Document:

Exhibit 4.3

 

	
  

  	
  LIMITED LIABILITY
  PARTNERSHIP

  

 

 

CONFORMED COPY

 

17
NOVEMBER 2003

(as
amended by a syndication and amendment agreement dated 10 December 2003)

 

 

ABB LTD

 

CERTAIN
SUBSIDIARIES OF ABB LTD

as
Borrowers and Guarantors

 

with

 

BARCLAYS
CAPITAL

BAYERISCHE
HYPO-UND VEREINSBANK AG

BNP
PARIBAS

CITIGROUP
GLOBAL MARKETS LIMITED

COMMERZBANK
AKTIENGESELLSCHAFT

CREDIT
SUISSE FIRST BOSTON

DEUTSCHE
BANK AG

DRESDNER
KLEINWORT WASSERSTEIN

HSBC
BANK PLC

NORDEA
BANK SWEDEN AB (PUBL)

SEB
MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)

SVENSKA
HANDELSBANKEN AB (PUBL)

as
Mandated Lead Arrangers

 

and

 

CREDIT
SUISSE FIRST BOSTON

acting
as Facility Agent

 

 

US$1,000,000,000

MULTI-CURRENCY
REVOLVING CREDIT AGREEMENT

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions And Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  The Facility

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Purpose

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Conditions Of Utilisation

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Utilisation

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Optional Currencies

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Repayment Of Advances

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Prepayment And Cancellation

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Interest Periods

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Changes To The
  Calculation Of Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Tax Gross Up And
  Indemnities

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Increased Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Other Indemnities

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Mitigation By The Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Costs And Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Guarantee And Indemnity

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Representations

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Information Undertakings

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Financial Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  General Undertakings

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  Events Of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  Changes To The Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  Changes To The Obligors

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  Role
  Of The Facility Agent And The Mandated Lead Arrangers

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  Conduct Of
  Business By The Finance Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  Sharing Among The Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  Payment Mechanics

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  Set-Off

  	
   

  
	
   

  	
   

  	
   

  
	
  31.

  	
  Notices

  	
   

  
				

 

 

	
  32.

  	
  Calculations And
  Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  Partial Invalidity

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  Remedies And Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  35.

  	
  Amendments And Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  36.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  37.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  38.

  	
  Enforcement

  	
   

  
	
   

  	
   

  
	
  Schedule 1

  	
  THE ORIGINAL PARTIES

  	
   

  
	
   

  	
  Part I

  	
  The Original Lenders

  	
   

  
	
   

  	
  Part II

  	
  The Original Obligors

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2

  	
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
  Part
  I

  	
  Conditions
  Precedent To Initial Utilisation

  	
   

  
	
   

  	
  Part II

  	
  Additional
  Obligor Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 3

  	
  UTILISATION REQUEST

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4

  	
  THE MARGIN AND UTILISATION FEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 5

  	
  FORM OF TRANSFER CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 6

  	
  TIMETABLES

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 7

  	
  FORM OF ACCESSION LETTER

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 8

  	
  FORM OF RESIGNATION LETTER

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 9

  	
  MANDATORY COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 10

  	
  MATERIAL SUBSIDIARIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 11

  	
  FORM OF COVENANT COMPLIANCE CERTIFICATE

  	
   

  

 

 

THIS AGREEMENT is
dated 17 November 2003 and made between

 

(1)                            ABB
LTD, a company incorporated in Switzerland whose
registered office is at Affolternstrasse 44, CH-8050 Zurich, Switzerland (“ABB”);

 

(2)                            THE
SUBSIDIARIES of ABB listed in Part 2 of
Schedule 1 (The Original Parties) as original borrowers (the “Original
Borrowers”);

 

(3)                            ABB AND THE SUBSIDIARIES OF ABB listed in Part 2 of Schedule 1 (The Original Parties) as
original guarantors (the “Original Guarantors”);

 

(4)                            BARCLAYS CAPITAL, BAYERISCHE HYPO-UND
VEREINSBANK AG, BNP PARIBAS, CITIGROUP GLOBAL MARKETS LIMITED, COMMERZBANK
AKTIENGESELLSCHAFT, CREDIT SUISSE FIRST BOSTON, DEUTSCHE BANK AG, DRESDNER
KLEINWORT WASSERSTEIN, HSBC BANK PLC, NORDEA BANK SWEDEN AB (PUBL), SEB
MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) and SVENSKA HANDELSBANKEN AB (PUBL)
in their respective capacities as mandated lead arrangers (the “Mandated
Lead Arrangers”);

 

(5)                            BANCO BILBAO VIZCAYA ARGENTARIA S.A., CDC
IXIS, DEN NORSKE BANK ASA, ING BELGIUM NV, KBC BANK NV and SAUDI AMERICAN BANK
(the “Arrangers”);

 

(6)                            THE
FINANCIAL INSTITUTIONS listed in Part 1 of
Schedule 1 (The Original Lenders) in their respective capacities as
original lenders (the “Lenders”); and

 

(7)                            CREDIT
SUISSE FIRST BOSTON in its capacity as facility
agent (the “Facility Agent”).

 

 

IT IS AGREED as follows:

 

SECTION 1

INTERPRETATION

 

1.                                 DEFINITIONS AND INTERPRETATION

 

1.1                           Definitions

In this
Agreement:

 

“Accession
Letter” means a letter substantially in the form set out in
Schedule 7 (Form of Accession Letter).

 

“Additional
Borrower” means any Subsidiary of ABB which has become an Additional
Borrower in accordance with Clause 25.2 (Additional Borrowers).

 

“Additional
Guarantor” means any Subsidiary of ABB which has become an
Additional Guarantor in accordance with Clause 25.4 (Additional Guarantors).

 

1

 

“Additional
Obligor” means an Additional Borrower or an Additional Guarantor.

 

“Advance”
means an advance made or to be made under the Facility or the principal amount
outstanding for the time being of that advance.

 

“Affiliate”
means, in relation to any person, a Subsidiary of that person or a Holding
Company of that person or any other Subsidiary of that Holding Company.

 

“Agreed Form Pledges” means the pledges
contemplated from:

 

(a)                                      ABB Oil & Gas USA Inc. in respect of the shares of ABB Offshore
Systems Inc and ABB Vetco Gray Inc; and

 

(b)                                     ABB Holding AG in respect of the shares of ABB Holding AS,

 

each in agreed
form.

 

“Agreed Form Trust Deed” means the trust
deed contemplated in respect of the Agreed Form Pledges, in agreed form.

 

“Agreed
Jurisdiction” means any of the United States of America,
Switzerland, Guernsey, any country that is, at the date of this Agreement, a
member of the European Union and any other country approved by all the Lenders.

 

“Approved Reorganisation” means any of the
amalgamations, demergers, mergers or corporate reconstructions set out in the
group structure chart provided by ABB prior to the date of this Agreement
provided that in relation to any Obligor, the Facility Agent has received a
copy of an opinion from external counsel acceptable to the Facility Agent,
acting reasonably, that the enforceability of that Obligor’s obligations under
the Finance Documents will not be affected thereby.

 

“Authorisation”
means an authorisation, consent, approval, resolution, licence, exemption,
filing or registration.

 

“Availability Period” means the period from
and including 10 December 2003 to and including the date falling 1 Month
prior to the Final Maturity Date.

 

“Available
Commitment” means a Lender’s Commitment minus:

 

(a)                                      the Base Currency Amount of its participation in any outstanding
Advances; and

 

(b)                                     in relation to any proposed Utilisation, the Base Currency Amount of
its participation in any Advances that are due to be made on or before the
proposed Utilisation Date,

 

other than, in
either case, that Lender’s participation in any Advances that are due to be
repaid or prepaid on or before the proposed Utilisation Date.

 

“Available
Facility” means the aggregate for the time being of each Lender’s
Available Commitment.

 

2

 

“Base
Currency” means Dollars.

 

“Base
Currency Amount” means, in relation to an Advance, the amount
specified in the Utilisation Request delivered by the relevant Borrower for
that Advance (or, if the amount requested is not denominated in the Base
Currency, that amount converted into the Base Currency at the Facility Agent’s
Spot Rate of Exchange on the date which is 3 Business Days before the
Utilisation Date or, if later, on the date the Facility Agent receives the
Utilisation Request) adjusted to reflect any repayment or prepayment of the
Advance.

 

“Borrowers”
means each Original Borrower and each Additional Borrower, provided that it has not been
released from its rights and obligations under this Agreement in accordance
with Clause 25.3 (Resignation of a Borrower).

 

“Break Costs”
means the amount (if any) by which:

 

(a)                                      the interest (excluding the Margin), which a Lender should have
received for the period from the date of receipt of all or any part of its
participation in an Advance or Unpaid Sum to the last day of the current
Interest Period in respect of that Advance or Unpaid Sum, had the principal
amount or Unpaid Sum received been paid on the last day of that Interest
Period;

 

exceeds:

 

(b)                                     the amount which that Lender would be able to obtain by placing an
amount equal to the principal amount or Unpaid Sum received by it on deposit
with a leading bank in the Relevant Interbank Market for a period starting on
the Business Day following receipt or recovery and ending on the last day of
the current Interest Period.

 

“Business Day”
means:

 

(a)                                      in relation to any Advance, a day (other than a Saturday or Sunday)
on which banks are open for general business in London, and:

 

(i)                           (in relation to any date for payment or purchase of a currency other
than Euro) the principal financial centre of the country of that currency; or

 

(ii)                        (in relation to any date for payment or purchase of Euro) any TARGET
Day; and

 

(b)                                     for all other purposes, a day (other than a Saturday or Sunday) on
which banks are open for general business in London.

 

“Business Plan” means the 3 year business
plan (consisting of an income statement and balance sheet of the Group) dated 7
October 2003 prepared by ABB and as updated in accordance with Clause 20.4
(Liquidity Plan and Business Plan).

 

3

 

“Commitment”
means:

 

(a)                                      in relation to an Original Lender, the amount in the Base Currency
set opposite its name under the heading “Commitment” in Part 1 of Schedule 1 (The Original
Lenders) and the amount of any other Commitment transferred to it
under this Agreement; and

 

(b)                                     in relation to any other Lender, the amount of any Commitment
transferred to it under this Agreement,

 

to the extent
not cancelled, reduced or transferred by it under this Agreement.

 

“Covenant Compliance Certificate” means
a certificate substantially in the form set out in Schedule 11 (Form of
Covenant Compliance Certificate).

 

“Credit
Rating” means a senior, unsecured long term debt rating given by
S&P or Moody’s.

 

“Default”
means an Event of Default or any event or circumstance specified in Clause 23 (Events of
Default) which (with the expiry of a grace period or the giving of
any notice specified in Clause 23 (Events of Default)) would be an Event of
Default.

 

“Disposal”
means a sale, transfer or other disposal (including by way of lease or loan) by
a person of all or part of its assets, whether by one transaction or a series
of transactions and whether at the same time or over a period of time.

 

“Dutch Borrower” means each Borrower
incorporated or established in The Netherlands.

 

“EBITDA” has the meaning given to such term
in Clause 21.1 (Financial Definitions).

 

“Environmental Claim” means any claim or
proceeding by any person pursuant to any Environmental Law.

 

“Environmental
Law” means any applicable law in any jurisdiction in which any Group
Company conducts business which relates to the pollution or protection of the
environment or harm to or the protection of human health or the health of
animals or plants.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974 of the United States
of America and the regulations promulgated and the rulings issued thereunder.

 

“EURIBOR”
means, in relation to any Advance in Euro:

 

(a)                                      the applicable Screen Rate; or

 

(b)                                     (if no Screen Rate is available for the period of that Advance) the
arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Facility Agent at its request quoted by the Reference Banks to
leading banks in the European interbank market,

 

4

 

as of the
Specified Time on the Quotation Day for the offering of deposits in Euro for a
period comparable to the Interest Period of the relevant Advance.

 

“Event of
Default” means any event or circumstance specified as such in
Clause 23 (Events of Default).

 

“Exemption Regulation” means the Dutch
exemption regulation dated 26 June 2002 (Vrijstellingsregeling
Wtk 1992) (as amended from time to time) as promulgated in
connection with the WTK.

 

“Existing Credit Facility” means the
US$1,500,000,000 revolving credit facility made available pursuant to a
multicurrency revolving facilities agreement dated 17 December 2002.

 

“External Debt” means Indebtedness of any
member of the Group (other than Project Finance Indebtedness, Indebtedness in
respect of any Securitisation, Indebtedness in respect of cash collateralised
loans (entered into for Group fiscal or regulatory purposes) and Indebtedness
owed by one Group Company to another Group Company) incurred pursuant to the
issuance of any note, bond or other debt security (whether issued to the public
or by means of a private placement) or pursuant to the entry into any bank facility
but excluding any such Indebtedness raised by a member of the Group locally and
solely for financing local operating needs.

 

“Facility”
means the revolving loan facility made available under this Agreement as
described in Clause 2.1 (The Facility).

 

“Facility
Agent’s
Spot Rate of Exchange” means the Facility Agent’s Spot Rate of
Exchange for the purchase of the relevant currency with the Base Currency in
the London foreign exchange market at or about 11:00 a.m. on a particular day.

 

“Facility
Office” means, in relation to a Lender, the office identified as
such opposite such Lender’s name in Part 1 of Schedule 1 (The Original
Lenders) (or, in the case of a transferee, at the end of the
Transfer Certificate to which it is a party as transferee) or such other office
as it may from time to time select.

 

“Fee Letter” means the letter dated 27
October 2003 between the Mandated Lead Arrangers and ABB and any letter or
letters between the Mandated Lead Arrangers and the Borrowers (or the Facility
Agent and the Borrower) setting out any of the fees payable in relation to the
Facility.

 

“Final Maturity Date” means the date falling
3 years from the date of this Agreement.

 

“Finance
Document” means this Agreement, the letter dated 27
October 2003 between the Mandated Lead Arrangers and ABB, any Fee Letter,
any Accession Letter, any Resignation Letter, any Security Document and any
other document designated as such in writing by the Facility Agent and ABB.

 

“Finance
Party” means any of the Facility Agent, the Mandated Lead Arrangers,
the Lenders and any trustee appointed under any Security Document.

 

5

 

“GAAP”
means, in relation to the consolidated financial statements of ABB, generally
accepted accounting principles in the United States of America and, in relation
to any other company, generally accepted accounting principles in its
jurisdiction of incorporation or in the United States of America (as
applicable).

 

“Group”
means ABB and its Subsidiaries and “Group Company” means any one of them.

 

“Guarantors”
means each Original Guarantor and each Additional Guarantor provided
that it has not been released from its rights and obligations under
this Agreement, in accordance with Clause 25.6 (Resignation of a Guarantor).

 

“Holding
Company” means, in relation to a company or corporation, any other
company or corporation in respect of which it is a Subsidiary.

 

“Indebtedness”
means, in relation to a person, its obligations (whether present or future,
actual or contingent, as principal or surety) for the payment or repayment of
money (whether in respect of interest, principal or otherwise) incurred in
respect of:

 

(a)                                      moneys borrowed;

 

(b)                                     any bond, note, loan stock, debenture or similar instrument;

 

(c)                                      any acceptance credit, bill discounting, note purchase, factoring or
documentary credit facility;

 

(d)                                     any lease required under GAAP to be treated as a finance lease;

 

(e)                                      receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis);

 

(f)                                        any guarantee, bond, stand-by letter of credit or other similar
instrument issued in connection with the performance of payment obligations;

 

(g)                                     any interest rate or currency swap agreement or any other hedging or
derivatives instrument or agreement;

 

(h)                                     any arrangement entered into primarily as a method of raising
finance pursuant to which any asset sold or otherwise disposed of by that
person is or may be leased to or re-acquired by a Group Company (whether
following the exercise of an option or otherwise); or

 

(i)                                         any guarantee, indemnity or similar insurance against financial loss
given in respect of the obligation of any person falling within any of
paragraphs (a) to (h) above.

 

“Information Package” means the summary of
the transaction dated 14 October 2003 prepared by ABB and the Original
Liquidity Plan.

 

“Interest
Period” means, in relation to an Advance, each period determined in
accordance with Clause 10 (Interest Periods) and, in relation to an
Unpaid Sum, each period determined in accordance with Clause 9.3 (Default
interest).

 

6

 

“Lender”
means:

 

(a)                                      any Original Lender; and

 

(b)                                     any bank which has become a Party as a Lender in accordance with
Clause 24 (Changes
to the Lenders),

 

which in each
case has not ceased to be a Party in accordance with the terms of this
Agreement.

 

“LIBOR”
means, in relation to any Advance:

 

(a)                                      the applicable Screen Rate; or

 

(b)                                     (if no Screen Rate is available for the currency or period of that
Advance) the arithmetic mean of the rates (rounded upwards to four decimal
places) as supplied to the Facility Agent at its request quoted by the
Reference Banks to leading banks in the London interbank market,

 

as of the
Specified Time on the Quotation Day for the offering of deposits in the
currency of that Advance and for a period comparable to the Interest Period for
that Advance.

 

“Liquidity Plan” means the most recent
liquidity plan for the Group certified without personal liability by 2 duly
authorised signatories of ABB, calculated using the same principles used for
the Original Liquidity Plan consistently applied.

 

“Majority
Lenders” means a Lender or Lenders whose Commitments aggregate 662/3%
or more of the Total Commitments.

 

“Mandatory Cost” means the percentage rate
per annum calculated by the Facility Agent in accordance with Schedule 9 (Mandatory Costs).

 

“Margin”
means, at any time the rate per annum computed in accordance with the table set
out in Schedule 4 (The Margin and Utilisation Fee) provided
that:

 

(a)                                      on any day that ABB has Credit Ratings from S&P and Moody’s
which are divergent from each other, the applicable rate per annum for such day
shall be the average of the rates applicable to the two Credit Ratings;

 

(b)                                     on any day that only one of S&P or Moody’s assigns a Credit
Rating to ABB, the applicable rate per annum for such day shall be the rate per
annum for that Credit Rating; and

 

(c)                                      on any day that neither S&P nor Moody’s assigns a Credit Rating
to ABB the applicable rate per annum for such day shall be 225 basis points per
annum,

 

in each case
computed in accordance with the table set out in Schedule 4 (The Margin
and Utilisation Fee).

 

“Material
Adverse Effect”  means a material adverse effect on:

 

7

 

(a)                                      the business, operations, property or condition of the Group as a
whole;

 

(b)                                     the ability of the Obligors to perform payment obligations under the
Finance Documents or, at any time prior to the Trigger Date, the ability of ABB
to comply with its obligations under Clause 21.2 (Financial Condition); or

 

(c)                                      the validity or enforceability of the Finance Documents.

 

“Material
Subsidiary” means:

 

(a)                                      those companies listed in Schedule 10 (Material Subsidiaries); and

 

(b)                                     any Subsidiary that:

 

(i)                        is the holding company of a country (and not a region) that,
together with its Subsidiaries, has combined third-party revenues or assets
(from non-affiliated parties), prepared in accordance with accounting
principles generally accepted in the United States, in excess of 5 percent of
the consolidated revenues or consolidated total assets of the Group for the
most recently completed fiscal year;

 

(ii)                     on a non-consolidated basis has combined third-party revenues or
assets (from non-affiliated parties), prepared in accordance with accounting
principles generally accepted in the United States, in excess of 5 percent of
the consolidated revenues or consolidated total assets of the Group for the
most recently completed fiscal year; or

 

(iii)                  has any notes, bonds, debenture stock, loan stock or other
securities outstanding to non-affiliated third parties in respect of which a
guarantee, keep-well agreement or other credit support has been provided by
ABB;

 

provided
always that for purposes of this definition, the term “revenues” and “assets” shall exclude any revenues or, as the case may be,
assets attributable to activities classified by ABB as non-core or as
discontinued operations.

 

“Month”
means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month, except that:

 

(a)                                      (subject to paragraph (c) below) if the numerically corresponding
day is not a Business Day, that period shall end on the next Business Day in
that calendar month in which that period is to end if there is one, or if there
is not, on the immediately preceding Business Day;

 

(b)                                     if there is no numerically corresponding day in the calendar month
in which that period is to end, that period shall end on the last Business Day
in that calendar month; and

 

(c)                                      if an Interest Period begins on the last Business Day of a calendar
month, that Interest Period shall end on the last Business Day in the calendar
month in which that Interest Period is to end.

 

8

 

The above
rules will only apply to the last Month of any period.

 

“Moody’s”
means Moody’s Investor Services, Inc., or any successor thereto.

 

“Net Debt” has the meaning given to such
term in Clause 21.1 (Financial Definitions).

 

“New Lender” has the meaning given to such
term in Clause 24.1 (Assignments and
transfers by the Lenders).

 

“Obligor”
means a Borrower or a Guarantor.

 

“Obligors’ Agent” has the meaning given to
such term in Clause 2.4 (Obligors’ rights
and obligations hereunder).

 

“Obligor Group”
means ABB, each Borrower and each Guarantor.

 

“Optional
Currency” means a currency (other than the Base Currency) which
complies with the conditions set out in Clause 4.3 (Conditions relating to Optional
Currencies).

 

“Original
Financial Statements” means:

 

(a)                                      in relation to ABB, the audited consolidated financial statements of
the Group for the financial year ended 31 December 2002; and

 

(b)                                     in relation to each Original Obligor other than ABB, its audited
financial statements for its financial year ended 31 December 2002.

 

“Original Liquidity Plan” means the
liquidity plan of the Group dated 7 October 2003 in the agreed form.

 

“Original
Obligor” means an Original Borrower or an Original Guarantor.

 

“Outstandings”
means the aggregate of the Base Currency Amount from time to time of each of
the Advances.

 

“Participating
Member State” means any member state of the European Communities
that adopts or has adopted the Euro as its lawful currency in accordance with
legislation of the European Union relating to European Monetary Union.

 

“Party”
means a party to this Agreement and includes its successors in title, permitted
assigns and permitted transferees.

 

“PMP” means a professional market party (professionele marktpartij) within the
meaning of the Exemption Regulation.

 

“Policy Guidelines” means the Dutch Central
Bank’s Policy Guidelines (issued in relation to the Exemption Regulation) dated
10 July 2002 (and as amended from time to time) (beleidsregel kernbegrippen markttoetreding en
handhaving Wtk 1992).

 

“Project
Company” means any Subsidiary of ABB:

 

(a)                                      which is a single purpose company whose primary purpose is to invest
in, lend to or carry out a specific project or portfolio of projects; and

 

9

 

(b)                                     none of whose liabilities to repay Project Finance Indebtedness are
the subject of security or a guarantee, indemnity or any similar form of
assurance, undertaking or support by any Group Company save to the extent
described in the definition of Project Finance Indebtedness.

 

“Project
Finance Indebtedness” means:

 

(a)                                      any Indebtedness of a Project Company incurred to finance the
project constituted by the assets and business of such Project Company or any
Indebtedness of such Project Company incurred to refinance any such
aforementioned Indebtedness; and

 

(b)                                     where neither the persons to whom such Indebtedness is owed (whether
or not a Group Company) nor any other person shall have any recourse whatsoever
to any Group Company (other than such Project Company) for the repayment or
payment of any sum relating to such Indebtedness other than recourse directly
or indirectly to any Group Company under any form of assurance or undertaking,
which recourse (1) is limited to the enforcement of any share pledge granted by
a Group Company over its shares in such Project Company or the enforcement of
any security granted over a shareholder loan between a Group Company and such
Project Company and/or (2) is limited to a claim for damages for breach of an
obligation (not being a payment obligation) of the person against whom that
recourse is available and/or (3) entitles the creditor for that Indebtedness or
the relevant Project Company, upon default by the Project Company (or in other
circumstances specified in the documentation relating to the project) to
require a payment to be made (whether to or for the benefit of that creditor,
the Project Company or another person), provided that, in the case of (3), where
that payment is capable of being for an amount which is material either alone
or as a percentage of the Indebtedness financing that project, such recourse is
capable of being called on only during the period on or prior to practical
completion of the project or of that portion of that project being financed by
that Indebtedness; or

 

(c)                                      which the Majority Lenders shall have agreed to treat as Project
Finance Indebtedness for the purposes of this Agreement.

 

“Qualifying
Lender” has the meaning given to such term in Clause 13.1 (Definitions).

 

“Quarter Date” has the meaning given to such
term in Clause 21.1 (Financial definitions).

 

“Quotation
Day” means, in relation to any period for which an interest rate is
to be determined:

 

(a)                                      (if the currency is Sterling) the first day of that period;

 

(b)                                     (if the currency is Euro) two TARGET Days before the first day of
that period; or

 

10

 

(c)                                      (for any other currency) two Business Days (which for these purposes
only shall mean a day on which banks are open for general business in London)
before the first day of that period,

 

unless market
practice differs in the Relevant Interbank Market for a currency, in which case
the Quotation Day for that currency will be determined by the Facility Agent in
accordance with market practice in the Relevant Interbank Market (and if
quotations would normally be given by leading banks in the Relevant Interbank
Market on more than one day, the Quotation Day will be the last of those days).

 

“Reference
Banks” means, in relation to LIBOR and Mandatory Costs, the
principal London offices of Citibank, N.A., Credit Suisse First Boston, London
and Dresdner Bank AG and the principal office of Deutsche Bank Luxembourg S.A.
and, in relation to EURIBOR, the principal London offices of Citibank, N.A.,
Credit Suisse First Boston and Dresdner Bank AG and the principal office of
Deutsche Bank Luxembourg S.A. or such other banks as may be appointed by the
Facility Agent in consultation with ABB.

 

“Relevant
Interbank Market” means in relation to Euro, the European interbank market
and, in relation to any other currency, the London interbank market.

 

“Reservations” means the principle that
equitable remedies are remedies which may be granted or refused at the
discretion of the court and damages may be regarded as an adequate remedy, the
limitation of enforcement by laws relating to bankruptcy, insolvency,
liquidation, reorganisation, court schemes, moratoria, fraudulent transfer or
obligation, administration and other laws generally affecting the rights of
creditors, the principle that a security interest may not be perfected or may
be recharacterised if the relevant chargee does not exercise sufficient control
over the relevant asset, the time-barring of claims under the Limitation Acts
(and similar legislation), the possibility that a court may choose not to give
effect to a governing law clause in relation to a contract, the possibility
that an undertaking to assume liability for or to indemnify a person against
non-payment of stamp duty may be void, the fact that a court may refuse to give
effect to a purported contractual obligation to pay costs imposed upon another
party in respect of the costs of any unsuccessful litigation brought against
that party or may not award by way of costs all of the expenditure incurred by
a successful litigant in proceedings brought before that court, or that a court
may stay proceedings if concurrent proceedings based on the same grounds and
between the same parties have previously been brought before another court,
that a court may not give effect to the provisions of Clause 33 (Partial invalidity) (or any similar
provision in another Finance Document) and that interest at a default rate on
overdue amounts may be a penalty and not recoverable.

 

“Resignation
Letter” means a letter substantially in the form set out in
Schedule 8 (Form of Resignation Letter).

 

“Rollover
Advance” means one or more Advances:

 

(a)                                      made or to be made on the same day that a maturing Advance is due to
be repaid;

 

(b)                                     the aggregate amount of which is equal to or less than the maturing
Advance;

 

11

 

(c)                                      in the same currency as the maturing Advance (unless it arose as a
result of the operation of Clause 6.2 (Unavailability of a currency)); and

 

(d)                                     made or to be made to a Borrower for the purpose of refinancing a
maturing Advance made to such Borrower.

 

“S&P”
means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies or any successor thereto.

 

“Screen Rate”
means:

 

(a)                                      in relation to LIBOR, the British Bankers Association Interest
Settlement Rate for the relevant currency and period; and

 

(b)                                     in relation to EURIBOR, the percentage rate per annum determined by
the Banking Federation of the European Union for the relevant period,

 

displayed on
the appropriate page of the Telerate screen. 
If the agreed page is replaced or service ceases to be available, the
Facility Agent may specify another page or service displaying the appropriate
rate after consultation with ABB and the Lenders.

 

“Securitisations” means:

 

(a)                                      the securitisation programme established by various Group Companies
and Toedi Limited and currently including Credit Suisse First Boston, New York
Branch as Programme Administrator, such programme being initially established
on 19 December 2000;

 

(b)                                     the securitisation programme established by various Group Companies
and arranged by Citibank, N.A. (as Operating Agent), such programme being
initially established on or around 17 December 1999;

 

(c)                                      any other local or global securitisation programme from time to time
established (including as of the date of this Agreement) by any Group Company,

 

each as may be
modified, supplemented, renewed, substituted, varied or amended, provided that:

 

(i)                           the
aggregate net proceeds of all such programmes does not at any time exceed
$1,200,000,000; and

 

(ii)                     the terms of such programme are commercially reasonable involving
the securitisation of receivables and for the avoidance of doubt not including
whole business securitisation.

 

“Security”
means any mortgage, charge, assignment by way of security, pledge,
hypothecation, lien and any other security interest of any kind whatsoever.

 

“Security Documents” means the Agreed Form
Pledges if executed, the Agreed Form Trust Deed if executed and any other
document designated as such in writing by the Facility Agent and ABB.

 

12

 

“Sirius” means Sirius International
Försakrings AB (publ).

 

“Specified
Time” means a time determined in accordance with Schedule 6 (Timetables).

 

“Subsidiary”
means a subsidiary within the meaning of section 736 of the Companies Act
1985.

 

“TARGET”
means Trans-European Automated Real-time Gross Settlement Express Transfer
payment system.

 

“TARGET Day”
means any day on which TARGET is open for the settlement of payments in Euro.

 

“Tax”
means any tax, levy, impost, duty or other charge or withholding of a similar
nature (including any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same).

 

“Taxes Act”
means the Income and Corporation Taxes Act 1988.

 

“Total
Commitments” means the aggregate Commitments of the Lenders, being
$1,000,000,000 as at the date of this Agreement.

 

“Total
Outstandings” means the aggregate from time to time of the
Outstandings.

 

“Transfer Certificate”
means a certificate substantially in the form set out in Schedule 5 (Form of
Transfer Certificate) or any other form agreed between the Facility
Agent and ABB.

 

“Transfer
Date” means, in relation to a transfer, the later of:

 

(a)                                      the proposed Transfer Date specified in the Transfer Certificate;
and

 

(b)                                     the date on which the Facility Agent executes the Transfer
Certificate.

 

“Trigger Date” means the date on which
either:

 

(a)                                      the Credit Rating of ABB is investment grade (if at BBB-/Baa3, with
stable outlook (or better)) from one of S&P or Moody’s and (if the other
agency is not at investment grade) no more than one notch lower from the other
(therefore being, for the avoidance of doubt, no lower than BBB-  and Ba1 or BB+ and Baa3); or

 

(b)

 

(i)                          the ratio of Net Debt to EBITDA for the most recently ended two
consecutive financial quarters was 2.50:1 or lower; and

 

(ii)                       the Credit Rating of ABB is investment grade (if at BBB-/Baa3, with
stable outlook (or better)) from either S&P or Moody’s.

 

“Unpaid Sum”
means any sum due and payable but unpaid by an Obligor under the Finance
Documents.

 

“Utilisation”
means a utilisation of the Facility.

 

13

 

“Utilisation
Date” means the date of a Utilisation, being the date on which an
Advance is to be made.

 

“Utilisation
Request” means a notice substantially in the form set out in Part 1
of Schedule 3 (Utilisation Request).

 

“VAT”
means value added tax as provided for in the Value Added Tax Act 1994 and any
other tax of a similar nature.

 

“Verifiable PMP” means a PMP whose status as
such may be determined on the basis of:

 

(a)                                      its entry in Dutch public register (including on-line registers
available on the internet) as referred to in Clauses 1.e.1 through 1.e.5 of the
Exemption Regulation; or

 

(b)                                     a public register published by a regulator of a country as referred
to in Clause 1.e.11 of the Exemption Regulation exercising prudential
supervision over the PMP to the extent generally accessible via the internet.

 

“WTK” means the Dutch Act on the Supervision
of Credit Institutions 1992 (Wet toezicht
kredietwezen 1992) (as amended from time to time).

 

1.2                           Construction

(a)                                       Any reference in this Agreement to:

 

(i)                        the “Facility Agent”,
any “Mandated Lead Arranger”, any
“Finance Party”, any “Lender”, any “Obligor” the “Obligors’
Agent” or any “Party”
shall be construed so as to include its successors in title, permitted assigns
and permitted transferees;

 

(ii)                     “agreed form” is a
reference to a document that is initialled by ABB and the Facility Agent on or
before the date of this Agreement as being agreed;

 

(iii)                  “assets” includes present and future properties, revenues and
rights of every description;

 

(iv)                 the
“European
interbank market” means the interbank market for Euro operating in
Participating Member States;

 

(v)                    a “Finance Document” or any other agreement or instrument is a
reference to that Finance Document or other agreement or instrument as amended
or novated;

 

(vi)                 a
“person”
includes any person, firm, company, corporation, government, state or agency of
a state or any association, trust or partnership (whether or not having
separate legal personality) or two or more of the foregoing;

 

(vii)              a “regulation”
includes any regulation, rule, official directive, request or guideline
(whether or not having the force of law but, if not having the force of law,
the compliance with which is customary) of any

 

14

 

governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority or
organisation;

 

(viii)           a “financial
year” in relation to ABB, means a period in respect of which it is
required to produce annual audited financial statements;

 

(ix)                   a provision of law is a reference to that provision as amended or
re-enacted; and

 

(x)                      unless a contrary indication appears, a time of day is a reference
to London time.

 

(b)                                     Where there is a reference in this Agreement to any amount, limit or
threshold specified in Dollars, in ascertaining whether or not that amount,
limit or threshold has been attained, broken or achieved, as the case may be, a
non-Dollar amount shall, unless the context otherwise requires or the contrary
is indicated, be counted on the basis of the equivalent in Dollars of that
amount using the Facility Agent’s Spot Rate of Exchange except for the purposes of
calculating the dollar equivalent of Total Gross Debt which is not denominated
in dollars for the purposes of the covenant set out in Clause 21.3 (Restriction on Subsidiary Indebtedness),
in which case the dollar exchange rate set out in the Financial Times on 1
July 2003 shall be used.

 

(c)                                      Section, Clause and Schedule headings are for ease of reference
only.

 

(d)                                     Unless a contrary indication appears, a term used in any other
Finance Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in this
Agreement.

 

(e)                                      A Default is “continuing” if it has not been remedied or
waived.

 

(f)                                        For the avoidance of doubt, if Moody’s or S&P place a Credit
Rating on credit watch, that shall not (regardless of outlook) constitute a
change in such Credit Rating or be deemed to be no Credit Rating.

 

(g)                                     Dresdner Kleinwort Wasserstein is a reference to the investment banking division of Dresdner Bank
AG.

 

(h)                                     Barclays Capital is a reference to Barclays Capital, the investment banking division
of Barclays Bank PLC.

 

(i)                                         Any certificate delivered by or on behalf of a Group Company shall
be signed on behalf of that Group Company without personal liability in respect
of the officers or other persons executing such certificate and “certificate”, “certified” and similar provisions shall be construed
accordingly.

 

1.3                           Currency Symbols and
Definitions

“$”
and “Dollars”
denote the lawful currency of the United States of America, “£”
and “Sterling”
denote the lawful currency of the United Kingdom and “Euro” denotes the

 

15

 

single
currency unit of the European Union as constituted by the Treaty of Rome (as
amended).

 

1.4                           Third Party Rights

A person who
is not a Party has no right under the Contract (Rights of Third Parties) Act 1999 to enforce any term of
this Agreement.

 

16

 

SECTION 2

THE FACILITY

 

2.                                 THE FACILITY

 

2.1                           The Facility

Subject to the
terms of this Agreement, the Lenders make available to the Borrowers a
multicurrency revolving credit facility in a maximum aggregate amount of
$1,000,000,000.

 

2.2                           Lenders’ rights and
obligations

(a)                                      The obligations of each Lender under the Finance Documents are
several.  Failure by a Lender to perform
its obligations under the Finance Documents does not affect the obligations of
any other Party under the Finance Documents. 
No Finance Party is responsible for the obligations of any other Finance
Party under the Finance Documents.

 

(b)                                     The rights of each Lender under or in connection with the Finance
Documents are separate and independent rights and any debt arising under the
Finance Documents to a Lender from any of the Borrowers shall be a separate and
independent debt.

 

(c)                                      A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance Documents.

 

2.3                           Facility Offices and nominated
affiliate

(a)                                      Subject to paragraph (b) below, a Lender may (i) change its Facility
Office for the purpose of this Agreement and/or (ii) nominate a different
Facility Office for the purposes of making a particular Advance to any
Borrower, in which event such Facility Office shall for the purposes of this
Agreement be its Facility Office for that Advance but not otherwise.

 

(b)                                     If a Lender changes its Facility Office or nominates a different
Facility Office, (i) that Lender will notify the Facility Agent and ABB
promptly (and, in any event, within 5 Business Days) of such change or, as the
case may be, nomination, and until it does so, the Facility Agent and ABB will
be entitled to assume that no such change has taken place and (ii) if the
country of such Facility Office is not subject to the Financial Action Task
Force any such change or, as the case may be, nomination shall be subject to
the prior written consent of the Facility Agent.

 

2.4                           Obligors’ right and
obligations hereunder

(a)                                      Each Obligor (other than ABB) by its execution of this Agreement or
an Accession Letter irrevocably appoints ABB to act on its behalf as its agent
in relation to the Finance Documents (in this capacity, the “Obligors’ Agent”) and irrevocably
authorises (i) ABB on its behalf to supply all information concerning itself
contemplated by this Agreement to the Finance Parties and to give all notices
and instructions (including, in the case of a Borrower, Utilisation Requests),
to execute on its behalf any Accession Letter and to make such agreements
capable of being given or made by any Obligor

 

17

 

notwithstanding that they may affect such Obligor,
without further reference to or the consent of such Obligor and (ii) each Finance
Party to give any notice, demand or other communication to such Obligor
pursuant to the Finance Documents to ABB on its behalf, and in each case such
Obligor shall be bound thereby as though such Obligor itself had given such
notices and instructions (including, without limitation, any Utilisation
Requests) or executed or made such agreements or received any such notice,
demand or other communication.

 

(b)                                     Every act, omission, agreement, undertaking, settlement, waiver,
notice or other communication given or made by the Obligors’ Agent or given to
the Obligors’ Agent under this Agreement, or in connection with this Agreement
(whether or not known to any other Obligor and whether occurring before or
after such other Obligor became an Obligor under this Agreement) shall be
binding for all purposes on all other Obligors as if the other Obligors had
expressly made, given or concurred with the same.  In the event of any conflict between any notices or other
communications of the Obligors’ Agent and any other Obligor, those of the
Obligors’ Agent shall prevail.

 

(c)                                      An Obligors’ Agent may resign its appointment hereunder by giving
not less than ten Business Days’ prior written notice to that effect to the
Facility Agent, provided that no
such resignation shall be effective until a successor consents in writing to
the Facility Agent to be appointed.

 

3.                                 PURPOSE

 

3.1                           Purpose

Each Borrower
shall apply all amounts borrowed by it under the Facility for the general
corporate purposes of the Group.

 

3.2                           Monitoring

No Finance
Party is bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement.

 

4.                                 CONDITIONS
OF UTILISATION

 

4.1                           Initial Conditions Precedent

No Borrower
may deliver a Utilisation Request unless the Facility Agent has received all of
the documents and other evidence listed in Part I of Schedule 2 (Conditions precedent) in form and
substance reasonably satisfactory to the Facility Agent.  The Facility Agent shall notify ABB and the
Lenders promptly upon being so satisfied.

 

4.2                           Further Conditions Precedent

(a)                                      The Lenders will only be obliged to comply with Clause 5.4 (Lenders’
participation) if on the date of the Utilisation Request and on the
proposed Utilisation Date:

 

(i)                        no Event of Default or, in each case other than in the case of a
Rollover Advance, Default is continuing or would result from the proposed
Advance; and

 

18

 

(ii)                     the representations to be made by ABB pursuant to Clause 19.19 (Repetition)
are true in all respects.

 

(b)                                     An Advance will not be made if it would result in the Base Currency
Amount of all Advances exceeding the Total Commitments.

 

4.3                           Conditions relating to
Optional Currencies

A currency
will constitute an Optional Currency in relation to an Advance if it is
Sterling or Euro, or it is readily available in the amount required and freely
convertible into the Base Currency in the Relevant Interbank Market on the
Quotation Day and the Utilisation Date for that Advance provided that there may not
at any time be Advances outstanding denominated in more than 5 Optional
Currencies.

 

4.4                           Maximum number of Advances

(a)                                      No Borrower may deliver a Utilisation Request if as a result of the
proposed Utilisation more than 10 Advances would be outstanding.

 

(b)                                     Any Advance made by a single Lender under Clause 6.2 (Unavailability
of a currency) shall not be taken into account in this Clause 4.4.

 

19

 

SECTION 3

UTILISATION

 

5.                                 UTILISATION

 

5.1                           Delivery of a Utilisation
Request

A Borrower may
utilise the Facility by delivery to the Facility Agent of a duly completed
Utilisation Request not later than the Specified Time.

 

5.2                           Completion of a Utilisation
Request

(a)                                      Each Utilisation Request delivered to the Facility Agent pursuant to
Clause 5.1 (Delivery
of a Utilisation Request) is irrevocable and will not be regarded as
having been duly completed unless:

 

(i)                        the proposed Utilisation Date is a Business Day within the
Availability Period;

 

(ii)                     the currency and amount of the Utilisation comply with Clause 5.3 (Currency and
amount); and

 

(iii)                  the proposed Interest Period complies with Clause 10 (Interest
Periods).

 

(b)                                     Only one Advance may be requested in each Utilisation Request
delivered to the Facility Agent pursuant to Clause 5.1 (Delivery of a Utilisation Request).

 

5.3                           Currency and amount

(a)                                      The currency specified in a Utilisation Request delivered to the
Facility Agent pursuant to Clause 5.1 (Delivery of a Utilisation Request) must be
the Base Currency or an Optional Currency.

 

(b)                                     The amount of the proposed Advance must be:

 

(i)                        if the currency selected is the Base Currency, a minimum of
$50,000,000 and an integral multiple of $10,000,000; or

 

(ii)                     if the currency selected is Euro, a minimum of Euro50,000,000 and an
integral multiple of Euro10,000,000; or

 

(iii)                  if the currency selected is Sterling, a minimum amount of
£25,000,000 and an integral multiple of £5,000,000; or

 

(iv)                 if
the currency selected is an Optional Currency (other than Euro or Sterling), in
such minimum amount and multiple as the Facility Agent and ABB may agree,

 

or, in any
case, the amount of the Available Facility.

 

5.4                           Lenders’ participation

(a)                                      Subject to the other terms of this Agreement, each Lender shall, on
the relevant Utilisation Date, make its participation in each Advance available
through its Facility Office.

 

20

 

(b)                                     Subject to Clause 6.2 (Unavailability of a currency), the amount
of each Lender’s participation in each Advance will be equal to the proportion
borne by its Available Commitment to the Available Facility immediately prior
to making the Advance.

 

(c)                                      The Facility Agent shall notify each relevant Lender of the amount,
currency and the Base Currency Amount of each Advance at the Specified Time.

 

6.                                 OPTIONAL
CURRENCIES

 

6.1                           Selection of currency

The relevant
Borrower shall select the currency of an Advance in a Utilisation Request.

 

6.2                           Unavailability of a currency

If before the
Specified Time on any Quotation Day:

 

(a)                                      the Facility Agent has received notice from a Lender that the
Optional Currency (other than Euro or Sterling) requested is not readily
available to it in the amount required; or

 

(b)                                     a Lender notifies the Facility Agent that compliance with its
obligation to participate in an Advance in the proposed Optional Currency
(other than Euro or Sterling) would contravene a law or regulation applicable
to it,

 

the Facility
Agent will give notice to the relevant Borrower to that effect by the Specified
Time on that day.  In this event, any
Lender that gives notice pursuant to this Clause 6.2 will be required to
participate in the Advance in the Base Currency (in an amount equal to that
Lender’s proportion of the Base Currency Amount or, in respect of a Rollover
Advance, an amount equal to that Lender’s proportion of the Base Currency
Amount of the maturing Advance that is due to be repaid) and its participation
will be treated as a separate Advance denominated in the Base Currency during
that Interest Period.

 

6.3                           Notification

The Facility
Agent shall notify the Lenders and the relevant Borrower of Optional Currency
amounts (and the Facility Agent’s Spot Rate of Exchange) promptly after they
are ascertained.

 

21

 

SECTION 4

REPAYMENT, PREPAYMENT AND
CANCELLATION

 

7.                                 REPAYMENT
OF ADVANCES

(a)                                      Each Borrower shall repay each Advance made to it on the last day of
its Interest Period.

 

(b)                                     All Advances must be repaid in full on the Final Maturity Date.

 

8.                                 PREPAYMENT
AND CANCELLATION

 

8.1                           Lender Illegality

If it becomes
unlawful in any jurisdiction for a Lender to perform any of its obligations as
contemplated by this Agreement or to fund its participation in any Advance:

 

(a)                                      that Lender shall promptly notify the Facility Agent upon becoming
aware of that event;

 

(b)                                     unless the repayment referred to in paragraph (c) below avoids such
unlawfulness, upon the Facility Agent notifying ABB, the Commitment of that
Lender will be immediately cancelled; and

 

(c)                                      each Borrower shall, to the extent necessary to avoid such
unlawfulness, repay that Lender’s participation in the Advances made to it on
the last day of the Interest Period for each Advance occurring after the
Facility Agent has notified ABB or, if earlier, the date specified by the
Lender in the notice delivered to the Facility Agent (being no earlier than 5
Business Days after receipt of such notice or, if earlier, the last day of any
applicable grace period permitted by law).

 

8.2                           Borrower Illegality

If it is or
becomes unlawful for a Borrower to perform any of its obligations under the
Finance Documents, that Borrower shall promptly repay all Advances borrowed by
it together with accrued interest and all other amounts accrued under the
Finance Documents provided that where such obligations are, or could reasonably
be considered to be, material to the interests of the Lenders under the Finance
Documents, all Borrowers shall within 15 Business Days of being served with
notice by the Facility Agent so to do, repay all Advances, together with accrued
interest and all other amounts accrued under the Finance Documents.  On the service of any such notice the
Facility shall be cancelled and the Commitments will be reduced to zero.

 

8.3                           Mandatory Prepayment on Change
of Control

(a)                                      If any person (whether alone or together with any associated person)
becomes the beneficial owner of shares in the issued share capital of ABB
carrying the right to more than 50% of the votes exercisable at a general
meeting of ABB:

 

(i)                        ABB shall promptly notify the Facility Agent upon becoming aware of
that event; and

 

22

 

(ii)                     the Facility Agent shall, by not less than 15 Business Days’ notice
to ABB and having consulted with ABB, cancel the Facility and declare all
Advances, together with accrued interest, and all other amounts accrued under
the Finance Documents immediately due and payable, whereupon the Facility will
be cancelled and all such outstanding amounts will become immediately due and
payable.

 

For the
purposes of this Clause 8.3, “associated person” means, in relation to
any person, a person who is (i) “acting in concert” (as defined in the City
Code on Takeovers and Mergers) with that person or (ii) a “connected person”
(as defined in section 839 of the Income and Corporate Taxes Act 1988) of
that person.

 

(b)                                     On any cancellation of the Facility pursuant to this Clause 8.3, the
Commitments will be reduced to zero.

 

8.4                           Voluntary cancellation

ABB may, if it
gives the Facility Agent not less than 5 Business Days’ (or such shorter period
as the Majority Lenders may agree) prior notice, cancel the whole or any part
(being a minimum amount of $25,000,000 and an integral multiple of $5,000,000)
of the Available Facility.  Any cancellation
under this Clause 8.4 shall reduce rateably the Commitments.

 

8.5                           Voluntary Prepayment

A Borrower
may, if it gives the Facility Agent not less than 5 Business Days’ (or such
shorter period as the Majority Lenders may agree) prior notice, prepay the
whole or any part of an Advance made to it (but if in part, being an amount
that reduces the Base Currency Amount of the Advance by a minimum amount of
$25,000,000 and rounded as the Facility Agent may reasonably require).

 

8.6                           Right of repayment and
cancellation in relation to a single Lender

(a)                                      If:

 

(i)                        any sum payable to any Lender by ABB or an Obligor is required to be
increased under paragraph (c) of Clause 13.2 (Tax gross-up); or

 

(ii)                     any Lender claims indemnification from ABB or a Borrower under
Clause 13.3 (Tax indemnity) or Clause 14.1 (Increased costs),

 

then ABB may,
whilst the circumstance giving rise to the requirement or indemnification
continues, give the Facility Agent notice of cancellation of the Commitment of
that Lender and its intention to procure the repayment of that Lender’s
participation in the Advances.

 

(b)                                     On receipt of a notice referred to in paragraph (a) above, the
Commitment of that Lender shall immediately be reduced to zero.

 

(c)                                      On the last day of each Interest Period in respect of an Advance
which ends after ABB has given notice under paragraph (a) above (or, if
earlier, the date

 

23

 

specified by ABB in that notice), each Borrower to
which an Advance is outstanding shall repay that Lender’s participation in that
Advance.

 

8.7                           Restrictions

(a)                                      Any notice of cancellation or prepayment given by any Party under
this Clause 8 shall be irrevocable and, unless a contrary indication appears in
this Agreement, shall specify the date or dates upon which the relevant
cancellation or prepayment is to be made and the amount of that cancellation or
prepayment.

 

(b)                                     Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid and, subject to any Break Costs, without
premium or penalty.

 

(c)                                      Unless a contrary indication appears in this Agreement, any part of
the Facility which is prepaid may be reborrowed in accordance with the terms of
this Agreement.

 

(d)                                     No Borrower shall repay or prepay all or any part of the Advances or
cancel all or any part of the Commitments except at the times and in the manner
expressly provided for in this Agreement.

 

(e)                                      No amount of the Total Commitments cancelled under this Agreement
may be subsequently reinstated.

 

(f)                                        If the Facility Agent receives a notice under this Clause 8 it shall
promptly forward a copy of that notice to the affected Borrower or the affected
Lender, as appropriate.

 

24

 

SECTION 5

COSTS OF UTILISATION

 

9.                                 INTEREST

 

9.1                           Calculation of interest

The rate of
interest on each Advance for each Interest Period is the percentage rate per
annum which is the aggregate of the applicable:

 

(a)                                      Margin;

 

(b)                                     LIBOR or, in relation to any Advance in Euro, EURIBOR; and

 

(c)                                      Mandatory Costs.

 

9.2                           Payment of interest

(a)                                      Each Borrower shall pay accrued interest on each Advance made to it
on the last day of each Interest Period (and, if the Interest Period is longer
than six Months, on the dates falling at six monthly intervals after the first
day of the Interest Period).

 

(b)                                     If a Tax Deduction is required by law to be made by an Obligor in
one of the circumstances set out in paragraph (c) of Clause 13.2 (Tax gross-up),
the amount of the payment due from that Obligor shall be increased to an amount
which (after making any Tax Deduction) leaves an amount equal to the payment
which would have been due if no Tax Deduction had been required.

 

9.3                           Default interest

(a)                                      If an Obligor fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue amount from the
due date up to the date of actual payment (both before and after judgment) at a
rate 1.00 per cent higher than the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted an Advance in
the currency of the overdue amount for successive Interest Periods, each of a
duration selected by the Facility Agent (acting reasonably).  Any interest accruing under this Clause 9.3
shall be immediately payable by the relevant Obligor on demand by the Facility
Agent.

 

(b)                                     Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and payable.

 

9.4                           Notification of rates of
interest

The Facility
Agent shall promptly notify the Lenders, ABB and the relevant Borrowers of the
determination of a rate of interest under this Agreement.

 

10.                           INTEREST
PERIODS

 

(a)                                      The relevant Borrower may select an Interest Period for an Advance
in the Utilisation Request for that Advance.

 

25

 

(b)                                     Subject to this Clause 10, a Borrower may select an Interest Period
of 1, 2, 3 or 6 Months or any other period agreed between the relevant Borrower
and the Facility Agent (acting on the instructions of all the Lenders).

 

(c)                                      An Interest Period for an Advance shall not extend beyond the Final
Maturity Date.

 

(d)                                     Each Advance has one Interest Period only.

 

11.                           CHANGES TO THE CALCULATION OF INTEREST

 

11.1                     Absence of quotations

Subject to
Clause 11.2 (Market disruption), if LIBOR or EURIBOR is to be determined
by reference to the Reference Banks but a Reference Bank does not supply a
quotation by the Specified Time on the Quotation Day, the applicable LIBOR or
EURIBOR shall be determined on the basis of the quotations of the remaining
Reference Banks.

 

11.2                     Market disruption

(a)                                      If a Market Disruption Event occurs in relation to an Advance for
any Interest Period, then the rate of interest on each Lender’s share of that
Advance for the Interest Period shall be the rate per annum which is the sum
of:

 

(i)                        the Margin;

 

(ii)                     the rate notified to the Facility Agent, ABB and the relevant
Borrower by that Lender in a certificate (which sets out the details of the
computation of the relevant rate and shall be prima facie non-binding evidence
of the same) as soon as practicable and in any event before interest is due to
be paid in respect of that Interest Period, to be that which expresses as a
percentage rate per annum the cost to that Lender of funding its participation
in that Advance from whatever source it may reasonably select; and

 

(iii)                  the Mandatory Costs, if any, applicable to that Lender’s
participation in the Advance.

 

(b)                                     In this Agreement “Market Disruption Event” means:

 

(i)                        at or about noon on the Quotation Day for the relevant Interest
Period the Screen Rate is not available and none or only one of the Reference
Banks supplies a rate to the Facility Agent to determine LIBOR or, if
applicable, EURIBOR for the relevant currency and period; or

 

(ii)                     before close of business in London on the Quotation Day for the
relevant Interest Period, the Facility Agent receives notifications from a
Lender or Lenders (whose participations in an Advance exceed 50 per cent. of
that Advance) that the cost to it or them of obtaining matching deposits in the
Relevant Interbank Market would be in excess of LIBOR or, if applicable,
EURIBOR.

 

26

 

11.3                     Alternative basis of interest
or funding

(a)                                      If a Market Disruption Event occurs and the Facility Agent or ABB so
requires, the Facility Agent and ABB shall enter into negotiations (for a
period of not more than thirty days) with a view to agreeing a substitute basis
for determining the rate of interest.

 

(b)                                     Any alternative basis agreed pursuant to paragraph (a) above shall,
with the prior consent of the Majority Lenders and ABB, be binding on all
Parties.

 

11.4                     Break Costs

(a)                                      The relevant Borrower shall, within three Business Days of demand by
a Finance Party, pay to that Finance Party its Break Costs attributable to all
or any part of an Advance or Unpaid Sum being paid by that Borrower on a day
other than the last day of an Interest Period for that Advance or Unpaid Sum.

 

(b)                                     Each Lender shall, as soon as reasonably practicable after a demand
by the Facility Agent, provide to ABB and the relevant Borrower a certificate
(which shall constitute prima facie non-binding evidence of the matters to
which it refers) addressed to the Facility Agent, ABB and the relevant Borrower
confirming the amount of its Break Costs for any Interest Period in which they
accrue and setting out the manner of computing such Break Costs.

 

12.                           FEES

 

12.1                     Commitment Fee

(a)                                      ABB shall pay to the Facility Agent (for the account of each Lender)
a commitment fee in the Base Currency computed at the rate of:

 

(i)                        at all times prior to the Trigger Date, the lower of 50 per cent. of
the Margin from time to time and 0.75 per cent. per annum; and

 

(ii)                     at all times on and after the occurrence of the Trigger Date, the
lower of 40 per cent. of the applicable Margin from time to time and 0.75 per
cent. per annum,

 

in each case
on that Lender’s Available Commitment for the Availability Period.

 

(b)                                     The accrued commitment fee is payable on the last day of each
successive period of three Months which ends during the Availability Period, on
the last day of the Availability Period and, if cancelled in full, on the
cancelled amount of the relevant Lender’s Commitment at the time the
cancellation is effective.

 

12.2                     Utilisation Fee

(a)                                      ABB shall pay to the Facility Agent (for the account of the Lenders
pro rata to their portion of Total Outstandings) a utilisation fee in respect
of the Total Outstandings calculated using the rate per annum computed in
accordance with the table set out in Schedule 4 (The Margin and Utilisation Fee) provided
that:

 

(i)                        on any day that ABB has Credit Ratings from S&P and Moody’s
which are divergent from each other, the applicable rate per annum for such day
shall be the average of the rates applicable to the two Credit Ratings;

 

27

 

(ii)                     on any day that only one of S&P or Moody’s assigns a Credit
Rating to ABB, the applicable rate per annum for such day shall be the rate per
annum for that Credit Rating; and

 

(iii)                  on any day that neither S&P nor Moody’s assigns a Credit Rating
to ABB, the applicable rate per annum for such day shall be 50 basis points per
annum for each day upon which Total Outstandings equal or exceed 33 per cent.
of the Total Commitments and are less than 66% of the Total Commitments and 75
basis points per annum for each day upon which Total Outstandings equal or
exceed 66% of the Total Commitments.

 

(b)                                     The accrued utilisation fee is payable on the last day of each
successive period of three Months commencing from the date of this Agreement.

 

12.3                     Participation Fee

ABB shall pay
to the Mandated Lead Arrangers for and on behalf of the Lenders the
participation fees in the amount and at the times agreed in a Fee Letter.

 

12.4                     Agency Fee

ABB shall pay
to the Facility Agent (for its own account) an agency fee in the amount and at
the times agreed in a Fee Letter.

 

12.5                     Other Fees

ABB shall pay
to the Mandated Lead Arrangers and/or the Facility Agent such other fees in the
amounts and at the times as agreed in a Fee Letter.

 

28

 

SECTION 6

ADDITIONAL PAYMENT
OBLIGATIONS

 

13.                           TAX
GROSS UP AND INDEMNITIES

 

13.1                     Definitions

(a)                                      In this Clause 13:

 

“Initial
Borrower Jurisdiction” means any of The Netherlands, the United
States of America or Switzerland.

 

“Protected
Party” means a Finance Party which is or will be, for or on account
of Tax, subject to any liability or required to make any payment in relation to
a sum received or receivable (or any sum deemed for the purposes of Tax to be
received or receivable) under a Finance Document.

 

“Qualifying
Lender” means:

 

(a)                                      in respect of a payment by a Borrower incorporated or resident in
Switzerland for the purposes of Swiss tax, a Lender which is a bank;

 

(b)                                     in respect of a payment by a Borrower incorporated in the United
States of America, a Lender which is:

 

(i)                        created
or organised under the laws of the United States of America or of any state
(including the District of Columbia) thereof; or

 

(ii)                     resident
in a jurisdiction having and eligible for the
benefit of a double taxation agreement with the United States of America which
makes provision for full exemption from tax imposed by the United States of
America on interest and which does not carry on a business in the United States
of America through a permanent establishment with which that Lender’s
participation in the Facility is effectively connected; or

 

(iii)                  entitled
to receive payments under the Finance Documents without deduction or
withholding of any United States federal income taxes,

 

and which has complied with any procedural
requirements within its control necessary to receive such payment without the
imposition of United States withholding tax; or

 

(c)                                      in respect of a payment by a Borrower incorporated in any
jurisdiction except the United States of America or Switzerland, any Lender.

 

“Tax Credit”
means a credit against, relief or remission for, or repayment of any Tax.

 

“Tax
Deduction” means a deduction or withholding for or on account of Tax
from a payment under a Finance Document.

 

“Tax Payment”
means an increased payment made by ABB or an Obligor to a Finance Party under
Clause 13.2 (Tax gross-up) or a payment made by ABB or an Obligor under
Clause 13.3 (Tax indemnity).

 

29

 

(b)                                     In this Clause 13 a reference to “determines” or “determined” means,
save where expressly stated to the contrary, a determination made in the absolute
discretion of the person making the determination acting in good faith.

 

13.2                     Tax gross-up

(a)                                      ABB and each Obligor shall make all payments to be made by it
without any Tax Deduction, unless a Tax Deduction is required by law.

 

(b)                                     ABB, an Obligor or a Lender shall promptly upon becoming aware that
ABB or an Obligor (as the case may be) must make a Tax Deduction (or that there
is any change in the rate or the basis of a Tax Deduction) notify the Facility
Agent accordingly.   If the Facility
Agent receives such notification from a Lender it shall notify ABB and the
relevant Obligor.

 

(c)                                      If a Tax Deduction is required by law to be made by ABB or an
Obligor in one of the circumstances set out in paragraph (d) below, the amount
of the payment due from ABB or that Obligor shall be increased to an amount
which (after making any Tax Deduction) leaves an amount equal to the payment
which would have been due if no Tax Deduction had been required.

 

(d)                                     The circumstances referred to in paragraph (c) above are where a
person entitled to the payment:

 

(i)                        is the Facility Agent or a Mandated Lead Arranger (on its own
behalf);

 

(ii)                     is a Qualifying Lender; or

 

(iii)                  is not or has ceased to be a Qualifying Lender to the extent that
this altered status results from any change after the date of this Agreement in
(or in the interpretation, administration, or application of) any law or double
taxation agreement or any published practice or published concession of any
relevant taxing authority.

 

(e)                                      If ABB or an Obligor is required to make a Tax Deduction, it shall
make that Tax Deduction and any payment required in connection with that Tax
Deduction within the time allowed and in the minimum amount required by law.

 

(f)                                        Within 30 days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, ABB or the relevant Obligor (as
the case may be) shall deliver to the Facility Agent for the Finance Party
entitled to the payment original receipts or certified copies thereof or if not
available, other evidence reasonably satisfactory to that Finance Party that
the Tax Deduction has been made or (as applicable) any appropriate payment paid
to the relevant taxing authority.

 

(g)                                     Each Finance Party, ABB and the Obligors shall co-operate in
completing any procedural formalities necessary for ABB or an Obligor to make a
payment to which the Finance Party is entitled without a Tax Deduction or with
a reduced Tax Deduction.  Each Finance
Party shall on the reasonable written request of

 

30

 

ABB or an Obligor complete and deliver to ABB or that
Obligor all documentation reasonably required by ABB or that Obligor in order
to enable it to make such payments without a Tax Deduction or with a reduced
Tax Deduction (so long as the completion or delivery of such documentation
would not materially prejudice the legal or commercial position of the relevant
Finance Party).

 

13.3                     Tax indemnity

(a)                                      ABB or the Borrowers shall (within three Business Days of written
demand by the Facility Agent) pay to a Protected Party an amount equal to the
loss, liability or cost which that Protected Party determines will be or has
been (directly or indirectly) suffered for or on account of Tax by that
Protected Party in respect of a Finance Document.

 

(b)                                     Paragraph (a) above shall not apply with respect to any Tax assessed
on a Finance Party:

 

(i)

 

(A)                under
the law of the jurisdiction in which that Finance Party is incorporated or, if
different, the jurisdiction (or jurisdictions) in which that Finance Party is
treated as resident for tax purposes;

 

(B)                  under the law of the jurisdiction in which that Finance Party’s
Facility Office is located in respect of amounts received or receivable in that
jurisdiction; or

 

(C)                  arising by reason of the making of an Advance to a Borrower in an
Initial Borrower Jurisdiction under the law of such jurisdiction, except to the
extent arising by reason of a change in law or in any regulation occurring
after the date of this Agreement, provided that this paragraph (b)(i)(C)
shall not apply to any Tax assessed or imposed on the Facility Agent,

 

if that Tax is
imposed on or calculated by reference to the net income received or receivable
(including any sum deemed to be received or receivable) by that Finance Party;
or

 

(ii)                     which is compensated for by Clause 13.2 (Tax Gross Up) (or would have
been so compensated but for an exception to that Clause).

 

(c)                                      A Protected Party making, or intending to make a claim pursuant to
paragraph (a) above shall promptly notify the Facility Agent of the event which
will give, or has given, rise to the claim, following which the Facility Agent
shall notify ABB.

 

(d)                                     A Protected Party shall, on receiving a payment from ABB under this
Clause 13.3, notify the Facility Agent.

 

31

 

13.4                     Tax Credit

If ABB or an
Obligor makes a Tax Payment and the relevant Finance Party determines that:

 

(a)                                      a Tax Credit is attributable to that Tax Payment; and

 

(b)                                     that Finance Party has obtained, utilised and retained that Tax
Credit,

 

the Finance
Party shall pay an amount to ABB or (as the case may be) that Obligor which
that Finance Party determines, acting in good faith, will leave that Finance
Party (after that payment) in the same after-Tax position as it would have been
in had the Tax Payment not been made by ABB or that Obligor (as the case may
be).  The relevant Finance Party shall
endeavour, acting in good faith, to obtain, utilise and retain the Tax Credit save
that it shall not be obliged to disclose any information relating to its tax or
other affairs or any computations in respect thereof.

 

13.5                     Qualifying Lenders

Any Lender
which ceases, for any reason, to be a Qualifying Lender shall promptly notify
ABB and the relevant Obligor(s) of its change of status.

 

13.6                     Stamp taxes

The Borrowers
shall pay and, within 3 Business Days of demand, indemnify each Finance Party
against any cost, loss or liability such Finance Party incurs in relation to
all stamp duty, registration and other similar Taxes payable in respect of any
Finance Document, but not in respect of any assignment or transfer pursuant to
Clause 24 (Changes
to the Lenders).

 

13.7                     Value added tax

(a)                                      All consideration payable under a Finance Document by ABB or the
Borrowers to a Finance Party shall be deemed to be exclusive of any VAT.  If VAT is chargeable on any supply made by
any Finance Party to any Party in connection with a Finance Document, that
Party shall pay to the Finance Party (in addition to and at the same time as
paying the consideration) an amount equal to the amount of the VAT.

 

(b)                                     Where a Finance Document requires ABB or the Borrowers to reimburse
a Finance Party for any costs or expenses, ABB or the Borrowers (as the case
may be) shall also at the same time pay and indemnify that Finance Party
against all VAT directly incurred by that Finance Party in respect of the costs
or expenses save to the extent that that Finance Party is entitled to repayment
or credit in respect of the VAT.

 

14.                           INCREASED
COSTS

 

14.1                     Increased costs

(a)                                      Subject to Clause 14.3 (Exceptions) ABB or the Borrowers shall,
within 3 Business Days of a demand by the Facility Agent, pay for the account
of a Finance Party the amount of any Increased Costs incurred by that Finance
Party or any of its Affiliates as a result of (i) the introduction of or any
change in (or

 

32

 

in the interpretation or application of) any law or
regulation or (ii) compliance with any law or regulation made after the date of
this Agreement.

 

(b)                                     In this Agreement “Increased Costs” means:

 

(i)                        a reduction in the rate of return from the Facility or on a Finance
Party’s (or its Affiliate’s) overall capital;

 

(ii)                     an additional or increased cost; or

 

(iii)                  a reduction of any amount due and payable under any Finance
Document,

 

which is
incurred or suffered by a Finance Party or any of its Affiliates to the extent
that it is attributable to that Finance Party having entered into its
Commitment or funding or performing its obligations under any Finance Document.

 

14.2                     Increased cost claims

(a)                                      A Finance Party intending to make a claim pursuant to Clause 14.1 (Increased
costs) shall promptly notify the Facility Agent of the event giving
rise to the claim, following which the Facility Agent shall promptly notify
ABB.

 

(b)                                     Each Finance Party shall, as soon as practicable after a demand by
the Facility Agent provide a certificate confirming the amount of its Increased
Costs with (subject to any rights or duties of confidentiality the relevant
Finance Party has in respect of such information) full supporting details
(which certificate shall constitute prima facie non-binding evidence of the
matters to which it relates).

 

14.3                     Exceptions

(a)                                      Clause 14.1 (Increased costs) does not apply to the
extent any Increased Cost is:

 

(i)                        attributable to a Tax Deduction required by law to be made by ABB or
an Obligor;

 

(ii)                     compensated for by Clause 13.3 (Tax indemnity)  (or would have been
compensated for under Clause 13.3 (Tax indemnity) but was not so compensated
solely because one of the exclusions in paragraph (b) of Clause 13.3 (Tax
indemnity) applied);

 

(iii)                  not payable as provided in Clause 24.2 (Conditions of Assignment or Transfer);

 

(iv)                 compensated
for by the payment of the Mandatory Costs;

 

(v)                    attributable to the breach by the relevant Finance Party or its
Affiliates of any law or regulation; or

 

(vi)                 not
notified to ABB within 3 months of being incurred.

 

(b)                                     In this Clause 14.3, a reference to a “Tax Deduction” has the same
meaning given to the term in Clause 13.1 (Definitions).

 

33

 

15.                           OTHER
INDEMNITIES

 

15.1                     Currency indemnity

(a)                                      If any sum due from ABB or an Obligor under the Finance Documents (a
“Sum”),
or any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the “First Currency”) in which that Sum is
payable into another currency (the “Second Currency”) for the purpose of:

 

(i)                        making or filing a claim or proof against ABB or any of the
Obligors;

 

(ii)                     obtaining or enforcing an order, judgment or award in relation to
any litigation or arbitration proceedings,

 

ABB or that
Obligor (as the case may be) shall as an independent obligation, within 3
Business Days of demand, indemnify each Finance Party to whom that Sum is due
against any cost, loss or liability arising out of or as a result of the
conversion including any discrepancy between (A) the rate of exchange used to
convert that Sum from the First Currency into the Second Currency and (B) the
rate or rates of exchange available to that person at the time of its receipt
of that Sum.

 

(b)                                     ABB and each Obligor waives any right it may have in any
jurisdiction to pay any amount under the Finance Documents in a currency or
currency unit other than that in which it is expressed to be payable.

 

15.2                     Other indemnities

ABB or the
Borrowers shall indemnify each Lender upon presentation of duly documented
evidence thereof against any cost, loss or liability directly incurred by that
Lender as a result of:

 

(a)                                      the occurrence of any Event of Default (but excluding any costs of
enforcement save as provided in Clause 17.3 (Enforcement Costs));

 

(b)                                     a failure by ABB or an Obligor to pay any amount due under a Finance
Document on its due date, including without limitation, any cost, loss or
liability arising as a result of Clause 28 (Sharing among the Lenders);

 

(c)                                      funding, or making arrangements to fund, its participation in an
Advance requested by a Borrower in a Utilisation Request but not made by reason
of the operation of any one or more of the provisions of this Agreement (other
than by reason of default, negligence or wilful misconduct by that Lender
alone); or

 

(d)                                     an Advance (or part of an Advance) not being prepaid in accordance
with a notice of prepayment given by a Borrower.

 

15.3                     Indemnity to the Facility
Agent

ABB or the
Borrowers shall promptly indemnify the Facility Agent, upon presentation of
duly documented evidence thereof, against any reasonable cost, loss or
liability properly and directly incurred by the Facility Agent (acting
reasonably) as a result of:

 

(a)                                      investigating any event which it reasonably believes is a Default;
or

 

34

 

(b)                                     entering into or performing any foreign exchange contract for the purposes
of Clause 6 (Optional Currencies); or

 

(c)                                      acting or relying on any notice, request or instruction which it
reasonably believes (after due enquiry) to be genuine, correct and
appropriately authorised.

 

16.                           MITIGATION
BY THE LENDERS

 

16.1                     Mitigation

(a)                                      Each Finance Party shall, in consultation with ABB, take all
reasonable steps to mitigate any circumstances which arise and which would
result in any amount becoming payable under or pursuant to, or cancelled
pursuant to, any of Clause 8.1 (Lender Illegality), Clause 13 (Tax gross-up
and indemnities) or Clause 14 (Increased costs) or which would result in
any increased amount being payable under this Agreement by reason of a change
in the Mandatory Costs or a change in the reserve requirements imposed by the
European Central Bank after the date of this Agreement including (but not
limited to) transferring its rights and obligations under the Finance Documents
to another Affiliate or Facility Office (in each case in accordance with the
terms hereof) and, in such circumstances a Lender will, at the request of ABB
but subject to ABB indemnifying it for the costs of so doing, transfer its
rights and obligations under the Finance Documents to another Lender.

 

(b)                                     Paragraph (a) above does not in any way limit the obligations of the
Obligors under the Finance Documents.

 

16.2                     Limitation of liability

(a)                                      ABB or the Borrowers shall indemnify each Finance Party, upon
presentation of duly documented evidence thereof, for all costs and expenses
reasonably and directly incurred by that Finance Party as a result of steps
taken by it under Clause 16.1 (Mitigation).

 

(b)                                     A Finance Party is not obliged to take any steps under Clause 16.1 (Mitigation)
(other than a transfer of its rights and obligations to another Lender where
ABB or a Borrower indemnifies it for the cost of so doing) if, in the opinion
of that Finance Party (acting reasonably), to do so could reasonably be
expected to be prejudicial to it.

 

17.                           COSTS AND
EXPENSES

 

17.1                     Transaction expenses

ABB or the
Borrowers shall promptly on demand pay, upon presentation of duly documented
evidence thereof, the Facility Agent and the Mandated Lead Arrangers the amount
of all costs and expenses (including, but not limited to, legal fees)
reasonably and directly incurred by any of them in connection with the
negotiation, preparation, execution and syndication of:

 

(a)                                      this Agreement and any other documents referred to in this
Agreement; and

 

(b)                                     any other Finance Documents executed after the date of this
Agreement.

 

35

 

17.2                     Amendment costs

If (a) ABB
requests an amendment, waiver or consent or (b) an amendment is required
pursuant to Clause 29.9 (Change of currency), ABB or the Borrowers
shall, within 3 Business Days of demand, reimburse the Facility Agent, upon
presentation of duly documented evidence thereof, for the amount of all costs
and expenses (including legal fees) reasonably and directly incurred by the
Facility Agent and which have previously been agreed with ABB in responding to,
evaluating, negotiating or complying with that request or requirement.

 

17.3                     Enforcement costs

ABB or the
Borrowers shall, within 3 Business Days of demand, pay to each Finance Party
the amount of all costs and expenses (including legal fees) directly incurred
by that Finance Party at any time after the service of a notice by the Facility
Agent under Clause 23.13 (Acceleration) in connection with the
enforcement of, or the preservation of any rights under, any Finance Document.

 

17.4                     FSA and ECB costs

(a)                                      This Clause 17.4 applies if, whether now or in the future, either:

 

(i)                        a requirement to pay fees is imposed by the Financial Services
Authority under the Fees Rules; or

 

(ii)                     a reserve requirement is imposed by the European Central Bank;

 

which, in
either case, is applied to any Lender (and would be applied generally to banks
or financial institutions of a similar nature to that Lender) as a consequence
of its entering into and/or performing its obligations under this Agreement
and/or assuming or maintaining its Commitment under this Agreement and/or
making one or more Advances under this Agreement. If, as a result, that
Lender’s effective return on its overall capital is reduced, ABB and the
Borrowers agree to reimburse that Lender for the amount claimed.

 

(b)                                     In the event that paragraph (a) above applies, each Lender may
submit a certificate setting out a calculation of the amount claimed by it
(and, in the case of an amount claimed as a result of a reserve requirement
being imposed by the European Central Bank, certifying that such amount has
been reasonably determined) to the Facility Agent within the period (the “Certificate
Period”) of 10 Business Days after the end of each Relevant Period.
The Facility Agent will notify ABB of the amount claimed by that Lender within
5 Business Days after the end of the relevant Certification Period and ABB or
the Borrowers shall (absent manifest error in the relevant notice) reimburse
that Lender for the amount claimed within 3 Business Days after the date of
such notification.

 

(c)                                      In this Clause 17.4, a “Relevant Period” is, as appropriate:

 

(i)                        the period beginning on the date of this Agreement and ending on 30
June 2004; and

 

(ii)                     each subsequent period of six months starting on 30 June 2004
and ending on the Final Maturity Date,

 

36

 

and “Fees Rules”
means, as appropriate, either:

 

(i)                        the rules on periodic fees contained in the FSA Supervision Manual;
or

 

(ii)                     such other law or regulations as may be in force from time to time
relating to the payment of fees for the acceptance of deposits.

 

37

 

SECTION 7

GUARANTEE

 

18.                           GUARANTEE
AND INDEMNITY

 

18.1                     Guarantee and indemnity

Subject to the
provisos and confirmations contained in Clause 18.9 (Confirmations and Restrictions),
each Guarantor irrevocably and unconditionally jointly and severally:

 

(a)                                      guarantees to each Finance Party punctual performance by each
Borrower of all that Borrower’s obligations under the Finance Documents;

 

(b)                                     undertakes with each Finance Party that whenever a Borrower does not
pay any amount when due under or in connection with any Finance Document, that
Guarantor shall immediately on demand pay that amount as if it was the
principal obligor; and

 

(c)                                      indemnifies each Finance Party immediately on demand against any
cost, loss or liability suffered by that Finance Party if any obligation
guaranteed by it is or becomes unenforceable, invalid or illegal.  The amount of the cost, loss or liability
shall be equal to the amount which that Finance Party would otherwise have been
entitled to recover.

 

18.2                     Continuing guarantee

This guarantee
is a continuing guarantee and will extend to the ultimate balance of sums
payable by any Obligor under the Finance Documents, regardless of any
intermediate payment or discharge in whole or in part.

 

18.3                     Reinstatement

If any payment
by an Obligor or any discharge given by a Finance Party (whether in respect of
the obligations of any Obligor or any security for those obligations or
otherwise) is avoided or reduced as a result of insolvency or any similar
event:

 

(a)                                      the liability of each Obligor shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and

 

(b)                                     each Finance Party shall be entitled to recover the value or amount
of that security or payment from each Obligor, as if the payment, discharge,
avoidance or reduction had not occurred.

 

18.4                     Waiver of defences

The
obligations of each Guarantor under this Clause 18 will not be affected by an
act, omission, matter or thing which, but for this Clause, would reduce,
release or prejudice any of its obligations under this Clause 18 (without
limitation and whether or not known to it or any Finance Party) including:

 

(a)                                      any time, waiver or consent granted to, or composition with, any
Obligor or other person;

 

(b)                                     the release of any other Obligor or any other person under the terms
of any composition or arrangement with any creditor of any member of the Group;

 

38

 

(c)                                      the taking, variation, compromise, exchange, renewal or release of,
or refusal or neglect to perfect, take up or enforce, any rights against, or
security over assets of, any Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security;

 

(d)                                     any incapacity or lack of power, authority or legal personality of
or dissolution or change in the members or status of an Obligor or any other
person;

 

(e)                                      any amendment (however fundamental) or replacement of a Finance
Document or any other document or security;

 

(f)                                        any unenforceability, illegality or invalidity of any obligation of
any person under any Finance Document or any other document or security; or

 

(g)                                     any insolvency or similar proceedings.

 

18.5                     Immediate recourse

Each Guarantor
waives any right it may have of first requiring any Finance Party (or any
trustee or agent on its behalf) to proceed against or enforce any other rights
or security or claim payment from any person before claiming from that
Guarantor under this Clause 18.  This
waiver applies irrespective of any law or any provision of a Finance Document
to the contrary.

 

18.6                     Appropriations

Until all
amounts which may be or become payable by the Obligors under or in connection
with the Finance Documents have been irrevocably paid in full, each Finance
Party (or any trustee or agent on its behalf) may:

 

(a)                                      refrain from applying or enforcing any other moneys, security or
rights held or received by that Finance Party (or any trustee or agent on its
behalf) in respect of those amounts, or apply and enforce the same in such
manner and order as it sees fit (whether against those amounts or otherwise)
and no Guarantor shall be entitled to the benefit of the same; and

 

(b)                                     hold in an interest-bearing suspense account any moneys received
from any Guarantor or on account of any Guarantor’s liability under this Clause
18.

 

18.7                     Deferral of Guarantors’ rights

Until all
amounts which may be or become payable by the Obligors under or in connection
with the Finance Documents have been irrevocably paid in full or the Facility
Agent otherwise directs, no Guarantor will exercise any rights which it may
have by reason of performance by it of its obligations under the Finance
Documents:

 

(a)                                      to be indemnified by an Obligor;

 

(b)                                     to claim any contribution from any other guarantor of any Obligor’s
obligations under the Finance Documents; and/or

 

(c)                                      to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Finance Parties under the
Finance Documents or

 

39

 

of any other guarantee or security taken pursuant to,
or in connection with, the Finance Documents by any Finance Party.

 

18.8                     Additional security

This guarantee
is in addition to and is not in any way prejudiced by any other guarantee or
security now or subsequently held by any Finance Party.

 

18.9                     Confirmations and Restrictions

(a)                                      Any term or provision of this Clause 18.9 or any other term in
this Agreement or any Finance Document notwithstanding, the maximum aggregate
amount of the obligations for which any Guarantor which is incorporated in any
state of the United States of America (a “US Guarantor”) shall be liable shall not
exceed the maximum amount for which such US Guarantor can be liable without
rendering this Agreement or any other Finance Document, as it relates to the US
Guarantor, subject to avoidance under applicable law relating to fraudulent
conveyance or fraudulent transfer (including section 548 of the Bankruptcy
Code of the United States or any applicable provisions of comparable state law)
(collectively “Fraudulent Transfer Laws”),
in each case after giving effect (a) to all other liabilities of the US
Guarantor, contingent or otherwise, that are relevant under such Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of the
Guarantor in respect of intercompany indebtedness to any Borrower to the extent
that such indebtedness would be discharged in an amount equal to the amount
paid by the US Guarantor hereunder) and (b) to the value as assets of the US
Guarantor (as determined under the applicable provisions of such Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement, indemnity or
similar rights held by such US Guarantor pursuant to (i) applicable law or (ii)
any other agreement providing for an equitable allocation among the US
Guarantor and other Subsidiaries or affiliates of any Borrower of obligations
arising under this Agreement or any guarantees of the obligations by such
parties.

 

(b)                                     The obligations and liabilities of each Guarantor (excluding ABB)
which is incorporated in Switzerland shall in respect of all present and future
conditional and unconditional claims of the Finance Parties against any member
of the Group other than that Guarantor and its wholly owned Subsidiaries
arising from time to time out of the Finance Documents only be deemed to be
undertaken or incurred to the extent and in the maximum amount of that
Guarantor’s free reserves available for distribution (being the positive
difference between the assets of that Guarantor and the aggregate of all
liabilities, the amount of the registered share capital and the mandatory
reserves at any given time, all these amounts to be established in accordance
with Swiss law), taking into account the deduction of Swiss withholding tax at
the rate of 35% (or such other rate in force from time to time), subject to any
applicable double taxation treaty, levied on any such reserves made available
for distribution.

 

40

 

SECTION 8

 

REPRESENTATIONS,
UNDERTAKINGS AND EVENTS OF DEFAULT

 

19.                           REPRESENTATIONS

 

ABB (in
respect of itself and, where specified, each Group Company or each Material
Subsidiary) and each other Obligor (in respect of itself) makes the
representations and warranties set out in this Clause 19 to each Finance Party
on the date of this Agreement.

 

19.1                     Status

(a)                                      It is a corporation, duly incorporated and validly existing under
the law of its jurisdiction of incorporation.

 

(b)                                     It and each Group Company has the power to own its assets and carry
on its business as it is being conducted.

 

19.2                     Binding obligations

The
obligations expressed to be assumed by it in each Finance Document are, subject
to the Reservations, legal, valid, binding and enforceable obligations.

 

19.3                     Non-conflict with other
obligations

The entry into
and performance by it of, and the transactions contemplated by, the Finance
Documents to which it is a party do not and will not conflict with:

 

(a)                                      any law or regulation applicable to it;

 

(b)                                     its constitutional documents; or

 

(c)                                      any agreement or instrument binding upon it or any Group Company or
any of their assets,

 

and, in the
case of paragraph (c) on any repetition after the date of this Agreement, in a
manner that could reasonably be expected to have a Material Adverse Effect.

 

19.4                     Power and authority

It has the
power to enter into, perform and deliver, and has taken all necessary action to
authorise its entry into, performance and delivery of, the Finance Documents to
which it is a party and the transactions contemplated by those Finance
Documents.

 

19.5                     Validity and admissibility in
evidence

All
Authorisations required by ABB and each other Obligor (including, in the case
of any Dutch Obligor and if applicable, any works council advice):

 

(a)                                      to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Finance Documents to which it is a party; and

 

(b)                                     to make the Finance Documents to which it is a party admissible in
evidence in its jurisdiction of incorporation,

 

have been
obtained or effected and are in full force and effect.

 

41

 

19.6                     Governing law and enforcement

Subject to the
Reservations, the choice of governing law of each of the Finance Documents to
which it is a party will be recognised and enforced in:

 

(a)                                      its jurisdiction of incorporation; and

 

(b)                                     in relation to any Security Document, the jurisdiction where the
assets intended to be the subject of security under any Security Document are
situated.

 

19.7                     Insolvency

Neither it nor
any Material Subsidiary (excluding Combustion Engineering Inc.) has taken any
action nor have any steps been taken or legal proceedings been started against
it for winding-up, dissolution or re-organisation, the enforcement of any
Security over its assets or for the appointment of a receiver, administrative
receiver, or administrator, trustee or similar officer of it or any of its
assets.

 

19.8                     No filings or stamp taxes

Under the law
of:

 

(a)                                      its jurisdiction of incorporation; and

 

(b)                                     in relation to any Security Document, the jurisdiction where the assets
intended to be the subject of security under any Security Document are
situated,

 

it is not
necessary that the Finance Documents to which it is party be filed, recorded or
enrolled with any court or other authority in that jurisdiction or that any
stamp, registration or similar tax be paid on or in relation to those Finance
Documents or the transactions contemplated by those Finance Documents, other
than in respect of the security granted pursuant to any Security Document,
which steps will be taken prior to the first drawdown if required under the
provisions of paragraph 2 of Part 1 of Schedule 2 (Conditions Precedent).

 

19.9                     No default

(a)                                      No Default or, on repetition, no Event of Default is continuing or
might reasonably be expected to result from the making of any Utilisation.

 

(b)                                     No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on a Group
Company or to which their assets are subject which has had or could reasonably
be expected to have a Material Adverse Effect.

 

19.10               No misleading information

(a)                                      Any factual information provided by it or any of its Subsidiaries
for the purposes of the Information Package was true and accurate in all
material respects as at the date it was provided or as at the date (if any) at
which it is stated.

 

(b)                                     The Business Plan has been prepared on the basis of recent
historical information and on the basis of assumptions considered in good faith
by ABB to be reasonable.

 

42

 

(c)                                      Nothing has occurred or been omitted from the information provided
by any Group Company in relation to the Information Package and no information
has been given or withheld that results in the information contained in the Information
Package being untrue or misleading in any material respect as at the date of
the relevant component of the Information Package.

 

(d)                                     All written information supplied by a Group Company after the date
hereof in connection herewith is considered in good faith by ABB to be true,
complete and accurate in all material respects as at the date it was given and
is not misleading in any material respect as at such date.

 

19.11               Financial statements and
Liquidity Plans

(a)                                      Its Original Financial Statements were prepared in accordance with
GAAP consistently applied.

 

(b)                                     Its Original Financial Statements fairly present in all material
respects its financial condition and operations (consolidated in the case of
ABB and, where applicable, any other Obligor) during the relevant financial
year.

 

(c)                                      Each of the latest audited consolidated financial statements
required to be delivered under Clause 20.1(a) fairly presents in all material
respects the financial position of the Group as at the date to which they were
prepared and for the period then ended.

 

(d)                                     Each of the latest set of consolidated financial statements required
to be delivered under Clause 20.1(b) fairly presents in all material respects
the financial condition of the Group as at the date to which they were prepared
and for the period then ended.

 

(e)                                      The projections and forecasts contained in the Original Liquidity
Plan are fair and based on assumptions considered in good faith by ABB to be
reasonable as at the date to which it was drawn up and the Original Liquidity
Plan does not omit any information known to ABB which would make such
projections and forecasts materially misleading as at the date to which it was
drawn up.

 

(f)                                        The projections and forecasts contained in the Liquidity Plan most
recently delivered to the Facility Agent are fair and based on assumptions
considered in good faith by ABB to be reasonable on the date of delivery
hereunder and such Liquidity Plan does not omit any information known to ABB as
at such date which would make such projections and forecasts materially
misleading.

 

19.12               No Material Adverse Effect

Since 30
June 2003:

 

(a)                                      there has been no material adverse change in any of the business,
condition (financial or otherwise), operations, performance or properties of
the Group (taken as a whole); and

 

(b)                                     no event or circumstance or series of events or circumstances
whether related or not has occurred which has a Material Adverse Effect,

 

43

 

provided that none of the facts or circumstances referred
to in (i) the Information Package or (ii) any public filings, announcements or
press releases issued by ABB or the rating agencies prior to the date hereof
shall, for the purposes of this representation, constitute a material adverse
change or a Material Adverse Effect as contemplated by the paragraphs above.

 

19.13               Pari passu ranking

Its payment
obligations under the Finance Documents rank at least pari passu with the
claims of all its other unsecured and unsubordinated creditors, except for
obligations mandatorily preferred by law applying to companies generally.

 

19.14               No proceedings pending or
threatened

No litigation,
arbitration or administrative proceedings of or before any court, arbitral body
or agency which might reasonably be expected to have a Material Adverse Effect
have (to the best of its knowledge and belief) been started or threatened
against it or any of its Subsidiaries save in relation to asbestos liabilities
relating to the business of Combustion Engineering Inc.

 

19.15               Environmental Compliance

Each Group
Company has complied in all respects with all Environmental Law save to the
extent that non-compliance could not reasonably be expected to have a Material
Adverse Effect.

 

19.16               Good Title to Assets

It has good, valid
and marketable title to, or valid leases or licences of, and all appropriate
Authorisations to use, the material assets necessary to carry on its business
as presently conducted.

 

19.17               Pensions

As of the last
actuarial report, its pension plan is funded to the levels required by
applicable local laws.

 

19.18               Dutch Borrower Regulatory
Compliance

The Dutch
Borrower represents, warrants and agrees that it has the appropriate exemptive
reliefs available pursuant to the Exemption Regulation and that it complies
with article 4 of the Exemption Regulation including in particular that:

 

(a)                                      on the date of this Agreement the Dutch Borrower has verified that
each Lender qualifies as a PMP in accordance with the Policy Guidelines; and

 

(b)                                     if on the date on which a New Lender becomes a party to this
Agreement, it is a requirement of Dutch law that it is a PMP and that the Dutch
Borrower must verify its PMP status in accordance with the Policy Guidelines,
on such date the Dutch Borrower has verified that such New Lender qualifies as
a PMP in accordance with the Policy Guidelines.

 

Each Lender
represents and warrants to the Dutch Borrower on the date of this Agreement
that it is a PMP and each New Lender to whom a Lender assigns or transfers any
or all of its rights under this Agreement (if on the date such assignment or
transfer becomes effective it is a requirement under Dutch law that such New
Lender is a PMP)

 

44

 

will be deemed
to have represented and warranted to the Dutch Borrower that on such date it is
a PMP.

 

19.19               Repetition

(a)                                      The representations and warranties in Clause 19.1 (Status)
to Clause 19.6 (Governing law and
enforcement), 19.9 (No Default),
paragraph (d) of Clause 19.10 (No misleading
information), paragraphs (c) and (d) of Clause 19.11 (Financial
Statements) and Clause 19.13 (Pari
passu ranking) are deemed to be made by each Obligor by reference to
the facts and circumstances then existing on the date of each Utilisation
Request and the first day of each Interest Period.

 

(b)                                     The representation and warranty in paragraph (f) of Clause 19.11 (Financial statements) is deemed to be made
by ABB on the date of delivery of each Liquidity Plan in relation to that
Liquidity Plan.

 

(c)                                      The representation and warranty in paragraph (b) of Clause 19.10 (No misleading information) is deemed to be
made by ABB on the day each Business Plan is delivered to the Facility Agent
pursuant to Clause 20.4 (Liquidity Plan and
Business Plan).

 

20.                           INFORMATION
UNDERTAKINGS

 

The
undertakings in this Clause 20 remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any
Commitment is in force.

 

20.1                     Financial statements

(a)                                      ABB and each other Obligor shall supply to the Facility Agent in
sufficient copies for all the Lenders, as soon as the same become available,
but in any event within 120 days after the end of each of its financial years
in the case of ABB and within 150 days in the case of each other Obligor its statutory
unconsolidated annual statements for that financial year.

 

(b)                                     ABB shall supply to the Facility Agent in sufficient copies for all
the Lenders, as soon as the same become available, but in any event before the
date falling 120 days after the end of each of its financial years, its audited
consolidated annual statements.

 

(c)                                      ABB shall supply to the Facility Agent in sufficient copies for all
the Lenders, as soon as the same become available, but in any event within 45
days after the end of each quarter of each of its financial years (except the
fourth quarter) its consolidated financial statements for that quarter.

 

20.2                     Requirements as to financial
statements

(a)                                      Each set of financial statements delivered by an Obligor pursuant to
Clause 20.1 (Financial statements) shall be certified without personal
liability by a director of the relevant company as fairly representing its
financial condition as at the date at which those financial statements were
drawn up.

 

45

 

(b)                                     Each set of financial statements delivered pursuant to Clause 20.1 (Financial
statements) shall be prepared using GAAP.

 

(c)                                      Each set of financial statements of an Obligor delivered pursuant to
Clause 20.1 (Financial statements) shall be prepared using GAAP, and
accounting practices and financial reference periods consistent with those
applied in the preparation of the Original Financial Statements unless, in
relation to any set of financial statements, ABB or the relevant Obligor
notifies the Facility Agent that there has been a change in GAAP, or its
accounting practices or reference periods and the relevant Obligor in
consultation with its auditors delivers to the Facility Agent:

 

(i)                        a description of any change necessary for those consolidated
financial statements to reflect the GAAP, accounting practices and reference
periods upon which that Obligor’s Original Financial Statements were prepared;
and

 

(ii)                     in respect of changes affecting the consolidated accounts of the
Group, sufficient information, in form and substance as may be reasonably
required by the Facility Agent, to enable the Lenders to determine whether
Clause 21 (Financial
covenants) has been complied with and make an accurate comparison
between the financial position indicated in those financial statements and that
Obligor’s Original Financial Statements.

 

Any reference
in this Agreement to those financial statements shall be construed as a
reference to those financial statements as adjusted to reflect the basis upon
which the Original Financial Statements were prepared.

 

20.3                     Covenant Compliance
Certificate

(a)                                      ABB shall supply to the Facility Agent, with each set of financial
statements delivered by ABB pursuant to paragraph (b) or (c) of Clause 20.1 (Financial
Statements), a Covenant Compliance Certificate setting out (in
reasonable detail):

 

(i)                        computations as to compliance with Clause 21.2 (Financial Condition) and
Clause 21.3 (Restriction on Subsidiary
Indebtedness) as at the date as at which those financial statements
were drawn up; and

 

(ii)                     a reconciliation of the available cash as set out in the Liquidity
Plan delivered with that Covenant Compliance Certificate to the cash position
as set out in the consolidated financial statements delivered with that
Covenant Compliance Certificate,

 

provided that, at any time on and
following the Trigger Date, a Covenant Compliance Certificate will only be
required to be delivered with each set of financial statements delivered by ABB
pursuant to paragraph (b) of Clause 20.1 (Financial
Statements) and with each set of financial statements delivered by
ABB pursuant to paragraph (c) of Clause 20.1 (Financial
Statements) that relate to the end of the second quarter in any
financial year).

 

46

 

(b)                                     Each Covenant Compliance Certificate shall be signed by two officers
of ABB without personal liability.

 

20.4                     Liquidity Plan and Business
Plan

(a)                                      ABB shall supply to the Facility Agent (in sufficient copies for all
the Lenders) with each Covenant Compliance Certificate delivered prior to the
Trigger Date an up to date Liquidity Plan.

 

(b)                                     ABB shall supply to the Facility Agent (in sufficient copies for all
the Lenders), on or prior to 1 December of each financial year ending
after 31 December 2003 an updated Business Plan (in respect of financial
years ending in 2005 and 2006 for the Business Plan delivered on or prior to 1
December 2004 and in respect of the financial year ending in 2006 for the
Business Plan delivered on or prior to 1 December 2005) together with a
statement reconciling such updated Business Plan to the most recently delivered
Liquidity Plan.

 

20.5                     Information: miscellaneous

ABB shall
supply to the Facility Agent (in sufficient copies for all the Lenders, if the
Facility Agent so requests):

 

(a)                                      all documents dispatched by it to its shareholders (or any class of
them) or its creditors generally at the same time as they are dispatched;

 

(b)                                     promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings or Environmental Claim which are
current, threatened or pending against one or more Group Companies and which
could reasonably be expected to have a Material Adverse Effect;

 

(c)                                      promptly, such further information regarding the financial condition,
business and operations of any Group Company as any Finance Party (acting
through the Facility Agent) may reasonably request; and

 

(d)                                     promptly upon becoming aware of a material development, details of
the progress of the Combustion Engineering Inc Chapter XI filing and any change
in the structure of the Group that is material to the interests of the Lenders.

 

20.6                     Notification of default

(a)                                      ABB and each Obligor shall notify the Facility Agent of any Default
(and the steps, if any, being taken to remedy it) promptly upon becoming aware
of its occurrence (unless that Obligor is aware that a notification has already
been provided by another Obligor).

 

(b)                                     If any Lender considers in good faith that a Default is continuing,
promptly upon a request by the Facility Agent, ABB shall supply to the Facility
Agent a certificate signed by two of its authorised signatories (without
personal liability) on its behalf certifying that no Default is continuing (or
if a Default is continuing, specifying the Default and the steps, if any, being
taken to remedy it).

 

47

 

20.7                     Use of Websites

(a)                                      Any Obligor may satisfy its obligation under this Agreement to
deliver any information in relation to those Lenders (the “Website Lenders”) who accept
this method of communication by posting this information onto an electronic
website designated by the Borrower and the Facility Agent (the “Designated
Website”) if:

 

(i)                        the Facility Agent expressly agrees (after consultation with each of
the Lenders) that it will accept communication of the information by this
method;

 

(ii)                     both ABB and the Facility Agent are aware of the address of and any
relevant password specifications for the Designated Website; and

 

(iii)                  the information is in a format previously agreed between ABB and the
Facility Agent.

 

If any Lender
(a “Paper
Form Lender”) does not agree to the delivery of information
electronically then the Facility Agent shall notify ABB accordingly and ABB
shall supply the information to the Facility Agent (in sufficient copies for
each Paper Form Lender) in paper form. 
In any event ABB shall supply the Facility Agent with at least one copy
in paper form of any information required to be provided by it.

 

(b)                                     The Facility Agent shall supply each Website Lender with the address
of and any relevant password specifications for the Designated Website
following designation of that website by ABB and the Facility Agent.  The Facility Agent shall notify each Website
Lender when any document is posted to the Designated Website.

 

(c)                                      ABB shall promptly upon becoming aware of its occurrence notify the
Facility Agent if:

 

(i)                        the Designated Website cannot be accessed due to technical failure;

 

(ii)                     the password specifications for the Designated Website change;

 

(iii)                  any new information which is required to be provided under this
Agreement is posted onto the Designated Website;

 

(iv)                 any
existing information which has been provided under this Agreement and posted
onto the Designated Website is amended; or

 

(v)                    ABB becomes aware that the Designated Website or any information
posted onto the Designated Website is or has been infected by any electronic
virus or similar software.

 

If the
Borrower notifies the Facility Agent under paragraph (c)(i) or paragraph (c)(v)
above, all information to be provided by ABB under this Agreement after the
date of that notice shall be supplied in paper form unless and until the

 

48

 

Facility Agent
and each Website Lender is satisfied that the circumstances giving rise to the
notification are no longer continuing.

 

(d)                                     Any Website Lender may request, through the Facility Agent, one
paper copy of any information required to be provided under this Agreement
which is posted onto the Designated Website. 
ABB shall comply with any such request within ten Business Days.

 

20.8                     “Know your customer” checks

(a)                                      Each Obligor shall promptly upon the request of the Facility Agent
or any Lender supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Facility Agent (for itself or on
behalf of any Lender) or any Lender (for itself or on behalf of any prospective
New Lender) in order for the Facility Agent, such Lender or any prospective New
Lender to carry out and be satisfied with the results of all necessary “know
your customer” or other checks in relation to any person that it is required to
carry out pursuant to the transactions contemplated in the Finance Documents.

 

(b)                                     Each Lender shall (save as may be prohibited by law) promptly upon
the request of the Facility Agent supply, or procure the supply of, such
documentation and other evidence as is reasonably requested by the Facility
Agent (for itself) in order for the Facility Agent to carry out and be
satisfied with the results of all necessary “know your customer” or other
checks in relation to any person that it is required to carry out pursuant to
the transactions contemplated in the Finance Documents.

 

(c)                                      ABB shall, by not less than 10 Business Days’ written notice to the
Facility Agent, notify the Facility Agent (which shall promptly notify the
Lenders) of its intention to request that one of its Subsidiaries becomes an
Additional Obligor pursuant to Clause 25 (Changes
to the Obligors).

 

(d)                                     Following the giving of any notice pursuant to paragraph (a) above,
ABB shall promptly upon the request of the Facility Agent or any Lender supply,
or procure the supply of, such documentation and other evidence as is
reasonably requested by the Facility Agent (for itself or on behalf of any
Lender) or any Lender (for itself or on behalf of any prospective New Lender)
in order for the Facility Agent, such Lender or any prospective New Lender to
carry out and be satisfied with the results of all necessary “know your
customer” or other checks in relation to any person that it is required to
carry out pursuant to the accession of such Subsidiary to this Agreement as an
Additional Obligor.

 

21.                           FINANCIAL
COVENANTS

 

21.1                     Financial definitions

In this
Clause:

 

“Asbestos Trusts” means the trusts
established for the benefit of present and future claimants in the proceedings
relating to Combustion Engineering Inc. under Chapter XI of the US Bankruptcy
Code;

 

49

 

“Consolidated Net Worth” means total
stockholders’ equity, calculated disregarding changes in total accumulated
other comprehensive income/loss after 30 June 2003 onwards, in each case
as reflected in ABB’s consolidated statement of changes in stockholders’ equity
(part of the consolidated financial statements of ABB) adjusted:-

 

(a)                                      by excluding the amount of any adjustment in respect of ABB’s shares
to be contributed to the Asbestos Trusts and, when recognised as a provision,
the amount of any contingent or prospective liability in respect of the
obligation of members of the Group (as at the date hereof) to contribute cash
to the Asbestos Trusts;

 

(b)                                     to disregard capital gains and losses from disposals booked or
recorded after 30 June 2003 of assets and businesses classified as
non-core or discontinued operations as at 30 June 2003 (such as sales of
businesses, long term assets, equity investments and including the
abandonment/liquidation of businesses);

 

(c)                                      to exclude changes since 30 June 2003 in market valuation
resulting from the bifurcation of embedded derivatives and in the consequent
related amortisation of any premium/discount on issuance in respect of the
$968,000,000 convertible bonds issued by a member of the Group as well as any
changes in the market value of any derivative put in place by the Group to
hedge the embedded derivative in the bond;

 

(d)                                     to disregard impairments and other write offs in respect of goodwill
and other intangible assets to the extent the same occur after
30 June 2003;

 

(e)                                      to disregard movements on deferred tax assets relating to
discontinued operations to the extent the same occur after
30 June 2003; and

 

(f)                                        to exclude the effects of changes in US GAAP or the application
thereof effective after 30 June 2003.

 

“Consolidated Profits Before Interest and Tax”
means, in respect of any Relevant Period, the earnings before interest and
taxes, as reflected in ABB’s consolidated income statement.

 

“EBITDA” means, for any Relevant Period,
Consolidated Profits Before Interest and Taxes and Minority Interest before any
amount attributable to the impairment, write-off or amortisation of any
intangible assets and impairment, write-off or depreciation of tangible assets
(in each case to the extent that the same occur after 31 December 2002)
adjusted to disregard any impact of:

 

(a)                                      new accounting standards or the application thereof adopted in 2003
or thereafter;

 

(b)                                     costs relating to ABB’s announced restructuring programme known as
the “step change program” up to a maximum aggregate amount of $750,000,000
during the life of the Facility;

 

(c)                                      restatements of previous quarters;

 

50

 

(d)                                     charges or credits in respect of employee share plans and other
employee incentive arrangements (including the “management incentive plan”)
which are (in each case) in place as at the date hereof;

 

(e)                                      impairments or write offs relating to marketable securities
classified as available for sale and held by group insurance or reinsurance
companies; and

 

(f)                                        gains or losses arising by reasons of disposals (such as the sale of
businesses, long term assets, equity investments and including the
abandonment/liquidation of businesses) occurring after 30 June 2003.

 

“Net Debt” means Total Gross Debt less cash
available in group treasury operations as disclosed in the Liquidity Plan and
the reconciliation to balance sheet cash and equivalents as disclosed in the
Covenant Compliance Certificate.

 

“Quarter Date” means the last day of each
Relevant Period.

 

“Relevant Period” means each period of
twelve months ending on the last day of ABB’s financial year and each period of
twelve months ending on the last day of each quarter of ABB’s financial year.

 

“Total Gross Debt” means the aggregate of
short-term borrowings and current maturities on long-term borrowings and
long-term borrowings in each case as reflected in ABB’s consolidated balance
sheet as of the last day of the Relevant Period plus, as reported in the latest
available Liquidity Plan, the obligation of members of the Group to make cash
payments to the Asbestos Trusts plus (without double counting) the aggregate
net proceeds of any Securitisation to the extent that the aggregate net
proceeds thereof for the Group at any time exceed $650,000,000 (excluding any
amount of such cash proceeds that are not freely transferable under applicable
law and regulation to the group treasury operations as disclosed in the
Covenant Compliance Certificate) on the last day of the Relevant Period
excluding the impact of changes in US GAAP or the application thereof effective
after 30 June 2003 and further excluding any changes from 30
June 2003 in the market valuation of derivatives embedded in the
$968,000,000 convertible bond issued by a member of the Group and the related
amortisation of discount on issuance resulting from the bifurcation of the
embedded derivatives in such bond.

 

“Total Gross Interest” means, in respect of
any Relevant Period, the interest expense for financial liabilities and costs
of the securitisation programmes of the Group as reflected in ABB’s
consolidated income statement (excluding items considered as other finance
expense, such as, but not limited to any fees, taxes or commissions, foreign
exchange gains or losses, gains or losses on marketable securities, gains or
losses on derivatives, the effects arising from the bifurcation of the embedded
derivatives in respect of the $968,000,000 convertible bond issued by a member
of the Group and charges or credits in relation to management incentive plans).

 

21.2                     Financial Condition

ABB shall
ensure that:

 

(a)                                      The ratio of EBITDA to Total Gross Interest for each Relevant Period
ended on each Quarter Date specified below (or, after the Trigger Date, each
Relevant

 

51

 

Period ending on each 30 June and
31 December set out below) shall not be less than the ratio set out
below opposite such date.

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 December 2003

  	
   

  	
  2.45:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 March 2004

  	
   

  	
  2.60:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  30 June 2004

  	
   

  	
  2.60:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  30 September 2004

  	
   

  	
  2.75:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 December 2004

  	
   

  	
  3.00:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 March 2005

  	
   

  	
  3.25:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  30 June 2005, and thereafter

  	
   

  	
  3.50:1

  	
   

  

 

(b)                                     The ratio of Net Debt to EBITDA for each Relevant Period ended on
each Quarter Date specified below (or, after the Trigger Date, each Relevant
Period ending on each 30 June and 31 December set out
below) shall not be more than the ratio set out below opposite such date.

 

	
  Quarter Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 December 2003

  	
   

  	
  4.40:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 March 2004

  	
   

  	
  4.25:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  30 June 2004

  	
   

  	
  3.75:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  30 September 2004

  	
   

  	
  3.00:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 December 2004

  	
   

  	
  2.75:1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31 March 2005, and thereafter

  	
   

  	
  2.50:1

  	
   

  

 

(c)                                      Consolidated Net Worth shall not, as at any Quarter Date (or, after
the Trigger Date, half year of ABB), be less than the relevant amount
calculated in accordance with the following formula:

 

A + B,

 

where:

 

A  =  $3,000,000,000;
and

 

B                                        =                                               in respect of a Quarter Date, 50 per cent. of the Cumulative
Consolidated Net Income of the Group for the period from 30 September 2003
until such Quarter Date.  For these
purposes, “Cumulative Consolidated Net Income” is the aggregate of the
consolidated net income of the Group (adjusted to exclude those amounts set out
in (a) to (f) of the definition of Consolidated Net Worth) for the fourth
quarter of the 2003 financial year of ABB and

 

52

 

each completed financial year of ABB ending thereafter plus (if the
relevant Quarter Date is not the last day of a financial year of the Group) the
cumulative consolidated net income (adjusted as aforesaid) of the Group for the
part financial year during which such Quarter Date falls provided that if the consolidated net
income (as so adjusted) for any such financial year or the cumulative
consolidated net income (as so adjusted) for any such part financial year
ending on such Quarter Date is a negative amount, such amount will be deemed to
be zero for the purposes of this paragraph (c).

 

21.3                     Restriction on Subsidiary
Indebtedness

The aggregate
amount of Total Gross Debt (other than:

 

(a)                                      Project Finance Indebtedness;

 

(b)                                     Indebtedness owed by one Group Company to another Group Company;

 

(c)                                      amounts borrowed by a finance company which is a Group Company and
which are on-lent, and remain on-lent, to a member of the Obligor Group;

 

(d)                                     amounts borrowed by a Group Company from a bank to which
cash-collateral (in a substantially equivalent amount) has been granted by a
Group Company in respect of the relevant Group Company’s obligation to repay
such amounts;

 

(e)                                      any amounts borrowed by a Group Company which constitute Total Gross
Debt to the extent such amounts are borrowed for the purposes of refinancing
other borrowings constituting Total Gross Debt so long as amounts so borrowed
are promptly applied in such manner;

 

(f)                                        Indebtedness relating to Sirius, ABB Export Bank and ABB Credit OY
Leases (in each case as at the date of this Agreement);

 

(g)                                     Indebtedness in respect of bonds and commercial paper issued by
members of the Group that are capital market issuers; and

 

(h)                                     amounts owed to Combustion Engineering Inc. or any trust established
in connection with its Chapter XI filing),

 

of Group
Companies which are not members of the Obligor Group shall not at any time
after the date of this Agreement exceed $1,000,000,000.

 

22.                           GENERAL
UNDERTAKINGS

 

The
undertakings in this Clause 22 remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any
Commitment is in force.

 

22.1                     Authorisations

Each Obligor
shall promptly:

 

(a)                                      obtain, comply with and do all that is necessary to maintain in full
force and effect; and

 

53

 

(b)                                     supply certified copies to the Facility Agent of,

 

any
Authorisation (including, in the case of any Dutch Obligor, any applicable
works council advice) required under any law or regulation of its jurisdiction
of incorporation to enable it to perform its obligations under the Finance
Documents and to ensure the legality, validity, and, subject to the
Reservations (as they apply at the date of this Agreement only) enforceability
or admissibility in evidence in its jurisdiction of incorporation of any
Finance Document.

 

22.2                     Compliance with laws

Each Obligor
shall comply in all respects with all laws (including, without limitation,
Environmental Law and ERISA) to which it may be subject, if failure so to
comply would have a Material Adverse Effect.

 

22.3                     Negative pledge

(a)                                      Neither ABB nor any Obligor shall (and ABB shall procure that no
other Group Company will) create or permit to subsist any Security over any of
its assets.

 

(b)                                     Paragraph (a) above does not apply to:

 

(i)                        any Security over any bank account in favour of the bank with which
such account is held, in each case granted by any Group Company in the ordinary
course of its banking arrangements for the purpose of netting debit and credit
balances;

 

(ii)                     any Security arising by operation of law;

 

(iii)                  any Security contained in a contract for sale or supply entered into
in the ordinary course of trading, where such Security is granted to such
seller or, as the case may be, supplier and is limited in recourse to the asset
sold or, as the case may be, supplied;

 

(iv)                 any
Security over or affecting any asset acquired by a Group Company after the date
of this Agreement if:

 

(A)                the
Security was not created in contemplation of the acquisition of that asset by a
Group Company; and

 

(B)                  the principal amount secured has not been increased in contemplation
of, or since the acquisition of that asset by a Group Company;

 

(C)                  a Group Company uses all reasonable efforts promptly to discharge
such Security within 3 months of the acquisition of that asset by a Group
Company and, in any event, such Security is discharged within 6 months of the
acquisition of that asset by a Group Company;

 

(v)                    any Security over or affecting any asset of a Group Company acquired
after the date of this Agreement, where the Security is created prior to the
date on which that company becomes a Group Company if:

 

54

 

(A)                the
Security was not created in contemplation of the acquisition of that company;

 

(B)                  the principal amount secured has not increased in contemplation of
or since the acquisition of that company;

 

(C)                  a Group Company uses all reasonable efforts promptly to discharge
such Security within 3 months of the acquisition of that asset by a Group
Company and, in any event, such Security is discharged within 6 months of the
acquisition of that asset by a Group Company;

 

(vi)                 any
Security arising pursuant to the Securitisations;

 

(vii)              any
Security over the assets of a Project Company, any shareholder loan made to a
Project Company or the shares in a Project Company where such Security was
created for the purpose of securing Indebtedness incurred to acquire and/or
develop the assets of such Project Company and where such Indebtedness
constitutes Project Finance Indebtedness of such Project Company, in each case
where the Project Company and Project Finance Indebtedness is created or
incurred in accordance with the usual business of the Group carried on at the
date of this Agreement;

 

(viii)           any
Security securing Indebtedness incurred by a Group Company to refinance
Indebtedness secured by Security of the type referred to in paragraphs (iv) or
(v) above where such first-mentioned Security and the conditions referred to in
paragraph (iv) or, as the case may be, (v) above continue to be satisfied,
mutatis mutandis;

 

(ix)                   any Security provided by a Group Company which is an insurance or
reinsurance company in the ordinary course of its business;

 

(x)                      any Security provided in connection with loans to Group Companies
cash collateralised by other members of the Group, and interest rate and
currency swaps and other derivative contracts, in the ordinary course of Group
treasury activities;

 

(xi)                   any Security provided in respect of ABB Credit OY Leases as at the
date of this Agreement;

 

(xii)                any
Security over any real estate assets pursuant to mortgage financings in a
principal amount up to $150,000,000;

 

(xiii)             any
Security over or affecting any asset created to facilitate the Disposal of an
asset by a Group Company (where such Disposal is permitted under paragraph (b)
of Clause 22.4 (Disposals));

 

(xiv)            any
Security over or affecting assets having an aggregate market value not in
excess of $750,000,000 to secure bonding lines of members of the Group;

 

55

 

(xv)               any
Security provided over the shares in Sirius securing indebtedness in a
principal amount of not more than $200,000,000;

 

(xvi)            any
Security provided to or for the benefit of the Finance Parties pursuant to the
Finance Documents;

 

(xvii)         any
Security provided in connection with any real estate-related defeasance
structures, including without limitation U.S. tax leases; and

 

(xviii)      any
Security to the extent not falling within any of paragraphs (i) - (xvii)
(inclusive) above provided that:

 

(A)                the
total amount of Indebtedness secured pursuant to this paragraph (xviii) shall
at no time exceed $250,000,000; and

 

(B)                  Security may not be provided pursuant to this paragraph (xviii) in
respect of Indebtedness in excess of $25,000,000 in relation to any single or
series of related debt-financing transactions.

 

22.4                     Disposals

(a)                                      Neither ABB nor any Obligor shall (and ABB shall ensure that no
other Group Company will), enter into a Disposal.

 

(b)                                     Paragraph (a) above does not apply to a Disposal:

 

(i)                        of any asset, company or business classified as at 30 June 2003
as a non-core activity of ABB or as held for sale/discontinued operations (each
a “Non-Core Undertaking”);

 

(ii)                     of any asset of a Non-Core Undertaking that is not a core asset of
the Group;

 

(iii)                 prior
to the Trigger Date, of any asset, company or business that is a core asset of
the Group (each a “Core Undertaking”)
or of any asset of a Core Undertaking:

 

(A)                that
when taken with all other such Disposals in the same financial year generates
in aggregate net proceeds of not more than $750,000,000; and

 

(B)                  where two authorised signatories of ABB have certified in writing to
the Lenders that on a historic basis for the most recent Quarter Date prior to
such Disposal and looking forward for each Quarter Date during the term of the
Facility (calculated in each case on a pro forma basis) such Disposal would not
give rise to a breach of Clause 21.2 (Financial
Condition),

 

Provided that any such Disposal that
would not be permitted because of the limitation set out in paragraph (A) above
may be made if details thereof have been provided to the Lenders and the
Majority Lenders have not objected in writing to such Disposal within 30
Business Days;

 

56

 

(iv)                 at
any time on or after the Trigger Date of a Core Undertaking or of an asset
owned by a Core Undertaking provided that
(in the case of a sale of the business or shares of a Core Undertaking or a
revenue generating asset of a Core Undertaking) two authorised signatories of
ABB have certified in writing to the Lenders that on a historic basis for the
most recent Quarter Date prior to such Disposal and looking forward for each
Quarter Date falling on 30 June and 31 December during the term of
the Facility (calculated in each case on a pro forma basis), such Disposal
would not give rise to a breach of Clause 21.2 (Financial condition);

 

(v)                    to a Group Company;

 

(vi)                 of
cash or cash equivalents where such Disposal is not otherwise prohibited under
this Agreement;

 

(vii)              made
in the ordinary course of business of the disposing Group Company;

 

(viii)           of
cash and cash equivalents, notes, shares and marketable securities, rights
under insurance contracts and real estate to or in connection with the trusts
to be established for the purpose of meeting claims in respect of the Chapter
XI Filing of CE up to the amount set out in the Original Liquidity Plan;

 

(ix)                   of assets which are sold and leased back in circumstances not
prohibited by the other terms hereof;

 

(x)                      of obsolete assets (not being businesses or shares in a company
owning a business) which in the reasonable opinion of a Group Company are not
required for the efficient operation of the business of the Group;

 

(xi)                   made by way of exchange for assets (not being businesses or shares
in a company owning a business) of similar nature and value;

 

(xii)                of
receivables pursuant to the Securitisations,

 

Provided that all Disposals shall be
made on arm’s length terms (other than distributions and other intra-group
transactions where ABB considers in good faith that the fiscal benefits to the
Group to be obtained from such transaction militate against such terms and such
transactions would not be materially adverse to the interests of the Lenders
hereunder).

 

(c)                                      Prior to the Trigger Date, any Disposal (not being an intra-Group
transaction) having a value in excess of $25,000,000 shall be for a cash
consideration of at least 80% of total consideration (or such greater amount or
lower percentage as the Majority Lenders may approve in relation to any such
Disposal, such approval not to be unreasonably withheld or delayed).

 

57

 

22.5                     Claims Pari Passu

ABB shall
ensure that at all times the claims of the Finance Parties against each Obligor
under the Finance Documents rank at least pari passu with the claims of all its
other unsecured and unsubordinated creditors save those of such Obligor’s
creditors whose claims are mandatorily preferred by law applying to companies
generally.

 

22.6                     Mergers and Acquisitions

(a)                                      No Obligor shall enter into any amalgamation, demerger, merger or
corporate reconstruction (excluding any Approved Reorganisation or any Disposal
permitted under paragraph (b) of Clause 22.4 (Disposals)
and save as permitted under Clause 23.7 (Insolvency
Proceedings)) save where the Facility Agent is satisfied, acting
reasonably, that ABB or the relevant Obligor’s obligations under the Finance
Documents will continue to be ABB’s or the relevant Obligor’s legal, valid,
binding and (subject to the Reservations) enforceable obligations.

 

(b)                                      No
Obligor shall (and ABB shall ensure that no Group Company shall) acquire any
company, business or undertaking or form or enter into any joint venture,
partnership, consortium or other like arrangement (any such joint venture,
partnership, consortium or other like arrangement being hereafter a “JV”).

 

(c)                                       Paragraph (b) above does not apply:

 

(i)                        prior to the Trigger Date, to any acquisition of an undertaking (by
way of acquisition of shares or otherwise) or to any JV:

 

(A)                that
carries on a business currently conducted by a member of the Group or which is
reasonably ancillary to any such business; and

 

(B)

 

(1)                    where the aggregate consideration (or, in the case of a JV,
investment by Group Companies) is not in excess of $3,500,000; or

 

(2)                    where the aggregate consideration (or, in the case of a JV,
investment by Group Companies), when taken with all other such acquisitions or
investments in the same financial year (other than those in (i)(B)(1) above),
is not in excess of $750,000,000 (provided that all or part of such amount may
be carried forward from any applicable financial year to the following
financial year where a transaction signs in the applicable financial year and
closes in the first 3 months of the following financial year); and

 

(C)                  where two authorised signatories of ABB have certified in writing to
the Lenders that on a historic basis for the most recent Quarter Date prior to
such acquisition or other transaction and looking forward to each Quarter Date
for the term of the Facility on a pro forma basis, such acquisition would not
give rise to a breach of Clause 21.2 (Financial
condition),

 

58

 

Provided that any acquisition or other
transaction that would not be permitted because of the limitation set out in
paragraph (B) above may be made if details thereof have been provided to the
Lenders and the Majority Lenders have not objected in writing to such
acquisition or other transaction within 30 Business Days;

 

(ii)                     at any time after the Trigger Date, in circumstances where two
authorised signatories of ABB have certified in writing to the Lenders that on
a historic basis for the most recent Quarter Date prior to such acquisition or
other transaction and looking forward for each Date falling on 30 June and
31 December during the term of the Facility on a pro forma basis, such
acquisition or other transaction would not give rise to a breach of Clause 21.2
(Financial Condition);

 

(iii)                  to a solvent reorganisation not affecting the Obligors or any
security contemplated or granted pursuant to the Agreed Form Pledges;

 

(iv)                 to
JVs entered into by Group Companies provided the formation of such JV is
pursuant to the core business of the Group and consistent with the ordinary
business practices of the Group as at the date hereof.

 

22.7                     Change of business

ABB shall procure
that no change is made to the business of the Group which would result in the
core business of the Group, taken as a whole, being something other than the
business of power and automation technology.

 

22.8                     Insurance

Each Obligor
shall (and ABB shall ensure that each Group Company will) maintain insurances
on and in relation to its business and assets with reputable underwriters or
insurance companies against those risks and to the extent as is usual for
companies carrying on the same or substantially similar business in the
relevant jurisdiction and taking into account the availability of insurance
generally.

 

22.9                     Prepayment of Group Facilities

Prior to the
Trigger Date, ABB shall not (and shall ensure that no other Group Company will)
voluntarily prepay, purchase or redeem any bonds or other capital markets
instruments issued by a Group Company having in each case a maturity date
falling after the Final Maturity Date provided
that any Group Company may prepay any bonds or other capital market
instruments out of the net cash proceeds of any capital markets instrument
issued after the date of this Agreement with a maturity date not earlier than
the bonds or capital markets instruments being prepaid.

 

22.10               Restrictions on making loans
and guarantees

(a)                                      ABB shall not (and shall ensure that no other Group Company shall)
after the date of this Agreement make any loans or grant any credit or other
financial accommodation (but excluding for the avoidance of doubt its own bank
deposits) to or for the benefit of any person or grant any guarantee or
indemnity in respect of the financial obligations or liabilities of any other
person.

 

(b)                                     Paragraph (a) above does not apply to:

 

59

 

(i)                        trade credit or indemnities granted in the ordinary course of
business and upon terms usual for such trade (including vendor financing in an
aggregate amount in respect of the Group not materially greater than the amount
outstanding as at the date of this Agreement);

 

(ii)                     any loan, credit or other financial accommodation between members of
the Group;

 

(iii)                  loans to and other credit or financial accommodation to or for the
benefit of Project Companies in an aggregate amount in respect of the Group not
materially greater than the amount outstanding as at the date of this
Agreement;

 

(iv)                 any loan, credit or other financial accommodation involving
transactions with or for the benefit of employees, officers or directors of
Group Companies relating to the provision of motor vehicles;

 

(v)                    any other loan, credit or other financial accommodation provided the
aggregate amount of such transactions at any time does not exceed $25,000,000;

 

(vi)                 any
loan, credit, other financial accommodation, guarantee or indemnity to
facilitate the Disposal of the Oil, Gas & Petrochemical Division;

 

(vii)              prior
to the Trigger Date, any loan, credit, other financial accommodation, guarantee
or indemnity to facilitate Disposals permitted under paragraph (b) of Clause
22.4 (Disposals) up to an
aggregate amount not exceeding $150,000,000;

 

(viii)           at any
time on and after the Trigger Date, any loan, credit, other financial
accommodation, guarantee or indemnity to facilitate Disposals permitted under
paragraph (b) of Clause 22.4 (Disposals);
and

 

(ix)                   guarantees or indemnities in respect of the obligations or
liabilities of other members of the Group (where the relevant obligation or
liability of such other member of the Group is permitted under this Agreement).

 

22.11               Material Subsidiaries

ABB shall
maintain 100 per cent. (direct or indirect) ownership of all Material
Subsidiaries subject to any Disposals permitted under paragraph (b) of Clause
22.4 (Disposals) and save as
permitted under Clauses 22.6 (Mergers and
Acquisitions) and 23.7 (Insolvency
Proceedings).

 

22.12               Obligor Coverage

ABB shall
ensure that if External Debt is incurred at any time on or after the date of
this Agreement by a Group Company that is not an Obligor in circumstances where
the proceeds of such External Debt are not on-lent to the Group through an
Obligor or where the External Debt is incurred pursuant to a guarantee given by
a Group Company that is not an Obligor, then, in each case, the Group Company
that has incurred such External Debt or the Group Company that has on-lent such
External Debt into the Group shall by

 

60

 

the date
falling no later than the date such External Debt is incurred, accede to this
Agreement as an Additional Obligor pursuant to Clause 25 (Changes to the Obligors).

 

23.                           EVENTS OF
DEFAULT

 

Each of the
events or circumstances set out in Clauses 23.1 (Non-payment) to 23.12 (Material
Adverse Effect) inclusive is an Event of Default.

 

23.1                     Non-payment

An Obligor
does not pay on the due date any amount payable pursuant to a Finance Document
at the place, and in the currency, in which it is expressed to be payable
unless:

 

(a)                                      payment is made within 3 Business Days of its due date; and

 

(b)                                     its failure to pay is due solely to administrative error or
technical delays in the transmission of funds.

 

23.2                     Financial Covenants

Any
requirement of Clause 21 (Financial
Covenants) is not satisfied.

 

23.3                     Other obligations

An Obligor
does not comply with any provision of the Finance Documents (other than those
referred to in Clause 23.1 (Non-payment)) and, if the failure to
comply is capable of remedy, it is not remedied within 15 Business Days of the
Facility Agent giving notice to ABB or ABB becoming aware of the failure to
comply.

 

23.4                     Misrepresentation

Any
representation or statement made or deemed (by virtue of Clause 19.19  (Repetition)) to be made by ABB or any
other Obligor in this Agreement is or proves to have been incorrect or
misleading in any respect when made or deemed to be made and, where the
circumstances making such representation or statement incorrect or misleading
are capable of being altered so that such representation or statement is
correct, such circumstances are not so altered within 15 Business Days of the
Facility Agent giving notice to ABB of such representation or statement being
incorrect provided that no Event
of Default shall occur under this Clause 23.4 by reason of the representation
set out in Clause 19.18(a) or 19.18(b) (Dutch
Borrower Regulatory Compliance) being untrue (but without prejudice
to the rights of the Finance Parties under this Agreement other than under this
Clause 23.4 or under applicable law and without prejudice to any other Event of
Default which may occur by reason of any representation set out in Clause
19.18(a) or 19.18(b) (Dutch Borrower Regulatory
Compliance) being untrue in any material respect or otherwise by
reason of a Lender not being a PMP).

 

23.5                     Cross default

(a)                                      Any Indebtedness of all or any of the Group Companies is not paid
when due nor within any originally applicable grace period.

 

(b)                                     Any Indebtedness of all or any of the Group Companies has (i) become
capable of being declared and is declared to be or (ii) otherwise becomes due
and payable, in any case, prior to its specified maturity as a result of a
default or an event of default (however described).

 

61

 

(c)                                      Any commitment for any Indebtedness of all or any of the Group
Companies is cancelled or suspended by a creditor of all or any of the Group
Companies as a result of a default or an event of default (however described).

 

(d)                                     Any creditor of all or any of the Group Companies becomes entitled
to declare any Indebtedness of all or any of the Group Companies due and
payable prior to its specified maturity as a result of a default or an event of
default (however described).

 

(e)                                      No Event of Default will occur under this Clause 23.5 if (1) the
Indebtedness falling within paragraphs (a) to (d) is Project Finance
Indebtedness or intra-Group Indebtedness or (2) the aggregate amount of Indebtedness
or commitment for Indebtedness falling within paragraphs (a) to (d) (excluding
any described in (1) above) above is less than $50,000,000.

 

23.6                     Insolvency

(a)                                      Any Obligor or any Material Subsidiary is unable or admits in
writing an inability to pay its debts as they fall due, suspends making
payments on any of its debts or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its creditors with a
view to rescheduling any of its indebtedness.

 

(b)                                     The value of the assets of any Obligor is less than its liabilities
(taking into account contingent and prospective liabilities).

 

(c)                                      A moratorium is declared in respect of any indebtedness of any
Obligor or any Material Subsidiary.

 

(d)                                     This Clause 23.6 shall not apply in respect of Combustion
Engineering Inc.

 

23.7                     Insolvency proceedings

Any corporate
action, legal proceedings or other procedure or step is taken in relation to:

 

(a)                                      the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) of any Obligor or any Material
Subsidiary (excluding Combustion Engineering Inc) other than a solvent
liquidation or reorganisation of any Material Subsidiary;

 

(b)                                     a composition, assignment or arrangement with any creditor of any
Obligor or any Material Subsidiary;

 

(c)                                      the appointment of a liquidator (other than (i) a winding up
petition which is frivolous or vexatious and which is, in any event, discharged
within 30 days of its presentation or (ii) in respect of a solvent liquidation
of any Group Company (other than an Obligor)), receiver, administrator,
administrative receiver, compulsory manager or other similar officer in respect
of any Obligor or Material Subsidiary or any of its assets (having an aggregate
value of at least $50,000,000); or

 

62

 

(d)                                     enforcement of any Security over any assets (having an aggregate
value of at least $50,000,000) of any Material Subsidiary or Obligor by reason
of a default or event of default (howsoever described) occurring under the
relevant agreement relating to the Indebtedness secured by such Security,

 

or any
analogous procedure or step is taken in any jurisdiction provided that this Clause 23.7 shall not
apply in respect of Combustion Engineering Inc.

 

23.8                     Repudiation

ABB or an
Obligor repudiates a Finance Document or evidences in writing an intention to
repudiate a Finance Document.

 

23.9                     Unlawfulness

Subject to
Clause 8.2 (Borrower Illegality),
it is or becomes unlawful for an Obligor to perform any of its material
obligations under the Finance Documents.

 

23.10               Cessation of business

The Group,
taken as a whole, ceases or threatens to cease to carry out its core business.

 

23.11               Material Audit Qualification

The Auditors’
report in respect of the annual consolidated financial statements of ABB
contains a qualification under US generally accepted audit standards, excluding
any reference to the asbestos related issues of Combustion Engineering Inc,
which could reasonably be expected to give rise to a Material Adverse Effect.

 

23.12               Material Adverse Effect

Any event or
circumstance occurs which has, or is reasonably likely to have, a Material
Adverse Effect.

 

23.13               Acceleration

On and at any
time after the occurrence of an Event of Default which is continuing the
Facility Agent may, and shall if so directed by the Majority Lenders, by notice
to ABB:

 

(a)                                      cancel the Total Commitments whereupon they shall immediately be
cancelled;

 

(b)                                     declare that all or part of the Advances, together with accrued
interest, and all other amounts accrued under the Finance Documents be
immediately due and payable, whereupon they shall become immediately due and
payable; and/or

 

(c)                                      declare that all or part of the Advances be payable on demand,
whereupon they shall immediately become payable on demand by the Facility Agent
on the instructions of the Majority Lenders; and/or

 

(d)                                     exercise any or all of its rights, authorities, remedies and powers
under or pursuant to any of the Finance Documents and in accordance with their
terms.

 

63

 

SECTION 9

CHANGES TO PARTIES

 

24.                           CHANGES
TO THE LENDERS

 

24.1                     Assignments and transfers by
the Lenders

Subject to
this Clause 24 a Lender (the “Existing Lender”) may:

 

(a)                                      assign any of its rights; or

 

(b)                                     transfer by novation any of its rights and obligations,

 

to another
bank (the “New Lender”).

 

24.2                     Conditions of assignment or
transfer

(a)                                      The consent of ABB is required for an assignment or transfer by a
Lender, unless the assignment or transfer is to another Lender or an Affiliate
of a Lender or unless an Event of Default has occurred and is continuing.

 

(b)                                     The consent of ABB to an assignment or transfer must not to be
unreasonably withheld or delayed.  ABB
will be deemed to have given its consent within 10 Business Days of receipt of
a request for such consent unless expressly refused by ABB within that time.

 

(c)                                      Nothing in this Agreement shall prevent any Lender from assigning or
pledging all or any part of its rights or interests under this Agreement to any
central bank or any supranational bank as security for its borrowings from that
central bank or supranational bank, provided that such assignment or pledge
does not involve a release of such Lender from any of its obligations under
this Agreement.

 

(d)                                     An assignment or transfer shall be in respect of a Commitment of at
least $10,000,000 or, if less, the whole of the Commitment of the relevant
assignor or transferor.

 

(e)                                      An assignment will only be effective on:

 

(i)                        receipt by the Facility Agent of written confirmation from the New
Lender (in form and substance satisfactory to the Facility Agent) that the New
Lender will assume the same obligations to the other Finance Parties and the
Obligors as it would have been under if it was an Original Lender and that the
New Lender is a Qualifying Lender; and

 

(ii)                     performance by the Facility Agent of all “know your customer” or
other checks relating to any person that it is required to carry out in
relation to such assignment to a New Lender, the completion of which the
Facility Agent shall promptly notify to the Existing Lender and the New Lender.

 

(f)                                        A transfer will only be effective if the procedure set out in Clause
24.5 (Procedure
for transfer) is complied with and, unless an Event of Default has
occurred and is continuing, if the New Lender is a Qualifying Lender.

 

(g)                                     If:

 

64

 

(i)                        a Lender assigns or transfers any of its rights or obligations under
the Finance Documents or changes its Facility Office; and

 

(ii)                     as a result of circumstances existing at the date the assignment,
transfer or change occurs, an Obligor would be obliged, or at such date it is
reasonably foreseeable that an Obligor would be obliged, to make a payment to
the New Lender or Lender acting through its new Facility Office under Clause 13
(Tax
gross-up and indemnities) or Clause 14 (Increased Costs),

 

then the New
Lender or Lender acting through its new Facility Office is only entitled to
receive payment under those Clauses to the same extent as the Existing Lender
or Lender acting through its previous Facility Office would have been if the
assignment, transfer or change had not occurred.

 

(h)                                     For so long as it is a requirement under Dutch law at the time of an
assignment or transfer by way of novation that the New Lender qualifies as a
PMP, a Lender may only assign or transfer by way of novation all or any of its
rights, benefits and obligations hereunder to a New Lender if and to the extent
that such new Lender qualifies as a PMP.

 

(i)                                         For so long as it is a requirement of Dutch law that each Lender is
a PMP and that the Dutch Borrower must verify the PMP status of a New Lender, a
proposed New Lender which is not a Verifiable PMP shall provide the Dutch
Borrower, through the Facility Agent, with information in respect of itself
reasonably requested by the Dutch Borrower with a view to enabling the Dutch
Borrower to verify its PMP status at least ten Business Days prior to the
proposed Transfer Date or the proposed date of assignment in relation to any
assignment or transfer pursuant to which it would become a New Lender
hereunder.

 

24.3                     Assignment or transfer fee

The New Lender
shall, on the date upon which an assignment or transfer takes effect, pay to
the Facility Agent (for its own account) a fee of $1,500.

 

24.4                     Limitation of responsibility
of Existing Lenders

(a)                                      Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender for:

 

(i)                        the legality, validity, effectiveness, adequacy or enforceability of
the Finance Documents or any other documents;

 

(ii)                     the financial condition of ABB or any Obligor;

 

(iii)                  the performance and observance by ABB or any Obligor of its
obligations under the Finance Documents or any other documents; or

 

(iv)                 the
accuracy of any statements (whether written or oral) made in or in connection
with any Finance Document or any other document,

 

and any
representations or warranties implied by law are excluded.

 

65

 

(b)                                     Each New Lender confirms to the Existing Lender and the other
Finance Parties that it:

 

(i)                        has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and affairs of ABB and
each Obligor and its related entities in connection with its participation in
this Agreement and has not relied exclusively on any information provided to it
by the Existing Lender in connection with any Finance Document; and

 

(ii)                     will continue to make its own independent appraisal of the
creditworthiness of ABB and each Obligor and its related entities whilst any
amount is or may be outstanding under the Finance Documents or any Commitment
is in force.

 

(c)                                      Nothing in any Finance Document obliges an Existing Lender to:

 

(i)                        accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause 24; or

 

(ii)                     support any losses directly or indirectly incurred by the New Lender
by reason of the non-performance by ABB or any Obligor of its obligations under
the Finance Documents or otherwise.

 

24.5                     Procedure for transfer

(a)                                      Subject to the conditions set out in Clause 24.2 (Conditions
of assignment or transfer) a transfer is effected in accordance with
paragraph (b) below when the Facility Agent executes an otherwise duly
completed Transfer Certificate delivered to it by the Existing Lender and the
New Lender.  The Facility Agent shall,
as soon as reasonably practicable after receipt by it of a duly completed
Transfer Certificate appearing on its face to comply with the terms of this
Agreement and delivered in accordance with the terms of this Agreement, execute
that Transfer Certificate.

 

(b)                                     The Facility Agent shall only be obliged to execute a Transfer
Certificate delivered to it by the Existing Lender and the New Lender upon its
completion of all “know your customer” or other checks relating to any person that
it is required to carry out in relation to the transfer to such New Lender.

 

(c)                                      On the Transfer Date:

 

(i)                        to the extent that in the Transfer Certificate the Existing Lender
seeks to transfer by novation its rights and obligations under the Finance Documents
each of ABB, the Obligors and the Existing Lender shall be released from
further obligations towards one another under the Finance Documents and their
respective rights against one another shall be cancelled (being the “Discharged
Rights and Obligations”);

 

(ii)                     each of ABB, the Obligors and the New Lender shall assume
obligations towards one another and/or acquire rights against one another which
differ from the Discharged Rights and Obligations only insofar as ABB, that 

 

66

 

Obligor and the New Lender have assumed and/or
acquired the same in place of ABB, that Obligor and the Existing Lender;

 

(iii)                  the Facility Agent, the Mandated Lead Arrangers, the New Lender and
other Lenders shall acquire the same rights and assume the same obligations
between themselves as they would have acquired and assumed had the New Lender
been an Original Lender with the rights and/or obligations acquired or assumed
by it as a result of the transfer and to that extent the Facility Agent, the
Mandated Lead Arrangers and the Existing Lender shall each be released from
further obligations to each other under this Agreement; and

 

(iv)                 the
New Lender shall become a Party as a “Lender”.

 

24.6                     Disclosure of information

Any Lender may
disclose to any of its Affiliates and any other person:

 

(a)                                      to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and obligations under
this Agreement;

 

(b)                                     with (or through) whom that Lender enters into (or may potentially
enter into) any sub-participation in relation to, or any other transaction
under which payments are to be made by reference to, this Agreement or any
Obligor; or

 

(c)                                      to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,

 

any
information about ABB, any Obligor, the Group and the Finance Documents as that
Lender shall consider appropriate if, in relation to paragraphs (a) and (b)
above, the person to whom the information is to be given has entered into a
confidentiality undertaking unless such person is any central bank or
supranational bank in which case no confidentiality undertaking will be
required.

 

Notwithstanding
any of the provisions of the Finance Documents, the Obligors and the Finance
Parties hereby agree that each Party and each employee, representative or other
agent of each Party may disclose to any and all persons, without limitation of
any kind, the “tax structure” and “tax treatment” (in each case within the
meaning of the U.S. Treasury Regulation Section 1.6011-4) of the Facility
and any materials of any kind (including opinions or other tax analyses) that
are provided to any of the foregoing relating to such tax structure and tax
treatment.

 

25.                           CHANGES
TO THE OBLIGORS

 

25.1                     Assignments and transfer by
Obligors

Neither ABB
nor any Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.

 

25.2                     Additional Borrowers

(a)                                      Subject to compliance with the provisions of paragraph (c) and (d)
of Clause 20.8 (Know Your Customer Checks),
ABB may request by written notice that

 

67

 

any of its wholly-owned Subsidiaries become an
Additional Borrower.  That Subsidiary
shall become an Additional Borrower if:

 

(i)                        the Subsidiary is incorporated in an Agreed Jurisdiction or all the
Lenders approve the addition of that Subsidiary;

 

(ii)                     ABB delivers to the Facility Agent a duly completed and executed
Accession Letter;

 

(iii)                  ABB confirms that no Default is continuing or would occur as a
result of that Subsidiary becoming an Additional Borrower;

 

(iv)                 the
Facility Agent has received all of the documents and other evidence listed in
Part II of Schedule 2 (Additional Obligor Conditions Precedent)
in relation to that Additional Borrower, each in form and substance reasonably
satisfactory to the Facility Agent; and

 

(v)                    (unless it would result in the contravention of any applicable law,
taking into account the jurisdiction of incorporation of the relevant
Subsidiary and subject to sub-paragraph (b) of Clause 25.4 (Additional
Guarantors)), the Subsidiary, prior to or at the same time as it
becomes an Additional Borrower, becomes an Additional Guarantor in accordance
with Clause 25.4 (Additional Guarantors).

 

(b)                                     The Facility Agent shall notify ABB and the Lenders promptly upon
receiving (in form and substance reasonably satisfactory to it) all the
documents and other evidence listed in Part II of Schedule 2 (Additional
Obligor Conditions Precedent).

 

25.3                     Resignation of a Borrower

(a)                                      ABB may request that a Borrower ceases to be a Borrower by
delivering to the Facility Agent a Resignation Letter.

 

(b)                                     The Facility Agent shall accept a Resignation Letter and notify ABB
and the Lenders of its acceptance if:

 

(i)                        the Majority Lenders approve the resignation of that Borrower;

 

(ii)                     no Default would result from the acceptance of the Resignation
Letter (and ABB has confirmed this to be the case); and

 

(iii)                  the relevant Borrower is under no actual or contingent obligations
under any Finance Documents,

 

whereupon that
company shall cease to be a Borrower and shall have no further rights or
obligations under the Finance Documents.

 

25.4                     Additional Guarantors

(a)                                      Subject to compliance with the provisions of paragraphs (c) and (d)
of Clause 20.8 (Know Your Customer Checks),
ABB may request that any of its wholly-

 

68

 

owned Subsidiaries become an Additional
Guarantor.  That Subsidiary shall become
an Additional Guarantor if:

 

(i)                        the Subsidiary is incorporated in an Agreed Jurisdiction, such
accession is pursuant to Clause 22.12 (Obligor
Coverage) or all the Lenders approve the addition of that
Subsidiary;

 

(ii)                     ABB delivers to the Facility Agent a duly completed and executed
Accession Letter;

 

(iii)                  ABB confirms that no Default is continuing or would occur as a
result of that Subsidiary becoming an Additional Guarantor; and

 

(iv)                 the
Facility Agent has received all of the documents and other evidence listed in
Part II of Schedule 2 (Additional Obligor Conditions Precedent)
in relation to that Additional Guarantor, each in form and substance reasonably
satisfactory to the Facility Agent.

 

(b)                                     If legal counsel in the jurisdiction of incorporation of the
relevant Subsidiary so advise, ABB and the Lenders shall enter into
negotiations with a view to agreeing such amendments to Clause 18 (Guarantee
and Indemnity) as may be necessary to enable the Subsidiary to
become an Additional Guarantor without contravening any applicable laws.

 

(c)                                      The Facility Agent shall notify ABB and the Lenders promptly upon
receiving (in form and substance reasonably satisfactory to it) all the
documents and other evidence listed in Part II of Schedule 2 (Additional
Obligor Conditions Precedent).

 

25.5                     Repetition of Representation

Delivery of an
Accession Letter constitutes confirmation by the relevant Subsidiary that the
representations and warranties in Clause 19.5 (Validity and Admissibility in Evidence)
and the representations and warranties deemed to be repeated pursuant to Clause
19.19 (Repetition)
are true and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing.

 

25.6                     Resignation of a Guarantor

(a)                                      ABB may request that a Guarantor ceases to be a Guarantor by
delivering to the Facility Agent a Resignation Letter.

 

(b)                                     Subject (and without prejudice) to paragraph (c) below, the Facility
Agent shall accept a Resignation Letter and notify ABB and the Lenders of its
acceptance if:

 

(i)                        no Default would result from the acceptance of the Resignation
Letter (and ABB has confirmed this is the case); and

 

(ii)                     in the case of an Original Guarantor, all the Lenders have consented
to ABB’s request.

 

69

 

SECTION 10

THE FINANCE PARTIES

 

26.                           ROLE OF THE FACILITY AGENT AND THE MANDATED LEAD ARRANGERS

 

26.1                     Appointment of the Facility
Agent

(a)                                      Each of the Mandated Lead Arrangers and the Lenders appoints the
Facility Agent to act as its agent under and in connection with the Finance
Documents.

 

(b)                                     Each of the Mandated Lead Arrangers and the Lenders authorises the
Facility Agent to exercise the rights, powers, authorities and discretions
specifically given to the Facility Agent under or in connection with the
Finance Documents together with any other incidental rights, powers,
authorities and discretions.

 

(c)                                      The Facility Agent shall, unless ABB agrees otherwise, act out of an
office in London.

 

26.2                     Duties of the Facility Agent

(a)                                      The Facility Agent shall promptly forward to a Party the original or
a copy of any document which is delivered to the Facility Agent for that Party
by any other Party.

 

(b)                                     If the Facility Agent receives notice from a Party referring to this
Agreement, describing a Default and stating that the circumstance described is
a Default, it shall promptly notify the Lenders.

 

(c)                                      The Facility Agent shall promptly notify the Lenders of any Default
arising under Clause 23.1 (Non-payment).

 

(d)                                     The Facility Agent’s duties under the Finance Documents are solely
mechanical and administrative in nature.

 

26.3                     Role of the Mandated Lead
Arrangers

Except as
specifically provided in the Finance Documents, the Mandated Lead Arrangers
have no obligations of any kind to any other Party under or in connection with
any Finance Document.

 

26.4                     No fiduciary duties

(a)                                      Nothing in this Agreement constitutes the Facility Agent or a
Mandated Lead Arranger as a trustee or fiduciary of any other person.

 

(b)                                     Neither the Facility Agent nor any of the Mandated Lead Arrangers
shall be bound to account to any Lender for any sum or the profit element of
any sum received by it for its own account.

 

26.5                     Business with the Group

The Facility
Agent and each Mandated Lead Arranger may accept deposits from, lend money to
and generally engage in any kind of banking or other business with any of the
Group Companies.

 

70

 

26.6                     Rights and discretions of the
Facility Agent

(a)                                      The Facility Agent may rely on:

 

(i)                        any representation, notice or document believed by it to be genuine,
correct and appropriately authorised; and

 

(ii)                     any statement made by a director, authorised signatory or employee
of any person regarding any matters which may reasonably be assumed to be
within his knowledge or within his power to verify.

 

(b)                                     The Facility Agent may assume (unless it has received notice to the
contrary in its capacity as agent for the Lenders) that:

 

(i)                        no Default has occurred (unless it has actual knowledge of a Default
arising under Clause 23.1 (Non-payment)); and

 

(ii)                     any right, power, authority or discretion vested in any Party or the
Majority Lenders has not been exercised.

 

(c)                                      The Facility Agent may engage, pay for and rely on the advice or
services of any lawyers, accountants, surveyors or other experts.

 

(d)                                     The Facility Agent may act in relation to the Finance Documents
through its personnel and agents.

 

26.7                     Majority Lenders’ instructions

(a)                                      Unless a contrary indication appears in a Finance Document, the
Facility Agent shall (a) act in accordance with any instructions given to it by
the Majority Lenders (or, if so instructed by the Majority Lenders, refrain
from acting or exercising any right, power, authority or discretion vested in
it as Facility Agent) and (b) not be liable for any act (or omission) if it
acts (or refrains from taking any action) in accordance with such an
instruction of the Majority Lenders.

 

(b)                                     Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the Finance
Parties.

 

(c)                                      The Facility Agent may refrain from acting in accordance with the
instructions of the Majority Lenders (or, if appropriate, the Lenders) until it
has received such security as it may require for any cost, loss or liability
(together with any associated VAT) which it may incur in complying with the
instructions.

 

(d)                                     In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) the Facility Agent may act (or refrain from taking
action) as it considers to be in the best interest of the Lenders.

 

(e)                                      The Facility Agent is not authorised to act on behalf of a Lender
(without first obtaining that Lender’s consent) in any legal or arbitration
proceedings relating to any Finance Document.

 

71

 

26.8                     Responsibility for
documentation

Neither the
Facility Agent nor any of the Mandated Lead Arrangers:

 

(a)                                      is responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Facility Agent, a
Mandated Lead Arranger, ABB, any Obligor or any other person given in or in
connection with any Finance Document or the Information Memorandum; or

 

(b)                                     is responsible for the legality, validity, effectiveness, adequacy
or enforceability of any Finance Document or any other agreement, arrangement
or document entered into, made or executed in anticipation of or in connection
with any Finance Document.

 

26.9                     Exclusion of liability

(a)                                      Without limiting paragraph (b) below, the Facility Agent will not be
liable for any action taken by it under or in connection with any Finance
Document, unless directly caused by its negligence, wilful default or wilful
misconduct.

 

(b)                                     No Party may take any proceedings against any officer, employee or
agent of the Facility Agent in respect of any claim it might have against the
Facility Agent or in respect of any act or omission of any kind by that
officer, employee or agent in relation to any Finance Document and any officer,
employee or agent of the Facility Agent may rely on this Clause.

 

(c)                                      The Facility Agent will not (absent negligence, wilful default or
wilful misconduct directly giving rise to such liability) be liable for any
delay (or any related consequences) in crediting an account with an amount
required under the Finance Documents to be paid by the Facility Agent if the
Facility Agent has taken all necessary steps as soon as reasonably practicable
to comply with the regulations or operating procedures of any recognised
clearing or settlement system used by the Facility Agent for that purpose.

 

(d)                                     Nothing in this Agreement shall oblige the Facility Agent or the
Mandated Lead Arranger to carry out any “know your customer” or other checks in
relation to any person on behalf of any Lender and each Lender confirms to the
Facility Agent and the Mandated Lead Arrangers that it is solely responsible
for any such checks it is required to carry out and that it may not rely on any
statement in relation to such checks made by the Facility Agent or the Mandated
Lead Arrangers.

 

26.10               Lenders’ indemnity to the
Facility Agent

The Lenders
shall (in proportion to their Commitments or, if the Total Commitments are then
zero, to their Commitments immediately prior to their reduction to zero)
severally indemnify the Facility Agent, within three Business Days of demand,
against any cost, loss or liability incurred by the Facility Agent (otherwise
than by reason of the Facility Agent’s negligence or wilful misconduct) in
acting as Facility Agent under the Finance Documents (unless the Facility Agent
has been reimbursed by ABB or the Obligors pursuant to a Finance Document).

 

72

 

26.11               Resignation of the Facility
Agent

(a)                                      The Facility Agent may resign and appoint one of its Affiliates as
successor by giving notice to the Lenders and ABB provided that such successor
shall act out of an office in London.

 

(b)                                     Alternatively the Facility Agent may resign by giving notice to the Lenders
and ABB, in which case the Majority Lenders may appoint a successor Facility
Agent which will act out of an office in London.

 

(c)                                      If the Majority Lenders have not appointed a successor Facility
Agent in accordance with paragraph (b) above within 30 days after notice of
resignation was given, the resigning Facility Agent may appoint a successor
Facility Agent which will act out of an office in London.

 

(d)                                     A successor Facility Agent may only be appointed with the prior
consent of ABB (such consent not to be unreasonably withheld or delayed).

 

(e)                                      The retiring Facility Agent shall, at its own cost, make available
to the successor Facility Agent such documents and records and provide such
assistance as the successor Facility Agent may reasonably request for the
purposes of performing its functions as Facility Agent under the Finance
Documents.

 

(f)                                        Such Facility Agent’s resignation notice shall only take effect upon
the appointment of a successor as contemplated in paragraphs (b) and (c) above.

 

(g)                                     Upon the appointment of a successor, the retiring Facility Agent
shall be discharged from any further obligation in respect of the Finance
Documents but shall remain entitled to the benefit of this Clause 26.  Its successor and each of the other Parties
shall have the same rights and obligations amongst themselves as they would
have had if such successor had been an original Party.

 

(h)                                     After consultation with ABB, the Majority Lenders may, by notice to
the Facility Agent, require it to resign in accordance with paragraph (b)
above.  In this event, the Facility
Agent shall resign in accordance with paragraph (b) above.

 

26.12               Confidentiality

(a)                                      In acting as agent for the Finance Parties, the Facility Agent shall
be regarded as acting through its agency division which shall be treated as a
separate entity from any other of its divisions or departments.

 

(b)                                     If information is received by another division or department of the
Facility Agent, it may be treated as confidential to that division or
department and the Facility Agent shall not be deemed to have notice of it.

 

(c)                                      Notwithstanding any other provision of any Finance Document to the
contrary, neither the Facility Agent nor any Mandated Lead Arranger is obliged
to disclose to any other person (i) any confidential information or (ii) any
other 

 

73

 

information if the disclosure would or might in its
reasonable opinion constitute a breach of any law or a breach of a fiduciary
duty.

 

26.13               Relationship with the Lenders

(a)                                      The Facility Agent may treat each Lender as a Lender, entitled to
payments under this Agreement and acting through its Facility Office unless it
has received not less than 5 Business Days’ prior notice from that Lender to
the contrary in accordance with the terms of this Agreement.

 

(b)                                     Each Lender shall supply the Facility Agent with any information
required by the Facility Agent in order to calculate the Mandatory Costs.

 

26.14               Credit appraisal by the
Lenders

Without
affecting the responsibility of each of ABB and the Obligors for information
supplied by it or on its behalf in connection with any Finance Document, each
Lender confirms to the Facility Agent and each Mandated Lead Arranger that it
has been, and will continue to be, solely responsible for making its own
independent appraisal and investigation of all risks arising under or in
connection with any Finance Document including but not limited to:

 

(a)                                      the financial condition, status and nature of each Group Company;

 

(b)                                     the legality, validity, effectiveness, adequacy or enforceability of
any Finance Document and any other agreement, arrangement or document entered
into, made or executed in anticipation of, under or in connection with any
Finance Document;

 

(c)                                      whether that Lender has recourse, and the nature and extent of that
recourse, against any Party or any of its respective assets under or in
connection with any Finance Document, the transactions contemplated by the
Finance Documents or any other agreement, arrangement or document entered into,
made or executed in anticipation of, under or in connection with any Finance
Document; and

 

(d)                                     the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Facility Agent, any other
Party or by any other person under or in connection with any Finance Document,
a Mandated Lead Arranger the transactions contemplated by the Finance Documents
or any other agreement, arrangement or document entered into, made or executed
in anticipation of, under or in connection with any Finance Document.

 

26.15               Reference Banks

If a Reference
Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an
Affiliate) ceases to be a Lender, the Facility Agent shall (in consultation
with ABB) appoint another Lender or an Affiliate of a Lender to replace that
Reference Bank.

 

74

 

27.                           CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 

No provision
of this Agreement will:

 

(a)                                      interfere with the right of any Finance Party to arrange its affairs
(tax or otherwise) in whatever manner it thinks fit;

 

(b)                                     oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and manner of any
claim; or

 

(c)                                      oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.

 

28.                           SHARING
AMONG THE LENDERS

 

28.1                     Payments to Lenders

If a Lender (a
“Recovering
Lender”) receives or recovers any amount from ABB or an Obligor
other than in accordance with Clause 29 (Payment mechanics) and applies that amount
to a payment due under the Finance Documents then:

 

(a)                                      the Recovering Lender shall, within 3 Business Days, notify details
of the receipt or recovery, to the Facility Agent;

 

(b)                                     the Facility Agent shall determine whether the receipt or recovery
is in excess of the amount the Recovering Lender would have been paid had the
receipt or recovery been received or made by the Facility Agent and distributed
in accordance with Clause 29 (Payment mechanics), without taking account
of any Tax which would be imposed on the Facility Agent in relation to the
receipt, recovery or distribution; and

 

(c)                                      the Recovering Lender shall, within three Business Days of demand by
the Facility Agent, pay to the Facility Agent an amount (the “Sharing
Payment”) equal to such receipt or recovery less any amount which
the Facility Agent determines may be retained by the Recovering Lender as its
share of any payment to be made, in accordance with Clause 29.5 (Partial
payments).

 

28.2                     Redistribution of payments

The Facility
Agent shall treat the Sharing Payment as if it had been paid by ABB or the
relevant Obligor (as the case may be) and distribute it between the Finance
Parties (other than the Recovering Lender) in accordance with Clause 29.5 (Partial
payments).

 

28.3                     Recovering Lender’s rights

(a)                                      On a distribution by the Facility Agent under Clause 28.2 (Redistribution
of payments), the Recovering Lender will be subrogated to the rights
of the Finance Parties which have shared in the redistribution.

 

(b)                                     If and to the extent that the Recovering Lender is not able to rely
on its rights under paragraph (a) above, ABB or the relevant Obligor (as the
case may be) shall be liable to the Recovering Lender for a debt equal to the
Sharing Payment which is immediately due and payable.

 

75

 

28.4                     Reversal of redistribution

If any part of
the Sharing Payment received or recovered by a Recovering Lender becomes
repayable and is repaid by that Recovering Lender, then:

 

(a)                                      each Lender which has received a share of the relevant Sharing
Payment pursuant to Clause 28.2 (Redistribution of payments) shall, upon
request of the Facility Agent, pay to the Facility Agent for the account of
that Recovering Lender an amount equal to its share of the Sharing Payment
(together with an amount as is necessary to reimburse that Recovering Lender
for its proportion of any interest on the Sharing Payment which that Recovering
Lender is required to pay); and

 

(b)                                     that Recovering Lender’s rights of subrogation in respect of any
reimbursement shall be cancelled and ABB or the relevant Obligor (as the case
may be) will be liable to the reimbursing Lender for the amount so reimbursed.

 

28.5                     Exceptions

(a)                                      This Clause 28 shall not apply to the extent that the Recovering
Lender would not, after making any payment pursuant to this Clause, have a
valid and enforceable claim against ABB or the relevant Obligor (as the case
may be).

 

(b)                                     A Recovering Lender is not obliged to share with any other Lender
any amount which the Recovering Lender has received or recovered as a result of
taking legal or arbitration proceedings, if:

 

(i)                        it notified the other Lenders of the legal or arbitration proceedings;
and

 

(ii)                     the other Lender had an opportunity to participate in those legal or
arbitration proceedings but did not do so as soon as reasonably practicable
having received notice or did not take separate legal or arbitration
proceedings.

 

76

 

SECTION 11

ADMINISTRATION

 

29.                           PAYMENT
MECHANICS

 

29.1                     Payments to the Facility Agent

(a)                                      On each date on which ABB, an Obligor or a Lender is required to
make a payment under a Finance Document, ABB, such Obligor or, as the case may
be, such Lender shall make the same available to the Facility Agent (unless a
contrary indication appears in a Finance Document) for value on the due date at
the time and in such funds specified by the Facility Agent as being customary
at the time for settlement of transactions in the relevant currency in the
place of payment.

 

(b)                                     Payment shall be made to such account in the principal financial
centre of the country of that currency (or, in relation to Euro, in a principal
financial centre in a Participating Member State or London) with such bank as
the Facility Agent specifies.

 

29.2                     Distributions by the Facility
Agent

Each payment
received by the Facility Agent under the Finance Documents for another Party
shall, subject to Clause 29.3 (Distributions to the Obligors) and Clause
29.4 (Clawback)
be made available by the Facility Agent as soon as practicable after receipt to
the Party entitled to receive payment in accordance with this Agreement (in the
case of a Lender, for the account of its Facility Office), to such account as
that Party may notify to the Facility Agent by not less than 5 Business Days’
notice with a bank in the principal financial centre of the country of that
currency (or, in relation to Euro, in the principal financial centre of a
Participating Member State, Stockholm or London).

 

29.3                     Distributions to the Obligors

The Facility
Agent may (with the consent of ABB or the relevant Obligor (as the case may be)
or in accordance with Clause 30 (Set-off)) apply any amount received by it
for ABB or that Obligor in or towards payment (on the date and in the currency
and funds of receipt) of any amount due from ABB or that Obligor (as the case
may be) under the Finance Documents or in or towards purchase of any amount of any
currency to be so applied.

 

29.4                     Clawback

(a)                                      Where a sum is to be paid to the Facility Agent under the Finance
Documents for another Party, the Facility Agent is not obliged to pay that sum
to that other Party (or to enter into or perform any related exchange contract)
until it has been able to establish to its absolute satisfaction that it has
actually received that sum (and the Facility Agent shall make such due enquiry
as a diligent agent would make in so establishing).

 

(b)                                     If the Facility Agent pays an amount to another Party and it proves
to be the case that the Facility Agent had not actually received that amount,
then the Party to whom that amount (or the proceeds of any related exchange
contract) was paid by the Facility Agent shall on demand refund the same to the
Facility

 

77

 

Agent together with interest on that amount from the
date of payment to the date of receipt by the Facility Agent, calculated by the
Facility Agent to reflect its cost of funds.

 

(c)                                      In the event that a Lender fails to make its participation in an
Advance available to the Facility Agent (as defined in Clause 29.1 (Payments to
the Facility Agent)) in accordance with the terms of this Agreement,
such Lender hereby indemnifies the Facility Agent on demand against all costs,
losses and expenses that the Facility Agent may incur as a result of such
failure (including, without limitation, where the Facility Agent, at its sole
option, makes arrangements to make available to the relevant Borrower an amount
equal to said participation).

 

(d)                                     For the purposes of paragraph (c) of this Clause 29.4, if a Lender
makes its participation available to the Facility Agent after 3.00 p.m. (London
time) on the due date, such participation shall be deemed to have been made
available on the Business Day immediately succeeding the said due date.

 

29.5                     Partial payments

(a)                                      If the Facility Agent receives a payment that is insufficient to
discharge all the amounts then due and payable by ABB or the Obligors under the
Finance Documents, the Facility Agent shall apply that payment towards the
obligations of the Obligors under the Finance Documents in the following order:

 

(i)                        first, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Facility Agent under the Finance Documents;

 

(ii)                     secondly, in or towards payment pro rata of any accrued interest or
commission due but unpaid under this Agreement;

 

(iii)                  thirdly, in or towards payment pro rata of any principal due but unpaid
under this Agreement; and

 

(iv)                 fourthly, in or towards payment pro rata of any other sum due but unpaid
under the Finance Documents.

 

(b)                                     The Facility Agent shall, if so directed by the Majority Lenders,
vary the order set out in paragraphs (a)(ii) to (iv) above.

 

(c)                                      Paragraphs (a) and (b) above will override any appropriation made by
ABB or any Obligor.

 

29.6                     No set-off by Obligors

All payments
to be made by ABB or the Obligors under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for)
set-off or counterclaim.

 

29.7                     Business Days

(a)                                      Any payment which is due to be made on a day that is not a Business
Day shall be made on the next Business Day in the same calendar month (if there
is one) or the preceding Business Day (if there is not).

 

78

 

(b)                                     During any extension of the due date for payment of any principal or
an Unpaid Sum under this Agreement interest is payable on the principal at the
rate payable on the original due date.

 

29.8                     Currency of account

(a)                                      Subject to paragraphs (b) to (e) below, the Base Currency is the
currency of account and payment for any sum due from ABB or the Obligors under
any Finance Document.

 

(b)                                     A repayment of an Advance or Unpaid Sum or a part of an Advance or
Unpaid Sum shall be made in the currency in which that Advance or Unpaid Sum is
denominated on its due date.

 

(c)                                      Each payment of interest shall be made in the currency in which the
sum in respect of which the interest is payable was denominated when that
interest accrued.

 

(d)                                     Each payment in respect of costs, expenses or Taxes shall be made in
the currency in which the costs, expenses or Taxes are incurred.

 

(e)                                      Any amount expressed to be payable in a currency other than the Base
Currency shall be paid in that other currency.

 

29.9                     Change of currency

(a)                                      Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of any
country as the lawful currency of that country, then:

 

(i)                        any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that country shall be
translated into, or paid in, the currency or currency unit of that country
designated by the Facility Agent (after consultation with ABB); and

 

(ii)                     any translation from one currency or currency unit to another shall
be at the official rate of exchange recognised by the central bank for the
conversion of that currency or currency unit into the other, rounded up or down
by the Facility Agent (acting reasonably).

 

(b)                                     If a change in any currency of a country occurs, this Agreement
will, to the extent the Facility Agent (acting reasonably and after
consultation with ABB) specifies to be necessary, be amended to comply with any
generally accepted conventions and market practice in the Relevant Interbank
Market and otherwise to reflect the change in currency.

 

30.                           SET-OFF

 

Without
prejudice to the rights at law of each Finance Party, while an Event of Default
is continuing, a Finance Party may set off any matured obligation due from ABB
or an Obligor under the Finance Documents (to the extent beneficially owned by
that Finance Party) against any matured obligation owed by that Finance Party
to ABB or that Obligor (as the case may be), regardless of the place of
payment, booking branch or currency of

 

79

 

either
obligation.  If the obligations are in
different currencies, the Finance Party may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the
set-off.

 

31.                           NOTICES

 

31.1                     Communications in writing

(a)                                      Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be made by
fax or letter.

 

(b)                                     With the consent of the relevant Lender, the Facility Agent may
serve notices and other information on a Lender by way of electronic mail.

 

31.2                     Addresses

(a)                                      The address and fax number (and the department or officer, if any,
for whose attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in connection with
the Finance Documents is:

 

(i)                        in the case of the Original Obligors, that identified in Part II of
Schedule 1 (The Original Obligors), with a copy to ABB and ABB Capital
B.V., Zurich Branch;

 

(ii)                     in the case of ABB, that identified in Clause 31.2(b);

 

(iii)                  in the case of an Additional Obligor, that identified in the
Accession Letter relating to that Additional Obligor, with a copy to ABB and
ABB Capital B.V., Zurich Branch;

 

(iv)                 in
the case of ABB Capital B.V., Zurich Branch, that identified in Clause 31.2(b);

 

(v)                    in the case of each Lender, that notified in writing to the Facility
Agent on or prior to the date on which it becomes a Party; and

 

(vi)                 in
the case of the Facility Agent, that identified in Clause 31.2(b),

 

or any
substitute address, fax number or department or officer as the Party may notify
to the Facility Agent (or the Facility Agent may notify to the other Parties,
if a change is made by the Facility Agent) by not less than 5 Business Days’
notice.

 

(b)

 

(i)                        the Facility Agent:

 

Credit Suisse
First Boston

1 Cabot Square

Canary Wharf

London  E14 4LB

 

Attn:                      Loans Agency

Tel:                            +44 20 7888 8361

 

80

 

Fax:                           + 44 20 7458 8204 / +44 20 7888 8398

 

(ii)                     ABB Capital B.V., Zurich Branch

 

Thurgauerstrasse
54

CH-8050 Zurich

Switzerland

 

Attn:                            Group Treasurer

Fax:                           +41 1 318 5252

 

Copy:                Legal Department

Fax:                           + 41 43 317 7992

 

(iii)                  ABB Ltd and ABB Asea Brown Boveri Ltd

 

Affolternstrasse
44

CH-8050 Zurich

Switzerland

 

Attn:                    Deputy CFO

Fax:                           + 41 43 317 3929

 

Copy:                Legal Department

Fax:                           + 41 43 317 7992

 

31.3                     Delivery

 

(a)                                      Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents will only be
effective:

 

(i)                        if by way of fax, when received in legible form; or

 

(ii)                     if by way of letter, when it has been left at the relevant address
or 5 (in the case of domestic mail) or 10 (in the case of air mail) Business
Days after being deposited in the post postage prepaid in an envelope addressed
to it at that address; or

 

(iii)                  if by way of electronic mail, when received.

 

and, if a
particular department or officer is specified as part of its address details
provided under Clause 31.2 (Addresses), if addressed to that
department or officer, provided that if receipt is on a day that
is not a working day in the country of receipt or is at a time outside normal
business hours, such communication shall be effective on the next succeeding
working day.

 

(b)                                     Any communication or document to be made or delivered to the
Facility Agent will be effective only when actually received by the Facility
Agent and then only if it is expressly marked for the attention of the
department or officer identified in Clause 31.2 (Addresses) (or any
substitute department or officer as the Facility Agent shall specify for this
purpose).

 

81

 

(c)                                      All notices from or to ABB or an Obligor shall be sent through the
Facility Agent.

 

31.4                     Notification of address and
fax number

Promptly upon
receipt of notification of an address, fax number or change of address or fax
number pursuant to Clause 31.2 (Addresses) or changing its own address or
fax number, the Facility Agent shall notify the other Parties.

 

31.5                     English language

(a)                                      Any notice given under or in connection with any Finance Document
must be in English.

 

(b)                                     All other documents provided under or in connection with any Finance
Document must be:

 

(i)                        in English; or

 

(ii)                     if not in English, and if so required by the Facility Agent,
accompanied by a certified English translation.

 

32.                           CALCULATIONS
AND CERTIFICATES

 

32.1                     Accounts

In any
litigation or arbitration proceedings arising out of or in connection with a
Finance Document, the entries made in the accounts maintained by a Finance
Party are prima
facie evidence of the matters to which they relate.

 

32.2                     Certificates and
Determinations

Except where
otherwise indicated, any certification or determination by a Finance Party of a
rate or amount under any Finance Document is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.

 

32.3                     Day count convention

Any interest,
commission or fee accruing under a Finance Document will accrue from day to day
and is calculated on the basis of the actual number of days elapsed and a year
of 360 days or, in any case where the practice in the Relevant Interbank Market
differs, in accordance with that market practice.

 

33.                           PARTIAL
INVALIDITY

If, at any
time, any provision of the Finance Documents is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.

 

34.                           REMEDIES
AND WAIVERS

No failure to
exercise, nor any delay in exercising, on the part of any Finance Party, any
right or remedy under the Finance Documents shall operate as a waiver, nor
shall any single or partial exercise of any right or remedy prevent any further
or other exercise or

 

82

 

the exercise
of any other right or remedy.  The
rights and remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law.

 

35.                           AMENDMENTS
AND WAIVERS

 

35.1                     Required consents

(a)                                      Subject to Clause 35.2 (Exceptions) any term of the Finance
Documents may be amended or waived only with the consent of the Majority
Lenders and ABB and any such amendment or waiver will be binding on all
Parties.

 

(b)                                     The Facility Agent may effect (and is hereby so authorised by each
Finance Party), on behalf of any Finance Party, any amendment or waiver
permitted by this Clause.

 

35.2                     Exceptions

(a)                                      An amendment or waiver that has the effect of changing or which
relates to:

 

(i)                        the definition of “Majority Lenders” in Clause 1.1 (Definitions);

 

(ii)                     an extension to the date of payment of any amount under the Finance
Documents;

 

(iii)                  a reduction in the Margin or the amount of any payment of principal,
interest, fees or commission payable;

 

(iv)                 an
increase in or an extension of any Commitment;

 

(v)                    any provision which expressly requires the consent of all the
Lenders;

 

(vi)                 Clause
2.2 (Lenders’
rights and obligations), Clause 4.1 (Initial Conditions Precedent), Clause 24 (Changes to
the Lenders), Clause 25  (Changes to
the Obligors), Clause 28  (Sharing
among the Lenders) or this Clause 35;

 

(vii)              any
change to the Obligors other than in accordance with Clause 25  (Changes to the Obligors); or

 

(viii)             the
nature or scope of the property secured under the Agreed Form Pledges (if
executed) or the manner in which the proceeds of enforcement of such security
are distributed,

 

shall not be
made without the prior consent of all the Lenders.

 

(b)                                     An amendment or waiver which relates to the rights or obligations of
the Facility Agent or any Mandated Lead Arranger may not be effected without
the consent of the Facility Agent or such Mandated Lead Arranger.

 

36.                           COUNTERPARTS

 

Each Finance
Document may be executed in any number of counterparts, and this has the same
effect as if the signatures on the counterparts were on a single copy of the
Finance Document.

 

83

 

SECTION 12

GOVERNING LAW AND
ENFORCEMENT

 

37.                           GOVERNING LAW

 

This Agreement
is governed by English law.

 

38.                           ENFORCEMENT

 

(a)                                      The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement (including a
dispute regarding the existence, validity or termination of this Agreement) (a
“Dispute”).

 

(b)                                     The Parties agree that the courts of England are the most
appropriate and convenient courts to settle Disputes and accordingly no Party
will argue to the contrary.

 

(c)                                      This Clause 38 is for the benefit of the Finance Parties only.  As a result, no Finance Party shall be
prevented from taking proceedings relating to a Dispute (“Proceedings”) in any other
courts with jurisdiction.

 

(d)                                     If ABB Capital B.V. is represented by
an attorney or attorneys in connection with the signing and/or execution and/or
delivery of this Agreement or any agreement or document referred to herein or
made pursuant hereto and the relevant power or powers of attorney is or are
expressed to be governed by the laws of a particular jurisdiction, it is hereby
expressly acknowledged and accepted by the other parties hereto that such laws
shall govern the existence and extent of such attorney’s or attorneys’
authority and the effects of the exercise thereof.

 

(e)                                      Service of Process

 

ABB and each
Obligor incorporated in a jurisdiction other than England and Wales agree that
the documents which start any Proceedings in England and any other documents
required to be served in relation to those Proceedings may be served on ABB
Limited, at 20 Bedfordbury, London, WC2N 4BL or, if different, its registered
office, with a copy to ABB.  If the
appointment of the person mentioned in this Clause 38(e) ceases to be
effective, ABB and each Obligor shall immediately appoint another person in
England to accept service of process on its behalf in England.  If ABB or any Obligor fails to do so (and
such failure continues for a period of not less than fourteen days), the
Facility Agent shall be entitled to appoint such a person by notice to ABB or
the relevant Obligor (as the case may be). 
Nothing contained herein shall restrict the right to serve process in
any other manner allowed by law.

 

This Agreement has been entered into on the date
stated at the beginning of this Agreement.

 

84

 

SCHEDULE 1

THE ORIGINAL PARTIES

 

Part I

The Original Lenders

 

	
  Name of
  Lender

  	
   

  	
  Commitment
  ($)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Barclays Bank PLC

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bayerische Hypo-und Vereinsbank AG

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BNP Paribas SA

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citibank, N.A.

  	
   

  	
  70,833,334

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commerzbank Aktiengesellschaft

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Credit Suisse First Boston

  	
   

  	
  70,833,334

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank Luxembourg S.A.

  	
   

  	
  70,833,334

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dresdner Bank Luxembourg S.A.

  	
   

  	
  70,833,334

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  HSBC Bank plc

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nordea Bank Sweden AB (publ)

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Skandinaviska Enskilda Banken AB (publ)

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Svenska Handelsbanken AB (publ)

  	
   

  	
  70,833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Banco Bilbao Vizcaya Argentaria S.A.

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CDC IXIS

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Den norske Bank ASA

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ING Belgium NV

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  KBC Bank NV

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Saudi American Bank

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  1,000,000,000

  	
   

  

 

85

 

Part II

The Original Obligors

 

	
  Name of
  Borrower

  	
   

  	
  Address

  	
   

  	
  Jurisdiction
  of

  incorporation

  
	
  ABB Capital
  B.V.

  	
   

  	
  Burgemeester
  Haspelslaan 65, 5/F

  PO Box 74690

  Amstelveen

  NL-1181 NB

  Netherlands

  

  Attention:Managing Director
 Fax:+ 31 20 445 9844

  

  Copy: Legal Department

  Fax: + 41 43 317 7992

  	
   

  	
  Netherlands

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABB Asea
  Brown Boveri Ltd

  	
   

  	
  Affolternstrasse
  44

  CH-8050 Zurich

  Switzerland

  

  Attention:Deputy CFO

  

  Fax:+41 43 317 3929

  

  Copy: Legal Department

  Fax: +41 43 317 7992

  	
   

  	
  Switzerland

  

 

	
  Name of
  Guarantor

  	
   

  	
  Address

  	
   

  	
  Jurisdiction
  of

  Incorporation

  
	
  ABB Capital
  B.V.

  	
   

  	
  Burgemeester
  Haspelslaan 65, 5/F

  PO Box 74690

  Amstelveen

  NL-1181 NB

  Netherlands

  

  Attention:Managing Director

  Fax:+ 31 20 445 9844

  

  Copy: Legal Department

  Fax: + 41 43 317 7992

  	
   

  	
  Netherlands

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABB Asea
  Brown Boveri Ltd

  	
   

  	
  Affolternstrasse
  44

  CH-8050 Zurich

  Switzerland

  	
   

  	
  Switzerland

  

 

86

 

	
   

  	
   

  	
  Attention:Deputy
  CFO

  

  Fax:+41 43 317 3929

  

  Copy: Legal Department

  Fax: + 41 43 317 7992

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABB Ltd

  	
   

  	
  Affolternstrasse
  44

  CH-8050 Zurich

  Switzerland

  

  Attention: Deputy CFO

  Fax:+41 43 317 3929

  

  Copy: Legal Department

  Fax: +41 43 317 7992

  	
   

  	
  Switzerland

  

 

87

 

SCHEDULE 2

CONDITIONS PRECEDENT

 

Part I

Conditions Precedent to initial Utilisation

 

1.                                 Corporate Documents

 

(a)                                      A copy of the constitutional documents of each Obligor.

 

(b)                                     A copy of a resolution of the board of directors of each Obligor (if
applicable) or, in the case of the Dutch Obligors, a copy of a resolution of
the board of managing directors (directie)
or, in the case of ABB, a copy of an excerpt of the minutes of the board of
directors of ABB:

 

(i)                        approving the terms of, and the transactions contemplated by, the
Finance Documents to which it is a party and resolving that it execute the
Finance Documents to which it is a party;

 

(ii)                     authorising a specified person or persons to execute the Finance
Documents to which it is a party on its behalf; and

 

(iii)                  authorising a specified person or persons, on its behalf, to sign
and/or despatch all documents and notices (including, if relevant, any Utilisation
Request) to be signed and/or despatched by it under or in connection with the
Finance Documents to which it is a party.

 

(c)                                      A copy of the Shareholders resolutions of the Dutch Obligor in form
and substance reasonably satisfactory to the Facility Agent.

 

(d)                                     A copy of a shareholders resolution of ABB Asea Brown Boveri Ltd.

 

(e)                                      A specimen of the signature of each person authorised by the
resolution referred to in paragraph (b) above.

 

(f)                                        A certificate of each Obligor (signed without personal liability by
an authorised signatory of each Obligor) confirming that borrowing or
guaranteeing, as appropriate, the Total Commitments would not cause any
borrowing, guaranteeing or similar limit binding on that relevant Obligor to be
exceeded.

 

(g)                                     A certificate of an authorised signatory of the relevant Obligor,
certifying without personal liability that each copy document relating to it
specified in paragraph 1 (a) - (f) of this Schedule 2 is correct, complete
and in full force and effect as at a date no earlier than the date of this
Agreement.

 

(h)                                     The group structure chart signed for the purposes of identification
by an authorised signatory (without personal liability) of the Group.

 

2.                                 Agreed Form Security Documents

 

If the sale of
the Oil, Gas & Petrochemical Division (Upstream) has not completed:

 

88

 

(a)                                      a copy of each of the Agreed Form Pledges and the Agreed Form Trust
Deed duly executed by each relevant Obligor;

 

(b)                                     a copy of the constitutional documents of each Group Company
entering into an Agreed Form Pledge;

 

(c)                                      a copy of a resolution of the board of directors of each Group
Company entering into an Agreed Form Pledge and/or the Agreed Form Trust Deed:

 

(i)                        approving the terms of, and the transactions contemplated by, the
Finance Documents to which it is a party and resolving that it execute the
Finance Documents to which it is a party;

 

(ii)                     authorising a specified person or persons to execute the Finance
Documents to which it is a party on its behalf; and

 

(iii)                  authorising a specified person or persons, on its behalf, to sign
and/or despatch all documents and notices to be signed and/or despatched by it
under or in connection with the Finance Documents to which it is a party;

 

(d)                                     a copy of a shareholder’s resolution of ABB Holding AG;

 

(e)                                      a specimen of the signature of each person authorised by the
resolution referred to in paragraph (b) above;

 

(f)                                        a certificate of an authorised signatory of the relevant Group
Company certifying without personal liability that each copy document relating
to it specified in paragraph 2(b)-(e) of this Schedule 2 is correct,
complete and in full force and effect as at a date no earlier than the date of
this Agreement;

 

(g)                                     a legal opinion of Clifford Chance LLP, New York, US counsel to the
Mandated Lead Arrangers, substantially in the form distributed to the Original
Lenders prior to signing this Agreement;

 

(h)                                     a legal opinion of Wikborg, Rein & Co, Norwegian counsel to the
Mandated Lead Arrangers, substantially in the form distributed to the Original
Lenders prior to signing this Agreement;

 

(i)                                         a legal opinion of Baker & McKenzie, Swiss counsel to the
Mandated Lead Arrangers, substantially in the form distributed to the Original
Lenders prior to signing this Agreement;

 

(j)                                         with respect to a pledgor in respect of a security interest granted
in the shares of a Group Company incorporated in the United States of America,
all share certificates, stock transfer forms duly executed in blank in relation
to the shares, a copy of the register of members and constitutional documents
of each member of the Group whose shares are expressed to be the subject to
Security;

 

(k)                                      With respect to the pledgor in respect of a security interest
granted in the shares of a Group Company incorporated in Norway:

 

89

 

(i)                          a notice addressed to that Group Company that its shares have been
made subject to a security interest in favour of the Secured Parties in the
form prescribed in the Security Document relating to the pledge of such shares
and executed by authorised signatories of the pledgor; and

 

(ii)                       with respect to any recipient of a notice pursuant to sub-paragraph
(i) above, acknowledgement by its authorised signatories of receipt of the notice
referred to in (i) above together with evidence that the security interest has
been noted in the register of shareholders of such Group Company; and

 

(iii)                    a power of attorney in favour of the Trustee in the form prescribed
in the Security Document relating to the pledge of such shares executed by the
authorised signatories of the pledgor.

 

Provided that if two authorised
signatories of ABB certify in writing to the Lenders that ABB has received
gross cash proceeds from Project Phoenix, a proposed bond issue (which will be
unsecured and have a maturity on or beyond 1 January 2008 and which may
include a tap issue) and/or asset sales in an amount equal to at least
$3,000,000,000 and the gross cash proceeds of Project Phoenix and the asset
sales equals at least $2,250,000,000 (of which the amount of the proceeds from
asset sales cannot exceed $250,000,000), then nothing shall be required under
this paragraph 2.

 

3.                                 Legal Opinions

 

(a)                                      A legal opinion of Clifford Chance LLP legal advisers to the
Mandated Lead Arrangers and the Facility Agent in England, substantially in the
form distributed to the Original Lenders prior to signing this Agreement.

 

(b)                                     If an Obligor is incorporated in a jurisdiction other than England
and Wales, a legal opinion of the legal advisers to the Mandated Lead Arranger
and the Facility Agent in the Relevant Jurisdiction, substantially in the form
distributed to the Original Lenders prior to signing this Agreement.

 

4.                                 Other documents and evidence

 

(a)                                      Repayment and cancellation in full of the Existing Credit Facility.

 

(b)                                     The Fee Letters executed on behalf of ABB.

 

(c)                                      Evidence that any process agent referred to in Clause 38(e) (Service of process), if not an Obligor,
has accepted its appointment.

 

(d)                                     The Original Financial Statements of each Obligor.

 

(e)                                      The Business Plan in form and substance reasonably satisfactory to
the Lenders.

 

(f)                                        The Original Liquidity Plan in form and substance reasonably
satisfactory to the Lenders.

 

90

 

(g)                                     Evidence that the fees, costs and expenses then due from ABB
pursuant to Clause 12 (Fees),
Clause 17 (Costs and Expenses)
and Clause 13.6 (Stamp Taxes)
have been paid or will be paid by the first Utilisation Date.

 

(h)                                     Completion of Project Phoenix raising a gross amount of at least SFR
2,300,000,000 (approximately $1,750,000,000).

 

(i)                                         The receipt by ABB of gross proceeds (excluding the amount of any
deferred payment) from the sale of the Oil, Gas & Petrochemical Division
and/or the gross proceeds from Project Phoenix and/or the gross proceeds of a
proposed bond issue (which will be unsecured and have a maturity on or beyond 1
January 2008, and which may include a tap issue) and/or the gross proceeds
of any other disposals (excluding the Oil, Gas & Petrochemical Division)
made after the date of this Agreement (up to a maximum aggregate amount of
$250,000,000) providing ABB with, in aggregate, gross cash proceeds in an
amount of at least SFR 3,250,000,000.

 

In this
Schedule, “Project Phoenix” means the share capital increase of ABB announced
on 28 October 2003.

 

91

 

Part II

Additional Obligor Conditions
Precedent

 

1.                                 An Accession Letter, duly executed by the Additional Obligor and
ABB.

 

2.                                 A copy of the constitutional documents of the Additional Obligor.

 

3.                                 A copy of a resolution of the board of directors, or other suitable
authority, of the Additional Obligor:

 

(a)                                      approving the terms of, and the transactions contemplated by, the
Accession Letter and the Finance Documents and resolving that it execute the
Accession Letter;

 

(b)                                     authorising a specified person or persons to execute the Accession
Letter on its behalf; and

 

(c)                                      authorising a specified person or persons, on its behalf, to sign
and/or despatch all other documents and notices (including any Utilisation
Request) to be signed and/or despatched by it under or in connection with the
Finance Documents.

 

4.                                 If required under applicable law, a copy of a resolution of the
Additional Obligor as Guarantor stating that the shareholders resolve and
approve the entering into, and the terms and conditions of, this Agreement, in
particular, in relation to any Additional Obligor incorporated in Switzerland
that is acceding as a Guarantor, the guarantee to be provided by such
Additional Obligor as Guarantor for the purpose of securing the prompt and
complete satisfaction of all present and future conditional and unconditional
claims of the Finance Parties against any member of the Group other than such
Additional Obligor as Guarantor and its wholly owned subsidiaries arising from
time to time out of the Finance Documents.

 

5.                                 A specimen of the signature of each person authorised by the
resolution referred to in paragraph 3 above.

 

6.                                 A certificate of the Additional Obligor (signed by two duly
authorised signatories) confirming that borrowing or guaranteeing (as the case
may be) the Total Commitments would not cause any borrowing, guaranteeing or
similar limit binding on it to be exceeded.

 

7.                                 A certificate of an authorised signatory of the Additional Obligor
certifying that each copy document listed in this Schedule 2 is correct,
complete and in full force and effect as at a date no earlier than the date of
the Accession Letter.

 

8.                                 A copy of any other Authorisation or other document, opinion or
assurance which the Facility Agent reasonably considers to be necessary in
connection with the entry into and performance of the transactions contemplated
by the Accession Letter or for the validity and enforceability of any Finance
Document.

 

9.                                 If available, the latest audited financial statements of the
Additional Obligor.

 

92

 

10.                           A legal opinion of Clifford Chance Limited Liability Partnership,
legal advisers to the Mandated Lead Arrangers and the Facility Agent in
England.

 

11.                           If the Additional Obligor is incorporated in a jurisdiction other
than England and Wales, a legal opinion of the legal advisers to the Mandated
Lead Arrangers and the Facility Agent in the jurisdiction in which the
Additional Obligor is incorporated.

 

12.                           If the proposed Additional Obligor is incorporated in a jurisdiction
other than England and Wales, evidence that the process agent specified in
Clause 38(e) (Service of process), if not an Obligor, has accepted its
appointment in relation to the proposed Additional Obligor.

 

93

 

SCHEDULE 3

UTILISATION REQUEST

 

From:                                          [Name
of Borrower]

 

To:                                                      Credit Suisse First Boston as Facility Agent

 

Dated:                                     [•]

 

Dear Sirs

 

ABB Ltd – $1,000,000,000
Credit Agreement dated [•]

(the “Credit Agreement”)

 

1.                                 Words and expressions defined in the Credit Agreement have the same
meaning when used herein.

 

2.                                 We wish to borrow an Advance on the following terms:

 

	
  Proposed
  Utilisation Date:

  	
  [ • ] (or, if that is not a Business Day, the next Business Day)

  
	
  Currency of
  Advance:

  	
  [ • ]

  
	
  Amount:

  	
  [ • ]

  
	
  Interest
  Period:

  	
  [ • ]

  

 

3.                                 We confirm that each condition specified in Clause 4.1 (Initial Conditions Precedent) is
satisfied on the date of this Utilisation Request.

 

4.                                 The proceeds of this Advance should be credited to [account].

 

5.                                 This Utilisation Request is irrevocable.

 

Yours
faithfully

 

 

	
   

  	
   

  	
   

  
	
   

  	
  authorised
  signatory for

  	
   

  
	
   

  	
  [Name of
  Borrower]

  	
   

  

 

94

 

SCHEDULE 4

THE MARGIN AND UTILISATION FEE

 

	
  Margin and

  Utilisation

  Fee (basis

  points per

  annum)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CREDIT RATING

  OF ABB LTD

  
	
  BBB/Baa2

  or higher

  	
   

  	
  BBB-/Baa3

  	
   

  	
  BB+/Ba1

  	
   

  	
  BB/Ba2

  	
   

  	
  BB-/Ba3 or

  lower

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Margin

  	
   

  	
  80

  	
   

  	
  110

  	
   

  	
  145

  	
   

  	
  185

  	
   

  	
  225

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Utilisation(1) Fee

  	
   

  	
  12.5

  	
   

  	
  12.5

  	
   

  	
  25

  	
   

  	
  25

  	
   

  	
  50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Utilisation(2) Fee

  	
   

  	
  25

  	
   

  	
  25

  	
   

  	
  50

  	
   

  	
  50

  	
   

  	
  75

  	
   

  

 

Any adjustment
to the Margin or Utilisation Fee will apply from:

 

(i)                               the date of publication of any relevant change to the Credit Rating
of ABB; and/or

 

(ii)                            the date on which a Credit Rating ceases to be assigned to ABB by
either S&P or Moody’s.

 

(1)          Each day upon which Outstandings equal or exceed 33% of the Total
Commitments and are less than 66% of the Total Commitments.

 

(2)          Each day upon which Outstandings equal or exceed 66% of the Total
Commitments.

 

95

 

SCHEDULE 5

FORM OF TRANSFER CERTIFICATE

 

To:                                                                             Credit Suisse First Boston as Facility Agent

 

From:                                                                 [The
Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)

 

Dated:

 

ABB Ltd – $1,000,000,000
Credit Agreement dated [•]

(the “Credit Agreement”)

 

1.                                 Words and expressions defined in the Credit Agreement have the same
meaning when used herein.

 

2.                                 We refer to Clause 24.5 (Procedure for transfer) of the Credit
Agreement:

 

(a)                                      The Existing Lender and the New Lender agree to the Existing Lender
and the New Lender transferring by novation all or part of the Existing
Lender’s Commitment, rights and obligations referred to in the Schedule in
accordance with Clause 24.5 (Procedure for transfer).

 

(b)                                     The proposed Transfer Date is
[            ].

 

(c)                                      The Facility Office and address, fax number and attention details
for notices of the New Lender for the purposes of Clause 31.2 (Addresses)
are set out in the Schedule.

 

3.                                 The New Lender expressly acknowledges the limitations on the
Existing Lender’s obligations set out in paragraph (c) of Clause 24.4 (Limitation
of responsibility of Existing Lenders).

 

4.                                 The New Lender confirms on the Transfer Date that it is a PMP.

 

5.                                 This Transfer Certificate is governed by English law.

 

THE SCHEDULE

 

Commitment/rights and
obligations to be transferred

 

[insert
relevant details]

[Facility
Office address, fax number and attention details for notices and account
details for payments,]

 

	
  [Existing
  Lender]

  	
  [New Lender]

  
	
   

  	
   

  
	
  By:

  	
  By:

  

 

96

 

This Transfer
Certificate is accepted by the Facility Agent and the Transfer Date is
confirmed as [           ].

 

[Facility
Agent]

 

By:

 

(1)          Only to be included if it is a requirement under Dutch law at the
time of such assignment or transfer, that the New Lender qualifies as a PMP.

 

97

 

SCHEDULE 6

TIMETABLES

 

	
   

  	
   

  	
  Advances
  in

  Euro

  	
   

  	
  Advances
  in

  Dollars

  	
   

  	
  Advances
  in

  Sterling

  	
   

  	
  Advances
  in

  other

  currencies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delivery of
  a duly completed Utilisation Request in accordance with Clause 5.1 (Delivery
  of a Utilisation Request)

  	
   

  	
  10 a.m.
  London time, 3 Business Days prior to the proposed Utilisation Date

  	
   

  	
  11 a.m.
  London time, 3 Business Days prior to the proposed Utilisation Date

  	
   

  	
  11 a.m.
  London time, 1 Business Day prior to the proposed Utilisation Date

  	
   

  	
  11 a.m.
  London time, 3 Business Days prior to the proposed Utilisation Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility
  Agent determines (in relation to a Utilisation) the Base Currency Amount of
  the Advance, if required under Clause 5.4 (Lenders’ participation)

  	
   

  	
  11 a.m.
  London time, 3 Business Days prior to the proposed Utilisation Date

  	
   

  	
  N/A

  	
   

  	
  11 a.m.
  London time, 1 Business Day prior to the proposed Utilisation Date

  	
   

  	
  11 a.m.
  London time, 3 Business Days prior to the proposed Utilisation Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility
  Agent notifies the Lenders of the Advance in accordance with Clause 5.4 (Lenders’
  participation)

  	
   

  	
  Promptly
  upon receipt from the relevant Borrower

  	
   

  	
  Promptly
  upon receipt from the relevant Borrower

  	
   

  	
  Promptly
  upon receipt from the relevant Borrower

  	
   

  	
  Promptly
  upon receipt from the relevant Borrower

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility
  Agent receives a notification from a Lender under Clause 6.2 (Unavailability
  of a currency)

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  Quotation
  Day as of 9 a.m. London time

  

 

98

 

	
   

  	
   

  	
  Advances
  in

  Euro

  	
   

  	
  Advances
  in

  Dollars

  	
   

  	
  Advances
  in

  Sterling

  	
   

  	
  Advances
  in

  other

  currencies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility
  Agent gives notice in accordance with Clause 6.2 (Unavailability of a currency)

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  Upon receipt
  of notification from the Lenders

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIBOR or
  EURIBOR is fixed

  	
   

  	
  Quotation
  Day as of 11.00 a.m. Brussels time

  	
   

  	
  Quotation
  Day as of 11.00 a.m. London time

  	
   

  	
  Quotation
  Day as of 11.00 a.m. London time

  	
   

  	
  Quotation
  Day as of 11. 00 a.m. London time

  

 

99

 

SCHEDULE 7

FORM OF ACCESSION LETTER

 

To:                              Credit Suisse First Boston as Facility Agent

 

From:                  [Subsidiary]
and ABB Ltd

 

Dated:             [ • ]

 

Dear Sirs

 

ABB Ltd – $1,000,000,000
Revolving Credit Agreement dated [•]

(the “Agreement”)

 

1.                                 We refer to the Agreement. 
This is an Accession Letter. 
Terms defined in the Agreement have the same meaning in this Accession
Letter unless given a different meaning in this Accession Letter.

 

2.                                 [Subsidiary]
agrees to become an [Additional Borrower]/[Additional Guarantor] and to be
bound by the terms of the Agreement as an [Additional Borrower]/[ Additional
Guarantor] pursuant to [Clause 25.2 (Additional Borrowers)]/[Clause 25.4 (Additional
Guarantors)] of the Agreement.

 

3.                                 [Subsidiary]
is a company duly incorporated under the laws of [name of relevant jurisdiction].

 

4.                                 [Subsidiary]
is a Subsidiary of ABB Ltd.

 

5.                                 [Subsidiary’s]
administrative details are as follows:

 

Address:

 

Fax No:

 

Attention:

 

6.                                 This Accession Letter is governed by English law.

 

[This
Guarantor Accession Letter is entered into by deed].

 

	
  ABB Ltd

  	
  [Subsidiary]

  
	
   

  	
   

  
	
  By:

  	
  By:

  

 

100

 

SCHEDULE 8

FORM OF RESIGNATION LETTER

 

To:  Credit Suisse
First Boston as Facility Agent

 

From:  [resigning
Obligor] and ABB Ltd

 

Dated:  [ • ]

 

Dear Sirs

 

ABB Ltd – $1,000,000,000
Revolving Credit Agreement dated [•]

(the “Agreement”)

 

1.                                 We refer to the Agreement. 
This is a Resignation Letter. 
Terms defined in the Agreement have the same meaning in this Resignation
Letter unless given a different meaning in this Resignation Letter.

 

2.                                 Pursuant to [Clause 25.3 (Resignation of a Borrower)]/[Clause 25.6 (Resignation
of a Guarantor)], we request that [resigning Obligor] be
released from its obligations as a [Borrower]/[Guarantor] under the Agreement.

 

3.                                 We confirm that:

 

(a)                                      no Default would result from the acceptance of this request; and

 

(b)                                     [resigning
Obligor] is under no actual or contingent liability under the
Agreement.

 

4.                                 This Resignation Letter is governed by English law.

 

 

	
  ABB Ltd

  	
  [Subsidiary]

  
	
   

  	
   

  
	
  By:

  	
  By:

  

 

101

 

SCHEDULE 9

MANDATORY COSTS

 

The Mandatory
Costs is an addition to the interest rate on an Advance denominated in Sterling
to compensate the Lenders for the cost attributable to such Advance resulting
from the imposition from time to time under or pursuant to the Bank of England
Act 1998 (the “BoE Act”) of a requirement to place non-interest-bearing or
Special Deposits (whether interest bearing or not) with the Bank of England
calculated by reference to liabilities used to fund the Advance.

 

The Mandatory
Costs shall be the rate determined by the Facility Agent to be equal to the
arithmetic mean (rounded upward, if necessary, to 4 decimal places) of the
respective rates notified by each Reference Bank to the Facility Agent as the
rate resulting from the application (as appropriate) of the following formulae:

 

XL +
S(L - D)

100 - (X + S)

 

where on the
day of application of a formula:

 

X                                       is the percentage of Eligible Liabilities (in excess of any stated
minimum) by reference to which that Reference Bank is required under or
pursuant to the BoE Act to maintain cash ratio deposits with the Bank of
England;

 

L                                         is LIBOR applicable to the relevant Advance;

 

S                                         is the level of interest bearing Special Deposits, expressed as a
percentage of Eligible Liabilities, which that Reference Bank is required to
maintain by the Bank of England (or other United Kingdom governmental
authorities or agencies); and

 

D                                       is the percentage rate per annum payable by the Bank of England to
that Reference Bank on Special Deposits.

 

(X, L, S and D
shall be expressed in the formula as numbers and not as percentages, e.g. if X
= 0.15% and L = 7%, XL will be calculated as 0.15 x 7 and not as 0.15% x
7%.  A negative result obtained from
subtracting D from L shall be counted as zero.)

 

If any
Reference Bank fails to notify any such rate to the Facility Agent, the
Mandatory Costs shall be determined on the basis of the rate(s) notified to the
Facility Agent by the remaining Reference Bank(s).

 

The Mandatory
Costs attributable to an Advance or other sum for any period shall be
calculated at or about 11.00 a.m. on the first day of that period for the
duration of that period.

 

The
determination of the Mandatory Costs in relation to any period shall, in the
absence of manifest error, be conclusive and binding on the Parties.

 

If there is
any change in circumstance (including the imposition of alternative or
additional requirements) which in the reasonable opinion of the Facility Agent
renders or will render the above formula (or any element of the formula, or any
defined term used in the formula) inappropriate or inapplicable, the Facility
Agent (following consultation with ABB and the

 

102

 

Majority
Lenders) shall be entitled to vary the same by giving notice to the
Parties.  Any such variation shall, in
the absence of manifest error, be conclusive and binding on the Parties and
shall apply from the date specified in such notice.

 

For the
purposes of this Schedule, Eligible Liabilities and Special Deposits have the
meanings given to those terms under or pursuant to the BoE Act or by the Bank
of England (as may be appropriate), on the day of the application of the
formula.

 

103

 

SCHEDULE 10

MATERIAL SUBSIDIARIES

 

	
  Company
  Name

  	
   

  	
  Jurisdiction

  	
   

  	
  ABB
  Interest (%)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABB Finance
  B.V.

  	
   

  	
  Netherlands

  	
   

  	
  100

  	
   

  
	
  ABB Capital
  B.V.

  	
   

  	
  Netherlands

  	
   

  	
  100

  	
   

  
	
  ABB
  International Finance Limited

  	
   

  	
  Guernsey

  	
   

  	
  100

  	
   

  
	
  ABB Finance
  Inc.

  	
   

  	
  United
  States

  	
   

  	
  100

  	
   

  
	
  ABB Holdings
  Inc.

  	
   

  	
  United
  States

  	
   

  	
  100

  	
   

  
	
  ABB AG

  	
   

  	
  Germany

  	
   

  	
  100

  	
   

  
	
  ABB AB

  	
   

  	
  Sweden

  	
   

  	
  100

  	
   

  
	
  ABB S.p.A.

  	
   

  	
  Italy

  	
   

  	
  100

  	
   

  
	
  ABB Schweiz
  Holding AG

  	
   

  	
  Switzerland

  	
   

  	
  100

  	
   

  
	
  ABB
  Financial Services AB

  	
   

  	
  Sweden

  	
   

  	
  100

  	
   

  
	
  ABB Treasury
  Center (Asia Pacific) Pte. Ltd

  	
   

  	
  Singapore

  	
   

  	
  100

  	
   

  
	
  ABB Financial
  Services Australia Limited

  	
   

  	
  Australia

  	
   

  	
  100

  	
   

  
	
  ABB Treasury
  Center (USA) Inc.

  	
   

  	
  United
  States

  	
   

  	
  100

  	
   

  
	
  ABB Vetco
  Gray Inc.

  	
   

  	
  United
  States

  	
   

  	
  100

  	
   

  
	
  ABB Offshore
  Systems AS

  	
   

  	
  Norway

  	
   

  	
  100

  	
   

  
	
  ABB Oy

  	
   

  	
  Finland

  	
   

  	
  100

  	
   

  
	
  ABB Ltd.

  	
   

  	
  England

  	
   

  	
  100

  	
   

  
	
  ABB Holding
  AS

  	
   

  	
  Norway

  	
   

  	
  100

  	
   

  
	
  ABB S.A.

  	
   

  	
  France

  	
   

  	
  100

  	
   

  
	
  Asea Brown
  Boveri S.A.

  	
   

  	
  Spain

  	
   

  	
  100

  	
   

  
	
  ABB (China)
  Ltd

  	
   

  	
  China

  	
   

  	
  100

  	
   

  
	
  ABB Australia Pty Limited

  	
   

  	
  Australia

  	
   

  	
  100

  	
   

  
	
  Sirius
  International Försakrings AB (publ)

  	
   

  	
  Sweden

  	
   

  	
  100

  	
   

  

 

104

 

	
  Company
  Name

  	
   

  	
  Jurisdiction

  	
   

  	
  ABB
  Interest (%)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABB Inc.

  	
   

  	
  United
  States

  	
   

  	
  100

  	
   

  
	
  ABB Ltda.

  	
   

  	
  Brazil

  	
   

  	
  100

  	
   

  

 

105

 

SCHEDULE 11

FORM OF COVENANT COMPLIANCE CERTIFICATE

 

To:                                                      Credit Suisse First Boston as Facility Agent

 

From:                                          ABB Ltd

 

Dated:

 

Dear Sirs

 

ABB Ltd $1,000,000,000 Multicurrency Revolving Credit Agreement dated [•] (the “Agreement”)

 

We refer to
the Agreement.  This is a Covenant
Compliance Certificate delivered with the consolidated accounts of ABB dated
[31 March, 30 June, 30 September] [2003] (the “Reference
Date”).  Terms defined in the
Agreement have the same meaning when used in this Covenant Compliance
Certificate unless given a different meaning.

 

We confirm
that:

 

(a)                            EBITDA:
Total Gross Interest

 

In respect of
the Relevant Period ending on the Reference Date:

 

(i)                                         EBITDA was [     ].

 

(ii)                                      Total Gross Interest was [     ].

 

Therefore the
ratio of EBITDA to Total Gross Interest in respect of such period was
[    ] : [    ] and the
covenant contained in paragraph 21.2(a) of Clause 21 (Financial Covenants) [has/has not] been
complied with.

 

(b)                           Net Debt of the Group

 

(i)                                         Short-term borrowings of the Group on the Reference Date were
[     ].

 

(ii)                                      Long Term Borrowings of the Group on the Reference Date were
[     ].

 

(iii)                                   Cash available in group treasury
operations and disclosed (prior to the Trigger Date) in the Liquidity Plan and
the reconciliation to balance sheet cash as disclosed in the quarterly
compliance certificate was [•].

 

(iv)                                  Total Gross Debt was
[           ].

 

Therefore the ratio of Net Debt to EBITDA in respect of such period was
[   ]:[   ] and the covenant contained in
paragraph 21.2(b) of Clause 21 (Financial
Covenants) [has/has not] been complied with.

 

(c)                            Consolidated
Net Worth

 

(i)                                         Consolidated Net Worth on the Reference Date was
[     ].

 

106

 

(ii)                                      Cumulative Consolidated Net Income of the Group from [date] to the reference Date was
[     ].

 

Accordingly
the calculation set out in clause 20.2(c) is as follows:

 

$3,000,000,000
+ [insert
50% of consolidated net income figure or 0 if that figure is negative]
= zero

 

Therefore
Consolidated Net Worth on the Reference Date was at least
[     ] and the covenant contained in paragraph 21.2(c) of Clause 21 (Financial
Covenants) [has/has not] been complied with.

 

(d)                           Total
Gross Debt of the Group excluding the Obligor Group

 

The aggregate
amount of Total Gross Debt of Group Companies that are not members of the
Obligor Group (excluding items set out in paragraphs (i) to (v) of paragraph
21.3 of Clause 21 (Financial Covenants))
[has/has not] since the date of the Credit Agreement exceeded
$1,000,000,000.

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Officer of
  ABB Ltd

  	
   

  	
  Officer of
  ABB Ltd

  	
   

  
	
  (without
  personal liability)

  	
   

  	
  (without
  personal liability)

  	
   

  

 

107

 

SIGNATURES

 

The Original Borrowers

 

ABB CAPITAL B.V.

 

By:  PATRICK
KRAHENBUHL      BRIAN VAN REIJN

 

 

ABB ASEA BROWN BOVERI LTD

 

By:       ANN
LARSSON       ALEX HALL

 

 

The Original Guarantors

 

ABB LTD

 

By:        ALFRED
STORCK    URS ARNOLD

 

 

ABB CAPITAL B.V.

 

By:        PATRICK
KRAHENBUHL        BRIAN VAN REIJN

 

 

ABB ASEA BROWN BOVERI LTD

 

By:        ANN
LARSSON       ALEX HALL

 

 

The Mandated Lead Arrangers

 

BARCLAYS CAPITAL

 

By:        TIM
AUSTRUP

 

 

BAYERISCHE HYPO-UND VEREINSBANK AG

 

By:        FRANK
SCHMIDT       THOMAS PENTENRIEDER

 

 

BNP PARIBAS

 

By:         LIONEL
BORDARIER     CHRISTIAN LEROY

 

108

 

CITIGROUP GLOBAL MARKETS LIMITED

 

By:        CAMILO
MORI

 

 

COMMERZBANK AKTIENGESELLSCHAFT

 

By:        MARTINA
BOLLER        AXEL RICHEBAECHER

 

 

CREDIT SUISSE FIRST BOSTON

 

By:         THOMAS
MUOIO        MARK WALSH

 

 

DEUTSCHE BANK AG

 

By:        MATTHIAS
GAAB        KARL-HEINZ HERWECK

 

 

DRESDNER KLEINWORT WASSERSTEIN

 

By:        ANDREAS
SCHEER        MATTHIAS WITTENBURG

 

 

HSBC BANK PLC

 

By:        PER
OLOV SYNNEMAR        JAN-CARL DE GEER

 

 

NORDEA BANK SWEDEN AB (PUBL)

 

By:       ARNE
LJUNG              BIRGITTA HOOG

 

 

SEB MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)

 

By:       MICHAEL
DICKS

 

 

SVENSKA HANDELSBANKEN AB (PUBL)

 

By:         HELENA
LIND SCHOGARNE

 

 

The Arrangers

 

109

 

BANCO BILBAO VIZCAYA ARGENTARIA S.A.

 

By:           CHRIS METHERELL            
PAUL GRAHAM

 

 

CDC IXIS

 

By:       FLORENCE SOULE DE LAFONT        HENRI MALICK

 

 

DEN NORSKE BANK ASA

 

By:      SIGURD
KAYSER        KRISTI BIRKELAND

 

 

ING BELGIUM NV

 

By:      NICK
SMIT       YVES ADLER

 

 

KBC BANK NV

 

By:      HERLINDA
WOUTERS        ADRIAAN LOEFF

 

 

SAUDI AMERICAN BANK

 

By:      SYED
HASAN ALI

 

 

The Facility Agent

 

CREDIT SUISSE FIRST BOSTON

 

By:          THOMAS
MUOIO        MARK WALSH

 

 

The Lenders

 

BARCLAYS BANK PLC

 

By:        TIM
AUSTRUP

 

 

BAYERISCHE HYPO-UND VERINSBANK AG

 

By:        FRANK
SCHMIDT       THOMAS PENTENRIEDER

 

110

 

BNP PARIBAS SA

 

By:        LIONEL
BORDARIER     CHRISTIAN LEROY

 

 

CITIBANK, N.A.

 

By:        CAMILO
MORI

 

 

COMMERZBANK AKTIENGESELLSCHAFT

 

By:        MARTINA BOLLER        AXEL RICHEBAECHER

 

 

CREDIT SUISSE FIRST BOSTON

 

By:        THOMAS
MUOIO        MARK WALSH

 

 

DEUTSCHE BANK LUXEMBOURG S.A.

 

By:        ASTRID
SCHNEIDER        STEPHANIE SCHREINER

 

 

DRESDNER BANK LUXEMBOURG S.A.

 

By:        ANDREAS
SCHEER        MATTHIAS WITTENBURG

 

 

HSBC BANK PLC

 

By:        PER
OLOV SYNNEMAR        JAN-CARL DE GEER

 

 

NORDEA BANK SWEDEN AB (PUBL)

 

By:       ARNE
LJUNG              BIRGITTA HOOG

 

 

SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)

 

By:        MICHAEL
DICKS

 

111

 

SVENSKA HANDELSBANKEN AB (PUBL)

 

By:        HELENA
LIND SCHOGARNE

 

 

BANCO BILBAO VIZCAYA ARGENTARIA S.A.

 

By:       CHRIS
METHERELL                   PAUL
GRAHAM

 

 

CDC IXIS

 

By:       FLORENCE
SOULE DE LAFONT             HENRI MALICK

 

 

DEN NORSKE BANK ASA

 

By:       SIGURD
KAYSER                  
KRISTI BIRKELAND

 

 

ING BELGIUM NV

 

By:       NICK
SMIT                    YVES
ADLER

 

 

KBC BANK NV

 

By:       HERLINDA
WOUTERS             ADRIAAN LOEFF

 

 

SAUDI AMERICAN BANK

 

By:       SYED
HASAN ALI

 

112Exhibit
4.6

 

CONFORMED
COPY

 

 

STOCK
AND ASSET PURCHASE AGREEMENT

 

 

between

 

ABB
HANDELS- UND VERWALTUNGS AG

 

and

 

LARADEW
LIMITED

 

 

DATED
AS OF JANUARY 16, 2004

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  
	
   

  	
   

  
	
  DEFINITIONS AND INTERPRETATION

  
	
  SECTION 1.01.

  	
  Defined Terms

  	
   

  
	
  SECTION 1.02.

  	
  Interpretation

  	
   

  
	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  
	
  PURCHASE AND SALE

  
	
   

  	
   

  
	
  SECTION 2.01.

  	
  Purchase and Sale of the Shares

  	
   

  
	
  SECTION 2.02.

  	
  Purchase and Sale of the Purchased Assets

  	
   

  
	
  SECTION 2.03.

  	
  Assumption and Exclusion of Liabilities

  	
   

  
	
  SECTION 2.04.

  	
  Purchase Price

  	
   

  
	
  SECTION 2.05.

  	
  Closing

  	
   

  
	
  SECTION 2.06.

  	
  Deferred Closings

  	
   

  
	
  SECTION 2.07.

  	
  Closing Deliveries by Purchaser

  	
   

  
	
  SECTION 2.08.

  	
  Closing Deliveries by ABB

  	
   

  
	
  SECTION 2.09.

  	
  Pre-Closing Adjustment; Estimated Effective
  Date Net Assets; Intercompany Settlement Payment

  	
   

  
	
  SECTION 2.10.

  	
  Post-Closing Adjustment

  	
   

  
	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF ABB

  
	
   

  	
   

  
	
  SECTION 3.01.

  	
  Organization and Authority of ABB and the
  Sellers

  	
   

  
	
  SECTION 3.02.

  	
  Organization and Authority of the OGP
  Subsidiaries; Capital Stock of the OGP Subsidiaries; Ownership of the Shares

  	
   

  
	
  SECTION 3.03.

  	
  No Conflict

  	
   

  
	
  SECTION 3.04.

  	
  Consents and Approvals

  	
   

  
	
  SECTION 3.05.

  	
  Financial Information

  	
   

  
	
  SECTION 3.06.

  	
  Conduct of the OGP Business in the Ordinary
  Course; Absence of Certain Changes, Events and Conditions

  	
   

  
	
  SECTION 3.07.

  	
  Compliance with Laws

  	
   

  
	
  SECTION 3.08.

  	
  Litigation

  	
   

  
	
  SECTION 3.09.

  	
  Material Contracts

  	
   

  
	
  SECTION 3.10.

  	
  Intellectual Property

  	
   

  
	
  SECTION 3.11.

  	
  Real Property

  	
   

  

 

i

 

	
  SECTION 3.12.

  	
  Taxes

  	
   

  
	
  SECTION 3.13.

  	
  Employee Benefit Matters

  	
   

  
	
  SECTION 3.14.

  	
  Labor Matters

  	
   

  
	
  SECTION 3.15.

  	
  Environmental Matters

  	
   

  
	
  SECTION 3.16.

  	
  Assets

  	
   

  
	
  SECTION 3.17.

  	
  Insurance

  	
   

  
	
  SECTION 3.18.

  	
  Brokers

  	
   

  
	
  SECTION 3.19.

  	
  Inventory

  	
   

  
	
  SECTION 3.20.

  	
  Constitution; Registers; Powers of Attorney

  	
   

  
	
  SECTION 3.21.

  	
  Related Party Transactions

  	
   

  
	
  SECTION 3.22.

  	
  Insolvency; Winding Up

  	
   

  
	
  SECTION 3.23.

  	
  Guarantees

  	
   

  
	
  SECTION 3.24.

  	
  No Other Representations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF PURCHASER

  
	
   

  	
   

  
	
  SECTION 4.01.

  	
  Organization and Authority of Purchaser and
  the OGP Purchasers

  	
   

  
	
  SECTION 4.02.

  	
  No Conflict

  	
   

  
	
  SECTION 4.03.

  	
  Consents and Approvals

  	
   

  
	
  SECTION 4.04.

  	
  Investment Purpose

  	
   

  
	
  SECTION 4.05.

  	
  Litigation

  	
   

  
	
  SECTION 4.06.

  	
  Financing

  	
   

  
	
  SECTION 4.07.

  	
  Brokers

  	
   

  
	
  SECTION 4.08.

  	
  No Other Representations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  	
   

  
	
  COVENANTS AND AGREEMENTS

  
	
   

  	
   

  
	
  SECTION 5.01.

  	
  Reorganization

  	
   

  
	
  SECTION 5.02.

  	
  Related Agreements

  	
   

  
	
  SECTION 5.03.

  	
  Conduct of the Business Prior to the
  Closing

  	
   

  
	
  SECTION 5.04.

  	
  Access to Information; Books and Records;
  Monthly Review Protocol

  	
   

  
	
  SECTION 5.05.

  	
  Confidentiality

  	
   

  
	
  SECTION 5.06.

  	
  Regulatory Authorizations; Notices and
  Consents

  	
   

  
	
  SECTION 5.07.

  	
  Retained Names and Marks

  	
   

  
	
  SECTION 5.08.

  	
  Guarantees

  	
   

  
	
  SECTION 5.09.

  	
  Third Party Consents

  	
   

  
	
  SECTION 5.10.

  	
  Termination of Certain Existing
  Intercompany Contracts and Arrangements

  	
   

  
	
  SECTION 5.11.

  	
  Discharge of Directors and Related Matters

  	
   

  
	
  SECTION 5.12.

  	
  Insurance

  	
   

  

 

ii

 

	
  SECTION 5.13.

  	
  Certain Contracts

  	
   

  
	
  SECTION 5.14.

  	
  Transaction Financing

  	
   

  
	
  SECTION 5.15.

  	
  Notification

  	
   

  
	
  SECTION 5.16.

  	
  Other Bidders

  	
   

  
	
  SECTION 5.17.

  	
  Further Action

  	
   

  
	
  SECTION 5.18.

  	
  Misplaced Assets

  	
   

  
	
  SECTION 5.19.

  	
  Information and Funds Received Covenants

  	
   

  
	
  SECTION 5.20.

  	
  Perfection of Intellectual Property
  Assignments

  	
   

  
	
  SECTION 5.21.

  	
  Grayloc Note

  	
   

  
	
  SECTION 5.22.

  	
  Shared Real Property

  	
   

  
	
  SECTION 5.23.

  	
  Derivatives

  	
   

  
	
  SECTION 5.24.

  	
  Migration Plan

  	
   

  
	
  SECTION 5.25.

  	
  Software Matters

  	
   

  
	
  SECTION 5.26.

  	
  Waiver of Termination Rights Under
  Norwegian Leases

  	
   

  
	
  SECTION 5.27.

  	
  Amendments to Subleases at Briarpark,
  Houston, Texas

  	
   

  
	
  SECTION 5.28.

  	
  Non-Competition Agreement Payment

  	
   

  
	
  SECTION 5.29.

  	
  Brazilian Reorganization

  	
   

  
	
  SECTION 5.30.

  	
  Certain Purchaser Reimbursement Obligations

  	
   

  
	
  SECTION 5.31.

  	
  Sao Paulo Property

  	
   

  
	
  SECTION 5.32.

  	
  Norwegian Debt

  	
   

  
	
  SECTION 5.33.

  	
  Angolan Property

  	
   

  
	
  SECTION 5.34.

  	
  Compliance Review

  	
   

  
	
  SECTION 5.35.

  	
  No Solicitation of Transactions

  	
   

  
	
  SECTION 5.36.

  	
  Kizomba B Matter

  	
   

  
	
  SECTION 5.37.

  	
  Purchaser Financing Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE MATTERS

  
	
   

  	
   

  
	
  SECTION 6.01.

  	
  Collective Bargaining Agreements

  	
   

  
	
  SECTION 6.02.

  	
  Service Recognition

  	
   

  
	
  SECTION 6.03.

  	
  Purchaser Welfare Benefit Plans

  	
   

  
	
  SECTION 6.04.

  	
  Assumed Obligations

  	
   

  
	
  SECTION 6.05.

  	
  U.S. Employee Plans

  	
   

  
	
  SECTION 6.06.

  	
  Non-U.S. Retirement Plans

  	
   

  
	
  SECTION 6.07.

  	
  Post-Retirement Health and Welfare Benefits

  	
   

  
	
  SECTION 6.08.

  	
  Vesting of Benefits Under Certain Employee
  Plans

  	
   

  
	
  SECTION 6.09.

  	
  Continued Employment of Transferred
  Employees

  	
   

  
	
  SECTION 6.10.

  	
  Purchase Price Adjustment for Unfunded
  Benefit Liabilities

  	
   

  
	
  SECTION 6.11.

  	
  Cooperation

  	
   

  

 

iii

 

	
  ARTICLE VII

  
	
   

  	
   

  
	
  TAX MATTERS

  
	
   

  	
   

  
	
  SECTION 7.01.

  	
  Indemnity

  	
   

  
	
  SECTION 7.02.

  	
  Preparation of Tax Returns

  	
   

  
	
  SECTION 7.03.

  	
  Refunds

  	
   

  
	
  SECTION 7.04.

  	
  Contests

  	
   

  
	
  SECTION 7.05.

  	
  Cooperation and Exchange of Information

  	
   

  
	
  SECTION 7.06.

  	
  Conveyance Taxes

  	
   

  
	
  SECTION 7.07.

  	
  Tax Covenants

  	
   

  
	
  SECTION 7.08.

  	
  Elections

  	
   

  
	
  SECTION 7.09.

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  	
   

  
	
  CONDITIONS TO CLOSING

  
	
   

  	
   

  
	
  SECTION 8.01.

  	
  Conditions to the Parties’ Obligations

  	
   

  
	
  SECTION 8.02.

  	
  Additional Conditions to Obligations of ABB

  	
   

  
	
  SECTION 8.03.

  	
  Additional Conditions to the Obligations of
  Purchaser

  	
   

  
	
  SECTION 8.04.

  	
  Additional Conditions to the Consummation
  of Certain Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  	
   

  	
   

  
	
  INDEMNIFICATION

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Survival of Representations and Warranties

  	
   

  
	
  SECTION 9.02.

  	
  Indemnification by Purchaser

  	
   

  
	
  SECTION 9.03.

  	
  Indemnification by ABB

  	
   

  
	
  SECTION 9.04.

  	
  Indemnification Procedures

  	
   

  
	
  SECTION 9.05.

  	
  Environmental Remediation

  	
   

  
	
  SECTION 9.06.

  	
  Certain Projects Relating to the Business

  	
   

  
	
  SECTION 9.07.

  	
  Additional Indemnification Provisions;
  Exclusive Remedies

  	
   

  
	
  SECTION 9.08.

  	
  Certain Procedures Governing the Bank
  Guarantees

  	
   

  
	
  SECTION 9.09.

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  	
   

  	
   

  
	
  TERMINATION AND WAIVER

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Termination

  	
   

  
	
  SECTION 10.02.

  	
  Effect of Termination

  	
   

  
	
  SECTION 10.03.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  	
   

  	
   

  
	
  GENERAL PROVISIONS

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  Expenses

  	
   

  

 

iv

 

	
  SECTION 11.02.

  	
  Notices

  	
   

  
	
  SECTION 11.03.

  	
  Public Announcements

  	
   

  
	
  SECTION 11.04.

  	
  Severability

  	
   

  
	
  SECTION 11.05.

  	
  Entire Agreement

  	
   

  
	
  SECTION 11.06.

  	
  Assignment

  	
   

  
	
  SECTION 11.07.

  	
  No Third Party Beneficiaries

  	
   

  
	
  SECTION 11.08.

  	
  Amendment

  	
   

  
	
  SECTION 11.09.

  	
  Specific Performance

  	
   

  
	
  SECTION 11.10.

  	
  Currency

  	
   

  
	
  SECTION 11.11.

  	
  Governing Law

  	
   

  
	
  SECTION 11.12.

  	
  Arbitration

  	
   

  
	
  SECTION 11.13.

  	
  Default Judgment Claim

  	
   

  
	
  SECTION 11.14.

  	
  Waivers.

  	
   

  
	
  SECTION 11.15.

  	
  Counterparts

  	
   

  

 

 

	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
   

  	
  Defined Terms

  
	
  Exhibit B-1

  	
  -

  	
   

  	
  Transaction Information

  
	
  Exhibit B-2

  	
  -

  	
   

  	
  Asset Sellers

  
	
  Exhibit C

  	
  -

  	
   

  	
  Purchase Price and
  Non-Competition Agreement Allocation

  
	
  Exhibit D

  	
  -

  	
   

  	
  Form of Transition
  Services Agreement

  
	
  Exhibit E

  	
  -

  	
   

  	
  Closing Accounting
  Principles

  
	
  Exhibit F-1

  	
  -

  	
   

  	
  Form of Local Share
  Sale and Purchase Agreement

  
	
  Exhibit F-2

  	
  -

  	
   

  	
  Form of Local Asset
  Sale and Purchase Agreement

  
	
  Exhibit G

  	
  -

  	
   

  	
  Form of Non-Competition
  Agreement

  
	
  Exhibit H

  	
  -

  	
   

  	
  Form of Shared IP
  License Agreement

  
	
  Exhibit I

  	
  -

  	
   

  	
  Form of Surety

  
	
  Exhibit J-1

  	
  -

  	
   

  	
  Form of Adjustment and
  Indemnity Bank Guarantee

  
	
  Exhibit J-2

  	
  -

  	
   

  	
  Form of Repayment Bank
  Guarantee

  
	
  Exhibit J-3

  	
  -

  	
   

  	
  Form of Tax Election
  Bank Guarantee

  
	
  Exhibit K

  	
  -

  	
   

  	
  Form of Deferred
  Transfer Agreement

  
	
  Exhibit L

  	
  -

  	
   

  	
  List of Included
  Transactions

  
	
  Exhibit M

  	
  -

  	
   

  	
  Additional Approvals

  
	
  Exhibit N

  	
  -

  	
   

  	
  Form of Director
  Resignation Letter

  
	
  Exhibit O

  	
  -

  	
   

  	
  Form of Patent
  Assignments

  
	
  Exhibit P

  	
  -

  	
   

  	
  Pension

  
	
  Exhibit Q

  	
  -

  	
   

  	
  Pension Obligation
  Purchase Price Adjustment Assumptions

  
	
  Exhibit R

  	
  -

  	
   

  	
  Form of Swiss Legal
  Opinion

  
	
  Exhibit S-1

  	
  -

  	
   

  	
  Deferred Consideration
  Provisions

  
	
  Exhibit S-2

  	
  -

  	
   

  	
  Deferred Consideration
  Accounting Principles

  
	
  Exhibit S-3

  	
  -

  	
   

  	
  Certain OGP EBITDA
  Principles

  
	
  Exhibit T

  	
  -

  	
   

  	
  Terms of Compliance
  Review

  
	
  Exhibit U

  	
  -

  	
   

  	
  Form of Capital
  Modernization Program Payoff Letter

  
	
  Exhibit V

  	
  -

  	
   

  	
  Form of Norway
  Securitization Program Termination Letter

  
	
  Exhibit W

  	
  -

  	
   

  	
  Monthly Review Protocol

  

 

v

 

STOCK AND ASSET PURCHASE
AGREEMENT, dated as of January 16, 2004, between ABB Handels- und
Verwaltungs AG, a company incorporated under the laws of Switzerland (“ABB”),
and Laradew Limited (registered number 4765054), a company incorporated under
the laws of England and Wales (“Purchaser”).

 

PRELIMINARY STATEMENTS

 

1.                                       Affiliates
of ABB listed in column 1 of Exhibit B-1 (each such Affiliate being a “Share
Seller”; and, collectively, the “Share Sellers”) own, or will own at
the Closing, all of the issued and outstanding shares (the “Shares”) of
the companies (the “Seller Subsidiaries”) set out against their
respective names in column 2 of Exhibit B-1, through which, together with the
subsidiaries of the Seller Subsidiaries listed in column 5 of Exhibit B-1 and
further described in Schedule 3.02(b) of the Disclosure
Schedule (together with the Seller Subsidiaries, the “OGP Subsidiaries”)
and the JV Companies, ABB is engaged in the Business;

 

2.                                       Affiliates
of ABB listed on Exhibit B-2 (each such Affiliate being an “Asset Seller”;
and, collectively, the “Asset Sellers”, and together with the Share
Sellers, the “Sellers”) are also engaged in the Business as well as in
other businesses; and

 

3.                                       Upon
the terms and subject to the conditions of this Agreement, ABB wishes to, and
shall cause the Sellers and the IPR Assignors to, sell to Purchaser or to an
OGP Purchaser, and Purchaser wishes to, or shall cause the OGP Purchasers to,
purchase from the Sellers the OGP Business as a going concern;

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements and covenants
hereinafter set forth, ABB and Purchaser hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

SECTION 1.01.                 Defined Terms.  Capitalized terms used in this Agreement
shall have the meanings specified in Exhibit A to this Agreement unless the
context otherwise requires; provided that in the event capitalized terms
are used in Exhibit E or Exhibits S-1, S-2 and S-3 to this Agreement and
attributed meanings inconsistent with those specified in Exhibit A, then for
purposes of Exhibit E or Exhibits S-1, S-2 and S-3 only the meanings specified
in Exhibit E or Exhibits S-1, S-2 and S-3, respectively, shall govern.

 

SECTION 1.02.                 Interpretation.  The following provisions shall apply in
connection with the interpretation of this Agreement:

 

(a)                                  Any
reference to the singular includes the plural and vice versa, any reference to
natural persons includes legal persons and vice versa, and any reference to a
gender includes the other gender.

 

(b)                                 Any
reference to the Preamble, Preliminary Statements, Articles, Sections, Exhibits
and Disclosure Schedules are, unless otherwise stated, references to the 

 

 

Preamble, Preliminary Statements, Articles, Sections, Exhibits and
Disclosure Schedules of or to this Agreement.

 

(c)                                  The
words “hereof”, “herein” and “hereunder” and words of similar import, when used
in this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

 

(d)                                 Whenever
the words “include”, “includes” or “including” are used in this Agreement, they
are deemed to be followed by the words “without limitation”.

 

(e)                                  All
Exhibits and Schedules form an integral part of this Agreement and are equally
binding herewith.  Any reference to
“this Agreement” shall include such Exhibits and Schedules.

 

(f)                                    Any
reference to a statutory provision shall include a reference to the provision
as modified, amended or supplemented from time to time and any subordinate
legislation made under such statutory provision which in either case is in
force on the date of this Agreement.

 

(g)                                 Subject
to Section 11.06, references to a Person shall include any permitted
assignee or successor to such Party in accordance with this Agreement.

 

(h)                                 If
any period is referred to in this Agreement by way of reference to a number of
days, the days shall be reckoned exclusively of the first and inclusively of
the last day unless the last day falls on a day that is not a Business Day, in
which case the last day shall be the next succeeding Business Day.

 

(i)                                     The
terms “dollars” or “$” or “U.S. dollars” shall mean United States dollars and
all payments hereunder shall be made in United States dollars.

 

(j)                                     The
use of “or” is not intended to be exclusive unless explicitly indicated
otherwise.

 

(k)                                  The
table of contents and the descriptive headings contained in this Agreement are
for convenience of reference only and shall not affect in any way the meaning
or interpretation of this Agreement.

 

(l)                                     Any legal term for
any action, remedy, method of judicial proceeding, legal document, legal
status, court, official or any legal concept or thing shall in respect of any
jurisdiction other than New York State be deemed to include what most nearly
approximates in that other jurisdiction such legal term and any reference to a
New York State or United States federal Law shall be construed so as to include
equivalent or analogous Laws of any other relevant jurisdiction.

 

2

 

ARTICLE II

PURCHASE AND SALE

 

SECTION 2.01.                 Purchase and Sale of the Shares.  Upon the terms and subject to the conditions
of this Agreement, at the Closing, ABB shall cause each Share Seller to sell
the Shares that such Share Seller owns as set forth in column 3 of Exhibit B-1
to Purchaser or to an OGP Purchaser, and Purchaser shall purchase or cause an
OGP Purchaser to purchase the Shares and each right attaching to the Shares at
the Closing free and clear of any Encumbrances.  Effective upon the Closing, ABB waives, and at the Closing ABB
shall cause ABB Ltd. and each of the Share Sellers to waive on its own behalf
and on behalf of its and their respective Affiliates, all applicable rights of pre-emption
and other restrictions on transfer in their favor over the Shares.

 

SECTION 2.02.                 Purchase and Sale of the Purchased
Assets.  (a)  Upon the terms and subject to the conditions
of this Agreement, at the Closing ABB shall cause the Asset Sellers and the IPR
Assignors to sell, convey, assign, transfer and deliver to Purchaser or to an
OGP Purchaser, and Purchaser shall purchase or cause an OGP Purchaser to
purchase from the Asset Sellers and the IPR Assignors, all of the Asset
Sellers’ and the IPR Assignors’ right, title and interest in and to the
Purchased Assets (and in respect of the IPR Assignors such Intellectual
Property in respect of the OGP Business owned by the IPR Assignors) free and
clear of any Encumbrances other than Permitted Encumbrances.

 

(b)                                 Notwithstanding
anything in Section 2.02(a) to the contrary, the Asset Sellers shall not
sell, convey, assign, transfer or deliver to Purchaser or an OGP Purchaser, and
Purchaser shall not purchase, nor cause an OGP Purchaser to purchase, and the
Purchased Assets shall not include, the right, title and interest of any Asset
Seller in and to any of the Excluded Assets.

 

SECTION 2.03.                 Assumption and Exclusion of
Liabilities.  (a)  Purchaser, from and after the Closing, shall
assume and shall duly and punctually pay, perform and discharge when due in
accordance with their respective terms, or shall cause an OGP Purchaser to
assume and so pay, perform and discharge, the Assumed Liabilities.

 

(b)                                 Notwithstanding
anything in Section 2.03(a) to the contrary, each Asset Seller shall
retain, and shall be responsible for paying, performing and discharging when
due, and Purchaser and the OGP Purchasers shall not assume or have any
responsibility for, the Excluded Liabilities.

 

SECTION 2.04.                 Purchase Price.  (a) 
The amount to be paid in cash at the Closing by Purchaser (for itself
and on behalf of the OGP Purchasers) for the Shares and the Purchased Assets
and the assumption of the Assumed Liabilities shall be $847,000,000, as
adjusted in accordance with Sections 2.09 and 6.10(a) (the “Initial Purchase
Price”).  The purchase price shall
be the Initial Purchase Price, as adjusted in accordance with Sections 2.10 and
6.10 after the Closing, plus the Deferred Consideration (the “Purchase Price”).  Following the Closing, any payment made by
either ABB or Purchaser or any Affiliate of ABB or Purchaser Affiliate, as
applicable, pursuant to the Deferred Transfer Agreement or any provision 

 

3

 

of this Agreement shall
be treated as either an increase or decrease in the Purchase Price, as the case
may be.

 

(b)                                 All
monies to be transferred pursuant to this Agreement shall be made by electronic
transfer of immediately available funds to (i) ABB’s Bank Account if a payment
is due to ABB, the Sellers or any of their Affiliates (other than Affiliates
which form a part of the OGP Business), or, as the case may be, to (ii) the
Purchaser’s Bank Account if a payment is due to Purchaser or any of the
Purchaser Affiliates.  Except as required
by Law or as otherwise specifically provided in this Agreement, such payments
will be made without setoff, restriction or condition and without any deduction
or withholding.  Receipt of such monies
into either ABB’s Bank Account or Purchaser’s Bank Account shall be received as
agent for the relevant Affiliate of ABB or Purchaser Affiliate, as the case may
be, to whom such monies are owed and shall be an absolute discharge to
Purchaser, the Purchaser Affiliates, ABB or any of its Affiliates who in each
case shall not be concerned to see application of any such amount thereafter.

 

(c)                                  Purchaser
and ABB agree that the Purchase Price shall be allocated as set forth in
Exhibit C (as may be restated pursuant to this Section 2.04(c)) and that
the Parties shall report for all Tax purposes the transactions contemplated by
this Agreement in a manner consistent with the terms of this Agreement,
including the allocation method utilized in the preparation of Exhibit C for
the purchase and sale of the OGP Shares and the Purchased Assets and the
assumption of the Assumed Liabilities. 
The allocation shall be restated as agreed between the Parties to
account for any adjustment pursuant to Sections 2.04(a), 2.09, 2.10, 6.10 and Article IX
(with such restatement being based on the principles applied in connection with
the original allocation).  Neither Party
shall take, and ABB shall cause its Affiliates and Purchaser shall cause the
Purchaser Affiliates not to take, any position inconsistent therewith in any
Tax Return, in any refund claim, in any litigation or other document or
otherwise take any position inconsistent with the allocation determined
pursuant to this Section 2.04(c), except to the extent required to comply
with a Change of Law or as required to comply with a change in GAAP.

 

SECTION 2.05.                 Closing.  (a) 
Upon the terms and subject to the conditions of this Agreement, (i) the
sale and purchase of the Shares and (ii) the sale and purchase of the Purchased
Assets and the assumption of the Assumed Liabilities contemplated by this
Agreement shall take place at a closing (the “Closing”) to be held at
the offices of Shearman & Sterling LLP, Broadgate West, 9 Appold Street,
London, England EC2A 2AP, on the later of (x) the third Business Day following
the satisfaction or waiver of the conditions to the obligations of the Parties
set forth in Sections 8.01(a), 8.02(c), 8.03(d) and 8.03(j) (assuming that
on such date all other conditions to the Closing have been satisfied) and (y)
the expiry of ten Business Days from receipt by Purchaser of the Pre-Closing
Notice as contemplated by Section 2.09(a), or at such other place or at
such other date or time as ABB and Purchaser may mutually agree upon in writing
(the day on which the Closing takes place being the “Closing Date”).

 

(b)                                 At
the Closing, the Parties shall consummate the Primary Transactions as well as
each of the Secondary Transactions for which all of the Additional Approvals
set forth in Section 8.04 shall then have been satisfied, including
payment of the Initial Purchase Price.

 

4

 

(c)                                  On
the date which is the calendar month end preceding the Longstop Date (or such
other date as the Parties mutually agree), ABB and Purchaser shall jointly
undertake a physical inventory of inventory of the OGP Business.  If the Effective Date occurs after the date
which is the calendar month end preceding the Longstop Date (or such other date
as the Parties mutually agree), the Parties shall only roll forward, taking
into account all relevant facts and circumstances, the results of such
inventory of inventory, and shall not undertake a further physical inventory of
inventory of the OGP Business.

 

SECTION 2.06.                 Deferred Closings.  In the event that one or more of the
conditions set forth in Section 8.04 with respect to one or more Secondary
Transactions have not been satisfied or waived prior to the date fixed for the
Closing pursuant to Section 2.05(a), the Secondary Transactions requiring
such Additional Approvals, as set forth on Exhibit M, shall not be consummated
at the Closing and ABB shall not be required to deliver the Provisionally
Retained Business.  In such event, at
the Closing, (i) ABB and Purchaser shall cause the applicable Seller, on the
one hand, and the applicable OGP Purchaser, on the other hand, respectively, to
execute and deliver a deferred transfer agreement, substantially in the form of
Exhibit K (the “Deferred Transfer Agreement”) with respect to the
Provisionally Retained Businesses and (ii) ABB shall cause to be issued in
favor of and delivered to Purchaser the Repayment Bank Guarantee in an
aggregate principal amount equal to the amounts allocated to the Provisionally
Retained Business as set forth in the column titled “Allocation Amounts” set
forth in Exhibit L (the “Allocation Amount”).  The Deferred Transfer Agreement and, when executed pursuant to
the Deferred Transfer Agreement, the relevant Local Agreements, shall govern
the terms and conditions of the consummation of each Secondary Transaction.

 

SECTION 2.07.                 Closing Deliveries by Purchaser.  At the Closing, Purchaser shall deliver, or
cause to be delivered, to ABB:

 

(i)                                     the Initial
Purchase Price as contemplated by Section 2.04(a);

 

(ii)                                  a receipt for the
certificates or other instruments evidencing the Shares and the shares of
capital stock of the Material Subsidiaries;

 

(iii)                               the Intercompany
Settlement Payment as contemplated by Section 2.09(d), if applicable;

 

(iv)                              a receipt for the
Intercompany Settlement Payment, if applicable;

 

(v)                                 a certificate from
Purchaser, signed by a duly authorized officer thereof, confirming the matters
described in Section 8.02(a) hereof;

 

(vi)                              a true and complete copy,
certified by the Secretary or an Assistant Secretary of Purchaser, of the
resolutions duly and validly adopted by Purchaser’s Board of Directors
evidencing its authorization of the execution and delivery of the Transaction
Agreements to which it is a party and the consummation of the transactions
contemplated thereby;

 

(vii)                           a true and complete copy,
certified by a duly authorized officer of Purchaser, of the applicable
resolutions duly and validly adopted by the Board of 

 

5

 

Directors of each applicable OGP Purchaser evidencing such Board’s
authorization of the execution and delivery of the respective Local Agreements
to which it is a party and the consummation of the transactions contemplated
thereby;

 

(viii)                        a duly executed counterpart of
each of the Related Agreements, except for the Non-Competition Agreement;

 

(ix)                                a true and complete
copy, certified by a duly authorized officer of Purchaser, of the Purchaser
Financing Documents; and

 

(x)                                   a duly executed
counterpart of a joint acknowledgement of the Closing Date (the “Closing
Date Acknowledgement”).

 

SECTION 2.08.                 Closing Deliveries by ABB.  At the Closing, ABB shall deliver, or cause
to be delivered, to Purchaser or its designee:

 

(i)                                     evidence of the
release and discharge of the OGP Subsidiaries from the Capital Modernization
Program in a form reasonably satisfactory to Purchaser;

 

(ii)                                  evidence of the
release and discharge of the OGP Subsidiaries from the Eureka Program in a form
reasonably satisfactory to Purchaser;

 

(iii)                               the Intercompany
Settlement Payment as contemplated by Section 2.09(d), if applicable;

 

(iv)                              a receipt for the Initial
Purchase Price (including the anticipated Stub Payment) and the estimated
Intercompany Settlement Payment, if applicable;

 

(v)                                 a certificate from
ABB, signed by a duly authorized officer thereof, confirming the matters described
in Sections 8.03(a), (d) and (e) hereof;

 

(vi)                              a true and complete copy,
certified by a duly authorized officer of ABB, of the resolutions duly and
validly adopted by ABB’s Board of Directors evidencing its authorization of the
execution and delivery of the Transaction Agreements to which it is a party and
the consummation of the transactions contemplated thereby;

 

(vii)                           a true and complete copy,
certified by a duly authorized officer of ABB, of the applicable resolutions
duly and validly adopted by the Board of Directors of each applicable Seller
evidencing such Board’s authorization of the execution and delivery of the
respective Local Agreement to which it is a party and the consummation of the
transactions contemplated thereby;

 

(viii)                        the resignation letters
contemplated by Section 5.11(a);

 

(ix)                                a duly executed
counterpart of each of the Related Agreements, except for the Non-Competition
Agreement;

 

6

 

(x)                                   evidence that the
Aberdeen Lease and the Houston Lease have been terminated in accordance with
Section 8.03(h) in a form reasonably satisfactory to Purchaser; and

 

(xi)                                a duly executed
counterpart of the Closing Date Acknowledgement.

 

SECTION 2.09.                 Pre-Closing Adjustment; Estimated
Effective Date Net Assets; Intercompany Settlement Payment.  (a) 
Not less than ten (10) Business Days prior to the anticipated Closing
Date, ABB shall deliver to Purchaser a notice (the “Pre-Closing Notice”)
setting forth ABB’s good faith estimate of:

 

(i)                                     the Net Assets of
the OGP Business (including, for the avoidance of doubt, the Provisionally
Retained Business, if any) determined in accordance with the Closing Accounting
Principles (the “Estimated Effective Date Net Assets”);

 

(ii)                                  the related
Pre-Closing Adjustment, if any;

 

(iii)                               the estimated
Intercompany Settlement Payment as of the Closing Date, if any, and, if
different, the estimated amount of the Intercompany Settlement Payment assuming
such amounts were determined as of the Effective Date;

 

(iv)                              the amount expected to be
outstanding under the External Debt Contracts on the Closing Date;

 

(v)                                 the amount of cash
expected to be reflected on the Effective Date Balance Sheet and, if different,
the amount of cash expected to be included in the OGP Business as of the Closing
Date, including confirmation as to the amount to be paid, declared or set aside
for payment as a dividend or other distribution to ABB or any of its
Affiliates;

 

(vi)                              confirmation of any
additional Indebtedness (amount and material borrowing terms) for money
borrowed from any Person other than ABB or any of its affiliates, such
confirmation to evidence the amount and the material terms upon which it is
borrowed;

 

(vii)                           a revised Exhibit C
reflecting the proposed Initial Purchase Price; and

 

(viii)                        the anticipated Stub Payment
required to be paid by Purchaser to ABB pursuant to Section 2.09(c), if
any, and the projected Closing Date.

 

(b)           Subject to Section 2.09(e), the
“Pre-Closing Adjustment” shall be equal to the amount of (x) the
Estimated Effective Date Net Assets less (y) $623,000,000 plus (z) the anticipated
Stub Payment contemplated by Section 2.09(c) as set forth in the
Pre-Closing Notice.  Subject to
Section 2.09(e), if the Pre-Closing Adjustment is a positive amount, then
the Initial Purchase Price shall be increased by an amount equal to such excess
amount and if the Pre-Closing Adjustment is a negative amount, then the Initial
Purchase Price shall be decreased by an amount equal to such negative amount.

 

7

 

(c)           Subject to Section 2.09(e), if
the Closing occurs on any date other than the last day of a calendar month,
Purchaser shall pay to ABB an amount equal to the product of $202,740.00
multiplied by the calendar date of the month in which the Closing occurs (for
the purpose of clarity, if the Closing Date is the 12th day of the month,
$202,740.00 shall be multiplied by 12) (such payment being the “Stub Payment”)
and if the Closing Date occurs on the last day of a calendar month, no Stub
Payment shall be made by Purchaser to ABB.

 

(d)           The Intercompany Settlement Payment
shall be deemed to settle in full, subject to Section 2.10(e), all
outstanding obligations for money owed (including all non-trade accounts)
between ABB or its Affiliates (other than any OGP Subsidiary) and any OGP
Subsidiary, other than the Intra-Group Trading Amount, as of the Closing
Date.  The “Net Intercompany Balance”
shall mean the difference of (i) the sum of all outstanding obligations as of
the Closing Date for money owed (including all non-trade accounts) by ABB
and/or any of its Affiliates (other than any OGP Subsidiary), on the one hand,
to any OGP Subsidiary, on the other hand, other than obligations that reflect
the Intra-Group Trading Amount less
(ii) the sum of all outstanding obligations as of the Closing Date for money
owed (including all non-trade accounts by any OGP Subsidiary, on the one hand,
to ABB and/or any of its Affiliates (other than any OGP Subsidiary), on the
other hand, other than the Intra-Group Trading Amount.  Subject to Section 2.09(e), if the Net
Intercompany Balance is positive, ABB shall pay an amount equal to such
positive balance to Purchaser and if the Net Intercompany Balance is negative,
Purchaser shall pay an amount equal to such negative balance to ABB.  For purposes of this Agreement, such payment
amount is referred to as the “Intercompany Settlement Payment”.

 

(e)           If the aggregate sum of (w)
$847,000,000 plus (x) the
Pre-Closing Adjustment contemplated by Section 2.09(b) plus (y) the Intercompany Settlement
Payment contemplated by Section 2.09(d) less
(z) the adjustment in relation to pensions contemplated by Section 6.10(a)
equals a net amount owed by Purchaser to ABB in excess of $816,000,000 (if
prior to or on the Closing Date ABB has made the June 2004 payroll
payments to the OGP Employees of ABB Offshore Systems AS and its subsidiaries)
or $802,000,000 (if prior to or on the Closing Date ABB has not made the
June 2004 payroll payments to the OGP Employees of ABB Offshore Systems AS
and its subsidiaries), as the case may be (such excess amount being, the “Delayed
Amount”), then Purchaser shall, subject to Section 2.10(g), be
obligated only to pay to ABB on the Closing Date an amount equal to
$816,000,000 or $802,000,000, as the case may be; provided, however,
that such amounts shall be increased by the amount of cash and cash equivalents
included in the balance sheet from which the Estimated Effective Date Net
Assets was derived up to but not in excess of $16,000,000.  The supporting calculation to each of the
figures of $816,000,000 and $802,000,000 (as may be adjusted as provided in
this Section 2.09(e)) referenced in this Section 2.09(e) is set forth
in Section 2.09(e) of the Disclosure Schedule.  For the avoidance of doubt, such calculations are for
illustrative purposes only and serve no other purpose other than to determine
the agreed balances in this Section 2.09(e).  To the extent that the Argentinean Debt has not been discharged
and released in full by the Closing Date, then the figures of $816,000,000 and
$802,000,000 (as may be adjusted as provided in this Section 2.09(e))
referenced in this Section 2.09(e) shall be reduced only to the extent of
the Indebtedness (including all reasonable costs of termination) outstanding
under the Argentinean Debt at the Closing Date.  For the purpose of this Section 2.09(e), “Argentinean Debt”
means the Indebtedness set forth in line 1 of Section 3.09(a)(i) to the
Scope I Operations Disclosure Schedules.

 

8

 

(f)            Prior to and following the delivery
of the Pre-Closing Notice, Purchaser and the Purchaser Representatives shall
have the ability to consult with ABB and the ABB Representatives with respect
to the determination of the items set forth in the Pre-Closing Notice.  If upon such consultation the Parties agree
that any of the amounts set forth in the Pre-Closing Notice should be changed,
ABB shall deliver to Purchaser an amended Pre-Closing Notice setting forth such
agreed amounts, and such amended Pre-Closing Notice shall be deemed to be the
Pre-Closing Notice for all other purposes of this Agreement.  If ABB and Purchaser do not agree upon any
amendments to the Pre-Closing Notice, the Pre-Closing Adjustments shall be
calculated based on the amounts set forth in the Pre-Closing Notice.

 

(g)           If between the Effective Date and the
Closing Date, ABB causes one or more OGP Subsidiaries to pay to the DOJ
monetary penalties required by applicable Law to be paid upon completion of the
Compliance Review which penalties in the aggregate are in excess of the
provisions for such penalties set forth in the Closing Accounting Principles,
the Estimated Effective Date Net Assets set forth in the Pre-Closing Notice
shall be deemed for purposes of this Section 2.09 and Section 2.10 to
be reduced by the aggregate amount of such penalties in excess of the
provisions for such penalties set forth in the Closing Accounting Principles.

 

SECTION 2.10.                 Post-Closing Adjustment.  The Purchase Price shall be subject to
adjustment after the Closing as set forth in this Section 2.10:

 

(a)                                  Effective
Date Balance Sheet.  As promptly as
practicable, but in any event within seventy-five (75) calendar days following
the Closing Date, Purchaser shall deliver to ABB (i) an unaudited combined
statement of assets and liabilities of the OGP Business, excluding the Excluded
Assets and Excluded Liabilities and including, for the avoidance of doubt, the
Provisionally Retained Businesses (the “Effective Date Balance Sheet”),
if any, as of the last calendar day of the calendar month immediately preceding
the Closing Date or, if such date is the last calendar day of the month, as of
the Closing Date (the “Effective Date”), (ii) a report setting forth the
Net Intercompany Balance and the related Intercompany Settlement Payment and
(iii) a report setting forth the Stub Payment and the related adjustment to the
Initial Purchase Price, based on the Closing Date Acknowledgement
(collectively, the “Purchase Price Documentation”).  The Effective Date Balance Sheet shall be
prepared in accordance with the Closing Accounting Principles, and with the
cooperation of, and in consultation with, ABB. 
Purchaser shall, and shall cause the Purchaser Affiliates to, and
Purchaser shall use its reasonable efforts to cause the officers, employees,
authorized agents, Purchaser’s Accountants, counsel and other representatives
of Purchaser (the “Purchaser Representatives”) to afford ABB and the
officers, employees and authorized agents, ABB’s Accountants, counsel and other
representatives of ABB (the “ABB Representatives”) reasonable access,
during normal business hours, to the offices, employees, properties, plants,
other facilities, books and records of Purchaser and the OGP Purchasers, as the
case may be, with respect to the OGP Business reasonably required by ABB and/or
the ABB Representatives for the purpose of participating in the preparation of
the Purchase Price Documentation and/or for the purpose of agreeing or settling
any dispute in relation thereto and to allow ABB and the ABB Representatives to
take copies of such documents; provided, however, that
Purchaser’s Accountants or any other auditors or accountants of Purchaser or
any Purchaser Affiliate shall not be obliged 

 

9

 

to make any work papers available to any Person unless and until such
Person has signed a customary agreement relating to such access to work papers
in form and substance reasonably acceptable to such auditors or accountants.

 

(b)                                 Disputes.  (i)  Subject
to clauses (ii), (iii) and (iv) of this Section 2.10(b), the Purchase
Price Documentation delivered by Purchaser to ABB shall be final, binding and
conclusive on the Parties.

 

(ii)                                  ABB may dispute any
amount reflected on the Purchase Price Documentation; provided, however,
that ABB shall have delivered to Purchaser a written notice (the “Dispute
Notice”) of each disputed item, specifying the amount thereof in dispute
and setting forth, in reasonable detail, the basis for such dispute, within
thirty (30) Business Days of Purchaser’s delivery of the Purchase Price
Documentation to ABB.  In the event of
such a dispute, Purchaser, together with Purchaser’s Accountants, and ABB,
together with ABB’s Accountants, shall attempt to reconcile their differences,
and any resolution by them as to any disputed amounts shall be final, binding
and conclusive on the Parties.

 

(iii)                               If the Parties are
unable to resolve any such dispute within ten (10) Business Days of receipt by
Purchaser of the Dispute Notice, ABB and Purchaser shall, within five (5)
Business Days, submit those items remaining in dispute for joint resolution by
the London and New York offices of PricewaterhouseCoopers or, failing its
appointment and in the absence of the Parties being able to agree upon a
suitable replacement within ten (10) Business Days of such failure to appoint
PricewaterhouseCoopers, such other internationally recognized independent
accounting firm appointed upon the application of either Party by the President
at such time of the Institute of Chartered Accountants of England and Wales
(the “Independent Accounting Firm”), which shall, within thirty (30)
Business Days after such submission, make a final determination, binding on the
Parties, of the appropriate amount of each of the items of the Purchase Price
Documentation set forth in the Dispute Notice. 
The Parties shall each provide the Independent Accounting Firm with all
information relating to the items in dispute which the Independent Accounting
Firm may reasonably request and the Independent Accounting Firm shall be
entitled (to the extent it considers appropriate) to base its determination on
such information.  During such
determination period, the Independent Accounting Firm shall also adjust the
Purchase Price Documentation delivered by Purchaser to ABB to reflect the items
determined by the Independent Accounting Firm, and indicate the required payor
and payment amount as a result of such adjustments, if any, and deliver a copy
of such Purchase Price Documentation to each of the Parties and to the bank
providing the Adjustment and Indemnity Bank Guarantee.  The Purchase Price Documentation prepared by
the Independent Accounting Firm shall be final, binding and conclusive upon the
parties.  None of ABB, its Affiliates,
Purchaser or any Purchaser Affiliate shall, from the date of this Agreement
until such time as the Purchase Price Documentation shall have been finally
determined as set forth herein, retain the Independent Accounting Firm to
provide any material accounting, auditing, consulting or other similar services
to such Person in connection with any matter, mandate or undertaking.

 

10

 

(iv)                              The fees and
disbursements of the Independent Accounting Firm shall be paid by ABB in the
same proportion that the aggregate of the amounts represented by such remaining
disputed items so submitted to the Independent Accounting Firm that are
unsuccessfully disputed by ABB (as finally determined by the Independent
Accounting Firm) bears to the aggregate of such amounts represented by such
remaining disputed items so submitted, and the balance shall be paid by
Purchaser.  In acting under this
Agreement, the Independent Accounting Firm shall be entitled to the privileges
and immunities of arbitrators.

 

(c)                                  Final Purchase
Price Documentation.  Each of (i)
the statement of assets and liabilities of the OGP Business set out within the
Effective Date Balance Sheet, (ii) the Net Intercompany Balance (the “Final
Net Intercompany Balance”) and the final related Intercompany Settlement
Payment and (iii) the Stub Payment, that is final and binding upon the Parties
as determined (x) due to the failure of ABB to deliver a Dispute Notice
within 30 Business Days of Purchaser’s delivery of the Purchase Price
Documentation, (y) through the agreement of the Parties pursuant to
Section 2.10(b)(ii) or (z) through the action of the Independent
Accounting Firm pursuant to Section 2.10(b)(iii), is referred to as the “Final
Effective Date Balance Sheet”, the “Final Intercompany Settlement
Payment” and the “Final Stub Payment”, respectively.

 

(d)                                 Purchase Price
Adjustment.  Within ten (10)
Business Days of the Effective Date Balance Sheet being deemed final, an
adjustment to the Initial Purchase Price shall be paid as follows:

 

(i)                                     in the event that
the amount of Net Assets reflected on the Final Effective Date Balance Sheet is
less than the amount of Estimated Effective Date Net Assets, then ABB shall pay
to Purchaser an amount equal to such shortfall by wire transfer in immediately
available funds to Purchaser’s Bank Account; or

 

(ii)                                  in the event that the
amount of Net Assets reflected on the Final Effective Date Balance Sheet
exceeds the amount of Estimated Effective Date Net Assets, then Purchaser shall
pay to ABB an amount equal to such excess.

 

(e)                                  Final Intercompany
Settlement Payment.  Within ten (10)
Business Days of the Intercompany Settlement Payment being deemed final:

 

(i)                                     in the event the
Final Net Intercompany Balance is greater than the Net Intercompany Balance set
forth in the Pre-Closing Notice, then ABB shall pay to Purchaser an amount
equal to such excess; or

 

(ii)                                  in the event the
Final Net Intercompany Balance is less than the Net Intercompany Balance set
forth in the Pre-Closing Notice, then Purchaser shall pay to ABB an amount
equal to such shortfall.

 

(f)                                    Final Stub
Payment.  Within ten Business Days
of the Stub Payment being deemed final, in the event the Closing Date was a
date other than anticipated in the Pre-Closing Notice, an adjustment to the
Initial Purchase Price shall be paid as follows:

 

11

 

(i)                                     in the event the
Final Stub Payment is less than the Stub Payment set forth in the Pre-Closing
Notice, then ABB shall pay to Purchaser an amount equal to such shortfall; or

 

(ii)                                  in the event the
Final Stub Payment exceeds the Stub Payment set forth in the Pre-Closing
Notice, then Purchaser shall pay to ABB an amount equal to such excess.

 

(g)                                 Delayed Amount.  Within ten (10) Business Days of the Effective
Date Balance Sheet being deemed final, Purchaser shall pay to ABB the Delayed
Amount.

 

(h)                                 Netting of Payment
Amounts; Interest.  (i)  Any payments required to be made pursuant to
Sections 2.10(d), (e), (f) and (g) shall be netted.  No payment shall be made pursuant to
Sections 2.10(d), (e), (f) and (g) until the Purchase Price Documentation
has been determined in full.  ABB and
Purchaser agree on behalf of themselves and of their Affiliates or the Purchaser
Affiliates, as applicable, that any such payment made pursuant to
Section 2.10(d) and 2.10(f) will be an adjustment to the Purchase Price;
and

 

(ii)           The net amount of the payments
required to be made by either Party pursuant to Sections 2.10(d), (e), (f)
and (g) shall be paid, together with interest thereon determined as provided by
Section 9.09, from the Closing Date to the date of payment (the “Net
Payment”).

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF ABB

 

As an inducement to
Purchaser to enter into this Agreement, ABB hereby represents and warrants to
Purchaser as follows:

 

SECTION 3.01.                 Organization and Authority of ABB
and the Sellers.  (a)  ABB is a corporation duly incorporated,
validly existing and in good standing under the laws of Switzerland and has all
necessary corporate power and authority to enter into, execute and deliver this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated by the Transaction Agreements.  The execution and delivery of this Agreement
by ABB, the performance by ABB of its obligations hereunder and under the
Related Agreements to which it is, or will be when executed as provided in this
Agreement, a party and the consummation by ABB of the transactions contemplated
by the Transaction Agreements have been duly authorized by all requisite action
on the part of ABB.  This Agreement has
been, and upon their execution each of the Related Agreements will be, duly
executed and delivered by ABB to the extent ABB is a party thereto, and,
assuming due authorization, execution and delivery by Purchaser and the other
parties thereto, if any, this Agreement is, and each of the Related Agreements
to which ABB is a party will be, a legal, valid and binding obligation of ABB
enforceable against it in accordance with its terms, subject to the effect of
any applicable 

 

12

 

bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or similar laws
relating to or affecting creditors’ rights generally and subject, as to enforceability,
to the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).

 

(b)                                 Each
Seller and IPR Assignor is a corporation duly incorporated, validly existing
and, where applicable, in good standing under the Laws of the jurisdiction of
its incorporation, and will have when executed as provided in this Agreement
all necessary corporate power and authority to enter into, execute and deliver
each Related Agreement to which it will be a party, to carry out its
obligations thereunder and to consummate the transactions contemplated
thereby.  The execution and delivery by
each Seller and IPR Assignor of each Related Agreement to which it is a party,
the performance by such Seller or such IPR Assignor of its obligations
thereunder and the consummation by such Seller or such IPR Assignor of the
transactions contemplated thereby will be, when executed as provided in this
Agreement, duly authorized by all requisite action on the part of such Seller
or such IPR Assignor.  Each Related
Agreement to which each Seller and IPR Assignor will be a party will be, when
executed as provided in this Agreement, duly executed and delivered by such
Seller or such IPR Assignor and, assuming due authorization, execution and
delivery by the other parties thereto, if any, will constitute, when executed
as provided in this Agreement, a legal, valid and binding obligation of such
Seller or such IPR Assignor enforceable against it in accordance with its
terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or similar laws relating to or
affecting creditors’ rights generally and subject, as to enforceability, to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).

 

SECTION 3.02.                 Organization and Authority of the
OGP Subsidiaries; Capital Stock of the OGP Subsidiaries; Ownership of the
Shares.  (a)  Each OGP Subsidiary is a corporation duly
incorporated or organized, validly existing and, where applicable, in good
standing under the Laws of its jurisdiction of incorporation or organization
and has all necessary corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on the
OGP Business as such business is currently being conducted by such OGP
Subsidiary.  Each Asset Seller has all
necessary power and authority to own, operate or lease the properties and
assets now owned, operated or leased by it and to carry on the OGP Business as
such business is currently being conducted by such Asset Seller.  Each of the OGP Subsidiaries and each of the
Asset Sellers relating to the OGP Business is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business, in each case relating
to the OGP Business, makes such licensing or qualification necessary, except to
the extent that the failure to be so licensed or qualified would not reasonably
be expected to have a Material Adverse Effect.

 

(b)                                 (i)  Each Seller is, or will be at the Closing,
the beneficial and record owner of the Shares set forth opposite such Seller’s
name in column 3 of Exhibit B-1 hereto; and

 

(ii)                                  all
of the Shares set forth in column 3 of Exhibit B-1 hereto are, or will be
at the Closing, duly authorized, validly issued, fully paid and
nonassessable.  The issued and
outstanding capital stock of each OGP Subsidiary is set forth in
Section 3.02(b) of the Disclosure Schedule.  Each Seller Subsidiary is the beneficial and record owner of the
shares of capital 

 

13

 

stock of the OGP
Subsidiaries set forth in Section 3.02(b) of the Disclosure
Schedule (together with the Shares, the “OGP Shares”) opposite such
Seller Subsidiary’s name, and all of such shares are duly authorized, validly
issued, fully paid and nonassessable. 
The directors of each Material Subsidiary are set forth in
Section 3.02(b) of the Disclosure Schedule.  Except as set forth in Section 3.02(b) of the Disclosure
Schedule, (A) there are no options, warrants or rights of conversion or other
rights, agreements, arrangements or commitments obligating any OGP Subsidiary
to issue or sell or granting to any Person other than another OGP Subsidiary
the right to acquire any of its shares of capital stock or securities
convertible into or exchangeable for shares of its capital stock, (B) there are
no voting trusts, stockholder agreements, proxies or other agreements in effect
with respect to the voting or transfer of such shares of capital stock and (C)
there are no Encumbrances or agreements, arrangements or obligations to create
or give any Encumbrance, relating to any of the OGP Shares.  To the knowledge of ABB, there is no
outstanding or pending call for funding or other assumption of liability in
respect to any OGP Subsidiary which is not cancelable by ABB or its Affiliates
without payment of any penalty.

 

(c)                                  Each
JV Company is an entity duly incorporated, validly existing and, where
applicable, in good standing under the laws of the jurisdiction of its
incorporation.  An OGP Subsidiary is the
beneficial and record owner of the shares of capital stock of the JV Company
set forth in Section 3.02(c) of the Disclosure Schedule opposite such
JV Company’s name, and all of such shares are duly authorized, validly issued,
fully paid and nonassessable.  Except as
set forth in Section 3.02(c) of the Disclosure Schedule, there are no (i)
voting trusts, stockholder agreements, proxies or other agreements in effect
with respect to the voting or transfer of such shares of capital stock or (ii)
Encumbrances or agreements, arrangements or obligations to create or give any
Encumbrance, relating to any such shares of capital stock of a JV Company owned
by an OGP Subsidiary.  With respect to
each JV Company and each OGP Subsidiary that is not wholly owned by a Seller or
another OGP Subsidiary, true and complete copies of the agreements creating or
governing such entities have been provided to Purchaser in Section 3.02(c)
of the Disclosure Schedule, and, to the knowledge of ABB, such documentation
contains all material binding contractual terms relating to the arrangements
described therein.  To the knowledge of
ABB, (i) there is no outstanding or pending call for funding or other
assumption of liability in respect of any of the JV Companies and (ii) no JV
Company has an interest in or has agreed to acquire an interest in or merge or
consolidate with a Person other than an OGP Subsidiary.

 

SECTION 3.03.                 No Conflict.  Assuming that all consents, approvals,
authorizations and other actions described in Section 3.04 have been
obtained and all filings and notifications listed in Section 3.04 of the
Disclosure Schedule have been made, the execution, delivery and
performance by ABB and the Sellers of the Transaction Agreements to which any
of them is a party do not and will not (a) violate, conflict with or result
in the breach of any provision of the charter or by-laws (or similar
organizational documents) of ABB, the Sellers, the IPR Assignors, any OGP
Subsidiary, or, to the knowledge of ABB, a JV Company, (b) conflict with
or violate any Law or Order, or (c) conflict with, result in any breach
of, constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, or, in the case of any OGP
Subsidiary, to the knowledge of ABB, a JV Company and the Purchased Assets,
require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result
in the creation of any Encumbrance on any of the OGP Shares, to the knowledge
of ABB, the shares of any JV 

 

14

 

Company or of any
Encumbrance other than a Permitted Encumbrance on any of the OGP Assets
pursuant to, any note, grant, subsidy, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument or
arrangement (including all Material Contracts and Material Permits) entered
into in the OGP Business and to which any OGP Subsidiary, Asset Seller or IPR
Assignor is a party except, in the case of clause (b) or (c), as set forth in
Section 3.03 of the Disclosure Schedule or as would not reasonably be
expected to create a liability in excess of $500,000 in any individual case or
$2,000,000 in the aggregate.

 

SECTION 3.04.                 Consents and Approvals.  (a) 
The execution, delivery and performance by ABB, the Sellers and the IPR
Assignors of the Transaction Agreements to which any of them is a party do not
and will not require any consent, approval, authorization or other order of,
action by, filing with or notification to any Governmental Authority except for
(i) consents, appeals, authorizations or other orders, actions, filings or
notifications not related to merger control or competition Laws set forth in
Section 3.04(a) of the Disclosure Schedule, (ii) the notification and
waiting period requirements of the HSR Act and (iii) applicable filings
under non-United States antitrust and competition Laws that are required by Law
to be made prior to the Closing and which are set forth in Section 3.04(a)
of the Disclosure Schedule.

 

(b)                                 Neither
the OGP Subsidiaries, the Asset Sellers relating to the OGP Business nor the
IPR Assignors relating to the OGP Business have given an undertaking or written
assurance (legally binding or not) or are subject to such an undertaking or
written assurance to a Governmental Authority under the U.K. Fair Trading Act
1973, U.K. Competition Act 1980, U.K. Restrictive Trade Practices Acts 1976 and
1977, U.K. Resale Prices Act 1976, U.K. Competition Act 1998, Treaty of Rome,
Agreement on the European Economic Area or any other similar law.  Neither the Sellers relating to the OGP
Business, the OGP Subsidiaries nor the IPR Assignors relating to the OGP
Business are subject to an Order or decision (not generally applicable) made
under the U.K. Fair Trading Act 1973 or the U.K. Competition Act 1980 or by any
guidance or decision of the Director General of Fair Trading or the Chairman of
the Office of Fair Trading, or by a decision of the European Commission or a
Governmental Authority, that would reasonably be expected to have a Material
Adverse Effect.

 

(c)                                  None
of the Asset Sellers relating to the OGP Business, the OGP Subsidiaries, the
IPR Assignors or, to the knowledge of ABB, the JV Companies have ever received,
nor have any of them made an application to receive, any aid (as that term is
understood for the purposes of Articles 87 to 89 of the Treaty of Rome) from a
member state of the European Community which could give rise to a reimbursement
obligation as a result of the consummation of the transactions contemplated by
this Agreement.

 

SECTION 3.05.                 Financial Information.  (a) 
Section 3.05 of the Disclosure Schedule sets forth true and
complete copies of (i) the audited combined balance sheets for each of the
Scope 1 Operations and the Scope 2 Operations, respectively, for the three
years ending December 31, 2000, 2001 and 2002 and the related audited
combined statements of income and cash flows for the Scope 1 Operations and the
Scope 2 Operations, as the case may be, for the periods ended on such dates (together,
the “Financial Statements”), (ii) the unaudited management report for
the OGP Business as at and for the eleven-month period ending November 30,
2003 (the “Monthly Management Report”) and (iii) the P.90 Base Case
EBITDA.  The Financial Statements present
fairly, in all material respects, the financial position, the 

 

15

 

statement of operations,
cash flows, stockholders’ equity and results of operations of the Scope 1
Operations and the Scope 2 Operations, as the case may be, as at such date in
conformity with GAAP.  The Financial
Statements have been prepared from the books and records of the OGP
Subsidiaries and the Asset Sellers relating to the OGP Business and have been
derived from the monthly financial reports provided to management of the OGP
Business.  The Financial Statements
accurately reflect, in all material respects, the assets and operations of ABB
Óleo e Gás Ltda. and ABB Óleo e Gás Manutencão & Modificação, Ltda. as of
December 31, 2002.

 

(b)                                 The
statutory books and accounting records of the OGP Subsidiaries and the Asset
Sellers relating to the OGP Business have been maintained in accordance with
applicable Law and pursuant to OGP Business policies.  All such books and records are the property of the OGP
Subsidiaries and the Asset Sellers relating to the OGP Business or in their
possession (or under their control), and no written notice has been received
alleging that such books or records are materially incorrect or should be
rectified to correct a material error.

 

(c)                                  Except
as set forth in Section 3.05(c) of the Disclosure Schedule, the financial
statements included in the Monthly Management Report have been derived directly
from the books and records of the OGP Business (relating to each OGP Subsidiary
or business reporting unit forming part of the OGP Business), have been
prepared in all material respects on a basis consistent with the past practice
of the OGP Business having regard to the purpose for which they were created
and are accurate in all material respects and are not misleading in any
material respect.

 

(d)                                 As
at September 30, 2003, the aggregate of (w) the consolidated order backlog
of ABB Vetco Gray (as defined in Exhibit E), (x) the consolidated order backlog
of ABB Offshore Systems AS and its subsidiaries, (y) the order backlog of ABB Óleo e Gás Ltda. and (z) the
order backlog of ABB Óleo
e Gás, Manutenção e Modificação, Ltda., determined in
accordance with ABB’s customary management reporting practices, was
$981,400,000.

 

SECTION 3.06.                 Conduct of the OGP Business in the
Ordinary Course; Absence of Certain Changes, Events and Conditions.  Since December 31, 2002 through the
date of this Agreement, except as set forth in Section 3.06 of the
Disclosure Schedule, the OGP Business has been conducted in the ordinary course
and consistent with past practice. 
Without limiting the foregoing, except as set forth in Section 3.06
of the Disclosure Schedule, since December 31, 2002 through the date of
this Agreement, none of the OGP Subsidiaries or the Asset Sellers relating to
the OGP Business has:

 

(i)                                     made any loan,
guaranteed any Indebtedness or otherwise incurred any Indebtedness (other than
by an Asset Seller or by and between an OGP Subsidiary, on the one hand, and
either another OGP Subsidiary, ABB or an Affiliate of ABB, on the other hand)
having an aggregate value exceeding $5,000,000;

 

(ii)                                  sold, transferred,
leased, subleased, licensed or otherwise disposed of any of the OGP Real
Property or Purchased Assets (other than the Transferred Intellectual Property)
having an aggregate value exceeding $5,000,000;

 

16

 

(iii)                               sold, transferred,
licensed (other than licenses of Business Intellectual Property ancillary to
the sale of products or services in the ordinary course of business) or
otherwise disposed (other than by expiration or lapse) of any Business
Intellectual Property having an aggregate value exceeding $1,000,000;

 

(iv)                              suffered any damage,
destruction or loss not covered by insurance with respect to the OGP Assets
having a replacement cost of more than $500,000 for any single loss or
$1,000,000 in the aggregate for all such losses;

 

(v)                                 entered into any
amendment, termination or relinquishment of any Material Contract, other than
in the ordinary course of business consistent with past practice;

 

(vi)                              declared any dividend or
other distribution of capital or income which has not been paid prior to the
date hereof;

 

(vii)                           agreed to redeem or purchase
any of its share capital, or agreed to repay any of its loan capital except for
redemptions, repurchases or repayments that have been completed prior to the
date hereof;

 

(viii)                        made any material change to the
policies of the OGP Business with respect to the settlement of accounts payable
or collection of accounts receivable;

 

(ix)                                made any change in any
method of accounting or accounting practice or policy, other than such changes
required by GAAP or as set forth in Exhibit E;

 

(x)                                   created or incurred
any Encumbrance other than a Permitted Encumbrance on any OGP Asset nor sold or
factored any customer receivables other than pursuant to the Securitization
Programs; or

 

(xi)                                agreed, whether in
writing or otherwise, to take any of the actions specified in this
Section 3.06.

 

SECTION 3.07.                 Compliance with Laws.  Except as set forth in Section 3.07 of
the Disclosure Schedule:

 

(i)                                     the OGP Business
is being conducted in all material respects in compliance with all Laws and
Orders applicable to the OGP Business;

 

(ii)                                  one or more of the
OGP Subsidiaries or the Asset Sellers has all material governmental licenses,
permits and authorizations necessary to conduct the OGP Business as conducted
as of the date hereof (the “Material Permits”), and none of the OGP
Subsidiaries or the Asset Sellers has, within the last twelve months, received
written notice that has not been subsequently withdrawn that any Governmental
Authority intends to cancel or terminate any Material Permit;

 

(iii)                               there is no pending
investigation, enquiry or disciplinary proceeding by any Governmental Authority
concerning a material breach of or alleged material 

 

17

 

noncompliance with Law with respect to the OGP Business or any OGP
Asset and, to the knowledge of ABB, no such investigation, enquiry or
proceeding is threatened;

 

(iv)                              none of the OGP
Subsidiaries or the Asset Sellers relating to the OGP Business nor any person
for whose acts or defaults the OGP Subsidiaries or the Asset Sellers relating
to the OGP Business may be vicariously liable has (A) induced a person to enter
into an agreement or arrangement with any OGP Subsidiary or Asset Seller by
means of an unlawful payment, contribution, gift or inducement or (B) offered
or made an unlawful payment, contribution, gift or inducement to a government
official or employee, and there is no pending investigation, inquiry or
disciplinary proceeding by any Governmental Authority concerning the matters
described in clauses (A) and (B) above. 
Except as set forth in Section 3.07(iv) of the Disclosure Schedule,
to the best knowledge of ABB, no other holder of shares of capital stock of an
OGP Subsidiary which is not a wholly owned subsidiary of ABB has been a party
to, participated in, or had prior knowledge of any such activity; and

 

(v)                                 there are no ongoing
and have not been any material breaches by the OGP Subsidiaries, the Asset
Sellers relating to the OGP Business or, to the knowledge of ABB, the JV
Companies of the U.S. Antiboycott Laws and Regulations as at the date of this
Agreement.  To ABB’s knowledge, no
written notice has been received from any Governmental Authority claiming that
the OGP Subsidiaries, the Asset Sellers or the JV Companies relating to the OGP
Business are not in compliance with the U.S. Antiboycott Laws and Regulations.

 

SECTION 3.08.                 Litigation.  (a) 
Except as set forth in Section 3.08 of the Disclosure Schedule,
there are no Actions pending or, to ABB’s knowledge, threatened in writing
against any of the OGP Subsidiaries, any of the Asset Sellers relating to the
OGP Business or any other Person for whose acts or defaults the OGP
Subsidiaries or an Asset Seller may be vicariously liable that would reasonably
be expected to have a value in excess of $500,000 or could prevent or
materially delay the ability of ABB or any of the Sellers to consummate the
transactions contemplated by the Transaction Agreements.  To the knowledge of ABB, no circumstances
exist which could reasonably be expected to give rise to such a claim.  Except as set forth in Section 3.08 of
the Disclosure Schedule, none of the OGP Subsidiaries or any of the Asset
Sellers relating to the OGP Business is subject to any Order (nor, to ABB’s
knowledge, are there any such Orders threatened in writing) that would
reasonably be expected to have a Material Adverse Effect.

 

(b)                                 To
the knowledge of ABB, except as set forth in Section 3.08(b) of the
Disclosure Schedule:  (i) none of the
Asset Sellers (in connection with the OGP Business only) or any of the OGP
Subsidiaries or JV Companies has, since 1991, had an Asbestos Claim asserted
against it or has, since 1991, manufactured any product or equipment containing
any asbestos; (ii) at all times during the years 1991 to the present the Asset
Sellers (in connection with the OGP Business only) and the OGP Subsidiaries
maintained (or had maintained on their behalf, and including through
self-insurance) and had in force general liability insurance including coverage
for product liability claims in amounts which at the time of issuance were on
terms and conditions usual and customary for similarly situated companies and
which, to the extent such coverage was available on commercially reasonable
terms, did not exclude liability 

 

18

 

for asbestos
claims and no claim has ever been asserted under any of said insurance in
respect of any claimed asbestos liability; and (iii) no person has a valid
Asbestos Claim against the Asset Sellers (in connection with the OGP Business
only), the OGP Subsidiaries or the JV Companies, and no fact or circumstance
exists which could reasonably be expected to result in an Asbestos Claim, which
in the opinion of ABB is reasonably likely to succeed on the merits, being
asserted against the Asset Sellers (in connection with the OGP Business only),
the OGP Subsidiaries or the JV Companies.

 

SECTION 3.09.                 Material Contracts.  (a) 
Section 3.09(a) of the Disclosure Schedule lists each of the
following contracts and agreements, whether written or oral, in force as of the
date hereof to which any OGP Subsidiary or Asset Seller is a party (but only to
the extent such contracts and agreements relate to the OGP Business and,
subject to Section 5.09, would be transferred to Purchaser or an OGP
Purchaser hereunder) (together with the Business IP Licenses and the Key
Contracts, the “Material Contracts”):

 

(i)                                     all contracts or
agreements relating to the External Debt Contracts, the Capital Modernization
Program and the Securitization Programs where an OGP Subsidiary or an Asset
Seller is a borrower from a third party that is not an Affiliate having an
aggregate outstanding amount thereunder;

 

(ii)                                  all contracts,
grants, subsidies or other agreements with any Governmental Authority providing
for payments to or from such Governmental Authority or to or from an OGP
Subsidiary or an Asset Seller in excess of $1,000,000 individually, or
$5,000,000 in the aggregate, over the remaining life of such contracts, grants,
subsidies or other agreements;

 

(iii)                               all contracts or
agreements that limit or purport to limit the ability of any OGP Subsidiary or
an Asset Seller to compete in any line of business or with any Person or in any
geographic area or during any period of time that will not expire upon
consummation of the transactions contemplated by the Transaction Agreements and
that are not cancelable without penalty or further payment and without more
than 30 days’ notice;

 

(iv)                              all contracts or
agreements relating to the retention of an OGP Subsidiary or an Asset Seller,
other than with another OGP Subsidiary or Asset Seller with respect to a
project, in connection with a project involving payments or receipts over the
remaining term of such contract or agreement in excess of $15,000,000 that will
not expire upon consummation of the transactions contemplated by the Transaction
Agreements and that are not cancelable without penalty or further payment and
without more than 30 days’ notice;

 

(v)                                 all contracts or
agreements with an independent contractor or consultant, other than with
another OGP Subsidiary or Asset Seller with respect to a project, relating to a
contract described in clause (iv) above involving payments over the remaining
term of such contract or agreement in excess of $10,000,000 that is not
cancelable without penalty or further payment and without more than 30 days’
notice;

 

19

 

(vi)                              all contracts or
agreements which during the past five (5) years have been registered with any
Governmental Authority pursuant to any competition Law;

 

(vii)                           all contracts or agreements
relating to the acquisition by an OGP Subsidiary or Asset Seller of an interest
in, or the merger or consolidation of an OGP Subsidiary with, a Person other
than another OGP Subsidiary executed after the date five (5) years prior to the
date of this Agreement;

 

(viii)                        all contracts or agreements
relating to the formation or governance of any partnership, joint venture,
consortium or other unincorporated association, body or undertaking in which an
OGP Subsidiary or Asset Seller relating to the OGP Business is to participate
with any other person in any business or investment other than in connection
with sales projects in the ordinary course of business for consideration with
respect to the investment in such entity aggregating not more than $1,000,000;
and

 

(ix)                                all hire purchase or
lease contracts for assets with an aggregate outstanding liability in excess of
$1,000,000 individually or $10,000,000 in the aggregate.

 

(b)                                 Except
as set forth in Section 3.09(b) of the Disclosure Schedule, each Material
Contract (i) is valid and binding on the OGP Subsidiary or Asset Seller
party to such contract and, to the knowledge of ABB, the counterparties thereto
and (ii) is in full force and effect. 
To ABB’s knowledge, none of the counterparties to any of the Material
Contracts has given notice of its intention to terminate, repudiate or disclaim
a Material Contract to which it is a party. 
Except as set forth in Section 3.09(b) of the Disclosure Schedule,
none of the OGP Subsidiaries or the Asset Sellers and, to the knowledge of ABB,
none of the counterparties thereto is in material breach of, or material
default under, any Material Contract, and to ABB’s knowledge there are no facts
or circumstances that could reasonably be expected to result in such a breach or
default, except for such breaches or defaults as would not give rise to the
right of a party not in breach or default to terminate such agreement or to
claim damages in excess of $500,000.

 

(c)                                  True
and complete copies of each Key Contract and the contracts listed in response
to Section 3.09(a)(i) have been provided to Purchaser and are deemed to
form part of the Disclosure Schedule.

 

(d)                                 None
of the OGP Subsidiaries or Asset Sellers relating to the OGP Business is a
party to any securitization or similar program other than the Securitization
Programs.

 

(e)                                  All
material contracts or agreements (other than those contracts and agreements
terminated pursuant to Section 5.10) entered into between an OGP
Subsidiary or an Asset Seller relating to the OGP Business and ABB or an
Affiliate of ABB (other than an Affiliate which forms part of the OGP Business)
were, when entered into, on arm’s-length commercial terms.

 

20

 

SECTION 3.10.                 Intellectual Property.  (a) 
Section 3.10(a) of the Disclosure Schedule sets forth a list
of all (i) patents, patent applications, trademark and service mark
registrations and applications and copyright registrations included in the
Business Intellectual Property and (ii) Business IP Licenses.

 

(b)                                 Except
as set forth in Section 3.10(b) of the Disclosure Schedule, the registered
Business Intellectual Property, which registered Business Intellectual Property
would reasonably be expected to have a value in excess of $500,000, is valid
and enforceable and has not been adjudged invalid or unenforceable.

 

(c)                                  Except
as set forth in Section 3.10(c) of the Disclosure Schedule, there are no
Actions against or involving any OGP Subsidiary, any Asset Seller or any IPR
Assignor, including claims or opposition brought by an employee of an OGP
Subsidiary, Asset Seller or IPR Assignor relating to the OGP Business, that are
pending before any Governmental Authority alleging that the use of the Business
Intellectual Property infringes upon or misappropriates the Intellectual
Property of third parties or questions the title, validity, enforceability or
entitlement of the Business Intellectual Property, which individual Action
would reasonably be expected to have a value in excess of $500,000 or all
Actions in the aggregate would reasonably be expected to have a value in excess
of $2,000,000.  To the knowledge of ABB,
no third party is infringing upon the Business Intellectual Property in any
material respect except as set forth in Section 3.10(c) of the Disclosure
Schedule.  To the knowledge of ABB and
except as set forth in Section 3.10(c) of the Disclosure Schedule:  (i) the conduct of the OGP Business
does not infringe or misappropriate the Intellectual Property of any third
party and (ii) no fact or circumstance specific to the OGP Business exists
which could reasonably be expected to give rise to such a claim.

 

(d)                                 The
consummation of the transactions contemplated by this Agreement and the Related
Agreements will not result in the termination or impairment of any of the
Business Intellectual Property or Business IP Licenses, which impairment or
termination would reasonably be expected to have a value in excess of $500,000.

 

(e)                                  All
renewal, maintenance and other fees due and payable by the OGP Subsidiaries, the
Asset Sellers and the IPR Assignors to Governmental Authorities in respect of
the Business Intellectual Property prior to the Closing have been or will be
paid prior to the Closing.

 

(f)                                    All
material trade secrets and technical know-how owned by the OGP Subsidiaries and
used in the OGP Business are adequately and properly documented in accordance
with reasonable industry standards.  To
the knowledge of ABB, no OGP Subsidiary, Asset Seller or IPR Assignor has disclosed
or is contractually obligated to disclose any material trade secret or
confidential technical know-how related to the OGP Business to any Person other
than its employees, agents, authorized representatives or licensees who are
bound by obligations of confidence, or except in the ordinary course of
business on the condition that the disclosure is subject to obligations of
confidence, or as required by Governmental Authorities or by Law.

 

SECTION 3.11.                 Real Property.  (a) 
With respect to the Owned Real Property, except as would not reasonably
be expected to have a Material Adverse Effect:

 

21

 

(i)                                     each OGP
Subsidiary and Asset Seller indicated in Section 3.11 of the Disclosure
Schedule has or will have at the Closing good and marketable fee simple
title to the applicable Owned Real Property subject only to the Permitted
Encumbrances;

 

(ii)                                  there are no Actions
affecting any of the Owned Real Property pending or, to ABB’s knowledge,
threatened in writing, which would reasonably be expected to materially impair
the value or materially interfere with the present use of the Owned Real
Property; and

 

(iii)                               no OGP Subsidiary or
Asset Seller listed in Section 3.11 of the Disclosure Schedule has
received written notice of a violation of any Law.

 

(b)                                 With
respect to the Leased Real Property, except as would not reasonably be expected
to have a Material Adverse Effect:

 

(i)                                     each OGP
Subsidiary and Asset Seller indicated in Section 3.11 of the Disclosure
Schedule has or will have at the Closing valid leasehold interests in the
applicable Leased Real Property subject only to Permitted Encumbrances;

 

(ii)                                  there are no Actions
affecting any of the Leased Real Property pending or, to ABB’s knowledge,
threatened in writing which would reasonably be expected to materially impair
the value or materially interfere with the present use of the Leased Real
Property;

 

(iii)                               each of the leases
(collectively, the “Leases”) relating to the Leased Real Property is
valid and binding on the applicable OGP Subsidiary or Asset Seller indicated in
Section 3.11 of the Disclosure Schedule and, to the knowledge of ABB,
the counterparties thereto, and is in full force and effect;

 

(iv)                              no OGP Subsidiary or
Asset Seller listed in Schedule 3.11 has received written notice of any
event of default under any of the Leases and, to ABB’s knowledge, no event of
default exists under any of the Leases with respect to any counterparty under
the Leases; and

 

(v)                                 no OGP Subsidiary has
any contingent liability in respect of any leasehold property in England and
Wales other than the Leased Real Property.

 

(c)                                  The
information set forth in Section 3.11 of the Disclosure
Schedule under the following headings is true and accurate in all material
respects with respect to Owned and Leased Real Property:  “No.”, “Owned/Leased”,
“Asset
Seller or OGP Subsidiary as Owner or Tenant (as applicable)”, “Other
Occupant(s) of Property”, “Legal
owner of land & building”, “Site Address”, “Country”, “Nature of
Operations”, “Land (area in sqm)”, “Building/Facility (area in sqm)”, “%
of sqm Occupied”, “Sqm Occupied”,
“Description of Lease (if Leased Real Property)”, “Expiration
Date of Lease (subject to the terms of the lease)” and “Estimated Annual
Occupancy Cost”.  The OGP Real Property
comprises all of the land and premises owned, occupied or used by, or in the
possession of, the OGP Subsidiaries necessary for the operation of the OGP
Business as such business is operated as of the date hereof.  Except for information with respect to
“Expiration Date of Lease (subject to the terms of the lease)”, notwithstanding
the 

 

22

 

above, the Parties agree that there
will be no damages to Purchaser pursuant to this Section 3.11(c); provided
that, from and after the Closing, Purchaser may continue to use any Owned or
Leased Real Property in the manner in which such property was used prior to the
Closing and pursuant to the same terms and conditions as were actually in
existence prior to the Closing.

 

SECTION 3.12.                 Taxes.  Except as set forth in Section 3.12 of
the Disclosure Schedule:

 

(a)                                  the
OGP Subsidiaries and the Asset Sellers relating to the OGP Business have filed
all material Tax Returns that they were required to file and have maintained
all records necessary to calculate any pre-Closing Tax liability and any Tax
payable on the disposal of any of the Purchased Assets.  All such Tax Returns were correct and
complete in all material respects.  All
material Taxes owed by the OGP Subsidiaries or relating to the OGP Business
(whether or not shown on any Tax Return) have been paid or adequate reserves
have been established with respect thereto. 
To ABB’s knowledge, no claim has ever been made by an authority in a
jurisdiction where an OGP Subsidiary or an Asset Seller with respect to the OGP
Business does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction.  There are no liens
or security interests on any assets of the OGP Business or the assets of any of
the OGP Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Tax except for liens for Taxes, assessments and
governmental charges or levies not yet due and payable or which are being
contested in good faith in proper proceedings;

 

(b)                                 the
OGP Subsidiaries and the Asset Sellers relating to the OGP Business have
withheld and paid all material Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party;

 

(c)                                  there
is no dispute or claim concerning any Tax liability of the OGP Subsidiaries or
with respect to the OGP Business either (i) claimed or raised by any
authority in writing or (ii) as to which any of the Sellers and the
directors and officers (and employees responsible for Tax matters) of the OGP
Subsidiaries or Asset Sellers relating to the OGP Business has knowledge based
upon personal contact with any agent of such authority;

 

(d)                                 no
power of attorney currently in force has been granted to a Person by the OGP Subsidiaries
or the Asset Sellers relating to the OGP Business with respect to any Tax
matter relating to the OGP Subsidiaries or the OGP Business;

 

(e)                                  the
OGP Subsidiaries and the Asset Sellers relating to the OGP Business have not
waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency;

 

(f)                                    none
of the OGP Subsidiaries has filed a consent under Section 341(f) of the
Code concerning collapsible corporations. 
None of the OGP Subsidiaries is required to include in income any
adjustment pursuant to Section 481(a) of the Code by reason of a change in
accounting method or has an application pending with the IRS or any other 

 

23

 

Taxing Authority requesting permission for any change in accounting
method.  None of the OGP Subsidiaries or
Asset Sellers relating to the OGP Business has made any payments, is obligated
to make any payments, or is a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under
Section 162(m) or 280G of the Code. 
No acceleration of the vesting schedule for any property that is
substantially nonvested within the meaning of the regulations under
Section 83 of the Code will occur in connection with the transactions
contemplated under this Agreement.  None
of the OGP Subsidiaries has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.  None of the assets of the OGP Business that
are being acquired from foreign persons is a U.S. real property interest as
defined in Section 897(c)(i) of the Code. 
None of the OGP Subsidiaries is currently a party to any Tax allocation
or Tax sharing agreement or has an obligation to make a payment under such an
agreement.  None of the OGP Subsidiaries
has been a member of an Affiliated Group filing a consolidated U.S. federal
income Tax Return (other than an Affiliated Group the common parent of which is
a member of the Sellers’ group).  To
ABB’s knowledge, none of the OGP Subsidiaries or Asset Sellers relating to the
OGP Business will be obligated to pay any amount for the Taxes of Seller’s
consolidated group or any other Person (other than an OGP Subsidiary) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local or foreign law) as a transferee, successor, by contract or otherwise;

 

(g)                                 the
unpaid Taxes of the OGP Subsidiaries (i) did not, as of the most recent
fiscal month end, exceed the reserve for Tax liability (other than any reserve
for deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the most recent balance sheet (other than
in any notes thereto) and (ii) do not exceed that reserve as adjusted for
the passage of time through the Closing Date in accordance with the past custom
and practice of the OGP Subsidiaries in filing their Tax Returns;

 

(h)                                 none
of the OGP Subsidiaries (i) to ABB’s knowledge, has a branch, permanent
establishment or office or fixed place of business outside the United States
other than in its country of organization and (ii) has a material item of
income or gain reported for financial accounting purposes in a Pre-Closing
Taxable Period or otherwise attributable to a Pre-Closing Taxable Period which
is not reserved for on the Final Effective Date Balance Sheet and which is
required to be included in taxable income for a post-Closing period;

 

(i)                                     to
ABB’s knowledge, none of the OGP Subsidiaries has constituted a “distributing
corporation” or a “controlled corporation” within the meaning of
Section 355 of the Code in a distribution described under Section 355
of the Code (i) in the two years prior to the date of this Agreement or (ii) as
part of a “plan” or “series of distributions” in connection with this
Agreement, the other transaction documents or the transaction under
Section 355(e) of the Code;

 

(j)                                     to
ABB’s knowledge, none of the assets of the OGP Business is (i) tax-exempt use
property under Section 168(h) of the Code, (ii) tax-exempt bond
financed 

 

24

 

property under Section 168(g) of the Code, (iii) limited use
property under Revenue Procedure 76-30, (iv) treated as owned by any other
person under Section 168 of the Code, or (v) located in a country
outside the relevant OGP Subsidiary or Asset Seller’s country(ies) of
incorporation.  None of the OGP
Subsidiaries is a party (other than as an investor) to any industrial
development bond;

 

(k)                                  none
of the Purchased Assets is a, and none of the OGP Subsidiaries owns shares of
any, controlled foreign corporation as described in Section 957 of the
Code (except for the OGP Subsidiaries). 
To ABB’s knowledge, none of the OGP Subsidiaries is a passive foreign
investment company as described in Section 1297 of the Code or a foreign
investment company as described in Section 1246 of the Code;

 

(l)                                     none
of the OGP Subsidiaries which are organized outside the United States (i) has
any United States real property interests as described in Section 897 of
the Code or (ii) generates material amounts of Subpart F income as described in
Section 952 of the Code;

 

(m)                               none
of the OGP Subsidiaries which are organized outside the United States has made
an election under U.S. law with respect to its status or classification for
U.S. federal income tax purposes;

 

(n)                                 to
ABB’s knowledge, none of the OGP Subsidiaries which are organized outside the
United States is engaged in the conduct of a trade or business in the United
States or has a branch, office or fixed place of business or permanent
establishment in the United States;

 

(o)                                 ABB
represents that the relevant Seller is eligible to make an election under
Section 338(h)(10) of the Code (and any comparable election under state or
local tax law) (the “338(h)(10) Election”) with respect to the OGP
Subsidiaries organized in the United States;

 

(p)                                 no transaction has taken place within the last six years for which UK Treasury
consent is required under Section 765 of the Income and Corporation Taxes
Act of 1988;

 

(q)                                 to
ABB’s knowledge, all documents the enforcement in which any of the OGP
Subsidiaries or Asset Sellers relating to the OGP Business is interested have
been duly stamped and all such duty, interest and penalties have been duly
paid;

 

(r)                                    between
the date hereof and the Closing Date, neither ABB nor any of the OGP
Subsidiaries has entered into or amended any agreement or settlement with any
Taxing Authority; and

 

(s)                                  with
respect to the reorganization of the entities through which the OGP Business is
carried out in Norway, which took place in December 2002, the Tax Returns
of the OGP Subsidiaries, the Asset Sellers in relation to the OGP Business and
the JV Companies involved in the reorganization reflected the transfers carried
out as transfers 

 

25

 

subject to Tax and no election has been made to treat these transfers
not subject to Tax under Sections 11-21 of the General Tax Act of Norway (and
associated transactions).

 

SECTION 3.13.                 Employee Benefit Matters.  (a) 
With respect to each employee benefit plan, program, arrangement,
agreement or contract (including any “employee benefit plan”, as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)) and each incentive, change of control, bonus,
medical, option, deferred compensation, vacation, cafeteria, severance,
termination, disability plan, program, agreement, policy or arrangement
maintained or contributed to by any of the OGP Subsidiaries for the benefit of
any current employees of the OGP Subsidiaries (collectively, the “OGP
Employees”) or former employees of the OGP Subsidiaries (collectively, the
“OGP Former Employees”) or for the benefit of the Transferred Employees
or with respect to which the OGP Subsidiaries could reasonably be expected to
incur any material liability under Title IV of ERISA or Section 412 of the
Code or the OGP Assets could be subject to a material lien or other material
impairment, and which is subject to or governed by the Law of the United States
or any state or commonwealth of the United States (collectively, the “U.S.
Employee Plans”), ABB has made available to Purchaser, where applicable, a
true and correct copy of (i) the most recent annual report (Form 5500) filed
with the IRS, (ii) each such U.S. Employee Plan, (iii) each trust agreement
relating to such U.S. Employee Plan, (iv) the most recent summary plan description
for each U.S. Employee Plan for which a summary plan description is required,
and (v) the most recent determination letter, if any, issued by the IRS with
respect to any U.S. Employee Plan intended to be qualified under
Section 401(a) of the Code.  Section 3.13(a)
of the Disclosure Schedule sets forth each material U.S. Employee Plan.

 

(b)                                 Except
as otherwise set forth in Section 3.13(b) of the Disclosure Schedule, none
of the U.S. Employee Plans (i) is a “multiemployer plan”, within the meaning of
Section 3(37) of ERISA, or a “single-employer plan”, within the meaning of
Section 4001(a)(15) of ERISA, for which any of the OGP Subsidiaries could
incur material liability under Section 4063 or 4064 of ERISA or is
otherwise subject to Title IV of ERISA or Section 412 of the Code or
(ii) provides or promises to provide retiree medical or life insurance
benefits.  None of the OGP Subsidiaries
has maintained, sponsored or contributed to any “multiemployer plan” within the
six-year period prior to the date hereof.

 

(c)                                  With
respect to the U.S. Employee Plans, no event has occurred and there exists no
condition or set of circumstances in connection with which any of the OGP
Subsidiaries or any of the Asset Sellers could be subject to any liability
under the terms of or as a result of such U.S. Employee Plans, ERISA, the Code
or any other applicable Law which would reasonably be expected to have a
Material Adverse Effect.

 

(d)                                 ABB
has made available to Purchaser (i) copies of all bonus, incentive, stock
option, restricted stock, stock appreciation rights, deferred compensation,
severance plans or agreements and any forms of employment agreements of ABB or
any of the OGP Subsidiaries relating to the OGP Employees employed in the
United States or any person who has been offered employment in the OGP Business
and (ii) copies of all plans, programs, agreements and other arrangements of
ABB, any of the OGP Subsidiaries or any of the Asset Sellers with or relating
to the OGP Employees or the Transferred Employees employed in the United States
which contain change of control provisions.

 

26

 

(e)                                  Section 3.13(e)
of the Disclosure Schedule sets forth each material Non-U.S. Plan not
required under applicable Law.  In
addition to the foregoing, with respect to each Non-U.S. Plan:

 

(i)                                     all
employer and employee contributions to each Non-U.S. Plan (if applicable) have
been made or, if applicable, accrued in accordance with applicable Law and the
terms of such Non-U.S. Plan, and a pro  rata contribution
for the period prior to and including the Closing Date has been made or accrued
except for a failure to comply with such matters that would not reasonably be
expected to have a Material Adverse Effect;

 

(ii)                                  each
Non-U.S. Plan required to be registered has been registered and maintained in
good standing with applicable regulatory and Tax authorities (and, to the
knowledge of ABB, no circumstances have occurred which could reasonably be
expected to result in tax approval being withdrawn).  Each Non-U.S. Plan has been operated in material compliance with
all applicable Laws;

 

(iii)                               ABB
has made available to Purchaser, where applicable, true and complete copies of
all Non-U.S. Plans, including, without limitation, all material information
relating to benefits payable or prospectively payable under each Non-U.S. Plan
(including supplemental benefits) membership data, most recent actuarial
valuations and all material plan summaries and announcements to members with
respect to OGP Employees, OGP Former Employees and Transferred Employees; and

 

(iv)                              ABB
has made available to Purchaser a complete and accurate copy of all the
material documentation (including the trust deeds, rules and booklets)
governing each Non-U.S. Plan.

 

(f)                                    Each
of the U.S. Employee Plans which is intended to be tax-qualified under
Section 401(a) or 401(k) of the Code has been determined by the IRS to be
so qualified and such determination has not been modified, revoked or limited,
and, to the knowledge of ABB, no circumstances have occurred which could
reasonably be expected to have a Material Adverse Effect.

 

(g)                                 Except
as otherwise set forth in Section 3.13(g) of the Disclosure Schedule, no
plan exists which could result in the payment of money or any other property or
rights, or accelerate or provide any other rights or benefits, to OGP
Employees, OGP Former Employees or Transferred Employees (or other current or
former service providers thereto) that would not have been required but for the
transactions contemplated by this Agreement.

 

(h)                                 There
are no pending suits, actions, claims, arbitrations, administrative or
governmental investigations or, to the knowledge of ABB, threatened in writing,
alleging any breach of the terms of any U.S. Employee Plan or Non-U.S. Plan or
of any fiduciary duties thereunder or violation of any applicable Law with
respect to the operation of such plans (other than routine benefit claims).

 

(i)                                     Purchaser
acknowledges that (i) the representations and warranties contained in this
Section 3.13 and Section 3.14 are the only representations and
warranties being 

 

27

 

made with
respect to employee benefit matters related to this Agreement or its subject
matter and (ii) no other representation contained in this Agreement shall apply
to any such matters and no other representation or warranty, express or
implied, is being made with respect thereto.

 

SECTION 3.14.                 Labor Matters.  (a) 
Except as set forth in Section 3.14(a) of the Disclosure Schedule,
(i) there are no grievances outstanding against any of the OGP Subsidiaries or
any of the Asset Sellers primarily relating to the OGP Business under any
collective bargaining agreement or other union contract applicable to the OGP
Employees or the Transferred Employees; (ii) there are no material unfair labor
practice complaints pending against any of the OGP Subsidiaries or any of the
Asset Sellers primarily relating to the OGP Business before the National Labor
Relations Board (or similar non-United States Governmental Authority); (iii)
there is no strike or lockout, or, to the knowledge of ABB, threatened in
writing, by or with respect to the OGP Employees or the Transferred Employees;
and (iv) none of the OGP Subsidiaries, ABB or any of its Affiliates or the
Asset Sellers with respect to the OGP Business or, to the knowledge of ABB, the
JV Companies (A) has any agreements or arrangements with or recognize a trade
union, works council, staff association or other body representing any of the
OGP Employees or the Transferred Employees or (B) are involved in any ongoing
industrial or trade dispute or any dispute or negotiation regarding a material
claim with any OGP Employees, Transferred Employees or OGP Former Employees or,
to the knowledge of ABB, any employee of a JV Company, and, to the knowledge of
ABB, there are no circumstances which could reasonably be expected to give rise
to any such dispute.

 

(b)                                 Except
as otherwise set forth in Section 3.14(b) of the Disclosure Schedule,
during the twelve-month period ending on the date of this Agreement, none of
the OGP Subsidiaries or the Asset Sellers with respect to the OGP Business has
(i) given notice of multiple redundancies to, or started consultations with,
appropriate representatives under Redundancy Laws or failed to comply in any
material respects with its notification or consultation obligations with
appropriate representatives under the Redundancy Laws or (ii) been a party to a
relevant transfer (as defined in the Transfer Regulations) or failed to comply
in all material respects with a duty to inform and consult appropriate
representatives under such Law.

 

(c)                                  Except
as otherwise set forth in Section 3.14(c) of the Disclosure Schedule,
there is no contract of employment, service agreement or agreement for services
with any OGP Employee or Transferred Employee which cannot be terminated by the
relevant OGP Subsidiary or Asset Sellers by the giving of six months’ or less
notice of such termination or which provides for any payment on termination in
excess of six months’ base salary other than for severance or termination
payments due under any applicable Law.

 

(d)                                 Except
as set forth in Section 3.14(d) of the Disclosure Schedule or as
otherwise required by applicable Law or contract, from December 31, 2002
until the date of this Agreement, none of ABB nor any of its Affiliates has
increased, or made provisions to increase, the compensation or benefits payable
to OGP Employees or Transferred Employees in excess of two percent in the
aggregate of the value of such compensation or benefits on December 31,
2002.

 

28

 

(e)                                  Except
as set forth in Section 3.14(e) of the Disclosure Schedule, none of the
OGP Subsidiaries or the Asset Sellers has made a written offer of employment to
any person, which has yet to be accepted or declined, offering such person an
annual base salary greater than $100,000.

 

SECTION 3.15.                 Environmental Matters.  (a) 
Except as set forth in Section 3.15(a) of the Disclosure Schedule:

 

(i)                                     The OGP
Subsidiaries and, with respect to the OGP Assets, the Asset Sellers are and
have been for the last three years in compliance in all material respects with
and have no liability under any and all applicable Environmental Laws and
Environmental Agreements and, in the last three years, have not received any
written notification of any such liability or lack of compliance which has not
been fully resolved.  To ABB’s
knowledge, no fact or circumstance specific to the OGP Business, the OGP Real
Properties, the OGP Assets or the Former Properties exists which could
reasonably be expected to give rise to any non-compliance with or liability
under any applicable Environmental Law or Environmental Agreement.

 

(ii)                                  (A)  The OGP Subsidiaries and, with respect to
the OGP Assets, the Asset Sellers have obtained and are complying in all
material respects, and have complied in all material respects for the last
three years, with all applicable Environmental Permits, and none of the OGP
Subsidiaries or, with respect to the OGP Assets, the Asset Sellers, has
received any written notification, in the last three years, that any
Environmental Permit is or will be cancelled, terminated or not renewed, or
amended or renewed with one or more conditions that are more onerous than
current permit conditions.

 

(B)                                Without prejudice to
part (A) of this clause (ii), to ABB’s knowledge there are no facts or
circumstances specific to the OGP Business, the OGP Real Properties, the OGP
Assets or the Former Properties indicating that in the next two years any
Environmental Permit will be cancelled, terminated or not renewed, or amended
or renewed with one or more conditions that are more onerous than current
permit conditions.

 

(C)                                All Environmental
Permits associated with the OGP Assets are capable of transfer in substantially
the same form to Purchaser.

 

(iii)                               There are no applicable
Environmental Permits, Environmental Laws or legally enforceable agreements
between an OGP Subsidiary or, with respect to the OGP Assets, an Asset Seller,
and a Governmental Authority, that, by their express terms or provisions,
require, or will require within the next two years, any specific capital
upgrade other than as provided for in the Financial Statements.

 

(iv)                              None of the OGP
Subsidiaries or, with respect to the OGP Assets, the Asset Sellers is a party
to or subject to any Environmental Claim, and none of the OGP Real Property is
the subject of any Environmental Claim, and there are no such Environmental
Claims pending or, to ABB’s knowledge, threatened in writing.  To ABB’s knowledge, no fact or circumstance
specific to the OGP Business, the OGP Real 

 

29

 

Properties, the OGP Assets or the Former Properties exists which could
reasonably be expected to give rise to such an Environmental Claim within the
next two years.

 

(v)                                 None of the OGP Real
Properties or OGP Assets that are located in the United States or, to ABB’s
knowledge, Former Properties that are located in the United States is listed on
the National Priorities List or the Comprehensive Environmental Response,
Compensation and Liability Information System under the Federal Comprehensive
Environmental Response, Compensation and Liability Act or any analogous state
list, and none of the OGP Real Properties or OGP Assets that are not located in
the United States, or, to ABB’s knowledge, Former Properties that are not
located in the United States, is listed on any non-U.S. regulatory register or
list identifying such property as being actually contaminated by Hazardous Materials,
including any such register or list maintained pursuant to the United Kingdom’s
Environmental Protection Act 1990.

 

(vi)                              None of the OGP
Subsidiaries has disposed or arranged for the disposal of any Hazardous
Material (A) at any non-OGP Real Property in violation of applicable
Environmental Law or (B) at any real property that is listed on the National
Priorities List.

 

(vii)                           None of the OGP Real
Property or OGP Assets contains any friable asbestos that requires removal
under any applicable Environmental Law, and none of the OGP Real Property or
OGP Assets contains any friable asbestos that requires encapsulation under any
applicable Environmental Law except for such asbestos that has been
encapsulated in accordance with applicable Environmental Law.

 

(viii)                        There have not been and there
are not now any Releases into the Environment of any Hazardous Material (A) in
violation of applicable Environmental Law, Environmental Permits or
Environmental Agreements, (B) that to ABB’s knowledge require Remedial Action
by any Governmental Authority under Environmental Law or (C) that are the
subject of an Environmental Claim against an OGP Subsidiary or any Asset Seller
from or at any OGP Real Property or the OGP Assets or, during the occupation or
use of the OGP Subsidiaries thereof, any of the Former Properties except where
such Releases have been remediated in accordance with applicable Environmental
Law and any liability with respect to such Releases has been fully satisfied.

 

(ix)                                All material
environmental audit reports, assessments, studies or tests, insurance
appraisals, and health and safety reports relating to the OGP Business, that
have been generated in the past three years and that are in the possession of
ABB, have been supplied to the Purchaser.

 

(b)                                 Purchaser
acknowledges that, except for representations and warranties under
Sections 3.05 (Financial Information) and 3.08 (Litigation) above, (i) the
representations and warranties contained in this Section 3.15 are the only
representations and warranties being made with respect to compliance with or
liability under any Environmental Law, Environmental Permit or Environmental
Agreement and (ii) no other representation or warranty contained in 

 

30

 

this Agreement
shall apply to any such matters and no other representation or warranty,
express or implied, is being made with respect thereto.

 

SECTION 3.16.                 Assets.  (a) 
Except as set forth in Section 3.16(a) of the Disclosure Schedule,
the OGP Subsidiaries and the Asset Sellers legally and beneficially own, and
the IPR Assignors legally own, lease, license or otherwise have the legal and
beneficial right to use, or at the Closing will own, lease, license or
otherwise have the legal and beneficial right to use, all the assets primarily
used or held for use in the conduct of the OGP Business, including the assets
currently subject to the Capital Modernization Program and the Purchased Assets
(the “OGP Assets”) free and clear of all Encumbrances other than Permitted
Encumbrances.  Except as set forth in
Section 3.16 of the Disclosure Schedule, (i) the OGP Subsidiaries and the
Asset Sellers have good, valid and marketable title to or valid leasehold,
license or other contractual interests in the OGP Assets free and clear of all
Encumbrances other than Permitted Encumbrances and (ii) where capable of
possession, the OGP Assets are under the control of the OGP Subsidiaries or the
Asset Sellers, except for OGP Assets that, in the ordinary course of business,
are placed under the control of customers, suppliers, subcontractors or other
third parties having commercial relations with the OGP Business.  ABB Oleo e Gás, Manutencão e Modificação
Ltda. and ABB Oleo & Gás Ltda. collectively own all of the servers,
routers, switches, hubs and all ancillary cabling related thereto used
exclusively by the OGP Business in Brazil, free and clear of all Encumbrances
other than Permitted Encumbrances.

 

(b)                                 Except
for the Excluded Assets, and to the extent made available pursuant to the
Related Agreements, the sale of the Shares and the Purchased Assets to
Purchaser pursuant to this Agreement will convey to Purchaser (directly or
indirectly) all of the tangible and intangible property primarily used by the
OGP Subsidiaries and the Asset Sellers (whether owned, leased or held under
license by the OGP Subsidiaries or the Asset Sellers) in connection with the
operation of the OGP Business as conducted by the OGP Subsidiaries and the
Asset Sellers on the date hereof including all tangible assets and properties
of the OGP Subsidiaries and the Asset Sellers relating to the OGP Business
reflected in the most recent balance sheet included in the Financial Statements
and assets and properties acquired since December 31, 2002 in the conduct of
the OGP Business by the OGP Subsidiaries and the Asset Sellers but other than
assets and properties disposed of since such date without violation of the
terms and provisions of this Agreement.

 

(c)                                  Except
as set forth in Section 3.16(c) of the Disclosure Schedule, the OGP Assets
together with the rights granted to Purchaser pursuant to the Related
Agreements are sufficient (taken together with the Shares) to enable Purchaser
to conduct the OGP Business immediately after the Closing in a manner
consistent with the conduct of the OGP Business on the date of this Agreement.

 

SECTION 3.17.                 Insurance.  True and complete copies of policy
documentation relating to all insurance policies, other insurance arrangements
and other contracts or arrangements for the transfer or sharing of insurance
risks held by an OGP Subsidiary or an Asset Seller primarily relating to the
OGP Business (including any currently effective policies which provide cover on
a losses occurring basis), in each case with a sum insured or limit of liability
in excess of $5 million, in force on the date hereof or, if no longer in force,
under which any pending claim has been made, are included in Section 3.17
of the Disclosure Schedule.  All 

 

31

 

premiums due on such
policies have been paid by the OGP Subsidiaries or the Asset Sellers, as the
case may be, and the OGP Subsidiaries or the Asset Sellers, as the case may be,
are otherwise in compliance in all material respects with the terms and
provisions of such policies.  A true and
complete list of all outstanding claims under such policies in excess of $5
million is set forth in Section 3.17 of the Disclosure Schedule.  Except as set forth in Section 3.17 of
the Disclosure Schedule, none of the Asset Sellers relating to the OGP Business
or OGP Subsidiaries maintain any self-insurance arrangement with respect to the
OGP Business or the Purchased Assets in excess of $1,000,000.  To the knowledge of ABB, (i) none of the OGP
Subsidiaries or the Asset Sellers (with respect to the OGP Business) has taken
any action or omitted to take any action that is not consistent with past
practice which could reasonably be expected to materially prejudice the ability
to obtain insurance in the future on substantially the same terms as the terms
of the insurance policies in place with respect to the OGP Business as of the
date hereof, and (ii) all notices of claim required to be given under the terms
of the existing insurance policies of the OGP Business in excess of (A) $500,000
in respect of individual claims or (B) $1,000,000 in the aggregate, as the case
may be, have been given.

 

SECTION 3.18.                 Brokers.  ABB is solely responsible for the fees and
expenses of all brokers, finders or investment bankers appointed by ABB and
payable in connection with any brokerage, finder’s or other fees or commissions
payable by it or any Affiliate of ABB in connection with the transactions
contemplated by this Agreement and the Related Agreements.

 

SECTION 3.19.                 Inventory.  To ABB’s knowledge, in operating the OGP
Business the Asset Sellers have not agreed to supply defective or unsafe goods
or goods which fail to materially comply with their terms of sale.

 

SECTION 3.20.                 Constitution; Registers; Powers of
Attorney.  (a)  Each OGP Subsidiary and Asset Seller is
operating its business in all material respects in accordance with its
organizational documents.  True and
complete copies of the relevant organizational documents of each Material
Subsidiary have been provided to Purchaser and are deemed to form part of the
Disclosure Schedule.

 

(b)                                 Each
register, minute book and other book required by Law to be kept by the OGP
Subsidiaries or Asset Sellers relating to the OGP Business has been properly
kept in all material respects and contains a complete and accurate record of
the matters which it is required by the relevant Law.  No notice has been received or, to the knowledge of ABB,
allegation made that a register or book is incorrect or should be rectified in any
material respect.

 

(c)                                  No
OGP Subsidiary has given any power of attorney in effect as of the date of this
Agreement by which a person (other than a director, officer or employee) may
enter into an agreement, arrangement or obligation on behalf of an OGP
Subsidiary, except for powers of attorney granted to tax and legal advisers in
the ordinary course of business.

 

SECTION 3.21.                 Related Party Transactions.  Except as set forth in Section 3.21 of
the Disclosure Schedule or pursuant to any employment related agreements
or arrangements, none of ABB, the Sellers or the OGP Subsidiaries have entered
into any agreement, arrangement or transaction (legally enforceable or not) in
excess of $100,000 with any director of any OGP Subsidiary or of any Asset
Seller who is expected to be a Transferred Employee or with any 

 

32

 

relative or spouse of
such Person, or any such agreement, arrangement or transaction in which any
such director, relative or spouse has a material interest.

 

SECTION 3.22.                 Insolvency; Winding Up.  Except as set forth in Section 3.22 of
the Disclosure Schedule, as of the date of this Agreement, (i) no Order has
been made, petition presented or resolution passed for the winding up of any of
the OGP Subsidiaries or for the appointment of a provisional liquidator to any
of the OGP Subsidiaries and no administration order or procedure has been made
in respect of any of the OGP Subsidiaries; (ii) no receiver or receiver and
manager has been appointed of any of the OGP Subsidiaries; (iii) none of the
OGP Subsidiaries is insolvent or unable to pay its debts as they mature; (iv)
none of the OGP Subsidiaries has stopped paying its debts as they fall due,
except with respect to disputes in the ordinary course of business; and (v) no
OGP Subsidiary or any other part of the OGP Business, at any time during the
relevant statute of limitations period dating back from the date of this
Agreement, has entered into a transaction with Combustion Engineering, Inc.,
Basic Inc. or ABB Lummus Global Inc. or the subsidiaries of such entities, as
of the date of this Agreement, at less than fair market value.

 

SECTION 3.23.                 Guarantees.  (a) 
Except as set forth in Section 5.08(a) of the Disclosure Schedule,
as of the date of this Agreement, there are no Third Party Guarantees nor OGP
TPGs.

 

(b)                                 Except
as set forth in Section 5.08(b) of the Disclosure Schedule, as of the date
of this Agreement, there are no Parent Guarantees.

 

(c)                                  Except
as set forth in Section 5.08(c) of the Disclosure Schedule, as of the date
of this Agreement, there are no OGP Guarantees.

 

(d)                                 Except
as set forth in Section 1.01(a) of the Disclosure Schedule, there are no
cash collateralized agreements, arrangements or obligations restricting the
freedom of the OGP Business to exploit the use of its cash after the Closing
(and with respect to a Provisionally Retained Business, the Subsequent
Closing).

 

SECTION 3.24.                 No Other Representations.  (a) 
ABB does not make, and has not made, any representations or warranties
of any kind whatsoever in connection with this Agreement or the transactions
contemplated by the Transaction Agreements other than those expressly set out
in this Agreement, the Related Agreements or the certificate referenced in
Section 2.08(v).  Without limiting
the generality of the foregoing, ABB has not made, and shall not be deemed to
have made, any representations or warranties in or concerning any communication
or document relating to the OGP Subsidiaries, the Sellers, the OGP Business or
the transactions contemplated by the Transaction Agreements, including in any
information memorandum supplied to Purchaser and/or the Purchaser
Representatives by or on behalf of ABB prior to the Closing or in any
presentation of the OGP Subsidiaries, the Sellers, the OGP Business or the
transactions contemplated by the Transaction Agreements.

 

(b)                                 Other
than as provided within this Agreement or the Related Agreements, no Person has
been authorized by ABB to make any representation or warranty relating to ABB,
the OGP Subsidiaries, the Sellers, or the OGP Business or otherwise in
connection with the 

 

33

 

transactions
contemplated by the Transaction Agreements, and, if made, such representation
or warranty must not be relied upon as having been authorized by ABB.

 

(c)                                  ABB
acknowledges that it has not relied on any representations or warranties of
Purchaser in connection with this Agreement or the transactions contemplated by
the Transaction Agreements other than those expressly set out in this Agreement
or the certificate referenced in Section 2.07(v).

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF PURCHASER

 

As an inducement to ABB
to enter into this Agreement, Purchaser hereby represents and warrants to ABB
as follows:

 

SECTION 4.01.                 Organization and Authority of
Purchaser and the OGP Purchasers. 
(a)  Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of England
and Wales and has all necessary corporate power and authority to enter into,
execute and deliver this Agreement, to carry out its obligations hereunder and
to consummate the transactions contemplated by the Transaction Agreements.  The execution and delivery of this Agreement
by Purchaser, the performance by Purchaser of its obligations hereunder and
under the Related Agreements to which it is, or will be when executed as
provided in this Agreement, a party and the consummation by Purchaser of the
transactions contemplated by the Transaction Agreements have been duly
authorized by all requisite action on the part of Purchaser.  This Agreement has been, and upon their
execution each of the Related Agreements will be, duly executed and delivered
by Purchaser to the extent Purchaser is a party thereto, and, assuming due
authorization, execution and delivery by ABB and the other parties thereto, if
any, this Agreement is, and each of the Related Agreements to which Purchaser
is a party will be, a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or similar Laws relating to or affecting creditors’
rights generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at Law).

 

(b)                                 At
the Closing, each OGP Purchaser shall be a corporation duly incorporated,
validly existing and, where applicable, in good standing under the Laws of its
jurisdiction of incorporation and shall have all necessary corporate power and
authority to enter into, execute and deliver each Related Agreement to which it
will be a party when executed as provided in this Agreement, to carry out its
obligations thereunder and to consummate the transactions contemplated
thereby.  The execution and delivery by
each OGP Purchaser of each Related Agreement to which it is a party, the
performance by such Seller of its obligations thereunder and the consummation
by such OGP Purchaser of the transactions contemplated thereby will be, when
executed as provided in this Agreement, duly authorized by all requisite action
on the part of such OGP Purchaser.  Each
Related Agreement to which each OGP Purchaser will be a party will be, when
executed as provided in this Agreement, duly executed and delivered by such OGP
Purchaser and, assuming due authorization, execution and delivery 

 

34

 

by the other
parties thereto, if any, will constitute, when executed as provided in this
Agreement, a legal, valid and binding obligation of such OGP Purchaser
enforceable against it in accordance with its terms, subject to the effect of
any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or similar Laws relating to or affecting creditors’ rights generally
and subject, as to enforceability, to the effect of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at Law).

 

SECTION 4.02.                 No Conflict.  Assuming that all consents, approvals,
authorizations and other actions described in Section 4.03 have been
obtained and all filings and notifications listed in Section 4.03 of the
Disclosure Schedule have been made, the execution, delivery and
performance of this Agreement by Purchaser and the Related Agreements to which
Purchaser and each OGP Purchaser will be a party do not and will not (a)
violate, conflict with or result in the breach of any provision of the charter
or by-laws (or similar organizational documents) of Purchaser or any OGP
Purchaser, (b) conflict with or violate any Law or Order, or (c) except as set
forth in Section 4.02 of the Disclosure Schedule, conflict with, result in
any breach of, constitute a default (or event which, with the giving of notice
or lapse of time, or both, would become a default) under, require any consent
under, give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance other than a Permitted Encumbrance on any of the assets or
properties of Purchaser or any OGP Purchaser pursuant to any note, grant,
subsidy, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which
Purchaser or any OGP Purchaser is a party or by which any of such assets or
properties are bound or affected, except, in the case of clause (b) or (c), as
would not, individually or in the aggregate, prevent or materially delay the
consummation by Purchaser and the OGP Purchasers of the transactions
contemplated by the Transaction Agreements.

 

SECTION 4.03.                 Consents and Approvals.  The execution, delivery and performance of
this Agreement by Purchaser and the OGP Purchasers of the Transaction
Agreements to which any of them is a party do not and will not require any
consent, approval, authorization or other order of, action by, filing with or
notification to, any Governmental Authority except (a) for consents, appeals or
authorizations or other orders of, actions by, filings with or notifications
not related to merger control or competition Law set forth in
Section 4.03(a) of the Disclosure Schedule, (b) the notification and
waiting period requirements of the HSR Act and (c) applicable filings under
non-United States antitrust and competition Laws that are required by Law to be
filed prior to the Closing and which are set forth in Section 4.03(c) of
the Disclosure Schedule.

 

SECTION 4.04.                 Investment Purpose.  Purchaser is acquiring the Shares solely for
the purpose of investment and not with a view to, or for offer or sale in
connection with, any distribution thereof.

 

SECTION 4.05.                 Litigation.  No Action against Purchaser or the Purchaser
Affiliates is pending or, to the knowledge of Purchaser, threatened in writing
that seeks to prevent or materially delay or adversely affect the ability of
Purchaser to consummate the transactions contemplated by the Transaction
Agreements.  To the knowledge of Purchaser,
no 

 

35

 

circumstances exist which
could reasonably be expected to give rise to a claim which would have such
effect.

 

SECTION 4.06.                 Financing.  Purchaser has legally binding agreements
making available to it the funds necessary to pay the Purchase Price in
accordance with this Agreement. 
Purchaser has received, executed, accepted and delivered each of the
Purchaser Financing Documents and has provided true and complete copies as of
the date of this Agreement of the Purchaser Financing Documents to ABB.  As of the date hereof, Purchaser knows of no
events or conditions existing that would reasonably be expected to delay,
impair, impede or frustrate the satisfaction of any remaining condition
precedent to the drawdown of funds pursuant to the Purchaser Financing
Documents.

 

SECTION 4.07.                 Brokers.  Purchaser is solely responsible for the fees
and expenses of all brokers, finder or investment bankers appointed by
Purchaser and payable in connection with any brokerage, finder’s or other fees
or commissions payable by it or any OGP Purchaser in connection with the
transactions contemplated by this Agreement and the Related Agreements.

 

SECTION 4.08.                 No Other Representations.  (a) 
Purchaser does not make, and has not made to ABB or any of the
Affiliates of ABB (other than those Affiliates forming part of the OGP
Business), any representations or warranties of any kind whatsoever in
connection with this Agreement or the transactions contemplated by the Transaction
Agreements other than those expressly set out in this Agreement, the Related
Agreements or the certificate referenced in Section 2.07(v).

 

(b)                                 Other
than as provided within this Agreement or the Related Agreements, no Person has
been authorized by Purchaser to make any representation or warranty relating to
Purchaser or the OGP Purchasers or otherwise in connection with the
transactions contemplated by the Transaction Agreements, and, if made, such
representation or warranty must not be relied upon as having been authorized by
Purchaser.

 

(c)                                  It
is understood by Purchaser that any projections or other predictions, or,
except as expressly provided in this Agreement, any other financial information
or data, provided by ABB relating to the OGP Subsidiaries or in connection with
the transactions contemplated by the Transaction Agreements are not, and shall
not be deemed to be or to include, representations or warranties of ABB.  Purchaser acknowledges that it has not relied
on any representations or warranties of ABB in connection with this Agreement
or the transactions contemplated by the Transaction Agreements other than those
expressly set out in this Agreement or the certificate referenced in
Section 2.08(v).

 

ARTICLE V

COVENANTS AND AGREEMENTS

 

SECTION 5.01.                 Reorganization.  Prior to the Closing, ABB shall reorganize,
or shall cause the reorganization of, the OGP Business in the manner described
in Section 5.01 of the Disclosure Schedule (the “Reorganization”).

 

36

 

SECTION 5.02.                 Related Agreements.  (a) 
At the Closing (or immediately thereafter with respect only to the
Non-Competition Agreement), ABB and Purchaser shall enter into, cause the
Affiliates of ABB and the Purchaser Affiliates respectively to enter into, or
cause to be issued, as the case may be, the following agreements:

 

(i)                                     A transition
services agreement substantially in the form attached hereto as Exhibit D (the
“Transition Services Agreement”), pursuant to which ABB shall, or shall
cause its designated Affiliates to, provide certain transitional services after
the Closing to Purchaser and the OGP Purchasers;

 

(ii)                                  Agreements
substantially in the form attached hereto as Exhibit F-1 (the “Local Share
Agreements”) each between a Share Seller, on the one hand, and Purchaser or
an OGP Purchaser, on the other hand, in order to memorialize by jurisdiction
each sale and purchase of Shares set forth in Exhibit L;

 

(iii)                               Agreements substantially
in the form attached hereto as Exhibit F-2 (the “Local Asset Agreements”
and, together with the Local Share Agreements, the “Local Agreements”)
each between an Asset Seller, on the one hand, and Purchaser or an OGP
Purchaser, on the other hand, in order to memorialize by jurisdiction each sale
and purchase of Purchased Assets and the assumption of the Assumed Liabilities
set forth in Exhibit M;

 

(iv)                              A non-competition
agreement between ABB Ltd. and Purchaser substantially in the form attached
hereto as Exhibit G (the “Non-Competition Agreement”);

 

(v)                                 An intellectual
property license agreement between ABB Ltd. and Purchaser substantially in the
form attached hereto as Exhibit H (the “Shared IP License Agreement”);

 

(vi)                              The Patent Assignments
substantially in the form attached hereto as Exhibit O;

 

(vii)                           A bank guarantee
substantially in the form of Exhibit J-1 with an aggregate principal amount
equal to $40,000,000 (the “Adjustment and Indemnity Bank Guarantee”) to
be issued by an Appropriate Bank;

 

(viii)                        The Deferred Transfer Agreement
and a bank guarantee substantially in the form of Exhibit J-2 with an aggregate
principal amount equal to an amount up to the Allocation Amount (the “Repayment
Bank Guarantee”), if applicable, to be issued by an Appropriate Bank;

 

(ix)                                A bank guarantee
substantially in the form of Exhibit J-3 with an aggregate principal amount
equal to $7,500,000 (the “Tax Election Bank Guarantee”) to be issued by
an Appropriate Bank; and

 

(x)                                   The surety,
substantially in the form attached hereto as Exhibit I, dated as of the Closing
Date, made by ABB Ltd. in favor of Purchaser relating to the payment 

 

37

 

obligations of ABB or any Affiliate of ABB (other than ABB Ltd.) under
the Transaction Agreements (the “Surety”).

 

(b)                                 To
the extent that the provisions of this Agreement are inconsistent with or
additional to the provisions of any Local Agreement or Deferred Transfer
Agreement, the provisions of this Agreement shall prevail and, except with
respect to the representations relating to the ownership of and title to the
OGP Shares contained in Exhibit F-1, ABB or an Affiliate of ABB and Purchaser
shall cause the provisions of the relevant Local Agreement or Deferred Transfer
Agreement to be amended to the extent necessary to give effect to the provisions
of this Agreement or cause the relevant parties to such Local Agreement and
Deferred Transfer Agreement to comply with the provisions of this Agreement as
though they were bound by such provisions in place of the provisions of such
Local Agreement or Deferred Transfer Agreement.

 

SECTION 5.03.                 Conduct of the Business Prior to
the Closing.  Except as described in
Section 5.03 of the Disclosure Schedule or as otherwise contemplated
by any of the Transaction Agreements, unless Purchaser shall otherwise agree in
writing, between the date of this Agreement and the Closing:

 

(a)                                  ABB
will cause each OGP Subsidiary and each Asset Seller to conduct the OGP
Business in the ordinary course consistent with past practice; provided,
however, that no action by any of ABB, the Sellers or the OGP
Subsidiaries with respect to matters specifically addressed by any provision of
Section 5.03(b) shall constitute a breach of this Section 5.03(a)
unless such action would constitute a breach of any such provision of Section 5.03(b);

 

(b)                                 ABB
will cause (x) each of the OGP Subsidiaries not to take any of the following
actions (other than for actions by and between any OGP Subsidiaries) and
(y) each of the Asset Sellers not to take any of the following actions
relating to the OGP Business (as a result of which it is understood that
clauses (i), (ii) and (xii) below shall not apply to the Asset Sellers):

 

(i)                                     amend its
certificate of incorporation, by-laws or other equivalent organizational
documents, or merge or consolidate, or obligate itself to do so, with or into
any other entity;

 

(ii)                                  issue or sell any
shares of its capital stock or other securities convertible into or
exchangeable for such shares or equity interests or create, allot or issue any
share or loan capital or pass a shareholders’ resolution to provide for any of
the above;

 

(iii)                               sell, transfer, lease,
sublease, license or otherwise dispose of any OGP Subsidiary, OGP Real Property
or Purchased Assets (other than the Transferred Intellectual Property) other
than pursuant to transactions on arm’s length commercial terms having an
aggregate value not to exceed $1,000,000;

 

(iv)                              sell, transfer or license
any Business Intellectual Property, other than licenses of Business
Intellectual Property ancillary to the sale of products or services in the
ordinary course of business;

 

38

 

(v)                                 (A) terminate or give
notice of termination of any Leased Real Property except for terminations in
the ordinary course of business consistent with past practice, (B) take any
steps which materially adversely affect the existing use of any OGP Real
Property or its value or (C) agree to a new rental payable under any Leased
Real Property;

 

(vi)                              acquire (other than with
respect to contractual obligations existing as of the date of this Agreement)
or enter into any agreement or option to acquire any interest in any real
property for consideration or assumption of liabilities having an aggregate
value in excess of $500,000;

 

(vii)                           acquire (including by merger,
consolidation or acquisition of stock or assets) any corporation, partnership,
limited liability company, other business organization or any division thereof
other than in the ordinary course of business in connection with sales projects
for consideration or assumption of liabilities having an aggregate value in
excess of $1,000,000;

 

(viii)                        except with respect to
transactions between an OGP Subsidiary or JV Company and an Affiliate of ABB
(other than an OGP Subsidiary or JV Company) which will form part of the
Intercompany Settlement Payment at Closing, assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations of any
Person, or make any loans or advances, except (A) in the ordinary course of
business consistent with past practice and (B) not having an aggregate value in
excess of $500,000 in the individual case or $2,000,000 in the aggregate and
provided always (C) to the extent such obligation is a loan or an advance or in
the nature of a loan or an advance, the obligation is terminable on demand by
the OGP Subsidiary or the JV Company;

 

(ix)                                grant to any (A) Senior
Employee any increase in compensation, benefits or loans or severance benefits
except as may be required under and in accordance with any existing contracts,
agreements or arrangements or pursuant to applicable Law or (B) other
salaried employee of an OGP Subsidiary or Asset Seller who is intended to be a
Transferred Employee any increase in compensation, benefits or loans or
severance benefits except as may be required under and in accordance with any
existing contracts, agreements or arrangements or pursuant to applicable Law;

 

(x)                                   terminate the
employment of any Senior Employee;

 

(xi)                                reassign or transfer
any (A) executive officer of ABB or its Affiliates (other than the OGP
Subsidiaries) who is not involved in the OGP Business as of the date hereof to
an OGP Subsidiary or, if such employee by virtue of such reassignment or
transfer will become a Transferred Employee, to any Asset Seller or (B) Senior
Employee to ABB or an Affiliate that is not an OGP Subsidiary;

 

39

 

(xii)                             enter into any equity
joint venture, partnership or any similar arrangement other than in connection
with the formation of special purpose vehicles in the ordinary course of
business in connection with sales projects, or make any capital contribution to
any such entity except for (A) contributions required to be made pursuant to
the terms of the agreements governing such entity existing on the date hereof
and (B) in connection with sales projects in the ordinary course of business
for consideration aggregating not more than $1,000,000;

 

(xiii)                          adopt or amend in any
material respect any labor, collective bargaining or other similar agreements,
contracts, conventions or arrangements of an OGP Subsidiary or an Asset Seller
relating to the OGP Business, except as required by applicable Law or pursuant
to the terms of any such existing labor, collective bargaining or other similar
agreements, contracts, conventions or arrangements;

 

(xiv)                         (A) enter into any contract
(including a contract varying any existing contract) or (B) tender an offer for
a bid on any new contract or vary any existing tender or bid, as the case may
be, that, if such contract (or varied contract) had been in effect on the date
hereof, would have been a Material Contract or amend in any material respect or
terminate any Material Contract or OGP Intellectual Property;

 

(xv)                            amend or agree to amend in
any material respect, the terms of its Indebtedness or incur any additional
material Indebtedness, except (A) pursuant to facilities set forth in the
Disclosure Schedule where the outstanding Indebtedness pursuant to such
facilities does not exceed the amount available to be drawn by the OGP
Subsidiaries and the Asset Sellers relating to the OGP Business under those
facilities, (B) for borrowings from ABB or any of its Affiliates in the
ordinary course of business and (C) in the ordinary course pursuant to terms of
sales contracts entered into after the date hereof in accordance with the terms
of this Agreement; provided, however, that in each case under
clause (C) of this provision, to the extent such Indebtedness is pursuant to an
External Debt Contract, it shall be capable of being repaid upon demand by the
OGP Subsidiary or Asset Seller;

 

(xvi)                         grant an Encumbrance on any of
the OGP Assets;

 

(xvii)                      amend in any material respect any
insurance contract or fail to notify any insurance claim in an amount in excess
of  $500,000 in accordance with the
provisions of the relevant policy or do or omit to do anything which might make
any insurance contract void or voidable or entitle any of the insurers under
any such contract to refuse cover in relation to a particular claim in whole or
in part or settle any insurance claim in excess of $500,000 for an amount below
the amount claimed;

 

40

 

(xviii)                   make any material change to the
accounting principles, policies and practices or policies for the collection of
receivables or the discharge of payables of the OGP Subsidiaries or the Asset
Sellers;

 

(xix)                           establish a pension plan or
other employee benefit plan or increase any benefit under or otherwise amend an
existing plan in which an OGP Employee or Transferred Employee participates for
the benefit of an OGP Employee, OGP Former Employee or Transferred Employee, in
either case except as required by Law or as may be required under and in
accordance with any existing plan, or communicate to such employees a plan,
proposal or an intention to establish such a plan or to grant such an increase
in relation to such existing plan;

 

(xx)                              (A) pay any benefits for
or make any contribution, in each case, to a pension plan or other employee
benefit plan in respect of an OGP Employee, OGP Former Employee or Transferred
Employee other than in accordance with the terms of the documents governing
such existing plan or pursuant to applicable Law and in the ordinary course of
business consistent with past practice or (B) otherwise exercise discretion in
respect of such existing pension plan or scheme for and in respect of an OGP
Employee, OGP Former Employee or Transferred Employee other than in accordance
with the terms of the documents governing such plan or scheme and in the
ordinary course of business consistent with past practice;

 

(xxi)                           commence any Action claiming
money damages in excess of $500,000, or waive any material right in relation to
such claims or release, discharge or compound any liability in relation to such
claims, or compromise or settle any Action where the amount in controversy
exceeds $500,000, or waive a material right in relation to such claims or
release, discharge or compound any liability in relation to such claims, except
in either case for Actions over which ABB retains liability under
Article IX hereto or where reasonably necessary to preserve any rights of
ABB, an OGP Subsidiary or an Asset Seller;

 

(xxii)                        issue or cause to be issued
Parent Guarantees and Third Party Guarantees in each case other than in the
ordinary course of business and in a manner consistent with past practice in
connection with contracts with respect to the OGP Business;

 

(xxiii)                     enter into any agreement,
arrangement or transaction with any director of any OGP Subsidiary or of an
Asset Seller who is expected to be a Transferred Employee or with any relative
or spouse of such Person;

 

(xxiv)                    fail to maintain or renew each item
of registered Business Intellectual Property and other than in the ordinary
course of business, fail to continue any pending application for any Business
Intellectual Property in the ordinary course of business;

 

41

 

(xxv)                       make or enter into any agreement
to make capital expenditures in excess of $1,000,000 in the aggregate;

 

(xxvi)                    amend, agree to enter into or enter
into a contract, agreement, commitment or arrangement between ABB and/or any of
its Affiliates (other than the OGP Subsidiaries or an Asset Seller relating to
the OGP Business), on the one hand, and any OGP Subsidiary or Asset Seller
relating to the OGP Business, on the other hand, unless entered into on arms’
length commercial terms in the ordinary course of business;

 

(xxvii)                 amend the Variation Agreement in any
way that materially affects the obligations of any party thereto; and

 

(xxviii)              enter into or amend any contract,
agreement, commitment or arrangement with respect to any matter set forth in
this Section 5.03(b).

 

(c)                                  Notwithstanding
anything else in this Agreement, unless Purchaser shall otherwise agree in
writing, from and after the earlier of (x) the date of delivery of the
Pre-Closing Notice and (y) the Effective Date, none of the OGP Subsidiaries
shall, and ABB shall cause the OGP Subsidiaries not to, and, with respect to clauses
(vi), and (vii) below, neither ABB nor any of its Affiliates shall:

 

(i)                                     pay, declare or
set aside for payment any dividend or other distribution to ABB or any of its
Affiliates, except to the extent described in the Pre-Closing Notice;

 

(ii)                                  incur any additional
Indebtedness for money borrowed from any Person other than ABB or any of its
Affiliates, except to the extent described in the Pre-Closing Notice; provided,
always, that in relation to the entities subject to Secondary
Transactions in which Shares are being sold to Purchaser or an OGP Purchaser,
such additional Indebtedness may only be incurred in relation to funding bona
fide working capital, losses or capital expenditures;

 

(iii)                               repay any money owed
(including all non-trade accounts receivable by ABB and its Affiliates (other
than an OGP Subsidiary)) set out within the estimated Intercompany Settlement
Payment provided as part of the Pre-Closing Notice;

 

(iv)                              pay any amount to
satisfy, compromise or otherwise settle (in whole or in part) (1) any Excluded
Liability or (2) any liability which but for such payment would have been
subject to an indemnity obligation to the Purchaser Indemnified Parties
pursuant to the terms of this Agreement or any Related Agreements;

 

(v)                                 pay any amount to
satisfy, compromise or otherwise settle (in whole or in part) any obligation of
ABB or its Affiliates under any Third Party Guarantee;

 

42

 

(vi)                              recharge to the OGP
Business any costs and expenses the responsibility for which are contemplated
by a provision of the Transaction Agreements to be that of ABB or any of its
Affiliates (other than the OGP Subsidiaries); and

 

(vii)                           contribute any amount into
the Rabbi Trust (other than any contributions required under the terms of the
Rabbi Trust).

 

SECTION 5.04.                 Access to Information; Books and
Records; Monthly Review Protocol. 
(a)  From the date hereof until
the Closing, upon reasonable notice, ABB shall cause each of the OGP
Subsidiaries, each of the Asset Sellers and each of their respective officers,
directors, employees, agents and representatives to use their respective
reasonable best efforts to, and ABB shall use its reasonable efforts to cause
the JV Companies to:  (i) afford
the Purchaser Representatives reasonable access, during normal business hours,
to the offices, properties, plants, other facilities, books and records of the
OGP Subsidiaries and the Asset Sellers relating to the OGP Business; (ii)
furnish to the Purchaser Representatives such additional, readily available
financial and operating data and other information regarding the OGP
Subsidiaries and the Asset Sellers relating to the OGP Business (or legible
copies thereof) as Purchaser may from time to time reasonably request; and
(iii) comply with the terms of the Monthly Review Protocol; provided, however,
that none of the foregoing shall unreasonably interfere with any of the
businesses or operations of ABB or any of its Affiliates; provided  further,
however, that ABB’s Accountants or any other auditors or accountants of
ABB or any of its Affiliates shall not be obligated to make any work papers
available to any Person unless and until such Person has signed a customary
agreement relating to such access to work papers in form and substance
reasonably acceptable to such auditors or accountants.  ABB shall notify the Purchaser in writing at
least ten Business Days in advance of any meeting to be held in accordance with
the Monthly Review Protocol, stating the time, date, expected attendees and
location of such meeting.  Except in the
case of emergency (in which case such notice as is reasonable in the
circumstances shall be given), ABB shall provide not less than five Business
Days prior to such meeting date, an agenda of the business to be transacted at the
meeting and all relevant papers to be discussed within it or supporting other
business to be transacted at it.  As
soon as reasonably practicable following such meeting, ABB shall provide the
Purchaser with a copy of the minutes, if any, of such meeting.

 

(b)                                 Notwithstanding
Section 5.04(a), neither ABB nor any of its Affiliates shall be under any
obligation to disclose to Purchaser or the Purchaser Representatives any
information the disclosure of which, in ABB’s reasonable opinion, is prohibited
or restricted by any applicable Law, subject to any applicable privileges
(including the attorney-client privilege) or by any confidentiality obligations
binding upon ABB or any of its Affiliates, except in compliance with such Laws
or such confidentiality obligations.

 

(c)                                  In
order to facilitate the resolution of any claims made by or against ABB, for a
period of six years after the Closing, Purchaser shall (i) retain the books and
records of the OGP Subsidiaries and the Asset Sellers relating to the OGP
Business which comprised a portion of the Purchased Assets relating to periods
prior to the Closing in a manner reasonably consistent with the prior practice
of ABB and the OGP Subsidiaries; (ii) upon reasonable notice, afford the ABB
Representatives reasonable access (including the right to make, at ABB’s
expense, 

 

43

 

photocopies),
during normal business hours, to such books and records; provided, however,
that after such six-year period, before Purchaser or any Purchaser Affiliate
shall dispose of such books and records, Purchaser shall give ABB at least 90
days’ prior written notice of such intention to dispose and ABB shall be given
an opportunity, at its cost and expense, to remove and retain all or any part of
such books and records as ABB may elect provided that any information received
shall be treated as Confidential Information; provided  further, however,
that if at the end of the notice period, ABB has failed to effect the pickup
and delivery of such books and records, Purchaser will be entitled to destroy
or dispose of such documents.  The
provisions of this Section 5.04(c) shall apply mutatis mutandis to any books and records relating to the
operation of the OGP Subsidiaries or the Asset Sellers with respect to the OGP
Business which are retained by ABB or any of its Affiliates following the
Closing.

 

SECTION 5.05.                 Confidentiality.  (a) 
Effective the date hereof, the Confidentiality Agreement shall terminate
in respect of that portion of the Information (as defined in the
Confidentiality Agreement) relating to the OGP Business.  From and after the date hereof, each of the
Parties shall, and shall cause its Representatives to:  (i) keep all Confidential Information
confidential and not to disclose or reveal any Confidential Information to any
person other than its Representatives who are actively and directly
participating in the consummation and implementation of the transactions
contemplated by the Transaction Agreements or who otherwise need to know the
Confidential Information for the purpose of consummating or implementing such
Transactions and (ii) use Confidential Information only for purposes in
connection with the transactions contemplated by the Transaction Agreements or
the consummation of such transactions and not to use Confidential Information
for any other purpose.

 

(b)                                 Notwithstanding
anything else in Section 5.05(a) to the contrary, this Section 5.05
shall not prohibit disclosure or use of any Confidential Information by a Party
or any Representative if and to the extent:

 

(i)                                     as required by Law
including the requirements of any Taxing Authority or the rules and regulations
of any recognized stock exchange or any Self-Regulatory Organization, subject
to and in accordance with Section 11.03;

 

(ii)                                  the disclosure or use
is required to vest the full benefit of this Agreement in ABB and its
Affiliates or in Purchaser and the Purchaser Affiliates, as the case may be,
including satisfaction of the conditions contained in Article VIII, or to
facilitate preparation of the Final Effective Date Balance Sheet or a sale of
the Shares or Assets by Purchaser or the OGP Purchasers (as appropriate);

 

(iii)                               the disclosure or
use:  (A) is, subject to clause (C)
below, required for the purpose of any Action before a Governmental Authority
of relevant jurisdiction arising out of any of the Transaction Agreements; (B)
is, subject to clause (C) below, required for the purpose of a submission to
the IRS or such other taxation body in respect of any tax submissions by the
Parties in respect of the transactions contemplated by this Agreement; (C) is
made from and after the earlier of the date of the public announcement of
discussions relating to the transaction, the date of the public announcement of
the transaction, or the date of the execution of this Agreement with respect to
the U.S. federal 

 

44

 

tax treatment and tax structure of the transaction; or (D) is in
consultation with a tax advisor regarding the U.S. federal tax treatment and
tax structure of the transaction;

 

(iv)                              the disclosure is made to
a Representative of Purchaser or ABB whose function requires them to have such
information; provided, however, that the relevant Party will
procure that such Representative comply with the provisions of this clause in
respect of such information as if they were bound by this Section 5.05;

 

(v)                                 the disclosure is made
to a potential member of the financing syndicate of Purchaser who requires such
information for the purpose of making an investment decision with respect to, inter alia, lending to or investing in Purchaser; provided,
however, that Purchaser shall procure that such Person comply with the
provisions of this clause (v) in respect of such information as if they were bound
by this Section 5.05;

 

(vi)                              the disclosure or use is
made by Purchaser to an employee or executive officer of any of the OGP
Subsidiaries or is a Transferred Employee; provided, however,
that Purchaser shall procure that such Person comply with the provisions of
this clause (vi) in respect of such information as if they were bound by this
Section 5.05;

 

(vii)                           the disclosure or use is
made by Purchaser or its legal counsel pertaining to the OGP Business to (i)
the DOJ or the SEC in connection with or in response to DOJ or SEC inquiries or
investigations arising out of the Compliance Review or (ii) the DOJ in order
for the DOJ to issue the Opinion Review Release; or

 

(viii)                        agreed to in writing by the
other Party.

 

(c)                                  In
the event that a Party or any of its Representatives is required to disclose
any Confidential Information in any legal or regulatory proceeding, such Party,
prior to such disclosure, shall consult with the other party/parties as to the
timing, content and manner of making such disclosure or the use of such
information insofar as is reasonably practicable before complying with such an
obligation.

 

(d)                                 Notwithstanding
anything else in this Section 5.05, following the Closing, the foregoing
restrictions will not apply to Purchaser’s disclosure or use of documents and
information concerning the OGP Business, whether furnished by ABB or its
Affiliates under this Agreement, or otherwise.

 

SECTION 5.06.                 Regulatory Authorizations; Notices
and Consents.  (a)  Purchaser shall use its reasonable best
efforts to promptly obtain all authorizations, consents, orders and approvals
of Governmental Authorities set forth in Sections 3.04 and 4.03 of the
Disclosure Schedule and of the South Korean Fair Trade Commission in
pursuance of the South Korean clearance, including, where required, by
responding to second requests or any other extended or second phase
investigations by any Governmental Authority. 
ABB will cooperate with Purchaser in promptly seeking to obtain all such
authorizations, consents, orders and approvals; provided, however,
that neither ABB nor any of its Affiliates shall be required to pay any fees or
make any other payments to any Governmental Authority in order to obtain any
such authorization, consent, order or approval (other than normal filing fees
that are imposed by Law on such Persons and any advisors’ fees in connection
therewith).  Neither ABB nor Purchaser 

 

45

 

shall take any Action
that would have the effect of materially delaying, impairing or impeding the
receipt of any required approvals.  For
the purposes of this Section 5.06, the “South Korean clearance”
shall mean the notification of this Agreement to the South Korean Fair Trade
Commission pursuant to the Korean Monopoly Regulation and Fair Trade Act of
December 31, 1980, as amended.

 

(b)                                 ABB
and Purchaser each agree to make, or to cause to be made, an appropriate filing
of a notification and report form pursuant to the HSR Act in connection with
the transactions contemplated by the Transaction Agreements promptly after the
date of this Agreement but in no event later than ten Business Days thereafter
and to supply promptly any additional information and documentary material that
may be requested by any Governmental Authority pursuant to such filings.  In addition, each Party agrees to make, or
to cause to be made, promptly any other filing or notice set forth in Sections
3.04(a) and 4.03(a) and (c) of the Disclosure Schedule.

 

(c)                                  Sections
3.04(a) and 4.03(b) and (c) of the Disclosure Schedule set out an
exhaustive list of the jurisdictions referred to in Sections 3.04(a) and
4.03(b) and (c) of this Agreement. 
These are the jurisdictions in which the Parties have agreed mandatory
filings are required as a result of the execution, delivery and performance by
ABB and the Sellers of the Transaction Agreements.  The disclosure in Sections 3.04(a) and 4.03(b) and (c) may,
however, be extended to include additional mandatory filings only insofar as
additional information is disclosed by the Seller to the Purchaser or local
legislation is amended, following the date of this Agreement, which in either
case has the effect of making applicable a mandatory filing as a result of the
execution, delivery and performance by ABB and the Sellers of the Transaction
Agreements.  In such event, such
additional mandatory filings will be deemed to be added to the jurisdictions
referred to in Sections 3.04(a) and 4.03(b) and (c).  If any such additional mandatory filings which are suspensory in
nature are identified, the parties will use their reasonable efforts to
transfer the assets or shares within the relevant territory out of the entities
which are the subject of a Primary Transaction provided always that such
transfer will result in Purchaser reasonably determining that the Primary Test
will be satisfied.  In such event, any
such assets or shares transferred pursuant to this Section 5.06(c) shall
be deemed a Secondary Transaction, and all consents or approvals from
Governmental Authorities in respect of such additional mandatory, suspensory
filings shall constitute an Additional Approval.  If such Additional Approvals have not been satisfied or waived
prior to the Closing, any assets or shares transferred pursuant to this
Section 5.06(c) will be subject to the Deferred Transfer Agreement.  The provisions of Sections 5.06(a), (b) and
(d) shall apply to any additional mandatory filings identified and required in
accordance with this Section 5.06(c). 
For the purposes of this Section 5.06(c), the “Primary Test”
shall be deemed to be satisfied if at Closing the aggregate gross assets,
turnover and earnings before interest and tax (in each case calculated on an
unconsolidated basis and excluding any items which are exclusively intra-OGP
Business or investments in other OGP Subsidiaries) of the OGP Subsidiaries and
the parts of the OGP Business transferred by the Asset Sellers which are
capable of being and shall be transferred on the Closing Date (including, the
Primary Transactions) to Purchaser and the OGP Purchasers (taken together) are
equal to or exceed 85 percent of the consolidated gross assets, turnover and
earnings before interest and tax of the OGP Business.  The gross assets, turnover and earnings before interest and tax
in respect of each relevant OGP Subsidiary shall be calculated at the Closing
Date using the accounting principles, standards and practices generally
accepted in the 

 

46

 

country in
which such OGP Subsidiary is incorporated and which are approved by the
relevant regulatory body of the accounting profession in that country and
consistently applied.

 

(d)                                 To
the extent permitted by applicable Law, each of ABB and Purchaser shall
promptly notify the other of any communication it or any of its Affiliates or
in the case of Purchaser, each Purchaser Affiliate and each Investor receives
from any Governmental Authority relating to the matters that are the subject of
this Agreement and permit the other Party to review where reasonable, subject to
confidentiality obligations to third parties, in advance any proposed
communication by such Party to any Governmental Authority.  No Party shall agree to participate in any
meeting with any Governmental Authority in respect of any filing, investigation
or other inquiry unless it consults with the other Party in advance.  Subject to the applicable confidentiality
agreements, to the extent permitted by applicable Law, the Parties will
coordinate and cooperate fully with each other in exchanging such information
and providing such assistance as the other Party may reasonably request in
connection with the foregoing.  Subject
to applicable confidentiality agreements, to the extent permitted by applicable
Law, the Parties will provide each other with copies of all correspondence,
filings or communications between them or any of their representatives, on the
one hand, and any Governmental Authority or member of the staff of any
Governmental Authority, on the other hand, with respect to the Transaction
Agreements and the transactions contemplated thereby.  Nothing in this Section 5.06 shall result in either Party
being required to disclose business secrets or confidential information to the
other Party.  Business secrets shall
include turnover information, market share data, confidential fund structure
information, and other confidential information in relation to the equity
investors of the Purchaser and any of their investee companies and other market
sensitive information.

 

SECTION 5.07.                 Retained Names and Marks.  (a) 
Purchaser hereby acknowledges that all right, title and interest in and
to the names and marks listed in Part A of Section 5.07(a) of the
Disclosure Schedule or other corporate names of ABB or its Affiliates,
together with any confusingly similar names and all Trademarks containing or
incorporating any of the foregoing (the “Retained Names and Marks”) are
owned exclusively by ABB, and that, except as expressly provided below, any and
all right of the OGP Business to use the Retained Names and Marks shall
terminate as of the Closing and shall immediately revert back to ABB and the
Sellers; provided that neither Purchaser nor any of the OGP Subsidiaries
shall be prevented or restricted in any way by ABB from using those names
listed in Part B of Section 5.07(a) of the Disclosure Schedule with
the superscript or suffix “IT” contained therein so long as such use is without
the superscript or suffix “IT” (for the avoidance of any doubt, with respect to
the names “Industrial IT Enabled”, “Industrial IT Certified”, and “Industrial
IT Solutions”, Purchaser and the OGP Subsidiaries may use the names “Industrial
Enabled”, “Industrial Certified”, and “Industrial Solutions”) (it being
understood that ABB makes no warranties regarding the use by Purchaser or any
of the OGP Subsidiaries of such names apart from the “IT” superscript or suffix
as provided above).  Purchaser further
acknowledges that it has no rights, and is not acquiring any rights, to use the
Retained Names and Marks, except as expressly agreed to by ABB in writing.

 

(b)                                 Purchaser
shall, as soon as practicable after the Closing, but in no event later than
three (3) months thereafter, cause each OGP Subsidiary, as applicable, to file
with the appropriate authorities the documents required by Law to effect a
change to its corporate name to 

 

47

 

a corporate
name that does not contain any Retained Names and Marks and to supply promptly
any additional information and documentary materials that may be requested by
ABB with respect to such filings.

 

(c)                                  Purchaser
shall, for a period of three (3) months after the Closing Date, be entitled to
use all of the OGP Subsidiaries’ existing stocks of signs, letterheads,
advertisements and promotional materials, Internet websites and Internet domain
names associated therewith, inventory and other documents and materials
transferred to Purchaser or an OGP Purchaser (“Existing Stock”)
containing Retained Names and Marks, after which date Purchaser shall, and
shall cause each OGP Subsidiary and each OGP Purchaser to, remove or obliterate
Retained Names and Marks from such Existing Stock or cease using such Existing
Stock, and relinquish to ABB any rights with respect to Internet domain names
incorporating any Retained Names or Marks.

 

(d)                                 Except
as expressly provided in this Agreement, no other right to use the Retained
Names and Marks is granted by either ABB or any Seller to Purchaser, any OGP
Purchaser or the OGP Subsidiaries, whether by implication or otherwise, and
nothing hereunder permits Purchaser, any OGP Purchaser or any OGP Subsidiary to
use the Retained Names and Marks on any documents, materials, products or
services other than in connection with the Existing Stock.  Purchaser shall ensure that all use of the
Retained Names and Marks by the OGP Subsidiaries as provided in this
Section 5.07 shall be only with respect to goods and services of a level
of quality equal to or greater than the quality of goods and services with
respect to which the OGP Business used the Retained Names and Marks prior to
the Closing.

 

(e)                                  Purchaser
agrees that neither ABB nor any of its Affiliates shall have any responsibility
for claims by third parties arising out of, or relating to, the use by
Purchaser, the OGP Subsidiaries, the OGP Business, the Investors and any
Purchaser Affiliate thereof of any Retained Names or Marks after the Closing
Date other than an allegation that the use of Retained Names or Marks is
infringing the rights of a third party in any respect, and Purchaser shall indemnify
and hold harmless ABB and its Affiliates from any and all claims that may arise
out of the use thereof by Purchaser, the OGP Subsidiaries, the OGP Business,
the Investors or any Purchaser Affiliate thereof.

 

SECTION 5.08.                 Guarantees.  (a) 
As used in this Section 5.08, the following terms have the
following meanings:

 

“Advance Payment Bonds”
means Third Party Guarantees or Parent Guarantees to the extent they secure or
guarantee the repayment or application of customer advances.

 

“Amount” means the
maximum sum payable expressed in “$” pursuant to and in accordance with the
terms of the relevant guarantee or other similar instrument contemplated by
this Section 5.08.

 

“Available
Balance” means at the time of determination from and after Closing the ETPG
Facility Amount less the sum of the Amount payable at the date of issue under
(i) each ETPG Facility Guarantee and (ii) each Substitute Third Party Guarantee
issued pursuant to Section 5.08(d), and in either case whether or not any
such ETPG Facility Guarantee or 

 

48

 

Substitute Third Party
Guarantee remains outstanding or has been drawn upon in whole or in part at the
time of determination.

 

“Eligible TPG”
means all Third Party Guarantees other than Warranty Period Guarantees and
Ineligible Guarantees, in every case which are outstanding as of Closing.

 

“ETPG Facility”
means irrevocable letter(s) of credit arranged by Purchaser in favor of ABB in
an amount of up to the ETPG Facility Amount to secure repayment of obligations
of ABB or any of its Affiliates (other than an OGP Subsidiary) in respect of
Third Party Guarantees and Parent Guarantees (other than Ineligible
Guarantees), in each case which are outstanding as of the Closing, as provided
in this Section 5.08.

 

“ETPG Facility
Amount” means an aggregate amount equal to the lesser of (i) $160,000,000
minus the Amount of OGP TPGs outstanding as of Closing, and (ii) the difference
between (x) the aggregate Amount of Third Party Guarantees outstanding as of
Closing less (y) the sum of (A) the aggregate amount of Warranty Period
Guarantees outstanding as of Closing and (B) the aggregate amount of Ineligible
Guarantees to the extent they have been issued in respect of Off Balance Sheet
Indebtedness.

 

“ETPG Facility
Guarantee” means a letter of credit issued in favor of ABB pursuant to the
ETPG Facility.

 

“Ineligible
Guarantee” means any Third Party Guarantee or Parent Guarantee which is (i)
an Advance Payment Bond, (ii) a tax bond (other than the Norwegian Tax Bond as
defined in the Senior Credit Agreement) or in respect of an advance lease
payment, and (iii) any other Third Party Guarantee or Parent Guarantee which is
not related to the performance of a project-related obligation of an OGP
Subsidiary or which has been issued in respect of Off Balance Sheet
Indebtedness, in each case outstanding as of the Closing.

 

“OGP Guarantees”
means any indemnities, performance, advance payment and retention bonds or
guarantees, other guarantee obligations, letters of credit and other similar
arrangements issued by an OGP Subsidiary with respect to an obligation of ABB
or any of its Affiliates (other than another OGP Subsidiary) that does not
relate to the OGP Business.

 

“OGP TPGs”
means any indemnities, performance, advance payment and retention bonds or
guarantees, other guarantee obligations, letters of credit and other similar
arrangements issued by a third party in relation to the OGP Business for which
an OGP Subsidiary (but none of ABB or any of its Affiliates) has a reimbursement
obligation in relation to the OGP Business; provided, notwithstanding
the foregoing, OGP TPGs shall not include any guarantees which are in respect
of debt of an OGP Subsidiary for borrowed money.

 

“Parent
Guarantees” means any obligations or arrangements granted or issued by ABB
or any of its Affiliates (other than an OGP Subsidiary) relating to the OGP
Business, in each case outstanding as of the Closing Date, other than in
respect of Third Party Guarantees and excluding Parent Guarantees issued in
respect of the Grayloc Note, the Houston Lease and the Aberdeen Lease.

 

49

 

“Retained TPG”
means all Third Party Guarantees which are either (i) outstanding as at the
date of this Agreement and set forth in Section 5.08(a) of the Disclosure
Schedule, (ii) identified after the date of this Agreement as outstanding as of
the date of this Agreement or (iii) entered into on or after the date of this
Agreement and prior to Closing and in either case is outstanding at Closing,
but excluding those Third Party Guarantees in respect of which Purchaser has
procured the issuance of an ETPG Facility Guarantee pursuant to
Section 5.08(b) or (c).

 

“STPG Notice”
means a written notice to Purchaser confirming (i) that one or more Third Party
Guarantees or Parent Guarantees exist, (ii) that such guarantees are either
Eligible TPGs, Warranty Period Guarantees or Parent Guarantees, (iii) the
Amount outstanding at the date of such notice under such Eligible TPG or
Warranty Period Guarantee, or in the case of a Parent Guarantee for which no
amount is established in such guarantee, the amount for which an ETPG Facility
Guarantee is requested in the notice, (iv) the underlying contract to which
such Eligible TPG, Warranty Period Guarantee or Parent Guarantee relates
(including reference number to the extent available) and attaching a copy of
such guarantee, and (v) the Available Balance at the date of such notice.

 

“Substitute
Parent Guarantees” means substitute guarantees or similar arrangements
issued to replace any Parent Guarantees either (i) outstanding as of the date
of this Agreement and set forth in Section 5.08(g) of the Disclosure
Schedule, (ii) identified after the date of this Agreement as outstanding as of
the date of this Agreement or (iii) issued on or after the date of this
Agreement and prior to the Closing and in each case outstanding at Closing.

 

“Substitute
Third Party Guarantees” means any substitute indemnity, performance,
advance payment or retention bond or guarantee, other guarantee obligation,
letter of credit or other similar arrangement issued to replace the Eligible
TPGs, Warranty Period Guarantees or Parent Guarantees pursuant to
Section 5.08(d).

 

“Third Party
Guarantees” means any indemnities, performance, advance payment and
retention bonds or guarantees, other guarantee obligations, letters of credit
and other similar arrangements issued by a third party in relation to the OGP
Business for which ABB or any of its Affiliates (other than an OGP Subsidiary) has
a reimbursement obligation in each case, outstanding as of the Closing Date.

 

“Warranty
Period Guarantees” means any Third Party Guarantees to the extent they
secure warranty obligations with respect to services or products provided
pursuant to a contract.

 

(b)                                 By
the Closing, Purchaser shall have arranged the ETPG Facility and it shall be
available to ABB pursuant to its terms. 
Subject always to the Available Balance, in order to utilize the ETPG
Facility in respect of Eligible TPGs, Warranty Period Guarantees and Parent
Guarantees, ABB must deliver a STPG Notice. 
In the event that the Purchaser disputes that a STPG Notice has been
validly provided in accordance with this Section 5.08(b) the provisions of
Section 2.10(b) shall apply mutatis
mutandis.  Within seven
Business Days following receipt of a duly completed STPG Notice which is not
disputed in accordance with this Section 5.08(b), or if disputed, upon the
resolution of such dispute, Purchaser shall procure the 

 

50

 

issue of one
or more ETPG Facility Guarantees pursuant to and in accordance with the terms
of the ETPG Facility for an amount equal to the Amount of all of the relevant
Eligible TPGs, Warranty Period Guarantees or Parent Guarantees which is/are the
subject matter of such STPG Notice and upon such issue the Available Balance
shall be permanently reduced by the amount of such ETPG Facility
Guarantees.  Further, ABB shall be
permitted to deliver a STPG Notice to Purchaser prior to the Closing, and so
long as such delivery occurs at least seven Business Days prior to the Closing,
Purchaser shall procure the issue of one or more ETPG Facility Guarantees on
the Closing Date without limiting either Party’s rights under
Section 5.08(n).

 

(c)                                  Each
ETPG Facility Guarantee shall be issued first in respect of Eligible TPGs and
only when the Available Balance has been utilized in respect of all such
guarantees, thereafter in respect of Warranty Period Guarantees and only when
the Available Balance has been utilized in respect of all such guarantees,
thereafter in respect of Parent Guarantees; provided  further that
any ETPG Facility Guarantee issued to ABB under the ETPG Facility in respect of
a Parent Guarantee shall expire at the same time and date as the Ineligible
Guarantee identified by ABB in the STPG Notice as being the Ineligible
Guarantee to be used for such purposes. 
Any STPG Notice delivered pursuant to Section 5.08(b) shall specify
such Ineligible Guarantee and shall give the same information in respect of
such Ineligible Guarantee as is required for an Eligible TPG.

 

(d)                                 (i)  From and after the Closing, ABB and
Purchaser shall cooperate and use their reasonable efforts to cause Purchaser
in accordance with Sections 5.08(g) and 5.08(h), as soon as reasonably
practicable after the Closing, to replace the Eligible TPGs and Warranty Period
Guarantees (in each case, to the extent ETPG Facility Guarantees have been
issued) with Substitute Third Party Guarantees.  The amount payable under any ETPG Facility Guarantee in respect
of such Eligible TPG or Warranty Period Guarantees shall be reduced (and if
reduced to zero such letter of credit shall be returned to Purchaser and
otherwise shall be exchanged for a letter of credit for such reduced amount) by
an amount equal to the Amount of such Substitute Third Party Guarantee at the
time such Substitute Third Party Guarantee is issued; provided that ABB
has been absolutely and unconditionally released of the obligations of ABB and
each of its Affiliates in connection with the Eligible TPG or Warranty Period
Guarantees in respect of which the Substitute Third Party Guarantee is issued
and provided  further that Purchaser shall not issue any such
Substitute Third Party Guarantee unless such absolute and unconditional release
shall have been obtained.

 

(ii)                                  In
addition to the circumstances described above in paragraph (i), a Substitute
Third Party Guarantee may also be issued in accordance with
Section 5.08(d)(i) for Eligible TPGs and Warranty Period Guarantees (to
the extent they are not Ineligible TPGs) notwithstanding no ETPG Facility
Guarantee shall have been issued in respect of the relevant Eligible TPG or
Warranty Period Guarantee and if so issued the Available Balance shall be
permanently reduced by the Amount of the Substitute Third Party Guarantees
issued pursuant to this Section 5.08(d)(ii).

 

(e)                                  Subject
always to Sections 5.08(a), (b), (c) and (d), in the event that either (i) the
Amount of the Eligible TPGs at the date of an STPG Notice exceeds the ETPG
Facility Amount or (ii) the Amount of the Warranty Period Guarantees or Parent
Guarantees at the relevant date of the STPG Notice exceeds the Available
Balance, ABB shall have the right, in its 

 

51

 

sole
discretion, to select the Eligible TPGs, Warranty Period Guarantees or Parent
Guarantees (as appropriate) in respect of which the ETPG Facility is to be
utilized.

 

(f)                                    Purchaser
shall reimburse ABB and its Affiliates for their reasonable expenses in maintaining
the Retained TPGs, whether or not such guarantees are called upon to be
performed, to the extent of an amount equal to 0.5% multiplied by the lesser
of:

 

(i)                                     $
40,000,000; and

 

(ii)                                  the
aggregate principal Amount of Retained TPGs;

 

provided  always that
ABB must notify Purchaser of the amounts, details and costs of maintaining such
Retained TPGs prior to Purchaser making the payments contemplated in this
Section 5.08(f) and Purchaser shall not be obligated to make a
reimbursement pursuant to this Section 5.08(f) in excess of the actual
cost to ABB and its Affiliates of maintaining the Retained TPGs.

 

(g)                                 As
soon as reasonably practicable following the Closing, Purchaser shall use its
reasonable efforts to arrange Substitute Parent Guarantees.  In connection therewith, Purchaser shall use
its reasonable efforts to obtain from the creditor, beneficiary or other
counterparty an absolute and unconditional release of ABB and its Affiliates (other than an OGP Subsidiary) from all
liability and contingent liability under or in respect of any Parent Guarantee,
each release to be in form and substance reasonably satisfactory to ABB.  Notwithstanding the previous sentence, Purchaser shall not issue
a Substitute Parent Guarantee to any party that has not issued an absolute and
unconditional release of ABB
and its Affiliates.  Purchaser shall
reimburse ABB and its Affiliates for their reasonable expenses in maintaining
the Parent Guarantees whether or not such Parent Guarantees are drawn upon or
required to be performed.  For the
purposes of Sections 5.08(g), (h) and (k) “reasonable efforts” shall be
satisfied by the Party offering the assurance of such Party only and shall not
require such Party to make any payment or deposit or procure that any third
party bank guarantee is issued to secure such release.

 

(h)                                 As
soon as reasonably practicable following the Closing, ABB shall use its reasonable efforts to arrange for substitute
guarantees or similar arrangements to replace any OGP Guarantees either (i)
outstanding as of the date of this Agreement, all of which are set forth in
Section 5.08(h) of the Disclosure Schedule or (ii) issued on or after
the date of this Agreement and prior to the Closing.  In connection therewith, ABB
shall use its reasonable efforts to obtain from the creditor, beneficiary or
other counterparty an absolute and unconditional release of the OGP
Subsidiaries from all liability and contingent liability under or in respect of
any OGP Guarantee, each release to be in form and substance reasonably satisfactory
to Purchaser.  To the extent that the
creditor, beneficiary or other counterparty under any OGP Guarantee has not
granted such release, ABB
shall indemnify, defend and hold harmless Purchaser and the Purchaser
Affiliates against and reimburse Purchaser and the Purchaser Affiliates for any
and all amounts paid, including reasonable costs or expenses in connection with
such OGP Guarantees, including Purchaser’s and the Purchaser Affiliates’
expenses in maintaining such OGP Guarantees whether or not any such OGP
Guarantees are drawn upon or required to be performed, and shall in any event
promptly reimburse Purchaser and the Purchaser Affiliates to 

 

52

 

the extent any
OGP Guarantee is called upon and Purchaser or any of the Purchaser Affiliates makes any payment.

 

(i)                                     From
and after the Closing, to the extent that ABB receives funds under an indemnity, performance, advance
payment or retention bond or guarantee, other guarantee obligation, letter of credit
or other similar arrangement issued by a third party prior to the Closing for
the benefit of ABB and its
Affiliates (including the OGP Business), ABB shall pay Purchaser an amount equal to the portion of the
proceeds received which are for the benefit of the OGP Business.  ABB shall take such reasonable steps as the
Purchaser may reasonably request to enforce all such rights of the OGP Business
and shall pay any proceeds for the benefit of the OGP Business recovered as
soon as reasonably practicable to Purchaser’s Bank Account, and this
Section 5.08(i) shall apply mutatis
mutandis to the extent an OGP Subsidiary or a relevant Purchaser
Affiliate being the successor of an Asset Seller relating to the Business
receives such funds on behalf of ABB and its Affiliates (excluding the OGP
Business).

 

(j)                                     From
and after the date of this Agreement: 
(A) ABB shall (x) honor its obligations in connection with the Parent
Guarantees which are outstanding at Closing, (y) undertake to procure that all
Third Party Guarantees in respect of which an STPG Notice has been issued shall
be maintained in accordance with their terms and will remain in place for the
specified duration or until replaced with a Substitute Third Party Guarantee if
earlier, and (z) undertake to procure that the Retained TPGs are maintained in
accordance with their terms and shall remain in place for the specified
duration; and (B) Purchaser shall honor its obligations in connection with the
OGP Guarantees which are outstanding at Closing.

 

(k)                                  If
ABB or any ABB Affiliate or any third party issuer receives a demand under any
Third Party Guarantee or Parent Guarantee, ABB shall procure that the Purchaser
is promptly notified of such demand and shall not, and shall procure that its
Affiliates shall not, and shall use its reasonable efforts to procure that any
third party issuer shall not, pay any money or do or say anything to admit any
liability under such Third Party Guarantee or Parent Guarantee unless legally
obliged to do so, and this Section 5.08(k) shall apply mutatis mutandis to the Purchaser with
respect to OGP Guarantees.

 

(l)                                     Purchaser
shall indemnify, defend and hold harmless ABB and its Affiliates against and
reimburse ABB and its Affiliates for any and all Losses incurred with respect
to any Third Party Guarantees or Parent Guarantees (other than, in each case,
any Ineligible Guarantee which has been issued in respect of Off Balance Sheet
Indebtedness) and, subject to the limitation in Section 5.08(f), with
respect to the reimbursement of Retained TPG Expenses.  Purchaser shall in any event promptly
reimburse ABB and its Affiliates to the extent any Parent Guarantee or Third
Party Guarantee is called upon and ABB or any of its Affiliates makes any
payment or is obligated to reimburse the party issuing such Parent Guarantee or
Third Party Guarantee from and after the Closing.  Notwithstanding anything else in this Agreement to the contrary
and without limiting Purchaser’s rights under Section 9.06, the OGP
Subsidiary in respect of whose underlying obligations the relevant guarantee
has been issued (or, in the event that the underlying obligations were
obligations of an Asset Seller relating to the OGP Business, the relevant
Purchaser Affiliate having assumed the obligation) shall have joint liability
with Purchaser under this Section 5.08(l); provided that nothing in
this Section 5.08 or Section 5.10 shall reduce or otherwise eliminate
any reimbursement obligation of the OGP Subsidiaries to 

 

53

 

ABB or any of
its other Affiliates existing as of the date of this Agreement in the event
there is any default under a Third Party Guarantee or Parent Guarantee.

 

(m)                               If
the ETPG Facility expires in accordance with its terms prior to the expiration
of all of the guarantees which are secured by the ETPG Facility, Purchaser
shall, prior to such expiration, arrange an alternative irrevocable letter of
credit in favor of ABB in an Amount equal to the Amount of the such guarantees
still secured (the “Remaining Guarantees”), and such alternative
facility shall be reduced, from time to time, by the Amount of Remaining
Guarantees that subsequently expires in accordance with such Remaining
Guarantee’s respective terms.  In the
event that ten Business Days prior to the date that the ETPG Facility expires
in accordance with it terms ABB has not received written confirmation from
Purchaser of such alternative facility, then notwithstanding anything in this
Agreement or the ETPG Facility to the contrary, Purchaser shall cause ABB, or
its applicable Affiliates, to be able to draw against the ETPG Facility for the
Amount of the Remaining Guarantees prior to the expiration of the ETPG
Facility.

 

(n)                                 In
the event of an error, omission or inaccuracy in any of the amounts or other assessments
required to be computed by either Party pursuant to this Section 5.08, the
Party discovering such error, omission or inaccuracy shall as soon as
reasonably practicable notify the other Party in writing of such error,
omission or inaccuracy and describe in reasonable detail the facts,
circumstances and proposed remedy arising from such error, omission or
inaccuracy.  Within ten Business Days of
receipt of such notice, the Parties shall attempt to agree whether an error
exists and, if so, the steps necessary to be taken.  Without limiting the rights of the Parties, to the extent that
the Parties agree or it is finally determined that there has been such an
error, omission or inaccuracy, the ETPG Facility Amount shall be increased or
decreased, as the case may be, by the amount of any error.

 

SECTION 5.09.                 Third Party Consents.  (a) 
ABB shall give promptly, and shall cause the OGP Subsidiaries and the
Asset Sellers to give promptly, such notices to third parties, and ABB shall
use its, and shall cause the OGP Subsidiaries and the Asset Sellers to use
their, reasonable efforts to obtain such third party consents as are reasonably
necessary to preserve to the OGP Business the benefits of their respective
arrangements with third parties under the Material Contracts, Material Permits
or with respect to any Purchased Assets. 
Where a third party consent sought is not given, ABB and Purchaser shall
cooperate with each other in any reasonable and lawful arrangements designed to
provide Purchaser or an OGP Purchaser the benefits of use of any such Purchased
Assets, Material Permits and Material Contracts.

 

(b)                                 Where
a third party consent under any Asset Seller Contract (or Lease in connection
with such Asset Seller’s Leased Real Property) is not obtained prior to the
Closing, ABB shall, and shall cause the Asset Sellers to, subsequent to the
Closing, cooperate with Purchaser in attempting to obtain such consent as
promptly thereafter as practicable.  To
the extent that any such Asset Seller Contract (or Lease in connection with
such Asset Seller’s Leased Real Property) is not assignable without the consent
of another party thereto, this Agreement shall not constitute an assignment
thereof.  If such consent cannot be
obtained, ABB, Purchaser, the OGP Purchasers, OGP Subsidiaries and the Asset
Sellers, as the case may be, shall each use their reasonable efforts to provide
the relevant OGP Purchasers, as the case may be, with the rights and benefits
of the affected Asset Seller Contract or Lease in connection with 

 

54

 

such Asset Seller’s
Leased Real Property for the term of such contract, and, if ABB or the Asset
Sellers provides such rights and benefits, Purchaser shall assume the
obligations and burdens thereunder. 
Until such consent is obtained or novation is achieved, ABB shall, or
shall cause the Asset Seller to, do each act and thing reasonably requested of
them by Purchaser or an OGP Purchaser to enable performance of the Asset Seller
Contract (or Lease in connection with such Asset Seller’s Leased Real Property)
and to provide for Purchaser or the OGP Purchaser the benefits of the Asset
Seller Contract (or Lease in connection with such Asset Seller’s Leased Real
Property) (including enforcement of a right of an Asset Seller against another
party to the Asset Seller Contract or Lease in connection with such Asset
Seller’s Leased Real Property) arising out of its termination by the other
party or otherwise).

 

(c)                                  Section 5.09(b)
does not affect Purchaser’s rights and remedies against ABB in respect of an
Asset Seller Contract or Lease in connection with such Asset Seller’s Leased
Real Property which ABB has warranted is assignable, or may be performed by
Purchaser or any OGP Purchaser instead of the Asset Seller, without a novation
agreement.

 

(d)                                 Where
any third party consent referred to in Section 5.09(a) is required from
ABB or any Affiliate of ABB, ABB hereby confirms that such consent is given.

 

SECTION 5.10.                 Termination of Certain Existing
Intercompany Contracts and Arrangements. 
(a)  At or prior to the Closing,
ABB shall cause the contracts, agreements or arrangements between ABB and/or
any of its Affiliates (other than the OGP Subsidiaries or an Asset Seller not
with respect to the OGP Business), on the one hand, and any OGP Subsidiary or
Asset Seller relating to the OGP Business, on the other hand, of a type
described in Section 5.10 of the Disclosure Schedule to be terminated
or amended to exclude such OGP Subsidiary or Asset Seller as a party thereto
without any Liability thereunder of or to any of the OGP Subsidiaries.  Each other contract, agreement or
arrangement between ABB and/or any of its Affiliates (other than the OGP
Subsidiaries), on the one hand, and any OGP Subsidiary, on the other hand,
shall remain in full force and effect after the Closing in accordance with its
terms.

 

(b)                                 From
and after the Closing, each Party shall pay, or cause to be paid, the
Intra-Group Trading Amount owed at the Closing to the other Party or any of its
Affiliates or Purchaser Affiliates, as the case may be, to either such Party or
its relevant Affiliate or Purchaser Affiliate, as the case may be, to whom such
amount is owed:

 

(i)                                     if the relevant
parties have agreed in writing a period in which the amount shall be paid, on
or before the end of such period; and

 

(ii)                                  if the relevant
parties have not made such an agreement, on normal commercial terms, but in any
event within 90 days of the Closing.

 

For the avoidance of
doubt, it is understood that no claim for payment can be made to the extent
amounts are provided or written off in respect thereof in the Final Effective
Date Balance Sheet.

 

SECTION 5.11.                 Discharge of Directors and Related
Matters.  (a)  Prior to or at the Closing, each member of
the board of each OGP Subsidiary listed in Section 5.11 of the Disclosure
Schedule, as updated by written notice from ABB to Purchaser to the extent a
person ceases to be a director of an OGP Subsidiary and may be replaced, shall
deliver a resignation 

 

55

 

letter in the form
attached as Exhibit N of such position to Purchaser, such resignation to become
effective at the Closing.  Purchaser
shall cause each OGP Subsidiary to hold such board or shareholders’ meetings as
may be required in order to elect a new board of directors.  Purchaser shall cause each OGP Subsidiary to
promptly thereafter make all necessary filings with the relevant Governmental
Authorities and take all other necessary action to register in the applicable
public registry the resignation of the retiring board members.

 

(b)                                 Purchaser
shall cause, at the first shareholders’ meeting or otherwise whenever the
question of discharge is raised after the Closing, each member of the board of
each OGP Subsidiary and, where applicable, each managing director of each OGP
Subsidiary (other than any member of the board or managing director of an OGP
Subsidiary who shall become an OGP Employee) to be discharged in full from any
Liability resulting from such Person’s role as a member of the board of such
OGP Subsidiary or as managing director of such OGP Subsidiary, as the case may
be, in respect of the period prior to the Closing.

 

(c)                                  If
discharge of liability does not occur for any member of the board or the
managing director of any OGP Subsidiary in accordance with
Section 5.11(b), Purchaser shall not, and shall cause each such OGP
Subsidiary not to, pursue any claim for damages against any such Person arising
out of or relating to his role as a member of the board or a managing director
of such OGP Subsidiary.

 

(d)                                 ABB
agrees with Purchaser:  (i) that the
giving by any OGP Subsidiary or any of their respective directors, officers,
employees, agents or advisers (past or present) or any director, officer or
employee of ABB or its Affiliates who, following Closing, will be a director,
officer or employee of Purchaser, an OGP Purchaser, JV Company or OGP
Subsidiary or any Purchaser Affiliate to ABB or any ABB Representative (past or
present) of any information or opinion in connection with the warranties
contained in this Agreement, the Disclosure Schedule or otherwise in
relation to the business or affairs of any OGP Subsidiary, Asset Seller
(relating to the OGP Business) or JV Company in connection with the negotiation
and preparation of this Agreement or the Disclosure Schedule shall not be
deemed to be a representation, warranty or guarantee to ABB of the accuracy of
such information or opinion; (ii) to waive any right or claim which it may have
against any OGP Subsidiary or any of their respective directors, officers or
employees or any director, officer or employee of ABB or its Affiliates who,
following Closing, will be a director, an officer or employee of the Purchaser,
an OGP Purchaser, JV Company or an OGP Subsidiary or any Purchaser Affiliate
for any error, omission or misrepresentation in any such information or opinion
other than any such error, omission or misrepresentation resulting from the
fraudulent or willful misconduct of any such Persons; and (iii) that any such
right or claim shall not constitute a defense to any claim by Purchaser under
or in relation to this Agreement (including the warranties).

 

SECTION 5.12.                 Insurance.  (a)  Purchaser agrees and
acknowledges that none of the insurance policies of ABB and its Affiliates
(other than those of the OGP Subsidiaries) will provide insurance coverage in
respect of the OGP Subsidiaries or the OGP Assets for losses or liabilities
which are incurred or suffered in respect of the period on or after the Closing
Date or, except as provided in Section 5.12(b), for losses or liabilities
which are suffered or incurred in respect of the period prior to the Closing
Date.

 

56

 

(b)                                 Purchaser and each OGP
Subsidiary shall be entitled after the Closing Date to notify claims under
insurance policies held by ABB and its Affiliates (other than insurance policies held by
any OGP Subsidiary) written on a losses occurring basis (“ABB Occurrence Policies”) in respect of any insured
loss or liability incurred or suffered by any OGP Subsidiary prior to the
Closing Date (collectively, “Pre-Closing Losses”); provided that
Purchaser shall pay or reimburse ABB and/or its Affiliates for
any and all retrospective insurance premiums, self-insured retentions, deductibles,
retentions, and related insurance program expenses; and further   provided that, only
with respect to claims notified not more than five years from the Closing Date,
such reimbursement shall not be in excess of an amount that would have been
reimbursed to the OGP Business as of the date of this Agreement in accordance
with the captive insurance arrangements of the OGP Business as of such date,
including claims handling fees, taxes, residual market loadings and state
surcharges incurred or suffered by ABB and its Affiliates
(including ABB Insurance Limited) as a result of such claims.  For the avoidance of doubt, Purchaser shall
be entitled to notify claims under ABB Occurrence Policies which are insured or
reinsured by ABB Insurance Limited for a period not to exceed five years after
the Closing Date; provided, however, that this shall not preclude
any claims from being notified under any ABB Statutory Occurrence Policy
following the expiration of such five-year period.

 

(c)                                  At any time following the
Closing, as soon as reasonably practicable following receipt of a written
request from Purchaser or a Purchaser Affiliate, ABB shall disclose the extent
to which the captive insurance retention has been eroded in respect of any
years set forth in such written request.

 

(d)                                 Where any asset of the OGP
Business has been damaged or destroyed or liability has been incurred between
the date of this Agreement and Closing, ABB shall ensure that, or shall procure
that any Affiliate (other than an OGP Subsidiary) shall ensure that, to the
extent any insurance proceeds have not been applied to remedy such liability,
damage or destruction, all the relevant insurance proceeds received by such
Affiliate and captive reimbursement of group deductible which is transferred to
the OGP Business in respect of the damaged or destroyed assets are paid to
Purchaser or an OGP Purchaser (as agent for the insured), as the case may be,
upon the earlier of the Closing or within three Business Days of receipt, in
either case to Purchaser’s Account.

 

(e)                                  All monies payable in
respect of any claim duly notified by Purchaser or any OGP Subsidiary, pursuant
to Section 5.12(b), to the extent the relevant Losses have not been
specifically provided for and any insurance proceeds receivable with respect to
a relevant Loss have not been recognized in the Final Effective Date Balance
Sheet, shall be payable directly to the appropriate third party claimant as
directed by Purchaser or any OGP Subsidiary.

 

(f)                                    ABB shall, at the cost of
Purchaser, provide and procure such reasonable assistance and information as
Purchaser may request to enable Purchaser or any OGP Subsidiary to collect
valid claims and to exercise its rights under this Section 5.12.

 

SECTION 5.13.                 Certain Contracts.  With respect to any contract or agreement,
and any sale and purchase order, bid or offer, entered into or made by, to or
on behalf of any Asset Seller relating to the OGP Business (other than
contracts, agreements, bids and offers constituting Purchased Assets),
Purchaser shall, or shall cause the relevant OGP Purchaser or 

 

57

 

OGP Subsidiary to, after
the Closing, duly perform the portion of such contract or agreement or sale and
purchase order, or any contract or agreement or sale and purchase order
resulting from such bid or offer, relating to the OGP Business in all material
respects in accordance with the terms and conditions of such contract or
agreement or sale and purchase order and Purchaser or the relevant OGP Purchaser
shall be entitled to all benefits under such contract or agreement or sale and
purchase order to the extent relating to the OGP Business.  Upon the request at any time by either
Party, the Parties shall use all reasonable efforts to ensure that their respective
Affiliates, or in the case of Purchaser, the Purchaser Affiliates and the
Investors, enter into agreements in form and substance reasonably satisfactory
to each of them formalizing the arrangements referred to in this
Section 5.13.

 

SECTION 5.14.                 Transaction Financing.  (a) 
Purchaser agrees to use reasonable best efforts to cause the Purchaser
Financing Documents to become unconditional in accordance with their respective
terms and to cause the facilities thereunder to be available to Purchaser and
the OGP Purchasers on the Closing Date.

 

(b)                                 Prior
to the Closing, Purchaser shall not amend or waive any of the Purchaser
Financing Documents in a manner adverse in any material respect to ABB without
the prior written consent of ABB, which consent shall not be unreasonably
withheld or delayed.

 

SECTION 5.15.                 Notification.  (a) 
Subject to Section 5.06, prior to the Closing each Party shall, or
shall cause its Affiliates or in the case of Purchaser, the Purchaser
Affiliates and the Investors to, promptly (and in any event within three
Business Days) notify the other Party in writing upon becoming aware of, and
will promptly (and in any event within three Business Days) provide the other
Party with true and complete copies of any and all information or documents
relating to, and will use all commercially reasonable efforts to cure before
the Closing, (i) any event, circumstance, fact or occurrence arising subsequent
to the date of this Agreement that would be reasonably expected to (A) result
in any material breach of a representation or warranty or covenant of such
Party in this Agreement or, in the case of Section 3.07(iv), any breach
regardless of materiality, (B) have the effect of making any representation or
warranty of such Party in this Agreement untrue or incorrect in any material
respect as of the Closing or, in the case of Section 3.07(iv), any breach
regardless of materiality or (C) result in a Material Adverse Effect, and (ii)
any Action to which it, or any Affiliate, is a party and which seeks to prevent
or materially delay the consummation of the transactions contemplated hereby,
including satisfaction of the conditions contained in Article VIII.  Each notice given pursuant to this
Section 5.15 shall specify the materiality of the matters contained
therein and include the amount of Loss (actual or estimated), method of
computation of such Loss, and the facts and circumstances surrounding such
matter in reasonable detail, in each case to the extent relevant or
appropriate.

 

(b)                                 Subject
to Section 10.01, no notice given pursuant to this Section 5.15 shall
have any effect on the representations, warranties, covenants or agreements
contained in this Agreement for purposes of determining satisfaction of any
condition contained herein or shall in any way limit any Party’s right to
indemnity under Article IX of this Agreement.  In addition, the failure of any Party hereto to give a notice
required by this Section 5.15 shall not be considered for purposes of
determining the satisfaction of the conditions set out in Sections 8.02(a) and
8.03(a).

 

58

 

SECTION 5.16.                 Other Bidders.  ABB shall procure the assignment to
Purchaser of the benefit of the confidentiality provisions of all
confidentiality agreements and undertakings given by any other potential
purchaser of the OGP Business but only to the extent that:

 

(a)                                  such
assignment is not prevented by the terms of such agreements and undertakings;
and

 

(b)                                 such
confidentiality provisions relate to the OGP Business.

 

ABB will send a letter as
soon as reasonably practicable following the Closing (in a form to be agreed
with Purchaser) to the other parties to such agreements and undertakings
requesting the return of all Information (as defined in such agreements or undertakings)
or requesting certification of its destruction to Purchaser in each case in
accordance with the terms of such agreements and undertakings.  If such confidentiality undertakings or
arrangements are not assignable, ABB shall, at the discretion, cost and expense
of Purchaser, enforce the terms of such confidentiality undertakings or
arrangements.

 

SECTION 5.17.                 Further Action.  Each of the Parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or advisable under applicable
Law, and execute and deliver such documents and other papers, as may be
required to carry out the provisions of the Transaction Agreements.

 

SECTION 5.18.                 Misplaced Assets.  (a) 
From and after the Closing, to the extent it is determined that any
right, title or interest in or to any Purchased Asset (excluding contracts for
which a third party consent has not been received) has not been transferred to,
or has not vested in, Purchaser or the relevant Purchaser Affiliate
(hereinafter, a “Misplaced Asset”) and Purchaser gives ABB written
notice of the same:

 

(i)                                     ABB shall provide
such assistance (at ABB’s cost) to Purchaser or such OGP Purchaser as Purchaser
reasonably requires for the purposes of Section 5.18(a)(ii) below;

 

(ii)                                  ABB shall transfer,
or procure the transfer of, such Misplaced Asset together with any benefit or
sum (net of tax and other reasonable out-of-pocket expenses) accruing to
Purchaser or an OGP Purchaser as a result of holding such Misplaced Asset, as
soon as practicable, to such person as Purchaser shall direct on terms that no
consideration is provided by any person for such transfer; and

 

(iii)                               ABB or the relevant
Asset Seller shall hold such Misplaced Asset in trust for Purchaser or the
relevant OGP Purchaser until title in such Misplaced Asset is effectively
vested in Purchaser or the OGP Purchaser.

 

(b)                                 From
and after the Closing, to the extent it is determined that an asset which does
not form part of the Purchased Assets has been transferred to, or has vested
in, Purchaser or a Purchaser Affiliate and ABB gives Purchaser written notice
of the same:

 

59

 

(i)                                     Purchaser shall
provide such assistance to ABB (at Purchaser’s cost) or such of the Asset
Sellers as ABB reasonably requires for the purposes of Section 5.18(b)(ii)
below;

 

(ii)                                  Purchaser shall
transfer, or procure the transfer of, such asset, together with any benefit or
sum (net of tax and other reasonable out-of-pocket expenses) accruing to ABB or
one of the Asset Sellers as a result of holding such asset, as soon as
practicable, to such person as ABB shall direct on terms that no consideration
is provided by any person for such transfer; and

 

(iii)                               Purchaser or the
relevant OGP Purchaser shall hold such asset in trust for ABB or the relevant
Asset Seller until title in such asset is effectively vested in ABB or the
Asset Seller.

 

SECTION 5.19.                 Information and Funds Received
Covenants.  (a)  From and after the Closing, ABB undertakes
to Purchaser to:

 

(i)                                     forward and
transfer to Purchaser as soon as practicable, any documents, information,
communications or correspondence which ABB or any of its Affiliates may receive
from time to time in relation to the OGP Business or the Purchased Assets that
should properly have been sent to the OGP Business;

 

(ii)                                  forward and transfer
to Purchaser any payments in relation to the OGP Business or the Purchased
Assets that should properly have been paid to the OGP Business within three (3)
Business Days of the discovery by ABB or disclosure by Purchaser of such
payments.  Payments received by ABB or
any of its Affiliates in relation to the OGP Business or Purchased Assets that
should properly have been paid to the OGP Business shall be held by them as
trustee on trust for Purchaser, pending such transfer; and

 

(iii)                               forward and transfer to
Purchaser interest on payments received by ABB or its Affiliates for the
account of Purchaser and held by ABB or its Affiliates for more than three (3)
Business Days, which interest shall accrue following the expiration of such
three (3) Business Day period at the equivalent daily rate of 1.25% per annum;

 

(b)                                 From
and after the Closing, Purchaser undertakes to ABB to:

 

(i)                                     forward and
transfer to ABB as soon as practicable, any documents, information,
communications or correspondence which Purchaser or any of the Purchaser
Affiliates may receive from time to time that should properly have been sent to
ABB;

 

(ii)                                  forward and transfer
to ABB any payments in relation to the OGP Business or Purchased Assets that
should properly have been paid to ABB within three (3) Business Days of
discovery by Purchaser or disclosure by ABB of such payments.  Payments so received by Purchaser after
Closing in relation to the OGP Business or Purchased Assets that should
properly have been paid to ABB shall be held as trustee on trust for ABB
pending such transfer; and

 

60

 

(iii)                               forward and transfer to
ABB interest on payments received by Purchaser for the account of ABB or any of
its Affiliates and held by Purchaser for more than three (3) Business Days,
which interest shall accrue following the expiration of such three (3) Business
Day period at the equivalent daily rate of 1.25% per annum.

 

SECTION 5.20.                 Perfection of Intellectual Property
Assignments.  (a)  ABB shall, and shall cause any relevant
Affiliate to, use its reasonable best efforts as soon as reasonably practicable
after the date of this Agreement to file for recordation of the Release of
Security Interest in Patent and Trademarks, dated May 2, 1991, by Citibank N.A.
in favor of Vetco Gray, Inc. in the United States Patent and Trademark Office
to the extent that the filing of such recordations have not been made prior to
the date of this Agreement.  All
reasonable fees and expenses (including, without limitation, professional
charges, Taxes and registry fees) incurred in connection (whether incurred
prior to or after the Closing Date) with the foregoing recordations shall be
for the sole account of ABB.

 

(b)                                 Purchaser
acknowledges and agrees that neither ABB nor any of its Affiliates shall have
any obligation or responsibility for the recordation
of the assignment of the Transferred Intellectual Property by the Asset Sellers
and the IPR Assignors to Purchaser or its designee(s) under the Patent
Assignments; provided, however, ABB shall reimburse Purchaser for
all reasonable fees and expenses (including, without limitation, professional
charges and registry fees) (but excluding internal administrative costs)
incurred by Purchaser or its designee(s) in connection with the foregoing
recordation.

 

SECTION 5.21.                 Grayloc Note.  (a) 
In the event that Chase Manhattan Bank plc (“Chase”) exercises
its option to cause Purchaser to repurchase the Grayloc Note pursuant to the
Note Purchase Agreement dated as of November 20, 2000 between Chase and
ABB Vetco Gray Inc. (the “Chase Sale Agreement”), whether upon default
or otherwise, upon the fulfillment of ABB’s indemnification obligation pursuant
to Section 9.03(a)(xi), Purchaser shall transfer to ABB the Grayloc Note
and all right, interest and title to any and all collateral used as security
for the Grayloc Note.

 

(b)                                 From
and after the Closing, Purchaser shall not, and shall cause the Purchaser
Affiliates not to, take any action that would result in a variation of the
terms of or in any material respect would otherwise have an adverse effect on
the rights of ABB in the event that the Grayloc Note is transferred to ABB.

 

SECTION 5.22.                 Shared Real Property.  (a) 
The Parties acknowledge that the OGP Real Property described on
Section 5.22 of the Disclosure Schedule constitutes each real
property (each, a “Shared Real Property”) that (i) with respect to
leased real property, is (A) leased by ABB or an Affiliate of ABB other than an
OGP Subsidiary or an Asset Seller relating to the OGP Business and occupied, in
whole or in part, by an OGP Subsidiary or an Asset Seller relating to the OGP
Business or (B) Leased Real Property and occupied, in whole or in part, by ABB
or an Affiliate of ABB other than an OGP Subsidiary or an Asset Seller relating
to the OGP Business or (ii) with respect to owned real property, is (A) owned
by ABB or an Affiliate of ABB other than an OGP Subsidiary or an Asset Seller
relating to the OGP Business and occupied, in whole or in part, by an OGP
Subsidiary or an Asset Seller relating to the OGP Business or (B) Owned Real
Property and occupied, in whole or in part, by ABB or an Affiliate 

 

61

 

of ABB other than an OGP
Subsidiary or an Asset Seller relating to the OGP Business, whether pursuant to
lease, license or otherwise. 
Notwithstanding anything else in this Section 5.22(a), the
definition of Shared Real Property shall not include any OGP Real Property that
is governed by a written lease, sublease, license, agreement or other
instrument on the date of this Agreement.

 

(b)                                 ABB
and Purchaser agree that with respect to each Shared Real Property, prior to or
as soon as practicable after the Closing Date each Party shall, or shall cause
their respective Affiliates or Purchaser Affiliates, as applicable, to enter
into commercially reasonable leases, subleases, licenses, agreements and other
instruments in accordance with subsection (c) of this Section 5.22
necessary to allocate between Purchaser and ABB, or their respective Affiliates
or Purchaser Affiliates, as applicable, real property interests consistent with
the real property interests intended to be conveyed pursuant to this Agreement;
provided, however, that notwithstanding anything to the contrary
in this Section 5.22, each lease, sublease, license, agreement or other
instrument executed in connection with this Section 5.22 shall be for a
term which is the shorter of 12 months from the Closing Date or the remainder
of the governing real property interest, unless the Parties mutually agree in
writing to a longer term. 
Notwithstanding anything in this Section 5.22(b) to the contrary,
for any Shared Real Property that is subject to a Deferred Transfer Agreement,
each lease, sublease, license, agreement or other instrument executed in
connection with this Section 5.22 shall be for a term ending on the later
of the date that is 12 months from the Closing Date or three months from the
Subsequent Closing Date (as defined in the Deferred Transfer Agreement) unless
the Parties mutually agree in writing to a longer term.

 

(c)                                  The
allocation between ABB, or its applicable Affiliate, and Purchaser, or an OGP
Purchaser, of the real property interests in the Shared Real Property shall be
on the following terms (unless otherwise agreed to between the Parties);

 

(i)                                     such allocation
shall be subject to the terms of all applicable leases, subleases, licenses,
agreements and other instruments affecting such Shared Real Property (including
the procurement of all required consents and approvals; except for consents or
approvals of ABB or any Affiliate of ABB which shall be deemed hereby granted
to the extent such consents or approvals are required);

 

(ii)                                  such allocation shall
be based upon a proportionate allocation of each Party’s use or occupancy of
such property, as such allocation shall be reasonably estimated by ABB, based
upon the historical practices and charges between Affiliates of ABB prior to
the Closing Date;

 

(iii)                               before and after such
allocation, ABB’s, or its applicable Affiliate’s, interest in such property
shall be substantially similar to the interest of ABB or such Affiliate in such
property (exclusive of the interest of the respective OGP Subsidiary or Asset
Seller relating to the OGP Business) immediately prior to the transfer of the
Seller’s interest in such property;

 

(iv)                              after such allocation,
Purchaser’s, or the OGP Purchaser’s, interest in such property shall be
substantially similar to the interest of the OGP Subsidiary or Asset 

 

62

 

Seller relating to the
OGP Business in such property immediately prior to the transfer of the Seller’s
interest in such property;

 

(v)                                 before and after such
allocation, the terms and conditions of ABB’s, or its applicable Affiliate’s,
rights and obligations with respect to such property shall be substantially
similar to the rights and obligations of ABB or such Affiliate in such property
(exclusive of the rights and obligations of the respective OGP Subsidiary or
Asset Seller relating to the OGP Business) immediately prior to the transfer of
the Asset Seller’s interest in such property;

 

(vi)                              after such allocation,
Purchaser’s, or the applicable OGP Purchaser’s, rights and obligations with
respect to such property shall be substantially similar to the rights and
obligations of the applicable OGP Subsidiary or Asset Seller relating to the
OGP Business in such property immediately prior to the transfer of the Asset
Seller’s interest in such property; and

 

(vii)                           from the Closing Date until
such time as any such lease, sublease, license, agreement or other instrument
has been executed and becomes effective, the Parties agree that they, or their
respective Affiliates, shall each be responsible for their respective share of
all costs (including rent) relating to, and shall make ordinary payments with
respect to, such Party’s use and occupancy of such property in accordance with
the allocation provisions of this Section 5.22(c).

 

(d)                                 ABB
shall use its, and shall cause the OGP Subsidiaries and the Asset Sellers to
use their, reasonable efforts to obtain such third party consents as are
required to permit Purchaser or the OGP Purchaser to occupy and use any Shared
Real Property.

 

(e)                                  In
the event that the current occupant is denied the continued use of any of the
leased premises as a result of the inability of ABB to procure a necessary
third party consent, ABB shall indemnify and hold Purchaser and the Purchaser
Affiliates harmless for Losses attributable to any increase in rent paid for a
reasonably comparable substitute premises during the remaining term of such
Lease; provided, however, that the maximum amount payable to
Purchaser or the Purchaser Affiliates pursuant to this Section 5.22(e)
shall be equal to the difference between (i) the rent expense for such party
with respect to the substitute premises (or if such substitute premises are of
a superior quality to the leased premises, the rent for comparable properties),
less (ii) the rent expense pursuant to the applicable Lease.  For the purpose of clarity, neither ABB nor
any of its Affiliates shall be responsible for any other costs or expenses of Purchaser
or any of the Purchaser Affiliates including relocation expenses.

 

SECTION 5.23.                 Derivatives.  (a)  Definitions.  As used in this Section 5.23, the
following terms have the following meanings:

 

“Derivative Contracts”
means all Ordinary Course Derivative Contracts and all Non-Ordinary Course
Derivative Contracts other than the Excluded Derivative Contracts.

 

“Derivative Valuation
Bank” means Credit Suisse First Boston, Zürich or, failing its ability to
provide the relevant information and in the absence of the Parties being able
to agree upon a suitable replacement within ten Business Days, such other bank
of international repute 

 

63

 

able to provide the
requisite information required pursuant to this Section 5.23 appointed
upon the application of either Party to the President of the Institute of
Chartered Accountants of England and Wales.

 

“Excluded Derivative
Contracts” means any Derivative Contract where a party thereto is subject
to a Subsequent Closing (as defined in the Deferred Transfer Agreement and
which shall be terminated in accordance with the terms of the Deferred Transfer
Agreement).

 

“Non-Ordinary Course
Derivative Contracts” means any derivative contracts which are outstanding
as at Closing and which are not Ordinary Course Derivative Contracts.

 

“Ordinary Course
Derivative Contracts” means any derivatives contracts between any OGP
Subsidiary, on the one hand, and ABB or any of its Affiliates (other than an
OGP Subsidiary) or another third party, on the other hand, that are outstanding
at Closing and that were entered into (i) for the primary purpose of
hedging currency risk, interest rate risk or raw materials pricing risk in
connection with the OGP Business or (ii) in accordance with the documented
hedging policies (dated on or prior to the date of entry into such relevant
contract) of the OGP Business.

 

“Undisclosed
Derivative Contracts” means those derivative contracts (other than those
derivative contracts entered into by an OGP Subsidiary in the ordinary course
of business after the date of this Agreement and prior to the Closing in
compliance with Section 5.03) which are not set forth in Section 5.23
of the Disclosure Schedule.

 

(b)                                 Notice
of Derivative Contracts.  Not less
than five Business Days prior to Closing, ABB shall provide to Purchaser an
initial notice listing Derivative Contracts to be terminated in accordance with
Section 5.23(c) and thereafter ABB may provide subsequent similar notices
with respect to additional Derivative Contracts to be terminated in accordance
with Section 5.23(c) (each such notice, a “Termination Notice”),
specifying in each case whether such contract is an Ordinary Course Derivative
Contract or a Non-Ordinary Course Derivative Contract.

 

(c)                                  Termination.  ABB shall cause the early termination of all
Derivative Contracts set out in each Termination Notice as soon as reasonably
practicable after the Closing, but in any event within 30 days of Closing (each
such date of termination, an “Early Termination Date”).  This Section 5.23(c) shall not apply to
those Ordinary Course Derivative Contracts between an OGP Subsidiary and a
third party not an Affiliate of ABB, which contracts Purchaser may terminate at
any time after the Closing without any liability to ABB or any of its
Affiliates.

 

(d)                                 Valuation.  On the applicable Early Termination Date or,
if the Parties agree that there is material market disruption on a proposed
Early Termination Date in respect of any Derivative Contract, such other date
as the Parties may agree in good faith (and all references in this
Section 5.23 to the Early Termination Date in respect of those Derivative
Contracts shall be deemed to refer to such other date), ABB shall calculate the
fair market value in U.S. dollars of each applicable Derivative Contract to the
relevant OGP Subsidiary to be terminated based on the prevailing spot market
rate at 11 a.m. (Zürich
time) on the Early Termination Date as determined by the Derivative Valuation
Bank.  On the Business Day following an
Early 

 

64

 

Termination Date, ABB
shall deliver to Purchaser a statement setting forth the amounts so determined
in accordance with this Section 5.23 (a “Settlement Statement”).

 

(e)          (i)  Settlement
of the Ordinary Course Derivatives Contracts.  The fair market values in U.S. dollars of the Ordinary Course
Derivative Contracts finally determined in accordance with Section 5.23(c)
shall be added and netted for each Early Termination Date, and the resulting
figure shall be a “Net Early Termination Amount.”  For the purposes of this
Section 5.23(e) payment to be made pursuant to any early termination (i)
to the OGP Subsidiaries shall be categorized as positive and (ii) to ABB or its
Affiliates (other than the OGP Subsidiaries) shall be categorized as negative.  If a Net Early Termination Amount is
negative, Purchaser shall pay, or cause to be paid, to ABB by wire transfer of
immediately available funds the absolute value of the Net Early Termination
Amount.  If the Net Early Termination
Amount is positive, ABB shall pay, or cause to be paid, to Purchaser by wire
transfer of immediately available funds, the Net Early Termination Amount.  The Net Early Termination Amount shall be
payable by the applicable Party on or prior to the tenth Business Day following
completion of the valuation of all of the Ordinary Course Derivative Contracts
terminated on such Early Termination Date in the manner contemplated by
Section 5.23(d).  Subject to
Section 5.23(e)(ii), payment of such amount shall be deemed to satisfy all
outstanding obligations of the parties to those Ordinary Course Derivative
Contracts set out in the relevant Termination Notice and no further amounts
shall be payable with respect thereto.

 

(ii)                                  Settlement
of Non-Ordinary Course Derivative Contracts.  ABB shall reimburse Purchaser for an amount equal to (A) all
amounts owing by it to a counterparty as a result of the termination by an OGP
Subsidiary of Non-Ordinary Course Derivative Contracts being negative (in
accordance with the finally determined Settlement Statement) plus (B) any
administrative or other reasonable costs incurred by Purchaser in connection
with the termination of such Non-Ordinary Course Derivative Contracts, which
amount shall be netted against all amounts owed (net of any administrative
costs or other reasonable costs (including Taxes) incurred by Purchaser in
connection with the termination of such Non-Ordinary Course Derivative
Contracts) to the OGP Subsidiaries by counterparties as a result of the
termination of Non-Ordinary Course Derivative Contracts being positive (in
accordance with the finally determined Settlement Statement).

 

(f)                                    Undisclosed
Derivative Contracts.  Promptly
after the Closing but in any event within 20 days after the Closing, Purchaser
shall notify ABB in writing of any Undisclosed Derivative Contracts, specifying
in each case whether such contract is an Ordinary Course Derivative Contract or
a Non-Ordinary Course Derivative Contract (such notice to be considered a
Termination Notice for the purposes of this Section 5.23(f) only).  Such Undisclosed Derivative Contracts shall
be valued and settled in the same manner as other Derivative Contracts pursuant
to this Section 5.23.  ABB shall
reimburse Purchaser for any administrative switching costs (but no other
payments due pursuant to the terms of such Derivative Contracts) incurred by it
in connection with the entering into of replacement derivative contracts for
such Undisclosed Derivative Contracts if the aggregate of such costs exceeds
$500,000 but only to the extent such costs exceed $500,000.

 

SECTION 5.24.                 Migration Plan.  (a) 
No later than three months after the Closing Date, ABB and Purchaser
shall agree to a plan (the “Migration Plan”) to implement the 

 

65

 

migration of certain
information technology infrastructure, data and applications from ABB to a new
information technology infrastructure and application structure designed for
use by the OGP Business after the Closing (the “New OGP Infrastructure”).  The Migration Plan shall specify each of
ABB’s and Purchaser’s responsibilities and costs in implementing the Migration
Plan.  Each of ABB and Purchaser shall
use commercially reasonable efforts and cooperate with each other to implement
their respective responsibilities under the Migration Plan.

 

(b)                                 Except
as expressly agreed in the Migration Plan, ABB and Purchaser agree that the
design and buildup of the New OGP Infrastructure shall be the sole
responsibility and cost of Purchaser. 
To the extent that specialized knowledge of ABB is required in the
design of the New OGP Infrastructure, ABB shall assist Purchaser in this regard
at no cost to ABB.  Purchaser may, but
is not obligated to, engage ABB to provide consulting services and engineering
support, at Purchaser’s cost, in connection with the buildup of the New OGP
Infrastructure.

 

(c)                                  ABB’s
compliance with this obligation shall not be considered in determining whether
Section 8.03(a) has been satisfied on the Closing Date.

 

SECTION 5.25.                 Software Matters.  (a) 
Subject to the terms and conditions set forth below, effective as of the
completion of the Closing, ABB, on behalf of itself and its applicable
Affiliates, hereby grants to Purchaser and the OGP Subsidiaries a non-exclusive,
royalty-free, paid-up, perpetual, irrevocable, worldwide, “as-is” license of
the proprietary rights of ABB and its applicable Affiliates in the following to
use, copy, adapt and create derivative works of the following (as the following
may exist as of the Closing Date):

 

(i)                                     the data shell
used to hold data relevant to the OGP Subsidiaries in the database referred to
as “ABACUS” (the “ABACUS Data Shell”) for the OGP Subsidiaries’ own
internal use;

 

(ii)                                  the customized
version of the Internet website platform known as “CAWP” (the “Customized
CAWP Platform”) for the OGP Subsidiaries’ own internal use;

 

(iii)                               ABB Brazil’s
customizations to the BaaN enterprise resource planning system and the data
dictionary used in connection therewith (the “BaaN Customizations”) for
the OGP Subsidiaries’ own internal use; and

 

(iv)                              each
Lotus Notes database (excluding any data or content stored therein that does
not relate to the OGP Business) that, as of the Closing Date, is hosted by ABB
or its Affiliates and used in the conduct of the OGP Business, which Lotus
Notes databases shall be identified in the Migration Plan (the “Shared Lotus
Notes Databases”), in each case, for the OGP Subsidiaries’ own internal
use.

 

(b)                                 The
licenses granted above in clause (a) shall not include any right of the OGP
Subsidiaries to use or distribute copies of the ABACUS Data Shell, the
Customized CAWP Platform, the BaaN Customizations and the Shared Lotus Notes
Databases outside the OGP Business.

 

66

 

(c)                                  The
Parties agree that the delivery of the copies of the ABACUS Data Shell, the
Customized CAWP Platform, the BaaN Customizations, the BaaN enterprise resource
planning system and the Shared Lotus Notes Databases (in object code, and to
the extent in the possession of ABB and its applicable Affiliates, in source
code) shall be made in accordance with and subject to the Migration Plan.

 

(d)                                 The
licenses granted in clause (a) and the delivery of the copies under clause (c)
shall be subject to the rights of applicable third party vendors in the
underlying intellectual property and underlying software, and other contractual
restrictions or limitations on ABB and its applicable Affiliates, including,
without limitation, the applicable terms, conditions and restrictions under the
Agreement, dated January 1, 2003, between ABB Corporate Management
Services AG and Bekk Consulting AS.

 

(e)                                  ABB
shall, or shall cause its applicable Affiliate to, at the Closing Date, create
a record of all financial data in the BaaN enterprise resource planning system
and the MasterSAF financials system used by the OGP Business in Brazil
(collectively, the “Brazilian ERP System”), which data relate to the
period commencing on the first date of the applicable financial fiscal year of
2002 and ending on the Closing Date. 
This record shall be recorded on an appropriate storage medium (separate
from the storage medium used for routine archival purposes), and ABB or its
applicable Affiliate shall, in accordance with and subject to the Migration
Plan, deliver such storage medium to Purchaser or its designee as soon as
practicable following the Closing Date.

 

(f)                                    Purchaser
and the OGP Subsidiaries acknowledge and agree that except as otherwise
provided in the Transition Services Agreement, ABB and its Affiliates shall
have no obligations or responsibilities regarding the performance, maintenance,
support, hosting, export, migration, set-up or any other matters regarding the
use of the ABACUS Data Shell, the Customized CAWP Platform, the BaaN
Customizations, the Brazilian ERP System and the Shared Lotus Notes
Databases.  For the avoidance of any
doubt, except as specifically provided in this Agreement and in the Migration
Plan, nothing herein obligates ABB to transfer or license any proprietary data
or content or any third party owned applications and services used in
conjunction with the ABACUS Data Shell, the Customized CAWP Platform, the BaaN
Customizations, the Brazilian ERP System and the Shared Lotus Notes Databases.

 

(g)                                 Purchaser
and the OGP Subsidiaries may freely assign, sublicense or otherwise transfer
any of the rights granted under Section 5.25(a) to any Person who acquires
that portion of the OGP Business to which those rights pertain, including,
without limitation, by merger, consolidation, amalgamation, reorganization or
disposition of stock or sale of assets, or to any Purchaser Affiliate or the
OGP Subsidiaries that conduct the OGP Business, in each case as long as such
entity conducts the OGP Business. 
Sections 5.25(b), (d) and (f) and any other restrictions under this
Section 5.25 shall be binding on all such permitted assigns, sublicensees
and transferees, and the Purchaser and the OGP Subsidiaries shall remain liable
hereunder for the performance of all such permitted assigns, sublicensees and transferees.

 

(h)                                 Notwithstanding
anything to the contrary in this Agreement and the Related Agreements, all
transfer or buyout fees associated with the transfer of the Transferred
Software Licenses that are charged by applicable third party vendors to ABB or
its Affiliates shall be 

 

67

 

borne by Purchaser.  To the extent that Purchaser does not agree
to bear any such transfer or buyout fees with respect to a particular
Transferred Software License, ABB and its Affiliates shall have no obligation
or responsibility with respect to such particular Transferred Software License
under the transactions contemplated under this Agreement.

 

SECTION 5.26.                 Waiver of Termination Rights Under
Norwegian Leases.  ABB or the
applicable Affiliate of ABB hereby waives any right to terminate each of the
following Leases:  (i) the lease of
Bergerveien 12, 1396 Billingstad, Asker, Building 4, “Lavbygget” dated
December 20, 2001 made between ABB Eiendom AS and ABB Offshore Systems AS,
(ii) the lease of Bergerveien 12, Building 1, 5th floor, H-blokk,
1396 Billingstad dated September 29, 2000 made between ABB Eiendom AS and
ABB Offshore Systems AS, (iii) the lease of Bergerveien 12, building 1, 4th
floor, 1396 Billingstad dated March 3, 2003 made between ABB Eiendom AS
and ABB Offshore AS, (iv) the lease of Bergerveien 12, Building 1, 3rd floor,
1396 Billingstad dated July 1, 2003 made between ABB Eiendom AS and ABB OS
AS and (v) the lease of Bergerveien 12, Buildings 6 and 7, 1396 Billingstad
dated September 7, 1999 made between ABB Eiendom AS and ABB Offshore
Systems AS and certain other parties, (vi) lease of Bergerveien 12, Building 2,
basement dataroom, 1396 Billingstaad dated October 1, 2003 made between
ABB Eiendom AS and ABB Offshore Systems AS and (vii) lease of Bergerveien 12,
Building 4, “Lavbygget” lab and storage dated February 15, 2003 between
ABB Eiendom AS and ABB Offshore Systems AS, in each case as such rights may
arise as a result of any change of control caused by the execution, delivery
and performance of the Transaction Agreements.

 

SECTION 5.27.                 Amendments to Subleases at
Briarpark, Houston, Texas.  ABB and
Purchaser agree that none of the terms and conditions of any of the Leases
shall be amended, except the term of the sublease at Briarpark in Houston,
Texas, which shall expire 24 months following the Closing Date.

 

SECTION 5.28.                 Non-Competition Agreement Payment.  Immediately following the Closing, and
notwithstanding any other provision of the Transaction Agreements, Purchaser
shall (insofar as payment obligations relate to it) pay and shall (insofar as
payment obligations relate to the Purchaser Affiliates) cause the applicable
Purchaser Affiliates to pay to ABB an aggregate of $78,000,000 in cash for the
Non-Competition Agreement in accordance with its terms.  Each of ABB and Purchaser shall cause the
relevant Affiliate of ABB and Purchaser Affiliate (as appropriate) to provide
counterparts of such Non-Competition Agreement duly executed by each of their
Affiliates.

 

SECTION 5.29.                 Brazilian Reorganization.  ABB shall cause ABB Ltda. to carry out the
steps set forth in Section 5.29 of the Disclosure Schedule to effect
the transfer of the business and assets of the OGP Business located in Brazil
to ABB Óleo & Gás Ltda. and ABB Óleo e Gás Ltda., Manutencão e Modificacão
Ltda.  ABB’s compliance with this
obligation shall not be considered in determining whether Section 8.03(a)
has been satisfied on the Closing Date.

 

SECTION 5.30.                 Certain Purchaser Reimbursement
Obligations.  (a)  If, at any time after the Closing, any
amounts receivable from Petrobras under the Marlim contract dated
March 11, 1998 are collected by Purchaser or a Purchaser Affiliate which,
when aggregated with the aggregate of all amounts receivable collected after
the Effective Date, are in excess of the 

 

68

 

amounts receivable net of
provisions made in the Final Effective Date Balance Sheet as contemplated by
Section 2.14 of Exhibit E, Purchaser shall promptly pay, or cause to be
paid, to ABB such excess amount.

 

(b)                                 If
the amounts reflected in the Final Effective Date Balance Sheet with respect to
the payments contemplated by Section 2.17(i) of Exhibit E exceed the
actual payments required to be paid in respect thereof, Purchaser shall
promptly pay, or cause to be paid, to ABB such excess amount.

 

SECTION 5.31.                 Sao Paulo Property.  (a) 
In respect of the property at Avenida dos Autonomistas, No. 1496, Vila
Compensina, Osaco, Sao Paulo, Brazil (the “Sao Paulo Property”), ABB
shall or shall cause its applicable Affiliates to use its reasonable efforts to
provide Purchaser and the applicable Purchaser Affiliates, at no cost to
Purchaser, with such assistance and information as each of ABB and its
applicable Affiliates is reasonably able to provide to facilitate the progress
of the applicable Purchaser Affiliate’s application for the environmental
permit required to enable such entity to operate its business from the Sao
Paulo Property.

 

(b)                                 ABB
shall (i) permit Óleo e Gás Ltda to remain in occupation of the part of the Sao
Paolo Property that is the subject of the sublease dated October 1, 2003
(the “Current Sublease”) until the expiry of 12 months following the
Closing and (ii) use all reasonable efforts to obtain the consent of ABB’s
landlord of the Sao Paolo Property to the grant of a further sublease to Óleo e
Gás Ltda for a further term not to exceed two years thereafter, and provided
always that such term does not exceed the term of the lease held by ABB in relation
to the Sao Paolo Property.  Further, if
and upon obtaining such consent, ABB shall grant Óleo e Gás Ltda a further
sublease of the premises that are the subject of the Current Sublease for such
term.

 

(c)                                  ABB’s
compliance with the obligations set forth in Sections 5.31(a) and (b) shall not
be considered in determining whether Section 8.03(a) has been satisfied on
the Closing Date.

 

SECTION 5.32.                 Norwegian Debt.  The Parties shall use their reasonable best
efforts to cause the combined Borrowings of ABB Offshore Systems AS and its
subsidiaries on the Closing Date to be equal to or greater than
$145,000,000.  ABB’s compliance with
this obligation shall not be considered in determining whether
Section 8.03(a) has been satisfied on the Closing Date.

 

SECTION 5.33.                 Angolan Property.  ABB shall use its reasonable best efforts,
or shall cause its Affiliates to use their reasonable best efforts, to obtain
the registration of the property located at 5A Avenida, Cazenga, Luanda, Angola
in the name of Empresa Angola Metalomecanicas SARL as soon as reasonably
practicable following the date of this Agreement.  Purchaser shall not be responsible for any costs or expenses in
connection with ABB’s compliance with this Section 5.33.

 

SECTION 5.34.                 Compliance Review.  The Parties shall conduct the Compliance
Review with a view to the Substantial Completion of the Compliance Review and
the Compliance Disposition occurring prior to the Longstop Date or, if
applicable, the Extended 

 

69

 

Longstop Date or the
Final Longstop Date, as the case may be. 
Notwithstanding the foregoing, the Parties acknowledge and agree that
ABB, in its sole and absolute discretion, may determine whether and to what
extent it disposes of any matters arising as a result of such Compliance
Review.

 

SECTION 5.35.                 No Solicitation of Transactions.  ABB, from the date of this Agreement, shall
not discuss, negotiate or agree to a sale of all or any part of the OGP
Business with any other party (other than Purchaser, the Purchaser Affiliates,
the Investors or the Purchaser Representatives), except as otherwise permitted
pursuant to the Transaction Agreements, nor will it make available any
information to any such party relating to such a sale until the earlier to occur
of:

 

(i)                                     the Closing; or

 

(ii)                                  termination of this
Agreement in accordance with its terms,

 

and ABB shall cause its
Affiliates and the ABB Representatives to do likewise.

 

SECTION 5.36.                 Kizomba B Matter.  (a) ABB shall use its reasonable efforts to
cause the settlement of the Kizomba B Matter as soon as reasonably practicable
after the date of this Agreement and to have the parties to such settlement
agree to have any payment made thereunder categorized as a “finder’s fee
payment” and under no circumstances categorized as an “Intellectual Property
license fee” (or derivative thereof). 
ABB’s compliance with this obligation shall not be considered in
determining whether Section 8.03(a) has been satisfied on the Closing
Date.

 

(b)                                 To
the extent the settlement described in Section 5.36(a) is consummated in
whole or in part after the Closing Date, Purchaser shall cause the relevant OGP
Subsidiaries and/or OGP Purchasers to honor the obligations of such OGP
Subsidiaries under such settlement and comply with the terms set forth in such
settlement.

 

SECTION 5.37.                 Purchaser Financing Documents.  ABB shall provide such assistance as may
reasonably be requested by Purchaser in order for Purchaser to achieve
satisfaction of the conditions to the availability of the facilities under the
Purchaser Financing Documents, including passing or causing the passing of
corporate resolutions and executing or causing the execution of other relevant
documentation.

 

ARTICLE VI

EMPLOYEE MATTERS

 

SECTION 6.01.                 Collective Bargaining Agreements.  As of the Closing Date, Purchaser shall
assume, or shall cause the OGP Subsidiaries to assume or retain, as the case
may be, ABB’s and its Affiliates’ obligations under each of the labor,
collective bargaining or other similar agreements or contracts (except, for the
avoidance of doubt, U.S. Employee Plans or Non-U.S. Plans), relating to each
OGP Employee and each Transferred Employee in accordance with the terms of such
agreements or contracts.

 

70

 

SECTION 6.02.                 Service Recognition.  To the extent that service is relevant for
purposes of determining eligibility to participate, vesting and eligibility to
receive benefits, including vacation, sick days, severance and similar benefits
(but not for purposes of benefit accrual) under any retirement plan, employee
benefit plan, program or arrangement established or maintained by Purchaser or
any of the Purchaser Affiliates under which each OGP Employee or each
Transferred Employee may be eligible to participate on or after the Closing
Date, such plan, program or arrangement shall credit such OGP Employee and such
Transferred Employee for all service earned on and prior to the Closing Date
with ABB and its Affiliates, including the OGP Subsidiaries and the Asset
Sellers, or any of their respective predecessors, in addition to service earned
with Purchaser or any of the Purchaser Affiliates after the Closing Date.

 

SECTION 6.03.                 Purchaser Welfare Benefit Plans.  With respect to the employee benefit plans,
programs and arrangements maintained, sponsored or contributed by Purchaser (“Purchaser
Welfare Benefit Plans”), Purchaser shall (a) waive, or cause its insurance
carrier to waive, all limitations as to participation and coverage with respect
to preexisting and at-work conditions, if any, applicable to each OGP Employee
and each Transferred Employee under any Purchaser Welfare Benefit Plan with
respect to any conditions that exist as of the Closing Date and for which such
OGP Employee or Transferred Employee is covered under the plans in which such
OGP Employee or Transferred Employee was participating immediately prior to the
Closing Date and (b) provide credit to each OGP Employee and each Transferred
Employee for any co-payments, deductibles and out-of-pocket expenses paid by
such employees under the employee benefit plans, programs and arrangements of
ABB and its Affiliates, including the OGP Subsidiaries or the Asset Sellers,
during the portion of the relevant plan year including the Closing Date.

 

SECTION 6.04.                 Assumed Obligations.  (a) 
Effective as of the Closing Date, ABB shall assume, or shall cause its
Affiliates to assume, all obligations and liabilities with respect to the ABB
Vetco Gray Inc. Management Deferred Incentive Plan and shall assume the Trust
for the ABB Vetco Gray Inc. Management Deferred Incentive Plan (the “Rabbi
Trust”) and ABB shall ensure, or shall cause its Affiliates to ensure, that
all assets under the Rabbi Trust shall be applied in accordance with the terms
of the Rabbi Trust to satisfy such obligations and liabilities.

 

(b)                                 ABB
shall be responsible for any costs, actions, claims, obligations and
liabilities (if any) whenever arising with respect to any severance benefits
payable to Mr. Erik Fougner pursuant to or arising under the terms of the
employment agreement between Mr. Fougner and ABB Oil, Gas and Petrochemicals
Management Limited dated as of January 14, 2003.

 

SECTION 6.05.                 U.S. Employee Plans.  As of the Closing Date, each OGP Employee
and Transferred Employee shall cease to accrue benefits, if any, under the ABB
Cash Balance Pension Plan, the ABB Supplemental Excess Retirement Plan, the ABB
Retirement Income Restoration Plan, the ABB Deferred Compensation Plan, the
Personal Retirement Investment and Savings Management Plan for Employees of ABB
and all other U.S. Employee Plans which are not maintained solely for the
benefit of OGP Employees, OGP Former Employees and Transferred Employees (other
than the Retiree Health Care Plan (under the ABB Inc. Group Benefit Plan))
(collectively, the “Retained Plans”) and the OGP Subsidiaries shall 

 

71

 

cease to be participating
employers in such plans (as applicable). 
ABB shall, or shall cause its Affiliates to, retain all assets, obligations
and liabilities in respect of the Retained Plans and no assets, obligations or
liabilities with respect to the Retained Plans shall be transferred to
Purchaser as a result of the transactions contemplated by this Agreement.  After the Closing Date, Purchaser shall, and
shall cause the Purchaser Affiliates to, provide such current information to
ABB regarding each OGP Employee and each Transferred Employee on an ongoing
basis as may be necessary and appropriate to facilitate determinations of eligibility
for, and payments of benefits to, such OGP Employees and Transferred Employees
under the Retained Plans.

 

SECTION 6.06.                 Non-U.S. Retirement Plans.  (a) 
Subject to applicable Law, ABB shall consent to the continued
participation of each OGP Subsidiary (and, if applicable, the participation of
Purchaser or the Purchaser Affiliates and the JV Companies) which currently
participates in the Split Plans or the Continued Plans for the Transitional
Period.  Participation in the Split
Plans and the Continued Plans will be limited to OGP Employees and Transferred
Employees (and, if applicable, employees of a JV Company) who are active
members of the Split Plans or the Continued Plans on the Closing Date.  Purchaser shall ensure that each entity
which participates in the Split Plans or the Continued Plans complies in all
respects with the Split Plans or Continued Plans rules and in particular pays
contributions each month to the relevant Split Plans at the rates, in respect
of the ABB UK Plan, set forth in Exhibit P to this Agreement, in respect of the
Norway Split Plans, the amount payable in respect of OGP Employees, OGP Former
Employees and Transferred Employees in accordance with applicable Law and the
Norway Split Plans rules and, in respect of the Continued Plans, the normal
monthly rates in respect of OGP Employees and Transferred Employees determined
in accordance with the Continued Plans rules effective as of the Closing Date
(for the avoidance of doubt no such entity shall make any contribution towards
any defined benefits under the ABB Australian Superannuation Plan).  Purchaser shall ensure that the OGP
Employees’ or Transferred Employees’ pensionable pay (as defined in the Split
Plans) is not increased by more than 4.00% per annum (in respect of the ABB UK
Plan) during or in relation to the Transitional Period except and on terms that
Purchaser ensures that the participating entity pay to the appropriate Split
Plans a sum equal to the value of the benefits attributable to the portion of
the increase in remuneration that is in excess of the percentage increase shown
above (as certified by ABB’s Actuary). 
Where any participating entity exercises an employer discretion under
the rules of the Split Plans which, in the reasonable opinion of ABB’s Actuary,
would increase the value of the benefits under the Split Plans in respect of
Transferred Employees or OGP Employees, Purchaser shall ensure that the
participating entity pays to the appropriate Split Plans a sum equal to that
additional cost as certified by ABB’s Actuary. 
Purchaser and ABB shall ensure that each such participating entity will
stop participating in the Split Plans and the Continued Plans at the end of the
Transitional Period or at any earlier date specified by ABB on 30 calendar
days’ written notice from ABB, if ABB reasonably considers this
Section 6.06(a) has been or is about to be breached in any material
respect.

 

(b)                                 Purchaser
shall cause each person who is a member of one of the Split Plans immediately
before the Transfer Date and who in respect of the ABB UK Plan only has not
attained the normal retirement age under Purchaser’s Scheme and, for the
avoidance of doubt, including in respect of the Norway Split Plans any OGP
Former Employee who has an entitlement or contingent entitlement to benefits
under the Norway Split Plans, to be offered or admitted to membership in
Purchaser’s Scheme with effect on and from the Transfer Date.

 

72

 

Subject to receipt by
Purchasers’ Scheme of the Transfer Amount, Purchaser shall ensure that
Purchaser’s Scheme will provide benefits in respect of service before the
Transfer Date for and in respect of those Transferring Members (i) who were
members of the ABB UK Plan which are substantially identical to or, in the
opinion of ABB’s Actuary and Purchaser’s Actuary, no less favorable than the
benefits accrued by such Transferring Members in the ABB UK Plan before the
Transfer Date (for the avoidance of doubt the analysis of such accrued benefits
will include an allowance for future increases in pensionable pay and will be
determined in accordance with the price adjustment mechanism assumptions) and
(ii) who were members of the Norway Split Plans which are identical to the
Norway Split Plans as determined in accordance with applicable Law.  In providing these benefits, Purchaser shall
use its reasonable best efforts not to trigger any immediate cash contribution
pursuant to the linear funding Laws of the applicable Law.  The form of offer of membership shall (as it
relates to a transfer from the ABB UK Plan) be agreed by ABB (such agreement
not to be unreasonably withheld) before it is issued to the OGP Employees and
Transferred Employees who are members of the Split Plans.

 

(c)                                  The
Transfer Amount shall be paid in accordance with applicable Law or, in the case
of the ABB UK Plan, on the Payment Date for and in respect of each Transferring
Member and shall be calculated as follows: 
(i) in respect of the ABB UK Plan, the value of the full unreduced cash
equivalents (assuming, for the avoidance of doubt, that a member with less than
two years’ qualifying service has a right to a cash equivalent) calculated as
of the Closing Date in accordance with applicable Law as adjusted by the
Investment Adjustment from the Closing Date to the Payment Date together with
the contributions paid (if any) set forth in Exhibit P to this Agreement after
deduction in respect of an allowance for death in service costs and
administration expenses of 2.4% per annum of the pensionable pay/earnings (as
defined in the UK ABB Plan), as adjusted by the Investment Adjustment from the
date of payment of the relevant contribution to the Payment Date and (ii) in
respect of the Norway Split Plans, the transfer value required to be paid by
the Norway Split Plans to Purchaser’s Scheme in accordance with applicable Law.

 

(d)                                 Purchaser
(except in relation to the right to a cash equivalent transfer value of a
Transferring Member of the ABB UK Plan determined in accordance with applicable
Laws) shall not, and it shall use its commercially reasonable efforts to ensure
that Purchaser’s Scheme, the OGP Subsidiaries and (if applicable) the JV
Companies do not, take any action or give direct or indirect financial or other
assistance to any person in taking any action which could reasonably be
expected to result in an amount greater than the Transfer Amount being paid to
Purchaser’s Scheme.

 

(e)                                  Except
as required by any applicable Laws or pursuant to matters disclosed to
Purchaser as of the date of this Agreement: 
(i) in addition, except with the consent of Purchaser (which shall not
be unreasonably withheld), no amendment shall be made by ABB to the Split Plans
which would affect the benefits or contributions payable by or in respect of
any Transferring Member or which would affect the calculation of the Transfer
Amount prior to the end of the Transitional Period and (ii) ABB shall do
nothing to trigger the termination of any of the Split Plans prior to the end
of the Transitional Period in relation to any of the Split Plans.

 

73

 

(f)                                    For
the avoidance of doubt, Purchaser shall assume the assets and obligations in
respect of the Acquired Plans with effect from the Closing Date in accordance
with applicable Laws.

 

(g)                                 On
or after the Closing Date, Purchaser shall be responsible for any liability or
obligation to make payments to the (i) Norway Split Plans in respect of
Transferring Members and OGP Former Employees and (ii) Acquired Plans in Norway
in respect of any OGP Employees or OGP Former Employees.

 

(h)                                 On
or after the Closing Date, ABB shall be responsible for any liability or
obligation to make payments to the (i) ABB UK Plan, Norway Split Plan, ABB
Brazil Pension Plan or Continued Plans (other than contributions that may be
required under such plans pursuant to Sections 6.06(a) through (e) or to the
extent such contributions are provided for in the Effective Date Balance Sheet)
and (ii) Acquired Plans in Norway in respect of any employees who are not OGP
Employees and not OGP Former Employees (except to the extent such contributions
are provided for in the Effective Date Balance Sheet).

 

(i)                                     ABB
and Purchaser shall use their reasonable best efforts to ensure that no later
than the end of the Transitional Period a gratuity fund with the Life Insurance
Corporation of India is available to accept a transfer of assets and
liabilities from the ABB India Employees Gratuity Fund in respect of the OGP
Employees and Transferred Employees.

 

SECTION 6.07.                 Post-Retirement Health and Welfare
Benefits.  Effective as of the
Closing Date, each OGP Employee and each Transferred Employee shall cease to
accrue benefits, if any, under the Retiree Health Care Plan (under the ABB Inc.
Group Benefit Plan) (the “ABB Retiree Medical Plan”) and the OGP
Subsidiaries shall cease to be participating employers in such plan.  Effective as of the Closing Date, Purchaser
shall, or shall cause the OGP Subsidiaries to, assume all liabilities and
obligations that ABB may have to provide benefits under the ABB Retiree Medical
Plan to (a) each OGP Employee, (b) each OGP Former Employee and (c) each
Transferred Employee.  ABB shall, or
shall cause its Affiliates to, retain all liabilities and obligations in
respect of the ABB Retiree Medical Plan other than as provided in the previous
sentences.

 

SECTION 6.08.                 Vesting of Benefits Under Certain
Employee Plans.  (a)  Effective as of the Closing Date, each OGP
Employee and Transferred Employee shall be fully vested (to the extent not
already vested) in his or her account balance under the Personal Retirement
Investment and Savings Management Plan for Employees of ABB.

 

(b)                                 Each
OGP Employee and Transferred Employee shall receive credit for vesting purposes
in accordance with the terms and conditions of the ABB Cash Balance Pension
Plan, the ABB Retirement Income Restoration Plan and the ABB Supplemental
Excess Retirement Plan, to the extent that such OGP Employee or Transferred
Employee participated in such plans as of the Closing Date, for services
performed by such OGP Employee and Transferred Employee with Purchaser and the
Purchaser Affiliates on or after the Closing Date.  ABB and its Affiliates shall cease the accrual of vesting credit
under such plans upon the earlier to occur of (a) the date that an OGP Employee
or a Transferred Employee is fully vested in his or 

 

74

 

her accrued benefit under
such plans and (b) the date that an OGP Employee or a Transferred Employee
terminates employment with Purchaser or any of the Purchaser Affiliates.

 

SECTION 6.09.                 Continued Employment of Transferred
Employees.  (a)  (i) With respect to any Transferred Employee
ordinarily working in any member state of the European Union, the Parties agree
that the sale of the Purchased Assets pursuant to this Agreement will
constitute a “relevant transfer” for the purposes of the Transfer Regulations
and, accordingly, Purchaser shall, or shall cause an OGP Purchaser to, employ
each such Transferred Employee from and after the Closing Date; and (ii) with
respect to any person who has been offered or promised employment with any
Asset Seller in the OGP Business which offer or promise has not yet been
accepted by such person, Purchaser shall, or shall cause an OGP Purchaser to,
honor such offer or promise made to such person.

 

(b)                                 Purchaser
shall use its reasonable best efforts to ensure the making of offers of
employment by an OGP Purchaser to each Transferred Employee (other than those
Transferred Employees to which the provisions of Section 6.09(a) apply),
such offers to be made in advance of and effective as of the Closing Date.  ABB and its Affiliates shall provide such
reasonable assistance, cooperation and all information relating to the
Transferred Employees as may be reasonably requested by Purchaser for the
purposes of making such offers.

 

(c)                                  Effective
as of the Closing, ABB shall give notice of termination, or cause the
termination of the employment of, all Transferred Employees (other than those
Transferred Employees to which the provisions of Section 6.09(a) apply)
and Purchaser shall, or shall cause the relevant OGP Purchaser to, be
responsible for and shall indemnify the ABB Indemnified Parties and keep them
indemnified from and against any and all Employment Costs and Liabilities (except
as otherwise provided in Section 6.06(e)) arising, directly or indirectly,
out of the employment of any such Transferred Employee from the Closing or from
such termination of employment (for whatever reason).

 

(d)                                 Purchaser
shall, or shall cause the relevant OGP Purchaser to, perform and discharge for
its own account all Employment Costs and Liabilities accruing for service on
and after the Closing Date.  In
addition, Purchaser shall, or shall cause the relevant OGP Purchaser to,
perform and discharge for its own account all Employment Costs and Liabilities
accrued but unpaid as of the Closing Date with respect to the OGP Employees and
Transferred Employees.  Unless otherwise
provided in this Agreement, the Related Agreements or the Disclosure Schedule to
this Agreement, after the Closing, Purchaser shall indemnify the ABB
Indemnified Parties and keep them indemnified from and against any and all
Employment Costs and Liabilities relating to the OGP Employees and Transferred
Employees, whether relating to the period prior to or after the Closing.  For the avoidance of doubt, Purchaser shall
not be required to make an indemnity payment pursuant to this
Section 6.09(d) in connection with any matter to the extent that a full
provision is made in the Final Effective Date Balance Sheet pursuant to
Section 2.15 of Exhibit E for such matter.

 

(e)                                  The
Parties agree to use their reasonable best efforts to cooperate in providing
all information and assistance, and in sufficient time, to enable the Parties
to fulfill their respective information and consultation obligations under the
Transfer Regulations and equivalent applicable Law.  ABB shall be responsible for and shall indemnify the Purchaser 

 

75

 

Indemnified Parties from
and against any and all Losses arising from or in respect of any breach of the
informing and consulting obligations placed upon ABB and its Affiliates by the
Transfer Regulations or any other applicable Law or labor, collective
bargaining or other similar agreements or contracts (including, for the
avoidance of doubt, any such obligations in Italy), except that Purchaser shall
indemnify the ABB Indemnified Parties to the extent that such Losses arise from
or are in respect of Purchaser’s failure to comply with its obligations to
provide ABB with the information and assistance reasonably requested by ABB in
order to enable ABB to fulfill its obligations under the Transfer Regulations
and other applicable Law.

 

SECTION 6.10.                 Purchase Price Adjustment for
Unfunded Benefit Liabilities. 
(a)  The amount of $847 million
set forth in Section 2.04(a) shall be reduced by $85 million on the
Closing Date (which amount Purchaser will not and shall not be obligated to pay
to ABB pursuant to Section 2.04(a) on the Closing Date or otherwise
thereafter) to reflect the aggregate estimated value of the unfunded benefit
liabilities under the Assumed Plans and the Non-Assumed Plans and may be
further adjusted pursuant to this Section 6.10.

 

(b)                                 ABB
shall as soon as reasonably practicable provide to Purchaser the information
necessary for the calculations required in this Section 6.10 to be
completed.  Purchaser’s Actuary shall
calculate the Aggregate Deficit on the basis of the assumptions set out in
Exhibit Q to this Agreement and shall provide the results of such calculation
to ABB’s Actuary within sixty (60) calendar days of receipt of all the required
information from ABB for verification by ABB’s Actuary.  Where Purchaser’s Actuary and ABB’s Actuary
cannot agree on the calculation of the Aggregate Deficit within ninety (90)
days of the receipt of all necessary and appropriate information from ABB,
Section 6.10(f) shall apply.

 

(c)                                  Where
the Aggregate Deficit is less than $100 million, then Purchaser shall pay to
ABB as an adjustment to the Purchase Price the amount by which the Aggregate
Deficit is less than $100 million, up to a maximum of $15 million.

 

(d)                                 Where
the Aggregate Deficit is greater than $126 million, then ABB shall pay to
Purchaser as an adjustment to
the Purchase Price the amount by which the Aggregate Deficit is greater than
$126 million.

 

(e)                                  For
the avoidance of doubt, where the Aggregate Deficit is greater than $100
million but less than $126 million no payment shall be made by either Purchaser
to ABB or ABB to Purchaser.

 

(f)                                    Where
ABB’s Actuary and Purchaser’s Actuary cannot agree on the calculation of the
Aggregate Deficit within ninety (90) days of the receipt of all necessary and
appropriate information from ABB then: 
(i)  where the difference between
Purchaser’s Actuary’s calculation and ABB’s Actuary’s calculation is less than
$1 million, then the average of the two calculations shall apply, and (ii)
where the difference between the calculation of Purchaser’s Actuary and the
calculation of ABB’s Actuary is greater than $1 million, then either ABB or
Purchaser may request that the calculation of such amount be determined by an
independent actuary being an individual chosen by agreement between ABB and
Purchaser or, failing such agreement, appointed by the President of the
Institute of Actuaries (the “Independent Actuary”).  There may be only one Independent Actuary
and he or she will act as an expert and 

 

76

 

not as an
arbitrator.  The Independent Actuary
will determine the disputed calculation in accordance with this Agreement and
the terms set forth in Exhibit Q to this Agreement, his or her decision will be
final and binding in the absence of manifest error and his or her fees and
expenses will be borne equally by ABB and Purchaser or as he or she directs.

 

SECTION 6.11.                 Cooperation.  The Parties mutually agree to use their
reasonable best efforts to take all actions that are necessary and appropriate
to effectuate the actions contemplated by this Article VI.

 

ARTICLE VII

TAX MATTERS

 

SECTION 7.01.                 Indemnity.  (a) 
ABB agrees to indemnify and hold harmless Purchaser against the
following (as well as reasonable costs and fees for attorneys and other
professional advisors incurred in connection with Taxes) (except that ABB shall
not indemnify and hold harmless Purchaser for Taxes (A) to the extent of the
amount reserved on the Final Effective Date Balance Sheet or (B) that have been
paid under this Article VII):  (i)
Taxes imposed on any OGP Subsidiary or with respect to the OGP Business with
respect to any Pre-Closing Taxable Period, (ii) U.S. withholding Tax, if any, that is imposed pursuant to the
Foreign Investment Real Property Act on a transfer by a Seller that is a
foreign person of the assets of the OGP Business, (iii) with respect to
any Straddle Period, Taxes imposed on any OGP Subsidiary or with respect to the
OGP Business that are allocable, pursuant to Section 7.01(b), to the
Pre-Closing Taxable Period, (iv) Taxes arising out of (A) any transactions
by ABB relating to the pre-Closing acquisitions or reorganizations (other than
Taxes relating to a Section 338(h)(10) Election, as defined below, which
shall be governed by Section 7.08), unless such transactions are
undertaken at the request of Purchaser, in which case ABB’s indemnity
obligation will only apply to U.S. federal, state and local Income Taxes
arising out of such transactions, provided that ABB shall indemnify and hold
harmless Purchaser for Taxes payable in respect of the pre-Closing transfer of
Vetco Gray Nigeria Ltd., or (B) the sale of the shares of ABB Vetco Gray
U.K. Ltd. by ABB Vetco Gray Inc. to Purchaser or an OGP Purchaser, (v) Taxes of
another Person claimed from the OGP Subsidiaries or Asset Sellers relating to
the OGP Business as a result of any of the OGP Subsidiaries or Asset Sellers
relating to the OGP Business being included prior to the Closing Date in a
combined, consolidated or unitary tax group under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract or otherwise and (vi) penalties for failure to file Tax
Returns that are required to be filed by OGP Subsidiaries or Asset Sellers
(with respect to the OGP Business) with respect to the Pre-Closing Taxable
Periods.  ABB shall also
indemnify Purchaser for the utilization or set-off of a Purchaser’s Relief
available to any of the OGP Subsidiaries against any Tax liability or against
any income, profits or gains where, but for such setting off, Purchaser would
have been entitled to make a claim under this Agreement (ignoring for these
purposes any financial limitations), in which case the amount of ABB’s
liability shall be equal to the amount which would have been payable in the
absence of that or any other Purchaser’s Relief.   Notwithstanding the foregoing, in the event of a change in law,
regulation, governmental rule, directive, guideline, or a change in the
generally accepted interpretation of any of the foregoing (a “Change of Law”),
which takes effect after the Closing Date but which retroactively increases the
amount of Taxes described in subsections (i) through (vi) above or in 

 

77

 

the immediately preceding
sentence, ABB shall not indemnify and hold Purchaser harmless from the
increased portion of Taxes attributable to such Change of Law. Purchaser shall
be responsible for, and shall indemnify and hold ABB harmless against, all
Taxes and associated costs and expenses with respect to the OGP Subsidiaries
and the OGP Business (including the Purchased Assets) and the sale thereof for
all taxable periods ending after the Closing Date (and, with respect to any
Straddle Period, the portion of such taxable period that is after the Closing Date)
not allocated to ABB pursuant to this Section 7.01.

 

(b)                                 For
purposes of this Agreement, in the case of any Taxes imposed on any OGP
Subsidiary or with respect to the OGP Business and payable for a Straddle
Period, the portion of such Taxes which is allocable to the Pre-Closing Taxable
Period shall be (i) in the case of any Tax other than a Tax based upon or
measured by gross or net income or receipts including any deemed income, the
amount of such Tax for the entire taxable period (or, in the case of such Taxes
determined on an arrears basis, the amount of such Tax for the immediately
preceding period) multiplied by a fraction, the numerator of which is the
number of days in the portion of such taxable period ending on the Closing Date
and the denominator of which is the number of days in the entire taxable period
and (ii) in the case of Taxes that are either based upon or measured by gross
or net income or receipts including any deemed income, the amount which would
be payable if the relevant taxable period ended on the Closing Date.  For purposes of this Agreement, the Texas
franchise Tax, which is computed on taxable income for calendar year 2003,
shall be treated as a Tax payable for a Straddle Period.

 

(c)                                  Payment
by ABB of any amount due under this Section 7.01 shall be made within ten
days following Purchaser’s written request for the payment of such
amounts.  If ABB receives an assessment
or other notice of Taxes due with respect to an OGP Subsidiary or with respect
to the OGP Business for any Pre-Closing Taxable Period for which ABB is not
responsible, in whole or in part, pursuant to paragraph (a) of this
Section 7.01, then Purchaser shall pay such Taxes, or if ABB pays such
Taxes, then Purchaser shall pay to ABB the amount of such Taxes for which ABB
is not responsible within ten (10) days following ABB’s written request.  In the case of a Tax that is contested in
accordance with the provisions of Section 7.04, the contesting party (as
between ABB and Purchaser) shall defer payment of the contested Tax to the
extent permitted by Law and to the extent such deferral will not materially
disadvantage the non-contesting party (as between ABB and Purchaser).

 

(d)                                 Any
amount otherwise payable by ABB under this Section 7.01 shall be reduced
by any Post-Closing Date Tax Benefit that arose in connection with (i) any
underlying adjustment resulting in the obligation of Purchaser, the OGP
Purchasers, any of the OGP Subsidiaries or otherwise with respect to the OGP
Business to pay Taxes for which ABB is responsible under this Section 7.01
or (ii) the payment of such Taxes.

 

(e)                                  In
the event that any UK Tax is due with respect to the Pre-Closing Taxable
Period, ABB shall as far as possible make group relief (as defined in
Section 402(1) of the Income and Corporate Taxes Act of 1988) available
free of charge for the purpose of eliminating or mitigating that liability to
UK Tax or the payment of such Taxes.

 

SECTION 7.02.                 Preparation of Tax Returns.  (a) 
ABB shall at its cost and expense cause the OGP Subsidiaries or Asset
Sellers relating to the OGP Business to timely 

 

78

 

prepare and file all Tax
Returns relating to such OGP Subsidiaries or to the OGP Business due on or
before the Closing Date and, where appropriate, shall cause to be included in
the consolidated federal Income Tax Returns (and the federal, state, local,
canton, provincial or national Income Tax Returns of any jurisdiction in which
ABB or any of its Affiliates files consolidated, combined, group or unitary
Income Tax Returns) for all periods ending on or before or which include the
Closing Date, all items of income, gain, loss, deduction and credit or other
items (collectively, “Tax Items”) of the OGP Subsidiaries or Asset
Sellers relating to the OGP Business which are required to be included
therein.  ABB shall provide, or cause to
be provided, a copy of state, local and foreign Tax Returns that are required
to be filed by it, the OGP Subsidiaries or the Asset Sellers with respect to
the OGP Business under this paragraph, together with any attachments to the
extent such Tax Returns and attachments relate solely to the OGP Subsidiaries
or the OGP Business, to the Purchaser ten (10) business days prior to the due
date for filing of such Tax Returns (taking into account proper
extensions).  Purchaser may review such
Tax Returns and provide comments.

 

(b)                                 With
respect to each Tax Return covering a taxable period ending on or before the
Closing Date that is required to be filed after the Closing Date for, by or
with respect to any of the OGP Subsidiaries or with respect to the OGP Business
(other than the Tax Returns described in Section 7.02(a)), ABB shall at
its cost and expense timely prepare and file such Tax Return and shall cause to
be included in such Tax Return all Tax Items required to be included
therein.  ABB shall provide, or cause to
be provided, a copy of state, local and foreign Tax Returns that are required
to be filed by it, the OGP Subsidiaries or the Asset Sellers with respect to
the OGP Business under this paragraph, together with any attachments to the
extent such Tax Returns and attachments relate solely to the OGP Subsidiaries
or the OGP Business, to the Purchaser ten (10) business days prior to the due
date for the filing of such Tax Return (taking into account proper
extensions).  Purchaser may review such
Tax Returns and provide comments.  An
exact copy of a Tax Return relating solely to the OGP Subsidiaries and the OGP
Business shall be provided to Purchaser no later than ten (10) business days
after such Tax Return is filed.

 

(c)                                  With
respect to each Tax Return covering a Straddle Period that is required to be
filed for, by or with respect to OGP Subsidiaries or Asset Sellers relating to
the OGP Business (a “Straddle Period Return”), other than the Tax
Returns described in Section 7.02(a), Purchaser shall cause such Straddle
Period Return to be prepared and shall cause to be included in such Straddle
Period Return all Tax Items required to be included therein.  Purchaser shall determine in accordance with
the provisions of Section 7.01(b), subject to review and agreement by ABB,
the portion, if any, of the Tax due with respect to the period covered by such
Straddle Period Return that is attributable to the Pre-Closing Taxable Period.  At least 60 calendar days prior to the due
date (including extensions) of such Straddle Period Return (or, if the
financial statements for relevant entities are not available at such time,
within 15 days after such statements become available, but in any event no
later than 10 days prior to the due date (including extensions) of such
Straddle Period Return), Purchaser shall deliver to ABB a copy of such Straddle
Period Return along with Purchaser’s calculation (in reasonable detail) of the
amount of Tax attributable to the Pre-Closing Taxable Period.  After ABB’s review and approval of such
Straddle Period Return (which approval shall not be unreasonably withheld or
delayed), Purchaser shall cause the OGP Subsidiaries or OGP Purchasers (with
respect to the OGP 

 

79

 

Business) to file timely
such Straddle Period Return with the appropriate Taxing Authority and to pay
timely the amount of Taxes shown to be due on such Straddle Period Return.

 

(d)                                 Subject to Section 7.01(a), when a Straddle Period
Return is filed, Purchaser shall prepare a statement within ten calendar days
of the filing of a Straddle Period Return showing (i) the aggregate amount of
Taxes allocable to the Pre-Closing Taxable period as calculated by reference to
such Straddle Period Return (the “Final Tax Amount”) and (ii) all Final
Tax Amounts shown on previously filed Straddle Period Returns, and shall submit
such statement to ABB for review and agreement thereupon by the parties
hereto.  Upon agreement by the parties
hereto on the amount of the Final Tax Amount, to the extent the sum of (i) the
Final Tax Amount shown on such Straddle Period Return and (ii) all Final Tax
Amounts shown on previously filed Straddle Period Returns exceeds the total of
the aggregate amount of Taxes previously paid by ABB and Taxes reserved on the
Final Effective Date Balance Sheet with respect to all Straddle Periods, ABB
shall promptly pay to Purchaser such excess amount.  When all Straddle Period Returns have been filed, to the extent
that the aggregate amount of Taxes paid by ABB or reserved on the Final
Effective Date Balance Sheet is greater than the aggregate of all Final Tax
Amounts shown on such Straddle Period Returns, Purchaser shall promptly pay ABB
such excess amount.

 

(e)                                  All
Tax Returns to be prepared pursuant
to this Section 7.02 shall be prepared in a manner consistent with practices followed in prior years except for changes
required by Law.

 

(f)                                    None of Purchaser or any Purchaser Affiliate
shall (or shall cause or permit any OGP Subsidiary to) amend, refile or
otherwise modify any Tax Return relating in whole or in part to any OGP
Subsidiary with respect to a Pre-Closing Taxable Period without the prior
written consent of ABB, unless required by Law to do so.  Notwithstanding anything to the contrary in
this Agreement, unless required by Law to do so, ABB shall not amend, refile or
otherwise modify, or permit the OGP Subsidiaries or Asset Sellers (relating to
the OGP Business) to amend, refile or otherwise modify, any state, local or
foreign Tax Return, which relates solely to OGP Subsidiaries or the OGP
Business, with respect to taxable periods ending on or prior to the Closing
Date, the amendment of which (i) would be inconsistent with prior practice and (ii)
would materially adversely affect Purchaser, without the consent of Purchaser
(which shall not be unreasonably withheld or delayed).

 

SECTION 7.03.                 Refunds.  Any Tax refund or credit (including any
interest paid or credited with respect thereto) received or used, in the case
of a credit, by Purchaser, any OGP Purchaser, or any OGP Subsidiary, (i)
relating to any OGP Subsidiary or the OGP Business for any Pre-Closing Taxable
Period (except for any refund included on the Final Effective Date Balance Sheet
which shall be the property of Purchaser and, if paid to ABB, shall be paid
over promptly to Purchaser), (ii) attributable to an amount paid by ABB
under Section 7.01, or (iii) attributable to a loss, credit or a deduction
arising in the Pre-Closing Taxable Period and not included on the Final
Effective Date Balance Sheet, shall be the property of ABB, and if received or
used by Purchaser or any of the Purchaser Affiliates shall be paid over
promptly to ABB.  Purchaser shall, if
ABB so requests and at ABB’s expense, cause the relevant entity to file for and
use its reasonable best efforts to obtain and expedite the receipt of any
refund to which ABB is entitled under this Section 7.03 to the extent such
request does not otherwise materially 

 

80

 

disadvantage
Purchaser.  Purchaser shall permit, and
shall cause the relevant OGP Purchaser to permit, ABB to participate (at ABB’s
expense) in the prosecution of such refund claim.

 

SECTION 7.04.                 Contests.  (a) 
If a claim shall be made by any Taxing Authority that, if successful,
would result in the indemnification of a party (the “Tax Indemnified Party”)
under this Article VII, the Tax Indemnified Party shall promptly notify
the party (the “Tax Indemnifying Party”) obligated under this
Article VII to indemnify the Tax Indemnified Party in writing of such
fact; otherwise, the Tax Indemnifying Party shall be released from any
indemnification obligations with respect to such claim to the extent the Tax
Indemnifying Party is actually prejudiced by such failure to notify or delay in
notification.  Such notice shall contain
factual information (to the extent known to the Tax Indemnified Party)
describing the asserted Tax liability in reasonable detail and shall include
copies of any notice or other document received from any Taxing Authority in
respect of such asserted Tax liability.

 

(b)                                 In
the case of a claim or assessment with respect to Tax by a Taxing Authority or
in the case of a Tax audit or administrative or judicial proceeding (a “Contest”)
that relates to a Pre-Closing Taxable Period or otherwise to a matter for which
ABB is primarily liable under Section 7.01 or 7.02, ABB shall have the
sole right, at its expense, to control the conduct of such Contest provided ABB
acknowledges its liability.  Purchaser
and ABB agree to cooperate, and Purchaser agrees to cause the relevant OGP
Purchasers and OGP Subsidiaries to cooperate, in the defense against or
compromise of any claim in any audit or proceeding, including by executing
appropriate powers of attorney empowering ABB Representatives.  Notwithstanding the foregoing, (i) ABB shall
not agree to any settlement concerning Taxes with respect to Pre-Closing
Taxable Periods, which would materially disadvantage Purchaser or the OGP
Subsidiaries without the prior written consent of the Purchaser, which shall
not be unreasonably withheld, and (ii) Purchaser shall not agree to any
settlement concerning Taxes with respect to Pre-Closing Taxable Periods which
would materially disadvantage ABB without the prior written consent of ABB,
which shall not be unreasonably withheld. 
Each of ABB and Purchaser shall have the right to be kept fully informed
of any material developments and receive copies of all correspondence and shall
have the right to observe the conduct of any Tax Contest (through attendance at
meetings) at its own expense, including through its own counsel and other
professional experts.  In a case of a
Contest relating to a Straddle Period, (i) each of Purchaser and ABB may
participate in such Contest at its own expense, and (ii) whichever of Purchaser
and ABB would be liable for the greatest amount of Tax asserted in such Contest
(determined on a present value basis) shall be entitled to control such
Contest.

 

SECTION 7.05.                 Cooperation and Exchange of
Information.  Notwithstanding the
provisions in Section 5.04, upon the terms set forth in this
Section 7.05, ABB, on the one hand, and Purchaser, the OGP Purchasers and
the OGP Subsidiaries, on the other hand, will provide each other with such
cooperation and information as either of them reasonably may request of the
other in filing any Tax Return (including procuring necessary signatures of
relevant officers for Tax Returns), amended Tax Return or claim for refund,
determining a liability for Taxes or a right to a refund of Taxes,
participating in or conducting any audit or other proceeding in respect of
Taxes or making representations to or furnishing information to parties
subsequently desiring to purchase any of the OGP Subsidiaries or any part of
the OGP Business from Purchaser or an OGP Purchaser.  Such cooperation and information shall include providing copies
of relevant Tax Returns or portions thereof, together with accompanying 

 

81

 

schedules, related work
papers and documents relating to rulings or other determinations by Taxing
Authorities.  ABB, on the one hand, and
Purchaser, the OGP Purchasers and the OGP Subsidiaries, on the other hand, shall
make their respective employees and the employees of their respective
Affiliates or Purchaser Affiliates, as applicable, available on a basis
mutually convenient to the parties to provide explanations of any documents or
information provided hereunder.  Each of
ABB, Purchaser, the OGP Purchasers and the OGP Subsidiaries shall retain all
Tax Returns, schedules and work papers, records and other documents in their
possession relating to Tax matters of the OGP Subsidiaries and the OGP Business
for each taxable period first ending after the Closing Date and for all prior
taxable periods until the later of (i) the expiration of the period of
limitations for the assessment of Taxes applicable to the relevant taxable
periods to which such Tax Returns and other documents relate, without regard to
extensions except to the extent notified by the other party in writing of such
extensions for the respective Tax periods, or (ii) eight years following the
due date (without extension) for such Tax Returns; provided, however,
that a party shall not dispose of any such materials if, at least 90 Business
Days before the later of the end of either of the periods described in clause
(i) or (ii), the other party has notified the disposing party of its desire to
review such material, in which case such other party shall be given an
opportunity, at its expense, to remove and retain all or any part of such
materials.  Any information obtained
under this Section 7.05 shall be kept confidential, except as may be
otherwise necessary in connection with the filing of Tax Returns or claims for
refund or in conducting an audit or other proceeding or participating in any
Contest.

 

SECTION 7.06.                 Conveyance Taxes.  Each of ABB and Purchaser shall be liable
for 50 per cent of any real property transfer or gains, sales, use, transfer,
value added, stock transfer, and stamp taxes, any transfer, recording,
registration, and other fees, and any similar Taxes which become payable in
connection with the transactions contemplated by the Transaction Agreements,
except that, with respect to the pre-Closing transfer of Vetco Gray Nigeria
Ltd. and the sale of the shares of ABB Vetco Gray U.K. Ltd. by ABB Vetco Gray
Inc. to Purchaser or an OGP Purchaser, ABB shall indemnify and hold harmless
Purchaser for all such aforementioned Taxes. 
ABB and Purchaser agree to cooperate in the execution and delivery of
all instruments and certificates necessary to enable ABB and/or Purchaser to
comply with any pre-Closing filing requirements.  The parties shall prepare and file all necessary Tax Returns and
other documentation with respect to such Taxes and shall take such reasonable
steps as appropriate and as permitted by Law to reduce such Taxes.  Notwithstanding anything in this
Section 7.06 to the contrary, ABB shall not be responsible for any real
property transfer or gains, sales, use, transfer, value added, stock transfer
and stamp taxes, any transfer recording, registration and other fees, and any
similar Taxes which become payable in connection with the acquisitions or
reorganizations undertaken prior to Closing at the request of the Purchaser
other than the pre-Closing transfer of Vetco Gray Nigeria Ltd.

 

SECTION 7.07.                 Tax Covenants.  (a) 
Notwithstanding any other provision of this Agreement, neither Purchaser
nor any Purchaser Affiliate shall carry back, or cause or permit any OGP
Subsidiary to carry back, for U.S. federal, state or local or non-U.S. Tax
purposes to any taxable year or period, or portion thereof, ending on or before
the Closing Date any operating losses, net operating losses, capital losses,
Tax credits or similar items without a prior written consent of ABB.

 

82

 

(b)                                 (i)  Nothing contained in this Agreement shall
prohibit ABB solely with respect to the Pre-Closing Taxable Period, prior to
the Closing Date, from making, or causing to be made, an election under
Treasury Regulation Section 301.7701-3 with respect to any OGP Subsidiary
or any Affiliate thereof, subject to the consent of  Purchaser (which consent shall not be unreasonably withheld).

 

(ii)                                  Nothing
contained in this Agreement shall prohibit Purchaser, solely with respect to
the Post-Closing Taxable Period, from making, or causing to be made, an
election under Treasury Regulation Section 301.7701-3 with respect to the
OGP Subsidiaries, provided that such election does not become effective
during a Pre-Closing Taxable Period or portion thereof, unless Purchaser has
obtained prior written consent of the Seller (which consent shall not be
unreasonably withheld).

 

SECTION 7.08.                 Elections.  (a) 
ABB and Purchaser shall join to make a timely and irrevocable election
under Section 338(h)(10) of the Code and similar elections under any
applicable state or local Tax laws (a “Section 338(h)(10) Election”)
for the OGP Subsidiaries organized in the United States other than ABB Offshore
Systems, Inc. (the “338(h)(10) Subsidiaries”).  Each of ABB, Purchaser, and the 338(h)(10) Subsidiaries shall
report the purchase of the Shares consistent with the Section 338(h)(10)
Elections made with respect to those companies and shall take no position
contrary thereto.

 

(b)                                 Each
of ABB, Purchaser and the 338(h)(10) Subsidiaries shall execute any and all
documents, statements, and other forms (including IRS Forms 8023 and 8883) that
are required to be submitted to any Taxing Authority in connection with a
Section 338(h)(10) Election (the “Section 338 Forms”) no later
than 15 days prior to the date such Section 338 Forms are required to be
filed except for IRS Form 8023, which shall be signed and executed on the
Closing Date.  Each of ABB, Purchaser,
and the 338(h)(10) Subsidiaries shall cause the Section 338 Forms to be
duly executed by an authorized person for ABB, Purchaser, and the 338(h)(10)
Subsidiaries, and shall duly and timely file the Section 338 Forms in
accordance with applicable Tax laws and the terms of this Agreement.

 

(c)                                  Solely
for purposes of the Section 338(h)(10) Election, each of ABB and Purchaser
shall use its best efforts, as soon as practicable after the Closing Date, to
enter into an agreement, as may be amended from time to time (the “Allocation
Agreement”), to allocate the Purchase Price (with subsequent adjustment for
any amounts that are treated as adjustments to the Purchase Price for all
purposes) allocable to the Shares for all applicable Tax purposes, including
the computation of the Modified Aggregate Deemed Sale Price (as defined under
applicable Treasury Regulations and similar state, local or foreign tax
provisions) (“MADSP”) for the assets of the 338(h)(10) Subsidiaries.  Purchaser shall initially prepare a
statement setting forth a proposed computation and allocation of MADSP (the “Computation”).  Purchaser shall submit the Computation to
ABB along with copies of all workpapers, reports, opinions and other similar
documents used to prepare the Computation (“Workpapers”), no later than
ninety (90) days after the Closing Date. 
If, within sixty (60) days of ABB’s receipt of the Computation and the
Workpapers, ABB shall not have objected in writing to such Computation, the
Computation shall become the Allocation Agreement.  If ABB objects in writing to the Computation within such sixty
(60) days, Purchaser and ABB shall negotiate in good faith to resolve the
Computation.  If Purchaser and ABB shall
not have agreed to the Computation and adopted an 

 

83

 

Allocation Agreement
within thirty (30) days after ABB’s objection, any disputed aspects of the
Allocation Agreement shall be resolved by an accounting or law firm mutually
acceptable to Purchaser and ABB (the “338 Auditors”) as soon as
practicable but in no event later than thirty (30) days prior to the earlier of
(i) the last date on which the Section 338 Forms may be filed or (ii) the
last date on which either Purchaser or ABB (whichever is earlier) must file a
Tax Return relating to the transactions contemplated hereby.  The decision of the 338 Auditors shall be
final, and the costs, expenses and fees of the 338 Auditors shall be borne
equally by Purchaser and ABB.  Purchaser
and ABB shall not take a position before any Taxing Authority or otherwise
(including in any Tax Return) inconsistent with the Allocation Agreement.  For purposes of this Section 7.08(c),
references to ABB shall include ABB and any of its designated Affiliates.

 

(d)                                 ABB
shall be responsible for all U.S. federal Income Taxes attributable to the OGP
Subsidiaries or Asset Sellers relating to the OGP Business for periods ending
on or before the Closing Date (including any Tax resulting from the
Section 338(h)(10) Election).  In
addition, ABB shall be liable for any state or local Tax attributable to the
Section 338(h)(10) Election or an election under the state or local law
similar to the election available under Section 338(h)(10) of the Code,
which shall include the Texas franchise tax imposed on the 338(h)(10) gain, and
also for all U.S. state and local Income Taxes arising out of any pre-Closing
acquisitions or reorganizations undertaken at the request of Purchaser and for
all Taxes arising out of the sale of the shares of ABB Vetco Gray U.K. Ltd. by
ABB Vetco Gray Inc. to Purchaser or an OGP Purchaser.

 

(e)                                  At
Purchaser’s option, Purchaser may make an election under Section 338(g)
with respect to acquisitions of any of the OGP Subsidiaries organized outside
the United States, provided, however, that Purchaser indemnifies
ABB and any of its Affiliates for all state and local Tax costs that would be
incurred by ABB or any of its Affiliates as a result of the election
contemplated by this Section 7.08(e). 
Provided that Purchaser acknowledges its liability under this
Section 7.08(e) in writing, ABB shall cooperate with, and take all
necessary actions requested by Purchaser, regarding any such election including
reporting the transactions for tax purposes in a manner consistent with such
elections.

 

(f)                                    Notwithstanding
any other provision in this Agreement, in each of the Applicable Taxing
Jurisdictions, ABB shall control (i) the reporting of the income or gain
resulting from the Section 338(h)(10) Election (or similar election under
state or local law), or arising out of any pre-Closing acquisitions or
reorganizations undertaken at the request of Purchaser or arising out of the
sale of the shares of ABB Vetco Gray U.K. Ltd. by ABB Vetco Gray Inc. to
Purchaser or an OGP Purchaser, on the associated Tax Returns (including filings
with respect to estimated Tax) reflecting such income or gain (the “Designated
Returns”) and (ii) the determination of the amount of any associated Tax
(determined taking into account any available Relief) resulting from the
Section 338(h)(10) Election (or similar election under state or local
law), or arising out of any pre-Closing acquisitions or reorganizations
undertaken at the request of Purchaser or arising out of the sale of the shares
of ABB Vetco Gray U.K. Ltd. by ABB Vetco Gray Inc. to Purchaser or an OGP
Purchaser, that is to be paid with such return (in each Applicable Taxing
Jurisdiction, the “Designated Tax Amount”); provided that any
such return shall be filed by the Party having filing responsibility for such
return under Section 7.02.  At
least 25 calendar days before the filing of any Designated Return, ABB will
provide Purchaser with a schedule showing the Designated Tax Amount, along
with supporting materials 

 

84

 

showing in reasonable
detail how the Designated Tax Amount was computed.  Purchaser may review such schedule and supporting materials
and provide comments.  Unless Purchaser
notifies ABB of any comments or disagreements with respect to ABB’s
schedule within 15 calendar days before the due date for a Designated
Return, such schedule shall be final, and the applicable Designated Return
shall be filed in a manner that is in accordance with such schedule.  If Purchaser timely notifies ABB of any
comments or disagreements with respect to such schedule, then ABB shall consult
with the Purchaser in good faith with respect to such comments or
disagreements, the schedule and supporting materials, and, in general, with
respect to the reporting of the income or gain resulting from the
Section 338(h)(10) Election (or similar election under state or local law)
or arising out of any pre-Closing acquisitions or reorganizations undertaken at
the request of Purchaser or arising out of the sale of the shares of ABB Vetco
Gray U.K. Ltd. by ABB Vetco Gray Inc. to Purchaser or an OGP Purchaser.  In the event that, notwithstanding such
consultation, there remain any outstanding issues with respect to any of the
matters described in the preceding sentence, then at least 12 calendar days
before the due date for the Designated Return: 
(i) Purchaser shall submit to ABB a schedule showing the Tax
resulting from the Section 338(h)(10) Election (or similar election under
state or local law) or arising out of any pre-Closing acquisitions or
reorganizations undertaken at the request of Purchaser or arising out of the
sale of the shares of ABB Vetco Gray U.K. Ltd. by ABB Vetco Gray Inc. to
Purchaser or an OGP Purchaser as determined by Purchaser (after taking into
account any available Relief), along with supporting materials showing in
reasonable detail Purchaser’s computations (in each Applicable Taxing
Jurisdiction, the “Alternative Designated Tax Amount”); (ii) ABB shall
acknowledge in writing to Purchaser its liability under Section 7.08(d) (including liability in the event of a
determination by a Taxing Authority that the applicable amount of Tax exceeds
the Designated Tax Amount shown in ABB’s schedule) and its intention to
timely remit the Designated Tax Amount, as shown in ABB’s schedule to the
applicable Taxing Authority (or to Purchaser by check, so long as such check is
made out to the applicable Taxing Authority and not to Purchaser and the amount
of the check includes the amount of any penalty for payment by check rather
than by wire transfer); and (iii) in the case of any Designated Return as to
which there is an outstanding issue and which under applicable Law must be
executed by Purchaser or a Purchaser Affiliate, except to the extent ABB
establishes to Purchaser’s reasonable satisfaction that ABB’s position is
substantially the same as positions reasonably taken by ABB in its past
practice, Purchaser may request that ABB
provides an opinion of counsel or an accountant or accountants generally
recognized as expert in such matters that there is substantial authority for
the position being advocated by ABB and, if such opinion is not provided at
least eight days before such due date, ABB shall be deemed to have agreed to
the Alternative Designated Tax Amount for the Applicable Taxing Jurisdiction
and such amount shall become the Designated Tax Amount.  ABB (or, in the case of a Designated
Return for which Purchaser has filing responsibility, Purchaser) shall timely
file each Designated Return (the due date for such filing (determined taking
into account any duly obtained extensions), the “Filing Date”).  For the avoidance of doubt, no determination
or statement made, schedule or other document provided, or other action
taken by ABB, Purchaser or any of their Affiliates pursuant to this
Section 7.08(f) or Section 9.08(b) shall be treated as modifying,
qualifying or limiting in any respect ABB’s obligations under
Section 7.08(d).

 

(g)                                 For
purposes of Sections 7.08(a) through (f), each of ABB and Purchaser shall cause
their respective Affiliates or Purchaser Affiliates, as the case may be, to
take any 

 

85

 

action required in those
paragraphs or refrain from taking any action prohibited under those paragraphs.

 

SECTION 7.09.                 Miscellaneous.  (a) 
Each of ABB, on the one hand, and Purchaser, the OGP Purchasers and the
OGP Subsidiaries, on the other hand, agrees to treat all payments made by it
(or caused to be made by it) to or for the benefit of the other parties
(including any payments to any OGP Subsidiary or Asset Seller) under this
Article VII, under other indemnity provisions of this Agreement and for
any misrepresentations or breaches of warranties or covenants as adjustments to
the Purchase Price for all purposes and that such treatment shall govern for
purposes hereof except to the extent that the Laws of a particular jurisdiction
provide otherwise.  All payments made by
the parties under this Agreement shall be made gross, free of right of counterclaim
or set off and without deduction or withholding of any kind other than any
deductions or withholding required by Law. 
If any party makes a deduction or withholding required by Law from a
payment under this Agreement, the sum due from the payor party shall be
increased to the extent necessary to ensure that, after the making of any
deduction or withholding, the payee party receives a sum equal to the sum it
would have received had no deduction or withholding been made, net of any
associated credit or other Tax benefit. 
If an indemnity payment made pursuant to Section 7.01 will be or
has been subject to Tax, the payor party shall pay to the payee the amount
(after taking into account Tax payable in respect of the amount) that will
ensure that the payee party receives and retains a net sum equal to the sum it
would have received had the payment not been subject to Tax; provided
that if the Tax paid by the payee party has resulted in a Relief which is
available to it or an Affiliate of it or Purchaser Affiliate, as appropriate,
then the payee party shall pay or procure the payment to the payor party of an
amount equal to the lesser of (a) the amount by which the payee party’s, or the
relevant Affiliate’s or Purchaser Affiliates’, Tax liability has been reduced
as a result of use of the relevant Relief; and (b) the additional amount paid
by the payor party under this Section 7.09(a).

 

(b)                                 Notwithstanding
any provision in this Agreement to the contrary, the provisions of
Article VII, and the representations and warranties contained in
Section 3.12, shall terminate at the close of business on the 60th
calendar day following the expiration of the period of limitations including
any extensions for the assessment of Taxes applicable to the Tax liabilities in
question.

 

(c)                                  For
purposes of this Article VII and Section 3.12, all references to
Purchaser, the OGP Purchasers, ABB, the OGP Subsidiaries and Asset Sellers
shall include their respective successors, if any.

 

(d)                                 Notwithstanding
anything to the contrary in this Article VII, to the extent Tax is
attributable to an action, omission or delay by Purchaser or any of the
Purchaser Affiliates not otherwise contemplated by this Agreement, including in
the filing of any Tax Returns, responding to Tax audits or other inquiries or
making payments, such Tax shall not be indemnifiable hereunder and shall be the
sole responsibility of Purchaser.

 

(e)                                  In
the event that a dispute arises between ABB and Purchaser as to the amount of
Taxes or indemnification or any matter relating to Taxes attributable to the
OGP Subsidiaries or Asset Sellers relating to the OGP Business, the Parties
shall attempt in good faith 

 

86

 

to resolve such dispute,
and any agreed upon amount shall be paid to the appropriate Party.  If such dispute is not resolved thirty (30)
calendar days thereafter, the Parties shall submit the dispute to an
independent accounting firm mutually chosen by Purchaser and ABB for resolution,
which resolution shall be final, conclusive and binding on the Parties.  Notwithstanding anything in the Agreement to
the contrary, the fees and expenses of the independent accounting firm in
resolving this dispute shall be borne equally by ABB and Purchaser.

 

(f)                                    The
indemnification provided in this Article VII and recourse to the Tax
Election Bank Guarantee (solely for Taxes attributable to the
Section 338(h)(10) Elections) shall be the sole remedy for any claim in
respect of Taxes, including for any claim arising out of or relating to a
breach of Section 3.12.  In the
event of a conflict between the provisions of this Article VII and any
other provisions of this Agreement, the provisions of this Article VII
shall control.

 

(g)                                 If
any Party is to make a payment under this Agreement, such Party shall pay or
cause the relevant Affiliate or Purchaser Affiliate, as the case may be, to
make all such payments.

 

(h)                                 All
tax-sharing agreements or similar arrangements with respect to or involving the
OGP Subsidiaries shall be terminated with respect to the OGP Subsidiaries prior
to the Closing Date, and, after the Closing Date, neither ABB and its
Affiliates, on the one hand, nor the OGP Subsidiaries, on the other, shall be
bound thereby or have any liability thereunder to the other party for any amounts
purported to be due with respect to any period under such agreements and
arrangements.

 

(i)                                     ABB
shall furnish Purchaser with an affidavit, stating, under penalty of perjury,
the United States taxpayer identification number of the transferor of Shares of
a company organized in the United States or Purchased Assets that are U.S. real
property interests as defined in Section 897(c)(1) of the Code, and that
such transferor is not a foreign person, pursuant to Section 1445(b)(2) of
the Code.

 

(j)                                     Purchaser
hereby waives compliance for the Asset Sellers and their Affiliates with the
provisions of the bulk sales laws applicable to the transfers described in this
Agreement.  ABB shall indemnify and hold
harmless Purchaser against any and all liabilities with respect to the
Pre-Closing Taxable Period as a result of such non-compliance.

 

(k)                                  ABB
shall use its reasonable efforts to deliver to Purchaser by the Closing Date a
certificate of exemption under section 116 of the Canadian Income Tax Act
in respect of the sale of ABB Vetco Gray Canada, Inc. by ABB Oil & Gas USA
Inc. to Purchaser or to an OGP Purchaser and in respect of any transfer of ABB
Vetco Gray Canada Inc. occurring between the date of this Agreement and the
Closing.  In the event that such
certificate has not been obtained by ABB at least ten Business Days before the
Closing Date, ABB will cooperate in good faith with the Purchaser to implement
an alternative strategy to transfer ABB Vetco Gray Canada, Inc. or its assets
or business to Purchaser or an OGP Purchaser (in lieu of the transfer of such
company contemplated by Section 2.01 and Exhibit B-1 hereof), to the
extent that such alternative strategy does not create any additional Tax or
other Liabilities to be borne by ABB.

 

87

 

ABB’s compliance with
this obligation shall not be considered in determining whether
Section 8.03(a) has been satisfied on the Closing Date.

 

ARTICLE VIII

CONDITIONS TO CLOSING

 

SECTION 8.01.                 Conditions to the Parties’ Obligations.  The obligations of ABB and Purchaser to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or waiver, at or prior to the Closing, of each of the following
conditions:

 

(a)                                  Antitrust/Competition
Law Approvals.  (i) Any applicable
waiting period (and any extension thereof) under the HSR Act relating to the
transactions contemplated by the Transaction Agreements shall have expired or
shall have been terminated without any Action having been commenced by the Federal
Trade Commission or the Antitrust Division of the United States Department of
Justice for the purpose of preventing the transactions contemplated by the
Agreement; (ii) The European Commission shall have issued a decision that the
transactions contemplated by this Agreement (the “Merger”) fall within
either Article 6.1(a) or Article 6.1(b) or Article 8(2) of
Council Regulation (EEC) No. 4064/89 (the “Merger Regulation”) or shall
have been deemed to have done so under Article 10(6) of the Merger Regulation
declaring the Merger compatible with the Common Market without attaching to its
decision any conditions or obligations; (iii) The Office for Competition
and Consumer Protection in Poland shall have granted or be deemed to have
granted such clearance as is necessary for the transactions contemplated by
this Agreement to proceed without attaching to its decision any conditions or
obligations; and (iv) the Swiss Competition Commission shall have cleared or
otherwise be deemed to have granted a clearance without attaching to any such
clearance any conditions or obligations.

 

(b)                                 No
Order.  No court of competent
jurisdiction shall have issued or entered any Order that is then in effect and
has the effect of making the purchase and sale of the Shares or Purchased
Assets on assumption of the Assumed Liabilities contemplated by this Agreement
illegal or otherwise prohibiting its consummation.

 

SECTION 8.02.                 Additional Conditions to
Obligations of ABB.  The obligations
of ABB to consummate the transactions contemplated by this Agreement shall also
be subject to the fulfillment or waiver, by written notice to Purchaser, by ABB
at its sole discretion, at or prior to the Closing, of each of the following
additional conditions:

 

(a)                                  Representations,
Warranties and Covenants.  Each of
the representations and warranties of Purchaser contained in this Agreement
shall be true and correct as of the Closing Date, with the same force and
effect as if made as of the Closing Date, other than such representations and
warranties which are made as of another date, which shall be true and correct
as of such date, except where any failures of such representations and
warranties to be true and correct, individually or in the aggregate, have not
and would not reasonably be expected to materially delay or prevent the
consummation of the transactions contemplated hereby, and the covenants and
agreements contained in this 

 

88

 

Agreement to be complied with by Purchaser on or before the Closing
(except for those covenants and agreements which, pursuant to the terms of any
Deferred Transfer Agreement, are to be performed by Purchaser after the
Closing) shall have been complied with in all material respects.

 

(b)                                 Related
Agreements.  ABB shall have received
counterparts of each of the Related Agreements, except for the Non-Competition
Agreement, duly executed by each of the parties thereto.

 

(c)                                  Compliance
Review.  ABB shall not have failed
to be satisfied with the results of the Compliance Review and the related
consequences of such results in the context of both the objectives contemplated
by the Compliance Review and the transactions contemplated by the Transaction
Agreements and the Compliance Disposition shall have occurred.

 

(d)                                 ETPG Facility.  ABB shall have received evidence of the
creation of the ETPG Facility, as contemplated by Section 5.08(b), to its
reasonable satisfaction.

 

SECTION 8.03.                 Additional Conditions to the
Obligations of Purchaser.  The
obligations of Purchaser to consummate the transactions contemplated by this
Agreement shall also be subject to the fulfillment or waiver, by written notice
to ABB, by Purchaser at its sole discretion, at or prior to the Closing, of
each of the following additional conditions:

 

(a)                                  Representations,
Warranties and Covenants.  Each of
the representations and warranties of ABB contained in this Agreement shall be
true and correct as of the Closing Date, with the same force and effect as if
made as of the Closing Date, other than such representations and warranties
which are made as of another date, which shall be true and correct as of such
date, except where any failures of such representations and warranties to be
true and correct, individually or in the aggregate, have not and would not reasonably
be expected to have a Material Adverse Effect, and the covenants and agreements
contained in this Agreement to be complied with by ABB on or before the Closing
(except for those covenants and agreements which, pursuant to the terms of any
Deferred Transfer Agreement, are to be performed by ABB after the Closing)
shall have been complied with in all material respects.  The failure of the representation and
warranty set forth in Section 3.02(b)(i) (with respect only to the
beneficial and record ownership by ABB Oil & Gas USA Inc. of the Shares of
ABB Vetco Gray Canada, Inc. and ABB Vetco Gray Pte. Ltd.) to be true and
correct as of the Closing Date shall be deemed to constitute a Material Adverse
Effect for the purposes of this Section 8.03(a).  For the avoidance of doubt, by virtue of the omission in the
previous sentence of any reference to the other representations and warranties
contained in Section 3.02(b) it shall not be inferred that a failure of
such representations and warranties, individually or in the aggregate, to be
true and correct would not constitute a Material Adverse Effect for purposes of
this Section 8.03(a).

 

(b)                                 Title
to Shares.  Each Seller and each
Seller Subsidiary shall be the beneficial and record owner of the OGP Shares of
the Material Subsidiaries opposite such party’s name in column 3 of Exhibit B-1
or Section 3.02(b) of the Disclosure Schedule,

 

89

 

as applicable, and all of such shares shall be duly authorized, validly
issued, fully paid and nonassessable, and all legal and beneficial right, title
and interest in or to such OGP Shares shall be transferred free and clear of
Encumbrances to Purchaser or the OGP Purchasers and certificates evidencing all
such OGP Shares (to the extent such shares are evidenced by certificates) shall
be delivered to Purchaser or the OGP Purchasers.

 

(c)                                  Financing
Condition.  The Purchaser Financing
Documents shall have become unconditional in accordance with their terms and
the facilities thereunder shall have become available to Purchaser and the OGP
Purchasers.

 

(d)                                 Asbestos
Order.  (i)  An Order confirming the Plan of
Reorganization of Combustion Engineering, Inc. filed in the United States
Bankruptcy Court for the District of Delaware (Case No. 03-10495(JFK)), as
modified through the day of such Order, shall have been entered; (ii) such
Order shall contain the Asbestos PI Channeling Injunction as set forth in
Section 3.2.5.3 of the Plan, which injunction shall apply to the OGP
Protected Parties (as defined in the Plan); and (iii) said confirmation Order
and channeling injunction shall not have been stayed, amended, reversed or
vacated nor be subject to a pending application to stay pending appeal.

 

(e)                                  Absence
of Material Adverse Change.  During
the 12 months preceding the Closing Date, there shall not have been any event
or series of events that result in an adverse change in the OGP Business taken
as a whole which has caused the OGP EBITDA to equal an amount less than
$134,000,000.

 

(f)                                    Securitization
Programs.  ABB shall have obtained
the full release and unconditional discharge of each of the OGP Subsidiaries
participating in, party to or having obligations under the multi-jurisdictional
trade receivables securitization program extended by Eureka Securitization plc
(the “Eureka Program”).

 

(g)                                 Capital
Modernization Program.  ABB shall
have obtained the full release and unconditional discharge of each of the OGP
Subsidiaries or Asset Sellers relating to the OGP Business participating in,
party to or having obligations under the Capital Modernization Program, and the
OGP Assets shall be free of all Encumbrances granted as a result of such
program.  Purchaser acknowledges and
agrees that this condition shall be deemed satisfied (in respect of such part
of the Capital Modernization Program provided by J.P. Morgan Leasing Inc. only)
upon the execution by J.P. Morgan Leasing Inc. of the payoff letter in
substantially the same form as Exhibit U and the payment on or prior to the
Closing Date by ABB to J.P. Morgan Leasing Inc. of the amounts set forth in
such letter.

 

(h)                                 Aberdeen
and Houston Properties.  Each of the
Aberdeen Lease and the Houston Lease shall have been terminated without
liability to or from any OGP Subsidiary or Asset Seller relating to the OGP
Business and all real property rights, titles and interests which were the
subject of each such lease shall have been conveyed to the OGP Subsidiary which
was the lessee under such lease free from any Encumbrances created by the
Aberdeen Lease and the Houston Lease, respectively.

 

90

 

(i)                                     Related
Agreements.  Purchaser shall have
received counterparts of each of the Related Agreements, except for the
Non-Competition Agreement, duly executed by each of the parties thereto.

 

(j)                                     Compliance
Review.  Purchaser shall not have
failed to be satisfied with the results of the Compliance Review and the
related consequences of such results in the context of both the objectives
contemplated by the Compliance Review and the transactions contemplated by the
Transaction Agreements and the Compliance Disposition shall have occurred.

 

(k)                                  Deliverables.  Purchaser shall have received: (i)
certificates or other instruments evidencing the Shares (if applicable) duly
endorsed in blank, or accompanied by stock powers duly executed in blank, in
form sufficient to convey title to Purchaser; (ii)  certificates or other instruments evidencing title to the shares
of capital stock of the Material Subsidiaries; (iii) evidence that none of the
OGP Subsidiaries, Purchased Assets or the OGP Assets is subject to the liens
created to secure the $1.5 billion multi-currency revolving credit facility
agreement between, inter alia,
ABB Oil and Gas Inc. and Credit Suisse First Boston, in a form reasonably
satisfactory to Purchaser; (iv) a legal opinion from Homburger Rechtsanwälte of
Weibergstrasse 56, Zürich, Switzerland, substantially in the form of Exhibit R;
and (v) evidence of the termination and related payoff of the Norway
Securitization Program with Den norske Bank ASA, substantially in the form of
Exhibit V.

 

SECTION 8.04.                 Additional Conditions to the
Consummation of Certain Transactions. 
The obligations of ABB and Purchaser to consummate each Secondary
Transaction shall also be subject to the satisfaction or waiver, prior to, at
or after the Closing, of the Additional Approvals applicable to such Secondary
Transaction set forth on Exhibit M.

 

ARTICLE IX

INDEMNIFICATION

 

SECTION 9.01.                 Survival of Representations and
Warranties.  Subject to the
limitations and other provisions of this Agreement:  (a) the representations and warranties of the Parties contained
in this Agreement and the certificates required by Sections 2.07(v) and 2.08(v)
and (b) the covenants and agreements of the Parties contained in this Agreement
which by their terms are required to be performed on or before the Closing (the
“Pre-Closing Covenants”) shall survive the Closing and shall remain in
full force and effect until September 30, 2005; provided, however,
that (i) this Article IX shall not apply to the representations and
warranties contained in Section 3.12 (Tax); (ii) the representation and
warranties contained in Sections 3.01 (Organization and Authority of ABB and
the Sellers), 3.02 (Organization of the OGP Subsidiaries; Capital Stock of the
OGP Subsidiaries; Ownership of the Shares), Section 3.13 (Employee Benefit
Matters), 3.16(a) (Assets), 3.18 (Brokers) and 4.01 (Organization and Authority
of Purchaser and the OGP Purchasers) shall survive the Closing and remain in
full force and effect for a period of six (6) years from the Closing Date; and
(iii) the representations and warranties contained in Section 3.15
(Environmental Matters) shall survive the Closing and remain in full force and
effect for a period of seven (7) years from the Closing Date; and (c) each
covenant and agreement of the Parties contained in this Agreement which by its
terms requires 

 

91

 

performance in whole or
in part after the Closing Date (a “Post-Closing Covenant”) shall survive
the Closing and shall remain in full force and effect until such covenant or
agreement is fully performed.

 

SECTION 9.02.                 Indemnification by Purchaser.  Purchaser agrees from and after the Closing
Date to indemnify ABB and its Affiliates, and their respective officers,
directors, employees, agents, successors and assigns (each, an “ABB
Indemnified Party”), against and hold them harmless from all Liabilities,
losses, damages, claims, costs, and expenses (including reasonable attorney’s
fees) (collectively, “Losses”) actually suffered or incurred by them
arising out of:  (i) the breach of any
representation or warranty of Purchaser contained in this Agreement or the
certificate required by Section 2.07(v), (ii) the breach of any
Pre-Closing Covenant by Purchaser, (iii) the breach of any Post-Closing
Covenant by Purchaser, (iv) any Assumed Liability, and (v) any claim or cause
of action arising before, on or after the Closing Date against any ABB
Indemnified Party with respect to the OGP Business or any of the OGP Assets or
operations of the OGP Subsidiaries, whether relating to the operation of the
OGP Business prior to or after the Closing, except for any claim (other than a
claim for a breach of Section 3.23) with respect to which ABB is
specifically obligated to indemnify the Purchaser Indemnified Parties under
Section 9.03.  No claim may be
asserted nor may any action be commenced against Purchaser pursuant to clause
(i) or (ii) of this Section 9.02 for breach of any representation or
warranty or Pre-Closing Covenant, unless written notice of such claim or action
is received by Purchaser describing in reasonable detail the facts and
circumstances with respect to the subject matter of such claim or action on or
prior to the date on which the representation or warranty or Pre-Closing
Covenant on which such claim or action is based ceases to survive as set forth
in Section 9.01; provided, however, that in respect of any
Loss which is contingent, Purchaser shall not be required to make any payment
hereunder until the time that such contingent Loss ceases to be contingent, but
this provision shall not operate to allow Purchaser to avoid a claim made in
respect of a contingent Loss if such claim was made within the applicable time
limit and containing such details as are required by this sentence.

 

SECTION 9.03.                 Indemnification by ABB.  (a) 
ABB agrees from and after the Closing Date to indemnify Purchaser and
the Purchaser Affiliates, and their respective officers, directors, employees,
agents, successors and assigns (each, a “Purchaser Indemnified Party”)
against and hold them harmless from all Losses actually suffered or incurred by
them arising out of:  (i) the breach of
any representation or warranty of ABB contained in this Agreement or the
certificate required by Section 2.08(v) (other than any representation or
warranty contained in Section 3.12 of this Agreement), (a “Warranty
Claim”), (ii) the breach of any Pre-Closing Covenant by ABB, (iii) the
breach of any Post-Closing Covenant by ABB, (iv) the Excluded Liabilities, (v)
the Reorganization, (vi) the matters described in Section 3.07 of the
Disclosure Schedule, (vii) any Asbestos Claims, (viii) the Environmental
Liabilities, (ix) the Action described in Item 7 of Section 3.08(a) of the
Scope I Operations Disclosure Schedule, but only to the extent such Losses
exceed $100,000, (x) the failure of Lummus FPS Houston to perform its
obligations to Purchaser or the Purchaser Affiliates pursuant to the Kizomba
contract described in Item 3 of Section 3.09(a)(iv) of the Scope I
Operations Disclosure Schedule, (xi) the Chase Sale Agreement, (xii) any Title
IV Plans, (xiii) the Non-Business Liabilities, (xiv) Off Balance Sheet
Indebtedness,  (xv) the termination of
the Securitization Programs, (xvi) the breach of any representation or warranty
contained in Section 3.07(iv), (xvii) the claim asserted in the demand
letter described in Item 20 of Section 3.08(a) of the Scope I Operations
Disclosure Schedule,

 

92

 

(xviii) the Excess
Transocean Payment, (xvix) the Excess Finder’s Fee and (xx) the agreements
governing the part of the Capital Modernization Program provided by J.P. Morgan
Leasing Inc.  No claim may be asserted
nor may any action be commenced against ABB pursuant to clause (i) or (ii) of
this Section 9.03(a) for breach of any representation or warranty or
Pre-Closing Covenant, unless written notice of such claim or action is received
by ABB describing in reasonable detail the facts and circumstances with respect
to the subject matter of such claim or action on or prior to the date on which
the representation or warranty or Pre-Closing Covenant on which such claim or
action is based ceases to survive as set forth in Section 9.01; provided,
however, that in respect of any Liability which is contingent, ABB shall
not be required to make any payment hereunder until the time that such
contingent liability becomes fixed but this proviso shall not operate to allow
ABB to avoid a claim made in respect of a contingent liability if such claim
was made within the applicable time limit and containing such details as are
required by this sentence.

 

(b)                                 No
claim may be made against ABB for indemnification pursuant to a Warranty
Claim:  (i) with respect to any
individual claim of Loss unless such claim exceeds $100,000 (nor shall any such
item be applied to or considered for purposes of calculating the aggregate
amount of the Purchaser Indemnified Parties’ Losses or any deductible amount
pursuant to Section 9.03(a)(iv) or the next sentence of this
Section 9.03(b) other than as set out in this Section 9.03(b)) and
(ii) unless the aggregate amount of all Losses of the Purchaser Indemnified
Parties with respect to Warranty Claims and subject always to Section 9.03(c)
and (d) below, shall exceed $10,000,000 (the “Purchaser Threshold”), and
ABB shall then be liable for all such Losses and not just the amount in excess
of the Purchaser Threshold. 
Notwithstanding clause (ii) above but subject always to Section 9.03(d)
below, the maximum amount that ABB shall be required to pay pursuant to
Section 9.03(a) in respect of all Losses by all Purchaser Indemnified
Parties is $400,000,000 (the “Cap”). 
For the purposes of this Section 9.03(b), where there are Warranty
Claims arising from the same set or similar facts or events all such claims
shall be deemed to give rise to one claim in respect of the total Loss suffered
by Purchaser.  No claim may be made
against ABB for indemnification pursuant to Section 9.03(a)(vii) with
respect to any Losses of a JV Company in excess of the book value of the shares
in such JV Company as of the Closing Date. 
Losses not in excess of $100,000 in the aggregate shall not be deemed to
be a Loss for purposes of Section 9.03(a)(ix).  Losses in excess of the amount of the Excess Transocean Payment
shall not be deemed to be a Loss for purposes of
Section 9.03(a)(xviii).  Losses in
excess of the amount of the Excess Finder’s Fee shall not be deemed to be a
Loss for purposes of Section 9.03(a)(xix).

 

(c)                                  Notwithstanding
anything contained in Section 9.03(b)(ii) to the contrary, claims for
indemnification pursuant to Section 9.03(a)(i) based upon any breach of
the representations and warranties contained in Section 3.15
(Environmental Matters) shall not be subject to the Purchaser Threshold, but no
such claim for indemnification may be made against ABB relating to any
particular property unless and until the aggregate amount of all Purchaser
Indemnified Parties’ Losses relating to such property exceeds $250,000, and ABB
shall then be liable only for the amount of such Losses in excess of such
amount.  Any amounts subject to the
foregoing sentence shall be ignored for purposes of determining whether the
Purchaser Threshold has been satisfied.

 

93

 

(d)                                 Notwithstanding
any other provision of this Agreement, Section 9.03(b) does not apply in
respect of (i) a Warranty Claim arising from any fact, matter or circumstance
relating to Sections 3.01 (Organization and Authority of ABB and the Sellers),
3.02 (Organization of the OGP Subsidiaries; Capital Stock of the OGP
Subsidiaries; Ownership of the Shares), 3.08(b) (Litigation) 3.16(a) (Assets)
and 3.18 (Brokers) or (ii) claims for indemnification made pursuant to
Section 9.03(a)(iii), (vi), (vii), (xii) or (xvi).

 

SECTION 9.04.                 Indemnification Procedures.  (a) 
A Purchaser Indemnified Party or an ABB Indemnified Party, as the case
may be (for purposes of this Section 9.04, an “Indemnified Party”),
shall give the indemnifying party under Section 9.02 or 9.03, as
applicable (for purposes of this Section 9.04, an “Indemnifying Party”),
written notice of any matter which it has determined has given or could give
rise to a right of indemnification under this Agreement, as soon as reasonably
practicable following such determination, stating the amount of the Loss, if
known, and method of computation thereof, containing a reference to the
provisions of this Agreement in respect of which such right of indemnification is
claimed or arises; provided, however, that the failure to timely
provide such notice shall not release the Indemnifying Party from any of its
obligations under this Article IX except to the extent the Indemnifying
Party is materially prejudiced by such failure, it further being understood
that notices for Warranty Claims or breach of Pre-Closing Covenants must be
delivered prior to the expiration of the applicable survival period specified
in Section 9.01.

 

(b)                                 An
Indemnified Party shall give written notice of any pending or threatened
investigation, claim or demand by a third party (which for the avoidance of
doubt shall include any Governmental Authority) that the Indemnified Party has
determined has given or could give rise to a right of indemnification hereunder
(a “Third Party Claim”), as soon as reasonably practicable following
receipt of such claim or demand describing in reasonable detail the facts and
circumstances with respect to the subject matter of such claim or demand; provided,
however, that the failure to timely provide such notice shall not
release the Indemnifying Party from any of its obligations under this
Article IX except to the extent the Indemnifying Party is materially
prejudiced by such failure, it being understood that notices for Warranty
Claims or breach of Pre-Closing Covenants must be delivered prior to the
expiration of the applicable survival period specified in Section 9.01.

 

(c)                                  Other
than in respect of a Retained Conduct Matter, the Indemnifying Party shall have
the right, but not the obligation, to direct, through counsel of its own
choosing, which counsel shall be reasonably satisfactory to the Indemnified
Party, the defense or settlement of any Third Party Claim the subject of
indemnification hereunder at its own expense.  If the Indemnifying Party elects to assume the defense of any such
Third Party Claim, the Indemnified Party may participate in such defense, but
in such case the expenses of the Indemnified Party shall be paid by the
Indemnified Party.  The Indemnified Party
shall provide the Indemnifying Party with reasonable access to its records and
personnel relating to any such claim, assertion, event or proceeding during
normal business hours and upon reasonable notice and shall otherwise cooperate
with the Indemnifying Party in the defense or settlement thereof, and the
Indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith.  Notwithstanding
the foregoing, (i) at any time prior to the Indemnifying Party’s delivery
to each relevant Indemnified Party of notice of such Indemnifying Party’s
election to assume the defense of a Third Party Claim, any Indemnified Party
may, at the 

 

94

 

sole cost and expense of
such Indemnified Party, file any motion, answer or other pleadings or take any
other action that the Indemnified Party reasonably believes to be necessary or
appropriate to protect its interests so long as such action preserves and does
not waive or otherwise prejudice the Indemnifying Party’s ability to assert any
relevant defense, counter claim, cross claim or other response to such claim,
(ii) the Indemnified Party may take over the control of the defense or
settlement of a Third Party Claim at any time if it irrevocably waives in
writing its right to indemnification under this Article IX with respect to
such claim and (iii) the Indemnifying Party may not, without the consent
of the Indemnified Party (such consent not to be unreasonably withheld or delayed),
settle or compromise any action or consent to the entry of any judgment if such
settlement, compromise or judgment would obligate the Indemnified Party to take
any action or refrain from taking any action or otherwise alter the manner in
which it conducts the OGP Business.  The
failure of the Indemnified Party to participate in, conduct or control such
defense shall not relieve the Indemnifying Party of any obligation it may have
hereunder.

 

(d)                                 If
an Indemnifying Party shall fail to undertake any such defense, an Indemnified
Party shall have the right to undertake the defense or settlement thereof, at
the Indemnifying Party’s expense. 
Whether or not an Indemnifying Party shall have assumed the defense of a
Third Party Claim, an Indemnified Party shall not admit any Liability with
respect thereto, or settle, compromise or discharge such Third Party Claim
without such Indemnifying Party’s prior written consent, such consent not to be
unreasonably withheld or delayed.  If an
Indemnified Party assumes the defense of any such Third Party Claim pursuant to
this Section 9.04 and proposes to settle such claim or proceeding prior to
a final judgment thereon or to forgo any appeal with respect thereto, then such
Indemnified Party shall give an Indemnifying Party written notice thereof as
soon as is reasonably practicable and such Indemnifying Party shall have the
right to participate in the settlement or assume or reassume the defense of
such claim or proceeding at any time by written notice to such Indemnified
Party.

 

(e)                                  Purchaser
shall have the right to direct the defense of any Third Party Claim arising out
of a Retained Conduct Matter.  Unless
Purchaser allows ABB to direct the defense or settlement, Purchaser shall
consult with ABB and consider all of ABB’s reasonable requests, and make
reasonable efforts to mitigate any Losses arising out of any such Claim.  ABB has the right to be present during any
settlement conferences and shall be notified of and have the right to attend
any meetings with Governmental Authorities and shall be provided with copies of
all relevant correspondence, results, reports and other documents.  Neither ABB nor Purchaser shall agree,
without the prior written consent of the other Party, which consent shall not
be unreasonably withheld or delayed to a settlement of any Retained Conduct
Matter unless such settlement does not require an admission of guilt or
liability by such Party and effectively releases the other Party from any
liability with respect to such matters without imposing any obligation or
restraint on such other Party.  ABB
shall be released from its indemnification obligations with respect to a
Retained Conduct Matter (if otherwise valid under this Agreement) only to the
extent that associated Losses (i) are identified as a result of any
investigation after the Closing Date; or (ii) result from (A) any negligent act
or omission by Purchaser, the OGP Subsidiaries or any Purchaser Affiliates or
(B) any act or omission that would result in a violation of Section 3.07(iv)
by Purchaser, the OGP Subsidiaries or any of their respective Affiliates after
the Closing Date that increases the amount of such Losses.  Notwithstanding the foregoing, ABB shall not
be released from its indemnification obligations with respect to a 

 

95

 

Retained Conduct Matter
pursuant to clause (i) above if associated Losses are identified as a result of
investigations after the Closing Date and the results of such investigations
are required to be disclosed (A) by an Order or Governmental Authority or (B)
in response to (1) an Action against Purchaser, the OGP Subsidiaries or any of
the Purchaser Affiliates by a Governmental Authority or any other Person, (2) a
requirement of a Governmental Authority or Law which if not responded to will
give rise to an Action or (3) any circumstance which if known by a Governmental
Authority would give rise to an Action.

 

SECTION 9.05.                 Environmental Remediation.  (a) 
Purchaser shall as soon as is reasonably practicable provide to ABB
written notice in accordance with Section 11.02 of any conditions or
circumstances that are reasonably likely to require or give rise to Remedial
Actions and that are reasonably likely to result in Purchaser making a claim
for indemnification pursuant to either Section 9.03(a)(viii) or
Section 9.03(a)(i), in the latter case based upon any breach of the
representations and warranties contained in Section 3.15; provided,
however, that any failure to provide such notice shall not affect
Purchaser’s indemnification rights hereunder except to the extent ABB’s
interests are prejudiced.  Except in an
emergency, in the event ABB receives notice under Section 9.04 (which
relates only to Remedial Actions) or 9.05, ABB shall have the right, but not
the obligation, to conduct any and all Remedial Actions necessary to satisfy
its indemnification obligations, unless ABB is not permitted to conduct such
Remedial Actions by a Governmental Authority. 
Purchaser shall cooperate with ABB in connection therewith (including
providing ABB reasonable access to any OGP Real Property upon which, or from
which, Remedial Actions are to be conducted). 
ABB shall ensure at its own expense that all reasonable action is taken
to keep or restore so far as reasonably possible any OGP Real Property or OGP
Asset as appropriate, at which or from which ABB conducts Remedial Actions, in
or to no worse condition than that prior to the commencement of the Remedial
Actions and shall indemnify Purchaser or at Purchaser’s election any OGP Subsidiary
for any Losses actually suffered by Purchaser or any of the OGP Subsidiaries as
a result of any damage caused to the OGP Real Property or OGP Assets by ABB’s
Remedial Actions.  In satisfying its
indemnification obligations in respect of Remedial Actions, ABB shall have the
right to implement the most cost-effective measures that are consistent with
Environmental Laws then applicable to the use and operation of the relevant
facilities to the extent that they are not more onerous than those applicable
to the use and operation of the relevant facilities while under the ownership
of ABB, and that are consistent with any explicit requirement of a Governmental
Authority that is issued pursuant to such Environmental Laws, provided that
they reasonably ensure that no further Remedial Action, which would qualify for
indemnification under this Agreement, could reasonably be expected to be
required in the foreseeable future.  In
implementing such measures, ABB shall consult with Purchaser and consider all
Purchaser’s reasonable suggestions, and make reasonable efforts to mitigate any
interruption to the OGP Business. 
Purchaser shall be afforded the reasonable opportunity to be present
during any Remedial Action and shall be notified of and shall be afforded the
reasonable opportunity to attend any meetings with Governmental Authorities and
shall be provided with copies of all relevant correspondence, results, reports
and other documents.

 

(b)                                 With
respect to any claim by a Purchaser Indemnified Party for indemnification
pursuant to either Section 9.03(a)(viii) or under Section 9.03(a)(i),
in the latter case based upon any breach of the representations and warranties
contained in Section 3.15, ABB shall be released from its indemnification
obligations for such claims (if otherwise valid 

 

96

 

under this Agreement) to
the extent that associated Losses (A) are increased by a change in primary use
or zoning classification of the OGP Real Property from industrial use to
commercial or residential use or from commercial use to residential use after
the Closing Date by Purchaser, the OGP Subsidiaries or their respective
Affiliates, or any other Person; (B) are identified as a result of any sampling
or testing of the Environment after the Closing Date except that which is
(i) required by an Order or Environmental Law, Environmental Permit or
Environmental Agreement; (ii) in response to (a) an Action against
Purchaser, the OGP Subsidiaries or any of their respective Affiliates by a
Governmental Authority or any other Person, (b) a requirement of a Governmental
Authority or Law which if not responded to could reasonably be expected to give
rise to an Action, or (c) any circumstance which if known by a Governmental
Authority would give rise to an Action; (iii) conducted with respect to
the state of repair of any buildings or plant on the premises including any
foundation and underground tank and structures, with respect to which such
sampling and testing is required pursuant to relevant Law or is undertaken in
accordance with standards commonly accepted and practiced within the same or
similar industry; (iv) conducted in relation to the closure or decommissioning
of, or the expansion, improvement or development of any OGP Real Property, with
respect to which such sampling and testing is required pursuant to relevant Law
or is undertaken in accordance with standards commonly accepted and practiced
within the same or similar industry; (v) conducted in connection with routine
or emergency utility work or the routine or emergency assessment of the
structural integrity of fountains, foundations, drains, sewers, sumps or
storage tanks, with respect to which such sampling and testing is required
pursuant to relevant Law or is undertaken in accordance with standards commonly
accepted and practiced within the same or similar industry; (vi) required by
the terms of any Leased Real Property lease in effect as of the date hereof;
and/or (vii) undertaken by Purchaser in respect of a matter which is the
subject of a valid indemnity claim made pursuant to Section 9.03(a)(viii)
or, for indemnification pursuant to Section 9.03(a)(i) based upon any
breach of the representations and warranties contained in Section 3.15; or
(C) result from any negligent act or omission of Purchaser, the OGP
Subsidiaries or any of the Purchaser Affiliates after the Closing Date that
increases the amount of such Losses.

 

SECTION 9.06.                 Certain Projects Relating to the
Business.  (a)  Section 9.06(a) of the Disclosure
Schedule sets forth the projects of the OGP Business to which this
Section 9.06 applies (the “Indemnified Projects”).

 

(b)                                 From
and after the Closing and so long as ABB has unfulfilled obligations under this
Section 9.06, Purchaser shall, and shall cause the OGP Subsidiaries and
the OGP Purchasers to:

 

(i)                                     afford ABB and the
ABB Representatives reasonable access, during normal business hours and upon
reasonable notice, to the records and personnel of the OGP Subsidiaries and the
OGP Purchasers in order to allow ABB to fulfill its obligations and pursue any
available remedies under this Section 9.06 with respect to the Indemnified
Projects;

 

(ii)                                  cooperate with ABB
and the ABB Representatives in order to assist ABB in connection with any
reasonable requests it may have with respect to its obligations under this
Section 9.06 concerning the Indemnified Projects;

 

97

 

(iii)                               afford the ABB
Representatives the opportunity, at least once each calendar month after giving
at least seven Business Days written notice, to meet with the applicable
project manager for each Indemnified Project and direct such project manager to
discuss with the ABB Representatives the extent of the efforts taken by
Purchaser and the Purchaser Affiliates to comply with clause (v) below;

 

(iv)                              deliver to ABB monthly
statements no later than ten days after the end of each month, setting out in
reasonable detail the status of each Indemnified Project, including all
material developments since the previous statement;

 

(v)                                 perform in all
material respects the obligations of each OGP Subsidiary under all contracts
and agreements governing the Indemnified Projects, and act in accordance with
the contractual terms and conditions of such contracts and agreements in each
case in a manner consistent with past practice and in compliance with
applicable Law; and

 

(vi)                              allow ABB to nominate one
Person to be an observer on the steering committee of each Indemnified Project
(and such steering committee shall monitor the progress of each of the
Indemnified Projects in a manner consistent with past practice in relation to
such Indemnified Projects, but in any case such steering committee shall meet
no less than once every two months), which costs and expenses of such steering
committee observer shall be paid by ABB. 
Purchaser shall take all necessary steps to ensure that such observer is
given all proper notice and invited to participate in all meetings of each such
steering committee in his capacity as an observer.

 

(c)                                  The
Effective Date Balance Sheet shall contain separate identified provisions with
respect to each of the Indemnified Projects (in the aggregate, the “Estimated
Indemnified Project Loss Provisions”), established in accordance with the
Closing Accounting Principles.

 

(d)                                 (i)  Purchaser
shall deliver to ABB a final statement in respect of each Indemnified Project
prepared in accordance with the Closing Accounting Principles (each, a “Final
Indemnified Project Statement”), to be delivered promptly after full performance
and completion of the relevant Indemnified Project by Purchaser and/or the
Purchaser Affiliates as evidenced by the applicable customer’s final acceptance
thereunder (or appropriate evidence of termination thereof) and expiry of the
relevant warranty or other limitation period applicable to the Indemnified
Project.  The Final Indemnified Project
Statement shall set out in reasonable detail (with reasonably appropriate
supporting documentation, data and backup information) the amount of the
Indemnified Project Losses actually incurred by Purchaser or the Purchaser
Affiliates with respect to such Indemnified Project, and subject to
Section 9.06(d)(iv) shall be deemed to be final, binding and conclusive on
the Parties.  For the purposes of this
Section 9.06, “Indemnified Project Loss” shall mean the excess
(which may be a negative number and therefore a gain), if any, of the full
costs actually incurred by Purchaser in the performance of an Indemnified
Project (including liquidated and other damages payable to a customer in
accordance with the terms thereof and any cost actually incurred in complying
with any contractual obligations during the applicable warranty period under
the contract governing such Indemnified Project) over the revenues (including the
net sales price actually received from 

 

98

 

customers plus interest
on customer advances), all calculated in accordance with the Closing Accounting
Principles.

 

(ii)                                  Subject
always to Section 9.06(h), after completion of the Final Indemnified
Project as described in clause (i) above and the corresponding Final
Indemnified Project Statement, the Parties shall determine the “Net Position”
which shall equal ([A] + [B]) — ([C] + [D]), as described below, and thereafter
the settlement of the Parties’ obligations under this Section 9.06 shall
be made as set out below provided, however, that if [A] is greater than [C]
then the Net Position shall equal [B] — [D]:

 

(1)           To
the extent the Net Position is negative, ABB shall pay to Purchaser such
negative amount, or

 

(2)                                  To the extent the Net
Position equals zero, neither Party shall be under any obligation to make a
payment to the other Party, or

 

(3)                                  To the extent the Net
Position is positive, Purchaser shall pay to ABB an amount equal to such
positive amount.

 

For
purposes of this Section 9.06(d)(ii):

 

[A] =
the amount of the Estimated Indemnified Project Loss Provisions.

 

[B] =
the aggregate amount of the ABB Stage Payments (as defined below).

 

[C] =
the net aggregate amount of the Indemnified Project Losses as reflected on the
Final Indemnified  Projects Statements.

 

[D] =
the aggregate amount of Purchaser Stage Payments (as defined below).

 

(iii)                               Subject
always to Section 9.06(h), on the date that is six months after the
Effective Date, and every six months thereafter until the final settlement
pursuant to clause (i) above (each, a “Stage Period”), Purchaser shall
provide to ABB a written notice containing a good faith estimate, with
reasonably detailed supporting data and backup information, of the net
aggregate amount of Indemnified Project Losses of all of the Indemnified
Projects determined in accordance with the Closing Accounting Principles
(insofar as they relate to the Indemnified Projects) but as of such date rather
than as of the Effective Date (each, a “Stage Estimate”), and the
parties shall thereupon determine the applicable “Net Stage Position”
which shall equal ([A] + [B]) — ([C] + [D]), (unless [A] is greater than [C],
in which case the applicable Net Stage Position shall equal [B] - [D]);

 

and thereafter the
settlement of the applicable Net Stage Position shall be made as follows:

 

(1)                                  To
the extent the Net Stage Position is negative, ABB shall pay to Purchaser such
negative amount (each such payment, an “ABB Stage Payment”), or

 

(2)                                  To
the extent the Net Stage Position equals zero, neither Party shall be under any
obligation to make a payment to the other Party, or

 

99

 

(3)                                  To
the extent the Net Stage Position is positive, Purchaser shall pay to ABB an
amount equal to such positive amount (each such payment, a “Purchaser Stage
Payment”).

 

For
purposes of this Section 9.06(d)(iii):

 

[A] =
the amount of the Estimated Indemnified Project Loss Provisions.

 

[B] =
the aggregate amount of all ABB Stage Payments prior to the applicable Stage
Period.

 

[C] =
the amount of the applicable Stage Estimate.

 

[D] =
the aggregate amount of all Purchaser Stage Payments prior to the applicable
Stage Period.

 

(iv)                              ABB
shall have the right to dispute any amount reflected on a Final Indemnified
Project Statement and any Stage Estimate pursuant to the dispute mechanism set
forth in Section 2.10(b), applied mutatis
mutandis.

 

(e)                                  (i)  Any
Third Party Claims (other than claims by customers or subcontractors asserting
a breach of warranty or breach of contract) shall be subject to the
indemnification procedures set forth in Section 9.04.

 

(ii)                                  Subject
to Section 9.06(e)(iii), Purchaser shall have the right to direct the
defense of any Third Party Claim by customers or subcontractors asserting a
breach of warranty or breach of contract. 
Unless Purchaser allows ABB to direct the defense or settlement,
Purchaser shall consult with ABB and consider all of ABB’s reasonable requests,
and make reasonable efforts to mitigate any Losses arising out of any such
Claim.

 

(iii)                               In
the event any Third Party Claim by a customer or subcontractor asserting a
breach of warranty or breach of contract gives rise to an Action, at such time
such Third Party Claim shall become subject to the indemnification procedures
set forth in Sections 9.04(b), (c) and (d).

 

(f)                                    Notwithstanding
anything in Sections 9.02 and 9.03 to the contrary, the rights and obligations
of the Parties in respect of the indemnification and other payments for any and
all matters pertaining to the Indemnified Projects shall be governed by this
Section 9.06.  Purchaser and ABB
acknowledge and agree that, following the Closing, the indemnification
provisions of this Section 9.06 shall be the sole and exclusive remedies
of Purchaser, the Purchaser Affiliates, ABB and its Affiliates for any and all
Losses relating to, or arising under, the Indemnified Projects.  For avoidance of doubt, Purchaser acknowledges
and agrees that it shall have no right to seek indemnity from ABB for any Loss
arising from or related to an Indemnified Project pursuant to an indemnity
claim under Section 9.03(a) for a breach of a representation or warranty
of ABB, and no amounts paid by ABB pursuant to this Section 9.06(f) shall
be used in the calculation of the Purchaser Threshold or the Cap.

 

100

 

(g)                                 Payments
to be made by either Party pursuant to this Section 9.06 shall be made
within five Business Days following the date which is the earlier of (i) the
date when the relevant amount has been agreed between the Parties and (ii) the
date when the amount has been finally determined pursuant to the dispute
mechanism set forth in Section 9.06(d)(iv), applied mutatis mutandis.

 

(h)                                 For
the avoidance of doubt, Purchaser shall not be required to repay any of the
Estimated Indemnified Project Loss Provisions pursuant to this
Section 9.06.

 

SECTION 9.07.                 Additional Indemnification
Provisions; Exclusive Remedies. 
(a)  ABB and Purchaser agree for
themselves and on behalf of their respective Affiliates or Purchaser
Affiliates, as applicable, that, with respect to each indemnification
obligation contained in this Agreement, (i) all Losses shall be net of any
third party insurance paid to or for the benefit of the Indemnified Party from
its own or its Affiliates’ or Purchaser Affiliates’ insurance policies in
connection with the facts giving rise to the right of indemnification, after
deduction of any Taxes and any out-of-pocket cash and expenses reasonably
incurred in connection with securing such insurance payment (including
retrospective insurance premiums directly attributable to such claim),
(ii) all of ABB’s obligations to indemnify a Purchaser Indemnified Party
for Losses under this Agreement shall be reduced to the extent of the amount of
any specific provision, specific reserve or general reserve in respect of a
specific contract, lease or project in respect of the relevant Losses reflected
in the Final Effective Date Balance Sheet and (iii) ABB shall have no
Liability for Losses under a Warranty Claim to the extent that (A) such
Warranty Claim would not have arisen or been aggravated but for any alteration,
repeal or enactment of any applicable Law after the Closing Date, (B) such
Warranty Claim would not have arisen but for any change in the accounting
policies, practices or procedures adopted by Purchaser, an OGP Purchaser or the
OGP Subsidiaries (other than changes required to ensure compliance with Law in
effect as of the Closing Date), or (C) such Warranty Claim would not have
arisen but for a failure by Purchaser, an OGP Purchaser or the OGP Subsidiaries
after the Closing to take reasonable steps to mitigate the effect of the
circumstances giving rise to such Warranty Claim.

 

(b)                                 An
Indemnified Party shall use its reasonable efforts to pursue any and all rights
to reimbursement, recovery or indemnification with respect to all Losses for
which it is entitled to indemnification under this Agreement pursuant to any
contract, agreement, insurance policy or arrangement with any Person (other
than Affiliates or Purchaser Affiliates of such Indemnified Party).  For the purposes of this
Section 9.07(b), “reasonable efforts” shall be satisfied without the
Indemnified Party being required to bring any claim or other proceeding against
any such person.  If an Indemnified
Party, for any reason, does not bring a claim or other proceeding against any
such person, the Indemnifying Party shall be entitled to bring such claim or
other proceeding against such party, and the Indemnified Party shall, upon
reasonable request, provide the Indemnifying Party and its agents and
representatives with reasonable access to (i) any applicable books and records
and (ii) any applicable officers, directors or employees in each case of
Purchaser, the OGP Purchasers and/or the Indemnified Party, as the case may be,
to such claim or other proceeding.  The
Indemnifying Party shall, at the request of the Indemnified Party, refrain from
bringing such claim or other proceeding against such party; provided, however,
that such a request by the Indemnified Party shall be deemed a waiver of
indemnification from the 

 

101

 

Indemnifying Party up to
the amount of the reimbursement, recovery or indemnification reasonably
expected to be reimbursed, recovered or indemnified from such person.

 

(c)                                  If
an Indemnifying Party pays an amount in discharge of any claim under this
Agreement and an Indemnified Party, its Affiliates or Purchaser Affiliates or
any of their respective officers, directors, employees, agents and
representatives subsequently recovers from a third party a sum which is
attributable to the subject matter of the claim, such Indemnified Party shall
promptly pay to such Indemnifying Party an amount equal to all amounts
recovered up to the aggregate amount thus paid by such Indemnifying Party
hereunder.  If the Indemnifying Party
has not already paid such an amount in satisfaction of such a claim, the amount
of the claim the Indemnifying Party would be liable for shall be reduced by an
amount equal to such recovery.

 

(d)                                 None
of the Sellers shall provide any representation, warranty or indemnity under
any Local Agreement, unless a representation, warranty or indemnity provided in
this Agreement is required to be restated in a Local Agreement in order to make
the Local Agreement enforceable under applicable Law, and all such
representations, warranties and indemnities shall be expressly excluded
thereunder.  To the extent any such
exclusion would be prohibited by applicable Law and Purchaser or an OGP
Purchaser would have a cause of action by virtue of any representation,
warranty or indemnity implied by applicable Law, Purchaser shall ensure that no
claim is made in respect thereof by Purchaser or the relevant OGP Purchaser
against ABB or any of its Affiliates; it being understood and agreed by the
Parties that the remedies expressly afforded to Purchaser and the Purchaser
Affiliates under this Agreement shall be the sole recourse of Purchaser and the
Purchaser Affiliates, on the one hand, against ABB and its Affiliates, on the
other hand, relating to the transactions contemplated by the Transaction
Agreements.

 

(e)                                  Except
as provided in Article VII relating to Tax matters, following the Closing,
the indemnification provisions of Sections 9.02 and 9.03 shall be the sole and
exclusive remedies of Purchaser, ABB and their respective Affiliates or
Purchaser Affiliates, as applicable, for any breach by the other Party of the
representations and warranties in this Agreement and for any failure by the
other Party to perform and comply with any Pre-Closing Covenants; provided,
however, that neither ABB nor Purchaser shall be precluded from pursuing
any claim or the amount of any claim arising from the fraudulent conduct of the
other in connection with the negotiation, execution and delivery of this
Agreement.  No breach of any
representation, warranty, covenant or agreement contained herein shall give
rise to any right on the part of Purchaser, on the one hand, or ABB, on the
other hand, after the consummation of the purchase and sale of the Shares and
the Purchased Assets and the assumption of the Assumed Liabilities contemplated
by this Agreement, to rescind this Agreement or any of the transactions
contemplated by the Transaction Agreements.

 

(f)                                    Neither
Party shall have any liability under any provision of the Transaction
Agreements for any punitive, special, incidental, consequential or indirect
damages, regardless of the legal theory on which the claim is based (it being
the understanding of the Parties that punitive or special damages that are paid
by an Indemnified Party to a third party with respect to a Third Party Claim
are direct damages of the Indemnified Party).

 

102

 

SECTION 9.08.                 Certain Procedures Governing the
Bank Guarantees.  (a)  The Adjustment and Indemnity Bank Guarantee
guarantees the payment obligations of ABB or its Affiliates, as applicable, (i)
with respect to the adjustments, if any, contemplated by Section 2.10 (the
“Adjustment Obligations”) and (ii) the obligations of ABB or its
Affiliates under this Agreement (other than the Adjustment Obligations) (the “Indemnity
Obligations”) and (iii) the obligations of ABB or its Affiliates under the
Related Agreements.  With respect to the
Adjustment Obligations, in the event that ABB has failed to make the Net
Payment to Purchaser, if any, in accordance with Section 2.10(h) within 10
Business Days of the due date for such payment, Purchaser shall, in accordance
with the terms of the Adjustment and Indemnity Bank Guarantee, be entitled but
not obligated to serve a notice upon the Appropriate Bank for payment of an
amount equal to the lesser of (x) the Net Payment and (y) the Net Outstanding
A/I Guarantee Amount.  If the Net
Payment exceeds $10,000,000 and Purchaser receives an amount equal to the Net
Payment from the Appropriate Bank, ABB shall cause the Appropriate Bank to
reissue the Adjustment and Indemnity Bank Guarantee in the amount equal to the
Net Outstanding A/I Guarantee Amount at such date prior to the payment of any
amounts to Purchaser representing the Net Payment at such date less
$10,000,000, provided always that if such calculation results in a negative
figure or zero, the Adjustment and Indemnity Bank Guarantee shall be deemed to
be extinguished and shall not be required to be reissued pursuant to this
Section 9.08(a).  If the Net
Payment is less than or equal to $10,000,000, upon payment by ABB or the
Appropriate Bank of the Net Payment, the Net Outstanding A/I Guarantee Amount
shall be reduced by the amount of the Net Payment, notwithstanding any
Indemnity Obligations of ABB under the Adjustment and Indemnity Bank
Guarantee.  With respect to the
Indemnity Obligations, in the event that Purchaser delivers to ABB or ABB Ltd.,
as the case may be (for purposes of this Section 9.08(a) only, together, “ABB”),
a notice of a claim pursuant to and in accordance with the relevant provisions
of any Transaction Agreement, and either (A) ABB mutually agrees with Purchaser
in writing that it is obligated to indemnify Purchaser for the amount set forth
in such notice, or (B) ABB fails to dispute in writing to Purchaser within ten
Business Days that it is obligated to indemnify Purchaser as set forth in such
notice and Purchaser has obtained a judgment in its favor in respect of a
Default Judgment Claim, or (C) a final non-appealable judgment or determination
shall have been rendered pursuant to and in accordance with Section 11.12 (or
such comparable provision in a Related Agreement) relating to such claim by
Purchaser deeming an amount to be due and owing by ABB to Purchaser (each, a “Payment
Event”), and within ten
Business Days of a Payment Event, ABB has failed to satisfy its payment
obligations in connection therewith, Purchaser shall be entitled but not
obligated to serve a notice upon the Appropriate Bank for payment of an amount
equal to the lesser of (x) the applicable amount arising out of such Payment
Event and (y) the Net Outstanding A/I Guarantee Amount.  Upon payment by ABB of an amount arising out
of a Payment Event or by the Appropriate Bank of such amount in connection with
such Payment Event, the Net Outstanding A/I Guarantee Amount shall be reduced
by such amount.  The Adjustment and
Indemnity Bank Guarantee shall terminate on the earlier of (x) the date when
the Net Outstanding A/I Guarantee Amount equals zero and (y) September 30,
2005 unless one or more claims have been made prior to such date and any one of
those claims has not been resolved, then, the date of termination shall be such
which is 28 days from the final determination or receipt by Purchaser of a
non-appealable judgment or determination in respect of such claim(s) in
accordance with the provisions of Section 11.12 of this Agreement (or such
comparable provision in a Related Agreement), in which case the Net Outstanding
A/I Guarantee 

 

103

 

Amount shall be reduced
to an amount equal to the aggregate amount of such claim(s) only to the extent
that the aggregate amount of such claims is less than the Net Outstanding A/I
Guarantee Amount.

 

(b)                                 The
Tax Election Bank Guarantee guarantees the payment obligations of ABB pursuant
to Section 7.08(d).  If, by five calendar
days before the Filing Date, ABB has failed to pay to the relevant Taxing
Authority by check or electronic or wire transfer the Designated Tax Amount and
to provide documentary evidence of such payment to Purchaser, then Purchaser
shall be entitled but not obligated to serve a notice upon the Appropriate Bank
for either (i) payment to the Taxing Authority in the Applicable Taxing
Jurisdiction where Purchaser has not previously paid such Tax or
(ii) payment to Purchaser where Purchaser has previously paid such Tax to
the applicable Taxing Authority (in which case documentary evidence of such
previous payment shall be provided to ABB by Purchaser) of an amount equal to
the lesser of (x) the applicable Designated Tax Amount and (y) the Net
Outstanding Tax Guarantee Amount.  Upon
payment by ABB of an amount under Section 7.08(d) or by the Appropriate
Bank of such amount (whether to the Applicable Taxing Jurisdiction or to
Purchaser under the circumstances described above), the Net Outstanding Tax
Guarantee Amount shall be reduced by such amount.  Upon payment to the relevant Taxing Authority (or to Purchaser
under the circumstances described above) with respect to the final Filing Date
in the final Applicable Taxing Jurisdiction for which a Section 338(h)(10)
Election (or similar election under state or local law) is being made, or in
which income or gain arising out of any pre-Closing acquisitions or
reorganizations undertaken at the request of Purchaser or arising out of the
sale of the shares of ABB Vetco Gray U.K. Ltd. by ABB Vetco Gray Inc. to
Purchaser or an OGP Purchaser is being reported, the Net Outstanding Tax
Guarantee Amount will be reduced to an amount equal to the sum of the
differences, for each Applicable Taxing Jurisdiction where there is a difference,
between (x) the Designated Tax Amount and (y) the Alternative Designated Tax
Amount.  In the case where ABB has
provided an opinion of counsel or an accountant or accountants of a type
contemplated by Section 7.08(f), the Net Outstanding Tax Guarantee Amount
will be further reduced by 25% of the difference between the Designated Tax
Amount and the Alternative Designated Tax Amount with respect to each of the
specific Applicable Taxing Jurisdictions. 
The Tax Election Bank Guarantee shall terminate on the earlier of (x)
the date when the Net Outstanding Tax Guarantee Amount equals zero and (y) the
second anniversary of the final Filing Date. 
For purposes of this Section 9.08(b) and Section 7.08(f), the
term “Applicable Taxing Jurisdictions” shall mean:  Alaska, California, Colorado, Louisiana,
Michigan, Mississippi, Montana, New Jersey, New Mexico, Oklahoma, Utah, and
Texas and any other jurisdiction in which a Tax Return reflecting income or
gain from the Section 338(h)(10) Election (or similar election under state
or local law), or reflecting income or gain arising out of any pre-Closing
acquisitions or reorganizations undertaken at the request of Purchaser or
arising out of the sale of the shares of ABB Vetco Gray U.K. Ltd. by ABB Vetco
Gray Inc. to Purchaser or an OGP Purchaser, must be filed; provided,
that in the event that ABB provides to
Purchaser a certification in a form reasonably satisfactory to Purchaser from
the auditors of its financial statements that ABB’s federal consolidated group
has sufficient net operating loss carryforwards and capital loss carryforwards
so that such consolidated group will not have any federal income tax liability
for the taxable year of such group that includes the Closing Date, the United
States of America will not be an Applicable Tax Jurisdiction, but if ABB has
failed to provide such certification within 90 days after the Closing Date,
then the United States of America will from that time forward be deemed to be
an Applicable Taxing Jurisdiction for the purposes of this Agreement.

 

104

 

(c)                                  The
Repayment Bank Guarantee guarantees the repayment obligations of ABB of a
portion of the Purchase Price should a Subsequent Closing with respect to a
Provisionally Retained Business fail to occur in accordance with the terms and
conditions of the Deferred Transfer Agreement (each a “Repayment Event”).  Within 10 Business Days of a Repayment
Event, if ABB has failed to pay to Purchaser an amount equal to the Allocation
Amount set forth with respect only to the relevant Provisionally Retained
Business (or a lesser amount determined pursuant to Section 4.02 of the
Deferred Transfer Agreement), Purchaser is entitled to but not obligated to
serve notice upon the Appropriate Bank for payment of such amount.  Upon payment by ABB or the Appropriate Bank
of such amount, the aggregate principal amount of the Repayment Bank Guarantee
shall be reduced by the Allocation Amount with respect to the relevant
Provisionally Retained Business.  Within
two Business Days of a Subsequent Closing of a Provisionally Retained Business,
the aggregate principal amount of the Repayment Bank Guarantee shall be reduced
by the Allocation Amount attributable to such Provisionally Retained
Business.  The Repayment Bank Guarantee
shall terminate upon the expiry of 25 Business Days following the earlier of
(i) the Subsequent Closing of the last Provisionally Retained Business or (ii)
the termination of the Deferred Transfer Agreement, in each case in accordance
with the terms and conditions of the Deferred Transfer Agreement.

 

(d)                                 (i)  To the extent that a payment by ABB or ABB
Ltd. to Purchaser in accordance with this Section 9.08 and the terms of
the relevant Guarantee is made in partial satisfaction of an amount properly
claimed thereunder, such payment shall not relieve ABB, or ABB Ltd. or the
relevant Affiliate of ABB, as the case may be, of liability with respect to any
remaining outstanding amounts due and owing to Purchaser.

 

(ii)                                  Each time a reduction
is contemplated in any of the Adjustment and Indemnity Bank Guarantee, the Tax
Election Bank Guarantee or the Repayment Bank Guarantee, each Party shall
jointly execute a written notice to the relevant Appropriate Bank instructing
it to effect such reduction.

 

(e)                                  Purchaser
shall only draw down funds under the Adjustment and Indemnity Bank Guarantee,
the Tax Election Bank Guarantee and the Repayment Bank Guarantee in accordance
with the terms and conditions of this Section 9.08.

 

SECTION 9.09.                 Interest.  Except with respect to the Deferred
Consideration, if an Indemnifying Party defaults in the payment when due of any
sum payable under this Article IX (whether determined by agreement or
pursuant to an order of an arbitrator or otherwise) the liability of such
Indemnifying Party shall be increased to include interest on such sum from the
date when such payment is due until the date of actual payment (whether before
or after judgment) at a rate per annum of the three-month U.S. treasury bill
rate (as reported by The Wall Street Journal or, if not reported thereby, by
another authoritative source) in effect on or about 11:00 a.m. (New York City
time) on such due date plus one hundred (100) basis points calculated on the
basis of the actual number of days elapsed over 365, from date of payment by
the Indemnified Party to the date of payment by the Indemnifying Party,
compounded annually.  Such interest
shall accrue from day to day.

 

105

 

ARTICLE X

TERMINATION AND WAIVER

 

SECTION 10.01.           Termination.  This Agreement may be terminated:

 

(a)                                  by
ABB or Purchaser if the Closing shall not have occurred by May 10, 2004  (the “Longstop Date”); provided, however,
that the Longstop Date may be extended under the following circumstances:

 

(i)                                     if, by the
Longstop Date, the Substantial Completion of the Compliance Review shall have
occurred and the Compliance Disposition shall not have occurred (“Event One”),
and (A) Purchaser (1) has provided evidence reasonably satisfactory to ABB that
the Purchaser Financing Documents will remain in full force and effect until
the Extended Longstop Date and (2) certifies in writing to ABB (the “Extension
Notice”) that based on the facts and circumstances and materiality of all
matters, individually or collectively, set forth in the notices provided to
Purchaser by ABB pursuant to Section 5.15, Purchaser either deems to be
satisfied or waives the conditions to the Closing contained in Sections 8.03(a)
and (d) as of the Longstop Date; provided, however, that if,
individually or collectively, the facts or circumstances or materiality of any
matter or the consequences arising from any matter set forth in any such notice
change from those set forth in the latest notice received by Purchaser prior to
its delivery of the Extension Notice with respect to any matter, or any notice
is inaccurate with respect to any matter after the Longstop Date or new facts
or circumstances with respect to any matter arise after the Longstop Date,
Purchaser shall be able to rely on the conditions to the Closing that it deemed
satisfied or waived in its certification, as applicable; provided, further,
that effective upon such extension the conditions to the Closing contained in
Sections 8.02(c) and 8.03(j) shall be replaced in their entirety by the
following:  “The Compliance Disposition
shall have occurred.”, and such conditions shall not be deemed to be satisfied
or waived by Purchaser or ABB as of the Longstop Date; and (B) if no later than
one Business Day prior to the Longstop Date, ABB has not stated in writing to
Purchaser that it believes that the occurrence of the Compliance Disposition
likely will not occur prior to the Final Longstop Date in a manner acceptable
to ABB (a “Stop Notification”); or

 

(ii)                                  if
by the Longstop Date, the Substantial Completion of the Compliance Review shall
not have occurred (“Event Two”) and Purchaser has provided evidence
reasonably satisfactory to ABB that the Purchaser Financing Documents will
remain in full force and effect until the Extended Longstop Date,

 

then, in each such case,
Purchaser may, in its sole discretion and upon three Business Days’ written
notice to ABB expiring on or before the Longstop Date, extend the Longstop Date
until June 7, 2004 (the “Extended Longstop Date”); provided  further,
that with respect to Event Two, if by the Extended Longstop Date, the
Substantial Completion of the Compliance Review shall have occurred but the
Compliance Disposition shall not 

 

106

 

have occurred, Purchaser
may, in its sole discretion and upon three Business Days’ written notice to ABB
expiring on or before the Extended Longstop Date, extend the Extended Longstop
Date until July 12, 2004 (the “Final Longstop Date”) if and only if
(A) Purchaser (1) has provided evidence reasonably satisfactory to ABB that the
Purchaser Financing Documents will remain in full force and effect until the
Final Longstop Date and (2) provides the Extension Notice to ABB that based on
the facts and circumstances and materiality of all matters, individually or
collectively, set forth in the notices provided to Purchaser by ABB pursuant to
Section 5.15, Purchaser either deems to be satisfied or waives the
conditions to the Closing contained in Sections 8.03(a) and (d) as of the
Extended Longstop Date; provided, however, that if, individually
or collectively, the facts or circumstances or materiality of any matter or the
consequences arising from any matter set forth in any such notice change from
those set forth in the latest notice received by Purchaser prior to its
delivery of the Extension Notice with respect to any matter, or any notice is
inaccurate with respect to any matter after the Extended Longstop Date or new
facts or circumstances with respect to any matter arise after the Extended
Longstop Date, Purchaser shall be able to rely on the conditions to the Closing
that it deemed satisfied or waived in its certification, as applicable; provided,
further, that effective upon such extension the conditions to the Closing
contained in Sections 8.02(c) and 8.03(j) shall be replaced in their entirety
by the following:  “The Compliance
Disposition shall have occurred.”, and such conditions shall not be deemed to
be satisfied or waived by Purchaser or ABB as of the Extended Longstop Date;
and (B) if no later than one Business Day prior to the Extended Longstop Date,
ABB has not delivered to Purchaser a Stop Notification;

 

provided 
always that the right to terminate this Agreement under this
Section 10.01(a) shall not be available to any Party whose failure to
fulfill any obligation under this Agreement shall have been the cause of, or
shall have resulted in, the failure of the Closing to occur prior to such date.

 

If applicable, the
Extended Longstop Date or the Final Longstop Date, as the case may be, shall be
deemed to be the Closing Date for purposes of this Agreement unless Purchaser
prior to such date shall provide to ABB written notice of its intention to
consummate the transactions contemplated by this Agreement and its proposed
date of such consummation, in which case after the expiry of ten Business Days
from receipt by Purchaser of the Pre-Closing Notice as contemplated by
Section 2.09(a), such date shall be deemed to be the Closing Date for
purposes of this Agreement;

 

(b)                                 at
any time prior to the close of business on the Longstop Date:

 

(i)                                     by
ABB or Purchaser in the event that (A) any Order restraining, enjoining or
otherwise prohibiting the transactions contemplated by the Transaction
Agreements shall have become final and nonappealable, any Governmental
Authority with respect to any merger filing listed in Section 8.01(a) or
any additional mandatory, suspensory filings identified pursuant to
Section 5.06(c) which relates to an entity the subject of a Primary Transaction,
as the case may be, has issued a decision withholding approval or attached any
conditions, undertaking or remedies of any of the transactions contemplated by
the 

 

107

 

Transaction Agreements; or (B) the conditions set forth in
Section 8.01(a) shall not be capable of being satisfied; provided, however,
that the right to terminate this Agreement under this Section 10.01(b)
shall not be available to any Party whose failure to fulfill any obligation under
this Agreement shall have been the cause of, or shall have resulted in, or
substantially contributed to, such Order, decision or failure to satisfy;

 

(ii)                                  by
Purchaser in the event that any of the conditions set forth in
Section 8.01 or 8.03 (other than 8.03(c)) is not capable of being
satisfied by the Longstop Date;
or

 

(iii)                               by
ABB in the event that any of the conditions set forth in Section 8.01 or
8.02 is not capable of being satisfied by the Longstop Date;

 

provided,
however, that the right to terminate this Agreement under this
Section 10.01(b) shall not be available to any Party whose failure to
fulfill any obligation under this Agreement shall have been the cause of, or
shall have resulted in, or contributed to, such Order, decision or failure to satisfy;
or

 

(c)                                  by
the mutual written consent of ABB and Purchaser.

 

SECTION 10.02.           Effect of Termination.  In the event of termination of this
Agreement pursuant to Section 10.01, this Agreement shall forthwith become
void and there shall be no liability on the part of either Party hereto except
(a) that the provisions of Section 5.05, this Section 10.02 and
Article XI shall survive termination of the Agreement and (b) that
nothing herein shall relieve either Party from liability for any willful breach
of this Agreement.

 

SECTION 10.03.           Waiver.  Either ABB or Purchaser may (a) extend the time for the
performance of any of the obligations or other acts of Purchaser or ABB,
respectively, (b) waive any inaccuracies in the representations and warranties
of Purchaser or ABB, respectively, contained herein or in any document
delivered by ABB or Purchaser, respectively, pursuant hereto or (c) waive
compliance with any of the agreements or conditions of Purchaser or ABB,
respectively, contained herein.  Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the Parties.  Any
waiver of any term or condition shall not be construed as a waiver of any
subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement.  The failure of any Party to assert any of
its rights hereunder shall not constitute a waiver of any of such rights, nor
in any way affect the validity of such agreements or any part thereof or the
right of a Party to enforce any such provision.

 

ARTICLE XI

 

GENERAL PROVISIONS

 

SECTION 11.01.           Expenses.  (a)  Except as otherwise
specified in this Agreement, all costs and expenses, including fees and
disbursements of counsel, financial advisors and accountants, incurred relating
to this Agreement and the transactions contemplated 

 

108

 

hereby shall be paid by
the Party incurring such costs and expenses, whether or not the Closing shall
have occurred.

 

(b)                                 ABB
shall, upon termination of this Agreement in accordance with and pursuant to
Section 10.01 of this Agreement, promptly pay to Purchaser an amount equal
to $9,000,000 as reimbursement for certain of the transaction costs and
expenses incurred by Purchaser; provided, however, that if the
cause for such termination of this Agreement is the material breach of the
terms and conditions of this Agreement by Purchaser, ABB shall not be required
to make any such payment to Purchaser.

 

(c)                                  On
the date that is two Business Days prior to the commencement of each calendar
month after the date of this Agreement until Substantial Completion of the
Compliance Review, Purchaser shall provide to ABB its best estimate of the
Purchaser Compliance Costs for the next calendar month and ABB shall provide to
Purchaser its best estimate of the ABB Compliance Costs for such month.  If the estimated Purchaser Compliance Costs
are ninety percent or less of the estimated ABB Compliance Costs then no
further discussions shall occur between the Parties and such estimated
Purchaser Compliance Costs shall be deemed to be the “Approved Purchaser
Compliance Costs”.  If such
estimated Purchaser Compliance Costs are in excess of ninety percent of the
estimated ABB Compliance Costs, the Parties shall discuss such estimates in
good faith with a view to arriving at agreed estimates of both the Purchaser
Compliance Costs and the ABB Compliance Costs. 
If after such discussions, the estimated Purchaser Compliance Costs
remain in excess of 90% of the ABB Compliance Costs, and ABB, in its sole
discretion, shall not have agreed such estimated Purchaser Compliance Costs for
such month, then Purchaser may modify its planned use of resources for the
forthcoming month in light of the provisions of this Section 11.01.  Purchaser may decide to modify its planned
use of resources for the forthcoming month in order it to enable an Excess
Amount to be paid under Section 11.01(d)(ii).  If ABB accepts such estimated Purchaser Compliance Costs, such
estimated Purchaser Compliance Costs shall be deemed to be the Approved
Purchaser Compliance Costs.

 

(d)                                 (i)  ABB shall reimburse on a monthly basis in
arrears the aggregate fees and expenses (including value added tax and other
similar taxes) of Deloitte Touche Tohmatsu, Cadwalader, Wickersham & Taft
LLP and Clifford Chance LLP (and such other professional advisors appointed by
Purchaser with the prior written consent of ABB (such consent not to be
unreasonably withheld or delayed)) actually incurred by or on behalf of Parties
from January 1, 2004 through the earlier of (x) termination of this
Agreement and (y) the completion of the Compliance Review, in relation to the
development and implementation of the Compliance Review (the “Purchaser
Compliance Costs”).  Subject to
Section 11.01(d)(ii), (A) no such monthly reimbursement for the months of
January, February and March 2004 shall exceed the greater of (x) 90%
of the aggregate fees and expenses (including value added tax and other similar
taxes) of PricewaterhouseCoopers LLP and Shearman & Sterling LLP (and such
other professional advisers appointed by ABB with the prior written consent of
Purchaser (such consent not to be unreasonably withheld or delayed)), actually
incurred by or on behalf of ABB during the same month in relation to the
development and implementation of the Compliance Review (the “ABB Compliance
Costs”), (y) $1,000,000, and (z) if applicable under Section 11.01(c),
the Approved Purchaser Compliance Costs; and (B) during the months commencing
with April 2004 through the Substantial Completion of the Compliance
Review, clause (A)

 

109

 

above shall apply mutatis
mutandis except that each reference to “90%” therein shall be replaced with
“60%” for purposes of this clause (B) (each month during which Purchaser
Compliance Costs are to be reimbursed is referred to in this
Section 11.01(d) as a “Review Period” and, for a particular Review
Period, the greater of the amounts referred to in clauses (x), (y) and (z)
above, is referred to in this Section 11.01(d) as the “Maximum Payment
Limit”).

 

(ii)                                  The
reimbursement obligation under this Section 11.01(d) shall be cumulative
such that if:

 

(A)                              the
Purchaser Compliance Costs in a given Review Period are less than the Maximum
Payment Limit in such Review Period (such difference being, a “Shortfall
Amount”), then:

 

(1)                                  to
the extent there are existing Excess Amounts, the Shortfall Amount shall be
used by ABB to reimburse Purchaser in respect of any such Excess Amounts but
only to the extent of such Shortfall Amount; and

 

(2)                                  any
remaining Shortfall Amounts shall be carried forward to subsequent Review
Periods until extinguished by the reimbursement of any Excess Amounts; and

 

(B)                                the
Purchaser Compliance Costs in a given Review Period are greater than the
Maximum Payment Limit in such Review Period (such difference being, an “Excess
Amount”), then:

 

(1)                                  to
the extent there are any Shortfall Amounts which have been carried forward
pursuant to Section 11.01(d)(ii)(A)(2), such Shortfall Amounts shall be
used by ABB to reimburse Purchaser in respect of such Excess Amount but only to
the extent of such Shortfall Amounts; and

 

(2)                                  any
remaining Excess Amount shall be carried forward to subsequent Review Periods.

 

(iii)                               Notwithstanding
anything to the contrary in this Section 11.01(d), ABB shall never be
obligated to reimburse Purchaser under this Section 11.01(d) for an amount
in excess of the aggregate of the Maximum Payment Limits for the Review Periods
during which the Compliance Review has been carried out.

 

(iv)                              ABB
shall, within 10 Business Days after the end of each calendar month, provide to
Purchaser (A) written confirmation of the total amount of the ABB Compliance
Costs for that Review Period together with a breakdown of such costs and
expenses by adviser, (B) a statement from each of its advisers referenced above
(showing the total amount of fees and expenses together with the number of
people carrying out the services to which the fees relate, with a split of such
fees between partners and non-partners) in respect of all of the ABB Compliance
Costs for such Review Period and (C) a letter from each such adviser to
Purchaser confirming that such statement reflects all of the fees and costs
incurred by that adviser comprising ABB Compliance Costs for that Review
Period.  ABB shall only be obligated
under this paragraph to reimburse Purchaser Compliance Costs which are
evidenced by an invoice 

 

110

 

addressed to Purchaser but
expressed to be payable by ABB. 
Invoices claiming reimbursement under this Section 11.01(d) must be
presented on a monthly basis within 10 Business Days after the end of each
calendar month.  ABB shall pay the
requisite amount within 30 days of presentation of the invoice, and if not paid
within such time amounts owed shall accrue interest on a daily basis commencing
on the due date and ending on the actual date of payment at a per annum rate
equal to 5%.  Purchaser shall deliver
(i) written confirmation of the total amount of the Purchaser Compliance Costs
for each Review Period together with a breakdown of such costs and expenses by
adviser; (ii) a statement from each adviser referenced above (showing the total
amount of fees and expenses together with the number of people carrying out the
services to which the fees relate, with a split of such fees between partners
and non-partners) in respect of all of the Purchaser Compliance Costs for such
Review Period and (iii) a letter from each adviser confirming that the
statement only contains fees and expenses which are Purchaser Compliance Costs.

 

(v)                                 The
Parties acknowledge and agree that the Shortfall Amount and the Excess Amount
as of December 31, 2003 equal $942,000 and $0, respectively.

 

SECTION 11.02.           Notices.  All notices, requests, claims, demands and other communications
hereunder shall be in writing in the English language and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person or
by registered or certified mail (postage prepaid, return receipt requested) or
by electronic mail (confirmed by certified mail, and such electronic mail shall
be deemed to have been duly given upon receipt of such certified mail) to the
respective parties at the following addresses (or at such other address for a
Party as shall be specified in a notice given in accordance with this
Section 11.02):

 

(a)                                  if
to ABB:

 

ABB Handels- und
Verwaltungs AG

Affolternstrasse 54

PO Box 8131

CH-8050 Zurich

Switzerland

E-mail: 
 john.scriven@ch.abb.com

hans.enhoerning@ch.abb.com

Attention: 
John Scriven

Hans Enhoerning

 

and with a copy
to:

 

Shearman &
Sterling LLP

599 Lexington
Avenue

New York, New
York  10022

E-mail:  jmarzulli@shearman.com

Attention:  John A. Marzulli Jr.,
Esq.

 

111

 

(b)                                 if
to Purchaser:

 

Laradew Limited

c/o Candover Partners Limited

20 Old Bailey

London, England
EC4M 7LN

E-mail:  m.gumienny@candover.com

john.arney@candover.com

Attention: 
Marek Gumienny

John Arney

 

with a copy to:

 

Clifford Chance
LLP

10 Upper Bank
Street

London,
England  E14 5JJ

E-mail:  adam.signy@cliffordchance.com

ian.bagshaw@cliffordchance.com

 

Attention: 
Adam Signy

Ian Bagshaw

 

SECTION 11.03.           Public Announcements.  No Party to this Agreement shall make, or
cause to be made, any press release or public statement with respect to this
Agreement or the transactions contemplated hereby or otherwise communicate with
any news media relating thereto without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed; provided,
however, that nothing shall restrict any Party (even in the absence of
agreement by the other parties) from making any statement which (i) may be
required by Law or the rules of any stock exchange or national trading system
on which such Party’s common stock is listed or Self-Regulatory Organization,
provided that such Party shall consult (as is reasonably practical prior to
complying with such obligation) with the other Party as to the timing content and
manner of such statement, (ii) is the agreed terms of any such statement or any
repetition thereof or (iii) is made or sent by Purchaser or an OGP Purchaser
after the Closing to the customers, clients or suppliers of the OGP Business
informing such party of the purchase of the OGP Business; provided, however
that such statement shall not contain any reference to the Purchase Price other
than as stated pursuant to a disclosure pursuant to subsection (i) or (ii)
of this Section 11.03.

 

SECTION 11.04.           Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party.  Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the Parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the Parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.

 

112

 

SECTION 11.05.           Entire Agreement.  The Transaction Agreements constitute the
entire agreement of the Parties hereto with respect to the subject matter
hereof and supersede any prior agreements and undertakings, both written and
oral, between the Parties hereto with respect to the subject matter hereof
including the Confidentiality Agreement. 
The Purchaser and the Sellers agree that neither Party shall bring any
action against the other or against any Affiliate or Purchaser Affiliate or
adviser of the other or provider of finance to Purchaser and/or the OGP
Purchasers relating to any previous agreement(s) between them relating to the
subject matter of this Agreement.

 

SECTION 11.06.           Assignment.  Neither this Agreement nor any of the rights hereunder may be
assigned by any Party by operation of Law or otherwise without the express
written consent of the other Party hereto; provided, however,
that any Party may assign all or any of its rights and obligations under this
Agreement to any Affiliate or Purchaser Affiliate, as the case may be; provided
that no such assignment shall relieve the assigning Party of its obligations
hereunder if such assignee does not perform such obligations; provided 
further that, notwithstanding the foregoing provisions of this
Section 11.06, Purchaser and any of the Purchaser Affiliates may assign
and/or charge, by way of security only, any or all of their rights, title or
interest under this Agreement (including all present and future claims, causes
of action, payments and proceeds in respect thereof) to any secured lender(s)
(or to any security agent acting on their behalf) lending money or making other
banking facilities available to Purchaser in connection with the acquisition of
the Shares or Purchased Assets and/or any banking guarantees or other working
capital facilities and/or any refinancing of the existing debt of the OGP
Subsidiaries or to any secured lender(s) (or to any security agent acting on their
behalf) who provide funds or make other banking facilities available in
connection with any subsequent refinancing of such funding; provided 
further that, without limitation to the foregoing, any secured lender(s)
(or any security agent acting on their behalf) may assign such rights on any
enforcement of the security under such finance arrangements.  ABB agrees that it will acknowledge any such
assignment of which it is notified.  The
Purchaser shall be entitled to charge and assign absolutely all or any part of
its right, title and interest, present and future in and under this Agreement,
including all present and future claims, causes of action, payments and
proceeds in respect thereof (the “Assigned Property”) to the Bank who
shall be entitled to take possession of the Assigned Property or otherwise
exercise in relation to it all of the rights of an absolute owner.  Notwithstanding any such assignment, the
Sellers may, unless they receive written notice from the Bank to the contrary,
deal with Purchaser in connection with all matters arising under this Agreement
including determination and control of (i) whether or not any claim shall be
brought against the Sellers and (ii) the conduct of any such claim, including
the settlement, compromise or withdrawal of any claim provided only that all
payments under this Agreement otherwise due to Purchaser or a Purchaser
Affiliate by the Sellers shall be made to the Bank.  The liability of any of the Sellers for breach of this obligation
under this Agreement shall not in any way be increased or adversely affected by
any assignment contemplated by this Section 11.06.  Any purported assignment in violation of
this Section 11.06 shall be null and void.  For the avoidance of doubt, an assignment for security pursuant
to this Section 11.06 shall not constitute an assumption of the
obligations hereunder.

 

SECTION 11.07.           No Third Party Beneficiaries.  Except for the provisions contained in
Section 5.11(a) and (d)(ii), the provisions of Article VII with
respect to Tax Indemnified Parties, the provisions of Article IX with
respect to Indemnified Parties, Section 

 

113

 

11.06 with respect to
assignment to the Bank, and for the purposes of Section 11.05, with
respect to an Affiliate or adviser to any of ABB, the Sellers, Purchaser or the
OGP Purchasers or a provider of finance to Purchaser or the OGP Purchasers,
this Agreement shall be binding upon and inure solely to the benefit of the
Parties hereto and their permitted assigns and nothing else herein, express or
implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

SECTION 11.08.           Amendment.  This Agreement may not be amended or modified except (a) by an
instrument in writing signed by, or on behalf of, each of ABB and Purchaser or
(b) by a waiver in accordance with Section 10.03.

 

SECTION 11.09.           Specific Performance.  The Parties hereto agree that if any of the
provisions of any of the Transaction Agreements are not performed in accordance
with their specific terms or are otherwise breached, irreparable damage would
occur, no adequate remedy at law would exist and damages would be difficult to
determine, and that the Parties shall be entitled to specific performance of
the terms thereof, in addition to any other remedy at Law or equity.

 

SECTION 11.10.           Currency.  (a)  To the fullest extent
permitted by Law, the obligation of any Party in respect of any amount due
under this Agreement will, notwithstanding any payment in any other currency
(whether pursuant to a judgment or otherwise), be discharged only to the extent
of the amount in United States dollars that the Party entitled to receive such
payment may, in accordance with its normal procedures, purchase with the sum
paid in such other currency (after any premium and costs of exchange) on the
Business Day immediately following the day on which such Party receives such
payment.  If the amount in United States
dollars that may be so purchased for any reason falls short of the amount
originally due, the applicable Party will pay such additional amounts, in
United States dollars, as may be necessary to compensate for the
shortfall.  Any obligation of a Party
not discharged by such payment will, to the fullest extent permitted by
applicable Law, be due as a separate and independent obligation and, until
discharged as provided herein, will continue in full force and effect.

 

(b)                                 When,
pursuant to the terms of any Transaction Agreement, any conversion of
currencies is required, the applicable exchange rate to be used shall be the
free market exchange rate or cross rate as determined by Citibank N.A. in New
York, New York, in force as of the Business Day immediately preceding
(i) in the case of a Loss under Article IX, the day on which the Loss
was actually incurred; and (ii) in all other situations, the date that the
relevant determination is to be made; provided, however, that for
all financial accounting purposes, including the preparation of the Effective
Date Balance Sheet, such conversion shall be made in accordance with the
Closing Accounting Principles.

 

SECTION 11.11.           Governing Law.  This Agreement, and any arbitration
conducted in accordance with Section 11.12 of this Agreement, shall be
governed by, and construed in accordance with, the substantive laws of the
State of New York, without reference to its conflict of law rules; provided,
however, that the conflict of law rules of the State of New York shall
be applicable with respect to any conflict that may arise between the laws of
the State 

 

114

 

of New York and the laws
of the relevant jurisdiction applicable for the transfer of a Purchased Asset.

 

SECTION 11.12.           Arbitration.  (a) 
Except as otherwise provided in Sections 2.10, 6.10, 7.08, 9.06 and
11.09 and 11.13, any dispute, controversy or claim arising out of, relating to
or in connection with any Transaction Agreement (other than the Surety)
including any dispute regarding its existence, validity, breach, termination or
enforceability (a “Dispute”) shall be addressed by the Parties or their
respective Affiliates or Purchaser Affiliates, as appropriate, and resolved
pursuant to this Section 11.12.

 

(b)                                 Any
Party or its Affiliate or Purchaser Affiliate, as the case may be, may give
written notice of a Dispute to all other Parties and their respective
Affiliates or Purchaser Affiliate, as the case may be.  The Parties or their respective Affiliates
or Purchaser Affiliate, as the case may be, will then make good faith efforts
to amicably resolve the Dispute.  Such
efforts to reach an amicable resolution of the Dispute shall continue for a
period of 30 days from the notice unless the Parties agree in writing to
discontinue such efforts, or to continue them for a stated period.

 

(c)                                  Following
completion of the efforts set forth in subparagraph (b), any Party or its
Affiliate or Purchaser Affiliate, as the case may be, may submit such a Dispute
for final and binding resolution pursuant to the Rules of Arbitration of the
International Chamber of Commerce in effect as of the date of the filing of the
initial request for arbitration, as supplemented by the provisions set forth in
this Agreement (the “Rules”).

 

(d)                                 The
seat, or legal place, of arbitration shall be London, England.  All proceedings in the arbitration shall be
conducted in English.

 

(e)                                  The
arbitral tribunal shall consist of three persons, each of whom shall be fluent
in English.  One arbitrator shall be
nominated by the Party requesting arbitration at the time of the filing of its
request for arbitration, the second arbitrator shall be nominated by the
opposing Party not later than fifteen (15) days after receiving the claimant’s
request, and the third arbitrator shall be jointly nominated by the first two
nominated arbitrators, and shall act as Chair. 
If the first two appointed arbitrators are unable to agree upon a third
within fifteen (15) days of the nomination of the second, or if any Party fails
to appoint an arbitrator as set forth herein, an arbitrator shall be appointed
by the International Court of Arbitration of the International Chamber of
Commerce (the “Appointing Authority”) pursuant to the Rules.

 

(f)                                    The
Parties intend that any arbitral proceedings instituted pursuant to this
Agreement shall be conducted as expeditiously as possible.  Accordingly, the Parties agree that the
arbitral tribunal and the Appointing Authority shall be guided by this
intention in deciding upon any procedural time limit or any request by either
Party affecting the progress of the proceedings, including any request for the
expedited formation of the arbitral tribunal.

 

(g)                                 Nothing
contained herein shall limit the right of a Party hereto to seek from any court
of competent jurisdiction, pending appointment of an arbitral tribunal, interim
relief in aid of arbitration or to protect or enforce its rights hereunder.

 

115

 

(h)                                 The
award of the arbitrators shall be final and binding upon the parties, and shall
not be subject to any appeal or review. 
Judgment upon the award rendered by the arbitral tribunal may be
enforced in any court of competent jurisdiction.

 

SECTION 11.13.           Default Judgment Claim.  All Default Judgment Claims shall be subject
to the exclusive jurisdiction of the courts of England and that ABB and its
Affiliates agree notwithstanding any other provisions of the Transaction
Agreements that they will not argue to the contrary.  This Section 11.13 is for the benefit of Purchaser only and
does not prevent Purchaser from initiating Actions in respect of a Default
Judgment Claim in any other competent court with jurisdiction.

 

SECTION 11.14.           Waivers.  (a)  Waiver of Jury
Trial.  ABB AND PURCHASER HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR THE ACTIONS OF
ABB OR PURCHASER OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS OR SHAREHOLDERS
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

 

(b)         Waiver
of Right to Defend Judgment Claim. 
ABB HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO DEFEND ANY DEFAULT JUDGMENT
CLAIM, EXCEPT IN SO FAR AS ABB’S DEFENSE OF ANY SUCH CLAIM CONTENDS THAT EITHER
(I) PURCHASER HAS FAILED TO SERVE THE NOTICE WHICH FORMS THE BASIS OF THE
DEFAULT JUDGMENT CLAIM IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE
TRANSACTION AGREEMENTS, (II) ABB HAS NOT DEFAULTED IN RESPONDING TO A NOTICE OF
CLAIM SERVED UPON IT BY PURCHASER IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF
THE TRANSACTION AGREEMENTS OR (III) THE AMOUNTS CLAIMED BY PURCHASER IN SUCH
NOTICE HAVE BEEN PAID BY ABB TO PURCHASER OR A PURCHASER AFFILIATE.

 

SECTION 11.15.           Counterparts.  This Agreement may be executed in one or
more counterparts, and by the different Parties in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

 

116

 

IN WITNESS
WHEREOF, each of the Parties hereto has caused this Agreement to be executed as
of the date first written above by its respective officers thereunto duly
authorized.

 

	
   

  	
  ABB
  HANDELS- UND VERWALTUNGS AG

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  ERIC ELZVIK

  
	
   

  	
   

  	
  Name:

  	
  Eric Elzvik

  
	
   

  	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  HANS ENHOERNING

  
	
   

  	
   

  	
  Name:

  	
  Hans Enhoerning

  
	
   

  	
   

  	
  Title:

  	
  VP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LARADEW
  LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  JOHN KENNEDY

  
	
   

  	
   

  	
  Name:

  	
  John Kennedy

  
	
   

  	
   

  	
  Title:

  	
  Director

  

 

 

EXHIBIT A

DEFINED
TERMS

 

“338 Auditors”
shall have the meaning set forth in Section 7.08(c).

 

“338(h)(10) Election”
shall have the meaning set forth in Section 3.12(o).

 

“338(h)(10)
Subsidiaries” shall have the meaning set forth in Section 7.08(a).

 

“ABACUS Data Shell”
shall have the meaning set forth in Section 5.25(a)(i).

 

“ABB” shall have
the meaning set forth in the Preamble.

 

“ABB Compliance Costs”
shall have the meaning set forth in Section 11.01(d)(i).

 

“ABB Indemnified Party”
shall have the meaning set forth in Section 9.02.

 

“ABB Occurrence
Policies” shall have the meaning set forth in Section 5.12(b).

 

“ABB Representatives”
shall have the meaning set forth in Section 2.10(a).

 

“ABB Retiree Medical
Plan” shall have the meaning set forth in Section 6.07.

 

“ABB Stage Payment”
shall have the meaning set forth in Section 9.06(d)(iii).

 

“ABB Statutory
Occurrence Policy” means any ABB Occurrence Policy which is required to be
held pursuant to compulsory insurance requirements imposed by Law in any territory.

 

“ABB’s Accountants”
means Ernst & Young AG, which is a member of Ernst & Young
International, independent accountants of ABB, or such other internationally
recognized independent accounting firm as ABB may nominate with written notice
to Purchaser.

 

“ABB’s Actuary”
means an actuary nominated by ABB and as notified to Purchaser in accordance
with the terms of this Agreement.

 

“ABB’s Bank Account”
means a bank account to be designated by ABB in a written notice to Purchaser
at least five Business Days before the Closing or such other bank account as
ABB may thereafter notify Purchaser pursuant to Section 11.02.

 

“Aberdeen Lease”
means the Sale and Leaseback Agreement between ABB Vetco Gray, Inc. and
Citibank International plc dated as of November 6, 2000 with respect to
the property at Broadfold Road, Bridge of Don Industrial Estate, Aberdeen,
Scotland as amended from time to time.

 

“Acquired Plans”
means the 1987 Vetco Gray Hughes Pension Plan, the Norwegian former UMOE
insured plan 11443, ABB Gas Technology AS (former UMOE Process technology)
insured plan 11448, other former UMOE insured plans 11438, 11439, 11441, 11442,
Nordea 

 

A-1

 

insurance contract 11449,
former UMOE insured plans 11437, Avtalefestet Pension liabilities in Norway,
Unfunded pension promises in Norway, ABB Vetco Gray Canada Inc. Group
Registered Pension Plan for Alberta Employees hired on or after July 10,
1996, ABB Vetco Gray Canada Inc. Group Registered Pension Plan for Alberta
Employees hired prior to July 10, 1996 and ABB Vetco Gray Denmark defined
contribution pension plan.

 

“Acquisition Newcos”
means Newco1, Newco2, Purchaser and any OGP Purchaser (to the extent different)
(and accordingly “Acquisition Newco” shall mean any one of them).

 

“Action” means any
claim, action, suit, arbitration or other proceeding by or before any
Governmental Authority.

 

“Additional Approvals”
means the approvals set forth on Exhibit M.

 

“Adjustment and
Indemnity Bank Guarantee” shall have the meaning set forth in
Section 5.02(a)(vii).

 

“Adjustment
Obligations” shall have the meaning set forth in Section 9.08(a).

 

“Advance Payment Bonds”
shall have the meaning set forth in Section 5.08(a).

 

“Affiliate” means,
with respect to any specified Person (other than Purchaser or any OGP
Purchaser) at the time of determination, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person.  For purposes of this Agreement, “control” (including the
terms “controlled by” and “under common control with”), with
respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, as trustee or executor, by contract
or otherwise, including the ownership, directly or indirectly, of securities
having the power to elect a majority of the board of directors or similar body
governing the affairs of such Person.

 

“Affiliated Group”
means any affiliated group within the meaning of Section 1504 of the Code
(or any similar group defined under a similar provision of state, local or
foreign law).

 

“Aggregate
Deficit” means the Assumed Plans Deficit plus the Non-Assumed Plans
Deficit.

 

“Agreement” or “this
Agreement” means this Stock and Asset Purchase Agreement, dated as of
January 16, 2004, between ABB and Purchaser (including the Exhibits hereto
and the Disclosure Schedule) and all amendments hereto made in accordance with
the provisions of Section 11.08.

 

“Allocation Agreement”
shall have the meaning set forth in Section 7.08(c).

 

“Allocation Amount”
shall have the meaning set forth in Section 2.06.

 

A-2

 

“Alternative
Designated Tax Amount” shall have the meaning set forth in
Section 7.08(f).

 

“Amount” shall
have the meaning set forth in Section 5.08(a).

 

“Applicable Taxing
Jurisdiction” shall have the meaning set forth in Section 9.08(b).

 

“Appointing Authority”
shall have the meaning set forth in Section 11.12(e).

 

“Appropriate Bank”
means Credit Suisse First Boston or such other bank or financial institution
which has a rating for its long-term unsecured and non credit-enhanced debt
obligations of A+ or higher by Standard & Poor’s Rating Services or an
equivalent or higher rating by Moody’s Investor Services Limited or such other
comparable rating from another internationally recognized credit rating agency,
which bank shall underwrite the Adjustment and Indemnity Bank Guarantee, the
Tax Election Bank Guarantee or the Repayment Bank Guarantee.

 

“Approved Purchaser
Compliance Costs” shall have the meaning set forth in Section 11.01(c).

 

“Argentinean Debt”
shall have the meaning set forth in Section 2.09(e).

 

“Asbestos Claims”
means any claim, demand,
debt, liability, or obligation (including any cross-claim, contribution claim,
subrogation claim, indemnity claim, successor liability claim or any other
similar derivative claim or demand), whether now existing or hereafter arising,
asserted against Purchaser, any OGP Purchaser, any of the OGP Subsidiaries or
any of their subsidiaries or Affiliates, or any Purchased Assets, whether in
the nature of or sounding in tort, or under contract, warranty, or any other
theory of law, equity, or admiralty for, arising out of, resulting from, or
relating to directly or indirectly, death, bodily injury, sickness, disease, or
other personal injuries, physical, emotional or otherwise, to persons, caused,
or allegedly caused, directly or indirectly, by the presence of, or exposure
to, asbestos, including any asbestos-containing products, boiler systems,
equipment, components, parts, improvements to real property, or materials
engineered, designed, marketed, manufactured, fabricated, constructed, sold,
supplied, produced, installed, maintained, serviced, specified, selected,
repaired, removed, replaced, released, distributed or any way used prior to the
Closing Date by ABB or any of its Subsidiaries or any other entity for whose
products or operations ABB or its Subsidiaries has liability or is alleged to
have liability (including any acts or omissions that constituted or may have
constituted ordinary or gross negligence or reckless, willful, intentional, or
wanton misconduct of ABB or any of its Subsidiaries or any other entity for
whose products or operations ABB or any of its Subsidiaries has liability or is
alleged to have liability or any conduct for which ABB or any of its
Subsidiaries has strict liability or is alleged to have strict liability under
any applicable law) including all claims, debts, obligations, or liabilities
for compensatory damages (such as loss of consortium, medical monitoring,
personal or bodily injury, wrongful death, survivorship, proximate,
consequential, general and special damages) and punitive or exemplary damages
and any fines, penalties, assessments and any other liability whatsoever which
is in any way related to or based upon asbestos or asbestos-containing
products, or the presence of, or exposure to asbestos in any form.

 

A-3

 

“Asset Seller
Contracts” means all the licenses, sub-licenses, contracts of insurance and
other contracts and agreements entered into by an Asset Seller that in each
case is primarily related to the OGP Business and comprises a part of the
Purchased Assets.

 

“Asset Sellers”
shall have the meaning set forth in the Preliminary Statements.

 

“Assigned Property”
shall have the meaning set forth in Section 11.06.

 

“Assumed Liabilities”
means all Liabilities (except Excluded Liabilities) of each Asset Seller to the
extent relating to the OGP Business or the Purchased Assets, whether arising
prior to, on or after the Closing.

 

“Assumed Plans”
means the Vetco Gray Hughes Inc. Post-Retirement Medical Plan, the 1987 Vetco
Gray Hughes Pension Plan, the Norwegian former UMOE insured plan 11443, ABB Gas
Technology AS (former UMOE Process technology) insured plan 11448, other former
UMOE insured plans 11438, 11439, 11441, 11442, 11444, Nordea insurance contract
11449, former UMOE insured plans 11437, Avtalefestet Pension liabilities in
Norway, Unfunded pension promises in Norway.

 

“Assumed Plans
Deficit” means the value as of the Closing of the liabilities of each
Assumed Plan calculated in accordance with the assumptions set out in Exhibit Q
less the fair market value as of the Closing of the Assumed Plans assets.

 

“Available
Balance” shall have the meaning set forth in Section 5.08(a).

 

“BaaN
Customizations” shall have the meaning set forth in
Section 5.25(a)(iii).

 

“Bank” means the
party or parties providing the Senior Credit Agreement and the Mezzanine Loan
Agreement to Purchaser.

 

“Bank CP Letter”
means the letter dated on or about the date hereof provided by the Facility
Agent (as defined in the Senior Credit Agreement) and the Mezzanine Facility
Agreement (as defined in the Mezzanine Loan Agreement) confirming which, if any
of the documents and other evidence listed in part 1 of Schedule 3 to the
Senior Credit Agreement and in part 1 of Schedule 3 to the Mezzanine Loan
Agreement have been unconditionally and irrevocably delivered in a form and
substance satisfactory to it and which conditions to Funding remain to be
satisfied.

 

“Borrowings” shall
have the meaning set forth in Section 2.20 of Exhibit E.

 

“Brazilian ERP System”
shall have the meaning set forth in Section 5.25(e).

 

“Business” means
the business of supplying products, systems and services for O&G Installations,
including (i) engineering, procurement, construction and servicing,
(ii) design, manufacture, sale and servicing of products and systems and
(iii) operations services, engineering, procurement and construction project
management services for modification and maintenance of existing O&G
Installations.  For purposes of this
Agreement, “O&G

 

A-4

 

Installations”
shall mean any facility or installation designed to explore, extract, produce,
transport or process oil and/or gas.

 

“Business Day”
means any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by Law to be closed in The City of New York, Zurich,
Switzerland, London, England or Frankfurt am Main, Germany.

 

“Business Intellectual
Property” means, collectively, (i) the OGP Intellectual Property and (ii)
the Transferred Intellectual Property.

 

“Business IP Licenses”
means, collectively, the OGP IP Licenses and the Transferred IP Licenses.

 

“Cap” shall have
the meaning set forth in Section 9.03(b).

 

“Capital Modernization
Program” or “CMP” means the (a) Master Hire Agreement between Royal
Scot Leasing Limited and ABB Vetco Gray UK Limited dated May 29, 2001, (b)
Master Hire Agreement between Royal Scot Leasing Limited and ABB Vetco Gray UK
Limited dated October 30, 2000 and (c) Master Lease Agreement between JP
Morgan Leasing, Inc. and ABB Vetco Gray Inc. dated May 21, 2001 pursuant to
which the functionality of existing machinery of ABB Vetco Gray UK Ltd. and ABB
Vetco Gray Inc. is replaced.

 

“Change of Law”
shall have the meaning set forth in Section 7.01(a).

 

“Chase” shall have
the meaning set forth in Section 5.21(a).

 

“Chase Sale Agreement”
shall have the meaning set forth in Section 5.21(a).

 

“Closing” shall
have the meaning set forth in Section 2.05(a).

 

“Closing Accounting
Principles” means the accounting principles described in Exhibit E.

 

“Closing Date”
shall have the meaning set forth in Section 2.05(a).

 

“Closing Date
Acknowledgement” shall have the meaning set forth in Section 2.07(x).

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Compliance
Disposition” means
(i) the completion of any proceeding by the U.S. Department of Justice,
Criminal Division arising from disclosures made by ABB Ltd. to such agency
concerning the OGP Business and (ii) the issuance by the U.S. Department of
Justice, Criminal Division of the Opinion Review Release.

 

“Compliance Review”
means the review conducted by the Parties of issues related to any violations by
or on behalf of the OGP Business of the U.S. Foreign Corrupt Practices Act as
contemplated by the terms set forth in Exhibit T.

 

A-5

 

“Computation”
shall have the meaning set forth in Section 7.08(c).

 

“Confidential Information” means,
(a) with respect to Purchaser, all information used in or otherwise relating to
(i) the Business furnished by ABB or any of its Affiliates or Representatives,
whether furnished before or after the date hereof, whether oral or written, and
regardless of the manner or form in which it is furnished, including all
analyses, reports or other information with respect to the customers or
financial or other affairs of the Business including information relating to
(A) the marketing of goods or services including customer names and lists and
other details of customers, sales targets, sales statistics, market share
statistics, prices, market research reports and surveys, and advertising or
other promotional materials; or (B) future projects, business development
or planning, commercial relationships and negotiations and (ii) the
transactions contemplated in the Transaction Agreements, or the terms or
conditions or any other facts relating thereto, including the negotiations
relating to the Transaction Agreements and the fact that Confidential
Information has been made available to such Party or its Representatives, and,
(b) with respect to ABB, (i) the Purchaser’s business, financial or other
affairs (including future plans or other potential investments) and (ii) the
transactions contemplated in the Transaction Agreements, or the terms or
conditions or any other facts relating thereto, including the negotiations
relating to the Transaction Agreements and the fact that Confidential Information
has been made available to such Party or its Representatives; provided, however,
that the following shall be not be deemed to be Confidential Information:  (A) information which is or becomes
generally available to the public other than as a result of a disclosure by
such Party or any of their respective Affiliates or Purchaser Affiliates, as
the case may be, in violation of this Agreement or other obligation of
confidentiality, (B) information which was available to such Party or any of
its Affiliates or Purchaser Affiliates, as the case may be, on a
nonconfidential basis prior to its disclosure by the other Party or its
Affiliates, or (C) information which becomes available to a Party on a
nonconfidential basis from a person (other than the other Party or its
Affiliates or Purchaser Affiliates, as the case may be) who is not prohibited
from disclosing such information by a legal, contractual or fiduciary
obligation to the owner of such otherwise Confidential Information.

 

“Confidentiality
Agreement” means the confidentiality agreement dated as of
November 20, 2002 between ABB and Purchaser.

 

“Contest” shall
have the meaning set forth in Section 7.04(b).

 

“Continued
Plans” means the ABB Australia Superannuation Plan, the ABB Canada Money
Purchase Plan and ABB India Employees Gratuity Fund.

 

“Current
Sublease” shall have the meaning set forth in Section 5.31(b).

 

“Customized
CAWP Platform” shall have the meaning set forth in
Section 5.25(a)(ii).

 

“Default
Judgment Claim” means any Action commenced by Purchaser in a competent
court strictly and solely in pursuance of a judgment that ABB is liable
pursuant to the terms of the relevant Transaction Agreements to pay an amount
to Purchaser by virtue of the 

 

A-6

 

default by ABB in
responding to the notice of claim served upon it in accordance with the terms
of such Transaction Agreements.

 

“Deferred
Consideration” shall be an amount up to $50,000,000 payable by Purchaser to
ABB pursuant to Section 2.04(a) and determined in accordance with the
provisions set forth in Exhibit S-1.

 

“Deferred Transfer
Agreement” shall have the meaning set forth in Section 2.06.

 

“Delayed Amount”
shall have the meaning set forth in Section 2.09(e).

 

“Derivative Contracts”
shall have the meaning set forth in Section 5.23(a).

 

“Derivative Valuation
Bank” shall have the meaning set forth in Section 5.23(a).

 

“Designated Returns”
shall have the meaning set forth in Section 7.08(f).

 

“Designated Tax Amount”
shall have the meaning set forth in Section 7.08(f).

 

“Disclosure Schedule”
means the set of Disclosure Schedules including all documents attached thereto
and delivered therewith, dated as of the date hereof, and forming a part of
this Agreement pertaining to the Scope 1 Operations and the Scope 2
Operations.

 

“Dispute” shall
have the meaning set forth in Section 11.12.

 

“Dispute Notice”
shall have the meaning set forth in Section 2.10(b)(ii).

 

“DOJ” means the
United States Department of Justice.

 

“Early Termination
Date” shall have the meaning set forth in Section 5.23(c).

 

“Effective Date”
shall have the meaning set forth in Section 2.10(a).

 

“Effective Date
Balance Sheet” shall have the meaning set forth in Section 2.10(a).

 

“Eligible TPG”
shall have the meaning set forth in Section 5.08(a).

 

“Employment Costs and
Liabilities” means, relating to any OGP Employee and Transferred Employee,
any Losses arising out of or in connection with (i) amounts payable or paid in
respect of the employment of him or her, including salary, wages, tax and social
security contributions, bonus, insurance premium, payments or allowances or any
other consideration for employment, (ii) costs of providing any non-cash
benefits, which the employer is required to provide, by law or contract in
connection with such employment, and (iii) his or her employment or the
employment relationship, or termination of his or her employment, or of the
employment relationship, including all Losses arising out of or in connection
with any claim for redundancy pay, or damages or compensation for unfair or
wrongful dismissal or breach of contract and payment in lieu of any notice
period, but excluding, solely in respect of clauses (i), (ii) and (iii) above
and not for any other purpose under this Agreement, any Losses arising out of or
in 

 

A-7

 

connection with the
Retained Plans, Title IV Plans, Continued Plans, Split Plans, the ABB Vetco
Gray Inc. Management Deferred Incentive Plan, the ABB Post-Retirement Medical
Plan, the ABB Brazil Pension Plan and any severance benefits payable to Erik
Fougner pursuant to Section 6.04(b).

 

“Encumbrance”
means any security interest, pledge, mortgage, lien (including environmental
and tax liens), charge, encumbrance, adverse claim, preferential arrangement or
restriction of any kind, including any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.

 

“Environment”
means surface water, groundwater, sediment, soil, subsurface strata, ambient
air and any other environmental medium and living organisms or ecosystems
supported by those media, including humans.

 

“Environmental
Agreement” means (i) any agreement, covenant, warranty, representation,
guarantee or indemnity, to which an OGP Subsidiary is a party as of the date
hereof, that allocates, assigns or imposes responsibility or liability on an
OGP Subsidiary for a Release of Hazardous Materials into the Environment, and
(ii) any agreement, covenant, warranty, representation, guarantee or indemnity,
which relates to an OGP Asset and to which an Asset Seller is a party as of the
date hereof, and which is to be transferred by an Asset Seller to Purchaser
pursuant to this Agreement or the transactions contemplated herein, that
allocates, assigns or imposes responsibility or liability on an Asset Seller
for a Release of Hazardous Materials into the Environment.

 

“Environmental Claims”
means any and all Actions, demands, demand letters, liens, notices of
noncompliance or violation, notices of liability, investigations, Orders,
consent orders or consent agreements relating in any way to any Environmental
Law or any Environmental Permit or any Environmental Agreement.

 

“Environmental Law”
means any federal, state, local or foreign statute, Law, ordinance, regulation,
rule, code, order or common law, and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, in each case as in effect on the date hereof, relating to
pollution or protection of the Environment or natural resources, including
those relating to the use, handling, transportation, treatment, storage or
Release of Hazardous Materials, the exposure of humans to any Hazardous
Materials and/or the creation of any noise, vibration, radiation, common law or
statutory nuisance.

 

“Environmental
Liabilities” means any and all Losses, to the extent such Losses exceed the
provisions included in the Final Effective Date Balance Sheet, suffered or
incurred by Purchaser and or any OGP Subsidiary in relation to Items 1
through 7 of Section 3.15(a) of the Scope 1 Operations Disclosure
Schedule.

 

“Environmental Permit”
means any permit, approval, identification number, license or other
authorization required under or issued pursuant to any Environmental Law.

 

“Equity CP Letter”
means the letter dated as of the date of this Agreement issued by the
institutional investors to Newco1, and Newco2 and for the reliance of ABB
confirming 

 

A-8

 

which, if any, of the
conditions to the Shareholders Agreement have been unconditionally and
irrevocably completed by all the parties thereto.

 

“ERISA” shall have
the meaning set forth in Section 3.13(a).

 

“Estimated Effective
Date Net Assets” shall have the meaning set forth in Section 2.09(a).

 

“Estimated Indemnified
Project Loss Provisions” shall have the meaning set forth in
Section 9.06(c).

 

“ETPG Facility”
shall have the meaning set forth in Section 5.08(a).

 

“ETPG Facility Amount”
shall have the meaning set forth in Section 5.08(a).

 

“ETPG Facility
Guarantee” shall have the meaning set forth in Section 5.08(a).

 

“Eureka Program”
shall have the meaning set forth in 8.03(f).

 

“Event Two” shall
have the meaning set forth in Section 10.01(a)(ii).

 

“Excess Amount”
shall have the meaning set forth in Section 11.01(d)(ii)(B).

 

“Excess Finder’s Fee”
means an amount equal to the aggregate of all payments associated with the
Kizomba B Matter which ABB Vetco Gray Inc. has been required to pay to ABB
Lummus Global Inc. in excess of $2,000,000 in respect of any number of systems
delivered by ABB Vetco Gray Inc. under the relevant contract.

 

“Excess Transocean
Payment” means an amount derived in accordance with the following formula:

 

$5,000,000 + (0.8 times [B]);

 

provided,
however, that (i) the Excess Transocean Payment shall under no
circumstances exceed [A] and (ii) if [A] is $5,000,000 or less, then the Excess
Transocean Payment shall equal [A].

 

For the purpose of
this definition:

 

“[A]” means the
claim (if any) expressed in U.S. dollars which ABB Vetco Gray Inc. or any other
part of the OGP Business becomes liable to pay pursuant to the circumstances
described in item 4 of Section 3.08(a) of the Scope I Operations
Disclosure Schedule; and

 

“[B]” means the
greater of 0 and ([A] - $10,000,000).

 

“Excluded Assets”
means the right, title and interest of any Asset Seller in any of the following
assets, as the same shall exist on the Closing Date (except as otherwise
provided below):

 

A-9

 

(i)                                     all
cash and cash equivalents as they existed on the Effective Date;

 

(ii)                                  all
bank accounts;

 

(iii)                               any
rights to Tax refunds, deductions, credits or similar benefits relating to the
OGP Business or the Purchased Assets attributable to taxable periods ending, or
an event occurring, on or prior to the Closing Date;

 

(iv)                              the
organization documents, company seal, minute books, tax records (other than tax
records required by applicable Law to be transferred), charter documents, stock
or equity record books and such other books and records as pertain to the
organization, existence or capitalization of the Asset Sellers, as well as any
other records or materials relating to the Asset Sellers generally and not
related to the Purchased Assets or the operation of the OGP Business;

 

(v)                                 the
Retained Names and Marks and all Intellectual Property rights other than the
Transferred Intellectual Property;

 

(vi)                              the
Transferred Software Licenses to the extent any right, title or interest is not
transferred to Purchaser hereunder;

 

(vii)                           any
right, property or asset that is listed or described in Section 2.02(b) of
the Disclosure Schedule;

 

(viii)                        all
records prepared in connection with the transactions contemplated by the
Transaction Agreements, except to the extent they are required for the
operation of the OGP Business; and

 

(ix)                                all
rights of the Asset Sellers under any Related Agreements to which any Asset
Seller is a party.

 

“Excluded Derivative
Contracts” shall have the meaning set forth in Section 5.23(a).

 

“Excluded Liabilities”
means any of the following Liabilities of any of the Asset Sellers as the same
shall exist on the Closing Date (except as otherwise provided below):

 

(i)                                     all obligations
relating to Indebtedness (including all non-trade accounts receivable by ABB or
its Affiliates (other than the OGP Subsidiaries)) for borrowed money as they
existed on the Effective Date;

 

(ii)                                  all Taxes relating to
any taxable period, or any portion thereof, ending on or prior to the Closing
Date;

 

(iii)                               all Liabilities relating
to or arising out of the Excluded Assets (which includes, for the avoidance of
doubt, derivative contracts); and

 

A-10

 

(iv)                              all other Liabilities
incurred by such Asset Seller other than from conduct of the OGP Business.

 

“Existing Stock”
shall have the meaning set forth in Section 5.07(c).

 

“Extended Longstop
Date” shall have the meaning set forth in Section 10.01(a)(ii).

 

“Extension Notice”
shall have the meaning set forth in Section 10.01(a)(i).

 

“External Debt
Contract” means, for any OGP Subsidiary, each contract with a third party
(other than an Affiliate of ABB) with respect to Indebtedness for borrowed
money.

 

“Filing Date”
shall have the meaning set forth in Section 7.08(f).

 

“Final Effective Date
Balance Sheet” shall have the meaning set forth in Section 2.10(c).

 

“Final Intercompany
Settlement Payment” shall have the meaning set forth in
Section 2.10(c).

 

“Final Longstop Date”
shall have the meaning set forth in Section 10.01(a)(ii).

 

“Final Net
Intercompany Balance” shall have the meaning set forth in
Section 2.10(c).

 

“Final Stub Payment”
shall have the meaning set forth in Section 2.10(c).

 

“Final Indemnified
Project Statement” shall have the meaning set forth in Section 9.06(d)(i).

 

“Final Tax Amount”
shall have the meaning set forth in Section 7.02(d).

 

“Financial Statements”
shall have the meaning set forth in Section 3.05(a).

 

“Former Properties”
means any real property formerly owned or leased or occupied by an OGP Subsidiary.

 

“GAAP” means
generally accepted accounting principles in the United States including, to the
extent that such principles permit the application of alternative accounting
principles, the accounting principles elected by ABB or its Affiliates consistent
with one of such alternatives.

 

“Governmental
Authority” means any United States federal, state or local or any
supra-national or non-United States government, governmental, regulatory or
administrative authority, agency or commission (including any patent or
trademark registry) or any court, tribunal, or judicial or arbitral body or
expert determination.

 

A-11

 

“Grayloc Note”
means the Promissory Note issued by Grayloc Products LLP to ABB Vetco Gray, Inc.
dated November 20, 2000 in connection with the disposal by ABB Vetco Gray,
Inc. of Grayloc Products LLP, and which was subsequently sold to Chase
Manhattan Bank plc.

 

“Hazardous Material”
means (a) any petroleum, petroleum products, petroleum by-products or breakdown
products, radioactive materials, asbestos-containing materials or
polychlorinated biphenyls or (b) any chemical, material, waste or substance
defined or regulated under any Environmental Law or Environmental Permit or by
any Governmental Authority pursuant to any Environmental Law or Environmental
Permit as being capable (alone or in combination with other substances) of
causing the pollution or contamination of, or harm or damage to, the
Environment.

 

“Houston Lease”
means the Sale and Leaseback Agreement between ABB Vetco Gray, Inc. and
Citicorp Del-Lease Inc. dated as of May 30, 2000 (as amended from time to time)
with respect to the property at 12221 N. Houston Rosslyn Rd., Houston, Texas.

 

“HSR Act” means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder.

 

“Income Taxes”
means any and all Taxes based upon, measured by or calculated with respect to
net income or receipts (including, but not limited to, any capital gains and
alternative minimum taxes).

 

“Income Tax Returns”
means any and all Tax Returns relating to Income Taxes.

 

“Indebtedness”
means, with respect to any Person, (a) all indebtedness of such Person, whether
or not contingent, for borrowed money, (b) all obligations of such Person
evidenced by notes, bonds or debentures, (c) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, (d) all obligations, contingent or
otherwise, of such Person under acceptance, letter of credit or similar
facilities, (e) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of such Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of redeemable preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, and (f) all
Indebtedness of others referred to in clauses (a) through (e) above guaranteed
directly or indirectly in any manner by such Person or in effect guaranteed
directly or indirectly by such Person.

 

“Indemnity Obligations”
shall have the meaning set forth in Section 9.08(a).

 

“Indemnified Party”
shall have the meaning set forth in Section 9.04(a).

 

“Indemnified Project
Loss” shall have the meaning set forth in Section 9.06(d)(i).

 

“Indemnified Projects”
shall have the meaning set forth in Section 9.06(a).

 

“Indemnifying
Party” shall have the meaning set forth in Section 9.04(a).

 

A-12

 

“Independent
Accounting Firm” shall have the meaning set forth in
Section 2.10(b)(iii).

 

“Independent Actuary”
shall have the meaning set forth in Section 6.10(f).

 

“Ineligible Guarantee”
shall have the meaning set forth in Section 5.08(a).

 

“Initial Purchase
Price” shall have the meaning set forth in Section 2.04(a).

 

“Intellectual Property”
means (i) patents, patent applications and statutory invention registrations,
utility models, petty patents, provisional patent applications and any and all
divisions, continuations, continuations-in-part, reissues, reexaminations and
extensions thereof, and all other invention registrations and invention
disclosures, (ii) Trademarks, (iii) copyrights, including (without
limitation), copyrights in computer software and databases, (iv) designs,
design rights and industrial models, (v) rights in inventions, trade secrets
and technical know-how, (vi) database rights, (vii) semiconductor topography
rights and mask works and (viii) registrations and applications for
registration (and right to make applications) of any of the foregoing in all
cases, wherever subsisting in the world, and all rights of the same or a
similar nature in any jurisdiction.

 

“Intercompany
Settlement Payment” shall have the meaning set forth in
Section 2.09(d).

 

“Intra-Group Trading
Amount” means the purchase price of goods delivered and services performed
(i) by ABB or its Affiliates (other than OGP Subsidiaries and the JV Companies)
to the OGP Subsidiaries and the JV Companies or (ii) by the OGP Subsidiaries
and the JV Companies to ABB or its Affiliates (other than the OGP Subsidiaries
and the JV Companies), as the case may be, in the ordinary course of business.

 

“Investment Adjustment”
means during the period specified sixty percent (60%) of the percentage change
in the FTSE All-Share Total Return Index plus forty percent (40%) of the
percentage change in the FTSE Over 15 Year Gilt Total Return Index between
close of business on the first date and close of business on the day before the
second date.

 

“Investors” shall
have the meaning set forth in Exhibit S-1 hereto.

 

“IPR Assignors”
means ABB Research Ltd. (Switzerland), ABB GmbH (Germany), ABB Sp. z.o.o
(Poland) and ABB AS (Norway).

 

“IRS” means the
United States Internal Revenue Service.

 

“JV Company” means
any partnership, joint venture, consortium or other association or undertaking
engaged in the OGP Business in which ABB is the beneficial owner of fifty
percent (50%) or less of the outstanding shares of corporate capital or other
equity interests.

 

“Key Contract”
means the documents listed under the heading of “Key Contracts” on
Section 3.09(c) of the Disclosure Schedule.

 

A-13

 

“Kizomba B Matter”
means the claims referred to in item 13 of Section 3.08(a) of the Scope I
Operations Disclosure Schedule.

 

“knowledge of ABB”
or “ABB’s knowledge” means the actual knowledge of any of the Persons
specifically identified in Section 12.01(a) of the Disclosure Schedule.

 

“Law” means any
United States federal, state, local or non-United States statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law.

 

“Leased Real Property”
means the real property leased by an OGP Subsidiary or leased by an Asset
Seller as set forth in Section 3.11 of the Disclosure Schedule.

 

“Leases” shall
have the meaning set forth in Section 3.11(b)(iii).

 

“Liabilities”
means any and all liabilities and obligations, whether accrued or fixed, absolute
or contingent, matured or unmatured or determined or determinable, including
Taxes and those arising under any Law (including any Environmental Law), Action
or Order and those arising under any contract, agreement, arrangement,
commitment or undertaking.

 

“Local Agreements”,
“Local Asset Agreements” and “Local Share Agreements” shall each
have the meanings set forth in Sections 5.02(a)(ii) and (iii).

 

“Longstop Date”
shall have the meaning set forth in Section 10.01(a).

 

“Loss” or “Losses”
shall have the meaning set forth in Section 9.02 (a).

 

“MADSP” shall have
the meaning set forth in Section 7.08(c).

 

“Material Adverse
Effect” means, when referred to in the Warranties for the purposes of
determining a Warranty Claim pursuant to Article IX, any fact, matter or
circumstance relating to a Scope that has had or would reasonably be expected
to have a materially adverse effect on the business, results of operations or
financial condition of such Scope (and not, for the avoidance of doubt, on the
OGP Business taken as a whole) or in the case of any fact, matter or
circumstance not specific to a particular Scope, the OGP Business taken as a
whole; provided, however, that “Material Adverse Effect”
shall not include any fact, matter or circumstance arising after the date
hereof out of or attributable to (i) changes or effects that generally affect
the industries in which the OGP Business operates, (ii) changes in general
economic, regulatory or political conditions, (iii) changes arising out of, or
attributable to, the announcement of the execution of this Agreement or the
consummation of the transactions contemplated by the Transaction Agreements, or
(iv) changes directly attributed to Purchaser’s consent or refusal to consent
to the taking of actions set forth in Section 5.03.  Notwithstanding the foregoing, when referred
to in the Warranties for the purpose of determining the satisfaction of the
conditions to Closing specified in Section 8.03(a), Material Adverse
Effect shall be determined by reference to the OGP Business taken as a whole,
and not to any particular Scope.

 

“Material Contracts”
shall have the meaning set forth in Section 3.09(a).

 

“Material Permits”
shall have the meaning set forth in Section 3.07.

 

A-14

 

“Material Subsidiary”
means each of (i) ABB Offshore Systems Inc., (ii) ABB Vetco Gray Inc., (iii)
ABB Offshore Systems Ltd., (iv) ABB Vetco Gray Pte. Ltd., (v) ABB Vetco Gray UK
Ltd., (vi) ABB Offshore Systems AS and (vii) ABB Vetco Gray Canada, Inc.; and “Material
Subsidiaries” means all of the above entities.

 

“Maximum Payment Limit”
shall have the meaning set forth in Section 11.01(c)(i).

 

“Merger” shall
have the meaning set forth in Section 8.01(a).

 

“Merger Regulation”
shall have the meaning set forth in Section 8.01(a).

 

“Mezzanine Loan
Agreement” means the US$180,000,000 mezzanine loan agreement dated on or
about the date hereof between Laradew Limited as borrower, certain Group
Companies (as defined therein) as guarantors, J.P. Morgan plc, Bank of Scotland
and Credit Suisse First Boston as mandated lead arrangers, the Mezzanine
Lenders named in that agreement, Credit Suisse First Boston as mezzanine
facility agent and J.P. Morgan Europe Limited as security agent, as
supplemented, novated and amended from time to time.

 

“Migration Plan”
shall have the meaning set forth in Section 5.24(a).

 

“Misplaced Asset”
shall have the meaning set forth in Section 5.18(a).

 

“Monthly Management
Report” shall have the meaning set forth in Section 3.05(a).

 

“Monthly Review
Protocol” means the principles and agendas for the monthly review meetings
contemplated to be held by the Parties set forth in Exhibit W.

 

“Net Assets”
means, with respect to the OGP Business determined on a combined basis, total
net assets minus total net
liabilities, as reflected on the Effective Date Balance Sheet or the
Pre-Closing Notice, as the case may be; provided, for the avoidance of
doubt, that “Net Assets” shall not take into account the Intercompany
Settlement Payment, the Excluded Assets or the Excluded Liabilities, and shall
include the Net Intercompany Balance as at the Effective Date (only for the
purpose of the Effective Date Balance Sheet).

 

“Net Early Termination
Amount” shall have the meaning set forth in Section 5.23(e).

 

“Net Intercompany
Balance” shall have the meaning set forth in Section 2.09(d).

 

“Net Outstanding A/I
Guarantee Amount” means at any time $40,000,000 less any net reductions in
accordance with Section 9.08(a) at the time of determination.

 

“Net Outstanding Tax
Guarantee Amount” means at any time $7,500,000 less any net reductions in
accordance with Section 9.08(b) at the time of determination.

 

“Net Payment”
shall have the meaning set forth in Section 2.10(h)(ii).

 

A-15

 

“Net Position”
shall have the meaning set forth in Section 9.06(d)(ii).

 

“Net Stage Position”
shall have the meaning set forth in Section 9.06(d)(iii).

 

“Newco1” means
Pixiegrove Limited, a company incorporated in England & Wales (registered
number 4825478) whose registered office is 10 Upper Bank Street, London, EC14
5JJ.

 

“Newco2” means
Packgrange Limited, a company incorporated in England & Wales (registered
number 4825399) whose registered office is 10 Upper Bank Street, London, EC14
5JJ.

 

“New OGP
Infrastructure” shall have the meaning set forth in Section 5.24(a).

 

“Non-Assumed
Plans” means the ABB Post-Retirement Medical Plan, the ABB UK Plan and the
Norway Split Plans.

 

“Non-Assumed Plans
Deficit” means in respect of each Non-Assumed Plan the value at the Closing
Date of such plan’s liabilities (as calculated in accordance with Exhibit Q) in
respect of the OGP Employees, Transferring Employees or in relation to the ABB
UK Plan only the Transferring Members and (in respect of the Norway Split Plans
and the ABB Post-Retirement Medical Plan, OGP Former Employees) minus: 
(i) in respect of the Norway Split Plans, the transfer value
required to be paid by the Norway Split Plans to Purchaser’s Scheme in
accordance with applicable Laws, but excluding any allowance for any
post-Closing obligation on ABB under the linear funding requirement of
applicable Law by virtue of the fact that the OGP Subsidiaries (and, if
applicable, the Purchaser or the Purchaser Affiliates and the JV Companies)
shall cease to participate in the Norway Split Plans at the end of the
Transitional Period, (ii) the cash equivalent transfer value calculated in
accordance with applicable Laws in respect of the ABB UK Plan, and
(iii) in respect of the ABB Post-Retirement Medical Plan, zero (the
Non-Assumed Plans in the U.S. are unfunded).

 

“Non-Business
Liabilities” shall mean:

 

(i)                                     any
liability of any dormant subsidiary which (a) relates to a period prior to
Closing and (b) does not relate directly to the OGP Business or any liability
for any other entity which has been liquidated or otherwise wound up;

 

(ii)                                  any
liability in connection with the disposal or acquisition pursuant to an
agreement entered into prior to Closing of any company, entity or business
which does not relate directly to the OGP Business and any liabilities which
relate in whole or in part to such company, entity or business; and

 

(iii)                               any
other liability incurred by or on behalf of the OGP Business prior to Closing
which is unrelated to the OGP Business.

 

“Non-Competition
Agreement” shall have the meaning set forth in Section 5.02(iv).

 

A-16

 

“Non-Ordinary Course
Derivative Contracts” shall have the meaning set forth in
Section 5.23(a).

 

“Non-U.S. Plan”
means a material employee benefit plan or a bonus, stock option, stock
purchase, incentive, profit sharing, deferred compensation, retiree medical or
life insurance, retirement, severance or other benefit plan, program, agreement
or arrangement, or any employment, retention or change of control agreement or
arrangement, to which ABB, any of the OGP Subsidiaries or any of the Asset
Sellers maintains, contributes to or sponsors for the benefit of any OGP
Employee, OGP Former Employee, Transferred Employee, or current or former
director of the OGP Subsidiaries or in respect of which any OGP Subsidiary has
or may have material liability, and which is subject to or governed by the Law
of any jurisdiction other than the United States or any state or commonwealth
of the United States.

 

“Norway
Securitization Program” means the agreement relating to the discounting of
receivables dated November 28, 2002 between ABB Offshore Systems AS and
Den norske Bank ASA.

 

“Norway Split
Plans” means ABB Pensjonkasse and ABB Pensjonkasse Executive Plan.

 

“Off Balance
Sheet Indebtedness” means the aggregate amount represented by an amount
raised under any transaction or arrangement (including forward sale or sale and
leaseback agreements) having the commercial effect of a borrowing and which is
not included within Borrowings (as defined in Exhibit E).

 

“OGP Assets” shall
have the meaning set forth in Section 3.16(a).

 

“OGP Business”
means the Business as conducted by ABB through the Scope 1 Operations, the
Scope 2 Operations (including the non-Angolan assets of Sociedade de Montagens
Metalomecanicas S.A.) and the control valve business in India.

 

“OGP EBITDA” means
the earnings before interest, taxes, depreciation and amortization of the OGP
Business for the 12-month period ended on the Closing Date and shall comprise
the aggregate of (x) the earnings before interest, taxes, depreciation and
amortization for the period commencing on January 1, 2004 and ending on
the Closing Date, calculated in accordance with the principles contained in the
definition of “2004 EBITDA” set forth in Exhibit S-1 hereto (provided that all
references therein to the Purchaser Group shall be replaced for purposes of
this definition with references to the OGP Business and provided that all
references therein to the 2004 Accounts Period shall mean, for the purposes of
this definition only, from January 1, 2004 to the Closing), and (y) the
earnings before interest, taxes, depreciation and amortization for the period
commencing on the date 364 days prior to the Closing Date (excluding the
Closing Date itself) (the “LTM Start Date”) and ending on
December 31, 2003, calculated in accordance with the principles set forth
in Exhibit S-3 hereto.  For the
avoidance of doubt, if the LTM Start Date is not a monthly management account date,
then the earnings before interest, taxes, depreciation and amortization for the
period from the LTM Start Date to the next monthly management account date
shall be calculated as a pro rata portion of such period.

 

“OGP Employees”
shall have the meaning set forth in Section 3.13(a).

 

A-17

 

“OGP Former Employees”
shall have the meaning set forth in Section 3.13(a).

 

“OGP Intellectual
Property” means all Intellectual Property owned by the OGP Subsidiaries.

 

“OGP IP Licenses”
means all licenses of Intellectual Property between (i) an OGP Subsidiary and
(ii) a third party that is not an Affiliate of either an Asset Seller or an OGP
Subsidiary, which licenses are material to the OGP Business as currently conducted
or, which in any single case, involve consideration in excess of $500,000
during the remainder of its natural term (excluding any renewal terms), but
excluding any licenses ancillary to the sale of products or services in the
ordinary course of business.

 

“OGP Guarantees”
shall have the meaning set forth in Section 5.08(a).

 

“OGP Purchasers”
means each wholly owned subsidiary of Purchaser assigned by Purchaser pursuant
to Section 11.06 the right to acquire Shares or the right to acquire the
Purchased Assets and to assume the Assumed Liabilities, as the case may be,
pursuant to this Agreement.

 

“OGP Real Property”
means the Leased Real Property and the Owned Real Property.

 

“OGP Shares” shall
have the meaning set forth in Section 3.02(b).

 

“OGP Subsidiaries”
shall have the meaning set forth in the Preliminary Statements to this
Agreement.

 

“OGP TPGs” shall
have the meaning set forth in Section 5.08(a).

 

“Opinion Review
Release” means the opinion issued by the U.S. Department of Justice,
Criminal Division pursuant to the procedures set forth at 28 C.F.R. § 80
substantially to the effect that the U.S. Department of Justice does not intend
to take enforcement action against the Investors, Purchaser or any Purchaser
Affiliate or any of their respective directors and senior officers for any
pre-acquisition conduct concerning the OGP Business.

 

“Order” means any
order, writ, judgment, injunction, decree, stipulation, determination or award
entered by or with any Governmental Authority.

 

“Ordinary Course
Derivative Contracts”  shall have
the meaning set forth in Section 5.23(a).

 

“Owned Real Property”
means the right, title and interest in and to the real property owned by an OGP
Subsidiary or an Asset Seller that is set forth in Section 3.11 of the
Disclosure Schedule, together with all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all
fixtures, systems, equipment and items of personal property attached or
appurtenant thereto and all easements, licenses, rights and appurtenances
relating to the foregoing.

 

A-18

 

“Parent Guarantees”
shall have the meaning set forth in Section 5.08(a).

 

“Party” or “Parties”
means ABB and/or Purchaser, as applicable.

 

“Patent Assignments”
means the assignment from the applicable Asset Seller or IPR Assignor to
Purchaser or its designees of the Transferred Intellectual Property.

 

“Payment Date”
means the date on which ABB and Purchaser agree in writing or, in default of
agreement, the date which ABB chooses and which is within sixty (60) calendar
days of the date on which ABB has received written evidence that the Transfer
Terms have been and remain complied with.

 

“Payment Event”
shall have the meaning set forth in Section 9.08(a).

 

“Permitted
Encumbrances” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been
commenced:  (a) liens for Taxes,
assessments and governmental charges or levies not yet due and payable or which
are being contested in good faith in proper proceedings; (b) Encumbrances
imposed by Law, such as materialmen’s, mechanics’, carriers’, workmen’s and
repairmen’s liens and other similar liens arising in the ordinary course of
business securing obligations that are not overdue for a period of more than 30
days; (c) pledges or deposits to secure obligations under workers’ compensation
laws or similar legislation or to secure public or statutory obligations; (d)
minor survey exceptions, reciprocal easement agreements and other customary
Encumbrances on title to real property that (i) were not incurred in connection
with any Indebtedness, (ii) do not render title to the property encumbered
thereby unmarketable and (iii) do not, individually or in the aggregate,
materially adversely affect the value or use of such property for its current
and anticipated purposes; (e) Encumbrances described in Section 1.01(a) of
the Disclosure Schedule; (f) the Leases and all matters to which the
Leases are subject and (g) non-exclusive licenses of Intellectual Property.

 

“Person” means any
individual, partnership, firm, corporation, association, trust, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended.

 

“Post-Closing Covenant”
shall have the meaning set forth in Section 9.01.

 

“Post-Closing Date Tax
Benefit” means any present or future Tax benefit actually realized by
Purchaser, any of the OGP Purchasers, or any of the OGP Subsidiaries for a
taxable period or portion thereof beginning after the Closing Date.

 

“Post-Closing Taxable
Period”  means (i) any taxable
period ending after the Closing Date and (ii) with respect to any Straddle
Period, the portion of such taxable period that ends after the Closing Date.

 

“Pre-Closing
Adjustment” shall have the meaning set forth in Section 2.09(b).

 

“Pre-Closing Covenants”
shall have the meaning set forth in Section 9.01.

 

A-19

 

“Pre-Closing Losses”
shall have the meaning set forth in Section 5.12(b).

 

“Pre-Closing Notice”
shall have the meaning set forth in Section 2.09(a).

 

“Pre-Closing Taxable
Period” means (i) any taxable period ending on or before the Closing Date
and (ii) with respect to any Straddle Period, the portion of such taxable
period that ends on or before the Closing Date.

 

“Primary Transaction”
means each of the transactions listed as Primary Transactions on Exhibit L.

 

“Primary Test”
shall have the meaning set forth in Section 5.06(c).

 

“Provisionally
Retained Business” means any portion of the OGP Business that is not sold,
conveyed, assigned, transferred or delivered to Purchaser as of the Closing
Date and is the subject of a Deferred Transfer Agreement.

 

“Purchase
Price” shall have the meaning set forth in Section 2.04(a).

 

“Purchase Price
Documentation” shall have the meaning set forth in Section 2.10(a).

 

“Purchased Assets”
means the right, title and interest of any Asset Seller in the following
assets, as the same shall (a) exist on the Closing Date less any such assets
that shall have been terminated, repaid or disposed of in the ordinary course
of business between the Effective Date and the Closing Date and (b) exist on
the Effective Date plus any assets that shall have been acquired by the
relevant Asset Seller in the ordinary course of business between the Effective
Date and the Closing Date:

 

(i)                                     the
Owned Real Property and Leased Real Property identified on Section 3.11 of
the Disclosure Schedule as being owned or leased by an Asset Seller, the
Transferred Intellectual Property (together with registration and renewal
certificates of the foregoing, to the extent applicable), the Transferred IP
Licenses, and, subject to Section 2.02(b), the Tangible Personal Property
and the Asset Seller Contracts;

 

(ii)                                  the Transferred
Software Licenses;

 

(iii)                               all inventories owned by
the Asset Sellers and used primarily relating to the OGP Business;

 

(iv)                              the goodwill of the Asset
Sellers relating to the OGP Business, together with the exclusive right (so far
as the Asset Sellers can grant the same) for Purchaser or the relevant OGP
Purchaser to use the names and marks used in the OGP Business (other than the
Retained Names and Marks except as provided under Section 5.07) to
represent itself as carrying on the OGP Business in continuation of and in
succession to the Asset Sellers;

 

A-20

 

(v)                                 all accounts
receivable and notes receivable owing to the Asset Sellers from third parties
to the extent arising from the conduct of the OGP Business;

 

(vi)                              the sales and promotional
literature, customer lists and other sales-related materials used by the Asset
Sellers primarily relating to the OGP Business;

 

(vii)                           cash received in respect of
the OGP Business by such Asset Seller after the Effective Date and held by such
Asset Seller on the Closing Date;

 

(viii)                        the Intra-Group Trading Amount
owing to the Asset Sellers to the extent arising from the conduct of the OGP Business;

 

(ix)                                the benefit (so far as
the same can be lawfully assigned or transferred) of all claims, causes of
action and similar rights of the Asset Sellers arising at any time (whether
before or after the Closing) out of or relating to the OGP Business, which
relate primarily to any of the Purchased Assets or any of the Assumed
Liabilities;

 

(x)                                   fixed plant,
equipment, machinery and motor vehicles primarily related to the OGP Business;

 

(xi)                                all books of account,
general, financial and personnel records, invoices, shipping records, supplier
lists, tax records that are required by applicable Law to be transferred,
correspondence and other documents, records and files relating exclusively to
the OGP Business (and copies of any such documents relating primarily to the
OGP Business), original registration and renewal certificates for the OGP
Intellectual Property and the Transferred Intellectual Property to the extent
in the possession of the Asset Sellers and any rights thereto owned by the
Asset Sellers; provided, however, that each of the Asset Sellers
may retain electronic or paper copies of all such books of account and records
referenced above; and

 

(xii)                             all other assets
(including equity interests in the JV Companies) primarily related to or under
development primarily for the benefit of the OGP Business.

 

“Purchaser” shall
have the meaning set forth in the Preamble.

 

“Purchaser Affiliate”
means the Acquisition Newcos and, with respect to any Person at the time of
determination, any Person that is controlled directly, or indirectly through
one or more intermediaries, by an Acquisition Newco.  For the avoidance of doubt, “control” shall bear the meaning
ascribed to it in the definition of “Affiliate” above.

 

“Purchaser Compliance
Costs” shall have the meaning set forth in Section 11.01(d)(i).

 

“Purchaser Financing
Documents” means the Senior Credit Agreement, the Mezzanine Loan Agreement
and the Shareholders Agreement, the Bank CP Letter and the Equity CP Letter.

 

“Purchaser Indemnified
Party” shall have the meaning set forth in Section 9.03(a).

 

A-21

 

“Purchaser
Representatives” shall have the meaning set forth in Section 2.10(a).

 

“Purchaser
Stage Payments” shall have the meaning set forth in 9.06(d)(iii).

 

“Purchaser
Threshold” shall have the meaning set forth in Section 9.03(b).

 

“Purchaser Welfare
Benefit Plans” shall have the meaning set forth in Section 6.03.

 

“Purchaser’s
Accountants” means Deloitte & Touche Tohmatsu, independent accountants
of Purchaser, or such other internationally recognized independent accounting
firm as Purchaser may nominate with written notice to ABB.

 

“Purchaser’s
Actuary” means an actuary nominated by the Purchaser.

 

“Purchaser’s Bank
Account” means a bank account to be designated by Purchaser in a written
notice to ABB at least five Business Days before the Closing or such other bank
account as Purchaser may thereafter notify ABB pursuant to Section 11.02.

 

“Purchaser’s Relief”
means a Final Effective Date Balance Sheet Relief and/or any Relief to the
extent that the same arises in respect of periods (or any part of any period)
after the Closing Date or in respect of any event, act, omission, default,
occurrence, circumstance or transaction of any kind whatsoever occurring after
the Closing Date, but only to the extent that such Relief is not otherwise
prohibited by Section 7.03 of this Agreement.

 

“Purchaser’s Scheme”
means the retirement benefit plans nominated or established by Purchaser which
are capable of receiving the Transfer Amount and which have or are capable of
having any necessary regulatory or tax approval required by any applicable Law.

 

“Rabbi Trust”
shall have the meaning set forth in Section 6.04.

 

“Redundancy Laws”
means any Law or Order providing for any payment, compensation or other benefit
to be provided to employees in respect of the termination of their employment
on grounds which are without fault on the part of the employee or imposing such
obligations on an employer proposing to terminate any contract of employment on
grounds which are without fault on the part of the employee.

 

“Related Agreements”
means the Purchase Price Bank Guarantee, the Deferred Closing Bank Guarantee,
the Tax Election Bank Guarantee, the Surety, the Transition Services Agreement,
the Local Agreements, the Non-Competition Agreement, the Shared IP License
Agreement, the Patent Assignments, the Deferred Transfer Agreements (if any)
and such other documents or instruments required to be entered into and
delivered under this Agreement and the Related Agreements to effectuate the
transactions contemplated by the Transaction Agreements.

 

“Release” means
disposing, discharging, injecting, spilling, leaking, leaching, dumping,
emitting, escaping, emptying, seeping or placing Hazardous Materials into the
Environment.

 

A-22

 

“Relief” means any
allowance, credit, exemption, deduction or relief from, in computing against or
in respect of Tax or any right to repayment of Tax.

 

“Remaining Guarantees”
shall have the meaning set forth in Section 5.08(m).

 

“Remedial Action”
means any monitoring, treatment, excavation, removal, investigation,
remediation or cleanup of Hazardous Materials in the Environment.

 

“Reorganization”
shall have the meaning set forth in Section 5.01.

 

“Repayment Event”
shall have the meaning set forth in Section 9.08(c).

 

“Repayment Bank
Guarantee” shall have the meaning set forth in Section 5.02(a)(viii).

 

“Representative”
means, as to any Party, such Party’s Affiliates, and their respective
directors, officers, employees, agents, financing sources, syndicatees and
potential syndicatees of such financing sources and advisors and any and all
advisors to such persons.

 

“Retained Conduct
Matter” means, unless Purchaser confirms to ABB in writing that it shall
not be so treated, any Third Party Claim whose subject matter relates to a
disclosure pursuant to Section 3.07(iv) of the Disclosure Schedule or
a breach of Section 3.07(iv).

 

“Retained Names and
Marks” shall have the meaning set forth in Section 5.07(a).

 

“Retained Plans”
shall have the meaning set forth in Section 6.05.

 

“Retained TPG”
shall have the meaning set forth in Section 5.08(a).

 

“Revenue Procedure”
means Revenue Procedure issued from time to time by the United States Internal
Revenue Service.

 

“Review Period”
shall have the meaning set forth in Section 11.01(c)(i).

 

“Rules” shall have
the meaning set forth in Section 11.12(c).

 

“Sao Paulo Property”
shall have the meaning set forth in Section 5.31.

 

“Scope” means each
of Scope 1 Operations and Scope 2 Operations.

 

“Scope 1 Operations”
means the business activities conducted from time to time by the Drilling
Production Equipment and Subsea Systems business units.

 

“Scope 2 Operations”
means the business activities conducted from time to time by the Maintenance
and Modification and the Floating Production Systems-Norway business units.

 

“Secondary Transaction”
means each of the transactions listed as Secondary Transactions in Exhibit L or
designated as a Secondary Transaction pursuant to Section 5.06(c).

 

A-23

 

“Section 338
Forms” shall have the meaning set forth in Section 7.08(b).

 

“Section 338(h)(10)
Election” shall have the meaning set forth in Section 7.08(a).

 

“Securitization
Programs” means (i) the Eureka Program and (ii) the Norway Securitization
Program.

 

“Self-Regulatory
Organization” means any authority or body with relevant powers to which a
Party or any of its Representatives is subject or by which a Party or any of
its Representatives is governed, administered or has agreed to be bound,
whether or not the relevant powers of such authority or body have the force of
Law.

 

“Seller” and “Sellers”
shall have the meanings set forth in the Preliminary Statements.

 

“Seller Subsidiaries”
shall have the meaning set forth in the Preliminary Statements.

 

“Senior Credit
Agreement” means the US$873,000,000 senior credit agreement dated on or
about the date of this Agreement between, inter alia, Pixiegrove Limited (as
parent), certain Group Companies (as defined therein) as borrowers and
guarantors, J.P. Morgan plc, Bank of Scotland and Credit Suisse First Boston as
mandated lead arrangers, the senior lenders named in that agreement, and J.P.
Morgan Europe Limited as facility agent and security agent, as supplemented,
novated and amended from time to time.

 

“Senior Employee”
means an employee of an OGP Subsidiary or of an Asset Seller who is expected to
be a Transferred Employee, as the case may be, who has an annual salary in
excess of $100,000 or otherwise who is set out in Schedule 2 to the
Non-Competition Agreement.

 

“Settlement Statement”
shall have the meaning set forth in Section 5.23(d).

 

“Share Sellers”
shall have the meaning set forth in the Preliminary Statements.

 

“Shared IP License
Agreement” shall have the meaning set forth in Section 5.02(a)(v).

 

“Shared Lotus Notes
Databases” shall have the meaning set forth in Section 5.25(a)(iv).

 

“Shared Real Property”
shall have the meaning set forth in Section 5.22(a).

 

“Shareholders
Agreement” means the agreement dated on or about the date of this Agreement
between (1) Newco1, Newco2 and Purchaser, (2) John Kennedy and others and (3)
Candover, 3i, JP Morgan Partners (each term as defined therein) and others, as
amended from time to time.

 

“Shares” shall
have the meaning set forth in the Preliminary Statements.

 

A-24

 

“Shortfall Amount”
shall have the meaning set forth in Section 11.01(d)(ii)(A).

 

“South Korean
clearance” shall have the meaning set forth in Section 5.06(a).

 

“Split Plans”
means ABB UK Plan and the Norway Split Plans.

 

“Stage Estimate”
shall have the meaning set forth in Section 9.06(d)(iii).

 

“Stage Period”
shall have the meaning set forth in Section 9.06(d)(iii).

 

“Straddle Period”
means any taxable period beginning before and ending after the Closing Date.

 

“Straddle Period
Return” shall have the meaning set forth in Section 7.02(c).

 

“Stop Notification”
shall have the meaning set forth in Section 10.01(a)(i).

 

“STPG Notice”
shall have the meaning set forth in Section 5.08(a).

 

“Stub Payment”
shall have the meaning set forth in Section 2.09(c).

 

“Substantial
Completion of the Compliance Review” means the mutual agreement in writing of the compliance counsels of
each Party that the Compliance Review has been substantially completed.

 

“Substitute Parent
Guarantees” shall have the meaning set forth in Section 5.08(a).

 

“Substitute Third
Party Guarantees” shall have the meaning set forth in Section 5.08(a).

 

“Surety” shall have
the meaning set forth in Section 5.02(a)(x).

 

“Tangible Personal
Property” means all of the tangible personal property, including equipment,
machinery, vehicles and rolling stock, office equipment and furnishings used or
held for use by the Asset Sellers primarily relating to the OGP Business.

 

“Tax” or “Taxes”
means all income, gross receipts, gains, sales, use, employment, franchise,
profits, excise, property, value added and other taxes, fees, stamp taxes and
duties, assessments or charges of any kind, together with any interest and
penalties, additions to tax or additional amounts imposed by any Taxing
Authority with respect thereto, as well as payments for group relief.

 

“Tax Election Bank
Guarantee” shall have the meaning set forth in Section 5.02(a)(ix).

 

“Tax Indemnified Party”
shall have the meaning set forth in Section 7.04(a).

 

“Tax Indemnifying
Party” shall have the meaning set forth in Section 7.04(a).

 

A-25

 

“Tax Items” shall
have the meaning set forth in Section 7.02(a).

 

“Tax Returns”
means any and all returns and reports required to be filed with a Taxing
Authority.

 

“Taxing Authority”
means the United States Internal Revenue Service and any other U.S. or non-U.S.
federal, state, canton, provincial, local, national or other Governmental
Authority having the power to impose a Tax or Taxes.

 

“Third Party Claim”
shall have the meaning set forth in Section 9.04(b).

 

“Third Party
Guarantees” shall have the meaning set forth in Section 5.08(a).

 

“Title IV Plans”
means any “employee pension benefit plan” as defined in Section 3(2) of
ERISA that is or has been sponsored, maintained or contributed to by ABB or its
Affiliates at any time with respect to which the OGP Subsidiaries would incur
liability under Title IV of ERISA or Section 412 of the Code.

 

“Trademarks” means
trademarks, service marks, trade names, trade dress, corporate names, logos,
domain names and other identifiers of source, together with the goodwill
associated therewith, together with all registrations and applications for
registration thereof.

 

“Transaction
Agreements” means this Agreement and the Related Agreements.

 

“Transfer
Amount” means the amount as calculated in accordance with
Section 6.06(c).

 

“Transfer Date”
means the first day of the month following the date six months after the
Closing Date or such other date as ABB and Purchaser may agree in writing.

 

“Transfer
Regulations”  means any applicable Law implementing the provisions of the
Council Directive 2001/23/EEC dated March 12, 2001, or any other similar
provisions provided for by applicable Law in non-European Union countries,
applicable to any of the Transferred Employees or their terms and conditions of
employment.

 

“Transfer Terms”
means all of the requirements in respect of Purchaser’s Scheme set out in
Section 6.06 have been and remain complied with in all material respects,
any regulatory consents have been obtained and the Split Plans have received
all of the written consents of Transferring Members (where appropriate) to the
making of a transfer payment to Purchaser’s Scheme.

 

“Transferred Employees”
means such employees of each Asset Seller who are (a) primarily engaged in
the OGP Business (wherever located) (including all such employees who have
rights of employment on return from any vacation, leave or other absence), or
(b) listed in Exhibit A to a Local Asset Agreement.

 

A-26

 

“Transferred
Intellectual Property” means the registered Intellectual Property owned by
the Asset Sellers and used in the OGP Business and set forth on
Section 1.01(c) of the Disclosure Schedule.

 

“Transferred IP
Licenses” means the licenses of Intellectual Property between (i) an
Asset Seller and (ii) a third party that is neither an ABB Affiliate of an
Asset Seller or an OGP Subsidiary set forth in Section 1.01(c) of the
Disclosure Schedule.

 

“Transferred Software
Licenses” means the number of licenses for software applications obtained
by ABB and its Affiliates and used in the conduct of the OGP Business
immediately prior to the Closing, as such software applications and number of
licenses are listed in Section 1.01(b) of the Disclosure Schedule.

 

“Transferring
Member” means an OGP Employee or Transferred Employee who is a member of
one of the Split Plans immediately before the Closing Date who becomes a member
of Purchaser’s Scheme with effect from the Transfer Date and, who (in respect
of an ABB UK Plan member only), in a written form, within sixty (60) calendar
days prior to the Transfer Date requests or consents to a transfer of assets
being made from the Split Plans to Purchaser’s Scheme in discharge of all
liabilities which the Split Plans may have to pay benefits to or in respect of
him and who has not withdrawn that request before the Payment Date, together
with, in respect of the Norway Split Plans, any OGP Former Employee who has an
entitlement or contingent entitlement to benefits under the Norway Split Plans.

 

“Transition Services
Agreement” shall have the meaning set forth in Section 5.02(a)(i).

 

“Transitional
Period” means the period beginning on the Closing Date and ending on the
Transfer Date.

 

“Treasury Regulations” means the Treasury Regulations (including
Temporary Regulations) promulgated by the U.S. Department of Treasury with
respect to the Code or other federal tax statutes.

 

“Undisclosed Derivative Contracts” shall have the meaning set
forth in Section 5.23(a).

 

“U.S.
Antiboycott Laws and Regulations” means the antiboycott laws and
regulations administered by the U.S. Department of Commerce and the U.S.
Department of Treasury, including the reporting and filing requirements set
forth in Section 8 of the Export Administration Act of 1979, as amended
(50 USC.A app. Section 2407), Section 999 of the Code and Part 760 of
the Export Administration Regulations (15 C.F.R. Part 760) and the Export
Administration Act of 1979.

 

“U.S. Employee Plans”
shall have the meaning set forth in Section 3.13(a).

 

“Variation Agreement”
means the Agreement of Variation among ABB Service Pty Ltd., ABB Australia Pty
Ltd. and Worley Pty Ltd. dated December 19, 2003.

 

A-27

 

“Warranty Claim”
shall have the meaning set forth in Section 9.03(a)(i).

 

“Warranty Period
Guarantees” shall have the meaning set forth in Section 5.08(a).

 

“Workpapers” shall
have the meaning set forth in Section 7.08(c).

 

A-28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}]]