** **

**Exhibit 4.1**

 

 

**PURCHASEAND SALE AGREEMENT**

** **

**among**

** **

**UNOVA, INC.**

** **

**UNOVA INDUSTRIAL AUTOMATION SYSTEMS, INC.**

** **

**UNOVA U.K. LIMITED (Reg. No. 1218921)**

** **

**CINCINNATI MACHINE U.K. LIMITED (Reg. No. 3256777)**

** **

**HONSBERG LAMBSONDERWERKZEUGMASCHINEN GMBH**

** **

**UNOVA CANADA, INC.**

** **

**UNOVA IP CORP.**

** **

**and**

** **

**R&B PLASTICS HOLDINGS, INC.**

** **

**MAG INDUSTRIAL AUTOMATION SYSTEMS, LLC**

 

Dated:  March 17, 2005

 

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***CONTENTS***

*** ***
| ARTICLE 1. The Transactions                                        |                                |
|-------------------------------------------------------------------------|-------------------------------------|
| 1.1                                                                     | Transfer of Assets                  |   |
| 1.2                                                                     | Excluded  Assets                    |   |
| 1.3                                                                     | Transfers of Shares                 |   |
|                                                                    | (a)                                 | Transfer of CM Korea Shares |   |
|                                                                    | (b)                                 | Transfer of UII Shares |   |
|                                                                    | (c)                                 | Transfer of R&B Shares |   |
| 1.4                                                                     | Consideration                       |   |
| 1.5                                                                     | Purchase Price and Payment          |   |
|                                                                    | (a)                                 | Purchase Price |   |
|                                                                    | (b)                                 | Payment of Purchase Price |   |
|                                                                    |                                | (i) | Cash Payment |   |
|                                                                    |                                | (ii) | Secured Note |   |
|                                                                    | (c)                                 | Allocation of Consideration |   |
|                                                                    |                                | (i) | Section 1060 Allocation |   |
|                                                                    |                                | (ii) | Section 338 Allocation |   |
|                                                                    |                                | (iii) | Section 56.4 Election |   |
|                                                                    |                                | (iv) | Section 167 Election |   |
|                                                                    |                                | (v) | Section 22 Election |   |
| 1.6                                                                     | Assumed Liabilities                 |   |
| 1.7                                                                     | Excluded Liabilities                |   |
| 1.8                                                                     | Closing Balance Sheet               |   |
|                                                                    | (a)                                 | Cincinnati  Lamb Group December Balance Sheets |   |
|                                                                    | (b)                                 | Preliminary Closing  Balance Sheet |   |
|                                                                    | (c)                                 | Review of  Preliminary Closing Balance Sheet |   |
|                                                                    | (d)                                 | Finalization of  Closing Balance Sheet |   |
|                                                                    | (e)                                 | Net Working Assets |   |
| 1.9                                                                     | Right to Contest                    |   |
| 1.10                                                                    | Nonassignable  Contracts and Rights |   |
| 1.11                                                                    | Power of Attorney                   |   |
| 1.12                                                                    | Bulk  Sales                         |   |
|                                                                    |                                |   |   |   |
| ARTICLE 2. Closing and Transfer  Date                              |                                |
| 2.1                                                                     | Closing                             |   |
| 2.2                                                                     | Notice and Right to Cure            |   |
| 2.3                                                                     | Reconciliation of Cash              |   |
|                                                                    |                                |   |
| ARTICLE 3. Representations and  Warranties of the Selling Entities |                                |
| 3.1                                                                     | Corporate Matters                   |   |
|                                                                    | (a)                                 | Due  Organization, Good Standing and Qualification |   |
|                                                                    | (b)                                 | Corporate  Authority to Conduct Business |   |
|                                                                    | (c)                                 | Corporate  Power and Authority to Enter Into Agreements |   |

 

i

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|   | (d)                                                                                           | Due Execution and  Enforceability                                  |   |
|--------|-----------------------------------------------------------------------------------------------|--------------------------------------------------------------------|--------|
|   | (e)                                                                                           | No Conflict                                                        |   |
|   | (f)                                                                                           | Subsidiaries  and Other Equity Investments                         |   |
|   | (g)                                                                                           | Articles and By-laws                                               |   |
|   | (h)                                                                                           | Capitalization and  Shareholders                                   |   |
|   | (i)                                                                                           | Amalgamation of UNOVA  Canada                                      |   |
| 3.2    | Financial                                                                                     |                                                               |
|   | (a)                                                                                           | December Financials                                           |   |
|   | (b)                                                                                           | Events  Subsequent to December Balance Sheet                  |   |
|   | (c)                                                                                           | Indebtedness                                                       |   |
| 3.3    | Accounts Receivable                                                                           |                                                               |
|   | (a)                                                                                           | December Balance Sheet                                        |   |
|   | (b)                                                                                           | Closing Balance Sheet                                              |   |
| 3.4    | Inventories                                                                                   |                                                               |
| 3.5    | Absence of Liens and  Encumbrances                                                            |                                                               |
| 3.6    | Real  Property                                                                                |                                                               |
|   | (a)                                                                                           | Real Property                                                      |   |
|   | (b)                                                                                           | Realty Leases (as Lessee)                                          |   |
|   | (c)                                                                                           | Violation of  Laws or Restrictive Covenants                        |   |
|   | (d)                                                                                           | Environmental Matters                                              |   |
| 3.7    | Right to Use  Properties and Assets                                                           |                                                               |
| 3.8    | Contracts and Commitments                                                                     |                                                               |
|   | (a)                                                                                           | Sales Orders, Bids and  Proposals                                  |   |
|   | (b)                                                                                           | Purchase Orders                                                    |   |
|   | (c)                                                                                           | Sales  Representative, Distributor and Dealer Agreements           |   |
|   | (d)                                                                                           | Personal Property  Leases (As Lessee)                              |   |
|   | (e)                                                                                           | Noncompetition  Agreements or Covenants                            |   |
|   | (f)                                                                                           | Confidential  Nondisclosure Agreements                             |   |
|   | (g)                                                                                           | Consultant Agreements                                              |   |
|   | (h)                                                                                           | Guarantees                                                         |   |
|   | (i)                                                                                           | Powers of Attorney, Proxies                                        |   |
|   | (j)                                                                                           | Letters  of Credit, Surety, Bid and Performance Bonds              |   |
|   | (k)                                                                                           | Other Material Contracts                                           |   |
| 3.9    | Patents,  Trade Names, Trademarks, Service Marks, Copyrights and Chip Registrations           |                                                               |
|   | (a)                                                                                           | Intellectual Property  Rights                                      |   |
|   | (b)                                                                                           | Licenses  of Intellectual Property Rights To or From Third Parties |   |
|   | (c)                                                                                           | No Infringement                                                    |   |
| 3.10   | Patent,  Trade Name, Trademark, Service Mark, Copyright or Chip Registration  Indemnification |                                                               |
| 3.11   | Confidential  Information or Trade Secrets                                                    |                                                               |
| 3.12   | Product and Service  Warranties                                                               |                                                               |
| 3.13   | Employees; Employee  Benefits                                                                 |                                                               |

 

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|                                                                    | (a)                                                                    | Employees                                              |               |
|-------------------------------------------------------------------------|------------------------------------------------------------------------|--------------------------------------------------------|--------------------|
|                                                                    | (b)                                                                    | Indebtedness to Employees                              |               |
|                                                                    | (c)                                                                    | Loans or Advances to  Employees                        |               |
|                                                                    | (d)                                                                    | Collective Bargaining  Agreements                      |               |
|                                                                    | (e)                                                                    | Other Labor Matters                                    |               |
|                                                                    | (f)                                                                    | Employee Benefit Plans                                 |               |
|                                                                    |                                                                   | (i)                                                    | Generally          |   |
|                                                                    |                                                                   | (ii)                                                   | ERISA Plans        |   |
|                                                                    |                                                                   | (iii)                                                  | U.K. Pension Plans |   |
|                                                                    | (g)                                                                    | Employment Contracts                                   |               |
| 3.14                                                                    | Pending  or Threatened Claims, Litigation and Governmental Proceedings |                                                   |
| 3.15                                                                    | Judgments, Orders  and Consent Decrees                                 |                                                   |
| 3.16                                                                    | Compliance With Laws                                                   |                                                   |
| 3.17                                                                    | Franchises, Permits, Etc.                                              |                                                   |
| 3.18                                                                    | Taxes                                                                  |                                                   |
| 3.19                                                                    | Required Consents                                                      |                                                   |
| 3.20                                                                    | No Breach of Statute  or Contract                                      |                                                   |
| 3.21                                                                    | Insurance and Banking                                                  |                                                   |
|                                                                    | (a)                                                                    | Insurance Policies                                     |               |
|                                                                    | (b)                                                                    | Bank Accounts                                          |               |
| 3.22                                                                    | Broker’s or Finder’s Fees                                    |                                                   |
| 3.23                                                                    | Duty of  the Selling Entities to Make Inquiry                          |                                                   |
| 3.24                                                                    | Affiliate Arrangements                                                 |                                                   |
| 3.25                                                                    | Assets of Cincinnati  Lamb Group                                       |                                                   |
| 3.26                                                                    | No  Knowledge of Other Liabilities; No Other Representations           |                                                   |
|                                                                    | (a)                                                                    | No Knowledge of Other  Liabilities                     |               |
|                                                                    | (b)                                                                    | Disclaimer  of Other Representations and Warranties    |               |
|                                                                    |                                                                   |                                                   |               |   |
| ARTICLE 4. Representations and  Warranties of Mainco and Purchaser |                                                                   |
| 4.1                                                                     | Corporate Matters                                                      |                                                   |
|                                                                    | (a)                                                                    | Due Organization                                       |               |
|                                                                    | (b)                                                                    | Corporate  Power and Authority to Enter Into Agreement |               |
|                                                                    | (c)                                                                    | Due Execution and  Enforceability                      |               |
|                                                                    | (d)                                                                    | No Conflict                                            |               |
| 4.2                                                                     | Required Consents                                                      |                                                   |
| 4.3                                                                     | Claims,  Litigation and Governmental Proceedings                       |                                                   |
| 4.4                                                                     | Broker’s or Finder’s Fees                                    |                                                   |
| 4.5                                                                     | Subsidiaries                                                           |                                                   |
| 4.6                                                                     | Solvency                                                               |                                                   |
| 4.7                                                                     | Sources of Financing                                                   |                                                   |
| 4.8                                                                     | WTO  Investor                                                          |                                                   |
| 4.9                                                                     | Ultimate Parent Entity                                                 |                                                   |

 

iii

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| ARTICLE 5. Certain Covenants  Pending the Closing                                       |                                            |
|----------------------------------------------------------------------------------------------|-------------------------------------------------|
| 5.1                                                                                          | Full  Access                                    |   |
| 5.2                                                                                          | Carry On In Regular Course                      |   |
| 5.3                                                                                          | Sales  Orders                                   |   |
| 5.4                                                                                          | Capital Expenditures                            |   |
| 5.5                                                                                          | No Increase in  Compensation or Benefits        |   |
| 5.6                                                                                          | Consents                                        |   |
|                                                                                         | (a)                                             | HSR  Act |   |
|                                                                                         | (b)                                             | German Merger Control |   |
|                                                                                         | (c)                                             | Korean Reports |   |
| 5.7                                                                                          | Conditions Precedent                            |   |
| 5.8                                                                                          | Environmental Survey                            |   |
|                                                                                         | (a)                                             | Phase I and Phase II |   |
|                                                                                         | (b)                                             | Environmental Response Plan |   |
| 5.9                                                                                          | Nondisclosure by Purchaser                      |   |
| 5.10                                                                                         | Status of Purchaser’s Financing            |   |
| 5.11                                                                                         | Reorganization of U.K. Pension Plans            |   |
| 5.12                                                                                         | Purchaser Subsidiaries                          |   |
| 5.13                                                                                         | Planning Act (Ontario)                          |   |
|                                                                                         |                                            |   |   |   |
| ARTICLE 6.  Conditions Precedent to the Obligations of the Purchasing Entities to Close |                                            |
| 6.1                                                                                          | Representations and Warranties True             |   |
| 6.2                                                                                          | Compliance With Agreement                       |   |
| 6.3                                                                                          | No Material Adverse Change; Net Working Capital |   |
| 6.4                                                                                          | No Litigation                                   |   |
| 6.5                                                                                          | Proceedings and Instruments Satisfactory        |   |
| 6.6                                                                                          | Consents and Approvals                          |   |
| 6.7                                                                                          | Instruments of Transfer                         |   |
| 6.8                                                                                          | Resignations and Corporate Records              |   |
| 6.9                                                                                          | Transitional Services Agreement                 |   |
| 6.10                                                                                         | Title Reports                                   |   |
|                                                                                         |                                            |   |
| ARTICLE 7.  Conditions Precedent to the Obligations of the Selling Entities to Close    |                                            |
| 7.1                                                                                          | Representations and Warranties True             |   |
| 7.2                                                                                          | Compliance With Agreement                       |   |
| 7.3                                                                                          | No Litigation                                   |   |
| 7.4                                                                                          | Proceedings and Instruments Satisfactory        |   |
| 7.5                                                                                          | Consents and Approvals                          |   |
| 7.6                                                                                          | Purchase Price                                  |   |
| 7.7                                                                                          | Instruments of Assumption                       |   |
| 7.8                                                                                          | Performance Bonds                               |   |
| 7.9                                                                                          | Transitional Services Agreements                |   |
|                                                                                              |                                                 |  |  |  |

 

iv

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| 7.10                                  | Consent of UNOVA’s Lender             |                                                             |
|---------------------------------------|--------------------------------------------|------------------------------------------------------------------|
|                                  |                                       |                                                             |   |   |
| ARTICLE 8.  Further Requirements |                                       |
| 8.1                                   | Access to Books and Records                |                                                             |
| 8.2                                   | Further Instruments and Assurances         |                                                             |
| 8.3                                   | Litigation Cooperation                     |                                                             |
| 8.4                                   | Certain Employee Matters                   |                                                             |
|                                  | (a)                                        | Employment                                                       |   |
|                                  | (b)                                        | Certain Employee Benefits                                        |   |
|                                  |                                       | (i)                                                              | Past Service Credit |   |
|                                  |                                       | (ii)                                                             | Benefits  under the Selling Entities’ Plans |   |
|                                  |                                       | (iii)                                                            | U.S. Medical and Health  Plan |   |
|                                  |                                       | (iv)                                                             | Purchaser’s 401(k) Plan |   |
|                                  |                                       | (v)                                                              | U.K. Pension Plans |   |
|                                  | (c)                                        | Certain Retained  Responsibility                                 |   |
|                                  | (d)                                        | WARN Act                                                         |   |
|                                  | (e)                                        | Certain  Agreements Regarding Severance                          |   |
|                                  | (f)                                        | Certain  Agreements Regarding Personnel in Spain and France      |   |
| 8.5                                   | Agreements Regarding Intellectual Property |                                                             |
|                                  | (a)                                        | Use of UNOVA Name and Mark                                       |   |
|                                  | (b)                                        | Industrial Automation  Systems                                   |   |
|                                  | (c)                                        | Certain Licensed  Intellectual Property                          |   |
|                                  |                                       | (i)                                                              | Purchaser’s  License of Licensed Intellectual Property |   |
|                                  |                                       | (ii)                                                             | Seller’s  License of Licensed Intellectual Property |   |
| 8.6                                   | Exclusivity                                |                                                             |
| 8.7                                   | Taxes                                      |                                                             |
|                                  | (a)                                        | Taxes  Relating to the Business and the Transferred Subsidiaries |   |
|                                  | (b)                                        | Tax Returns                                                      |   |
|                                  |                                       | (i)                                                              | Consolidated Returns |   |
|                                  |                                       | (ii)                                                             | Separate Returns |   |
|                                  | (c)                                        | Tax Contests                                                     |   |
|                                  | (d)                                        | Cooperation                                                      |   |
|                                  | (e)                                        | Transfer Taxes                                                   |   |
|                                  | (f)                                        | Employment Taxes                                                 |   |
|                                  | (g)                                        | Section 338(h)(10) Elections                           |   |
|                                  | (h)                                        | Section 338(g) Election                                |   |
|                                  | (i)                                        | Interpretation                                                   |   |
|                                  | (j)                                        | Tax Treatment                                                    |   |
| 8.8                                   | Settlement of Intercompany Accounts        |                                                             |
| 8.9                                   | Cash of the Transferred Subsidiaries       |                                                             |
| 8.10                                  | Performance Bonds                          |                                                             |

 

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| 8.11                                      | Name                                          |                                                            |
|-------------------------------------------|-----------------------------------------------|-----------------------------------------------------------------|
| 8.14                                      | Authorization; Mail                           |                                                            |
| 8.15                                      | Post-Closing Cooperation                      |                                                            |
| 8.16                                      | Cooperation Regarding U.K. Properties         |                                                            |
|                                      | (a)                                           | Definitions                                                     |   |
|                                      | (b)                                           | Matters  Affecting the U.K. Properties                          |   |
|                                      | (c)                                           | Landlord’s Consents                                        |   |
|                                      | (d)                                           | Completion                                                      |   |
|                                      | (e)                                           | Completion                                                      |   |
|                                      | (f)                                           | Assurances                                                      |   |
| 8.17                                      | Mexico VAT Deposit                            |                                                            |
|                                      |                                          |                                                            |   |   |
| ARTICLE 9.  Noncompetition Agreement |                                          |
| 9.1                                       | Noncompetition Agreement                      |                                                            |
| 9.2                                       | Limitations  on Noncompetition Agreement      |                                                            |
| 9.3                                       | Definition of  Competitive Business           |                                                            |
| 9.4                                       | Nonsolicitaiton                               |                                                            |
| 9.5                                       | Injunctive and  Equitable Relief              |                                                            |
|                                      |                                          |                                                            |   |   |
| ARTICLE 10.  Termination             |                                          |
| 10.1                                      | Termination                                   |                                                            |
| 10.2                                      | Notice of Termination                         |                                                            |
|                                      |                                          |                                                            |   |   |
| ARTICLE 11.  Indemnification         |                                          |
| 11.1                                      | Indemnification  by the Selling Entities      |                                                            |
|                                      | (a)                                           | Misrepresentation  or Breach of Warranty                        |   |
|                                      | (b)                                           | Breach of Covenant  or Agreement                                |   |
|                                      | (c)                                           | Excluded Liabilities                                            |   |
|                                      | (d)                                           | R&B Liabilities                                             |   |
|                                      | (e)                                           | Product Liability                                               |   |
|                                      | (f)                                           | Retained  Environmental Liabilities of Transferred Subsidiaries |   |
|                                      | (g)                                           | Offsite Disposal                                                |   |
|                                      | (h)                                           | Bulk Sales                                                      |   |
| 11.2                                      | Indemnification  by Purchasing Entities       |                                                            |
|                                      | (a)                                           | Misrepresentation  or Breach of Warranty                        |   |
|                                      | (b)                                           | Breach of Covenant  or Agreement                                |   |
|                                      | (c)                                           | Assumed Liabilities                                             |   |
|                                      | (d)                                           | Operations After Closing                                        |   |
|                                      | (e)                                           | Product Liability                                               |   |
|                                      | (f)                                           | Pension Liabilities                                             |   |
|                                      | (g)                                           | Claims by Continuing  Employees                                 |   |
|                                      | (h)                                           | Performance Bonds                                               |   |
| 11.3                                      | Claims for Reimbursement                      |                                                            |
| 11.4                                      | Defense  and Settlement of Third Party Claims |                                                            |

 

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| 11.5                                       | Resolution of Disputes                                             |                     |
|--------------------------------------------|--------------------------------------------------------------------|--------------------------|
| 11.6                                       | Setoff for Resolved  Claims                                        |                     |
| 11.7                                       | Limitations on  Indemnification                                    |                     |
|                                       | (a)                                                                | Duration                 |   |
|                                       | (b)                                                                | Amount                   |   |
|                                       |                                                               | (i)                      | Basket |   |
|                                       |                                                               | (ii)                     | Cap |   |
|                                       | (c)                                                                | Other Limitations        |   |
|                                       | (d)                                                                | Duty to Mitigate Damages |   |
|                                       | (e)                                                                | No Double Recovery       |   |
|                                       |                                                               |                     |   |   |
| ARTICLE 12.  Miscellaneous Provisions |                                                               |
| 12.1                                       | Public  Statements and Press Releases                              |                     |
| 12.2                                       | Costs and Expenses                                                 |                     |
| 12.3                                       | Amendment and  Modification                                        |                     |
| 12.4                                       | No Assignment                                                      |                     |
| 12.5                                       | Notices                                                            |                     |
|                                       | (a)                                                                | The Selling Entities     |   |
|                                       | (b)                                                                | A Purchasing Entity      |   |
| 12.6                                       | Counterparts and  Facsimile                                        |                     |
| 12.7                                       | Captions                                                           |                     |
| 12.8                                       | Schedules and Exhibits                                             |                     |
| 12.9                                       | Waiver; Remedies                                                   |                     |
| 12.10                                      | Governing Law                                                      |                     |
| 12.11                                      | Severability                                                       |                     |
| 12.12                                      | Survival  of Representations, Warranties, Covenants and Agreements |                     |
| 12.13                                      | No Third Party  Beneficiaries                                      |                     |
| 12.14                                      | Construction                                                       |                     |
| 12.15                                      | Entire Agreement                                                   |                     |

 

vii

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**PURCHASE AND SALE AGREEMENT**

** **

ThisPurchase and Sale Agreement (this “***Agreement***”)is made and entered into on and as of the 17th day of March, 2005 (the “***Agreement Date***”), among UNOVA, Inc.(“***UNOVA***”), a Delaware corporation; UNOVAIndustrial Automation Systems, Inc. (“***UIASI***”), aDelaware corporation and a wholly-owned subsidiary of UNOVA; UNOVA U.K. Limited(“***UNOVA UK***”), a company registered inEngland under Registration Number 1218921 and a wholly-owned subsidiary ofUNOVA; Cincinnati Machine U.K. Limited (“***CMUK***”),a company registered in England under Registration Number 3256777 and a wholly-ownedsubsidiary of UNOVA; Honsberg Lamb Sonderwerkzeugmaschinen GmbH (“***Honsberg***”), a German limitedliability company and a subsidiary of UIASI and UNOVA UK; UNOVA Canada, Inc.(“***UNOVA Canada***”), a Canadiancorporation and an indirect, wholly-owned subsidiary of UNOVA; and UNOVA IPCorp. (“***UNOVA IP***”), a Delawarecorporation and a wholly-owned subsidiary of UIASI; (UNOVA, UIASI, UNOVA UK,CMUK, Honsberg, UNOVA Canada and UNOVA IP are referred to collectively as the “***Selling Entities***”); and R&BPlastics Holdings, Inc. (“***Mainco***”), aDelaware corporation and a wholly owned subsidiary of Maxcor, Inc. or itsprincipal; MAG Industrial Automation Systems, LLC (“***Purchaser***”),a Delaware limited liability company; and certain other wholly ownedsubsidiaries of Purchaser that may be formed for purposes of the transactionshereunder and which shall execute a document after formation agreeing to becomea party to this Agreement(collectively, the “***PurchaserSubsidiaries***”).  Mainco,Purchaser and the Purchaser Subsidiaries are sometimes referred to collectivelyas the “***Purchasing Entities***”.  To the extent that any Purchasing Entity ispurchasing Purchased Assets under Section 1 of this Agreement, suchPurchasing Entity is also referred to herein as an “***AssetPurchasing Entity***”.  Eachof the Selling Entities and each of the Purchasing Entities are sometimesreferred to collectively as the “***Parties***”and individually as a “***Party***.”

 

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

** **

WHEREAS,“***Cincinnati Lamb Group***” is comprisedof the following:  the Cincinnati Lamboperations of UIASI (the “***Cincinnati Lamb U.Sdivision***”); the Lamb Technicon U.K. operations of UNOVA UK(the “***Lamb U.K. division***”); theCincinnati Lamb Windsor operations of UNOVA Canada (the “***CincinnatiLamb Canada division***”); the operations of CMUK; Honsberg;Cincinnati Machine Korea Corp. (“***CM Korea***”),a Korean corporation and a wholly-owned subsidiary of UNOVA; certain assets ofUNOVA IP used primarily or exclusively in connection with the CincinnatiLamb Group’s operations; UNOVA Industries, Inc., a Nevada corporation (“***UII***”); and R&B Machine ToolCompany (“***R&B***”), a Michigancorporation and a wholly-owned subsidiary of UIASI;

 

WHEREAS,CM Korea, UII and R&B are referred to collectively as the “***Transferred Subsidiaries***”;

 

WHEREAS,the Cincinnati Lamb Group is engaged in the design, manufacture, sale andservice of value-added manufacturing products and services spanning theproduction

 

----

 

cycle from process engineering and design to systemsintegration, including comprehensive life cycle support for the globalaerospace, equipment and general job shop markets (such activity as carried onby the Cincinnati Lamb Group on the Agreement Date is referred to as the “***Business***”);

 

WHEREAS,the Purchasing Entities desire to purchase from the Selling Entities, and theSelling Entities desire to sell to the Purchasing Entities, substantially allof the assets, subject to the assumption of specified liabilities of theCincinnati Lamb Group (the “***Asset Sale***”),and the capital stock (collectively, the “***Shares***”) ofthe Transferred Subsidiaries (the “***Stock Sale***”),upon the terms and conditions set forth in this Agreement;

 

WHEREAS,the Asset Sale and the Stock Sale are sometimes referred to collectively hereinas the “***Transactions***”;

 

NOW,THEREFORE, in consideration of the premises and the mutual benefits to bederived from this Agreement and the Transactions provided for in thisAgreement, the Parties agree as follows:

 

# **ARTICLE 1.**The Transactions

# ** **

## **1.1**                               Transferof Assets

## ** **

Exceptas otherwise provided in Section 1.2, effective as of the “***Transfer Date***” (as defined in Article 2),each of the Selling Entities shall sell, transfer, assign, grant, convey anddeliver to the relevant Asset Purchasing Entity, free and clear of all “***Liens***” other than “***Permitted Liens***” (as such terms aredefined in Section 3.5), all of its right, title and interest in and toits properties, rights and assets of every kind, nature and description,whether real or personal, tangible or intangible, and wherever situated, to theextent the same are used or held for use primarily or exclusively in theoperation of the Business (such properties, rights and assets are referred toas the “***Purchased Assets***”), includingthe goodwill of the Business and the names “Cincinnati Lamb”, “CincinnatiMachine”, and “Honsberg”.  Except asotherwise provided in Section 1.2, the Purchased Assets shall includewithout limitation all of the following to the extent owned by any of theCincinnati Lamb Group other than the Transferred Subsidiaries and used primarilyor exclusively in the Business:

 

(a)                                  Trade and other accounts receivable,including unbilled receivables, together with any unpaid interest or feesaccrued thereon or other amounts due with respect thereto, and any security orcollateral therefor, including recoverable advances and deposits;

 

(b)                                 Land, buildings, leaseholds, leaseholdimprovements and other interests in realty, including without limitation the “***Owned Real Property***” (as defined in Section 3.6(a)),and all improvements, fixtures and fittings thereon, and easements, servitudes,rights-of-way and other appurtenances thereto (such as appurtenant rights inand to public streets);

 

2

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(c)                                  Machinery and equipment, including testequipment and fully depreciated equipment;

 

(d)                                 Tools, dies, molds and other tooling,including any rights in respect of tools, dies, molds and other tooling and inthe possession of others;

 

(e)                                  Supplies and other consumables on hand;

 

(f)                                    Inventory, including raw materials,work-in-process, finished goods, spare parts, replacement and component parts,and samples;

 

(g)                                 Rights, if any, in any customer furnishedmaterials;

 

(h)                                 Motor vehicles;

 

(i)                                     Transportation and packing and deliveryequipment, materials and supplies;

 

(j)                                     Office equipment and supplies;

 

(k)                                  Office furniture and furnishings;

 

(l)                                     To the extent possible under the terms andconditions thereof, indemnity, fidelity and contract bonds issued by thirdparties in favor of any of the Cincinnati Lamb Group other than the TransferredSubsidiaries;

 

(m)                               Causes of action, suits, judgments, claimsand demands of any nature;

 

(n)                                 Transferable franchises, licenses, approvals,permits and other authorizations issued or granted by any “***GovernmentalBody***” (as defined in Section 3.1(e));

 

(o)                                 Computer equipment, including all hardwareand software, and communications equipment;

 

(p)                                 Research, engineering and technical designs,specifications, drawings, databases, know-how, research and development files,laboratory books and information;

 

(q)                                 Customer and vendor lists and information;

 

(r)                                    Patents, registered designs, utility models, patentapplications, trademarks, trademark applications, trade names, internetdomains, service marks, logos, copyrights, chip registrations, patents,licenses, processes, inventions, formulae, trade secrets and royalties,including all registrations, applications and related international priorityrights and all rights to sue for past infringement;

 

(s)                                  Manufacturer and seller warranties on anygoods, fixtures, or services provided to any of the Cincinnati Lamb Group otherthan the Transferred Subsidiaries;

 

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(t)                                    Prepaid items and expenses, rights of offsetand credits of all kinds, including any such items and expenses with respect toleases and rentals;

 

(u)                                 Books, records, files and papers, whether inhard copy or computer format, including but not limited to invoices,advertising materials, catalogs, price lists, mailing lists, photographs,production data, sale and promotional materials and records, purchasingmaterials and records and documentation developed or used for accounting,marketing, engineering, manufacturing or any other purpose;

 

(v)                                 Bids and sales and service proposals,including any rights to revoke or withdraw the same;

 

(w)                               Purchase orders and purchase commitments;

 

(x)                                   Utility and similar deposits;

 

(y)                                 Customer orders and customer contracts;

 

(z)                                   Medical, safety and health supplies;

 

(aa)                            Leases for equipment and all other leases,contracts and other agreements made on behalf of any of the Cincinnati LambGroup other than the Transferred Subsidiaries or which inure primarily to theCincinnati Lamb Group’s benefit; and

 

(bb)                          Rights and entitlements.

 

TheParties acknowledge and agree that, as soon as practicable after the date ofthis Agreement, and in any event not less than ten business days prior to theTransfer Date, Purchaser shall provide UNOVA with (i) a proposed list ofthe Purchasing Entities that will be purchasing Purchased Assets and assumingAssumed Liabilities at Closing, and (ii) the respective Purchased Assetsto be purchased and Assumed Liabilities to be assumed by such PurchasingEntities (the “***Purchasing Entities Schedule***”).  The Purchasing Entities Schedule shallbe subject to the written approval of UNOVA prior to Closing, which approvalshall not be unreasonably withheld.

 

## **1.2**                               ExcludedAssets

## ** **

Notwithstandinganything in this Agreement to the contrary, the Purchased Assets shall notinclude any right, title or interest in or to any of the following properties,rights or assets of the Selling Entities (collectively, the “***Excluded Assets***”):

 

(a)                                  Cash, cash equivalents and short-termsecurities, if any;

 

(b)                                 Any and all claims for refunds, carrybacks orcarryforwards of any of the Selling Entities (but not the TransferredSubsidiaries) in connection with “***Taxes***” (asdefined in Section 3.18) for tax periods ending on or prior to theTransfer Date and all returns and other documents filed by any of the SellingEntities with any taxing authority;

 

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(c)                                  Any intercompany receivable balance due fromUNOVA or any of its subsidiaries (other than intercompany trade receivables);

 

(d)                                 All insurance policies and self-insuranceprograms and any coverage or other rights under such policies andself-insurance programs;

 

(e)                                  Any property or asset designated as “assetsheld for sale” on the books and records of the Selling Entities or theCincinnati Lamb Group (collectively, the “***Assets Held for Sale***”)and any assets related to the former Lamb Body & Assembly and R&BPlastics operations of UIASI (the “***Discontinued Operations***”);

 

(f)                                    Any property, right or asset to the extentprimarily or exclusively relating to any other Excluded Asset or any of the “***Excluded Liabilities***” (as defined inSection 1.7);

 

(g)                                 All assets of all “***EmployeeBenefit Plans***” (as defined in Section 3.13(f)), includingassets held in trust or insurance contracts for the benefit of Employee BenefitPlan participants or beneficiaries, except to the extent provided in Section 1.6(k),Section 5.11 and Section 8.4(b)(v) and except for insurancepolicies and assets relating to any pension plans in Germany;

 

(h)                                 All books, records, files and data pertainingto any of the Excluded Assets or any of the Excluded Liabilities;

 

(i)                                     Subject to Section 8.5, all rights in,to and under the names “UNOVA” or “UNOVA Industrial Automation Systems, Inc.”and the logos of any of the Selling Entities other than those that areprimarily or exclusively related to the Business;

 

(j)                                     UIASI’s interest in The Factory PowerCompany, an Ohio corporation and UNOVA Financing Limited (Reg. No. 4134168),a dormant U.K. corporation;

 

(k)                                  Any rights of any of the Selling Entitiesunder this Agreement;

 

(l)                                     The franchise of each of the Selling Entitiesto be a corporation and its articles or certificate of incorporation, bylawsand other records pertaining to its corporate existence, and all books andrecords of a nature required by “***Law***” (asdefined in Section 3.1(e)) to be maintained by the Selling Entities,including all financial and tax records relating to the Business that form partof the Selling Entities’ general ledger;

 

(m)                               All shares of capital stock or other equityinterests in any other Person (defined below) owned by any of the SellingEntities; *provided, however,* that the stock of theTransferred Subsidiaries will be transferred under Section 1.3; and

 

(n)                                 All right to any proceeds in the Aleniajudgment, which is disclosed on **Schedule 1.2(n)**.

 

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Forpurposes of this Agreement, “***Person***”shall mean and include an individual, a partnership, a corporation, a limitedliability company, a trust, a joint venture, an unincorporated organization andany “***Governmental Body***” (as defined in Section 3.1(e)).

 

## **1.3**                               Transfersof Shares

## ** **

### **(a)**                                  Transfer of CMKorea Shares

### ** **

Effectiveas of the Transfer Date, UNOVA shall sell, transfer, assign and deliver toPurchaser, free and clear of all Liens, all of the outstanding capital stock ofCM Korea (the “***CM Korea Shares***”).

 

### **(b)**                                  Transfer of UII Shares

### ** **

Effectiveas of the Transfer Date, UNOVA shall sell, transfer, assign and deliver toPurchaser, free and clear of all Liens, all of the outstanding capital stock ofUII (the “***UII Shares***”)

 

### **(c)**                                  Transfer of R&B Shares

### ** **

Effectiveas of the Transfer Date, UIASI shall sell, transfer, assign and deliver toMainco, free and clear of all Liens, all of the outstanding capital stock ofR&B (the “***R&B Shares***”).

 

## **1.4**                               Consideration

## ** **

Forand in consideration of the sale to the Purchasing Entities of the PurchasedAssets and the Shares, (i) Purchaser (as agent for the PurchasingEntities) shall on the dates indicated in Section 1.5, pay to UNOVA (asagent for the Selling Entities) the “***Purchase Price***”(as defined in Section 1.5(a)), in accordance with and to the extentprovided in Section 1.5, and (ii) the Asset Purchasing Entitiesshall, effective as of the Transfer Date, assume the “***AssumedLiabilities***” (as defined in Section 1.6 and as limited by Section 1.7)((i) and (ii), collectively, the “***Consideration***”).

 

## **1.5**                               PurchasePrice and Payment

## ** **

### **(a)**                                  Purchase Price

### ** **

Thepurchase price for the Purchased Assets and the Shares is $26,000,000, plus theamount of the Assumed Liabilities (the “***Purchase Price***”),subject to adjustment as provided in Section 1.8(e).

 

### **(b)**                                  Payment ofPurchase Price

### ** **

Atthe “***Closing***” (as defined in Section 2.1),(i) Mainco shall pay and remit to UNOVA (as agent for UIASI) $5,000 (the “***R&B Cash Payment***”), and (ii) Purchasershall

 

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(A) pay and remit to UNOVA (as agent for theSelling Entities) the “***Cash Payment***”(as provided in paragraph (i) below), and (B) execute anddeliver to UNOVA (as agent for the Selling Entities) the Secured Note (asprovided in paragraph (ii) below).

 

#### **(i)**                                    Cash Payment

#### ** **

The“***Cash Payment***” is the amount of $16,000,000,which (together with the R&B Cash Payment) will be paid by wire transfer ofimmediately available funds to UNOVA’s bank account as indicated in Schedule 1.5(b)(i) **Schedule 1.5(b)(i)**.

 

#### **(ii)**                                Secured Note

#### ** **

The“***Secured Note***” is Purchaser’s securedpromissory note in the principal amount of $10,000,000 .  The Secured Note shall bear interest at therate of quarterly LIBOR + 3% on the outstanding balance of the Secured Note,payable quarterly, with “***LIBOR***”defined in the same manner as in the credit agreement between the Purchaser andits senior lender entered into in connection with the transactions contemplatedby this Agreement.  Principal of theSecured Note shall be payable in the following installments:  (i) $2,000,000 on the 18-monthanniversary of the Transfer Date, (ii) $2,000,000 on the 24-monthanniversary of the Transfer Date, (iii) $2,000,000 on the 30-monthanniversary of the Transfer Date, (iv) $2,000,000 on the 36-monthanniversary of the Transfer Date, and (v) the balance of $2,000,000 on the42-month anniversary of the Transfer Date.  The Secured Note shall be secured by a secondpriority security interest in the assets of the Cincinnati Lamb Group which areincluded within the lien granted to the senior lender by Purchaser, until thedate the Secured Note is paid in full (the “***Collateral***”).  Except as provided otherwise in this Section 1.5(b)(ii) oras consented to in writing by UNOVA, which consent will not be unreasonablywithheld, the Secured Note and related financing documents between thePurchasing Entities and the Selling Entities will reflect terms and conditionsand subordination provisions substantially similar to those between thePurchasing Entities and their senior lender as contemplated by the term sheetattached to this Agreement as **Exhibit A.**

 

### **(c)**                                  Allocation ofConsideration

### ** **

### **(i)**                                    Section 1060Allocation

### ** **

Withinsix (6) months after the Transfer Date, Purchaser (on behalf of itself andthe other Purchasing Entities) shall prepare and deliver to UNOVA an allocationof the Consideration among each of the Purchased Assets and the Shares (otherthan the R&B Shares) sold to the Purchasing Entities (the “***Allocation***”) and an allocation ofthat portion of the Purchase Price which is allocated among the Purchased Assetsin accordance with the Allocation and Section 1060 of the Code and theregulations thereunder (the “***Section 1060Allocation***”); *provided*, *however*, that the Parties agree that the amount to beallocated to the transfer of CM Korea Shares is $122,000.  If UNOVA does not object to the Allocationand the Section 1060 Allocation prepared by Purchaser within 30 daysafter receipt thereof, such allocations shall be final for purposes of thisAgreement.  If UNOVA objects to the

 

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Allocation or the Section 1060 Allocation within 30 daysafter receipt thereof, Purchaser and UNOVA shall meet promptly and in goodfaith attempt to resolve any objections of UNOVA and to use their best effortsto agree upon the allocation.  In theevent Purchaser and UNOVA are unable to resolve their differences over theAllocation or the Section 1060 Allocation, such differences shall beresolved by arbitration in accordance with Section 11.5.  The Parties shall cooperate fully with eachother and make available to each other such Tax data and other information asmay be reasonably required in order to timely complete the Allocation and the Section 1060Allocation and any other required statements or schedules.  Except as required pursuant to applicable Lawor a determination (as defined in Section 1313 of the Internal RevenueCode of 1986, as amended (the “***Code***”) orany similar provision of Law), the Parties and their Affiliates (as definedbelow) shall report the Transactions for all Tax purposes consistently with theAllocation and the Section 1060 Allocation.  For purposes of this Agreement, “***Affiliate***” means a Person that,directly or indirectly, through one or more intermediaries, controls, iscontrolled by or is under common control with the first mentioned Person.  To the extent that the parties requireallocations for Closing, including for the United Kingdom and for Korean SecuritiesTransaction Tax (“***STT***”), then the parties shallendeavor to cooperate fully with each other to agree upon such allocations onor prior to the Transfer Date.

 

### **(ii)**                                Section 338Allocation

### ** **

Within six (6) months after the Transfer Date, UNOVA shall (onbehalf of itself and UIASI) prepare and deliver to Mainco an allocation of thedeemed sale price of the assets of R&B resulting from any “***Section 338(h)(10) Election***”(as defined in Section 8.7(h)) (the “***Section 338Allocation***”) in accordance with the Section 338 of the Codeand any similar provision of Law, as applicable.  If Mainco does not object to the Section 338Allocation prepared by UNOVA within 30 days after receipt thereof, suchallocation shall be final for purposes of this Agreement.  If Mainco objects to the Section 338Allocation within 30 days after receipt thereof, UNOVA and Mainco shallmeet promptly and in good faith attempt to resolve any objections of Mainco andto use their best efforts to agree upon the allocation.  In the event UNOVA and Mainco are unable toresolve their differences over the Section 338 Allocation, suchdifferences shall be resolved by arbitration in accordance with Section 11.5.  The parties shall cooperate fully with eachother and make available to each other such Tax data and other information asmay be reasonably required in order to timely complete the Section 338Allocation and file any Section 338(h)(10) Elections and any otherrequired statements or schedules.  Exceptas required pursuant to applicable Law or a determination (as defined in Section 1313of the Code or any similar provision of Law), the Selling Entities, Mainco andtheir respective Affiliates shall report the sale of the R&B Shares for allTax purposes consistently with the Section 338 Allocation.

 

### **(iii)**                            Section 56.4 Election

### ** **

UNOVACanada and Purchaser, on behalf of the relevant Purchasing Entity or PurchasingEntities, shall execute and file, on a timely basis and using the prescribedforms, a joint election to have proposed paragraphs 56.4(3)(b) and (c) (orsuch similar provision as

 

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finally enacted), as applicable, of the Income Tax Act (Canada) applyto the amount of the Purchase Price attributable to the non-competitioncovenant provided with respect to the Business attributable to Canadianoperations and shall prepare their respective Tax Returns (as defined in Section 3.18)consistent with such joint election.  Forthe purposes of such joint election, the amount of the Purchase Price attributableto such non-competition covenant will be consistent with the Purchase Priceallocation determined in accordance with this Agreement. The Parties agree, onbehalf of themselves and their Affiliates, to file all Canadian Tax Returnsconsistent with the portion of the Purchase Price allocated to thenon-competition covenant.  On or prior tothe date the joint election is required to be filed, the Parties will confirmthat the amount that will be allocated to the non-competition covenant will bethe portion of the Purchase Price paid that can reasonably be regarded asconsideration for the non-competition covenant.

 

### **(iv)**                               Section 167 Election

### ** **

UNOVACanada or its successor and Purchaser, on behalf of the relevant PurchasingEnity or Purchasing Entities, shall execute and file, on a timely basis andusing the prescribed form, a joint election under Section 167 of theExcise Tax Act (Canada) (the “***ETA***”)) sothat no tax will be payable under the ETA in respect of the transfer of thePurchased Assets.

 

### **(v)**                                   Section 22 Election

### ** **

UNOVACanada and Purchaser, on behalf of the relevant Purchasing Entity or PurchasingEntities, shall execute and file, on a timely basis and using the prescribedform, a joint election under section 22 of the Income Tax Act (Canada) asto the sale of the accounts receivable of UNOVA Canada to be purchased under thisAgreement, and prepare their respective Tax Returns (as defined in Section 3.18)in a manner consistent with such joint election.  For purposes of such joint election, the electedamount in respect of the accounts receivable will be consistent with thePurchase Price allocation, as determined by the Parties prior to the filing ofthe joint election.

 

## **1.6**                               AssumedLiabilities

## ** **

Uponthe terms and subject to the conditions of this Agreement and in reliance uponthe representations, warranties and agreements herein set forth, each of the AssetPurchasing Entities shall, effective at the time of Closing, assume, performand discharge all of the following debts, liabilities or obligations (otherthan the “***Excluded Liabilities***” (asdefined in Section 1.7)) that relate to the Business or the PurchasedAssets, whether occurring prior to, on or after the Transfer Date(collectively, the “***Assumed Liabilities***”):

 

(a)                                  All obligations of the Selling Entities inrespect of the Business to be performed from and after the Transfer Date andall other debts and liabilities of the Selling Entities in respect of theBusiness under contracts or other legally binding commitments that aredisclosed in the Schedules to this Agreement or which are of the type requiredto be disclosed in such Schedules but are not so disclosed because they fallbelow the minimum

 

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threshold amount or materiality of the agreements orcommitments required to be so disclosed and which are assigned to Purchaser;

 

(b)                                 Trade accounts payable in respect of theBusiness as shown on the Closing Balance Sheet;

 

(c)                                  Accrued payroll, bonuses and related itemsfor the “***Continuing Employees***” (asdefined in Section 8.4(a)) as shown on the Closing Balance Sheet,excluding any accrued amounts that are required by Law to be paid by any of theSelling Entities on or prior to the Transfer Date;

 

(d)                                 Accrued sales commissions to ContinuingEmployees or to third parties in respect of the Business as shown on theClosing Balance Sheet;

 

(e)                                  All debts, liabilities and obligations withrespect to products sold or serviced (whether or not under warranty) by theSelling Entities in respect of the Business, including liabilities andobligations for and with respect to any refunds, adjustments, allowances,repairs, exchanges, returns and warranty, but excluding Product Liability (asdefined herein) which is covered by sub clause (g) below;

 

(f)                                    Any debt, liability or obligation for workerscompensation, automobile or general liability in respect of the Business, tothe extent such claims arise from occurrences following the Transfer Date;

 

(g)                                 Any debt, liability or obligation for productliability claims, including bodily injury, death or property damage (“***Product Liability***”) arising from theuse or operation of products sold or serviced in the Business, to the extentsuch claims arise out of injuries which occur following the Transfer Date;

 

(h)                                 All debts, liabilities and obligationsarising under “***Environmental Laws***” (asdefined in Section 3.6 (d)) and in respect of the Business and thePurchased Assets, except to the extent the same constitutes a “***Retained Environmental Liability***”(as defined in Section 1.7(e));

 

(i)                                     Any debt, liability or obligation arising outof, or in respect of or as a result of the employment or termination ofemployment of any Continuing Employee on or after the Transfer Date (other thanthe “***Litigation Required Employees***” (asdefined in Section 8.3));

 

(j)                                     Those certain debts, liabilities orobligations set forth on **Exhibit B**;

 

(k)                                  Any debt, liability or obligation relating tothe “***CMUK Plan***” (as defined in Section 8.4(b)(v)),the “***CMUK Supplementary Plan***” (as definedin Section 8.4(b)(v)) and “***CMUK DC Plan***”(as defined in Section 5.11); and

 

(l)                                     All debts, liabilities and obligations forpost-retirement matters included in the Closing Balance Sheet that constituteFAS 106 liabilities (“***FAS 106 Liabilities***”).

 

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## **1.7**                               ExcludedLiabilities

## ** **

Notwithstandinganything in this Agreement to the contrary, none of the Asset PurchasingEntities shall assume or be liable or responsible for, and the Selling Entitiesshall retain, pay, perform and discharge when due all the following debts,liabilities or obligations of the Selling Entities, whether or not arising outof or relating to the Purchased Assets or the operation of the Business priorto the Transfer Date (collectively, the “***Excluded Liabilities***”):

 

(a)                                  Any debt, liability or obligation of theSelling Entities in respect of the Business for Taxes that relate to periodsending on or prior to the Transfer Date, except as otherwise provided in Section 8.7(e);

 

(b)                                 Any intercompany payable balances in respectof the Business due to UNOVA or any of its subsidiaries (other thanintercompany trade payables);

 

(c)                                  Any debt, liability or obligation covered byany of the insurance policies or self-insurance programs of the SellingEntities in respect of the Business, including liabilities for workerscompensation, automobile or general liability, to the extent such claims arisefrom occurrences on or prior to the Transfer Date;

 

(d)                                 Any debt, liability or obligation for ProductLiability arising from the use or operation of products sold or serviced in theBusiness, to the extent such claims arise out of losses or injuries whichoccurred on or prior to the Transfer Date;

 

(e)                                  Any “***Retained EnvironmentalLiability***” which for purposes of this Agreement shall mean (i) any“***Loss***” (as defined in Section 11.1)arising from a claim by a third party, including a Governmental Body, thatrelates to any matter or condition that constitutes, or is demonstrated to haveconstituted, a violation of any applicable Environmental Law as in effect onthe Transfer Date and listed on **Schedule 3.6(d)**,and (ii) any Loss arising from a condition or event at, on or under theReal Property which occurred on or prior to the Transfer Date, including thepresence or release of any “***Hazardous Substance***”(as defined in Section 3.6(d)), to the extent that such condition isdelineated during the “***Phase I” or “Phase II***”(as such terms are defined in Section 5.8), whether or not known on orprior to the Transfer Date;

 

(f)                                    Any debt, liability or obligation arisingunder any of the Employee Benefit Plans, except to the extent provided inSections 1.6(k), 1.6(l), 5.11 and 8.4 and except for liabilitiestransferred to the “***CMUK DC Plan***” (as defined in Section 5.11);

 

(g)                                 Any debt, liability or obligation related to DiscontinuedOperations;

 

(h)                                 Any debt, liability or obligation to theextent related to any of the other Excluded Liabilities or any of the ExcludedAssets;

 

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(i)                                     Those pending or threatened litigationmatters identified on Schedule 3.14 (the “***RetainedLitigation***”) and any matter identified on Schedule 3.16;

 

(j)                                     Any liabilities of the Selling Entities ofany kind or nature arising under, or relating to the execution, delivery orconsummation of, this Agreement and the transactions contemplated hereby;

 

(k)                                  Any liabilities of the Selling Entities forindebtedness for borrowed money;

 

(l)                                     Any debt, liability or obligation under theUNOVA Supplemental Executive Retirement Plan;

 

(m)                               Any debt, liability or obligation under the “***UPF***” (as defined in Section 5.11,other than any debt, liability or obligation which becomes a debt, liability orobligation of the CMUK DC Plan as a result of the transactions contemplated by Section 5.11);and

 

(n)                                 Any debt, liability or obligation foremployees who are not Continuing Employees except as provided in Sections1.6(k), 1.6(l), 5.11 and 8.4(e).

 

## **1.8**                               ClosingBalance Sheet

## ** **

The“***Closing Balance Sheet***” shall be abalance sheet of the Purchased Assets, Assumed Liabilities and the assets andliabilities of the Transferred Subsidiaries as of the Transfer Date, preparedwithout any departures from generally accepted accounting principles in theUnited States of America (“***GAAP***”),consistently applied, and determined as provided in this Section 1.8.

 

### **(a)**                                  Cincinnati LambGroup December Balance Sheets

### ** **

Priorto Closing, UNOVA and Purchaser shall agree on the procedures to be taken byUNOVA’s independent certified accounting firm (the “***DeloitteProcedures***”), and UNOVA shall cause such accounting firm toperform the Deloitte Procedures with respect to the balance sheet accounts ofthe Cincinnati Lamb Group contained within the UNOVA audited consolidatedbalance sheet as of December 31, 2004 in accordance with GAAP, consistentlyapplied.  A balance sheet of suchaccounts of the Cincinnati Lamb Group after the Deloitte Procedures are soperformed is referred to as “***Cincinnati Lamb Group December BalanceSheet***.”  Prior to theTransfer Date, UNOVA shall deliver to Purchaser (i) the Cincinnati LambGroup December Balance Sheet, and (ii) a balance sheet of thePurchased Assets, Assumed Liabilities and the assets and liabilities of theTransferred Subsidiaries as of December 31, 2004 (the “***Adjusted December Balance Sheet***”)based on the Cincinnati Lamb Group December Balance Sheet and theadjustments (the “***Agreement Adjustments***”) thatare required to exclude the Excluded Assets and Excluded Liabilities andreflect any other adjustments provided for in this Agreement.

 

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### **(b)**                                  PreliminaryClosing Balance Sheet

### ** **

Within45 days following the Transfer Date, UNOVA shall prepare and deliver to Purchasera balance sheet of the Purchased Assets, Assumed Liabilities and the assets andliabilities of the Transferred Subsidiaries as of the Transfer Date (the “***Preliminary Closing Balance Sheet***”)based on a roll-forward of the Adjusted December Balance Sheet to theTransfer Date in accordance with GAAP.

 

### **(c)**                                  Review ofPreliminary Closing Balance Sheet

### ** **

Purchasershall have 45 days following its receipt of the Preliminary ClosingBalance Sheet (the “***Review Period***”) to review thesame for compliance with GAAP and the Agreement Adjustments.  On or before the expiration of the ReviewPeriod, Purchaser shall deliver to UNOVA a written statement accepting orobjecting to the Preliminary Closing Balance Sheet.  In the event that Purchaser shall object tothe Preliminary Closing Balance Sheet, such statement (the “***Statement of Objections***”) shallinclude a detailed itemization of Purchaser’s objections and the reasonstherefor.  If Purchaser does not deliverto UNOVA the Statement of Objections within the Review Period, Purchaser shallbe deemed to have accepted the Preliminary Closing Balance Sheet.  If Purchaser delivers to UNOVA the Statementof Objections within the Review Period, Purchaser shall be deemed to havewaived any objections to the Preliminary Closing Balance Sheet that are notincluded in the Statement of Objections.

 

### **(d)**                                  Finalization ofClosing Balance Sheet

### ** **

Inthe event that Purchaser shall accept or shall be deemed to have accepted thePreliminary Closing Balance Sheet as prepared and delivered by UNOVA, thePreliminary Closing Balance Sheet shall constitute the Closing Balance Sheetfor purposes of this Agreement.  In theevent, however, that Purchaser shall object to the Preliminary Closing BalanceSheet, UNOVA and Purchaser shall promptly meet and in good faith attempt toresolve the issues that are in dispute. In the event that the issues in dispute shall not have been resolvedwithin 30 days following UNOVA’s receipt of Purchaser’s Statement ofObjections, such disputed issues shall be resolved by an independent certifiedaccounting firm jointly selected by UNOVA and Purchaser (the “***Independent Firm***”), provided theParties shall attempt to reach a final resolution of any matters which remainin dispute at the earliest practicable date. The costs and expenses of the Independent Firm in reviewing the issuesin dispute shall be borne fifty percent (50%) by Purchaser and fifty percent(50%) by UNOVA.  The Preliminary ClosingBalance Sheet, as adjusted to reflect the adjustments agreed upon by suchParties or determined by the Independent Firm, shall constitute the ClosingBalance Sheet for purposes of this Agreement.

 

### **(e)**                                  Net Working Assets

### ** **

Ifthe net working assets as shown on the Closing Balance Sheet are greater than $130,500,000,then the Secured Note will be increased by an amount equal to 30% of such difference,with such increased amount to be added to the principal of the Secured Note and

 

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payable forty-two months after the TransferDate.  As used herein, net working assetsshall mean, as of the Transfer Date, the excess of the inventory andreceivables over the accounts payable on the Closing Balance Sheet.

 

## **1.9**                               Rightto Contest

## ** **

Theassumption and agreement by the Asset Purchasing Entities to pay, perform anddischarge the Assumed Liabilities shall not prohibit the Asset Purchasing Entitiesfrom contesting with a third party, in good faith and at the expense of theAsset Purchasing Entities, the amount, validity or enforceability of anythereof;*provided, however,* that theAsset Purchasing Entities shall indemnify the Selling Entities for any Lossarising from such contest.

 

## **1.10**                        NonassignableContracts and Rights

## ** **

Tothe extent that the assignment by any of the Selling Entities of any contract,property, right or asset to be assigned to any Asset Purchasing Entity pursuantto this Agreement shall require the consent or approval of any other party, andsuch consent or approval shall not have been obtained on or prior to theTransfer Date, this Agreement shall not constitute a contract to assign thesame if an attempted assignment would constitute a breach thereof or would inany way adversely affect the rights of any of the Selling Entities (or anyAsset Purchasing Entity, as assignee) thereunder.  If any such consent or approval is requiredbut not obtained on or prior to the Transfer Date, the Parties covenant andagree that in such case, the applicable Selling Entities shall continue to dealwith the other contracting party or parties, with the benefits of suchcontract, property, right or asset after the Transfer Date accruing to the benefitof the applicable Asset Purchasing Entity and the liabilities and obligationsthereunder being performed by the applicable Asset Purchasing Entity on suchSelling Entities’ behalf; such Selling Entities shall hold all moneys receivedthereunder for the benefit of the applicable Asset Purchasing Entity and shallpay the same to Purchaser when received; and the Parties shall use allreasonable efforts without payment of any penalty or fee to obtain and secureany and all consents and approvals that may be necessary to effect the validsale, transfer or assignment of the same to the applicable Asset PurchasingEntity without change in any of the material terms or conditions thereof,including without limitation the formal assignment or novation of any of thesame, if so required.  The Partiesfurther covenant and agree to make or complete such transfers as soon asreasonably possible and to cooperate with each other in any other reasonablearrangement designed to provide for the applicable Asset Purchasing Entity thebenefits of and to such properties, rights or assets and to provide for theperformance by the applicable Asset Purchasing Entity of the liabilities andobligations related thereto.

 

## **1.11**                        Powerof Attorney

## ** **

Effectiveas of the Transfer Date, the applicable Selling Entities hereby irrevocably andunconditionally constitute and appoint Purchaser (and its successors andpermitted assigns) the true and lawful attorneys of such Selling Entities inrespect of the Business with

 

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full power of substitution on behalf of and for thebenefit of Purchaser and at the expense of Purchaser, for and in the name orotherwise on behalf of such Selling Entities, (a) to collect for theaccount of Purchaser all items hereby transferred to Purchaser (including thepower to endorse checks and other instruments in connection therewith), (b) toinstitute and prosecute, in the name of such Selling Entities, Purchaser orotherwise, and at the expense of Purchaser, all proceedings which Purchaser maydeem necessary or proper in order to collect, assert or enforce any claim,right or title of any kind in or to the Purchased Assets hereby sold,transferred or assigned to Purchaser, and (c) subject to the terms of Article 11,to defend and compromise any and all actions, suits or proceedings in respectof any of the Purchased Assets hereby sold, transferred or assigned toPurchaser.  Each of the Selling Entitiescovenants and agrees that the foregoing powers are coupled with an interest andare and shall be irrevocable by such Selling Entity.  Each of the Selling Entities furthercovenants and agrees that Purchaser shall retain for its own account anyamounts collected pursuant to the foregoing powers, including any sums payableas interest in respect thereof, and the Selling Entities covenant and agree topay or deliver to Purchaser, when received by such Selling Entities, anyamounts or property which may be received by such Selling Entities in respectof any of the Purchased Assets which are to be sold, transferred or assigned toPurchaser pursuant to this Agreement.

 

## **1.12**                        BulkSales

## ** **

Purchaser,on behalf of itself and its Affiliates, hereby waives compliance by the SellingEntities with the bulk sales provisions of the Uniform Commercial Code, theBulk Sales Act (Ontario) or similar statutory scheme; *provided* that such waiver does not asbetween the Purchasing Entities and the Selling Entities relieve the SellingEntities of any debt, liability or obligation to any other person not assumedby a Purchasing Entity under this Agreement. Purchaser further waives compliance by UNOVA Canada of its obligationsunder section 6 of the Retail Sales Tax Act (Ontario), and any equivalentor corresponding provisions contained in any similar legislation of anyCanadian province in which UNOVA Canada carries on business or has a fixedplace of business, in connection with the completion of the transactionsprovided in this Agreement.

 

(Article 2 follows)

 

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# **ARTICLE 2.**Closing and Transfer Date

# ** **

## **2.1**                               Closing

## ** **

Consummationof the purchase and sale of the Purchased Assets and the Shares and the othertransactions provided for in this Agreement (the “***Closing***”)shall take place at the offices of Stroock & Stroock & LavanLLP, counsel for Mainco and Purchaser, located at 180 Maiden Lane, New York,New York, commencing at 8:00 a.m. on April 4, 2005 , or at such otherdate or time or other place as the Parties may mutually agree upon in writing; *provided, however,* that the purchase andsale of the Purchased Assets and the Shares and all other transactions providedin this Agreement shall be deemed to have occurred simultaneously and shall beeffective at 11:59 p.m. (Eastern time) on April 3, 2005, or at such otherdate or time as the Parties may mutually agree upon in writing (such date, the “***Transfer Date***”).

 

## **2.2**                               Noticeand Right to Cure

## ** **

Atall times prior to the Transfer Date, the Parties shall promptly notify eachother of the existence of any condition or the occurrence of any event whichwill or is likely to result in the failure to satisfy any one or more of theconditions set forth in Articles 6 and 7. If any of such conditions shall not have been satisfied or waived on orby the date on which the Closing is otherwise scheduled, then, subject to Section 10.1(b) andprovided that such Party is not in breach of this Agreement, the Party which isunable to meet such condition shall have a reasonable time and a reasonableopportunity (not to exceed seven business days) to extend the Transfer Date inorder to satisfy, at its expense, such condition or conditions.

 

## **2.3**                               Reconciliationof Cash

## ** **

TheParties shall perform a cash reconciliation with respect to the period betweenthe Transfer Date and the Closing (the “***Interim Period***”)in accordance with this Section 2.3. In the event that the total amount of cash receipts obtained by all SellingEntities and Transferred Subsidiaries in respect of the Business during theInterim Period (the “***Cash Receipts***”)is greater or less than the total cash disbursements made by all Selling Entitiesand Transferred Subsidiaries in the aggregate in respect of the Business duringthe Interim Period (the “***Cash Disbursements***”)(the amount of such difference is referred to as the “***CashDifference***”) (a) UNOVA shall pay the Cash Difference toPurchaser (if the Cash Receipts are greater than the Cash Disbursements), or (b) Purchasershall pay the Cash Difference to UNOVA (if the Cash Receipts are less than theCash Disbursements).  On the date ofdelivery of the Preliminary Closing Balance Sheet, UNOVA shall deliver toPurchaser a statement setting forth Seller’s calculation of the Cash Difference(the “***Preliminary Cash Difference***”).  Purchaser shall accept, object to or bedeemed to have accepted the Preliminary Cash Difference at the same time and inthe same manner as it responds to the Preliminary Closing Balance Sheet.  Payment of the Cash Difference shall be madein cash or by wire transfer within 30 days of final determination of the CashDifference.

 

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(Article 3 follows)

 

 

 

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# **ARTICLE 3.**Representations and Warranties of the Selling Entities

# ** **

TheSelling Entities jointly and severally represent and warrant to Mainco andPurchaser as follows:

 

## **3.1**                               CorporateMatters

## ** **

### **(a)**                                  DueOrganization, Good Standing and Qualification

### ** **

Eachof the Selling Entities and the Transferred Subsidiaries is a corporation orlimited liability company duly organized, validly existing and in good standingunder the laws of its jurisdiction of incorporation or formation, as applicable.  Each of the Selling Entities and theTransferred Subsidiaries is qualified to conduct the Business as a foreigncorporation or foreign limited liability company in all jurisdictions where theconduct of the Business or the ownership of its assets in respect of theCincinnati Lamb Group requires qualification, except where the failure to be soqualified would not have a material adverse effect (as defined below) withrespect to the Business.

 

Forpurposes of this Agreement, the terms “***material adverse effect***”or “***material adverse change***” withrespect to the Cincinnati Lamb Group means any circumstance, event, change,violation, failure, inaccuracy, effect or other matter that, individuallyor when taken together with all other circumstances, events, changes,violations, failures, inaccuracies, effects or other matters, ismaterially adverse to (a) the operations of the Business taken as a whole,or (b) the ability of the Selling Entities to timely consummate thetransactions contemplated by this Agreement; and such terms with respect to thePurchasing Entities means any circumstance, event, change, violation, failure,inaccuracy, effect or other matter that, individually or when takentogether with all other circumstances, events, changes, violations,failures, inaccuracies, effects or other matters, is materially adverse to(x) the business, operations or financial condition of the Purchasing Entities,taken as a whole, or (y) the ability of the Purchasing Entities to timelyconsummate the transactions contemplated by this Agreement; provided, however,that in each case, the foregoing definitions exclude the effects of changesthat are generally applicable to (i) the industries and markets in whichthe Business operates, (ii) the United States economy or securitiesor capital markets or (iii) the world economy or securities orcapital markets.  The Parties furtherunderstand and agree that changes in cash flow and net working assets arecommon in the ordinary course of the Business, and as such do not constitute amaterial adverse change or material adverse effect.

 

### **(b)**                                  CorporateAuthority to Conduct Business

### ** **

Eachof the Selling Entities and the Transferred Subsidiaries has the corporatepower and authority to own, lease and operate its properties and assets and tocarry on the portion of the Business attributable to it as it is now beingconducted.

 

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### **(c)**                                  Corporate Powerand Authority to Enter Into Agreements

### ** **

Eachof the Selling Entities has the corporate power and authority to execute anddeliver this Agreement and the other agreements provided for herein (the “***Related Agreements***”) to which it isa party and perform its obligations hereunder and thereunder.

 

### **(d)**                                  Due Executionand Enforceability

### ** **

Theexecution, delivery and performance by and on behalf of each of the SellingEntities of this Agreement and the Related Agreements to which it is a party havebeen duly authorized by all necessary corporate action.  This Agreement constitutes a valid andbinding obligation of each of the Selling Entities, enforceable against each ofthem in accordance with its terms, except to the extent the same may be limitedby bankruptcy, insolvency, reorganization, moratorium or similar laws affectingcreditors’ rights generally or by general equitable principles.  The Related Agreements to which each of theSelling Entities is a party, when executed and delivered by the applicableSelling Entities, will constitute valid and binding obligations of therespective Selling Entities, enforceable against each of them in accordancewith their respective terms, except to the extent the same may be limited bybankruptcy, insolvency, reorganization, moratorium or similar laws affectingcreditors’ rights generally or by general equitable principles.

 

### **(e)**                                  No Conflict

### ** **

With respect to each of the Selling Entities, theexecution and delivery of this Agreement and the Related Agreements to whichsuch Person is a party do not, and the consummation by it of any of thetransactions contemplated hereby or thereby will not:

 

(i) conflict with or violate its certificateof incorporation, bylaws or other constituent documents;

 

(ii) violate any applicable Law (defined below) of anyfederal, state, provincial, local or foreign court or tribunal, government,regulatory body, agency or authority (a “***Governmental Body***”);

 

(iii) violate, conflict with, result in any breach of, or constitute adefault (or an event that, with notice or lapse of time or both, wouldconstitute a default) under any Contract to which it is a party or by which itis bound, except as would not be reasonably likely to have a material adverseeffect on the Business; or

 

(iv) resultin the creation of any Lien on any of the Purchased Assets.

 

For purposes of this Agreement, “***Law***” means any federal, state, provincial, localor foreign Law, code, regulation, rule, order, writ, ordinance, permit,license, injunction, judgment, ruling, policy or decree having the force oflaw, including, without limitation, the Fair Labor Standards Act, theEmployment Standards Act (Ontario), the HSR Act, the Securities Act of 1933, asamended (the “***Securities Act***”), theSecurities Act (Ontario) and

 

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similar applicable Laws in other jurisdictions, allEnvironmental Laws and all permitting and approval requirements and common law.

 

### **(f)**                                    Subsidiariesand Other Equity Investments

### ** **

Exceptas set forth on **Schedule 3.1(f)**, none of theSelling Entities has any subsidiaries (other than the Transferred Subsidiaries)or other equity investments in any corporation, company, partnership, jointventure or other entity relating primarily or exclusively to the Business.  The CM Korea Shares constitute all the issuedand outstanding shares of capital stock of CM Korea.  The R&B Shares constitute all the issuedand outstanding shares of capital stock of R&B.  The UII Shares constitute all the issued andoutstanding shares of capital stock of UII.

 

### **(g)**                                 Articles and By-laws

### ** **

TheSelling Entities have provided Purchaser and Mainco with true, correct andcomplete copies of the articles of incorporation and by-laws (or theirsubstantial equivalents), minute and stock books as amended and in effect, ofeach of the Transferred Subsidiaries.

 

### **(h)**                                 Capitalizationand Shareholders

### ** **

Setforth on **Schedule 3.1(h) **is a list anddescription of the authorized, issued and outstanding capital stock of each ofthe Transferred Subsidiaries, all options or warrants to purchase shares ofcapital stock of the Transferred Subsidiaries, and any securities convertibleinto shares of capital stock of either of the Transferred Subsidiaries.  Also set forth on Schedule 3.1(h) isa list of all holders of shares of capital stock of the TransferredSubsidiaries, options or warrants to purchase shares of capital stock of theTransferred Subsidiaries or securities convertible into shares of capital stockof the Transferred Subsidiaries.  AllShares are duly and validly issued, fully paid, non-assessable and owned ofrecord as set forth on Schedule 3.1(h). On the Transfer Date, there will be no options or warrants to purchaseshares of capital stock of the Transferred Subsidiaries or securitiesconvertible into shares of capital stock of the Transferred Subsidiaries.

 

### **(i)**                                    Amalgamation ofUNOVA Canada

### ** **

UNOVAand UNOVA Canada have informed the Purchasing Entities that following theexecution of this Agreement, they and certain affiliates intend to take the followingactions:  (i) UNOVA will contributeall of the outstanding capital stock of UNOVA Canada to Intermec TechnologiesCorporation (“***Intermec***”), a wholly-ownedsubsidiary of UNOVA, (ii) Intermec will contribute that stock to IntermecTechnologies Canada Ltd. (“***Intermec Canada***”),and (iii)  UNOVA Canada and Intermec Canada will enter into a verticalamalgamation under Canadian law, and the amalgamated corporation will be knownas Intermec Technologies Canada Ltd. (“***New Intermec Canada***”).  This series of actions is referred to as the “***Amalgamation***”.  Immediately following the Amalgamation, NewIntermec Canada will have all properties, rights and assets and all debts,liabilities and

 

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obligations of UNOVA Canada, including itsobligations under this Agreement.  ThePurchasing Entities consent to the Amalgamation.

 

**(j)****                                   ****Residency**

 

AllPurchased Assets located in Canada are owned beneficially and legally by UNOVACanada and not by any other Selling Entity, UNOVA Canada is not and NewIntermec Canada will not be a non-resident of Canada for the purposes of theIncome Tax Act (Canada).

 

**(k)****                               ****Certain Additional Matters**

 

Inrespect of each of UNOVA UK and CMUK:

 

(i)                                     No order has been made or petition presentedor resolution passed for its winding up;

 

(ii)                                  No administrative or other receiver has beenappointed by any person over the whole or any part of its business or assets;and

 

(iii)                               No order has been made or petition presentedfor the appointment of an administrator.

 

## **3.2**                               Financial

## ** **

### **(a)**                                  December Financials

### ** **

Setforth on **Schedule 3.2(a) **is thecombined balance sheet of the Cincinnati Lamb Group as of December 31,2004 (the “***December Balance Sheet***”),as prepared by UNOVA, and the related combined statement of operations for theyear then ended (collectively, the “***December Financials***”).  Except as otherwise disclosed on Schedule 3.2(a),the December Financials have been prepared in conformity with GAAPconsistently applied throughout the periods covered, except as may be indicatedin the notes thereto, and present fairly in all material respects the combinedfinancial position and the combined results of their operations for the yearthen ended, excluding impairment charges and reclassifications required at thecorporate level because of discontinued operations status and excludingallocated costs related to restricted stock and pensions allocated to theCincinnati Lamb Group in UNOVA’s consolidated adjustments.  The Cincinnati Lamb Group has no liabilitiesor obligations (absolute, accrued or contingent) that are not reflected orreserved against in the December Balance Sheet, as prescribed by GAAP andthe Financial Accounting Standards Board, except (i) liabilities orobligations incurred since the date of the December Balance Sheet in theordinary course of business and consistent with past practice, and (ii) asotherwise disclosed in this Agreement.

 

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### **(b)**                                  EventsSubsequent to December Balance Sheet

### ** **

SinceDecember 31, 2004, there has not been any of the following, except asapproved by Purchaser or as otherwise disclosed on **Schedule 3.2(b)**:

 

 (i)                                  Any material damage or destruction (whetheror not covered by insurance) adversely affecting the properties, rights orassets of the Business, taken as a whole, that would reasonably be expected to havea material adverse effect on the Business;

 

(ii)                                  Any sale or other disposition of any capitalasset used in the Business with an original cost in excess of $150,000(excluding any Assets Held for Sale);

 

(iii)                               Except as referred to in this Agreement, anyincrease in the wage, salary, commission or other compensation (other thanincreases granted in the ordinary course of business and consistent with pastpractice) payable or to become payable by any of the Cincinnati Lamb Group toany of the “***Employees***” (as defined in Section 3.13(a)),or any change in any existing, or creation of any new, insurance or other planunder which any of the Cincinnati Lamb Group provides benefits to suchEmployees;

 

(iv)                              Any declaration, setting aside or payment ofany dividend or any distribution with respect to the shares of capital stock ofany Transferred Subsidiary, or any direct or indirect redemption, purchase orother acquisition of any such shares;

 

(v)                                 Any release or waiver by any of theCincinnati Lamb Group of any material claim or right in respect of theBusiness;

 

(vi)                              Any amendment, waiver or forgiveness of anymaterial term of any outstanding equity or debt security of a Transferred Subsidiary;

 

(vii)                           Any change in accounting methods, principlesor practices used by the Business, except insofar as may have been required bya change in GAAP or Law; or

 

(viii)                        Made or changed an election concerning anyTaxes, changed an annual accounting period or adopted or changed any accountingmethod, in either case to the extent such change would materially affect theTaxes of the Purchasers.

 

Furthermore,except as approved by Purchaser or disclosed in**Schedule 3.2(b)**,since December 31, 2004, no Selling Entity nor Transferred Subsidiary, norto the knowledge of the Selling Entities and the Transferred Subsidiaries, noneof the Selling Entities’ nor the Transferred Subsidiaries’ officers, directorsor agents in their representative capacities on behalf of any such entity, has:

 

(viii)                        Paid, discharged or satisfied any materialclaims, liabilities or obligations (absolute, accrued or contingent) owed withrespect to the Business other than the payment, discharge or satisfaction inthe ordinary course of business and consistent with past practice of claims,liabilities and obligations reflected or reserved against in the Financial

 

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Statements, or prepaid any material obligation owed with respect to theBusiness having a fixed maturity of more than ninety (90) days from thedate such obligation was issued or incurred;

 

(ix)                                Permitted or allowed any of the PurchasedAssets or any of the material property or assets (real, personal or mixed,tangible or intangible) of the Transferred Subsidiaries to be subjected to anyLien except Permitted Liens or Liens that will be released prior to theTransfer Date;

 

(x)                                   Sold, transferred or otherwise disposed ofany of the Purchased Assets or the material properties or assets (real,personal or mixed, tangible or intangible) of the Transferred Subsidiaries withan aggregate net book value in excess of $100,000, except the sale of inventoryin the ordinary course of business;

 

(xi)                                Disposed of or permitted to lapse any rightsto the use of any material trademark, trade name, patent or copyright currentlyused exclusively in the conduct of the Business, or disposed of or disclosed toany Person (other than representatives of Purchasing Entities or any otherPerson subject to a confidentiality agreement or non-disclosure obligation) anymaterial trade secret, formula, process or know-how not theretofore a matter ofpublic knowledge, which was used primarily or exclusively in the conduct of theBusiness;

 

(xii)                             Made any single capital expenditure orcommitment in excess of $150,000 for additions to property, plant, equipment orintangible capital assets of the Business or made aggregate capitalexpenditures in excess of $750,000 for additions to property, plant, equipmentor intangible capital assets of the Business;

 

(xiii)                          Accelerated the collection of any of its accountsreceivable or deferred the payment of any of its accounts payable outside ofthe ordinary course of the Business; or

 

(xiv)                         Agreed, whether in writing or otherwise, totake any action described in this Section 3.2(b).

 

### **(c)**                                  Indebtedness

### ** **

Setforth on **Schedule 3.2(c) **is a list anddescription of all notes, loan agreements and other instruments pursuant towhich any the Selling Entities in respect of the Business is obligated forborrowed moneys (other than customary trade payables incurred in the ordinarycourse of business) and the outstanding balance of principal and interestthereunder as of the date indicated.

 

## **3.3**                               AccountsReceivable

## ** **

### **(a)**                                  December BalanceSheet

### ** **

Asof the date of this Agreement, all accounts, notes and drafts receivable(including unbilled receivables) of the Business reflected in the December BalanceSheet are bona fide,

 

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represent transactions actually made in the ordinarycourse of business and, to the knowledge of the Selling Entities, arecollectible in the ordinary course of business, except to the extent of thereserve for uncollectible accounts provided for in the December BalanceSheet.

 

### **(b)**                                  Closing BalanceSheet

### ** **

Asof the Transfer Date, all accounts, notes and drafts receivable (includingunbilled receivables) of the Business reflected in the Closing Balance Sheetwill be bona fide, represent transactions actually made in the ordinary courseof business and, to the knowledge of the Selling Entities, be collectible inthe ordinary course of business, except to the extent of the reserve foruncollectible accounts provided for in the Closing Balance Sheet.

 

## **3.4**                               Inventories

## ** **

Allitems of inventory reflected in the Closing Balance Sheet or as currently ownedby the Selling Entities or Transferred Subsidiaries primarily or exclusivelyfor use in the operation of the Business (a) have been valued inaccordance with the inventory valuation policy of the Business set forth on **Schedule 3.4**, and (b) are of a quality andquantity usable and salable with respect to such inventory valuation policy.

 

## **3.5**                               Absenceof Liens and Encumbrances

## ** **

Forpurposes of this Agreement, a “***Lien***” shallmean any lien, encumbrance, mortgage, pledge, hypothecation, charge, or othersecurity interest in favor of any third party, other than defects, easements,encroachments and encumbrances that do not, individually or in the aggregate,materially impair value or continued use as currently conducted of the propertyto which they relate.  “***Permitted Lien***” shall mean,collectively, any (i) Liens for Taxes, assessments or governmental chargesor levies not yet due or being contested in good faith and any Liens for Taxesdisclosed on **Schedule 3.18**,****(ii) statutory Liens of carriers, warehousemen,mechanics, materialmen and the like arising in the ordinary course of businessthat do not impair in any material respect the conduct of the Business or theuse of any of the Purchased Assets or the assets of the TransferredSubsidiaries in the manner currently conducted or used, (iii) easements,restrictive covenants, rights of way and other similar restrictions of record, (iv) zoning,building and other similar restrictions, (v) easements, encumbrances,encroachments and other minor imperfections of title that do not impair in anymaterial respect the continued conduct of the Business or the continued use ofany of the Purchased Assets or the assets of the Transferred Subsidiaries inthe manner currently conducted or used, (vi)  in the case of leasedproperty, all matters, whether or not of record, affecting the title of thelessor (and any underlying lessor) of the leased property, (vii) any Liencaused by a Purchasing Entity in connection with this Agreement, (viii) otherLiens set forth on **Schedule 3.5**,(ix) Liens relating to deposits made in the ordinary course of business inconnection with workers’ compensation, employment insurance and other types ofsocial security, (x) Liens to secure the performance of leases, tradecontracts or other similar agreements and securing executory obligations underany lease that constitutes an “operating lease” under GAAP, and (xi) Liensto secure payment obligations in connection

 

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with purchased property in the ordinary course ofbusiness.  Except as set forth on **Schedule 3.5**, each of the applicable Selling Entitieshas good and marketable title to or, in the case of leased properties andassets, valid leasehold interest in, all of the Purchased Assets, and eachTransferred Subsidiary has good title to, or in the case of leased propertiesand assets, valid leasehold interest in, all of the material assets of suchTransferred Subsidiary used exclusively in the Business, in each case free andclear of all Liens other than Permitted Liens. The Selling Entities and Transferred Subsidiaries own all of the assetsused by them in the operation and conduct of the Business, or required by themfor the normal conduct of the Business, except for those assets leased by themunder leases specifically identified on **Schedule 3.6(b) **hereto.  Except for the assets owned by theTransferred Subsidiaries and the Excluded Assets, the Purchased Assetsconstitute all of the assets used in, related to or required for the normalconduct of the Business and of the Cincinnati Lamb Group.

 

## **3.6**                               RealProperty.

## ** **

### **(a)**                                  Real Property

### ** **

Setforth on **Schedule 3.6(a) **is adescription of all real property with respect to which any of the Selling Entitiesor Transferred Subsidiaries is the owner and holder of a fee simple, insurableinterest and is primarily or exclusively used in the Business, excluding any ofthe Assets Held for Sale (collectively, the “***OwnedReal Property***”).

 

### **(b)**                                  Realty Leases(as Lessee)

### ** **

Setforth on **Schedule 3.6(b) **is a list anddescription of all real property with respect to which any of the SellingEntities or Transferred Subsidiaries is a lessee or sublessee or other occupantand that is exclusively used in the Business (the “***LeasedReal Property,”*** and, along with the Owned Real Property, the ***“Real Property***”).  UNOVA has previously furnished to Purchaser true,correct and complete copies of the leases or similar contracts governing theLeased Real Property and any guaranties related thereto.  Each such lease is in full force and effect,no default or breach has occurred on the part of the Selling Entities or, tothe knowledge of the Selling Entities, any other party thereto, nor has therebeen any occurrence, omission or dispute which with the giving of notice or thepassage of time or both could give rise to a default of any such lease.  Except as set forth on Schedule 3.6(b), no consent ofany landlord or any other party is required under any such lease in order toassign all rights and benefits in each such lease to Purchaser (or itsdesignee) and to keep such lease in full force and effect after the executionand delivery of this Agreement and the consummation of the transactionscontemplated hereby.

 

### **(c)**                                  Violation ofLaws or Restrictive Covenants

### ** **

Nonotice of violation of any applicable Law (including without limitation anyzoning and land use Law), covenant, condition, restriction, agreement oreasement affecting any Real Property owned, leased or occupied by any of the SellingEntities or Transferred Subsidiaries or its use or occupancy, which violationwould materially impair the value or

 

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continued use of the property to which it relateshas been received by any of the Selling Entities in respect of the Business orany Transferred Subsidiary by any Governmental Body or other person entitled toenforce the same.

 

### **(d)**                                  EnvironmentalMatters

### ** **

Exceptas otherwise disclosed on **Schedule 3.6(d) **orin the Phase I or Phase II assessments undertaken by UNOVA pursuantto Section 5.8:

 

(i)                                     The applicable Transferred Subsidiaries orSelling Entities in respect of the Business have obtained and currentlymaintain all material permits, licenses and other authorizations (the “***Environmental Permits***”) which arepresently required with respect to the operation of the Business or any RealProperty under applicable Law relating to pollution or protection of theenvironment, including without limitation Laws and regulations relating toemission, discharge or release of any “***Hazardous Substance***”(as defined below) into the environment (including without limitation ambientair, surface water, ground water, drinking water supply, land surface orsubsurface strata located both on and off-site) or otherwise relating to themanufacture, processing, distribution, generation, use, removal, abatement,remediation, treatment, storage, disposal, transport, recycling, reclamation,management, handling, import or export of any Hazardous Substance (collectively,the “***Environmental Laws***”).  The term “***HazardousSubstance***” shall mean any toxic or hazardous constituents,pollutants, waste waters, byproducts, contaminants, chemicals, compounds,substances, materials or wastes, including without limitation asbestos, polychlorinatedbiphenyls , petroleum or any petroleum products or other constituents orpetroleum-based derivatives or urea formaldehyde.  None of the Transferred Subsidiaries orSelling Entities in respect of the Business has been notified by any GovernmentalBody that any of the Environmental Permits will be materially modified orsuspended or revoked, and the Selling Entities have no reason to believe thatthe Environmental Permits cannot be transferred or reissued to Purchaser orrenewed upon their expiration upon the same or similar terms and conditions asthe current permits, subject to requirements of applicable Environmental Lawsgoverning such Environmental Permits. Each of the Selling Entities and Transferred Subsidiaries is in materialcompliance with the terms and conditions of the Environmental Permitsapplicable to such Persons;

 

(ii)                                  Each of the Selling Entities and TransferredSubsidiaries is in material compliance with all applicable limitations,restrictions, conditions, standards, prohibitions, requirements, obligations,schedules and timetables imposed or required by the Environmental Laws;

 

(iii)                               There is no civil, criminal or administrativeaction, suit, demand, claim, hearing, notice of violation, order,investigation, proceeding, notice or demand letter received by or pending , orto the knowledge of the Selling Entities, threatened against any of theTransferred Subsidiaries or Selling Entities in respect of any Real Property orany site off the Real Property based on the Environmental Laws or any bindingcode, plan, order, decree,

 

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judgment, injunction, notice or demand letter issued, entered orpromulgated under such Environmental Laws;

 

(iv)                              There has been no storage, holding, existence,release, spill, emission, discharge, generation, processing, treatment,abatement, removal, recycling, reclamation, disposal, handling, use ortransportation of any Hazardous Substance from, under, into, at or on any RealProperty (an “***Environmental Activity***”)which has resulted or is reasonably likely to result in a violation by or amaterial liability of any Transferred Subsidiaries or Selling Entities inrespect of the Business under the Environmental Laws, or which has resulted inthe contamination of any Real Property that is required by any GovernmentalBody to be investigated, reported, removed or remediated under theEnvironmental Laws; and

 

(v)                                 The Selling Entities have provided or willprovide Purchaser and Consultant (as defined in Section 5.8(a)) withaccess to all environmental studies or reports, records, documentation andinformation in the control of the Selling Entities relative to theenvironmental condition of the Real Property, any Environmental Activity andcompliance with applicable Environmental Laws except for such records,documentation and information considered to be subject to the attorney-clientprivilege, provided that the withholding of such records, documentation andinformation does not result in the non-disclosure of material informationregarding the environmental condition of the Real Property, any EnvironmentalActivity or the failure of the Business to comply with applicable EnvironmentalLaws.

 

### **(e)**                                  SurveyMatters

### ** **

Withrespect to each of the properties which is an Owned Real Property (i) allbuildings, structures and improvements, including, without limitation, anydriveways, parking areas, waste facilities and all means of access to suchproperty, are located completely within the boundary lines of such property anddo not encroach upon or under the property of any other person or entity; (ii) nobuilding, structure or improvement of any kind belonging to any other person orentity encroaches upon or under any of such property; (iii) the propertyabuts and has access to a public way, duly laid out or accepted as such by thecity or town in which such property is located; (iv) the legal descriptionprovided to the Purchaser with respect to such property comprises all the landnecessary to properly operate such property consistent with its respective useprior to the date hereof; (v) no portion of such property is subject tothe possession or claim of ownership or use by any other person or entity otherthan the respective Selling Entities or Transferred Subsidiaries; and (vi) thereare no rights, interests or claims affecting any such property which a correctsurvey would disclose and which are not shown in the public records.

 

### **(f)**                                    RealEstate Liens or Encumbances

### ** **

Asof the Transfer Date, except as disclosed in any title insurance policydelivered to Purchaser prior to the consummation of the transactionscontemplated hereby, none of the Owned Real Property is subject to anyeasements, covenants, restrictions and

 

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reservations (of record or otherwise), which prohibit or materiallyinterfere with the current or expected future use of such properties.

 

## **3.7**                               Rightto Use Properties and Assets

## ** **

Exceptas would not reasonably be expected to have a material adverse effect, none ofthe Selling Entities or Transferred Subsidiaries is using any properties,rights or assets to conduct the Business which are not duly owned, leased,licensed or otherwise contracted for by it.

 

## **3.8**                               Contractsand Commitments

## ** **

Theagreements set forth on **Schedules 3.8(a) through3.8(k)** are referred to herein as the “***Contracts***.”

 

### **(a)**                                  Sales Orders,Bids and Proposals

### ** **

Setforth on **Schedule 3.8(a) **is a list anddescription of each individual outstanding sales order, sales contract, changeorder, final bid or binding sales proposal of any of the TransferredSubsidiaries or Selling Entities relating to the Business in excess of $250,000(the “***Sales Orders***”).  UNOVA has provided Purchaser with access tocopies of all Sales Orders, except to the extent such access may be restrictedby applicable Laws or contract terms. Except as otherwise indicated on Schedule 3.8(a), all Sales Orderscurrently in effect have been made in the ordinary course of business and atarm’s length.

 

### **(b)**                                  Purchase Orders

### ** **

Setforth on **Schedule 3.8(b) **is a list anddescription of each individual outstanding purchase order and purchasecommitment of any of the Transferred Subsidiaries or Selling Entities relatingto the Business in excess of $100,000****(the“***Purchase Orders***”).  UNOVA has provided Purchaser with access tocopies of all Purchase Orders.  Except asotherwise indicated on **Schedule 3.8(b)**,all Purchase Orders have been incurred in the ordinary course of business andat arm’s length.  **Schedule 3.8(b) **also contains atrue and complete list of (i) the twenty largest customers of the SellingEntities in terms of revenues during the year ended December 31, 2004showing the approximate total sales to each such customer during such period;and (ii) the twenty largest vendors of the Selling Entities in terms ofpurchases of goods or services during such period, showing the approximatetotal purchases by the Selling Entities from each such vendor during suchperiod.

 

### **(c)**                                  SalesRepresentative, Distributor and Dealer Agreements

### ** **

Setforth on **Schedule 3.8(c) **is a list anddescription of all outstanding sales representative, sales agent, dealer anddistributor agreements and similar contracts or agreements of any of theTransferred Subsidiaries or Selling Entities relating to the Business.  All of such contracts and agreements by theirterms are terminable at any time by the applicable Selling Entity orTransferred Subsidiary without any additional payment,

 

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indemnity or other penalty upon not more than90 days notice, except as otherwise disclosed on Schedule 3.8(c).

 

### **(d)**                                  PersonalProperty Leases (As Lessee)

### ** **

Setforth on **Schedule 3.8(d) **are (i) alist and description of each individual lease, contract and other agreementunder which any of the Transferred Subsidiaries or Selling Entities relating tothe Business leases or rents (as lessee) any machinery, equipment, motorvehicle or other personal property and which is not terminable at any time bythe applicable Selling Entity or Transferred Subsidiary without any additionalpayment, indemnity or other penalty upon not more than 90 days notice, andunder which the lease or rent payments exceed $10,000 annually, and (ii) alist of each lease under which any of the Transferred Subsidiaries or Selling Entitiesleases or rents (as lessee) any motor vehicle used in the Business.

 

### **(e)**                                  NoncompetitionAgreements or Covenants

### ** **

Setforth on **Schedule 3.8(e) **is a list anddescription of every agreement or other commitment imposing on any of theTransferred Subsidiaries or Selling Entities any restriction on the manner inwhich it may conduct the Business in competition with any third party.

 

### **(f)**                                    ConfidentialNondisclosure Agreements

### ** **

Setforth on **Schedule 3.8(f) **is a list anddescription of all written agreements between any of the TransferredSubsidiaries or Selling Entities and any third party in respect of the Businesswhich contain provisions for the nondisclosure by any of the TransferredSubsidiaries or Selling Entities of confidential or proprietary information(excluding standard confidentiality provisions in product sales or serviceagreements and excluding confidentiality agreements with potential purchasersof all or any portion of the Cincinnati Lamb Group).

 

### **(g)**                                 ConsultantAgreements

### ** **

Setforth on **Schedule 3.8(g) **is a list anddescription of all outstanding consultant agreements (other than agreementslisted on **Schedule 3.8(c)**) of any of theTransferred Subsidiaries or Selling Entities in respect of the Business.

 

### **(h)**                                 Guarantees

### ** **

Setforth on **Schedule 3.8(h) **is a list anddescription of each contract, agreement or instrument under which any of theTransferred Subsidiaries or the Selling Entities guarantees, endorses orotherwise is, will or may become liable or responsible for the obligations orliabilities of any third party in respect of the Business for money borrowed,advances made or goods or services purchased (other than endorsements forcollection of negotiable instruments in the ordinary course of business).

 

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### **(i)**                                    Powers ofAttorney, Proxies

### ** **

Setforth on **Schedule 3.8(i) **is a list anddescription of all outstanding powers of attorney or proxies granted by any ofthe Transferred Subsidiaries or the Selling Entities in respect of theBusiness.

 

### **(j)**                                    Letters ofCredit, Surety, Bid and Performance Bonds

### ** **

Setforth on **Schedule 3.8(j)** is a list anddescription of all commercial letters of credit, stand-by letters of credit,surety, bid, performance bonds and other similar instruments (i) securingthe obligations of any of the Transferred Subsidiaries or Selling Entities inrespect of the Business or (ii) securing any outstanding paymentobligations of a third party to any of the Transferred Subsidiaries or SellingEntities in respect of the Business.

 

### **(k)**                                Other MaterialContracts

### ** **

Setforth on **Schedule 3.8(k)** is a list anddescription of any other contract or commitment of any of the TransferredSubsidiaries or Selling Entities in respect of the Business that is material tothe Business and which is not of the type required to be disclosed in any otherSchedule to this Agreement pursuant to the provisions hereof.  For purposes of this paragraph, a contract orcommitment shall be deemed to be material if the consideration remaining to bepaid thereunder exceeds $150,000 in the aggregate.

 

Exceptas otherwise disclosed in this Section 3.8, all contracts listed in this Schedule 3.8are valid and in full force and effect, the Transferred Entities or SellingEntities have performed or are prepared to perform all material obligationsimposed on them thereunder, and there are not any defaults or events of defaulton the part of the Transferred Subsidiaries or Selling Entities, or to theirknowledge the other parties thereto, that could reasonably be expected to materiallyadversely affect the Business.  Except asotherwise disclosed in this Section 3.8, none of the Transferred Subsidiariesor Selling Entities has received notice that any party to any such contractintends to cancel, terminate or refuse to renew such contract or to exercise ordecline to exercise any option or right thereunder.

 

## **3.9**                               Patents,Trade Names, Trademarks, Service Marks, Copyrights and Chip Registrations

## ** **

### **(a)**                                  IntellectualProperty Rights

### ** **

Setforth on **Schedule 3.9(a) **is a list anddescription of all patents, registered designs, utility models, patentapplications, trade names, internet domains, trademarks, trademarkregistrations and trademark applications, service marks, service markregistrations and service mark applications, copyright registrations andcopyright registration applications, software, chip registrations and chipregistration applications, both domestic and foreign, which are owned by any ofthe Transferred Subsidiaries or Selling Entities that are material to theBusiness (collectively, the “***Intellectual Property***”).  To the knowledge of the Selling Entities andexcept as otherwise indicated on Schedule 3.9(a), such IntellectualProperty is all

 

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of the intellectual property that is material andnecessary to operate the Business.  Exceptas otherwise indicated on Schedule 3.9(a), the applicable TransferredSubsidiary or Selling Entity owns all right, title and interest in and to theIntellectual Property, validly and beneficially.  Also disclosed on Schedule 3.9(a) isan indication of any of the Intellectual Property that is used by otheroperations of UNOVA or its subsidiaries in operations other than the Business ,together with a list of opposition proceedings, cancellation actions andrevocation actions (“***Licensed IntellectualProperty***”).

 

### **(b)**                                  Licenses ofIntellectual Property Rights To or FromThird Parties

### ** **

Setforth on **Schedule 3.9(b) **is a list anddescription of (i) all licenses, assignments and other transfers ofIntellectual Property granted to others by any of the Transferred Subsidiariesor Selling Entities that are used in and material to the Business, and (ii) alllicenses, assignments and other transfers by others of patents, trade names,trademarks, service marks, copyrights, chip registrations, trade secrets,software, know-how, industrial property, technology or other proprietary rightsgranted to any of the Transferred Subsidiaries or Selling Entities that areused in and material to the Business. Except as otherwise disclosed on Schedule 3.9(b), none of thelicenses described above is subject to termination, cancellation or change inits terms or provisions as a result of this Agreement or the transactionsprovided for in this Agreement.

 

### **(c)**                                  No Infringement

### ** **

Exceptas disclosed on **Schedule 3.9(c) **andexcept with respect to pre-packaged or off-the-shelf-software, to the knowledgeof the Selling Entities, (a) none of the Intellectual Property or therights of any of the Transferred Subsidiaries or Selling Entities are beinginfringed or otherwise violated by any Person, and (b) the use of suchIntellectual Property by the Cincinnati Lamb Group in connection with theBusiness does not infringe or otherwise violate the rights of any other Person.

 

## **3.10**                        Patent,Trade Name, Trademark, Service Mark, Copyright or Chip RegistrationIndemnification

## ** **

Exceptas set forth on **Schedule 3.10**, there are nopending or, to the knowledge of the Selling Entities, threatenedindemnification claims or demands against any of the Transferred Subsidiariesor the Selling Entities in respect of the Business for patent, registereddesign, utility model, trade name, internet domain, trademark, service mark,copyright or chip registration infringement.

 

## **3.11**                        ConfidentialInformation or Trade Secrets

## ** **

Exceptas set forth on **Schedule 3.11**, there are nopending or, to the knowledge of the Selling Entities, threatened proceedingswhich challenge the rights of any of the Transferred Subsidiaries or SellingEntities in respect of any proprietary or confidential information or tradesecrets used in and material to the Business.

 

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## **3.12**                        Productand Service Warranties

## ** **

Setforth on **Schedule 3.12** are the standardproduct and service warranty policies of the Transferred Subsidiaries andSelling Entities in respect of the Business. Except as otherwise indicated on Schedule 3.12, none of theTransferred Subsidiaries or Selling Entities has granted or extended anycurrently outstanding product or service warranty, either in duration, scope orotherwise, that is in excess of or different from the standard policies setforth on Schedule 3.12.

 

## **3.13**                        Employees;Employee Benefits

## ** **

### **(a)**                                  Employees

### ** **

Subjectto European data protection legislation, set forth on **Schedule 3.13(a) **isa list of the names and titles of all employees of the Transferred Subsidiariesand Selling Entities in respect of the Business as of the date of thisAgreement (the “***Employees***”).  UNOVA has previously furnished to Purchaser aschedule showing the current rates of compensation of each of theEmployees.

 

### **(b)**                                  Indebtedness toEmployees

### ** **

Noneof the Transferred Subsidiaries or Selling Entities in respect of the Businessis indebted to any of the present or former employees in any amount whatsoever,other than for accrued wages, bonuses and related benefits and reasonablereimbursable business expenses incurred in the ordinary course of business,except as otherwise disclosed on **Schedule 3.13(b)**.

 

### **(c)**                                  Loans orAdvances to Employees

### ** **

Noneof the Transferred Subsidiaries or Selling Entities has outstanding andunsatisfied, in whole or in part, any loan or advance to any of its present orformer employees, other than reasonable advances for business and relatedexpenses made in the ordinary course of business, except as otherwise disclosedon **Schedule 3.13(c)**.

 

### **(d)**                                  CollectiveBargaining Agreements

### ** **

Setforth on **Schedule 3.13(d) **is a listand description of all collective bargaining or similar agreements between anyof the Transferred Subsidiaries or Selling Entities and any group of Employees,union or labor organization representing any Employees including any worksagreement.  To the knowledge of theSelling Entities, no such agreement or understanding is presently proposed orunder discussion, except as otherwise disclosed on Schedule 3.13(d).

 

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### **(e)**                                  Other Labor Matters

### ** **

Eachof the Transferred Subsidiaries and Selling Entities in respect of the Businessis in compliance in all material respects with all applicable Laws relating toemployment, employment practices, terms and conditions of employment, wages andhours.  Within the last two years, noneof the Transferred Subsidiaries or Selling Entities has experienced any unionorganizing activity or any work stoppage due to any labor disagreementwith respect to the Employees.  There isno strike, slowdown or stoppage pending or threatened against any of theTransferred Subsidiaries or Selling Entities.

 

### **(f)**                                    EmployeeBenefit Plans

### ** **

#### **(i)**                                    Generally

#### ** **

Setforth on **Schedule 3.13(f) **is a listand description of all employee benefit plans and commitments in effect for thebenefit of the present or former employees of the Cincinnati Lamb Group or anygroup of such employees, or for the benefit of dependents of any of them (collectively,the “***Employee Benefit Plans***”), includingwithout limitation any pension, life and dependent life, accidental death andhealth insurance (including medical, dental and vision), hospitalization,medical examination, savings, bonus, deferred compensation, incentivecompensation, holiday, vacation, severance pay, tax preparation assistance andequalization, estate planning, pay-in-lieu, sick pay, sick leave, disability,tuition refund, service award, company car, car allowance, scholarship, relocation,patent award, living allowances, housing allowances, annual home leave costs,employee assistance, travel, accident, dependent schooling and supplements,fringe benefit and other employee benefit plans, contracts, policies orpractices providing employee or executive compensation or benefits.  None of the Transferred Subsidiaries orSelling Entities in respect of the Business has committed to establish anyagreement or arrangement of the type required to be disclosed on Schedule 3.13(f),except as otherwise indicated on such Schedule. Except as otherwise disclosed on Schedule 3.13(f), to the knowledgeof the Selling Entities, each of the Employee Benefit Plans complies, and hasbeen administered in compliance in all material respects, with all applicableLaws.

 

#### **(ii)**                                ERISA Plans

#### ** **

UNOVAhas provided Purchaser with access to copies of (1) each Employee BenefitPlan that is subject to ERISA, including amendments thereto (each, an “***ERISA Plan***”), or, in the case of anyunwritten ERISA Plan, a description thereof, (2) if applicable, thecurrent trust agreement for each ERISA Plan, including amendments thereto, (3) ifapplicable, the most recent summary plan description for each ERISA Plan andall modifications thereto, (4) if applicable, the most recent Form 5500filed for each ERISA Plan, (5) if applicable, the most recent actuarialvaluation report prepared in connection with any ERISA Plan, and (6) ifapplicable, the most recent determination letter received from the InternalRevenue Service with respect to such ERISA Plan.  Except as otherwise disclosed on Schedule 3.13(f),no ERISA Plan is a “multiemployer plan” (as defined in Section 3(37) or

 

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Section 4001(a)(3) of ERISA) and no Selling Entity or TransferredSubsidiary has incurred any material withdrawal liability under Section 4201of ERISA to any multiemployer plan that covered employees of the CincinnatiLamb U.S. Division during the last five years, which liability will not besatisfied prior to Closing.  With respectto each ERISA Plan (1) all payments due from any such plan (or from theapplicable Transferred Subsidiary or Selling Entity with respect to any suchplan) have been made, (2) the applicable Selling Entity orTransferred Subsidiary has complied in all material respects with, and eachsuch ERISA Plan conforms in all material respects in form and operation to, allapplicable Laws, including without limitation ERISA and the Code and allmaterial reports and information relating to such ERISA Plan required to befiled with any Governmental Body have been timely filed, (3) all materialreports and information required to be disclosed or provided to participants ortheir beneficiaries have been timely disclosed or provided, (4) there havebeen no prohibited transactions within the meaning of Section 406 of ERISAor Section 4975 of the Code with respect to any ERISA Plan, (5) eachsuch ERISA Plan which is intended to qualify under Section 401 of the Codehas received a favorable determination letter from the Internal Revenue Servicewith respect to such qualification or is the subject of an Internal RevenueService opinion letter that such ERISA Plan is established using a prototypeplan document, and to the knowledge of the Selling Entities, nothing hasoccurred since the date of such letter that has or is likely to adverselyaffect such qualification or exemption, and (6) to the knowledge of theSelling Entities, there are no actions by any Governmental Body, suits orclaims pending (other than routine claims for benefits) or threatened withrespect to any ERISA Plan or against the assets of such ERISA Plan.  With respect to any Employee Benefit Plansubject to Title IV of ERISA, except as disclosed on Schedule 3.13(f),(1) all minimum funding contributions required under Section 302 ofERISA and Section 412 of the Code have been timely made, (2) nofunding waivers have been received or requested from the IRS, (3) noaccumulated funding deficiency as described in Section 302(a) ofERISA and Section 412(a) of the Code exists and (4) no notice ofintent to terminate has been filed and no amendment to treat such plan asterminated has been adopted.  Except asspecifically designated as such in Schedule 3.13(f), no ERISA Planprovides post-employment health or welfare benefits, except as required by Part 6of Subtitle B of Title I of ERISA and Section 4980B of the Code (“***COBRA***”).

 

#### **(iii)**                            U.K. Pension Plans

#### ** **

UNOVAhas provided Purchaser in respect of the UNOVA Pension Fund, the CincinnatiMachine Pension Plan and the Cincinnati Machine Supplementary Pension Plan(collectively, the “***U.K. Pension Plans***”) withaccess to copies of the most recent definitive deed and rules applicableto each of the U.K. Pension Plans, all subsequent deeds of amendment and themost recent explanatory booklet issued in relation to such Plans and applicableto the Employees located in the U.K. (the “***U.K. Employees***”).  Particulars of all documents relating to, andall benefits payable under the U.K. Pension Plans necessary to enable the PurchasingEntities to quantify the liabilities they will assume under each such PensionPlan have been provided to or made available to the Purchaser.  UNOVA or CMUK is the sole sponsoring orparticipating employer in each of the CMUK Plan, the CMUK Supplementary Planand the Lamb Technicon section of the UPF (as defined in

 

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Section 5.11).  For purposesof this paragraph, “***Pension Arrangement***” meansany occupational pension scheme or personal pension scheme as either expressionis defined in Section 1 of the Pension Schemes Act 1993 or any otheragreement or arrangement providing a pension or lump sum on death orretirement.  The U.K. Pension Plansare the only Pension Arrangement applicable to the U.K. Employees apartfrom statutory plans.  Each of theU.K. Pension Plans is approved as an exempt approved scheme within themeaning of Chapter I of Part XIV of the Income and Corporation TaxesAct 1988.  To the knowledge of theSelling Entities, there is no ongoing claim or dispute relating to theentitlement of any of the U.K. Employees under any of theU.K. Pension Plans, other than routine and undisputed claims forbenefits.  All contributions which havebecome due and payable to the U.K. Pension Plans in respect of theEmployees have been paid.  Only CMUK is aparticipating employer in the CMUK Plan and the CMUK Supplementary Plan.  No amendment to any of the U.K. Pension Plansshall be made prior to Closing, unless the Purchasing Entities have firstapproved it, which approval will not be unreasonably withheld.

 

### **(g)**                                 EmploymentContracts

### ** **

Setforth on **Schedule 3.13(g) **is a list ofall contracts between any of the Selling Entities in respect of the Business orany Transferred Subsidiary and any of the Employees, excluding contractscreated by operation of law.  UNOVA hasfurnished or made available to Purchaser copies of all such contracts.

 

## **3.14**                        Pendingor Threatened Claims, Litigation and Governmental Proceedings

## ** **

Setforth on **Schedule 3.14** is a list and descriptionof every complaint, suit, action, arbitration or regulatory, administrative orgovernmental proceeding or investigation or any other proceeding orinvestigation which is pending or, to the knowledge of the Selling Entities,threatened in writing against any of the Transferred Subsidiaries or SellingEntities in respect of the Business.  Noinvestigation, suit, action or other judicial or governmental proceeding ispending or, to the knowledge of the Selling Entities, threatened before anycourt or Governmental Body which may result in the restraint or prohibition of,or the obtaining of substantial damages in connection with, this Agreement orthe consummation of the transactions provided for in this Agreement.

 

## **3.15**                        Judgments,Orders and Consent Decrees

## ** **

Exceptas set forth on **Schedule 3.15**, none of theTransferred Subsidiaries or Selling Entities in respect of the Business issubject to any judgment, order or decree of, or agreement with, a GovernmentalBody that involves the transactions contemplated herein or that would have amaterial adverse effect on the Business; and no such proceeding is pending or,to the knowledge of the Selling Entities, threatened against any of theTransferred Subsidiaries or the Selling Entities in respect of the Business.

 

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## **3.16**                        ComplianceWith Laws

## ** **

Exceptas otherwise disclosed on **Schedule 3.16**,to the knowledge of the Selling Entities, the Business has been conducted andis in compliance with, and the Purchased Assets are in compliance with, allapplicable Laws.

 

## **3.17**                        Franchises,Permits, Etc.

## ** **

Exceptas otherwise disclosed on **Schedule 3.17**,the applicable Selling Entity or Transferred Subsidiary has obtained and is incompliance in all material respects with all terms and conditions of allgovernmental and business franchises, permits, licenses and otherauthorizations that are necessary for it to conduct the Business as and whereit is now conducted.

 

## **3.18**                        Taxes

## ** **

Exceptas otherwise disclosed on **Schedule 3.18**, each of the Selling Entities and the Transferred Subsidiaries, and anyaffiliated group within the meaning of Section 1504 of the Code (orcomparable provision of state, provincial, local or foreign Law) (“***Affiliated Group***”) of which eachsuch Selling Entity or Transferred Subsidiary is or has been a member (but onlyfor the taxable period during which the Selling Entity or TransferredSubsidiary has been a member thereof), (i) has filed or caused to be filedall material federal, state, provincial, local and foreign Tax returns,reports, statements or other documentation (“***TaxReturns***”) required to be filed by it with a Tax authority underapplicable federal, state, provincial, local or foreign Law, and (ii) hastimely paid or caused to be paid in full by the due date thereof all Taxesshown to be due thereon.  All such TaxReturns were at the time they were filed true, complete and correct in allmaterial respects.  There are no Liensfor Taxes on any of the Purchased Assets or the property or assets of theTransferred Subsidiaries, except for Permitted Liens.  All deficiencies asserted or assessments madeby any Tax authority against each of the Selling Entities and the TransferredSubsidiaries, and any Affiliated Group of which each such Selling Entity orTransferred Subsidiary is or has been a member (but only for the taxable periodduring which the Selling Entity or Transferred Subsidiary has been a memberthereof), have been fully paid, and there are no audits, investigations orexaminations by any Tax authority with respect to Taxes relating to theBusiness or the Transferred Subsidiaries in progress, pending or, to theknowledge of the applicable Selling Entity, threatened.  Each of the Transferred Subsidiaries hasestablished adequate reserves on its books and records in accordance with GAAPfor all Taxes not yet due and payable. For purposes of this Agreement, the term “***Taxes***”means all domestic or foreign federal, state and local taxes of any kind,including without limitation, income, capital gains, gross receipts, franchise,employment, sales, use, license, property or withholding taxes, together withall interest, penalties and additions imposed with respect to suchamounts.  Notwithstanding the foregoing,each of the Selling Entities and the Transferred Subsidiaries expresslydisclaims any representation or warranty with respect to the amount, usabilityor availability of any net operating loss carryforward or other Tax attributesof the Transferred Subsidiaries.  Thereare no Tax sharing agreements between the

 

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Transferred Subsidiaries on the one hand and theSelling Entities (or any other party) on the other hand.  The Transferred Subsidiaries are not and havenot been a member of any affiliated, consolidated, combined or unitary group ofcorporations that filed or was required to file an affiliated, consolidated,combined or unitary Tax Return or has any Liability for the Taxes of any person(other than an affiliated, consolidated, combined or unitary return of whichUNOVA is the parent) under Treasury Regulation Section 1.1502-6 orany analogous or similar provision of law. UNOVA Canada is and New Intermec Canada will be duly registered undersubdivision (d) of Division I of Part IX of the ETA with respect tothe GST and its GST registration number will be provided to UNOVA prior to theTransfer Date, and the Purchased Assets being sold by UNOVA Canada constituteall or substantially all of the assets and property owned and primarily used byUNOVA Canada or its successor in respect of its operations and business.

 

## **3.19**                        RequiredConsents

## ** **

Setforth on **Schedule 3.19** is a list anddescription of any material consent, approval or authorization of, or exemptionby, or filing with, any Governmental Body or Person that is required inconnection with the execution, delivery and performance of this Agreement andthe Related Agreements by the Selling Entities or required to be obtained bythe Transferred Subsidiaries.

 

## **3.20**                        NoBreach of Statute or Contract

## ** **

Neitherthe execution and delivery of this Agreement, nor compliance with the terms andprovisions hereof by each of the Selling Entities will breach or violate anyapplicable Law other than as explicitly referred to in this Agreement or anyContract or other material instrument to which it, or Transferred Subsidiary,is a party or by which any of its, or Transferred Subsidiaries’, properties,rights or assets are bound, except as would not have a material adverse effecton the Business.

 

## **3.21**                        Insuranceand Banking

## ** **

### **(a)**                                  Insurance Policies

### ** **

Setforth on **Schedule 3.21(a) **is a list ofall insurance policies (including the terms of any self-insurance programs) andbonds (excluding instruments referred to in Section 3.8(j)) in force forthe current policy year, with respect to the Business and the employees of theTransferred Subsidiaries and Selling Entities in respect of the Business.  The Transferred Subsidiaries and SellingEntities have, with respect to the Business, maintained adequate insuranceprotection against all liabilities against which it is customary forcorporations engaged in the same or a similar business similarly situated toinsure.

 

### **(b)**                                  Bank Accounts

### ** **

Setforth on **Schedule 3.21(b) **is a list ofthe names and locations of all banks or similar financial institutions in whichany of the Transferred Subsidiaries in respect of the

 

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Business maintains an account, the account numbersand the names of all persons authorized to sign checks, drafts or other instrumentsdrawn thereon.

 

## **3.22**                        Broker’sor Finder’s Fees

## ** **

Exceptfor McDonald Investments, Inc. (“***McDonald***”),no Person other than UNOVA and its Affiliates (and their respective directors,officers and employees) has arranged, or participated in arranging, on behalfof the Selling Entities or Transferred Subsidiaries, the transactions providedfor in this Agreement.  Except forcertain fees to McDonald (which will be the responsibility of the SellingEntities), there are no broker’s or finder’s fees to be paid by any of theSelling Entities in connection with the transactions provided for in thisAgreement.  None of the Selling Entitieshas any knowledge of, and has taken no action that would give rise to, anyclaim for a broker’s or finder’s fee to be paid by Mainco or Purchaser inconnection with the consummation of the transactions provided for in thisAgreement.

 

## **3.23**                        Dutyof the Selling Entities to Make Inquiry

## ** **

Tothe extent that any of the representations and warranties made by the SellingEntities in this Agreement are qualified by the knowledge or belief of theSelling Entities, such knowledge or belief shall refer solely to the knowledgeand belief, after reasonable investigation, of the employees of the SellingEntities and the Cincinnati Lamb Group listed on **Schedule 3.23**,which Schedule includes all members of the management of UNOVA responsiblefor the Cincinnati Lamb Group.

 

## **3.24**                        AffiliateArrangements

## ** **

Ineach case with respect to the Business, except as otherwise disclosed in theSchedules to this Agreement, the Selling Entities or Transferred Subsidiaries arenot a party to any loans, guarantees, Contracts, transactions, understandingsor other arrangements, whether written or oral, of any nature, with any of thepresent or former Affiliates, shareholders, directors or officers of theSelling Entities or Transferred Subsidiaries (“***Affiliate Arrangements***”), including without limitation any AffiliateArrangement under which any Selling Entity or Transferred Subsidiary (a) leasesany real or personal property (either to or from such Person); (b) isobligated to purchase any tangible or intangible asset from or sell such assetto such Person; (c) purchases products or services from such Person; or (d) paysor receives commissions, rebates or other payments.  None of the present or former Affiliates,shareholders, directors or officers of the Selling Entities or TransferredSubsidiaries or any family member of any such Persons, (i) has been adirector, officer, partner, manager or member of, or has had any direct orindirect material interest in, any Person which during the past three years hasbeen a customer or supplier of the Selling Entities or Transferred Subsidiariesor has competed with or been engaged in any business of the kind beingconducted by the Selling Entities or Transferred Subsidiaries , or (ii) ownsor has any rights in or to any of the Purchased Assets or TransferredSubsidiaries or rights used by the Selling Entities or Transferred Subsidiariesin the conduct of their business.

 

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## **3.25**                        Assetsof Cincinnati Lamb Group

## ** **

Pursuant to the transactions contemplated by thisAgreement, including but not limited to the transfers of the Purchased Assets, AssumedLiabilities, R&B Shares, CM Korea Shares and the UII Shares, Purchaser willas of the Transfer Date receive all assets used in the Business other than (a) theExcluded Assets, and (b) any contracts, agreements, franchises, licenses,approvals, permits or other authorizations that are not transferable by theirterms or as a matter of Law.

 

## **3.26**                        NoKnowledge of Other Liabilities; No Other Representations

## ** **

### **(a)**                                  No Knowledge ofOther Liabilities

### ** **

Noneof the Selling Entities is aware of any liabilities of the Cincinnati LambGroup other than those debts, liabilities or obligations that are (i) disclosedin this Agreement, (ii) not required to be disclosed in this Agreement, or(iii) the Excluded Liabilities.

 

### **(b)**                                  Disclaimer of OtherRepresentations and Warranties

### ** **

Exceptfor the representations and warranties expressly made by the Selling Entitiesin this Agreement (including the Exhibits and Schedules), none of the SellingEntities or any other person makes any express or implied representation orwarranty concerning the Business on behalf of the Selling Entities.  Without limiting the generality of theforegoing, and notwithstanding any otherwise express representations andwarranties made in this Article 3, the Selling Entities and TransferredSubsidiaries make no representation or warranty to Mainco or Purchaser withrespect to (a) any projections, estimates or budgets delivered to or madeavailable to Mainco or Purchaser of future revenues, expenses or expendituresor future results of operations or (b) except as expressly covered by arepresentation and warranty contained in this Article 3, any otherinformation or documents (financial or otherwise) made available to Mainco orPurchaser or their counsel, accountants or advisers with respect to theBusiness.  The representations and thewarranties of the Selling Entities contained in this Agreement do not containany untrue statement of a material fact or omit to state any material factnecessary in order to make the statements and information contained herein ortherein not misleading.

 

**3.27****                       ****Competition Act (Canada)**

 

Thevalue of the Canadian assets to be sold pursuant to this Agreement is not nowand at the time of Closing will not exceed $50,000,000 (Cdn.) as determined inaccordance with the Competition Act (Canada). Accordingly, the proposed transaction does not now and will not at thetime of Closing exceed the pre-merger notification threshold under theCompetition Act (Canada).

 

(Article 4 follows)

 

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# **ARTICLE 4**.Representations and Warranties of Mainco and Purchaser

# ** **

Maincoand Purchaser each represents and warrants to the Selling Entities as follows:

 

## **4.1**                               CorporateMatters

## ** **

### **(a)**                                  Due Organization

### ** **

Purchaseris a limited liability company duly organized, validly existing and in goodstanding under the Laws of Delaware . Mainco is a corporation duly organized, validly existing and in goodstanding under the Laws of Delaware of which Mo Meidar is a shareholder.  As of the Transfer Date, each of the PurchaserSubsidiaries will be a corporation or limited liability company duly organized,validly existing and in good standing under the Laws of its jurisdiction offormation and will be a wholly-owned subsidiary of Purchaser.  Each of the Purchaser and Mainco is, and asof the Transfer Date each of the Purchaser Subsidiaries will be, qualified todo business and in good standing as a foreign corporation or foreign limitedliability company in each jurisdiction in which the failure to be so qualifiedwould have a material adverse effect.

 

### **(b)**                                  Corporate Powerand Authority to Enter Into Agreement

### ** **

Eachof Mainco and Purchaser has, and as of the Transfer Date each of the AssetPurchasing Entities will have, the corporate power and authority to enter intothis Agreement and to consummate the transactions provided for in thisAgreement.

 

### **(c)**                                  Due Executionand Enforceability

### ** **

Theexecution, delivery and performance by and on behalf of each of Mainco andPurchaser of this Agreement and the Related Agreements to which it is a partyhave been duly and validly authorized and approved by all necessary corporateor limited liability company action, and no other corporate action is necessaryor required to authorize it to execute this Agreement and such RelatedAgreements and to perform its obligations under this Agreement and such RelatedAgreements.  As of the Transfer Date, theexecution, delivery and performance by and on behalf of each Asset PurchasingEntity of this Agreement and the Related Agreements to which it is a party willhave been duly and validly authorized and approved by all necessary corporate orlimited liability company action, and no other corporate or limited liabilitycompany action will be necessary or required to authorize it to execute thisAgreement and such Related Agreements and to perform its obligations under thisAgreement and such Related Agreements.  ThisAgreement and such Related Agreements constitute the valid and legally bindingobligations of each of Mainco and Purchaser, and as of the Transfer Date willconstitute the valid and legally binding obligations of each of the PurchaserSubsidiaries, enforceable against each of them in accordance with its terms,except to the extent the same may be limited by bankruptcy,

 

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insolvency, reorganization, moratorium or similarlaws affecting creditors’ rights generally or by general equitable principles.

 

### **(d)**                                  No Conflict

### ** **

With respect to each of Mainco and Purchaser, theexecution and delivery of this Agreement and the Related Agreements to whichsuch Person is a party do not, and the consummation by it of any of thetransactions contemplated hereby or thereby will not, and with respect to eachof the Purchaser Subsidiaries as of the Transfer Date, the execution anddelivery of this Agreement and the Related Agreements to which such Person is aparty will not, and the consummation by it of any of the transactionscontemplated hereby or thereby will not:

 

(i) conflict with or violate its articles ofincorporation, bylaws or other constituent documents;

 

(ii) violate any applicable Law of any Governmental Body; or

 

(iii) violate, conflict with, result in any breach of, or constitute adefault (or an event that, with notice or lapse of time or both, wouldconstitute a default) under any contract or judgment to which it is a party orby which it is bound, except as would not be reasonably likely to result have a materialadverse effect on Mainco and the Purchaser.

 

## **4.2**                               RequiredConsents

## ** **

Setforth on **Schedule 4.2** is a list anddescription of any material consent, approval or authorization of, or exemptionby, or filing with, any Governmental Body or Person that is required inconnection with the execution, delivery and performance of this Agreement andthe Related Agreements by the Purchasing Entities, except for governmental andbusiness franchises, permits, reports, licenses and other authorizationsnecessary to conduct the Business on the Transfer Date.  The acquisition of the Purchased Assets fromUNOVA Canada by the Purchaser or another Asset Purchasing Entity contemplatedby this Agreement is subject to notification, and not review, under theInvestment Canada Act (Canada).

 

## **4.3**                               Claims,Litigation and Governmental Proceedings

## ** **

Noinvestigation, suit, action or other judicial or governmental proceeding ispending or, to the knowledge of Mainco and Purchaser, threatened before anycourt or Governmental Body which is likely to result in the restraint orprohibition of, or the obtaining of substantial damages in connection with,this Agreement or the consummation of the transactions provided for in thisAgreement.

 

## **4.4**                               Broker’sor Finder’s Fees

## ** **

Noperson or firm other than Mainco and its Affiliates (and their respectivedirectors, officers and employees), has arranged, or participated in arranging,on behalf of Mainco and

 

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Purchaser or their Affiliates, the transactionsprovided for in this Agreement.  Thereare no broker’s or finder’s fees to be paid by Mainco or Purchaser or theirAffiliates in connection with the transactions provided for in thisAgreement.  Neither Mainco, Purchaser norany of their Affiliates has any knowledge of, and has taken no action whichwould give rise to, any claim for a broker’s or finder’s fee to be paid by anyof the Selling Entities or Transferred Subsidiaries in connection with theconsummation of the transactions provided for in this Agreement.

 

## **4.5**                               Subsidiaries

## ** **

Purchaserdoes not presently own or control, directly or indirectly, any interest in anyother corporation, association or other business entity except as set forth in **Schedule 4.5**. Purchaser is not a participant in any joint venture, partnership orsimilar arrangement with any Person other than its senior lender.

 

## **4.6**                               Solvency

## ** **

Onand after the Transfer Date, Purchaser and each of the other Asset PurchasingEntities will have adequate funds on hand, from its working capital orcurrently available credit facilities, to pay the Purchase Price (including theSecured Note) and to operate the Business and to pay, perform and discharge theAssumed Liabilities as they become due and payable.  The Purchaser is not insolvent, and neitherthe Purchaser nor any other Asset Purchasing Entity will be rendered insolventby the transactions contemplated by this Agreement.

 

## **4.7**                               Sourcesof Financing

## ** **

Setforth on **Schedule 4.7** is a description ofall sources of financing that Purchaser and the other Asset Purchasing Entitieswill have available to pay the Purchase Price and to perform the AssumedLiabilities as they become due.

 

## **4.8**                               WTOInvestor

## ** **

Purchaserrepresents that it, as well as any Asset Purchasing Entity purchasing PurchasedAssets or assuming Assumed Liabilities of UNOVA Canada hereunder, is a WTOinvestor for purposes of the Investment Canada Act (Canada).

 

## **4.9**                               UltimateParent Entity

## ** **

Eachof Mainco and Purchaser acknowledges on behalf of itself and the AssetPurchasing Entities that (a) Moshe Meidar is the ultimate parent entity ofeach such entity for purposes of the HSR Act (as defined in Section 5.6(a)),and (b) that Moshe Meidar does not meet any Size-of-Party threshold under Section (a)(2)(B)(ii) ofthe HSR Act.

 

(Article 5 follows)

 

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# **ARTICLE 5**.Certain Covenants Pending the Closing

# ** **

## **5.1**                               FullAccess

## ** **

Mainco,Purchaser and the other Asset Purchasing Entities and their authorizedrepresentatives shall have reasonable access during normal business hours andupon reasonable advance notice, but without unreasonably interrupting business,to all the premises and to all books of account, records and properties of theCincinnati Lamb Group, including without limitation those relative to (a) theDecember Financials and (b) the customers and suppliers to theBusiness; provided, however, that Mainco, Purchaser and the other AssetPurchasing Entities and their representatives agree that such access anddisclosure will not be permitted if it would (i) violate the terms of anyagreement by which any member of the Cincinnati Lamb Group or its Affiliates isbound or any applicable Law, or (ii) cause competitive harm to any memberof the Cincinnati Lamb Group or any of their Affiliates if the transactionscontemplated by this Agreement are not consummated.  Subject to the foregoing limitations and therequirements of this Agreement, including but not limited to Section 5.6,UNOVA shall furnish or cause to be furnished to Purchaser and the other AssetPurchasing Entities and their authorized representatives all information withrespect to the Business as Purchaser and the other Asset Purchasing Entitiesmay reasonably request.

 

## **5.2**                               CarryOn In Regular Course

## ** **

TheSelling Entities shall (and shall cause the Transferred Subsidiaries to) carryon the Business in the ordinary course and consistent with past practices inall material respects, except to the extent of any actions taken with theconsent of Purchaser, and except as required by the provisions of thisAgreement.

 

## **5.3**                               SalesOrders

## ** **

TheSelling Entities shall not (and shall not permit the Transferred Subsidiariesto), without the prior consent of Purchaser, which consent shall not beunreasonably withheld or delayed, enter into any sales order, sales contract,change order, final bid or binding sales proposal relating to the Business (“***Sales Order***”) other than (i) SalesOrders entered into in the ordinary course of business not in excess of$1,000,000 and which are not knowingly or intentionally bid at an anticipatedloss, or (ii) any Sales Orders that are substantially in accord with a bidor sales proposal set forth on **Schedule 3.8(a)**. If any Sales Order would requireapproval under the UNOVA Approval policy, the Selling Entities shall not (andshall not permit the Transferred Subsidiaries to), without the prior consent ofPurchaser, which consent shall not be unreasonably withheld or delayed, enterinto any such Sales Order, except as may be consistent with the ordinary courseof business and past practice.

 

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## **5.4**                               CapitalExpenditures

## ** **

TheSelling Entities shall not (and shall not permit the Transferred Subsidiariesto), without the prior consent of Purchaser, which consent shall not beunreasonably withheld or delayed, make any capital expenditures relating to theBusiness unless such expenditure is made pursuant to a purchase order set forthon **Schedule 3.8(b) **or is lessthan $100,000.

 

## **5.5**                               NoIncrease in Compensation or Benefits

## ** **

TheSelling Entities shall not (and shall not permit the Transferred Subsidiariesto), without the prior consent of Purchaser, which consent shall not be unreasonablywithheld or delayed, (i) hire or employ any new salaried personnel of theBusiness (other than replacements), (ii) grant any increase in the ratesof pay of any Employee (other than routine increases granted in the ordinarycourse of business consistent with past practice), or (iii) by means ofany new or existing compensation or employee benefit plan increase thecompensation or amount or level of benefits of any Employee, other than, ineach case, any Employee whom the Parties agree will not be a ContinuingEmployee.

 

## **5.6**                               Consents

## ** **

TheParties, in cooperation and after consultation and mutual agreement, shall takeall reasonable action (without payment of any penalty or fee) required toobtain all consents, approvals and agreements of, and to give all notices andmake all filings with, any third parties, including Governmental Bodies,necessary to authorize, approve or permit the transfer to Purchaser of thePurchased Assets, the Shares and the Assumed Liabilities as provided for inthis Agreement.  Without limiting theforegoing, the parties will undertake the following promptly following the AgreementDate:

 

### **(a)**                                  HSR Act

### ** **

Ifapplicable, UNOVA and Purchaser shall promptly file the Pre-merger Notificationand Report Form (“***HSR Filing***”)required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended (the “***HSR Act***”) in connection withthe transactions contemplated hereby, and shall promptly respond to anyrequests for information.  In connectionwith the efforts referenced herein, each of the Purchasing Entities on the onehand, and each of the Selling Entities on the other hand, shall (i) useits reasonable best efforts to cooperate in all respects with the other Partieshereto in connection with any filing or submission and in connection with anyinvestigation or other inquiry, including any proceeding initiated by a privateparty, regarding the transactions contemplated hereby, (ii) keep the otherParties, including their counsel, as the case may be, informed of any materialcommunication by or to such party or its counsel from or to the Federal TradeCommission (the “***FTC***”), the Antitrust Divisionof the Department of Justice (the “***DOJ***”) orany other Governmental Body and of any material communication received or givenin connection with any proceeding by a private party, in each case regardingany of the transactions contemplated hereby, (iii) permit the otherParties and their legal counsel to review, consult with each other in advanceof and consider in good faith the views of the other in connection with anycorrespondence, filings

 

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or communications given by it to, or between it and,the FTC, the DOJ or any other Governmental Body or in connection with anyproceeding by a private party, regarding the transactions contemplated hereby,and (iv) permit the other Parties and their legal counsel to attend andparticipate in, any meeting or conference with, the FTC, the DOJ or any suchother Governmental Body or, in connection with any proceeding by a privateparty, with any other Person, regarding the transactions contemplated hereby.

 

### **(b)**                                  German Merger Control

### ** **

Ifapplicable, the parties shall promptly make the appropriate request with theGerman Federal Cartel Office for approval of the transactions contemplated bythis Agreement, including in particular the transfer of the Purchased Assetsand Assumed Liabilities relative to Honsberg.

 

### **(c)**                                  Korean Reports

### ** **

Tothe extent applicable, the parties shall promptly submit the appropriate reportsin Korea under the Foreign Investment Promotion Law and the Monopoly Regulationand Fair Trade Law, including in particular the transfer of the CM Korea Shares.

 

## **5.7**                               ConditionsPrecedent

## ** **

TheParties shall use all reasonable efforts to assure that the conditionsprecedent set forth in Articles 6 and 7 are satisfied or waived on orprior to March 31, 2005, to the extent that satisfaction of suchconditions precedent is within their reasonable control.

 

## **5.8**                               EnvironmentalSurvey

## ** **

### **(a)**                                  Phase I and Phase II

### ** **

UNOVAshall perform, at its expense, a Phase I environmental assessment (the “***Phase I***”) on all parcels ofOwned Real Property and with respect to Honsberg’s leased factory in Remscheid,Germany, and, if warranted based on the recommendation of the Consultant basedon the results of the Phase I an additional limited subsurface****assessment (the “***Phase II***”)of such areas of the Real Property warranting such further assessment, as theParties shall in detail and in good faith reasonably agree, *provided that* the Phase I (and thePhase II, if applicable) shall be conducted by an independentenvironmental consultant (the “***Consultant***”)selected by UNOVA and reasonably acceptable to Purchaser (which acceptanceshall not be unreasonably withheld or delayed) and in a reasonable manner,during normal business hours, and in such a way as to minimize the disruptionto the Business; *provided, further,*thatno Phase II assessment shall take place with respect to any matterreflected, disclosed or described on **Schedule 3.6(d) **forwhich UNOVA bears or would bear responsibility under **Section 1.7(e)**.  UNOVA shall use reasonable efforts to causethe Phase I assessments to be completed at least six days prior to the TransferDate, and to cause any required Phase II assessments to be completed within 120days following the Transfer Date.  It isunderstood and agreed that if the parties agree that if the result of the

 

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Phase II assessment is that the Consultantrecommends further investigation, UNOVA shall perform, at its sole expense,such further subsurface investigation as recommended by the Consultant or asotherwise agreed by the parties, and the results of such further investigationshall be included in the final Environmental Report (as defined below) for thatparcel of Real Property.  The conclusionsof the Consultant based on the Phase I (and the Phase II, ifapplicable) shall be reflected in a report prepared by the Consultant anddelivered to UNOVA, a copy of which UNOVA shall promptly furnish to Purchaser(the “***Environmental Report***”),together with the appropriate Consultant’s reliance letter entitling Purchaserto rely on the Environmental Report.  Consultantshall prepare a separate Environmental Report for each Owned Real Property.  The purpose of the Environmental Report is toprovide evidence of the condition of such Real Property prior to the TransferDate.  UNOVA shall provide to Purchaserand the Consultant reasonable access to all material non-privileged (in thesense of attorney-client privilege) documentation and information in itspossession relative to the environmental condition of the Real Property.

 

### **(b)**                                  EnvironmentalResponse Plan

### ** **

Tothe extent the Environmental Report identifies any physical condition at, on orunder the Real Property that gives Purchaser a reasonable basis to suspect thepresence of Hazardous Substances at levels or in quantities likely to give riseto an obligation to report a release under Environmental Law or to conduct aremoval or remedial action under any applicable Environmental Law in effect asof the Transfer Date or to require under applicable Environmental Law amaterial upgrade or improvement to any treatment facilities associated withpermitted air and water discharge points, the Parties shall agree in good faithupon an appropriate removal or remedial procedure at the cost of UNOVA (the “***Environmental Response Plan***”), whichEnvironmental Response Plan may involve further subsurface assessments, *provided, however,* that UNOVA, in its solediscretion, after consultation with Purchaser, may make whatever notificationsof Governmental Bodies it believes are required by Environmental Law withrespect to any condition discovered before the Transfer Date, and Purchaser, inits sole discretion, after consultation with UNOVA, may make whatevernotifications of Governmental Bodies it believes are required by EnvironmentalLaw after the Transfer Date.  IfPurchaser and UNOVA fail to agree upon an Environmental Response Plan within60 days of the issuance of the Environmental Report, the parties shallattempt in good faith to resolve any disputes for a period of at least30 days.  If at the end of such 30-dayperiod no resolution is achieved, Purchaser and UNOVA shall jointly selectanother environmental consultant who shall resolve such dispute, whichresolution shall be final and binding on the Parties.  There shall be no precondition to any remedyincluded in the Environmental Response Plan prepared pursuant to thisAgreement.  Selection of the remedy shallbe based upon the recommendations of the Consultant and current best availabletechniques and technologies which are currently employed in remedial projectsof a similar nature.  UNOVA shall use itsreasonable best efforts to ensure that any action necessary to implement theEnvironmental Response Plan will be performed with minimal disruption to theBusiness.  Purchaser or subsequent ownersof the Owned Real Property will cooperate with all reasonable filing,petitions, or other legal proceedings necessary to execute any actions pursuantto the Environmental Response Plan.

 

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### **(c)**                                  Restrictionson Post-Closing Testing

### ** **

Purchaseragrees that, except for any required remediation or removal activities ofHazardous Substances arising from the operation of the Business following theTransfer Date, for a period of three years after the Transfer Date Purchaserwill not, and Purchaser will cause its Affiliates and its and its Affiliates’respective acquirors or successors in interest (including any acquirors of realproperty used in the Business) to not, conduct any “***SubsurfaceEnvironmental Investigation***” (as defined below) unless (i) requiredto do so by a Governmental Body, (ii) Purchaser has, based on actualobservation of physical conditions or documentary evidence, a reasonable basisto believe that there are Hazardous Substances attributable to the operation ofthe Business prior to the Transfer Date at levels or in quantities reasonablylikely to give rise to an obligation to report a release under EnvironmentalLaw or to conduct a removal or remedial action under any applicable EnvironmentalLaw, (iii) during any expansion, renovation or addition to a facility ofthe Business, undertaken in the ordinary course, Purchaser discovers thepresence of Hazardous Substances attributable to the operation of the Businessprior to the Transfer Date at levels or quantities that are reasonably likelyto give rise to an obligation to report a release or to conduct a removal orremedial action under any Environmental Law as in effect at the Transfer Date, (iv) inresponse to a discharge or release of a Hazardous Substance following theTransfer Date to the extent required by Environmental Law, or (v) reasonablesuspicion of the presence of Hazardous Substances exists as the result of aPhase I or Phase II environmental assessment conducted by a subsequentpurchaser or potential purchaser of the subject property.  “***Subsurface EnvironmentalInvestigation***” shall mean any qualitative environmental analysisof the subsurface environment at or under Real Property to detect the presenceof Hazardous Substances, including any testing or analysis of the soil, thesubsurface geology, any known or suspected subsurface vessel or structure, orany groundwater, whether in a perched or deep aquifer.

 

## **5.9**                               Nondisclosureby Purchaser

## ** **

Eachof Mainco and Purchaser shall hold in confidence, and shall use all reasonableefforts to cause its representatives and its Affiliates to hold in confidence,between the Agreement Date and the Transfer Date, any and all confidential orsecret information in respect of the Business furnished to it, itsrepresentatives or its Affiliates by any of the Selling Entities in connectionwith this Agreement and not to disclose or publish such information without theprior written consent of UNOVA.  In theevent that this Agreement is terminated and the transactions provided for inthis Agreement are abandoned as contemplated by Section 10.1, the terms ofthat certain Confidentiality Agreement, dated May 25, 2004, between MTNCapital Partners (“***MTN***”), a predecessor ofMainco, and UNOVA (the “***Confidentiality Agreement***”),shall remain in full force and effect, and Mainco and Purchaser confirm thatthey will comply with MTN’s obligations thereunder as if it were substitutedfor Mainco as a party thereto.

 

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## **5.10**                        Statusof Purchaser’s Financing

## ** **

Maincoand Purchaser shall at all times keep the Selling Entities fully informedregarding the status of the financing Purchaser is arranging in connection withthis Agreement.

 

## **5.11**                        Reorganizationof U.K. Pension Plans

## ** **

UNOVA UK will use reasonableendeavors to establish prior to the Transfer Date (and if UNOVA UK has not doneso by the Transfer Date, the Purchasing Entity which immediately after Closingbecomes the employer of the Employees of the Lamb U.K. division shallcause to be established as soon as practicable after the Transfer Date and, inany event, within 2 months after the Transfer Date) an “occupationalpension scheme” as defined in Section 1 of the Pension Schemes Act 1993which is capable of approval as an “exempt approved scheme” for the purposes ofChapter I of part XIV of the Income and Corporation Taxes Act of 1988 (the “***CMUK DC Plan***”) which Employees ofthe Lamb U.K. division as at the Transfer Date are able to join for futurepension benefits and life insurance benefits on the same terms and with thesame contribution and benefit structure as apply in respect of them as of theAgreement Date in the Lamb U.K. defined contribution section of the UNOVAPension Fund (“***UPF***”), and the Purchasershall ensure that such Employees are invited prior to or within 2 monthsafter the Transfer Date to join the CMUK DC Plan with effect from a date nolater than the Transfer Date.  The relevantPurchasing Entity shall procure that within 3 months after the TransferDate each such Employee who joins the CMUK DC Plan with effect from a date nolater than the Transfer Date is invited to transfer all their accrued benefitsin the UPF to the CMUK DC Plan and that the deadline for such invitation to beaccepted is at least one month, but no more than 2 months, after the dateof issue of the invitation.  The terms ofthe invitation to transfer will be that the funds to be transferred from theUPF in respect of an Employee will be the value of that Employee’s definedcontribution account held in the UPF at the time the transfer is made and thatthe full amount received by the CMUK DC Plan in respect of that Employee willbe allocated to that Employee’s defined contribution account under the CMUK DCPlan so that no charges, commissions or expenses are charged against the amountallocated.  The terms of the invitationto transfer will also require the CMUK DC Plan to provide guaranteed minimumpensions of the same amounts as those payable under the UPF, together with theincreases in such pensions provided by the relevant Governmental Body whichwill be lost on transfer, in respect of the Employees who accept theinvitation.  With respect to any Employeewho accepts this invitation to transfer, the relevant Purchasing Entity shallcause the trustees of the CMUK DC Plan to accept the transfer on theseterms and shall ensure that the transfer is made as soon as practicable afterthe deadline for acceptance of the invitation and, in any event, within 14 daysafter any regulatory requirements and consents necessary for the transfer havebeen met or obtained (which requirements and consents the relevant PurchasingEntity shall use its best efforts to ensure are met or obtained assoon as possible).  Neither Purchaser norany of its Affiliates shall take any action or assist any other person in anymanner which would result in the UPF having to pay a larger amount to the CMUK DCPlan in respect of any such Employee than the amount contemplated above.

 

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The parties acknowledge thatUNOVA UK and CMUK are working to put arrangements in place so that the plansetup and transfer referred to above and merger of the CMUK Supplementary Planinto the CMUK Plan (as both expressions are defined in Section 8.4(b)(v))are completed before the Transfer Date and the parties agree that UNOVA UK andCMUK are permitted to continue this process after the Agreement Date.  The parties recognize and agree that the CMUKDC Plan will have to be a contracted-out plan for at least one day to enablethe transfers contemplated by this Section 5.11 to take place.

 

## **5.12**                        PurchaserSubsidiaries

## ** **

The Parties acknowledge that,as of the date of this Agreement, the Purchaser has not yet formed any of thePurchaser Subsidiaries.  Each of Purchaserand Mainco hereby agree to take all steps reasonably necessary to (a) formthe Purchaser Subsidiaries as soon as possible or, with respect to Germany,acquire a shelf company, (b) make the Purchaser Subsidiaries parties to thisAgreement, including providing for representations, warranties, covenants andagreements equivalent to those made by the other Purchasing Entities under thisAgreement, and (c) obtain all franchises, licenses, approvals, permits andother authorizations necessary to enable the Purchaser Subsidiaries to consummatethe purchase of the Purchased Assets and the assumption of the AssumedLiabilities as contemplated by this Agreement.

 

## **5.13**                        PlanningAct (Ontario)

## ** **

Theprovisions of this Agreement relating to the purchase and sale of Owned RealProperty in Ontario are entered into subject to the express condition that theyare to be effective only if the subdivision control provisions of the PlanningAct (Ontario) are complied with.  TheSelling Entities covenant to proceed diligently at their own expense to obtainany necessary consent by Closing.

 

**5.14**                        ElectronicRegistration of Owned Real Property

** **

Ifelectronic registration (the “***E-Reg***”) ismandatory in the Land Titles Office in which the Owned Real Property located inOntario is registered, the following provisions shall prevail, namely:

 

(a)                                  the Purchasing Entities’ solicitor and theSelling Entities’ solicitor shall each be obliged to be authorized E-Reg usersand in good standing with the Law Society of Upper Canada, and are herebyauthorized by the parties hereto to enter into a document registrationagreement in the form adopted by the Joint LSUC-CBAO Committee on ElectronicRegistration of Title Documents on April 15, 2002 or any replacementthereof (hereinafter referred to as the “***DRA***”),establishing the procedures and timing for completing this transaction, whichDRA shall be exchanged between the Selling Entities’ solicitor and thePurchasing Entities’ solicitor no later than ten (10) days before theTransfer Date;

 

(b)                                 the delivery and exchange of all closingdeliveries hereunder and the release thereof to the parties hereto shall begoverned by the DRA, pursuant to which the solicitor

 

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receiving any closing deliveries will be required tohold same in escrow, and will not be entitled to release same except in strictaccordance with the provisions of the DRA;

 

(c)                                  it is expressly understood and agreed by theparties hereto that an effective tender shall be deemed to have been made byeither party (the “***Tendering Party***”) upon theother party (the “***Receiving Party***”) when thesolicitor for the Tendering Party has completed, in addition to all otherrequirements to effect a valid tender in accordance with the provisions of thisAgreement and the DRA, all steps required by E-Reg in order to complete thistransaction that can be performed or undertaken by the Tendering Party’ssolicitor without the cooperation or participation of the Receiving Party’ssolicitor, and specifically when the Tendering Party’s solicitor has, whereverpossible, electronically “signed” the Transfer/Deed of Land and all otherinstruments to be registered against title to the Property on the Transfer Datefor completeness and granted “access” to the Receiving Party’s solicitor.

 

(Article 6 follows)

 

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# **ARTICLE 6.Conditions Precedent to the Obligations of the Purchasing Entities to Close**

# ** **

Eachand every obligation of the Purchasing Entities to be performed at Closingshall be subject to the satisfaction of the following conditions:

 

## **6.1**                               Representationsand Warranties True

## ** **

Therepresentations and warranties made by the Selling Entities in this Agreementshall be true and correct in all respects on the Transfer Date as if made againand reaffirmed on such date, except where the failure of such representationsand warranties to be so true and correct would not reasonably be expected tohave or result in, individually or in the aggregate, a material adverse effecton the Business; *provided, however,* that theSelling Entities shall have the right to update the Schedules to this Agreementfor matters occurring in the ordinary course of the Business, so long as theitems disclosed on the updated Schedules do not constitute a material adverseeffect on the Business.

 

## **6.2**                               ComplianceWith Agreement

## ** **

TheSelling Entities shall have performed and complied in all material respectswith all of the obligations under this Agreement which are to be performed orcomplied with by them on or prior to the Transfer Date.

 

## **6.3**                               NoMaterial Adverse Change; Net Working Capital

## ** **

Thereshall have been no material adverse change in the operations of the Business,taken as a whole.  The net workingcapital of the Selling Entities at the Transfer Date shall not be less than $130,500,000.

 

## **6.4**                               NoLitigation

## ** **

Noinvestigation, suit, action or other judicial or governmental proceeding shallbe pending or threatened before any court or Governmental Body which may resultin the restraint or prohibition or the obtaining of substantial damages inconnection with this Agreement or the consummation of the transactions providedfor in this Agreement, or that may adversely affect the Purchaser’s ability tooperate the Business after the Transfer Date.

 

## **6.5**                               Proceedingsand Instruments Satisfactory

## ** **

Allproceedings to be taken by the Selling Entities in connection with thetransactions provided for in this Agreement and the Related Agreements, shallbe reasonably satisfactory in form and substance to Mainco and Purchaser; andthe Selling Entities shall have made

 

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available to Mainco and Purchaser for examinationthe originals or copies of all documents which Purchaser may reasonably requestin connection with said transactions.

 

## **6.6**                               Consentsand Approvals

## ** **

TheParties shall have obtained all necessary and material authorizations, consentsand approvals required for the valid consummation of the transactions providedfor in this Agreement, and each of them shall be in full force and effect.  Without limiting the generality of theforegoing, (i) if applicable, the time period under the HSR Act shall haveexpired, and no adverse action shall have been threatened or instituted inconnection therewith, and (ii) if applicable, the German Federal CartelOffice shall have approved or been deemed to have approved the transactionsprovided for in this Agreement.

 

## **6.7**                               Instrumentsof Transfer

## ** **

Theapplicable Selling Entities shall have executed and delivered to Purchaserbills of sale meeting all necessary requirements of United States and foreignLaws (including an in-rem bill of sale under German law) and stock assignmentssufficient to transfer to the Purchasing Entities the Purchased Assets and theShares as well as deeds conveying the Owned Real Property to Purchaser, whichdeeds shall be of the same type as originally used to convey the Owned RealProperty to the Selling Entity.  TheSelling Entities shall also deliver the following:

 

(a)                                  A certificate of the Secretary or anAssistant Secretary (or local equivalent) of each of the Selling Entitiessetting forth a copy of the resolutions duly adopted by their Boards ofDirectors and stockholders authorizing and approving the execution and deliveryof this Agreement and the consummation of the transactions contemplated hereby;

 

(b)                                 Appropriate instruments authorizing Purchaserto endorse in the name of the Selling Entities all checks, drafts, notes andother instruments for the payment of money and to receive for the account ofthe Purchasing Entities all proceeds thereof to which the Purchasing Entitiesare entitled under this Agreement;

 

(c)                                  A certificate validly executed by a dulyauthorized officer of the Selling Entities in a form reasonably acceptable toPurchaser for purposes of satisfying Purchaser’s obligations under TreasuryRegulation Section 1.1445-2(c)(3);

 

(d)                                 A transfer agreement relating to assetslocated in the United Kingdom in form and substance reasonably acceptable tothe parties; and

 

(e)                                  A Safety Standard Certificate for each of themotor vehicles that form part of the Purchased Assets which are located inOntario.

 

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## **6.8**                               Resignationsand Corporate Records

## ** **

UNOVAshall have delivered to Purchaser (i) the resignations, effective as ofthe Transfer Date, of all of the officers and directors of each of theTransferred Subsidiaries (other than those officers and directors, if any, whoPurchaser has designated to remain), and (ii) the corporate records ofeach of the Transferred Subsidiaries, including without limitation its minutebook, registrar, stock certificates, files related to its corporate existence,and certified copies of the articles of incorporation and by-laws (or theirsubstantial equivalents), as amended and in effect.

 

## **6.9**                               TransitionalServices Agreement

## ** **

UIASIshall have executed and delivered to Purchaser agreements in the forms of **Exhibit C-1** and **Exhibit C-2**(together, the “***Transitional ServicesAgreements***”) pursuant to which (i) the Cincinnati LambGroup shall continue to provide certain services to the Landis Grindingdivision of UIASI and the Landis Lund division of UNOVA UK (whether or not suchdivisions continue to be owned by UIASI and UNOVA UK, respectively), includingwithout limitation certain payroll services and the continued use of the Lambbusiness system, and (ii) UNOVA shall provide certain services to theCincinnati Lamb Group on reasonable terms and conditions as set forth in theTransitional Services Agreements.

 

## **6.10**                        TitleReports

## ** **

Priorto the Closing Date, Purchaser shall have obtained, at its expense, acommitment for an owner’s policy of title insurance for the Owned Real Propertyowned by the Selling Entities, in which the title insurance company issuing thecommitment shall agree to insure title to such Owned Real Property by astandard ALTA policy with such endorsements as may be acceptable to Purchaserto insure title to such Owned Real Property, including, without limitation,easements and appurtenances thereto, showing good and marketable title in feesimple to such Owned Real Property to be vested in Purchaser, free and clear ofall leases, tenancies, rights or claims on occupancy by others, Contracts,mortgages, Liens and other evidences of indebtedness, except for PermittedLiens or approved by Purchaser. Purchaser shall notify the Selling Entities of any matters which renderthe title to any Owned Real Property unsatisfactory to Purchaser.  Nothing herein contained shall be deemed awaiver by Purchaser of any objections or exceptions to, or defects in, thetitle to any Owned Real Property arising after the date of such commitment andprior to the Transfer Date.  The SellingEntities agree to furnish such indemnities as may be required by the titleinsurance company and affidavits or such other documents, in each case, as maybe required to vest in Purchaser good and marketable title in fee simple tosuch Owned Real Property, free and clear as described above.

 

## **6.11**                        HonsbergSublease

## ** **

Honsbergand the relevant Purchasing Entity shall have entered into an agreement onterms and conditions satisfactory to the Parties for the sublease (the “***Honsberg Sublease***”)

 

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of the real property currently leased by Honsberg inconnection with the Business.  TheHonsberg Sublease shall be in full force and effect and shall have beenconsented to by the landlord with respect to the Honsberg property.  Among other terms and conditions the HonsbergSublease shall contain (a) a covenant by Honsberg, upon the writtenrequest and at the expense of the relevant Purchasing Entity, to exercise anyavailable renewal option(s) under the Honsberg master lease, and (b) a covenantby the relevant Purchasing Entity to extend the term of the sublease for thesame period covered by any renewal option exercised by Honsberg at thePurchasing Entity’s request.

 

(Article 7 follows)

 

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# **ARTICLE 7.Conditions Precedent to the Obligations of the Selling Entities to Close**

# ** **

Eachand every obligation of the Selling Entities to be performed at Closing shallbe subject to the satisfaction of each of the following conditions:

 

## **7.1**                               Representationsand Warranties True

## ** **

Therepresentations and warranties made by the Purchasing Entities in thisAgreement shall be true and correct in all respects on the Transfer Date as ifmade again and reaffirmed on such date, except where the failure of suchrepresentations and warranties to be so true and correct would not have orresult in, individually or in the aggregate, a material adverse effect on thePurchasing Entities.

 

## **7.2**                               ComplianceWith Agreement

## ** **

Eachof the Purchasing Entities shall have performed and complied in all materialrespects with all of the obligations under this Agreement which are to beperformed or complied with by it on or prior to the Transfer Date.

 

## **7.3**                               NoLitigation

## ** **

Noinvestigation, suit, action or other judicial or governmental proceeding shallbe pending or threatened before any court or Governmental Body which may resultin the restraint or prohibition, or the obtaining of substantial damages inconnection with this Agreement or the consummation of the transactions providedfor in this Agreement.

 

## **7.4**                               Proceedingsand Instruments Satisfactory

## ** **

Allproceedings to be taken by any Purchasing Entity in connection with thetransactions provided for in this Agreement, and all related documents, shallbe reasonably satisfactory in form and substance to the Selling Entities; and thePurchasing Entities shall have made available to the Selling Entities forexamination the originals or copies of all documents which it may reasonablyrequest in connection with said transactions.

 

## **7.5**                               Consentsand Approvals

## ** **

TheParties shall have obtained all necessary and material authorizations, consentsand approvals required for the valid consummation of the transactions providedfor in this Agreement, and each of them shall be in full force and effect.  Without limiting the generality of theforegoing, (a) if applicable, the time period under the HSR Act shall haveexpired, and no adverse action shall have been threatened or instituted inconnection therewith, (b) if applicable, the German Federal Cartel Officeshall have approved or been deemed to have approved the transactions providedfor in this Agreement, and (c) there shall have been received by CMUKdeeds irrevocably executed and delivered by the Purchaser and/or

 

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another Purchasing Entity and the trustees of therelevant plan to substitute Purchaser and/or another Asset Purchasing Entity forCMUK as principal employer of the CMUK Plan, the CMUK Supplementary Plan andthe CMUK DC Plan, which deeds shall be in the form set out in **Exhibit D** in respect of the Cincinnati Machine PensionPlan and in a form reasonably acceptable to the Selling Entities and thePurchaser, but consistent with the principles reflected in the deed set out in **Exhibit D**, in respect of the CMUK DC Plan and theCincinnati Machine Supplementary Pension Plan (the “***PlanDeeds***”).  If the UK InlandRevenue does not approve any of the substitutions referred to in (c) ofthis Section 7.5, the Purchaser shall procure that a company acceptable tothe UK Inland Revenue and the trustees of the relevant plan is made principalemployer of that plan with effect from the Transfer Date on materially the sameterms as contained in the Plan Deeds.

 

## **7.6**                               PurchasePrice

## ** **

Maincoshall have delivered to UNOVA the R&B Cash Payment, and Purchaser shallhave delivered to UNOVA the following:

 

(a)                                  The Cash Payment; and

 

(b)                                 The Secured Note, duly executed by Purchaser.

 

## **7.7**                               Instrumentsof Assumption

## ** **

Purchaserand the other Asset Purchasing Entities shall have executed and delivered tothe applicable Selling Entities instruments of assumption sufficient forPurchaser and the other Asset Purchasing Entities to assume the AssumedLiabilities applicable to the Purchased Assets acquired by them respectively.  The Purchasing Entities shall also deliver acertificate of the Secretary or an Assistant Secretary (or local equivalent) ofeach of such Persons setting forth a copy of the resolutions duly adopted bytheir Boards of Directors authorizing and approving the execution and deliveryof this Agreement and the consummation of the transactions contemplated hereby

 

## **7.8**                               PerformanceBonds

## ** **

Eachof Purchaser and the other Purchasing Entities shall have substituted itscredit (and the credit of the Cincinnati Lamb Group) for the credit of UNOVA orits subsidiaries under any instrument or agreement (the “***PerformanceBonds***”) securing the obligations of the Cincinnati Lamb Groupunder any of their executory contracts, including without limitation thosecontracts and agreements set forth on **Schedules 3.8(h) **and**(j)**, for the face amount of thePerformance Bonds in the aggregate amount of $9,000,000 plus the amount of anyPerformance Bonds related to bid tenders that are not cancelable within 30 daysfollowing the Transfer Date (the “***Required Performance BondAmount***”); *provided, however,*that to the extent that such substitution is not feasible on the Transfer Date,Purchaser and the other Purchasing Entities shall have provided backup lettersof credit acceptable to UNOVA and the issuers of the applicable PerformanceBonds (“***Backup L/Cs***”) in theaggregate amount of the Required Performance Bond Amount.

 

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## **7.9**                               TransitionalServices Agreements

## ** **

Purchaserand any other Purchasing Entities who are parties to a Transitional ServicesAgreement shall have executed and delivered to UIASI the Transitional ServicesAgreements.

 

## **7.10**                        Consentof UNOVA’s Lender

## ** **

UNOVAshall have received the consent of its senior lender to the transactionsprovided for in this Agreement.

 

 

(Article 8 follows)

 

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# **ARTICLE 8.Further Requirements**

# ** **

## **8.1**                               Accessto Books and Records

## ** **

(a)                                  From and after the Agreement Date, thePurchasing Entities and their authorized representatives shall have reasonableaccess, during normal business hours and upon reasonable notice, to inspect andexamine and the right to photocopy all books of account and records of theSelling Entities in respect of the Business or the Transferred Subsidiariesthat relate to the affairs and business of the Cincinnati Lamb Group conductedon or prior to the Transfer Date; *provided*that such inspection, examination and photocopying shall be conducted so as notto unreasonably interfere with the Business.

 

(b)                                 From and after the Transfer Date, the SellingEntities and their authorized representatives shall have reasonable access,during normal business hours and upon reasonable notice, to inspect and examineand the right to photocopy all books of account and records transferred to thePurchasing Entities pursuant to this Agreement that relate to the affairs andbusiness of the Cincinnati Lamb Group conducted on or prior to the TransferDate; provided that such inspection, examination and photocopying shall beconducted so as not to unreasonably interfere with the Business.  To theextent that any books and that constitute Excluded Assets pursuant to Section 1.2(h) arecommingled with the books and records transferred to the Purchasing Entitieshereunder, the Purchasing Entities shall notify the applicable Selling Entitiesbefore destroying any of such books and records and shall afford the SellingEntities a reasonable opportunity to photocopy or take possession of the same.

 

## **8.2**                               FurtherInstruments and Assurances

## ** **

Fromand after the Agreement Date, each of the Parties shall use it reasonable bestefforts to take, or cause to be taken, such other action as may be required tofully and effectively carry out the transactions contemplated by thisAgreement.

 

## **8.3**                               LitigationCooperation

## ** **

### **(a)**                                  SpecifiedLitigation

### ** **

Setforth on **Exhibit E**is a list of certainEmployees (the “***Litigation Required Employees***”)whose assistance and cooperation is required in connection with the pendinglitigation specified on **Exhibit E**(the “***Specified Litigation***”), and thepercentage of each such Employee’s time estimated to be required to providesuch assistance and cooperation. Purchaser and the other Purchasing Entities agree to continue theemployment in the Business of each of the Litigation Required Employees at noless than their current level of compensation until such time as the SpecifiedLitigation has been fully and finally resolved (the “***LitigationTermination Date***”); *provided,however,* that during such time, UNOVA shall reimburse Purchaser andother Purchasing Entities, as applicable, for the percentage of

 

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the direct compensation (salary and fringe benefits)of the Litigation Required Employees specified on **Exhibit E**and reasonable out-of-pocket costs incurred by those Employees in participatingin the Specified Litigation; *and provided further,*thatif Purchaser or another Purchasing Entity would not offer to employ or wouldterminate any of the Litigation Required Employees but for this Section 8.3(a),UNOVA shall reimburse Purchaser or another Purchasing Entity, as applicable, forthe full salary and fringe benefits of such employee, but in such case, neitherPurchaser nor any Purchasing Entity shall require such employee to work in theBusiness.  If any of the LitigationRequired Employees is terminated by Purchaser or any other Purchasing Entity within30 days following the Litigation Termination Date, UNOVA shall reimbursePurchaser or the applicable Purchasing Entity for the severance payable to suchindividual to the extent of any severance that would be payable to suchindividual under UIASI’s severance plan if he were terminated on the TransferDate.

 

### **(b)**                                  OtherRetained Litigation

### ** **

Purchaserand the other Purchasing Entities shall, at the request of UNOVA and withoutcharge to the Selling Entities, use their best efforts to assist and cooperatefully with the Selling Entities in connection with the defense and settlementof all Retained Litigation other than the Specified Litigation (the “***Other Retained Litigation***”).  Such assistance and cooperation shall includewithout limitation making the relevant books and the relevant ContinuingEmployees available to the Selling Entities.

 

### **(c)**                                  UnknownLitigation

### ** **

Exceptas provided in Section 8.3(a) and (b) above with respect toSpecified Litigation and the Other Retained Litigation, if any Party is a partyto any suit, action, proceeding or investigation concerning the Businessconducted on or prior to the Transfer Date (excluding any such suit, action,proceeding or investigation between any of the Selling Entities, on the onehand, and any Purchasing Entity, on the other hand), the Parties shall, uponthe request of the Party involved in such litigation and without charge to suchParty, use their best efforts to assist and cooperate fully with such Party inconnection with such litigation.

 

### **(d)**                                  Controlof Retained Litigation

### ** **

Notwithstandinganything to the contrary contained in this Agreement, the Selling Entitiesshall have control of the defense, investigation and settlement of the RetainedLitigation; *provided however*, that the SellingEntities shall not make any admission of liability or enter into anysettlement, adjustment or compromise of any Retained Litigation without theprior written consent of the applicable Purchasing Entities, which consentshall not be unreasonably withheld or delayed, if as a result of suchadmission, settlement, adjustment or compromise an injunction or othernon-monetary relief would be imposed against any of the Purchasing Entities.

 

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## **8.4**                               CertainEmployee Matters

## ** **

### **(a)**                                  Employment

### ** **

**(i)****                                   **The Selling Entities and the Purchaseracknowledge and agree that the German Civil Code and the Transfer ofUndertakings (Protection of Employment Regulations) 1981 (“***TUPE***”)apply to the sale of Honsberg, UNOVA UK and CMUK respectively (collectively,the “***Transferring Selling Entities***”) andthat accordingly all the rights, powers, duties and liabilities under or inconnection with any contract of employment with the Employees assigned to theTransferring Selling Entities (the “***Transferring Employees***”)still in force immediately before the Transfer Date shall be transferred to thePurchaser with effect from the Transfer Date. The Purchaser will (subject to the terms of this Agreement) comply withthe requirements of the German Civil Code and TUPE in relation to theTransferring Employees.

 

**(ii)****                               **To the extent that it has not already done soas of the date of this Agreement, the Purchaser shall provide the TransferringSelling Entities with information which the Purchaser is required to supplypursuant to Regulation 10(3) of TUPE, and subject to the provision ofsuch information, UNOVA UK and CMUK agree to comply with their obligationsunder Regulation 10 of TUPE.

 

**(iii)**                            Without prejudice to the TransferringEmployees referred to above, as soon as practicable following the AgreementDate, Purchaser or the applicable Purchasing Entity shall offer employment (andwith respect to the Employees of the Transferred Subsidiaries, shall cause theTransferred Subsidiaries to continue their employment) as of the Transfer Dateto all of those Employees who are not Transferring Employees at their currentwork sites or a work site in the same country and not more than 35 miles fromthe current site, at their current rates of pay and with fringe benefits thatin the aggregate are comparable to those that they currently receive.  Those Employees who are not TransferringEmployees and who accept such offer (or who continue to be employed by eitherof the Transferred Subsidiaries) are referred to collectively as the “***Continuing Employees***.”  Nothing in this Agreement requires Purchaseror any Purchasing Entity to maintain any Continuing Employee’s employment(other than the Litigation Required Employees) for any minimum period, norprohibits Purchaser or any Purchasing Entity from requiring employees from timeto time to spend up to sixty percent (60%) of their work time at locations thatare in a different country or more that 35 miles from their existing work site,if reasonably required for the efficient operation of the Business undercircumstances that are permissible under local labor Laws.  Nothing in this Agreement creates anythird-party beneficiary rights with respect to employment of any Employee.  The preceding sentences are deemed modifiedto the extent inconsistent with the German Civil Code and TUPE.

 

**(iv)****                              **The Purchaser Subsidiary acquiring thePurchased Assets from Honsberg will inform the Employees of Honsberg of thetransfer of the business and the transfer of their employment relationships tosuch Purchaser Subsidiary pursuant to and with the required content provided inSection 613a Para 5 German Civil Code prior to the Transfer Date.  If

 

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any of the Employees of Honsberg object to suchtransfer of employment, or subsequently bring claims against Honsberg inconnection with the transfer of their employment to the Purchaser, thePurchaser shall indemnify Honsberg from all such claims, obligations andliabilities in connection with the continuation, the termination and/or thewinding-up of the respective employment relation.  Apart therefrom, Honsberg will use reasonableendeavors to provide all necessary information, assistance and support in orderto enable the Purchaser Subsidiary to properly fulfill the informationrequirements according to Section 613a Para 5 German Civil Code.

 

**(v)****                                  **Each of UNOVA UK and CMUK undertakes to thePurchaser and the applicable Purchasing Entity that it shall comply in allrespects with Part IV of the Trade Union and Labour Relations(Consolidation) Act of 1992, and that it shall use reasonable efforts toprovide to the Purchaser or the applicable Purchasing Entity such informationas the latter may reasonably request in writing to verify such compliance.

 

**(vi)****                              **The Parties further agree that (A) theprovisions of this Section 8.4(a) are deemed modified to the extentinconsistent with the Korean Labor Standards Act and the Labor Union and LaborRelation Adjustment Act, if applicable, (B) the Purchaser or theapplicable Purchasing Entity shall not dismiss any Employees of CM Koreawithout a justifiable reason under Korean law, and (C) the Purchaser orthe applicable Purchasing Entity shall not modify the employment terms andconditions of CM Korea’s employees, unless such modification is made inaccordance with the employment regulations of CM Korea or with prior writtenconsent thereto by the labor union, if any, or the majority of CM Korea’sEmployees.

 

### **(b)**                                  Certain EmployeeBenefits

### ** **

#### **(i)**                                    Past ServiceCredit

#### ** **

Purchaserand any applicable Purchasing Entity shall credit the Continuing Employees withtheir respective years of continuous service with UNOVA or its Affiliates forpurposes of eligibility and vesting under Purchaser’s or the applicablePurchasing Entity’s employee benefit plans.

 

#### **(ii)**                                Benefits underthe Selling Entities’ Plans

#### ** **

TheSelling Entities shall cease accrual of benefits as of the Transfer Date withrespect to any Continuing Employee under any of their employee benefit plansthat are not assumed by Purchaser or any Purchasing Entity.  Purchaser or the applicable Purchasing Entityshall cause to be paid when due the obligations to any Continuing Employeeunder any employee benefit plan of the Selling Entities that are included inthe Assumed Liabilities.

 

#### **(iii)**                            U.S. Medicaland Health Plan

#### ** **

Purchaserwill have in effect in the United States by December 31, 2005 a groupinsurance program under which Employees of the Cincinnati LambU.S. division (the

 

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“***U.S. Employees***”) will bepermitted to participate in benefits consisting of medical, hospital, life anddental insurance benefits.  Eligibilityfor, the benefits of (including the reservation by Purchaser of the right toterminate or amend such program in whole or in part at any time), and theamount, if any, of employee contributions toward, such group insurance programwill be determined by Purchaser except that the Purchaser’s group insurancewith respect to U.S. Employees will:

 

(A)                              Waive application of its pre-existingconditions provision to any U.S. Employee or covered dependent for anymedical condition such U.S. Employee or covered dependent has as of theTransfer Date unless such condition was or would have been excluded fromcoverage as a pre-existing condition under the applicable Selling Entity’sgroup insurance program covering such U.S. Employee or covered dependentas of the Transfer Date; and

 

(B)                                Credit each U.S. Employee in thePurchaser’s program plan year with eligible expenses incurred by, and claimspaid on behalf of, such U.S. Employee in the current program plan year ofthe Selling Entity’s group insurance program applicable to such Employee forpurposes of satisfying the deductible provisions, the out-of-pocket maximumprovisions and the maximum coverage provisions of the Purchaser group insuranceprogram, but only to the extent the Purchaser program plan year overlaps withthe applicable Selling Entities current program plan year.

 

#### **(iv)**                               Purchaser’s401(k) Plan

#### ** **

Purchasershall offer all Continuing Employees the opportunity to enroll in Purchaser’s401(k) plan (the “***Purchaser’s401(k) Plan***”) subject to the enrollment requirements of thePurchaser’s 401(k) Plan.  Except asotherwise provided below with respect to the “***FSSP/UPPTransition Period***” (as defined below), as soon as Purchasershall have reasonably concluded that UNOVA’s 401(k) plan (the “***FSSP***”) is tax-qualified, it shallcause the Purchaser’s 401(k) Plan to accept the direct rollover of thepre-tax account balance under the FSSP of any Continuing Employee who elects toenroll as an active participant in the Purchaser’s 401(k) Plan and to havesuch account balance transferred to the Purchaser’s 401(k) Plan.  UNOVA shall cause the Plan Administratordesignated under the FSSP to extend the repayment period of a loan of anyContinuing Employee from 30 days to 90 days following the TransferDate, it being understood that any such loan that is not repaid by the end ofthe calendar quarter after the calendar quarter when the most recentinstallment was due will be deemed to be in default.  If requested by Purchaser and if legallypermissible, UNOVA shall permit the employees of the Cincinnati Lamb U.S.division who become Continuing Employees to continue to participate in the FSSPand the UNOVA Pension Plan (the “***UPP*** “) for a period of up to six monthsfollowing the Transfer Date (the “***FSSP/UPP Transition Period”)***“; provided that in such event, Purchaser shall pay to UNOVA (or, in the solediscretion of UNOVA, directly to the FSSP or the UPP, as the case may be) thecontributions, costs and administrative charges relative to the benefits earnedby such employees while participating in the FSSP and UPP during the FSSP/UPPTransition Period.  The payments ofcontributions, costs and administrative charges described in the preceding

 

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sentence shall be made promptly after each payroll period.  In the case of contributions relative tobenefits earned by Continuing Employees under the FSSP, payments for eachpayroll period shall include all employee contributions and related employermatching contributions for such payroll period. In the case of contributions relative to benefits earned by ContinuingEmployees under the UPP, payments for each payroll period shall include apro-rata portion of the required annual employer contribution to the UPP,determined by dividing the projected annual employer contribution to the UPPfor Continuing Employees (as determined by the actuary for the UPP) by thenumber of payroll periods over which Continuing Employees accrue benefits inthe UPP during the year.  In the eventthat Purchaser fails to make such payments as required, UNOVA shall be entitledto immediately terminate the participation of such employees in the FSSP andUPP.  Purchaser shall take all stepsrequired to maintain the tax-qualified status of the FSSP and the UPP (asdetermined by UNOVA in its sole discretion, and including, if necessary,adopting the FSSP and UPP as a co-sponsor), and shall cooperate with UNOVA inmaking any filings required by any Governmental Body with respect to the FSSPand the UPP.

 

#### **(v)**                                   U.K. PensionPlans

#### ** **

Effectiveas of the Transfer Date, Purchaser will procure that one of the PurchasingEntities shall substitute itself as the principal employer under, and assumeresponsibility for and for debts and liabilities arising under the CincinnatiMachine Pension Plan (the “***CMUK Plan***”),the Cincinnati Machine Supplementary Pension Plan (the “***CMUKSupplementary Plan***”), and CMUK DC Plan and shall  on or before the Transfer Date execute anddeliver to CMUK Plan Deeds to effect such substitution.  The relevant Purchasing Entity shall beresponsible for any accrued contributions payable to the CMUK Plan.

 

### **(c)**                                  CertainRetained Responsibility

### ** **

UNOVAshall bear and discharge any and all liability to any present or formeremployee of the Cincinnati Lamb Group arising from his or her employment by theCincinnati Lamb Group accrued on or prior to the Transfer Date under theEmployee Benefit Plans, except where liability is transferred to the CMUK DCPlan or as otherwise provided in Sections 5.11 and 8.4(b)(v) withrespect to the U.K Pension Plans and as provided in Section 1.6(l)with respect to FAS 106 Liabilities.

 

### **(d)**                                  WARN Act

### ** **

Purchaserand the Purchasing Entities shall comply with the applicable provisions of theWorker Adjustment and Retraining Notification Act of 1988 and any similarfederal, state or local Law, regarding the Employees and their employment withPurchaser or any Purchasing Entity following the Transfer Date, and shallindemnify the Selling Entities in respect thereof.  The Selling Entities shall comply with the applicableprovisions of the WARN Act and any similar federal, state or local lawregarding the Employees and their employment with the Selling Entities prior toor as of the Transfer Date, and shall, subject to

 

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satisfaction of the covenants of the PurchasingEntities in Section 8.4(a), indemnify Purchaser and Purchasing Entitiesfor their Losses in respect thereof.

 

### **(e)**                                  CertainAgreements Regarding Severance

### ** **

(i)                                     Purchaser and the applicable PurchasingEntity shall be responsible for any severance and other amounts payable to anyEmployee below the level of Director to whom Purchaser or the applicablePurchasing Entity does not offer employment or offers employment at a locationin the same country that is over 35 miles from his or her work site on theTransfer Date or offers employment in another country, in each case, on theterms set forth on **Exhibit F**(the “***Severance Terms***”); *provided, however*, that the SellingEntities shall be responsible for all severance payable pursuant to anyindividual written employment agreements other than written employment agreementswith Honsberg, UNOVA UK and CMUK for Employees below the executive officerlevel.  Each of the Purchaser and theapplicable Purchasing Entities covenants and agrees that if an Employee at orabove the Director level is not offered employment pursuant to this Agreementand is paid severance by any of the Selling Entities under this Section 8.4(e),then for a period of 12 months following the Transfer Date the Purchaser andthe Purchasing Entities shall not, and shall not permit any of their Affiliatesto, hire or otherwise employ such Employee. In the event that any Continuing Employee at the level of Director orabove is terminated by Purchaser or a Purchasing Entity before the expirationof the period of earned severance as indicated on **Exhibit F**,Purchaser shall pay such individual the amount of such earned severance,, lessthe period of employment with Purchaser.

 

(ii)                                  In the event that the restructure of LambU.K. (the “***Lamb U.K. Restructure Plan***”)shall not have been completed by the Selling Entities prior to the TransferDate, UNOVA shall loan Purchaser and/or the relevant Purchasing Entity theamount of cash allocated in the Lamb U.K. Restructure Plan for the severance ofany Continuing Employee who is identified as part of the Lamb U.K. RestructurePlan.  Purchaser shall deliver to UNOVA anote in the amount of £778,000 (the “***Lamb U.K. Restructure Note***”).  The Lamb U.K. Restructure Note shall bearinterest at the rate of annual LIBOR + 2% and shall be payable on the one yearanniversary of the Transfer Date.  TheLamb U.K. Restructure Note shall be unsecured. Except as provided otherwise in this Section 8.4(e)(ii) or asconsented to in writing by UNOVA, which consent will not be unreasonablywithheld, the Lamb U.K. Restructure Note and credit documents relating to theLamb U.K. Restructure Note will reflect terms and conditions and subordinationprovisions substantially similar to those between the Purchasing Entities andtheir senior lender as contemplated by the term sheet attached to thisAgreement as **Exhibit A.**

 

### **(f)**                                    CertainAgreements Regarding Personnel in Spain and France

### ** **

The Purchasing Entitiesacknowledge that the Selling Entities utilize the personnel listed on **Schedule 8.4(f) **(“***Certain Personnel***”)in connection with the Business in Spain and France.  The Purchaser covenants and agrees that assoon as practicable, and in no event more than three months following theTransfer Date, Purchaser will in each of Spain

 

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and France (i) form an entity, or (ii) enterinto a contract with a third party, in each case for the purpose of (A) offeringemployment to the Certain Personnel located in such country, and (B) dischargingthe obligations of the Purchasing Entities under Sections 8.4(a) through8.4(e) of this Agreement with respect to the Selling Entities and theCertain Personnel who become Continuing Employees.  Purchaser agrees that, except as otherwiseset forth in this Agreement, Purchaser shall indemnify the Selling Entities forany Loss incurred by the Selling Entities or their Affiliates in connectionwith the employment or termination of the Certain Personnel after the TransferDate.

 

## **8.5**                               AgreementsRegarding Intellectual Property

## ** **

### **(a)**                                  Use of UNOVA Nameand Mark

### ** **

Notwithstandingthe provisions of Section 1.2(i), from and after the Transfer Date,Purchaser and the Purchasing Entities shall be permitted to use, in theoperation of the Business, (i) the existing inventories of raw materials,work-in-process and finished goods that bear the names “UNOVA” or “UNOVAIndustrial Automation Systems, Inc.” or any variation thereof or anytrademark relating thereto, or any acronym or abbreviation thereof(collectively, the “***Seller Names***”) for areasonable period to exhaust such inventories, but in no event longer than sixmonths following the Transfer Date, and (ii) existing stationery,packaging, shipping, invoices, purchase orders and similar supplies which bearany of the Seller Names for the period necessary to exhaust such supplies, butin no event longer than three months following the Transfer Date; *provided, however,* that in each case,Purchaser and the Purchasing Entities shall use reasonable efforts (to theextent commercially feasible) to overprint, overstamp, apply an appropriatelabel or otherwise obliterate the Seller Names on such items or shall otherwiseindicate that the Business has been sold to Purchaser and the PurchasingEntities and is independent of any of the Selling Entities.  Purchaser and the Purchasing Entities shallnot use or permit any of the Cincinnati Lamb Group to use the name “CincinnatiMilacron”, or any confusingly similar name or mark, or any trademarks(including applications and registrations therefor) relating thereto, or anyacronym or abbreviation thereof.

 

### **(b)**                                  IndustrialAutomation Systems

### ** **

Effectiveas of the Transfer Date, the Selling Entities hereby grant to the PurchasingEntities a non-exclusive, worldwide, royalty free, perpetual right and licenseto use the name “Industrial Automation Systems” in connection with theBusiness; *provided however* that the SellingEntities shall continue to have the right and license to use the nameIndustrial Automation Systems in connection with the conduct of theiroperations after the Transfer Date, and further provided that the SellingEntities make no claim or representation to a prior exclusive right to use thename Industrial Automation Systems, it being understood that the nameIndustrial Automation Systems is in common usage by other third parties.  The right and license to the PurchasingEntities granted herein shall not include the right and license to use the nameIndustrial Automation Systems in combination with the name UNOVA or anybusiness names in use by UNOVA in the United States or in any foreign countries(other than

 

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in connection with the Business), or any namesconfusingly similar thereto, except as described in Section 6.5(a) hereto.

 

### **(c)**                                  CertainLicensed Intellectual Property

### ** **

Exceptas otherwise provided in this Agreement, to the extent that LicensedIntellectual Property exists as of the Transfer Date that is used by theCincinnati Lamb Group in the conduct of the Business, on the one hand, and isused by the remaining operations of UIASI or UNOVA UK in the conduct of theiroperations other than in the Business, on the other hand, the parties agree asfollows:

 

#### **(i)**                                    Purchaser’sLicense of Licensed Intellectual Property

#### ** **

Effectiveas of the Transfer Date, the Purchasing Entities hereby grant to the SellingEntities, for the Selling Entities’ benefit, a non-exclusive, worldwide,royalty free, perpetual right and license to utilize any Licensed IntellectualProperty, to continue to use such Licensed Intellectual Property other than inthe Business.

 

#### **(ii)**                                Seller’sLicense of Licensed Intellectual Property.

#### ** **

Effective as of the Transfer Date, the SellingEntities hereby grant to the Purchasing Entities, for the Purchasing Entities’benefit, a non-exclusive, worldwide, royalty free, perpetual right and licenseto utilize any Licensed Intellectual Property, to continue to use suchintellectual property in the Business.

 

**(d)****                                 ****LicenseTransfer**

 

TheSelling Entities, at their sole cost and expense, shall pay any costs or feesnecessary for obtaining the transfer of software licenses relating primarily orexclusively to the Business.

 

## **8.6**                               Exclusivity

## ** **

Untilthe earlier of the Closing or termination of this Agreement, the SellingEntities shall not, and shall not permit or authorize any of their officers,directors, agents or representatives to, directly or indirectly, solicit orencourage any “***Acquisition Proposals***” (asdefined below) or participate in any discussions or negotiations relating to anAcquisition Proposal relating, directly or indirectly, to the Cincinnati LambGroup.  Until the earlier of the Closingor termination of this Agreement, UNOVA shall promptly notify Purchaser inwriting of any such Acquisition Proposal or any communication or indicationfrom any person that it or any other person is considering making such anAcquisition Proposal, whether oral or written. The term “***Acquisition Proposal***” shallmean any proposal for any business combination involving the Cincinnati LambGroup or the acquisition, directly or indirectly, of all or a portion of thePurchased Assets or the Shares.

 

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## **8.7**                               Taxes

## ** **

### **(a)**                                  Taxes Relatingto the Business and the Transferred Subsidiaries

### ** **

(i)                                     Subject to the provisions of Section 8.7(e),after the Transfer Date, the Selling Entities shall pay all Taxes with respectto the ownership, use or operation of the Purchased Assets on or prior to theTransfer Date and the Purchaser or its Affiliates shall pay all such Taxes withrespect to the ownership, use or operation of the Purchased Assets after theTransfer Date.  Any and all real property Taxes, personal property Taxes, assessments,utilities, lease rentals, fuel and other charges applicable to the PurchasedAssets that are payable in the year that includes the Transfer Date shall bepro-rated to the Transfer Date based on the percentage of the year prior to theTransfer Date, and such Taxes and other pro-rated amounts shall be allocatedbetween the Parties by adjustment to the Purchase Price at the Closing.

 

(ii)                                  The Selling Entities shall be responsible forand shall indemnify the Purchaser or its Affiliate for any Tax liability of theSelling Entities (or any predecessors thereof) arising pursuant to TreasuryRegulations Section 1.1502-6 (or any comparable provision of state,local or non-U.S. law).

 

### **(b)**                                  Tax Returns

### ** **

#### **(i)**                                    ConsolidatedReturns

#### ** **

Maincoand the Purchaser shall cause each of the Transferred Subsidiaries to consentto join, for all taxable periods ending on or before the Transfer Date forwhich it is eligible to do so, in all consolidated, combined, or unitary TaxReturns of or including the applicable Selling Entity or any member of itsAffiliated Group that UNOVA requests it to join.  The Selling Entity shall prepare and file (orcause to be prepared and filed) all such consolidated, combined, or unitary TaxReturns which relate to the Transferred Subsidiaries, and shall pay (or causeto be paid) all Taxes to which such Tax Returns relate for all periods coveredby such Tax Returns, except to the extent such Taxes are reflected on theClosing Balance Sheet (in which case Mainco or the Purchaser, as the case maybe, shall promptly pay to the Selling Entity on demand an amount equal to suchTaxes).  Such Tax Returns (and thetaxable year that begins the day after the Transfer Date) shall be prepared inaccordance with Treasury Regulations Section 1.1502-76 (orcomparable provisions of state, provincial, local or foreign Tax Laws);provided however that no election under Treasury Regulations Section 1.1502-76(b)(2)(ii) (orcomparable provisions of state, provincial, local or foreign Tax Laws) shall bemade.

 

#### **(ii)**                                SeparateReturns

#### ** **

Maincoand the Purchaser shall prepare (or cause to be prepared), execute, and timelyfile all Tax Returns of each of the applicable Transferred Subsidiaries (otherthan consolidated, combined, or unitary Tax Returns) for all periods ending onor prior to the Transfer Date and all periods that begin before the Transfer Dateand end after the Transfer

 

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Date that are required to be filed after the Transfer Date, and shallpay (or cause to be paid) all Taxes to which such Tax Returns relate for allperiods covered by such Tax Returns.  Allsuch Tax Returns shall be prepared in accordance with the past practice of theapplicable Transferred Subsidiary, unless otherwise required by applicable TaxLaw.  Mainco and the Purchaser shallpermit UNOVA (on behalf of the applicable Selling Entity) to review and commenton each such Tax Return no later than thirty (30) days prior to the filingof such return and shall not file any such return without UNOVA’s writtenconsent, which consent shall not be unreasonably withheld.

 

### **(c)**                                  Tax Contests

### ** **

Withrespect to any audit, court proceeding or other dispute with respect to any Taxmatter (“***Tax Contest***”) that arises ina consolidated, combined or unitary Tax Return for a period ending on or beforethe Transfer Date that affects either of the Transferred Subsidiaries, any ofthe Selling Entities or any member of any Affiliated Group thereof, the commonparent of the Affiliated Group shall have the right to represent the interestsof the Transferred Subsidiary, the Selling Entity and other member of anyAffiliated Group thereof, to employ counsel of its choice at its expense and tocontrol the conduct of such Tax Contest, including settlement or otherdisposition thereof.  Mainco and thePurchaser shall have the right to control the conduct of any Tax Contestrelating to either of the Transferred Subsidiaries with respect to any Taxmatter arising in a period ending after the Transfer Date; provided, however,that UNOVA (on behalf of the applicable Selling Entity) shall have the right tofully participate in that portion of any Tax Contest relating to Taxes forwhich the Selling Entity may be responsible.

 

### **(d)**                                  Cooperation

### ** **

TheSelling Entities, on the one hand, and the Purchasing Entities and theCincinnati Lamb Group, on the other, shall cooperate (and cause theiraffiliates to cooperate) with each other and with each other’s agents,including accounting firms and legal counsel, in connection with Tax mattersrelating to the Cincinnati Lamb Group, including (i) preparation andfiling of Tax Returns, (ii) determining the liability and amount of anyTaxes due or the right to and amount of any refund of Taxes, (iii) examinationsof Tax Returns, and (iv) any Tax Contests. Such cooperation shall include each Party making all information anddocuments in its possession relating to the relevant member of the CincinnatiLamb Group available to the other Party. The Parties shall retain all Tax Returns, schedules and work papers, andall material records and other documents relating thereto, until the expirationof the applicable statute of limitations (including, to the extent notified byany Party, any extension thereof) of the Tax period to which such Tax Returnsand other documents and information relate. Each of the Parties shall also make available to the other Party, asreasonably requested and available, personnel (including officers, directors,employees and agents) responsible for preparing, maintaining, and interpretinginformation and documents relevant to Taxes, and personnel reasonably requiredas witnesses or for purposes of providing information or documents inconnection with any Tax Contests; *provided,however,* that the requesting Party shall reimburse the other Partyon a time and materials

 

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basis for any such cooperation.  Any information or documents provided underthis paragraph shall be kept confidential by the Party receiving suchinformation or documents, except as may otherwise be necessary in connectionwith the filing of Tax Returns or in connection with any Tax Contests.  Each of the Parties shall, upon request, usetheir reasonable efforts to obtain, at the expense of the requesting Party, anycertificate or other document from any Tax authority or any other person as maybe necessary to mitigate, reduce or eliminate any Tax that could be imposed(including without limitation with respect to the transactions contemplatedhereby).  Without limiting the generalityof the foregoing, Purchaser shall timely deliver to UNOVA (as agent for the SellingEntities) any requested resale, exemption or similar certificate and shall giveall notices as necessary to comply with the occasional sale/casual saleexemptions from sales Tax.

 

### **(e)**                                  Transfer Taxes

### ** **

TheSelling Entities, on the one hand, and the Purchasing Entities, on the otherhand, shall each be responsible for one-half of all real estate, transfer,sales, use, excise, stamp, registration and other such Taxes and fees(including any penalties and interest) incurred in connection with theTransactions, and shall, at their own expense, file all necessary Tax Returnsand other documentation with respect thereto. The Parties shall cooperate with each other to minimize any such Taxes.

 

### **(f)**                                    EmploymentTaxes

### ** **

Purchaser,on behalf of the Purchasing Entities, shall prepare and furnish to each of theContinuing Employees following the Closing a Form W-2 that shallreflect all wages and compensation paid to such employee for the entirecalendar year in which the Transfer Date occurs, and shall file with the SocialSecurity Administration Forms W-2 (Copy A) with respect to suchemployees.  Each such Selling Entityshall furnish to Purchaser the Forms W-4 and W-5, asapplicable, of each such employee.  It isthe intent of the Parties hereunder that the obligations of Purchaser and theSelling Entities under this Section 8.7(f) shall be carried out inaccordance with Section 5 of Revenue Procedure 2004-53.

 

### **(g)**                                 Section 338(h)(10) Elections.

### ** **

(i)                                     At the option of UNOVA, Mainco shall joinwith UNOVA and UIASI in making an election under Section 338(h)(10) ofthe Code and any corresponding or similar provisions of state or local Law (the“***Section 338(h)(10) Elections***”)with respect to the purchase and sale of the R&B Shares hereunder.

 

(ii)                                  Mainco shall assist UNOVA and UIASI in thepreparation of Form 8023 and any accompanying schedules required under Section 338(h)(10) ofthe Code and any corresponding or similar provisions of foreign, state, provincialor local Law.  Mainco shall execute Form 8023and any accompanying schedules and such other documents or forms (the “***Section 338 Forms***”) at theClosing or at such other time as UNOVA may request or as required by the Codein order to effectuate the Section 338(h)(10) Elections.  Except as required pursuant to applicable Lawor a determination (as defined in Section 1313

 

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of the Code or any similar provision of Law), Mainco and UNOVA shallfile all Tax Returns in a manner consistent with the Section 338(h)(10) Elections,Form 8023 and any accompanying schedules and such other documents andforms as are requested by UNOVA to effectuate the Section 338(h)(10) Elections.

 

### **(h)**                                 Section 338(g) Election

### ** **

Uponthe request by Mainco, UNOVA shall take (and shall cause its subsidiaries totake) all actions necessary and appropriate (including timely filing suchforms, Tax Returns, elections, schedules and other documents as may berequired), to effect and preserve a timely Section 338(g) election inaccordance with the requirements of Section 338 of the Code (and any correspondingelections under state, local or foreign Law) with respect to the Purchaser’s orits Affiliates acquisition of the CM Korea Shares.  The parties shall report the sale of the CMKorea Shares pursuant to this Agreement consistently with the Section 338(g) electionand shall take no position contrary thereto or inconsistent therewith in anyTax Return, any discussion with or proceeding before any taxing authority, orotherwise.

 

### **(i)**                                    Interpretation

### ** **

Theprovisions of this Section 8.7 shall control over any conflictingprovisions of Article 11.

 

### **(j)**                                    Tax Treatment

### ** **

(i)                                     It is the intent of the Parties that theTransactions shall be treated, in their entirety, as a fully taxable sale orexchange of the Purchased Assets and qualified stock purchases (within themeaning of Section 338 of the Code) with respect to the Shares, and eachof the Parties shall not take any position on any Tax Return inconsistent withsuch intent.  From and after the date ofthis Agreement, each of the Parties shall use all commercially reasonableefforts to cause the Transactions to be treated, and shall not knowingly takeany actions or cause any actions to be taken that could prevent theTransactions from being treated, as a fully taxable sale or exchange.

 

(ii)                                  Any indemnification payments made pursuant tothis Agreement shall be treated by the Parties, to the extent permitted byapplicable Law, as a purchase price adjustment, unless determined otherwise ina final determination as defined in Section 1313 of the Code.

 

## **8.8**                               Settlementof Intercompany Accounts

## ** **

Onthe Transfer Date, the Selling Entities shall cause all intercompany payablesand receivables (other than trade payables or receivables) to be settled.

 

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## **8.9**                               Cashof the Transferred Subsidiaries

## ** **

UNOVAshall use reasonable efforts to reduce any cash balance of either of theTransferred Subsidiaries prior to the Transfer Date.  To the extent that either of the TransferredSubsidiaries has a cash balance as of the Transfer Date, within ten daysfollowing the Transfer Date, Purchaser shall cause such Transferred Subsidiaryto pay such cash balance to UNOVA.

 

## **8.10**                        PerformanceBonds

## ** **

To the extent that Purchaser or another PurchasingEntity shall not have substituted its credit and/or the credit of theCincinnati Lamb Group under any of the Performance Bonds to the extent providedin Section 7.8, the Purchasing Entities shall effect such substitution andto have the Selling Entities released from liability under such PerformanceBonds within one year following the Transfer Date.  Pending such substitution, Purchaser shallreimburse the Selling Entities for all costs incurred by Selling Entities inmaintaining the Performance Bonds and shall pay such amounts promptly uponreceipt of an invoice therefor.  In theevent that the customer under any executory contract secured by any of thePerformance Bonds shall draw on the Performance Bonds for any reason, theapplicable Selling Entities shall be entitled to immediate reimbursement fromPurchaser for the amount so drawn plus all associated costs incurred by theSelling Entities.  The Selling Entitiesshall be entitled to draw on the Backup L/Cs in connection with suchreimbursement, and if the Backup L/Cs are insufficient to reimburse the SellingEntities, Purchaser shall immediately pay to the Selling Entities the amount ofany such shortfall in cash.

 

## **8.11**                        Name

## ** **

(a)                                  On or as soon as practicable after theTransfer Date, Honsberg will change its corporate name to a name that isdissimilar to its existing corporate name and each of CMUK, Cincinnati MachineU.K. Holdings Limited and Cincinnati Machine Holdings U.K. Limited will changeits name to a name that does not include “Cincinnati Machine.”  UIASI and UNOVA UK, in their capacity asshareholders of Honsberg, agree to pass the necessary shareholder’s resolutionson or as soon as practicable after the Transfer Date and to ensure thatHonsberg will file the change of name with the commercial register immediatelythereafter.  From and after the TransferDate, each of Honsberg, CMUK, Cincinnati Machine U.K. Holdings Limited andCincinnati Machine Holdings U.K. Limited will not use any name similar to orlikely to be confused with its existing name.

 

(b)                                 On or as soon as practicable after the TransferDate, Purchaser will change the corporate name of UII to a name that does notinclude “UNOVA.”  From and after theTransfer Date, Purchaser and the Purchasing Entities will not use any namesimilar to or likely to be confused with “UNOVA.”

 

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**8.12****                       ****Noticeto Director of Investments**

 

No later than thirty (30) days from the TransferDate, Purchaser and/or another Purchasing Entity shall file a notification ofits investment contemplated by this Agreement with the Director of Investmentsin satisfaction of the Investment Canada Act (Canada).

 

**8.13****                       ****TradeName Registrations**

 

                                                On or as soon aspracticable after the Transfer Date, the Selling Entities shall execute theassignment documents prepared by the Purchasing Entities reasonably necessaryto transfer and assign all trade name registrations for the trade names whichform part of the Purchased Asset and the relevant Governmental Body.  The Parties hereto agree to cooperate fullyfor an orderly transfer of such registrations.

 

## **8.14**                        Authorization;Mail

## ** **

TheSelling Entities agree that they will promptly transfer and deliver to thePurchaser any cash or other property that the Selling Entities may receive inrespect of any receivables or other items which shall be transferred toPurchaser or another Purchasing Entity as provided herein.  The Selling Entities authorize and empowerthe Purchaser and the other Purchasing Entities from and after the TransferDate (a) to receive and open mail addressed to them and (b) to dealwith the contents thereof in any manner the Purchaser or the applicablePurchasing Entity sees fit, provided such mail and the contents thereof relateto the Purchased Assets or otherwise to their Business or to any of the AssumedLiabilities.  The Selling Entities agreeto deliver to the Purchaser promptly upon receipt and identification any mail,checks or other documents received by it pertaining to the Purchased Assets orotherwise to the Selling Entities or any of the Assumed Liabilities.

 

## **8.15**                        Post-ClosingCooperation

## ** **

To the extent not already provided for under thisAgreement, each of the parties shall cooperate fully, as and to the extentreasonably requested by the other parties, in providing information that may berequired by such parties in connection with their respective audit, securities complianceand reporting and similar post-Closing activities related to the transactionscontemplated by this Agreement.

 

## **8.16**                        CooperationRegarding U.K. Properties

## ** **

### **(a)**                                  Definitions

### ** **

For the purposes of this Section 8.16, thefollowing definitions shall apply:

 

(i)                                     “***Actual Completion Date***”meansin relation to each of the U.K. Properties the date on which that Property istransferred, conveyed or assigned to the Purchasing Entity.

 

(ii)                                  “***Assurances***”meansthe transfers, conveyances or assignments of the U.K. Properties and “Assurance”shall mean any one of them

 

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(iii)                               “***Freehold Property***”meansthe U.K. Properties as designated on **Schedule 8.16**.

 

(iv)                              “***Landlord’s Consent***”meansany reversioner’s consent to an assignment required under the terms of anylease relating to that Leasehold Property.

 

(v)                                 “***Leasehold Properties***”meansthe leasehold properties occupied by the Selling Entities for the purposes ofthe U.K. portion of the Business which are described in **Schedule 8.16** and “LeaseholdProperty” means any one of them

 

(vi)                              “***Registered Properties***”meansthe U.K. Properties as designated on **Schedule 8.16**;

 

(vii)                           “***Relevant Properties***”meansthose Leasehold Properties which require Landlord’s Consent to assign therelevant property lease and “Relevant Property” shall mean any one of them.

 

(viii)                        “***U.K. Properties***”meansthose freehold and leasehold premises occupied by the relevant Selling Entitiesfor the purposes of the UK portion of the Business which are set out at **Schedule 8.16**, which schedule shall be agreed and attachedto this Agreement within two business days of the date hereof.

 

### **(b)**                                  MattersAffecting the U.K. Properties

 

The U.K. Properties are sold subject to and withthe benefit of:

 

(i)                                     In thecase of the Registered Properties, the exceptions, reservations and covenants(except charges to secure the repayment of money) contained or referred to inthe charges registers of their respective title numbers;

 

(ii)                                  In thecase of the Leasehold Properties, the covenants and conditions on the part ofthe tenant contained in the leases under which the relevant property is held;

 

(iii)                               All local land charges; and

 

(iv)                              All notices served and orders,demands, proposals or requirements made, by any local or other publicauthorities.

 

### **(c)**                                  Landlord’sConsents

 

(i)                                     The saleof the Relevant Properties is subject to the relevant Selling Entity whichoccupies the relevant Leasehold Property obtaining Landlord’s Consent inrespect of that property.

 

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(ii)                                  Therelevant Selling Entity shall as soon as reasonably practicable and at its owncost apply for and use all reasonable endeavours to obtain Landlord’s Consentas soon as possible.

 

(iii)                               ThePurchasing Entity shall use all reasonable efforts to assist the relevantSelling Entity in obtaining Landlord’s Consent and in particular shall promptlyprovide all such information and references as the relevant Selling Entity mayreasonably require in relation to the obtaining of Landlord’s Consent and suchother information as the landlord may be entitled to request under the terms ofthe relevant property lease.

 

(iv)                              ThePurchasing Entity will enter into such covenants as may be reasonably requiredby the landlord of the Relevant Property and provide such additional securityfor the performance by the Purchasing Entity of the tenant’s covenants (whetherby way of guarantee, rent deposit or bank guarantee) as the landlord mayreasonably require.

 

(v)                                 ThePurchasing Entity shall on and from the Transfer Date be permitted to enterinto occupation of the Relevant Property as licensee of the relevant SellingEntity subject to the following provisions:

 

(A)                              The Purchasing Entity shall beentitled to receive all profit and other income from the Relevant Property;

 

(B)                                ThePurchasing Entity shall pay or indemnify the relevant Selling Entity againstall outgoings and expenses attributable to the Purchasing Entity’s period ofoccupation;

 

(C)                                ThePurchasing Entity shall observe and perform all the covenants and conditions(excluding any alienation covenants) contained or referred to in the propertylease relating to the Relevant Property (save that in respect of any covenantsrelating to the repair of the Relevant Property the Purchasing Entity’sliability shall be limited to keeping the Relevant Property in as good repairas when the Purchasing Entity went into occupation (fair wear and tearexcepted)) and indemnify the relevant Selling Entity for any costs orliabilities as a result of any breach or non-observance or non-performance ofsuch covenants and conditions;

 

(D)                               Therelevant Selling Entity so far as it is lawfully able to do so shall permit thePurchasing Entity to remain in occupation of the Relevant Property; and

 

(E)                                 ThePurchasing Entity shall not carry out any activity for which the consent of anythird party may be required without such consent being obtained or carry outany such activity which would constitute a breach or non-observance of thecovenants and conditions in the relevant property lease.

 

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### **(d)**                                  Completion

### ** **

(i)                                     If the Landlord’sConsent is refused or has not been obtained within two months of the TransferDate then both parties consider that the relevant landlord is actingunreasonably in refusing or withholding consent the relevant Selling Entityshall at the request of the Purchasing Entity and at the joint expense of therelevant Selling Entity and Purchasing Entity seek the opinion of a leadingCounsel specialising in landlord and tenant law on whether the landlord isunreasonably withholding or has unreasonably refused consent to the assignment.

 

(ii)                                  If suchleading Counsel advises that the landlord is unreasonably withholding or hasunreasonably refused consent the relevant Selling Entity shall at the jointexpense of both parties apply to a court of competent jurisdiction for adeclaration that the landlord is acting unreasonably.

 

(iii)                               If thedeclaration is obtained the assignment of the Relevant Property shall becompleted five business days thereafter.

 

(iv)                              If thedeclaration referred to in Section 8.16(c)(vi)(C) is refused or such leadingCounsel advises that consent to assign will be refused or withheld the relevantSelling Entity shall as soon as reasonably practicable apply to the relevantlandlord(s) for all necessary consents to the grant of an underlease of theRelevant Property to the Purchasing Entity for a term equal to the residue ofthe term of the relevant property lease less three days at a rent equal to andotherwise on the same terms as the said lease and the provisions ofSections 8.16(c)(iii) and 8.16(c)(iv) shall apply to the obtaining of suchconsent and if such consent is obtained the Selling Entity shall grant and thePurchasing Entity shall accept such underlease on the date five business daysafter the date of receipt of such consent.

 

### **(e)**                                  Completion

### ** **

(i)                                     NotwithstandingSections 1.1, 1.2 and 2.1 of this Agreement, completion of the sale of the U.K.Properties shall take place:

 

(A)                              In the case of the FreeholdProperties, those Leasehold Properties in respect of which Landlord’s Consenthas been obtained and those Relevant Properties where Landlord’s Consent is notrequired, on the Transfer Date; and

 

(B)                                In thecase of the remaining Relevant Properties in respect of which Landlord’sConsent is necessary but has not been obtained, by the date five business daysafter Landlord’s Consent has been obtained.

 

(ii)                                  On theActual Completion Date the Purchasing Entity shall deliver to the relevantSelling Entity a duly executed Assurance in respect of each of the U.K.Properties.

 

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### **(f)**                                    Assurances

### ** **

The Assurances will contain (whereapplicable):

 

(i)                                     Acovenant by the Purchasing Entity with the relevant Selling Entity that thePurchasing Entity and its successors in title will observe and perform:

 

(A)                              Theexceptions, reservations and covenants contained or referred to in the case ofeach of the Registered Properties, the entries (except those relating tocharges to secure the repayment of money) appearing in the charges registers oftheir respective title numbers;

 

(B)                                In thecase of the Leasehold Properties, the covenants and conditions on the part ofthe tenant contained in the relevant property leases;

 

and willindemnify and keep indemnified the relevant Selling Entity against all actions,claims, demands and proceedings taken or made against the relevant SellingEntity and all costs, damages, expenses, liabilities and losses incurred by therelevant Selling Entity as a result of the breach, non-performance ornon-observance of the same; and

 

(ii)                                  (In thecase of the Leasehold Properties) an agreement and declaration to the effectthat the Selling Entity shall not be liable under any of the covenants set outin Sections 3 or 4 of the Law of Property (Miscellaneous Provisions) Act 1994for the consequences of any breach of the terms of the property leases relatingto their state and condition.

 

## **8.17**                        Mexico VATDeposit

## ** **

The parties acknowledge that the Selling Entitiesexpect to receive a refund of a deposit relating to value added taxes in Mexico(the “***Mexico VAT Deposit***”).  Each of the Purchasing Entities covenants andagrees to cooperate fully, as and to the extent reasonably requested by the SellingEntities and at the sole cost and expense of the Selling Entities, in obtainingthe refund of the Mexico VAT Deposit, including but not limited to assistingthe Selling Entities in submitting any necessary claims for the Mexico VATDeposit and paying over to UNOVA any portion of the Mexico VAT Deposit receivedby such Purchasing Entity.

 

 

(Article 9 follows)

 

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# **ARTICLE 9.Noncompetition Agreement**

# ** **

## **9.1**                               NoncompetitionAgreement

## ** **

Forand in consideration of the benefits to be derived, directly and indirectly,from this Agreement, each of the Selling Entities covenants and agrees that fora period of five years (three years in Europe) following the Transfer Date, itshall not (and shall not permit any of its Affiliates to), own, manage,operate, join, control or participate in the ownership, management, operation orcontrol of, or be connected (as director, officer, employee, consultant, agent,independent contractor, or otherwise) in any other manner with any businessactivity constituting “***Competitive Business***”(as defined in Section 9.3) or any business substantially similar theretoin those places and locales where the Cincinnati Lamb Group has conducted andactively engaged in the Business on or prior to the Transfer Date.

 

## **9.2**                               Limitationson Noncompetition Agreement

## ** **

(a)                                  Notwithstanding anything in Section 9.1 tothe contrary, the Selling Entities and their affiliates shall not be prohibitedfrom (i) the continued conduct and operation of the Landis GrindingSystems operations of UIASI and UNOVA UK, (ii) any investment in Purchaseror its affiliates, (iii) the acquisition or investment in any corporation,company, partnership or other business entity (a “***Company***”)partially engaged in the Competitive Business provided that such activity doesnot exceed ten percent (10%) of the net revenues or net assets of such Company,(iv) the ownership of not more than ten percent (10%), in the aggregate,of any class of debt or equity security of any Company engaged in theCompetitive Business provided that such security is traded on a nationalsecurities exchange or an inter-dealer quotation system, or (v) anyinvestments made by the investment managers of UNOVA’s pension plans or themanagers of UNOVA’s 401(k) plans or similar non-qualified retirement plans.

 

(b)                                 In the event that any provision of thisArticle 9 shall be held invalid, illegal, void, inoperative orunenforceable in an arbitration pursuant to Section 11.5 by reason of thegeographic or business scope or the duration of such provision, suchinvalidity, illegality or unenforceability shall attach only to the scope orduration of such provision and shall not affect or render invalid, illegal,void, inoperative or unenforceable any other provision of this Agreement, and,to the fullest extent permitted by Law, this Agreement shall be construed as ifthe geographic or business scope or the duration of such provision had beenmore narrowly drafted so as not to be invalid, illegal, void, inoperative orunenforceable.

 

## **9.3**                               Definitionof Competitive Business

## ** **

Asused in this Agreement, the term “***the Competitive Business***”means the design, manufacture, sale and service of value-added manufacturingproducts and services for aerospace, equipment and general job shop markets, asconducted by the Cincinnati Lamb Group on the Transfer Date.

 

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## **9.4**                               Nonsolicitaiton

## ** **

For a period of two years following the TransferDate, the Selling Entities shall not (and shall not permit any of theirAffiliates to), directly or indirectly, without the prior written consent ofPurchaser, (a) solicit, offer to hire, entice away or hire any ContinuingEmployee as an employee, independent contractor or otherwise, or (b) divert orattempt to divert from Purchaser any business whatsoever included in theBusiness as conducted by the Cincinnati Lamb Group as of the Transfer Date byinfluencing or attempting to influence any current or former customer orsupplier of the Business as of the Transfer Date.  The foregoing restrictions shall not prohibitgeneral employment solicitations to the public or hiring of any ContinuingEmployee who contacts any of the Selling Entities in response to such generalsolicitation.

 

## **9.5**                               Injunctiveand Equitable Relief

## ** **

TheSelling Entities agree that the remedy of damages for any breach ofArticle 9 may be inadequate and that in the event of any such breach orthreatened breach by UNOVA or its Affiliates, Purchaser or the applicablePurchasing Entity shall be entitled to injunctive relief in addition to anyother remedy, at Law, in equity or under this Agreement to which it may beentitled.

 

(Article 10 follows)

 

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# **ARTICLE 10.Termination**

# ** **

## **10.1**                        Termination

## ** **

ThisAgreement may be terminated immediately upon the receipt of notice oftermination as provided for in Section 10.2, and the transactions providedfor in this Agreement may be abandoned, without liability on the part of theParty effecting such termination:

 

(a)                                  By mutual written consent of all of theParties;

 

(b)                                 By any Party, if (i) any court ofcompetent jurisdiction or any Governmental Body shall have issued a finalorder, decree or ruling or taken any other final action restraining, enjoiningor otherwise prohibiting the consummation of the transactions contemplatedhereby and such order, decree, ruling or other action is or shall have becomefinal and nonappealable, or (ii)  the Asset Sale and the Stock Sale havenot been consummated on or before April 29, 2005 (the “***DeadlineDate***”); provided, that (x) no party may terminate thisAgreement pursuant to this clause (b) if such party’s failure to fulfillany of its obligations under this Agreement shall have been the reason that theClosing shall not have occurred on or before such date, and (y) if theClosing shall not have occurred by the Deadline Date by reason of nonsatisfactionof the conditions set forth in Sections 6.6(i) and (ii) orSections 7.5(a) and (b) and all other conditions precedent inArticles 6 and 7 have been satisfied or are capable of beingsatisfied or, to the extent legally permissible, have been waived, the DeadlineDate shall be the date two months after the Deadline Date (the “***Extended Deadline Date***”);

 

(c)                                  Subject to Section 2.2, by Purchaser, ifany of the conditions of Article 6 of this Agreement have not beensatisfied on or before the Deadline Date and have not been waived by thePurchasing Entities in writing; *provided, however,*that the foregoing termination right shall not exist to the extent that anyPurchasing Entity has breached any of its material obligations hereunder;

 

(d)                                 Subject to Section 2.2, by UNOVA, if anyof the conditions of Article 7 of this Agreement have not been satisfiedon or before the Deadline Date and have not been waived by UNOVA in writing; *provided, however,* that the foregoing termination rightshall not exist to the extent that one or more of the Selling Entities hasbreached any of its material obligations hereunder;

 

(e)                                  By any Purchasing Entity, if any of theSelling Entities or Transferred Subsidiaries files on or before the TransferDate a petition in bankruptcy, reorganization, liquidation or receivership or apetition in bankruptcy, reorganization or receivership is filed on or beforethe Transfer Date against any of the Selling Entities; or

 

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(f)                                    By UNOVA, if a Purchasing Entity files on orbefore the Transfer Date a petition in bankruptcy, reorganization, liquidationor receivership or a petition in bankruptcy, reorganization or receivership isfiled on or before the Transfer Date against a Purchasing Entity.

 

## **10.2**                        Noticeof Termination

## ** **

AnyParty terminating this Agreement in accordance with Section 10.1 shallgive the other Parties prompt written notice of termination, setting forth inreasonable detail the cause of termination.

 

 

(Article 11 follows)

 

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# **ARTICLE 11.Indemnification**

# ** **

## **11.1**                        Indemnificationby the Selling Entities

## ** **

Inorder to induce the Purchasing Entities to enter into this Agreement and toconsummate the transactions contemplated hereby, each of the Selling Entities(collectively, the “***Indemnifying Selling Entities***”)jointly and severally covenants and agrees to and shall indemnify thePurchasing Entities and their respective officers, directors and affiliates(collectively, the “***Buying Interests***”) and shallhold the Buying Interests harmless against and with respect to any and alllosses, damages, costs or expenses (including reasonable attorneys’ fees andcosts) (“***Losses***” or individually a “***Loss***”) suffered or incurred by theBuying Interests and resulting from or arising out of the matters describedbelow in this Section 11.1.

 

### **(a)**                                  Misrepresentationor Breach of Warranty

### ** **

Anymisrepresentation or breach of any of the representations and warranties of theSelling Entities set forth in this Agreement or any of the Related Agreements;

 

### **(b)**                                  Breachof Covenant or Agreement

### ** **

Anybreach or nonfulfillment any of the covenants, agreements or other obligationsof any of the Selling Entities set forth in this Agreement or any of theRelated Agreements;

 

### **(c)**                                  ExcludedLiabilities

### ** **

Anyof the Excluded Liabilities;

 

### **(d)**                                  R&BLiabilities

### ** **

Anydebt, liability or obligation of R&B (including Taxes) existing on and asof, or for the period prior to, the Transfer Date (the ***“R&BLiabilities”***) and any Taxes of CM Korea or UII existing on andas of, or for the period prior to, the Transfer Date, including in bothinstances Taxes arising out of being members of an Affiliated Group;

 

### **(e)**                                  ProductLiability

### ** **

AnyProduct Liability of either of the Transferred Subsidiaries arising from theuse or operation of products sold or serviced in the Business, to the extentsuch claims arise out of losses or injuries which occur on or prior to theTransfer Date;

 

### **(f)**                                    RetainedEnvironmental Liabilities of Transferred Subsidiaries

### ** **

Withrespect to any Transferred Subsidiary, any claim by a third party, including aGovernmental Body, that relates to any matter or condition listed on **Schedule 3.6(d)** that

 

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constitutes, or is demonstrated to have constituted,a violation of any applicable Environmental Law as in effect on the TransferDate, and (ii) any Loss arising from a condition at, on or under the RealProperty, including the presence or release of any Hazardous Substance, to theextent that such condition is delineated during the Phase I orPhase II (with respect to this clause (ii), whether or not known onor before the Transfer Date);

 

### **(g)**                                 OffsiteDisposal

### ** **

Anydebt, liability or obligation arising out of a disposal by any of the SellingEntities in respect of the Business or any Transferred Subsidiary prior to theTransfer Date of a Hazardous Substance at any offsite disposal site (“***Offsite Disposal***”); and

 

### **(h)**                                 Bulk Sales

### ** **

Anyliability or obligation relating to noncompliance with any applicable bulksales or transfer Law or the other matters referenced in Section 1.12 including,without limitation non-compliance with the Retail Sales Tax Act (Ontario) inconnection with the transactions contemplated under this Agreement.

 

## **11.2**                        Indemnificationby Purchasing Entities

## ** **

Inorder to induce the Selling Entities to enter into this Agreement and toconsummate the transactions contemplated hereby, the Purchasing Entities (the “***Indemnifying Purchasing Entities***”)covenant and agree to and shall jointly and severally indemnify the SellingEntities and their respective officers, directors and affiliates (collectively,the “***Selling Interests***”) and shalljointly and severally hold the Selling Interests harmless against and withrespect to any and all Losses suffered or incurred by the Selling Interests andresulting from or arising out of:

 

### **(a)**                                  Misrepresentationor Breach of Warranty

### ** **

Anymisrepresentation or breach of warranty by a Purchasing Entity of any of itsrepresentations or warranties set forth in this Agreement;

 

### **(b)**                                  Breachof Covenant or Agreement

### ** **

Anybreach or nonfulfillment by a Purchasing Entity of any of its respectivecovenants, agreements or other obligations set forth in this Agreement;

 

### **(c)**                                  AssumedLiabilities

### ** **

Anyof the Assumed Liabilities;

 

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### **(d)**                                  OperationsAfter Closing

### ** **

Theoperation of the Business by Purchaser and the other Purchasing Entitiesfollowing the Transfer Date, except to the extent that a Purchasing Entity isentitled to indemnification from the Indemnifying Selling Entities pursuant toSection 11.1;

 

### **(e)**                                  ProductLiability

### ** **

AnyProduct Liability to the extent such claims arise out of losses or injurieswhich occurred after the Transfer Date;

 

### **(f)**                                    PensionLiabilities

### ** **

Anyclaims in relation to the CMUK Plan, the CMUK Supplementary Plan or the CMUK DCPlan (including without limitation any claim relating to a contribution noticeissued under section 38 of the Pensions Act 2004, a financial supportdirection issued under section 43 of that Act, or a debt arising undersection 75 of the Pension Act 1995) and any claim relating to current employeesof the Lamb U.K. division as of the Transfer Date in respect of any period onor after the Transfer Date and, in the case of any such employee whose benefitsare transferred from the UNOVA Pension Fund to the CMUK DC  Plan pursuant to Section 5.11, in respect ofany period before, on or after the Transfer Date; and

 

**(g)****                                ****Claims by****Continuing****Employees**

 

Any claims by any Continuing Employee based onbenefits provided or not provided by the Purchasing Entities or TransferredSubsidiaries following the Transfer Date, including without limitation claimsfor severance.

 

**(h)****                                ****Performance Bonds**

 

Anyclaims against any of the Selling Entities under the Performance Bonds.

 

## **11.3**                        Claimsfor Reimbursement

## ** **

Inthe event that any of the Buying Interests or the Selling Interests shall have(i) suffered any Loss, or (ii) received any notice of thecommencement of any action, proceeding or investigation or the making of anyclaim or demand by a third party (a “***Third Party Claim***”),in each case, in respect of which indemnification may be sought by such partypursuant to this Article 11, the party who shall have suffered such Lossor received such notice of such Third Party Claim and who shall seekindemnification in respect thereof (the “***Indemnified Party***”)shall give either UNOVA (if the Indemnified Party is a Buying Interest), orMainco or Purchaser (if the Indemnified Party is a Selling Interest), as thecase may be (the “***Indemnifying Party***”), promptwritten notice of such Loss or Third Party Claim setting forth in reasonabledetail such information as it shall have pertaining thereto and the IndemnifiedParty’s demand for indemnification in respect thereof.

 

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Inthe case of Third Party Claims, written notice thereof shall be given to theIndemnifying Party as promptly as practicable; *provided,however*, that the failure of any Indemnified Party to give timelynotice shall not affect rights to indemnification hereunder if (i) suchfailure to give timely notice does not materially affect the ability or rightof the Indemnifying Party to participate in the defense of such Third PartyClaim and the Indemnifying Party is not otherwise materially prejudicedthereby, and (ii) actual notice is given to the Indemnifying Party withina reasonable time.

 

TheIndemnifying Party shall have 30 days from the date of receipt of saidnotice (the “***Investigation Period***”) toinvestigate and dispute the nature, validity or amount of any such claim ofLoss or Third Party Claim.  During theInvestigation Period, the Indemnified Party shall cooperate with theIndemnifying Party for the purpose of such investigation and, withoutlimitation, the Indemnified Party shall make available to the IndemnifyingParty the information relied upon by the Indemnified Party to substantiate theIndemnified Party’s claim and the Indemnifying Party shall have reasonableaccess, during normal business hours, to the books, records and other documentsof the Indemnified Party relating to such claim and shall have the right totake copies at its expense of such relevant books, records and documents forthe purpose of such investigation.  Inthe event that the Indemnifying Party shall dispute the nature, validity oramount of a claim hereunder, the Indemnifying Party shall give the IndemnifiedParty written notice of such dispute within the Investigation Period, and therelevant Parties shall meet promptly thereafter and in good faith attempt toresolve such dispute.  To the extent thatsuch Parties cannot resolve any dispute by agreement within 21 daysfollowing such notice of dispute, such dispute shall be resolved pursuant toSection 11.5.

 

Inthe absence of a dispute, the Indemnifying Party shall promptly, and in anyevent not later than the expiration of the Investigation Period, reimburse theIndemnified Party in full (subject to the limitations of Section 8.3 and Section 11.6)for such Loss, as set forth in the notice. In the event that the Indemnifying Party shall dispute only the amount(and not the validity) of the claim, the Indemnifying Party shall, concurrentlywith the delivery of its notice of dispute, pay to the Indemnified Party anyundisputed portion of the claim.

 

**11.4****                        Defense****and Settlement of ThirdParty Claims**

 

Exceptas otherwise provided in Section 8.3:

 

**(a)**                                  In the event of a Third Party Claim, theIndemnifying Party shall have the option to take control of the defense andinvestigation of such Third Party Claim, and to employ and engage attorneys ofits own choice to handle and defend the same, at the Indemnifying Party’s solecost, risk and expense (the “***Direct Litigation Option***”).  The Indemnifying Party may elect to exercisethe Direct Litigation Option by giving prior written notice to the IndemnifiedParty.  If the Indemnifying Party soelects, the Indemnified Party shall cooperate in all reasonable respects withthe Indemnifying Party and such attorneys in the investigation, trial and defenseof such Third Party Claim and any appeal arising therefrom and shall permitaccess to the personnel of the Indemnified Party and to any

 

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relevant books, records and documents within thepossession or control of the Indemnified Party in connection with such claimand to take copies of such relevant materials at the expense of theIndemnifying Party; *provided, however*,that the Indemnified Party may, at its own cost, participate in (but notcontrol) such investigation, trial and defense of such Third Party Claim andany appeal arising therefrom.  If theIndemnifying Party does not elect the Direct Litigation Option, then theIndemnified Party shall defend against the Third Party Claim in the manner itdeems appropriate.

 

**(b)**                                  The Indemnified Party (or the IndemnifyingParty if it has exercised the Direct Litigation Option) shall not settle,adjust or compromise the Third Party Claim except with the prior consent of theIndemnifying Party (or the Indemnified Party), which consent shall not beunreasonably withheld.

 

**(c)**                                  In no event shall a Party make any admissionof liability or enter into any settlement, adjustment or compromise of anyThird Party Claim without the prior written consent of the other Party, if as aresult of such admission, settlement, adjustment or compromise an injunction orother non-monetary relief would be imposed against the Indemnified Party.

 

## **11.5**                        Resolutionof Disputes

## ** **

Inthe event of any dispute between any of the Selling Interests and the BuyingInterests over the nature, validity or amount of any claim for reimbursementmade pursuant to Section 11.3, which dispute is not resolved by agreementpursuant to Section 11.3, such dispute shall be submitted to arbitrationand finally settled under the expedited procedures of the Commercial Rules ofthe American Arbitration Association by a single arbitrator appointed inaccordance with those Rules.  The placeof the arbitration shall be Detroit, Michigan. The award and findings of such arbitrator shall be conclusive andbinding upon the Parties, and judgment upon such award may be entered in anycourt of competent jurisdiction.  UNOVAshall bear all costs and expenses of its advisors and one-half of the costs andexpenses of the arbitration, and Purchaser shall bear all costs and expenses ofits advisors and one-half of the costs and expenses of the arbitration.

 

## **11.6**                        Setofffor Resolved Claims

## ** **

Except as otherwise provided in Section 8.3, tothe extent that the Buying Interests have incurred Losses for a claim andeither (a) an appealable judgment including such Losses has been enteredagainst the Buying Interests and the applicable appeal period has expiredwithout any appeal of such judgment, (b) a non-appealable judgment orfinal appellate decision including such Losses has been entered against theBuying Interests, or (c) a final settlement agreement including such Losses hasbeen executed with the Buying Interests as provided in Section 11.4, then uponwritten notice to the Indemnifying Selling Entities, the Purchaser shall havethe right to set off and deduct the amounts of any Losses against the principalof the Secured Note as provided in Section 11.7(b)(ii).

 

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## **11.7**                        Limitationson Indemnification

## ** **

### **(a)**                                  Duration

### ** **

Claimsfor indemnification under Section 11.1 or 11.2 must be made prior to thesecond anniversary of the Transfer Date, except for claims made pursuant to thefollowing:

 

(i)                                     Section 11.1 (a) (Misrepresentation orBreach of Warranty), to the extent it is based on a breach of Section 3.5(Absence of Liens and Encumbrances), which may be made at any time;Section 3.6(d) (Environmental Matters), which may be made at any timeprior to the fifth anniversary of the Transfer Date; Section 3.6(e)(Survey Matters), Section 3.6(f) (Real Estate Liens or Encumbrances) or3.18 (Taxes), which may be made at any time prior to the expiration of theapplicable statute of limitations;

 

(ii)                                  Section 11.1(b) (Breach of Covenant orAgreement), which may be made at any time;

 

(iii)                               Section 11.1(c) (Excluded Liabilities),which may be made at any time (other than claims with respect to Taxes, whichmust be made prior to the expiration of the applicable statute of limitations);

 

(iv)                              Section 11.1(e) (Product Liability),which may be made at any time;

 

(v)                                 Section 11.1(f) (Retained EnvironmentalLiabilities of Transferred Subsidiaries), which may be made at any time;

 

(vi)                              Section 11.1(g) (Offsite Disposal),which may be made at any time prior to the third anniversary of the TransferDate;

 

(vii)                           Section 11.2(b) (Breach of Covenant orAgreement), which may be made at any time;

 

(viii)                        Section 11.2(c) (Assumed Liabilities),which may be made at any time;

 

(ix)                                Section 11.2(e) (Product Liability),which may be made at any time; and

 

(xi)                                Section 11.2(f) (Pension Liability),which may be made at any time.

 

Indemnificationpursuant to Section 11.1 or 11.2 shall be payable after the expiration ofthe aforesaid periods, so long as the claim was identified and asserted inreasonable detail prior to such expiration.

 

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### **(b)**                                  Amount

### ** **

#### **(i)**                                    Basket

#### ** **

Notwithstandinganything to the contrary contained in Section 11.1 and except as otherwiseprovided in Section 8.3, the Indemnifying Selling Entities shall not beobligated to pay any claims for indemnification pursuant to Section 11.1until the aggregate of all Losses exceeds $300,000 (the “***Basket***”),after which indemnification shall be paid for all Losses in excess of theBasket.  Notwithstanding the foregoingsentence:

 

(A)                              Claims for indemnification for RetainedEnvironmental Liabilities shall be paid from the first dollar of Loss;

 

(B)                                Claims for indemnification for R&BLiabilities and Excluded Liabilities shall be paid from the first dollar ofLoss; and

 

(C)                                Claims for indemnification pursuant toSection 11.1(a) (Misrepresentation or Breach of Warranty), to the extentthey are based on a breach of Section 3.6(d) (Environmental Matters), whichshall be in addition to claims for indemnification for Retained EnvironmentalLiabilities, shall be paid as follows: (1) The first $1,000,000 of such Losses, if any, shall be paid 50% bythe Indemnifying Selling Entities and 50% by the Indemnifying PurchasingEntities; (2) the second $1,000,000 of such Losses, if any, shall be paid100% by the Indemnifying Selling Entities; (3) the third $1,000,000 ofsuch Losses, if any, shall be paid 100% by the Indemnifying PurchasingEntities; and (4) any Losses in excess of $3,000,000 shall be borne exclusivelyby the Indemnifying Selling Entities.

 

#### **(ii)**                                Cap

#### ** **

Notwithstandinganything to the contrary contained in this Agreement, the maximum aggregateamount that the Indemnifying Selling Entities shall be obligated to paypursuant to Section 11.1 shall be the amount of the Purchase Price;provided, however, that this maximum amount shall not apply to ExcludedLiabilities or to Losses arising from the fraud or willful misconduct of theSelling Entities, and provided further, that the maximum amount to be paid incash shall not exceed the amount of cash received by UNOVA in respect of thePurchase Price.  To the extent that theSelling Entities would otherwise (but for the preceding sentence) be obligatedto pay indemnification pursuant to Section 11.1 in excess of the cashtheretofore received by the Selling Entities, the amount of suchindemnification in excess of the cash received by the Selling Entities shallreduce the balance of the Secured Note.

 

### **(c)**                                  OtherLimitations

### ** **

Notwithstandingthe foregoing, none of the Indemnifying Selling Entities shall have anyliability for the following:

 

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(i)                                     Breach of any representations and warrantiescontained in this Agreement to the extent that Mainco or Purchaser had noticein writing of such breach prior to the Transfer Date and did not so notifyUNOVA pursuant to Section 2.2;

 

(ii)                                  For accounts receivable collectibility,inventory obsolescence or amounts of contract reserves following the finaldetermination of the Closing Balance Sheet;

 

(iii)                               Any matter subject to indemnificationpursuant to Section 11.1, to the extent such liability would not havearisen but for a change in legislation or accounting policies made after theTransfer Date or a change in the interpretation of a Law as determined by anycourt of competent jurisdiction or pursuant to an administrative rule-makingdecision of a governmental authority after the Transfer Date; or

 

(iv)                              Any matter subject to indemnificationpursuant to Section 11.1, to the extent such liability would not havearisen but for some act, omission, transaction or arrangement carried out atthe written request or with the written approval of Mainco or Purchaser ortheir authorized representatives prior to Closing or which was expresslyauthorized by this Agreement.

 

### **(d)**                                  Duty toMitigate Damages

### ** **

Nothingin this Article 11 shall limit or restrict the Parties’ general obligationunder the governing Law to mitigate any loss or damage which it may incur as aresult of any matter giving rise to indemnification under this Agreement.

 

### **(e)**                                  No DoubleRecovery

### ** **

AnyParty’s payment of an indemnification claim shall to the extent of such paymentsatisfy and preclude any further indemnification claim against such Party whichis capable of being made in respect of the same subject matter.

 

 

(Article 12 follows)

 

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# **ARTICLE 12.Miscellaneous Provisions**

# ** **

## **12.1**                        PublicStatements and Press Releases

 

NoParty shall make, issue or release any public announcement, press release,public statement or public acknowledgment of the terms, conditions and statusof, the transactions provided for in this Agreement, without the prior writtenconsent of the other Parties as to the content and time of release and the mediain which such statement or announcement is to be made; *provided, however,* that in the case ofannouncements, statements, acknowledgments or revelations which any Party, inthe written opinion of such Party’s counsel, is required by Law or regulations,including those of public stock exchanges on which the securities of such Partyor its affiliates are traded, to make, issue or release (a “***Legally Required Statement***”), themaking, issuing or releasing of any such Legally Required Statement shall notconstitute a breach of this Agreement if such Party shall have given, to theextent reasonably possible, three days prior notice to the other Party, andshall have attempted, to the extent reasonably possible, to clear suchdisclosure with the other Party.  EachParty agrees that it will not unreasonably withhold or delay any such consentor clearance.

 

## **12.2**                        Costs andExpenses

## ** **

EachParty shall be responsible for and bear its respective costs and expenses inconnection with, or arising out of, the negotiation and execution of thisAgreement and consummation of the transactions provided for in this Agreement.

 

## **12.3**                        Amendmentand Modification

## ** **

ThisAgreement may be amended, modified, supplemented or terminated only by awriting executed on behalf of each of the Parties.

 

## **12.4**                        No Assignment

## ** **

Except(a) as provided by Section 5.13, (b) for assignment by Purchaser to anaffiliate of Purchaser, or (c) to Purchaser’s lender, no Party shall assign, inwhole or in part, this Agreement or its respective rights and obligationshereunder without the express prior written consent of the other Parties, andany assignment by operation of Law or otherwise without the consent of theParties shall be void.

 

## **12.5**                        Notices

## ** **

Allnotices, requests, demands or other communications hereunder must be in writingand executed by an authorized representative of the Party responsible therefor,and must be given either by hand or telecopy, telefax or othertelecommunication device capable of creating a written record whichacknowledges receipt, as follows:

 

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### **(a)**                                  The SellingEntities

### ** **

Ifsuch notice is directed to any of the Selling Entities, it shall be sentto:  (i) UNOVA, Inc., 6001 36thAvenue West, Everett, WA  98203-1264,Attention:  General Counsel; Fax No.425.265.2425; or to such other person or place as UNOVA shall have specified toMainco and Purchaser in writing by a notice in accordance with thisSection 12.5, with a copy to Perkins Coie LLP, 1201 Third Avenue, Suite4800, Seattle, Washington 98101, Attention: Andrew Bor, Fax No. 206-359-9000.

 

### **(b)**                                  A PurchasingEntity

### ** **

Ifsuch notice is directed to any Purchasing Entity, it shall be sent to:  (i) MAG Industrial Automation SystemsLLC, c/o Maxcor Inc., 60 E. 42nd Street, New York, New York 10165, FaxNo. (212) 661-1031, Attention:  Mr.Meidar, and (ii) Mainco, Inc, MAG Industrial Automation Systems LLC, c/oMaxcor Inc., 60 E. 42nd Street, New York, New York 10165, FaxNo. (212) 661-1031, Attention:  Mr.Meidar, or to such other person or place as Purchaser shall have specified toUNOVA in writing by a notice in accordance with this Section 12.5, with acopy to Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, NewYork 10038, Attention:  Martin H.Neidell, Fax No. 212-806-7836.

 

## **12.6**                        Counterpartsand Facsimile

## ** **

ThisAgreement may be executed simultaneously in two or more counterparts, each ofwhich shall be deemed an original, but all of which together shall constitutebut one and the same instrument and any of such counterparts may be deliveredby facsimile transmission.

 

## **12.7**                        Captions

## ** **

Thecaptions and table of contents contained in this Agreement are provided forconvenience of reference only and shall not be deemed to constitute a part ofthis Agreement.

 

## **12.8**                        Schedulesand Exhibits

## ** **

Onecomplete set of the Schedules and Exhibits has been marked for identificationand delivered to each of the Parties prior to the execution and delivery ofthis Agreement.  The Schedules andExhibits are an integral part of this Agreement and are incorporated into thisAgreement by this reference.

 

## **12.9**                        Waiver;Remedies

## ** **

Nosingle or partial waiver of any breach of any provision of this Agreement shallbe held to be a waiver of any other or subsequent breach, and the failure of aParty to enforce at any time any provision of this Agreement shall not bedeemed a waiver of any right of any such Party to subsequently enforce suchprovision.  All remedies afforded in thisAgreement 

 

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shall be taken and construed as cumulative, that is,in addition to every other remedy provided in this Agreement or by Law.

 

## **12.10**                 Governing Law

## ** **

ThisAgreement shall be construed, interpreted and enforced in accordance with theLaws of the State of Delaware, without resort to its conflict of Law rules.

 

## **12.11**                 Severability

## ** **

Inthe event that any provision or any portion of any provision of this Agreementshall be held invalid, illegal or unenforceable under applicable Law, theremainder of this Agreement shall remain valid and enforceable, unless suchinvalidity, illegality or unenforceability substantially diminishes the rightsand obligations, taken as a whole, of any Party.

 

## **12.12**                 Survivalof Representations, Warranties, Covenants and Agreements

## ** **

Subjectto the provisions contained in Section 11.7, the representations andwarranties in Articles 1, 3 and 4 or in any Schedule or Exhibit shallsurvive the execution and delivery of this Agreement and consummation of thetransactions provided for in this Agreement until the second anniversary of theTransfer Date, notwithstanding any investigation heretofore or hereafter madeby or on behalf of the respective Parties; provided, however, that therepresentations and warranties contained in Section 3.6(d) (EnvironmentalMatters) shall survive until the fifth anniversary of the Transfer Date, therepresentations and warranties contained in Section 3.6(e) (SurveyMatters), Section 3.6(f) (Real Estate Liens and Encumbrances) and Section 3.18(Taxes) shall survive until the expiration of the applicable statute oflimitations, and the representations and warranties contained inSection 3.5 (Absence of Liens and Encumbrances) which may be made at anytime, Section 11.1(b) which may be made at any time, Section 11.1(c) which maybe made at any time (other than claims with respect to Taxes, which must bemade prior to the expiration of the applicable statute of limitations), andSections 11.1(e), (f), (g), Sections 11.2(b), (c), (e) or (f), which maybe made at any time.  The covenants andagreements hereunder that contemplate performance after the Transfer Date shallsurvive the execution and delivery of this Agreement and consummation of thetransactions provided for in this Agreement and shall continue until allobligations with respect thereto shall have been performed or shall have beenterminated in accordance with their terms.

 

91

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## **12.13**                 NoThird Party Beneficiaries

## ** **

Exceptto the extent otherwise specifically provided in Article 11, nothing inthis Agreement, whether express or implied, is intended to confer any rights orremedies under or by reason of this Agreement on any persons other than theParties and their respective successors and permitted assigns, nor is anythingin this Agreement intended to relieve or discharge the obligation or liabilityof any third persons to any Party, nor shall any provision of this Agreementgive any third persons any right of subrogation or action against any Party.

 

## **12.14**                 Construction

## ** **

ThisAgreement and the Related Agreements shall be interpreted without regard to anypresumption or rule requiring construction against the Party causing suchagreements to be drafted.

 

## **12.15**                 EntireAgreement

## ** **

ThisAgreement, including the Exhibits and Schedules and the Related Agreements,constitutes the sole understanding and agreement of the Parties with respect tothe subject matter of this Agreement and supersedes and cancels all priorunderstandings and agreements; *provided,however*, that the provisions of Sections 9, 10 and 11 of the letterof intent dated November 4, 2004 between Maxcor and UNOVA shall remain in fullforce and effect through Closing, and *provided further*,that no double recovery shall be permitted under this Agreement and the letterof intent dated November 4, 2004.

 

## **12.16**                 Currency

## ** **

                                                Unless otherwise indicated, all dollaramounts referred to in this Agreement are in United States funds.

 

(*Signature pages follow*)

 

92

----

 

INWITNESS WHEREOF, the Parties, intending to be legally bound, have caused thisAgreement to be executed on and as of the date first above written.

 

 
| **R&B PLASTICS HOLDINGS, INC.**          | **UNOVA  U.K. LIMITED**                              |
|----------------------------------------------|------------------------------------------------------|
|                                         |                                                 |
|                                         |                                                 |
| BY:                                          |    S  / GREGORY L. VERESCHAGIN        |   | BY: |    S  / MICHAEL E. KEANE |   |
| NAME:                                        | GREGORY L. VERESCHAGIN                               |   | NAME: | MICHAEL E. KEANE |   |
| TITLE:                                       | EXECUTIVE VICE PRESIDENT                             |   | TITLE: | DIRECTOR |   |
|                                         |                                                 |   |   |
|                                         |                                                 |
|                                         | **CINCINNATI  MACHINE U.K. LIMITED**                 |
|                                         |                                                 |
|                                         |                                                 |
|                                         | BY:                                                  | S  / MICHAEL E. KEANE |   |
|                                         | NAME:                                                | MICHAEL E. KEANE |   |
|                                         | TITLE:                                               | DIRECTOR |   |
|                                         |                                                 |
|                                         |                                                 |
| **MAG  INDUSTRIAL AUTOMATION  SYSTEMS, LLC** | **HONSBERG LAMB  SONDERWERKZEUGMASCHINEN GMBH**      |
|                                         |                                                 |
| BY:                                          |    S  / GREGORY L. VERESCHAGIN        |   | BY: |    S  / MICHAEL E. KEANE |
| NAME:                                        | GREGORY L. VERESCHAGIN                               |   | NAME: | MICHAEL E. KEANE |
| TITLE:                                       | EXECUTIVE VICE PRESIDENT                             |   | TITLE: | AUTHORIZED REPRESENTIVE OF  SHAREHOLDERS |
|                                         |                                                 |
|                                         |                                                 |
| **UNOVA, INC.**                              | **UNOVA  CANADA, INC.**                              |
|                                         |                                                 |
|                                         |                                                 |
| BY:                                          |     S  /MICHAEL E. KEANE         |   | BY: |     S  / MICHAEL E. KEANE |   |
| NAME:                                        | MICHAEL E. KEANE                                     |   | NAME: | MICHAEL E. KEANE |   |
| TITLE:                                       | SENIOR VICE PRESIDENT  & CHIEF FINANCIAL OFFICER |   | TITLE: | VICE PRESIDENT |   |
|                                              |                                                      |  |  |  |  |  |  |  |  |  |  |  |

 

93

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| **UNOVA  INDUSTRIAL AUTOMATION  SYSTEMS, INC.** | **UNOVA IP  CORP.**                           |   |
|-------------------------------------------------|-----------------------------------------------|--------|
|                                            |                                          |   |
| BY:                                             |     S  / MICHAEL E. KEANE |   | BY: |     S  / MICHAEL E. KEANE |   |   |
| NAME:                                           | MICHAEL E. KEANE                              |   | NAME: | MICHAEL E. KEANE |   |
| TITLE:                                          | VICE PRESIDENT                                |   | TITLE: | VICE PRESIDENT |   |
|                                                 |                                               |        |  |  |  |  |  |  |  |  |

 

94

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**LIST OF EXHIBITSTOPURCHASE AND SALE AGREEMENT**

 
| Exhibit A: Silver Point Term  Sheet           |   |
|----------------------------------------------------|--------|
| Exhibit B: Certain Assumed  Liabilities       |   |
| Exhibit C-1: Transitional  Services Agreement |   |
| Exhibit C-2: Transitional  Services Agreement |   |
| Exhibit D: Plan Deeds                         |   |
| Exhibit E: Litigation Required  Employees     |   |
| Exhibit F: Severance Terms                    |   |

 

----

 

**LIST OF SCHEDULESTOPURCHASE AND SALE AGREEMENT**

 
| Schedule 1.5(b)(i): |   | UNOVA Bank Account                                                                           |   |   |
|--------------------------|--------|----------------------------------------------------------------------------------------------|--------|--------|
| Schedule 3.1(f):    |   | Subsidiaries and Other Equity Investments                                                    |   |   |
| Schedule 3.1(h):    |   | Capitalization and Shareholders of  Transferred Subsidiaries                                 |   |   |
| Schedule 3.2(a):    |   | December Financials                                                                          |   |   |
| Schedule 3.2(b):    |   | Events Subsequent to December Balance Sheet                                                  |   |   |
| Schedule 3.2(c):    |   | Indebtedness                                                                                 |   |   |
| Schedule 3.4:       |   | Inventory Valuation Policy                                                                   |   |   |
| Schedule 3.5:       |   | Absence of Liens and Encumbrances                                                            |   |   |
| Schedule 3.6(a):    |   | Owned Real Property                                                                          |   |   |
| Schedule 3.6(b):    |   | Realty Leases (as Lessee)                                                                    |   |   |
| Schedule 3.6(d):    |   | Environmental Matters                                                                        |   |   |
| Schedule 3.8(a):    |   | Sales Orders, Bids and Proposals                                                             |   |   |
| Schedule 3.8(b):    |   | Purchase Orders                                                                              |   |   |
| Schedule 3.8(c):    |   | Sales Representative, Distributor and  Dealer Agreements                                     |   |   |
| Schedule 3.8(d):    |   | Personal Property Leases (as Lessee)                                                         |   |   |
| Schedule 3.8(e):    |   | Noncompetition Agreements or Covenants                                                       |   |   |
| Schedule 3.8(f):    |   | Confidential Nondisclosure Agreement                                                         |   |   |
| Schedule 3.8(g):    |   | Consultant Agreements                                                                        |   |   |
| Schedule 3.8(h):    |   | Guarantees                                                                                   |   |   |
| Schedule 3.8(i):    |   | Powers of Attorney, Proxies                                                                  |   |   |
| Schedule 3.8(j):    |   | Letters of Credit, Surety, Bid and  Performance Bonds                                        |   |   |
| Schedule 3.8(k):    |   | Other Material Contracts                                                                     |   |   |
| Schedule 3.9(a):    |   | Intellectual Property Rights                                                                 |   |   |
| Schedule 3.9(b):    |   | Licenses of Intellectual Property Rights To  or From Third Parties                           |   |   |
| Schedule 3.9(c):    |   | Infringement                                                                                 |   |   |
| Schedule 3.10:      |   | Patent, Trade Name, Trademark, Service  Mark, Copyright or Chip Registration Indemnification |   |   |
| Schedule 3.11:      |   | Confidential Information or Trade Secrets                                                    |   |   |
| Schedule 3.12:      |   | Product and Service Warranties                                                               |   |   |
| Schedule 3.13(a):   |   | Employees                                                                                    |   |   |
| Schedule 3.13(b):   |   | Indebtedness to Employees                                                                    |   |   |
| Schedule 3.13(c):   |   | Loans or Advances to Employees                                                               |   |   |
| Schedule 3.13(d):   |   | Collective Bargaining Agreements                                                             |   |   |
| Schedule 3.13(f):   |   | Employee Benefit Plans                                                                       |   |   |
| Schedule 3.13(g):   |   | Employment Contracts                                                                         |   |   |
| Schedule 3.14:      |   | Pending or Threatened Claims, Litigation  and Governmental Proceedings; Retained Litigation  |   |   |
| Schedule 3.15:      |   | Judgments, Orders and Consent Decrees                                                        |   |   |
| Schedule 3.16:      |   | Compliance With Laws                                                                         |   |   |
| Schedule 3.17:      |   | Franchises, Permits, Etc.                                                                    |   |   |
| Schedule 3.18:      |   | Taxes                                                                                        |   |   |
| Schedule 3.19:      |   | Required Consents                                                                            |   |   |
| Schedule 3.21(a):   |   | Insurance Policies                                                                           |   |   |
| Schedule 3.21(b):   |   | Bank Accounts of Transferred Subsidiaries                                                    |   |   |
| Schedule 3.23:      |   | Duty of the Selling Entities to Make  Inquiry                                                |   |   |
| Schedule 4.2:       |   | Required Consents                                                                            |   |   |
| Schedule 4.7:       |   | Purchaser’s Sources of Financing                                                        |   |   |

 

----

 

**INDEX OF DEFINED TERMS**

** **
| ***A***                                       | *** *** | *** *** |
|-----------------------------------------------|--------------|--------------|
| *** ***                                  | *** *** | *** *** |
| Acquisition Proposal                          |         |         |
| Actual Completion Date                        |         |         |
| Adjusted December Balance Sheet               |         |         |
| Affiliate                                     |         |         |
| Affiliate Arrangements                        |         |         |
| Affiliated Group                              |         |         |
| Agreement                                     |         |         |
| Agreement Adjustments                         |         |         |
| Agreement Date                                |         |         |
| Allocation                                    |         |         |
| Amalgamation                                  |         |         |
| Asset Purchasing Entity                       |         |         |
| Asset Sale                                    |         |         |
| Assets Held for Sale                          |         |         |
| Assumed Liabilities                           |         |         |
| Assurances                                    |         |         |
|                                          |         |         |
| ***B***                                       | *** *** | *** *** |
| *** ***                                  | *** *** | *** *** |
| Basket                                        |         |         |
| Business                                      |         |         |
| Buying Interests                              |         |         |
|                                          |         |         |
| ***C***                                       | *** *** | *** *** |
| *** ***                                  | *** *** | *** *** |
| Cash Difference                               |         |         |
| Cash Disbursements                            |         |         |
| Cash Payment                                  |         |         |
| Cash Receipts                                 |         |         |
| Certain Personnel                             |         |         |
| Cincinnati Lamb Canada division               |         |         |
| Cincinnati Lamb Group                         |         |         |
| Cincinnati Lamb Group December  Balance Sheet |         |         |
| Cincinnati Lamb U.S division                  |         |         |
| Closing                                       |         |         |
| Closing Balance Sheet                         |         |         |
| CM Korea                                      |         |         |
| CM Korea Shares                               |         |         |
| CMUK                                          |         |         |
| CMUK DC Plan                                  |         |         |
| CMUK Plan                                     |         |         |
| CMUK Supplementary Plan                       |         |         |
| COBRA                                         |         |         |
| Code                                          |         |         |
| Company                                       |         |         |
| Competitive Business                          |         |         |
| Collateral                                    |         |         |
| Confidentiality Agreement                     |         |         |
| Consideration                                 |         |         |
| Consultant                                    |         |         |
| Continuing Employees                          |         |         |
| Contracts                                     |         |         |

 

----

 
| ***D***                           | *** *** | *** *** |
|-----------------------------------|--------------|--------------|
| *** ***                      | *** *** | *** *** |
| Deadline Date                     |         |         |
| December Balance Sheet            |         |         |
| December Financials               |         |         |
| Deloitte Procedures               |         |         |
| Direct Litigation Option          |         |         |
| Discontinued Operations           |         |         |
| DOJ                               |         |         |
| DRA                               |         |         |
|                              |         |         |
| ***E***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| Employee Benefit Plans            |         |         |
| Employees                         |         |         |
| Environmental Activity            |         |         |
| Environmental Laws                |         |         |
| Environmental Permits             |         |         |
| Environmental Report              |         |         |
| Environmental Response Plan       |         |         |
| E-Reg                             |         |         |
| ERISA Plan                        |         |         |
| ETA                               |         |         |
| Excluded Assets                   |         |         |
| Excluded Liabilities              |         |         |
| Extended Deadline Date            |         |         |
|                              |         |         |
| ***F***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| FAS 106 Liabilities               |         |         |
| Freehold Property                 |         |         |
| FSSP                              |         |         |
| FSSP/UPP Transition Period        |         |         |
| FTC                               |         |         |
|                              |         |         |
| ***G***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| GAAP                              |         |         |
| Governmental Body                 |         |         |
|                              |         |         |
| ***H***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| Hazardous Substance               |         |         |
| Honsberg                          |         |         |
| HSR Act                           |         |         |
| HSR Filing                        |         |         |
|                              |         |         |
| ***I***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| Indemnified Party                 |         |         |
| Indemnifying Party                |         |         |
| Indemnifying Purchasing Entities  |         |         |
| Indemnifying Selling Entities     |         |         |
| Independent Firm                  |         |         |
| Intellectual Property             |         |         |
| Interim Period                    |         |         |
| Intermec                          |         |         |
| Intermec Canada                   |         |         |
| Investigation Period              |         |         |
|                              |         |         |
| ***L***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| Lamb U.K. division                |         |         |
| Lamb U.K. Restructure Note        |         |         |
| Lamb U.K. Restructure Plan        |         |         |
| Landlord’s Consent           |         |         |
| Law                               |         |         |
| Leased Real Property              |         |         |
| Leasehold Properties              |         |         |
| Legally Required Statement        |         |         |
| LIBOR                             |         |         |
| Lien                              |         |         |
| Liens                             |         |         |
| Licensed Intellectual Property    |         |         |
| Litigation Required Employees     |         |         |
| Litigation Termination Date       |         |         |
| Loss                              |         |         |
| Losses                            |         |         |
|                              |         |         |
| ***M***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| Mainco                            |         |         |
| material adverse change           |         |         |
| material adverse effect           |         |         |
| McDonald                          |         |         |
| Mexico VAT Depost                 |         |         |
| MTN                               |         |         |
|                              |         |         |
| ***N***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| New Intermec Canada               |         |         |
|                              |         |         |
| ***O***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| Offsite Disposal                  |         |         |
| Other Retained Litigation         |         |         |
| Owned Real Property               |         |         |
|                              |         |         |
| ***P***                           | *** *** | *** *** |
| *** ***                      | *** *** | *** *** |
| Parties                           |         |         |
| Party                             |         |         |
| Pension Arrangement               |         |         |
| Performance Bonds                 |         |         |
| Permitted Lien                    |         |         |
| Permitted Liens                   |         |         |
| Person                            |         |         |
| Phase I                      |         |         |
| Phase II                     |         |         |
| Plan Deeds                        |         |         |
| Preliminary Cash Difference       |         |         |
| Preliminary Closing Balance Sheet |         |         |
| Product Liability                 |         |         |

 

2

----

 
| Purchase Orders                         |         |         |
|-----------------------------------------|--------------|--------------|
| Purchase Price                          |         |         |
| Purchased Assets                        |         |         |
| Purchaser                               |         |         |
| Purchaser Subsidiaries                  |         |         |
| Purchaser’s 401(k) Plan       |         |         |
| Purchasing Entities                     |         |         |
| Purchasing Entities Schedule            |         |         |
|                                    |         |         |
| ***R***                                 | *** *** | *** *** |
| *** ***                            | *** *** | *** *** |
| R&B                                 |         |         |
| R&B Cash Payment                    |         |         |
| R&B Liabilities                     |         |         |
| R&B Shares                          |         |         |
| Real Property                           |         |         |
| Receiving Party                         |         |         |
| Registered Properties                   |         |         |
| Related Agreements                      |         |         |
| Relevant Properties                     |         |         |
| Retained Environmental Liability        |         |         |
| Retained Litigation                     |         |         |
| Review Period                           |         |         |
|                                    |         |         |
| ***S***                                 | *** *** | *** *** |
| *** ***                            | *** *** | *** *** |
| Sales Order                             |         |         |
| Sales Orders                            |         |         |
| Section 1060 Allocation                 |         |         |
| Section 338 Allocation             |         |         |
| Section 338 Forms                       |         |         |
| Section 338(h)(10) Election        |         |         |
| Section 338(h)(10) Elections       |         |         |
| Secured Note                            |         |         |
| Securities Act                          |         |         |
| Seller Names                            |         |         |
| Selling Entities                        |         |         |
| Selling Interests                       |         |         |
| Severance Terms                         |         |         |
| Shares                                  |         |         |
| Specified Litigation                    |         |         |
| Statement of Objections                 |         |         |
| Stock Sale                              |         |         |
| STT                                     |         |         |
| Subsurface Environmental  Investigation |         |         |
|                                    |         |         |
| ***T***                                 | *** *** | *** *** |
| *** ***                            | *** *** | *** *** |
| Tax Contest                             |         |         |
| Tax Returns                             |         |         |
| Taxes                                   |         |         |
| Tendering Party                         |         |         |
| the Competitive Business                |         |         |
| Third Party Claim                       |         |         |
| Transactions                            |         |         |
| Transfer Date                           |         |         |
| Transferred Subsidiaries                |         |         |
| Transferring Employees                  |         |         |
| Transferring Selling Entities           |         |         |
| Transitional Services Agreement         |         |         |
| TUPE                                    |         |         |

 

3

----

 
| ***U***            | *** *** | *** *** |
|--------------------|--------------|--------------|
| *** ***       | *** *** | *** *** |
| U.K. Employees     |         |         |
| U.K. Pension Plans |         |         |
| U.S. Employees     |         |         |
| UIASI              |         |         |
| UII                |         |         |
| UII Shares         |         |         |
| UNOVA              |         |         |
| UNOVA Canada       |         |         |
| UNOVA IP           |         |         |
| UNOVA UK           |         |         |
| UPF                |         |         |
| UPP                |         |         |

 

4

----