Document:

Exhibit 10.7

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement, dated as of November 8,
2004 (this “Agreement”), is by and between Edward N. Patrick, Jr. (the “Executive”)
and Safety Insurance Group, Inc., a Delaware corporation (the “Company”);

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, the Company wishes to obtain the future
services of the Executive for and on behalf of the Companies (as defined in Section 11);

 

WHEREAS, the Executive is willing upon the terms and
conditions herein set forth, to provide services to the Companies hereunder;
and

 

WHEREAS, the Company wishes to secure the Executive’s
non-interference with the Companies’ business, upon the terms and conditions
herein set forth;

 

NOW, THEREFORE, in consideration of the mutual
promises and covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:

 

1.                                       Nature
of Employment

 

Subject to Section 3, the Company shall
employ Executive, and Executive shall serve the Company, in accordance with the
terms of this Agreement, during the Term of Employment (as defined in Section 3(a)),
as Vice President of the Company with such duties and responsibilities as are
customarily assigned to an executive in such position and such other duties and
responsibilities not inconsistent therewith as may from time to time reasonably
be assigned to the Executive by the Board of Directors and/or Chairman of the
Board, President and Chief Executive Officer of the Company.  The Executive also agrees to serve without additional compensation in
such capacities (including, without limitation, as an officer or director) with
Company affiliates as the Board of Directors and/or Chairman of the
Board, President and Chief Executive Officer of the Company may prescribe.  Upon termination of the Executive’s
employment with the Company, the Executive’s employment, board membership or
other service relationship with any Company affiliate shall automatically
terminate unless otherwise agreed to by the parties.

 

2.                                       Extent
of Employment

 

(a)                                  During
the Term of Employment, the Executive shall perform his obligations hereunder
faithfully and to the best of his ability at the principal executive offices of
the Company, under the direction of the Board of Directors and/or Chairman of
the Board, President and Chief Executive Officer of the Company, and shall
abide by the rules, customs and usages from time to time established by the
Companies.

 

(b)                                 During
the Term of Employment, the Executive shall devote all of his business time,
energy and skill as may be reasonably necessary for the performance of his
duties, responsibilities and obligations hereunder (except for vacation periods
and reasonable periods of illness or other incapacity), consistent with past
practices and norms in similar positions.

 

 

(c)                                  Nothing
contained herein shall require Executive to follow any directive or to perform
any act which would violate any laws, ordinances, regulations or rules of any
governmental, regulatory or administrative body, agent or authority, any court
or judicial authority, or any public, private or industry regulatory authority
(collectively, the “Regulations”). 
Executive shall act in good faith in accordance with all Regulations.

 

3.                                       Term
of Employment; Termination

 

(a)                                  The
“Term of Employment” shall commence on the date hereof and shall
continue until December 31, 2007 (the “Initial Term”); provided,
that, (i) such term shall continue for the twelve month period following such
Initial Term, and for each twelve month period thereafter (each, an “Additional
Term”), unless at least 180 days prior to the scheduled expiration date of
the Initial Term or any Additional Term, either the Executive or the Company
notifies the other of its decision not to continue such term and (ii) should
the Executive’s employment by the Company be earlier terminated pursuant to Section 3(b)
or by the Executive pursuant to Section 3(c), the Term of
Employment shall end on the date of such earlier termination.

 

(b)                                 Subject
to the payments contemplated by Sections 3(f) through 3(i), the
Term of Employment may be terminated at any time by the Company:

 

(i)                                     upon
the death of Executive;

 

(ii)                                  in
the event that because of physical or mental disability Executive is unable to
perform, and does not perform, in the view of the Company and as certified in
writing by a competent medical physician, his duties hereunder for a continuous
period of three consecutive months or any sixty working days out of any
consecutive six month period;

 

(iii)                               for
Cause (as defined in Section 3(d)) or Material Breach (as defined
in Section 3(e));

 

(iv)                              upon
the continuous poor or unacceptable performance of the Executive’s duties to
the Companies (other than due to a physical or mental disability), which has
remained uncured for a period of 90 days after delivery of notice by the
Company to the Executive of such dissatisfaction with Executive’s performance,
which notice shall describe in reasonable detail the areas of dissatisfaction;
or

 

(v)                                 for
any other reason or no reason, it being understood that no reason is required.

 

Executive acknowledges that no representations or
promises have been made concerning the grounds for termination or the future
operation of the Companies’ business, and that nothing contained herein or
otherwise stated by or on behalf of any of the Companies modifies or amends the
right of the Company to terminate Executive at any time, with or without
Material Breach or Cause.  Termination
shall become effective upon the delivery by the Company to the Executive of
notice specifying such termination and the reasons therefor (i.e., Section 3(b)(i)-(v)),
subject

 

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to the requirements for
advance notice and an opportunity to cure provided in this Agreement, if and to
the extent applicable.

 

(c)                                  Subject
to the payments contemplated by Section 3(f), the Term of
Employment may be terminated at any time by the Executive:

 

(i)                                     upon
the death of Executive;

 

(ii)                                  in
the event that because of physical or mental disability the Executive is unable
to perform, and does not perform, in the view of the Company, and as certified
by a competent medical physician, his duties hereunder for a continuous period
of three consecutive months or any sixty working days out of any consecutive
six month period;

 

(iii)                               as
a result of a material reduction in Executive’s authority, perquisites,
position or responsibilities (other than such a reduction in perquisites which
affects all of the Company’s senior executives on a substantially equal or
proportionate basis), the relocation of the Company’s primary place of business
or the relocation of Executive by any of the Companies to another office more
than 75 miles from Boston, Massachusetts, or the Company’s willful, material
violation of its obligations under this Agreement, in each case, after 60 days’
prior written notice to the Company and its Board of Directors and the Company’s
failure thereafter to cure such reduction or violation; or

 

(iv)                              as a
result of the Company’s willful and material violation of this Agreement, the
Stockholders Agreement, the 2002 Management Omnibus Incentive Plan (the “Incentive
Plan”), or any agreement between Executive and any of the Companies pertaining
to awards made pursuant to the Incentive Plan or the Executive Incentive
Compensation Plan, in each case as such agreements or plans may be amended from
time to time.

 

(d)                                 For
the purposes of this Section 3, “Cause” shall mean
any of the following:

 

(i)                                     Executive’s
commission or conviction of any crime or criminal offense involving monies or
other property or any felony;

 

(ii)                                  Executive’s
commission or conviction of fraud or embezzlement;

 

(iii)                               Executive’s
material and knowing violation of any obligations imposed upon Executive,
personally, as opposed to upon the Company, whether as a stockholder or
otherwise, under this Agreement, the Stockholders Agreement, the Incentive Plan
or any other agreement between the Executive, on the one hand, and any of the
Companies, on the other hand, the Amended and Restated Certificate of
Incorporation, or the By-Laws of the Company, in each case as may be amended
from time to time; provided, that the Executive has been given written
notice describing any such violation in reasonable detail and fails to cure the
violation within 90 days from such notice; or

 

(iv)                              Executive
engages in egregious misconduct involving serious moral turpitude to the extent
that Executive’s credibility and reputation no longer conform to the standard
of the Company’s executives.

 

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(e)                                  For
the purposes of this Section 3, “Material Breach” shall mean
any of the following:

 

(i)                                     Executive’s
breach of any of his fiduciary duties to the Companies or their stockholders or
making of a willful misrepresentation or omission which breach,
misrepresentation or omission would reasonably be expected to materially
adversely affect the business, properties, assets, condition (financial or
other) or prospects of the Companies;

 

(ii)                                  Executive’s
willful, continual and material neglect or failure to discharge his duties,
responsibilities or obligations prescribed by this Agreement or any other
agreement between the Executive and any of the Companies (other than arising
solely due to physical or mental disability);

 

(iii)                               Executive’s
habitual drunkenness or substance abuse which materially interferes with
Executive’s ability to discharge his duties, responsibilities or obligations
prescribed by this Agreement or any other agreement between the Executive and
any of the Companies; and

 

(iv)                              Executive’s
willful and material violation of any non-competition, non-disparagement, or
confidentiality agreement with any of the Companies, including without
limitation, those set forth in Sections 7, 8 and 9 of this
Agreement, or any other agreements with any of the Companies;

 

in each case, for purposes of clauses (i) through
(iv), after the Company or the Board of Directors of the Company has provided
Executive with 60 days’ written notice describing such circumstances and the
possibility of a Material Breach in reasonable detail, and Executive fails to
cure such circumstances and Material Breach within those 60 days.  No act or omission shall be deemed willful if
done, or omitted to be done, in good faith by the Executive based upon a
resolution duly adopted by the Company’s Board of Directors.

 

(f)                                    In
the event Executive’s employment is terminated by the Company under any
circumstances described in Section 3(b)(v) or by Executive under
the circumstances described in Section 3(c)(iii) or (iv),

 

(i)                                     the
Company shall pay or cause to be paid to the Executive, (A) within five
business days after the date of termination, any earned but unpaid base salary
and any expense reimbursement payments owed to the Executive, and (B) within
five business days after the date of termination or, if later, within 30 days
after the issuance of audited financial statements for the Company for the
prior year, any earned but unpaid annual bonus payments relating to the prior
year (the “Accrued Obligations”);

 

(ii)                                  the
Company shall pay or cause to be paid to the Executive, within thirty business
days after the date of termination, a lump-sum payment equal to the annual base
salary the Executive would have received over the remaining Term of Employment
if his employment had not terminated, assuming for this purpose that a notice
not to extend the Term of Employment was provided on the date of termination
(the “Severance Period”),

 

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based on the Executive’s base salary in effect
immediately prior to the date of termination; and

 

(iii)                               during
the Severance Period, the Company will provide or cause to be provided to the
Executive (and any covered dependents), with life and health insurance benefits
(but not disability insurance benefits) substantially similar to those the
Executive and any covered dependents were receiving immediately prior to the
date of termination and at the same dollar cost to the Executive as in effect
immediately prior to the termination of employment.  If the Company provides or arranges to
provide the Executive and covered dependents with life and health insurance
benefits, those benefits will be reduced to the extent comparable benefits are
received by, or made available to, the Executive (at no greater cost to the
Executive) by another employer during the Severance Period following the
Executive’s date of termination.  The
Executive must report to the Company any such benefits that he receives or that
are made available.  In lieu of the
benefits described in this Section 3(f)(iii), the Company, in its
sole discretion, may elect to pay or cause to be paid to the Executive a lump
sum cash payment equal to the monthly premiums that would have been paid to
provide such benefits to the Executive for each month such coverage is not
provided under this Section 3(f)(iii).  Nothing in this Section 3(f)(iii)
will extend the COBRA continuation coverage period.

 

(g)                                 In
the event the Executive’s employment is terminated within three years after a
Change of Control (provided the Term of Employment has not already expired)
under any circumstances described in Section 3(b)(v) or by
Executive under the circumstances described in Section 3(c)(iii) or
(iv),

 

(i)                                     the
Company shall pay or cause to be paid to the Executive any Accrued Obligations;

 

(ii)                                  the
Company shall pay or cause to be paid to the Executive, within thirty business
days after the date of termination, a lump-sum payment equal to two (2) times
the sum of (A) the Executive’s annual base salary in effect immediately prior
to the date of termination and (B) the most recent annual bonus paid to the
Executive prior to the Change in Control; and

 

(iii)                               for
a two (2) year period after the date of termination, the Company will provide
or cause to be provided to the Executive (and any covered dependents), with
life and health insurance benefits (but not disability insurance benefits)
substantially similar to those the Executive and any covered dependents were
receiving immediately prior to the date of termination and at the same dollar
cost to the Executive as in effect immediately prior to the termination of
employment.  If the Company provides or
arranges to provide the Executive and covered dependents with life and health
insurance benefits, those benefits will be reduced to the extent comparable
benefits are received by, or made available to, the Executive (at no greater
cost to the Executive) by another employer during the two (2) year period
following the Executive’s date of termination. 
The Executive must report to the Company any such benefits that he
receives or that are made available.  In
lieu of the benefits described in this Section 3(g)(iii), the
Company, in its sole discretion, may elect to pay or cause to be paid to the
Executive a lump sum cash

 

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payment equal to the monthly premiums that would have
been paid to provide such benefits to the Executive for each month such
coverage is not provided under this Section 3(g)(iii).  Nothing in this Section 3(g)(iii)
will extend the COBRA continuation coverage period.

 

(h)                                 In
the event Executive’s employment is terminated by the Company under the
circumstances described in Section 3(b)(iv),

 

(i)                                     the
Company shall pay or cause to be paid to the Executive any Accrued Obligations;

 

(ii)                                  the
Company shall pay or cause to be paid to the Executive, within thirty business
days after the date of termination, a lump-sum payment equal to three (3)
months base salary, based on the Executive’s base salary in effect immediately
prior to the date of termination; and

 

(iii)                               for
a three (3) month period after the date of termination, the Company will
provide or cause to be provided to the Executive (and any covered dependents),
with life and health insurance benefits (but not disability insurance benefits)
substantially similar to those the Executive and any covered dependents were
receiving immediately prior to the date of termination and at the same dollar
cost to the Executive as in effect immediately prior to the termination of
employment.  If the Company provides or
arranges to provide the Executive and covered dependents with life and health
insurance benefits, those benefits will be reduced to the extent comparable
benefits are received by, or made available to, the Executive (at no greater
cost to the Executive) by another employer during the three (3) month period
following the Executive’s date of termination. 
The Executive must report to the Company any such benefits that he
receives or that are made available.  In
lieu of the benefits described in this Section 3(h)(iii), the Company, in
its sole discretion, may elect to pay or cause to be paid to the Executive a
lump sum cash payment equal to the monthly premiums that would have been paid
to provide such benefits to the Executive for each month such coverage is not
provided under this Section 3(h)(iii). 
Nothing in this Section 3(h)(iii) will extend the COBRA
continuation coverage period.

 

(i)                                     In
the event Executive’s employment is terminated by the Company under the
circumstances described in Section 3(b)(i) or (ii) or by the
Executive under Section 3(c)(i) or (ii),

 

(i)                                     the
Company will pay or cause to be paid to the Executive (or the Executive’s
estate or representative, as the case may be) any Accrued Obligations;

 

(ii)                                  the
Company will pay or cause to be paid to the Executive (or the Executive’s
estate or representative, as the case may be), within thirty business days
after the date of termination, a lump-sum payment equal to 100% of the
Executive’s annual base salary in effect immediately prior to the date of
termination; and

 

(iii)                               for
a one (1) year period after the date of termination, the Company will provide
or cause to be provided to the Executive (and any covered dependents), with
life and health insurance benefits (but not disability insurance benefits)
substantially similar

 

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to those the Executive and any covered dependents were
receiving immediately prior to the date of termination and at the same dollar
cost to the Executive as in effect immediately prior to the termination of
employment.  If the Company provides or
arranges to provide the Executive and covered dependents with life and health
insurance benefits, those benefits will be reduced to the extent comparable
benefits are received by, or made available to, the Executive (at no greater
cost to the Executive) by another employer during the one (1) year period
following the Executive’s date of termination. 
The Executive must report to the Company any such benefits that he
receives or that are made available.  In lieu
of the benefits described in this Section 3(i)(iii), the Company, in its
sole discretion, may elect to pay or cause to be paid to the Executive a lump
sum cash payment equal to the monthly premiums that would have been paid to
provide such benefits to the Executive for each month such coverage is not
provided under this Section 3(i)(iii). 
Nothing in this Section 3(i)(iii) will extend the COBRA
continuation coverage period.

 

(j)                                     In
the event Executive’s employment is terminated by the Company under any
circumstances described in Section 3(b)(iii) or by Executive as a
result of resignation or voluntary termination due to any circumstance other
than the material reductions, relocation or violations described in Section 3(c)(iii)
above, there will be no amounts owed to the Executive under Section 4
or any other part of this Agreement, from and after the effectiveness of
termination.

 

(k)                                  The
payments and benefits required by Section 3(f), 3(g), 3(h) or 3(i),
as applicable, constitute severance and liquidated damages, and, except for
payments that may be required pursuant to Section 10, the Company
will be obligated to pay or cause to be paid any further amounts to Executive
under this Agreement or otherwise be liable to Executive in connection with any
termination.

 

(l)                                     All
determinations pursuant to this Section 3 shall be made by the
Company’s Board of Directors (not including Executive) in good faith.

 

(m)                               Termination
of the Term of Employment will not terminate Sections 7 through 10
and 12 through 22, or any other provisions not associated
specifically with the Term of Employment.

 

(n)                                 In
the event the Term of Employment is terminated and the Company is obligated to
make or cause to be made payments pursuant to Section 3(f), the
Executive will use his reasonable efforts to seek and obtain alternative
employment; provided, however, that the Executive shall not be
required to accept a position or positions of a substantially different
character than the position(s) held by him under this Agreement; and provided
further, if the Executive shall become physically or mentally disabled,
he will not be under such duty.  If
Executive thereafter obtains alternative employment, then if and to the extent
Executive obtains such employment, the payment obligations under Section 3(f),
including the obligation to provide insurance coverage, if any, will be
mitigated and reduced by and to the extent of Executive’s compensation under
such alternative employment during the period for which payments are owed
pursuant to Section 3(f). 
Moreover, in the event that after the Restricted

 

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Period pursuant to Section 8(a),
Executive is employed by or engaged in a Competitive Business as contemplated
by Section 8(a)(i), then the payments under Section 3(f)
will thereupon cease.

 

(o)                                 Notwithstanding
any provision herein to the contrary, as a condition to payment of any amounts
or provision of any benefits pursuant to Sections 3(f) through 3(i)
or 10 of this Agreement (other than due to the Executive’s death), the
Executive shall be required to have executed a complete release of the
Companies and related parties in such form as is reasonably required by the
Company, and any waiting periods contained in such release shall have expired.

 

4.                                       Compensation

 

The
Company shall pay or cause to be paid to Executive the following compensation:

 

(a)                                  During
the Term of Employment, the Company shall pay or cause to be paid to Executive
as base compensation for his services hereunder, in monthly installments, a
base salary at a rate of $290,000 per annum, as increased on an annual basis to
reflect the increase in the United States Cost of Living Index for All Urban
Consumer (CPI-U) for the Boston, Massachusetts area (the “CPI-U Index”).  The January 2004 CPI-U Index shall
provide the basis for calculations of such increases.  Notwithstanding the minimum increase set
forth above, the Board of Directors of the Company or a committee thereof may
establish a higher compensation level.

 

(b)                                 During
the Term of Employment, the Company shall pay or cause to be paid to Executive
an annual bonus based on Executive’s performance, as determined and approved by
the Board of Directors of the Company or a committee thereof.  Such bonus will be at the full discretion of
the Board of Directors of the Company or a committee thereof, and may not be
paid at all.  Executive acknowledges that
no bonus has been agreed upon or promised. 
If the Board of Directors of the Company or a committee thereof decides
to pay a bonus, it is to be paid within 30 days after the issuance of audited
financial statements for the Company.

 

5.                                       Reimbursement
of Expenses

 

During the Term of Employment, the Company shall
reimburse or cause Executive to be reimbursed for documented travel,
entertainment and other expenses reasonably incurred by Executive in connection
with the performance of his duties hereunder and, in each case, in accordance
with applicable rules, customs and usages promulgated by the Companies from
time to time in effect.

 

6.                                       Benefits

 

During the Term of Employment, the Executive shall be
entitled to perquisites, paid vacations and benefits (including health, short
and long term disability, pension and life insurance benefits consistent with
past practice, or as increased from time to time) established from time to
time, by the Board of Directors of the Company for executives of the Companies,
subject to the policies and procedures in effect regarding participation in
such benefits.

 

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7.                                       Confidential
Information

 

During and after the Term of Employment, Executive
will not, directly or indirectly in one or a series of transactions, disclose
to any person, or use or otherwise exploit for the Executive’s own benefit or
for the benefit of anyone other than the Companies, any Confidential
Information, whether prepared by Executive or not; provided, however,
that any Confidential Information may be disclosed to officers,
representatives, employees and agents of the Companies who need to know such
Confidential Information in order to perform the services or conduct the
operations required or expected of them in the Business (as defined in Section 11).  Executive shall use his best efforts to
prevent the removal of any Confidential Information from the premises of the
Companies, except as required in his normal course of employment by the
Company.  Executive shall use
commercially reasonable efforts to cause all persons or entities to whom any
Confidential Information shall be disclosed by him hereunder to observe the
terms and conditions set forth herein as though each such person or entity was
bound hereby.  Executive shall have no
obligation hereunder to keep confidential any Confidential Information if and to
the extent disclosure of any thereof is specifically required by law; provided,
however, that in the event disclosure is required by applicable law, the
Executive shall provide the Companies with prompt notice of such requirement,
prior to making any disclosure, so that the Companies may seek an appropriate
protective order.  At the request of the
Companies, Executive agrees to deliver to the Companies, at any time during the
Term of Employment, or thereafter, all Confidential Information which he may
possess or control.  Executive agrees
that all Confidential Information of the Companies (whether now or hereafter
existing) conceived, discovered or made by him during the Term of Employment
exclusively belongs to the Companies (and not to Executive).  Executive will promptly disclose such Confidential
Information to the Companies and perform all actions reasonably requested by
the Companies to establish and confirm such exclusive ownership.

 

8.                                       Non-Interference

 

(a)                                  Executive
acknowledges that the services to be provided give him the opportunity to have
special knowledge of the Companies and their Confidential Information and the
capabilities of individuals employed by or affiliated with the Companies and
that interference in these relationships would cause irreparable injury to the
Companies.  In consideration of this
Agreement, Executive covenants and agrees that:

 

(i)                                     During
the Restricted Period (which shall not be reduced by any period of violation of
this Agreement by Executive or period which is required for litigation to
enforce the rights hereunder), Executive will not, without the express written
approval of the Board of Directors of the Company, anywhere in the Market,
directly or indirectly, in one or a series of transactions, own, manage,
operate, control, invest or acquire an interest in, or otherwise engage or
participate in, whether as a proprietor, partner, stockholder, lender,
director, officer, employee, joint venturer, investor, lessor, supplier,
customer, agent, representative or other participant, in any business which
competes, directly or indirectly, with the Business in the Market (“Competitive
Business”) without regard to (A) whether the Competitive Business has its
office, manufacturing or other business facilities within or without the
Market, (B) whether any of the activities of the Executive referred to above
occur or are performed within or without the Market or (C)

 

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whether the Executive resides, or reports to an
office, within or without the Market; provided, however, that (x)
the Executive may, anywhere in the Market, directly or indirectly, in one or a
series of transactions, own, invest or acquire an interest in up to five
percent (5%) of the capital stock of a corporation whose capital stock is
traded publicly, or that (y) Executive may accept employment with a successor
company to the Company.

 

(ii)                                  During
the Restricted Period (which shall not be reduced by any period of violation of
this Agreement by Executive or period which is required for litigation to
enforce the rights hereunder), Executive will not without the express prior
written approval of the Board of Directors of the Company (A) directly or
indirectly, in one or a series of transactions, recruit, solicit or otherwise
induce or influence any proprietor, partner, stockholder, lender, director,
officer, employee, sales agent, joint venturer, investor, lessor, supplier,
customer, agent, representative or any other person which has a business
relationship with the Companies or had a business relationship with the
Companies within the 24 month period preceding the date of the incident in
question, to discontinue, reduce or modify such employment, agency or business
relationship with the Companies, or (B) employ or seek to employ or cause any
Competitive Business to employ or seek to employ any person or agent who is
then (or was at any time within 24 months prior to the date the Executive or
the Competitive Business employs or seeks to employ such person) employed or
retained by the Companies. 
Notwithstanding the foregoing, nothing herein shall prevent the
Executive from providing a letter of recommendation to an employee with respect
to a future employment opportunity.

 

(iii)                               The
scope and term of this Section 8 would not preclude Executive from
earning a living with an entity that is not a Competitive Business.

 

(b)                                 In
the event that Executive breaches his obligations in any material respect under
Section 7, this Section 8 or Section 9, the
Company, in addition to pursuing all available remedies under this Agreement,
at law or otherwise, and without limiting its right to pursue the same shall
cease or cause to be ceased all payments to the Executive under this Agreement
or any other agreement.

 

9.                                       Non-Disparagement

 

During
and after the Term of Employment, the Executive agrees that he shall not make
any false, defamatory or disparaging statements about the Companies or the
officers or directors of the Companies. 
During and after the Term of Employment, the Company agrees, on behalf
of the Companies that neither the officers nor the directors of the Companies
shall make any false, defamatory or disparaging statements about the Executive.

 

10.                                 Excise
Tax Gross-up Payments

 

(a)                                  If
any payments or benefits paid or provided or to be paid or provided to the
Executive or for his benefit pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, his employment with the
Company or the termination thereof (a “Payment”) would be subject to the
excise tax (the “Excise Tax”) imposed by Section 4999 of

 

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the Internal Revenue Code
of 1986, as amended (the “Code”), then the Executive will be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such
that after payment by the Executive of all income taxes, employment taxes and
any Excise Tax imposed upon the Gross-Up Payment (including any related
interest and penalties), the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax (including any related interest and penalties)
imposed upon the Payments.

 

(b)                                 An
initial determination of whether a Gross-Up Payment is required pursuant to
this Agreement, and the amount of such Gross-Up Payment, will be made at the
Company’s expense by an accounting firm selected by the Company.  The accounting firm will provide its
determination, together with detailed supporting calculations and
documentation, to the Company and the Executive within 10 days after the date
of termination of Executive’s employment, or such other time as may be
requested by the Company or the Executive. 
If the accounting firm determines that no Excise Tax is payable by the
Executive with respect to a Payment or Payments, it will furnish the Executive
with an opinion to that effect.  If a
Gross-Up Payment becomes payable, such Gross-Up Payment shall be paid to the
Executive within thirty business days of the receipt of the accounting firm’s
determination.  Within 10 days after the
accounting firm delivers its determination to the Executive, the Executive will
have the right to dispute the determination. 
The existence of a dispute will not in any way affect the Executive’s
right to receive the Gross-Up Payment in accordance with the
determination.  If there is no dispute,
the determination will be binding, final, and conclusive upon the Company and
the Executive.  If there is a dispute,
the Company and the Executive will together select a second accounting firm,
which will review the determination and the Executive’s basis for the dispute
and then will render its own determination, which will be binding, final, and
conclusive on the Company and on the Executive for purposes of determining
whether a Gross-Up Payment is required pursuant to this Section 10(b).  If as a result of any dispute pursuant to this
Section 10(b) additional Gross-Up Payments are made, such
additional Gross-Up Payment will be paid to the Executive within thirty
business days of the receipt of the second accounting firm’s
determination.  The Company will pay or
caused to be paid all costs associated with the second accounting firm’s
determination, unless such determination does not result in additional Gross-Up
Payments to the Executive, in which case all such costs will be borne by the
Executive.

 

(c)                                  For
purposes of determining the amount of the Gross-Up Payment, the Executive will
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be
made and applicable state and local income taxes at the highest marginal rate
of taxation in the state and locality of the Executive’s residence on the date
of termination of Executive’s employment, net of the maximum reduction in
federal income taxes that would be obtained from deduction of those state and
local taxes.

 

(d)                                 As
a result of the uncertainty in the application of Section 4999 of the
Code, it is possible that Gross-Up Payments which will not have been made
should have been made (“Underpayment”) or Gross-Up Payments are made
which should not have been made (“Overpayment”).  If it is determined that an Underpayment has
occurred, the accounting firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid to
or for the benefit of Executive.  If the
Gross-Up Payment exceeds the amount

 

11

 

necessary to reimburse
the Executive for his Excise Tax, the Accounting Firm shall determine the
amount of the Overpayment that has been made and any such Overpayment (together
with interest at the rate provided in Section 1274(b)(2) of the Code)
shall be promptly paid by Executive (to the extent he has received a refund if
the applicable Excise Tax has been paid to the Internal Revenue Service) to or
for the benefit of the Company; provided, however, that if the Company
determines that such repayment obligation would be or result in an unlawful
extension of credit under Section 13(k) of the Securities Exchange Act,
repayment shall not be required.  The
Executive shall cooperate, to the extent his expenses are reimbursed in
accordance with this Section 10, with any reasonable requests by the
Company in connection with any contest or disputes with the Internal Revenue
Service in connection with the Excise Tax.

 

(e)                                  The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment of an
Underpayment.  Such notification shall be
given as soon as practicable but no later than ten (10) business days after the
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be paid.  The Executive shall not pay such claim prior
to the expiration of the thirty (30) day period following the date on which he
gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:

 

(i)                                     give
the Company any information reasonably requested by the Company relating to
such claim,

 

(ii)                                  take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,

 

(iii)                               cooperate
with the Company in good faith in order effectively to contest such claim, and

 

(iv)                              permit
the Company to participate in any proceeding relating to such claim;

 

provided, however, that
the Company shall pay or cause to be paid all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including related interest and penalties) imposed as
a result of such representation and payment of costs and expenses.  Without limitation on the foregoing
provisions of this Section 10(e), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to

 

12

 

pay such claim and sue
for a refund, such payment shall be advanced to the Executive, on an
interest-free basis and the Executive shall be indemnified and held harmless,
on an after-tax basis, from any Excise Tax or income tax (including related
interest or penalties) imposed with respect to such advance or with respect to
any imputed income with respect to such advance.  The Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

 

(f)                                    If,
after the receipt by the Executive of an amount advanced pursuant to Section 10(e),
the Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 10(e)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto).  If,
after the receipt by the Executive of an amount advanced pursuant to Section 10(e)
hereof, a determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial of refund prior to the
expiration of thirty (30) days after such determination, then such advance
shall be forgiven and shall not be required to be repaid.

 

11.                                 Definitions

 

Capitalized
terms used in this Agreement but not otherwise defined shall have the meanings
set forth below:

 

“Business” means any business conducted, or
engaged in, by the Companies prior to the date hereof or at any time during the
Term of Employment.

 

“Cause” is defined in Section 3(c).

 

“Change of Control” means any of the following:
(i) the closing of any merger, combination, consolidation or similar
business transaction involving the Company in which the holders of Company
Common Stock immediately prior to such closing are not the holders, directly or
indirectly, of a majority of the ordinary voting securities of the surviving
person in such transaction immediately after such closing, (ii) the
closing of any sale or transfer by the Company of all or substantially all of
its assets to an acquiring person in which the holders of Company Common Stock
immediately prior to such closing are not the holders of a majority of the
ordinary voting securities of the acquiring person immediately after such
closings, or (iii) the closing of any sale by the holders of Company
Common Stock of an amount of Company Common Stock that equals or exceeds a
majority of the shares of Company Common Stock immediately prior to such
closing to a person in which the holders of the Company Common Stock
immediately prior to such closing are not the holders of a majority of the
ordinary voting securities of such person immediately after such closing.

 

“Companies” means the Company and its
successors or any of its direct or indirect parents or direct or indirect
subsidiaries, now or hereafter existing.

 

13

 

“Company” is defined in the introduction.

 

“Competitive Business” is defined in Section 8(a)(i).

 

“Confidential Information” means any
confidential information including, without limitation, any study, data,
calculations, software storage media or other compilation of information,
patent, patent application, copyright, trademark, trade name, service mark,
service name, “know-how”, trade secrets, customer lists, details of client or
consultant contracts, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business acquisition plans
or any portion or phase of any scientific or technical information, ideas,
discoveries, designs, computer programs (including source of object codes),
processes, procedures, formulas, improvements or other proprietary or
intellectual property of the Companies, whether or not in written or tangible
form, and whether or not registered, and including all files, records, manuals,
books, catalogues, memoranda, notes, summaries, plans, reports, records,
documents and other evidence thereof. 
The term “Confidential Information” does not include, and there
shall be no obligation hereunder with respect to, information that becomes
generally available to the public other than as a result of a disclosure by the
Executive not permissible hereunder.

 

“Executive” means Edward N. Patrick, Jr. or his
estate, if deceased.

 

“Market” means any state in the United States
of America and each similar jurisdiction in any other country in which the Business
was conducted by or engaged in by the Companies prior to the date hereof or is
conducted or engaged in, or in which the Companies are seeking authorization to
conduct Business at any time during the Term of Employment.

 

“Regulations” is defined in Section 2(c).

 

“Restricted Period” means the date commencing
on the date of this Agreement and ending on the later of (x) the date of
termination of the Term of Employment or (y) the end of the applicable
severance period provided under Section 3(f); provided, however,
that the “Restricted Period” may be extended, in the sole discretion of the
Company, for an additional period of up to twenty-four (24) months if the
Company continues to pay or to cause to be paid to the Executive (i) the full
amounts to which he would be entitled as base compensation under Section 4(a)
and (ii) customary benefits, in each case during such extended period.

 

“Stockholders Agreement” means the Stockholders
Agreement, dated as of October 16, 2001, by and between Safety Holdings,
Inc. and the stockholders signatory thereto.

 

“Term of Employment” is defined in Section 3(a).

 

12.                                 Notice

 

Any notice, request, demand or other communication
required or permitted to be given under this Agreement shall be given in
writing and if delivered personally, or sent by certified or registered mail,
return receipt requested, as follows (or to such other addressee or address as
shall be set forth in a notice given in the same manner):

 

14

 

	
  If to Executive:

  	
  Edward N. Patrick, Jr.

  
	
   

  	
  c/o Safety Insurance Group, Inc.

  
	
   

  	
  20 Custom House Street

  
	
   

  	
  Boston, Massachusetts  02110

  
	
   

  	
   

  
	
  If to Company:

  	
  Safety Insurance Group, Inc.

  
	
   

  	
  20 Custom House Street

  
	
   

  	
  Boston, Massachusetts  02110

  
	
   

  	
  Attention: David F. Brussard

  

 

Any such notices shall be deemed to be given on the
date personally delivered or such return receipt is issued.

 

13.                                 Executive’s
Representation

 

Executive hereby warrants and represents to the
Company that Executive has carefully reviewed this Agreement and has
consulted with such advisors as Executive considers appropriate in connection
with this Agreement, and is not subject to any covenants, agreements or
restrictions, including without limitation any covenants, agreements or
restrictions arising out of Executive’s prior employment which would be
breached or violated by Executive’s execution of this Agreement or by Executive’s
performance of his duties hereunder.

 

14.                                 Other
Matters

 

(a)                                  Executive
agrees and acknowledges that the obligations owed to Executive under this
Agreement are solely the obligations of the Company, and that none of the
Companies’ stockholders, directors, officers, affiliates, representatives,
agents or lenders will have any obligations or liabilities in respect of this
Agreement and the subject matter hereof.

 

(b)                                 Notwithstanding
anything contained herein to the contrary, the Companies may withhold from any
amounts payable under, or benefits provided pursuant to, this Agreement all
federal, state, local, and foreign taxes that are required to be withheld by
applicable laws or regulations.

 

(c)                                  In
addition to any obligations imposed by law upon any successor to the Company,
the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

 

15.                                 Validity

 

If, for any reason, any provision hereof shall be
determined to be invalid or unenforceable, the validity and effect of the other
provisions hereof shall not be affected thereby.

 

15

 

16.                                 Severability

 

Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.  If any court determines that any provision of
Section 8 or any other provision hereof is unenforceable and
therefore acts to reduce the scope or duration of such provision, the provision
in its reduced form shall then be enforceable.

 

17.                                 Waiver
of Breach; Specific Performance

 

The waiver by the Company or Executive of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any other breach of such other party.  Each of the parties (and third party
beneficiaries) to this Agreement will be entitled to enforce its respective
rights under this Agreement and to exercise all other rights existing in its
favor.  The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of Sections 7,  8 and 9 of this Agreement
and that any party (and third party beneficiaries) may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions in order to enforce or
prevent any violations of the provisions of this Agreement.  In the event either party takes legal action
to enforce any of the terms or provisions of this Agreement, the nonprevailing
party shall pay the successful party’s costs and expenses, including but not
limited to, attorneys’ fees, incurred in such action.

 

18.                                 Assignment;
Third Parties

 

Neither the Executive nor the Company may assign,
transfer, pledge, hypothecate, encumber or otherwise dispose of this Agreement
or any of his or its respective rights or obligations hereunder, without the
prior written consent of the other.  The
parties agree and acknowledge that each of the Companies and the stockholders
and investors therein are intended to be third party beneficiaries of, and have
rights and interests in respect of, Executive’s agreements set forth in Sections
7, 8 and 9.

 

19.                                 Amendment;
Entire Agreement

 

This Agreement may not be changed orally but only by
an agreement in writing agreed to by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.  This Agreement embodies the entire agreement
and understanding of the parties hereto in respect of the subject matter of
this Agreement, and supersedes and replaces all prior agreements,
understandings and commitments with respect to such subject matter, including,
without limitation, that certain Employment Agreement, dated October 16,
2001, between Executive and Safety Insurance Company.

 

16

 

20.                                 Litigation

 

THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED,
APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, EXCEPT THAT NO DOCTRINE OF CHOICE OF LAW SHALL BE USED TO APPLY
ANY LAW OTHER THAN THAT OF MASSACHUSETTS, AND NO DEFENSE, COUNTERCLAIM OR RIGHT
OF SET-OFF GIVEN OR ALLOWED BY THE LAWS OF ANY OTHER STATE OR JURISDICTION, OR
ARISING OUT OF THE ENACTMENT, MODIFICATION OR REPEAL OF ANY LAW, REGULATION,
ORDINANCE OR DECREE OF ANY FOREIGN JURISDICTION, BE INTERPOSED IN ANY ACTION
HEREON.  EXECUTIVE AND THE COMPANY AGREE
THAT ANY ACTION OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS AGREEMENT SHALL
BE COMMENCED IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS LOCATED IN
BOSTON, MASSACHUSETTS OR THE UNITED STATES DISTRICT COURTS IN BOSTON,
MASSACHUSETTS.  EXECUTIVE AND THE COMPANY
CONSENT TO SUCH JURISDICTION, AGREE THAT VENUE WILL BE PROPER IN SUCH COURTS
AND WAIVE ANY OBJECTIONS BASED UPON FORUM NON CONVENIENS.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION 20
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY
OTHER JURISDICTION.

 

21.                                 Further
Action

 

Executive and the Company agree to perform any further
acts and to execute and deliver any documents which may be reasonable to carry out
the provisions hereof.

 

22.                                 Counterparts

 

This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

IN WITNESS WHEREOF, this Agreement has been executed
as of the date first written above.

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/  EDWARD N. PATRICK, JR.

  	
   

  
	
   

  	
  Name:  Edward
  N. Patrick, Jr.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SAFETY INSURANCE GROUP, INC.:

  
	
   

  	
   

  
	
   

  	
  /s/  DAVID F. BRUSSARD

  	
   

  
	
   

  	
  Name:

  	
  David F.
  Brussard

  
	
   

  	
  Title:

  	
  President, CEO
  and Chairman of the Board

  
				

 

17Exhibit 4.1

 

EXECUTION COPY

 

 

CREDIT AGREEMENT

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

 

Dated as of September 30, 2004

 

among

 

UNOVA, INC.,

UNOVA INDUSTRIAL AUTOMATION SYSTEMS, INC.,

INTERMEC TECHNOLOGIES CORPORATION,

INTERMEC INTERNATIONAL INC.,

INTERMEC TECHNOLOGIES MANUFACTURING, LLC,

INTERMEC IP CORP. and UNOVA IP
CORP.

 

as Borrowers,

 

THE LENDERS WHICH ARE PARTIES HERETO

 

and

 

KEYBANK NATIONAL ASSOCIATION

 

as Administrative Agent, Lead Arranger and Book Manager

 

and

 

KEYBANK NATIONAL ASSOCIATION

 

as LC Issuer

 

 

 

TABLE OF CONTENTS

 

	
  Section 1 DEFINITIONS; ACCOUNTING TERMS;
  GOVERNANCE.

  	
   

  
	
   

  	
   

  
	
  1.1 Certain Defined Terms.

  	
   

  
	
  1.2 Accounting Terms; Calculations.

  	
   

  
	
  1.3 Authorization of Borrower
  Representative.

  	
   

  
	
  1.4 Construction of Terms Generally.

  	
   

  
	
  1.5
  USA Patriot Act Notification; Representations and Undertaking.

  	
   

  
	
  (a) Borrower’s Notification and
  Representation.

  	
   

  
	
  (b) Lenders’ Certification.

  	
   

  
	
   

  	
   

  
	
  Section 2 TERMS OF THE CREDIT FACILITIES.

  	
   

  
	
   

  	
   

  
	
  2.1
  Revolving Credit Facility.

  	
   

  
	
  (a) Revolving Credit Loans.

  	
   

  
	
  (b) Revolving Credit Notes.

  	
   

  
	
  2.2 Letter of Credit Facility.

  	
   

  
	
  (a) Issuance of Letters of Credit.

  	
   

  
	
  (b) Form and Term of Letters of Credit.

  	
   

  
	
  (c) Application with Respect to Letter of
  Credit.

  	
   

  
	
  (d) Participation by Lenders in Letters of
  Credit.

  	
   

  
	
  (e)
  Reimbursement.

  	
   

  
	
  (f) Failure to Reimburse Drawings; Interest.

  	
   

  
	
  (g) Obligations Absolute.

  	
   

  
	
  (h)
  Liability of LC Issuer.

  	
   

  
	
  (i) LC Issuer Indemnity.

  	
   

  
	
  (j)
  Termination of Letter of Credit Commitment.

  	
   

  
	
  2.3 Credit Requests.

  	
   

  
	
  (a) Credit Requests for Revolving Credit Loans.

  	
   

  
	
  (b)
  Requests and Conditions for Letters of Credit.

  	
   

  
	
  (c) Requests for Revolving Credit Borrowing Deemed Given.

  	
   

  
	
  2.4 Funding of Revolving Credit Loans.

  	
   

  
	
  (a) Notice and Funding.

  	
   

  
	
  (b) Disbursement of Funds Received.

  	
   

  
	
  (c) Availability of Funds.

  	
   

  
	
  2.5 Failure of Lender to Fund Revolving
  Credit Loans or Purchase Participations.

  	
   

  
	
  (a) Continuing Obligation of the Borrowers.

  	
   

  
	
  (b) Treatment of Lender Failing To Fund.

  	
   

  
	
  (c) Continuing Obligation of Lenders to
  Fund.

  	
   

  
	
  2.6 Affiliated Funding with respect to
  Lenders.

  	
   

  
	
  2.7 Loan Account; Credits; Application of
  Payments.

  	
   

  
	
  (a) Administrative Agent Maintenance of
  Loan Account.

  	
   

  
	
  (b) Loan Account Charges\Credits; Reports.

  	
   

  
	
  (c) Crediting and Application of Specific
  Payments.

  	
   

  
	
  (d) Payments, Distributions, Treatment.

  	
   

  
	
  (e)
  Payment not on Business Day.

  	
   

  
	
  (f) Presumption of Payment in Full by the Borrowers.

  	
   

  
	
  2.8 Repayment and Prepayments.

  	
   

  
	
  (a) Scheduled Repayments.

  	
   

  
	
  (b) Mandatory Prepayments.

  	
   

  

 

	
  2.9 Reduction of Revolving Credit
  Commitment.

  	
   

  

 

i

 

	
  2.10
  Permitted Prepayments.

  	
   

  
	
  2.11 Interest Rate on Revolving Credit Loans.

  	
   

  
	
  (a)
  Alternate Base Rate Loans.

  	
   

  
	
  (b)
  LIBOR Rate Loans.

  	
   

  
	
  (c) Default Interest.

  	
   

  
	
  (d) Failure of Borrower Representative to
  Elect Interest Period.

  	
   

  
	
  2.12 Rate Conversion and Rate Continuation.

  	
   

  
	
  2.13 Computations of Interest and Fees.

  	
   

  
	
  2.14 Fees.

  	
   

  
	
  (a)
  Facility Fee.

  	
   

  
	
  (b) Letter of Credit Fees.

  	
   

  
	
  (c)
  Other Fees

  	
   

  
	
  (d) Payment of Fees; Non-Refundable.

  	
   

  
	
  (e) Unascertainable Rate; Increased Costs; Illegality.

  	
   

  
	
   

  	
   

  
	
  Section 3 CONDITIONS PRECEDENT.

  	
   

  
	
   

  	
   

  
	
  3.1 Satisfaction of Conditions Precedent on Closing Date.

  	
   

  
	
  (a) Agreement and Other Loan Documents.

  	
   

  
	
  (b) Officer’s Certificate, Resolutions, Organizational Documents.

  	
   

  
	
  (c) Good Standing and Full Force and Effect Certificates.

  	
   

  
	
  (d) Closing Certificate.

  	
   

  
	
  (e) Legal Opinions.

  	
   

  
	
  (f) Closing and Legal Fees; Administrative Agent Fee Letter.

  	
   

  
	
  (g)
  Lien Searches.

  	
   

  
	
  (h) Perfection Certificate.

  	
   

  
	
  (i) Perfection; Priority.

  	
   

  
	
  (j) Insurance Policies.

  	
   

  
	
  (k) Material Contracts.

  	
   

  
	
  (l) Initial Letter of Credit Request.

  	
   

  
	
  (m) Disbursement Direction Letter.

  	
   

  
	
  (n) Termination of Existing Credit Agreement

  	
   

  
	
  (o) Deposit of Secured Bond Assets

  	
   

  
	
  (p) Landlord/Bailee/Consignee Waivers

  	
   

  
	
  (q) Bright & Lorig Documents.

  	
   

  
	
  (r) Miscellaneous.

  	
   

  
	
  3.2 Conditions Precedent to all Credit
  Events.

  	
   

  
	
  (a) Representation Bringdown.

  	
   

  
	
  (b) No Default; Compliance with Terms.

  	
   

  
	
  (c)
  No Material Adverse Change.

  	
   

  
	
  (d) Confirmation of Asset Coverage.

  	
   

  
	
   

  	
   

  
	
  Section 4 REPRESENTATIONS AND WARRANTIES.

  	
   

  
	
   

  	
   

  
	
  4.1
  Existence.

  	
   

  
	
  4.2 Authorization.

  	
   

  
	
  4.3 Enforceability.

  	
   

  
	
  4.4 Maintenance of Insurance.

  	
   

  
	
  4.5 Title to Collateral; Liens; Transfers.

  	
   

  
	
  4.6 Lien Perfection and Priority.

  	
   

  
	
  4.7 Litigation; Proceedings.

  	
   

  
	
  4.8 Taxes.

  	
   

  
	
  4.9 Consents; Approvals.

  	
   

  
	
  4.10 Lawful Operations.

  	
   

  
	
  4.11 Environmental Compliance.

  	
   

  

 

ii

 

	
  4.12 Environmental Claims and Restrictions.

  	
   

  
	
  4.13 ERISA.

  	
   

  
	
  4.14 Agreements; Adverse Obligations; Labor
  Disputes.

  	
   

  
	
  4.15 Financial Statements; Projections.

  	
   

  
	
  (a) Financial Statements.

  	
   

  
	
  (b) Financial Projections.

  	
   

  
	
  4.16 Intellectual Property.

  	
   

  
	
  4.17
  Structure; Capitalization.

  	
   

  
	
  4.18 Value; Solvency.

  	
   

  
	
  4.19 Investment Company Act Status.

  	
   

  
	
  4.20
  Regulation U/Regulation X Compliance.

  	
   

  
	
  4.21
  Blocked Person.

  	
   

  
	
  4.22 Full Disclosure.

  	
   

  
	
  4.23 Acquisition Documents.

  	
   

  
	
   

  	
   

  
	
  Section 5 COVENANTS OF THE BORROWERS.

  	
   

  
	
   

  	
   

  
	
  5.1 Reporting and Notice Covenants.

  	
   

  
	
  (a) Quarterly Financial Statements.

  	
   

  
	
  (b) Annual Financial Statements.

  	
   

  
	
  (c) Officer’s Certificate.

  	
   

  
	
  (d) Company Reports.

  	
   

  
	
  (e) Annual Projections.

  	
   

  
	
  (f) Asset Coverage Certificates.

  	
   

  
	
  (g) Other Information.

  	
   

  
	
  (h) Notices.

  	
   

  
	
  (i) Notice of Default under ERISA.

  	
   

  
	
  (j) Environmental Reporting.

  	
   

  
	
  (k) Multiemployer Plan Withdrawal
  Liability.

  	
   

  
	
  5.2 Affirmative Covenants.

  	
   

  
	
  (a) Corporate Existence.

  	
   

  
	
  (b) Financial Records.

  	
   

  
	
  (c) Financial Examinations and Review.

  	
   

  
	
  (d) Compliance with Law.

  	
   

  
	
  (e) Compliance with Environmental Laws.

  	
   

  
	
  (f) Properties.

  	
   

  
	
  (g) Use of Proceeds.

  	
   

  
	
  (h) Compliance with Terms of All Material
  Contracts.

  	
   

  
	
  (i)
  Taxes.

  	
   

  
	
  (j) Insurance.

  	
   

  
	
  (k) License from Third Parties.

  	
   

  
	
  (l) Subsidiary Guaranties.

  	
   

  
	
  (m) Maintenance of Certain Accounts with KeyBank.

  	
   

  
	
  (n) Pledge of IAS Foreign Subsidiaries.

  	
   

  
	
  (o) Acquisition Documents.

  	
   

  
	
  5.3 Negative Covenants.

  	
   

  
	
  (a) Consolidation, Merger, Sale and
  Purchase of Assets.

  	
   

  
	
  (b) Credit Extensions; Prepayments.

  	
   

  
	
  (c)
  Indebtedness.

  	
   

  
	
  (d) Liens; Leases.

  	
   

  
	
  (e)
  Investments.

  	
   

  
	
  (f) Distributions.

  	
   

  
	
  (g) Change in Nature of Business.

  	
   

  
	
  (h) Charter Amendments.

  	
   

  

 

iii

 

	
  (i) Compliance with ERISA.

  	
   

  
	
  (j) Regulation U Compliance.

  	
   

  
	
  (k) Accounting Changes.

  	
   

  
	
  (l) Arm’s-Length Transactions.

  	
   

  
	
  5.4 Financial Covenants.

  	
   

  
	
  (a) Consolidated Leverage
  Ratio.

  	
   

  
	
  (b) Consolidated Interest Coverage Ratio.

  	
   

  
	
  (c) Minimum Consolidated Net Worth.

  	
   

  
	
   

  	
   

  
	
  Section
  6 EVENTS OF DEFAULT.

  	
   

  
	
   

  	
   

  
	
  6.1 Payment.

  	
   

  
	
  6.2 Representations and Warranties.

  	
   

  
	
  6.3 Reporting and Notice Provisions; Violation of Certain Affirmative
  Covenants.

  	
   

  
	
  6.4 Violation of Certain Other Covenants
  and Financial Covenants.

  	
   

  
	
  6.5
  Cross-Default.

  	
   

  
	
  6.6 Destruction of Collateral.

  	
   

  
	
  6.7
  Change of Control.

  	
   

  
	
  6.8 Failure of Enforceability of this
  Agreement, Loan Document; Security.

  	
   

  
	
  6.9 ERISA.

  	
   

  
	
  6.10 Judgments.

  	
   

  
	
  6.11 Financial Impairment.

  	
   

  
	
   

  	
   

  
	
  Section
  7 REMEDIES.

  	
   

  
	
   

  	
   

  
	
  7.1
  Acceleration; Termination.

  	
   

  
	
  7.2 Automatic Acceleration and Termination.

  	
   

  
	
  7.3 General Rights and Remedies of the
  Administrative Agent and the Lenders.

  	
   

  
	
  7.4 Additional Remedies.

  	
   

  
	
  (a) Possession of Collateral.

  	
   

  
	
  (b) Foreclosure of Liens.

  	
   

  
	
  (c) Disposition of Collateral.

  	
   

  
	
  (d) Application of Collateral; Application of Liquidation Proceeds.

  	
   

  
	
  7.5 Set-off.

  	
   

  
	
  7.6 Actions in Respect of the Letters of
  Credit Upon Default.

  	
   

  
	
  7.7 Authority to Execute Transfers.

  	
   

  
	
  7.8 Limited License to Liquidate.

  	
   

  
	
  7.9
  Equalization.

  	
   

  
	
  7.10 Remedies Cumulative.

  	
   

  
	
  7.11 Appointment of Attorney-in-Fact.

  	
   

  
	
   

  	
   

  
	
  Section
  8 THE ADMINISTRATIVE AGENT AND LEAD ARRANGER.

  	
   

  
	
   

  	
   

  
	
  8.1 The Administrative Agent.

  	
   

  
	
  8.2 Nature of Appointment.

  	
   

  
	
  8.3 Administrative Agent as Lender; Other Transactions.

  	
   

  
	
  8.4 Instructions from Lenders.

  	
   

  
	
  8.5 Lender’s Diligence.

  	
   

  
	
  8.6 No Implied Representations.

  	
   

  
	
  8.7 Sub-Administrative Agents.

  	
   

  
	
  8.8 Administrative Agent’s Diligence.

  	
   

  
	
  8.9
  Notice of Default.

  	
   

  
	
  8.10 Administrative Agent’s Liability.

  	
   

  

 

iv

 

	
  8.11 Administrative Agent’s and Lead
  Arranger’s Indemnity.

  	
   

  
	
  8.12 Resignation of Administrative Agent.

  	
   

  
	
  8.13 No Implied Representations.

  	
   

  
	
   

  	
   

  
	
  Section
  9 BORROWER GUARANTY.

  	
   

  
	
   

  	
   

  
	
  9.1 Borrower Cross-Guaranty; Maximum
  Liability.

  	
   

  
	
  9.2 Guaranty Unconditional.

  	
   

  
	
  9.3 Discharge; Reinstatement.

  	
   

  
	
  9.4 Waiver.

  	
   

  
	
  9.5 Stay of Acceleration.

  	
   

  
	
  9.6 Subrogation and Contribution Rights.

  	
   

  
	
  9.7 Guaranteed Obligation and Contribution
  Payments.

  	
   

  
	
  (a)
  Pro Rata Sharing.

  	
   

  
	
  (b) Deficiency.

  	
   

  
	
   

  	
   

  
	
  Section
  10 TRANSFERS AND ASSIGNMENTS.

  	
   

  
	
   

  	
   

  
	
  10.1 Successors and Assigns.

  	
   

  
	
  10.2 Transfer of Revolving Credit
  Commitments.

  	
   

  
	
  10.3 Maintenance of Register.

  	
   

  
	
  10.4
  Participations.

  	
   

  
	
  10.5 Pledge of Interests.

  	
   

  
	
  10.6 Revolving Credit Notes.

  	
   

  
	
  10.7
  USA Patriot Act.

  	
   

  
	
  10.8 Replacement of Certain Lenders.

  	
   

  
	
  10.9 Replacement of Non-consenting Lenders.

  	
   

  
	
   

  	
   

  
	
  Section
  11 CONFIDENTIALITY.

  	
   

  
	
   

  	
   

  
	
  Section
  12 INDEMNITIES.

  	
   

  
	
   

  	
   

  
	
  12.1
  Increased Costs.

  	
   

  
	
  12.2 Risk-Based Capital.

  	
   

  
	
  12.3 Taxes.

  	
   

  
	
  (a) Taxes; Withholding; Indemnification of
  Taxes Paid.

  	
   

  
	
  (b) Delivery of IRS Certificates by
  Lenders.

  	
   

  
	
  (c)
  Refunds of Taxes.

  	
   

  
	
  (d) Avoiding Negative Tax Consequences.

  	
   

  
	
  (e) Tax Benefit.

  	
   

  
	
  12.4 Losses.

  	
   

  
	
  12.5 Indemnification for Requests.

  	
   

  
	
  12.6
  General Indemnity.

  	
   

  
	
  12.7 Certificate for Indemnification.

  	
   

  
	
   

  	
   

  
	
  Section
  13 GENERAL.

  	
   

  
	
   

  	
   

  
	
  13.1 Amendments and Waivers.

  	
   

  
	
  13.2 Effective Agreement; Binding Effect.

  	
   

  
	
  13.3 Costs and Expenses.

  	
   

  
	
  13.4 Survival of Provisions.

  	
   

  
	
  13.5 Sharing of Information.

  	
   

  
	
  13.6 Interest Rate Limitation.

  	
   

  
	
  13.7 Limitation of Liability.

  	
   

  
	
  13.8 Illegality.

  	
   

  
	
  13.9 Notices.

  	
   

  

 

v

 

	
  13.10
  Governing Law.

  	
   

  
	
  13.11
  Entire Agreement.

  	
   

  
	
  13.12 Execution in Counterparts; Execution by Facsimile.

  	
   

  
	
  13.13 Waiver of Jury Trial and Submission
  to Non-Exclusive Jurisdiction.

  	
   

  

 

vi

 

EXHIBITS
AND SCHEDULES

 

	
  Exhibit A

  	
  (Form of
  Revolving Credit Note)

  	
   

  
	
  Exhibit B-1

  	
  (Form of
  Credit Request)

  	
   

  
	
  Exhibit B-2

  	
  (Form of
  Letter of Credit Request)

  	
   

  
	
  Exhibit C

  	
  (Form of
  Rate Conversion/Continuation Request)

  	
   

  
	
  Exhibit D-1

  	
  (Form of
  Security Agreement - Borrower)

  	
   

  
	
  Exhibit D-2

  	
  (Form of
  Security Agreement - Subsidiary Guarantor)

  	
   

  
	
  Exhibit D-3

  	
  (Form of
  Subsidiary Guaranty)

  	
   

  
	
  Exhibit E-1

  	
  (Form of
  Collateral Assignment of Security Interest in Patents and Patent
  Applications)

  	
   

  
	
  Exhibit E-2

  	
  (Form of
  Collateral Assignment of Security Interest in Trademarks and Licenses)

  	
   

  
	
  Exhibit E-3

  	
  (Form of
  Collateral Assignment of Security Interest in Copyrights)

  	
   

  
	
  Exhibit F

  	
  (Reserved)

  	
   

  
	
  Exhibit G

  	
  (Form of
  Existing Lender Payout)

  	
   

  
	
  Exhibit H

  	
  (Form of
  Asset Coverage Certificate)

  	
   

  
	
  Exhibit I

  	
  (Form of
  Advertising Permission Letter)

  	
   

  
	
  Exhibit J

  	
  (Form of
  Assignment and Assumption)

  	
   

  
	
  Exhibit K-1

  	
  (Form of
  Landlord Waiver)

  	
   

  
	
  Exhibit K-2

  	
  (Form of
  Warehouseman/Bailee Waiver)

  	
   

  
	
  Exhibit K-3

  	
  (Reserved)

  	
   

  
	
  Exhibit K-4

  	
  (Reserved)

  	
   

  
	
  Exhibit L-1

  	
  (Form of
  Limited License Agreement - Borrower and Subsidiary Guarantor)

  	
   

  
	
  Exhibit L-2

  	
  (Reserved)

  	
   

  
	
  Exhibit M

  	
  (Form of
  Securities Account Control Letter)

  	
   

  
	
  Exhibit N

  	
  (Form of
  Deposit Account Control Letter)

  	
   

  
	
  Exhibit O

  	
  (Form of
  Joinder Agreement)

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
  Commitments

  	
   

  
	
  Annex II

  	
  Memorandum
  of Closing

  	
   

  
	
  Annex III

  	
  Disclosure
  Schedule

  	
   

  
	
  Annex IV

  	
  Perfection
  Certificate

  	
   

  

 

vii

 

CREDIT AGREEMENT

U.S. $100,000,000

 

Dated as of September 30, 2004

 

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

 

Section 1                                             DEFINITIONS; ACCOUNTING TERMS; GOVERNANCE.

 

1.1          Certain Defined Terms.  Certain Uniform
Commercial Code terms used in this Agreement have been defined in the Security
Agreements executed by each Borrower and any Subsidiary Guarantor.  As used in this Agreement and all other Loan
Documents, the following terms shall have the meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined)
set forth below:

 

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

 

“Acquisition”
means and includes (i) any acquisition on a going concern basis (by
purchase of fee title) of any facility and/or business operated by a Person
which is not a Subsidiary of a Borrower and (ii) any acquisition of all or
substantially all (but in all cases greater than or equal to 80%) of the
outstanding equity or other similar interests in any Person that is not a
natural Person (whether by merger, stock purchase, creation of a corporate
joint venture or otherwise).

 

“Acquisition Documents”
means any and all documents executed and delivered in connection with a
Permitted Acquisition including, without limitation, any subordination
agreement executed in connection therewith.

 

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

 

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

 

1

 

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

 

“Advantage” means
any payment (whether made voluntarily or involuntarily, by offset of any
deposit or other Indebtedness or otherwise) received by a Lender or an
Affiliate of a Lender in respect of Obligations if the payment results in any
other Lender’s having more than its Pro Rata Share of the Obligations (other
than Designated Hedge Obligations) in question.

 

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

 

“Agreement” means
this Credit Agreement, as amended, restated, supplemented or otherwise modified
from time to time.

 

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

 

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

 

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

 

“Anti-Terrorism Laws”
shall mean any laws relating to terrorism or money laundering, including
Executive Order No. 13224, the USA Patriot Act, the Laws comprising or
implementing the Bank Secrecy Act, and the laws administered by the United
States Treasury Department’s Office of Foreign Asset Control (as any of the
foregoing laws may from time to time be amended, renewed, extended, or
replaced).

 

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

 

2

 

level of the
Consolidated Leverage Ratio of UNOVA, Inc. and its Subsidiaries for the Fiscal
Quarter immediately preceding such Adjustment Date as determined by reference
to the following grid:

 

	
  Level

  	
   

  	
  Consolidated

  Leverage

  Ratio

  	
   

  	
  Revolver

  ABR

  Margin

  	
   

  	
  Revolver

  LIBOR

  Rate

  Margin

  	
   

  	
  Facility

  Fee

  	
   

  
	
  I

  	
   

  	
  < 1.50 to 1.00

  	
   

  	
  50 bps

  	
   

  	
  150 bps

  	
   

  	
  37.5 bps

  	
   

  
	
  II

  	
   

  	
  > 1.50 to 1.00 but

  < 2.00 to 1.00

  	
   

  	
  75 bps

  	
   

  	
  175 bps

  	
   

  	
  37.5 bps

  	
   

  
	
  III

  	
   

  	
  > 2.00 to 1.00 but

  < 2.50 to 1.00

  	
   

  	
  100 bps

  	
   

  	
  200 bps

  	
   

  	
  50 bps

  	
   

  
	
  IV

  	
   

  	
  > 2.50 to 1.00

  	
   

  	
  150 bps

  	
   

  	
  250 bps

  	
   

  	
  50 bps

  	
   

  

 

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

 

“Approved Securities Intermediary” means
a Securities Intermediary (as defined in the UCC) or Commodity Intermediary (as
defined in the UCC) reasonably acceptable to the Administrative Agent and with
respect to which a Borrower has delivered to the Administrative Agent an
executed Securities Account Control Letter.

 

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

 

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

 

(x)            fifty percent (50%) of the aggregate
book value (net of applicable reserves in accordance with GAAP) of all
Inventory of the Borrowers and any Subsidiary Guarantors (other than Excluded
Inventory); plus

 

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

 

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

 

“Assignment and Assumption” means an assignment
and assumption entered

 

3

 

into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10), and accepted by the Administrative Agent, in
substantially the form of Exhibit J or any other form approved by the
Administrative Agent.

 

“Assumed Tax Rate” means, for or in
respect of any Tax Period (as defined in the definition of “Permitted Tax
Distribution”), the greater of (i) fifty percent (50%) or (ii) the highest
marginal tax rate applicable to individuals for such Tax Period plus ten
percent (10%).

 

“Barclay’s Facility”
means the facility provided by Barclays Bank PLC to certain Foreign
Subsidiaries of UNOVA, Inc. pursuant to that certain £15,000,000 Facility
Letter, dated February 9, 2004, that certain Ancillary Banking Facilities
Letter, dated February 9, 2004, and that certain £10,000,000 Facility Letter,
dated February 9, 2004, in each case, as amended, supplemented or otherwise
modified from time to time and, in each case, including the other documents
delivered in connection therewith.

 

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

 

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

 

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

 

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

 

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

 

“Borrowers” means
collectively, UNOVA, Inc., a Delaware corporation, UNOVA Industrial Automation
Systems, Inc., a Delaware  corporation,
Intermec Technologies Corporation, a Washington corporation, Intermec
International Inc., a Washington corporation, Intermec Technologies
Manufacturing, LLC, a Washington limited liability company, Intermec IP Corp.,
a Delaware corporation, and UNOVA IP Corp., a Delaware corporation, and any
future Domestic Subsidiary that executes and delivers a Joinder Agreement.

 

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

 

“Business Day” means
(i) a day of the year on which the Administrative Agent is not required or
authorized to close in the city in which the applicable Payment Office of the
Administrative Agent is located and (ii) if the applicable Business Day
relates to LIBOR Rate Loans, a day of the year which is a Business Day
described in clause (i) above and which is also a day on which dealings in
Dollar deposits are carried on in the London interbank market and banks are
open for business in London.

 

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

 

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

 

4

 

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

 

“Capitalized Leases” means, in respect
of any Person, any lease of property imposing obligations on such Person, as
lessee of such property, which are required in accordance with GAAP to be
capitalized on a balance sheet of such Person.

 

“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. §§ 9601 et seq.

 

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

 

“Change of Control”
means any of the following:

 

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

 

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

 

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

 

“CIP Regulations” has the meaning
specified in Section 8.13 of this Agreement.

 

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

 

5

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Collateral” means
all personal property assets of each of the Borrowers and the Subsidiary
Guarantors in which a security interest or Lien is granted to the
Administrative Agent for the benefit of the Lenders pursuant to the respective
Security Agreement of such Borrower or such Subsidiary Guarantor, as the case
may be, provided, however, that in no event shall any Borrower or
Subsidiary Guarantor be required to pledge more than 65% of the capital stock
of a Subsidiary that is not a Domestic Subsidiary and provided further that in
no event shall any Borrower or Subsidiary Guarantor be required to cause the
pledge of any capital stock of any Subsidiary of any Foreign Subsidiary.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

“Consolidated Net Debt”
means, with respect to a Person, at any date of determination, without
duplication (a) Consolidated Total Funded Debt less (b) the sum of (i) one
hundred percent (100%) of the cash and cash equivalents maintained or on
deposit in the United States and (ii) twenty percent (20%) of the cash and cash
equivalents maintained or on deposit outside of the United States.

 

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

 

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

 

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

 

“Copyrights” means,
with respect to any Borrower or Subsidiary, all original works of authorship
fixed in a tangible medium, published or unpublished, and any United States
copyrights, and registrations thereof and applications therefor, including all
renewals and extensions thereof, of such Borrower, whether now existing or
hereafter acquired.

 

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

 

7

 

participation
by any Lender in the risk thereof.

 

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

 

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

 

“Default under ERISA”
means: (a) the occurrence or existence of a material Accumulated Funding
Deficiency in respect of any Employee Benefit Plan (other than a Multiemployer
Plan) within the scope of Section 302(a) of ERISA, or (b) any failure
by any Borrower or any Subsidiary thereof to make a full and timely payment of
premiums required by Section 4001 of ERISA in respect of any Employee Benefit
Plan, or (c) the occurrence or existence of any material liability under
Section 4062, 4063, 4064, 4069, 4201, 4217 or 4243 of ERISA in respect of any
Employee Benefit Plan, or (d) the institution or existence of any action
for the forcible termination of any such Employee Benefit Plan which is within
the scope of Section 4001(a)(3) or (15) of ERISA.

 

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

 

“Deposit Account  Control
Letter” means a letter agreement, substantially in the form of Exhibit N
hereto (with such changes as may be reasonably agreed to by the Administrative
Agent) or such other form in form and substance reasonably acceptable to the
Administrative Agent, executed by a Borrower and the Administrative Agent and
acknowledged and agreed to by the relevant deposit account bank.

 

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

 

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

 

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

 

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

 

“Distribution” means
a payment made, liability incurred or other consideration (other than any
payment made solely in capital stock or other equity units of a Person) given
by such Person for the purchase, acquisition, redemption or retirement of any
capital stock (whether added to treasury or otherwise) or similar equity or
membership units of such Person or as a dividend, return of capital or other
distribution in respect of the capital stock or such other equity units of such
Person.

 

8

 

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

 

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

 

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

 

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

 

“Environmental Claims”
means any and all administrative or judicial actions, suits, demands, demand letters,
claims, complaints, liens, notices of non-compliance, investigations,
proceedings alleging non-compliance with or liabilities under any Environmental
Law or any Environmental Permit, instituted by any Person, including, without
limitation, (a) by governmental authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law or (b) by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury or threat of
injury to health or the environment.

 

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

 

“Environmental Permits”
means all permits, approvals, certificates, notifications, identification
numbers, licenses and other authorizations required under any applicable
Environmental Laws.

 

9

 

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

 

“ERISA Affiliate”
means, with respect to any Person, any other Person that is under common
control with such Person within the meaning of Section 4001(a)(14) of ERISA, or
is a member of a group which includes such Person and which is treated as a
single employer under Sections 414(b) or (c) of the Internal Revenue
Code.  In addition, for provisions of
this Agreement that relate to Section 412 of the Internal Revenue Code, the
term “ERISA Affiliate” of any Person shall mean any other Person aggregated
with such Person under Sections 414(b), (c), (m) or (o) of the Internal Revenue
Code.

 

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

 

“Eurocurrency Reserve Percentage”
means, for any Interest Period in respect of any LIBOR Rate Loan, as of any
date of determination, the aggregate of the then stated maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves), expressed as a decimal, applicable to such Interest Period (if more
than one such percentage is applicable, the daily average of such percentages
for those days in such Interest Period during which any such percentages shall
be so applicable) by the Board of Governors of the Federal Reserve System, any
successor thereto, or any other banking authority, domestic or foreign, to which
the Administrative Agent or any Lender may be subject in respect to
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Federal Reserve Board) or in respect of any other category
of liabilities including deposits by reference to which the interest rate on
LIBOR Rate Loans is determined or any category of extension of credit or other
assets that include the LIBOR Rate Loans. 
For purposes hereof, such reserve requirements shall include, without
limitation, those imposed under Regulation D of the Federal Reserve Board and
the LIBOR Rate Loans shall be deemed to constitute Eurocurrency Liabilities
subject to such reserve requirements.

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

(e)                                  are
owed by an Affiliate of any Borrower or Subsidiary Guarantor if such Affiliate
is also a Borrower or Subsidiary thereof;

 

(f)                                    are
owed by a Person that is not a citizen of or organized under the Laws of the
United States or any State or are owed by any Person located outside of the
United States unless (i) such Accounts are owed by an Account Debtor
located in Canada (other than in the Province of Quebec or other non PPSA jurisdictions)
and the Administrative Agent has a first priority lien perfected to its
satisfaction in such Accounts, or (ii) payment of such Accounts is
guaranteed by a letter of credit in form and substance and issued by a
financial institution reasonably satisfactory to the Administrative Agent and
which has been transferred or assigned to the Administrative Agent as security
for the Obligations; or

 

(g)                                 are
payable in currency other than Dollars.

 

“Excluded Foreign Subsidiary”
means each Foreign Subsidiary of UNOVA, Inc. which (i)(A) is inactive or has no
operations and (B) owns Intellectual Property (other than trademarks or
tradenames) having a fair market value which, when added to the aggregate fair
market value of the Intellectual Property (other than trademarks and
tradenames) owned by all other Excluded Foreign Subsidiaries and Excluded
Subsidiaries, aggregates less than Two Million Five Hundred Thousand Dollar
($2,500,000), or (ii)(A) maintains a Capitalization of less than Five Million
Dollars ($5,000,000), (B) contributes less than Seven Hundred Thousand Dollars
($700,000) to the Consolidated EBITDA of UNOVA, Inc. and its consolidated
Subsidiaries and (C) owns Intellectual Property (other than trademarks and
tradenames) having a fair market value which, when added to the aggregate fair
market value of the Intellectual Property 
(other than trademarks and tradenames) owned by all other Excluded
Foreign Subsidiaries and Excluded Subsidiaries, aggregates less than Two Million
Five Hundred Thousand Dollars ($2,500,000), a list of such Excluded Foreign
Subsidiaries as of the Closing Date is disclosed on the Disclosure Schedule; provided,
however that “Excluded Foreign Subsidiary” shall not include: (x) any
Foreign Subsidiary the stock or other ownership interest of which has been
pledged to the Administrative Agent for the benefit of the Lenders pursuant to
a non-U.S. law governed pledge instrument or agreement and (y) any Special
Foreign Subsidiary.

 

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

 

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

 

(b)                                 is
not subject to a first priority, perfected security interest in favor of the
Administrative Agent or is subject to a Lien in favor of any Person other than
the Administrative Agent except for any Lien permitted by clauses (C), (E), (G)
and (K) of Section 5.3(d) of this Agreement;

 

11

 

(c)                                  is
on consignment; or

 

(d)                                 is
located outside of the United States.

 

“Excluded M&E”
means the operating Equipment of the Borrowers or the Subsidiary Guarantors
which:

 

(a)                                  is
a Fixture;

 

(b)                                 is
not owned in fee by such Borrower or such Subsidiary Guarantor;

 

(c)                                  is
not subject to a first priority, perfected security interest in favor of the
Administrative Agent for the benefit of the Lender or is subject to a Lien in
favor of any Person other than the Administrative Agent except for any Liens
permitted pursuant to by clauses (C), (E), (G) and (K) of Section 5.3(d);
or

 

(d)                                 is
located outside of the United States.

 

“Excluded Subsidiary”
means each direct and indirect Domestic Subsidiary of UNOVA, Inc. (that is not
a Foreign Subsidiary) which (i)(A) is inactive or has no operations and (B)
owns Intellectual Property (other than trademarks or tradenames) having a fair
market value which, when added to the aggregate fair market value of the
Intellectual Property (other than trademarks and tradenames) owned by all other
Excluded Subsidiaries and Excluded Foreign Subsidiaries, aggregates less than
Two Million Five Hundred Thousand Dollars ($2,500,000), or (ii)(A) maintains a
Capitalization of less than Five Million Dollars ($5,000,000), (B) contributes
less than Seven Hundred Thousand Dollars ($700,000) to the Consolidated EBITDA
of UNOVA, Inc. and its consolidated Subsidiaries and (C) owns Intellectual
Property (other than trademarks and tradenames) having a fair market value
which, when added to the aggregate fair market value of the Intellectual
Property (other than trademarks and tradenames) owned by all other Excluded
Subsidiaries and Excluded Foreign Subsidiaries, aggregates less than Two
Million Five Hundred Thousand Dollars ($2,500,000), a list of such Excluded
Subsidiaries as of the Closing Date is disclosed on the Disclosure Schedule; provided,
however that “Excluded Subsidiary” shall in any event include The
Factory Power Company, an Ohio corporation.

 

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

 

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

 

“Facility Fee” has
the meaning set forth in Section 2.14(a).

 

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

 

12

 

day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided, however, that: (a) if the day
for which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such a rate on such transactions on the
immediately preceding Business Day as so published on the next succeeding
Business Day and (b) if such rate is not so published for any Business
Day, the Federal Funds Rate for such Business Day shall be the average of
quotations for such day on such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by the
Administrative Agent.

 

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

 

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

 

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

 

(b)           the Person generally
ceases or is generally unable or admits in writing its inability, generally, to
make timely payment upon the Person’s debts, obligations, or liabilities as
they mature or come due;

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

“Fund” means any Person (other than a
natural person) that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business.

 

“GAAP” means
generally accepted accounting principles of the U.S. consistent with those
applied in the preparation of the financial statements referred to in
Section 5.1 of this Agreement and otherwise consistently applied.

 

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

 

“Guaranty Obligations”
means, with respect to any Person, without duplication, any obligation of such
Person to guarantee any Indebtedness (‘primary Indebtedness’) of any other
Person (the ‘primary obligor’) in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether
contingent or not contingent, (a) to purchase any such primary
Indebtedness or any property constituting direct or indirect security therefor,
(b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise maintain the net worth or solvency
of the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
Indebtedness of the ability of the primary obligor to make payment of such
primary Indebtedness, or (d) otherwise to assure or hold harmless the
owner of such primary Indebtedness against loss in respect thereof; provided,
however, that the term “Guaranty Obligations” shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated

 

14

 

liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.

 

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

 

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

 

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

 

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

 

“Industrial Automation Systems Segment”
means the operations of UNOVA

 

15

 

Industrial
Automation Systems, Inc., R&B Machine Tool Company, UNOVA JSM, Inc., UNOVA
IP Corp., Honsberg Lamb Sonderwerkzeugmaschinen GmbH, Cincinnati Machine U.K.
Limited, UNOVA U.K. Limited, The Factory Power Company, Cincinnati Machine
Korea Corp., Cincinnati Machine UK Holdings Limited, Cincinnati Machine
Holdings UK Limited, UNOVA Canada, Inc., and UNOVA Financing Ltd.

 

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

 

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

 

(i)                                     the
Interest Period for each LIBOR Rate Loan comprising part of the same Revolving
Credit Borrowing shall be of the same duration;

 

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

 

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

 

(iv)                              with
respect to LIBOR Rate Loans, no Interest Period may end on a date later than
the Revolving Credit Termination Date; and

 

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

 

“IRS” means the
Internal Revenue Service of the United States.

 

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

 

“KeyBank” means
KeyBank National Association, a national banking association.

 

16

 

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

 

“LC Exposure” means,
with respect to any Lender, at any time of determination, such Lender’s Pro
Rata Share of the sum of: (a) the aggregate undrawn amount of all Letters
of Credit outstanding at such time, plus (b) the aggregate amount
that has been drawn under such Letters of Credit for which the LC Issuer has
not at such time been reimbursed by the Borrowers.

 

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

 

“Lead Arranger” means KeyBank and its
successors or assigns.

 

“Lender Default”
means (i) the refusal (which has not been retracted) of a Lender in
violation of its obligations under this Agreement to make available to the
Administrative Agent its Pro Rata Share of any Revolving Credit Borrowing
hereunder or to fund any portion of the participation purchase price payable by
such Lender for its participating interests hereunder or (ii) the
notification (which has not been retracted) to the Administrative Agent or the
Borrower Representative by a Lender that such Lender does not intend to comply
with its obligations hereunder to make available to the Administrative Agent
its Pro Rata Share of any Revolving Credit Borrowing hereunder or to fund any
portion of the participation purchase price payable by such Lender for its
participating interests hereunder.

 

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

 

“Lending Installation”
means, with respect to a Lender or its successor or assigns, the branch,
Subsidiary or Affiliate of such Lender or its successor or assigns specified
under the name of such Lender on the signature pages hereto or as otherwise
selected by such Lender pursuant to Section 2.6 of this Agreement, or such
other branch, Subsidiary or Affiliate as such Lender may from time to time
specify in writing to the Borrower Representative, the Administrative Agent and
the Lenders as its Lending Installation.

 

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

 

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

 

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

 

17

 

of this
Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Loan Documents”
means (i) this Agreement, any note, mortgage (if any) or deed of trust (if
any), security agreement, pledge, guaranty or other lien instrument, any fee
letter, reimbursement agreement (if any), notice, Revolving Credit Loan
request, officer’s certificate or other writing of any kind which is now or
hereafter required to be delivered by the Borrowers to the Administrative
Agent, the Lenders or the LC Issuer (or any of their respective Affiliates) in
connection with this Agreement, including, without limitation, the Revolving
Credit Notes and (ii) any Designated Hedge Agreement.

 

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

 

18

 

such LIBOR
Rate Borrowing and with a maturity comparable to such Interest Period are
offered to the prime banks by leading banks in the London interbank
market.  The London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Eurocurrency Reserve Percentage.

 

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

 

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

 

“Material License Agreement”
means each license agreement of a Borrower in respect of Third Party
Intellectual Property the termination of which could reasonably be expected to
result in a Material Adverse Effect.

 

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

 

“Moody’s” means Moody’s Investors
Services, Inc., and any successor thereto.

 

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

 

“Net Proceeds” means
the cash proceeds (including cash proceeds subsequently received in respect of
non-cash consideration initially received) from any sale, lease, transfer or
other disposition of any assets (excluding real estate) of, or equity interest
in, Industrial Automation Systems Segment (or the merger of such segment or
division thereof with or into another Person) to a Person received by the
Borrowers (net of (x) selling expenses, including without limitation any
reasonable broker’s fees or commissions, costs of discontinuing operations
associated with such assets and taxes and tax liabilities arising as a result
of any gain associated with such sale or disposition and (y) the repayment
of any Indebtedness secured by a purchase money Lien on such assets that is
permitted under this Agreement).

 

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

 

19

 

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

 

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

 

“Obligations” means
the present and future obligations of each of the Borrowers to the Administrative
Agent, the Lenders and the LC Issuer under this Agreement or any other Loan
Document including without limitation (a) the outstanding principal and
accrued interest (including interest accruing after a petition for relief under
the federal bankruptcy laws has been filed, whether or not allowed) in respect
of any Revolving Credit Loans advanced to the Borrowers by the Lenders plus
the outstanding LC Exposure of the Lenders and the obligation of the Borrowers
to repay the Lenders for Revolving Credit Loans thereby in connection with the
LC Exposure, (b) all fees owing to the Lenders or the Administrative Agent
under this Agreement and the other Loan Documents, (c) any costs and
expenses reimbursable to the Lenders or the Administrative Agent pursuant to
Section 13.3 of this Agreement, (d) Taxes, Other Taxes, compensation,
indemnification obligations or other amounts owing by the Borrowers to the
Administrative Agent or the Lenders under this Agreement, the Notes or any Loan
Document, (e) Letter of Credit Obligations owing to the LC Issuer, (f) the
Unpaid Reimbursement Obligation and (g) the Designated Hedge Obligations and
any fees, charges or other amounts owing to any Lender for cash management
services owing to any Lender (amounts owing to a Person or to an Affiliate of a
Person which was a Lender at the time the hedge exposure of a Borrower was
incurred, or which was a Lender at the time the cash management charge was
incurred, or which was the LC Issuer at the time the Letter of Credit Obligations
were incurred shall continue to be considered as an Obligation for all purposes
hereunder and secured hereby even after such Person is no longer a Lender or
the LC Issuer unless such Obligation has been terminated or such Person
otherwise waives such Obligation).

 

“Operating Account”
means, with respect to the Borrowers, the account described in the Disclosure
Schedule and maintained by and in the name of the Borrower Representative with
KeyBank National Association for the purposes of disbursing the proceeds of
Revolving Credit Loans.

 

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

 

“Participant” has the meaning specified
in Section 10.4 of this Agreement.

 

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

 

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

 

“PBGC” means the
Pension Benefit Guaranty Corporation or any other governmental authority
succeeding to any of its functions.

 

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

 

20

 

or any
Subsidiary as to which all of the following conditions are satisfied or as to
which the Required Lenders have otherwise consented in accordance with
Section 13.1 of this Agreement:

 

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

 

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

 

(iii)                               such Acquisition is not
actively opposed by the board of directors (or similar governing body) of the
selling Person or the person whose equity interests are to be acquired, unless
all of the Lenders specifically approve or consent to such Acquisition in
writing;

 

(iv)                              during such time as a
Reference Rating Upgrade does not exist, the Total Acquisition Consideration
for all Permitted Acquisitions consummated after the Closing Date shall be
limited to $20,000,000 in the aggregate;

 

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

 

(vi)                              if a Reference Rating
Upgrade exists and UNOVA, Inc. divests the Industrial Automation System
Segment, the Total Acquisition Consideration for all Permitted Acquisitions
consummated after the Closing Date shall be limited to $75,000,000 in the
aggregate; provided, however, in the event that such Reference Rating
Upgrade ceases to exist,

 

21

 

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

 

(vii)                           in the event that such
Acquisition constitutes an acquisition of equity and/or assets with an
aggregate total consideration payable (including in the form of equity
securities) of greater than Twenty Five Million Dollars ($25,000,000), at least
thirty (30) Business Days prior to the completion of such transaction, the
Borrower Representative shall have delivered to the Administrative Agent (A) a
notice of the proposed Permitted Acquisition and (B) a certificate of a
Responsible Officer of the Borrower Representative demonstrating, in reasonable
detail, the computations necessary to show compliance with the financial
covenants contained in Section 5.4 hereof on a pro forma basis and the
other requirements set forth in the definition, such pro forma calculations
being determined as if (x) such Acquisition had been completed at the
beginning of the most recent Testing Period for which financial information for
the Borrowers and the business of the Person to be acquired is available and
has been delivered to the Administrative Agent at least 10 Business Days prior
to the completion of such transaction (which shall in the case of the acquired
business include audited financial statements for the most recent fiscal year,
unless the same are unavailable and unaudited financial statements are
acceptable to the Administrative Agent) and (y) any Indebtedness incurred
to finance such Acquisition, had been outstanding for such entire Testing
Period;

 

(viii)                        no Event of Default has
occurred which is continuing and has not been waived in accordance with
Section 13.1 of this Agreement and no Event of Default will occur by
reason of consummation of the Acquisition;

 

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

 

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

 

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

 

“Person” means a
natural person, partnership, corporation (including a business trust), joint
stock company, trust, unincorporated association, limited liability company,
joint venture, association or other entity, a government or any political
subdivision or

 

22

 

agency
thereof, or any other entity.

 

“Potential Default”
means an event, condition or thing which with the lapse of any applicable grace
period or with the giving of notice or both would constitute, an Event of
Default referred to in Section 6 of this Agreement and which has not been
appropriately waived in writing in accordance with this Agreement or fully
corrected, prior to becoming an actual Event of Default.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

“Responsible Officer”
means, with respect to the Borrower Representative or a Borrower, the
President, Chief Executive Officer, Chief Financial Officer or Treasurer
thereof.

 

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

 

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

 

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

 

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

 

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

 

“Secured Bond Asset”
means cash on deposit in the Secured Bond Asset Deposit Account or Securities
Entitlements of the Borrowers with respect to Financial Assets held by a
securities intermediary in the Secured Bond Asset Securities Account, in each
case, in which the Administrative Agent has a perfected security interest by
means of a Deposit Account Control Letter or a Securities Account Control
Letter.

 

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

 

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

 

“Secured Loan Asset”
means cash on deposit in the Secured Loan Asset Deposit Account or Securities
Entitlements of the Borrowers with respect to Financial Assets held by a
securities intermediary in the Secured Loan Asset Securities Account, in each
case, in which the Administrative Agent has a first priority, perfected
security interest for the

 

24

 

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

 

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

 

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

 

“Securities Account  Control
Letter” means a letter agreement, substantially in the form of Exhibit M
to the Credit Agreement (with such changes as may be reasonably agreed to by
the Administrative Agent) or such other form in form and substance reasonably
acceptable to the Administrative Agent, executed by a Borrower and the
Administrative Agent and acknowledged and agreed to by the relevant Approved
Securities Intermediary.

 

“S&P” means Standard and Poor’s
Rating Services, a division of McGraw Hill Companies, Inc., and any successor
thereto.

 

“Solvent” means,
with respect to any Person, as of any date of determination, that: (a) the
fair value of the property of the Person as of such date is greater than the
total amount of the liabilities (including contingent liabilities computed at
the amount that, in light of all the facts and circumstances existing as of
such date, represents the amount that can reasonably be expected to become an
actual or matured liability) of the Person, (b) the present fair salable
value of the assets of the Person as of such date is not less than the amount
that will be required to pay the probable liabilities of the Person on its
debts as they become absolute and matured, (c) the Person is able to pay
all liabilities of the Person as those liabilities mature, and (d) the
Person does not have unreasonably small capital for the business in which it is
engaged or for any business or transaction in which it is about to engage.  The determination of whether a Person is
Solvent shall take into account all such Person’s assets and liabilities
regardless of whether, or the amount at which, any such asset or liability is
included on a balance sheet of such Person prepared in accordance with GAAP,
including assets such as contingent contribution or subrogation rights,
business prospects, distribution channels and goodwill.  In computing the amount of contingent or
unrealized assets or contingent or unliquidated liabilities at any time, such
assets and liabilities will be computed at the amounts which, in light of all the
facts and circumstances existing at such time, represent the amount that
reasonably can be expected to become realized assets or matured liabilities, as
the case may be.  In computing the amount
that would be required to pay a Person’s probable liability on its existing
debts as they become absolute and matured, reasonable valuation techniques,
including a present value analysis, shall be applied using such rates over such
periods as are appropriate under the circumstances, and it is understood that, in
appropriate circumstances, the present value of contingent liabilities may be
zero.

 

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

 

“Subsidiary” means,
in respect of any Person that is not a natural Person, a corporation or other
business entity the shares constituting a majority of the outstanding capital
stock (or other form of ownership) or constituting a majority of the voting
power in any election of directors (or shares constituting both majorities) of
which are (or upon

 

25

 

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

 

“Subsidiary Guarantors” means
all direct and indirect Domestic Subsidiaries of UNOVA, Inc. other than the
Borrowers, the Excluded Subsidiaries and the Foreign Subsidiaries.

 

“Subsidiary Guaranty” means
each guaranty, in the form of Exhibit D-3 hereto, executed by a Subsidiary
Guarantor in favor of the Administrative Agent for the benefit of the Lenders
pursuant to Section 5.2(l) of this Agreement.

 

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

 

“Testing Period”
shall mean, (i) in respect of the Fiscal Quarter ending on
December 31, 2004, the period commencing on the Closing Date and
continuing through December 31, 2004, (ii) in respect of the Fiscal
Quarter ending on March 31, 2005, the period commencing on the Closing
Date and continuing through March 31, 2005, (iii) in respect of the
Fiscal Quarter ending on June 30, 2005, the period commencing on the
Closing Date and continuing through June 30, 2005, and (iv) in
respect of each Fiscal Quarter ending after June 30, 2005, the period
consisting of the four consecutive Fiscal Quarters then last ended (whether or
not such quarters are all within the same Fiscal Year).

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

“U.S. Lender” has
the meaning set forth in Section 12.3(b)(ii) of
this Agreement.

 

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

 

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

 

1.2          Accounting Terms; Calculations. All accounting and financial terms not specifically
defined herein shall be construed in accordance with GAAP as in effect from
time to time.  In all cases, such
accounting and financial terms shall be applied on a basis consistent with
those applied in the preparation of consolidated audited financial statements
of UNOVA, Inc. and its consolidated Subsidiaries for the Fiscal Year ending
December 31, 2003 (audited by Deloitte & Touche LLP); provided, however, if
any change in GAAP in itself affects the calculation of any financial covenant
set forth in this Agreement, the Borrower Representative may by written notice
to the Administrative Agent, or the Administrative Agent may, by written notice
to the Borrower Representative, require that such covenant thereafter be
calculated in accordance with GAAP as in effect (and applied by UNOVA, Inc.)
immediately before such change in GAAP occurs. 
If any such notice is given, compliance certificates delivered pursuant
to this Agreement after such change shall be accompanied by reconciliations of
the difference between the calculation set forth therein and a calculation made
in accordance with GAAP as in effect from time to time after such change
occurs.

 

27

 

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

 

1.4          Construction of Terms Generally. In this Agreement, for the purpose of
computing periods of time from a specified date to a later specified date, the
word “from” means “from and including” and the words “to” and “until” each mean
“to but excluding”.  Unless the context
otherwise requires, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument, or other document as from time to time amended, supplemented
or otherwise modified as permitted hereunder, (b) any reference herein to
any Person shall be construed to include such Person’s successors and assigns,
(c) the words “herein,” “hereof,” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
any particular provision hereof, (d) the word “including” means “including
without limitation” and (e) any reference to payment, repayment, or
prepayment shall be construed as referring to payment of immediately available
funds in Dollars.

 

1.5          USA Patriot Act Notification; Representations and Undertaking.

 

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

 

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

 

28

 

Section 2                                             TERMS OF THE CREDIT FACILITIES.

 

2.1       Revolving
Credit Facility.

 

(a)           Revolving Credit Loans. Subject to the terms and conditions set forth in this
Agreement, each of the Lenders severally agrees to make, from time to time on
and after the Closing Date until and including the Business Day immediately
preceding the Revolving Credit Termination Date, Revolving Credit Loans to the
Borrowers; provided, however, that the outstanding principal
amount of Revolving Credit Loans by such Lender plus the LC Exposure of such
Lender shall not at any time exceed the amount of the Revolving Credit
Commitment of such Lender in effect at such time; provided, further,
that: (A) during any period of time in which a Reference Rating Upgrade does
not exist, the aggregate outstanding principal amount of Revolving Credit Loans
plus LC Exposure of the Lenders shall not at any time during such period exceed
an amount equal to the sum of (i) Fifty Million Dollars ($50,000,000) plus
(ii) the amount of Secured Loan Assets in which Administrative Agent has a
first priority, perfected security interest for the benefit of the Lenders and
(B) during any period of time in which a Reference Rating Upgrade exists, the
aggregate outstanding principal amount of Revolving Credit Loans plus LC
Exposure of the Lenders shall not at any time during such period exceed the
greater of (1) Fifty Million Dollars ($50,000,000) and (2) the lesser of: (x)
an amount equal to the sum of the Asset Coverage at such time plus the amount
of Secured Loan Assets in which Administrative Agent has a first priority,
perfected security interest for the benefit of the Lenders or (y) the Revolving
Credit Commitments of the Lenders in effect at such time.  Within the limits set forth in this
Agreement, the Borrowers may borrow, prepay and reborrow Revolving Credit
Loans.  The Revolving Credit Loans shall
be comprised of one or more Revolving Credit Borrowings as the Borrowers may
elect from time to time, by delivery to the Administrative Agent by the
Borrower Representative of a Credit Request or a Rate Conversion/Continuation
Request in accordance with this Agreement. 
Each Revolving Credit Borrowing comprised of LIBOR Rate Loans shall be
in an aggregate amount of not less than One Million Dollars ($1,000,000) or an
integral multiple of One Million Dollars ($1,000,000) in excess thereof and
each Revolving Credit Borrowing comprised of Alternate Base Rate Loans shall be
in an aggregate amount of not less than One Hundred Thousand Dollars ($100,000)
or an integral multiple of Fifty Thousand Dollars ($50,000) in excess thereof.

 

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

 

2.2       Letter
of Credit Facility.

 

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

 

29

 

amount equal to the sum of (i)
Fifty Million Dollars ($50,000,000) plus (ii) the amount of Secured Loan
Assets in which Administrative Agent has a perfected security interest for the
benefit of the Lenders and (B) during any period of time a Reference Rating
Upgrade exists, the aggregate LC Exposure of the Lenders plus the aggregate
outstanding principal amount of Revolving Credit Loans of the Lenders shall not
at any time during such period exceed the greater of (1) Fifty Million Dollars
($50,000,000) and (2) the lesser of: (x) an amount equal to the sum of the
Asset Coverage at such time plus the amount of Secured Loan Assets in
which Administrative Agent has a first priority, perfected security interest for
the benefit of the Lenders or (y) the Revolving Credit Commitments of the
Lenders in effect at such time.

 

(b)           Form and Term of Letters of Credit. Each Letter of Credit shall be issued in
such form as the LC Issuer may reasonably require subject (i) in the case of
documentary letters of credit, to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any subsequent revisions thereof adhered to by
the LC Issuer, and (ii) in the case of standby letters of credit, to the
International Standby Practices (1998), International Chamber of Commerce
Publication No. 590, and any subsequent revisions thereof adhered to by the LC
Issuer.  Each Letter of Credit shall: (w)
permit drawings upon presentation of one or more sight drafts and such other
documents as specified by the Borrower Representative in the Letter of Credit
Request delivered pursuant to Section 2.3(b) below and agreed to by such
LC Issuer, which drawings shall occur on or prior to the applicable expiration
date of such Letter of Credit, (x) by its terms, provide for payment of
drawings only in Dollars, (y) in the case of a standby Letter of Credit,
by its terms expire no later than the earlier of: (I) the date eighteen (18) months
after the date of issuance of such Letter of Credit (or, in the case of renewal
or extension thereof, eighteen (18) months after such renewal or extension) and
(II) the date which is not later than the fifteenth (15th) Business Day prior
to the Revolving Credit Termination Date; provided, however, that
each standby Letter of Credit may, upon the request of the applicable Borrower,
include a provision whereby such Letter of Credit shall be renewed
automatically for additional consecutive periods of eighteen (18) months or
less (but not beyond the date that is fifteen (15) Business Days prior to the
Revolving Credit Termination Date) unless the LC Issuer notifies the
beneficiary at least 30 days prior to the then-applicable expiration date
that such Letter of Credit will not be renewed and (z) in the case of a
documentary Letter of Credit, by its terms expire at or prior to the close of
business on the earlier of (i) the date 12 months after the date of the
issuance of such commercial Letter of Credit and (ii) the date which is
not later than the fifteenth (15th) Business Day prior to the Revolving Credit
Termination Date.

 

(c)           Application with Respect to Letter of Credit. Concurrently with each Letter of Credit
Request, the Borrowers shall cause the applicable Letter of Credit Obligor to
execute and deliver to the LC Issuer in respect of such requested Letter of
Credit an application with respect to such Letter of Credit, in the LC Issuer’s
then standard form; provided, however, that in the event of any
conflict between the provisions of any such application agreement and this
Agreement, the provisions of this Agreement shall govern.

 

(d)           Participation by Lenders in Letters of Credit. By its issuance of a Letter of Credit and
without further action on its part, the LC Issuer hereby grants to each Lender,
and each Lender hereby acquires from the LC Issuer, an undivided participation
in such Letter of Credit equal to such Lender’s Pro Rata Share of such Letter
of Credit’s face amount, effective on the date of the issuance of such Letter
of Credit.  In consideration, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent
for the account of the LC Issuer such Lender’s Pro Rata Share of each
disbursement made by the LC Issuer in respect of such Letter of Credit and not
reimbursed by the applicable Letter of Credit Obligor or the Borrowers.  Each Lender acknowledges and agrees that its
obligation to acquire such participations pursuant to this Section is absolute
and unconditional and shall not be affected by any event or circumstance
whatsoever, including the occurrence of any Potential Default or

 

30

 

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

 

(e)           Reimbursement. The Borrowers agree that whenever there is a drawing on a
Letter of Credit issued by the LC Issuer hereunder, the resulting reimbursement
obligation shall be immediately due and payable and the Borrowers shall cause
the applicable Letter of Credit Obligor to pay on the date of such drawing, or
the Borrowers shall otherwise pay pursuant to Section 9.1 of this Agreement on
the date of such drawing, to the Administrative Agent for the account of the LC
Issuer an amount equal to the amount of such drawing.  The Administrative Agent shall promptly remit
any such payment to the LC Issuer.

 

(f)            Failure to Reimburse Drawings; Interest. In the event the Letter of Credit
Obligor for whose account any Letter of Credit was issued fails, and the
Borrowers fail on behalf of such Letter of Credit Obligor, to reimburse the LC
Issuer the amount of any drawing, together with any accrued interest thereon,
to the Administrative Agent on the date of such drawing on a Letter of Credit,
such failure shall constitute a Deemed Credit Request requesting an Alternate
Base Rate Loan to be made to the Borrowers in an aggregate amount equal to the
amount reimbursable to the LC Issuer plus any accrued interest thereon and the
related Credit Event, without regard to any minimums and multiples lending
amounts specified hereunder, but subject to satisfaction of the conditions precedent
set forth in Section 3.2 of this Agreement.  The Administrative Agent shall disburse all
such loan proceeds directly to the LC Issuer to satisfy the reimbursement
obligation.  For the avoidance of doubt,
after giving effect to the Deemed Credit Request and any Revolving Credit Loan
made pursuant to this Section 2.2(f) (including any Revolving Credit Loan
deemed pursuant to the immediately following paragraph), the Borrowers shall be
deemed to have reimbursed in full such drawing on such Letter of Credit.

 

In the event
that any of the conditions precedent set forth in Section 3.2 are not
satisfied, each Lender shall be obligated to consummate the purchase, on the
date the Revolving Credit Loan would have been made pursuant to this
Section 2.2(f), of its undivided participating interest in the outstanding
unpaid reimbursement obligation (the “Unpaid Reimbursement Obligation”) owing
to the LC Issuer.  On the purchase date,
each such Lender shall pay to the Administrative Agent, for the benefit of the
LC Issuer, in immediately available funds, at the account of the Administrative
Agent maintained at the Payment Office of the Administrative Agent not later
than the time such Lender would have been obligated to fund its Revolving
Credit Loan pursuant to this Section, a purchase price for such participating
interest in an amount equal to its Pro Rata Share of the Unpaid Reimbursement
Obligation.  After the date of such
purchase, the outstanding Unpaid Reimbursement Obligation shall bear interest
for the account of the LC Issuer for each day from and including the date of
such drawing until the earlier of: (i) the date of reimbursement by the
applicable Letter of Credit Obligor or by the Borrowers, as the case may be,
and (ii) the date on which such drawing is reimbursed by Revolving Credit Loans
as provided in the first paragraph Section 2.2(f), at the rate per annum that
would apply to the amount of such Unpaid Reimbursement Obligation if such
amount were a Revolving Credit Borrowing comprised of Alternate Base Rate
Loans.  After the date of such purchase,
any payment by the Borrower to the Administrative Agent on behalf of the LC
Issuer with respect to the Unpaid Reimbursement Obligation, together with
interest thereon, shall be promptly distributed by the Administrative Agent to
each Lender based on its Pro Rata Share. 
For the avoidance of doubt, any Unpaid Reimbursement Obligation shall be
deemed to be a Revolving Credit Loan hereunder for all purposes of this
Agreement and the other Loan Documents until such Unpaid Reimbursement
Obligation is repaid by the Borrowers in full, together with interest thereon
as herein specified.

 

31

 

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

 

(h)           Liability of LC Issuer. It is expressly understood and agreed that the
absolute and unconditional obligation of the Borrowers to cause each Letter of
Credit Obligor to reimburse the LC Issuer, and the absolute and unconditional
Obligation of the Borrowers hereunder to reimburse the LC Issuer should such
Letter of Credit Obligor fail to reimburse the LC Issuer, for disbursements
with respect to a Letter of Credit for the account of such Letter of Credit
Obligor shall not be construed to excuse the LC Issuer from liability to such
Letter of Credit Obligor to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by each of the Borrowers
to the extent permitted by applicable Law) suffered by the Letter of Credit
Obligor that are caused by the gross negligence, willful misconduct or bad
faith of such LC Issuer in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The parties agree that each LC Issuer may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with the
terms of such Letter of Credit.  Any
action, inaction or omission on the part of the LC Issuer or any of its
correspondents, under or in connection with any Letter of Credit issued by the
LC Issuer or any renewal or extension thereof or the related instruments or
documents, if taken in good faith and in conformity with applicable Laws and
regulations governing Letters of Credit generally and the terms of this
Section, shall be binding upon the Borrowers and shall not place the LC Issuer
or any of its correspondents under any liability to any of the Borrowers.

 

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

 

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

 

32

 

regulation applicable to money
center banks generally or any request or directive (whether having the force of
Law) from any governmental authority with jurisdiction over money center banks
shall prohibit, or request the LC Issuer to refrain from issuing Letters of
Credit generally or maintaining its commitment to issue Letters of Credit
hereunder or (ii) there shall have occurred, at any time during the term
of this Agreement: (A) any outbreak of hostilities or other national or
international crisis or change in economic conditions if the effect of such
outbreak, crisis or change would make the issuance of Letters of Credit
impracticable, (B) the enactment, publication, decree or other
promulgation of any Law which could reasonably be expected to materially and
adversely affect the ability of the Borrowers (taken as a whole) to perform
their obligations under this Agreement or any reimbursement agreement, or
(C) the taking of any action by any government or agency in respect of its
monetary or fiscal affairs which could have a material adverse effect on the
issuance of Letters of Credit, then the LC Issuer shall give written notice of
the occurrence of such event to the Borrower Representative and the
Administrative Agent whereupon the commitment of the LC Issuer to issue or
extend any Letter of Credit shall be suspended on the effective date of such
notice and shall continue to be suspended until such notice is rescinded by the
LC Issuer by prompt written notice to the Borrower Representative.

 

2.3       Credit
Requests.

 

(a)           Credit Requests for Revolving Credit Loans. Requests for Revolving Credit
Loans shall be given by the Borrower Representative to the Administrative Agent
not later than 1:00 p.m. (Eastern Time): 
(i) on the Business Day which is the requested date of a proposed
Revolving Credit Borrowing comprised of Alternate Base Rate Loans and (ii) on
the Business Day which is three (3) Business Days before the requested date of
a proposed Revolving Credit Borrowing comprised of LIBOR Rate Loans (any
Revolving Credit Loans on the Closing Date shall be Alternate Base Rate
Loans).  Each such request (a “Credit
Request”) shall be a written or telephonic notice (in the case of a telephonic
notice, promptly confirmed in writing). 
Each written Credit Request or written confirmation shall be
substantially in the form of Exhibit B-1 attached hereto, signed or
otherwise acceptably authenticated by the Borrower Representative and
transmitted by the Borrower Representative to the Administrative Agent by telecopier or electronic mail.  Each Credit Request shall be irrevocable and
binding on the Borrowers and be subject to the indemnification provisions of
this Agreement.

 

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

 

(c)           Requests for Revolving Credit Borrowing Deemed Given. The Borrowers shall be deemed
to have made a request for a Revolving Credit Borrowing (a “Deemed Credit
Request”), which Deemed Credit Request shall be irrevocable: (x) in the
event of an unreimbursed drawing under a Letter of Credit, for a Revolving
Credit Borrowing in an amount equal to the amount necessary to reimburse the LC
Issuer for such drawing as set forth in Section 2.2(f) and (y) upon
any interest, fee or other payment Obligation of the Borrowers hereunder
becoming due without payment within the applicable grace period set forth in

 

33

 

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

 

2.4          Funding
of Revolving Credit Loans.

 

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

 

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

 

(c)           Availability of Funds. Unless the Administrative Agent shall have received notice
from a Lender prior to the time of any Revolving Credit Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s Pro
Rata Share of the Revolving Credit Borrowing, the Administrative Agent may
assume that such Lender has made its Pro Rata Share of such Revolving Credit
Borrowing available to the Administrative Agent on the date specified for such
Revolving Credit Borrowing in accordance with Section 2.4(a) of this
Agreement.  In each case, and in reliance
upon such assumption, the Administrative Agent may, but shall not be obligated
to, make available to the Borrowers funds in the amount of such Lender’s Pro
Rata Share.  Any disbursement by the
Administrative Agent in reliance on such assumption shall be deemed to be a
Revolving Credit Loan by such Lender.

 

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

 

34

 

day from the date such amount
should otherwise have been made available to the Administrative Agent until the
date any such amount is paid to the Administrative Agent at a per annum rate of
interest equal to: (x) if paid by such Lender, as the case may be, the
Federal Funds Effective Rate or (y) if paid by the Borrowers, the interest
rate applicable to such Revolving Credit Borrowing.  Any payment by the Borrowers shall be without
prejudice to any claim the Borrowers may have against a Defaulting Lender.

 

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

 

(b)           Treatment of Lender Failing To Fund. The Administrative Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by the Borrowers for the
benefit of such Lender until such Lender has cured the applicable Lender
Default.  Until the earlier of such
Defaulting Lender’s cure of its Lender Default or the termination of the
Revolving Credit Commitments, all amounts repaid to the Administrative Agent by
the Borrowers which would otherwise be required to be applied to such Lender’s
Revolving Credit Loans shall be advanced to the Borrowers by the Administrative
Agent on behalf of such Defaulting Lender to cure, in full or in part, such
Lender Default, but shall nevertheless be deemed to have been paid to such
Defaulting Lender in satisfaction of the Obligations to which such payment
would otherwise have been applied. 
Except in the event the Revolving Credit Commitments are terminated
pursuant to the terms hereof, no Defaulting Lender shall have any voting or
consent rights under this Agreement and shall not constitute a “Lender” (or be
included in the calculation of “Required Lenders”) for any voting or consent
rights under this Agreement.  The terms
of this Section shall remain effective with respect to such Defaulting Lender
until such time as no Lender Default exists with respect to such Lender.

 

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

 

2.6          Affiliated Funding with respect to Lenders. All or any part of a Revolving Credit Loan that
any Lender may be obligated to fund pursuant to this Agreement: (i) may be
funded by such Lender on behalf of such Lender’s Lending Installation or
(ii) may be funded on such Lender’s behalf by such Lender by and through
any such Lending Installation; provided that, (a) if any Lending
Installation fails to fund all or any part of such Revolving Credit Loan, such
Lender shall be obligated to fund such Revolving Credit Loan pursuant to the
terms hereof, (b) in no event shall any such funding by any Lending
Installation increase the costs or expenses for which the Borrowers are liable
under this Agreement and (c) in no event shall any such funding on behalf
of or through any such Lending Installation require the Borrowers to pay any
amounts in respect of Non-Excluded Taxes or Other Taxes without such Lender
being subject to the exercise by the Borrowers of their rights under
Section 12.3 of this Agreement.  The
funding

 

35

 

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

 

2.7          Loan
Account; Credits; Application of Payments.

 

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

 

(b)           Loan Account Charges\Credits; Reports. Each Borrower hereby authorizes the Administrative Agent
to charge the Loan Account of the Borrowers with all Revolving Credit Loans and
all other Obligations of the Borrowers under this Agreement or any other Loan
Document.  The Loan Account of the Borrowers
will be credited in accordance with the provisions of this Agreement with all
payments received by the Administrative Agent directly from the Borrowers or
otherwise for the account of the Borrowers. 
The Administrative Agent shall send the Borrower Representative
statements in accordance with the Administrative Agent’s standard
procedures.  Any and all such periodic or
other statements or reconciliations of the Loan Account shall be final, binding
and conclusive upon the Borrowers in all respects, absent manifest error,
unless the Administrative Agent receives specific written objection (including
email) thereto from the Borrower Representative within forty-five (45) Business
Days after any such statement or reconciliation has been sent to the Borrower Representative.  Such notice shall only be deemed an objection
as to those items specifically objected to therein.

 

(c)           Crediting and
Application of Specific Payments. The
Borrowers shall make all other payments to be made by the Borrowers under this
Agreement with respect to the Obligations not later than 4:00 p.m. (Eastern
Time) on the day when due, without setoff, counterclaim, defense or deduction
of any kind, to the Administrative Agent’s account maintained at the Payment
Office of the Administrative Agent. 
Payments received after 4:00 p.m. (Eastern Time) shall be deemed to have
been received on the next succeeding Business Day.  Prior to the occurrence of an Event of
Default which is continuing, the Borrower Representative may specify to the
Administrative Agent, at the time of the Borrowers making any such payment
hereunder, the Obligations of the Borrowers to which such payment is to be
applied.  If the Borrower Representative
does not specify an application for such payment or if an Event of Default has
occurred and is continuing, the Administrative Agent
shall apply such payment to such Obligations as provided in Section 7.4(d)
of this Agreement.

 

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

 

36

 

Office.  Except as set forth in Sections 2.14 and
7.5 of this Agreement, each Revolving Credit Borrowing and participating
interest hereunder, each payment or prepayment of principal of any Revolving
Credit Borrowing, any reduction of commitments, each payment of interest on the
Revolving Credit Loans, and each payment of the fees provided for hereunder
shall be allocated among the Lenders ratably in accordance with each Lender’s
Pro Rata Share thereof.

 

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

 

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

 

2.8       Repayment
and Prepayments.

 

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

 

(b)        Mandatory
Prepayments.

 

(i)            Mandatory Prepayment of
Revolving Credit Loans.  If,
on any Business Day, whether a Reference Rating Upgrade then exists or does not
then exist, the aggregate principal amount of Revolving Credit Loans of the
Lenders then outstanding plus the aggregate LC Exposure of the Lenders then
existing exceeds the aggregate Revolving Credit Commitments of the Lenders then
in effect, the Borrowers shall on such day prepay to the Administrative Agent
an amount sufficient to eliminate such excess which amount shall be used to
prepay the Lenders ratably in accordance with each Lender’s Pro Rata Share and
shall be in addition to any other prepayments required pursuant to this Section
2.8(b).

 

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

 

37

 

such
day prepay to the Administrative Agent an amount sufficient to eliminate such
excess which amount shall be used to prepay the Lenders ratably in accordance
with each Lender’s Pro Rata Share.

 

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

 

(iv)          Mandatory Application of Net
Proceeds.  The Borrowers shall
apply all Net Proceeds received by the Borrowers to prepay the Revolving Credit
Loans as follows:

 

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

 

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

 

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

 

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

 

38

 

more
than Fifty Million Dollars ($50,000,000). 
The Administrative Agent will use reasonable efforts to avoid an
application of Net Proceeds which causes early prepayment of a LIBOR Rate
Borrowing prior to expiration of its applicable Interest Period.

 

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

 

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

 

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

 

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

 

(b)           LIBOR Rate Loans. During such periods as any LIBOR Rate Loans are
outstanding, the Borrowers shall pay interest on such LIBOR Rate Loans at a
rate per annum equal to the sum of the London Interbank Offered Rate plus the
Applicable Margin then in effect and applicable to Revolving Credit Borrowings
comprised of such LIBOR Rate Loans, payable:

 

39

 

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

 

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

 

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

 

2.12        Rate Conversion and Rate Continuation. The Borrowers shall have the right to
convert all or any portion of the Alternate Base Rate Loans or LIBOR Rate Loans
comprising a Revolving Credit Borrowing into LIBOR Rate Loans or Alternate Base
Rate Loans, as the case may be, or continue all or any portion of the LIBOR
Rate Loans comprising a Revolving Credit Borrowing as, LIBOR Rate Loans or
Alternate Base Rate Loans, as the case may be, upon request delivered by the
Borrower Representative to the Administrative Agent not later than 4:00 p.m.
(Eastern Time) as follows: (a) on the Business Day that the Borrower
Representative desires to convert all or a portion of outstanding LIBOR Rate
Loans into Alternate Base Rate Loans, (b) three (3) Business Days prior to
the Business Day on which the Borrower Representative desires to convert all or
a portion of outstanding Alternate Base Rate Loans into LIBOR Rate Loans for a
given permissible Interest Period, or (c) three (3) Business Days prior to
the Business Day on which the Borrower Representative desires to continue all
or a portion of outstanding LIBOR Rate Loans as LIBOR Rate Loans for an
additional Interest Period of the same duration or as a LIBOR Rate Borrowing
having a different permissible Interest Period; provided, however,
that each such Rate Conversion or Rate Continuation shall be subject to the
following:

 

(a)           if less than all of the outstanding
principal amount of a Revolving Credit Loan is converted or continued, the
aggregate principal amount of such Revolving Credit Loans converted or continued
shall be not less than One Million Dollars ($1,000,000), or an integral
multiple of One Million Dollars ($1,000,000) in excess thereof;

 

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

 

(c)           After the occurrence of an Event of
Default which is continuing, Revolving Credit Loans may not be converted into
or continued (at the expiration of the Interest Period applicable thereto) as
LIBOR Rate Loans;

 

40

 

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

 

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

 

Each request for conversion or
continuation (a “Rate Conversion/Continuation Request”) shall be a written or telephonic
notice (in the case of a telephonic notice, promptly confirmed in
writing).  Each written Rate
Conversion/Continuation Request or written confirmation thereof shall be
substantially in the form of Exhibit C attached hereto, signed or
otherwise acceptably authenticated by the Borrower Representative and
transmitted to the Administrative Agent by telecopier
or electronic mail.

 

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

 

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

 

(a)           Facility Fee. The Borrowers agree to pay to the Administrative Agent for
the ratable benefit of the Lenders, allocable to the Lenders in accordance with
each Lender’s Pro Rata Share thereof, a facility fee  (the “Facility Fee”) on the Revolving Credit
Commitment of such Lender from the Closing Date until the Revolving Credit
Termination Date at a rate per annum equal to the Applicable Margin specified
for such Facility Fee, payable quarterly in arrears on the last day of each
calendar quarter, commencing December 31, 2004, and on the Revolving Credit
Termination Date.

 

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

 

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

 

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

 

41

 

(iii)         Other Fees Relating to
Letters of Credit.  The
Borrowers agree to pay to the LC Issuer, with respect to the issuance,
amendment, or transfer of each Letter of Credit and each drawing made
thereunder, administrative, documentary, processing and other normal charges in
accordance with the LC Issuer’s standard schedule for such charges in effect at
the time of issuance, amendment, transfer or drawing, as the case may be.

 

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

 

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

 

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

 

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

 

(ii)           at any time, that such Lender shall
incur increased costs or reductions in the amounts received or receivable
hereunder in an amount which such Lender deems material with respect to any
LIBOR Rate Loan  to the Borrowers because
of any change since the Closing Date in any applicable Law, governmental rule, regulation,
guideline, order or request (whether or not having the force of Law), or in the
interpretation or administration thereof and including the introduction of any
new Law or governmental rule, regulation, guideline, order or request (such as,
for example, but not limited to, a change in official reserve requirements,
but, in all events, excluding reserves includable in the “London Interbank
Offered Rate” pursuant to the definition thereof), or

 

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

 

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

 

42

 

Borrower Representative and the
applicable Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Credit Request or Rate
Conversion/Continuation Request given by the Borrower Representative with
respect to LIBOR Rate Loans which have not yet been incurred or converted shall
be deemed rescinded by the Borrower Representative or, in the case of a Credit
Request, shall, at the option of the Borrower Representative, be deemed
converted into a Credit Request for Alternate Base Rate Loans, (B) in the
case of clause (ii) above, the Borrowers shall pay to such Lender, upon
written demand to the Borrower Representative, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender shall determine) as shall be required to compensate
such Lender, for such increased costs or reductions in amounts receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing the basis for the calculation thereof and that such Lender is generally
charging all of its customers for comparable amounts, submitted to the Borrower
Representative by such Lender shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (C)  in the case of
clause (iii) above, the Borrower Representative on behalf of the Borrowers
shall take one of the actions specified in the next paragraph of this Section.

 

At any time
that any LIBOR Rate Loan is affected by the circumstances described in Section
2.14(e)(ii) above, the Borrowers may, and, in the event any LIBOR Rate Loan is
affected by the circumstances described in Section 2.14(e)(iii) above, the
Borrowers shall, either (i) if the affected LIBOR Rate Loan is then being made
pursuant to a Credit Request for a LIBOR Rate Borrowing, by causing the
Borrower Representative to give the Administrative Agent telephonic (confirmed
promptly in writing if requested) notice thereof on the same date that the
Borrower Representative was notified by a Lender pursuant to Section
2.14(e)(ii) or (iii) above, cancel said LIBOR Rate Borrowing or convert such
Credit Request to a request for a Revolving Credit Borrowing of Alternate Base
Rate Loans, or (ii) if the affected LIBOR Rate Loan is then outstanding,
upon at least one Business Day’s notice from the Borrower Representative to the
Administrative Agent, require the affected Lender to convert each such LIBOR
Rate Loan into an Alternate Base Rate Loan with such conversion to be effective
on the last day of the Interest Period currently applicable to such LIBOR Rate
Loan, if affected Lender may lawfully continue to maintain such LIBOR Rate Loan
until such last day, or immediately, if affected Lender is not legally
permitted to maintain such Revolving Credit Loan until such last day, and
subject to payment to such affected Lender of any amount required under
Section 12.4 provided that if more than one Lender is affected at
any time, then all affected Lenders must be treated the same pursuant to this
Section.

 

Section 3                                             CONDITIONS PRECEDENT.

 

3.1          Satisfaction of Conditions Precedent on Closing Date. The effectiveness of this
Agreement, the obligation of each Lender to make a Revolving Credit Loan hereunder
as of the date of the first Credit Event, if any, and the obligation of the LC
Issuer to issue any Letters of Credit hereunder as of the date of the first
Credit Event, are subject to the following conditions precedent having been
satisfied on or prior to the Closing Date unless waived in writing by the
Administrative Agent:

 

(a)           Agreement and Other Loan Documents. The Administrative Agent  shall have received fully executed
counterparts of this Agreement and the other Loan Documents, together with such
additional documents, instruments and certificates as the Administrative Agent
shall require in connection therewith, all in form and substance satisfactory
to the Administrative Agent and each Lender, including without limitation the
following:

 

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

 

43

 

(B)           a Security Agreement executed
respectively by all of the Borrowers and by all of the Subsidiary Guarantors in
favor of the Administrative Agent for the benefit of the Lenders;

 

(C)           a Subsidiary Guaranty executed
respectively by each Subsidiary Guarantor in favor of the Administrative Agent
for the benefit of the Lenders;

 

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

 

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

 

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

 

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

 

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

 

(I)            a Collateral Assignment of Security
Interest in Trademarks and Licenses, specified in the “Material Patent and
Trademark Listing” disclosed pursuant to Section 4.16 hereof, executed
respectively by each Borrower and each Subsidiary Guarantor, in the form of
Exhibit E-2;

 

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

 

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

 

(L)           an
Advertising Permission Letter executed by all of the Borrowers, in the form of
Exhibit I.

 

(b)           Officer’s Certificate, Resolutions, Organizational
Documents. Each of the Borrowers and each of the
Subsidiary Guarantors shall have delivered to the Administrative

 

44

 

Agent an officer’s certificate
executed by a Responsible Officer of such Borrower or Subsidiary Guarantor
certifying:  (i) the names of the
officers of such Borrower or such Subsidiary Guarantor authorized to sign the
Loan Documents to which each is a party, together with the true signatures of
such officers, (ii) the resolutions of the board of directors of each Borrower
and each Subsidiary Guarantor evidencing approval of the execution and delivery
of the Loan Documents to which such Borrower or such Subsidiary Guarantor, as
the case may be, is a party, and (iii) the Charter Documents of each such
Borrower and each such Subsidiary Guarantor.

 

(c)           Good Standing and Full Force and Effect Certificates. Each of the Borrowers
and each of the Subsidiary Guarantors shall have delivered to the
Administrative Agent: (i) a good standing certificate (long form) or full force
and effect certificate, as the case may be, for such Borrower and such
Subsidiary Guarantor, issued on or about the Closing Date by the Secretary of
State in the state where such Borrower or such Subsidiary Guarantor is
incorporated or organized and in each state in which such Borrower or such
Subsidiary Guarantor is required to qualify to do business as a foreign
corporation and in which the failure to so qualify would have a Material
Adverse Effect and (ii) certified Articles or Certificates of Formation  or Incorporation, as applicable, issued on or
about the Closing Date by the Secretary of State in the state where such Borrower
or such Subsidiary Guarantor is incorporated or organized.

 

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

 

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

 

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

 

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

 

45

 

releases and terminations, or
agreements reasonably satisfactory the Administrative Agent providing for
delivery of such releases and terminations, as may be necessary in connection
with the termination of the Existing Credit Facility and the security documents
delivered in connection therewith, including, without limitation, Intellectual
Property lien releases, real property mortgage releases and any releases and
other documentation as may be necessary to evidence the release of the security
interest of Bank of America, N.A. over any shares of Foreign Subsidiaries
pledged under the Security Agreements (or analogous foreign law pledge
documents) executed by the Borrowers and the Subsidiary Guarantors.

 

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

 

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

 

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

 

(k)           Material Contracts. The Administrative Agent shall have received copies of, or
online access to copies of, all Material Business Agreements and Material
License Agreements of the Borrowers and such agreements shall be reasonably
satisfactory in all material respects to the Administrative Agent and its
counsel.

 

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

 

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

 

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

 

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

 

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

 

46

 

processors
and consignees of the Borrowers and Subsidiary Guarantors as required pursuant
to the terms of the Security Agreement delivered by the Borrowers and
Subsidiary Guarantors.

 

(q)           Bright & Lorig Documents. The Administrative Agent shall have received
certain letter agreements duly executed by Bright & Lorig, a Professional
Corporation (“Bright & Lorig”), whereby Bright & Lorig will consent to
UNOVA, Inc.’s grant of a security interest to the Administrative Agent in
certain Patents (and related rights) over which Bright & Lorig currently
has a Lien, along with evidence that all conditions precedent for the
effectiveness thereof have been fulfilled. 
Such letter agreements will have substantially similar terms to the
letters, dated as of July 10, 2001, which were executed in connection with the
Existing Credit Facility.

 

(r)           Miscellaneous.
Borrowers shall have provided to the Administrative Agent such other items
and shall have satisfied such other conditions as may be reasonably required by
the Administrative Agent.

 

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

 

(a)           Representation Bringdown. As of the date of any Credit Event, and before and after
giving effect thereto, the representations and warranties contained in this
Agreement and all other Loan Documents are true and correct in all material
respects on and as of the date of such Credit Event with the same effect as
though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date;

 

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

 

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

 

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

 

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

 

Section 4                                             REPRESENTATIONS AND WARRANTIES.

 

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

 

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

 

47

 

validly
existing and in good standing under the laws of its respective jurisdictions of
organization.  As of the Closing Date, no
Borrower has any Subsidiaries other than those set forth on the Disclosure
Schedule.  Each Borrower and each
Subsidiary (other than Excluded Subsidiaries and Excluded Foreign Subsidiaries)
thereof is duly qualified or licensed to transact business in its respective
jurisdiction of organization and in each additional jurisdiction where such
qualification or licensure is necessary, except where failure to be so
qualified will not have a Material Adverse Effect.  Each Borrower represents that the Disclosure
Schedule sets forth (as may be updated from time to time in accordance with and
as permitted by this Agreement) the jurisdiction of organization of such
Borrower and its Subsidiaries (other than Excluded Subsidiaries and Excluded
Foreign Subsidiaries), the organizational identification numbers of such
Borrower and such Subsidiary (other than Foreign Subsidiaries) as assigned by
such Borrower or such Subsidiary’s jurisdiction of organization, the principal
place of business of such Borrower and such Subsidiary and the office where the
chief executive offices and accounting offices of such Borrower and such
Subsidiary are located.

 

4.2          Authorization.
The execution, delivery and performance of this Agreement and the other
Loan Documents to which any Borrower or Subsidiary Guarantor is a party:
(a) are within such Borrower’s organizational powers, (b) have been
duly authorized, (c) are not in contravention of Law or the terms of such
Borrower’s Charter Documents and (d) except as set forth on the Disclosure
Schedule, do not contravene (x) any indenture or other document or instrument
evidencing Indebtedness for Borrowed Money or (y) any other material agreement
or undertaking to which such Borrower or Subsidiary Guarantor is a party or by
which it or its property is bound.

 

4.3          Enforceability. This Agreement and the other Loan Documents executed by a
Borrower or any Subsidiary thereof constitute the legal, valid and binding
obligations of such Borrower and such Subsidiary, enforceable against such
Borrower and such Subsidiary in accordance with the terms thereof, subject to
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
Laws affecting the enforcement of creditors’ rights generally and by general
equitable principles including principles of commercial reasonableness, good
faith and fair dealing (whether enforcement is sought by proceedings in equity
or at law).

 

4.4          Maintenance of
Insurance. Each Borrower will maintain, and shall cause each
Subsidiary thereof to maintain, with their respective insurance providers as of
the Closing Date or with other financially sound and reputable companies
reasonably satisfactory to the Administrative Agent, insurance policies:
(a) insuring all real and personal property of such Borrower and such
Subsidiary against loss by fire, explosion, theft and such other casualties as
are usually insured against by companies engaged in the same or similar
businesses, (b) insuring such Borrower and such Subsidiary against
liability for personal injury and property damage relating to such real and
personal property, and business interruption, such policies to be in such form
and in such amounts and coverage as may be reasonably satisfactory to the
Administrative Agent (but in any event be upon such terms as are usual and customary
for companies engaged in the same or similar businesses as such Borrower or
such Subsidiary), (c) to the extent not covered by clauses (a) and (b) above,
maintaining insurance on its property with financially sound and reputable
insurance companies against loss and damage in at least the amounts (and with
only those deductibles) customarily maintained, and against such risks as are
typically insured against in the same general area, by Persons of comparable
size and engaged in the same or similar business as such Borrower or such
Subsidiary, (d) naming the Administrative Agent as additional insured
(with respect to general liability insurance) and, other than with respect to
Excluded Subsidiaries and Foreign Subsidiaries, as loss payee (with respect to
property/casualty and business interruption insurance), in each case, as
applicable, with respect to such insurance and (e) providing that no
cancellation, reduction in amount, material change in coverage or expiration
shall be effective until at least thirty (30) days after written notice to the
Administrative Agent.

 

48

 

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

 

4.6          Lien Perfection and
Priority. From and after the Closing Date, by reason of the filing
of financing statements, continuation statements, assignments of financing
statements and termination statements in all requisite governmental offices,
this Agreement and the other Loan Documents will create a valid and perfected
first priority security interest (except as permitted by this Agreement or the
other Loan Documents) in and Lien on that portion of the Collateral which can
be perfected by such filing and by the execution and delivery of this Agreement
and the other Loan Documents.  Such
security interest will be enforceable against the Borrowers, the Subsidiary
Guarantors and all third parties as security for payment of the
Obligations.  From and after the Closing
Date, by reason of the delivery to the Administrative Agent of all Collateral
consisting of Instruments and Certificated Securities, in each case properly
endorsed for transfer to the Administrative Agent or in blank and assuming the
Administrative Agent had no notice of an adverse claim, this Agreement and the
other Loan Documents will create a valid and perfected first priority security
interest (except as permitted by this Agreement or the other Loan Documents) in
and Lien on that portion of the Collateral which can be perfected by such
possession and endorsement and by the execution and delivery of this Agreement
and the other Loan Documents, which security interest will be enforceable
against the Borrowers, the Subsidiary Guarantors and all third parties as
security for payment of all Obligations.

 

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

 

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

 

4.9          Consents; Approvals.
Except as set forth on the Disclosure Schedule, no action, consent or approval
of, registration or filing with or any other action by any governmental
authority or other Person is or will be required in connection with the
transactions contemplated by this Agreement and the other Loan Documents, except
such as have been made or obtained

 

49

 

and
are in full force and effect and except for the filings required to create or
perfect the Liens in favor of the Administrative Agent that are contemplated
hereby and by the other Loan Documents.

 

4.10        Lawful Operations. The operations of each Borrower and each
Subsidiary thereof are in compliance in all material respects with applicable
requirements imposed by Law (excluding Environmental Laws the compliance with which
is addressed in Section 4.11 below), including without limitation,
occupational safety and health Laws and zoning ordinances, except to the extent
any such noncompliance, when taken singly or with all other such noncompliance,
has not resulted, and could not reasonably be expected to result, in a Material
Adverse Effect.

 

4.11        Environmental Compliance. Except as disclosed on the
Disclosure Schedule, (a) each Borrower and each Subsidiary thereof are in
compliance with Environmental Laws except for any noncompliance which, when
taken singly or with all other such noncompliance, has not resulted, and could
not reasonably be expected to result, in a Material Adverse Effect; (b) with
respect to any real property owned or leased by a Borrower or a Subsidiary
thereof, there is no pending or, to the knowledge of such Borrower, threatened
Environmental Claim against such Borrower or such Subsidiary, or any other
environmental condition with respect to any real property owned or leased by a
Borrower or a Subsidiary thereof which Environmental Claim or condition, when
taken singly or with all other such Environmental Claims or conditions, has
resulted, and could reasonably be expected to result, in a Material Adverse
Effect; (c) each Borrower and each Subsidiary are in compliance with all
Environmental Permits, except to the extent any such noncompliance, when taken
singly or together with all other instances of such noncompliance, has not
resulted, and could not reasonably be expected to result, in a Material Adverse
Effect; and (d) no real property owned or leased by a Borrower or a Subsidiary
thereof is listed or formally proposed for listing on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any similar federal or state list
of sites requiring investigation or clean-up and to the knowledge of such
Borrower, such Borrower has not, nor has any Subsidiary, directly transported
or directly arranged for the transportation of any Hazardous Material to any
such listed location or location which is proposed for such listing, which
could reasonably be expected to result in a Material Adverse Effect.

 

4.12        Environmental Claims and
Restrictions. Without limiting the representations made in
Section 4.11 above, to the best knowledge of the Borrowers, there are no
circumstances with respect to the real property or operations of any Borrower
or any Subsidiary thereof that could reasonably be expected to: (i) form
the basis of an Environmental Claim against any Borrower or any Subsidiaries
thereof which could constitute a violation of Section 5.2(e) hereof, or
(ii) cause any property owned, leased or funded by any Borrower or any
Subsidiary thereof to be subject to any material restrictions on ownership,
occupancy, use or transferability under any applicable Environmental Law which
when taken singly or with all other such Environmental Claims or conditions,
has not resulted, and could not reasonably be expected to result, in a Material
Adverse Effect.

 

4.13        ERISA. The
Disclosure Schedule sets forth a list, as of the Closing Date, of all the
Employee Benefit Plans subject to Section 302(a) of ERISA or Multiemployer
Plans subject to Title IV of ERISA of each Borrower, each Subsidiary thereof
and each ERISA Affiliate thereof and all Employee Benefit Plans which are material
self-funded medical, retiree medical or retiree life plans of such Borrower and
each Subsidiary thereof.  After the
Closing Date, the Borrowers shall revise the Disclosure Schedule on a timely
basis to reflect changes in such list of Employee Benefit Plans which are
either plans subject to Section 302(a) of ERISA or Multiemployer Plans subject
to Title IV of ERISA.  Each Employee
Benefit Plan (other than each Multiemployer Plan) of each Borrower and each
Subsidiary thereof which is intended to qualify under Section 401 of the
Code does so qualify, and any trust created thereunder is exempt from tax under
the provision of Section 501 of the Code, except where such failures in

 

50

 

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

 

4.14     Agreements; Adverse
Obligations; Labor Disputes.

 

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

 

4.15     Financial Statements;
Projections.

 

(a)           Financial Statements. The audited financial statements of UNOVA, Inc. and its
consolidated Subsidiaries for the fiscal year ended December 31, 2003, and the
unaudited interim financial statements of UNOVA, Inc. and its consolidated
Subsidiaries for the fiscal quarter ended June 30, 2004, each as filed with the
SEC in connection with the Form 10-Q and Form 10-K filings by UNOVA, Inc. and
each as furnished to Administrative Agent, have been prepared in accordance
with GAAP, and fairly present in all material respects the financial condition
of UNOVA, Inc. and its consolidated Subsidiaries as of the date of such
financial statements and the results of their operations for the period then
ending.  The Borrowers have not
experienced, nor has any Subsidiary thereof experienced, an event or
circumstance that would have a Material Adverse Effect since the December 31,
2003 financial statements, nor has there been any material change in UNOVA,
Inc.’s accounting procedures used therein.  UNOVA, Inc. and its consolidated Subsidiaries
did not as of December 31, 2003, and will not as of the Closing Date, after
giving effect to the Revolving Credit Loans made on the Closing Date, have any
material contingent liabilities, material liabilities for taxes, unusual and
material forward or long-

 

51

 

term
commitments or material unrealized or anticipated losses from any unfavorable
commitments, except those reflected in such financial statements or the notes
thereto in accordance with GAAP or, to the extent not required to be reflected
by GAAP, are disclosed in the Disclosure Schedule.

 

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

 

4.16        Intellectual Property. Each Borrower and each Subsidiary thereof owns or
has the legal and valid right to use, sell, and license all Intellectual Property
reasonably necessary for or material to the operation of its business as
presently conducted, free from any Lien not permitted under Section 5.3(d)
hereof and free of any restrictions which could reasonably be expected to have
a Material Adverse Effect on the operation of its business as presently
conducted.  The Disclosure Schedule sets
forth as of the Closing Date: (i) a general list (the “Patent and Trademark
General Listing”) of all or substantially all of the Intellectual Property of
the Borrowers and their Subsidiaries which consists of patents, applications
therefor, registered trademarks, registered service marks, registrations and
applications therefor, copyrights, and registrations therefor, as determined by
the Borrowers in good faith after a due inquiry, (ii) a separate list (the “Material
Patent and Trademark Listing”) of all Intellectual Property of each such
Borrower and each such Subsidiary, as the case may be, which consists of
patents, applications therefor, registered trademarks, registered service
marks, registrations and applications therefor, copyrights, and registrations
therefor, having a material value or otherwise material to or necessary for
such Borrower’s or such Subsidiary’s business operations, as determined by the
Borrowers in good faith after a due inquiry, (iii) a general list (the “License
General Listing”) of all or substantially all of the Intellectual Property of
the Borrowers and their Subsidiaries which consists of licenses by such
Borrowers and such Subsidiaries, as licensors, as determined by the Borrowers
in good faith after a due inquiry (which may not include all miscellaneous
immaterial licenses having de minimis economic value) and (iv) a separate list
(the “Material License Listing”) of all Intellectual Property of each such
Borrower and each such Subsidiary, as the case may be, which consists of
licenses by such Borrower and such Subsidiary, as licensors, having a material
value or otherwise material to or necessary for such Borrower’s or such
Subsidiary’s business operations, as determined by the Borrowers in good faith
after a due inquiry.  Other than as
disclosed on the Disclosure Schedule, no Borrower nor any of its Subsidiaries
is a party to any Material License Agreement with respect to Third Party Intellectual
Property.

 

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

 

52

 

consolidated
Subsidiaries have and will continue to have a Fiscal Year which ends on the
Sunday closest to December 31 or on December 31.

 

4.18        Value; Solvency. Each of the Borrowers and Subsidiary Guarantors have received fair consideration and reasonably equivalent
value for the Obligations and liabilities incurred to the Lenders
hereunder.  UNOVA, Inc. is Solvent as of
the Closing Date and after giving effect to the transactions contemplated
hereby.  The Borrowers, taken as a whole,
are Solvent as of the Closing Date and after giving effect to the transactions
contemplated hereby, the Borrowers, taken as a whole, are Solvent.

 

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

 

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

 

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

 

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

 

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

 

(c)           a
Person with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;

 

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

 

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

 

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

 

No Borrower or any Affiliate
thereof (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to the Executive
Order No. 13224.

 

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

 

53

 

contained
therein not materially misleading in light of the circumstances and purposes
for which such information was provided.

 

4.23        Acquisition Documents.
Any Acquisition Documents delivered by the Borrower Representative
constitute the legal, valid and binding obligations of each party thereto,
enforceable against such party in accordance with the terms thereof, subject to
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
Laws affecting the enforcement of creditors’ rights generally and by general
equitable principles including principles of commercial reasonableness, good
faith and fair dealing (whether enforcement is sought by proceedings in equity
or at law).

 

Section 5                                             COVENANTS OF THE BORROWERS.

 

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

 

5.1       Reporting and Notice Covenants.

 

(a)           Quarterly Financial Statements.
The Borrower Representative shall furnish to the Administrative Agent and
each Lender, as soon as practicable and in any event within fifty (50) days
after the end of each Fiscal Quarter of UNOVA, Inc. and its Subsidiaries
unaudited consolidated balance sheets of UNOVA, Inc and its consolidated
Subsidiaries as of the end of that Fiscal Quarter and the related statements of
income and cash flow for such Fiscal Quarter each prepared on an unaudited,
comparative basis with the comparable period during the prior year and in
accordance with GAAP, all in reasonable detail and certified, subject to normal
year-end audit adjustments, by a Responsible Officer or the non-officer
controller of the Borrower Representative provided that with respect to
any Fiscal Quarter for which financial statements are required to be delivered
pursuant to this subpart, delivery of UNOVA Inc.’s Form l0-Q as filed with the
SEC for any such Fiscal Quarter shall satisfy the requirement to deliver a
quarterly financial statement for such Fiscal Quarter.

 

(b)           Annual Financial Statements.The
Borrower Representative shall furnish to the Administrative Agent and each
Lender, as soon as practicable and in any event within one hundred (100) days
after the end of each Fiscal Year of UNOVA, Inc. and its consolidated
Subsidiaries, a complete copy of the annual audit report of UNOVA, Inc. and its
consolidated Subsidiaries (including, without limitation, all consolidated
financial statements thereof and the notes thereto) for that Fiscal Year, (i)
prepared on a comparative basis and consistent with prior Fiscal Years,
(ii)  audited and certified, by Deloitte & Touche LLP or other
independent public accountants of recognized national standing selected by the
Borrower Representative and reasonably acceptable to the Required Lenders, and
accompanied by (iii) an opinion of such accountants, which opinion shall be
unqualified and shall (A) state that such accountants audited such
consolidated financial statements in accordance with generally accepted
auditing standards, that such accountants believe that such audit provides a
reasonable basis for their opinion, and that in their opinion such consolidated
financial statements present fairly, in all material respects, the consolidated
financial position of UNOVA, Inc. and its consolidated Subsidiaries as at the
end of such Fiscal Year and the consolidated results of their operations and
cash flows for such Fiscal Year in conformity with GAAP, and (B) contain
such statements as are customarily included in unqualified reports of
independent accountants in conformity with the recommendations and requirements
of the American Institute of Certified Public Accountants (or any successor
organization) provided that with respect to any Fiscal Year for which
financial statements are required to be delivered pursuant to this subpart,
delivery of UNOVA, Inc.’s Form

 

54

 

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

 

(c)           Officer’s Certificate.
The Borrower Representative shall furnish to the Administrative Agent and
each Lender, concurrently with the financial statements delivered in connection
with Sections 5.1(a) and 5.1(b), a certificate of a Responsible Officer of the
Borrower Representative, in his or her capacity as a Responsible Officer or the
non-officer controller of the Borrower Representative, setting forth the
computations necessary to determine whether the Borrowers and their
consolidated Subsidiaries are in compliance with the financial covenants set
forth in Section 5.4 of this Agreement and certifying that: (A) those
financial statements fairly present in all material respects the financial
condition and results of operations of UNOVA, Inc. and its consolidated
Subsidiaries subject in the case of interim financial statements, to routine
year-end audit adjustments, (B) no Potential Default or Event of Default
then exists or, if any Potential Default or Event of Default does exist, a
brief description of the Potential Default or Event of Default and the
Borrowers’ intentions in respect thereof and (C) the amount of Net Proceeds
generated during the Fiscal Quarter applicable to such certification and the
details of the transactions generating such Net Proceeds.

 

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

 

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

 

(f)            Asset Coverage Certificates.
During the existence of a Reference Rating Upgrade: (x) if at any time the
aggregate outstanding Revolving Credit Loans taken together with the LC Exposure
of the Lenders would exceeds $50,000,000 taken together with the then existing
amount of Secured Loan Assets, the Borrower Representative shall have provided
to the Administrative Agent prior to such time an Asset Coverage Certificate
for the then most recent Fiscal Quarter of the Borrowers ending immediately
prior to such time (any failure to deliver such Asset Coverage Certificate
shall not constitute a violation of this covenant to the extent the Borrowers
have otherwise complied with the applicable mandatory prepayment provisions of
Section 2.8(b) of this Agreement), and (y) during such time as the aggregate
outstanding Revolving Credit Loans plus the LC Exposure of the Lenders exceeds
$50,000,000 taken together with the then existing amount of Secured Loan
Assets, the Borrower Representative shall provide to the Administrative Agent
on the fiftieth day after the end of each Fiscal Quarter of the Borrowers (or
the next Business Day if the 50th is not a Business Day) ending during such
period of time (any failure to deliver any required Asset Coverage Certificate
shall not constitute a violation of this covenant to the extent the Borrowers
otherwise have complied with the applicable mandatory prepayment provisions of
Section 2.8(b) of this Agreement).

 

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

 

(h)           Notices. The
Borrowers will cause a Responsible Officer of the Borrower Representative
to give the Administrative Agent and each Lender prompt written notice

 

55

 

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

 

(i)            Notice of Default
under ERISA. If a Borrower or any Subsidiary thereof becomes
aware of or shall receive notice from any ERISA Regulator or otherwise has
actual knowledge that a Default under ERISA exists with respect to any Employee
Benefit Plan, the Borrower Representative shall notify the Administrative Agent
and each Lender of the occurrence of such Default under ERISA, within ten (10)
Business Days after receiving such notice or obtaining such knowledge (the
disclosures contained in the Disclosure Schedule being such notice of each
Default under ERISA disclosed therein to the extent of the disclosure therein).

 

(j)            Environmental Reporting.
The Borrower Representative shall promptly deliver to the Administrative
Agent and each Lender, and in any event within fifteen (15) Business Days after
receipt or transmittal by any Borrower or any Subsidiary thereof, as the case
may be, copies of all material communications with any government or
governmental agency relating to Environmental Claims and all material
communications with any other Person relating to Environmental Claims brought
by such Person which could, in either case, if successfully brought against
such Borrower or such Subsidiary, reasonably be expected to result in a
Material Adverse Effect.

 

(k)           Multiemployer Plan Withdrawal
Liability. The Borrowers shall (i) once in each
calendar year beginning in January, 2005, request a current statement of
withdrawal liability from each Multiemployer Plan subject to Title IV of ERISA
to which any Borrower or any ERISA Affiliate is or has been obligated to
contribute during such year and (ii) within fifteen (15) days after such
Borrower receives such current statement, transmit a copy of such statement to
the Administrative Agent and each Lender. 
If a Multiemployer Plan fails to provide the Borrowers with the
requested information within a reasonable period of time, Borrower
Representative shall promptly notify the Administrative Agent and each Lender
of such failure and any reasons given therefor.

 

5.2       Affirmative
Covenants.

 

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

 

56

 

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

 

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

 

(c)           Financial Examinations and Review. Each Borrower shall, at the Borrowers’ expense
(provided such expenses are reasonable and to the extent no Event of Default
has occurred and is continuing, the Administrative Agent shall charge no
Borrower for more than two examinations per annum), upon reasonable prior
written notice from the Administrative Agent to the Borrower Representative,
permit, and shall cause each of its Domestic Subsidiaries to permit, the
Administrative Agent, during normal business hours in the presence of an
officer of such Borrower: (i) to examine, with the guidance and
supervision of such Borrower, such Borrower’s financial records and to make
copies of and extracts from such records and (ii) to consult with such
Borrower’s and its Domestic Subsidiaries’ officers, directors, accountants,
actuaries, trustees and plan administrators, as the case may be, in respect of
such Borrower and its Domestic Subsidiaries’ financial condition, each of which
parties is hereby authorized by such Borrower to make such information
available to the Administrative Agent, to the same extent that it would to such
Borrower.

 

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

 

(e)           Compliance with Environmental Laws.
Each Borrower will use and operate its facilities and properties, and cause
each of its Subsidiaries to use and operate its respective facilities and
properties, in compliance with Environmental Laws except for noncompliance
which, when taken singly or with all other such obligations, has not resulted
nor could reasonably be expected to result in a Material Adverse Effect.  Each Borrower will keep, and will cause each
Subsidiary thereof to keep, all necessary Environmental Permits in effect and
remain in compliance therewith, and handle all Hazardous Materials in
compliance with all applicable Environmental Laws, except to the extent that
any such lack of effectiveness or non-compliance, when taken singly or with all
other such instances of lack of effectiveness or non-compliance, has not
resulted and could not reasonably be expected to result in a Material Adverse
Effect.  No Borrower shall suffer to
exist, and shall not permit any Subsidiary to suffer to exist, an environmental
condition which, when taken singly or with all other such conditions, has
resulted or could reasonably be expected to result in a Material Adverse
Effect.  No Borrower shall suffer or
permit the aggregate of all liabilities or claims against the Borrowers and the
Subsidiaries thereof referenced in this Section and Section 4.11 to result
or be reasonably expected to result in a Material Adverse Effect.

 

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

 

57

 

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

 

(g)           Use of Proceeds. The proceeds of the Revolving Credit Loans may only
be used: (i) to fund working capital and other general business purposes
of the Borrowers, (ii) to reimburse drawings under Letters of Credit issued for
the account of the Borrowers, (iii) to repay and refinance the
Indebtedness of the Borrowers under the Existing Credit Facility and (iv) to
pay all transaction costs and expenses in connection with the transactions
contemplated hereby.

 

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

 

(i)            Taxes. Each
Borrower shall pay in full, and shall cause each of its Subsidiaries to pay
in full, prior in each case to the date when penalties for the nonpayment
thereof would attach, all taxes, assessments and governmental charges and
levies for which it may be or become subject and all lawful claims therefor
which, if unpaid, could reasonably be expected to result in a Lien upon its
property (other than Liens permitted by Section 5.3(d)); provided, however,
that no such tax, assessment, charge or levy need be paid so long as and to the
extent that: (i) it is contested in good faith and by timely and
appropriate proceedings effective, during the pendency of such proceedings, to
stay the enforcement of such taxes, assessments and governmental charges and
levies and (x) such stay prevents the creation of any Lien (other than
Liens for taxes, assessments and governmental charges the payment of which is
not yet delinquent) or (y) a bond has been provided which prevents the
creation of any Lien (other than Liens for taxes, assessments and governmental
charges the payment of which is not yet delinquent) and (ii) appropriate
reserves, as required by GAAP, are made, on a consolidated basis, on the books
of  UNOVA, Inc.

 

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

 

(k)           License from Third Parties.
Except as disclosed in the Disclosure Schedule, no
Borrower nor any Subsidiary thereof is a party to any Material License
Agreement.

 

(l)            Subsidiary Guaranties. Except
for any Excluded Subsidiary, each Domestic Subsidiary of each Borrower created,
acquired or held on or subsequent to the Closing Date which does not execute a
Joinder Agreement in order to become a Borrower hereunder, shall immediately
execute and deliver a Subsidiary Guaranty in the form of Exhibit D-3 hereto and
Security Agreement, in the form of Exhibit D-2 hereto and shall deliver such
corporate

 

58

 

governance
and authorization documents and an opinion of counsel as may be deemed
reasonably necessary or advisable by Administrative Agent.

 

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

 

(n)           Pledge of IAS Foreign Subsidiaries. If the Revolving Credit Commitments
have not been reduced by $50,000,000 as required in connection with the sale of
the Industrial Automation Systems Segment by the first anniversary of the
Closing Date, Borrowers will pledge to the Administrative Agent 65% of the
stock of the first tier Foreign Subsidiaries (exclusive of Subsidiaries that
would constitute Excluded Foreign Subsidiaries) of the Industrial Automation
Systems Segment.

 

(o)           Acquisition Documents.  With respect to each Permitted Acquisition,
and prior to the funding of any Revolving Credit Loan to finance such Permitted
Acquisition, the transactions contemplated by the Acquisition Documents have
each been consummated materially (i) in accordance with the respective terms
thereof, without any amendment, waiver, modification or termination of any
provision thereof except for such amendment, waiver, modification, termination
or noncompliance therewith as to which the Administrative Agent has been
notified in writing prior to such consummation and (ii) in compliance with all
applicable Law.  The Borrowers shall have
delivered to the Administrative Agent true and correct copies of each of the
Acquisition Documents, and, to the extent reasonably requested by the
Administrative Agent, each other instrument, agreement or document regarding
each Permitted Acquisition, in each case, funded in whole or in part by any
Revolving Credit Loan.  Each party to
each Permitted Acquisition funded in whole or in part by any Revolving Credit
Loan has performed and/or satisfied all material obligations and conditions
required of it prior to or as a condition to the consummation of the
transactions contemplated by and consummated under the applicable Acquisition
Document except for such nonperformance or non-satisfaction as to which the
Administrative Agent has been notified in writing prior to such consummation.

 

5.3       Negative
Covenants.

 

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

 

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

 

(B)           any Borrower or any Subsidiary
thereof may sell or otherwise dispose of its assets that are (x) obsolete, worn
out, unnecessary or no longer used or useful in such Borrower’s or such
Subsidiary’s business or (y) sold or otherwise disposed of in the ordinary
course of business;

 

59

 

 

(C)           any Borrower or any Subsidiary may
sell, lease, license or otherwise transfer its Intellectual Property provided
however, (x) that such sales, licenses or other transfers shall not
interfere in any material respect with the business of any Borrower or any
Subsidiary (other than Excluded Subsidiaries or Excluded Foreign Subsidiaries)
and (y) that the aggregate fair market value of all such Intellectual Property
does not exceed Thirty Million Dollars ($30,000,000) during the term of this
Agreement;

 

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

 

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

 

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

 

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

 

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

 

(I)            the Borrowers may sell, lease or
otherwise dispose of the assets or stock of the Industrial Automation System
Segment, in whole or in part, for consideration in an amount determined to be
commercially reasonable by UNOVA, Inc. in the exercise of its good faith
business judgment; provided, however, that: (i) at the time of
such sale and after giving effect thereto, no Event of Default exists or will
exist and (ii)  the Net Proceeds thereof shall be delivered to the
Administrative Agent and applied to the Obligations to the extent required
under Section 2.8(b)(iv); and

 

(J)            any Borrower and any Subsidiary
thereof may consummate Permitted Acquisitions in accordance with the
requirements of this Agreement.

 

(b)           Credit Extensions; Prepayments.  No
Borrower shall, nor shall it permit any Subsidiary thereof to, (i) make
prepayments or advance payments in respect of Indebtedness,

 

60

 

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

 

(A)          any Borrower and any Subsidiary may
endorse checks, drafts, and similar instruments for deposit or collection in
the ordinary course of business;

 

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

 

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

 

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

 

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

 

(F)           the Borrowers and their Subsidiaries
may prepay other Indebtedness not otherwise permitted under this
Section 5.3(b) provided, however, that (i) no Event of
Default has occurred and is continuing, and (ii) UNOVA, Inc. and its
consolidated Subsidiaries shall have a Consolidated Leverage Ratio which is at
least 0.25 less than the Consolidated Leverage Ratio required by
Section 5.4(a) on a pro forma basis after giving effect to such
prepayment;

 

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

 

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

 

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

 

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

 

61

 

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

 

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

 

(M)         the Borrowers and their Subsidiaries
may make loans (including loans made on a non-arms-length basis) to Honsberg
Lamb Sonderwerkzengmaschinen GmbH, a corporation organized under the laws of
Germany, and Intermec Technologies GmbH, a corporation organized under the laws
of Germany, in an aggregate amount, when taken together and combined with the
investments permitted in Section 5.3(e)(A), not to exceed Thirty Million
Dollars ($30,000,000);

 

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

 

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

 

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

 

(Q)          any Borrower or any Subsidiary may
prepay any Indebtedness owed to any Borrower or any Subsidiary;

 

(R)           any Foreign Subsidiary may provide
guaranties of the obligations of its Subsidiaries to the extent required under
applicable labor or pension laws of a jurisdiction outside of the United
States; or

 

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

 

(c)           Indebtedness.   No
Borrower shall, nor shall it permit any Subsidiary thereof to, create, assume,
incur, suffer to exist or have outstanding at any time any Indebtedness or be
or become a Guarantor of or otherwise undertake or assume any Guaranty
Obligation with respect to any Indebtedness of any other Person; except,
that this Section 5.3(c) shall not prohibit:

 

(i)            the Obligations;

 

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

 

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

 

62

 

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

 

(v)           Indebtedness secured by a Lien
permitted by clauses (A), (B), (H), (I), (J), (K), (L) or (O) of
Section 5.3(d) hereof;

 

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

 

(vii)         Indebtedness consisting of Guaranties
permitted by Section 5.3(b);

 

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

 

(ix)           unsecured Indebtedness not otherwise
permitted under this Section 5.3(c), provided, however, that
the aggregate outstanding principal amount of all such Indebtedness shall not
exceed Ten Million Dollars ($10,000,000);

 

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

 

(xi)           Subordinated Indebtedness;

 

(xii)          Indebtedness of Honsberg Lamb
Sonderwerkzengmaschinen GmbH, a corporation organized under the laws of Germany
and Intermec Technologies GmbH, a corporation organized under the laws of
Germany, to one or more Borrowers or Subsidiaries permitted by
Section 5.3(b)(M);

 

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

 

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

 

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

 

63

 

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

 

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

 

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

 

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

 

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

 

(F)           zoning or deed restrictions, public
utility easements, rights of way, minor title irregularities, reservations,
exceptions, encroachments, covenants and similar matters relating to any real
property of such Borrower or any Subsidiary thereof, in all such cases having
no effect which is materially adverse as a practical matter on the ownership or
use of any such real estate in question, as such property is used in the
ordinary course of business of such Borrower or such Subsidiary;

 

(G)           any Lien which arises in connection
with judgments or attachments (1) the occurrence of which does not constitute
an Event of Default under Section 6.10, (2) the execution or other
enforcement of such Lien is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings and
(3) which is junior in priority to the Liens of the Administrative Agent
securing the Obligations from time to time outstanding;

 

(H)          deposits or cash pledges securing
performance of contracts, bids, tenders, leases (other than Capitalized
Leases), statutory obligations, surety and appeal bonds (other than contracts
for the payment of Indebtedness for Borrowed Money) arising in the ordinary
course of business;

 

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

 

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

 

64

 

(K)          any transfer of a check or other
medium of payment for deposit or collection, or any similar transaction in the
ordinary course of business;

 

(L)           any Lien (including any Lien in
respect of a Capitalized Lease of personal property) which is created in
connection with the purchase of personal property consisting of Equipment or
Fixtures; provided, however, that: (x) the Lien is confined
to the property in question, (y) the Indebtedness secured thereby does not
exceed the total cost of the purchase, and (z) the aggregate outstanding
Indebtedness of the Borrowers and their Subsidiaries secured by such Liens does
not at any time exceed Twenty Million Dollars ($20,000,000) in the aggregate;

 

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

 

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

 

(O)          any existing Lien fully disclosed in
the Disclosure Schedule;

 

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

 

(Q)          any statutory, common law,
administrative or regulatory Lien securing Indebtedness permitted by Section
5.3(b)(R) and, with respect a Foreign Subsidiary, any statutory Lien on its own
assets required under applicable labor or pension laws of a jurisdiction
outside of the United States.

 

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

 

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

 

(A)          investments in Honsberg Lamb
Sonderwerkzengmaschinen GmbH, a corporation organized under the laws of
Germany, and Intermec Technologies GmbH, a corporation organized under the laws
of Germany, in an aggregate amount, when taken together and combined with the
Indebtedness permitted in Section 5.3(b)(M), not to exceed Thirty Million
Dollars ($30,000,000);

 

65

 

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

 

(C)           the common stock of its Subsidiaries
existing on the Closing Date and the capital contributions therein outstanding
as of the Closing Date;

 

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

 

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

 

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

 

(G)           US Treasury notes or other Federal
securities that have a maximum maturity for any single issue of not more than
five years;

 

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

 

(I)            Taxable or tax-exempt municipal
notes and bonds, with a minimum rating of A- by S&P or A3 by Moody’s (including
any state, county, town, city, village, fire district, or school district, all
revenue bonds, including but not limited to, water and sewer, highway, housing
authorities, medical care agencies and project finance agencies and
certification of participation bonds);

 

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

 

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

 

(L)           deposits, including eurodollar
denominated bank deposits; certificates of deposit; repurchase agreements or US
money market funds; and

 

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

 

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

 

66

 

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

 

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

 

(h)           Charter Amendments.  No
Borrower shall amend any of its Charter Documents, nor shall any Borrower
permit any amendment of the Charter Documents of any Subsidiaries thereof, if
such amendment would reasonably be expected to have a Material Adverse Effect.

 

(i)            Compliance with ERISA.   No
Borrower shall, nor shall it permit any Subsidiary thereof or any ERISA
Affiliate to engage in any transaction in connection with which such Borrower
or any Subsidiary thereof could reasonably be expected to be subject to either
a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Internal Revenue Code, terminate or
withdraw from any Employee Benefit Plan (other than a Multiemployer Plan) in a
manner, or take any other action with respect to any such Employee Benefit Plan
(including, without limitation, a substantial cessation of business operations
or an amendment of an Employee Benefit Plan within the meaning of
Section 4041(e) of ERISA), which could reasonably be expected to
result in any liability of such Borrower, such Subsidiary or any ERISA
Affiliate to the PBGC, to the Department of Labor or to a trustee appointed
under Section 4042(b) or (c) of ERISA, incur any liability to
the PBGC on account of a withdrawal from or a termination of an Employee
Benefit Plan under Section 4063 or 4064 of ERISA, incur any liability for
post-retirement benefits under any and all welfare benefit plans (as defined in
Section 3(1) of ERISA) other than as required by applicable Law, fail to
make full payment when due of all amounts which, under the provisions of any
Employee Benefit Plan or applicable Law, such Borrower, such Subsidiary or any
ERISA Affiliate thereof is required to pay as contributions thereto, or permit
to exist any Accumulated Funding Deficiency, whether or not waived, with
respect to any Employee Benefit Plan (other than a Multiemployer Plan); provided,
however, that such engagement, termination, withdrawal, action, incurrence,
failure or permitting either individually or in the aggregate shall not be
deemed to have violated this Subsection 5.3(i) unless any such
engagement, termination, withdrawal, action, incurrence, failure or permitting
 has resulted or could reasonably be expected to result in liabilities or
claims against such Borrower in an amount exceeding Twenty Million Dollars
($20,000,000).

 

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

 

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

 

67

 

(l)            Arm’s-Length Transactions.   Except as permitted in Sections
5.3(a), 5.3(b), 5.3(c) or 5.3(e) or as set forth on the Disclosure
Schedule, no Borrower shall, nor shall it permit any Subsidiary thereof to,
enter into or permit to exist any material transaction (including, without
limitation, any transaction involving the investment, purchase, sale, lease,
transfer or exchange of any property or the rendering of any service) with any
Affiliate of such Borrower or such Subsidiary except for transactions in the
ordinary course of the business of such Borrower or such Subsidiary and upon
fair and reasonable terms not less favorable to such Borrower or such
Subsidiary than would be usual and customary in transactions with Persons who
are not such Affiliates.

 

5.4          Financial Covenants.

 

(a)           Consolidated Leverage Ratio.  The Borrowers shall not permit
the Consolidated Leverage Ratio of UNOVA, Inc. and its consolidated
Subsidiaries: (a) as of any Fiscal Quarter ending during the period commencing
on the Closing Date through June 30, 2005 to be greater than 3.00 to 1.00 for
the Testing Period then ending and (b) as of any Fiscal Quarter ending after
July 1, 2005 to be greater than 2.50 to 1.00 for the Testing Period then
ending.

 

(b)           Consolidated Interest Coverage Ratio.   The Borrowers shall not permit
the Consolidated Interest Coverage Ratio of UNOVA, Inc. and its consolidated Subsidiaries: (a) as of any Fiscal Quarter ending during the period commencing on
the Closing Date through June 30, 2005 to be less than 1.75 to 1.00 for the
Testing Period then ending and (b) as of any Fiscal Quarter ending after July
1, 2005 to be less than 2.25 to 1.00 for the Testing Period then ending.

 

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

 

Section 6                                             EVENTS OF DEFAULT.

 

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

 

6.1          Payment.   Failure by the Borrowers (a) to make
payment of principal on any Revolving Credit Note when due or (b) pay any
interest on the Revolving Credit Loans when due or (c) to pay any other
Obligation when required to be paid hereunder to the extent such failure is not
remedied within five (5) Business Days after such required date of payment; or

 

6.2          Representations and Warranties.   Any warranty or representation
made or deemed made by any Borrower or any Subsidiary in respect of any or all
of the Borrowers or any Subsidiary thereof in this Agreement, any other Loan
Document or any certificate furnished at any time in compliance with this
Agreement shall prove to have been false or inaccurate in any material respect
when made or deemed made; or

 

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

 

68

 

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

 

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

 

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

 

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

 

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

 

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

 

69

 

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

 

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

 

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

 

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

 

Section 7                                             REMEDIES.

 

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

 

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

 

70

 

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

 

7.3          General Rights and Remedies of the Administrative
Agent and the Lenders.   With
respect to the Collateral, the Administrative Agent shall have all of the
rights and remedies of a secured party under the UCC or under other applicable
Law.  The Administrative Agent, each
Lender and the LC Issuer shall have all other legal and equitable rights to
which each may be entitled, all of which rights and remedies shall be
cumulative, and none of which shall be exclusive, to the extent permitted by
Law, in addition to any other rights or remedies contained in this Agreement or
in any of the other Loan Documents.  The
Administrative Agent, each Lender and the LC Issuer hereby expressly agree
that, unless requested by the Administrative Agent, upon the consent of the
Required Lenders, such Lender and the LC Issuer will not take or cause to be
taken, in respect of the Revolving Credit Loans or the other Obligations or the
Collateral, any action or remedy that is independent from the actions or
remedies taken or to be taken by the Administrative Agent, except for any
actions taken by any Lender or the LC Issuer necessary to preserve its rights
in connection with any Event of Default described in Section 6.11 of this
Agreement.

 

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

 

(a)           Possession of Collateral.   The Administrative Agent shall
have the right to take immediate possession of the Collateral and all Proceeds
relating to such Collateral and: (i) to require the
Borrowers, at the Borrowers’ expense, to assemble the Collateral and make it
available to the Administrative Agent at such facilities of the Borrowers as
the Administrative Agent shall designate or (ii) to enter any of the
premises of the Borrowers or wherever any Collateral shall be located and to
keep and store the same on such premises until sold.  If the premises on which any Collateral is
located is owned or leased by the Borrowers, then the Borrowers shall not
charge the Administrative Agent for storage of such Collateral on such
premises.

 

(b)           Foreclosure of Liens.   The Administrative Agent shall
have the right to foreclose on the Liens created under this Agreement and each
of the other Loan Documents or under any other agreement
relating to the Collateral.

 

(c)           Disposition of Collateral.   The Administrative Agent shall
have the right to sell or to otherwise dispose of all or any Collateral in its
then condition, or after any further processing thereof, at public or
private sale or sales, wholesale dispositions, or sales pursuant to one or more
contracts, with such notice as may be required by Law, in lots or in bulk, for
cash or on credit, all as the Administrative Agent, in its discretion, may deem
advisable.  Each Borrower acknowledges
and covenants that ten (10) days written notice to the Borrower Representative
of any public or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at the premises of such
Borrower, at such other locations where the Collateral then is located, or as
otherwise determined by the Administrative Agent.  The Administrative Agent shall have the right
to conduct such sales on the premises of any Borrower, without charge therefor,
and such sales may be adjourned from time to time in accordance with applicable
Law without further requirement of notice to the Borrower Representative.  Each Lender and each LC Issuer shall have the
right to bid or credit bid at any such sale on its own behalf.

 

71

 

(d)           Application of Collateral; Application of
Liquidation Proceeds.   The Administrative
Agent, with or without proceeding with sale or foreclosure or demanding payment
of the Obligations, shall, without notice, at any time during the continuance
of an Event of Default, appropriate and apply to the Obligations all payments
received by the Administrative Agent and all monies and Proceeds received the
Administrative Agent with respect to any and all Collateral as follows:

 

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

 

(ii)           Second, to the
payment pro rata of any fees then
accrued and payable to the Administrative Agent or any Lender under this
Agreement;

 

(iii)         Third, to the
payment pro rata of interest then
accrued on the outstanding Revolving Credit Loans of the Borrowers;

 

(iv)          Fourth, to the
payment pro rata of the principal
balance then owing on the outstanding Revolving Credit Loans with the payments
on the outstanding Revolving Credit Loans being pro rata to the Lenders on the basis of their Pro Rata Share
thereof;

 

(v)            Fifth, as cash
collateral security against the aggregate undrawn amount of any Letter of
Credit outstanding for the account of the Borrowers and any other Letter of
Credit Obligations outstanding of the Borrowers;

 

(vi)          Sixth, to the
payment of: (i) all other amounts owed by the Borrowers to the Administrative
Agent, any Lender, the LC Issuer under this Agreement or any other Loan
Document, (ii) all amounts owing to the Designated Hedge Creditor as Designated
Hedge Obligations and (iii) all amounts owing to any Lender in connection with
cash management services provided by such Lender to the Borrowers and their
Subsidiaries; provided, however, if such monies and Proceeds are
insufficient to pay such amounts in full, to the payment of such amounts pro rata; and

 

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

 

7.5          Set-off.   If any
Event of Default shall occur which is continuing, each of the Lenders and the
LC Issuer and each Affiliate thereof shall have the right (in addition to such
other rights as it may have by operation of Law or otherwise) to the extent
permitted by applicable Law, but subject to Sections 7.3 and 7.10 of this
Agreement, at any time to set off against and to appropriate to and apply
toward the payment of the Obligations and the Letter of Credit Obligations, and
all other liabilities under this Agreement and the other Loan Documents then
owing to it (and any participation purchased or to be purchased pursuant to
Section 7.10 below) whether or not the same shall then have matured, any
and all deposit (general or special) and any other Indebtedness at any time
held or owing by such Lender or each Affiliate thereof (including branches and
agencies thereof wherever located) to or for the credit or account of the
Borrowers, all without notice to or demand upon the Borrowers or any other
Person.

 

72

 

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

 

7.7          Authority to Execute Transfers.   Without limitation of any
authorization granted to the Administrative Agent hereunder, each Borrower also
hereby authorizes the Administrative Agent, upon the occurrence of an Event of
Default which is continuing, to execute, in connection with the exercise by the
Administrative Agent of its remedies hereunder, any endorsements, assignments
or other instruments of conveyance or transfer with respect to the Collateral.

 

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

 

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

 

73

 

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

 

7.10        Remedies Cumulative.   The above-stated remedies are
not intended to be exhaustive and the full or partial exercise of any of such
remedies shall not preclude the full or partial exercise of any other remedy by
the Administrative Agent under this Agreement, under any Loan Document, or at
equity or under Law.

 

7.11        Appointment of Attorney-in-Fact.   The Administrative Agent shall
hereby have the right, and each Borrower hereby irrevocably makes, constitutes,
and appoints the Administrative Agent (and all officers, employees, or agents
designated by the Administrative Agent) as its true and lawful attorney-in-fact
and agent, with full power of substitution, from time to time following the
occurrence of an Event of Default which is continuing and without assent by the
Borrowers to effectuate, in such Borrower’s name, such Borrower’s obligations
under this Agreement and to execute, in its sole discretion, the transfers
contemplated by Section 7.7.

 

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

 

Section 8                                             THE ADMINISTRATIVE AGENT
AND LEAD ARRANGER.

 

8.1          The Administrative Agent.   Each Lender and the LC Issuer
irrevocably appoints KeyBank to act as Administrative Agent under this
Agreement and the other Loan Documents for the benefit of such Lender and the
LC Issuer with full authority to take such actions, and to exercise such
powers, on behalf of such Lender and the LC Issuer in respect of this Agreement
and the other Loan Documents as are herein and therein respectively delegated
to the Administrative Agent or as are reasonably incidental to those delegated
powers.  The Administrative Agent in such
capacity shall be deemed to be an independent contractor of the Lenders and the
LC Issuer.  Each of the Lenders and the
LC Issuer hereby expressly agrees that, without first obtaining the prior
written consent of the Administrative Agent or the Required Lenders, such
Lender and the LC Issuer, as the case may be, shall not take or cause to be
taken, in respect of the Obligations hereunder or the Collateral, any
enforcement or remedial action that is independent from the actions or remedies
taken or to be taken by the Administrative Agent, except for any actions taken
by any Lender or the LC Issuer which are necessary to preserve its rights in
connection with any Event of Default described in Section 6.11 of this
Agreement.

 

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

 

74

 

8.3          Administrative Agent as Lender; Other
Transactions.   The
Administrative Agent’s rights as a Lender under this Agreement and the other
Loan Documents shall not be affected by serving as the Administrative
Agent.  The Administrative Agent and its
Affiliates may generally transact any banking, financial, trust, advisory or
other business with any Borrower and any Subsidiary thereof (including, without
limitation, the acceptance of deposits, the extension of credit and the
acceptance of fiduciary appointments) without notice to the Lenders or the LC
Issuer, without accounting to the Lenders or the LC Issuer and without
prejudice to the Administrative Agent’s rights as a Lender under this Agreement
and the other Loan Documents except as may be expressly required under this
Agreement.

 

8.4          Instructions from Lenders.   The Administrative Agent shall
not be required to exercise any discretion or take any action as to matters not
expressly provided for by this Agreement and the other Loan Documents
(including, without limitation, collection and enforcement actions in respect
of any Obligations and any Collateral) except that the Administrative Agent
shall take such action (or omit to take such action) other than actions
referred to in Section 10 of this Agreement, as may be reasonably requested of
it in writing by the Required Lenders or all of the Lenders, if applicable, and
which actions and omissions shall be binding upon all of the Lenders and the LC
Issuer; provided, however, that the Administrative Agent shall
not be required to act (or omit any act) if, in its judgment, any such action
or omission might expose the Administrative Agent to personal liability or
might be contrary to this Agreement, any Loan Document or any applicable Law.

 

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

 

8.6          No Implied Representations.   Neither the Administrative Agent
nor the Lead Arranger shall be liable for any representation, warranty,
agreement or obligation of any kind of any other party to this Agreement or
anyone else, whether made or implied by any Borrower in this Agreement or any
Loan Document or by a Lender or the LC Issuer in any notice or other
communication or by anyone else or otherwise.

 

8.7          Sub-Administrative Agents.   The Administrative Agent may
employ agents and shall not be liable (except as to money or property received
by it or its agents) for any negligence or willful misconduct of any such agent
selected by it with reasonable care.

 

8.8          Administrative Agent’s Diligence.   Neither the Administrative Agent
nor the Lead Arranger shall be required: (a) to keep itself informed as to
anyone’s compliance with any provision of this Agreement or any Loan Document,
(b) to make any inquiry into the properties, financial condition or
operation of each Borrower and each Subsidiary thereof or any other matter
relating to this Agreement or any Loan Document, (c) to report to any
Lender and the LC Issuer any information (other than which this Agreement or
any Loan Document expressly requires to be so reported) that the Administrative
Agent or any of its Affiliates may have or acquire in respect of the
properties, business or financial condition of each Borrower and each
Subsidiary or any other matter relating to this Agreement or any Loan Document
or (d) to inquire into the validity, effectiveness or genuineness of this
Agreement or any Loan Document.

 

8.9          Notice of Default. 
 The Administrative Agent shall not be deemed
to have knowledge of any Potential Default or Event of Default unless and until
it shall have received a

 

75

 

written notice describing such Potential
Default or Event of Default and citing the relevant provision of this Agreement
or any Loan Document.  The Administrative
Agent shall give each Lender (except the Lender or the LC Issuer giving such
notice) reasonably prompt notice of any such written notice.

 

8.10        Administrative Agent’s
Liability.   Neither the Administrative Agent (acting in
its capacity as Administrative Agent), nor the Lead Arranger acting in its
capacity as Lead Arranger, nor any directors, officers, employees, attorneys,
and other agents acting for the Administrative Agent or the Lead Arranger,
acting in such capacities respectively, shall be liable to the Lenders or the
LC Issuer for any action or omission on their respective parts except for gross
negligence, willful misconduct or bad faith. 
Without limitation of the generality of the foregoing, the
Administrative Agent and the Lead Arranger: (a) may treat the payee of any
Note as the holder thereof until the Administrative Agent receives a fully
executed copy of any assignment with respect thereto, signed by such payee and
in form satisfactory to the Administrative Agent; (b) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts which have been selected by the Administrative Agent with reasonable
care; (c) makes no warranty or representation to any Lender and shall not
be responsible for any statements, certifications, warranties or
representations made in or in connection with this Agreement or any other Loan
Document, the Administrative Agent (and to the extent relevant, the Lead
Arranger) being entitled to rely conclusively upon such certificates;
(d) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement,
the Revolving Credit Notes or any other Loan Document or to inspect the
property (including the books and records) of the Borrowers; (e) shall not
be responsible for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, or collateral covered by
any agreement or any other Loan Document, and (f) shall incur no liability
by acting upon any notice, consent, certificate or other instrument or
writing  believed by it in good faith to
be genuine and correct and signed or sent by the proper party or parties.

 

Neither
the Administrative Agent, nor the Lead Arranger, nor any of their respective
directors, officers, employees or agents shall have any responsibility to any
Borrower or any Subsidiary thereof on account of the failure of or delay in
performance or breach by any Lender or the LC Issuer of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance
or breach by any other Lender or the LC Issuer or any Borrower of any of its
obligations hereunder or under any Loan Document or in connection herewith or
therewith.  The Lenders and the LC Issuer
each hereby acknowledge that the Administrative Agent shall be under no duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement, the Revolving Credit Notes or any other Loan
Document unless it shall be requested in writing to do so by the Required
Lenders.

 

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

 

76

 

salaried attorneys) in the defense of any
claim against it in any way relating to arising out of this Agreement or other
Loan Document or any action taken or omitted to be taken by the Administrative
Agent in connection therewith or in the prosecution of its rights and remedies
as the Administrative Agent (other than the loss, liability or costs incurred
by the Administrative Agent or the Lead Arranger in the defense of any claim
against it by the Lenders or the LC Issuer arising in connection with its
actions in its capacity as Administrative Agent); provided, however,
that each Lender shall be liable for only its Pro Rata Share of the whole loss
or liability; provided, further that no action taken in
accordance with instructions of Required Lenders shall be deemed to constitute
gross negligence or willful misconduct.

 

8.12        Resignation of
Administrative Agent.   The
Administrative Agent may resign as Administrative Agent for any reason
effective twenty (20) Business Days after giving notice thereof to the Lenders
and the LC Issuer and the Borrowers.  If
the Administrative Agent shall resign, the Required Lenders shall appoint from
among the Lenders a successor Administrative Agent for the Lenders and the LC
Issuer.  If no successor Administrative
Agent shall have been appointed by the time such resignation becomes effective,
then the retiring Administrative Agent may, on behalf of the Lenders and the LC
Issuer, appoint a successor Administrative Agent from among the remaining
Lenders.  If no appointed successor
accepts such appointment, the Required Lenders shall appoint an Administrative
Agent from among the Lenders or by selecting an independent third party to act
in the capacity as Administrative Agent. 
Upon appointment (whether effected by the Required Lenders or the retiring
Administrative Agent on behalf of the Lenders) and acceptance of such
appointment as “Administrative Agent,” the successor Administrative Agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term “Administrative Agent” shall mean such successor Administrative Agent,
effective upon its appointment and acceptance, and the former Administrative
Agent’s rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holder of
the Revolving Credit Notes.  After any
Administrative Agent’s resignation, the provisions of Section 8.11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent.

 

8.13        No
Implied Representations.   The Administrative Agent shall not be
liable for any representation, warranty, agreement or obligation of any kind of
any other party to this Agreement or anyone else, whether made or implied by
the Borrowers in this Agreement or any Loan Document or by a Lender, the LC
Issuer or the Designated Hedge Creditor in any notice or other communication or
by anyone else or otherwise.  Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates,
participants or assignees, may rely on the Administrative Agent to carry out
such Lender’s, Affiliate’s, participant’s or assignee’s customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any Borrower, its Affiliates
or agents, this Agreement, the other Loan Documents or the transactions
hereunder or contemplated hereby: (1) any identity verification procedures, (2)
any record keeping, (3) comparisons with government lists, (4) customer notices
or (5) other procedures required under the CIP Regulations or such other laws.

 

Section 9                                             BORROWER GUARANTY.

 

9.1          Borrower Cross-Guaranty; Maximum
Liability.   To
induce the Lenders to make the Revolving Credit Loans to the Borrowers and the
LC Issuer to issue Letters of Credit, and in consideration thereof, each of the
Borrowers hereby unconditionally and irrevocably: (a) guarantees, jointly
and severally, to the Administrative Agent, the Lenders and the LC Issuer the
due and punctual payment in immediately available funds of all Obligations
owing by any or

 

77

 

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

 

9.2          Guaranty Unconditional.   The obligations of the Borrower
Guarantors under the Borrower Guaranty shall be joint and several, irrevocable,
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by, except
for payment of Obligations and to the extent permitted by applicable Law
(i) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation or any Revolving Credit Loan under this Agreement or
any Loan Document by operation of Law or otherwise; (ii) any modification
or amendment of or supplement to this Agreement or any Loan Document;
(iii) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guarantee or other
liability of any third party, of the Obligations of any Borrower or its
Subsidiary with respect to which the Borrower Guaranty relates; (iv) any
change in the corporate existence, structure, or ownership of, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
any Borrower Guarantor or its assets or any resulting release or discharge of
any of the Obligations of the Borrower Guarantors contained in this Agreement
or any Loan Document; (v) the existence of any claim, set-off or other
rights which any Borrower Guarantor may have at any time against any Lender,
the LC Issuer or any other Person, whether or not arising in connection with
this Agreement or any Loan Document, provided, however, that
nothing herein shall prevent the assertion of any such claim by separate suit
or compulsory counterclaim; (vi) any invalidity or unenforceability
relating to or against any Borrower or its Subsidiary for any reason of this
Agreement or any Loan Document or any provision of applicable Law or regulation
purporting to prohibit the payment by any Borrower under this Agreement or any
Loan Document; or (vii) to the extent permitted by applicable Law, any
other act or omission to act or delay of any kind by a Borrower, a Borrower
Guarantor, the Administrative Agent, the Lenders, the LC Issuer or any other
Person or any other circumstance whatsoever that might, but for the provisions
of this paragraph, constitute a legal or equitable discharge of the Borrower
Guaranteed Obligations under this Section 9.

 

9.3          Discharge; Reinstatement.   The obligations of each Borrower
Guarantor under this Section 9 shall remain in full force and effect until the
Revolving Credit Commitments of the Lenders and the obligations of the LC
Issuer are terminated, and the Obligations of the Borrowers under this
Agreement or any other Loan Document have been paid in full.  If at any time any payment of any amount
payable by Borrower Guarantor under this Section 9, any other section of this
Agreement or other Loan Document is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of any Borrower
Guarantor or otherwise, the other Borrower Guarantors’ obligations under this
Section 9 with respect to such payment shall be reinstated at such time as
though such payment had become due but had not

 

78

 

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

 

9.4          Waiver.   No Borrower Guarantor shall be entitled to
enforce any remedy which the Administrative Agent, any Lender or the LC Issuer
now has or may hereafter have against any Borrower, any endorser or any
Guarantor or other Borrower Guarantor in respect of all or any part of the
Borrower Guaranteed Obligations paid by such Borrower Guarantor until all of
the Obligations and Letter of Credit Obligations shall have been fully and
finally paid to the Administrative Agent for the benefit of the Administrative
Agent, any Lender or the LC Issuer and all commitments of the Lenders and the
LC Issuer to the Borrowers have terminated. 
Each Borrower Guarantor hereby waives any benefit of, and any right to
participate in, any security or collateral given to the Administrative Agent
for the benefit of the Administrative Agent, the Lenders and the LC Issuer to
secure payment of the Borrower Guaranteed Obligations or any other liability of
any Borrower, any Guarantor or any Borrower Guarantor to the Administrative
Agent, any Lender or the LC Issuer.  Each
Borrower Guarantor also waives all setoffs and counterclaims and all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance of this
Borrower Guaranty.  Each Borrower
Guarantor further waives all notices of the existence, creation or incurring of
additional Obligations by any other Borrower, and also waives all notices that
the principal amount, or any portion thereof, and/or any interest on any
instrument or document evidencing all or any part of the Borrower Guaranteed
Obligations is due, notices of any and all proceedings to collect all or any
part of the Borrower Guaranteed Obligations, and, to the extent permitted by
Law, notices of exchange, sale, surrender or other handling of any Collateral
given to the Administrative Agent for the benefit of the Administrative Agent,
the Lenders and the LC Issuer to secure payment of the Borrower Guaranteed
Obligations.

 

9.5          Stay of Acceleration.   If acceleration of the time for
payment of any amount payable by any Borrower or Borrower Guarantor under this
Agreement or any other Loan Document in respect of a Borrower Guaranteed
Obligation is stayed upon the insolvency, bankruptcy or reorganization of any
Borrower or Borrower Guarantor all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
the other Borrower Guarantors hereunder forthwith on demand by the
Administrative Agent or the Required Lender.

 

9.6          Subrogation and Contribution Rights.   If any Borrower Guarantor makes
a payment in respect of the Borrower Guaranteed Obligations, it shall be
subrogated to the rights, if any, of the payees against the other Borrower
Guarantors with respect to such payment and shall have the rights of
contribution set forth below against the other Borrower Guarantors; provided,
however, that such Borrower Guarantor shall not enforce its rights to
any payment by way of subrogation or by exercising its right of contribution
until all the Obligations and Letter of Credit Obligations, as the case may be,
owing to the Administrative Agent, the Lenders and the LC Issuer shall have
been finally paid in full and may not under applicable insolvency laws be
required to be repaid by the Administrative Agent, any Lender or the LC Issuer,
as the case may be, and the Revolving Credit Commitments of the Lenders and all
obligations of the LC Issuer to issue Letters of Credit hereunder have been
terminated.

 

9.7          Guaranteed Obligation and
Contribution Payments.   Subject to all of the Obligations and Letter
of Credit Obligations, as the case may be, owing to the Administrative Agent,
the Lenders and the LC Issuer having been finally paid in full and not subject
to required repayment under applicable insolvency laws and the Revolving Credit
Commitments of the Lenders hereunder and all obligations of the LC Issuer to
issue Letters of Credit hereunder having terminated, each Borrower Guarantor
shall make, and agrees with each of the other Borrower Guarantors (and the
successors and assigns of such Borrower Guarantors) to make, payments in
respect of the Obligations of such Borrower Guarantor to which such other

 

79

 

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

 

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

 

(b)           Deficiency.  If there remain Obligations unpaid after
application of the payments referred to above, the deficiency shall be shared
among the Borrower Guarantors pro rata in proportion to their respective net
worth on the Closing Date of this Agreement.

 

Section 10                                      TRANSFERS AND
ASSIGNMENTS.

 

10.1        Successors and Assigns.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no Borrower
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender.  No Lender may assign or otherwise transfer
any of its rights or obligations hereunder except: (i) to an Eligible Assignee in
accordance with the provisions of Section 10.2, (ii) by way of participation in
accordance with the provisions of Section 10.4 or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of Section 10.5
(and any other attempted assignment or transfer by any party hereto shall be
null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in Section 10.4 and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

10.2        Transfer of Revolving Credit
Commitments.   Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Credit Commitment and
the Revolving Credit Loans at the time owing to such Lender); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Revolving Credit Commitment and the Revolving Credit
Loans at the time owing to such Lender or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Revolving Credit Commitment (which for this
purpose includes Revolving Credit Loans outstanding thereunder) or, if the
applicable Revolving Credit Commitment is not then in effect, the principal
outstanding balance of the Revolving Credit Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of
the Trade Date) shall not be less than $5,000,000, and, so long as no Event of
Default has occurred and is continuing, the Borrower Representative otherwise
consents (each such consent not to be unreasonably withheld or delayed); (ii)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender’s rights and obligations under this Agreement with
respect to the Revolving Credit Loan or the Revolving Credit Commitment or any
other future facilities hereunder assigned except that this clause (ii) shall
not prohibit any Lender from

 

80

 

assigning all or a portion of its rights and
obligations among the Revolving Credit Loans on a non-pro rata basis; (iii) any assignment of a
Revolving Credit Commitment must be approved by the Administrative Agent, the
LC Issuer and, so long as no Event of Default has occurred and is continuing,
the Borrower Representative (each such approval not to be unreasonably withheld
or delayed) unless the Person that is the proposed assignee is itself a Lender
with a Revolving Credit Commitment (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500, and
the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire in form and substance
satisfactory to the Administrative Agent. 
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to 10.3 of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Section 12 with respect to facts and
circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 10.4.

 

10.3        Maintenance of Register.   The Administrative Agent, acting
solely for this purpose as an agent of each Borrower, shall maintain at its
office in Cleveland, Ohio, a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Revolving Credit Commitments of, and principal amounts of the
Revolving Credit Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). 
The entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.

 

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

 

81

 

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

 

A
Participant shall not be entitled to receive any greater payment under Sections
2.14(e) and 12.3 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant.  A Participant shall not be entitled to the
benefits of Section 12.3(a) unless the Borrower Representative is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrowers, to comply with Section 12.3(b) as though it
were a Lender.

 

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

 

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

 

10.7        USA Patriot Act.  Each
assignee and participant that is not incorporated (or formed, as applicable)
under the Laws of the United States or a state thereof (and is not excepted
from the certification requirement contained in Section 313 of the USA
Patriot Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical
presence in the United States or foreign country, and (ii) subject to
supervision by a banking authority regulating such affiliated depository
institution or foreign bank) shall deliver to the Administrative Agent the
certification, or, if applicable, recertification, certifying that such
assignee or participant is not a “shell” and certifying to other matters as
required by Section 313 of the USA Patriot Act and the applicable
regulations at such times as are required under the USA Patriot Act.

 

10.8        Replacement of Certain
Lenders.  If any Lender or LC Issuer requests any
compensation, reimbursement or other payment under any of Sections 2.2(j),
2.14(e), 12.1 or 12.2 with respect to such Lender or LC Issuer, or if the
Borrowers are required to pay any additional amount to any Lender or LC Issuer
or governmental authority pursuant to Section 12.3, or if any Lender is a
“Defaulting Lender” hereunder, or if any Lender otherwise fails to fund its Pro
Rata Share of Revolving Credit Borrowings or the participation purchase price
payable by such Lender for its participating interest hereunder as specified in
Section 2.2(d) hereof, or if any Lender notifies the Administrative Agent that
it is exercising any right under this Agreement not to fund or maintain a LIBOR
Rate Loan denominated in Dollars which the other Lenders are willing or
prepared to fund or maintain, then the Borrowers may, at their sole
expense and effort, upon notice to such Lender or LC Issuer and the
Administrative Agent,

 

82

 

require such Lender or LC Issuer, as the case
may be, to assign and delegate, without recourse (in accordance with the
restrictions contained in Section 10.2), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrowers shall have received
the prior written consent of the Administrative Agent, which consent shall not
be unreasonably withheld, (ii) such Lender or LC Issuer shall have
received payment of an amount equal to the outstanding principal of its
Revolving Credit Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts, including any breakage compensation under
Section 12.4 hereof), and (iii) in the case of any such assignment
resulting from a claim for compensation, reimbursement or other payments
required to be made under any of Sections 2.2(j), 2.14(e), 12.1 or 12.2
with respect to such Lender or LC Issuer, or resulting from any required
payments to any Lender or governmental authority pursuant to Section 12.3,
such assignment will result in a reduction in such compensation, reimbursement
or payments.  No Lender or LC Issuer
shall be required to make any such assignment and delegation if, prior thereto,
as a result of a waiver by such Lender or LC Issuer or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

10.9        Replacement of
Non-consenting Lenders.   If, in
connection with any proposed amendment, waiver or consent hereunder pursuant to
Section 13.1 hereof: (i) requiring the consent of all Lenders, the consent
of Required Lenders is obtained but the consent of all Lenders whose consent if
required is not obtained or (ii) requiring the consent of Required Lenders, the
consent of Lenders holding 51% or more is obtained but the consent of Required
Lenders is not obtained (any Lender withholding consent as described in clause
(i) and (ii) hereof being referred to as a “Non-Consenting Lender”), then,
so long as the Administrative Agent is not a Non-Consenting Lender, the
Administrative Agent may, at the sole expense of such Borrowers, upon notice to
such Non-Consenting Lender and the Borrower Representative, require such
Non-Consenting Lender to assign and delegate, without recourse (in accordance
with the restrictions contained in Section 10.2), all of its interests,
rights and obligations under this Agreement to an Eligible Assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that such Lender shall have received
payment of an amount equal to the outstanding principal of its Revolving Credit
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrowers (in the case of all other
amounts).

 

Section 11                                      CONFIDENTIALITY.

 

The
Administrative Agent, each Lender and the LC Issuer hereby agree to use all
commercially reasonable efforts to hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with customary
procedures for handling confidential information of this nature and in accordance
with safe and sound banking practices for a period of two (2) years following
the receipt thereof; except that any such confidential information may
be disclosed: (i)  if required by subpoena or similar order of any court
of competent jurisdiction, (ii)  if required to be disclosed to any
regulatory or administrative governmental agency or commission having any
regulatory authority over the Administrative Agent, such Lender or the LC
Issuer or its securities, (iii) to any other party to this Agreement,
(iv) to any Affiliate of any Lender so long as such Affiliate agrees to be
bound by the provisions of this Section 11 prior to the time of such
disclosure, (v) to any prospective transferee or participant so long as
such Person agrees to be bound by the provisions of this Section 11 prior to
the time of such disclosure, (vi) to any Person if such information shall
have been already publicly disclosed (other than as a result of disclosure by
the Administrative Agent or a Lender or any other Person bound by a
confidentiality agreement with UNOVA, Inc. or any of its

 

83

 

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

 

Section 12                                      INDEMNITIES.

 

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

 

12.2        Risk-Based Capital.   If any Lender or the LC Issuer
shall have determined that after the Closing Date, the adoption of any
applicable Law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged by Law with
the interpretation or administration thereof, or compliance by such Lender or
the LC Issuer or the parent corporation of any thereof with any request or
directive regarding capital adequacy (whether or not having the force of Law so
long as it is being generally applied to all of such Lender’s or the LC
Issuer’s customers) of any such authority, central bank, or comparable agency,
in each case made subsequent to the Closing Date, has or could have the effect
of reducing the rate of return on the capital or assets of such Lender or the
LC Issuer or the parent corporation of any thereof as a consequence of the
commitments or obligations of such Lender or the LC Issuer hereunder to a level
below that which such Lender or the LC Issuer or the parent corporation of any
thereof could have achieved but for such adoption, effectiveness, change or
compliance, then from time to time, within 15 Business Days after demand by
such Lender or the LC Issuer (with a copy to the Administrative Agent), the
Borrowers shall pay to such Lender such additional amount or amounts as will
compensate such Lender or the LC Issuer or the parent corporation of any
thereof for such reduction.

 

12.3        Taxes.

 

(a)           Taxes; Withholding; Indemnification of Taxes
Paid.   All
payments made by the Borrowers under this Agreement and the Revolving Credit
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future taxes, levies, imposts, charges,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any governmental authority, excluding (i) net income taxes or any other taxes imposed on
or measured by the net income, or profits or capital, including, without
limitation, branch profits tax, of the Lenders or the LC Issuer, as the case
may be, in each case by the jurisdiction under the Laws of which such Person is
organized or any political subdivision thereof or by the jurisdiction in which
the principal or applicable lending or issuing office of such Person is located
or any political subdivision thereof and (ii) U.S. withholding

 

84

 

taxes payable with respect to payments
hereunder under Laws (including any treaty, ruling, determination or
regulation) in effect on, but not any increase in U.S. withholding tax
resulting from any subsequent change in such Laws occurring after, the date the
applicable Lender becomes a party to this Agreement (all such non-excluded
taxes, levies, imposts, charges, deductions and withholdings, the “Non-Excluded
Taxes”).  In addition, the Borrowers
agree to pay to the relevant governmental authority in accordance with
applicable Law any current or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise from any payment
made hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (“Other
Taxes”).  If any Non-Excluded Taxes or
Other Taxes are required by Law to be withheld from any amounts payable to the
Lenders or the LC Issuer hereunder or under the Revolving Credit Notes, the
amounts so payable to such Person shall be increased to the extent necessary to
yield to such Person a net amount equal to interest or any such other amounts
that would have been paid without such withholdings, at the rates or in the
amounts specified in this Agreement and the Revolving Credit Notes.  Whenever any Non-Excluded Taxes or Other
Taxes are payable by the Borrowers, the Borrower Representative shall send to
the Administrative Agent a certified copy of any original official receipt
received by such Borrower showing payment thereof or, if such receipts are not
obtainable, other evidence of such payments by the Borrowers reasonably
satisfactory to the Lenders, the LC Issuer or Administrative Agent, as
applicable.  The Borrowers shall
indemnify the Lenders and the LC Issuer for the full amount of Non-Excluded
Taxes and Other Taxes that are paid by such indemnified Person (including penalties,
interest and expenses arising therefrom or with respect thereto).  The agreements in this Section 12.3
shall survive the termination of this Agreement and the payment of the Notes
and all other amounts payable hereunder.

 

(b)           Delivery of IRS Certificates by Lenders.  

 

(i)            Each
Lender and each LC Issuer that is not a United States person as defined in
Section 7701(a)(30) of the Code (each, a “Foreign Lender”) as to which payments
to be made under this Agreement are fully exempt from or eligible for a
reduction of United States withholding tax under an applicable statute or tax
treaty shall provide prior to or on the Closing Date to the Borrower
Representative and the Administrative Agent a properly completed and executed
IRS Form W-8ECI (claiming a complete exemption from United States withholding
tax as effectively connected income) or its successor form and related
applicable forms or Form W-8BEN (claiming a reduction in or a complete
exemption from United States withholding tax under an applicable treaty) or its
successor form and related applicable forms or, in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under Section
881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is
not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a
“10 percent shareholder” of the Borrowers within the meaning of Section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code, and (y) a properly completed and executed
IRS Form W-8BEN or its successor form and related applicable forms or other
applicable form, certificate or document prescribed by the IRS certifying as to
such Foreign Lender’s entitlement to such exemption (a “Certificate of
Exemption”).  Any Person that is not a
United States person as defined in Section 7701(a)(30) of the Code that seeks
to become a Lender or the LC Issuer, as applicable, under this Agreement shall
provide a Certificate of Exemption certifying to such Person’s complete
exemption from United States withholding tax to the Borrower Representative and
the Administrative Agent prior to becoming a Lender or the LC Issuer, as
applicable, hereunder.  No Person that is
not a United States person as defined in Section 7701(a)(30) of the Code may
become a Lender or the LC Issuer, as applicable, hereunder if such Person fails
to deliver a Certificate of Exemption as prescribed in this Section in advance
of becoming a Lender or the LC Issuer, as applicable.

 

85

 

(ii)           Each
Lender and each LC Issuer that is a United States person as defined in Section
7701(a)(30) of the Code (each, a “U.S. Lender”) shall provide prior to or on
the Closing Date (or on or prior to the date it becomes a party to this Agreement)
to the Borrower Representative and the Administrative Agent a properly
completed and executed IRS Form W-9 (certifying that such U.S. Lender is
entitled to an exemption from United States backup withholding tax) or any
successor form.  Solely for purposes of
this Section, a U.S. Lender shall not include a Lender or the LC Issuer that
may be treated as an exempt recipient based on the indicators described in
Treasury Regulation Section 1.6049-4(c)(1)(ii).

 

(iii)         Each
Lender and each LC Issuer, from time to time after submitting the forms,
certificates or documents referred to, in this Section, shall submit
to the Borrower Representative and the Administrative Agent such additional
duly completed and signed copies of one or more other such forms, certificates
or documents (or such successor forms, certificates or other documents as shall
be adopted from time to time by the IRS or relevant taxing authorities) (A) on
or before the date that any such form, certificate or document expires or
becomes obsolete, (B) after the occurrence of any event requiring a change in
the most recent form, certificate or document previously delivered by it to the
Borrower Representative and the Administrative Agent, (C) from time to time
thereafter if reasonably requested by the Borrower Representative and the
Administrative Agent, and (D) as may be appropriate under then current United
States Law or regulations to avoid United States withholding taxes on payments
in respect of any amounts to be received by such Lender or such LC Issuer as
applicable, pursuant to this Agreement.

 

(iv)          If
any Lender or the LC Issuer determines that it is unable to submit to the
Borrower Representative and the Administrative Agent any form, certificate or
document that such Lender or the LC Issuer, as the case may be, is requested to
submit pursuant to this Section, or that it is required to withdraw or cancel
any such form, certificate or document, or that any such form, certificate or
document previously submitted has otherwise become ineffective or inaccurate
such Lender or the LC Issuer, as the case may be, shall promptly notify the
Borrower Representative and the Administrative Agent, as appropriate, of such
fact.

 

(v)            Notwithstanding
the rest of this Section 12.3, the Borrowers shall not be required
pursuant to this Section to pay any additional amount to, or to indemnify the
Administrative Agent, any Lender or any LC Issuer, as the case may be, to the
extent that (A) the Administrative Agent, such Lender or such LC Issuer becomes
subject to taxes (including Non-Excluded Taxes or Other Taxes) subsequent to
the Closing Date (or, if applicable, subsequent to the date such Person becomes
a party to this Agreement) as a result of any change in the circumstances of
the Administrative Agent, such Lender or the LC Issuer, as the case may be
(other than a change in applicable Law), including without limitation a change
in the residence, place of incorporation or principal place of business of the
Administrative Agent, such Lender or the LC Issuer or a change in the branch or
lending office of the Administrative Agent, such Lender or such LC Issuer, as
the case may be; or (B) such taxes (including Non-Excluded Taxes and Other
Taxes) would not have been incurred but for the failure of the Administrative Agent,
such Lender or such LC Issuer, as the case may be, to provide to the Borrower
Representative any form, certificate or document that it was required so to do
pursuant to this Section other than any form, certificate or document required
as a result of a change in Law.

 

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

 

86

 

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

 

(d)           Avoiding Negative Tax Consequences.   Upon the occurrence of any event
giving rise to the operation of Section 12.3(a) with respect to the
Administrative Agent, any Lender or the LC Issuer, as the case may be, the
Administrative Agent, such Lender and the LC Issuer shall, if requested by the
Borrower Representative, use reasonable commercial efforts (subject to the
Administrative Agent, such Lender’s or the LC Issuer’s overall, internal
policies of general application) to designate another lending office for any
Revolving Credit Loan, Revolving Credit Note or Letter of Credit affected by
such event with the object of avoiding the consequences of such event, so long
as, in the reasonable judgment of the Administrative Agent, such Lender or the
LC Issuer, as the case may be, such designation will not cause the Administrative
Agent, such Lender and its lending office(s) or cause the LC Issuer and its
issuing office(s), to suffer economic, legal or regulatory cost or
disadvantage, and provided, further, that nothing in this
Section 12.3(d) shall affect or postpone any of the obligations of the
Borrowers or the rights of the Administrative Agent, such Lender or the LC
Issuer pursuant to Section 12.3(a). 
Each Lender, LC Issuer and the Administrative Agent agrees that it will
(i) take all reasonable actions reasonably requested by the Borrowers that are
without material risk and cost to such Lender, LC Issuer or the Administrative
Agent and consistent with the internal policies of such Lender, LC Issuer or
the Administrative Agent, as applicable, and applicable legal and regulatory
restrictions (as the case may be) to maintain all exemptions, if any, available
to it from withholding taxes (whether available by treaty or existing
administrative waiver) and (ii) to the extent reasonable and without material
risk and cost to it, otherwise cooperate with the Borrowers to minimize any
amounts payable by the Borrowers under this Section 12.3, provided, however,
that in each case, any cost relating to such action or cooperation requested by
the Borrowers shall be borne by the Borrowers.

 

(e)           Tax Benefit.

 

(i)            If
and to the extent that any Lender, LC Issuer or the Administrative Agent is
able, in its sole opinion, to apply or otherwise take advantage of any
offsetting tax credit or other similar tax benefit arising out of or in conjunction
with any deduction or withholding which gives rise to an obligation on the
Borrowers to pay any Non-Excluded Taxes or Other Taxes pursuant to this
Section 12.3, then such Lender, LC Issuer or the Administrative Agent
shall, to the extent that in its sole opinion it can do so without prejudice to
the retention of the amount of such credit or benefit and without any other
adverse tax consequences for such Lender, LC Issuer or the Administrative
Agent, reimburse to the Borrowers at such time as such tax credit or benefit
shall have actually been received by such Lender, LC Issuer or the
Administrative Agent such amount as such Lender, LC Issuer or the
Administrative Agent shall, in its sole opinion, have determined to be
attributable to the relevant deduction or withholding and as will leave such
Lender, LC Issuer or the Administrative Agent in no better or worse position
than it would have been in if the payment of such Non-Excluded Taxes or Other
Taxes had not been required.

 

87

 

(ii)           Nothing
in this Section 12.3 shall oblige any Lender, LC Issuer or the Administrative
Agent to disclose to the Borrowers or any other person any information
regarding its tax affairs or tax computations or interfere with the right of
any Lender, LC Issuer or the Administrative Agent to arrange its tax affairs in
whatever manner it thinks fit and, in particular, no Lender, LC Issuer or the
Administrative Agent shall be under any obligation to claim relief from its
corporate profits or similar tax liability in credits or deductions available
to it and, if it does claim, the extent, order and manner in which it does so
shall be at its absolute discretion.

 

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

 

12.5        Indemnification for
Requests.   Whenever the Borrower Representative:
(a) shall revoke any Credit Request or Rate Conversion/Continuation
Request involving any LIBOR Rate Loan, (b) shall for any other reason fail
to borrow pursuant to any such Credit Request or Rate Conversion/Continuation
Request or otherwise comply therewith, (c) shall fail to fulfill, on or
before the date specified in any such request, the applicable conditions set
forth in Section 3 of this Agreement or (d) shall fail to honor any
prepayment notice with respect to LIBOR Rate Loans, then, in each case on any
Lender’s demand, the Borrowers shall indemnify each Lender and the
Administrative Agent against any loss, cost or expense reasonably incurred by
such Lender as a result of any such failure by the Borrowers, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
or the Administrative Agent to fund the LIBOR Rate Loan to be made by such
Lender or the Administrative Agent in connection with such request when such
LIBOR Rate Loan, as a direct result of such failure by the Borrowers, is not
made on such date.

 

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

 

88

 

12.7        Certificate for
Indemnification.   Each
demand by the Administrative Agent, a Lender or the LC Issuer to the Borrowers
for payment pursuant to this Section 12 shall be accompanied by a certificate
setting forth the reason in reasonable detail for the payment, the amount to be
paid, and the computations and assumptions in determining the amount, which
certificate shall, absent manifest error, be presumed to be correct.  In determining the amount of any such payment
thereunder, the Administrative Agent, each Lender and the LC Issuer may use
reasonable averaging and attribution methods, so long as such methods are set
forth in reasonable detail in the certificate referred to in the preceding
sentence.  The failure to give any such
notice shall not release or diminish any of the Borrowers’ obligations to pay
additional amounts pursuant to this Section 12 upon the subsequent receipt of
such notice.

 

Section 13                                      GENERAL.

 

13.1        Amendments and Waivers.   No amendment or waiver of any
provision of this Agreement or the Revolving Credit Notes or any other Loan
Document, nor consent to any departure by any Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Required Lenders, the Administrative Agent and the Borrowers, and the LC Issuer
to the extent the consent of the LC Issuer shall be required with respect to
any amendment, waiver, or consent, with respect to Section 2.2 or any
other provision the amendment or waiver of which would adversely affect the LC
Issuer, provided, however that: (X) unanimous consent of all of
the Lenders shall be required with respect to (a) the extension of
maturity of any Revolving Credit Note, or the extension of the payment date for
interest, principal and/or fees thereunder (other than a rescission of an
acceleration hereunder), or (b) any reduction in fees hereunder or the
rate of interest on any Revolving Credit Note (other than the waiver of Default
Interest imposed under Section 2.11(c)), or in any amount of principal or
interest due on any Revolving Credit Note, or any modification of the manner
of, or pro rata basis of, application of any payments made by the Borrowers to
the Lenders hereunder or Revolving Credit Commitment reductions pursuant to
Section 2.9 hereof, or (c) any change in the definitions “Collateral” or
“Required Lenders”, any change which makes less restrictive any component
comprising “Asset Coverage” or results in an increase in the availability of
credit, or any increase in the percentage advance rates with respect to Asset
Coverage, or (d)  any change in any percentage voting requirements in this
Agreement, or (e) except as otherwise permitted herein, the release in one
or more actions of all or substantially all of the Collateral or the
subordination of the Liens created in favor of the Administrative Agent with
respect to all or substantially all of the Collateral or (e) except in
connection with a sale thereof permitted under Section 5.3(a), the release of
any Borrower Guarantor or any Subsidiary Guarantor, or (f) any change
in  Section 7.9 (or the definition of
“Advantage”), Section 8, Sections 10.2, 10.4, or 10.5 or this Section 13.1
itself and (Y) consent of each Lender affected shall be required with respect
to: (i) any increase in the amount of such Lender’s Revolving Credit
Commitment or Pro Rata Share or (ii) any extension of such Lender’s Revolving
Credit Commitment.  Each Lender, the LC
Issuer and any other current of future holder of a Revolving Credit Note hereunder
shall be bound by any amendment, waiver or consent obtained as authorized by
this Section, regardless of its failure to agree thereto.  Any amendment, waiver, discharge, termination
or consent pursuant to this Section shall be effective only in the specific
instance and for the specific purpose for which it was given.  Notwithstanding the foregoing, the
Administrative Agent may without the consent of the Lenders (i) release liens
on assets the sale or other disposition of which is not prohibited under this
Agreement and (ii) release Liens on the stock or other ownership interests with
respect to Subsidiaries the restructuring, merger, or consolidation of which is
not prohibited under this Agreement provided appropriate replacement Liens on
the stock or other ownership interests which are received with respect to
entities resulting from any such restructuring, merger, or consolidation.

 

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

 

89

 

Lender and the LC Issuer shall have signed a
copy hereof (whether the same or different copies) and shall have delivered the
same to the Administrative Agent at the address specified in
Section 13.9.  As of such time, this
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Administrative Agent, each Lender and the LC Issuer, and their respective
successors and assigns, except that the Borrowers shall have no right to assign
their rights hereunder or any interest herein except as set forth in Section
10.1 of this Agreement.

 

13.3        Costs and Expenses.   The Borrowers agree to pay on
demand (a) all reasonable costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel or other advisors for the Administrative Agent and including
internal counsel) in connection with the negotiation, preparation, execution,
delivery, administration, modification, amendment, forbearance and waiver of
this Agreement or the other Loan Documents, and (b) during the pendency of an
Event of Default, the Administrative Agent, the Lenders and the LC Issuer
(including the reasonable fees and out-of-pocket expenses of counsel or other
advisors in connection with (i) any workout or restructuring of the Revolving
Credit Loans or (ii) the enforcement of, the exercise of remedies under, or the
preservation of rights and remedies under this Agreement or any of the other Loan
Documents (including any collection, bankruptcy or other enforcement
proceedings arising with respect to the Borrowers, this Agreement, or any Event
of Default under this Agreement), provided, however, that with
respect to clause (b) above, Lenders who are not acting in the capacity as the
Administrative Agent or the LC Issuer shall be entitled to reimbursement for no
more than one counsel representing all such Lenders (absent a conflict of
interest in which case the Lenders may engage and be reimbursed for additional
counsel).

 

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

 

13.5        Sharing of Information.   Subject to the provisions of
Section 11, the Administrative Agent, each Lender and the LC Issuer shall have
the right to furnish to its Affiliates, its accountants, its employees, its
officers, its directors, its legal counsel, potential participants, and to any
governmental agency having jurisdiction over the Administrative Agent, such
Lender and the LC Issuer information concerning the business, financial
condition, and property of the Borrowers, the amount of the Revolving Credit
Loans of the Borrowers hereunder, and the terms, conditions and other
provisions applicable to the respective parts thereof.

 

13.6        Interest Rate Limitation.   Notwithstanding anything herein
to the contrary, if at any time the applicable interest rate, together with all
fees and charges that are treated as interest under applicable Law as provided
for herein or in any other document executed in connection herewith, or
otherwise contracted for, charged, taken, received or reserved by any Lender or
the LC Issuer exceeds the maximum lawful rate that may be contracted for,
charged, taken, received or reserved by such Lender in accordance with
applicable Law (the “Maximum Lawful Rate”), then so long as the Maximum Lawful
Rate would be so exceeded, the rate of interest and all such charges payable,
contracted for, charged, taken, received or reserved in respect of the
Revolving Credit Loans of the Lenders or the LC Issuer to the Borrowers shall
be equal to the Maximum Lawful Rate.  Any
amount paid by the Borrower above the Maximum Lawful Rate shall be
credited  to principal or returned to the
Borrowers.

 

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

 

90

 

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

 

13.8        Illegality.   If any provision in this
Agreement or any other Loan Document shall for any reason be or become illegal,
void or unenforceable, that illegality, voidness or unenforceability shall not
affect any other provision.

 

13.9        Notices. 
 All notices, requests, demands and other
communications provided for hereunder shall be in writing and shall be given
solely: (a) by hand delivery or by overnight courier delivery service,
with all charges paid, (b) by facsimile transmission, if confirmed same
day in writing by first class mail, (c) by registered or certified mail,
postage prepaid and addressed to the parties, (d) electronic mail (to the
extent permitted for loan requests above), or (e) as otherwise provided in this
Agreement.  For the purposes of this
Agreement, such notices shall be deemed to be given and received: (i) if
by hand or by overnight courier service, upon actual receipt, (ii) if by
facsimile transmission, upon receipt of machine-generated confirmation of such
transmission (and provided the above-stated written confirmation is sent),
(iii) if by registered or certified mail, upon the first to occur of
actual receipt or the expiration of 72 hours after deposit with the U.S. Postal
Service, or (iv) if by electronic mail, when transmitted to an electronic email
address (or by another means of electronic delivery); provided, however,
that notices from the Borrower Representative to the Administrative Agent, any
Lender or the LC Issuer shall not be effective until actually received
thereby.  Notices or other communications
hereunder shall be addressed: if to the Borrower Representative, at the address
specified on the signature pages of this Agreement with respect to the Borrower
Representative; if to the Administrative Agent, to the Notice Office of the
Administrative Agent; if to a Lender, to the Notice Office of such Lender; and
if to the LC Issuer, to the Notice Office of such LC Issuer.

 

13.10      Governing Law.   This Agreement and the other
Loan Documents (including the Administrative Agent Fee Letter) and the
respective rights and obligations of the parties hereto shall be governed by
and construed in accordance with the internal Laws of the State of New York
(without giving effect to the conflict of laws rules thereof and except to the
extent perfection of the Administrative Agent’s security interests and Liens
and the effect thereof are otherwise governed pursuant to the UCC or the
applicable Law of any foreign jurisdiction).

 

13.11      Entire Agreement.   This Agreement and the other
Loan Documents referred to in or otherwise contemplated by this Agreement set
forth the entire agreement of the parties as to the transactions contemplated
by this Agreement.

 

13.12      Execution in Counterparts;
Execution by Facsimile.   This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
but one and the same agreement.  Delivery
of an executed counterpart hereof by facsimile shall be effective as manual
delivery of such counterpart; provided, however, that, each party
hereto will promptly thereafter deliver counterpart originals of such
counterpart facsimiles delivered by or on behalf of such party.

 

13.13      Waiver of Jury Trial
and Submission to Non-Exclusive Jurisdiction.   EACH OF THE PARTIES HERETO WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, AMONG THE PARTIES OR ANY THEREOF, ARISING OUT
OF, IN

 

91

 

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

 

EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY OHIO STATE
COURT OR FEDERAL COURT OF THE UNITED STATES SITTING IN CUYAHOGA COUNTY, OHIO,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY OTHER
LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH OHIO STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR
ANY OTHER LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION.

 

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

 

[remainder of page intentionally left blank]

 

92

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers or agents thereunto duly authorized, as of the date first
above written.

 

	
   

  	
  BORROWERS

  
	
   

  	
   

  
	
   

  	
  UNOVA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael
  E. Keane

  	
   

  
	
   

  	
  By:

  	
  Michael
  E. Keane

  	
   

  
	
   

  	
  Its:

  	
  Senior
  Vice President and CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kenneth L. Cohen

  	
   

  
	
   

  	
  By:

  	
  Kenneth
  L. Cohen

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  UNOVA,
  Inc., as Borrower Representative

  
	
   

  	
  6001
  36th Avenue West

  
	
   

  	
  Everett,
  WA 98203

  
	
   

  	
  Attention:
  Treasurer

  
	
   

  	
  Telecopy:
  425-265-2497

  
	
   

  	
  Email:
  kcohen@unova.com

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  Latham
  & Watkins, LLP

  
	
   

  	
  633
  West Fifth Street, Suite 4000

  
	
   

  	
  Los
  Angeles, CA 90071-2007

  
	
   

  	
  Attention:
  Dominic Yoong

  
	
   

  	
  Telecopy:
  213-891-8763

  
	
   

  	
  Email:
  dominic.yoong@lw.com

  

 

S-1

 

	
   

  	
  UNOVA INDUSTRIAL AUTOMATION

  SYSTEMS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
  By:
  

  	
  Michael
  E. Keane

  	
   

  
	
   

  	
  Its:
  

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kenneth L. Cohen

  	
   

  
	
   

  	
  By:
  

  	
  Kenneth
  L. Cohen

  	
   

  
	
   

  	
  Its:
  

  	
  Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Office:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UNOVA,
  Inc., as Borrower Representative

  	
   

  
	
   

  	
  6001
  36th Avenue West

  	
   

  
	
   

  	
  Everett,
  WA 98203

  	
   

  
	
   

  	
  Attention:
  Treasurer

  	
   

  
	
   

  	
  Telecopy:
  425-265-2497

  	
   

  
	
   

  	
  Email:
  kcohen@unova.com

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  With
  a copy to:

  	
   

  
	
   

  	
  Latham
  & Watkins, LLP

  	
   

  
	
   

  	
  633
  West Fifth Street, Suite 4000

  	
   

  
	
   

  	
  Los
  Angeles, CA 90071-2007

  	
   

  
	
   

  	
  Attention:
  Dominic Yoong

  	
   

  
	
   

  	
  Telecopy:
  213-891-8763

  	
   

  
	
   

  	
  Email: dominic.yoong@lw.com

  	
   

  

 

S-2

 

	
   

  	
  INTERMEC TECHNOLOGIES

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
  By:
  

  	
  Michael
  E. Keane

  
	
   

  	
  Its:
  

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kenneth L. Cohen

  	
   

  
	
   

  	
  By:
  

  	
  Kenneth
  L. Cohen

  
	
   

  	
  Its:
  

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  UNOVA,
  Inc., as Borrower Representative

  
	
   

  	
  6001
  36th Avenue West

  
	
   

  	
  Everett,
  WA 98203

  
	
   

  	
  Attention:
  Treasurer

  
	
   

  	
  Telecopy:
  425-265-2497

  
	
   

  	
  Email:
  kcohen@unova.com

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  Latham
  & Watkins, LLP

  
	
   

  	
  633
  West Fifth Street, Suite 4000

  
	
   

  	
  Los
  Angeles, CA 90071-2007

  
	
   

  	
  Attention:
  Dominic Yoong

  
	
   

  	
  Telecopy:
  213-891-8763

  
	
   

  	
  Email:
  dominic.yoong@lw.com

  

 

S-3

 

	
   

  	
  INTERMEC TECHNOLOGIES

  MANUFACTURING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
  By:
  

  	
  Michael
  E. Keane

  	
   

  
	
   

  	
  Its:
  

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kenneth L. Cohen

  	
   

  
	
   

  	
  By:
  

  	
  Kenneth
  L. Cohen

  	
   

  
	
   

  	
  Its:
  

  	
  Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  UNOVA,
  Inc., as Borrower Representative

  
	
   

  	
  6001
  36th Avenue West

  
	
   

  	
  Everett,
  WA 98203

  
	
   

  	
  Attention:
  Treasurer

  
	
   

  	
  Telecopy:
  425-265-2497

  
	
   

  	
  Email:
  kcohen@unova.com

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  Latham
  & Watkins, LLP

  
	
   

  	
  633
  West Fifth Street, Suite 4000

  
	
   

  	
  Los
  Angeles, CA 90071-2007

  
	
   

  	
  Attention:
  Dominic Yoong

  
	
   

  	
  Telecopy:
  213-891-8763

  
	
   

  	
  Email:
  dominic.yoong@lw.com

  

 

S-4

 

	
   

  	
  INTERMEC IP CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
  By:

  	
  Michael
  E. Keane

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kenneth L. Cohen

  	
   

  
	
   

  	
  By:

  	
  Kenneth
  L. Cohen

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  UNOVA,
  Inc., as Borrower Representative

  
	
   

  	
  6001
  36th Avenue West

  
	
   

  	
  Everett,
  WA 98203

  
	
   

  	
  Attention:
  Treasurer

  
	
   

  	
  Telecopy:
  425-265-2497

  
	
   

  	
  Email:
  kcohen@unova.com

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  Latham
  & Watkins, LLP

  
	
   

  	
  633
  West Fifth Street, Suite 4000

  
	
   

  	
  Los
  Angeles, CA 90071-2007

  
	
   

  	
  Attention:
  Dominic Yoong

  
	
   

  	
  Telecopy:
  213-891-8763

  
	
   

  	
  Email:
  dominic.yoong@lw.com

  

 

S-5

 

	
   

  	
  UNOVA IP CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
  By:

  	
  Michael
  E. Keane

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kenneth L. Cohen

  	
   

  
	
   

  	
  By:

  	
  Kenneth
  L. Cohen

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  UNOVA,
  Inc., as Borrower Representative

  
	
   

  	
  6001
  36th Avenue West

  
	
   

  	
  Everett,
  WA 98203

  
	
   

  	
  Attention:
  Treasurer

  
	
   

  	
  Telecopy:
  425-265-2497

  
	
   

  	
  Email:
  kcohen@unova.com

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  Latham
  & Watkins, LLP

  
	
   

  	
  633
  West Fifth Street, Suite 4000

  
	
   

  	
  Los
  Angeles, CA 90071-2007

  
	
   

  	
  Attention:
  Dominic Yoong

  
	
   

  	
  Telecopy:
  213-891-8763

  
	
   

  	
  Email:
  dominic.yoong@lw.com

  
					

 

S-6

 

	
   

  	
  INTERMEC INTERNATIONAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
  By:

  	
  Michael
  E. Keane

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Kenneth L. Cohen

  	
   

  
	
   

  	
  By:

  	
  Kenneth
  L. Cohen

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  UNOVA,
  Inc., as Borrower Representative

  
	
   

  	
  6001
  36th Avenue West

  
	
   

  	
  Everett,
  WA 98203

  
	
   

  	
  Attention:
  Treasurer

  
	
   

  	
  Telecopy:
  425-265-2497

  
	
   

  	
  Email:
  kcohen@unova.com

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
  Latham
  & Watkins, LLP

  
	
   

  	
  633
  West Fifth Street, Suite 4000

  
	
   

  	
  Los
  Angeles, CA 90071-2007

  
	
   

  	
  Attention:
  Dominic Yoong

  
	
   

  	
  Telecopy:
  213-891-8763

  
	
   

  	
  Email:
  dominic.yoong@lw.com

  

 

S-7

 

	
   

  	
  ADMINISTRATIVE AGENT

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/
  Marianne T. Meil

  	
   

  
	
   

  	
  By:

  	
   Marianne
  T. Meil

  	
   

  
	
   

  	
  Its:

  	
   Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association

  
	
   

  	
  127
  Public Square

  
	
   

  	
  Cleveland,
  Ohio 44114

  
	
   

  	
  Attention:
  Marianne Meil

  
	
   

  	
  Telecopy:
  216-689-3549

  
	
   

  	
  Email:
  Marianne_Meil@KeyBank.com

  
	
   

  	
   

  
	
   

  	
  Payment
  Office:

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association

  
	
   

  	
  127
  Public Square

  
	
   

  	
  Cleveland,
  Ohio 44114

  
	
   

  	
  Attention: Marianne Meil

  
	
   

  	
  Telecopy: 216- 689-3549

  
	
   

  	
  Email: Marianne_Meil@KeyBank.com

  

 

S-8

 

	
   

  	
  LENDERS

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/
  Marianne T. Meil

  	
   

  
	
   

  	
  By:

  	
   Marianne
  T. Meil

  	
   

  
	
   

  	
  Its:

  	
   Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association

  
	
   

  	
  127
  Public Square

  
	
   

  	
  Cleveland,
  Ohio 44114

  
	
   

  	
  Attention:
  Marianne Meil

  
	
   

  	
  Telecopy:
  216- 689-3549

  
	
   

  	
  Email:
  Marianne_Meil@KeyBank.com

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association

  
	
   

  	
  127
  Public Square

  
	
   

  	
  Cleveland,
  Ohio 44114

  
	
   

  	
  Attention: Marianne Meil

  
	
   

  	
  Telecopy: 216-689-3549

  
	
   

  	
  Email: Marianne_Meil@KeyBank.com

  

 

S-9

 

	
   

  	
  BARCLAYS
  BANK PLC,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  V Muldoon

  	
   

  
	
   

  	
  By:

  	
  V
  Muldoon

  	
   

  
	
   

  	
  Its:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  Barclays
  Bank PLC

  54 Lombard Street

  London EC3P 3AH

  Attention: John Davey

  Telecopy: 00 44 (0) 870 242 2762

  Email: john.davey@barclays.co.uk

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  Barclays
  Bank PLC

  222 Broadway

  New York 10038

  Attention: Shoshana Harrison

  Telecopy: 212-412-5306

  Email: shoshana.harrison@barclayscapital.com

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  10 The South Colonnade

  Canary Warf, London

  Attention: Graham Smart

  Telecopy: 44 (0) 207 773 6807

  Email: graham.smart@barclayscapital.com

  

 

S-10

 

	
   

  	
  SILICON VALLEY BANK,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Uma Vanmane

  	
   

  
	
   

  	
  By:

  	
  Uma
  Vanmane

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  Silicon
  Valley Bank

  4700 Carillon Point

  Kirkland, WA 09033

  Attention: Uma Vanmane

  Telecopy: 312-704-1532

  Email:uvanmane@svbank.com

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  Silicon
  Valley Bank

  3003 Tasman Drive

  Santa Clara, CA 95054

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Telecopy:
  408-654-6232

  
	
   

  	
  Email:

  	
   

  	
   

  
							

 

S-11

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  James R. Farmer

  	
   

  
	
   

  	
  By:

  	
  James
  R. Farmer

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  U.S.
  Bank National Association

  1420 Fifth Avenue 10th Floor PD-WA-T10M

  Seattle, WA 98101

  Attention: James Farmer

  Telecopy: 206-344-3654

  Email: james.farmer1@usbank.com

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  U.S.
  Bank National Association

  1420 Fifth Avenue 10th Floor PD-WA-T10C

  Seattle, WA 98101

  Attention: Gail Fortun

  Telecopy: 206-344-3741

  Email: gail.fortun@usbank.com

  

 

S-12

 

	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Donald Caskey

  	
   

  
	
   

  	
  By:

  	
  Donald
  Caskey

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  The
  CIT Group/Business Credit, Inc.

  300 South Grand Avenue, 3rd Floor

  Los Angeles, CA 90071

  Attention: Donald Caskey

  Telecopy: 213-613-2501

  Email: don.caskey@cit.com

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  The
  CIT Group/Business Credit, Inc.

  300 South Grand Avenue, 3rd Floor

  Los Angeles, CA 90071

  Attention: Arda Mendoza

  Telecopy: 213-613-2519

  Email: arda.mendoza@cit.com

  

 

S-13

 

	
   

  	
  HARRIS TRUST AND SAVINGS BANK,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Michael M. Fordney

  	
   

  
	
   

  	
  By:

  	
  Michael
  M. Fordney

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  Harris
  Trust and Savings Bank

  111 West Monroe Street

  Chicago, IL 60603

  Attention: Michael M. Fordney

  Telecopy: 312-461-2591

  Email:michael.fordney@harrisnesbitt.com

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  Harris
  Trust and Savings Bank

  111 West Monroe Street

  Chicago, IL 60603

  Attention: Blanca Velez

  Telecopy: 312-293-5884

  Email:blanca.velez@harrisbank.com

  
					

 

S-14

 

	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Keith Alexander

  	
   

  
	
   

  	
  By:

  	
  Keith
  Alexander

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  General
  Electric Capital Corporation

  350 South Beverly Drive, Suite 200

  Beverly Hills, CA 90212

  Attention: Keith J. Alexander

  Telecopy: 310-785-0644

  Email: Keith.Alexander@ge.com

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  General
  Electric Capital Corporation

  500 West Monroe Street

  Chicago, IL 60661

  Attention: Patricia Coughlin

  Telecopy: (312) 463-3854

  Email: Patri.Coughlin@ge.com

  

 

S-15

 

	
   

  	
  WELLS FARGO BANK, N.A

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Scott Rhodes

  	
   

  
	
   

  	
  By:

  	
  Scott
  Rhodes, VP

  	
   

  
	
   

  	
  Its:

  	
  Wells
  Fargo Bank, N.A.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  Wells
  Fargo Bank, N.A

  205 108th Avenue NE Suite 600

  Bellevue, WA 98004

  Attention: Brent Grecian, Vice President

  Telecopy: 425-450-8069

  Email: greciabr@wellsfargo.com

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  Wells
  Fargo Bank, N.A

  1700 Lincoln Street Suite 300

  Denver, CO 80203-4500

  Attention: Patricia DelReal Flores

  Telecopy: 303-863-2729

  Email: Patricia.D.DelReal-Flores@wellsfargo.com

  

 

S-16

 

	
   

  	
  LC ISSUER:

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  as LC ISSUER

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Marianne T. Meil

  	
   

  
	
   

  	
  By:

  	
  Marianne
  T. Meil

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Office:

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association

  127 Public Square

  Cleveland, Ohio 44114

  Attention: Marianne Meil

  Telecopy: 216-689-3549

  Email: Marianne_Meil@KeyBank.com

  
	
   

  	
   

  
	
   

  	
  Lending
  Office:

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association

  127 Public Square

  Cleveland, Ohio 44114

  Attention: Marianne Meil

  Telecopy: 216-689-3549

  Email: Marianne_Meil@KeyBank.com

  

 

S-17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]