Document:

Exhibit
4.1

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

This Third Amendment to Credit Agreement (this “Amendment”),
dated as of March 31, 2004, is made by and among various financial institutions
parties hereto (collectively, the “Lenders”), Bank of America, N.A., as
administrative and collateral agent for the Lenders (in its capacity as
administrative and collateral agent, the “Agent”), and UNOVA, Inc., a
Delaware corporation (the “Parent”), UNOVA Industrial Automation
Systems, Inc., a Delaware corporation, Intermec Technologies Corporation, a
Washington corporation, R & B Machine Tool Company, a Michigan
corporation, UNOVA JSM, Inc., formerly known as J.S. McNamara Company, a
Michigan corporation, Intermec IP Corp., a Delaware corporation, and UNOVA IP
Corp., a Delaware corporation (the Parent and each such corporation is
individually hereinafter referred to as a “Borrower” and the Parent
together with all such corporations are hereinafter collectively referred to as
the “Borrowers”).

 

R  E
C  I  T  A  L  S:

 

A.                                   WHEREAS,
the Borrowers and M M & E, Inc., a Nevada corporation  (collectively,
the “Original Borrowers”), the Lenders, the Agent and Heller Financial,
Inc., as syndication agent (“Syndication Agent”), for the Lenders  executed
that certain Credit Agreement dated as of July 12, 2001 (as amended from time
to time, the “Credit Agreement”) pursuant to which the Lenders have
agreed to make available to the Borrowers a revolving line of credit for loans
and letters of credit (collectively, the “Loans”);

 

B.                                     WHEREAS,
the Original Borrowers, the Lenders, the Agent and Syndication Agent executed a
First Amendment to Credit Agreement dated as of March 1, 2002 (the “First
Amendment”);

 

C.                                     WHEREAS,
the Borrowers, the Lenders and the Agent executed a Second Amendment to Credit Agreement
dated as of April 15, 2003 (the “Second Amendment”; the Credit
Agreement, as amended by the First Amendment and the Second Amendment, is
hereinafter referred to as the “Credit Agreement”); and

 

D.                                    WHEREAS,
the Borrowers have requested that the Lenders and the Agent agree to amend the
Credit Agreement again in certain respects and the Lenders and the Agent have
agreed to such request in accordance with the terms hereof.

 

NOW, THEREFORE, in consideration of the premises, and
in order to induce the Lenders  and the
Agent to amend the Credit Agreement pursuant to the terms hereof, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                       Recitals.  The foregoing Recitals are accurate and are
incorporated herein and made a part hereof.

 

2.                                       Definitions.  Unless otherwise defined herein, all
capitalized terms and phrases used in this Amendment shall have the respective
meanings ascribed to them in the Credit Agreement.

 

 

3.                                       Amendment
to Section 7.14.  Section 7.14
of the Credit Agreement entitled “Prepayment” is hereby deleted in its entirety
and the following is hereby substituted thereof:

 

“Prepayment.  Neither the Parent nor any of its domestic
Subsidiaries shall voluntarily prepay any Debt, except the Obligations in
accordance with the terms of this Agreement, unless (i) no Default or Event of
Default then exists or would exist after giving effect to any such payment,
(ii) after giving effect to such prepayment, Availability is equal to or
greater than $60,000,000, (iii) such prepayment is either (a) a voluntary,
permanent prepayment of Debt other than the Debt now or hereafter described in
the Indenture or (b) a voluntary prepayment of up to $60,000,000 in the
aggregate of the Debt now or hereafter evidenced by and described in the
Indenture, and (iv) Agent receives prior to such prepayment (A) a certification
from Borrowers, including without limitation a current Borrowing Base
Certificate and a calculation of Availability, confirming that Borrowers are in
compliance with the provisions of this Section 7.14 and (B) notice from
Borrowers notifying Agent that the contemplated prepayment is either (x) a
voluntary, permanent prepayment of Debt other than the Debt now or hereafter
evidenced by and described in the Indenture or (y) a voluntary, permanent
prepayment in the aggregate of not more than $60,000,000 of the Debt now or
hereafter evidenced by and described in the Indenture.  Notwithstanding anything to the contrary in
the first sentence of this Section 7.14, the proceeds (net of closing
costs, fees and expenses and an amount equal to the tax liabilities arising as
a result of any gain associated with such sale) of the sale of any Collateral
that is subject to a Lien, which is not prohibited by the terms hereof and is
prior to the Agent’s Lien, shall be applied first to repaying the Debt
evidenced by such Lien.”

 

4.                                       New
Borrower.  Notwithstanding anything
to the contrary in the Credit Agreement and provided no Default or Event of
Default then exists, Intermec Technologies Corporation is hereby authorized to
transfer its manufacturing and research and development assets located in the
State of Washington with a net tangible book value of approximately $50,000,000
to a new Subsidiary known as Intermec Technologies Manufacturing, LLC, a
limited liability company organized under the laws of the State of Washington,
which is either wholly owned by a Borrower or 99% owned by one of the Borrowers
and 1% owned by a Subsidiary that is not a Borrower.  Concurrently with such transfer, Intermec Technologies
Manufacturing, LLC shall execute a Joinder Agreement in the general form of
Exhibit A, attached hereto and made a part hereof, pursuant to which Intermec
Technologies Manufacturing, LLC shall assume, on a joint and several basis with
all other Borrowers, all of the obligations of the Borrowers under the Credit
Agreement and the other Loan Documents. 
In addition, Intermec Technologies Manufacturing, LLC and its parent(s)
shall execute and deliver to Agent concurrently therewith such other Loan
Documents as Agent shall deem necessary and appropriate in Agent’s reasonable
discretion to evidence and secure a pledge by its parent(s) of one hundred
percent of its ownership interest in Intermec Technologies Manufacturing, LLC
and a grant by Intermec Technologies Manufacturing, LLC of a security interest
in all of its assets to Agent for the benefit of Lenders.  Upon Intermec Technologies Manufacturing,
LLC’s execution of the Joinder Agreement and Agent’s acceptance thereof, Schedule
6.5 of the Credit Agreement shall be deemed to be updated to show Intermec
Technologies Manufacturing, LLC as a Borrower.

 

5.                                       Permitted
Acquisition.  Notwithstanding
anything to the contrary in the Credit Agreement, any Borrower is hereby
authorized to acquire all of the ownership interests in Autoscan Technology Pte
Ltd., a Singapore company, for an acquisition price of not more than

 

2

 

$10,000,000 U.S. in the aggregate, provided no Default or Event of
Default then exists.  The documentation
relating to this acquisition shall be acceptable in all respects to Agent in
Agent’s reasonable discretion. 
Concurrently with the closing of the acquisition, such Borrower shall
pledge to Agent for the benefit of Lenders, on terms and conditions and subject
to documentation reasonably acceptable to Agent, sixty five percent of its
ownership interest in Autoscan Technology Pte Ltd.  In addition and notwithstanding anything to the contrary in the
Credit Agreement, the Agent and the Lenders hereby authorize any Borrower to
acquire or create additional foreign or domestic Subsidiaries in connection
with stock or asset purchases provided: (i) no Default or Event of Default
exists prior to and after the closing of any such acquisition; (ii) the
consideration paid for all such acquisitions does not exceed $15,000,000 in the
aggregate; (iii) domestic Subsidiaries so acquired will be added as Borrowers
to the Credit Agreement pursuant to a Joinder Agreement in the general form of
Exhibit A attached hereto and otherwise pursuant to documentation in form and
content reasonably acceptable to Agent; (iv) any domestic Subsidiary so
acquired shall grant to Agent for the benefit of Lenders a security interest in
all of its assets and the applicable Borrower shall pledge all of its ownership
interests in such domestic Subsidiary to Agent for the benefit of Lenders
pursuant to documentation reasonably acceptable in all respects to Agent; and
(v) the applicable Borrower shall pledge sixty five percent of its ownership
interest in any foreign Subsidiary so acquired to Agent for the benefit of
Lenders on terms and conditions and pursuant to documentation reasonably
acceptable to Agent.  Borrowers are
hereby authorized and required to update Schedule 6.5 of the Credit
Agreement from time to time to reflect the existence of Subsidiaries created or
acquired pursuant to the provisions of this paragraph or other applicable
provisions of the Credit Agreement.

 

6.                                       Permitted
Recapitalization of Honsberg Lamb Sonderwerkzeugmachinen GmbH.  At the request of Borrowers and
notwithstanding anything to the contrary in the Credit Agreement, Agent and the
Lenders hereby agree that Parent or one of the other Borrowers may contribute
up to $20,000,000 U.S. in cash as additional equity into Honsberg Lamb
Sonderwerkzeugmachinen GmbH (“Honsberg”).  The Borrowers agree that Honsberg will use, and Borrowers will
cause Honsberg to use, the full amount of the additional equity to pay down
existing intercompany loans owed to Honsberg from foreign Affiliates of
Borrowers.  Furthermore, Borrowers
covenant that Borrowers will cause the foreign Affiliates to use the proceeds
from the repayment of the referenced loans to pay down intercompany payables
owed by such foreign Affiliates to one or more of the Borrowers in the full
amount of the equity contributed to Honsberg. 
Borrowers covenant and agree that the series of transactions described
in this Paragraph 6 will be completed no later than 30 days from the date that
any additional equity is first infused into Honsberg.  Concurrently with the completion of each stage of the referenced
series of transactions, Borrowers shall provide Agent for the benefit of
Lenders with (i) written evidence reasonably acceptable to Agent that such
stage has been completed as permitted hereunder and (ii) following completion
of the last stage of the series of transactions, written evidence reasonably
acceptable to Agent that the transactions were completed within the time period
set forth above and that accounts payable that the foreign Affiliates owed to
Borrowers have been permanently reduced by the full amount of the equity
infused into Honsberg.

 

7.                                       Amendment
to Sections 6.5 and 7.28 and Intermec International Inc.  The words “and Intermec International Inc.,
a Washington corporation” are hereby added after the words “Except for Factory
Power” in the second sentence of Section 6.5 of the Credit
Agreement;  the word “tangible” is
hereby inserted in Section 7.28 of the Credit Agreement after the word
“net” and

 

3

 

before the word “tangible” to correct a scrivener’s error.  At the request of Borrowers and
notwithstanding anything to the contrary in the Credit Agreement, Intermec
International Inc., a Washington corporation and a wholly-owned subsidiary of
Parent, shall not be required to become an additional Borrower under the Credit
Agreement unless and until its assets at any time measured at net tangible book
value exceed $10,000,000.  The foregoing
agreement on the part of the Lenders shall not be deemed to limit or restrict
the provisions of Sections 6.5 or 7.28, as modified hereinabove,
of the Credit Agreement with respect to any other Subsidiary (other than
Factory Power).

 

8.                                       Permitted
Stock Contribution and Related Transactions.  At Borrower’s request and notwithstanding anything to the
contrary in the Credit Agreement, the Agent and the Lenders hereby agree that
UNOVA UK Limited may contribute the stock of Cincinnati Machine UK Holdings
Limited, its wholly-owned subsidiary, to Cincinnati Machine Holdings UK
Limited, provided Cincinnati Machine UK Holdings Limited is then liquidated or
merged into Cincinnati Machine Holdings UK Limited.  In addition, Intermec International Inc. is hereby authorized to
permit or consummate a transaction in which the stock or assets of Intermec
Holdings B.V., Intermec Printer AB or Intermec Technologies AB are merged up
and into Intermec International Inc. or another Subsidiary of Intermec
International Inc., at the discretion of Intermec International Inc., through
liquidation or merger and on terms and subject to documentation reasonably
acceptable to Agent.

 

9.                                       Amendment
to Section 7.18.  Section 7.18
of the Credit Agreement entitled “Liens” is hereby deleted in its entirety and
the following is hereby substituted thereof:

 

“Liens.  Neither the Parent nor any of the other
Borrowers shall create, incur, assume, or permit to exist any Lien on any
property now owned or hereafter acquired by any of them, except (a) Permitted
Liens, provided that the amount of cash and cash equivalents subject to Liens
to third parties on the Closing Date relating to Liens identified in clause
(i) of the definition of “Permitted Liens” shall not exceed in the
aggregate $10,000,000 and the amount thereof after the Closing Date shall not
at any time exceed $20,000,000 in the aggregate and the obligations secured by
such Liens shall be deemed either to be permitted Debt of the Borrowers listed
on Schedule 6.9 hereof or permitted Guaranties under Section 7.13
hereof, (b) Liens, if any, in effect as of the Closing Date and described in Schedule
6.9 securing Debt described in Schedule 6.9 and any permitted
refinancings, renewals or extensions of such Debt, (c) Liens securing Capital
Leases and purchase money Debt permitted in Section 7.13, (d) other
Liens securing liabilities in an aggregate amount not to exceed $5,000,000 at
any time, and (e) Liens on property acquired by Borrowers that is subject to
such Liens at the time of acquisition, provided the Debt secured by such Liens
constitutes Permitted Debt or such Liens are otherwise permitted under Section
7.18(c) or 7.18(d).”

 

10.                                 Subsidiary
Name Change.  Agent and the Lenders
hereby acknowledge that Borrowers have advised them that Intermec Technologies
S.A. has changed its name to Intermec Technologies S.A.S. and Intermec Scanner
Technologies Center S.A. has changed its name to Intermec Scanner Technologies
Center S.A.S.  To the extent that Agent
is holding a pledge or is entitled to receive a pledge of any portion of the
stock or other ownership interest of either or both of these two entities, at
Agent’s request and at Borrowers’ expense, Borrowers will provide Agent with
appropriate documents or amendments to the pledges reflecting these name
changes.

 

4

 

11.                                 Acknowledgment
of the Borrowers.  Each Borrower
hereby acknowledges and agrees that: 
(a) such Borrower has no defense, offset or counterclaim with respect to
the payment of any sum owed to the Lenders or the Agent under the Loan
Documents, or with respect to the performance or observance of any warranty or
covenant contained in the Credit Agreement or any of the other Loan Documents;
and (b) the Lenders and the Agent have performed all obligations and duties
owed to such Borrower through the date hereof.

 

12.                                 Representations
and Warranties of the Borrowers.  To
induce the Lenders and the Agent to amend the Credit Agreement, each Borrower
represents and warrants to the Lenders and the Agent that:

 

(a)                                  Compliance
with Credit Agreement.  On the date
hereof, such Borrower is in compliance with all of the terms and provisions set
forth in the Credit Agreement (as modified by this Amendment) and no Default or
Event of Default has occurred and is continuing;

 

(b)                                 Representations
and Warranties.  On the date hereof
after giving effect to this Amendment, the representations and warranties set
forth in Article 6 of the Credit Agreement are true and correct with the
same effect as though such representations and warranties had been made on the
date hereof, except to the extent that such representations and warranties
expressly relate to an earlier date;

 

(c)                                  Corporate
Authority.  Such Borrower has full
power and authority to consummate this Amendment.  No consent or approval of stockholders or of any public authority
or regulatory body which has not been obtained is required as a condition to
the validity or enforceability of this Amendment;

 

(d)                                 Amendment
as Binding Agreement.  This
Amendment and the Credit Agreement (as modified by this Amendment) constitute
the valid and legally binding obligations of such Borrower fully enforceable
against each Borrower in accordance with their respective terms (subject to the
effects of bankruptcy, insolvency, reorganization, moratoriums or other similar
laws affecting the rights and remedies of creditors generally); and

 

(e)                                  No
Conflicting Agreements.  The
execution and performance by such Borrower of this Amendment, and the borrowing
by the Borrowers under the Credit Agreement (as modified by this Amendment),
will not (i) to the best knowledge of such Borrower, violate any provision of
law, any order of any court or other agency of government, or the Articles of
Incorporation or Bylaws of such Borrower; or (ii) violate any material
indenture, contract, agreement or other instrument to which such Borrower is a
party, or by which any of its property is bound, or be in conflict with, result
in a breach of or constitute (with due notice and or lapse of time) a default
under, any such indenture, contract, agreement or other instrument; or (iii)
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of such Borrower, other
than in favor of the Lenders and the Agent.

 

(f)                                    The
Term Loans have been repaid in full, all obligations owed by the Borrowers to
the Term Debt Lender have been repaid in full other than contingent obligations
which survive such repayment and the terms of the documents governing the Term
Loans and as the date hereof all Term Debt Lender’s Liens have been fully and
finally released and extinguished other than 

 

5

 

terminations, filings and recordings that have been submitted to
appropriate authorities and are currently still being processed in connection
therewith.

 

13.                                 Effectiveness
of this Amendment. The amendments set forth above shall become effective as
of the date of this Amendment only upon the satisfaction of the following
conditions precedent:

 

Receipt of Documents.  The Agent shall have received all of the
following, each (in the case of documents) duly executed and dated the date of
execution hereof, in form and substance satisfactory to the Agent:

 

(i)                                     this
Amendment duly executed by the Agent, the Borrowers and Required Lenders;

 

(ii)                                  an
opinion of the Borrowers’ general counsel or outside counsel, or a combination
of both, in form and substance acceptable to the Agent;

 

(iii)                               true, complete and
accurate copies, duly certified by an officer of the appropriate Borrower, of
all documents evidencing any necessary corporate action, resolutions, consents
and governmental approvals, if any, required for the execution, delivery and
performance of this Amendment and any related document, instrument or agreement
executed or delivered in connection therewith by such Borrower; and

 

(iv)                              such
other instruments, documents, waivers and consents as the Lenders may
reasonably request prior to the execution by the Lenders of this Amendment.

 

14.                                 Effect
on Credit Agreement.  Except as
specifically amended hereby, the terms and provisions of the Credit Agreement
and the other Loan Documents are in all other respects ratified and confirmed
and remain in full force and effect.  No
reference to this Amendment need be made in any notice, writing or other
communication relating to the Credit Agreement and the other Loan Documents,
any such reference to the Credit Agreement and the other Loan Documents to be
deemed a reference thereto as respectively amended by this Amendment.  All references to the Credit Agreement and
the other Loan Documents in any document, instrument or agreement executed in
connection with the Credit Agreement and the other Loan Documents shall be
deemed to refer to the Credit Agreement and the other Loan Documents as
respectively amended hereby.

 

15.                                 Fees
and Expenses.  The Borrowers hereby
agree to pay all reasonable out-of-pocket expenses incurred by the Agent in
connection with the preparation, negotiation and consummation of this
Amendment, and all other documents related hereto, including, without
limitation, the reasonable fees and expenses of the Lenders’ counsel.

 

16.                                 Successors.  This Amendment shall be binding upon and
inure to the benefit of the Borrowers, the Lenders, the Agent and their
respective successors and assigns.

 

17.                                 Governing
Law.  This Amendment shall be
construed in accordance with and governed by the laws of the State of New York,
without regard to the conflict of laws principles thereof.

 

6

 

18.                                 Counterparts.  This Amendment may be executed in the
original or by telecopy in any number of counterparts, each of which shall be
deemed original and all of which taken together shall constitute one and the
same Amendment.

 

(SIGNATURE PAGES FOLLOW)

 

7

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the date first above written.

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  UNOVA, INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Cohen

  
	
   

  	
  Name:

  	
  Kenneth L. Cohen

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
  UNOVA INDUSTRIAL AUTOMATION

  SYSTEMS, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Cohen

  
	
   

  	
  Name:

  	
  Kenneth L. Cohen 

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
  INTERMEC TECHNOLOGIES

  CORPORATION, a Washington corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Cohen 

  
	
   

  	
  Name:

  	
  Kenneth L. Cohen 

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
  R & B MACHINE TOOL COMPANY,

  a Michigan corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Cohen 

  
	
   

  	
  Name:

  	
  Kenneth L. Cohen 

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
  UNOVA JSM, Inc., formerly known as

  J.S. MCNAMARA COMPANY, a Michigan

  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Cohen 

  
	
   

  	
  Name:

  	
  Kenneth L. Cohen 

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  INTERMEC IP CORP.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Cohen 

  
	
   

  	
  Name:

  	
  Kenneth L. Cohen 

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  UNOVA IP CORP.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Cohen 

  
	
   

  	
  Name:

  	
  Kenneth L. Cohen 

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
						

 

 

	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott S. Ward

  
	
   

  	
  Name:

  	
  Scott S. Ward

  
	
   

  	
  Title:

  	
  V.P

  
					

 

 

	
   

  	
  LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott S. Ward

  
	
   

  	
  Name:

  	
  Scott S. Ward

  
	
   

  	
  Title:

  	
  V.P

  
								

 

 

	
   

  	
  HELLER FINANCIAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Howard Bailey

  
	
   

  	
  Name:

  	
  Howard Bailey

  
	
   

  	
  Title:

  	
  Duly Authorized
  Signatory

  
					

 

 

	
   

  	
  THE CIT GROUP/BUSINESS CREDIT,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald Caskey

  
	
   

  	
  Name:

  	
  Donald Caskey

  
	
   

  	
  Title:

  	
  V.P.

  
					

 

 

	
   

  	
  CONGRESS FINANCIAL

  CORPORATION (WESTERN)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Truax

  
	
   

  	
  Name:

  	
  Paul Truax

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

	
   

  	
  GMAC COMMERCIAL FINANCE LLC

  Successor to

  GMAC Business Credit, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Connor

  
	
   

  	
  Name:

  	
  Michael O’Connor

  
	
   

  	
  Title:

  	
  Vice President

  
						

 

 

EXHIBIT A

 

JOINDER
AGREEMENT

 

This Joinder Agreement (the “Joinder”) is made as of
the
             
day of
                     ,
200   by and between the undersigned
                               ,
a
                                  
(“Subsidiary”) and a subsidiary of
                              ,
a                       
corporation, and Bank of America, N.A., a national banking association, as
agent (“Agent”) for itself and for various other lenders (collectively, the
“Lenders”) to the Credit Agreement (as hereinafter defined).  All capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed thereto in the
Credit Agreement.

 

WHEREAS, UNOVA, Inc., a Delaware corporation (the “Parent”),
UNOVA Industrial Automation Systems, Inc., a Delaware corporation, Intermec
Technologies Corporation, a Washington corporation, R & B Machine
Tool Company, a Michigan corporation, J.S. McNamara Company, a Michigan
corporation,  Intermec IP Corp., a
Delaware corporation, and UNOVA IP Corp., a Delaware corporation (the Parent
and each such corporation is individually hereinafter referred to as a “Borrower”
and the Parent together with such corporations and with any other entities that
have assumed all of the liabilities and obligations of such corporations under
the Credit Agreement are hereinafter collectively referred to as, the “Borrowers”)
and M M & E, Inc., a Nevada corporation, the Lenders, Agent
and Heller Financial, Inc., as syndication agent, for the Lenders  executed
that certain Credit Agreement dated as of July 12, 2001 (as amended from time
to time, the “Credit Agreement”) pursuant to which the Lenders have
agreed to make available to the Borrowers a revolving line of credit for loans
and letters of credit (collectively, the “Loans”);

 

WHEREAS, Subsidiary has been created or acquired by
the Parent or one of the other Borrowers and wishes to request and receive
Loans under the Credit Agreement as set forth therein and, as a result of the
foregoing and pursuant to the definition of “Borrowers” in the Credit
Agreement, Subsidiary is either required or has requested to become a Borrower
and a joint and several co-obligor with the Borrowers under the Credit
Agreement and the other Loan Documents; and

 

WHEREAS, Subsidiary has agreed to execute this Joinder
and to become a Borrower under the Credit Agreement.

 

NOW, THEREFORE, for and in consideration of the
premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, agree as follows:

 

1.                                       Joinder
in Credit Agreement.  Subsidiary
hereby assumes, and agrees to perform, for the benefit of Lenders, all of the
Obligations of a Borrower under the Credit Agreement and the other Loan
Documents, as direct and primary obligations of Subsidiary (including any such
Obligations that may have accrued prior to the date hereof or that are
outstanding as of the date hereof), including, without limitation, its
Obligations with respect to the Loans, and Subsidiary agrees that it shall
comply with and be fully bound by the terms of the Credit Agreement and the
other Loan Documents as if it had been a signatory thereto as of the original
date thereof;

 

 

provided that the representations and warranties made by Subsidiary
thereunder shall be deemed true and correct only as of and after the date of
this Joinder. As a Borrower under the Credit Agreement, Subsidiary shall
execute all Notes, if any, required by Agent for the benefit of Lenders for any
Loans made, assumed or to be made, from time to time, by Lenders to such
Subsidiary, and Subsidiary agrees to pay all Obligations owing by it to
Lenders, including all payments of principal, interest and other charges due
from time to time with respect to the Loans made, assumed or available to such
Subsidiary. Upon acceptance of this Joinder by Agent on behalf of the Lenders,
Subsidiary shall be entitled to all of the benefits of a Borrower under the
Credit Agreement and the other Loan Documents.

 

2.                                       Unconditional
Joinder.  Subsidiary acknowledges
that such Subsidiary’s Obligations as a party to this Joinder are unconditional
and are not subject to the execution of one or more Joinders by other
subsidiaries of Parent or the other Borrower’s or any other parties.

 

3.                                       Grant
of a Security Interest.  Subsidiary
shall concurrently herewith or, as soon hereafter as Agent shall agree, grant a
security interest to Agent, for the benefit of Agent and the Lenders, in all of
its property and assets, pursuant to such documentation as Agent and its
counsel shall reasonably deem necessary or appropriate to perfect in favor of
Agent, for the benefit of Agent and Lenders, a first priority security interest
in all such property or assets, except for such Permitted Liens as Agent shall
approve in its reasonable discretion.

 

4.                                       Reliance.  Agent and Lenders shall be entitled to rely
on this Joinder as evidence that Subsidiary has joined as a Borrower under the
Credit Agreement and the other Loan Documents and is fully obligated thereunder
as a Borrower.

 

5.                                       Incorporation
by Reference.  All terms and
conditions of the Credit Agreement, the other Loan Documents, including, but
not limited to, all representations, warranties, covenants, indemnities,
guaranties and other obligations of Borrowers, waivers and choice of law
provisions thereunder are hereby incorporated by reference in this Joinder as
if set forth herein in full.

 

6.                                       Schedule
6.5  Upon the execution of the
Joinder, Schedule 6.5 of the Credit Agreement shall automatically be
deemed updated to include Subsidiary.

 

7.                                       Counterparts.  This Joinder may be executed in the original
or by telecopy in any number of counterparts, each of which shall be deemed
original and all of which taken together shall constitute one and the same
Joinder.

 

[SIGNATURE
PAGE FOLLOWS]

 

 

IN
WITNESS WHEREOF, the parties hereto have executed and
delivered this Joinder Agreement as of the date set forth above.

 

	
   

  	
  SUBSIDIARY:

  
	
   

  	
   

  
	
   

  	
                                               ,
  a                           

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as Agent as

  aforesaid

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:EXHIBIT 4.2

 

9th
February 2004

 

The
Directors

UNOVA
U.K. Limited

Cincinnati
Machine U.K. Limited

Intermec
Technologies U.K. Limited

UNOVA,
Inc.

2nd
Floor Sovereign House

Vastern
Road

Reading

RG1
8BT

 

 

Dear
Sirs

 

Barclays
Bank PLC (the “Bank”) is pleased to offer to provide in aggregate short term
facilities of up to £15,000,000 (fifteen million pounds sterling) to UNOVA U.K.
Limited, Cincinnati Machine U.K. Limited and Intermec Technologies U.K. Limited
(together the “Borrowers” and each a “Borrower”) subject to the terms and
conditions set out below.

 

Capitalised
words used below shall have the meanings given to them in clause 17 and
elsewhere in this Facility Letter.

 

The
Bank is also pleased to offer to provide the Borrowers with a spot and forward
exchange transactions facility of up to £1,000,000 (the “SFET”). Utilisation
under the SFET shall be in accordance with Schedule D attached hereto.

 

In
addition, the Bank is prepared to provide the Borrowers with the following
facilities (documented separately):

 

(a)                                  Company Barclaycard facility of up to £268,500;

 

(b)                                 BACS facility of up to £5,380,000; and

 

(c)                                  Business Master facility of up to £2,570,000,

 

The
Schedules attached hereto form part of the terms and conditions of this
Facility Letter.

 

Subject
to satisfaction of the conditions set out in clause 18 below, the Facility and
the SFET will be available for utilisation by the Borrowers, subject to the
following terms and conditions:

 

1.                                       Options Available Within and Utilisation of the
Facility

 

1.1                                 The Facility may be utilised by way of the
following options and in accordance with the provisions of the Schedules
related thereto:

 

Sterling
and/or Currency Money Market Loan (the “Sterling/Currency MML”) (see
Schedule A) and/or

 

Sterling
Overdraft (the “Sterling Overdraft”) (see Schedule B) and/or

 

1

 

Bonds,
Guarantees and Indemnities (the “Ancillary Facility”) (see Schedule C).

 

Within
the Facility, the aggregate of the liabilities due, owing or incurred thereunder
shall not at any time exceed £15,000,000 (or its currency equivalent).

 

Within
the Facility, the aggregate of liabilities incurred or due and owing under the
Sterling Overdraft shall not at any time exceed £1,000,000 or the unutilized
portion of the Facility, which ever is less.

 

Within
the Facility, the aggregate of the bonds, guarantees and indemnities issued
under the Ancillary Facility shall not at any time exceed £10,500,000 (or its
currency equivalent).

 

1.2                                 The sterling equivalent of the currency or
currencies utilised or available to be utilised under the Facility and the SFET
may be calculated by the Bank at any time by reference to the Bank’s spot rate
of exchange in the London Foreign Exchange Market for the sale of the relevant
currency or currencies for sterling.

 

2.                                       Availability

 

If
on the day of utilisation:

 

(a)                                  no Event of Default or Potential Event of Default
has occurred and is continuing; and

 

(b)                                 the representations and warranties detailed
within clause 9 below are true on such day, then the Facility is available for
utilisation until the second anniversary of the date of acceptance of  this letter (the “Expiry Date”) and no
liability or liabilities may extend beyond the Expiry Date.

 

Shortly
before the first anniversary of the acceptance of this offer and annually
thereafter the Bank agrees to consider in its absolute discretion an extension
of the Expiry Date by a further year if requested in writing by the
Borrowers.  The Bank’s agreement to any
extension and/or change in any terms and conditions will be notified in writing
to the Borrowers.

 

3.                                       Security and Guarantees

 

3.1                                 All indebtedness owing by the Borrowers to the
Bank is to be (i) guaranteed by the cross guarantees which are to have been
executed in the Bank’s standard form (with such amendments thereto as the Bank
and the Borrowers may agree) by each Borrower and UNOVA, Inc. (together the
“Guarantors” and each a “Guarantor”) and (ii) secured by (a) the debentures
which have already been executed in the Bank’s standard form (with such
amendments thereto as the Bank and the Borrowers may agree) by each Borrower
and (b) legal charges over the Properties which have already been executed in
the Bank’s standard form (with such amendments thereto as the Bank and the
Borrowers may agree) by UNOVA U.K. Limited and Cincinnati Machine U.K. Limited.

 

2

 

3.2                                 The Bank may from time to time require the
Properties and the Trade Debtors to be professionally valued.  The Borrower will pay the costs of one such
valuation per Property per annum together with the costs of any such valuation
of the Properties and the Trade Debtors carried out where the Bank suspects
that a Potential Event of Default has occurred and is continuing.

 

4.                                       Mandatory Prepayment

 

4.1                                 Each Borrower and UNOVA, Inc. undertakes that
within 3 Business Days of receipt of the Disposal Proceeds, it shall (a) apply,
or procure the application, in repayment of outstanding liabilities under the
Sterling/Currency MML, an amount equal to the amount necessary to ensure
compliance with the covenant set out at clause 10.2(a) and (b) reduce and
cancel the Sterling/Currency MML by an amount equal to the amount necessary to
ensure compliance with the covenant set out in clause 10.2(a).

 

4.2                                 Following a cancellation of the Sterling/Currency
MML by the amount referred to in clause 4.1, the Borrowers may request that a
portion of the cancelled amount of the Sterling/Currency MML become available
for redrawing. Upon receipt of such request the Bank will enter into
discussions with the Borrowers and may in its absolute discretion agree that
such portion will become available for redrawing.

 

5.                                       Cancellation

 

Any
undrawn part of the Facility may be cancelled by the Borrowers in minimum
amounts of £500,000 and multiples of £50,000 subject to the Borrowers:

 

(a)                                  giving the Bank not less than seven Business
Days’ notice in writing (such notice, once given, shall be irrevocable); and

 

(b)                                 paying to the Bank a cancellation fee of 0.5% of
the amounts cancelled together with any accrued non-utilisation fee thereon if
such cancellation arises as a result of the Borrowers obtaining a replacement
facility for this Facility from a bank or financial institution which is not
part of the group comprising the Bank and its subsidiary undertakings.

 

The
non_utilisation fee will then cease to accrue on such cancelled amounts.  Amounts which are cancelled will no longer
be available for utilisation.

 

6.                                       Change of Circumstances

 

6.1                                 In the event of:

 

(a)                                  any change in applicable law, regulation or
practice resulting in the Bank being subjected to any new or additional tax,
levy, duty, charge, penalty, deduction or withholding of any nature (other than
tax on the Bank’s overall net profits and gains), or

 

(b)           any existing requirements of any
central bank, governmental, fiscal, monetary, regulatory or other authority in
any applicable

 

3

 

jurisdiction
affecting the conduct of the Bank’s business being changed or any new
requirements being imposed (whether or not having the force of law), including,
without limitation, any resulting from the introduction or operation of the
euro and a request or requirement which affects the manner in which the Bank
allocates capital resources to its commitments, including its obligations under
this Facility Letter,

 

and
the result is in the sole opinion of the Bank (directly or indirectly) to
increase the cost to the Bank of funding, making available or maintaining the
Facility or to reduce the amount of any payment received or receivable by the
Bank or to reduce the effective return to the Bank, then the Borrowers shall
pay to the Bank on demand such sum as may be certified in writing by the Bank
to the Borrowers as necessary to compensate the Bank for such increased cost or
such reduction.

 

6.2                                 The Borrowers may, at any time within six weeks
after the date of certification from the Bank under clause 6.1, prepay all
amounts outstanding under the Facility without penalty and without incurring
any cancellation fee (subject to clause 16.3(iv)), by giving not less than five
Business Days’ irrevocable notice to the Bank to that effect specifying the
prepayment date.  The Borrowers shall be
obliged to prepay to the Bank all amounts outstanding under the Facility on
such date, together with all interest accrued to the date of actual payment and
all other sums due to the Bank hereunder. 
Unless prepayment is made within such period of six weeks, an amount
equal to such increased cost or such reduction will be payable by the Borrowers
under the preceding sub-clause from the date of such certification.

 

6.3                                 Reference to the cost of funds/sterling deposits
and to the London Interbank Market shall, if such cost ceases to be market
practice/ordinarily used by the Bank for the purpose of calculating interest on
facilities of this kind or such market no longer exists in comparable form, be
construed as meaning the appropriate and reasonable alternative cost or source
of funds as the case may be, as determined by the Bank.

 

7.                                       Fees

 

7.1                                 A non-utilisation fee at the rate of 0.5% per
annum calculated on a daily basis from the date of the Borrowers’ acceptance of
this offer on the undrawn portion of the Facility, will be payable to the Bank
quarterly in arrears and on the Expiry Date.

 

7.2                                 A renewal fee at the rate of 0.25% on the
available amount of the Facility will be payable by the Borrowers to the Bank
annually in advance.

 

7.3                                 Any fee referred to in clauses 7.1 or 7.2 is
exclusive of any VAT which might be chargeable in connection with that
fee.  If any VAT is so chargeable, it
shall be paid by the Borrowers to the Bank at the same time as it pays the
relevant fee.

 

8.                                       Legal, Valuation and other Expenses

 

4

 

Any
legal and valuation fees and expenses (including documentation fees) (including
any applicable VAT) and other out of pocket expenses (including any applicable
VAT) incurred by the Bank in connection with the preparation, execution and
implementation of this Facility Letter (and the documents referred to herein)
and the enforcement and preservation by the Bank of its rights under this
Facility Letter or such documents will be reimbursed by the Borrowers on demand
by the Bank on a full indemnity basis (whether or not the Facility is drawn
down) and may be debited to the Borrowers’ account with the Bank without
further authority from the Borrowers. 
Other than in connection with enforcement or preservation, the Bank will
consult with the Borrowers prior to incurring such fees and expenses and shall
provide estimates to the Borrowers.

 

9.                                       Representations and Warranties

 

9.1                                 By accepting this Facility Letter, each Borrower
makes the representations and warranties contained in (a) to (g) below, and
each Guarantor makes the representations and warranties contained in (h) below:

 

(a)                                  it has the necessary corporate power and
authority to borrow the full amount of the Facility on the terms and conditions
set out in this Facility Letter and to perform and observe its obligations under
this Facility Letter and it has obtained all necessary approvals,
authorisations, consents or clearances of all governmental, judicial or
regulatory bodies and authorities required in connection with the execution,
delivery and performance hereof and the carrying out of the transactions
contemplated in this Facility Letter;

 

(b)                                 there is no law, decree or similar enactment
binding on it and no provision in any corporate document, mortgage, indenture,
trust deed, contract or agreement binding on it or affecting its property which
would conflict with or prevent it from borrowing under the Facility, or which
would prevent it from observing any of its obligations in this Facility Letter;

 

(c)                                  neither its acceptance of this offer nor the
performance by it of its obligations or the exercise of any of its rights under
the terms of this Facility Letter will result in the existence of, or oblige
such Borrower to create, any security interest in favour of any third party
(other than the Bank) over the whole or any part of the undertaking or assets,
present or future, of such Borrower and there are no subsisting mortgages,
charges or other encumbrances affecting any of the undertaking, property assets
or revenues of such Borrower other than those detailed within clause 10.1(a)
below;

 

(d)                                 it is not in breach of any of the limits or
restrictions or obligations imposed by any other agreement or instrument and no
Event of Default has occurred and is continuing;

 

(e)                                  to the best of its knowledge, information and
belief, having made all reasonable enquiries, there are no legal or other
proceedings pending or threatened before any court, tribunal, commission or
other regulatory authority involving it which are likely to be adversely
determined against it and which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;

 

5

 

(f)                                    all factual or financial information provided by
or on its behalf to the Bank for the purpose of obtaining the Facility was
true, complete and accurate in all material respects at the time it was
provided and all forecasts and opinions provided to the Bank for such purpose
were honestly made on reasonable grounds after careful enquiry by such Borrower
and the most recent accounts provided by the Borrower pursuant to clause
11.1(a) below were prepared in accordance with the laws of its jurisdiction of
incorporation and give a true and fair view of the state of its affairs and
disclose all liabilities and unrealised or expected losses required to be
disclosed under generally accepted accounting practices;

 

(g)                                 no event has occurred between the date to which
its latest audited consolidated accounts available to the Bank were prepared
and the date on which this warranty is given or deemed to be given which could
reasonably be expected to have a Material Adverse Effect; and

 

(h)                                 each Guarantor has the necessary corporate power
and authority to execute and observe its respective obligations under the
guarantees and the security referred to in clause 3 above which constitute that
Guarantor’s valid and binding obligations and no Guarantor is or would be in
breach of any enactment or contractual document of whatsoever nature by reason
of such execution and observance and the representations set out in (d), (e),
(f) and (g) of this clause 9.1 would remain true if reference therein to each
Borrower included reference to each Guarantor.

 

9.2                                 Each Borrower and Guarantor shall be deemed to
repeat the representations and warranties contained in this clause 9 on the day
of each utilisation (and in any event at intervals not exceeding six months) by
reference to the circumstances then existing.

 

10.                                 Covenants

 

10.1                           By accepting this Facility Letter, each Borrower
undertakes for so long as any liability remains outstanding hereunder that,
save with the prior written consent of the Bank:

 

(a)                                  no Borrower nor any UK Subsidiary will create or
agree to create or permit to subsist (other than to the Bank) any Encumbrance
on the whole or any part of its undertaking, property, assets or revenues,
present or future, including uncalled capital, save that this restriction will
not be breached by any of the following:

 

(i)                                     the continuance of existing Encumbrances full
details of which have been disclosed to the Bank in writing prior to the date
of this Facility Letter, provided that the maximum principal amount outstanding
and secured by any such Encumbrance is not at any time increased; or

 

(ii)                                  the acquisition, after the date of this Facility
Letter, of companies and/or properties having or being subject to existing
secured borrowings, provided that the maximum principal amount for which such
Encumbrance was originally given is not at any time increased and such
Encumbrance is discharged or released within 180 days after the date of such
acquisition; or

 

6

 

(iii)                               any Encumbrance over plant, machinery or
equipment granted solely in connection with financing or operating leasing
arrangements permitted under paragraph (c) of the definition of Permitted
Disposal;

 

(b)                                 no Borrower nor any UK Subsidiary will give any
guarantee, bond or indemnity, or make available any new loan or financial
accommodation to any person or increase the amount or extend the duration or
otherwise alter in any material respect the terms of any such existing loans or
financial accommodation, except that this clause 10.1(b) shall not apply to any
Permitted Loan;

 

(c)                                  no Borrower nor any UK Subsidiary will sell,
transfer or otherwise dispose of the whole or any part of its undertaking,
property, assets or revenues, whether by a single transaction or a number of
transactions relating to assets the value of which, when aggregated with the
value of all other sales, transfers or disposals of assets made by each
Borrower and its UK Subsidiaries in the same accounting reference period, would
exceed £3,000,000, calculated at the higher of market value or net book value
(such aggregate figure being proportionately reduced or increased for any such
period which is less than 360 days or more than 370 days), except that this
clause 10.1(c) shall not apply to any Permitted Disposal;

 

(d)                                 no Borrower nor any UK Subsidiary will make any
material investment in shares, securities or debentures (whether secured or unsecured)
of a company or in a business.  For the
purpose of this clause 10.1(d) “material” shall mean an amount in excess of
£2,000,000 (gross cost), or the equivalent in other currencies, in the case of
a single transaction or an amount which, when aggregated with all other
investments made by each Borrower and its UK Subsidiaries in the same
accounting reference period, exceeds £2,000,000 (gross cost), or the equivalent
in other currencies (such figure being proportionately reduced or increased for
any such period which is less than 360 days or more than 370 days);

 

(e)                                  each Borrower shall maintain and procure that
each of its Subsidiaries maintains adequate insurance on and in relation to its
business and assets with reputable underwriters or insurance companies which
are financially sound and having a rating of at least A+ or better by Best
Rating Guide against such risks to the extent usual for persons carrying on a
business such as that carried on by such Borrower or (as the case may be) such
Subsidiary;

 

(f)                                    each Borrower will forthwith, upon becoming aware
of it, inform the Bank of any litigation, arbitration or administration
proceeding pending or, to the best of its knowledge, information and belief,
threatened against any Borrower or any Subsidiary which could reasonably be
expected to have a Material Adverse Effect;

 

(g)                                 each Borrower will forthwith, upon becoming aware
of it, inform the Bank of the occurrence of any Event of Default or Potential
Event of Default and also inform the Bank of any steps taken or proposed to be
taken to remedy or mitigate the effect of any such event;

 

(h)           no Borrower will declare or pay any
dividend or make any distribution to its shareholders in respect of any
accounting reference

 

7

 

period
without the Bank’s prior written consent, which shall not be unreasonably
withheld or delayed if (i) at the times that such dividend is both declared and
paid, or such distribution is made, there are no outstanding drawings under the
Sterling/Currency MML and (ii) the Operating Cashflow of such Borrower is
positive for such accounting reference period;

 

(i)                                     (other than Permitted Loans) no Borrower will
make any loans or advances to, or enter into any management, consultancy, sale
or other agreement of whatever kind with its Parent or any other Subsidiary of
its Parent except on arms’ length terms for good commercial reasons or in the
ordinary course of business and no material amendment shall be made to any such
loan, advance or agreement existing at the date hereof which would cause such
loan, advance or agreement to infringe this clause 10.1(i);

 

(j)                                     each Borrower’s obligations under this Facility
Letter shall at all times rank at least pari passu with all other present and
future unsecured and unsubordinated indebtedness of such Borrower, except for
any liabilities which would be accorded preferential ranking by statute in a
winding_up;

 

(k)                                  the claims of the Bank against each Borrower
under this Facility Letter shall at all times rank prior to the claims of all
other Borrowers and Subsidiaries against such Borrower; and

 

(l)                                     no Borrower will make, and or procure that any of
its Subsidiaries will make, any material change in the scope or nature of its
business which would constitute a material change in the business of the
Borrowers taken as a whole.

 

10.2                           By accepting this Facility Letter, each Borrower
undertakes for so long as any liability remains outstanding hereunder that,
save with the prior written consent of the Bank, the amount of outstanding
drawings hereunder shall not at any time exceed:

 

(a)                                  70% of the value of the Properties; or

 

(b)                                 66% of the face value of the Eligible Trade
Debtors of Landis Lund (a division of UNOVA U.K. Limited); or

 

(c)                                  66% of the face value of the Eligible Trade
Debtors of Lamb (a division of UNOVA U.K. Limited); or

 

(d)                                 66% of the face value of the Eligible Trade
Debtors of Cincinnati Machine U.K. Limited to be determined by the Bank; or

 

(e)                                  66% of the face value of the Eligible Trade
Debtors of Intermec Technologies U.K. Limited to be determined by the Bank.

 

In
the case of the Properties such value shall be determined from time to time on
an open market value basis by professional valuers acceptable to the Bank.

 

11.                                 Information

 

11.1                           Each Borrower undertakes to provide to the Bank:

 

8

 

(a)                                  copies of its audited consolidated accounts
(including profit and loss account and balance sheet) as soon as they are
available and not later than 180 days from the end of each accounting reference
period together with its quarterly unaudited management accounts as soon as
available and within 60 days of the end of each financial quarter except the
final quarter which is to be received within 90 days;

 

(b)                                 copies of its monthly aged trade debtor analysis
as soon as available and within 30 days of the end of each calendar month;

 

(c)                                  copies of any circular issued to its shareholders
or holders of loan capital at the same time as received by its shareholders or
holders of loan capital; and

 

(d)                                 within 7 days following request (unless otherwise
agreed by the Bank), any other information which the Bank may reasonably
request from time to time.

 

11.2                           UNOVA, Inc. undertakes to provide to the Bank:

 

(a)                                  copies of its audited consolidated accounts
(including profit and loss account and balance sheet) as soon as they are
available and not later than 90 days from the end of each accounting reference
period together with its quarterly unaudited management accounts as soon as available
and within 60 days of the end of each financial quarter except the final
quarter which is to be received within 90 days;

 

(b)                                 a copy of each covenants compliance certificate
delivered to Co-Agents under Section 5.2(d) of the US Facility Agreement, at
the same time as delivered to such Co-Agents; and

 

(c)                                  within 7 days following request (unless otherwise
agreed by the Bank), any other information which the Bank may reasonably
request from time to time.

 

11.3                           In the event of any Borrower adopting any proposed
change in accounting principles for the purposes of its audited consolidated
accounts from those on the basis of which its most recent audited consolidated
accounts as at the date of this Facility Letter were prepared, then, if the
Bank is of the opinion that any such change materially affects any of the
financial covenants detailed in clause 10.2 above, it shall be entitled to
require such financial covenants to be amended in such manner as it may deem
appropriate to reflect such change (but so as to place no more onerous
obligation on the Borrowers than the existing financial covenants as if no such
change in accounting principles had occurred).

 

12.                                 Payments

 

12.1         All payments by each Borrower, whether
of principal, interest or otherwise, shall be made to the Bank (or such other
bank as the Bank may specify from time to time) for value on the due date by
such times and in such funds as the Bank may specify as being customary at the
time for settlement of transactions in the relevant currency in the place for
payment, without set-off or counterclaim and free of any deduction or
withholding for or on account of tax unless such Borrower

 

9

 

is
compelled by law to make such a payment subject to the deduction or withholding
of tax.

 

12.2                           If a Borrower is compelled by law to make any
such deduction or withholding, or the Bank is compelled by law to make any
payment in respect of tax (other than tax on overall net income), in each case
from or in respect of any amount payable or paid by such Borrower hereunder,
such Borrower will pay to the Bank such additional amount as is required to
ensure that the Bank receives and retains (free from any liability in respect
of any such deduction or withholding) a net amount equal to the full amount
which it would have received if no such deduction, withholding or payment had
been made.

 

12.3                           All taxes required by law to be deducted or
withheld by a Borrower from any amounts payable or paid hereunder shall be paid
by such Borrower to the appropriate authority within the time allowed for such
payment under applicable law and such Borrower shall, within 30 days of the
payment being made, deliver to the Bank evidence reasonably satisfactory to the
Bank (including all relevant tax receipts) that the payment has been duly
remitted to the appropriate authority.

 

12.4                           The Bank shall be entitled to adjust the dates
for the making of payments under the Facility, and the duration of interest
periods, where in the Bank’s opinion it is necessary to do so in order to
comply with the practice from time to time prevailing in the London Interbank
Market or any other financial market relevant for the purposes of the Facility.

 

13.                                 Events of Default

 

In
the event of:

 

(a)                                  failure by any Borrower to make any repayment of
principal, or payment of interest or other money, under this Facility Letter on
its due date unless such failure is caused solely by technical or
administrative delays and repayment or payment is made within three Business
Days of the due date; or

 

(b)                                 (i)                                     a breach by any Borrower in the performance of
any of its obligations under clauses 9, 10.1 (other than under (e) or (f)
thereof)  or 11; or

 

(ii)                                  a breach by any Borrower in the performance of
any of its obligations under clause 10.2, if such breach (if sufficient funds
are available for drawing under the US Facility or are otherwise available to
UNOVA, Inc. and/or its Subsidiaries to remedy such breach) shall continue
unremedied for three Business Days; or

 

(iii)                               a breach by any Borrower in the performance of
its obligations under clauses 10.1 (e) or (f), of this Facility Letter if such
breach (if capable of remedy) shall continue unremedied for 7 days; or

 

(iv)          a
breach by any Borrower or any Guarantor in the performance of any other
obligations, covenants or undertakings under this Facility Letter or any
guarantee and/or security held by the Bank

 

10

 

for
the Facility and such breach (if capable of remedy) shall continue unremedied
for 21 days; or

 

(c)                                  any approval, authorisation, consent or clearance
which is required either to ensure that this Facility Letter and the security
and the guarantees referred to in clause 3 above are valid, binding and
enforceable or to enable the obligations thereby created to be duly performed,
ceasing to be in full force and effect or it becoming unlawful for the Borrower
or any other person to perform all or any of its obligations under this
Facility Letter or under any security or guarantee referred to in clause 3
above, or any such document not being or ceasing to be legal, valid and binding
on it; or

 

(d)                                 a petition being presented, an order being made
or a meeting being convened or an effective resolution being passed, for
winding up any Borrower or UNOVA, Inc. (or any Subsidiary where such action
could reasonably be expected to have a Material Adverse Effect) (except for the
purpose of a reconstruction or amalgamation while solvent on terms previously
approved in writing by the Bank), or a petition being presented or an order
being made for the administration of any Borrower or UNOVA, Inc. (or any
Subsidiary where such action could reasonably be expected to have a Material
Adverse Effect); or

 

(e)                                  an encumbrancer taking possession or an administrator,
liquidator, provisional liquidator, receiver, manager, trustee, sequestrator or
similar officer being appointed of all or any of the assets of any Borrower or
UNOVA, Inc. (or any Subsidiary where such action could reasonably be expected
to have a Material Adverse Effect); or

 

(f)                                    a distress, execution, attachment or other legal
process being levied, enforced or sued out against any of the assets of any
Borrower or UNOVA, Inc. (or any Subsidiary where such action could reasonably
be expected to have a Material Adverse Effect) and not being discharged or paid
in full within five Business Days; or

 

(g)                                 any Borrower or UNOVA, Inc. (or any Subsidiary
where such action could reasonably be expected to have a Material Adverse
Effect) suspending payment of its debts or being unable to pay its debts as
they fall due, or being deemed, under Section 123 of the Insolvency Act
1986, to be unable to pay its debts; or

 

(h)                                 any Borrower or UNOVA, Inc. (or any Subsidiary
where such action could reasonably be expected to have a Material Adverse
Effect) proposing or entering into a voluntary arrangement (within the meaning
of Section 1 of the Insolvency Act 1986) or taking or being subjected to
any proceedings under any law, or commencing negotiations with one or more of its
creditors, for the readjustment, rescheduling or deferment of its debts
generally, or proposing or entering into any general assignment or composition
with or for the benefit of its creditors; or

 

(i)            control of any Borrower or UNOVA,
Inc. passing or having passed, whether by virtue of any agreement, offer,
scheme or otherwise, to any person or persons (including institutions or
companies), either acting individually or in concert, without the prior written
consent of the Bank, (“control” having the meaning ascribed to it in relation
to a

 

11

 

body
corporate by Section 840 of the Income and Corporation Taxes Act 1988)
provided that an intra-group re-organisation will not give rise to a breach of
this clause 13(i) so long as each Borrower remains a wholly-owned Subsidiary of
UNOVA, Inc. (whether directly or indirectly); or

 

(j)                                     any Borrower, UNOVA, Inc.  or any Subsidiary ceasing or threatening to
cease to carry on all or a substantial part of its business or operations, or
selling, transferring or otherwise disposing of the whole or a substantial part
of its undertaking or assets, whether by a single transaction or a number of
transactions, where such cessation could reasonably be expected to have a
Material Adverse Effect, without the prior written consent of the Bank; or

 

(k)                                  any default shall occur under any agreement or
instrument under or pursuant to which any other financial indebtedness of
UNOVA, Inc. or any of the Borrowers (A) the individual outstanding principal
amount of which exceeds $5,000,000 (or its currency equivalent) or (B) the
aggregate principal amount of which exceeds $5,000,000 (or its currency
equivalent),  and such default shall
continue for more than the period of grace (if any) therein specified, if the
effect thereof (with or without the giving of notice or lapse of time or both)
is:-

 

(X)                               to accelerate, or to permit the holders of any
such financial indebtedness to accelerate, the maturity of any such financial
indebtedness; or

 

(Y)                                to result in any such financial indebtedness
being declared due and payable or be required to be prepaid (other than by
regularly scheduled required prepayments) prior to the stated maturity thereof;

 

or

 

(l)                                     there occurs an event having a Material Adverse Effect;
or

 

(m)                               the cessation for any reason of any consent,
authorisation, licence and/or exemption which is required to enable any
Borrower, Subsidiary or any Guarantor to carry on all or any material part of
its business, or the taking by any governmental, regulatory or other authority
of any action in relation to any Borrower, Subsidiary or any Guarantor (whether
or not having the force of law) which, in any such case, could reasonably be
expected to have a Material Adverse Effect; or

 

(n)                                 any Guarantor giving or purporting to give notice
to determine its liability under any guarantee referred to in clause 3 above;
or

 

(o)                                 any event occurring in relation to any Borrower
under the laws of any other applicable jurisdiction which has an effect
substantially similar to any of the events specified in this clause 13; or

 

(p)                                 any representation or warranty made by any
Borrower or UNOVA, Inc. under this Facility Letter or for the purpose of
obtaining the Facility, being incorrect in any material respect as at the date
on which it is made or deemed to be made,

 

12

 

then
whilst any such Event of Default is continuing, all moneys owing under the
Facility shall become repayable forthwith upon written demand by the Bank at
any time and no further utilisation may be made under the Facility.  The Bank may, at any time after such demand
(i) call for payment of full cash cover for all outstanding liabilities under
the Ancillary Facility and/or the SFET and/or (ii) close out all or any
contracts effected pursuant to the SFET. 
At any time whilst an Event of Default is continuing the Bank may
enforce its rights to appoint an administrative receiver or other enforcement
rights under any security provided by the Borrowers in connection with this
Facility and may make demand of any Guarantor.

 

The
Bank reserves the right, at any time following a demand under this clause, to
purchase with sterling any currency necessary to convert any amounts
outstanding under the Facility together with interest accrued thereon, to
sterling whereupon the Borrowers shall then become liable to pay the Bank
forthwith the relevant sterling amounts, together with all costs and expenses
incurred by the Bank.

 

14.                                 Interest on an Overdue Amount

 

14.1                           Any money payable under this Facility Letter
which is not paid when due by the Borrowers shall bear interest on a daily
basis from the due date to the date of actual payment.  Such interest shall be calculated by
reference to successive default interest periods of such duration as the Bank
may from time to time select, except that the first such period relating to any
overdue amount in respect of the Sterling/Currency MML shall be such as to
mature at the end of the interest period current at the time when such amount
became due.

 

14.2                           Interest shall be charged at the rate per annum
determined by the Bank to be equal to 1% above the rate which would otherwise
have been applicable to such overdue amount under the provisions of the
relevant Schedule if such amount had been non-overdue principal (except
that in the case of any amount that does not have an applicable interest rate
hereunder the rate charged shall be 3% per annum over the Bank’s Base Rate
current from time to time).  Interest so
accrued shall be due on demand or (in the absence of demand) on the last day of
the default interest period in which it accrued and, if unpaid, shall be
compounded on the last day of that and each successive interest period.  Interest shall be charged and compounded on
this basis both before and after any judgement obtained under this Facility
Letter.

 

15                                    Assignment and Transfer

 

15.1                           No Borrower may assign or transfer any of its
rights or obligations under or in respect of this Facility Letter.

 

15.2         The Bank may, at any time, assign
and/or transfer all or any of its rights, benefits and/or obligations in
respect of the Facility, in whole or in part, to any person or persons and may,
subject to obtaining customary undertakings protecting the confidentiality of
such information, disclose to any actual or prospective assignee or transferee
(or to any other person (i) in connection with an actual or proposed
securitisation of all or any part of the Bank’s loan assets from time to time
or (ii) who may otherwise enter or propose to enter

 

13

 

into
contractual relations with the Bank in relation hereto) any information
relevant to the Facility in the Bank’s possession relating to the Borrowers and
the Subsidiaries and any related security or guarantee.  Other than in connection with an actual or
prospective securitisation referred to in (i), the Bank shall obtain the
Borrowers’ prior written consent to any assignment or transfer (such consent
not to be unreasonably withheld or delayed).

 

16.                                 Miscellaneous

 

16.1                           All notifications or determinations given or made
by the Bank under this Facility Letter shall be conclusive and binding on each
Borrower, except in any case of manifest error.

 

16.2                           No delay or omission by the Bank in exercising
any right or power under this Facility Letter shall impair such right or power,
and any single or partial exercise of it shall not preclude any other right or
power. The rights and remedies of the Bank under this Facility Letter are
cumulative and not exclusive of any right or remedy provided by law.

 

16.3                           Each Borrower shall indemnify the Bank on demand
(without prejudice to the Bank’s other rights) for any expense, loss or
liability incurred by the Bank in consequence of (i) any failure by any
Borrower to borrow in accordance with a notice of drawing given by it to the
Bank, or (ii) any default or delay by any Borrower in the payment of any amount
when due under this Facility Letter, or (iii) the occurrence or continuance of
any event referred to in clause 13 above, or (iv) all or part of the Facility
being prepaid or repaid for any reason otherwise than on the maturity of the
then current interest period including, without limitation, any loss (other
than loss of margin), expense or liability sustained or incurred by the Bank in
any such event in liquidating or re-deploying funds acquired or committed to
fund, make available or maintain the Facility (or any part of it).

 

16.4                           Any sum of money at any time standing to the
credit of any Borrower with the Bank in any currency upon any account or
otherwise may be applied by the Bank, at any time after the occurrence of an
Event of Default (without notice to the Borrower), in or towards the payment or
discharge of any indebtedness now or subsequently owing to the Bank by such
Borrower and the Bank may use any such money to purchase any currency or
currencies required to effect such application.

 

16.5                           If, for any reason, any amount payable under this
Facility Letter is paid or is recovered in a currency (the “other currency”)
other than that in which it is required to be paid (the “contractual
currency”), then, to the extent that the payment to the Bank (when converted at
the then applicable rate of exchange) falls short of the amount unpaid under
this Facility Letter, the Borrower shall, as a separate and independent
obligation, fully indemnify the Bank on demand against the amount of the
shortfall.  For the purposes of this
clause the expression “rate of exchange” means the rate at which the Bank is
able as soon as practicable after receipt to purchase the contractual currency
in London with the other currency.

 

14

 

16.6                           If the UK moves to the third stage of EMU, the
Bank shall be entitled to make such changes to this Facility Letter as it
reasonably considers are necessary to reflect the changeover to the euro
(including, without limitation, the rounding (up or down) of fixed monetary
amounts to convenient fixed amounts in the euro and amending any provisions to
reflect the market conventions for a facility of the kind contemplated in this
Facility Letter).

 

16.7                           A person who is not a party to this Facility
Letter has no right under the Contracts (Rights of Third Parties) Act 1999 to
enforce or to enjoy the benefits of this Facility Letter.

 

17.                                 Interpretation

 

17.1                           In this Facility Letter, unless the context
otherwise requires:

 

“Best
Rating Guide” means the rating guide published in the US under the name “Best
Rating Guide”;

 

“Business
Day” means a day on which the relevant London financial markets and the Bank
are ordinarily open to effect transactions of the kind contemplated in this
Facility Letter and, if a payment falls due under this Facility Letter, also a
day on which banks in the principal financial centre for the relevant currency
(as determined by the Bank) are open for dealings in such currency and if a
payment is to be made in euros, on which such payment system as the Bank
chooses is operating for the transfer of funds for the same day value;

 

“Co-
Agents” has the meaning given to it in the US Facility Agreement;

 

“Disposal
Proceeds” means the gross proceeds received in respect of a disposal referred
to in sub-paragraph (b) of the definition of “Permitted Disposal” less the
amount of any present and future taxes payable with respect to any gain
resulting from such disposal, and all third party costs, fees and expenses
properly incurred in arranging and effecting such disposal;

 

“Eligible
Trade Debtors” means, at any time in respect of any Borrower or any division of
any Borrower, the unencumbered book debts of such Borrower as appearing in its
books at such time but excluding:

 

(a)                                  each debt due to such Borrower from any of its
Subsidiaries,

 

(b)                                 each debt which has not been paid within 90 days
(unless otherwise agreed by the Bank) after the date of the original invoice
relating thereto,

 

(c)           each debt which is not (i) due from a
debtor incorporated in the European Union, Switzerland, Norway, The United
States of America or Canada, or (ii) due from a wholly owned Subsidiary
(wherever situate, subject to compliance by the Bank with applicable laws,
regulations and the Bank’s internal compliance policies) of, BMW AG,
Daimler-Chrysler AG, Fiat S.p.A., Ford Motor Company, General Motors
Corporation, Hyundai Motor Company, Renault S.A., Peugeot S.A. or Volkswagen AG
in each case subject to periodic review by the Bank, or (iii) guaranteed

 

15

 

or
insured by the Export Credits Guarantee Department or other UK Government
department or agency,

 

(d)                                 each debt due from Cyltec LLC, and

 

(e)                                  each debt in respect of retention monies due
(forming all or part of any invoiced amount);

 

“EMU”
means Economic and Monetary Union as contemplated in the Treaty establishing
the European Community, as amended from time to time;

 

“Encumbrance”
includes any mortgage, charge, pledge, lien (other than a lien arising solely
by operation of law in the ordinary course of business and securing amounts not
more than 90 days overdue for payment), assignment by way of security,
hypothecation, security interest or other agreement or arrangement which
results in (or has substantially the same commercial effect as) the creation of
security (but excluding title retention agreements or arrangements entered into
in the ordinary course of trading and not otherwise falling within this
definition) and any right on the part of any person to call for the creation of
any of the foregoing, in each case whether relating to existing or future
assets;

 

“euro”
and “€” means the single currency
of the participating Member States adopted under the Council Regulation (EC) No
974/98;

 

“Event
of Default” means any event or circumstance referred to in clause 13;

 

“Expiry
Date” has the meaning given to it in clause 2;

 

“Facility”
means the facility made available under this Facility Letter (as reduced from
time to time in accordance with its provisions);

 

“financial
indebtedness” means, without duplication, all liabilities, obligations and
indebtedness of any Borrower, of any kind or nature, now or hereafter owing,
arising, due or payable, howsoever evidenced, created, incurred, acquired or
owing, whether primary, secondary, direct, contingent, fixed or otherwise,
consisting of indebtedness for borrowed money or the deferred purchase price of
property, excluding trade payables but including (a) all obligations and
liabilities of any person secured by any Encumbrance on any Borrower’s or
Guarantor’s  property, even though such
Borrower or Guarantor shall not have assumed or become liable for the payment
thereof; provided, however, that all such obligations and liabilities which are
limited in recourse to such property shall be included in financial
indebtedness only to the extent of the book value of such property as would be
shown on a balance sheet of such Borrower or Guarantor prepared in accordance
with either UK or US generally accepted accounting standards (as applicable to
the entity in question); (b) all obligations or liabilities created or arising
under any finance lease or conditional sale or other title retention agreement
with respect to property used or acquired by any Borrower or Guarantor, even if
the rights and remedies of the lessor, seller or lender thereunder are limited
to repossession of such property; provided, however, that all such obligations
and liabilities which are

 

16

 

limited
in recourse to such property shall be included in financial indebtedness only
to the extent of the book value of such property as would be shown on a balance
sheet of such Borrower or Guarantor prepared in accordance with either UK or US
generally accepted accounting standards (as applicable to the entity in
question); (c) all obligations and liabilities under guarantees; and
(d) the present value (discounted at the greater of Bank of America N.A.’s
“prime rate” or  0.50% above US Federal
Funds Rate) of lease payments due under synthetic leases;

 

“indebtedness”
includes any obligation for the payment or repayment of money, whether actual
or contingent, present or future, secured or unsecured, and whether incurred as
principal or surety or otherwise;

 

“Material
Adverse Effect” means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties or condition (financial or
otherwise) of the Borrowers and Guarantors taken as a whole; (b) a material
impairment of the ability of the Borrowers and the Guarantors taken as a whole
to perform under the Facility Letter and any guarantee or security provided in
connection with the Facility Letter; or (c) a material adverse effect on the
legality, validity, binding effect or enforceability against any Borrower or
any Guarantor of this Facility Letter or any such guarantee or security;

 

“month”
means a period starting on one day in a calendar month and ending on the
corresponding day in the next calendar month or, if that is not a Business Day,
on the next Business Day unless that falls in another calendar month in which
case it shall end on the preceding Business Day, save that where a period
starts on the last Business Day in a month or there is no corresponding day in
the month in which the period ends, that period shall end on the last Business
Day in the later month;

 

“Operating
Cashflow” means, in relation to any accounting reference period of any
Borrower, such Borrower’s Total Operating Profit plus amounts charged to
depreciation, capital receipts from the disposals of assets and funds received
from equity subscription and capital issues minus corporation tax paid and
capital expenditure plus or minus movements in working capital (each as shown
in such Borrower’s audited financial statements delivered to the Bank in
accordance with clause 11.1 for such accounting reference period);

 

“Parent”
means a parent undertaking of a Borrower within the meaning of Section 258
of the Companies Act 1985;

 

“Permitted
Disposal” means (a) any sale of current assets in the ordinary course of
trading by any Borrower or any Subsidiary, (b) a disposal which is referred to
in the letter from UNOVA, Inc. to the Bank dated no later than the date hereof
and is made in accordance with the terms of that letter, (c) any disposal to
which the Bank has consented (such consent not to be unreasonably withheld or
delayed) of plant, machinery or equipment made solely in connection with a
Borrower entering into operating or finance leasing arrangements or (d) any
other disposal by any Borrower or any Subsidiary agreed in writing from time to
time between the Borrowers and the Bank;

 

17

 

“Permitted
Loan” means any guarantee, bond, indemnity, loan or financial accommodation
which either:

 

(a)                                  forms trade credit in the normal course of
business, or

 

(b)                                 is made to any direct or indirect Subsidiary of
UNOVA Inc. incorporated in Germany or Sweden, (each an “Approved Affiliate”)
either (i) from the proceeds of any utilisation under the Sterling/Currency MML
and does not exceed £5,000,000 when aggregated with all other loans or
financial accommodation made by each Borrower and each UK Subsidiary to an
Approved Affiliate from the proceeds of any utilisation under the
Sterling/Currency MML or (ii) not from the proceeds of any utilisation under
the Sterling/Currency MML;

 

“person”
shall be construed as a reference to any person, firm, company, corporation,
government, state or agency of a state or any association or partnership
(whether or not having separate legal personality) of two or more of the
foregoing;

 

“Potential
Event of Default” means any event or circumstance which, with the giving of
notice, lapse of time or fulfillment of any other condition, would be an Event
of Default;

 

“Properties”
means the leasehold and freehold industrial units and offices at (i) Hampstead
Avenue, Mildenhall, Suffolk (described and demised by a conveyance dated 14
April 1988 between Lamb-Sceptre Engineering Limited (1) and Litton U.K.
Limited (2)), (ii) Eastburn Works, Skipton Road, Cross Hills, Keighly, West
Yorkshire (title no. WYK393531), (iii) Kingsbury Road, Erdington, Birmingham
(title no’s WM542569, WM542383, WM711536, WM542336, WM645192).

 

“$”
means the lawful currency of the US;

 

“Sterling”
and “£” means the lawful currency for the time being of the UK;

 

“Subsidiary”
means a subsidiary undertaking of a Borrower within the meaning of
Section 258 of the Companies Act 1985;

 

“Total
Operating Profit” means, in relation to any accounting reference period of any
Borrower, such Borrower’s total operating profit for continuing operations,
acquisitions (as a component of continuing operations) and discontinued
operations (as set out in Financial Reporting Standard No. 3) but ignoring any
exceptional items (each as shown in such Borrower’s audited financial
statements delivered to the Bank in accordance with clause 11.1 for such accounting
reference period);

 

“Trade
Debtors” means the value of the Eligible Trade Debtors of each of Cincinnati
Machine U.K. Limited, Intermec Technologies U.K. Limited, Lamb Technicon (a
division of UNOVA U.K. Limited) and Landis Lund (a division of UNOVA U.K.
Limited);

 

“UK”
means the United Kingdom of Great Britain and Northern Ireland;

 

18

 

“UK
Subsidiary” means any Subsidiary of the Borrower which is incorporated in the
United Kingdom;

 

“US”
means the United States of America;

 

“US
Facility” means the facility made available under the US Facility Agreement;

 

“US
Facility Agreement” means a syndicated facility agreement dated 12
July 2001 between (inter alia) UNOVA, Inc. and others as borrowers, Bank
of America N.A. and Heller Financial, Inc. and others as lenders and/or agents
(as amended, restated, extended or supplemented from time to time); and

 

“VAT”
means value added tax or any similar tax substituted for it from time to time.

 

17.2                           References to any statutory provision includes
any amended or re-enacted version of such provision with effect from the date
on which it comes into force.

 

17.3                           Save where the context otherwise requires, any
expression in this Facility Letter importing the singular shall include the
plural and vice versa.

 

17.4                           References to a time of the day are references to
the time in London.

 

17.5                           It is expressly stipulated that in the event of
any conflict or inconsistency between the terms of any guarantee or security
required delivered in connection with the Facility Letter, and the terms of
this Facility Letter (as amended, replaced or extended from time to time) the
terms of the Facility Letter (as so amended, replaced or extended) shall
prevail

 

17.6                           So long as any amount remains outstanding under
this Facility, it is expressly stipulated that clause 6(b) of the Bank’s
standard form of debenture referred to in clause 3.1 of this Facility Letter
shall be deemed to have been deleted, clause 6(d) thereof shall be deemed
amended by the insertion of “which are necessary and useful in the conduct of
its business” after “thereof” on the second line and by the insertion of the
words “(ordinary wear and tear excepted)” at the end of clause 6(d) and that
clause 14 of the Bank’s standard form of Guarantee referred to in clause 3.1 of
this Facility Letter shall be deemed amended by the insertion of the words
“(which shall be exercised in good faith using its reasonable credit
judgement)” after the word “discretion” on the 18th line thereof and by the
deletion of the word “absolute” on such line.

 

18.                                 Conditions Precedent

 

The
Facility and the SFET will become available to the Borrowers for drawing only
upon receipt by the Bank of the following in form and substance satisfactory to
the Bank:

 

(a)                                  this Facility Letter as required under clause 21
below;

 

19

 

(b)                                 a certified true copy of a resolution of each
Borrower’s Board of Directors and the Board of Directors of UNOVA, Inc:

 

(i)                                     accepting the Facility and the SFET and this
offer on the terms and conditions stated within this Facility Letter;

 

(ii)                                  authorising a specified person, or persons, to
countersign and return to the Bank the enclosed duplicate of this Facility
Letter;

 

(iii)                               authorising the Bank to accept instructions and
confirmations in connection with the Facility and the SFET signed in accordance
with the Bank’s signing mandate current from time to time, and to accept
instructions in connection with drawings under the Sterling/Currency MML and under
the SFET, by telephone from any person specifically authorised to give such
telephone instructions; and

 

(iv)                              containing confirmed specimens of the signatures
of those officers referred to in (ii) and (iii) above, if not already known to
the Bank; and

 

(c)                                  a legal opinion from the U.S. legal counsel to
UNOVA, Inc. addressed to the Bank in a form satisfactory to the Bank and which
opinion includes confirmation that UNOVA, Inc. is legally empowered to accept
and enter into the terms and conditions of this Facility Letter.

 

19.                                 Governing Law and Jurisdiction

 

19.1                           This Facility Letter shall be governed by and
construed in accordance with English law.

 

19.2                           Each Borrower and UNOVA, Inc. hereby irrevocably
submit, for the exclusive benefit of the Bank, to the jurisdiction of the High
Court of Justice in England (but without prejudice to the right of the Bank to
commence proceedings against the Borrower in any other jurisdiction) and
irrevocably waives any objections on the ground of venue or forum non conveniens
or any similar grounds.

 

19.3                           Without prejudice to any other mode of service
allowed under any relevant law,

 

(a)                                  UNOVA, Inc. irrevocably appoints UNOVA U.K.
Limited as its agent for service of process in relation to any proceedings
before the English courts in connection with this Facility Letter; and

 

(b)                                 agrees that the failure by a process agent to
notify UNOVA, Inc. of the process will not invalidate the proceedings
concerned.

 

20.                                 Notices

 

Every
notice, request or other communication shall:

 

(a)                                  be in writing delivered personally or by prepaid
first class letter or facsimile transmission;

 

(b)           be deemed to have been received by
the Borrowers and UNOVA, Inc., in the case of a letter when delivered
personally or 48 hours after it has been sent by first class post or, in the
case of facsimile

 

20

 

transmission,
at the time of transmission with a facsimile transmission report or other
appropriate evidence (provided that if the date of transmission is not a
Business Day it shall be deemed to have been received at the opening of
business on the next Business Day); and

 

(c)                                  be sent (i) to the Borrowers and UNOVA, Inc. at
the address stated at the beginning of this Facility Letter and (ii) to the
Bank at the address stated at the beginning of this Facility Letter, or to such
other address in England as may be notified in writing by the relevant party to
the other.

 

All
communications by the Borrowers and UNOVA, Inc. shall be effective only on
actual receipt by the Bank.

 

21.                                 Acceptance

 

If
each of the Borrowers and UNOVA, Inc. wish to accept this offer, this Facility
Letter and the enclosed duplicate should be signed below by an authorised
officer on its behalf and the signed duplicate returned to the Bank.  This offer will remain available until 2
months from the date of this facility letter, after which it will lapse if not
accepted.

 

	
  Yours
  faithfully

  
	
  for
  and on behalf of

  
	
  BARCLAYS
  BANK PLC

  
	
   

  
	
  /s/
  John D. Oliver

  	
   

  
	
  John
  D. Oliver

  
	
  Relationship
  Director

  
	
   

  
	
   

  
	
  Accepted
  on the terms and conditions stated herein,

  
	
   

  
	
  For
  and on behalf of

  
	
   

  
	
  UNOVA
  U.K. Limited

  
	
   

  
	
  by
  

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  
	
  Date

  	
  March 10,
  2004

  	
   

  
	
   

  
	
   

  
	
  Cincinnati
  Machine U.K. Limited

  
						

 

21

 

	
  by

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
   

  
	
  Date

  	
  March 10,
  2004

  	
   

  
	
   

  
	
   

  
	
  Intermec
  Technologies U.K. Limited

  
	
   

  
	
   

  
	
  by

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
   

  
	
  Date

  	
  March 10,
  2004

  	
   

  
	
   

  
	
   

  
	
  UNOVA,
  Inc.

  
	
   

  
	
   

  
	
  By

  	
  /s/
  Michael E. Keane

  	
   

  
	
   

  	
   

  
	
  Date

  	
  March 10,
  2004

  	
   

  
					

 

22

 

SCHEDULE A

 

Sterling/Currency
MML

 

The
Sterling/Currency MML includes the option not only to draw by way of short term
loans in sterling, but also for the Borrowers to draw by way of short term
loans in US Dollars and euro if freely transferable and convertible into
sterling and available to the Bank in the relevant amount for the relevant
period in the normal course of business in the London Interbank Market.  The Bank shall be the sole arbiter of the
availability of such currencies.

 

The
Sterling/Currency MML may be drawn in one or more amounts each drawing to be a
minimum amount of £500,000 (or the equivalent thereof in other currencies) and
multiples of £50,000 (or the equivalent thereof in other currencies) thereafter
for periods of a minimum seven days up to a maximum of 12 months at the
Borrower’s option or other mutually agreed period but no drawing should be made
for an interest period with a maturity date of more than three months beyond
the Expiry Date.

 

When
wishing to draw under the Sterling/Currency MML, the Borrower should telephone
the Bank’s dealers at Global Treasury Services (“GTS”) on 0345-231160 on or
shortly before the Business Day on which funds are required, stating the
currency and the amount of the drawing, the period required and giving
instructions for payment of the funds. 
In the event these instructions do not stipulate that the funds must be
credited to the Borrower’s current account with the Bank’s branch (the
“Branch”) such instructions must be confirmed by letter to the Branch at the
earliest opportunity.

 

Unless
otherwise agreed between the Borrower and GTS, the interest rate on each
drawing will be the aggregate of the Bank’s margin of 3% per annum plus LIBOR
(to be conclusively determined by the Bank and dependent upon the conditions
prevailing in the London financial markets) and any mandatory costs to
compensate the Bank for the cost resulting from the imposition from time to
time under the Bank of England Act 1998 and/or by the Bank of England and/or
the Financial Services Authority (the “FSA”) (or other United Kingdom
governmental authorities or agencies) of a requirement to place non-interest
bearing cash ratio deposits or Special Deposits (whether interest bearing or
not) with the Bank of England and/or pay fees to the FSA calculated by
reference to liabilities used to fund the sum) for the period of drawing.

 

Interest
will be payable without deduction at the maturity of each drawing, and
calculated on the basis of actual days elapsed over a 365 day year for sterling
drawings and a 360 day year for currency drawings (or if market practice
differs, in accordance with the normal market practice for the relevant
currency).

 

Each
drawing, together with interest thereon, will be repaid on its maturity date in
the currency in which such drawing is outstanding in accordance with the
provisions of clause 12 of this Facility Letter.

 

23

 

SCHEDULE B

 

Sterling
Overdraft

 

The
Sterling Overdraft will be available on the Borrower’s current account at the
Bank’s branch at 210 High Street, Hounslow, Middlesex TW3 1DL (the “Branch”)
with interest charged at a rate of 1% per annum over the Bank’s Base Rate
current from time to time. Interest together with other charges will be debited
to the Borrower’s current account at the Branch quarterly in arrear in March,
June, September and December each year or at such other times as may
be determined by the Bank, and such interest will be calculated on the basis of
actual days elapsed over a 365 day year (or on such other day count basis as
the Bank considers is consistent with the then applicable market practice for
facilities of this kind).

 

24

 

SCHEDULE C

 

Ancillary
Facility - Guarantees, Bonds and Indemnities

 

The
Bank is prepared to consider issuing guarantees, bonds and indemnities on
behalf of any Borrower in respect of normally accepted and commercial
transactions, up to a limit of £10,500,000 (ten million and five hundred
thousand pounds) subject to prior agreement with the Bank and receipt of the
necessary counter indemnities.

 

(Within
this facility we have allocated to Barclays Frankfurt EUR2,474,976.00 to
Honsberg Lamb Sonderwerkzeugmaschinen GmbH and therefore the revised sub-limit
is £8,790,000 (eight million seven hundred and ninety thousand pounds).

 

Commission
at the rate of 1% per annum of the principal amount of each outstanding
guarantee, bond and indemnity will be payable by the relevant Borrower to the
Bank, quarterly in advance.

 

25

 

SCHEDULE D

 

SFET

 

The
SFET covers the maximum liability of the Borrower to the Bank outstanding at
any time under contracts of not more than 12 months duration for the forward
purchase or sale of foreign currency for delivery at a future date and the spot
purchase or sale of foreign currencies, but excludes purchases or sales where
the Bank is required irrevocably to pay away funds prior to receiving firm
confirmation of incoming cover.

 

When
wishing to utilize the SFET the Borrower should telephone the Bank’s dealers on
0345-231160. All payment and delivery instructions are to be advised to and
processed by the Branch and confirmed by letter at the earliest opportunity.

 

26

 

SCHEDULE

 

Calculation
of the Mandatory Cost

 

1.                                       The Mandatory Cost is an addition to the interest
rate to compensate the Bank for the cost of compliance with (a) the
requirements of the Bank of England and/or the Financial Services Authority (or,
in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank.

 

2.                                       On the first day of each Interest Period (or as
soon as possible thereafter) the Bank shall calculate, as a percentage rate, a
rate per annum (the “Additional Cost Rate”) in accordance with the paragraphs
set out below.

 

3.                                       The Additional Cost Rate for the Bank if lending
from a Facility Office in a Participating Member State will be the percentage
notified by the Bank to the Borrower as being its reasonable determination of
the cost of complying with the minimum reserve requirements of the European
Central Bank in respect of Advances made from that Facility Office.

 

4.                                       The Additional Cost Rate for the Bank if lending
from a Facility Office in the United Kingdom will be calculated as follows:

 

(a)                                  in relation to the sterling Advance:

 

	
  AB
  + C(B-D) + E x 0.01

  	
   

  	
  per
  cent. per annum

  
	
  100 – (A + C)

  

 

(b)                                 in relation to an Advance in any currency other
than sterling:

 

	
  E
  x 0.01

  	
   

  	
  per
  cent. per annum.

  
	
  300

  	
   

  

 

Where:

 

A                                      is the percentage of Eligible Liabilities
(assuming thse to be in excess of any stated minimum) which the Bank is from
time to time required to maintain as an interest free cash ration deposit with
the Bank of England to comply with cash ration requirements.

 

B                                        is the percentage rate of interest (excluding the
Bank’s margin and the Mandatory Cost and, if the Loan is an overdue amount, the
additional rate of interest specified in clause 14.2) payable for the relevant
Interest Period on the Advance.

 

C                                        is the percentage (if any) of Eligible
Liabilities which the Bank is required from time to time to maintain as
interest bearing Special Deposits with the Bank of England.

 

D                                       is the percentage rate per annum payable by the
Bank of England to the Bank on interest bearing Special Deposits.

 

27

 

E                                         is designed to compensate the Bank for amounts
payable under the Fees Rules and is calculated as the rate of charge payable by
the Bank to the Financial Services Authority pursuant to the Fees Rules in
respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by the Bank as being the average of the Fee
Tariffs applicable to the Bank for that financial year) and expressed in pounds
per £1,000,000 of the Tariff Base of the Bank.

 

5.                                       For the purposes of this Schedule:

 

(a)                                  “Eligible Liabilities” and “Special Deposits”
have the meanings given to them from time to time under or pursuant to the Bank
of England Act 1998 or (as may be appropriate) by the Bank of England;

 

(b)                                 “Fees Rules” means the rules on periodic fees
contained in the FSA Supervision Manual or such other law or regulation as may
be in force from time to time in respect of the payment of fees for the
acceptance of deposits;

 

(c)                                  “Fee Tariffs” means the fee tariffs specified in
the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any
minimum fee or zero rated fee required pursuant to the Fees Rules but taking into
account any applicable discount rate); and

 

(d)                                 “Tariff Base” has the meaning given to it in, and
will be calculated in accordance with, the Fees Rules.

 

6.                                       In application of the above, formulae, A, B, C
and D will be included in the formulae as percentages (i.e. 5 per cent. Will be
included in the formula as 5 and not as 0.05). 
A negative result obtained by subtracting D from B shall be taken as
zero.  The resulting figures shall be
rounded upward, if necessary, to the next 1/16%.

 

7.                                       Any determination by the Bank pursuant to this
Schedule in relation to a formula, the Mandatory Cost, an Additional Cost
Rate or any amount payable to the Bank shall, in the absence of manifest error,
be conclusive and binding on the parties hereto.

 

8.                                       The Bank may from time to time, after
consultation with the Borrower, determine and notify to the Borrower any
amendments which are required to be made to this Schedule in order to
comply with any change in law, regulation or any requirements from time to time
imposed by the Bank of England, the Financial Services Authority or the
European Central Bank (or, in any case, any other authority which replaces all
or any of its functions) and any such determination shall, in the absence of
manifest error, be conclusive and binding on the parties hereto.

 

28

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