May 28, 2004
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Depositary Receipts Department
ABB International Finance Limited US$968,000,000 4.625 per cent Convertible
Unsubordinated Bonds Due 2007
Ladies and Gentlemen:
Reference is made to the Amended and Restated Deposit Agreement,
dated as of May 7, 2001 (the "Deposit Agreement"), by and among ABB Ltd, a
company incorporated under the laws of Switzerland (the "Company"), Citibank,
N.A., as depositary under the Deposit Agreement (the "Depositary"), and the
Holders and Beneficial Owners of American Depositary Shares ("ADSs") evidenced
by American Depositary Receipts ("ADRs") issued thereunder. All capitalized
terms used but not otherwise defined herein shall have the meaning given to such
terms in the Deposit Agreement.
The purpose and intent of this Letter Agreement is to establish
procedures to accommodate the amendment (the "Amendment"), pursuant to a
resolution of Bondholders passed at a meeting held on May 28, 2004, of the terms
of a Trust Deed, dated May 16, 2002 (the "Trust Deed"), by and among ABB
International Finance Limited (the "Issuer"), the Company and Citicorp Trustee
Company Limited (the "Trustee") and the US$968,000,000 4.625 per cent
Convertible Unsubordinated Bonds Due 2007 originally issued thereunder (the
"Bonds") to provide for, among other things, the conversion of Bonds by the
holders of such Bonds or by the Trustee (in either case, for the purpose of this
Letter Agreement, a "Converting Bondholder") into ADSs issued under the terms of
the Deposit Agreement.
For good and valuable consideration, the receipt and sufficiency of
which are hereby irrevocably acknowledged, the Company and the Depositary hereby
agree as follows:
1. Authority to Accept Deposit of Conversion Shares and Issue ADSs. The
Company hereby confirms that no governmental consents are required in
Switzerland or Guernsey for the Amendment except for the consent obtained from
the Guernsey Financial Services Commission. The Company hereby authorizes and
directs the Depositary to accept, in accordance with the terms and conditions of
the Deposit Agreement and this Letter Agreement, the deposit of Shares issued
upon conversion of the Bonds (the "Conversion Shares") on behalf of Converting
Bondholders upon the conversion of Bonds and to issue in respect thereof and in
the manner described in Section 2 below ADSs that are fully fungible with the
ADSs outstanding under the Deposit Agreement.
The Company hereby authorizes and directs the Depositary to accept,
in accordance with the terms and conditions of the Deposit Agreement and this
Letter Agreement, the deposit of Conversion Shares on behalf of the Trustee and
to issue in respect thereof and in the manner described in Section 3 below ADSs
that are fully fungible with the ADSs outstanding under the Deposit Agreement.
Nothing contained herein shall obligate the Depositary to treat the
ADSs issued upon conversion of the Bonds differently from ADSs otherwise issued
under the Deposit Agreement except as specifically set forth herein. The Company
hereby confirms that the Conversion Shares to be deposited with the Custodian
upon conversion of the Bonds will rank pari passu with and will be fully
fungible with the Shares then on deposit with the Custodian under the Deposit
Agreement, including, but not limited to, with respect to trading and
settlement.
The Company agrees that Converting Bondholders and the Trustee shall
be entitled, upon conversion, only to a whole number of ADSs. Conversion Shares
which would be represented by a fraction of one ADS shall not be issuable, and
Converting Bondholders will not receive any cash adjustment in respect of such
fraction.
2. Conversion Procedures. In order for a Converting Bondholder to receive
ADSs upon the conversion of Xxxx(s):
(a) While the Bond(s) are in global form or definitive form and held
in a clearing system, the Converting Bondholder is required to deliver to
Clearstream, Luxembourg or Euroclear (as such terms are defined in the
Trust Deed) or such other clearing system in which the Bond(s) are held,
as the case may be, with a copy to Banque Generale du Luxembourg S.A. (the
"Principal Paying and Conversion Agent") and the Trustee, or while the
Bond(s) are in definitive form and not held in a clearing system), the
Converting Bondholder is required to deliver to a Conversion Agent (as
defined in the Trust Deed) in accordance with the terms and conditions of
the Bonds as amended through the date hereof (as so amended, the "Terms
and Conditions") a duly completed and signed conversion notice,
substantially in the form of Exhibit A attached hereto or such other form
as may be agreed from time to time by the Issuer, the Principal Paying and
Conversion Agent and the Trustee as contemplated by the Agency Agreement
(as defined in the Trust Deed) (the "Bondholder Conversion Notice"), which
Bondholder Conversion Notice shall contain certain certifications to be
made by such Converting Bondholder as referred to in the Terms and
Conditions, together with, if the Bond(s) are in definitive form and not
held in a clearing system, the Bond(s) to be converted; provided however,
if the Converting Bondholder is the Trustee, the Bondholder Conversion
Notice is required to be delivered to the Issuer only and the Company
shall procure that the Issuer shall deliver to the Company and the
Depositary a copy of such Bondholder Conversion Notice within one business
day of receipt thereof (the Depositary shall not incur any liability for
any action or failure to act by the Issuer);
(b) A Conversion Agent is required to deliver to the Company and the
Depositary a copy of each duly completed and signed Bondholder Conversion
Notice(s) within one business day of receipt and due verification thereof
in accordance with the
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Agency Agreement (the Depositary shall not incur any liability for any
action or failure to act by a Conversion Agent);
(c) Upon receipt of a duly completed and signed Bondholder
Conversion Notice, the Company shall issue or cause the issuance and
deposit or cause the deposit of the requisite Conversion Shares with the
Custodian. For such purposes, individual deposits of Conversion Shares
shall be made for each Converting Bondholder. For each deposit, the
Company shall deliver to the Custodian a copy of the applicable duly
completed and signed Bondholder Conversion Notice;
(d) The Depositary shall procure that the Custodian notifies the
Depositary, upon the receipt by the Custodian of each deposit of
Conversion Shares and corresponding Bondholder Conversion Notice,
referencing the conversion particulars set forth in the Bondholder
Conversion Notice and adding "CB" or "Trustee", as the case may be as a
suffix to the deposit number to denote that the deposit(s) resulted from a
conversion of Bonds;
(e) Upon receipt from the Custodian of the notice described in
clause (d) of this Section 2, the Depositary shall issue the applicable
number of ADSs into DTC for further delivery to the applicable Converting
Bondholder; and
(f) The depositary fees applicable to the issuance of ADSs upon the
deposit of Conversion Shares as contemplated in this Section 2 shall be
payable by the Company upon terms and conditions separately agreed upon by
the Company and the Depositary.
3. Depositary Documentation. Upon the closing of the amendment of the
terms of the Trust Deed and the Bonds and the execution of this Letter
Agreement, the Company shall deliver to the Depositary opinions of U.S.,
Guernsey and Swiss counsel (as applicable) as to the legality of the Amendment.
The Company hereby authorizes the Trustee and the applicable Conversion Agent
(as defined in the Trust Deed) to provide to the Depositary copies of any and
all Bondholder Conversion Notices received from Converting Bondholders if and
when such are requested by the Depositary.
4. Representations and Warranties. The Company hereby represents and
warrants that at the time of deposit (i) the Conversion Shares have been duly
authorized, and will be validly issued, fully paid and non-assessable, (ii) all
preemptive (and similar) rights with respect to the Conversion Shares will have
been waived or exercised, (iii) the Conversion Shares presented for deposit will
be free and clear of any lien, encumbrance, security interest, charge, mortgage
or adverse claim, (iv) the Conversion Shares presented for deposit, and the ADSs
issuable upon deposit of the Conversion Shares, will not be Restricted
Securities, and (v) the Conversion Shares presented for deposit will not be
stripped of any rights or entitlements. Such representations and warranties
shall survive the deposit and withdrawal of the Conversion Shares, the issuance
and cancellation of ADSs and the delivery of ADRs in respect thereof.
5. Governing Law. This Letter Agreement shall be interpreted under, and
all the rights and obligations hereunder shall be governed by, the laws of the
State of New York.
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6. Counterparts. This Letter Agreement may be executed in counterparts,
each of which shall be deemed to be an original, and all of which, taken
together, shall constitute one and the same instrument.
7. Indemnification. The parties hereto acknowledge and agree that the
indemnification obligations contained in Section 5.8 of the Deposit Agreement
shall apply to all the terms, conditions, obligations and performances under
this Letter Agreement as if they were set forth in the Deposit Agreement.
8. Deposit Agreement. Insofar as the terms hereof are supplementary to the
terms of the Deposit Agreement for the purpose of accommodating the
contemporaneous amendment of the Trust Deed, do not modify in any way the rights
or obligations of Holders or Beneficial Owners of ADSs and pertain only to the
rights and obligations of the Depositary and the Company, all of the existing
terms and conditions of the Deposit Agreement shall remain in full force and
effect as set forth therein and notice hereof does not need to be provided to
Holders or Beneficial Owners of ADSs. The Company and the Depositary have caused
this Letter Agreement to be executed and delivered on their behalf by their
respective officers thereunto duly authorized as of the date set forth above.
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ABB LTD
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Deputy CFO
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant General Counsel
Agreed to as of the date set forth above:
CITIBANK, N.A.,
as Depositary
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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Exhibit A
Bondholder Conversion Notice
ABB INTERNATIONAL FINANCE LIMITED
U.S.$968,000,000
4.625 per cent. Convertible Unsubordinated Bonds due 2007
Convertible into American Depositary Shares representing
Ordinary Shares of ABB Ltd
Delivery of Conversion Notice
Bondholders wishing to convert Bonds into American Depositary Shares
representing ordinary shares of ABB Ltd ("ADS") should complete this notice and
deliver it in person, by pre-paid mail or by tested telex/fax confirmed in
writing, to:
Whilst the Bonds are in global form or definitive form and held in a clearing
system
Clearstream, Luxembourg or Euroclear (currently at the offices specified below)
or such other clearing system in which the Bonds are held, as the case may be,
with a copy to the Principal Paying and Conversion Agent and the Trustee.
Clearstream Banking, societe anonyme *Clearstream Baking, societe anonyme
("Clearstream, Luxembourg"): 00 Xxxxxxxxx Xxxxxx-Xxxxxxxx Xxxxxxxxx
X-0000 Xxxxxxxxxx
Attention: OCE Department
SWIFT: CEDELUCL
Euroclear Bank S.A./N.V. *Euroclear Bank S.A./N.V.
("Euroclear"): (as operator of the Euroclear System)
Boulevard du Roi Xxxxxx XX
B-1210 Brussels
Belgium
Attention: Custody Processing
Department
SWIFT: MGTECBEBEECL
Whilst the Bonds are in definitive form and not held in a clearing system
a Conversion Agent together with the definitive individual certificate
representing the Bonds.
* Delete as appropriate
Failure to complete and deliver this Notice properly (in the determination of
the Principal Paying and Conversion Agent in consultation with Clearstream,
Luxembourg or
Euroclear, as the case may be, (whilst the Bonds are in global form or in
definitive form and held by Clearstream, Luxembourg or Euroclear) may result in
this Notice being treated as null and void.
Expressions defined in the terms and conditions of the Bonds (the Conditions)
shall bear the same meanings herein.
I/We, the Bondholder(s) specified in paragraph 1 below, being (a) holder(s) of
the Bond(s) referred to above, acknowledge that such Bond(s) are convertible in
accordance with Condition 5 (Conversion) and hereby irrevocably authorize ABB
International Finance Limited (the "Issuer") to convert such Bond(s) as are
specified in paragraph 2 below into ADSs and/or the Cash Alternative in lieu of
some or all of the ADSs, if applicable, to which I am/we are entitled in
relation to such Bond(s), all in accordance with the Conditions.
I/We further acknowledge that I am/we are obliged to make payment of all taxes,
stamp, transfer, registration and similar duties (if any) and all expenses,
scrip fees, levies and registration charges payable on or in respect of or
arising on exercise of the Conversion Rights attaching to the Bonds referred to
above or on the transfer, delivery or other disposition of the ADSs by the
Issuer or ABB (other than any taxes or capital duties or stamp issue or
registration duties payable in Switzerland or the United States in respect of
the allotment and issue or transfer of ADSs on conversion which will be paid by
the Issuer or (failing whom) ABB (but excluding any stamp taxes payable in
Switzerland arising as a result of me/us being qualified as a Swiss Securities
Dealer within the meaning of Swiss stamp duty laws)) to the Principal Paying and
Conversion Agent (whether or not I am/we are primarily liable for such duties,
expenses, fees, levies and charges under the relevant legislation).
1. Name(s) and Address(es) of Bondholder(s):
_____________________________________________________________
_____________________________________________________________
2. Aggregate principal amount of Bonds to be converted
Aggregate principal amount: U.S.$[ ].
Certificate numbers of Bonds (if relevant): (1) _____________
Total number of Bonds: ______________________________________
Details (including in respect of any missing unmatured Coupons and, in the case
of Bonds held outside the clearing systems, the relevant certificate numbers
thereof): (2) ___________________________________________________________
----------
(1) Not required for Bonds represented by a Global Bond or those held in a
clearing system.
(2) An indemnity may be required in respect of missing unmatured Coupons
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3. Instructions to Clearstream, Luxembourg/Euroclear(3)
I/We hereby irrevocably authorize and instruct Clearstream, Luxembourg/Euroclear
to:
debit the number of Xxxx(s) referred to above from the Account referred to below
on the Conversion Date; and
debit the Account referred to below with an amount equal to the amount payable
by me/us under Condition 5(b)(i) and to pay such amount to the Principal Paying
and Conversion Agent in immediately available funds.
Account No: _________________________________________________
Name of Account: ____________________________________________
I/We confirm that the Account referred to above is outside the United States and
is the account to be credited with the Cash Alternative (if any) and any
Equivalent Amounts and the payment to be made to me/us by the Issuer under
Condition 5(b)(i).
4. Bank Account Details for holders of Bonds held outside the clearing
systems(4)
Details of my bank account (which is outside the United States) to which any
cash payments due under Condition 5(a)(ii), 5(b)(i) and 5(b)(iv) shall be paid
as follows:
Receiving Bank: ___________________________________________________
Account Number: ___________________________________________________
Name of Account: __________________________________________________
5. Representations
I/We hereby represent and warrant that the Bonds and Coupons referred to above
are free from all liens, charges, encumbrances and other third party rights.
I/We acknowledge that the securities referred to in this Conversion Notice have
not been and will not be registered under the U.S. Securities Act of 1933 or any
securities laws of any political subdivision thereof and, accordingly, may not
be offered or sold in the United States or to U.S. persons or U.S. residents.
I/We represent and warrant that I/we are acquiring the ADSs for my/our own
account or the account of another person for whom we are authorized to make
these representations and that at the time of signing and delivery of the
Conversion Notice, and at time of delivery of any ADSs requested hereby, neither
I/we, nor any person who has an interest in the Bond, is in the United States or
is a U.S. person (as such terms are defined in Regulation S under the Securities
Act), the Conversion Right is not being exercised by or on behalf of a person in
the United States
----------
(3) Not required where individual definitive Bond is held outside the clearing
systems.
(4) Required where individual definitive Bond is held outside the clearing
systems.
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or a U.S. person and the Conversion Right is not being exercised with a view to
distribution in the United States, within the meaning of United States
securities laws, of the ADSs which will be acquired upon conversion of the Bonds
or the Ordinary Shares underlying such ADSs.
6. Delivery of ADSs
I/We hereby irrevocably request that the ADSs required to be delivered upon
conversion be delivered to the following account:
--------------------------------------------------------------------------------
Clearing System: DTC
--------------------------------------------------------------------------------
Participant Account in Clearing System: _____________________________
--------------------------------------------------------------------------------
Participant Name: _____________________________
--------------------------------------------------------------------------------
Beneficiary Account at Participant: _____________________________
--------------------------------------------------------------------------------
Name of contact person at Participant: _____________________________
--------------------------------------------------------------------------------
Telephone Number of contact person at Participant: _____________________________
--------------------------------------------------------------------------------
Email address of contact person at Participant: _____________________________
--------------------------------------------------------------------------------
7. Authorisation of production in proceedings
I/We hereby authorize the production of this Notice in any administrative or
legal proceedings instituted in connection with the Bond(s) or ADSs to which
this Notice relates or otherwise in connection with establishing compliance with
applicable laws.
Signed __________________________ Date _______________________________
Copies: 1 to be retained by Accountholder
and
(whilst in Global form) 1 to be sent to the Principal Paying and
Conversion Agent.
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For Agent's use only:-
1. Conversion Date:
2. (A) Aggregate principal amount of Bonds deposited for Conversion: ______
(B) Nominal Conversion Price on Conversion Date: _______________________
(C) Number of ADSs deliverable: (disregard fractions) __________________
3. Details of any indemnity obtained in respect of missing unmatured Coupons
under Condition 5(b)(i)___________________________________________________
4. Details of any payments made by the converting Bondholder pursuant to
Condition 5(b)(i)_________________________________________________________
5. Details of any payments made by the Issuer to the converting Bondholder
pursuant to Condition 5(b)(i)_____________________________________________
N.B. The Principal Paying and Conversion Agent must complete items 1, 2 and (if
applicable) 3 and/or 4 and/or 5.
________________________________________________________________________________
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