**Exhibit 4.1**

 

EXECUTION COPY

 

 

**CREDIT AGREEMENT**

**(U.S. $100,000,000)**

 

Dated as of September 30, 2004

 

among

 

**UNOVA, INC.,**

**UNOVA INDUSTRIAL AUTOMATION SYSTEMS, INC.,**

**INTERMEC TECHNOLOGIES CORPORATION,**

**INTERMEC INTERNATIONAL INC.,**

**INTERMEC TECHNOLOGIES MANUFACTURING, LLC,**

**INTERMEC IP CORP.** and **UNOVA IPCORP.**

 

as Borrowers,

 

**THE LENDERS WHICH ARE PARTIES HERETO**

 

and

 

**KEYBANK NATIONAL ASSOCIATION**

 

as Administrative Agent, Lead Arranger and Book Manager

 

and

 

**KEYBANK NATIONAL ASSOCIATION**

 

as LC Issuer

 

 

----

 

**TABLE OF CONTENTS**

 
| Section 1 DEFINITIONS; ACCOUNTING TERMS;  GOVERNANCE.                             |   |
|-----------------------------------------------------------------------------------|--------|
|                                                                              |   |
| 1.1 Certain Defined Terms.                                                        |   |
| 1.2 Accounting Terms; Calculations.                                               |   |
| 1.3 Authorization of Borrower  Representative.                                    |   |
| 1.4 Construction of Terms Generally.                                              |   |
| 1.5  USA Patriot Act Notification; Representations and Undertaking.               |   |
| (a) Borrower’s Notification and  Representation.                             |   |
| (b) Lenders’ Certification.                                                  |   |
|                                                                              |   |
| Section 2 TERMS OF THE CREDIT FACILITIES.                                         |   |
|                                                                              |   |
| 2.1  Revolving Credit Facility.                                                   |   |
| (a) Revolving Credit Loans.                                                       |   |
| (b) Revolving Credit Notes.                                                       |   |
| 2.2 Letter of Credit Facility.                                                    |   |
| (a) Issuance of Letters of Credit.                                                |   |
| (b) Form and Term of Letters of Credit.                                           |   |
| (c) Application with Respect to Letter of  Credit.                                |   |
| (d) Participation by Lenders in Letters of  Credit.                               |   |
| (e)  Reimbursement.                                                               |   |
| (f) Failure to Reimburse Drawings; Interest.                                      |   |
| (g) Obligations Absolute.                                                         |   |
| (h)  Liability of LC Issuer.                                                      |   |
| (i) LC Issuer Indemnity.                                                          |   |
| (j)  Termination of Letter of Credit Commitment.                                  |   |
| 2.3 Credit Requests.                                                              |   |
| (a) Credit Requests for Revolving Credit Loans.                                   |   |
| (b)  Requests and Conditions for Letters of Credit.                               |   |
| (c) Requests for Revolving Credit Borrowing Deemed Given.                         |   |
| 2.4 Funding of Revolving Credit Loans.                                            |   |
| (a) Notice and Funding.                                                           |   |
| (b) Disbursement of Funds Received.                                               |   |
| (c) Availability of Funds.                                                        |   |
| 2.5 Failure of Lender to Fund Revolving  Credit Loans or Purchase Participations. |   |
| (a) Continuing Obligation of the Borrowers.                                       |   |
| (b) Treatment of Lender Failing To Fund.                                          |   |
| (c) Continuing Obligation of Lenders to  Fund.                                    |   |
| 2.6 Affiliated Funding with respect to  Lenders.                                  |   |
| 2.7 Loan Account; Credits; Application of  Payments.                              |   |
| (a) Administrative Agent Maintenance of  Loan Account.                            |   |
| (b) Loan Account Charges\Credits; Reports.                                        |   |
| (c) Crediting and Application of Specific  Payments.                              |   |
| (d) Payments, Distributions, Treatment.                                           |   |
| (e)  Payment not on Business Day.                                                 |   |
| (f) Presumption of Payment in Full by the Borrowers.                              |   |
| 2.8 Repayment and Prepayments.                                                    |   |
| (a) Scheduled Repayments.                                                         |   |
| (b) Mandatory Prepayments.                                                        |   |

 
| 2.9 Reduction of Revolving Credit  Commitment. |   |
|------------------------------------------------|--------|

 

i

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| 2.10  Permitted Prepayments.                                           |   |
|------------------------------------------------------------------------|--------|
| 2.11 Interest Rate on Revolving Credit Loans.                          |   |
| (a)  Alternate Base Rate Loans.                                        |   |
| (b)  LIBOR Rate Loans.                                                 |   |
| (c) Default Interest.                                                  |   |
| (d) Failure of Borrower Representative to  Elect Interest Period.      |   |
| 2.12 Rate Conversion and Rate Continuation.                            |   |
| 2.13 Computations of Interest and Fees.                                |   |
| 2.14 Fees.                                                             |   |
| (a)  Facility Fee.                                                     |   |
| (b) Letter of Credit Fees.                                             |   |
| (c)  Other Fees                                                        |   |
| (d) Payment of Fees; Non-Refundable.                                   |   |
| (e) Unascertainable Rate; Increased Costs; Illegality.                 |   |
|                                                                   |   |
| Section 3 CONDITIONS PRECEDENT.                                        |   |
|                                                                   |   |
| 3.1 Satisfaction of Conditions Precedent on Closing Date.              |   |
| (a) Agreement and Other Loan Documents.                                |   |
| (b) Officer’s Certificate, Resolutions, Organizational Documents. |   |
| (c) Good Standing and Full Force and Effect Certificates.              |   |
| (d) Closing Certificate.                                               |   |
| (e) Legal Opinions.                                                    |   |
| (f) Closing and Legal Fees; Administrative Agent Fee Letter.           |   |
| (g)  Lien Searches.                                                    |   |
| (h) Perfection Certificate.                                            |   |
| (i) Perfection; Priority.                                              |   |
| (j) Insurance Policies.                                                |   |
| (k) Material Contracts.                                                |   |
| (l) Initial Letter of Credit Request.                                  |   |
| (m) Disbursement Direction Letter.                                     |   |
| (n) Termination of Existing Credit Agreement                           |   |
| (o) Deposit of Secured Bond Assets                                     |   |
| (p) Landlord/Bailee/Consignee Waivers                                  |   |
| (q) Bright & Lorig Documents.                                      |   |
| (r) Miscellaneous.                                                     |   |
| 3.2 Conditions Precedent to all Credit  Events.                        |   |
| (a) Representation Bringdown.                                          |   |
| (b) No Default; Compliance with Terms.                                 |   |
| (c)  No Material Adverse Change.                                       |   |
| (d) Confirmation of Asset Coverage.                                    |   |
|                                                                   |   |
| Section 4 REPRESENTATIONS AND WARRANTIES.                              |   |
|                                                                   |   |
| 4.1  Existence.                                                        |   |
| 4.2 Authorization.                                                     |   |
| 4.3 Enforceability.                                                    |   |
| 4.4 Maintenance of Insurance.                                          |   |
| 4.5 Title to Collateral; Liens; Transfers.                             |   |
| 4.6 Lien Perfection and Priority.                                      |   |
| 4.7 Litigation; Proceedings.                                           |   |
| 4.8 Taxes.                                                             |   |
| 4.9 Consents; Approvals.                                               |   |
| 4.10 Lawful Operations.                                                |   |
| 4.11 Environmental Compliance.                                         |   |

 

ii

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| 4.12 Environmental Claims and Restrictions.              |   |
|----------------------------------------------------------|--------|
| 4.13 ERISA.                                              |   |
| 4.14 Agreements; Adverse Obligations; Labor  Disputes.   |   |
| 4.15 Financial Statements; Projections.                  |   |
| (a) Financial Statements.                                |   |
| (b) Financial Projections.                               |   |
| 4.16 Intellectual Property.                              |   |
| 4.17  Structure; Capitalization.                         |   |
| 4.18 Value; Solvency.                                    |   |
| 4.19 Investment Company Act Status.                      |   |
| 4.20  Regulation U/Regulation X Compliance.              |   |
| 4.21  Blocked Person.                                    |   |
| 4.22 Full Disclosure.                                    |   |
| 4.23 Acquisition Documents.                              |   |
|                                                     |   |
| Section 5 COVENANTS OF THE BORROWERS.                    |   |
|                                                     |   |
| 5.1 Reporting and Notice Covenants.                      |   |
| (a) Quarterly Financial Statements.                      |   |
| (b) Annual Financial Statements.                         |   |
| (c) Officer’s Certificate.                          |   |
| (d) Company Reports.                                     |   |
| (e) Annual Projections.                                  |   |
| (f) Asset Coverage Certificates.                         |   |
| (g) Other Information.                                   |   |
| (h) Notices.                                             |   |
| (i) Notice of Default under ERISA.                       |   |
| (j) Environmental Reporting.                             |   |
| (k) Multiemployer Plan Withdrawal  Liability.            |   |
| 5.2 Affirmative Covenants.                               |   |
| (a) Corporate Existence.                                 |   |
| (b) Financial Records.                                   |   |
| (c) Financial Examinations and Review.                   |   |
| (d) Compliance with Law.                                 |   |
| (e) Compliance with Environmental Laws.                  |   |
| (f) Properties.                                          |   |
| (g) Use of Proceeds.                                     |   |
| (h) Compliance with Terms of All Material  Contracts.    |   |
| (i)  Taxes.                                              |   |
| (j) Insurance.                                           |   |
| (k) License from Third Parties.                          |   |
| (l) Subsidiary Guaranties.                               |   |
| (m) Maintenance of Certain Accounts with KeyBank.        |   |
| (n) Pledge of IAS Foreign Subsidiaries.                  |   |
| (o) Acquisition Documents.                               |   |
| 5.3 Negative Covenants.                                  |   |
| (a) Consolidation, Merger, Sale and  Purchase of Assets. |   |
| (b) Credit Extensions; Prepayments.                      |   |
| (c)  Indebtedness.                                       |   |
| (d) Liens; Leases.                                       |   |
| (e)  Investments.                                        |   |
| (f) Distributions.                                       |   |
| (g) Change in Nature of Business.                        |   |
| (h) Charter Amendments.                                  |   |

 

iii

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| (i) Compliance with ERISA.                                                        |   |
|-----------------------------------------------------------------------------------|--------|
| (j) Regulation U Compliance.                                                      |   |
| (k) Accounting Changes.                                                           |   |
| (l) Arm’s-Length Transactions.                                               |   |
| 5.4 Financial Covenants.                                                          |   |
| (a) Consolidated Leverage  Ratio.                                                 |   |
| (b) Consolidated Interest Coverage Ratio.                                         |   |
| (c) Minimum Consolidated Net Worth.                                               |   |
|                                                                              |   |
| Section  6 EVENTS OF DEFAULT.                                                     |   |
|                                                                              |   |
| 6.1 Payment.                                                                      |   |
| 6.2 Representations and Warranties.                                               |   |
| 6.3 Reporting and Notice Provisions; Violation of Certain Affirmative  Covenants. |   |
| 6.4 Violation of Certain Other Covenants  and Financial Covenants.                |   |
| 6.5  Cross-Default.                                                               |   |
| 6.6 Destruction of Collateral.                                                    |   |
| 6.7  Change of Control.                                                           |   |
| 6.8 Failure of Enforceability of this  Agreement, Loan Document; Security.        |   |
| 6.9 ERISA.                                                                        |   |
| 6.10 Judgments.                                                                   |   |
| 6.11 Financial Impairment.                                                        |   |
|                                                                              |   |
| Section  7 REMEDIES.                                                              |   |
|                                                                              |   |
| 7.1  Acceleration; Termination.                                                   |   |
| 7.2 Automatic Acceleration and Termination.                                       |   |
| 7.3 General Rights and Remedies of the  Administrative Agent and the Lenders.     |   |
| 7.4 Additional Remedies.                                                          |   |
| (a) Possession of Collateral.                                                     |   |
| (b) Foreclosure of Liens.                                                         |   |
| (c) Disposition of Collateral.                                                    |   |
| (d) Application of Collateral; Application of Liquidation Proceeds.               |   |
| 7.5 Set-off.                                                                      |   |
| 7.6 Actions in Respect of the Letters of  Credit Upon Default.                    |   |
| 7.7 Authority to Execute Transfers.                                               |   |
| 7.8 Limited License to Liquidate.                                                 |   |
| 7.9  Equalization.                                                                |   |
| 7.10 Remedies Cumulative.                                                         |   |
| 7.11 Appointment of Attorney-in-Fact.                                             |   |
|                                                                              |   |
| Section  8 THE ADMINISTRATIVE AGENT AND LEAD ARRANGER.                            |   |
|                                                                              |   |
| 8.1 The Administrative Agent.                                                     |   |
| 8.2 Nature of Appointment.                                                        |   |
| 8.3 Administrative Agent as Lender; Other Transactions.                           |   |
| 8.4 Instructions from Lenders.                                                    |   |
| 8.5 Lender’s Diligence.                                                      |   |
| 8.6 No Implied Representations.                                                   |   |
| 8.7 Sub-Administrative Agents.                                                    |   |
| 8.8 Administrative Agent’s Diligence.                                        |   |
| 8.9  Notice of Default.                                                           |   |
| 8.10 Administrative Agent’s Liability.                                       |   |

 

iv

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| 8.11 Administrative Agent’s and Lead  Arranger’s Indemnity. |   |
|-----------------------------------------------------------------------|--------|
| 8.12 Resignation of Administrative Agent.                             |   |
| 8.13 No Implied Representations.                                      |   |
|                                                                  |   |
| Section  9 BORROWER GUARANTY.                                         |   |
|                                                                  |   |
| 9.1 Borrower Cross-Guaranty; Maximum  Liability.                      |   |
| 9.2 Guaranty Unconditional.                                           |   |
| 9.3 Discharge; Reinstatement.                                         |   |
| 9.4 Waiver.                                                           |   |
| 9.5 Stay of Acceleration.                                             |   |
| 9.6 Subrogation and Contribution Rights.                              |   |
| 9.7 Guaranteed Obligation and Contribution  Payments.                 |   |
| (a)  Pro Rata Sharing.                                                |   |
| (b) Deficiency.                                                       |   |
|                                                                  |   |
| Section  10 TRANSFERS AND ASSIGNMENTS.                                |   |
|                                                                  |   |
| 10.1 Successors and Assigns.                                          |   |
| 10.2 Transfer of Revolving Credit  Commitments.                       |   |
| 10.3 Maintenance of Register.                                         |   |
| 10.4  Participations.                                                 |   |
| 10.5 Pledge of Interests.                                             |   |
| 10.6 Revolving Credit Notes.                                          |   |
| 10.7  USA Patriot Act.                                                |   |
| 10.8 Replacement of Certain Lenders.                                  |   |
| 10.9 Replacement of Non-consenting Lenders.                           |   |
|                                                                  |   |
| Section  11 CONFIDENTIALITY.                                          |   |
|                                                                  |   |
| Section  12 INDEMNITIES.                                              |   |
|                                                                  |   |
| 12.1  Increased Costs.                                                |   |
| 12.2 Risk-Based Capital.                                              |   |
| 12.3 Taxes.                                                           |   |
| (a) Taxes; Withholding; Indemnification of  Taxes Paid.               |   |
| (b) Delivery of IRS Certificates by  Lenders.                         |   |
| (c)  Refunds of Taxes.                                                |   |
| (d) Avoiding Negative Tax Consequences.                               |   |
| (e) Tax Benefit.                                                      |   |
| 12.4 Losses.                                                          |   |
| 12.5 Indemnification for Requests.                                    |   |
| 12.6  General Indemnity.                                              |   |
| 12.7 Certificate for Indemnification.                                 |   |
|                                                                  |   |
| Section  13 GENERAL.                                                  |   |
|                                                                  |   |
| 13.1 Amendments and Waivers.                                          |   |
| 13.2 Effective Agreement; Binding Effect.                             |   |
| 13.3 Costs and Expenses.                                              |   |
| 13.4 Survival of Provisions.                                          |   |
| 13.5 Sharing of Information.                                          |   |
| 13.6 Interest Rate Limitation.                                        |   |
| 13.7 Limitation of Liability.                                         |   |
| 13.8 Illegality.                                                      |   |
| 13.9 Notices.                                                         |   |

 

v

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| 13.10  Governing Law.                                                     |   |
|---------------------------------------------------------------------------|--------|
| 13.11  Entire Agreement.                                                  |   |
| 13.12 Execution in Counterparts; Execution by Facsimile.                  |   |
| 13.13 Waiver of Jury Trial and Submission  to Non-Exclusive Jurisdiction. |   |

 

vi

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**EXHIBITSAND SCHEDULES**

 
| Exhibit A   | (Form of  Revolving Credit Note)                                                          |   |
|-------------|-------------------------------------------------------------------------------------------|--------|
| Exhibit B-1 | (Form of  Credit Request)                                                                 |   |
| Exhibit B-2 | (Form of  Letter of Credit Request)                                                       |   |
| Exhibit C   | (Form of  Rate Conversion/Continuation Request)                                           |   |
| Exhibit D-1 | (Form of  Security Agreement - Borrower)                                                  |   |
| Exhibit D-2 | (Form of  Security Agreement - Subsidiary Guarantor)                                      |   |
| Exhibit D-3 | (Form of  Subsidiary Guaranty)                                                            |   |
| Exhibit E-1 | (Form of  Collateral Assignment of Security Interest in Patents and Patent  Applications) |   |
| Exhibit E-2 | (Form of  Collateral Assignment of Security Interest in Trademarks and Licenses)          |   |
| Exhibit E-3 | (Form of  Collateral Assignment of Security Interest in Copyrights)                       |   |
| Exhibit F   | (Reserved)                                                                                |   |
| Exhibit G   | (Form of  Existing Lender Payout)                                                         |   |
| Exhibit H   | (Form of  Asset Coverage Certificate)                                                     |   |
| Exhibit I   | (Form of  Advertising Permission Letter)                                                  |   |
| Exhibit J   | (Form of  Assignment and Assumption)                                                      |   |
| Exhibit K-1 | (Form of  Landlord Waiver)                                                                |   |
| Exhibit K-2 | (Form of  Warehouseman/Bailee Waiver)                                                     |   |
| Exhibit K-3 | (Reserved)                                                                                |   |
| Exhibit K-4 | (Reserved)                                                                                |   |
| Exhibit L-1 | (Form of  Limited License Agreement - Borrower and Subsidiary Guarantor)                  |   |
| Exhibit L-2 | (Reserved)                                                                                |   |
| Exhibit M   | (Form of  Securities Account Control Letter)                                              |   |
| Exhibit N   | (Form of  Deposit Account Control Letter)                                                 |   |
| Exhibit O   | (Form of  Joinder Agreement)                                                              |   |
|        |                                                                                      |   |
| Annex I     | Commitments                                                                               |   |
| Annex II    | Memorandum  of Closing                                                                    |   |
| Annex III   | Disclosure  Schedule                                                                      |   |
| Annex IV    | Perfection  Certificate                                                                   |   |

 

vii

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**CREDIT AGREEMENT**

**U.S. $100,000,000**

 

**Dated as of September 30, 2004**

 

**UNOVA, INC.**, a Delaware corporation, **UNOVA INDUSTRIAL AUTOMATION SYSTEMS, INC**., a Delawarecorporation, **INTERMEC TECHNOLOGIES CORPORATION**,a Washington corporation, **INTERMEC INTERNATIONALINC.**, a****Washingtoncorporation,**INTERMEC TECHNOLOGIES MANUFACTURING, LLC,**aWashington limited liability company, **INTERMEC IP CORP**.,a Delaware corporation, and **UNOVA IP CORP**.,a Delaware corporation, each a Borrower and collectively as the Borrowers, thefinancial institutions listed on the signature pages of this Agreement, as theLenders, **KEYBANK NATIONAL ASSOCIATION**, anational banking association, as the Administrative Agent for the Lenders, and **KEYBANK NATIONAL ASSOCIATION,**a national bankingassociation, as the LC Issuer, hereby agree as follows:

 

# **Section 1**                                             DEFINITIONS; ACCOUNTING TERMS; GOVERNANCE.

 

**1.1          Certain Defined Terms****.**  Certain UniformCommercial Code terms used in this Agreement have been defined in the SecurityAgreements executed by each Borrower and any Subsidiary Guarantor.  As used in this Agreement and all other LoanDocuments, the following terms shall have the meanings (such meanings to beequally applicable to both the singular and plural forms of the terms defined)set forth below:

 

**“Accumulated Funding Deficiency”**has the meaning ascribed thereto in Section 302(a)(2) of ERISA.

 

“**Acquisition**”means and includes (i) any acquisition on a going concern basis (bypurchase of fee title) of any facility and/or business operated by a Personwhich is not a Subsidiary of a Borrower and (ii) any acquisition of all orsubstantially all (but in all cases greater than or equal to 80%) of theoutstanding equity or other similar interests in any Person that is not anatural Person (whether by merger, stock purchase, creation of a corporatejoint venture or otherwise).

 

“**Acquisition Documents**”means any and all documents executed and delivered in connection with aPermitted Acquisition including, without limitation, any subordinationagreement executed in connection therewith.

 

**“Adjustment Date”**means: (a) with respect to each of the first three Fiscal Quarters ofUNOVA, Inc. in each Fiscal Year, the date that is the first day of the monthimmediately succeeding the day on which the Borrower Representative deliversthe financial statements required hereunder to be delivered with respect tosuch Fiscal Quarter, together with the Officer’s Certificate required to befurnished by the Borrowers with such financial statements pursuant to (andcomplying with) Section 5.1(c),and (b) with respect to the last Fiscal Quarter of UNOVA, Inc. in eachFiscal Year, the date that is first day of the month immediately succeeding theday on which the Borrower Representative delivers the audited financialstatements required to be delivered with respect to such Fiscal Year end,together with the Officer’s Certificate required to be furnished by theBorrower Representative with such financial statements pursuant to (andcomplying with) Section 5.1(c).

 

**“Administrative Agent”**means KeyBank and its successors or assigns, each in its capacity asAdministrative Agent for the Lenders.

 

1

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**“Administrative Agent Fee Letter”**means that certain letter executed by the UNOVA, Inc. and the AdministrativeAgent, dated June 18, 2004.

 

**“Advantage”** meansany payment (whether made voluntarily or involuntarily, by offset of anydeposit or other Indebtedness or otherwise) received by a Lender or anAffiliate of a Lender in respect of Obligations if the payment results in anyother Lender’s having more than its Pro Rata Share of the Obligations (otherthan Designated Hedge Obligations) in question.

 

**“Affiliate”** means,with respect to a specified Person, any other Person: (a) which directlyor indirectly through one or more intermediaries controls, or is controlled by,or is under common control with such Person (“control” meaning the possession,directly or indirectly, of the power to direct or cause the direction of themanagement and policies of a Person, whether through the ownership of votingsecurities, by contract or otherwise), (b) which beneficially owns orholds with power to vote fifteen percent (15%) or more of any class of the votingstock or similar interest of such Person, or (c) fifteen percent (15%) ormore of the voting stock or similar interest of which other Person isbeneficially owned or held by such Person.

 

**“Agreement”** meansthis Credit Agreement, as amended, restated, supplemented or otherwise modifiedfrom time to time.

 

**“Alternate Base Rate”**means, for any day, a rate per annum equal to the higher of: (a) the rateof interest which is established from time to time by KeyBank at its principaloffice in Cleveland, Ohio as its “prime rate” or “base rate” in effect, suchrate to be adjusted automatically, without notice, as of the opening ofbusiness on the effective date of any change in such rate (it being agreedthat: (i) such rate is not necessarily the lowest rate of interest thenavailable from KeyBank on fluctuating rate loans and (ii) such rate may beestablished by KeyBank by public announcement or otherwise) and (b) theFederal Funds Effective Rate in effect on such day plus one half of onepercent (1/2 of 1%).

 

**“Alternate Base Rate Loan”**  means a Revolving Credit Loan, denominated inDollars, which bears interest as provided in Section 2.11(a) of thisAgreement.

 

**“Alternate Base Rate Borrowing”**means a Revolving Credit Borrowing consisting of Alternate Base Rate Loans.

 

**“Anti-Terrorism Laws”**shall mean any laws relating to terrorism or money laundering, includingExecutive Order No. 13224, the USA Patriot Act, the Laws comprising orimplementing the Bank Secrecy Act, and the laws administered by the UnitedStates Treasury Department’s Office of Foreign Asset Control (as any of theforegoing laws may from time to time be amended, renewed, extended, orreplaced).

 

**“Applicable Margin”**means (X) from the Closing Date until but excluding the first Adjustment Datecommencing after December 31, 2004: (i) with respect to Revolving CreditBorrowings, one hundred basis points (100 bps) per annum with respect toAlternate Base Rate Loans comprising Revolving Credit Borrowings and twohundred basis points (200 bps) per annum with respect to LIBOR Rate Loanscomprising Revolving Credit Borrowings and (ii) with respect to the FacilityFee, fifty basis points (50 bps) per annum and (Y) with respect to anyAdjustment Date commencing after December 31, 2004 until but excluding the followingAdjustment Date, the percentage per annum applicable to Alternate Base RateLoans or LIBOR Rate Loans comprising Revolving Credit Borrowings, and theFacility Fee, as the case may be, corresponding to

 

2

----

 

level of theConsolidated Leverage Ratio of UNOVA, Inc. and its Subsidiaries for the FiscalQuarter immediately preceding such Adjustment Date as determined by referenceto the following grid:

 
| **Level** | ** ** | **Consolidated  Leverage  Ratio**        | ** ** | **Revolver  ABR  Margin** | ** ** | **Revolver  LIBOR  Rate  Margin** | ** ** | **Facility  Fee** | ** ** |
|-----------|------------|------------------------------------------|------------|---------------------------|------------|-----------------------------------|------------|-------------------|------------|
| I         |       | < 1.50 to 1.00                        |       | 50 bps                    |       | 150 bps                           |       | 37.5 bps          |       |
| II        |       | > 1.50 to 1.00 but  < 2.00 to 1.00 |       | 75 bps                    |       | 175 bps                           |       | 37.5 bps          |       |
| III       |       | > 2.00 to 1.00 but  < 2.50 to 1.00 |       | 100 bps                   |       | 200 bps                           |       | 50 bps            |       |
| IV        |       | > 2.50 to 1.00                        |       | 150 bps                   |       | 250 bps                           |       | 50 bps            |       |

 

“**Approved Fund**” means any Fund that isadministered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) anentity or an Affiliate of an entity that administers or manages a Lender.

 

“**Approved Securities Intermediary**” meansa Securities Intermediary (as defined in the UCC) or Commodity Intermediary (asdefined in the UCC) reasonably acceptable to the Administrative Agent and withrespect to which a Borrower has delivered to the Administrative Agent anexecuted Securities Account Control Letter.

 

**“Asset Coverage”**means, at any date of determination, an amount (based on the last AssetCoverage Certificate delivered in accordance with the terms hereof) equal to:

 

(w)          seventy-five percent (75%) of theaggregate book value (net of applicable reserves in accordance with GAAP) ofall Accounts of the Borrowers and any Subsidiary Guarantors which are comprisedof a right to payment for goods sold or leased or for services rendered in theordinary course of business (other than Excluded Accounts); plus

 

(x)            fifty percent (50%) of the aggregatebook value (net of applicable reserves in accordance with GAAP) of allInventory of the Borrowers and any Subsidiary Guarantors (other than ExcludedInventory); plus

 

(z)            the lesser of: (i) one hundred percent(100%) of the aggregate book value (net of applicable reserves in accordancewith GAAP) of all Equipment of the Borrowers and any Subsidiary Guarantors usedin the process of manufacturing or processing Inventory (other than ExcludedM&E) or (ii) Ten Million Dollars ($10,000,000).

 

**“Asset Coverage Certificate”**means, with respect to any Fiscal Quarter, a certificate reflecting thecalculation of Asset Coverage, including calculations showing the ExcludedAccounts, Excluded M&E and Excluded Inventory as of the last Business Dayof such Fiscal Quarter and otherwise reasonably satisfactory to theAdministrative Agent and substantially in the form attached hereto as Exhibit H.

 

“**Assignment and Assumption**” means an assignmentand assumption entered

 

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into by aLender and an Eligible Assignee (with the consent of any party whose consent isrequired by Section 10), and accepted by the Administrative Agent, insubstantially the form of Exhibit J or any other form approved by theAdministrative Agent.

 

“**Assumed Tax Rate**” means, for or inrespect of any Tax Period (as defined in the definition of “Permitted TaxDistribution”), the greater of (i) fifty percent (50%) or (ii) the highestmarginal tax rate applicable to individuals for such Tax Period plus tenpercent (10%).

 

**“Barclay’s Facility”**means the facility provided by Barclays Bank PLC to certain ForeignSubsidiaries of UNOVA, Inc. pursuant to that certain £15,000,000 FacilityLetter, dated February 9, 2004, that certain Ancillary Banking FacilitiesLetter, dated February 9, 2004, and that certain £10,000,000 Facility Letter,dated February 9, 2004, in each case, as amended, supplemented or otherwisemodified from time to time and, in each case, including the other documentsdelivered in connection therewith.

 

**“Blocked Person”**shall have the meaning assigned to such term in Section 4.21 hereof.

 

**“Borrower Guaranteed Obligations”**has the meaning set forth in Section 9.1.

 

“**Borrower Guarantor**” means any Borrowerwith respect to the Obligations owing to the Lenders by the other Borrowers.

 

“**Borrower Guaranty**”means the joint and several obligation of each Borrower Guarantor to pay theObligations of the other Borrowers pursuant to Section 9 of this Agreement.

 

**“Borrower Representative”**means UNOVA, Inc., a Delaware corporation.

 

**“Borrowers”** meanscollectively, UNOVA, Inc., a Delaware corporation, UNOVA Industrial AutomationSystems, Inc., a Delaware  corporation,Intermec Technologies Corporation, a Washington corporation, IntermecInternational Inc., a Washington corporation, Intermec TechnologiesManufacturing, LLC, a Washington limited liability company, Intermec IP Corp.,a Delaware corporation, and UNOVA IP Corp., a Delaware corporation, and anyfuture Domestic Subsidiary that executes and delivers a Joinder Agreement.

 

“**bps**” means basis points where one basispoint represents one one-hundredth of a percent (1/100 of 1%).

 

**“Business Day”** means(i) a day of the year on which the Administrative Agent is not required orauthorized to close in the city in which the applicable Payment Office of theAdministrative Agent is located and (ii) if the applicable Business Dayrelates to LIBOR Rate Loans, a day of the year which is a Business Daydescribed in clause (i) above and which is also a day on which dealings inDollar deposits are carried on in the London interbank market and banks areopen for business in London.

 

**“Capital Expenditures”**means those capital expenditures which are required to be capitalized asproperty, plant or equipment in accordance with GAAP.

 

**“Capitalization”**means, in respect of any Person, the net book value of such Person minus(i) the aggregate amount of the Accounts of such Person that are owed byAffiliates of such Person, plus (ii) the aggregate amount of theAccounts of the Affiliates

 

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of such Personthat are owed to such Person and minus (iii) the net book value of suchPerson’s equity interest in its Subsidiaries, in each case as determined on aconsolidated basis in accordance with GAAP.

 

“**Capitalized Leases**” means, in respectof any Person, any lease of property imposing obligations on such Person, aslessee of such property, which are required in accordance with GAAP to becapitalized on a balance sheet of such Person.

 

**“CERCLA”** means theComprehensive Environmental Response, Compensation and Liability Act, asamended, 42 U.S.C. §§ 9601 et seq.

 

**“Certificate of Exemption”**shall have the meaning set forth in Section 12.3(b)(i) of this Agreement.

 

**“Change of Control”**means any of the following:

 

(a) an acquisition by any individual, entity or group (within themeaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of 1934) ofbeneficial ownership (within the meaning of Rule 13-d promulgated under theExchange Act) of 30 percent or more of either (i) the then outstanding sharesof common stock of UNOVA, Inc. (the “Outstanding UNOVA, Inc. Common Stock”),or (ii) the combined voting power of the then outstanding voting securities ofUNOVA, Inc. entitled to vote generally in the election of directors (the “OutstandingUNOVA, Inc. Voting Securities”), excluding, however, the followingacquisitions of Outstanding UNOVA, Inc. Common Stock and Outstanding UNOVA,Inc. Voting Securities: (A) any acquisition by UNOVA, Inc. or any entitydirectly or indirectly controlled by UNOVA, Inc., and (B) any acquisition byany employee benefit plan (or related trust) sponsored or maintained by UNOVA,Inc. or any entity directly or indirectly controlled by UNOVA, Inc.; or

 

(b)           individuals who, asof the Closing Date, constitute the Board of Directors (the “UNOVA Board”)of UNOVA, Inc. (the “Incumbent Board”) cease for any reason toconstitute at least a majority of such UNOVA Board; provided, however, that anyindividual who becomes a member of such UNOVA Board subsequent to the ClosingDate whose election, or nomination for election by UNOVA, Inc.’s shareholders,was approved by a vote of at least a majority of the directors then comprisingthe Incumbent Board shall be considered as though such individual were a memberof the Incumbent Board, but provided further, that any such individual whoseinitial assumption of office occurs as a result of either an actual orthreatened election contest (as such terms are used in Rule 14a-11 ofRegulation 14A promulgated under the Securities Exchange Act) or other actualor threatened solicitation of proxies or consents by or on behalf of a Personother than the UNOVA Board shall not be so considered as a member of theIncumbent Board.

 

**“Charter Documents”**means, as to any Person (other than a natural person), the charter, certificateor articles of incorporation or organization, by-laws, regulations, general orlimited partnership agreement, certificate of limited partnership, certificateof formation, operating agreement, or other similar organizational or governingdocuments of such Person.

 

“**CIP Regulations**” has the meaningspecified in Section 8.13 of this Agreement.

 

**“Closing Date”** meansthe date and the time as of which this Agreement is effective.

 

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**“Code”** means theInternal Revenue Code of 1986, as amended.

 

**“Collateral”** meansall personal property assets of each of the Borrowers and the SubsidiaryGuarantors in which a security interest or Lien is granted to theAdministrative Agent for the benefit of the Lenders pursuant to the respectiveSecurity Agreement of such Borrower or such Subsidiary Guarantor, as the casemay be, provided, however, that in no event shall any Borrower orSubsidiary Guarantor be required to pledge more than 65% of the capital stockof a Subsidiary that is not a Domestic Subsidiary and provided further that inno event shall any Borrower or Subsidiary Guarantor be required to cause thepledge of any capital stock of any Subsidiary of any Foreign Subsidiary.

 

**“Consolidated Amortization Expense”**means, with respect to a Person, for any period, all amortization expenses ofsuch Person and its consolidated Subsidiaries during such period, as determinedon a consolidated basis in accordance with GAAP.

 

**“Consolidated Depreciation Expense”**means, with respect to a Person, for any period, all depreciation expenses ofsuch Person and its consolidated Subsidiaries during such period, as determinedon a consolidated basis in accordance with GAAP.

 

**“Consolidated EBIT”**means, with respect to a Person, for any period, (a) Consolidated NetIncome of such Person and its consolidated Subsidiaries for such period; plus(b) to the extent taken into account for such period in determining suchConsolidated Net Income, the sum (without duplication) of:(i) Consolidated Interest Expense of such Person and its consolidatedSubsidiaries for such period, (ii) Consolidated Income Tax Expense of suchPerson and its consolidated Subsidiaries for such period, (iii) anynon-recurring, non-cash losses and charges for such period (including, theafter-tax non-cash loss, if any, from the sale or other disposition of theIndustrial Automation System Segment), (iv) non-cash compensation expenserealized from the grant of stock appreciation, stock options, or other similarrights to officers, directors and other employees minus (c) the cashpayments arising during such period related to the non-cash compensationexpense described in clause (b)(iv) above; all as determined on a consolidatedbasis in accordance with GAAP.

 

**“Consolidated EBITDA”**means, with respect to a Person, for any period, (a) Consolidated EBIT ofsuch Person and its consolidated Subsidiaries for such period; plus(b) to the extent taken into account for such period in determining suchConsolidated EBIT, the sum (without duplication) of: (i) ConsolidatedDepreciation Expense of such Person and its consolidated Subsidiaries for suchperiod and (ii) Consolidated Amortization Expense of such Person and itsconsolidated Subsidiaries for such period.

 

**“Consolidated Income Tax Expense”**means, with respect to a Person, for any period, all taxes (based on the netincome of such Person and its consolidated Subsidiaries) paid in cash or accruedduring such period (including, without limitation, any penalties and interestwith respect thereto and net of any tax refunds received during such period),all as determined on a consolidated basis in accordance with GAAP.

 

**“Consolidated Interest Coverage Ratio”**means,with respect to a Person, for any Testing Period, the ratio of: (x)Consolidated EBIT for such period to (y) the Consolidated InterestExpense for such Testing Period to the extent paid in cash during said period,all as determined on a consolidated basis in accordance with GAAP.

 

**“Consolidated Interest Expense”**means, with respect to a Person, for any period, (a) the amount of interestexpense of such Person and its consolidated

 

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Subsidiariesduring such period paid in cash or accrued during such period, all asdetermined on a consolidated basis in accordance with GAAP, plus (b) theinterest payment portion of any Capitalized Lease rental payment of such Personand its consolidated Subsidiaries paid in cash or accrued during such period,all as determined on a consolidated basis in accordance with GAAP.

 

**“Consolidated Leverage Ratio**” means, with respectto a Person, as at the end of any Fiscal Quarter, the ratio of: (a) theaggregate principal amount of the Consolidated Net Debt of such Person and itsconsolidated Subsidiaries outstanding as of the end of such Fiscal Quarter to(b) the Consolidated EBITDA of such Person and its consolidated Subsidiariesfor the Testing Period then ended.

 

**“Consolidated Net Debt”**means, with respect to a Person, at any date of determination, withoutduplication (a) Consolidated Total Funded Debt less (b) the sum of (i) onehundred percent (100%) of the cash and cash equivalents maintained or ondeposit in the United States and (ii) twenty percent (20%) of the cash and cashequivalents maintained or on deposit outside of the United States.

 

**“Consolidated Net Income”**means, with respect to a Person, for any period, the net income (or loss) ofsuch Person and its consolidated Subsidiaries for such period as determined ona consolidated basis in accordance with GAAP.

 

**“Consolidated Net Worth”**means, with respect to a Person, at any time, the sum of the total assets ofsuch Person and its Subsidiaries, on a consolidated basis, minus the sumof the total liabilities of such Person and its Subsidiaries, on a consolidatedbasis in accordance with GAAP, provided, however, that suchamount shall exclude (i) the after-tax, non-cash impact of the sale of theIndustrial Automation System Segment (or any part thereof) and (ii) the sum of(x) non-cash compensation expense realized from the grant of stockappreciation, stock options, or other similar rights to officers, directors andother employees minus (y) the cash payments arising during such periodrelated to such non-cash compensation expense.

 

“**Consolidated Total Funded Debt**”  means, with respect to a Person, at any dateof determination, without duplication, all Indebtedness of such Person and itsconsolidated Subsidiaries which consists of: (a) Indebtedness for BorrowedMoney (b) the deferred purchase price of capital assets or services which inaccordance with GAAP would be shown on the liability side of a consolidatedbalance sheet of such Person and its consolidated Subsidiaries, (c) obligationswith respect to Capitalized Leases, (d) the present value, determined on thebasis of the implicit interest rate, of all basic rental obligations under allsynthetic leases (i.e. leases accounted for by the lessee as operating leasesunder which the lessee is the “owner” of the leased property for Federal incometax purposes) to the extent not cash collateralized, (e) all obligations ofsuch Person as an account party in respect of letters of credit and banker’sacceptances (in each case valued at the stated face amount thereof), all asdetermined on a consolidated basis in accordance with GAAP.

 

**“Copyrights”** means,with respect to any Borrower or Subsidiary, all original works of authorshipfixed in a tangible medium, published or unpublished, and any United Statescopyrights, and registrations thereof and applications therefor, including allrenewals and extensions thereof, of such Borrower, whether now existing orhereafter acquired.

 

**“Credit Event”**means: (a)  the making of a Revolving Credit Loan by any Lender or(b) the issuance or extension of any Letter of Credit by the LC Issuer andthe

 

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participationby any Lender in the risk thereof.

 

**“Credit Request”**means a request for a Revolving Credit Borrowing made in accordance withSection 2.3, in the form attached hereto as Exhibit B-1 andincorporated herein by reference.

 

**“Deemed Credit Request”**has the meaning specified in Section 2.3(c) of this Agreement.

 

**“Default under ERISA”**means: (a) the occurrence or existence of a material Accumulated FundingDeficiency in respect of any Employee Benefit Plan (other than a MultiemployerPlan) within the scope of Section 302(a) of ERISA, or (b) any failureby any Borrower or any Subsidiary thereof to make a full and timely payment ofpremiums required by Section 4001 of ERISA in respect of any Employee BenefitPlan, or (c) the occurrence or existence of any material liability underSection 4062, 4063, 4064, 4069, 4201, 4217 or 4243 of ERISA in respect of anyEmployee Benefit Plan, or (d) the institution or existence of any actionfor the forcible termination of any such Employee Benefit Plan which is withinthe scope of Section 4001(a)(3) or (15) of ERISA.

 

**“Defaulting Lender”**means any Lender with respect to which a Lender Default is in effect.

 

“**Deposit Account****ControlLetter**” means a letter agreement, substantially in the form of Exhibit Nhereto (with such changes as may be reasonably agreed to by the AdministrativeAgent) or such other form in form and substance reasonably acceptable to theAdministrative Agent, executed by a Borrower and the Administrative Agent andacknowledged and agreed to by the relevant deposit account bank.

 

**“Designated Hedge Agreement”**means any Hedge Agreement (x) which has any Borrower as a party and (y)(i)which has any Lender or Affiliate of a Lender as the counterparty or (ii) whichhas any other Person as the counterparty and the Administrative Agent in suchcase has designated, in its sole discretion, pursuant to a written instrument,as a Designated Hedge Agreement.

 

**“Designated Hedge Creditor”**means the counterparty to any Hedge Agreement to which any Borrower is a partywhich Hedge Agreement has been designated by the Administrative Agent inaccordance with this Agreement as a Designated Hedge Agreement.

 

**“Designated Hedge Obligations”**means the obligations of any Borrower to the Designated Hedge Creditor underany Designated Hedge Agreement.

 

**“Disclosure Schedule”**means the schedule which is attached hereto as Annex III and is incorporatedinto this Agreement as the same may be updated with respect toSchedules 4.1, 4.11, 4.13, 4.16 and 4.17 from time to time with theconsent of the Administrative Agent, which consent shall not be unreasonablywithheld, or otherwise in accordance with the terms hereof.

 

**“Distribution”** meansa payment made, liability incurred or other consideration (other than anypayment made solely in capital stock or other equity units of a Person) givenby such Person for the purchase, acquisition, redemption or retirement of anycapital stock (whether added to treasury or otherwise) or similar equity ormembership units of such Person or as a dividend, return of capital or otherdistribution in respect of the capital stock or such other equity units of suchPerson.

 

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**“Dollars”** and thesign “$” each means lawful money of the United States.

 

**“Domestic Subsidiary”**means (i) any direct Subsidiary of a Borrower that is organized under the Lawsof any state of the United States or the District of Columbia and (ii) anydirect or indirect Subsidiary of another Domestic Subsidiary which is not aForeign Subsidiary.

 

**“Eligible Assignee”**means any of the following Persons: (a) a Lender; (b) an Affiliate of a Lender;(c) an Approved Fund; and (d) any other Person (other than a natural person)approved by (i) the Administrative Agent, (ii) the L/C Issuer, and (iii) unlessan Event of Default has occurred and is continuing, the Borrower Representative(each such approval not to be unreasonably withheld or delayed); providedthat, notwithstanding the foregoing, “Eligible Assignee” shall not include anyBorrower or any of the Borrowers’ Affiliates or Subsidiaries and; provided,further, that, notwithstanding the foregoing, a Person shall only be an “EligibleAssignee” if (i) such Person shall have complied with the requirements ofSection 12.3(b), and (ii) the assignment to or participation of suchPerson shall not constitute a “prohibited transaction” (as defined in Section406 of ERISA or Section 4975 of the Code).

 

**“Employee Benefit Plan”**means an “employee benefit plan” as defined in Section 3 of ERISA of a Borroweror a Subsidiary or any of their ERISA Affiliates, including any “multiemployerplan” as defined in Section 4001(a)(3) of ERISA or any “pension plan” asdefined in Section 3(2) of ERISA or any “welfare plan” as defined in Section3(1) of ERISA.

 

**“Environmental Claims”**means any and all administrative or judicial actions, suits, demands, demand letters,claims, complaints, liens, notices of non-compliance, investigations,proceedings alleging non-compliance with or liabilities under any EnvironmentalLaw or any Environmental Permit, instituted by any Person, including, withoutlimitation, (a) by governmental authorities for enforcement, cleanup,removal, response, remedial or other actions or damages pursuant to anyapplicable Environmental Law or (b) by any third party seeking damages,contribution, indemnification, cost recovery, compensation or injunctive reliefresulting from Hazardous Materials or arising from alleged injury or threat ofinjury to health or the environment.

 

**“Environmental Laws”**means any applicable federal, state or local Law or order pertaining to theprotection of the environment, including (but not limited to) applicableprovision of CERCLA, RCRA, the Hazardous Materials Transportation Act, 49 USC§§ 5101 et seq., the Federal Water Pollution Control Act (33 USC§§ 1251 et seq.), the Toxic Substances Control Act (15 USC §§ 2601 etseq.), and all similar state, regional or local Laws, treaties, regulations,statutes or ordinances, common law or civil laws of any foreign or domesticgovernmental authority, agency or tribunal, and all foreign equivalentsthereof, as the same have been or hereafter may be amended, and any and allanalogous future Laws, treaties, regulations, statutes or ordinances, commonlaw or civil laws of any foreign or domestic governmental authority, agency andwhich govern: (a) the existence, cleanup and/or remedy of contamination onproperty; (b) the emission or discharge of Hazardous Materials into theenvironment; (c) the control of hazardous wastes; (d) the use,generation, transport, treatment, storage, disposal, removal or recovery of HazardousMaterials; or (e) the maintenance and development of wetlands.

 

**“Environmental Permits”**means all permits, approvals, certificates, notifications, identificationnumbers, licenses and other authorizations required under any applicableEnvironmental Laws.

 

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**“ERISA”** means theEmployee Retirement Income Security Act of 1974 (Public Law 93-406), asamended, and in the event of any amendment affecting any Section thereofreferred to in this Agreement, that reference shall be a reference to thatSection as amended, supplemented, replaced or otherwise modified.

 

**“ERISA Affiliate”**means, with respect to any Person, any other Person that is under commoncontrol with such Person within the meaning of Section 4001(a)(14) of ERISA, oris a member of a group which includes such Person and which is treated as asingle employer under Sections 414(b) or (c) of the Internal RevenueCode.  In addition, for provisions ofthis Agreement that relate to Section 412 of the Internal Revenue Code, theterm “ERISA Affiliate” of any Person shall mean any other Person aggregatedwith such Person under Sections 414(b), (c), (m) or (o) of the Internal RevenueCode.

 

**“ERISA Regulator”**means any governmental agency (such as the Department of Labor, the IRS and thePension Benefit Guaranty Corporation) having any regulatory authority over anyEmployee Benefit Plan.

 

**“Eurocurrency Reserve Percentage”**means, for any Interest Period in respect of any LIBOR Rate Loan, as of anydate of determination, the aggregate of the then stated maximum reservepercentages (including any marginal, special, emergency or supplementalreserves), expressed as a decimal, applicable to such Interest Period (if morethan one such percentage is applicable, the daily average of such percentagesfor those days in such Interest Period during which any such percentages shallbe so applicable) by the Board of Governors of the Federal Reserve System, anysuccessor thereto, or any other banking authority, domestic or foreign, to whichthe Administrative Agent or any Lender may be subject in respect toeurocurrency funding (currently referred to as “Eurocurrency Liabilities” inRegulation D of the Federal Reserve Board) or in respect of any other categoryof liabilities including deposits by reference to which the interest rate onLIBOR Rate Loans is determined or any category of extension of credit or otherassets that include the LIBOR Rate Loans. For purposes hereof, such reserve requirements shall include, withoutlimitation, those imposed under Regulation D of the Federal Reserve Board andthe LIBOR Rate Loans shall be deemed to constitute Eurocurrency Liabilitiessubject to such reserve requirements.

 

**“Event of Default”**has the meaning specified in Section 6 of this Agreement.

 

**“Excluded Accounts”**means the Accounts of the Borrowers or the Subsidiary Guarantors which:

 

(a)                                  havearisen from the sale by such Borrower of goods where such goods have not beenshipped or delivered to the Account Debtor or as to which “unbilled receivables”exist;

 

(b)                                 havearisen in connection with sales of goods which were shipped or delivered to theAccount Debtor on other than an absolute sale basis, such as shipments ordeliveries made on consignment, a sale or return basis, a guaranteed salebasis, a bill and hold basis, or on the basis of any similar understanding;

 

(c)                                  areAccounts with respect to which the Administrative Agent does not have a firstpriority, perfected security interest in favor of the Administrative Agent orare Accounts subject to any Lien other than the Lien in favor of theAdministrative Agent except for any Lien permitted by clauses (C), (G) and (K)of Section 5.3(d);

 

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(d)                                 areevidenced by judgment, Chattel Paper or any Instrument of any kind (including,without limitation, any promissory notes);

 

(e)                                  areowed by an Affiliate of any Borrower or Subsidiary Guarantor if such Affiliateis also a Borrower or Subsidiary thereof;

 

(f)                                    areowed by a Person that is not a citizen of or organized under the Laws of theUnited States or any State or are owed by any Person located outside of theUnited States unless (i) such Accounts are owed by an Account Debtorlocated in Canada (other than in the Province of Quebec or other non PPSA jurisdictions)and the Administrative Agent has a first priority lien perfected to itssatisfaction in such Accounts, or (ii) payment of such Accounts isguaranteed by a letter of credit in form and substance and issued by afinancial institution reasonably satisfactory to the Administrative Agent andwhich has been transferred or assigned to the Administrative Agent as securityfor the Obligations; or

 

(g)                                 arepayable in currency other than Dollars.

 

**“Excluded Foreign Subsidiary”**means each Foreign Subsidiary of UNOVA, Inc. which (i)(A) is inactive or has nooperations and (B) owns Intellectual Property (other than trademarks ortradenames) having a fair market value which, when added to the aggregate fairmarket value of the Intellectual Property (other than trademarks andtradenames) owned by all other Excluded Foreign Subsidiaries and ExcludedSubsidiaries, aggregates less than Two Million Five Hundred Thousand Dollar($2,500,000), or (ii)(A) maintains a Capitalization of less than Five MillionDollars ($5,000,000), (B) contributes less than Seven Hundred Thousand Dollars($700,000) to the Consolidated EBITDA of UNOVA, Inc. and its consolidatedSubsidiaries and (C) owns Intellectual Property (other than trademarks andtradenames) having a fair market value which, when added to the aggregate fairmarket value of the Intellectual Property (other than trademarks and tradenames) owned by all other ExcludedForeign Subsidiaries and Excluded Subsidiaries, aggregates less than Two MillionFive Hundred Thousand Dollars ($2,500,000), a list of such Excluded ForeignSubsidiaries as of the Closing Date is disclosed on the Disclosure Schedule; provided,however that “Excluded Foreign Subsidiary” shall not include: (x) anyForeign Subsidiary the stock or other ownership interest of which has beenpledged to the Administrative Agent for the benefit of the Lenders pursuant toa non-U.S. law governed pledge instrument or agreement and (y) any SpecialForeign Subsidiary.

 

**“Excluded Inventory”**means the Inventory of the Borrowers or the Subsidiary Guarantors which:

 

(a)                                  consistsof goods: (i) not held for sale, such as any shipping labels, anymaintenance items, any supplies and packaging, (ii) raw materials andwork-in-process provided only fifty percent (50%) of work-in-process will beconsidered to be Excluded Inventory, and (iii) any Inventory used inconnection with research and development; provided, however thatInventory with respect to which “unbilled receivables” exist shall not beconsidered as Excluded Inventory;

 

(b)                                 isnot subject to a first priority, perfected security interest in favor of theAdministrative Agent or is subject to a Lien in favor of any Person other thanthe Administrative Agent except for any Lien permitted by clauses (C), (E), (G)and (K) of Section 5.3(d) of this Agreement;

 

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(c)                                  ison consignment; or

 

(d)                                 islocated outside of the United States.

 

**“Excluded M&E”**means the operating Equipment of the Borrowers or the Subsidiary Guarantorswhich:

 

(a)                                  isa Fixture;

 

(b)                                 isnot owned in fee by such Borrower or such Subsidiary Guarantor;

 

(c)                                  isnot subject to a first priority, perfected security interest in favor of theAdministrative Agent for the benefit of the Lender or is subject to a Lien infavor of any Person other than the Administrative Agent except for any Lienspermitted pursuant to by clauses (C), (E), (G) and (K) of Section 5.3(d);or

 

(d)                                 islocated outside of the United States.

 

**“Excluded Subsidiary”**means each direct and indirect Domestic Subsidiary of UNOVA, Inc. (that is nota Foreign Subsidiary) which (i)(A) is inactive or has no operations and (B)owns Intellectual Property (other than trademarks or tradenames) having a fairmarket value which, when added to the aggregate fair market value of theIntellectual Property (other than trademarks and tradenames) owned by all otherExcluded Subsidiaries and Excluded Foreign Subsidiaries, aggregates less thanTwo Million Five Hundred Thousand Dollars ($2,500,000), or (ii)(A) maintains aCapitalization of less than Five Million Dollars ($5,000,000), (B) contributesless than Seven Hundred Thousand Dollars ($700,000) to the Consolidated EBITDAof UNOVA, Inc. and its consolidated Subsidiaries and (C) owns IntellectualProperty (other than trademarks and tradenames) having a fair market valuewhich, when added to the aggregate fair market value of the IntellectualProperty (other than trademarks and tradenames) owned by all other ExcludedSubsidiaries and Excluded Foreign Subsidiaries, aggregates less than TwoMillion Five Hundred Thousand Dollars ($2,500,000), a list of such ExcludedSubsidiaries as of the Closing Date is disclosed on the Disclosure Schedule; provided,however that “Excluded Subsidiary” shall in any event include TheFactory Power Company, an Ohio corporation.

 

“**Executive Order No. 13224**” means theExecutive Order No. 13224 on Terrorist Financing effective September 24, 2001,as the same has been or hereafter may be renewed, extended, amended orreplaced.

 

**“Existing Credit Facility”**means that certain Credit Agreement, dated as of July 12, 2001, as amended,among the Borrowers which are signatories thereto, Bank of America, N. A., asthe Administrative Agent, Heller Financial, Inc, as the Syndication Agent, theFinancial Institutions Named therein and Bank of America Securities LLC andHeller Financial, Inc. as the Co-Lead Arrangers and Co-Book Managers, and thelenders party thereto.

 

**“Facility Fee”** hasthe meaning set forth in Section 2.14(a).

 

**“Federal Funds Effective Rate”**means, for any day, the rate per annum (rounded upwards, if necessary, to thenearest one hundredth of one percent (1/100th of 1%) equal to the weightedaverage of the rates on overnight federal funds transactions with members ofthe Federal Reserve System arranged by federal funds brokers on such

 

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day, aspublished by the Federal Reserve Bank of New York on the Business Day nextsucceeding such day; provided, however, that: (a) if the dayfor which such rate is to be determined is not a Business Day, the FederalFunds Rate for such day shall be such a rate on such transactions on theimmediately preceding Business Day as so published on the next succeedingBusiness Day and (b) if such rate is not so published for any BusinessDay, the Federal Funds Rate for such Business Day shall be the average ofquotations for such day on such transactions received by the AdministrativeAgent from three federal funds brokers of recognized standing selected by theAdministrative Agent.

 

**“Financial Asset”**means a “financial asset” as defined in the UCC which constitutes an investmentof a Borrower or its Subsidiary permitted by Sections 5.3(e)(G),5.3(e)(H), 5.3(e)(I), 5.3(e)(J), 5.3(e)(K) or 5.3(e)(L) (excluding repurchaseagreements).

 

**“Financial Impairment”**means, in respect of a Person, the distressed economic condition of such Personmanifested by any one or more of the following events:

 

(a)           the materialdiscontinuation of the business of the Person; unless such discontinuation is partof a consolidation, or sale permitted by Section  5.2(a) or 5.3(a) hereof;

 

(b)           the Person generallyceases or is generally unable or admits in writing its inability, generally, tomake timely payment upon the Person’s debts, obligations, or liabilities asthey mature or come due;

 

(c)           the assignment bythe Person for the benefit of creditors;

 

(d)           the voluntaryinstitution by the Person of, or the consent granted by the Person to, theinvoluntary institution of (whether by petition, complaint, application,default, answer (including, without limitation, an answer or any otherpermissible or required responsive pleading admitting: (i) thejurisdiction of the forum or (ii) any material allegations of thepetition, complaint, application, or other writing to which such answer servesas a responsive pleading thereto), or otherwise), of any bankruptcy,insolvency, reorganization, arrangement, readjustment of debt, dissolution,liquidation, receivership, trusteeship, or similar proceeding pursuant to orpurporting to be pursuant to any bankruptcy, insolvency, reorganization,arrangement, readjustment of debt, dissolution, liquidation, receivership,trusteeship, or similar Law of any jurisdiction;

 

(e)           the voluntaryapplication by the Person for or consent granted by the Person to theinvoluntary appointment of any receiver, trustee, or similar officer(i) for the Person or (ii) of or for all or substantially all of thePerson’s property; or

 

(f)            the commencement orfiling against a Person, without such Person’s application, approval orconsent, of an involuntary proceeding or an involuntary petition seeking:(a) liquidation, reorganization or other relief in respect of such Person,its debts or all or a substantial part of its assets under any federal, stateor foreign bankruptcy, insolvency, receivership, or similar Law now orhereafter in effect or (b) the appointment of a receiver, trustee,custodian, sequestrator, conservator or similar official for such Person or forall or substantially all of its assets, and, in any such case, either(i) such proceeding or petition shall continue undismissed for sixty (60)days or (ii) an order or decree approving or ordering any of the foregoingshall be entered.

 

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**“Fiscal Quarter”**means any of the four consecutive three-month fiscal accounting periodscollectively forming a Fiscal Year of UNOVA, Inc.

 

**“Fiscal Year”** meansthe regular annual accounting period of UNOVA, Inc. for federal income taxpurposes that either (a) comprises a 52-53 week fiscal year ending on theSunday closest to December 31 or (b) ends on December 31.  For the avoidance of doubt, in the case of(a) in the immediately preceding sentence, any reference to a Fiscal Yearending on a specific date in the Loan Documents shall mean the 52-53 weekfiscal year ending on the Sunday closest thereto.

 

**“Fixed Rate Bonds”**meansthose certain 6.875% Notes due March 15, 2005 and 7.000% Notes dueMarch 15, 2008 of Bonds of UNOVA, Inc.

 

**“Foreign Lender”** hasthe meaning specified in Section 12.3(b)(i) of this Agreement.

 

“**Foreign Subsidiary**” means (i) anySubsidiary of a Borrower that is not organized under the laws of any state ofthe United States or the District of Columbia and (ii) any direct or indirectSubsidiary of any Subsidiary described in clause (i) of this definition.

 

“**Fund**” means any Person (other than anatural person) that is (or will be) engaged in making, purchasing, holding orotherwise investing in commercial loans and similar extensions of credit in theordinary course of its business.

 

**“GAAP”** meansgenerally accepted accounting principles of the U.S. consistent with thoseapplied in the preparation of the financial statements referred to inSection 5.1 of this Agreement and otherwise consistently applied.

 

**“Guarantor”** means aPerson who pledges his credit or property in any manner for the payment orother performance of Indebtedness, agreements or other obligation of anotherPerson including, without limitation, any guarantor (whether of collection orpayment), any obligor in respect of a standby letter of credit or surety bondissued for the account of another Person, any surety, any co-maker, anyendorser, and any Person who agrees conditionally or otherwise to make anyloan, purchase or investment in order thereby to enable another Person toprevent or correct a default of any kind.

 

**“Guaranty Obligations”**means, with respect to any Person, without duplication, any obligation of suchPerson to guarantee any Indebtedness (‘primary Indebtedness’) of any otherPerson (the ‘primary obligor’) in any manner, whether directly or indirectly,including, without limitation, any obligation of such Person, whethercontingent or not contingent, (a) to purchase any such primaryIndebtedness or any property constituting direct or indirect security therefor,(b) to advance or supply funds (i) for the purchase or payment of anysuch primary Indebtedness or (ii) to maintain working capital or equitycapital of the primary obligor or otherwise maintain the net worth or solvencyof the primary obligor, (c) to purchase property, securities or servicesprimarily for the purpose of assuring the owner of any such primaryIndebtedness of the ability of the primary obligor to make payment of suchprimary Indebtedness, or (d) otherwise to assure or hold harmless theowner of such primary Indebtedness against loss in respect thereof; provided,however, that the term “Guaranty Obligations” shall not includeendorsements of instruments for deposit or collection in the ordinary course ofbusiness.  The amount of any GuarantyObligation shall be deemed to be an amount equal to the stated or determinableamount of the primary Indebtedness in respect of which such Guaranty Obligationis made or, if not stated or determinable, the maximum reasonably anticipated

 

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liability inrespect thereof (assuming such Person is required to perform thereunder) asdetermined by such Person in good faith.

 

**“Hazardous Material”**means: (a) any asbestos or other material composed of or containingasbestos which is, or may become, even if properly managed, friable,(b) petroleum and any petroleum product, including crude oil or anyfraction thereof, and natural gas or synthetic natural gas liquids or mixturesthereof, or (c) any hazardous or toxic waste, substance or materialdefined as such in (or for purposes of) CERCLA or RCRA, or any other applicableEnvironmental Laws.

 

**“Hedge Agreement”**means (i) any interest rate swap agreement, any interest rate cap agreement,any interest rate collar agreement, or similar agreement or arrangementdesigned to protect against fluctuations in interest rates as well as (ii) anyforeign exchange, option or similar derivative agreement designed to protectagainst fluctuations in foreign exchange rates.

 

**“Indebtedness”**means, with respect to any Person, without duplication, (a) Indebtednessfor Borrowed Money, (b) obligations to pay the deferred purchase price ofproperty or services (other than accrued liabilities incurred in the ordinarycourse of business, including trade payables), (c) Capital Expenditures orother obligations as lessee under leases which shall have been or should be, inaccordance with GAAP, recorded as Capitalized Leases, (d) all obligationsof such Person as an account party in respect of letters of credit or banker’sacceptances, (e) obligations secured by any Lien on the properties orassets of the Person, provided, however, that any such obligations andliabilities which are limited in recourse to such property shall be included asIndebtedness only to the extent of the net book value of such property as wouldbe shown on the balance sheet of such Person prepared in accordance with GAAP,(f) obligations of such Person in respect of currency or interest rateswap or comparable transactions and (g) Guaranty Obligations in respectof, and obligations (contingent or otherwise) to purchase or otherwise acquire,or otherwise to assure a creditor against loss in respect of, indebtedness orobligations of others of the kinds referred to in clauses (a) through (f)above.  For the avoidance of doubt, inconnection with any loan by a Borrower or any Subsidiary from an insurancecompany or affiliate thereof against the cash surrender value of one or morelife insurance policy(ies) issued by such insurance company or affiliatethereof and maintained on selected employees of such Borrower or Subsidiary,Indebtedness shall include only the principal amount of such loan that is inexcess of the cash surrender value of such life insurance policy(ies).

 

**“Indebtedness for Borrowed Money”**means, with respect to any Person, without duplication, all obligations of suchPerson for money borrowed including, without limitation, notes payable, draftsaccepted representing extensions of credit, obligations evidenced by bonds,debentures, notes or other similar instruments, and obligations upon whichinterest charges are customarily paid, and all Guaranty Obligations withrespect to such obligations.  For theavoidance of doubt, (i) in connection with any loan by a Borrower or anySubsidiary from an insurance company or affiliate thereof against the cashsurrender value of one or more life insurance policy(ies) issued by suchinsurance company or affiliate thereof and maintained on selected employees ofsuch Borrower or Subsidiary, Indebtedness for Borrowed Money shall include onlythe principal amount of such loan that is in excess of the cash surrender valueof such life insurance policy(ies) and (ii) Indebtedness for Borrowed Money ofa Borrower or any Subsidiary thereof shall not include obligations owed toanother Borrower or a Subsidiary thereof, as applicable.

 

“**Industrial Automation Systems Segment**”means the operations of UNOVA

 

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IndustrialAutomation Systems, Inc., R&B Machine Tool Company, UNOVA JSM, Inc., UNOVAIP Corp., Honsberg Lamb Sonderwerkzeugmaschinen GmbH, Cincinnati Machine U.K.Limited, UNOVA U.K. Limited, The Factory Power Company, Cincinnati MachineKorea Corp., Cincinnati Machine UK Holdings Limited, Cincinnati MachineHoldings UK Limited, UNOVA Canada, Inc., and UNOVA Financing Ltd.

 

**“Intellectual Property”**means, with respect to any Borrower or Subsidiary, all Patents, Trademarks andCopyrights of such Borrower or such Subsidiary and any licenses thereof.

 

**“Interest Period”**means, for each LIBOR Rate Loan comprising a Revolving Credit Borrowing, theperiod commencing on the date of such LIBOR Rate Loan or the date of the RateConversion or Rate Continuation of any Revolving Credit Loans into such LIBORRate Loan and ending on the numerically corresponding day of the periodselected by the Borrower Representative pursuant to the provisions hereof andeach subsequent period commencing on the last day of the immediately precedingInterest Period in respect of such LIBOR Rate Loans and ending on the last dayof the period selected by the Borrower Representative pursuant to theprovisions hereof; provided, however, that the duration of eachsuch Interest Period shall be one, two, three, or six months, in each case asthe Borrower Representative may select by delivery to the Administrative Agentof a Credit Request therefor in accordance with Section 2.3 of thisAgreement or a Rate Conversion\Continuation Request in accordance withSection 2.12 of this Agreement, and provided, further, that:

 

(i)                                     theInterest Period for each LIBOR Rate Loan comprising part of the same RevolvingCredit Borrowing shall be of the same duration;

 

(ii)                                  wheneverthe last day of any Interest Period would otherwise occur on a day other than aBusiness Day, the last day of such Interest Period shall be extended to occuron the next succeeding Business Day; provided, however, that, ifsuch extension would cause the last day of such Interest Period to occur in thenext following calendar month, the last day of such Interest Period shall occuron the immediately preceding Business Day;

 

(iii)                               ifthe Interest Period commences on a Business Day for which there is no numericalequivalent in the calendar month in which the Interest Period is to end, suchInterest Period shall end on the last Business Day of such calendar month;

 

(iv)                              withrespect to LIBOR Rate Loans, no Interest Period may end on a date later thanthe Revolving Credit Termination Date; and

 

(v)                                 theBorrowers shall not be entitled to have an aggregate of more than twelve (12)LIBOR Rate Loans outstanding at any one time.

 

**“IRS”** means theInternal Revenue Service of the United States.

 

**“Joinder Agreement”**means an agreement, in the form of Exhibit O attached hereto, or otherwise inform and substance reasonably acceptable to the Administrative Agent, by whicha Domestic Subsidiary joins as a Borrower under the Credit Agreement and theother Loan Documents, as applicable.

 

**“KeyBank”** meansKeyBank National Association, a national banking association.

 

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**“Law”** means any law,treaty, regulation, statute or ordinance, common law, civil law, or any caseprecedent, ruling, requirement, directive or request having the force of law ofany foreign or domestic governmental authority, agency or tribunal.

 

**“LC Exposure”** means,with respect to any Lender, at any time of determination, such Lender’s ProRata Share of the sum of: (a) the aggregate undrawn amount of all Lettersof Credit outstanding at such time, plus (b) the aggregate amountthat has been drawn under such Letters of Credit for which the LC Issuer hasnot at such time been reimbursed by the Borrowers.

 

**“LC Issuer”** means,with respect to any Letter of Credit, the issuer of such Letter of Credit,which shall be, with respect to any Letter of Credit hereunder, KeyBank, or anyother Lender that is requested by the Administrative Agent to act in suchcapacity with the approval of the Borrower Representative, and agrees to act asthe LC Issuer, and each of their respective successors and assigns (any ofwhich may be replaced at the sole discretion of the Administrative Agent).

 

“**Lead Arranger**” means KeyBank and itssuccessors or assigns.

 

**“Lender Default”**means (i) the refusal (which has not been retracted) of a Lender inviolation of its obligations under this Agreement to make available to theAdministrative Agent its Pro Rata Share of any Revolving Credit Borrowinghereunder or to fund any portion of the participation purchase price payable bysuch Lender for its participating interests hereunder or (ii) thenotification (which has not been retracted) to the Administrative Agent or theBorrower Representative by a Lender that such Lender does not intend to complywith its obligations hereunder to make available to the Administrative Agentits Pro Rata Share of any Revolving Credit Borrowing hereunder or to fund anyportion of the participation purchase price payable by such Lender for itsparticipating interests hereunder.

 

**“Lenders”** means thefinancial institutions listed on the signature pages hereof as the “Lenders”and having Revolving Credit Commitments hereunder or outstanding RevolvingCredit Loans hereunder and the successors thereto and assignees thereof.

 

**“Lending Installation”**means, with respect to a Lender or its successor or assigns, the branch,Subsidiary or Affiliate of such Lender or its successor or assigns specifiedunder the name of such Lender on the signature pages hereto or as otherwiseselected by such Lender pursuant to Section 2.6 of this Agreement, or suchother branch, Subsidiary or Affiliate as such Lender may from time to timespecify in writing to the Borrower Representative, the Administrative Agent andthe Lenders as its Lending Installation.

 

**“Lending Office”**means, with respect to any Lender or LC Issuer, the office of such Lender or LCIssuer specified as its “Lending Office” under its name on the signature pageshereto, or such other office of such Lender or LC Issuer as such Lender or LCIssuer may from time to time specify in writing to the Borrower Representativeand the Administrative Agent as the office at which Revolving Credit Loans orLetters of Credit are to be made, issued or maintained, as the case may be.

 

**“Letter of Credit”**means each: (i) documentary letter of credit and (ii) each standbyletter of credit for the account of a Borrower or any Subsidiary thereof issuedby the LC Issuer hereunder.

 

**“Letter of Credit Collateral Account”**has the meaning specified in Section 7.6

 

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of thisAgreement.

 

**“Letter of Credit Obligations”**means (a) the obligations of the Borrowers to reimburse the LC Issuerhereunder, (b) all fees owing to the LC Issuer under this Agreement andthe other Loan Documents, (c) any reasonable costs and expensesreimbursable to the LC Issuer pursuant to Section 13.3 of this Agreement,and (d) taxes, Other Taxes, compensation, indemnification obligations orother amounts owing to the LC Issuer under this Agreement, the reimbursementagreement executed in favor of the LC Issuer or any other Loan Document.

 

**“Letter of Credit Request”**means a request for the issuance of a Letter of Credit made in accordance withthis Agreement, in the form attached hereto as Exhibit B-2 andincorporated herein by reference.

 

**“LIBOR Rate Borrowing”**means a Revolving Credit Borrowing consisting of LIBOR Rate Loans.

 

**“LIBOR Rate Loan”**means a Revolving Credit Loan, denominated in Dollars, which bears interest asprovided in Section 2.11(b) of this Agreement.

 

**“Lien”** means anylien, security interest or other charge or encumbrance of any kind, or anyother type of similar arrangement, including, without limitation, the lien orretained security title of a conditional vendor and any easement, right of wayor other encumbrance on title to real property.

 

**“Loan Account”** hasthe meaning set forth in Section 2.7(a) of this Agreement.

 

**“Loan Documents”**means (i) this Agreement, any note, mortgage (if any) or deed of trust (ifany), security agreement, pledge, guaranty or other lien instrument, any feeletter, reimbursement agreement (if any), notice, Revolving Credit Loanrequest, officer’s certificate or other writing of any kind which is now orhereafter required to be delivered by the Borrowers to the AdministrativeAgent, the Lenders or the LC Issuer (or any of their respective Affiliates) inconnection with this Agreement, including, without limitation, the RevolvingCredit Notes and (ii) any Designated Hedge Agreement.

 

**“London Interbank Offered Rate”**means, for any Interest Period with respect to a LIBOR Rate Borrowing, thequotient (rounded upwards, if necessary, to the nearest one sixteenth of onepercent (1/16th of 1%)) of: (x) the per annum rate of interest, determinedby the Administrative Agent in accordance with its usual procedures (whichdetermination shall be conclusive absent manifest error) as of approximately12:00 noon (London time) two Business Days prior to the beginning of suchInterest Period pertaining to such LIBOR Rate Loan, as provided by Bloomberg’sor Reuters (or any other similar company or service that provides ratequotations comparable to those currently provided by such companies as the ratein the London interbank market), as determined by the Administrative Agent fromtime to time for purposes of providing quotations of interest rates applicableto deposits in Dollars in immediately available funds with a maturitycomparable to such Interest Period divided by (y) a number equal to1.00 minus the Eurocurrency Reserve Percentage. In the event that such rate quotation is not available for any reason,then the rate (for purposes of clause (x) hereof) shall be the rate,determined by the Administrative Agent as of approximately 12:00 noon (Londontime) two Business Days prior to the beginning of such Interest Periodpertaining to such LIBOR Rate Loan, to be the average (rounded upwards, ifnecessary, to the nearest one sixteenth of one percent (1/16th of 1%)) of theper annum rates at which deposits in Dollars in immediately available funds inan amount comparable to

 

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such LIBORRate Borrowing and with a maturity comparable to such Interest Period areoffered to the prime banks by leading banks in the London interbankmarket.  The London Interbank OfferedRate shall be adjusted automatically on and as of the effective date of anychange in the Eurocurrency Reserve Percentage.

 

**“Material Adverse Effect”**means: (a) a material adverse effect on the business, properties,operations or condition (financial or otherwise) of the Borrowers and theirSubsidiaries taken as a whole, (b) an impairment of a material portion ofthe Collateral taken as a whole, (c) a material impairment of theBorrowers’ ability (taken as a whole) to repay the Obligations, (d) amaterial impairment to the Administrative Agent’s security interest and Lien onthe Collateral (taken as a whole) or the priority thereof, or (e) amaterial adverse effect on the legality, validity or enforceability of this Agreementor the other Loan Documents.

 

**“Material Business Agreement”**means each agreement or contract (not including Material License Agreements) ofa Borrower or any Subsidiary thereof (other than any agreement that by itsterms may be terminated upon 60 days’ notice or less) the termination of whichcould reasonably be expected to result in a Material Adverse Effect.

 

**“Material License Agreement”**means each license agreement of a Borrower in respect of Third PartyIntellectual Property the termination of which could reasonably be expected toresult in a Material Adverse Effect.

 

**“Maximum Lawful Rate”**has the meaning specified in Section 13.6 of this Agreement.

 

“**Moody’s**” means Moody’s InvestorsServices, Inc., and any successor thereto.

 

**“Multiemployer Plan”**means any Employee Benefit Plan which is a “multiemployer plan” as such term isdefined in Section 3(27) of ERISA.

 

**“Net Proceeds”** meansthe cash proceeds (including cash proceeds subsequently received in respect ofnon-cash consideration initially received) from any sale, lease, transfer orother disposition of any assets (excluding real estate) of, or equity interestin, Industrial Automation Systems Segment (or the merger of such segment ordivision thereof with or into another Person) to a Person received by theBorrowers (net of (x) selling expenses, including without limitation anyreasonable broker’s fees or commissions, costs of discontinuing operationsassociated with such assets and taxes and tax liabilities arising as a resultof any gain associated with such sale or disposition and (y) the repaymentof any Indebtedness secured by a purchase money Lien on such assets that ispermitted under this Agreement).

 

**“Notice Office”**means (i) with respect to the Administrative Agent, such office of the AdministrativeAgent specified as its “Notice Office” under its name on the signature pageshereto, or such other office, located in a city in the United States EasternTime Zone, as the Administrative Agent may from time to time specify in writingto the Borrower Representative, the Lenders and the LC Issuer as the office towhich notices to the Administrative Agent are to be given by the BorrowerRepresentative, the Lenders and the LC Issuer, as the case may be, and(ii) with respect to each Lender and each LC Issuer, such office thereofspecified as its “Notice Office” under its name on the signature pages heretoor, if such Lender shall have become a party hereto pursuant to Section 10.2,in the applicable Assignment and Assumption, or such other office as suchLender or LC Issuer may from time to time specify in writing to the BorrowerRepresentative, the Administrative Agent and the LC Issuer as the office towhich notices thereto are to be

 

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given by theBorrower Representative, the Lenders or the LC Issuer, as the case may be.

 

**“Non-Excluded Taxes”**has the meaning set forth in Section 12.3(a) of this Agreement.

 

**“Obligations”** meansthe present and future obligations of each of the Borrowers to the AdministrativeAgent, the Lenders and the LC Issuer under this Agreement or any other LoanDocument including without limitation (a) the outstanding principal andaccrued interest (including interest accruing after a petition for relief underthe federal bankruptcy laws has been filed, whether or not allowed) in respectof any Revolving Credit Loans advanced to the Borrowers by the Lenders plusthe outstanding LC Exposure of the Lenders and the obligation of the Borrowersto repay the Lenders for Revolving Credit Loans thereby in connection with theLC Exposure, (b) all fees owing to the Lenders or the Administrative Agentunder this Agreement and the other Loan Documents, (c) any costs andexpenses reimbursable to the Lenders or the Administrative Agent pursuant toSection 13.3 of this Agreement, (d) Taxes, Other Taxes, compensation,indemnification obligations or other amounts owing by the Borrowers to theAdministrative Agent or the Lenders under this Agreement, the Notes or any LoanDocument, (e) Letter of Credit Obligations owing to the LC Issuer, (f) theUnpaid Reimbursement Obligation and (g) the Designated Hedge Obligations andany fees, charges or other amounts owing to any Lender for cash managementservices owing to any Lender (amounts owing to a Person or to an Affiliate of aPerson which was a Lender at the time the hedge exposure of a Borrower wasincurred, or which was a Lender at the time the cash management charge wasincurred, or which was the LC Issuer at the time the Letter of Credit Obligationswere incurred shall continue to be considered as an Obligation for all purposeshereunder and secured hereby even after such Person is no longer a Lender orthe LC Issuer unless such Obligation has been terminated or such Personotherwise waives such Obligation).

 

**“Operating Account”**means, with respect to the Borrowers, the account described in the DisclosureSchedule and maintained by and in the name of the Borrower Representative withKeyBank National Association for the purposes of disbursing the proceeds ofRevolving Credit Loans.

 

**“Other Taxes”** hasthe meaning specified in Section 12.3(a) of this Agreement.

 

“**Participant**” has the meaning specifiedin Section 10.4 of this Agreement.

 

**“Patent”** means, withrespect to any Borrower or Subsidiary, all United States utility and designpatents of such Borrower, together with any extensions, reexaminations andreissues of such patents, patents of addition, patent applications, divisions,continuations, continuations-in-part, whether now existing or hereafter acquired.

 

**“Payment Office”**means, with respect to the Administrative Agent, such office of theAdministrative Agent specified as its “payment office” under its name on thesignature pages hereto, or such other office in the U.S. as the AdministrativeAgent may from time to time specify in writing to the Borrower Representativeand the Lenders as the office to which payments are to be made by the Borrowersor funds are to be made accessible to the Administrative Agent by the Lenders,as the case may be.

 

**“PBGC”** means thePension Benefit Guaranty Corporation or any other governmental authoritysucceeding to any of its functions.

 

**“Permitted Acquisition**”shall mean and include any Acquisition by a Borrower

 

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or anySubsidiary as to which all of the following conditions are satisfied or as towhich the Required Lenders have otherwise consented in accordance withSection 13.1 of this Agreement:

 

(i)                                     such Acquisitiondoes not involve the Acquisition of a Person which is: (A) a generalpartnership, general partner of a limited partnership or is otherwise a Personas to which limited liability is unavailable to the holders of its equity orother similar ownership interests therein (unless the equity or similar ownershipinterests in such entities or Person shall be held by a Subsidiary created inconnection with such Permitted Acquisition and as to which limited liability isavailable to the holders of such equity or other ownership interests), (B) atrust or unincorporated association (unless the record and beneficial interestsin any such trust or association shall be held by a Subsidiary created inconnection with such Permitted Acquisition and as to which limited liability isavailable to the holders of such equity or other ownership interests), or (C)without the consent of the Required Lenders, a Person having an equity interestor other similar interest held by a foreign government or any politicalsubdivision or agency thereof unless the same is a requirement to conductbusiness in a particular foreign jurisdiction or political subdivision;

 

(ii)                                  such Acquisition (i)involves a line or lines of business which are substantially similar,complementary or related to the lines of business in which the Borrowers andtheir Subsidiaries, considered as an entirety, are engaged on the Closing Dateand (ii) would not subject the Administrative Agent or the Lenders toregulatory or third party approvals in connection with the exercise of rightsand remedies under this Agreement and the other Loan documents (unless suchapprovals are generally required in connection with the exercise of similarrights and remedies by the Administrative Agent or such Lenders in connectionwith other Borrowers);

 

(iii)                               such Acquisition is notactively opposed by the board of directors (or similar governing body) of theselling Person or the person whose equity interests are to be acquired, unlessall of the Lenders specifically approve or consent to such Acquisition inwriting;

 

(iv)                              during such time as aReference Rating Upgrade does not exist, the Total Acquisition Considerationfor all Permitted Acquisitions consummated after the Closing Date shall belimited to $20,000,000 in the aggregate;

 

(v)                                 if a Reference RatingUpgrade exists, the Total Acquisition Consideration for all PermittedAcquisitions consummated after the Closing Date shall be limited to $50,000,000in the aggregate; provided, however, in the event that suchReference Rating Upgrade ceases to exist, the Total Acquisition Considerationshall be limited to the greater of the Total Acquisition Consideration expendedto date or $20,000,000 in the aggregate;

 

(vi)                              if a Reference RatingUpgrade exists and UNOVA, Inc. divests the Industrial Automation SystemSegment, the Total Acquisition Consideration for all Permitted Acquisitionsconsummated after the Closing Date shall be limited to $75,000,000 in theaggregate; provided, however, in the event that such Reference RatingUpgrade ceases to exist,

 

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the Total Acquisition Consideration shall be limited to the greater ofthe Total Acquisition Consideration expended to date or $20,000,000 in theaggregate;

 

(vii)                           in the event that suchAcquisition constitutes an acquisition of equity and/or assets with anaggregate total consideration payable (including in the form of equitysecurities) of greater than Twenty Five Million Dollars ($25,000,000), at leastthirty (30) Business Days prior to the completion of such transaction, theBorrower Representative shall have delivered to the Administrative Agent (A) anotice of the proposed Permitted Acquisition and (B) a certificate of aResponsible Officer of the Borrower Representative demonstrating, in reasonabledetail, the computations necessary to show compliance with the financialcovenants contained in Section 5.4 hereof on a pro forma basis and theother requirements set forth in the definition, such pro forma calculationsbeing determined as if (x) such Acquisition had been completed at thebeginning of the most recent Testing Period for which financial information forthe Borrowers and the business of the Person to be acquired is available andhas been delivered to the Administrative Agent at least 10 Business Days priorto the completion of such transaction (which shall in the case of the acquiredbusiness include audited financial statements for the most recent fiscal year,unless the same are unavailable and unaudited financial statements areacceptable to the Administrative Agent) and (y) any Indebtedness incurredto finance such Acquisition, had been outstanding for such entire TestingPeriod;

 

(viii)                        no Event of Default hasoccurred which is continuing and has not been waived in accordance withSection 13.1 of this Agreement and no Event of Default will occur byreason of consummation of the Acquisition;

 

(ix)                                the assets of thePerson acquired shall be free of all Liens other than Liens permitted pursuantto Section 5.3(d); and

 

(x)                                   the AdministrativeAgent shall have received, on or before the closing of such Acquisition, thedocuments and deliveries reasonably requested by the Administrative Agent, inform and substance reasonably satisfactory to the Administrative Agent to theextent required under Section 5.2(o) of this Agreement.

 

“**Permitted Tax Distributions**” means, foror in respect of any Fiscal Year or other tax period of a Subsidiary of UNOVA,Inc. (each a “Tax Period”), a distribution by Such Subsidiary to itsshareholder, member or other equity holder in an amount equal to the product of:(x) the taxable income of such Subsidiary for such Tax Period multiplied by (y)the Assumed Tax Rate.  Permitted TaxDistributions shall be calculated and made in advance of the dates on whichestimated tax payments relating to the pertinent Tax Period are due, and shallbe made without regard to the actual tax status of any shareholder, member orother equity holder of such Subsidiary. Notwithstanding the foregoing, Permitted Tax Distributions shall alsoinclude any amounts determined pursuant to the foregoing formula with respectto adjustments to the taxable income of such Subsidiaary imposed by anygovernmental authority (or otherwise).

 

**“Person”** means anatural person, partnership, corporation (including a business trust), jointstock company, trust, unincorporated association, limited liability company,joint venture, association or other entity, a government or any politicalsubdivision or

 

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agencythereof, or any other entity.

 

**“Potential Default”**means an event, condition or thing which with the lapse of any applicable graceperiod or with the giving of notice or both would constitute, an Event ofDefault referred to in Section 6 of this Agreement and which has not beenappropriately waived in writing in accordance with this Agreement or fullycorrected, prior to becoming an actual Event of Default.

 

**“Pro Rata Share”**means, in respect of any Lender, the quotient (expressed as a percentage)obtained at any time by dividing: (x) such Lender’s Revolving CreditCommitment at such time by (y)  the aggregate amount of theRevolving Credit Commitments of all of the Lenders; provided, however,that, if all of the Revolving Credit Commitments are terminated pursuant to theterms hereof, then, such Lender’s Pro Rata Share shall mean the quotient(expressed as a percentage) obtained by dividing (x) the aggregate amountof such Lender’s Revolving Credit Loans (together with any participatinginterests of such Lender hereunder) outstanding at such time by (y) theaggregate amount of Revolving Credit Loans (together with all suchparticipating interests of all of the Lenders hereunder) of all of the Lendersoutstanding at such time.

 

**“Rate Continuation”**means a continuation pursuant to Section 2.12 of this Agreement of LIBORRate Loans having a particular Interest Period as LIBOR Rate Loans having anInterest Period of the same duration.

 

**“Rate Conversion”**means a conversion pursuant to Section 2.12 of this Agreement of RevolvingCredit Loans of one Type into Revolving Credit Loans of another Type and, withrespect to LIBOR Rate Loans, from one permissible Interest Period to anotherpermissible Interest Period.

 

**“Rate Conversion/Continuation Request”**has the meaning specified in Section 2.12 of this Agreement.

 

**“RCRA”** means theSolid Waste Disposal Act, including the Resource Conservation and Recovery Actand amendments thereto, 42 U.S.C. §§ 6901 et seq.

 

**“Reference Rating Upgrade”**meansan upgrade of the senior unsecured credit ratings of UNOVA, Inc. to a rating ofat least BB- and Ba3 by S&P and Moody’s, respectively; provided, however,that a “Reference Rating Upgrade” shall not be deemed to exist if both (i) thesenior unsecured credit ratings of UNOVA, Inc. have been downgraded by bothS&P and Moody’s to ratings lower than BB- and Ba3, respectively, and (ii)ninety (90) days have elapsed since the occurrence of the event described inclause (i) and the senior unsecured ratings of UNOVA, Inc. have not beenupgraded by S&P and Moody’s to a rating of at least BB- and Ba3,respectively.

 

“**Related Parties**” means, with respect toany specified Person, such Person’s Affiliates and the respective directors,officers, employees, agents and advisors of such Person and such Person’sAffiliates.

 

**“Reportable Event”**means any of the events set forth in Section 4043 of ERISA excluding thoseevents for which the requirement of notice has been waived by the PBGC orapplicable regulations.

 

**“Required Lenders”**means: (i) if the Revolving Credit Commitments have not been terminated pursuantto the terms hereof, Lenders (excluding, for purposes of this clause (i) only,any Lender then constituting a Defaulting Lender) having at least 66 2/3%

 

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of theaggregate outstanding Revolving Credit Commitments of the Lenders at such time(excluding, for purposes of determining the aggregate outstanding RevolvingCredit Commitments of the Lenders at such time, the outstanding RevolvingCredit Commitments of any such Defaulting Lender) and (ii) if the RevolvingCredit Commitments are terminated pursuant to the terms hereof, Lenders havingat least 66 2/3% of the aggregate outstanding principal amount of the RevolvingCredit Loans of all of the Lenders outstanding at such time.

 

**“Responsible Officer”**means, with respect to the Borrower Representative or a Borrower, thePresident, Chief Executive Officer, Chief Financial Officer or Treasurerthereof.

 

**“Revolving Credit Borrowing”**means a group of Revolving Credit Loans of a single Type made by the Lenders ona single date and as to which a single Interest Period is in effect (i.e. anygroup of Revolving Credit Loans made by the Lenders of a different Type, orhaving a different Interest Period (regardless of whether such Interest Periodcommences on the same date as another Interest Period), or made on a differentdate shall be considered to comprise a different Revolving Credit Borrowing).

 

**“Revolving Credit Commitment”**means the commitment of each Lender to make Revolving Credit Loans up to theamount set forth opposite such Lender’s name in Annex I hereto as its RevolvingCredit Commitment as such commitment may be reduced from time to time pursuantto Section 2.9 and/or Section 7 hereof, or adjusted from time to time as aresult of assignments to or from such Lender pursuant to Section 10.2 ofthis Agreement.

 

**“Revolving Credit Loan”**means a loan denominated in Dollars made on a revolving credit basis and madeby a Lender to the Borrowers pursuant to Section 2.1(a) of this Agreement(whether made by a Lender pursuant to a Credit Request or by reason of a DeemedCredit Request).

 

**“Revolving Credit Note”**means the promissory note of the Borrowers payable to the order of a Lender, insubstantially the form of Exhibit A hereto.

 

**“Revolving Credit Termination Date”**means September 30, 2007, or earlier if the Revolving Credit Commitments areterminated pursuant to the terms of this Agreement.

 

**“Secured Bond Asset”**means cash on deposit in the Secured Bond Asset Deposit Account or SecuritiesEntitlements of the Borrowers with respect to Financial Assets held by asecurities intermediary in the Secured Bond Asset Securities Account, in eachcase, in which the Administrative Agent has a perfected security interest bymeans of a Deposit Account Control Letter or a Securities Account ControlLetter.

 

“**Secured Bond Asset Deposit Account**” hasthe meaning specified in Section 3.1(a)(D) of this Agreement.

 

“**Secured Bond Asset Securities Account**”has the meaning specified in Section 3.1(a)(E) of this Agreement.

 

**“Secured Loan Asset”**means cash on deposit in the Secured Loan Asset Deposit Account or SecuritiesEntitlements of the Borrowers with respect to Financial Assets held by asecurities intermediary in the Secured Loan Asset Securities Account, in eachcase, in which the Administrative Agent has a first priority, perfectedsecurity interest for the

 

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benefit of theLenders and the Designated Hedge Creditor by means of a Deposit Account ControlLetter or a Securities Account Control Letter.

 

“**Secured Loan Asset Deposit Account**” hasthe meaning specified in Section 3.1(a)(D) of this Agreement.

 

“**Secured Loan Asset Securities Account**”has the meaning specified in Section 3.1(a)(E) of this Agreement.

 

“**Securities Account****ControlLetter**” means a letter agreement, substantially in the form of Exhibit Mto the Credit Agreement (with such changes as may be reasonably agreed to bythe Administrative Agent) or such other form in form and substance reasonablyacceptable to the Administrative Agent, executed by a Borrower and theAdministrative Agent and acknowledged and agreed to by the relevant ApprovedSecurities Intermediary.

 

“**S&P**” means Standard and Poor’sRating Services, a division of McGraw Hill Companies, Inc., and any successorthereto.

 

**“Solvent”** means,with respect to any Person, as of any date of determination, that: (a) thefair value of the property of the Person as of such date is greater than thetotal amount of the liabilities (including contingent liabilities computed atthe amount that, in light of all the facts and circumstances existing as ofsuch date, represents the amount that can reasonably be expected to become anactual or matured liability) of the Person, (b) the present fair salablevalue of the assets of the Person as of such date is not less than the amountthat will be required to pay the probable liabilities of the Person on itsdebts as they become absolute and matured, (c) the Person is able to payall liabilities of the Person as those liabilities mature, and (d) thePerson does not have unreasonably small capital for the business in which it isengaged or for any business or transaction in which it is about to engage.  The determination of whether a Person isSolvent shall take into account all such Person’s assets and liabilitiesregardless of whether, or the amount at which, any such asset or liability isincluded on a balance sheet of such Person prepared in accordance with GAAP,including assets such as contingent contribution or subrogation rights,business prospects, distribution channels and goodwill.  In computing the amount of contingent orunrealized assets or contingent or unliquidated liabilities at any time, suchassets and liabilities will be computed at the amounts which, in light of all thefacts and circumstances existing at such time, represent the amount thatreasonably can be expected to become realized assets or matured liabilities, asthe case may be.  In computing the amountthat would be required to pay a Person’s probable liability on its existingdebts as they become absolute and matured, reasonable valuation techniques,including a present value analysis, shall be applied using such rates over suchperiods as are appropriate under the circumstances, and it is understood that, inappropriate circumstances, the present value of contingent liabilities may bezero.

 

**“Special Foreign Subsidiaries”**means Intermec International B.V., a Netherlands corporation, IntermecTechnologies GmbH, a German corporation, Intermec Technologies S.r.l., anItalian corporation, Intermec Technologies U.K. Limited, a U.K. corporation,Intermec Technologies S.A.S., a French corporation, and Intermec Technologies,S.A., a Spanish corporation.

 

**“Subsidiary”** means,in respect of any Person that is not a natural Person, a corporation or otherbusiness entity the shares constituting a majority of the outstanding capitalstock (or other form of ownership) or constituting a majority of the votingpower in any election of directors (or shares constituting both majorities) ofwhich are (or upon

 

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the exerciseof any outstanding warrants, options or other rights would be) owned directlyor indirectly at the time in question by such Person or another subsidiary ofsuch Person or any combination of the foregoing.

 

**“Subsidiary Guarantors”**meansall direct and indirect Domestic Subsidiaries of UNOVA, Inc. other than theBorrowers, the Excluded Subsidiaries and the Foreign Subsidiaries.

 

**“Subsidiary Guaranty”**meanseach guaranty, in the form of Exhibit D-3 hereto, executed by a SubsidiaryGuarantor in favor of the Administrative Agent for the benefit of the Lenderspursuant to Section 5.2(l) of this Agreement.

 

**“Subordinated Indebtedness”**means (x) all Indebtedness of the Borrowers or any of their respectiveSubsidiaries, now or hereafter existing, other than the Obligations, and (y)any monetary obligations of the Borrowers or any of their Subsidiaries inconnection with any repurchase or redemption of preferred membership units,equity securities or warrants of the Borrowers or any such Subsidiary, in eachcase, that is expressly subordinated and made junior to, pursuant to the termsof a subordination agreement in form and substance satisfactory to the RequiredLenders, (i) the payment and performance in full of the Obligations and (ii)the payment and performance of the Guaranty Obligations of a Guarantor and(iii) which is and which subordination is evidenced by a written agreement inform and substance satisfactory to the Required Lenders.

 

**“Testing Period”**shall mean, (i) in respect of the Fiscal Quarter ending onDecember 31, 2004, the period commencing on the Closing Date andcontinuing through December 31, 2004, (ii) in respect of the FiscalQuarter ending on March 31, 2005, the period commencing on the ClosingDate and continuing through March 31, 2005, (iii) in respect of theFiscal Quarter ending on June 30, 2005, the period commencing on theClosing Date and continuing through June 30, 2005, and (iv) inrespect of each Fiscal Quarter ending after June 30, 2005, the periodconsisting of the four consecutive Fiscal Quarters then last ended (whether ornot such quarters are all within the same Fiscal Year).

 

**“Third Party Intellectual Property”**means any Intellectual Property not owned by a Borrower.

 

“**Total Acquisition Consideration**” means,with respect to any Permitted Acquisition, the total of all consideration(whether in cash, property or other form of consideration other thanconsideration in the form of equity securities) received by the Person whoseassets or stock is being acquired or by the shareholders thereof in connectionwith the Permitted Acquisition but excluding in all circumstances considerationconsisting of equity securities of UNOVA, Inc. For avoidance of doubt, consideration in the form of equity securitiesshall not be included in the determination of Total Acquisition Consideration.

 

**“Trademarks”** means,with respect to any Borrower or Subsidiary, all United States trademarks,service marks, trade names, trade dress or other indicia of trade origin ofsuch Borrower, whether registered or unregistered, United States trademark andservice mark registrations and applications for trademark or service markregistrations and any extension, modification or renewal thereof, whether nowexisting or hereinafter acquired.

 

**“Type”** means a LIBORRate Loan or an Alternate Base Rate Loan, as applicable.

 

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** **

**“United States”** and **“U.S.”** each means United States of America.

 

**“UCC”** means theUniform Commercial Code as from time to time in effect in the State of NewYork; provided, however, that in the event that, by reason ofmandatory provisions of Law, any or all of the attachment, perfection orpriority of the Administrative Agent’s security interest in any Collateral isgoverned by the Uniform Commercial Code as in effect in a jurisdiction otherthan the State of New York, the term “UCC” shall mean the Uniform CommercialCode as from time to time in effect in such other jurisdiction for purposes ofthe provisions hereof relating to such attachment, perfection or priority andfor the purposes of definitions related to such provisions; provided, further,that if the UCC is amended after the date hereof, such amendment will not begiven effect for the purposes of this Agreement if and to the extent the resultof such amendment would be to limit or eliminate any item of Collateral.

 

**“Unpaid Reimbursement Obligation”**has the meaning set forth in Section 2.2(e) of this Agreement.

 

**“USA Patriot Act”**shall mean the Uniting and Strengthening America by Providing Appropriate ToolsRequired to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, asthe same has been, or shall hereafter be, renewed, extended, amended orreplaced.

 

**“U.S. Lender”** hasthe meaning set forth in Section 12.3(b)(ii) ofthis Agreement.

 

**“Withdrawal Liability”**means (in respect of any Borrower, its Subsidiaries and their ERISAAffiliates), at any date of determination, the amount equal to the aggregatepresent value (as defined in Section 3(27) of ERISA) at such date of theamount of withdrawal liability claimed to have been incurred as a result of awithdrawal within the scope of Title IV of ERISA from any Employee Benefit Planless any portion thereof as to which such Borrower reasonably believes,after appropriate consideration of the possible adjustments arising undersubtitle E of Title IV of ERISA, such Borrower, its Subsidiaries and theirERISA Affiliates will have no liability.

 

**“Wholly-Owned Subsidiary”**means, in respect of any Person, a Subsidiary of such Person in which suchPerson owns directly or indirectly all of the outstanding capital stock (orother form of ownership) and controls all of the voting power in any electionof directors or otherwise.

 

**1.2          Accounting Terms; Calcu****lations.** All accounting and financial terms not specificallydefined herein shall be construed in accordance with GAAP as in effect fromtime to time.  In all cases, suchaccounting and financial terms shall be applied on a basis consistent withthose applied in the preparation of consolidated audited financial statementsof UNOVA, Inc. and its consolidated Subsidiaries for the Fiscal Year endingDecember 31, 2003 (audited by Deloitte & Touche LLP); provided, however, ifany change in GAAP in itself affects the calculation of any financial covenantset forth in this Agreement, the Borrower Representative may by written noticeto the Administrative Agent, or the Administrative Agent may, by written noticeto the Borrower Representative, require that such covenant thereafter becalculated in accordance with GAAP as in effect (and applied by UNOVA, Inc.)immediately before such change in GAAP occurs. If any such notice is given, compliance certificates delivered pursuantto this Agreement after such change shall be accompanied by reconciliations ofthe difference between the calculation set forth therein and a calculation madein accordance with GAAP as in effect from time to time after such changeoccurs.

 

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**1.3          Authorization of Borrower Repr****esentative.** For purposes of this Agreement, each of theBorrowers hereby: (i) authorizes the Borrower Representative to make suchrequests, give such notices, furnish such certificates or execute such consentsas may be required, permitted, requested by or under this Agreement for thebenefit of such Borrower, (ii) authorizes the Borrower Representative toexecute applications for Letters of Credit hereunder on behalf of suchBorrower, and (iii) authorizes the Administrative Agent to treat suchrequests, notices, certificates or consents made, given or furnished by theBorrower Representative or applications executed by the Borrower Representativeon behalf of a Borrower for the issuance of a Letter of Credit, as having beenmade, given or furnished by such Borrower for purposes of this Agreement.  Each of the Borrowers agrees to be bound byall such requests, notices, certificates and consents and other such actions bythe Borrower Representative and agrees that all notices to and demands upon theBorrower Representative in respect of any Borrower shall constitute effectivenotice to and demand upon such Borrower for all purposes hereof.

 

**1.4          Construction of Ter****ms Generally.** In this Agreement, for the purpose ofcomputing periods of time from a specified date to a later specified date, theword “from” means “from and including” and the words “to” and “until” each mean“to but excluding”.  Unless the contextotherwise requires, (a) any definition of or reference to any agreement,instrument or other document herein shall be construed as referring to suchagreement, instrument, or other document as from time to time amended, supplementedor otherwise modified as permitted hereunder, (b) any reference herein toany Person shall be construed to include such Person’s successors and assigns,(c) the words “herein,” “hereof,” and “hereunder,” and words of similarimport, shall be construed to refer to this Agreement in its entirety and notany particular provision hereof, (d) the word “including” means “includingwithout limitation” and (e) any reference to payment, repayment, orprepayment shall be construed as referring to payment of immediately availablefunds in Dollars.

 

**1.5          USA Patriot****Act Notification; Representations and Undertaking.**

 

**(a)           Borrower****’s Notification and Representation.** The Borrowers are herebynotified that federal Law requires all financial institutions to obtain, verify,and record information that identifies each person or entity that opens anaccount, including any deposit account, treasury management account, loan,other extension of credit, or other financial services product.  Each Borrower agrees to provide suchdocumentary and other evidence of such Borrower’s identity as may be reasonablyrequested by the Administrative Agent at any time to enable the AdministrativeAgent to verify such Borrower’s identity or to comply with any applicable Lawor regulation, including, without limitation, the USA Patriot Act.

 

**(b)           Lenders’****Certification.** Each Lender or assignee or participant of aLender that is not incorporated under the Laws of the United States or a statethereof (and is not excepted from the certification requirement contained inSection 313 of the USA Patriot Act and the applicable regulations becauseit is both (i) an affiliate of a depository institution or foreign bankthat maintains a physical presence in the United states or foreign country and(ii) subject to supervision by a banking authority regulating suchaffiliated depository institution or foreign bank) shall deliver to theAdministrative Agent the certification, or, if applicable, recertification,certifying that such Lender, assignee or participant, as applicable, is not a “shell”and certifying to other matters as required by Section 313 of the USAPatriot Act and the applicable regulations: (1) within ten (10) days after therequest by the Administrative Agent, and (2) at such other times as arerequired under the USA Patriot Act.

 

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# **Section 2**                                             TERMS OF THE CREDIT FACILITIES.

 

**2.1       Revolving**Credit Facility.

 

**(a)           Revolving Credit Loans****.** Subject to the terms and conditions set forth in thisAgreement, each of the Lenders severally agrees to make, from time to time onand after the Closing Date until and including the Business Day immediatelypreceding the Revolving Credit Termination Date, Revolving Credit Loans to theBorrowers; provided, however, that the outstanding principalamount of Revolving Credit Loans by such Lender plus the LC Exposure of suchLender shall not at any time exceed the amount of the Revolving CreditCommitment of such Lender in effect at such time; provided, further,that: (A) during any period of time in which a Reference Rating Upgrade doesnot exist, the aggregate outstanding principal amount of Revolving Credit Loansplus LC Exposure of the Lenders shall not at any time during such period exceedan amount equal to the sum of (i) Fifty Million Dollars ($50,000,000) plus(ii) the amount of Secured Loan Assets in which Administrative Agent has afirst priority, perfected security interest for the benefit of the Lenders and(B) during any period of time in which a Reference Rating Upgrade exists, theaggregate outstanding principal amount of Revolving Credit Loans plus LCExposure of the Lenders shall not at any time during such period exceed thegreater of (1) Fifty Million Dollars ($50,000,000) and (2) the lesser of: (x)an amount equal to the sum of the Asset Coverage at such time plus the amountof Secured Loan Assets in which Administrative Agent has a first priority,perfected security interest for the benefit of the Lenders or (y) the RevolvingCredit Commitments of the Lenders in effect at such time.  Within the limits set forth in thisAgreement, the Borrowers may borrow, prepay and reborrow Revolving CreditLoans.  The Revolving Credit Loans shallbe comprised of one or more Revolving Credit Borrowings as the Borrowers mayelect from time to time, by delivery to the Administrative Agent by theBorrower Representative of a Credit Request or a Rate Conversion/ContinuationRequest in accordance with this Agreement. Each Revolving Credit Borrowing comprised of LIBOR Rate Loans shall bein an aggregate amount of not less than One Million Dollars ($1,000,000) or anintegral multiple of One Million Dollars ($1,000,000) in excess thereof andeach Revolving Credit Borrowing comprised of Alternate Base Rate Loans shall bein an aggregate amount of not less than One Hundred Thousand Dollars ($100,000)or an integral multiple of Fifty Thousand Dollars ($50,000) in excess thereof.

 

**(b)           Revolving Credit Notes****.** Each Lender’s Revolving Credit Loans to a Borrower shallbe evidenced at all times by a Revolving Credit Note which shall: (i) beexecuted and delivered by such Borrower and payable to the order of such Lenderand (ii) be in a stated principal amount equal to the Revolving CreditCommitment of such Lender and payable for the unpaid principal amount of theRevolving Credit Loans evidenced thereby, (iii) mature on the RevolvingCredit Termination Date, (iv) bear interest as provided in this Agreement,(v) be subject to mandatory prepayment as provided in this Agreement, and(vi) be entitled to the benefits of this Agreement and the other LoanDocuments.

 

**2.2       Letterof Credit Facility.**

 

**(a)           Issuance of Letters of Credit****.** Subject to theterms and conditions set forth in this Agreement, the LC Issuer agrees to issueLetters of Credit for the account of any Borrower or for the account of anynon-borrower Subsidiary thereof (the Borrower and Subsidiary being individuallya “Letter of Credit Obligor” and collectively “Letter of Credit Obligors”) andto renew, extend and amend such Letters of Credit; provided, however,that, the aggregate LC Exposure plus the outstanding principal amount ofRevolving Credit Loans by the Lenders shall not at any time exceed theRevolving Credit Commitments of the Lenders at such time; provided, further,that: (A) during any period of time a Reference Rating Upgrade does not exist,the aggregate LC Exposure of the Lenders plus the aggregate outstandingprincipal amount of Revolving Credit Loans of the Lenders shall not at any timeduring such period exceed an

 

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amount equal to the sum of (i)Fifty Million Dollars ($50,000,000) plus (ii) the amount of Secured LoanAssets in which Administrative Agent has a perfected security interest for thebenefit of the Lenders and (B) during any period of time a Reference RatingUpgrade exists, the aggregate LC Exposure of the Lenders plus the aggregateoutstanding principal amount of Revolving Credit Loans of the Lenders shall notat any time during such period exceed the greater of (1) Fifty Million Dollars($50,000,000) and (2) the lesser of: (x) an amount equal to the sum of theAsset Coverage at such time plus the amount of Secured Loan Assets inwhich Administrative Agent has a first priority, perfected security interest forthe benefit of the Lenders or (y) the Revolving Credit Commitments of theLenders in effect at such time.

 

**(b)           Form and Term of****Letters of Credit.** Each Letter of Credit shall be issued insuch form as the LC Issuer may reasonably require subject (i) in the case ofdocumentary letters of credit, to the Uniform Customs and Practice forDocumentary Credits (1993 Revision), International Chamber of CommercePublication No. 500, and any subsequent revisions thereof adhered to bythe LC Issuer, and (ii) in the case of standby letters of credit, to theInternational Standby Practices (1998), International Chamber of CommercePublication No. 590, and any subsequent revisions thereof adhered to by the LCIssuer.  Each Letter of Credit shall: (w)permit drawings upon presentation of one or more sight drafts and such otherdocuments as specified by the Borrower Representative in the Letter of CreditRequest delivered pursuant to Section 2.3(b) below and agreed to by suchLC Issuer, which drawings shall occur on or prior to the applicable expirationdate of such Letter of Credit, (x) by its terms, provide for payment ofdrawings only in Dollars, (y) in the case of a standby Letter of Credit,by its terms expire no later than the earlier of: (I) the date eighteen (18) monthsafter the date of issuance of such Letter of Credit (or, in the case of renewalor extension thereof, eighteen (18) months after such renewal or extension) and(II) the date which is not later than the fifteenth (15th) Business Day priorto the Revolving Credit Termination Date; provided, however, thateach standby Letter of Credit may, upon the request of the applicable Borrower,include a provision whereby such Letter of Credit shall be renewedautomatically for additional consecutive periods of eighteen (18) months orless (but not beyond the date that is fifteen (15) Business Days prior to theRevolving Credit Termination Date) unless the LC Issuer notifies thebeneficiary at least 30 days prior to the then-applicable expiration datethat such Letter of Credit will not be renewed and (z) in the case of adocumentary Letter of Credit, by its terms expire at or prior to the close ofbusiness on the earlier of (i) the date 12 months after the date of theissuance of such commercial Letter of Credit and (ii) the date which isnot later than the fifteenth (15th) Business Day prior to the Revolving CreditTermination Date.

 

**(c)           Application with Respect to****Letter of Credit.** Concurrently with each Letter of CreditRequest, the Borrowers shall cause the applicable Letter of Credit Obligor toexecute and deliver to the LC Issuer in respect of such requested Letter ofCredit an application with respect to such Letter of Credit, in the LC Issuer’sthen standard form; provided, however, that in the event of anyconflict between the provisions of any such application agreement and thisAgreement, the provisions of this Agreement shall govern.

 

**(d)           Participation by Lenders in****Letters of Credit.** By its issuance of a Letter of Credit andwithout further action on its part, the LC Issuer hereby grants to each Lender,and each Lender hereby acquires from the LC Issuer, an undivided participationin such Letter of Credit equal to such Lender’s Pro Rata Share of such Letterof Credit’s face amount, effective on the date of the issuance of such Letterof Credit.  In consideration, each Lenderhereby absolutely and unconditionally agrees to pay to the Administrative Agentfor the account of the LC Issuer such Lender’s Pro Rata Share of eachdisbursement made by the LC Issuer in respect of such Letter of Credit and notreimbursed by the applicable Letter of Credit Obligor or the Borrowers.  Each Lender acknowledges and agrees that itsobligation to acquire such participations pursuant to this Section is absoluteand unconditional and shall not be affected by any event or circumstancewhatsoever, including the occurrence of any Potential Default or

 

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Event of Default hereunder orthe failure of any condition precedent in this Agreement to be satisfied andeach payment in satisfaction thereof shall be made without any offset,abatement, withholding or reduction whatsoever; provided, however,that the foregoing shall not be construed to excuse the LC Issuer fromliability to any Lender to the extent of any direct damages suffered by suchLender that are caused by the LC Issuer’s gross negligence, willful misconductor bad faith.

 

**(e)           Reimbursement****.** The Borrowers agree that whenever there is a drawing on aLetter of Credit issued by the LC Issuer hereunder, the resulting reimbursementobligation shall be immediately due and payable and the Borrowers shall causethe applicable Letter of Credit Obligor to pay on the date of such drawing, orthe Borrowers shall otherwise pay pursuant to Section 9.1 of this Agreement onthe date of such drawing, to the Administrative Agent for the account of the LCIssuer an amount equal to the amount of such drawing.  The Administrative Agent shall promptly remitany such payment to the LC Issuer.

 

**(f)            Failure to Reimburse****Drawings; Interest.** In the event the Letter of CreditObligor for whose account any Letter of Credit was issued fails, and theBorrowers fail on behalf of such Letter of Credit Obligor, to reimburse the LCIssuer the amount of any drawing, together with any accrued interest thereon,to the Administrative Agent on the date of such drawing on a Letter of Credit,such failure shall constitute a Deemed Credit Request requesting an AlternateBase Rate Loan to be made to the Borrowers in an aggregate amount equal to theamount reimbursable to the LC Issuer plus any accrued interest thereon and therelated Credit Event, without regard to any minimums and multiples lendingamounts specified hereunder, but subject to satisfaction of the conditions precedentset forth in Section 3.2 of this Agreement.  The Administrative Agent shall disburse allsuch loan proceeds directly to the LC Issuer to satisfy the reimbursementobligation.  For the avoidance of doubt,after giving effect to the Deemed Credit Request and any Revolving Credit Loanmade pursuant to this Section 2.2(f) (including any Revolving Credit Loandeemed pursuant to the immediately following paragraph), the Borrowers shall bedeemed to have reimbursed in full such drawing on such Letter of Credit.

 

In the eventthat any of the conditions precedent set forth in Section 3.2 are notsatisfied, each Lender shall be obligated to consummate the purchase, on thedate the Revolving Credit Loan would have been made pursuant to thisSection 2.2(f), of its undivided participating interest in the outstandingunpaid reimbursement obligation (the “Unpaid Reimbursement Obligation”) owingto the LC Issuer.  On the purchase date,each such Lender shall pay to the Administrative Agent, for the benefit of theLC Issuer, in immediately available funds, at the account of the AdministrativeAgent maintained at the Payment Office of the Administrative Agent not laterthan the time such Lender would have been obligated to fund its RevolvingCredit Loan pursuant to this Section, a purchase price for such participatinginterest in an amount equal to its Pro Rata Share of the Unpaid ReimbursementObligation.  After the date of suchpurchase, the outstanding Unpaid Reimbursement Obligation shall bear interestfor the account of the LC Issuer for each day from and including the date ofsuch drawing until the earlier of: (i) the date of reimbursement by theapplicable Letter of Credit Obligor or by the Borrowers, as the case may be,and (ii) the date on which such drawing is reimbursed by Revolving Credit Loansas provided in the first paragraph Section 2.2(f), at the rate per annum thatwould apply to the amount of such Unpaid Reimbursement Obligation if suchamount were a Revolving Credit Borrowing comprised of Alternate Base RateLoans.  After the date of such purchase,any payment by the Borrower to the Administrative Agent on behalf of the LCIssuer with respect to the Unpaid Reimbursement Obligation, together withinterest thereon, shall be promptly distributed by the Administrative Agent toeach Lender based on its Pro Rata Share. For the avoidance of doubt, any Unpaid Reimbursement Obligation shall bedeemed to be a Revolving Credit Loan hereunder for all purposes of thisAgreement and the other Loan Documents until such Unpaid ReimbursementObligation is repaid by the Borrowers in full, together with interest thereonas herein specified.

 

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**(g)           Obligations Absolute****.** Subject to Section 2.2(h), the obligation of theBorrowers to cause the Letter of Credit Obligor whose account any Letter ofCredit is issued to reimburse the LC Issuer, and the Obligation of theBorrowers to reimburse the LC Issuer if such Letter of Credit Obligor does nototherwise reimburse the LC Issuer, shall be absolute and unconditional andshall be performed under all circumstances including, without limitation:(i) any lack of validity or enforceability of any Letter of Credit,(ii) the existence of any claim, offset, defense or other right that suchLetter of Credit Obligor or the Borrowers may have against the beneficiary ofany Letter of Credit or any successor in interest thereto, (iii) theexistence of any claim, offset, defense or other right that any Lender or theAdministrative Agent may have against such Letter of Credit Obligor, theBorrowers or the beneficiary of any Letter of Credit or against any successorin interest thereto, (iv) the existence of any fraud or misrepresentationin the presentment of any draft or other item drawn and paid under any Letterof Credit by any Person other than the LC Issuer, (v) any payment of anydraft or other item by the LC Issuer which does not strictly comply with theterms of any Letter of Credit issued by such LC Issuer, (vi) any statementor any other documents presented under any Letter of Credit proving to beinsufficient, forged, fraudulent or invalid in any respect or any statementtherein being untrue or inaccurate in any respect whatsoever, (vii) anyact, error, neglect or default, omission, insolvency or failure of business ofany of the correspondents of the LC Issuer or (viii) a Potential Default orEvent of Default has occurred and is continuing.

 

**(h)           Liability of****LC Issuer.** It is expressly understood and agreed that theabsolute and unconditional obligation of the Borrowers to cause each Letter ofCredit Obligor to reimburse the LC Issuer, and the absolute and unconditionalObligation of the Borrowers hereunder to reimburse the LC Issuer should suchLetter of Credit Obligor fail to reimburse the LC Issuer, for disbursementswith respect to a Letter of Credit for the account of such Letter of CreditObligor shall not be construed to excuse the LC Issuer from liability to suchLetter of Credit Obligor to the extent of any direct damages (as opposed to consequentialdamages, claims in respect of which are hereby waived by each of the Borrowersto the extent permitted by applicable Law) suffered by the Letter of CreditObligor that are caused by the gross negligence, willful misconduct or badfaith of such LC Issuer in determining whether drafts and other documentspresented under a Letter of Credit comply with the terms thereof.  The parties agree that each LC Issuer mayaccept documents that appear on their face to be in order, withoutresponsibility for further investigation, regardless of any notice orinformation to the contrary, and may make payment upon presentation ofdocuments that appear on their face to be in substantial compliance with theterms of such Letter of Credit.  Anyaction, inaction or omission on the part of the LC Issuer or any of itscorrespondents, under or in connection with any Letter of Credit issued by theLC Issuer or any renewal or extension thereof or the related instruments ordocuments, if taken in good faith and in conformity with applicable Laws andregulations governing Letters of Credit generally and the terms of thisSection, shall be binding upon the Borrowers and shall not place the LC Issueror any of its correspondents under any liability to any of the Borrowers.

 

**(i)            LCIssuer****Indemnity.**The Borrowers shall indemnify the LC Issuer from and against any loss,liability or out-of-pocket expenses (other than any caused by the LC Issuer’sgross negligence or willful misconduct as determined by the final judgment of acourt of competent jurisdiction, the indemnification for which shall begoverned solely and exclusively by Section 12.6 of this Agreement)incurred by the LC Issuer in respect of this Agreement and the Letters ofCredit issued by the LC Issuer for the account of any Borrower, including,without limitation, reasonable fees and expenses of legal counsel incurred bysuch LC Issuer in the defense of any claim against it or in the prosecution ofits rights and remedies.

 

**(j)            Termination****of Letter of Credit Commitment.** If: (i) any court,arbitrator, or governmental authority shall enjoin or restrain money centerbanks generally from issuing letters of credit of the type of the requestedLetter of Credit, or any Law, rule or

 

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regulation applicable to moneycenter banks generally or any request or directive (whether having the force ofLaw) from any governmental authority with jurisdiction over money center banksshall prohibit, or request the LC Issuer to refrain from issuing Letters ofCredit generally or maintaining its commitment to issue Letters of Credithereunder or (ii) there shall have occurred, at any time during the termof this Agreement: (A) any outbreak of hostilities or other national orinternational crisis or change in economic conditions if the effect of suchoutbreak, crisis or change would make the issuance of Letters of Creditimpracticable, (B) the enactment, publication, decree or otherpromulgation of any Law which could reasonably be expected to materially andadversely affect the ability of the Borrowers (taken as a whole) to performtheir obligations under this Agreement or any reimbursement agreement, or(C) the taking of any action by any government or agency in respect of itsmonetary or fiscal affairs which could have a material adverse effect on theissuance of Letters of Credit, then the LC Issuer shall give written notice ofthe occurrence of such event to the Borrower Representative and theAdministrative Agent whereupon the commitment of the LC Issuer to issue orextend any Letter of Credit shall be suspended on the effective date of suchnotice and shall continue to be suspended until such notice is rescinded by theLC Issuer by prompt written notice to the Borrower Representative.

 

**2.3       CreditRequests.**

 

**(a)           Credit Requests****for Revolving Credit Loans.** Requests for Revolving CreditLoans shall be given by the Borrower Representative to the Administrative Agentnot later than 1:00 p.m. (Eastern Time): (i) on the Business Day which is the requested date of a proposedRevolving Credit Borrowing comprised of Alternate Base Rate Loans and (ii) onthe Business Day which is three (3) Business Days before the requested date ofa proposed Revolving Credit Borrowing comprised of LIBOR Rate Loans (anyRevolving Credit Loans on the Closing Date shall be Alternate Base RateLoans).  Each such request (a “CreditRequest”) shall be a written or telephonic notice (in the case of a telephonicnotice, promptly confirmed in writing). Each written Credit Request or written confirmation shall besubstantially in the form of Exhibit B-1 attached hereto, signed orotherwise acceptably authenticated by the Borrower Representative andtransmitted by the Borrower Representative to the Administrative Agent by telecopier or electronic mail.  Each Credit Request shall be irrevocable andbinding on the Borrowers and be subject to the indemnification provisions ofthis Agreement.

 

**(b)           Requests and****Conditions for Letters of Credit.** Requests for Letters ofCredit for the account of the Borrowers, or the amendment, renewal, orextension of an outstanding Letter of Credit, shall be given by the BorrowerRepresentative to the Administrative Agent and LC Issuer not later than 1:00p.m. (Eastern Time) three (3) Business Days prior to the specified date for theissuance of the requested Letter of Credit. Each such request (a “Letter of Credit Request”) shall be a writtennotice.  Such request shall besubstantially in the form of Exhibit B-2 attached hereto, signed orotherwise acceptably authenticated by the Borrower Representative andtransmitted by the Borrower Representative to the Administrative Agent by telecopier or electronic mail.  Each Letter of Credit Request shall specifythe proposed issuance date of the requested Letter of Credit (which shall be aBusiness Day), the amount of the Letter of Credit, the expiry date as permittedby Section 2.2(b) of this Agreement, the name and address of the beneficiaryand such other matters as the LC Issuer may require.

 

**(c)           Requests for Revolving****Credit Borrowing Deemed Given.** The Borrowers shall be deemedto have made a request for a Revolving Credit Borrowing (a “Deemed CreditRequest”), which Deemed Credit Request shall be irrevocable: (x) in theevent of an unreimbursed drawing under a Letter of Credit, for a RevolvingCredit Borrowing in an amount equal to the amount necessary to reimburse the LCIssuer for such drawing as set forth in Section 2.2(f) and (y) uponany interest, fee or other payment Obligation of the Borrowers hereunderbecoming due without payment within the applicable grace period set forth in

 

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Section 6.1, for aRevolving Credit Borrowing in an amount necessary to pay such interest, fee orpayment obligation; each Revolving Credit Borrowing deemed requested under thisSection shall be comprised of Alternate Base Rate Loans.  Each Lender agrees that its obligation tomake or participate in Revolving Credit Loans pursuant to a Deemed CreditRequest is absolute and unconditional and shall not be affected by anycircumstance whatsoever, including the occurrence of any Potential Default orEvent of Default or the failure of any condition precedent.

 

**2.4          Fundingof Revolving Credit Loans.**

** **

**(a)           Notice and Funding****.** The Administrative Agent shall notify each Lender requiredto fund a Revolving Credit Borrowing by telecopy, telephone or similar form oftransmission of a Credit Request or a Deemed Credit Request not later 2:30 p.m.(Eastern Time) on the date such Credit Request is received in compliance withSection 2.3 of this Agreement or the date such Deemed Credit Request is deemedreceived.  Prior to the later of 4:30p.m. (Eastern Time) on the requested funding date applicable to each suchCredit Request or Deemed Credit Request, each Lender will make available to theAdministrative Agent, in Dollars, in immediately available funds, at theaccount of the Administrative Agent maintained at the Payment Office, suchLender’s Pro Rata Share of the amount of the requested Revolving CreditBorrowing.

 

**(b)           Disbursement of Funds Received****.** On the Closing Date, if applicable, upon theAdministrative Agent’s receipt of funds representing a Lender’s RevolvingCredit Loan, and subject to the terms and conditions set forth in this Agreement,the Administrative Agent shall make the Revolving Credit Loan of such Lenderavailable to the Borrowers, in Dollars in immediately available funds, by wiretransfer or intrabank transfer: (A) to the Operating Account of theBorrowers or (B) to such other account of the Borrowers as reasonablyinstructed by the Borrower Representative. After the Closing Date, on the date specified by the BorrowerRepresentative in any Credit Request (or, in the case of a Deemed CreditRequest, on the earliest date permitted after such Deemed Credit Request),after the Administrative Agent’s receipt of the funds representing a Lender’sPro Rata Share of the requested Revolving Credit Borrowing and subject to theterms of this Agreement, the Administrative Agent will make the RevolvingCredit Loan of such Lender available to the Borrowers in immediately availablefunds in Dollars, by wire transfer or intrabank transfer: (A) to suchOperating Account or (B) to such other account as the BorrowerRepresentative may instruct from time to time.

 

**(c)           Availability of Funds****.** Unless the Administrative Agent shall have received noticefrom a Lender prior to the time of any Revolving Credit Borrowing that suchLender will not make available to the Administrative Agent such Lender’s ProRata Share of the Revolving Credit Borrowing, the Administrative Agent mayassume that such Lender has made its Pro Rata Share of such Revolving CreditBorrowing available to the Administrative Agent on the date specified for suchRevolving Credit Borrowing in accordance with Section 2.4(a) of thisAgreement.  In each case, and in relianceupon such assumption, the Administrative Agent may, but shall not be obligatedto, make available to the Borrowers funds in the amount of such Lender’s ProRata Share.  Any disbursement by theAdministrative Agent in reliance on such assumption shall be deemed to be aRevolving Credit Loan by such Lender.

 

**2.5          Failure of Lender to Fund Revolving****Credit Loans or Purchase Participations.** If any Lender hasnot made available to the Administrative Agent funds for such Lender’s Pro RataShare of any Revolving Credit Borrowing, such Lender shall pay such amount tothe Administrative Agent immediately upon demand by the AdministrativeAgent.  If any such Lender does not paysuch amount to the Administrative Agent upon such demand, the AdministrativeAgent shall promptly request payment thereof from the Borrowers, and theBorrowers shall immediately pay such amount to the Administrative Agent.  Such Lender and the Borrowers shall be liableto pay interest to the Administrative Agent on such amount for each

 

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day from the date such amountshould otherwise have been made available to the Administrative Agent until thedate any such amount is paid to the Administrative Agent at a per annum rate ofinterest equal to: (x) if paid by such Lender, as the case may be, theFederal Funds Effective Rate or (y) if paid by the Borrowers, the interestrate applicable to such Revolving Credit Borrowing.  Any payment by the Borrowers shall be withoutprejudice to any claim the Borrowers may have against a Defaulting Lender.

 

**(a)           Continuing Obligation of theBorrowers.**Failure of any Lender to fund its ProRata Share of any Revolving Credit Borrowing or to pay any participationpurchase price shall not excuse the performance by any Borrower of any of suchBorrower’s duties or obligations hereunder. If any such Lender funds such Lender’s Pro Rata Share of such RevolvingCredit Borrowing or participation purchase price prior to repayment of suchamount by the Borrowers, the amount so repaid shall constitute such Lender’sshare or participation payment and the Borrowers shall have no furtherobligation to pay.

 

**(b)           Treatment of Lender Failing To****Fund.** The Administrative Agent shall not be obligated totransfer to a Defaulting Lender any payments made by the Borrowers for thebenefit of such Lender until such Lender has cured the applicable LenderDefault.  Until the earlier of suchDefaulting Lender’s cure of its Lender Default or the termination of theRevolving Credit Commitments, all amounts repaid to the Administrative Agent bythe Borrowers which would otherwise be required to be applied to such Lender’sRevolving Credit Loans shall be advanced to the Borrowers by the AdministrativeAgent on behalf of such Defaulting Lender to cure, in full or in part, suchLender Default, but shall nevertheless be deemed to have been paid to suchDefaulting Lender in satisfaction of the Obligations to which such paymentwould otherwise have been applied. Except in the event the Revolving Credit Commitments are terminatedpursuant to the terms hereof, no Defaulting Lender shall have any voting orconsent rights under this Agreement and shall not constitute a “Lender” (or beincluded in the calculation of “Required Lenders”) for any voting or consentrights under this Agreement.  The termsof this Section shall remain effective with respect to such Defaulting Lenderuntil such time as no Lender Default exists with respect to such Lender.

 

**(c)           Continuing Obligation of Lenders****to Fund.** It is understood that: (i) a Lender shall notbe responsible for any failure by any other Lender to perform its obligation tomake any Revolving Credit Loans hereunder or pay any participation purchaseprice for its participating interests hereunder, (ii) the Revolving CreditCommitment of a Lender shall not be increased or decreased as a result of anyfailure by any other Lender to perform its obligation to make any RevolvingCredit Loans or pay such participation purchase price hereunder,(iii) failure by any Lender to perform its obligation to make anyRevolving Credit Loans or pay any participation purchase price hereunder shallnot excuse any other Lender from its obligation to make any Revolving CreditLoans hereunder or pay any participation purchase price for its participatinginterests hereunder and (iv) the obligations of each Lender hereundershall be individual and several, not joint and several.

 

**2.6          Affiliated Funding with respect****to Lenders.** All or any part of a Revolving Credit Loan thatany Lender may be obligated to fund pursuant to this Agreement: (i) may befunded by such Lender on behalf of such Lender’s Lending Installation or(ii) may be funded on such Lender’s behalf by such Lender by and throughany such Lending Installation; provided that, (a) if any LendingInstallation fails to fund all or any part of such Revolving Credit Loan, suchLender shall be obligated to fund such Revolving Credit Loan pursuant to theterms hereof, (b) in no event shall any such funding by any LendingInstallation increase the costs or expenses for which the Borrowers are liableunder this Agreement and (c) in no event shall any such funding on behalfof or through any such Lending Installation require the Borrowers to pay anyamounts in respect of Non-Excluded Taxes or Other Taxes without such Lenderbeing subject to the exercise by the Borrowers of their rights underSection 12.3 of this Agreement.  Thefunding

 

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of a Revolving Credit Loan by aLending Installation hereunder shall utilize the Revolving Credit Commitment ofsuch Lender to the same extent, and as if, such Revolving Credit Loan werefunded by such Lender, and for purposes of this Agreement, such RevolvingCredit Loan shall be deemed to have been made directly by such Lender.

 

**2.7          LoanAccount; Credits; Application of Payme**nts.

 

**(a)           Administrative Agent Maintenance ofLoan****Account.** TheAdministrative Agent shall maintain on its books and records a Loan Account(the “Loan Account”) in respect of the Borrowers which shall reflect:(i) with respect to Revolving Credit Borrowings: (x) the outstandingRevolving Credit Loans to the Borrowers, (y) the Pro Rata Share of each Lenderin the outstanding Revolving Credit Loans to the Borrowers, and(z) accrued interest on the Revolving Credit Loans payable by theBorrowers, (ii) all Letter of Credit drawings and (iii) all otherObligations of the Borrowers that have become payable hereunder.  Each entry by the Administrative Agent in theLoan Account shall be, to the extent permitted by applicable Law, conclusiveabsent manifest error.  Such entries bythe Administrative Agent shall not be a condition to the Borrowers’ obligationto repay the Obligations.  To the extentapplicable pursuant to Treasury Regulation Section 5f.103-1(c), theAdministrative Agent shall maintain on the Loan Account, for the benefit of theBorrowers, a record of any Foreign Lenders.

 

**(b)           Loan Account Charges\Credits; Reports****.** Each Borrower hereby authorizes the Administrative Agentto charge the Loan Account of the Borrowers with all Revolving Credit Loans andall other Obligations of the Borrowers under this Agreement or any other LoanDocument.  The Loan Account of the Borrowerswill be credited in accordance with the provisions of this Agreement with allpayments received by the Administrative Agent directly from the Borrowers orotherwise for the account of the Borrowers. The Administrative Agent shall send the Borrower Representativestatements in accordance with the Administrative Agent’s standardprocedures.  Any and all such periodic orother statements or reconciliations of the Loan Account shall be final, bindingand conclusive upon the Borrowers in all respects, absent manifest error,unless the Administrative Agent receives specific written objection (includingemail) thereto from the Borrower Representative within forty-five (45) BusinessDays after any such statement or reconciliation has been sent to the Borrower Representative.  Such notice shall only be deemed an objectionas to those items specifically objected to therein.

 

**(****c****)           Crediting andApplication of Specific****Payments.** TheBorrowers shall make all other payments to be made by the Borrowers under thisAgreement with respect to the Obligations not later than 4:00 p.m. (EasternTime) on the day when due, without setoff, counterclaim, defense or deductionof any kind, to the Administrative Agent’s account maintained at the PaymentOffice of the Administrative Agent. Payments received after 4:00 p.m. (Eastern Time) shall be deemed to havebeen received on the next succeeding Business Day.  Prior to the occurrence of an Event ofDefault which is continuing, the Borrower Representative may specify to theAdministrative Agent, at the time of the Borrowers making any such paymenthereunder, the Obligations of the Borrowers to which such payment is to beapplied.  If the Borrower Representativedoes not specify an application for such payment or if an Event of Default hasoccurred and is continuing, the Administrative Agentshall apply such payment to such Obligations as provided in Section 7.4(d)of this Agreement.

 

**(d)           Payments, Distributions, Treatment.**Subject to periodic settlement of accounts among the Lenders as provided for inthis Agreement, after receipt of any payment by the Administrative Agent, theAdministrative Agent will cause to be distributed, on the day of receipt of anypayment, like funds relating to such payment (other than amounts payable solelyto the Administrative Agent or solely to the applicable LC Issuer pursuant toSection 2.14) ratably to each of the Lenders in accordance with its Pro RataShare at such Lender’s Lending

 

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Office.  Except as set forth in Sections 2.14 and7.5 of this Agreement, each Revolving Credit Borrowing and participatinginterest hereunder, each payment or prepayment of principal of any RevolvingCredit Borrowing, any reduction of commitments, each payment of interest on theRevolving Credit Loans, and each payment of the fees provided for hereundershall be allocated among the Lenders ratably in accordance with each Lender’sPro Rata Share thereof.

 

**(e)           Payment not****on Business Day.**Whenever any payment hereunder or under theRevolving Credit Notes shall be stated to be due on a day other than a BusinessDay, such payment shall be made on the next succeeding Business Day.  Any such extension or reduction of time shallin such case be included in the computation of payment of interest, fees orother compensation, as the case may be, provided*,*however,that, with respect to any LIBOR Rate Loan, if the next succeeding Business Dayfalls in the succeeding calendar month, such payment shall be made on thepreceding Business Day and the relevant Interest Period shall be adjustedaccordingly.

 

**(f)            Presumption of****Payment in Full by the Borrowers.** Unless the AdministrativeAgent shall have received notice from the Borrower Representative prior to thedate on which any payment is due to the Lenders hereunder that the Borrowerswill not make such payment in full, the Administrative Agent may assume thatthe Borrowers have made such payment in full to the Administrative Agent onsuch date.  In reliance upon suchassumption, the Administrative Agent may, but shall not be obligated to,distribute to each Lender on such due date the amount then due suchLender.  If and to the extent theBorrowers shall not have made such payment in full to the Administrative Agent,each Lender shall repay to the Administrative Agent promptly upon demand theamount distributed to such Lender, together with interest thereon (except tothe extent otherwise paid by the Borrowers) for each day from the date suchamount is distributed to such Lender until the date such Lender repays suchamount to the Administrative Agent at the Federal Funds Effective Rate.

 

**2.8       Repaymentand Prepayments.**

 

**(a)           Scheduled Repayments****.** The Borrowers shall repay to the Administrative Agent theoutstanding principal amount of the aggregate Revolving Credit Loans on theRevolving Credit Termination Date. Reimbursements of drawings on Letters of Credit shall be made asprovided in this Agreement.

 

**(b)        MandatoryPrepayments.**

 

**(i)**            **Mandatory Prepayment ofRevolving Credit Loans**.  If,on any Business Day, whether a Reference Rating Upgrade then exists or does notthen exist, the aggregate principal amount of Revolving Credit Loans of theLenders then outstanding plus the aggregate LC Exposure of the Lenders thenexisting exceeds the aggregate Revolving Credit Commitments of the Lenders thenin effect, the Borrowers shall on such day prepay to the Administrative Agentan amount sufficient to eliminate such excess which amount shall be used toprepay the Lenders ratably in accordance with each Lender’s Pro Rata Share andshall be in addition to any other prepayments required pursuant to this Section2.8(b).

 

**(ii)**           **Mandatory Prepayment ofRevolving Credit Loans Prior to Reference Rating Upgrade**.  During any period of time in which aReference Rating Upgrade does not exist, if at any time the aggregate principalamount of Revolving Credit Loans of the Lenders outstanding at such time plusthe aggregate LC Exposure of the Lenders existing at such time exceeds the sumof (i) Fifty Million Dollars ($50,000,000) plus (ii) the amount ofSecured Loan Assets in which Administrative Agent has a first priority,perfected security interest for the benefit of the Lenders, the Borrowers shallon

 

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suchday prepay to the Administrative Agent an amount sufficient to eliminate suchexcess which amount shall be used to prepay the Lenders ratably in accordancewith each Lender’s Pro Rata Share.

 

**(iii)**         **Mandatory Prepayment ofRevolving Credit Loans After the Occurrence andContinuance of Reference Rating Upgrade**.  During any period of time in which aReference Rating Upgrade exists, if at any time the aggregate principal amountof Revolving Credit Loans outstanding at such time plus the aggregate LCExposure of the Lenders existing at such time in excess of Fifty MillionDollars ($50,000,000) exceeds the amount equal to the sum of: (x) the greaterof (a) zero and (b) the Asset Coverage at such time minus Fifty Million Dollars($50,000,000) plus (y) the amount of Secured Loan Assets in whichAdministrative Agent has a first priority, perfected security interest for thebenefit of the Lenders, the Borrowers shall on such day prepay to theAdministrative Agent an amount sufficient to eliminate such excess which amountshall be used to prepay the Lenders ratably in accordance with each Lender’sPro Rata Share.

 

**(iv)**          **Mandatory****Application of NetProceeds**.  The Borrowers shallapply all Net Proceeds received by the Borrowers to prepay the Revolving CreditLoans as follows:

 

(A) NetProceeds (other than dispositions permitted under Section 5.3(a)(A), (B) or (D)hereof) generated from the disposition of any or all of the assets  of the Landis Grinding Systems division ofUNOVA Industrial Automation Systems, Inc, the Landis Lund division of UNOVAU.K. Limited or the Hebron, Kentucky operations of the Cincinnati Lamb divisionof UNOVA Industrial Automation Systems, Inc. (collectively, the “SpecialBusiness Units”) shall be applied immediately to repay the Revolving CreditLoans.

 

(B) NetProceeds (other than Net Proceeds generated from disposition of any or all ofthe assets Special Business Units and other than dispositions permitted underSection 5.3(a)(A), (B) or (D) hereof) shall be applied to prepay RevolvingCredit Loans: (x) immediately at such time as the cumulative amount of such NetProceeds exceeds Fifty Million Dollars ($50,000,000) by at least Five MillionDollars ($5,000,000), such prepayment being in the total amount of such excessand (y) thereafter, immediately at such time as additional cumulative amountsof such Net Proceeds generated by one or more dispositions equal or exceed FiveMillion Dollars ($5,000,000), such prepayment being in the total amount ofthereof;

 

provided,however that nothing in this Section or in the definition of “NetProceeds” shall constitute authorization not otherwise permitted by thisAgreement for the Borrowers to enter into any transaction that would generateNet Proceeds.

 

**(v)**            **Effect of Prepayment**.  Each prepayment ofRevolving Credit Loans required by paragraphs (i), (ii) and (iii) of thisSection shall not constitute a permanent ratable reduction of theaggregate Revolving Credit Commitments of the Lenders and, subject to the termsand conditions of this Agreement, the amount of outstanding Revolving CreditLoans so prepaid may be reborrowed.  Eachprepayment of Revolving Credit Loans from Net Proceeds required by clause (A)and (B) of paragraph (iv) of this Section shall permanently reduce on a Pro RataShare basis the aggregate Revolving Credit Commitments of the Lenders; provided,however that, notwithstanding the aggregate amount of such prepaymentsof Net Proceeds pursuant to paragraph (iv), such prepayments shall notpermanently reduce the Revolving Credit Commitments by

 

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morethan Fifty Million Dollars ($50,000,000). The Administrative Agent will use reasonable efforts to avoid anapplication of Net Proceeds which causes early prepayment of a LIBOR RateBorrowing prior to expiration of its applicable Interest Period.

 

**2.9          Reduction of Revolving Credit****Commitment.** Upon three (3) Business Days prior writtennotice from the Borrower Representative to the Administrative Agent, theBorrowers shall be permitted to reduce permanently the Revolving CreditCommitment, in whole or in part, as provided in such notice and on a ratablebasis among the Lenders based on the Pro Rata Share thereof.  Each reduction shall be subject to thefollowing: (i) each such reduction shall be in an aggregate principalamount of not less than Five Million Dollars ($5,000,000) or a multiple of OneMillion Dollars ($1,000,000) in excess thereof and (ii) no reduction shallbe permitted to reduce the aggregate Revolving Credit Commitment unless,concurrently with such reduction, the Borrowers shall make a principal paymenton the then outstanding Revolving Credit Loans to the extent required bySection 2.8(b) of this Agreement. Each reduction in the Revolving Credit Commitment under thisSection 2.9 shall be a permanent reduction thereof.

 

**2.10        Permitted****Prepayments.**The Borrowers may prepay all or any part of theRevolving Credit Loans by the Borrower Representative’s giving notice to theAdministrative Agent stating the proposed date of prepayment, the RevolvingCredit Borrowing being prepaid and the aggregate principal amount of theprepayment: (i) not later than 1:00 p.m. (Eastern Time) on any Business Day,with respect to Alternate Base Rate Loans and (ii) not later than 1:00 p.m.(Eastern Time) on the third Business Day prior to such prepayment, with respectto LIBOR Rate Loans.  Thereafter, on thedate of such prepayment, the Borrowers shall: (A) prepay the aggregateoutstanding principal amount of the Alternate Base Rate Loans in whole orratably in part as specified in such notice and (B) prepay the outstandingaggregate principal amount of the LIBOR Rate Loans comprising part of the sameRevolving Credit Borrowing in whole or ratably in part as specified in suchnotice, together with prepayment of interest on the principal amount of theLIBOR Rate Loans comprising such Revolving Credit Borrowing so prepaid accruedto the date of such prepayment; provided, however, that:(I) each partial prepayment of Alternate Base Rate Loans shall be in theaggregate principal amount of not less than One Hundred Thousand Dollars($100,000), (II) each partial prepayment of LIBOR Rate Loans denominatedin Dollars shall be in an aggregate principal amount of not less than OneMillion Dollars ($1,000,000), or an integral multiple of One Million Dollars($1,000,000) in excess thereof, and (III) any prepayment of any LIBOR RateLoans made on other than the last day of an Interest Period shall obligate theBorrowers to reimburse the Lenders in respect thereof pursuant to Section 12.4of this Agreement.  Each prepayment ofRevolving Credit Loans shall constitute only a prepayment and not a permanentreduction of the Revolving Credit Commitment of the Lenders.

 

**2.11        Interest Rate****on Revolving Credit Loans.** The Borrowers shall pay intereston the unpaid principal amount of each Revolving Credit Loan made by theLenders from the date such Revolving Credit Loan is made until the principalamount thereof shall have been paid in full as follows:

 

**(a)           Alternate****Base Rate Loans.** Borrowers shall pay interest on AlternateBase Rate Loans at a rate per annum equal to the sum of the Alternate Base Rateplus the Applicable Margin then in effect and applicable to the RevolvingCredit Borrowings comprised of such Alternate Base Rate Loans, payable: (A)quarterly, in arrears, on the last day of each Fiscal Quarter, (B) on the datesuch Alternate Base Rate Loans shall be paid in full (whether at maturity, byreason of acceleration or otherwise) and (C) after maturity, on demand.

 

**(b)           LIBOR Rate****Loans.** During such periods as any LIBOR Rate Loans areoutstanding, the Borrowers shall pay interest on such LIBOR Rate Loans at arate per annum equal to the sum of the London Interbank Offered Rate plus theApplicable Margin then in effect and applicable to Revolving Credit Borrowingscomprised of such LIBOR Rate Loans, payable:

 

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(A) on the last day ofeach Interest Period and (B) if any Revolving Credit Borrowing has anInterest Period with a duration of more than three months, on each three monthanniversary date of such Revolving Credit Borrowing and (C) on the datesuch LIBOR Rate Loans shall be converted into Alternate Base Rate Loans or paidin full (whether at maturity, by reason of acceleration or otherwise) and (D) aftermaturity, on demand.

 

**(c)           Default****Interest.** If there shall occur an Event of Default which iscontinuing, then, at the written election of the Required Lenders, (i) theprincipal of each outstanding Revolving Credit Loan and, to the extent permittedby Law, the unpaid interest thereon shall, upon such election, bear interest,payable on demand, at a rate per annum equal at all times to two percent (2%)per annum in excess of the interest rate otherwise then payable pursuant to theterms of this Agreement and (ii) the annual fee with respect to Letters ofCredit specified in Section 2.14(b)(ii) shall be increased by two percent (2%)per annum.

 

**(d)           Failure of Borrower Representative****to Elect Interest Period.** If no Interest Period is specifiedby the Borrower Representative in any Credit Request or any RateConversion/Continuation Request for any LIBOR Rate Loan, the applicableBorrower shall be deemed to have requested such Revolving Credit Loan to be anInterest Period of one (1) month.  If theBorrower Representative shall not have given notice in accordance withSection 2.12 of this Agreement to continue any LIBOR Rate Loan into asubsequent Interest Period (and shall not have otherwise delivered a RateConversion/Continuation Request in accordance with Section 2.12 of thisAgreement to convert such LIBOR Rate Loan), then, at the end of the InterestPeriod applicable to such LIBOR Rate Loan, such LIBOR Rate Loan shall convertinto an Alternate Base Rate Loan.

 

**2.12        Rate Conversion****and Rate Continuation.** The Borrowers shall have the right toconvert all or any portion of the Alternate Base Rate Loans or LIBOR Rate Loanscomprising a Revolving Credit Borrowing into LIBOR Rate Loans or Alternate BaseRate Loans, as the case may be, or continue all or any portion of the LIBORRate Loans comprising a Revolving Credit Borrowing as, LIBOR Rate Loans orAlternate Base Rate Loans, as the case may be, upon request delivered by theBorrower Representative to the Administrative Agent not later than 4:00 p.m.(Eastern Time) as follows: (a) on the Business Day that the BorrowerRepresentative desires to convert all or a portion of outstanding LIBOR RateLoans into Alternate Base Rate Loans, (b) three (3) Business Days prior tothe Business Day on which the Borrower Representative desires to convert all ora portion of outstanding Alternate Base Rate Loans into LIBOR Rate Loans for agiven permissible Interest Period, or (c) three (3) Business Days prior tothe Business Day on which the Borrower Representative desires to continue allor a portion of outstanding LIBOR Rate Loans as LIBOR Rate Loans for anadditional Interest Period of the same duration or as a LIBOR Rate Borrowinghaving a different permissible Interest Period; provided, however,that each such Rate Conversion or Rate Continuation shall be subject to thefollowing:

 

**(a)**           if less than all of the outstandingprincipal amount of a Revolving Credit Loan is converted or continued, theaggregate principal amount of such Revolving Credit Loans converted or continuedshall be not less than One Million Dollars ($1,000,000), or an integralmultiple of One Million Dollars ($1,000,000) in excess thereof;

 

**(b)**           LIBOR Rate Loans shall not beconverted or continued at a time other than the end of an Interest Periodapplicable thereto unless the Borrowers shall pay, upon demand, any amounts dueto the Lender pursuant to Section 12.4 of this Agreement;

 

**(c)**           After the occurrence of an Event ofDefault which is continuing, Revolving Credit Loans may not be converted intoor continued (at the expiration of the Interest Period applicable thereto) asLIBOR Rate Loans;

 

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**(d)**           Revolving Credit Loans may not beconverted into or continued as LIBOR Rate Loans so as to comprise a RevolvingCredit Borrowing if the Interest Period applicable thereto will expire on orafter the Revolving Credit Termination Date; and

 

**(e)**           Revolving Credit Loans that cannot beconverted into or continued as LIBOR Rate Loans by reason of clause (c) or (d)of this Section shall be automatically converted at the end of the InterestPeriod in effect for such LIBOR Rate Loans into Alternate Base Rate Loans.

 

Each request for conversion orcontinuation (a “Rate Conversion/Continuation Request”) shall be a written or telephonicnotice (in the case of a telephonic notice, promptly confirmed inwriting).  Each written RateConversion/Continuation Request or written confirmation thereof shall besubstantially in the form of Exhibit C attached hereto, signed orotherwise acceptably authenticated by the Borrower Representative andtransmitted to the Administrative Agent by telecopieror electronic mail.

 

**2.13        Computations of Interest and****Fees.** All computations of interest on Revolving Credit Loanswhich constitute Alternate Base Rate Loans shall be made by the AdministrativeAgent on a basis of a year of 365 or 366 days, as the case may be, and allcomputations of interest on Revolving Credit Loans which constitute LIBOR RateLoan and of fees and other compensation hereunder shall be made by theAdministrative Agent on the basis of a year of 360 days for the actual numberof days elapsed (commencing on the day such Revolving Credit Loan was made butexcluding the day such Revolving Credit Loan shall be paid in full) occurring inthe period for which such interest or fees are payable.  Each determination by the AdministrativeAgent of interest, fees or other amounts of compensation due hereunder shallbe, absent manifest error, final, binding and conclusive.

 

**2.14        Fees****.** The following fees shall be payable as set forth below:

 

**(a)           Facility Fee****.** The Borrowers agree to pay to the Administrative Agent forthe ratable benefit of the Lenders, allocable to the Lenders in accordance witheach Lender’s Pro Rata Share thereof, a facility fee  (the “Facility Fee”) on the Revolving CreditCommitment of such Lender from the Closing Date until the Revolving CreditTermination Date at a rate per annum equal to the Applicable Margin specifiedfor such Facility Fee, payable quarterly in arrears on the last day of eachcalendar quarter, commencing December 31, 2004, and on the Revolving CreditTermination Date.

 

**(b)           Letter of Credit****Fees.** The Borrowers shall pay the following fees withrespect to Letters of Credit:

 

**(i)**            **Fronting Fee**.  The Borrowers agree to pay to the LC Issuer afronting fee equal to the face amount of each Letter of Credit issued andoutstanding multiplied by 12.5 bps, payable quarterly in arrears.

 

**(ii)**           **Annual LC Fee**.  The Borrowers agree to pay to theAdministrative Agent for the ratable benefit of the Lenders with respect toeach Letter of Credit issued and outstanding, a fee accruing in Dollars at arate per annum equal to the Applicable Margin applicable to LIBOR Rate Loans multipliedby the maximum undrawn face amount of such Letter of Credit, payable quarterlyin arrears (A) on the last day of each calendar quarter commencing on the firstsuch day following the issuance of such Letter of Credit and (B) on theRevolving Credit Termination Date; provided, however, that during thecontinuance of an Event of Default, such margin shall be increased to theDefault Rate and shall be payable on demand.

 

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**(iii)**         **Other Fees Relating toLetters of Credit**.  TheBorrowers agree to pay to the LC Issuer, with respect to the issuance,amendment, or transfer of each Letter of Credit and each drawing madethereunder, administrative, documentary, processing and other normal charges inaccordance with the LC Issuer’s standard schedule for such charges in effect atthe time of issuance, amendment, transfer or drawing, as the case may be.

 

**(c)           Other Fees**The Borrowers shall pay to the Administrative Agent,for the benefit of the Administrative Agent and the Lenders, as the case maybe, such other fees in the amounts and at the times specified in theAdministrative Agent Fee Letter.

 

**(d)           Payment of Fees;****Non-Refundable.** All fees set forth in this Section 2.14shall be paid on the date due to the Administrative Agent for distribution, ifappropriate, to the Lenders or the LC Issuer. Once paid, to the extent permitted by applicable Law and absent manifesterror on the part of the Administrative Agent, none of such fees shall berefundable under any circumstances.

 

**(e)           Unascertainable Rate;****Increased Costs; Illegality.** In the event that (x) inthe case of clause (i) below, the Administrative Agent or (y) in thecase of clauses (ii) and (iii) below, any Lender, shall have determined on areasonable basis (which determination shall, absent manifest error, be finaland conclusive and binding upon all parties hereto):

 

**(i)**            on any date for determining theLondon Interbank Offered Rate for LIBOR Rate Loans for any Interest Periodthat, by reason of any changes arising after the Closing Date affecting theLondon interbank eurocurrrency market, adequate and fair means do not exist forascertaining the applicable interest rate on the basis provided for in thedefinition of the “London Interbank Offered Rate”, or

 

**(ii)**           at any time, that such Lender shallincur increased costs or reductions in the amounts received or receivablehereunder in an amount which such Lender deems material with respect to anyLIBOR Rate Loan  to the Borrowers becauseof any change since the Closing Date in any applicable Law, governmental rule, regulation,guideline, order or request (whether or not having the force of Law), or in theinterpretation or administration thereof and including the introduction of anynew Law or governmental rule, regulation, guideline, order or request (such as,for example, but not limited to, a change in official reserve requirements,but, in all events, excluding reserves includable in the “London InterbankOffered Rate” pursuant to the definition thereof), or

 

**(iii)**         at any time, that the making orcontinuance of any LIBOR Rate Loan has become unlawful by compliance by suchLender in good faith with any change since the Closing Date in any Law,governmental rule, regulation, guideline or order, or the interpretation orapplication thereof, or would conflict with any thereof not having the force ofLaw but with which such Lender customarily complies;

 

**THEN**,the Administrative Agent, in the case of and on the date of determinationspecified in clause (i) above, or such Lender, in the case of and as promptlyas practical after the date of determination specified in clause (ii) and (iii)above, shall give notice by telephone confirmed in writing to the Borrowers(and to the Administrative Agent in the case of a Lender notice) of suchdetermination.  The Administrative Agentshall promptly transmit such notice to each of the other applicableLenders.  Thereafter (A) in the caseof clause (i) above, LIBOR Rate Loans shall no longer be available untilsuch time as the Administrative Agent gives prompt notice to the

 

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Borrower Representative and theapplicable Lenders that the circumstances giving rise to such notice by theAdministrative Agent no longer exist, and any Credit Request or RateConversion/Continuation Request given by the Borrower Representative withrespect to LIBOR Rate Loans which have not yet been incurred or converted shallbe deemed rescinded by the Borrower Representative or, in the case of a CreditRequest, shall, at the option of the Borrower Representative, be deemedconverted into a Credit Request for Alternate Base Rate Loans, (B) in thecase of clause (ii) above, the Borrowers shall pay to such Lender, uponwritten demand to the Borrower Representative, such additional amounts (in theform of an increased rate of, or a different method of calculating, interest orotherwise as such Lender shall determine) as shall be required to compensatesuch Lender, for such increased costs or reductions in amounts receivablehereunder (a written notice as to the additional amounts owed to such Lender,showing the basis for the calculation thereof and that such Lender is generallycharging all of its customers for comparable amounts, submitted to the BorrowerRepresentative by such Lender shall, absent manifest error, be final andconclusive and binding upon all parties hereto) and (C)  in the case ofclause (iii) above, the Borrower Representative on behalf of the Borrowersshall take one of the actions specified in the next paragraph of this Section.

 

At any timethat any LIBOR Rate Loan is affected by the circumstances described in Section2.14(e)(ii) above, the Borrowers may, and, in the event any LIBOR Rate Loan isaffected by the circumstances described in Section 2.14(e)(iii) above, theBorrowers shall, either (i) if the affected LIBOR Rate Loan is then being madepursuant to a Credit Request for a LIBOR Rate Borrowing, by causing theBorrower Representative to give the Administrative Agent telephonic (confirmedpromptly in writing if requested) notice thereof on the same date that theBorrower Representative was notified by a Lender pursuant to Section2.14(e)(ii) or (iii) above, cancel said LIBOR Rate Borrowing or convert suchCredit Request to a request for a Revolving Credit Borrowing of Alternate BaseRate Loans, or (ii) if the affected LIBOR Rate Loan is then outstanding,upon at least one Business Day’s notice from the Borrower Representative to theAdministrative Agent, require the affected Lender to convert each such LIBORRate Loan into an Alternate Base Rate Loan with such conversion to be effectiveon the last day of the Interest Period currently applicable to such LIBOR RateLoan, if affected Lender may lawfully continue to maintain such LIBOR Rate Loanuntil such last day, or immediately, if affected Lender is not legallypermitted to maintain such Revolving Credit Loan until such last day, andsubject to payment to such affected Lender of any amount required underSection 12.4 provided that if more than one Lender is affected atany time, then all affected Lenders must be treated the same pursuant to thisSection.

 

# **Section 3**                                             CONDITIONS PRECEDENT.

#  

**3.1          Satisfaction of Conditions****Precedent on Closing Date.** The effectiveness of thisAgreement, the obligation of each Lender to make a Revolving Credit Loan hereunderas of the date of the first Credit Event, if any, and the obligation of the LCIssuer to issue any Letters of Credit hereunder as of the date of the firstCredit Event, are subject to the following conditions precedent having beensatisfied on or prior to the Closing Date unless waived in writing by theAdministrative Agent:

 

**(a)           Agreement and Other Loan****Documents.** The Administrative Agent  shall have received fully executedcounterparts of this Agreement and the other Loan Documents, together with suchadditional documents, instruments and certificates as the Administrative Agentshall require in connection therewith, all in form and substance satisfactoryto the Administrative Agent and each Lender, including without limitation thefollowing:

 

(A)          a RevolvingCredit Note executed by all of the Borrowers in favor each of the Lenders;

 

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(B)           a Security Agreement executedrespectively by all of the Borrowers and by all of the Subsidiary Guarantors infavor of the Administrative Agent for the benefit of the Lenders;

 

(C)           a Subsidiary Guaranty executedrespectively by each Subsidiary Guarantor in favor of the Administrative Agentfor the benefit of the Lenders;

 

(D)          a DepositAccount Control Letter executed by UNOVA, Inc. and KeyBank with respect to theDeposit Account (the “Secured Bond Asset Deposit Account”) established atKeyBank to hold the Secured Bond Assets and the Deposit Account (the “SecuredLoan Asset Deposit Account”) established at KeyBank to hold the Secured LoanAssets;

 

(E)           a SecuritiesAccount Control Letter executed by UNOVA, Inc. and McDonald Investments Inc.with respect to the Securities Account (the “Secured Bond Asset SecuritiesAccount”) established at KeyBank to hold the Secured Bond Assets and theSecurities Account (the “Secured Loan Asset Securities Account”) established atKeyBank to hold the Secured Loan Assets;

 

(F)           such Deposit Account Control Letters,each in form and substance satisfactory to the Administrative Agent, with respectto such Deposit Accounts of the Borrowers as are required by the SecurityAgreement, each executed by the applicable Borrower, the Administrative Agentand the applicable third party depository institution;

 

(G)           such Securities Account ControlLetters, each in form and substance satisfactory to the Administrative Agent,with respect to such Securities Accounts of the Borrowers as are required bythe Security Agreement, each executed by the applicable Borrower, theAdministrative Agent and the applicable third party Approved SecuritiesIntermediary;

 

(H)          a Collateral Assignment of SecurityInterest in Patents and Patent Applications, specified in the “Material Patentand Trademark Listing” disclosed pursuant to Section 4.16 hereof, executedrespectively by each Borrower and each Subsidiary Guarantor, in the form ofExhibit E-1;

 

(I)            a Collateral Assignment of SecurityInterest in Trademarks and Licenses, specified in the “Material Patent andTrademark Listing” disclosed pursuant to Section 4.16 hereof, executedrespectively by each Borrower and each Subsidiary Guarantor, in the form ofExhibit E-2;

 

(J)            a Collateral Assignment of SecurityInterest in Copyrights executed respectively by each Borrower and eachSubsidiary Guarantor, in the form of Exhibit E-3;

 

(K)          a LimitedLicense Agreement (Borrower and Subsidiary Guarantor) executed respectively byeach Borrower and each Subsidiary Guarantor, in the form of Exhibit L-1; and

 

(L)           anAdvertising Permission Letter executed by all of the Borrowers, in the form ofExhibit I.

 

**(b)           Officer’s Certificate, Resolutions, OrganizationalDocuments.** Each of the Borrowers and each of theSubsidiary Guarantors shall have delivered to the Administrative

 

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Agent an officer’s certificateexecuted by a Responsible Officer of such Borrower or Subsidiary Guarantorcertifying:  (i) the names of theofficers of such Borrower or such Subsidiary Guarantor authorized to sign theLoan Documents to which each is a party, together with the true signatures ofsuch officers, (ii) the resolutions of the board of directors of each Borrowerand each Subsidiary Guarantor evidencing approval of the execution and deliveryof the Loan Documents to which such Borrower or such Subsidiary Guarantor, asthe case may be, is a party, and (iii) the Charter Documents of each suchBorrower and each such Subsidiary Guarantor.

 

**(c)           Good Standing and****Full Force and Effect Certificates.** Each of the Borrowersand each of the Subsidiary Guarantors shall have delivered to theAdministrative Agent: (i) a good standing certificate (long form) or full forceand effect certificate, as the case may be, for such Borrower and suchSubsidiary Guarantor, issued on or about the Closing Date by the Secretary ofState in the state where such Borrower or such Subsidiary Guarantor isincorporated or organized and in each state in which such Borrower or suchSubsidiary Guarantor is required to qualify to do business as a foreigncorporation and in which the failure to so qualify would have a MaterialAdverse Effect and (ii) certified Articles or Certificates of Formation  or Incorporation, as applicable, issued on orabout the Closing Date by the Secretary of State in the state where such Borroweror such Subsidiary Guarantor is incorporated or organized.

 

**(d)           Closing Certificate****.**  Each of theBorrowers and each of the Subsidiary Guarantors shall have delivered to theAdministrative Agent an officer’s certificate executed by a Responsible Officerof such Borrower or Subsidiary Guarantor certifying:  (i) compliance in all material respects bysuch Borrower with all representations, warranties, covenants and conditionsunder this Agreement and each of the documents executed in connection therewith,(ii) that such Borrower or Subsidiary Guarantor has obtained all documents andinstruments, including all consents, authorizations, novations and filingsrequired under Law or under any material contractual obligation of suchBorrower or Subsidiary Guarantor as may be necessary for the consummation ofthe transactions contemplated by this Agreement and the other Loan Documents,(iii) the absence of any Potential Default or Event of Default, (iv) theabsence of any material litigation with respect to this Agreement, the otherLoan Documents, and the transactions contemplated thereby and, except as setforth in the Disclosure Schedule, the business, operations, properties orfinances of such Borrower or Subsidiary Guarantor, and (v) the absence of anymaterial change to the facts and/or circumstances of the Borrowers’ operations,collateral or financial condition since December 31, 2003.

 

**(e)           Legal Opinions****.** The Borrowers shall have delivered to the AdministrativeAgent opinions of counsel for the Borrowers and the Subsidiary Guarantors, inform and substance reasonably satisfactory to the Administrative Agent.

 

**(f)            Closing and Legal****Fees; Administrative Agent Fee Letter.** The Borrowers shallhave (i) executed and delivered to the Administrative Agent, the AdministrativeAgent Fee Letter and paid to Administrative Agent, for its sole benefit, thefees set forth therein and (ii) paid all reasonable legal fees and expenses ofthe Administrative Agent in connection with the preparation, negotiation andclosing of the Loan Documents.

 

**(g)           Lien Searches****.**  With respect to theproperty owned or leased by each of the Borrowers and each of the SubsidiaryGuarantors, such Borrower and Subsidiary Guarantor shall have delivered to theAdministrative Agent: (i) the results of UCC lien searches, reasonably satisfactoryto the Administrative Agent; (ii) the results of federal and state tax lien andjudicial lien searches, reasonably satisfactory to Administrative Agent; (iii)UCC termination statements, or agreements reasonably satisfactory theAdministrative Agent providing for delivery of such UCC termination statements,terminating all financing statements previously filed by any other party havinga security interest not permitted pursuant to this Agreement and (iv) suchother

 

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releases and terminations, oragreements reasonably satisfactory the Administrative Agent providing fordelivery of such releases and terminations, as may be necessary in connectionwith the termination of the Existing Credit Facility and the security documentsdelivered in connection therewith, including, without limitation, IntellectualProperty lien releases, real property mortgage releases and any releases andother documentation as may be necessary to evidence the release of the securityinterest of Bank of America, N.A. over any shares of Foreign Subsidiariespledged under the Security Agreements (or analogous foreign law pledgedocuments) executed by the Borrowers and the Subsidiary Guarantors.

 

**(h)           Perfection Certificate****.** Each of the Borrowers and each of the SubsidiaryGuarantors shall have delivered to the Administrative Agent a completed andduly executed Perfection Certificate in the form of Annex IV.

 

**(i)            Perfection; Priority****.** The Administrative Agent shall be reasonably satisfied that,upon the filing of appropriate financing statements under the UCC (or otherappropriate documents, with respect to Intellectual Property) showing theAdministrative Agent as secured party with the appropriate governmentalauthorities, the Administrative Agent will hold a first priority perfected Lienin the Collateral described therein subject only to any Liens specificallypermitted by this Agreement or the other Loan Documents.

 

**(j)            Insurance Policies****.** The Administrative Agent shall have received evidencesatisfactory to the Administrative Agent that the Borrowers have adequatepersonal and real property, liability, business interruption and productliability insurance (including insurance certificates in the form of Acord 27),with Lender’s Loss Payable Endorsements, in form and substance satisfactory tothe Administrative Agent, listing the Administrative Agent  as loss payee and additional insured(as applicable)

 

**(k)           Material Contracts****.**The Administrative Agent shall have received copies of, oronline access to copies of, all Material Business Agreements and MaterialLicense Agreements of the Borrowers and such agreements shall be reasonablysatisfactory in all material respects to the Administrative Agent and itscounsel.

 

**(l)            Initial Letter of Credit****Request.** The Administrative Agent shall have received aninitial Letter of Credit Request, in accordance with the terms of thisAgreement, from the Borrower Representative with respect to the Letters ofCredit to be issued on the Closing Date, if any.

 

**(m)          Disbursement Direction Letter.**The Administrative Agent shall have received an appropriate disbursementdirection letter from the Borrower Representative if any Revolving CreditBorrowings are to be made on the Closing Date.

 

**(n)           Termination of Existing****Credit Agreement.**  TheAdministrative Agent shall have received reasonably satisfactory evidence(which shall include an appropriate payoff letter from Bank of America, N. A.)that the Existing Credit Agreement shall terminate either before or simultaneouslyupon the effectiveness of this Agreement and that all Liens thereunder shall bereleased and be of no further force or effect.

 

**(o)           Deposit of Secured****Bond Assets.**  UNOVA,Inc. shall have no less than Fifty Million Dollars ($50,000,000) in Secured BondAssets on deposit with KeyBank and/or McDonald Investments Inc. in accordancewith Section 5.2(m).

 

**(p)           Landlord/Bailee****/Consignee Waivers.** The Administrative Agent shall have received the waivers andacknowledgments of the landlords, warehousemen, bailees,

 

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processorsand consignees of the Borrowers and Subsidiary Guarantors as required pursuantto the terms of the Security Agreement delivered by the Borrowers andSubsidiary Guarantors.

 

**(q)           Bright & Lorig****Documents.** The Administrative Agent shall have receivedcertain letter agreements duly executed by Bright & Lorig, a ProfessionalCorporation (“Bright & Lorig”), whereby Bright & Lorig will consent toUNOVA, Inc.’s grant of a security interest to the Administrative Agent incertain Patents (and related rights) over which Bright & Lorig currentlyhas a Lien, along with evidence that all conditions precedent for theeffectiveness thereof have been fulfilled. Such letter agreements will have substantially similar terms to theletters, dated as of July 10, 2001, which were executed in connection with theExisting Credit Facility.

 

**(r)           Miscellaneous.**Borrowers shall have provided to the Administrative Agent such other itemsand shall have satisfied such other conditions as may be reasonably required bythe Administrative Agent.

 

**3.2          Conditions Precedent to all****Credit Events.** The obligation of each Lender to make aRevolving Credit Loan on the occasion of each Revolving Credit Borrowinghereunder, and the obligation of the LC Issuer to issue or renew any Letter ofCredit hereunder, are subject to the conditions precedent that:

 

**(a)           Representation Bringdown****.** As of the date of any Credit Event, and before and aftergiving effect thereto, the representations and warranties contained in thisAgreement and all other Loan Documents are true and correct in all materialrespects on and as of the date of such Credit Event with the same effect asthough made on and as of such date, except to the extent such representationsand warranties expressly relate to an earlier date;

 

**(b)           No Default; Compliance****with Terms.** As of the date of any Credit Event, and beforeand after giving effect thereto, no Potential Defaultor Event of Default shall have occurred and be continuing;

 

**(c)           No Material****Adverse Change.** As of the date of any Credit Event, andbefore and after giving effect thereto, there shall have been no event whichhas had, or could reasonably be expected to have, a Material Adverse Effect;and

 

**(d)           Confirmation of Asset Coverage****.** If (x) a Reference Rating Upgrade exists, (y) theaggregate Revolving Credit Loans and LC Exposure exceeds $50,000,000 and (z)the Secured Loan Assets do not equal such excess, the Borrower Representativeshall have delivered to the Administrative Agent an Asset Coverage Certificatefor the quarterly period immediately preceding such Credit Event establishingAsset Coverage for such excess complying with Section 2.1(a) of this Agreement.

 

Each Credit Event shallconstitute a representation and warranty by the Borrowers that, on the date ofsuch Credit Event, the statements in clauses (a) through (c) aboveare true and correct as of such date and that the actions required under clause(d) above have in fact been taken as of such date.

 

# **Section 4**                                             REPRESENTATIONS AND WARRANTIES.

 

Each of theBorrowers represents and warrants to the Administrative Agent, the Lenders andthe LC Issuer as follows:

 

**4.1          Existence****.** As of the Closing Date, each Borrower and each Subsidiary(other than the Excluded Subsidiaries and Excluded Foreign Subsidiaries)thereof is duly organized,

 

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validlyexisting and in good standing under the laws of its respective jurisdictions oforganization.  As of the Closing Date, noBorrower has any Subsidiaries other than those set forth on the DisclosureSchedule.  Each Borrower and eachSubsidiary (other than Excluded Subsidiaries and Excluded Foreign Subsidiaries)thereof is duly qualified or licensed to transact business in its respectivejurisdiction of organization and in each additional jurisdiction where suchqualification or licensure is necessary, except where failure to be soqualified will not have a Material Adverse Effect.  Each Borrower represents that the DisclosureSchedule sets forth (as may be updated from time to time in accordance with andas permitted by this Agreement) the jurisdiction of organization of suchBorrower and its Subsidiaries (other than Excluded Subsidiaries and ExcludedForeign Subsidiaries), the organizational identification numbers of suchBorrower and such Subsidiary (other than Foreign Subsidiaries) as assigned bysuch Borrower or such Subsidiary’s jurisdiction of organization, the principalplace of business of such Borrower and such Subsidiary and the office where thechief executive offices and accounting offices of such Borrower and suchSubsidiary are located.

 

**4.2          Authorization.**The execution, delivery and performance of this Agreement and the otherLoan Documents to which any Borrower or Subsidiary Guarantor is a party:(a) are within such Borrower’s organizational powers, (b) have beenduly authorized, (c) are not in contravention of Law or the terms of suchBorrower’s Charter Documents and (d) except as set forth on the DisclosureSchedule, do not contravene (x) any indenture or other document or instrumentevidencing Indebtedness for Borrowed Money or (y) any other material agreementor undertaking to which such Borrower or Subsidiary Guarantor is a party or bywhich it or its property is bound.

 

**4.3          Enforceability****.** This Agreement and the other Loan Documents executed by aBorrower or any Subsidiary thereof constitute the legal, valid and bindingobligations of such Borrower and such Subsidiary, enforceable against suchBorrower and such Subsidiary in accordance with the terms thereof, subject toany applicable bankruptcy, insolvency, reorganization, moratorium or similarLaws affecting the enforcement of creditors’ rights generally and by generalequitable principles including principles of commercial reasonableness, goodfaith and fair dealing (whether enforcement is sought by proceedings in equityor at law).

 

**4.4****          Maintenance ofInsurance.** Each Borrower will maintain, and shall cause eachSubsidiary thereof to maintain, with their respective insurance providers as ofthe Closing Date or with other financially sound and reputable companiesreasonably satisfactory to the Administrative Agent, insurance policies:(a) insuring all real and personal property of such Borrower and suchSubsidiary against loss by fire, explosion, theft and such other casualties asare usually insured against by companies engaged in the same or similarbusinesses, (b) insuring such Borrower and such Subsidiary againstliability for personal injury and property damage relating to such real andpersonal property, and business interruption, such policies to be in such formand in such amounts and coverage as may be reasonably satisfactory to theAdministrative Agent (but in any event be upon such terms as are usual and customaryfor companies engaged in the same or similar businesses as such Borrower orsuch Subsidiary), (c) to the extent not covered by clauses (a) and (b) above,maintaining insurance on its property with financially sound and reputableinsurance companies against loss and damage in at least the amounts (and withonly those deductibles) customarily maintained, and against such risks as aretypically insured against in the same general area, by Persons of comparablesize and engaged in the same or similar business as such Borrower or suchSubsidiary, (d) naming the Administrative Agent as additional insured(with respect to general liability insurance) and, other than with respect toExcluded Subsidiaries and Foreign Subsidiaries, as loss payee (with respect toproperty/casualty and business interruption insurance), in each case, asapplicable, with respect to such insurance and (e) providing that nocancellation, reduction in amount, material change in coverage or expirationshall be effective until at least thirty (30) days after written notice to theAdministrative Agent.

 

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**4.5****          Title to Collateral;Liens; Transfers.** Each Borrower and each of its Subsidiaries (otherthan Excluded Subsidiaries and Excluded Foreign Subsidiaries) has good title toand ownership of all of the Collateral, free and clear of all Liens, except forLiens permitted under Section 5.3(d).

 

**4.6****          Lien Perfection andPriority.** From and after the Closing Date, by reason of the filingof financing statements, continuation statements, assignments of financingstatements and termination statements in all requisite governmental offices,this Agreement and the other Loan Documents will create a valid and perfectedfirst priority security interest (except as permitted by this Agreement or theother Loan Documents) in and Lien on that portion of the Collateral which canbe perfected by such filing and by the execution and delivery of this Agreementand the other Loan Documents.  Suchsecurity interest will be enforceable against the Borrowers, the SubsidiaryGuarantors and all third parties as security for payment of theObligations.  From and after the ClosingDate, by reason of the delivery to the Administrative Agent of all Collateralconsisting of Instruments and Certificated Securities, in each case properlyendorsed for transfer to the Administrative Agent or in blank and assuming theAdministrative Agent had no notice of an adverse claim, this Agreement and theother Loan Documents will create a valid and perfected first priority securityinterest (except as permitted by this Agreement or the other Loan Documents) inand Lien on that portion of the Collateral which can be perfected by suchpossession and endorsement and by the execution and delivery of this Agreementand the other Loan Documents, which security interest will be enforceableagainst the Borrowers, the Subsidiary Guarantors and all third parties assecurity for payment of all Obligations.

 

**4.7****          Litigation; Proceedings.**Except as set forth in the Disclosure Schedule, as of the Closing Date, thereare no actions, suits, investigations or proceedings, and no orders, writs,injunctions, judgments or decrees, now pending, existing or, to the knowledgeof the Borrowers, threatened against the Borrowers or any Subsidiary thereofaffecting any material property of the Borrowers or such Subsidiary, thisAgreement or any other Loan Document, whether at law, in equity or otherwise,before any court, board, commission, agency or instrumentality of any federal,state, local or foreign government or of any agency or subdivision thereof, orbefore any arbitrator or panel of arbitrators. There is no action, suit, investigation, proceeding, order, writ,injunction, or decree against the Borrowers or any such Subsidiary that, whentaken singly or with all other actions, suits, investigations, proceedings,orders, writs, injunctions or decrees currently pending, could reasonably beexpected to result in a Material Adverse Effect.

 

**4.8****          Taxes.** Thefederal tax identification number for each Borrower and each DomesticSubsidiary thereof, as of the Closing Date, is set forth on the DisclosureSchedule.  Each Borrower has, and eachSubsidiary thereof has, filed all material federal, state and local tax returnswhich are required to be filed by them, and, except to the extent permitted bySection 5.2(i) of this Agreement, have paid all taxes, assessments,charges and levies due and payable as shown on such returns, includinginterest, penalties and fees; provided, however, that no suchtax, assessment, penalty, interest, charge or levy need be paid so long as andto the extent that: (i) it is contested in good faith and by timely andappropriate proceedings effective, during the pendency of such proceedings, tostay the enforcement of such taxes, assessments, charges and levies and(x) such stay prevents the creation of any Lien (other than Liens fortaxes the payment of which is not yet delinquent) or (y) a bond has beenprovided which prevents the creation of any Lien (other than Liens for taxesthe payment of which is not yet delinquent) and (ii) appropriate reserves,as required by GAAP, are made, on a consolidated basis, on the books of UNOVA,Inc.

 

**4.9****          Consents; Approvals.**Except as set forth on the Disclosure Schedule, no action, consent or approvalof, registration or filing with or any other action by any governmentalauthority or other Person is or will be required in connection with thetransactions contemplated by this Agreement and the other Loan Documents, exceptsuch as have been made or obtained

 

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andare in full force and effect and except for the filings required to create orperfect the Liens in favor of the Administrative Agent that are contemplatedhereby and by the other Loan Documents.

 

**4.10       ****Lawful Operations.** The operations of each Borrower and eachSubsidiary thereof are in compliance in all material respects with applicablerequirements imposed by Law (excluding Environmental Laws the compliance with whichis addressed in Section 4.11 below), including without limitation,occupational safety and health Laws and zoning ordinances, except to the extentany such noncompliance, when taken singly or with all other such noncompliance,has not resulted, and could not reasonably be expected to result, in a MaterialAdverse Effect.

 

**4.11       ****Environmental Compliance.** Except as disclosed on theDisclosure Schedule, (a) each Borrower and each Subsidiary thereof are incompliance with Environmental Laws except for any noncompliance which, whentaken singly or with all other such noncompliance, has not resulted, and couldnot reasonably be expected to result, in a Material Adverse Effect; (b) withrespect to any real property owned or leased by a Borrower or a Subsidiarythereof, there is no pending or, to the knowledge of such Borrower, threatenedEnvironmental Claim against such Borrower or such Subsidiary, or any otherenvironmental condition with respect to any real property owned or leased by aBorrower or a Subsidiary thereof which Environmental Claim or condition, whentaken singly or with all other such Environmental Claims or conditions, hasresulted, and could reasonably be expected to result, in a Material AdverseEffect; (c) each Borrower and each Subsidiary are in compliance with allEnvironmental Permits, except to the extent any such noncompliance, when takensingly or together with all other instances of such noncompliance, has notresulted, and could not reasonably be expected to result, in a Material AdverseEffect; and (d) no real property owned or leased by a Borrower or a Subsidiarythereof is listed or formally proposed for listing on the National PrioritiesList pursuant to CERCLA, on the CERCLIS or on any similar federal or state listof sites requiring investigation or clean-up and to the knowledge of suchBorrower, such Borrower has not, nor has any Subsidiary, directly transportedor directly arranged for the transportation of any Hazardous Material to anysuch listed location or location which is proposed for such listing, whichcould reasonably be expected to result in a Material Adverse Effect.

 

**4.12****        Environmental Claims andRestrictions.** Without limiting the representations made inSection 4.11 above, to the best knowledge of the Borrowers, there are nocircumstances with respect to the real property or operations of any Borroweror any Subsidiary thereof that could reasonably be expected to: (i) formthe basis of an Environmental Claim against any Borrower or any Subsidiariesthereof which could constitute a violation of Section 5.2(e) hereof, or(ii) cause any property owned, leased or funded by any Borrower or anySubsidiary thereof to be subject to any material restrictions on ownership,occupancy, use or transferability under any applicable Environmental Law whichwhen taken singly or with all other such Environmental Claims or conditions,has not resulted, and could not reasonably be expected to result, in a MaterialAdverse Effect.

 

**4.13****        ERISA.** TheDisclosure Schedule sets forth a list, as of the Closing Date, of all theEmployee Benefit Plans subject to Section 302(a) of ERISA or MultiemployerPlans subject to Title IV of ERISA of each Borrower, each Subsidiary thereofand each ERISA Affiliate thereof and all Employee Benefit Plans which are materialself-funded medical, retiree medical or retiree life plans of such Borrower andeach Subsidiary thereof.  After theClosing Date, the Borrowers shall revise the Disclosure Schedule on a timelybasis to reflect changes in such list of Employee Benefit Plans which areeither plans subject to Section 302(a) of ERISA or Multiemployer Plans subjectto Title IV of ERISA.  Each EmployeeBenefit Plan (other than each Multiemployer Plan) of each Borrower and eachSubsidiary thereof which is intended to qualify under Section 401 of theCode does so qualify, and any trust created thereunder is exempt from tax underthe provision of Section 501 of the Code, except where such failures in

 

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theaggregate could not reasonably be expected to have a Material AdverseEffect.  As of the Closing Date, noAccumulated Funding Deficiency exists in respect of any Employee Benefit Plan(other than a Multiemployer Plan) that is subject to Code Section 412 andno Reportable Event has occurred in respect of any Employee Benefit Plan thatis subject to Title IV of ERISA which is continuing and which, in the case ofsuch Accumulated Funding Deficiency or Reportable Event, when taken singly orwith all other such Reportable Events or Accumulated Funding Deficiencies, hasresulted, or could reasonably be expected to result, in liabilities againsteach Borrower or Subsidiary in an amount exceeding Twenty Million Dollars($20,000,000).  As of the Closing Date,no “prohibited transactions” (as defined in Section 406 of ERISA orSection 4975 of the Code), have occurred which, when taken singly or withall other such “prohibited transactions,” has resulted, or could reasonably beexpected to result, in liabilities against such Borrower or such Subsidiary inan amount exceeding Twenty Million Dollars ($20,000,000).  No Borrower, nor any Subsidiary thereof, norany ERISA Affiliate thereof, has: (i) had an obligation to contribute toany Multiemployer Plan subject to Title IV of ERISA except as disclosed in theDisclosure Schedule or (ii) incurred or reasonably expects to incur anyliability for the withdrawal from such a Multiemployer Plan which withdrawalliability, when taken singly or with all other such withdrawal liabilities, hasresulted, or could reasonably be expected to result, in liabilities againstsuch Borrower or such Subsidiary in an amount exceeding Twenty  Million Dollars ($20,000,000).

 

**4.14    **Agreements; AdverseObligations; Labor Disputes.

 

The DisclosureSchedule sets forth a list of all Material Business Agreements of eachBorrowers and each Subsidiary thereof as of the Closing Date.  As of the Closing Date, the Material BusinessAgreements of such Borrower and such Subsidiary are in full force and effectand have not been revoked or otherwise modified since the execution thereof,except as disclosed on the Disclosure Schedule. Each Borrower and each Subsidiary thereof is in material compliance withthe terms of the Material Business Agreements. No Borrower nor any Subsidiary thereof issubject to any contract, agreement, or corporate restriction which couldreasonably be expected to have a Material Adverse Effect.  No Borrower nor anySubsidiary thereof is a party to any labor dispute (including any strike,slowdown, walkout or other concerted interruptions by its employees, butexcluding grievance disputes) which could, individually or in the aggregate, bereasonably expected to result in a Material Adverse Effect.  There are no strikes, slow downs, walkouts orother concerted interruptions of operations by employees of any Borrower or anySubsidiary thereof whether or not relating to any labor contracts which could,individually or in the aggregate, be reasonably expected to result in aMaterial Adverse Effect.

 

**4.15    **Financial Statements;Projections.

 

**(a)           Financial Statements****.** The audited financial statements of UNOVA, Inc. and itsconsolidated Subsidiaries for the fiscal year ended December 31, 2003, and theunaudited interim financial statements of UNOVA, Inc. and its consolidatedSubsidiaries for the fiscal quarter ended June 30, 2004, each as filed with theSEC in connection with the Form 10-Q and Form 10-K filings by UNOVA, Inc. andeach as furnished to Administrative Agent, have been prepared in accordancewith GAAP, and fairly present in all material respects the financial conditionof UNOVA, Inc. and its consolidated Subsidiaries as of the date of suchfinancial statements and the results of their operations for the period thenending.  The Borrowers have notexperienced, nor has any Subsidiary thereof experienced, an event orcircumstance that would have a Material Adverse Effect since the December 31,2003 financial statements, nor has there been any material change in UNOVA,Inc.’s accounting procedures used therein.  UNOVA, Inc. and its consolidated Subsidiariesdid not as of December 31, 2003, and will not as of the Closing Date, aftergiving effect to the Revolving Credit Loans made on the Closing Date, have anymaterial contingent liabilities, material liabilities for taxes, unusual andmaterial forward or long-

 

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termcommitments or material unrealized or anticipated losses from any unfavorablecommitments, except those reflected in such financial statements or the notesthereto in accordance with GAAP or, to the extent not required to be reflectedby GAAP, are disclosed in the Disclosure Schedule.

 

**(b)           Financial Projections****.** The Borrower Representative has delivered to theAdministrative Agent and the Lenders prior to the execution and delivery ofthis Agreement a copy of financial and business projections for UNOVA, Inc. andits consolidated Subsidiaries (including balance sheet, income and cash flowand other forecasts) with respect to UNOVA, Inc. and its consolidatedSubsidiaries for the fiscal years therein covered.  Such financial projections for UNOVA, Inc.and its Subsidiaries submitted to the Administrative Agent were prepared ingood faith and were based upon assumptions which UNOVA, Inc. believed to bereasonable (as of the dates such financial projections were prepared).  No facts are known to the executive officersand management of UNOVA, Inc. at the date hereof which, if reflected in suchfinancial projections, would result in a material adverse change in theprojected assets, liabilities, results of operations, prospects or cash flowsreflected therein.

 

**4.16        Intellectual****Property.** Each Borrower and each Subsidiary thereof owns orhas the legal and valid right to use, sell, and license all Intellectual Propertyreasonably necessary for or material to the operation of its business aspresently conducted, free from any Lien not permitted under Section 5.3(d)hereof and free of any restrictions which could reasonably be expected to havea Material Adverse Effect on the operation of its business as presentlyconducted.  The Disclosure Schedule setsforth as of the Closing Date: (i) a general list (the “Patent and TrademarkGeneral Listing”) of all or substantially all of the Intellectual Property ofthe Borrowers and their Subsidiaries which consists of patents, applicationstherefor, registered trademarks, registered service marks, registrations andapplications therefor, copyrights, and registrations therefor, as determined bythe Borrowers in good faith after a due inquiry, (ii) a separate list (the “MaterialPatent and Trademark Listing”) of all Intellectual Property of each suchBorrower and each such Subsidiary, as the case may be, which consists ofpatents, applications therefor, registered trademarks, registered servicemarks, registrations and applications therefor, copyrights, and registrationstherefor, having a material value or otherwise material to or necessary forsuch Borrower’s or such Subsidiary’s business operations, as determined by theBorrowers in good faith after a due inquiry, (iii) a general list (the “LicenseGeneral Listing”) of all or substantially all of the Intellectual Property ofthe Borrowers and their Subsidiaries which consists of licenses by suchBorrowers and such Subsidiaries, as licensors, as determined by the Borrowersin good faith after a due inquiry (which may not include all miscellaneousimmaterial licenses having de minimis economic value) and (iv) a separate list(the “Material License Listing”) of all Intellectual Property of each suchBorrower and each such Subsidiary, as the case may be, which consists oflicenses by such Borrower and such Subsidiary, as licensors, having a materialvalue or otherwise material to or necessary for such Borrower’s or suchSubsidiary’s business operations, as determined by the Borrowers in good faithafter a due inquiry.  Other than asdisclosed on the Disclosure Schedule, no Borrower nor any of its Subsidiariesis a party to any Material License Agreement with respect to Third Party IntellectualProperty.

 

**4.17        Structure****; Capitalization.** The Borrower Representative has delivered,or will deliver on or prior to the Closing Date, to the Administrative Agenttrue and correct copies of its Charter Documents relating to the Borrowers andits Subsidiaries (other than Excluded Subsidiaries and Excluded ForeignSubsidiaries).  The Disclosure Schedulesets forth the ownership structure of all of UNOVA Inc.’s direct and indirectSubsidiaries as of the Closing Date. Except as set forth in the Disclosure Schedule, there are no options,warrants or other rights to acquire any of the capital stock of any of thedirect and indirect Subsidiaries of UNOVA, Inc. and no redemption rights orother repurchase obligations with respect to the capital stock of any direct orindirect Subsidiary of UNOVA, Inc. UNOVA, Inc. and its

 

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consolidatedSubsidiaries have and will continue to have a Fiscal Year which ends on theSunday closest to December 31 or on December 31.

 

**4.18        Value; Solvency****.** Each of the Borrowers and Subsidiary Guarantors have received fair consideration and reasonably equivalentvalue for the Obligations and liabilities incurred to the Lendershereunder.  UNOVA, Inc. is Solvent as ofthe Closing Date and after giving effect to the transactions contemplatedhereby.  The Borrowers, taken as a whole,are Solvent as of the Closing Date and after giving effect to the transactionscontemplated hereby, the Borrowers, taken as a whole, are Solvent.

 

**4.19        Investment Company Act****Status.** No Borrower is, nor is any Subsidiary thereof, an “investmentcompany”, or an “affiliated person” of, or a “promoter” or “principalunderwriter” for an “investment company” (as such terms are defined in theInvestment Company Act of 1940, as amended (15 U.S.C. § 80(a)(1), etseq.).

 

**4.20        Regulation U****/Regulation X Compliance.** The proceeds of Revolving Credit Loans made to the Borrowers pursuant tothis Agreement will be used only for the purposes contemplated bySection 5.2(g) hereof.  No part ofthe proceeds of Revolving Credit Loans made to the Borrowers pursuant to thisAgreement will be used for a purpose which violates any applicable Law, rule,or regulation including, without limitation, the provisions of Regulation U orX of the Board of Governors of the Federal Reserve System, as amended.

 

**4.21        Blocked****Person.** No Borrower, nor any Affiliate of any Borrower, isany of the following (each a “Blocked Person”):

 

(a)           a Person that islisted in the annex to, or is otherwise subject to the provisions of, theExecutive Order No. 13224;

 

(b)           aPerson owned or controlled by, or acting for or on behalf of, any Person thatis listed in the annex to, or is otherwise subject to the provisions of, theExecutive Order No. 13224;

 

(c)           aPerson with which any Lender is prohibited from dealing or otherwise engagingin any transaction by any Anti-Terrorism Law;

 

(d)           aPerson that commits, threatens or conspires to commit or supports “terrorism”as defined in the Executive Order No. 13224;

 

(e)           a Person that isnamed as a “specially designated national” on the most current list publishedby the U.S. Treasury Department Office of Foreign Asset Control at its officialwebsite or any replacement website or other replacement official publication ofsuch list; or

 

(f)            aPerson who is affiliated or associated with a Person listed above.

 

No Borrower or any Affiliatethereof (i) conducts any business or engages in making or receiving anycontribution of funds, goods or services to or for the benefit of any BlockedPerson, or (ii) deals in, or otherwise engages in any transaction relatingto, any property or interests in property blocked pursuant to the ExecutiveOrder No. 13224.

 

**4.22        Full Disclosure.**None of the written information, exhibits or reports furnished by theBorrower Representative to the Administrative Agent and the Lenders containsany untrue statement of a material fact or omits to state any material factnecessary to make the statements

 

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containedtherein not materially misleading in light of the circumstances and purposesfor which such information was provided.

 

**4.23        Acquisition Documents.**Any Acquisition Documents delivered by the Borrower Representativeconstitute the legal, valid and binding obligations of each party thereto,enforceable against such party in accordance with the terms thereof, subject toany applicable bankruptcy, insolvency, reorganization, moratorium or similarLaws affecting the enforcement of creditors’ rights generally and by generalequitable principles including principles of commercial reasonableness, goodfaith and fair dealing (whether enforcement is sought by proceedings in equityor at law).

 

# **Section 5**                                             COVENANTS OF THE BORROWERS.

 

So long as anyof the Obligations hereunder remain outstanding, or the Lenders have anyRevolving Credit Commitment or the LC Issuer has any obligation to issueLetters of Credit hereunder, each of the Borrowers will comply, and will causeeach Subsidiary thereof to comply, with the following provisions:

 

**5.1       Reporting and Notice Covenants.**

 

**(a)           Quarterly Financial Statements.**The Borrower Representative shall furnish to the Administrative Agent andeach Lender, as soon as practicable and in any event within fifty (50) daysafter the end of each Fiscal Quarter of UNOVA, Inc. and its Subsidiariesunaudited consolidated balance sheets of UNOVA, Inc and its consolidatedSubsidiaries as of the end of that Fiscal Quarter and the related statements ofincome and cash flow for such Fiscal Quarter each prepared on an unaudited,comparative basis with the comparable period during the prior year and inaccordance with GAAP, all in reasonable detail and certified, subject to normalyear-end audit adjustments, by a Responsible Officer or the non-officercontroller of the Borrower Representative provided that with respect toany Fiscal Quarter for which financial statements are required to be deliveredpursuant to this subpart, delivery of UNOVA Inc.’s Form l0-Q as filed with theSEC for any such Fiscal Quarter shall satisfy the requirement to deliver aquarterly financial statement for such Fiscal Quarter.

 

**(b)           Annual Financial Statements.**TheBorrower Representative shall furnish to the Administrative Agent and eachLender, as soon as practicable and in any event within one hundred (100) daysafter the end of each Fiscal Year of UNOVA, Inc. and its consolidatedSubsidiaries, a complete copy of the annual audit report of UNOVA, Inc. and itsconsolidated Subsidiaries (including, without limitation, all consolidatedfinancial statements thereof and the notes thereto) for that Fiscal Year, (i)prepared on a comparative basis and consistent with prior Fiscal Years,(ii)  audited and certified, by Deloitte & Touche LLP or otherindependent public accountants of recognized national standing selected by theBorrower Representative and reasonably acceptable to the Required Lenders, andaccompanied by (iii) an opinion of such accountants, which opinion shall beunqualified and shall (A) state that such accountants audited suchconsolidated financial statements in accordance with generally acceptedauditing standards, that such accountants believe that such audit provides areasonable basis for their opinion, and that in their opinion such consolidatedfinancial statements present fairly, in all material respects, the consolidatedfinancial position of UNOVA, Inc. and its consolidated Subsidiaries as at theend of such Fiscal Year and the consolidated results of their operations andcash flows for such Fiscal Year in conformity with GAAP, and (B) containsuch statements as are customarily included in unqualified reports ofindependent accountants in conformity with the recommendations and requirementsof the American Institute of Certified Public Accountants (or any successororganization) provided that with respect to any Fiscal Year for whichfinancial statements are required to be delivered pursuant to this subpart,delivery of UNOVA, Inc.’s Form

 

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10-K as filed with the SEC forany such Fiscal Year shall satisfy the requirement to deliver an annualfinancial statement for such Fiscal Year.

 

**(c)           Officer’s Certificate.**The Borrower Representative shall furnish to the Administrative Agent andeach Lender, concurrently with the financial statements delivered in connectionwith Sections 5.1(a) and 5.1(b), a certificate of a Responsible Officer of theBorrower Representative, in his or her capacity as a Responsible Officer or thenon-officer controller of the Borrower Representative, setting forth thecomputations necessary to determine whether the Borrowers and theirconsolidated Subsidiaries are in compliance with the financial covenants setforth in Section 5.4 of this Agreement and certifying that: (A) thosefinancial statements fairly present in all material respects the financialcondition and results of operations of UNOVA, Inc. and its consolidatedSubsidiaries subject in the case of interim financial statements, to routineyear-end audit adjustments, (B) no Potential Default or Event of Defaultthen exists or, if any Potential Default or Event of Default does exist, abrief description of the Potential Default or Event of Default and theBorrowers’ intentions in respect thereof and (C) the amount of Net Proceedsgenerated during the Fiscal Quarter applicable to such certification and thedetails of the transactions generating such Net Proceeds.

 

**(d)           Company Reports.**The Borrower Representative shall deliver to the Administrative Agent andeach Lender, no later than the date of the sending or filing thereof, copies ofall proxy statements, financial statements and all regular, periodic reportsthat UNOVA, Inc. sends to its respective security holders generally.

 

**(e)           Annual Projections.**On or before one hundred twenty (120) days after the beginning of eachFiscal Year of UNOVA, Inc., the Borrower Representative shall furnish to theAdministrative Agent and each Lender projected monthly consolidated balancesheets, income statements and cash flow statements for such Fiscal Year withrespect to UNOVA, Inc. and its consolidated Subsidiaries.

 

**(f)            Asset Coverage Certificates.**During the existence of a Reference Rating Upgrade: (x) if at any time theaggregate outstanding Revolving Credit Loans taken together with the LC Exposureof the Lenders would exceeds $50,000,000 taken together with the then existingamount of Secured Loan Assets, the Borrower Representative shall have providedto the Administrative Agent prior to such time an Asset Coverage Certificatefor the then most recent Fiscal Quarter of the Borrowers ending immediatelyprior to such time (any failure to deliver such Asset Coverage Certificateshall not constitute a violation of this covenant to the extent the Borrowershave otherwise complied with the applicable mandatory prepayment provisions ofSection 2.8(b) of this Agreement), and (y) during such time as the aggregateoutstanding Revolving Credit Loans plus the LC Exposure of the Lenders exceeds$50,000,000 taken together with the then existing amount of Secured LoanAssets, the Borrower Representative shall provide to the Administrative Agenton the fiftieth day after the end of each Fiscal Quarter of the Borrowers (orthe next Business Day if the 50th is not a Business Day) ending during suchperiod of time (any failure to deliver any required Asset Coverage Certificateshall not constitute a violation of this covenant to the extent the Borrowersotherwise have complied with the applicable mandatory prepayment provisions ofSection 2.8(b) of this Agreement).

 

**(g)           Other Information.**The Borrower Representative shall furnish to the Administrative Agent,promptly upon the Administrative Agent’s written request, such otherinformation about the financial condition, properties and operations of theBorrowers and any Subsidiary thereof and any of their Employee Benefit Plans asthe Administrative Agent may from time to time reasonably request.

 

**(h)           Notices.** TheBorrowers will cause a Responsible Officer of the Borrower Representativeto give the Administrative Agent and each Lender prompt written notice

 

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whenever (and in any eventwithin ten (10) Business Days after a Responsible Officer has knowledgethereof): (i) any Borrower or any of its Subsidiaries becomes aware orreceives notice from any court, agency or other governmental authority of anyalleged non-compliance with any Law or order which could reasonably be expectedto have or result in, if such noncompliance is found to exist, a MaterialAdverse Effect, (ii) the Internal Revenue Service or any other federal,state or local taxing authority shall allege in writing or any Borrower or anyof its Subsidiaries becomes aware of any default by any Borrower or any of itsSubsidiaries in the payment of any tax material in amount or shall threaten ormake any assessment in respect thereof which, if resulting in a determinationadverse to such Borrower or such Subsidiary, could reasonably be expected tohave or result in a Material Adverse Effect, (iii) any litigation or proceedingshall be brought against a Borrower or any of its Subsidiaries before any courtor administrative agency which could reasonably be expected to have or resultin a Material Adverse Effect, (iv) any material adverse change ordevelopment occurs in connection with any such litigation proceeding, or(v) any Responsible Offer of a Borrower or a Subsidiary Guarantor becomesaware of any Potential Default or Event of Default.

 

**(****i****)            Notice of Defaultunder ERISA.** If a Borrower or any Subsidiary thereof becomesaware of or shall receive notice from any ERISA Regulator or otherwise hasactual knowledge that a Default under ERISA exists with respect to any EmployeeBenefit Plan, the Borrower Representative shall notify the Administrative Agentand each Lender of the occurrence of such Default under ERISA, within ten (10)Business Days after receiving such notice or obtaining such knowledge (thedisclosures contained in the Disclosure Schedule being such notice of eachDefault under ERISA disclosed therein to the extent of the disclosure therein).

 

**(j)            Environmental Reporting.**The Borrower Representative shall promptly deliver to the AdministrativeAgent and each Lender, and in any event within fifteen (15) Business Days afterreceipt or transmittal by any Borrower or any Subsidiary thereof, as the casemay be, copies of all material communications with any government orgovernmental agency relating to Environmental Claims and all materialcommunications with any other Person relating to Environmental Claims broughtby such Person which could, in either case, if successfully brought againstsuch Borrower or such Subsidiary, reasonably be expected to result in aMaterial Adverse Effect.

 

**(k)           Multiemployer Plan WithdrawalLiability.** The Borrowers shall (i) once in eachcalendar year beginning in January, 2005, request a current statement ofwithdrawal liability from each Multiemployer Plan subject to Title IV of ERISAto which any Borrower or any ERISA Affiliate is or has been obligated tocontribute during such year and (ii) within fifteen (15) days after suchBorrower receives such current statement, transmit a copy of such statement tothe Administrative Agent and each Lender. If a Multiemployer Plan fails to provide the Borrowers with therequested information within a reasonable period of time, BorrowerRepresentative shall promptly notify the Administrative Agent and each Lenderof such failure and any reasons given therefor.

 

**5.2       AffirmativeCovenants.**

 

**(a)           Corporate Existence.**The Borrowers shall, and shall cause each Subsidiary thereof (other thanExcluded Subsidiaries and Foreign Subsidiaries) to, at all times(i) maintain its corporate or organizational existence and its rights andfranchises (except as permitted under Section 5.3(a)), and (ii) maintainits good standing in the jurisdiction of its organization, and qualify to dobusiness as a foreign entity in each jurisdiction where the failure to qualifycould reasonably be expected to result in a Material Adverse Effect.  Notwithstanding the forgoing, the Borrowersshall cause each Foreign Subsidiary (other than Excluded Foreign Subsidiaries)to comply at all times with the provisions of Section 5.13(b) of the Security

 

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Agreement delivered by each ofthe Borrowers and any Subsidiary Guarantor in connection with this Agreement.

 

**(b)           Financial Records.**UNOVA, Inc. shall maintain at all times true and complete financial recordsin accordance with GAAP, consistently applied, and, without limiting thegenerality of the foregoing, make appropriate accruals to reserves forestimated and contingent losses and liabilities as required under GAAP.

 

**(c)           Financial Examinations and****Review.** Each Borrower shall, at the Borrowers’ expense(provided such expenses are reasonable and to the extent no Event of Defaulthas occurred and is continuing, the Administrative Agent shall charge noBorrower for more than two examinations per annum), upon reasonable priorwritten notice from the Administrative Agent to the Borrower Representative,permit, and shall cause each of its Domestic Subsidiaries to permit, theAdministrative Agent, during normal business hours in the presence of anofficer of such Borrower: (i) to examine, with the guidance andsupervision of such Borrower, such Borrower’s financial records and to makecopies of and extracts from such records and (ii) to consult with suchBorrower’s and its Domestic Subsidiaries’ officers, directors, accountants,actuaries, trustees and plan administrators, as the case may be, in respect ofsuch Borrower and its Domestic Subsidiaries’ financial condition, each of whichparties is hereby authorized by such Borrower to make such informationavailable to the Administrative Agent, to the same extent that it would to suchBorrower.

 

**(d)           Compliance with Law.**Each Borrower will comply, and will cause each Subsidiary thereof tocomply, in all respects with all applicable provisions of all Laws (whetherstatutory, administrative, judicial or other and whether federal, state orlocal and excluding Environmental Laws to the extent addressed inSection 5.2(e) of this Agreement) and every lawful governmental order; provided,however, that any alleged noncompliance shall not be deemed to be aviolation of this Section 5.2(d) so long as: (i) such noncomplianceby such Borrower or such Subsidiary has not resulted or could not reasonably beexpected to result in a Material Adverse Effect and (ii) the allegednon-compliance is contested in good faith by timely and appropriate proceedingseffective to stay, during the pendency of such proceedings, any enforcementaction, and UNOVA, Inc. has established appropriate consolidated reserves andtaken such other appropriate measures as may be required under GAAP.

 

**(e)           Compliance with Environmental Laws.**Each Borrower will use and operate its facilities and properties, and causeeach of its Subsidiaries to use and operate its respective facilities andproperties, in compliance with Environmental Laws except for noncompliancewhich, when taken singly or with all other such obligations, has not resultednor could reasonably be expected to result in a Material Adverse Effect.  Each Borrower will keep, and will cause eachSubsidiary thereof to keep, all necessary Environmental Permits in effect andremain in compliance therewith, and handle all Hazardous Materials incompliance with all applicable Environmental Laws, except to the extent thatany such lack of effectiveness or non-compliance, when taken singly or with allother such instances of lack of effectiveness or non-compliance, has notresulted and could not reasonably be expected to result in a Material AdverseEffect.  No Borrower shall suffer toexist, and shall not permit any Subsidiary to suffer to exist, an environmentalcondition which, when taken singly or with all other such conditions, hasresulted or could reasonably be expected to result in a Material AdverseEffect.  No Borrower shall suffer orpermit the aggregate of all liabilities or claims against the Borrowers and theSubsidiaries thereof referenced in this Section and Section 4.11 to resultor be reasonably expected to result in a Material Adverse Effect.

 

**(f)            Properties.**Subject to Section 5.3(a) of this Agreement, each of the Borrowersshall maintain, in all material respects, and shall cause each Subsidiarythereof (other than Excluded Subsidiaries and Excluded Foreign Subsidiaries) tomaintain, in all material

 

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respects,all assets necessary to its continuing operations in good working order andcondition, ordinary wear and tear excepted, and shall refrain, and shall causesuch Subsidiaries to refrain, from wasting or destroying any such assets or anymaterial part thereof.

 

**(g)           Use of****Proceeds.** The proceeds of the Revolving Credit Loans may onlybe used: (i) to fund working capital and other general business purposesof the Borrowers, (ii) to reimburse drawings under Letters of Credit issued forthe account of the Borrowers, (iii) to repay and refinance theIndebtedness of the Borrowers under the Existing Credit Facility and (iv) topay all transaction costs and expenses in connection with the transactionscontemplated hereby.

 

**(h)           Compliance with Terms of All****Material Contracts.** Each Borrower shall perform and observe,and shall cause each of its Subsidiaries to perform and observe, all thematerial terms and provisions of each of the Material Business Agreements andthe Material License Agreements to which it is a party except those which aresubject to a good faith dispute provided such dispute shall not reasonably beexpected to result in a Material Adverse Effect.  Each Borrower and each of its Subsidiariesshall maintain each such Material Business Agreement and Material LicenseAgreement in full force and effect, and enforce, to the extent that suchBorrower or such Subsidiary, in its reasonable business judgment, determines tobe appropriate, each such Material Business Agreement and Material LicenseAgreement in accordance with its terms.

 

**(i)            Taxes.** EachBorrower shall pay in full, and shall cause each of its Subsidiaries to payin full, prior in each case to the date when penalties for the nonpaymentthereof would attach, all taxes, assessments and governmental charges andlevies for which it may be or become subject and all lawful claims thereforwhich, if unpaid, could reasonably be expected to result in a Lien upon itsproperty (other than Liens permitted by Section 5.3(d)); provided, however,that no such tax, assessment, charge or levy need be paid so long as and to theextent that: (i) it is contested in good faith and by timely andappropriate proceedings effective, during the pendency of such proceedings, tostay the enforcement of such taxes, assessments and governmental charges andlevies and (x) such stay prevents the creation of any Lien (other thanLiens for taxes, assessments and governmental charges the payment of which isnot yet delinquent) or (y) a bond has been provided which prevents thecreation of any Lien (other than Liens for taxes, assessments and governmentalcharges the payment of which is not yet delinquent) and (ii) appropriatereserves, as required by GAAP, are made, on a consolidated basis, on the booksof  UNOVA, Inc.

 

**(j)            Insurance.**The Borrower Representative shall, (i) on the Closing Date and withinfifteen (15) Business Days of the request by the Administrative Agentthereafter, provide evidence reasonably satisfactory to the AdministrativeAgent that the Borrowers and the Subsidiaries thereof have insurance asrequired by Section 4.4 hereof, with the Administrative Agent listed asloss payee and additional insured (as applicable), (ii) annually providere-certifications with respect to its insurance policies in effect and (iii)promptly upon any material change with respect to any existing insurance policyor upon any Borrower’s purchase of any new insurance policy as required bySection 4.4 hereof, provide an updated insurance certificate or newinsurance certificate, as applicable.

 

**(k)           License from Third Parties.**Except as disclosed in the Disclosure Schedule, noBorrower nor any Subsidiary thereof is a party to any Material LicenseAgreement.

 

**(l)            Subsidiary Guaranties.**Exceptfor any Excluded Subsidiary, each Domestic Subsidiary of each Borrower created,acquired or held on or subsequent to the Closing Date which does not execute aJoinder Agreement in order to become a Borrower hereunder, shall immediatelyexecute and deliver a Subsidiary Guaranty in the form of Exhibit D-3 hereto andSecurity Agreement, in the form of Exhibit D-2 hereto and shall deliver suchcorporate

 

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governanceand authorization documents and an opinion of counsel as may be deemedreasonably necessary or advisable by Administrative Agent.

 

**(m)          Maintenance of Certain****Accounts with KeyBank.** The Borrowers shall maintain aminimum balance of Fifty Million Dollars ($50,000,000) in Secured Bond Assets,whether in the Secured Bond Asset Deposit Account at KeyBank or the SecuredBond Asset Securities Account at McDonald Investments Inc. until such time asthe Borrowers have retired the Fixed Rate Bonds due in 2005; provided, however,that such minimum balance shall be reduced by an amount equal to fifty percent(50%) of the face amount of any early tender, redemption or other prepayment orrepurchase of such Fixed Rate Bonds.

 

**(n)           Pledge of IAS F****oreign Subsidiaries.** If the Revolving Credit Commitmentshave not been reduced by $50,000,000 as required in connection with the sale ofthe Industrial Automation Systems Segment by the first anniversary of theClosing Date, Borrowers will pledge to the Administrative Agent 65% of thestock of the first tier Foreign Subsidiaries (exclusive of Subsidiaries thatwould constitute Excluded Foreign Subsidiaries) of the Industrial AutomationSystems Segment.

 

**(o)           Acquisition Documents.**  With respect to each Permitted Acquisition,and prior to the funding of any Revolving Credit Loan to finance such PermittedAcquisition, the transactions contemplated by the Acquisition Documents haveeach been consummated materially (i) in accordance with the respective termsthereof, without any amendment, waiver, modification or termination of anyprovision thereof except for such amendment, waiver, modification, terminationor noncompliance therewith as to which the Administrative Agent has beennotified in writing prior to such consummation and (ii) in compliance with allapplicable Law.  The Borrowers shall havedelivered to the Administrative Agent true and correct copies of each of theAcquisition Documents, and, to the extent reasonably requested by theAdministrative Agent, each other instrument, agreement or document regardingeach Permitted Acquisition, in each case, funded in whole or in part by anyRevolving Credit Loan.  Each party toeach Permitted Acquisition funded in whole or in part by any Revolving CreditLoan has performed and/or satisfied all material obligations and conditionsrequired of it prior to or as a condition to the consummation of thetransactions contemplated by and consummated under the applicable AcquisitionDocument except for such nonperformance or non-satisfaction as to which theAdministrative Agent has been notified in writing prior to such consummation.

 

**5.3       NegativeCovenants.**

 

**(a)           Consolidation, Merger, Sale and Purchase of Assets.**No Borrower shall, nor shall it permit any Subsidiary thereof to,(i) merge or consolidate with or into, or enter into any agreement tomerge or consolidate with or into, any other Person or otherwise be a party toany merger or consolidation; (ii) purchase all or substantially all of theassets and business or capital stock of another Person; or (iii) except asset forth in the Disclosure Schedule, lease, as lessor, sell, sell-leaseback,license as licensor, or otherwise transfer (whether in one transaction or a seriesof transactions) any of its assets (whether now owned or hereafter acquired); provided,however, that:

 

(A)          any Borroweror any Subsidiary may sell or otherwise dispose of Inventory or enter into alicense or lease arrangement in the ordinary course of its business;

 

(B)           any Borrower or any Subsidiarythereof may sell or otherwise dispose of its assets that are (x) obsolete, wornout, unnecessary or no longer used or useful in such Borrower’s or suchSubsidiary’s business or (y) sold or otherwise disposed of in the ordinarycourse of business;

 

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(C)           any Borrower or any Subsidiary maysell, lease, license or otherwise transfer its Intellectual Property providedhowever, (x) that such sales, licenses or other transfers shall notinterfere in any material respect with the business of any Borrower or anySubsidiary (other than Excluded Subsidiaries or Excluded Foreign Subsidiaries)and (y) that the aggregate fair market value of all such Intellectual Propertydoes not exceed Thirty Million Dollars ($30,000,000) during the term of thisAgreement;

 

(D)          any Borrower or any Subsidiary maylease or sublease real property in the ordinary course of business;

 

(E)           any Borrower and any Subsidiariesthereof may effect sale-leaseback transactions with respect to real propertythereof; provided that (A) the aggregate proceeds of all suchsale-leaseback transactions by all of the Borrowers and the Subsidiariesthereof shall not exceed Fifteen Million Dollars $15,000,000 and (B) each suchsale shall be in an amount at least equal to the fair market value thereof;

 

(F)           any Borrower, Subsidiary Guarantor orWholly-Owned Subsidiary of such Borrower or such Subsidiary Guarantor may mergeor consolidate with or into, or dispose of its assets to, another Borrower orSubsidiary Guarantor (whether such disposal is by means of lease, sale,sale-leaseback, license or another type of transfer);

 

(G)           any Excluded Subsidiary or ForeignSubsidiary may merge or consolidate with or into, or dispose of its assets to,a Borrower, a Subsidiary Guarantor or another Excluded Subsidiary or ForeignSubsidiary (whether such disposal is by means of lease, sale, sale-leaseback,license or another type of transfer); provided that the Borrowers shallcause each Foreign Subsidiary (other than Excluded Foreign Subsidiaries) tocomply at all times with the provisions of Section 5.13(b) of the SecurityAgreement delivered by the Borrowers in connection with this Agreement;

 

(H)          the Borrowers and their respectiveSubsidiaries may sell, lease or otherwise dispose of assets, not otherwisepermitted by this Section, for consideration in an amount not less than thefair market value thereof, having an aggregate book value when taken as a wholenot exceeding Ten Million Dollars ($10,000,000) in the aggregate in any FiscalYear, provided that at the time of such sale and after giving effect thereto,no Event of Default exists;

 

(I)            the Borrowers may sell, lease orotherwise dispose of the assets or stock of the Industrial Automation SystemSegment, in whole or in part, for consideration in an amount determined to becommercially reasonable by UNOVA, Inc. in the exercise of its good faithbusiness judgment; provided, however, that: (i) at the time ofsuch sale and after giving effect thereto, no Event of Default exists or willexist and (ii)  the Net Proceeds thereof shall be delivered to theAdministrative Agent and applied to the Obligations to the extent requiredunder Section 2.8(b)(iv); and

 

(J)            any Borrower and any Subsidiarythereof may consummate Permitted Acquisitions in accordance with therequirements of this Agreement.

 

**(b)           Credit Extensions; Prepayments****.**  NoBorrower shall, nor shall it permit any Subsidiary thereof to, (i) makeprepayments or advance payments in respect of Indebtedness,

 

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including Subordinated Indebtedness, toothers (except to the Administrative Agent for the benefit of the Lenders inaccordance with this Agreement) or (ii) loan any money to, assume anyIndebtedness of, or undertake any Guaranty Obligations with respect to the Indebtednessof, any other Person, except:

 

(A)          any Borrower and any Subsidiary mayendorse checks, drafts, and similar instruments for deposit or collection inthe ordinary course of business;

 

(B)           any Borrower and each Subsidiary mayguaranty the Obligations of the Borrowers hereunder;

 

(C)           any Borrower and any Subsidiary mayrenew, extend, refinance and refund Indebtedness, as long as such renewal,extension or refunding is permitted under Section 5.3(c);

 

(D)          the Borrowers may redeem the FixedRate Bonds which mature in 2005 in whole or in part; provided, however,that (i) no Borrower may use the proceeds of Revolving Credit Loans to financesuch redemption and (ii) no Event of Default shall have occurred and becontinuing or would result after giving effect to any such redemption;

 

(E)           the Borrowers may redeem the FixedRate Bonds which mature in 2008 in whole or in part, provided, however,that (i) the Fixed Rate Bonds which mature in 2005 must first have beenredeemed or paid in full, (ii) no Borrower may use the proceeds of RevolvingCredit Loans to finance such redemption and (iii) UNOVA, Inc. and itsconsolidated Subsidiaries shall have a Consolidated Leverage Ratio which is atleast 0.25 less than the Consolidated Leverage Ratio required by Section 5.4(a)on a pro forma basis after giving effect to such redemption and (iv) no Eventof Default shall have occurred and be continuing or would result after givingeffect to any such redemption;

 

(F)           the Borrowers and their Subsidiariesmay prepay other Indebtedness not otherwise permitted under thisSection 5.3(b) provided, however, that (i) no Event ofDefault has occurred and is continuing, and (ii) UNOVA, Inc. and itsconsolidated Subsidiaries shall have a Consolidated Leverage Ratio which is atleast 0.25 less than the Consolidated Leverage Ratio required bySection 5.4(a) on a pro forma basis after giving effect to suchprepayment;

 

(G)           the Borrowers and any Subsidiary mayextend trade credit to Account Debtors and other customers or Persons  in the ordinary course of its business;

 

(H)          advances to employees made in theordinary course of business of the Borrowers or any Subsidiary not to exceedFive Million Dollars ($5,000,000) in the aggregate;

 

(I)            the Borrowers or any Subsidiary maymake advances or extend other credit to Persons so long as the aggregateoutstanding amount of all such loans does not exceed Five Million Dollars($5,000,000);

 

(J)            UNOVA, Inc. may grant unsecuredguaranties in the ordinary course of business requested by vendors or other thirdparties doing business with UNOVA, Inc.’s Subsidiaries;

 

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(K)          the Borrowers and any Subsidiary maymaintain the guaranties listed on the Disclosure Schedule, including anyreplacement thereof which contains substantially similar terms;

 

(L)           the Borrowers and any Subsidiary maymake unsecured guaranties of Indebtedness permitted by Section 5.3(c);

 

(M)         the Borrowers and their Subsidiariesmay make loans (including loans made on a non-arms-length basis) to HonsbergLamb Sonderwerkzengmaschinen GmbH, a corporation organized under the laws ofGermany, and Intermec Technologies GmbH, a corporation organized under the lawsof Germany, in an aggregate amount, when taken together and combined with theinvestments permitted in Section 5.3(e)(A), not to exceed Thirty MillionDollars ($30,000,000);

 

(N)          the Borrowers and their Subsidiariesmay make loans (including loans made on a non-arms-length basis) to ForeignSubsidiaries or Excluded Subsidiaries in an aggregate amount, when combinedwith the investments permitted in Section 5.3(e)(B), not to exceed FiveMillion Dollars ($5,000,000);

 

(O)          any Foreign Subsidiary may make loans(including loans made on a non-arms-length basis) to any Borrower or any otherSubsidiary;

 

(P)           any Borrower or any SubsidiaryGuarantor may make loans (whether on an arm’s length basis or otherwise) to anyBorrower or Subsidiary Guarantor;

 

(Q)          any Borrower or any Subsidiary mayprepay any Indebtedness owed to any Borrower or any Subsidiary;

 

(R)           any Foreign Subsidiary may provideguaranties of the obligations of its Subsidiaries to the extent required underapplicable labor or pension laws of a jurisdiction outside of the UnitedStates; or

 

(S)           any Foreign Subsidiary may guarantythe obligations of the Borrowers or their Subsidiaries (a) in the ordinarycourse of business and (b) pursuant to the Barclay’s Facility.

 

**(c)           Indebtedness****.**   NoBorrower shall, nor shall it permit any Subsidiary thereof to, create, assume,incur, suffer to exist or have outstanding at any time any Indebtedness or beor become a Guarantor of or otherwise undertake or assume any GuarantyObligation with respect to any Indebtedness of any other Person; except,that this Section 5.3(c) shall not prohibit:

 

(i)            the Obligations;

 

(ii)           trade accounts payable or customerdeposits in each case made in the ordinary course of business;

 

(iii)          the Indebtedness listed on theDisclosure Schedule (including Indebtedness under the Barclay’s Facility);

 

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(iv)          Indebtedness in respect of currency orinterest rate swaps or similar transactions entered into in the ordinary courseof business and not for speculative purposes;

 

(v)           Indebtedness secured by a Lienpermitted by clauses (A), (B), (H), (I), (J), (K), (L) or (O) ofSection 5.3(d) hereof;

 

(vi)          any Indebtedness extending thematurity of, renewing, refunding or refinancing (but not increasing theprincipal amount of), in whole or in part, any of the Indebtedness permittedunder this Section 5.3(c) so long as the terms and conditions thereof arenot materially less favorable to any Borrower or Subsidiary, the AdministrativeAgent or any Lender than the terms of the Indebtedness being extended, renewed,refunded or refinanced except that the interest or applicable margin thereofmay be increased by up to four percent (4%) per annum;

 

(vii)         Indebtedness consisting of Guarantiespermitted by Section 5.3(b);

 

(viii)        Indebtedness arising under surety orperformance bonds in an aggregate amount not to exceed Twenty Million Dollars($20,000,000);

 

(ix)           unsecured Indebtedness not otherwisepermitted under this Section 5.3(c), provided, however, thatthe aggregate outstanding principal amount of all such Indebtedness shall notexceed Ten Million Dollars ($10,000,000);

 

(x)            secured Indebtedness not otherwisepermitted under this Section 5.3(c) of this Agreement, provided, however,that (i) the aggregate outstanding principal amount of all such Indebtednessshall not exceed Five Million Dollars ($5,000,000) and (ii) no such Liensecuring such Indebtedness shall encumber Accounts, Equipment, Inventory orreal property;

 

(xi)           Subordinated Indebtedness;

 

(xii)          Indebtedness of Honsberg LambSonderwerkzengmaschinen GmbH, a corporation organized under the laws of Germanyand Intermec Technologies GmbH, a corporation organized under the laws ofGermany, to one or more Borrowers or Subsidiaries permitted bySection 5.3(b)(M);

 

(xiii)         Indebtedness of Foreign Subsidiariesand Excluded Subsidiaries permitted by Section 5.3(b)(N); or

 

(xiv)        all Indebtedness of a Borrower or anySubsidiary to any other Borrower or Subsidiary to the extent permitted bySection 5.3(b).

 

**(d)           Liens; Leases.**  No Borrower shall, nor shall it permit anySubsidiary thereof to, (i) acquire or hold any assets or property subjectto any Lien, (ii) sell or otherwise transfer any Accounts, whether with orwithout recourse, except for assignments of defaulted Accounts without recoursefor purposes of collection in the ordinary course of business or as permittedby Section 5.3(a), or (iii) suffer or permit any property now owned orhereafter acquired by it to be or become encumbered by a Lien; provided,however, that this Subsection shall not prohibit:

 

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(A)          Liens on cash andcash equivalents to secure letters of credit not issued by the LC Issuer in anamount not to exceed Five Million Dollars in the aggregate ($5,000,000);

 

(B)           Liens on cash and cash equivalents tosecure bank guaranties in an amount not to exceed Five Million Dollars in theaggregate ($5,000,000);

 

(C)           any Lien for a tax, assessment orgovernment charge or levy for taxes, assessments or charges not yet due andpayable or not yet required to be paid pursuant to Section 5.2(i);

 

(D)          any deposit or cash pledges securingonly workers’ compensation, unemployment insurance or similar obligations(other than Liens arising under ERISA) in the ordinary course of business;

 

(E)           any materialman’s, warehouseman’s,mechanic’s, carrier’s, landlord’s or similar common Law or statutory Lienincurred in the ordinary course of business of such Borrower or such Subsidiaryfor amounts that are not yet due and payable or which are being diligentlycontested in good faith, so long as the Administrative Agent has been notifiedof any such contest and adequate reserves are maintained by UNOVA, Inc. on aconsolidated basis in accordance with GAAPfor their payment;

 

(F)           zoning or deed restrictions, publicutility easements, rights of way, minor title irregularities, reservations,exceptions, encroachments, covenants and similar matters relating to any realproperty of such Borrower or any Subsidiary thereof, in all such cases havingno effect which is materially adverse as a practical matter on the ownership oruse of any such real estate in question, as such property is used in theordinary course of business of such Borrower or such Subsidiary;

 

(G)           any Lien which arises in connectionwith judgments or attachments (1) the occurrence of which does not constitutean Event of Default under Section 6.10, (2) the execution or otherenforcement of such Lien is effectively stayed and the claims secured therebyare being actively contested in good faith and by appropriate proceedings and(3) which is junior in priority to the Liens of the Administrative Agentsecuring the Obligations from time to time outstanding;

 

(H)          deposits or cash pledges securingperformance of contracts, bids, tenders, leases (other than CapitalizedLeases), statutory obligations, surety and appeal bonds (other than contractsfor the payment of Indebtedness for Borrowed Money) arising in the ordinarycourse of business;

 

(I)            any Lien in favor of theAdministrative Agent created pursuant to the Loan Documents;

 

(J)            any Lien created or assumed inpurchasing, constructing or improving any real property or to which any realestate is subject when purchased; provided, however, that:(x) the mortgage, security interest or other lien is confined to theproperty in question and (y) the Indebtedness secured thereby does notexceed the total cost of the purchase, construction or improvement and(z) the aggregate outstanding Indebtedness of the Borrowers and theirSubsidiaries secured by such Liens shall not at any time exceed Fifteen MillionDollars ($15,000,000) in the aggregate;

 

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(K)          any transfer of a check or othermedium of payment for deposit or collection, or any similar transaction in theordinary course of business;

 

(L)           any Lien (including any Lien inrespect of a Capitalized Lease of personal property) which is created inconnection with the purchase of personal property consisting of Equipment orFixtures; provided, however, that: (x) the Lien is confinedto the property in question, (y) the Indebtedness secured thereby does notexceed the total cost of the purchase, and (z) the aggregate outstandingIndebtedness of the Borrowers and their Subsidiaries secured by such Liens doesnot at any time exceed Twenty Million Dollars ($20,000,000) in the aggregate;

 

(M)         Liens for security deposits to securethe performance of operating leases and deposits received from customers, ineach case, in the ordinary course of business;

 

(N)          Liens securing the replacement,extension or renewal of any Indebtedness permitted to be refinanced bySection 5.3(c) hereof so long as such Lien is upon and limited to the sameproperty previously subject thereto;

 

(O)          any existing Lien fully disclosed inthe Disclosure Schedule;

 

(P)           Liens securing the Indebtednesspermitted by Section 5.3(c)(x) (provided that no such Lien shall encumberAccounts, Equipment, Inventory or real property); or

 

(Q)          any statutory, common law,administrative or regulatory Lien securing Indebtedness permitted by Section5.3(b)(R) and, with respect a Foreign Subsidiary, any statutory Lien on its ownassets required under applicable labor or pension laws of a jurisdictionoutside of the United States.

 

In addition, no Borrower shall, nor shall itpermit any of its Subsidiaries to enter into any contract or agreement with anyPerson that would prohibit the Administrative Agent or any Lender fromacquiring a security interest, mortgage, or other Lien on, or a collateralassignment of, any of the property or assets of such Borrower or itsSubsidiaries (except for (1) restrictions contained in agreements relating topermitted purchase money liens or Capitalized Leases so long as therestrictions under such agreements and Capital Leases are only with respect tothe purchased or leased assets and the proceeds thereof, (2) restrictions underany agreement evidencing other Subordinated Indebtedness permitted underSection 5.3(c)(xi) existing on the date hereof and (3) restrictions underany agreement requiring Liens that are permitted under Section 5.3(d)).

 

**(e)           Investments.**  No Borrower shall, nor shall it permitany Subsidiary thereof to, (i) make or hold any investment in any commonstocks, bonds or securities of any Person, or make any further capitalcontribution to any Person (other than to a Borrower or a Subsidiary Guarantor)or (ii) be or become a party to any joint venture or other partnership,other than:

 

(A)          investments in Honsberg LambSonderwerkzengmaschinen GmbH, a corporation organized under the laws ofGermany, and Intermec Technologies GmbH, a corporation organized under the lawsof Germany, in an aggregate amount, when taken together and combined with theIndebtedness permitted in Section 5.3(b)(M), not to exceed Thirty MillionDollars ($30,000,000);

 

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(B)           investments in Foreign Subsidiariesand Excluded Subsidiaries in an aggregate amount, when combined with theIndebtedness permitted in Section 5.3(b)(N), not to exceed Five MillionDollars ($5,000,000); provided that notwithstanding the forgoing, anyForeign Subsidiary may make equity contributions to any other ForeignSubsidiary without limitation;

 

(C)           the common stock of its Subsidiariesexisting on the Closing Date and the capital contributions therein outstandingas of the Closing Date;

 

(D)          notes or securities issued by acustomer or supplier of such Borrower or its Subsidiaries in connection with aproceeding in respect of the Financial Impairment of such customer or supplier;

 

(E)           purchasing the stock of any Person inconnection with a Permitted Acquisition;

 

(F)           creating any Subsidiary for thepurpose of having any Person merge with and into such Subsidiary in connectionwith a Permitted Acquisition and holding the stock of such Subsidiary;

 

(G)           US Treasury notes or other Federalsecurities that have a maximum maturity for any single issue of not more thanfive years;

 

(H)          Corporate bonds with minimum rating ofA- by S&P or A3 by Moody’s;

 

(I)            Taxable or tax-exempt municipalnotes and bonds, with a minimum rating of A- by S&P or A3 by Moody’s (includingany state, county, town, city, village, fire district, or school district, allrevenue bonds, including but not limited to, water and sewer, highway, housingauthorities, medical care agencies and project finance agencies andcertification of participation bonds);

 

(J)            Taxable Adjustable Rate Notes(TARNs) or auction rate securities;

 

(K)          commercial paper or Banker’sAcceptances rated A2 or higher by S&P or P2 or higher by Moody’s;

 

(L)           deposits, including eurodollardenominated bank deposits; certificates of deposit; repurchase agreements or USmoney market funds; and

 

(M)         Investments not listed above, theaggregate principal amount of which does not exceed Ten Million Dollars($10,000,000).

 

**(f)            Distributions.**   If a Potential Event ofDefault or Event of Default shall then exist or would result after givingeffect to such Distribution, UNOVA, Inc. shall not make or commit itself tomake, nor shall the Borrowers permit any Subsidiary which is not a Wholly-OwnedSubsidiary to make or commit itself to make, any Distribution, exceptthat, with respect to any Subsidiary which is not a Wholly-Owned Subsidiary,(x) for so long as such Subsidiary is treated as a partnership or disregardedentity for federal income tax purposes (a “Flow-Through Entity”), suchSubsidiary may declare and pay cash dividends in an amount equal to thePermitted Tax Distributions in respect of such Subsidiary (provided that, if inany Fiscal Year, the Permitted Tax Distributions received by a shareholder,member or other equity holder of such Subsidiary are greater than the actualtaxes paid by such shareholder, member or other equity holder, then the excessamount shall be deducted from the Permitted Tax Distributions

 

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starting in the next Fiscal Quarter untilsuch excess is recouped) and (y) for so long as such Subsidiary is not aFlow-Through Entity but is included in one or more consolidated or combinedincome tax groups, such Subsidiary may declare and pay cash dividends in anamount equal to the federal, state and local income tax obligations of suchSubsidiary as if such Subsidiary filed separate income tax returns on aconsolidated or combined group basis.

 

**(g)           Change in Nature of Business****.**  Subject to Section 5.3(a), no Borrower shall make, nor shall itpermit any of its Subsidiaries to make, any material change in the nature ofits business as carried on as of the Closing Date; provided, however,that operation of substantially similar lines or business as carried on as ofthe Closing Date shall not be deemed to be a change in the nature of business.

 

**(h)           Charter Amendments****.**  NoBorrower shall amend any of its Charter Documents, nor shall any Borrowerpermit any amendment of the Charter Documents of any Subsidiaries thereof, ifsuch amendment would reasonably be expected to have a Material Adverse Effect.

 

**(i)            Compliance with ERISA****.**   NoBorrower shall, nor shall it permit any Subsidiary thereof or any ERISAAffiliate to engage in any transaction in connection with which such Borroweror any Subsidiary thereof could reasonably be expected to be subject to eithera civil penalty assessed pursuant to Section 502(i) of ERISA or a taximposed by Section 4975 of the Internal Revenue Code, terminate orwithdraw from any Employee Benefit Plan (other than a Multiemployer Plan) in amanner, or take any other action with respect to any such Employee Benefit Plan(including, without limitation, a substantial cessation of business operationsor an amendment of an Employee Benefit Plan within the meaning ofSection 4041(e) of ERISA), which could reasonably be expected toresult in any liability of such Borrower, such Subsidiary or any ERISAAffiliate to the PBGC, to the Department of Labor or to a trustee appointedunder Section 4042(b) or (c) of ERISA, incur any liability tothe PBGC on account of a withdrawal from or a termination of an EmployeeBenefit Plan under Section 4063 or 4064 of ERISA, incur any liability forpost-retirement benefits under any and all welfare benefit plans (as defined inSection 3(1) of ERISA) other than as required by applicable Law, fail tomake full payment when due of all amounts which, under the provisions of anyEmployee Benefit Plan or applicable Law, such Borrower, such Subsidiary or anyERISA Affiliate thereof is required to pay as contributions thereto, or permitto exist any Accumulated Funding Deficiency, whether or not waived, withrespect to any Employee Benefit Plan (other than a Multiemployer Plan); provided,however, that such engagement, termination, withdrawal, action, incurrence,failure or permitting either individually or in the aggregate shall not bedeemed to have violated this Subsection 5.3(i) unless any suchengagement, termination, withdrawal, action, incurrence, failure or permitting has resulted or could reasonably be expected to result in liabilities orclaims against such Borrower in an amount exceeding Twenty Million Dollars($20,000,000).

 

**(j)            Regulation U Compliance.**   No Borrower shall use anyportion of the proceeds of any Revolving Credit Loan in violation of anyrequirement of Law, to purchase or carry margin stock (as defined in RegulationU), or in violation of the terms and conditions of this Agreement.

 

**(k)           Accounting Changes****.**   UNOVA, Inc. shall not permit any change in itsaccounting policies or financial reporting practices and procedures, except asrequired or permitted by GAAP or as required by applicable Law, in each case asto which the Borrower Representative shall have delivered to the AdministrativeAgent prior to the effectiveness of any such change a report prepared by aResponsible Officer of the Borrower Representative describing such change andexplaining in reasonable detail the basis therefor and effect thereof.

 

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**(l)            Arm’s-Length Transactions****.**   Except as permitted in Sections5.3(a), 5.3(b), 5.3(c) or 5.3(e) or as set forth on the DisclosureSchedule, no Borrower shall, nor shall it permit any Subsidiary thereof to,enter into or permit to exist any material transaction (including, withoutlimitation, any transaction involving the investment, purchase, sale, lease,transfer or exchange of any property or the rendering of any service) with anyAffiliate of such Borrower or such Subsidiary except for transactions in theordinary course of the business of such Borrower or such Subsidiary and uponfair and reasonable terms not less favorable to such Borrower or suchSubsidiary than would be usual and customary in transactions with Persons whoare not such Affiliates.

 

**5.4          Financial Covenants.**

** **

**(a)           Consolidated Leverage Ratio**.  The Borrowers shall not permitthe Consolidated Leverage Ratio of UNOVA, Inc. and its consolidatedSubsidiaries: (a) as of any Fiscal Quarter ending during the period commencingon the Closing Date through June 30, 2005 to be greater than 3.00 to 1.00 forthe Testing Period then ending and (b) as of any Fiscal Quarter ending afterJuly 1, 2005 to be greater than 2.50 to 1.00 for the Testing Period thenending.

 

**(b)           Consolidated Interest Coverage Ratio. ** The Borrowers shall not permitthe Consolidated Interest Coverage Ratio of UNOVA, Inc. and its consolidated **Subsidiaries**: (a) as of any Fiscal Quarter ending during the period commencing onthe Closing Date through June 30, 2005 to be less than 1.75 to 1.00 for theTesting Period then ending and (b) as of any Fiscal Quarter ending after July1, 2005 to be less than 2.25 to 1.00 for the Testing Period then ending.

 

**(c)           Minimum Consolidated Net Worth**.   The Borrowers shall not permit the ConsolidatedNet Worth of UNOVA, Inc and its consolidated Subsidiaries for any **Fiscal**Quarter to be less than the sum of: (x) eighty-five percent (85%) of theConsolidated Net Worth of UNOVA, Inc. and its consolidated Subsidiaries as ofthe Closing Date plus (y) an amount equal to 50% of the sum of theConsolidated Net Income of UNOVA, Inc. and its consolidated Subsidiaries foreach Fiscal Quarter beginning with the Fiscal Quarter ending onDecember 31, 2004 in which such Consolidated Net Income is greater thanzero, plus (z) one hundred percent (100%) of all amounts of cashproceeds from the issuance or sale of equity (net of fees and expenses withrespect to such issuance).

 

# **Section 6****                                            ****EVENTS OF DEFAULT.**

 

Theoccurrence of any one or more of the following events shall constitute an“Event of Default” hereunder:

 

**6.1          Payment. ** Failure by the Borrowers (a) to makepayment of principal on any Revolving Credit Note when due or (b) pay anyinterest on the Revolving Credit Loans when due or (c) to pay any otherObligation when required to be paid hereunder to the extent such failure is notremedied within five (5) Business Days after such required date of payment; or

 

**6.2          Representations and Warranties. ** Any warranty or representationmade or deemed made by any Borrower or any Subsidiary in respect of any or allof the Borrowers or any Subsidiary thereof in this Agreement, any other LoanDocument or any certificate furnished at any time in compliance with thisAgreement shall prove to have been false or inaccurate in any material respectwhen made or deemed made; or

 

**6.3          Reporting and Notice Provisions;Violation of Certain Affirmative Covenants. ** Failure by any Borrower or any Subsidiarythereof in any respect to perform, keep or observe any other term, provision,condition or covenant contained in this Agreement (other than those provisions,terms or conditions referenced in Sections 6.1, 6.2, and 6.4 of this

 

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Agreement)or any other Loan Document that is required to be kept or observed by suchBorrower or such Subsidiary and such failure shall continue without remedy fora period of fifteen (15) Business Days after notice; or

 

**6.4          Violation of Certain Other Covenantsand Financial Covenants. ** Failure by any Borrower or any Subsidiarythereof, in any respect, to perform, keep, or observe any other term,provision, condition or covenant contained in Sections 5.1(h), 5.3 or 5.4of this Agreement which is required to be performed, kept, or observed by theBorrower or such Subsidiary; or

 

**6.5          Cross-Default. ** (i)  Failure by any Borrower or anySubsidiary thereof to make any payment on any Indebtedness for Borrowed Money(exclusive of the Obligations) of such Borrower or such Subsidiary having aprincipal amount in excess of Ten Million Dollars ($10,000,000), when the samebecomes due and payable (whether by scheduled maturity, required prepayment,acceleration, demand or otherwise) beyond any applicable grace period providedwith respect thereto, or (ii) the occurrence of any other event or theexistence of any condition under any agreement or instrument relating to anysuch Indebtedness beyond any applicable grace period provided with respectthereto, if the effect of such failure, event or condition is to accelerate, orto permit the acceleration of, the maturity of such Indebtedness, or(iii) the declaration of any such Indebtedness to be due and payable, orthe requiring of any such Indebtedness to be prepaid or repurchased (other thanby a regularly scheduled required prepayment), prior to the stated maturitythereof, or (iv) default by any Borrower or any Subsidiary thereof in respectof any Material Business Agreement or any Material License Agreement beyond anyapplicable grace period provided with respect thereto where such default(A) would permit the other party or parties to such agreement to terminatesuch agreement and (B) has resulted or could reasonably be expected toresult in a Material Adverse Effect; or

 

**6.6          Destruction of Collateral. ** The loss, theft, damage ordestruction of any portion of (i) the Collateral comprised of Inventory,Accounts and Equipment having an aggregate value in excess of Ten MillionDollars ($10,000,000) or (ii) other Collateral having an aggregate value inexcess of Twenty-Five Million Dollars ($25,000,000), in each case, to theextent not insured by an insurance carrier which has acknowledged coverage inthe amount of the claim without any reservation of rights or which has beenordered by a court of competent jurisdiction to pay such claim (excluding anyloss of Intellectual Property by reason of abandonment where such abandonmentis undertaken in good faith, pursuant to prudent business practice and couldnot reasonably be expected to result in a Material Adverse Effect); or

 

**6.7          Change of Control. ** The occurrence of any Change of Control; or

 

**6.8          Failure of Enforceability of thisAgreement, Loan Document; Security. ** If:(a)  this Agreement or any of the other Loan Documents shall cease to beenforceable, or shall be determined to be unenforceable, in accordance with itsterms, or (b) any Borrower or Subsidiary shall deny or disaffirm itsmaterial obligations under this Agreement or any of the other Loan Documents orany of the Liens granted in connection therewith, or (c) any Liens infavor of the Administrative Agent or any Lender granted in this Agreement orany of the other Loan Documents shall be determined to be void, voidable orinvalid, or are subordinated or not otherwise given the priority contemplatedby this Agreement and such voidness, voidability or invalidity shall remainuncured for a period of 20 days from the date thereof (any effective cure toinclude a restoration of the Administrative Agent’s first priority status), except,to the extent that the aggregate book value of (i) the Collateral comprised ofInventory, Accounts and Equipment secured by such unperfected Liens does notexceed Ten Million Dollars ($10,000,000) and (ii) other Collateral intended tobe secured by such unperfected Liens does not exceed Twenty-Five MillionDollars ($25,000,000) or (d) any perfected Liens granted in favor of theAdministrative Agent or the Lenders shall be determined to be unperfected,except in connection with sales of Inventory in the normal course of thebusiness of the Borrowers or

 

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relating to other sales of dispositions andtransfers not prohibited by Section 5.3(a), and such lack of perfectionshall remain uncured for a period of 20 days from the date thereof (anyeffective cure to include a restoration of the Administrative Agent’s firstpriority status), except, to the extent that the aggregate book value of(i) the Collateral comprised of Inventory, Accounts and Equipment secured bysuch unperfected Liens does not exceed Ten Million Dollars ($10,000,000) and(ii) other Collateral intended to be secured by such unperfected Liens does notexceed Twenty-Five Million Dollars ($25,000,000) or (e) any Subsidiaryshall revoke its respective Subsidiary Guaranty or permit a payment defaultunder such Subsidiary Guaranty; or

 

**6.9          ERISA. ** If:(a) any Borrower, any Subsidiary thereof, or any of their ERISA Affiliatesor any other Person institutes any steps to terminate an Employee Benefit Planof such Borrower, such Subsidiaries, or such ERISA Affiliates, which EmployeeBenefit Plan is subject to Title IV of ERISA and, as a result of suchtermination, such Borrower, such Subsidiary, or ERISA Affiliate is required tomake or could reasonably be expected to be required to make, a contribution tosuch Employee Benefit Plan the payment of which, when taken together with alllike termination payments suffered by, such Borrower, such Subsidiaries or suchERISA Affiliates, either has resulted in, or could reasonably be expected toresult in, a Material Adverse Effect, or (b) such Borrower, suchSubsidiary or such ERISA Affiliate fails to make a contribution to any EmployeeBenefit Plan which failure gives rise to a Lien under Section 302(f) ofERISA in an amount in excess of One Million Dollars ($1,000,000); or

 

**6.10        Judgments. ** Any money judgment, writ orwarrant of attachment or similar process involving an amount, when aggregatedwith all such money judgments, writs or warrants of attachment or similarprocesses outstanding at such time, in excess of Ten Million Dollars($10,000,000), to the extent not insured by an insurance carrier which hasacknowledged coverage in the amount of the claim without any reservation ofrights or which has been ordered by a court of competent jurisdiction to pay suchclaim, is entered or filed against any Borrower or any Subsidiary thereof oragainst any of their respective assets and is not satisfied, released,discharged, vacated, fully bonded or stayed within sixty (60) days after suchjudgment, writ or warrant of attachment or similar proceeding is entered; or

 

**6.11        Financial Impairment. ** (a) The Financial Impairment ofany Borrower or any Subsidiary (other than Excluded Subsidiaries and ExcludedForeign Subsidiaries) or (b) the Financial Impairment of any ExcludedSubsidiary or Excluded Foreign Subsidiary if the Financial Impairment thereofcould reasonably result in a Material Adverse Event.

 

# **Section 7****                                            ****REMEDIES.**

 

**7.1          Acceleration; Termination. ** Upon the occurrence and duringthe continuance of an Event of Default described in Sections 6.1 through 6.10above, inclusive, the Administrative Agent may and, at the written request ofthe Required Lenders, shall without presentment, demand or notice of any kindall of which are hereby expressly waived by each Borrower: (a) declare allof the Obligations immediately due and payable, (b) terminate eachLender’s Revolving Credit Commitment whereupon no Lender shall have any furtherobligation to make any Revolving Credit Loan, (c) terminate the LC Issuer’sobligation to issue Letters of Credit and (d) terminate each Lender’sobligation to participate in Letters of Credit issued after such termination ofthe obligation of the LC Issuer to issue Letters of Credit.

 

**7.2          Automatic Acceleration and Termination. ** If any Event of Default referredto in Section 6.11 above shall occur and be continuing, (a)  eachLender’s Revolving Credit Commitment shall automatically and immediatelyterminate (if not already expired or terminated by the Borrowers or terminatedpursuant to this Section 7) whereupon no Lender shall have any obligationthereafter to make any Revolving Credit Loan hereunder, (b) the LCIssuer’s obligation to issue Letters of Credit shall immediately terminate, and(c) all of the Obligations

 

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and the Letter of Credit Obligations thenowing to the Administrative Agent, Lenders or the LC Issuer shall thereuponbecome immediately due and payable in full, all without any presentment, demandor notice of any kind, which are hereby waived by each Borrower.

 

**7.3          General Rights and Remedies of the AdministrativeAgent and the Lenders. ** Withrespect to the Collateral, the Administrative Agent shall have all of therights and remedies of a secured party under the UCC or under other applicableLaw.  The Administrative Agent, eachLender and the LC Issuer shall have all other legal and equitable rights towhich each may be entitled, all of which rights and remedies shall becumulative, and none of which shall be exclusive, to the extent permitted byLaw, in addition to any other rights or remedies contained in this Agreement orin any of the other Loan Documents.  TheAdministrative Agent, each Lender and the LC Issuer hereby expressly agreethat, unless requested by the Administrative Agent, upon the consent of theRequired Lenders, such Lender and the LC Issuer will not take or cause to betaken, in respect of the Revolving Credit Loans or the other Obligations or theCollateral, any action or remedy that is independent from the actions orremedies taken or to be taken by the Administrative Agent, except for anyactions taken by any Lender or the LC Issuer necessary to preserve its rightsin connection with any Event of Default described in Section 6.11 of thisAgreement.

 

**7.4          Additional Remedies. ** During the continuance of anyEvent of Default and after the Obligations and/or the Letter of CreditObligations shall have been declared by the Administrative Agent to be or shallhave otherwise hereunder become immediately due and payable, the AdministrativeAgent may, in its sole discretion, exercise the following rights and remediesto the extent permitted by applicable Law and in addition to any other right orremedy provided for in this Agreement:

 

**(a)           Possession of Collateral. ** The Administrative Agent shallhave the right to take immediate possession of the Collateral and all Proceedsrelating to such Collateral and: (i) to require theBorrowers, at the Borrowers’ expense, to assemble the Collateral and make itavailable to the Administrative Agent at such facilities of the Borrowers asthe Administrative Agent shall designate or (ii) to enter any of thepremises of the Borrowers or wherever any Collateral shall be located and tokeep and store the same on such premises until sold.  If the premises on which any Collateral islocated is owned or leased by the Borrowers, then the Borrowers shall notcharge the Administrative Agent for storage of such Collateral on suchpremises.

 

**(b)           Foreclosure of Liens. ** The Administrative Agent shallhave the right to foreclose on the Liens created under this Agreement and eachof the other Loan Documents or under any other agreementrelating to the Collateral.

 

**(c)           Disposition of Collateral. ** The Administrative Agent shallhave the right to sell or to otherwise dispose of all or any Collateral in itsthen condition, or after any further processing thereof, at public orprivate sale or sales, wholesale dispositions, or sales pursuant to one or morecontracts, with such notice as may be required by Law, in lots or in bulk, forcash or on credit, all as the Administrative Agent, in its discretion, may deemadvisable.  Each Borrower acknowledgesand covenants that ten (10) days written notice to the Borrower Representativeof any public or private sale or other disposition of Collateral shall bereasonable notice thereof, and such sale shall be at the premises of suchBorrower, at such other locations where the Collateral then is located, or asotherwise determined by the Administrative Agent.  The Administrative Agent shall have the rightto conduct such sales on the premises of any Borrower, without charge therefor,and such sales may be adjourned from time to time in accordance with applicableLaw without further requirement of notice to the Borrower Representative.  Each Lender and each LC Issuer shall have theright to bid or credit bid at any such sale on its own behalf.

 

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**(d)           Application of Collateral; Application ofLiquidation Proceeds. ** The AdministrativeAgent, with or without proceeding with sale or foreclosure or demanding paymentof the Obligations, shall, without notice, at any time during the continuanceof an Event of Default, appropriate and apply to the Obligations all paymentsreceived by the Administrative Agent and all monies and Proceeds received theAdministrative Agent with respect to any and all Collateral as follows:

 

**(i)**            First, to thepayment of all reasonable expenses (to the extent not otherwise paid by theBorrowers) incurred by the Administrative Agent and the Lenders in connectionwith the exercise of such remedies, including, without limitation, allreasonable costs and expenses of collection, reasonable documented attorneys’fees, court costs and any foreclosure expenses;

 

**(ii)**           Second, to thepayment *pro rata* of any fees thenaccrued and payable to the Administrative Agent or any Lender under thisAgreement;

 

**(iii)**         Third, to thepayment *pro rata*of interest thenaccrued on the outstanding Revolving Credit Loans of the Borrowers;

 

**(iv)**          Fourth, to thepayment *pro rata* of the principalbalance then owing on the outstanding Revolving Credit Loans with the paymentson the outstanding Revolving Credit Loans being *pro rata* to the Lenders on the basis of their Pro Rata Sharethereof;

 

**(v)**            Fifth, as cashcollateral security against the aggregate undrawn amount of any Letter ofCredit outstanding for the account of the Borrowers and any other Letter ofCredit Obligations outstanding of the Borrowers;

 

**(vi)**          Sixth, to thepayment of: (i) all other amounts owed by the Borrowers to the AdministrativeAgent, any Lender, the LC Issuer under this Agreement or any other LoanDocument, (ii) all amounts owing to the Designated Hedge Creditor as DesignatedHedge Obligations and (iii) all amounts owing to any Lender in connection withcash management services provided by such Lender to the Borrowers and theirSubsidiaries; provided, however, if such monies and Proceeds areinsufficient to pay such amounts in full, to the payment of such amounts *pro rata*; and

 

**(vii)**         Last, anyremaining surplus after all of the Obligations have been paid in full, to theBorrowers or to whomsoever shall be lawfully entitled thereto.

 

**7.5          Set-off. ** If anyEvent of Default shall occur which is continuing, each of the Lenders and theLC Issuer and each Affiliate thereof shall have the right (in addition to suchother rights as it may have by operation of Law or otherwise) to the extentpermitted by applicable Law, but subject to Sections 7.3 and 7.10 of thisAgreement, at any time to set off against and to appropriate to and applytoward the payment of the Obligations and the Letter of Credit Obligations, andall other liabilities under this Agreement and the other Loan Documents thenowing to it (and any participation purchased or to be purchased pursuant toSection 7.10 below) whether or not the same shall then have matured, anyand all deposit (general or special) and any other Indebtedness at any timeheld or owing by such Lender or each Affiliate thereof (including branches andagencies thereof wherever located) to or for the credit or account of theBorrowers, all without notice to or demand upon the Borrowers or any otherPerson.

 

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**7.6          Actions in Respect of the Letters ofCredit Upon Default. ** Uponthe occurrence of an Event of Default which is continuing, to the extent thatany Letters of Credit have been issued which then are outstanding, theAdministrative Agent, for the benefit of itself, the Lenders and the LC Issuer,may, and upon the written request of Required Lenders shall, make demand, uponBorrowers to, and forthwith upon such demand the Borrowers will, pay to theAdministrative Agent in same day funds and in the currency in which such Letterof Credit is denominated, for deposit in a special cash collateral account (the“Letter of Credit Collateral Account”), an amount equal to 105% of the maximumamount available to be drawn under the Letters of Credit (i) to secure theLetter of Credit Obligations and (ii) upon payment in full thereof, tosecure any other Obligations then outstanding. In the event that the Borrowers shall not deposit such funds upon demandby the Administrative Agent, the Administrative Agent may, in its solediscretion, deposit any funds of the Borrowers in the possession of theAdministrative Agent to the Letter of Credit Collateral Account until theamount deposited in such account equals 105% of the maximum amount available tobe drawn under the Letters of Credit. The Letter of Credit Collateral Account shall be in the name ofAdministrative Agent and under the sole dominion and control of theAdministrative Agent subject to the terms of this Agreement.  The Administrative Agent may apply funds heldin the Letter of Credit Collateral Account to the payment of any amounts, asshall have become or shall become due and payable by the Borrowers to the LCIssuer and, after the occurrence and during the continuance of any Event ofDefault, to the payment of Obligations then outstanding.  Each Borrower agrees not to: (i) sell orotherwise dispose of any interest in the Letter of Credit Collateral Account orany funds held therein, or (ii) create or permit to exist any Lien,security interest or other charge or encumbrances upon or with respect to theLetter of Credit Collateral Account or any funds held therein, except in favorof the Administrative Agent as provided in this Agreement.

 

**7.7          Authority to Execute Transfers. ** Without limitation of anyauthorization granted to the Administrative Agent hereunder, each Borrower alsohereby authorizes the Administrative Agent, upon the occurrence of an Event ofDefault which is continuing, to execute, in connection with the exercise by theAdministrative Agent of its remedies hereunder, any endorsements, assignmentsor other instruments of conveyance or transfer with respect to the Collateral.

 

**7.8          Limited License to Liquidate. ** Each Borrower hereby grants tothe Administrative Agent, for the benefit of itself, the Lenders and the LCIssuer: (a) a non-exclusive, royalty-free license or other right to use,without charge, all of such Borrower’s Intellectual Property (including allrights of use of any name or trade secret) as it pertains to the Collateral, inmanufacturing, advertising for sale and selling any Collateral; provided,however, that such license and right to use shall be exercisable by theAdministrative Agent for the benefit of the Lenders only upon request by theAdministrative Agent after  theoccurrence of an Event of Default which is continuing; and (b) to theextent permitted thereunder, all of such Borrower’s rights under all licensesand all franchise agreements, which shall inure to the Administrative Agent forthe benefit of itself, the Lenders and the LC Issuer without charge but onlyupon request by the Administrative Agent after the occurrence of an Event ofDefault which is continuing.

 

**7.9          Equalization. ** EachLender agrees with the other Lenders that if at any time it shall obtain anyAdvantage over the other Lenders or any thereof in respect of the RevolvingCredit Loans it will purchase from such other Lender or Lenders, for cash andat par, such additional participation in the Revolving Credit Loans owing tothe other or others as shall be necessary to nullify the Advantage.  If any such Advantage shall be recovered inwhole or in part from the Lender receiving the Advantage, each such purchaseshall be rescinded, and the purchase price restored (with interest and othercharges if and to the extent actually incurred by the Lender receiving theAdvantage) ratably to the extent of the recovery.  During the existence of any Potential Defaultor upon the occurrence of an Event of Default which is continuing, any

 

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payment of any Indebtedness owing by suchBorrower to any Lender shall be applied to the Obligations owing to such Lenderuntil the same shall have been paid in full before being applied to otherIndebtedness of such Borrower owing to such Lender.

 

**7.10        Remedies Cumulative.  ** The above-stated remedies arenot intended to be exhaustive and the full or partial exercise of any of suchremedies shall not preclude the full or partial exercise of any other remedy bythe Administrative Agent under this Agreement, under any Loan Document, or atequity or under Law.

 

**7.11        Appointment of Attorney-in-Fact. ** The Administrative Agent shallhereby have the right, and each Borrower hereby irrevocably makes, constitutes,and appoints the Administrative Agent (and all officers, employees, or agentsdesignated by the Administrative Agent) as its true and lawful attorney-in-factand agent, with full power of substitution, from time to time following theoccurrence of an Event of Default which is continuing and without assent by theBorrowers to effectuate, in such Borrower’s name, such Borrower’s obligationsunder this Agreement and to execute, in its sole discretion, the transferscontemplated by Section 7.7.

 

EachBorrower hereby ratifies all that said attorney shall lawfully do or cause tobe done by virtue hereof.  This power ofattorney is a power coupled with an interest and shall be irrevocable.  The expenses of the Administrative Agentincurred in connection with such the exercise of such power of attorney,together with interest thereon at a the rate then applicable hereunder toAlternate Base Rate Loans, shall be payable by the Borrowers to theAdministrative Agent on demand.

 

# **Section 8****                                            ****THE ADMINISTRATIVE AGENTAND LEAD ARRANGER.**

# ** **

**8.1          The Administrative Agent. ** Each Lender and the LC Issuerirrevocably appoints KeyBank to act as Administrative Agent under thisAgreement and the other Loan Documents for the benefit of such Lender and theLC Issuer with full authority to take such actions, and to exercise suchpowers, on behalf of such Lender and the LC Issuer in respect of this Agreementand the other Loan Documents as are herein and therein respectively delegatedto the Administrative Agent or as are reasonably incidental to those delegatedpowers.  The Administrative Agent in suchcapacity shall be deemed to be an independent contractor of the Lenders and theLC Issuer.  Each of the Lenders and theLC Issuer hereby expressly agrees that, without first obtaining the priorwritten consent of the Administrative Agent or the Required Lenders, suchLender and the LC Issuer, as the case may be, shall not take or cause to betaken, in respect of the Obligations hereunder or the Collateral, anyenforcement or remedial action that is independent from the actions or remediestaken or to be taken by the Administrative Agent, except for any actions takenby any Lender or the LC Issuer which are necessary to preserve its rights inconnection with any Event of Default described in Section 6.11 of thisAgreement.

 

**8.2          Nature of Appointment. ** Neither the Administrative Agentnor KeyBank in its capacity as Lead Arranger (the “Lead Arranger”) shall haveany fiduciary relationship with any Lender or the LC Issuer by reason of thisAgreement and the other Loan Documents. Neither the Administrative Agent nor the Lead Arranger shall have anyduty or responsibility whatsoever to any Lender or the LC Issuer except thoseexpressly set forth in this Agreement and the other Loan Documents.  Without limiting the generality of theforegoing, each Lender and the LC Issuer acknowledges that the AdministrativeAgent and the Lead Arranger is acting as such solely as a convenience to theLenders and not as a manager of the Revolving Credit Commitments, theobligations to issue Letters of Credit or the Obligations.  This Section 8 does not confer any rightsupon any Borrower (other than as provided in Section 8.12) or anyone else(except the Lenders and the LC Issuer), whether as a third party beneficiary orotherwise.

 

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**8.3          Administrative Agent as Lender; OtherTransactions. ** TheAdministrative Agent’s rights as a Lender under this Agreement and the otherLoan Documents shall not be affected by serving as the AdministrativeAgent.  The Administrative Agent and itsAffiliates may generally transact any banking, financial, trust, advisory orother business with any Borrower and any Subsidiary thereof (including, withoutlimitation, the acceptance of deposits, the extension of credit and theacceptance of fiduciary appointments) without notice to the Lenders or the LCIssuer, without accounting to the Lenders or the LC Issuer and withoutprejudice to the Administrative Agent’s rights as a Lender under this Agreementand the other Loan Documents except as may be expressly required under thisAgreement.

 

**8.4          Instructions from Lenders. ** The Administrative Agent shallnot be required to exercise any discretion or take any action as to matters notexpressly provided for by this Agreement and the other Loan Documents(including, without limitation, collection and enforcement actions in respectof any Obligations and any Collateral) except that the Administrative Agentshall take such action (or omit to take such action) other than actionsreferred to in Section 10 of this Agreement, as may be reasonably requested ofit in writing by the Required Lenders or all of the Lenders, if applicable, andwhich actions and omissions shall be binding upon all of the Lenders and the LCIssuer; provided, however, that the Administrative Agent shallnot be required to act (or omit any act) if, in its judgment, any such actionor omission might expose the Administrative Agent to personal liability ormight be contrary to this Agreement, any Loan Document or any applicable Law.

 

**8.5          Lender’s Diligence. ** Each Lender and the LC Issuer:(a) represents and warrants that it has made its decision to enter intothis Agreement and the other Loan Documents and (b) agrees that it willmake its own decision as to taking or not taking future actions in respect ofthis Agreement and the other Loan Documents; in each case without reliance onthe Administrative Agent, the Lead Arranger or any other Lender and the LCIssuer, or any employee or agent thereof and on the basis of its independentcredit analysis and its independent examination of and inquiry into suchdocuments and other matters as it deems relevant and material.

 

**8.6          No Implied Representations. ** Neither the Administrative Agentnor the Lead Arranger shall be liable for any representation, warranty,agreement or obligation of any kind of any other party to this Agreement oranyone else, whether made or implied by any Borrower in this Agreement or anyLoan Document or by a Lender or the LC Issuer in any notice or othercommunication or by anyone else or otherwise.

 

**8.7          Sub-Administrative Agents. ** The Administrative Agent mayemploy agents and shall not be liable (except as to money or property receivedby it or its agents) for any negligence or willful misconduct of any such agentselected by it with reasonable care.

 

**8.8          Administrative Agent’s Diligence. ** Neither the Administrative Agentnor the Lead Arranger shall be required: (a) to keep itself informed as toanyone’s compliance with any provision of this Agreement or any Loan Document,(b) to make any inquiry into the properties, financial condition oroperation of each Borrower and each Subsidiary thereof or any other matterrelating to this Agreement or any Loan Document, (c) to report to anyLender and the LC Issuer any information (other than which this Agreement orany Loan Document expressly requires to be so reported) that the AdministrativeAgent or any of its Affiliates may have or acquire in respect of theproperties, business or financial condition of each Borrower and eachSubsidiary or any other matter relating to this Agreement or any Loan Documentor (d) to inquire into the validity, effectiveness or genuineness of thisAgreement or any Loan Document.

 

**8.9          Notice of Default. ** The Administrative Agent shall not be deemedto have knowledge of any Potential Default or Event of Default unless and untilit shall have received a

 

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written notice describing such PotentialDefault or Event of Default and citing the relevant provision of this Agreementor any Loan Document.  The AdministrativeAgent shall give each Lender (except the Lender or the LC Issuer giving suchnotice) reasonably prompt notice of any such written notice.

 

**8.10        Administrative Agent’sLiability. ** Neither the Administrative Agent (acting inits capacity as Administrative Agent), nor the Lead Arranger acting in itscapacity as Lead Arranger, nor any directors, officers, employees, attorneys,and other agents acting for the Administrative Agent or the Lead Arranger,acting in such capacities respectively, shall be liable to the Lenders or theLC Issuer for any action or omission on their respective parts except for grossnegligence, willful misconduct or bad faith. Without limitation of the generality of the foregoing, theAdministrative Agent and the Lead Arranger: (a) may treat the payee of anyNote as the holder thereof until the Administrative Agent receives a fullyexecuted copy of any assignment with respect thereto, signed by such payee andin form satisfactory to the Administrative Agent; (b) may consult withlegal counsel, independent public accountants and other experts selected by itand shall not be liable for any action taken or omitted to be taken in goodfaith by it in accordance with the advice of such counsel, accountants orexperts which have been selected by the Administrative Agent with reasonablecare; (c) makes no warranty or representation to any Lender and shall notbe responsible for any statements, certifications, warranties orrepresentations made in or in connection with this Agreement or any other LoanDocument, the Administrative Agent (and to the extent relevant, the LeadArranger) being entitled to rely conclusively upon such certificates;(d) shall not have any duty to ascertain or to inquire as to the performanceor observance of any of the terms, covenants or conditions of this Agreement,the Revolving Credit Notes or any other Loan Document or to inspect theproperty (including the books and records) of the Borrowers; (e) shall notbe responsible for the due execution, legality, validity, enforceability,genuineness, sufficiency or value of this Agreement, or collateral covered byany agreement or any other Loan Document, and (f) shall incur no liabilityby acting upon any notice, consent, certificate or other instrument orwriting  believed by it in good faith tobe genuine and correct and signed or sent by the proper party or parties.

 

Neitherthe Administrative Agent, nor the Lead Arranger, nor any of their respectivedirectors, officers, employees or agents shall have any responsibility to anyBorrower or any Subsidiary thereof on account of the failure of or delay inperformance or breach by any Lender or the LC Issuer of any of its obligationshereunder or to any Lender on account of the failure of or delay in performanceor breach by any other Lender or the LC Issuer or any Borrower of any of itsobligations hereunder or under any Loan Document or in connection herewith ortherewith.  The Lenders and the LC Issuereach hereby acknowledge that the Administrative Agent shall be under no duty totake any discretionary action permitted to be taken by it pursuant to theprovisions of this Agreement, the Revolving Credit Notes or any other LoanDocument unless it shall be requested in writing to do so by the RequiredLenders.

 

**8.11        AdministrativeAgent’s and Lead Arranger’s Indemnity. ** The Lenders shall indemnify the AdministrativeAgent, in its capacity as Administrative Agent, and the Lead Arranger, in itscapacity as Lead Arranger (to the extent the Administrative Agent or the LeadArranger, as the case may be, is not reimbursed by any Borrower and withoutlimiting the obligations of the Borrowers hereunder), from and against:(a) any loss or liability (other than any caused by the AdministrativeAgent’s or the Lead Arranger’s gross negligence, willful misconduct or badfaith) incurred by the Administrative Agent or the Lead Arranger in respect ofthis Agreement, the Revolving Credit Revolving Credit Notes or any LoanDocument and (b) any out-of-pocket expenses incurred in connection with orotherwise related to this Agreement, the Revolving Credit Revolving CreditNotes or any Loan Document (other than any caused by the Administrative Agent’sor Lead Arranger’s gross negligence, willful misconduct or bad faith)including, without limitation, reasonable fees and disbursements of legalcounsel of its own selection (including, without limitation, the reasonableinterdepartmental charges of its

 

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salaried attorneys) in the defense of anyclaim against it in any way relating to arising out of this Agreement or otherLoan Document or any action taken or omitted to be taken by the AdministrativeAgent in connection therewith or in the prosecution of its rights and remediesas the Administrative Agent (other than the loss, liability or costs incurredby the Administrative Agent or the Lead Arranger in the defense of any claimagainst it by the Lenders or the LC Issuer arising in connection with itsactions in its capacity as Administrative Agent); provided, however,that each Lender shall be liable for only its Pro Rata Share of the whole lossor liability; provided, further that no action taken inaccordance with instructions of Required Lenders shall be deemed to constitutegross negligence or willful misconduct.

 

**8.12        Resignation ofAdministrative Agent. ** TheAdministrative Agent may resign as Administrative Agent for any reasoneffective twenty (20) Business Days after giving notice thereof to the Lendersand the LC Issuer and the Borrowers.  Ifthe Administrative Agent shall resign, the Required Lenders shall appoint fromamong the Lenders a successor Administrative Agent for the Lenders and the LCIssuer.  If no successor AdministrativeAgent shall have been appointed by the time such resignation becomes effective,then the retiring Administrative Agent may, on behalf of the Lenders and the LCIssuer, appoint a successor Administrative Agent from among the remainingLenders.  If no appointed successoraccepts such appointment, the Required Lenders shall appoint an AdministrativeAgent from among the Lenders or by selecting an independent third party to actin the capacity as Administrative Agent. Upon appointment (whether effected by the Required Lenders or the retiringAdministrative Agent on behalf of the Lenders) and acceptance of suchappointment as “Administrative Agent,” the successor Administrative Agent shallsucceed to the rights, powers and duties of the Administrative Agent, and theterm “Administrative Agent” shall mean such successor Administrative Agent,effective upon its appointment and acceptance, and the former AdministrativeAgent’s rights, powers and duties as Administrative Agent shall be terminated,without any other or further act or deed on the part of such formerAdministrative Agent or any of the parties to this Agreement or any holder ofthe Revolving Credit Notes.  After anyAdministrative Agent’s resignation, the provisions of Section 8.11 shallinure to its benefit as to any actions taken or omitted to be taken by it whileit was Administrative Agent.

 

**8.13**        **NoImplied Representations. ** The Administrative Agent shall not beliable for any representation, warranty, agreement or obligation of any kind ofany other party to this Agreement or anyone else, whether made or implied bythe Borrowers in this Agreement or any Loan Document or by a Lender, the LCIssuer or the Designated Hedge Creditor in any notice or other communication orby anyone else or otherwise.  Each Lenderacknowledges and agrees that neither such Lender, nor any of its Affiliates,participants or assignees, may rely on the Administrative Agent to carry outsuch Lender’s, Affiliate’s, participant’s or assignee’s customer identificationprogram, or other obligations required or imposed under or pursuant to the USAPatriot Act or the regulations thereunder, including the regulations containedin 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), orany other Anti-Terrorism Law, including any programs involving any of thefollowing items relating to or in connection with any Borrower, its Affiliatesor agents, this Agreement, the other Loan Documents or the transactionshereunder or contemplated hereby: (1) any identity verification procedures, (2)any record keeping, (3) comparisons with government lists, (4) customer noticesor (5) other procedures required under the CIP Regulations or such other laws.

 

# **Section 9****                                            ****BORROWER GUARANTY.**

 

**9.1          Borrower Cross-Guaranty; MaximumLiability. ** Toinduce the Lenders to make the Revolving Credit Loans to the Borrowers and theLC Issuer to issue Letters of Credit, and in consideration thereof, each of theBorrowers hereby unconditionally and irrevocably: (a) guarantees, jointlyand severally, to the Administrative Agent, the Lenders and the LC Issuer thedue and punctual payment in immediately available funds of all Obligationsowing by any or

 

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all of the other Borrowers hereunder (whetherby acceleration or otherwise), under any Designated Hedge Agreement or withrespect to any cash management services provided by a Lender, (b) guarantees,jointly and severally, to the LC Issuer the due and punctual payment inimmediately available funds of all reimbursement obligations of each Letter ofCredit Obligor and (c) agrees, jointly and severally, to pay any and allreasonable expenses which may be incurred by the Administrative Agent inenforcing its rights with respect to such Obligations (collectively, the“Borrower Guaranteed Obligations”).  Tothe extent that the Obligations of a Borrower are construed to be a BorrowerGuaranty of the Obligations of any other Borrower to the Lenders and the LCIssuer, and to the extent it is necessary for the enforceability of such aBorrower Guaranty, the maximum liability of a Borrower Guarantor under itsBorrower Guaranty shall be the greatest amount which, after taking intoconsideration all other valid and enforceable debts and liabilities of suchBorrower Guarantor, an applicable court has determined (after any appeals)would not render such Borrower Guarantor insolvent, unable to pay its debts asthey become due, inadequately capitalized for the business which it intends toconduct (in all such cases, within the meaning of Section 548 of the BankruptcyCode, 11 U.S.C. §101, et. seq., or any other similar state Law),or unable to pay a judgment rendered upon a claim that is the subject of anaction or proceeding pending at the time when the obligations of this BorrowerGuaranty are incurred or increased.

 

**9.2          Guaranty Unconditional. ** The obligations of the BorrowerGuarantors under the Borrower Guaranty shall be joint and several, irrevocable,unconditional and absolute and, without limiting the generality of theforegoing, shall not be released, discharged or otherwise affected by, exceptfor payment of Obligations and to the extent permitted by applicable Law(i) any extension, renewal, settlement, compromise, waiver or release inrespect of any obligation or any Revolving Credit Loan under this Agreement orany Loan Document by operation of Law or otherwise; (ii) any modificationor amendment of or supplement to this Agreement or any Loan Document;(iii) any modification, amendment, waiver, release, non-perfection orinvalidity of any direct or indirect security, or of any guarantee or otherliability of any third party, of the Obligations of any Borrower or itsSubsidiary with respect to which the Borrower Guaranty relates; (iv) anychange in the corporate existence, structure, or ownership of, or anyinsolvency, bankruptcy, reorganization or other similar proceeding affectingany Borrower Guarantor or its assets or any resulting release or discharge ofany of the Obligations of the Borrower Guarantors contained in this Agreementor any Loan Document; (v) the existence of any claim, set-off or otherrights which any Borrower Guarantor may have at any time against any Lender,the LC Issuer or any other Person, whether or not arising in connection withthis Agreement or any Loan Document, provided, however, thatnothing herein shall prevent the assertion of any such claim by separate suitor compulsory counterclaim; (vi) any invalidity or unenforceabilityrelating to or against any Borrower or its Subsidiary for any reason of thisAgreement or any Loan Document or any provision of applicable Law or regulationpurporting to prohibit the payment by any Borrower under this Agreement or anyLoan Document; or (vii) to the extent permitted by applicable Law, anyother act or omission to act or delay of any kind by a Borrower, a BorrowerGuarantor, the Administrative Agent, the Lenders, the LC Issuer or any otherPerson or any other circumstance whatsoever that might, but for the provisionsof this paragraph, constitute a legal or equitable discharge of the BorrowerGuaranteed Obligations under this Section 9.

 

**9.3          Discharge; Reinstatement. ** The obligations of each BorrowerGuarantor under this Section 9 shall remain in full force and effect until theRevolving Credit Commitments of the Lenders and the obligations of the LCIssuer are terminated, and the Obligations of the Borrowers under thisAgreement or any other Loan Document have been paid in full.  If at any time any payment of any amountpayable by Borrower Guarantor under this Section 9, any other section of thisAgreement or other Loan Document is rescinded or must be otherwise restored orreturned upon the insolvency, bankruptcy or reorganization of any BorrowerGuarantor or otherwise, the other Borrower Guarantors’ obligations under thisSection 9 with respect to such payment shall be reinstated at such time asthough such payment had become due but had not

 

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been made at such time.  This Section 9 shall survive the terminationof this Agreement until the payment in full of all amounts payable under thisAgreement and any other Loan Documents.

 

**9.4          Waiver.**  No Borrower Guarantor shall be entitled toenforce any remedy which the Administrative Agent, any Lender or the LC Issuernow has or may hereafter have against any Borrower, any endorser or anyGuarantor or other Borrower Guarantor in respect of all or any part of theBorrower Guaranteed Obligations paid by such Borrower Guarantor until all ofthe Obligations and Letter of Credit Obligations shall have been fully andfinally paid to the Administrative Agent for the benefit of the AdministrativeAgent, any Lender or the LC Issuer and all commitments of the Lenders and theLC Issuer to the Borrowers have terminated. Each Borrower Guarantor hereby waives any benefit of, and any right toparticipate in, any security or collateral given to the Administrative Agentfor the benefit of the Administrative Agent, the Lenders and the LC Issuer tosecure payment of the Borrower Guaranteed Obligations or any other liability ofany Borrower, any Guarantor or any Borrower Guarantor to the AdministrativeAgent, any Lender or the LC Issuer.  EachBorrower Guarantor also waives all setoffs and counterclaims and allpresentments, demands for performance, notices of nonperformance, protests,notices of protest, notices of dishonor, and notices of acceptance of thisBorrower Guaranty.  Each BorrowerGuarantor further waives all notices of the existence, creation or incurring ofadditional Obligations by any other Borrower, and also waives all notices thatthe principal amount, or any portion thereof, and/or any interest on anyinstrument or document evidencing all or any part of the Borrower GuaranteedObligations is due, notices of any and all proceedings to collect all or anypart of the Borrower Guaranteed Obligations, and, to the extent permitted byLaw, notices of exchange, sale, surrender or other handling of any Collateralgiven to the Administrative Agent for the benefit of the Administrative Agent,the Lenders and the LC Issuer to secure payment of the Borrower GuaranteedObligations.

 

**9.5          Stay of Acceleration. ** If acceleration of the time forpayment of any amount payable by any Borrower or Borrower Guarantor under thisAgreement or any other Loan Document in respect of a Borrower GuaranteedObligation is stayed upon the insolvency, bankruptcy or reorganization of anyBorrower or Borrower Guarantor all such amounts otherwise subject toacceleration under the terms of this Agreement shall nonetheless be payable bythe other Borrower Guarantors hereunder forthwith on demand by theAdministrative Agent or the Required Lender.

 

**9.6          Subrogation and Contribution Rights. ** If any Borrower Guarantor makesa payment in respect of the Borrower Guaranteed Obligations, it shall besubrogated to the rights, if any, of the payees against the other BorrowerGuarantors with respect to such payment and shall have the rights ofcontribution set forth below against the other Borrower Guarantors; provided,however, that such Borrower Guarantor shall not enforce its rights toany payment by way of subrogation or by exercising its right of contributionuntil all the Obligations and Letter of Credit Obligations, as the case may be,owing to the Administrative Agent, the Lenders and the LC Issuer shall havebeen finally paid in full and may not under applicable insolvency laws berequired to be repaid by the Administrative Agent, any Lender or the LC Issuer,as the case may be, and the Revolving Credit Commitments of the Lenders and allobligations of the LC Issuer to issue Letters of Credit hereunder have beenterminated.

 

**9.7          Guaranteed Obligation andContribution Payments. ** Subject to all of the Obligations and Letterof Credit Obligations, as the case may be, owing to the Administrative Agent,the Lenders and the LC Issuer having been finally paid in full and not subjectto required repayment under applicable insolvency laws and the Revolving CreditCommitments of the Lenders hereunder and all obligations of the LC Issuer toissue Letters of Credit hereunder having terminated, each Borrower Guarantorshall make, and agrees with each of the other Borrower Guarantors (and thesuccessors and assigns of such Borrower Guarantors) to make, payments inrespect of the Obligations of such Borrower Guarantor to which such other

 

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Borrower Guarantors are subrogated orcontribution payments to which such other Borrower Guarantors are entitled,such that, taking into account all such payments on account of subrogation orcontribution rights:

 

**(a)           Pro Rata Sharing.  **Each Borrower Guarantor shall have paid to the other BorrowerGuarantors on account of such subrogation and contribution rights, (A) allObligations the benefit of which has been received by such Borrower Guarantoror which relate to Obligations the benefit of which has been received by suchBorrower Guarantor or (B) if the aggregate of all such payments by all BorrowerGuarantors to all other Borrower Guarantors would exceed the outstanding Obligations,such Borrower Guarantor’s pro rata share of the outstanding Obligations (otherthan Designated Hedge Obligations), in accordance with the amount of thebenefit received by the Borrower Guarantor as described under subsection (A)hereinabove; and

 

**(b)           Deficiency.  I**f there remain Obligations unpaid afterapplication of the payments referred to above, the deficiency shall be sharedamong the Borrower Guarantors pro rata in proportion to their respective networth on the Closing Date of this Agreement.

 

# **Section 10****                                     ****TRANSFERS ANDASSIGNMENTS.**

# ** **

**10.1        Successors and Assigns**.  The provisions of thisAgreement shall be binding upon and inure to the benefit of the parties heretoand their respective successors and assigns permitted hereby, except that no Borrowermay assign or otherwise transfer any of its rights or obligations hereunderwithout the prior written consent of each Lender.  No Lender may assign or otherwise transferany of its rights or obligations hereunder except: (i) to an Eligible Assignee inaccordance with the provisions of Section 10.2, (ii) by way of participation inaccordance with the provisions of Section 10.4 or (iii) by way of pledge orassignment of a security interest subject to the restrictions of Section 10.5(and any other attempted assignment or transfer by any party hereto shall benull and void).  Nothing in thisAgreement, expressed or implied, shall be construed to confer upon any Person(other than the parties hereto, their respective successors and assignspermitted hereby, Participants to the extent provided in Section 10.4 and, tothe extent expressly contemplated hereby, the Related Parties of each of theAdministrative Agent and the Lenders) any legal or equitable right, remedy orclaim under or by reason of this Agreement.

 

**10.2        Transfer of Revolving CreditCommitments.**  Any Lender may at any time assign to one ormore Eligible Assignees all or a portion of its rights and obligations underthis Agreement (including all or a portion of its Revolving Credit Commitment andthe Revolving Credit Loans at the time owing to such Lender); providedthat (i) except in the case of an assignment of the entire remaining amount ofthe assigning Lender’s Revolving Credit Commitment and the Revolving CreditLoans at the time owing to such Lender or in the case of an assignment to aLender or an Affiliate of a Lender or an Approved Fund with respect to aLender, the aggregate amount of the Revolving Credit Commitment (which for thispurpose includes Revolving Credit Loans outstanding thereunder) or, if theapplicable Revolving Credit Commitment is not then in effect, the principaloutstanding balance of the Revolving Credit Loans of the assigning Lendersubject to each such assignment (determined as of the date the Assignment andAssumption with respect to such assignment is delivered to the AdministrativeAgent or, if “Trade Date” is specified in the Assignment and Assumption, as ofthe Trade Date) shall not be less than $5,000,000, and, so long as no Event ofDefault has occurred and is continuing, the Borrower Representative otherwiseconsents (each such consent not to be unreasonably withheld or delayed); (ii)each partial assignment shall be made as an assignment of a proportionate partof all the assigning Lender’s rights and obligations under this Agreement withrespect to the Revolving Credit Loan or the Revolving Credit Commitment or anyother future facilities hereunder assigned except that this clause (ii) shallnot prohibit any Lender from

 

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assigning all or a portion of its rights andobligations among the Revolving Credit Loans on a non-*pro rata* basis; (iii) any assignment of aRevolving Credit Commitment must be approved by the Administrative Agent, theLC Issuer and, so long as no Event of Default has occurred and is continuing,the Borrower Representative (each such approval not to be unreasonably withheldor delayed) unless the Person that is the proposed assignee is itself a Lenderwith a Revolving Credit Commitment (whether or not the proposed assignee wouldotherwise qualify as an Eligible Assignee); and (iv) the parties to eachassignment shall execute and deliver to the Administrative Agent an Assignmentand Assumption, together with a processing and recordation fee of $3,500, andthe Eligible Assignee, if it shall not be a Lender, shall deliver to theAdministrative Agent an administrative questionnaire in form and substancesatisfactory to the Administrative Agent. Subject to acceptance and recording thereof by the Administrative Agentpursuant to 10.3 of this Section, from and after the effective date specifiedin each Assignment and Assumption, the Eligible Assignee thereunder shall be aparty to this Agreement and, to the extent of the interest assigned by such Assignmentand Assumption, have the rights and obligations of a Lender under thisAgreement, and the assigning Lender thereunder shall, to the extent of theinterest assigned by such Assignment and Assumption, be released from itsobligations under this Agreement (and, in the case of an Assignment andAssumption covering all of the assigning Lender’s rights and obligations underthis Agreement, such Lender shall cease to be a party hereto) but shallcontinue to be entitled to the benefits of Section 12 with respect to facts andcircumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with thisparagraph shall be treated for purposes of this Agreement as a sale by suchLender of a participation in such rights and obligations in accordance withSection 10.4.

 

**10.3        Maintenance of Register. ** The Administrative Agent, actingsolely for this purpose as an agent of each Borrower, shall maintain at itsoffice in Cleveland, Ohio, a copy of each Assignment and Assumption deliveredto it and a register for the recordation of the names and addresses of theLenders, and the Revolving Credit Commitments of, and principal amounts of theRevolving Credit Loans owing to, each Lender pursuant to the terms hereof fromtime to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, theAdministrative Agent and the Lenders may treat each Person whose name isrecorded in the Register pursuant to the terms hereof as a Lender hereunder forall purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available forinspection by the Borrowers and any Lender, at any reasonable time and fromtime to time upon reasonable prior notice.

 

**10.4        Participations. **  Any Lender may at any time,without the consent of, or notice to, the Borrowers or the AdministrativeAgent, sell participations to any Person (other than a natural person or anyBorrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)in all or a portion of such Lender’s rights and/or obligations under thisAgreement (including all or a portion of its Revolving Credit Commitment and/orthe Revolving Credit Loans owing to it); provided that (i) suchLender’s obligations under this Agreement shall remain unchanged,(ii) such Lender shall remain solely responsible to the other partieshereto for the performance of such obligations and (iii) the Borrowers,the Administrative Agent and the other Lenders shall continue to deal solelyand directly with such Lender in connection with such Lender’s rights andobligations under this Agreement.  Anyagreement or instrument pursuant to which a Lender sells such a participationshall provide that such Lender shall retain the sole right to enforce thisAgreement and to approve any amendment, modification or waiver of any  provision of this Agreement; providedthat such agreement or instrument may provide that such Lender will not,without the consent of the Participant, agree to any amendment, modification orwaiver described in paragraphs (a) through (h) of Section 13.1 that affectssuch Participant.  Subject to thisSection 10.4, the Borrowers agree that each Participant shall be entitled tothe benefits of Sections 2.14(e) and Sections 12.3 through 12.5 to thesame extent as if it were a Lender and had acquired its interest by assignmentpursuant to Section 10.2, provided such

 

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Participant agrees to be subject toSection 10.8.  To the extentpermitted by Law, each Participant also shall be entitled to the benefits ofSection 7.5 as though it were a Lender, provided such Participant agrees tobe subject to Section 7.9 as though it were a Lender.

 

AParticipant shall not be entitled to receive any greater payment under Sections2.14(e) and 12.3 than the applicable Lender would have been entitled to receivewith respect to the participation sold to such Participant.  A Participant shall not be entitled to thebenefits of Section 12.3(a) unless the Borrower Representative is notifiedof the participation sold to such Participant and such Participant agrees, forthe benefit of the Borrowers, to comply with Section 12.3(b) as though itwere a Lender.

 

**10.5        Pledge of Interests.**  AnyLender may at any time pledge or assign a security interest in all or anyportion of its rights under this Agreement to secure obligations of suchLender, including without limitation any pledge or assignment to secure obligationsto a Federal Reserve Bank; provided that no such pledge or assignmentshall release such Lender from any of its obligations hereunder or substituteany such pledgee or assignee for such Lender as a party hereto.

 

**10.6        Revolving Credit Notes. ** Each Borrower shall execute anddeliver: (i) to the Administrative Agent, the transferor and thetransferee, any consent or release (of all or a portion of the obligations ofthe transferor) to be delivered in connection with the Assignment and Assumption,(ii) if a Lender’s entire interest in its Revolving Credit Commitments andin all of its Revolving Credit Loans have been transferred, to the transfereeappropriate replacement notes against return of the Revolving Credit Notes(each marked “replaced”) held by the transferor and (iii) if only aportion of a Lender’s interest in its Revolving Credit Commitments andRevolving Credit Loans has been transferred, replacement notes to each of thetransferor and the transferee against return of the original such RevolvingCredit Notes of the transferor (each marked “replaced”) held by the transferor;provided, that, simultaneously with such Borrower’s delivery of newRevolving Credit Notes pursuant to this Section 10.6, the transferorLender will deliver to such Borrower any note being replaced in whole or inpart, and each such note delivered by the transferor Lender shall beconspicuously marked “replaced” when so delivered.

 

**10.7        USA Patriot Act.**  Eachassignee and participant that is not incorporated (or formed, as applicable)under the Laws of the United States or a state thereof (and is not exceptedfrom the certification requirement contained in Section 313 of the USAPatriot Act and the applicable regulations because it is both (i) anaffiliate of a depository institution or foreign bank that maintains a physicalpresence in the United States or foreign country, and (ii) subject tosupervision by a banking authority regulating such affiliated depositoryinstitution or foreign bank) shall deliver to the Administrative Agent thecertification, or, if applicable, recertification, certifying that suchassignee or participant is not a “shell” and certifying to other matters asrequired by Section 313 of the USA Patriot Act and the applicableregulations at such times as are required under the USA Patriot Act.

 

**10.8        Replacement of CertainLenders.** If any Lender or LC Issuer requests anycompensation, reimbursement or other payment under any of Sections 2.2(j),2.14(e), 12.1 or 12.2 with respect to such Lender or LC Issuer, or if theBorrowers are required to pay any additional amount to any Lender or LC Issueror governmental authority pursuant to Section 12.3, or if any Lender is a“Defaulting Lender” hereunder, or if any Lender otherwise fails to fund its ProRata Share of Revolving Credit Borrowings or the participation purchase pricepayable by such Lender for its participating interest hereunder as specified inSection 2.2(d) hereof, or if any Lender notifies the Administrative Agent thatit is exercising any right under this Agreement not to fund or maintain a LIBORRate Loan denominated in Dollars which the other Lenders are willing orprepared to fund or maintain, then the Borrowers may, at their soleexpense and effort, upon notice to such Lender or LC Issuer and theAdministrative Agent,

 

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require such Lender or LC Issuer, as the casemay be, to assign and delegate, without recourse (in accordance with therestrictions contained in Section 10.2), all its interests, rights andobligations under this Agreement to an assignee that shall assume suchobligations (which assignee may be another Lender, if a Lender accepts suchassignment); provided that (i) the Borrowers shall have receivedthe prior written consent of the Administrative Agent, which consent shall notbe unreasonably withheld, (ii) such Lender or LC Issuer shall havereceived payment of an amount equal to the outstanding principal of itsRevolving Credit Loans, accrued interest thereon, accrued fees and all otheramounts payable to it hereunder, from the assignee (to the extent of suchoutstanding principal and accrued interest and fees) or the Borrowers (in thecase of all other amounts, including any breakage compensation underSection 12.4 hereof), and (iii) in the case of any such assignmentresulting from a claim for compensation, reimbursement or other paymentsrequired to be made under any of Sections 2.2(j), 2.14(e), 12.1 or 12.2with respect to such Lender or LC Issuer, or resulting from any requiredpayments to any Lender or governmental authority pursuant to Section 12.3,such assignment will result in a reduction in such compensation, reimbursementor payments.  No Lender or LC Issuershall be required to make any such assignment and delegation if, prior thereto,as a result of a waiver by such Lender or LC Issuer or otherwise, thecircumstances entitling the Borrower to require such assignment and delegationcease to apply.

 

**10.9        Replacement ofNon-consenting Lenders. ** If, inconnection with any proposed amendment, waiver or consent hereunder pursuant toSection 13.1 hereof: (i) requiring the consent of all Lenders, the consentof Required Lenders is obtained but the consent of all Lenders whose consent ifrequired is not obtained or (ii) requiring the consent of Required Lenders, theconsent of Lenders holding 51% or more is obtained but the consent of RequiredLenders is not obtained (any Lender withholding consent as described in clause(i) and (ii) hereof being referred to as a “Non-Consenting Lender”), then,so long as the Administrative Agent is not a Non-Consenting Lender, theAdministrative Agent may, at the sole expense of such Borrowers, upon notice tosuch Non-Consenting Lender and the Borrower Representative, require suchNon-Consenting Lender to assign and delegate, without recourse (in accordancewith the restrictions contained in Section 10.2), all of its interests,rights and obligations under this Agreement to an Eligible Assignee that shallassume such obligations (which assignee may be another Lender, if a Lenderaccepts such assignment); provided that such Lender shall have receivedpayment of an amount equal to the outstanding principal of its Revolving CreditLoans, accrued interest thereon, accrued fees and all other amounts payable toit hereunder, from the assignee (to the extent of such outstanding principaland accrued interest and fees) or the Borrowers (in the case of all otheramounts).

 

# **Section 11****                                     ****CONFIDENTIALITY.**

 

TheAdministrative Agent, each Lender and the LC Issuer hereby agree to use allcommercially reasonable efforts to hold all non-public information obtainedpursuant to the requirements of this Agreement in accordance with customaryprocedures for handling confidential information of this nature and in accordancewith safe and sound banking practices for a period of two (2) years followingthe receipt thereof; except that any such confidential information maybe disclosed: (i)  if required by subpoena or similar order of any courtof competent jurisdiction, (ii)  if required to be disclosed to anyregulatory or administrative governmental agency or commission having anyregulatory authority over the Administrative Agent, such Lender or the LCIssuer or its securities, (iii) to any other party to this Agreement,(iv) to any Affiliate of any Lender so long as such Affiliate agrees to bebound by the provisions of this Section 11 prior to the time of suchdisclosure, (v) to any prospective transferee or participant so long assuch Person agrees to be bound by the provisions of this Section 11 prior tothe time of such disclosure, (vi) to any Person if such information shallhave been already publicly disclosed (other than as a result of disclosure bythe Administrative Agent or a Lender or any other Person bound by aconfidentiality agreement with UNOVA, Inc. or any of its

 

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Subsidiaries known to the AdministrativeAgent or any Lender), (vii) in connection with the preparation,negotiation or administration or enforcement of this Agreement or the exerciseof any right or remedy under this Agreement, to the counsel, auditors,professional advisors and consultants, and accountants to the AdministrativeAgent and (viii) if required in connection with any legal proceedingsinstituted by or against the Administrative Agent, such Lender or the LC Issuerwith respect to such respective capacities.

 

# **Section 12****                                     ****INDEMNITIES.**

# ** **

**12.1        Increased Costs. ** If, after the Closing Date ofthis Agreement, (a) the introduction of any Law, rule or regulation or anychange therein, (b) any change in the interpretation or administration ofany Law, rule or regulation by any central bank or other governmental authorityor (b) the compliance by any Lender or the LC Issuer with any guideline,request or directive from any central bank or other governmental authority(whether or not having the force of Law so long as it is being generallyapplied to all of such Lender’s or the LC Issuer’s customers) shall increasethe cost to any Lender or the LC Issuer (other than any increase in the cost ofthe overhead of a Lender or the LC Issuer) of agreeing to make or making,funding or maintaining Revolving Credit Loans to the Borrowers or the cost tothe LC Issuer or any Lender of issuing, maintaining or participating in anyLetter of Credit, then the Borrowers shall from time to time, upon demand bysuch Lender or the LC Issuer (with a copy of such demand to the AdministrativeAgent), pay to the Administrative Agent for the account of such Lender or theLC Issuer additional amounts sufficient to indemnify such Lender and the LCIssuer for such increased cost.

 

**12.2        Risk-Based Capital. ** If any Lender or the LC Issuershall have determined that after the Closing Date, the adoption of anyapplicable Law, rule or regulation regarding capital adequacy, or any changetherein, or any change in the interpretation or administration thereof by anygovernmental authority, central bank or comparable agency charged by Law withthe interpretation or administration thereof, or compliance by such Lender orthe LC Issuer or the parent corporation of any thereof with any request ordirective regarding capital adequacy (whether or not having the force of Law solong as it is being generally applied to all of such Lender’s or the LCIssuer’s customers) of any such authority, central bank, or comparable agency,in each case made subsequent to the Closing Date, has or could have the effectof reducing the rate of return on the capital or assets of such Lender or theLC Issuer or the parent corporation of any thereof as a consequence of thecommitments or obligations of such Lender or the LC Issuer hereunder to a levelbelow that which such Lender or the LC Issuer or the parent corporation of anythereof could have achieved but for such adoption, effectiveness, change orcompliance, then from time to time, within 15 Business Days after demand bysuch Lender or the LC Issuer (with a copy to the Administrative Agent), theBorrowers shall pay to such Lender such additional amount or amounts as willcompensate such Lender or the LC Issuer or the parent corporation of anythereof for such reduction.

 

**12.3        Taxes.**

 

**(a)           Taxes; Withholding; Indemnification of TaxesPaid. ** Allpayments made by the Borrowers under this Agreement and the Revolving CreditNotes shall be made free and clear of, and without deduction or withholding foror on account of, any present or future taxes, levies, imposts, charges,deductions or withholdings, now or hereafter imposed, levied, collected,withheld or assessed by any governmental authority, *excluding* (i) net income taxes or any other taxes imposed onor measured by the net income, or profits or capital, including, withoutlimitation, branch profits tax, of the Lenders or the LC Issuer, as the casemay be, in each case by the jurisdiction under the Laws of which such Person isorganized or any political subdivision thereof or by the jurisdiction in whichthe principal or applicable lending or issuing office of such Person is locatedor any political subdivision thereof and (ii) U.S. withholding

 

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taxes payable with respect to paymentshereunder under Laws (including any treaty, ruling, determination orregulation) in effect on, but not any increase in U.S. withholding taxresulting from any subsequent change in such Laws occurring after, the date theapplicable Lender becomes a party to this Agreement (all such non-excludedtaxes, levies, imposts, charges, deductions and withholdings, the “Non-ExcludedTaxes”).  In addition, the Borrowersagree to pay to the relevant governmental authority in accordance withapplicable Law any current or future stamp or documentary taxes or any otherexcise or property taxes, charges or similar levies that arise from any paymentmade hereunder or from the execution, delivery or registration of, or otherwisewith respect to, this Agreement or any other Loan Document (“OtherTaxes”).  If any Non-Excluded Taxes orOther Taxes are required by Law to be withheld from any amounts payable to theLenders or the LC Issuer hereunder or under the Revolving Credit Notes, theamounts so payable to such Person shall be increased to the extent necessary toyield to such Person a net amount equal to interest or any such other amountsthat would have been paid without such withholdings, at the rates or in theamounts specified in this Agreement and the Revolving Credit Notes.  Whenever any Non-Excluded Taxes or OtherTaxes are payable by the Borrowers, the Borrower Representative shall send tothe Administrative Agent a certified copy of any original official receiptreceived by such Borrower showing payment thereof or, if such receipts are notobtainable, other evidence of such payments by the Borrowers reasonablysatisfactory to the Lenders, the LC Issuer or Administrative Agent, asapplicable.  The Borrowers shallindemnify the Lenders and the LC Issuer for the full amount of Non-ExcludedTaxes and Other Taxes that are paid by such indemnified Person (including penalties,interest and expenses arising therefrom or with respect thereto).  The agreements in this Section 12.3shall survive the termination of this Agreement and the payment of the Notesand all other amounts payable hereunder.

 

**(b)           Delivery of IRS Certificates by Lenders. **

 

**(i)**            EachLender and each LC Issuer that is not a United States person as defined inSection 7701(a)(30) of the Code (each, a “Foreign Lender”) as to which paymentsto be made under this Agreement are fully exempt from or eligible for areduction of United States withholding tax under an applicable statute or taxtreaty shall provide prior to or on the Closing Date to the BorrowerRepresentative and the Administrative Agent a properly completed and executedIRS Form W-8ECI (claiming a complete exemption from United States withholdingtax as effectively connected income) or its successor form and relatedapplicable forms or Form W-8BEN (claiming a reduction in or a completeexemption from United States withholding tax under an applicable treaty) or itssuccessor form and related applicable forms or, in the case of a Foreign Lenderclaiming the benefits of the exemption for portfolio interest under Section881(c) of the Code, (x) a certificate to the effect that such Foreign Lender isnot (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a“10 percent shareholder” of the Borrowers within the meaning of Section881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” describedin Section 881(c)(3)(C) of the Code, and (y) a properly completed and executedIRS Form W-8BEN or its successor form and related applicable forms or otherapplicable form, certificate or document prescribed by the IRS certifying as tosuch Foreign Lender’s entitlement to such exemption (a “Certificate ofExemption”).  Any Person that is not aUnited States person as defined in Section 7701(a)(30) of the Code that seeksto become a Lender or the LC Issuer, as applicable, under this Agreement shallprovide a Certificate of Exemption certifying to such Person’s completeexemption from United States withholding tax to the Borrower Representative andthe Administrative Agent prior to becoming a Lender or the LC Issuer, asapplicable, hereunder.  No Person that isnot a United States person as defined in Section 7701(a)(30) of the Code maybecome a Lender or the LC Issuer, as applicable, hereunder if such Person failsto deliver a Certificate of Exemption as prescribed in this Section in advanceof becoming a Lender or the LC Issuer, as applicable.

 

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**(ii)**           EachLender and each LC Issuer that is a United States person as defined in Section7701(a)(30) of the Code (each, a “U.S. Lender”) shall provide prior to or onthe Closing Date (or on or prior to the date it becomes a party to this Agreement)to the Borrower Representative and the Administrative Agent a properlycompleted and executed IRS Form W-9 (certifying that such U.S. Lender isentitled to an exemption from United States backup withholding tax) or anysuccessor form.  Solely for purposes ofthis Section, a U.S. Lender shall not include a Lender or the LC Issuer thatmay be treated as an exempt recipient based on the indicators described inTreasury Regulation Section 1.6049-4(c)(1)(ii).

 

**(iii)**         EachLender and each LC Issuer, from time to time after submitting the forms,certificates or documents referred to, in this Section, shall submitto the Borrower Representative and the Administrative Agent such additionalduly completed and signed copies of one or more other such forms, certificatesor documents (or such successor forms, certificates or other documents as shallbe adopted from time to time by the IRS or relevant taxing authorities) (A) onor before the date that any such form, certificate or document expires orbecomes obsolete, (B) after the occurrence of any event requiring a change inthe most recent form, certificate or document previously delivered by it to theBorrower Representative and the Administrative Agent, (C) from time to timethereafter if reasonably requested by the Borrower Representative and theAdministrative Agent, and (D) as may be appropriate under then current UnitedStates Law or regulations to avoid United States withholding taxes on paymentsin respect of any amounts to be received by such Lender or such LC Issuer asapplicable, pursuant to this Agreement.

 

**(iv)**          Ifany Lender or the LC Issuer determines that it is unable to submit to theBorrower Representative and the Administrative Agent any form, certificate ordocument that such Lender or the LC Issuer, as the case may be, is requested tosubmit pursuant to this Section, or that it is required to withdraw or cancelany such form, certificate or document, or that any such form, certificate ordocument previously submitted has otherwise become ineffective or inaccuratesuch Lender or the LC Issuer, as the case may be, shall promptly notify theBorrower Representative and the Administrative Agent, as appropriate, of suchfact.

 

**(v)**            Notwithstandingthe rest of this Section 12.3, the Borrowers shall not be requiredpursuant to this Section to pay any additional amount to, or to indemnify theAdministrative Agent, any Lender or any LC Issuer, as the case may be, to theextent that (A) the Administrative Agent, such Lender or such LC Issuer becomessubject to taxes (including Non-Excluded Taxes or Other Taxes) subsequent tothe Closing Date (or, if applicable, subsequent to the date such Person becomesa party to this Agreement) as a result of any change in the circumstances ofthe Administrative Agent, such Lender or the LC Issuer, as the case may be(other than a change in applicable Law), including without limitation a changein the residence, place of incorporation or principal place of business of theAdministrative Agent, such Lender or the LC Issuer or a change in the branch orlending office of the Administrative Agent, such Lender or such LC Issuer, asthe case may be; or (B) such taxes (including Non-Excluded Taxes and OtherTaxes) would not have been incurred but for the failure of the Administrative Agent,such Lender or such LC Issuer, as the case may be, to provide to the BorrowerRepresentative any form, certificate or document that it was required so to dopursuant to this Section other than any form, certificate or document requiredas a result of a change in Law.

 

**(c)           Refunds of Taxes. ** If the Administrative Agent, any Lender or theLC Issuer determines that it has received a refund in respect of anyNon-Excluded Taxes or Other Taxes as to which indemnification has been paid bythe Borrowers pursuant to this Section or

 

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with respect to any Non-Excluded Taxes orOther Taxes that have been deducted and paid to a taxing authority pursuant tothis Section by the Borrowers, it shall promptly remit such refund (includingany interest) to the Borrowers, net of all out-of-pocket expenses of theAdministrative Agent, such Lender or the LC Issuer, as the case may be; provided,however, that the Borrowers, upon the request of the AdministrativeAgent, such Lender or the LC Issuer, as the case may be, agree promptly toreturn such refund (plus any interest) to such party in the event such party isrequired to repay such refund to the relevant taxing authority.  In addition, the Administrative Agent, suchLender or the LC Issuer shall provide the Borrower Representative with a copyof any notice of assessment from the relevant taxing authority (deleting anyconfidential information contained therein).

 

**(d)           Avoiding Negative Tax Consequences. ** Upon the occurrence of any eventgiving rise to the operation of Section 12.3(a) with respect to theAdministrative Agent, any Lender or the LC Issuer, as the case may be, theAdministrative Agent, such Lender and the LC Issuer shall, if requested by theBorrower Representative, use reasonable commercial efforts (subject to theAdministrative Agent, such Lender’s or the LC Issuer’s overall, internalpolicies of general application) to designate another lending office for anyRevolving Credit Loan, Revolving Credit Note or Letter of Credit affected bysuch event with the object of avoiding the consequences of such event, so longas, in the reasonable judgment of the Administrative Agent, such Lender or theLC Issuer, as the case may be, such designation will not cause the AdministrativeAgent, such Lender and its lending office(s) or cause the LC Issuer and itsissuing office(s), to suffer economic, legal or regulatory cost ordisadvantage, and provided, further, that nothing in thisSection 12.3(d) shall affect or postpone any of the obligations of theBorrowers or the rights of the Administrative Agent, such Lender or the LCIssuer pursuant to Section 12.3(a). Each Lender, LC Issuer and the Administrative Agent agrees that it will(i) take all reasonable actions reasonably requested by the Borrowers that arewithout material risk and cost to such Lender, LC Issuer or the AdministrativeAgent and consistent with the internal policies of such Lender, LC Issuer orthe Administrative Agent, as applicable, and applicable legal and regulatoryrestrictions (as the case may be) to maintain all exemptions, if any, availableto it from withholding taxes (whether available by treaty or existingadministrative waiver) and (ii) to the extent reasonable and without materialrisk and cost to it, otherwise cooperate with the Borrowers to minimize anyamounts payable by the Borrowers under this Section 12.3, provided, however,that in each case, any cost relating to such action or cooperation requested bythe Borrowers shall be borne by the Borrowers.

 

**(e)           Tax Benefit.**

 

**(i)**            Ifand to the extent that any Lender, LC Issuer or the Administrative Agent isable, in its sole opinion, to apply or otherwise take advantage of anyoffsetting tax credit or other similar tax benefit arising out of or in conjunctionwith any deduction or withholding which gives rise to an obligation on theBorrowers to pay any Non-Excluded Taxes or Other Taxes pursuant to thisSection 12.3, then such Lender, LC Issuer or the Administrative Agentshall, to the extent that in its sole opinion it can do so without prejudice tothe retention of the amount of such credit or benefit and without any otheradverse tax consequences for such Lender, LC Issuer or the AdministrativeAgent, reimburse to the Borrowers at such time as such tax credit or benefitshall have actually been received by such Lender, LC Issuer or theAdministrative Agent such amount as such Lender, LC Issuer or theAdministrative Agent shall, in its sole opinion, have determined to beattributable to the relevant deduction or withholding and as will leave suchLender, LC Issuer or the Administrative Agent in no better or worse positionthan it would have been in if the payment of such Non-Excluded Taxes or OtherTaxes had not been required.

 

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**(ii)**           Nothingin this Section 12.3 shall oblige any Lender, LC Issuer or the AdministrativeAgent to disclose to the Borrowers or any other person any informationregarding its tax affairs or tax computations or interfere with the right ofany Lender, LC Issuer or the Administrative Agent to arrange its tax affairs inwhatever manner it thinks fit and, in particular, no Lender, LC Issuer or theAdministrative Agent shall be under any obligation to claim relief from itscorporate profits or similar tax liability in credits or deductions availableto it and, if it does claim, the extent, order and manner in which it does soshall be at its absolute discretion.

 

**12.4        Losses. ** If any payment of principal of, or RateConversion or Rate Continuation of, any LIBOR Rate Loan is not paid when due oris made on a day other than on the last day of an Interest Period relating tosuch LIBOR Rate Loan, as a result of a payment or Rate Conversion or RateContinuation or acceleration of the maturity of the Revolving Credit Notes orfor any other reason, the Borrower Representative shall, upon demand by anyLender (with a copy of such demand to the Administrative Agent), pay to theAdministrative Agent for the account of such Lender any amounts required tocompensate such Lender for any additional losses, costs or expenses which itmay reasonably incur as a result of such payment or Rate Conversion or RateContinuation, including, without limitation, any loss, cost or expense (otherthan any expenses directly attributable to loan origination efforts) incurredby reason of the liquidation or reemployment of deposits or other fundsacquired by such Lender to fund or maintain such LIBOR Rate Loan.

 

**12.5        Indemnification forRequests. ** Whenever the Borrower Representative:(a) shall revoke any Credit Request or Rate Conversion/ContinuationRequest involving any LIBOR Rate Loan, (b) shall for any other reason failto borrow pursuant to any such Credit Request or Rate Conversion/ContinuationRequest or otherwise comply therewith, (c) shall fail to fulfill, on orbefore the date specified in any such request, the applicable conditions setforth in Section 3 of this Agreement or (d) shall fail to honor anyprepayment notice with respect to LIBOR Rate Loans, then, in each case on anyLender’s demand, the Borrowers shall indemnify each Lender and theAdministrative Agent against any loss, cost or expense reasonably incurred bysuch Lender as a result of any such failure by the Borrowers, including,without limitation, any loss, cost or expense incurred by reason of theliquidation or reemployment of deposits or other funds acquired by such Lenderor the Administrative Agent to fund the LIBOR Rate Loan to be made by suchLender or the Administrative Agent in connection with such request when suchLIBOR Rate Loan, as a direct result of such failure by the Borrowers, is notmade on such date.

 

**12.6        General Indemnity. ** The Borrowers shall indemnifyand hold harmless the Administrative Agent, each Lender, the LC Issuer andtheir respective Affiliates, and each such Person’s respective directors,officers, employees, attorneys, agents and representatives (each an“Indemnified Person”) from and against any and all liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses anddisbursements of any kind or nature whatsoever, including, without limitation,reasonable fees and disbursements of counsel and settlements costs, which maybe imposed on, incurred by, or asserted against any such Indemnified Person inconnection with any investigative, administrative or judicial proceeding by athird party (whether the Indemnified Person is or is not designated as a partythereto) directly or indirectly relating to or arising out of: (x) thisAgreement or any other Loan Document, (y) the transactions contemplatedthereby or any actual or proposed use of proceeds hereunder, or (z) anyEnvironmental Claims against any Borrower or any Subsidiary thereof or anyEnvironmental Claims against any Indemnified Person pursuant to thetransactions contemplated hereby or the exercise of any remedies hereunder; exceptthat no Indemnified Person shall have the right to be indemnified hereunder forits own gross negligence, willful misconduct or bad faith as determined by acourt of competent jurisdiction.

 

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**12.7        Certificate forIndemnification. ** Eachdemand by the Administrative Agent, a Lender or the LC Issuer to the Borrowersfor payment pursuant to this Section 12 shall be accompanied by a certificatesetting forth the reason in reasonable detail for the payment, the amount to bepaid, and the computations and assumptions in determining the amount, whichcertificate shall, absent manifest error, be presumed to be correct.  In determining the amount of any such paymentthereunder, the Administrative Agent, each Lender and the LC Issuer may usereasonable averaging and attribution methods, so long as such methods are setforth in reasonable detail in the certificate referred to in the precedingsentence.  The failure to give any suchnotice shall not release or diminish any of the Borrowers’ obligations to payadditional amounts pursuant to this Section 12 upon the subsequent receipt ofsuch notice.

 

# **Section 13****                                     ****GENERAL.**

 

**13.1        Amendments and Waivers. ** No amendment or waiver of anyprovision of this Agreement or the Revolving Credit Notes or any other LoanDocument, nor consent to any departure by any Borrower therefrom, shall in anyevent be effective unless the same shall be in writing and signed by theRequired Lenders, the Administrative Agent and the Borrowers, and the LC Issuerto the extent the consent of the LC Issuer shall be required with respect toany amendment, waiver, or consent, with respect to Section 2.2 or anyother provision the amendment or waiver of which would adversely affect the LCIssuer, provided, however that: (X) unanimous consent of all ofthe Lenders shall be required with respect to (a) the extension ofmaturity of any Revolving Credit Note, or the extension of the payment date forinterest, principal and/or fees thereunder (other than a rescission of anacceleration hereunder), or (b) any reduction in fees hereunder or therate of interest on any Revolving Credit Note (other than the waiver of DefaultInterest imposed under Section 2.11(c)), or in any amount of principal orinterest due on any Revolving Credit Note, or any modification of the mannerof, or pro rata basis of, application of any payments made by the Borrowers tothe Lenders hereunder or Revolving Credit Commitment reductions pursuant toSection 2.9 hereof, or (c) any change in the definitions “Collateral” or“Required Lenders”, any change which makes less restrictive any componentcomprising “Asset Coverage” or results in an increase in the availability ofcredit, or any increase in the percentage advance rates with respect to AssetCoverage, or (d)  any change in any percentage voting requirements in thisAgreement, or (e) except as otherwise permitted herein, the release in oneor more actions of all or substantially all of the Collateral or thesubordination of the Liens created in favor of the Administrative Agent withrespect to all or substantially all of the Collateral or (e) except inconnection with a sale thereof permitted under Section 5.3(a), the release ofany Borrower Guarantor or any Subsidiary Guarantor, or (f) any changein  Section 7.9 (or the definition of“Advantage”), Section 8, Sections 10.2, 10.4, or 10.5 or this Section 13.1itself and (Y) consent of each Lender affected shall be required with respectto: (i) any increase in the amount of such Lender’s Revolving CreditCommitment or Pro Rata Share or (ii) any extension of such Lender’s RevolvingCredit Commitment.  Each Lender, the LCIssuer and any other current of future holder of a Revolving Credit Note hereundershall be bound by any amendment, waiver or consent obtained as authorized bythis Section, regardless of its failure to agree thereto.  Any amendment, waiver, discharge, terminationor consent pursuant to this Section shall be effective only in the specificinstance and for the specific purpose for which it was given.  Notwithstanding the foregoing, theAdministrative Agent may without the consent of the Lenders (i) release lienson assets the sale or other disposition of which is not prohibited under thisAgreement and (ii) release Liens on the stock or other ownership interests withrespect to Subsidiaries the restructuring, merger, or consolidation of which isnot prohibited under this Agreement provided appropriate replacement Liens onthe stock or other ownership interests which are received with respect toentities resulting from any such restructuring, merger, or consolidation.

 

**13.2        Effective Agreement;Binding Effect. ** ThisAgreement shall become effective on the date and as of the time on and as ofwhich each Borrower, the Administrative Agent, each

 

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Lender and the LC Issuer shall have signed acopy hereof (whether the same or different copies) and shall have delivered thesame to the Administrative Agent at the address specified inSection 13.9.  As of such time, thisAgreement shall be binding upon and inure to the benefit of the Borrowers, theAdministrative Agent, each Lender and the LC Issuer, and their respectivesuccessors and assigns, except that the Borrowers shall have no right to assigntheir rights hereunder or any interest herein except as set forth in Section10.1 of this Agreement.

 

**13.3        Costs and Expenses. ** The Borrowers agree to pay ondemand (a) all reasonable costs and expenses of the Administrative Agent(including, without limitation, the reasonable fees and out-of-pocket expensesof counsel or other advisors for the Administrative Agent and includinginternal counsel) in connection with the negotiation, preparation, execution,delivery, administration, modification, amendment, forbearance and waiver ofthis Agreement or the other Loan Documents, and (b) during the pendency of anEvent of Default, the Administrative Agent, the Lenders and the LC Issuer(including the reasonable fees and out-of-pocket expenses of counsel or otheradvisors in connection with (i) any workout or restructuring of the RevolvingCredit Loans or (ii) the enforcement of, the exercise of remedies under, or thepreservation of rights and remedies under this Agreement or any of the other LoanDocuments (including any collection, bankruptcy or other enforcementproceedings arising with respect to the Borrowers, this Agreement, or any Eventof Default under this Agreement), provided, however, that withrespect to clause (b) above, Lenders who are not acting in the capacity as theAdministrative Agent or the LC Issuer shall be entitled to reimbursement for nomore than one counsel representing all such Lenders (absent a conflict ofinterest in which case the Lenders may engage and be reimbursed for additionalcounsel).

 

**13.4        Survival of Provisions. ** All representations andwarranties made in or pursuant to this Agreement shall survive the executionand delivery of this Agreement and of the Revolving Credit Notes until paymentof the Obligations and termination of the Revolving Credit Commitmentshereunder.  The provisions of Section 11and Section 12 of this Agreement shall survive the payment of the Obligationsand any other Indebtedness owed by the Borrowers hereunder and the terminationof this Agreement (whether by acceleration or otherwise).

 

**13.5        Sharing of Information. ** Subject to the provisions ofSection 11, the Administrative Agent, each Lender and the LC Issuer shall havethe right to furnish to its Affiliates, its accountants, its employees, itsofficers, its directors, its legal counsel, potential participants, and to anygovernmental agency having jurisdiction over the Administrative Agent, suchLender and the LC Issuer information concerning the business, financialcondition, and property of the Borrowers, the amount of the Revolving CreditLoans of the Borrowers hereunder, and the terms, conditions and otherprovisions applicable to the respective parts thereof.

 

**13.6        Interest Rate Limitation. ** Notwithstanding anything hereinto the contrary, if at any time the applicable interest rate, together with allfees and charges that are treated as interest under applicable Law as providedfor herein or in any other document executed in connection herewith, orotherwise contracted for, charged, taken, received or reserved by any Lender orthe LC Issuer exceeds the maximum lawful rate that may be contracted for,charged, taken, received or reserved by such Lender in accordance withapplicable Law (the “Maximum Lawful Rate”), then so long as the Maximum LawfulRate would be so exceeded, the rate of interest and all such charges payable,contracted for, charged, taken, received or reserved in respect of theRevolving Credit Loans of the Lenders or the LC Issuer to the Borrowers shallbe equal to the Maximum Lawful Rate.  Anyamount paid by the Borrower above the Maximum Lawful Rate shall becredited  to principal or returned to theBorrowers.

 

**13.7        Limitation of Liability. ** To the extent permitted byapplicable Law, no claim may be made by any parties hereto against theAdministrative Agent, any Lender or the LC

 

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Issuer or the Affiliates, directors,officers, employees, agents, attorneys and consultants of any of them, for anyspecial, indirect, consequential or punitive damages in respect of any claimfor breach of contract or any other theory of liability arising out of orrelated to the transactions contemplated by this Agreement, or any act,omission or event occurring in connection therewith.  Each of the parties hereto hereby waive,release and agree not to sue upon any claim for any such damages, whether ornot accrued and whether or not known or suspected to exist in its favor.

 

**13.8        Illegality. ** If any provision in thisAgreement or any other Loan Document shall for any reason be or become illegal,void or unenforceable, that illegality, voidness or unenforceability shall notaffect any other provision.

 

**13.9        Notices. ** All notices, requests, demands and othercommunications provided for hereunder shall be in writing and shall be givensolely: (a) by hand delivery or by overnight courier delivery service,with all charges paid, (b) by facsimile transmission, if confirmed sameday in writing by first class mail, (c) by registered or certified mail,postage prepaid and addressed to the parties, (d) electronic mail (to theextent permitted for loan requests above), or (e) as otherwise provided in thisAgreement.  For the purposes of thisAgreement, such notices shall be deemed to be given and received: (i) ifby hand or by overnight courier service, upon actual receipt, (ii) if byfacsimile transmission, upon receipt of machine-generated confirmation of suchtransmission (and provided the above-stated written confirmation is sent),(iii) if by registered or certified mail, upon the first to occur ofactual receipt or the expiration of 72 hours after deposit with the U.S. PostalService, or (iv) if by electronic mail, when transmitted to an electronic emailaddress (or by another means of electronic delivery); provided, however,that notices from the Borrower Representative to the Administrative Agent, anyLender or the LC Issuer shall not be effective until actually receivedthereby.  Notices or other communicationshereunder shall be addressed: if to the Borrower Representative, at the addressspecified on the signature pages of this Agreement with respect to the BorrowerRepresentative; if to the Administrative Agent, to the Notice Office of theAdministrative Agent; if to a Lender, to the Notice Office of such Lender; andif to the LC Issuer, to the Notice Office of such LC Issuer.

 

**13.10      Governing Law. ** This Agreement and the otherLoan Documents (including the Administrative Agent Fee Letter) and therespective rights and obligations of the parties hereto shall be governed byand construed in accordance with the internal Laws of the State of New York(without giving effect to the conflict of laws rules thereof and except to theextent perfection of the Administrative Agent’s security interests and Liensand the effect thereof are otherwise governed pursuant to the UCC or theapplicable Law of any foreign jurisdiction).

 

**13.11      Entire Agreement. ** This Agreement and the otherLoan Documents referred to in or otherwise contemplated by this Agreement setforth the entire agreement of the parties as to the transactions contemplatedby this Agreement.

 

**13.12      Execution in Counterparts;Execution by Facsimile. ** ThisAgreement may be executed in any number of counterparts and by differentparties hereto in separate counterparts, each of which when so executed shallbe deemed to be an original and all of which taken together shall constitutebut one and the same agreement.  Deliveryof an executed counterpart hereof by facsimile shall be effective as manualdelivery of such counterpart; provided, however, that, each partyhereto will promptly thereafter deliver counterpart originals of suchcounterpart facsimiles delivered by or on behalf of such party.

 

**13.13      Waiver of Jury Trialand Submission to Non-Exclusive Jurisdiction. ** EACH OF THE PARTIES HERETO WAIVEANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDINGIN CONTRACT, TORT OR OTHERWISE, AMONG THE PARTIES OR ANY THEREOF, ARISING OUTOF, IN

 

91

----

 

CONNECTION WITH, RELATED TO, OR INCIDENTAL TOTHE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, THENOTES OR ANY OTHER LOAN DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITHOR THE TRANSACTIONS RELATED THERETO.

 

EACHOF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FORITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY OHIO STATECOURT OR FEDERAL COURT OF THE UNITED STATES SITTING IN CUYAHOGA COUNTY, OHIO,AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISINGOUT OF OR RELATING TO THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY OTHERLOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OFTHE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALLCLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINEDIN ANY SUCH OHIO STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERALCOURT.  EACH OF THE PARTIES HERETO AGREESTHAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE ANDMAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHERMANNER PROVIDED BY LAW.  NOTHING IN THISAGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANYACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE REVOLVING CREDIT NOTES ORANY OTHER LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION.

 

EACHOF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THEFULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAYNOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDINGARISING OUT OF OR RELATING TO THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANYOTHER LOAN DOCUMENT IN ANY OHIO STATE OR FEDERAL COURT SITTING IN OHIO. EACH OFTHE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THEDEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION ORPROCEEDING IN ANY SUCH COURT.  THEPARTIES CONFIRM THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.

 

[remainder of page intentionally left blank]

 

92

----

 

**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed by theirrespective officers or agents thereunto duly authorized, as of the date firstabove written.

 
|   | **BORROWERS**                            |
|--------|------------------------------------------|
|   |                                     |
|   | **UNOVA, INC.**                          |
|   |                                     |
|   |                                     |
|   |                                     | /s/ Michael  E. Keane |   |
|   | By:                                      | Michael  E. Keane |   |
|   | Its:                                     | Senior  Vice President and CFO |   |
|   |                                     |
|   |                                     |
|   |                                     | /s/  Kenneth L. Cohen |   |
|   | By:                                      | Kenneth  L. Cohen |   |
|   | Its:                                     | Vice  President and Treasurer |   |
|   |                                     |
|   |                                     |
|   | Notice  Office:                          |
|   |                                     |
|   | UNOVA,  Inc., as Borrower Representative |
|   | 6001  36th Avenue West                   |
|   | Everett,  WA 98203                       |
|   | Attention:  Treasurer                    |
|   | Telecopy:  425-265-2497                  |
|   | Email:  kcohen@unova.com                 |
|   |                                     |
|   | With  a copy to:                         |
|   | Latham  & Watkins, LLP               |
|   | 633  West Fifth Street, Suite 4000       |
|   | Los  Angeles, CA 90071-2007              |
|   | Attention:  Dominic Yoong                |
|   | Telecopy:  213-891-8763                  |
|   | Email:  dominic.yoong@lw.com             |

 

S-1

----

 
|   | **UNOVA INDUSTRIAL AUTOMATION  SYSTEMS, INC.** |
|--------|------------------------------------------------|
|   |                                           |   |   |
|   |                                           |   |   |
|   |                                           | /s/  Michael E. Keane |   |
|   | By:                                            | Michael  E. Keane |   |
|   | Its:                                           | Vice  President |   |
|   |                                           |   |
|   |                                           |   |
|   |                                           | /s/  Kenneth L. Cohen |   |
|   | By:                                            | Kenneth  L. Cohen |   |
|   | Its:                                           | Vice  President and Treasurer |   |
|   |                                           |   |
|   |                                           |   |
|   | Notice  Office:                                |   |
|   |                                           |   |
|   | UNOVA,  Inc., as Borrower Representative       |   |
|   | 6001  36th Avenue West                         |   |
|   | Everett,  WA 98203                             |   |
|   | Attention:  Treasurer                          |   |
|   | Telecopy:  425-265-2497                        |   |
|   | Email:  kcohen@unova.com                       |   |
|   |                                           |   |
|   | With  a copy to:                               |   |
|   | Latham  & Watkins, LLP                     |   |
|   | 633  West Fifth Street, Suite 4000             |   |
|   | Los  Angeles, CA 90071-2007                    |   |
|   | Attention:  Dominic Yoong                      |   |
|   | Telecopy:  213-891-8763                        |   |
|   | Email: dominic.yoong@lw.com                    |   |

 

S-2

----

 
|   | **INTERMEC TECHNOLOGIES  CORPORATION**   |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   |                                     | /s/  Michael E. Keane |   |
|   | By:                                      | Michael  E. Keane |
|   | Its:                                     | Vice  President |
|   |                                     |
|   |                                     |
|   |                                     | /s/  Kenneth L. Cohen |   |
|   | By:                                      | Kenneth  L. Cohen |
|   | Its:                                     | Vice  President and Treasurer |
|   |                                     |
|   |                                     |
|   | Notice  Office:                          |
|   |                                     |
|   | UNOVA,  Inc., as Borrower Representative |
|   | 6001  36th Avenue West                   |
|   | Everett,  WA 98203                       |
|   | Attention:  Treasurer                    |
|   | Telecopy:  425-265-2497                  |
|   | Email:  kcohen@unova.com                 |
|   |                                     |
|   | With  a copy to:                         |
|   | Latham  & Watkins, LLP               |
|   | 633  West Fifth Street, Suite 4000       |
|   | Los  Angeles, CA 90071-2007              |
|   | Attention:  Dominic Yoong                |
|   | Telecopy:  213-891-8763                  |
|   | Email:  dominic.yoong@lw.com             |

 

S-3

----

 
|   | **INTERMEC TECHNOLOGIES  MANUFACTURING, LLC** |
|--------|-----------------------------------------------|
|   |                                          |
|   |                                          |
|   |                                          | /s/  Michael E. Keane |   |
|   | By:                                           | Michael  E. Keane |   |
|   | Its:                                          | Vice  President |   |
|   |                                          |
|   |                                          |
|   |                                          | /s/  Kenneth L. Cohen |   |
|   | By:                                           | Kenneth  L. Cohen |   |
|   | Its:                                          | Vice  President and Treasurer |   |
|   |                                          |
|   |                                          |
|   | Notice  Office:                               |
|   |                                          |
|   | UNOVA,  Inc., as Borrower Representative      |
|   | 6001  36th Avenue West                        |
|   | Everett,  WA 98203                            |
|   | Attention:  Treasurer                         |
|   | Telecopy:  425-265-2497                       |
|   | Email:  kcohen@unova.com                      |
|   |                                          |
|   | With  a copy to:                              |
|   | Latham  & Watkins, LLP                    |
|   | 633  West Fifth Street, Suite 4000            |
|   | Los  Angeles, CA 90071-2007                   |
|   | Attention:  Dominic Yoong                     |
|   | Telecopy:  213-891-8763                       |
|   | Email:  dominic.yoong@lw.com                  |

 

S-4

----

 
|   | **INTERMEC IP CORP.**                    |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   |                                     | /s/  Michael E. Keane |   |
|   | By:                                      | Michael  E. Keane |   |
|   | Its:                                     | Vice  President |   |
|   |                                     |
|   |                                     |
|   |                                     | /s/  Kenneth L. Cohen |   |
|   | By:                                      | Kenneth  L. Cohen |   |
|   | Its:                                     | Vice  President and Treasurer |   |
|   |                                     |
|   |                                     |
|   | Notice  Office:                          |
|   |                                     |
|   | UNOVA,  Inc., as Borrower Representative |
|   | 6001  36th Avenue West                   |
|   | Everett,  WA 98203                       |
|   | Attention:  Treasurer                    |
|   | Telecopy:  425-265-2497                  |
|   | Email:  kcohen@unova.com                 |
|   |                                     |
|   | With  a copy to:                         |
|   | Latham  & Watkins, LLP               |
|   | 633  West Fifth Street, Suite 4000       |
|   | Los  Angeles, CA 90071-2007              |
|   | Attention:  Dominic Yoong                |
|   | Telecopy:  213-891-8763                  |
|   | Email:  dominic.yoong@lw.com             |

 

S-5

----

 
|   | **UNOVA IP CORP.**                       |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   |                                     | /s/  Michael E. Keane |   |
|   | By:                                      | Michael  E. Keane |   |
|   | Its:                                     | Vice  President |   |
|   |                                     |
|   |                                     |
|   |                                     | /s/  Kenneth L. Cohen |   |
|   | By:                                      | Kenneth  L. Cohen |   |
|   | Its:                                     | Vice  President and Treasurer |   |
|   |                                     |
|   |                                     |
|   | Notice  Office:                          |
|   |                                     |
|   | UNOVA,  Inc., as Borrower Representative |
|   | 6001  36th Avenue West                   |
|   | Everett,  WA 98203                       |
|   | Attention:  Treasurer                    |
|   | Telecopy:  425-265-2497                  |
|   | Email:  kcohen@unova.com                 |
|   |                                     |
|   | With  a copy to:                         |
|   | Latham  & Watkins, LLP               |
|   | 633  West Fifth Street, Suite 4000       |
|   | Los  Angeles, CA 90071-2007              |
|   | Attention:  Dominic Yoong                |
|   | Telecopy:  213-891-8763                  |
|   | Email:  dominic.yoong@lw.com             |
|        |                                          |  |  |  |

 

S-6

----

 
|   | **INTERMEC INTERNATIONAL INC.**          |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   |                                     | /s/  Michael E. Keane |   |
|   | By:                                      | Michael  E. Keane |   |
|   | Its:                                     | Vice  President |   |
|   |                                     |
|   |                                     |
|   |                                     | /s/  Kenneth L. Cohen |   |
|   | By:                                      | Kenneth  L. Cohen |   |
|   | Its:                                     | Vice  President and Treasurer |   |
|   |                                     |
|   |                                     |
|   | Notice  Office:                          |
|   |                                     |
|   | UNOVA,  Inc., as Borrower Representative |
|   | 6001  36th Avenue West                   |
|   | Everett,  WA 98203                       |
|   | Attention:  Treasurer                    |
|   | Telecopy:  425-265-2497                  |
|   | Email:  kcohen@unova.com                 |
|   |                                     |
|   | With  a copy to:                         |
|   | Latham  & Watkins, LLP               |
|   | 633  West Fifth Street, Suite 4000       |
|   | Los  Angeles, CA 90071-2007              |
|   | Attention:  Dominic Yoong                |
|   | Telecopy:  213-891-8763                  |
|   | Email:  dominic.yoong@lw.com             |

 

S-7

----

 
|   | **ADMINISTRATIVE AGENT**          |
|--------|-----------------------------------|
|   |                              |
|   | **KEYBANK NATIONAL ASSOCIATION,** |
|   | as  Administrative Agent          |
|   |                              |
|   |                              |
|   |                              |  /s/  Marianne T. Meil |   |
|   | By:                               |  Marianne  T. Meil |   |
|   | Its:                              |  Vice  President |   |
|   |                              |
|   | Notice  Office:                   |
|   |                              |
|   | KeyBank  National Association     |
|   | 127  Public Square                |
|   | Cleveland,  Ohio 44114            |
|   | Attention:  Marianne Meil         |
|   | Telecopy:  216-689-3549           |
|   | Email:  Marianne_Meil@KeyBank.com |
|   |                              |
|   | Payment  Office:                  |
|   |                              |
|   | KeyBank  National Association     |
|   | 127  Public Square                |
|   | Cleveland,  Ohio 44114            |
|   | Attention: Marianne Meil          |
|   | Telecopy: 216- 689-3549           |
|   | Email: Marianne_Meil@KeyBank.com  |

 

S-8

----

 
|   | **LENDERS**                       |
|--------|-----------------------------------|
|   |                              |
|   | **KEYBANK NATIONAL ASSOCIATION,** |
|   | as  a Lender                      |
|   |                              |
|   |                              |
|   |                              |  /s/  Marianne T. Meil |   |
|   | By:                               |  Marianne  T. Meil |   |
|   | Its:                              |  Vice  President |   |
|   |                              |
|   |                              |
|   | Notice  Office:                   |
|   |                              |
|   | KeyBank  National Association     |
|   | 127  Public Square                |
|   | Cleveland,  Ohio 44114            |
|   | Attention:  Marianne Meil         |
|   | Telecopy:  216- 689-3549          |
|   | Email:  Marianne_Meil@KeyBank.com |
|   |                              |
|   |                              |
|   | Lending  Office:                  |
|   |                              |
|   | KeyBank  National Association     |
|   | 127  Public Square                |
|   | Cleveland,  Ohio 44114            |
|   | Attention: Marianne Meil          |
|   | Telecopy: 216-689-3549            |
|   | Email: Marianne_Meil@KeyBank.com  |

 

S-9

----

 
|   | **BARCLAYS  BANK PLC,**  as a Lender                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                           |
|   |                                                                                                                                                           | /s/  V Muldoon |   |
|   | By:                                                                                                                                                            | V  Muldoon |   |
|   | Its:                                                                                                                                                           | Director |   |
|   |                                                                                                                                                           |
|   | Notice  Office:                                                                                                                                                |
|   |                                                                                                                                                           |
|   | Barclays  Bank PLC  54 Lombard Street  London EC3P 3AH  Attention: John Davey  Telecopy: 00 44 (0) 870 242 2762  Email: john.davey@barclays.co.uk              |
|   |                                                                                                                                                           |
|   | Lending  Office:                                                                                                                                               |
|   |                                                                                                                                                           |
|   | Barclays  Bank PLC  222 Broadway  New York 10038  Attention: Shoshana Harrison  Telecopy: 212-412-5306  Email: shoshana.harrison@barclayscapital.com           |
|   |                                                                                                                                                           |
|   | With  a copy to:  10 The South Colonnade  Canary Warf, London  Attention: Graham Smart  Telecopy: 44 (0) 207 773 6807  Email: graham.smart@barclayscapital.com |

 

S-10

----

 
|   | **SILICON VALLEY BANK,**as a Lender                                                                                                      |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                     |
|   |                                                                                                                                     | /s/  Uma Vanmane |   |
|   | By:                                                                                                                                      | Uma  Vanmane |   |
|   | Its:                                                                                                                                     | Vice  President |   |
|   |                                                                                                                                     |
|   | Notice  Office:                                                                                                                          |
|   |                                                                                                                                     |
|   | Silicon  Valley Bank  4700 Carillon Point  Kirkland, WA 09033  Attention: Uma Vanmane  Telecopy: 312-704-1532  Email:uvanmane@svbank.com |
|   |                                                                                                                                     |
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |
|   | Lending  Office:                                                                                                                         |
|   |                                                                                                                                     |
|   | Silicon  Valley Bank  3003 Tasman Drive  Santa Clara, CA 95054                                                                           |
|   | Attention:                                                                                                                               |   |   |
|   | Telecopy:  408-654-6232                                                                                                                  |
|   | Email:                                                                                                                                   |   |   |
|        |                                                                                                                                          |  |  |  |  |  |

 

S-11

----

 
|   | **U.S. BANK NATIONAL ASSOCIATION,**as a Lender                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                          |
|   |                                                                                                                                                                          | /s/  James R. Farmer |   |
|   | By:                                                                                                                                                                           | James  R. Farmer |   |
|   | Its:                                                                                                                                                                          | Vice  President |   |
|   |                                                                                                                                                                          |   |
|   |                                                                                                                                                                          |   |
|   | Notice  Office:                                                                                                                                                               |
|   |                                                                                                                                                                          |
|   | U.S.  Bank National Association  1420 Fifth Avenue 10th Floor PD-WA-T10M  Seattle, WA 98101  Attention: James Farmer  Telecopy: 206-344-3654  Email: james.farmer1@usbank.com |
|   |                                                                                                                                                                          |
|   | Lending  Office:                                                                                                                                                              |
|   |                                                                                                                                                                          |
|   | U.S.  Bank National Association  1420 Fifth Avenue 10th Floor PD-WA-T10C  Seattle, WA 98101  Attention: Gail Fortun  Telecopy: 206-344-3741  Email: gail.fortun@usbank.com    |

 

S-12

----

 
|   | **THE CIT GROUP/BUSINESS CREDIT, INC.,**as a Lender                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                         |
|   |                                                                                                                                                                         |
|   |                                                                                                                                                                         | /s/  Donald Caskey |   |
|   | By:                                                                                                                                                                          | Donald  Caskey |   |
|   | Its:                                                                                                                                                                         | Vice  President |   |
|   |                                                                                                                                                                         |
|   | Notice  Office:                                                                                                                                                              |
|   |                                                                                                                                                                         |
|   | The  CIT Group/Business Credit, Inc.  300 South Grand Avenue, 3rd Floor  Los Angeles, CA 90071  Attention: Donald Caskey  Telecopy: 213-613-2501  Email: don.caskey@cit.com  |
|   |                                                                                                                                                                         |
|   | Lending  Office:                                                                                                                                                             |
|   |                                                                                                                                                                         |
|   | The  CIT Group/Business Credit, Inc.  300 South Grand Avenue, 3rd Floor  Los Angeles, CA 90071  Attention: Arda Mendoza  Telecopy: 213-613-2519  Email: arda.mendoza@cit.com |

 

S-13

----

 
|   | **HARRIS TRUST AND SAVINGS BANK,**as a Lender                                                                                                                             |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                      |
|   |                                                                                                                                                                      | /s/  Michael M. Fordney |   |
|   | By:                                                                                                                                                                       | Michael  M. Fordney |   |
|   | Its:                                                                                                                                                                      | Vice  President |   |
|   |                                                                                                                                                                      |
|   | Notice  Office:                                                                                                                                                           |
|   |                                                                                                                                                                      |
|   | Harris  Trust and Savings Bank  111 West Monroe Street  Chicago, IL 60603  Attention: Michael M. Fordney  Telecopy: 312-461-2591  Email:michael.fordney@harrisnesbitt.com |
|   |                                                                                                                                                                      |
|   |                                                                                                                                                                      |   |
|   |                                                                                                                                                                      |
|   | Lending  Office:                                                                                                                                                          |
|   |                                                                                                                                                                      |
|   | Harris  Trust and Savings Bank  111 West Monroe Street  Chicago, IL 60603  Attention: Blanca Velez  Telecopy: 312-293-5884  Email:blanca.velez@harrisbank.com             |
|        |                                                                                                                                                                           |  |  |  |

 

S-14

----

** **
|   | **GENERAL ELECTRIC CAPITAL  CORPORATION**as a Lender                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                     |
|   |                                                                                                                                                                                     | /s/  Keith Alexander |   |
|   | By:                                                                                                                                                                                      | Keith  Alexander |   |
|   | Its:                                                                                                                                                                                     | Vice  President |   |
|   |                                                                                                                                                                                     |
|   | Notice  Office:                                                                                                                                                                          |
|   |                                                                                                                                                                                     |
|   | General  Electric Capital Corporation  350 South Beverly Drive, Suite 200  Beverly Hills, CA 90212  Attention: Keith J. Alexander  Telecopy: 310-785-0644  Email: Keith.Alexander@ge.com |
|   |                                                                                                                                                                                     |
|   | Lending  Office:                                                                                                                                                                         |
|   |                                                                                                                                                                                     |
|   | General  Electric Capital Corporation  500 West Monroe Street  Chicago, IL 60661  Attention: Patricia Coughlin  Telecopy: (312) 463-3854  Email: Patri.Coughlin@ge.com                   |

 

S-15

----

** **
|   | **WELLS FARGO BANK, N.A**as a Lender                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                      |
|   |                                                                                                                                                                                      | /s/  Scott Rhodes |   |
|   | By:                                                                                                                                                                                       | Scott  Rhodes, VP |   |
|   | Its:                                                                                                                                                                                      | Wells  Fargo Bank, N.A. |   |
|   |                                                                                                                                                                                      |
|   |                                                                                                                                                                                      |
|   | Notice  Office:                                                                                                                                                                           |
|   |                                                                                                                                                                                      |
|   | Wells  Fargo Bank, N.A  205 108th Avenue NE Suite 600  Bellevue, WA 98004  Attention: Brent Grecian, Vice President  Telecopy: 425-450-8069  Email: greciabr@wellsfargo.com               |
|   |                                                                                                                                                                                      |
|   | Lending  Office:                                                                                                                                                                          |
|   |                                                                                                                                                                                      |
|   | Wells  Fargo Bank, N.A  1700 Lincoln Street Suite 300  Denver, CO 80203-4500  Attention: Patricia DelReal Flores  Telecopy: 303-863-2729  Email: Patricia.D.DelReal-Flores@wellsfargo.com |

 

S-16

----

 
|   | **LC ISSUER:**                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ** **                                                                                                                                                  |
|   | **KEYBANK NATIONAL ASSOCIATION,**as LC ISSUER                                                                                                               |
|   |                                                                                                                                                        |
|   |                                                                                                                                                        | /s/  Marianne T. Meil |   |
|   | By:                                                                                                                                                         | Marianne  T. Meil |   |
|   | Its:                                                                                                                                                        | Vice  President |   |
|   |                                                                                                                                                        |
|   | Notice  Office:                                                                                                                                             |
|   |                                                                                                                                                        |
|   | KeyBank  National Association  127 Public Square  Cleveland, Ohio 44114  Attention: Marianne Meil  Telecopy: 216-689-3549  Email: Marianne_Meil@KeyBank.com |
|   |                                                                                                                                                        |
|   | Lending  Office:                                                                                                                                            |
|   |                                                                                                                                                        |
|   | KeyBank  National Association  127 Public Square  Cleveland, Ohio 44114  Attention: Marianne Meil  Telecopy: 216-689-3549  Email: Marianne_Meil@KeyBank.com |

 

S-17

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