##### 



Eaton Corporation
Second Quarter 2007 Report on Form 10-Q
Item 6
Exhibit 10
 STOCK and ASSET PURCHASE AGREEMENT
 Dated as of August 3, 2007
 among
 Eaton Power Solutions SAS (Buyer)
 and
 MGE FINANCES (Seller 1)
 MGE UPS SYSTEMS (Seller 2)




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STOCK and ASSET PURCHASE AGREEMENT
 STOCK and ASSET PURCHASE AGREEMENT Buyer Seller 1 Seller 2
 WHEREAS Target
 WHEREAS UPE Electronics Co Ltd Joint Venture
 WHEREAS Schedule A International
Sellers ;
 WHEREAS Business
 WHEREAS,
 WHEREAS
 WHEREAS




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WHEREAS Exhibit 1 Trademark License Agreement Exhibit 2 Patent
License Agreement  Exhibit 3 Software License Agreement
 WHEREAS Exhibit 4 Patent License Agreement 2
 NOW, THEREFORE
 ARTICLE I
 DEFINITIONS AND INTERPRETATIONS
 1.1. Definitions Section 1.1
  Additional Accounting Firm  means the Paris Branch of KMPG; provided , however , that if such firm is unwilling to accept the engagement contemplated by this
Agreement, Additional Accounting Firm shall mean such international independent accounting firm as
is appointed by the President of the Paris Commercial Court at the request of either the Buyer or
Sellers acting via a référé proceeding.
  Adjustment Amount  has the meaning specified in Section 3.2(b) .
  Adjustment Statement  has the meaning specified in Section 3.3(b) .
  Affiliate  means, with respect to any Person, any other Person which, at the time of
determination, directly or indirectly through one or more intermediaries Controls, is Controlled by
or is under Common Control with such Person.
  Agreed Accounting Principles  means the International Financial Reporting Standards
as in effect on the relevant date, as consistently applied using the accounting guidelines of the
Schneider group of companies in preparing consolidated accounts.
  Agreed Adjustments  has the meaning specified in Section 3.3(c) .
 2




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 Agreed Rate  means the official rate for the Euro Repo market as published in the
Financial Times, as that rate may vary from time to time or if that rate is no longer published, a
comparable rate.
  Agreement  means this Stock and Asset Purchase Agreement and the Schedules, as may be
amended or supplemented from time to time.
  Ancillary Agreements  means the Services Agreements, the International Purchase
Agreements, the Trademark License Agreement, the Patent License Agreement, the Software License
Agreement, the Patent License Agreement 2, and all other agreements, instruments and documents
being or to be executed and delivered by Seller 1, Seller 2 or any International Seller under this
Agreement or in connection herewith.
  Balance Sheet  has the meaning specified in Section 5.4(a).
  Balance Sheet Date  means December 31, 2006.
  Baseline Working Capital means 35,700,000.
  Business  has the meaning specified in the Recitals.
  Business Assets  means the Business Contracts, the Business Trade Receivables, and
any other asset owned by any of the International Sellers and primarily used in connection with the
Business as of the Closing Date, including, without limitation, all assets set forth in Schedule2.2(a)
 Business Contracts means, subject to the provisions of Sections 8.6 and 8.7 ,
the contracts to be transferred by the International Sellers, which shall be (i) all International
Sellers existing customer and supplier contracts, to the extent they relate to the Business, (ii)
any other International Sellers contracts, to the extent they relate exclusively to the Business,
(iii) any International Sellers contracts as are identified in Schedule 5.13 , and (iv) any
such contract similar to the contracts referred to in (i) and (ii) above which may be entered into
between the date hereof and the Closing Date and which relate to the Business.
  Business Day  means any day other than a Saturday, Sunday or a day on which banks in
Paris, France are authorized or obligated by law to close.
  Business Employees  means the employees of the International Sellers (i) that the
parties have determined should transfer to the International Buyers effective as the Closing Date
or (ii) to whom the International Buyers shall offer employment effective as of the Closing Date, a
full and complete list of which set forth in Schedule B.
  Business Liabilities  means all obligations of the International Sellers under (i)
the Business Contracts, to the extent they relate to the Business, (ii) the Business Trade
Payables, and where applicable, (iii) customer deposits and payables to fixed assets suppliers in
each case of the type included in the Financial Statements and to the extent included in the Final
Working Capital, (iv) liabilities under employment agreements relating to Business Employees,
 3




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including accrued wages and salaries and social security charges or similar payroll taxes
thereon.
  Business Trade Payables  means all amounts unpaid or owing to any trade creditors by
any of the International Sellers at the Closing Date in respect of goods or services related to the
Business purchased by any of the International Sellers pursuant to any of the Business Contracts
and which are accrued in the Final Working Capital.
  Business Trade Receivables  means all amounts unpaid or owing to any International
Sellers by any trade debtors at the Closing Date in respect of goods or services related to the
Business, supplied by any of the International Sellers pursuant to any of the Business Contracts,
and which are accrued in the Final Working Capital.
 Buyer
 Cap Section 11.1(b) .
 Cash means as of the close of business on the Closing Date the aggregate amount of
cash on hand and demand deposits plus short term liquid investments in marketable listed securities
and capital market instruments that are readily convertible to known amounts of cash and valued at
market held by the Target and, the Joint Venture or included in the Business Assets, it being
provided that the Joint Venture Cash will be included up to 300,000 and if Joint Venture Cash is
in excess of 300,000, only 50% of such excess shall be included.
 Certificate means a certificate signed by the applicable entitys President, Chief
Financial Officer or any Vice President.
  Claim Notice  has the meaning specified in Section 11.3(a) .
  Closing  means the completion of (i) the transfer of all of the Target Shares from
Seller 1 to Buyer and (ii) the transfer of the Business Assets and the Business Liabilities, from
the relevant International Sellers to Buyer or the International Buyers, as applicable, subject to
and in accordance with the terms of this Agreement and the International Purchase Agreements.
  Closing Date  has the meaning specified in Section 4.1 .
 Commission means the Commission of the European Communities having its seat in
Brussels.
  Confidentiality Agreement  means the Confidentiality Agreement dated April 3, 2007
between Schneider Electric and Eaton Corporation.
  Contaminant  means any waste, pollutant, hazardous or toxic substance or petroleum,
hydrocarbon products, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls
substance or waste or any constituent of any such substance or waste or more generally any other
chemical substance prohibited or regulated by any Environmental Laws or Governmental Body.
 4




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 Control  has the meaning set forth in Article L.233-3 paragraphs I and II of the
French Commercial Code. The terms Controlled by, under Common Control with and Controlling
shall have correlative meanings.
  Court Order  means any judgment, order, award or decree of any state or local, or
any supra-national, court, tribunal or other Governmental Body and any award in any arbitration
proceeding.
 Debt means as of the close of business on the Closing Date, the aggregate amount of
(i) all indebtedness for borrowed money, whether current, short-term, or long-term, secured or
unsecured (excluding the Business Trade Payables and trade payables of Target and the Joint
Venture), it being provided that the Joint Venture indebtedness will be included up to 300,000 and
if Joint Venture indebtedness is in excess of 300,000, only 50% of such excess shall be included,
(ii) any payment of obligations in respect of letters of credit, (iii) any liability with respect
to interest rate swaps, collars, caps and similar hedging obligations, (iv) any lease obligations
under leases that are required to be accounted for as capital leases, (v) all commitments relating
to the acquisition or issuance of securities (such as a put option), (vi) liabilities related to
employees severance or redundancy, (vii) all amounts payable under any defined benefit obligation
and liabilities and such retirement or pension commitments less any existing outside funding of
such liabilities, (viii) all bonuses triggered by the contemplated transaction, together with any
related social security charges, (ix) accrued and unpaid interest on, and prepayment premiums,
break-up fees, penalties, or similar charges or expenses reimbursement arising as a result of the
discharge of any of the foregoing, (x) any amount owed by Target and the Joint Venture to any
entity of the Schneider group (other than Target and the Joint Venture), (xi) any dividend declared
by Target or the Joint Venture but not paid, to the extent, as regards the Joint Venture, that the
recipient of any such dividends is not Target, and (xi) other non operating provisions, it being
understood that (i) all of the aforementioned items include the associated deferred tax liabilities
and are net of associated deferred tax assets and items and (ii) all amounts owed under the
Services Agreements shall be excluded from the calculation of Debt to the extent such amounts have
been repaid on or prior to Closing.
  De Minimis Threshold  has the meaning set forth in Section 11.1(b) .
  Effective Time  has the meaning set forth in Section 4.1 .
  Encumbrance  means any lien (statutory or other), claim, charge, security interest,
mortgage, deed of trust, pledge, hypothecation, assignment, conditional sale or other title
retention agreement, preference, priority or other security agreement or preferential arrangement
or a right of a third party of any kind, and any easement, encroachment, covenant, restriction,
right of way, defect in title or other encumbrance of any kind.
  Environmental Encumbrance  means an Encumbrance in favor of any Governmental Body for
(i) any liability under any Environmental Law, or (ii) damages arising from, or costs incurred by
such Governmental Body in response to, a Release or threatened Release of a Contaminant into the
environment.
 5




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 Environmental Law  means all Requirements of Laws derived from or relating to all
state and local laws or regulations relating to or addressing the environment, health or safety.
  Estimated Allocation Schedule  has the meaning specified in Section 3.1 .
  Estimated Purchase Price  has the meaning specified in Section 3.1 .
  Expenses  means any reasonable expenses incurred in connection with, defending any
claim, action, suit or proceeding incident to any matter indemnified against hereunder (including
reasonable fees of legal counsel).
  Final Adjustment Allocation Schedule  has the meaning specified in Section
3.3(c) .
 Final Cash/Debt Balance  means the Cash less the Debt, it being provided for the
avoidance of doubt that no item taken into consideration for purposes of establishing the Final
Cash/Debt Balance shall be taken into account for the purposes of establishing the Final Working
Capital.
  Final Purchase Price  has the meaning specified in Section 3.2(b) .
  Final Working Capital  means as of the close of business on the Closing Date (i) the
aggregate amount of the net trade receivables (sum of gross trade receivables less impairment of
doubtful debts plus notes receivables plus advances to suppliers) of Target and the Joint Venture
and the Business Trade Receivables) plus (ii) the aggregate amount of the net inventories (sum of
gross materials, work in progress and finished goods inventories, less related depreciation) held
by Target and the Joint Venture and included within the Business Assets minus (iii) the trade
payables (sum of trade and notes payables and customer deposits), the payables to fixed assets
suppliers and the accrued payables of Target, and the Joint Venture and the Business Trade
Payables, it being agreed that the Final Working Capital shall be calculated in accordance with
IFRS and that the net book value of the inventory shall be computed based upon the quantities of
inventory on hand as of the close of business on the Closing Date as determined through a physical
inventory conducted by Buyer as of, or within five days of, such time, appropriately adjusted for
activity between the Closing Date and the date of the physical inventory.
  Financial Statements  has the meaning specified in Section 5.4(a) .
  Governmental Body  means any federal, state or local, or any supra-national,
government, political subdivision, governmental, regulatory or administrative authority,
instrumentality, agency body or commission, self-regulatory organization, court, tribunal or
judicial or arbitration body having competent jurisdiction over the relevant subject matter, or
over Buyer, International Buyer, Sellers and International Sellers, Target, the Joint Venture or
any of them, or the Business Assets or the Business, as applicable.
  Governmental Permits  has the meaning specified in Section 5.8(a) .
 6




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 IFRS  means the International Financial Reporting Standards.


 Indemnified Party  has the meaning specified in Section 11.3(a) .


 Indemnitor  has the meaning specified in Section 11.3(a) .


 Insurance Policies  has the meaning given to such term in Section 5.17 .


 Intellectual Property Rights  means all inventions (whether patentable or not and
whether or not reduced to practice), Patents, Trademarks, trade names and corporate names (other
than any trade names or corporate names incorporating the name MGE), copyrights, design rights,
moral rights, trade secrets and confidential business information (including know-how, formulas,
compositions, manufacturing and production processes and techniques, technical data, designs,
drawings, and specifications), computer software and related codes, databases, and other
intellectual property rights whether registered or unregistered, including the benefit of all
applications and rights and all goodwill relating to the foregoing, relating to the Business,
except as it may be provided for under this Agreement.


 International Buyers  means each of the fully-owned Affiliates of Buyer listed on Schedule C , which will enter, as soon as reasonably practicable after the date of this
Agreement, into the International Purchase Agreement.


 International Purchase Agreement  means the local asset purchase agreements,
substantially in the form attached hereto as Exhibit 5 , to be entered into as soon as
reasonably practicable after the date of this Agreement between the relevant International Sellers
and International Buyers or Buyer, as the case may be (with effect as from Closing), to effect the
transfer of the Business Assets and Business Liabilities in accordance with the terms of this
Agreement.


 International Seller  and  International Sellers  have the meanings specified
in the Recitals.


 Joint Venture  has the meaning specified in the Recitals.


 Knowledge  means with respect to Sellers the actual knowledge of the persons listed
in Schedule D .


 License Agreement  has the meaning specified in Section 8.12.


 Losses  means any and all losses, costs, settlement payments, awards, fines,
penalties, damages.


 Material Adverse Effect  means any material adverse effect that a situation,
development or other event or fact may have on the financial condition or results of operations of
the Business (taken as a whole) other than an effect resulting from one or more of the following
matters: (i) the effect of any change that generally affects the industry in which the Business
operates; (ii) the effect of any change arising in connection with earthquakes, acts of war,
sabotage and terrorism, military actions or the escalation thereof; (iii) the effect of any 7




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action taken by the Buyer or any of its Affiliates with respect to the transactions
contemplated hereby or with respect to Target, the Joint Venture or the International Sellers,
including their employees.


Material Agreements shall have the meaning set forth in Section 5.13 .


MGE Trademarks and Logos shall have the meaning set forth in Section 8.2 .


Monitoring Trustee means Advolis, a French company having its registered office at
13, Avenue de lOpéra, 75001 Paris.


 Navision Costs  shall have the meaning set forth in Section 8.11 .


 Parties  means Buyer, Seller1 and Seller 2.


 Patents  means French and non-French patents and applications thereof primarily
related to the Business, including those listed in Schedule 5.9(a) .


Patent License Agreement 2 shall have the meaning set forth in the Recitals.


Patent License Agreement shall have the meaning set forth in the Recitals.


 Permitted Encumbrances  means (i) liens for Taxes and other governmental charges and
assessments which are not yet due and payable and (ii) liens incurred in the ordinary course of
business for sums not yet due and payable excluding, for the avoidance of doubt, general liens on
the Business (Nantissement de Fonds de Commerce) and any liens on trademarks.


 Person  means any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated organization or
Governmental Body.


 Preliminary Accounting Report  has the meaning specified in Section
3.3(a)(iii) .


 Preliminary Adjustment Statement  has the meaning specified in Section
3.3(a)(i) .


 Products  means the 0 to 10 kva uninterruptible power systems and surge suppressor
products manufactured, marketed or sold by Target, the Joint Venture, or by the International
Sellers prior to the Closing Date, it being understood, for the avoidance of doubt, that the
products shall also include any configuration of such products that extend above 10 Kva but remain
below 20 Kva, and that the Comet range of products extend from 0 to 11 Kva.


 Release  means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration of a Contaminant into the indoor or outdoor
environment or into or out of any property currently or formerly owned or used by Target and the
Joint Venture, including the movement of Contaminants through or in the air, 8




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soil, surface water, groundwater of any property currently or formerly owned or used by Target
and the Joint Venture.
  Relevant Contracts  has the meaning set forth in Section 8.7 .
  Remedial Action  means any reasonable actions required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment, or (ii) prevent the
Release or threatened Release or minimize the further Release of Contaminants.
  Replacement Contracts  has the meaning set forth in Section 8.6 .
  Requirements of Laws  means any French and any non-French laws, statutes,
regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental
Body.
  Schedule(s)  means the schedule(s) attached hereto.
  Seller 1  has the meaning set forth in the Recitals.
  Seller 2  has the meaning set forth in the Recitals.
  Sellers  means Seller 1 and Seller 2.
  Services Agreement  means the transition support services agreements, forms of which
are attached hereto as Exhibit 6 , entered into, or to be entered into, among (i) Seller 2
and/or certain of the International Sellers on the one hand, and (ii) Target and/or certain of the
International Buyers, as the case may be, on the other hand.
  Services Employees  has the meaning set forth in Section 5.11(d) .
  Shared Contracts  means the contracts which relate both to the Business and any other
business conducted by Target or International Sellers.
 Shares means the Target Shares.
  Software  means communication, monitoring and diagnostic computer software programs
and software systems and associated source codes as listed in Schedule 5.9(a) .
  Software License Agreement  shall have the meaning set forth in the Recitals.
  Target  has the meaning set forth in the Recitals.
  Target Shares  means [1.365.000] shares, par value [15,25] each, of Target,
representing 100% of the issued and outstanding share capital and voting rights of Target.
 Tax Taxable
 9




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or add-on minimum, ad valorem, value-added, transfer, stamp, or any other tax, custom
duty, governmental fee, together with any interest or penalty, addition to tax or additional amount
imposed by any Governmental Body; and (ii) any liability for the payment of amounts with respect
to payments of a type described in clause (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group, as transferee or successor, or as a result of any
obligation under any Tax sharing agreement or Tax indemnity agreement.
  Tax Return  means any return, report or similar statement required to be filed with
respect to any Taxes (including any attached schedules), including any information return, claim
for refund, amended return or declaration of estimated Tax.
  Third Person Claim  has the meaning specified in Section 11.3(a) .
 Threshold has the meaning set forth in Section 11.1(b)
  TPL  has the meaning specified in Section 8.12.
  Trademarks  means French and non-French trademarks, service marks and trade names
whether registered or unregistered, and pending registrations and applications to register the
foregoing, in each case primarily related to the Business, including those listed in Schedule
5.9(a) .
  Trademark License Agreement  shall have the meaning set forth in the Recitals.
  Transferred Employees  means (i) the employees of Target and the Joint Venture that
the parties have determined should remain employed by each such entity effective as of the close of
business on the Closing Date, a full and complete list of which set forth in Schedule E ,
(ii) the Persons who have elected to be employed by Target, the Buyer or the International Buyers
pursuant to the letters or contracts attached hereto as Schedule F and (iii) the Business
Employees.
 1.2. Interpretation . For purposes of this Agreement, (i) the words include,
includes and including shall be deemed to be followed by the words without limitation, (ii)
the word or is not exclusive and (iii) the words herein, hereof, hereby, hereto and
hereunder refer to this Agreement as a whole. Unless the context otherwise requires, references
herein: (i) to Articles, Sections, Exhibits and Schedules mean the Articles and Sections of, and
the Exhibits and Schedules attached to, this Agreement; (ii) to an agreement, instrument or other
document means such agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and by this Agreement; and
(iii) to a statute means such statute as amended from time to time and includes any successor
legislation thereto and any regulations promulgated thereunder. The Schedules and Exhibits
referred to herein shall be construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein. Titles to Articles and headings of Sections are
inserted for convenience of reference only and shall not be deemed a part of or to affect the
meaning or interpretation of this Agreement
 10




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ARTICLE II
 PURCHASE AND SALE
 2.1. Purchase and Sale of Shares.
 2.2. Purchase and Sale of Business Assets and Assumption of Business Liabilities.
     ARTICLE III
 PURCHASE PRICE
 3.1. Estimated Purchase Price
 11




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Estimated
Purchase Price
 Schedule 3.1 Estimated Allocation
Schedule
 3.2. Final Purchase Price and Adjustment Amount.
  Adjustment Amount
  plus
  Schedule 3.2
 Section
3.2 Final Purchase Price Section 3.3 Section
3.4
 3.3. Determination of the Preliminary Adjustment Statement and Allocation Schedule.
  Preliminary Adjustment Statement
 Preliminary Adjustment Allocation Schedule
 Preliminary Accounting Report
 12




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Adjustment Amount Final Adjustment Allocation Schedule,
 Section 3.3(b)
 Agreed Adjustments Adjustment Amount Final Adjustment
Allocation Schedule
 Section 3.3(b) Section 3.3(c) Additional Accounting Firm Adjustment Amount Final Adjustment Allocation
Schedule
  13




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3.4. Payment of the Adjustment Amount Section 3.3 and Section 3.2
 Section 3.3
 Section 3.3
 3.5. Allocation of Purchase Price
 3.6 Currency Conversion.
 ARTICLE IV
 CLOSING
 4.1. Closing Date
 14




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Closing Date
 4.2. Payment on the Closing Date Articles IX and X
 4.3. Buyers Additional Deliveries Article IX and X
      Section 11.10
 4.4. Sellers Deliveries Article IX and X
  15




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ordre de mouvement
 formulaire cerfa n°2759 DGI
 Schedule 4.4(d)
   convention de sortie de lancien groupe dintégration fiscale
constitué par MGE Finances SAS Schedule 4.4 (g)
     Section 11.10
  16




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vis-à-vis
  ARTICLE V
 REPRESENTATIONS AND WARRANTIES OF SELLERS
  5.1. Organization of Sellers/Ownership of Target Shares and Business Assets
  en
état de cessation de paiements
   17




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5.2. Target and Joint Venture
     Schedule 5.2(c) Schedule 5.2(c)
 en état de cessation de paiements
 Section 5 Sections
8.1 and 8.4
 18




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5.3. Authority; No Conflict
  Schedule 5.3(b)
       5.4. Financial Statements
 Schedule 5.4(a) Balance Sheet
 19




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Financial Statements 2005 Financial Statements Schedule 5.4(a)
 Schedule 5.4(b) Interim Management Accounts
 Schedule 5.4(a)
 Schedule 5.4(d) engagements hors-bilan
 5.5. Operations Since Balance Sheet Date
 Schedule 5.5(a)
 Schedule 5.5(b) Schedule 5.5(b)
  branche dactivité
 20




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5.6. Taxes
 21




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Schedule 5.6
         Schedule 5.6(ix)
 22




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Section 7.6
 5.7. Availability of Business Assets/Real Property.
 Schedule 5.7(a)
 Schedule 5.7 (b)
 Schedule 5.7(b)
  5.8. Governmental Permits.
 Governmental Permits
 Schedule 5.8 23
        5.9. Intellectual Property Rights.
 Schedule 5.9(a) Schedule 5.9(a)
 Schedule 5.9(a)
 Schedule 5.9(c) Schedule 5.9(a) Schedule 5.9(a)
 Schedule 5.9(d),
 24




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5.10. Accounts Receivable
   Schedule 5.10(c)
 5.11. Employees and Related Agreements.
 Schedule 5.11(a)
   Schedule 5.11(d)(i)
 Schedule 5.11(d)(ii)
 25




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Services Employees
    5.12. Employee Relations Schedule 5.12(i)
 plan de
sauvegarde de lemploi, plan social
  26




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5.13. Contracts Schedule 5.13
  
     
  
 Schedule 5.13 Section 5.13 Material Agreements
  27




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Schedule 5.13
 5.14. Commercial Relations.
 Schedule 5.14 
   5.15. No Violation or Litigation Schedule 5.15
    Schedule 5.15
  28




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5.16. Environmental Matters Schedule 5.16
         5.17. Insurance Schedule 5.17
 29




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Insurance Policies
   Schedule 5.17 
 5.18. Warranties; Product Defects Schedule 5.18(i) Schedule 5.18(i)
 Schedule 5.18(i)
 Schedule 5.18(ii)
 5.19. Inventory
  30




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5.20 Foreign Investments.
 5.21 Material Adverse Effect.
 5.22. No other representations
  ARTICLE VI
 REPRESENTATIONS AND WARRANTIES OF BUYER
  6.1. Organization
 6.2. Authority; No Conflict
  31




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Schedule 6.2(b)
 6.3. Acknowledgment
 ARTICLE VII
 ACTION PRIOR TO THE CLOSING DATE
  32




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7.1. Notification of Certain Matters
 7.2. Governmental Approvals
  Schedule 7.2(b) Section 7.2 provided
 7.3. EC Commitments
 Section 7.2
  33




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Section 7.3(a)(i)
  7.4. Operations Prior to the Closing Date
 Section
5.5(b)
 7.5. Intra-group arrangements
 Schedule 7.5(a)
   Schedule 5.17
 34




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7.6. Pre-closing Restructuring
 Schedule 7.6
  7.7. Records
  ARTICLE VIII
 ADDITIONAL AGREEMENTS
 8.1. Covenant Not to Compete or Solicit Business
   35




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Section 8.1
   8.2. Change in Corporate Name
 MGE Trademarks and Logos
 36




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##### 



8.3. Tax Matters
  Section 8.3(d) provided however
 Section 7.6
  37




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8.4 No liabilities or rights in connection with the other businesses (UPS above 10kva and
related services) conducted by or assets previously owned by Target, the Joint Venture or the
International Sellers.
 Schedule 8.4,
 38




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(i)
    
    launch or cause to be launched any marketing or advertising campaign which
will refer to the Products or characteristics thereof and the purpose or effect of
which will be to compare such Products or characteristics thereof with products
manufactured or distributed by the Seller or any of its Affiliates or characteristics
thereof, or launch or cause to be launched any commercial campaign or initiative
specifically focusing on, and with a view to specifically reducing sales of, the
Products;(ii)
    
    use in connection with their own 0-10 Kva products, designs confusingly
similar or identical to the current designs of the Products; or(iii)
    
    use any right it may have or generally do anything the purpose or effect
of which shall be to prohibit or refrain in any way any third party currently
supporting the Business (including for example any supplier or consultant) from
continuing to do so after the Closing.
  Section 8.4
 8.5 Repayment of amounts due to the Schneider group
  39




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8.6 Shared Contracts
 Shared Contracts to which any of the International Sellers is a party as of the date
hereof
  Business Replacement Contract Other Replacement Contract
  Other Party
  (x)
    
    the Other Party shall, directly or through its subsidiaries,
act as sub-contractor to the Shared Contract Party and, in particular, shall
perform all of the obligations set forth in the Shared Contract and relating to
the Non Core Business of the Shared Contract Party;(y)
    
    the Shared Contract Party shall, in respect of portions of the
Shared Contract relating to its Non Core Business, act as agent for and on
behalf of the Other Party and, in particular, (i) at the Other Partys
reasonable request, shall enforce any such Other Partys rights under such
Shared Contract; and (ii) shall transfer to the Other Party any monies, goods
or
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other benefits actually received by such Shared Contract Party and
attributable to the performance of the Shared Contract, insofar as it relates
to its Non Core Business; and(c)
    
    The Other Party shall pay and discharge any liabilities arising
as a result of its actions (or the actions of its subsidiaries) pursuant to
this Section 8.6(including under applicable product warranty and/or
product liability), with the exception of any liability that may result from
the Shared Contract Party failing to comply with the terms and conditions of
the Shared Contracts.
 Shared Contract Party
 Non Core Business
 Shared Contracts to which Target is a party as of the date hereof
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(x)
    
    the Other Party shall, directly or through its subsidiaries,
act as sub-contractor to the Shared Contract Party and, in particular, shall
perform all of the obligations set forth in the Shared Contract and relating to
the Non Core Business of the Shared Contract Party;(y)
    
    the Shared Contract Party shall, in respect of portions of the
Shared Contract relating to its Non Core Business, act as agent for and on
behalf of the Other Party and, in particular, (i) at the Other Partys
reasonable request, shall enforce any such Other Partys rights under such
Shared Contract; and (ii) shall transfer to the Other Party any monies, goods
or other benefits actually received by the Shared Contract Party and
attributable to the performance of the Shared Contract, insofar as it relates
to the Non Core Business of the Share Contract Party; and(c)
    
    The Other Party shall pay and discharge any liabilities arising
as a result of its actions (or the actions of its subsidiaries) pursuant to
this Section 8.6(including under applicable product warranty and/or
product liability), with the exception of any liability that may result from
the Share Contract Party failing to comply with the terms and conditions of the
Shared Contracts.
 Shared Contract Party
 Non Core Business
 8.7 Business Contracts
 Relevant Contract
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(x)
    
    Buyer shall cause the relevant International Buyers to, act as
sub-contractor of the relevant International Sellers, and in particular,
perform all the obligations set forth in such Relevant Contract arising after
the Effective Time and relating to the Business;(y)
    
    Sellers shall cause the relevant International Sellers to act
as agent for and on behalf of the International Buyers, and in particular to
(i) at the International Buyers reasonable request, enforce any such
International Buyers rights under such Relevant Contract, and (ii) transfer to
the relevant International Buyer any monies, goods or other benefits actually
received by Sellers and attributable to the performance of the Transferred
Contract insofar as it relates to the Business; and(z)
    
    Buyer shall cause the relevant International Buyers to pay and
discharge any liabilities arising as a result their actions pursuant to this
Section 8.7 (including under applicable product warranty and/or product
liability), with the exception of any liability that may arise from the
International Sellers failing to comply with the terms and conditions of the
Relevant Contracts.
 8.9 Website
 Section 7.6
  8.10 Insurance
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8.11 Information Technology Systems
 Navision Costs
 8.12 TPL License
 TPL License Agreement
 ARTICLE IX
 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
  9.1. Necessary Governmental Approvals Schedule 7.2(b)
 9.2. Transactions Under International Purchase Agreements
 9.3. Pre-Closing Restructuring Section 7.6
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ARTICLE X
 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
  10.1. Necessary Governmental Approvals Schedule 7.2(b)
 10.2. Transactions Under International Purchase Agreements .
 10.3. Pre-Closing Restructuring Section 7.6
 ARTICLE XI
 INDEMNIFICATION
 11.1. Indemnification by Sellers
   Section 8.4
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Section 11.1(a)
 Section
5.6
  Schedule 7.6
 Schedule
B Schedule E Schedule F
  Schedule
5.9(d)
 provided however
 Sections 5.1 and 5.2 Section 11.1(a) and (b)
 De Minimis Threshold , Sections 11.1(a)(ii), 11.1(b)(ii), 11.1(b)(iii) 11.1(b)(iv) 11.1(b)(v) Section
11.1(c)(i) Section 11.1(b)(i) Section 11.1(a)(i)
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Deductible Sections 11.1(a)(ii), 11.1(b)(i), 11.1(b)(ii), 11.1(b)(iii), 11.1(b)(iv) 11.1(b)(v)
 provided, however Cap provided
further x Section 11.1(a)(ii) Section 11.1(b) y Section 5.21 Section 11.1(b)
 Section 11.1(a) Sections 11.1(a)
and (b)
 Section 5.1 5.2
 Section 5.6 Section 8.3
 Section 5.16
 Section 8.1 Section
8.1
 Sections 7.4, 7.5, 7.6 and 7.7
 Section 11.1(a)(ii) Section
11.1(b)
 Section 11.3 Section 11.1
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Article XI Article XI
 11.2. Indemnification by Buyer
     provided however Section 11.2(a)(i)   Section 11.2(a)
 Section 11.2(a) Section
11.3(a)
 Section 11.2(a)(iii)
   Section 11.3 Section 11.2 Article XI Article
XI
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11.3. Notice of Claims
 Indemnified Party Indemnitor Claim Notice provided Third Person Claim
 Section 11.3(a)
 Article XI Section 13.13
  11.4. Third Person Claims
 Claim Section 11.1 Section 11.1
 49




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##### 



Section 11.4(b)
   provided,
however
 50




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##### 



Section 11.4(b) provided, however
 Section 11.4 Section 11.3 Section 11.3 Section 13.12 Section 11 Section 11.4(g)
 11.5. Exclusions
 Article XI
 Article XI Section 11.5
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Section 11.1
 11.6. Calculation of Losses.
 Section 11.1 11.2
 Section 11.1 11.2
 Section 11.6
 52




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11.7. No Consequential Damages
 Section 5.4
 11.8. Mitigation
  11.9. Exclusivity of Remedy
 Article XI
 11.10. Comfort Letter
   53




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ARTICLE XII
 TERMINATION
 12.1. Termination
  provided Section 12.1(b)
 12.2. Notice of Termination Section 12.1
 12.3. Effect of Termination Article XII Section 12.3 Sections13.2, 13.4, 13.7 to 13.10, 13.12, and 13.13
 ARTICLE XIII
 GENERAL PROVISIONS
 13.1. Seller 1s Agent
    54




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13.2. Confidentiality Section 13.3
 13.3. No Public Announcement provided
 13.4. Notices
 
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13.5. Successors and Assigns; No Third Party Beneficiaries
    13.6. Access to Records after Closing 56
        13.7. Entire Agreement; Amendments
 13.8. Partial Invalidity
 13.9. Waivers
 13.10. Expenses
 13.11. Further Assurances 57
        13.12. Governing Law
 13.13. Submission to Jurisdiction ICC
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IN WITNESS WHEREOF,
 /s/ J. P. SalazarMGE Finances SASRepresented by: J. P. Salazar/s/ J. P. SalazarSE7A SASRepresented by: J. P. Salazar/s/ Harpreet. Saluja/s/ Mary E. HuberEaton Power Solutions SASRepresented by:
          Harpreet Saluja
          Mary E. Huber
             duly authorized 59