1
EXHIBIT 2.5
TAX SHARING AND INDEMNIFICATION AGREEMENT,
dated as of June 30, 2000
by and among
▇▇▇▇▇ CORPORATION
and
AXCELIS TECHNOLOGIES, INC.
2
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS .......................................................2
"AFFILIATED PERSON".....................................................2
"ASSOCIATES"............................................................2
"AUDIT".................................................................2
"AXCELIS TECHNOLOGIES AFFILIATE"........................................2
"AXCELIS TECHNOLOGIES BUSINESS".........................................2
"AXCELIS TECHNOLOGIES GROUP"............................................2
"AXCELIS TECHNOLOGIES GROUP COMBINED RETURNS"...........................2
"AXCELIS TECHNOLOGIES GROUP COMBINED TAX LIABILITY".....................2
"AXCELIS TECHNOLOGIES GROUP CONSOLIDATED RETURNS".......................3
"AXCELIS TECHNOLOGIES GROUP FEDERAL INCOME TAXES".......................3
"AXCELIS TECHNOLOGIES GROUP FEDERAL INCOME TAX LIABILITY"...............3
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL COMBINED TAXES".................3
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE RETURNS"...............3
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE TAXES".................3
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE TAX LIABILITY".........3
"BENEFICIAL OWNERSHIP"..................................................3
"CODE"..................................................................3
"COMBINED GROUP"........................................................3
"COMBINED RETURN".......................................................3
"CONSOLIDATED GROUP"....................................................4
-i-
3
PAGE
"CONSOLIDATED RETURN"...................................................4
"DECONSOLIDATION".......................................................4
"DECONSOLIDATION DATE"..................................................4
"DECONSOLIDATION TAX"...................................................4
"DISTRIBUTION"..........................................................4
"EATON AFFILIATE".......................................................4
"▇▇▇▇▇ GROUP"...........................................................5
"ESTIMATED TAX INSTALLMENT DATE"........................................5
"FEDERAL INCOME TAX"....................................................5
"FEDERAL TAX"...........................................................5
"FINAL DETERMINATION"...................................................5
"GROSS ASSET VALUE".....................................................5
"GROUP".................................................................6
"INCOME TAX"............................................................6
"INTEREST ACCRUAL PERIOD"...............................................6
"IPO"...................................................................6
"MASTER SEPARATION AND DISTRIBUTION AGREEMENT"..........................6
"NON-FEDERAL COMBINED TAX"..............................................6
"NON-FEDERAL SEPARATE TAX"..............................................6
"NON-FEDERAL SEPARATE TAX RETURN".......................................6
"NON-FEDERAL TAX".......................................................6
"PAYMENT PERIOD"........................................................6
"PERSON"................................................................6
"POST-DECONSOLIDATION PERIOD"...........................................6
"PRE-DECONSOLIDATION PERIOD"............................................6
-ii-
4
PAGE
"PRIVILEGE".............................................................7
"PRO FORMA AXCELIS TECHNOLOGIES GROUP COMBINED RETURN"..................7
"PRO FORMA AXCELIS TECHNOLOGIES GROUP CONSOLIDATED RETURN"..............7
"PRO FORMA AXCELIS TECHNOLOGIES GROUP NON-FEDERAL
SEPARATE TAX RETURNS"................................................7
"RESTRICTED PERIOD".....................................................7
"RETAINED BUSINESS".....................................................7
"RULING"................................................................7
"RULING DOCUMENTS"......................................................7
"SEPARATE RETURN".......................................................7
"SEPARATION"............................................................7
"SEPARATION DATE".......................................................8
"SEPARATION TAX"........................................................8
"SERVICE"...............................................................8
"STRADDLE PERIOD".......................................................8
"TAX"...................................................................8
"TAX ASSET".............................................................8
"TAX AUTHORITY".........................................................8
"TAX ITEM"..............................................................8
"TAX RETURN"............................................................9
"TREASURY REGULATIONS"..................................................9
SECTION 2. PREPARATION AND FILING OF TAX RETURNS..............................9
2.1 IN GENERAL......................................................9
2.2 MANNER OF PREPARING AND FILING TAX RETURNS......................9
2.3 AGENT..........................................................10
-iii-
5
SECTION 3. PAYMENT OF TAXES TO TAX AUTHORITIES...............................10
3.1 FEDERAL INCOME TAXES...........................................10
3.2 NON-FEDERAL COMBINED TAXES.....................................10
3.3 NON-FEDERAL SEPARATE TAXES.....................................10
3.4 OTHER FEDERAL TAXES............................................11
SECTION 4. ALLOCATION OF TAXES...............................................11
4.1 AXCELIS TECHNOLOGIES GROUP FEDERAL INCOME TAX LIABILITY........11
4.2 AXCELIS TECHNOLOGIES GROUP COMBINED TAX LIABILITY..............12
4.3 AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE TAX LIABILITY..12
4.4 COOPERATION....................................................12
4.5 TAX SHARING INSTALLMENT PAYMENTS...............................13
4.6 TAX SHARING TRUE UP PAYMENTS...................................13
4.7 REDETERMINATION AMOUNTS........................................14
4.8 PAYMENT OF TAXES FOR POST-DECONSOLIDATION PERIODS..............15
SECTION 5. TAX ATTRIBUTES....................................................15
5.1 ALLOCATION OF TAX ITEMS........................................15
5.2 POST DECONSOLIDATION...........................................15
SECTION 6. ADDITIONAL OBLIGATIONS............................................15
6.1 PROVISION OF INFORMATION AND MUTUAL COOPERATION................15
6.2 INDEMNIFICATION................................................17
6.3 TAX CONSEQUENCES OF PAYMENTS...................................17
6.4 INTEREST.......................................................18
6.5 OUTSIDE FEES...................................................18
6.6 CARRYBACKS.....................................................18
-iv-
6
PAGE
SECTION 7. AUDITS............................................................18
7.1 IN GENERAL.....................................................18
7.2 NOTICE.........................................................19
7.3 FAILURE TO NOTIFY..............................................19
7.4 REMEDIES.......................................................19
SECTION 8. IPO...............................................................19
8.1 IPO RELATED ITEMS..............................................19
8.2 TAX REPORTING OF IPO RELATED ITEMS.............................20
8.3 AUDITS RELATING TO SEPARATION..................................20
8.4 PROVISION OF INFORMATION AND MUTUAL COOPERATION................20
8.5 PRESS RELEASES.................................................21
SECTION 9. DISTRIBUTION......................................................21
9.1 DISTRIBUTION RELATED ITEMS.....................................21
9.2 INFORMATION FOR SHAREHOLDERS...................................24
9.3 ALLOCATION OF TAX ASSETS.......................................24
SECTION 10. MISCELLANEOUS....................................................25
10.1 EFFECTIVENESS..................................................25
10.2 NOTICES........................................................25
10.3 CHANGES IN LAW.................................................25
10.4 SUCCESSORS AND ASSIGNS.........................................25
10.5 AUTHORIZATION, ETC.............................................26
10.6 COMPLETE AGREEMENT.............................................26
10.7 INTERPRETATION.................................................26
10.8 GOVERNING LAW..................................................26
10.9 COUNTERPARTS...................................................26
-v-
7
PAGE
10.10 LEGAL ENFORCEABILITY...........................................26
10.11 NO THIRD PARTY BENEFICIARIES...................................26
10.12 JURISDICTION; FORUM............................................27
10.13 AMENDMENT AND ▇▇▇▇▇▇▇▇▇▇▇▇.....................................▇▇
-▇▇-
▇
TAX SHARING AND INDEMNIFICATION AGREEMENT
TAX SHARING AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated as
of June 30, 2000, by and among ▇▇▇▇▇ Corporation ("Eaton"), an Ohio corporation,
and Axcelis Technologies, Inc. ("Axcelis Technologies"), a Delaware corporation
and wholly owned subsidiary of Eaton.
RECITALS
WHEREAS, Eaton is the common parent corporation of an affiliated group
of corporations within the meaning of Section 1504(a) of the Code (as defined
herein) and of consolidated, combined, unitary and other similar groups as
defined under similar laws of other jurisdictions, and Axcelis Technologies and
certain Axcelis Technologies Affiliates (as defined herein) are members of such
groups;
WHEREAS, the groups of which Eaton is the common parent and Axcelis
Technologies and the Axcelis Technologies Affiliates are members file or intend
to file Consolidated Returns, Combined Returns and Separate Returns (as defined
herein);
WHEREAS, in addition to its other businesses, Eaton has been engaged
through Axcelis Technologies and its various subsidiaries and divisions in the
Axcelis Business (as defined herein);
WHEREAS, Axcelis Technologies and its various subsidiaries and
divisions have been engaged in various businesses, primarily manufacturing,
selling and servicing semiconductor manufacturing equipment;
WHEREAS, the Boards of Directors of Eaton and Axcelis Technologies have
each determined that it would be appropriate and desirable for Eaton to
contribute and transfer to Axcelis Technologies, and for Axcelis Technologies to
receive and assume, directly or indirectly, the assets and liabilities
(including contingent liabilities) of Eaton and its Subsidiaries associated with
the Axcelis Technologies Business to the extent not contributed and transferred
to Axcelis Technologies prior to the date hereof (the "Separation");
WHEREAS, Eaton and Axcelis Technologies currently contemplate that,
following the Separation, Axcelis Technologies will make an initial public
offering ("IPO") of an amount of its common stock pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended that will
reduce ▇▇▇▇▇'▇ ownership interest in Axcelis Technologies to not less than 80.1%
of the outstanding common stock of Axcelis Technologies;
WHEREAS, Eaton currently plans to complete the Distribution (as defined
herein) approximately six months following the IPO; and
WHEREAS, it is appropriate and desirable to set forth the principles
and responsibilities of the parties to this Agreement regarding the allocation
of Taxes (as defined
9
herein) and other related liabilities and adjustments with respect to Taxes,
Audits (as defined herein) and other related Tax matters.
NOW, THEREFORE, in consideration of the premises or promises and the
mutual covenants contained herein and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS - Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Master Separation and
Distribution Agreement (as defined herein). As used in this Agreement,
capitalized terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined).
"AFFILIATED PERSON" has the meaning ascribed to such term in the
Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder.
"ASSOCIATES" has the meaning ascribed to such term in the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
"AUDIT" includes any audit, assessment of Taxes, other examination by
any Tax Authority, proceeding, or appeal of such a proceeding relating to Taxes,
whether administrative or judicial (including without limitation any
determination with respect to a claim for refund).
"AXCELIS TECHNOLOGIES AFFILIATE" means any corporation or other entity
in which Axcelis Technologies owns at least fifty percent (50%) of the total
combined voting power (at any time after the completion of the Separation).
"AXCELIS TECHNOLOGIES BUSINESS" has the meaning set forth in the Master
Separation and Distribution Agreement.
"AXCELIS TECHNOLOGIES GROUP" means the affiliated group of corporations
as defined in Section 1504(a) of the Code, or similar group of entities as
defined under corresponding provisions of the laws of other jurisdictions
following the completion of the Separation, of which Axcelis Technologies would
be the common parent if it were not a subsidiary of Eaton, and any corporation
or other entity which would be a member of such group for the relevant taxable
period or portion thereof.
"AXCELIS TECHNOLOGIES GROUP COMBINED RETURNS" means, any tax return
with respect to Non-Federal Taxes filed on a consolidated, combined (including
nexus combination, worldwide combination, domestic combination, line of business
combination or any other form of combination) or unitary basis wherein Axcelis
Technologies and one or more Axcelis Technologies Affiliates join in the filing
of such Tax Return.
-2-
10
"AXCELIS TECHNOLOGIES GROUP COMBINED TAX LIABILITY" means, with respect
to any taxable period, the Axcelis Technologies Group's liability for
Non-Federal Combined Taxes as determined under Section 4.2 of this Agreement.
"AXCELIS TECHNOLOGIES GROUP CONSOLIDATED RETURNS" means, any Tax Return
with respect to Federal Income Taxes filed on a consolidated basis wherein
Axcelis Technologies and one or more Axcelis Technologies Affiliates join in the
filing of such Tax Return (for any taxable period or portion thereof).
"AXCELIS TECHNOLOGIES GROUP FEDERAL INCOME TAXES" means, means any Tax
imposed under Subtitle A of the Code or any other provision of United States
federal Income Tax law (including the Taxes imposed by Sections 11, 55, 59A, and
1201(a) of the Code), and any interest, additions to Tax or penalties applicable
or related thereto that are assessed against Axcelis Technologies or any Axcelis
Technologies Affiliate.
"AXCELIS TECHNOLOGIES GROUP FEDERAL INCOME TAX LIABILITY" means, with
respect to any taxable period, the Axcelis Technologies Group's liability for
Federal Income Taxes as determined under Section 4.1 of this Agreement.
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL COMBINED TAXES" means, any
Non-Federal Tax with respect to which a Combined Return is filed by the Axcelis
Technologies Group.
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE RETURNS" means, any
tax return filed with respect to Non-Federal Separate Taxes by Axcelis
Technologies or any member of the Axcelis Technologies Group.
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE TAXES" means, any
Non-Federal Tax other than a Non-Federal Combined Tax assessed again Axcelis
Technologies or any member of the Axcelis Technologies Group.
"AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE TAX LIABILITY" means,
with respect to any taxable period, the Axcelis Technologies Group's liability
for Non-Federal Separate Taxes as determined under Section 4.3 of this
Agreement.
"BENEFICIAL OWNERSHIP" has the meaning ascribed to such term in the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
"CODE" means the United States Internal Revenue Code of 1986, as
amended, or any successor statute.
"COMBINED GROUP" means a group of corporations or other entities that
files a Combined Return or a corporation or other entity that files a Combined
Return described in clause (ii) or clause (iii) of the definition of "Combined
Return."
-3-
11
"COMBINED RETURN" means any Tax Return with respect to Non-Federal
Taxes (i) filed on a consolidated, combined (including nexus combination,
worldwide combination, domestic combination, line of business combination or any
other form of combination) or unitary basis wherein Axcelis Technologies or one
or more Axcelis Technologies Affiliates join in the filing of such Tax Return
(for any taxable period or portion thereof) with Eaton or one or more Eaton
Affiliates, (ii) filed on a separate basis that includes Tax Items relating to,
or arising from, both the Axcelis Business and the Retained Business, or (iii)
pursuant to which Tax Items or Tax Assets of (A) Eaton (or any Eaton Affiliate)
are included on a separate Tax Return of Axcelis Technologies (or any Axcelis
Technologies Affiliate) or (B) Axcelis Technologies (or any Axcelis Technologies
Affiliate) are included on a separate Tax Return of Eaton (or any Eaton
Affiliate).
"CONSOLIDATED GROUP" means an affiliated group of corporations within
the meaning of Section 1504(a) of the Code that files a Consolidated Return.
"CONSOLIDATED RETURN" means any Tax Return with respect to Federal
Income Taxes filed on a consolidated basis wherein Axcelis Technologies or one
or more Axcelis Technologies Affiliates join in the filing of such Tax Return
(for any taxable period or portion thereof) with Eaton or one or more Eaton
Affiliates.
"DECONSOLIDATION" means with respect to each Tax Return (i) any event
pursuant to which Axcelis Technologies ceases to be a subsidiary corporation
includible in the Consolidated Return, (ii) any event pursuant to which neither
Axcelis Technologies nor any Axcelis Technologies Affiliate continues to be
included in a Combined Return which includes Eaton and/or a Eaton Affiliate,
(iii) any event (including as a result of transactions contemplated by the
Separation) pursuant to which Tax Items relating to, or arising from, both the
Axcelis Business and the Retained Business are no longer included on a Combined
Return described in clause (ii) of the definition of Combined Return or (iv) any
event pursuant to which a Tax Return described in clause (iii) of the definition
of Combined Return no longer includes Tax Items or Tax Assets of both Eaton (or
any Eaton Affiliate) and Axcelis Technologies (or any Axcelis Technologies
Affiliate).
"DECONSOLIDATION DATE" means the day on which a Deconsolidation occurs.
"DECONSOLIDATION TAX" means any Tax, resulting from a Deconsolidation,
taken into account under Section 1.1502-13 or Section 1.1502-19 or any
predecessor provision of the Treasury Regulations (or any similar provision
under Non-Federal Tax law).
"DISTRIBUTION" means any distribution (or exchange) by Eaton or any
Eaton Affiliate, with respect to its stock, of the stock of Axcelis Technologies
(or any successor corporation or corporation which owns stock of Axcelis
Technologies) in a transaction intended to qualify under Section 355 of the
Code.
"EATON AFFILIATE" means any corporation or other entity in which Eaton
owns more than fifty percent (50%) of the total combined voting power (at any
time after the
-4-
12
completion of the Separation), other than Axcelis Technologies or any Axcelis
Technologies Affiliate.
"▇▇▇▇▇ GROUP" means the affiliated group of corporations as defined in
Section 1504(a) of the Code, or similar group of entities as defined under
corresponding provisions of the laws of other jurisdictions, of which Eaton is
the common parent, and any corporation or other entity which is a member of such
group for the relevant taxable period or portion thereof, but excluding any
member of the Axcelis Technologies Group.
"ESTIMATED TAX INSTALLMENT DATE" means, in the case of Federal Income
Tax, the installment due dates prescribed in Section 6655(c) of the Code
(presently April 15, June 15, September 15 and December 15) together with due
date for applying for an extension of time to file a return prescribed in
Section 6072 of the Code or such other dates as may be prescribed by relevant
provisions by statute or regulation with respect to other Federal and
Non-Federal Taxes.
"FEDERAL INCOME TAX" means any Tax imposed under Subtitle A of the Code
or any other provision of United States federal Income Tax law (including the
Taxes imposed by Sections 11, 55, 59A, and 1201(a) of the Code), and any
interest, additions to Tax or penalties applicable or related thereto.
"FEDERAL TAX" means any Tax imposed under the Code or otherwise under
United States federal Tax law.
"FINAL DETERMINATION" means the final resolution of any Tax (or other
matter) for a taxable period, including related interest or penalties, that,
under applicable law, is not subject to further appeal, review or modification
through proceedings or otherwise, including (1) by the expiration of a statute
of limitations or a period for the filing of claims for refunds, amending Tax
Returns, appealing from adverse determinations, or recovering any refund
(including by offset), (2) by a decision, judgment, decree, or other order by a
court of competent jurisdiction, which has become final and unappealable, (3) by
a closing agreement or an accepted offer in compromise under Section 7121 or
7122 of the Code, or comparable agreements under laws of other jurisdictions,
(4) by execution of an Internal Revenue Service Form 870 or 870AD, or by a
comparable form under the laws of other jurisdictions (excluding, however, with
respect to a particular Tax Item for a particular taxable period any such form
that reserves (whether by its terms or by operation of law) the right of the
taxpayer to file a claim for refund and/or the right of the Tax Authority to
assert a further deficiency with respect to such Tax Item for such period), or
(5) by any allowance of a refund or credit, but only after the expiration of all
periods during which such refund or credit may be recovered (including by way of
offset).
"GROSS ASSET VALUE" means, when used with respect to a specified
Person, the fair market value of such Person's assets unencumbered by any
liabilities.
"GROUP" means either the ▇▇▇▇▇ Group or the Axcelis Technologies Group,
as the context provides.
-5-
13
"INCOME TAX" means (a) any Tax based upon, measured by, or calculated
with respect to (1) net income or profits (including, without limitation, any
capital gains Tax, minimum Tax and any Tax on items of Tax preference, but not
including sales, use, real or personal property, gross or net receipts, transfer
or similar Taxes) or (2) multiple bases if one or more of the bases upon which
such Tax may be based, measured by, or calculated with respect to, is described
in clause (1) above, or (b) any United States state or local franchise Tax.
"INTEREST ACCRUAL PERIOD" has the meaning set forth in Section 6.4 of
this Agreement.
"IPO" has the meaning set forth in the Recitals.
"MASTER SEPARATION AND DISTRIBUTION AGREEMENT" means the Master
Separation and Distribution Agreement, dated as of June 30, 2000 by and between
Eaton and Axcelis Technologies.
"NON-FEDERAL COMBINED TAX" means any Non-Federal Tax with respect to
which a Combined Return is filed.
"NON-FEDERAL SEPARATE TAX" means any Non-Federal Tax other than a
Non-Federal Combined Tax.
"NON-FEDERAL SEPARATE TAX RETURN" means any Tax Return filed with
respect to Non-Federal Separate Taxes.
"NON-FEDERAL TAX" means any Tax other than a Federal Tax.
"PAYMENT PERIOD" has the meaning set forth in Section 6.4 of this
Agreement.
"PERSON" means any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
"POST-DECONSOLIDATION PERIOD" means any taxable period with respect to
a Consolidated Return or Combined Return, as the case may be, beginning after a
Deconsolidation Date.
"PRE-DECONSOLIDATION PERIOD" means any taxable period with respect to a
Consolidated Return or Combined Return, as the case may be, beginning and ending
on or before a Deconsolidation Date.
"PRIVILEGE" means any privilege that may be asserted under applicable
law including, any privilege arising under or relating to the attorney-client
relationship (including the attorney-client and work product privileges), the
accountant-client privilege, and any privilege relating to internal evaluation
processes.
-6-
14
"PRO FORMA AXCELIS TECHNOLOGIES GROUP COMBINED RETURN" means a pro
forma Non-Federal Combined Tax return or other schedule prepared pursuant to
Section 4.2 of this Agreement.
"PRO FORMA AXCELIS TECHNOLOGIES GROUP CONSOLIDATED RETURN" means a pro
forma consolidated Federal Income Tax return or other schedule prepared pursuant
to Section 4.1 of this Agreement.
"PRO FORMA AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE TAX RETURNS"
means a pro forma Non-Federal Separate Tax return or other schedule prepared
pursuant to Section 4.3 of this Agreement.
"RESTRICTED PERIOD" means the two-year period following the date the
Distribution occurs.
"RETAINED BUSINESS" means all lines of business retained by Eaton
following any Deconsolidation.
"RULING" means (a) the initial private letter ruling, if any, issued by
the Service in connection with the Distribution (and any related transactions)
or (b) any similar ruling issued by any Tax Authority other than the Service in
connection with the Distribution (and any related transactions).
"RULING DOCUMENTS" means (a) the request for the Ruling submitted to
the Service, together with the appendices and exhibits thereto and any
supplemental filings or other materials subsequently submitted to the Service,
in connection with the Distribution (and any related transactions) or (b) any
similar filings submitted to any other Tax Authority in connection with the
Distribution (and any related transactions).
"SEPARATE RETURN" means any Tax Return with respect to Non-Federal
Separate Taxes filed by Eaton, Axcelis Technologies, or any of their respective
affiliates.
"SEPARATION" has the meaning set forth in the Recitals.
"SEPARATION DATE" has the meaning set forth in the Master Separation
and Distribution Agreement.
"SEPARATION TAX" means any Tax (net of any current benefit arising from
any Tax Asset) resulting from the Separation imposed upon Eaton or any Eaton
Affiliate or Axcelis Technologies or any Axcelis Technologies Affiliate;
provided that, such term shall not refer to the collateral Tax effects of the
Separation (including, without limitation, relating to the tax basis of assets
comprising the Axcelis Business or the amount, if any, of Tax Assets or earnings
and profits of Axcelis Technologies or any Axcelis Technologies Affiliate
following the Separation).
-7-
15
"SERVICE" means the Internal Revenue Service or any successor agency or
authority.
"STRADDLE PERIOD" means any taxable period with respect to a
Consolidated Return, Combined Return or Separate Return, as the case may be,
beginning on or before the Deconsolidation Date and ending after the
Deconsolidation Date.
"TAX" means any charges, fees, levies, imposts, duties, or other
assessments of a similar nature, including income, alternative or add-on
minimum, gross receipts, profits, lease, service, service use, wage, wage
withholding, employment, workers compensation, business occupation, occupation,
premiums, environmental, estimated, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
withholding, social security, unemployment, disability, ad valorem, highway use,
commercial rent, capital stock, paid up capital, recording, registration,
property, real property gains, value added, business license, custom duties, or
other tax or governmental fee of any kind whatsoever, imposed or required to be
withheld by any Tax Authority including any interest, additions to tax, or
penalties applicable or related thereto.
"TAX ASSET" means any Tax Item that could reduce a Tax, including a net
operating loss, net capital loss, investment tax credit, foreign tax credit,
charitable deduction or credit related to alternative minimum tax or any other
Tax credit.
"TAX AUTHORITY" means a U. S. or foreign governmental authority or any
subdivision, agency, commission or authority thereof or any quasi-governmental
or private body having jurisdiction over the assessment, determination,
collection or imposition of any Tax (including, without limitation, the
Service).
"TAX ITEM" means any item of income, gain, loss, deduction or credit,
or other attribute that may have the effect of increasing or decreasing any Tax.
"TAX RETURN" means any return, report, certificate, form or similar
statement or document (including, any related or supporting information or
schedule attached thereto and any information return, amended tax return, claim
for refund or declaration of estimated tax) required to be supplied to, or filed
with, a Tax Authority in connection with the determination, assessment or
collection of any Tax or the administration of any laws, regulations or
administrative requirements relating to any Tax.
"TREASURY REGULATIONS" means the final, temporary and proposed income
tax regulations promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
SECTION 2. PREPARATION AND FILING OF TAX RETURNS
2.1 IN GENERAL. (a) For any Pre-Deconsolidation Period, Eaton shall
have the sole and exclusive responsibility for the preparation and filing of:
(1) all Consolidated Returns, (2) all Combined Returns and (3) all Separate
Returns.
-8-
16
(b) For the Straddle Period, Eaton shall have the sole and
exclusive responsibility for the preparation and filing of: (1) all Consolidated
Returns, (2) all Combined Returns and (3) all Separate Returns.
(c) For all Post-Deconsolidation Periods, Axcelis Technologies
shall have the sole and exclusive responsibility for the preparation and filing
of: (1) all Axcelis Technologies Group Consolidated Returns, (2) all Axcelis
Technologies Group Combined Returns, and (3) all Axcelis Technologies Group
Non-Federal Separate Returns.
2.2 MANNER OF PREPARING AND FILING TAX RETURNS. (a) All Tax Returns
filed after the date of this Agreement by Eaton or any Eaton Affiliate, shall be
(1) prepared in a manner that is consistent with (i) Sections 5.1 and 10.3 of
this Agreement and (ii) any Ruling Documents or Ruling, and (2) filed on a
timely basis (taking into account applicable extensions) by Eaton.
(b) Eaton shall have the exclusive right, in its sole
discretion, with respect to any Tax Return relating to the Pre-Deconsolidation
and Straddle Periods to determine (1) the manner in which such Tax Return shall
be prepared and filed, including the elections, methods of accounting,
positions, conventions and principles of taxation to be used and the manner in
which any Tax Item shall be reported, (2) whether any extensions may be
requested, (3) the elections that will be made by Eaton, any Eaton Affiliate,
Axcelis Technologies, and any Axcelis Technologies Affiliate on such Tax Return,
(4) whether any amended Tax Returns shall be filed, (5) whether any claims for
refund shall be made, (6) whether any refunds shall be paid by way of refund or
credited against any liability for the related Tax, and (7) whether to retain
outside firms to prepare or review such Tax Return. Eaton agrees to provide
Axcelis Technologies with a copy of each such Tax Return prior to the due date
for the filing of any such Tax Return (giving effect to applicable extensions)
for such taxable years sufficiently in advance of such date to allow Axcelis
Technologies the opportunity to review and comment on any such Tax Return.
(c)(1) Axcelis Technologies shall be responsible for providing
financial, transactional, legal and other information in a timely manner as
necessary for the preparation of the returns described in Sections 2.1(a) and
(b) of this Agreement. Information shall be requested and submitted by way of
annual tax workpaper packages (due no later than March 31, for the preceding tax
year ended December 31), sales and use tax reports (submitted as required to
meet reporting deadlines in accordance with the continuation of the current
process), other miscellaneous information requests and other supporting
documentation. Such information shall be submitted within 30 days of written
request in accordance with ▇▇▇▇▇'▇ normal information request practices and due
dates.
(2) For a period of one year beginning on the Deconsolidation
Date, Axcelis Technologies may elect to have Eaton prepare the returns described
in Section 2.1(c) of this Agreement. If Axcelis Technologies so elects then it
shall provide written notice to Eaton as provided in Section 10.2. Eaton shall
prepare such returns in accordance with the terms and conditions contained in
the Transitional Services Agreement, dated as of June 30, 2000 by
-9-
17
and between Eaton and Axcelis Technologies, for services rendered pursuant to
this Section 2.2(c)(2).
2.3 AGENT. Subject to the other applicable provisions of this
Agreement, Axcelis Technologies hereby irrevocably designates, and agrees to
cause each Axcelis Technologies Affiliate to so designate, Eaton as its sole and
exclusive agent and attorney-in-fact to take such action (including execution of
documents) as Eaton, in its sole discretion, may deem appropriate in any and all
matters (including Audits) relating to any Tax Return described in Sections
2.1(a) and (b) of this Agreement.
SECTION 3. PAYMENT OF TAXES TO TAX AUTHORITIES
3.1 FEDERAL INCOME TAXES. Eaton shall pay (or cause to be paid) to the
Service all Federal Income Taxes with respect to any Consolidated Return due and
payable for all Pre-Deconsolidation Periods and Straddle Periods. Axcelis
Technologies shall pay (or cause to be paid) to the Service all Axcelis
Technologies Group Federal Income Taxes due and payable for all
Post-Deconsolidation Periods.
3.2 NON-FEDERAL COMBINED TAXES. Eaton shall pay (or cause to be paid)
to the appropriate Tax Authorities all Non-Federal Combined Taxes with respect
to any Combined Return due and payable for all Pre-Deconsolidation Periods and
Straddle Periods. Axcelis Technologies shall pay (or cause to be paid) to the
appropriate Tax Authorities all Axcelis Technologies Group Non-Federal Combined
Taxes with respect to any Combined Return due and payable for
Post-Deconsolidation Periods.
3.3 NON-FEDERAL SEPARATE TAXES. Eaton shall pay (or cause to be paid)
to the appropriate Tax Authorities all Non-Federal Separate Taxes due and
payable for Pre-Deconsolidation Periods and Straddle Periods. Axcelis
Technologies shall pay (or cause to be paid) to the appropriate Tax Authorities
all Axcelis Technologies Group Non-Federal Separate Taxes due and payable for
Post-Deconsolidation Periods.
3.4 OTHER FEDERAL TAXES. The parties shall each pay (or cause to be
paid) to the appropriate Tax Authorities all of their respective Federal Taxes
(excluding Federal Income Taxes for Pre-Deconsolidation Periods and Straddle
Periods which are governed by Section 3.1 of this Agreement).
SECTION 4. ALLOCATION OF TAXES
4.1 AXCELIS TECHNOLOGIES GROUP FEDERAL INCOME TAX LIABILITY. With
respect to each Pre-Deconsolidation Period beginning after December 31, 1999
(including the Straddle Period), the Axcelis Technologies Group Federal Income
Tax Liability for such taxable period shall be the Axcelis Technologies Group's
liability for Federal Income Taxes for such taxable period, as determined on a
Pro Forma Axcelis Technologies Group Consolidated Return prepared:
-10-
18
(i) on a basis consistent with the preparation of the
Consolidated Return for such period, determined by including only Tax Items of
members of the Axcelis Technologies Group which are included in the Consolidated
Return and by allocating Tax Assets to the Axcelis Technologies Group to the
extent that the Tax Asset was created by a member of the Axcelis Technologies
Group and such Tax Asset was actually utilized on the relevant Consolidated
Return; and
(ii) applying the highest statutory marginal corporate income
Tax rate in effect for such taxable period (or portion thereof); provided that,
in the event that the federal alternative minimum Tax applies to the
Consolidated Return, the Axcelis Technologies Group Federal Income Tax Liability
shall equal the lesser of (i) the alternative minimum Tax liability with respect
to the Consolidated Return that would result by including only Tax Items and Tax
Assets of members of the Axcelis Technologies Group included in the Consolidated
Return or (ii) the aggregate Tax liability payable with respect to such
Consolidated Return.
(iii) The principles of Treasury Regulation Section
1.1502-33(d)(3) also shall apply to the allocation set forth in Sections 4.1(i)
and (ii). If the amount of the consolidated federal income tax liability due
under any Consolidated Return is less than the sum of the aggregate separate
return tax liabilities of the Axcelis Technology Group and the ▇▇▇▇▇ Group (as
computed pursuant to Sections 4.1(i) and (ii) above) due to losses or tax
credits of one Group (including losses or tax credits carried over from prior
years), the decrease in tax liability resulting therefrom shall be allocated 100
percent to that Group. A Group thus may have a "negative" income tax liability
as a result of such an allocation (a "Loss Group"). If a Loss Group exists, the
other Group shall pay to the Loss Group in a timely manner an amount equal to
such "negative" income tax liability. In other words, if Tax attributes (e.g.,
losses or tax credits) of one Group are utilized by the other Group to reduce
taxable income or Tax, as the case may be, the Group utilizing such Tax
attributes shall pay to the other Group, with respect to losses, an amount equal
to such reduction in taxable income resulting from the utilization of such
losses multiplied by the top marginal federal corporate income Tax rate actually
used by the Group utilizing the losses in calculating its deemed Tax liability
(prior to the application of Tax credits against such liability) under Sections
4.1(i) and (ii) for the taxable period during which such losses are utilized
and, with respect to Tax credits, an amount equal to the actual amount by which
the deemed Tax liability calculated pursuant to Sections 4.1(i) and (ii) is
reduced by such Tax credits for the taxable period during which such Tax credits
are utilized.
4.2 AXCELIS TECHNOLOGIES GROUP COMBINED TAX LIABILITY. With respect to
any Pre-Deconsolidation Period beginning after December 31, 1999, the Axcelis
Technologies Group Combined Tax Liability shall be the sum for such taxable
period of the Axcelis Technologies Group's liability for each Non-Federal
Combined Tax, as determined on Pro Forma Axcelis Technologies Group Combined
Returns prepared in a manner consistent with the principles and procedures set
forth in Sections 4.1(i) and (ii) hereof. The Pro Forma Axcelis Technologies
Group Combined Returns relating to Tax Returns described in clauses (ii) and
(iii) of the definition of "Combined Return" shall be prepared by including only
Tax Items and Tax Assets relating to or arising from the Axcelis Business. The
principles of Section 4.1(iii) shall also apply to this section 4.2.
-11-
19
4.3 AXCELIS TECHNOLOGIES GROUP NON-FEDERAL SEPARATE TAX LIABILITY. With
respect to any Pre-Deconsolidation Period beginning after December 31, 1999, the
Axcelis Technologies Group Non-Federal Separate Tax Liability shall be the sum
for such taxable period of the Axcelis Technologies Group's liability for each
Non-Federal Separate Tax, as determined on Pro Forma Axcelis Technologies Group
Non-Federal Separate Returns prepared in a manner consistent with the principles
and procedures set forth in Section 4.1 hereof. The Pro Forma Axcelis
Technologies Group Non-Federal Separate Returns shall be prepared by including
only Tax Items and Tax Assets relating to or arising from the Axcelis Business.
4.4 COOPERATION. (a) Eaton and Axcelis Technologies agree to cooperate
in good faith in connection with the preparation of such pro forma tax returns
and agree to make reasonably available any documents, information or employees
in connection therewith. However, with respect to any Pre-Deconsolidation Period
beginning after December 31, 1999, Eaton shall have the sole and exclusive
responsibility for the preparation of any Pro Forma Axcelis Technologies Group
Consolidated Returns, Pro Forma Axcelis Technologies Group Combined Returns and
Pro Forma Axcelis Technologies Group Non-Federal Separate Returns. and Eaton
shall have the exclusive right, in its sole discretion, to determine the proper
application of the requirements set forth in Section 4.1 hereof.
(b) The Pro Forma Axcelis Technologies Group Consolidated
Returns, Pro Forma Axcelis Technologies Group Combined Returns and Pro Forma
Axcelis Technologies Group Non-Federal Separate Returns, workpapers and other
supporting documentation shall be completed no later than thirty (30) business
days prior to the date on which the related Consolidated Return, Combined Return
or Separate Return, as the case may be, is filed with the appropriate Tax
Authority.
4.5 TAX SHARING INSTALLMENT PAYMENTS. (a) FEDERAL INCOME TAXES. Not
later than two (2) business days prior to each Estimated Tax Installment Date
with respect to any Pre-Deconsolidation Period beginning after December 31,
1999, the parties shall, consistent with ▇▇▇▇▇'▇ current period annualization
election and past practice, determine under the principles of Section 6655 of
the Code the estimated amount of the related installment of the Axcelis
Technologies Group Federal Income Tax Liability. Axcelis Technologies shall pay
to Eaton the amount thus determined on or before such Estimated Tax Installment
Date. The parties acknowledge and agree that, for purposes of this Section
4.5(a), Axcelis Technologies has paid to Eaton no amounts as of the date hereof,
with respect to the taxable period beginning January 1, 2000.
(b) NON-FEDERAL COMBINED TAXES. Eaton shall, in connection
with any installment payment (payable with respect to any Combined Return
prepared and filed by Eaton) with respect to Non-Federal Combined Taxes for any
Pre-Deconsolidation Period beginning after December 31, 1999, consistent with
▇▇▇▇▇'▇ current period annualization elections and past practice, determine the
estimated amount of the related installment of the Axcelis Technologies Group
Combined Tax Liability. From time to time, Eaton may provide Axcelis
Technologies with a written statement setting forth amounts owed by Axcelis
-12-
20
Technologies in connection with any installment payments with respect to
Non-Federal Combined Taxes made by Eaton for the immediately preceding month and
any other month for which a statement has not previously been provided by Eaton.
Axcelis Technologies shall pay the amounts set forth on any statement upon
receipt of such statement. The parties acknowledge and agree that, for purposes
of this Section 4.5(b), Axcelis Technologies has paid no amounts to Eaton with
respect to the taxable period beginning January 1, 2000.
(c) NON-FEDERAL SEPARATE TAXES. Eaton shall, in connection
with any installment payment (payable with respect to any Separate Return
prepared and filed by Eaton) with respect to Non-Federal Separate Taxes for any
Pre-Deconsolidation Period beginning after December 31, 1999, consistent with
▇▇▇▇▇'▇ current period annualization elections and past practice, determine the
estimated amount of the related installment of the Axcelis Technologies Group
Non-Federal Separate Tax Liability. From time to time, Eaton may provide Axcelis
Technologies with a written statement setting forth amounts owed by Axcelis
Technologies in connection with any installment payments with respect to
Non-Federal Separate Taxes made by Eaton for the immediately preceding month and
any other month for which a statement has not previously been provided by Eaton.
Axcelis Technologies shall pay the amounts set forth on any statement upon
receipt of such statement. The parties acknowledge and agree that, for purposes
of this Section 4.5(c), Axcelis Technologies has paid no amounts to Eaton with
respect to the taxable period beginning January 1, 2000.
4.6 TAX SHARING TRUE UP PAYMENTS. (a) FEDERAL INCOME TAXES. Not later
than thirty (30) business days following the completion of any Pro Forma Axcelis
Technologies Group Consolidated Return, Axcelis Technologies shall pay to Eaton,
or Eaton shall pay to Axcelis Technologies, as appropriate, an amount equal to
the difference, if any, between the Axcelis Technologies Group Federal Income
Tax Liability for the Pre-Deconsolidation Period and the aggregate amount paid
by Axcelis Technologies with respect to such period under Section 4.5(a) of this
Agreement.
(b) NON-FEDERAL COMBINED TAXES. Not later than thirty (30)
business days following the completion of any Pro Forma Axcelis Technologies
Group Combined Return, Axcelis Technologies shall pay to Eaton, or Eaton shall
pay to Axcelis Technologies, as appropriate, an amount equal to the difference,
if any, between the Axcelis Technologies Group Combined Tax Liability for the
Pre-Deconsolidation Period and the amounts paid by Axcelis Technologies with
respect to such period under Section 4.5(b) of this Agreement.
(c) NON-FEDERAL SEPARATE TAXES. Not later than thirty (30)
business days following the completion of any Pro Forma Axcelis Technologies
Group Separate Return, Axcelis Technologies shall pay to Eaton, or Eaton shall
pay to Axcelis Technologies, as appropriate, an amount equal to the difference,
if any, between the Axcelis Technologies Group Separate Tax Liability for the
Pre-Deconsolidation Period and the amounts paid by Axcelis Technologies with
respect to such period under Section 4.5(c) of this Agreement.
-13-
21
4.7 REDETERMINATION AMOUNTS. For any Pre-Deconsolidation Period or
Straddle Period beginning after December 31, 1999, in the event of a
redetermination of any Tax Item of any member of a Consolidated Group or
Combined Group as a result of a Final Determination, the filing of a Tax refund
claim or the filing of an amended Tax Return pursuant to which Taxes are paid to
a Tax Authority or a refund of Taxes is received from a Tax Authority, Eaton
shall prepare, in accordance with the principles and procedures set forth in
this Section 4, revised Pro Forma Axcelis Technologies Group Consolidated
Returns, revised Pro Forma Axcelis Technologies Group Combined Returns and/or
revised Pro Forma Axcelis Technologies Group Non-Federal Separate Returns, as
appropriate, to reflect the redetermination of such Tax Item as a result of such
Final Determination, filing of a Tax refund claim or filing of an amended Tax
Return. Following the preparation of such revised pro forma tax returns, Axcelis
Technologies's payment obligations under Sections 4.1, 4.2 and 4.3 hereof shall
be redetermined to reflect Axcelis Technologies's Tax liability pursuant to the
revised Pro Forma Axcelis Technologies Group Consolidated Returns, revised Pro
Forma Axcelis Technologies Group Combined Returns and/or revised Pro Forma
Axcelis Technologies Group Non-Federal Separate Returns prepared pursuant to
this Section 4.7. Axcelis Technologies shall pay to Eaton the amount by which
the Tax liability reflected on the revised Pro Forma Axcelis Technologies Group
Consolidated Returns, revised Pro Forma Axcelis Technologies Group Combined
Returns and/or revised Pro Forma Axcelis Technologies Group Non-Federal Separate
Returns exceeds the Tax liability reflected on the original Pro Forma Axcelis
Technologies Group Consolidated Returns, original Pro Forma Axcelis Technologies
Group Combined Returns and/or original Pro Forma Axcelis Technologies Group
Non-Federal Separate Returns, and Eaton shall pay to Axcelis Technologies the
amount by which the Tax liability reflected on the original Pro Forma Axcelis
Technologies Group Consolidated Returns, original Pro Forma Axcelis Technologies
Group Combined Returns and/or original Pro Forma Axcelis Technologies Group
Non-Federal Separate Returns exceeds the Tax liability reflected on the revised
Pro Forma Axcelis Technologies Group Consolidated Returns, revised Pro Forma
Axcelis Technologies Group Combined Returns and or revised Pro Forma Axcelis
Technologies Group Non-Federal Separate Returns.
4.8 PAYMENT OF TAXES FOR POST-DECONSOLIDATION PERIODS. Except as
otherwise provided in this Agreement, Eaton shall pay or cause to be paid all
Taxes and shall be entitled to receive and retain all refunds of Taxes with
respect to Tax Returns relating to Post-Deconsolidation Periods for which Eaton
has filing responsibility, including under this Agreement. Except as otherwise
provided in this Agreement, Axcelis Technologies shall pay or cause to be paid
all Taxes and shall be entitled to receive and retain all refunds of Taxes with
respect to Tax Returns relating to Post-Deconsolidation Periods for which
Axcelis Technologies has filing responsibility, including under this Agreement.
SECTION 5. TAX ATTRIBUTES
5.1 ALLOCATION OF TAX ITEMS. (a) IN GENERAL. All Tax computations for
(i) any Pre-Deconsolidation Period ending on a Deconsolidation Date, (ii) the
immediately following taxable period of Axcelis Technologies or any Axcelis
Technologies Affiliate and (iii) any Straddle Period, shall be made pursuant to
the principles of Section 1.1502-76(b) of the
-14-
22
Treasury Regulations or of a corresponding provision under the laws of other
jurisdictions and, to the extent possible, in a manner consistent with the
principles set forth in Section 4.1(a) of this Agreement.
(b) REATTRIBUTION. In the event of a Deconsolidation, Eaton
may, at its option, elect to reattribute to itself certain Tax Items of the
Axcelis Technologies Group pursuant to Section 1.1502-20(g) of the Treasury
Regulations. If Eaton makes such election, Axcelis Technologies shall comply
with the requirements of Section 1.1502-20(g)(5) of the Treasury Regulations.
5.2 POST DECONSOLIDATION. To the extent permitted by applicable law,
following any Deconsolidation, the relevant Tax Assets with respect to the
Consolidated Group or Combined Group, as the case may be, shall be allocated to
the corporation or entity that created or generated the Tax Asset.
SECTION 6. ADDITIONAL OBLIGATIONS
6.1 PROVISION OF INFORMATION AND MUTUAL COOPERATION. (a) Eaton and
Axcelis Technologies shall, and shall cause their respective affiliates to, (1)
furnish to the other in a timely manner such information, documents and other
materials as the other may reasonably request for purposes of (i) preparing any
Tax Return (or pro forma Tax Return prepared in accordance with Section 4
hereof) or portion thereof for which the other has responsibility for preparing
under this Agreement, (ii) contesting or defending any Audit (including the
provision of such information, documents and other materials as may be requested
by any Tax Authority), and (iii) making any determination or computation
necessary or appropriate under this Agreement, (2) make its employees available
to the other to provide explanations of documents and materials and such other
information as the other may reasonably request in connection with any of the
matters described in subclauses (i), (ii) and (iii) of clause (1) above, (3)
reasonably cooperate in connection with any Audit. For purposes of this
Agreement, "timely" shall mean furnishing such information, documents and other
materials or making its employees available within thirty (30) days of the time
a request therefor is made by the other.
(b) In the event that either Eaton or Axcelis Technologies or
their respective affiliates shall fail for any reason to timely comply with any
written request pursuant to Section 6.1, Eaton or Axcelis Technologies, as the
case may be, may, in its sole discretion, have its employees or agents fulfill
such request and charge the non-complying party for its costs incurred in
fulfilling such request at the highest hourly rate then shown on the Appendix
attached hereto but not less than $5,000 for each such request. For purposes of
this Section 6.1(b), each written request made by any Tax Authority and properly
forwarded by one party to the other for action shall be deemed a separate
request.
(c) Eaton and Axcelis Technologies shall, and shall cause
their respective affiliates to, retain and provide on reasonable demand books,
records, documentation or other information relating to any Tax Return or Audit,
with respect to any taxable period in which Eaton owns, directly or indirectly,
50% or more (by vote or value) of the outstanding stock of
-15-
23
Axcelis Technologies, until the later of (i) the expiration of the applicable
statute of limitations (after giving effect to any extension, waiver, or
mitigation thereof) and (ii) in the event any claim is made under this Agreement
or by any Tax Authority for which such information is relevant, until a Final
Determination is reached with respect to such claim. Notwithstanding anything to
the contrary included in this Agreement, the parties will comply in all respects
with the requirements of any applicable record retention agreement with the
Service or other Tax Authority.
(d) Notwithstanding any other provision of this Agreement, no
member of the ▇▇▇▇▇ Group shall be required to provide Axcelis Technologies or
any Axcelis Technologies Affiliate access to or copies of (1) any Tax
information that relates exclusively to any member of the ▇▇▇▇▇ Group, (2) any
Tax information as to which any member of the ▇▇▇▇▇ Group is entitled to assert
the protection of any Privilege, or (3) any Tax information as to which any
member of the ▇▇▇▇▇ Group is subject to an obligation to maintain the
confidentiality of such information. Eaton shall use reasonable efforts to
separate any such information from any other information to which Axcelis
Technologies is entitled to access or to which Axcelis Technologies is entitled
to copy under this Agreement, to the extent consistent with preserving its
rights under this Section 6.1(d).
(e) Notwithstanding any other provision of this Agreement,
with respect to Tax information that relates to any taxable period in which
Axcelis Technologies is no longer included in the Consolidated Group of which
Eaton is the common parent and no Combined Return is filed, no member of the
Axcelis Technologies Group shall be required to provide Eaton or any Eaton
Affiliate access to or copies of (1) any Tax information as to which any member
of the Axcelis Technologies Group is entitled to assert the protection of any
Privilege or (2) any Tax information as to which any member of the Axcelis
Technologies Group is subject to an obligation to maintain the confidentiality
of such information. Axcelis Technologies shall use reasonable efforts to
separate any such information from any other information to which Eaton is
entitled to access or to which Eaton is entitled to copy under this Agreement,
to the extent consistent with preserving its rights under this Section 6.1(e).
(f) The parties agree to give the other party reasonable
written notice prior to destroying or discarding any records pertaining to the
Pre-Deconsolidation Period or Straddle Period records, and if the other party so
requests, the party shall allow the other party to take possession of such tax
records. Tax records shall include, inter alia, journal vouchers, cash vouchers,
general ledgers, material contracts, authorizations for expenditures, and copies
of returns.
6.2 INDEMNIFICATION. (a) GENERAL. Eaton shall be liable for (and
indemnify Axcelis Technologies and each Axcelis Technologies Affiliate against)
Taxes of the ▇▇▇▇▇ Group and its Affiliates (including the Axcelis Technologies
Group) not specifically allocated to Axcelis Technologies and the Axcelis
Technologies Affiliates under this Agreement (including without limitation Taxes
for any and all Pre-Deconsolidation Periods beginning before December 31, 1999),
and Axcelis Technologies shall be liable for and indemnify the ▇▇▇▇▇ Group
against
-16-
24
Taxes which are specifically allocated to Axcelis Technologies and the Axcelis
Technologies Affiliates under this Agreement.
(b) FAILURE TO PAY. Eaton and each Eaton Affiliate shall
jointly and severally indemnify and hold Axcelis Technologies and each Axcelis
Technologies Affiliate harmless from and against any Tax that is attributable
to, or results from the failure of Eaton or any Eaton Affiliate to make any
payment required to be made by them under this Agreement, including without
limitation any Tax for all Pre-Deconsolidation Periods (other than any Tax
described in the succeeding sentence). Axcelis Technologies and each Axcelis
Technologies Affiliate shall jointly and severally indemnify and hold Eaton and
each Eaton Affiliate harmless from and against any Tax that is attributable to,
or results from, the failure of Axcelis Technologies or any Axcelis Technologies
Affiliate to make any payment required to be made under this Agreement.
(c) INACCURATE OR INCOMPLETE INFORMATION. Eaton and each Eaton
Affiliate shall jointly and severally indemnify Axcelis Technologies and hold
Axcelis Technologies and each Axcelis Technologies Affiliate harmless from and
against any Tax or loss attributable to the negligence of Eaton or any Eaton
Affiliate in supplying Axcelis Technologies or any Axcelis Technologies
Affiliate with inaccurate or incomplete information, in connection with the
preparation of any Tax Return or any Audit. Axcelis Technologies and each
Axcelis Technologies Affiliate shall jointly and severally indemnify and hold
Eaton and each Eaton Affiliate harmless from and against any Tax or loss
attributable to the negligence of Axcelis Technologies or any Axcelis
Technologies Affiliate in supplying Eaton or any Eaton Affiliate with inaccurate
or incomplete information, in connection with the preparation of any Tax Return
or any Audit.
6.3 TAX CONSEQUENCES OF PAYMENTS. For all Tax purposes and
notwithstanding any other provision of this Agreement, to the extent permitted
by applicable law, the parties hereto shall treat any payment made pursuant to
this Agreement (other than any payment made in satisfaction of an intercompany
obligation) as a capital contribution or dividend distribution, as the case may
be, immediately prior to the Separation Date and, accordingly, as not includible
in the taxable income of the recipient. If, as a result of a Final
Determination, it is determined that the receipt or accrual of any payment made
under this Agreement is taxable to the recipient, the payor shall pay to the
recipient an amount equal to any increase in the Income Taxes of the recipient
as a result of receiving the payment from the payor (grossed up to take into
account such payment, if applicable).
6.4 INTEREST. Payments pursuant to this Agreement that are not made
within the period prescribed in this Agreement or, if no period is prescribed,
within thirty (30) business days after demand for payment is made (the "Payment
Period") shall bear interest for the period from and including the date
immediately following the last date of the Payment Period through and including
the date of payment (the "Interest Accrual Period") at a per annum rate equal to
the prime rate (as quoted in the Wall Street Journal) in effect on the last day
of such Payment Period, plus 500 basis points. Such interest will be payable at
the same time as the payment to which it
-17-
25
relates and shall be calculated on the basis of a year of 365 days and the
actual number of days for which due.
6.5 OUTSIDE FEES. For any Pre-Deconsolidation Period beginning after
December 31, 1999 Axcelis Technologies and all Axcelis Technologies Affiliates
will be allocated their proportional share of all outside fees as determined by
Eaton. For purposes of this Section 6.5, outside fees will be allocated to the
period to which they relate (as Eaton shall in its sole discretion determine)
and not the period in which they may be incurred. Outside fees include (but are
not limited to) accounting, legal and other fees for preparation and filing of
Tax Returns, Tax research, planning, strategy, and assistance with Tax Audits.
The allocated amount will be billed to the Axcelis Technologies Group and is due
upon receipt.
6.6 CARRYBACKS. Axcelis Technologies shall make an election under
Section 172(b)(3) of the Code to relinquish the entire carryback period with
respect to any net operating loss attributable to Axcelis Technologies or any
Axcelis Technologies Affiliate in any taxable period beginning on or after a
Deconsolidation Date that could be carried back to a taxable year of Axcelis
Technologies or any Axcelis Technologies Affiliate ending on or before the
Deconsolidation Date. Neither Eaton nor any member of the ▇▇▇▇▇ Group shall be
required to pay to Axcelis Technologies or any Axcelis Technologies Affiliate
any refund or credit of Taxes that results from the carryback to any taxable
period ending on or before the Deconsolidation Date of any net operating loss,
capital loss, or tax credit attributable to Axcelis Technologies or any Axcelis
Technologies Affiliate in any taxable period beginning on or after the
Deconsolidation Date.
SECTION 7. AUDITS
7.1 IN GENERAL. (a) Eaton shall have the exclusive right, in its sole
discretion, to control, contest, and represent the interests of Eaton, any Eaton
Affiliate, Axcelis Technologies or any Axcelis Technologies Affiliate in any
Audit relating to any Tax Return described in Sections 2.1(a) and (b) of this
Agreement and to resolve, settle or agree to any deficiency, claim or adjustment
proposed, asserted or assessed in connection with or as a result of any such
Audit. ▇▇▇▇▇'▇ rights shall extend to any matter pertaining to the management
and control of an Audit, including, without limitation, execution of waivers,
choice of forum, scheduling of conferences and the resolution of any Tax Item.
(b) Eaton shall keep Axcelis Technologies informed of all
material developments and events pertaining to any Audit that relates directly
to any Tax Item included in any Consolidated Return or Combined Return for which
Axcelis Technologies is responsible for the resulting tax liability. Axcelis
Technologies shall have the right to review at its own expense any materials
that it may reasonably request that pertain to any Audit that relates directly
to any Tax Item included in any Consolidated Return or Combined Return for which
Axcelis Technologies is responsible for the resulting tax liability.
(c) Axcelis Technologies shall have the exclusive right, in
its sole discretion, to control, contest, and represent the interests of Axcelis
Technologies or any Axcelis Technologies Affiliate in any Audit relating to any
Tax Return described in Section 2.1(c) of this
-18-
26
Agreement and to resolve, settle, or agree to any deficiency, claim or
adjustment proposed, asserted or assessed in connection with or as a result of
any such Audit.
7.2 NOTICE. If Eaton or any member of the ▇▇▇▇▇ Group receives written
notice of, or relating to, an Audit from a Tax Authority that asserts, proposes
or recommends a deficiency, claim or adjustment that, if sustained, would result
in the redetermination of a Tax Item of a member of the Axcelis Technologies
Group, Eaton shall promptly provide a copy of such notice to Axcelis
Technologies (but in no event later than thirty (30) business days following the
receipt of such notice). If Axcelis Technologies or any member of the Axcelis
Technologies Group receives written notice of, or relating to, an Audit from a
Tax Authority with respect to a Tax Return described in Section 2.1(a) or (b) of
this Agreement, Axcelis Technologies shall promptly provide a copy of such
notice to Eaton (but in no event later than thirty (30) business days following
the receipt of such notice).
7.3 FAILURE TO NOTIFY. The failure of Eaton or Axcelis Technologies to
notify the other of any matter relating to a particular Tax for a taxable period
or to take any action specified in this Agreement shall not relieve such other
party of any liability and/or obligation which it may have under this Agreement
with respect to such Tax for such taxable period except to the extent that such
other party's rights hereunder are materially prejudiced by such failure.
7.4 REMEDIES. Axcelis Technologies agrees that no claim against Eaton
and no defense to Axcelis Technologies' liabilities to Eaton under this
Agreement shall arise from the resolution by Eaton of any deficiency, claim or
adjustment relating to the redetermination of any Tax Item of Eaton or a Eaton
Affiliate.
SECTION 8. IPO
8.1 IPO RELATED ITEMS. (a) LIABILITY FOR SEPARATION TAXES AND
DECONSOLIDATION TAXES. Only except as provided in Section 8.1(b) hereof, Eaton
shall be responsible for the payment of, and shall indemnify and hold Axcelis
Technologies harmless from and against, any Separation Taxes and Deconsolidation
Taxes.
(b) LIABILITY FOR UNDERTAKING CERTAIN ACTIONS. Notwithstanding
Section 8.1(a) of this Agreement, Axcelis Technologies and each member of the
Axcelis Technologies Group shall be jointly and severally responsible for, and
shall indemnify and hold Eaton harmless from and against, any Separation Taxes
that are attributable to, or result from, (i) any action taken by Axcelis
Technologies or any member of the Axcelis Technologies Group that was not
contemplated by the parties in connection with the Separation (including,
without limitation, by taking any action not contemplated in connection with
obtaining a ruling from any Tax Authority) or (ii) the failure by Axcelis
Technologies or any member of the Axcelis Technologies Group to take any action
that Axcelis Technologies is responsible for taking under this Agreement, the
Master Separation and Distribution Agreement or any other agreement related to
the Separation or the IPO (including, without limitation, by failing to make an
election or enter into a transaction specifically required in connection with
obtaining a ruling from any Tax Authority). Each of the parties hereto agrees to
act in good faith and without negligence in connection with the Tax reporting of
and all other aspects related to the Tax
-19-
27
consequences of the Separation and any Deconsolidation and shall be responsible
for any Taxes or losses arising from any failure to act in good faith or any
negligent act or omission with respect thereto.
8.2 TAX REPORTING OF IPO RELATED ITEMS. (a) SEPARATION TAXES. Any Tax
Return (or portion thereof) that includes any Tax Item resulting from the
Separation shall be prepared and filed by Eaton.
(b) DECONSOLIDATION TAXES. Any Tax Return (or portion thereof)
that includes any Tax Item relating to any Deconsolidation (to the extent
resulting in Deconsolidation Taxes) shall be prepared and filed by Eaton.
8.3 AUDITS RELATING TO SEPARATION. Notwithstanding any other provision
of this Agreement, Eaton shall have the exclusive right, in its sole discretion,
to control, contest, and represent the interests of Eaton, any Eaton Affiliate,
Axcelis Technologies or any member of the Axcelis Technologies Group in any
Audit with respect to Tax Items related to the Separation or Deconsolidation (to
the extent resulting in Deconsolidation Taxes), and to resolve, settle or agree
to any deficiency, claim or adjustment proposed, asserted or assessed in
connection with or as a result of any such Audit. ▇▇▇▇▇'▇ rights shall extend to
any matter pertaining to the management and control of an Audit, including
execution of waivers, choice of forum, scheduling of conferences and the
resolution of any Tax Item.
8.4 PROVISION OF INFORMATION AND MUTUAL COOPERATION. In addition to the
parties' respective obligations under Section 6.1 and subject to the provisions
of Section 6.1(b) of this Agreement, Eaton and Axcelis Technologies shall, and
shall cause their respective Affiliates to, cooperate with respect to all
aspects of the Separation including, without limitation, by (1) furnishing to
the other in a timely manner such information, documents and other materials as
the other may reasonably request for purposes of (i) preparing any Tax Return
that includes Tax Items relating to or arising from the Separation and (ii)
contesting or defending any Audit with respect to Tax Items relating to or
arising from the Separation and (2) make its employees available to the other to
provide explanations of documents and materials and such other information as
the other may reasonably request in connection with any of the matters described
in subclauses (i) and (ii) of clause (1) above.
8.5 PRESS RELEASES. Notwithstanding any other provision of this
Agreement to the contrary, Eaton shall have the exclusive right, in its sole
discretion, to review and approve all press releases and other public
communications with respect to the subjects to which this Agreement relates
prior to their release. Axcelis Technologies shall provide all such press
releases or other public communication to Eaton no later than one (1) day prior
to their proposed release date at the place and manner specified in Section 10.2
of this Agreement.
SECTION 9. DISTRIBUTION
9.1 DISTRIBUTION RELATED ITEMS. (a) RESTRICTIONS ON CERTAIN
POST-DISTRIBUTION ACTIONS. Axcelis Technologies agrees that it will not take or
fail to take, or permit any member of the Axcelis Technologies Group to take or
fail to take, any action where
-20-
28
such action or failure to act would be inconsistent with any material,
information, covenant or representation in the Ruling Documents or the Ruling.
(b) CERTAIN AXCELIS TECHNOLOGIES ACTIONS FOLLOWING
DISTRIBUTION. (1) COVENANTS. Without limiting the generality of Section 9.1(a),
Axcelis Technologies and each member of the Axcelis Technologies Group jointly
and severally covenant and agree with Eaton that during the Restricted Period:
(i) Axcelis Technologies and the members of the
Axcelis Technologies Group will continue to engage in their business, and will
continue to maintain a substantial portion of their respective assets and
business operations, as they existed immediately prior to the Distribution;
provided that the foregoing shall not be deemed to prohibit Axcelis Technologies
and the members of the Axcelis Technologies Group from entering into or
acquiring other businesses or operations or from disposing of or shutting down
segments of such businesses so long as Axcelis Technologies and the members of
the Axcelis Technologies Group continue to engage in such businesses and
continue to so maintain such substantial portion of their assets and business
operations;
(ii) Axcelis Technologies will continue to manage and
to own (A) directly, assets which represent at least 50% of the Gross Asset
Value which Axcelis Technologies managed and owned directly immediately after
the Distribution, and (B) directly or indirectly, through one or more entities,
assets which represent at least 50% of the Gross Asset Value which Axcelis
Technologies owned indirectly through one or more entities immediately after the
Distribution;
(iii) Except as provided in Section 9.1(b)(3),
neither Axcelis Technologies nor any member of the Axcelis Technologies Group
nor any of its or their respective directors, officers or other representatives
(acting in their capacity as directors, officers, or representatives) will
undertake, authorize, approve, recommend, permit, facilitate, or enter into any
contract, or consummate any transaction with respect to:
(a) the issuance of Axcelis Technologies
common stock (including options, warrants, rights or securities
exercisable for, or convertible into, Axcelis Technologies common
stock) in a single transaction or in a series of related or unrelated
transactions (including the IPO) which represents (treating any such
options, warrants, rights, or securities as exercised or converted) 40%
or more of the outstanding shares of Axcelis Technologies common stock;
(b) the issuance of any class or series of
capital stock or any other instrument (other than Axcelis Technologies
common stock and options, warrants, rights or securities exercisable
for, or convertible into, Axcelis Technologies common stock) that would
constitute equity for federal tax purposes (such classes or series of
capital stock and other instruments being referred to herein as
"Disqualified Axcelis Technologies Stock");
-21-
29
(c) the issuance of any options, rights,
warrants, securities or similar arrangements exercisable for, or
convertible into, Disqualified Axcelis Technologies Stock;
(d) any redemptions, repurchases or other
acquisitions of capital stock or other equity interests in Axcelis
Technologies;
(e) the dissolution, merger, or complete or
partial liquidation of Axcelis Technologies or any announcement of such
action; and/or
(f) any other action that may result in the
Distribution being characterized as a distribution to which section
355(e) applies.
(2) In addition to the other representations,
warranties, covenants and agreements set forth in this Agreement, Axcelis
Technologies and each member of the Axcelis Technologies Group will take, or
refrain from taking, as the case may be, such actions as Eaton may request to
ensure that the Distribution qualifies for the tax-free treatment stated in the
Ruling, including, without limitation, such actions as Eaton determines may be
necessary or advisable to preserve the validity of the Ruling. Without limiting
the generality of the foregoing and subject to the provisions of Section 6.1(b),
Axcelis Technologies and the Axcelis Technologies Group shall cooperate with
Eaton if Eaton, in its sole discretion, determines to obtain additional or
supplemental rulings pertaining to whether any actual or proposed change in
facts and circumstances affects the tax-free status of the Distribution. The
▇▇▇▇▇ Group shall bear responsibility for all expenses associated with any such
additional or supplemental rulings, except that expenses associated with any
additional or supplemental rulings based on a proposed action or omission by
Axcelis Technologies or a member of the Axcelis Technologies Group will be borne
solely by Axcelis Technologies.
(3) Following the Deconsolidation Date and during the
Restricted Period, neither Axcelis Technologies nor any member of the Axcelis
Technologies Group shall take any action or engage in conduct otherwise
prohibited by Section 9.1(b) unless prior to such action or conduct, as the case
may be, Axcelis Technologies receives express written consent from Eaton which
consent will be granted, if at all, in the sole discretion of Eaton.
(c) LIABILITY OF AXCELIS TECHNOLOGIES FOR CERTAIN
TRANSACTIONS. (1) AXCELIS TECHNOLOGIES INDEMNITY. If Axcelis Technologies, or
another member (or former member) of the Axcelis Technologies Group
(collectively, the "Indemnifying Parties") takes or fails to take any action
whether or not prohibited or required by Section 9.1 or violates a
representation or covenant in Section 9.1 or in the Ruling Documents, and the
Distribution fails to or otherwise does not qualify for the tax treatment stated
in the Ruling as a result of such action, failure to take action, or violation,
then the Indemnifying Parties shall jointly and severally defend, indemnify and
hold harmless (the "Indemnified Party") against any liability for such Taxes
which the Indemnified Party may assume or otherwise incur and any and all Taxes
or other liabilities directly or indirectly imposed upon or incurred by the
Indemnified Party as a result of such failure or lack of qualification,
including, without
-22-
30
limitation, any liability of the Indemnified Party arising from Taxes imposed on
shareholders of Eaton whether or not any shareholder or shareholders of Eaton or
Axcelis Technologies, or the Service or other taxing authority, successfully
seeks recourse against the Indemnified Party on account of any such failure.
(2) TENDER OFFER OR PURCHASE OFFER. Notwithstanding
anything to the contrary set forth in this Agreement, if, during the Restricted
Period, any Person or group of Affiliated Persons or Associates acquires
Beneficial Ownership of Axcelis Technologies common stock (or any other class of
outstanding Axcelis Technologies stock) or commences a tender or other purchase
offer for the capital stock of Axcelis Technologies or initiates any other form
of transaction to acquire directly or indirectly Axcelis Technologies capital
stock, upon consummation of which such Person or Group of Affiliated Persons or
Associates would acquire Beneficial Ownership of Axcelis Technologies common
stock (or any other class of outstanding Axcelis Technologies stock or equity)
and as a result thereof the Distribution fails to or otherwise does not qualify
for the tax treatment stated in the Ruling then the Indemnifying Parties shall
defend, indemnify and hold harmless the Indemnified Party against any liability
for Taxes which the Indemnified Party may assume or otherwise incur and any and
all Taxes or other liabilities directly or indirectly imposed upon or incurred
by any Indemnified Party and/or its shareholders as a result of such failure.
(3) EFFECT OF EXPRESS WRITTEN CONSENT OF EATON. The
Indemnified Party shall be defended, indemnified and held harmless under Section
9.1(c)(1) without regard to the fact that the Indemnifying Party may have
received the express written consent of Eaton as contemplated by Section 9.1.
The Indemnified Party shall be defended, indemnified and held harmless under
Section 9.1(c)(2) whether or not the acquisition of Beneficial Ownership results
from a transaction that is not prohibited under Section 9.1.
(4) AMOUNT OF INDEMNITY. The amount indemnified
against under Sections 9.1(c)(1)-(3) ("Indemnified Liability") for a Tax based
on or determined with reference to income shall be deemed to be the sum of (x)
for each applicable taxing jurisdiction, an amount determined by multiplying (i)
the taxing jurisdiction's highest marginal corporate income tax rate for the
taxable period in which the Distribution occurs, times (ii) the gain or income
of the Indemnified Party which is subject to such Tax, plus (y) an amount
determined by multiplying (i) an assumed marginal income tax rate of 45%, times
(ii) the total amount of gain or income asserted as allocable to or imposed on
the shareholders of Eaton and/or Axcelis Technologies by the Service or any
other Tax Authority. In the case of other Indemnified Liabilities, the amount of
the Indemnified Liability shall be equal to the amount so owed. In addition, the
amount of any Indemnified Liability shall be increased by any interest, costs,
legal and professional fees, additions, expenses and penalties incurred by the
Indemnified Party. All amounts payable under this Section 9.1(c)(4) shall, to
the extent that such amounts constitute taxable income, be grossed-up, based on
the tax rate referred to in clause (x)(i) of the first sentence of this Section
9.1(c)(4).
(d) LIABILITY FOR BREACH OF REPRESENTATION. Axcelis
Technologies shall, and shall cause each member of the Axcelis Technologies
Group to, comply
-23-
31
with each representation and statement concerning Axcelis Technologies and the
Axcelis Technologies Group made in the Ruling Documents and in the materials
submitted to the Service in connection with the Ruling Documents, including,
without limitation, statements relating to actions regarding the IPO and the use
of IPO proceeds by the Axcelis Technologies Group. Axcelis Technologies has
reviewed the materials submitted to the Service in connection with the Ruling
Documents and represents to Eaton that these materials, including without
limitation, any statements and representations concerning Axcelis Technologies,
its business operations, capital structure and/or organization, are complete and
accurate. During the Restricted Period, neither Axcelis Technologies nor any
member of the Axcelis Technologies Group shall take any action, refrain from
taking any action or enter into any transaction or series of transactions or
agree to take any action, refrain from taking any action or enter into any
transaction or series of transactions that could jeopardize the tax-free status
of the Distribution, including any action, inaction or transaction that would be
inconsistent with any representation or statement made to the Service in
connection with the Ruling Documents, unless prior thereto Axcelis Technologies
obtains the express written consent of Eaton which consent will be granted, if
at all, in the sole discretion of Eaton. Axcelis Technologies hereby represents
and warrants to Eaton that Axcelis Technologies has no intention to undertake or
allow to be undertaken any of the transactions set forth in Section
9.1(d)(1)(iii), nor does Axcelis Technologies or any member of the Axcelis
Technologies Group have any intention to cease to engage in the active conduct
of its trade or business (within the meaning of Section 355(b)(2) of the Code).
9.2 INFORMATION FOR SHAREHOLDERS. Eaton shall provide each shareholder
that receives stock of Axcelis Technologies pursuant to the Distribution with
the information necessary for such shareholder to comply with the requirements
of Section 355 of the Code and the Treasury regulations thereunder with respect
to statements that such shareholders must file with their United States federal
income Tax Returns demonstrating the applicability of Section 355 of the Code to
the Distribution.
9.3 ALLOCATION OF TAX ASSETS. In connection with the Distribution, Tax
Assets shall be allocated among Eaton, each Eaton Affiliate, Axcelis
Technologies and each Axcelis Technologies Affiliate in accordance with
applicable law. The parties hereby agree that in the absence of controlling
legal authority, Tax Assets shall be allocated to the entity that created or
generated the Tax Asset.
SECTION 10. MISCELLANEOUS
10.1 EFFECTIVENESS. This Agreement shall become effective on the
Separation Date.
10.2 NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and, unless otherwise provided herein,
shall be deemed to have been duly given (i) on the date of service if served
personally on the party to whom notice is given, (ii) on the day of transmission
if sent via facsimile transmission to the facsimile number given below;
provided, telephonic confirmation of receipt is obtained promptly after
completion of transmission, (iii) on the business day after delivery to an
overnight courier service or the
-24-
32
Express mail service maintained by the United States Postal Service; provided,
receipt of delivery has been confirmed, or (iv) on the fifth day after mailing;
provided, receipt of delivery is confirmed, if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, properly addressed and return-receipt requested, to the party as
follows:
If to Eaton or any Eaton Affiliate, to:
▇▇▇▇▇ Corporation
Eaton Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Vice-President-Taxes
If to Axcelis Technologies or any Axcelis Technologies Affiliate to:
Axcelis Technologies, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
Any party may change its address or fax number by giving the other party written
notice of its new address or fax number in the manner set forth above.
10.3 CHANGES IN LAW. Any reference to a provision of the Code or a law
of another jurisdiction shall include a reference to any applicable successor
provision or law.
10.4 SUCCESSORS AND ASSIGNS. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party without the prior written consent of the other party.
10.5 AUTHORIZATION, ETC. Each of the parties hereto hereby represents
and warrants that it has the power and authority to execute, deliver and perform
this Agreement, that this Agreement has been duly authorized by all necessary
corporate action on the part of such party, that this Agreement constitutes a
legal, valid and binding obligation of each such party and that the execution,
delivery and performance of this Agreement by such party does not contravene or
conflict with any provision of law or of its charter or bylaws or any agreement,
instrument or order binding on such party.
10.6 COMPLETE AGREEMENT. This Agreement shall constitute the entire
agreement between Eaton or any Eaton Affiliate and Axcelis Technologies or any
Axcelis Technologies Affiliate with respect to the subject matter hereof and
shall supersede all previous negotiations, commitments and writings with respect
to such subject matter. Unless the context
-25-
33
indicates otherwise, any reference to Axcelis Technologies in this Agreement
shall refer to Axcelis Technologies and the Axcelis Technologies Affiliates and
any reference to Eaton in this Agreement shall refer to Eaton and the Eaton
Affiliates.
10.7 INTERPRETATION. The Section headings contained in this Agreement
are solely for the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or interpretation of this
Agreement. Whenever any words are used herein in the masculine gender, they
shall be construed as though they were also used in the feminine gender in all
cases where they would so apply.
10.8 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Ohio (regardless of the
laws that might otherwise govern under applicable principles of conflicts law)
as to all matters, including, without limitation, matters of validity,
construction, effect, performance and remedies.
10.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.10 LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.11 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of Eaton, the Eaton Affiliates, Axcelis Technologies and the Axcelis
Technologies Affiliates, and is not intended to confer upon any other person any
rights or remedies hereunder.
10.12 JURISDICTION; FORUM. (a) By the execution and delivery of this
Agreement, Eaton and Axcelis Technologies submit and agree to cause the Eaton
Affiliates and Axcelis Technologies Affiliates, respectively, to submit to the
personal jurisdiction of any state or federal court in the State of Ohio in any
suit or proceeding arising out of or relating to this Agreement.
(b) To the extent that Eaton, Axcelis Technologies, any Eaton
Affiliate or any Axcelis Technologies Affiliate has or hereafter may acquire any
immunity from jurisdiction of any Ohio court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, Eaton
or Axcelis Technologies, as the case may be, hereby irrevocably waives, and
agrees to cause the Eaton Affiliates and the Axcelis Technologies Affiliates,
respectively, to waive such immunity in respect of its obligations with respect
to this Agreement.
(c) The parties hereto agree that an appropriate and
convenient, non-exclusive forum for any disputes between any of the parties
hereto or the Eaton Affiliates and the Axcelis Technologies Affiliates arising
out of this Agreement shall be in any state or federal court in the State of
Ohio.
-26-
34
10.13 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by written agreement of the parties.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by a duly authorized officer as of the date first above
written.
▇▇▇▇▇ CORPORATION
on behalf of itself and its affiliates
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President -- Chief
Financial and Planning Officer
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President -- Strategic
Planning
AXCELIS TECHNOLOGIES, INC.
on behalf of itself and its affiliates
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer and
Vice Chairman of the Board
By /s/ ▇▇▇▇ ▇. PUMA
-------------------------------------
Name: ▇▇▇▇ ▇. Puma
Title: President, Chief Operating
Officer and Secretary
-27-