**Exhibit 4.2**

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**SECURITY AGREEMENT—BORROWERS**

 

**SECURITY AGREEMENT,** dated as of September 30, 2004 (this “Agreement”),among each of **UNOVA, INC.**, a Delawarecorporation, **UNOVA INDUSTRIAL AUTOMATION SYSTEMS, INC.**,a Delaware corporation, **INTERMEC TECHNOLOGIES CORPORATION**,a Washington corporation, **INTERMEC INTERNATIONALINC.**, a Washington corporation, **INTERMEC TECHNOLOGIES MANUFACTURING, LLC**,a Washington limited liability company, **INTERMEC IP CORP.**,a Delaware corporation and **UNOVA IP CORP.**,a Delaware corporation (together, the “Borrowers”), and **KEYBANK NATIONAL ASSOCIATION**(“KeyBank”), asAdministrative Agent (the “Administrative Agent”) for the benefit of theSecured Parties (each as defined below).

 

**RECITALS**

 

**WHEREAS**, the Borrowers, variousfinancial institutions (the “Lenders”) and KeyBank, as AdministrativeAgent and as LC Issuer (together with the Lenders, the “Secured Parties”)are parties to a Credit Agreement dated as of the date hereof (as amended,supplemented or otherwise modified from time to time, the “Credit Agreement”),pursuant to which the Lenders will extend credit by means of making Loans andthe LC Issuer will issue  Letters ofCredit to or for the account of the Borrowers or other Letter of CreditObligors;

 

**WHEREAS**, it is a condition precedent to theeffectiveness of the Credit Agreement that the Borrowers enter into thisAgreement;

 

**NOW,THEREFORE**, for goodand valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto hereby agree as follows:

 

# **Section 1.**              **De**finitions****.

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**(a)**           Unless otherwise indicated, terms defined in the CreditAgreement are used herein as defined therein to the extent so defined.  All other terms contained in this Agreement,unless the context indicates otherwise or unless otherwise defined herein,shall have the meanings provided for in the UCC.

 

**(b)**           As used in this Agreement and all other Loan Documents,the following UCC terms shall have the meanings (such meanings to be equallyapplicable to both the singular and plural forms of the terms defined) ascribedto such terms in the UCC: “Account”, “Account Debtor”, “Certificated Security”,“Chattel Paper”, “Deposit Account”, “Document”, “Commodity Account”, “CommodityContract”, “Commodity Customer”, “Commodity Intermediary”, “Entitlement Holder”,“Equipment”, “Financial Asset”, “Fixture”, “General Intangible”, “Instrument”, “Inventory”,“Issuer”, “Investment Property”, “Letter of Credit Rights”, “Motor Vehicles”, “Proceeds”,“Secured Party”, “Securities Account”, “Securities Act”, “SecuritiesIntermediary”, “Security”, “Security Agreement”, “Security Certificate”, “SecurityEntitlement”, “Security Interest”, “Supporting Obligations” and “UncertificatedSecurity”.

 

**(c)**           In addition, as used herein:

 

“**Additional PledgedCollateral**” means all shares of, limited and /or general partnershipinterest in, and limited liability company interests in, and all securitiesconvertible into, and warrants, options and other rights to purchase orotherwise acquire, stock of, either (i) any Person that, after the ClosingDate, as a result of any occurrence, becomes a Subsidiary of a Borrower, or(ii) any issuer of Pledged Stock, any entity that is acquired by suchBorrower after the Closing Date; all certificates or other instrumentsrepresenting any of the foregoing; all Security Entitlements of such Borrowerin respect

 

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of any of the foregoing; all additional Indebtedness from time to timeowed to such Borrower by any obligor on the Pledged Notes and the instrumentsevidencing such Indebtedness; and all interest, cash, instruments and otherproperty or Proceeds from time to time received, receivable or otherwisedistributed in respect of or in exchange for any or all of the foregoing.  Additional Pledged Collateral may be GeneralIntangibles or Investment Property; provided that that in noevent shall any Borrower be required to pledge more than 65% of the capitalstock of a Subsidiary that is not a Domestic Subsidiary; and providedfurther that in no event shall any Borrower be required to cause the pledgeof any capital stock of any direct or indirect Subsidiary of any direct ForeignSubsidiary of a Borrower.

 

“**Assignee Deposit Account**”has the meaning assigned to such term in Section 4.

 

“**Collateral**” hasthe meaning assigned to such term in Section 3.

 

“**Credit Agreement**”has the meaning assigned to such term in the recitals of this Agreement.

 

“**Excluded Property**”means:

 

(a)           any permit, lease,license, contract or other agreement held by a Borrower or any SubsidiaryGuarantor that validly prohibits the creation by such Borrower or suchSubsidiary Guarantor of a security interest therein, or in the case oflicenses, the assignment thereof;

 

(b)           Equipment orFixtures owned by a Borrower or any Subsidiary Guarantor on the Closing Datethat is subject to a purchase money Lien or a Capitalized Lease (in each caseas otherwise permitted by the Credit Agreement) if the contract or otheragreement in which such Lien is granted (or in the documentation providing forsuch Capitalized Lease) validly prohibits the creation of any other Lien onsuch Equipment or Fixtures;

 

(c)           Motor Vehicles ownedby a Borrower  ora Subsidiary Guarantor;

 

(d)           cash and cashequivalents permitted to be subject to Liens pursuant to Sections 5.3(d)(A),(B) and (O) of the Credit Agreement;

 

(e)           deposits and cashpledges securing only workers’ compensation, unemployment insurance or similarobligations  in the ordinary course ofbusiness; and

 

(f)            thecapital stock of The Factory Power Company, an Ohio corporation,

 

and, in each case,only to the extent, and for so long as, such permit, lease, license, contractor other agreement, validly prohibits the creation of a Lien in such propertyin favor of the Administrative Agent and, upon the termination of suchprohibition (howsoever occurring), such permit, lease, license, contract, otheragreement or Equipment shall cease to be “Excluded Property”.

 

“**Foreign Subsidiary**” means a Subsidiaryof a Borrower that is not a Domestic Subsidiary.

 

“**Issuers**” means, collectively, therespective corporations, partnerships or other entities identified as such on Annex3, and each other Subsidiary of any Borrower formed

 

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oracquired after the date hereof and required to be added as an “Issuer” underthis Agreement.

 

**“Lockbox”** means a post office box of a Borrower or aSubsidiary Guarantor, as to which a lockbox bank has access, and into which thecollections on such Borrower’s or Subsidiary Guarantor’s Accounts are deliveredby Account Debtors.

 

**“Material Copyrights”** means all Copyrights of a Borrower having amaterial value or otherwise necessary for, or material to, the operation of thebusiness of such Borrower as presently conducted, as determined by suchBorrower in good faith after due inquiry. The Material Patent and Trademark Listing containsa list of all of the Borrowers’ Material Copyrights as of the Closing Date.

 

**“Material Copyright Collateral”** means, with respect to a Borrower, all ofsuch Borrower’s (i) Material Copyrights (and all future MaterialCopyrights pledged hereunder pursuant to Section 5.06(b)), (ii) the right to sue or otherwiserecover for any and all past, present and future infringement,misappropriation, or improper, unlawful or unfair use of any of the foregoing,and all damages and payments for past and future infringements andmisappropriations thereof, and (iv) the rights of such Borrower under allcommitments, understandings, instruments, leases, licenses, pledges, mortgages,indentures, notes, purchase or sale orders, promises and similar arrangementsevidencing or creating any obligation, whether written or oral, related to anyof the foregoing, including any royalties and income.

 

**“Material Intellectual Property”** means, with respect to any Borrower, allMaterial Copyrights, Material Patents and Material Trademarks of such Borrower.

 

**“Material Intellectual Property Collateral”**meansthe Material Patent Collateral, the Material Trademark Collateral and theMaterial Copyright Collateral.

 

**“Material Patents”** means all Patents of a Borrower having amaterial value or otherwise necessary for, or material to, the operation of thebusiness of such Borrower as presently conducted, as determined by suchBorrower in good faith after due inquiry. The Material Patent and Trademark Listing containsa list of all of the Borrowers’ Material Patents as of the Closing Date.

 

**“Material Patent Collateral”** means, with respect to a Borrower, all ofsuch Borrower’s (i) Material Patents (and all future Material Patentspledged hereunder pursuant to Section 5.06(b)), (ii) all inventions, improvements and designs described andclaimed in any Material Patent and the right to make, use, sell and advertisefor sale the same, (iii) the right to sue or otherwise recover for any andall past, present and future infringement, misappropriation, or improper,unlawful or unfair use of any of the foregoing, and all damages and paymentsfor past and future infringements and misappropriations thereof and(iv) the rights of such Borrower under all commitments, understandings,instruments, leases, licenses, pledges, mortgages, indentures, notes, purchaseor sale orders, promises and similar arrangements evidencing or creating anyobligation, whether written or oral, related to any of the foregoing, includingany royalties and income.

 

**“Material Trademarks”** means all Trademarks of a Borrower having amaterial value or otherwise necessary for, or material to, the operation of thebusiness of such Borrower as presently conducted, as determined by suchBorrower in good faith after due inquiry. The Material Patent and TrademarkListing contains a list of all of the Borrowers’Material Trademarks as of the Closing Date.

 

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**“Material Trademark Collateral”** means, with respect to a Borrower, all ofsuch Borrower’s (i) Material Trademarks (and all future MaterialTrademarks pledged hereunder pursuant to Section 5.06(b)), (ii) allgoodwill connected with the use of, and symbolized by, each Material Trademark;(iii) the right to sue or otherwise recover for any and all past, presentand future infringement, misappropriation, or improper, unlawful or unfair useof any of the foregoing, and all damages and payments therefor and(iv) the rights of such Borrower under all commitments, understandings,instruments, leases, licenses, pledges,mortgages, indentures, notes, purchase or sale orders, promises and similararrangements evidencing or creating any obligation, whether written or oral,related to any of the foregoing, including any royalties and income.

 

“**Obligations**”means all “Obligations” as defined in the Credit Agreement and all otherobligations of each Borrower and all other amounts whatsoever now or hereafterarising from time to time owing to the Lenders, the LC Issuer or the AdministrativeAgent under this Agreement and the other Loan Documents (including, withoutlimitation, principal, premium (if any), interest (including interest accruingon or after the filing of any petition in bankruptcy or for reorganizationrelating to such Borrower whether or not a claim for post-filing interest isallowed in such proceedings), fees, charges, expenses, indemnities,reimbursement obligations, guarantees and all other amounts payable thereunderor in respect thereof).

 

“**Pledged Collateral**”means, collectively, the Pledged Notes, the Pledged Stock, the PledgedPartnership Interests, the Pledged LLC Interests, any other Investment Propertyof the Borrowers, all certificates or other instruments representing any of theforegoing, all Security Entitlements of the Borrowers in respect of any of theforegoing, all dividends, interest distributions, cash, warrants, rights,instruments and other property or Proceeds from time to time received,receivable or otherwise distributed in respect of or in exchange for any or allof the foregoing.  Pledged Collateral maybe General Intangibles or Investment Property.

 

“**Pledged LLC Interests**”means all of each Borrower’s right, title and interest as a member of anylimited liability company and all of such Borrower’s right, title and interestin, to and under any operating or limited liability company agreement to whichit is a party, provided that “Pledged LLC Interests” shall bedeemed to only include 65% of the membership or unit interest of a Subsidiary thatis not a Domestic Subsidiary.  For the avoidance of doubt, Pledged LLCInterests shall not include the membership interest of a direct or indirectSubsidiary of any direct Foreign Subsidiary of a Borrower.

 

“**Pledged Notes**”means all right, title and interest of each Borrower in the Instrumentsevidencing all Indebtedness owed to such Borrower, issued by the obligors namedtherein, and all interest, cash, Instruments and other property or Proceedsfrom time to time received, receivable or otherwise distributed in respect ofor in exchange for any or all of such Indebtedness.

 

“**Pledged PartnershipInterests**” shall mean all of each Borrower’s right, title andinterest as a limited and/or general partner in all partnerships (includinglimited partnerships) and all of such Borrower’s right, title and interest in,to and under any related partnership agreements to which it is a party; providedthat “Pledged Partnership Interests” shall be deemed to only include 65%of the partnership interests of a Subsidiary that is not a Domestic Subsidiary.  Forthe avoidance of doubt, Pledged Partnership Interests shall not include thepartnership interest of a direct or indirect Subsidiary of any direct ForeignSubsidiary of a Borrower.

 

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“**Pledged Stock**”means the shares of capital stock of an Issuer owned by each Borrower; provided,however, that with respect to a Foreign Subsidiary, only up to 65% of eachclass of the capital stock of such Foreign Subsidiary shall be deemed to bepledged hereunder.  For the avoidance ofdoubt, Pledged Stock shall not include the capital stock of any direct orindirect Subsidiary of any direct Foreign Subsidiary of a Borrower.

 

“**Secured Parties**”means the Lenders, the LC Issuer, any Designated Hedge Creditor, theAdministrative Agent and all other holders of Obligations.

 

 “**UCC**” means the Uniform Commercial Code as in effect fromtime to time in the State of New York.

 

# **Section 2.**              **Representations and Warranties.**  Each Borrower represents and warrants that:

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**(a)**           **Title and Priority**.  Each Borrower is the sole beneficial owner ofand has the legal and valid right to use and grant a security interest in theCollateral in which it purports to grant a security interest pursuant to Section3 and no Lien exists or will exist upon such Collateral at any time, exceptfor Liens not prohibited by the Credit Agreement.  The security interest created hereunderconstitutes a valid and, once appropriate financing statements are duly filedin the central UCC filing office of the jurisdiction of organization of eachBorrower, perfected security interest under the UCC in the Collateral withrespect to which a security interest may be perfected by such filing and inwhich such Borrower purports to grant a security interest pursuant to Section3, subject to no equal or prior Lien except as expressly permitted bySection 5.3(d) of the Credit Agreement.

 

**(b)**           **Names, Locations.**   The full and correct legal name, typeof organization, jurisdiction of organization, organizational identificationnumber (if applicable) and mailing address of such Borrower are correctly setforth in Annex 1.  Annex 1also correctly specifies (A) the location of such Borrower’s registeredoffice and all domestic locations of its respective operations and whether suchlocations are owned or leased (and if such Borrower has more than one place ofbusiness, such description shall also designate such Borrower’s chief executiveoffice), including, an indication of any such location in which such Borrowerhas an interest in the related real property with a fair market value in excessof One Million Dollars ($1,000,000), (B) each domestic location (notalready set forth in clause (A)) above where the Goods (other than MotorVehicles constituting Equipment and Goods in transit) of such Borrower arelocated, (C) the domestic location and name of any warehouseman, bailee,processor or consignee at which Collateral having a value in excess of FiveThousand Dollars ($5,000) is located and a good faith estimate of the fairmarket value of the Collateral located at each such location, (D) each domesticlocation owned or leased by such Borrower where the Borrowers have Fixturesused in the Borrowers’ business operations (for avoidance of doubt, excludingany Fixtures used in connection with the Borrowers’ operation of real propertyor physical improvements to real property) (and an indication of each suchleased site where the total aggregate value of such Fixtures, as determined bysuch Borrower’s good faith estimate, such estimate not to be less than suchFixtures’s aggregate book value, is greater than $500,000),  (E) each domestic location where suchBorrower keeps records concerning its Accounts and General Intangibles and  (F) all former legal names and tradenamesused by such Borrower during the five year period prior to the Closing Date.

 

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**(c)**           **Changes in Circumstances**.  Except as specified in Annex 1, suchBorrower has not (i) within the period of four months prior to the datehereof, changed its location (as defined in Section 9-307 of the UCC) and(ii) within the period of five years prior to the date hereof, changed itslegal name or used any trade name.

 

**(d)**           **Accounts.**  Annex 2 lists all Deposit Accounts,Securities Accounts and Commodity Accounts and Lockboxes of such Borrower inexistence on the Closing Date.

 

**(e)**           **Pledged Stock; PledgedNotes**.  The Pledged Stockidentified under the name of such Borrower in Annex 3 is, and all otherPledged Stock in which such Borrower shall hereafter deliver to theAdministrative Agent pursuant to Section 3 will be, duly authorized,validly existing, fully paid and non-assessable and none of such Pledged Stockis or will be subject to any contractual restriction, or any restriction underthe charter or by-laws of the respective Issuer of such Pledged Stock (exceptfor any such restriction contained herein or in the Credit Agreement).  The Pledged Stock identified under the nameof such Borrower in Annex 3 constitutes all of the issued andoutstanding shares of capital stock of any class of the Issuers beneficiallyowned by such Borrower (whether or not registered in the name of such Borrower)and Annex 3 correctly identifies, as at the date hereof, the respectiveIssuers of such Pledged Stock, the respective class and par value of the sharesconstituting such Pledged Stock and the respective number of shares (andregistered owners thereof) represented by each such certificate.  Each Pledged Note issued to such Borrower andpledged by such Borrower hereunder has been duly authorized, authenticated orissued and delivered, is the legal, valid and binding obligation of the obligorthereunder, subject to applicable bankruptcy, insolvency, reorganization,moratorium or other Laws affecting creditors’ rights generally and subject togeneral principles of equity, regardless of whether considered in a proceedingin equity or at law.  None of the PledgedPartnership Interests nor the Pledged LLC Interestsexist in certificated form.

 

**(f)**            **Fair Labor Standards Act**.  Any Goods now or hereafter produced by suchBorrower or any of its Subsidiaries included in the Collateral have been andwill be produced in all material respects in compliance with the requirementsof the Fair Labor Standards Act, as amended.

 

**(g)**           **Intellectual Property**.

 

(1)           Allof the issued patents, trademark registrations and copyright registrationsamong the Material Intellectual Property are currently in compliance withformal legal requirements in all material respects (including payment offiling, examination and maintenance fees) and valid and enforceable in allmaterial respects.  No MaterialIntellectual Property has been or is now involved in any interference, reissue,reexamination, opposition or cancellation proceeding, and, other than certain “SmartBattery” and “Removable Hard Drive” patents, no Material Intellectual Propertyhas been or is infringed or has been or is challenged or threatened in any way.

 

(2)           Each Borrower is not aware that ithas failed to take all reasonably necessary steps to use consistent standardsof quality in the distribution and sale of all products sold and the provisionof all services provided under or in connection with any of the MaterialTrademark Collateral or has failed to take all necessary steps to ensure thatall licensed users of any of the Material Trademark Collateral adhere to suchconsistent standards of quality.

 

# **Section 3.**              **Collateral**.  To secure the prompt payment and performanceof the Obligations, each Borrower hereby grants to the Administrative Agent,for itself in its capacity as Administrative Agent hereunder and for thebenefit of the Secured Parties, a continuing security

 

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interestin and a pledge of all of the tangible and intangible personal property andassets of such Borrower (including all Intellectual Property), whether nowowned or existing or hereafter acquired or arising and wheresoever located(together, the “Collateral”), including, without limitation, all suchBorrower’s:

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**(a)**           Accounts,

 

**(b)**           Inventory,

 

**(c)**           Equipment and Fixtures,

 

**(d)**           General Intangibles,

 

**(e)**           Investment Property,

 

**(f)**            Deposit Accounts and any and all monies credited by ordue from the Lenders or any other depository to such Borrower,

 

**(g)**           Pledged Collateral and any Additional Pledged Collateral(arising after the date hereof),

 

**(h)**           Material Intellectual Property Collateral,

 

**(i)**            All Supporting Obligations and Letter of Credit Rights,

 

**(j)**            Instruments, Documents, documents of title, policies andcertificates of insurance, securities, goods, choses in action, Chattel Paper,cash or other property, to the extent owned by such Borrower or in which suchBorrower has an interest, and

 

**(k)**           property which now or hereafter is at any time in the possessionor control of any of the Secured Parties or in transit by mail or carrier to orfrom any of the Secured Parties or in the possession of any Person acting on aSecured Party’s behalf, without regard to whether such Secured Party receivedthe same in pledge, for safekeeping, as agent for collection or transmission orotherwise or whether such Secured Party had conditionally released the same,and any and all balances, sums, Proceeds and credits of such Borrower with suchSecured Party,

 

and, (A) allaccessions to, substitutions for, and all replacements, products and Proceedsof the foregoing including, but not limited to, Proceeds of insurance policiesinsuring such property, and Proceeds of any insurance, indemnity, warranty orguaranty payable to such Borrower and (B) all books, records, and otherproperty (including, but not limited to, credit files, programs, printouts,computer software, and disks, magnetic tape and other magnetic media, and othermaterials and records) of such Borrower pertaining to any such above-referencedproperty; provided, however, that the foregoing grant of asecurity interest and pledge shall not include a security interest in or pledgeof Excluded Property (but, notwithstanding anything set forth herein to thecontrary, the Administrative Agent will be deemed to have, and at all timesfrom and after the date hereof to have had, a security interest in and pledgeof the Proceeds of such Excluded Property to the extent such Proceeds do notconstitute Excluded Property).

 

Anything herein to the contrarynotwithstanding, (a) each Borrower shall remain liable under the contractsand agreements included in such Borrower’s Collateral to the extent set forththerein to perform all of its duties and obligations thereunder to the same extentas if this Agreement had not been executed, (b) the exercise by theAdministrative Agent of any of the rights hereunder shall not release suchBorrower from any of its duties or obligations under the

 

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contracts and agreementsincluded in the Collateral and (c) no Secured Party shall have anyobligation or liability under the contracts and agreements included in theCollateral by reason of this Agreement or any other agreement, nor shall anySecured Party be obligated to perform any of the obligations or duties of suchBorrower thereunder or to take any action to collect or enforce any claim forpayment assigned hereunder

 

# **Section 4.****              Collections.** At all times other than during the occurrence and continuanceof an Event of Default, each Borrower (a) may, in the ordinary course of itsbusiness, at its own expense, sell, lease or furnish under contracts of serviceany of the Inventory normally held by such Borrower for such purpose, use andconsume, in the ordinary course of its business, any raw materials, work inprocess or materials normally held by such Borrower for such purpose, and use,in the ordinary course of its business (but subject to the terms of the CreditAgreement), the cash Proceeds of Collateral and other money which constitutesCollateral, (b) will, at its own expense, endeavor to collect, as and when due,all amounts due under any of the Collateral, as such Borrower may deemadvisable, and (c) may grant, in the ordinary course of business, to anyAccount Debtor, any rebate, refund or allowance to which such Account Debtormay be lawfully entitled, and may accept, in connection therewith, the returnof Goods, the sale or lease of which shall have given rise to any relatedAccount.  The Administrative Agent,however, may, at any time that an Event of Default exists, whether before orafter any revocation of such power and authority or the maturity of any of theObligations, notify any such Account Debtors to make payment to theAdministrative Agent of any amounts due or to become due under such Accountsand enforce collection of any Collateral by suit or otherwise and surrender,release or exchange all or any part thereof, or compromise or extend or renewfor any period (whether or not longer than the original period) anyIndebtedness thereunder or evidence thereby. Upon request of the Administrative Agent during the existence of anEvent of  Default,each Borrower will, at its own expense, notify any parties obligated on any ofthe Collateral to make payment to the Administrative Agent of any amounts dueor to become due thereunder.

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Upon request bythe Administrative Agent during the existence of an Event of Default, eachBorrower will forthwith, upon receipt, transmit and deliver to the AdministrativeAgent, in the form received, all cash, checks, drafts and other instruments orwritings for the payment of money (properly endorsed, where required, so thatsuch items may be collected by the Administrative Agent) which may be receivedby such Borrower at any time in full or partial payment or otherwise asProceeds of any of the Collateral. Except as the Administrative Agent may otherwise consent in writing, anysuch items which may be so received by such Borrower during the existence of anEvent of Default will not be commingled with any other of its funds orproperty, but will be held separate and apart from its own funds or propertyand upon express trust for the Administrative Agent until delivery is made tothe Administrative Agent.  such Borrower will comply with the terms and conditions ofany consent given by the Administrative Agent pursuant to the foregoingsentence.

 

During theexistence of an Event of Default, all items or amounts which are delivered byeach Borrower to the Administrative Agent on account of partial or full paymentor otherwise as Proceeds of any of the Collateral shall be deposited to thecredit of a Deposit Account (each an “Assignee Deposit Account”) of suchBorrower maintained with the Administrative Agent, as security for payment ofthe Obligations.  A Borrower shall nothave any right to withdraw any funds deposited in the applicable AssigneeDeposit Account.   The AdministrativeAgent may, during the existence of an Event of Default, (i) exercise its rightto exclusive control over any Deposit Account or Securities Account subject toa Deposit Account Control Letter or a Securities Account Control Letter,respectively, and (ii) require each Borrower to (and require such Borrower tocause each of its Subsidiaries (other than Foreign Subsidiaries and ExcludedSubsidiaries) to) enter into the necessary agreements (including, withoutlimitation, Deposit Account Control Letters and Securities Account ControlLetters, if applicable) allowing for the Administrative Agent to have exclusive“control” (as such term is

 

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definedin the UCC) over each Deposit Account, Securities Account, Commodity Account orLockbox of such Borrower or such Subsidiary. During the existence of an Event of Default, all items or amounts whichare delivered and/or deposited to any such controlled Deposit Account,Securities Account, Commodity Account or Lockbox shall be promptly transferredby the Administrative Agent to the Assignee Deposit Account.  The Administrative Agent may, from time totime, in its discretion, during the existence of an Event of Default, and shallupon request of the applicable Borrower made not more than once in any week,apply all or any of the then balance, representing collected funds, in theAssignee Deposit Account, toward payment of the Obligations, whether or notthen due, in such order of application as provided in Section 7.4(d) of theCredit Agreement, and the Administrative Agent may, from time to time, in itsdiscretion, to the extent permitted under the Credit Agreement, release all orany of such balance to such Borrower.

 

During theexistence of an Event of Default, the Administrative Agent is authorized toendorse, in the name of any Borrower, any item, howsoever received by theAdministrative Agent, representing any payment on or other Proceeds of any ofthe Collateral.

 

# **Section 5.****              Collateral Provisions; Remedies; Further Assurances; Termination.** In furtherance of the grant of the pledge and security interest pursuantto Section 3, each Borrower hereby agrees with the Administrative Agentand each other Secured Party as follows:

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**5.01        Perfection**.  EachBorrower hereby (i) authorizes the Administrative Agent, at any time and fromtime to time, to file financing statements, continuation statements, andamendments thereto that describe the Collateral as “all assets” or “allpersonal property and assets” of such Borrower, or words of similar effect, andwhich otherwise comply with and contain any other information required by theUCC for the sufficiency of filing office acceptance of any such financingstatement, continuation statement, or amendment, (ii) authorizes theAdministrative Agent, at any time and from time to time, to file financingstatements, continuation statements, and amendments thereto, relating to anypart of the Material Intellectual Property Collateral without the signature ofsuch Borrower, with the United States Patent and Trademark Office (or anysuccessor thereto),  (iii) agrees to usecommercially reasonable efforts to obtain an acknowledgment, in form andsubstance reasonably satisfactory to the Administrative Agent, of any bailee, warehouseman or consignee in theUnited States having possession of Collateral with a fair market value greaterthan $1,000,000, stating that such Person holds such Collateral for the benefitof the Administrative Agent assecured party, (iv) agrees to use commercially reasonable efforts to obtain alandlord waiver, in form and substance reasonably satisfactory to theAdministrative Agent, of the landlord of any domestic property leased bysuch Borrower containing Collateral with afair market value greater than $1,000,000, and (v) otherwise agrees totake such other action and execute such assignments or other instruments ordocuments, in each case as the Administrative Agent may reasonably request, toevidence, perfect, or record the Administrative Agent’s security interest inthe Collateral, now existing or hereafter arising, or to enable theAdministrative Agent to exercise and enforce its rights and remedies under thisAgreement with respect to any Collateral; provided that, no action shallbe required or taken to perfect any security interest in any non-U.S.jurisdictions except, with respect to 65% of the capital stock of the Issuersthat are Foreign Subsidiaries that are first-tier Foreign Subsidiaries of aBorrower and not Excluded Foreign Subsidiaries granted hereunder, in whichcase, the Borrowers shall only be required to execute and deliver foreign lawdocuments (including, without limitation, security pledge agreements orinstruments (as applicable)) and make any necessary filings to fully perfectsuch pledge in the appropriate foreign jurisdictions (but such proviso shallnot limit the Borrowers’ obligations with respect to creation, perfection orother security interest matters under the law of the United States).  Any suchfinancing statement, continuation statement, or amendment may be filed by the AdministrativeAgent or its agents on behalf of such Borrower.

 

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Each Borrowerhereby authorizes the Administrative Agent, atany time and from time to time, with respect to each domestic location owned bysuch Borrower, to file “fixture” financing statements, continuation statementsand amendments thereto as necessary to perfect the Administrative Agent’ssecurity interest over such Borrower’s Fixtures.  With respect to each domestic location leasedby such Borrower, where the Borrowers have Fixtures used in the Borrowers’business operations (foravoidance of doubt, excluding any Fixtures used in connection with theBorrowers’ operation of real property or physical improvements to realproperty) where the total aggregate value of such Fixtures, asdetermined by such Borrower’s good faith estimate (such estimate not to be lessthan such Fixtures’ aggregate book value) is at least $500,000, then to theextent that (i) the applicable lease with respect to such location does notpermit such Borrower to remove all of the Borrower’s Fixtures upon thetermination of such lease (for any reason) or (ii) such Borrower does not havea landlord waiver in effect, in form andsubstance reasonably satisfactory to the Administrative Agent, from thelandlord of such location, then, to the extent permitted by such Borrower’slease or applicable law, the Administrative Agent, at any time and from time to time, may file “fixture”financing statements, continuation statements, and amendments thereto asnecessary to perfect the Administrative Agent’s security interest over suchBorrower’s Fixtures at such location (and to the extent that the applicablelandlord’s consent is required under the terms of the underlying lease toauthorize such filing, such Borrower will use its commercially reasonableefforts to obtain such consent).

 

Each Borrower shall, at any time and from time to time,take such steps as the Administrative Agent may reasonably request for the Administrative Agent: (i) to obtain a perfected security interest inany Pledged Collateral existing on the date hereof or any Additional PledgedCollateral hereafter arising and (ii) otherwise to assure the continuedperfection and priority of the Administrative Agent’s security interest in any of the Collateral andof the preservation of its rights therein. If any Borrower shall at any time acquire a Commercial Tort Claim inexcess of Five Million Dollars ($5,000,000), such Borrower shall promptlynotify the Administrative Agentthereof in a writing, therein providing a reasonable description and summarythereof (which shall include the amount thereof), and upon delivery thereof tothe Administrative Agent, suchBorrower shall be deemed to thereby grant to the Administrative Agent (and such Borrower hereby grants to the AdministrativeAgent) a security interest and Lien in andto such Commercial Tort Claim and all proceeds thereof, all upon the terms ofand governed by this Agreement, and such Borrower shall enter into a supplementto this Agreement confirming the grant of such security interest and Lien.

 

**5.02**        **Other Financing Statementsand Liens**.  Except asotherwise permitted under the Credit Agreement (including under Section 5.3(d)thereof), without the prior written consent of the Administrative Agent, noBorrower shall (a) file or suffer to be on file, or authorize or permit to befiled or to be on file, in any jurisdiction, any financing statement or likeinstrument with respect to any of the Collateral in which the AdministrativeAgent is not named as the sole secured party for the benefit of the SecuredParties or (b) cause or permit any Person other than the AdministrativeAgent to have “control” (as defined in Section 9-104, 9-105, 9-106 or9-107 of the UCC) of any Deposit Account, Electronic Chattel Paper, InvestmentProperty or Letter-of-Credit Right constituting part of the Collateral.

 

**5.03        Preservationof Rights**.  Neither theAdministrative Agent nor any other Secured Party shall be required to takesteps necessary to preserve any rights against prior parties to any of the Collateral.

 

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**5.04        SpecialProvisions Relating to Pledged Collateral.**

 

**(a)**           Each Borrower will cause the Pledged Collateral toconstitute at all times (i) except as provided in clause (ii) below, 100% of thetotal number of shares of each class of capital stock (or in the case of anyentity other than a corporation, the total membership, partnership or otherequity interests) of each Issuer then outstanding and owned by such Borrowerand (ii) in the case of any Foreign Subsidiary which is an Issuer hereunder,65% of the total number of shares of each class of capital stock (or in thecase of any entity other than a corporation, 65% of the total membership,partnership or other equity interests) of such Foreign Subsidiary.

 

**(b)**           So long as no Event of Default shall have occurred and becontinuing, each Borrower shall have the right to exercise all voting,consensual and other powers of ownership pertaining to the Pledged Collateralfor all purposes, provided that such Borrower agrees that it will notvote the Pledged Collateral in any manner that is inconsistent with the termsof this Agreement, the Credit Agreement or any other Loan Document; and theAdministrative Agent shall execute and deliver to such Borrower or cause to beexecuted and delivered to such Borrower all such proxies, powers of attorney,dividend and other orders, and all such instruments, without recourse, as suchBorrower may reasonably request for the purpose of enabling such Borrower to exercisethe rights and powers that it is entitled to exercise pursuant to this Section 5.04(b).

 

**(c)**           Unless and until an Event of Default has occurred and iscontinuing, the Borrowers shall be entitled to receive and retain anydividends, distributions and interest on the Pledged Collateral.

 

**(d)**           If any Event of Default shall have occurred, then so longas such Event of Default shall continue, and whether or not the AdministrativeAgent or any other Secured Party exercises any available right to declare any Obligationdue and payable or seeks or pursues any other relief or remedy available to itunder applicable Law or under this Agreement, the Credit Agreement or any otherLoan Document, all dividends and other distributions on the Pledged Collateralshall be paid directly to the Administrative Agent and retained by it in theAssignee Deposit Account as part of the Pledged Collateral, subject to theterms of this Agreement, and, if the Administrative Agent shall so request inwriting, each Borrower agrees to execute and deliver to the AdministrativeAgent appropriate additional dividend, distribution and other orders anddocuments to that end, provided that if such Event of Default is curedor waived, any cash dividend or distribution theretofore paid to the AdministrativeAgent shall, upon request of a Borrower (except to the extent theretoforeapplied to the Obligations), be returned by the Administrative Agent to suchBorrower without undue delay.

 

**5.05        SpecialProvisions Relating to Accounts. **

 

**(a)**           Other than those Deposit Accounts, Securities Accounts andCommodity Accounts and Lockboxes disclosed on Annex  2 (together with such Deposit Accounts,Securities Accounts, Commodity Accounts, Lockboxes and similar operatingaccounts as have been consented to by the Administrative Agent from time totime, which consent shall not be unreasonably withheld), no Borrower shallmaintain, nor or permit any other Person to maintain on behalf of such Borroweror any Subsidiary Guarantor, any Deposit Account, any Securities Account, anyCommodity Account or any Lockbox over which the Administrative Agent does nothave “control” (as defined in the Uniform Commercial Code), with agreements establishing control to be inform and substance reasonably satisfactory to the Administrative Agent; providedthat such Borrower or such Subsidiary Guarantor may maintain zero balanceaccounts, payroll accounts or any other Deposit Account which does not carry abalance greater than $500,000 for a period of more than twenty (20) consecutivedays at any time; provided, further, that the total

 

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aggregatedaily balances of all such excluded Deposit Accounts shall not exceed$2,000,000.  

 

**(b)**           On or before the Closing Date, the Borrowers shall establish(a) a Deposit Account at KeyBank and a Securities Account at McDonaldInvestments Inc. solely for the purpose of holding Secured Bond Assets and (b)a Deposit Account at KeyBank and a Securities Account at McDonald InvestmentsInc. solely for the purpose of holding Secured Loan Assets.  Notwithstanding the proviso in clause (a)above, the Borrowers shall at all times maintain the Administrative Agent’sperfected security interest in all Secured Bond Assets and Secured Loan Assetsand will not close such Deposit Accounts or such Securities Accounts (orterminate the related Deposit Account Control Letters and Securities AccountControl Agreements executed in connection therewith) without the prior writtenconsent of the Administrative Agent, except, in connection with the SecuredBond Assets, upon the early tender, redemption, repurchase or other prepaymentin full of the Fixed Rate Bonds due in 2005 to the extent permitted by theCredit Agreement.

 

**5.06        SpecialProvisions Relating to Material Intellectual Property Collateral.**

 

**(a)**           Each Borrower shall from time to time (but not more thanonce per Fiscal Quarter), furnish to the Administrative Agent, statements andschedules further identifying and describing any new Material IntellectualProperty Collateral pledged pursuant to clause (b) below and such other reportsin connection with the Material Intellectual Property Collateral, as theAdministrative Agent may reasonably request to the extent necessary to perfectits security interest therein, all in reasonable detail.

 

**(b)**           Each Borrower agrees that, should it obtain an ownershipinterest in any new Material Trademark, Material Patent or Material Copyright,including any issued patent or patent application, or any trademark orcopyright registration or application, which is not now scheduled as a part ofthe Material Intellectual Property Collateral, any such new MaterialIntellectual Property Collateral (along with the related rights theretodescribed in clauses (ii) through (iv) of the definition of Material PatentCollateral and Material Trademark Collateral, and clauses (ii) through (iii) ofthe definition of Material Copyright Collateral, as applicable) willautomatically become part of the Material Intellectual Property Collateral.  Each Borrower authorizes the AdministrativeAgent to modify Exhibit A to any Collateral Assignment of Security Interest inPatents and Patent Applications, Collateral Assignment of Security Interest inTrademarks and Licenses or Collateral Assignment of Security Interest inCopyrights executed by such Borrower (and shall cooperate with theAdministrative Agent in effecting any such amendment) to include any issuedpatent or patent application and any trademark or copyright registration orapplication which becomes part of the Material Intellectual PropertyCollateral.

 

**(c)**           No Borrower shall discontinue use of, fail to maintain orotherwise abandon any issued patent or patent application or any trademark orcopyright registration or application now or hereafter included in the MaterialIntellectual Property Collateral except in the exercise such Borrower’sreasonable business judgment.

 

**(d)**           Each Borrower shall take all reasonable steps which itdeems appropriate under the circumstances to preserve and protect the MaterialTrademark Collateral, including, without limitation, maintaining the quality ofany and all products or services used or provided in connection with any of theMaterial Trademark Collateral, consistent with the quality of the products andservices as of the date hereof, and taking all steps reasonably necessary toensure that all licensed users of any of the Material Trademark Collateral usesuch consistent standards of quality.

 

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**(e)**           Each Borrower agrees to notify the Administrative Agentpromptly and in writing if it learns (i) that any Material IntellectualProperty Collateral has been determined to have become abandoned, or dedicatedto the public, (ii) of the institution of any proceeding (including, withoutlimitation, the institution of any proceeding in the United States Patent andTrademark Office or any court) regarding any Material Intellectual PropertyCollateral or (iii) of any adverse determination with respect to thevalidity or enforceability in any material respect of any Material IntellectualProperty Collateral.

 

**(f)**            In the event that a Borrower makes a determination in itsreasonable business judgment that any Material Intellectual Property Collateralhas been infringed or misappropriated by a third party, such Borrower shallpromptly notify the Administrative Agent and will take such actions as suchBorrower deems appropriate in its reasonable business judgment under thecircumstances to protect such Material Intellectual Property Collateral.

 

**5.07        Remediesupon Event of Default**. During the period during which an Event of Default shall have occurredand be continuing:

 

**(a)**           each Borrower shall, at therequest of the Administrative Agent, assemble the Collateral owned by it atsuch place or places, reasonably convenient to both the Administrative Agentand such Borrower, designated in its request;

 

**(b)**           the Administrative Agent may makeany reasonable compromise or settlement deemed desirable with respect to any ofthe Collateral and may extend the time of payment, arrange for payment ininstallments, or otherwise modify the terms of, any of the Collateral;

 

**(c)**           the Administrative Agent shall have all of the rights andremedies with respect to the Collateral of a secured party under the UCC (whetheror not such UCC is in effect in the jurisdiction where the rights and remediesare asserted) and such additional rights and remedies to which a secured partyis entitled under the Laws in effect in any jurisdiction where any rights andremedies hereunder may be asserted, including, without limitation, the right,to the maximum extent permitted by Law, to exercise all voting, consensual andother powers of ownership pertaining to the Collateral as if the AdministrativeAgent were the sole and absolute owner thereof (and each Borrower agrees totake all such action as may be appropriate to give effect to such right);

 

**(d)**           the Administrative Agent in its discretion may, in itsname or in the name of any Borrower or otherwise, demand, sue for, collect orreceive any money or property at any time payable or receivable on account ofor in exchange for any of the Collateral, but shall be under no obligation todo so; and

 

**(e)**           the Administrative Agent may, upon ten Business Days’prior written notice to the applicable Borrower of the time and place, withrespect to the Collateral or any part thereof that shall then be or shallthereafter come into the possession, custody or control of the AdministrativeAgent, the other Secured Parties or any of their respective agents, sell,lease, assign or otherwise dispose of all or any part of such Collateral, atsuch place or places as the Administrative Agent deems best, and for cash orfor credit or for future delivery (without thereby assuming any credit risk),at public or private sale, without demand of performance or notice of intentionto effect any such disposition or of the time or place thereof (except suchnotice as is required above or by applicable statute and cannot be waived), andthe Administrative Agent or any other Secured Party or anyone else may be thepurchaser, lessee, assignee or recipient of any or all of the

 

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Collateralso disposed of at any public sale (or, to the extent permitted by Law, at anyprivate sale) and thereafter hold the same absolutely, free from any claim orright of whatsoever kind, including any right or equity of redemption(statutory or otherwise), of such Borrower, any such demand, notice and rightor equity being hereby expressly waived and released.  The Administrative Agent may, without noticeor publication, adjourn any public or private sale or cause the same to beadjourned from time to time by announcement at the time and place fixed for thesale, and such sale may be made at any time or place to which the sale may beso adjourned.

 

Each Borrowerrecognizes that, by reason of certain prohibitions contained in the SecuritiesAct of 1933, as amended, and applicable state securities Laws, theAdministrative Agent may be compelled, with respect to any sale of all or anypart of the Collateral, to limit purchasers to those who will agree, amongother things, to acquire the Collateral for their own account, for investmentand not with a view to the distribution or resale thereof.  Each Borrower acknowledges that any suchprivate sales may be at prices and on terms less favorable to theAdministrative Agent than those obtainable through a public sale without suchrestrictions, and, notwithstanding such circumstances, agree that any such privatesale shall be deemed to have been made in a commercially reasonable manner andthat the Administrative Agent shall have no obligation to engage in publicsales and no obligation to delay the sale of any Collateral for the period oftime necessary to permit the respective Issuer or issuer thereof to register itfor public sale.

 

**5.08        Deficiency**.  If the Proceeds of sale, collection or otherrealization of or upon the Collateral pursuant to Section 5.07 areinsufficient to cover the costs and expenses of such realization and thepayment in full of the Obligations, each Borrower shall remain liable for anydeficiency to the extent such Borrower is obligated under this Agreement.

 

**5.09        PrivateSale**.  Neither theAdministrative Agent nor any other Secured Party shall incur any liability as aresult of the sale of the Collateral, or any part thereof, at any private salepursuant to Section 5.07 conducted in a commercially reasonablemanner.  Each Borrower hereby waives anyclaims against the Administrative Agent or any other Secured Party arising byreason of the fact that the price at which the Collateral may have been sold atsuch a private sale was less than the price that might have been obtained at apublic sale or was less than the aggregate amount of the Obligations, even ifthe Administrative Agent accepts the first offer received and does not offerthe Collateral to more than one offeree.

 

**5.10        Applicationof Proceeds**.  TheProceeds of any collection, sale or other realization of all or any part of theCollateral pursuant hereto, and any other cash at the time held by theAdministrative Agent under Section 4 or this Section 5, shall beapplied by the Administrative Agent as it shall determine in its reasonablediscretion in accordance with the terms of the Credit Agreement.

 

**5.11**        **Attorney-in-Fact**.  The Administrative Agent shall hereby havethe right, and each Borrower hereby irrevocably makes, constitutes, andappoints 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 bysuch Borrower: (a) to effectuate, in such Borrower’s name, such Borrower’sobligations under this Agreement, (b) in such Borrower’s or AdministrativeAgent’s name: (i) to demand payment of the Accounts, (ii) to enforcepayment of the Accounts, by legal proceedings or otherwise, (iii) toexercise all of such Borrower’s rights and remedies with respect to thecollection of the Accounts and any other Collateral, (iv) to settle,adjust, compromise, extend, or renew the Accounts, (v) to settle, adjust,or compromise any legal proceedings brought to collect the Accounts,(vi) if permitted by applicable Law, to sell or assign the Accounts andother Collateral, (vii) to take control, in any

 

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manner, of any item ofpayment or Proceeds relating to any Collateral, (viii) to prepare, file,and sign such Borrower’s name on a proof of claim in a bankruptcy against anyAccount Debtor or on any notice of Lien, assignment, or satisfaction of Lien inconnection with any Accounts, (ix) to do all acts and things reasonablynecessary, in the Administrative Agent’s good faith discretion, to fulfill suchBorrower’s obligations under this Agreement, (x) to endorse the name ofsuch Borrower upon any of the items of payment or Proceeds relating to anyCollateral and deposit the same to any deposit account over which theAdministrative Agent has control, (xi) to endorse the name of suchBorrower upon any Chattel Paper, document, Instrument, invoice, freight bill,bill of lading, or similar document or agreement relating to the Accounts,Inventory and any other Collateral, (xii) to use such Borrower’sstationery and sign the name of such Borrower to verifications of the Accountsand notices thereof to Account Debtors, (xiii) to use the informationrecorded on or contained in any data processing equipment and computer hardwareand software relating to the Accounts, Inventory, and any other Collateral towhich such Borrower has access, (xiv) to make and adjust claims under suchpolicies of insurance insuring the Collateral, receive and endorse the name ofsuch Borrower on any check, draft, instrument or other item of payment for theproceeds of such policies, and make all determinations with respect to suchpolicies, and (xv) to notify post office authorities to change the addressfor delivery of such Borrower’s mail to an address designated by theAdministrative Agent, receive and open all mail addressed to such Borrower,and, after removing all collections of the Accounts, forward the mail to suchBorrower, (c) to pay or discharge taxes or Liens levied against theCollateral; (d) to the extent not inconsistent with the applicable LockboxAgreement and Deposit Account Agreement, and Deposit Account Control Letter totake all action necessary to grant the Administrative Agent sole access to anylockbox or Deposit Account of such Borrower or any other Borrower, (e) tocontact Account Debtors to pay any collections of Accounts to the Lockbox,(f) upon notice to the Borrower Representative, to commence and prosecuteany suits, actions or proceedings at law or in equity in any court of competentjurisdiction to collect the Collateral and to enforce any other right inrespect of any Collateral; (g) upon notice to the Borrower Representative,to defend any suit, action or proceeding brought against a Borrower withrespect to any Collateral; (h) upon notice to the Borrower Representative,to settle, compromise or adjust any such suit, action or proceeding;(i) to sell, transfer, pledge, or make any agreement with respect to theCollateral; and (j) to do, at the Administrative Agent’s option and theBorrowers’ expense, at any time, or from time to time, all acts and thingswhich the Administrative Agent reasonably deems necessary to protect, preserveor realize upon the Collateral.

 

**5.12        Locations,Etc**.  Without at least30 days’ prior written notice to the Administrative Agent, no Borrower shallchange its location (as defined in Section 9-307 of the UCC) or change itslegal name from the name shown as its current legal name on Annex 1.

 

**5.13        FurtherAssurances; Post-Closing Items**.

 

**(a)**           **Post-Closing****Foreign Pledge Agreements**. Each applicable Borrower agrees that, within 60 days of the Closing Date(or such longer period as reasonably agreed by the Administrative Agent), suchBorrower will execute an applicable foreign law pledge agreement or instrument(and any required filings or notices), in form and substance reasonablysatisfactory to the Administrative Agent, to perfect under such applicableforeign law, the Administrative Agent’s security interest purported to begranted hereunder in the Borrowers’ stock and other ownership interest of eachof 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.

 

**(b)**           **Liquidation of ForeignSubsidiary; Merger of Foreign Subsidiary with and into an Excluded ForeignSubsidiary.**  Upon theliquidation of any Foreign Subsidiary

 

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(other than an ExcludedForeign Subsidiary) or the merger or consolidation of any Foreign Subsidiary(other than an Excluded Foreign Subsidiary) with and into any Excluded ForeignSubsidiary, to the extent that the Administrative Agent reasonably determinesthat such liquidation, merger or consolidation negatively affects (other thanin a de minimis manner) the interest of the Administrative Agent or the Lendersunder the Loan Documents or in the Collateral, the Borrowers will take any andall reasonable actions, in form and substance satisfactory to theAdministrative Agent, as may be required, at the Borrowers’ option, (i) to fullyperfect the Administrative Agent’s security interest (which shall secure anequal or greater economic value than the security interest in existence priorto such liquidation, merger or consolidation) in the ownership interest of anysuccessor entity, which may include, without limitation, U.S. and foreign lawstock pledges, filings and assignments; provided that the Borrowers shall notbe required to pledge any equity interest in any Subsidiary of their first-tierForeign Subsidiaries or more than 65% of their ownership interest in anyForeign Subsidiary) or (ii) to provide the Administrative Agent with a firstpriority perfected security interest in substitute Collateral of at least equalor greater economic value (as determined by the Administrative Agent in itsreasonable discretion).

 

**(c)**           **General.**  Each Borrower agrees that, from time to timeupon the reasonable written request of the Administrative Agent, such Borrowerwill execute and deliver such further documents and do such other acts andthings as the Administrative Agent may reasonably request in order fully toeffect the purposes of this Agreement (as may be limited by the proviso in  Section 5.01 hereof) and to enforce itsrights and remedies hereunder and any security interest granted pursuant to anyother Loan Document (including, without limitation, with respect to theMaterial  Intellectual PropertyCollateral).

 

**5.14**        **Termination.**  When all Obligations shall have been paid infull and the Commitments and all LC Exposure under the Credit Agreement shallhave expired or been terminated, this Agreement shall terminate, and theAdministrative Agent shall forthwith cause to be assigned, transferred anddelivered, against receipt but without any recourse, warranty or representationwhatsoever, any remaining Collateral and money received in respect thereof, toor on the order of the respective Borrower. The Administrative Agent shall also execute and deliver to therespective Borrower, at such Borrower’s expense upon such termination such UCCtermination statements, certificates and such other documentation as shall bereasonably requested by the respective Obligor to effect the termination andrelease of the Liens on the Collateral.

 

**5.15**        **Reinstatement.**  This Agreement shall remain in full force andeffect and continue to be effective should any petition be filed by or againstany Borrower for liquidation or reorganization, should any Borrower becomeinsolvent or make an assignment for the benefit of any creditor or creditors orshould a receiver or trustee be appointed for all or any significant part ofany Borrower’s assets, and shall continue to be effective or be reinstated, asthe case may be, if at any time payment and performance of the Obligations, orany part thereof, is, pursuant to applicable Law, rescinded or reduced inamount, or must otherwise be restored or returned for any obligee of theObligations, whether as a voidable preference, fraudulent conveyance, orotherwise, all as though such payment or performance had not been made.  In the event that any payment, or any partthereof, is rescinded, reduced, restored or returned, the Obligations shall bereinstated and deemed reduced only by such amount paid and not so rescinded,reduced, restored or returned.

 

# **Section 6.**              **Miscellaneous**.

#  

**6.01        Notices**.  All notices, requests, consents and demandshereunder shall be in delivered and construed in accordance with the terms ofthe Credit Agreement.  However, anynotice required hereunder to be delivered by a Borrower may be delivered onsuch Borrower’s behalf by the Borrower Representative.

 

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**6.02        NoWaiver**.  No failure onthe part of the Administrative Agent or any other Secured Party to exercise,and no course of dealing with respect to, and no delay in exercising, anyright, power or remedy hereunder shall operate as a waiver thereof; nor shallany single or partial exercise by the Administrative Agent or any other SecuredParty of any right, power or remedy hereunder preclude any other or furtherexercise thereof or the exercise of any other right, power or remedy.  The remedies herein are cumulative and arenot exclusive of any remedies provided by Law.

 

**6.03**        **Amendments, Etc**.  The terms of this Agreement may be waived,altered or amended only in a writing duly executed by the Borrowers and theAdministrative Agent (with the consent of the Required Lenders or as otherwiserequired pursuant to Section 13.1 of the Credit Agreement).  Any such amendment or waiver shall be bindingupon the Administrative Agent, each other Secured Party and each holder of anyof the Obligations and the Borrowers.

 

**6.04**        **Expenses**.  Each Borrower agrees to reimburse theAdministrative Agent (including, without limitation, the reasonable fees andout-of-pocket expenses of counsel for the Administrative Agent and includinginternal counsel) for all reasonable costs and expenses incurred by them inconnection with (i) any Event of Default or Potential Default and anyenforcement or collection proceeding resulting therefrom, including, withoutlimitation, all manner of participation in or other involvement with(w) performance by the Administrative Agent of any obligations of suchBorrower in respect of the Collateral that such Borrower has failed or refusedto perform, (x) bankruptcy, insolvency, receivership, foreclosure, windingup or liquidation proceedings, or any actual or attempted sale, or anyexchange, enforcement, collection, compromise or settlement in respect of anyof the Collateral, and for the care of the Collateral and defending orasserting rights and claims of the Administrative Agent in respect thereof, bylitigation or otherwise, including expenses of insurance, (y) judicial orregulatory proceedings and (z) workout, restructuring or other negotiationsor proceedings (whether or not the workout, restructuring or transactioncontemplated thereby is consummated) and (ii) the enforcement of this Section 6.04,and all such costs and expenses shall be Obligations.

 

**6.05        Successorsand Assigns**.  ThisAgreement shall be binding upon and inure to the benefit of the respectivesuccessors and assigns of each Borrower, the Administrative Agent, the otherSecured Parties and each holder of any of the Obligations (provided, however,that no Borrower shall assign or transfer its rights or obligations hereunderwithout the prior written consent of the Administrative Agent).

 

**6.06**        **Counterparts**.  This Agreement may be executed in any numberof counterparts, all of which taken together shall constitute one and the sameinstrument and any of the parties hereto may execute this Agreement by signingany such counterpart.

 

**6.07**        **Governing Law.**   This Agreement shall be governed by, andconstrued in accordance with, the law of the State of New York.

 

**6.08**        **Captions**.  The captions and section headings appearingherein are included solely for convenience of reference and are not intended toaffect the interpretation of any provision of this Agreement.

 

**6.09**        **Agents and Attorneys-in-Fact**.  The Administrative Agent may employ agentsand attorneys-in-fact in connection herewith and shall not be responsible forthe negligence or misconduct of any such agents or attorneys-in-fact selectedby it in good faith.

 

**6.10        Severability**.  If any provision hereof is invalid andunenforceable in any jurisdiction, then, to the fullest extent permitted byLaw, (a) the other provisions hereof shall

 

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remain in full force andeffect in such jurisdiction and shall be liberally construed in favor of theAdministrative Agent and the other Secured Parties in order to carry out theintentions of the parties hereto as nearly as may be possible and (b) theinvalidity or unenforceability of any provision hereof in any jurisdictionshall not affect the validity or enforceability of such provision in any otherjurisdiction.

 

[Signatures Follow]

 

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**IN WITNESS WHEREOF**, the parties hereto have caused thisAgreement to be duly executed and delivered as of the day and year first abovewritten.

 
|   | **UNOVA, INC.**                                |
|--------|------------------------------------------------|
|   |                                           |   |   |
|   |                                           | /s/ | Michael E. Keane |
|   | By                                             |   | Michael  E. Keane |
|   | Title:                                         |   | Senior  Vice President and CFO |
|   |                                           |   |   |
|   |                                           | /s/ | Kenneth L. Cohen |
|   | By                                             |   | Kenneth  L. Cohen |
|   | Title:                                         |   | Vice  President and Treasurer |
|   |                                           |   |   |
|   |                                           |   |   |
|   | **UNOVA INDUSTRIAL AUTOMATION  SYSTEMS, INC.** |
|   |                                           |   |   |
|   |                                           | /s/ | Michael E. Keane |
|   | By                                             |   | Michael  E. Keane |
|   | Title:                                         |   | Vice  President |
|   |                                           |   |   |
|   |                                           | /s/ | Kenneth L. Cohen |
|   | By                                             |   | Kenneth  L. Cohen |
|   | Title:                                         |   | Vice  President and Treasurer |
|   |                                           |   |   |
|   |                                           |   |   |
|   | **INTERMEC TECHNOLOGIES  CORPORATION**         |
|   |                                           |   |   |
|   |                                           | /s/ | Michael E. Keane |
|   | By                                             |   | Michael  E. Keane |
|   | Title:                                         |   | Vice  President |
|   |                                           |   |   |
|   |                                           | /s/ | Kenneth L. Cohen |
|   | By                                             |   | Kenneth  L. Cohen |
|   | Title:                                         |   | Vice  President and Treasurer |
|   |                                           |   |   |
|   |                                           |   |   |
|   | **INTERMEC INTERNATIONAL INC.**                |
|   | ** **                                     | ** ** |   |
|   |                                           | /s/ | Michael E. Keane |
|   | By                                             |   | Michael  E. Keane |
|   | Title:                                         |   | Vice  President |
|   |                                           |   |   |
|   |                                           | /s/ | Kenneth L. Cohen |
|   | By                                             |   | Kenneth  L. Cohen |
|   | Title:                                         |   | Vice  President and Treasurer |

 

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|   | **INTERMEC TECHNOLOGIES  MANUFACTURING, LLC**              |
|--------|------------------------------------------------------------|
|   | ** **                                                 | ** ** |   |
|   |                                                       | /s/ | Michael E. Keane |
|   | By                                                         |   | Michael  E. Keane |
|   | Title:                                                     |   | Vice  President |
|   |                                                       |   |   |
|   |                                                       | /s/ | Kenneth L. Cohen |
|   | By                                                         |   | Kenneth  L. Cohen |
|   | Title:                                                     |   | Vice  President and Treasurer |
|   |                                                       |   |   |
|   |                                                       |   |   |
|   | **INTERMEC IP CORP.**                                      |
|   |                                                       |   |   |
|   |                                                       | /s/ | Michael E. Keane |
|   | By                                                         |   | Michael  E. Keane |
|   | Title:                                                     |   | Vice  President |
|   |                                                       |   |   |
|   |                                                       | /s/ | Kenneth L. Cohen |
|   | By                                                         |   | Kenneth  L. Cohen |
|   | Title:                                                     |   | Vice  President and Treasurer |
|   |                                                       |   |   |
|   |                                                       |   |   |
|   | **UNOVA IP CORP.**                                         |
|   | ** **                                                 | ** ** |   |
|   |                                                       | /s/ | Michael E. Keane |
|   | By                                                         |   | Michael  E. Keane |
|   | Title:                                                     |   | Vice  President |
|   |                                                       |   |   |
|   |                                                       | /s/ | Kenneth L. Cohen |
|   | By                                                         |   | Kenneth  L. Cohen |
|   | Title:                                                     |   | Vice  President and Treasurer |
|   |                                                       |   |   |
|   |                                                       |   |   |
|   | **KEYBANK NATIONAL ASSOCIATION,**  as Administrative Agent |
|   |                                                       |   |   |
|   |                                                       | /s/ | Marianne T. Meil |
|   | By                                                         |   | Marianne  T. Meil |
|   | Title:                                                     |   | Vice  President |

 

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