Exhibit 10.1

Form Version

 

 

 

STOCK AND ASSET PURCHASE AGREEMENT

between

BRISTOL-MYERS SQUIBB COMPANY

and

CIDRON HEALTHCARE LIMITED

 

 

Dated as of May 2, 2008

 

 

 

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

    

Page

ARTICLE I    Purchase and Sale of the Purchased Companies’ Equity Interests and
the Acquired Assets    SECTION 1.01. Purchase and Sale    2 SECTION 1.02.
Acquired Assets    3 SECTION 1.03. Assumed Liabilities    7 SECTION 1.04. Risk
of Loss    9 SECTION 1.05. Consents of Third Parties    9 SECTION 1.06. Refunds
and Remittances    10 ARTICLE II    Closing; Purchase Price Adjustment   
SECTION 2.01. Closing    11 SECTION 2.02. Post-Closing Purchase Price Adjustment
   13 ARTICLE III    Conditions to Closing    SECTION 3.01. Conditions to
Obligations of Purchaser    16 SECTION 3.02. Conditions to Obligation of Seller
   18 SECTION 3.03. Frustration of Closing Conditions    18 ARTICLE IV   
Representations and Warranties of Seller    SECTION 4.01. Organization, Standing
and Authority; Execution and Delivery; Enforceability    19 SECTION 4.02. No
Conflicts; Consents    19 SECTION 4.03. Transferred Equity Interests    20
SECTION 4.04. Organization, Standing and Documents of Transferred Entities    20
SECTION 4.05. Equity Interests in the Transferred Entities    21 SECTION 4.06.
Financial Statements    22 SECTION 4.07. Taxes    23 SECTION 4.08. Good and
Valid Title to Assets Other Than Transferred Equity Interests, Real Property and
Intellectual Property    24 SECTION 4.09. Real Property    25 SECTION 4.10.
Intellectual Property    26 SECTION 4.11. Contracts    27

 

i

--------------------------------------------------------------------------------

    

Page

SECTION 4.12. Permits    30 SECTION 4.13. Litigation    30 SECTION 4.14. Benefit
Plans    31 SECTION 4.15. Absence of Changes or Events    33 SECTION 4.16.
Compliance with Applicable Laws    33 SECTION 4.17. Environmental Matters    34
SECTION 4.18. Employee and Labor Matters    34 SECTION 4.19. Sufficiency of
Assets    35 SECTION 4.20. Insurance    35 SECTION 4.21. DISCLAIMER    36
ARTICLE V    Covenants of Seller    SECTION 5.01. Access    36 SECTION 5.02.
Ordinary Conduct    37 SECTION 5.03. Intercompany Arrangements and Accounts   
40 SECTION 5.04. Resignations    40 SECTION 5.05. Confidentiality    40 SECTION
5.06. Non-Competition    41 SECTION 5.07. Non-Solicitation; No Hire or Employ   
42 SECTION 5.08. Financial Statements    42 SECTION 5.09. Financing Related
Cooperation    42 SECTION 5.10. Enforcement of Confidentiality Agreements    43
ARTICLE VI    Representations and Warranties of Purchaser    SECTION 6.01.
Organization, Standing and Authority; Execution and Delivery; Enforceability   
44 SECTION 6.02. No Conflicts; Consents    44 SECTION 6.03. Actions and
Proceedings    45 SECTION 6.04. Securities Act    45 SECTION 6.05. Financing   
45 SECTION 6.06. Activities of Purchaser    46 SECTION 6.07. Solvency    46
SECTION 6.08. Going Concern    46 SECTION 6.09. Sponsor Guarantee    46 SECTION
6.10. Exclusivity of Representations    46

 

ii

--------------------------------------------------------------------------------

    

Page

ARTICLE VII    Covenants of Purchaser    SECTION 7.01. Confidentiality    47
SECTION 7.02. No Additional Representations    47 SECTION 7.03. No Use of
Certain Names; Transitional License    48 SECTION 7.04. FDA Reporting; NDC    49
SECTION 7.05. Litigation Matters    49 SECTION 7.06. Bulk Transfer Laws    50
SECTION 7.07. Recordation of Transfer of Intellectual Property    50 SECTION
7.08. Debt Financing    50 SECTION 7.09. Benefits and Payroll Transition    51
SECTION 7.10. Joint Tender Contracts    52 ARTICLE VIII    Mutual Covenants   
SECTION 8.01. Consents    52 SECTION 8.02. Transition; Cooperation    52 SECTION
8.03. Publicity    54 SECTION 8.04. Reasonable Best Efforts    54 SECTION 8.05.
Antitrust Notification and Other Regulatory Filings    54 SECTION 8.06. Support
Services    55 SECTION 8.07. Tax Matters    55 SECTION 8.08. Customer Databases
   58 SECTION 8.09. Treasury, Payroll and Employee Benefit Transitional Services
   59 ARTICLE IX    Employee Matters   

SECTION 9.01. Employees; Assumption of Terms and Conditions of Employment;
Continuation of Employment; General Principles

   60 SECTION 9.02. Assumption of Liabilities    63 SECTION 9.03. Independent
Contractors    65 SECTION 9.04. Credited Service    65 SECTION 9.05.
Continuation of Compensation and Benefits    66 SECTION 9.06. U.S. and Puerto
Rico Savings and Investment Plans; Vesting    67 SECTION 9.07. U.S. Medical and
Dental Plans    68 SECTION 9.08. U.S. Short-Term Disability and Long-Term
Disability    70 SECTION 9.09. U.S. Life and Accident Insurance    70 SECTION
9.10. Performance Bonuses    71 SECTION 9.11. Relocation Benefits    71

 

iii

--------------------------------------------------------------------------------

    

Page

SECTION 9.12. Vacation Benefits    71 SECTION 9.13. Employment and Other
Agreements    72 SECTION 9.14. Retention Arrangements    72 SECTION 9.15. Other
Programs and Benefits    72 SECTION 9.16. U.S. WARN Act and Other Notices    72
SECTION 9.17. Special Provisions for Foreign Transferred Employees    72 SECTION
9.18. Personnel Records    73 SECTION 9.19. No Third Party Remedies    74
SECTION 9.20. Cooperation    74 ARTICLE X    Indemnification    SECTION 10.01.
Indemnification by Seller    74 SECTION 10.02. Indemnification by Purchaser   
76 SECTION 10.03. Tax Indemnification    76 SECTION 10.04. Limitations on
Liability; Cooperation    77 SECTION 10.05. Indemnity Net; Losses Net of
Insurance, Etc    77 SECTION 10.06. Termination of Indemnification    78 SECTION
10.07. Procedures Relating to Indemnification for Third Party Claims    78
SECTION 10.08. Procedures Related to Indemnification for Other Claims    80
SECTION 10.09. Procedures Relating to Indemnification of Tax Claims    80
ARTICLE XI    Termination    SECTION 11.01. Termination    81 SECTION 11.02.
Return of Confidential Information    81 SECTION 11.03. Consequences of
Termination    82 ARTICLE XII    Miscellaneous    SECTION 12.01. Assignment   
82 SECTION 12.02. No Third-Party Beneficiaries    83 SECTION 12.03. Expenses   
83 SECTION 12.04. Attorney Fees    83 SECTION 12.05. Amendments    83 SECTION
12.06. Notices    83 SECTION 12.07. Interpretation; Exhibits and Seller
Disclosure Schedule; Certain Definitions    84 SECTION 12.08. Counterparts    97
SECTION 12.09. Entire Agreement    97

 

iv

--------------------------------------------------------------------------------

    

Page

SECTION 12.10. Fees    97 SECTION 12.11. Severability    97 SECTION 12.12.
Enforcement    98 SECTION 12.13. Consent to Jurisdiction    98 SECTION 12.14.
Waiver of Jury Trial    98 SECTION 12.15. GOVERNING LAW    99

 

Exhibit A    Form of International Asset Purchase Agreement Exhibit B    Form of
International Stock Purchase Agreement Exhibit C    Form of Transitional
Services Agreement Exhibit D    Form of Technology License Agreement Exhibit E
   2007 Balance Sheet Working Capital Amount Exhibit F    Form of Plastibase
License Agreement Exhibit G    Form of Plastibase Supply Agreement Exhibit H   
Form of Plastibase Trademark License Agreement Exhibit I    Form of ITO Services
Agreement

 

v

--------------------------------------------------------------------------------

STOCK AND ASSET PURCHASE AGREEMENT dated as of May 2, 2008 (this “Agreement”),
between BRISTOL-MYERS SQUIBB COMPANY, a Delaware corporation (“Seller”), and
CIDRON HEALTHCARE LIMITED, a Jersey limited company (“Purchaser”).

Seller desires to sell, and Purchaser desires to purchase, the ConvaTec business
of Seller, the Selling Affiliates (such term and each other defined term used
but not otherwise defined in this Agreement having the meaning given it in
Section 12.07(b)) and the Transferred Entities, as conducted on the date hereof
consisting of (i) the manufacture, distribution, marketing and sale of the
Products (and any other products resulting from the research, development,
products design and related activities described in clause (ii) below) and
(ii) the research, development, products design and related activities of
Seller, the Selling Affiliates and the Transferred Entities to the extent
related solely to the Products and such other wound and professional skin care
products for wound care (excluding any pharmaceutical, over-the-counter or other
dermatological or skin care products manufactured, distributed, marketed or sold
in connection with any business of Seller and its controlled Affiliates other
than the ConvaTec business) and related supplies and accessories, ostomy systems
and devices and related supplies and accessories and acute fecal incontinence
systems and devices and related supplies and accessories (including, in each
case, any adjacent technologies) as are in development as of the date hereof or
on the Closing Date (the “Business”).

Seller or a Selling Affiliate is the direct owner of the equity interests set
forth opposite its name in each of the entities set forth above Seller or such
Selling Affiliate’s name in Section B of the Seller Disclosure Schedule (such
entities are collectively referred to as the “Purchased Companies” and such
equity interests are collectively referred to as the “Purchased Companies’
Equity Interests”).

Each applicable Purchased Company is directly the owner of the equity interests
set forth opposite its name in each of the entities listed above such Purchased
Company’s name in Section B of the Seller Disclosure Schedule (such entities are
collectively referred to as the “Purchased Company Subsidiaries” and such equity
interests are collectively referred to as the “Purchased Company Subsidiaries’
Equity Interests”).

Seller, the Selling Affiliates, the Purchased Companies and the Purchased
Company Subsidiaries conduct the Business (the Purchased Companies and the
Purchased Company Subsidiaries are collectively referred to as the “Transferred
Entities”).

At the Closing, upon the terms and subject to the conditions set forth in this
Agreement, Seller and each of the Selling Affiliates desire to sell and transfer
to Purchaser, and Purchaser desires to purchase and accept from Seller and the
Selling Affiliates, the Purchased Companies’ Equity Interests, the Acquired
Assets and the Acquired Liabilities (the “Acquisition”).

Immediately after the Closing, Purchaser will (a) directly or indirectly own the
Purchased Companies’ Equity Interests and the Acquired Assets, (b) be
responsible for the Assumed Liabilities and (c) indirectly own the Purchased
Company Subsidiaries’ Equity Interests (the Purchased Companies’ Equity
Interests and the Purchased Company Subsidiaries’ Equity Interests are
collectively referred to as the “Transferred Equity Interests”).

 

--------------------------------------------------------------------------------

Accordingly, the parties hereby agree as follows:

ARTICLE I

Purchase and Sale of the Purchased Companies’ Equity Interests and the Acquired
Assets

SECTION 1.01. Purchase and Sale. (a) Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller shall, and shall
cause the Selling Affiliates to, sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser shall purchase, acquire and accept from Seller and the
Selling Affiliates all the right, title and interest of Seller and the Selling
Affiliates in, to and under the Purchased Companies’ Equity Interests and the
Acquired Assets for (i) the Purchase Price, payable and subject to adjustment as
set forth in Article II, and (ii) Purchaser’s assumption of the Acquired
Liabilities and its agreement to cause all Assumed Liabilities (including
Assumed Liabilities that are not Acquired Liabilities) to be paid, performed and
discharged when due, in each case in a manner consistent with Section 1.03 and
without further recourse to Seller or its Affiliates (other than the Transferred
Entities).

(b) The sale, transfer, assignment and delivery of the International Acquired
Assets and the assumption of the International Assumed Liabilities of each
International Selling Affiliate will be effected pursuant to a short-form asset
purchase agreement (each, an “International Asset Purchase Agreement”). Each
International Asset Purchase Agreement shall be in substantially the same form
as the form of International Asset Purchase Agreement attached as Exhibit A,
except (as Purchaser and Seller shall reasonably agree) for (i) the deletion of
provisions which are inapplicable to such Selling Affiliate, or the
International Acquired Assets and the International Assumed Liabilities covered
by such International Asset Purchase Agreement, (ii) such changes as may be
necessary to satisfy the requirements of applicable local Law, (iii) such
changes as may be reasonably agreed upon by Seller and Purchaser regarding
employees and employee benefits matters in order to adapt such International
Asset Purchase Agreement to the particular circumstances of the relevant Selling
Affiliate and country; provided that such changes shall be consistent with the
principles underlying the corresponding provisions of this Agreement and
(iv) such other changes as may be reasonably agreed by Seller and Purchaser.

(c) The purchase and sale of the International Transferred Shares of each
International Purchased Company will be effected, if required under applicable
Law, pursuant to a short-form stock purchase agreement (each, an “International
Stock Purchase Agreement”) in substantially the same form as the form of
International Stock Purchase Agreement attached as Exhibit B, except (as
Purchaser and Seller shall reasonably agree) for (i) the deletion of provisions
which are inapplicable to the relevant Selling Affiliate or Transferred Equity
Interests, (ii) such changes as may be necessary to satisfy the requirements of
applicable local Law, (iii) such changes as may be reasonably agreed upon by
Seller and Purchaser regarding employees and employee benefits matters in order
to adapt such agreement to the particular circumstances of the relevant Selling
Affiliate, Transferred Entity and country or countries in which they operate;
provided that such changes shall be consistent with the principles underlying
the corresponding provisions of this Agreement and (iv) such other changes as
may be reasonably agreed by Seller and Purchaser.

 

2

--------------------------------------------------------------------------------

(d) Upon the terms and subject to the conditions set forth in this Agreement,
between the date hereof and immediately prior to the Closing, at Seller’s sole
cost and expense, Seller shall, and shall cause its Affiliates (including the
Transferred Entities) to, make such contributions, transfers, assignments and
acceptances, such that, upon the consummation of such contributions, transfers,
assignments and acceptances, Seller or its designees shall own the Excluded
Assets and shall be solely responsible for the Excluded Liabilities, without
further recourse to or any Liability of Purchaser or its Affiliates (including
any Transferred Entity); provided that Seller shall provide Purchaser with
notice and a description with reasonable particularity of any material
contributions, transfers, assignments and acceptances. In furtherance of the
foregoing, (i) Seller shall retain, and neither Purchaser nor any of its
Affiliates (including any Transferred Entity) shall acquire, and no Transferred
Entity shall retain, any interest in the Excluded Assets and (ii) Seller shall
retain, and neither Purchaser nor any of its Affiliates (including any
Transferred Entity) shall assume, and no Transferred Entity shall retain, any
Excluded Liability.

SECTION 1.02. Acquired Assets. (a) The term “Acquired Assets” means all of
Seller’s and the Selling Affiliates’ right, title and interest in, to and under
those certain assets set forth below:

(i) (A) the fee-owned real property, leaseholds, subleaseholds and other
interests in real property of Seller and the Selling Affiliates that are used
solely in, or that relate solely to, the operation or conduct of the Business,
including the real property, leaseholds, sublease holds and other interests
listed in Section 1.02(a)(i)(A) of the Seller Disclosure Schedule, in each case
together with the right, title and interest in all buildings, improvements and
fixtures thereon and all other appurtenances thereto (the “Transferred Real
Property”) and (B) all Contracts (including any options to purchase or renew any
Transferred Real Property) relating solely to the Transferred Real Property to
which Seller or any such Selling Affiliate is a party or by which the
Transferred Real Property is bound, including those set forth in
Section 1.02(a)(i)(B) of the Seller Disclosure Schedule (the “Transferred Real
Property Contracts”);

(ii) all tangible personal property and interests therein, including machinery,
equipment, furnishings and vehicles (“Personal Property”), of Seller and the
Selling Affiliates listed in Section 1.02(a)(ii) of the Seller Disclosure
Schedule and all other Personal Property that on the Closing Date is located on
the Transferred Real Property (including all laptops, desktops and associated
computer hardware, including any external storage devices and storage media,
held by Seller or the Selling Affiliates that on the Closing Date are used
solely in the operation or conduct of the Business), and all other Personal
Property of Seller and the Selling Affiliates that on the Closing Date is used
or held for use solely in the operation or conduct of the Business, in each case
excluding the Excluded Personal Property (the “Transferred Personal Property”);

(iii) the following Intellectual Property (the “Transferred Intellectual
Property”):

(A) the Patents of Seller and the Selling Affiliates used solely in the
operation or conduct of the Business, including those identified in
Section 1.02(a)(iii)(A) of the Seller Disclosure Schedule;

 

3

--------------------------------------------------------------------------------

(B) the Trademarks of Seller and the Selling Affiliates used solely in the
operation or conduct of the Business, including those identified in
Section 1.02(a)(iii)(B) of the Seller Disclosure Schedule;

(C) the Copyrights of Seller and the Selling Affiliates used solely in the
operation or conduct of the Business, including those identified in
Section 1.02(a)(iii)(C) of the Seller Disclosure Schedule;

(D) all Unregistered Intellectual Property of Seller and the Selling Affiliates
that is used solely in the operation or conduct of the Business; and

(E) all Technology of Seller and the Selling Affiliates that is used solely in,
or that arises solely out of, the operation or conduct of the Business,
including the Technology identified in Section 1.02(a)(iii)(E) of the Seller
Disclosure Schedule, to the extent transferable in light of practical (but not
legal or contractual) considerations;

(iv) all Inventory of Seller and the Selling Affiliates that is used or held for
use solely in, or that arises solely out of, the operation or conduct of the
Business (collectively, the “Transferred Inventory”);

(v) all Accounts Receivable of Seller and the Selling Affiliates to the extent
arising solely out of the operation or conduct of the Business (the “Transferred
Accounts Receivable”);

(vi) all credits, prepaid expenses, deferred charges, deposits and prepaid items
(including any prepaid rents and security deposits related to Transferred Real
Property) (“Miscellaneous Rights”) of Seller and the Selling Affiliates that are
used solely in, or that arise solely out of, the operation or conduct of the
Business (the “Transferred Miscellaneous Rights”);

(vii) all contracts, leases or subleases, indentures, licenses, agreements,
commitments, and all other legally binding arrangements, whether written or oral
(each, a “Contract”), other than Transferred Real Property Contracts, to which
Seller or any of the Selling Affiliates is a party or by which any Acquired
Asset is bound that are used solely in, or that relate solely to, the operation
or conduct of the Business, including the Contracts set forth in Section 4.11(a)
of the Seller Disclosure Schedule (the “Transferred Contracts”);

(viii) the Cash and other assets of the Benefit Plans expressly required to be
transferred to Purchaser pursuant to Article IX, or of the Benefit Plans
sponsored or maintained by any Transferred Entity and whose assets are held by
such Transferred Entity (the “Transferred Plan Assets”);

 

4

--------------------------------------------------------------------------------

(ix) all Permits of Seller and the Selling Affiliates that are used solely in
the operation or conduct of the Business (the “Transferred Permits”);

(x) all Environmental Permits of Seller and the Selling Affiliates that are used
solely in the operation or conduct of the Business (other than the Excluded
Environmental Permits listed on Section 4.17(ii) of the Seller Disclosure
Schedule and identified under the heading “Excluded Environmental Permits”) (the
“Transferred Environmental Permits”);

(xi) all rights, claims, counter-claims, defenses and credits, including and in
respect of all guarantees, warranties, indemnities and similar rights (“Other
Rights”), in favor of Seller and the Selling Affiliates, to the extent relating
solely to the Business or solely to any Assumed Liability (the “Transferred
Other Rights”);

(xii) all books of account, ledgers, general, financial and accounting records,
files, invoices, customers’ and suppliers’ lists, other distribution lists,
billing records, sales and promotional literature, manuals, laboratory books,
batch records and stability studies, preclinical, clinical and marketing studies
and customer and supplier correspondence and all other historical records and
data (in all cases, in any form or medium) (“Records”) of Seller and the Selling
Affiliates that are used solely in, or that arise solely out of, the operation
or conduct of the Business in each case to the extent transferable in light of
legal and practical considerations (the “Transferred Records”);

(xiii) all goodwill to the extent solely related to the Business, the Acquired
Assets, the Transferred Entities, the Brands and the Products;

(xiv) to the fullest extent permitted by applicable Law, all Personnel Records
(or copies of Personnel Records) of the Transferred Employees; and

(xv) all other assets used solely in the operation or conduct of the Business
and not enumerated in clauses (i) through (xiv) above.

Notwithstanding anything to the contrary set forth herein, the Acquired Assets
shall not include (i) any properties, assets, goodwill and rights of Seller and
its Affiliates of whatever kind and nature, real, personal or mixed, tangible or
intangible that are not used solely in, or that do not arise solely out of, the
operation or conduct of the Business, including the BMS Names or (ii) any
Excluded Assets.

(b) The term “Excluded Assets” means:

(i) all Cash of Seller and its Affiliates (other than the Transferred Entities);

(ii) all Accounts Receivable other than the Transferred Accounts Receivable;

(iii) all Cash and other assets of or relating to any employee benefit plan,
program or arrangement or related trust in which any employees of Seller or its
Affiliates participate (including the Benefit Plans and related trusts), other
than the Transferred Plan Assets;

 

5

--------------------------------------------------------------------------------

(iv) all Other Rights of Seller or any of its Affiliates to the extent relating
to any Excluded Asset or any Excluded Liability, including any such Other Rights
arising under insurance policies in favor of Seller and its Affiliates in
respect of any other Excluded Asset or any Excluded Liability;

(v) any refund or credit of Taxes attributable to any Pre-Closing Tax Period;

(vi) all insurance policies and insurance contracts insuring the Business, the
Acquired Assets or the Transferred Entities, together with any claim, action or
other right Seller or any of its Affiliates may have for insurance coverage
under any past and present policies and insurance contracts insuring the
Business, the Acquired Assets or the Transferred Entities, in each case
including any proceeds received from any such policy or contract prior to, on or
after the Closing Date;

(vii) any assets used by Seller or any of its Affiliates (other than those owned
by the Transferred Entities) to provide services to Purchaser and its Affiliates
pursuant to the Transitional Services Agreement; provided that following the
termination of the Transitional Services Agreement, any such assets that would
be Acquired Assets but for this Section 1.02(b)(vii) shall be deemed thereafter
to be Acquired Assets and shall be transferred to Purchaser;

(viii) all rights of Seller and its Affiliates under this Agreement and the
other agreements and instruments executed and delivered in connection with this
Agreement;

(ix) the Personal Property listed on Section 1.02(b)(ix) of the Seller
Disclosure Schedule (the “Excluded Personal Property”);

(x) all proprietary materials used for Seller’s and its Affiliates’ human
resource program and supporting documentation thereto; and

(xi) the following Records:

(A) Records to the extent relating to any Excluded Asset or Excluded Liability;

(B) original Tax Returns or work papers relating to Tax;

(C) copies of Tax Returns or work papers relating to Tax to the extent they do
not relate to the Acquired Assets or the Assumed Liabilities;

(D) Records prepared in connection with the transactions contemplated by this
Agreement, including bids received from other parties and analyses relating to
the Business; and

(E) file copies of the Records retained by Seller.

(c) To the extent that (i) Technology of Seller and the Selling Affiliates is
not Transferred Intellectual Property solely to the extent it is not transferred
to Purchaser pursuant to

 

6

--------------------------------------------------------------------------------

Section 1.02(a)(iii)(E) due to practical considerations, Seller shall not, and
shall cause its Affiliates not to, object to Purchaser or its Affiliates use of
such Technology or (ii) Records of Seller and the Selling Affiliates are not
Transferred Records solely to the extent it is not transferred to Purchaser
pursuant to Section 1.02(a)(xii) due to legal or practical considerations, upon
Purchaser’s request, Seller shall, or shall cause its Affiliates to, provide
Purchaser reasonable access to such Records to the extent permitted under
applicable Law.

SECTION 1.03. Assumed Liabilities. (a) Upon the terms and subject to the
conditions of this Agreement, Purchaser shall (i) from and after the Closing
cause the Transferred Entities to pay, perform and discharge when due, any and
all of their liabilities, obligations and commitments of whatever kind and
nature, primary or secondary, direct or indirect, absolute or contingent, known
or unknown, whether or not accrued (collectively, “Liabilities”) and
(ii) assume, effective as of the Closing, and from and after the Closing
Purchaser shall pay, perform and discharge, or cause to be paid, performed and
discharged when due, all of the following Liabilities of Seller and its
Affiliates (other than the Transferred Entities), excluding the Excluded
Liabilities (all the foregoing, collectively, the “Assumed Liabilities”), in
each case, except to the extent (and only to the extent) provided in Article X,
without further recourse to Seller or its Affiliates (other than the Transferred
Entities):

(i) all Liabilities to the extent (and only to the extent) arising out of or
relating to Seller and its Affiliates (including the Transferred Entities) at
any time being the owner or occupant of, or the operator of the activities
conducted at, any Owned Property or any Leased Property, whether arising prior
to, on or after the Closing Date;

(ii) all Environmental Liabilities to the extent (and only to the extent)
arising out of or relating to the operation or conduct of the Business, the
Transferred Entities or the Acquired Assets or the ownership, sale or lease of
any of the Acquired Assets or the ownership or sale of the Transferred Entities,
whether arising prior to, on or after the Closing Date;

(iii) all Liabilities under or otherwise to the extent (and only to the extent)
arising out of or relating to the Transferred Real Property Contracts or the
Transferred Contracts or any Contract to which a Transferred Entity is a party
or by which its assets are bound (including all Liabilities arising out of or
relating to any termination or announcement or notification of an intent to
terminate any such Contract), whether arising prior to, on or after the Closing
Date;

(iv) all Accounts Payable to the extent (and only to the extent) arising out of
or relating to the operation or conduct of the Business, the Transferred
Entities or the Acquired Assets or the ownership, sale or lease of any of the
Acquired Assets or the ownership or sale of the Transferred Entities, whether
arising prior to, on or after the Closing Date (the “Assumed Accounts Payable”);

(v) all Liabilities under or otherwise to the extent (and only to the extent)
arising out of or relating to the Transferred Permits, the Transferred
Environmental Permits or any Permit or Environmental Permit held by a
Transferred Entity, whether arising prior to, on or after the Closing Date;

 

7

--------------------------------------------------------------------------------

(vi) all Liabilities in respect of any lawsuits, claims, actions or proceedings
to the extent (and only to the extent) arising out of or relating to the
operation or conduct of the Business, the Transferred Entities or the Acquired
Assets or the ownership, sale or lease of any of the Acquired Assets or the
ownership or sale of the Transferred Entities, whether arising prior to, on or
after the Closing Date (including any Liabilities to the extent (and only to the
extent) relating to any product liability, consumer protection, consumer fraud,
breach of warranty or similar claim for injury to person or property, but
excluding the Retained Litigation Liabilities);

(vii) all Liabilities to the extent (and only to the extent) arising out of or
relating to the return (including any return based on breach of warranty) of, or
refund, adjustment, allowance, rebate or exchange in respect of, the Products or
any other products marketed and/or sold under the Brands, whether arising prior
to, on or after the Closing Date;

(viii) all Taxes to the extent (and only to the extent) arising out of, relating
to or in respect of the Acquired Assets for any Post-Closing Tax Period other
than Taxes for which Seller is liable under Section 10.03(a);

(ix) all Liabilities (other than any Liabilities to the extent (and only to the
extent) arising out of or relating to exposure prior to, on or after the Closing
of any Business Employee, Former Business Employee, Transferred Employee or
former employee or independent contractor of the Transferred Entities or the
Business to Hazardous Materials) to the extent (and only to the extent) arising
out of or relating to employment, compensation, employee benefits, severance or
termination of any Business Employee, Former Business Employee or Transferred
Employee and their respective dependents and beneficiaries, whether arising
prior to, on or after the Closing Date and including any Liabilities that
Purchaser is expressly required to assume under Article IX, except any
Liabilities that Seller is expressly required to retain under Article IX;

(x) all Liabilities to the extent (and only to the extent) arising from the sale
from and after the Closing of (i) Products or (ii) any other products
incorporating the Brands, in each case as a result of such Products or other
products bearing the Seller’s National Drug Code number; and

(xi) all other Liabilities of whatever kind and nature, primary or secondary,
direct or indirect, absolute or contingent, known or unknown, whether or not
accrued, to the extent (and only to the extent) arising out of or relating to
the operation or conduct of the Business, the Transferred Entities or the
Acquired Assets or the ownership, sale or lease of any of the Acquired Assets or
the ownership or sale of the Transferred Entities, whether arising prior to, on
or after the Closing Date, including any Liabilities arising out of or relating
to any claim, action, suit, arbitration, inquiry, proceeding or investigation by
or before any Governmental Entity.

(b) Notwithstanding any other provision of this Agreement, Purchaser shall not
assume any Excluded Liability, each of which shall be retained and paid,
performed and discharged when due by Seller and its Affiliates (other than the
Transferred Entities). The term “Excluded Liability” means the following
Liabilities of Seller and its Affiliates (other than the Transferred Entities):

(i) all Liabilities to the extent (and only to the extent) arising out of or
relating to any Excluded Asset;

 

8

--------------------------------------------------------------------------------

(ii) any Tax (A) to the extent (and only to the extent) arising out of, relating
to or in respect of the Acquired Assets for any Pre-Closing Tax Period or (B) of
Seller or any Selling Affiliates, other than any Tax for which Purchaser is
responsible pursuant to Section 10.03(b);

(iii) any Liabilities to the extent (and only to the extent) arising out of or
relating to the litigation identified on Section 1.03(b)(iii) of the Seller
Disclosure Schedule (the “Retained Litigation Liabilities”);

(iv) any Indebtedness of Seller or any Selling Affiliate; and

(v) all Liabilities that Seller is expressly required to retain under Article
IX.

(c) Each of Purchaser’s and Seller’s obligations under this Section 1.03 (and
related rights to indemnification under Article X) shall not be subject to
offset or reduction by reason of any actual or alleged breach of any
representation, warranty or covenant contained in this Agreement or any Other
Transaction Document or any right or alleged right to indemnification hereunder.
It is expressly understood and agreed that notwithstanding the foregoing or
anything in this Agreement or in any Other Transaction Document to the contrary,
the parties’ right to indemnification under Article X or elsewhere in this
Agreement or in any Other Transaction Document shall in no way be limited,
impaired or superceded because a Liability that gives rise to a claim for
indemnification under Article X or elsewhere in this Agreement or in any Other
Transaction Document may otherwise constitute an Assumed Liability or a Retained
Liability, as the case may be, and that Purchaser or Seller, as the case may be,
shall be entitled to pursue all rights and remedies in respect of any such
Liability as set forth in this Agreement or any applicable Other Transaction
Document.

SECTION 1.04. Risk of Loss. Until the Closing, any loss of or damage to the
assets of the Transferred Entities or the Acquired Assets from fire, casualty or
any other occurrence shall be the sole responsibility of Seller or the Selling
Affiliates, as applicable. At the Closing, title to the Purchased Companies’
Equity Interests and the Acquired Assets shall be transferred to Purchaser, and
Purchaser shall thereafter bear all risk of loss associated with the assets of
the Transferred Entities and the Acquired Assets and be solely responsible for
procuring adequate insurance to protect the assets of the Transferred Entities
and the Acquired Assets against any such loss.

SECTION 1.05. Consents of Third Parties. (a) Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign, directly or indirectly, any asset (including any Contract, Permit or
Environmental Permit), claim or right, or any benefit arising under or resulting
from such asset, claim or right, if an attempted direct or indirect assignment
thereof, without the consent of a third party, would constitute a breach or
other contravention of the rights of such third party, would be ineffective with
respect to any

 

9

--------------------------------------------------------------------------------

party to an agreement concerning such asset, claim or right or would in any way
adversely affect the contractual rights of Seller, any Selling Affiliate or the
Transferred Entities or, upon transfer, Purchaser under such asset, claim or
right. If any direct or indirect transfer or assignment by Seller, any Selling
Affiliate or any Transferred Entity to, or any direct or indirect assumption by
Purchaser of, any interest in, or liability, obligation or commitment under, any
asset, claim or right requires the consent of a third party, then such transfer,
assignment or assumption shall be made subject to such consent being obtained.

(b) If any such consent referred to in Section 1.05(a) (including any such
consent necessary or required in order for Seller and its Affiliates to comply
with and be able to perform in accordance with the terms of the Transitional
Services Agreement and any consent required by any Governmental Entity to the
transfer of Business Employees to Purchaser or an Affiliate of Purchaser) is not
obtained prior to the Closing, the Closing shall nonetheless take place and,
thereafter, Seller and the Selling Affiliates, on the one hand, and Purchaser,
on the other hand, shall cooperate in any lawful and reasonable arrangement
reasonably proposed by Purchaser (not including the payment of any
consideration) under which Purchaser shall obtain the economic claims, rights
and benefits under, and shall bear all the costs, liabilities and burdens with
respect to, the asset, claim or right with respect to which the consent has not
been obtained in accordance with this Agreement; provided that Purchaser shall
pay or satisfy all the costs, expenses, obligations and liabilities incurred by
Seller or the Selling Affiliates in connection with any such alternative
arrangements (other than legal fees incurred by Seller and the Selling
Affiliates in connection with documenting and negotiating such arrangement,
which shall be borne by Seller). This Section 1.05(b) does not relate to the
transfer of Permits and Environmental Permits, which are addressed solely by
Section 8.02(c).

SECTION 1.06. Refunds and Remittances. (a) Received by Seller or the Selling
Affiliates. After the Closing, if Seller or any of its Affiliates receives
(i) any refund or other amount which is an Acquired Asset or is otherwise
properly due and owing to Purchaser or any of its Affiliates (including the
Transferred Entities) in accordance with the terms of this Agreement or (ii) any
refund or other amount which is related to claims or other matters for which
Purchaser or any of its Affiliates (including the Transferred Entities) is
responsible hereunder, and which amount is not an Excluded Asset, or is
otherwise properly due and owing to Purchaser or any of its Affiliates
(including the Transferred Entities) in accordance with the terms of this
Agreement, Seller promptly shall remit, or shall cause to be remitted, such
amount to Purchaser at the address set forth in Section 12.06(a).

(b) Received by Purchaser or its Affiliates. After the Closing, if Purchaser or
any of its Affiliates receives (i) any refund or other amount which is an
Excluded Asset or is otherwise properly due and owing to Seller or any of the
Selling Affiliates in accordance with the terms of this Agreement or (ii) any
refund or other amount which is related to claims or other matters for which
Seller is responsible hereunder, and which amount is not an Acquired Asset, or
is otherwise properly due and owing to Seller or any of the Selling Affiliates
in accordance with the terms of this Agreement, Purchaser promptly shall remit,
or shall cause to be remitted, such amount to Seller at the address set forth in
Section 12.06(b).

 

10

--------------------------------------------------------------------------------

ARTICLE II

Closing; Purchase Price Adjustment

SECTION 2.01. Closing. (a) The closing of the Acquisition (the “Closing”) shall
be held at the offices of Cravath, Swaine & Moore LLP, Worldwide Plaza, 825
Eighth Avenue, New York, New York, at 10:00 a.m., New York City time, on the
date specified by the parties, which shall be no later than the third
(3rd) business day following the satisfaction (or, to the extent permitted by
applicable Law, waiver) of the conditions set forth in Article III (other than
satisfaction or, to the extent permitted by applicable Law, waiver of conditions
that by their nature are to be satisfied at Closing, it being understood that
the occurrence of the Closing shall remain subject to the delivery of such items
and the satisfaction or, to the extent permitted by applicable Law, waiver of
such conditions at the Closing), or at such other place, time and date as shall
be agreed between Purchaser and Seller. The date on which the Closing takes
place is referred to in this Agreement as the “Closing Date”. The Closing shall
be deemed to be effective as of 12:01 a.m. on the Closing Date; provided that
with respect to determining Closing Working Capital, Retained Cash and Closing
Indebtedness, the Closing in each legal jurisdiction shall be deemed to be
effective as of 12:01 a.m. in such jurisdiction on the Closing Date.

(b) At the Closing, Seller shall deliver or cause to be delivered to Purchaser:

(i) a certificate or certificates representing the Purchased Companies’ Equity
Interests, duly endorsed by Seller or the applicable Selling Affiliate for
transfer to Purchaser (or one or more wholly-owned subsidiaries of Purchaser),
with appropriate transfer stamps, if any, affixed, and its counterpart of each
International Stock Purchase Agreement for each International Purchased Company,
duly executed by an authorized officer of Seller or the applicable Selling
Affiliate;

(ii) such instruments of sale, assignment, transfer and conveyance (including a
counterpart of each International Asset Purchase Agreement) as may be reasonably
requested by Purchaser (or one or more wholly-owned subsidiaries of Purchaser)
to effect or evidence the transfer of the Acquired Assets and the Assumed
Liabilities to Purchaser, in each case duly executed by an authorized officer of
Seller or the applicable Selling Affiliate;

(iii) a counterpart of each IP Assignment Document, duly executed by an
authorized officer of Seller or the applicable Selling Affiliate;

(iv) a counterpart of the Transitional Services Agreement, duly executed by an
authorized officer of Seller;

(v) a counterpart of the Technology License Agreement, duly executed by an
authorized officer of Seller;

(vi) a counterpart of the Plastibase License Agreement, duly executed by an
authorized officer of Seller;

 

11

--------------------------------------------------------------------------------

(vii) a counterpart of the Plastibase Supply Agreement, duly executed by an
authorized officer of Seller;

(viii) a counterpart of the Plastibase Trademark License Agreement, duly
executed by an authorized officer of Seller;

(ix) a counterpart of the ITO Services Agreement, duly executed by an authorized
officer of Seller; and

(x) the certificate required to be delivered under Section 3.01(a); and

(xi) all stock record books and minute books of each of the Transferred Entities
to the extent not in the possession of any such Transferred Entity.

(c) At the Closing, Purchaser shall deliver or cause to be delivered to Seller:

(i) by wire transfer to a bank account or accounts designated in writing by
Seller at least two (2) business days prior to the Closing Date, immediately
available funds in an amount equal to the Purchase Price plus or minus an
estimate, prepared by Seller in good faith and delivered to Purchaser at least
two (2) business days prior to the Closing Date, of any adjustment to the
Purchase Price under Section 2.02(c) (the Purchase Price plus or minus such
estimate of any such adjustment under Section 2.02(c) is hereinafter referred to
as the “Closing Date Amount”);

(ii) a counterpart of each International Stock Purchase Agreement, duly executed
by an authorized officer of Purchaser;

(iii) such instruments of sale, assignment, transfer and conveyance (including
its counterpart of each applicable International Asset Purchase Agreement) as
Seller or the Selling Affiliates may reasonably request to effect or evidence
the purchase of the Acquired Assets and the assumption of the Acquired
Liabilities by Purchaser, in each case duly executed by an authorized officer of
Purchaser;

(iv) a counterpart of each IP Assignment Document, duly executed by an
authorized officer of Purchaser;

(v) a counterpart of the Transitional Services Agreement, duly executed by an
authorized officer of Purchaser;

(vi) a counterpart of the Technology License Agreement, duly executed by an
authorized officer of Purchaser;

(vii) a counterpart of the Plastibase License Agreement, duly executed by an
authorized officer of Purchaser;

(viii) a counterpart of the Plastibase Supply Agreement, duly executed by an
authorized officer of Purchaser;

 

12

--------------------------------------------------------------------------------

(ix) a counterpart of the Plastibase Trademark License Agreement, duly executed
by an authorized officer of Purchaser;

(x) a counterpart of the ITO Services Agreement, duly executed by an authorized
officer of Purchaser; and

(xi) the certificate required to be delivered under Section 3.02(a).

SECTION 2.02. Post-Closing Purchase Price Adjustment. (a) Within ninety
(90) days after the Closing Date, Seller shall prepare and deliver to Purchaser
a statement (the “Statement”) setting forth (i) Working Capital as of the
effective time of the Closing on the Closing Date (“Closing Working Capital”)
determined in a manner consistent and in accordance with the Working Capital
Principles, (ii) Retained Cash and (iii) Indebtedness of the Transferred
Entities as of the effective time of the Closing on the Closing Date (“Closing
Indebtedness”). For purposes of preparing the Statement, the determination of
Inventory shall be based on the amounts recorded in the books and records of the
Business as of such time in accordance with the Working Capital Principles.

(b) During the forty-five (45)-day period following Purchaser’s receipt of the
Statement, Purchaser and its independent auditors shall be permitted to review
the working papers of Seller relating to the Statement. The Statement shall
become final and binding upon the parties on the forty-fifth (45th) day
following delivery thereof, unless Purchaser gives written notice to Seller of
its disagreement with the Statement (a “Notice of Disagreement”) prior to such
date. Any Notice of Disagreement shall (i) specify in reasonable detail the
nature of any disagreement so asserted, (ii) include only disagreements based on
mathematical errors or based on Closing Working Capital not being calculated in
accordance with this Section 2.02 or Retained Cash or Closing Indebtedness not
being calculated in accordance with the provisions of this Agreement and
(iii) specify the amount that Purchaser reasonably believes is the correct
amount of the Closing Working Capital, Retained Cash and/or Closing Indebtedness
based on the disagreements set forth in the Notice of Disagreement, including a
reasonably detailed description of the adjustments applied to the Statement in
calculating such amount. If the Notice of Disagreement is received by Seller in
a timely manner, then the Statement (as revised in accordance with this
Section 2.02) shall become final and binding on the parties on the earlier of
(i) the date Seller and Purchaser resolve in writing all differences they have
with respect to the matters specified in the Notice of Disagreement and (ii) the
date all disputed matters are finally resolved in writing by the Accounting
Firm. During the forty-five (45)-day period following the delivery of a Notice
of Disagreement, Seller and Purchaser shall seek in good faith to resolve in
writing any differences that they may have with respect to the matters specified
in the Notice of Disagreement and agree on a final determination of Closing
Working Capital, Retained Cash and/or Closing Indebtedness. During such period,
Seller and its independent auditors shall be permitted to review the working
papers of Purchaser and its independent auditors relating to the Notice of
Disagreement; provided that Seller and its advisors, including its independent
auditors, shall have executed all release letters reasonably requested by
Purchaser’s independent auditors in connection therewith. At the end of such
forty-five (45)-day period, if no agreement on Closing Working Capital, Retained
Cash and Closing Indebtedness has been reached, Seller and Purchaser shall
submit to a nationally recognized independent accounting firm (the “Accounting
Firm”) for arbitration any and all matters that remain in dispute and that were
properly included

 

13

--------------------------------------------------------------------------------

in the Notice of Disagreement. The Accounting Firm shall be the New York office
of Ernst & Young LLP or, if such firm is unable or unwilling to act, such other
nationally recognized independent public accounting firm as shall be agreed upon
by the parties hereto in writing or, if the parties are unable to so agree in
writing within ten (10) days after the end of such forty-five (45)-day period,
then Purchaser and Seller shall each select such a firm and such firms shall
jointly select a third nationally recognized independent public accounting firm
to resolve the disputed matters. The parties shall jointly instruct the
Accounting Firm that it (i) shall review only the matters that were properly
included in the Notice of Disagreement and which remain in dispute, (ii) shall
make its determination in accordance with the requirements of this Section 2.02
and (iii) shall render its written decision as promptly as practicable but in no
event later than forty-five (45) days after submission to the Accounting Firm of
all matters in dispute. Judgment may be entered upon the determination of the
Accounting Firm in any court having jurisdiction over the party against which
such determination is to be enforced. The Accounting Firm’s determination shall
be accompanied by a certificate of the Accounting Firm that it reached its
decision in accordance with the provisions of this Section 2.02(b). The cost of
any arbitration (including the fees and expenses of the Accounting Firm and
reasonable attorney fees and expenses of the parties) pursuant to this
Section 2.02 shall be borne by Purchaser and Seller in inverse proportion as
they may prevail on matters resolved by the Accounting Firm, which proportionate
allocations also shall be determined by the Accounting Firm at the time the
determination of the Accounting Firm is rendered on the merits of the matters
submitted. The fees, costs and expenses of Seller incurred in connection with
its preparation of the Statement, its review of any Notice of Disagreement and
its preparation of its written brief submitted to the Accounting Firm shall be
borne by Seller, and the fees, costs and expenses of Purchaser incurred in
connection with its review of the Statement, its preparation, review and
certification of the Notice of Disagreement and its preparation of its written
brief submitted to the Accounting Firm shall be borne by Purchaser.

(c) The Purchase Price shall be (i) increased by the amount by which (A) Closing
Working Capital exceeds (B) the sum of $156,900,000 (the “2007 Balance Sheet
Working Capital Amount”) and $40,000,000 (such sum, the “Target Working
Capital”), and the Purchase Price shall be decreased by the amount by which
Closing Working Capital is less than the Target Working Capital, (ii) increased
by the amount of Retained Cash, if any, and (iii) decreased by the amount of the
Closing Indebtedness, if any. Notwithstanding the foregoing provisions of this
Section 2.02(c), no adjustment to the Purchase Price pursuant to this
Section 2.02(c) shall be made unless such adjustment would exceed $1,000,000;
provided, however, that if such payment would exceed $1,000,000, then the full
amount of such adjustment shall be made. The Purchase Price as adjusted pursuant
to this Section 2.02(c) shall hereinafter be referred to as the “Final Purchase
Price”. If the Closing Date Amount is less than the Final Purchase Price,
Purchaser shall, and if the Final Purchase Price is less than the Closing Date
Amount, Seller shall, within ten (10) business days after the Statement becomes
final and binding on the parties, make payment by wire transfer in immediately
available funds of the amount of such difference, together with interest thereon
at a rate equal to the Prime Rate from (and including) the Closing Date to (but
not including) the date of payment.

(d) The term “Working Capital” means Current Assets minus Current Liabilities.
The term “Current Assets” means without duplication (i) the receivables (net of
allowances), net inventories, prepaid expenses and other current assets of the
Transferred Entities and (ii)(A) the

 

14

--------------------------------------------------------------------------------

receivables, net of allowances, of Seller and its Affiliates arising out of or
related to the Business (but only to the extent included in the Transferred
Accounts Receivable), (B) the inventories, net of reserves of Seller and its
Affiliates arising out of or related to the Business (but only to the extent
included in Transferred Inventory), (C) the prepaid expenses of Seller and its
Affiliates arising out of or related to the Business (but only to the extent
included in the Transferred Miscellaneous Rights) and (D) the other current
assets of Seller and its Affiliates arising out of or related to the Business
(but only to the extent included in the Acquired Assets), in each case
calculated in the same manner, using the same methods and, to the extent
applicable, the same foreign currency exchange rates, as the corresponding line
item from the 2007 Balance Sheet Working Capital Amount set forth on Exhibit E
hereto. The term “Current Liabilities” means (i) the accounts payable, accrued
expenses, accrued compensation, and accrued rebates and returns of the
Transferred Entities, and (ii)(A) the accounts payable of Seller and its
Affiliates arising out of or related to the Business (but only to the extent
included in the Assumed Accounts Payable), (B) the accrued expenses of Seller
and its Affiliates arising out of or related to the Business (but only to the
extent included in the Assumed Liabilities), (C) the accrued compensation of
Seller and its Affiliates arising out of or related to the Business (but only to
the extent included in the Assumed Liabilities), and (D) the accrued rebates and
returns of Seller and its Affiliates arising out of or related to the Business
(but only to the extent included in the Assumed Liabilities), in each case
calculated in the same manner, using the same methods and, to the extent
applicable, the same foreign currency exchange rates, as the corresponding line
item from the 2007 Balance Sheet Working Capital Amount set forth on Exhibit E
hereto. For the avoidance of doubt, (i) current assets and current liabilities
relating to Cash other than Retained Cash, (ii) any assets or liabilities
related to Taxes, (iii) any assets or liabilities to the extent related to
intercompany receivables or payables, including intercompany interest, and
(iv) any liabilities related to accrued restructuring expenses shall not be
taken into account in determining Working Capital.

(e) Each line item of the Closing Working Capital (including any items excluded
from Closing Working Capital) shall be calculated in the same manner, using the
same methods and, to the extent applicable, the same foreign currency exchange
rates, as the corresponding line item of the calculation of 2007 Balance Sheet
Working Capital Amount (or item excluded from 2007 Balance Sheet Working Capital
Amount) set forth on Exhibit E hereto was calculated, whether or not doing so is
in accordance with U.S. GAAP, except as otherwise provided in Exhibit E hereto.
The foregoing principles are referred to in this Agreement as the “Working
Capital Principles”. The Purchase Price adjustment contemplated by this
Section 2.02 can only be effected as intended by the parties if the calculation
of the 2007 Balance Sheet Working Capital Amount and the Closing Working Capital
is done in the same manner, using the same methods and, to the extent
applicable, the same foreign currency exchange rates, except as otherwise
provided in Exhibit E hereto. The scope of the disputes to be resolved by the
Accounting Firm shall be limited to whether there were mathematical errors in
the Statement, whether the calculation of the Closing Working Capital was done
in accordance with the Working Capital Principles and whether Retained Cash or
Closing Indebtedness were determined in accordance with their respective
definitions, and the Accounting Firm is not to make any other determination,
including any determination as to whether U.S. GAAP was followed in calculating
the 2007 Balance Sheet Working Capital Amount, the Closing Working Capital,
Retained Cash, Closing Indebtedness or the Statement or as to whether the 2007
Balance Sheet Working Capital Amount is correct. Any determinations by the
Accounting Firm, and any

 

15

--------------------------------------------------------------------------------

work or analyses performed by the Accounting Firm in connection with its
resolution of any dispute under this Section 2.02 shall not be admissible in
evidence in any suit, action or other proceeding between the parties, other than
to the extent necessary to enforce payment obligations under Section 2.02(c).
Any items on or omissions from the 2007 Balance Sheet Working Capital Amount
that are based upon errors of fact or mathematical errors shall be carried
forward for purposes of calculating Closing Working Capital.

(f) Until the date on which the Statement shall become final and binding on the
parties pursuant to Section 2.02(b), Purchaser agrees that following the Closing
it shall preserve the accounting books and records of the Business on which the
Statement is to be based and shall not take any actions with respect to such
books and records that would obstruct, prevent or otherwise affect the
procedures or the results of the procedures set forth in this Section 2.02
(including the amount of Closing Working Capital, Retained Cash or Closing
Indebtedness or any amount included in the 2007 Balance Sheet Working Capital
Amount or the Statement or the preparation of the Statement). Without limiting
the generality of the foregoing no changes shall be made during such period in
any reserve or other account existing as of the date of the Financial
Statements, except as a result of events occurring after the date of the
Financial Statements and, in such event, only in a manner consistent with the
past practice of the Business.

(g) Until the date on which the Statement shall become final and binding on the
parties pursuant to Section 2.02(b), Purchaser agrees that following the Closing
it shall afford and cause to be afforded to Seller and any accountants, counsel
or financial advisors retained by Seller in connection with the preparation of
the Statement and any adjustment to the Purchase Price contemplated by this
Section 2.02, access upon reasonable notice during normal business hours to the
properties, books, contracts, personnel and records of the Business and
Purchaser’s and its accountant’s work papers (provided that Seller and its
advisors, including its independent auditors, have executed all release letters
reasonably requested by Purchaser’s independent auditors in connection
therewith) relevant to the preparation of the Statement and the adjustment
contemplated by this Section 2.02, including any Notice of Disagreement, and
shall provide Seller, upon Seller’s reasonable request and at Seller’s expense,
with copies of any such books, contracts, records and work papers; provided,
however, that such access shall not unreasonably disrupt the normal operations
of Purchaser, its Affiliates, the Transferred Entities or the Business.

ARTICLE III

Conditions to Closing

SECTION 3.01. Conditions to Obligations of Purchaser. The obligation of
Purchaser to effect the transactions contemplated by this Agreement is subject
to the satisfaction (or, to the extent permitted by applicable Law, waiver by
Purchaser) as of the Closing of the following conditions:

(a) Representations and Warranties; Covenants. (i) Each of the Fundamental
Representations (other than the representations and warranties contained in
Section 4.05(a)) and the representations and warranties contained in
Section 4.15(a) to the extent not qualified as to “materiality” or “Seller
Material Adverse Effect” shall be true and correct in all material respects

 

16

--------------------------------------------------------------------------------

and each of the Fundamental Representations to the extent so qualified by
“materiality” or “Seller Material Adverse Effect” or contained in
Section 4.05(a) shall be true and correct, in each case as of the effective time
of the Closing as though made as of such time except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects or true and correct, as applicable, as of such earlier date)
and (ii) all other representations and warranties of Seller made in this
Agreement shall be true and correct (without giving effect to any “materiality”,
“Seller Material Adverse Effect” or similar qualification) as of the effective
time of the Closing as though made as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct as of such
earlier date), except for breaches as to matters that, individually or in the
aggregate, would not be reasonably likely to have a Seller Material Adverse
Effect. Seller shall have performed or complied in all material respects with
all obligations and covenants required by this Agreement to be performed or
complied with by Seller by the time of the Closing. Seller shall have delivered
to Purchaser a certificate dated the Closing Date and signed by an authorized
officer of Seller confirming the foregoing.

(b) No Injunctions or Restraints. No law (including common law), statute, rule,
ordinance or regulation of a Governmental Entity (each, a “Law”), or judgment,
executive order, stipulation, decree, legally binding agreement, temporary
restraining order, preliminary or permanent injunction or other order (each, an
“Injunction”) enacted, entered, promulgated, enforced or issued by, or executed
with, any Federal, state, foreign, province, prefect, municipal or local
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority, subdivision, or instrumentality, or
any quasi-governmental or private body exercising any regulatory, taxing,
importing or other regulatory, governmental or quasi-governmental authority
(each, a “Governmental Entity”), or other legal restraint or prohibition
preventing the Acquisition shall be in effect.

(c) Antitrust Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the Acquisition under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the “HSR Act”) shall have expired or been
terminated, the European Commission shall have issued a decision under Article
6(1)(b) or 8(2) of the EC Merger Regulation (or shall be deemed to have done so
under Article 10(6) of the EC Merger Regulation) declaring the Acquisition
compatible with the EC Common Market and all other material filings and
approvals under applicable foreign merger control or competition Laws shall have
been made or obtained; provided that Seller and Purchaser agree that the
approvals listed on Schedule 3.01(c) are not material.

(d) Other Transaction Documents. Seller shall have executed and delivered to
Purchaser the Other Transaction Documents to which Seller is a party and each
Affiliate of Seller shall have executed and delivered to Purchaser the Other
Transaction Documents to which such Affiliate is specified to be a party.

(e) Withholding Tax Certificate. Seller and each Selling Affiliate shall have
delivered to Purchaser a certificate in form and substance reasonably
satisfactory to Purchaser, duly executed and acknowledged, certifying any facts
that would exempt the transactions contemplated hereby from withholding under
Section 1445 of the Code.

 

17

--------------------------------------------------------------------------------

SECTION 3.02. Conditions to Obligation of Seller. The obligation of Seller to,
or to cause its Affiliates to, effect the transactions contemplated by this
Agreement is subject to the satisfaction (or, to the extent permitted by
applicable Law, waiver by Seller) as of the Closing of the following conditions:

(a) Representations and Warranties; Covenants. The representations and
warranties of Purchaser made in this Agreement shall be true and correct
(without giving effect to any “materiality”, “Purchaser Material Adverse Effect”
or similar qualification) as of the effective time of the Closing as though made
as of such time, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct as of such earlier date), in each case
except for breaches as to matters that, individually or in the aggregate, would
not be reasonably likely to have a Purchaser Material Adverse Effect. Purchaser
shall have performed or complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with by
Purchaser by the time of the Closing. Purchaser shall have delivered to Seller a
certificate dated the Closing Date and signed by an authorized officer of
Purchaser confirming the foregoing.

(b) No Injunctions or Restraints. No Law or Injunction enacted, entered,
promulgated, enforced or issued by, or executed with, any Governmental Entity,
or other legal restraint or prohibition preventing the Acquisition, shall be in
effect.

(c) Antitrust Approvals. The waiting period (and any extension thereof)
applicable to the consummation of the Acquisition under the HSR Act shall have
expired or been terminated, the European Commission shall have issued a decision
under Article 6(1)(b) or 8(2) of the EC Merger Regulation (or shall be deemed to
have done so under Article 10(6) of the EC Merger Regulation) declaring the
Acquisition compatible with the EC Common Market and all other material filings
and approvals under applicable foreign merger control or competition Laws shall
have been made or obtained; provided that Seller and Purchaser agree that the
approvals listed on Schedule 3.01(c) are not material.

(d) Other Transaction Documents. Purchaser shall have executed and delivered to
Seller the Other Transaction Documents to which Purchaser is a party.

SECTION 3.03. Frustration of Closing Conditions. Neither Purchaser nor Seller
may rely on the failure of any condition set forth in this Article III to be
satisfied if such failure was caused by such party’s material breach of this
Agreement or such party’s failure to act in good faith or to use its reasonable
best efforts to cause the Closing to occur, as required by Section 8.04.

ARTICLE IV

Representations and Warranties of Seller

Except as set forth in the Seller Disclosure Schedule attached hereto (the
“Seller Disclosure Schedule”) (provided that the disclosure of an item in one
section of the Seller Disclosure Schedule shall be deemed to be a disclosure in
each section of the Seller Disclosure

 

18

--------------------------------------------------------------------------------

Schedule and to apply to any other representation and warranty of Seller
contained in this Agreement to the extent the relevance and applicability of
such disclosure to such other section of the Seller Disclosure Schedule is
reasonably apparent), Seller hereby represents and warrants to Purchaser as
follows:

SECTION 4.01. Organization, Standing and Authority; Execution and Delivery;
Enforceability. (a) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Each Selling Affiliate
is a legal entity, duly organized, validly existing and, where applicable, in
good standing under the laws of the jurisdiction of its organization. Seller has
all requisite corporate and/or shareholder power and authority to (i) enter into
this Agreement and the Other Transaction Documents to which it is, or is
specified to be, a party and to consummate the transactions contemplated hereby
and thereby and (ii) cause the Selling Affiliates to convey the Transferred
Equity Interests and Acquired Assets, as applicable. Each Selling Affiliate has
all requisite corporate power and authority to enter into this Agreement and the
Other Transaction Documents to which it is, or is specified to be, a party and
to consummate the transactions contemplated hereby and thereby. All corporate
acts and other proceedings required to be taken by Seller to authorize the
execution, delivery and performance of this Agreement and to consummate the
transactions contemplated hereby have been, and all corporate acts and other
proceedings required to be taken by Seller and each of the Selling Affiliates to
authorize the execution, delivery and performance of the Other Transaction
Documents to which it is, or is specified to be, a party and to consummate the
transactions contemplated thereby will be, prior to Closing, duly and properly
taken.

(b) This Agreement has been duly executed and delivered by Seller and, prior to
Closing, Seller and the Selling Affiliates will have duly executed and delivered
each Other Transaction Document to which it is, or is specified to be, a party.
Assuming that this Agreement has been duly authorized, executed and delivered by
Purchaser, this Agreement constitutes, and, upon the due authorization,
execution and delivery of the Other Transaction Documents by Purchaser, each
Other Transaction Document will constitute, a legal, valid and binding
obligation of Seller or the Selling Affiliates, as the case may be, enforceable
against such person in accordance with its terms.

SECTION 4.02. No Conflicts; Consents. (a) The execution and delivery of this
Agreement by Seller do not, and the execution and delivery of the Other
Transaction Documents by Seller and the Selling Affiliates specified to be
parties thereto will not, and the consummation of the transactions contemplated
hereby and thereby and compliance by Seller and the Selling Affiliates with the
terms and conditions hereof and thereof will not, conflict with, or result in
any violation of, breach or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancelation, payment or
acceleration of any obligation or to loss of a benefit under, or result in the
creation of any liens, claims, encumbrances, security interests, options,
charges, right of first refusal, easements, mortgages, deeds of trust, rights of
way, restrictions on the use of real property, encroachments, licenses to third
parties or other restrictions of any kind (“Liens”) (other than Permitted Liens
or Liens arising from acts of Purchaser or its Affiliates) upon any of the
Acquired Assets or any properties or assets of any of the Transferred Entities
under, any provision of (i) the Certificate of Incorporation or By-laws (or the
comparable governing instruments) of Seller, any Selling Affiliate or any of the
Transferred Entities, (ii) any Transferred Contract, Transferred Real Property
Contract,

 

19

--------------------------------------------------------------------------------

Transferred Entity Contract or any Contract set forth on Section 4.11 of the
Seller Disclosure Schedule or (iii) any Injunction, or, subject to the matters
referred to in paragraph (b) below, applicable Law, other than, in the case of
clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, would not be reasonably likely to have a Seller Material Adverse
Effect (without giving effect to clause (vii) of the definition thereof).

(b) No consent, waiver, approval, license, Permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required to
be obtained or made by or with respect to Seller, any Selling Affiliate or any
Transferred Entity in connection with the execution, delivery and performance of
this Agreement, the Other Transaction Documents or the consummation of the
transactions contemplated hereby or thereby, other than (i) compliance with and
filings under the HSR Act and compliance with and filings and approvals under
applicable foreign merger control or competition Laws, (ii) compliance with and
such filings and notifications as may be required under applicable state
property transfer Laws or Environmental Laws, including the New Jersey
Industrial Site Recovery Act, (iii) those that may be required solely by reason
of Purchaser’s or any Affiliate of Purchaser’s (as opposed to any other third
party’s) participation in the transactions contemplated hereby or by the Other
Transaction Documents, (iv) compliance with and filings under the Securities
Exchange Act of 1934, as amended and the rules and regulations promulgated
thereunder, (v) compliance with and filings or notices required by the rules and
regulations of the New York Stock Exchange and (vi) such consents, waivers,
approvals, licenses, permits, orders, authorizations, registrations,
declarations and filings the absence of which, or the failure to make or obtain
which, individually or in the aggregate, would not be reasonably likely to have
a Seller Material Adverse Effect (without giving effect to clause (vii) of the
definition thereof).

SECTION 4.03. Transferred Equity Interests. Seller or a Selling Affiliate has
good and valid title to the applicable Purchased Companies’ Equity Interests set
forth opposite Seller’s or such Selling Affiliate’s name in Section B of the
Seller Disclosure Schedule, in each case free and clear of any Liens, and is the
record and beneficial owner thereof. Each Purchased Company has good and valid
title to the Purchased Company Subsidiaries’ Equity Interests set forth opposite
such Purchased Company’s name in Section B of the Seller Disclosure Schedule,
free and clear of all Liens, and is the record and beneficial owner thereof.
Assuming Purchaser has the requisite power and authority to be the lawful owner
of the Purchased Companies’ Equity Interests, upon delivery to Purchaser at the
Closing of certificates representing the Purchased Companies’ Equity Interests,
duly endorsed by Seller or the applicable Selling Affiliate for transfer to
Purchaser, and upon Seller’s receipt of the Closing Date Amount, good and valid
title to the Purchased Companies’ Equity Interests will pass to Purchaser, free
and clear of any Liens, other than those arising from acts of Purchaser or its
Affiliates.

SECTION 4.04. Organization, Standing and Documents of Transferred Entities.
Section 4.04 of the Seller Disclosure Schedule sets forth the name and the
jurisdiction of organization of each Transferred Entity. Each Transferred Entity
is a legal entity duly organized, validly existing and, where applicable, in
good standing under the Laws of its jurisdiction of organization. Each
Transferred Entity has all requisite corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to carry on its business as presently conducted, other than such franchises,
licenses, permits, authorizations and

 

20

--------------------------------------------------------------------------------

approvals the lack of which, individually or in the aggregate, would not be
reasonably likely to have a Seller Material Adverse Effect. Each Transferred
Entity is in good standing and duly qualified to do business in each
jurisdiction in which the conduct or nature of its business or the ownership,
leasing or holding of its properties makes such qualification necessary, except
such jurisdictions where the failure to be in good standing or so qualified,
individually or in the aggregate, would not be reasonably likely to have a
Seller Material Adverse Effect. Seller has, prior to the date hereof, delivered
or otherwise made available to Purchaser true and complete copies of the
certificate of incorporation or bylaws (or similar organizational documents),
each as amended to the date hereof, of each Transferred Entity. As of the
Closing, none of the Fundamental Transferred Entities is in violation of the
provisions of its certificate of incorporation or bylaws (or similar
organizational documents). Any copies of minutes of meetings or written consents
of stockholders (or other equityholders), board of directors (or similar body)
and any committee thereof of each Fundamental Transferred Entity that has been
provided by or on behalf of Seller to Purchaser accurately reflect in all
material respects the substance of the applicable meetings or consents.

SECTION 4.05. Equity Interests in the Transferred Entities. (a) As of the date
of this Agreement, there are not any outstanding bonds, debentures, notes or
other indebtedness of any Transferred Entity having the right to vote (or that
are convertible into, or exercisable or exchangeable for, securities having the
right to vote) on any matters on which holders of the Transferred Equity
Interests may vote (“Transferred Entity Voting Debt”). As of the date of this
Agreement, there are not any outstanding (i) warrants, options, convertible or
exchangeable securities or other commitments or undertakings (other than this
Agreement) (x) pursuant to which Seller, any Selling Affiliate or any
Transferred Entity is or may become obligated to issue, deliver or sell any
additional units of its equity interests or any security convertible into, or
exchangeable for, any equity interest in any Transferred Entity or any
Transferred Entity Voting Debt, or (y) pursuant to which Seller, any Selling
Affiliate or any Transferred Entity is or may become obligated to issue, grant,
extend or enter into any such warrant, option, right, unit, security,
arrangement, commitment or undertaking.

(b) Section 4.05(b) of the Seller Disclosure Schedule sets forth, as of the date
of this Agreement and for each Transferred Entity, the number of authorized
equity interests in such Transferred Entity, the number of outstanding equity
interests in such Transferred Entity and the record and beneficial owners
thereof. Except for the Transferred Equity Interests, as of the date of this
Agreement, there are no shares of capital stock or other equity securities of
the applicable Transferred Entity issued, reserved for issuance or outstanding.
The Transferred Equity Interests have been duly authorized and validly issued
and are fully paid and non-assessable. The Transferred Equity Interests have not
been issued in violation of, and are not subject to, any preemptive,
subscription or similar rights under any provision of applicable Law, the
Certificate of Incorporation or By-Laws (or comparable governing instruments) of
the applicable Transferred Entity, or any Contract to which the applicable
Transferred Entity is subject, bound or a party or otherwise. As of the date of
this Agreement, there are not any outstanding “phantom” stock rights, stock
appreciation rights, stock based performance units or arrangements or
commitments that give any person the right to receive any benefits or rights
similar to any rights enjoyed by or accruing to the holders of the Transferred
Equity Interests.

 

21

--------------------------------------------------------------------------------

(c) Except for equity interests in another Transferred Entity, as of the date of
this Agreement, no Transferred Entity owns, directly or indirectly, any equity
interests in any other person.

(d) Other than this Agreement, the Transferred Equity Interests are not subject
to any voting trust agreement or other Contract, including any such Contract
restricting or otherwise relating to the voting, dividend rights or disposition
of the Transferred Equity Interests.

SECTION 4.06. Financial Statements. (a) Section 4.06(a) of the Seller Disclosure
Schedule sets forth complete and correct copies of the following financial
statements of the Business: (i) the audited carve-out Balance Sheets as of
December 31, 2006 and 2005, the audited carve-out Statements of Earnings for the
years ended December 31, 2006, 2005 and 2004, the audited carve-out Statements
of Changes in Divisional Equity for the years ended December 31, 2006, 2005 and
2004 and the audited carve-out Statements of Cash Flows for the years ended
December 31, 2006, 2005 and 2004 (collectively, the “Audited 2004-2006 Financial
Statements”) and (ii) the unaudited carve-out Balance Sheets as of December 31,
2007 and 2006, the unaudited carve-out Statements of Earnings for the years
ended December 31, 2007, 2006 and 2005, the unaudited carve-out Statements of
Changes in Divisional Equity for the years ended December 31, 2007, 2006 and
2005 and the unaudited carve-out Statements of Cash Flows for the years ended
December 31, 2007, 2006 and 2005 (collectively, the “Unaudited 2007 Financial
Statements”); provided that the Unaudited 2007 Financial Statements do not
include final amounts or any amounts related to Taxes (including the Excluded
Tax Items).

(b) The Audited 2004-2006 Financial Statements and the Unaudited 2007 Financial
Statements have been prepared in accordance with U.S. GAAP consistently applied
(except that the Unaudited 2007 Financial Statements do not include the Excluded
Tax Items) and on that basis present fairly in all material respects the net
assets of the Business as of the respective dates thereof and the results of
operations, changes in divisional equity and cash flows of the Business for the
respective periods indicated therein (except, in the case of the Unaudited 2007
Financial Statements, for the Excluded Tax Items). The Audited 2007 Financial
Statements, when delivered pursuant to Section 5.08, will be prepared in
accordance with U.S. GAAP consistently applied and on that basis will present
fairly in all material respects the net assets of the Business as of the
respective dates thereof and the results of operations, changes in divisional
equity and cash flows of the Business for the respective periods indicated
therein.

(c) Neither the Business nor any Transferred Entity has any liability or
obligation of any nature (whether accrued, absolute, contingent, unasserted or
otherwise) required by U.S. GAAP to be reflected on a carve-out balance sheet of
the Business or in the notes thereto, except (i) as disclosed or reserved
against on the face of the Balance Sheet and the notes thereto, (ii) for
liabilities and obligations relating to Taxes, (iii) for liabilities and
obligations incurred in connection with the transactions contemplated by this
Agreement, (iv) for future executory liabilities or obligations arising under
any Transferred Real Property Contract, Transferred Contract or any Transferred
Entity Contract, (v) for Excluded Liabilities and (vi) other liabilities and
obligations incurred in the ordinary course of business since the date of the
Balance Sheet which, individually and in the aggregate, would not be reasonably
likely to have a Seller Material Adverse Effect.

 

22

--------------------------------------------------------------------------------

(d) Except as set forth in Section 4.06(d) of the Seller Disclosure Schedule,
the assets reflected on the Balance Sheet are either Acquired Assets or assets
of the Transferred Entities, except for any such assets reflected on the Balance
Sheet that are not, in the aggregate, material to the Business.

SECTION 4.07. Taxes. (a) For purposes of this Agreement, (i) “Taxes” means all
Federal, state, local and foreign taxes, charges, duties, fees, levies and
similar assessments imposed by a Governmental Entity, including all interest,
penalties and additions imposed with respect to such amounts (whether payable
directly or by withholding and whether or not requiring the filing of a Tax
Return), (ii) “Pre-Closing Tax Period” means all taxable periods ending on or
before the Closing Date and with respect to a Straddle Period, the portion of
such taxable year or period ending on and including the Closing Date,
(iii) “Post-Closing Tax Period” means all taxable periods beginning after the
Closing Date and with respect to a Straddle Period, the portion of such taxable
year or period beginning after the Closing Date, (iv) “Straddle Period” means
any taxable period that includes (but does not end on) the Closing Date,
(v) “Code” means the U.S. Internal Revenue Code of 1986, as amended, (vi) “Tax
Return” means all returns, reports, elections, forms or similar statements
required to be filed with any Government Entity with respect to Taxes (including
any estimated Tax Returns, schedules or attachments thereto and amendments
thereof) and (v) “Transfer Taxes” means all transfer, documentary, stamp duty,
sales, use, registration, commodities and other similar Taxes (including all
applicable real estate transfer Taxes and real property transfer gains Taxes)
and related amounts (including any penalties, interest and additions to Tax)
incurred in connection with this Agreement, the Other Transaction Documents, the
Acquisition and the other transactions contemplated hereby and thereby.

(b) All material Tax Returns required to be filed by or with respect to the
Transferred Entities or any Acquired Assets have been duly and timely filed and
all such Tax Returns are true, correct and complete in all material respects.

(c) All material amounts of Taxes required to be paid by or with respect to the
income, assets or operations of the Transferred Entities or any Acquired Assets
have been timely paid.

(d) There are no material Tax Liens on the Transferred Equity Interests, any of
the assets of the Transferred Entities or the Acquired Assets, except for Liens
described in clause (iii) of Section 4.08.

(e) The Transferred Entities do not have in force any waiver of any statute of
limitations in respect of Taxes or any extension of time with respect to a Tax
assessment or deficiency.

(f) There are no pending or active audits or written proposed deficiencies or
other written claims, actions, assessments or proceedings for a material amount
of unpaid Taxes asserted against the Transferred Entities or with respect to the
Acquired Assets.

(g) None of the Transferred Entities has constituted either a “distributing
corporation” or a “controlled corporation” (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
tax-free treatment under Section 355 of the Code in the two years prior to the
date of this Agreement.

 

23

--------------------------------------------------------------------------------

(h) None of the Transferred Entities has entered into any “listed transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b).

(i) For any period of time during which a Transferred Entity was owned by Seller
or a Selling Affiliate, none of the Transferred Entities is or has ever been a
member of an affiliated group of corporations filing a consolidated federal
income Tax Return (other than the group of which they are currently members and
the common parent of which is Seller).

(j) For all taxable periods for which the statute of limitations has not
expired, all Taxes which any Transferred Entity is (or was) required by Law to
withhold or collect in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party have been
duly withheld or collected, and have been timely paid over to the proper
authorities to the extent due and payable.

(k) No written claim has ever been made by any taxing authority in a
jurisdiction where Seller or any Selling Affiliate (with respect to the Business
and the Acquired Assets) or any Transferred Entity does not file Tax Returns
that any of the Transferred Entities is or may become subject to taxation by
that jurisdiction.

(l) There are no tax sharing, allocation, indemnification or similar agreements
in effect as between any Transferred Entity or any predecessor or Affiliate
thereof and any other party (including Seller, any Selling Affiliate or any
predecessors or Affiliates thereof) under which Purchaser or any Transferred
Entity could be liable for any Taxes or other claims of any party after the
Closing Date.

(m) ConvaTec Dominican Republic, Inc. has not been a “United States real
property holding corporation” within the meaning of Section 897(c)(2) of the
Code at any time during the five-year period ending on the date hereof and no
Acquired Asset has been a “United States Real Property Interest” within the
meaning of Section 897(c)(1) of the Code.

(n) None of the Transferred Entities will be required to include amounts in
income, or exclude material items of deduction, in a taxable period beginning
after the Closing Date as a result of a: (i) change in method of accounting for
a taxable period ending on or prior to the Closing Date, (ii) installment sale,
(iii) open transaction or (iv) closing agreement pursuant to Section 7121 of the
Code (or similar provisions of state, local or foreign Tax Law) executed on or
prior to the Closing Date.

SECTION 4.08. Good and Valid Title to Assets Other Than Transferred Equity
Interests, Real Property and Intellectual Property. Seller or a Selling
Affiliate, as applicable, has, or, in the case of assets acquired, leased or
licensed after the date of this Agreement not in violation of this Agreement, as
of the Closing Date will have, good and valid title to, or a valid leasehold
interest in, or a valid license to use, all material Acquired Assets, and the
Transferred Entities have, or, in the case of assets acquired, lease or licensed
after the date of this Agreement not in violation of this Agreement, as of the
Closing Date will have, good and valid title to, or a valid leasehold interest
in, or a valid license to use, their respective material assets reflected on

 

24

--------------------------------------------------------------------------------

the audited carve-out balance sheet of the Business as of December 31, 2007 or
thereafter acquired by such Transferred Entity (except, in the case of each of
Seller, such Selling Affiliate and such Transferred Entity, those sold or
otherwise disposed of in the ordinary course of business consistent with past
practice since the date of the Balance Sheet), in each case free and clear of
all Liens, except (i) such as are set forth in Section 4.08 of the Seller
Disclosure Schedule, (ii) mechanics’, carriers’, workmen’s, repairmen’s or other
like Liens arising or incurred in the ordinary course of business, (iii) Liens
arising under original purchase price conditional sales contracts and equipment
leases with third parties entered into in the ordinary course of business,
(iv) Liens for Taxes and other governmental charges which are not yet due and
payable or which may thereafter be paid without penalty and (v) other
imperfections of title or encumbrances, if any, which do not, individually or in
the aggregate, materially impair the continued use and operation of the Acquired
Assets or such assets of the Transferred Entities to which they relate in the
conduct of the Business as presently conducted (the Liens described in clauses
(i) through (v) above, together with the Liens referred to in clauses
(ii) through (viii) of Section 4.09(c), are hereinafter referred to collectively
as “Permitted Liens”). This Section 4.08 does not relate to the Transferred
Equity Interests, real property or interests in real property, Intellectual
Property or Contracts, such items being the subjects of Section 4.03,
Section 4.09, Section 4.10 and Section 4.11, respectively.

SECTION 4.09. Real Property. (a) Section 4.09(a) of the Seller Disclosure
Schedule sets forth a true and complete list, as of the date of this Agreement,
of (i) all real property and interests in real property owned by Seller or any
Affiliate of Seller (other than a Transferred Entity) and used solely in the
operation or conduct of the Business or otherwise included in the Acquired
Assets, (ii) all real property and interests in real property owned by a
Transferred Entity and (iii) the name of the record title holder and a list of
all Indebtedness secured by a Lien on each such real property or interest in
real property in clause (i) or (ii) above (each such real property or interest
in real property in clause (i) or (ii), individually, an “Owned Property”),
except for such Owned Property that would not, in the aggregate, be material to
the Business.

(b) Section 4.09(b) of the Seller Disclosure Schedule sets forth a true and
complete list, as of the date of this Agreement, of (i) all material real
property and material interests in real property in which Seller or any
Affiliate of Seller (other than a Transferred Entity) is a lessee, sublessee,
licensee or occupant and that are used solely in the operation or conduct of the
Business or otherwise included in the Acquired Assets and (ii) all material real
property and material interests in real property leased by a Transferred Entity
(each such real property or interest in real property in clause (i) or (ii),
individually, a “Leased Property”), except for such Leased Property that would
not, in the aggregate, be material to the Business.

(c) Seller, a Selling Affiliate or a Transferred Entity has good and insurable
fee title to all Owned Property and good and valid title to the leasehold
estates in all Leased Property, in each case free and clear of all Liens, except
(i) Liens described in clauses (ii) through (iv) of Section 4.08, (ii) such
Liens as are identified in Section 4.09(c) of the Seller Disclosure Schedule,
(iii) leases, subleases and similar agreements set forth in
Section 4.11(a)(v)(B) of the Seller Disclosure Schedule, (iv) Liens that may
have been placed by any developer or other third party on Leased Property or on
property over which Seller, a Selling Affiliate or a Transferred Entity has
easement rights, together with any subordination or similar

 

25

--------------------------------------------------------------------------------

agreements relating thereto, (v) zoning and building codes and other similar
Laws, orders, rules and regulations, (vi) any conditions that would be shown by
a current, accurate survey, previously made available to Purchaser, of any Owned
Property, (vii) recorded and/or unrecorded easements, covenants, rights-of-way
and other similar restrictions and (viii) other imperfections of title or
encumbrances, if any, which do not, individually or in the aggregate, materially
impair the continued use and operation of the Transferred Real Property to which
they relate as currently used or operated. None of the items set forth in clause
(iii), (iv), (v) or (vi), individually or in the aggregate, materially impairs
the continued use and operation of the Owned Property to which they relate in
the operation or conduct of the Business as presently conducted.

(d) Seller has made available to Purchaser for review true and complete copies
of each written lease, sublease, license or occupancy agreement in respect of a
Leased Property (each, a “Lease”). Except for subleases or similar agreements
identified in Section 4.11(a)(v)(B) of the Seller Disclosure Schedule, none of
Seller, any Selling Affiliate or any Transferred Entity has subleased or granted
any right to use and occupy all or any portion of the premises demised by any
Lease to a third party. None of Seller, any Selling Affiliate or any Transferred
Entity has collaterally assigned or granted a Lien (other than a Permitted Lien)
in any Lease.

SECTION 4.10. Intellectual Property. (a) Seller or a Selling Affiliate owns, or
as of the Closing Date will own, free and clear of all Liens (in each case,
except to the extent the Transferred Intellectual Property may be licensed from
third parties), all right, title and interest in and to the material Transferred
Intellectual Property, and the consummation of the transactions contemplated
hereby will not conflict with, alter or impair any such rights in any material
respect. The Transferred Intellectual Property constitutes all material
Intellectual Property owned by Seller or any Affiliate of Seller (other than a
Transferred Entity) and used in the operation or conduct of the Business.

(b) The Transferred Entities own, or as of the Closing Date will own, free and
clear of all Liens (in each case, except to the extent the Transferred
Intellectual Property may be licensed from third parties), all right, title and
interest in and to all material Intellectual Property owned, used, filed by or
licensed to the Transferred Entities with respect to the Business (the
“Transferred Entity Intellectual Property”), and the consummation of the
transactions contemplated hereby will not conflict with, alter or impair any
such rights in any material respect. Section 4.10(b) of the Seller Disclosure
Schedule sets forth a true and complete list, as of the date of this Agreement,
of all registered or filed, as applicable, Transferred Entity Intellectual
Property.

(c) As of the date of this Agreement, no claims are currently pending or, to the
knowledge of Seller, the subject of a written threat received since January 1,
2007, against Seller or any of its Affiliates by any person (i) with respect to
the ownership, validity, enforceability, effectiveness or use of any material
Transferred Intellectual Property or Transferred Entity Intellectual Property or
(ii) with respect to infringement, misappropriation, violation or misuse of any
third-party Intellectual Property in the operation or conduct of the Business
other than as disclosed in Section 4.10(c) of the Seller Disclosure Schedule.

 

26

--------------------------------------------------------------------------------

(d) None of Seller, any Selling Affiliate or any Transferred Entity has granted
any material options, licenses or agreements relating to the Transferred
Intellectual Property or Transferred Entity Intellectual Property, except
non-exclusive implied licenses to end-users in the ordinary course of business.
As of the date of this Agreement, none of Seller, any Selling Affiliate or any
Transferred Entity is bound by or a party to any material options, licenses or
agreements of any kind relating to the Intellectual Property of any other
person, except for Transferred Intellectual Property that may be licensed from
third parties and agreements relating to computer software licensed to Seller or
its Affiliates in the ordinary course of business.

(e) For purposes of this Agreement, “Intellectual Property” means, without any
geographic limitation, collectively:

(i) patents, patent applications and statutory invention registrations, together
with all counterparts, reissues, divisions/divisionals, continuations,
continuations-in-part, extensions, provisional or supplemental protection
certificates, renewals and reexaminations thereof (collectively, “Patents”);

(ii) trademark registrations, trademark applications, servicemark registrations,
servicemark applications and domain name registrations, together with all
extensions and renewals thereof and all goodwill associated therewith
(collectively, “Trademarks”);

(iii) copyright registrations and copyright applications, together with all
extensions and renewals thereof (collectively, “Copyrights”);

(iv) unregistered service marks, brand names, trade names, trade dress,
copyrights, logos, slogans, trade secrets and other proprietary information
(collectively, “Unregistered Intellectual Property”); and

(v) Product Formulae, Manufacturing Knowhow and packaging specifications
(collectively, the “Technology”);

provided that “Intellectual Property” shall not include the BMS Names.

SECTION 4.11. Contracts. (a) Section 4.11(a) of the Disclosure Schedule sets
forth each Transferred Real Property Contract, each Transferred Contract and
each Contract to which a Transferred Entity is a party or by which its assets or
properties are bound, including Leases (a “Transferred Entity Contract”), in
each case as of the date of this Agreement, that is:

(i) an employment agreement or employment contract that has an aggregate future
liability in excess of $250,000 and is not terminable by Seller, such Selling
Affiliate or such Transferred Entity, as applicable, by notice of not more than
one hundred and eighty (180) days for a cost of less than $250,000 (excluding,
for this purpose, any such employment agreement or contract which is required to
be provided or is imposed under applicable Law);

(ii) an employee collective bargaining agreement or a written works council
agreement, trade union agreement or other Contract with any labor organization,
union or association;

 

27

--------------------------------------------------------------------------------

(iii) following Closing, (A) restrictive of the ability of the Business to
engage in any line of business or to compete in any business or with any person
in any geographic area, (B) a Contract that contains a provision for exclusivity
or any similar requirement, (C) a Contract that contains a requirement of the
Business to grant “most favored nation” pricing or terms or (D) restrictive of
the ability of the Business to solicit or hire any person, in each case that
materially impairs the operation of the Business as it is currently conducted;

(iv) a Contract with (A) either Seller or any Affiliate of Seller (other than
another Transferred Entity) or (B) with any current or former officer, director
or employee of Seller or any Affiliate of Seller (other than employment
agreements, employment contracts and Benefit Plans); provided, however, that the
foregoing shall be deemed not to include any Other Transaction Document or any
Contract that will expire or be terminated at or prior to Closing that does not
require after the Closing the payment of any money or performance of any
obligation by Purchaser or any of its Affiliates (including, after the Closing,
the Transferred Entities);

(v) (A) a Transferred Real Property Contract or a Lease which has an aggregate
future liability to any person in excess of $1,000,000 and is not terminable by
Seller, such Selling Affiliate or such Transferred Entity, as applicable, by
notice of not more than one hundred and eighty (180) days for a cost of less
than $1,000,000 or (B) a lease, sublease, license, occupancy agreement or
similar agreement with any person under which Seller, a Selling Affiliate or a
Transferred Entity is a lessor or sublessor of, or makes available for use by
any person, any Owned Property or any Leased Property;

(vi) a lease, sublease, license or similar agreement with any person under which
(A) Seller, a Selling Affiliate or a Transferred Entity is lessee of, or holds
or uses, any machinery, equipment, vehicle, spare parts, furniture or other
tangible personal property owned by any person or (B) Seller, a Selling
Affiliate or a Transferred Entity is a lessor or sublessor of, or makes
available for use by any person, any tangible personal property owned or leased
by Seller, such Selling Affiliate or such Transferred Entity, in any such case
which has an aggregate future liability or receivable, as the case may be, in
excess of $1,000,000 and is not terminable by Seller, such Selling Affiliate or
such Transferred Entity, as applicable, by notice of not more than one hundred
and eighty (180) days for a cost of less than $1,000,000;

(vii) (A) a continuing Contract for the future purchase of materials, supplies
or equipment or other assets or properties (other than purchase contracts and
orders for inventory in the ordinary course of business) or (B) a management
service, consulting, financial advisory or other similar type of Contract
(including a financial advisory agreement with an investment bank) (other than
Contracts for services in the ordinary course of business), in any such case
which has an aggregate future liability to any person in excess of $1,000,000
and is not terminable by Seller, such Selling Affiliate or such Transferred
Entity, as applicable, by notice of not more than one hundred and eighty
(180) days for a cost of less than $1,000,000;

 

28

--------------------------------------------------------------------------------

(viii) a material license, option or other similar Contract relating in whole or
in part to the Transferred Intellectual Property or Transferred Entity
Intellectual Property (including any license or other agreement under which
Seller, a Selling Affiliate or a Transferred Entity is licensee or licensor of
any such Transferred Intellectual Property or Transferred Entity Intellectual
Property);

(ix) a Contract under which Seller, a Selling Affiliate or a Transferred Entity
has incurred any Indebtedness which, individually, is in excess of $1,000,000;

(x) a Contract under which Seller, a Selling Affiliate or a Transferred Entity
has, directly or indirectly, made any advance, loan, extension of credit or
capital contribution to, or other investment in, any person, in any such case
which, individually, is in excess of $1,000,000;

(xi) a material mortgage, pledge, security agreement, deed of trust or other
instrument granting a Lien (other than a Permitted Lien) upon any Owned Property
or Leased Property, which Lien is not set forth in Section 4.09(c) of the Seller
Disclosure Schedule;

(xii) any other Contract to which Seller, a Selling Affiliate or a Transferred
Entity is a party or by or to which it or any of its assets or business is bound
or subject which has an aggregate future liability to any person in excess of
$1,000,000 and is not terminable by Seller, such Selling Affiliate or a
Transferred Entity, as applicable, by notice of not more than one hundred and
eighty (180) days for a cost of less than $1,000,000;

(xiii) a Contract (including letters of intent) involving the future disposition
or acquisition of material assets or properties of the Business in excess of
$10,000,000 (other than sales or purchases of Inventory in the ordinary course
of business), or any merger, consolidation or similar business combination
transaction relating to the Business with a purchase price in excess of
$10,000,000;

(xiv) a Contract involving a material joint venture, partnership, strategic
alliance, co-marketing, co-promotion, co-packaging, joint development or similar
agreement; or

(xv) a Contract involving a resolution or settlement of any actual or threatened
litigation, arbitration, claim or other dispute in excess of $1,000,000.

(b) Each Contract set forth in Section 4.11(a) of the Seller Disclosure Schedule
(or required to be set forth in Section 4.11(a) of the Seller Disclosure
Schedule) is, as of the date of this Agreement, and will be as of the Closing
Date (except for any such Contract that expires or is terminated at or prior to
the Closing not in violation of this Agreement), valid, binding and in full
force and effect and enforceable against Seller, the applicable Selling
Affiliate, the applicable Transferred Entity and, to the knowledge of Seller,
any other party to any such Contract with respect to any material term or
provision of any such Contract, in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors’ rights generally,
general principles of equity and the discretion of courts in granting equitable
remedies and except to the

 

29

--------------------------------------------------------------------------------

extent that the failure of such Contract to be valid, binding and in full force
and effect, individually or in the aggregate, would not be reasonably likely to
have a Seller Material Adverse Effect. Seller, the Selling Affiliates and the
Transferred Entities have performed all material obligations required to be
performed by them under each Contract set forth in Section 4.11(a) of the Seller
Disclosure Schedule (or required to be set forth in Section 4.11(a) of the
Seller Disclosure Schedule) and are not (with or without the lapse of time or
the giving of notice, or both) in breach or default in any material respect
thereunder except to the extent that such failure to perform, breach or default,
individually or in the aggregate, would not be reasonably likely to have a
Seller Material Adverse Effect. To the knowledge of Seller, no other party to
any Contract set forth in Section 4.11(a) of the Seller Disclosure Schedule (or
required to be set forth in Section 4.11(a) of the Seller Disclosure Schedule)
is (with or without the lapse of time or the giving of notice, or both) in
breach or default in any material respect thereunder, except to the extent that
such breach or default, individually or in the aggregate, would not be
reasonably likely to have a Seller Material Adverse Effect.

SECTION 4.12. Permits. (a) Section 4.12(a) of the Seller Disclosure Schedule
sets forth, as of the date of this Agreement, a true and complete list of
(i) all material Transferred Permits and (ii) all material Permits held by the
Transferred Entities for use in the operation or conduct of the Business (the
“Transferred Entity Permits”). Seller or a Selling Affiliate, as applicable,
validly holds and has complied with all the terms and conditions of each
Transferred Permit, and each Transferred Entity validly holds and has complied
with all the terms and conditions of each Transferred Entity Permit, except, in
each case, for any such invalidity or non-compliance that, individually or in
the aggregate, would not be reasonably likely to have a Seller Material Adverse
Effect. Seller has delivered or made available to Purchaser for inspection a
true and correct copy of each Transferred Permit and each Transferred Entity
Permit. Each material Transferred Permit and each Transferred Entity Permit are
in full force and effect. Any applications for the renewal of any such
Transferred Permit or Transferred Entity Permit which are due prior to the
Closing Date will be timely made or filed by Seller or the appropriate Selling
Affiliate or Transferred Entity prior to the Closing Date. Since January 1,
2007, none of Seller, any Selling Affiliate or any Transferred Entity has
received written notice of any suit, action or proceeding relating to the
revocation, withdrawal, termination, modification or limitation of any
Transferred Permit or Transferred Entity Permit the loss of which, individually
or in the aggregate, would be reasonably likely to have a Seller Material
Adverse Effect.

(b) Section 4.12(b) of the Seller Disclosure Schedule sets forth, as of the date
of this Agreement, a true and complete list of all Permits that are material for
use solely in the operation or conduct of the Business but that are not held by
Seller, a Selling Affiliate or any Transferred Entity.

SECTION 4.13. Litigation. Section 4.13 of the Seller Disclosure Schedule sets
forth a list of all lawsuits, actions, arbitrations, claims, complaints or other
proceedings (or, to the knowledge of Seller, any investigation) pending or, to
the knowledge of Seller, threatened, as of the date of this Agreement, at Law or
in equity, by or before any Governmental Entity or any other person in any way
affecting or arising out of the operation of the Business or against a
Transferred Entity or any of its properties, assets or rights or any Acquired
Assets and which (a) involve a claim of, or which involve an unspecified amount
which would reasonably be expected to result in a Liability of, more than
$1,000,000, (b) seek any material injunctive relief

 

30

--------------------------------------------------------------------------------

affecting the Business or (c) seek to prohibit the Acquisition. To the knowledge
of Seller, as of the date of this Agreement, none of Seller, any Affiliate of
Seller or any Transferred Entity is a party or subject to or in default under
any material Injunction of any Governmental Entity or arbitration tribunal
applicable to the operation of the Business, a Transferred Entity or any
Acquired Asset. This Section 4.13 does not relate to employee benefits or ERISA
matters, which are the subject of Section 4.14, or employee or labor matters,
which are the subject of Section 4.18.

SECTION 4.14. Benefit Plans. (a) Section 4.14(a) of the Seller Disclosure
Schedule sets forth a list of each Benefit Plan that covers any Business
Employee primarily based in the United States or Puerto Rico (the “U.S. Benefit
Plans”). “Benefit Plan” means any of the following: an “employee pension benefit
plan” (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”)), an “employee welfare benefit plan” (as defined
in Section 3(1) of ERISA), and any other plan, program, arrangement or agreement
providing for severance or retention benefits, profit-sharing, fees, bonuses,
stock options, stock appreciation, stock purchase or other stock-related rights,
current compensation, incentive or deferred compensation, change-in-control
benefits, vacation benefits, insurance, health or medical benefits, dental
benefits, employee assistance programs, disability benefits, workers’
compensation benefits or post-employment or retirement benefits and any material
fringe benefits (excluding any plans, programs or arrangements mandated by
applicable Law) that is sponsored, maintained or contributed to, or required to
be maintained or contributed to, or with respect to which Liability is borne, by
Seller or its Affiliates for the benefit of any Business Employee. Seller has
made available to Purchaser true and complete copies of the U.S. Benefit Plans
(or, to the extent no such copy exists, a description of the material terms),
summary plan descriptions and summaries of material modification for the U.S.
Benefit Plans (if applicable) and the most recent Internal Revenue Service or
Puerto Rico Department of Treasury (as applicable) determination letter or
opinion letter related to the U.S. Benefit Plans (if applicable). Except as set
forth in Section 4.14(a) of the Seller Disclosure Schedule, no U.S. Benefit Plan
is sponsored or maintained by a Transferred Entity.

(b) Neither Seller nor any ERISA Affiliate of Seller has incurred any
unsatisfied liability (other than Pension Benefit Guaranty Corporation (“PBGC”)
premiums) to the PBGC or the Internal Revenue Service under Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA that could result in the
imposition of any liability on Purchaser or any of its ERISA Affiliates.

(c) Each U.S. Benefit Plan with respect to which Purchaser or any Affiliate of
Purchaser could have any material Liability hereunder, including, without
limitation, under Article IX, that covers any Business Employee has been and is
being administered in all material respects in accordance with its terms and
ERISA, the Code and all other applicable Laws. All the U.S. Benefit Plans that
are intended to be qualified under Section 401(a) of the Code and/or
Section 1165 of the Puerto Rico Internal Revenue Code of 1994, as amended (the
“PR Code”), have received determination letters from the IRS and/or the Puerto
Rico Department of Treasury to the effect that such U.S. Benefit Plans are
qualified and the plans and trusts related thereto are exempt from federal
income taxes under Sections 401(a) and 501(a), respectively, of the Code and/or
Sections 1101 and 1165 of the PR Code, respectively, and no condition exists and
no event has occurred that would reasonably be expected to result in the
revocation of such letters.

 

31

--------------------------------------------------------------------------------

(d) Neither Seller nor any ERISA Affiliate of Seller nor any person appointed or
otherwise designated to act on behalf of Seller or any ERISA Affiliate of Seller
has engaged in any transactions in connection with any U.S. Benefit Plan that
are reasonably expected to result in the imposition of material penalties
pursuant to Section 502(i) of ERISA, material damages pursuant to Section 409 of
ERISA or a material tax pursuant to Section 4975(a) of the Code that could
result in the imposition of any material Liability on Purchaser or any of its
ERISA Affiliates.

(e) Neither Seller nor any ERISA Affiliate of Seller has incurred any
“withdrawal liability” within the meaning of Section 4201 of ERISA to any
multiemployer plan within the meaning of Section 3(37) of ERISA.

(f) No compensation payable by Seller, any ERISA Affiliate of Seller or
Purchaser or its Affiliates pursuant to Article IX to any employee, officer or
director of the Transferred Entities or the Business under any existing
contract, agreement or U.S. Benefit Plan (including by reason of the
transactions contemplated hereby) would be nondeductible under Section 280G of
the Code.

(g) Neither the execution of, nor consummation of, the transactions contemplated
by this Agreement will (either alone or upon the occurrence of any additional or
subsequent event) constitute an event under any U.S. Benefit Plan that will or
may result in any payment or provision of, acceleration of, vesting or increase
in, any benefits (whether of severance pay or otherwise), with respect to any
current or former employee, independent contractor, consultant, agent or
director of the Seller or any Affiliate thereof, or any beneficiary thereof,
with respect to which the Purchaser or its Affiliates may have any obligations
or material Liability.

(h) No claim, litigation or administrative or other action, proceeding, audit,
examination or investigation is pending or asserted, or, to the knowledge of
Seller, threatened, anticipated or expected to be asserted with respect to any
U.S. Benefit Plan or the assets of any such plan (other than routine claims for
benefits arising in the ordinary course) that could result in the imposition of
any material Liability on Purchaser or its ERISA Affiliates.

(i) Section 4.14(i) of the Seller Disclosure Schedule sets forth a list of each
Benefit Plan maintained, or contributed to, by Seller or its Affiliates for the
benefit of Business Employees primarily based outside of the United States and
Puerto Rico (the “Foreign Benefit Plans”). Each Foreign Benefit Plan with
respect to which Purchaser or its Affiliates (including the Transferred
Entities) could have any material Liability has been operated in all material
respects in compliance with its terms and with applicable Laws of the relevant
jurisdiction in which such Foreign Benefit Plan is maintained. Each Foreign
Benefit Plan with respect to which the Purchaser or its Affiliates may have any
obligations or material liability that is intended to qualify for favorable tax
benefits under the Laws of any jurisdiction is so qualified, and, to the
knowledge of Seller, no condition exists and no event has occurred that would
reasonably be expected to result in the loss or revocation of such status. All
benefits, contributions and premiums relating to each Foreign Benefit Plan with
respect to which the Purchaser or its Affiliates may have any obligations or
material liability have been timely paid or made in material compliance with its
terms and with applicable Laws and any related Contract. Seller has made
available to Purchaser true and complete copies of the Foreign Benefit Plans.
There

 

32

--------------------------------------------------------------------------------

are no pending promised or committed, whether legally binding or not,
undertakings to create or terminate any new Foreign Benefit Plan or to make
material improvements, increases or changes to any Foreign Benefit Plan, nor is
there any pattern of ad hoc benefit increases under any Foreign Benefit Plan
that may be enforceable against Purchaser or its Affiliates. All Foreign Benefit
Plans with respect to which Purchaser or its Affiliates may have any Liability
which provide benefits after termination of employment of a Transferred
Employee, other than any pension plan, can be terminated upon reasonable notice
without material Liability to Purchaser or its Affiliates. Neither the execution
of, nor consummation of, the transactions contemplated by this Agreement will
(either alone or upon the occurrence of any additional or subsequent event)
constitute an event under any Foreign Benefit Plan that will or may result in
any payment or provision of, acceleration of, or vesting or increase in, any
benefits (whether of severance pay or otherwise), with respect to any current or
former employee, independent contractor, consultant, agent or director of Seller
or any Affiliate thereof, or any beneficiary thereof, with respect to which the
Purchaser or its Affiliates may have any obligations or material Liability. No
claim, litigation or administrative or other action, proceeding, audit,
examination or investigation is pending or asserted, or, to the knowledge of
Seller, threatened, anticipated or expected to be asserted with respect to any
Foreign Benefit Plan or the assets of any such plan (other than routine claims
for benefits arising in the ordinary course) that could result in the imposition
of any material Liability on Purchaser or any of its Affiliates.

SECTION 4.15. Absence of Changes or Events. (a) Since December 31, 2007, there
have not been any facts, changes, developments, conditions, effects, events or
occurrences that, individually or in the aggregate, have had or would reasonably
be likely to have a Seller Material Adverse Effect.

(b) During the period since December 31, 2007 until the date of this Agreement,
Seller has caused the Business to be conducted in all material respects in the
ordinary course and none of Seller, any Selling Affiliate or any Transferred
Entity has taken any action that, if taken after the date of this Agreement,
would constitute a breach of any of the covenants set forth in Section 5.02(b)
(other than clauses (vi), (ix), (xi), (xii), (xv) and (xvi) and other than
clause (vii) solely with respect to Business Employees with a base salary less
than $200,000) other than any actions that are permitted by this Agreement.

SECTION 4.16. Compliance with Applicable Laws. The Business is in compliance
with all applicable Laws, including those relating to data integrity, human
research subject protection, privacy of individually identifiable information,
healthcare fraud and abuse prevention, occupational health and safety and the
Act, and their state and foreign equivalents, except for instances of
noncompliance that, individually or in the aggregate, would not be reasonably
likely to have a Seller Material Adverse Effect. Since January 1, 2007, none of
Seller, any Selling Affiliate or any Transferred Entity has received any written
communication from a Governmental Entity that alleges that the Business or any
Transferred Entity is in violation of any applicable Laws, except for any such
violations that, individually or in the aggregate, would not be reasonably
likely to have a Seller Material Adverse Effect. This Section 4.16 does not
relate to matters with respect to Taxes, which are the subject of Section 4.07,
employee benefit or ERISA matters, which are the subject of Section 4.14, or
employee or labor matters, which are the subject of Section 4.18.

 

33

--------------------------------------------------------------------------------

SECTION 4.17. Environmental Matters. Seller has provided or otherwise made
available to Purchaser certain environmental reports and other documents
relating to the facilities and operations of Seller and its Affiliates (solely
to the extent such reports relate to the Acquired Assets or to the Transferred
Entities) which are identified in Section 4.17(i) of the Seller Disclosure
Schedule (the “Environmental Reports”). Except as set forth in the Environmental
Reports, and except, individually or in the aggregate, as would not be
reasonably likely to have a Seller Material Adverse Effect, (a) Seller and the
Selling Affiliates (in each case solely to the extent related to the Business
and the Acquired Assets), the Acquired Assets and the Transferred Entities are
in compliance with all applicable Environmental Laws, (b) Seller and the Selling
Affiliates (in each case solely to the extent related to the Business and the
Acquired Assets) and the Transferred Entities possess and are in compliance with
all Transferred Environmental Permits required for the lawful operation and
conduct of the Business as currently conducted (each of which is listed on
Section 4.17(ii) of the Seller Disclosure Schedule and identified under the
heading “Transferred Environmental Permits”), (c) none of Seller, any Selling
Affiliate or any Transferred Entity has received since January 1, 2007, and
prior to the date hereof, any written communication from a Governmental Entity
that alleges that Seller, any Selling Affiliate or any Transferred Entity is in
violation of any applicable Environmental Law in connection with the operation
or conduct of the Business, the substance of which communication has not been
resolved, or that it is a potentially responsible party under the Federal
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (“CERCLA”) (in each case, solely to the extent related to the
Acquired Assets or the Transferred Entities), and (d) there are no pending or,
to the knowledge of Seller, threatened lawsuits, actions, arbitrations, claims,
complaints or other proceedings against Seller, any Selling Affiliate or any
Transferred Entity relating to non-compliance with applicable Environmental Laws
or Transferred Environmental Permits, to exposure to Hazardous Materials
(including any exposure of any Business Employee, Former Business Employee or
former employee or independent contractor of the Transferred Entities or the
Business to Hazardous Materials) or to a Release of Hazardous Material (in each
case, solely to the extent related to the Acquired Assets or the Transferred
Entities). Except as specifically provided in Section 4.02, the representations
and warranties made in this Section 4.17 are Seller’s exclusive representations
and warranties relating to environmental matters.

SECTION 4.18. Employee and Labor Matters. With respect to the Business and
Business Employees, (a) there is not, and since January 1, 2007 there has not
been, any material labor strike, work stoppage or lockout pending, or, to the
knowledge of Seller, threatened, against Seller, any Selling Affiliate or any
Transferred Entity, (b) to the knowledge of Seller, no material union
organizational campaign is in progress and no question concerning representation
exists respecting such Business Employees, (c) there are no pending material
charges against Seller, any Selling Affiliate or any Transferred Entity or any
Business Employee or former employee of Seller, any Selling Affiliate or any
Transferred Entity before the Equal Employment Opportunity Commission or any
state, local or foreign agency or other Governmental Entity responsible for the
prevention of unlawful employment practices, (d) Seller has not received written
notice of the intent of any Governmental Entity responsible for the enforcement
of labor or employment laws to conduct any material investigation and, to the
knowledge of Seller, no such investigation is in progress, (e) Seller, the
Selling Affiliates and the Transferred Entities are, and since January 1, 2007
have been, in compliance with all labor and employment Laws, rules and
regulations applicable to Seller’s, any Selling Affiliate’s or any Transferred

 

34

--------------------------------------------------------------------------------

Entity’s Business or any Business Employee, including those relating to wages,
hours, affirmative action, workplace safety or health, immigration, drug
testing, equal employment opportunity, retaliation, whistleblowers and
discrimination in employment, except for instances of noncompliance that,
individually or in the aggregate, would not be reasonably likely to have a
Seller Material Adverse Effect, (f) there is no unfair labor practice charge or
complaint against Seller, any Selling Affiliate or any Transferred Entity in
respect of Seller, any Selling Affiliate or any Transferred Entities’ Business
pending or, to the knowledge of Seller, threatened before the National Labor
Relations Board, any state or foreign labor relations board or any court or
tribunal, except for any such charge or complaint that, individually or in the
aggregate, would not be reasonably likely to have a Seller Material Adverse
Effect, (g) except as set forth in Section 4.18 of the Seller Disclosure
Schedule, there are no pending, or to the knowledge of Seller, threatened
actions, arbitrations, administrative proceedings, charges, complaints or
investigations that (A) in any way affect or arise out of the operations of the
Business or against or affecting a Transferred Entity or any of its properties,
assets or rights or any Acquired Assets, (B) involve the labor or employment
relations of Seller, any Selling Affiliate or any Transferred Entity, and
(C) individually or in the aggregate, have had or would reasonably be likely to
have a Seller Material Adverse Effect, and (h) none of Seller, any Selling
Affiliate or any Transferred Entity has been affected by any transaction or
engaged in mass layoffs or employment terminations sufficient in number to
trigger application of WARN or any similar foreign, state or local Law during
the last one (1) year, and none of the Business Employees has suffered an
“employment loss” (as defined in WARN and any similar Law) during the six
(6) months prior to the date hereof.

SECTION 4.19. Sufficiency of Assets. Assuming (a) all consents, waivers,
approvals, licenses, permits, orders, authorizations, registrations,
declarations, filings or notifications required to be made or obtained in
connection with the execution, delivery and performance of this Agreement, the
Other Transaction Documents and the transactions contemplated hereby and thereby
are so made or obtained and (b) Purchaser owns or forms legal entities in any
necessary jurisdictions outside of the jurisdictions in which the Transferred
Entities are organized and that such legal entities obtain such necessary
corporate qualifications to do business in such jurisdictions, the Acquired
Assets, the assets, rights and properties that will be owned or held by the
Transferred Entities immediately following the Closing, and the assets and
properties of which any Transferred Entity will be a lessee, sublessee or
licensee immediately following the Closing, taken as a whole, will be sufficient
in all material respects for the conduct of the Business immediately following
the Closing in substantially the same manner as conducted immediately prior to
the Closing, except that (x) Purchaser will not acquire any assets, rights or
properties that are necessary for the provision of the services to be provided
to Purchaser and the Transferred Entities hereunder and pursuant to the Other
Transaction Documents or the provision of any other services provided by Seller
or any of its Affiliates to the Business immediately prior to the Closing that
will terminate as of the Closing, (y) Purchaser will not acquire the Excluded
Assets and the Transferred Entities will not have Cash immediately following the
Closing Date and (z) Purchaser will not acquire the BMS Names.

SECTION 4.20. Insurance. Seller maintains no third-party insurance policies with
respect to the Business.

 

35

--------------------------------------------------------------------------------

SECTION 4.21. DISCLAIMER. PURCHASER ACKNOWLEDGES THAT (A) EXCEPT AS EXPRESSLY
SET FORTH IN THIS ARTICLE IV OR IN ANY EXHIBIT, SCHEDULE OR CERTIFICATE
DELIVERED BY SELLER OR ANY OF ITS AFFILIATES PURSUANT TO THIS AGREEMENT, NEITHER
SELLER NOR ANY OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED
OR IMPLIED, AS TO THE BUSINESS, THE TRANSFERRED ENTITIES, THE ACQUIRED ASSETS,
THE MANUFACTURE, DISTRIBUTION, MARKETING OR SALE OF THE PRODUCTS BY SELLER, THE
SELLING AFFILIATES OR THE TRANSFERRED ENTITIES, ANY OTHER ASPECT OF THE
RESPECTIVE BUSINESSES OF SELLER, THE SELLING AFFILIATES AND THE TRANSFERRED
ENTITIES OR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE
BUSINESS, THE TRANSFERRED ENTITIES OR THE ACQUIRED ASSETS FURNISHED OR MADE
AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES AND (B) PURCHASER HAS NOT RELIED
ON ANY REPRESENTATION OR WARRANTY FROM SELLER OR ANY OTHER PERSON WITH RESPECT
TO THE BUSINESS, THE TRANSFERRED ENTITIES, THE ACQUIRED ASSETS, THE MANUFACTURE,
DISTRIBUTION, MARKETING OR SALE OF THE PRODUCTS BY SELLER, THE SELLING
AFFILIATES AND THE TRANSFERRED ENTITIES, ANY OTHER ASPECT OF THE RESPECTIVE
BUSINESSES OF SELLER, THE SELLING AFFILIATES AND THE TRANSFERRED ENTITIES OR THE
ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE BUSINESS, THE
TRANSFERRED ENTITIES OR THE ACQUIRED ASSETS FURNISHED OR MADE AVAILABLE TO
PURCHASER AND ITS REPRESENTATIVES IN DETERMINING TO ENTER INTO THIS AGREEMENT,
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
ARTICLE IV OR IN ANY EXHIBIT, SCHEDULE OR CERTIFICATE DELIVERED BY SELLER OR ANY
OF ITS AFFILIATES PURSUANT TO THIS AGREEMENT. PURCHASER ACKNOWLEDGES THAT,
SHOULD THE CLOSING OCCUR, PURCHASER SHALL ACQUIRE THE TRANSFERRED ENTITIES AND
THE ACQUIRED ASSETS WITHOUT ANY REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE, IN AN “AS IS” CONDITION AND ON A “WHERE
IS” BASIS, EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE IV OR IN ANY EXHIBIT,
SCHEDULE OR CERTIFICATE DELIVERED BY SELLER OR ANY OF ITS AFFILIATES PURSUANT TO
THIS AGREEMENT.

ARTICLE V

Covenants of Seller

Seller covenants and agrees as follows:

SECTION 5.01. Access. From the date hereof to the Closing, Seller shall, and
shall cause the Selling Affiliates and the Transferred Entities and each of
their respective Representatives to, give Purchaser and its Representatives
access, during normal business hours and upon reasonable advance notice, to
personnel, Representatives, properties, books and records relating to the
Business (other than the Excluded Assets and the Excluded Liabilities) and
Seller shall, and shall cause the Selling Affiliates and the Transferred
Entities and each of their respective Representatives to, furnish to Purchaser
or its Representatives such financial and

 

36

--------------------------------------------------------------------------------

operating data and other information, as well as all information relating to
commitments, contracts, titles and financial position, or otherwise pertaining
to the Business, including inspection of properties, as such persons may
reasonably request; provided, however, that such access (a) does not
unreasonably disrupt the normal operations of Seller, the Selling Affiliates,
the Transferred Entities or the Business; (b) would not be reasonably expected
to violate any attorney-client privilege of Seller, the Selling Affiliates or
the Transferred Entities or violate any applicable Law and (c) would not
reasonably be expected to breach any duty of confidentiality owed to any person.
whether the duty arises contractually, statutorily or otherwise; provided that
Seller shall, and shall cause the Selling Affiliates and the Transferred
Entities to, use commercially reasonable efforts to make reasonable and
appropriate substitute disclosure arrangements under circumstances in which the
restrictions on access set forth in clause (b) and this clause (c) apply. Such
rights of access explicitly exclude any Phase II environmental investigations or
any other intrusive or invasive sampling, including subsurface testing of soil,
surfacewater or groundwater at any Owned Property or Leased Property. Any
evaluation or investigation by Purchaser or its Representatives shall not affect
the representations and warranties or covenants made by Seller in this
Agreement, any Other Transaction Documents or in any certificate delivered
pursuant to this Agreement or the remedies of Purchaser for breaches of those
representations and warranties or covenants.

SECTION 5.02. Ordinary Conduct. (a) From the date hereof to the Closing, except
as set forth in Section 5.02 of the Seller Disclosure Schedule or otherwise
permitted by or not in violation of the terms of this Agreement, Seller shall,
and shall cause the Selling Affiliates and the Transferred Entities to, cause
the operations of the Business (including the working capital and capital
expenditures) to be conducted in all material respects in the ordinary course in
substantially the same manner as currently conducted and use commercially
reasonable efforts to preserve in all material respects intact the present
business organizations and preserve in all material respects its relationships
with customers, suppliers and others having business dealings with the Business.

(b) From the date hereof to the Closing, except as set forth in Section 5.02 of
the Seller Disclosure Schedule or otherwise expressly permitted by the terms of
this Agreement, Seller shall not, and shall not permit any Selling Affiliate or
any Transferred Entity to, do any of the following in connection with the
Business or the Transferred Entities without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld or delayed):

(i) amend the Certificate of Incorporation, By-laws or other comparable
governing documents of any Transferred Entity;

(ii) declare or pay or set aside any dividend or make any other distribution to
the holders of equity interests in any Transferred Entity whether or not upon or
in respect of any shares of its capital stock; provided, however, that
(A) Purchaser acknowledges that the Transferred Entities may not maintain cash
balances and, from time to time between the date hereof and the Closing Date,
Seller and the Selling Affiliates may withdraw any cash balances of the
Transferred Entities, (B) dividends and distributions of Cash may be made by the
Transferred Entity to Seller and its Affiliates or to another Transferred Entity
and (C) all intercompany balances owed by or to any Transferred Entities to or
by Seller or any of its Affiliates (other than the Transferred Entities) may be
satisfied;

 

37

--------------------------------------------------------------------------------

(iii) redeem or otherwise acquire, directly or indirectly, any equity interests
in, or any other securities of, a Transferred Entity, or make any other change
in the capital structure of any Transferred Entity or issue, authorize for
issuance, sell or deliver (A) any equity interests in, or any other security or
voting interest in, a Transferred Entity, (B) any option or warrant for, or any
security convertible into, or exercisable or exchangeable for or evidencing the
right to subscribe for or acquire, any equity interests in, or any other
security or voting interest in, a Transferred Entity, (C) “phantom” stock
rights, stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings to which any Transferred Entity is a
party or by which any of them is bound (1) obligating any Transferred Entity to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
units of its equity interests or any security convertible into, or exercisable
or exchangeable for, any equity interest in any Transferred Entity or any
Transferred Entity Voting Debt, or any other security or voting interest in any
Transferred Entity, (2) obligating any Transferred Entity to issue, grant,
extend or enter into any such option, warrant, security, right, unit,
commitment, Contract, arrangement or undertaking or (3) that give any person the
right to receive any benefits or rights similar to any rights enjoyed by or
accruing to the holders of the Transferred Equity Interests or (D) any
Transferred Entity Voting Debt;

(iv) split, combine or reclassify any of the equity interests or any other
security or voting interest in any Transferred Entity, or issue any other
security in respect of, in lieu of or in substitution for the equity interests
or any other security or voting interest in any Transferred Entity;

(v) loan, advance, invest or make any capital contribution to or in any person,
other than (A) advances in the ordinary course of business or (B) loans,
advances, investments or capital contributions to or in a Transferred Entity
(which loans and advances will be cancelled prior to the Closing);

(vi) establish, adopt, amend or terminate any U.S. Benefit Plan or Foreign
Benefit Plan or employee collective bargaining agreement, thrift, compensation
or other plan, agreement, trust, fund, policy or arrangement covering any
Business Employee if such adoption or amendment would result in new or increased
costs to Purchaser on or after the Closing Date, except in the ordinary course
of business or as required by applicable Law;

(vii) grant to any Business Employee any increase in base salary, wages,
bonuses, incentive compensation, pension, severance or termination pay, except
(A) in the ordinary course of business consistent with past practice, not
exceeding the increases described in Section 5.02(b)(vii) of the Seller
Disclosure Schedule, which sets forth the budgeted percentage increases in
compensation and timing thereof by jurisdiction, (B) as may be required under
Contracts, U.S. Benefit Plans, Foreign Benefit Plans, in each case, existing as
of the date hereof, or applicable Law or (C) any increases for which Seller or
its Affiliates shall be solely obligated, including providing Rule of 70
benefits under the Bristol-Myers Squibb Company Retirement Income Plan, the
Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income Plan and the
Bristol-Myers Squibb Company Comprehensive Medical Plan;

 

38

--------------------------------------------------------------------------------

(viii) sell, lease or otherwise dispose of any Acquired Assets or any assets of
the Transferred Entities which are material, individually or in the aggregate,
to the Business, except for sales of raw materials, work-in-process, finished
goods, supplies, parts, spare parts and other inventories in the ordinary course
of business consistent with past practice or assets that are obsolete or no
longer used in the Business;

(ix) (A) make, change or revoke any Tax election, (B) file any amendment to a
Tax Return, (C) adopt or change in any material respect any Tax accounting
method, (D) prepare any Tax Returns which include the income or assets of any
Transferred Entity in a manner which is not consistent in all material respects
with the past practice of the treatment of the items relating to the Transferred
Entities, or (E) enter into any settlement or closing agreement with a taxing
authority, in each case except to the extent (1) required by applicable Law,
(2) such item does not relate to any of the Transferred Entities or Acquired
Assets, or (3) as would not affect the amount of Tax for which Purchaser is
responsible under Section 1.03(a)(viii) or 10.03;

(x) permit or allow any Acquired Assets or any assets of the Transferred
Entities or any capital stock, or other equity or voting interests of the
Transferred Entities, to become subject to any Lien that would have been
required to be set forth in Section 4.08, 4.09(c), 4.09(d) or 4.10 of the Seller
Disclosure Schedule if existing on the date of this Agreement;

(xi) make any bonus, profit sharing, pension, retirement or insurance payment,
distribution or arrangement to or with any Business Employee except for payments
that were already accrued prior to the date hereof or are required by the terms
of any U.S. Benefit Plan or Foreign Benefit Plan;

(xii) other than in connection with documenting any action permitted under this
Agreement (including this Section 5.02(b)), enter into, materially amend, waive
any material right under, become subject to, or terminate any Contract of a type
described in Section 4.11(a);

(xiii) as it relates to the Business, acquire any business or person, by merger
or consolidation, purchase of substantial assets or equity interests, or by any
other manner, in a single transaction or a series of related transactions, other
than any acquisition which is not reasonably expected to impair in any material
respect the operating cash flows of the Business;

(xiv) make any material change in any method of accounting or accounting policy
or practice used in preparation of the Financial Statements other than those
required by U.S. GAAP or applicable Law; provided, that, for purposes of
calculating Working Capital, such changes shall not be taken into account;

(xv) plan, announce, implement or effect any reduction in force, lay-off, early
retirement program, severance program or other program or effort concerning the
termination of employment of Business Employees (other than routine employee
terminations for cause or due to poor performance); or

 

39

--------------------------------------------------------------------------------

(xvi) hire any new Business Employee in the U.S. with an annual base salary and
annual target bonus opportunity in excess of $200,000 in the aggregate, or hire
any new Business Employee outside the U.S. at grade level D8 or above.

(c) Seller shall, and shall cause the Selling Affiliates and the Transferred
Entities to, keep all self-insurance programs currently maintained with respect
to the Business, the Transferred Entities, the Business Employees or the
Acquired Assets (or which insures against or covers any Assumed Liability), in
each case in the ordinary course of business consistent with past practice, and
continue to process all new and pending claims in the ordinary course of
business consistent with past practice, through the close of business on the
Closing Date; provided that none of the Seller, the Selling Affiliates or the
Transferred Entities shall be required to pay any claims pending and not paid
prior to the close of business on the Closing Date.

SECTION 5.03. Intercompany Arrangements and Accounts. Except as expressly set
forth in this Agreement and the Transitional Services Agreement, on or prior to
the Closing Date, Seller shall, and shall cause its Affiliates (including the
Transferred Entities) to, (i) cancel and terminate all Contracts or other
arrangements between Seller or its Affiliates (other than the Transferred
Entities), on the one hand, and the Transferred Entities, on the other hand,
that were entered into on or prior to the Closing and (ii) settle or extinguish
all intercompany receivables and payables between Seller or its Affiliates
(other than the Transferred Entities), on the one hand, and the Transferred
Entities, on the other hand, that were incurred on or prior to the Closing, in
each case without further recourse to or any Liability of any Transferred
Entity.

SECTION 5.04. Resignations. On the Closing Date, Seller shall cause to be
delivered to Purchaser duly signed resignations, effective immediately after the
Closing, of all directors of the Transferred Entities or shall take such other
action as is necessary to cause such persons to no longer be directors of any
Transferred Entity immediately after the Closing.

SECTION 5.05. Confidentiality. Seller acknowledges that it and its Affiliates
and each of their respective Representatives are and will be at the Closing in
possession of proprietary information relating to the Business that is not
generally available to the public (to the extent solely related to the Business,
the “Confidential Information”); provided that Confidential Information shall
not include any information that (i) at the time of disclosure or thereafter is
generally available to and known by the public (other than as a result of a
disclosure directly or indirectly by Seller, its Affiliates or their respective
Representatives), (ii) after Closing becomes available to Seller, its Affiliates
or their respective Representatives from a source other than Purchaser or its
Representatives, or (iii) Seller can demonstrate it was independently acquired
or developed by Seller, its Affiliates or their respective Representatives
without reference to, or incorporation of, other Confidential Information.
Seller acknowledges and agrees that such Confidential Information is proprietary
and confidential in nature and that Seller shall be responsible for any breach
of these confidentiality provisions by its Representatives and the Selling
Affiliates and any of their Representatives. For a period of three (3) years
following the Closing, Seller shall, and shall cause the Selling Affiliates and
shall direct each of their respective Representatives to, keep all Confidential
Information strictly confidential. If Seller, any of the Selling Affiliates or
any of their respective Representatives are legally required to disclose (after
such person has used its commercially reasonable efforts to

 

40

--------------------------------------------------------------------------------

avoid such disclosure and after promptly advising and consulting with Purchaser
about its intention to make, and the proposed contents of, such disclosure) any
Confidential Information (whether by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process), such person
shall or shall cause such Representatives to (in each case unless prohibited by
applicable Law) provide Purchaser with prompt written notice of such request so
that Purchaser may seek an appropriate protective order or other appropriate
remedy. If such protective order or remedy is not obtained, such person may
disclose only that portion of the Confidential Information which such person is
legally required to disclose, and such person shall exercise its commercially
reasonable efforts to obtain assurance that confidential treatment will be
accorded to such Confidential Information so disclosed. For the avoidance of
doubt, Seller agrees to redact any Confidential Information to the extent
reasonably practicable prior to disclosing any information which contains
Confidential Information.

SECTION 5.06. Non-Competition. (a) From the Closing until the earlier to occur
of the third anniversary of the Closing and a Seller Change of Control Event
(the “Non-Compete Period”), Seller shall not, and shall cause its controlled
Affiliates not to, directly or indirectly, engage in any Competing Business, or
own, manage, operate or control any person engaged in a Competing Business. For
purposes of this Section, (x) “Competing Business” shall mean the marketing
and/or sale, or manufacturing for sale, of any Competing Product; (y) “Competing
Product” shall mean any wound care dressing or professional non-pharmaceutical
skin care product for wound care, ostomy system or device, or acute fecal
incontinence system or device; provided that none of the following shall be a
Competing Product: (A) any product that is targeted for pediatric use marketed,
sold, developed and/or manufactured by Seller’s Mead Johnson division including,
but not limited to, pediatric use; (B) any professional skin care products
manufactured, distributed, marketed or sold in connection with any business of
Seller and its controlled Affiliates other than the ConvaTec business and
(C) any pharmaceutical, over-the-counter or other product (including, but not
limited to, dermatological products and any device, active pharmaceutical
ingredient, excipient, intermediate or any other ingredient) sold and/or
developed (or in development) and/or manufactured for sale as of the date of
this Agreement by Seller or any Affiliate of Seller other than any Product or
any other product marketed and/or sold as of the Closing Date under a Brand
name; and (z) “Seller Change of Control Event” shall mean any tender offer,
merger, consolidation or other transaction, as a result of which Seller becomes
a subsidiary of any person or the shareholders of Seller as of immediately prior
to such transaction hold, in the aggregate, less than fifty percent (50%) of the
outstanding shares of Seller (or the successor in such transaction, if
applicable) entitled to vote on matters to be determined by the shareholders of
Seller (or such successor, if applicable).

(b) Section 5.06(a) shall be deemed not breached as a result of the ownership by
Seller or any of its Affiliates of: (i) less than ten percent (10%) in the
aggregate of any class of stock of a person engaged, directly or indirectly, in
any Competing Business; provided that neither Seller nor any Affiliates of
Seller shall have the right to appoint a member of the board of directors of
such Competing Business or (ii) an interest otherwise proscribed by this
Section 5.06 if such interest arises as a result of the acquisition following
the Closing Date of a person that engages, directly or indirectly, in a
Competing Business; provided that (A) such acquisition is not undertaken for the
primary purpose of evading the obligations of Seller or any of its controlled
Affiliates under Section 5.06(a) and (B) either (1) at the time of such
acquisition, such

 

41

--------------------------------------------------------------------------------

Competing Business (x) accounts for less than fifteen percent (15%) of such
person’s consolidated annual revenues or (y) has annual revenues not in excess
of $25 million or (2) Seller complies with Section 5.06(c).

(c) In the event that Seller or any of its controlled Affiliates acquires during
the Non-Compete Period any interest in a person that engages, directly or
indirectly, in a Competing Business that constitutes more than fifteen percent
(15%) of such person’s consolidated annual revenues and has annual revenues in
excess of $25 million, then Seller shall, or shall cause any such acquiring
controlled Affiliate to, divest such interest as promptly as practicable (but in
any event within twelve (12) months of such acquisition).

SECTION 5.07. Non-Solicitation; No Hire or Employ. For one (1) year after the
Closing, Seller will not, and will cause its Affiliates not to, directly or
indirectly solicit for employment or hire or employ or seek to entice away from
Purchaser or its Affiliates, any Transferred Employee listed on Section 5.07 of
the Seller Disclosure Schedule (such Transferred Employees, the “Restricted
Transferred Employees”); provided, however, that notwithstanding anything in
this Section 5.07 to the contrary, Seller and its Affiliates may (A) engage in
general solicitations of employment not specifically directed toward any
Restricted Transferred Employees; provided that they may not hire any Restricted
Transferred Employee that responds to such a solicitation unless such Restricted
Transferred Employee has been terminated by Purchaser or its Affiliates without
cause, (B) solicit for employment, hire or employ any Restricted Transferred
Employees who are no longer employed by the Business at the time of Seller’s or
its Affiliates’ first contact with them and who have been terminated by
Purchaser or its Affiliates without cause and (C) rehire any such Restricted
Transferred Employee where required by applicable Law, a collective bargaining
agreement or a works council agreement.

SECTION 5.08. Financial Statements. No later than ten (10) business days prior
to the Closing Date, Seller shall deliver to Purchaser the audited carve-out
Balance Sheets of the Business as of December 31, 2007 and 2006, the audited
carve-out Statements of Earnings of the Business for the years ended
December 31, 2007, 2006 and 2005, the audited carve-out Statements of Changes in
Divisional Equity of the Business for the years ended December 31, 2007, 2006
and 2005 and the audited carve-out Statements of Cash Flows of the Business for
the years ended December 31, 2007, 2006 and 2005 (together, the “Audited 2007
Financial Statements”). Notwithstanding anything to the contrary contained in
this Agreement, Purchaser’s sole and exclusive rights and remedies in the event
of any difference between the Audited 2007 Financial Statements and the
Unaudited 2007 Financial Statements to the extent such difference impacts EBITDA
or the components thereof shall be a reduction of the Purchase Price by the
Audited 2007 EBITDA Reduction Amount and the termination right provided in
Section 11.01(b), and, for the avoidance of doubt, Purchaser shall not have any
right to seek indemnification pursuant to Article X for any Loss to the extent
arising from any breach of any representation or warranty of Seller (including
Section 4.06) to the extent such breach is related to EBITDA or the components
thereof as reflected in the Unaudited 2007 Financial Statements.

SECTION 5.09. Financing Related Cooperation. Without prejudice to Section 8.04,
on or prior to the Closing Date, Seller shall use commercially reasonable
efforts to assist, and shall cause its Affiliates to use commercially reasonable
efforts to assist, in connection with the arrangement of the Debt Financing as
may be reasonably requested by

 

42

--------------------------------------------------------------------------------

Purchaser, including by making senior management of the Business and the
Transferred Entities reasonably available to (a) participate in meetings
(including lender meetings), presentations, road shows, due diligence and
drafting sessions and sessions with rating agencies, in each case, as necessary
to consummate the Debt Financing; (b) assist with the preparation of materials
for rating agency presentations, offering documents, private placement
memoranda, bank information memoranda, prospectuses and similar documents
necessary in connection with the Debt Financing; (c) subject to Section 5.01 of
this Agreement, furnish Purchaser and its financing sources financial and other
pertinent information regarding the Business and the Transferred Entities as may
be reasonably requested by Purchaser to consummate the Debt Financing;
(d) request from the appropriate person, and use commercially reasonable efforts
to obtain, such consents, legal opinions, surveys and title insurance as
reasonably requested by Purchaser, and in each case, as required to consummate
the Debt Financing; (e) subject to Section 5.01 of this Agreement, cooperate
with prospective lenders involved in the Debt Financing to provide access to the
Business’ and the Transferred Entities’ respective properties, assets, and cash
management and accounting systems (including cooperating in and facilitating the
completion of field examinations, collateral audits, asset appraisals, surveys,
and engineering/property condition reports); and (f) execute and deliver at
Closing any customary pledge and security documents, other definitive financing
documents or other customary documents, in each case as may be reasonably
requested by Purchaser to the extent necessary to consummate the Debt Financing,
and to cause the Business and the Transferred Entities to establish bank and
other accounts and blocked account agreements and lock-box arrangements in
connection with the Debt Financing; provided, that Seller shall not be required
to provide, or cause any of the Transferred Entities to provide, cooperation
under this Section 5.09 that: (i) unreasonably interferes with the ongoing
business of the Transferred Entities or the Business; (ii) causes any
representation, warranty or covenant in this Agreement to be breached; or
(iii) causes any closing condition set forth in Article III to fail to be
satisfied or otherwise causes the breach of this Agreement. Purchaser shall
(A) promptly after the earlier of Closing and the date this Agreement is
terminated in accordance with Section 11.01, reimburse Seller for all
reasonable, documented out-of-pocket costs and expenses incurred by Seller or
any of its Affiliates in connection with their compliance with this Section 5.09
and (B) indemnify and hold Seller and its Affiliates harmless against any Losses
suffered by Seller or any of its Affiliates as a result of or in connection with
its cooperation under this Section 5.09.

SECTION 5.10. Enforcement of Confidentiality Agreements. Following the Closing,
upon Purchaser’s written request specifying in reasonable detail a breach of a
confidentiality agreement entered into in connection with the sale process of
the Business, Seller shall use commercially reasonable efforts to enforce the
provisions of such confidentiality agreement against the applicable counterparty
thereto and provide Purchaser with a copy of such confidentiality agreement.

ARTICLE VI

Representations and Warranties of Purchaser

Purchaser hereby represents and warrants to Seller as follows:

 

43

--------------------------------------------------------------------------------

SECTION 6.01. Organization, Standing and Authority; Execution and Delivery;
Enforceability. (a) Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is
organized. Purchaser has all requisite corporate power and authority to enter
into this Agreement and the Other Transaction Documents to which it is, or is
specified to be, a party and to consummate the transactions contemplated hereby
and thereby. All corporate acts and other proceedings required to be taken by
Purchaser to authorize the execution, delivery and performance of this Agreement
and the Other Transaction Documents to which it is, or is specified to be, a
party and to consummate the transactions contemplated hereby and thereby have
been duly and properly taken.

(b) This Agreement has been duly executed and delivered by Purchaser and, prior
to Closing, Purchaser will have duly executed and delivered each Other
Transaction Document to which it is, or is specified to be, a party. Assuming
that this Agreement has been duly authorized, executed and delivered by Seller,
this Agreement constitutes, and, upon the due authorization, execution and
delivery of the Other Transaction Documents by each other party thereto, each
Other Transaction Document will constitute, a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms.

SECTION 6.02. No Conflicts; Consents. (a) The execution and delivery of this
Agreement by Purchaser does not, and the execution and delivery by Purchaser of
each Other Transaction Document to which it is, or is specified to be, a party
will not, and the consummation of the transactions contemplated hereby and
thereby and compliance by Purchaser with the terms and conditions hereof and
thereof will not, conflict with, or result in any violation of, breach or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancelation or acceleration of any obligation or to
loss of a benefit under, or result in the creation of any Lien upon any of the
properties or assets of Purchaser under, any provision of (i) its certificate of
incorporation or by-laws, (ii) any Contract to which Purchaser is a party or by
which any of its properties or assets are bound or (iii) any Injunction, or,
subject to the matters referred to in paragraph (b) below, Law applicable to
Purchaser or its properties or assets, other than, in the case of clauses
(ii) and (iii) above, any such items that, individually or in the aggregate,
would not be reasonably likely to have a Purchaser Material Adverse Effect.

(b) No consent, waiver, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required to
be obtained or made by or with respect to Purchaser in connection with the
execution, delivery and performance of this Agreement, the Other Transaction
Documents or the consummation of the transactions contemplated hereby or
thereby, other than (i) compliance with and filings under the HSR Act, if
applicable, and compliance with and filings and approvals under applicable
foreign merger control or competition laws, (ii) those that may be required
solely by reason of Seller’s or any Affiliate of Seller’s (as opposed to any
other third party’s) participation in the transactions contemplated hereby or by
the Other Transaction Documents and (iii) such consents, waivers, approvals,
licenses, permits, orders, authorizations, registrations, declarations and
filings the absence of which, or the failure to make or obtain which,
individually or in the aggregate, would not be reasonably likely to have a
Purchaser Material Adverse Effect.

 

44

--------------------------------------------------------------------------------

SECTION 6.03. Actions and Proceedings. There are no (a) outstanding Injunctions
of any Governmental Entity or arbitration tribunal against Purchaser,
(b) lawsuits, actions or other proceedings pending or, to the knowledge of
Purchaser, threatened against Purchaser or any of its Affiliates, or
(c) investigations by any Governmental Entity which are pending or, to the
knowledge of Purchaser, threatened against Purchaser, other than, in the case of
each of clauses (a), (b) and (c), any such items that, individually or in the
aggregate, would not be reasonably likely to have a Purchaser Material Adverse
Effect.

SECTION 6.04. Securities Act. The Transferred Equity Interests are being
acquired for investment only and not with a view to any public distribution
thereof, and Purchaser shall not offer to sell or otherwise dispose of the
Transferred Equity Interests so acquired by it in violation of any of the
registration requirements of the United States Securities Act of 1933.

SECTION 6.05. Financing. Concurrently with the execution of this Agreement,
Purchaser has delivered correct and complete copies of (a) executed commitment
letters addressed to Purchaser, dated the date hereof (the “Equity Commitment
Letters”), from Avista Capital Partners, LP and Avista Capital Partners II, LP
and from each of Nordic Capital VII Alpha, L.P. and Nordic Capital VII Beta,
L.P. (each, an “Equity Fund”) to provide equity financing in an aggregate amount
of up to $2,156,000,000 to fund a portion of the Purchase Price (the “Equity
Financing”) and (b) an executed commitment letter, dated the date hereof (the
“Debt Commitment Letter”, and together with the Equity Commitment Letters, the
“Financing Letters”), from the lenders party thereto to provide Purchaser,
subject to the terms and conditions thereof, with up to $2,430,000,000 in debt
financing (the “Debt Financing”, and together with the Equity Financing, the
“Financing” (it being understood and agreed that the term “Debt Financing” shall
include any financing to be provided pursuant to replacement commitments
obtained by Purchaser in compliance with Section 7.08)). In addition,
concurrently with the execution of this Agreement, Purchaser has delivered a
correct and complete copy of the Interim Facility Letter dated as of the date
hereof (the “Interim Facility Letter”), from the arrangers, interim lenders,
facility agent, security agent and other finance parties named therein to
Purchaser, to provide Purchaser, subject to the terms and conditions thereof,
with up to $2,170,000,000 in debt financing in the event that the definitive
facilities contemplated by the Debt Commitment Letter have not been executed on
or prior to the date that is three Business Days prior to Closing (it being
understood and agreed that the term “Debt Financing” shall include the financing
to be provided under the Interim Facility Letter). The Equity Commitment Letters
in the form so delivered are valid and in full force and effect, the Debt
Commitment Letter in the form so delivered is valid and in full force and effect
with respect to Purchaser and (to the knowledge of Purchaser) each other party
thereto, the Interim Facility Letter in the form so delivered is valid and in
full force and effect with respect to Purchaser and (to the knowledge of
Purchaser) each other party thereto, such commitments (or any replacement
commitments obtained by Purchaser in compliance with Section 7.08) have not been
withdrawn, terminated or otherwise amended or modified in any respect, and,
subject to the accuracy of the representations and warranties of Seller set
forth in Article IV, no event has occurred that, with or without notice, lapse
of time or both, would constitute a default or breach on the part of Purchaser
under any term or condition of the Equity Commitment Letters or, as of the date
hereof, the Debt Commitment Letter or the Interim Facility Letter. The Equity
Commitment Letters, the Debt Commitment Letter (together with the fee letter
referred to therein) and the Interim Facility

 

45

--------------------------------------------------------------------------------

Letter constitute, as of the date hereof, the entire and complete agreement
between the parties thereto with respect to the financing contemplated thereby,
and, except as set forth, described or provided for in the Equity Commitment
Letters, the Debt Commitment Letter and the Interim Facility Letter (or in
replacement commitments obtained by Purchaser in compliance with Section 7.08),
(i) there are no (A) conditions precedent to the obligations of the Equity Funds
to fund the Equity Financing, or (B) conditions precedent to the respective
obligations of the lenders to provide the Debt Financing, and (ii) there are no
contractual contingencies or other provisions under any agreement (including any
side letters) relating to the transactions contemplated by this Agreement to
which Purchaser or any of its Affiliates is a party that would permit the Equity
Funds or any of the lenders to reduce the total amount of the Financing or
impose any additional condition precedent to the availability of the Equity
Financing or any additional condition precedent to the availability of the Debt
Financing. Subject to the satisfaction of the conditions of the Financing, and
subject to the satisfaction of the conditions of this Agreement, the Financing
would provide Purchaser with acquisition financing at the Closing sufficient to
consummate the Acquisition upon the terms contemplated by this Agreement and to
pay all related fees and expenses associated therewith. Purchaser has fully paid
any and all commitment fees, if any, or other fees required by the Debt
Commitment Letter that have become due and payable.

SECTION 6.06. Activities of Purchaser. Purchaser was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, has not
engaged in any business activities or conducted any operations (other than in
connection with the transactions contemplated by this Agreement) and, prior to
the Closing, will not have incurred liabilities or obligations of any nature
(other than in connection with the transactions contemplated by this Agreement).

SECTION 6.07. Solvency. Immediately after the Closing and after giving effect to
the transactions contemplated by this Agreement, the payment of the Closing Date
Amount and the payment of all fees and expenses related to the transactions
contemplated by this Agreement, each of Purchaser and the Transferred Entities
will be Solvent.

SECTION 6.08. Going Concern. Purchaser is acquiring the Business as a going
concern for the purpose of carrying out a business that is similar to the
Business following the Closing and as of the date hereof does not currently
anticipate the cessation of operations at any of the facilities of the Business.

SECTION 6.09. Sponsor Guarantee. Concurrently with the execution of this
Agreement, Purchaser has delivered to Seller a guarantee, dated the date hereof,
of each of the Equity Funds guaranteeing certain of Purchaser’s obligations
hereunder (the “Sponsor Guarantees”). Each Sponsor Guarantee is valid and in
full force and effect and constitutes the valid and binding obligation of the
applicable Equity Fund, enforceable in accordance with its terms.

SECTION 6.10. Exclusivity of Representations. The representations and warranties
made by Purchaser in this Article VI are the exclusive representations and
warranties made by Purchaser to Seller. Purchaser hereby disclaims any other
express or implied representations or warranties by Purchaser to Seller with
respect to itself or the Equity Funds or any of their respective Affiliates.

 

46

--------------------------------------------------------------------------------

ARTICLE VII

Covenants of Purchaser

Purchaser covenants and agrees as follows:

SECTION 7.01. Confidentiality. Purchaser acknowledges that the information being
provided to it in connection with the Acquisition and the consummation of the
other transactions contemplated hereby and by the Other Transaction Documents
(including the terms and conditions of this Agreement and the Other Transaction
Documents) is subject to the terms of a confidentiality agreement between Nordic
Capital VI Limited and Seller dated as of December 31, 2007 (the
“Confidentiality Agreement”), the terms of which are incorporated herein by
reference. Effective upon, and only upon, the Closing, the confidentiality
provisions of the Confidentiality Agreement shall terminate with respect to
information relating solely to the Business; provided, however, that Purchaser
acknowledges that any and all information of a proprietary nature not relating
solely to the Business provided to it by or on behalf of Seller, any Selling
Affiliate, any Transferred Entity or Seller’s Representatives concerning Seller,
the Selling Affiliates, the Transferred Entities or any other Affiliate of
Seller and the terms and conditions of this Agreement and the Other Transaction
Documents shall remain subject to the terms and conditions of the
Confidentiality Agreement for a period of three (3) years after the Closing
Date.

SECTION 7.02. No Additional Representations. Purchaser acknowledges that it and
its Representatives have received or been afforded the opportunity to review
prior to the date hereof all written materials that Seller was required to
deliver or make available, as the case may be, to Purchaser pursuant to this
Agreement on or prior to the date hereof. Purchaser acknowledges that it and its
Representatives have been permitted satisfactory access to the books and
records, facilities, equipment, Contracts, insurance policies (or summaries
thereof) and other properties and assets of Seller and its Affiliates to the
extent relating to the Business, the Transferred Entities and the Acquired
Assets that it and its Representatives have desired or requested to see and/or
review, and that it and its Representatives have had satisfactory opportunity to
meet with the officers and employees of Seller and its Affiliates to discuss the
Business, the Transferred Entities, the Acquired Assets and the Assumed
Liabilities. Purchaser acknowledges and agrees that, (a) other than the
representations and warranties of Seller expressly set forth in this Agreement,
there are no representations or warranties of Seller, any Selling Affiliate, the
Transferred Entities or any other person either expressed or implied with
respect to the transactions contemplated hereby, the Business, the Transferred
Entities, the Acquired Assets or the Assumed Liabilities, including with respect
to the accuracy or completeness of any information regarding the Business, the
Transferred Entities, the Acquired Assets or the Assumed Liabilities furnished
or made available to Purchaser and its representatives and (b) other than in the
case of fraud, none of Seller, any Selling Affiliate or any other person shall
have or be subject to any liability to or claim to indemnification (whether
pursuant to Section 10.01 or otherwise) by Purchaser or any other person
resulting from the distribution to Purchaser, or Purchaser’s use of, any such
information, including the Confidential

 

47

--------------------------------------------------------------------------------

Information Memorandum with respect to the Business dated December 2007, and any
information, documents or material made available to Purchaser and its
representatives in certain virtual or physical “data rooms”, management
presentations, visits of physical premises (including third party manufacturers
anywhere in the world) or in any other form in expectation of the transactions
contemplated hereby.

SECTION 7.03. No Use of Certain Names; Transitional License. (a) Purchaser shall
as soon as reasonably practicable, and in any event within one hundred eighty
(180) days after the Closing Date, revise sales and product literature,
packaging and labeling to (i) delete all references to the BMS Names and
(ii) delete all references to Seller’s or any Selling Affiliates’ customer
service address or phone number; provided, however, that, for a period of
eighteen (18) months from the Closing Date, Purchaser may continue to distribute
sales and product literature, Transferred Inventory and any Inventory of the
Transferred Entities that uses any of the BMS Names, addresses or phone numbers
to the extent that such sales and product literature, Transferred Inventory and
Inventory of the Transferred Entities exists on the Closing Date or is
manufactured within the ninety (90)-day period after the Closing Date, and
Seller hereby grants to Purchaser the limited right and a royalty-free paid-up
license to use Seller’s trademarks, trade dress, copyrights and other
Intellectual Property owned by Seller (and covenants to cause each of its
Affiliates to grant Purchaser the limited right and a royalty-free paid-up
license to use such Affiliate’s trademarks, trade dress and copyrights under any
copyrights and other Intellectual Property owned by such Affiliate) that have
been used in connection with the manufacture, distribution, marketing and sale
of the Products, to the extent necessary to allow Purchaser to use such sales
and product literature, Transferred Inventory and Inventory of the Transferred
Entities. In no event shall Purchaser use any BMS Names, addresses or phone
numbers after the Closing Date in any manner or for any purpose different from
the use of such BMS Names, addresses or phone numbers by the Business during the
ninety (90)-day period preceding the Closing Date. “BMS Names” means
“Bristol-Myers”, “Bristol-Myers Squibb”, “Bristol-Myers Squibb Company”, “E.R.
Squibb & Sons”, “E.R. Squibb”, and “Squibb”, any variations and derivatives
thereof and proprietary UPC codes relating thereto and any other logos or
trademarks of Seller or its Affiliates not included in the Transferred
Intellectual Property.

(b) As soon as reasonably practicable, and in any event within ten (10) business
days following the Closing, to the extent necessary, Purchaser shall cause each
Transferred Entity to change its corporate name to a name not including, or, in
the reasonable judgment of Seller, not confusingly similar to, any of the BMS
Names. As soon as reasonably practicable, and in any event within ten
(10) business days following the Closing, to the extent necessary, Purchaser
shall cause each Transferred Entity to amend or terminate any certificate of
assumed name or d/b/a filing by such Transferred Entity so as to eliminate their
right to use any of the BMS Names or any name that, in the reasonable judgment
of Seller. is confusingly similar to any of the BMS Names.

(c) Notwithstanding Sections 7.03(a) and 7.03(b), Purchaser shall be entitled to
use BMS Names to accurately reference entities and products which historically
bore such names in historical descriptions of the Business and its operations;
provided that Seller shall have the right to review and approve any such use
prior to its use, such approval not to be unreasonably withheld.

 

48

--------------------------------------------------------------------------------

SECTION 7.04. FDA Reporting; NDC. (a) Purchaser shall take any and all actions,
as soon as practicable following the date hereof so that as soon as practicable
following the Closing (but in no event later than ninety (90) business days
following the Closing) Seller’s National Drug Code number or Labeler Code on the
packaging for the Products shall be replaced with Purchaser’s National Drug Code
number or Labeler Code; provided that Purchaser’s obligation pursuant to this
sentence shall not apply with respect to any finished goods and packaging
included in the Transferred Inventory or any Inventories of the Transferred
Entities as of the Closing Date or manufactured within the ninety (90)-day
period after the Closing Date. For the avoidance of doubt, such action shall
include Purchaser’s obtaining a new National Drug Code number or Labeler Code,
if it does not already have one. From and after the Closing, Purchaser shall be
solely responsible for all obligations with respect to annual or adverse event
reporting to the United States Food and Drug Administration (the “FDA”) with
respect to the Brands and Purchaser shall promptly submit any and all such
reports as may be required by the FDA.

(b) Purchaser shall communicate to the Centers for Medicare and Medicaid
Services (“CMS”), with a copy to Seller, the expiration dates for the last
manufactured lots (“Last Lot Expiration Dates”) of each of the Products
manufactured by or on behalf of Purchaser that bears Seller’s National Drug Code
number or Labeler Code as soon as each such Last Lot Expiration Date is
available. Seller shall maintain with the FDA Seller’s National Drug Code number
or Labeler Code for each Product as required for the manufacture and
distribution of the Products until the latest expiry of lots of Products
included in the Transferred Inventory.

SECTION 7.05. Litigation Matters. Following the Closing, Purchaser shall, and
shall cause its Affiliates (including, in the case of Purchaser, the Transferred
Entities) to, cooperate fully with Seller and its Affiliates in the prosecution,
defense and/or settlement and all other aspects of the administration of the
litigation listed in Section 1.03(b)(iii) of the Seller Disclosure Schedule or
such other lawsuit, action, other proceeding, claim or investigation against
Seller or any of its Affiliates as Seller in its sole discretion determines is
necessary, to the extent such cooperation does not unreasonably disrupt the
normal operations of Purchaser and its Affiliates. Such cooperation shall
include (i) affording Seller, its Affiliates, its counsel and its other
representatives full and complete access, upon reasonable written notice during
normal business hours, to all relevant personnel, properties, books, contracts,
commitments and records, (ii) furnishing promptly to Seller, its Affiliates, its
counsel and its other representatives any information reasonably requested by
it, such Affiliates, such counsel or such other representatives and
(iii) providing any other assistance to Seller, its Affiliates, its counsel and
its other representatives reasonably requested by Seller, such Affiliates, such
counsel or such other representatives, in each case to the extent such
cooperation would not be reasonably expected to result in the forfeiture of any
attorney-client privilege of Purchaser or its Affiliates or violate any Contract
or applicable Law; provided that Seller shall, and shall cause the Selling
Affiliates to, use commercially reasonable efforts to make reasonable and
appropriate substitute cooperation arrangements under circumstances in which
such cooperation restrictions apply. Seller shall reimburse Purchaser for
documented out-of-pocket costs and expenses incurred in assisting Seller
pursuant to this Section 7.05.

 

49

--------------------------------------------------------------------------------

SECTION 7.06. Bulk Transfer Laws. Purchaser hereby waives compliance by Seller
and its Affiliates with the provisions of any so-called “bulk transfer law” of
any jurisdiction in connection with the sale of the Acquired Assets to
Purchaser.

SECTION 7.07. Recordation of Transfer of Intellectual Property. Purchaser shall
be responsible, at its sole cost and expense, for all applicable recordations of
the assignment of the Transferred Intellectual Property from the title owner of
such Intellectual Property to Purchaser or a Purchaser designee.

SECTION 7.08. Debt Financing. (a) Purchaser shall, and shall cause its
Affiliates to, use reasonable best 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 Laws, and to execute and deliver, or cause to be
executed and delivered, such instruments and documents as may be required, to
arrange the Financing as promptly as reasonably practicable on the terms and
subject only to the conditions contained in the Financing Letters and, if
applicable, the Interim Facility Letter (or any replacement commitments obtained
by Purchaser in compliance with this Section 7.08), including, in the case of
the Debt Financing, to (i) satisfy, and cause its Affiliates to satisfy, on a
timely basis all conditions applicable to Purchaser or its Affiliates contained
in the Debt Commitment Letter or, if applicable, the Interim Facility Letter (or
any replacement commitments obtained by Purchaser in compliance with this
Section 7.08) and (ii) consummate the Debt Financing contemplated by the Debt
Commitment Letter or, if applicable, the Interim Facility Letter (or any
replacement commitments obtained by Purchaser in compliance with this
Section 7.08) at the Closing, including using its reasonable best efforts to
cause the financial institutions providing the Debt Financing to fund the Debt
Financing (including by taking enforcement action to cause such financial
institutions to fund the Debt Financing). Purchaser shall, and shall cause its
Affiliates to, refrain from taking, directly or indirectly, any action that is
reasonably likely to result in the failure of any of the conditions contained in
the Financing Letters and the Interim Facility Letter (or any replacement
commitments obtained by Purchaser in compliance with this Section 7.08) or in
any definitive agreement related to the Financing. Purchaser shall draw, and
shall use its reasonable best efforts to cause the Financing Lenders to fund at
Closing, the Interim Facility Letter in the event that the definitive facilities
contemplated by the Debt Commitment Letter have not been executed by the
Purchaser and the Financing lenders on or prior to the date that is three
(3) business days prior to the Closing. Purchaser shall cause the Equity Funds
to fund the Equity Financing at Closing.

(b) Purchaser shall not agree to or permit any amendment, supplement or other
modification of, or waive any of its rights under, any Financing Letter or the
Interim Facility Letter (or any replacement commitments obtained by Purchaser in
compliance with this Section 7.08) or the definitive agreements relating to the
Financing without Seller’s prior written consent, except that Purchaser may
amend, supplement or otherwise modify the Debt Commitment Letter or the Interim
Facility Letter (or any replacement commitments obtained by Purchaser in
compliance with this Section 7.08) if such amendment, supplement or other
modification (i) does not reduce the aggregate amount of the Debt Financings,
(ii) does not contain additional or modified conditions or other contingencies
to the funding of the Debt Financing relative to those contained in the Debt
Commitment Letter or the Interim Facility Letter, as the case may be (or any
replacement commitments obtained by Purchaser in compliance with this
Section 7.08) and (iii) is otherwise not reasonably likely to impair or delay

 

50

--------------------------------------------------------------------------------

the funding of the Debt Financing or the Closing (it being understood that,
subject to the requirements of this clause (b), such amendment, supplement or
other modification of the Debt Commitment Letter or the Interim Facility Letter,
as the case may be (or any replacement commitments obtained by Purchaser in
compliance with this Section 7.08), may provide for the assignment of a portion
of the commitments under the Debt Commitment Letter or the Interim Facility
Letter, as the case may be (or any replacement commitments obtained by Purchaser
in compliance with this Section 7.08), to additional agents or arrangers and
grant such persons approval rights with respect to certain matters as are
customarily granted to additional agents or arrangers).

(c) If any portion of the Financing becomes unavailable on the terms and
conditions contained in the Financing Letters or the Interim Facility Letter (or
any replacement commitments obtained by Purchaser in compliance with this
Section 7.08), Purchaser shall promptly notify Seller, and Purchaser shall use
its reasonable best efforts to obtain, as promptly as practicable following the
occurrence of such event, replacement commitments on terms that will enable
Purchaser to consummate the transactions contemplated by this Agreement and that
are not less favorable in the aggregate (as determined by Purchaser in its
reasonable judgment) to Purchaser and Seller than those contained in the
Financing Letters and/or the Interim Facility Letter, as the case may be (or any
replacement commitments obtained by Purchaser in compliance with this
Section 7.08); provided that such replacement commitments shall not (i) be
subject to any additional or modified conditions or other contingencies to the
funding of the Financing than those contained in the Financing Letters and/or
the Interim Facility Letter, as the case may be (or any replacement commitments
obtained by Purchaser in compliance with this Section 7.08) or (ii) otherwise be
reasonably likely to impair or delay the funding of the Financing or the
Closing. Purchaser shall deliver to Seller complete and correct copies of all
amendments, supplements, other modifications or agreements pursuant to which any
amended, supplemented, modified or replacement commitments shall provide
Purchaser with any portion of the Financing; provided that Purchaser may redact
from any such copies the fee amounts payable to their Financing sources.

(d) Purchaser shall keep Seller informed on a timely basis of the status of the
Financing and any material developments relating to the Financing.

(e) For the avoidance of doubt and notwithstanding anything to the contrary in
this Section 7.08, Purchaser acknowledges and agrees that its obligations to
consummate the transactions contemplated by this Agreement on the terms and
subject to the conditions set forth herein are not conditioned upon the
availability or consummation of the Debt Financing or receipt of the proceeds
therefrom.

SECTION 7.09. Benefits and Payroll Transition. Purchaser shall use its
reasonable best efforts to put in place the necessary personnel and systems to
enable Purchaser to administer its own benefit plans and payroll systems on the
Closing Date or as soon as reasonably practicable thereafter, with a view to
reducing both the extent and the duration of the transitional services with
respect to such matters to be provided to Purchaser pursuant to the Transitional
Services Agreement.

 

51

--------------------------------------------------------------------------------

SECTION 7.10. Joint Tender Contracts. Purchaser acknowledges that, in certain
international jurisdictions, Seller is a party to certain joint tender contracts
with third parties relating to the Business. Purchaser shall use its reasonable
best efforts to cause the Business to (a) comply with its obligations to supply
Products to Seller in connection with each such joint tender contract and
(b) otherwise cooperate with Seller in the administration of, compliance with
the terms of, and performance under, each such joint tender contract, in each
case, until the scheduled expiration of the term of such contract (or, if
earlier, the termination of such contract). Each of Seller and Purchaser
acknowledges and agrees that, upon the expiration of the term of each such joint
tender contract (or, if earlier, the termination of such contract), the parties
will not have any obligation to renew such joint tender contract.

ARTICLE VIII

Mutual Covenants

SECTION 8.01. Consents. Purchaser acknowledges that certain consents and waivers
with respect to the transactions contemplated by this Agreement may be required
from parties to the Transferred Real Property Contracts, the Transferred
Contracts and the Transferred Entity Contracts and issuers of the Transferred
Permits, the Transferred Entity Permits and the Transferred Environmental
Permits in order to transfer such Transferred Real Property Contracts,
Transferred Contracts, Transferred Entity Contracts, Transferred Permits,
Transferred Entity Permits or Transferred Environmental Permits to Purchaser and
that such consents and waivers have not been obtained. Purchaser agrees that,
except as provided in Section 1.05(b), Seller and its Affiliates shall not have
any liability or obligation whatsoever to Purchaser arising out of or relating
to the failure to obtain any consents or waivers that may be required in
connection with the transactions contemplated by this Agreement or because of
the termination of any Transferred Real Property Contract, Transferred Contract,
Transferred Entity Contract, Transferred Permit, Transferred Entity Permit or
Transferred Environmental Permit as a result thereof. Purchaser further agrees
that no representation, warranty or covenant of Seller contained herein shall be
breached or deemed breached, and no condition shall be deemed not satisfied, as
a result of (a) the failure to obtain any such consent or waiver, (b) any such
termination or (c) any lawsuit, action, proceeding or investigation commenced or
threatened by or on behalf of any person arising out of or relating to the
failure to obtain any such consent or waiver or any such termination except to
the extent Seller’s representations in Section 4.02 are untrue. Prior to the
Closing, Seller shall, and shall cause the Selling Affiliates and the
Transferred Entities to, (i) make the initial request for such consent or waiver
from the applicable third party and (ii) otherwise cooperate with Purchaser upon
its reasonable request in any reasonable manner in connection with Purchaser
obtaining any such consents and waivers; provided, however, that in each case
such cooperation shall not include any requirement of Seller or any of its
Affiliates (including the Selling Affiliates and the Transferred Entities) to
expend money, commence, defend or participate in any litigation, incur any
obligation in favor of, or offer or grant any accommodation (financial or
otherwise) to, any third party.

SECTION 8.02. Transition; Cooperation. (a) Purchaser and Seller shall cooperate
with each other, and shall cause their respective Representatives to cooperate
with each other, for a period of ninety (90) days after the Closing to ensure
the orderly transition of the Business from Seller to Purchaser and to minimize
any disruption to the respective

 

52

--------------------------------------------------------------------------------

businesses of Seller, the Selling Affiliates, the Transferred Entities and
Purchaser that might result from the transactions contemplated hereby. After the
Closing, upon reasonable written notice, Purchaser and Seller shall furnish or
cause to be furnished to each other and their respective Representatives
reasonable access, during normal business hours, to such information and
assistance relating to the Business, the Transferred Entities, the Acquired
Assets and the Assumed Liabilities as is reasonably necessary for financial
reporting and accounting matters, the preparation and filing of any Tax Returns,
reports or forms or the defense of any Tax claim, assessment or inquiry. Each
party shall use commercially reasonable efforts to avail itself of any available
exemptions from any Transfer Taxes or fees applicable to the Acquisition, and to
cooperate with the other party in providing any information and documentation
that may be necessary to obtain such exemptions. The obligation to cooperate
pursuant to the preceding sentence insofar as it concerns Taxes shall terminate
at the time the relevant applicable statute of limitations expires (giving
effect to any extension thereof). Each party shall reimburse the other for
reasonable out-of-pocket costs and expenses incurred in assisting the other
pursuant to this Section 8.02. Neither party shall be required by this
Section 8.02 to take any action that would (i) unreasonably interfere with the
conduct of its business or unreasonably disrupt its normal operations,
(ii) result in its forfeiture of any attorney-client privilege or (iii) violate
any Contract or applicable Law; provided that Seller shall, and shall cause the
Selling Affiliates and the Transferred Entities to, use commercially reasonable
efforts to make reasonable and appropriate substitute disclosure arrangements
under circumstances in which the restrictions on access set forth in clauses
(ii) or (iii) apply.

(b) From time to time, as and when requested by either party hereto, the other
party shall execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such further
or other actions (subject to the provisions of Sections 8.01 and 8.04), as such
other party may reasonably deem necessary or desirable to consummate the
transactions contemplated by this Agreement.

(c) Without limiting Sections 1.05(b) or 8.01(a), Purchaser, Seller and the
Selling Affiliates shall cooperate using their commercially reasonable efforts
to transfer, obtain, or to cause to be transferred or obtained, prior to the
Closing or as soon as practicable thereafter, any Permit or Environmental Permit
necessary for Purchaser to own or operate the Business, the Transferred Entities
or the Acquired Assets. During the period commencing on the date hereof and
continuing until one hundred eighty (180) days after the Closing, (i) each of
Seller, the Selling Affiliates and Purchaser shall provide or cause to be
provided to the other parties all commercially reasonable assistance as is
reasonably requested in connection with securing (and/or terminating, if
required by applicable Law or Environmental Law) any such Permits or
Environmental Permits and (ii) if any Permits or Environmental Permits are not
secured prior to the Closing, Seller, the Selling Affiliates and Purchaser shall
cooperate in good faith in any lawful and reasonable arrangement reasonably
proposed by either party under which Purchaser shall obtain the benefit of
Permits or Environmental Permits held by Seller or the Selling Affiliates in
connection with the ownership or operation of the Business, the Transferred
Entities or the Acquired Assets following the Closing; provided that such
assistance and cooperation shall not include any obligation to expend money to
any third party or Governmental Entity from whom such Permits or Environmental
Permits are requested under this Section 8.02(c), or to commence, defend or
participate in any litigation or offer or grant any accommodation (financial or
otherwise) to any third party.

 

53

--------------------------------------------------------------------------------

SECTION 8.03. Publicity. Seller and Purchaser agree that, from and after the
date hereof, no public release or announcement concerning this Agreement or the
transactions contemplated hereby shall be issued by either party or its
Affiliates without the prior written consent of the other party (which consent
shall not be unreasonably withheld or delayed), except as such release or
announcement may be required by applicable Law or the rules or regulations of
any United States or foreign securities exchange, in which case the party
required to make the release or announcement shall allow the other party
reasonable time to comment on such release or announcement in advance of such
issuance. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
agreed by the parties.

SECTION 8.04. Reasonable Best Efforts. Subject to the terms and conditions set
forth in this Agreement (including the provisions set forth in Sections 1.05(b)
and 8.05), each party hereto shall use its reasonable best efforts to cause the
Closing to occur. Without limiting the foregoing, Seller and Purchaser shall use
their respective reasonable best efforts to cause the Closing to occur on or
prior to July 1, 2008, or as soon as practicable thereafter. Each of Seller and
Purchaser shall not, and shall not permit any of their respective Affiliates to,
take any action that would, or that would reasonably be expected to, result in
any of the conditions set forth in Article III not being satisfied.

SECTION 8.05. Antitrust Notification and Other Regulatory Filings. (a) Purchaser
and Seller shall, as promptly as reasonably practicable, file with all
applicable U.S. and foreign Governmental Entities any notices and applications
necessary to obtain merger control or competition Law approval for the
Acquisition; provided that Seller shall have the right to review and provide
comments on any such notices and applications prior to their filing, consistent
with applicable Law. Without limiting the foregoing, Purchaser and Seller shall,
as promptly as reasonably practicable, but in no event later than fifteen
(15) business days after the date of this Agreement, file with the United States
Federal Trade Commission (the “FTC”) and the United States Department of Justice
(the “DOJ”) the notification and report form, if any, required under the HSR Act
for the transactions contemplated by this Agreement. Any such notices and
applications, including such HSR Act notification and report form, shall be in
substantial compliance with the requirements of the HSR Act or the applicable
foreign merger control or competition Law. Each of Seller and Purchaser shall
furnish to the other such necessary information and reasonable assistance as the
other may request in connection with its preparation of any filing or submission
which is necessary under the HSR Act or any such foreign merger control or
competition Law. Each of Seller and Purchaser shall keep each other apprised of
the status of any communications with, and any inquiries or requests for
additional information from, the FTC, the DOJ and any other Governmental Entity
and shall comply with any such inquiry or request as promptly as practicable,
but in no event later than five (5) business days after receipt of such inquiry
or request. Any such additional information shall be in substantial compliance
with the requirements of the HSR Act or the applicable foreign merger control or
competition Law. Purchaser agrees not to extend directly any waiting period
under the HSR Act or any foreign merger control or competition Law or enter into
any agreement with a Governmental Entity to delay or not to consummate the
transactions contemplated by this Agreement, except with the prior written
consent of Seller. Each of Seller and Purchaser shall use its best efforts to
obtain any clearance required under the HSR Act and any such foreign merger
control or competition Law for the consummation of the Acquisition.

 

54

--------------------------------------------------------------------------------

(b) Without limiting the generality of Purchaser’s obligations pursuant to
Section 8.05(a), if any administrative or judicial action or proceeding is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any competition or antitrust Law,
or if any Law or Injunction is enacted, entered, promulgated or enforced by a
Governmental Entity that would make the transactions contemplated by this
Agreement illegal or would otherwise prohibit or materially impair or delay the
consummation of the transactions contemplated by this Agreement, Purchaser shall
use its best efforts to resolve, contest or resist any such action or proceeding
and to have vacated, lifted, reversed or overturned any Injunction, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement and to have such Law or Injunction repealed, rescinded or made
inapplicable so as to permit consummation of the transactions contemplated by
this Agreement, including (i) selling, holding separate or otherwise disposing
of, or proposing and agreeing to sell, hold separate or otherwise dispose of, or
permitting the sale, holding separate or other disposition of, any assets of
Purchaser or its subsidiaries, or after the Closing, the Business and
(ii) conducting its business in a specified manner, or proposing and agreeing or
permitting to conduct its business in a specified manner. Solely with respect to
the Business, the Acquired Assets and the Transferred Entities, Seller will
cooperate with Purchaser in all respects in Purchaser’s implementation of any of
the measures described in the preceding sentence that is undertaken in order to
permit consummation of the transactions contemplated by this Agreement.

(c) If any approval or clearance required under an applicable merger control or
competition law in China is not obtained prior to the Closing, the Closing shall
nonetheless take place and, thereafter, Seller and the Selling Affiliates, on
the one hand, and Purchaser, on the other hand, shall cooperate in any lawful
and reasonable arrangement reasonably proposed by Purchaser (not including the
payment of any consideration) under which Purchaser shall obtain the economic
claims, rights and benefits under, and shall bear all the costs, liabilities and
burdens with respect to, the Business conducted in China (which shall not be
transferred to Purchaser at Closing and shall be held separate by Seller until
such approval is obtained at which time it shall be transferred to Purchaser);
provided that Purchaser shall pay or satisfy all the costs, expenses,
obligations and liabilities incurred by Seller or the Selling Affiliates in
connection with any such alternative arrangements (other than legal fees
incurred by Seller and the Selling Affiliates in connection with documenting and
negotiating such arrangement, which shall be borne by Seller).

SECTION 8.06. Support Services. Seller and its Affiliates (other than the
Transferred Entities) provide certain support services (“Support Services”) to
the Business and employees of the Business in connection with the operation of
the Business as conducted as of the date of this Agreement. Purchaser
acknowledges that, except to the extent provided in the Transitional Services
Agreement, all Support Services will be terminated as of the Closing Date.
Seller and its Affiliates shall use commercially reasonable efforts to take the
actions necessary to enable Seller and its Affiliates to perform in all material
respects as of and following Closing all services to be provided under the
Transitional Services Agreement.

SECTION 8.07. Tax Matters. (a) Seller and Purchaser agree in principle on an
allocation of the Final Purchase Price among (i) the Transferred Entities,
(ii) the portion of the Acquired Assets that relates to property, plant and
equipment and (iii) the portion of the Acquired Assets that relates to
inventory, working capital and accounts receivable on a

 

55

--------------------------------------------------------------------------------

jurisdiction-by-jurisdiction basis of 40% to the U.S., 45% to the U.K. and 15%
to all other countries (the “Initial Purchase Price Allocation”). For purposes
of this provision, the U.S. includes the Dominican Republic. Each of Seller and
Purchaser shall (i) further allocate the Initial Purchase Price Allocation among
the Transferred Entities and Acquired Assets in accordance with Section 1060 of
the Code and relevant provisions of local Law and (ii) use its best efforts and
work together in good faith to agree on such further allocation prior to the
Closing and to agree on any allocation of post-Closing adjustments in a timely
manner; provided, however, that the Seller and Purchaser agree that the amount
to be allocated to the Purchaser’s purchase of the stock of ConvaTec Dominican
Republic, Inc. shall be approximately $10,400,000. Each of Seller and Purchaser
shall (i) report the sale and purchase of the Transferred Entities and Acquired
Assets for United States and other Tax purposes in accordance with such
allocations determined in accordance with this Section 8.07(a), including as
required on Internal Revenue Service Form 8594 and (ii) not take any position
inconsistent with such allocations on any of its respective United States and
other Tax Returns except as otherwise required by Law.

(b) Seller and Purchaser shall be entitled to any refunds or credits relating to
Taxes arising out of, relating to or in respect of the Acquired Assets as
determined in Article I. The amount or economic benefit of any refunds or
credits of Taxes of the Transferred Entities, or of any affiliated,
consolidated, combined or unitary group of which a Transferred Entity is or has
been a member, for any Pre-Closing Tax Period shall be for the account of
Seller. The amount or economic benefit of any refunds or credits of Taxes of the
Transferred Entities for any Post-Closing Tax Period shall be for the account of
Purchaser unless such item relates to a carryforward in a Pre-Closing Tax
Period, in which case such item is for the account of Seller.

(i) Each party shall forward, or cause to be forwarded, to the party entitled
pursuant to this Section 8.07(b) to receive the amount or economic benefit of a
refund or credit of Taxes the amount of such refund or credit within ten
(10) days after such refund is received or after such credit is allowed or
applied against another Tax liability, as the case may be.

(ii) Purchaser shall waive any carrybacks to any Pre-Closing Tax Period to the
extent permitted by Law.

(iii) If, subsequent to a taxing authority’s allowance of a refund or credit,
such taxing authority reduces or eliminates such allowance, any refund or
credit, plus any interest received thereon, forwarded or reimbursed under this
Section 8.07 shall be returned to the party who had forwarded or reimbursed such
refund or credit and interest, upon the request of such forwarding party, in an
amount equal to the applicable reduction, including any interest received
thereon.

(c) To the extent permitted by Law or administrative practice, the taxable years
of the Transferred Entities shall end at the close of business on the Closing
Date.

 

56

--------------------------------------------------------------------------------

(d) Purchaser and Seller agree that:

(i) Seller shall timely prepare and file, or cause to be prepared and filed, on
a basis consistent with past practice, (A)(I) the United States consolidated
federal income Tax Returns that include the Transferred Entities and (II) where
applicable, all other Tax Returns of the Transferred Entities filed on a
consolidated, combined or unitary basis with Seller or any of its Affiliates, in
each case for taxable periods beginning on or before the Closing Date, and
(B) all other Tax Returns with respect to the Transferred Entities that are
required to be filed on or before the Closing Date. Seller shall timely pay, or
cause to be paid, any Taxes due with respect to such Tax Returns. Seller shall
provide the Purchaser with copies of such completed Tax Returns (or, in the case
of Tax Returns referred to in clause (A) of this Section 8.07(d)(i), the portion
of such Tax Returns relating to the Transferred Entities) at least twenty
(20) days before such Tax Returns are due and consider in good faith any
comments provided by the Purchaser. Purchaser shall pay Seller for the amount of
Taxes shown on such Tax Return to the extent the Taxes shown on the Tax Return
are an obligation of the Purchaser under Section 10.03(b) at least three
(3) days before the last day of the Tax shown on the Tax Return is due and
payable.

(ii) Purchaser shall timely prepare and file, or cause to be prepared and filed,
on a basis consistent with past practice (to the extent consistent with
applicable Law), all Tax Returns with respect to the Transferred Entities that
are required to be filed after the Closing Date and that relate to a taxable
period or portion thereof beginning on or before the Closing Date (other than
any Tax Return described in Section 8.07(d)(i)(A)). With respect to Tax Returns
for a Straddle Period, Purchaser shall provide Seller with a draft of any such
Tax Returns at least twenty (20) days before such Tax Return is due for approval
(which approval shall not be unreasonably withheld or delayed) and the Purchaser
will consider in good faith any comments provided by the Seller (and reasonably
accept any such comments to the extent relating to Taxes that are an obligation
of the Seller under Section 10.03(a)). The Purchaser shall timely pay, or cause
to be paid, any Taxes due with respect to such Tax Returns. Seller shall pay the
Purchaser for the amount of Taxes shown on such Tax Return to the extent the
Taxes shown on the Tax Return are an obligation of the Seller under
Section 10.03(a) at least three (3) days before the last day that the Tax shown
on the Tax Return is due and payable.

(iii) Notwithstanding anything herein to the contrary, any Tax Returns that must
be filed in connection with Transfer Taxes shall be prepared and filed when due
by the party primarily or customarily responsible under the applicable local Law
for filing such Tax Returns, and such party will use its commercially reasonable
efforts to provide such Tax Returns to the other party at least ten (10) days
prior to the due date for such Tax Returns.

(e) For all Tax purposes, Purchaser, Seller and each of their respective
Affiliates agree to treat any indemnity payment under this Agreement as an
adjustment to the Purchase Price received by Seller for the transactions
contemplated by this Agreement unless a final determination (as defined in
Section 1313 of the Code) provides otherwise.

 

57

--------------------------------------------------------------------------------

(f) Upon Purchaser’s request, Seller and Purchaser (or its relevant Affiliate)
shall timely make an election under Section 338(h)(10) of the Code (and similar
provision of state or local law) with respect to ConvaTec Dominican
Republic, Inc.

(g) All tax sharing agreements or similar agreements with respect to or
involving Seller or the Selling Affiliates, on the one hand, and the Transferred
Entities, on the other hand, shall be terminated as of the Closing Date and,
after the Closing Date, the Transferred Entities shall not be bound thereby or
have any liability thereunder.

(h) All amounts expressed in this Agreement as being payable by Purchaser with
respect to the Business and/or Acquired Assets are expressed to be exclusive of
any value added Tax (or similar Taxes) which may be chargeable and Purchaser
will pay to Seller in addition to such amounts, an amount equal to any value
added Tax (or similar Tax) for which Seller is liable to account to the
applicable Taxing authority in respect of any supply made to Purchaser under or
in connection with this Agreement upon production to Purchaser of a valid value
added Tax (or other similar Tax) invoice in respect of the sale of the Business
and/or Acquired Assets.

SECTION 8.08. Customer Databases. (a) At least twenty (20) business days prior
to the Closing Date, Seller shall, or shall cause a Selling Affiliate to, use
its commercially reasonable efforts to contact by letter or email (i) each
customer of Products in the United States that has not previously consented to
have its personal information transferred to a third party in connection with a
sale, disposition or other transfer of the Business (each such non-consenting
customer to be specifically identified on the master list, maintained by Seller
and its Affiliates, of customers of the Business within the United States (the
“U.S. Customer List”)) and (ii) each customer of Products in jurisdictions other
than the United States and Japan, the laws of which require the consent of a
customer for the transfer of such customer’s personal information to a third
party (each such customer to be specifically identified on the master list,
maintained by Seller and its Affiliates, of customers of the Business outside
the United States and Japan (the “Non-U.S. Customer List”)), in each case, to
allow each such person ten (10) business days to decline (or, in the case of
customers on the Non-U.S. Customer List, to the extent required by Law, to
permit or decline) to have such person’s identity and other personal information
provided to Purchaser (and, in the case of customers on the Non-U.S. Customer
List, to be transferred to a country designated by Purchaser), which election
shall be made by a reply letter, email or registration on a website designated
by Seller (or the applicable Selling Affiliate). Any person that Seller
reasonably determines it was unable to contact (e.g., if Seller does not have a
postal or an email address for such person or if Seller or the applicable
Selling Affiliate received an “undeliverable” response to a letter or an email
addressed to such person) or any person who did not reply to the communication
sent by Seller will be deemed to have declined to have such person’s identity
and personal information provided to Purchaser.

(b) Notwithstanding any provision of Section 1.02 to the contrary, upon the
Closing, Seller’s sole obligation with respect to each of the U.S. Customer List
and the Non-U.S. Customer List shall be to deliver to Purchaser a single
electronic copy of such list; provided that Seller shall, to the extent
necessary to comply with applicable Law, delete the identity and other personal
information of each person that declined (or was deemed to decline) to have such
information provided to Purchaser from the copy of the applicable list to be
delivered to Purchaser prior to delivery thereof. Subsequent to such delivery,
Seller shall delete and/or destroy any other copies of such lists and provide
written verification thereof.

 

58

--------------------------------------------------------------------------------

(c) At all times following the Closing, Purchaser shall have in place and
strictly observe a privacy policy with respect to the copy of U.S. Customer List
and the Non-U.S. Customer List that is at least as protective of the interests
of the persons identified on such customer lists in the privacy of their
respective identities and personal information as the privacy policy of Seller
as in effect on the date of this Agreement, a copy of which is included in
Section 8.08(c) of the Seller Disclosure Schedule.

(d) In the event a Selling Affiliate remains a “Data Controller,” as that term
is defined by the EU Data Protection Directive, in an EU member state after the
Closing, the provisions of Section 8.08(a) and (b) shall not apply and such
Selling Affiliate shall be permitted to retain its entire Non-U.S. Customer
List, without any deletion.

SECTION 8.09. Treasury, Payroll and Employee Benefit Transitional Services.
(a) From the date hereof through Closing, Purchaser shall use its reasonable
best efforts to acquire, lease, license, hire or otherwise put in place all
personnel, Contracts, assets and services necessary for Purchaser to perform
without assistance from Seller or any of its Affiliates, the Treasury Services,
the Payroll Services and the Benefit Services (each, a “Service” and,
collectively, the “Services”) on the Closing Date or as soon practicable
thereafter with a view to reducing the scope of each such Service to be provided
by Seller following the Closing (including the jurisdictions in which each such
Service is to be provided and the duration of each such Service), and Seller
shall cooperate with such efforts by Purchaser; provided that none of Seller or
any of its Affiliates shall be obligated to hire any personnel, independent
contractors or consultants, to incur any out-of-pocket costs or expenses, or to
enter into any binding Contract or other arrangement under which Seller or such
Affiliate will incur any Liability other than a Liability of a Transferred
Entity arising after the Closing. To the extent that Seller determines (in
consultation with Purchaser) that it is reasonably necessary to hire any
personnel, independent contractors or consultants, incur any out-of-pocket costs
or expenses, or to enter into any binding Contract or other arrangement (the
“Set-Up and Administrative Costs”) in order to provide any Payroll Service or
Benefit Service, all such Set-Up and Administrative Costs (including the cost of
legal, IT and other services) and such costs incurred by Seller after such
Services are no longer required and which are necessary in order to return its
payroll and benefits administrative function to its pre-provision of Services
status (the “Post-Services Costs”) shall be borne solely by Purchaser, and
Purchaser shall fully indemnify Seller for such Set-Up and Administrative Costs
and such Post-Services Costs incurred prior to, on and after the Closing Date,
whether or not such Services are actually needed or utilized post-Closing. The
payment of such Set-Up and Administrative Costs and such post-services costs
shall be in addition to the $20,000,000 payment by Purchaser specified in
Section 3(c) of the Transitional Services Agreement. For the avoidance of doubt,
no termination, amendment or modification of any Benefit Plan, program or
arrangement shall be required to be made by Seller or any of its Affiliates in
order to provide any Benefit Service. Furthermore, nothing herein shall prevent
Seller or any of its Affiliates from making changes to its Benefit Plans,
programs and arrangements following the Closing Date; provided that (i) such
change does not apply exclusively to Business Employees but generally to all
participants in such Benefit Plan, regardless of whether such participants are
Business Employees and (ii) such change does not cause Purchaser to Breach its
covenant under Section 9.05(a).

 

59

--------------------------------------------------------------------------------

(b) If Purchaser shall have complied in all material respects with its
obligations under Section 8.09(a), and Purchaser shall not have in place all
such personnel, Contracts, assets and services necessary for Purchaser to
provide all the Services to the Business at the effective time of Closing
without receiving any portion of or all of one or more of the Services from
Seller, then (i) with respect to each Service, Seller shall provide, or cause
one or more of its controlled Affiliates to provide, subject to applicable Law,
the portion of each such Service (as shall be mutually agreed by Seller and
Purchaser) that Purchaser is not yet able to provide in each such jurisdiction
as may still be required on the terms and conditions set forth in the
Transitional Services Agreement for such Service for a period of up to three (3)
months at a cost payable monthly at a fixed amount equal to (i) one hundred
fifteen percent (115%) of the Seller’s or such Affiliate’s fully allocated costs
of providing such Service and (ii) where Purchaser requests with sixty (60)
days’ prior written notice to Seller or such Affiliate an extension of the term
of the relevant Service (up to a maximum of an additional three (3) months), one
hundred and fifty percent (150%) of Seller’s or such Affiliate’s fully allocated
costs of providing such services, plus a percent allocation of related overhead
expenses, including supplies, mailing, telecommunications, occupancy
depreciation insurance and system support. Any significant efforts related to
non-routine activities shall be billed at a rate per hour to be agreed by the
parties; provided, however, that Seller or such Affiliate may not bill Purchaser
for such efforts unless Purchaser has received notification thereof in advance
and consented in writing to the undertaking of such effort, such notification
not to be unreasonably withheld or delayed (it being understood that Seller or
such Affiliate shall not be obligated to utilize any such significant efforts
related to activities outside of what is routine unless Purchaser shall have
provided such consent).

(c) For purposes of this Section 8.09, the following terms shall have the
following meanings:

“Payroll Services” means the services currently provided to the Business by
Seller or one or more of its Affiliates related to the compensation and
reimbursement of Business Employees.

“Benefits Services” means benefit administration support services currently
provided to the Business by Seller or one or more of its Affiliates with respect
to the Benefits Plans currently in place for Business Employees.

“Treasury Services” means treasury services related to the management and
monitoring of cash transactions and bank accounts currently provided to the
Business by Seller or one or more of its Affiliates, which, for the avoidance of
doubt, shall not include funding of any cash disbursements.

ARTICLE IX

Employee Matters

SECTION 9.01. Employees; Assumption of Terms and Conditions of Employment;
Continuation of Employment; General Principles. (a) For purposes of this Article

 

60

--------------------------------------------------------------------------------

IX, Business Employees (as defined) shall also include such other employees who
may be hired by Seller or its Affiliates for the Business between the date
hereof and the Closing Date and whose services primarily relate to the Business,
in each case whether employed within or outside the United States, whether
active or on vacation, holiday, jury duty, bereavement or other leave of absence
or on short-term disability or long-term disability, but excluding, in each
case, employees whose services primarily relate to the Excluded Assets.

(b) With respect to those Business Employees (other than Business Employees of
any Transferred Entity or except as required by applicable Law) who are not
actively at work on the Closing Date because they are on approved long-term
disability or short-term disability leave in accordance with the applicable
Benefit Plan (“Inactive Business Employees”), from and after the Closing Date,
Seller shall continue to provide such Inactive Business Employees with
disability coverage under the applicable Benefit Plan to the extent consistent
with the terms of the applicable Benefit Plan; provided that if any such
Inactive Business Employee returns to active work at the conclusion of such
leave (and it being understood that Purchaser and its Affiliates shall offer
employment to each such Inactive Business Employee who becomes ready, willing
and able to return to active work within twelve (12) months after the Closing
Date or as otherwise required by applicable Law), such Inactive Business
Employee shall become a “Transferred Employee” for purposes hereunder as of the
date of such individual’s return to active employment with the Business (such
date, the “Commencement Date”).

(c) Where applicable Law or rules provide for the transfer of employment of any
Business Employee upon a sale of the Business, Purchaser and Seller shall take
or cause to be taken such actions as are required under applicable Law to
accomplish such transfer of employment of such Business Employee to Purchaser or
an Affiliate of Purchaser as a matter of Law as of the Closing. Where applicable
Law or rules do not provide for the transfer of employment of any Business
Employee upon the sale of the Business to Purchaser or any of its Affiliates,
Purchaser shall, or shall cause one of its Affiliates to, make offers of at-will
(to the extent permitted by applicable Law) employment in accordance with the
provisions of this Article IX, to be effective as of the Closing, to all such
Business Employees.

(d) To the extent not provided for by operation of Law, Purchaser shall, and
shall cause its Affiliates to, make offers of at-will (to the extent permitted
by applicable Law) employment to the Business Employees (subject to
Section 9.01(b)), in accordance with the provisions of this Article IX, at least
fifteen (15) days prior to the Closing Date (or such longer period required by
applicable Law, collective bargaining agreement, trade union agreement or works
council agreement), to be effective as of the Closing. Except as otherwise
provided in this Article IX, each offer of employment by Purchaser or its
Affiliate to each Business Employee shall in each case provide a base salary (or
wages) and bonus target no less favorable than the base salary and bonus target
provided to such Business Employee immediately prior to the Closing Date and
such other terms and conditions (including, but not limited to, pension and
welfare benefits, but excluding stock-based compensation) that are no less
favorable in the aggregate than those provided to such Business Employee
immediately prior to the Closing Date; provided, however, that Purchaser and its
Affiliates shall not be obligated to offer or to provide any defined benefit
pension plan except where required by applicable Law, collective bargaining
agreement, trade union agreement or works council agreement. Prior to the
Closing, Purchaser shall set forth in a Purchaser Disclosure Letter the employee
benefits that shall be provided to

 

61

--------------------------------------------------------------------------------

Transferred Employees on the Closing Date and through the Continuation Period
set forth in Section 9.05(a) on a country by country basis. Section 9.01(d) of
the Seller Disclosure Schedule sets forth the name, title or job position, base
salary (or wages) and target bonus, as in effect as of the Closing Date, with
respect to each Business Employee (which Schedule is attached to the document
entitled “Confidential—Employee Benefit Matter Information” (the “Confidential
Employee Benefit Letter”)). Each Business Employee whose employment transfers
from Seller or an Affiliate of Seller to any Purchaser or an Affiliate of
Purchaser on the Closing by operation of Law, and each Business Employee who
accepts the offer of employment from Purchaser or an Affiliate of Purchaser, is
referred to herein as a “Transferred Employee”. Transferred Employees who are
employed primarily within the United States or Puerto Rico immediately prior to
the Closing are referred to herein as “U.S. Transferred Employees”. Transferred
Employees who are employed primarily outside of the United States and Puerto
Rico immediately prior to the Closing are referred to herein as “Foreign
Transferred Employees”. If any Transferred Employee requires a work permit or an
employment pass or other approval for his or her employment to continue with
Purchaser or an Affiliate of Purchaser following the Closing or the Commencement
Date, as applicable, Purchaser shall use its, or shall cause its Affiliate to
use its, commercially reasonable efforts to ensure that any necessary
applications are promptly made and to secure prior to Closing or the
Commencement Date, as applicable, the necessary permit, pass or other approval.

(e) Without limiting Purchaser’s obligations under Section 9.01(d), Purchaser or
an Affiliate of Purchaser, as the case may be, shall use commercially reasonable
efforts to make the offers of employment described in Section 9.01(d) on terms
and conditions sufficient to avoid statutory severance or similar obligations
under applicable Law, except to the extent such severance or similar obligations
arise without regard to such terms. Notwithstanding any other provision of this
Article IX to the contrary, if applicable Law requires Seller or its Affiliates
to make any payment or provide any benefit to any Business Employee in the event
Purchaser and its Affiliates do not offer to provide such Business Employee with
a specified level of compensation or benefits, then Purchaser and its Affiliates
shall offer to provide such level of compensation or benefits to the extent
necessary to prevent Seller and its Affiliates from being so obligated to such
Business Employee. Seller and Purchaser intend that for purposes of any
severance or termination benefit plan, program, policy, agreement or arrangement
of Seller and its Affiliates, the transactions contemplated by this Agreement
shall not constitute a severance of employment of any Transferred Employee prior
to or upon the consummation of the transactions contemplated hereby, and that
Transferred Employees will have continuous and uninterrupted employment
immediately before, during and immediately following the Closing. Purchaser
shall assume and be solely responsible for all obligations, liabilities and
commitments in respect of claims made by any Business Employee for severance or
other termination pay or other benefits (including, but not limited to, claims
for wrongful dismissal, constructive dismissal, notice of termination of
employment, pay in lieu of notice or termination, termination indemnities or
other indemnities, any damages arising from a breach of a Business Employee’s
employment contract, and any payments required to be made under any Law of any
jurisdiction or the applicable collective bargaining agreement in respect of the
termination of the Business Employee’s employment, including payments in respect
of accrued wages, vacation, overtime, bonuses and other plans, programs or
obligations) arising out of, relating to or in connection with (i) Purchaser’s
failure to offer employment to any Business Employee (or failure to continue the
employment of any Business Employee of a Transferred Entity) or failure to offer
or continue

 

62

--------------------------------------------------------------------------------

employment on terms and conditions which would preclude any claims of
constructive dismissal or similar claims under any applicable Law or other
failure to comply with the terms of this Agreement or (ii) where any such
severance or termination benefits are required to be paid under applicable Law
upon the Closing without regard to such terms and conditions or such
continuation of employment. From and after the Closing, Purchaser shall
indemnify and hold harmless Seller and its Affiliates against all Losses which
Seller may suffer or incur as a result of any claim, action or any proceeding
made by any Business Employee against Seller or its Affiliates from and after
the Closing Date or arising from any breach of Purchaser’s obligations under
Section 9.01.

(f) Seller and Purchaser and its Affiliates acknowledge and agree that under the
provisions implementing Council Directive 2001/23/EC (the “Acquired Rights
Directive”), the contracts of employment between Seller and/or its Affiliates
and the Foreign Transferred Employees and, subject to applicable Law, any labor
or collective bargaining agreement or works council agreement shall have effect
for the Foreign Transferred Employees employed primarily in Europe as if
originally made between Purchaser or any of its Affiliates and the Foreign
Transferred Employees or between Purchaser or any of its Affiliates and the
other parties to the labor or collective bargaining agreements or works council
agreements (as the case may be).

(g) As of the Closing, Purchaser shall assume, or shall cause an Affiliate of
Purchaser to assume, any labor or collective bargaining agreements, works
council agreements or trade union agreements in effect with respect to any
Foreign Transferred Employee.

SECTION 9.02. Assumption of Liabilities. (a) Unless otherwise expressly provided
in this Article IX, Seller and its Affiliates shall retain liability and
responsibility for all employment, compensation, severance and employee
benefit-related Liabilities, obligations and commitments (including, but not
limited to, claims for wrongful dismissal, constructive dismissal, unfair
dismissal, notice of termination of employment, pay in lieu of notice or
termination, termination indemnities or other indemnities, any damages arising
from a breach of a Business Employee’s or Former Business Employee’s employment
contract, and any payments required to be made under any Law of any jurisdiction
or the applicable collective bargaining agreement in respect of the termination
of a Business Employee’s or Former Business Employee’s employment, including
payments in respect of accrued wages, vacation, overtime, bonuses and other
plans, programs or obligations) (i) arising prior to the Closing Date that
relate to any current or former officer, director, employee or independent
contractor of the Business including any Former Business Employee or any
Business Employee (or any dependent or beneficiary thereof); (ii) or arising on
or after the Closing Date that relate to any Business Employee to whom Seller
and its Affiliates offer employment between the date hereof and the Closing; or
(iii) arising between the Closing Date and the Commencement Date that relate to
any Inactive Business Employee.

(b) (i) Unless otherwise expressly provided in this Article IX, effective as of
the Closing Date, Purchaser shall, or shall cause an Affiliate of Purchaser to,
assume and be solely responsible and liable for all employment, compensation,
severance and employee benefit-related Liabilities, obligations and commitments
arising on or after the Closing Date (including, but not limited to, claims for
wrongful dismissal, constructive dismissal, unfair dismissal, notice

 

63

--------------------------------------------------------------------------------

of termination of employment, pay in lieu of notice of termination, termination
indemnities or other indemnities, any damages arising from a breach of a
Transferred Employee’s, Business Employee’s or Former Business Employee of a
Transferred Entity’s employment contract, and any payments required to be made
under any Law of any jurisdiction or the applicable collective bargaining
agreement in respect of the termination of a Transferred Employee, or Former
Business Employee of a Transferred Entity’s employment including payments in
respect of accrued wages, vacation, overtime, bonuses and other plans, programs
or obligations) that relate to any Transferred Employee or such Former Business
Employee; (ii) Seller and its Affiliates shall, solely in relation to
obligations triggered by the sale of the Business, including the sale of any
Transferred Entity, retain all Liabilities and responsibilities arising from
Seller’s and its Affiliates’ failure to perform and discharge any obligation and
requirement of Seller or its Affiliates to inform and consult with any works
council or union or employee representatives and under the Acquired Rights
Directive or under transfer of undertakings in the applicable foreign
jurisdiction prior to the Closing that relate to any Former Business Employee,
Business Employee or Transferred Employee (or any dependent or beneficiary
thereof) incurred prior to, on or after the Closing Date. Purchaser shall, or
shall cause an Affiliate of Purchaser to, solely in relation to obligations
triggered by the sale of the Business, including the sale of any Transferred
Entity, assume all Liabilities and responsibilities arising from Purchaser’s or
its Affiliate’s failure to perform and discharge any obligation or requirement
of Purchaser or its Affiliate to inform and consult with any works council or
union or employee representatives and under the Acquired Rights Directive or
under transfer of undertakings in the applicable foreign jurisdiction prior to
Closing that relate to any Former Business Employee, Business Employee of a
Transferred Entity or Transferred Employee (or any dependent or beneficiary
thereof) incurred prior to, on or after the Closing Date.

(c) Purchaser and its Affiliates shall be liable for Liabilities relating to the
litigations and claims set forth in Section 9.02(c) of the Seller Disclosure
Schedule.

(d) Seller and its Affiliates shall retain all liabilities and obligations for
all workers’ compensation, short- and long-term disability, medical,
prescription drug, dental, vision, life insurance, accidental death and
dismemberment and other welfare benefit claims incurred by Business Employees
(other than Business Employees of any Transferred Entity) prior to the Closing
Date or incurred by Inactive Business Employees prior to becoming Transferred
Employees that are covered under the terms of the applicable plans of Seller or
its Affiliates. With respect to claims incurred prior to the Closing with
respect to Business Employees of the Transferred Entities and with respect to
claims incurred on or after the Closing Date or the Commencement Date, as
applicable, by the Transferred Employees and their eligible dependents for
workers’ compensation, short- and long-term disability, medical, prescription
drug, dental, vision, life insurance, accidental death and dismemberment and
other welfare benefit claims, Purchaser, or its Affiliates, shall be
responsible. For these purposes, a claim shall be deemed to be incurred: (i) in
the case of workers’ compensation and short- or long-term disability benefits
(including related health benefits), at the time of the injury, sickness or
other event giving rise to the claim for such benefits; (ii) in the case of
medical, prescription drug, dental or vision benefits, at the time professional
services, equipment or prescription drugs covered by the applicable plan are
obtained; (iii) in the case of life insurance benefits, upon death; and (iv) in
the case of accidental death and dismemberment benefits, at the time of the
accident. For the avoidance of doubt and notwithstanding anything to the
contrary set forth

 

64

--------------------------------------------------------------------------------

herein, this Section 9.02(d) shall not apply to any claims, Liabilities or
obligations arising out of or relating to exposure of any Business Employee,
Former Business Employee, Transferred Employee or former employee or independent
contractor of the Transferred Entities or the Business to Hazardous Materials,
which matters shall be addressed exclusively by the provisions of Sections
1.03(a)(ii) and 4.17 herein.

(e) Except as specifically set forth in this Article IX or required by
applicable Law, collective bargaining agreement, trade union agreement or works
council agreement: (i) none of Purchaser nor its Affiliates shall be obligated
to assume, continue or maintain any of the Benefit Plans that are sponsored or
maintained by Seller or any Affiliate of Seller (other than a Transferred
Entity); (ii) no assets or Liabilities of any such Benefit Plans shall be
transferred to, or assumed by, Purchaser or its Affiliates or their respective
benefit plans; and (iii) Seller and its Affiliates (other than the Transferred
Entities) shall be solely responsible for funding and/or paying any benefits
under such Benefit Plans, including any termination benefits and other employee
entitlements accrued under such plans by or attributable to employees of any of
the Seller or its Affiliates.

(f) Seller shall indemnify and keep indemnified each of Purchaser and its
Affiliates against any Liability relating to: (i) any Liability which may be
treated as due from Purchaser or its Affiliates in relation to the trustees of
any occupational pension scheme operated for the benefit of Transferred
Employees who are employed primarily in the United Kingdom (the “UK Transferred
Employees”), including the Bristol-Myers Squibb Pension Plan (the “Seller’s UK
DB Pension Plan”) and the Seller’s supplemental pension and ancillary benefits
provision as described in the December 13, 2007 letter to certain UK Transferred
Employees (the “Seller’s UK Supplemental Pension Program”) under section 75 or
section 75A of the United Kingdom Pensions Act 1995 (as amended) to the extent
that the Liability arises out of or in connection with an employment cessation
event (within the meaning of the Occupational Pension Schemes (Employer Debt)
Regulations 2005 (as amended)) as a result of the transactions contemplated by
this Agreement; and (ii) any contribution notice or financial support direction
that may be issued pursuant to the Pensions Act 2004 in relation to any
occupational pension scheme operated prior to Closing for the benefit of the UK
Transferred Employees, including Seller’s UK DB Pension Plan and Seller’s UK
Supplemental Pension Program.

SECTION 9.03. Independent Contractors. Effective as of the Closing,
(i) Purchaser shall, or shall cause its Affiliates to, assume all contracts,
obligations and liabilities with respect to independent contractors working for
the Business on the Closing Date and (ii) Purchaser shall indemnify and hold
Seller and its Affiliates harmless against any such contracts, liabilities,
obligations or any and all Losses which Seller or its Affiliates may suffer or
incur as a result of any claim, action or other proceeding made by such
independent contractor against Seller or its Affiliates from and after the
Closing Date or arising from any breach of Purchaser’s obligations under this
Section 9.03.

SECTION 9.04. Credited Service. Purchaser shall, or shall cause its Affiliates
to, credit service accrued by Transferred Employees with, or otherwise
recognized for purposes of benefit plans, programs, policies or arrangements by,
Seller or its Affiliates as of the Closing (the “Pre-Closing Service”) for all
purposes (other than for benefit accrual purposes under any

 

65

--------------------------------------------------------------------------------

defined benefit pension plan of Purchaser or its Affiliates unless required by
applicable Law) under the benefit plans, programs, policies and arrangements
(including any pension, 401(k), savings, profit-sharing, medical, dental, life
insurance, vacation, vacation bonus, seniority payment, post-retirement health
and life insurance, equity, severance, indemnification or separation pay plans
and benefits under the applicable collective bargaining agreement) of Purchaser
and its Affiliates.

SECTION 9.05. Continuation of Compensation and Benefits. (a) Without limiting
the generality of Section 9.01, from the Closing Date through at least
December 31, 2009 (the “Continuation Period”), Purchaser or an Affiliate of
Purchaser shall (except as otherwise required by applicable Law, collective
bargaining agreement, trade union agreement or works council agreement) provide
each Transferred Employee with base salary (or wages) and bonus target that in
each case is no less favorable than the base salary (or wages) and bonus target
provided to such Transferred Employee immediately prior to the Closing Date.
During the Continuation Period, Purchaser shall maintain, or cause an Affiliate
of Purchaser to maintain, employee benefits and compensation plans (excluding
equity compensation plans), programs, arrangements, and perquisites for the
Transferred Employees that are no less favorable in the aggregate than those
provided to such Transferred Employees immediately prior to the Closing Date;
provided, however, that Purchaser and its Affiliates shall not be obligated to
maintain any defined benefit pension plan except where required by applicable
Law, collective bargaining agreement, trade union agreement or works council
agreement.

(b) Purchaser shall provide, or cause an Affiliate of Purchaser to provide, to
each U.S. Transferred Employee whose employment terminates during the
Continuation Period, cash severance benefits equal to the greater of (x) the
cash severance payable, if any, under the applicable severance plan of Purchaser
or an Affiliate of Purchaser (the “Purchaser’s Severance Plan”) based on the
eligibility criteria applicable under Purchaser’s Severance Plan as then in
effect, and subject to the terms and conditions of Purchaser’s Severance Plan,
or (y) the cash severance payable, if any, under the terms and conditions set
forth in Section 9.05(b) of the Seller Disclosure Schedule, based on the
eligibility criteria, and subject to the terms and conditions set forth in
Section 9.05(b) of the Seller Disclosure Schedule. With respect to any U.S.
Transferred Employee whose employment is terminated during the Continuation
Period, Purchaser shall further provide, or cause an Affiliate of Purchaser to
provide, to U.S. Transferred Employees who are entitled to cash severance
pursuant to the preceding sentence payment for all medical and dental coverage
to which such U.S. Transferred Employees are eligible pursuant to the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for the number of weeks
corresponding to the number of weeks of base salary (or wages) covered by their
cash severance payments and at an employee cost no greater than the then-current
cost of such medical and dental coverage for active employees of Purchaser or
its Affiliates. Purchaser shall, and shall cause its Affiliates to, refrain from
enticing, encouraging or requiring any U.S. Transferred Employee to elect to
receive COBRA coverage from Seller on or following the Closing Date.

(c) Purchaser shall provide, or cause an Affiliate of Purchaser to provide, to
each Foreign Transferred Employee whose employment is terminated by Purchaser or
its Affiliates during the Continuation Period severance and other separation
benefits that are no less favorable than the severance and other separation
benefits described in Section 9.05(c) of the Seller Disclosure Schedule.
Purchaser shall also assume and be solely responsible for paying any other

 

66

--------------------------------------------------------------------------------

severance obligations that are payable under applicable Law, collective
bargaining agreement, trade union agreement or works council agreement as a
result of termination of a Foreign Transferred Employee’s employment with
Purchaser or its Affiliates after the Closing Date. Nothing herein shall be
construed as giving any Foreign Transferred Employee any right to continued
employment with Purchaser or its Affiliates following the Closing other than as
required by applicable Law, employment contracts, collective bargaining
agreements, trade union agreements or works council agreements, or as expressly
provided in this Article IX.

SECTION 9.06. U.S. and Puerto Rico Savings and Investment Plans; Vesting.
(a) Without limiting the generality of Section 9.05, effective as of the Closing
Date, Purchaser or an Affiliate of Purchaser shall have in effect (i) a defined
contribution plan that includes a qualified cash or deferred arrangement within
the meaning of Section 401(k) of the Code intended to be qualified pursuant to
Section 401(a) of the Code (the “Purchaser’s U.S. 401(k) Plan”) and (ii) a
defined contribution plan that includes a qualified cash or deferred arrangement
within the meaning of Section 401(k) of the Code intended to be qualified
pursuant to both Section 401(a) of the Code and the PR Code (the “Purchaser’s PR
401(k) Plan”), which will provide during the Continuation Period benefits,
rights and features to U.S. Transferred Employees, who immediately prior to the
Closing are participants or who would be permitted during the Continuation
Period to become participants in the Bristol-Myers Squibb Company Savings and
Investment Program (“U.S. SIP”) or the Bristol-Myers Squibb Puerto Rico, Inc.
Savings and Investment Program (“PR SIP”), that pursuant to the terms thereof
are substantially identical in all material respects (except for such changes as
may be required by Law or as provided below) to those provided by the U.S. SIP
and the PR SIP immediately prior to the Closing. Each U.S. Transferred Employee
participating in the U.S. SIP or the PR SIP immediately prior to the Closing
shall become a participant in Purchaser’s U.S. 401(k) Plan or Purchaser’s PR
401(k) Plan (as applicable) as of the Closing. U.S. Transferred Employees shall
receive credit for all service with Seller and its Affiliates for purposes of
eligibility and vesting under Purchaser’s U.S. 401(k) Plan and Purchaser’s PR
401(k) Plan (as applicable).

(b) At such time as Seller is reasonably satisfied that Purchaser’s 401(k) Plan
meets the requirements for qualification under Section 401(a) of the Code and
that Purchaser’s PR 401(k) Plan meets the requirements for qualification under
both Section 401(a) of the Code and the PR Code, Seller shall cause the U.S. SIP
and the PR SIP to transfer to the trusts that form a part of Purchaser’s 401(k)
Plan and Purchaser’s PR 401(k) Plan (as applicable) cash, assets (including
shares of Seller common stock, to the extent U.S. Transferred Employees’
accounts are invested in Seller common stock) or a combination thereof (the
“Asset Transfer”) in an amount equal to the account balances of the U.S.
Transferred Employees (including any promissory notes evidencing outstanding
loan balances under the U.S. SIP and the PR SIP) as of the valuation date for
the U.S. SIP and the PR SIP next preceding such transfer, and Purchaser shall
cause Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan (as applicable) to
accept such transfer. Seller shall debit the accounts of each U.S. Transferred
Employee under the U.S. SIP and the PR SIP by the amount transferred to
Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan, and Purchaser shall
allocate the cash and property transferred to Purchaser’s 401(k) Plan and
Purchaser’s PR 401(k) Plan to the accounts of U.S. Transferred Employees by
crediting such accounts in relative proportion to the amount debited from the
U.S. Transferred Employees’ accounts under the U.S. SIP and the PR SIP. To the
extent permitted by applicable Law, Purchaser’s 401(k) Plan and Purchaser’s PR
401(k) Plan shall maintain an investment option

 

67

--------------------------------------------------------------------------------

consisting primarily of investments in Seller’s common stock (the “Seller’s
Stock Fund”) for a period of no fewer than twelve (12) months following the
Closing Date; provided, however, that U.S. Transferred Employees participating
in Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan will be permitted to
transfer amounts out of Seller’s Stock Fund, but no additional amounts will be
permitted to be invested in or transferred into Seller’s Stock Fund.

(c) Following such Asset Transfer, Purchaser and/or Purchaser’s 401(k) Plan and
Purchaser’s PR 401(k) Plan shall assume all liabilities and obligations of
Seller and its Affiliates under the U.S. SIP and the PR SIP with respect to U.S.
Transferred Employees and their beneficiaries, and Seller and its Affiliates
shall have no further liability to Purchaser or any U.S. Transferred Employees
with respect thereto. Purchaser shall indemnify and hold Seller and its
Affiliates and the U.S. SIP and the PR SIP harmless against any such
liabilities, obligations, benefits, acts, omissions and transactions.

(d) Purchaser shall assume all liability with respect to benefits under Seller’s
Benefit Equalization Plan – Savings and Investment Program that are accrued
prior to the Closing Date with respect to U.S. Transferred Employees who
participate in such plan.

(e) Seller shall take all action necessary to provide that all U.S. Transferred
Employees who participate in the U.S. SIP or the PR SIP or the Bristol-Myers
Squibb Company Retirement Income Plan or the Bristol-Myers Squibb Puerto Rico,
Inc. Retirement Income Plan have a fully vested and non-forfeitable right to
their entire account balances or entire accrued benefit, as applicable, under
such plans as of the Closing Date.

SECTION 9.07. U.S. Medical and Dental Plans. (a) Without limiting the generality
of Section 9.05, effective as of the Closing, Purchaser shall make available to
each U.S. Transferred Employee (and his or her eligible dependents) who is
enrolled immediately prior to the Closing in the medical, dental and
prescription drug benefit plans and programs of Seller and its Affiliates
(collectively, “Seller’s Health Plans”) participation in medical, dental and
prescription drug plans and programs maintained or contributed to by Purchaser
or its Affiliates (collectively, “Purchaser’s Health Plans”). Purchaser’s Health
Plans shall provide, during the Continuation Period, benefits to each U.S.
Transferred Employee that are substantially comparable in the aggregate to those
provided under Seller’s Health Plans. Any and all waiting periods and
pre-existing condition exclusions and actively-at-work requirements shall be
waived under Purchaser’s Health Plans with respect to the U.S. Transferred
Employees and their eligible dependents, to the extent such employee or
dependent was not subject to any such waiting periods, exclusions or
requirements under a similar Seller’s Health Plan in which such employee or
dependent participated immediately prior to the Closing Date. In addition,
Purchaser shall cause Purchaser’s Health Plans to recognize any out-of-pocket
medical and dental expenses incurred by the U.S. Transferred Employees and their
eligible dependents prior to the Closing and during the calendar year in which
the Closing occurs for purposes of satisfying any applicable deductibles and
out-of-pocket maximums under Purchaser’s Health Plans, to the same extent so
recognized under a similar Seller’s Health Plan prior to the Closing Date.

(b) Notwithstanding any other provision of this Agreement to the contrary,
(A) Seller agrees to provide or cause to be provided to each individual who
retires on or after the Closing Date and who was, immediately prior to the
Closing Date, formerly employed by Seller

 

68

--------------------------------------------------------------------------------

or its Affiliates in connection with the Business and each Business Employee who
is eligible to retire on or immediately prior to the Closing (and such
employee’s eligible dependents) retiree health care benefits and coverage set
forth in the Comprehensive Medical Summary Plan Description of Bristol-Myers
Squibb Company, or such other retiree benefit plan or arrangement of Seller or
its Affiliates that is applicable to such individual or employee immediately
prior to the Closing ( “Seller’s Retiree Health Plan”) with such retiree health
care benefits and coverage set forth in the Seller’s Retiree Health Plan; and
(B) Purchaser shall provide or cause to be provided under Purchaser’s Health
Plans to each U.S. Transferred Employee (and his or her eligible dependents) who
is not described in the immediately preceding clause (A), but who would have
satisfied the eligibility requirements for retiree health care benefits and
coverage set forth in Seller’s Retiree Health Plan within the Continuation
Period had such Transferred Employee’s service as an employee of Purchaser or
its Affiliate during the Continuation Period been service as an employee of
Seller or its Affiliate, and who retires on or after the Closing Date and during
the Continuation Period either (i) health care benefits and coverage that are
substantially comparable in the aggregate to those set forth in Seller’s Retiree
Health Plan (or that would have been applicable had such U.S. Transferred
Employee been eligible to retire immediately prior to the Closing) without
regard to any Rule of 70 benefit, or (ii) if more favorable to such U.S.
Transferred Employee than the foregoing, the health care benefits and coverage
that are provided to similarly situated retirees of Purchaser and its
Affiliates; provided that such U.S. Transferred Employee’s participation cost
shall be taken into account for purposes of determining whether benefits and
coverage are no less favorable or more favorable. Nothing herein shall prevent
Seller from amending Seller’s Retiree Health Plan (subject to Section 5.02), or
Purchaser from amending its retiree health plans (subject to Section 9.05) at
any time in its sole discretion.

(c) As of the Closing Date, Purchaser shall have in effect health care and
dependent care flexible spending reimbursement accounts under a cafeteria plan
qualifying under Section 125 of the Code (“Purchaser’s Cafeteria Plan”), which
will provide, during the Continuation Period, benefits, rights and features to
U.S. Transferred Employees that are substantially comparable in the aggregate to
those provided under the health care and dependent care flexible spending
reimbursement account plans of Seller and its Affiliates (“Seller’s Cafeteria
Plan”) immediately prior to the Closing. Purchaser shall cause Purchaser’s
Cafeteria Plan to accept a spin-off of the flexible spending reimbursement
accounts of each U.S. Transferred Employee who participates in Seller’s
Cafeteria Plan immediately prior to the Closing (each, an “FSA Participant”) and
to honor and continue through December 31 of the year in which the Closing
occurs (the “FSA Participation Period”) the elections made by each FSA
Participant under Seller’s Cafeteria Plan in respect of such flexible spending
reimbursement accounts that are in effect immediately prior to the Closing. As
soon as practicable following the Closing Date, Seller and its Affiliates shall
cause to be transferred in cash from Seller’s Cafeteria Plan to Purchaser’s
Cafeteria Plan the excess, if any, of the aggregate accumulated contributions to
the flexible spending reimbursement accounts made by FSA Participants prior to
the Closing during the year in which the Closing occurs over the aggregate
reimbursement payouts made to the FSA Participants prior to the Closing for such
year from such accounts. From and after the Closing, Purchaser shall assume and
be solely responsible for all claims by FSA Participants under Seller’s
Cafeteria Plan incurred at any time during the calendar year in which the
Closing occurs, whether incurred prior to, on or after the Closing Date, that
have not been paid in full as of the Closing Date. For purposes of this
paragraph, a claim for reimbursement shall be deemed to have been incurred on
the date on which the charge or expense giving rise to such claim is incurred.

 

69

--------------------------------------------------------------------------------

(d) Effective as of the Closing, Purchaser shall assume and be solely
responsible for all liabilities and obligations under COBRA with respect to each
U.S. Transferred Employee, and his or her qualified beneficiaries, who is
eligible to elect “continuation coverage” (as such term is defined under
Section 602 of ERISA) or any similar benefit under any state Law. Without
limiting the foregoing, Purchaser and its Affiliates shall assume and be solely
responsible for the provision of health care coverage after the Closing to U.S.
Transferred Employees and their beneficiaries that satisfies the continuation
coverage requirements imposed in connection with the transactions contemplated
by this Agreement by Section 4980B of the Code.

SECTION 9.08. U.S. Short-Term Disability and Long-Term Disability. Without
limiting the generality of Section 9.05, effective as of the Closing, Purchaser
shall make available to each U.S. Transferred Employee who is enrolled
immediately prior to the Closing in the short-term disability plans and
long-term disability plans of Seller and its Affiliates (collectively, “Seller’s
Disability Plans”) participation in short-term disability plans and long-term
disability plans maintained or established by Purchaser (collectively,
“Purchaser’s Disability Plans”). Purchaser’s Disability Plans shall provide,
during the Continuation Period, benefits to each U.S. Transferred Employee that
are substantially comparable in the aggregate to those provided under Seller’s
Disability Plans.

SECTION 9.09. U.S. Life and Accident Insurance. (a) Without limiting the
generality of Section 9.05, effective as of the Closing, Purchaser shall make
available to each U.S. Transferred Employee who is enrolled immediately prior to
the Closing in the life insurance and accident insurance plans of Seller and its
Affiliates (collectively, “Seller’s Life and Accident Insurance Plans”)
participation in life insurance and accident insurance plans maintained or
established by Purchaser (collectively, “Purchaser’s Life and Accident Insurance
Plans”). Purchaser’s Life and Accident Insurance Plans shall provide, during the
Continuation Period, benefits to each U.S. Transferred Employee that are
substantially comparable in the aggregate to those provided under Seller’s Life
and Accident Insurance Plans.

(b) Notwithstanding any other provision of this Agreement to the contrary,
(A) Seller agrees to provide or cause to be provided to each individual who
retires on or after the Closing Date and who was, immediately prior to the
Closing Date, formerly employed by Seller or its Affiliates in connection with
the Business and each Business Employee who is eligible to retire on or
immediately prior to the Closing (and such employee’s eligible dependents)
retiree life insurance benefits and coverage under Seller’s Life and Accident
Insurance Plans, or such other retiree benefit plan or arrangement of Seller or
its Affiliates that is applicable to such individual or employee immediately
prior to the Closing ( “Seller’s Retiree Life and Accident Insurance Plan”) with
retiree life insurance benefits and coverage under Seller’s Retiree Life and
Accident Insurance Plans; and (B) Purchaser agrees to provide or cause to be
provided under Purchaser’s Life and Accident Insurance Plans to each U.S.
Transferred Employee (and his or her eligible dependents) who is not described
in the immediately preceding clause (A), but who would have satisfied the
eligibility requirements for retiree insurance coverage set forth in the
Seller’s Retiree Life and Accident Insurance Plan within the Continuation Period
had such

 

70

--------------------------------------------------------------------------------

Transferred Employee’s service as an employee of Purchaser or its Affiliate
during the Continuation Period been service as an employee of Seller or its
Affiliate, and who retires on or after the Closing Date and during the
Continuation Period either (i) life insurance benefits and coverage that are
substantially comparable in the aggregate to those under Seller’s Retiree Life
and Accident Insurance Plans (or that would have been applicable had such U.S.
Transferred Employee been eligible to retire immediately prior to the Closing)
or (ii) if more favorable to such Employee than the foregoing, the life
insurance benefits and coverage that are provided to similarly situated retirees
of Purchaser and its Affiliates; provided that such U.S. Transferred Employee’s
participation cost shall be taken into account for purposes of determining
whether benefits and coverage are no less favorable or more favorable. Nothing
herein shall prevent Seller from amending Seller’s Retiree Life and Accident
Insurance Plan (subject to Section 5.02), or Purchaser from amending its retiree
life and accident insurance plans (subject to Section 9.05), at any time in its
sole discretion.

SECTION 9.10. Performance Bonuses. Purchaser shall, to the extent accrued
therefor in the Financial Statements, assume and be solely responsible for all
liabilities under, and shall make any and all payments required to be made
pursuant to, the cash performance and incentive plans and related administrative
guidelines and procedures of Seller and its Affiliates (“Seller’s Incentive
Plans”) with respect to the Transferred Employees where such liabilities and/or
payments relate to performance periods in which the Closing Date occurs or that
have ended but have not been paid prior to the Closing, to the extent true and
complete copies of all Seller’s Incentive Plans have been provided to Purchaser
prior to the date hereof. Purchaser agrees to calculate and make such payments
pursuant to the terms and conditions of such Seller’s Incentive Plans.
Section 9.10 of the Seller Disclosure Schedule sets forth the threshold target
and maximum bonus for each Business Employee under such Seller’s Incentive Plans
for the calendar year 2008 (which Schedule is attached to the Confidential
Employee Benefit Letter).

SECTION 9.11. Relocation Benefits. With respect to each Transferred Employee
who, as of the Closing, is in the process of undergoing a relocation and who is
identified in Section 9.11 of the Seller Disclosure Schedule (which Schedule is
attached to the Confidential Employee Benefit Letter), Purchaser shall, or shall
cause an Affiliate of Purchaser to, provide relocation benefits that are
identical, in all material respects, to Seller’s relocation benefits, at the
expense of Purchaser or its Affiliates; provided, however, that nothing in this
Section 9.11 shall require Purchaser or its Affiliates to be liable for any
relocation costs incurred prior to the Closing Date. With respect to each
Transferred Employee who is on expatriate assignment as of the Closing and who
is identified in Section 9.11 of the Seller Disclosure Schedule, Purchaser
shall, or shall cause its Affiliates to, provide repatriation benefits that are
no less favorable in the aggregate than Seller’s repatriation benefits in effect
immediately prior to the Closing.

SECTION 9.12. Vacation Benefits. Upon termination of employment with Purchaser
or an Affiliate of Purchaser on or after the Closing Date, Purchaser shall pay
each Transferred Employee (other than a Transferred Employee of a Transferred
Entity) for any vacation days banked (but excluding any vacation days taken)
through the Closing and, to the extent required by applicable Law, or the terms
of the applicable vacation policy, any vacation days accrued (but excluding any
vacation days taken) through the Closing. To the extent the payment of accrued
vacation described in the immediately preceding sentence is not required to

 

71

--------------------------------------------------------------------------------

be made, Purchaser shall assume and honor all vacation days accrued but not yet
taken by Transferred Employees as of the Closing, to the extent of the
liabilities accrued therefor in the Financial Statement (it being understood
that Purchaser and its Affiliates may deduct from the number of vacation days
made available to any Transferred Employee the number of days of vacation
previously taken by such Transferred Employee in the applicable year). In the
event that any Transferred Employee has taken more vacation days than he or she
has accrued as of the Closing, neither Purchaser nor its Affiliates shall have
any obligation to reimburse Seller in respect thereof.

SECTION 9.13. Employment and Other Agreements. Effective as of the Closing,
Purchaser shall (i) assume all Liabilities arising in accordance with all
employment agreements, supplemental benefit agreements and other agreements
which have been entered into between a Transferred Employee, on the one hand,
and Seller or its Affiliates, on the other hand, (which agreements not required
to be assumed under applicable Law, collective bargaining agreement, trade union
agreement or works council agreement are set forth in Section 9.13 of the Seller
Disclosure Schedule), and (ii) indemnify and hold harmless Seller and its
Affiliates against any such liabilities.

SECTION 9.14. Retention Arrangements. Seller shall retain the economic
obligations under the retention bonus arrangements of Seller and its Affiliates
that are payable before the Closing Date and are identified in Section 9.14 of
the Seller Disclosure Schedule. Purchaser shall retain the economic obligations
under retention bonus arrangements of Seller and/or Purchaser and their
respective Affiliates that are payable at any time on or following the Closing
Date and are identified in Section 9.14 of the Seller Disclosure Schedule.

SECTION 9.15. Other Programs and Benefits. Effective as of the Closing,
Purchaser shall assume and be solely responsible for all Liabilities with
respect to (a) tuition assistance programs, (b) automobile policies,
(c) statutory benefits and (d) expatriate allowances, including foreign or U.S.
tax payments and tax equalization payments, in each case provided to Transferred
Employees and their beneficiaries by Seller and its Affiliates immediately prior
to the Closing and, except for statutory benefits, are listed on Section 9.15 of
the Seller Disclosure Schedule.

SECTION 9.16. U.S. WARN Act and Other Notices. Purchaser agrees to provide any
required notice under the Worker Adjustment and Retraining Notification Act
(“WARN”) and any similar state or other applicable Law and to otherwise comply
with any such requirement with respect to any “plant closing” or “mass layoff”
(as defined in WARN) or similar event affecting Employees and occurring on or
after the Closing Date. With regard to applicable Laws other than those of the
United States, Purchaser agrees to provide notice and to inform and consult with
workers, their representative bodies and any relevant Governmental Entities as
required by applicable Law in relation to the transactions contemplated herein.
Purchaser shall indemnify and hold harmless Seller and its Affiliates against
any such liabilities relating to Purchaser and its Affiliates’ obligations under
this Section 9.16.

SECTION 9.17. Special Provisions for Foreign Transferred Employees. (a) Foreign
Health and Welfare Plans. Without limiting the generality of Section 9.05,
effective as of the Closing, Purchaser shall have in effect health and welfare
plans for the benefit of

 

72

--------------------------------------------------------------------------------

Foreign Transferred Employees (“Purchaser’s Foreign Health and Welfare Plans”).
Purchaser’s Foreign Health and Welfare Plans shall provide benefits, during the
Continuation Period to each Foreign Transferred Employee, that (i) are no less
favorable in the aggregate than those provided under the health and welfare
plans and programs maintained or contributed to by Seller and its Affiliates
that are applicable to such Foreign Transferred Employee immediately prior to
the Closing and (ii) meet the requirements of applicable Law with respect to
continuity of benefits. With respect to any of Purchaser’s Foreign Health and
Welfare Plans, any and all waiting periods and pre-existing condition exclusions
and actively-at-work requirements shall be waived with respect to the Foreign
Transferred Employees, to the extent such employee was not subject to any such
waiting periods, exclusions or requirements under a similar plan or program of
Seller or its Affiliates in which such employee participated immediately prior
to the Closing Date.

(b) Foreign Pension Plans. Without limiting the generality of Section 9.05,
effective as of the Closing, Purchaser shall have in effect retirement plans for
the benefit of Foreign Transferred Employees (“Purchaser’s Foreign Retirement
Plans”) that provide benefits, during the Continuation Period to each Foreign
Transferred Employee, that (i) are no less favorable in the aggregate than those
provided under the pension plans and programs maintained or contributed to by
Seller and its Affiliates (“Seller’s Foreign Retirement Plans”) that are
applicable to such Foreign Transferred Employee immediately prior to the Closing
subject to the Foreign Transferred Employees paying contributions under
Purchaser’s Foreign Retirement Plans at no greater rate than under Seller’s
Foreign Retirement Plans and (ii) meet the requirements of applicable Law with
respect to continuity of benefits. Purchaser shall indemnify and hold harmless
Seller and its Affiliates against all Losses incurred by Seller in respect of
any claims by Foreign Transferred Employees relating to any changes in their
pension benefits as of the Closing.

SECTION 9.18. Personnel Records. To the extent permitted by applicable Law, the
originals of all records created prior to the Closing Date (or such later date
of transfer of employment, as applicable) set forth in the Transferred
Employees’ personnel files shall remain with the Transferred Entity or be
transferred to Purchaser or Purchaser’s Affiliates (as of the Closing Date or
such later date of transfer of employment, as applicable), as the case may be
(the “Personnel Records”). The originals of all personnel records of all Former
Business Employees and all Business Employees who are not Transferred Employees
shall remain with Seller and its Affiliates; provided that Purchaser shall be
provided with a copy of all employee health and safety records required by
applicable Law to be maintained by the Transferred Entities and Seller shall
permit Purchaser or its Affiliates or successors and their authorized
representatives to have full access to all such personnel records to the extent
reasonably necessary in order for Purchaser or any of its Affiliates or
successors to respond to a subpoena, court order, audit, investigation or
otherwise as required by applicable Law or in connection with any pending or
threatened lawsuits, actions, arbitrations, claims, complaints, investigations
or other proceedings. Purchaser or Purchaser’s Affiliates (or their respective
successors) shall retain the Personnel Records for a period of at least ten
(10) years following the Closing Date (the “Retention Period”). Purchaser and
its Affiliates shall permit Seller and its authorized representatives to have
full access upon reasonable notice during normal business hours to all the
Personnel Records during the Retention Period in order for Seller or any of its
Affiliates to respond to a subpoena, court order, audit, investigation, to
obtain data for pension or other benefits, or otherwise as required by
applicable Law (such determination by the parties of access shall be reasonable
and shall not be unreasonably delayed) and Purchaser and its Affiliates shall
provide Seller, upon Seller’s reasonable request and at Seller’s expense, with
copies of such Personnel records.

 

73

--------------------------------------------------------------------------------

SECTION 9.19. No Third Party Remedies. Nothing in this Article IX is intended or
shall be intended to entitle any person other than the parties hereto and their
respective transferees and permitted assigns to any claim, cause of action,
remedy or right of any kind.

SECTION 9.20. Cooperation. Following the Closing, Purchaser shall, and shall
cause its Affiliates (including, in the case of Purchaser, the Transferred
Entities) to, cooperate reasonably fully with Seller and its Affiliates in the
prosecution, defense, and/or settlement of any claims for which Seller and its
Affiliates retains liability under this Article IX. Such cooperation shall
include (i) affording Seller, its Affiliates, its counsel and its other
representatives reasonable access, upon reasonable written notice during normal
business hours, to all relevant personnel, properties, books, contracts,
commitments and records, (ii) furnishing promptly to Seller, its Affiliates, its
counsel and its other representatives any information reasonably requested by
it, such Affiliates, such counsel or such other representatives and
(iii) providing any other assistance to Seller, its Affiliates, its counsel and
its other representatives reasonably requested by such other party, such
Affiliates, such counsel or such other representatives. Seller shall reimburse
Purchaser for reasonable costs and expenses incurred in assisting Seller
pursuant to this Section 9.20. Following the Closing, Seller shall, and shall
cause its Affiliates to, cooperate reasonably fully with Purchaser and its
Affiliates in the prosecution, defense, and/or settlement of any claims for
which Purchaser and its Affiliates assumes liability under this Article IX. Such
cooperation shall include (i) affording Purchaser, its Affiliates, its counsel
and its other representatives reasonable access, upon reasonable written notice
during normal business hours, to all relevant personnel, properties, books,
contracts, commitments and records, (ii) furnishing promptly to Purchaser, its
Affiliates, its counsel and its other representatives any information reasonably
requested by it, such Affiliates, such counsel or such other representatives and
(iii) providing any other assistance to Purchaser, its Affiliates, its counsel
and its other representatives reasonably requested by such other party, such
Affiliates, such counsel or such other representatives. Purchaser shall
reimburse Seller for reasonable costs and expenses incurred in assisting
Purchaser pursuant to this Section 9.20.

ARTICLE X

Indemnification

SECTION 10.01. Indemnification by Seller. (a) From and after the Closing, Seller
shall indemnify Purchaser and its Affiliates (including the Transferred
Entities) and each of their respective officers, directors, employees, agents
and representatives, and their respective permitted successors and assigns (the
“Purchaser Indemnitees”) against and hold them harmless from any loss,
Liability, claim, damage, interest, fine or expense (including reasonable legal
fees and expenses) (“Losses”) suffered or incurred by any such Purchaser
Indemnitee to the extent arising from:

(i) (i) any breach of (A) any representation or warranty of Seller contained in
this Agreement or any certificate delivered pursuant to this Agreement which
survives the Closing (other than with respect to the representations and
warranties contained in

 

74

--------------------------------------------------------------------------------

Sections 4.11(b) and 4.16), (B) any representation or warranty of Seller
contained in Sections 4.11(b) and 4.16 or in a certificate delivered pursuant to
this Agreement which survives the Closing solely to the extent and only to the
extent relating to such representations; provided that the phrase “have a Seller
Material Adverse Effect” as used in Sections 4.11(b) and 4.16 (and in any such
certificate solely to the extent and only to the extent relating to such
representations) shall be deemed to be replaced by the words “be material to the
Business in the aggregate” or (C) any covenant of Seller contained in this
Agreement requiring performance on or prior to the Closing Date;

(ii) any breach of any covenant of Seller contained in this Agreement requiring
performance after the Closing Date; and

(iii) any Excluded Liability; provided, however, that this Section 10.01 shall
not provide for any indemnification arising out of or relating to Taxes (which
are the subject of Section 10.03).

(b) Notwithstanding the foregoing, Seller shall not be required to indemnify any
Purchaser Indemnitee and Seller shall not have any liability:

(i) (x) under Section 10.01(a)(i) (A) unless the aggregate of all Losses for
which Seller would be liable, but for this clause (i), exceeds on a cumulative
basis an amount equal to one percent (1%) of the Final Purchase Price, and then
only to the extent of any such excess, and (y) under Section 10.01(a)(i)(B)
unless the aggregate of all Losses for which Seller would be liable, but for
this clause (i), exceeds on a cumulative basis an amount equal to one and
one-half percent (1.5%) of the Final Purchase Price, and then only to the extent
of any such excess;

(ii) (x) under Section 10.01(a)(i)(A) for any individual item (or series of
related items) where the Loss relating thereto is less than $50,000 and such
items under this clause (x) shall not be aggregated for purposes of the
foregoing clause (i) of this Section 10.01(b), (y) under Section 10.01(a)(i)(B)
for any individual item (or series of related items) where the Loss relating
thereto is less than $100,000 and such items under this clause (y) shall not be
aggregated for purposes of the foregoing clause (i) of this Section 10.01(b),
and (z) under Section 10.01(a)(i)(C) for any individual item (or series of
related items) where the Loss relating thereto is less than $250,000 and such
items under this clause (z) shall not be aggregated for purposes of the
foregoing clause (i) of this Section 10.01(b); and

(iii) under Section 10.01(a)(i), (A) other than with respect to the breach of
any of the Fundamental Representations, in excess of ten percent (10%) of the
Final Purchase Price and (B) with respect to a breach of any Fundamental
Representations, in excess of twenty-five percent (25%) of the Final Purchase
Price.

(c) In no event shall Seller be obligated to indemnify Purchaser or any
Purchaser Indemnitee with respect to any matter to the extent that such matter
was reflected in the calculation of the adjustment to the Purchase Price, if
any, pursuant to Section 2.02.

 

75

--------------------------------------------------------------------------------

SECTION 10.02. Indemnification by Purchaser. From and after the Closing,
Purchaser and the Transferred Entities shall, jointly and severally, indemnify
Seller and its Affiliates (other than any Transferred Entity) and each of their
respective officers, directors, employees, agents and representatives and
permitted successors and assigns (the “Seller Indemnitees”) against and hold
them harmless from any Loss suffered or incurred by any such Seller Indemnitee
to the extent arising from (a) any breach of any representation or warranty of
Purchaser contained in this Agreement which survives the Closing or any covenant
of Purchaser contained in this Agreement requiring performance on or prior to
the Closing Date, (b) any breach of any covenant of Purchaser contained in this
Agreement requiring performance after the Closing Date and (c) any Assumed
Liability; provided, however, that this Section 10.02 shall not provide for any
indemnification arising out of or relating to Taxes (which are the subject of
Section 10.03).

SECTION 10.03. Tax Indemnification. (a) From and after the Closing, Seller shall
indemnify Purchaser Indemnitees against and hold them harmless from (i) any
Taxes imposed on or with respect to the Transferred Entities for any Pre-Closing
Tax Period, (ii) any Taxes imposed on a Transferred Entity as a result of, at
any time prior to the Closing, being a member of a consolidated, combined,
unitary or similar group of companies, (iii) the breach of any covenant or other
agreement of Seller contained in Section 8.07, (iv) any Taxes relating to the
Acquired Assets allocated to Seller or Selling Affiliates under
Section 1.03(b)(ii), (v) any Taxes imposed on a Transferred Entity as a result
of: (A) change in method of accounting; (B) installment sale; (C) open
transaction or (D) closing agreement pursuant to Section 7121 of the Code (or
any similar provision of state, local or foreign Tax Law), in each case ((A) –
(D)), occurring, entered into, or executed, as the case may be, on or prior to
the Closing Date; (vi) any Transfer Taxes applicable to the Acquisition to the
extent such Taxes exceed $10,000,000 and (viii) any legal fees and other
reasonable out-of-pocket expenses directly relating to clauses (i)-(v) of this
section 10.03(a).

(b) From and after the Closing, Purchaser shall indemnify Seller against (i) any
Taxes imposed on or with respect to the Transferred Entities for any
Post-Closing Tax Period, (ii) any Taxes imposed on a Transferred Entity as a
result of being a member of a consolidated, combined, unitary or similar group
of companies at any time after the Closing, (iii) all Transfer Taxes, value
added Taxes (or similar Taxes) to the extent such Taxes are not paid by
Purchaser as required by Section 8.07(h) and filing or recording fees applicable
to the Acquisition, (iv) the breach of any covenant or other agreement of
Purchaser contained in Section 8.07 and (v) any Taxes relating to the Acquired
Assets allocated to Purchaser under Section 1.03(a)(viii). The Purchaser’s
liability for Transfer Taxes under this clause 10.03(b) shall be limited to the
first $10,000,000 of Transfer Taxes. For the avoidance of doubt, amounts paid by
Purchaser pursuant to Section 8.07(h) shall be credited against Purchaser’s
obligation to indemnify for any value added Taxes (or similar Taxes) under this
Section 10.03(b).

(c) Any indemnity payment to be made hereunder shall be paid within ten
(10) days after the indemnified party makes written demand upon the indemnifying
party, but in no case earlier than five (5) business days prior to the date on
which the relevant Taxes (including any estimated Tax payments) are required to
be paid to the relevant taxing authority. Estimated Tax payments made by or on
behalf of a Transferred Entity on or prior to the Closing Date shall be credited
to any indemnity obligation under Section 10.03(a)(i).

 

76

--------------------------------------------------------------------------------

(d) Any Taxes for a Straddle Period shall be allocated between the Pre-Closing
Tax Period and the Post-Closing Tax Period on a closing of the books basis,
except that in the case of Taxes, deductions or credits determined on a periodic
basis, the amount of Tax, deduction or credit shall be allocated on a daily pro
rata basis. These principles shall apply for the purposes of allocating any
Taxes applicable to the Acquired Assets for the purposes of Article I and for
allocating any refunds or credits of Tax.

(e) Seller shall have no liability under Section 10.03(a)(i) to the extent that
liability is also a liability of Purchaser under Section 10.03(b)(ii)-(v).
Purchaser shall have no liability under Section 10.03(b)(i) to the extent that
liability is also a liability of Seller under Section 10.03(a)(ii)-(v).

SECTION 10.04. Limitations on Liability; Cooperation. (a) Notwithstanding any
provision herein, neither Seller nor Purchaser shall in any event be liable to
the other party or its Affiliates or Representatives on account of any indemnity
obligation set forth in Section 10.01 or Section 10.02 for any indirect,
consequential, special, incidental or punitive damages (including lost profits,
loss of use, damage to goodwill or loss of business), other than to the extent
such damages arise out of a breach of Section 4.06 and result in a diminution of
value that is proximate and reasonably foreseeable.

(b) Purchaser and Seller shall cooperate with each other with respect to
resolving any claim or liability with respect to which one party is obligated to
indemnify the other party hereunder, including by making commercially reasonable
efforts to mitigate or resolve any such claim or liability.

(c) Purchaser further acknowledges and agrees that, should the Closing occur,
its sole and exclusive remedy with respect to any and all claims relating to
this Agreement, any Other Transaction Document, the Acquisition, any document or
certificate delivered in connection herewith, the Business, the Transferred
Entities, the Acquired Assets and the Assumed Liabilities or any Federal, state,
local or foreign Law or otherwise (other than claims of, or causes of action
arising from, fraud) or Environmental Law (including CERCLA) shall be pursuant
to the indemnification provisions set forth in this Article X. In furtherance of
the foregoing, Purchaser hereby waives, from and after the Closing, to the
fullest extent permitted under applicable Law or Environmental Law (including
CERCLA), any and all rights, claims and causes of action (other than claims of,
or causes of action arising from, fraud) it or any of its Affiliates may have
against Seller and its Affiliates arising under or based upon this Agreement,
any Other Transaction Document, the Acquisition, any document or certificate
delivered in connection herewith, the Business, the Transferred Entities, the
Acquired Assets and the Assumed Liabilities or any Federal, state, local or
foreign Law or otherwise or Environmental Law (including CERCLA) (except
pursuant to the indemnification provisions set forth in this Article X).
Notwithstanding the foregoing, this Section 10.04 shall not preclude the
Purchaser Indemnitees from pursuing the remedies of specific performance,
injunctive relief, non-monetary declaratory judgment or any other non-monetary
equitable remedies available to the Purchaser Indemnitees under applicable Law
or Environmental Law.

SECTION 10.05. Indemnity Net; Losses Net of Insurance, Etc. (a) For the purposes
of the indemnification provisions set forth in this Article X, any Losses or
amounts

 

77

--------------------------------------------------------------------------------

otherwise payable hereunder (including amounts relating to Taxes pursuant to
Section 10.03) as reduced under Section 10.05(b) shall be determined on the
basis of the net effect after giving effect to any actual cash payments, setoffs
or recoupment or any payments in each case actually received, realized or
retained by the indemnified party (including any amounts recovered or
recoverable by the indemnified party under insurance policies) as a result of
any event giving rise to a claim for such indemnification.

(b) The amount of any Loss or amount relating to Taxes pursuant to Section 10.03
for which indemnification is provided under this Article X shall be reduced to
take account of any net Tax benefit (including as a result of any basis
adjustment) actually realized by the indemnified party on or before the taxable
year to which the indemnification relates arising from the incurrence or payment
of any such Loss or amount relating to Taxes pursuant to Section 10.03. In
computing the amount of any Loss or amount relating to Taxes pursuant to
Section 10.03, the indemnified party shall be deemed to recognize all other
items of income, gain, loss, deduction or credit before recognizing any item
arising from the incurrence or payment of any indemnified Loss or amount
relating to Taxes pursuant to Section 10.03.

SECTION 10.06. Termination of Indemnification. (a) The obligations to indemnify
and hold harmless a party hereto pursuant to (i) Sections 10.01(a)(i) and
10.02(a), as each relates to breaches of representations and warranties, shall
terminate when the applicable representation or warranty terminates pursuant to
paragraph (b) below, (ii) Section 10.01(a)(i) and 10.02(a), as each relates to
breaches of covenants, shall terminate at the close of business on the first
anniversary of the Closing Date and (iii) the other clauses of Sections 10.01
and 10.02 shall not terminate; provided, however, that as to clause (i) and
(ii) of this sentence such obligations to indemnify and hold harmless shall not
terminate with respect to any item as to which the person to be indemnified or
the related party thereto shall have, before the expiration of the applicable
period, previously made a claim by delivering a notice of such claim (stating in
reasonable detail the basis of such claim) to the indemnifying party.

(b) The representations and warranties in this Agreement and in any certificate
delivered pursuant to this Agreement shall survive the Closing solely for
purposes of Sections 10.01 and 10.02 and shall terminate at the close of
business on the first (1st) anniversary of the Closing Date; provided that
(i) the representations in relation to Tax contained in Section 4.07 shall
terminate at Closing and (ii) the Fundamental Representations shall terminate on
the fifth (5th) anniversary of the Closing Date.

SECTION 10.07. Procedures Relating to Indemnification for Third Party Claims.
(a) In order for a party (the “indemnified party”) to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim or demand made by any person against the indemnified party
other than claims for Taxes which are addressed by Section 10.09 (a “Third Party
Claim”), such indemnified party must notify the indemnifying party in writing,
and in reasonable detail, of the Third Party Claim within ten (10) business days
after receipt by such indemnified party of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been prejudiced as a result of such failure
(except that the indemnifying party shall not be liable for any expenses
incurred during the period in which the indemnified party failed to give such
notice). Thereafter, the

 

78

--------------------------------------------------------------------------------

indemnified party shall deliver to the indemnifying party, promptly after the
indemnified party’s receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the Third
Party Claim.

(b) If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party; provided, however, that such counsel is not reasonably
objected to by the indemnified party. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall not be
liable to the indemnified party for legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof. If the indemnifying
party assumes such defense, the indemnified party shall have the right to
participate in the defense thereof and to employ counsel (not reasonably
objected to by the indemnifying party), at its own expense, separate from the
counsel employed by the indemnifying party, it being understood that the
indemnifying party shall control such defense. The indemnifying party shall be
liable for the fees and expenses of counsel employed by the indemnified party
for any period during which the indemnifying party has failed to assume the
defense thereof (other than during the period prior to the time the indemnified
party shall have given notice of the Third Party Claim as provided above).
Notwithstanding anything in this Section 10.07 to the contrary, (i) if such
Third Party Claim would give rise to Losses that are more than 250% the amount
indemnifiable by such indemnifying party pursuant to this Article X, then the
indemnified party may elect to retain control of such defense, provided its
legal fees and expenses shall be at its own expense and shall not be indemnified
pursuant to this Article X, and the indemnifying party shall be entitled to
participate in the defense thereof and (ii) if the claim for indemnification
with respect to a Third Party Claim relates to or arises in connection with any
criminal proceeding, action, indictment or investigation, the indemnified party
shall be entitled to jointly control the defense thereof with the indemnifying
party (and to employ counsel reasonably acceptable to the indemnifying party, at
its own expense) for so long as such criminal proceeding, action, indictment or
investigation is continuing.

(c) If the indemnifying party so elects to assume the defense of any Third Party
Claim, all of the indemnified parties shall cooperate with the indemnifying
party in the defense or prosecution thereof. Such cooperation shall include the
retention and (upon the indemnifying party’s request) the provision to the
indemnifying party of records and information which are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party shall have assumed the defense
of a Third Party Claim, the indemnified party shall not admit any liability with
respect to, or settle, compromise or discharge such Third Party Claim without
the indemnifying party’s prior written consent, not to be unreasonably withheld.
If the indemnifying party assumes the defense of a Third Party Claim, the
indemnified party shall agree to any settlement, compromise or discharge of a
Third Party Claim that the indemnifying party may recommend and that by its
terms obligates the indemnifying party to pay the full amount of the liability
in connection with such Third Party Claim and which releases the indemnified
party completely in connection with such Third Party Claim.

 

79

--------------------------------------------------------------------------------

SECTION 10.08. Procedures Related to Indemnification for Other Claims. In the
event any indemnified party should have a claim against any indemnifying party
under Section 10.01 or 10.02 that does not involve a Third Party Claim being
asserted against or sought to be collected from such indemnified party or does
not otherwise involve a Tax claim, the resolution of which is governed by
Section 10.09, the indemnified party shall deliver notice of such claim to the
indemnifying party promptly after obtaining knowledge of such claim. The failure
by any indemnified party so to notify the indemnifying party shall not relieve
the indemnifying party from any liability which it may have to such indemnified
party under Section 10.01 or 10.02, except to the extent that the indemnifying
party demonstrates that it has been prejudiced by such failure. If the
indemnifying party disputes its liability with respect to such claim, the
indemnifying party and the indemnified party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction.

SECTION 10.09. Procedures Relating to Indemnification of Tax Claims. (a) If a
claim relating to Taxes shall be made against any indemnified party (the “tax
indemnified party”) by any taxing authority, which, if successful, might result
in an indemnity payment to any tax indemnified party pursuant to Article X, the
tax indemnified party shall promptly notify the other party (the “tax
indemnifying party”) in writing of such claim (a “Tax Claim”). If notice of a
Tax Claim is not given to the tax indemnifying party within a sufficient period
of time to allow the tax indemnifying party to effectively contest such Tax
Claim, or in reasonable detail to apprise the tax indemnifying party of the
nature of the Tax Claim, in each case taking into account the facts and
circumstances with respect to such Tax Claim, the tax indemnifying party shall
remain liable to the tax indemnified party; provided, however, that the tax
indemnifying party shall have no liability under Section 10.03 to the extent
that it has been actually and materially prejudiced by such failure.

(b) With respect to any Tax Claim that relates to a Pre-Closing Tax Period, the
tax indemnifying party shall control all proceedings taken in connection with
such Tax Claim (including selection of counsel reasonably acceptable to the tax
indemnified party) and, without limiting the foregoing, may in its sole
discretion pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with any taxing authority with respect thereto, and
may, in its sole discretion, either pay the Tax claimed and sue for a refund
where applicable Law permits such refund suits or contest the Tax Claim in any
permissible manner. In no case shall any tax indemnified party settle or
otherwise compromise any such Tax Claim without the tax indemnifying party’s
prior written consent nor shall any tax indemnifying party settle or otherwise
compromise any such Tax Claim that may adversely affect the Tax liability of the
tax indemnified party or any Affiliate thereof without the tax indemnified
party’s prior written consent (not to be unreasonably withheld). However, in the
case of a Tax Claim with respect to amounts for which Seller could be liable
under Section 10.03(a) and that relate to a Straddle Period or a Post-Closing
Tax Period, (i) neither party shall control the proceedings and each party shall
have the right to participate fully in all aspects of the prosecution or defense
of such Tax Claim and (ii) neither party shall settle any such Tax Claim without
prior written consent of the other.

 

80

--------------------------------------------------------------------------------

ARTICLE XI

Termination

SECTION 11.01. Termination. This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing by:

(a) mutual written consent of Seller and Purchaser;

(b) Purchaser, if Audited 2007 EBITDA is less than Unaudited 2007 EBITDA by more
than $10,000,000;

(c) Seller, if any of the conditions set forth in Section 3.02 shall have become
incapable of fulfillment, and shall not have been waived by Seller;

(d) Purchaser, if any of the conditions set forth in Section 3.01 shall have
become incapable of fulfillment, and shall not have been waived by Purchaser; or

(e) either party hereto, if the Closing does not occur on or prior to August 30,
2008 (the “Termination Date”); provided, however, that if as of such date the
only conditions to the Closing which have not been satisfied or waived are the
conditions to Closing set forth in Sections 3.01(c) and 3.02(c), then Purchaser
shall not be permitted to terminate this Agreement pursuant to this
Section 11.01(e) until December 28, 2008; provided further, however, that to the
extent all the conditions to Closing have been; satisfied except that Seller has
failed to deliver the Audited 2007 Financial Statements on or prior to such
date, Purchaser shall have the right, but not the obligation, to elect in
writing (the “Extension Election”) to extend such date to no earlier than
September 29, 2008 and no later than December 28, 2008 (such date, the “Extended
Termination Date”), in which case neither Seller nor Purchaser shall be
permitted to terminate this Agreement pursuant to this 11.01(e) until the
Extended Termination Date;

provided, however, that the party seeking termination pursuant to clause (c),
(d) or (e) is not in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in this
Agreement.

SECTION 11.02. Return of Confidential Information. If the transactions
contemplated by this Agreement are terminated as provided herein:

(a) notwithstanding anything in the Confidentiality Agreement to the contrary,
Purchaser shall return to Seller or destroy all documents and other material
received by Purchaser, its Affiliates and their respective Representatives from
Seller, any Selling Affiliate or any of their respective Affiliates, any
Transferred Entity or Representatives relating to the transactions contemplated
hereby and by the Other Transaction Documents, whether so obtained before or
after the execution hereof; and

(b) all confidential information received by Purchaser, its Affiliates and their
respective Representatives with respect to Seller, any Selling Affiliate, the
Transferred Entities or any of their respective Affiliates, the Business, the
Acquired Assets and the

 

81

--------------------------------------------------------------------------------

Assumed Liabilities shall be treated in accordance with the Confidentiality
Agreement, which shall remain in full force and effect in accordance with its
terms notwithstanding the termination of this Agreement.

SECTION 11.03. Consequences of Termination. (a) In the event of termination by
Seller or Purchaser pursuant to this Article XI, written notice thereof shall
forthwith be given to the other party and the transactions contemplated by this
Agreement shall be terminated, without further action by either party. If this
Agreement is terminated and the transactions contemplated hereby are abandoned
as described in this Article XI, this Agreement shall become void and of no
further force or effect, except for the provisions of (a) Section 7.01 relating
to the obligation of Purchaser to keep confidential certain information and data
obtained by it, (b) Section 8.03 relating to publicity, (c) this Article XI,
(d) Section 12.03 relating to certain expenses, (e) Section 12.04 relating to
attorney fees and expenses, (f) Section 12.10 relating to finder’s fees and
broker’s fees and (g) the last sentence of Section 5.09. Nothing in this Article
XI shall be deemed to release either party from any liability for any
intentional and material breach by such party of the terms and provisions of
this Agreement prior to such termination or to impair the right of either party
to compel specific performance by the other party of its obligations under this
Agreement.

(b) If (i) Seller has failed to deliver the Audited 2007 Financial Statements on
or prior to the Termination Date, or to the extent Purchaser has made an
Extension Election, the Extended Termination Date and Purchaser thereafter
terminates this Agreement pursuant to Section 11.01(e) or (ii) Purchaser
terminates this Agreement pursuant to Section 11.01(b), then in either such case
Seller shall reimburse Purchaser for all fees in connection with the Financing
and otherwise for all reasonable out-of-pocket costs and expenses incurred by
Purchaser and the Equity Funds in connection with this Agreement and the
transactions contemplated hereby up to an amount not to exceed $30,000,000.

ARTICLE XII

Miscellaneous

SECTION 12.01. Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by Purchaser or Seller
(including by operation of Law in connection with a merger, consolidation or
sale of all or substantially all the assets of Purchaser or Seller) without the
prior written consent of the other party hereto; provided that (a) Seller may
assign its rights and obligations hereunder to (i) any wholly-owned subsidiary
of Seller or (ii) any transferee of all or substantially all of the assets of
Seller, in each case without the consent of Purchaser and (b) Purchaser may
assign its rights, in whole or in part, (i) to one or more of its wholly-owned
subsidiaries or (ii) by way of security to the Lenders and any permitted assigns
thereof under the definitive documentation in respect of the Debt Financing, but
in the case of clauses (a)(i) and (b), no such assignment will relieve Seller or
Purchaser of its respective obligations under this Agreement. In respect of
clause (b)(ii) in the preceding sentence, Purchaser acknowledges and agrees that
the rights conferred on any such assignee shall only be exercisable at the same
time as it exercises its security under such finance arrangements and Seller
acknowledges that such assignee shall have the right to freely transfer the
benefit of this Agreement to any party to which the Business is sold. Any
attempted assignment in violation of this Section 12.01 shall be void.

 

82

--------------------------------------------------------------------------------

SECTION 12.02. No Third-Party Beneficiaries. Except as provided in Article X,
this Agreement is for the sole benefit of the parties hereto and their permitted
assigns and nothing herein expressed or implied shall give or be construed to
give to any person, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.

SECTION 12.03. Expenses. Whether or not the transactions contemplated hereby are
consummated, and except as otherwise specifically provided in this Agreement
(including in Sections 1.05(b), 2.02(b), 5.09 (the last sentence thereof), 7.05,
7.07, 8.02(a), 8.09, 10.07, 11.03 and 12.04), all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs or expenses.

SECTION 12.04. Attorney Fees. A party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such other
party by reason of the enforcement and protection of its rights under this
Agreement. The payment of such expenses is in addition to any other relief to
which such other party may be entitled.

SECTION 12.05. Amendments. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. By an
instrument in writing, Purchaser, on the one hand, or Seller, on the other hand,
may waive compliance by the other with any term or provision of this Agreement
that such other party was or is obligated to comply with or perform. Any such
waiver shall only be effective in the specific instance and for the specific and
limited purpose for which it was given and shall not be deemed a waiver of any
other provision of this Agreement or of the same breach or default upon any
recurrence thereof. No failure on the part of any party to exercise and no delay
in exercising any right hereunder shall operate as a waiver thereof nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.

SECTION 12.06. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile (with confirmation of receipt) or sent by prepaid
telex, cable or telecopy or sent, postage prepaid, by registered, certified or
express mail or reputable overnight courier service and shall be deemed given
when so delivered by hand, telexed, cabled or telecopied, or if by facsimile,
when receipt is so confirmed, or if mailed, three (3) days after mailing (one
(1) business day in the case of overnight mail or overnight courier service), as
follows (or at such other address for a party as shall be specified by like
notice):

(a) if to Purchaser,

Cidron Healthcare Limited

26 Esplanade

St Helier Jersey JE2 3QA

Attention: Director

 

83

--------------------------------------------------------------------------------

with a copy to (such copy not to constitute notice hereunder):

White & Case LLP

  

1155 Avenue of the Americas

  

New York, NY 10036

  

Attention:    Oliver C. Brahmst, Esq.

  

                    Daniel M. Latham, Esq.

  

White & Case Advokat AB

  

Biblioteksgatan 12

  

Box 5573

  

SE-114 85 Stockholm

  

Sweden

  

Attention:    Claes Zettermarck, Esq.; and

(b) if to Seller,

  

Bristol-Myers Squibb Company

  

345 Park Avenue

  

New York, NY 10154

  

Facsimile:    (212) 546-9562

  

Attention:    General Counsel

  

with a copy to (such copy not to constitute notice hereunder):

Bristol-Myers Squibb Pharmaceutical Group

Route 206 & Province Line Road

  

Princeton, NJ 08540

  

Facsimile:    (609) 252-7680

  

Attention:    P. Joseph Campisi, Jr., Esq.

Cravath, Swaine & Moore LLP

  

Worldwide Plaza

  

825 Eighth Avenue

  

New York, NY 10019

  

Facsimile:    (212) 474-3700

  

Attention:    Susan Webster, Esq.

  

                    Thomas E. Dunn, Esq.

  

SECTION 12.07. Interpretation; Exhibits and Seller Disclosure Schedule; Certain
Definitions. (a) The definitions of the terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and

 

84

--------------------------------------------------------------------------------

“including” shall be deemed to be followed by the phrase “without limitation”.
The word “will” shall be construed to have the same meaning and effect as the
word “shall”. The word “or” when used in this Agreement is not exclusive. The
word “extent” in the phrase “to the extent” shall mean the degree to which a
subject or other thing extends, and such phrase shall not mean simply “if”. All
terms defined in this Agreement shall have their defined meanings when used in
any certificate or other document made or delivered pursuant hereto, unless
otherwise defined therein. Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
therein), (ii) the words “herein”, “hereof” and “hereunder”, and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iii) all references herein to
Articles, Sections or Exhibits shall be construed to refer to Articles, Sections
or Exhibits of this Agreement and (iv) the headings contained in this Agreement,
the Seller Disclosure Schedule or any Exhibit and in the table of contents to
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any matter set forth in any
provision, subprovision, section or subsection of the Seller Disclosure Schedule
shall be deemed set forth for all purposes of the Seller Disclosure Schedule to
the extent the relevance and applicability of such disclosure to such other
subprovision, Section or subsection is reasonably apparent. The Seller
Disclosure Schedule and all Exhibits annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in the Seller Disclosure Schedule or any
Exhibit annexed hereto but not otherwise defined therein, shall have the meaning
as defined in this Agreement. In the event of an ambiguity or a question of
intent or interpretation, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.

(b) For all purposes hereof:

“Accounts Payable” means all accounts payable and liabilities, obligations and
commitments, regardless of when asserted, billed or imposed, of Seller and its
Affiliates.

“Accounts Receivable” means all accounts receivable, notes receivable and other
indebtedness due and owed by any third party to Seller or the Selling Affiliates
as of the effective time of the Closing on the Closing Date, including all trade
accounts receivable representing amounts receivable in respect of goods shipped,
products sold or services rendered prior to the effective time of the Closing
and the full benefit of any security for such accounts or debts.

“Acquired Liabilities” means the Assumed Liabilities that are not Liabilities of
Transferred Entities as of the effective time of the Closing Date.

“Act” means the Federal Food, Drug and Cosmetics Act, 21 U.S.C. 321 et. seq., as
amended, and the rules, regulations and guidance documents promulgated
thereunder.

 

85

--------------------------------------------------------------------------------

“Affiliate” means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For purposes of this definition,
“control” when used with respect to any specified person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise and
the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Audited 2007 EBITDA” means EBITDA for the year ended December 31, 2007, as
derived from the Audited Financial Statements for such fiscal year.

“Audited 2007 EBITDA Reduction Amount” means (i) if Audited 2007 EBITDA is less
than Unaudited 2007 EBITDA by more than $1,500,000, the lesser of (x) the amount
of such deficiency multiplied by 11.5 and (y) $115,000,000 (which amount shall,
for the avoidance of doubt, reduce the Purchase Price in accordance with the
definition thereof notwithstanding that Purchaser was entitled to terminate this
Agreement pursuant to Section 11.01(b)), and (ii) if Audited 2007 EBITDA equals,
exceeds or is not less than Unaudited 2007 EBITDA by more than $1,500,000, zero.

“Balance Sheet” means the unaudited carve-out balance sheet of the Business as
of December 31, 2007.

“Brands” means the brands listed in Section 12.07(b)(i) of the Seller Disclosure
Schedule.

“business day” means any day, other than a Saturday or Sunday, on which
commercial banks are not required or authorized to close in the City of New York
or Stockholm, Sweden.

“Business Employee” means any employee who is employed by Seller or its
Affiliates in connection with the Business, and whose services are primarily
related to the Business and who is listed (by name or by category and number) in
the Confidential Employee Benefit Letter, but excluding, in each case, employees
whose services primarily relate to the Excluded Assets.

“Cash” means the sum of cash, cash equivalents and liquid investments as
determined under U.S. GAAP.

“dollars” or “$” means lawful money of the United States of America.

“EBITDA” means, for any period, the sum of (i) operating income,
(ii) depreciation and (iii) amortization for such period as set forth in the
Financial Statements for such period.

“Environmental Law” means any notice of liability, inquiry or violation, Law or
Injunction issued by or entered into with any Governmental Entity, relating to
pollution, protection of the environment or human health or the preservation or
restoration of natural resources.

 

86

--------------------------------------------------------------------------------

“Environmental Liability” means any Liability, loss, demand, claim or cost,
contingent or otherwise (including any Liability for judgments, orders, damages,
costs of investigation, remediation or monitoring, medical monitoring, natural
resources damages, fines, penalties, professional fees, or settlements), and
relating to, arising under or resulting from (a) any actual or alleged
(i) compliance or noncompliance with any Environmental Law or Environmental
Permit, (ii) generation, use, storage, management, treatment, transportation or
disposal of any Hazardous Material or (iii) presence, Release or threatened
Release of, or exposure to, any Hazardous Material (including any exposure of
any Business Employee, Former Business Employee, Transferred Employee or former
employee or independent contractor of the Transferred Entities or the Business
to Hazardous Materials) or (b) any contract, agreement, or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

“Environmental Permit” means any certificate, consent, permit, license,
registration, approval or other authorization issued under or pursuant to
Environmental Laws or otherwise relating to the use, emission or discharge of
Hazardous Materials.

“ERISA Affiliate” means, with respect to any entity, any other entity (whether
or not incorporated) that, together with such entity, would be treated as a
single employer under Section 414 of the Code or Section 4001 of ERISA.

“Excluded Tax Items” includes the following: Current Assets—Deferred income
taxes; net of valuation allowances; Total Assets; Current Liabilities—Deferred
income taxes payable; Current Liabilities—U.S. and foreign income taxes payable;
Total Current Liabilities; Total Liabilities; Deferred income taxes – long term;
Divisional Equity—Parent’s investment; Divisional Equity—Accumulated other
comprehensive income (net of tax); Total Divisional Equity; provision for income
taxes; Statement of Earnings—net earnings; Statement of Earning—Comprehensive
Income; deferred income tax (benefit)/expense; U.S. and foreign income taxes
payable; net cash provided by operating activities; income tax paid; and any
footnote disclosure related to Tax matters.

“Financial Statements” means, collectively, the Audited 2004-2006 Financial
Statements, the Unaudited 2007 Financial Statements and the Audited 2007
Financial Statements.

“Former Business Employee” means any individual who, as of his or her
termination date, was an employee who was employed by Seller or its Affiliates
in connection with the Business, and whose services are primarily related to the
Business and whose services did not primarily relate to the Excluded Assets.

“Fundamental Representations” means the representations in Sections 4.03 and
4.05(a), and 4.05(b) (in each case solely to the extent related to the
Fundamental Transferred Entities) and Section 4.01.

“Fundamental Transferred Entities” means ConvaTec Dominican Republic, Inc.,
ConvaTec Limited, AMCARE Limited, ConvaTec Specialty Fibres Limited and
Laboratories ConvaTec SAS.

 

87

--------------------------------------------------------------------------------

“Hazardous Material” means any hazardous, toxic or deleterious chemical,
material, substance or waste, including radioactive, explosive, medical or
biohazardous materials or wastes, petroleum and its byproducts and distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
or urea formaldehyde foam insulation.

“Indebtedness” means, with respect to any person, without duplication: (i) the
principal of and any premium in respect of indebtedness for borrowed money,
including any accrued interest and any cost or penalty associated with prepaying
any such indebtedness, and including any such obligations evidenced by bonds,
debentures, notes or similar obligations or any guarantee of the foregoing;
(ii) obligations under or with respect to (A) acceptances, letters of credit or
similar arrangements and (B) bank guarantees and surety bonds (other than those
issued for the benefit of the Transferred Entities); (iii) amounts owing as
deferred purchase price for property or services, including all seller notes and
“earn out” payments; (iv) guarantees with respect to any Indebtedness of any
other person; and (v) any lease obligations that are properly characterized as
capitalized leases under GAAP; provided, that Indebtedness shall not include any
Current Liability to the extent it is reflected in the calculation of the
adjustment to the Purchase Price, if any, pursuant to Section 2.02 Closing
Working Capital.

“International Acquired Assets” means all the Acquired Assets that are owned by
any International Selling Affiliate as of the effective time of the Closing
Date.

“International Assumed Liabilities” means all the Assumed Liabilities that are
Liabilities of any International Selling Affiliate as of the effective time of
the Closing Date.

“International Purchased Company” means any Purchased Company that is a legal
entity organized under the laws of a jurisdiction outside the United States.

“International Selling Affiliate” means any Selling Affiliate that is a legal
entity organized under the laws of a jurisdiction outside the United States.

“International Transferred Shares” means the Transferred Equity Interests that
are equity interests in an International Purchased Company.

“Inventory” means all raw materials, work-in-process, packaging, labels,
supplies and finished goods (including in transit, on consignment or in the
possession of any third party) and other inventories.

“IP Assignment Documents” means with respect to any Transferred Intellectual
Property, intellectual property (patent, trademark, copyright and domain name)
assignments of such Transferred Intellectual Property.

“ITO Services Agreement” means the ITO Services Agreement between Mead Johnson &
Company and Purchaser in substantially the form of Exhibit I.

“knowledge of Seller” means the current actual knowledge of the persons
identified in Section 12.07(b)(ii) of the Seller Disclosure Schedule.

 

88

--------------------------------------------------------------------------------

“Manufacturing Knowhow” means knowhow, technology, data, designs, process and
methods relating to the manufacture and production of products.

“Other Transaction Documents” means the Transaction Documents other than this
Agreement.

“Permits” means all certificates, licenses, consents, permits (including
occupancy permits), authorizations, registrations and approvals (including
510(k) clearances and foreign equivalents and any marketing or pricing approvals
granted by any regulatory entity and all materials and Intellectual Property
related thereto) from any Governmental Entity but excluding any and all
Environmental Permits.

“person” means any individual, firm, corporation, partnership, limited liability
company, trust, joint venture, Governmental Entity or other entity.

“Plastibase License Agreement” means the Plastibase License Agreement between
Seller and Purchaser in substantially the form of Exhibit F.

“Plastibase Supply Agreement” means the Plastibase Supply Agreement between E.R.
Squibb & Sons, L.L.C. and Purchaser in substantially the form of Exhibit G.

“Plastibase Trademark License Agreement” means the Plastibase Trademark License
Agreement between Mead Johnson & Company and Purchaser in substantially the form
of Exhibit H.

“Prime Rate” means the rate of interest from time to time publicly announced by
Citibank, N.A., in its New York City office as its prime or base rate,
calculated on the basis of the actual number of days elapsed over 365.

“Product Formulae” means the specific percentages and specifications for the
mixing and preparation of the ingredients and/or the specific quantities,
volumes, dimensions or weights and associated specifications of components,
materials and/or subassemblies used in the manufacture or assembly of a specific
Product, taken as a whole and not in part. For the avoidance of doubt, (a) a
Product Formulae does not include Manufacturing Knowhow associated with the
manufacture of the Product to which such Product Formulae relates and (b) does
not refer separately to a particular ingredient or specification or combination
of ingredients and/or specifications that do not comprise the entire, specific
Product Formulae.

“Products” means with respect to the Brands, the products represented by the
SKUs for such Brands listed in Section 12.07(b)(i) of the Seller Disclosure
Schedule.

“Purchase Price” means $4,080,000,000 minus the Audited 2007 EBITDA Reduction
Amount, if any.

“Purchaser Material Adverse Effect” means any state of facts, change,
development, condition, effect, event or occurrence that (a) prevents or
materially impedes or delays the consummation of the Acquisition or the other
transactions contemplated by this Agreement or (b) has a material adverse effect
on the ability of Purchaser to perform its obligations under this Agreement and
the Other Transaction Documents.

 

89

--------------------------------------------------------------------------------

“Release” means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into or
through the environment (including ambient air, surface water, groundwater, land
surface or subsurface strata).

“Representatives” of any person shall mean such person’s directors, managers,
members, officers, employees, agents, advisors and representatives (including,
without limitation, attorneys, accountants, consultants, financial advisors,
financing sources and any representatives of such advisors or financing
sources).

“Retained Cash” means the excess of the amount of Cash held by the Transferred
Entities at 12:01 a.m. on the Closing Date in the jurisdiction in which such
Cash is held minus the amount of Cash distributed to Seller or its Affiliates
from the Transferred Entities on the Closing Date.

“Seller Material Adverse Effect” means any state of facts, change, development,
condition, effect, event or occurrence that, (a) has a material adverse effect
on the assets, liabilities, financial condition or operating results of the
Business (including the Transferred Entities), taken as a whole, (b) prevents or
materially impedes or delays the consummation of the Acquisition or the other
transactions contemplated by this Agreement or (c) has a material adverse effect
on the ability of Seller to perform its obligations under this Agreement and the
Other Transaction Documents. For purposes of this Agreement, “Seller Material
Adverse Effect” shall exclude any effects to the extent resulting from
(i) changes in the United States or foreign economies in general that do not
have a disproportionately negative effect on the Business (including the
Transferred Entities), taken as a whole, as compared to other companies or
businesses in the industries in which the Business operates, (ii) changes in
applicable Law or applicable accounting regulations or principles or
interpretations thereof that do not have a disproportionately negative effect on
the Business (including the Transferred Entities), taken as a whole, as compared
to other companies or businesses in the industries in which the Business
operates, (iii) changes in industries relating to the Business in general and
not specifically relating to the Business that do not have a disproportionately
negative effect on the Business (including the Transferred Entities), taken as a
whole, as compared to other companies or businesses in the industries in which
the Business operates, (iv) one (1) or more Business Employees voluntarily or
involuntarily due to cause ceasing to be employed by the Business, (v) the
announcement by Seller of its intention to sell the Business, (vi) the execution
and delivery of this Agreement (including the disclosure of the identity of
Purchaser) or any Other Transaction Document or (vii) the consummation of the
transactions contemplated hereby or thereby.

“Selling Affiliate” means each Affiliate of Seller identified in Section A of
the Seller Disclosure Schedule.

“Solvent”, when used with respect to any person, means that, as of any date of
determination, (a) the amount of the “fair saleable value” of the assets of such
person on a going

 

90

--------------------------------------------------------------------------------

concern basis will, as of such date, exceed (i) the value of all “liabilities of
such person, including contingent and other liabilities” as of such date, as
such quoted terms are generally determined in accordance with applicable Federal
laws governing determinations of the insolvency of debtors and (ii) the amount
that will be required to pay the probable liabilities of such person on its
existing debts (including contingent liabilities) as such debts become absolute
and matured, (b) such person will not have, as of such date, an unreasonably
small amount of capital for the operation of the businesses in which it is
engaged or proposed to be engaged following such date and (c) such person will
be able to pay its liabilities, including contingent and other liabilities, as
they mature. For purposes of this definition, each of the phrases “not have an
unreasonably small amount of capital for the operation of the businesses in
which it is engaged or proposed to be engaged” and “able to pay its liabilities,
including contingent and other liabilities, as they mature” means that such
person will be able to generate enough cash from operations, asset dispositions
or refinancing, or a combination thereof, to meet its obligations as they become
due.

“subsidiary” of any person means another person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, fifty percent
(50%) or more of the equity interests of which) is owned directly or indirectly
by such first person or by another subsidiary of such person.

“Technology License Agreement” means the Technology License Agreement between
Seller and Purchaser in substantially the form of Exhibit D.

“Transaction Documents” means (a) this Agreement, (b) the Transitional Services
Agreement, (c) the Technology License Agreement, (d) the Transfer Documents,
(e) the Plastibase License Agreement, (f) the Plastibase Supply Agreement,
(g) the Plastibase Trademark License Agreement and (h) the ITO Services
Agreement.

“Transfer Documents” means the documents that are executed and delivered
pursuant to Sections 2.01(b)(i), 2.01(b)(ii), 2.01(b)(iii), 2.01(c)(ii),
2.01(c)(iii) and 2.01(c)(iv).

“Transitional Services Agreement” means the transitional services agreement
between Seller and Purchaser in substantially the form of Exhibit C.

“Unaudited 2007 EBITDA” means $333,300,000.

“U.S. GAAP” means generally accepted accounting principles in the United States,
as in effect as of the date hereof.

(c) The following terms have the meanings given such terms in the Sections set
forth below:

 

Term

  

Section

    

2007 Balance Sheet Working Capital

   2.02(c)   

Accounting Firm

   2.02(b)   

 

91

--------------------------------------------------------------------------------

Term

  

Section

    

Accounts Payable

   12.07(b)   

Accounts Receivable

   12.07(b)   

Acquired Assets

   1.02(a)   

Acquired Liabilities

   12.07(b)   

Acquired Rights Directive

   9.01(f)   

Acquisition

   Preamble   

Act

   12.07(b)   

Affiliate

   12.07(b)   

Agreement

   Preamble   

Asset Transfer

   9.06(b)   

Assumed Accounts Payable

   1.03(a)(iv)   

Assumed Liabilities

   1.03(a)   

Audited 2004-2006 Financial Statements

   4.06(a)   

Audited 2007 EBITDA

   12.07(b)   

Audited 2007 EBITDA Reduction Amount

   12.07(b)   

Audited 2007 Financial Statements

   5.08   

Balance Sheet

   12.07(b)   

Benefit Plan

   4.14(a)   

Benefits Services

   8.09(c)   

BMS Names

   7.03(a)   

Brands

   12.07(b)   

Business

   Preamble   

business day

   12.07(b)   

Business Employee

   12.07(b)   

Cash

   12.07(b)   

CERCLA

   4.17   

Closing

   2.01(a)   

Closing Date

   2.01(a)   

Closing Date Amount

   2.01(c)(i)   

Closing Indebtedness

   2.02(a)   

Closing Working Capital

   2.02(a)   

CMS

   7.04(b)   

COBRA

   9.05(b)   

Code

   4.07(a)   

Commencement Date

   9.01(b)   

Competing Business

   5.06(a)   

Competing Product

   5.06(a)   

Confidential Employee Benefit Letter

   9.01(c)   

Confidential Information

   5.05   

Confidentiality Agreement

   7.01   

Contracts

   1.02(a)(vii)   

control

   12.07(b)   

Continuation Period

   9.05(a)   

 

92

--------------------------------------------------------------------------------

Term

  

Section

    

Copyrights

   4.10(e)(iii)   

Current Assets

   2.02(d)   

Current Liabilities

   2.02(d)   

Debt Commitment Letter

   6.05   

Debt Financing

   6.05   

DOJ

   8.04(a)   

dollars

   12.07(b)   

EBITDA

   12.07(b)   

Environmental Law

   12.07(b)   

Environmental Liability

   12.07(b)   

Environmental Permit

   12.07(b)   

Environmental Reports

   4.17   

Equity Commitment Letters

   6.05   

Equity Financing

   6.05   

Equity Fund

   6.05   

ERISA

   4.14(a)   

ERISA Affiliate

   12.07(b)   

Excluded Assets

   1.02(b)   

Excluded Liability

   1.03(b)   

Excluded Personal Property

   1.02(b)(ix)   

Excluded Tax Item

   4.06(a)   

Extended Termination Date

   11.01(e)   

Extension Election

   11.01(e)   

FDA

   7.04(a)   

Final Purchase Price

   2.02(c)   

Financial Statements

   12.07(b)   

Financing

   6.05   

Financing Letters

   6.05   

Foreign Benefit Plans

   4.14(i)   

Foreign Transferred Employees

   9.01(d)   

Former Business Employee

   12.07(b)   

FSA Participant

   9.07(c)   

FSA Participation Period

   9.07(c)   

FTC

   8.05(a)   

Fundamental Representations

   12.07(b)   

Fundamental Transferred Entities

   12.07(b)   

Governmental Entity

   3.01(b)   

Hazardous Material

   12.07(b)   

HSR Act

   3.01(c)   

Inactive Business Employee

   9.01(b)   

including

   12.07(a)   

Indebtedness

   12.07(b)   

indemnified party

   10.07(a)   

 

93

--------------------------------------------------------------------------------

Term

  

Section

    

Initial Purchase Price Allocation

   8.07(a)   

Injunction

   3.01(b)   

Intellectual Property

   4.10(e)   

Interim Facility Letter

   6.05   

International Acquired Assets

   12.07(b)   

International Asset Purchase Agreement

   1.01(b)   

International Assumed Liabilities

   12.07(b)   

International Purchased Company

   12.07(b)   

International Selling Affiliate

   12.07(b)   

International Stock Purchase Agreement

   1.01(c)   

International Transferred Shares

   12.07(b)   

Inventory

   12.07(b)   

IP Assignment Documents

   12.07(b)   

knowledge of Seller

   12.07(b)   

Last Lot Expiration Dates

   7.04   

Law

   3.01(b)   

Lease

   4.09(d)   

Leased Property

   4.09(b)   

Liabilities

   1.03(a)   

Liens

   4.02(a)   

Losses

   10.01(a)   

Manufacturing Knowhow

   12.07(b)   

Miscellaneous Rights

   1.02(a)(vi)   

Non-Compete Period

   5.06(a)   

Non-U.S. Customer List

   8.08   

Notice of Disagreement

   2.02(b)   

Other Rights

   1.02(a)(xi)   

Other Transaction Documents

   12.07(b)   

Owned Property

   4.09(a)   

Patents

   4.10(e)(i)   

Payroll Services

   8.09(c)   

PBGC

   4.14(b)   

Permits

   12.07(b)   

Permitted Liens

   4.08   

person

   12.07(b)   

Personal Property

   1.02(a)(ii)   

Personnel Records

   9.18   

Post-Closing Tax Period

   4.07(a)   

Post-Services Costs

   8.09(a)   

PR Code

   4.14(c)   

Pre-Closing Service

   9.04   

Pre-Closing Tax Period

   4.07(a)   

Prime Rate

   12.07(b)   

 

94

--------------------------------------------------------------------------------

Term

  

Section

    

Product Formulae

   12.07(b)   

Products

   12.07(b)   

PR SIP

   9.06(a)   

Purchase Price

   12.07(b)   

Purchased Companies

   Preamble   

Purchased Companies’ Equity Interests

   Preamble   

Purchased Company Subsidiaries

   Preamble   

Purchased Company Subsidiaries’ Equity Interests

   Preamble   

Purchaser

   Preamble   

Purchaser Indemnitees

   10.01(a)   

Purchaser Material Adverse Effect

   12.07(b)   

Purchaser’s Cafeteria Plan

   9.07(c)   

Purchaser’s Disability Plans

   9.08   

Purchaser’s Foreign Health and Welfare Plans

   9.17   

Purchaser’s Foreign Retirement Plans

   9.17(b)   

Purchaser’s Health Plans

   9.06(a)   

Purchaser’s Life and Accident Insurance Plans

   9.09(a)   

Purchaser’s PR 401(k) Plan

   9.06(a)   

Purchaser’s Severance Plan

   9.05(b)   

Purchaser’s U.S. 401(k) Plan

   9.06(a)   

Records

   1.02(a)(xii)   

Release

   12.07(b)   

Representatives

   12.07(b)   

Restricted Transferred Employees

   5.07   

Retained Cash

   12.07(b)   

Retained Litigation Liabilities

   1.03(b)(iii)   

Retention Period

   9.18   

Seller

   Preamble   

Seller Change of Control Event

   5.06(a)   

Seller Disclosure Schedule

   Article IV   

Seller Indemnitees

   10.02   

Seller Material Adverse Effect

   12.07(b)   

Seller’s Cafeteria Plan

   9.07(c)   

Seller’s Disability Plans

   9.08   

Seller’s Foreign Retirement Plans

   9.17(b)   

Seller’s Health Plans

   9.07(a)   

Seller’s Incentive Plans

   9.10   

Seller’s Life and Accident Insurance Plans

   9.09(a)   

Seller’s Retiree Health Plans

   9.07(b)   

Seller’s Retiree Life and Accident Insurance Plans

   9.09(b)   

Seller’s Stock Fund

   9.06   

Seller’s UK DB Pension Plan

   9.02(f)   

Seller’s UK Supplemental Pension Program

   9.02(f)   

 

95

--------------------------------------------------------------------------------

Term

  

Section

    

Selling Affiliate

   12.07(b)   

Service

   8.09(a)   

Set-Up and Administrative Costs

   8.09(a)   

Solvent

   12.07(b)   

Sponsor Guarantees

   6.09   

Statement

   2.02(a)   

Straddle Period

   4.07(a)   

subsidiary

   12.07(b)   

Support Services

   8.05   

Target Working Capital

   2.02(c)   

Tax Claim

   10.09(a)   

Taxes

   4.07(a)   

tax indemnified party

   10.09(a)   

tax indemnifying party

   10.09(a)   

Tax Return

   4.07(a)   

Technology

   4.10(e)(v)   

Technology License Agreement

   12.07(b)   

Termination Date

   11.01(e)   

Third Party Claim

   10.07(a)   

Trademarks

   4.10(e)(ii)   

Transaction Documents

   12.07(b)   

Transfer Documents

   12.07(b)   

Transfer Taxes

   4.07(a)   

Transferred Accounts Receivable

   1.02(a)(v)   

Transferred Contracts

   1.02(a)(vii)   

Transferred Employee

   9.01(c)   

Transferred Entities

   Preamble   

Transferred Entity Contract

   4.11   

Transferred Entity Intellectual Property

   4.10(b)   

Transferred Entity Permits

   4.12(a)   

Transferred Entity Voting Debt

   4.05(a)   

Transferred Environmental Permits

   1.02(a)(x)   

Transferred Equity Interests

   Preamble   

Transferred Intellectual Property

   1.02(a)(iii)   

Transferred Inventory

   1.02(a)(iv)   

Transferred Miscellaneous Rights

   1.02(a)(vi)   

Transferred Other Rights

   1.02(a)(xi)   

Transferred Permits

   1.02(a)(ix)   

Transferred Personal Property

   1.02(a)(ii)   

Transferred Plan Assets

   1.02(a)(viii)   

Transferred Real Property

   1.02(a)(i)   

Transferred Real Property Contracts

   1.02(a)(i)   

Transferred Records

   1.02(a)(xii)   

 

96

--------------------------------------------------------------------------------

Term

  

Section

    

Transitional Services Agreement

   12.07(b)   

Treasury Services

   8.09(c)   

UK Transferred Employees

   9.02(f)   

Unaudited 2007 EBITDA

   12.07(b)   

Unaudited 2007 Financial Statements

   4.06(a)   

Unregistered Intellectual Property

   4.10(e)(iv)   

U.S. Benefit Plans

   4.14(a)   

U.S. Customer List

   8.08(a)   

U.S. GAAP

   12.07(b)   

U.S. SIP

   9.06(a)   

U.S. Transferred Employees

   9.01(c)   

WARN

   9.16   

Working Capital

   2.02(d)   

Working Capital Principles

   2.02(e)   

SECTION 12.08. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile or other
electronic imaging means shall be effective as delivery of a manually executed
counterpart of this Agreement.

SECTION 12.09. Entire Agreement. This Agreement, the Other Transaction Documents
and the Confidentiality Agreement contain the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings relating to such subject
matter.

SECTION 12.10. Fees. Each party hereto hereby represents and warrants that
(a) the only brokers or finders that have acted for such party (and, in the case
of Seller, each Affiliate of Seller and each Transferred Entity) in connection
with this Agreement or the transactions contemplated hereby or that may be
entitled to any brokerage fee, finder’s fee or commission in respect thereof are
Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated with respect
to Seller, its Affiliates and the Transferred Entities and Bear Stearns
International Limited with respect to Purchaser and (b) each party shall pay all
fees or commissions which may be payable to the firm so named with respect to
such party.

SECTION 12.11. Severability. If any term or provision of this Agreement is
invalid, illegal or incapable of being enforced by any applicable Law or public
policy, all other conditions and provisions of this Agreement shall nonetheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated by this Agreement 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 shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement are consummated as
originally contemplated to the fullest extent possible.

 

97

--------------------------------------------------------------------------------

SECTION 12.12. Enforcement. The parties agree that irreparable damage would
result and that the parties would not have any adequate remedy at law if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached or threatened to be breached. It is
accordingly agreed that the parties shall be entitled to equitable relief,
without the proof of actual damages, including in the form of an injunction or
injunctions or orders for specific performance (including causing Purchaser to
enforce its rights under any of the Financing Letters), in addition to all other
remedies available to the parties at law or in equity as a remedy for any such
breach or threatened breach. Each party agrees to (a) cooperate fully in any
attempt by the other party in obtaining any such equitable remedy and (b) waive
any requirement for the security or posting of any bond in connection with any
such equitable remedy. Each party further agrees that the only permitted
objection that it may raise in response to any action for equitable relief is
that it contests the existence of a breach or threatened breach of the
provisions of this Agreement. Such equitable remedies may be sought in the
Supreme Court of the State of New York sitting in New York County (and, if such
Supreme Court of the State of New York shall be unavailable, in any other New
York State court or in the United States District Court for the Southern
District of New York), and any appellate court from any thereof.

SECTION 12.13. Consent to Jurisdiction. Each of Purchaser and Seller irrevocably
submits to the exclusive jurisdiction of (a) the Supreme Court of the State of
New York, New York County, and (b) the United States District Court for the
Southern District of New York, and any appellate court from any thereof, for the
purposes of any suit, action or other proceeding arising out of this Agreement,
the Other Transaction Documents or any transaction contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and each party
irrevocably and unconditionally agrees that all claims in respect of any such
suit, action or other proceeding may be heard and determined in such New York
State or, to the extent permitted by applicable Law, in such Federal court. Each
of Purchaser and Seller agrees to commence any such action, suit or proceeding
either in the United States District Court for the Southern District of New York
or if such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of Purchaser and Seller further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party’s respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this Section 12.13. Each of Purchaser and Seller
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement, the Other
Transaction Documents or the transactions contemplated hereby or thereby in any
court referred to in the first sentence of this Section 12.13 and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.

SECTION 12.14. Waiver of Jury Trial. Each party hereto hereby waives to the
fullest extent permitted by applicable Law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement,

 

98

--------------------------------------------------------------------------------

any of the Other Transaction Documents or any transaction contemplated hereby or
thereby. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce that
foregoing waiver and (b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement and the Other Transaction Documents,
as applicable, by, among other things, the mutual waivers and certifications in
this Section 12.14.

SECTION 12.15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.

 

99

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Agreement as of
the date first written above.

 

BRISTOL-MYERS SQUIBB COMPANY, by  

 

Name:   Title:   CIDRON HEALTHCARE LIMITED, by  

 

Name:   Title:  

 

100