtech (the initial draft of
which would be prepared by counsel for UNOVA), which would contain customary
representations, warranties, covenants and indemnities, which in each case
would survive Closing for a period to be determined.
(b) DUE DILIGENCE REVIEW. UNOVA shall have satisfactorily completed its
due diligence review of Adjusted TSG and its properties, assets, liabilities and
personnel, and the results of the environmental assessment referred to in
paragraph 5(c) shall be satisfactory to UNOVA.
(c) REGULATORY APPROVALS. The parties shall have received all necessary
approvals of third parties, including without limitation governmental
authorities, necessary to permit the consummation of the Proposed Transaction,
all necessary filings pursuant to applicable merger control and competition
legislation and rules shall have been made by the parties, and the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, shall have expired or been terminated, and each party shall have
received the opinion of counsel for the other relating to such matters as they
may reasonably request.
(d) BOARD AND SHAREHOLDER APPROVALS. All necessary corporate approvals of
the Proposed Transaction shall have been obtained, including without limitation
the approval of the Board of Directors of UNOVA and the Amtech Board.
(e) ABSENCE OF LITIGATION. No action, suit or proceeding shall be pending
or threatened which seeks to prohibit or restrain the Proposed Transaction.
14. CLOSING DATE. The parties would use all reasonable efforts to close the
transaction on or before May 29, 1998.
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15. DUE DILIGENCE; EXCLUSIVITY. The parties shall proceed diligently and in
good faith to negotiate the terms and conditions of the Definitive Agreement
during the period (the "Exclusivity Period") from execution of this letter of
intent by both parties until the later of (a) May 29, 1998, or (b) such later
date as the parties shall mutually agree in writing. During the Exclusivity
Period, (i) UNOVA shall have full and complete access, during normal business
hours and upon reasonable notice, to the premises, books, records and personnel
of Amtech and its subsidiaries relevant to TSG for the purpose of conducting
UNOVA's due diligence review, and Amtech shall use its reasonable efforts to
cause the officers of Amtech and its subsidiaries to furnish such additional
financial and operating data and to respond to such inquiries of UNOVA, as UNOVA
may reasonably request, and (ii) 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 UNOVA) 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.
16. CONDUCT OF TSG'S BUSINESS DURING THE EXCLUSIVITY PERIOD. Except as
otherwise contemplated by this paragraph 16, Amtech shall (and shall cause its
subsidiaries to) conduct the business of TSG solely in the ordinary course.
Promptly following the execution and delivery of this letter of intent, UNOVA
will identify (i) an individual (the "UNOVA Representative") with whom Amtech
and the management of TSG may consult on important matters pertaining to TSG's
business, and (ii) an individual (the "UNOVA R&D Representative") who will
direct the activities of TSG in the development of the "RFID
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Technology" (as defined in the Equity Agreement). During the Exclusivity
Period, (a) Amtech will not (and will not permit any member of TSG to) enter
into any individual contract in excess of $500,000 or having a term in excess
of one year or make any capital expenditure or capital investment in excess
of $200,000 (other than contracts, expenditures or investments made pursuant
to existing bids, proposals or purchase orders), in each case without the
prior written consent of the UNOVA Representative, and (b) Amtech shall (and
shall cause the members of TSG to) comply with all reasonable directives of
the UNOVA R&D Representative. In the event that the Proposed Transaction
does not occur, neither party shall be liable to the other for any damages
arising as a result of actions or omissions of TSG during the Exclusivity
Period, whether at the request of the UNOVA Representative, the direction of
the UNOVA R&D Representative or otherwise.
17. BREAK-UP FEES. UNOVA may terminate this Agreement at any time by giving
written notice to Amtech; PROVIDED, HOWEVER, that in such event, UNOVA will
pay to Amtech a fee of $300,000 UNLESS the reason for such termination by
UNOVA is (i) due to a material fact or circumstance concerning TSG that was
not known to UNOVA on the date of this Agreement, or (ii) due to the failure
of one or more of the conditions precedent outlined in this letter, which
failure was not within the control of UNOVA. Amtech may terminate this
Agreement at any time by giving written notice to UNOVA; PROVIDED, HOWEVER,
that in such event, Amtech will pay to UNOVA a fee of $300,000 UNLESS the
reason for such termination by Amtech is due to the failure of one or more of
the conditions precedent outlined in this letter, which failure was not
within the control of Amtech.
18. CONFIDENTIALITY. The parties acknowledge that Amtech and Western Atlas
Inc. ("Western"), the predecessor of UNOVA, have entered into a
confidentiality agreement,
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dated October 7, 1997 (the "Confidentiality Agreement"), and UNOVA confirms
that UNOVA will comply with Western's obligations thereunder, and any
information obtained by UNOVA during the course of its due diligence shall be
subject to the terms of such Confidentiality Agreement.
19. PUBLIC STATEMENTS. Promptly following the execution and delivery of this
letter of intent by both parties, the parties shall issue a joint press release
or individual press releases regarding the execution and delivery of this letter
of intent; PROVIDED, HOWEVER, that all such releases shall be approved in
advance by both parties. Neither party hereto shall, without the prior written
consent of the other, disclose or publicize any of the terms or conditions of
the Proposed Transaction, other than to their respective counsel, public
accountants, financial advisors, or key personnel who are participating in the
evaluation or negotiation of the Proposed Transaction, except to the extent
required by law or any stock exchange or inter-dealer quotation system on which
the securities of a party are traded (a "Legally Required Public Statement").
In the event of any Legally Required Public Statement, the party required to
make such statement shall, to the extent practicable, afford the other party
advance written notice and reasonable approval rights with respect to the
Legally Required Public Statement. The requirements of this paragraph 19 shall
be in addition to those in the Confidentiality Agreement.
20. BROKERS' OR FINDERS' FEES. The parties represent and warrant to each other
that no broker or finder has or shall be utilized in connection with the
Proposed Transaction, that to the best of their respective knowledge, no broker
or finder is or shall be entitled to any fee, commission or similar compensation
for effecting or assisting in the consummation of the
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proposed transaction, and that each is not aware of any claim or the basis of
any claim by a third party for a broker's or finder's fee, commission or
compensation.
21. COSTS AND EXPENSES. Except as otherwise provided herein, UNOVA and Amtech
shall each bear and be solely responsible for its respective costs and expenses
incurred in connection with the Proposed Transaction.
22. DISPUTE RESOLUTION. All disputes arising in connection with this letter of
intent or the Definitive Agreement shall be finally settled by binding
arbitration under the Commercial Rules of the American Arbitration Association,
with any such arbitration being conducted in Los Angeles, California.
23. NONBINDING AGREEMENT;. Except for the obligations established in
paragraphs 15, 16, 17, 18, 19, 20, 21, 22 and 23 hereof, which are binding on
the parties (the "Binding Provisions"), this letter constitutes a non-binding
letter of intent and is not a contract, agreement or a valid and enforceable
offer, express or implied, binding on either of the parties with respect to the
Proposed Transaction. If either party breaches any of the Binding Provisions,
the other party shall be entitled to enforce its rights either by suit in equity
and/or by action at law, including without limitation an action for damages as a
result of any such breach and/or an action for specific performance of those
provisions. Amtech represents and warrants to UNOVA the Amtech Board has
informally approved the execution and delivery of this letter of intent.
24. EXPIRATION OF OFFER. If the proposal outlined in this letter is an
acceptable basis for the negotiation, preparation and execution of a Definitive
Agreement setting forth the Proposed Transaction described in this letter,
please sign a copy of this letter in the space provided below, and return the
same to me. If this letter of intent has not been fully
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executed and delivered by both parties on or before 5:00 p.m. (Pacific time)
on April 9, 1998, the proposal contained herein shall expire.
Sincerely,
UNOVA, INC.
/s/ THEODORE S. EAGLE
- --------------------------------
Theodore S. Eagle
Director - Corporate Development
Accepted and agreed to this 8th day of April, 1998:
AMTECH CORPORATION
By: /s/ RONALD A. WOESSNER
-------------------------------
Title: V. P.
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