<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                   FORM 10-Q

(Mark One)
     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1995

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               For the transition period from _______ to _______

                        Commission File Number: 0-17995

                               AMTECH CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

         Texas                                                75-2216818
(State of Incorporation)                                   (I.R.S. Employer
                                                         Identification Number)

                               17304 Preston Road
                                 Building E-100
                              Dallas, Texas  75252
                    (Address of Principal Executive Offices)

                                 (214) 733-6600
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                               Yes   X    No 
                                   -----     -----        

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


                Class                          Outstanding at July 31, 1995
--------------------------------------    --------------------------------------
Common Stock, par value $.01 per share                   14,665,108

<PAGE>
 
                                     INDEX



PART I-FINANCIAL INFORMATION

<TABLE>
<CAPTION>
 
                                                                           Page
                                                                          Number
                                                                          ------

Item 1.       Financial Statements
<S>           <C>                                                         <C>
 
              Condensed Consolidated Balance Sheets at June 30, 1995
              and December 31, 1994                                         3
 
              Condensed Consolidated Statements of Operations for the
              three months and six months ended June 30, 1995 and 1994      4
 
              Condensed Consolidated Statements of Cash Flows for the
              three months and six months ended June 30, 1995 and 1994      5
 
              Notes to Condensed Consolidated Financial Statements          6
 

Item 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                     8
 
 
 

PART II-OTHER INFORMATION
 

Item 1.       Legal Proceedings                                            10

Item 5.       Other Information                                            10

Item 6.       Exhibits and Reports on Form 8-K                             10
 
</TABLE>

 

                                       2

<PAGE>
 
                               AMTECH CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                  (Unaudited)

<TABLE>
<CAPTION>
 
                                             June 30, 1995   December 31, 1994
                                             --------------  ------------------
<S>                                          <C>             <C>
     ASSETS
Current assets:
 Cash and cash equivalents (Note 5)                $32,859             $14,217
 Short-term marketable securities                    9,557              35,695
 Accounts receivable, net of allowance for
   doubtful accounts of $261,000 in 1995
    and $209,000 in 1994                             9,646               6,089
 Accounts receivable from related parties              959               1,349
 Inventories (Note 2)                                8,066               8,199
 Deferred income taxes                               1,103               1,060
 Prepaid expenses                                      392                 425
                                                   -------             -------
           Total current assets                     62,582              67,034
 
Property and equipment, at cost                     18,250              16,166
 Accumulated depreciation                           (8,183)             (7,281)
                                                   -------             -------
                                                    10,067               8,885
 
Deferred income taxes                                1,691               1,810
Goodwill, net (Notes 3 and 5)                        3,946                  --
Other assets                                         2,797               2,893
                                                   -------             -------
                                                  $ 81,083             $80,622
                                                   =======             =======
 
  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                  $ 2,788             $ 1,607
 Accrued expenses                                    2,330               1,869
                                                   -------             -------
           Total current liabilities                 5,118               3,476
 
Deferred license revenues                            1,329               1,810
 
Contingencies (Note 4)
 
Stockholders' equity:
 Preferred stock, $1 par value, 10,000,000
  shares authorized; none issued                        --                  --
 Common stock, $.01 par value, 30,000,000
  shares authorized; shares issued and outstanding: 
  14,662,608 in 1995 and 14,599,283 in 1994            147                 146
 Additional paid-in capital                         75,436              75,086
 Unrealized gain (loss) on marketable securities       368                (411)
 Retained earnings (accumulated deficit)            (1,315)                515
                                                   -------             -------
    Total stockholders' equity                      74,636              75,336
                                                   -------             -------
                                                  $ 81,083             $80,622
                                                   =======             =======
 
</TABLE>




                            See accompanying notes.


                                       3

<PAGE>
 
                               AMTECH CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)

                                  (Unaudited)


<TABLE> 
<CAPTION> 

                                                                 Three Months                Six Months
                                                                 Ended June 30               Ended June 30
                                                            ---------------------         -------------------
 
                                                                1995       1994              1995       1994
                                                             ----------  --------          ---------  --------
<S>                                                           <C>         <C>               <C>        <C>
 
Sales                                                         $ 13,001    $18,513          $ 26,936    $37,472
Operating costs and expenses:
  Cost of sales                                                  8,434      8,357            17,807     16,685
  Research and development                                       1,883      1,560             3,525      3,075
  Marketing, general and
   administrative                                                3,994      3,652             7,683      7,395
                                                              --------    -------          --------    -------
                                                                14,311     13,569            29,015     27,155
                                                              --------    -------          --------    -------
 
Operating income (loss)                                         (1,310)     4,944           ( 2,079)    10,317
 
Investment income (loss)                                          (101)       522               352        832
                                                              --------    -------          --------    -------
 
Income (loss) before income taxes                               (1,411)     5,466            (1,727)    11,149
 
Provision (benefit) for income taxes                              (154)     2,063              (190)     4,066
                                                              --------    -------          --------    -------
 
Net income (loss)                                             $( 1,257)   $ 3,403          $ (1,537)   $ 7,083
                                                              ========    =======          ========    =======
 

Earnings (loss) per share (Note 1)                           $   (0.09)   $  0.23          $  (0.10)   $  0.48 
                                                              ========    =======          ========    =======

Shares used in computing earnings (loss) per share              14,658     14,764            14,639     14,807 
                                                              ========    =======         ========    =======



</TABLE>
 
                            See accompanying notes.


                                       4

<PAGE>
 
                               AMTECH CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                  (Unaudited)



<TABLE> 
<CAPTION> 
                                                                 Three Months                      Six Months
                                                                 Ended June 30                    Ended June 30 
                                                             ---------------------             --------------------
              
                                                                 1995      1994                  1995       1994
                                                              ---------  ---------             ---------  ---------
<S>                                                           <C>       <C>                    <C>       <C>
Cash flows from operating activities:
Net income (loss)                                             $(1,257)  $  3,403               $(1,537)   $ 7,083
Adjustments to reconcile net
 income (loss) to net cash
  from operating activities:
   Depreciation and amortization                                  757        783                 1,486      1,549
   Deferred income taxes                                          (90)        (7)                  (75)       527
   Tax benefit from exercise of stock options                      27        722                    63      2,167
   Change in assets and liabilities:
       Increase in accounts receivable                           (375)    (1,326)               (1,871)    (1,102)
       (Increase) decrease in inventories                         451     (1,111)                  663     (2,338)
       (Increase) decrease in prepaid expenses                     15         41                  (287)        42
       (Increase) decrease in other assets                       (364)        (8)                  164        214
       Increase (decrease) in current liabilities                (392)     2,161                   (19)     1,644
       Decrease in deferred license revenues                     (240)      (247)                 (481)      (489)
                                                              -------   --------               -------    -------
                 Total adjustments                               (211)     1,008                  (357)     2,214
                                                              -------   --------               -------   --------
                 Net cash provided (used) by
                     operating activities                      (1,468)     4,411                (1,894)     9,297
 
Cash flows from investing  activities:
   Purchases of property and equipment                           (277)      (377)                 (848)    (1,274)
   Purchase of Cotag International Limited                        (10)        --                (5,784)        --
   Increase in other assets                                       (62)      (106)                 (114)      (281)
   Purchases of marketable securities                              --    (15,203)                   --    (19,224)
   Sales and maturities of marketable securities                2,994      7,078                27,318     16,322
                                                              -------   --------               -------    --------
     Net cash provided (used) by investing activities           2,645     (8,608)               20,572     (4,457)
 
Cash flows from financing activities:
   Proceeds from issuances of common stock                        126         --                   273        224
   Payment of cash dividends                                       --       (292)                 (293)      (584)
                                                              -------   --------               -------   --------
     Net cash provided (used) by financing activities             126       (292)                  (20)      (360)
 
Effect of exchange rate changes on cash and cash equivalents      (14)        --                   (16)        --
                                                              -------   --------               -------   --------
Increase (decrease) in cash and cash equivalents                1,289     (4,489)               18,642      4,480
 
Cash and cash equivalents, beginning of period                 31,570     31,335                14,217     22,366
                                                              -------   --------               -------   --------
 
Cash and cash equivalents, end of period                      $32,859   $ 26,846               $32,859   $ 26,846
                                                              =======   ========               =======   ========
 
</TABLE>




                            See accompanying notes.

                                       5

<PAGE>
 
                               AMTECH CORPORATION


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

1.  Basis of Presentation

  The accompanying financial statements, which should be read in conjunction
with the audited consolidated financial statements included in the Company's
1994 Annual Report to Shareholders and Form 10-K, are unaudited but have been
prepared in the ordinary course of business for the purpose of providing
information with respect to the interim periods.  The Condensed Consolidated
Balance Sheet at December 31, 1994 was derived from the audited Consolidated
Balance Sheet at that date which is not presented herein.  Management of the
Company believes that all adjustments necessary for a fair presentation for such
periods have been included and are of a normal recurring nature.  The results of
operations for the three-month and six-month periods ended June 30, 1995 are not
necessarily indicative of the results to be expected for the full year.

  Earnings per share is computed based on the weighted average number of shares
of common stock and dilutive common equivalent shares outstanding.


<TABLE> 
<CAPTION> 
 
 
2.    Inventories

      Inventories consist of the following:
 
                     June 30, 1995           December 31, 1994
                     -------------           -----------------
<S>                  <C>                     <C>
 
  Raw materials         $4,843,000              $4,486,000
 
  Work in process        2,536,000               2,168,000
 
  Finished goods           687,000               1,545,000
                        ----------              ----------
 
                        $8,066,000              $8,199,000
                        ==========              ==========
 
</TABLE>


3.  Acquisition

    In late January 1995, the Company purchased all of the stock of Cotag
International Limited for approximately $5,800,000, including acquisition
expenses. Cotag is located in Cambridge, England and manufactures radio
frequency identification security systems for hands-free electronic access
control and other related applications. The results of operations for Cotag are
included in the consolidated financial statements of the Company beginning
February 1, 1995. The acquisition of Cotag resulted in goodwill of approximately
$4,100,000, which is being amortized over ten years.

                                       6

<PAGE>
 
4.  Contingencies

    In October 1992, the Company filed suit against AT/Comm Incorporated
("AT/Comm"), one of the Company's competitors in certain markets, in federal
district court for the Northern District of Texas, Dallas Division. The suit
currently alleges unfair competition and requests an affirmative determination
that the Company's technology and products do not infringe on certain patents
held by AT/Comm.  AT/Comm subsequently filed claims against the Company, which
do not request any specific damage amounts, alleging unfair competition and
related claims and patent infringement.  In September 1994, the court ruled that
the Company's radio frequency rail car identification products do not infringe
two AT/Comm patents and in June 1995, the court dismissed AT/Comm's unfair
competition and related claims.  The Company's motion for summary judgment,
which seeks to dismiss AT/Comm's claim relating to an AT/Comm patent covering
certain read/write electronic toll collection systems, is still pending.  The
Company believes the remaining claim pending against it is without merit and
intends to vigorously defend against it.

    In December 1994, the Company agreed to provide up to approximately
$2,300,000 in convertible debt and equity financing to WaveLink Technologies,
Inc. ("WaveLink") of Ontario, Canada, which will result in an ownership of up to
75% of WaveLink's equity, assuming eventual full conversion of the convertible
debt by the Company. WaveLink and certain of its employees are the subject of a
$7,800,000 suit brought by Teklogix, Inc., their former employer. The suit
alleges improper use of confidential information, theft of technology,
misappropriation of business opportunities and similar improprieties. WaveLink
has denied any wrongdoing by it or its employees and has advised the Company
that it intends to vigorously defend the litigation.

    While the final outcome of these matters cannot be predicted with certainty,
the Company believes that the final resolution of these matters will not have a
material adverse effect on the consolidated financial position of the Company.

5.  Subsequent Event

    Effective August 1, 1995, the Company purchased substantially all of the net
assets of Cardkey Systems, Inc. and Cardkey Systems, Ltd. (collectively,
"Cardkey"). The initial purchase price was approximately $18,000,000 in cash
with further payments of between $5,000,000 and $6,000,000 to be made over the
next two and one-half years.  The primary operating companies of Cardkey are
located in Simi Valley, California and Reading, England.  Cardkey sells,
installs and services electronic access control systems through an international
network of direct sales offices and resellers.  Cardkey's sales in 1994 were
approximately $65,000,000.  The acquisition of Cardkey is expected to result in
goodwill of up to $4,500,000, depending upon the yet to be determined amount of
purchased in-process research and development acquired in the transaction.


                                       7

<PAGE>
 

I
tem 2.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

    Sales for the three months and six months ended June 30, 1995 decreased
$5,512,000 or 30% and $10,536,000 or 28%, respectively, from the comparable
periods in 1994.  Shipments to the rail industry decreased from $10,833,000 to
$2,531,000 for the three month period and from $24,386,000 to $5,200,000 for the
six month period, primarily as a result of the substantial completion in mid-
1994 of tag deliveries for the implementation of the Association of American
Railroads' mandatory standard for automatic equipment identification.  Sales
volumes of the Company's products and services for the electronic toll and
traffic management (ETTM) sector of its markets increased, primarily as a result
of revenues of approximately $3,850,000 and $8,000,000 in the three month and
six month periods, respectively, from a system integration services contract.
Sales of Cotag International Limited ("Cotag"), which was acquired by the
Company in late January 1995, were included in the Company's consolidated
financial statements beginning in February 1995 and amounted to approximately
$2,000,000 and $3,500,000 in the three month and six month periods ended June
30, 1995, respectively.

    Cost of sales for the three months and six months ended June 30, 1995
increased $77,000 or 1% and $1,122,000 or 7% from the comparable periods in
1994.  Gross profit as a percentage of sales decreased from 55% for the second
quarter of 1994 to 35% for the second quarter of 1995 and from 55% for the first
six months of 1994 to 34% for the first six months of 1995.  This decrease was
primarily due to a reduction in the percentage of sales attributable to the
Company's manufactured products.  The business mix for 1995 continues to trend
toward lower margin systems integration project work in the ETTM market.

    Research and development expenses for the three months and six months ended
June 30, 1995 increased $323,000 or 21% and $450,000 or 15% from the comparable
periods in 1994.  The increase was primarily attributable to joint venture
expenditures funded by the Company and the inclusion of Cotag's expenses
beginning in February 1995.  These increases were partially offset by research
and development expenditures included in cost of sales relating to software
development costs associated with the installation of customer projects.  The
Company expects to spend increasing amounts for new research and development
initiatives for the remainder of 1995, such as its investment in WaveLink
Technologies, Inc. ("WaveLink"), a new Canadian enterprise developing a product
line for the radio frequency data collection market, and to commit the necessary
resources required by Cotag.

    Marketing, general and administrative expenses for the three months and six
months ended June 30, 1995 increased $342,000 or 9% and $288,000 or 4% from the
comparable periods in 1994.  The increases are primarily attributable to the
inclusion of Cotag's expenses beginning in February 1995.  This increase was
partially offset by a decrease in outside consultant costs incurred to pursue
and support new business opportunities.

    Investment income for the three months and six months ended June 30, 1995
decreased from a gain of $522,000 to a loss of $101,000 and from a gain of
$832,000 to a gain of $352,000, respectively.  The decrease for both periods was
primarily attributable to declines in certain of the Company's cash and cash
equivalent investments.

    The income tax benefit as a percentage of the loss before taxes was 11% for
the three months and six months ended June 30, 1995.  The primary difference
between the statutory and effective tax rates is the effect of unbenefitted
foreign losses.


                                       8

<PAGE>
 
    As a result of the foregoing, the Company experienced a net loss of
$1,257,000 and $1,537,000 for the three months and six months ended June 30,
1995 as compared to net income of $3,403,000 and $7,083,000 for the same periods
in 1994. Including the effect of the acquisition of Cardkey, completed as of
August 1, 1995, the Company currently expects consolidated revenues for calendar
year 1995 to be between $77,000,000 and $86,000,000. Additionally, the Company
anticipates reporting a consolidated net loss for the full year of between
($0.35) and ($0.60) per share, depending largely on the ultimate one-time charge
to earnings to be determined for purchased in-process research and development
acquired in the Cardkey transaction.

Liquidity and Capital Resources

    At June 30, 1995, the Company's principal source of liquidity consisted of
cash and cash equivalents of $32,859,000 and marketable securities of
$9,557,000.  The Company's June 30, 1995 liquidity will be affected by the
acquisition of Cardkey in August 1995 with the payment of approximately
$18,000,000 in cash and further payments of between $5,000,000 to $6,000,000
which are scheduled to be made over the next two and one-half years.  The
Company expects to invest up to $1,600,000 during the remainder of 1995 for
various property and equipment, a substantial amount of which will be required
by Cardkey, Cotag and WaveLink.  In addition, in December 1994, the Company
entered into an agreement to provide up to approximately $2,300,000 of debt and
equity financing to WaveLink.  Approximately $1,000,000 had been advanced as of
July 31, 1995.

    With total current liabilities at June 30, 1995 of approximately $5,000,000
and no long-term debt, the Company believes that cash provided by operating
activities and existing cash investments will be sufficient to meet the capital
requirements for the current businesses for at least the next two years.


                                       9

<PAGE>
 
 
                         PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

      The information set forth under Part I, Notes to Condensed Consolidated
Financial Statements, Note 4 is incorporated herein by reference.


Item 5.  Other Information

      On August 1, 1995, pursuant to a Purchase Agreement (as amended, the
"Purchase Agreement"), dated as of June 20, 1995, by and among Amtech
Corporation, a Texas corporation, Cardkey Systems, Inc., an Oregon corporation
("Cardkey US"), Cardkey Systems, Ltd., a United Kingdom corporation ("Cardkey
UK"), and Cardkey Sicherheitssysteme GmbH ("Cardkey Germany"), a German
corporation and wholly-owned subsidiary of Cardkey UK, and Assa Abloy AB, a
Swedish corporation, Amtech Corporation, acting directly or through directly or
indirectly owned subsidiary companies (collectively, "Amtech"), purchased
substantially all of the assets of the electronic access control business of
Cardkey US, Cardkey UK, Cardkey Germany, and the stock of Cardkey Systems
Pacific Pty PTE, an Australian corporation and wholly-owned subsidiary of
Cardkey US. The purchased assets include accounts receivable, inventory,
property and equipment, U.S. and foreign patent and trademark and other
intellectual property rights, and certain contract rights.

      Amtech and its subsidiary companies paid an initial purchase price of
approximately $18,000,000 in cash, which was the estimated net asset value of
the assets acquired and liabilities assumed.  The initial purchase price will be
adjusted by mid-September to account for differences between the estimated net
asset value and the actual net asset value as of the closing date, determined
according to audited financial statements.  Further payments of between
$5,000,000 to $6,000,000 are scheduled to be made over the next two and one-half
years.

      The source of the funds used to pay the purchase price was cash and cash
equivalents.  The property and equipment assets acquired from the selling
entities were used by them in the electronic access control business, and Amtech
plans to continue to use such assets in the electronic access control business.

      The foregoing includes a brief description of certain terms of the
Purchase Agreement and related agreements. Any description or disclosure made in
this Quarterly Report on Form 10-Q with respect to these agreements is qualified
in its entirety by reference to the Purchase Agreement, which is Exhibit 2.1 to
this Quarterly Report on Form 10-Q, the Amendment to Purchase Agreement, which
is Exhibit 2.2 to this Quarterly Report on Form 10-Q, the Promissory Note, which
is Exhibit 2.3 to this Quarterly Report on Form 10-Q and the Guaranty, which is
Exhibit 2.4 to this Quarterly Report on Form 10-Q. Each of the foregoing
documents is specifically incorporated herein by reference. Amtech will furnish
supplemental copies of any exhibits and schedules to these agreements to the
Securities and Exchange Commission upon request.


Item 6.  Exhibits and Reports on Form 8-K

      (a)  Exhibits

           The following is a list of exhibits filed as part of this Quarterly
           Report on Form 10-Q.

                  Description of Exhibits
                  -----------------------

           2.1    Purchase Agreement among Amtech Corporation, Assa Abloy, AB,
                  et.al.*
                  -- --

                                      10

<PAGE>
 
           2.2  Amendment to Purchase Agreement.*

           2.3  Promissory Note of Viking Acquisition Company, in the original
                principal amount of $6,000,000, dated August 1, 1995, payable to
                Cardkey Systems, Inc.*

           2.4  Guaranty of Amtech Corporation, dated August 1, 1995.*

           23.1 Consent of KPMG.*

           23.2 Consent of Crowe, Chizek and Company.*

           99.1 Audited Financial Statements of Cardkey Systems, Inc.*

                (1)   Report of Crowe, Chizek and Company, Independent Auditors.

                (2)   Balance Sheets as of December 31, 1994 and 1993.

                (3)   Statements of Operations for the year ended December 31,
                      1994, the ten months ended December 31, 1993, and the year
                      ended February 28, 1993.

                (4)   Statements of Shareholders' Equity for the year ended
                      December 31, 1994, the ten months ended December 31, 1993,
                      and the year ended February 28, 1993.

                (5)   Statements of Cash Flows for the year ended December 31,
                      1994, the ten months ended December 31, 1993, and the year
                      ended February 28, 1993.

                (6)   Notes to Financial Statements.

            99.2 Unaudited Condensed Financial Statements of Cardkey Systems,
                 Inc.*

                (1)   Unaudited Condensed Balance Sheets as of March 31, 1995
                      and December 31, 1994.

                (2)   Unaudited Condensed Statements of Operations for the three
                      months ended March 31, 1995 and 1994.

                (3)   Unaudited Condensed Statements of Cash Flows for the three
                      months ended March 31, 1995 and 1994.

                (4)   Notes to Unaudited Condensed Financial Statements.

            99.3 Audited Financial Statements of Cardkey Systems, Ltd.*

                (1)   Report of KPMG, Registered Auditors.

                (2)   Consolidated Profit and Loss Accounts for the year ended
                      December 31, 1994 and the ten months ended December 31,
                      1993.

                (3)   Consolidated Balance Sheets as of December 31, 1994 and
                      1993.


                                      11

<PAGE>
 
                (4)   Consolidated Cash Flow Statements for the year ended
                      December 31, 1994 and the ten months ended December 31,
                      1993.

                (5)   Statements of Recognized Gains and Losses for the year
                      ended December 31, 1994 and the ten months ended December
                      31, 1993.

                (6)   Notes to Financial Statements.

           99.4 Unaudited Condensed Financial Statements of Cardkey Systems,
                Ltd.*

                (1)   Unaudited Condensed Balance Sheets as of March 31, 1995
                      and December 31, 1994.

                (2)   Unaudited Condensed Statements of Operations for the three
                      months ended March 31, 1995 and 1994.

                (3)   Unaudited Condensed Statements of Cash Flows for the three
                      months ended March 31, 1995 and 1994.

                (4)   Notes to Unaudited Condensed Financial Statemements.

           99.5 Pro Forma Condensed Financial Information of Amtech
                Corporation.*

                (1)   Unaudited Pro Forma Condensed Combined Balance Sheet as of
                      March 31, 1995.

                (2)   Unaudited Pro Forma Condensed Combined Statement of
                      Operations for the year ended December 31, 1994.

                (3)   Unaudited Pro Forma Condensed Combined Statement of
                      Operations for the three months ended March 31, 1995.

                (4)   Notes to Unaudited Pro Forma Condensed Financial
                      Statements.

   (b)     No reports of the registrant on Form 8-K have been filed with the
           Securities and Exchange Commission during the three months ended June
           30, 1995.



*  Filed herewith.

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


                                      12

<PAGE>
 

                                   SIGNATURE

  Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

                                               AMTECH CORPORATION
                                                  (Registrant)



Date:  August 10, 1995                By:       /s/Steve M. York
                                          ------------------------------------
                                          Steve M. York
                                          Senior Vice President, Chief Financial
                                          Officer, and Treasurer
                                          (Principal Financial Officer and
                                          Duly Authorized Officer)
 



                                      13

<PAGE>
 

                                 EXHIBIT INDEX
                                 -------------


  Exhibit No.     Description
  ----------      -----------

  2.1             Purchase Agreement among Amtech Corporation, Assa Abloy, AB,
                  et. al.
                  --  ---

  2.2             Amendment to Purchase Agreement.

  2.3             Promissory Note of Viking Acquisition Company, in the original
                  principal amount of $6,000,000, dated August 1, 1995,
                  payable to Cardkey Systems, Inc.

  2.4             Guaranty of Amtech Corporation, dated August 1, 1995.

  23.1            Consent of KPMG.

  23.2            Consent of Crowe, Chizek and Company.

  99.1            Audited Financial Statements of Cardkey Systems, Inc.

                  (1)    Report of Crowe, Chizek and Company, Independent
                         Auditors.

                  (2)    Balance Sheets as of December 31, 1994 and 1993.

                  (3)    Statements of Operations for the year ended
                         December 31, 1994, the ten months ended December 31,
                         1993, and the year ended February 28, 1993.

                  (4)    Statements of Shareholders' Equity for the year ended
                         December 31, 1994, the ten months ended December 31,
                         1993, and the year ended February 28, 1993.

                  (5)    Statements of Cash Flows for the year ended 
                         December 31, 1994, the ten months ended December 31,
                         1993, and the year ended February 28, 1993.

                  (6)  Notes to Financial Statements.

  99.2            Unaudited Condensed Financial Statements of Cardkey Systems,
                  Inc.

                  (1)    Unaudited Condensed Balance Sheets as of March 31, 1995
                         and December 31, 1994.

                  (2)    Unaudited Condensed Statements of Operations for the
                         three months ended March 31, 1995 and 1994.

                  (3)    Unaudited Condensed Statements of Cash Flows for the
                         three months ended March 31, 1995 and 1994.

                  (4)    Notes to Unaudited Condensed Financial Statements.

<PAGE>
 
  99.3            Audited Financial Statements of Cardkey Systems, Ltd.

                  (1)    Report of KPMG, Registered Auditors.

                  (2)    Consolidated Profit and Loss Accounts for the year
                         ended December 31, 1994 and the ten months ended
                         December 31, 1993.

                  (3)    Consolidated Balance Sheets as of December 31, 1994 and
                         1993.

                  (4)    Consolidated Cash Flow Statements for the year ended
                         December 31, 1994 and the ten months ended December 31,
                         1993.

                  (5)    Statements of Recognized Gains and Losses for the year
                         ended December 31, 1994 and the ten months ended
                         December 31, 1993.

                  (6)    Notes to Financial Statements.

  99.4            Unaudited Condensed Financial Statements of Cardkey Systems,
                  Ltd.

                  (1)    Unaudited Condensed Balance Sheets as of March 31, 1995
                         and December 31, 1994.

                  (2)    Unaudited Condensed Statements of Operations for the
                         three months ended March 31, 1995 and 1994.

                  (3)    Unaudited Condensed Statements of Cash Flows for the
                         three months ended March 31, 1995 and 1994.

                  (4)    Notes to Unaudited Condensed Financial Statemements.

  99.5            Pro Forma Condensed Financial Information of Amtech
                  Corporation.

                  (1)    Unaudited Pro Forma Condensed Combined Balance Sheet as
                         of March 31, 1995.

                  (2)    Unaudited Pro Forma Condensed Combined Statement of
                         Operations for the year ended December 31, 1994.

                  (3)    Unaudited Pro Forma Condensed Combined Statement of
                         Operations for the three months ended March 31, 1995.

                  (4)    Notes to Unaudited Pro Forma Condensed Financial
                         Statements.





<PAGE>
 
                                                                     EXHIBIT 2.1

                                                                  EXECUTION COPY

                               PURCHASE AGREEMENT


          This Purchase Agreement (this "Agreement") is made and entered into as
                                         ---------                              
of June 20, 1995, by and among Amtech Corporation, a Texas corporation,
                                                                       
("Purchaser"), Cardkey Systems, Inc., an Oregon corporation ("Cardkey US"),
-----------                                                   ----------   
Cardkey Systems, Ltd., a United Kingdom corporation ("Cardkey UK"), and Cardkey
                                                      ----------               
Sicherheitssysteme GmbH, a German corporation and wholly-owned subsidiary of
Cardkey UK ("Cardkey Germany"), and Assa Abloy AB, a Swedish Corporation
             ---------------                                            
("Shareholder").
-------------   

                                  WITNESSETH:
                                  ---------- 

          WHEREAS, the above-mentioned Cardkey entities and Cardkey Systems
Pacific Pty PTE, an Australian corporation and wholly-owned subsidiary of
Cardkey US ("Cardkey Australia")(collectively, "Sellers") and Shareholder,
             -----------------                  -------                   
through its ownership of Sellers, are in the business of manufacturing,
distributing, and selling certain electronic access control ("EAC") products;

          WHEREAS, Sellers and Shareholder desire to sell to Purchaser, and
Purchaser, acting through one or more controlled subsidiaries (such controlled
subsidiaries are referred to herein as "Purchaser's designee"), desires to
purchase from Sellers, certain of the assets of Sellers related to the EAC
business and the issued and outstanding capital shares
 of Cardkey Australia from
Shareholder;

          WHEREAS, the Shareholder, directly or indirectly, owns all of the
issued and outstanding capital shares of the various Sellers; and

          WHEREAS, Purchaser has requested that the Shareholder enter into this
Agreement as a condition and inducement to Purchaser's execution hereof, and the
Shareholder has agreed to do so;

          WHEREAS, Purchaser has previously transferred to Shareholder a good
faith deposit in the amount of $200,000, which is to be held in an interest
bearing account by Shareholder, and disposed of as provided for in Section
                                                                   -------
2.1(a) and Section 10.3 of this Agreement (such funds including accrued interest
------     ------------                                                         
are referred to herein as the "Good Faith Deposit");

          WHEREAS, the chief executive offices of the Sellers are currently
located in New York, N.Y., and New York, N.Y. will be the sole place of business
of the Sellers in the United States after the Closing; and

                                     - 1 -

<PAGE>
 
          NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
                                   ARTICLE I
                               Purchase and Sale

          1.1  Agreement to Purchase and Sell.  Sellers agree to convey,
               ------------------------------                           
transfer, assign, and deliver to Purchaser (or Purchaser's designee), and
Purchaser, either directly or indirectly, agrees to purchase and take at the
Closing (as such term is defined in Article 3 hereof), the Assets (as
                                    ---------                        
hereinafter defined).  Subject to the provisions of Section 1.2, the "Assets"
                                                    -----------              
shall mean, without limitation, the assets and properties listed on Exhibit A
                                                                    ---------
attached hereto and all other of Sellers' and (to the extent any of such assets
or properties are held directly by Shareholder), Shareholder's assets and
properties used in the access control business of Sellers as of the date hereof,
or acquired or assumed by Sellers or Shareholder thereafter in the ordinary
course of business and so used, wherever located, other than assets disposed of
in the ordinary course of business to a third party, and specifically including:

            (a)  All inventories (excluding obsolete inventories), including
     finished goods, work in process or raw materials, goods in manufacture by
     third parties, materials, supplies, and accounts receivable;

            (b)  All tangible and intangible intellectual property, including
     but not limited to patents, trade secrets, the names "Cardkey," "Cardkey
     Reflection," "Pegasys" and other trade marks, tradenames, service marks,
     copyrights, mask work registrations, and the like, all technical
     documentation in whatever form, owned or licensed by or on behalf of
     Sellers to enable any of them to conduct their business worldwide, all
     rights and benefits under all non-disclosure, noncompete, and
     confidentiality provisions that any Seller is the beneficiary of, all of
     the foregoing without payment of royalty to any third party;

            (c)  All furniture and other personal property, fixtures, equipment
     and software (whether in source or executable code);

            (d)  All agreements, contracts, leases, instruments, arrangements
     and commitments (and all amendments, supplements, and modifications
     thereto) listed in the Schedules to Section 4.14;
                                         ------------


                                    - 2 - 

<PAGE>
 
            (e)  All prepayments of any nature relating to the Assets or the
     Assumed Liabilities (as such term is defined in Section 1.3);
                                                     -----------

            (f)  All customer and prospect lists, and all books and records of
     Sellers' access control business and all confidential and proprietary
     information of Sellers;

            (g)  All rights under third party contracts for development of any
     hardware or software product and all warranties made by third parties in
     favor of the Shareholder or any of the Sellers and relating to the Sellers'
     access control business;

            (h)  All the issued and outstanding securities (the "Cardkey
     Australia Shares") of Cardkey Australia;

            (i)  All goodwill relating to the access control business of Sellers
     and the Shareholder; and

            (j)  All books and records relating the access control business
     being acquired.

            (k)  All other assets necessary or incidental to the foregoing.

            To the extent that the sale, conveyance, transfer or assignment of
any agreement, permit, lease, contract or other document or instrument requires
the consent of any person other than Purchaser or Sellers, neither Section 1.1
                                                                   -----------
or any other provision of this Agreement shall constitute an agreement to effect
the sale, conveyance, transfer or assignment thereof if such action would
constitute a breach thereof or would be ineffective unless and until such
consent or waiver of such person has been obtained. From the Closing until the
date such sale, conveyance, transfer or assignment is effective, Sellers shall
make available to Purchaser the economic and practical benefits of any such
agreement, permit, lease, contract or other document or instrument. Nothing
herein shall relieve Sellers from providing those consents required to be
delivered pursuant to Section 3.2(f); however, if a third party consent cannot
                      --------------
be obtained at Closing (as hereinafter defined) because of reasons outside the
parties' control and the economic and practical benefits of any such agreement,
permit, lease, contract, or other document or instrument are made available to
Purchaser as determined by Purchaser in its sole discretion (but acting in good
faith) the parties agree in good faith to accomplish the Closing without such
third party consent having been obtained.

            Sellers shall convey to Purchaser (or Purchaser's designee) good and
marketable title to the Assets being sold and purchased 

                                     - 3 -

<PAGE>
 
hereunder free and clear of any liabilities obligations, liens, claims,
encumbrances or contingencies of any nature (collectively, "Encumbrances"),
except as expressly provided for herein.

     1.2  Excluded Assets.  The Assets shall exclude any assets or properties of
          ---------------
Sellers listed on Exhibit B hereto (the "Excluded Assets").
                  ---------              ---------------
     1.3  Assumed Liabilities.  It is understood and agreed that neither the
          -------------------
Purchaser nor its designee intends to, and neither shall, assume any obligation
or liability of Sellers or Shareholder of any character whatsoever, other than
the Assumed Liabilities. "Assumed Liabilities" as used in this Agreement means
the liabilities listed on Exhibit C and any other liabilities Purchaser's
                          ---------
designee expressly agrees in writing to assume.  It is understood and  agreed
that neither Purchaser nor its designee will assume any of the liabilities or
obligations listed on Exhibit B.
                      ---------
     1.4  Special Real Estate Arrangements. As noted below under Section 3.2(j)
          --------------------------------                       --------------
and Section 3.4(c), Purchaser's designee agrees, inter alia, to assume the
    --------------                               ----------
leasehold at 22 Stadium Way, Reading, England. As an inducement to Purchaser's
designee, Shareholder agrees to pay to Purchaser (or its designee) an amount
equal to 50% of the difference, if a positive number, obtained from subtracting
(i) any income derived by Purchaser (or its designee) for renting the property
to an party not affiliated with Purchaser during the 36 months, beginning the
first day of the calendar month following the effective date of the Closing,
from (ii) the lease amounts paid by Purchaser (or its designee) to the
property's landlord during the 36 months, beginning the first day of the
calendar month following the effective date of the Closing. This calculation
shall be made for each month during the 36 month period. Shareholder
acknowledges that Purchaser (and its designee) shall have complete authority to
attempt to sublease the 22 Stadium Way property and shall have complete
discretion as to the terms and conditions of any sublease relating thereto.

     Purchaser (or its designee) shall within 30 days of the end of each month
during the 36 month period provide to Shareholder an invoice for any amounts
required to be paid under the provisions of the preceding paragraph with respect
to the relevant month. Such invoice shall be accompanied by such documentation
as Shareholder may reasonably request. Shareholder shall pay such invoiced
amounts within 30 days of receipt of the invoice.

     If the subtraction described above produces a negative amount for any
particular month, no amounts shall be paid by Shareholder with respect to such
month. Fifty percent of any negative amounts resulting from this calculation for
any month during the 36 month period shall, at the end of the 36 month period,
be netted against 



                                    - 4 - 

<PAGE>
 
the amounts paid by Shareholder pursuant to this Section. Purchaser shall pay to
Shareholder the amount, if any, by which 50% of the aggregate of such negative
amounts exceed the amounts paid by Shareholder pursuant to this Section.

     1.5  Special Simi Valley Sublease Arrangements. As noted in Section 3.2(d),
          -----------------------------------------              --------------
Cardkey UK and Purchaser's designee shall at or prior to the Closing enter into
a sublease relating to the Simi Valley Property. The parties propose to execute
a Sublease Agreement substantially in the form of Exhibit J attached hereto.
                                                  ---------
Prior to the Closing, the parties agree to negotiate the details of the Sublease
Agreement in good faith, consistent with the following principles: (i)
Purchaser's designee's sublease and occupancy of such portion of the Simi Valley
property as corresponds to its needs shall extend so long as Cardkey US is bound
by the leasehold of such property; the rent to be paid by Purchaser's designee
shall be at a fair market rate for the quantity and type of space needed to
conduct its business in Simi Valley; Cardkey US and Purchaser's designee shall
utilize their best efforts to terminate the underlying lease at the earliest
practicable date coinciding with the initial term of Purchaser's designee's
desired occupancy term; and neither Purchaser nor its designee shall be
responsible for any financial obligations under the underlying lease (such as,
for example, balloon payments for excess buildout allowances), other than the
agreed-to lease payments and ordinary course of business operating expenses.

     1.6  Special U.K. Pension Plan Arrangements. Shareholder and Sellers, on
          --------------------------------------
the one hand, and Purchaser, on the other hand, agree that they will work
together in a cooperative fashion between the date hereof and the Closing to
locate an insurance company (or other suitable third party) and to cause such
insurance company (or other suitable third party) to assume the obligations
under the Cardkey U.K. defined benefit pension plan. Shareholder and Sellers, on
the one hand, and Purchaser, on the other hand, each agree to split on a 50-50%
basis the costs, if any, associated with such third party's assumption of the
obligations under such plan (up to an aggregate cost of $100,000). If such
aggregate costs are determined to be more than $100,000 or the parties are
unable to locate a third party to assume such obligations, then the parties
shall negotiate in good faith to find a mutually agreeable solution. 


                                     - 5 -

<PAGE>
 
                                  ARTICLE II
                                Purchase Price

     2.1  Consideration. Subject to adjustment as set forth in Sections 2.3 and
          -------------                                        ----------------
2.4 below, the aggregate consideration to be paid by Purchaser for the Assets
---
shall be the aggregate of (a) and (b) of this Section 2.1 and be payable as
                                              -----------
follows (all currency amounts stated in this Agreement are U.S. dollars):

           (a)  Purchaser shall pay to Sellers at the Closing by wire transfer
     in immediately available United States funds, $165,000 plus the amount of
     the Net Book Value of Sellers' assets to be acquired and liabilities to be
     assumed relating to their access control business as determined from
     reference to Exhibit A, Exhibit B, Exhibit C, and Exhibit D attached
                  ---------  ---------  ---------      ---------
     hereto, relating to the assets to be acquired and liabilities to be
     assumed, dated March 31, 1995 (collectively, the "Unaudited Closing Balance
     Sheets"), minus the amount of the Good Faith Deposit (which Sellers may
     convert to their account upon the Closing). As used in this Agreement, "Net
     Book Value" shall mean the net amount obtained from subtracting the amounts
     designated as "Liabilities" to be assumed by Purchaser's designee from the
     amounts designated as "Assets" to be acquired by Purchaser's designee, in
     each case, as reflected on the applicable balance sheet. For purposes of
     such determination, any intra-company accounts between or among Sellers or
     any of them and Shareholder shall be reconciled and netted-out.

           (b) Purchaser's designee(s) shall deliver to Sellers at Closing a
     Promissory Note (herein so called) in the original principal amount of $6
     million in the form of Exhibit E hereto, which shall be payable in two $3
                            ---------
     million cash payments on March 31 of each of 1997 and 1998 and guaranteed
     by Purchaser pursuant to the form of Guaranty attached hereto as Exhibit F;
                                          --------                    ---------
     provided, that, Purchaser may at its option, in lieu of the 1998 payment,
     make a payment of $2 million on March 31, 1996. The payments under such
     promissory note shall be secured by Purchaser as provided in the form of
     Escrow Agreement attached as Exhibit G hereto (the "Escrow Agreement").
                                  ---------
     2.2  Taxes. All sales, use, transfer, excise, and other such taxes arising
          -----
out of the sale of the Assets shall be borne by Purchaser and not by Sellers and
Shareholder. This Section 2.2 is not intended to vitiate the indemnity being
                  ------------
provided by Sellers and Shareholder in Section 9.1(e).
                                       --------------

                                     - 6 -
  

<PAGE>
 
     2.3  Purchase Price Adjustment.
          -------------------------
     (a)  The amounts payable by Purchaser to Sellers for the Assets as set
forth in Section 2.1(a) above shall be adjusted as provided for in this Section
         -------------                                                  -------
2.3. Within 45 days of the Closing, Sellers (with cooperation from Purchaser)
---
shall cause an audited balance sheet dated as of the date of Closing of the
Sellers ("Audited Closing Balance Sheet") and related audited consolidated
statements of earnings and cash flows covering the period subsequent to December
31, 1994, and until the Closing (collectively, the "Audited Closing Financial
Statements") to be prepared by Coopers & Lybrand or such other "Big 6"
accounting firm as may be agreed to by the parties in accordance with U.S.
generally accepted accounting principles, applied in a manner consistent with
the principles used in preparing the Unaudited Closing Balance Sheets. The
Audited Closing Balance Sheet shall reconcile and net-out any intra-company
accounts between or among Sellers or any of them and Shareholder. The Audited
Closing Balance Sheet shall be accompanied by such ledgers and other accounting
records that support the information set forth in the Audited Closing Balance
Sheet as Purchaser shall reasonably request. The Audited Closing Balance Sheet
shall convert all foreign currency amounts to U.S. dollars at the exchange rate
in effect on the Closing Date, as reported in the Wall Street Journal as of the
                                                  -------------------
Closing Date.

Purchaser shall within 30 days of its receipt of the Audited Closing Balance
Sheet, inform Sellers whether it disputes any aspect of the Audited Closing
Balance Sheet.  The parties shall work together in good faith to resolve any
disagreements relating to the Audited Closing Balance Sheet within 45 days of
the delivery of the Audited Closing Balance Sheet to Purchaser.  In the event
the parties are unable to resolve any such dispute, the dispute shall be
resolved in accordance with the provisions set forth in Section 2.3(c).
                                                        ---------------

     (b)  The cash consideration to be paid pursuant to Section 2.1(a) shall be
                                                        -------------
adjusted to equitably account for changes in Net Book Value reflected on the
Audited Closing Balance Sheet, as determined from a comparison of the Unaudited
Closing Balance Sheets and the Audited Closing Balance Sheet. Within 30 days of
the delivery of the Audited Closing Balance Sheet to Purchaser, an appropriate
payment shall be made by Purchaser to Sellers, or vice versa, as applicable, to
reflect the adjustment in Net Book Value. Such payment shall bear interest from
the date of Closing until paid at a rate of interest equal to the rate of
interest being paid with respect to six month U.S. Treasury bills, as reported
in the Wall Street Journal as of the Closing date.
       -------------------


                                     - 7 -

<PAGE>
 
     (c) In the event the parties are unable to resolve any such dispute within
such 40 business day period the dispute shall be submitted to Price Waterhouse
or such "Big Six" accounting firm as may be mutually agreeable to the parties.
For this purpose either  party may sign and send an appointment letter in the
form set out in Appointment Letter attached hereto as Exhibit H.  Such
                                                      ---------       
accounting firm shall act as an expert for the benefit of the parties.  The
conclusions of such accounting firm, which shall be given within a sixty (60)
day period from the date of its appointment, shall be final, binding, and non-
appealable.  The fees and expenses of such accounting firm shall be borne
equally by the Purchaser, on the one hand, and the Sellers, on the other hand.

     2.4  Accounts Receivable.
          ------------------- 

     (a)  Purchaser (or its designee) shall use reasonable efforts  to collect
the outstanding accounts receivable included in the Assets and reflected on the
Audited Closing Balance Sheet (the "Accounts Receivables").  For purposes of
this Section 2.4(a), "reasonable efforts" shall mean those actions customarily
     --------------                                                           
taken by Purchaser (or its designee) in the normal course of the conduct of the
acquired company's business to collect outstanding accounts receivable.  Upon
the request of Sellers or Shareholder with respect to individual accounts
receivable, "reasonable efforts" shall also include the initiation of litigation
and the suspension of supplies, to the extent such actions are customarily taken
by Purchaser (or its designee) in the normal course of the conduct of the
acquired company's business.

     (b)  Payment of the Accounts Receivables shall be applied as directed by
the customer.  Purchaser undertakes to advise its customers that payment is
preferred to be applied to the oldest invoice.  Purchaser shall provide Sellers
with a monthly report (in the form and with the content produced by the acquired
company's accounting systems in the normal course of business) relating to the
collection of the Accounts Receivables.  If Purchaser, or its designee, in
Sellers' reasonable opinion,  is not collecting the Accounts Receivable in the
manner prescribed in 2.4(a) above, Sellers, as attorneys in fact for Purchaser,
may, with Purchaser's prior written consent (not to be unreasonably withheld),
at Seller's own expense initiate litigation with respect to individual accounts
receivable and take all other actions necessary to enforce the collection of
such accounts receivable.

     (c) Sellers and Shareholder jointly and severally guarantee the
collectability of 90% of the net (of the allowance for doubtful accounts
reflected on the Audited Closing Balance Sheet) accounts receivable reflected on
the Audited Closing Balance Sheet.  If, by a date that is twelve (12) months
after Closing, Purchaser has not collected an amount that is equal to or greater
than 90% of the


                                     - 8 -

<PAGE>
 
aggregate amount of the face amounts of such accounts receivable (net of the
allowance for doubtful accounts), then Sellers and Shareholder agree, jointly
and severally, to immediately reimburse Purchaser for the difference between the
amount actually collected by Purchaser and 90% of the aggregate amount of such
accounts receivable (net of the allowance for doubtful accounts).  Upon
reimbursement, Purchaser shall transfer to Sellers or their designee all rights
to collect payment for an amount of uncollected accounts receivable (chosen
according to the oldest uncollected accounts receivable) equal to the amount for
which Sellers and Shareholder have reimbursed Purchaser as provided in the
immediately preceding sentence.  Furthermore, at Purchaser's option, Sellers and
Shareholder shall either: (i) reimburse Purchaser for fifty percent (50%) of the
amount of the uncollected accounts receivable (for purposes of determining the
"amount of the uncollected accounts receivable" any  accounts receivable for
which Purchaser has been reimbursed as provided for in the second preceding
sentence will be deemed to have been collected), the right to collect payment
for such uncollected accounts receivable still remaining with Purchaser or (ii)
purchase the uncollected accounts receivable for a consideration of seventy-five
percent (75%) of the  amount of such uncollected accounts receivable (for
purposes of determining the "amount of the uncollected accounts receivable" any
accounts receivable for which Purchaser has been reimbursed as provided for in
the second preceding sentence will be deemed to have been collected), all rights
to collect payment for such uncollected accounts receivable being transferred to
Sellers or their designee.  Reimbursement or consideration to be paid to
Purchaser under this Section 2.4, if any, shall in the first instance be paid by
                     -----------                                                
Sellers or Shareholder through set-off from the balance of the Purchase Price to
be paid by Purchaser pursuant to Section 2.1(b) above.
                                 --------------       

     2.5  Allocation of Purchase Price.  Purchaser, Sellers and Shareholder
          ----------------------------                                     
agree that the purchase price for the Assets shall be allocated as set forth in
                                                                               
Exhibit I hereto.
---------        

                                  ARTICLE III
                                    Closing

     3.1  Time and Place.  The closing (the "Closing") shall take place on July
          --------------                     -------                           
31, 1995, in either Dallas, Texas or Simi Valley, California, as mutually agreed
to by the parties.

     3.2  Closing Deliveries by Sellers and Shareholder.  At the Closing,
          ---------------------------------------------                  
Sellers and Shareholder, if applicable, shall deliver to Purchaser the following
documents:

          (a)  an Assignment and Bill of Sale with respect to the Assets;


                                     - 9 -

<PAGE>
 
          (b) duly executed instruments of assignment of the intellectual
     property included in the Assets;

          (c) duly executed and acknowledged instruments of assignment of the
     real property leased by the Sellers included in the Assets;

          (d) a Sublease Agreement in the form of Exhibit J hereto relating to
                                                  ---------                   
     the Simi Valley Property (the "Simi Valley Sublease Agreement");

          (e) an opinion from counsel for Sellers and the Shareholder in the
     form and substance reasonably acceptable to Purchaser;

          (f) all consents, approvals and authorizations of third parties
     specified by Purchaser and required to be obtained by the Sellers in order
     to effect the transactions contemplated hereby;

          (g) releases of any liens, claims, or encumbrances on  any of the
     Assets;

          (h) a listing of all of the fixed assets included in the Assets and
     reflected on the Unaudited Closing Balance Sheets;

          (i) certificates representing the Cardkey Australia Shares and
     appropriate stock transfer powers relating thereto and the corporate minute
     books and other corporate records of Cardkey Australia and such other
     evidence that Purchaser may reasonably request demonstrating that Cardkey
     Australia is a duly organized and validly existing corporation organized
     under the laws of Australia;

          (j) assignments executed by the Sellers relating to the real estate
     leases included in the Assets, including the Reading, England building
     locations at 22 and 23 Stadium Way and the Canadian building location;

          (k)  the Escrow Agreement; and

          (l) all such executed documents as may be required to change the names
     of Sellers to other names bearing no similarity to the Sellers' names prior
     to Closing, including, without limitation, valid and enforceable amendments
     to the charter documents of the Sellers providing for such change of name
     and appropriate name change notices for each state or jurisdiction in which
     the Sellers are qualified to transact business.

                                    - 10 -

<PAGE>
 
     3.3  Closing and Post-Closing Filings.  At or after the Closing, and
          --------------------------------                               
without further consideration, Sellers shall at Sellers' and Shareholder's
expense execute and deliver to Purchaser such further instruments of conveyance
and transfer as Purchaser may reasonably request in order more effectively to
convey and transfer to Purchaser any of the Assets, or for aiding, assisting,
collecting and reducing to possession any of the Assets and exercising rights
with respect thereto.  After the Closing, situations may arise where Purchaser
determines that instruments of conveyance and transfer have not been made and
that are required to be made to effectively convey and transfer to Purchaser
certain of the Assets.  Purchaser shall notify Shareholder of these situations,
and Shareholder shall at its expense cause Sellers (or their successors-in-
interest) to execute and deliver such instruments of conveyance and transfer. If
Shareholder fails to make or cause such filings to be made, then Purchaser and
Purchaser's designee, as attorneys-in-fact for Sellers, may, after prior written
notice to Shareholder, at Sellers' and Shareholder's expense file all such
instruments of conveyance and transfer. Purchaser and its designee shall provide
copies of all such filings to Shareholder.

     3.4  Closing Deliveries by Purchaser.  At the Closing, Purchaser or its
          -------------------------------                                   
designee, as applicable, shall deliver to Sellers the following documents:

          (a) the consideration provided for in Section 2.1;
                                                ----------- 

          (b) an Assumption Agreement, executed by Purchaser's designee,
     relating to the Assumed Liabilities, including the real property leased by
     the Sellers and included in the Assets, including but not limited to the
     Reading, England leased premises described as 22 and 23 Stadium Way, but
     specifically excluding the Simi Valley property and the Reading, England
     property located at 21 Stadium Way;

          (c) the Simi Valley Sublease Agreement;

          (d) the Escrow Agreement;

          (e) the Promissory Note and the Guaranty; and

          (f) an opinion of Purchaser's counsel in form and substance reasonably
     acceptable to Sellers and Shareholder.

                                   ARTICLE IV
           Representations and Warranties of Sellers and Shareholders

     Sellers and the Shareholder jointly and severally represent and warrant to
Purchaser as follows:


                                    - 11 -

<PAGE>
 
     4.1  Organization.  Each Seller is a corporation duly organized, validly
          ------------                                                       
existing, and in good standing under the laws of its jurisdiction of
incorporation.  Each Seller has full power to own its properties and to conduct
its business as presently conducted.  Each Seller is duly authorized, qualified,
or licensed to do business and is in good standing as a corporation in each
state or jurisdiction in which any of its Assets are located or in which it
conducts business or operations.  Set forth on Schedule 4.1 hereto is a listing
                                               ------------                    
of each Seller, the jurisdiction of its incorporation, and the states or
countries where it either owns any  assets or is registered, licensed, or
qualified to do business.

     4.2  Authority.  Sellers and the Shareholder have all requisite power and
          ---------                                                           
authority to execute and enter into this Agreement and all other agreements and
instruments contemplated hereby to be executed and delivered by Sellers or the
Shareholder (the "Seller Documents") and to perform their obligations hereunder
                  ----------------                                             
and thereunder.  The execution, delivery and performance by Sellers and the
Shareholder of this Agreement and the Seller Documents have been duly authorized
by all necessary action, corporate or otherwise, by Sellers and the Shareholder
and this Agreement has been duly executed and delivered and is, and the Seller
Documents will be, when executed and delivered by Sellers and the Shareholder,
legal, valid and binding agreements of Sellers and the Shareholder, enforceable
against Sellers and the Shareholder in accordance with their respective terms.

     4.3  Title; Sufficiency.  The Assets are owned solely by Sellers (or, where
          ------------------                                                    
applicable, by Shareholder), and Sellers (or Shareholder) have good and
marketable title to the Assets owned by them and valid leasehold interests in
all Assets leased by them, in each case free and clear of any Encumbrances.
Title to the assets being used by Cardkey Australia shall by the Closing have
been conveyed to it from Abloy Security Pty Ltd.  All leases of properties or
assets included in the Assets are valid, subsisting and effective in accordance
with their terms, and the Sellers enjoy peaceful possession of all such
properties or assets.  Except as provided in Schedule 4.3 hereto, the execution
                                             ------------                      
and delivery of this Agreement and the Seller Documents by Sellers and the
Shareholder are sufficient to convey, and upon the execution and delivery
thereof will convey, to and vest in Purchaser good and marketable title to the
Assets, free and clear of all Encumbrances.  The Assets being conveyed to
Purchaser (or its designee) hereunder constitute all of the assets owned,
leased, or used by Sellers and Shareholder in the access control business of
Sellers, and are of an amount and character sufficient to enable Purchaser (or
its designee)to conduct the access control business of Sellers in a manner
consistent with the conduct of such business prior to the Closing.


                                    - 12 -

<PAGE>
 
     4.4  Condition of Assets.  The Purchased Assets are fit for the purposes
          -------------------                                                
for which they are presently being used, and are in good condition and repair,
ordinary wear and tear excepted.  The Assets and the Excluded Assets constitute
all of the assets and properties utilized by Sellers in connection with their
access control product businesses.

     4.5  No Violation.  Neither the execution or delivery of this Agreement or
          ------------                                                         
any of the Seller Documents nor the consummation of the transactions
contemplated hereby or thereby, including the conveyance of the Assets to
Purchaser, will conflict with or result in the breach of any term or provision
of, or violate, or constitute a default under, or result in the creation of, any
Encumbrance upon the Assets pursuant to, or give any third party the right to
accelerate any obligation under, (i) any charter provision, bylaw, agreement,
indenture, deed of trust, instrument, order, law, or regulation to which any of
the Sellers or Shareholder is a party or by which any of the Sellers, the
Shareholder, or any of the Assets is in any way bound or obligated or (ii) any
of the items listed on Schedules 4.14, 4.19, and 4.26 (except as indicated on
                       ------------------------------                        
such Schedules).

     4.6  Governmental Consents.  No consent, approval, order or authorization
          ---------------------                                               
of, or registration, qualification, designation, declaration or filing with, any
governmental authority is required on the part of any of the Sellers or
Shareholder in connection with the transactions contemplated by this Agreement,
except for applicable filings under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR Act") and applicable filings to the Federal Cartel Office
in Germany.

     4.7  Financial Statements. The Shareholder has delivered to Purchaser a
          --------------------                                              
true and complete copy of the unaudited consolidated balance sheet of the
Sellers as of March 31, 1995 (the "Unaudited Balance Sheet"), and true and
complete copies of the audited consolidated balance sheets of the Sellers as of
December 31, 1992, December 31, 1993, and December 31, 1994, and the related
consolidated statements of earnings and cash flow for the 12 months then ended
(the audited consolidated balance sheets and related statements of earnings and
cash flows are  referred to herein as the "Audited Financial Statements").
Prior to Closing, the Shareholder will have delivered the latest available
unaudited balance sheets and the related consolidated statements of earnings and
cash flows for the interim periods after December 31, 1994, and prior to the
Closing (the Unaudited Balance Sheet and such unaudited financial statements are
collectively refered to as the "Unaudited Financial Statements").  The Audited
Financial Statements and the Unaudited Financial Statements are collectively
referred to herein as the "Financial Statements."


                                    - 13 -

<PAGE>
 
     The Audited Financial Statements present (and, upon their delivery to
Purchaser, the Unaudited Financial Statements and the Audited Closing Financial
Statements (as defined in Section 2.3)) will present fairly the financial
                          -----------                                    
condition of the Sellers at the dates therein specified and the results of their
operations for the periods therein specified and, except as described on
                                                                        
Schedule 4.7, have been (and will be) prepared in accordance with (or reconciled
------------                                                                    
to) U.S. generally accepted accounting principles ("GAAP").

     The Financial Statements do not (and will not) contain any items of a
special or nonrecurring nature, except as expressly stated therein.  The
Financial Statements have been (and will be) prepared from the books and records
of the Sellers, which accurately and fairly reflect all the transactions of,
acquisitions and dispositions of assets by, and incurrence of liabilities by the
Sellers.

     4.8  Absence of Cardkey Australia Undisclosed Liabilities.  Except as will
          ----------------------------------------------------                 
be set forth in the Audited Closing Balance Sheet, there is no direct or
indirect debt, obligation, or liability (whether absolute, accrued, contingent,
liquidated, or otherwise, and whether due or to become due, asserted or
unasserted, known or unknown), of Cardkey Australia arising out of any
transaction entered into, any act or omission occurring, or any state of facts
existing at, or prior to, the Closing other than those incurred in the ordinary
course of business.

     4.9  Absence of Material Adverse Change.  Except as set forth on Schedule
          ----------------------------------                          --------
4.9 hereto, since March 31, 1995, there has not been: (i) any material adverse
---                                                                           
change in the condition (financial or otherwise), results of operations,
business, prospects, assets or liabilities (contingent or otherwise) of Sellers
or with respect to the manner in which Sellers conduct their business or
operations; (ii) any increase in the current liabilities of Sellers except in
the ordinary course of business, (iii) any increase in salary  or wages of more
than five percent or any material increase in bonus, commission or other
compensation to any officers, employees or agents of Sellers; (iv) any pending
or threatened labor or employee disputes or other material labor problems
relating to any employees of Sellers; (v) any default (including, without
limitation, any event that with the giving of notice or passage of time would
cause a default), termination or threatened termination under (or amendment to)
any material agreement, arrangement, contract, lease or license that constitutes
a portion of the Assets or any other material contract or agreement relating to
Sellers or any of the Assets; (vi) any material theft, damage, destruction,
casualty loss, condemnation or eminent domain proceeding affecting any of the
Assets, whether or not covered by insurance; (vii) any sale, assignment or
transfer of any of the assets of Sellers, except in the ordinary course of
business and consistent with past practices;

                                    - 14 -

<PAGE>
 
(viii) any waiver by Sellers of any material rights related to Sellers' access
control business or operations or any of the Assets; (ix) any other
transactions, agreements, contracts, or commitments entered into by Sellers
affecting Sellers' access control business or operations or any of the Assets,
except in the ordinary course of business and consistent with past practices; or
(x) any agreement or understanding to do or resulting in any of the foregoing.

     4.10 Taxes.
          ----- 

     (a) Except as disclosed on Schedule 4.10, all required domestic, foreign,
                                -------------                                 
federal, provincial, local, and other tax returns, notices, and reports
(including without limitation income, property, sales, use, franchise, capital
stock, excise, added value, employees' income withholding, social security, and
unemployment tax returns) relating to or involving the access control business
of Sellers, the Assets, the Assumed Liabilities, or the employees of Sellers, or
any of them, have been accurately prepared and duly and timely filed.  All taxes
required to be paid with respect to the periods covered by any such returns have
been timely paid.  The Sellers have remitted to the appropriate tax authority,
when required by law to do so, all amounts collected by them on account of any
use, value added or excise tax relating to or involving the access control
business of Sellers, the Assets, the Assumed Liabilities, or the employees of
Sellers, or any of them.

     (b) Except as disclosed on Schedule 4.10, none of the Sellers has any tax
                                -------------                                 
deficiency proposed or assessed against it and has not executed any waiver of
any statute of limitations on the assessment or collection of any tax relating
to or involving the access control business of Sellers, the Assets, the Assumed
Liabilities, or the employees of Sellers, or any of them.  No tax audit, action,
suit, proceeding, investigation, or claim is now pending nor, to the knowledge
of the Shareholder and the Sellers, threatened against any Seller relating to or
involving the access control business of any Seller, the Assets, the Assumed
Liabilities, or the employees of any Seller, or any of them, and to the
knowledge of the Shareholder and the Sellers, no issue or question has been
raised (and is currently pending) by any taxing authority in connection with any
of the Sellers' tax returns or reports relating to or involving the access
control business of any Seller, the Assets, the Assumed Liabilities, or the
employees of any Seller, or any of them.  Except as disclosed on Schedule 4.10,
                                                                 ------------- 
all of the tax years for 1994 and prior periods relating to the operations of
Cardkey UK have been closed with the U.K. Inland Revenue and other relevant
taxing authorities.


                                    - 15 -

<PAGE>
 
     (c) The Sellers have withheld or collected from each payment made to each
of their employees the amount of all taxes required to be withheld or collected
therefrom, and have paid the same to the proper tax receiving officers or
authorized depositaries.

     4.11 Litigation; Investigations.  Except as set forth in Schedule 4.11
          --------------------------                          -------------
hereto, there are currently no pending, and no Seller has knowledge of any
threatened, lawsuits, administrative proceedings or reviews, or formal or
informal complaints or investigations by any person or governmental authority
against or relating to Sellers or any of their directors, employees or agents
(in their capacities as such) or any of the Assets or to which any of the Assets
is subject.  No Seller is subject to any currently existing judgment, order,
writ, injunction or decree relating to any of the Assets or the access control
business or operations of Sellers.

     4.12 Compliance.  Sellers are currently complying with and have at all
          ----------                                                       
times complied with, and the Assets and the use, operation and maintenance
thereof comply with and have at all times complied with, and neither Sellers nor
any of the Assets nor the use, operation or maintenance thereof is in violation
or contravention of, any applicable (including, without limitation, any material
radio frequency, tax, environmental, health or employment) statute, law,
ordinance, decree, order, rule or regulation of any governmental authority.

     4.13 Environmental Compliance.  None of the leased real property included
          ------------------------                                            
in the Assets are on any federal or state "Superfund" list or has ever been the
site of any activity that would violate any federal, state, local or foreign
environmental statute or regulation, past or present, including, without
limitation, the U.S. Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. (S)(S) 9601 et seq.) ("CERCLA"), the Resource
                                             -- ---                           
Conservation and Recovery Act, as amended by the Hazardous and Solid Waste
Amendment of 1984, 42 U.S.C. (S)(S) 6901 et seq. ("RCRA"), the Clean Air Act, 42
                                         -- ---                                 
U.S.C. (S)(S) 7401 et seq., the Clean Water Act of 1977, 33 U.S.C. (S)(S) 1251
                   -- ---                                                     
et seq., the Toxic Substances Control Act, 15 U.S.C. (S)(S) 2601 et seq., and
-- ---                                                           -- ---      
all other federal, state, local or foreign environmental laws or regulations
relating to air pollution, water pollution, noise control and/or the handling,
discharge, disposal or recovery of on-site or off-site hazardous substances (as
defined in CERCLA), as each of the foregoing may have been amended from time to
time.  No hazardous substances (as defined in CERCLA) or solid wastes (as
defined in the RCRA) have been handled, stored, treated, recycled or disposed of
(as defined in RCRA) on any such real property that could have been released (as
defined in CERCLA) or leaked, spilled or otherwise contaminated any such
property or any other real property.


                                    - 16 -

<PAGE>
 
     4.14  Certain Contracts.
           ----------------- 

     (a) The following Schedules to this Agreement list the described material
agreements, contracts, leases, instruments, arrangements and commitments (and
all amendments, supplements, and modifications thereto) relating to Sellers and
included in the Assets or the Assumed Liabilities or by which any of the Assets
is in any way bound or obligated:

          (i) all reseller, distribution and marketing agreements, contracts, or
     arrangements of or relating to any of the Sellers that are included in the
     Assets and are to be assumed by Purchaser or its designee (the
                                                                   
     "Distribution and Marketing Agreements") (Schedule 4.14(a)(i));
     --------------------------------------    -------------------  

          (ii) all real estate leases relating to property occupied or utilized
     by any of the Sellers that are included in the Assets and are to be assumed
     by Purchaser or its designee (the "Real Estate Leases") (Schedule
                                        ------------------    --------
     4.14(a)(ii));
     -----------  

          (iii)  all vehicle leases relating to vehicles utilized by any of the
     Sellers that are included in the Assets and are to be assumed by Purchaser
     or its designee (the "Vehicle Leases") (Schedule 4.14(a)(iii));
                           --------------    ---------------------  

          (iv) all equipment leases or conditional sales contracts relating to
     equipment utilized by any of the Sellers that are included in the Assets
     and are to be assumed by Purchaser or its designee (the "Equipment Leases")
                                                              ----------------  
     (Schedule 4.14(a)(iv));
      --------------------  

          (v) all agreements, contracts, leases, instruments, arrangements and
     commitments relating to the installation of access control systems that are
     included in the Assets and are to be assumed by Purchaser or its designee,
     other than those referenced in Section 4.14(a)(vi) and Section 4.14(a)(vii)
                                    -------------------     --------------------
     (the "Project Agreements") (Schedule 4.14(a)(v));
           ------------------    -------------------  

          (vi) all agreements, contracts, leases, instruments, arrangements and
     commitments of the Integrated Systems Group of Cardkey US that are included
     in the Assets and are to be assumed by Purchaser or its designee (the "ISG
                                                                            ---
     Agreements") (Schedule 4.14(a)(vi));
     ----------    --------------------  

          (vii)  all agreements, contracts, leases, instruments, arrangements
     and commitments of the service and maintenance operation of Cardkey US that
     are included in the Assets and are to be assumed by Purchaser or its
     designee (the "Service and Maintenance Agreements") (Schedule
                    ----------------------------------    --------
     4.14(a)(vii));
     ------------


                                    - 17 -

<PAGE>
 
          (viii)  all supply contracts of any of the Sellers that are included
     in the Assets and are to be assumed by Purchaser or its designee (the
                                                                          
     "Supply Agreements") (Schedule 4.14(a)(viii));
     ------------------    ----------------------  

          (ix) all agreements, contracts, leases, instruments, arrangements and
     commitments of any of the Sellers whereby any of them have outsourced to a
     third party the manufacturing of any products being distributed or marketed
     by any of the Sellers (the "Outsourcing Agreements") (Schedule
                                 ----------------------    --------
     4.14(a)(ix)); and
     -----------

          (x) all other material agreements, contracts, leases, instruments,
     arrangements and commitments relating to or affecting the Assets or any
     interest therein that are not otherwise disclosed in the above-referenced
     Schedules or in Schedule 4.16 below and that are included in the Assets or
                     -------------                                             
     the Assumed Liabilities and are to be assumed by Purchaser or its designee
     (the "Other Agreements") (Schedule 4.14(a)(x)).
           ----------------    -------------------  

     (b) All agreements, contracts, leases, instruments, arrangements and
commitments that are reasonably necessary to enable Purchaser (or its designee)
to carry on the business of Sellers being purchased by Purchaser are listed in
                                                                              
Schedules 4.14(a)(i) - 4.14(a)(x). All of such agreements, contracts, leases,
---------------------------------                                            
instruments, arrangements and commitments referred to in this Section 4.14 (or
                                                              ------------    
the related Schedules) are valid, binding and in full force and effect and
enforceable in accordance with their respective terms and conditions.  Sellers
have performed all obligations to be performed by them under all such
agreements, contracts, leases, instruments, arrangements and commitments and
there is not under any such agreement, contract, lease, instrument, arrangement
or commitment, any existing default or event of default or event that, with
notice or lapse of time or both, would constitute a default.  There has been no
termination or threatened termination or notice of default under any such
agreement, contract, lease, instrument, arrangement or commitment.

     (c) Except as set forth in Schedule 4.14(a)(i) - 4.14(a)(x), no consent,
                                --------------------------------             
approval, order or authorization of, filing with,  or notice to, any person or
entity will be required to (i) prevent the termination of any material right,
privilege, license, or agreement listed in Schedule 4.14(a)(i) - 4.14(a)(x) or
                                           --------------------------------   
to avoid the loss to Purchaser of the full enjoyment of the benefits under the
items listed in such schedules or (ii) prevent the creation of any Encumbrance
on any of the items listed in such schedules, upon the consummation of the
transactions contemplated by this Agreement.

                                    - 18 -

<PAGE>
 
     4.15      Warranty Reserves; ISG Agreements.
               --------------------------------- 

     (a)  The Sellers have delivered to Purchaser a copy of each standard form
of written warranty currently provided by the Sellers to their respective
customers relating to the sale of hardware, software, and services, as
applicable.   The Audited Closing Balance Sheet shall, to the extent required
by GAAP, fully reflect all reserves for all warranty claims for hardware,
software, or services sold or performed, as applicable, prior to the Closing
under agreements, contracts, leases, instruments, arrangements and commitments
that are included in the Assumed Liabilities.

     (b) Each of the ISG Agreements listed in Schedule 4.14(a)(vi) was entered
                                              --------------------
into with the contemplation that Sellers would realize a profit upon completion
of the agreement in question.  At the time of Closing, Sellers' shall not have
realized a loss with respect to any such ISG Agreements.  At the time of
Closing, there shall be a reasonable prospect that all such ISG Agreements can
be completed without a loss being realized with respect thereto, except to the
extent a reserve for loss(es) with respect to the ISG Agreements has been
specifically identified in the Unaudited Closing Balance Sheets or the Audited
Closing Balance Sheet.

     4.16 Employees.  Schedule 4.16 hereto contains a true, correct, and
          ---------   -------------                                     
complete listing of all of the current employees of Sellers, their current
respective positions or job classifications, and their current respective wage
scales or salaries, and accrued vacation pay, sick pay, and other relevant
expense accruals, as the case may be.

     4.17 Employee Benefit Plans and Employee Matters.
          ------------------------------------------- 

     (a) Except as provided in Schedule 4.17 hereto, Sellers do not currently
                               -------------                                 
sponsor, maintain or contribute for the benefit of Sellers' employees to any
employee benefit plan within the meaning of Section 3(3) of the U.S. Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any other
profit-sharing, pension, stock option, severance, retirement, bonus, deferred
compensation, group life and health insurance, or other employee benefit plan,
trust, agreement, or arrangement ("Plans").  Sellers have made all contributions
required by them to have been made with respect to the Plans.  Purchaser or its
designee shall assume the liabilities under such Plans, except as provided in
Section 1.6 and, unless otherwise agreed in writing by Purchaser or its
-----------                                                            
designee, except for those plans of Cardkey U.S. listed in Schedule 4.17.
                                                           ------------- 

     (b) Neither Purchaser nor its designee shall be subject to any liability
resulting from (i) the termination by Sellers of any employee of Sellers from
any profit-sharing, pension, stock option,

                                    - 19 -

<PAGE>
 
severance, retirement, bonus, deferred compensation, group life and health
insurance, vacation, sick leave, or other employee benefit plan or policy, or
trust, agreement, or arrangement, whether or not legally binding or (ii) the
termination (by Sellers) of the employment of any of Sellers' employees except
as provided in Section 7.4.
               ----------- 

     4.18 Labor Matters.  Sellers have no collective bargaining, union or labor
          -------------                                                        
agreements, contracts or other arrangements with any group of employees, labor
union or employee representative(s).  Sellers do not know of any organization
effort currently being made or threatened by or on behalf of any labor union
with respect to employees of Sellers.  There are no labor controversies or work
stoppages or slowdowns pending or, to the best knowledge of Sellers and the
Shareholder, threatened against Sellers.  Except as provided in Schedule 4.18
                                                                -------------
hereto, there is no written or oral contract for employment with any of Sellers'
employees.

     4.19 Intellectual Property Rights.
          ---------------------------- 

     (a)  Schedule 4.19 describes all patents, patent applications, trademarks
          -------------                                                       
(whether or not registered), trademark applications, service marks, trade names,
copyrights, copyright applications, trade secrets, processes and any other
material proprietary intellectual property, including without limitation
proprietary computer software (whether in object or source form), inventions,
trade secrets, know-how, and proprietary techniques (collectively, "Intellectual
Property Rights"), owned or used by any of the Sellers in the access control
business of any of the Sellers as currently conducted, except for such
intellectual property rights of Shareholder that are not material (either
individually or in the aggregate) to the conduct of the Sellers' access control
business. The nature of the Sellers' ownership or rights with respect to such
rights is also listed on Schedule 4.19.  Except as disclosed on Schedule 4.19,
                         -------------                          ------------- 
the  Sellers have the sole and exclusive right to use such Intellectual Property
Rights.  Neither the Shareholder nor any Sellers are obligated to pay any
royalty or other consideration to any other person or entity to use such
Intellectual Property Rights or to make, use, or sell any products that
incorporate any such Intellectual Property Rights, except as disclosed on
Schedule 4.19.  All such royalties or other consideration disclosed on Schedule
-------------                                                          --------
4.19 that are required to be paid have been paid.  The Sellers own or have the
----                                                                          
right to use all the Intellectual Property Rights set forth in Schedule 4.19 in
                                                               -------------   
the geographic areas in which they are currently being used by Sellers with
respect to products and services with which they are currently being used by
Sellers, without infringing on or otherwise acting adversely to the right or
claimed right of any person.  To the knowledge of any of the Sellers or the
Shareholder, no other person or entity is infringing


                                    - 20 -

<PAGE>
 
the rights of any of the Sellers in any such Intellectual Property Rights.

     (b) Except as set forth in Schedule 4.19, no consent, approval, order or
                                -------------                                
authorization of, filing with, or notice to, any person or entity will be
required to (i) prevent the termination of any of the Intellectual Property
Rights or to avoid the loss to Purchaser of the full enjoyment of the benefits
under such Intellectual Property Rights or (ii) prevent the creation of any
Encumbrance on any of such Intellectual Property Rights, upon the consummation
of the transactions contemplated by this Agreement.

     4.20 Insurance.  The Assets which are of an insurable character are (and
          ---------                                                          
for the period prior to the Closing will be) insured against loss or damage to
the extent and in the manner customary for companies engaged in similar
businesses and operating similar properties.  Set forth in Schedule 4.20 is a
                                                           -------------     
listing and brief description of all insurance policies (all of which policies
are in full force and effect) relating to the Assets.  No written notice of any
cancellation or threatened cancellation of any such insurance contract has been
received by Sellers, and such insurance contracts are in full force and effect
in accordance with their terms.

     4.21 Interests in Competitors.  Other than as set forth on Schedule 4.21
          ------------------------                              -------------
hereto, neither Sellers, nor the Shareholder, nor any officer or director of
Sellers or the Shareholder own, directly or indirectly, an interest in any
corporation, partnership, firm, association, or other entity that is a
competitor, customer, supplier or landlord of Sellers or that otherwise has
material business dealings with Sellers.

     4.22 Solvency. Each of the Sellers is solvent, is able to pay its debts as
          --------                                                             
they become due, has capital sufficient to carry on its business as presently
conducted and proposed to be conducted, and owns property that has both a fair
value and a fair saleable value in excess of the amount required to pay its
debts as they become due.  Each of the Sellers will not be rendered insolvent by
the transactions contemplated by this Agreement or the Seller Documents or any
related transactions, and following the consummation of such transactions, each
of the Sellers and Shareholder will be able to pay its debts as they become due,
will have capital sufficient to carry on its business as then conducted and
proposed to be conducted, and will own property that has a fair value and a fair
saleable value in excess of the amount required to pay its debts as they become
due.

     4.23 Absence of Certain Business Practices.  To the best knowledge of any
          -------------------------------------                                 
Seller or Shareholder, none of the Sellers or



                                    - 21 -

<PAGE>
 
Shareholder or any of their affiliates, directors, officers, employees or agents
has, directly or indirectly, given or agreed to give any gift or similar benefit
to any customer, supplier, competitor or governmental employee or official
(domestic or foreign) that could subject the Purchaser to any damage or penalty
in any civil, criminal or governmental litigation or proceeding.

     4.24 Cardkey Australia.
          ----------------- 

     (a) The authorized capital stock of Cardkey Australia consists of 1,000,000
shares of Common Stock, $1.00 (AUS.)par value per share, of which 100 shares are
outstanding.  Except for one share of stock held in the name of a local nominee,
all of such 100 outstanding shares of capital stock are owned of record and
beneficially by Cardkey U.S. All of such 100 shares are free and clear of all
Encumbrances. There are (i) no outstanding securities convertible into or
exchangeable for or having the right to acquire any equity or debt securities of
Cardkey Australia and (ii) no outstanding subscriptions, warrants, options, or
other arrangements or commitments obligating Cardkey Australia to issue, dispose
of, or redeem any of its equity or debt securities.

     (b) Cardkey Australia has no material assets or liabilities, except as
noted in the Schedules relating thereto.

     4.25 No Other Agreements.  Neither Sellers nor the Shareholder have entered
          -------------------                                                   
into any agreement, commitment, or understanding with any other person with
respect to the sale, transfer, lease or other disposition of all or any portion
of the Assets, except for sales, transfers or leases in the ordinary course of
Sellers' business and consistent with past practices.

     4.26 Governmental Authorizations.  Each of the Sellers owns or possesses
          ---------------------------                                        
from each appropriate governmental or quasi-governmental agency, authority,
commission, board, or other body (collectively, a "Governmental Body") all
right, title, and interest in and to all permits, licenses, authorizations,
approvals, quality certifications, franchises, or rights (collectively,
"Permits") issued by any Governmental Body necessary to conduct its business as
conducted on the date hereof. Each of such material Permits is described on
Schedule 4.26 hereto.  No loss or expiration of any such Permit is pending or,
-------------                                                                 
to the knowledge of any Seller, threatened or reasonably foreseeable, other than
expiration in accordance with the terms thereof of Permits that may be renewed
in the ordinary course of business without lapsing.

     4.27 Inventory.  (a) The type, quality, and quantity of raw materials, work
          ---------                                                             
in progress, and finished goods of Sellers are reasonably appropriate for the
type, character, and volume of

                                    - 22 -

<PAGE>
 
Sellers' business, (b) obsolete or discontinued items or items not meeting the
specifications of Sellers are not included as assets in the Financial Statements
as raw materials, work in progress, or finished goods, and (c) the inventories
of finished goods owned by Sellers are merchantable for sale in the ordinary
course of business without discount (other than discounts granted in the
ordinary course of business consistent with past practice and not resulting from
such inventory being unsaleable), subject to reserves reflected on the Latest
Balance Sheet established in the ordinary course of business consistent with
past practice.

     4.28 No Misrepresentations.  Each of the Sellers and Shareholder has,
          ---------------------                                           
to their best knowledge, disclosed in or pursuant to this Agreement all facts
material to their respective access control businesses, the Assets, and Assumed
Liabilities.  The Sellers and Shareholder have not received any appraisals,
reports or other similar data or information relating to the condition of any
properties or assets relating to the operations or included in the Assets.  The
representations, warranties and statements made by Sellers and the Shareholder
in or pursuant to this Agreement and the Schedules hereto are true, complete and
correct in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make any such
representation, warranty or statement, under the circumstances in which it was
made, not misleading.

                                   ARTICLE V
                  Representations and Warranties of Purchaser

     Purchaser represents and warrants to Sellers and the Shareholder as
follows:

     5.1  Organization.  Purchaser (and, if applicable, Purchaser's designee) is
          ------------                                                          
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Texas or Delaware, as applicable.

     5.2  Authority.  Purchaser (and, if applicable, Purchaser's designee) has
          ---------                                                           
all requisite corporate power and authority to execute and enter into this
Agreement and all other agreements and instruments contemplated hereby to be
executed and delivered by Purchaser (the "Purchaser Documents") and to perform
                                          -------------------                 
its obligations hereunder and thereunder.  The execution, delivery and
performance by Purchaser (and, if applicable, Purchaser's designee) of this
Agreement and the Purchaser Documents have been duly authorized by all necessary
action, corporate or otherwise, by Purchaser, and this Agreement has been duly
executed and delivered and is, and the Purchaser Documents will be, when
executed and delivered by Purchaser (and, if applicable, Purchaser's designee),
legal, valid, and binding agreements of Purchaser (and, if


                                    - 23 - 

<PAGE>
 
applicable, Purchaser's designee), enforceable against Purchaser (and, if
applicable, Purchaser's designee) in accordance with their respective terms.

     5.3  No Violation.  Neither the execution or delivery of this Agreement nor
          ------------                                                          
any of the Purchaser Documents nor the consummation of the transactions
contemplated hereby or thereby will conflict with or result in the breach of any
term or provision of, or constitute a default under, or give any third party the
right to accelerate any obligation under, any charter provision, bylaw,
agreement, indenture, deed of trust, instrument, order, law, or regulation to
which Purchaser (and, if applicable, Purchaser's designee) is a party or by
which Purchaser (and, if applicable, Purchaser's designee) or any of their
respective assets or properties is in any way bound or obligated.

     5.4  Governmental Consents.  No consent, approval, order, or authorization
          ---------------------                                                
of, or registration, qualification, designation, declaration, or filing with,
any governmental authority is required on the part of Purchaser (and, if
applicable, Purchaser's designee) in connection with the transactions
contemplated by this Agreement, except for applicable filings under the HSR Act
and applicable filings to the Federal Cartel Office in Germany.

     5.5  No Misrepresentations.  The representations, warranties, and
          ---------------------                                       
statements made by Purchaser in or pursuant to this Agreement are true,
complete, and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make any such representation, warranty, or statement, under the circumstances in
which it was or will be made, not misleading.

     5.6  Sufficient Funds.   Purchaser has sufficient financial funds to
          ----------------                                               
accomplish the transactions contemplated by this Agreement.

     5.7  Due Diligence. Purchaser has had the opportunity to conduct a due
          -------------                                                    
diligence review of the Sellers' access control businesses of a scope that is
consistent with a transaction of this nature, including, without limitation,
reviewing books and records, talking to key employees, and inspecting
properties, and Purchaser has completed such due diligence to its satisfaction
and has received adequate information in connection with such due diligence to
enable it to evaluate the transactions contemplated by this Agreement.

                                    - 24 -

<PAGE>
 
                                   ARTICLE VI
                       Sellers and Shareholder Covenants

     Sellers and Shareholder, as applicable, covenant and agree as follows (all
of which covenants and agreements shall be conditions to Purchaser's obligations
hereunder):

     6.1  Conduct of Business.  Prior to the Closing, Sellers shall:  (i)
          -------------------                                            
operate in the ordinary course and in accordance with their current methods of
transacting business and shall use their respective best efforts to preserve the
goodwill of Sellers and the goodwill of employees, customers, suppliers,
distributors, governmental authorities and others having business dealings with
Sellers; (ii) maintain all qualifications and registrations that are required
for Sellers to carry on their business, as noted in  Section 4.26 above; (iii)
                                                     ------------             
not materially increase the salary, wages, bonus, commission, or other
compensation of any officer, employee, agent, or representative of Sellers or
enter into or amend in any material respect any profit-sharing, pension, stock
option, severance, retirement, bonus, deferred compensation, group life, and
health insurance, or other employee benefit plan, trust agreement, or
arrangement affecting any such person, or any compensation, separation, or
consultation agreement with any such person; (iv) not make or commit to make any
capital expenditures, capital additions or capital improvements; (v) maintain
books of account and records in the usual, regular and ordinary manner and
consistent with past practices; (vi) maintain all insurance policies and
required surety bonds, letters of credit, guaranties and similar instruments and
commitments now in place for the benefit of Sellers; (vii) and not enter into
any agreements relating to the lease or purchase of any real estate that is
intended to be included in the Assumed Liabilities; and (viii) not enter into
any agreements (including ISG Agreements) that are intended to be included in
the Assumed Liabilities and that, in the aggregate, result in a bonding
obligation of more than $100,000.

     6.2  No-Shop Provisions.  Until August 15, 1995, Sellers and the
          ------------------                                         
Shareholder agree that they shall not directly or indirectly enter into an
agreement or initiate contact with or participate in any discussions with any
other party (including the management of Sellers) with respect to the direct or
indirect sale of Sellers, Sellers' business or any of their material assets;
will not pursue a public or private offering of Sellers' securities; and will
not furnish to any person or entity any non-public information concerning
Sellers for the purpose or with the intent of permitting such person or entity
to evaluate a possible acquisition of the business or assets of Sellers.
Shareholder and Sellers shall notify Purchaser immediately if Shareholder or
Sellers become aware of any efforts to acquire Sellers or their businesses or
assets.


                                    - 25 -

<PAGE>
 
     6.3  Fulfillment of Conditions.  Prior to the Closing, Sellers shall not
          -------------------------                                          
take any action that would cause the conditions to the obligations of the
parties to effect the transactions contemplated hereby not to be fulfilled
including, without limitation, taking or causing to be taken any action that
would cause the representations and warranties made by Sellers and the
Shareholder herein not to be true, correct and accurate as of the Closing.

     6.4  Certain Acts.  Prior to the Closing, Sellers shall take all reasonable
          ------------                                                          
steps (including, without limitation, the payment of any fees and expenses
related thereto) that are within their power to cause to be fulfilled the
conditions precedent to Purchaser's obligations to consummate the transactions
contemplated hereby that are dependent upon the actions of Sellers.

     6.5  Access and Information.  Prior to the Closng, Sellers shall permit the
          ----------------------                                                
authorized representatives of Purchaser to have reasonable access to Sellers'
directors, officers, employees, agents, assets and properties, and all relevant
books, records and documents of or relating to the Assets during normal business
hours and shall furnish to Purchaser such information, financial records, and
other documents with respect to Sellers' operations and business as Purchaser
shall reasonably request.  Prior to the Closing, Sellers shall permit Purchaser
reasonable access to Sellers' accountants, auditors, customers and suppliers for
consultation or verification of any information obtained by Purchaser and shall
use their best efforts to cause such persons or entities to cooperate with
Purchaser in such consultation and in verifying such information.

     6.6  Environmental Testing.
          --------------------- 

     (a) Purchaser may engage one or more qualified firms to perform
environmental tests at the real properties constituting a portion of the Assets
(the "Environmental Tests"), which tests shall be performed as soon as
      -------------------                                             
practicable.  Promptly upon completion of the Environmental Tests, Purchaser
shall deliver to Sellers copies of any written reports delivered to Purchaser in
connection with the performance of such Environmental Tests.  The cost of the
Environmental Tests shall be borne solely by Purchaser.

     (b) If the Environmental Tests disclose any conditions that are reportable
or would require remedial action under applicable legal requirements, Sellers
shall be liable therefor and shall be responsible for the timely notification of
appropriate governmental authorities.  As soon as practicable after the
discovery of such conditions, Sellers shall, at their cost and expense, initiate
and thereafter complete any remedial measures necessary to comply fully with the
legal requirements applicable to such conditions; provided that, Sellers shall
                                                  -------- ----               
not not be obligated to complete any remedial


                                    - 26 - 

<PAGE>
 
measures if the cost of such remedial measures (that are not waived by
Purchaser) exceeds $300,000.  In the event such remedial measures cannot be
completed prior to the Closing, Purchaser may elect either to terminate this
Agreement or to proceed with the Closing.  If Purchaser elects to proceed with
the Closing, Purchaser shall grant to Sellers reasonable access to such
properties after the Closing for the purpose of Sellers' complying with its
obligations under this Section 6.6, and Sellers shall remain responsible for the
                       -----------                                              
cost and expense of such remedial measures (subject to the limit provided
above).  Moreover, if Purchaser elects to proceed with the Closing, Purchaser
shall not be entitled to assert a claim for indemnification against Sellers or
Shareholder pursuant to Section 9.1(f) with respect to the environmental issue
                        --------------                                        
in question.

     6.7  Repair and Casualty.  Prior to the Closing:
          -------------------                        

     (a) Sellers shall make all normal and customary repairs to the Assets.

     (b) If Sellers shall become aware of any loss, theft, casualty, or
condemnation affecting any of the Assets, Sellers shall promptly advise
Purchaser of such loss, theft, casualty or condemnation, as the case may be.

     (c) If any material portion of the Assets are lost or stolen or suffer any
damage or destruction, Sellers shall commence and thereafter diligently pursue
the repair, replacement, or reconstruction of such Assets; provided that,
                                                           -------- ---- 
Sellers shall not be obligated to do so if the cost of any such repair,
replacement, or reconstruction (that is not waived by Purchaser) would exceed
the proceeds of any insurance (excluding any deductible amount) payable to
Sellers or Shareholder as a result of such loss by more than $300,000.  If the
repair, replacement or reconstruction or any material portion of the Assets is
not completed prior to the Closing, Purchaser may elect either to terminate this
Agreement or to proceed with the Closing.

     (d) If Purchaser elects to proceed with the Closing, Sellers shall, at the
Closing, assign and transfer to Purchaser, without any additional consideration
therefor: (A) all insurance proceeds to which Sellers are entitled in respect of
such loss, theft, damage, or destruction and that Sellers have the right to
retain pursuant to any applicable contract, agreement, policy, or instrument
relating to such lost, stolen, damaged, or destroyed Assets; (B) all
condemnation proceeds to which Sellers are entitled with respect to such
condemnation and that Sellers have the right to retain; and (C) to the extent
permissible by applicable legal requirements, all rights of Sellers with respect
to any causes of action, whether or not litigation has commenced as of the
Closing,


                                    - 27 -

<PAGE>
 
in connection with such loss, theft, damage, destruction, or condemnation, and,
notwithstanding anything to the contrary in this Agreement, either (1) the
purchase price set forth in Section 2.1 above shall be reduced by the amount,
                            -----------                                      
after subtracting all insurance and condemnation proceeds received by Purchaser
pursuant to clauses (A) and (B) above, necessary to pay for the repair,
            -----------     ---                                        
replacement, or restoration of any such Assets (which Assets shall be valued at
full replacement cost) or (2) Sellers shall pay such amount to Purchaser at the
Closing in immediately available funds in U.S. dollars.

     (e) Sellers shall not compromise, adjust, or otherwise settle any property
damage claim made that relates to any of the Assets and that exceeds $100,000
without Purchaser's prior approval, unless Sellers are required to do so
pursuant to any applicable legal requirement.

     (f) Sellers shall consult with Purchaser regarding any condemnation or
eminent domain proceedings affecting any of the Assets and shall not settle,
compromise, or otherwise terminate same without Purchaser's prior approval,
unless Sellers are required to do so pursuant to any applicable legal
requirement.

     6.8  Employees.     Purchaser or its designee shall have the right (and the
          ---------                                                             
obligation) to offer to employ any and all employees of the Sellers, except that
neither Purchaser nor its designee shall be obligated to offer to employ any
such employees listed in Schedule 7.4.  Purchaser and Sellers shall as
                         ------------                                 
stipulated in Section 7.4 provide all severance or other benefits required to be
              -----------                                                       
paid or provided pursuant to any applicable laws, regulations, or agreements
(including U.S. COBRA health/dental benefits) to those employees of Sellers
listed in Schedule 7.4.
          ------------ 

     6.9  Supplemental Disclosure.  Each of the Sellers and Shareholder shall
          -----------------------                                            
have a continuing obligation promptly to supplement or amend each of the
Schedules hereto with respect to any matter that arises or is discovered after
the date hereof that, if existing or known at the date of the execution and
delivery of this Agreement, would have been required to be set forth or listed
in the Schedules hereto; provided, however, that for purposes of satisfying the
condition to closing set forth in Section 8.1(a), reference shall be made to the
                                  --------------                                
Schedules as of the date of the execution of this Agreement (and not as
supplemented by Sellers and Shareholder subsequent thereto), unless otherwise
agreed in writing by the Purchaser.

     6.10 Books and Records.  Each of the Sellers hereby agrees that, for a
          -----------------                                                
period of one year after the Closing, it shall provide or make available to the
Purchaser for review and copying such books, records and other information
relating to the operations or


                                    - 28 -

<PAGE>
 
the Assets prior to the Closing at such times as the other shall reasonably
request solely for purposes of complying with any applicable law, rule or
regulation.

     6.11 Use of Names.  From and after the Closing, the Sellers  and
          ------------                                               
Shareholder will not use any of the names set forth on Schedule 6.11, or any
                                                       -------------        
names bearing any similarity thereto or any derivatives thereof.

     6.12 HSR Act Filing.  Sellers and Shareholder shall cooperate with
          --------------                                               
Purchaser in making all necessary filings under the HSR Act.  The HSR filing
fees shall be borne equally by Sellers and Shareholder, on the one hand, and
Purchaser, on the other hand. Otherwise, each party will bear its own legal and
other expenses in connection with the preparation of such filings.

                                  ARTICLE VII
                              Purchaser Covenants

     Purchaser (and Purchaser's designee, if applicable) covenants and agrees as
follows (which covenants and agreements shall be conditions to Sellers' and
Shareholder's obligations hereunder):

     7.1  Fulfillment of Conditions.  Purchaser (and Purchaser's designee, if
          -------------------------                                          
applicable) shall not take any action that would cause the conditions upon the
obligations of the parties to effect the transactions contemplated hereby not to
be fulfilled including, without limitation, taking or causing to be taken any
action that would cause the representations and warranties made by Purchaser
(and Purchaser's designee, if applicable) herein not to be true, correct and
accurate as of the Closing.

     7.2  Certain Acts.  Purchaser (and Purchaser's designee, if applicable)
          ------------                                                      
shall take all reasonable steps (including, without limitation, the payment of
any fees and expenses related thereto) that are within its power to cause to be
fulfilled the conditions precedent to Sellers' obligations to consummate the
transactions contemplated hereby that are dependent upon the actions of
Purchaser (and Purchaser's designee, if applicable).

     7.3  Bonds Relating to the Cardkey Business Agreements.  Purchaser (and
          -------------------------------------------------                 
Purchaser's designee, if applicable) shall take all reasonable steps that are
within its power to become liable under, or procure replacement bonds for, the
bonds that Shareholder is currently liable for relating to certain of the
Assumed Liabilities, including, but not limited to, Purchaser's entering into
counter indemnification regarding bonds issued by the American International
Group or any of its member companies such as AIG Europe (UK) Limited; provided
                                                                      --------
that, neither Purchaser (nor Purchaser's designee, if applicable) warrants that
----                                                                           
Shareholder


                                    - 29 -

<PAGE>
 
shall be released from such bonds; and provided further, that Purchaser shall
                                       -------- -------                      
not be obligated to pay any fees or incur any expenses in order to become liable
under, or to procure, such replacement bonds.

     7.4  Employees.  Purchaser, or its designee, undertakes to employ all
          ---------                                                       
present employees of Sellers, except those employees of Cardkey US listed on
Schedule 7.4 hereto.  With the exception of those employees of Cardkey US listed
------------                                                                    
on Schedule 7.4 hereto, Purchaser or its designee will assume all liabilities
   ------------                                                              
noted in Exhibit C hereto of Sellers in respect of such present employees of
         ---------                                                          
Sellers and those obligations and liabilities listed in Section 4.17.  If
                                                        ------------     
Sellers desire to provide more than four weeks severance pay to any employee
listed in Schedule 7.4 and if Purchaser has consented in writing to the payment
          ------------                                                         
of such excess amounts or if  Sellers are obligated by contract to provide more
than 4 weeks severance pay to any employee listed in Schedule 7.4, then, in
                                                     ------------          
either case, Purchaser shall reimburse Sellers at the Closing  for any severance
amounts in excess of 4 weeks paid by Sellers.  Neither Purchaser,  Shareholder,
nor Sellers are aware of any obligation under law or contract to pay more than 4
weeks severance pay to any employee listed in Schedule 7.4.  No employee of
                                              ------------                 
Sellers or Shareholder is intended to be a third party beneficiary of this
                                                                          
Section 7.4.
----------- 

     7.5  HSR Act Filing.  Purchaser shall cooperate with Sellers and
          --------------                                             
Shareholder in making all necessary filings under the HSR Act.  The HSR filing
fees shall be borne equally by Sellers and Shareholder, on the one hand, and
Purchaser, on the other hand.  Otherwise, each party will bear its own legal and
other expenses in connection with the preparation of such filings.

                                  ARTICLE VIII
                               Closing Conditions

     8.1  Conditions to Obligations of Purchaser.  The obligations of Purchaser
          --------------------------------------                               
under this Agreement are subject to the satisfaction at or prior to the Closing
of the following conditions, but compliance with any such conditions may be
waived by Purchaser in writing:

          (a) Representations and Warranties True; Conditions Satisfied.  All
              ---------------------------------------------------------      
     representations and warranties of Sellers and the Shareholder contained in
     this Agreement shall be true and correct in all material respects at and as
     of the Closing with the same effect as though such representations and
     warranties were made at and as of the Closing; Sellers and the Shareholder
     shall have performed and complied with all the covenants and agreements and
     satisfied all the conditions required by this Agreement to be performed,
     complied with or

                                    - 30 -

<PAGE>
 
     satisfied by them at or prior to the Closing; and Purchaser shall have
     received a certificate to the foregoing effect from the President or any
     Vice President of each Seller and the Shareholder.

          (b) Litigation.  Other than as disclosed on Schedule  4.11 at the time
              ----------                              --------------            
     of the execution of this Agreement, there shall be no pending or threatened
     litigation in any court or any proceeding before or by any administrative
     or governmental authority against the Shareholder, Sellers, or Purchaser to
     restrain or prohibit or obtain damages or other relief with respect to this
     Agreement or the consummation of the transactions contemplated hereby that
     would or might materially and adversely affect the closing of the
     transaction contemplated hereby or the value of the Assets.

          (c) Closing Deliveries.  Sellers and Shareholder shall have delivered
              ------------------                                               
     all of the items required by Section 3.2 to be delivered by them at the
                                  -----------                               
     Closing.

          (d) Absence of Changes.  There shall not have been any material
              ------------------                                         
     adverse changes in Sellers' business, prospects or financial condition.

          (e) Compliance.  All applicable regulatory requirements shall have
              ----------                                                    
     been complied with.

          (f) Consents. All necessary contractual or governmental consents or
              --------                                                       
     clearances shall have been obtained and all necessary contractual or
     governmental notices shall have been given.

     8.2  Conditions to Obligations of Sellers and Shareholder.  The obligations
          ----------------------------------------------------                  
of Sellers and the Shareholder under this Agreement are subject to the
satisfaction at or prior to the Closing of the following conditions, but
compliance with any such conditions may be waived by Sellers and the Shareholder
in writing:

          (a) Representations and Warranties True; Conditions Satisfied.  All
              ---------------------------------------------------------      
     representations and warranties of Purchaser contained in this Agreement
     shall be true and correct in all material respects at and as of the Closing
     with the same effect as though such representations and warranties were
     made at and as of the Closing; Purchaser shall have performed and complied
     with all the covenants and agreements and satisfied all the conditions
     required by this Agreement to be performed, complied with, or satisfied by
     it at or prior to the Closing; and Sellers shall have received a
     certificate to the foregoing effect from an officer of Purchaser.


                                    - 31 -

<PAGE>
 
          (b) Litigation.  Other than as disclosed on Schedule  4.11 at the time
              ----------                              --------------            
     of the execution of this Agreement, there shall be no pending or threatened
     litigation in any court or any proceeding before or by any administrative
     or governmental authority against the Shareholder, Sellers, or Purchaser to
     restrain or prohibit or obtain damages or other relief with respect to this
     Agreement or the consummation of the transactions contemplated hereby that
     would or might materially and adversely affect the closing of the
     transaction contemplated hereby.

          (c) Closing Deliveries.  Purchaser shall have delivered all of the
              ------------------                                            
     items required by Section 3.4 to be delivered by it at the Closing.
                       -----------                                      

          (d) Compliance.  All applicable regulatory requirements shall have
              ----------                                                    
     been complied with.

          (e) Consents. All necessary governmental consents or clearances shall
              --------                                                         
     have been obtained and all necessary governmental notices shall have been
     given.

                                   ARTICLE IX
                                Indemnification

     9.1  Purchaser's Right to Indemnification.  Sellers and the Shareholder
          ------------------------------------                              
shall jointly and severally indemnify and hold Purchaser, Purchaser's
designee(s), and their respective directors, officers, employees, and agents
(collectively, the "Purchaser Indemnified Parties" and individually, a
"Purchaser Indemnified Party") harmless from any and all liabilities,
obligations, claims, contingencies, damages, costs, and expenses (including all
court costs and reasonable attorneys' fees) ("Claims") that any Purchaser
Indemnified Party may suffer or incur as a result of or relating to:

          (a) Subject to the limitations of Section 9.5(a) and Section 9.5(b),
                                            --------------     -------------- 
     the breach or inaccuracy, or any alleged breach or inaccuracy, of any of
     the representations, warranties, covenants or agreements made by Sellers
     and/or the Shareholder herein or pursuant hereto, it being understood and
     agreed, however, that the covenants of Sellers and Shareholder in Section
                                                                       -------
     1.4, Section 1.6, Section 2.3(b), Section 2.4(c), Section 3.3, Section 7.4,
     ---  -----------  --------------  --------------  -----------  ----------- 
     and Article 11 are not subject to the limitations of Section 9.5(b);
         ----------                                       -------------- 

          (b) Subject to the limitations of Section 9.5(c), any lawsuit, claim,
                                            --------------                     
     proceeding, or liability of any nature  arising out of warranty or similar
     claims pertaining to hardware, software, or services sold or performed
     prior to the

                                    - 32 -

<PAGE>
 
     Closing under agreements, contracts, leases, instruments, arrangements and
     commitments that are included in the Assumed Liabilities, but only to the
     extent that the amount of the Claim(s) exceeds the amount reserved therefor
     on the Audited Closing Balance Sheet;

          (c) Subject to the limitations of Section 9.5(a) and Section 9.5(b),
                                            --------------     --------------  
     any lawsuit, claim, proceeding, or liability of any nature (other than
     those within the scope of (b) above and (d), (e), (f), (g), and (h) below)
     arising out of any act or transaction occurring prior to or as a result of
     the Closing, or arising out of facts or circumstances that existed at or
     prior to the Closing, including without limitation any liability or
     obligation arising from noncompliance with any bulk sales or similar law,
     or any liability or obligation of any nature of the Sellers (other than
     Cardkey Australia) or Shareholder that is not included in the Assumed
     Liabilities;

          (d) Subject to the provisions of Section 4.17 and Section 7.4, any
                                           ------------     -----------     
     liabilities, obligations, claims or contingencies of any nature due or
     payable at any time whatsoever (other than those within the scope of (g)
     below), to any director, officer, employee, agent, or representative of
     Sellers or Shareholder (including any of such persons terminated by Sellers
     or Shareholder before the Closing or after the Closing by Shareholder or
     Sellers (other than Cardkey Australia) and any such persons hired by
     Purchaser as of the Closing) in connection with their services to, or
     employment by, Sellers or Shareholder prior to the Closing or Sellers
     (other than Cardkey Australia) or Shareholder after the Closing, including
     without limitation any claims for violation of any foreign, federal, state,
     or local laws prohibiting employment discrimination, including without
     limitation, Title VII of the Civil Rights Act of 1964, the Age
     Discrimination in Employment Act of 1967, the Americans with Disabilities
     Act, applicable human or civil rights laws, claims for wrongful discharge
     or breach of contract, and claims for sexual harassment, emotional
     distress, defamation, or personal injury,

          (e) any tax arising out of or resulting from the ownership of the
     Assets prior to the Closing, the operations of Sellers or Shareholder prior
     to the Closing or Sellers (other than Cardkey Australia) or Shareholder
     after the Closing, any transaction or activity of Sellers or Shareholder
     prior to the Closing or Sellers (other than Cardkey Australia) or
     Shareholder after the Closing, or any income derived by Sellers or
     Shareholder relating to the period prior to the Closing or Sellers (other
     than Cardkey Australia) or Shareholder after the Closing (whether such
     income arises from


                                    - 33 -

<PAGE>
 
     the operations of Sellers or Shareholder or from income tax gain realized
     as a result of the transactions contemplated by this Agreement);

          (f) Subject to the limitations of Section 9.5(a) and Section 9.5(b),
                                            --------------     -------------- 
     any lawsuit, claim, proceeding, or liability of any nature arising out of
     any violation of any  foreign, federal, state, or local environmental laws
     or regulations, including without limitation, those relating to air
     pollution, water pollution, noise control and/or the handling, discharge,
     disposal or recovery of on-site or off-site hazardous substances.

          (g) Subject to the limitations of Section 9.5(a) and Section 9.5(b)
                                            --------------     --------------
     and subject to the provisions of Section 4.17, and Section 7.4, any wages,
                                      ------------      -----------            
     salaries or other such compensation to any director, officer, employee,
     agent, or representative of Sellers or Shareholder (including any of such
     persons terminated by Sellers or Shareholder at or prior to the Closing or
     Sellers (other than Cardkey Australia) or Shareholder after the Closing and
     any such persons hired by Purchaser as of the Closing) in connection with
     their services to, or employment by, Sellers or Shareholder prior to the
     Closing or Sellers (other than Cardkey Australia) or Shareholder after the
     Closing, including without limitation, any liabilities, obligations, claims
     or contingencies under any profit-sharing, pension, stock option,
     severance, retirement, bonus, deferred compensation, group life and health
     insurance, vacation, sick leave, or other employee benefit plan or policy,
     or under any trust, agreement, or arrangement of any nature;

          (h) any lawsuit, claim, proceeding, or liability of any nature arising
     out of any breach or default by Sellers or Shareholder under any of the
     agreements, contracts, leases, instruments, arrangements, and commitments
     being assumed by Purchaser's designee as described in item 2 of Exhibit C
                                                                     ---------
     hereto.

     9.2  Sellers' or Shareholder's Right to Indemnification.  Purchaser (and
          --------------------------------------------------                 
Purchaser's designee, if applicable) shall indemnify and hold Sellers and
Shareholder and their respective directors, officers, employees, and agents
(collectively, the "Seller Indemnified Parties" and individually, a "Seller
Indemnified Party") harmless from any and all Claims that any Seller Indemnified
Party may suffer or incur as a result of or relating to:

          (a) the breach or inaccuracy, or any alleged breach or inaccuracy, of
     any of the representations, warranties,

                                    - 34 - 

<PAGE>
 
     covenants, or agreements made by Purchaser (or Purchaser's designee, if
     applicable) herein or pursuant hereto;

          (b) liabilities, obligations, liens, claims, encumbrances, and
     contingencies (i) expressly assumed by Purchaser as an Assumed Liability or
     (ii) arising after the Closing in connection with the Assets or Purchaser's
     business, except in each case of (i) and (ii) to the extent that such
     liabilities, obligations, liens, claims, encumbrances, or contingencies are
     attributable to actions taken or omitted to be taken by Sellers and/or the
     Shareholder prior to the Closing in breach of this Agreement or give rise
     to a claim for indemification in favor of Purchaser pursuant to Section
                                                                     -------
     9.1;
     ---
          (c) all sales, use, transfer, excise, and other taxes, if any, arising
     out of the sale of the Assets, but specifically excluding any taxes covered
     by Section 9.1(e);
        -------------- 

          (d) liabilities, obligations, liens, claims, encumbrances, and
     contingencies arising under the bonds specified in Section 7.3 to the
                                                        -----------       
     extent a Claim is made against Sellers or Shareholder thereunder that
     relates to the period prior to the Closing, subject to the allocation of
     liability principles specified in Section 9.5(c); and  liabilities,
                                       --------------                   
     obligations, liens, claims, encumbrances, and contingencies  under the
     bonds specified in Section 7.3 to the extent a Claim is made against
                        -----------                                      
     Sellers or Shareholder thereunder that arises during, and relates to, the
     period subsequent to the Closing.

     9.3  Notice.  The party seeking indemnification hereunder ("Indemnitee")
          ------                                                 ----------  
shall within 10 business days of receipt of any third-party Claim promptly
notify the party from whom indemnification is sought ("Indemnitor") of any such
                                                       ----------              
Claim as to which Indemnitee asserts a right to indemnification.  Any
indemnification obligations of an Indemnitor under this Article IX shall be paid
                                                        ----------              
on a current basis.  Indemnitee shall bill Indemnitor for any such Claims no
more frequently than on a monthly basis, and Indemnitor shall promptly pay
Indemnitee upon receipt of any such bill and in no event later than 30 days from
receipt of invoice.

     9.4  Defense of Third-Party Claims; Scope of Indemnity. The Indemnitor may
          -------------------------------------------------                    
elect to assume and control the defense of any Claim, including the employment
of counsel reasonably satisfactory to the Indemnitee  and the payment of
expenses related thereto, if (i) the Indemnitor provides reasonable evidence to
the Indemnitee of its financial ability to satisfy such indemnification
obligation and (ii) the Claim does not seek to impose any liability or
obligation on the Indemnitee other than for money damages.  If the Indemnitor so
elects to assume and control the defense of a Claim,

                                    - 35 -

<PAGE>
 
then the Indemnitee may employ separate counsel and participate in the defense
thereof, but the Indemnitee shall be responsible for the fees and expenses of
such counsel unless the Indemnitor has failed to adequately assume the defense
of such Claim or to employ counsel with respect thereto.  A claim for indemnity
under Section 9.1 or Section 9.2 that arguably falls within the scope of both a
      -----------    -----------                                               
specific subsection thereof and a more general subsection thereof, shall be
governed by the specific subsection, rather than the general subsection.

     9.5  Limitations on Indemnification.
          ------------------------------ 

          (a) Subject to the provisions of Section 9.5(d), the maximum
                                           --------------              
     aggregate amount of indemnification that may be required of Sellers and
     Shareholder under Sections 9.1(a) and 9.1(c) shall be $4.0 million and
                       --------------------------                          
     Sections 9.1(f) and 9.1(g) shall be $4.5 million, and in no event shall
     --------------------------                                             
     Sellers and Shareholder be required to pay an amount in excess of such
     amount pursuant to such Sections.  The maximum aggregate amount of
     indemnification that may be required of Sellers and Shareholder under this
     Article IX shall be $4.5 million, and in no event shall Sellers and
     ----------                                                         
     Shareholder be required to pay an amount in excess of such amount pursuant
     to this Article IX.
             ---------- 

          (b) Subject to the provisions of Section 9.5(d), the Sellers and
                                           --------------                 
     Shareholder, on the one hand, and Purchaser, on the other hand, shall not
     be required to indemnify, defend or hold harmless the other party pursuant
     to Sections 9.1(a) and 9.2(a) unless and until the amount of all Claims
        --------------------------                                          
     exceeds, in the aggregate, $200,000 (and then only to the extent that such
     Claims exceed $200,000); the Sellers and Shareholder shall not be required
     to indemnify, defend or hold harmless the Purchaser Indemnified Parties
     pursuant to Sections 9.1(c) or 9.1(f) unless and until the amount of all
                 -------------------------                                   
     Claims exceeds, in the aggregate, $50,000 (and then only to the extent that
     such Claims exceed $50,000); and the Sellers and Shareholder shall not be
     required to indemnify, defend or hold harmless the Purchaser Indemnified
     Parties pursuant to Section 9.1(g) unless and until the amount of all
                         --------------                                   
     Claims exceeds, in the aggregate, $10,000 (and then only to the extent that
     such Claims exceed $10,000).

          (c) Sellers, Shareholder, and Purchaser agree that the liability of
     the Sellers and Shareholder for any Claims arising under Section 9.1(b)
                                                              --------------
     above (the "Project Related Claims")) shall be governed by the following
     principles:

                                    - 36 -

<PAGE>
 
               (i)   Sellers and Shareholder shall not have any liability for
          the first $300,000 of the Project Related Claims.

               (ii)  Sellers and Shareholder shall be responsible for 100% of
          the Project Related Claims, with respect to the cumulative amount of
          the Project Related Claims that is more than $300,000 but less than
          $2,150,000.

               (iii) Sellers and Shareholder shall be responsible for 50% of the
          Project Related Claims, with respect to the cumulative amount of the
          Project Related Claims that is more than $2,150,000 but less than that
          amount equal to 30% of the amounts represented by outstanding bonds
          (measured at the time of Closing) of either the Shareholder or Sellers
          relating to Sellers' access control business.

               (iv)  Sellers and Shareholder shall have no responsibility for
          any Project Related Claims, to the extent that the cumulative amount
          of all of the Project Related Claims exceeds that amount equal to 30%
          [$5.4 million] of the amounts represented by outstanding bonds
          (measured at the time of Closing) of either the Shareholder or Sellers
          relating to Sellers' access control business.

          (d) For purposes of honoring the indemnity obligations of Section 9.1
                                                                    -----------
     and Section 9.2, the Indemnitor agrees to make available for the benefit of
         -----------                                                            
     the Indemnitee any insurance proceeds collected or collectible by the
     Indemnitor with respect to an event that gives rise to a right for
     indemnification under Section 9.1 or Section 9.2.  Each Indemnitor agrees
                           -----------    -----------                         
     to use its best efforts at its sole expense to collect any such insurance
     proceeds that are available.  In addition, the Indemnitee shall at its
     option be subrogated to the Indemnitor's rights to seek and receive such
     insurance payments.  Accordingly, the parties intend that any insurance
     proceeds collected by the Indemnitor shall count as damages paid by the
     Indemnitor and shall count against the dollar limitations provided for in
     Section 9.5(a) and Section 9.5(b).  Thus, by way of example and not
     --------------     --------------                                  
     limitation, in the case of a claim for indemnity by a Purchaser Indemnified
     Party pursuant to Section 9.1(d), any insurance proceeds collected by the
                       --------------                                         
     Indemnitor (after using best efforts to collect such insurance proceeds)
     shall be counted against the "floor" of $50,000 provided for in Section
                                                                     -------
     9.5(b).
     ------ 

     9.6  Termination of Right to Indemnification.  Notwithstanding Sections 9.1
          ---------------------------------------                   ------------
and 9.2 hereof, the Indemnitor shall not be required
    ---                                             

                                    - 37 - 

<PAGE>
 
to indemnify the Indemnitee with respect to any third-party Claims unless the
Indemnitee shall have complied with Section 9.3 hereof regarding notice and
                                    -----------                            
shall not be required to indemnify the Indemnitee with respect to any Claims
unless any notice is provided to the Indemnitor on or prior to the following
dates: (a) for a claim for indemnification under Section 9.1(a) or 9.2(a), by
                                                 --------------    ------    
July 31, 1997 (except for those Section 9.1(a) claims covered by the following
                                --------------                                
clause (b); (b) for a claim for indemnification under Section 1.4 or Article 11,
                                                      -----------    ---------- 
by the 37th month annivesary of the Closing Date; and (c) for all other Claims,
by the expiration of the applicable statutory period of limitations relating
thereto, but if the indemnification Claim under this clause (b) arises from a
claim brought by a third party, no later than 30 days following the expiration
of the statutory period of limitations applicable to the claim by the third-
party.

                                   ARTICLE X
                                  Termination

     10.1 Events of Termination.  Subject to Section 10.2 below, this Agreement
          ---------------------              ------------                      
and the transactions contemplated hereby may be terminated and abandoned:

          (a) at any time prior to the Closing by mutual written consent of
     Purchaser, Sellers and the Shareholder;

          (b) by any party if a material condition to its performance hereunder
     shall not be satisfied or waived at the Closing;

          (c) by Purchaser if a final non-appealable judgment has been entered
     against it or its affiliates restraining, prohibiting, declaring illegal or
     awarding substantial damages in connection with the transactions
     contemplated hereby;

          (d) by Sellers or the Shareholder if a final non-appealable judgment
     has been entered against any of them or their affiliates restraining,
     prohibiting, declaring illegal or awarding substantial damages in
     connection with the transactions contemplated hereby;

          (e) by Purchaser pursuant to Sections 6.6 or 6.7 hereof; or
                                       ------------    ---           

          (f) by either Purchaser or Shareholder if the Closing has not occurred
     by October 31, 1995.

     10.2 Limitation on Right to Terminate.  A party shall not be allowed to
          --------------------------------                                  
exercise any right of termination pursuant to Section 10.1 above if the event
                                              ------------                   
giving rise to the termination right shall


                                    - 38 -

<PAGE>
 
be due to the willful failure of such party seeking to terminate this Agreement
to perform or observe in any material respect any of the covenants or agreements
set forth herein to be performed or observed by such party or if such party
shall then be in breach of this Agreement.

     10.3 Rights Upon Termination.  If this Agreement is terminated as permitted
          -----------------------                                               
under this Article X, such termination shall be without liability of or to any
           ---------                                                          
party to this Agreement or any partner, shareholder, director, officer,
employee, agent, servant, consultant, or representative of such party and the
parties shall be relieved of any further obligation to the other; provided,
                                                                  -------- 
however, that no termination of this Agreement, pursuant to this Article X or
-------                                                          ---------   
under any other express right of termination provided elsewhere in this
Agreement, shall operate to release either party from any liability to the other
party incurred before the date of such termination or from any liability
resulting from any willful misrepresentation made in connection with this
Agreement.  The provisions of this Section 10.3 shall not be construed as a
                                   ------------                            
waiver by Purchaser or Sellers of the remedy of specific performance, it being
agreed that Purchaser and Sellers shall each have the right to specific
performance with respect to this Agreement.  If Sellers and Shareholder fail to
close the transactions contemplated by this Agreement in breach of this
Agreement, then the Good Faith Deposit shall be promptly returned to Purchaser.
In all other cases, the Good Faith Deposit shall be released to Sellers and the
Shareholder as liquidated damages, in full and final satisfaction of any and all
claims Sellers and the Shareholder may have against Purchasers.

                                   ARTICLE XI
                                   Noncompete

     11.1 Noncompetition.  For a period of three years following the Closing,
          --------------                                                     
neither Shareholder nor any of the Sellers, nor any of their respective
Affiliates shall, directly or indirectly, on its own behalf or on behalf of any
competitor of Purchaser or on behalf of any of their respective Affiliates:

          (i)   Subject to the provisions of Section 11.2, engage (whether as
                                             ------------                    
     owner, partner, stockholder, joint venturer, manager or investor) in the
     manufacture, distribution or sale of any access control products in Europe,
     North America, or Australia (the "Territory");

          (ii)  influence or attempt to influence any franchisees, customers or
     potential customers of Purchaser that are located in the Territory to
     purchase, acquire or contract for any access control products, other than
     from Purchaser or any of its Affiliates;

                                    - 39 -

<PAGE>
 
          (iii) Subject to the provisions of Section 11.2, affiliate itself
                                             ------------                  
     with, or own or have a proprietary interest of any kind in, any business or
     firm that manufactures, distributes or sells access control products in the
     Territory;

          (iv)  alone or acting with others, (x) employ or attempt to employ or
     solicit for any employment competitive with Purchaser, any of Purchaser's
     employees who worked for Sellers prior to the Closing, or (y) influence or
     seek to influence any employee to leave Purchaser's employment.

     As used in this Agreement, the term "Affiliate" means with respect to the
Person in question, any person or entity directly or indirectly controlling,
controlled by or under common ownership or control with, the person or entity in
question, and the term "Person" shall mean an individual or a corporation,
partnership, or any other type of entity.

     11.2 Permitted Activities.  The provisions of Section 11.1(i) and 11.1(ii)
          --------------------                     ----------------------------
shall not be deemed to prevent Shareholder and Sellers from carrying on (x) the
Shareholder's existing mechanical locking business activities, (y) the existing
VingCard business, and (z) the business of Solid (except as such business is
conducted in the United States, where competition in violation of Section
                                                                  -------
11.1(i) and 11.1(ii) shall not be permitted).
--------------------                         

     11.3 Notice; Cure; Damages.  If Purchaser desires to make any claim against
          ---------------------                                                 
Shareholder or any of the Sellers or any of its Affiliates for any breach or
alleged breach of this Article XI, then Purchaser shall give notice to the
Shareholder or the Seller in question, as applicable, which notice shall inform
the party to whom it is directed in reasonable detail of the basis of
Purchaser's claim that a breach or alleged breach of this Article XI has
occurred or may be about to occur.  The party that has breached or alleged to
have breached this Article XI shall within 15 days of receiving such notice
investigate and initiate good faith cure efforts and shall within 45 days of
receiving such notice cure any such breach that has occurred (that is capable of
being cured).

     For each and every occurrence of an uncured breach of this Article XI,
Sellers and Shareholder jointly and severally agree that Purchaser shall be
entitled to a payment of $100,000, as a liquidated damage and not as a penalty.
The parties agree that if the breach in question involves the inadvertant sale
of any access control products (in breach of Section 11.1(i)), then for purposes
                                             ---------------                    
of the application of the preceding sentence, the parties agree that the Sellers
and the Shareholder shall be entitled to cure such breach by paying to the
Purchaser the amount of the gross margin realized by the breaching party with
respect to such sale.  Since

                                    - 40 -

<PAGE>
 
this cure provision is intended to be available for inadvertent sales (and not
deliberate or repeated breaches), Sellers and the Shareholder shall not be
entitled to cure such breaches by paying to the Purchaser the amount of the
gross margin if the amount of the gross margin theretofore paid to Purchaser in
respect of prior breaches exceeds $100,000.

     The parties also agree that the liquidated damages provided for herein
shall be paid as provided for herein, regardless of whether the provision of
this Agreement to which the liquidated damage relates has theretofore been, or
is thereafter, determined (by a court of competent jurisdiction or other
tribunal having jurisdiction in the matter) to be unenforceable.

     11.4 Miscellaneous.
          ------------- 

     (a) In the event of a violation of this Agreement, Purchaser shall be
entitled to injunctive relief against Sellers and the Shareholder in addition to
any other legal or equitable remedies that may be available.  If any provision
of Article XI of this Agreement is deemed invalid in part or in whole, it shall
   ----------                                                                  
be curtailed, whether as to time, area covered or otherwise, as and to the
extent required for its validity under applicable law and, as so curtailed,
shall be enforceable.  Sellers and the Shareholder acknowledge that Sellers' and
the Shareholder's obligations under Article XI hereof were a material inducement
                                    ----------                                  
and condition to Purchaser's entering into the Purchase Agreement and performing
the transactions contemplated thereby.

     (b) Sellers and Shareholder acknowledge and agree that any Person to whom
Purchaser may sell all or substantially all of the  access control business
being purchased under this Agreement shall be entitled to the benefit of the
covenants of Sellers and Shareholder under Article XI hereof.
                                           ----------        

     (c) Each of Sellers and Shareholder agrees that Purchaser (or Purchaser's
nominee) shall be its preferred supplier for any electronic access control
equipment purchased from outside vendors for so long as the covenant set forth
in Section 11.1 shall remain in force and effect.
   ------------                                  

     (d) As used in this Article XI, the term "Europe" shall mean Eastern and
                         ----------                                          
Western Europe, but not Russia and "North America" shall mean Canada, the United
States, and Mexico.

                                  ARTICLE XII
                                 Miscellaneous

     12.1 Notices.  All notices that are required or may be given pursuant to
          -------                                                            
the terms of this Agreement shall be in writing and 


                                    - 41 -

<PAGE>
 
delivered personally or by a recognized courier service or by registered or
certified mail, postage prepaid, or via fascimile transmittal (receipt
confirmed) to the parties at the following addresses (or to the attention of
such other person or such other address as any party shall provide to the other
parties by notice in accordance with this Section):

          If to Purchaser:
          --------------- 

          Amtech Corporation
          17304 Preston Road
          Building E-100
          Dallas, Texas  75252
          Attention:  General Counsel
          Fax No.:  214-733-6693

          If to Sellers:
          ------------- 

          Arrow Lock Manufacturing Company
          103-00 Foster Avenue
          Brooklyn, New York  11236
          Attention:  Clas Thelin
          Fax No.:  718-257-3299

          Copy to:
          ------- 

          Claes Albinsson
          Mannheimer Swartling Advokatbyra AB
          P.O. Box 4291
          S-203 14 Malmo
          Sweden
          Fax No.:  46-40-25-08-01

          If to Shareholder:
          ----------------- 

          Assa Abloy AB
          Klarabergsviadukten 90
          Stockholm, Sweden
          Attention:  Carl-Henric Svanberg
          Fax No.:  46-8-698-8560

          Copy to:
          ------- 

          Claes Albinsson
          Mannheimer Swartling Advokatbyra AB
          P.O. Box 4291
          S-203 14 Malmo
          Sweden
          Fax No.:  46-40-25-08-01


                                    - 42 -

<PAGE>
 
     Any such notice or other communication shall be deemed to have been given
and received on the day it is personally delivered or delivered by a recognized
courier service as aforesaid or, if mailed, when received, or if sent via
facsimile transmittal, when received.

     12.2 Attorneys' Fees and Costs.  In the event that attorneys' fees or other
          -------------------------                                             
costs are incurred to secure performance of any of the obligations herein
provided for, or to establish damages for the breach thereof or to obtain any
other appropriate relief, whether by way of prosecution or defense, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred therein.

     12.3 Survival.  The representations, warranties, covenants, and agreements
          --------                                                             
made by the parties pursuant to this Agreement shall survive the Closing
regardless of what investigations, if any, either party shall have made prior to
the Closing.

     12.4 Further Assurances.  Each party hereto agrees to execute any and all
          ------------------                                                  
documents and to perform such other acts as may be necessary or expedient to
further the purposes of this Agreement and the transactions contemplated hereby.

     12.5 Publicity.  Upon execution of this Agreement, the parties shall issue
          ---------                                                            
an agreed-upon joint press release and otherwise cooperate with each other in
the development and distribution of all news releases and other public
disclosures relating to the transactions contemplated hereby.  Neither Sellers,
Shareholder nor Purchaser shall issue or make, or cause to have issued or made,
any press release or announcement concerning the transactions contemplated
hereby without the advance approval in writing by the other party, or, after
giving reasonable notice to the other parties, as its counsel shall deem
necessary pursuant to any judicial or governmental request, requirement, or
order.

     12.6 Expenses.  Except as otherwise stated herein, each of the parties
          --------                                                         
hereto shall, whether or not the transactions contemplated hereby are
consummated, bear its own attorneys', accountants', auditors', or other fees,
costs, and expenses incurred in connection with the negotiation, execution, and
performance of this Agreement or any of the transactions contemplated hereunder.

     12.7 No Brokers.  Each party to this Agreement represents to the other
          ----------                                                       
party that it has not incurred and will not incur any liability for brokerage
fees or agents' commissions in connection with this Agreement and the
transactions contemplated hereby, except for the fees payable by Purchaser to
Broadview & Associates.  Each party to this Agreement agrees that it will
indemnify and hold harmless the other part(ies) against any claim for brokerage
and


                                    - 43 -

<PAGE>
 
finders' fees or agents' commissions in connection with the negotiation or
consummation of the transactions contemplated by this Agreement.

     12.8 Counterparts.  This Agreement may be executed in one or more
          ------------                                                
counterparts for the convenience of the parties hereto, all of which together
shall constitute one and the same instrument.

     12.9 Assignment.  Neither this Agreement nor any of the rights, interests,
          ----------                                                           
or obligations hereunder shall be assigned or delegated by Sellers, Shareholder,
or Purchaser, without the prior written consent of the other parties; except
that Purchaser shall be allowed to assign its rights under this Agreement to one
or more entities controlled by it (but any such assignment shall not relieve it
of its obligations under this Agreement).  Any assignment or delegation made in
violation of this Agreement shall be null and void.  This Agreement is not
intended to confer upon any person (including employees of Sellers) other than
the parties hereto, any rights or remedies hereunder.

    12.10 Entire Agreement.  This Agreement and the related documents contained
          ----------------                                                     
as Exhibits and Schedules hereto or expressly contemplated hereby contain the
entire understanding of the parties relating to the subject matter contained
herein and supersede all prior written or oral and all contemporaneous oral
agreements and understandings relating to the subject matter hereof, including
without limitation, the Letter of Intent dated April 5, 1995, as extended by
letter amendment dated May 10, 1995.  This Agreement cannot be modified or
amended except in writing signed by the party against whom enforcement is
sought.

    12.11 Exhibits.  All Exhibits and Schedules to this Agreement are
          --------                                                   
incorporated herein by reference and made a part hereof for all purposes.

    12.12 Knowledge.  Whenever a statement regarding the existence or absence of
          ---------                                                             
facts in this Agreement is qualified by a phrase such as "to such person's
knowledge" or "known to such person" it is intended by the parties that the
information to be attributed to such Person is information actually or
constructively known to (a) the person in the case of an individual or (b) in
the case of a corporation or other entity an officer or members of senior
management as a result of his/or her employment by the employer.  The person has
constructive knowledge of those matters which the individual involved could
reasonably be expected to have as a result of undertaking an investigation of
such a scope and extent as a reasonably prudent person would undertake
concerning the particular subject matter.


                                    - 44 -

<PAGE>
 
     12.13     Arbitration.
               ----------- 

      (a)  All claims, disputes, and controversies arising out of or relating to
this Agreement or the performance, breach, validity, interpretation, application
or enforcement hereof, including any claims for equitable relief or claims based
on contract, tort, statute, or any alleged breach, default, or misrepresentation
in connection with any of the provisions hereof, will be resolved by binding
arbitration in accordance with the International Arbitration Rules of the
American Arbitration Association ("AAA").  A party may initiate arbitration by
                                   ---                                        
sending written notice of its intention to arbitrate to the other party and to
the AAA office located in Denver, Colorado (the "Arbitration Notice").  The
                                                 ------------------        
Arbitration Notice will contain a description of the dispute and the remedy
sought.  The arbitration will be conducted at the offices of the AAA in Denver,
Colorado before an independent and impartial arbitrator who is selected by
mutual agreement, or, in the absence of such agreement, before three independent
and impartial arbitrators, of whom each party will appoint one, with the third
being chosen by the two appointed by the parties.  In no event may the demand
for arbitration be made after the date when the institution of a legal or
equitable proceeding based on such claim, dispute, or other matter in question
would be barred by the applicable statute of limitations.

      (b)  The arbitration and any discovery conducted in connection therewith
shall be conducted in accordance with the International Arbitration Rules of the
AAA in effect at the time of the arbitration, including without limitation the
expedited procedures set forth therein (the "AAA Rules").  The arbitrator(s)
                                             ---------                      
will deliver their decision in writing, together with a summary of the reasons
for their decision, including appropriate citations to legal authority.  The
decision of the arbitrator(s) will be final and binding on all parties and their
successors and permitted assignees.  The judgment upon the award rendered by the
arbitrator(s) may be entered by any court having jurisdiction thereof.

     (c)   The panel of arbitrator(s) shall be selected no later than 45 days
after the date of the Arbitration Notice.  The arbitration hearing shall
commence no later than three (3) months after the panel of arbitrators is
selected. The arbitrators shall render their decision no later than 30 days
after the close of the hearing, in accordance with the AAA rules.

      (d)  The arbitrators' fees and costs will conform to the then current AAA
fee schedule and will be borne equally by the parties.


                                    - 45 -

<PAGE>
 
    12.14      Governing Law.  This Agreement shall be governed by, and
               -------------                                           
construed and interpreted in accordance with, the substantive laws of the State
of New York without giving effect to any conflict of laws rule or principle that
might require the application of the laws of another jurisdiction.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                    SELLERS:

                                    CARDKEY SYSTEMS, INC.

                                    By:  /s/ Clas Thelin
                                        -----------------------------------
                                    Its: CEO
                                        -----------------------------------

                                    CARDKEY SYSTEMS, LTD.

                                    By:  /s/ Clas Thelin
                                        -----------------------------------
                                    Its: Director
                                        -----------------------------------

                                    CARDKEY SICHERHEITSSYSTEME, GmbH

                                    By:  /s/ Clas Thelin
                                        -----------------------------------
                                    Its: Authorized Signatory
                                        -----------------------------------

                                    PURCHASER:

                                    AMTECH CORPORATION

                                    By:  /s/ G. Russell Mortenson
                                        -----------------------------------
                                    Its: President & CEO
                                        -----------------------------------

                                    SHAREHOLDER:

                                    ASSA ABLOY AB

                                    By:  /s/ Carl-Henric Svanberg
                                        -----------------------------------
                                    Its: President and CEO
                                        -----------------------------------


                                    - 46 -

<PAGE>
 
                                   Exhibit A

                                    "Assets"



                               See Black Binders


                                    - 47 -

<PAGE>
 
                                   Exhibit B

                         "Excluded Assets/Liabilities"


1.   The leasehold and leasehold improvements relating to the real property at
101 W. Cochran Street, Simi Valley, California; provided, however, that Amtech
would be willing for Cardkey management to make its best efforts to continue
acting on Sellers' and Shareholder's behalf to dispose of this lease subject to
the Sublease Agreement; and the leasehold and leasehold improvements relating to
the real property at 21 Stadium Way, Reading, England;

2.   Cash on hand and in banks;

3.   Assets not related to Sellers' access control business, such as Sellers'
ownership of equity securities in Sellers' subsidiaries Arrow Lock Manufacturing
Company, ASSA Inc., VingCard Systems Inc. and Abloy Security, Inc.

4.   Indebtedness for borrowed money owed by the Sellers to others, including
short-term and long-term debt.

5.   Obligations under that certain contract between Cardkey US and ATT,
relating to the provision of telephone services at the Simi Valley, U.S.
location.

See Black Binders.

<PAGE>
 
                                   Exhibit C

                             "Assumed Liabilities"


1.   Accounts payable, accrued expenses (including accrued vacation and sick
leave expense), and unearned revenue, in each case, as of the Closing, which
arose in the ordinary course of business and are reflected on the Audited
Closing Balance Sheet in accordance with GAAP, applied in a manner consistent
with the principles used in preparing the Unaudited Balance Sheet.

2.   Obligations in the ordinary course of business consistent with past
practice under the following agreements, contracts, leases, instruments,
arrangements, and commitments:

          (i) the Distribution and Marketing Agreements;
            
         (ii) the Real Estate Leases;
            
        (iii) the Vehicle Leases;
            
         (iv) the Equipment Leases;
            
          (v) the Project Agreements;
            
         (vi) the ISG Agreements;
            
        (vii) Service and Maintenance Agreements;

       (viii) the Supply Agreements;

         (ix) the Outsourcing Agreements; and

          (x) the Other Agreements.

Purchaser's designee shall also assume any obligations arising under the
foregoing agreements, contracts, leases, instruments, arrangements, and
commitments that result from Purchaser (or its designee) ceasing to conduct any
business operations conducted by Sellers as of the Closing.

3.   Liability for any breach or default by Sellers or Shareholder under any of
agreements, contracts, leases, instruments, arrangements, and commitments listed
in 2 above that arose, occurred or existed prior to or as a result of the
Closing, subject to the Purchaser's rights to indemnification therefore as
provided in Section 9.1(h).
            -------------- 

<PAGE>
 
4.   The undertakings and obligation of Purchaser or its designee to employ the
Sellers' employees as described in Section 7.4 and the obligations described in
                                   -----------                                 
Section 4.17.
------------ 

5.   Warranty claims for work performed by Sellers prior to Closing under the
items described in Schedules 4.14(a)(v) and 4.14(a)(vi) that are being assumed
                   ------------------------------------                       
by Purchaser at Closing, subject to the Purchaser's rights to indemnification
therefore as provided in Section 9.1(b).
                         -------------- 

6.   All other obligations and liabilities arising in the ordinary course of
business relating to Sellers' access control business, subject to the
Purchaser's rights to indemnification therefore as provided in Section 9.1.
                                                               ----------- 

See Black Binders.

<PAGE>
 
                                   Exhibit D



                               See Black Binders

<PAGE>
 
                                   Exhibit E

                                PROMISSORY NOTE
                                ---------------


$ 6,000,000                                                    June __, 1995


          FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay
to the order of Cardkey Systems, Inc. a Delaware corporation ("Cardkey US"),
Cardkey Systems, Ltd., a United Kingdom corporation ("Cardkey UK"), and Cardkey
Sicherheitssysteme GmbH, a German corporation and wholly-owned subsidiary of
Cardkey UK ("Cardkey Germany") or their transferee(s) (collectively, the
"Payees"), at _____________________,  or at such other place as the Payees may
 ------                                                                       
specify in writing, in lawful money of the United States of America, the
principal sum of six million dollars and no cents ($6,000,000.00), subject to
adjustment as provided below.

          This note is being issued in connection with that certain Purchase
Agreement, dated __________, 1995, among Amtech Corporation, a Texas corporation
("Amtech"), Payees, and Assa Abloy AB, a Swedish corporation.

          This note will be non-interest bearing; provided, that, this note will
                                                  --------  ----                
bear interest from and after the occurrence of an Event of Default at the rate
of interest equal to the rate of interest being paid with respect to six month
U.S. Treasury bills, as reported in the Wall Street Journal on the date of such
                                        -------------------                    
Event of Default (the "default interest rate").  The default interest rate shall
be adjusted semi-annually.

          The principal of this note shall be due and payable in two
installments of $3 million each on March 31, 1997 and March 31, 1998; provided,
                                                                      -------- 
that, Maker may at its option, in lieu of the aforesaid 1998 payment, make a
----                                                                        
payment of $2 million on March 31, 1996.

          Payments under this note are secured by that certain Escrow Agreement,
dated of even date herewith, among Maker, Shareholder, and ___________________,
as escrow agent and are guaranteed by that certain Guaranty executed by Amtech
("Guarantor"), dated of even date herewith.

          Maker may prepay the principal of this note in whole or in part at any
time and from time to time without premium or penalty.

          The Payees shall have the right without notice to Maker to declare all
unpaid principal of this note due and payable in full prior to the stated
maturity thereof if any one or more of the

<PAGE>
 
following events of default ("Events of Default") shall have occurred (a) Maker
or Guarantor shall file, or there shall be filed against Maker or Guarantor any
petition for relief under any bankruptcy or other debtor relief laws, (b) Maker
or Guarantor shall admit in writing its inability to pay its debts generally as
they become due, or (c) Maker shall fail to pay any unpaid principal of this
note at the time payment is due as provided for herein.

          Upon the occurrence of any one or more of the Events of Default, in
addition to the right of the Payee specified in the preceding paragraph, the
Payee may exercise any all legal and equitable rights and remedies afforded
under applicable law (including without limitation the right to foreclose
against the collateral securing this note).

          If this note shall be placed in the hands of an attorney for
collection, Maker shall reimburse the Payee for all costs of collection,
including court costs and reasonable attorney's fees.

          Maker and each guarantor, surety, endorser, and other party who may
now or in the future be liable for payment of this note hereby waive
presentment, demand for payment, protest, notice of protest and non-payment,
notice of intent to accelerate payment, notice of default or nonpayment, and all
other notices and demands of every character whatsoever, and agree that their
liability on this note shall not be affected by, and hereby consent to, any
renewal or extension in the time of payment hereof, any indulgences, or any
release or change in any security for the payment of this note.

          This note shall be governed by and construed in accordance with the
internal laws of the State of New York.

          IN WITNESS WHEREOF, Maker has executed this note as of the date first
set forth above.



                                                ______________  CORPORATION


                                                By: ____________________________
 

<PAGE>
 
                                   Exhibit F

                                    GUARANTY
                                    --------

          For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and to induce Cardkey Systems, Inc. a Delaware corporation
("Cardkey US"), Cardkey Systems, Ltd., a United Kingdom corporation ("Cardkey
UK"), Assa Abloy AB, a Swedish corporation, and Cardkey Sicherheitssysteme GmbH,
a German corporation and wholly-owned subsidiary of Cardkey UK ("Cardkey
Germany") (collectively, "Creditors"), to accept a Promissory Note in the
                          ---------                                      
original principal amount of $6,000,000 (herein, together with any renewal,
extension, refunding, or refinancing thereof, called the "Note) issued by
____________________________,a Delaware corporation (the "Company"), payable to
the Creditors, pursuant to a Purchase Agreement, dated as of June ____, 1995
(herein, as modified or amended from time to time, called the "Purchase
Agreement") among the Creditors, the undersigned, Amtech Corporation, a Texas
corporation (the "Guarantor"), and Assa Abloy AB, a Swedish corporation, the
Guarantor hereby unconditionally guarantees to the Creditors and their
successors and assigns that the principal of the Note (hereinafter called the
"Guaranteed Debt") will, be promptly paid in full when due in accordance with
its terms, by acceleration or otherwise, or if renewed or extended, in
accordance with the terms of such renewal or extension.

          The obligations of the Guarantor hereunder shall be unconditional
irrespective of (a) the genuineness, validity, regularity, or enforceability of
any of the Guaranteed Debt, (b) any modification, amendment or variation in or
addition to the terms of any of the Guaranteed Debt or any covenants in respect
thereof or any security therefor, (c) any extension of time for performance or
waiver of performance of any covenant of the Guarantor or any failure or
omission to enforce any right, (d) any taking, exchange, surrender, release, or
other dealing with any collateral therefor, or (e) any other circumstance which
may or might in any manner constitute a legal or equitable discharge of a surety
or guarantor, it being the intent hereof that the obligations of the Guarantor
hereunder shall be absolute and  unconditional under any and all circumstances
and shall not be discharged except by payment as herein provided.

          The Guarantor hereby waives diligence, presentment, demand, protest,
and all notices whatsoever (including notice of acceptance of this guaranty and
of the incurrence of any Guaranteed Debt).

          The Guarantor hereby waives any and all rights of subrogation with
respect to this Guaranty until such time as the Guaranteed Debt has been paid in
full.

<PAGE>
 
          This Guaranty and all rights and obligations arising hereunder shall
be governed by the law of ________ and may not be modified except in writing.

          IN WITNESS WHEREOF, this instrument has been executed by the
undersigned as of June ____, 1995.

                                        AMTECH CORPORATION


                                        By: ___________________________________
 

<PAGE>
 
                                   Exhibit G

                            FORM OF ESCROW AGREEMENT
                            ------------------------

          ESCROW AGREEMENT dated as of __________, 1995, by and among Amtech
Corporation, a Texas corporation, ("Purchaser"), and Assa Abloy AB, a Swedish
Corporation ("Shareholder") (as agent for Cardkey Systems, Inc. a Delaware
corporation, Cardkey Systems, Ltd., a United Kingdom corporation, and Cardkey
Systems GmbH, a German corporation) (Shareholder and such other entities are
collectively referred to as "Sellers"), and ____________ ("Escrow Agent").

                              W I T N E S S E T H:
                              - - - - - - - - - - 

          WHEREAS, Sellers and Purchaser entered into that certain Purchase
Agreement, dated as of June 20, 1995 (the "Purchase Agreement");

          WHEREAS, as contemplated by the Purchase Agreement, upon the closing
of the transactions contemplated by the Purchase Agreement,  Purchaser will
deposit the sum of U.S. $3.0 million in cash or marketable securities that are
issued or guaranteed by the U.S. government (the "Escrowed Funds") in escrow for
the purpose of providing Sellers security for the payments under that certain
Promissory Note, dated of even date hereof (the "Promissory Note") being issued
by a subsidiary of Purchaser to the Sellers in connection with the Purchase
Agreement;

          WHEREAS, the parties hereto desire that Escrow Agent be appointed as
escrow agent to act in accordance with the terms and conditions hereof;

          NOW, THEREFORE, Sellers and Purchaser agree with Escrow Agent as
follows:

                                   ARTICLE I
                                  APPOINTMENT

          1.1  Sellers and Buyer hereby appoint Escrow Agent to act as escrow
agent in accordance with the terms hereof, and Escrow Agent hereby accepts such
appointment.

          1.2  As contemplated by the Purchase Agreement, upon the closing of
the transactions contemplated by the Purchase Agreement,  Purchaser will deposit
the Escrowed Funds in the name of Escrow Agent at a bank or similar financial
institution agreed on by Sellers and Purchaser (the "Bank").  Escrow Agent
hereby agrees to hold and dispose of the Escrowed Funds in accordance with the
provisions of this Agreement.

<PAGE>
 
          1.3  Escrow Agent will hold the Escrowed Funds, in the name of Escrow
Agent, at the Bank.  Neither Purchaser, Sellers, nor Escrow Agent will be
responsible for any losses resulting from investments of the Escrowed Funds or
failure or insolvency of the Bank.  Any interest or other income earned on any
investment of the Escrowed Funds shall be handled by Escrow Agent as provided
for in Section 2.3.
       ----------- 

                                   ARTICLE II
                    RELEASE AND INVESTMENT OF ESCROWED FUNDS

          2.1  Escrow Agent will release the Escrowed Funds from escrow and
deliver the Escrowed Funds as provided in subsections 2.1(a) or (b) below.

           (a)  The provisions of this subsection 2.1(a) shall apply from the
date hereof with respect to payments required to be made under the Promissory
Note on March 31, 1997.   Upon receipt of an Escrow Release Notice in the form
of Attachment A hereto that has purportedly been executed by an authorized
---------------                                                           
officer of Shareholder, Escrow Agent shall promptly deliver to Purchaser a copy
of such notice.  If Purchaser does not advise the Escrow Agent within 5 business
days of its receipt of the Escrow Release Notice that it contests the release of
any of the Escrowed Funds, then Escrow Agent shall release to Shareholder (as
agent for the Sellers) from the Escrowed Funds such amount as may be specified
in the Escrow Release Notice.  If Purchaser advises the Escrow Agent within 5
business days of its receipt of the Escrow Release Notice that it contests the
release of any of the Escrowed Funds, then Escrow Agent shall release to
Shareholder (as agent for the Sellers) from the Escrowed Funds such amount of
the Escrowed Funds that Purchaser does not contest the release of.

           (b)  The provisions of this subsection 2.1(b) shall apply with
respect to payments required to be made under the Promissory Note after April 1,
1997, until the termination of this  Agreement.  Upon receipt of an Escrow
Release Notice in the form of Attachment A hereto that has purportedly been
                              ------------                                 
executed by an authorized officer of Shareholder,  Escrow Agent shall deliver to
Purchaser a copy of such notice.  On the first business day following delivery
of the Escrow Release Notice to Escrow Agent, Escrow Agent unconditionally,
irrevocably and irrespective of any objections from Purchaser, undertakes to
release to Shareholder (as agent for the Sellers) from the Escrowed Funds such
amount as may be specified in the Escrow Release Notice, such amount not to
exceed U.S. $3.0 million.  The Escrow Agent shall promptly inform Purchaser of
the amount of the Escrowed Funds that has been released from the Escrowed Funds.

          2.2  The Escrow Agent agrees to invest and reinvest the Escrowed Funds
at the joint written direction of Purchaser and

<PAGE>
 
Shareholder.  The Escrow Agent may hold such investments in nominee name.  The
Escrow Agent shall not be liable to Purchaser, the Shareholder, or the Sellers
for any claim related to the investment or management of the Escrowed Funds,
provided that the Escrow Agent complies with the joint written directives of
Purchaser and Shareholder.

          2.3  All interest or other income earned with respect to the
investment of the Escrowed Funds by the Escrow Agent during the period of these
escrow arrangements shall accrue and be held by the Escrow Agent for the benefit
of the Purchaser as if they were Escrowed Funds.  All such interest or other
income shall be disbursed pursuant to this Section 2.3.  Purchaser shall be
                                           -----------                     
entitled to have disbursed to it any interest or other income earned with
respect to the investment of the Escrowed Funds.  The Escrow Agent shall
disburse such interest or other income to the Purchaser upon written notice to
the Escrow Agent purportedly executed by an officer of Purchaser that requests
the disbursement of such funds.

          2.4  If Purchaser and Shareholder cannot resolve any dispute relating
to the release from escrow of the Escrowed Funds, then either party may within
10 days following demand by either party for the delivery of the Escrowed Funds
in accordance with this Agreement submit the dispute to be settled by binding
arbitration, in Denver, Colorado in accordance with the International
Arbitration Rules of the American Arbitration Association in effect at the time
of the arbitration, including without limitation the expedited procedures set
forth therein.  Escrow Agent shall deliver the Escrowed Funds as may be
determined in such arbitration.  Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Purchaser and Shareholder each agree to use their respective best efforts to
select the arbitrator(s) to hear the dispute and to complete the briefing of,
and the discovery relating to, the dispute, all within 45 days following demand
by a party for the delivery of the Escrowed Funds.

                                  ARTICLE III
                                 Miscellaneous

          3.1  Purchaser and Shareholder will each be jointly and severally
liable to Escrow Agent for the fees of Escrow Agent and the expenses, if any,
reasonably incurred by Escrow Agent pursuant to this Agreement.  Purchaser and
Shareholder hereby agree, as between themselves, that each will pay one-half of
such fees and expenses incurred by Escrow Agent pursuant to this Agreement.

          3.2  Escrow Agent is authorized to accept this Agreement and to take
any and all actions hereunder as it shall, in its reasonable discretion,
determine to be appropriate to effectuate

<PAGE>
 
this Agreement; Escrow Agent assumes no responsibility or liability to Purchaser
or Shareholder or to any other persons, other than to deal with the Escrowed
Funds held and received by it pursuant to the terms of this Agreement; Escrow
Agent is not responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness, or validity of the subject matter of the escrow, or
any instructions or directions received by Escrow Agent hereunder; and Purchaser
and Shareholder severally agree to indemnify and hold Escrow Agent harmless with
respect to anything reasonably done by it in good faith in any and all matters
covered by this Agreement in accordance with the instructions or directions set
forth herein.

          3.3  Escrow Agent will be protected in acting upon any written notice,
request, waiver, consent, certificate, receipt, authorization, power of
attorney, or other paper or document that Escrow Agent in good faith reasonably
believes to be genuine and reasonably believes to be what it purports to be.

          3.4  This Agreement will be binding upon the parties hereto and their
respective successors and assigns.

          3.5  This Agreement, and the agreements referred to herein, constitute
the entire agreement between the parties hereto with respect to the transactions
contemplated hereby.

          3.6  This agreement will be governed by, and construed and enforced in
accordance with, the internal laws of the State of _________.

          3.7  This Agreement may be amended only by a written agreement
executed by all of the parties hereto.

          3.8  All notices, requests, demands, or other communications with
respect to this Agreement will be in writing, and will be personally delivered
or mailed, postage prepaid, certified or registered mail, or delivered by a
nationally recognized express courier service, charges prepaid, or sent by
facsimile transmission (receipt confirmed) to the following addresses (or such
other addresses as the parties may specify from time to time in accordance with
this Section):

                If to Purchaser:         Amtech Corporation
                                         17304 Preston Road, E-100
                                         Dallas, Texas 752522
                                         Attn:  General Counsel
                                         Fax:  (214) 733-6693

<PAGE>
 
                If to Shareholder:       ASSA ABLOY AB
                                         P.O. Box 70340
                                         S-107 23 Stockholm
                                         Sweden
                                         Attn:  President
                                         Fax:  46-8-698-85-85

                Copies to:               Mannheimer Swartling Advokatbyra AB
                                         P.O. Box 4291
                                         S-203 14 Malmo
                                         Sweden
                                         Attn:  Claes Albinsson
                                         Fax:  46-40-25-08-01

                If to Escrow
                Agent:                   ____________________________
                                         ____________________________ 
                                         ____________________________
                                         ____________________________
                                         ____________________________

Any such notice will, when sent in accordance with the preceding sentence, be
deemed to be given and received on the day personally delivered, twenty-four
hours after shipment by such courier service, or when received by facsimile
transmission (receipt confirmed).

          3.10  Each party executing this Agreement warrants that it has
authority to execute this Agreement.

          3.11  This Agreement may be executed in several counterparts, and it
will not be necessary for each party to execute each of such counterparts, but
when all of the parties have executed and delivered one or more of such
counterparts, the several parts, when taken together, will be deemed to
constitute one and the same instrument, enforceable against each party in
accordance with its terms.

          3.12  This Agreement may be terminated upon the written agreement of
Shareholder and Purchaser at any time and shall terminate upon the earlier of
the payment in full of the Promissory Note or such time as there are no
remaining Escrowed Funds.

<PAGE>
 
          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.


                                    _____________________________________



                                    By: _________________________________
                                        ___________________, President


                                    _____________________________________



                                    By: _________________________________
                                        ___________________, President


                                    AMTECH CORPORATION.



                                    By: _________________________________
                                        ____________________ ,

<PAGE>
 
                       ATTACHMENT A TO ESCROW AGREEMENT
                       --------------------------------
                            Form of Release Notice

Escrow Agent
______________
______________
______________


Dear Escrow Agent:

          Reference is made to that certain Escrow Agreement (herein so called),
dated as of __________, 1995, by and among Amtech Corporation, a Texas
corporation, Assa Abloy AB, a Swedish Corporation, and you, as escrow agent.

          This Release Notice is being delivered in accordance with the
provisions of Section _____ [insert either Section 2.1(a) or Section 2.1(b)].
                                           --------------    --------------  
 
          A payment in the amount of $___________ [insert unpaid amount, which
may not exceed U.S. $3.0 million ](the "Delinquent Payment") that was required
to be paid on ____________ [either March 31, 1997 or March 31, 1998] under the
Promissory Note (as such term is defined in the Escrow Agreement) was not paid.
On behalf of the Sellers (as such term is defined in that certain Purchase
Agreement to which the Escrow Agreement relates), the undersigned hereby
requests that the Delinquent Payment be paid to the undersigned in accordance
with the following payment instructions: ______________ [insert payment
instructions].

                                                     ASSA ABLOY, INC.


                                                     By:
                                                          _____________________

                                                     Its:
                                                          ____________________

NOTE TO ESCROW AGENT:  This Release Notice is to be accompanied by a Swedish
Certificate of Registration certifying that the person signing this Release
Notice is duly authorized to do so.

<PAGE>
 
                                   Exhibit H

                           FORM OF APPOINTMENT LETTER
                           --------------------------

Price Waterhouse is hereby requested to solve the dispute described in Exhibit A
                                                                       ---------
hereto between the parties to the Purchase Agreement dated June __, 1995, all in
accordance with Section 2.3 of the Purchase Agreement.  A copy of the Purchase
                -----------                                                   
Agreement is enclosed hereto.  For this purpose Price Waterhouse shall have full
access to all working papers, records and books relating to the audit and
drawing up of the Unaudited Closing Balance Sheets and the Audited Closing
Balance Sheet (as defined in the Purchase Agreement).


Place:

Date:



_____________________________________ 
Amtech Corporation/ASSA ABLOY AB

<PAGE>
 
                                   Exhibit I

                          ALLOCATION OF PURCHASE PRICE

           Subject to the mutual agreement of Purchaser and Sellers.

<PAGE>
 
                                   Exhibit J

                           FORM OF SUBLEASE AGREEMENT



<PAGE>
 
                                                                     EXHIBIT 2.2
                                 AMENDMENT TO
                 PURCHASE AGREEMENT DATED AS OF JUNE 20, 1995

THIS AMENDMENT is made and entered into as of July 31, 1995 by and among Amtech
Corporation, a Texas corporation, Cardkey Systems, Inc., an Oregon corporation,
Cardkey Systems, Ltd., a United Kingdom corporation, and Cardkey
Sicherheitssysteme GmbH, a German corporation and wholly-owned subsidiary of
Cardkey Systems, Ltd., and Assa Abloy AB, a Swedish corporation.

1.   The parties have as of June 20, 1995, entered into a Purchase Agreement
     (the "Purchase Agreement").

2.   The parties have now agreed to amend the Purchase Agreement as set forth
     below.

     (a) The following wording shall be added to Exhibit B ("Excluded
                                                 ---------           
     Assets/Liabilities") to the Purchase Agreement:
 
          "6.  Assets of Cardkey Sicherheitssysteme GmbH related to the Ving
          Card Business in Germany."
 
     (b) Exhibit I ("Allocation of Purchase Price") to the Purchase Agreement is
         ---------                                                              
     hereby amended in its entirety to read as follows:
 
          "Upon the request of a party, the parties will enter into good faith
          negotiations with a view to agreeing upon an allocation of the
          consideration being paid hereunder among the assets being acquired."
 
     (c) The following Section 6.13 is hereby added to Article VI of the
     Purchase Agreement:
 
          "6.13 Consents.
  After the Closing, Sellers and Shareholder shall use
                --------                                                       
          their best efforts to obtain those consents required to be delivered
          pursuant to Section 3.2(f) but which had not been obtained as of the
                      --------------                                          
          Closing."
 
     (d) The following clause (i) is hereby added to Section 9.1 of the Purchase
     Agreement:
 
          "(i) Sellers and Shareholder shall jointly and severally indemnify and
          hold Purchaser harmless against any and all liabilities, obligations,
          claims, contingencies, damages, costs and expenses (including, without
          limitation increased costs associated with relocation from leased
          premises or replacement of leased vehicles, all court costs and
          reasonable attorneys' fees) that Purchaser or Purchaser's designee may
          incur as a result of the failure of Sellers to obtain any third party
          consent required under Section 3.2(f) of the Purchase Agreement.
          Purchaser's right to indemnification shall be effective
          notwithstanding any waiver of the delivery of consents as a condition
          to Closing pursuant to Section 3.2(f)."

                                       1

<PAGE>
 
     (e)  The following clause (e) is hereby added to Section 9.2 of the
     Purchase Agreement :
 
          "(e) Purchaser shall indemnify and hold Shareholder and the Sellers
          harmless against any and all liabilities, obligations, claims,
          contingencies, damages, costs and expenses that Shareholder or any of
          the Sellers may incur to the participants in, or beneficiaries of, the
          Cardkey UK defined benefit plan as a result of claims by such
          participants or beneficiaries that the failure of Purchaser's designee
          in the U.K. to assume the defined benefit plan was a breach of the
          terms and conditions of their employment with Cardkey U.K.  This
          indemnity shall be void if any of the Sellers or Shareholder directly
          or indirectly has promoted, supported, or assisted in any way with a
          participant's or beneficiary's claim."
 
     (f)  Article XI of the Purchase Agreement is hereby revised as follows:
 
          (i) Add the following sentence to the end of Section 11.2: "For
          purposes of this Article XI, the term 'Purchaser' shall be deemed to
          mean "Purchaser or any of its Affiliates."

          (ii) Reword clause (x) of Section 11.2 to read: "the Shareholder's
          existing mechanical locking and electro-mechanical locking business
          activities,".

3.   To the extent that consents are not obtained from the relevant lessor with
respect to the lease covering the 1992 Lexus SC400 (vehicle number 01-0472-
13540), Seller shall make available the benefit of such lease agreement as
contemplated hereby and Purchaser shall make any payments due under the lease
directly to Sellers.

4.   This Amendment shall be considered an integral part of the Purchase
Agreement and shall be binding upon each party from the date first above
written.  Subject only to the modification referred to in this Amendment, the
Purchase Agreement shall remain in full force and effect and where necessary
shall be read and construed and be enforceable as if the terms of this Amendment
were inserted.

5.   The provisions of Section 12.13 (Arbitration) and Section 12.14 (Governing
Law) of the Purchase Agreement shall apply also to this Amendment.

     IN WITNESS WHEREOF, the parties hereof have executed this Amendment as of
the date first above written.

CARDKEY SYSTEMS, INC.

By:  /s/ Clas Thelin
     ------------------------
     Clas Thelin

Its: President & CEO
     ------------------------

                                       2

<PAGE>
 
CARDKEY SYSTEMS, LTD.

By:  /s/ Clas Thelin
     ------------------------
     Clas Thelin

Its: Director
     ------------------------

CARDKEY SICHERHEITSSYSTEME GmbH

By:  /s/ Clas Thelin
     ------------------------
     Clas Thelin

Its: Authorized Signatory
     ------------------------

AMTECH CORPORATION

By:  /s/ Ronald A. Woessner
     ------------------------
     Ronald A. Woessner

Its: Vice President & General Counsel
     --------------------------------

ASSA ABLOY AB

By:  /s/ Clas Thelin
     ------------------------
     Clas Thelin

Its: Authorized Signatory
     --------------------

                                       3



<PAGE>
 
                                                                     EXHIBIT 2.3


                                PROMISSORY NOTE
                                ---------------


$ 6,000,000                                                       August 1, 1995


          FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay
to the order of Cardkey Systems, Inc., an Oregon corporation ("Cardkey US"), or
its transferee(s) (the "Payee"), c/o Arrow Lock Manufacturing Company, 103-00
                        -----                                                
Foster Avenue, Brooklyn, New York  11236,  or at such other place as the Payee
may specify in writing, in lawful money of the United States of America, the
principal sum of six million dollars and no cents ($6,000,000.00), subject to
adjustment as provided below.

          This note is being issued in connection with that certain Purchase
Agreement, dated June 20, 1995, among Amtech Corporation, a Texas corporation
("Amtech"), Payee, and Cardkey Systems, Ltd., a United Kingdom corporation,
Cardkey Sicherheitssysteme GmbH, a German corporation, and Assa Abloy AB, a
Swedish corporation.

          This note will be non-interest bearing; provided, that, this note will
                                                  --------  ----                
bear interest from and after the occurrence of an Event of Default at the rate
of interest equal to the rate of interest being paid with respect to six month
U.S. Treasury bills, as reported in the Wall Street Journal on the date of such
                                        -------------------                    
Event of Default (the "default interest rate").  The default interest rate shall
be adjusted semi-annually.


          The principal of this note shall be due and payable in two
installments of $3.0 million, one of which is payable on March 31, 1997, and one
of which is payable on March 31, 1998; provided, that, Maker may at its option,
                                       --------  ----                          
in lieu and in complete satisfaction of the aforesaid 1998 payment, make a
payment of $2.0 million on March 31, 1996.

          Payments under this note are secured by that certain Escrow Agreement
(the "Escrow Agreement"), dated on or about the date hereof, among Maker,
Shareholder, and Bank One, Texas, N.A., as escrow agent and are guaranteed by
that certain Guaranty executed by Amtech ("Guarantor"), dated on or about the
date hereof.

          Maker may prepay the principal of this note in whole or in part at any
time and from time to time without premium or penalty.

          The Payees shall have the right without notice to Maker to declare all
unpaid principal of this note due and payable in full prior to the stated
maturity thereof if any one or more of the following events of default ("Events
of Default") shall have  occurred (a) Maker or Guarantor shall file, or there
shall be filed

          

<PAGE>
 
Promissory Note
August 1, 1995


against Maker or Guarantor any petition for relief under any bankruptcy or other
debtor relief laws, (b) either Maker or Guarantor shall admit in writing its
inability to pay its debts generally as they become due, or (c) Maker shall fail
to pay any unpaid principal of this note at the time payment is due as provided
for herein.

          Upon the occurrence of any one or more of the Events of Default, in
addition to the rights of the Payee specified in the preceding paragraph, the
Payee may exercise any all legal and equitable rights and remedies afforded
under applicable law (including without limitation the right to exercise its
remedies under the Escrow Agreement).

          If this note shall be placed in the hands of an attorney for
collection, Maker shall reimburse the Payee for all costs of collection,
including court costs and reasonable attorney's fees.

          Maker and each guarantor, surety, endorser, and other party who may
now or in the future be liable for payment of this note hereby waive
presentment, demand for payment, protest, notice of protest and non-payment,
notice of intent to accelerate payment, notice of default or nonpayment, and all
other notices and demands of every character whatsoever, and agree that their
liability on this note shall not be affected by, and hereby consent to, any
renewal or extension in the time of payment hereof, any indulgences, or any
release or change in any security for the payment of this note.

          This note shall be governed by and construed in accordance with the 
internal laws of the State of New York.

          IN WITNESS WHEREOF, Maker has executed this note as of the date first
set forth above.



                                        VIKING ACQUISITION COMPANY
                                        (to be renamed "CARDKEY SYSTEMS, INC.")



                                        By:/s/ Ronald A.Woessner
                                           -------------------------------------
                                           Ronald A. Woessner,
                                           President


                                       2



<PAGE>
 
                                                                     EXHIBIT 2.4



                                    GUARANTY
                                    --------

                                                                  August 1, 1995

     For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and to induce Cardkey Systems, Inc. an Oregon corporation
                                                                       
("Creditor"), to accept a Promissory Note in the original principal amount of
----------                                                                   
$6,000,000 (herein, together with any renewal, extension, refunding, or
refinancing thereof, called the "Note ) issued by Viking Acquisition Company, a
Delaware corporation, which will be renamed "Cardkey Systems, Inc." (the
"Company"), payable to the Creditor, pursuant to a Purchase Agreement, dated as
of June 20, 1995 (herein, as modified or amended from time to time, called the
"Purchase Agreement") among the Creditor, the undersigned Amtech Corporation, a
Texas corporation (the "Guarantor"), Cardkey Systems, Ltd., a United Kingdom
corporation, Cardkey Sicherheitssysteme GmbH, a German corporation, and Assa
Abloy AB, a Swedish corporation, the Guarantor hereby unconditionally guarantees
to the Creditor and its successors and assigns that the principal of the Note
(hereinafter called the "Guaranteed Debt") will, be promptly paid in full when
due in accordance with its terms, by acceleration or otherwise, or if renewed or
extended, in accordance with the terms of such
 renewal or extension.

     The obligations of the Guarantor hereunder shall be unconditional
irrespective of (a) the genuineness, validity, regularity, or enforceability of
any of the Guaranteed Debt, (b) any modification, amendment or variation in or
addition to the terms of any of the Guaranteed Debt or any covenants in respect
thereof or any security therefor, (c) any extension of time for performance or
waiver of performance of any covenant of the Guarantor or any failure or
omission to enforce any right, (d) any taking, exchange, surrender, release, or
other dealing with any collateral therefor, or (e) any other circumstance which
may or might in any manner constitute a legal or equitable discharge of a surety
or guarantor, it being the intent hereof that the obligations of the Guarantor
hereunder shall be absolute and  unconditional under any and all circumstances
and shall not be discharged except by payment as herein provided.

     The Guarantor hereby waives diligence, presentment, demand, protest, and
all notices whatsoever (including notice of acceptance of this Guaranty and of
the incurrence of any Guaranteed Debt).

     The Guarantor hereby waives any and all rights of subrogation with respect
to this Guaranty until such time as the Guaranteed Debt has been paid in full.

<PAGE>
 
Guaranty
August 1, 1995


     This Guaranty and all rights and obligations arising hereunder shall be
governed by the law of New York and may not be modified except in writing.

     IN WITNESS WHEREOF, this instrument has been executed by the undersigned as
of the date first set forth above.

                                          AMTECH CORPORATION


                                          By: /s/ Ronald A. Woessner
                                              -------------------------------
                                              Ronald A. Woessner,
                                              Vice President & General Counsel




                                       2



<PAGE>
 
                                                                    EXHIBIT 23.1


The Board of Directors
Cardkey Systems Limited



We consent to the incorporation by reference in the registration statements 
(No 33-34451) relating to the 1988 Stock Option Plan, 1989 Stock Option Plan,
1990 Stock Option Plan, and the Original Stock Option Plan of Amtech Corporation
and (No 33-53010) relating to the 1992 Stock Option Plan both on Form S-8 of
Amtech Corporation of our UK statutory audit reports dated May 25, 1995 and
March 25, 1994 with respect to the consolidated balance sheets of Cardkey
Systems Limited and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated profit and loss account, and cash flow statement for the
year ended December 31, 1994 and the 10 month period ended December 31, 1993,
which reports appear in the Form 10-Q of Amtech Corporation dated August 10,
1995.



                                                            KPMG
                                                            Reading, England
                                                            August 10, 1995





<PAGE>

                                                                    Exhibit 23.2
 
                        CONSENT OF INDEPENDENT AUDITORS



We consent to the inclusion by reference in the Registration Statement (Form S-8
No. 33-34451) pertaining to the 1988 Stock Option Plan, 1989 Stock Option Plan,
1990 Stock Option Plan, and the Original Stock Plan of Amtech Corporation, and
in the Registration Statement (Form S-8 No. 33-53010) pertaining to the Amtech
Corporation 1992 Stock Option Plan of our report dated January 27, 1995, with
respect to the financial statements of Cardkey Systems, Inc. in this Quarterly
Report (Form 10-Q) of Amtech Corporation dated August 10, 1995.



                                    Crowe, Chizek and Company

Oak Brook, Illinois
August 9, 1995





<TABLE> <S> <C>


<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1,000
       
<S>                                         <C>
<PERIOD-TYPE>                                     3-MOS
<FISCAL-YEAR-END>                           DEC-31-1995
<PERIOD-START>                              APR-01-1995
<PERIOD-END>                                JUN-30-1995
<CASH>                                           32,859
<SECURITIES>                                      9,557
<RECEIVABLES>                                    10,866
<ALLOWANCES>                                        261
<INVENTORY>                                       8,066
<CURRENT-ASSETS>                                 62,582
<PP&E>                                           18,250
<DEPRECIATION>                                    8,183
<TOTAL-ASSETS>                                   81,083
<CURRENT-LIABILITIES>                             5,118
<BONDS>                                               0
<COMMON>                                            147
<PREFERRED-MANDATORY>                                 0
<PREFERRED>                                           0
<OTHER-SE>                                       74,489
<TOTAL-LIABILITY-AND-EQUITY>                     81,083
<SALES>                                           8,315
<TOTAL-REVENUES>                                 13,001
<CGS>                                             3,974
<TOTAL-COSTS>                                     8,434
<OTHER-EXPENSES>                                      0
<LOSS-PROVISION>                                     10
<INTEREST-EXPENSE>                                    0
<INCOME-PRETAX>                                 (1,411)
<INCOME-TAX>                                      (154)
<INCOME-CONTINUING>                             (1,257)
<DISCONTINUED>                                        0
<EXTRAORDINARY>                                       0
<CHANGES>                                             0
<NET-INCOME>                                    (1,257)
<EPS-PRIMARY>                                    (0.09)
<EPS-DILUTED>                                    (0.09)
        


</TABLE>






<PAGE>
 
                                                                    EXHIBIT 99.1

                             CARDKEY SYSTEMS, INC.
                            Simi Valley, California

                             FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                            Simi Valley, California

                             FINANCIAL STATEMENTS
                          December 31, 1994 and 1993



                                   CONTENTS


<TABLE> 

<S>                                                                       <C>
REPORT OF INDEPENDENT AUDITORS..........................................  1
                                                                       
                                                                       
FINANCIAL STATEMENTS                                                   
                                                                       
  BALANCE SHEETS........................................................  2-3
                                                                       
  STATEMENTS OF OPERATIONS..............................................  4
                                                                       
  STATEMENTS OF SHAREHOLDERS' EQUITY....................................  5
                                                                       
  STATEMENTS OF CASH FLOWS..............................................  6
                                                                       
  NOTES TO FINANCIAL STATEMENTS.........................................  7
</TABLE>


<PAGE>
 
                      [LOGO OF CROWE CHIZEK APPEARS HERE]


                        REPORT OF INDEPENDENT AUDITORS


Board of Directors
Cardkey Systems, Inc.
Simi Valley, California

We have audited the accompanying balance sheets of Cardkey Systems, Inc. as of
December 31, 1994 and 1993, and the related statements of operations,
shareholders' equity and cash flows for the year ended December 31, 1994, the
ten months ended December 31, 1993 and the year ended February 28, 1993.  These
financial statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance
 about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements were prepared to present the financial
position, results of operations and cash flows of Cardkey Systems, Inc. as
indicated in the purchase agreement described in Note 1, and are not intended to
be a complete presentation of the Company's assets, liabilities, results of
operations and cash flows.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cardkey Systems, Inc. as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for the year ended December 31, 1994, the ten months ended December 31, 1993,
and the year ended February 28, 1993, based on the operations of Cardkey
Systems, Inc. being sold as indicated in the purchase agreement referred to in
Note 1, in conformity with generally accepted accounting principles.


                                        /s/ CROWE, CHIZEK AND COMPANY

                                        Crowe, Chizek and Company

Oak Brook, Illinois
January 27, 1995


                                                                              1.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                                BALANCE SHEETS
                          December 31, 1994 and 1993

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


<TABLE>
<CAPTION>
                                                     1994          1993
                                                     ----          ----    
<S>                                               <C>          <C>
ASSETS                                           
Current assets                                   
  Cash and cash equivalents                       $   157,787  $    50,313
  Accounts receivable, net (Note 3)                12,662,375   15,061,340
  Accounts receivable - affiliates                  1,569,191      896,311
  Costs and estimated earnings in excess of      
   billings on uncompleted contracts (Note 4)       1,127,000    1,304,000
  Inventories (Note 5)                              3,941,868    5,244,370
  Prepaid expenses                                    175,513      320,833
                                                  -----------  -----------
    Total current assets                           19,633,734   22,877,167



Leasehold improvements and equipment             
  Leasehold improvements                            1,118,733    1,098,733
  Machinery and equipment                           5,157,154    3,873,548
  Vehicles                                             25,780       25,780
  Furniture and fixtures                            2,394,269    2,174,713
  Construction in progress                            388,049      296,392
                                                  -----------  -----------
                                                    9,083,985    7,469,166
  Accumulated depreciation                          5,422,110    4,104,610
                                                  -----------  -----------
                                                    3,661,875    3,364,556


Intangible assets, net (Note 7)                     3,586,527    5,812,145
Other assets                                           83,911       93,223
                                                  -----------  -----------



                                                  $26,966,047  $32,147,091
                                                  ===========  =========== 
</TABLE>
 

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

                See accompanying notes to financial statements.

                                                                              2.

<PAGE>

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


<TABLE>
<CAPTION>
                                                             1994         1993
                                                             ----         ----    
<S>                                                       <C>          <C>
LIABILITIES AND SHAREHOLDERS' EQUITY                     
Current liabilities                                      
  Current maturities of capitalized lease                
   obligations (Note 8)                                   $    52,834  $   152,787
  Current maturities of notes due affiliates (Note 9)      14,932,000    7,632,000
  Loan due affiliates (Note 2)                                      -      465,303
  Accounts payable - trade                                  4,096,559    3,906,574
  Accounts payable - affiliates                               272,217      232,622
  Billings in excess of costs and estimated              
   earnings on uncompleted contracts (Note 4)               2,263,000    1,084,000
  Accrued liabilities (Note 7)                              3,229,509    2,914,538
                                                          -----------  -----------
    Total current liabilities                              24,846,119   16,387,824
                                                        
Capitalized lease obligations, less current              
 maturities (Note 8)                                                -       52,834
                                                        
                                                        
Notes due to affiliates, less current                    

 maturities (Note 9)                                        3,564,000    6,396,000
 
 
Shareholders' equity
  Common stock - $.01 par value; 1,000,000 shares  
   authorized, 1,000 shares issued and outstanding                 10           10
  Additional paid-in capital                               21,039,990   21,039,990
  Accumulated deficit                                     (22,484,072) (11,729,567)
                                                          -----------  -----------
                                                           (1,444,072)   9,310,433
                                                          -----------  ----------- 
                                                  
                                                          $26,966,047  $32,147,091
                                                          ===========  =========== 
</TABLE>
 

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

                See accompanying notes to financial statements.

                                                                              3.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                           STATEMENTS OF OPERATIONS
          For the year ended December 31, 1994, the ten months ended
            December 31, 1993 and the year ended February 28, 1993

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


<TABLE>
<CAPTION>
                                                       Ten months               
                                                         ended
                                        December 31,  December 31,  February 28,
                                            1994         1993          1993    
                                            ----         ----          ---- 
<S>                                     <C>           <C>           <C>
 
Net sales                               $53,122,199   $53,860,781   $47,739,560
                                                                               
Cost of goods sold                       40,110,388    38,494,833    32,196,854
                                       ------------   -----------   ----------- 
 

Gross profit                             13,011,811    15,365,948    15,542,706

Selling and administrative expenses      20,452,717    13,000,009    14,425,077
                                       ------------   -----------   ----------- 


Income (loss) from operations            (7,440,906)    2,365,939     1,117,629
 
Other income (expense)
 Interest expense                          (905,675)     (657,993)   (1,171,026)
 Amortization of intangible assets       (2,225,619)   (2,263,171)   (2,715,805)
 Miscellaneous                             (182,305)     (288,782)       44,441
 Loss on sale of subsidiary (Note 14)             -             -      (986,983)
                                       ------------   -----------   ----------- 
                                         (3,313,599)   (3,209,946)   (4,829,373)
                                       ------------   -----------   ----------- 
 

Net loss                               $(10,754,505)  $  (844,007)  $(3,711,744)
                                       ============   ===========   =========== 


Net loss per share                     $ (10,754.51)  $   (844.00)  $ (3,711.74)
                                       ============   ===========   =========== 
</TABLE>
 

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

                See accompanying notes to financial statements.

                                                                              4.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                      STATEMENTS OF SHAREHOLDERS' EQUITY
          For the year ended December 31, 1994, the ten months ended
            December 31, 1993 and the year ended February 28, 1993

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


<TABLE>
<CAPTION>
                                                                       Foreign
                                                         Additional    Currency
                                -----Common Stock-----    Paid-in    Translation   Accumulated
                                     ------------
                                   Shares      Amount     Capital     Adjustment     Deficit         Total
                                   ------      ------     -------     ----------     -------         -----    
<S>                                <C>        <C>       <C>          <C>           <C>            <C>
 
Balance March 1, 1992                  1,000  $     10  $21,039,990  $   315,590   $(7,173,816)   $14,181,774
                                      
Foreign currency translation          
  adjustment                               -         -            -     (315,590)            -       (315,590)
                                      
Net loss                                   -         -            -            -    (3,711,744)    (3,711,744)
                                ------------  --------  -----------  -----------  ------------   ------------   
                                      
Balance February 28, 1993              1,000        10   21,039,990            -   (10,885,560)    10,154,440
                                      
Net loss                                   -         -            -            -      (844,007)      (844,007)
                                ------------  --------  -----------  -----------  ------------   ------------   
                                      
Balance December 31, 1993              1,000        10   21,039,990            -   (11,729,567)     9,310,433
                                      
Net loss                                   -         -            -            -   (10,754,505)   (10,754,505)
                                ------------  --------  -----------  -----------  ------------   ------------   
                                      
Balance December 31, 1994              1,000  $     10  $21,039,990  $         -  $(22,484,072)  $ (1,444,072)
                                ============  ========  ===========  ===========  ============   ============  
</TABLE>
 

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

                See accompanying notes to financial statements.

                                                                              5.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                            STATEMENT OF CASH FLOWS
         For the year ended December 31, 1994 and the ten months ended
            December 31, 1993, and the year ended February 28, 1993

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


<TABLE>
<CAPTION>
                                                                            Ten months                   
                                                                               ended                    
                                                            December 31,   December 31,   February 28,  
                                                                1994           1993           1993      
                                                                ----           ----           ----      
<S>                                                         <C>            <C>            <C>           
CASH FLOWS FROM OPERATING ACTIVITIES                                                                                             
 Net loss                                                   $(10,754,505)   $  (844,007)   $(3,711,744) 
 Adjustments to reconcile net loss to net cash
  provided by operating activities
   Depreciation and amortization                               3,543,119      3,233,769      4,031,631  
   Provision for allowance for doubtful accounts                 670,506         90,115        328,933  
   Loss on sale of subsidiary                                          -              -        986,983  
   Change in operating assets and liabilities, net
    of effects from the sale of subsidiary for                                                                                     
    the year ended February 28, 1993
     Accounts receivable                                       1,728,459     (4,342,617)     2,656,494  
     Due from affiliates                                        (672,880)     2,040,964     (2,486,156) 
     Cost and estimated earnings in excess of
      billings on uncompleted contracts                          177,000       (867,000)      (437,000) 
     Inventories                                               1,302,502       (470,233)         5,892  
     Prepaid expenses                                            145,320         97,821        428,184  
     Other assets                                                  9,312        (39,983)        64,424  
     Accounts payable                                            189,984         69,632      3,413,444  
     Due to affiliates                                            39,586         67,310     (1,907,249) 
     Billings in excess of cost and estimated
      earnings on uncompleted contracts                        1,179,000        859,000        225,000  
     Accrued liabilities                                         314,980       (376,464)      (240,276) 
                                                            ------------    -----------    -----------  
       Net cash (used in) provided by                                                                                     
        operating activities                                  (2,127,617)      (481,693)     3,358,560  
                                                                                                        
CASH FLOWS FROM INVESTING ACTIVITIES                                                                                             
 Capital expenditures                                         (1,614,820)      (954,442)    (1,004,417) 
 Sale of subsidiary, net of cash sold                                  -              -       (925,286) 
                                                            ------------    -----------    -----------  
   Net cash used in investing activities                      (1,614,820)      (954,442)    (1,929,703) 

CASH FLOWS FROM FINANCING ACTIVITIES                                                                                             
 Proceeds from loan due affiliates                                     -        465,303              -  
 Net proceeds from notes to affiliates                         4,468,000        576,000              -  
 Payments on capitalized lease obligations                      (152,786)      (188,639)      (213,383) 
 Payments on loans due affiliates                               (465,303)             -     (2,908,133) 
                                                            ------------    -----------    -----------  
   Net cash provided by (used in)                                                                       
    financing activities                                       3,849,911        852,664     (3,121,516) 
                                                            ------------    -----------    -----------  
                                                                                                        
Effect of exchange rate changes on cash                                -              -          9,679  

Net change in cash and cash equivalents                          107,474       (583,471)    (1,682,980) 

Cash and cash equivalents at beginning of period                  50,313        633,784      2,316,764  
                                                            ------------    -----------    -----------  

CASH AND CASH EQUIVALENTS AT END OF PERIOD                  $    157,787    $    50,313    $   633,784  
                                                            ============    ===========    ===========   
</TABLE>


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

                See accompanying notes to financial statements.

                                                                              6.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:  These financial statements have been prepared pursuant
---------------------                                                         
to the purchase agreement dated June 20, 1995 between the Company and Amtech
Corporation and are not intended to be a complete presentation of the Company's
assets, liabilities, results of operations, and cash flows.  These financial
statements have been prepared by Cardkey Systems, Inc. in accordance with
generally accepted accounting principles with only such deviations as follows:
the Company's wholly-owned subsidiaries, VingCard Systems, Inc., Abloy Security,
Inc., and Securitas Lock Group, Inc., have not been consolidated, and its equity
in income of wholly-owned subsidiaries has been excluded from the statement of
operations because these operations are not being sold.

Nature of Business:  The Company is engaged in the manufacture, sale, and
------------------                                                       
installation of high security access systems.  The Company sells its products
throughout North America and Australia.

Revenue Recognition:  Revenue from sales of hardware and software is recognized
-------------------                                                            
when the product is shipped.  Revenue from long-term installation contracts is
recognized on the percentage of completion method, measured by the percentage of
cost incurred to date to estimated total costs for each contract.

Inventories:  Inventories are stated at the lower of cost or market on a first-
-----------                                                                   
in, first-out method.  The cost of work in process and finished goods
inventories include material, direct labor and factory overhead.

Leasehold Improvements and Equipment:  Leasehold improvements and equipment are
------------------------------------                                           
carried at cost.  Depreciation is computed using the straight-line method over
the shorter of the estimated useful life of the asset or the term of the lease.
When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and any resulting gain
or loss is recognized in income for the period.  The cost of maintenance and
repairs is charged to income as incurred; significant renewals and betterments
are capitalized.

Intangible Assets:  Intangible assets include capitalized software, firmware,
-----------------                                                            
engineering drawings, product documentation, patents, licenses, maintenance
agreements, new products, and goodwill.

Deferred Maintenance Revenues:  The Company engages in field service maintenance
-----------------------------                                                   
contracts with certain customers.  The contracts generally provide sufficient
revenues to offset the cost of both direct repair work and maintenance work
performed by the Company.  When such revenues are billed prior to providing
services, they are deferred and recognized over the term of the related
contract.

Warranties:  The Company's products are generally under warranty against defects
----------                                                                      
in material and workmanship for a period of one year.  The Company has
established an accrual for these anticipated future warranty costs based upon
estimates derived from experience factors.

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

                                  (Continued)

                                                                              7.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes:  The provision for income taxes includes federal and state taxes
------------                                                                  
currently payable and deferred taxes arising from temporary differences between
the financial statement and tax bases of assets and liabilities using currently
enacted rates.

Cash and Cash Equivalents:  For purposes of the statement of cash flows, the
-------------------------                                                   
Company considers all highly liquid debt instruments, purchased with a maturity
of three months or less, to be cash equivalents.


NOTE 2 - RELATED PARTY TRANSACTIONS

The Company is a subsidiary of ASSA ABLOY located in Stockholm, Sweden.  Other
members of the Group include Oy Abloy Security, Ltd., a Finnish corporation
engaged in manufacturing and distributing high security mortise locks, and Trio
Ving a.s., a Norwegian corporation engaged in manufacturing and distributing
locks and security systems principally for the hotel industry.

The Company is dependent upon the financial support of its parent and the ASSA
ABLOY worldwide organization for operating and capital needs.  As of December
31, 1994, ASSA ABLOY guaranteed approximately $42,000,000 of performance bonds
on various contracts.  Metra Financial Services, Inc., an affiliated company,
provided a line of credit of $1,000,000 to the Company for working capital
needs.  The line of credit was unsecured and bore interest at the LIBOR rate
plus 1.75%.  The amount due under the line was $465,303 at December 31, 1993.
The line of credit expired in 1994.

In addition, sales to Trio Ving a.s. and other affiliated companies aggregated
approximately $2,560,000, $1,463,000 and $884,000 during the year ended December
31, 1994, the ten months ended December 31, 1993 and the year ended February 28,
1993, respectively.


NOTE 3 - ACCOUNTS RECEIVABLE

Accounts receivable is comprised of the following at December 31, 1994 and 1993:


<TABLE>
<CAPTION>
                                             1994         1993
                                             ----         ----    
<S>                                       <C>          <C>
 
Accounts receivable - trade               $10,762,165  $13,276,467
Unbilled contract receivables               2,378,037    2,156,700
                                          -----------  -----------
                                           13,140,202   15,433,167
Less:  Allowance for doubtful accounts        477,827      371,827
                                          -----------  -----------
 
                                          $12,662,375  $15,061,340
                                          ===========  ===========
</TABLE>


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

                                  (Continued)

                                                                              8.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 3 - ACCOUNTS RECEIVABLE (Continued)

In the normal course of the Company's business, situations develop which require
revisions to contract specifications for additional costs to be incurred and, as
a result, renegotiation of the contract price.  Negotiations and final pricing
of these contract modifications may result in gains or losses in future years
when final agreement is reached.  The ultimate outcome of these contract price
modifications is recorded when determined.

Included in accounts receivable are amounts representing balances billed, but
not paid, by customers under retainage provisions in contracts.  Total
retentions as of December 31, 1994 and 1993 approximated $2,580,000 and
$1,457,000, respectively.


NOTE 4 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

Costs and estimated earnings on uncompleted contracts are comprised of the
following at December 31, 1994 and 1993:


<TABLE>
<CAPTION>
 
                                                        1994           1993
                                                        ----           ----
  <S>                                               <C>            <C>
 
  Costs incurred on uncompleted contracts           $ 35,337,000   $ 28,480,000
  Estimated earnings                                   7,798,000      6,520,000
                                                    ------------   ------------
                                                      43,135,000     35,000,000
  Less billings to date                              (44,271,000)   (34,780,000)
                                                    ------------   ------------
 
                                                    $ (1,136,000)  $    220,000
                                                    ============   ============
 
                                                        1994           1993
                                                        ----           ----
  Included in the accompanying balance sheet under
   the following captions
    Costs and estimated earnings in excess of
     billings on uncompleted contracts              $  1,127,000   $  1,304,000
 
    Billings in excess of costs and estimated
     earnings on uncompleted contracts                (2,263,000)    (1,084,000)
                                                    ------------   ------------
 
                                                    $ (1,136,000)  $    220,000
                                                    ============   ============
</TABLE>


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

                                  (Continued)

                                                                              9.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 5 - INVENTORIES

The major components of inventories at December 31, 1994 and 1993 are summarized
as follows:


<TABLE>
<CAPTION>
 
                                       1994        1993
                                       ----        ----
  <S>                               <C>          <C>
 
  Raw materials                     $1,614,106   $2,026,720
  Work in process                      672,267      831,018
  Finished goods                     2,255,495    2,986,632
                                    ----------   ----------
                                     4,541,868    5,844,370
  Less reserves for obsolescence       600,000      600,000
                                    ----------   ----------
 
                                    $3,941,868   $5,244,370
                                    ==========   ==========
</TABLE>


NOTE 6 - INTANGIBLE ASSETS

A detailed summary of intangible assets at December 31, 1994 and 1993 is as
follows:


<TABLE>
<CAPTION>
          Category               1994         1993      Asset Life
          --------               ----         ----      ----------
  <S>                         <C>          <C>          <C>
 
  Goodwill                    $ 2,208,583  $ 2,208,583    10 years
  Software                      6,719,000    6,719,000     5 years
  Engineering drawings          4,711,000    4,711,000    10 years
  License                       2,039,000    2,039,000     5 years
  Other intangibles             1,859,735    1,859,735   1-5 years
                              -----------  -----------
                               17,537,318   17,537,318
  Accumulated amortization     13,950,791   11,725,173
                              -----------  -----------
 
                              $ 3,586,527  $ 5,812,145
                              ===========  ===========
</TABLE>


NOTE 7 - ACCRUED LIABILITIES

At December 31, 1994 and 1993, accrued liabilities consisted of the following:


<TABLE>
<CAPTION>
                                                1994        1993
                                                ----        ----   
  <S>                                        <C>         <C>
 
  Salaries, wages and commissions payable    $  885,316  $  790,390
  Vacation pay                                  241,098     331,721
  Product warranties                            405,942     405,942
  Interest                                      140,965     126,146
  Deferred maintenance revenue                1,120,750     983,382
  Other                                         435,438     276,957
                                             ----------  ----------
 
                                             $3,229,509  $2,914,538
                                             ==========  ==========
</TABLE>


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

                                  (Continued)

                                                                             10.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 8 - CAPITAL LEASES

The Company is the lessee of certain assets under capital leases expiring in
various years through 1996.  These assets are included in the leasehold
improvements and equipment captions in the balance sheet at December 31, 1994
and 1993 as follows:


<TABLE>
<CAPTION>
                                                         1994          1993
                                                         ----          ----    
  <S>                                                <C>           <C>
 
  Leasehold improvements                             $         -   $   221,079
  Computer equipment                                           -       317,471
  Furniture and fixtures                                 635,713       635,713
                                                     -----------   -----------
                                                         635,713     1,174,263
  Accumulated depreciation                              (497,974)     (708,320)
                                                     -----------   -----------
 
                                                     $   137,739   $   465,943
                                                     ===========   ===========
</TABLE>
 
 
Future minimum payments under capital lease agreements are $55,283 which
includes interest of $2,449.
 
 
NOTE 9 - NOTES DUE TO AFFILIATE
 

<TABLE> 
<CAPTION> 
                                                         1994          1993
                                                         ----          ----    
   <S>                                               <C>           <C>

   Note due to ASSA ABLOY bears interest at 6.00%,
   payable in quarterly installments of $708,000
   and matures in 1997.                              $ 6,396,000   $ 9,228,000
 
   Note due to ASSA ABLOY bears interest at 6.95%,
   payable in full February 28, 1995.                 12,100,000     4,800,000
                                                     -----------   -----------
                                                      18,496,000    14,028,000
   Less current maturities                            14,932,000     7,632,000
                                                     -----------   -----------
 
                                                     $ 3,564,000   $ 6,396,000
                                                     ===========   ===========
</TABLE>
 
 
Debt payments for years subsequent to December 31, 1994 are as follows:


<TABLE> 
             <S>                                     <C> 
             1995                                    $14,932,000
             1996                                      2,832,000
             1997                                        732,000
                                                     -----------
 
                                                     $18,496,000
                                                     ===========
</TABLE>


The Company owed ASSA ABLOY $140,965 and $126,146 for interest as of December
31, 1994 and 1993, respectively.

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

                                  (Continued)

                                                                             11.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 10 - INCOME TAXES

Effective March 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes".  The adoption of
SFAS 109 changed the Company's method of accounting for income taxes from the
deferred method (APB Opinion No. 11) to an asset and liability approach.  This
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the carrying
amounts and the tax bases of asset and liabilities, and allows the recognition
of a deferred tax asset for the benefit of loss carryforwards.

The effect of adoption of SFAS 109 as of March 1, 1993, had no cumulative effect
on the 1993 financial statements.

Income tax expense is summarized as follows:


<TABLE>
<CAPTION>
                                                    Ten months
                                                      ended
                                    December 31,   December 31,   February 28,
                                        1994           1993           1993
                                        ----           ----           ----     
 <S>                                <C>            <C>            <C>
 
 Change in valuation allowance       $ 1,102,000    $   232,000    $         -
 Deferred                                 39,000       (232,000)             -
 Benefit of tax loss carryforward     (1,141,000)             -              -
                                     -----------    -----------   ------------
 
                                     $         -    $         -    $
                                     ===========    ===========   ============
</TABLE>
 
 
The components of deferred taxes as of December 31, 1994 and 1993 are as
follows:
 

<TABLE> 
<CAPTION> 
                                                        1994           1993
                                                        ----           ----   
 <S>                                                <C>           <C>  
 Deferred tax liabilities
  Depreciation                                      $    32,000    $         -
                                                    -----------   ------------
                                                         32,000              -
 
 Deferred tax assets
  Accounts receivable allowance                         182,000        141,000
  Inventory                                              14,000         14,000
  Accrued vacation                                       92,000        126,000
  Depreciation                                                -         20,000
  Accrued interest                                       54,000         48,000
  Loss on sale of subsidiary                            375,000        375,000
  Other                                                  60,000         60,000
  Tax loss carryforwards                              1,640,000        499,000
                                                    -----------   ------------
                                                      2,417,000      1,283,000
  Valuation allowance                                (2,385,000)    (1,283,000)
                                                    -----------   ------------
                                                         32,000              -
                                                    -----------   ------------
 
                                                    $         -   $          -
                                                    ===========   ============
</TABLE>


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

                                  (Continued)

                                                                             12.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 10 - INCOME TAXES  (Continued)

The valuation allowance at December 31, 1994 reflects management's estimate of
temporary deductible differences that may expire prior to their utilization.
Income tax expense differs from expense at statutory rates for the year ended
December 31, 1994 and the ten months ended December 31, 1993 primarily due to
the change in the valuation allowance.  For the year ended February 28, 1993,
the Company accounted for income taxes in accordance with APB 11.

At December 31, 1994, the Company had tax loss carryforwards of $4,316,000 which
are available to reduce future taxable income.

The approximate expirations of the net operating loss carryforward are as
follows:


<TABLE>
<CAPTION>
 
                                                               Net    
                                                            Operating 
                                                               Loss   
                                                            ----------
          <S>                                               <C>       
                                                                      
          2004                                              $1,314,000
          2008                                                 290,000
          2009                                               2,712,000
                                                            ----------
                                                                      
                                                            $4,316,000
                                                            ========== 
</TABLE>


Since Cardkey Systems, Inc. was a member of a consolidated group, some of its
losses were offset each year by other group members' taxable income.  Beginning
January 1, 1995, Cardkey Systems, Inc. will file its own consolidated tax
return.  The net operating losses above represent only the losses that will be
available to the Company in future years.


NOTE 11 - OPERATING LEASES

The Company leases manufacturing and office facilities at various locations, as
well as equipment, under noncancelable operating leases.  These leases provide
for minimum rental payments plus additional amounts for real estate taxes,
maintenance and insurance.  Rent expense for the year ended December 31, 1994,
the ten months ended December 31, 1993 and the year ended February 28, 1993 was
approximately $1,547,000, $1,213,000 and $1,447,000, respectively.  Future
minimum rental payments under all operating leases with remaining noncancelable
lease terms in excess of one year at December 31, 1994, are as follows:


<TABLE>
 
               <S>                                <C>      
               1995                               $1,103,340
               1996                                  867,576
               1997                                  763,747
               1998                                  763,747
               1999                                  325,459
               Thereafter                            212,630
                                                  ----------
                                                           
                                                  $4,036,499
                                                  ==========
</TABLE>


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

                                  (Continued)

                                                                             13.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                          December 31, 1994 and 1993

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

NOTE 12 - EMPLOYEES RETIREMENT PLAN

The Company has established a profit sharing plan, with a 401(k) feature,
covering substantially all employees.  Company contributions to the plan are
discretionary.  No contributions were made for the year ended December 31, 1994,
the ten months ended December 31, 1993 and the year ended February 28, 1993.


NOTE 13 - SALE OF SUBSIDIARY

On February 28, 1993, the Company sold its investment in Cardkey Systems, Ltd.
and Subsidiary, a wholly-owned subsidiary.  The subsidiary was sold to Metra
Corporation, an affiliated company, for $2,653,917.  This amount is classified
in accounts receivable - affiliates in the balance sheet.  The transaction
resulted in a loss of $986,983 which was recorded in the Company's statement of
operations for the year ended February 28, 1993.  The foreign currency
translation adjustment was eliminated as a result of this transaction.


NOTE 14 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for interest and income taxes during the year ended December 31, 1994,
the ten months ended December 31, 1993 and the year ended February 28, 1993, was
as follows:


<TABLE>
<CAPTION>
                                                     Ten months
                                                       ended
                                      December 31,  December 31,  February 28,
                                          1994          1993          1993
                                          ----          ----          ----
        <S>                           <C>           <C>           <C>
 
        Interest                          $890,856      $727,824    $1,559,521
        Income taxes                        17,252        16,747         7,983

In addition, the Company had the following noncash investing activity:
 
        In connection with the sale of 
          Cardkey Systems, Ltd. and
          Subsidiary, receivable issued, 
          net of cash sold of $925,286,
          was as follows:
 
            Net book value of assets sold                           $3,640,900
            Loss on sale                                              (986,983)
            Cash received                                                    -
                                                                    ----------

              Receivable issued                                     $2,653,917
                                                                    ==========
</TABLE>
 

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

                                                                             14.





<PAGE>
 
                             CARDKEY SYSTEMS, INC.
                                                                    EXHIBIT 99.2
                           CONDENSED BALANCE SHEETS
                       (In thousands, except share data)

                                  (Unaudited)


<TABLE>
<CAPTION>
 
                                                           Mar 31, 1995         Dec 31, 1994
                                                           ------------         ------------
                                                                
                   ASSETS
<S>                                                       <C>                  <C>

Current assets:
           Cash and cash equivalents                      $        141         $        158
           Accounts receivable, net of allowance for
             doubtful accounts of $562,000 in 1995
             and $728,000 in 1994                               14,087               12,662
           Accounts receivable from related parties              1,986                1,569
           Costs and estimated earnings in excess of
             billings on uncompleted contracts                      --                1,127
           Inventories (Note 2)                                  3,989                3,942 
           Prepaid expenses                                        664                  176    
                                                           ------------         ------------
                      Total current assets                      20,867               19,634    
                                                                                               
Property and equipment, at cost                                  9,276                9,084    
           Accumulated depreciation                             (5,687)              (5,422)   
                                                           ------------         ------------
                                                                 3,589                3,662    
Goodwill, net (Note 3)                                           3,398                3,670    
                                                           ------------         ------------
                                                          $     27,854         $     26,966     
                                                           ============         ============
   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
           Accounts payable                               $      2,550         $      4,369 
           Billings in excess of costs and estimated                                        
             earnings on uncompleted contracts                   1,761                2,263 
           Accrued expenses                                      3,118                3,282 
           Short term debt                                      20,039               14,932 
                                                           ------------         ------------
                      Total current liabilities                 27,468               24,846 
                                                                                            
Deferred license revenues                                                                   
                                                                                            
Long term debt                                                   3,564                3,564 
                                                                                            
Stockholders' equity:                                                                       
           Common stock, $.01 par value, 1,000,000 shares                                   
             authorized; shares issued and outstanding:                                     
             1,000 in 1995 and 1,000 in 1994                        --                   -- 
           Additional paid-in capital                           21,040               21,040 
           Accumulated deficit                                 (24,218)             (22,484)
                                                           ------------         ------------
                      Total stockholders'
 equity                (3,178)              (1,444)
                                                           ------------         ------------
                                                          $     27,854         $     26,966  
                                                           ============         ============ 
</TABLE>


                            See accompanying notes.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.

                      CONDENSED STATEMENTS OF OPERATIONS
                                (In thousands)

                                  (Unaudited)


<TABLE> 
<CAPTION> 
                                                                     Three Months               
                                                                    Ended March 31                  
                                                        -----------------------------------

                                                             1995                    1994       
                                                             ----                    ----
                                                                                             
<S>                                                     <C>                     <C> 
Sales                                                   $  12,634               $  12,831  
Operating costs and expenses:                                                                
           Cost of sales                                    8,512                   8,772  
           Research and development                           748                     556  
           Marketing, general and administrative            4,532                   4,589  
                                                         --------                --------
                                                           13,792                  13,917  
                                                         --------                --------

Operating loss                                             (1,158)                 (1,086) 
                                                            
                                                                                            
Amortization of intangible assets                            (189)                   (678) 
Interest expense, net                                        (387)                   (228) 
Other                                                          --                     (58) 
                                                         ---------               ---------
                                                                                             
Net loss                                                $  (1,734)              $  (2,050) 
                                                         =========               =========
</TABLE>
 

                            See accompanying notes.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.

                      CONDENSED STATEMENTS OF CASH FLOWS
                                (In thousands)

                                  (Unaudited)


<TABLE> 
<CAPTION> 
                                                                                 Three Months       
                                                                                Ended March 31          
                                                                         ----------------------------    
                                                                                                        
                                                                              1995            1994      
                                                                              ----            ----      
<S>                                                                      <C>            <C>             
Cash flows from operating activities:                                                                   
       Net loss                                                          $  (1,734)     $   (2,050)     
       Adjustments to reconcile net loss to net cash                                                    
            from operating activities:                                                                  
              Depreciation and amortization                                    265             289      
              Change in assets and liabilities:                                                         
                     (Increase) decrease in accounts receivable             (1,842)            683      
                     Decrease in inventories                                 1,080             125      
                     Increase in prepaid expenses                             (488)           (225)     
                     Decrease in other assets                                  272             679      
                     Decrease in current liabilities                         2,622             854      
                                                                          ----------      ----------    
                            Total adjustments                                1,909           2,405      
                                                                          ----------      ----------    
                            Net cash provided (used) by                                                 
                                 operating activities                          175             355      
                                                                                                        
Cash flows from investing activities:                                                                   
       Purchases of property and equipment                                    (192)           (355)     
       Purchase of subsidiary                                                                   --      
                                                                          ----------      ----------    
              Net cash used by investing activities                           (192)           (355)     
                                                                          ----------      ----------    
                                                                                                        
Increase (decrease) in cash and cash equivalents                               (17)              0      
                                                                                                        
Cash and cash equivalents, beginning of period                                 158              50      
                                                                          ----------      ----------    
                                                                                                        
Cash and cash equivalents, end of period                                 $     141      $       50      
                                                                          ==========      ==========     
</TABLE>
 



                            See accompanying notes.

<PAGE>
 
                             CARDKEY SYSTEMS, INC.


                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)


1.   BASIS OF PRESENTATION

     The accompanying financial statements are unaudited but have been prepared
     in the ordinary course of business for the purpose of providing information
     with respect to interim periods. The Condensed Balance Sheet at December
     31, 1994 was derived from the audited Balance Sheet at that date.
     Management of the Company believes that all adjustments necessary for a
     fair presentation for such periods have been included and are of a normal
     recurring nature. The results of operations for the three-month period
     ended March 31, 1995 are not necessarily indicative of the results to be
     expected for the full year.


2.   INVENTORIES

     Inventories consist of the following:

         

<TABLE> 
<CAPTION> 
                                                                   Mar 31, 1995           Dec 31, 1994
                                                                   ------------           ------------

     <S>                                                        <C>                    <C> 
     Raw materials                                              $      728,000         $      790,000

     Work in process                                                   625,000                672,000

     Finished goods                                                  2,636,000              2,480,000
                                                                 --------------         --------------

                                                                $    3,989,000         $    3,942,000
                                                                 ==============         ==============
</TABLE>
 





<PAGE>
 
                                                                    EXHIBIT 99.3

                            Cardkey Systems Limited

                            Directors' report and consolidated
                            financial statements

                            31 December 1994

                            Registered number 845519

<PAGE>
 
Cardkey Systems Limited

Directors' report and consolidated financial statements


<TABLE>
<CAPTION>
 
Contents                                             Page
<S>                                                 <C>
 
Directors' report                                    1 - 2
 
Auditors' report                                     3    
                                                         
Consolidated profit and loss account                 4    
                                                         
Consolidated balance sheet                           5    
                                                         
Parent company balance sheet                         6    
                                                         
Consolidated cash flow statement                     7    
                                                         
Statement of total recognised gains and losses       8    
 
Notes                                                9 - 21
</TABLE>


<PAGE>
 
  Cardkey Systems Limited

  Directors' report


  The directors present their annual report and the audited financial statements
  for the year ended 31 December 1994.

  Principal activities

  The principal activity of the group is the manufacture and sale of electronic
  access control equipment.

  Business review

  The company's activities continue to be affected by the recessionary influence
  pervading the economic environment.  Consequently there has been very little
  change in the levels of business.

  Fixed assets

  Movements in fixed assets during the period are set out in note 9.

  Directors and directors' interests

  The directors who held office during the period were as follows:

  JK Siren
  DB Eastell
  SW
 Hall

  None of the directors who held office at the end of the financial period had
  any disclosable interest in the shares of the company or other group
  companies.

                                       1

<PAGE>
 
  Cardkey Systems Limited

  Directors' report (continued)


  Statement of directors' responsibilities


  Company law requires the directors to prepare financial statements for each
  financial period which give a true and fair view of the state of affairs of
  the company and group and of the profit or loss for that period.  In preparing
  those financial statements, the directors are required to:

  .     select suitable accounting policies and then apply them consistently;

  .     make judgements and estimates that are reasonable and prudent;

  .     state whether applicable accounting standards have been followed,
        subject to any material departures disclosed and explained in the
        financial statements;

  .     prepare the financial statements on the going concern basis unless it is
        inappropriate to presume that the group will continue in business.

  The directors are responsible for maintaining proper accounting records which
  disclose with reasonable accuracy at any time the financial position of the
  company and to enable them to ensure that the financial statements comply with
  the Companies Act 1985.  They have general responsibility for taking such
  steps as are reasonably open to them to safeguard the assets and to prevent
  and detect fraud and other irregularities.

  Auditors

  On 6 February 1995 our auditors changed the name under which they practise to
  KPMG and, accordingly, have signed their report in their new name.  In
  accordance with Section 385 of the Companies Act 1985, a resolution for the
  re-appointment of KPMG as auditors of the company is to be proposed at the
  forthcoming Annual General Meeting.


  By order of the board



  R Aris                                                          
  Company Secretary                                              23 Stadium Way 
                                                                        READING
                                                                      Berkshire
                                                                        RG3 6ER



                                                                  25 April 1995

                                       2

<PAGE>
 
[LETTERHEAD OF KPMG APPEARS HERE]


        Arlington Business Park
        Theale
        Reading RG7  4SD



  Report of the auditors to the members of Cardkey Systems Limited



  We have audited the financial statements on pages 4 to 21.

  Respective responsibilities of directors and auditors

  As described on page 2 the company's directors are responsible for the
  preparation of financial statements.  It is our responsibility to form an
  independent opinion, based on our audit, on those statements and to report our
  opinion to you.

  Basis of opinion

  We conducted our audit in accordance with Auditing Standards issued by the
  Auditing Practices Board.  An audit includes examination, on a test basis, of
  evidence relevant to the amounts and disclosures in the financial statements.
  It also includes an assessment of the significant estimates and judgements
  made by the directors in the preparation of the financial statements, and of
  whether the accounting policies are appropriate to the group's circumstances,
  consistently applied and adequately disclosed.

  We planned and performed our audit so as to obtain all the information and
  explanations which we considered necessary in order to provide us with
  sufficient evidence to give reasonable assurance that the financial statements
  are free from material misstatement, whether caused by fraud or other
  irregularity or error.  In forming our opinion we also evaluated the overall
  adequacy of the presentation of information in the financial statements.

  Opinion

  In our opinion the financial statements give a true and fair view of the state
  of affairs of the company and the group at 31 December 1994 and of the loss of
  the group for the year then ended and have been properly prepared in
  accordance with the Companies Act 1985.


  
  KPMG                                                               25 May 1995
  Chartered Accountants
  Registered Auditors

                                       3

<PAGE>
 
Cardkey Systems Limited

Consolidated profit and loss account
for the year ended 31 December 1994


<TABLE>
<CAPTION>
                                                      Year ended   10 months to
                                                     31 December    31 December
 
                                               Note         1994           1993
 
                                                     (Pounds)000    (Pounds)000
 
 
<S>                                            <C>   <C>           <C>
 
Turnover                                          2       10,290          8,591
Cost of sales                                     6       (7,103)        (5,800)
                                                         _______        _______
 
Gross profit                                               3,187          2,791
Distribution costs                                6       (2,624)        (2,137)
Administrative expenses                           6         (784)          (628)
                                                         _______        _______
 
Operating (loss)/profit                                     (221)            26
Interest receivable and similar income                        31             29
Interest payable and similar charges              7          (52)           (66)
                                                         _______        _______
 
Loss on ordinary activities before taxation       3         (242)           (11)
Tax on loss on ordinary activities                8           76              -
                                                         _______        _______
 
Loss for the period                                         (166)           (11)
                                                         =======        =======
</TABLE>

A statement of movements on reserves is given in note 15.

                                       4

<PAGE>
 
Cardkey Systems Limited

Consolidated balance sheet
at 31 December 1994


<TABLE> 
<CAPTION> 
                                         Note            1994                      1993
                                               (Pounds)000  (Pounds)000  (Pounds)000  (Pounds)000
<S>                                      <C>   <C>          <C>          <C>          <C>
Fixed assets
Tangible assets                             9                       350                       364
 
Current assets
Stocks                                     11          876                       982
Debtors                                    12        2,628                     2,435
Cash at bank and in hand                               544                       781
                                                   _______                   _______
 
                                                     4,048                     4,198
Creditors: amounts falling
  due within one year                      13        2,760                     2,719
                                                   _______                   _______
Net current assets                                                1,288                     1,479
                                                                _______                   _______
 
Total assets less current liabilities                             1,638                     1,843
                                                                =======                   =======
 
Capital and reserves
Called up share capital                    14                     1,023                     1,023
Profit and loss account                    15                       615                       820
                                                                _______                   _______
 
Shareholders' funds                                               1,638                     1,843
                                                                =======                   =======
</TABLE>

These financial statements were approved by the board of directors on 25 April
1995 and were signed on its behalf by:


SW Hall
Director

                                       5

<PAGE>
 
Cardkey Systems Limited

Balance sheet
at 31 December 1994


<TABLE>
<CAPTION>                                         Note            1994                      1993 
                                               (Pounds)000  (Pounds)000  (Pounds)000  (Pounds)000
<S>                                      <C>   <C>          <C>          <C>          <C>
Fixed assets
Tangible assets                             9                       340                       355
Investments                                10                       441                       378
                                                                _______                   _______
 
Current assets                                                      781                       733
Stocks                                     11          758                       882
Debtors                                    12        2,255                     2,240
Cash at bank and in hand                               526                       677
                                                   _______                   _______
 
                                                     3,539                     3,799
 
Creditors: amounts falling
  due within one year                      13        2,710                     2,689
                                                   _______                   _______
 
Net current assets                                                  829                     1,110
                                                                _______                   _______
 
Total assets less current liabilities                             1,610                     1,843
                                                                =======                   =======
 
Capital and reserves
Called up share capital                    14                     1,023                     1,023
Profit and loss account                    15                       587                       820
                                                                _______                   _______
 
Shareholders' funds                                               1,610                     1,843
                                                                =======                   =======
</TABLE>

These financial statements were approved by the board of directors on 25 April
1995 and were signed on its behalf by:



SW Hall
Director

                                       6

<PAGE>
 
Cardkey Systems Limited

Consolidated cash flow statement
for the year ended 31 December 1994


<TABLE>
<CAPTION>
                                                       Note             1994                        1993
                                                             (Pounds)000   (Pounds)000   (Pounds)000   (Pounds)000
<S>                                                    <C>   <C>           <C>           <C>           <C>
 
Net cash (outflow)/inflow from operating activities      20                        (49)                        283
 
Exchange loss arising on consolidation                                             (39)                          -
 
Return on investments and servicing of finance
   Interest received                                                  31                          29
   Interest paid                                                     (59)                        (66)
                                                                 _______                     _______
 
Net cash outflow from returns on investment and
 servicing of finance                                                              (28)                        (37)
 
Taxation
   UK corporation tax paid/received                                    -                           -
                                                                 _______                     _______
 
Tax paid/received                                                                    -                           -
 
Investing activities
   Purchase of tangible fixed assets                                (121)                        (44)
   Sale of tangible fixed assets                                       -                           -
                                                                 _______                     _______
 
Net cash outflow from investing activities                                        (121)                        (44)
                                                                               _______                     _______
 
(Decrease)\increase in cash and cash equivalents         21                       (237)                        202
                                                                               =======                     =======
</TABLE>



                                       7

<PAGE>
 
Cardkey Systems Limited

Statement of total recognised gains and losses
for the year ended 31 December 1994


<TABLE>
<CAPTION>
 
 
                                           Year ended   10 months to
                                          31 December    31 December
                                                 1994           1993
                                          (Pounds)000    (Pounds)000
 
<S>                                       <C>           <C>
Profit/(loss) for the financial period           (166)           (11)
 
Exchange loss arising on consolidation            (39)             -
                                              _______        _______
 
Total recognised gains and losses                (205)           (11)
                                              =======        =======
 
</TABLE>



                                       8

<PAGE>
 
Cardkey Systems Limited

Notes
(forming part of the financial statements)


1     Accounting policies

      The following accounting policies have been applied consistently in
      dealing with items which are considered material in relation to the
      company's financial statements.

      Basis of preparation

      The financial statements have been prepared in accordance with
      applicable accounting standards and under the historical cost accounting
      rules.

      Basis of consolidation

      The group financial statements consolidate the financial statements of
      Cardkey Systems Limited and all its subsidiary undertakings.  These
      financial statements are made up to 31 December 1994.

      Unless otherwise stated, the acquisition method of accounting has been
      adopted.  Under this method, the results of subsidiary and associated
      undertakings acquired or disposed of in the period are included in the
      consolidated profit and loss account from the date of acquisition or up
      to the date of disposal.  Goodwill arising on consolidation
      (representing the excess of the fair value of the consideration given
      over the fair value of the separable net assets acquired) is written off
      against reserves on acquisition.

      In the company's financial statements, investments in subsidiary
      undertakings are stated at cost less amounts written off.

      In accordance with Section 230(4) of the Companies Act 1985 Cardkey
      Systems Limited is exempt from the requirement to present its own profit
      and loss account.

      The amount of the loss for the financial period dealt with in the
      financial statements of Cardkey Systems Limited is disclosed in note 15
      to these financial statements.

      Fixed assets and depreciation

      Depreciation is provided by the company to write off the cost less the
      estimated residual value of tangible fixed assets by equal instalments
      over their estimated useful economic lives as follows:


<TABLE>
<CAPTION>

<S>                                   <C>  
      Leasehold land
       and buildings           -      life of lease
      Plant and machinery      -      15-20% per annum
      Computer equipment       -      20-33% per annum
</TABLE>



                                       9

<PAGE>
 
Cardkey Systems Limited

Notes (continued)


      Foreign currencies

      Transactions in foreign currencies are recorded using the rate of
      exchange ruling at the date of the transaction.  Monetary assets and
      liabilities denominated in foreign currencies are translated using the
      rate of exchange ruling at the balance sheet date and the gains or
      losses on translation are included in the profit and loss account.

      All translation differences arising on consolidation are dealt with as
      movements in reserves under the closing rate method.

      Leases

      All leases are accounted for as 'operating leases' and the rental
      charges are charged to the profit and loss account on a straight line
      basis over the life of the lease.

      Pension costs

      The group operates a defined benefit pension scheme providing benefits
      based on final pensionable pay.  The assets of the scheme are held
      separately from those of the group, being invested with insurance
      companies.  Contributions to the scheme are charged to the profit and
      loss account so as to spread the cost of pensions over employees'
      working lives with the group.

      Stocks

      Stocks are stated at the lower of cost and net realisable value.  In
      determining the cost of raw materials, consumables and goods purchased
      for resale, the FIFO method is used.  For work in progress and finished
      goods manufactured by the group, cost is taken as production cost, which
      includes an appropriate proportion of attributable overheads.

      Taxation

      The charge for taxation is based on the profit or loss for the period
      and takes into account taxation deferred because of timing differences
      between the treatment of certain items for taxation and accounting
      purposes.  Provision is made for deferred tax only to the extent that it
      is probable that an actual liability will crystallise.

      Turnover

      Turnover represents the amounts (excluding value added tax) derived from
      the provision of goods and services to third party customers during the
      period.


                                      10

<PAGE>
 
Cardkey Systems Limited

Notes (continued)


2     Turnover

      The turnover of the group is attributable to the group's main activity.
      The geographical analysis of turnover is as follows:


<TABLE>
<CAPTION>
 
 
                                                Year ended             10 months
                                               31 December                 ended
                                                                     31 December
                                                      1994                  1993
                                               (Pounds)000           (Pounds)000
<S>                                            <C>                   <C>
      United Kingdom                                 7,190                 5,912
      Europe                                         2,810                 2,427
      Middle East and Africa                           146                   124
      United States of America                          71                    33
      Far East and Australia                            73                    95
                                                    ______                ______
 
                                                    10,290                 8,591
                                                    ======                ======

</TABLE>
 

3     Loss on ordinary activities before taxation


<TABLE> 
<CAPTION> 
 
                                                Year ended             10 months
                                               31 December                 ended
                                                                     31 December
                                                      1994                  1993
                                               (Pounds)000           (Pounds)000
  
<S>                                            <C>                   <C>       

      Loss on ordinary activities before
       taxation is stated
       after charging/(crediting):
 
      Auditors' remuneration:
              Audit                                     32                    15
              Other services                             5                     4
      Depreciation and other amounts written 
            off tangible fixed assets                  137                   124
      Hire of plant and machinery - rentals         
       payable under operating leases                  303                   294
      Hire of other assets - operating leases          223                   205
      Foreign exchange (gain)/loss                     (17)                   46
                                                   =======               =======

</TABLE>


                                      11

<PAGE>
 
Cardkey Systems Limited

Notes (continued)

4     Remuneration of directors


<TABLE>
<CAPTION>
        
                                            Year ended                10 months 
                                           31 December                    ended
                                                                    31 December 
                                                  1994                     1993
                                           (Pounds)000               (Pounds)00
<S>                                        <C>                      <C>  
 
      Directors' emoluments:
       As directors                                 87                       74
                                               =======                  =======
</TABLE>


      The emoluments, excluding pension contributions, of the chairman were
      (Pounds)NIL (10 months ended 31 December 1993:(Pounds)NIL) and those of
      the highest paid director were (Pounds)74,668 (10 months ended 31 December
      1993:(Pounds)62,410).

      The emoluments, excluding pension contributions, of the directors
      (including the chairman and highest paid director) were within the
      following ranges:


<TABLE>
<CAPTION>
 
                                                            Number of directors
                                                    Year ended        10 months
                                                   31 December            ended
                                                                    31 December
                                                          1994             1993

<S>                                                <C>              <C>
 
            (Pounds)0 - (Pounds) 5,000                       2                 2
 
       (Pounds)60,001 - (Pounds)65,000                       -                 1
 
       (Pounds)70,001 - (Pounds)75,000                       1                 -
                                                           ===               ===

</TABLE>
 
 
5     Staff numbers and costs
 
      The average number of persons employed by the group (including directors)
      during the period, analysed by category, was as follows:


<TABLE> 
<CAPTION> 
                                                             Number of Employees
                                                      Year ended       10 months
                                                     31 December           ended
                                                                     31 December
                                                            1994            1993
<S>                                                  <C>             <C>  
      Administration                                          14              14
      Production                                              70              88
      Sales                                                   54              58
                                                         _______         _______
 
                                                             138             160
                                                         =======         =======

</TABLE>

                                      12

<PAGE>
 

Cardkey Systems Limited

Notes (continued)

5     Staff numbers and costs (continued)

      The aggregate payroll costs of these persons were as follows:


<TABLE>
<CAPTION> 
 
                                                         Year ended    10 months
                                                        31 December        ended
                                                                     31 December
                                                               1994         1993
                                                        (Pounds)000  (Pounds)000
 
<S>                                                     <C>          <C>
 
      Wages and salaries                                      3,057        2,667
      Social security costs                                     304          304
      Other pension costs (see note 19)                         282          182
                                                            _______      _______
 
                                                              3,643        3,153
                                                            =======      =======

</TABLE>
 

6     Exceptional items

      Included within cost of sales, administration and distribution expenses
      are exceptional redundancy costs of (Pounds)112,000 and stock write-offs
      of (Pounds)65,000.

7     Interest payable and similar charges


<TABLE>
<CAPTION>
 
                                                         Year ended    10 months
                                                        31 December        ended
                                                                     31 December
                                                               1994         1993
                                                        (Pounds)000  (Pounds)000
 
<S>                                                     <C>          <C>
 
      On bank loans, overdrafts and other loans
       wholly repayable within five years                         1            2
      On all other loans                                         51           64
                                                            _______      _______
 
                                                                 52           66
                                                            =======      =======

</TABLE>


                                      13

<PAGE>
 
Cardkey Systems Limited

Notes (continued)

8     Taxation
 

<TABLE> 
<CAPTION> 
                                                     Year ended        10 months
                                                    31 December            ended
                                                                     31 December
                                                           1994             1993
                                                    (Pounds)000      (Pounds)000
 
<S>                                                 <C>              <C>  
 
      UK corporation tax at 33% (1993:33%)
       on the loss for the period on ordinary                
       activities                                            76                -
      Deferred taxation                                       -                -
                                                        _______          _______
 
                                                             76                -
                                                        =======          =======

</TABLE>
 

      The tax credit relates to group relief receivable from Abloy Security
      Holdings Ltd. Tax losses amounting to (Pounds)85,000 (31 December
      1993:(Pounds)30,000) are available to relieve future profits of Cardkey
      Systems Limited.
 
9     Tangible fixed assets
 

<TABLE> 
<CAPTION> 
 
                                Short      Computer         Plant,        Total
                            leasehold     equipment     machinery,
                         improvements                 fittings and
                                                         equipment
                          (Pounds)000   (Pounds)000    (Pounds)000  (Pounds)000
 
<S>                      <C>            <C>           <C>           <C>  

      Group
  
      Cost
      At 1 January 1994           404           580          1,017        2,001
      Additions                     -           107             14          121
      Disposals                     -          (105)            (7)        (112)
                              _______       _______        _______      _______
 
      At 31 December 1994         404           582          1,024        2,010
                              _______       _______        _______      _______
 
      Depreciation
      At 1 January 1994           199           548            890        1,637
      Charge for period            21            46             70          137
      On disposals                  -          (105)            (9)        (114)
                              _______       _______        _______      _______
 
      At 31 December 1994         220           489            951        1,660
                              _______       _______        _______      _______
 
      Net book value
      At 31 December 1994         184            93             73          350
                              =======       =======        =======      =======

      At 1 January 1994           205            32            127          364
                              =======       =======        =======      =======

</TABLE>
 

                                      14

<PAGE>
 
Cardkey Systems Limited

Notes (continued)

9     Tangible fixed assets (continued)


<TABLE>
<CAPTION>
 
                                Short      Computer         Plant,        Total
                            leasehold     equipment     machinery,
                         improvements                 fittings and
                                                         equipment
                          (Pounds)000   (Pounds)000    (Pounds)000  (Pounds)000

<S>                      <C>            <C>           <C>           <C>  

      Company

      Cost
      At 1 January 1994           404           579            974        1,957
      Additions                     -           108              9          117
      Disposals                     -          (104)            (9)        (113)
                              _______       _______        _______      _______

      At 31 December 1994         404           583            974        1,961
                              _______       _______        _______      _______
 
      Depreciation
      At 1 January 1994           199           548            855        1,602
      Charge for period            21            46             64          131
      On disposals                  -          (104)            (8)        (112)
                              _______       _______        _______      _______
 
      At 31 December 1994         220           490            911        1,621
                              _______       _______        _______      _______
 
      Net book value
      At 31 December 1994         184            93             63          340
                              =======       =======        =======      =======
 
      At 1 January 1994           205            31            119          355
                              =======       =======        =======      =======

</TABLE>

                                      15

<PAGE>
 
Cardkey Systems Limited

Notes (continued)

10    Fixed asset investments


<TABLE> 
<CAPTION> 
 
                                   Shares in               Loans          Total
                                       group            to group
                                undertakings        undertakings
      Company                    (Pounds)000         (Pounds)000    (Pounds)000

<S>                             <C>                 <C>             <C>  
 
      Cost
      At 1 January 1994                   27                 721            748
      Retranslated at closing rate         -                 160            160
                                     _______             _______        _______

      At 31 December 1994                 27                 881            908
                                     _______             _______        _______
 
      Provisions
      At 1 January 1994                    -                 370            370
      Provided in year                     -                  97             97
                                     _______             _______        _______
 
      At 31 December 1994                  -                 467            467
                                     _______             _______        _______
 
      Net book value
      At 31 December 1994                 27                 414            441
                                     =======             =======        =======
 
      At 1 January 1994                   27                 351            378
                                     =======             =======        =======

</TABLE>


      The company holds 100% of the ordinary share capital of Cardkey
      Sicherheitssysteme GmbH, a company incorporated in Germany. The subsidiary
      undertaking trades as a distributor of electronic access control
      equipment. The above provision is to write-down loans made to this
      subsidiary to the recoverable amount based on the net book value of the
      underlying assets.

11    Stocks
 

<TABLE> 
<CAPTION> 
                                           Group                     Company
                                     1994         1993         1994         1993
                              (Pounds)000  (Pounds)000  (Pounds)000  (Pounds)000

<S>                           <C>          <C>          <C>          <C>  

      Raw materials and                76          202           76          202
       consumables
      Work in progress                 59           90           59           90
      Finished goods and goods        
       for resale                     741          690          623          590
                                  _______      _______      _______      _______
 
                                      876          982          758          882
                                  =======      =======      =======      =======
</TABLE>


                                      16

<PAGE>
 
CARDKEY SYSTEMS LIMITED

Notes (continued)

12    Debtors
 

<TABLE> 
<CAPTION> 
                                           Group                     Company
                                     1994         1993         1994         1993
                              (Pounds)000  (Pounds)000  (Pounds)000  (Pounds)000
 
<S>                           <C>          <C>          <C>          <C> 

      Amounts falling due
       within one year
  
      Trade debtors                 2,281        2,165        1,824        1,874
      Amounts owed by subsidiary
       undertakings                     -            -           91           97
      Amounts owed by other group
       undertakings                   183          106          183          106
      Prepayments and accrued         
       income                         164          164          157          163
                                  _______      _______      _______      _______

                                    2,628        2,435        2,255        2,240
                                  =======      =======      =======      =======
</TABLE>
 
 
13    Creditors: amounts falling due within one year
 

<TABLE> 
<CAPTION> 
                                           Group                     Company
                                    1994          1993         1994         1993
                             (Pounds)000   (Pounds)000  (Pounds)000  (Pounds)000

<S>                          <C>           <C>          <C>          <C>  

      Trade creditors                 676          526          634          521
      Amounts owed to subsidiary              
       undertakings                     -            -           21            2
      Amounts owed to other              
       group undertakings           1,145        1,332        1,145        1,332
      Other creditors including
       taxation and
       social security:
               Corporation tax          -            -            -            -
               Other taxes and        
                social security       181          233          161          216
      Accruals and deferred           
       income                         758          628          749          618
                                  _______      _______      _______      _______

                                    2,760        2,719        2,710        2,689
                                  =======      =======      =======      =======
 
</TABLE>


                                      17

<PAGE>
 
CARDKEY SYSTEMS LIMITED

Notes (continued)

14    Called up share capital
 

<TABLE> 
<CAPTION> 

                                                            1994          1993
                                                     (Pounds)000   (Pounds)000

<S>                                                  <C>           <C>  

      Authorised
      Ordinary shares of (Pounds)1 each                    2,000         2,000
                                                          ======        ======

      Allotted, called up and fully paid
      Ordinary shares of  (Pounds)1 each                   1,023         1,023
                                                           =====         =====
</TABLE>
 
 
15    Profit and loss account
 

<TABLE> 
<CAPTION> 
 
                                                           Group       Company
                                                     (Pounds)000   (Pounds)000
 
<S>                                                  <C>           <C>  
 
      At 1 January 1994                                      820           820
      Loss for the period                                   (166)         (233)
      Exchange loss arising on consolidation                 (39)            -
                                                         _______       _______
 
      At 31 December 1994                                    615           587
                                                         =======       =======

</TABLE>
 
 
16    Reconciliation of movements in shareholders' funds


<TABLE> 
<CAPTION> 
 
                                                            1994          1993
                                                     (Pounds)000   (Pounds)000

<S>                                                  <C>           <C>  

      Profit/(loss) for the financial period                (166)          (11)
      Exchange loss arising on consolidation                 (39)            -
                                                         _______       _______
 
      Net deduction from shareholders' funds                (205)          (11)
      Opening shareholders' funds                          1,843         1,854
                                                         _______       _______
      Closing shareholders' funds                          1,638         1,843
                                                         =======       =======

</TABLE>


17    Contingent liabilities

      The company has provided guarantees relating to HM Customs and Excise
      and various performance bonds totalling (Pounds)151,907, and
      (Pounds)700,000 in respect of Bankers Automated Clearing Services.

      Lloyd's Bank Plc hold a first charge on (Pounds)158,000 cash deposits
      relating to these guarantees.

                                      18

<PAGE>
 
CARDKEY SYSTEMS LIMITED

Notes (continued)
 
18    Commitments

      (i)  Capital commitments at the end of the financial period for which no
           provision has been made.


<TABLE> 
<CAPTION>

                                           Group                     Company
                                     1994         1993         1994         1993
                              (Pounds)000  (Pounds)000  (Pounds)000  (Pounds)000
  
<S>                           <C>          <C>          <C>          <C>
 
           Contracted                   5           41            5           41
           Authorised but
            not contracted              5            5            5            5
                                  =======      =======      =======      =======

</TABLE>


      (ii) Annual commitments under non-cancellable operating leases are as
           follows:


<TABLE>
<CAPTION>
 
                                         1994                       1993
                              Land and         Other     Land and         Other
                             buildings                  buildings
           Company         (Pounds)000   (Pounds)000  (Pounds)000   (Pounds)000

<S>                        <C>           <C>          <C>           <C>
 
           Operating leases which
            expire:
              Within one year        -             9            -            62
 
           In the second to
            fifth years inclusive   18           238           17           171
 
           Over five years         223             -          171             -
                               _______       _______      _______       _______

                                   241           247          188           233
                               =======       =======      =======       =======

</TABLE>
 
 

<TABLE> 
<CAPTION> 

                                         1994                       1993
                              Land and         Other     Land and         Other
                             buildings                  buildings
                           (Pounds)000   (Pounds)000  (Pounds)000   (Pounds)000
 
<S>                        <C>           <C>          <C>           <C> 

           Group
           Operating leases which
            expire:
              Within one year        -            15            -            80
              In the second to
               fifth years 
               inclusive            18           242           17           171
 
           Over five years         232             -          231             -
                               _______       _______      _______       _______

                                   250           257          248           251
                               =======       =======      =======       =======

</TABLE>


                                      19

<PAGE>
 
CARDKEY SYSTEMS LIMITED

Notes (continued)

19    Pension scheme

      The company operates a pension scheme providing benefits based on final
      pensionable pay.  The assets of the scheme are held separately from
      those of the company being invested with insurance companies.

      Contributions to the company's defined benefit pension scheme are charged
      to the profit and loss account so as to spread the cost of pensions over
      employees' working lives with the company. The contributions are
      determined by a qualified actuary on the basis of triennial valuations
      using the projected unit method. The most recent valuation was at 1 April
      1994. The assumptions which have the most significant effect on the
      results of the valuation are those relating to the rate of return on
      investments and the rates of increase in salaries and pensions. It was
      assumed that the investment returns would be 8.5% per annum and that
      salary increases would average 7% per annum.

      The pension charge for the period was (Pounds)250,000 (10 months ended 31
      December 1993:(Pounds)155,312) and (Pounds)33,000 has been included within
      accruals at the year end (1993: (Pounds)nil). The most recent actuarial
      valuation showed that the market value of the scheme's assets was
      (Pounds)2,973,000 and that the actuarial value of those assets represented
      93% of the benefits that had accrued to members. As a result of the
      actuarial valuation, the contributions of the employees will remain at
      5.5% of earnings, however, from 1 April 1994 the contributions of the
      company will increase from 12% to 14.9%.

      Pension contributions to pension schemes covering employees of the
      group's overseas operations amounted to (Pounds)32,000 (10 months ended
      31 December 1993: (Pounds)26,000).

20    Reconciliation of operating (loss)/profit to net cash (outflow)/inflow
      from operating activities


<TABLE>
<CAPTION>
 
                                                      Year to     10 months to
                                                  31 December      31 December
                                                         1994             1993
                                                  (Pounds)000      (Pounds)000
  
<S>                                               <C>             <C>
 
      Operating (loss)/profit                            (221)              26
      Depreciation charge                                 137              124
      Decrease in stocks                                  106               90
      (Increase)/decrease in debtors                     (117)             166
      Increase/(decrease) in creditors                     48             (123)
      Loss on sale of fixed assets                         (2)               -
                                                      _______          _______
      Net cash (outflow)/inflow from operating                    
       activities                                         (49)             283
                                                      =======          =======
</TABLE>


                                      20

<PAGE>
 
CARDKEY SYSTEMS LIMITED

Notes (continued)

21    Analysis of changes in cash and cash equivalents


<TABLE>
<CAPTION>
 
                                           Cash      Overdraft           Net
                                     (Pounds)000   (Pounds)000   (Pounds)000

<S>                                  <C>           <C>           <C>
 
      Balance at 28 February 1993            646           (67)          579
      Net cash inflow                        135            67           202
                                         _______       _______       _______
 
      Balance at 31 December 1993            781             -           781
      Net cash outflow                      (237)            -          (237)
                                         _______       _______       _______
 
      Balance at 31 December 1994            544             -           544
                                         =======       =======       =======
 
</TABLE>


22    Ultimate parent company and parent undertaking of larger group

      The company is a subsidiary undertaking of ASSA Abloy AB which is the
      ultimate parent company incorporated in Sweden.

      The smallest group in which the results of the company are consolidated is
      that headed by Abloy Security Holdings Limited, registered in England and
      Wales. The consolidated financial statements of this group are available
      to the public and may be obtained from Companies House, Crown Way,
      Cardiff, CF4 3UZ.

                                      21



<PAGE>
                                                                   EXHIBIT 99.4
                             CARDKEY SYSTEMS, LTD.                 
                                                                    
                           CONDENSED BALANCE SHEETS
                     (In GBP thousands, except share data)

                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                      Mar 31, 1995                Dec 31, 1994
                                                                      ------------                ------------
                                                                                     (In Pounds) 
                    ASSETS
<S>                                                                   <C>                         <C>
Current assets:                                                     
           Cash and cash equivalents                                          627                         544
           Accounts receivable, net of allowance for
             doubtful accounts of (Pounds)117,000 in 1995                         
             and (Pounds)100,000 in 1994                                    2,484                       2,388
           Inventories (Note 2)                                             1,050                         876
           Deferred income tax                                                 76                          76      
           Prepaid expenses                                                   259                         164
                                                                      ------------                ------------
                      Total current assets                                  4,496                       4,048
 
Property and equipment, at cost                                             2,024                       2,010        
           Accumulated depreciation                                        (1,697)                     (1,660)       
                                                                      ------------                ------------
                                                                              327                         350     
                                                                      ------------                ------------

                                                                            4,823                       4,398    
                                                                      ============                ============

   LIABILITIES AND STOCKHOLDERS' EQUITY                          
Current liabilities:
           Accounts payable                                                 1,052                         740
           Accounts payable to related parties                                200                          62
           Parent company loan                                                900                         902
           Accrued expenses                                                 1,002                       1,056
                                                                      ------------                ------------
                      Total current liabilities                             3,154                       2,760       
 
Stockholders' equity:
           Common stock, (Pounds)1, 2,000,000 shares authorized,
             1,023,503 shares issued                                        1,023                       1,023
           Retained earnings                                                  646                         615
                                                                      ------------                ------------
                      Total stockholders' equity                            1,669                       1,638
                                                                      ------------                ------------
                                                                            4,823                       4,398
                                                                      ============                ============
</TABLE>


                            See accompanying notes.



                                                            1

<PAGE>
 
                             CARDKEY SYSTEMS, LTD.

                      CONDENSED STATEMENTS OF OPERATIONS
                              (In GBP thousands)

                                  (Unaudited)

 

<TABLE> 
<CAPTION> 
                                                                        Three Months
                                                                       Ended March 31
                                                                -----------------------------

                                                                 1995    (IN POUNDS)     1994
                                                                 ----                    ---- 
 
<S>                                                             <C>                     <C>  
Sales                                                           2,568                   2,378
Operating costs and expenses:
           Cost of sales                                        1,552                   1,458
           Research
 and development                                48                      56
           Marketing, general and administrative                  968                   1,015
                                                              --------               --------
                                                                2,568                   2,529
                                                              --------               --------
 
Operating income (loss)                                            --                    (151)
 
Interest expense, net                                              (7)                    (11)
                                                              --------               ---------
 
Net loss                                                           (7)                   (162)
                                                              ========               =========
</TABLE>






                            See accompanying notes.

<PAGE>
 
                             CARDKEY SYSTEMS, LTD.

                      CONDENSED STATEMENTS OF CASH FLOWS
                              (In GBP thousands)

                                  (Unaudited)



<TABLE>
<CAPTION>
                                                                                 Three Months
                                                                                Ended March 31
                                                                          ---------------------------
 
                                                                             1995  (IN POUNDS)   1994
                                                                             ----                ----  
<S>                                                                        <C>               <C> 
Cash flows from operating activities:                                       
         Net loss                                                              (7)               (162)
         Adjustments to reconcile net loss to net cash                                               
           from operating activities                                                                 
                 Depreciation and amortization                                 37                  33  
                 Change in assets and liabilities:                                                   
                          (Increase) decrease in accounts receivable         (160)                 49  
                          (Increase) decrease in inventories                 (173)                 22  
                           Increase in prepaid expenses                       (96)                (78)  
                           Increase in current liabilities                    498                 405  
                           Decrease in parent company loan                     (2)               (249)  
                                                                           -------             -------  
                                     Total adjustments                        104                 182  
                                                                           -------             -------  
                                     Net cash provided by                                            
                                        operating activities                   97                  20  
                                                                                                     
Cash flows from investing activities:                                                                
         Purchases of property and equipment                                  (14)                (55)  
                                                                           -------             -------  
                 Net cash used by investing activities                        (14)                (55)  
                                                                                                     
Increase/(decrease) in cash and cash equivalents                               83                 (35)  
                                                                                                     
Cash and cash equivalents, beginning of period                                544                 781  
                                                                           ------              ------  
                                                                                                     
Cash and cash equivalents, end of period                                      627                 746  
                                                                           ======              ======   
</TABLE>

                                           

                                           
                            See accompanying notes.

<PAGE>
 
                             CARDKEY SYSTEMS, LTD.


                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)


1.   BASIS OF PRESENTATION

     The accompanying financial statements are unaudited but have been prepared
     in the ordinary course of business for the purpose of providing information
     with respect to interim periods. The Condensed Balance Sheet at December
     31, 1994 was derived from the audited Balance Sheet at that date.
     Management of the Company believes that all adjustments necessary for a
     fair presentation for such periods have been included and are of a normal
     recurring nature. The results of operations for the three-month period
     ended March 31, 1995 are not necessarily indicative of the results to be
     expected for the full year.

2.   INVENTORIES

     Inventories consist of the following:


<TABLE>
<CAPTION>
                                    Mar 31, 1995         Dec 31, 1994
                                    ------------         ------------    
                                               (In Pounds)  
     <S>                            <C>                  <C>  
     Raw materials                          142                   76
 
     Work in process                        131                   59
 
     Finished goods                         777                  741
                                    -----------          -----------
 
                                          1,050                  876
                                    ===========          ===========  
</TABLE>






<PAGE>
 
                                                                    Exhibit 99.5

                  Pro Forma Financial Information (Unaudited)

The following pro forma condensed combined financial information has been
prepared giving effect to the purchase of certain assets and the assumption of
certain liabilities (the Purchase) of Cardkey Systems, Inc. and Cardkey Systems,
Ltd. (collectively, Cardkey) by Amtech Corporation (Amtech).  The pro forma
condensed combined balance sheet assumes the Purchase had been consummated on
March 31, 1995.  The pro forma condensed combined statements of operations
assume the Purchase had occurred on January 1, 1994.

The pro forma information is presented for illustrative purposes only and is not
necessarily indicative of the operating results or financial position that would
have occurred if the Purchase had been consummated as presented in the
accompanying unaudited pro forma condensed combined financial statements, nor is
it necessarily indicative of the future results of operations.  The pro forma
adjustments and the assumptions on which they are based are described in the
accompanying Notes to Pro Forma Condensed Financial Statements.

These pro forma condensed combined financial statements should be read in
conjunction with
 the historical financial statements and the related notes
thereto of Amtech and Cardkey.

<PAGE>


                              Amtech Corporation
            Pro Forma Condensed Combined  Balance Sheet (unaudited)
                                March 31, 1995
                            (Dollars in thousands)


<TABLE>
<CAPTION>
                                                     Historical Financial Statements
                                                    ----------------------------------
                                                                 Cardkey      Cardkey      Excluded                      Pro Forma
                                                      The        Systems,     Systems,      Assets/       Pro Forma      Financial
Assets                                              Company        Inc.         Ltd.      Liabilities    Adjustments     Statements
                                                    -------      --------     --------    -----------    -----------     ----------
<S>                                                <C>          <C>           <C>         <C>            <C>             <C>
Cash and equivalents                               $ 31,570     $     141     $ 1,016     $  (1,157)(a)  $ (19,237)(c)   $ 12,333
Short-term marketable securities                     11,216                                                                11,216
Accounts receivable, net                              9,233        14,087       4,027                                      27,347
Accounts receivable from related parties              1,019         1,986                    (1,986)(a)                     1,019
Inventories                                           8,527         3,989       1,702                                      14,218
Deferred income taxes                                 1,306                                                                 1,306
Other                                                   481           664         543                                       1,688
                                                   --------     ---------     -------     ---------      ---------       --------

Total current assets                                 63,352        20,867       7,288        (3,143)       (19,237)        69,127

Property and equipment, net                          10,385         3,589         530                                      14,504
Deferred income taxes                                 1,578                                                                 1,578
Intangibles                                           4,039         3,398                    (3,398)(a)    (18,372)(b)
                                                                                                            23,443 (c)      9,110
Other                                                 2,568                                                                 2,568
                                                   --------     ---------     -------     ---------      ---------       --------

                                                   $ 81,922     $  27,854     $ 7,818     $  (6,541)     $ (14,166)      $ 96,887
                                                   ========     =========     =======     =========      =========       ========

Liabilities and Stockholders' Equity

Accounts payable                                   $  2,684     $   2,550     $ 1,705     $              $               $  6,939
Accounts payable to related parties                                               324          (324)(a)
Accrued expenses                                      2,598         3,118       1,625                                       7,341
Billings in excess of costs and estimated earnings
     on uncompleted contracts                                       1,761                                                   1,761
Current portion, long-term debt                                    20,039       1,459       (21,498)(a)      1,879 (c)      1,879
                                                   --------     ---------     -------     ---------      ---------       --------

Total current liabilities                             5,282        27,468       5,113       (21,822)         1,879         17,920

Deferred license revenues                             1,569                                                                 1,569
Long-term debt                                                      3,564                    (3,564)(a)      2,327 (c)      2,327

Stockholders' equity

Preferred stock
Common stock                                            146        21,040       1,658        18,845 (a)    (41,543)(b)        146
Additional paid-in capital                           75,322                                                                75,322
Unrealized loss on marketable securities               (339)                                                                 (339)
Retained earnings (accumulated deficit)                 (58)      (24,218)      1,047                       23,171 (b)        (58)
                                                   --------     ---------     -------     ---------      ---------       --------

Total stockholders' equity                           75,071        (3,178)      2,705        18,845        (18,372)        75,071
                                                   --------     ---------     -------     ---------      ---------       --------

                                                   $ 81,922     $  27,854     $ 7,818     $  (6,541)     $ (14,166)      $ 96,887
                                                   ========     =========     =======     =========      =========       ========
</TABLE>


See accompanying notes to Pro Forma Condensed Financial Statements.

<PAGE>


                              Amtech Corporation
       Pro Forma Condensed Combined Statement of Operations (unaudited)
                     For the Year Ended December 31, 1994
                   (In thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                        Historical Financial Statements
                                                   ------------------------------------------
                                                                    Cardkey          Cardkey                           Pro Forma
                                                     The            Systems,         Systems,          Pro Forma       Financial
                                                   Company            Inc.             Ltd.           Adjustments      Statements
                                                   -------          --------         --------         -----------      ----------
<S>                                               <C>              <C>               <C>             <C>               <C>
Sales                                             $ 61,457         $  53,122         $ 15,734                          $ 130,313

Operating costs and expenses:
          Cost of sales                             31,288            40,110           10,861                             82,259
          Research and development                   6,222             3,230              312                              9,764
          Marketing, general and administrative     13,991            17,223            4,899                             36,113
          Amortization of intangible assets                            2,226                          $ (2,226)(b)
                                                                                                           507 (b)           507
                                                  --------         ---------         --------         --------         ---------

                                                    51,501            62,789           16,072           (1,719)          128,643
                                                  --------         ---------         --------         --------         ---------

Operating income (loss)                              9,956            (9,667)            (338)           1,719             1,670

Interest income                                      2,104                                 48           (1,272)(a)
                                                                                                           (48)(c)           832
Interest expense                                                        (906)             (80)             986 (d)
                                                                                                          (379)(d)          (379)
Other                                                                   (182)                                               (182)
                                                  --------         ---------         --------         --------         ---------

Income (loss) before income taxes                   12,060           (10,755)            (370)           1,006             1,941

(Provision) benefit for income taxes                (4,398)                               116            3,574 (e)          (708)
                                                  --------         ---------         --------         --------         ---------

Net income (loss)                                 $  7,662         $ (10,755)        $   (254)        $  4,580         $   1,233
                                                  ========         =========         ========         ========         =========

Earnings per share                                   $0.52                                                                $ 0.08
                                                  ========                                                             =========

Shares used in computing earnings per share         14,800                                                                14,800
                                                  ========                                                             =========
</TABLE>



See accompanying notes to Pro Forma Condensed Financial Statements.

<PAGE>


                              Amtech Corporation
       Pro Forma Condensed Combined Statement of Operations (unaudited)
                   For the Three Months Ended March 31, 1995
                   (In thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                       Historical Financial Statements
                                                  ------------------------------------------
                                                                    Cardkey          Cardkey                          Pro Forma
                                                     The            Systems,         Systems,         Pro Forma       Financial
                                                   Company            Inc.             Ltd.          Adjustments     Statements
                                                  --------         --------         --------         -----------     ----------
<S>                                               <C>              <C>              <C>              <C>              <C>
Sales                                             $ 13,935         $ 12,634         $  4,077                          $ 30,646

Operating costs and expenses:
          Cost of sales                              9,373            8,512            2,464                            20,349
          Research and development                   1,642              748               76                             2,466
          Marketing, general and administrative      3,689            4,532            1,537                             9,758
          Amortization of intangible assets                             189                          $   (189)(b)
                                                                                                          127 (b)          127
                                                  --------         --------         --------         --------         --------

                                                    14,704           13,981            4,077              (62)          32,700
                                                  --------         --------         --------         --------         --------

Operating loss                                        (769)          (1,347)         --                    62           (2,054)

Interest income                                        453                                               (381)(a)           72

Interest expense                                                       (387)             (11)             398 (d)
                                                                                                          (95)(d)          (95)
                                                  --------         --------         --------         --------         --------

Income (loss) before income taxes                     (316)          (1,734)             (11)             (16)          (2,077)

Benefit for income taxes                                36                                                669 (e)          705
                                                  --------         --------         --------         --------         --------

Net income (loss)                                 $   (280)        $ (1,734)        $    (11)        $    653         $ (1,372)
                                                  ========         ========         ========         ========         ========


Loss per share                                      $(0.02)                                                             $(0.09)
                                                  ========                                                            ========

Shares used in computing loss per share             14,704                                                              14,704
                                                  ========                                                            ========
</TABLE>



See accompanying notes to Pro Forma Condensed Financial Statements.

<PAGE>
 
                               Amtech Corporation
         Notes to Pro Forma Condensed Financial Statements (Unaudited)

1.   General
     -------

     The purchase of certain of Cardkey's assets and the assumption of certain
     of Cardkey's liabilities will be accounted for as a purchase. Amtech has
     agreed to pay the owner of Cardkey the sum of (I) the net book value of
     Cardkey's assets to be acquired and liabilities to be assumed as determined
     from Cardkey's March 31, 1995 balance sheet, (ii) $165,000 in cash, and
     (iii) a $6 million promissory note (the Amtech Note), bearing no interest,
     payable in two $3 million installments on March 31, 1997 and 1988. Amtech,
     at its option, may, in lieu of its March 31, 1998 payment, make a $2
     million payment on March 31, 1996. The purchase price component which is
     based on Cardkey's net book value is subject to adjustment based on an
     audit of the July 31, 1995 balance sheets of Cardkey.

     Amtech estimates the following costs as a result of the Purchase (in
     thousands):


<TABLE>
 
<S>                                      <C>
          Investment advisor             $250
          Legal, accounting and other
               professional fees          200
          State tax and filing fees       200
          Miscellaneous                    50
                                         ----
                                         $700
                                         ====
</TABLE>


     The purchase price has been allocated to the assets and liabilities of
     Cardkey for purposes of the pro forma condensed combined balance sheet
     based on preliminary estimates of fair values. These estimates were
     determined by Amtech management based primarily on information furnished by
     management of Cardkey. The final allocation of the purchase price will be
     based on various information yet to be accumulated. Accordingly, the
     information presented herein may differ from the actual purchase price
     allocation. Specifically, following an independent appraisal, Amtech
     expects to charge third quarter earnings for acquired in-process research
     and development which will result in a corresponding decrease in
     intangibles reported on the balance sheet. An estimate of such amount has
     not been reflected in the accompanying pro forma condensed financial
     statements.

<PAGE>
 
2.   Pro Forma Condensed Combined Balance Sheet
     ------------------------------------------

     The accompanying pro forma condensed combined balance sheet assumes the
     Purchase was consummated on March 31, 1995 and reflects the following pro
     forma adjustments:

          (a)  To eliminate certain Cardkey assets and liabilities not
               purchased/assumed by Amtech.

          (b)  To eliminate Cardkey's historical stockholders' equity balances.

          (c)  To record the aggregate cost of the Purchase of $23.4 million as
               follows (in thousands):

 
               Cash consideration (based on March 31,
               1995 net book value of Cardkey net assets
               and liabilities purchased/assumed plus
               $165,000)                                       $18,537
 
               Note payable (at present value using a
               9% interest rate, assuming a March 31, 1996
               payment)                                          4,206
 
               Transaction costs                                   700
                                                               -------
                                                               $23,443
                                                               =======

3.   Pro Forma Condensed Combined Statements of Operations
     -----------------------------------------------------

     The pro forma condensed combined statements of operations have been
     prepared as if the Purchase was consummated as of January 1, 1994 and
     reflect the following pro forma adjustments:

          (a)  To record the reduction of Amtech interest income to reflect the
               reduction of Amtech cash and equivalents and marketable
               securities caused by (I) the cash consideration paid for the
               Purchase, and (ii) the assumed funding of Cardkey's operating
               losses for such periods.

          (b)  To eliminate amortization of Cardkey intangible assets not
               acquired by Amtech and to record the amortization of excess cost
               of net assets acquired resulting from the Purchase over an
               assumed life of ten years.

          (c)  To record the reduction in Cardkey interest income earned on
               assets not purchased by Amtech.

<PAGE>
 
          (d)  To eliminate Cardkey interest expense related to intercompany
               debt not assumed by Amtech as part of the Purchase, and to record
               interest expense on the Amtech Note.

          (e)  To eliminate Cardkey's income tax benefit recorded for periods
               presented and to record an income tax benefit as if Cardkey was
               included in the Amtech consolidated group for such periods.

4.   Pro Forma Combined Earnings (Loss) Per Share
     --------------------------------------------

     The pro forma combined earnings (loss) per share is computed by dividing
     combined pro forma net income (loss) by the weighted average number of
     common shares and common equivalent shares, if dilutive. Common equivalent
     shares assume the exercise of all dilutive outstanding stock options using
     the treasury stock method. Fully diluted loss per share is not materially
     different from primary loss per share as presented.