EXHIBIT 4.1
CONFORMED COPY
ABB Ltd
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ALSTOM
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ABB ALSTOM Power NV
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SHARE PURCHASE
AND
SETTLEMENT AGREEMENT
dated as of March 31, 2000
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TABLE OF CONTENTS
Page
ARTICLE 1 Definitions and Interpretation.................................................... 3
1.1 Definitions......................................................................... 3
1.2 Interpretation...................................................................... 16
1.3 Exhibits, Schedules and Annexes..................................................... 17
ARTICLE 2 Nature of Settlement and Purchase of Shares ...................................... 17
2.1 The Settlement ..................................................................... 17
2.2 Purchase and Transfer of Shares .................................................... 18
2.3 Consideration for the Settlement and the Transferred Shares ........................ 18
2.4 Effective Date ..................................................................... 21
2.5 Other Adjustments. ................................................................. 21
2.6 Absolute Obligations; No Set-off Against Purchase Price. ........................... 25
2.7 Nature of the Settlement ........................................................... 25
ARTICLE 3 Related Agreements and Instruments; Pre-Closing Matters .......................... 26
3.1 Releases and Ancillary Agreements .................................................. 26
3.2 Intellectual Property .............................................................. 26
3.3 Purchase of ▇▇▇▇▇▇▇ ................................................................ 27
3.4 ABB Ltd/JC Payment ................................................................. 27
3.5 Capitalization of Combustion Engineering, Inc....................................... 28
3.6 Other Adjustments .................................................................. 28
3.7 Powers of Attorney ................................................................. 28
3.8 Press Release, Public Announcements ................................................ 29
ARTICLE 4 Regulatory Approvals; Regulatory Actions.......................................... 30
4.1 Regulatory Approvals Generally ..................................................... 30
4.2 Compliance With Non-U.S. Regulations................................................ 30
4.3 Compliance with U.S. Regulations.................................................... 30
4.4 Consultation with Workers Representatives........................................... 31
4.5 Regulatory Action................................................................... 32
ARTICLE 5 Representations and Warranties.................................................... 32
5.1 Representations and Warranties of ABB Ltd........................................... 32
5.2 Further Representations and Warranties of ABB Ltd................................... 34
5.3 Representations and Warranties of ALSTOM............................................ 35
5.4 Representations and Warranties of the JC............................................ 36
ARTICLE 6 Conditions Precedent to Closing................................................... 38
6.1 Conditions Precedent to ABB Ltd's Obligations....................................... 38
6.2 Conditions Precedent to ALSTOM's Obligations........................................ 39
6.3 Conditions Precedent to the JC's Obligations ....................................... 41
ARTICLE 7 Closing........................................................................... 42
7.1 Time and Place of Closing........................................................... 42
7.2 Deliveries by ABB Ltd .............................................................. 43
7.3 Deliveries by ALSTOM................................................................ 44
7.4 Deliveries by the JC ............................................................... 44
7.5 Delayed Closing..................................................................... 45
ARTICLE 8 Covenants......................................................................... 45
8.1 Covenants Pending Settlement Closing................................................ 45
8.2 Covenants Post Settlement Closing................................................... 47
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8.3 Financial Reporting Covenant........................................................ 50
ARTICLE 9 Nature of Representations, Warranties and Covenants; Indemnification.............. 51
9.1 Nature of Representations, Warranties and Covenants................................. 51
9.2 Indemnities......................................................................... 51
ARTICLE 10 Contribution of
ABB Ltd Post-Settlement Closing Transferred Assets to the JC..... 51
10.1 Contribution; Assumption of Liabilities. ........................................... 51
10.2 Method of Transfer. ................................................................ 52
10.3 No Encumbrances..................................................................... 53
10.4 Identity of
ABB Ltd Post-Settlement Closing Transferred Assets...................... 53
10.5 Non-Listed
ABB Ltd Post-Settlement Closing Transferred Assets....................... 53
10.6 Reconciliation for Post-Settlement Closing Transfers................................ 55
10.7 Information ........................................................................ 56
ARTICLE 11 Principles Applicable to the
ABB Ltd Post-Settlement Closing Transferred Assets 57
11.1 Contracts and Consents.............................................................. 57
11.2 Intellectual Property............................................................... 59
11.3 Employees; Employee Benefits and Pensions Matters................................... 60
11.4 Certain Real Estate................................................................. 60
11.5 Existing Contracts between ABB Ltd Group and the JC Group .......................... 61
11.6 Guarantees.......................................................................... 63
11.7 Investment Projects................................................................. 65
11.8 Transfer of Title................................................................... 65
ARTICLE 12 Provisions Relating to ABB Ltd Post-Settlement Closing Transferred Assets ....... 65
12.1 Conduct of Business in the Ordinary Course.......................................... 65
12.2 Notification to Regulatory Authorities ............................................. 66
12.3 Regulatory Action................................................................... 67
12.4 Insurance........................................................................... 67
ARTICLE 13 Consequences of Non-Transfers of ABB Ltd Post-Settlement Closing Assets.......... 68
13.1 Continued Transfer Efforts.......................................................... 68
13.2 Transfers of Non-ABB Ltd Business................................................... 69
ARTICLE 14 Tax Matters with Respect to the JC............................................... 70
14.1 Claims or Elections ................................................................ 70
14.2 Information ........................................................................ 70
14.3 Tax Losses ......................................................................... 70
14.4 Investigations ..................................................................... 71
14.5 Records ............................................................................ 71
14.6 Certain Tax Matters ................................................................ 71
14.7 Combustion Engineering ............................................................. 71
14.8 Tax Liabilities .................................................................... 72
ARTICLE 15 Non-Competition; Non-Solicitation ............................................... 72
15.1 Non-competition .................................................................... 72
15.2 Exceptions ......................................................................... 73
15.3 Non-solicitation; Non-hiring ....................................................... 75
ARTICLE 16 Confidentiality ................................................................. 76
16.1 Confidentiality .................................................................... 76
16.2 Extended Parties ................................................................... 77
16.3 Excluded Information ............................................................... 78
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ARTICLE 17 Termination of Agreement ........................................................ 80
17.1 Termination of Agreement ........................................................... 80
17.2 Effect of Termination .............................................................. 81
18.3 Dutch Civil Code ................................................................... 81
ARTICLE 18 Miscellaneous ................................................................... 81
18.1 Expenses. .......................................................................... 81
18.2 Notices ............................................................................ 82
18.3 Entire Agreement ................................................................... 83
18.4 Assignment ......................................................................... 84
18.5 Binding Effect ..................................................................... 85
18.6 Headings ........................................................................... 85
18.8 Severability. ...................................................................... 85
18.8 Applicable Law ..................................................................... 86
18.9 Arbitration ........................................................................ 86
18.10 Counterparts ....................................................................... 86
18.11 No Third Party Beneficiaries ....................................................... 86
18.12 Controlling Document ............................................................... 87
18.13 Status of Affiliates ............................................................... 87
18.14 The JC ............................................................................. 87
18.15 Preservation ....................................................................... 87
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EXHIBITS
A ALSTOM Release
B Joint Venture Termination Agreement
C Shareholders Termination Agreement
D Guaranty Termination Agreement
E Keep-Well Termination Agreement
F JC Release
G ABB Ltd Release
H Combustion Engineering and Connecticut Valley Agreement
I Powerformer License Agreement Term Sheet
J Press Releases
K Windsor Site Lease Term Sheet
L 1998 Net Equity Values
SCHEDULES
2.5(a) Outstanding Open Items
5.1(e) Consents by ABB Ltd
5.3(e) Closing Regulatory Approvals to be obtained by ALSTOM
5.4(e) Consents by the JC
10.5(b) Disposable Assets
14.6 Certain Tax Matters
15.1 Prohibited Activities
15.2(b) List of Ventures
ANNEXES
A The ALSTOM Business
B Part A: The ABB Ltd Business
Part B: Permitted Encumbrances
Part C: ABB Ltd Post-Settlement Closing Transferred Assets
C Description of the Field
D Intellectual Property Rights and Know-How
E Indemnities
F Employees, Employee Benefits and Pension Provisions
G Real Estate Provisions
H Investment Projects
I Undertakings and Indemnity Agreement
J ABB Ltd Business Guarantees
K Warranties
Part A: Warranties
Part B: Nature of Warranties
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SHARE PURCHASE
AND
SETTLEMENT AGREEMENT
This
Share Purchase and Settlement Agreement (the "Agreement") dated as of
March 31, 2000 by and among ABB Ltd, a corporation organized and existing under
the laws of Switzerland ("ABB Ltd"), ALSTOM, a corporation organized and
existing under the laws of France ("ALSTOM"), and ABB ALSTOM Power NV, a
corporation organized and existing under the laws of The Netherlands (the "JC").
W I T N E S S E T H:
WHEREAS, ALSTOM and ABB Handels- und Verwaltungs AG, a corporation
incorporated under the laws of Switzerland ("ABB HV"), entered into a Joint
Venture Agreement, dated March 23, 1999, as amended and supplemented by the
Supplemental Agreement and Closing Memorandum and Agreement each dated June 30,
1999 (the "Joint Venture Agreement"), with the objectives and for the purpose
set out in the Recitals thereto, including the establishment of the JC as a
company jointly owned, directly or indirectly, by ALSTOM and ABB Ltd;
WHEREAS, ALSTOM, ABB Asea ▇▇▇▇▇ Boveri Ltd, a corporation organized and
existing under the laws of Switzerland ("ABB Asea ▇▇▇▇▇ Boveri"), ABB AG, a
corporation organized and existing under the laws of Switzerland ("ABB AG"), and
ABB AB, a corporation organized and existing under the laws of Sweden ("ABB
AB"), entered into a Shareholders Agreement, dated March 23, 1999, as amended by
the Supplemental Agreement dated June 30, 1999 (the "Shareholders Agreement"),
relating to the ownership and management of the JC;
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WHEREAS, subsequent to the execution of the Joint Venture Agreement and the
Shareholders Agreement, the ABB Ltd Group (as defined below) was reorganized in
such a manner that ABB Ltd has become the Parent Company of the group of
companies commonly referred to as the "ABB Group" including, without limitation,
ABB Asea ▇▇▇▇▇ Boveri, ABB AG, ABB AB and ABB HV;
WHEREAS, ALSTOM has delivered written notices to ABB Asea ▇▇▇▇▇ Boveri that
material disputes have arisen under certain terms and provisions of the Joint
Venture Agreement;
WHEREAS, ABB Ltd has reserved the right to deliver its own
written notices to ALSTOM with respect to material disputes that have arisen
under the terms and provisions of the Joint Venture Agreement; and
WHEREAS, each of ALSTOM and ABB Ltd desire to resolve the disputes on an
amicable basis and thus avoid the referral of such disputes to arbitration under
the Rules of Arbitration of the International Chamber of Commerce in accordance
with the provisions of the Joint Venture Agreement and, in connection therewith,
ALSTOM has agreed to purchase, and ABB Ltd has agreed to sell, all of the Class
B Shares of the JC, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
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ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. The following capitalized terms shall have the
following respective meanings, unless the context otherwise requires:
"1998 Net Equity Values" as defined in Article 10.6;
"ABB AB" as defined in the Recitals;
"ABB AB Group" at any date, ABB AB and its Subsidiaries for the
time being, but in any event excluding the JC
Group;
"ABB AG" as defined in the Recitals;
"ABB AG Group" at any date, ABB AG and its Subsidiaries for the
time being, but in any event excluding the JC
Group;
"ABB ALSTOM Power, Inc." as defined in Article 2.3(c);
"ABB Asea ▇▇▇▇▇ Boveri" as defined in the Recitals;
"ABB Asea ▇▇▇▇▇ Boveri Group" at any date, ABB Asea ▇▇▇▇▇ Boveri and its
Subsidiaries for the time being, but in any event
excluding the JC Group;
"ABB HV" as defined in the Recitals;
"ABB Ltd" as defined in the Introductory Paragraph;
"AAB Ltd/AAP Inc. Payment" as defined in Article 2.3(c);
"ABB Ltd/ALSTOM Adjustment as defined in Article 3.6;
Payment"
"ABB Ltd Ancillary as defined in Article 2.3(b);
Agreements"
"ABB Ltd Business" the "ABB Ltd Business" required to have been
transferred to the JC pursuant to the Joint
Venture Agreement, as specified in Part A of Annex
C to the Joint Venture Agreement (a copy of which
is attached hereto as Part A of Annex B hereto);
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"ABB Ltd Business Contract" any Contract of any member of the ABB Ltd Group,
which as of the Settlement Closing Date
predominantly relates to the ABB Ltd Business and
is in effect in whole or in part as of the
Settlement Closing Date;
"ABB Ltd Business Contracts as defined in Article 11.1(b);
Transfer Consents"
"ABB Ltd Business Contracts as defined in Article 11.6(a);
Guarantees"
"ABB Ltd Business Guarantee" any guarantee, letter of credit reimbursement
agreement, insurance bond, commitment with bond
issuers (including without limitation Sirius,
American International Group and Chubb), letter of
comfort, or other similar support arrangement by
any member of the ABB Ltd Group solely with
respect to JC Liabilities, entered into prior to
the date hereof or, at the request of the JC,
after the date hereof other than any ABB Ltd
Financial Institution Guarantee;
"ABB Ltd/CE Capital as defined in Article 3.5(b);
Contribution"
"ABB Ltd Excluded as defined in Annex E;
Liabilities"
"ABB Ltd Financial any guarantee, letter of credit, insurance bond,
Institution Guarantee" or other similar support arrangement (including,
without limitation, financial and credit
enhancement facilities) issued by any member of
the ABB Ltd Group that is a financial institution
or in the business of providing any such support
arrangement, in relation to any Contract or
Liability of any member of the JC Group or any ABB
Ltd Transferred Company;
"ABB Ltd Financial any conflict with, any violation of or default
Instrument Default" (with or without notice or lapse of time, or both)
under, giving rise to a right of termination,
revocation, withdrawal, suspension, modification
or cancellation (in whole or in part) of or under,
giving rise to a right of first refusal (or
similar right) under or with respect to, giving
rise to a right of acceleration of any obligation
under or a right to require repayment of any
amount under, resulting in the loss of a benefit
under, or resulting in the creation of any
Encumbrance upon
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any of the respective properties and assets of any
member of the JC Group (including without
limitation any ABB Ltd Transferred Company
included in the ABB Ltd Post-Settlement Closing
Transferred Assets) or any member of the ALSTOM
Group under, any ABB Ltd Business Guarantee in
respect of any ABB Ltd Financial Institution
Guarantee;
"ABB Ltd Group" at any date, ABB Ltd and its Subsidiaries for the
time being, but in any event excluding the JC
Group;
"ABB Ltd/JC Payment" as defined in Article 3.4;
"ABB Ltd Marks" as defined in Annex D;
"ABB Ltd Marks License
Agreements" as defined in Article 8.2(d);
"ABB Ltd Post-Settlement all Assets (including without limitation,
Closing Transferred Assets" undertakings) which were required under the terms
of the Joint Venture Agreement directly or
indirectly to have been transferred by the "ABB
Ltd Group," but which as of the date hereof have
not been directly or indirectly transferred into
the direct or indirect ownership of a member of
the JC Group, including without limitation the
Assets described in Part C of Annex B but in any
event excluding (for the avoidance of doubt) any
shares or other equity interest in the CE
Companies;
"ABB Ltd Release" as defined in Article 2.3(b);
"ABB Ltd Reorganisation" as defined in the Joint Venture Agreement;
"ABB Ltd Transferred (i) all of the undertakings directly or indirectly
Companies" contributed by the "ABB Ltd Group" to the JC Group
pursuant to the Joint Venture Agreement prior to
the date hereof (including without limitation all
of the undertakings listed on Part B of Annex C to
the Joint Venture Agreement), and (ii) all of the
undertakings comprised in the ABB Ltd
Post-Settlement Closing Transferred Assets, but in
any event excluding (under both clauses (i) and
(ii)) the CE Companies;
"ABB Ltd Wire Transfer
Instructions" as defined in Article 2.3(a);
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"ABB Powers of Attorney" as defined in Article 3.7(a);
"Absolute Obligations" as defined in Article 2.6;
"Affiliate" in relation to an undertaking, any Subsidiary of
such undertaking, and any other undertaking in
which for the time being that undertaking (or any
Subsidiary thereof) directly or indirectly owns or
controls: (i) fifty per cent (50%) or more of the
issued shares; (ii) shares conferring fifty per
cent (50%) or more of the voting rights
exercisable at all general meetings; or (iii) the
right to nominate directors holding fifty per cent
(50%) or more of the voting rights exercisable by
the directors of the said undertaking, provided
that no member of the JC Group shall be considered
an Affiliate of ABB Ltd or (until consummation of
the Settlement Closing) ALSTOM;
"Agreement" this
Share Purchase and Settlement Agreement;
"ALSTOM" as defined in the Introductory Paragraph;
"ALSTOM Ancillary as defined in Article 2.3(a);
Agreements"
"ALSTOM Business" the "ALSTOM Business" required to have been
transferred to the JC pursuant to the Joint
Venture Agreement, as specified in Part A of Annex
A to the Joint Venture Agreement (a copy of which
is attached hereto as Annex A);
"ALSTOM Group" at any date, ALSTOM and its Subsidiaries for the
time being, but in any event excluding the JC
Group;
"ALSTOM Power of Attorney" as defined in Article 3.7(b);
"ALSTOM Release" as defined in Article 2.3(a);
"ALSTOM Reorganisation" as defined in the Joint Venture Agreement;
"ALSTOM Wire Transfer as defined in Article 3.4;
Instructions"
"ALSTOM Transferred all of the undertakings directly or indirectly
Companies" contributed by the "ALSTOM Group" to the JC Group
pursuant to the Joint Venture Agreement prior to
the date hereof (including without limitation all
of the undertakings listed on Part B of Annex A to
the Joint Venture Agreement);
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"Ancillary Agreements" as defined in Article 2.3(b);
"Articles" Articles of Association of the JC;
"Asea ▇▇▇▇▇ Boveri Inc." as defined in Article 2.3(b);
"Assets" all tangible and intangible property, including
without limitation cash, leases, licenses,
Intellectual Property Rights, Know-How and/or any
other right over or interest in property;
"Balanced Netting Position" as defined in Article 2.5(b)(i);
"Business Day" a day on which banks generally in London and
Zurich are open for a full range of business;
"Business Documents" as defined in Article 8.2(c);
"Businesses" the ALSTOM Business and the ABB Ltd Business;
"CE Asset Purchase Agreement" that certain Asset Purchase Agreement dated as of
December 29, 1999, by and between Combustion
Engineering, Inc. and ABB ALSTOM Power, Inc.;
"CE Closing" as defined in Article 7.1;
"CE Companies" Combustion Engineering, Inc. and Connecticut
Valley Claim Service Co., Inc.;
"CGS" Connecticut General Statutes;
"Class B Shares" as defined in the Articles;
"Closing" as defined in the Joint Venture Agreement;
"Closing Date" June 30, 1999;
"Closing Regulatory all consents (including the expiry of any period
Approvals" following a notification such that consent is
deemed to be given or no consent is required),
approvals, waivers and filings of or with any
Regulatory Authority as are required to be
obtained or made by any of ALSTOM, ABB Ltd, the JC
or any of their respective Affiliates prior to the
Settlement Closing in connection with the
Settlement Closing Matters;
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"Combustion Engineering as defined in Article 2.3(b);
and Connecticut Valley
Agreement"
"Combustion Engineering, as defined in Article 2.3(c);
Inc."
"Connecticut ECA" as defined in Article 4.3;
"Connecticut Form III" as defined in Article 4.3;
"Contracts" with respect to any person, all contracts,
engagements and similar obligations of, rights,
benefits and licenses enjoyed by, and bonds,
guarantees and other commitments relating, to such
person;
"Default" (i) any conflict with, any violation of or default
(with or without notice or lapse of time, or both)
under, giving rise to a right of termination,
revocation, withdrawal, suspension, modification
or cancellation (in whole or in part) of or under,
giving rise to a right of first refusal (or
similar right) under or with respect to, giving
rise to a right of acceleration of any obligation
under or a right to require repayment of any
amount under, resulting in the loss of a benefit
under, or resulting in the creation of any
Encumbrance upon any of the respective properties
and assets of any member of the JC Group
(including without limitation any ABB Ltd
Transferred Company included in the ABB Ltd
Post-Settlement Closing Transferred Assets) or any
member of the ALSTOM Group under, any Contract to
which any member of the JC Group (including
without limitation any ABB Ltd Transferred Company
included in the ABB Ltd Post-Settlement Closing
Transferred Assets) or any member of the ALSTOM
Group is a party or by which it or any of its
Assets is bound, (ii) any member of the JC Group
(including without limitation any ABB Ltd
Transferred Company included in the ABB Ltd
Post-Settlement Closing Transferred Assets) or any
member of the ALSTOM Group incurring any liability
or obligation of any nature whatsoever under any
Contract or (iii) any violation of any statute,
law or regulation, or order of a Regulatory
Authority, applicable to any member of the JC
Group (including without limitation any ABB Ltd
Transferred Company included in the ABB Ltd
Post-Settlement Closing Transferred Assets) or any
member of the ALSTOM Group;
"Disposable Assets" as defined in Article 10.5(b);
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"Elektrim Case" as defined in Schedule 14.6;
"Encumbrance" any mortgage, charge, lien, hypothecation, pledge,
claim, option, usufruct, security interest, voting
agreement (other than the Shareholders Agreement),
restriction on transfer (other than as set forth
in the Shareholders Agreement or the Articles) or
any other form of encumbrance, but excluding
(other than with respect to the Transferred
Shares) encumbrances arising in the ordinary
course of the relevant Business that do not secure
indebtedness for borrowed money (or any similar
obligation) and do not, individually or in the
aggregate, materially affect the value of any
property or the use thereof for the purposes of
the relevant Business;
"Euros" the official currency of the European Union;
"Extended Parties" the Parties, ABB Asea ▇▇▇▇▇ Boveri, ABB AG and ABB
AB (and "Extended Party" shall be construed
accordingly);
"Field" as described in Annex C;
"Financial Transactions" as defined in Article 2.5(b);
"Gadelius Case" as defined in Schedule 14.6;
"GE" General Electric Company of the United States;
"Group" the ALSTOM Group or the ABB Ltd Group, or in the
context where used, the ABB AB Group, the ABB AG
Group or the ABB Asea ▇▇▇▇▇ Boveri Group;
"Guaranty Termination as defined in Article 2.3(a);
Agreement"
"IAS" International Accounting Standards;
"ISDA Agreement" as defined in Article 2.5(b)(ii);
"Indemnified Parties" as defined in Annex E;
"Intellectual Property as defined in Annex D;
Rights"
"IP Conveyance Instruments" as defined in Article 3.2;
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"JC" as defined in the Introductory Paragraph;
"JC/ABB Contract" as defined in Article 11.5(a);
"JC/ABB Service Contracts" as defined in Article 11.5(d);
"JC/CE Capital Contribution" as defined in Article 3.5;
"JC Group" at any date, the JC and its Subsidiaries for the
time being;
"JC Liabilities" (i) all Liabilities of the ABB Ltd Business, and
(ii) all Liabilities of the ABB Ltd Transferred
Companies or the ABB Ltd Post-Settlement Closing
Transferred Assets constituting Liabilities of the
ABB Ltd Business, in the case of both (i) and (ii)
other than the Excluded Liabilities (as defined in
Annex E);
"JC Power of Attorney" as defined in Article 3.7(c);
"JC Release" as defined in Article 2.3(a);
"Joint Venture Agreement" as defined in the Recitals;
"Joint Venture Termination as defined in Article 2.3(a);
Agreement"
"Keep-Well Termination as defined in Article 2.3(a);
Agreement"
"Know-How" as defined in Annex D;
"Liabilities" all liabilities, obligations, losses, damages,
deficiencies, obligations, debts and Taxes, all
claims, demands, actions, lawsuits or other
proceedings (including without limitation
administrative proceedings, cost recovery actions,
indemnification and contribution actions) by a
Regulatory Authority or by any other third party
(including without limitation any of the foregoing
sounding in tort, successor liability, strict
liability, joint and several liability, assumption
of liability, contribution, indemnity, contract,
warranty or any other theory of law or equity),
and all judgments, orders, injunctions,
assessments, fines, diminutions in value, punitive
damages, compliance costs, response action costs,
removal, remediation and cleanup costs, corrective
action costs, natural resource damages, penalties,
levies, surcharges, recoveries, interest, other
costs
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and expenses, including without limitation legal
expenses and other defense costs, in each case
whether past, present or future (and regardless of
whether known or unknown, fixed or contingent,
disclosed or undisclosed, asserted or unasserted
as of the date of this Agreement or as of the
Settlement Closing Date);
"Long-Term Investments" as defined in Article 2.5(b)(i);
"Management Board" the board of managers of the JC;
"Master Set-Off and Netting as defined in Article 2.5(b);
Agreement"
"Non-Listed ABB Ltd as defined in Article 10.5;
Post-Settlement Closing
Transferred Assets"
"On-Balance Sheet as defined in Article 2.5(b);
Transactions"
"Off-Balance Sheet as defined in Article 2.5(b);
Transactions"
"Other Party" ALSTOM, in relation to ABB Ltd, or ABB Ltd, in
relation to ALSTOM;
"Parent Company" in relation to any particular undertaking (the
"Specified Undertaking")":
(i) if such Specified Undertaking is not a
Subsidiary of any other undertaking, such
Specified Undertaking itself; or
(ii) if such Specified Undertaking is a Subsidiary
of any other undertaking, such other undertaking
(or, if there are two or more such other
undertakings, the undertaking from among such
other undertakings that is not itself a Subsidiary
of any other undertakings);
"Parties" ALSTOM, ABB Ltd and the JC (and "Party" shall be
construed accordingly);
"Parties Transferred the ALSTOM Transferred Companies (in the case of
Companies" ALSTOM) or the ABB Ltd Transferred Companies (in
the case of ABB Ltd);
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"Permitted Encumbrance" an Encumbrance which:
(i) arises (or has arisen) in the ordinary course
of business of the ABB Ltd Business; or
(ii) is described in Part B of Annex B;
"Permitted Exceptions" as defined in Annex K;
"Permitted Merger in the case of ABB Ltd, ALSTOM or the JC, (i) any
Transaction" merger or consolidation of such Party with or into
any third party or (ii) the sale or other transfer
of all or substantially all of such Party's
assets, or all or substantially all of the assets
of the Group of such Party considered as a whole,
to any third party (or any related group of third
parties), whether in a single transaction or in a
series of related transactions;
"PLDOL" as defined in Schedule 14.6;
"PLDOL Matter" as defined in Schedule 14.6;
"PLZAM" as defined in Schedule 14.6;
"Post-Settlement Closing as defined in Article 2.5(b)(i);
Netting Payment"
"Powerformer License as defined in Article 3.2;
Agreement"
"Prohibited Activities" the activities set out in Schedule 15.1;
"Purchase Price" as defined in Article 2.3(a);
"Reconciliation Statement" as defined in Article 10.6;
"Regulatory Action" (i) the taking of any action:
(ii) the institution of proceedings in any court
of competent jurisdiction; or
(iii) the proposal or enactment of any statute or
regulation by any Regulatory Authority,
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in each case being an action or proceeding which
(if successfully pursued by the person initiating
the same) would, or a statute or regulation which
(when enacted) would, prohibit, restrict or delay
the effect of any of the Settlement Closing
Matters, any transfer of ABB Ltd Post-Settlement
Closing Transferred Assets or the carrying on of
the business of the JC Group in the ordinary
course after the Settlement Closing or after the
date of any transfer of ABB Ltd Post-Settlement
Closing Transferred Assets, and/or result in the
making of any order for the payment of any penalty
or damages by any member of the ALSTOM Group, the
ABB Ltd Group or the JC Group in connection with
the transactions contemplated by this Agreement;
"Regulatory Approvals" all consents (including the expiry of any period
following a notification such that consent is
deemed to be given or no consent is required),
approvals, waivers and filings of or with any
Regulatory Authority as are required to be
obtained or made by any of ALSTOM, ABB Ltd, the JC
or any of their respective Affiliates in
connection with the execution, delivery and
performance of this Agreement and the Settlement
Documents by the respective parties (or
contemplated parties) thereto and the consummation
of the transactions contemplated herein and
therein;
"Regulatory Authority" any government (including without limitation any
political subdivision or instrumentality of any
government), any governmental, quasi-governmental,
supranational or state agency, department or
regulatory body or authority, or any stock
exchange;
"Releases" the ABB Ltd Release, the ALSTOM Release and the JC
Release;
"Reorganisations" the ALSTOM Reorganisation and the ABB Ltd
Reorganisation;
"Required Workers' as defined in Article 4.4;
Consultations"
"Restricted Employee" as defined in Article 15.3;
"Rules" as defined in Article 18.9;
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"Settlement" as defined in Article 2.1;
"Settlement Closing" as defined in Article 7.1;
"Settlement Closing Date" as defined in Article 7.1;
"Settlement Closing Matters" the execution and delivery of the Ancillary
Agreements contemplated hereby to be executed and
delivered prior to or at the Settlement Closing,
the performance by the Parties of their respective
obligations under this Agreement and the Ancillary
Agreements specifically contemplated to be
performed prior to or at the Settlement Closing
and the consummation of the transactions
specifically contemplated herein and therein to be
consummated prior to or at the Settlement Closing;
"Settlement Documents" as defined in Article 2.3(b);
"Share" any participating interest in any undertaking;
"Shareholders Agreement" as defined in the Recitals;
"Shareholders Termination as defined in Article 2.3(a);
Agreement"
"Specified Undertaking" as defined in the definition of "Parent Company";
"Stibbe" as defined in Article 7.1;
"Subsidiary" in relation to an undertaking, any other
undertaking in which for the time being the first
mentioned undertaking owns or controls, directly
or indirectly:
(i) more than fifty per cent (50%) of the issued
shares; or
(ii) shares conferring more than fifty per cent
(50%) of the voting rights exercisable at all
general meetings; or
(iii) the right to nominate directors who together
hold a majority of the voting rights exercisable
by the directors of the said undertaking,
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and so that an undertaking which is a Subsidiary
of another shall also be a Subsidiary of any
undertaking of which that other is a Subsidiary;
"Supervisory Directors B" members of the Supervisory Board of the JC
appointed by the General Meeting of Shareholders
from a list of nominees submitted by the holders
of Class B Shares;
"Tax Benefit" as defined in Article 14.7;
"Tax Matters" as defined in Schedule 14.6;
"Taxes" any and all forms of taxes, levies, imposts,
duties and other charges in the nature of taxation
imposed by the government of any country or by any
state or municipal authority anywhere in the
world;
"Taxing Authority" any authority of any government of any country,
state, county, city or locality (or any political
subdivision or any instrumentality thereof)
authorized or required to collect or impose Taxes
or enforce any law imposing Taxes;
"Tax Return" any tax return or other filing in respect of
Taxes;
"Transfer Date Net Equity as defined in Article 10.6;
Value"
"Transferor" the meaning attributed thereto in Article 11.1(d);
"Transferred Assets" as defined in Article 10.6;
"Transferred Shares" as defined in Article 2.2;
"undertaking" a body corporate or unincorporate, a partnership
or any other entity.
"Undertakings and Indemnity the agreement set forth in Annex I;
Agreement"
"US GAAP" U.S. generally accepted accounting principles;
"Warranties" as defined in Annex K;
"Warranties Breach" as defined in Annex E;
-▇▇-
"▇▇▇▇▇▇▇▇▇" ▇▇▇ Ltd or ALSTOM, as the case may be; and
"Windsor Site Lease" an agreement between Combustion Engineering, Inc.
and a Subsidiary of the JC designated by the JC on
the basis of the term sheet attached as Exhibit K
hereto and as agreed between the Parties.
1.2 INTERPRETATION. In this Agreement:
(a) terms defined in the singular shall have a correlative meaning
when used in the plural and vice versa;
(b) references to persons shall include individuals, undertakings
and governmental, supranational and state agencies and regulatory bodies;
(c) references to Recitals, Articles, Exhibits, Schedules and
Annexes and parts thereof, unless a contrary intention appears, are to the
Recitals, Articles, Exhibits, Schedules and Annexes to this Agreement and parts
thereof, respectively;
(d) any reference to a document being "in the agreed terms" or "in
the agreed form" is to such a document in the terms or in the form agreed
between ALSTOM and ABB Ltd and for the purpose of identification signed by or on
behalf of ALSTOM and ABB Ltd or in such other terms or form as may be agreed in
writing between ALSTOM and ABB Ltd in substitution therefor;
(e) references to any statutory provision shall include such
provision as from time to time amended, whether before, on or after the date of
this Agreement (unless the context in which such reference is used requires a
different date), and shall be deemed to include provisions of earlier
legislation (as from time to time amended) which have been re-enacted
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(with or without modification) or replaced (directly or indirectly) by such
provision and shall further include all statutory instruments or orders from
time to time made pursuant thereto;
(f) the headings are inserted for convenience only and shall not
affect the construction of this Agreement; and
(g) where reference is made to rights or obligations of ALSTOM or
ABB Ltd, such rights or obligations may be assigned to or performed by an
undertaking which is one hundred percent (100%) directly or indirectly owned by
ALSTOM or ABB Ltd, as the case may be, provided always that the Other Party has
given its prior consent to such assignment or performance (such consent not to
be unreasonably withheld) and provided always that ALSTOM and ABB Ltd shall
remain, for all purposes, parties to this Agreement and liable to the Other
Party for the performance by any such undertaking.
1.3 EXHIBITS, SCHEDULES AND ANNEXES. The Exhibits, Schedules and Annexes
form part of this Agreement and shall be construed and shall have the same full
force and effect as if expressly set out in the body of this Agreement.
ARTICLE 2
NATURE OF SETTLEMENT AND PURCHASE OF SHARES
2.1 THE SETTLEMENT. The Parties agree to settle all of their claims,
liabilities, disputes and differences with respect to the formation, operation
and activities of the JC including, without limitation, all claims, liabilities,
disputes and differences, past, present and future, arising from or associated
with the contribution of the ABB Ltd Business and the ALSTOM Business to the JC
pursuant to the terms and provisions of the Joint Venture Agreement, on the
terms and
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conditions, and solely to the extent, set forth herein and subject to the
consummation of the Settlement Closing (the "Settlement"). It is agreed among
the Parties that nothing in the preceding sentence shall constitute a release of
any claim, right, liability or obligation of any of the Parties, all of which
releases are set forth only in the ALSTOM Release, the JC Release and the ABB
Ltd Release, respectively.
2.2 PURCHASE AND TRANSFER OF SHARES. Subject to the terms and conditions
of this Agreement, at the Settlement Closing, in consideration of the Purchase
Price and in partial consideration of the Settlement, ABB Ltd shall sell and
transfer or cause to be sold and transferred to ALSTOM, or its designated
Affiliate(s), and ALSTOM shall accept, or cause to be accepted by its designated
Affiliate(s), all of the outstanding Class B Shares of the JC, representing
fifty percent (50%) of the issued and outstanding share capital of the JC (the
"Transferred Shares"), together with all rights, title and interest in and to
the Transferred Shares and all voting and economic rights and benefits
associated therewith. The Transferred Shares shall be sold and transferred to
ALSTOM, or its designated Affiliate(s), free and clear of any Encumbrance.
2.3 CONSIDERATION FOR THE SETTLEMENT AND THE TRANSFERRED SHARES.
(a) CONSIDERATION BY ALSTOM. Without limitation, the consideration
by ALSTOM for the Settlement and the Transferred Shares shall be (i) the payment
by ALSTOM of the purchase price in the amount of One Billion Two Hundred Fifty
Million Euros (EURO 1,250,000,000) (the "Purchase Price"), payable by wire
transfer in immediately available funds to ABB Ltd or its designee on the
Settlement Closing Date, in accordance with wire transfer instructions (the "ABB
Ltd Wire Transfer Instructions") delivered by ABB Ltd to ALSTOM at
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least one Business Day prior to the Settlement Closing; (ii) the execution and
delivery by ALSTOM at the Settlement Closing of (A) the General Release, dated
the Settlement Closing Date, in the form attached hereto as Exhibit A (the
"ALSTOM Release"), (B) the Joint Venture Termination Agreement, dated the
Settlement Closing Date, in the form attached hereto as Exhibit B (the "Joint
Venture Termination Agreement"), (C) the Shareholders Termination Agreement,
dated the Settlement Closing Date, in the form attached hereto as Exhibit C (the
"Shareholders Termination Agreement"), (D) the Guaranty Termination Agreement,
dated the Settlement Closing Date, in the form attached hereto as Exhibit D (the
"Guaranty Termination Agreement") and (E) the Keep-Well Termination Agreement,
dated the Settlement Closing Date, in the form attached hereto as Exhibit E (the
"Keep-Well Termination Agreement"); and (iii) the execution and delivery by the
JC at the Settlement Closing of the General Release, dated the Settlement
Closing Date, in the form attached hereto as Exhibit F (the "JC Release"). The
ALSTOM Release, the Joint Venture Termination Agreement, the Shareholders
Termination Agreement, the Guaranty Termination Agreement and the Keep-Well
Termination Agreement are hereinafter collectively referred to as the "ALSTOM
Ancillary Agreements."
(b) CONSIDERATION BY ABB LTD. Without limitation, the consideration
by ABB Ltd for the Settlement and the receipt of the Purchase Price shall be, in
part, the sale, transfer and delivery of the Transferred Shares at the Purchase
Price and, in part, (1) the execution and delivery by ABB Ltd at the Settlement
Closing of (i) the General Release, dated the Settlement Closing Date, in the
form attached hereto as Exhibit G (the "ABB Ltd Release"), (ii) the ALSTOM
Ancillary Agreements other than the ALSTOM Release and (iii) the Powerformer
License Agreement and (2) the execution and delivery by Asea ▇▇▇▇▇ Boveri Inc.,
a corporation organized and existing under the laws of the State of Delaware
("Asea ▇▇▇▇▇ Boveri Inc."), of
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the Stock Purchase Agreement, dated the Settlement Closing Date, in the form
attached hereto as Exhibit H (the "Combustion Engineering and Connecticut Valley
Agreement"). The documents described in clauses (1) and (2) of the preceding
sentence are hereinafter collectively referred to as the "ABB Ltd Ancillary
Agreements." The ALSTOM Ancillary Agreements and the ABB Ltd Ancillary
Agreements are hereinafter collectively referred to as the "Ancillary
Agreements." This Agreement, the Ancillary Agreements and the further
agreements, certificates or other instruments executed and delivered pursuant to
any of the foregoing are hereinafter collectively referred to as the "Settlement
Documents."
(c) COMBUSTION ENGINEERING.
(1) At the Settlement Closing, the JC and ABB Ltd shall cause their
respective applicable Subsidiaries to execute and deliver, and to consummate the
transactions contemplated by, the Combustion Engineering and Connecticut Valley
Agreement.
(2) ABB Ltd shall cause Asea ▇▇▇▇▇ Boveri Inc. to make a payment by
wire transfer to ABB ALSTOM Power, Inc., a corporation organized and existing
under the laws of the State of Delaware ("ABB ALSTOM Power, Inc."), in the
amount of Ninety-Eight Million Five Hundred Thousand United States Dollars
($98,500,000) as payment in full to settle all claims and disputes and
diminution in value, if any, incurred or suffered by ABB ALSTOM Power, Inc. as a
result of the Transfer Agreement made as of June 27, 1999 by and between Asea
▇▇▇▇▇ Boveri Inc. and ABB Power Subholding, Inc., a corporation organized and
existing under the laws of the State of Delaware, and the transfer of the shares
of Combustion Engineering, Inc., a corporation organized and existing under the
laws of the State of Delaware ("Combustion Engineering, Inc."), to ABB ALSTOM
Power, Inc. pursuant to the terms of the Joint Venture
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Agreement. The Parties agree to treat such payment for tax purposes as a
contribution to capital. The Parties further acknowledge that the releases in
respect of such claims are submitted within, and are only as set forth in, the
ALSTOM Release and the JC Release. Such payment (the "ABB Ltd/AAP Inc. Payment")
shall be made at the Settlement Closing to the account of ABB ALSTOM Power, Inc.
as notified in writing to ABB Ltd at least one (1) Business Day prior to the
Settlement Closing Date.
(3) Each of ABB Ltd and ALSTOM covenant to the other that from and
after the Settlement Closing Date, it will not, and will cause Asea ▇▇▇▇▇ Boveri
Inc. and Combustion Engineering, Inc. and their respective successors and
assigns not to, seek to void or rescind, or challenge in any way, the
transactions consummated pursuant to the CE Asset Purchase Agreement and the
Combustion Engineering and Connecticut Valley Agreement.
(4) Reference is hereby made to the CE Asset Purchase Agreement and
to the "CE Specified Debt" (as defined therein). The Parties agree that they
shall cause their respective Subsidiaries to take such action as is necessary to
procure that the principal amount of the Specified Debt is $27,140,000 as of the
Settlement Closing Date.
2.4 EFFECTIVE DATE. The effective date of the Settlement and sale and
transfer of the Transferred Shares shall be the Settlement Closing Date.
2.5 OTHER ADJUSTMENTS.
(a) OUTSTANDING OPEN ITEMS. Prior to the date hereof, the Parties
have resolved all of the outstanding open items relating to the transfer of the
ABB Ltd Business to the JC, including, without limitation, those items
identified in Schedule 2.5(a) hereto, in further
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consideration of the entering into of this Agreement and the closing of the
transactions contemplated herein, effective upon consummation of the Settlement
Closing.
(b) CERTAIN FINANCIAL TRANSACTIONS. As of the date hereof, the JC
Group has entered into on-balance sheet and off-balance sheet and other
financial transactions (collectively, the "Financial Transactions") with the ABB
Ltd Group, in connection with the Businesses as conducted by the JC Group.
Certain of the on-balance sheet transactions (the "On-Balance Sheet
Transactions") are subject to a Master Set-Off and Netting Agreement, dated as
of July 1, 1999, between the JC and ABB Asea ▇▇▇▇▇ Boveri (the "Master Set-Off
and Netting Agreement"). The off-balance sheet transactions (the "Off-Balance
Sheet Transactions") have been entered into and have been conducted in
accordance with the terms and conditions contained in standard ISDA agreements.
Each of ALSTOM, the JC and ABB Ltd shall proceed as follows with respect to the
Financial Transactions:
(i) ON-BALANCE SHEET TRANSACTIONS. On the day prior to the
Settlement Closing Date, ABB Ltd shall prepare and deliver or cause
its Subsidiary, ABB Capital B.V. to prepare and deliver to the JC a
statement setting forth the current creditor and debtor position of
the parties to the Master Set-Off and Netting Agreement. Within one
(1) Business Day of the receipt of such statement (but in no event
prior to the consummation of the Settlement Closing), if the
Settlement Closing occurs, the JC shall pay to ABB Capital B.V. the
amounts (the "Post-Settlement Closing Netting Payment") necessary to
bring the debtor position of the AAP Netting Group (as such term is
defined in the Master Set-Off and Netting Agreement) into balance
with the creditor position of the ABB Netting Group (as such term is
defined in the Master Set-Off and Netting Agreement) (hereinafter,
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the "Balanced Netting Position"). Thereafter, at the end of every
two (2) weeks, ABB Ltd shall prepare and deliver, or cause ABB
Capital B.V. to prepare and deliver additional statements setting
forth the then current creditor and debtor position of the parties
to the Master Set-Off and Netting Agreement and the JC shall make
additional payments to ABB Capital B.V. as necessary to maintain the
Balanced Netting Position. One hundred (100) days after the
Settlement Closing Date, the Parties shall terminate or cause to be
terminated the Master Set-Off and Netting Agreement and thereafter
cease to enter into any additional On-Balance Sheet Transactions,
provided that each Party shall remain liable to the Other Party for
all obligations of its respective Group under the terms and
conditions of such Master Set-Off and Netting Agreement.
Notwithstanding the foregoing, in the event certain deposits of the
JC Group are invested in long-term investment contracts,
certificates of deposit or other similar investments (the "Long-Term
Investments"), such Long-Term Investments shall continue to be
maintained by the ABB Ltd Group until maturity unless otherwise
instructed in writing by ALSTOM and shall be paid to ALSTOM within
one (1) Business Day of their maturity or earlier termination or
withdrawal, as the case may be; provided, however, that ALSTOM and
the JC shall be solely liable for any premium, penalty,
"break-funding" or other third-party early withdrawal, early
termination or equivalent cost and any reasonable out-of-pocket
expenses incurred by the ABB Ltd Group as a result of any early
termination or withdrawal directed by ALSTOM. Such estimated
expenses shall not be binding on the ABB Ltd Group. Upon request
from ALSTOM, the ABB Ltd Group shall inform the JC and
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ALSTOM of any anticipated premium, penalty, "break-funding" or other
similar cost and any anticipated out-of-pocket expenses to be
incurred by the ABB Ltd Group prior to any such early termination or
withdrawal.
(ii) OFF-BALANCE SHEET TRANSACTIONS. Prior to or at the
Settlement Closing, the JC and ABB Ltd or its Affiliate shall enter
into an ISDA agreement for a ninety (90) day term (the "ISDA
Agreement"), which ISDA Agreement shall govern the Off-Balance Sheet
Transactions. Upon expiration of the ISDA Agreement, the JC Group
and the ABB Ltd Group shall cease to enter into any additional
Off-Balance Sheet Transactions, provided that each Party shall
remain liable to the Other Party for all obligations of its
respective Group under the terms and conditions of the ISDA
Agreement.
(iii) BRAZIL AND POLAND. From and after the Settlement Closing
Date, the JC Group and the ABB Ltd Group shall proceed with respect
to the Financial Transactions entered into in connection with the
Businesses conducted in Brazil and Poland for a term of thirty (30)
days in a manner consistent with the provisions of Article 2.5(b)(i)
and (ii).
(iv) PROJECT SUPPORT. Following the Settlement Closing Date,
ABB Ltd shall maintain or cause to be maintained in place all
existing financial support provided by the ABB Ltd Group with
respect to the Rosarito and Monterey, Mexico projects, in accordance
with their existing terms and conditions.
(v) ALSTOM SUPPORT. ALSTOM acknowledges and confirms its
agreement that Financial Transactions entered into by the JC Group
described
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above and agrees to provide the financial support necessary for the
JC Group to perform its obligations under such Financial
Transactions and shall indemnify and hold harmless the ABB Ltd Group
in accordance with the provisions of Annex E hereto as a result of
any breach or failure to perform by the JC Group under such
Financial Transactions.
2.6 ABSOLUTE OBLIGATIONS; NO SET-OFF AGAINST PURCHASE PRICE. (a) The
obligation of ALSTOM to pay the Purchase Price for the Transferred Shares, and
of ABB Ltd to cause the Transferred Shares to be sold, transferred and delivered
to ALSTOM (or its designee(s)), in each case in accordance with (and subject to)
the provisions of this Agreement (such obligations being referred to herein as
the "Absolute Obligations"), are absolute and are not and shall not be subject
to any legal or equitable right of set-off or other deduction for any reason
whatsoever.
(b) For the avoidance of doubt, Article 2.6(a) shall cease to have
any further force or effect upon payment and performance in full of the Absolute
Obligations at the Settlement Closing.
2.7 NATURE OF THE SETTLEMENT. The Parties acknowledge and agree that
they have extensive knowledge and experience in financial and business matters
and are capable of evaluating the merits and risks of the transactions
contemplated hereby. The consideration for the Settlement has been arrived at
following arm's-length negotiations between the Parties and their
representatives. Prior to such negotiations, each of the Parties has been
involved in the affairs of the JC and has had extensive access to financial and
other information concerning the assets, liabilities, business, results of
operations, financial condition and prospects of the JC and its predecessors.
Accordingly, the Parties hereby irrevocably agree to be bound by the
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determination of the consideration for the Settlement, including the Purchase
Price for the Transferred Shares, notwithstanding any change in the assets,
liabilities, business, results of operations, financial condition or prospects
of the JC prior to, from and after the date hereof. No Party or any of its
Affiliates (or any person claiming by or though any Party or its Affiliates)
shall have or assert any claim or dispute (whether in contract, tort or
otherwise) with respect to the negotiation of this Agreement or the resulting
determination of the consideration for the Settlement or the Purchase Price for
the Transferred Shares, including, without limitation, any claims or disputes
premised in whole or in part on any allegation that material information
pertinent to such determination was withheld or was not disclosed or made
available to such Party, all of which claims and disputes are hereby irrevocably
waived. Nothing in this Article 2.7 prejudices the express rights of any party
under this Agreement or under any other Settlement Document.
ARTICLE 3
RELATED AGREEMENTS AND INSTRUMENTS; PRE-CLOSING MATTERS
3.1 RELEASES AND ANCILLARY AGREEMENTS. At or prior to the Settlement
Closing, (a) ALSTOM shall enter into, or cause its Affiliates to enter into, as
the case may be, the ALSTOM Ancillary Agreements, (b) ABB Ltd shall enter into,
or cause its Affiliates to enter into, as the case may be, the ABB Ltd Ancillary
Agreements and (c) the JC shall enter into the JC Release and the Ancillary
Agreements to which it is a party.
3.2 INTELLECTUAL PROPERTY. At or prior to the Settlement Closing, ABB
Ltd or its appropriate Affiliate and ALSTOM shall enter into the Powerformer
License Agreement on the basis of the term sheet attached hereto as Exhibit I
(the "Powerformer License Agreement"), and
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ABB Ltd and/or its Affiliates, and ALSTOM, shall enter into such instruments of
assignment and conveyance, and such licenses, sublicenses, use agreements or
other instruments, as may be necessary to provide the JC Group with ownership or
use, as the case may be, of the Intellectual Property Rights and Know-How that
ABB Ltd is obligated to provide, or cause to be provided, to the JC Group in
accordance with the terms and conditions of Annex D (collectively, the "IP
Conveyance Instruments"). Nothing in the preceding sentence is intended to, or
shall, limit ABB Ltd's obligations to execute and deliver, and/or cause others
to execute and deliver, any such instruments from time to time upon the request
of ALSTOM after the Settlement Closing to the extent such instruments are not
entered into at or prior to the Settlement Closing, or otherwise limit the
obligations of ABB Ltd under Annex D.
3.3 PURCHASE OF ▇▇▇▇▇▇▇. Prior to the Settlement Closing, ABB Ltd and
ALSTOM shall enter into an agreement for the purchase by ABB Ltd or its
appropriate Subsidiary and the sale by ALSTOM or its appropriate Subsidiary of
all of the issued and outstanding shares of common stock of ▇▇▇▇▇▇▇ Australia
Pty Ltd for the purchase price of Two Million Six Hundred Thousand Australian
Dollars (AUD 2,600,000). The closing of the purchase of such shares shall occur
on the Settlement Closing Date or as soon thereafter as is practicable.
3.4 ABB LTD/JC PAYMENT. At the Settlement Closing, ABB Ltd or its
designee shall pay to the JC the amount of Two Hundred Sixty-Eight Million Euros
(EURO 268,000,000) in respect of an additional equity contribution to the JC
(the "ABB Ltd/JC Payment") in accordance with wire transfer instructions (the
"ALSTOM Wire Transfer Instructions") delivered by ALSTOM to ABB Ltd at least one
Business Day prior to the Settlement Closing. ABB Ltd agrees that the payment of
the ABB Ltd/JC Payment shall not be subject to any legal or equitable right of
set-
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off, counterclaim or other deduction for any reason whatsoever, or right of
refund or return, in whole or in part, for any reason whatsoever.
3.5 CAPITALIZATION OF COMBUSTION ENGINEERING, INC. (a) At the Settlement
Closing, immediately prior to the consummation of the closings of the
transactions contemplated herein and in the Combustion Engineering and
Connecticut Valley Agreement, the JC shall contribute to Combustion Engineering,
Inc. the sum of One Hundred Million U.S. Dollars ($100,000,000) the ("JC/CE
Capital Contribution").
(b) At the Settlement Closing, immediately after the consummation
of the closing of the transactions contemplated by the Combustion Engineering
and Connecticut Valley Agreement, ABB Ltd shall cause to be contributed to
Combustion Engineering, Inc. the sum of Two Hundred Million U.S. Dollars
($200,000,000) (the "ABB Ltd/CE Capital Contribution"), which shall be made as
an additional capital contribution.
3.6 OTHER ADJUSTMENTS. At the Settlement Closing, ABB Ltd, or its
designee, shall pay to ALSTOM, or its designee, the amount of Sixty Million
Euros ((euro)60,000,000) in respect of various adjustments between the Parties
with respect to matters relating to or associated with the ABB Ltd Business as
contributed to the JC (the "ABB Ltd/ALSTOM Adjustment Payment").
3.7 POWERS OF ATTORNEY. (a) On the date hereof, ABB Ltd is delivering to
ALSTOM powers of attorney (the "ABB Powers of Attorney") executed by authorized
senior corporate officers of each of ABB Ltd and all other relevant Affiliates
of ABB Ltd authorising the individual named therein to execute this Agreement,
the ABB Ltd Release and all other agreements, documents and instruments to be
executed by ABB Ltd and its Subsidiaries in connection herewith, including, but
not limited to, the ABB Ltd Ancillary Agreements, and to
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take any and all actions deemed necessary or advisable to consummate the
transactions contemplated hereby or thereby.
(b) On the date hereof, ALSTOM is delivering to ABB Ltd a power of
attorney (the "ALSTOM Power of Attorney") executed by the Chairman and Chief
Executive Officer of ALSTOM authorising the individual named therein to execute
this Agreement, the ALSTOM Release and all other agreements, documents and
instruments to be executed by ALSTOM and its Subsidiaries in connection
herewith, including, but not limited to, the ALSTOM Ancillary Agreements, and to
take any and all actions deemed necessary or advisable to consummate the
transactions contemplated hereby or thereby.
(c) On the date hereof, the JC is delivering to ALSTOM and ABB Ltd
a notarized power of attorney (the "JC Power of Attorney") executed by the
President and Chief Executive Officer of the JC authorizing the individual named
therein to execute this Agreement, the JC Release and all other agreements,
documents and instruments to be executed by the JC in connection herewith,
including, but not limited to, any of the Ancillary Agreements to which it is a
party, and to take any and all actions deemed necessary or advisable to
consummate the transactions contemplated hereby or thereby.
3.8 PRESS RELEASE, PUBLIC ANNOUNCEMENTS. On the date hereof and on the
Settlement Closing Date, the Parties shall issue only the press releases agreed
to be issued by each of the Parties, copies of which are attached hereto as
Exhibit J. Except as required by law or applicable stock exchange requirements,
no Party shall make any other public announcement regarding the transactions
contemplated by this Agreement before or after the Settlement Closing without
the
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express written consent of the other Parties. All such other announcements
shall, to the extent practicable, be provided in advance to the other Parties.
ARTICLE 4
REGULATORY APPROVALS; REGULATORY ACTIONS
4.1 REGULATORY APPROVALS GENERALLY. The Parties shall use all reasonable
efforts to obtain or make, as the case may be (and shall cooperate with each
other in obtaining or making, as the case may be), as soon as possible, all
Regulatory Approvals. Without limitation of the generality of the preceding
sentence, the Parties shall cooperate with one another to ensure that all
information necessary or desirable for the making of (or responding to any
requests for further information consequent upon) any necessary or desirable
notifications or filings in connection with the foregoing is supplied to the
Party dealing with such notification or filing, with a view to ensuring that all
such notifications and filings are properly, accurately and promptly made.
4.2 COMPLIANCE WITH NON-U.S. REGULATIONS. Without limiting the
generality of Article 4.1, the Parties shall take all appropriate action to
obtain the consent of (and all other Regulatory Approvals to be secured from)
the European Union, Swiss, Canadian and South African competition and/or
anti-trust authorities, in each case in connection with the transactions
contemplated by this Agreement and the Ancillary Agreements.
4.3 COMPLIANCE WITH U.S. REGULATIONS. The Parties shall cooperate in
complying with the rules and regulations of U.S. Regulatory Authorities,
including, without limitation, the Federal Trade Commission, the Department of
Justice and the Securities and Exchange
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Commission, in connection with obtaining all U.S. Regulatory Approvals. The
Parties specifically agree that, in connection with the "Closing" under the
Combustion Engineering and Connecticut Valley Agreement, (i) the "Certifying
Party" (as such term is defined in Connecticut General Statutes ("CGS") Section
22a-134(6)) shall be Combustion Engineering, Inc., (ii) prior to such "Closing,"
such Certifying Party shall prepare, complete, execute and deliver to ABB ALSTOM
Power, Inc. Sections A through C and F of "Form III" as defined in CGS Section
22a-134(12) (the "Connecticut Form III"), in form and substance satisfactory to
ALSTOM and consistent with the Connecticut Form III certified by Combustion
Engineering, Inc. and dated June 28, 1999, (iii) prior to such "Closing," such
Certifying Party shall prepare, or cause to be prepared, and shall complete,
certify and deliver to ABB ALSTOM Power, Inc. the "Environmental condition
assessment form" as defined in CGS Section 22a-134(17) (the "Connecticut ECA"),
in form and substance satisfactory to ALSTOM and consistent with the Connecticut
ECA certified by Combustion Engineering, Inc. and dated July 7, 1999, and (iv)
at such "Closing", (a) Asea ▇▇▇▇▇ Boveri Inc. shall complete, execute and
deliver to ABB ALSTOM Power, Inc., Section D of the Connecticut Form III, and
(b) ABB ALSTOM Power, Inc. shall complete and execute Section E of the
Connecticut Form III and shall deliver to Asea ▇▇▇▇▇ Boveri Inc. a copy of the
completed Connecticut Form III.
4.4 CONSULTATION WITH WORKERS' REPRESENTATIVES. The Parties shall, and
shall cause their respective Affiliates and the JC Group to, as soon as possible
after the date hereof, take all appropriate action to consult with workers'
representatives, to the extent required under applicable law, with respect to
the transfer of the Transferred Shares contemplated by this Agreement
(collectively, the "Required Workers' Consultations").
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4.5 REGULATORY ACTION. If, before or after the Settlement Closing, any
material Regulatory Action is taken or threatened with respect to any Settlement
Closing Matter, the Parties shall promptly meet to discuss the situation and the
action to be taken as a result, and (if such be the case) whether any
modification to the terms of this Agreement (or any agreement entered into
pursuant hereto) shall be made, in order that any requirements (whether as a
condition of giving any Regulatory Approval or otherwise) of the relevant
Regulatory Authority may be reconciled with, and within the scope of, the
business arrangements contemplated by this Agreement. The Parties shall
thereafter co-operate in giving effect to any modifications agreed upon.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF ABB LTD. ABB Ltd hereby represents
and warrants to ALSTOM as follows:
(a) ABB Ltd is duly organized, validly existing and in good
standing under the laws of Switzerland. ABB Ltd is the Parent Company of the
group of companies commonly referred to as the "ABB Group" and, without
limitation of the foregoing, of each of ▇▇▇ ▇▇, ▇▇▇ ▇▇, ▇▇▇ Asea ▇▇▇▇▇ Boveri
and ABB HV.
(b) ABB Ltd and its Subsidiaries, as applicable, have full
corporate power and authority to execute, deliver and perform this Agreement,
the ABB Ltd Ancillary Agreements and the other Settlement Documents to which it
and they are or will be a party.
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(c) The execution, delivery and performance of this Agreement, the
ABB Ltd Ancillary Agreements and the other Settlement Documents have been duly
authorized and approved by all necessary corporate action on the part of ABB Ltd
and its Subsidiaries, as applicable. This Agreement has been duly executed and
delivered by ABB Ltd, and the ABB Ltd Ancillary Agreements, and the other
Settlement Documents to which ABB Ltd and its Subsidiaries, as applicable, are
or will be a party will be duly executed and delivered by each of ABB Ltd and
its Subsidiaries, as applicable, and each constitutes (or will constitute, as
the case may be) a valid and legally binding obligation of ABB Ltd and its
Subsidiaries, as applicable, enforceable against ABB Ltd and its Subsidiaries,
as applicable, in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights generally.
(d) The execution, delivery and performance by ABB Ltd of this
Agreement do not, and the execution, delivery and performance of the ABB Ltd
Ancillary Agreements and the other Settlement Documents to which ABB Ltd and its
Subsidiaries, as applicable, are or will be a party by ABB Ltd and its
Subsidiaries, as the case may be, and the consummation of the transactions
contemplated by this Agreement, the ABB Ltd Ancillary Agreements and such other
Settlement Documents (including without limitation the sale and transfer of the
Transferred Shares contemplated by this Agreement) will not, violate the
provisions of (i) the certificate of incorporation or articles of association,
by-laws or comparable governing documents of ABB Ltd or its Subsidiaries, (ii)
any material agreement to which ABB Ltd or any of its Subsidiaries is a party or
by which any of them are bound, or (iii) any statute, law or regulation, or
order of a Regulatory Authority, applicable to ABB Ltd or its Subsidiaries.
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(e) Except as set forth on Schedule 5.1(e) hereto and any filings
required to be made in order to comply with securities law and stock exchange
requirements, no consent, approval, authorization, license or order of, or any
declaration, filing or registration with, any Regulatory Authority is required
to be made or obtained by ABB Ltd or any of its Subsidiaries in connection with
their execution, delivery and performance of this Agreement and the ABB Ltd
Ancillary Agreements.
(f) As of the date of this Agreement, there are no litigations,
actions, suits, arbitral or administrative proceedings, claims or governmental
proceedings pending or, to the knowledge of ABB Ltd, threatened against ABB Ltd
or its Subsidiaries challenging the validity of this Agreement, the ABB Ltd
Release or the Ancillary Agreements, or seeking to restrain, enjoin or otherwise
prohibit the transactions contemplated by this Agreement or the Ancillary
Agreements.
(g) ABB Ltd or its Subsidiaries has good and marketable title to
the Transferred Shares, free and clear of any Encumbrance and, with the
exception of the Shareholders Agreement and the Joint Venture Agreement, there
are no agreements, understandings or commitments which are binding upon ABB Ltd
or its Subsidiaries restricting the sale or other disposition of the Transferred
Shares. At the Settlement Closing, ABB Ltd will convey (or cause to be conveyed)
to ALSTOM (and/or its Affiliate designee(s)) good and marketable title to the
Transferred Shares, free and clear of any Encumbrance.
5.2 FURTHER REPRESENTATIONS AND WARRANTIES OF ABB LTD. ABB Ltd hereby
further represents and warrants to ALSTOM as set forth in Annex K hereto.
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5.3 REPRESENTATIONS AND WARRANTIES OF ALSTOM. ALSTOM hereby represents
and warrants to ABB Ltd as follows:
(a) ALSTOM is duly organized, validly existing and in good standing
under the laws of France. ALSTOM is the Parent Company of the group known as the
"ALSTOM Group."
(b) ALSTOM and its Subsidiaries, as applicable, have full corporate
power and authority to execute, deliver and perform this Agreement, the ALSTOM
Ancillary Agreements and the other Settlement Documents to which it and they are
or will be a party.
(c) The execution, delivery and performance of this Agreement, the
ALSTOM Ancillary Agreements and the other Settlement Documents have been duly
authorized and approved by all necessary corporate action on the part of ALSTOM
and its Subsidiaries, as applicable. This Agreement has been duly executed and
delivered by ALSTOM, and the ALSTOM Ancillary Agreements and the other
Settlement Documents to which ALSTOM and its Subsidiaries, as applicable, are or
will be a party, will be duly executed and delivered by each of ALSTOM and its
Subsidiaries, as applicable, and each constitutes (or will constitute, as the
case may be) a valid and legally binding obligation of ALSTOM and its
Subsidiaries, as applicable, enforceable against ALSTOM and its Subsidiaries, as
applicable, in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally.
(d) The execution, delivery and performance by ALSTOM of this
Agreement do not, and the execution, delivery and performance of the ALSTOM
Ancillary Agreements and other Settlement Documents to which ALSTOM and its
Subsidiaries, as applicable, are or will be
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a party, by ALSTOM and its Subsidiaries, as the case may be, and the
consummation of the transactions contemplated by this Agreement, the ALSTOM
Ancillary Agreements and such other Settlement Documents (including without
limitation the purchase and acceptance of the Transferred Shares contemplated by
this Agreement) will not, violate the provisions of (i) the certificate of
incorporation or articles of association, by-laws or comparable governing
documents of ALSTOM or its Subsidiaries, (ii) any material agreement to which
ALSTOM or its Subsidiaries are a party or by which any of them are bound, or
(iii) any statute, law or regulation, or order of a Regulatory Authority,
applicable to ALSTOM or its Subsidiaries.
(e) Except (i) for the Regulatory Approvals described in Articles
4.2 and 4.3 hereof, any filings required to be made in order to comply with
securities laws and stock exchange requirements and any filings relating to
Taxes, or (ii) as otherwise as set forth on Schedule 5.3(e) hereto, there are no
Closing Regulatory Approvals required to be obtained or made by ALSTOM or its
Subsidiaries.
(f) As of the date of this Agreement, there are no litigations,
actions, suits, arbitral or administrative proceedings, claims or governmental
proceedings pending or, to the knowledge of ALSTOM, threatened against ALSTOM or
its Subsidiaries challenging the validity of this Agreement, the ALSTOM Release
or the Ancillary Agreements, or seeking to restrain, enjoin or otherwise
prohibit the transactions contemplated by this Agreement or the Ancillary
Agreements.
5.4 REPRESENTATIONS AND WARRANTIES OF THE JC. The JC hereby represents
and warrants to each of ABB Ltd and ALSTOM as follows:
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(a) The JC is duly organized and validly existing under the laws of
The Netherlands.
(b) The JC has full corporate power and authority to execute,
deliver and perform this Agreement, the JC Release, and the other Settlement
Documents to which it is or will be a party.
(c) The execution, delivery and performance of this Agreement and
the JC Release have been duly authorized and approved by all necessary corporate
action on the part of the JC. This Agreement has been duly executed and
delivered by the JC and the JC Release will be duly executed and delivered by
the JC and each constitutes or will constitute, as the case may be, a valid and
legally binding obligation of the JC, enforceable against the JC in accordance
with its terms, except as the same may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally.
(d) The execution, delivery and performance by the JC of this
Agreement do not violate, and the execution, delivery and performance of the JC
Release by the JC will not violate, the provisions of the certificate of
incorporation or articles of association, by-laws or comparable governing
documents of the JC, the provisions of any material agreement to which the JC or
a member of the JC Group is a party or by which it is bound, or any statute,
law, regulation, or order of a Regulatory Authority, applicable to the JC.
(e) Except as set forth on Schedule 5.4(e) hereto, no consent,
approval, authorization, license or order of, or any declaration, filing or
registration with, any Regulatory Authority is required to be made or obtained
by the JC in connection with its execution, delivery and performance of this
Agreement and the JC Release.
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ARTICLE 6
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS PRECEDENT TO ABB LTD'S OBLIGATIONS. The obligation of ABB
Ltd and its Affiliates to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements is subject to the satisfaction, or waiver
by ABB Ltd in its sole discretion, at or prior to the Settlement Closing of the
following conditions:
(a) The representations and warranties of ALSTOM and the JC made in
this Agreement shall be true and correct in all material respects on and as of
the Settlement Closing Date as if the same were made on the Settlement Closing
Date (except that the representations and warranties made in Article 5.3(f)
shall be true and correct in all material respects as of the date hereof).
ALSTOM and its Affiliates shall have performed in all material respects the
respective covenants of ALSTOM and its Affiliates set forth in this Agreement
required to be performed by them on or prior to the Settlement Closing Date.
ALSTOM shall have delivered to ABB Ltd a certificate dated the Settlement
Closing Date executed by the authorized officer named in the ALSTOM Power of
Attorney confirming each of the matters set forth in the foregoing two
sentences.
(b) All consents of (and all other Regulatory Approvals to be
secured from) the relevant Regulatory Authorities of the European Union, Canada,
Switzerland and South Africa having authority for review and approval of mergers
and acquisitions and relating to the Settlement Closing Matters shall have been
obtained and shall be in full force and effect.
(c) All other Closing Regulatory Approvals shall have been made or
obtained, as the case may be, and shall be in full force and effect.
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(d) No injunction or order of any court or administrative agency of
competent jurisdiction shall be in effect as of the Settlement Closing which
restrains or prohibits the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements. No action or proceeding before any
governmental, regulatory or administrative agency, authority or commission or
any court of competent jurisdiction shall have been instituted (and be pending)
which seeks to prevent the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements.
(e) The execution and delivery of each of the ALSTOM Ancillary
Agreements, and the Ancillary Agreements to which the JC is a party, by all
parties thereto other than members of the ABB Ltd Group shall have occurred
simultaneously with the Settlement Closing hereunder.
(f) The Required Workers Consultations shall have been duly carried
out.
(g) The Powerformer License Agreement shall have been executed by
ALSTOM.
6.2 CONDITIONS PRECEDENT TO ALSTOM'S OBLIGATIONS. The obligation of
ALSTOM and its Affiliates to consummate the transactions contemplated by this
Agreement and the ALSTOM Ancillary Agreements is subject to the satisfaction, or
waiver by ALSTOM in its sole discretion, at or prior to the Settlement Closing
of the following conditions:
(a) The representations and warranties of ABB Ltd and the JC made
in this Agreement shall be true and correct in all material respects on and as
of the Settlement Closing Date as if the same were made on the Settlement
Closing Date (except that the representations
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and warranties made in Article 5.1(f) shall be true and correct in all material
respects as of date hereof). ABB Ltd and its Affiliates shall have performed in
all material respects the respective covenants of ABB Ltd and its Affiliates set
forth in this Agreement required to be performed by them on or prior to the
Settlement Closing Date. ABB Ltd shall have delivered to ALSTOM a certificate
dated the Settlement Closing Date and executed by the authorized officer named
in the ABB Powers of Attorney confirming each of the matters set forth in the
foregoing two sentences.
(b) All consents of (and all other Regulatory Approvals to be
secured from) the relevant Regulatory Authorities of the European Union, Canada,
Switzerland and South Africa having authority for review and approval of mergers
and acquisitions and relating to the Settlement Closing Matters shall have been
obtained and shall be in full force and effect.
(c) All other Closing Regulatory Approvals shall have been made or
obtained, as the case may be, and shall be in full force and effect.
(d) No injunction or order of any court or administrative agency of
competent jurisdiction shall be in effect as of the Settlement Closing which
restrains or prohibits the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements. No action or proceeding before any
governmental, regulatory or administrative agency, authority or commission or
any court of competent jurisdiction shall have been instituted (and be pending)
which seeks to prevent the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements.
(e) The execution and delivery of each of the ABB Ltd Ancillary
Agreements, and the Ancillary Agreements to which the JC is a party, by all
parties thereto other than
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members of the ALSTOM Group shall have occurred simultaneously with the
Settlement Closing hereunder.
(f) The Required Workers Consultations shall have been duly carried
out.
(g) The Powerformer License Agreement shall have been executed and
delivered by ABB Ltd or its appropriate Affiliate.
(h) The Windsor Site Lease shall have been executed and delivered
by the contemplated parties thereto, the Connecticut Form III shall have been
prepared, completed, executed and delivered as set forth in Article 4.3 hereof,
the Connecticut ECA shall have been prepared, completed, certified and delivered
as set forth in Article 4.3 hereof, and copies of all such items shall have been
delivered to ALSTOM.
6.3 CONDITIONS PRECEDENT TO THE JC'S OBLIGATIONS. The obligation of the
JC and its Affiliates to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements to which the JC and its Affiliates, as
applicable, are a party is subject to the satisfaction, or waiver by the JC in
its sole discretion, at or prior to the Settlement Closing of the following
conditions:
(a) All consents of (and all other Regulatory Approvals to be
secured from) the relevant Regulatory Authorities of the European Union, Canada,
Switzerland and South Africa having authority for review and approval of mergers
and acquisitions and relating to the Settlement Closing Matters shall have been
obtained and shall be in full force and effect.
(b) All other Closing Regulatory Approvals shall have been made or
obtained, as the case may be, and shall be in full force and effect.
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(c) No injunction or order of any court or administrative agency of
competent jurisdiction shall be in effect as of the Settlement Closing which
restrains or prohibits the consummation of the transactions contemplated under
this Agreement or the Ancillary Agreements. No action or proceeding before any
governmental, regulatory or administrative agency, authority or commission or
any court of competent jurisdiction shall have been instituted (and be pending)
which seeks to prevent the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements.
ARTICLE 7
CLOSING
7.1 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated under Articles 2 and 3 of this Agreement (the "Settlement Closing")
shall be held simultaneously at the offices of Coudert Brothers, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and at the offices of Stibbe ▇▇▇▇▇
▇▇▇▇▇▇▇ Duhot ("Stibbe"), Strawinskylaan 2001, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, at 9:00 a.m., New York time, on (a) May 10, 2000 or (b) if the
conditions (other than those requiring delivery of a certificate or other
document, or the taking of other action, at the Settlement Closing) required to
be satisfied or waived pursuant to Article 6 hereof have not been satisfied or
waived on such date, then on the first Business Day after the date of
satisfaction or waiver of the last of the conditions required to be satisfied or
waived pursuant to Article 6 hereof (other than those requiring delivery of a
certificate or other document, or the taking of other action, at the Settlement
Closing) or (c) such other date as the Parties may mutually agree or as may be
required to comply with any applicable law. At the Settlement Closing, (i)
first, the JC shall make the JC/CE Capital Contribution, (ii) second, the
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closing of the transactions contemplated by the Combustion Engineering and
Connecticut Valley Agreement (the "CE Closing") shall occur, and (iii) third,
immediately thereafter, duly authorized representatives of the Parties shall
appear before a notary of Stibbe at the offices of Stibbe, Strawinskylaan 2001,
1070 AP Amsterdam, The Netherlands, (x) to pass (and ABB Ltd shall cause the
holders of record of the Transferred Shares to pass) a notarial deed, and such
other instruments as ALSTOM reasonably may request, pursuant to which title to
all of the Transferred Shares is conveyed to ALSTOM or its designated
Affiliate(s) and (y) to execute and deliver (and ABB Ltd shall cause the holders
of record of the Transferred Shares to execute and deliver) such further
instruments, if any, as may be necessary to effect or record such sale and
transfer of the Transferred Shares. The date on which the Settlement Closing
shall occur is hereinafter referred to as the "Settlement Closing Date."
7.2 DELIVERIES BY ABB LTD. At the Settlement Closing, immediately after
the CE Closing, ABB Ltd shall deliver (or cause to be delivered) to ALSTOM the
following:
(a) The certificate of ABB Ltd required to be delivered pursuant to
Article 6.2(a).
(b) The notarial deed(s), and other instruments, with respect to
the Transferred Shares described in Article 7.1.
(c) Executed counterparts of the ABB Ltd Ancillary Agreements, duly
signed by ABB Ltd and/or its Subsidiaries, as applicable.
(d) The executed ABB Ltd Release.
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(e) Resignations, effective as of the Settlement Closing Date, of
the Supervisory Directors B from the Supervisory Board of the JC.
(f) Evidence of payment of (i) the ABB Ltd/JC Payment, in
accordance with the ALSTOM Wire Transfer Instructions, (ii) the ABB Ltd/AAP Inc.
Payment, to the account specified pursuant to Section 2.3(c) and (iii) the ABB
Ltd/ALSTOM Adjustment Payment in accordance with Article 3.6.
(g) Evidence of making of the ABB Ltd/CE Capital Contribution.
7.3 DELIVERIES BY ALSTOM. At the Settlement Closing, immediately after
the CE Closing, ALSTOM shall deliver (or cause to be delivered) to ABB Ltd the
following:
(a) The certificate of ALSTOM required to be delivered pursuant to
Article 6.1(a).
(b) Executed counterparts of the Ancillary Agreements, duly signed
by ALSTOM and/or its Subsidiaries, as applicable.
(c) The executed ALSTOM Release.
(d) Evidence of payment of the Purchase Price, in accordance with
the ABB Ltd Wire Transfer Instructions.
7.4 DELIVERIES BY THE JC. At the Settlement Closing, immediately after
the CE Closing, the JC shall deliver to each of ABB Ltd and ALSTOM the
following:
(a) Executed counterparts of the Ancillary Agreements to which the
JC is a party, duly signed by the JC.
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(b) The executed JC Release.
(c) The original shareholders register of the JC, to be delivered
to the notary of Stibbe before whom the deed of transfer of the Transferred
Shares will be passed, for the purpose of entry of the transfer of the
Transferred Shares into the register.
(d) Evidence of the making of the JC/CE Capital Contribution.
7.5 DELAYED CLOSING. In the event the Settlement Closing is delayed or
postponed to a date after May 10, 2000, as the result of the failure to have
obtained the consents (including the expiry of any period following a
notification such that consent is deemed to be given or no consent is required)
of the competition and/or anti-trust authorities described in Article 4.2 hereof
(ABB Ltd having performed all of its obligations hereunder in connection with
seeking such consents) or otherwise through no fault on the part of ABB Ltd,
then the Purchase Price (less the sum of the amount of the ABB Ltd/JC Payment
and the ABB Ltd/ALSTOM Adjustment Payment) shall accrue interest at the rate of
five percent (5%) per annum from and after May 11, 2000 to (but excluding) the
Settlement Closing Date, which accrued interest shall be payable by ALSTOM to
ABB Ltd at the Settlement Closing, together with the Purchase Price, to the
account designated in the ABB Ltd Wire Transfer Instructions.
ARTICLE 8
COVENANTS
8.1 COVENANTS PENDING SETTLEMENT CLOSING. From the date hereof until the
Settlement Closing Date, the Parties covenant and agree as follows:
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(a) ORDINARY COURSE. The JC shall conduct its business only in the
ordinary course consistent with past business practices and procedures. Without
limiting the foregoing, ABB Ltd and ALSTOM shall not cause or permit any
dividends or other distributions to be made by the JC prior to the Settlement
Closing. ABB Ltd shall not, and shall forthwith after the date hereof issue
instructions to each member of its Group not to, enter into any new Contract
with any member of the JC Group without the prior written consent of ALSTOM,
other than Contracts in the ordinary course and having (i) a duration of less
than three (3) months and (ii) a value over their term of less than Three
Million Dollars ($3 million). Notwithstanding anything in this Agreement to the
contrary, the provisions of the Joint Venture Agreement and the Shareholders
Agreement shall continue to be fully applicable until such time as the
Settlement Closing occurs; provided, however, that (i) the Parties agree that
the JC Group shall not have any obligation to accept any Non-Listed ABB Ltd
Post-Settlement Closing Transferred Assets (and any associated Liabilities or
employees) prior to the earlier of the Settlement Closing or the termination of
this Agreement, (ii) the Parties agree that neither the JC Group nor the ALSTOM
Group shall in any event be required to take any action pursuant to Article 5.9
of, or Annex K to, the Joint Venture Agreement that they would not be obligated
to take under Article 11.3 of, or Annex F to, this Agreement, and (iii) ABB Ltd
covenants that any transfer of ABB Ltd Post-Settlement Closing Transferred
Assets after the date hereof and prior to the Settlement Closing shall (without
limitation) be made in accordance with the provisions of Articles 10 and 11
hereof (including, without limitation, the requirement that such transfers be
made with economic effect from January 1, 1999), as if such transfers were being
made after the Settlement Closing Date.
(b) REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement, each of the Parties will take or cause to be taken all commercially
reasonable steps
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necessary or desirable, and will proceed diligently and in good faith, in each
case at its own cost and expense, to satisfy each Settlement Closing condition
contained in this Agreement and to consummate the transactions contemplated by
this Agreement and the Ancillary Agreements.
(c) POWERFORMER LICENSE; WINDSOR SITE LEASE. ALSTOM and ABB Ltd
shall negotiate the definitive forms of the Powerformer License Agreement and
the Windsor Site Lease in good faith, provided that the definitive forms of the
Powerformer License Agreement and the Windsor Site Lease shall be consistent in
all respects with the term sheets therefor attached hereto as Exhibits I and K.
(d) RELEASES. Subject to clauses (i) and (ii) to the proviso set
forth in Section 8.1(a), each of ABB Ltd and ALSTOM shall not knowingly take or
omit to take, and shall procure that no member of its Group knowingly takes or
omits to take, any action, which action or omission would or is reasonably
likely to constitute, or give rise to, a "Claim" or "Liability", as such terms
are defined in the ALSTOM Release or the JC Release (in the case of ABB Ltd) or
the ABB Ltd Release (in the case of ALSTOM).
8.2 COVENANTS POST SETTLEMENT CLOSING. From and after the Settlement
Closing Date, the Parties covenant and agree as follows:
(a) CO-OPERATION; FURTHER ASSURANCES. The Parties shall without
further consideration reasonably cooperate with each other, and shall cause
their respective Affiliates, officers, employees, agents, accountants and
representatives to reasonably cooperate with each other, to ensure the orderly
completion of the transactions contemplated hereby and by the Ancillary
Agreements. Without limiting the foregoing, ABB Ltd shall, and shall cause its
Affiliates to, provide all information reasonably necessary for members of the
ALSTOM Group
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or the JC Group to complete the Regulatory Approvals to be made or obtained by
them after the Settlement Closing Date.
(b) EXECUTION OF ADDITIONAL DOCUMENTS. Without further
consideration, from time to time, as and when requested by any Party, the
Parties shall execute and deliver, or cause to be executed and delivered, to the
other Parties all such documents and instruments, and shall take, or cause to be
taken, all such further or other actions, as the first Party may reasonably deem
necessary or desirable to consummate, or evidence the consummation of the
transactions contemplated by this Agreement or the Ancillary Agreements or under
the Joint Venture Agreement (including, without limitation, by effecting
transfers of title of record).
(c) ACCESS AFTER CLOSING. Each of the Parties agrees to retain or
cause to be retained all accounting, business, litigation, financial and tax
records (including, without limitation, work papers) in its possession (i)
relating to the JC, the ABB Ltd Business and the ALSTOM Business in existence on
the Settlement Closing Date, or (ii) coming into existence after the Settlement
Closing Date which relate to the JC, the ABB Ltd Business and the ALSTOM
Business prior to the Settlement Closing Date (the "Business Documents"), in
each case for a period of six (6) years from the Settlement Closing Date (or,
for records relating to a Tax Return, the later of the expiration of the
relevant statute of limitations or six (6) years from the date such Tax Return
was filed). In addition, from and after the Settlement Closing Date, the Parties
agree that, subject to receiving appropriate written assurances of
confidentiality and restrictions on use, each will not unreasonably refuse to
provide, after reasonable notice and during normal business hours, access to and
copies of (prepared at such requesting Party's expense) such Business Documents
as are necessary to properly prepare for, file, prove, answer, prosecute and/or
defend any financial statements, any Tax Return, any other filing, audit,
judicial
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or administrative proceeding relating to Taxes, or any third party protest,
claim, suit, inquiry or other proceeding by any third party against such Party
or any of its Affiliates. The Party requesting assistance hereunder shall
reimburse the other Parties for any reasonable out-of-pocket costs incurred by
such Parties.
(d) CHANGE OF CORPORATE NAME. Prior to the first anniversary of the
Settlement Closing Date, ALSTOM shall (i) take all steps necessary to cause the
ABB Ltd Marks to be deleted from the corporate names of all entities of the JC
Group and (ii) shall cease using the name "ABB" or "Asea ▇▇▇▇▇ Boveri" in
connection with any product names, product marks, trade names, brochures,
labels, logos, internet domain names, e-mail addresses or other documentation
except as may be specifically provided in a separate trademark or trade name
license agreement. Pending such first anniversary, the JC Group shall have the
right to continue to use the ABB Ltd Marks subject to the terms of the Name
License Agreement and the Trademarks License Agreement, each to be entered into
as of the Settlement Closing Date between ABB Asea ▇▇▇▇▇ Boveri and ALSTOM
(together, the "ABB Ltd Marks License Agreements").
(e) TAX ADJUSTMENTS. ALSTOM agrees that in the event of any
adjustment by any Taxing Authority to the earnings and profits of the JC for the
taxable year ending December 31, 1999, ALSTOM shall consult in advance with ABB
Ltd and shall afford ABB Ltd reasonable opportunity to participate in the
process of resolving such proposed adjustments with such Taxing Authority.
(f) JC FUNDS. Without limiting any other provision hereof, ABB Ltd
covenants and agrees that any funds or other assets received by ABB Ltd or its
Affiliates before
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or after the Settlement Closing which constitute Assets of the JC or any member
of the JC Group shall from and after the Settlement Closing be held on behalf of
and for the benefit of the JC until remitted to the JC, and the same shall be
promptly remitted to the JC (or as otherwise directed by the JC) free and clear
of any Encumbrance.
8.3 FINANCIAL REPORTING COVENANT. ALSTOM, ABB and the JC shall use their
best efforts to resolve all issues necessary for the preparation and
finalization of the audited year end financial statements for the JC Group, for
the period ending December 1999. ALSTOM and (through the Settlement Closing
Date) ABB Ltd shall procure that the Management Board shall (i) provide ABB Ltd
in a timely manner (assuming receipt of reasonable advance notice) with such
audited and non-audited (or required) financial statements of the JC as may be
necessary to permit ABB Ltd to prepare its audited or non-audited yearly,
half-yearly or quarterly results or consolidated financial statements for the
periods ending with the most recently concluded quarter prior to the Settlement
Closing Date, and such statements shall be in a format reasonably requested by
ABB Ltd to enable ABB Ltd to prepare such financial statements in accordance
with IAS or US GAAP reporting requirements, and (ii) deliver to ABB Ltd prior to
the Settlement Closing the audited year-end 1999 financial statements for the JC
Group, prepared in accordance with US GAAP. In addition, ALSTOM shall use all
reasonable endeavors to procure that, for a period of twelve (12) months
following the Settlement Closing Date, the Management Board shall prepare and
deliver to ABB Ltd upon request by ABB Ltd (and at ABB Ltd's cost), as soon as
practicable following such request, additional information concerning the JC
Group which information (1) (i) relates to the time during which any member of
the ABB Ltd Group was a shareholder of the JC or (ii) is with respect to any
continuing contractual obligations between members of the JC Group and members
of the ABB Ltd Group, and (2) is required by
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ABB Ltd under applicable law or stock exchange listing agreements or regulations
in connection with any financial disclosure or any new stock exchange listing or
offering of securities by ABB Ltd or any member of its Group.
ARTICLE 9
NATURE OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION
9.1 NATURE OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants of the Parties in this Agreement
(including, without limitation, the representations and warranties of ABB Ltd
made in Annex K hereto), shall survive the Settlement Closing for a period of
ten (10) years (or until such earlier date as may specifically be provided in
Annex K in relation to specific Warranties), and shall not be affected in any
respect by the Settlement Closing or any investigation conducted by either
Party, or any of its Affiliates, prior to, on or after the date hereof, or any
information which either Party, or any of its Affiliates, may have received or
receive prior to, on or after the date hereof.
9.2 INDEMNITIES. Annex E sets forth the indemnity obligations of the
Parties.
ARTICLE 10
CONTRIBUTION OF ABB LTD POST-SETTLEMENT CLOSING TRANSFERRED ASSETS TO THE JC
10.1 CONTRIBUTION; ASSUMPTION OF LIABILITIES. Subject to the terms and
conditions of this Agreement (including without limitation Article 10.5 hereof),
ABB Ltd shall procure that from and after the Settlement Closing Date, ABB Ltd
and its Subsidiaries shall directly or indirectly contribute or transfer (or
cause to be contributed or transferred), as the case may be, to
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members of the JC Group designated by the JC all of the ABB Post-Settlement
Closing Transferred Assets and the JC shall have the obligation to accept (or
cause a member of the JC Group to accept) such ABB Ltd Post-Settlement Closing
Transferred Assets and upon such transfer (of an Asset other than an
undertaking) to assume (or cause a member of the JC Group to assume) all of the
Liabilities of the ABB Ltd Business (other than ABB Ltd Excluded Liabilities)
associated with (a) such ABB Ltd Post-Settlement Closing Transferred Assets, and
(b) (subject to the provisions of Annex F hereto) all employees predominantly
dedicated to the ABB Ltd Business and associated with such ABB Ltd
Post-Settlement Closing Transferred Assets, all of the foregoing with economic
effect from and including January 1, 1999. It is understood that Liabilities of
ABB Ltd Post-Settlement Closing Transferred Assets that are undertakings as a
matter of law remain Liabilities of such undertakings.
10.2 METHOD OF TRANSFER. From and after the Settlement Closing Date, the
contributions of the ABB Ltd Post-Settlement Closing Transferred Assets, and the
Liabilities of the ABB Ltd Business and employees associated therewith (as
described in Article 10.1), to the JC shall (unless otherwise agreed by ALSTOM
and ABB Ltd) be made as soon as practicable after the date hereof through the
medium of transferring ownership of such ABB Ltd Post-Settlement Closing
Transferred Assets (or of ABB Ltd Transferred Companies directly or indirectly
owning such ABB Ltd Post-Settlement Closing Transferred Assets) to member
companies of the JC Group nominated for such purpose by the JC. Anything in the
preceding sentence to the contrary notwithstanding, ABB Ltd agrees that both
before and after the Settlement Closing, to the extent that any ABB Ltd
Post-Settlement Closing Assets in the countries listed in Part C of Annex B are
to be contributed through an undertaking, such undertaking must be among those
referenced by a code number in the Solver Consolidation
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Report attached to Part C of Annex B. With respect to each transfer of ABB Ltd
Post-Settlement Closing Transferred Assets, ABB Ltd shall procure the transfer
to the JC of the ABB Post-Settlement Closing Transferred Assets pursuant to, and
shall deliver to the JC, such duly executed instruments of transfer in favor of
the JC or its designated Affiliate as the JC or ALSTOM reasonably shall direct
together with the relevant share certificates (if any).
10.3 NO ENCUMBRANCES. ABB Ltd shall ensure that none of the ABB Ltd
Post-Settlement Closing Transferred Assets are subject to any Encumbrance, other
than Permitted Encumbrances.
10.4 IDENTITY OF ABB LTD POST-SETTLEMENT CLOSING TRANSFERRED ASSETS. As
of the date hereof, each of ALSTOM and ABB Ltd acknowledges and agrees that it
is not aware of any material ABB Ltd Post-Settlement Closing Transferred Assets,
other than the ABB Ltd Business that is conducted or located in the countries
identified in Part C of Annex B, or of any material undisclosed Liabilities
associated with any of such Assets.
10.5 NON-LISTED ABB LTD POST-SETTLEMENT CLOSING TRANSFERRED ASSETS. (a)
In the event of any ABB Ltd Post-Settlement Closing Transferred Assets which are
not included within the ABB Ltd Business conducted or located in the countries
identified in Part C of Annex B hereto (the "Non-Listed ABB Ltd Post-Settlement
Closing Transferred Assets"), ABB Ltd shall transfer title to such Non-Listed
ABB Ltd Post-Settlement Closing Transferred Assets to the JC and the JC shall
accept such Non-Listed ABB Ltd Post-Settlement Closing Transferred Assets and
(in the case of Assets other than undertakings) assume all of the Liabilities of
the ABB Ltd Business (other than ABB Ltd Excluded Liabilities) associated (i)
with such Non-Listed ABB Ltd Post-Settlement Closing Transferred Assets and (ii)
(subject to the provisions of Annex F
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hereto) all employees predominantly dedicated to the ABB Ltd Business and
associated with such Non-Listed ABB Ltd Post-Settlement Closing Transferred
Assets, provided the net asset value of such Non-Listed ABB Ltd Post-Settlement
Closing Transferred Assets and associated Liabilities, calculated in accordance
with US GAAP, is at least equal to zero. In determining the net asset value,
full reserves shall be made for all contingent Liabilities associated with such
Assets. In the event such net asset value (as so determined) of any such
Non-Listed ABB Ltd Post-Settlement Closing Transferred Asset is less than zero
and ALSTOM informs ABB Ltd that it has elected to reject such Non-Listed ABB Ltd
Post-Settlement Closing Transferred Asset, then ABB Ltd shall be free to deal
with or dispose of such Non-Listed ABB Ltd Post-Settlement Closing Transferred
Asset as it deems appropriate. ALSTOM shall be deemed to have informed ABB Ltd
of its election to reject a particular Non-Listed ABB Ltd Post-Settlement
Closing Transferred Asset, as described above, if ALSTOM fails, within thirty
(30) days of having been informed in writing (and in reasonable detail) by ABB
Ltd of the existence of such Non-Listed ABB Ltd Post-Settlement Closing
Transferred Asset, to inform ABB Ltd that it has elected to accept such Asset.
Any notice by ABB Ltd or ALSTOM referred to in the preceding sentence shall be
effective only if it expressly references this Article 10.5(a).
(b) DISPOSAL OF CERTAIN ABB LTD ASSETS. The Parties acknowledge and
agree that the ABB Ltd Business in the countries identified in Schedule 10.5(b)
(the "Disposable Assets") has not and shall not be transferred to the JC Group.
ABB Ltd shall dispose of such Disposable Assets (and Liabilities thereof) in its
sole discretion, provided ABB Ltd shall account for all proceeds from the sale
of such Disposable Assets and, after deduction of all reasonable costs incurred
by ABB Ltd or its Affiliates in disposing of such Disposable Assets, thereafter
pay to ALSTOM or its designated Affiliate seventy percent (70%) of the remaining
proceeds and
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ABB Ltd shall retain the balance thereof, which shall be taken into account in
the determination of any amount due under Article 10.6; provided, however, that
ABB Ltd shall be liable for any losses in the aggregate resulting from such
disposals. All Liabilities associated with any Disposable Assets shall be deemed
to constitute "Non-Business Liabilities" with respect to ABB Ltd for all
purposes of this Agreement and an "ABB Ltd Excluded Liability" for all purposes
of this Agreement.
(c) Nothing in this Article 10 shall obligate the JC to accept the
transfer, directly or indirectly, to a member of the JC Group of any shares or
other equity interest in any undertaking other than an ABB Ltd Transferred
Company referenced (by code number) in the Solver Consolidation Report attached
to Part C of Annex B. If any ABB Ltd Post-Settlement Closing Transferred Asset
(including without limitation any ABB Ltd Transferred Company) directly or
indirectly includes such shares or other equity interest, the JC shall have the
absolute right to transfer such shares or other equity interest back to ABB Ltd
and all liabilities of such undertaking (other than those constituting
Liabilities of the ABB Ltd Business) shall at all times be deemed to constitute
Non-Business Liabilities with respect to ABB Ltd and an "ABB Ltd Excluded
Liability" for all purposes of this Agreement.
10.6 RECONCILIATION FOR POST-SETTLEMENT CLOSING TRANSFERS. On or after
▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇ Ltd shall prepare and submit to the JV a reconciliation
statement (the "Reconciliation Statement") setting forth all Post-Closing
Transferred Assets (as defined in the Joint Venture Agreement) other than shares
of ABB Ltd Transferred Companies, that have been directly or indirectly conveyed
or transferred to the JC Group by the ABB Ltd Group since the Closing (the
"Transferred Assets"), and the net equity value of each Transferred Asset as at
the date of conveyance or transfer to the JC Group (the "Transfer Date Net
Equity"), which net equity value
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shall be calculated in accordance with the principles applied in the Joint
Venture Agreement for valuing Post-Closing Transferred Assets. To the extent the
Transfer Date Net Equity Values exceed the net equity values of such Transferred
Assets as of December 31, 1998 set forth in Exhibit L hereto (the "1998 Net
Equity Values"), ABB Ltd shall pay immediately to the JC such excess amount, in
accordance with the payment instructions contained in the Reconciliation
Statement. To the extent the Transfer Date Net Equity Values are less than the
1998 Net Equity Values for such Transferred Assets (it being understood and
agreed that if any Transfer Date Net Equity Value otherwise would be negative,
it shall nonetheless be deemed to equal zero for purposes of this Article 10.6),
the JC shall pay immediately such difference to ABB Ltd. In preparing the
Reconciliation Statement, ABB Ltd shall include the amounts previously paid to
ALSTOM or the JC Group with respect to any Post-Settlement Closing Transferred
Assets disposed of in accordance with Article 10.5(b) as part of the calculation
of the Transfer Date Net Equity Values.
10.7 INFORMATION. To the extent any member of the ABB Ltd Group is
engaged in the daily management of an ABB Ltd Post-Settlement Closing Asset, ABB
Ltd shall provide ALSTOM or the JC, or its authorized representatives, after
reasonable notice and during normal business hours, with access to such books,
records and personnel of the ABB Ltd Group concerning such ABB Ltd
Post-Settlement Closing Transferred Asset as ALSTOM or the JC, respectively, may
reasonably request from time to time.
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ARTICLE 11
PRINCIPLES APPLICABLE TO THE ABB LTD POST-SETTLEMENT CLOSING TRANSFERRED ASSETS
11.1 CONTRACTS AND CONSENTS. (a) Without limiting Article 10, subject
to clauses (b) through (e) of this Article 11.1, ABB Ltd shall procure that (to
the extent that this is not already the case) the appropriate companies within
the ABB Ltd Transferred Companies or the JC Group, as the case may be, become
entitled to the economic benefit (subject to the relative burdens) of the ABB
Ltd Business Contracts that form part of the ABB Ltd Post-Settlement Closing
Transferred Assets, and that in relation to the other contracting parties
thereto such members of the ABB Ltd Transferred Companies or the JC Group, as
the case may be, assume the obligations and become entitled to the rights
thereunder, with economic effect from and including January 1, 1999.
(b) ABB Ltd shall use all reasonable efforts to procure and deliver
to the JC as soon as practicable (to the extent that they have not already been
obtained) all assignments, novations, consents, approvals, waivers and the like
necessary, in respect of all ABB Ltd Business Contracts comprising part of the
ABB Ltd Post-Settlement Closing Transferred Assets, to ensure that all such ABB
Ltd Business Contracts may be directly or indirectly, as the case may be,
transferred to the JC Group as contemplated by this Agreement without resulting
in any Default thereunder (collectively, the "ABB Ltd Business Contracts
Transfer Consents"). The JC shall not be required to accept any transfer (direct
or indirect) of any ABB Ltd Business Contracts comprising part of the ABB Ltd
Post-Settlement Closing Transferred Assets unless and until all ABB Ltd Business
Contracts Transfer Consents required in connection therewith have been obtained
and provided to the JC.
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(c) The provisions of clause (b) shall not apply in any case in
which ALSTOM, following full consultation with ABB Ltd, considers that there is
a serious risk that to apply them could result in the counterparty treating the
ABB Ltd Business Contract as repudiated and so notifies ABB Ltd.
(d) Subject to Article 10.5, with respect to any particular ABB Ltd
Business Contract comprising part of the ABB Ltd Post-Settlement Closing
Transferred Assets, (i) ABB Ltd shall procure that the member of the ABB Ltd
Group (present or former) which is a party thereto (the "Transferor") shall
receive the benefits of such ABB Ltd Business Contract as agent for the JC and
shall accordingly pay the JC forthwith upon receipt any sums received by it
under such ABB Ltd Business Contract, and (ii) the JC shall procure that a
member of the JC Group shall, at its own cost and for its own benefit, perform
the obligations and assume the reasonable costs of the Transferor under such
Contract or any related Contract for the performance thereof. Subject to Article
10.5, if and when (in the case of any ABB Ltd Business Contract to be directly
assigned to the JC) the ABB Ltd Business Contract Transfer Consents necessary
for such ABB Ltd Business Contract to be assigned to the JC Group are obtained,
such ABB Ltd Business Contract shall so be assigned to the member company of the
JC Group as the JC shall designate, which shall assume the obligations of the
Transferor thereunder. The provisions of this Article 11.1(d) (other than the
immediately preceding sentence) shall not apply in any case in which ALSTOM,
following full consultation with ABB Ltd, considers that there is a serious risk
that to apply them would result in the counterparty treating the ABB Ltd
Business Contract as repudiated and so notifies ABB Ltd.
(e) Subject to Article 10.5, if any necessary ABB Ltd Business
Contract Transfer Consent is refused and the procedure set out in Article
11.1(d) does not enable the full
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benefit of the relevant ABB Ltd Business Contract to be enjoyed by the JC, ABB
Ltd shall, to the extent reasonably practicable, seek an alternative solution
pursuant to which a member of the JC Group designated by the JC shall both
receive the full benefits thereof and assume the relative obligations
thereunder.
(f) So long as ABB Ltd is in compliance with its obligations under
this Article 11 with respect to any ABB Ltd Business Contract in respect of
which the necessary ABB Ltd Business Contract Transfer Consent has not been
obtained, ABB Ltd shall not be in breach of its obligations under Article 10.1
with respect to such ABB Ltd Business Contract.
11.2 INTELLECTUAL PROPERTY. At and after the Settlement Closing, the
provisions set out in Annex D shall apply and, with respect to the subject
matter thereof, shall prevail over any conflicting provision of this Agreement
and rights granted thereunder shall continue in full force and effect; provided,
that
(a) to the extent ABB Ltd has made or makes available to the JC
prior to the Settlement Closing Date its laboratory units conducting research
and development under a corporate pooled scheme for the ABB Ltd Business and
other members of the ABB Ltd Group, then (i) either ABB Ltd or the JC may give
eighteen (18) months' notice of termination of such arrangements, from and after
the Settlement Closing, and (ii) ALSTOM shall be entitled to a license in
respect of all Intellectual Property Rights developed by such laboratory units
heretofore or hereafter up to the date that is eighteen (18) months after the
termination date described above in this sentence, for use in the Field, and the
terms of such license shall be the same as apply to licenses granted under
Article 5.1 as set forth in Annex D;
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(b) the use of the ABB Ltd Marks shall, unless otherwise agreed
between ALSTOM and ABB Ltd, be subject to the terms and conditions of the ABB
Ltd Marks License Agreements; and
(c) for the avoidance of doubt, ABB Ltd, on behalf of itself and
its present and (to the extent applicable) past Subsidiaries, hereby
acknowledges, confirms and agrees that all Intellectual Property Rights and
Know-How emanating or derived from research and development conducted pursuant
to the terms of Article 8.2 of the Shareholders Agreement shall be owned
exclusively by the JC upon consummation of the transfer of the Transferred
Shares pursuant hereto, provided the JC shall grant licenses with respect
thereto to ABB Ltd and/or its designated Subsidiaries in accordance with the
terms of Annex D hereto. ABB Ltd agrees that, promptly upon request of ALSTOM
after the Settlement Closing Date, it shall execute and deliver, and procure the
execution and delivery by other past or present Affiliates of ABB Ltd, of an
instrument, in form and substance reasonably satisfactory to ALSTOM, confirming
ownership of such Intellectual Property Rights and Know-How by the JC, as set
forth above in the preceding sentence.
11.3 EMPLOYEES; EMPLOYEE BENEFITS AND PENSIONS MATTERS. From and after
the Settlement Closing, the provisions set out in Annex F shall apply to
employee, employee benefits and pensions matters, and shall prevail over any
conflicting provision of this Agreement.
11.4 CERTAIN REAL ESTATE. From and after the Settlement Closing, the
provisions set out in Annex G shall apply to the real estate described therein
and, with respect to the subject matter thereof, shall prevail over any
conflicting provision of this Agreement except as otherwise specified in Annex
E.
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11.5 EXISTING CONTRACTS BETWEEN ABB LTD GROUP AND THE JC GROUP. (a) The
Parties acknowledge that members of the JC Group (or ABB Ltd Transferred
Companies included in the ABB Ltd Post-Settlement Closing Transferred Assets)
are parties to Contracts with various persons who, at the time such Contracts
were entered into, were members of the ABB Ltd Group (any such Contract, a
"JC/ABB Contract"). If any such JC/ABB Contract (i) is on a commercial
arms-length basis and was entered into prior to the Closing (or, in the case of
any JC/ABB Contract associated with any ABB Ltd Post-Closing Transferred Asset,
the date of the direct or indirect transfer of such Transferred Asset to the JC
Group) or (ii) was entered into after the Closing, (or, in the case of any
JC/ABB Contract associated with any ABB Ltd Post-Closing Transferred Asset, the
date of the direct or indirect transfer of such Transferred Asset to the JC
Group) then in either case, ALSTOM shall not have any special right under this
Article 11.5(a) to terminate such JC/ABB Contract. Subject to the preceding
sentence, ABB Ltd agrees, on its behalf and on behalf of the other present or
(to the extent applicable, past) members of the ABB Ltd Group, that ALSTOM shall
have the right to terminate any such JC/ABB Contract upon not less than three
(3) months prior written notice to ABB Ltd, and ABB Ltd shall, upon request of
ALSTOM, procure that the relevant present or, to the extent feasible, past
member of the ABB Ltd Group enter into an instrument acknowledging any such
termination, provided that the JC thereupon shall be obligated to reimburse the
relevant present or past member of the ABB Ltd Group for any reasonable expenses
that it incurs as a direct result of such early termination and which would not
have been incurred if such JC/ABB Contract had expired in accordance with its
existing terms.
(b) ABB Ltd, on its behalf and on behalf of the other present or
(to the extent applicable, past) members of the ABB Ltd Group, hereby covenants
to ALSTOM and the JC
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that, any term of any JC/ABB Contract, or any ABB Ltd Business Guarantee in
respect of any ABB Ltd Financial Institution Guarantee, to the contrary
notwithstanding, the consummation of the transactions contemplated by this
Agreement shall not result in any Default or ABB Ltd Financial Instrument
Default, respectively, under any JC/ABB Contract, or any ABB Ltd Business
Guarantee in respect of any ABB Ltd Financial Institution Guarantee, and
(without limitation of the foregoing) hereby irrevocably waives any provision of
any JC/ABB Contract, or any ABB Ltd Business Guarantee in respect of any ABB Ltd
Financial Institution Guarantee, that otherwise would give rise to any such
Default or ABB Ltd Financial Instrument Default, respectively. ABB Ltd shall,
upon request of ALSTOM, procure that the relevant present or past member of the
ABB Ltd Group enter into an instrument acknowledging the foregoing.
(c) Subject to Article 11.5(a), on expiry or termination of any
JC/ABB Contract, ABB Ltd shall, at the reasonable request of the JC, use its
best endeavors to procure that such JC/ABB Contract is extended or renewed on a
commercial arm's-length basis, provided the ABB Ltd Group is still in the
business of supplying such service (or itself provides such service within the
ABB Ltd Group) and maintains adequate personnel and resources to do so and
provided further that such extension or renewal, unless otherwise agreed by the
Parties, shall not exceed a period of two (2) years.
(d) For the avoidance of doubt, as used in this Article, the term
"JC/ABB Contract" shall include any arrangement in existence as of the date
hereof pursuant to which a member of the ABB Ltd Group provides services to any
member of the JC Group, even if such arrangement is an "at will" arrangement. To
the extent a JC/ABB Contract provides for (i) legal services, tax advice or data
processing services or (ii) internet-related services, in each case to be
provided by the ABB Ltd Group (collectively, the "JC/ABB Service Contracts"),
such JC/ABB
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Service Contracts shall be continued on the then existing terms and conditions
for a reasonable transition period following the Settlement Closing not to
exceed six (6) months with respect to the services described in (i) and three
(3) months with respect to the services described in (ii), unless otherwise
terminated earlier by ALSTOM. In all events, from and after the Settlement
Closing, ALSTOM and the JC Group shall not have access under any existing JC/ABB
Contract or JC/ABB Service Contract to business secrets or information of the
ABB Ltd Group not related to the ABB Ltd Business, including, without
limitation, calculation models and source codes.
(e) Nothing in this Article 11.5(c) or (d) shall obligate any
member of the ABB Ltd Group to provide any service or maintain any operations
that it has otherwise determined to exit or terminate, provided that nothing in
this sentence limits or qualifies any obligation of the ABB Ltd Group under any
existing JC/ABB Contract.
11.6 GUARANTEES. (a) At the request of ALSTOM in writing, ABB Ltd shall
grant any guarantees or counter-indemnities to third parties as shall be
reasonably necessary to secure the ABB Ltd Business Contracts Transfer Consents
(the "ABB Ltd Business Contracts Guarantees"). ALSTOM and the JC shall indemnify
ABB Ltd and any member of the ABB Ltd Group in accordance with the indemnity
obligations set forth in Annex E with respect to such ABB Ltd Business Contracts
Guarantees.
(b) From and after the Settlement Closing, the JC shall promptly,
in co-ordination with ABB Ltd, offer to substitute itself for members of the ABB
Ltd Group under any ABB Ltd Business Guarantee and ABB Ltd Business Contracts
Guarantee. If the beneficiary of any such ABB Ltd Business Guarantee or ABB Ltd
Business Contract Guarantee, as the case may be, does not accept the JC in
substitution, ALSTOM shall cause ALSTOM Holdings S.A. to
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offer to substitute itself for the applicable member of the ABB Ltd Group under
such ABB Ltd Business Guarantee or ABB Ltd Business Contract Guarantee, as the
case may be; provided, however, that ABB Ltd shall procure that no member of the
ABB Ltd Group shall disclose to such counterparty ALSTOM's commitment under this
sentence without ALSTOM's prior written consent. Neither the JC nor ALSTOM shall
be under any obligation to offer any consideration to any counterparty under any
ABB Ltd Business Guarantee or ABB Ltd Business Contract Guarantee in order to
induce it to agree to the substitution described above. A list of such ABB Ltd
Business Guarantees (to ABB Ltd's knowledge) is set forth in Annex J. ALSTOM's
and the JC's obligations under this Article 11.6 are irrespective of whether or
not all ABB Ltd Business Guarantees are listed in Annex J, provided that the
listing of an item in Annex J does not mean that the JC or ALSTOM acknowledges
or agrees that such item in fact falls within the definition of "ABB Ltd
Business Guarantee". Before being obligated to offer to substitute ALSTOM
Holdings S.A. under any instrument as provided above in this Article 11.6, the
JC or ALSTOM, as the case may be, shall be entitled to be provided with a
reasonable prior opportunity to review the instrument and the documents setting
forth, or otherwise relating to, the obligations guaranteed thereunder. In any
event, if the Settlement Closing occurs, each of ALSTOM and the JC shall
indemnify and hold harmless ABB Ltd and any member of the ABB Ltd Group in
accordance with the indemnity obligations set forth in Annex E with respect to
such ABB Ltd Business Guarantees.
(c) Except as expressly set forth in Article 11.6(a), ABB Ltd shall
not be obligated to grant any guarantees or counter-indemnities to third parties
in connection with the transactions contemplated by this Agreement.
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11.7 INVESTMENT PROJECTS. From and after the Settlement Closing, the
provisions set out in Annex H shall apply to investment projects and, with
respect to the subject matter thereof, shall prevail over any conflicting
provisions of this Agreement.
11.8 TRANSFER OF TITLE. Subject (to the extent applicable) to Article
10.5(b), as soon as practicable after the date hereof, ABB Ltd shall, at its
cost, procure that legal title to all Assets beneficially owned by the JC Group
but held of record by, or otherwise in the name of, a member of the ABB Ltd
Group (other than, for the avoidance of doubt, any ABB Ltd Post-Settlement
Closing Transferred Assets) shall be transferred into the name of a member of
the JC Group, or other designee, specified by the JC, provided that with respect
to patents, legal title shall be re-registered only to the extent requested by
ALSTOM and any costs associated with such re-registration of title shall be
shared one-third by ALSTOM and two-thirds by ABB Ltd.
ARTICLE 12
PROVISIONS RELATING TO ABB LTD POST-SETTLEMENT CLOSING TRANSFERRED ASSETS
12.1 CONDUCT OF BUSINESS IN THE ORDINARY COURSE. Except for action taken
in the ordinary and proper course of effecting or preparing for the transfer of
the ABB Ltd Post-Settlement Closing Transferred Assets to the JC and except as
may otherwise expressly be provided for herein, ABB Ltd undertakes that, to the
extent that any member of the ABB Ltd Group exerts relevant management control
over the Post-Settlement Closing Transferred Assets, from the date of this
Agreement until the transfer of such ABB Ltd Post-Settlement Closing Transferred
Assets to the JC pursuant hereto, (a) such Assets, and the business activities
involved therewith shall be maintained and conducted in the ordinary and proper
course of business on sound commercial principles consistent with those applied
during the period of two (2) years
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preceding the relevant transfer, and (b) (without limitation of the foregoing),
without the prior consent of ALSTOM, no member of the ABB Ltd Group shall, with
respect to any ABB Ltd Transferred Companies included in the ABB Ltd
Post-Settlement Closing Transferred Assets:
(i) decide or effect any share capital increase or decrease,
issue or grant any share or other options or make any issue of
debentures or other securities;
(ii) declare or pay any dividends or other distributions;
(iii) directly or indirectly make any material (in relation to
such ABB Ltd Transferred Company) acquisitions or divestitures of
shares or other Assets;
(iv) enter into any Contracts (other than arm's-length
Contracts in the ordinary course of business);
(v) enter into, terminate or materially vary any employment
or employment related agreement or arrangement (other than the
renewal of any such existing agreements or arrangements, and normal
promotions and increases in remuneration) with any directors or
senior officers; or
(vi) commit to do any of the matters described in clauses
(i) - (v), inclusive.
12.2 NOTIFICATION TO REGULATORY AUTHORITIES. ABB Ltd agrees to use all
reasonable efforts to obtain (and ALSTOM shall reasonably co-operate with ABB
Ltd in obtaining), as soon as possible, all Regulatory Approvals, and shall
consult with workers' representatives to the
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extent required by applicable law, in connection with the consummation of the
transfer of the ABB Ltd Post-Settlement Closing Transferred Assets to the JC
Group.
12.3 REGULATORY ACTION. If, before or after any transfer of an ABB Ltd
Post-Settlement Closing Transferred Asset, any material Regulatory Action is
taken or threatened with respect to the relevant ABB Ltd Post-Settlement Closing
Transferred Asset, the Parties shall promptly meet to discuss the situation and
the action to be taken as a result, and (if such be the case) whether any
modification to the terms of this Agreement (or any agreement entered into
pursuant hereto) shall be made, in order that any requirements (whether as a
condition of giving any Regulatory Approvals or otherwise) of the relevant
Regulatory Authority may be reconciled with, and within the scope of, the
business arrangements contemplated by this Agreement. The Parties shall
thereafter co-operate in giving effect to any modifications agreed upon.
12.4 INSURANCE. Without prejudice to the generality of Article 12.1,
unless otherwise agreed with ALSTOM or the JC, ABB Ltd shall, until six (6)
months after transfer with respect to each ABB Ltd Post-Settlement Closing
Transferred Asset, maintain all policies of insurance relating to such Assets
and undertake that to the extent necessary with effect from the Settlement
Closing Date with respect to such Assets, the interest of the JC and its
Subsidiaries therein shall be noted on all such policies. Without limiting the
generality of the preceding sentence, any payment or right to receive payments
under any insurance policy in relation to any damage to or destruction of any
Asset comprising (or formerly comprising) part of the ABB Ltd Business, or any
proceeds thereof, shall be held on behalf of and for the benefit of, and
forthwith paid over to, the JC.
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ARTICLE 13
CONSEQUENCES OF NON-TRANSFERS OF ABB LTD POST-SETTLEMENT CLOSING ASSETS
13.1 CONTINUED TRANSFER EFFORTS. ABB Ltd undertakes that if a particular
ABB Ltd Post-Settlement Closing Transferred Asset, without prejudice to Article
11.1 and the relevant provisions of Annex D, has not been directly or indirectly
transferred to the JC by March 31, 2001 and if, in the case of any ABB Ltd
Business Contract, the procedures set out in Article 11.1 do not enable the full
benefit of such ABB Ltd Business Contract to be enjoyed by the JC Group, then:
(a) if the failure of such transfer to occur was the result of the
JC refusing or otherwise failing to accept for any reason (other than the
exercise by ALSTOM of its rights under Article 10.5) any such ABB Ltd
Post-Settlement Closing Transferred Asset by ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇ Ltd shall
no longer be obligated to effect such transfer and shall be free to deal
with or dispose of such Asset as it deems appropriate, with the proceeds
therefrom to go to, and the reasonable cost of such disposal to be paid by,
the JC; and
(b) if the failure of such transfer to occur is due to a Regulatory
Action, then ABB Ltd and ALSTOM shall consult as to the appropriate course
of action, provided that, (A) in no event shall ABB Ltd be required to make
any further additional investment or expend any further monies in
attempting to have such Regulatory Action stayed or lifted, and (B) if such
transfer has not occurred by March 31, 2003 and ABB Ltd has complied with
its obligations hereunder with respect to such Asset, then ABB Ltd shall no
longer be obligated to effect such transfer and shall be free to deal with
or dispose of
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such Asset as it deems appropriate, with the proceeds therefrom to go to,
and the reasonable cost of such disposal to be paid by, the JC.
Upon compliance with this Article 13.1, ABB Ltd shall cease to be obligated to
cause such Asset to be assigned to, or become part of, the JC Group.
13.2 TRANSFERS OF NON-ABB LTD BUSINESS. In the event and to the extent
that ABB Ltd or any of its Affiliates conveyed or transferred to the JC or any
member of the JC Group title to certain Assets as part of the ABB Ltd Business
which Assets (i) did not comprise or constitute Assets of the ABB Ltd Business
including, without limitation, any Intellectual Property Rights or Know-How not
predominantly used in the ABB Ltd Business, and (ii) are not material to the
business of the entire JC Group, then the JC and its Affiliates shall return
such Asset or Assets to ABB Ltd promptly upon receipt of any request therefor
from ABB Ltd (within eighteen (18) months of the Settlement Closing Date), and
the Parties shall agree to an appropriate adjustment, if any, by following the
principles set forth in the Joint Venture Agreement at formation of the JC with
respect to valuation of the ABB Ltd Business contributed to the JC, which
adjustment shall be paid by ABB Ltd to the JC at the same time as such transfer
back to ABB Ltd is made. If any such returned Intellectual Property Rights or
Know-How are then being used in the ABB Ltd Business, a license with respect
thereto shall be granted to ALSTOM and/or its designated Subsidiaries in
accordance with Annex D.
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ARTICLE 14
TAX MATTERS WITH RESPECT TO THE JC
14.1 CLAIMS OR ELECTIONS. No claim or election for Taxes-related purposes
shall be made by any member of the ABB Ltd Group without the consent of ALSTOM
if it has or may have an adverse effect upon the JC or any of its subsidiaries
or give rise to an increase in Taxes or costs or expenses of the JC or any of
its Subsidiaries. ALSTOM and ABB Ltd agree to co-operate, in connection with the
making of or (where appropriate) the giving of consent to any claims or
elections for taxation purposes requested:
(a) by ALSTOM in respect of the ALSTOM Reorganisation or by ABB Ltd
in respect of the ABB Ltd Reorganisation; and/or
(b) by ALSTOM in connection with the taxation affairs of any of the
ALSTOM Transferred Companies or by ABB Ltd in connection with the taxation
affairs of any of the ABB Ltd Transferred Companies, in either case in respect
of any period ending before the Closing Date.
14.2 INFORMATION. ALSTOM and ABB Ltd agree to co-operate to ensure that
the JC Group is provided with sufficient information to enable it to submit and
to deal with any matters arising out of any returns, notices, claims for relief
or allowances, or computations, to any relevant taxation or excise authorities
in respect of any period.
14.3 TAX LOSSES. Nothing in this Article 14 shall prevent ALSTOM or ABB
Ltd from retaining or taking the benefit of tax losses which may be available
within the ALSTOM
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Business or the ABB Ltd Business before the Closing Date instead of making any
such losses available to the JC.
14.4 INVESTIGATIONS. Should there be any investigation by any tax
authorities of the affairs of ABB Ltd in relation to the whole or any part of
the ABB Ltd Business, and in respect of any period up to and including the
Closing Date or, with respect to any particular ABB Ltd Post-Settlement Closing
Transferred Asset, the date of any transfer relating to such ABB Ltd
Post-Settlement Closing Transferred Asset, then the JC shall promptly make
available to ABB Ltd such records and information as ABB Ltd shall reasonably
request in connection with such investigation.
14.5 RECORDS. The JC shall keep all records pertaining to the ABB Ltd
Transferred Companies' tax position for a period at least equal to the
corresponding statutes of limitation, and, in the case of any such Taxes that
are indemnified by ABB Ltd, shall, at ABB Ltd's request and expense, defend any
action brought in that respect by the Taxing Authorities in accordance with the
instructions of ABB Ltd. Absent such request, ABB Ltd shall defend and control
such action brought by such Taxing Authorities all of the foregoing to apply
mutatis mutandis with respect to social charges or contributions.
14.6 CERTAIN TAX MATTERS. The provisions of Schedule 14.6 apply.
14.7 COMBUSTION ENGINEERING. From and after the Settlement Closing Date,
in the event that any Taxing Authority asserts that Combustion Engineering, Inc.
(or any successor) is not entitled to a deduction in respect of payments made by
it for Asbestos Liabilities and that the JC or any of its Subsidiaries (or any
successor(s)) is so entitled, the JC or its applicable Subsidiary shall, to the
extent it is lawfully able, claim such payments as deductions and pay to
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ABB Ltd the Tax Benefit resulting therefrom as and when actually realized,
provided that ABB Ltd shall reimburse the JC for its out-of-pocket costs in
filing and prosecuting such claims and shall indemnify and hold harmless the JC
from and against any Taxes imposed as a result of any subsequent disallowance of
such Tax Benefit (including any interest, penalties, or additions to tax in
connection therewith). As used herein, "Tax Benefit" shall mean the actual cash
tax savings derived by the JC or its applicable Subsidiary (or any successor(s))
by reason of the deductions referred to above, net of any actual cash tax cost
incurred by the JC (or its successor or applicable Subsidiary) as a result of
payment for the Asbestos Liabilities (as defined in Annex E) being made by
Combustion Engineering, Inc. (or any successor or affiliate); it being
understood that, except as otherwise required by law, the Parties do not intend
to treat any such payment as taxable to the JC (or its successor or applicable
Subsidiary).
14.8 TAX LIABILITIES. In determining the indemnity obligations of ABB Ltd
hereunder for income taxes incurred by the JC as a result of Tax adjustments for
periods prior to January 1, 1999 with regard to balance sheet provisions for
contracts, such obligations shall be reduced by the net present value of Tax
Benefits received by the JV as a result of the reversal of such provisions
within two (2) years from January 1, 1999.
ARTICLE 15
NON-COMPETITION; NON-SOLICITATION
15.1 NON-COMPETITION. ABB Ltd undertakes to ALSTOM that from and after
the Settlement Closing until the third anniversary of the Settlement Closing
Date neither it nor any of its Affiliates shall (whether alone or jointly with
others, whether as principal, agent, shareholder or otherwise and whether for
its own benefit or that of others), anywhere in the
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world, directly or indirectly engage in or carry on or be interested in any
Prohibited Activities, as described in Schedule 15.1 hereto.
15.2 EXCEPTIONS. (a) The restriction contained in Article 15.1 shall not
prohibit:
(i) the acquisition or holding by any member of the ABB Ltd
Group of shares amounting to less than five percent (5%) of the
capital of an undertaking quoted on any stock exchange; or
(ii) any bona fide combination or acquisition transaction by
any member of the ABB Ltd Group, so long as the businesses that the
ABB Ltd Group directly or indirectly acquires (or acquires an
interest in) as a result of such transaction are not predominantly
those that, but for this Article 15.2(a)(ii), would give rise to a
violation of Article 15.1, and provided that if, during the calendar
year prior to such combination or acquisition or any subsequent
calendar year during which such activities continue to be conducted,
the net sales attributable to such activities amount to more than
two percent (2%) (in the case of any single such transaction) or
seven percent (7%) in the aggregate (for all such transactions) of
the net consolidated sales of the power generation sector of the
ALSTOM Group (determined in accordance with ALSTOM's accounting
principles) during the same period, then the ABB Ltd Group shall be
required, within a period of six (6) months (of such transaction or
determination of such subsequent net sales figures, as the case may
be), to take such action as is necessary to come back into
compliance with this Article 15 (without regard, with respect to
such transaction, to the exception contained in this Article
15.2(a)(ii)).
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(b) The restrictions contained in Article 15.1 shall not apply to
existing minority shareholdings by the ABB Ltd Group (considered in the
aggregate) in ventures that are listed in Schedule 15.2(b) hereto and are not
engaged in any Prohibited Activities as of the date hereof but which in the
future, during the three (3) year period described in Article 15.1 above, become
engaged in one or more Prohibited Activities, provided that at the time that
such venture so becomes engaged in Prohibited Activities, (A) such venture is
not an Affiliate of ABB Ltd, (B) the ABB Ltd Group (considered in the aggregate)
does not beneficially own fifty percent (50%) or more of the equity interests in
such venture, (C) the consent of the ABB Ltd Group (considered in the aggregate)
or its designees or nominees is not directly or indirectly required in order for
the venture so to become engaged in Prohibited Activities and the ABB Ltd Group
does not have the right or power (whether by contract or otherwise and whether
directly or indirectly) to prevent such venture from so becoming engaged in
Prohibited Activities and (D) the governing documents of such venture do not
expressly require the venture to engage in Prohibited Activities, and provided
further that the exception afforded by this Article 15.2(b) shall in any event
apply only so long as the conditions set forth in the immediately preceding
clauses (A), (B), (C) and (D) continue to be satisfied, failing which the ABB
Ltd Group shall be required, within a period of six (6) months of the date of
non-compliance with such clauses, to take such action as is necessary to come
back into compliance with Article 15 (without regard, with respect to such
venture, to the exception contained in this Article 15.2(b)).
(c) ABB Ltd promptly shall inform ALSTOM when any transaction for
which ABB Ltd is relying on the exception set forth in Article 15.2(a)(ii), or
Article 15.2(b), occurs, and shall from time to time provide ALSTOM with such
information as ALSTOM reasonably
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may request in order to satisfy itself as to applicability (and continued
applicability) to such transaction of the exceptions afforded by such Articles.
15.3 NON-SOLICITATION; NON-HIRING. (a) ABB Ltd undertakes to ALSTOM that,
(i) commencing from the date hereof and continuing until eighteen (18) months
following the Settlement Closing Date, ABB Ltd and its Affiliates shall not
(directly or indirectly) solicit any individual that is, or within the last six
(6) months has been, an employee of the JC Group or the ALSTOM Group (a
"Restricted Employee") to join the employ of, perform services for or otherwise
become associated with ABB Ltd or any of its Affiliates, and (ii) commencing
from the date hereof and continuing until three (3) years after the Settlement
Closing Date, ABB Ltd and its Affiliates shall not solicit any Restricted
Employee who is not a former employee of the ABB Ltd Group, to join the employ
of, perform services for or otherwise become associated with ABB Ltd or any of
its Affiliates.
(b) ABB Ltd undertakes to ALSTOM that, (i) commencing from the date
hereof and continuing until eighteen (18) months following the Settlement
Closing Date, ABB Ltd and its Affiliates shall not directly or indirectly hire
or retain any Restricted Employee and (ii) commencing from the date hereof and
continuing for a period until three (3) years after the Settlement Closing Date,
ABB Ltd and its Affiliates shall not directly or indirectly hire or retain any
Restricted Employee who is not a former employee of the ABB Ltd Group.
(c) Notwithstanding the provisions of Article 15.3(a) and (b), any
member of the ABB Ltd Group may hire a Restricted Employee who is a former
employee of the ABB Ltd Group, PROVIDED (i) the Restricted Employee first
approaches a member of the ABB Ltd Group for employment, (ii) such member of the
ABB Ltd Group gives written notice to ALSTOM of its
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intent to hire such Restricted Employee, and (iii) ALSTOM is given a period of
thirty (30) days after receipt of such notice to convince such Restricted
Employee to remain with the JC Group or the ALSTOM Group, as the case may be. If
after such thirty (30) day period the Restricted Employee wishes to return to
the ABB Ltd Group, then the ABB Ltd Group shall have the right to hire such
Restricted Employee.
(d) The foregoing provisions of this Article 15.3 shall not
prohibit the ABB Ltd Group from hiring former employees of the JC Group or the
ALSTOM Group who worked at the clerical or administrative levels at one of the
members of the JC Group or the ALSTOM Group, it being understood that in no
event shall engineers, technicians or any similar categories of employees be
considered to be working at clerical or administrative levels.
ARTICLE 16
CONFIDENTIALITY
16.1 CONFIDENTIALITY. Subject to Article 3.7, each of ALSTOM and each
Extended Party undertakes that it shall keep confidential and (unless the prior
written consent of the Other Party has been given) not disclose to any person
(other than a member of its Group for any purposes reasonably incidental to the
purposes of this Agreement) the contents of this Agreement and each of the other
Settlement Documents. Each Extended Party other than ALSTOM and the JC covenants
to ALSTOM that it shall keep confidential and (unless the prior written consent
of ALSTOM has been given) not disclose to any person (other than a member of its
Group for any purposes reasonably incidental to the purposes of this Agreement),
or (except to the extent expressly authorized to do so in Annex D) use or
exploit commercially for its own purposes (A) any Intellectual Property Rights
or Know-How of any member of the ALSTOM Group or the JC
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Group or (B) any other information relating to the business or affairs of the JC
(or any of its Affiliates) or the business or affairs of the Other Party (or any
of its Affiliates) (but excluding for these purposes Know-How which is not
proprietary to the ALSTOM Group and is in the possession of any individual
employed by any member of the Group of such Extended Party), in each case which
such member (x) may have received at any time prior to the date hereof, or is in
possession of at the date hereof, or (y) at any time after the date hereof may
acquire either (it being understood that the following sub-clauses apply only in
the context of this clause (y) and do not qualify clause (x)):
(a) as a result of negotiating or entering into this Agreement or
any of the Ancillary Agreements or of its operation; or
(b) through the previous ownership by a current or former member of
its Group or (prior to the Closing) the ABB Ltd Transferred Companies of assets
of the ABB Ltd Business which shall have comprised assets of the ABB Ltd
Transferred Companies as of the Closing Date (or otherwise thereafter shall have
become assets of the JC Group) pursuant to the Joint Venture Agreement or this
Agreement; or
(c) otherwise directly or indirectly from any member of the JC
Group or the ALSTOM Group.
16.2 EXTENDED PARTIES. In performing its obligations under this Article
16, each Extended Party shall apply such standards of confidentiality as it
applies generally in relation to its own confidential information. Each Extended
Party shall use all reasonable endeavors to ensure that its employees and agents
observe the provisions of this Article 16. In particular but without prejudice
to the generality of the foregoing:
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(a) each Extended Party shall procure that current and former
members of its Group observe the provisions of this Article 16 as fully as if
they were parties hereto in lieu of such Party; and
(b) each Extended Party shall use all reasonable endeavors to
ensure that its current and former Affiliates which are not members of its Group
observe such confidentiality.
16.3 EXCLUDED INFORMATION. Articles 16.1 and 16.2 shall not apply to
information:
(a) acquired after the date hereof from a third party with the
right to divulge the same or (solely in the case of information received after
the date hereof) which is independently developed by the recipient;
(b) any Extended Party in good faith determines is required to be
disclosed by operation of law (including, without limitation, disclosure
requirements under applicable law or regulations in connection with any offering
of securities by or of such Extended Party or any member of its Group) or any
stock exchange listing agreement or regulations or any binding judgment or order
or by any requirement of any Regulatory Authority, provided that ABB Ltd shall
use reasonable efforts to consult with ALSTOM prior to any disclosure pursuant
to this clause and to obtain confidential treatment of any information so
disclosed pursuant to any binding judgment or order or by any requirement of any
Regulatory Authority;
(c) ALSTOM and ABB Ltd jointly decide to disclose, provided that
ALSTOM and ABB Ltd shall use their best efforts to co-ordinate any such
disclosure;
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(d) reasonably required to be disclosed in confidence to the
professional advisers of either ALSTOM or ABB Ltd for use in connection with the
transactions and matters contemplated by this Agreement, or related thereto;
(e) any Extended Party determines in good faith to disclose in
connection with the timely performance of its obligations, or the enforcement of
the rights of any member of its Group, under this Agreement, the Ancillary
Agreements or any other Contract with any member of the JC Group;
(f) any Extended Party determines in good faith to provide to any
undertaking considering merging or consolidating with, or acquiring, such
Extended Party, so long as:
(i) prior to any disclosure described in this clause (f),
the undertaking receiving such information executes a customary
agreement protecting the confidentiality and use of such
information; and
(ii) the information so disclosed is limited to that which is
relevant to be known to such undertaking in connection with its
evaluation of the transaction being contemplated; or
(g) which is or becomes within the public domain (otherwise than
through the default of the recipient Extended Party or any of its Affiliates);
or
(h) in the case of ALSTOM, information in the possession of ALSTOM
required by applicable law to be disclosed or disclosed in connection with a
third party claim or proceeding, threatened or pending, or reasonably disclosed
to protect its image or legitimate interests relating to the Asbestos
Liabilities of the ABB Ltd Business.
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ARTICLE 17
TERMINATION OF AGREEMENT
17.1 TERMINATION OF AGREEMENT. This Agreement may be terminated at any
time prior to the Settlement Closing Date:
(a) by the mutual written consent of the Parties;
(b) by either ABB Ltd or ALSTOM:
(i) if any court or governmental body or agency thereof of
competent jurisdiction shall have enacted, promulgated or issued any
statute, rule, regulation, ruling, writ or injunction, or taken any
other action, permanently restraining, enjoining or otherwise
prohibiting or making illegal the transactions contemplated hereby;
(ii) if the Settlement Closing shall not have occurred on or
before July 14, 2000; provided, however, that the right to terminate
this Agreement pursuant to this Article 17.1(b)(ii) shall not be
available to a Party whose failure to perform or comply with any
covenant or obligation under this Agreement has been the cause of,
or resulted in, the failure of the Settlement Closing to occur on or
before such date;
(iii) by ABB Ltd, if it becomes impossible to satisfy any of
the conditions specified in Article 6.1 which have not yet been met
or waived; or
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(iv) by ALSTOM, if it becomes impossible to satisfy any of
the conditions specified in Article 6.2 which have not yet been met
or waived.
17.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement, this Agreement shall forthwith become null and void, the Joint
Venture Agreement and the Shareholders Agreement shall remain in full force and
effect as the same exist as of the date hereof without any modifications and
there shall be no liability on the part of any of the Parties with respect to
this Agreement, except that Article 9.2 shall remain in full force and effect
and shall survive such termination, and nothing herein shall relieve any of the
Parties from liability for any breach or inaccuracy of any representation,
warranty or covenant set forth in this Agreement occurring prior to the
termination hereof and the provisions of Article 9 and Annex E shall remain in
effect with respect to any such breach or inaccuracy; provided, however, that
ABB Ltd shall not assert any claim against ALSTOM or the JC in respect of a
breach or inaccuracy of a representation, warranty or covenant made by the JC
under this Agreement;
17.3 DUTCH CIVIL CODE. The Parties agree that they cannot cause this
Agreement to be dissolved on the basis of Section 265 of Book 6 of the Dutch
Civil Code.
ARTICLE 18
MISCELLANEOUS
18.1 EXPENSES. (a) Except as otherwise specifically provided herein or in
any Ancillary Agreement, ABB Ltd and ALSTOM shall pay their own expenses, and
shall share equally the expenses of the JC, including, without limitation,
accountants' and attorneys' fees, incurred in connection with the negotiation,
execution and consummation of the transactions
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contemplated by this Agreement and the Ancillary Agreements. Taxes payable with
respect to transactions effected under the Ancillary Agreements shall be paid in
accordance with the terms and conditions of such Ancillary Agreements, provided
that nothing in this sentence limits or modifies any Party's express obligations
in relation to Taxes under this Agreement (including without limitation Annex E
hereto).
(b) Except as otherwise provided herein, all costs, charges and
expenses, incurred or payable by any person in connection with the transfer of
the ABB Ltd Post-Settlement Closing Transferred Assets shall be borne by ABB
Ltd.
18.2 NOTICES. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be considered to be given
and received in all respects when hand delivered, when sent by prepaid express
or courier delivery service, when sent by facsimile transmission actually
received by the receiving equipment or seven (7) days after deposit in the
regular mails, certified mail, postage prepaid, return receipt requested (or
equivalents thereof), in each case addressed as follows, or to such other
address as shall be designated by notice duly given:
If to ABB Ltd:
ABB Ltd
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
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If to ALSTOM:
ALSTOM
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 16
France
Attention: General Counsel
Facsimile: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
If to the JC:
ABB ALSTOM Power NV
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
Belgium
Attention: General Counsel
Facsimile: ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
18.3 ENTIRE AGREEMENT. This Agreement and the Annexes, Schedules and
Exhibits attached hereto, and the Ancillary Agreements (and the other
agreements, certificates and other documents contemplated hereby and thereby)
and any other agreements or other documents being executed and delivered
contemporaneously herewith constitute the entire agreement among the Parties
relating to the subject matter hereof, and all prior agreements, correspondence,
discussions and understandings of the Parties (whether oral or written) with
respect to the subject matter hereof, and from and after the Settlement Closing
(if it occurs), the Joint Venture Agreement and the Shareholders Agreement are
merged into and superseded by this Agreement and the Ancillary Agreements, it
being the intention of the Parties that this Agreement and the Ancillary
Agreements (and the other agreements, certificates and other documents
contemplated hereby and thereby) shall serve as the complete and exclusive
statement of the terms of their agreement with respect to the subject matter
hereof. No amendment, waiver or modification hereto or hereunder shall be valid
unless in writing and signed by an authorized signatory of the
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Party or Parties to be affected thereby. For the avoidance of doubt, nothing in
this Article 18.3 shall affect the validity of the existing JC/ABB Contracts or
the JC/ABB Service Contracts.
18.4 ASSIGNMENT. (a) This Agreement and the rights and obligations
arising hereunder shall not be assignable or transferable by ABB Ltd without the
prior written consent of ALSTOM or by ALSTOM without the prior written consent
of ABB Ltd or by the JC without the prior written consent of ABB Ltd and (prior
to the Settlement Closing) ALSTOM, except, in each case, to an Affiliate of ABB
Ltd or ALSTOM pursuant to Article 18.4(b) below. Nothing herein contained shall
limit the right of (i) any Party to assign this Agreement without the consent of
the other Parties in connection with any Permitted Merger Transaction provided
that the resulting, surviving or acquiring undertaking in any such transaction
(if other than such Party) shall agree in writing to assume and be bound by all
of the terms and conditions of this Agreement and the Ancillary Agreements and,
provided further, that no such assignment shall relieve the assigning or
transferring Party of its obligation to perform all of its duties and
obligations hereunder or (ii) ALSTOM to assign this Agreement in connection with
a sale of all of its ownership interests in the JC, provided that such
purchasing party shall agree in writing to be bound by all of the terms and
conditions of this Agreement and the Ancillary Agreements applicable to ALSTOM
and, provided further, that it is agreed that no such sale shall relieve ALSTOM
of any of its liabilities or obligations hereunder. For the avoidance of doubt,
ABB Ltd shall procure that the resulting, surviving or acquiring undertaking, in
any Permitted Merger Transaction involving the ABB Ltd Group (if other than ABB
Ltd), agree in writing to be bound by all of the terms and conditions of this
Agreement and the Ancillary Agreements applicable to ABB Ltd (regardless of
whether ABB Ltd desires to assign its rights under this Agreement in
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connection with such transaction), provided that ABB Ltd shall not thereby be
released from its obligation to perform all of its duties and obligations
hereunder.
(b) Notwithstanding the provisions of Article 18.4(a), either ABB
Ltd or ALSTOM may, without the prior written consent of the Other Party, assign
any or all of its rights and obligations under this Agreement at any time after
the Settlement Closing to one or more Affiliates of such Party, provided that
such Affiliate shall agree in writing to assume and be bound by all of the terms
and conditions of this Agreement and, provided further, that it is agreed that
no such assignment shall relieve the assigning Party of liabilities or
obligations hereunder and the Parties shall implement a transfer of contract in
accordance with the laws of The Netherlands in order to give effect to such
transfer.
18.5 BINDING EFFECT. This Agreement shall be binding upon the Parties and
their respective successors and permitted assigns.
18.6 HEADINGS. The headings in this Agreement are for purposes of
convenience and ease of reference only and shall not be construed to limit or
otherwise affect the meaning of any part of this Agreement.
18.7 SEVERABILITY. If any provision of this Agreement is held to be
invalid, unlawful or unenforceable, it shall be modified to the minimum extent
necessary to make it valid, lawful and enforceable or, if such modification is
not possible, such provision shall be stricken from this Agreement and the
remaining provisions of this Agreement shall continue in full force and effect.
-85-
18.8 APPLICABLE LAW. This Agreement and all questions arising in
connection herewith shall be governed by and construed in accordance with the
laws of The Netherlands.
18.9 ARBITRATION. All disputes arising out of or in connection with this
Agreement shall be referred to and finally settled by arbitration under the
Rules of Arbitration of the International Chamber of Commerce (the "Rules") by
three arbitrators appointed in accordance with the Rules. The place of
arbitration shall be Amsterdam, The Netherlands. The language of the arbitration
proceedings shall be English. Any arbitral award hereunder may be entered in any
court of competent jurisdiction. Notwithstanding the foregoing, with respect to
Liabilities to which a Party is an Indemnified Party under Annex E hereto, such
Indemnified Party may seek to enforce the indemnification obligations of any
Indemnifying Party in a judicial or administrative action or proceeding to which
such Indemnified Party has been named or joined by a third party or Regulatory
Authority, but only for the limited and sole purpose of enforcing such
indemnification obligations.
18.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered to be but one and the same
agreement, and shall become effective when one or more such counterparts have
been executed by each Party and delivered to the other Parties.
18.11 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the Parties and their respective permitted successors and assigns
only and is not for the benefit of, and shall not be enforceable by, any other
person. Nothing in this Article 18.11 limits the obligations of the Parties
under Annex E, and any Party hereto may enforce the provision of Annex E on
behalf of its Indemnified Parties.
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18.12 CONTROLLING DOCUMENT. In the event of any conflict between the terms
of this Agreement and any of the Ancillary Agreements, the terms of this
Agreement shall govern.
18.13 STATUS OF AFFILIATES. ABB Asea, ABB AG and ABB AB (and their
successors in interest) and ABB Handels- und Verwaltungs AG are acknowledging
and consenting to this Agreement in their capacities as signatories to the
Shareholders Agreement and the Joint Venture Agreement, respectively, and by
their acknowledgement and consent they agree to be bound by the covenants and
agreements set forth herein.
18.14 THE JC. ABB Ltd and ALSTOM covenant to each other, subject to the
terms and conditions hereof, to take such action as shareholders of the JC as
may be necessary or desirable to cause the JC to perform all of its obligations
hereunder to be performed by it prior to or at the Settlement Closing.
18.15 PRESERVATION. Neither this Agreement nor any other Settlement
Document has, or shall have, the effect of releasing any person from any
Liability in respect of any failure to comply with Article 11 of the
Shareholders Agreement, or Article 15.1 of the Joint Venture Agreement or
Article 2.4 of the Closing Memorandum and Agreement at any time prior to the
Settlement Closing. ABB Ltd shall be liable with respect to any such failure to
comply by any member of the ABB Ltd Group which is a signatory to such
agreements.
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IN WITNESS WHEREOF, each of the Parties has caused its duly authorized
representative to execute this Agreement as of the date first above written.
ALSTOM
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and
General Counsel
ABB LTD
Signature: /s/ Beat ▇▇▇▇
---------------------------------
Name: Beat ▇▇▇▇
Title: Senior Vice President and
General Counsel
ABB ALSTOM POWER NV
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attorney-in-Fact
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The undersigned duly acknowledge and consent to this Agreement and agree to
be bound by the covenants and agreements set forth herein:
ABB ASEA ▇▇▇▇▇ BOVERI LTD.
By: /s/ Beat ▇▇▇▇
--------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB AG
By: /s/ Beat ▇▇▇▇
--------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB AB
By: /s/ Beat ▇▇▇▇
--------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB HANDELS- UND VERWALTUNGS AG
By: /s/ Beat ▇▇▇▇
--------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
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ABB POWER GENERATION INVESTMENTS BV
By: /s/ Beat ▇▇▇▇
--------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB POWER GENERATION PARTICIPATIONS BV
By: /s/ Beat ▇▇▇▇
--------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
-90-
ANNEX A
THE ALSTOM BUSINESS
The ALSTOM Business comprises the businesses and activities (including Assets,
liabilities, Contracts and employees) of the Energy Sector of ALSTOM, which
principally consists of designing and manufacturing components, systems and
turnkey solutions for thermal (such as coal and gas) and hydro power plants
located all over the world, and the provision of a full range of related
services including project financing and management, engineering, plant
maintenance, rehabilitation and refurbishment.
The ALSTOM Business shall include, inter alia, the following businesses and
activities of ALSTOM's Energy Sector:
(a) Industrial Gas Turbines;
(b) Steam Turbines (including Industrial, Utility, Combined Cycle and for
Nuclear Power Plants);
(c) Boilers and Environmental Systems (Utility, Environmental and
Industrial);
(d) Generators (including Turbogenerators);
(e) Hydraulic Turbines;
(f) Hydraulic Generators;
(g) Power Plants (including Turnkey);
(h) EPC Business development/Structured Solutions;
(i) Marketing and Sales resources predominantly related to the Energy
Sector currently attached to the International Network; and
(j) Businesses (including employees, Assets, liabilities and Contracts)
predominantly dedicated to the business of ALSTOM's Energy Sector and
located in multisector entities, whether or not reflected in the ALSTOM
Business Historical Accounts (including in Australia and India);
but shall exclude the following:
(k) Heavy Duty Gas Turbines business;
(l) Lincoln Turbochargers business;
(m) Belfort Superconducting equipment business (wire and magnet);
(n) Certain Electrical Machine Service activities (in the course of being
transferred outside the Energy Sector);
(o) Nuremberg Non-destructive Testing Business; and
(p) Brazil AEB's Water Business in Taubate.
2
ANNEX B
PART A: THE ABB LTD BUSINESS
The ABB Ltd Business consists of the non-nuclear business of ABB Ltd's Power
Generation Segment, including the following Business Areas and Business Units.
BA PGC-GAS AND COMBI CYCLES
Gas turbines, gas turbine power plants, combined cycle power plants.
BU-CODE BU-DESCRIPTION
------- --------------
1110 NEW EQUIPMENT WITH GAS TURBINES > 50 MW
Gas turbines
Gas turbine power plants
1111 NEW EQUIPMENT COMBINED CYCLE PLANTS
Combined-cycle-power plants for power and co-generation
1120 SERVICE FOR EQUIPMENT WITH GAS TURBINES > 50 MW
Spare parts, service and maintenance of gas turbines and
GT/combined-cycle plants
Repowering of existing (ABB and non-ABB) steam turbine
power plants with ABB gas turbines
1130 OPERATION AND MAINTENANCE OF ABB EQUIPPED COMBINED CYCLE AND
GAS TURBINE PLANTS
BA PSP-STEAM POWER PLANTS
Large scale steam power plants, large steam turbines and turbo-generators.
Development, design, engineering, manufacture and erection of fossil fired steam
generators for utilities, independent power producers and industry.
Aftermarket services for steam generators including parts, engineering studies,
retrofits and training.
BU-CODE BU-DESCRIPTION
------- --------------
1220 NEW EQUIPMENT
Turbine Islands for Steam Power Plants for IPPs and public
utilities > 100 MW per unit, Turbo-generators, heat exchangers
1230 NEW EQUIPMENT
Fossil Fired Steam Power Plants > 100 MW per unit
Turn-key fossil fired power plants
Components for fossil fired steam power plants if more than
only turbine islands
Combined cycle power plants with gas turbines of relative
inferior importance
First spare parts equipment set for fossil fired power
plants
1240 SERVICE
Spare parts and retrofits
Operation and Maintenance
BU-CODE BU-DESCRIPTION
1959 UTILITY POWER BOILERS
Oil, gas and coal
Subcritical
Supercritical
1962 INDUSTRIAL BOILERS, FIELD ERECTED
Oil, gas, coal and other solid fuels
Includes "VU-40", "VU-60" and other field erected types
Waste-to-energy
1963 FLUID BED BOILERS
BFB (bubbling fluid bed)
CFB (circulating fluid bed)
PFCB (pressurised fluidized bed combustion)
1966 STANDARD BOILERS
Package industrial Boilers
Shop Assembled Boilers
Including "A" and "D" types
Marine Boilers and Service (Parts and Maintenance)
Other products
Condensers
Waste Heat Economizers
Electric Boilers
1968 HEAT RECOVERY STEAM GENERATORS
1969 MANUFACTURING
Manufacture to Customer's Design
Shop Operations
2
1971 BOILER PRODUCTS - EQUIPMENT
Air Heaters
Ljungstrom air heaters
Heat pipe air heaters
APEX heat exchangers
Tubular heat exchangers
Thermal oxidizers
▇▇▇▇▇▇▇ Products
Industrial pulverizers
Classifying equipment
Material handling equipment
Kilns
Sootblowers
1972 BOILER PRODUCTS - SERVICE
Air Heaters
Includes related parts and aftermarket service
▇▇▇▇▇▇▇ Products
Includes related parts and aftermarket service
1975 BOILER SERVICE - NEW CONSTRUCTION, MAINTENANCE, TECHNICAL
Erection services associated with new equipment projects. This
is classified as service since it requires generally the same
skill set as maintenance construction work and is generally
performed by the same group of people. Includes planned and
forced outage work, repairs, etc. performed on site.
Engineering and consulting services
Power plant operations and maintenance
1981 BOILER SERVICE - AFTERMARKET PROJECTS
Material supply products/projects where value is added by the
reporting BAU.
Includes refurbished products/projects, retrofitted
products/projects, rehabilitation activities or even products
with engineered enhancements.
1982 BOILER SERVICE - SPARE PARTS
Replacement parts and components where little, if any value is
added by the reporting BAU.
Spare parts are defined by ABB as "Standard Goods for Re-Sale"
in the cost calculation model.
BAA PPS-POWER PLANT SYSTEMS
Medium and small scale steam turbine and combined cycle plants mainly for
industrial applications, steam and gas turbines for power generation and
mechanical drive applications, service for above equipment and plants.
3
Hydro and diesel power plants, control and electrical equipment hereto, separate
generators. Design, production and marketing of equipment and systems for
transmission and distribution of water for heating/cooling.
BU-CODE BU-DESCRIPTION
------- --------------
1305 INDUSTRIAL STEAM POWER PLANTS
Industrial steam turbines for generator, mechanical drive and
combined cycle applications.
1310 INDUSTRIAL STEAM TURBINES
Industrial steam turbines for generator, mechanical drive and
combined cycle applications.
1315 SERVICE OF INDUSTRIAL STEAM TURBINES
Industrial steam turbines and steam turbine plants
1320 INDUSTRIAL GAS TURBINES
Gas turbines < 50 MW
1321 INDUSTRIAL GAS TURBINE PLANTS
Industrial gas turbine plants excl. GTs
1325 SERVICE OF INDUSTRIAL GAS TURBINES
Service of industrial gas turbines and combined cycle plants.
Service of gas turbines in mechanical drive applications.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ GAS TURBINES
Gas turbines in mechanical drive applications
1370 O & M
Operation and Maintenance of GT/ST driven plants
BU-CODE BU-DESCRIPTION
------- --------------
1505 NEW HYDRO POWER PLANTS
Hydro power plants including generators, control systems and
other equipment to new hydro power plants.
Exception: Hydromechanical equipment shall be reported only
under BU 1530.
1515 HYDRO POWER SERVICE
Service and retrofit including generators, control systems and
other equipment to existing hydro power plants.
Exception: Hydromechanical equipment shall be reported only
under BU 1530.
4
1516 HYDRO POWER OPERATIONS & MAINTENANCE CONTRACTS
O & M contracts with a duration of at least one year. Services
performed under this contract which do not alter the original
condition of the equipment, e.g. related spare part sales and
repairs.
Exception: Replacement and/or upgrade of equipment shall still
be reported under BU 1515.
1520 DIESEL POWER PLANTS
All new equipment and service on diesel power plants.
1530 HYDROMECHANICAL EQUIPMENT
All hydromechanical equipment and service sold to new or
existing hydro power plants.
BU-CODE BU-DESCRIPTION
------- --------------
8204 DISTRICT HEATING
Low temperature (< 140DEG.C/250F) preinsulated pipe systems
for district heating and cooling.
- Pipes
- Fittings
- Other accessories
- Alarm systems
Other preinsulated pipe systems for oil, gas, etc.
Low temperature (< 140DEG.C/250F) preinsulated pipe systems
for district heating and household water applications.
PU-foam insulated system and rockwool insulated pipe system.
All including:
- Pipes
- Fittings
- Other accessories
- Alarm systems
BA PES-ENVIRONMENTAL SYSTEMS
Development, design, engineering, supply, construction and service of air
pollution control and resource recovery and waste disposal plants
BU-CODE BU-DESCRIPTION
------- --------------
5401 POWER AIR POLLUTION CONTROL INCL. ASH
Particulate control systems excluding ash handling systems for
all pollution control for power generation including electric
utilities, heating plants and private generation.
Gaseous control systems for air pollution control for power
generation including electric utilities, heating plants and
private generation.
5
Ash handling Systems - both bottom ash and fly ash - for Power
generation including electric utilities, heating plants and
private generation. Ash handling Systems for industrial
applications.
5402 INDUSTRY AIR POLLUTION CONTROL
Air pollution control systems for the aluminium industry
including both gaseous and particulate control.
Air pollution control systems for the pulp & paper industry
including gaseous and particulate control. Resource recovery
and waste disposal plants, general contracting and service
for these plants.
Air pollution control systems for the metallurgical industry
including gaseous and particulate control.
5423 WASTE TO ENERGY PLANTS AND AIR POLLUTION CONTROL
Resource recovery and waste disposal plants, general
contracting and service for these plants.
Particulate and gaseous control systems for air pollution
control for incineration plants including municipal waste,
industrial waste and hazardous waste.
5407 SERVICE - WASTE TO ENERGY
5408 SERVICE - INDUSTRY AIR POLLUTION CONTROL
Aluminium service, pulp & paper service, metallurgy service
5460 SERVICE - POWER AIR POLLUTION CONTROL
BA PSM-POWER SYSTEM MANUFACTURING
Provide the P-Segment Business Areas with competitive manufacturing performance
through flexible, cost effective, on time delivered, high quality Turbines,
Generators, Components and Factory service.
BU-CODE BU-DESCRIPTION
------- --------------
1910 POWER PLANT PRODUCTION
Comprise the following companies only:
▇▇▇▇▇ Asea ▇▇▇▇▇ Boveri Ltda.
CHKRA ABB Kraftwerke AG
CZPBS ABB Prvni Brnenska Strojirna Brno S.R.O.
DEBER ABB Kraftwerke Berlin GmbH
DEKWE ABB Kraftwerke AG
DETUR ABB Turbinen Nurnberg GmbH
ESGEN ABB Generacion S.A.
GRPPL ABB Power Plant LTD
▇▇▇▇▇ ABB Power Generation Kft.
IDESI PT ABB Energy Systems Indonesia
6
INABB Asea ▇▇▇▇▇ Boveri LTD
ITSAD ABB Sadelmi S.p.A
NOPOW ABB Kraft AS
PLDOL ABB Dolmel Ltd
PLZAM ABB Zamech LTD
PTSTB MSET Metalomecanica de Setubal SA
ROENR ABB Energoreparatii Romania SRL
RUNEV ABB ▇▇▇▇▇▇
RUUNI ABB Uniturbo LTD
SEGEN ABB Generation ▇▇
▇▇▇▇▇ ABB Stal AB
USPGE ABB Power Generation Inc.
7
ANNEX B
PART B: PERMITTED ENCUMBRANCES
NONE
ANNEX B
PART C: ABB LTD POST-SETTLEMENT CLOSING TRANSFERRED ASSETS
The ABB Ltd Post-Settlement Closing Transferred Assets include the ABB
Ltd Business conducted or located in the following countries:
Brazil
Bulgaria
Colombia
Croatia
Ecuador
Egypt
Greece
India
Indonesia
Ireland
▇▇▇▇▇▇
▇▇▇▇▇▇
Korea
Lebanon
Malaysia
New Zealand
Peru
Philippines
Poland
Portugal
Romania
Russia
Saudi Arabia
Singapore
Spain
Sweden
Taiwan
Thailand
Ukraine
Uzbekistan
Venezuela
Vietnam
ANNEX C
DESCRIPTION OF THE FIELD
The Field comprises all activities relating to Power Generation including
without limitation:
o Research and development, design, engineering, engineering procurement,
manufacturing, erection, commissioning, contracting, marketing and sale
of power generation equipment, components, services, systems and power
plants.
o Service supply relating to power generation.
o Power generation equipment and power plant operation, maintenance and
retrofit.
o Electrical contracting for power generation.
o Power plant and power generation equipment control and instrumentation.
o Power generation project development and project equity investment.
o Power generation project finance and structured finance.
The following activities are excluded from the Field:
o Design, manufacture, sale and service of nuclear reactors.
o Design, manufacture and sale of nuclear fuel.
o Design, manufacture and sale of fuel cells and fuel cells systems using
the PEM (proton-exchange membrane) technology.
For the avoidance of doubt, the design and manufacture of power Transmission &
Distribution equipment is not included in the Field.
ANNEX D
INTELLECTUAL PROPERTY RIGHTS AND KNOW-HOW
1 INTERPRETATION
1.1 The definitions and rules of interpretation set out in Article 1 of
this Agreement apply to this Annex supplemented by the following:
"ABB LTD MARKS" means the names, trade names, trademarks,
service marks, product marks and logos comprised of the
initials ABB and/or the words Asea ▇▇▇▇▇ Boveri, in various
forms, with or without additional matter and whether or not
registered and whether or not the subject of an application to
register;
"▇▇ ▇▇▇▇▇" means the names, trade names, trademarks, service
marks, product marks and logos comprised of the initials CE
and/or the words Combustion Engineering, in various forms,
with or without additional matter and whether or not
registered and whether or not the subject of an application to
register;
"FLAKT MARKS" means the names, trade names, trademarks,
service marks, product marks and logos comprised of the word
FLAKT, in various forms, with or without additional matter and
whether or not registered and whether or not the subject of an
application to register;
"INTELLECTUAL PROPERTY RIGHTS" means copyrights, design
rights, patents, mask rights, trademarks, trade names and
similar property rights conferred by law in any part of the
world and, where applicable, whether or not registered, in
each case together with all rights appurtenant thereto
(including but not limited to rights, where applicable, to
apply for registration thereof). For purposes hereof, the ABB
Ltd Marks, the ▇▇ ▇▇▇▇▇ and the FLAKT Marks are not
Intellectual Property Rights.
"KNOW-HOW" means data, formulae, techniques, inventions,
specifications, drawings, algorithms, prototypes, research
materials, computer programs and documentation, databases, and
other non-public know-how or trade secrets of any kind;
"LICENSE" means, according to the context, a license or
similar agreement in which rights to use Intellectual Property
Rights are made or given, or a license or similar agreement in
which rights to use Know-How are granted.
1.2 Where the context permits or requires, any reference in this Annex to a
License includes a sublicense and a sub-sublicense or other derivative
rights granted by a licensee or a sublicensee.
1.3 References in this Annex to "Articles" are, unless otherwise expressly
provided, to Articles of this Annex D and references in this Annex to
Schedules are to Schedules to this Annex.
2 PERFORMANCE OF OBLIGATIONS
ABB Ltd shall be responsible for procuring that the relevant entity
within its Group shall perform those obligations which are required in
this Annex to be performed by it.
3 REORGANISATIONS
It is agreed that, except for Article 4.4, Articles 4 and 5 shall apply
only if and to the extent that rights equivalent to those which are
contemplated to be assigned, licensed and/or communicated (as the case
may be) to ALSTOM and/or its Subsidiaries thereunder are not currently
owned by, or have not as of yet been licensed or communicated to, the
ABB Ltd Transferred Companies, respectively, and have not been so
assigned, licensed and/or communicated, respectively, by the Settlement
Closing to one or more of the ABB Ltd Transferred Companies pursuant to
the Reorganisations or otherwise.
4 ASSIGNMENT AND RELATED MATTERS
4.1 Subject to Articles 4.3 and 5.4, ABB Ltd and its Subsidiaries (except
as set forth in Schedule 1) shall, at the Settlement Closing or as soon
thereafter as is practicable, in either case with economic effect from
and including January 1, 1999, assign (or cause to be assigned) to
ALSTOM and/or its designated Subsidiaries (beneficially and, subject to
Article 11.8 of this Agreement, of record):
(i) all Intellectual Property Rights and Know-How owned (as of
March 23, 1999 (except as may be affected by events in the
ordinary course of the conduct of the ABB Ltd Business prior
to the Closing), as of immediately prior to the Closing or as
of immediately prior to the Settlement Closing) by members of
the ABB Ltd Group (listed in Schedule 2), and (x) at such time
used or held for use or (y) at such time under development for
use, in each case predominantly in the ABB Ltd Business;
(ii) subject to Article 6, all right, title and interest under,
subject to the burden of, all Licenses from third parties
relating to Intellectual Property Rights or Know-How that (as
of March 23, 1999 (except as may be affected by events in the
ordinary course of the conduct of the ABB Ltd Business prior
to the Closing), as of immediately prior to the Closing or as
of immediately prior to the Settlement Closing) were (x) at
such time used or held for use or (y) at such time under
development for use, in each case predominantly in the ABB Ltd
Business (listed in Schedule 3) under which members of the ABB
Ltd Group (as constituted from time to time) appear as (or
otherwise are) grantees; and
(iii) all their rights to ▇▇▇ for damages and any other remedies in
respect of any infringement, misuse or conversion of, or in
relation to, the rights referred to in paragraphs (i) and
(ii).
4.2 ABB Ltd and its Subsidiaries shall, as soon after the Settlement
Closing as is practicable and in accordance with procedures to be
established by ALSTOM, communicate or
2
otherwise make available to ALSTOM and/or its designated Subsidiaries
all Know-How assigned to ALSTOM and/or its designated Subsidiaries
pursuant to paragraph (i) of Article 4.1 or held by them under any
License relating to Know-How assigned pursuant to paragraph (ii) of
Article 4.1, in each case subject to the provisions of any Licenses
which relate to such Know-How, and shall supply to ALSTOM and/or its
designated Subsidiaries the originals or, at the discretion of ALSTOM,
copies of documents or other materials in their possession in which any
part of such Know-How is contained. ABB Ltd and its Subsidiaries, and
ALSTOM and its designated Subsidiaries, shall each take all reasonable
steps to maintain the confidentiality of the Know-How.
4.3 Any assignments to be made pursuant to Article 4.1 and any such
assignments made prior to the Settlement Closing shall be: (i) subject
to and with the benefit of any Licenses to third parties and any other
third party rights and obligations, but free of Encumbrances; and (ii)
subject to a reservation to the assignor of a worldwide, perpetual (or
for such shorter period as such assigned rights may exist),
irrevocable, royalty free, non-exclusive, non-assignable and
non-sublicensable right to (A) use (and permit others within the ABB
Ltd Group or third parties to use) the Intellectual Property Rights and
Know-How assigned pursuant to paragraph (i) of Article 4.1, but only
for activities outside of the Field, and (B) enjoy (and permit others
within the ABB Ltd Group or third parties to enjoy) the rights
conferred by the Licenses assigned pursuant to paragraph (ii) of
Article 4.1, but only to the extent permitted under the terms of those
Licenses, and only for activities outside of the Field; provided that
if any reservation of rights pursuant to clause (ii) of this Article
4.3 is not desirable or permissible due to national laws or regulations
or for any other reason, including but not limited to the terms of any
License referred to therein or any other third party rights, the
assignor shall discuss with ALSTOM with a view to reaching agreement on
the best means to ensure that equivalent rights are granted or
otherwise made available to it.
4.4 It is understood and agreed that, to the extent ABB Ltd Transferred
Companies currently own, or as a result of a Reorganisations or
otherwise at the Settlement Closing own, or at the Closing Date owned,
Intellectual Property Rights and/or Know-How such that no assignment
pursuant to this Article 4 is or was necessary in respect thereof,
ALSTOM or the JC shall cause, at the request of ABB Ltd after the
Settlement Closing, the relevant ABB Ltd Transferred Company to grant a
License or sublicense, as the case may be, to the members of the ABB
Ltd Group to effect the reservation of rights permitted under clause
(ii) of Article 4.3.
5 GRANT OF LICENSES AND RELATED MATTERS
5.1 ABB Ltd and its Subsidiaries (except as set forth in Part B of Schedule
4) shall, at the Settlement Closing or as soon thereafter as is
practicable, in either case with economic effect from 1 January 1999,
grant (or cause to be granted) to ALSTOM and/or its designated
Subsidiaries worldwide, irrevocable, royalty free, non-exclusive,
non-assignable and non-sublicensable (except as otherwise expressly
provided in Articles 8 and 14) Licenses under all Intellectual Property
Rights and Know-How owned (as of March 23, 1999 (except as may be
affected by events in the ordinary course of the conduct of the ABB Ltd
Business prior to the Closing), as of immediately prior to the
3
Closing or as of immediately prior to the Settlement Closing) by
members of the ABB Ltd Group (listed in Schedule 5) and (x) at such
time used or held for use or (y) at such time under development for
use, in each case in the ABB Ltd Business, but which are not required
to be assigned pursuant to paragraph (i) of Article 4.1. Such Licenses
shall be for a term of thirty (30) years from and after the Settlement
Closing Date and shall cover the full territory of the rights and shall
be for use in activities within the Field only.
5.2 ABB Ltd and its Subsidiaries (except as set forth in Schedule 6) shall,
at the Settlement Closing or as soon thereafter as is practicable, in
either case with economic effect from January 1, 1999, grant (or cause
to be granted) to ALSTOM and/or its designated Subsidiaries
irrevocable, non-exclusive, non-assignable and non-sublicensable
sublicenses under all Licenses from third parties relating to
Intellectual Property or Know-How that (as of March 23, 1999 (except as
may be affected by events in the ordinary course of the conduct of the
ABB Ltd Business prior to the Closing), as of immediately prior to the
Closing or as of immediately prior to the Settlement Closing) were (x)
at such time used or held for use or (y) at such time under development
for use, in each case in the ABB Ltd Business (listed in Schedule 7)
but which are not required to be assigned pursuant to paragraph (ii) of
Article 4.1. Such sublicenses shall be for use in activities within the
Field only, shall cover the widest scope and territory possible under
the terms of the Licenses under which they are granted and shall be on
arms-length terms (including any royalty to be paid thereunder),
provided such terms shall be no more onerous than the terms of such
Licenses and for the duration thereof.
5.3 ABB Ltd and its Subsidiaries shall, as soon after the Settlement
Closing as is practicable and in accordance with procedures to be
established by ALSTOM, communicate or otherwise make available to
ALSTOM and/or its designated Subsidiaries full details of the Know-How
to which any License referred to in Article 5.1 or sublicense referred
to in Article 5.2 relates and supply to them copies of documents or
other materials in their possession in which any part of such Know-How
is contained (subject to the provisions of such License or sublicense).
5.4 ABB Ltd or its appropriate Affiliate, and ALSTOM, or a member of the
ALSTOM Group as of the date hereof, shall enter into the Powerformer
License on the terms set forth in Schedule 9.
6 RESTRICTIONS ON ASSIGNMENTS OR GRANTS OF LICENSES
If a License cannot be assigned as required by paragraph (ii) of
Article 4.1 or if a sublicense required by Article 5.2 cannot be
granted, ABB Ltd and its Subsidiaries shall use all reasonable efforts
to persuade the relevant third party either to amend its License to
permit the same or to grant to ALSTOM and/or its designated
Subsidiaries directly a License conferring equivalent rights. Until the
License is amended, or a License conferring equivalent rights is
granted pursuant to this Article 6.1, ABB Ltd and its Subsidiaries
shall, to the fullest extent permitted by law, hold the benefit of the
relevant License (insofar as it relates to the ABB Ltd Business) for
ALSTOM and/or its designated Subsidiaries; provided that ALSTOM shall
be responsible for payment of royalties, fees, outgoings or other
liabilities thereunder attributable to the ABB Ltd
4
Business for so long as it or another member of the ALSTOM Group
receives the benefit thereof and ALSTOM shall indemnify ABB Ltd and its
Subsidiaries against any liability (together with all reasonable costs)
which they may incur by reason of any breach thereof attributable to
any act or omission of any member of the ALSTOM Group or the JC Group.
7 FURTHER ASSURANCE AND PROTECTION OF RIGHTS
7.1 (a) It is acknowledged that the assignment, licensing or
sublicensing of any Intellectual Property Right, or the
communication or otherwise making available of any
Know-How, to the ABB Ltd Transferred Companies contemplated
by this Annex and the contribution to ALSTOM and/or its
Subsidiaries of any Intellectual Property Rights or
Know-How to be made pursuant to the terms hereof may
require the consent of or notification to any third party
or the cooperation of any undertaking of which ABB Ltd owns
or controls, directly or indirectly, less than 100% of the
issued shares. In such circumstances, ABB Ltd shall use
reasonable efforts in good faith to obtain such consent, to
give such notification and/or to obtain such cooperation
and, provided that such reasonable efforts in good faith
are used, ABB Ltd shall in such circumstances not be in
breach of Articles 4 or 5 but without prejudice to any
compensation which may become payable as described below.
(b) In the event any assignment, contribution, licensing or
sublicensing of any Intellectual Property Rights or Know-How,
or any communication or otherwise making available of any
Intellectual Property Rights or Know-How, to ALSTOM and/or its
Subsidiaries does not occur by March 31, 2001 for the reasons
set forth in Article 7.1(a), then ABB Ltd shall within
fourteen (14) days (or such longer period as ALSTOM and ABB
Ltd shall agree having regard to the complexity of the matter)
pay ALSTOM an amount as compensation for such non-contribution
which shall be such amount as shall be fair and reasonable
having regard to the fair market value of such Intellectual
Property Rights or Know-How and of the effect of its
non-inclusion upon the JC Group, together with interest on
such compensation amount from the, Closing Date to the date of
payment of such compensated amount at an interest rate per
annum equal to the Relevant Rate (as defined in the Joint
Venture Agreement) for three month deposits in effect on the
Closing Date (or, with respect to periods more than three
months after the Closing Date, in effect on the most recent
past date which is exactly three months (or a whole multiple
of three months) after the Closing Date). Upon payment of such
amount to ALSTOM in respect of any particular Asset in
accordance with this Article 7.1(b), ABB Ltd shall cease to be
obligated to cause such Asset to be assigned to, or become
part of, the JC Group.
7.2 Pending the assignment of any rights or the granting of any License
pursuant to this Annex, ABB Ltd and its Subsidiaries shall take all
reasonable steps to maintain and protect the rights to be assigned or
licensed by them.
7.3 ABB Ltd and its Subsidiaries shall, at the request of ALSTOM, and
ALSTOM and its Subsidiaries shall, at the request of ABB Ltd, provide
all reasonable assistance in
5
connection with (i) the defense and/or prosecution of any claim brought
by or against any third party concerning Intellectual Property Rights
or Know-How assigned or licensed by ABB Ltd and/or its Subsidiaries
hereunder or pursuant to the terms of the Reorganisations, and (ii) the
filing, prosecution and amendment or continuation of applications to
register any Intellectual Property Rights assigned or licensed to
ALSTOM and/or its Subsidiaries hereunder or pursuant to the terms of
the Reorganisations.
7.4 ABB Ltd and its Subsidiaries shall not permit to lapse or become
abandoned any Intellectual Property Rights which are registered, or
which are the subject of an application to register, and which are or
are to be licensed to ALSTOM or any member of the ALSTOM Group
hereunder or pursuant to the Reorganisations (or otherwise as a result
of the transactions contemplated by this Agreement or the Joint Venture
Agreement) without first giving ALSTOM the opportunity to maintain the
registration or prosecute the application to register at its own cost
and for its own benefit. The foregoing shall apply mutatis mutandis to
ALSTOM and its Subsidiaries with respect to any Intellectual Property
Rights which are registered, or which are the subject of an application
to register, and which are to be licensed or reserved to ABB Ltd and
its Subsidiaries hereunder or pursuant to the Reorganisations (or
otherwise as a result of the transactions contemplated by this
Agreement or the Joint Venture Agreement).
8 DISSEMINATION OF RIGHTS WITHIN THE ALSTOM GROUP
In respect of Intellectual Property Rights and Know-How assigned or
licensed pursuant hereto (or contributed to the ALSTOM Group under the
terms of the Reorganisations or otherwise owned or held by an
undertaking which at the Closing or thereafter became a member of the
ALSTOM Group pursuant to the Joint Venture Agreement or this Agreement
), each member of the ALSTOM Group may be granted such derivative
rights on such terms and conditions and to such an extent as ALSTOM may
from time to time determine and as may be granted without infringing
the rights of third parties. All Licenses and sublicenses granted to
any Subsidiaries of ALSTOM pursuant to Article 5 (and all derivative
rights thereunder granted pursuant to this Article 8) shall terminate
automatically if the member should cease to be a Subsidiary of ALSTOM.
9 TECHNICAL ASSISTANCE
ABB Ltd and its Subsidiaries and ALSTOM and its Subsidiaries, as the
case may be, shall provide, at no cost to the ALSTOM Group or the ABB
Ltd Group, as the case may be, such technical assistance and
consultation as may reasonably be required and which they are
reasonably able to provide to make effective use of any Intellectual
Property Rights and Know-How assigned or licensed or otherwise made
available to the ALSTOM Group or to the ABB Ltd Group hereunder (or
contributed to the ALSTOM Group under the terms of the Reorganisations
or otherwise owned or held by an undertaking which on the Closing or
thereafter became a member of the ALSTOM Group); provided that such
technical assistance and consultation under this Article 9 shall
continue only for a period of eighteen (18) months from the Settlement
Closing Date, and such technical assistance and consultation shall not
include any research or development.
6
10 NEW TECHNOLOGY
ALSTOM shall grant, or procure that its Subsidiaries grant, to members
of the ABB Ltd Group non-exclusive, non-assignable and
non-sublicensable licenses under such of the Intellectual Property
Rights and Know-How obtained as owner, developed or conceived by any
member of the JC Group after the Closing Date and prior to the
Settlement Closing, in each case for use in activities other than the
Field. Such licenses shall be granted on arms-length terms (including
any royalty to be paid thereunder).
11 HOUSE MARKS
11.1 ABB Ltd or its appropriate Affiliate shall grant ALSTOM (and, at the
request of ALSTOM, any Subsidiary of ALSTOM) the right to use the ABB
Ltd Marks and, pursuant to such grant, shall enter into license
agreements in respect of the ABB Ltd Marks substantially in the form of
Schedule 8. It is understood and agreed that the right to use the ABB
Ltd Marks shall expire twelve (12) months after the Settlement Closing.
11.2 Any license agreement in respect of the ABB Ltd Marks granted to any
member of the ALSTOM Group pursuant to this Article 11 shall terminate
automatically if the member should cease to be a Subsidiary of the
ALSTOM Group. ALSTOM shall procure that no Subsidiary of ALSTOM shall
use any ABB Ltd ▇▇▇▇ without a license agreement entered into pursuant
to this Article 11.
12 ▇▇ ▇▇▇▇▇
12.1 ABB Ltd or its appropriate Affiliate shall grant to ALSTOM (and, at the
request of ALSTOM, any Subsidiary of ALSTOM) the right to use the ▇▇
▇▇▇▇▇ and, pursuant to such grant, shall enter into a license agreement
in respect of the ▇▇ ▇▇▇▇▇ substantially in the form of Schedule 10. It
is understood that the right to use the ▇▇ ▇▇▇▇▇ shall be for a term of
eighteen (18) months from the Settlement Closing Date subject to a
right of renewal on terms and conditions satisfactory to ABB Ltd and
ALSTOM. If the renewal terms are not agreed, then the license agreement
shall terminate and ALSTOM shall cease using the ▇▇ ▇▇▇▇▇.
12.2 The license agreement in respect of the ▇▇ ▇▇▇▇▇ granted to any member
of the ALSTOM Group pursuant to this Article 12 shall terminate
automatically if the member should cease to be a Subsidiary of the
ALSTOM Group. ALSTOM shall procure that no Subsidiary of ALSTOM shall
use any CE ▇▇▇▇ without a license agreement entered into pursuant to
this Article 12.
13 FLAKT MARKS
13.1 ABB Ltd or its appropriate Affiliate shall grant ALSTOM (and, at the
request of ALSTOM, any Subsidiary of ALSTOM) the right to use the FLAKT
Marks and, pursuant to such grant, shall enter into a license
agreements in respect of the FLAKT Marks substantially in the form of
Schedule 11. It is understood and agreed that the right to use the
FLAKT Marks shall be for a term of thirty (30) years from the
Settlement Closing.
7
13.2 Any license agreement in respect of the FLAKT Marks granted to any
member of the ALSTOM Group pursuant to this Article 13 shall terminate
automatically if the member should cease to be a Subsidiary of the
ALSTOM Group. ALSTOM shall procure that no Subsidiary of ALSTOM shall
use any FLAKT ▇▇▇▇ without a license agreement entered into pursuant to
this Article 13.
14 CONSOLIDATIONS AND MERGERS
14.1 Anything in this Annex D to the contrary notwithstanding, ABB Ltd or
ALSTOM may assign its rights under this Annex D (and any License or
sublicense granted hereunder) to the extent permitted in, and subject
to all of the terms and conditions set forth, in Article 18.4 of this
Agreement. It is understood that the licensor or sub-licensor, as the
case may be, may request written confirmation of such substitution.
14.2 The terms of Article 14.1 above shall not apply to the extent that the
substitution described therein requires the consent of or notification
to any third party, unless and until such consent or notification (as
the case may be) has been obtained or made. In such circumstances the
relevant Parties shall use reasonable efforts in good faith to obtain
such consent or to give such notification.
15 CERTAIN COVENANTS
Each of the Parties to this Agreement acknowledges and agrees that, to
the best of its knowledge, all of the Intellectual Property Rights and
Know-How which are predominantly used in and material in the aggregate
to the conduct of the business of the JC is owned by the JC and not
licensed from third parties.
16 SCHEDULES
The listings of certain items in Schedules 2, 3, 5 and 7 are not
necessarily complete.
8
ANNEX E
INDEMNITIES
1 DEFINITIONS
In this Annex E, the following terms shall, unless the context
otherwise requires, have the following respective meanings:
"ABB Ltd Business 1998 Accounts" the ABB Ltd Business 1998 Accounts in the form attached hereto;
"ABB Ltd Excluded Liabilities" (i) the Asbestos Liabilities with respect to ABB Ltd, the
Non-Business Liabilities with respect to ABB Ltd, the Reorganisation
Liabilities with respect to ABB Ltd, the Indemnified Compliance
Costs, the Windsor Site Liabilities, the Nuclear Liabilities, the CE
Reorganization Liabilities and the Non-Transferred Assets
Liabilities, (ii) any Liability for which (or to the extent to
which) any member of the ABB Ltd Group is responsible under any
provision of this Agreement or any other Settlement Document and
(iii) any Liability, to the extent that the existence thereof
constitutes a breach or inaccuracy of a representation, warranty or
covenant of any member of the ABB Ltd Group hereunder or under the
Joint Venture Agreement (whether or not released under the
Releases);
"ABB Ltd Indemnified Parties" the Indemnified Parties with respect to ABB Ltd;
"ALSTOM Excluded Liabilities" the Asbestos Liabilities and the Non-Business Liabilities, each with
respect to ALSTOM;
"ALSTOM Indemnified Parties" the Indemnified Parties with respect to ALSTOM;
"Asbestos Claims" any Liabilities based upon or arising out of the actual or asserted
presence, use, storage, removal, disposal, exposure or alleged
exposure to asbestos or asbestos-containing products, materials or
substances;
"Asbestos Liabilities" (a) with respect to ABB Ltd:
-----------------------
(i) all Liabilities of the CE Companies as of the Closing Date for
past, present or future Asbestos Claims, regardless of when such
Liabilities may be discovered or asserted by claimants;
(ii) without limitation of clause (i), all Liabilities of or
against, or incurred by, either of the CE Companies (or any of their
direct or indirect predecessors or any of their direct or indirect
successors or assigns after the Settlement Closing Date) in
connection with any past, present or future Asbestos Claims, except
for such Asbestos Claims which arise solely out of or relate solely
to the operations of the CE Companies between the Closing Date and
the Settlement Closing Date ("INTERIM PERIOD ASBESTOS LIABILITIES"),
regardless of when such claims may be discovered or asserted by
claimants;
(iii) all Liabilities of the ABB Ltd Transferred Companies other
than the CE Companies, as of the date each such ABB Ltd Transferred
Company became a member of the JC Group, for past, present or future
Asbestos Claims, regardless of when such Liabilities may be
discovered or asserted by claimants;
(iv) all Liabilities of or against, or incurred by, any ABB Ltd
Transferred Company other than the CE Companies in connection with
any Asbestos Claims which arise out of or relate to the operations
of such ABB Ltd Transferred Company (or any of its direct or
indirect predecessors or Affiliates), or any other event, operation,
act or failure to act occurring, or other condition or state of
facts existing with respect to such ABB Ltd Transferred Companies,
in each case prior to the date as of which such ABB Ltd Transferred
Company became a member of the JC Group, regardless of when such
Liabilities may be discovered or asserted by claimants; and
2
(v) all Liabilities of or against, or incurred by, any ALSTOM
Indemnified Party or any JC Indemnified Party, to the extent
directly or indirectly based upon or arising out of (A) any of the
Liabilities described in the foregoing clauses (i)-(iv) of this
definition (including, without limitation, by reason of any actual
or asserted assumption of, or any form of joint and several or
contributory liability for, any of the actual or asserted
Liabilities described in any of such foregoing clauses), or (B) any
of the actual or asserted events, conditions, occurrences,
operations, acts or omissions forming the basis of the claims
described in clause (A) above, regardless of when such Liabilities
may be discovered or asserted by claimants, BUT EXCLUDING, HOWEVER,
for all purposes of this clause (v), any Interim Period Asbestos
Liabilities.
(b) with respect to ALSTOM:
----------------------
(i) all "Post-Closing Asbestos Liabilities," as defined in the CE
Asset Purchase Agreement;
(ii) all Liabilities of the ALSTOM Transferred Companies, as of the
date each such ALSTOM Transferred Company became a member of the JC
Group, for past, present or future Asbestos Claims, regardless of
when such claims may be discovered or asserted by claimants;
(iii) all Liabilities of or against, or incurred by, any ALSTOM
Transferred Company in connection with any Asbestos Claims which
arise out of or relate to the operations of such ALSTOM Transferred
Company (or any of its direct or indirect predecessors or
Affiliates), or any other event, operation, act or failure to act
occurring, or other condition or state of facts existing, in each
case prior to the date as of which such ALSTOM Transferred Company
became a member of the JC Group, regardless of when such Liabilities
may be discovered or asserted by claimants; and
3
(iv) all Liabilities of or against, or incurred by, any ABB Ltd
Indemnified Party, to the extent directly or indirectly based upon
or arising out of (A) any of the Liabilities described in the
foregoing clauses (i), (ii) and (iii) of this definition (including,
without limitation, by reason of any actual or asserted assumption
of, or any form of joint and several contributory liability for, any
of the actual or asserted Liabilities described in either of such
foregoing clauses), or (B) any of the actual or asserted events,
conditions, occurrences, operations, acts or omissions forming the
basis of the claims described in clause (A) above, regardless of
when such Liabilities may be discovered or asserted by claimants; in
the case of each of clauses (i), (ii), (iii) and (iv), other than
any Asbestos Liabilities with respect to ABB Ltd;
"CE Asset Purchase Agreement" the Asset Purchase Agreement dated as of December 29, 1999 between
Combustion Engineering, Inc. and ABB ALSTOM Power Inc.;
"CE Reorganization Liabilities" all Liabilities under any bankruptcy, insolvency, receivership,
fraudulent conveyance, fraudulent transfer, bulk sales or transfer
or other similar law with respect to the transactions effected under
the CE Asset Purchase Agreement, except to the extent that such
Liabilities constitute "Assumed Liabilities," as defined under the
CE Asset Purchase Agreement or Taxes for which Asea ▇▇▇▇▇ Boveri
Inc. ("ABB Inc.") is indemnified under the Stock Purchase Agreement
dated April 1, 2000 between ABB ALSTOM Power Inc. and ABB Inc., all
of which shall be excluded from "CE Reorganization Liabilities"
hereunder;
"Claim" a claim or demand for indemnification pursuant to this Annex E;
"Claim Notice" notice of a Claim given by an Indemnified Party under this Annex E;
"Dispute Notice" notice by the Indemnifying Party timely disputing the recoverability
of any damages with respect to a Claim;
4
"Dispute Period" the period within forty five (45) days following receipt of a Claim
Notice;
"Excluded Liabilities" in the case of ABB Ltd, the ABB Ltd Excluded Liabilities and in the
case of ALSTOM, the ALSTOM Excluded Liabilities;
"GE Liabilities" Liabilities of ABB Ltd or any of its Subsidiaries, and any demands,
proceedings or judgements brought or established by GE or any of its
Subsidiaries against ABB Ltd or any of its Subsidiaries arising out
of or in connection with any breach or alleged breach of the
Undertakings and Indemnity Agreement or of the Transaction
Agreement, to the extent that such breach has not been caused by ABB
Ltd or any of its Subsidiaries;
"Guarantee Liabilities" Liabilities of the ABB Ltd Group arising out of or in connection
with (i) any ABB Ltd Business Guarantees or (ii) any ABB Ltd
Business Contracts Guarantee;
"Indemnified Compliance Costs" ABB Ltd's share of Compliance Costs as provided in Annex G hereto;
"Indemnified Party" in respect of a Party, that Party and each Affiliate of that Party,
and the respective officers, directors, employees, stockholders,
agents and representatives of that Party and each such Affiliate;
"Indemnifying Party" the Party indemnifying an Indemnified Party under this Agreement;
"JC Indemnified Parties" the Indemnified Parties with respect to the JC;
"JC Post-Closing Liabilities" all Liabilities arising out of the ownership, management or
operation of or conduct of the Businesses by the JC from and after
the Settlement Closing Date;
"Non-Business Liabilities" (a) with respect to ABB Ltd:
-----------------------
(i) all Liabilities of the ABB Ltd Group to the extent they are not
Liabilities of the ABB Ltd Business;
5
(ii) all Liabilities of the ABB Ltd Transferred Companies as of the
respective dates such companies became or become (as the case may
be) members of the JC Group to the extent they are not Liabilities
of the ABB Ltd Business;
(iii) the "Excluded Liabilities," as defined in the CE Asset
Purchase Agreement (including, without limitation, the CE Specified
Debt);
(iv) all Liabilities, to the extent they are not Liabilities of the
ABB Ltd Business, which arise out of or relate to any Asset (other
than an ABB Ltd Transferred Company) formerly constituting an Asset
of the ABB Ltd Group that directly or indirectly became or becomes
an Asset of the JC Group pursuant to the Joint Venture Agreement or
this Agreement (including, without limitation, any ABB Ltd
Post-Settlement Transferred Asset that becomes an Asset of the JC
Group pursuant to this Agreement), and which existed as of the date
such Asset so directly or indirectly became or becomes an Asset of
the JC Group pursuant to the Joint Venture Agreement or this
Agreement; and
(v) all Liabilities for Taxes imposed on any consolidated, combined
or unitary group in which ABB Ltd or any of its Affiliates
(including without limitation the ABB Ltd Transferred Companies and
the CE Companies) is included (other than a group consisting solely
of ABB Ltd Transferred Companies and/or the CE Companies), except
for any such Taxes for periods after December 31, 1998 that are
fairly attributable to the ABB Ltd Transferred Companies;
(vi) all Liabilities of the ABB Ltd Transferred Companies and the CE
Companies for Taxes as of the Closing Date, including any deferred
or contingent Taxes, save to the extent reflected in the ABB Ltd
Business 1998 Accounts and except for liability for Taxes incurred
consistent with the Joint Venture Agreement with respect to the
period after December 31, 1998;
6
(vii) all Liabilities for Taxes relating to Assets transferred back
to the ABB Ltd Group in Section 13.2 of this Agreement, including,
without limitation, any Taxes incurred in connection with the return
of such Assets to ABB Ltd; and
(b) with respect to ALSTOM:
(i) all Liabilities of the ALSTOM Group to the extent they are not
Liabilities of the ALSTOM Business;
(ii) all Liabilities of the ALSTOM Transferred Companies as of the
respective dates such companies became members of the JC Group to
the extent they are not Liabilities of the ALSTOM Business;
(iii) all Liabilities, to the extent they are not Liabilities of the
ALSTOM Business, which arise out of or relate to any Asset (other
than an ALSTOM Transferred Company) formerly constituting an Asset
of the "ALSTOM Group" that directly or indirectly became an Asset of
the JC Group pursuant to the Joint Venture Agreement, and which
existed as of the date such Asset so directly or indirectly became
an Asset of the JC Group pursuant to the Joint Venture Agreement;
(iv) all Liabilities for Taxes imposed on any consolidated, combined
or unitary group in which ALSTOM or any of its Affiliates (including
without limitation the ALSTOM Transferred Companies) is included
(other than a group consisting solely of ALSTOM Transferred
Companies), except for any such Taxes for periods after December 31,
1998 that are fairly attributable to the ALSTOM Transferred
Companies;
(v) all Liabilities of the ALSTOM Transferred Companies for Taxes as
of the Closing Date, including any deferred or contingent Taxes,
save to the extent reflected in the ALSTOM Business 1998 Accounts
(as defined in the Joint Venture Agreement) and except for liability
for Taxes incurred consistent with the Joint Venture Agreement with
respect
7
to the period after December 31, 1998; and
"Non-Transferred Assets Liabilities" all Liabilities arising out of (i) any Non-Listed ABB Ltd
Post-Settlement Closing Transferred Assets other than any such
Transferred Assets that are in fact directly or indirectly
transferred to the JC Group pursuant to Article 10 of this Agreement
or (ii) any Disposable Assets;
"Nuclear Liabilities" (i) without limitation of clause (ii) with respect to the CE
Companies, all "Nuclear Liabilities," as that term is defined in the
CE Purchase Agreement, and (iii) all Liabilities to any extent
arising out of or relating to (1) the actual or asserted possession,
use or disposal of, or contamination by, any Hazardous Substances of
a nuclear, radioactive, or transuranic nature, including, without
limitation, spent nuclear fuel, (A) at or on any of the
ABB-Contributed Real Property or the Windsor Site as of the date
such site was transferred to the JC, (B) by any ABB Ltd Transferred
Company (or any of its predecessors or Affiliates) at any time prior
to the date such ABB Ltd Transferred Company became a member of the
JC Group, or (C) by any CE Company or any of its predecessors or
Affiliates) at any time prior to the Closing Date, in each case to
the extent that the same was owned, leased or operated by the ABB
Ltd Group (or any of its predecessors) in connection with the
nuclear energy/power generation business conducted or formerly
conducted by the ABB Ltd Group (the "NUCLEAR POWER BUSINESS");
"Reorganisations Liabilities" costs or expenses or Liabilities with respect to Taxes, arising out
of or in connection with (i) the carrying into effect of or
consummating the Reorganisations or (ii) any direct or indirect
transfer of Parties Transferred Companies, or other Assets of the
ABB Ltd Business or the ALSTOM Business, as the case may be, to the
JC Group pursuant to the Joint Venture Agreement or this Agreement;
"Resolution Period" the thirty (30) day period following receipt by an Indemnified Party
of a Dispute Notice;
8
"Third Party Claim" any Claim in respect of any claim or demand against an Indemnified
Party by any third party;
"Transaction Agreement" the agreement entered into between ALSTOM S.A. and GE pursuant to
which ALSTOM S.A. agreed to sell and GE agreed to buy, ALSTOM S.A.'s
heavy duty gas turbine business;
"Warranties Breach" as defined in Section 4 of this Annex E;
"Windsor Site" as defined in the CE Asset Purchase Agreement";
"Windsor Site Liabilities" as defined in the CE Asset Purchase Agreement.
2 JC POST-CLOSING LIABILITIES
2.1 ALSTOM and the JC shall jointly and severally indemnify and hold
harmless the ABB Ltd Indemnified Parties, from and against any JC
Post-Closing Liabilities.
2.2 Section 2.1 shall become effective automatically upon consummation of
the Settlement Closing.
3 EXCLUDED LIABILITIES
3.1 ABB Ltd shall indemnify and hold harmless the ALSTOM Indemnified
Parties and the JC Indemnified Parties from and against any ABB Ltd
Excluded Liabilities.
3.2 ALSTOM shall indemnify and hold harmless the ABB Ltd Indemnified
Parties from and against any ALSTOM Excluded Liabilities.
3.3 Sections 3.1 and 3.2 shall become effective automatically upon
consummation of the Settlement Closing.
4 GENERAL INDEMNIFICATION OBLIGATIONS
(a) Subject to the limitations of liability in respect of the
Warranties set forth in Part B of Annex K, ABB Ltd shall
indemnify and hold harmless the ALSTOM Indemnified Parties and
the JC Indemnified Parties from and against any Liabilities,
to the extent arising out of, resulting from, based upon or in
connection with (i) any breach or inaccuracy of the
representations or warranties of ABB Ltd, or of any of ABB
Ltd's Affiliates as of the date hereof or as of the Settlement
Closing Date, set forth in this Agreement (including without
limitation in Annex K hereto) or in any Settlement Document
(as if such representations and warranties were made and
given, exactly as written in this Agreement (including without
limitation Annex K hereto) or such other Settlement Document
as the case may be, on the date hereof, on the Settlement
Closing Date and (in the case of the representations and
warranties set forth in Annex K hereto and solely with respect
to the specific ABB Ltd Post-Settlement Closing Transferred
Asset then
9
the subject of a transfer) as of immediately prior to each
transfer of an ABB Ltd Post-Closing Transferred Asset pursuant
to this Agreement) (any of the foregoing, an "ABB Ltd
Warranties Breach"), (ii) any breach, by ABB Ltd, or by any of
ABB Ltd's Affiliates as of the date hereof or as of the
Settlement Closing Date, of any of the covenants made by ABB
Ltd or any such Affiliate in this Agreement (including,
without limitation, Article 12.1 of this Agreement in respect
of ABB Ltd Post-Settlement Closing Transferred Assets) or any
other Settlement Document or (iii) any act or omission of any
member of the ABB Ltd Group on or after January 1, 1999 which,
if Article 8.1(a) of this Agreement had then been in effect,
would have violated said Article 8.1(a).
(b) Subject to the limitations of liability in respect of the
Warranties set forth in Part B of Annex K, ALSTOM shall
indemnify and hold harmless the ABB Ltd Indemnified Parties
from and against any Liabilities to the extent arising out of,
resulting from, based upon or in connection with (i) any
breach or inaccuracy of the representations or warranties of
ALSTOM, or of any of ALSTOM's Affiliates as of the date hereof
or as of the Settlement Closing Date, set forth in this
Agreement or in any Settlement Document (as if such
representations and warranties were made and given, exactly as
written in this Agreement, or such other Settlement Document
as the case may be, on the date hereof and on the Settlement
Closing Date) (any of the foregoing, an "ALSTOM Warranties
Breach"; any ABB Ltd Warranties Breach or any ALSTOM
Warranties Breach, a "Warranties Breach"), (ii) any breach, by
ALSTOM or any of ALSTOM's Affiliates as of the date hereof or
as of the Settlement Closing Date, of any of the covenants
made by ALSTOM or any such Affiliate in this Agreement or any
other Settlement Document, (iii) any breach or inaccuracy of
any of the representations and warranties made by the JC in
this Agreement with respect to the JC Release and (iv) any
breach by the JC of any of its covenants in this Agreement to
be performed after the Settlement Closing Date.
(c) For purposes of this Section 4, the CE Companies shall be
deemed to be "Affiliates" of ABB Ltd, and not to be
"Affiliates" of ALSTOM, as of the date hereof and on the
Settlement Closing Date.
5 REORGANISATIONS LIABILITIES
Each of ALSTOM and ABB Ltd shall indemnify and hold harmless the other
and each member of the other's Group and the JC Group from and against
any Reorganisations Liabilities of the Parties Transferred Companies of
such Party.
6 GE LIABILITIES
6.1 ALSTOM shall indemnify and hold harmless each ABB Ltd Indemnified Party
from and against any GE Liabilities.
6.2 Section 6.1 shall become effective automatically upon consummation of
the Settlement Closing.
10
7 GUARANTEE LIABILITIES
7.1 The JC and ALSTOM shall jointly and severally indemnify and hold
harmless the ABB Ltd Indemnified Parties from and against any Guarantee
Liabilities.
7.2 Section 7.1 shall become effective automatically upon consummation of
the Settlement Closing.
8 INCONSISTENCY
To the extent of any inconsistency between either of Sections 2 and 3
of this Annex E and the other Sections of this Annex E, the other
Sections prevail. To the extent of any inconsistency between Section
3.1 of this Annex E, and Annex G, Section 3.1 shall prevail.
9 CLAIMS
9.1 Subject to Sections 10.1 and 11 below, an Indemnified Party making
a Claim shall:
(a) provide the Indemnifying Party with a Claim Notice; and
(a) make available to the Indemnifying Party all relevant
information which is material to the Claim, which is in the
possession of the Indemnified Party, and which may be
specifically requested by the Indemnified Party from time to
time.
9.2 If a Claim is a Third Party Claim, the Indemnified Party shall deliver
the relevant Claim Notice with reasonable promptness to the
Indemnifying Party, provided that any failure of an Indemnified Party
to do so shall not release the Indemnifying Party from its obligations
under this Annex E except with respect to such Third Party Claim and
then only to the extent it actually is prejudiced by such failure. The
Indemnifying Party will notify the Indemnified Party in writing as soon
as practicable, but in any event during the Dispute Period, whether the
Indemnifying Party disputes the claim of the Indemnified Party in whole
or in part and whether the Indemnifying Party desires, without cost or
expense to the Indemnified Party, to assume the defense of such Third
Party Claim.
10 PROCEEDINGS
10.1 Except as provided in this Section 11, if the Indemnifying Party
notifies the Indemnified Party within the Dispute Period that the
Indemnifying Party desires to assume the defense of a Third Party
Claim, the Indemnifying Party shall have the right and obligation to
defend such Third Party Claim by all appropriate proceedings.
10.2 Proceedings shall be diligently prosecuted by the Indemnifying Party to
a final conclusion or shall be settled at the discretion of the
Indemnifying Party, but only with the consent of the Indemnified Party
in the case of any settlement:
(a) that provides for any relief other than the payment of
monetary damages; or
11
(b) that may materially adversely affect the Indemnified Party,
which consent shall not be unreasonably withheld or delayed. Except as
provided above, the Indemnifying Party shall have full control of such
defense and proceedings, including any settlement.
10.3 If requested by the Indemnifying Party, the Indemnified Party shall, at
no cost to the Indemnified Party, cooperate with the Indemnifying Party
and its counsel:
(b) in contesting any Third Party Claim the defense of which the
Indemnifying Party has assumed in accordance with this Section
11; or
(c) if appropriate and related to the Third Party Claim in
question, in making any counterclaim against the person
asserting the Third Party Claim or any cross-complaint against
any person (other than the Indemnified Party or any of its
Affiliates) with respect to the subject matter of the Third
Party Claim in question.
10.4 The Indemnifying Party shall in any event keep the Indemnified Party
reasonably informed as to the nature and conduct of any Third Party
Claim with respect to which it controls the defense and the Indemnified
Party shall be afforded an opportunity to monitor developments in
connection with such Claim at its sole cost and expense.
10.5 The Indemnified Party may:
(d) at its sole cost and expense, retain or take over the control
of the defense or settlement of any Third Party Claim the
defense of which the Indemnifying Party has elected to
control, if the Indemnified Party irrevocably waives in
writing its right to recover any damages under this Agreement
with respect to such Third Party Claim;
(e) at the cost and expense of the Indemnifying Party, retain
separate counsel to represent it in, but not control, any
defense or settlement undertaken by the Indemnifying Party
pursuant to this Section 11 if outside counsel to the
Indemnified Party reasonably advises the Indemnified Party and
the Indemnifying Party in a written opinion that joint
representation of such parties by a single counsel raises a
potential conflict of interest;
(f) if the proceeding involves a matter solely of concern to the
Indemnified Party which is in addition to the claim for which
indemnification under this Section 11 is being sought, have
the right to control the defense and settlement of such
additional claim at its own cost and expense and with its own
counsel; and
(g) settle and compromise any Claim only with the consent of the
Indemnifying Party, which consent shall not be unreasonably
withheld.
12
11 NET OBLIGATIONS
The indemnity obligations of the Parties under this Annex E shall be
net of any accruals or reserves reflected in the ABB Ltd Business 1998
Accounts and the ALSTOM Business 1998 Accounts. Further , any
indemnification payments made hereunder shall be reduced to take into
account any Tax Benefits currently realized by the Indemnified Party
arising in respect of the Liabilities covered by such indemnification,
net of any additional Taxes required to be paid by the Indemnified
Party as a result of receipt or accrual of the indemnity payment, it
being understood and agreed that, except as otherwise required by law,
the parties intend to treat any indemnification payment as a
contribution to capital or adjustment to purchase price.
12 INSURANCE
The obligations of any Indemnifying Party under this Agreement
(including without limitation this Annex E) shall be determined without
regard to any insurance held by, or otherwise for the benefit of, any
Indemnified Party.
13 COMPLIANCE COSTS
For the avoidance of doubt, Section 10 above shall not apply to any
Compliance Order (as defined in Annex G.)
13
ANNEX F
EMPLOYEES, EMPLOYEE BENEFITS AND PENSION PROVISIONS
PART A: PROVISIONS RELATING TO FUTURE TRANSFER OF EMPLOYEES
The following provisions shall apply with respect to the employees associated
with any ABB Ltd Post-Settlement Closing Transferred Assets ("employees"):
1. Only employees of the ABB Ltd Business and employees predominantly
dedicated to the ABB Ltd Business shall be transferred to the JC Group
(except as otherwise agreed between ALSTOM and ABB Ltd ), and then only
after ABB Ltd shall have agreed with the JC all material matters
relating to the post-transfer benefits to which such proposed
transferred employees would be entitled after directly or indirectly
becoming a member of the JC Group. Such transferred employees shall
receive those pension benefits to which they are entitled under local
pension rules or regulations or similar statutory provisions applicable
to the place of employment of such employees.
2. Where, pursuant to paragraph 1, the employment of any of the employees
is to be transferred from any member of the ABB Ltd Group to the ABB
Ltd Transferred Companies as members of the JC Group:
(i) if such transfers take place in jurisdictions where the EU
Acquired Rights Directive or similar legislation has effect,
the Parties accept that the transfers will be governed by such
legislation and the members of the ABB Ltd Group and the ABB
Ltd Transferred Companies will give effect to it;
(ii) if such transfers take place in other jurisdictions the
transfers will be made on the basis that the ABB Ltd
Transferred Companies will offer employment and provide
benefits as from the date of transfer substantially equivalent
to those on which the relevant employees are currently
employed.
PART B: PROVISIONS RELATING TO EMPLOYEE BENEFITS AND PENSIONS
3. Forthwith after the signing of the Agreement, ALSTOM and ABB Ltd will
establish a joint team comprising representatives of each of ALSTOM and
ABB Ltd and appropriate professional advisers of each of them to
perform the following tasks:
(i) to review all plans and arrangements currently providing any
retirement benefits and/or benefits on termination of
employment and/or medical and death benefits and/or stock
options or similar benefits for or in respect of employees and
former employees of the ABB Ltd Business ("benefit plans");
and
(ii) to advise ALSTOM and ABB Ltd as to the basis on which benefits
should be provided to the employees of the ABB Ltd Business
following the Settlement Closing.
4. In carrying out its functions the joint team shall have regard to the
following considerations:
(i) that it will be desirable that employees will enjoy
substantially equivalent benefits after the Settlement Closing
as before, but that it will also be desirable to integrate the
nature and level of the benefits to all employees of the JC
Group located within the same jurisdiction as soon as
practicable after the Settlement Closing;
(ii) that, consistent with the following provisions, it will be
desirable that the JC Group provides its own benefit plans
independent of ABB Ltd as soon as practicable after the
Settlement Closing;
(iii) accordingly, that:
(a) each existing ABB Ltd benefit plan which relates
solely to the employees and former employees of the
ABB Ltd Business which may be freely assigned to the
JC should be so assigned as soon as practicable;
(b) where such a plan is not assignable the JC should as
soon as practicable establish its own plan providing
substantially equivalent benefits;
(c) where an existing ABB Ltd benefit plan does not
relate solely to the employees or former employees of
the ABB Ltd Business, arrangements should be made
where possible to permit such employee after the
Settlement Closing to continue participation in that
plan until such time as it is practicable and
appropriate for that JC to establish its own plan;
and
(d) in relation to any plan which is a funded plan which
cannot be assigned to the JC, appropriate
arrangements should be made where possible to divide
and transfer plan assets;
(iv) that the cost of providing benefits to employees of the JC
Group after the Settlement Closing shall be borne by the JC
which shall refund to ABB Ltd the cost of the continued
participation in any benefit plans of ABB Ltd.
PART C: UNITED STATES EMPLOYEES
5. ABB Ltd shall, after the Settlement Closing Date, continue to provide
benefits coverage and administrative services under all benefit plans
which currently cover employees or former employees of the ABB Ltd
Business in the United States until (i) December 31, 2000, or (ii) any
earlier date specified in writing by ALSTOM on at least thirty (30)
days prior notice to ABB Ltd.
6 Nothing in this Annex F or the Agreement shall limit ALSTOM's right to
terminate the employment of any ALSTOM employee or its benefit plans.
2
ANNEX G
REAL ESTATE PROVISIONS
1.1 DEFINED TERMS. As used in this Annex G, the following terms shall
have the following meanings:
"ABB LTD-CONTRIBUTED REAL PROPERTY" means any real property
which (or a leasehold interest in which) prior to the Closing Date was owned by
any member of the ABB Ltd Group and heretofore was or hereafter is transferred
to a member of the JC Group, whether directly or as part of any ABB Ltd
Transferred Company (or a CE Company), including any ABB Ltd Post-Settlement
Closing Transferred Assets.
"ALSTOM-CONTRIBUTED REAL PROPERTY" means any real property
which prior to the Closing Date was owned by any member of the ALSTOM Group and
heretofore or hereafter transferred to a member of the JC Group, whether
directly or as part of any ALSTOM-Transferred Company.
"COMPLIANCE COSTS" shall mean the costs and expenses
(including fines and penalties) incurred by a party or any of its Affiliates
pursuant to a Compliance Order, as applicable.
"COMPLIANCE ORDER" means an order, directive or similar action
issued or taken by a Regulatory Authority having competent jurisdiction over any
Real Property (or the ordinary course operations conducted thereat as of the
date of such property's transfer to the JC Group) (i) to remove, remediate or
cleanup any Environmental Condition, (ii) to bring such ABB Ltd-Contributed Real
Property (or the ordinary course operations conducted thereat as of the date of
its transfer to the JC Group) into compliance with Environmental Laws applicable
to such property, or (iii) to pay fines or penalties as a consequence of such
non-compliance.
"ENVIRONMENTAL CONDITION" shall mean any Hazardous Substance
condition existing on, at, under or over any ABB Ltd-Contributed Real Property
as of the date of its transfer to the JC Group.
"ENVIRONMENTAL LAW" means the local, county, state, provincial
and/or federal laws (including common law), regulations or other legally binding
requirements of any jurisdiction in which the Alstom-Contributed Real Properties
or the ABB Ltd-Contributed Real Properties are located and which govern the
existence of or provide a remedy for release or emissions of Hazardous
Substances, or which relate to the protection of persons, natural resources or
the environment, the management of Hazardous Substances, or other activities
involving Hazardous Substances, as such laws have been amended or supplemented,
in each case as in effect on or prior to the Closing Date, except that, with
respect to the obligations of the JC pursuant to Paragraph 1.4, "Environmental
Law" shall mean and include all of the foregoing as in effect from time to time.
"HAZARDOUS SUBSTANCE" means any substance, material or waste
that is regulated under any Environmental Law or is deemed by any Environmental
Law to be "hazardous,
"toxic," a "contaminant," "waste" or a "pollutant" (or words with similar
meaning) and shall include, without limitation, petroleum or petroleum products,
PCB's, PCB wastes, asbestos, asbestos containing products and radioactive
substances.
"JC REAL PROPERTIES" means the Real Properties and any other
real property owned or held by the JC Group as of, or prior to, the Settlement
Closing Date.
"REAL PROPERTIES" means, collectively, the ALSTOM-Contributed
Real Properties, the ABB Ltd-Contributed Real Properties and the JC Real
Properties.
"REMEDIAL ACTION" shall mean any action required to be taken
pursuant to a Compliance Order.
1.2 ABB LTD SHARE OF COMPLIANCE COSTS. (a) ABB Ltd and ALSTOM shall
each share, in the manner specified in Paragraph 1.2(b) below, in the Compliance
Costs incurred by the ALSTOM Group in connection with any Remedial Actions
undertaken at any ABB Ltd-Contributed Real Property.
(b) With regard to Compliance Costs incurred by the ALSTOM Group
which are to be shared pursuant to Paragraph 1.2(a) above, ABB Ltd shall pay
(or reimburse the relevant member of the ALSTOM Group for) 50% of such
Compliance Costs up to the initial aggregate amount of Ten Million Dollars
($10,000,000). To the extent that such Compliance Costs exceed Ten Million
Dollars ($10,000,000) in the aggregate, ABB Ltd shall pay (or reimburse the
relevant member of the ALSTOM Group for) 100% of the Compliance Costs in
excess of Ten Million Dollars ($10,000,000) up to the maximum aggregate
amount of Fifty Million Dollars ($50,000,000), including, for purposes of
determining such maximum aggregate amount, ABB Ltd's 50% share (but
excluding, for purposes of determining such maximum aggregate amount,
ALSTOM's 50% share) of the initial Ten Million Dollars ($10,000,000) of
Compliance Costs incurred by the parties pursuant to this Paragraph 1.2(b).
For the avoidance of doubt, in no event shall the maximum aggregate liability
of ABB Ltd to pay or reimburse the JC for Compliance Costs incurred by it
under this Annex G exceed the amount of Fifty Million Dollars ($50,000,000).
(c) Notwithstanding anything to the contrary in this Annex G, ABB Ltd
shall not be obligated to pay or reimburse any member of the JC Group for
Compliance Costs under this Annex G to the extent that such Compliance Costs
were accrued or reflected in the ABB Ltd Business 1998 Accounts attached to
Annex E. For the avoidance of doubt, ABB Ltd's obligations under this Paragraph
1.2 shall exclude all Compliance Costs to the extent arising out of or relating
to periods from and after the Closing Date or, if applicable, any later date of
transfer. ABB Ltd shall indemnify and hold harmless each member of the ALSTOM
Group from and against any Liabilities arising out of any breach of its
obligations under this Annex G in accordance with Annex E.
(d) In connection with Compliance Costs incurred by the ALSTOM Group
any portion of which ABB Ltd is obligated to pay or reimburse to ALSTOM
hereunder, the ALSTOM Group shall act in good faith and use reasonably prudent
business practices consistent
2
with achieving compliance with Environmental Law in the place where the ABB
Ltd-Contributed Real Property at which such actions are being carried out is
located.
1.3 JC REMEDIAL ACTIONS. The JC shall be responsible for bringing all
Real Properties into compliance with Environmental Laws (and maintaining such
compliance), and remediating all Environmental Conditions, from and after the
Closing Date (or, if applicable, such later date of transfer to the JC Group).
For the avoidance of doubt, the JC's obligations under this Paragraph 1.3 shall
include, without limitation, all Liabilities arising out of or relating to
periods from and after (but not prior to) the Closing Date (or, if applicable,
such later date of transfer to the JC Group) for non-compliance matters which
existed at any of the ALSTOM-Contributed Real Properties or the ABB
Ltd-Contributed Real Properties as of the Closing Date (or, if applicable, such
later date of transfer to the JC Group) or arose after the Closing Date (or, if
applicable, such later date of transfer to the JC Group). The JC shall discharge
or pay all Liabilities incurred in connection with the performance of its
obligations under the preceding sentence. ALSTOM shall indemnify and hold
harmless (on an after-tax basis, if applicable) each member of the ABB Ltd Group
from and against any Liabilities arising out of any breach of its obligations
under this Annex G. Nothing in this Paragraph 1.3 shall limit or affect ABB
Ltd's obligations under Paragraphs 1.2 (a) and (b), even if such obligations
require ABB Ltd to make reimbursement payments in respect of actions taken by
the ALSTOM Group pursuant to this Paragraph 1.3.
1.4 CERTAIN LIMITATIONS. The obligations of ABB Ltd under this Annex G
shall be subject to the following restrictions and limitations:
(a) ABB Ltd shall only be liable for Compliance Costs under
this Annex G to the extent (i) mandated by a Compliance Order and (ii) received
by the ALSTOM Group prior to the second anniversary of the Settlement Closing
Date. ABB Ltd shall not be liable for any incremental Compliance Costs under
this Annex G to the extent that the same are attributable to any changes in
Environmental Laws occurring from and after the Closing Date.
(b) ABB Ltd shall be obligated to pay or reimburse the ALSTOM
Group for only the least expensive approaches and measures for correcting or
abating any specific instance of non-compliance with Environmental Laws or
Environmental Conditions, as applicable, that substantially comply with the
relevant Compliance Order and are reasonably available in respect of each matter
for which ABB Ltd is obligated to pay Compliance Costs hereunder. If ALSTOM or
its Affiliates undertakes any approaches or measures that are more expensive
than such least expensive approach, then ABB Ltd shall be liable only for the
amounts that it would have been responsible for had such least expensive
approaches and measures been employed.
(c) ALSTOM shall permit (and shall cause the JC and any other
Affiliates to permit) ABB Ltd and its representatives, agents and contractors
reasonable access to the ABB Ltd-Contributed Real Properties to permit ABB Ltd
to assess and monitor its obligations and the activities of the JC hereunder.
Prior to starting any work for which it wishes to seek repayment of Compliance
Costs from ABB Ltd hereunder, ALSTOM shall provide ABB Ltd and/or its
representatives with a plan of such activities and an estimate of the costs
thereof, and thereafter shall keep ABB Ltd reasonably informed as to the
progress of such remediation.
3
1.5 ENVIRONMENTAL TESTING. (a) Except as provided in Paragraph 1.6(b)
below, the JC and ALSTOM agree that, subsequent to the execution of this
Agreement, neither the JC, ALSTOM nor their respective Affiliates or
representatives (including, without limitation, any member of the JC Group)
shall conduct any environmental testing, assessments, audits, inspections, soil,
water, or air sampling, or any other form of evaluation of the ABB
Ltd-Contributed Real Properties in respect of such properties' compliance with
Environmental Laws or the existence of Environmental Conditions on, under,
around or above such sites ("Environmental Testing"). The restriction set forth
in the preceding sentence shall remain in force so long as ABB Ltd is obligated
to pay Compliance Costs under this Annex G.
(b) Notwithstanding Paragraph 1.6(a), the JC shall be
entitled, upon prior written notice to ABB Ltd (to the extent that such prior
written notice is reasonably practicable under the circumstances), to conduct
Environmental Testing at the ABB Ltd-Contributed Real Properties if, and to the
extent, that such Environmental Testing is (or in the good faith judgment of
ALSTOM or any applicable Affiliate is): (i) required by an Environmental Law
applicable to such a site; (ii) reasonably necessary to ensure compliance with
an Environmental Law applicable to such site, but only if the JC has received
written information from a Regulatory Authority indicating that such site may
not be in compliance with an Environmental Law applicable to such site, or as
reasonably necessary (in the good faith judgment of ALSTOM and its Affiliates)
to address any risk of harm to human health or safety or of harm to property;
(iii) mandated by a Regulatory Authority having competent jurisdiction over such
site or over an Environmental Law applicable to such site; (iv) reasonably
requested by an unaffiliated third party seeking to assume or purchase an
interest in such site in a bona fide transaction; (v) reasonably requested by an
unaffiliated bank or similar institutional lender in connection with a bona fide
proposed financing or borrowing transaction of the JC; or (vi) reasonably
necessary in connection with attempting to settle any bonafide third-party claim
or legal proceeding made or instituted by a third party, if and to the extent
that such Environmental Testing is directly relevant to the subject matter of
such claim or legal proceeding.
(c) ABB Ltd shall not be responsible for any Compliance Costs
which arise from or relate to a Compliance Order resulting from, directly or
indirectly, any Environmental Testing undertaken in breach of this Paragraph
1.5.
1.6 RESTRICTIONS ON REMEDIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
ANNEX G, IN NO EVENT SHALL ANY INDEMNIFYING PARTY BE LIABLE TO ANY INDEMNIFIED
PARTY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN
CONNECTION WITH ANY MATTER FOR WHICH THE INDEMNIFYING PARTY IS OBLIGATED TO
INDEMNIFY UNDER THIS ANNEX G.
1.7 ENTIRE OBLIGATION. This Annex G sets forth the entire obligation of
ABB Ltd to ALSTOM or its Affiliates with respect to Compliance Orders and
Compliance Costs; provided however, that nothing in this Annex G shall limit any
liability or obligation that any member of the ALSTOM Group, the ABB Ltd Group
or the JC Group may have to each other pursuant to the obligations set forth in
Annex E or under the CE Asset Purchase Agreement.
1.8 ABB LTD EXCLUDED LIABILITIES. This Annex G shall not apply with
respect to Environmental Conditions, Compliance Orders and Compliance Costs at
the "Windsor Site" or
4
in respect of any "Windsor Site Liabilities" (as defined in the CE Asset
Purchase Agreement), any Nuclear Liabilities or any other ABB Ltd Excluded
Liabilities (other than Indemnified Compliance Costs), all of which shall be
indemnified by ABB in accordance with the provisions of Annex E. None of such
other ABB Ltd Excluded Liabilities shall be counted against the dollar amounts
set forth in Paragraph 1.2(b) above.
1.9 EFFECTIVENESS. This Annex G shall be effective automatically upon
the occurrence of the Settlement Closing.
5
ANNEX H
WORKING PRINCIPLES
BETWEEN ALSTOM, ABB LTD AND THE JC
IN THE FIELD OF
POWER GENERATION PROJECT DEVELOPMENT,
PROJECT FINANCE/STRUCTURED FINANCE,
PROJECT INVESTMENT
1 PRINCIPLE OF FREEDOM OF ACTION
All Parties are free to engage in the above activities for their own
account and/or in conjunction with any third party, subject to the
following restrictions, provided that it is understood and agreed that
this paragraph 1 is an exception only to paragraph 3 of, and not to any
other paragraph of, Schedule 15.1 to this Agreement (Prohibited
Activities).
1.1 PRINCIPLE OF PREFERENCE TO THE JC
Whenever a member of the ALSTOM Group or the ABB Ltd Group lead
develops (or contributes to lead develop) a turnkey power plant project
(a "Project"), the JC is given an option of first refusal for all EPC
contracts and related EPC service contracts in relation to the Project,
provided that such contracts have not been awarded prior to such
involvement by a member of the ALSTOM Group or the ABB Ltd Group.
1.2 PRINCIPLE OF CONSULTATION PREFERENCE TO PARENTS
Whenever the JC acts as lead developer and/or lead finance arranger for
a Project above $100 million, both ALSTOM's and ABB Ltd's financial
services units will be consulted by the JC, so as to allow them to
offer to provide the JC project finance services on an arm's length
basis.
ANNEX K
WARRANTIES
PART A: WARRANTIES
ABB Ltd hereby represents and warrants severally to each of (i) the JC and (ii)
ALSTOM as set forth in the numbered paragraphs below (collectively, the
"Warranties").
ABB Ltd shall be deemed to have remade the Warranties set forth in Sections
1(b), (c) and (d), 2 and 3 of this Part A of Annex K severally to each of the JC
and ALSTOM prior to each transfer in respect of ABB Ltd Post-Settlement Closing
Transferred Assets, subject to any act done or omitted to be done after the date
of this Agreement with the specific written approval of ALSTOM and except as may
otherwise be agreed by ALSTOM and ABB Ltd in writing ("Permitted Exceptions").
1. TITLE
(a) A member or members of the ABB Ltd Group have directly or
indirectly conveyed to the JC Group good title to all of the
shares of the ABB Ltd Transferred Companies, and all other
Assets, heretofore conveyed, or intended or required to have
been conveyed, directly to the JC by such Group pursuant to
the Joint Venture Agreement (the "Directly Conveyed Assets"),
free from any Encumbrance (other than a Permitted
Encumbrance). One or more of the ABB Ltd Transferred Companies
(or one of the CE Companies), heretofore directly or
indirectly conveyed to the JC had, as of the Closing Date (or
such other date on which any particular such ABB Ltd
Transferred Company (or CE Company) was directly or indirectly
conveyed to the JC Group), good title to all of the shares of
ABB Ltd Transferred Companies, and all other Assets,
heretofore conveyed, or intended or required to have been
conveyed, directly or indirectly to the JC pursuant to the
Joint Venture Agreement (other than the Directly Conveyed
Assets), including without limitation all Assets (other than
the ABB Ltd Post-Settlement Closing Assets) reflected in the
ABB Ltd Business 1998 Accounts (and not disposed of by the ABB
Ltd Group prior to the Closing Date in accordance with the
Joint Venture Agreement), free from any Encumbrance (other
than a Permitted Encumbrance). At the time of the sale of the
B/A Shares (as defined in the Joint Venture Agreement) to
ALSTOM or members of the ALSTOM Group pursuant to Article 3.3
of the Joint Venture Agreement, the B/A Shareholders (as
defined in the Joint Venture Agreement) had, and did convey to
the designated members of the ALSTOM Group, good title to the
B/A Shares (as defined in the Joint Venture Agreement) subject
to no Encumbrances.
(b) A member or members of the ABB Ltd Group have, and, at the
respective dates on which they are intended or required to be
conveyed to a member of the JC Group, will convey to the JC,
good title to all of the shares of the ABB Ltd Transferred
Companies, and all other Assets intended or required to be
conveyed directly to a member of the JC Group by the ABB Ltd
Group pursuant to Article
10 of this Agreement (the "Future Directly Conveyed Assets"),
free from any Encumbrance (other than a Permitted
Encumbrance).
(c) One or more of the ABB Ltd Transferred Companies hereafter
directly or indirectly conveyed or intended or required to be
conveyed to the JC will have, as of the date on which any
particular such ABB Ltd Transferred Company is directly or
indirectly conveyed or intended or required to be conveyed to
the JC Group, good title to all of the shares of ABB Ltd
Transferred Companies, and all other Assets, hereafter
conveyed or intended or required to be conveyed directly or
indirectly to the JC pursuant to this Agreement (other than
the Future Directly Conveyed Assets), free from any
Encumbrance (other than a Permitted Encumbrance).
(d) As of the relevant dates of direct or indirect conveyance or
intended or required direct or indirect conveyance specified
in the preceding paragraphs, no third party had or will have,
as the case may be, (i) any option or other right to acquire
any equity interest in the ABB Ltd Transferred Companies
conveyed (or intended or required to have been conveyed) to
the JC (directly or indirectly) by the ABB Ltd Group, or (ii)
any option or other right to acquire any of the Assets (other
than ABB Ltd Transferred Companies) conveyed (or intended or
required to have been conveyed) to the JC directly or
indirectly through the ABB Ltd Transferred Companies by the
ABB Ltd Group and material to the ABB Ltd Business, except (in
the case of this clause (ii)) pursuant to a Permitted
Encumbrance.
2. CORPORATE AUTHORITY, ETC
(a) At the time of execution of the Joint Venture Agreement and
the Shareholders Agreement, respectively, each of the parties
thereto (other than ALSTOM and the JC) had the requisite
corporate power and corporate authority to execute and deliver
the Joint Venture Agreement and the Shareholders Agreement,
respectively, to perform its obligations thereunder and to
consummate the transactions provided for thereby. At the time
of execution of the Joint Venture Agreement and the
Shareholders Agreement, respectively, the execution, delivery
and performance of the Joint Venture Agreement and the
Shareholders Agreement, respectively, had been duly authorized
by all necessary corporate action of each of the parties
thereto (other than ALSTOM and the JC) (including without
limitation any necessary shareholder action). At the time of
execution of the Joint Venture Agreement and the Shareholders
Agreement, respectively, the Joint Venture Agreement and the
Shareholders Agreement, respectively, constituted the valid
and binding obligation of each of the parties thereto (other
than ALSTOM and the JC).
(b) ABB Ltd has the requisite corporate power and corporate
authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions
provided for hereby. The execution, delivery and performance
of this Agreement has been duly authorized by all necessary
corporate action of
2
ABB Ltd (including without limitation any necessary
shareholder action). This Agreement constitutes the valid and
binding obligation of ABB Ltd.
3. TAX
As of the Closing, (i) all of the Tax Returns and reports of the ABB
Ltd Transferred Companies required by law to have been filed had been
filed and all Taxes shown as payable thereunder had been paid or
accrued; and (y) no deficiency assessment or proposed adjustment of the
ABB Ltd Transferred Companies' Taxes was pending. The foregoing
provisions apply mutatis mutandis with respect to social charges or
contributions.
4. NO CONFLICTS
The execution and delivery, and performance to date, of the Joint
Venture Agreement and the Shareholders Agreement by members of the ABB
Ltd Group, and the consummation to date by such members of the ABB Ltd
Group of the transactions contemplated thereby (including without
limitation the pre-Closing consummation by such members of the ABB Ltd
Group of the ABB Ltd Reorganisation), has not conflicted with, or
resulted in a material breach or default, a right of any third party to
terminate or any similar result under, any Contract binding on any
member of the ABB Ltd Group (including without limitation the ABB Ltd
Transferred Companies).
3
ANNEX K
PART B: NATURE OF WARRANTIES
1. NEGOTIATIONS
No Warrantor shall be under any liability for any statements or
representations made during negotiations leading to the execution of
this Agreement, except to the extent that such statements or
representations are set forth in this Agreement or any Ancillary
Agreements, provided that this sentence does not limit or modify the
express obligations of any person under any Settlement Document. To the
extent permitted by applicable law, no claim under this Agreement
(including without limitation Annex E) shall be prejudiced or reduced
in consequence of any information relating to either of the Businesses
(other than information expressly set out in this Agreement) which may
have or may come to the knowledge of any member of the JC Group or of
the Party asserting the claim (or any member of its Group) prior to or
after the execution of this Agreement.
2. CONTINGENT LIABILITIES
If any claim under the Warranties is based upon a liability which is
contingent only, the relative Warrantor shall not be liable to make any
payment unless and until such contingent liability becomes an actual
liability.
3. LIMITS OF LIABILITY
No Warrantor shall be liable in respect of any Warranties Breach:
(a) unless the amount for which ALSTOM on the one hand, or ABB Ltd
on the other hand, is liable (after giving effect to the other
provisions of this Annex K), exceeds Euros Ten Millions (EURO
10,000,000) in the aggregate for all claims and then only to
the extent of any such excess and, provided, however, that the
aggregate liability (after giving effect to the other
provisions of this Annex K) of each of ALSTOM on the one hand,
and ABB Ltd on the other hand in respect of all Warranties
Breaches shall not exceed an amount equal to Euros Three
Hundred Million (EURO 300,000,000), provided that the
foregoing provisions of this clause (a) shall not apply to any
inaccuracy or breach of the Warranties in Section 1 and
Section 2 of Part A of this Annex K or any inaccuracy or
breach of the representations and warranties set forth in
Articles 5.1(a), 5.1(b), 5.1(c) (except as to enforceability
of the Settlement Documents in accordance with their
respective terms), 5.1(g), 5.3(a), 5.3(b), 5.3(c) (except as
to enforceability of the Settlement Documents in accordance
with their respective terms), 5.4(a), 5.4(b) or 5.4(c) (except
as to enforceability of the Settlement Documents in accordance
with their respective terms) of this Agreement, and any
liability of ALSTOM on the one hand, or ABB Ltd on the other
hand, as the case may be, in respect of any inaccuracy or
breach described in this proviso should be disregarded for
purposes of computations under the foregoing provisions of
this clause (a);
(b) in respect of any Warranties Breach under the Warranties in
Section 3 of Part A of this Annex K, after the expiration of
all relevant statutes of limitation (after taking into account
all extensions and waivers thereof), but in no event after the
tenth anniversary of the date which is 60 days after the
Closing Date or the date of the relevant transfer of the ABB
Ltd Post-Settlement Closing Transferred Assets, as the case
may be, provided that the foregoing ten (10) year limitation
period shall not apply in respect of any matter where an audit
or examination, or notice of audit or examination, by any
Taxing Authority shall have commenced or been given, as the
case may be, prior to the expiration of such period.
(c) after eighteen (18) months of the date hereof in respect of
any Warranties Breach under Section 4 of Part A of this Annex
K; and
(d) for any claim arising, or for any increase in liabilities, as
a result of any change in the law which occurred or occurs
after December 31, 1998, even if such change has retroactive
effect.
A Warrantor shall remain liable after the relevant date referred to in
clause (b) or (c) above, to the extent that notice in reasonable detail
of any Warranties Breach shall have been given to ABB Ltd prior to such
relevant date (but only with respect to the specific claims so
described in reasonable detail in such notice), provided that within
six (6) months of such notice arbitration proceedings shall have
commenced in accordance with Article 18.9 in respect of such claims.
4. CO-OPERATION OF THE PARTIES
Each Party shall use all reasonable efforts to co-operate with the
relevant Warrantor hereunder as and to the extent reasonably requested
from time to time by (and at the expense of) such Warrantor, so as to
mitigate any loss giving rise to a claim for a Warranties Breach.
5. REMEDIATION
To the extent that any Warranties Breach is capable of remedy, the
relevant Warrantor shall be afforded a reasonable opportunity to remedy
the matter complained of.
6. KNOWLEDGE OF WARRANTIES BREACH
A Warrantor shall not be liable for any claim or any increase in a
claim for a Warranties Breach to the extent that such claim or
increased claim is attributable to any act or omission of the JC (after
the relevant date of transfer of Assets to the JC Group) or (before or
after the relevant date of transfer) of the other Warrantor or a member
of such Warrantor's Group with actual knowledge (i) of such Warranties
Breach and (ii) that such act or omission could reasonably be or have
been expected to give rise to or increase such claim and a reasonable
alternative course of action was available to the JC Group or the other
Warrantor, as the case may be, which could be expected not to have
given rise to such claim or to a claim of such amount.
2
7. INFORMATION
A Warrantor shall be entitled to inspect and obtain copies of all the
records and papers of the JC Group and to obtain such information as it
may in each case reasonably require upon reasonable notice to verify:
(a) the amount of any claim for breach of any of the Warranties or
any other provision of this Agreement; and
(b) the measures taken (or which ought to have been taken) in
mitigation by the JC pursuant hereto.
8. NO LIMITATION OF RIGHTS
Nothing in this Annex K limits the rights of the Parties with respect
to any matter other than a Warranties Breach.
3
SCHEDULE 15.1
PROHIBITED ACTIVITIES
1. Design, engineering, manufacturing, marketing and sale of:
(i) turnkey power plants of 50MW or greater (other than nuclear
power plants); or
(ii) combined cycle (ie combined gas turbine and steam turbine)
power plants.
In addition, for turnkey power plants under 50 MW, the JC Group shall
have an option of "first refusal/last call" for all major components
comprised within the activities of the JC Group.
2. Operation & maintenance services for power plants over 20MW.
3. Power generation project development or project finance other than in
accordance with Annex H to the Agreement.
4. Comprehensive renovation, revamping or repowering of a power plant.
5. Design, engineering, manufacturing or sale of the following components:
(i) gas turbines of 250 KW and above and non-conventional/high
speed gas turbines, so-called microturbines, only 5 MW and
above;
(ii) steam turbines;
(iii) hydro turbines;
(iv) boilers;
(v) power generation heat exchangers; or
(vi) 2 pole generators above 20 MW.
4 pole and higher pole generators above 280/p MW (p = number
of poles)
Notwithstanding the above, the sale of such components shall not be
prohibited if the JC Group does not exercise its option under the
"first refusal/last call" referred to in 1 above.
6. Service of or the supply of spare parts for:
(i) gas turbines;
(ii) steam turbines;
(iii) hydro turbines;
(iv) boilers;
(v) power generation heat exchangers; or
(vi) 2 pole generators above 20 MW.
4 pole and higher pole generators above 280/p MW (p = number
of poles)
unless such service or the supply of spare parts is provided as part of
an operation & maintenance contract for power plants up to 20 MW.
7. District Heating.
8. Design, engineering, manufacture and sale of distributed power systems
equipment including power generation equipment using alternative or
renewable energy sources (including but not limited to fuel cells, wind
and solar power) with individual power output of over 10 MW. This
prohibition does not apply to PEM (proton-exchange membrane)
technology.
AMENDMENT TO
SHARE PURCHASE AND SETTLEMENT
AGREEMENT
This Amendment to
Share Purchase and Settlement Agreement (this
"AMENDMENT AGREEMENT") dated as of May 11, 2000 is made by and among ABB Ltd, a
corporation organized and existing under the laws of Switzerland ("ABB LTD"),
ALSTOM, a corporation organized and existing under the laws of France
("ALSTOM"), and ABB ALSTOM Power NV, a corporation organized and existing under
the laws of The Netherlands (the "JC").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, ABB Ltd, ALSTOM and the JC are parties to a
Share Purchase and
Settlement Agreement dated as of March 31, 2000 (the "SETTLEMENT AGREEMENT");
WHEREAS, ABB Ltd, ALSTOM and the JC wish to amend the Settlement
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the parties hereby agree
as follows:
1. DEFINITIONS.
-----------
Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Settlement Agreement.
2. AMENDMENT TO DEFINITIONS.
------------------------
(a) The definition of "Agreement" in Article 1.1 of the Settlement
Agreement is amended by inserting ", as amended" at the end.
(b) The definition of "CE Asset Purchase Agreement" in Article 1.1 of
the Settlement Agreement is amended by inserting ", as amended" at the end.
(c) The definition of "CE Companies" in Article 1.1 of the Settlement
Agreement is amended by deleting the word "and" after the word "Inc." and
replacing it with a comma (,) and adding "and CE LLC" at the end.
(d) The definition of "CE LLC" is added to Article 1.1 of the
Settlement Agreement after the definition of "CE Companies" as follows:
" "CE LLC" ▇-▇ ▇▇▇▇▇▇▇ Real Estate, LLC, a Connecticut
limited liability company of which Combustion
Engineering, Inc. is the sole member;"
(e) The definition of "Windsor Site Lease" in Article 1.1 of the
Settlement Agreement is amended by deleting the name "Combustion Engineering,
Inc." and inserting "CE LLC" in its place.
3. ADDITIONS TO SETTLEMENT DOCUMENTS.
---------------------------------
The Parties confirm and, in any event, agree that the following
agreements and documents shall be deemed "Settlement Documents" for purposes of
the Settlement Agreement:
(a) the Windsor Site Lease; and
(b) the Services Agreement dated as of May 1, 2000 between CE LLC and
ABB ALSTOM Power, Inc. relating to management services conducted at the Windsor
Site.
4. AMENDMENT TO ARTICLE 2.3.
------------------------
Article 2.3(c)(3) of the Settlement Agreement is amended to add the
punctuation and words ", CE LLC" after the words "Boveri Inc.".
5. AMENDMENT TO ARTICLE 3.3.
------------------------
Article 3.3 of the Settlement Agreement is amended by deleting the
words "Prior to" at the beginning thereof and inserting "Within ten (10)
Business Days after", and by deleting the word "on" in the last sentence and
inserting "within (10) Business Days after".
6. AMENDMENT TO ARTICLE 14.7.
-------------------------
Article 14.7 of the Settlement Agreement is amended by inserting the
name "ABB Ltd" at the end of the last line on page 71 of the Settlement
Agreement.
7. AMENDMENT TO ARTICLE 15.2.
-------------------------
Article 15.2(a)(ii) of the Settlement Agreement is amended by deleting
the word "the" and the word "Group" before and after, respectively, the name
"ALSTOM" on the tenth line thereof and inserting "and its Subsidiaries" after
the name "ALSTOM".
8. AMENDMENT TO ARTICLE 16.1.
-------------------------
Article 16.1 of the Settlement Agreement is amended by deleting the
word "the" and the word "Group" before and after, respectively, the name
"ALSTOM" on the third line of page 77 of the Settlement Agreement and inserting
"or any of its Subsidiaries" after the name "ALSTOM".
9. AMENDMENT TO ARTICLE 9.
----------------------
Article 9.1 of the Settlement Agreement is amended by deleting the text
thereof and inserting the following:
"9.1 NATURE OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Parties in this Agreement (including,
without limitation, the representations and warranties of ABB Ltd made in Annex
K hereto), shall survive the Settlement Closing for a period of ten (10) years
(or until such earlier date as may specifically be provided in Annex K in
relation to specific Warranties), and the covenants of the Parties in this
Agreement shall survive the Settlement Closing indefinitely (or for such shorter
period as may specifically be provided in relation to specific covenants), and
in each case shall not be affected in any respect by the Settlement Closing or
any investigation conducted by either Party, or any of its Affiliates, prior to,
on or after the date hereof, or any information which either Party, or any of
its Affiliates, may have received or receive prior to, on or after the date
hereof."
10. AMENDMENT AND RESTATEMENT OF EXHIBIT A (ALSTOM RELEASE), EXHIBIT F (JC
----------------------------------------------------------------------
RELEASE) AND EXHIBIT G (ABB LTD RELEASE).
-----------------------------------------
(a) Exhibit A of the Settlement Agreement (ALSTOM Release) is amended
and restated in its entirety in the form set forth in Exhibit A hereto.
(b) Exhibit F of the Settlement Agreement (JC Release) is amended and
restated in its entirety in the form set forth in Exhibit B hereto.
(c) Exhibit G of the Settlement Agreement (ABB Ltd Release) is amended
and restated in its entirety in the form set forth in Exhibit C hereto.
11. AMENDMENT TO EXHIBIT H (COMBUSTION ENGINEERING AND CONNECTICUT VALLEY
---------------------------------------------------------------------
AGREEMENT).
-----------
(a) In the third recital to the Combustion Engineering and Connecticut
Valley Agreement, the words ", as amended" are inserted immediately before "(the
"Settlement Agreement");".
(b) Immediately after Section 6.01(c) of the Combustion Engineering and
Connecticut Valley Agreement, a new Section 6.01(d) is inserted as follows:
"(d) Without limitation of the Company's obligations
under the CE Asset Purchase Agreement, if, as of the Closing,
the Company owns any
Assets other than "Excluded Assets" as defined in the CE Asset
Purchase Agreement and other than CE LLC (such Assets other
than such Excluded Assets and other than CE LLC, together with
any proceeds thereof whenever received, the "Reclaimable
Assets"), then Buyer shall cause the Company promptly to
convey to Seller or its designee (beneficially and, to the
extent applicable, as of record) such Reclaimable Assets as
Seller may specify from time to time after the Closing. The
parties agree to cooperate and use their best efforts, and
Buyer agrees that it will cause the Company to cooperate and
use its best efforts, to obtain or make any governmental or
third party consents, permits, approvals and filings, and to
satisfy any other technical requirements, that may be required
to be obtained, made or satisfied in connection with any such
transfer of any such Reclaimable Assets. The costs of all of
the foregoing shall be shared equally between the Company and
Seller. To the extent that such Reclaimable Assets consist of
Contracts that are not assignable without the consent of a
party thereto other than the Company, Buyer shall cause the
Company to cooperate with Seller in reasonable arrangements
designed to provide Seller with the economic benefits
thereunder."
(c) In Section 6.03(a) of the Combustion Engineering and Connecticut
Valley Agreement, "Chief Financial Officer" is inserted next to the word
"Attention:".
12. AMENDMENT AND RESTATEMENT OF ANNEX D.
------------------------------------
Annex D (other than the Schedules thereto) is amended and restated in
its entirety in the form set forth in Exhibit D hereto.
13. AMENDMENT TO ANNEX E.
--------------------
(a) The definition of "Non-Business Liabilities" in Section 1 of Annex
E is amended by inserting in subparagraph (a)(vii):
(i) at the commencement thereof, the following:
"without limitation of the foregoing clauses (i)
through (vi), or any other ABB Ltd Excluded
Liability,"
(ii) immediately after the word "Agreement", the
following:
"or relating to Assets retained by the ABB Ltd Group
as provided by the CE Asset Purchase Amendment
Agreement dated May 11, 2000 by and between the
parties to the CE Asset Purchase Agreement".
(b) Section 11 of Annex E is amended by inserting at the end of the
first sentence the following:
", with respect to any matter for which indemnification is being sought
hereunder".
14. AMENDMENT AND RESTATEMENT OF ANNEX G.
------------------------------------
Annex G is amended and restated in its entirety in the form set forth
in Exhibit E hereto.
15. AMENDMENT AND RESTATEMENT OF ANNEX H.
------------------------------------
Annex H is amended and restated in its entirety in the form set forth
in Exhibit F hereto.
16. EFFECTIVE TIME.
--------------
This Amendment Agreement shall be effective automatically upon the
occurrence of the Settlement Closing.
17. NO OTHER AMENDMENT.
------------------
The parties confirm that in all other respects the Settlement Agreement
remains in full force and effect.
IN WITNESS WHEREOF, each of the parties has caused its duly authorized
representative to execute this Amendment Agreement as of the date first above
written.
ALSTOM
Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and General Counsel
ABB LTD
Signature: /s/ BEAT ▇▇▇▇
------------------------------------------
Name: Beat ▇▇▇▇
Title: Senior Vice President and General Counsel
ABB ALSTOM POWER NV
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive Officer
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attorney-in-Fact
The undersigned duly acknowledge and consent to this Amendment Agreement and
agree to be bound by the covenants and agreements set forth herein:
ABB ASEA ▇▇▇▇▇ BOVERI LTD.
Signature: /s/ BEAT ▇▇▇▇
---------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB AG
Signature: /s/ BEAT ▇▇▇▇
---------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB AB
Signature: /s/ BEAT ▇▇▇▇
---------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB HANDELS- UND VERWALTUNGS AG
Signature: /s/ BEAT ▇▇▇▇
---------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB POWER GENERATION INVESTMENTS BV
Signature: /s/ BEAT ▇▇▇▇
---------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ABB POWER GENERATION PARTICIPATIONS BV
Signature: /s/ BEAT ▇▇▇▇
---------------------------------
Name: Beat ▇▇▇▇
Title: Attorney-in-Fact
ANNEX D
INTELLECTUAL PROPERTY RIGHTS AND KNOW-HOW
1 INTERPRETATION
1.1 The definitions and rules of interpretation set out in Article 1 of
this Agreement apply to this Annex supplemented by the following:
"ABB LTD MARKS" means the names, trade names, trademarks,
service marks, product marks and logos comprised of the
initials ABB and/or the words Asea ▇▇▇▇▇ Boveri, in various
forms, with or without additional matter and whether or not
registered and whether or not the subject of an application to
register;
"▇▇ ▇▇▇▇▇" means the names, trade names, trademarks, service
marks, product marks and logos comprised of the initials CE
and/or the words Combustion Engineering, in various forms,
with or without additional matter and whether or not
registered and whether or not the subject of an application to
register;
"FLAKT MARKS" means the names, trade names, trademarks,
service marks, product marks and logos comprised of the word
FLAKT, in various forms, with or without additional matter and
whether or not registered and whether or not the subject of an
application to register;
"INTELLECTUAL PROPERTY RIGHTS" means copyrights, design
rights, patents, mask rights, trademarks, trade names and
similar property rights conferred by law in any part of the
world and, where applicable, whether or not registered, in
each case together with all rights appurtenant thereto
(including but not limited to rights, where applicable, to
apply for registration thereof). For purposes hereof, the ABB
Ltd Marks, the ▇▇ ▇▇▇▇▇ and the FLAKT Marks are not
Intellectual Property Rights.
"KNOW-HOW" means data, formulae, techniques, inventions,
specifications, drawings, algorithms, prototypes, research
materials, computer programs and documentation, databases, and
other non-public know-how or trade secrets of any kind;
"LICENSE" means, according to the context, a license or
similar agreement in which rights to use Intellectual Property
Rights are made or given, or a license or similar agreement in
which rights to use Know-How are granted.
1.2 Where the context permits or requires, any reference in this Annex to a
License includes a sublicense and a sub-sublicense or other derivative
rights granted by a licensee or a sublicensee.
1.3 References in this Annex to "Articles" are, unless otherwise expressly
provided, to Articles of this Annex D and references in this Annex to
Schedules are to Schedules to this Annex.
2 PERFORMANCE OF OBLIGATIONS
ABB Ltd shall be responsible for procuring that the relevant entity
within its Group shall perform those obligations which are required in
this Annex to be performed by it.
3 REORGANISATIONS
It is agreed that, except for Article 4.4, Articles 4 and 5 shall apply
only if and to the extent that rights equivalent to those which are
contemplated to be assigned, licensed and/or communicated (as the case
may be) to ALSTOM and/or its Subsidiaries thereunder are not currently
owned by, or have not as of yet been licensed or communicated to, the
ABB Ltd Transferred Companies, respectively, and have not been so
assigned, licensed and/or communicated, respectively, by the Settlement
Closing to one or more of the ABB Ltd Transferred Companies pursuant to
the Reorganisations or otherwise.
4 ASSIGNMENT AND RELATED MATTERS
4.1 Subject to Articles 4.3 and 5.4, ABB Ltd and its Subsidiaries (except
as set forth in Schedule 1) shall, at the Settlement Closing or as soon
thereafter as is practicable, in either case with economic effect from
and including January 1, 1999, assign (or cause to be assigned) to
ALSTOM and/or its designated Subsidiaries (beneficially and, subject to
Article 11.8 of this Agreement, of record):
(i) all Intellectual Property Rights and Know-How owned (as of
March 23, 1999 (except as may be affected by events in the
ordinary course of the conduct of the ABB Ltd Business prior
to the Closing), as of immediately prior to the Closing or as
of immediately prior to the Settlement Closing) by members of
the ABB Ltd Group (listed in Schedule 2), and (x) at such time
used or held for use or (y) at such time under development for
use, in each case predominantly in the ABB Ltd Business;
(ii) subject to Article 6, all right, title and interest under,
subject to the burden of, all Licenses from third parties
relating to Intellectual Property Rights or Know-How that (as
of March 23, 1999 (except as may be affected by events in the
ordinary course of the conduct of the ABB Ltd Business prior
to the Closing), as of immediately prior to the Closing or as
of immediately prior to the Settlement Closing) were (x) at
such time used or held for use or (y) at such time under
development for use, in each case predominantly in the ABB Ltd
Business (listed in Schedule 3) under which members of the ABB
Ltd Group (as constituted from time to time) appear as (or
otherwise are) grantees; and
(iii) all their rights to ▇▇▇ for damages and any other remedies in
respect of any infringement, misuse or conversion of, or in
relation to, the rights referred to in paragraphs (i) and
(ii).
4.2 ABB Ltd and its Subsidiaries shall, as soon after the Settlement
Closing as is practicable and in accordance with procedures to be
established by ALSTOM, communicate or
2
otherwise make available to ALSTOM and/or its designated Subsidiaries
all Know-How assigned to ALSTOM and/or its designated Subsidiaries
pursuant to paragraph (i) of Article 4.1 or held by them under any
License relating to Know-How assigned pursuant to paragraph (ii) of
Article 4.1, in each case subject to the provisions of any Licenses
which relate to such Know-How, and shall supply to ALSTOM and/or its
designated Subsidiaries the originals or, at the discretion of ALSTOM,
copies of documents or other materials in their possession in which any
part of such Know-How is contained. ABB Ltd and its Subsidiaries, and
ALSTOM and its designated Subsidiaries, shall each take all reasonable
steps to maintain the confidentiality of the Know-How.
4.3 Any assignments to be made pursuant to Article 4.1 and any such
assignments made prior to the Settlement Closing shall be: (i) subject
to and with the benefit of any Licenses to third parties and any other
third party rights and obligations, but free of Encumbrances; and (ii)
subject to a reservation to the assignor of a worldwide, perpetual (or
for such shorter period as such assigned rights may exist),
irrevocable, royalty free, non-exclusive, non-assignable and
non-sublicensable right to (A) use (and permit others within the ABB
Ltd Group to use) the Intellectual Property Rights and Know-How
assigned pursuant to paragraph (i) of Article 4.1, but only for
activities outside of the Field, and (B) enjoy (and permit others
within the ABB Ltd Group to enjoy) the rights conferred by the Licenses
assigned pursuant to paragraph (ii) of Article 4.1, but only to the
extent permitted under the terms of those Licenses, and only for
activities outside of the Field; provided that if any reservation of
rights pursuant to clause (ii) of this Article 4.3 is not desirable or
permissible due to national laws or regulations or for any other
reason, including but not limited to the terms of any License referred
to therein or any other third party rights, the assignor shall discuss
with ALSTOM with a view to reaching agreement on the best means to
ensure that equivalent rights are granted or otherwise made available
to it.
4.4 It is understood and agreed that, to the extent ABB Ltd Transferred
Companies currently own, or as a result of a Reorganisations or
otherwise at the Settlement Closing own, or at the Closing Date owned,
Intellectual Property Rights and/or Know-How such that no assignment
pursuant to this Article 4 is or was necessary in respect thereof,
ALSTOM or the JC shall cause, at the request of ABB Ltd after the
Settlement Closing, the relevant ABB Ltd Transferred Company to grant a
License or sublicense, as the case may be, to the members of the ABB
Ltd Group to effect the reservation of rights permitted under clause
(ii) of Article 4.3.
5 GRANT OF LICENSES AND RELATED MATTERS
5.1 ABB Ltd and its Subsidiaries (except as set forth in Part B of Schedule
4) shall, at the Settlement Closing or as soon thereafter as is
practicable, in either case with economic effect from 1 January 1999,
grant (or cause to be granted) to ALSTOM and/or its designated
Subsidiaries worldwide, irrevocable, royalty free, non-exclusive,
non-assignable and non-sublicensable (except as otherwise expressly
provided in Articles 8 and 14) Licenses under all Intellectual Property
Rights and Know-How owned (as of March 23, 1999 (except as may be
affected by events in the ordinary course of the conduct of the ABB Ltd
Business prior to the Closing), as of immediately prior to the Closing
or as of immediately prior to the Settlement Closing) by members of the
ABB
3
Ltd Group (listed in Schedule 5) and (x) at such time used or held for
use or (y) at such time under development for use, in each case in the
ABB Ltd Business, but which are not required to be assigned pursuant to
paragraph (i) of Article 4.1. Such Licenses shall be for a term of
thirty (30) years from and after the Settlement Closing Date and shall
cover the full territory of the rights and shall be for use in
activities within the Field only.
5.2 ABB Ltd and its Subsidiaries (except as set forth in Schedule 6) shall,
at the Settlement Closing or as soon thereafter as is practicable, in
either case with economic effect from January 1, 1999, grant (or cause
to be granted) to ALSTOM and/or its designated Subsidiaries
irrevocable, non-exclusive, non-assignable and non-sublicensable
sublicenses under all Licenses from third parties relating to
Intellectual Property or Know-How that (as of March 23, 1999 (except as
may be affected by events in the ordinary course of the conduct of the
ABB Ltd Business prior to the Closing), as of immediately prior to the
Closing or as of immediately prior to the Settlement Closing) were (x)
at such time used or held for use or (y) at such time under development
for use, in each case in the ABB Ltd Business (listed in Schedule 7)
but which are not required to be assigned pursuant to paragraph (ii) of
Article 4.1. Such sublicenses shall be for use in activities within the
Field only, shall cover the widest scope and territory possible under
the terms of the Licenses under which they are granted and shall be on
arms-length terms (including any royalty to be paid thereunder),
provided such terms shall be no more onerous than the terms of such
Licenses and for the duration thereof.
5.3 ABB Ltd and its Subsidiaries shall, as soon after the Settlement
Closing as is practicable and in accordance with procedures to be
established by ALSTOM, communicate or otherwise make available to
ALSTOM and/or its designated Subsidiaries full details of the Know-How
to which any License referred to in Article 5.1 or sublicense referred
to in Article 5.2 relates and supply to them copies of documents or
other materials in their possession in which any part of such Know-How
is contained (subject to the provisions of such License or sublicense).
5.4 ABB Ltd or its appropriate Affiliate, and ALSTOM, or a member of the
ALSTOM Group or the JC Group as of the date hereof, shall enter into
the Powerformer License on the terms set forth in Schedule 9.
6 RESTRICTIONS ON ASSIGNMENTS OR GRANTS OF LICENSES
If a License cannot be assigned as required by paragraph (ii) of
Article 4.1 or if a sublicense required by Article 5.2 cannot be
granted, ABB Ltd and its Subsidiaries shall use all reasonable efforts
to persuade the relevant third party either to amend its License to
permit the same or to grant to ALSTOM and/or its designated
Subsidiaries directly a License conferring equivalent rights. Until the
License is amended, or a License conferring equivalent rights is
granted pursuant to this Article 6.1, ABB Ltd and its Subsidiaries
shall, to the fullest extent permitted by law, hold the benefit of the
relevant License (insofar as it relates to the ABB Ltd Business) for
ALSTOM and/or its designated Subsidiaries; provided that ALSTOM shall
be responsible for payment of royalties, fees, outgoings or other
liabilities thereunder attributable to the ABB Ltd Business for so long
as it or another member of the ALSTOM Group or the JC Group
4
receives the benefit thereof and ALSTOM shall indemnify ABB Ltd and its
Subsidiaries against any liability (together with all reasonable costs)
which they may incur by reason of any breach thereof attributable to
any act or omission of any member of the ALSTOM Group or the JC Group.
7 FURTHER ASSURANCE AND PROTECTION OF RIGHTS
7.1 (a) It is acknowledged that the assignment, licensing or
sublicensing of any Intellectual Property Right, or the
communication or otherwise making available of any
Know-How, to the ABB Ltd Transferred Companies contemplated
by this Annex and the contribution to ALSTOM and/or its
Subsidiaries of any Intellectual Property Rights or
Know-How to be made pursuant to the terms hereof may
require the consent of or notification to any third party
or the cooperation of any undertaking of which ABB Ltd owns
or controls, directly or indirectly, less than 100% of the
issued shares. In such circumstances, ABB Ltd shall use
reasonable efforts in good faith to obtain such consent, to
give such notification and/or to obtain such cooperation
and, provided that such reasonable efforts in good faith
are used, ABB Ltd shall in such circumstances not be in
breach of Articles 4 or 5 but without prejudice to any
compensation which may become payable as described below.
(b) In the event any assignment, contribution, licensing or
sublicensing of any Intellectual Property Rights or Know-How,
or any communication or otherwise making available of any
Intellectual Property Rights or Know-How, to ALSTOM and/or its
Subsidiaries does not occur by March 31, 2001 for the reasons
set forth in Article 7.1(a), then ABB Ltd shall within
fourteen (14) days (or such longer period as ALSTOM and ABB
Ltd shall agree having regard to the complexity of the matter)
pay ALSTOM an amount as compensation for such non-contribution
which shall be such amount as shall be fair and reasonable
having regard to the fair market value of such Intellectual
Property Rights or Know-How and of the effect of its
non-inclusion upon the JC Group, together with interest on
such compensation amount from the, Closing Date to the date of
payment of such compensated amount at an interest rate per
annum equal to the Relevant Rate (as defined in the Joint
Venture Agreement) for three month deposits in effect on the
Closing Date (or, with respect to periods more than three
months after the Closing Date, in effect on the most recent
past date which is exactly three months (or a whole multiple
of three months) after the Closing Date). Upon payment of such
amount to ALSTOM in respect of any particular Asset in
accordance with this Article 7.1(b), ABB Ltd shall cease to be
obligated to cause such Asset to be assigned to, or become
part of, the JC Group.
7.2 Pending the assignment of any rights or the granting of any License
pursuant to this Annex, ABB Ltd and its Subsidiaries shall take all
reasonable steps to maintain and protect the rights to be assigned or
licensed by them.
7.3 ABB Ltd and its Subsidiaries shall, at the request of ALSTOM, and
ALSTOM and its Subsidiaries shall, at the request of ABB Ltd, provide
all reasonable assistance in connection with (i) the defense and/or
prosecution of any claim brought by or against any
5
third party concerning Intellectual Property Rights or Know-How
assigned or licensed by ABB Ltd and/or its Subsidiaries hereunder or
pursuant to the terms of the Reorganisations, and (ii) the filing,
prosecution and amendment or continuation of applications to register
any Intellectual Property Rights assigned or licensed to ALSTOM and/or
its Subsidiaries hereunder or pursuant to the terms of the
Reorganisations.
7.4 ABB Ltd and its Subsidiaries shall not permit to lapse or become
abandoned any Intellectual Property Rights which are registered, or
which are the subject of an application to register, and which are or
are to be licensed to ALSTOM or any member of the ALSTOM Group or the
JC Group hereunder or pursuant to the Reorganisations (or otherwise as
a result of the transactions contemplated by this Agreement or the
Joint Venture Agreement) without first giving ALSTOM the opportunity to
maintain the registration or prosecute the application to register at
its own cost and for its own benefit. The foregoing shall apply mutatis
mutandis to ALSTOM and its Subsidiaries with respect to any
Intellectual Property Rights which are registered, or which are the
subject of an application to register, and which are to be licensed or
reserved to ABB Ltd and its Subsidiaries hereunder or pursuant to the
Reorganisations (or otherwise as a result of the transactions
contemplated by this Agreement or the Joint Venture Agreement).
8 DISSEMINATION OF RIGHTS WITHIN THE ALSTOM GROUP
In respect of Intellectual Property Rights and Know-How assigned or
licensed pursuant hereto (or contributed to the ALSTOM Group or the JC
Group under the terms of the Reorganisations or otherwise owned or held
by an undertaking which at the Closing or thereafter became a member of
the ALSTOM Group or the JC Group pursuant to the Joint Venture
Agreement or this Agreement), each member of the ALSTOM Group or the JC
Group may be granted such derivative rights on such terms and
conditions and to such an extent as ALSTOM may from time to time
determine and as may be granted without infringing the rights of third
parties. All Licenses and sublicenses granted to any Subsidiaries of
ALSTOM pursuant to Article 5 (and all derivative rights thereunder
granted pursuant to this Article 8) shall terminate automatically if
the member should cease to be a Subsidiary of ALSTOM.
9 TECHNICAL ASSISTANCE
ABB Ltd and its Subsidiaries and ALSTOM and its Subsidiaries, as the
case may be, shall provide, at no cost to the ALSTOM Group or the JC
Group, or the ABB Ltd Group, as the case may be, such technical
assistance and consultation as may reasonably be required and which
they are reasonably able to provide to make effective use of any
Intellectual Property Rights and Know-How assigned or licensed or
otherwise made available to the ALSTOM Group, the JC Group or the ABB
Ltd Group hereunder (or contributed to the ALSTOM Group or the JC Group
under the terms of the Reorganisations or otherwise owned or held by an
undertaking which on the Closing or thereafter became a member of the
ALSTOM Group or the JC Group); provided that such technical assistance
and consultation under this Article 9 shall continue only for a period
of eighteen (18) months from the Settlement Closing Date, and such
technical assistance and consultation shall not include any research or
development.
6
10 NEW TECHNOLOGY
ALSTOM shall grant, or procure that its Subsidiaries grant, to members
of the ABB Ltd Group non-exclusive, non-assignable and
non-sublicensable licenses under such of the Intellectual Property
Rights and Know-How obtained as owner, developed or conceived by any
member of the JC Group after the Closing Date and prior to the
Settlement Closing, in each case for use in activities other than the
Field. Such licenses shall be granted on arms-length terms (including
any royalty to be paid thereunder).
11 HOUSE MARKS
11.1 ABB Ltd or its appropriate Affiliate shall grant ALSTOM (and, at the
request of ALSTOM, any Subsidiary of ALSTOM) the right to use the ABB
Ltd Marks and, pursuant to such grant, shall enter into license
agreements in respect of the ABB Ltd Marks substantially in the form of
Schedule 8. It is understood and agreed that the right to use the ABB
Ltd Marks shall expire twelve (12) months after the Settlement Closing.
11.2 Any license agreement in respect of the ABB Ltd Marks granted to ALSTOM
or any of its Subsidiaries pursuant to this Article 11 shall terminate
automatically if the member should cease to be a Subsidiary of ALSTOM.
ALSTOM shall procure that no Subsidiary of ALSTOM shall use any ABB Ltd
▇▇▇▇ without a license agreement entered into pursuant to this Article
11.
12 ▇▇ ▇▇▇▇▇
12.1 ABB Ltd or its appropriate Affiliate shall grant to ALSTOM (and, at the
request of ALSTOM, any Subsidiary of ALSTOM) the right to use the ▇▇
▇▇▇▇▇ and, pursuant to such grant, shall enter into a license agreement
in respect of the ▇▇ ▇▇▇▇▇ substantially in the form of Schedule 10. It
is understood that the right to use the ▇▇ ▇▇▇▇▇ shall be for a term of
eighteen (18) months from the Settlement Closing Date subject to a
right of renewal on terms and conditions satisfactory to ABB Ltd and
ALSTOM. If the renewal terms are not agreed, then the license agreement
shall terminate and ALSTOM shall cease using the ▇▇ ▇▇▇▇▇.
12.2 The license agreement in respect of the ▇▇ ▇▇▇▇▇ granted to ALSTOM or
any of its Subsidiaries pursuant to this Article 12 shall terminate
automatically if the member should cease to be a Subsidiary of ALSTOM.
ALSTOM shall procure that no Subsidiary of ALSTOM shall use any CE ▇▇▇▇
without a license agreement entered into pursuant to this Article 12.
13 FLAKT MARKS
13.1 ABB Ltd or its appropriate Affiliate shall grant ALSTOM (and, at the
request of ALSTOM, any Subsidiary of ALSTOM) the right to use the FLAKT
Marks and, pursuant to such grant, shall enter into a license
agreements in respect of the FLAKT Marks substantially in the form of
Schedule 11. It is understood and agreed that the right to use the
FLAKT Marks shall be for a term of thirty (30) years from the
Settlement Closing.
7
13.2 Any license agreement in respect of the FLAKT Marks granted to ALSTOM
or any of its Subsidiaries pursuant to this Article 13 shall terminate
automatically if the member should cease to be a Subsidiary of ALSTOM.
ALSTOM shall procure that no Subsidiary of ALSTOM shall use any FLAKT
▇▇▇▇ without a license agreement entered into pursuant to this Article
13.
14 CONSOLIDATIONS AND MERGERS
14.1 Anything in this Annex D to the contrary notwithstanding, ABB Ltd or
ALSTOM may assign its rights under this Annex D (and any License or
sublicense granted hereunder) to the extent permitted in, and subject
to all of the terms and conditions set forth, in Article 18.4 of this
Agreement. It is understood that the licensor or sub-licensor, as the
case may be, may request written confirmation of such substitution.
14.2 The terms of Article 14.1 above shall not apply to the extent that the
substitution described therein requires the consent of or notification
to any third party, unless and until such consent or notification (as
the case may be) has been obtained or made. In such circumstances the
relevant Parties shall use reasonable efforts in good faith to obtain
such consent or to give such notification.
15 CERTAIN COVENANTS
Each of the Parties to this Agreement acknowledges and agrees that, to
the best of its knowledge, all of the Intellectual Property Rights and
Know-How which are predominantly used in and material in the aggregate
to the conduct of the business of the JC is owned by the JC and not
licensed from third parties.
16 SCHEDULES
The listings of certain items in Schedules 2, 3, 5 and 7 are not
necessarily complete.
8
ANNEX G
REAL ESTATE PROVISIONS
1.1 DEFINED TERMS. As used in this Annex G, the following terms shall
have the following meanings:
"ABB LTD-CONTRIBUTED REAL PROPERTY" means any real property
which (or a leasehold interest in which) prior to the Closing Date was owned by
any member of the ABB Ltd Group and heretofore was or hereafter is transferred
to a member of the JC Group, whether directly or as part of any ABB Ltd
Transferred Company (or a CE Company), including any ABB Ltd Post-Settlement
Closing Transferred Assets.
"ALSTOM-CONTRIBUTED REAL PROPERTY" means any real property
which prior to the Closing Date was owned by any member of the ALSTOM Group and
heretofore or hereafter transferred to a member of the JC Group, whether
directly or as part of any ALSTOM-Transferred Company.
"EXCLUDED REAL PROPERTY" means the real property in which
leasehold interests are held pursuant to the Excluded Leases (as such term is
defined in the CE Asset Purchase Agreement).
"COMPLIANCE COSTS" shall mean the costs and expenses
(including fines and penalties) incurred by a party or any of its Affiliates
pursuant to a Compliance Order, as applicable.
"COMPLIANCE ORDER" means an order, directive or similar action
issued or taken by a Regulatory Authority having competent jurisdiction over any
Real Property (or the ordinary course operations conducted thereat as of the
date of such property's transfer to the JC Group) (i) to remove, remediate or
cleanup any Environmental Condition, (ii) to bring such ABB Ltd-Contributed Real
Property (or the ordinary course operations conducted thereat as of the date of
its transfer to the JC Group) into compliance with Environmental Laws applicable
to such property, or (iii) to pay fines or penalties as a consequence of such
non-compliance.
"ENVIRONMENTAL CONDITION" shall mean any Hazardous Substance
condition existing on, at, under or over any ABB Ltd-Contributed Real Property
as of the date of its transfer to the JC Group.
"ENVIRONMENTAL LAW" means the local, county, state, provincial
and/or federal laws (including common law), regulations or other legally binding
requirements of any jurisdiction in which the Alstom-Contributed Real Properties
or the ABB Ltd-Contributed Real Properties are located and which govern the
existence of or provide a remedy for release or emissions of Hazardous
Substances, or which relate to the protection of persons, natural resources or
the environment, the management of Hazardous Substances, or other activities
involving Hazardous Substances, as such laws have been amended or supplemented,
in each case as in effect on or prior to the Closing Date, except that, with
respect to the obligations of the JC pursuant to Paragraph 1.4, "Environmental
Law" shall mean and include all of the foregoing as in effect from time to time.
"HAZARDOUS SUBSTANCE" means any substance, material or waste
that is regulated under any Environmental Law or is deemed by any Environmental
Law to be "hazardous, "toxic," a "contaminant," "waste" or a "pollutant" (or
words with similar meaning) and shall include, without limitation, petroleum or
petroleum products, PCB's, PCB wastes, asbestos, asbestos containing products
and radioactive substances.
"JC/ABB LEASED REAL PROPERTY" means the real property located
at Buildings 1, 2, 3, 4, 5, 6 and 7, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ that is the subject of a letter agreement for a lease between
ABB ALSTOM Power Inc. as landlord and Asea ▇▇▇▇▇ Boveri Inc. as tenant, and the
portion of any other Real Property that as of the Closing Date or the Settlement
Closing Date was leased, used or otherwise occupied by a member of the ABB Ltd
Group (or any assignee or sublessee thereof).
"JC REAL PROPERTIES" means the Real Properties and any other
real property owned or held by the JC Group as of, or prior to, the Settlement
Closing Date.
"REAL PROPERTIES" means, collectively, the ALSTOM-Contributed
Real Properties, the ABB Ltd-Contributed Real Properties and the JC Real
Properties.
"REMEDIAL ACTION" shall mean any action required to be taken
pursuant to a Compliance Order.
1.2 ABB LTD SHARE OF COMPLIANCE COSTS. (a) ABB Ltd and ALSTOM shall
each share, in the manner specified in Paragraph 1.2(b) below, in the
Compliance Costs incurred by ALSTOM or any of its Subsidiaries in connection
with any Remedial Actions undertaken at any ABB Ltd-Contributed Real Property.
(b) With regard to Compliance Costs incurred by ALSTOM or any
of its Subsidiaries which are to be shared pursuant to Paragraph 1.2(a) above,
ABB Ltd shall pay (or reimburse the relevant member of the ALSTOM Group or the
JC Group for) 50% of such Compliance Costs up to the initial aggregate amount of
Ten Million Dollars ($10,000,000). To the extent that such Compliance Costs
exceed Ten Million Dollars ($10,000,000) in the aggregate, ABB Ltd shall pay (or
reimburse the relevant member of the ALSTOM Group or the JC Group for) 100% of
the Compliance Costs in excess of Ten Million Dollars ($10,000,000) up to the
maximum aggregate amount of Fifty Million Dollars ($50,000,000), including, for
purposes of determining such maximum aggregate amount, ABB Ltd's 50% share (but
excluding, for purposes of determining such maximum aggregate amount, ALSTOM's
50% share) of the initial Ten Million Dollars ($10,000,000) of Compliance Costs
incurred by the parties pursuant to this Paragraph 1.2(b). For the avoidance of
doubt, in no event shall the maximum aggregate liability of ABB Ltd to pay or
reimburse the JC for Compliance Costs incurred by it under this Annex G exceed
the amount of Fifty Million Dollars ($50,000,000).
(c) Notwithstanding anything to the contrary in this Annex G,
ABB Ltd shall not be obligated to pay or reimburse any member of the JC Group
for Compliance Costs under this Annex G to the extent that such Compliance Costs
were accrued or reflected in the ABB Ltd Business 1998 Accounts attached to
Annex E. For the avoidance of doubt, ABB Ltd's obligations under this Paragraph
1.2 shall exclude all Compliance Costs to the extent arising out
2
of or relating to periods from and after the Closing Date or, if applicable, any
later date of transfer. ABB Ltd shall indemnify and hold harmless each member of
the ALSTOM Group and the JC Group from and against any Liabilities arising out
of any breach of its obligations under this Annex G in accordance with Annex E.
(d) In connection with Compliance Costs incurred by ALSTOM or
any of its Subsidiaries any portion of which ABB Ltd is obligated to pay or
reimburse to ALSTOM hereunder, ALSTOM and its Subsidiaries shall act in good
faith and use reasonably prudent business practices consistent with achieving
compliance with Environmental Law in the place where the ABB Ltd-Contributed
Real Property at which such actions are being carried out is located.
1.3 JC REMEDIAL ACTIONS. The JC shall be responsible for bringing all
Real Properties (other than any Excluded Real Property or JC/ABB Leased Real
Property) into compliance with Environmental Laws (and maintaining such
compliance), and remediating all Environmental Conditions, from and after the
Closing Date (or, if applicable, such later date of transfer to the JC Group).
For the avoidance of doubt, the JC's obligations under this Paragraph 1.3 shall
include, without limitation, all Liabilities arising out of or relating to
periods from and after (but not prior to) the Closing Date (or, if applicable,
such later date of transfer to the JC Group) for non-compliance matters which
existed at any of the ALSTOM-Contributed Real Properties or the ABB
Ltd-Contributed Real Properties (other than any Excluded Real Property or JC/ABB
Leased Real Property) as of the Closing Date (or, if applicable, such later date
of transfer to the JC Group) or arose after the Closing Date (or, if applicable,
such later date of transfer to the JC Group). The JC shall discharge or pay all
Liabilities incurred in connection with the performance of its obligations under
the preceding sentence. ALSTOM shall indemnify and hold harmless (on an
after-tax basis, if applicable) each member of the ABB Ltd Group from and
against any Liabilities arising out of any breach of its obligations under this
Annex G. Nothing in this Paragraph 1.3 shall limit or affect ABB Ltd's
obligations under Paragraphs 1.2 (a) and (b), even if such obligations require
ABB Ltd to make reimbursement payments in respect of actions taken by ALSTOM or
any of its Subsidiaries pursuant to this Paragraph 1.3.
1.4 CERTAIN LIMITATIONS. The obligations of ABB Ltd under this Annex G
shall be subject to the following restrictions and limitations:
(a) ABB Ltd shall only be liable for Compliance Costs under
this Annex G to the extent mandated by a Compliance Order that is received by
ALSTOM or any of its Subsidiaries prior to the second anniversary of the
Settlement Closing Date. ABB Ltd shall not be liable for any incremental
Compliance Costs under this Annex G to the extent that the same are attributable
to any changes in Environmental Laws occurring from and after the Closing Date.
(b) ABB Ltd shall be obligated to pay or reimburse ALSTOM and
its Subsidiaries for only the least expensive approaches and measures for
correcting or abating any specific instance of non-compliance with Environmental
Laws or Environmental Conditions, as applicable, that substantially comply with
the relevant Compliance Order and are reasonably available in respect of each
matter for which ABB Ltd is obligated to pay Compliance Costs hereunder. If
ALSTOM or its Affiliates undertakes any approaches or measures that are more
3
expensive than such least expensive approach, then ABB Ltd shall be liable only
for the amounts that it would have been responsible for had such least expensive
approaches and measures been employed.
(c) ALSTOM shall permit (and shall cause the JC and any other
Affiliates to permit) ABB Ltd and its representatives, agents and contractors
reasonable access to the ABB Ltd-Contributed Real Properties to permit ABB Ltd
to assess and monitor its obligations and the activities of the JC hereunder.
Prior to starting any work for which it wishes to seek repayment of Compliance
Costs from ABB Ltd hereunder, ALSTOM shall provide ABB Ltd and/or its
representatives with a plan of such activities and an estimate of the costs
thereof, and thereafter shall keep ABB Ltd reasonably informed as to the
progress of such remediation.
1.5 ENVIRONMENTAL TESTING. (a) Except as provided in Paragraph 1.6(b)
below, the JC and ALSTOM agree that, subsequent to the execution of this
Agreement, neither the JC, ALSTOM nor their respective Affiliates or
representatives (including, without limitation, any member of the JC Group)
shall conduct any environmental testing, assessments, audits, inspections, soil,
water, or air sampling, or any other form of evaluation of the ABB
Ltd-Contributed Real Properties in respect of such properties' compliance with
Environmental Laws or the existence of Environmental Conditions on, under,
around or above such sites ("Environmental Testing"). The restriction set forth
in the preceding sentence shall remain in force so long as ABB Ltd is obligated
to pay Compliance Costs under this Annex G.
(b) Notwithstanding Paragraph 1.6(a), the JC shall be
entitled, upon prior written notice to ABB Ltd (to the extent that such prior
written notice is reasonably practicable under the circumstances), to conduct
Environmental Testing at the ABB Ltd-Contributed Real Properties if, and to the
extent, that such Environmental Testing is (or in the good faith judgment of
ALSTOM or any applicable Affiliate is): (i) required by an Environmental Law
applicable to such a site; (ii) reasonably necessary to ensure compliance with
an Environmental Law applicable to such site, but only if the JC has received
written information from a Regulatory Authority indicating that such site may
not be in compliance with an Environmental Law applicable to such site, or as
reasonably necessary (in the good faith judgment of ALSTOM and its Affiliates)
to address any risk of harm to human health or safety or of harm to property;
(iii) mandated by a Regulatory Authority having competent jurisdiction over such
site or over an Environmental Law applicable to such site; (iv) reasonably
requested by an unaffiliated third party seeking to assume or purchase an
interest in such site in a bona fide transaction; (v) reasonably requested by an
unaffiliated bank or similar institutional lender in connection with a bona fide
proposed financing or borrowing transaction of the JC; or (vi) reasonably
necessary in connection with attempting to settle any bonafide third-party claim
or legal proceeding made or instituted by a third party, if and to the extent
that such Environmental Testing is directly relevant to the subject matter of
such claim or legal proceeding.
(c) ABB Ltd shall not be responsible for any Compliance Costs
which arise from or relate to a Compliance Order resulting from, directly or
indirectly, any Environmental Testing undertaken in breach of this Paragraph
1.5.
1.6 RESTRICTIONS ON REMEDIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
ANNEX G, IN NO EVENT SHALL ANY INDEMNIFYING PARTY BE LIABLE TO ANY
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INDEMNIFIED PARTY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
IN CONNECTION WITH ANY MATTER FOR WHICH THE INDEMNIFYING PARTY IS OBLIGATED TO
INDEMNIFY UNDER THIS ANNEX G.
1.7 ENTIRE OBLIGATION. This Annex G sets forth the entire obligation of
ABB Ltd to ALSTOM or its Affiliates with respect to Environmental Conditions,
Compliance Orders and Compliance Costs; provided however, that nothing in this
Annex G shall limit any liability or obligation that any member of the ALSTOM
Group, the ABB Ltd Group or the JC Group may have to each other pursuant to the
obligations set forth in Annex E or under the CE Asset Purchase Agreement, and
nothing in this Annex G limits any liability or obligation that any member of
the ABB Ltd Group may have under any Contract with respect to the JC/ABB Leased
Real Property. No amounts paid or payable by members of the ABB Ltd Group in
respect of the liabilities or obligations described in the proviso in the
preceding sentence shall be counted against the dollar amounts set forth in
Paragraph 1.2(b) above.
1.8 ABB LTD EXCLUDED LIABILITIES. This Annex G shall not apply with
respect to any Excluded Real Property or to the "Windsor Site" (as such term is
defined in the CE Asset Purchase Agreement) or in respect of any "Windsor Site
Liabilities" (as defined in the CE Asset Purchase Agreement), any Nuclear
Liabilities or any other ABB Ltd Excluded Liabilities (other than Indemnified
Compliance Costs), all of which shall be indemnified by ABB in accordance with
the provisions of Annex E.
1.9 EFFECTIVENESS. This Annex G shall be effective automatically upon
the occurrence of the Settlement Closing.
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ANNEX H
WORKING PRINCIPLES
BETWEEN ALSTOM, ABB LTD AND THE JC
IN THE FIELD OF
POWER GENERATION PROJECT DEVELOPMENT,
PROJECT FINANCE/STRUCTURED FINANCE,
PROJECT INVESTMENT
1 Principle of Freedom of Action
All Parties are free to engage in the above activities for their own
account and/or in conjunction with any third party, subject to the
following restrictions, provided that it is understood and agreed that
this paragraph 1 is an exception only to paragraph 3 of, and not to any
other paragraph of, Schedule 15.1 to this Agreement (Prohibited
Activities).
1.1 PRINCIPLE OF PREFERENCE TO THE JC
Whenever a member of the ABB Ltd Group lead develops (or contributes to
lead develop) a turnkey power plant project (a "Project"), the JC is
given an option of first refusal for all EPC contracts and related
service contracts in relation to the Project, provided that such
contracts have not been awarded prior to such involvement by a member
of the ABB Ltd Group.
1.2 PRINCIPLE OF CONSULTATION PREFERENCE TO PARENTS
Whenever the JC acts as lead developer and/or lead finance arranger for
a Project above $100 million, both ALSTOM's and ABB Ltd's financial
services units will be consulted by the JC, so as to allow them to
offer to provide the JC project finance services on an arm's length
basis.
2 TERM OF WORKING PRINCIPLES
These Working Principles shall remain in effect for a period of three
(3) years following the Settlement Closing, provided the Parties shall
continue to act in accordance with these Working Principles with
respect to all Projects initiated within the above-mentioned three (3)
year period.