Exhibit 4.2

Execution Copy

PURCHASE AND SALE AGREEMENT

among

UNOVA, INC.

UNOVA INDUSTRIAL AUTOMATION SYSTEMS, INC.

UNOVA IP CORP.

UNOVA UK LIMITED

and

COMPAGNIE DE FIVES-LILLE

CINETIC ▇▇▇▇▇▇ GRINDING CORP.

CINETIC ▇▇▇▇▇▇ GRINDING LIMITED

Dated:  October 27, 2005

INDEX OF DEFINED TERMS

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CONTENTS

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “Agreement“) is made and entered into on and as of the 27th day of October, 2005 (the “Agreement Date“), among UNOVA, Inc. (“UNOVA“), a Delaware corporation; UNOVA Industrial Automation Systems, Inc. (“UIASI“), a Delaware corporation and a wholly-owned subsidiary of UNOVA; UNOVA IP Corp. (“UNOVA IP“), a Delaware corporation and a wholly-owned subsidiary of UIASI; UNOVA UK Limited (“UNOVA UK“) a company registered in England under Registration Number 1218921 and a wholly-owned subsidiary of UNOVA, (UNOVA, UIASI, UNOVA IP and UNOVA UK are sometimes referred to collectively as the “Selling Entities“); and Compagnie de Fives-Lille, a French corporation (“CFL “), Cinetic ▇▇▇▇▇▇ Grinding Corp. (“Buyer US“), a Delaware corporation and Cinetic ▇▇▇▇▇▇ Grinding Limited (“Buyer UK“), a United Kingdom corporation.  CFL, Buyer US and Buyer UK are sometimes referred to collectively as the “Purchasing Entities“.  Each of the Selling Entities and each of the Purchasing Entities are sometimes referred to collectively as the “Parties“ and individually as a “Party.”

W I T N E S S E T H:

WHEREAS, the “▇▇▇▇▇▇ Group“ is comprised of the following operating divisions of UNOVA:  the ▇▇▇▇▇▇ Grinding Systems, ▇▇▇▇▇▇▇ Abrasives, and CITCO divisions of UIASI (the “US ▇▇▇▇▇▇ Group“); and the ▇▇▇▇▇▇ ▇▇▇▇ and Cranfield Precision divisions of UNOVA UK (the “UK ▇▇▇▇▇▇ Group“);

WHEREAS, the ▇▇▇▇▇▇ Group is engaged in the design, manufacture, sale and service of grinding and abrasives systems for camshaft, crankshaft, centerless and disc grinder machines and other special high precision machine tools, including high speed grinding spindles, highly engineered diamond and cBN® cutting tools, superabrasive wheels and dressing products (such activity as carried on by the ▇▇▇▇▇▇ Group is referred to as the “Business“);

WHEREAS, Buyer US desires to purchase from the Selling Entities, and the Selling Entities desire to sell to Buyer US, substantially all of the assets, subject to the assumption of specified liabilities, of the US ▇▇▇▇▇▇ Group (the “US Purchased Assets“) upon the terms and conditions set forth in this Agreement (the “US Asset Sale“);

WHEREAS, Buyer UK desires to purchase from UNOVA UK, and UNOVA UK desires to sell to Buyer UK, substantially all of the assets, subject to the assumption of specified liabilities of the UK ▇▇▇▇▇▇ Group (the “UK Purchased Assets“), as a going concern, upon the terms and conditions set forth in this Agreement (the “UK Asset Sale“);

WHEREAS, the US Asset Sale and the UK Asset Sale are sometimes referred to collectively herein as the “Transactions“;

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

ARTICLE 1.
The Transactions

1.1                               Transfer of Assets

Except as otherwise provided in Section 1.2, effective as of the “Transfer Date“ (as defined in Article 2), the Selling Entities shall sell, transfer, assign, grant, convey and deliver as legal and beneficial owner to Buyer US in respect of the US Purchased Assets and to Buyer UK in respect of the UK Purchased Assets, free and clear of all “Liens“ other than “Permitted Liens“ (as such terms are defined in Section 3.5), all of their right, title and interest in and to their properties, rights and assets of every kind, nature and description, whether real or personal, tangible or intangible, and wherever situated, to the extent the same are used or held for use primarily or exclusively in the operation of the Business, including all assets shown on the June Balance Sheet (as defined in Section 3.2(b)) and not disposed of in the ordinary course of business since June 30, 2005 (the “June Balance Sheet Date“), and all assets of the Business acquired by the Selling Entities between the June Balance Sheet Date and the Transfer Date, (such properties, rights and assets are referred to as the “Purchased Assets“).  In the case of any of the Purchased Assets which are capable of transfer by delivery, title to that Purchased Asset shall pass to the relevant Purchasing Entity by delivery.  Except as otherwise provided in Section 1.2, the Purchased Assets shall include, without limitation, all of the following property, rights and assets of the Selling Entities used primarily or exclusively in the Business:

(a)                                  All billed and unbilled accounts receivable, including without limitation, all trade accounts receivable, notes receivable from customers, supplier credits and all other obligations from customers with respect to sale of goods or services, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, and any security or collateral therefor, including recoverable advances and deposits;

(b)                                 All land, buildings, leaseholds, leasehold improvements and other interests in realty, including without limitation the “Owned Real Property“ (as defined in Section 3.6(a)) other than the South Beloit Facility (as defined in Section 1.2(m)) and the Waynesboro Facility (as defined in Section 1.2(n)), and all improvements, fixtures and fittings thereon, and easements, servitudes, rights-of-way and other appurtenances thereto (such as appurtenant rights in and to public streets);

(c)                                  All machinery and equipment, including test equipment and fully depreciated equipment;

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

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(e)                                  All supplies and other consumables on hand;

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

(g)                                 All rights, if any, in any customer furnished materials;

(h)                                 All motor vehicles;

(i)                                     All transportation and packing and delivery equipment, materials and supplies;

(j)                                     All office equipment and supplies;

(k)                                  All office furniture and furnishings;

(l)                                     All indemnity, fidelity and contract bonds issued by third parties in favor of the Selling Entities, and which are set forth on Schedule 1.1(l);

(m)                               All causes of action, suits, judgments, claims and demands of any nature;

(n)                                 All transferable franchises, licenses, approvals, permits and other authorizations issued or granted by any “Governmental Body“ (as defined in Section 3.1(e));

(o)                                 All computer equipment, including all hardware and software, and communications equipment (including, without limitation, the transfer of Autocad without cost to the Purchasing Entities);

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

(q)                                 All lists and information pertaining to customers, suppliers, distributors, sales and purchasing agents and personnel;

(r)                                    All patents, registered designs, utility models, patent applications, trademarks, trademark applications, trade names, domain names, service marks, logos, copyrights, chip registrations, licenses, processes, inventions, formulae, trade secrets and royalties, including all registrations, applications and related international priority rights and all rights to ▇▇▇ for past infringement, including, without limitation, the names or brands “▇▇▇▇▇▇”, “▇▇▇▇▇▇ Cincinnati”, “▇▇▇▇▇▇ ▇▇▇▇▇▇▇”, “▇▇▇▇▇▇▇ Abrasives”, “CITCO”, “Goldcrown”, “▇▇▇▇▇▇ ▇▇▇▇” and “CRANFIELD PRECISION”;

(s)                                  All manufacturer and seller warranties on any goods, fixtures, or services provided to the Selling Entities;

(t)                                    All prepaid items and expenses, rights of offset and credits of all kinds, including any such items and expenses with respect to leases and rentals;

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

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

(w)                               [Reserved];

(x)                                   All utility, lease and similar deposits;

(y)                                 All medical, safety and health supplies;

(z)                                   Except for any Excluded Contracts (as defined in Section 1.2(o)), all rights under all contracts, agreements, leases, licenses, commitments, sales and purchase orders used by the Selling Entities or held by the Selling Entities for use in connection with the Business, including, without limitation, the contracts listed on Schedules 3.8(a) through 3.8(g) and Schedules 3.8(i) through 3.8(l) and including, for the avoidance of doubt, any contracts or agreements entered by UNOVA UK under the name “▇▇▇▇▇▇ ▇▇▇▇” (the “Purchased Contracts“); and

(aa)                            All goodwill associated with the Business or the Purchased Assets together with the right to represent to third parties that the Purchasing Entities are the successors to the Business.

1.2                               Excluded Assets

Notwithstanding anything in this Agreement to the contrary, the Purchased Assets shall not include any right, title or interest in or to any of the following properties, rights or assets of the Selling Entities (collectively, the “Excluded Assets“):

(a)                                  Cash, cash equivalents and short-term securities;

(b)                                 Any and all claims for refunds, carry backs or carry forwards of the Selling Entities in connection with “Taxes“ (as defined in Section 3.18) and all Tax Returns and other documents filed by the Selling Entities with any taxing authority;

(c)                                  Any intercompany receivable balance due from UNOVA or any of its subsidiaries (other than intercompany trade receivables between the ▇▇▇▇▇▇ Group);

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

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(e)                                  Any property or asset designated as “assets held for sale” on the books and records of the Selling Entities and which are set forth on Schedule 1.2(e) (collectively, the “Assets Held for Sale“);

(f)                                    Any property, right or asset to the extent exclusively relating to any other Excluded Asset or any of the “Excluded Liabilities“ (as defined in Section 1.7);

(g)                                 All assets of all “Employee Benefit Plans“ (as defined in Section 3.13(k)), including assets held in trust, including assets held in medical trusts, or insurance contracts for the benefit of Employee Benefit Plan participants or beneficiaries;

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

(i)                                     Subject to Section 8.5, all rights in, to and under the name “UNOVA” and the logos of the Selling Entities other than those logos that are primarily or exclusively related to the Business (including, without limitation, any logos with the names or brands listed in Section 1.1(r));

(j)                                     Any rights of any of the Selling Entities under this Agreement;

(k)                                  The franchise of each of the Selling Entities to be a corporation and its articles or certificate of incorporation, bylaws and other records pertaining to its corporate existence, and all books and records of a nature required by “Law“ (as defined in Section 3.1(e)) to be maintained by the Selling Entities, including all financial and tax records relating to the Business that form part of the Selling Entities’ general ledger, provided that the Selling Entities shall make available for duplication at the Purchasing Entities’ expense copies of such financial and tax records as such documents exist as of the December Balance Sheet Date, the June Balance Sheet Date and the Transfer Date to the extent such records are related to the Business and as reasonably requested by the Purchasing Entities;

(l)                                     All shares of capital stock or other equity interests in any other Person (as defined below) owned by the Selling Entities, including Honsberg Lamb Sonderwekzeugmaschinen GmbH;

(m)                               The real property located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the “South Beloit Facility“);

(n)                                 The real property located at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the “Waynesboro Facility“); and

(o)                                 All rights existing under each contract set forth on Schedule 1.2(o) (the “Excluded Contracts“).

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For purposes of this Agreement, “Person“ shall mean and include an individual, a partnership, a corporation, a limited liability company, a trust, a joint venture, an unincorporated organization and any “Governmental Body“ (as defined in Section 3.1(e)).

1.3                               [Reserved]

1.4                               Consideration

For and in consideration of the sale to the Purchasing Entities of the Purchased Assets, the Purchasing Entities shall (i) at Closing pay to UNOVA (as agent for the Selling Entities) the “Purchase Price“ (as defined in Section 1.5(a)) in accordance with and to the extent provided in Section 1.5 and (ii) the Purchasing Entities shall, effective as of the Transfer Date, assume the “Assumed Liabilities“ (as defined in Section 1.6 and as limited by Section 1.7).

1.5                               Purchase Price and Payment; Deliveries at the Closing

(a)                                  Purchase Price

The purchase price for the Purchased Assets is $79,000,000 plus the assumption of the Assumed Liabilities (the “Purchase Price“).  The Purchase Price is subject to further adjustment following the Closing in accordance with Section 1.9.  To the extent any Indebtedness (as defined in Section 3.8(h)) is assumed by the Purchasing Entities at the Transfer Date, the amount of such Indebtedness shall be deducted from the Purchase Price.  For purposes of this Section 1.5 “Indebtedness“ means any contract, agreement or instrument under which any of the Selling Entities guarantees, endorses, or otherwise is, will or may become responsible for the obligations or liabilities of any third party in respect of the Business for money borrowed, advances made or goods or services purchased (other than endorsements for collection of negotiable instruments).

(b)                                  Payment of Purchase Price

At the “Closing“ (as defined in Section 2.1), the Purchasing Entities shall (i) pay and remit to UNOVA (as agent for the Selling Entities) $69,000,000 in cash (less any Indebtedness to be deducted pursuant to Section 1.5(a)) via wire transfers of immediately available funds to UNOVA’s bank accounts as indicated in Schedule 1.5(b), (ii) deliver to UNOVA a promissory note in the principal amount of $10,000,000 (the “Note“) substantially in the form attached hereto as Exhibit A and (iii) assume the Assumed Liabilities.

(c)                                  Deliveries at the Closing

At the Closing,

(i)                                     the Selling Entities will deliver to the Purchasing Entities the various certificates, instruments, and documents referred to in Article 6; and

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(ii)                                  the Purchasing Entities will deliver to the Selling Entities the various certificates, instruments, and documents referred to in Article 7.

(d)                                  Purchase Price Allocation

(i)                                     Allocation to UK and US Assets

The parties agree that the Purchase Price shall be allocated as follows:  $53,333,333 plus the amount of the Assumed Liabilities of or relating to the US ▇▇▇▇▇▇ Group shall be allocated to the US Purchased Assets, and $25,666,667 plus the amount of the Assumed Liabilities of or relating to the UK ▇▇▇▇▇▇ Group shall be allocated to the UK Purchased Assets.

(ii)                                  Section 1060 Allocation

Within six (6) months after the Transfer Date, Buyer US (on behalf of itself and the other Purchasing Entities) shall prepare and deliver to UNOVA an allocation of the Purchase Price and the Assumed Liabilities among the US Purchased Assets and the UK Purchased Assets sold to the Purchasing Entities in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code“), and the regulations thereunder (the “Section 1060 Allocation“).  If UNOVA does not object to the Section 1060 Allocation prepared by Buyer US within 30 days after receipt thereof, such allocations shall be final for purposes of this Agreement.  If UNOVA objects to the Section 1060 Allocation within 30 days after receipt thereof, Buyer US and UNOVA shall meet promptly and in a good faith attempt to resolve any objections of UNOVA and to use their best efforts to agree upon the allocation.  In the event Buyer US and UNOVA are unable to resolve their differences over the Section 1060 Allocation, such differences shall be resolved by the Independent Firm (as defined in Section 1.9(d) in accordance with Section 1.9(d).  The Parties shall cooperate fully with each other and make available to each other such Tax data and other information as may be reasonably required in order to timely complete the Section 1060 Allocation and any other required statements or schedules.  Except as required pursuant to applicable Law or a determination (as defined in Section 1313 of the Code or any similar provision of Law), the Parties and their Affiliates (as defined below) shall report the Transactions for all Tax purposes consistently with the Section 1060 Allocation.  For purposes of this Agreement, “Affiliate“ means a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the first mentioned Person.  To the extent that the parties require allocations of the Purchase Price and the Assumed Liabilities at or prior to Closing, including for United Kingdom Law purposes, then the parties shall endeavor to cooperate fully with each other to agree upon such allocations on or prior to the Transfer Date

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1.6                               Assumed Liabilities

Upon the terms and subject to the conditions of this Agreement and in reliance upon the representations, warranties and agreements herein set forth, the Purchasing Entities shall, effective at the time of the Transfer Date, assume, perform and discharge all of the following debts, liabilities or obligations of the Selling Entities (collectively, the “Assumed Liabilities“):

(a)                                  All liabilities arising out of or relating primarily to the Business and recorded on the June Balance Sheet and not discharged as of the Transfer Date (other than any Excluded Liabilities thereon);

(b)                                 All current liabilities arising out of or relating primarily to the Business and incurred in the ordinary course of business since the June Balance Sheet Date that would have been required by GAAP, consistently applied, to have been recorded on the June Balance Sheet if they had arisen prior to the June Balance Sheet Date, but only to the extent set forth on the Closing Balance Sheet (as defined in Section 1.9(a)), other than any Excluded Liabilities thereon and other than the liabilities described in Sections 1.6(c), 1.6(f), 1.6(g), 1.6(h), 1.6(i), 1.6(j), 1.6(l), 1.6(m) and 1.6(n) below which are assumed without regard to the amounts set forth on the Closing Balance Sheet;

(c)                                  All liabilities and obligations of the Selling Entities in respect of (i) the Purchased Contracts and (ii) those contracts or other legally binding commitments that are the type required to be disclosed in the Schedules but are not so disclosed because they fall below the minimum threshold amount or materiality of the agreement or commitments required to be so disclosed and which are assigned to the Purchasing Entities other than in the case of clauses (i) and (ii), liabilities or obligations attributable to any failure by the Selling Entities to comply with the terms thereof;

(d)                                 Accrued payroll and vacation pay for “Continuing Employees“ (as defined in Section 8.4(a)) but only to the extent of the reserve therefor shown on the Closing Balance Sheet, excluding any accrued amounts that are required by Law to be paid by the Selling Entities on or prior to the Transfer Date;

(e)                                  Accrued sales commissions to Continuing Employees and to third parties in respect of the Business, but only to the extent of the reserve therefor shown on the Closing Balance Sheet;

(f)                                    All losses, debts, liabilities and obligations with respect to products sold or serviced (whether or not under warranty) by the Selling Entities in respect of the Business, including liabilities and obligations for and with respect to any refunds, adjustments, allowances, repairs, exchanges, returns and warranty but excluding Product Liability, (as defined in Section 1.6(h)) which is covered by sub-clause (h) below (and any other Excluded Liabilities);

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(g)                                 Any claim, debt, liability or obligation for workers compensation (other than such debt, liability or obligation that constitutes an Excluded Liability), automobile or general liability in respect of the Business to the extent such claims arise from events, actions or occurrences following the Transfer Date;

(h)                                 Any claim, debt, liability or obligation for product liability claims, including bodily injury, death or property damage arising from the use or operation of products manufactured, sold or serviced in whole or in part in the Business (“Product Liability“) to the extent such claims arise from events, actions or occurrences following the Transfer Date;

(i)                                     Environmental Liabilities (as defined below) arising from or relating in any way to (i) actions occurring or conditions existing on or before the Transfer Date, where such actions or conditions do not constitute a violation of “Environmental Laws“ (as defined in Section 3.6(f), as modified by Section 1.7(j)), or (ii) actions occurring or conditions coming into existence after the Transfer Date; provided, however, that with respect to the Waynesboro Facility and the South Beloit Facility, which the Purchasing Entities will be leasing from the Selling Entities after the Transfer Date, the Purchasing Entities shall not assume any Environmental Liabilities arising from or relating in any way to actions occurring or conditions existing on or before the Transfer Date (whether or not a violation of Environmental Laws) arising from or relating in any way to actions occurring or conditions coming into existence after the Transfer Date except to the extent such actions or conditions are caused by the Purchasing Entities.  For purposes of this Agreement, “Environmental Liabilities“ means any and all liabilities arising in connection with or in any way relating to the Business, the Purchased Assets or the Real Property, whether contingent or fixed, actual or potential, known or unknown, which arise under or relate to matters governed by Environmental Laws;

(j)                                     Any claim, debt, liability or obligation relating to the ▇▇▇▇▇▇ Pension Plan (as defined in Section 5.8), including, without limitation, in respect of (i) benefits transferred to the ▇▇▇▇▇▇ Pension Plan from the UNOVA Pension Fund, whether before, on or after the Transfer Date (which transferred benefits shall include any claim, debt, liability or obligation in respect of the provision of those benefits in a manner complying with Article 141 (formerly Article 119) of the Treaty of Rome and Section 62 of the Pensions Act 1995), (ii) any liability in respect of the levy to fund the Pension Protection Fund payable pursuant to the Pensions Ac▇ ▇▇▇▇ ▇nd (iii) contributions in respect of the period prior to the Transfer Date which have not become due and payable before the Transfer Date other than contributions deducted by UNOVA UK from members’ salaries before the Transfer Date and not paid to the ▇▇▇▇▇▇ Pension Plan by that date;

(k)                                  Any claim, debt, liability or obligation arising from any progress payment, down payment or advance payment received from any customer of the Business to the extent of the reserve therefor on the Closing Balance Sheet;

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(l)                                     Any claim, debt, liability or obligation arising out of in respect of or as a result of the employment or termination of employment of any Continuing Employee by the Purchasing Entities (other than Excluded Liabilities);

(m)                               Any actions, claims, proceedings, losses, damages, payments, penalties, costs or expenses suffered or incurred in relation to or arising out of any personal injury as a result of a person’s exposure at any time after the Transfer Date to any and all asbestos and/or asbestos-containing materials, lead and/or lead-containing materials, or mold (whether or not the presence of such contaminants constitutes a violation of Environmental Laws) (collectively, “Contaminants“) present, discharged or released at, or migrating from any property owned, occupied, controlled or used by the Purchasing Entities in respect of the Business; provided, however, that for any personal injury that is determined to have been caused by exposure to Contaminants as described in this subsection 1.6(m) that relates to periods of exposure before and after the Transfer Date, the loss arising from such personal injury shall be deemed to have occurred ratably during the entire period of such exposure, and the Purchasing Entities’ liability for such injury shall be limited to a pro rata portion of the losses based on the period of exposure that occurred after the Transfer Date; and

(n)                                 All FAS 106 liabilities relating to the Retiree Medical Plan (as defined in Section 5.9).

1.7                               Excluded Liabilities

Notwithstanding any provision in this Agreement or any other writing to the contrary, the Purchasing Entities are assuming only the Assumed Liabilities and are not assuming any other liability or obligation of the Selling Entities (or any predecessor owner of all or part of its business and assets) of whatever nature whether presently in existence or arising or asserted hereafter.  All such other liabilities and obligations shall be retained by and remain obligations and liabilities of the Selling Entities (collectively, the “Excluded Liabilities“).  Without limiting the foregoing, none of the following shall be Assumed Liabilities for the purposes of this Agreement:

(a)                                  Any debt, liability or obligation of the Selling Entities in respect of the Business for Taxes that relate to periods ending on or prior to the Transfer Date (including any Taxes that arise as a result of the Transactions), except as otherwise provided in Section 8.7(b);

(b)                                 Any intercompany payable balances in respect of the Business due to UNOVA or any of its subsidiaries (other than intercompany trade payables between the ▇▇▇▇▇▇ Group);

(c)                                  Any claim, debt, liability or obligation for workers compensation, automobile or general liability in respect of the Business, to the extent such claims arise from events, actions or occurrences on or prior to the Transfer Date, other than a claim, debt, liability or obligation to which Section 1.6(j) applies;

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(d)                                 Any claim, debt, liability or obligation to the extent related to any of the other Excluded Liabilities or any of the Excluded Assets, other than a claim, debt, liability or obligation to which Section 1.6(j) applies;

(e)                                  Any liabilities of the Selling Entities arising under, or relating to the execution, delivery or consummation of, this Agreement and the transactions contemplated hereby;

(f)                                    Any liabilities of the Selling Entities for Indebtedness (as defined by Section 3.8(h)), including, without limitation, the Indebtedness set forth on Schedule 3.8(h) and Schedule 3.2(d);

(g)                                 Any claim, debt, liability or obligation under Employee Benefit Plans other than the Assumed Liabilities set forth in Sections 1.6(d), 1.6(e), 1.6(j) and 1.6(n);

(h)                                 Any claim, debt, liability or obligation under the UNOVA Pension Fund, other than in respect of benefits transferred to the ▇▇▇▇▇▇ Pension Plan, whether before, on or after the Transfer Date (which transferred benefits shall include any claim, debt, liability or obligation in respect of the provision of those benefits in a manner complying with Article 141 (formerly Article 119) of the Treaty of Rome and Section 62 of the Pensions Act 1995);

(i)                                     Any claim, debt, liability or obligation for Product Liability arising from the use or operation of products manufactured, sold or serviced (in whole or in part) in the Business to the extent such claims arise from events, actions or occurrences on or prior to the Transfer Date;

(j)                                     Environmental Liabilities arising from or relating in any way to (i) actions occurring or conditions, whether known or unknown, existing on or before the Transfer Date, where such actions or conditions constitute a violation of Environmental Laws, or (ii) with respect to the Waynesboro Facility and South Beloit Facility, which the Purchasing Entities will be leasing from the Selling Entities after the Transfer Date, actions occurring or conditions coming into existence after the Transfer Date to the extent such actions or conditions are not caused by the Purchasing Entities.  For purposes of this Section 1.7(j), the known contamination on the Waynesboro Facility, including both the contamination being addressed by the Selling Entities in accordance with Pennsylvania’s Act 2 voluntary cleanup program and the chlorinated volatile organic compound contamination that has migrated onto the Waynesboro Facility from the adjacent Teledyne facility, shall be deemed a condition existing before the Transfer Date and to constitute an Excluded Liability;

(k)                                  All claims, debts, liabilities and obligations pursuant to violations of applicable Laws arising from, by or in connection with the Selling Entities, the Business, the Purchased Assets, or the Real Property, in each case occurring or existing on or before the Transfer Date, other than claims, debts, liabilities or obligations to which Section 1.6(j) applies;

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(l)                                     Those pending or threatened litigation matters identified on Schedule 3.14;

(m)                               Any actions, claims, proceedings, losses, damages, payments, penalties, costs or expenses suffered or incurred in relation to or arising out of any personal injury as a result of a person’s exposure at any time before the Transfer Date to any and all Contaminants (as defined in Section 1.6(m)) present, discharged or released at, or migrating from any property owned, occupied, controlled or used by the Selling Entities in respect of the Business; provided, however, that for any personal injury that is determined to have been caused by exposure to Contaminants as described in this subsection 1.7(m) that relates to periods of exposure before and after the Transfer Date, the loss arising from such personal injury shall be deemed to have occurred ratably during the entire period of such exposure, and the Selling Entities’ liability for such injury shall be limited to a pro rata portion of the losses based on the period of exposure that occurred prior to the Transfer Date;

(n)                                 all claims, losses, debts, liabilities and obligations for compensation to Employees which are set forth in the certain letter dated September 15, 2005, and updated as of September 22, 2005 from UNOVA to counsel for CFL; and

(o)                                 accrued bonuses payable to Continuing Employees as of the Transfer Date and liabilities associated with amounts withheld from employee salaries to the extent withheld as of the Transfer Date.

1.8                               Transfer of English Owned Real Property and Obtaining English Reversioner’s Consent

For the purposes of this Section 1.8, the following definitions shall apply:

(i)                                     “Actual Completion Date“ means in relation to each of the U.K. Properties the date on which that property is transferred, conveyed or assigned to the Purchasing Entity.

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

(iii)                               “Freehold Property“ means the U.K. freehold property located in the United Kingdom as described in Schedule 3.6(a).

(iv)                              “Landlord’s Consent“ means any reversioner’s consent to an assignment required under the terms of the lease relating to the Leasehold Property.

(v)                                 “Leasehold Property“ means the leasehold property located in the United Kingdom occupied by the Selling Entities as described (including the particular of the current rent provided) in Schedule 3.6(c) and “Leasehold Property“ means any one of them.

(vi)                              “Registered Properties“ means the U.K. Property numbered 4 in Schedule 3.6(a);

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(vii)                           “U.K. Properties“ means those U.K. freehold and leasehold premises occupied by the relevant Selling Entities which are set forth in Schedule 3.6(a) and 3.6(c).

(a)                                  Matters Affecting the U.K. Properties

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

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

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

(iii)                               All local land charges; and

(iv)                              All notices served and ordered, demand, proposals or requirements made, by any local or other public authorities.

(b)                                  Landlord’s Consents

(i)                                     The sale of the Leasehold Property is subject to the relevant Selling Entity which occupies the relevant Leasehold Property obtaining Landlord’s Consent in respect of that property.

(ii)                                  The relevant Selling Entities shall as soon as reasonably practicable and at it’s own cost apply for and use all reasonable endeavours to obtain Landlord’s Consent as soon as possible.

(iii)                               The Purchasing Entity and the Buyer UK (as appropriate) shall use all reasonable efforts to assist the relevant Selling Entity in obtaining Landlord’s Consent and in particular shall promptly provide all such information and references as the relevant Selling Entity may reasonably require in relation to the obtaining of Landlord’s Consent and such other information as the landlord may be entitled to request under the terms of the relevant property lease.

(iv)                              As appropriate, the Purchasing Entities and Buyer UK will enter into such covenants as may be reasonably required by the landlord of the Leasehold Property and provide such additional security for the performance by Buyer UK of the tenant’s covenants as the landlord may reasonably require.

(v)                                 Buyer UK shall on and from the Transfer Date be permitted to enter into occupation of the Leasehold Property as licensee of the relevant Selling Entity subject to the following provisions:

(A)                              Buyer UK shall be entitled to receive all profit and other income from the Leasehold Property;

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(B)                                Buyer UK shall pay or indemnify the relevant Selling Entity against all outgoings and expenses attributable to Buyer UK’s period of occupation including all sums payable under the property lease of the Leasehold Property, in respect of the period after the Transfer Date;

(C)                                The Purchasing Entity and Buyer UK shall observe and perform all the covenants and conditions (excluding any alienation covenants) contained or referred to in the property lease relating to the Leasehold Property (save that in respect of any covenants relating to the repair of the Relevant Property Buyer UK’s liability shall be limited to keeping the Relevant Property in as good repair as when Buyer UK went into occupation) and indemnify the relevant Selling Entity for any costs or liabilities as a result of a breach or non-observance or non-performance and such covenants and conditions;

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

(E)                                 The Purchasing Entity and Buyer UK shall not carry out any activity for which the consent of any third party may be required under the terms of the property lease relating to the Leaseheld Property without such consent being obtained or carry on any activity which would constitute a breach or non-observance of the covenants and conditions of the relevant property lease.

(c)                                  Completion

(i)                                     If the Landlord’s Consent is refused or has not been obtained within 12 months of the Transfer Date then both parties consider that the relevant landlord is acting unreasonably in refusing or withholding consent the relevant Selling Entity shall at the request of the Purchasing Entity and at the joint expense of the relevant Selling Entity and Purchasing Entity seek the opinion of a leading Counsel specializing in landlord and tenant law on whether the landlord is unreasonably withholding or has unreasonably refused consent to the assignment.

(ii)                                  If such leading Counsel advises that the landlord is unreasonably withholding or has unreasonably refused consent the relevant Selling Entity shall at the joint expense of both parties apply to a court of competent jurisdiction for a declaration that the landlord is acting unreasonably.

(iii)                               If the declaration is obtained the assignment of the Relevant Property shall be completed five business days thereafter.

(iv)                              If the declaration referred to in Section 1.8(c)(ii) is refused or such leading Counsel advises that consent to assign will be refused or withheld the Selling Entities shall as soon as reasonably practicable apply to the relevant landlord(s) for all necessary consents to the grant of an underlease of the Relevant Property to the Buyer UK Entity for a term equal to the residue of the term of the relevant property lease less three days at a rent equal to and otherwise on the same terms as the said lease and the provisions of

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Sections 1.8(b)(ii) and 1.8(b)(iii) shall apply to the obtaining of such consent and if such consent is obtained the Selling Entity shall grant and the Buyer UK shall accept such underlease on the date five business days after the date of receipt of such consent.

(d)                                  Further Completion

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

(A)                              In the case of the Freehold Property, and the Leasehold Property if Landlord’s Consent has been obtained on the Transfer Date; and

(B)                                In the case of the Leasehold Property in respect of which Landlord’s Consent is necessary but has not been obtained by the Transfer Date, by the date five business days after Landlord’s Consent has been obtained.

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

(e)                                  Assurances

The Assurances will contain (where applicable):

(i)                                     A covenant by way of indemnity (but not further or otherwise) by the Purchasing Entity with the relevant Selling Entity that the Purchasing Entity and its successors in title will observe and perform:

(A)                              The exceptions, reservations and covenants contained or referred to in the case of each of the Registered Properties, the entries (except those relating to charges to secure the repayment of money) appearing in the charges registers of their respective title numbers;

(B)                                In the case of the Leasehold Property, the covenants and conditions on the part of the tenant contained in the relevant property leases; and will indemnify and keep indemnified the relevant Selling Entity against all actions, claims, demands and proceedings taken or made against the relevant Selling Entity and all costs, damages, expenses, liabilities and losses incurred by the relevant Selling Entity as a result of the breach, non-performance or non-observance of the same; and

(ii)                                  (In the case of the Leasehold Properties) an agreement and declaration to the effect that the Selling Entity shall not be liable under any of the covenants set out in Sections 3 or 4 of the Law of Property (Miscellaneous Provisions) Ac▇ ▇▇▇▇ ▇or the consequences of any breach of the terms of the property leases relating to their state and condition.

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(iii)                               The consideration for the Freehold Property determined as set forth in Section 1.5(d)

1.9                               Closing Balance Sheet

(a)                                  Definition of Closing Balance Sheets

The “Closing Balance Sheet“ shall be a balance sheet reflecting the US Purchased Assets and Assumed Liabilities relating to the US ▇▇▇▇▇▇ Group calculated in US dollars and the UK Purchased Assets and Assumed Liabilities relating to the UK ▇▇▇▇▇▇ Group calculated in US dollars (converting UK pounds in US dollars at the spot rate published in the Wall Street Journal and quoted by Reuters and other sources applicable to banks trading in amounts of $1 million or more, as of 4 p.m. Eastern Time (the “WSJ Rate“) on the Transfer Date) as of the Transfer Date, and prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP“), applied on a basis consistent with the December Balance Sheet and the June Balance Sheet (as such terms are defined in Section 3.2(a) and Section 3.2(b), respectively); provided, however, the Closing Balance Sheet shall reflect the adjustments (the “Agreement Adjustments“) that are required to exclude the Excluded Assets and Excluded Liabilities.

(b)                                  Preliminary Closing Balance Sheets

Within 60 days following the Transfer Date, Buyer US, with the assistance and cooperation of the Selling Entities, shall prepare and deliver to UNOVA a balance sheet reflecting the US Purchased Assets and Assumed Liabilities relating to the US ▇▇▇▇▇▇ Group calculated in US dollars and the UK Purchased Assets and Assumed Liabilities relating to the UK ▇▇▇▇▇▇ Group calculated in US dollars (converting UK pounds in US dollars at the WSJ Rate on the Transfer Date), prepared as provided in paragraph 1.9(a) above (the “Preliminary Closing Balance Sheet“).  Buyer US shall also prepare and deliver to UNOVA, within six business days following the Transfer Date, the month-end financial and related business data for the Business reasonably necessary to allow the Selling Entities to prepare their financial reports consistent with the Selling Entities’ customary practices.  After delivery of the Preliminary Closing Balance Sheet, the Purchasing Entities shall provide UNOVA and its accountants reasonable access during normal business hours to materials used in the preparation of the Preliminary Closing Balance Sheet.

(c)                                  Review of Preliminary Closing Balance Sheet

UNOVA shall have 30 days following its receipt of the Preliminary Closing Balance Sheet (the “Review Period“) to review the same for compliance with GAAP and the Agreement Adjustments.  On or before the expiration of the Review Period, UNOVA shall deliver to Buyer US a written statement accepting or objecting to the Preliminary Closing Balance Sheet.  In the event that UNOVA shall object to the Preliminary Closing Balance Sheet, such statement (the “Statement of Objections“) shall include a detailed itemization of UNOVA’s objections and the reasons therefor.  If UNOVA does not deliver to Buyer US the Statement of Objections within the Review Period, the Selling Entities shall be deemed to

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have accepted the Preliminary Closing Balance Sheet.  If UNOVA delivers to Buyer US, the Statement of Objections within the Review Period, the Selling Entities shall be deemed to have waived any objections to the Preliminary Closing Balance Sheet that are not included in the Statement of Objections.

(d)                                  Finalization of Closing Balance Sheet

In the event that UNOVA shall accept or shall be deemed to have accepted the Preliminary Closing Balance Sheet as prepared and delivered by Buyer US, the Preliminary Closing Balance Sheet shall constitute the Closing Balance Sheet for purposes of this Agreement.  In the event, however, that UNOVA shall object to the Preliminary Closing Balance Sheet, UNOVA and Buyer US shall promptly meet and in good faith attempt to resolve the issues that are in dispute.  In the event that the issues in dispute shall not have been resolved within 30 days following Buyer US’s receipt of UNOVA’s Statement of Objections, such disputed issues shall be resolved by KPMG LLP, or another independent certified accounting firm jointly selected by UNOVA and Buyer US (the “Independent Firm“), provided the Parties shall attempt to reach a final resolution of any matters which remain in dispute at the earliest practicable date.  The decision of the Independent Firm shall be final and binding on the Parties.  The costs and expenses of the Independent Firm in reviewing the issues in dispute shall be borne fifty percent (50%) by Buyer US and fifty percent (50%) by UNOVA.  The Preliminary Closing Balance Sheet, as adjusted to reflect the adjustments agreed upon by such Parties or determined by the Independent Firm, shall constitute the Closing Balance Sheet for purposes of this Agreement.

(e)                                  Net Working Asset Payment

If the Net Working Assets (as defined below) shown on the final Closing Balance Sheet (calculated in US dollars and converting UK pounds into US dollars at the WSJ Rate on the Closing Date) are greater than 29% of trailing 12-month revenues of the Business (the “Net Working Asset Target“), then Buyer US and/or Buyer UK shall within five business days of the final determination of the Closing Balance Sheet pay UNOVA in US dollars by wire transfer of immediately available funds an amount equal to such excess (the “Upward Net Working Asset Adjustment“), plus interest on such excess amount from the Transfer Date until the date of payment at LIBOR plus 0.25%.  If the Net Working Assets as shown on the Closing Balance Sheet are less than the Net Working Asset Target, then UNOVA shall within five business days of the final determination of the Closing Balance Sheet pay Buyer US and/or Buyer UK in US dollars by wire transfer of immediately available funds an amount equal to their proportionate share of such shortfall  (the “Downward Net Working Asset Adjustment“), plus interest on their proportionate share of such shortfall from the Transfer Date until the date of payment at LIBOR plus 0.25%.  For purposes of this Agreement, “Net Working Assets “ means, as of the Transfer Date, the excess of the sum of total accounts receivable and inventories over the sum of progress ▇▇▇▇▇▇▇▇ and total accounts payable on the Closing Balance Sheet.  In the event of a Downward Net Working Asset Adjustment, the Purchasing Entities shall be entitled to satisfy claims pursuant to this Section 1.9 from the Note by reducing the principal amount outstanding under such Note by

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an amount equal to the payment due from UNOVA in respect of such claims.  “LIBOR“ means an annual rate of interest equal to the annual rate in effect in the London Interbank Market applicable to one month deposits of U.S. dollars as reported in the Wall Street Journal on the second business day preceding the Transfer Date.  If the Wall Street Journal is not published on such business day or does not report such rate, such rate shall be as reported by such other publication or source as UNOVA and Buyer US may mutually select.

(f)                                    Limitations on Certain Claims

Consistent with Section 11.6(c), the Purchasing Entities acknowledge and agree that, following the final determination of the Closing Balance Sheet the Purchasing Entities may not bring any claim against the Selling Entities, and the Selling Entities shall not have any liability to the Purchasing Entities, relating to:  (a) the noncollectability of any accounts receivable or the amount of the related bad debt reserve, (b) inventory obsolescence or the amount of the related inventory reserve, (c) loss contracts for which a reserve is reflected on the Closing Balance Sheet or (d) warranty claims or the amount of the related warranty reserve, other than in the case of fraud or willful misconduct and other than in respect of any claims relating to a breach of the representations and warranties in Section 3.12.

1.10                        Right to Contest

The assumption and agreement by the Purchasing Entities to pay, perform and discharge the Assumed Liabilities shall not prohibit the Purchasing Entities from contesting with a third party, in good faith and at the expense of the Purchasing Entities, the amount, validity or enforceability of any thereof; provided, however, that the Purchasing Entities shall indemnify the Selling Entities for any Loss (as defined in Section 11.1) arising from such contest, other than in circumstances where the Purchasing Entities are entitled to indemnification for the Loss arising from such contest pursuant to Section 11.

1.11                        Nonassignable Contracts and Rights

To the extent that the assignment by the Selling Entities of any contract, property, right or asset to be assigned to the Purchasing Entities pursuant to this Agreement shall require the consent or approval of any other party, and such consent or approval shall not have been obtained on or prior to the Transfer Date, this Agreement shall not constitute a contract to assign the same if an attempted assignment would constitute a breach thereof or would in any way adversely affect the rights of the Selling Entities (or any Purchasing Entity, as assignee) thereunder.  If any such consent or approval is required but not obtained on or prior to the Transfer Date, the Parties covenant and agree that in such case, the applicable Selling Entity shall continue to deal as instructed by the Purchasing Entities with the other contracting party or parties, with the benefits of such contract, property, right or asset after the Transfer Date accruing to the benefit of the applicable Purchasing Entity and the liabilities and obligations thereunder being performed by the applicable Purchasing Entity on such Selling Entity’s behalf; such Selling Entity shall hold all moneys received thereunder for the benefit of the applicable Purchasing Entity and shall pay the same to the applicable Purchasing Entity within one business day after receipt thereof; and the Parties shall use

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reasonable best efforts (but without payment of any penalty or fee by any Party other than by the Selling Entities as set forth in Schedule 1.11) to obtain and secure any and all consents and approvals that may be necessary to effect the valid sale, transfer or assignment of the same to the applicable Purchasing Entity without change in any of the material terms or conditions thereof, including without limitation the formal assignment or novation of any of the same, if so required by the Purchasing Entities.  The Parties further covenant and agree to make or complete such transfers as soon as reasonably possible and to cooperate with each other in any other reasonable arrangement designed to provide for the applicable Purchasing Entity the benefits of and to such properties, rights or assets and to provide for the performance by the applicable Purchasing Entity of the liabilities and obligations related thereto.

1.12                        Value Added Tax

(a)                                  It is intended that the UK Purchased Assets shall be transferred to Buyer UK as a going concern and that the provisions of Article 5 of the Value Added Tax (Special Provisions) Order 1995 (SI 1995/1268) shall apply to such transfer and the sale and purchase of the UK Purchased Assets and each of UNOVA UK and Buyer UK shall use its reasonable endeavors to procure that the sale of the UK Purchased Assets is treated as neither a supply of goods nor a supply of services under the Article.

(b)                                  Notwithstanding sub-clause (a) above, all sums paid or payable under this Agreement by Buyer UK to UNOVA UK are exclusive of any VAT which is or may become chargeable on the supply to supply for which sums form the whole or part of the consideration for VAT purposes.

(c)                                  UNOVA UK and Buyer UK shall within 30 days of the Closing give notice of such transfer to the appropriate office of HM Revenue & Customs in accordance with such regulations and requirements as may be applicable.

(d)                                  Buyer UK warrants to UNOVA UK that:

(i)                                     after the Closing the UK Purchased Assets are to be used by Buyer UK in carrying on the same kind of business as that carried on by UNOVA UK before the Closing and are not to be assigned immediately after Closing to any other person;

(ii)                                  Buyer UK is already or will as a result of such transfer of the UK Purchased Assets immediately on Closing become a taxable person (as defined in Section 3 of the Value Added Tax Act 1994);

(iii)                               it has made or will make a valid election under paragraph 2 of Schedule 10 VATA in respect of the Freehold Property effective from no later than the Transfer Date and has given or will, no later than the Transfer Date, give written notification of the election to and, if appropriate, has obtained the prior written permission of HM Revenue and Customs as required by paragraph 3 of Schedule 10;

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(iv)                              Paragraph 5(2B) of the Value Added Tax (Special Provisions) Order 1995 (SI 1995/1268) as amended by the Value Added Tax (Special Provisions) Order 2004 (SI 2004/779) does not apply to Buyer UK.

(e)                                  Subject to Section 1.12(f), if HM Revenue and Customs determine in writing that VAT is payable on all or part of the consideration payable for the UK Purchased Assets pursuant to this Agreement, Buyer UK shall pay the amount of any VAT which may properly be chargeable on the sale of the UK Purchased Assets pursuant to this Agreement on the later of:

(i)                                     the date prior to the last business day on which UNOVA UK was liable to account to HM Revenue and Customs for such VAT without incurring a potential liability to penalties and interest; and

(ii)                                  the date which is five business days after the delivery of a valid tax invoice and a copy of the written determination of HM Revenue and Customs in respect thereof;

(f)                                    if after Buyer UK has paid an amount in respect of VAT pursuant to this Agreement, HM Revenue and Customs determines that such VAT was not actually payable, then:

(i)                                     UNOVA UK will repay such amount to Buyer UK forthwith on receipt of such written determination from HM Revenue and Customs; or

(ii)                                  If UNOVA UK has already accounted for such amount in respect of VAT at the time it receives such determination, UNOVA UK shall reclaim such amount from HM Revenue and Customs and repay such amount to Buyer UK on receiving repayment of or obtaining credit in respect thereof.

(g)                                 If HM Revenue and Customs determines in writing that VAT is payable on all or part of the consideration payable for the UK Purchased Assets pursuant to this Agreement:

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(i)                                     UNOVA UK shall as soon as reasonably practicable notify Buyer UK of such written determination.  Buyer UK may within 10 business days of receipt of such notification from UNOVA UK request that UNOVA UK contest, at Buyer UK’s cost, in writing such written determination from HM Revenue and Customs.  UNOVA UK shall give Buyer UK a reasonable opportunity to comment on any relevant communication proposed to be sent to HM Revenue and Customs in this regard (making available any information and documents in its control required to establish to HM Revenue and Customs and any tribunal or court that no liability, or a reduced liability, arises on the Buyer UK or any other company under section 44 of VATA 1994 as a result of the sale of the UK Purchased Assets.  Until such reasonable opportunity to comment has been given UNOVA UK may not, without Buyer UK’s written agreement not to be unreasonably withheld, agree, compromise, settle or make any other arrangement with HM Revenue and Customs which would result in Buyer UK incurring any liability under Section 1.12(b) above in respect of VAT; and

(ii)                                  VAT shall be treated as payable for the purposes of this Agreement only if HM Revenue and Customs has so confirmed in writing after full disclosure of all material facts and stated in writing that Buyer UK’s VAT office agrees with this treatment, and after the taking of any steps by Buyer UK or UNOVA UK as are contemplated by this Section 1.12(g).

Subject to (i) and (ii) above, to the extent that HM Revenue and Customs confirms in writing its original determination Buyer UK shall not have further rights under this Section 1.12(g).

UNOVA UK shall not be required to contest such determination of HM Revenue and Customs if it reasonably determines that to do so would have a material effect on the future conduct of the business of UNOVA UK or the Selling Entities or affect the rights or reputation of any of them.

(h)                                 UNOVA UK shall apply to HM Revenue and Customs and endeavor to obtain a direction that all records referred to in Section 49 of the Value Added Tax ▇▇▇ ▇▇▇▇ may be obtained by UNOVA UK.  If such direction is obtained, UNOVA UK will preserve the records for such period as may be required by law, and shall allow Buyer UK, on reasonable notice, to inspect the records and take copies thereof.  If such direction is refused by HM Revenue and Customs, then UNOVA UK shall within 10 business days after receipt of notification of such refusal (or, if later, Closing) deliver to Buyer UK the VAT business records relating to the UK Purchased Assets.

(i)                                    UNOVA UK is registered for VAT under registration number ▇▇▇-▇▇▇▇▇-▇▇▇▇▇.

(j)                                    Pursuant to paragraphs 2 and 3 of Schedule 10 VATA 1994 UNOVA UK has made an effective election to waive exemption in relation to the English Owned Real Property (an “Election“), has notified HM Revenue & Customs of such Election within the prescribed time limits for the Election to be valid and neither it nor any relevant associate as

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defined in paragraph 3 of Schedule 10 VATA 1994 has revoked or will revoke such Election prior to Closing.

(k)                                All VAT payable in respect of goods and services supplied or deemed to be supplied by UNOVA UK in connection with the UK Purchased Assets prior to Closing and all interest payable thereon and penalties attributable thereto shall be paid to HM Revenue and Customs by UNOVA UK.  UNOVA UK shall be entitled to receive and to retain for its own benefit all reimbursement or credit from HM Revenue and Customs for VAT borne by UNOVA UK on goods and services supplied to UNOVA UK prior to Closing and any payments received in respect of VAT overpaid to HM Revenue and Customs prior thereto.

(l)                                    In this Section 1.12:

(i)                                     “VAT“ means Value Added Tax chargeable pursuant to the VATA; and

(ii)                                  “VATA“ means the Value Added Tax ▇▇▇ ▇▇▇▇ and any legislation additional or supplemental thereto or amending or replacing it from time to time.

1.13                        UK Employees

UNOVA UK and Buyer UK acknowledge that:

(a)                                  the transfer of the UK Purchased Assets pursuant to this Agreement constitutes a relevant transfer for the purposes of the Transfer of Undertaking (Protection of Employment) Regulations 1981 (“Transfer Regulations“); and

(b)                                 the Employees of UNOVA UK (as listed in Schedule 3.13(a)(4)) will become employees of Buyer UK on the Transfer Date and UNOVA UK will use all reasonable efforts to assist in the transfer of such Employees to the employment of Buyer UK.

(Article 2 follows)

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ARTICLE 2.
Closing and Transfer Date

2.1                               Closing

Subject to satisfaction or waiver of the conditions contained in this Agreement, consummation of the purchase and sale of the US Purchased Assets and the other transactions provided for in this Agreement (the “Closing“) shall take place at the offices of ▇▇▇▇▇▇▇ Coie LLP, counsel for UNOVA, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ commencing at 8:00 a.m. Pacific Time on December 9, 2005 or at such other date or time or other place as the Parties may mutually agree upon in writing; provided, however, that the purchase and sale of the UK Purchased Assets shall occur at the offices of ▇▇ ▇▇▇▇▇▇ LLP, 222 ▇▇▇▇’▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on December 9 2005, or at such other date or time as the Parties may mutually agree upon in writing (such date, the “Transfer Date“).  The purchase and sale of the US Purchased Assets and the UK Purchased Assets and all other transactions provided in this Agreement shall be deemed to have occurred simultaneously and shall be effective at 11:59 p.m. (Eastern Time) on the Transfer Date, or at such other date or time as the Parties may mutually agree upon in writing.  The Parties acknowledge and agree that the date of Closing shall be automatically extended as may be required if the Closing shall not have occurred because either the time period under the HSR Act or any similar Law shall not have expired or any adverse action shall have been threatened or instituted in connection with the HSR Act or any similar Law, and all other conditions precedent in Articles 6 and 7 have been satisfied or are capable of being satisfied or, to the extent legally permissible, have been waived; provided, however, that the date of Closing shall in no event be extended beyond the Extended Deadline Date (as defined in Section 10.1(b)) without the prior written consent of the Parties.

2.2                               Notice and Right to Cure

At all times prior to the Transfer Date, the Parties shall promptly notify each other of the existence of any condition or the occurrence of any event which will or is likely to result in the failure to satisfy any one or more of the conditions set forth in Articles 6 and 7.  If any of such conditions shall not have been satisfied or waived on or by the date on which the Closing is otherwise scheduled, then, subject to Section 10.1(b) and provided that such Party is not in breach of this Agreement, the Party which is unable to meet such condition shall have a reasonable time and a reasonable opportunity to extend the Transfer Date (not to exceed fourteen business days) in order to satisfy, at its expense, such condition or conditions.