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Exhibit 2.9
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PURCHASE AND SALE AGREEMENT
By and Between
EATON CORPORATION
and
EATON SEMICONDUCTOR EQUIPMENT INC.
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INDEX
A Purchase and Sale Agreement
B General Bill of Sale
C General Assumption Agreement
D Assignment of Contracts
E Schedule 2.1.2 -- Transferred Real Property
F Schedule 2.1.3 -- Real Property Leases
G Schedule 2.1.6 -- Summary of Accounts Receivable
H Schedule 2.1.7 -- Patents and Licenses
I Schedule 2.2.5(d) -- Other Excluded Assets
J Schedule 2.1.12 -- Trademarks and Copyrights
K Schedule 3.1.7 -- Retained Environmental Matters
L Schedule 10.1 -- Eaton Corporation Employee Benefit Plans
M Limited Power of Attorney -- Eaton Semiconductor Equipment Inc.
N Limited Power of Attorney -- Eaton Corporation
[Schedules omitted. The registrant hereby agrees to furnish supplementally,
upon request, a copy of any omitted schedule or exhibit to this agreement.]
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered
into as of the 29th day of December, 1995, by and between EATON CORPORATION, an
Ohio corporation ("Eaton"), and EATON SEMICONDUCTOR EQUIPMENT INC., a Delaware
corporation ("ESEI").
WHEREAS, Eaton has conducted and presently conducts certain businesses
on a going concern basis through its Semiconductor Equipment Operations ("SEO"),
which designs, develops, manufactures, sells and leases equipment used in the
manufacture of semiconductors, such businesses (excluding Eaton's shares in SEN
and Eaton Semiconductor Limited and the assets held by and business conducted
through Eaton G.m.b.H., as hereinafter provided) being herein referred to as the
"Business";
WHEREAS, Eaton desires to sell and transfer, and ESEI desires to
acquire, all rights, properties and assets pertaining to the Business and
described in this Agreement (unless herein specifically provided to the
contrary) in consideration of (a) the issue and transfer by ESEI to Eaton of one
hundred (100) shares of the ESEI Stock (as hereinafter defined), (b) the
assumption and performance by ESEI of all the liabilities, obligations and
responsibilities of or related to the Business (unless herein specifically
provided to the contrary) and (c) the performance of certain other obligations,
all on the terms and subject to the conditions contained in this Agreement;
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NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, Eaton and ESEI hereby agree as
follows:
ARTICLE 1. DEFINITIONS
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As used in this Agreement, the following terms shall have the following
meanings:
Accounts Receivable As defined in Section 2.1.6.
Acquired Assets As defined in Section 2.1.
this Agreement As defined in the introductory paragraph
to this Agreement, together with all
Schedules hereto as set forth herein.
Assumed Liabilities As defined in Section 3.1.
the Business As defined in the first WHEREAS clause
of this Agreement.
Business Records As defined in Section 2.1.10.
Claims As defined in Section 11.1.
Closing As defined in Section 7.1.
Closing Date As defined in Section 7.1.
Closing Date Balance Sheet As defined in Section 5.4.
Computer and Financial As defined in Section 9.3.2.
Services Agreement
Consents As defined in Section 4.1(a).
Contracts As defined in Section 2.1.1 (a).
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Eaton As defined in the introductory
paragraph to this Agreement.
Eaton Employees As defined in Section 10.1.
Eaton Investment Plan As defined in Section 10.4.
Eaton Marks As defined in Section 9.2.1(a).
Eaton Welfare Plans As defined in Section 10.1.
Eligible Individuals As defined in Section 10.3(a).
Employees Those employees of Eaton or any
subsidiary of Eaton employed in the
Business, other than those employees, if
any, listed on Schedule 10.1, who accept
employment with ESEI as of or after the
Closing Date as a result of the
transactions contemplated by this
Agreement.
ERISA The Employee Retirement Income Security
Act of 1974, as amended. As defined in
the introductory paragraph to this
Agreement.
ESEI Stock The common stock of ESEI with each share
having a par value of one dollar
($1.00) each.
ESEI's Welfare Plans As defined in Section 10.3(a).
Excluded Assets As defined in Section 2.2.
Excluded Liabilities As defined in Section 3.3.
Fixed Assets As defined in Section 2.1.5.
Government Property As defined in Section 2.2.5(a).
Indemnitee As defined in Section 11.3.
Indemnitor As defined in Section 11.3.
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Intellectual Property Collectively, the properties set forth
and identified as Acquired Assets in
Sections 2.1.7 and 2.1.8.
Interest Rate A rate equal to the prime rate charged
by Chemical Bank, N.A. in New York, New
York.
Inventories As defined in Section 2.1.4.
IWOS As defined in Section 2.1.1(b).
Leaseholds As defined in Section 9.2.4.
Legal Proceedings As defined in Section 9.3.3(b)
Litigation Agreement As defined in Section 9.3.4.
Machinery and Equipment As defined in Section 2.1.5(a).
Net Book Value As defined in Section 5.2.
Patents As defined in Section 2.1.7.
Personal Property Leases As defined in Section 2.1.4.
Personal Property Taxes As defined in Section 9.3.8.
Products Any system, subsystem, product,
component part, service, study, project,
warranty work, computer hardware and
software, intellectual property or other
end product or service (whether
purchased, designed, developed or
manufactured by or for Eaton) marketed,
supplied, sold, leased or provided by or
for Eaton in the Business.
Real Property Leases As defined in Section 2.1.3.
Records As defined in Section 9.3.3(a).
Related Agreements As defined in Section 9.3.2.
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SEN Sumitomo Eaton Nova Corporation, a
Japanese corporation.
SEN License As defined in Section 2.2.8.
SEO or Operations The Semiconductor Equipment
Operations of Eaton.
Stock The ESEI Stock to be delivered to
Eaton pursuant to this Agreement.
Subsidiary Any corporation at least a majority of
the outstanding voting shares of which
is owned (either alone or through
Subsidiaries or together with
Subsidiaries) by Eaton or another
Subsidiary.
Technical Documentation As defined in Section 2.1.8.
Transferred Real Properties As defined in Section 2.1.3.
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ARTICLE 2. PURCHASE AND SALE OF ASSETS
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2.1 ACQUIRED ASSETS. Subject to and upon the terms and conditions
hereof, and in reliance upon the agreements of ESEI contained herein, Eaton
agrees to sell, convey, transfer, assign and deliver to ESEI, or cause to be
sold, conveyed, transferred, assigned and delivered to ESEI, and ESEI agrees to
purchase, acquire and accept from Eaton, at the Closing, all rights, properties
and assets owned by Eaton as of the Closing and which relate to Eaton's conduct
of the Business as the same shall exist on the Closing Date, including but not
limited to all assets reflected on the Closing Date Balance Sheet (all such
rights, properties and assets being hereinafter collectively called the
"Acquired Assets"), but excluding the Excluded Assets and those rights,
properties and assets that cannot or will not be sold, assigned, transferred or
delivered as set forth in Article 4. Without limiting the generality of the
foregoing, the Acquired Assets shall include all rights, title, claims and
incidents of interest of Eaton in and to the assets described in Sections 2.1.1
through 2.1.12 which relate to or are used in the Business as the same shall
exist as of the Closing, but excluding any such assets which form a part of the
Excluded Assets or cannot or will not be sold, assigned, transferred or
delivered as set forth in Article 4:
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2.1.1 CONTRACT RIGHTS. (a) All contracts, agreements, commitments,
sales and purchase orders to which Eaton is a party, and licenses as to which
Eaton is a licensee (including without limitation software licenses), in each
case which relate to the Business (other than the Real Property Leases and the
Personal Property Leases) (the "Contracts") and (b) all rights, title, claims
and incidents of interest of Eaton (i) as a supplier and vendor in and to the
interorganizational work orders which relate to the Business, and (ii) as a
purchaser and/or consumer in and to the interorganizational work orders which
relate to the Business ((i) and (ii) being herein collectively referred to as
"IWOs").
2.1.2 TRANSFERRED REAL PROPERTIES. The real property which Eaton owns
and which has been used solely in the Business and which is listed or described
on Schedule 2.1.2, together with all buildings, structures, fixtures and
improvements thereon and all appurtenances thereto (the "Transferred Real
Properties").
2.1.3 LEASED PROPERTY. The interests as lessee in all (a) real
property leased by Eaton from third parties and used in the Business, including
but not limited to the real property leases listed in Schedule 2.1.3 (the "Real
Property Leases"), including the buildings, structures, fixtures and
improvements
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leased thereunder, and (b) personal property leased by Eaton from third parties
and used in the Business (the "Personal Property Leases").
2.1.4 INVENTORIES. All inventory (including without limitation raw
materials, purchased components, work in process and partially or totally
finished Products) , operating supplies and packaging and shipping materials of
the Business owned by Eaton or in which Eaton has any rights or incidents of
interest and held in the possession of (a) the Operations, or (b) third parties
(i) who represent the Business in the sale of Products, (ii) who are suppliers
to the Business, or (iii) who are customers of the Business, in each case as of
the Closing Date (all of which are hereinafter collectively referred to as
"Inventories").
2.1.5 FIXED ASSETS. All of the following which are owned by Eaton or
in which Eaton has any rights or incidents of interest: (a) all presently
existing production, processing, maintenance, packaging and/or testing machinery
and equipment, business machines, tools, dies, molds, jigs, patterns, gauges,
production fixtures, material handling equipment, vehicles, office equipment and
computer equipment (together with all spare and maintenance parts) which are
used in or related to the Business, whether on or off the books of Eaton (all of
which are
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hereinafter collectively referred to as "Machinery and Equipment"), and (b) all
furniture, Leasehold improvements and other tangible personal property which are
used in or related to the Business, whether on or off the books of Eaton,
including without limitation such of the foregoing as (i) are located on, or are
in transit to, any facilities of the Business or (ii) are in the possession of
any third party by consignment, bailment or otherwise (all of which, together
with the Machinery and Equipment, are hereinafter collectively referred to as
"Fixed Assets").
2.1.6 ACCOUNTS RECEIVABLE. Subject to Article 4 hereof, the accounts
receivable, notes receivable, trade and otherwise (including without limitation
employee accounts receivable, trade sales, all billed, non-billed and unbilled
intercompany or intracompany accounts receivable), of the Business outstanding
on the books of the Business as of the Closing Date (the "Accounts Receivable"),
which are summarized on Schedule 2.1.6.
2.1.7 PATENTS. (a) Subject to any outstanding licenses described in
(b) below, all unexpired patents and design patents and pending applications for
grant of patents or design patents, including without limitation, reissues,
divisions, continuations, continuations-in-part and extensions
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of the foregoing, on inventions and discoveries which were originated at the
Business or developed by Eaton exclusively for use by the Business or were
acquired by Eaton exclusively for use by the Business and are owned by Eaton,
all of which are listed and identified in Schedule 2.1.7, together with the
right to sue for past infringement thereof (all of which are hereinafter
collectively referred to as "Patents").
(b) Except for the SEN License, all licenses currently in effect
granted by Eaton which relate to the Patents, including without limitation those
listed in Schedule 2.1.7.
2.1.8 TECHNICAL DOCUMENTATION. All technical documentation, know-how
and trade secrets which were originated at the Business, were developed by Eaton
exclusively for use by the Business or were acquired by Eaton exclusively for
use by the Business and which are owned by Eaton and subject to any outstanding
licenses therefor, including without limitation, discoveries, formulae,
production outlines, product designs, drawings, blue prints, technical data,
computerized data and information, computer software programs and data bases
(including research, design, engineering, marketing and distribution functions
and source codes), material specifications, purchasing specifications,
invention records, research records, tool routings, labor records,
manufacturing
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information, processes and techniques, testing, inspection and quality control
processes and techniques, equipment lists, and records required to be maintained
under applicable clauses of any Contract or under any statute or regulation
applicable to the conduct of the Business, including without limitation copies
of all open invention file records (such documentation, know-how, trade secrets
and copies of records being collectively referred to herein as "Technical
Documentation").
2.1.9 BUSINESS RECORDS. All existing marketing, service and
parts records, records of Fixed Assets, Inventories and Accounts Receivable,
warranty records, export licensing records, sales and promotional literature,
sales records, customer lists, records relating to memberships in trade
associations, and written instructions, manuals, data, procedures and other
records relating to the Acquired Assets, general ledgers and other books of
account of the Business, and copies of presently existing employment history
records applicable to Employees, employment contracts, and other Employee
records, in each case which are owned by Eaton and used now or in the past in
the Business (collectively, the "Business Records"); PROVIDED, HOWEVER, Eaton
shall have the right to retain for use, without restriction, copies of any of
the foregoing, it being understood and agreed that the obligation to
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transfer the items listed above shall not be deemed to require Eaton to
undertake a search for any of such items outside of the facilities of the
Business or other locations where such items are regularly retained.
2.1.10 GOVERNMENTAL LICENSES, PERMITS AND APPROVALS. All governmental
licenses, permits and approvals issued to Eaton or pending for issuance to Eaton
and currently used in the Business and relating to the Acquired Assets.
2.1.11 CASH AND MARKETABLE SECURITIES. Such cash on hand or in banks
and marketable securities, if any, solely related to the Business and existing
on the Closing Date.
2.1.12 TRADEMARKS AND COPYRIGHTS. The trademarks and copyrights listed
on Schedule 2.1.12.
2.2 EXCLUDED ASSETS. Anything contained in this Agreement to the contrary
notwithstanding, the following rights, properties and assets without limitation
(the "Excluded Assets") shall not be included in the Acquired Assets:
2.2.1 PERMITTED DISPOSITIONS. All of the rights, properties and assets
of the Business which shall have been collected, sold, transferred or disposed
of by Eaton prior to the Closing in transactions not constituting a breach of
this Agreement.
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2.2.2 EATON MARKS. The Eaton Marks as defined in, and subject to the
provisions of, Section 9.2.1.
2.2.3 TECHNICAL DOCUMENTATION. All Technical Documentation owned by
suppliers of Products and Fixed Assets to the Business, and all rights to use
such Technical Documentation which are vested in any government by contract or
as a matter of law; PROVIDED, HOWEVER, that Eaton shall take all reasonable
steps to transfer to ESEI all of Eaton's rights and incidents of interest (if
any) in and to such Technical Documentation (including the right to use and
possess such Technical Documentation).
2.2.4 EATON'S RECORDS. The records located at the facilities of the
Business that either (i) pertain solely to the internal corporate or
intracompany affairs of Eaton or to other divisions or operations of Eaton or
(ii) are integrated or non-separable from the records related to any of the
businesses of Eaton other than the Business. Eaton shall provide ESEI access to
the records referred to in clause (ii) of the preceding sentence pursuant to
Section 9.3.3.
2.2.5 OTHER ASSETS. (a) All assets owned and/or furnished by, and all
rights and incidents of interest in any Acquired Assets of, (i) any government
("Government Property"), and (ii) any other third party, including without
limitation any
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rights, title, claims or incidents of interest of any landlord in any Leasehold
improvements; PROVIDED, HOWEVER, that Eaton shall take reasonable steps to
transfer to ESEI all of Eaton's rights and incidents of interest (if any) in and
to such assets (including the right to use and possess such assets).
(b) All inventory (including without limitation raw materials,
purchased components, work in process and partially or totally finished
Products), operating supplies and packaging and shipping materials that, as of
the Closing Date, (i) are owned by a division or a subsidiary of Eaton other
than the Business but intended for sale to the Business, (ii) are not carried on
the books of the Business, and (iii) are related to purchase orders outstanding
from the Business to such other Eaton divisions or subsidiaries.
(c) Insurance policies of Eaton relating to the Business and insurance
proceeds arising from occurrences on, prior or subsequent to the Closing Date;
PROVIDED, HOWEVER, that insurance proceeds, if any, which relate to a liability,
responsibility or obligation which is covered by Article 3 shall be applied by
Eaton to such liability, responsibility or obligation.
(d) All assets of Eaton's businesses other than the Business,
including without limitation (i) all assets of Eaton's
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world headquarters in Cleveland, Ohio and (ii) all assets of any of Eaton's
other support operations, in each case not used principally in the Business, and
all other assets, if any, which are listed or otherwise described on Schedule
2.2.5(d).
(e) Any assets of the Business the transfer of which by Eaton to ESEI
would result in an adverse effect to Eaton or ESEI, as determined by Eaton in
its sole discretion, and which Eaton determines not to transfer to ESEI.
2.2.6 EATON'S SHARES IN SEN. The shares of SEN owned by Eaton.
2.2.7 EATON'S SHARES IN EATON SEMICONDUCTOR LIMITED. The shares of
Eaton Semiconductor Limited, a Korean corporation, owned by Eaton.
2.2.8 SEN LICENSE. All rights of Eaton under the license and related
agreements between Eaton and SEN (collectively, the "SEN License") pursuant to
which SEN manufactures, sells, designs, develops or leases Products.
2.2.9 ASSETS HELD BY EATON G.M.B.H. All assets and business of SEO
held by Eaton G.m.b.H., a German subsidiary of Eaton.
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ARTICLE 3. LIABILITIES OF THE BUSINESS
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3.1 LIABILITIES ASSUMED BY ESEI. Effective as of the Closing Date, ESEI
hereby fully assumes and agrees to pay, perform and discharge when due (with no
recourse whatsoever to Eaton) all debts, contracts, liabilities,
responsibilities and obligations of any kind, character or description relating
to the Business, whether accrued, absolute, contingent or otherwise, whether now
known or unknown, or hereafter becoming known, whether now existing or hereafter
arising or whether arising as a result of or in connection with the operation of
the Business, or the ownership or operation of any real property related to the
Business by Eaton, any subsidiary of Eaton or any predecessor in interest,
including without limitation all liabilities reflected on the Closing Date
Balance Sheet, but excluding the Excluded Liabilities (collectively, the
"Assumed Liabilities"). Without limiting the generality of the foregoing, the
Assumed Liabilities include the following which arise or have arisen in any
fashion out of Eaton's conduct of the Business at or at any time prior to
Closing:
3.1.1 CONTRACT OBLIGATIONS. Subject to Article 4, all liabilities,
responsibilities and obligations of Eaton:
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(a) under the Contracts and the governmental licenses, permits and
approvals set forth and described as Acquired Assets;
(b) as a supplier and vendor of goods or services under the IWOs and
as a purchaser and/or consumer of goods or services under the IWOs; and
(c) under each Real Property Lease and Personal Property Lease
assigned or transferred to ESEI pursuant to Section 2.1.3.
3.1.2 CLOSING DATE BALANCE SHEET. All liabilities reflected on the
Closing Date Balance Sheet.
3.1.3 PRODUCT LIABILITY LITIGATION. All liabilities, responsibilities
and obligations in respect of "product liability" litigation and claims existing
or hereafter brought or made against Eaton and/or ESEI by or on behalf of
non-customer third parties resulting from occurrences on, prior or subsequent to
the Closing Date with respect to Products totally or partially designed,
developed, manufactured or sold or services provided on, prior or subsequent to
the Closing Date by the Business, regardless of whether or not Eaton, any
subsidiary of Eaton, any division of Eaton other than SEO, SEO or any
predecessor in interest of Eaton and/or ESEI totally or
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partially designed, developed, manufactured or sold such Products or provided
such services.
3.1.4 OTHER LITIGATION. Subject to Section 3.2, all liabilities,
responsibilities and obligations in respect of litigation and claims existing or
hereafter brought or made under any legal theory whatsoever against Eaton and/or
ESEI by or on behalf of third parties resulting from occurrences or events on,
prior or subsequent to the Closing Date with respect to the existence, operation
or conduct of the Business or ownership of the Acquired Assets by Eaton and/or
ESEI, but excluding solely for purposes of this Section 3.1.4 actions, suits or
proceedings which are covered by Section 3.1.3.
3.1.5 INTELLECTUAL PROPERTY OBLIGATIONS. All liabilities,
responsibilities and obligations whether now existing or hereafter arising in
respect of, resulting from or relating to claims of infringement or other
misappropriation or misuse of the intellectual property rights (including
without limitation patents, trademarks, copyrights, trade secrets and other
interests identical or similar to those described in Sections 2.1.7 and 2.1.8)
of third parties with respect to the design, development, manufacture, testing,
leasing, use or sale of Products, the providing of services, or the operations
of the Business on, prior or subsequent to the Closing Date.
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3.1.6 EMPLOYMENT MATTERS. All liabilities, responsibilities and
obligations arising out of ESEI's obligations under Article 10 hereof and,
subject to the provisions of Article 10 hereof, all liabilities,
responsibilities and obligations arising out of, resulting from or relating to
claims by employees or former employees of Eaton engaged in the Business arising
in connection with their employment by ESEI after the Closing and/or under any
written employment or severance pay agreements.
3.1.7 ENVIRONMENTAL MATTERS. All liabilities, responsibilities and
obligations of Eaton in regard to the Business relating to past, present and
future compliance or non-compliance with laws, regulations or governmental
orders of any sort relating to the protection of the environment (both natural
and workplace), including without limitation laws, regulations, or governmental
orders of any sort concerning the treatment, storage, transportation and
disposal of waste products, the control of soil, surface or groundwater
pollution, air quality and national emission standards, and health, safety and
hazard communication matters; PROVIDED, HOWEVER, that Eaton shall retain all
liability, responsibility and obligation for all matters, if any, listed or
described on Schedule 3.1.7.
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3.1.8 DISABLED EMPLOYEES. All liabilities, responsibilities and
obligations of Eaton regarding all disability benefits (short-term, long-term
and permanent) payable to former or current employees of the Business.
3.2 EXCLUDED LIABILITIES. For purposes hereof the term "Excluded
Liabilities" means the following liabilities and obligations as the same shall
exist as of the Closing:
3.2.1 EATON'S OTHER BUSINESSES. All liabilities, responsibilities and
obligations incurred by Eaton solely in connection with the conduct of its
businesses other than the Business.
3.2.2 DISCHARGED OBLIGATIONS. All liabilities, responsibilities and
obligations of the Business which have been fully discharged or satisfied by
Eaton prior to the Closing in transactions in the ordinary course of business
and not in breach of this Agreement.
3.2.3 EMPLOYMENT MATTERS. All liabilities and obligations arising out
of Eaton's obligations under Article 10 hereof.
3.2.4 TAX MATTERS. All liabilities and obligations arising out of
Eaton's failure to pay or provide on the Closing Date Balance Sheet for any
federal or state income, franchise, sales, excise or any other taxes (including
any interest or
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penalties) attributable to the use and ownership of the Acquired Assets by Eaton
or the conduct of the Business by Eaton before the Closing.
3.2.5 SEN LICENSE. Eaton's obligations under the SEN License.
3.2.6 LIABILITIES UNDER EATON G.M.B.H. All liabilities of the Business
held under Eaton G.m.b.H.
ARTICLE 4. CONSENTS TO ASSIGNMENT
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4.1 REASONABLE BEST EFFORTS TO OBTAIN CONSENTS.
(a) Promptly after the date of this Agreement, Eaton and ESEI shall
cooperate and use their reasonable best efforts to obtain as soon as reasonably
possible (i) the consents of any lessors required in connection with the
assignment or transfer of any Real or Personal Property Leases, and (ii) all
other consents, approvals, novations and waivers necessary to convey to ESEI any
other of the Acquired Assets (all agreements, consents, security clearances,
permits, approvals and waivers described in (i) and (ii) above are hereinafter
collectively referred to as the "Consents"); PROVIDED, HOWEVER, that each of
ESEI and Eaton shall pay its own expenses incidental to any applications and
requests for, or preparation and negotiation of, the Consents.
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(b) Either Eaton or ESEI may, at its election, contest the refusal of
any lessor or other third party to give consent to the assignment or transfer
(or sublease, to the extent required by Section 9.2.4) of any Contract, Real
Property Lease, Personal Property Lease, license, permit or approval,
respectively, and, to the extent that ESEI is receiving the benefits thereunder,
ESEI shall perform all obligations thereunder until the final determination of
such contest.
4.2 PERFORMANCE BY ESEI. (a) Until Eaton and ESEI have obtained any
Consents necessary to convey to ESEI any Contract, Real Property Lease, Personal
Property Lease, license, permit or approval pursuant to Section 4.1, ESEI, on
behalf of Eaton, from and after the Closing Date, shall assume and perform for
the benefit of the issuer thereof or the other party or parties thereto the
liabilities, responsibilities and obligations of Eaton thereunder or in
connection therewith.
(b) The failure of Eaton or ESEI to obtain any Consent that may be
necessary pursuant to Section 4.1 shall not give rise to any right of
termination, rescission, damages or any other relief whatsoever in favor of ESEI
against Eaton.
4.3 TRANSFER OF FOREIGN PATENTS. At the Closing or as soon thereafter
as practicable, ESEI shall deliver to Eaton, and Eaton shall promptly execute
and return to ESEI, assignments,
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reasonably satisfactory in form to ESEI, for the transfer in accordance with
Section 2.1.7 of any Patents registered outside the United States; PROVIDED,
HOWEVER, ESEI agrees that such assignments shall not be recorded in any
governmental office until Eaton consents thereto in writing.
ARTICLE 5. CONSIDERATION FOR SALE OF THE BUSINESS AND CLOSING DATE
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BALANCE SHEET
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5.1 CONSIDERATION FROM ESEI TO EATON. As consideration for the sale and
transfer by Eaton to ESEI of the Acquired Assets, ESEI shall sell, transfer,
issue and deliver to Eaton on the Closing Date one hundred (100) shares of the
Stock. The Stock shall be duly and validly authorized and issued and fully paid
and non-assessable, with the certificate for the Stock being in valid and legal
form and issued in the name of Eaton Corporation.
5.2 PREPARATION OF CLOSING DATE BALANCE SHEET. Within sixty (60) calendar
days after the Closing, Eaton shall prepare and deliver to ESEI a balance sheet
for ESEI dated as of the Closing Date (the "Closing Date Balance Sheet"), which
sets forth the book values of assets included in the Acquired Assets, the
aggregate book amount of liabilities included in the Assumed Liabilities and the
net book value of ESEI ("Net Book Value") derived from the assets and
liabilities to be transferred to
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ESEI pursuant to the terms of this Agreement, all in accordance with Eaton's
normal accounting practices in effect for the Business. The Closing Date Balance
Sheet shall be accompanied by all supporting schedules and work papers.
ARTICLE 6. CONDITIONS TO CLOSING
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6.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF ESEI. The obligations of ESEI to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment at or prior to the Closing of each of the following conditions
(any one (1) or more of which may be waived in whole or in part by ESEI):
6.1.1 DELIVERY OF CLOSING DOCUMENTS. Eaton shall have delivered or
caused to be delivered to ESEI the documents which Eaton is required to deliver
to ESEI at the Closing pursuant to this Agreement.
6.1.2 COMPLIANCE WITH AGREEMENT. All agreements and transactions
contemplated hereby and to be performed by Eaton at or before the Closing shall
have been duly performed in all material respects.
6.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF EATON. The obligations of Eaton
to consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment at or
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prior to the Closing of each of the following conditions (any one or more of
which may be waived in whole or in part by Eaton):
6.2.1 DELIVERY OF CLOSING DOCUMENTS. ESEI shall have delivered or
caused to be delivered to Eaton the documents which ESEI is required to deliver
to Eaton at the Closing pursuant to this Agreement.
6.2.2 COMPLIANCE WITH AGREEMENT. All agreements and transactions
contemplated hereby and to be performed by ESEI at or before the Closing shall
have been duly performed in all material respects.
6.2.3 DELIVERY OF STOCK. There shall have been delivered to Eaton the
certificate for the Stock as provided in Article 5.
ARTICLE 7. CLOSING
------------------
7.1 THE CLOSING. The closing hereunder (the "Closing") (other than real
estate filings) shall take place at the offices of Eaton in Cleveland, Ohio, or
at such other place as may be agreed upon by the parties, at 9:00 a.m., on
Friday, December 29, 1995, but effective as of the close of business of the
Business on December 31, 1995, unless a different date or time for the Closing
is established as allowed and provided for herein or is agreed upon by the
parties (the effective date of
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the Closing ultimately determined in accordance with this paragraph is referred
to herein as the "Closing Date").
7.2 EATON'S OBLIGATIONS AT CLOSING. At the Closing, Eaton shall deliver to
ESEI the following documents, duly executed and acknowledged by Eaton, and in
the proper form for recording by ESEI as appropriate:
(a) Assignments (subject to the receipt of any Consents) for the
Contracts, Transferred Real Property, Real Property Leases, Personal Property
Leases and governmental licenses, permits and approvals to be acquired by ESEI
pursuant to Article 2. As of the Closing or immediately thereafter, ESEI and
Eaton shall make arrangements to file such deeds and other instruments of
transfer to be filed for record as herein provided.
(b) Assignment or assignments of the Patents listed and identified on
Schedule 2.1.7 (except for any assignments of Patents registered outside the
United States to be obtained subsequent to the Closing pursuant to Section 4.3);
PROVIDED, HOWEVER, that ESEI agrees that the assignments of the Patents shall
not be recorded in any governmental office until Eaton consents thereto in
writing; and assignments of Accounts Receivable, Technical Documentation and
Business Records in accordance with Sections 2.1.6, 2.1.8, 2.1.9 and 2.1.10.
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(c) All other appropriate bills of sale, assignments and other good
and sufficient instruments of transfer necessary to transfer to ESEI title to
the Acquired Assets, including without limitation, the Inventories and Fixed
Assets.
(d) A receipt for the Stock.
(e) All other documents and papers required of Eaton by Section 6.1 as
conditions to Closing.
7.4 ESEI'S OBLIGATIONS AT CLOSING. At the Closing, ESEI shall deliver the
following documents to Eaton, duly executed and acknowledged by ESEI as
appropriate:
(i) The certificate for the Stock as provided in Section 5.1;
(ii) Instruments of assumption with respect to the Assumed
Liabilities as and in such form as Eaton may reasonably request; and
(iii) All other documents and papers required of ESEI by Section
6.2 as conditions to Closing.
ARTICLE 8. DISCLAIMERS
----------------------
Except as may otherwise be specifically set forth herein, Eaton makes no
representations, warranties or agreements of any kind as to the Acquired Assets,
all of which are being sold "as
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is" and "where is." Eaton and ESEI specifically agree that, as to all the
Acquired Assets:
THERE ARE NO WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, WHICH EXTEND BEYOND THOSE EXPRESSLY MADE IN
THIS AGREEMENT.
ARTICLE 9. PARTICULAR COVENANTS OF EATON AND ESEI
-------------------------------------------------
9.1 COVENANTS OF EATON. Eaton hereby covenants and agrees:
9.1.1 FURTHER ASSURANCES. After the Closing and subject to Article 4,
Eaton will furnish to ESEI such other instruments and information as ESEI may
reasonably request in order effectively to convey to and vest in ESEI title to
the Acquired Assets, to be delivered from time to time upon ESEI's request.
9.2 COVENANTS OF ESEI. hereby covenants and agrees:
9.2.1 EATON MARKS. (a) Eaton has used and is the sole owner of the
trade name Eaton, the trademark Eaton, the Eaton logo mark and the corporate
name Eaton Corporation (which trade name, trademark, logo mark and corporate
name are hereinafter collectively referred to as the "Eaton Marks") in
connection with the design, development, manufacture or sale of certain
Products. ESEI acknowledges Eaton's ownership and exclusive rights in and use of
the Eaton Marks and shall not use the Eaton Marks (or any names or marks
confusingly similar to the Eaton
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Marks) except as provided in a license agreement to be negotiated between Eaton
and ESEI as soon as practicable after the Closing.
9.2.2. LICENSE TO EATON AND SUBSIDIARIES. ESEI hereby grants to Eaton
and each of its Subsidiaries a royalty-free, non-exclusive, irrevocable,
worldwide and perpetual license to use the Patents, Technical Documentation,
Trademarks and Copyrights in connection with (i) products manufactured, used
and/or sold or services provided by or for Eaton or any of its Subsidiaries in
any business other than the Business and (ii) in connection with products
manufactured, used and/or sold or services provided by or for Eaton under the
SEN License. The foregoing license shall (i) include any improvement of any of
the Patents and/or Technical Documentation that is developed by or for ESEI
during the period beginning with the Closing Date and ending two (2) years from
the date that Eaton ceases to own or control, directly or indirectly, at least
fifty percent (50%) of the issued and outstanding capital stock of ESEI, and
(ii) be transferable and subject to right of sub-license by Eaton and its
Subsidiaries to each successor or supplier of a business, other than the
Business, sold by Eaton or a Subsidiary of Eaton at any time after the Closing
Date where the business sold uses any of the Patents and Technical
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Documentation in connection with the manufacture, use and/or sale of its
products or services.
9.2.3 FURTHER ASSURANCES. After the Closing, ESEI will furnish to Eaton
such other instruments and information as Eaton may reasonably request in order
to evidence and confirm ESEI's assumption of the Assumed Liabilities, to be
delivered from time to time upon Eaton's request.
9.2.4 LEASEHOLDS. With regard to the Real Property Leases and the
Personal Property Leases to be assigned or transferred by Eaton to ESEI pursuant
to this Agreement, (i) ESEI hereby agrees not to exercise any right or option
to renew or extend the term of any Real Property Lease or Personal Property
Lease unless and until Eaton shall have consented to such exercise or the lessor
shall have unconditionally released Eaton in writing from all of its past,
present or future liabilities and obligations, whether as tenant or as
guarantor, relating directly or indirectly to such Real Property Lease or
Personal Property Lease, and (ii) if a lessor refuses to give consent to any
assignment of any Real Property Lease or Personal Property Lease, and if the
applicable lease permits a sublease without consent of the lessor, ESEI and
Eaton agree to enter into a sublease upon terms and conditions as similar and
comparable to the assignment as reasonably feasible.
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9.3 COVENANTS OF EATON AND ESEI. Eaton and ESEI hereby covenant and agree:
9.3.1 REASONABLE BEST EFFORTS AND COOPERATION. Eaton and ESEI shall
cooperate fully with each other and use their reasonable best efforts to cause
the conditions set forth in Article 6 to be satisfied on or before the Closing
Date and to promptly take any and all other actions appropriate to the
consummation of the transactions contemplated by this Agreement.
9.3.2 RELATED AGREEMENTS. Eaton and ESEI will duly execute and deliver
to the other the following agreements (collectively referred to herein as the
"Related Agreements"), effective on and after the Closing Date (in regard to
any such agreements to which subsidiaries of Eaton or ESEI are a party, Eaton or
ESEI, as appropriate, shall cause such subsidiaries to execute and deliver such
agreements):
(a) The Computer and Financial Services Agreement pursuant to
which Eaton will, after the Closing Date, provide, among other things, certain
data processing related services to ESEI in accordance with the provisions and
conditions of such agreement.
(b) The Litigation Agreement pursuant to which, among other
things, all litigation of the Business existing at the Closing Date and arising
thereafter will be governed.
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(c) A License Agreement whereby ESEI is licensed to use the trade
name "Eaton", the trademark "Eaton", the Eaton logo mark and "Eaton" in the
corporate name of ESEI.
9.3.3 COOPERATION, ACCESS TO RECORDS AND EMPLOYEES SUBSEQUENT TO
CLOSING. (a) For a period of seven (7) years following the Closing, (i) Eaton
shall retain all records now located at the facilities of the Business that are
integrated or non-separable from the records related to any of the businesses of
Eaton other than the Business and (ii) ESEI shall retain all other Business
Records (such records in (i) and such Business Records in (ii) collectively, the
"Records"). Each party shall provide duly authorized representatives of the
other party (displaying appropriate credentials and security clearances, if
required) full and free access to all Records for bona fide business reasons
relating to Eaton's operation of the Business prior to Closing at any time
during regular business hours for a period of seven (7) years after the Closing
Date or such later time as such party retains or is required to retain such
Records, and subject to the requirements of applicable laws, regulations or
agreements, such other party may make abstracts from, or make copies of, any
such Records as it may deem desirable, at its own expense. In connection with
any review of Records, each party shall provide to such duly authorized
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representatives of the other party (x) access to employees of such party who are
familiar with such Records and who can assist such representatives of such other
party, at such other party's own expense, in locating, explaining or otherwise
reviewing such Records and (y) permission to use such party's copying
facilities, clerical services and telephones at such other party's own expense.
Neither party shall destroy any Records within the applicable periods referred
to above without written permission of the other.
(b) If, in connection with the conduct by either party of any
litigation, arbitration, audit (tax or otherwise) or settlement proceedings or
negotiations with respect to the conduct of the Business (the "Legal
Proceedings"), one party shall request access to any Records, the other party
shall afford the requesting party such access upon reasonable notice. Subject to
the requirements of applicable laws, regulations or agreements, the requesting
party shall be permitted to use, or, if original documents are required to
respond to legal process, remove Records temporarily from the other party's
premises for the purpose of responding to legal process or making copies thereof
or may use such other party's copying facilities for that purpose and reimburse
such other party for such other party's out-of-pocket costs associated with such
use.
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(c) Subject to the terms and conditions of the Litigation
Agreement, if, in connection with Legal Proceedings, Eaton shall require the
assistance of ESEI or Employees or other employees of ESEI employed in the
Business, ESEI shall reasonably cooperate with Eaton in connection with such
Legal Proceedings and shall provide such employees to Eaton as are reasonably
required by Eaton at the sole expense of ESEI.
(d) Subject to the terms and conditions of the Litigation
Agreement, if, in connection with Legal Proceedings, ESEI shall require the
assistance of Eaton or Eaton's employees, Eaton shall reasonably cooperate with
ESEI in connection with such Legal Proceedings and shall provide such employees
to ESEI as are reasonably required by ESEI at the sole expense of Eaton.
9.3.4 STAFF SERVICES. Except as otherwise provided in any of the
Related Agreements, in the event that any party to this Agreement desires that
any other party hereto provide any staff or other similar services to the party
requesting the services at any time following the Closing and the party to
provide the services determines that such requested services may be provided by
its existing staff departments or employees and that it has personnel available
for such purposes, such services will be provided to the requesting party on
terms to be mutually agreed upon by such parties.
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9.3.5 ACTIONS TO ELIMINATE OBLIGATIONS. If requested by Eaton at any
time and from time to time after Closing, ESEI shall (in addition to any more
specific undertakings provided herein), promptly use its reasonable best
efforts to obtain Eaton's immediate and complete release from any continuing
obligations under any contract, lease or agreement of any sort which has been
assigned and transferred to ESEI under this Agreement or any Related Agreement.
9.3.6 SHORT-TERM WORKING CAPITAL LOANS. In the event that ESEI does
not have working capital loan arrangements in place with banking institutions at
any time, Eaton may consider extending short-term working capital loans to ESEI
("Short-Term Loans") in such amounts, if any, as Eaton deems appropriate. The
Short-Term Loans would be on an unsecured basis, bearing interest at a rate
agreed upon by both parties.
9.3.7 CONFIDENTIALITY. All of the non-public information related to
the transactions which are the subject of this Agreement which Eaton or any of
its subsidiaries has provided ESEI is confidential, as are this Agreement, the
Related Agreements, the closing documents and all matters related to the
transactions. ESEI shall limit the distribution and use of all non-public
information to the carrying out of the transactions, and will not disclose the
contents of this
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Agreement, the Related Agreements or any other documents related hereto without
the prior consent of Eaton, except as required by applicable regulations and
rulings of any government or any taxing authority, any governmental agency
regulating the issuance or sale of securities or any court.
9.3.8 PERSONAL PROPERTY TAXES. Ad valorem taxes imposed upon consigned
Inventories shall be remitted and borne in their entirety by ESEI and ad valorem
taxes upon Acquired Assets other than the Leaseholds (the "Personal Property
Taxes") shall be remitted and borne in their entirety by the party which has the
obligation under the applicable government law to return and pay such Personal
Property Taxes, and no prorations, apportionments or reimbursements of Personal
Property Taxes shall be made between the parties. The parties shall fully
cooperate to avoid, to the extent legally possible, the payment of duplicate
Personal Property Taxes, and each party shall furnish, at the request of the
other, proof of payment of any Personal Property Taxes or other documentation
which is a prerequisite to avoiding payment of a duplicate tax.
9.3.9 PAYROLLS, OTHER TAXES AND EXPENSES.
(i) Payrolls of Eaton Employees owed by Eaton for employment in
the Business prior to the Closing Date shall be paid by Eaton or
accrued on the Closing Date Balance
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Sheet. Payrolls of Employees owed by ESEI for employment on and after the
Closing Date shall be borne and paid by ESEI.
(ii) All governmental income, franchise, or manufacturer's excise
taxes levied or imposed upon or in connection with the Business or the operation
thereof prior to the Closing Date shall be borne and paid by Eaton, and all such
taxes so levied or imposed upon or in connection with the Business or the
operation thereof on or after the Closing Date shall be borne and paid by ESEI.
(iii) Expenses relating to the conveyance of the Acquired Assets
shall be dealt with in the following manner: Eaton shall pay all costs,
including recording fees, sales, use, transfer and license taxes and other
incidental costs applicable to the transaction. With respect to those items
which are exempt from sales or use tax on any basis, ESEI shall deliver to Eaton
appropriate certificates establishing the basis for the exemption. Each party
will cooperate to the extent practicable in minimizing all taxes, fees and costs
levied by reason of the sale and conveyance of the Acquired Assets.
ARTICLE 10. EMPLOYEES AND EMPLOYEE MATTERS
------------------------------------------
10.1 EMPLOYMENT. As of the Closing Date, ESEI shall offer immediate
employment (so that no period of unemployment shall
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occur between employment with Eaton prior to the Closing Date and employment
with ESEI on and after the Closing Date) to all of the employees of Eaton who
are employed in the Business immediately prior to the Closing Date (the "Eaton
Employees"), including without limitation the Eaton Employees who then are on
layoff and subject to recall, or on disability leave of absence or any other
leave of absence. Such employment shall be offered on terms and conditions as to
salary and remuneration, including incentive compensation, and as to employee
fringe benefits, which are at least equal to such terms and conditions provided
for and on behalf of such Eaton Employees immediately prior to the Closing Date
by Eaton in accordance with Eaton's then established plans, programs, practices,
and arrangements, including without limitation the Eaton fringe benefit plans,
programs, practices, and arrangements listed on Schedule 10.1 (the "Eaton
Welfare Plans"). Effective as of the Closing Date, Eaton hereby assigns to ESEI,
and ESEI hereby assumes, any and all liabilities, responsibilities, and
obligations of Eaton to and on behalf of the Employees for the provision of such
salary, remuneration, and fringe benefits, and ESEI shall recognize any and all
periods of employment of each Employee prior to the Closing Date with Eaton
and/or any predecessor employer thereof for all purposes, including without
limitation for the purposes
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of determining such Employee's eligibility for and amount of benefits, under
ESEI's compensation and/or fringe benefit plans, programs, practices, and/or
arrangements as if such Employee had been so employed by ESEI. However, the
assumption herein by ESEI of the foregoing liabilities, responsibilities, and
obligations shall not in any way or at any time create any third party
beneficiary rights for or on behalf of any person or persons other than the
parties to this Agreement. During the period of thirty-six (36) consecutive
months beginning on the Closing Date, ESEI shall neither employ nor offer
employment, without the prior written consent of Eaton, to any Eaton Employee
who does not become an Employee, or to any Retired Employee.
10.2 SEVERANCE PAYMENT RESPONSIBILITIES. As of and after the Closing Date,
ESEI shall assume all liabilities, responsibilities, and obligations for
severance payments or other separation benefits to which any Eaton Employee may
be or become entitled or claim to be entitled as a result of ESEI's acquisition
of the Business, including without limitation any such claim which might be made
against either Eaton or ESEI at any time
(a) by any Employee because of the transfer of his employment from
Eaton to ESEI; or
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(b) by any Employee because of termination of his employment by ESEI,
or because of any change of his compensation or fringe benefits or employment
position by ESEI, on or after the Closing Date; or
(c) by any Eaton Employee because his employment with Eaton ceases as
a result of ESEI's acquisition of the Business. ESEI agrees to, and shall,
indemnify and hold harmless Eaton against and from any and all such claims and
any and all expenses, liabilities, obligations, and costs of any sort
associated therewith.
10.3 WELFARE BENEFIT RESPONSIBILITIES.
(a) As of and after the Closing Date, Eaton hereby assigns to ESEI,
and ESEI hereby assumes from Eaton, all liabilities, responsibilities, and
obligations for providing to all Eligible Individuals (as hereinafter defined)
life insurance, accidental death and dismemberment insurance, business travel
accident insurance, disability salary continuation, short term disability,
long-term disability, comprehensive health, dental, mail order drug, and patient
services benefits which are at least equal to such benefits as provided for such
Eligible Individuals by Eaton immediately prior to the Closing Date pursuant to
the applicable Eaton Welfare Plans. Such assignment of liabilities,
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responsibilities, and obligations to, and assumption by, ESEI shall be
applicable to any and all claims for any such benefits which are or have been
filed on, prior or subsequent to the Closing Date by or on behalf of any
Eligible Individual with either Eaton or ESEI, or with any authorized
representative of either, and which claims have not been paid or otherwise fully
settled under the applicable Eaton Welfare Plan prior to the Closing Date,
notwithstanding (1) the date on which any such Eligible Individual's disability
or medical need commenced, or (2) the date on which any covered health, dental,
drug, and/or other services and/or materials and/or supplies were provided, or
(3) the date on which any covered expenses were incurred, or (4) the period
during which such Eligible Individual is eligible for benefit payments of any
kind, except as otherwise provided in Section 10.3(b). Welfare benefit coverage
hereby assumed by ESEI for the Eligible Individuals nevertheless shall be
provided under Eaton's applicable welfare benefit plans, programs, practices,
and/or arrangements until such time as ESEI establishes its own welfare benefit
plan, programs or arrangements (the "ESEI Welfare Plans"). Any Eligible
Individual's periods of employment with Eaton and/or any predecessor employer
thereof, and any and all periods of an Eligible Individual's coverage and/or
participation in any Eaton
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Welfare Plan, shall be deemed to be employment with ESEI and coverage and/or
participation in the ESEI Welfare Plans respectively for all purposes of
establishing such Eligible Individual's eligibility for participation and
benefit entitlement under the ESEI Welfare Plans. The extent to which any
Eligible Individual (either as an individual or a family member) has satisfied
in whole or in part any Eaton Welfare Plan annual deductible, or has paid any
out-of-pocket expense pursuant to any Eaton Welfare Plan co-insurance provision,
shall be counted toward the satisfaction of any similar applicable deductible or
out-of-pocket expense maximum respectively under any applicable ESEI Welfare
Plan. For the purposes of this Article 10, "Eligible Individuals" shall mean
(i) the Employees; and
(ii) the eligible dependents and/or other eligible beneficiaries
of the Employees;
who were eligible, or who would have become eligible, for any such welfare
benefits under any applicable Eaton Welfare Plan as of or after the Closing
Date.
(b) Notwithstanding any other provisions of this Agreement to the
contrary, Eaton shall retain all liabilities, responsibilities, and obligations
under the applicable Eaton Welfare Plans with respect to any Eligible Individual
for the
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provision of any life, accidental death and dismemberment, and/or business
travel accident insurance benefits payable with respect to any qualified death
or accident which occurs prior to the Closing Date.
(c) In conjunction with the assignment to, and assumption by, ESEI of
liabilities, responsibilities, and obligations for the provision of welfare
benefits pursuant to Section 10.3(a), Eaton and ESEI agree that Eaton shall
arrange for the provision of life insurance, accidental death and dismemberment
insurance, business travel accident insurance, long term disability,
comprehensive health, dental, mail order drug, and patient services benefit
coverage on ESEI's behalf through the administrative services of the Eaton
Welfare Plans commencing on the Closing Date and continuing until such time as
Eaton and ESEI shall agree otherwise. ESEI agrees to pay to Eaton or, if so
determined by Eaton, to any administrative representative of Eaton, the premium
rates and/or direct costs of such benefits as provided through the Eaton Welfare
Plan administration, plus any third party administrative service fees related to
the provision of such benefits and any other reasonable related expenses
incurred by Eaton, or by any administrative representative of Eaton, for any
such continuing coverage or the financing thereof through Eaton Welfare Plan
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administration. ESEI acknowledges that Eaton has agreed to the provisions of
this Section 10.3(c) as an accommodation to ESEI for the purposes of
facilitating the sale of the Business as contemplated by this Agreement, and
that this Section 10.3(c) shall in no way be construed to impose upon Eaton any
liability, responsibility, or obligation whatever for the provision of any
benefits for or on behalf of any Eligible Individual except as expressly set
forth in this Section 10.3.
10.4 INVESTMENT PLAN RESPONSIBILITIES. As of the Closing Date and
thereafter until such time as Eaton may determine otherwise, Eaton shall extend
coverage under the Eaton Corporation Share Purchase And Investment Plan (the
"Eaton Investment Plan") to ESEI as the "Company" pursuant to the definition
thereof as set forth in Section 2.1(viii) of such Plan, and eligibility for
membership in the Eaton Investment Plan shall be extended to all Employees, and
to all new employees of ESEI hired on or after the Closing Date, pursuant to the
definition of "Employee" as set forth in Section 2.1(xix) of the Eaton
Investment Plan. Each Employee's employment with ESEI from and after the Closing
Date shall continue to be considered as employment with the "Company" for all
purposes under the Eaton Investment Plan so long as ESEI continues to be so
designated as the "Company", and the transfer of an
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Employee's employment as of the Closing Date from Eaton to ESEI shall not be
deemed to be a break in his employment with the "Company" for purposes of his
membership, and eligibility for membership, in the Eaton Investment Plan. ESEI
shall have all liability, responsibility, and obligation for any and all
expenses relating to the operation of the Eaton Investment Plan with respect to
membership therein by Employees and new Employees of ESEI and shall reimburse
Eaton promptly for such expenses upon Eaton's presentation of an invoice
therefor to ESEI. Eaton shall amend the Eaton Investment Plan, if and to the
extent that it is considered necessary by Eaton, and shall take whatever other
actions that Eaton may deem necessary, to implement the provisions of this
Section 10.4.
10.5 VACATION RESPONSIBILITIES. ESEI shall be liable, responsible, and
obligated for the payment of all vacation benefits on behalf of any and all
Employees, and which have not been paid by Eaton prior to the Closing Date.
10.6 WORKERS' COMPENSATION RESPONSIBILITIES. As of the Closing Date,
ESEI shall assume, and shall pay or discharge as they come due, all liabilities,
responsibilities, and obligations for any loss, claim, or damage, including
without limitation any interest charges, and/or retroactive premiums for
workers' compensation insurance and/or penalties and/or
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attorney's fees or disbursements, which is or has been incurred or suffered by
any Employee and which loss, claim, or damage is based upon any claim or demand
made by or on behalf of such Employee pursuant to any governmental workers'
compensation, occupational disease or injury, or substantially similar law,
regardless of whether such claim or demand is or was first presented, filed, or
actually made prior to, or on or after, the Closing Date and regardless of the
date of occurrence of any bodily injury, disease, or other physical or mental
condition upon which such claim or demand is or was based.
10.7 REIMBURSEMENT FOR ESEI LIABILITIES. Notwithstanding any other
provisions of this Agreement to the contrary, in the event that Eaton shall be
required, by operation of law or regulation or by judicial or quasi-judicial
determination or by operation of any contract or other agreement of any kind
with any insurance company or other entity, to pay or discharge directly, or
indirectly through any representative or any benefit trust or other fund or
otherwise, any liability, responsibility, or obligation for the provision of any
benefit or other payment which is the liability, responsibility, and/or
obligation of ESEI either directly or indirectly pursuant to this Article 10,
ESEI shall promptly reimburse Eaton, or any appropriate representative or
benefit trust or other fund of
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Eaton as may be determined by Eaton, in full for any and all such payments
and/or discharges upon the presentation of written evidence thereof by Eaton to
ESEI. ESEI also shall promptly reimburse Eaton for the full amount of any
benefit premium payment or other direct cost of benefit coverage which is
incurred by Eaton on ESEI's behalf with respect to any period of benefit
coverage occurring on or after the Closing Date.
10.8 PROFIT SHARING PLAN. After the Closing, the Employees shall continue
to participate under the Semiconductor Equipment Operations Profit Sharing Plan
(the "SEO Plan") on the same terms and conditions as existed immediately prior
to the Closing, subject to any discontinuance, termination or amendment of the
SEO Plan adopted after the Closing.
ARTICLE 11. INDEMNIFICATION
---------------------------
11.1 INDEMNIFICATION BY ESEI. ESEI shall defend, indemnify and hold
harmless Eaton, its employees, officers, directors and agents from and against
any and all claims, damages, demands, causes of action, suits, judgments, debts,
losses, liabilities, costs and expenses including but not limited to court costs
and attorneys' fees (collectively, "Claims") resulting from (a) any failure of
ESEI promptly to carry out, perform, satisfy and discharge any of its covenants,
agreements, undertakings, obligations or liabilities under this Agreement,
including without
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limitation the Assumed Liabilities under Section 3.1, and under any Related
Agreements, Schedules or any other documents delivered to Eaton pursuant hereto
or (b) any breach of a warranty or representation made by ESEI to Eaton
hereunder or under any Related Agreement or in the Schedules or other documents
delivered to Eaton pursuant hereto.
11.2 INDEMNIFICATION BY EATON. Eaton shall defend, indemnify and hold
harmless ESEI, its employees, officers, directors and agents from and against
any and all Claims resulting from (a) any failure of Eaton promptly to carry
out, perform, satisfy and discharge any of its covenants, agreements,
undertakings, obligations or liabilities under this Agreement, (b) any breach of
an agreement made by Eaton to ESEI hereunder or in the Schedules or other
documents delivered to ESEI pursuant hereto or (c) non-compliance with any
applicable bulk transfer law, bulk transfer tax law or similar statute.
11.3 CONDITIONS OF INDEMNIFICATION. The indemnifications contained herein
are conditional upon the following: (i) if any Claim shall be commenced or
asserted against or suffered by either party in respect to which such party (the
"Indemnitee") proposes to demand indemnification hereunder, the party from whom
indemnification is sought (the "Indemnitor") shall be notified promptly of the
demand and informed in detail of the grounds for
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such demand; (ii) Indemnitee shall permit Indemnitor to participate in (but not
control) any future decision-making which may have the effect of materially
increasing or diminishing the amount of such indemnification; PROVIDED, HOWEVER,
that if Indemnitor accepts in writing its full responsibility (as between the
parties hereto) under this Agreement for any such Claim, Indemnitor may assume
the entire control of the defense, compliance or settlement of any such Claim
through its own attorneys and Indemnitee shall, at Indemnitor's expense, afford
Indemnitor such other reasonable assistance as may be requested; and (iii) in
the event that Indemnitor fails to assume the entire control of the defense,
compliance or settlement of, or to pay, as applicable, any Claim within thirty
(30) days of the receipt of a demand made under this Section 11.3, Indemnitor
shall pay Indemnitee interest (from the expiration of such 30-day period
following receipt of a demand) on the amount of such Claim for which Indemnitor
is responsible pursuant to this Article 11, at the Interest Rate plus three
percentage points (3%) (or such lower rate as is required by law).
11.4 INDEMNITY RIGHTS EXCLUSIVE OF OTHER RIGHTS. The rights of indemnity
provided by this Agreement shall be exclusive of all other bases of entitlement
to money damages for the matters
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covered by this Agreement, the Related Agreements, the Schedules or any other
document delivered to Eaton pursuant hereto.
ARTICLE 12. MISCELLANEOUS
----------- -------------
12.1 EXPENSES. Except as otherwise expressly provided in this Agreement,
each of ESEI and Eaton shall pay its own expenses incidental to the negotiation,
preparation and performance of this Agreement and the transactions contemplated
hereby, whether or not the Closing occurs, as long as failure to close is not a
breach of this Agreement.
12.2 NOTICES. Any notices or other communications required or permitted
hereunder shall be given in writing and shall be sufficiently given if delivered
personally or sent by registered mail or certified mail, return receipt
requested, postage prepaid, addressed as follows:
To ESEI: Eaton Semiconductor Equipment Inc.
Eaton Center
Cleveland, Ohio 44114
Attention: Chairman
To Eaton: Eaton Corporation
Eaton Center
Cleveland, Ohio 44114
Attention: Secretary
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or such other address as shall hereafter be furnished in writing by any party in
the aforesaid manner, and any such notice or communication shall be deemed to
have been given as of the date so delivered or four days after the date so
mailed.
12.3 CAPTIONS. The captions set forth in this Agreement are for convenience
only and shall not be considered as part of this Agreement, nor as in any way
limiting nor amplifying the terms and provisions hereof.
12.4 SUCCESSORS AND ASSIGNS; OTHER PARTIES. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by ESEI without the
prior written consent of Eaton. No assignment under this Section 12.4 shall
relieve a party of any of its obligations hereunder without the prior written
consent of the other party. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give to any person or entity, other than
the parties hereto and their respective permitted successors and assigns, any
rights or remedies under or by reason of this Agreement.
12.5 GENDER; NUMBER. All pronouns shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the person or
persons referred to may require. All defined terms that are defined in the
singular shall be deemed
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to include the plural and such terms that are defined in the plural shall be
deemed to include the singular.
12.6 TIME OF ESSENCE. Time shall be of the essence with respect to each
party's performance of its obligations pursuant to this Agreement.
12.7 WAIVER. Except as otherwise expressly provided in this Agreement,
neither the failure nor any delay on the part of Eaton or ESEI to exercise any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise or waiver of any such right, power or privilege
preclude any other or further exercise thereof, or the exercise of any other
right, power or privilege available to Eaton or ESEI at law or in equity. Unless
otherwise expressly provided in this Agreement, either party may at any time
waive compliance by the other with any covenants or conditions contained in this
Agreement, but only by written instrument executed by the party expressly
waiving such compliance.
12.8 COUNTERPARTS. This Agreement will be executed in two or more
counterparts, any or all of which shall constitute one and the same instrument.
12.9 GOVERNING LAW. This Agreement shall in all respects be governed by and
construed in accordance with the local laws of the State of Ohio applicable to
agreements under and to be
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performed within such State, except to the extent that the laws of some other
jurisdiction mandatorily apply other than by application of principles of
conflict of laws.
12.10 SCHEDULES. All Schedules referred to in this Agreement and attached
hereto are hereby incorporated herein and made a part hereof by this reference,
as if fully rewritten herein.
12.11 ENTIRE AGREEMENT AND AMENDMENT. This Agreement (together with the
Related Agreements and Schedules hereto) supersedes any other agreement,
commitment, arrangement or understanding of any sort whatever, whether written
or oral, that may have been made or entered into by any of the parties hereto
(or by any director, officer or other employee or representative of such
parties) relating to the matters contemplated hereby. This Agreement (together
with the Schedules hereto and Related Agreement) constitutes the entire
agreement by and among the parties hereto with respect to the subject matter
hereof, and there are no agreements, commitments, arrangements or understandings
except as expressly set forth herein. This Agreement may not be amended orally,
but only by written instrument executed by all parties hereto expressly
setting forth such amendment.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first above written.
EATON CORPORATION
By: /s/ David M. O'Loughlin
----------------------------
Title: attorney - in - fact
-------------------------
EATON SEMICONDUCTOR EQUIPMENT INC.
By: /s/ David M. O'Loughlin
----------------------------
Title: attorney - in - fact
-------------------------
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GENERAL BILL OF SALE
WHEREAS, Eaton Semiconductor Equipment Inc., a Delaware corporation
("Assignee"), and Eaton Corporation, an Ohio corporation ("Assignor"), are
parties to that certain Purchase and Sale Agreement made and entered into
December 29, 1995 regarding the purchase by Assignee of certain assets and the
assumption by Assignee of certain liabilities related to and/or arising out of
Assignor's Semiconductor Equipment Operations, all as specifically set forth
therein (the "Agreement");
NOW, THEREFORE, for good and valuable consideration paid to Assignor,
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
sells, assigns and transfers to Assignee, and Assignee's successors and assigns
forever, the "Acquired Assets" (as defined in the Agreement), other than the
"Excluded Assets" (as defined in the Agreement) and those assets that cannot or
will not be sold, assigned, transferred or delivered as set forth in Article 4
of the Agreement, in accordance with and subject to the terms and conditions of
the Agreement.
TO HAVE AND TO HOLD said assets forever unto Assignee in accordance
with and subject to the terms and conditions of the Agreement.
IN WITNESS WHEREOF, Assignor has caused this instrument to be executed
as of this 29th day of December, 1995.
EATON CORPORATION
By: /s/ David M. O'Loughlin
----------------------------
Its: attorney - in - fact
---------------------------
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GENERAL ASSUMPTION AGREEMENT
This General Assumption Agreement is made and entered into this 29th
day of December, 1995 by and between Eaton Semiconductor Equipment Inc., a
Delaware corporation ("ESEI"), and Eaton Corporation, an Ohio corporation
("Eaton"), as follows:
WHEREAS, ESEI and Eaton are parties to that certain Purchase and Sale
Agreement dated December 29, 1995 regarding the purchase of certain assets and
the assumption of certain liabilities related to and/or arising out of Eaton's
Semiconductor Equipment Operations, all as specifically set forth therein (the
"Agreement");
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Eaton hereby delegates to ESEI all
of Eaton's obligations and liabilities under the "Assumed Liabilities" (as
defined in the Agreement), but excluding the "Excluded Liabilities" (as defined
in the Agreement) and ESEI hereby assumes said obligations and liabilities and
agrees to pay, perform and discharge each of said obligations and liabilities,
all in accordance with and subject to the terms and conditions of the Agreement.
IN WITNESS WHEREOF, the parties have caused this instrument to be
executed as of this 29th day of December, 1995.
EATON SEMICONDUCTOR EQUIPMENT INC. EATON CORPORATION
By: /s/ David M. O'Loughlin By: /s/ David M. O'Loughlin
---------------------------- ----------------------------
Its: attorney - in - fact Its: attorney - in - fact
--------------------------- ---------------------------
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ASSIGNMENT OF CONTRACTS
WHEREAS, Eaton Corporation, an Ohio corporation ("Eaton"), and Eaton
Semiconductor Equipment Inc., a Delaware corporation ("ESEI"), have entered into
a Purchase and Sale Agreement dated December 29, 1995 ("Agreement"); and
WHEREAS, pursuant to the Agreement, Eaton has agreed to convey to ESEI
the "Contracts" (as defined in the Agreement);
NOW, THEREFORE, for good and valuable consideration had and received
from ESEI, Eaton does, by this instrument, give, grant, bargain, sell, assign,
transfer and confirm to ESEI, and ESEI's successors and assigns forever, Eaton's
entire right, title and interest in and to the Contracts; provided, however,
that Eaton's assignments of rights shall, with respect to each of the Contracts,
be conditional upon the consent of the other party or parties thereto, to the
extent that such consent is required. Eaton makes no representations or
warranties concerning Eaton's ability to obtain any such other party's consent
to such assignment.
IN WITNESS WHEREOF, Eaton has caused this instrument to be executed as
of this 29th day of December, 1995.
EATON CORPORATION
By: /s/ David M. O'Loughlin
----------------------------
Its: attorney - in - fact
---------------------------