EXHIBIT 10.1

 

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

 

 

 

STOCK AND ASSET PURCHASE AGREEMENT

 

 

 

between

 

 

 

PFIZER INC.,

 

 

 

and

 

 

 

ADVANCED MEDICAL OPTICS, INC.

 

 

 

Dated as of April 21, 2004

 

 

 

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

 

 

 

SALE OF PFIZER’S

SURGICAL OPHTHALMIC BUSINESS

 

 

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

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

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND TERMS

   1     

1.01.

   Definitions    1     

1.02.

   Other Defined Terms    10     

1.03.

   Interpretation    10

ARTICLE II PURCHASE AND SALE OF SHARES AND ASSETS

   10     

2.01.

   Purchase and Sale of Shares of the Conveyed Subsidiaries    10     

2.02.

   Purchase and Sale of Certain Assets of the Asset Selling Corporations    10  
  

2.03.

   Third Party Consents    12     

2.04.

   Excluded Assets of the Business    13     

2.05.

   Assumed Liabilities of the Business    15     

2.06.

   Retained Liabilities of the Business    16

ARTICLE III PURCHASE PRICE

   17     

3.01.

   Purchase Price    17     

3.02.

   Allocation of the Aggregate Purchase Price    17

ARTICLE IV THE CLOSING

   18     

4.01.

   Closing    18     

4.02.

   Pfizer Deliveries    19     

4.03.

   Purchaser Deliveries    19     

4.04.

   Joint Deliveries    19

ARTICLE V CONDITIONS TO CLOSING

   20     

5.01.

   Conditions to the Obligations of Purchaser and Pfizer    20     

5.02.

   Conditions to the Obligations of Purchaser    20     

5.03.

   Conditions to the Obligations of Pfizer    21

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PFIZER

   22     

6.01.

   Organization    22     

6.02.

   Authority; Binding Effect    22     

6.03.

   Conveyed Subsidiaries; Capital Structure    22     

6.04.

   Non-Contravention    23     

6.05.

   Governmental Authorization    23     

6.06.

   Financial Information    24     

6.07.

   Absence of Material Changes    24

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

   

6.08.

   No Litigation    25    

6.09.

   Compliance with Laws    25    

6.10.

   Product Registrations; Regulatory Compliance    25    

6.11.

   Environmental Matters    26    

6.12.

   Material Contracts    27    

6.13.

   Intellectual Property    28    

6.14.

   Real Property    29    

6.15.

   Title to Assets    29    

6.16.

   Taxes    30    

6.17.

   Employee Benefits    30    

6.18.

   Healon AB    31    

6.19.

   Sufficiency of Assets    31    

6.20.

   Labor and Employment Matters    32    

6.21.

   Certain Supply Relationships    32    

6.22.

   Certain Business Practices    33    

6.23.

   Solvency    33    

6.24.

   Brokers    33

ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER

   33    

7.01.

   Organization and Qualification    33    

7.02.

   Corporate Authorization    33    

7.03.

   Binding Effect    34    

7.04.

   Non-Contravention    34    

7.05.

   Governmental Authorization    34    

7.06.

   Third Party Approvals    34    

7.07.

   Financial Capability    34    

7.08.

   Securities Act    34    

7.09.

   Condition of the Business    35    

7.10.

   No Litigation    35    

7.11.

   Brokers    35

ARTICLE VIII COVENANTS

   36    

8.01.

   Information and Documents    36    

8.02.

   Conduct of Business    36

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

   

8.03.

   Reasonable Best Efforts; Certain Governmental Matters    38    

8.04.

   Tax Matters    40    

8.05.

   Employees and Employee Benefits    47    

8.06.

   Certain Dividends, Etc    52    

8.07.

   Resignations    52    

8.08.

   Bulk Transfer Laws    52    

8.09.

   Non-competition    52    

8.10.

   Compliance with WARN Act, Etc    54    

8.11.

   Litigation Support    54    

8.12.

   Insurance    54    

8.13.

   Trade Notification    54    

8.14.

   Products Received by Purchaser    54    

8.15.

   Foreign Implementing Agreements    55    

8.16.

   Audited Financial Information    55    

8.17.

   Quarterly Financial Statements; Monthly Sales Information    55    

8.18.

   Healon Business Drop Down    55    

8.19.

   Rooster Comb Agreements    56    

8.20.

   Intercompany Receivables    56    

8.21.

   Information and Consultation Requirements    56    

8.22.

   Covenant Not to Sue    56    

8.23.

   Return of Non-Public Information    56    

8.24.

   Access to Facilities    57

ARTICLE IX INDEMNIFICATION

   57    

9.01.

   Indemnification by Pfizer    57    

9.02.

   Indemnification by Purchaser    58    

9.03.

   Notice of Claims    58    

9.04.

   Third Party Claims    59    

9.05.

   Expiration    59    

9.06.

   Certain Limitations    60    

9.07.

   Losses Net of Insurance, Etc    60    

9.08.

   Sole Remedy/Waiver    60    

9.09.

   Indemnification Procedures for Remedial Actions    61

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

   

9.10.

   Limitation on Indemnification for Claims for Remedial Action    62

ARTICLE X TERMINATION

   64    

10.01.

   Termination    64    

10.02.

   Effect of Termination    65

ARTICLE XI MISCELLANEOUS

   65    

11.01.

   Notices    65    

11.02.

   Amendment; Waiver    66    

11.03.

   Assignment    66    

11.04.

   Entire Agreement    67    

11.05.

   Fulfillment of Obligations; Cooperation    67    

11.06.

   Parties in Interest    67    

11.07.

   Public Disclosure    67    

11.08.

   Return of Information    68    

11.09.

   Expenses    68    

11.10.

   Schedules    68    

11.11.

   Governing Law; Jurisdiction    69    

11.12.

   Counterparts    69    

11.13.

   Headings    69    

11.14.

   Severability    69

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

SCHEDULES

    

Schedule 1.01(a)

   Asset Selling Corporations

Schedule 1.01(b)

   Conveyed Subsidiaries

Schedule 1.01(c)

   Facilities

Schedule 1.01(d)

   Knowledge of Pfizer

Schedule 1.01(e)

   Stock Selling Corporations

Schedule 2.02(a)

   Leased Real Property of Asset Selling Corporations

Schedule 2.02(h)

   Product Registrations

Schedule 2.02(o)

   Domain Names

Schedule 2.02(p)

   Other Assets

Schedule 2.04(a)(ix)

   Excluded Assets

Schedule 2.04(a)(xii)

   Certain Retained Assets

Schedule 2.05(h)

   Assumed Liabilities Related to Pending Litigation and Claims

Schedule 3.02

   Allocation of the Aggregate Purchase Price

Schedule 4.04(iii)

   Term Sheet for Site Separation Agreement

Schedule 6.03(b)(i)

   Capital Structure of Conveyed Subsidiaries

Schedule 6.03(b)(ii)

   Conveyed Subsidiaries – Interests and Partnership Agreements

Schedule 6.04

   Non-Contravention (Pfizer)

Schedule 6.05

   Governmental Authorizations (Pfizer)

Schedule 6.06(a)

   Financial Information

Schedule 6.06(b)

   Financial Information - Exceptions

Schedule 6.07

   Absence of Material Changes

Schedule 6.08

   Litigation

Schedule 6.09

   Compliance with Laws

Schedule 6.10(c)

   Product Registrations; Regulatory Compliance

Schedule 6.11

   Environmental Matters

Schedule 6.12(a)

   Material Contracts

Schedule 6.12(b)

   Material Contracts - Exceptions

Schedule 6.13(a)(i)

   Intellectual Property

Schedule 6.13(a)(ii)

   Intellectual Property - Exceptions

Schedule 6.13(b)

   Intellectual Property - Licenses

Schedule 6.14(a)(i)

   Owned Real Property

Schedule 6.14(a)(ii)

   Owned Real Property - Exceptions

Schedule 6.14(b)

   Leased Real Property of Conveyed Companies

Schedule 6.14(c)

   Real Property Encroachments

Schedule 6.15

   Title to Assets – Exceptions

Schedule 6.16(a)

   Taxes

Schedule 6.16(b)

   Tax Liens

Schedule 6.16(c)

   Tax Examinations

Schedule 6.17

   Employee Benefits (US)

Schedule 6.17(g)(i)

   Employees (US)

Schedule 6.17(g)(ii)

   Employees (non-US)

Schedule 6.17(h)

   Pension Arrangements

Schedule 6.20

   Labor and Employment Matters

 

i

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

SCHEDULES

    

Schedule 6.21

   Certain Supply Relationships

Schedule 7.05

   Governmental Authorizations (Purchaser)

Schedule 7.06

   Third Party Approvals Purchaser

Schedule 8.02

   Conduct of Business

Schedule 8.03(a)

   Japan License

Schedule 8.03(a)(iii)

   Employees (US) (Closing)

Schedule 8.05(a)(i)

   Pharmacia Separation Benefit Plan

Schedule 8.05(a)(iii)

   Employees (US)

Schedule 8.05(a)(v)

   Purchaser Benefit Plans (US)

Schedule 8.05(b)(ii)(A)

   Purchaser Qualified Plans

Schedule 8.05(e)

   Employees (non-US) (Closing)

Schedule 8.09

   Products Excluded from Noncompetition Provisions

Schedule 9.11

   Certain Matter

Schedule 11.05(d)

   MoHya

 

ii

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

EXHIBITS

    

Exhibit A

   List of instruments and documents provided by Pfizer

Exhibit B

   List of instruments and documents provided by Purchaser to Seller
Corporations

Exhibit C

   Form of Transitional Services Agreement

Exhibit D

   Form of Transitional Intellectual Property License Agreement

Exhibit E

   Description of Real Property Lease Agreement

Exhibit F

   Term Sheet for Supply Agreement

Exhibit G

   Description of Warehousing and Distribution Agreement

Exhibit H

   Asset Transfer Agreement

Exhibit I

   Real Property Sale Agreement

 

 

iii

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

GLOSSARY OF DEFINED TERMS

 

Term

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

   Section

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

2003 Audited Financial Information

   8.16

2003 Unaudited Financial Information

   6.06

Access Road

   8.24

Affected Employee

   1.01

Affiliate

   1.01

Aggregate Purchase Price

   3.01(a)

Agreement

   1.01

Allocation

   3.02(a)

Alternate Road

   8.24

Ancillary Agreements

   1.01

Applicable Remedial Action Standard

   9.10

ARD

   1.01

Asset Purchase Price

   3.01(a)

Asset Selling Corporations

   1.01

Assumed Contracts

   2.02(d)

Assumed Liabilities

   2.05

Audited Financial Information

   6.06

Bangalore Facility

   2.02(d)

Business

   1.01

Business Day

   1.01

Business Equipment

   2.02(d)

Cash Equivalents

   1.01

Closing

   1.01

Closing Date

   4.01

Code

   1.01

Collateral Source

   9.07

Competition Laws

   1.01

Competitive Activity

   8.09(a)

Confidentiality Agreement

   1.01

Consolidated Tax Returns

   1.01

Consolidated Taxes

   1.01

Contract

   1.01

Conveyed Companies

   1.01

Conveyed Subsidiaries

   1.01

Diagnostic Hazardous Materials

   9.11

Dollars ($)

   1.03(c)

Employee

   1.01

Employee (non-US)

   1.01

Employee (US)

   1.01

Environmental Law

   1.01

Environmental Liability

   1.01

Environmental Permit

   1.01

Equipment Leases

   2.02(d)

 

i

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

Term

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

   Section

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

ERISA

   1.01

ERISA Affiliate

   1.01

Evaluation Material

   8.01(b)

Excluded Assets

   2.04(a)

Excluded Environmental Liabilities

   1.01

Facilities

   1.01

Financial Information

   6.06

Foreign Implementing Agreements

   1.01

Foreign Plans

   1.01

GAAP

   1.01

Governmental Antitrust Entity

   8.03(c)

Governmental Authority

   1.01

Governmental Authorizations

   1.01

Governmental Order

   1.01

Groningen VOC Emissions Study

   1.01

Hazardous Materials

   1.01

Healon AB

   1.01

Healon Business Drop Down

   Recitals

Healon Business Drop Down Documents

   1.01

Healon Pro Forma Statement

   6.06

HSR Act

   1.01

Income Tax(es)

   1.01

Indebtedness

   1.01

Indemnified Party

   9.03(a)

Indemnifying Party

   9.03(a)

Intellectual Property

   1.01

Intellectual Property Licenses

   1.01

Inventories

   1.01

IRS

   1.01

Knowledge of Pfizer

   1.01

Laws

   1.01

Leased Real Property

   2.02(a)

Liabilities

   1.01

Liens

   1.01

Loss(es)

   9.01(a)

Material Adverse Effect

   1.01

Material Contracts

   6.12(a)

MoHya

   2.02(t)

Net Economic Benefits Letter

   8.03(e)

Non-Returned Taxes

   6.16(a)

Outside Date

   10.01(b)

Patent Rights

   1.01

Permitted Encumbrances

   1.01

Person

   1.01

Pfizer

   Preamble

 

ii

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

Term

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

   Section

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

Pfizer Qualified Plans

   8.05(b)

Pharmacia Separation Benefit Plan

   8.05(a)(ii)

Plan

   1.01

Pre-Closing Period

   1.01

Pre-Closing Tax Period

   8.04(g)(iii)

Proceeding

   11.11(b)

Product Claim

   1.01

Product Registrations

   6.10(a)

Purchased Assets

   2.02

Purchaser

   Preamble

Purchaser Qualified Plans

   8.05(b)

Purchaser Tax Act

   1.01

Quarterly Financial Statements

   8.17(a)

Real Property

   6.14(a)

Real Property Lease Agreements

   4.04

Real Property Leases

   2.02(a)

Release

   1.01

Remedial Action

   1.01

Required Governmental Report

   1.01

Retained Liabilities

   2.06

Retirement Plans

   8.05(b)

Road Approvals

   8.24

Rooster Comb Agreements

   6.21

Savings Plans

   8.05(b)

Section 3.02(i) Allocation

   3.02(a)

Section 3.02(ii) Allocation

   3.02(a)

Securities Act

   1.01

Seller Corporations

   1.01

Share Purchase Price

   3.01(a)

Shares

   Recitals

Site Separation Agreement

   4.04

Stock Selling Corporations

   1.01

Straddle Period

   8.04(a)(i)

Sub-Allocation Draft

   3.02(c)

Subsidiary

   1.01

Supply Agreement

   4.04

Swedish Business

   8.18

Tax Claim

   8.04(i)(A)

Tax Return(s)

   1.01

Tax(es)

   1.01

Third Party Claim

   9.04(a)

Trademark Rights

   1.01

Transitional Intellectual Property License Agreement

   4.04

Transitional Services Agreement

   4.04

Warehousing and Distribution Agreement

   4.04

WARN Act

   1.01

 

 

iii

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

STOCK AND ASSET PURCHASE AGREEMENT

 

THIS STOCK AND ASSET PURCHASE AGREEMENT is made and entered into as of April 21,
2004 between Pfizer Inc., a Delaware corporation (“Pfizer”), and Advanced
Medical Optics, Inc., a Delaware corporation (“Purchaser”).

 

RECITALS

 

WHEREAS, Pfizer is engaged in the Business (as defined below) through certain of
its Subsidiaries and is the direct or indirect owner of controlling stock
interests in the Stock Selling Corporations (as defined below) and of
controlling stock interests in the Asset Selling Corporations (as defined
below);

 

WHEREAS, the Stock Selling Corporations are the record and beneficial owners of
100% of the issued and outstanding shares of capital stock of the Conveyed
Subsidiaries (as defined below), and the Asset Selling Corporations own the
Purchased Assets (as defined below);

 

WHEREAS, prior to the Closing of the transactions contemplated by this
Agreement, the Healon Business Dropdown (as defined below) will be effected in
accordance with the provisions of the Healon Business Drop Down Documents (as
defined below), subject to the provisions of Section 8.18 (the “Healon Business
Drop Down”); and

 

WHEREAS, the parties hereto desire that, at the Closing (i) Pfizer shall cause
the Stock Selling Corporations to sell and transfer to Purchaser, and Purchaser
shall purchase from the Stock Selling Corporations, the issued and outstanding
shares of capital stock of the Conveyed Subsidiaries owned by such Stock Selling
Corporations as set forth on Schedule 1.01(b) (the “Shares”), and (ii) Pfizer
shall cause the Asset Selling Corporations to sell and transfer to Purchaser,
and Purchaser shall purchase from the Asset Selling Corporations, all of the
Purchased Assets and assume all of the Assumed Liabilities (as defined below),
in each case upon the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto hereby
agree as follows:

 

ARTICLE I

DEFINITIONS AND TERMS

 

1.01. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:

 

“ARD” shall mean the EU Acquired Rights Directive (2001/23/EC of 12th March
2001).

 

“Affected Employee” shall mean an Employee (i) who accepts an offer of
employment or offer of continuation of employment by Purchaser or any of its
Affiliates on or prior to the Closing Date and works for Purchaser or any of its
Affiliates for at least one day;

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

(ii) whose employment, as a matter of Law, automatically transfers to or
continues with Purchaser or any of its Affiliates; or (iii) whose initial offer
of employment by Purchaser or any of its Affiliates does not constitute a
“comparable position” (as defined in Section 8.05(a)(v)) which offer is
subsequently rejected, resulting in termination of employment, whether or not
such Employee worked for Purchaser or any of its Affiliates for at least one
day.

 

“Affiliate” shall mean, with respect to any Person, any other person directly or
indirectly controlling, controlled by, or under common control with, such Person
at any time during the period for which the determination of affiliation is
being made.

 

“Agreement” shall mean this Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.

 

“Ancillary Agreements” shall mean the Transitional Services Agreement,
Transitional Intellectual Property License Agreement, Site Separation Agreement,
Real Property Lease Agreements, Supply Agreement and Warehousing and
Distribution Agreement.

 

“Asset Selling Corporations” shall mean those entities listed on Schedule
1.01(a).

 

“Business” shall mean the worldwide business of researching, developing,
manufacturing, marketing, distributing and selling viscoelastic products,
intraocular lenses and glaucoma shunts used in the practice of human ophthalmic
surgery, conducted by Pfizer or its Subsidiaries.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a day on
which banks in New York City are authorized or obligated by law or executive
order to close.

 

“Cash Equivalents” shall mean cash, checks, money orders, marketable securities,
short-term instruments and other cash equivalents, funds in time and demand
deposits or similar accounts, and any evidence of indebtedness issued or
guaranteed by any Governmental Authority.

 

“Closing” shall mean the closing of the transactions contemplated by this
Agreement pursuant to the terms of this Agreement, including Section 8.03(e).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, from time to
time.

 

“Competition Laws” shall mean statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines, and other Laws that are designed or
intended to prohibit, restrict or regulate actions or transactions having the
purpose or effect of creating or strengthening a dominant position,
monopolization, lessening of competition or restraint of trade.

 

“Confidentiality Agreement” shall mean the Confidentiality Agreement between
Morgan Stanley & Co. Incorporated (on behalf of Pfizer) and Purchaser or an
Affiliate of Purchaser relating to the proposed sale of the Business.

 

2

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

“Consolidated Tax Returns” shall mean any Tax Returns with respect to
Consolidated Taxes.

 

“Consolidated Taxes” shall mean all federal, state, provincial or local Income
Taxes, domestic or foreign (including in the Netherlands and in Sweden), that
are paid on a consolidated, unitary, combined or similar basis with respect to
Tax Returns that include one or more Conveyed Companies, on the one hand, and
Pfizer or any of its Affiliates (other than the Conveyed Companies) on the other
hand.

 

“Contract” shall mean any contract, agreement, lease, sublease, license,
commitment and all other legally binding arrangements (including customer
contracts, supplier contracts and purchase orders) in each case whether oral or
written, but excluding Environmental Permits and Governmental Authorizations.

 

“Conveyed Companies” shall mean the Conveyed Subsidiaries and their
Subsidiaries, if any.

 

“Conveyed Subsidiaries” shall mean those entities listed on Schedule 1.01(b).

 

“Employee” shall mean an Employee (non-US) or an Employee (US).

 

“Employee (non-US)” shall mean any individual who, as of the Closing, (i) shall
be (or in the case of clause (ii)(C) below, is scheduled to become) an employee
outside the United States of America of a Conveyed Company, an Asset Selling
Corporation or another Affiliate of Pfizer who primarily performs (or will, on
commencing work, primarily perform) services on behalf of the Business; and (ii)
either (A) shall have been employed and at work on the Closing Date; (B) shall
have been absent on the Closing Date because of illness or on short-term
disability (including maternity disability), workers’ compensation, vacation,
parental leave of absence, or other absence or leave of absence consistent with
the Seller Corporations’ policies, practices and procedures in effect at the
time such absence or leave commenced; or (C) shall have received an offer of
employment with the Business with a Conveyed Company, an Asset Selling
Corporation or another Affiliate of Pfizer, in the ordinary course of business
on or prior to the Closing Date, but shall have not yet commenced work as of the
Closing Date.

 

“Employee (US)” shall mean any individual who, as of the Closing, (i) shall be
(or in the case of clause (ii)(C) below, is scheduled to become) an employee in
the United States of America of a Conveyed Company, an Asset Selling Corporation
or another Affiliate of Pfizer who primarily performs (or will, on commencing
work, primarily perform) services on behalf of the Business; and (ii) either (A)
shall have been employed and at work on the Closing Date; (B) shall have been
absent on the Closing Date because of illness or on short-term disability
(including maternity disability), workers’ compensation, vacation, parental
leave of absence, or other absence or leave of absence consistent with the
Seller Corporations’ policies, practices and procedures in effect at the time
such absence or leave commenced; or (C) shall have received an offer of
employment with the Business with a Conveyed Company, an Asset Selling
Corporation or another Affiliate of Pfizer, in the ordinary course of business
on or prior to the Closing Date, but shall have not yet commenced work as of the
Closing Date.

 

3

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

“Environmental Law” shall mean any applicable Law and binding administrative or
judicial interpretations thereof, as in effect on the Closing Date relating
directly or indirectly to (i) the environmental aspects of product approvals,
including occupational health and safety; (ii) the protection of the environment
(including air, water vapor, surface water, groundwater, drinking water supply,
surface or subsurface land); or (iii) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, Release or disposal of Hazardous Materials.

 

“Environmental Liability” shall mean all Liabilities and Losses resulting from
(i) failure to comply with any requirement of an Environmental Law; (ii) failure
to obtain or comply with any required Environmental Permit; (iii) a Remedial
Action; or (iv) harm or injury to any real property, to any Person, to public
health, or to any natural resource (other than Remedial Action) as a result of
exposure to Hazardous Materials.

 

“Environmental Permit” shall mean a permit, license, certificate, approval or
authorization held by a Conveyed Company or an Asset Selling Corporation and
issued by a Governmental Authority pursuant to an Environmental Law.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

“ERISA Affiliate” means Pfizer and all trades or businesses (whether or not
incorporated) that together with Pfizer would be deemed to be a “single
employer” within the meaning of Section 4001(b)(1) of ERISA.

 

“Excluded Environmental Liabilities” shall mean:

 

(i) Environmental Liabilities resulting from Third Party Claims associated with
or arising from all facilities other than (A) those owned or leased by the
Conveyed Companies as of the Closing Date, or (B) those constituting part of the
Purchased Assets as of the Closing Date;

 

(ii) Environmental Liabilities resulting from Third Party Claims for Remedial
Action at any Facility to the extent the Release resulting in such Environmental
Liability existed or had occurred prior to the Closing and arose out of the
operation of the Business; and provided that the parties expressly agree to not
consider the matter addressed on Schedule 9.11 as pertaining to this provision
and such matter shall be addressed by Section 9.11 and Schedule 9.11 and as
such, not be considered as an Environmental Liability nor be covered by this
definition;

 

(iii) Environmental Liabilities as defined in clauses (i) and (ii) of the
definition of Environmental Liability, to the extent confirmed or verified by
the competent Governmental Authority as resulting from the failure to comply
with any requirement of Environmental Law prior to the Closing or the failure to
obtain or comply with any required Environmental Permit prior to the Closing,
including, specifically, fines and penalties with respect to such violations and
the costs of implementing or undertaking any corrective action with respect to
such violations in accordance with Section 9.12 of this Agreement;

 

4

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

(iv) Environmental Liabilities resulting from the off-site transportation,
storage, disposal, treatment or recycling of Hazardous Materials generated by
and transported off-site by or on behalf of the Business prior to the Closing;
and

 

(v) Environmental Liabilities, as defined in clause (iv) of the definition of
Environmental Liabilities resulting from Third Party Claims, arising from
exposure to or Release of Hazardous Materials, at or from any Facility, where
such exposure or Release occurred in connection with the operation of the
Business and prior to the Closing.

 

Notwithstanding anything to the contrary and except as expressly provided in
Section 9.12 of this Agreement, capital, operations and maintenance and other
costs of environmental-related compliance with Environmental Laws or any
Environmental Permit in the ordinary course of operating the Business
(including, without limitation, closure and post-closure expenditures incurred
after the Closing Date) shall not be deemed to be Excluded Environmental
Liabilities.

 

“Facilities” shall mean the manufacturing, office, research and development, and
warehouse facilities listed on Schedule 1.01(c).

 

“Foreign Implementing Agreements” shall mean the various agreements to be
executed by the Seller Corporations located outside of the United States of
America after the date of this Agreement for the purpose of implementing the
sale, transfer and conveyance on the Closing Date, or as soon thereafter as can
be effected, of the Purchased Assets, Assumed Liabilities and the Shares to
Purchaser or the designated Affiliate of Purchaser, as the case may be, by such
Seller Corporations.

 

“Foreign Plan” shall mean each material pension, profit sharing, savings,
retirement, health, life, disability, deferred compensation, incentive,
severance and fringe benefit plan, program, or arrangement maintained or
contributed to by any Seller Corporation for the benefit of any Employees
(non-US), other than plans, programs, or arrangements required to be maintained
or contributed to by the Laws of the relevant jurisdiction and Plans maintained
for the benefit of Employees (US).

 

“GAAP” shall mean accounting principles and practices generally accepted in the
United States of America as consistently applied by Pfizer.

 

“Governmental Authority” shall mean any supranational, national, federal, state
or local or municipal judicial, legislative, executive or regulatory authority.

 

“Governmental Authorizations” shall mean all licenses, permits, certificates and
other authorizations and approvals required to carry on the Business as
conducted as of the date of this Agreement under the applicable Laws of any
Governmental Authority.

 

“Governmental Order” shall mean any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.

 

“Groningen VOC Emissions Study” shall mean a certain VOC emissions study of the
Groningen, Netherlands Facility such that: (i) the plan for which study (Plan
van aanpak

 

5

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

VOS-onderzoek) was submitted by Pharmacia Groningen BV to and approved by the
local competent Governmental Authority (Gemeente Groningen); and (ii) the
expeditious conduct, completion and submission of same to the Gemeente
Groningen, including the identification and development of possible
cost-effective emissions reduction measures based on the study results, as
undertaken by Pfizer.

 

“Hazardous Materials” shall mean all materials (including, without limitation,
wastes, pollutants and contaminants) in such quantity or concentration as to be
subject to regulation pursuant to Environmental Law as capable of causing harm
or injury to human health or the environment, including oils, petroleum, and
petroleum products.

 

“Healon AB” means AB Grundstenen 91077 (under name change to Healon AB).

 

“Healon Business Drop Down Documents” shall mean (i) the Asset Transfer
Agreement, dated April 19, 2004, between Pfizer Health AB and Healon AB,
attached as Exhibit H hereto, and (ii) the Real Property Sale Agreement, dated
April 19, 2004, between Fyrcia HB and Healon AB, attached as Exhibit I hereto.

 

“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

 

“Income Tax” or “Income Taxes” shall mean all Taxes based upon, measured by, or
calculated with respect to (i) gross or net income or gross or net receipts or
profits (including any capital gains, minimum Taxes and any Taxes on items of
tax preference, but not including sales, use, real or personal property transfer
or other similar Taxes); (ii) multiple bases (including corporate franchise,
doing business or occupation Taxes) if one or more of the bases upon which such
Tax may be based upon, measured by, or calculated with respect to, is described
in clause (i) above; and (iii) withholding Taxes measured by, or calculated with
respect to, any payments or distributions (other than wages).

 

“Indebtedness” of any Person means (i) indebtedness for borrowed money of such
Person (including any long-term or short-term portions thereof) and (ii) any
indebtedness secured by the assets of, or guaranteed by, such Person or
evidenced by a note, bond, letter of credit, indenture or similar instrument;
provided, however, that Indebtedness shall not be deemed to include accounts
payable incurred in the ordinary course of business or intercompany
transactions.

 

“Intellectual Property” shall mean all Patent Rights, inventions, discoveries,
trade secrets, know-how and ideas, rights in research and development, and
commercially practiced processes and inventions, whether patentable or not, in
any jurisdiction, Trademark Rights in any jurisdiction, copyrights (registered
and unregistered) and registrations or applications for registration of
copyrights in any jurisdiction, and any renewals or extensions thereof, and the
right to sue for past infringement of the foregoing.

 

“Intellectual Property Licenses” shall mean all licenses and agreements relating
to Intellectual Property licensed by or to the Asset Selling Corporations or by
any of the Conveyed Companies.

 

6

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

“Inventories” shall mean all inventory, including raw materials, packaging
supplies, work-in-process or finished goods of the Business owned by each of the
Conveyed Companies or the Asset Selling Corporations.

 

“IRS” shall mean the Internal Revenue Service of the United States of America.

 

“Knowledge of Pfizer” shall mean the actual knowledge of any of the individuals
listed on Schedule 1.01(d).

 

“Laws” shall include any federal, state, foreign or local law, common law,
statute, ordinance, rule, regulation, code or Governmental Order.

 

“Liabilities” shall mean any and all debts, liabilities and obligations, whether
accrued or fixed, known or unknown, absolute or contingent, matured or unmatured
or determined or determinable.

 

“Liens” shall mean any lien, security interest, mortgage, charge or similar
encumbrance.

 

“Material Adverse Effect” shall mean an effect that is materially adverse to the
business results, operations or financial condition of the Business taken as a
whole, but shall exclude any changes, effects, events, circumstances,
occurrences or state of facts (i) that are generally applicable in the economies
of the United States of America, the European Union, Sweden, India, Japan or any
other country in which there are transferred assets or sales of products of the
Business or in the securities, syndicated loan, credit or financial markets of
the United States of America, the European Union, Sweden, India, Japan or any
other country in which there are transferred assets or sales of products of the
Business; (ii) that arise out of or are attributable to (A) the acts or
omissions of Purchaser and/or its Affiliates, or (B) the transactions
contemplated by this Agreement; (iii) that generally affect the industries in
which the Business operates; (iv) that arise out of or are attributable to acts
of terrorism or war (whether or not threatened, pending or declared); or (v)
that arise out of or are attributable to the public announcement of this
Agreement or the transactions contemplated hereby.

 

“Patent Rights” shall mean all rights to and in the patents and patent
applications identified on Schedule 6.13(a)(i), together with any extensions,
reexaminations and reissues of such patents, patents of addition, divisions,
continuations, continuations-in-part, and any subsequent filings in any country
claiming priority therefrom.

 

“Permitted Encumbrances” shall mean (i) statutory Liens arising by operation of
Law with respect to a Liability incurred in the ordinary course of business and
which is not delinquent; (ii) such Liens and other imperfections of title as do
not materially detract from the value or impair the use of the property subject
thereto or make such property unmarketable; (iii) Liens for Taxes not yet
subject to penalties for nonpayment or which are being actively contested in
good faith by appropriate proceedings; or (iv) mechanics’, materialmens’,
carriers’, workmens’, warehousemens’, repairmens’, landlords’ or other like
Liens and security obligations that are not delinquent.

 

7

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

“Person” shall mean an individual, a limited liability company, joint venture, a
corporation, a partnership, an association, a trust, a division or operating
group of any of the foregoing or other entity or organization.

 

“Plan” shall mean any material employee benefit plan as defined in Section 3(3)
of ERISA and any other material written plan, program, agreement or arrangement,
whether qualified under applicable Law or not, maintained (or contributed to or
required to be contributed to) by any Seller Corporation, for the benefit of any
Employee (US).

 

“Pre-Closing Period” shall mean all taxable years or other taxable periods that
end on or before the Closing Date and, with respect to any Straddle Period, the
portion of the Straddle Period ending on the Closing Date.

 

“Product Claim” shall mean a written claim from a third party addressed to, and
received by, the Conveyed Companies or the Asset Selling Corporations prior to
the Closing for money or other compensation (beyond the cost of a particular
product) in respect of injury allegedly due and owing as a result of the use,
application, malfunction or defect of a product of the Business irrespective of
the legal theory of liability and in respect of which no lawsuit has been
commenced prior to the Closing.

 

“Purchaser Tax Act” shall mean any: (i) Tax election, (ii) change in Tax
accounting method or (iii) change in the Tax reporting treatment of any specific
asset or Liability reflected on the balance sheet of a Conveyed Company on the
Closing Date that, in the case of clauses (i), (ii) and (iii), (A) is made by
Purchaser an Affiliate of Purchaser (including a Conveyed Company) or any
successor or assign of Purchaser or such Affiliate of Purchaser after the
Closing Date, (B) is made with respect to a Conveyed Company or any of its
successors and assigns, (C) is not required by Law or any taxing authority, (D)
is not expressly contemplated by this Agreement, (E) has not been approved in
writing by Pfizer, an Affiliate of Pfizer or a successor or assign of Pfizer or
such Affiliate of Pfizer (such approval not to be unreasonably withheld) and (F)
is the sole and direct cause of an increase in income or a decrease in
deductions or other allowance or credits for a Pre-Closing Period that results
in an increase in Taxes for a Pre-Closing Period.

 

“Release” shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, injecting, depositing, disposing, discharging, dispersal, escaping,
dumping or leaching into the environment, including surface water, soil or
groundwater (including the abandonment or discarding of barrels, containers, and
other receptacles containing Hazardous Materials) or as otherwise defined under
Environmental Laws.

 

“Remedial Action” shall mean action required by Governmental Authority or
Governmental Order pursuant to Environmental Law to clean up the environment,
including soil, surface water or groundwater in response to a Release of
Hazardous Materials, including associated action taken to investigate, monitor,
assess and evaluate the extent and severity of any such Release; action taken to
remediate any such Release; post-remediation monitoring of any such Release; and
preparation of all reports, studies, analyses or other documents relating to the
above. “Remedial Action” also shall refer to any judicial, administrative or
other proceeding relating to any of the above, including the negotiation and
execution of judicial or administrative

 

8

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

consent decrees; responding to information requests by any Governmental
Authority; or defending claims brought by any Governmental Authority or any
other Person, whether such claims are equitable or legal in nature, relating to
the cleanup of the environment, including soil, surface water, groundwater, and
sediments in response to a Release of Hazardous Materials and associated
actions. “Remedial Action” shall not include (i) the capital, operation and
maintenance costs incurred by Purchaser to continue to operate the Facilities,
fixtures and equipment which as of the Closing Date are being operated by any
Asset Selling Corporation or Conveyed Company in compliance with Environmental
Laws; or (ii) the closure and post-closure expenditures related to such
Facilities, fixtures and Equipment.

 

“Required Governmental Report” shall mean any written notice, report or other
filing by Purchaser that is required by Environmental Law as a result of actions
taken in the ordinary course of operating the Business.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Seller Corporations” shall mean Pfizer, the Stock Selling Corporations and the
Asset Selling Corporations.

 

“Stock Selling Corporations” shall mean those entities listed on Schedule
1.01(e).

 

“Subsidiary” shall mean an entity as to which Pfizer or Purchaser or any other
relevant entity, as the case may be, owns directly or indirectly 50% or more of
the voting power or other similar interests. Any Person which comes within this
definition as of the date of this Agreement but thereafter fails to meet such
definition shall from and after such time not be deemed to be a Subsidiary of
Pfizer or Purchaser or any other relevant entity, as the case may be. Similarly,
any Person which does not come within such definition as of the date of this
Agreement but which thereafter meets such definition shall from and after such
time be deemed to be a Subsidiary of Pfizer or Purchaser or any other relevant
entity, as the case may be.

 

“Tax” or “Taxes” shall mean all taxes, charges, duties, fees, levies or other
assessments, including income, excise, property, sales or use, value added,
profits, license, withholding (with respect to compensation or otherwise),
payroll, employment, net worth, capital gains, transfer, real estate transfer,
stamp, social security, environmental, occupation, franchise taxes, Consolidated
Taxes and transfer taxes, whether imposed by any Governmental Authority or
taxing authority anywhere in the world, and including (i) any interest,
penalties and additions attributable thereto or imposed on or with respect
thereto and (ii) any liability for such amounts as a result of a contractual
obligation to indemnify any Person.

 

“Tax Return” or “Tax Returns” shall mean any return, report, declaration,
information return, statement or other document filed or required to be filed
with any Governmental Authority, in connection with the determination,
assessment or collection of any Tax or the administration of any Laws relating
to any Tax.

 

“Trademark Rights” shall mean all registered and unregistered trademarks,
service marks, trade names, designs, logos, brand names, certification marks,
trade dress, other similar designations of source or origin and general
intangibles of like nature, together with goodwill associated with the foregoing
and registrations in any jurisdiction of, and applications in any jurisdiction
to register, the foregoing, including any extension, modification or renewal of
any such registration or application.

 

9

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

“WARN Act” shall mean the Worker Adjustment and Retraining Notification Act of
1988, as amended.

 

1.02. Other Defined Terms. Other capitalized terms may be defined elsewhere in
this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.

 

1.03. Interpretation.

 

(a) The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement.

 

(b) Terms defined in the singular shall have a comparable meaning when used in
the plural, and vice versa.

 

(c) The terms “dollars” and “$” shall mean United States of America dollars.

 

(d) The term “including” shall mean “including, without limitation.”

 

(e) When a reference is made in this Agreement to an Article, a Section, an
Exhibit or Schedule, such reference shall be to an Article of, a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated.

 

ARTICLE II

PURCHASE AND SALE OF SHARES AND ASSETS

 

2.01. Purchase and Sale of Shares of the Conveyed Subsidiaries. Upon the terms
and subject to the conditions set forth herein, at the Closing, Pfizer shall
cause the Stock Selling Corporations to sell to Purchaser, and Purchaser shall
purchase from the Stock Selling Corporations, free and clear of all Liens, other
than Permitted Encumbrances, the Shares.

 

2.02. Purchase and Sale of Certain Assets of the Asset Selling Corporations.
Upon the terms and subject to the conditions set forth herein, at the Closing,
Pfizer shall cause each Asset Selling Corporation to sell, convey, assign and
transfer to Purchaser, and Purchaser shall purchase, acquire and accept from
each Asset Selling Corporation, free and clear of all Liens, other than
Permitted Encumbrances, all of such Asset Selling Corporation’s right, title and
interest in the following assets, properties and rights owned or held by such
Asset Selling Corporation on the date hereof (subject to any increases,
decreases or dispositions thereof as may occur prior to the Closing Date in the
ordinary course of business and not in violation of Section 8.02 hereof:

 

(a) the leasehold interests of the Asset Selling Corporations in real property
(the “Leased Real Property” and the leases relating to such Leased Real
Property, the “Real Property Leases”) that are set forth on Schedule 2.02(a),
including any prepaid rent and security deposits related thereto;

 

10

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

(b) the Real Property owned by the Asset Selling Corporations that is set forth
on Schedule 6.14(a)(i);

 

(c) all company-issued personal computers, cell phones, pagers and similar
equipment issued to members of the sales force of the Business who accept an
offer of employment given by Purchaser or one of its Affiliates;

 

(d) all furniture, equipment, machinery, office supplies, motor vehicles, spare
parts, tools, personal property and other tangible property owned, leased or
licensed by the Asset Selling Corporations and used solely and exclusively in
the Business, including at the assembly facility (the “Bangalore Facility”) of
the Business located in Bangalore, India (collectively, the “Business Equipment”
and any leases relating solely and exclusively to the Business Equipment, the
“Equipment Leases”);

 

(e) all Contracts to which any of the Asset Selling Corporations is a party or
by which any of the Asset Selling Corporations is bound that relate solely and
exclusively to the Business, including all Material Contracts (but excluding the
Real Property Leases, Equipment Leases, Intellectual Property Licenses and any
Contracts relating to the Excluded Assets) (the “Assumed Contracts”);

 

(f) all Inventories of the Asset Selling Corporations, including those in
transit, on consignment or in the possession of any third party;

 

(g) all rights to the Intellectual Property owned, used or licensed by the Asset
Selling Corporations and primarily used in the Business;

 

(h) if and to the extent transferable, all Product Registrations (and
applications therefor) owned, utilized or licensed by the Asset Selling
Corporations relating to the products of the Business (which do not include the
ophthalmic related products sold, but not manufactured by, the Business set
forth on Schedule 2.02(h));

 

(i) if and to the extent transferable, all other Governmental Authorizations,
including Environmental Permits (and applications therefor) owned, utilized or
licensed by the Asset Selling Corporations relating solely and exclusively to,
and required in the operation of, the Business;

 

(j) (A) all customer and vendor lists to the extent relating to the Business;
(B) all files and documents (including credit information) of the Asset Selling
Corporations to the extent relating to customers and vendors of the Business;
and (C) other business and financial records, files, books and documents
(whether in hard copy or computer format) to the extent relating to the
Business;

 

(k) the intercompany receivables for amounts due and owing solely among the
Conveyed Companies and the Asset Selling Corporations and solely in respect of
the Business, subject to Section 8.20;

 

11

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

(l) all prepaid expenses of the Asset Selling Corporations to the extent they
are related to, or used in, the Business, other than such prepaid expenses
relating to the Excluded Assets or the Retained Liabilities;

 

(m) the goodwill of the Business attributable to the Asset Selling Corporations;

 

(n) all advertising, marketing, sales and promotional materials of the Asset
Selling Corporations relating solely and exclusively to the Business;

 

(o) all domain names and any and all extensions, renewals or registrations
therefor related solely and exclusively to the Business, including those set
forth on Schedule 2.02(o);

 

(p) all assets set forth on Schedule 2.02(p);

 

(q) all purchase orders from customers for products of the Business which have
not been shipped at Closing;

 

(r) all assets, properties and rights reflected in the Financial Information
(subject to any increases, decreases or dispositions as set forth in the
parenthetical appearing before subsection (a) above);

 

(s) (A) if and to the extent transferable, all databases and computer software
programs, source codes and user manuals owned, used, leased by or licensed to
the Asset Selling Corporations on the Closing Date and relating to the Bangalore
Facility and (B) the computer hardware owned by the Asset Selling Corporations
on the Closing Date relating to the Bangalore Facility;

 

(t) all dedicated equipment located in Strangnas, Sweden for the development of
high molecular weight hyaluronate (“MoHya”) and all Intellectual Property solely
and exclusively related thereto, it being understood that Pfizer shall have no
responsibility for transportation or installation of such equipment; and

 

(u) any other assets of the Asset Selling Corporations owned, leased or licensed
and primarily relating to or primarily used in the Business, if and to the
extent that such assets are not referred to in the preceding paragraphs of this
Section 2.02.

 

All of the assets, properties and rights referred to in the preceding paragraphs
of this Section 2.02 are collectively referred to herein as the “Purchased
Assets”, it being understood and agreed that the Purchased Assets do not include
the Excluded Assets or the Shares.

 

2.03. Third Party Consents.

 

(a) Notwithstanding anything to the contrary in Section 2.02, there shall be
excluded from the purchase and sale of the Purchased Assets contemplated by this
Agreement any Real Property Lease, Equipment Lease, Intellectual Property
License, Assumed Contract and any other asset or right which is not assignable
or transferable without the consent of any Person

 

12

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

other than the Asset Selling Corporations, the Conveyed Companies, Pfizer, any
Subsidiary of Pfizer or Purchaser, to the extent that such consent shall not
have been given prior to the Closing; provided, however, that each of Pfizer and
Purchaser shall have the continuing obligation after the Closing to use
commercially reasonable efforts to endeavor to obtain all necessary consents to
the assignment thereof; provided, further, that neither Pfizer or any of its
Affiliates nor Purchaser or any of its Affiliates shall be required to commence
any litigation or offer or grant any material accommodation (financial or
otherwise) to any third party. Upon obtaining the requisite third party consents
thereto, such Real Property Leases, Equipment Leases, Intellectual Property
Licenses, Assumed Contracts and other assets or rights, if otherwise included in
the Purchased Assets, shall be transferred and assigned to Purchaser hereunder.

 

(b) With respect to any Real Property Lease, Equipment Lease, Intellectual
Property License, Assumed Contract or other asset or right that is not included
in the Purchased Assets assigned to Purchaser at the Closing by reason of
Section 2.03(a), after the Closing and until any requisite consent is obtained
and the foregoing is transferred and assigned to Purchaser, the parties shall
cooperate with each other, upon written request, in endeavoring to obtain for
Purchaser, an arrangement to provide Purchaser with substantially comparable
benefits thereof, and Purchaser hereby agrees to indemnify Pfizer and its
Affiliates in respect of all Liabilities incurred by such Persons, except in
cases of fraud, willful misconduct or gross negligence in relation to each such
arrangement and the applicable underlying Contract or other asset or right.

 

(c) Purchaser acknowledges that certain consents to the transactions
contemplated by this Agreement may be required from certain third parties
(including parties to the Real Property Leases, Equipment Leases, Intellectual
Property Licenses and Assumed Contracts), and that such consents have not been
and may not be obtained. Provided that Pfizer is in compliance with the
provisions of subsections (a) and (b) above and has satisfied all required
disclosure obligations under this Agreement with respect to such consents,
Purchaser agrees that the Aggregate Purchase Price shall not be reduced on
account of, and that Pfizer and its Affiliates shall not have any liability
whatsoever arising out of or relating to, the failure to obtain any consents
that may have been or may be required in connection with the transactions
contemplated by this Agreement or because of the default under or acceleration
or termination of any Real Property Lease, Equipment Lease, Intellectual
Property License, Assumed Contract or other Contract or right, as a result
thereof. Purchaser further agrees that no representation, warranty or covenant
of Pfizer contained herein shall be breached or deemed breached, and no
condition to Purchaser’s obligations to consummate the transactions contemplated
by this Agreement shall be deemed not satisfied as a result of the failure to
obtain any such consent or as a result of any such default, acceleration or
termination. Notwithstanding the foregoing, nothing in this Section 2.03(c)
shall limit in any way Pfizer’s obligation under Section 2.03(a).

 

2.04. Excluded Assets of the Business.

 

(a) Notwithstanding anything to the contrary in this Agreement, Purchaser is not
purchasing or acquiring any of the following (the “Excluded Assets”):

 

(i) Cash Equivalents;

 

13

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

(ii) all accounts and notes receivable of the Business, including intercompany
receivables, other than amounts due and owing on the Closing Date solely among
the Conveyed Companies and the Asset Selling Corporations in respect of the
Business, subject to Section 8.20;

 

(iii) with respect to the Asset Selling Corporations, all Tax losses and Tax
loss carry forwards and rights to receive refunds, credits and credit carry
forwards with respect to any and all Taxes, to the extent attributable to a
taxable period (or portion thereof) ending on or prior to the Closing Date,
including interest thereon, whether or not the foregoing is derived from the
Business;

 

(iv) the corporate books and records of the Asset Selling Corporations, subject
to Section 2.02(j);

 

(v) all current and prior insurance policies (other than, to the extent
assignable, those held in the name of the Asset Selling Corporations and
relating solely to the Business, unless such policies are reinsured or otherwise
covered by the Pfizer Corporate Insurance Program) and all rights of any nature
with respect thereto, including all insurance recoveries thereunder and rights
to assert claims with respect to any such insurance recoveries; provided,
however, that Purchaser shall receive copies of the claims histories relating to
the Business, to the extent available;

 

(vi) except as set forth in Section 8.05(b)(iii) or any Foreign Implementing
Agreement, all assets of any Plan or Foreign Plan;

 

(vii) the “Pfizer” and “Pharmacia” names and logos and any Intellectual Property
to the extent containing such names and logos;

 

(viii) all legal and beneficial interest in the share capital or equity
interests not related solely and exclusively to the Business;

 

(ix) any legal or beneficial interest in the assets listed on Schedule
2.04(a)(ix);

 

(x) all computer software programs, source codes and user manuals owned, used,
leased by or licensed to the Asset Selling Corporations on the Closing Date and,
subject to Sections 2.02(g), 2.02(j) and 2.02(s), all databases of the Asset
Selling Corporations;

 

(xi) other than the computers referred to in Section 2.02(c) or any computers
used solely and exclusively in the Business at the Bangalore Facility, all
computer hardware owned by the Asset Selling Corporations on the Closing Date
whether or not used in the Business;

 

(xii) any asset included on a supplement to Schedule 6.03(b)(i) delivered to
Purchaser after the date hereof pursuant to Section 11.10 which Purchaser
rejects as not being part of the Purchased Assets hereunder; and

 

14

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

(xiii) all assets set forth on Schedule 2.04(a)(xii).

 

(b) Pfizer may, at its sole expense, take (or cause one or more of its
Affiliates to take) such action as is necessary or advisable to transfer
effective as of the Closing Date the Excluded Assets from the Conveyed Companies
and each of the Asset Selling Corporations to Pfizer or one or more of its
Affiliates for such consideration or for no consideration, as may be determined
by the Seller Corporations in their sole discretion. After the Closing Date,
Purchaser shall take all actions (or shall cause its Affiliates to take all
actions) reasonably requested by the Seller Corporations to effect the
provisions of this Section 2.04, including the return of any Excluded Assets to
one or more of the Seller Corporations for no consideration.

 

2.05. Assumed Liabilities of the Business. Upon the terms and subject to the
conditions set forth herein, Purchaser agrees, effective at the Closing, to (i)
cause the Conveyed Companies to satisfy and discharge their respective
Liabilities, and (ii) assume and to satisfy and discharge the Liabilities of the
Seller Corporations set forth below in this Section 2.05. The Liabilities
referred to in clauses (i) and (ii) above, other than the Retained Liabilities
(collectively referred to herein as the “Assumed Liabilities”) are:

 

(a) Liabilities as reflected on the balance sheet included in the 2003 Unaudited
Financial Information (subject to any increases, or decreases thereof as may
occur prior to the Closing Date in the ordinary course of business and not in
violation of Section 8.02 hereof) as they exist on the Closing Date;

 

(b) all Liabilities, including all lawsuits commenced and all claims made after
the Closing, arising from the research, development, design, manufacture,
testing, marketing, distribution or sale of any products of the Business sold
after the Closing, including warranty obligations and irrespective of the legal
theory asserted;

 

(c) all Liabilities to suppliers for materials and services relating to the
Business ordered in the ordinary course of business prior to the Closing, but
scheduled to be delivered or provided thereafter, and all Liabilities to
customers under purchase orders for products of the Business which have not been
shipped at the Closing;

 

(d) all Liabilities arising prior to or after the Closing under any Contracts
that are assigned to Purchaser pursuant to Section 2.02 or 2.03 at or subsequent
to the Closing;

 

(e) all Liabilities with respect to products of the Business shipped and sold
prior to the Closing and returned after 60 days following the Closing;

 

(f) all Environmental Liabilities arising after the Closing;

 

(g) all Liabilities to, or otherwise relating to, Employees, as provided in
Section 8.05 and in respect of German pension obligations to the extent included
within subsection (a) above;

 

(h) Liabilities resulting from all lawsuits pending and all claims made as of
the Closing and listed on Schedule 6.08 other than as noted on such Schedule;
and

 

15

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

(i) all other Liabilities relating to the ownership of the Purchased Assets or
the conduct of the Business after the Closing.

 

2.06. Retained Liabilities of the Business. Notwithstanding anything to the
contrary in this Agreement, Purchaser is assuming only the Assumed Liabilities
and is not assuming any other Liabilities relating to the ownership of the
Purchased Assets or the conduct of the Business prior to the Closing. The
applicable Seller Corporations shall retain and be responsible for (and, to the
extent such Liabilities are Liabilities of any of the Conveyed Companies,
assume) all such other Liabilities relating to the Business (the “Retained
Liabilities”) including, without limitation, the following:

 

(a) Liabilities for Product Claims;

 

(b) Liabilities, including all lawsuits commenced and all claims made prior to
or after the Closing, arising from the research, development, design,
manufacture, testing, marketing, distribution or sale of any products of the
Business sold prior to the Closing, including warranty obligations and
irrespective of the legal theory asserted;

 

(c) Liabilities for which any Seller Corporation expressly has responsibility
pursuant to the terms of this Agreement;

 

(d) Liabilities related to the Excluded Assets;

 

(e) intercompany Liabilities, other than amounts due and owing solely among the
Conveyed Companies and the Asset Selling Corporations in respect of the
Business;

 

(f) any and all Liabilities for Taxes related to the Business or the Purchased
Assets for taxable periods prior to the Closing, except for Taxes attributable
to Purchaser Tax Acts;

 

(g) any and all Indebtedness of the Business existing as of Closing, including
any Indebtedness of any Conveyed Company or Asset Selling Corporation other than
Indebtedness of a Conveyed Company to another Conveyed Company;

 

(h) all Liabilities to, or otherwise relating to, Employees not assumed by
Purchaser as set forth in Section 2.05(g); and

 

(i) Liabilities for Taxes arising from or in connection with the Healon Business
Drop Down, except such valued-added taxes that may become payable in accordance
with Section 4.3 of the Asset Transfer Agreement between Pfizer Health AB and
Healon AB (attached at Exhibit H hereto).

 

16

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

ARTICLE III

PURCHASE PRICE

 

3.01. Purchase Price.

 

(a) In consideration of the sale and transfer of the Shares, Purchaser shall, or
shall cause any one of its Affiliates to, purchase the Shares and assume and
thereafter pay, perform, satisfy and discharge when due the Assumed Liabilities
attributable to the Conveyed Subsidiaries for an aggregate purchase price of
$396,756,000, allocated among the Shares as described on Schedule 3.02 (the
“Share Purchase Price”). In consideration of the sale and transfer of the
Purchased Assets, Purchaser shall, or shall cause any one of its Affiliates to,
purchase the Purchased Assets and assume and thereafter pay, perform, satisfy
and discharge when due the Assumed Liabilities attributable to such Purchased
Assets for an aggregate purchase price of $53,244,000, allocated among the Asset
Selling Corporations as described on Schedule 3.02 (the “Asset Purchase Price”
and, together with the Share Purchase Price, the “Aggregate Purchase Price”),
which shall be exclusive of any value added, stamp, transfer or registration
Taxes. Notwithstanding anything herein to the contrary, Purchaser shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement such amounts as are required to be deducted and
withheld with respect to any of the transactions contemplated by this Agreement
under any provision of Federal, state, local or foreign tax law. To the extent
that amounts are so withheld, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the person in respect of which
such deduction and withholding was made. Prior to deducting and withholding of
any amounts pursuant to the preceding sentence, Purchaser shall inform Pfizer of
any such requirement and engage in discussions with Pfizer relating thereto.

 

(b) The Aggregate Purchase Price ($450,000,000) shall be paid on the Closing
Date in immediately available funds, by wire transfer in accordance with written
instructions given by Pfizer to Purchaser not less than 2 Business Days prior to
the Closing. The Aggregate Purchase Price shall be allocated as described in
Section 3.02.

 

3.02. Allocation of the Aggregate Purchase Price.

 

(a) Pfizer, on behalf of itself and the Seller Corporations, and Purchaser (i)
have agreed to the allocation of the Aggregate Purchase Price among the Conveyed
Subsidiaries and the Asset Selling Corporations as set forth on Schedule 3.02
(the “Section 3.02(i) Allocation”) and (ii) shall agree as set forth below on
the allocation among the Purchased Assets sold by each Asset Selling Corporation
of the Asset Purchase Price allocable to such Asset Selling Corporation as set
forth on Schedule 3.02 (the “Section 3.02(ii) Allocation” and, together with the
Section 3.02(i) Allocation, the “Allocation”).

 

(b) Each of Pfizer on the one hand and Purchaser on the other hand shall (i) be
bound by the Allocation for purposes of determining any Taxes; (ii) prepare and
file, and cause its Affiliates to prepare and file, its Tax Returns on a basis
consistent with the Allocation; and (iii) take no position, and cause its
Affiliates to take no position, inconsistent with the Allocation on any
applicable Tax Return or in any proceeding before any taxing authority or
otherwise. In the event that the Allocation is disputed by any taxing authority,
the party receiving notice of the

 

17

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

dispute shall promptly notify the other party hereto, and both Pfizer and
Purchaser agree to use their best efforts to defend such Allocation in any audit
or similar proceeding, and the matter shall be handled as a Tax Claim described
in Section 8.04(i)(B).

 

(c) Pfizer, on behalf of itself and the Seller Corporations and Purchaser
acknowledge that the Section 3.02(i) Allocation was done at arm’s length based
upon a good faith estimate of fair market values. Pfizer and Purchaser agree
that Purchaser shall prepare or cause to be prepared and provide to Pfizer a
draft of the Section 3.02(ii) Allocation (the “Sub-Allocation Draft”). Pfizer
shall be provided with a copy of the Sub-Allocation Draft on or prior to the
90th day after Closing and, provided that Pfizer consents to the Sub-Allocation
Draft (which consent shall not be unreasonably withheld), the Section 3.02(ii)
Allocation shall be made as specified in the Sub-Allocation Draft.

 

(d) If Pfizer does not consent to the Sub-Allocation Draft, Pfizer and Purchaser
shall use their best efforts to mutually agree on any amendments to be made to
the Sub-Allocation Draft and the Section 3.02(ii) Allocation shall be made as
specified in the Sub-Allocation Draft as amended. If an independent appraisal
firm has not performed an appraisal to support the Sub-Allocation Draft, Pfizer
may request such an appraisal to be conducted by an independent appraisal firm
selected by Purchaser of such Sub-Allocation Draft, the cost of which shall be
borne equally by Purchaser and Pfizer, if Pfizer reasonably believes that there
is no reasonable basis for the Sub-Allocation Draft. Post-Closing adjustments,
if any, to the Aggregate Purchase Price shall be allocated to the Conveyed
Company or to the Asset Selling Corporation to which the adjustment relates, and
shall be further allocated (if relevant for purposes of any applicable Law) to
the assets to which the adjustment relates. The Aggregate Purchase Price
allocation to such Conveyed Company or Asset Selling Corporation shall be
correspondingly increased or decreased.

 

(e) If, after all other adjustments to the Allocation are made, the Allocation
with respect to any Asset Selling Corporation, when expressed in the relevant
local currency at the applicable rate of exchange on the Closing Date, is less
than the local currency net book value as reflected on the balance sheet of such
Asset Selling Corporation on the Closing Date, determined in accordance with
GAAP, of the Purchased Assets of such Asset Selling Corporation as of the
Closing Date, then the Allocation with respect to such Asset Selling Corporation
shall be adjusted so that it is equal to such local currency net book value
converted at the rate of exchange on the Closing Date and a corresponding
adjustment will be made to the Allocation pro rata with respect to Healon AB and
Pharmacia Groningen B.V. based on their relative Aggregate Purchase Price
allocation. The “rate of exchange” for purposes of this Section 3.02(e) shall be
the spot rate on the Closing Date as published by the Financial Times.

 

ARTICLE IV

THE CLOSING

 

4.01. Closing. The Closing shall take place at the offices of Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, New York, at 10:00 A.M., New York time
on the 5th Business Day following the satisfaction or waiver of the conditions
precedent specified in Article V (other than the conditions to be satisfied on
the Closing Date, but subject to the waiver or satisfaction of such conditions),
or at such other times and places as the parties hereto may

 

18

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

mutually agree; provided, however, that without the agreement of Pfizer and
Purchaser, the Closing shall not occur later than the date specified in Section
10.01(b). The date on which the Closing occurs is called the “Closing Date.” The
Closing shall be deemed to occur and be effective as of the close of business on
the Closing Date.

 

4.02. Pfizer Deliveries. At the Closing, Pfizer shall deliver or cause to be
delivered to Purchaser the instruments and documents set forth in Exhibit A, in
each case in a form reasonably acceptable to Purchaser as well as the Shares and
the Purchased Assets.

 

4.03. Purchaser Deliveries. At the Closing, Purchaser shall deliver to Pfizer,
as agent for the Seller Corporations, the following: (i) the Aggregate Purchase
Price, by wire transfer in immediately available funds to one or more accounts
specified in writing by Pfizer at least 2 Business Days prior to the Closing
Date and (ii) the instruments and documents set forth in Exhibit B, in each case
in a form reasonably acceptable to Pfizer.

 

4.04. Joint Deliveries. At the Closing, Purchaser (or a Conveyed Subsidiary, as
applicable) and Pfizer (or an Affiliate of Pfizer, including, for the avoidance
of doubt, a Stock Selling Corporation, as applicable) shall enter into, execute
and deliver to each other each of the following documents:

 

(i) a Transitional Services Agreement, substantially in the form attached as
Exhibit C (the “Transitional Services Agreement”);

 

(ii) a Transitional Intellectual Property License Agreement, substantially in
the form attached as Exhibit D (the “Transitional Intellectual Property License
Agreement”);

 

(iii) a Site Separation Agreement pertaining to the Healon manufacturing
facility in Sweden, in form and substance mutually agreed upon by Pfizer and
Purchaser and containing the terms set forth on Schedule 4.04(iii) (the “Site
Separation Agreement”);

 

(iv) the Real Property Lease Agreements pertaining to the Healon manufacturing
facility in Sweden providing for the matters set forth on Exhibit E, in form and
substance mutually agreed upon by Pfizer and Purchaser (the “Real Property Lease
Agreements”);

 

(v) a Manufacturing and Supply Agreement pertaining to the manufacture of
Hylartil, in form and substance mutually agreed upon by Pfizer and Purchaser and
including the terms and conditions set forth on Exhibit F (the “Supply
Agreement”);

 

(vi) a Warehousing and Distribution Services Agreement pertaining to the storage
and distribution of Healon products providing for the matters set forth on
Exhibit G, in form and substance mutually agreed upon by Pfizer and Purchaser
(the “Warehousing and Distribution Agreement”); and

 

19

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

(vii) subject to Section 8.03(e), a Foreign Implementing Agreement and a Net
Economic Benefits Letter in each jurisdiction for which one is required.

 

ARTICLE V

CONDITIONS TO CLOSING

 

5.01. Conditions to the Obligations of Purchaser and Pfizer. The respective
obligations of each of the parties to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction of the following
conditions precedent:

 

(a) There shall not (i) be in effect any Governmental Order or Law that makes
illegal or enjoins or prevents in any respect the consummation of the
transactions contemplated by this Agreement in the United States of America, the
United Kingdom, Germany, Italy, Sweden, the Netherlands or Japan or (ii) have
been commenced, and be continuing, or threatened in writing any action or
proceeding by any Governmental Authority of the United States of America, the
United Kingdom, Germany, Italy, Sweden, the Netherlands or Japan.

 

(b) The waiting period required under the HSR Act, including any extensions
thereof, shall have expired and any investigations relating to the sale
hereunder that may have been opened by either the Department of Justice or the
Federal Trade Commission by means of a request for additional information or
otherwise shall have terminated, and all other material consents, approvals and
actions of, filings with and notices to any Governmental Authority of the United
Kingdom, Germany, Italy, Sweden or the Netherlands relating to the transactions
contemplated hereby, shall have been obtained or taken. No consents, approvals,
actions, filings or notices related to any Competition Laws or antitrust
requirements of any jurisdiction, except as set forth in this Section 5.01(b),
shall be a condition to Closing under this Section 5.01(b).

 

(c) Subject to Section 8.03(e), any approvals or actions of any Governmental
Authority having jurisdiction necessary lawfully to consummate the transactions
contemplated hereby shall have been given or taken.

 

5.02. Conditions to the Obligations of Purchaser. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction of the following conditions precedent:

 

(a) Pfizer shall have performed in all material respects its agreements and
obligations contained in this Agreement (disregarding all qualifications and
exceptions contained herein relating to materiality or Material Adverse Effect)
required to be performed by it at or before the Closing, and the representations
and warranties of Pfizer contained herein (disregarding all qualifications and
exceptions contained herein relating to materiality or Material Adverse Effect)
shall have been true and correct when made and shall be true and correct as of
the Closing, as if made as of the Closing (except for (i) changes contemplated
or permitted by this Agreement or disclosed by Pfizer in the Schedules hereto
(as such Schedules may be supplemented or amended as expressly provided in this
Agreement); (ii) failures to perform covenants or breaches of representations
and warranties that would not, individually or in the aggregate, have a Material
Adverse Effect); and (iii) those representations and warranties that address
matters as of a particular date, which, subject to clause (ii) above, need be
true only

 

20

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

as of such date). Purchaser shall have received a certificate of Pfizer, dated
as of the Closing Date and signed by a senior officer of Pfizer (but without
personal liability to such officer), certifying as to the fulfillment of the
foregoing.

 

(b) Pfizer shall have made or caused to be made delivery to Purchaser of the
items required by Section 4.02 and Section 4.04.

 

(c) The Healon Business Drop Down shall have been completed and the business to
be conducted by Healon AB shall be fully operational (having regard to any
services to be provided to Purchaser or its Affiliates pursuant to the Ancillary
Agreements); provided, however, that if the closing of the transactions
contemplated by the Real Property Sale Agreement, dated as of April 19, 2004,
between Fyrcia HB and Healon AB shall not have occurred (including Healon AB
becoming the registered owner of the real property referred to therein), such
failure shall not, in and of itself, constitute a failure to satisfy the
condition set forth in this Section 5.02(c), provided that Purchaser is granted
access to such property at no additional cost from and after the Closing.

 

(d) During the period from the date of this Agreement to (and including) the
Closing Date, there shall not have occurred any event, circumstance, change or
effect that has had or would have, individually or in the aggregate, a Material
Adverse Effect.

 

(e) Pfizer shall have delivered the 2003 Audited Financial Information (as
defined below).

 

5.03. Conditions to the Obligations of Pfizer. The obligation of Pfizer to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction of the following conditions precedent:

 

(a) Purchaser shall have performed its agreements and obligations contained in
this Agreement (disregarding all qualifications and exceptions contained herein
relating to materiality or material adverse effect) required to be performed by
it at or before the Closing, and the representations and warranties of Purchaser
contained herein (disregarding all qualifications and exceptions contained
herein relating to materiality or material adverse effect) shall have been true
and correct in all material respects when made and shall be true and correct in
all material respects as of the Closing, as if made as of the Closing (except
for (i) changes contemplated or permitted by this Agreement or attributable to
matters disclosed by Purchaser in the Schedules hereto; and (ii) those
representations and warranties that address matters as of a particular date,
which need be true in all material respects only as of such date). Pfizer shall
have received a certificate of Purchaser, dated as of the Closing Date and
signed by a senior officer of Purchaser (but without personal liability to such
officer), certifying as to the fulfillment of the foregoing.

 

(b) Purchaser and its Affiliates shall have made or caused to be made delivery
to Pfizer of the items required by Section 4.03 and Section 4.04.

 

21

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

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PFIZER

 

Pfizer represents and warrants to Purchaser as follows (it being understood and
agreed that notwithstanding the provisions of this Article VI, (i) each of the
representations and warranties set forth in this Article VI assume that for
purposes of determining the accuracy of such representations and warranties, the
Healon Business Drop Down has already occurred as of the date hereof and (ii)
with the exception of the representations and warranties set forth in Section
6.18, all representations and warranties pertaining to Healon AB as a Conveyed
Subsidiary shall be deemed to be given only as of the Closing):

 

6.01. Organization. Pfizer is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware. Each Stock Selling
Corporation and Asset Selling Corporation is a corporation duly organized,
validly existing and, where applicable, in good standing under the Laws of the
jurisdiction of its organization.

 

6.02. Authority; Binding Effect.

 

(a) Pfizer has all requisite corporate power and authority to carry on its
business as it is presently being conducted and to execute and deliver this
Agreement and to perform its obligations hereunder. The execution and delivery
by Pfizer of this Agreement, and the performance by Pfizer of its obligations
hereunder, have been duly authorized by all requisite corporate action.

 

(b) Each of the Asset Selling Corporations and the Stock Selling Corporations
has all requisite corporate power and authority to carry on its business as it
is presently being conducted. The performance by each of the Asset Selling
Corporations and the Stock Selling Corporations of their respective obligations
hereunder have been or will have been at the Closing duly authorized by all
requisite corporate action.

 

(c) This Agreement constitutes a valid and binding obligation of Pfizer,
enforceable against Pfizer in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors’ rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or law).

 

6.03. Conveyed Subsidiaries; Capital Structure.

 

(a) Each of the Conveyed Subsidiaries is duly organized and validly existing
and, where applicable, in good standing under the Laws of its jurisdiction of
organization, with corporate power and authority to own and operate its
properties and assets and to carry on its business as currently conducted. Each
of the Conveyed Subsidiaries is duly qualified to do business in each
jurisdiction where the nature of its business or properties makes such
qualification necessary, except in jurisdictions where the failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse
Effect or would not reasonably be expected to, individually or in the aggregate,
result in fines or penalties in excess of $5,000,000. Pfizer has made available
to Purchaser, prior to the execution of this Agreement, a complete and correct
copy of the certificate of incorporation and bylaws, articles of association or
other

 

22

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

organizational documents, as amended to date, of each of the Conveyed Companies.
Such organizational documents are in full force and effect and no Conveyed
Company is in violation of any provision of such organizational documents.

 

(b) Schedule 6.03(b)(i) sets forth the authorized capital stock of the Conveyed
Companies and the number of shares of each class of capital stock in each such
Conveyed Subsidiary which are validly issued and outstanding, fully paid and
non-assessable, and were not issued in violation of statutory or contractual
preemptive or similar rights. There are no outstanding warrants, options,
agreements, subscriptions, convertible or exchangeable securities or other
commitments pursuant to which any of the Conveyed Companies is or may become
obligated to issue, sell, purchase, return or redeem any shares of capital stock
or other securities of the Conveyed Companies and no equity securities of any of
the Conveyed Companies are reserved for issuance for any purpose nor have any
profit sharing certificates or any other rights to share in the profits of the
Conveyed Companies been granted. There are no depositary receipts for any of the
shares of the Conveyed Companies. The Stock Selling Corporations own of record
and beneficially the outstanding Shares as indicated on Schedule 6.03(b)(i),
free and clear of all Liens except for Permitted Encumbrances. Except for their
Subsidiaries, if any, the Conveyed Subsidiaries do not hold any capital stock
(or its equivalent) interest in any other company and none of them is a party to
any partnership agreement, except as set forth in Schedule 6.03(b)(ii).

 

(c) No proposal has been made or resolution adopted for the dissolution or
liquidation of any of the Conveyed Companies, no circumstances exist which may
result in the dissolution or liquidation of any of the Conveyed Companies, and
no proposal has been made or resolution adopted for a statutory merger
(juridische fusie) or division (splitsing), or a similar arrangement under the
laws of any applicable jurisdiction, of any of the Conveyed Companies.

 

6.04. Non-Contravention. The execution, delivery and performance by Pfizer of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not (i) violate any provision of the certificate of incorporation
or bylaws of Pfizer or the comparable organizational documents of any of the
Stock Selling Corporations, Asset Selling Corporations or the Conveyed
Companies; (ii) subject to obtaining the consents referred to on Schedule 6.04,
conflict with, result in the breach of, constitute a default under, or result in
the termination, cancellation or acceleration (whether after the giving of
notice or the lapse of time or both) of any right or obligation of the Seller
Corporations or the Conveyed Companies under, or to a loss of any benefit of the
Business to which the Seller Corporations or the Conveyed Companies is entitled
under, any Material Contract, Real Property Lease or Intellectual Property
License to which any Seller Corporation or Conveyed Company is a party or to
which its assets are subject and which primarily relates to the Business; and
(iii) assuming compliance with the matters set forth in Sections 6.05 and 7.05,
violate or result in a breach of or constitute a default under any Law or other
restriction of any Governmental Authority to which any Seller Corporation or
Conveyed Company is subject; except, in the case of clauses (ii) and (iii), for
any violations, breaches, conflicts, defaults, terminations, cancellations or
accelerations as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

6.05. Governmental Authorization. Except as set forth on Schedule 6.05, which
Schedule Pfizer will deliver to Purchaser within 20 days after the date of this
Agreement, the

 

23

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

execution and delivery of this Agreement by Pfizer do not require any consent or
approval of any Governmental Authority, except for consents or approvals, the
failure of which to obtain would not have a Material Adverse Effect.

 

6.06. Financial Information. Schedule 6.06(a) sets forth: (i) audited combined
statements of the net assets to be sold in relation to the Business, and the
related audited combined statements of direct revenues and direct operating
expenses in relation to the Business, for the years ended December 31, 2001 and
December 31, 2002, together with the notes thereto and the audit report thereon
of KPMG LLP (collectively, the “Audited Financial Information”); (ii) an
unaudited statement of the net assets to be sold in relation to the Business,
and the related unaudited statement of direct revenues and direct operating
expenses in relation to the Business, for the 12 months ended December 31, 2003
for the U.S. operations and the 11 months ended November 30, 2003 for the
international operations (collectively, the “2003 Unaudited Financial
Information”); and (iii) the unaudited pro forma combined statement of the
assets and liabilities of Healon AB as of November 30, 2003, reflecting the
historical combined balance sheet of Healon AB, adjusted to give effect to the
Healon Business Drop Down as if it had been completed on November 30, 2003 (the
“Healon Pro Forma Statement”). The Audited Financial Information, 2003 Unaudited
Financial Information, the Healon Pro Forma Statement, the 2003 Audited
Financial Information, and the financial information to be delivered by Pfizer
pursuant to Section 8.17 hereof are collectively referred to herein as the
“Financial Information”. Except as set forth in the notes thereto or as set
forth on Schedule 6.06(b), the Financial Information has been or will be (i)
derived from and in accordance with Pfizer’s books and records, (ii) prepared in
accordance with GAAP, and (iii) present fairly in all material respects: (x) the
net assets to be sold in relation to the Business as of the dates specified
therein; and (y) the direct revenues and direct operating expenses in relation
to the Business for the periods specified therein (subject, in the case of the
unaudited Financial Information, to the absence of year-end adjustments and the
absence of footnotes, if applicable). Pfizer has provided Purchaser with a true
and correct copy of the independent auditors’ report relating to the Audited
Financial Statements. Pfizer represents that its application of accounting
principles and practices generally accepted in the United States of America is
in accordance with such principles.

 

6.07. Absence of Material Changes. Since December 31, 2003, except as set forth
on Schedule 6.07, there has not been any:

 

(i) Material Adverse Effect;

 

(ii) sale, lease, license, abandonment or other disposition by any of the Seller
Corporations or the Conveyed Companies of any material assets used in the
Business, except (x) in the ordinary course of the Business; (y) to another
Conveyed Company; or (z) relating to the transactions contemplated hereby;

 

(iii) increase or enhancement of the compensation or benefits of Employees other
than, in each case, in the ordinary course of the Business and consistent with
past practice;

 

(iv) incurrence of any Indebtedness by the Conveyed Companies;

 

24

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

(v) material transaction relating to the Business with the Seller Corporations
or the Conveyed Companies, on the one hand, and any officer or director of the
Seller Corporations or the Conveyed Companies, on the other hand, other than on
an arms-length basis;

 

(vi) cancellation or waiver of any claim or right of substantial value to the
Business;

 

(vii) with respect to Pharmacia Groningen B.V., taking of any material Tax
position that is inconsistent with past practice or the making or changing of
any material Tax election that, in each case, (A) is not required by Law or any
taxing authority and (B) is not expressly contemplated by this Agreement;

 

(viii) agreement or arrangement to take any of the actions specified in this
Section 6.07, except as expressly contemplated by this Agreement; or

 

(ix) lapse or abandonment of material Intellectual Property relating to the
Business.

 

6.08. No Litigation. Except with respect to Environmental Laws (which are the
subject of Section 6.11) or as set forth on Schedule 6.08, as of the date
hereof, no litigation, investigation or proceeding by or before any Governmental
Authority is pending against or, to the Knowledge of Pfizer, threatened against
any Seller Corporation or Conveyed Company which would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

6.09. Compliance with Laws. Except with respect to Environmental Laws (which are
the subject of Section 6.11) and Product Registrations (which are the subject of
Section 6.10), or except as to matters otherwise set forth in this Agreement or
set forth on Schedule 6.09:

 

(a) each Asset Selling Corporation and each Conveyed Company is in compliance
with all Laws applicable to the ownership or operation of the Business, except
to the extent that the failure to comply therewith would not have, individually
or in the aggregate, a Material Adverse Effect; and

 

(b) each Seller Corporation and each Conveyed Company possesses, and is in
compliance with the terms of, all Governmental Authorizations necessary for the
conduct of the Business as it is currently conducted, except where the failure
to possess any such Governmental Authorization or to be in compliance therewith,
would not have, individually or in the aggregate, a Material Adverse Effect.

 

6.10. Product Registrations; Regulatory Compliance. Except with respect to
Environmental Permits (which are the subject of Section 6.11):

 

(a) Pfizer or its Affiliates hold all material Governmental Authorizations to
market any product of the Business in the countries in which products of the
Businesses are sold (the “Product Registrations”);

 

25

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

(b) Pfizer will deliver to Purchaser, within 20 days after the date of this
Agreement, a Schedule of the Product Registrations referred to in Section
6.10(a);

 

(c) except as set forth on Schedule 6.10(c), to the Knowledge of Pfizer, all
products sold under the Product Registrations are manufactured and marketed in
all material respects in accordance with the specifications and standards
contained in such Product Registrations;

 

(d) except as set forth on Schedule 6.10(c), an Asset Selling Corporation or
Conveyed Company is the sole and exclusive owner of the Product Registrations
and has not granted any right of reference with respect thereto; and

 

(e) Except as set forth on Schedule 6.10(c), all Product Registrations are in
full force and effect, and Pfizer and its Affiliates have not, to the Knowledge
of Pfizer, received any notification with respect to the cancellation,
termination or non-renewal of any Product Registrations.

 

6.11. Environmental Matters. To the Knowledge of Pfizer, except as set forth on
Schedule 6.11:

 

(a) (i) the Conveyed Companies, Purchased Assets and Facilities are in
substantial compliance with all applicable Environmental Laws and/or
Environmental Permits, in each case, in effect as of the Closing Date; and (ii)
none of the Facilities are undertaking, nor has Pfizer or the related Conveyed
Company or Asset Selling Corporation received written notice that they are
subject to, Remedial Action or enforcement action under any applicable
Environmental Laws and/or Environmental Permits, in each case, in effect as of
the Closing Date, except for such non-compliance, Remedial Actions or
enforcement actions that individually or in the aggregate, would not result in
Environmental Liabilities in excess of $3,000,000;

 

(b) all Environmental Permits required under all applicable Environmental Laws,
in effect as of the Closing Date, in relation to the Facilities have been
obtained and none of the Conveyed Companies nor the Asset Selling Corporation
nor Pfizer has received any written notice that any of the Facilities’
Environmental Permits will be revoked, suspended or not renewed, except for such
failures to obtain as would not, individually or in the aggregate, result in
Environmental Liabilities in excess of $3,000,000;

 

(c) no written claims have been made, and no written notices nor written
communications have been received that such claims will or may be made, that
could reasonably be expected to result, as of the Closing Date, in Environmental
Liability arising from or as a result of (i) on-site exposures to Hazardous
Materials at the Facilities; (ii) Releases of Hazardous Materials at or from any
Facilities or by any Conveyed Company; or (iii) off-site treatment, storage or
disposal of Hazardous Materials transported from the Facilities, except for such
claims that individually or in the aggregate, would not result in Environmental
Liabilities in excess of $3,000,000;

 

26

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

(d) there has been no Release of Hazardous Materials at or from any of the
Facilities that individually or in the aggregate, would result in Environmental
Liabilities in excess of $3,000,000; and

 

(e) copies of all material environmental audits and site assessments, reviews
and reports, written claims and environmental test results from the last three
(3) years that are in the possession or control of Pfizer or any Pfizer
Affiliates relating to the Conveyed Companies or the Facilities have been
provided to the Purchaser.

 

(f) The parties hereby acknowledge that any emissions reduction measure(s), if
any, required to be implemented at the Groningen Facility by the competent
Governmental Authority pursuant to its review of the Groningen VOC Emissions
Study and any determinations by the competent Governmental Authority as a result
of its review of the Groningen VOC Emissions Study that the Groningen Facility
is not in compliance with all applicable Environmental Laws and/or Environmental
Permits as a result of VOC emissions shall not constitute a breach of the
representations and warranties set forth in this Section 6.11 (such matter being
treated as referenced in Section 9.12(c)).

 

6.12. Material Contracts.

 

(a) Except for agreements entered into after the date hereof or as set forth on
Schedule 6.12(a) (the “Material Contracts”), none of the Conveyed Companies, nor
any Asset Selling Corporation is a party to or bound by:

 

(i) any Contract for the purchase of Inventories or other personal property for
the Business with any supplier or for the furnishing of services to the Business
providing for annual financial commitments on the part of such Conveyed Company
or Asset Selling Corporation in excess of (A) $50,000 and extending beyond one
year from the date hereof or (B) $100,000;

 

(ii) any Contract for the sale of Inventories or other personal property of the
Business to any distributor or supplier or for the furnishing of services by the
Business, in each case with firm commitments in excess of one year from the date
hereof;

 

(iii) any broker, distributor, dealer, manufacturer’s representative, franchise
or agency agreements related solely and exclusively to the Business, the terms
of which provide for annual financial commitments on the part of such Conveyed
Company or Asset Selling Corporation in excess of $50,000;

 

(iv) any Contract relating to Indebtedness, factoring arrangements, sale and
leaseback transactions or the deferred purchase price of property, in each case
relating to the Business and with respect to which a Conveyed Company or Asset
Selling Corporation is an obligor in excess of $50,000;

 

(v) any research and development or design agreement relating to the Business,
the terms of which provide for aggregate commitments to be paid by a Conveyed
Company or Asset Selling Corporation in excess of $50,000;

 

27

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

(vi) other than intercompany agreements that are not being assigned to or
assumed by Purchaser, any agreements entered into since January 1, 2001
providing for the acquisition or disposition of any capital stock of any
Conveyed Company, the Purchased Assets or assets of a Conveyed Company and
having an aggregate value in excess of $2,000,000, other than the sale of
Inventories in the ordinary course of the Business consistent with past practice
or the sale or disposal of obsolete plant or equipment;

 

(vii) any Contract relating to the Business that provides for any exclusive
arrangement relating to the sale of any product manufactured, distributed and
sold by the Business involving sales in 2003 in excess of $100,000; and

 

(viii) any Contract that limits or purports to limit the ability of any Conveyed
Company or Asset Selling Corporation to compete with the Business in any
geographic area or during any period of time.

 

(b) Except as set forth on Schedule 6.12(b), (i) each Material Contract is valid
and binding on the Asset Selling Corporation or Conveyed Company that is a party
thereto, and, to the Knowledge of Pfizer, the other party thereto, and is in
full force and effect; and (ii) no Asset Selling Corporation or Conveyed Company
is in breach of, or default under, any such Material Contract, which breach or
default would result in a Material Adverse Effect.

 

6.13. Intellectual Property.

 

(a) Schedule 6.13(a)(i) sets forth a list of all (i) registered Intellectual
Property and (ii) all other material Intellectual Property, in each case owned,
used or licensed by or to any Conveyed Company or Asset Selling Corporation and
primarily relating to the Business. Except as set forth on Schedule 6.13(a)(ii),
(i) to the Knowledge of Pfizer, there is no objection or claim being asserted by
any Person with respect to the ownership, validity or enforceability of any such
Intellectual Property; (ii) a Conveyed Company or an Asset Selling Corporation
owns or has a license to use such Intellectual Property; and (iii) such
Intellectual Property is, to the Knowledge of Pfizer, free and clear of any
Liens, other than Permitted Encumbrances.

 

(b) Schedule 6.13(b) sets forth a list of all Intellectual Property Licenses.

 

(c) Except as set forth in Schedule 6.08, to the Knowledge of Pfizer: (i) no
third party is infringing or making unauthorized use of any of the Intellectual
Property; (ii) the activities of the Business do not infringe or make
unauthorized use of any valid and enforceable Intellectual Property of any third
party; and (iii) no third party is now claiming that the activities of the
Business infringe or make unauthorized use of any valid and enforceable
Intellectual Property of such third party.

 

(d) To the Knowledge of Pfizer, the Intellectual Property primarily relating to
the Business: (i) has been duly maintained, (ii) is subsisting, in full force
and effect, (iii) has not been cancelled, expired or abandoned unless in the
ordinary course, and (iv) is valid and enforceable.

 

28

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

6.14. Real Property.

 

(a) Schedule 6.14(a)(i) sets forth a true and complete list of all of the real
property (i) in which any Asset Selling Corporation or Conveyed Company holds
legal or equitable title or (ii) which is leased by any Asset Selling
Corporation or Conveyed Company and in each case is used primarily in connection
with the Business (collectively, the “Real Property”). Except as set forth on
Schedule 6.14(a)(ii), each Seller Corporation or Conveyed Company has good title
to, or a valid leasehold interest entitling them to the sole and unencumbered
right to possession and use of, all of their respective Real Property free and
clear of any Liens, other than Permitted Encumbrances.

 

(b) Schedule 2.02(a) and Schedule 6.14(b) sets forth a list of all of the Real
Property Leases and all leasehold interests in real property of the Conveyed
Companies, respectively. Each Real Property Lease is a valid and binding
obligation of the relevant Asset Selling Corporation or Conveyed Company and, to
the Knowledge of Pfizer, the other party thereto, and no Seller Corporation or
Conveyed Company has received or given written notice of a default under any
Real Property Lease, and no event or condition exists which constitutes a
violation or breach of, or constitutes (with or without due notice or lapse of
time or both) a default by any Seller Corporation or Conveyed Company, or, to
the Knowledge of Pfizer, any other party thereto, under any such lease, except
for such breaches, violations and defaults which would not be reasonably likely
to result in damages in excess of $5,000,000 in the aggregate.

 

(c) Each Seller Corporation or Conveyed Company has rights of access to entry to
the Real Property adequate to conduct the Business in the manner conducted on
the date hereof. To the Knowledge of Pfizer, there are no unrecorded easements
relating to the Real Property and no Person or Governmental Authority is
encroaching upon any of the Real Property in a way that materially impairs the
use of such property. Except as set forth in Schedule 6.14(c), (i) to the
Knowledge of Pfizer, no Person or Governmental Authority has notified any of the
Seller Corporations or Conveyed Companies of a claim that any activities of the
Business are encroaching upon the properties, easements or rights of way of
others, and (ii) there are no parties in possession having or, to the Knowledge
of Pfizer, claiming rights to possession of any of the Real Property.

 

6.15. Title to Assets. Except as set forth on Schedule 6.15 or as otherwise
provided in this Agreement, each Asset Selling Corporation owns, leases or has
the legal right to use all of its Purchased Assets (other than Intellectual
Property and Real Property, which are the subject of Sections 6.13 and 6.14,
respectively), and each Conveyed Company owns, leases or has the legal right to
use its assets (other than Intellectual Property and Real Property, which are
the subject of Sections 6.13 and 6.14, respectively). Except as set forth on
Schedule 6.15, each Asset Selling Corporation has good title to (or in the case
of leased Purchased Assets, valid leasehold interests in) all its Purchased
Assets (other than Intellectual Property and Real Property, which are the
subject of Sections 6.13 and 6.14, respectively) and each Conveyed Company has
good title to (or in the case of leased assets, a valid leasehold interest in)
its assets, in either case except for Permitted Encumbrances.

 

29

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

6.16. Taxes. To the Knowledge of Pfizer:

 

(a) Except as set forth on Schedule 6.16(a), (i) all material Tax Returns and
Consolidated Tax Returns that are required to be filed on or before the date
hereof by or on behalf of each Conveyed Company or of the fiscal unity to which
Pharmacia Groningen B.V. belonged during any Pre-Closing Period and (to the
extent related to a Conveyed Company or the Business) each Asset Selling
Corporation have been filed; (ii) all material Taxes shown to be due and payable
on such Tax Returns (insofar as they relate to a Conveyed Company or the
Business) have been paid; and (iii) all material Non-Returned Taxes (as defined
below) due by or respect to the income, assets or operations of the Conveyed
Companies for all taxable periods ending on or before the Closing Date have been
paid or accrued and reserved against in the Financial Statements. “Non-Returned
Taxes” means Taxes with respect to which no Tax Return was required to be filed
on or prior to the Closing Date by or on behalf of a Conveyed Company.

 

(b) Except as set forth on Schedule 6.16(b), there are no material Liens for
Taxes upon any of the assets of the Business, except for Liens for Taxes not yet
due and payable or being contested in good faith.

 

(c) Except as set forth on Schedule 6.16(c), no Tax Return that includes any
Conveyed Company is currently being examined by any taxing authority, which
examination, taken together with all other examinations, could reasonably be
expected to result in a liability for a material amount of Taxes, and there are
no outstanding written agreements or waivers extending the statute of
limitations applicable to any such Tax Return or in the case of any Asset
Selling Corporation, to the extent related to the Business, which agreements or
waivers, taken together with all other agreements or waivers, could reasonably
be expected to result in a liability for a material amount of Taxes.

 

(d) Pharmacia International B.V. has owned directly or indirectly all shares in
Pharmacia Groningen B.V. since September 14, 1999.

 

6.17. Employee Benefits.

 

(a) Schedule 6.17 sets forth a list of each Plan in effect as of the date of
this Agreement.

 

(b) As applicable with respect to each Plan, Pfizer has made or will make
available to Purchaser, copies of (i) each Plan, including all amendments
thereto; (ii) the current summary plan description and each summary of material
modifications, if any, thereto; and (iii) the most recent IRS determination
letter relating thereto.

 

(c) Each Plan has been maintained, operated and administered in compliance in
all respects with its terms and the applicable provisions of ERISA and the Code,
except where such noncompliance would not have a Material Adverse Effect.
Neither Pfizer nor any ERISA Affiliate has incurred or could reasonably be
expected to incur any Liability under Title IV of ERISA.

 

30

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

(d) Each Foreign Plan has been maintained, operated and administered in
compliance in all respects with its terms and the applicable Laws of the
relevant jurisdiction, except where such noncompliance would not have a Material
Adverse Effect.

 

(e) No Employee is party to any non-competition agreement that would prevent
such Employee from performing services for the Purchaser or its Affiliates
following the Closing Date, as contemplated by this Agreement.

 

(f) Pfizer has provided to Purchaser copies of all Plans, programs, policies and
arrangements whereby any Employee could be entitled to severance or change in
control benefits in connection with the consummation of the transactions
contemplated by this Agreement.

 

(g) Schedule 6.17(g)(i) sets forth the name or employee number, position, date
of hire and location of employment (city and state) of each Employee (US) as of
the date hereof. Schedule 6.17(g)(ii) sets forth the name or employee number,
position, date of hire and location of employment (city and country) of each
Employee (non-US) as of the date here. Pfizer has made available to Purchaser
all information regarding the pay (as defined in Section 8.05(a)(v)), full or
part time status, current status (active, on leave, on vacation, etc.) and
employment contract information with respect to each Employee set forth in
Schedule 6.17(g)(i) or Schedule 6.17(g)(ii).

 

(h) Schedule 6.17(h) sets forth the pension arrangements of the Conveyed
Companies which apply to all current or former employees and none of the
Conveyed Companies is a party to any pension arrangements, including pension
insurance policies or excess (excedent) insurance policies with any workers’
pension fund (bedriffspensioenfonds) or private insurance company, retirement,
deferred compensation or arrangements maintained for the benefit of any of their
employees or any payment of “back service” contributions now or upon the
retirement, death or disability of any of their employees or former employees,
other than the pension arrangements of the Conveyed Companies, set forth in
Schedule 6.17(h). All contributions that any of the Conveyed Companies are
required to make under the arrangements listed in Schedule 6.17(h) have been
fully paid or provided for in the Audited Financial Information. There are no
material funding deficits or unfunded liabilities in respect of any of the
arrangements of the Conveyed Companies listed in Schedule 6.17(h).

 

6.18. Healon AB. During the period from the date of this Agreement to the
consummation of the Healon Business Drop Down, Healon AB has not carried on any
business or conducted any operations, other than acquiring the assets and the
assuming the Liabilities contemplated by the Healon Business Drop Down.

 

6.19. Sufficiency of Assets. The Purchased Assets (without giving effect to the
Excluded Assets and the Retained Liabilities) and the assets which are owned,
leased or licensed (including the Intellectual Property Licenses) by the
Conveyed Companies at the Closing Date, together with the services to be
provided and the rights to be conveyed, transferred and assigned to the
Purchaser under Section 2.02 hereof and under all of the Ancillary Documents,
which provide for Pfizer or any of its Affiliates to provide services to
Purchaser (subject to the limitations set forth therein), all taken as a whole,
constitute all of the properties, assets and

 

31

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

rights used by the Seller Corporations and the Conveyed Companies to conduct the
Business or necessary to permit Purchaser to operate the Business in all
material respects in the same manner as such Business has been conducted prior
to the date of this Agreement by the Seller Corporations and the Conveyed
Companies.

 

6.20. Labor and Employment Matters.

 

Except as set forth in Schedule 6.20 and relating solely to the Employees:

 

(a) There is no strike or other material labor dispute pending against any of
the Seller Corporations or any of the Conveyed Companies;

 

(b) Neither any of the Seller Corporations nor any of the Conveyed Companies has
any labor unions;

 

(c) Neither any of the Seller Corporations nor any of the Conveyed Companies is
bound by or subject to (and none of their respective properties or assets is
bound by or subject to) any collective bargaining agreement or similar agreement
with any labor unions or other organizations;

 

(d) To the Knowledge of Pfizer, no labor union or other organization has
requested or, has sought to represent any of the employees, representatives or
agents of any of the Seller Corporations or any of the Conveyed Companies;

 

(e) To the Knowledge of Pfizer, there is no labor union organizing activity
involving Employees; and

 

(f) To the Knowledge of Pfizer, each of the Seller Corporations and the Conveyed
Companies is not engaged in any unfair labor practices, as defined in the
National Labor Relations Act or any other applicable Laws; and

 

(g) To the Knowledge of Pfizer: (i) there are no arbitrations, lawsuits or other
actions or proceedings relating to any of the Seller Corporations or any of the
Conveyed Companies pending or threatened (in any court or arbitral forum or with
any agency responsible for the enforcement of any Laws) alleging or otherwise
regarding breach of any express or implied contract of employment, any law or
regulation governing employment or the termination thereof or other illegal,
discriminatory, wrongful or tortious conduct in connection with the employment
relationship, the terms and conditions of employment, or applications for
employment with any of the Seller Corporations or any of the Conveyed Companies;
and (ii) no Governmental Authority responsible for the enforcement of any
immigration, worker health and safety, labor or employment Laws of any sort
intends to conduct or is conducting an investigation with respect to or relating
to any of the Seller Corporations or any of the Conveyed Companies.

 

6.21. Certain Supply Relationships. Except as set forth on Schedule 6.21, the
Seller Corporations and the Conveyed Companies have delivered to, or made
available for review by, Purchaser a true and correct copy of all agreements or
arrangements, including all amendments thereto, entered into by any of the
Seller Corporations or Conveyed Companies

 

32

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

relating to the recruitment base for roosters or breeding or slaughtering of
roosters or otherwise related to the rooster comb business, including supply
agreements and non-cooperation agreements (collectively, the “Rooster Comb
Agreements”). No party to any Rooster Comb Agreement is, to the Knowledge of
Pfizer, in material breach thereof or default thereunder and no such party (i)
has canceled or otherwise modified (in a manner materially adverse to the
Business) its relationships, including its performance under any Rooster Comb
Agreement, with the Seller Corporations or Conveyed Companies or (ii) to the
Knowledge of Pfizer, has notified the Seller Corporations or Conveyed Companies
of such party’s intention to do so; it being understood that the cancellation of
any Rooster Comb Agreement without replacement with an agreement of
substantially comparable terms shall be deemed to have a Material Adverse
Effect.

 

6.22. Certain Business Practices. None of the Seller Corporations or Conveyed
Companies, or any director, officer, agent or employee thereof has, in
connection with the conduct of the Business, (a) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (b) made any unlawful payment to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or (c) made any other unlawful payment.

 

6.23. Solvency. Each of the Seller Corporations and Conveyed Companies is not,
and will not be, insolvent or be rendered insolvent by the transactions
contemplated hereby or unable to meet its liabilities as they mature, and will
not have unreasonably small capital. With respect to the Conveyed Companies,
neither Pfizer nor any of its Affiliates have adopted a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, bankruptcy, suspension of payments (surseance van betaling) or
other reorganization under local law.

 

6.24. Brokers. Except for Morgan Stanley & Co. Incorporated, no broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Pfizer. Pfizer is solely
responsible for the fees and expenses of Morgan Stanley & Co. Incorporated.

 

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Pfizer as follows:

 

7.01. Organization and Qualification. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware
and has all requisite corporate power and authority to carry on its business as
it is presently being conducted and to own and lease its properties and assets.

 

7.02. Corporate Authorization. Purchaser has all requisite corporate power and
authority to execute and deliver this Agreement, and to perform its obligations
hereunder. The execution, delivery and performance by Purchaser of this
Agreement have been duly authorized by all requisite corporate action on the
part of Purchaser.

 

33

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

7.03. Binding Effect. This Agreement constitutes a valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws affecting creditors’ rights
generally or by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or law).

 

7.04. Non-Contravention. The execution, delivery and performance by Purchaser of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not (i) violate any provision of the certificate of incorporation,
bylaws or other organizational documents of Purchaser; (ii) conflict with,
result in the breach of, constitute a default under, or result in a right of
termination, cancellation or acceleration (whether after the giving of notice or
the lapse of time or both) under, any term or provision of any Contract or other
obligation to which Purchaser or any of its Affiliates is a party or is subject;
and (iii) assuming compliance with the matters set forth in Sections 6.05 and
7.05, violate or result in a breach of or constitute a default under any Law or
other restriction of any Governmental Authority to which Purchaser is subject,
other than, in the case of clauses (ii) and (iii) above, any such violations,
conflicts, terminations, cancellations, accelerations, breaches and defaults
that, individually or in the aggregate, would not have a material adverse effect
on the ability of Purchaser to perform its obligations under this Agreement or
on the ability of Purchaser to timely consummate the transactions contemplated
hereby.

 

7.05. Governmental Authorization. Except as set forth on Schedule 7.05, which
Schedule Purchaser will deliver to Pfizer within 20 days after the date of this
Agreement, the execution and delivery of this Agreement by Purchaser do not and
will not require any material consent or approval of any Governmental Authority,
except for consents or approvals, the failure of which to obtain would not,
individually or in the aggregate, have a material adverse effect on the ability
of Purchaser to perform its obligations under this Agreement or on the ability
of Purchaser to timely consummate the transactions contemplated hereby.

 

7.06. Third Party Approvals. Except as set forth in Schedule 7.06, the
execution, delivery and performance by Purchaser of this Agreement and the
transactions contemplated hereby do not require any consents, waivers,
authorizations or approvals of, or filings with, any third Persons which have
not been obtained by Purchaser.

 

7.07. Financial Capability. Purchaser will have available to it on the Closing
Date sufficient funds to enable it to consummate the transactions contemplated
by this Agreement.

 

7.08. Securities Act. Purchaser is acquiring the Shares solely for the purpose
of investment and not with a view to, or for sale in connection with, any
distribution thereof in violation of the Securities Act. Purchaser acknowledges
that the Shares are not registered under the Securities Act, any applicable
state securities Law or any applicable foreign securities Law, and that such
Shares may not be transferred or sold except pursuant to the registration
provisions of the Securities Act or applicable foreign securities Laws or
pursuant to an applicable exemption therefrom and pursuant to state securities
Laws as applicable. Purchaser (either alone or together with its advisors) has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of its investment in the Shares
and is capable of bearing the economic risks of such investment.

 

34

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

7.09. Condition of the Business.

 

(a) Purchaser is purchasing the Shares and the Purchased Assets based solely on
the results of its inspections and investigations and the representations or
warranties of Pfizer expressly set forth in this Agreement. In light of these
inspections and investigations and the representations and warranties made to
Purchaser by Pfizer in Article VI hereof, Purchaser is relinquishing any right
to any claim based on any representations and warranties other than those
specifically set forth in Article VI hereof. Any claims Purchaser may have for
breach of representation or warranty shall be based solely on the
representations and warranties of Pfizer set forth in Article VI hereof.

 

(b) ALL WARRANTIES OF HABITABILITY, MERCHANTABILITY AND FITNESS FOR ANY
PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARISING UNDER THE UNIFORM
COMMERCIAL CODE (OR SIMILAR FOREIGN LAWS), ARE HEREBY WAIVED BY PURCHASER. IN
ADDITION, PURCHASER ACKNOWLEDGES AND AGREES THAT NO SELLER CORPORATION INTENDS
TO GIVE ANY “GUARANTEE” NOR IS ANY “GUARANTEE” BEING GIVEN BY ANY SELLER
CORPORATION UNDER OR PURSUANT TO THIS AGREEMENT OR OTHERWISE IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED HEREBY WITHIN THE MEANING OF SECTIONS 443 AND 444
OF THE GERMAN CIVIL CODE.

 

(c) Purchaser further represents that neither Pfizer nor any other Person has
made any representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding any of the Seller Corporations, the
Business, the Conveyed Subsidiaries, the Shares, the Purchased Assets or the
Assumed Liabilities not expressly set forth in this Agreement, and neither
Pfizer nor any other Person will have or be subject to any liability to
Purchaser or any other Person resulting from the distribution to Purchaser, its
representatives or agents, or Purchaser’s use of, any such information,
including any confidential memoranda distributed on behalf of Pfizer relating to
the Business or other publication provided to Purchaser, its representatives or
agents, or any other document or information provided to Purchaser, its
representatives or agents in connection with the sale of the Business.

 

7.10. No Litigation. There is no Governmental Order, action, suit, litigation,
proceeding, labor dispute (other than routine grievance procedures or routine,
uncontested claims for benefits under any benefit plans for any officers,
employees or agents of Purchaser), arbitration, investigation or reported claim,
pending against or, to the knowledge of Purchaser, threatened against Purchaser
or any of its Affiliates, before any court, Governmental Authority or
arbitrator, which seeks to delay or prevent the consummation of the transactions
contemplated by this Agreement or would, if successful, materially and adversely
affect the ability of Purchaser to timely consummate the transactions
contemplated by this Agreement.

 

7.11. Brokers. Except for Lehman Brothers Inc., no broker, finder or investment
banker is entitled to any brokerage, finder’s or other fee or commission in
connection

 

35

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

with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser. Purchaser is solely responsible for the fees
and expenses of Lehman Brothers Inc..

 

ARTICLE VIII

COVENANTS

 

8.01. Information and Documents.

 

(a) During the period from the date of this Agreement to the Closing Date, upon
reasonable advance notice, the Seller Corporations shall permit Purchaser and
its representatives to have reasonable access, during regular normal business
hours, to the assets, employees, books and records of the Seller Corporations
and the Conveyed Companies relating to the Business, and shall furnish, or cause
to be furnished, to Purchaser, such financial, tax and operating data and other
available information with respect to the Business as Purchaser shall from time
to time reasonably request; provided, however, that no such access shall
unreasonably interfere with the Seller Corporations’ and the Conveyed Companies’
operation of their respective businesses, including the Business; provided,
further, that the Seller Corporations shall not be required to take any action
which could constitute a waiver of attorney-client privilege.

 

(b) All information received by Purchaser and given by or on behalf of the
Seller Corporations or the Conveyed Companies in connection with this Agreement
and the transactions contemplated hereby will be held by Purchaser and its
Affiliates, agents and representatives as “Evaluation Material”, as defined in,
and pursuant to the terms of, the Confidentiality Agreement.

 

8.02. Conduct of Business. During the period from the date of this Agreement to
the Closing Date, except (i) as set forth on Schedule 8.02 or as otherwise
contemplated by this Agreement or (ii) as Purchaser shall otherwise consent in
advance in writing, Pfizer agrees that it will conduct the Business, and will
cause the Business to be conducted, in the ordinary course consistent with past
practice, and use commercially reasonable efforts to preserve intact the
Business and related relationships with customers, suppliers and other third
parties and to keep available the services of the present Employees (subject to
the subsections of this Section 8.02). During the period from the date of this
Agreement to the Closing Date, except (i) as set forth on Schedule 8.02 or as
otherwise contemplated by this Agreement, (ii) as Purchaser shall otherwise
consent in advance in writing, and (iii) as may be necessary or advisable to
remove the Excluded Assets, Pfizer covenants and agrees that it shall cause the
Seller Corporations and the Conveyed Companies, in each case with respect to the
Business, to:

 

(a) maintain insurance coverage at levels consistent with presently existing
levels so long as such insurance is available at commercially reasonable rates;

 

(b) not incur, create or assume any Lien, other than Permitted Encumbrances,
with respect to any material asset;

 

36

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

(c) not acquire or dispose of, in any manner including any business combination,
any assets outside of the ordinary course of the Business consistent with past
practice;

 

(d) not amend or terminate any Material Contract or waive, release or assign any
material right or claim under, any Material Contract;

 

(e) not change or amend the charter, bylaws or similar organizational documents
of any Conveyed Company;

 

(f) not issue, sell, pledge, transfer, repurchase or redeem any shares of
capital stock of any Conveyed Company, or securities convertible into or
exchangeable or exercisable for, or options with respect to, or warrants to
purchase or rights to subscribe for, shares of capital stock of any Conveyed
Company;

 

(g) not, in respect of any Conveyed Company but not with respect of any Excluded
Asset or Retained Liability, declare, set aside or pay any dividend or other
distribution payable in stock or property with respect to its capital stock or
(ii) redeem, purchase or otherwise acquire directly or indirectly any of its
shares of capital stock;

 

(h) not, in respect of any Conveyed Company, adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, bankruptcy, suspension of payments (surseance van betaling) or
other reorganization under local law;

 

(i) other than for transfers of Cash Equivalents, obsolete equipment and
Inventory in the ordinary course of business consistent with past practice, not
transfer any assets to any Affiliate or any other Person, other than to any
Seller Corporation or Conveyed Company;

 

(j) not enter into or modify any employment, severance, change in control,
termination or similar agreements or arrangements with, or grant any bonuses,
salary increases, severance or termination pay to, or otherwise increase the
compensation or benefits of, any officer, director, consultant or employee of
any of the Seller Corporations or any of the Conveyed Companies, other than, in
each case, in the ordinary course of business (as modified by Section 8.02(m))
and consistent with past practice or as may be required by a binding written
contract in effect on the date of this Agreement or by any applicable Laws;

 

(k) with respect to Pharmacia Groningen B.V., not take any material Tax position
that is inconsistent with past practice or make or change any material Tax
election that, in each case, (A) is not required by Law or any taxing authority,
(B) is not expressly contemplated by this Agreement and (C) is the sole and
direct cause of a increase in income or a decrease in deductions or other
allowance or credits with respect to Pharmacia Groningen B.V.;

 

(l) not to take any action that would cause a breach of Section 6.07;

 

(m) not (A) create any new employment positions without obtaining the prior
consent of Purchaser, which consent shall not be unreasonably withheld; or (B)
hire any individuals for sales or marketing positions, unless Pfizer determines,
in good faith, that such hires are essential to the continuation of the business
in the ordinary course of business; or

 

37

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

(n) not change any of the accounting methods used by it, unless required by
GAAP; or

 

(o) not agree to take any of the foregoing actions.

 

8.03. Reasonable Best Efforts; Certain Governmental Matters.

 

(a) Upon the terms and subject to the conditions herein provided (including
Section 2.03), each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary for it to do under applicable Laws to consummate and
make effective the transactions contemplated by this Agreement, including (i) to
comply promptly with all legal requirements which may be imposed on it with
respect to this Agreement and the transactions contemplated hereby (which
actions shall include furnishing all information required by applicable Law in
connection with approvals of or filings with any Governmental Authority); (ii)
to satisfy the conditions precedent to the obligations of such party hereto;
(iii) to obtain any consent, authorization, order or approval of, or any
exemption by, any Governmental Authority or other public or private third party
required to be obtained by Purchaser, the Seller Corporations or the Conveyed
Companies in connection with the acquisition of the Shares and the Purchased
Assets or the taking of any action contemplated by this Agreement; (iv) to
effect all registrations, filings and transfers of Environmental Permits
necessary for the operation of the Business and required under Environmental
Laws; (v) to take any action reasonably necessary to vigorously defend, lift,
mitigate, or rescind the effect of any litigation or administrative proceeding
adversely affecting the acquisition of the Shares, the Purchased Assets or the
other transactions contemplated by this Agreement, including promptly appealing
any adverse court or administrative decision and (vi) to enter into extensions
to the agreements listed on Schedule 8.03(a), on terms reasonably acceptable to
Pfizer and Purchaser.

 

(b) Subject to appropriate confidentiality protections and to the extent not
prohibited by applicable Law, each of the parties hereto will furnish to the
other party such necessary information and reasonable assistance as such other
party may reasonably request in connection with the foregoing and will provide
the other party with copies of all filings made by such party with any
Governmental Authority and, upon request, any other information supplied by such
party to a Governmental Authority in connection with this Agreement and the
transactions contemplated hereby.

 

(c) Without limiting the generality of the undertakings set forth in this
Section 8.03:

 

(i) Purchaser and Pfizer shall provide or cause to be provided promptly to
Governmental Authorities with regulatory jurisdiction over enforcement of any
applicable Competition Laws (“Governmental Antitrust Entity”) information and
documents requested by any Governmental Antitrust Entity or necessary, proper or
advisable to permit consummation of the acquisition of the Shares and the
Purchased Assets and the transactions contemplated by this Agreement;

 

38

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

(ii) Purchaser and Pfizer shall file any notification and report form and
related material required under the HSR Act as soon as practicable after the
date hereof, and thereafter use its reasonable best efforts to certify as soon
as practicable its substantial compliance with any requests for additional
information or documentary material that may be made under the HSR Act;

 

(iii) Purchaser shall proffer to (A) sell or otherwise dispose of, or hold
separate and agree to sell or otherwise dispose of specific assets or categories
of assets or businesses of the Conveyed Companies and the Purchased Assets or
any of Purchaser’s other assets or businesses now owned or presently or
hereafter sought to be acquired by Purchaser; (B) terminate any existing
relationships and contractual rights and obligations; and (C) amend or terminate
such existing licenses or other intellectual property agreements and to enter
into such new licenses or other intellectual property agreements (and, in each
case, to enter into agreements with the relevant Governmental Antitrust Entity
giving effect thereto), in each case with respect to the foregoing clauses (A),
(B) or (C) if such action (1) is necessary to obtain approval for consummation
of the transactions contemplated by this Agreement by any Governmental Antitrust
Entity and (2) would not have a Material Adverse Effect, provided that for
purposes of this Section 8.03(c)(iii), the definition of Material Adverse Effect
(y) shall include any material adverse effect to the business results,
operations or financial condition of Purchaser and the Business, taken as a
whole, subject to the exclusions in clauses (i), (ii)(A), (iii) and (iv) of such
definition and (z) shall be read without reference to clauses (ii)(B) and (v) of
such definition; and

 

(iv) Subject to Section 8.03(c)(iii), each of Purchaser and Pfizer, in the event
that any permanent or preliminary injunction or other order is entered or
becomes reasonably foreseeable to be entered in any proceeding that would make
consummation of the acquisition of the Shares or the Purchased Assets or the
other transactions contemplated hereby in accordance with the terms of this
Agreement unlawful or that would prevent or delay consummation of the
acquisition of the Shares or the Purchased Assets or the other transactions
contemplated by this Agreement, shall use its reasonable best efforts necessary
to vacate, modify or suspend such injunction or order so as to permit such
consummation on a schedule as close as possible to that contemplated by this
Agreement unless, by mutual agreement, Purchaser and Pfizer decide that
litigation is not in their respective best interests. Notwithstanding the
foregoing or any other provision of this Agreement, nothing in this Section 8.03
shall limit the right of a party to this Agreement to terminate this Agreement
pursuant to Section 10.01(b), so long as such party to this Agreement has up to
then complied in all material respects with its obligations under this Section
8.03. Each of Purchaser and Pfizer shall use its reasonable best efforts to take
such action as may be required to cause the expiration of the waiting periods
under the HSR Act or other Competition Laws with respect to such transactions as
promptly as possible after the execution of this Agreement.

 

Subject to appropriate confidentiality limitations, and to the extent not
prohibited by applicable Law, each of Pfizer and Purchaser shall provide to the
other party copies of all correspondence between it (or its advisor) and any
Governmental Antitrust Entity relating to the acquisition of the Shares or the
Purchased Assets or any of the matters described in this

 

39

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

Section 8.03. Neither Pfizer nor Purchaser shall independently participate in a
telephone call or meeting with a Governmental Antitrust Entity regarding the
acquisition of the Shares or the Purchased Assets or any of the matters
described in this Section 8.03 without using its reasonable best efforts to give
the other prior notification of the call or meeting and, unless prohibited by
such Governmental Antitrust Entity, the opportunity to attend and participate.

 

(d) The parties expressly agree: (i) that any breach by Purchaser of its
obligations under Section 8.03(c) will cause irreparable harm to the Seller
Corporations and the Conveyed Companies; (ii) that Pfizer has agreed to this
transaction with Purchaser in specific reliance on Purchaser’s obligations under
Section 8.03(c), and would not have otherwise agreed to enter into this
Agreement with Purchaser in relation to the transactions contemplated hereby;
and (iii) therefore, Pfizer is entitled to specific performance of Purchaser’s
obligations under Section 8.03(c), and Purchaser hereby agrees in advance to the
granting of such specific performance of such obligations without proof of
actual damages or harm.

 

(e) In the event that any approval or action of a Governmental Authority (other
than a Governmental Authority of the United States of America (or any state or
subdivision thereof), of the United Kingdom, Germany, Italy, Sweden or the
Netherlands) that is necessary to lawfully consummate the transactions
contemplated hereby is not obtained on or prior to the Closing Date, or there
exists any Law that makes illegal or enjoins or prevents in any respect the
consummation of the transactions contemplated by this Agreement except with
respect of those jurisdictions specified above, then Pfizer and Purchaser shall
effect the Closing (including payment of the entire Aggregate Purchase Price),
subject to the terms of this Agreement (including, but not limited to, Section
5.01), with respect to all Shares, Purchased Assets and Assumed Liabilities
outside of the jurisdiction of any such Governmental Authority or such Law;
provided, however, that the obligations of the parties hereto set forth in this
Section 8.03 shall continue with respect to any such compliance with Law,
approval or action until such compliance with Law, approval or action is
obtained or taken, as the case may be, and upon the occurrence of such
compliance with Law, approval or action, the parties hereto shall effect the
transfer of the affected Shares, Purchased Assets and Assumed Liabilities in
accordance with the Foreign Implementing Agreement for the jurisdictions
relating thereto. Each such transfer, upon occurrence, shall be retroactive to
and be deemed to have occurred on the Closing Date. Furthermore, as of the
Closing Date, Pfizer and the Purchaser shall, subject to applicable Law, enter
into mutually agreeable alternative business arrangements consistent with the
terms of this Agreement or other arrangements which provide Purchaser with the
net economic benefit or loss of the affected Shares, Purchased Assets and
Assumed Liabilities from and after the Closing Date and continuing until any
such approval or action is obtained or taken (any such agreement evidencing such
arrangement is referred to as a “Net Economic Benefits Letter”).

 

8.04. Tax Matters.

 

(a) (i) Preparation and Filing of Tax Returns. Pfizer shall prepare and timely
file or shall cause to be prepared and timely filed all federal, state, local
and foreign Tax Returns in respect of the Conveyed Companies and the Asset
Selling Corporations, their assets and activities that (A) are required to be
filed (taking into account extensions) on or before the Closing Date; or (B) are
required to be filed (taking into account extensions) after the Closing

 

40

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

Date and (1) are Consolidated Tax Returns of Pfizer and its Affiliates; (2) are
with respect to Income Taxes and are required to be filed on a separate Tax
Return basis for any Tax period ending on or before the Closing Date; or (3) are
to be filed by an Asset Selling Corporation. Purchaser shall prepare or cause to
be prepared and shall file or cause to be filed all other Tax Returns required
of the Conveyed Companies, or in respect of their assets or activities or
required to be filed after the Closing Date with respect to the Purchased Assets
or the Business. Any such Tax Returns that include periods ending on or before
the Closing Date or that include the activities of the Conveyed Companies or an
Asset Selling Corporation (with respect to the Business) prior to the Closing
Date shall, insofar as they relate to the Conveyed Companies or an Asset Selling
Corporation (with respect to the Business) prior to the Closing Date, be
prepared on a basis consistent with the last previous such Tax Returns filed in
respect of the Conveyed Companies or such Asset Selling Corporation (with
respect to the Business), unless Pfizer or Purchaser, as the case may be,
concludes that there is no reasonable basis for such position. With respect to
any Tax Return required to be filed by Purchaser for a taxable period that
includes (but does not end on) the Closing Date (a “Straddle Period”), Purchaser
shall deliver to Pfizer, at least 15 Business Days prior to the due date for the
filing of such Tax Return (taking into account extensions), a statement setting
forth the amount of Tax for which Pfizer is responsible pursuant to Sections
8.04(g)(i) and (iii) and a copy of such Tax Return. Pfizer shall have the right
to review such Tax Return and statement prior to the filing of such Tax Return.
Pfizer and Purchaser agree to consult and resolve in good faith any issue
arising as a result of Pfizer’s review of such Tax Return and statement and
mutually to consent to the filing of such Tax Return as promptly as possible.
Neither Purchaser nor any of its Affiliates shall file any amended Tax Returns
for any periods for or in respect of the Conveyed Companies with respect to
which Purchaser is not obligated to prepare or cause to be prepared the original
such Tax Returns pursuant to this Section 8.04(a)(i) without the prior written
consent of Pfizer. Neither Purchaser nor any of its Affiliates may make an
election under Section 338(g) of the Code with respect to its purchase or deemed
purchase of any of the Conveyed Companies. If Pfizer determines that any of the
Conveyed Companies is entitled to file or make a formal or informal claim for
refund or file an amended Tax Return providing for a refund with respect to a
period for which it is obligated to prepare or cause to be prepared the original
such Tax Return pursuant to this Section 8.04(a)(i), Pfizer shall be entitled,
at its own expense, to file or make such claim or file an amended Tax Return on
behalf of such Conveyed Company and will be entitled to control the prosecution
of such refund claims provided that any such claims are prosecuted in good
faith.

 

(ii) Internal Restructurings. Notwithstanding anything herein to the contrary,
Pfizer shall cause, and shall have the right to cause an election pursuant to
Treasury Regulations Section 301.7701-3 to be filed, effective from a date prior
to the Closing Date, for those of the Conveyed Companies that are not United
States entities to be treated as a branch or a partnership for U.S. federal
Income Tax purposes, and copies of all such elections have been provided to
Purchaser.

 

(b) Payment of Taxes. Pfizer shall pay or cause to be paid (i) all Taxes due
with respect to Tax Returns which Pfizer is obligated to prepare and file or
cause to be prepared and filed pursuant to Section 8.04(a); (ii) all Taxes due
with respect to Tax Returns for Straddle Periods for which Pfizer is responsible
pursuant to Section 8.04(g)(i) and (iii) all Non-Income Taxes with respect to
Tax Returns for Non-Income Taxes to be filed by Purchaser on a separate

 

41

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

Tax Return basis for any Tax period ending on or before the Closing Date for
which Pfizer is responsible pursuant to Section 8.04(g)(i). Purchaser shall pay
or cause to be paid (A) all Taxes due with respect to Tax Returns which
Purchaser is obligated to prepare and file or cause to be prepared and filed
pursuant to Section 8.04(a) other than Taxes which Pfizer shall pay or cause to
be paid in accordance with the preceding sentence; and (B) all Taxes owed by the
Conveyed Companies other than Taxes which Pfizer shall pay or cause to be paid
in accordance with the preceding sentence.

 

(c) Tax Sharing Agreements. On the Closing Date, all Tax sharing agreements and
arrangements between (i) the Conveyed Companies, on the one hand, and (ii)
Pfizer or any of its Subsidiaries or Affiliates or any other party (other than
the Conveyed Companies), on the other hand, shall be terminated effective as of
the close of business on the date that immediately precedes the Closing Date and
have no further effect for any taxable year or period (whether a past, present
or future year or period), and no additional payments shall be made thereunder
on or after the Closing Date with respect to any period. At the Closing, Pfizer
or one of its Affiliates (other than Pharmacia Groningen B.V.) will pay to
Pharmacia Groningen B.V. an amount equal to the corporate tax provision for
Pharmacia Groningen B.V.’s taxable year beginning December 1, 2003, as included
on its balance sheet as of the Closing Date.

 

(d) Carryforwards and Carrybacks. Purchaser shall cause the Conveyed Companies
to elect, when permitted by law, to carry forward any net operating loss,
charitable contribution credit or other item arising after the Closing Date that
could, in the absence of such an election, be carried back to a taxable period
of the Conveyed Companies ending on or before the Closing Date in which the
Conveyed Companies were included in a Consolidated Tax Return of Pfizer and its
Affiliates. Except as provided below, Purchaser, on its own behalf and on behalf
of its Affiliates, hereby waives any right to use or apply any net operating
loss, charitable contribution credit or other item (including any net capital
loss, foreign tax credit or research and development credit) of the Conveyed
Companies for any tax year ending on any date following the Closing Date to any
period of the Conveyed Companies ending on or before the Closing Date. If any
net capital loss, foreign tax credit, research and development credit or other
item shall be carried back to any such period, Purchaser shall indemnify Pfizer
and its Affiliates (other than the Conveyed Companies) for all reasonable costs
and expenses incurred by Pfizer or any of such Affiliates in filing such claims
or in connection with any audit of such claims. Purchaser, on its own behalf and
on behalf of its Affiliates (including the Conveyed Companies), hereby agrees
not to use or apply any net operating loss or net capital loss of Healon AB
arising or incurred in any Tax period or portion thereof ending on or before the
Closing Date, without Pfizer’s consent.

 

(e) Refunds. Pfizer shall be entitled to retain, or receive immediate payment
from Purchaser or any of its Subsidiaries or Affiliates (including the Conveyed
Companies) of, any refund or credit with respect to Taxes (including refunds and
credits arising by reason of amended Tax Returns filed after the Closing Date or
otherwise) with respect to any Tax period or portion thereof ending on or before
the Closing Date relating to the Conveyed Companies or any Asset Selling
Corporation; provided, however, that (i) Purchaser and the Conveyed Companies
shall be entitled to retain, or receive immediate payment from Pfizer of, any
such refund or credit to the extent that such refund or credit arises as a
result of the use or application (as provided in Section 8.04(d)) of any net
capital loss, foreign tax credit, research and development credit or

 

42

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

other item of the Conveyed Companies for any period following the Closing Date
to any period of the Conveyed Companies ending on or before the Closing Date;
and (ii) to the extent that Pfizer or any of its Affiliates (other than the
Conveyed Companies) would, but for the carryback by the Conveyed Companies of
any such net capital loss, foreign tax credit, research and development credit
or other item, be entitled to a refund or credit in respect of any net capital
loss, foreign tax credit, research and development credit or other item of
Pfizer or any of Pfizer’s Affiliates (other than the Conveyed Companies), Pfizer
shall be entitled to receive immediate payment from Purchaser of any such amount
to the extent Purchaser has previously received a refund or credit from a
carryback to Pfizer’s return, provided that to the extent that Pfizer or any of
Pfizer’s Affiliates is entitled to a refund or credit in respect of any such net
capital loss, foreign tax credit or research and development credit of Pfizer or
any of Pfizer’s Affiliates in another tax period as a result of such carryback
by the Conveyed Companies, Purchaser and the Conveyed Companies shall be
entitled to receive immediate payment from Pfizer of any such refund or credit.
Purchaser and the Conveyed Companies shall be entitled to retain, or receive
immediate payment from Pfizer of, any refund or credit with respect to Taxes
with respect to any taxable period beginning after the Closing Date relating to
any of the Conveyed Companies. Purchaser and Pfizer shall equitably apportion
any refund or credit with respect to Taxes with respect to a Straddle Period in
a manner consistent with the principles set forth in Section 8.04(g)(iii).

 

(f) Tax Cooperation. Each of Purchaser and Pfizer shall provide each other with
such information and records and make such of its officers, directors, employees
and agents available as may reasonably be requested by such other party in
connection with the preparation of any Tax Return or any audit or other
proceeding that relates to the Conveyed Companies or the Asset Selling
Corporations. Pfizer shall, within 60 days after the Closing Date, provide or
cause to be provided to Purchaser a tax balance sheet reflecting the value of
each asset transferred to or owned by Healon AB which asset values shall equal
the values used by Pfizer, Healon AB or their respective Affiliates in preparing
and filing their Swedish Tax Returns.

 

(g) Tax Indemnification.

 

(i) Pfizer shall indemnify, defend and hold Purchaser and its Affiliates
(including the Conveyed Companies) harmless from and against all Losses arising
from (A) all Liability for Taxes of the Conveyed Companies or with respect to
the Purchased Assets for any Pre-Closing Period, (B) all Liability from any
breach of Pfizer’s representations and warranties contained in Section 6.16 to
the extent such Liability relates to (1) Taxes of the Conveyed Companies or the
Purchased Assets for any Pre-Closing Period and (2) in the case of Pharmacia
Groningen B.V., corporate income tax and value-added tax for the Pre-Closing
Period of the fiscal unity to which it belonged during such period; (C) all
Liability (as a result of Treasury Regulation Section 1.1502-6(a) and any
analogous provisions of foreign laws including the Dutch Tax Collection Act
(“Invorderingswet 1990”) or otherwise) for Income Taxes and, with respect to the
Netherlands, for all Taxes, of Pfizer or any other Person (other than the
Conveyed Companies) which is or has ever been affiliated with the Conveyed
Companies, or with whom the Conveyed Companies otherwise join or have ever
joined (or are or have ever been required to join) in filing any consolidated,
combined or unitary domestic or foreign Tax Return, prior to the Closing; (D)
any and all Taxes relating to any bulk sale or bulk transfer laws or similar
laws with respect to the Asset Selling Corporations for a Pre-Closing

 

43

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

Period; (E) any other claim for Taxes for a Pre-Closing Period for which
Pharmacia Groningen B.V. is held secondarily liable for Taxes and for which
another Person is primarily liable; and (F) all Liability for any breach of
Pfizer’s covenants in Sections 8.02(k) and 8.04 relating to Taxes; provided,
however, that (i) to the extent such Losses are with respect to legal,
accounting and appraisal fees and expenses, such amounts must be reasonable,
(ii) Pfizer’s indemnity obligation for Taxes pursuant to this Section 8.04(g)(i)
shall be reduced by refunds of Taxes (excluding carrybacks from post-Closing
Date years to the extent permitted hereunder) with respect to such periods that
end on or before the Closing Date that are received after the Closing Date by
Purchaser or any of its Affiliates and not previously remitted to Pfizer and
(iii) in the event that the Healon Business Drop Down has not been completed on
or before the Closing, any Liability for Taxes related to the Healon Business
Drop Down shall be regarded as being for a Pre-Closing Period. Notwithstanding
anything to the contrary in Section 8.04(g), Pfizer shall not indemnify, defend
or hold harmless Purchaser or any of its Affiliates from any Losses arising from
any liability for Taxes that are (a) attributable to any Purchaser Tax Act; or
(b) to the extent of any net operating or capital loss carryforwards of the
Conveyed Companies directly reduce such liability for such Taxes or (c) incurred
by virtue of a change in the use of any property of a Conveyed Company resulting
in an obligation to adjust value-added Taxes if such change is made after the
Closing Date. Furthermore, Pfizer’s obligation to indemnify, defend and hold
harmless Purchaser and its Affiliates from Losses as set forth in Section
8.04(g) shall terminate effective 60 days after the expiration of the applicable
statute of limitations (including extensions) in respect of such Losses;
provided, further, with respect to a Tax Claim for which a claim for
indemnification under Section 8.04(g) has been made by Purchaser or its
Affiliates (including the Conveyed Companies), with reasonable specificity, by
written notice given under Section 8.04(i)(A), Pfizer’s indemnification
obligation shall continue until the date of a final determination of such Tax
Claim.

 

(ii) Purchaser shall, and shall cause the Conveyed Companies to, indemnify,
defend and hold Pfizer and its Affiliates harmless from and against all Losses
arising from: (A) any Liability for Taxes of the Conveyed Companies except to
the extent Pfizer is otherwise required to indemnify Purchaser for such Tax
pursuant to Section 8.04(g)(i); (B) any Liability for Taxes that is attributable
to a Purchaser Tax Act; and (C) any Liability for any breach of Purchaser’s
covenants in this Section 8.04 relating to Taxes; provided, however, that (i)
Purchaser’s indemnity obligation for Taxes pursuant to clauses (B) and (C) shall
include any additional Taxes arising as a result of a reduction in the amount of
foreign tax credits that are available to Pfizer (computed as if Pfizer could
have fully utilized all available foreign tax credits), (ii) the Purchaser
indemnity obligation with respect to clause (B) shall cease to apply with
respect to Purchaser Tax Acts (1) relating to Healon AB occurring after the 3rd
anniversary of the Closing Date and (2) relating to Pharmacia Groningen B.V.
occurring after the 5th anniversary of the Closing Date and (iii) to the extent
such Losses are with respect to legal, accounting and appraisal fees and
expenses, such amounts must be reasonable. Purchaser’s obligation to indemnify,
defend and hold harmless Pfizer and its Affiliates from any such Loss shall
terminate effective 60 days after the expiration of the applicable statute of
limitations (including extensions) in respect of such Losses; provided, further,
with respect to a Tax Claim for which a claim for indemnification under Section
8.04(g) has been made by

 

44

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

Pfizer or its Affiliates, with reasonable specificity, by written notice given
under Section 8.04(i)(A), Purchaser’s indemnification obligation shall continue
until the date of a final determination of such Tax Claim.

 

(iii) In the case of any Straddle Period:

 

(A) The periodic Taxes of the Conveyed Companies or with respect to the
Purchased Assets that are not based on income or receipts (e.g., property Taxes)
for the portion of any Straddle Period ending on the Closing Date (the
“Pre-Closing Tax Period”) shall be computed based upon the ratio of the number
of days in the Pre-Closing Tax Period and the number of days in the entire Tax
period; and

 

(B) Taxes of the Conveyed Companies or with respect to the Purchased Assets for
the Pre-Closing Tax Period (other than Taxes described in Section
8.04(g)(iii)(A) above) shall be computed as if such taxable period ended as of
the close of business on the Closing Date and, in the case of any Taxes of the
Conveyed Companies attributable to the ownership by the Conveyed Companies of
any equity interest in any partnership or other “flowthrough” entity, as if a
taxable period of such partnership or other “flowthrough” entity ended as of the
close of business on the Closing Date.

 

(iv) Any indemnity payment required to be made pursuant to this Section 8.04(g)
shall be made within 30 days after the indemnified party makes written demand
upon the indemnifying party, but in no case earlier than 5 Business Days prior
to the date on which the relevant Taxes are required to be paid to the relevant
taxing authority (including estimated Tax payments); provided that any indemnity
payment for Taxes that are with respect to non-Income Taxes and are required to
be filed by Purchaser on a separate Tax Return basis for any Tax period ending
on or before the Closing Date shall be made within 10 days after the Purchaser
or its Affiliates makes written demand upon Pfizer, but in no case earlier than
5 Business Days prior to the date on which such Taxes are required to be paid to
the relevant taxing authorities.

 

(v) Any indemnity payment made pursuant to this Section 8.04 shall be treated as
an adjustment to the price paid by Purchaser for the relevant Conveyed Company
or the Purchased Assets, as the case may be, for Tax purposes, unless a final
determination with respect to the indemnified party or any of its Affiliates
causes such payment to be treated other than as an adjustment to the purchase
price for Tax purposes.

 

(h) Timing Adjustment. In the event that a final determination (which shall
include the execution of an IRS Form 870-AD or successor form) results in a
timing difference (e.g., an acceleration of income or delay of deductions) that
would increase Pfizer’s liability for Taxes pursuant to this Section 8.04 or
results in a timing difference (e.g., an acceleration of deductions or delay of
income) that would increase Purchaser’s or its Affiliates’ liability for Taxes
pursuant to this Section 8.04, Purchaser or Pfizer, as the case may be, shall
promptly make payments to Pfizer or Purchaser as and when Purchaser or Pfizer,
as the case may be, actually realizes any Tax benefits as a result of such
timing difference (or under such other method for

 

45

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

determining the present value of any such anticipated Tax benefits as agreed to
by the parties). Such Tax benefit for federal, state and local and non-U.S.
Income Tax purposes shall be computed for any year using Purchaser’s or
Pfizer’s, as the case may be, actual Tax liability with and without giving
effect to such timing difference.

 

(i) Tax Contests.

 

(A) If a claim shall be made by any taxing authority (a “Tax Claim”) which, if
successful, might result in an indemnity payment to Purchaser or Pfizer or any
of their Affiliates pursuant to Section 8.04, the indemnified party shall
promptly notify the other party of such claim no later than 15 Business Days
after such Tax Claim is made, or otherwise the indemnifying party will be
released from any indemnification obligation hereunder with respect to such Tax
Claim to the extent of the actual prejudice caused.

 

(B) With respect to any Tax Claim relating to a taxable period ending on or
before the Closing Date or relating to or affecting a Consolidated Tax Return,
Pfizer shall control all proceedings and may make all decisions taken in
connection with such Tax Claim (including selection of counsel) and, without
limiting the foregoing, may in its sole discretion in good faith 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. Purchaser
shall be entitled to be informed of (i) such Tax Claim within a reasonable time
after such Tax Claim is asserted and (ii) the developments with respect to such
Tax Claim at any administrative meeting, conference, hearing or other
proceeding.

 

(C) Except as otherwise provided in Section 8.04(i)(B), Pfizer and Purchaser
shall jointly control and participate in all proceedings taken in connection
with any Tax Claim relating to Taxes of the Conveyed Companies or relating to
the Purchased Assets for any Straddle Period. Neither Pfizer nor Purchaser shall
settle any such Tax Claim without the prior written consent of the other, which
consent shall not be unreasonably withheld.

 

(D) Except as otherwise provided in Section 8.04(i)(B), Purchaser shall control
all proceedings with respect to Taxes for any taxable period beginning after the
Closing Date.

 

(E) Purchaser, the Conveyed Companies and each of their respective Affiliates,
on the one hand, and Pfizer and its Affiliates, on the other hand, shall
cooperate in contesting any Tax Claim, which cooperation shall include the
retention and (upon request) the provision to the requesting party of records
and information which are reasonably relevant to such Tax Claim, making
employees available on a mutually convenient basis to provide additional
information or explanation of any material provided hereunder or to testify at

 

46

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

proceedings relating to such Tax Claim. Purchaser shall execute and deliver such
powers of attorney and other documents as are necessary to carry out the intent
of this Section.

 

8.05. Employees and Employee Benefits.

 

(a) Employees (US) - Offer of Continued Employment; Severance.

 

(i) Subject to Section 8.05(f), Purchaser agrees to offer to continue employment
as of 12:01 a.m. on the day immediately following the Closing Date to each
Employee (US) that is still employed (or, in the case of Employees (US) employed
by the Conveyed Companies, to cause the Conveyed Companies to offer to continue
the employment of each of their Employees (US)) in the same or a “comparable
position” (as defined in Section 8.05(a)(v)) and at a rate of “pay” (as defined
below) at least equal to such Employee’s (US) rate of pay in effect on the
Closing Date and with benefits that are “substantially comparable” (as defined
below) to the employee benefits set forth on Schedule 6.17.

 

(ii) From 12:01 a.m. on the day immediately following the Closing Date through
April 15, 2005, Purchaser shall provide severance benefits identical to those
set forth in the Pharmacia Separation Benefit Plan attached as Schedule
8.05(a)(i) (the “Pharmacia Separation Benefit Plan”) to each Employee (US) that
meets the eligibility criteria for benefits under the Pharmacia Separation
Benefits Plan. For the two year period commencing on the Closing Date, Purchaser
shall provide severance benefits in accordance with such other Pfizer severance
plans or policies under which such Employee (US) would have been eligible to
receive severance benefits; provided that, if an Employee (US) receives
severance benefits pursuant to the Pharmacia Separation Benefit Plan, he or she
shall not be eligible for severance benefits under any other severance plan,
program or arrangement. Notwithstanding the foregoing, Purchaser or its
Affiliates may terminate an Employee (US) without paying or otherwise providing
severance benefits to such employee in accordance with such policy and practice
if such employee is terminated, in the reasonable discretion of Purchaser or its
Affiliates, “for cause” under the terms of the applicable plan.

 

(iii) Schedule 8.05(a)(iii) (which shall be provided by Pfizer five days prior
to the Closing Date, to the extent Pfizer has at least 10 days advance notice of
the scheduled Closing Date) shall set forth the name of each then-current
Employee (US), and his or her current rate of pay, position and date of hire.
Purchaser shall have no obligation whatsoever in relation to (A) former
employees of the Business who are retired, or who are not or shall have ceased
to be Employees (US) as of the Closing Date, or (B) employees who do not accept
the offer of employment or continuation of employment given by Purchaser in
accordance with this Section 8.05(a) and do not work for Purchaser or its
Affiliates for at least one day, unless such employee is otherwise an Affected
Employee. Purchaser shall be solely responsible for all salaries or wages
(including commissions, bonuses, incentive pay, overtime, premium pay, shift
differentials and severance pay) accruing after the Closing Date for services
rendered and work performed for Purchaser with respect to the Affected
Employees.

 

47

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

(iv) The following conditions of employment shall remain unchanged until the
date immediately following the second anniversary of the Closing Date: (A) the
pay and benefits comparability requirements described in Section 8.05(a)(v), and
(B) the employee separation plan obligations described in Section 8.05(a)(ii).
Notwithstanding anything to the contrary herein, on the date immediately
following the second anniversary of the Closing Date, Purchaser shall provide
pay and benefits and severance plans, programs and policies which are no less
favorable than those provided to other similarly situated employees of
Purchaser, as the case may be. Employees (US) shall also be provided credit by
Purchaser for all service with Pfizer and its Affiliates, to the same extent as
such service was credited for such purpose by Pfizer and its Affiliates, under
(A) all employee benefit plans, programs, policies and fringe benefits of
Purchaser described on Schedule 8.05(a)(v) for purposes of eligibility, vesting
and benefit accrual, and (B) severance plans, programs and policies for purposes
of calculating the amount of each such employee’s severance benefits; provided,
however, that no such crediting of service shall result in a duplication of
benefits.

 

(v) For purposes of this Section 8.05, references to “pay” shall include base
pay plus bonus, rates for overtime, premium pay and shift differentials and
comparable opportunity for commissions and cash incentive pay, but shall exclude
retention and retention/performance allowances. For purposes of this Section
8.05, whether benefits are “substantially comparable” shall be determined
pursuant to the analysis and procedures employed by Hewitt Associates in the
report provided to the parties on or around April 15, 2004. The term “comparable
position” shall mean comparable position, except that, with respect to Employees
(US) eligible for benefits under the Pharmacia Separation Benefit Plan, the term
“comparable position” shall be determined by reference to Section 2.06 of the
Pharmacia Separation Benefit Plan, which is attached hereto in Schedule
8.05(a)(i).

 

(b) Qualified Plans.

 

(i) Pfizer sponsors the following Plans covering Employees (US) which are
intended to be qualified under Section 401(a) of the Code (collectively, the
“Pfizer Qualified Plans”): the Pharmacia Savings Plan and Pfizer Savings Plan
(these two plans, collectively, the “Savings Plans”) and the Pharmacia Pension
Plan and Pfizer Retirement Annuity Plan (these two plans, collectively, the
“Retirement Plans”). Effective as of the Closing Date, the Seller Corporations
shall cause each Affected Employee who is a participant in one or more Pfizer
Qualified Plans to become one hundred percent (100%) vested in his or her
accrued benefit under each such Plan.

 

(ii) Effective as of 12:01 a.m. on the day immediately following the Closing
Date, each participant in a Pfizer Qualified Plan who is an Affected Employee
shall cease to be an active participant under each such Plan, and shall become a
participant in the Purchaser Qualified Plans listed on Schedule 8.05(b)(ii)(A)
(such plans being collectively referred to as the “Purchaser Qualified Plans”);
provided, that such Affected Employee shall not become a participant in a
Purchaser Qualified Plan if such Affected Employee is not employed by Purchaser.
Purchaser shall ensure that the Purchaser Qualified Plans will recognize the
accrued service of Affected Employees, as

 

48

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

set forth on Schedules 6.17(g)(i) and 6.17(g)(ii), with Pfizer and its
Affiliates up to and including the Closing Date for all purposes, to the extent
credited under the terms of the corresponding Pfizer Qualified Plan as in effect
on the Closing Date; provided, however, that no such crediting of service shall
result in a duplication of benefits. Schedules 6.17(g)(i) and 6.17(g)(ii), which
shall be delivered at the Closing, sets forth a true and complete copy of such
accrued service data. Purchaser shall assume all liabilities with respect to
Employees (US) under Purchaser Qualified Plans for benefits accrued after the
Closing Date.

 

(iii) If Purchaser maintains (or establishes) a Purchaser Qualified Plan that
corresponds with the Savings Plans, Pfizer shall cause, subject to Purchaser’s
receipt of satisfactory evidence that the applicable Pfizer Qualified Plans are
in compliance with all applicable Laws, as soon as practicable after the Closing
Date, the Savings Plans to transfer the account balance, in cash or such other
medium as agreed to by Pfizer and Purchaser, of each Affected Employee to such
corresponding Purchaser Qualified Plan as of the valuation date next preceding
the date of transfer. Purchaser, on the one hand, and Pfizer, on the other hand,
each agree to use commercially reasonable efforts and to cooperate with each
other to effect as promptly as possible the transfers of assets contemplated by
this Section 8.05(b)(iii), subject to Pfizer’s receipt of satisfactory evidence
that the Purchaser Qualified Plans are in compliance with all applicable Laws.
Such evidence shall include a current determination letter from the IRS and
representations satisfactory to Pfizer from the administrators of the Purchaser
Qualified Plans. If a current determination letter has not been obtained,
Purchaser and its counsel shall provide a representation that the Purchaser
Qualified Plans are qualified under Section 401(a) of the Code and that a timely
application for a determination letter is pending and that Purchaser will take
all necessary steps to secure a determination letter. Pfizer and Purchaser shall
each bear their own individual costs regarding the transfer of assets
contemplated by this Section 8.05(b)(iii).

 

(iv) Pfizer will give Purchaser reasonable access to records in its control
necessary to administer the retirement benefits of Affected Employees
transferred to the Purchaser Qualified Plans.

 

(c) Accrued Entitlements. Purchaser shall be responsible for all accrued but
unused vacation Liabilities for Employees who become employed with Purchaser or
its Affiliates as of the Closing Date consistent with Pfizer’s policies in
respect thereof, to the extent such Liabilities have been properly accounted for
on Pfizer’s financial statements.

 

(d) Welfare Plan Obligations. Commencing as of 12:01 a.m. on the day immediately
following the Closing Date, Purchaser shall include those Affected Employees who
become employed by Purchaser in its welfare plans and agrees to waive any
waiting periods or limitations for preexisting conditions under its welfare
benefits plans (including, without limitation, its medical, dental, life
insurance, short-term and long-term disability plans), and any other similar
plans, and shall ensure that such employees are given credit for any amounts
paid toward deductibles, out-of-pocket limits or other fees on or prior to the
Closing Date. Claims by an Affected Employee for welfare benefit plan services
rendered on or after 12:01 a.m. on the day immediately following the Closing
Date shall be the responsibility of the welfare benefit

 

49

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

plan provided by Purchaser to such employees. Claims incurred for welfare
benefit plan services for Affected Employees rendered prior to and including the
Closing Date shall be the responsibility of the welfare benefit plan of Pfizer
or the Seller Corporation which covered such employees prior to and including
the Closing Date. Pfizer shall arrange for the transfer of information related
to amounts paid toward deductibles, out-of-pocket limits or other fees as soon
as reasonably practicable following the Closing Date but in any event within 30
days after the Closing Date.

 

(e) Employees (non-US) - Offer of Employment; Continued Employment; Severance.
Except for Employees (non-US) in a country where the ARD has been implemented
under local law, subject to Section 8.05(f), and to the extent employment with
Purchaser or its Affiliates would not continue as a matter of law, Purchaser
agrees to offer, or to cause one of its Affiliates to offer, to continue
employment as of 12:01 a.m. on the day immediately following the Closing Date to
each Employee (non-US) (or, in the case of Employees employed by the Conveyed
Companies, to cause the Conveyed Companies to offer to continue the employment
of each of their Employees (non-US)) at a rate of pay at least equal to such
employee’s rate of pay in effect on the Closing Date and, subject to applicable
Laws of the foreign countries and their political subdivisions, in the same or a
comparable position and with benefits which shall be substantially comparable to
such employee’s benefits which are in effect on the Closing Date. Schedule
8.05(e) (which shall be provided by Pfizer on the Closing Date) shall set forth
the name of each Employee (non-US).

 

Other than with respect to matters the subject of Section 8.05(b)(iii) and
except where the Laws of a country in which the ARD has been implemented require
otherwise, Purchaser agrees that the pay, the substantially comparable benefits
requirement, and the severance obligations for such Employees (non-US) shall
remain unchanged until the date immediately following the second anniversary of
the Closing Date, and that following such date, Purchaser or its Affiliates
shall provide pay and benefits and severance plans, programs and policies which
are no less favorable than those provided to other similarly situated employees
of Purchaser or its Affiliates, as the case may be. Employees (non-US) shall
also be provided credit by Purchaser or its Affiliates for all service with
Pfizer and its Affiliates, to the same extent as such service was credited for
such purpose by Pfizer and its Affiliates under (A) all employee benefit plans,
programs, policies and fringe benefits of Purchaser or its Affiliates in which
such Employee (non-US) is eligible to participate for purposes of eligibility,
vesting and benefit accrual, and (B) severance plans, programs and policies for
purposes of calculating the amount of each such employee’s severance benefits;
provided, however, that no such crediting of service shall result in a
duplication of benefits. This Section 8.05(e) shall be subject to such
modification as are necessary to comply with applicable Laws of the foreign
countries and their political subdivisions (including, without limitation,
obligations to notify, consult with and/or obtain the consent of Employees
(non-US) as may be applicable); and applicable labor agreements.

 

(f) Employees (US) and Employees (non-US) Absent on Disability or Leaves of
Absence - Offer of Employment; Continued Employment; Severance. Except for
Employees (non-US) in a country where the ARD has been implemented under local
law, when an Employee (US) or Employee (non-US) who is, on the Closing Date,
absent due to illness or on short-term disability (including maternity
disability) or workers’ compensation seeks to return to active employment within
the lesser of six months from the Closing Date or the end of the leave

 

50

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

of absence available under Pfizer’s policies, Purchaser shall or shall cause one
of its Affiliates to offer immediate employment to such employee in the same or
a “comparable position” (as defined in Section 8.05(a)(v) hereof) to that which
the employee occupied before such absence but only at such time that such
employee is medically capable of performing the essential functions of the
position occupied immediately before such absence. In addition, immediate
employment in the same or a “comparable position” (as defined in Section
8.05(a)(v) hereof) will be offered by Purchaser or one of its Affiliates to
those Employees (US) and Employees (non-US) returning from authorized leaves of
absence such as parental, family and medical, and military leaves or other
leaves where return to work is subject to statutory requirements. Such
employees, returning from disability or leaves of absence, will be subject to
the same pay, benefits, severance and all other policies, plans, programs and
arrangements as stipulated in this Article VIII for similarly situated Employees
(US) and Employees (non-US).

 

(g) No Third Party Beneficiaries. Nothing contained herein, expressed or
implied, is intended to confer upon any Employee of any Seller Corporation or
any of the Conveyed Companies any benefits under any benefit plans, programs,
policies or other arrangements, including severance benefits or right to
employment or continued employment with Purchaser or any Affiliate of Purchaser
for any period by reason of this Agreement. In addition, the provisions of this
Agreement, in particular this Article VIII, are for the sole benefit of the
parties to this Agreement and are not for the benefit of any third party.

 

(h) Assumption of Plans. Purchaser shall not assume any Plan or any other
employee benefit plan, program, agreement or arrangement that is maintained,
contributed to, or required to be contributed to, by any Seller Corporation,
except that Purchaser shall assume the German pension obligations to the extent
included in Section 2.05(g). Purchaser shall not assume any Liabilities with
respect to any Plan, including but not limited to (i) any Liability under Title
IV of ERISA and (ii) any Liability to make contributions to a Plan pursuant to
Section 412 of the Code or Section 302 of ERISA.

 

(i) Cooperation Pre-Closing. Pfizer and Purchaser agree to reasonably cooperate
during the period prior to the Closing in order to effectuate the transition of
employees from Pfizer and its Affiliates to Purchaser and its Affiliates,
including but not limited to, the provision of reasonable information to allow
Purchaser to implement payroll and benefits for such incoming employees.

 

(j) Continued/Reemployment with Pfizer. Purchaser will not be required to
provide any severance pay or benefits to any Employee who remains employed with
Pfizer or its Affiliates following the Closing (unless and until such Employee
becomes employed by Purchaser under Section 8.05(f) above, in which case such
Employee’s entitlement to severance pay and benefits shall be governed by the
provisions of Section 8.05(a)(i) and (ii) above). Additionally, if within the
three-month period following the Closing Date, Pfizer or its Affiliates employs
or re-employs any Employee with respect to which Purchaser paid severance or
provided severance benefits, Pfizer shall promptly indemnify Purchaser for such
amounts.

 

(k) Assumption of Liabilities. Except as otherwise provided in this Section
8.05, Purchaser shall not assume: (i) any Liabilities with respect to any person
that accrued or arose on or prior to the date such person became employed by
Purchaser or its Affiliates; or (ii)

 

51

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

any Liabilities for benefits under any plan, program, policy or arrangement
maintained by any of the Seller Corporations. Furthermore, Purchaser shall not
assume any severance obligation with respect to Employees who are hired by
Pfizer or its Affiliates in violation of the covenants contained in Sections
8.02(j) and (m). To the extent that Purchaser or its Affiliates assume any of
the foregoing Liabilities or severance obligations automatically through
operation of Law, Pfizer shall indemnify Purchaser for such Liabilities or
severance obligations.

 

8.06. Certain Dividends, Etc. Notwithstanding anything to the contrary in this
Agreement (including Section 8.02), each Conveyed Company will be permitted to
distribute to Pfizer or any one or more of its designated Affiliates, effective
as of the Closing Date, up to the amount of its retained earnings accrued
through the Closing Date, but not in excess of cash on hand and in no event to
be effected through any additional borrowings from Pfizer, any of its Affiliates
or any third person. In addition, Pfizer and its Affiliates shall be permitted
to continue to conduct their activities regarding cash management matters
relating to the Business (including the collection and transfer of accounts
receivable and disbursement of funds by Pfizer) in accordance with the practice
in effect as of the date of this Agreement, except as may be affected by actions
taken pursuant to Section 2.04 and as may be necessary to settle intercompany
payables and receivables and to effect intercompany funding.

 

8.07. Resignations. At the Closing and except as otherwise requested by
Purchaser in writing, Pfizer will deliver to Purchaser the resignations
(effective on or prior to the Closing) of all directors of each of the Conveyed
Companies from their positions as directors.

 

8.08. Bulk Transfer Laws. Purchaser acknowledges that the Seller Corporations
have not taken, and do not intend to take, any action required to comply with
any applicable bulk sale or bulk transfer laws or similar laws.

 

8.09. Non-competition.

 

(a) Subject to the provisions of this Section 8.09, Pfizer agrees that for a
period of two (2) years from and after the Closing Date, Pfizer shall not, and
it shall cause its Subsidiaries not to, compete, directly or indirectly, in any
material respect with the Business as conducted as of the Closing Date
(“Competitive Activity”); provided, however, that it shall not be deemed to be a
violation of this Section 8.09(a) for Pfizer or any of its Subsidiaries: (i) to
engage directly or indirectly in the research, manufacture or sale of any
products listed on Schedule 8.09; (ii) to engage, directly or indirectly, in the
research, manufacture or sale of any human pharmaceutical, human consumer
healthcare, animal pharmaceutical or animal healthcare product or any medical
device for the delivery of human or animal pharmaceutical products; (iii) to
invest in or own any debt securities or other debt obligations; (iv) to invest
in any third Person (including any corporation or mutual or other fund) which
invests in, manages or operates a Competitive Activity, so long as Pfizer’s and
its Subsidiaries’ aggregate investment is less than 10% of the outstanding
ownership interest in such third Person and Pfizer and its Subsidiaries do not
control such third Person or conduct the Competitive Activity; (v) to invest in,
own an interest in, or acquire all or a majority of the stock or assets of any
Person which is not engaged primarily in a Competitive Activity; (vi) to invest
in securities having less than 10% of the outstanding voting power of any
Person, the securities of which are publicly traded or listed on any securities
exchange or automated quotation system; (vii) to invest in any Person after the

 

52

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

Closing Date to the extent that Pfizer or a Subsidiary had, directly or
indirectly, acquired, or had a right to acquire, such interest prior to the date
of this Agreement, provided, however, that such investments shall be limited to
having less than 5% ownership interest in such Persons; or (viii) to own any
equity interests through any employee benefit plan or pension plan. For purposes
of this Section 8.09, “engaged primarily in a Competitive Activity” shall mean
that greater than 20% of the aggregate net revenue derived during the last
complete fiscal year of such Person (calculated on a consolidated basis) is
derived from the Competitive Activity. Each investment or acquisition made by
Pfizer or its Subsidiaries which is subject to the provisions of this Section
8.09 must be permissible hereunder at the time of such investment; provided,
however, that any such investment which was permissible when made cannot
thereafter be the basis of a claim of violation of this Section 8.09.

 

(b) For a period of two (2) years from and after the Closing Date, Pfizer shall
not, and it shall cause its Subsidiaries not to, directly or indirectly, induce
or attempt to induce any officers, Employees, representatives or agents of
Purchaser or any of its Affiliates engaged solely in the Business to leave the
employ of Purchaser or any such Affiliate for employment with Pfizer or its
Subsidiaries, or violate the terms of their Contracts, or any employment
arrangements, with Purchaser or any such Affiliate; provided, however, that
nothing in this Section 8.09(b) shall restrict or preclude Pfizer or any of its
Subsidiaries from making generalized searches for employees by the use of
advertisements in the media (including trade media) or by engaging search firms
to engage in searches that are not targeted or focused on the Employees employed
by the Business.

 

(c) Notwithstanding anything to the contrary in Section 8.09(a), Pfizer and its
Subsidiaries shall not be deemed to have violated the restrictions contained in
Section 8.09(a) in the event that Pfizer or any of its Subsidiaries acquires (by
purchase of stock or assets, merger or otherwise) or invests in any Person
engaged primarily in a Competitive Activity; provided, however, that Pfizer or
such Subsidiary thereafter divests a portion of such Competitive Activity within
18 months from the date of purchase of such Person or assets so as to be in
compliance with Section 8.09(a).

 

(d) Prior to the Closing, except as otherwise agreed in writing, neither
Purchaser nor any of its Affiliates will offer or provide employment on a
full-time or part-time or consulting basis to any individual employed by Pfizer
or any of its Affiliates; provided, however, that nothing in this Section
8.09(d) shall restrict or preclude Purchaser or any of its Affiliates from
employing personnel of Pfizer or any of its Affiliates who respond to a general
solicitation of employment at their own initiative or who contact Purchaser for
employment on their own initiative without any solicitation (other than a
general solicitation) on the part of Purchaser.

 

(e) Pfizer and Purchaser acknowledge and agree that this Section 8.09
constitutes an independent covenant and shall not be affected by performance or
nonperformance of any other provision of this Agreement. Each of Pfizer and
Purchaser has independently consulted with its counsel and after such
consultation agrees that the covenants set forth in this Section 8.09 are
reasonable and proper. It is the desire and intent of the parties that the
provisions of this Section 8.09 shall be enforced to the fullest extent
permitted under applicable Law. If all or part of this Section 8.09 is held
invalid, illegal or incapable of being enforced by any Law or public policy, all
other terms and provisions of this Agreement shall nevertheless

 

53

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

remain in full force and effect. If any part of this Section 8.09 is held to be
excessively broad as to duration, scope, activity or subject, such part will be
construed by limiting and reducing it so as to be enforceable to the maximum
extent compatible with applicable Law.

 

8.10. Compliance with WARN Act, Etc. With respect to WARN Act or other similar
Laws of any jurisdiction, Purchaser will timely give any notices or take any
other actions as may be required thereunder.

 

8.11. Litigation Support. From and after the Closing, Purchaser and its
Affiliates, on the one hand, and Pfizer and its Affiliates, on the other hand,
will cooperate with each other in the defense or settlement of any Liabilities
(including Product Claims) or lawsuits involving the Business for which they
have responsibility under this Agreement by providing the other party and such
other party’s legal counsel and other designated Persons access to employees,
records, documents, data, equipment, facilities, products, parts, prototypes and
other information regarding the Business and its products as such other party
may request, to the extent maintained or under the possession or control of the
requested party. The requesting party shall reimburse the other party for its
reasonable out-of-pocket expenses paid to third parties in performing its
obligations under this Section 8.11. Pfizer shall keep Purchaser informed of the
status of the pendency of the relevant Liabilities and lawsuits involving the
Business for which it has responsibility under this Agreement, will advise
Purchaser of material issues involved in the litigation and will use
commercially reasonable efforts to seek a confidentiality agreement with respect
to any settlements of such lawsuits. For so long as any Liabilities or lawsuits
involving the Business for which Pfizer has responsibility under this Agreement
remain outstanding, Purchaser will advise Pfizer of material issues involved in
the lawsuits involving the Business for which it has responsibility and will use
commercially reasonable efforts to seek a confidentiality agreement with respect
to any settlements of such lawsuits.

 

8.12. Insurance. As of the Closing Date, the coverage under all insurance
policies related to the Business (other than such policies as are included in
the Purchased Assets, if any, or such policies, if any, held by the Conveyed
Companies and solely related to the Business and not shared with other Pfizer
entities, unless such policies are reinsured or otherwise covered by the Pfizer
Corporate Insurance Program) shall continue in force only for the benefit of the
Seller Corporations and their Affiliates and not for the benefit of Purchaser.
Purchaser agrees to arrange for its own insurance policies with respect to the
Business covering all periods and agrees not to seek, through any means, to
benefit from any of the insurance policies maintained by the Seller Corporations
or their Affiliates which may provide coverage for claims relating in any way to
the Business prior to the Closing.

 

8.13. Trade Notification. Pfizer and Purchaser shall agree on the method and
content of the notifications to customers of the sale of the Shares and the
Purchased Assets to Purchaser. Pfizer and Purchaser agree that said
notifications are to provide sufficient advance notice of the sale and the plans
associated therewith, with the objective of minimizing any disruption of the
Business.

 

8.14. Products Received by Purchaser. If any products of the Business shipped
and sold prior to the Closing are received by Purchaser or Purchaser’s agent
within 60 days after the Closing and Purchaser (i) pays a customer claim related
to any such returned product or (ii)

 

54

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

replaces such returned product for no additional charge to the customer, then
Pfizer shall within 15 days after notification from Purchaser, reimburse
Purchaser, in the form of credit against any amounts owing under the
Transitional Services Agreement, for all customer claims made against, or
products replaced at no additional charge by, Purchaser in the amounts
associated with such returned products which are received by Purchaser, or
Purchaser’s agent after the Closing.

 

8.15. Foreign Implementing Agreements. As promptly as practicable after the date
hereof Pfizer and Purchaser shall cause the Foreign Implementing Agreements to
be prepared and executed by their applicable Affiliates.

 

8.16. Audited Financial Information. As soon as reasonably practicable, but in
no event later than 10 days after the date hereof, Pfizer shall deliver to
Purchaser, at Purchaser’s sole cost and expense, an audited statement of the net
assets to be sold in relation to the Business, and the related audited statement
of direct revenues and direct operating expenses in relation to the Business,
for the 12 months ended December 31, 2003 for the U.S. operations and the 11
months ended November 30, 2003 for the international operations, together with
the notes thereto and the audit report thereon of KPMG LLP (the “2003 Audited
Financial Information”).

 

8.17. Quarterly Financial Statements; Monthly Sales Information.

 

(a) During the period from January 1, 2004 to the Closing Date, Pfizer shall, no
later than 30 days following the end of each quarter, prepare and deliver to
Purchaser, upon completion, copies of (i) an unaudited statement of the net
assets to be sold in relation to the Business for the quarter then ended and
(ii) the related unaudited statement of direct revenues and direct expenses in
relation to the Business for the quarter then ended (the “Quarterly Financial
Statements”). Purchaser acknowledges that the Quarterly Financial Statements to
be delivered pursuant to this Section 8.17(a) will include a one month lag of
data in respect of the international operations of the Business, consistent with
the treatment of the international operations of the Business in the 2003
Unaudited Financial Statements previously provided to Purchaser.

 

(b) During the period from the date of this Agreement to the Closing Date,
Pfizer shall, no later than 7 days following the end of each month, prepare and
deliver to Purchaser, copies of the sales information relating to the Business,
for the month then ended.

 

8.18. Healon Business Drop Down. Prior to the Closing, in accordance with the
provisions of the Healon Business Drop Down Documents and all applicable Laws
and regulations, Pfizer shall, or shall cause its Subsidiaries to, contribute to
Healon AB the assets, properties and rights of the Business, as currently
conducted in Sweden (the “Swedish Business”), as would be deemed to be Purchased
Assets if such assets, properties and rights were transferred by an Asset
Selling Corporation to Purchaser under Section 2.02 hereof, and Pfizer shall
cause Healon AB to assume only those Liabilities of the Swedish Business as
would be deemed to be Assumed Liabilities under Section 2.05 hereof and shall
not assume any Liabilities that would be deemed Retained Liabilities. To the
extent that any of the provisions of the Healon Drop Down Documents are contrary
to the provisions of this Agreement, Pfizer and Purchaser agree that the
provisions of this Agreement shall govern in all respects, including with
respect to payment and indemnification. In such case, Pfizer and Purchaser agree
to take

 

55

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

appropriate actions to fulfill the intent of this Agreement, including the
transfer of such assets and assignment of such liabilities as may be required
under this Agreement. Pfizer agrees that it will not amend or modify the Healon
Drop Down Documents in any manner that would adversely affect the rights and
obligations of Purchaser under this Agreement. Pfizer shall, and shall cause the
Stock Selling Corporations to, fulfill the information and negotiation
obligations and other obligations to consult and inform the relevant trade
unions in accordance with applicable Laws and regulations prior to the Healon
Business Drop Down and the transfer of the Employees.

 

8.19. Rooster Comb Agreements. Prior to the Closing, Pfizer will use
commercially reasonable efforts to introduce Purchaser to appropriate
representatives of the counterparties to the Rooster Comb Agreements, and
cooperate with Purchaser, at Purchaser’s expense, with the view to enabling
Purchaser to negotiate its own arrangements for the provision of any services
which Purchaser wishes to procure from the applicable counterparties or to amend
and extend the term of the Rooster Comb Agreements.

 

8.20. Intercompany Receivables. Prior to the Closing Date, Pfizer shall, to the
extent practicable, cause all intercompany receivables and all intercompany
payables as at Closing to be paid or otherwise discharged in full. The net
effect of the remaining intercompany payables and intercompany receivables to be
transferred to Purchaser will be zero. Pfizer shall be responsible for any tax
Liability arising from the actions taken pursuant to this Section 8.20.

 

8.21. Information and Consultation Requirements. Except as set forth on Schedule
8.21, Pfizer and its Affiliates and Purchaser and its Affiliates have complied
with and shall continue to comply with, and Pfizer and Purchaser shall cause its
Affiliates to comply with, all applicable Laws (for example, the Dutch Works
Councils Act (Wet op de Ondernemingsraden)) or contractual or other obligations
relating to the notification of, consultation with, and/or the receipt of any
approval necessary to any of the transactions contemplated by this Agreement
from, any employees or any works council, labor union or organization, or any
similar body representing employees and/or consisting of employees. Pfizer and
Purchaser will each use their best endeavors to provide the other party with all
information reasonably necessary in order to support the other party’s
compliance with all applicable Laws relating to the matters described in this
Section 8.21.

 

8.22. Covenant Not to Sue. Purchaser hereby agrees not to commence any
litigation, action or other proceeding against Pfizer or its Affiliates based
upon or arising from the matters set forth in item 5 in Schedule 6.08, which
matters shall be the subject of releases executed by Purchaser and delivered to
Pfizer and its Affiliates at the Closing.

 

8.23. Return of Non-Public Information. Immediately after the date of this
Agreement, Pfizer shall request, and shall cause its Affiliates to request, the
prompt return or destruction of all non-public information furnished to any
person (other than Purchaser and its Affiliates and representatives) pursuant to
any confidentiality agreement entered into by Pfizer, its Affiliates or its
representatives with such persons relating to a potential acquisition of assets
or securities of the Business or any portion thereof, or a merger, consolidation
or other business combination involving any of the Conveyed Companies or Asset
Selling Corporations and certify to Purchaser that such return or destruction
has occurred.

 

56

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

8.24. Access to Facilities.

 

Prior to the Closing, and to the extent not possible, as soon as possible
following the Closing, at Pfizer’s sole cost and expense, Pfizer shall obtain
(or cause its Subsidiaries to obtain), and deliver to Purchaser written evidence
reasonably acceptable to Purchaser of, all licenses, permits, applications,
approval, authorizations, variances and other entitlements (and shall pay any
and all fees, fines and/or penalties in connection therewith or related to the
fact that there exist no licenses, permits, applications, approvals,
authorizations, variances or other entitlements prior to such delivery) relating
to the access road illustrated on Schedule 8.24 (the “Access Road”), so as to
permit any owner of the Facility, and all guests, invitees and employees of the
Facility or its owner, to use such Access Road as a right of way for ingress and
egress to and from the Facility at all times and at no cost to Purchaser or any
such owner or user (collectively, the “Road Approvals”). After the Closing,
until such time as the Road Approvals have been obtained and written evidence of
the same reasonably acceptable to Purchaser has been delivered to Purchaser
(and, in the event that the Road Approvals cannot be obtained), Pfizer shall, at
its sole cost and expense, obtain an easement registered at the court to afford
and allow (or cause its Subsidiaries to afford and allow) Purchaser, its
affiliates and all guests, invitees and employees of the Facility or Purchaser,
full use of the alternate road illustrated on Schedule 8.24 (the “Alternate
Road”) as a right of way of purposed of ingress and egress to and from the
Facility at all times and at no cost to Purchaser or any such user. After the
Road Approvals have been obtained and written evidence thereof provided to the
Purchaser, Purchaser, its affiliates and all guests, invitees and employees of
the Facility or Purchaser shall cease using such Alternate Road and Purchaser
shall take all necessary actions and execute all such documents at Pfizer’s
expense to remove or de-register such easement.

 

ARTICLE IX

INDEMNIFICATION

 

9.01. Indemnification by Pfizer.

 

(a) Subject to the provisions of this Article IX, Pfizer agrees to defend,
indemnify and hold harmless Purchaser and its Affiliates, and, if applicable,
their respective directors, officers, agents, employees, successors and assigns
from and against any and all claims, actions, causes of action, judgments,
awards, Liabilities, losses, costs or damages (collectively, a “Loss” or, the
“Losses”) arising directly from (i) any Retained Liability, (ii) any breach by
Pfizer of any of its covenants or agreements in this Agreement, (iii) any breach
of any representation or warranty of Pfizer contained in this Agreement, (iv)
any non-compliance with bulk transfer or similar Laws to the extent the
underlying obligation to the creditor is not an Assumed Liability or (v) those
Liabilities and Losses arising under subparagraphs (i) to (v) of the definition
of Excluded Environmental Liabilities.

 

(b) Purchaser acknowledges and agrees that Pfizer shall not have any liability
under any provision of this Agreement for any Loss to the extent that such Loss
relates to action taken by Purchaser or any of its Affiliates after the Closing
Date. Purchaser shall take and shall cause its Affiliates to take all
commercially reasonable steps to mitigate any Loss upon becoming aware of any
event which would reasonably be expected to, or does, give rise thereto,
including incurring costs only to the minimum extent necessary to remedy the
breach which gives rise to the Loss.

 

57

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

(c) Nothing in this Article IX shall be construed to impose Liabilities with
respect to Taxes, and no provision of this Article IX shall be interpreted as
altering the rights and responsibilities of the parties under Section 8.04.

 

9.02. Indemnification by Purchaser.

 

(a) Subject to the provisions of this Article IX, Purchaser agrees to defend,
indemnify and hold harmless Pfizer, the other Seller Corporations, their
respective Affiliates, and, if applicable, their respective directors, officers,
agents, employees, successors and assigns from and against any and all Losses
claimed or arising directly from (i) any Assumed Liability, (ii) any breach by
Purchaser of any of its covenants or agreements in this Agreement, (iii) any
breach of any representation or warranty of Purchaser contained in this
Agreement or (iv) events occurring on or after the Closing Date in connection
with the Business, the Purchased Assets, or the Shares including the use,
ownership, possession, operation or occupancy of any Facility, Leased Real
Property or Real Property, the Intellectual Property of the Business, the
Purchased Assets, or the Shares from and after the Closing Date.

 

(b) Pfizer shall take and shall cause its Affiliates to take all commercially
reasonable steps to mitigate any Loss upon becoming aware of any event which
would reasonably be expected to, or does, give rise thereto, including incurring
costs only to the minimum extent necessary to remedy the breach which gives rise
to the Loss.

 

(c) Nothing in this Article IX shall be construed to impose Liabilities with
respect to Taxes.

 

9.03. Notice of Claims.

 

(a) If any of the Persons to be indemnified under this Article IX (the
“Indemnified Party”) has suffered or incurred any Loss, the Indemnified Party
shall so notify the party from whom indemnification is sought (the “Indemnifying
Party”) promptly in writing describing such Loss, the amount or estimated amount
thereof, if known or reasonably capable of estimation, and the method of
computation of such Loss, all with reasonable particularity and containing a
reference to the provisions of this Agreement or any other agreement, instrument
or certificate delivered pursuant hereto in respect of which such Loss shall
have occurred. If any action at Law or suit in equity is instituted by or
against a third party with respect to which the Indemnified Party intends to
claim any Liability as a Loss under this Article IX, the Indemnified Party shall
promptly notify the Indemnifying Party of such action or suit and tender to the
Indemnifying Party the defense of such action or suit. A failure by the
Indemnified Party to give notice and to tender the defense of the action or suit
in a timely manner pursuant to this Section 9.03 shall not limit the obligation
of the Indemnifying Party under this Article IX, except (i) to the extent such
Indemnifying Party is prejudiced thereby, (ii) to the extent expenses are
incurred during the period in which notice was not provided, and (iii) as
provided by Section 9.05.

 

58

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

(b) Except when a notice, report or other filing must be filed immediately as
required by applicable Environmental Laws, the Indemnified Party will provide
notice and an opportunity to comment to the Indemnifying Party before the
Indemnified Party files any Required Governmental Report or any other report,
notification or filing with any Governmental Authority or third party in
connection with an event that would be reasonably likely to result in a Loss
subject to the indemnification provisions of this Article IX. In the event the
Indemnified Party is required to file a Required Governmental Report or any
other report, notification or filing immediately, the Indemnified Party will
provide simultaneous notice to the Indemnifying Party when it files such report
with the Governmental Authority.

 

9.04. Third Party Claims.

 

(a) The Indemnifying Party under this Article IX shall have the right, but not
the obligation, to conduct and control, through counsel of its choosing, any
third party claim, action, suit or proceeding (a “Third Party Claim”), and the
Indemnifying Party may compromise or settle the same, provided that the
Indemnifying Party shall give the Indemnified Party advance notice of any
proposed compromise or settlement. No Indemnified Party may compromise or settle
any Third Party Claim for which it is seeking indemnification hereunder without
the consent of the Indemnifying Party. The Indemnifying Party shall permit the
Indemnified Party to participate in, but not control, the defense of any such
action or suit through counsel chosen by the Indemnified Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnified Party.
If the Indemnifying Party elects not to control or conduct the defense or
prosecution of a Third Party Claim, the Indemnifying Party nevertheless shall
have the right to participate in the defense or prosecution of any Third Party
Claim and, at its own expense, to employ counsel of its own choosing for such
purpose.

 

(b) The parties hereto shall cooperate in the defense or prosecution of any
Third Party Claim, with such cooperation to include (i) the retention and the
provision of the Indemnifying Party records and information that are reasonably
relevant to such Third Party Claim, and (ii) the making available of employees
on a mutually convenient basis for providing additional information and
explanation of any material provided hereunder.

 

9.05. Expiration.

 

(a) Notwithstanding anything to the contrary in this Agreement, if the Closing
shall have occurred, all covenants, agreements, warranties and representations
made herein or in any certificate delivered pursuant to Exhibit A or B shall
survive the Closing. Notwithstanding the foregoing, all representations and
warranties made herein or in any certificate delivered pursuant to Exhibit A or
B, and all indemnification obligations under Sections 9.01(a)(iii) and
9.02(a)(iii) with respect to any such representation or warranty, shall
terminate and expire on, and no action or proceeding seeking damages or other
relief for breach of any thereof or for any misrepresentation or inaccuracy with
respect thereto shall be commenced after 18 months following the Closing Date,
unless prior to such time a claim for indemnification with respect thereto shall
have been made, with reasonable specificity, by written notice given under
Section 9.03.

 

59

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

(b) As to indemnification obligations under Section 9.01(a)(v) with respect to
subparagraphs (ii), (iii) and (v) of the definition of Excluded Environmental
Liabilities, such obligations shall terminate and expire on, and no action or
proceeding seeking damages, relief or indemnity with respect thereto shall be
commenced after, the third anniversary of the Closing Date, unless prior to such
date claims shall have been made against the Indemnified Party and written
notice thereof shall have been given to Pfizer under Section 9.03.

 

9.06. Certain Limitations.

 

(a) Notwithstanding the other provisions of this Article IX, Pfizer shall not
have any indemnification obligations for Losses under Section 9.01(a)(iii),
unless the aggregate amount of all such Losses exceeds $4.5 million, in which
event Pfizer shall be required to pay the amount of such Losses which exceeds
$4.5 million, but only up to a maximum amount of $90 million, except with
respect to Losses related to breaches of the representations set forth in
Section 6.02 and 6.03 of this Agreement, for which there shall be no maximum
amount.

 

(b) Notwithstanding the other provisions of this Article IX, Pfizer shall not
have any indemnification obligations for Losses under Section 9.01(a)(v) in
respect to subparagraphs (ii), (iii) and (v) of Excluded Environmental
Liabilities unless the extent of the Loss exceeds, in the aggregate, $3,000,000.

 

9.07. Losses Net of Insurance, Etc. The amount of any Loss for which
indemnification is provided under Section 9.01 or 9.02 shall be net of (i) any
amounts recovered by the Indemnified Party pursuant to any indemnification by or
indemnification agreement with any third party, (ii) any insurance proceeds or
other cash receipts or sources of reimbursement received as an offset against
such Loss (each Person named and source identified in clauses (i) and (ii), a
“Collateral Source”), and (iii) an amount equal to any tax benefit that resulted
in an actual reduction in cash payments for Taxes in the same fiscal year such
Losses were incurred by the Indemnified Party in connection therewith.
Indemnification under this Article IX shall not be available unless the
Indemnified Party first uses commercially reasonable efforts to seek recovery
from all Collateral Sources. The Indemnifying Party may require an Indemnified
Party to assign the rights to seek recovery pursuant to the preceding sentence;
provided, however, that the Indemnifying Party will then be responsible for
pursuing such claim at its own expense. If the amount to be netted hereunder
from any payment required under Sections 9.01 or 9.02 is determined after
payment by the Indemnifying Party of any amount otherwise required to be paid to
an Indemnified Party to this Article IX, the Indemnified Party shall repay to
the Indemnifying Party, promptly after such determination, any amount that the
Indemnifying Party would not have had to pay pursuant to this Article IX had
such determination been made at the time of such payment.

 

9.08. Sole Remedy/Waiver. The parties hereto acknowledge and agree that the
remedies provided for in this Agreement shall be the parties’ sole and exclusive
remedy with respect to the subject matter of this Agreement. In furtherance of
the foregoing, the parties hereby waive, to the fullest extent permitted by
applicable Law, any and all other rights, claims and causes of action (including
rights of contributions, if any) known or unknown, foreseen or unforeseen, which
exist or may arise in the future, that it may have against Pfizer, the other
Seller Corporations or any of their respective Affiliates, or Purchaser or any
of its Affiliates, as

 

60

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

the case may be, arising under or based upon any federal, state or local Law
(including any such Law relating to environmental matters or arising under or
based upon any securities Law, common Law or otherwise).

 

9.09. Indemnification Procedures for Remedial Actions.

 

(a) Pfizer shall have the right but not the obligation to conduct and control
the management of a Remedial Action at a property owned by a Conveyed Company or
included in the Purchased Assets that is subject to indemnification pursuant to
this Agreement. Pfizer must notify Purchaser, within 30 days of receipt of
notice of Purchaser’s claim for indemnification for such matter, (i) that it
intends to undertake said responsibility or (ii) that more information is needed
from Purchaser before Pfizer can reasonably determine that Purchaser’s claim is
subject to indemnification pursuant to this Agreement. Purchaser shall promptly
respond to such requests for information (to the extent such information is
reasonably available to Purchaser) and, within 30 days of receipt of such
information, Pfizer shall notify Purchaser as to whether it shall undertake the
Remedial Action. Prior to a determination by Pfizer that it will undertake a
Remedial Action pursuant to this Section 9.09, Purchaser shall take only those
actions necessary or which can reasonably be expected to be necessary to comply
with applicable Environmental Laws or address conditions that pose an immediate
and acute health risk (unless additional actions are approved by Pfizer).

 

(b) In undertaking a Remedial Action pursuant to this Section 9.09, Pfizer
shall, at its own expense, retain a qualified independent environmental
consultant, which consultant shall be subject to Purchaser’s approval (such
approval not to be unreasonably delayed or withheld). Pfizer shall consult with
Purchaser in all material aspects of the Remedial Action. Pfizer shall (i)
undertake such Remedial Action to meet the Applicable Remedial Action Standards
in a prompt and expeditious fashion, provided that Pfizer may exercise its
rights, including its due process right, to contest any requirement imposed or
determination made by a Governmental Authority with respect to the contemplated
Remedial Action; and (ii) not cause, through its own inaction, any undue delay
in obtaining written notice from the appropriate Governmental Authority that no
further investigation or remediation is necessary with respect to the matter
that is the subject of the indemnification claim to meet the Applicable Remedial
Action Standards or, if no Governmental Authority is involved in such matter, a
good faith determination from its environmental consultant that no further
investigation or remediation is required to bring the applicable property into
conformance with Applicable Remedial Action Standards. Pfizer shall comply with
all applicable Laws, including all applicable Environmental Laws, pertaining to
its performance of Remedial Action pursuant to this Section 9.09. Pfizer shall
provide copies to Purchaser of all written notices, final submissions, final
work plans, and final reports and shall give Purchaser a reasonable opportunity
given the circumstances (at Purchaser’s own expense) to comment on any
submissions Pfizer intends to deliver or submit to the appropriate Governmental
Authority prior to said submission. Purchaser may, at its own expense, hire its
own consultants, attorneys or other professionals to monitor the Remedial
Action, including any field work undertaken by Pfizer, and Purchaser shall
provide Pfizer with the results of all such monitoring. Notwithstanding the
above, Purchaser shall not take any actions that shall unreasonably interfere
with Pfizer’s performance of the Remedial Action. Pfizer shall undertake any
such work required herein in a manner designed to minimize any disruption, to
the greatest extent possible, with the conduct of operations at the Conveyed

 

61

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

Companies. Purchaser shall allow Pfizer reasonable access to conduct any of the
work contemplated herein and shall fully cooperate with Pfizer in the
performance of the Remedial Action, including providing Pfizer with reasonable
access to employees and documents as necessary.

 

(c) If Pfizer declines to undertake the performance of a Remedial Action as
provided in Section 9.09(a), Purchaser shall be entitled to undertake the
Remedial Action to meet the Applicable Remedial Action Standards. Purchaser
shall retain a qualified independent environmental consultant, which consultant
shall be subject to Pfizer’s approval (such approval not to be unreasonably
delayed or withheld). Purchaser shall promptly provide copies to Pfizer of all
notices, correspondence, draft reports, submissions, work plans, and final
reports and shall give Pfizer a reasonable opportunity (at Pfizer’s own expense)
to comment on any submissions Purchaser intends to deliver or submit to any
appropriate Governmental Agency prior to said submission. Pfizer may, at its own
expense, hire its own consultants, attorneys or other professionals to monitor
the Remedial Action, including any field work undertaken by Purchaser, and
Purchaser shall provide to Pfizer the results of all such field work.
Notwithstanding the above, Pfizer shall not take any actions that shall
unreasonably interfere with Purchaser’s performance of the Remedial Action.
Pfizer’s decision to allow Purchaser to undertake Remedial Action hereunder
shall not limit or affect Pfizer’s obligation to indemnify Purchaser for said
Remedial Action to the Applicable Remedial Action Standards as otherwise
provided in this Agreement.

 

9.10. Limitation on Indemnification for Claims for Remedial Action.
Notwithstanding anything to the contrary in this Agreement, Pfizer’s
indemnification obligations under Section 9.01 hereof in respect of subsection
(ii) of the definition of Excluded Environmental Liabilities and the matter
described on Schedule 9.11 are subject to the provisions of this Section 9.10.
Pfizer shall be responsible for the cost of such Remedial Action only to the
extent necessary to meet the least stringent, most cost-effective standard
required by applicable Environmental Laws consistent with the
industrial/commercial use of the Facility as of the Closing Date, or a standard
pursuant to applicable Environmental Laws acceptable to the relevant
Governmental Authorities making a claim for Remedial Action (the “Applicable
Remedial Action Standard”). Pfizer shall not be responsible for those costs
incurred in connection with a Remedial Action to the extent such costs are
caused by (A) a Release of Hazardous Materials in connection with Purchaser’s
operation of the Business or (B) Purchaser’s negligent, knowing or reckless
action resulting in the exacerbation of environmental conditions otherwise
subject to the indemnification pursuant to this Agreement or (C) the Purchaser’s
initiation of Remedial Action by Purchaser or at the request of a third party in
the absence of a requirement of Environmental Law after the Closing Date.

 

9.11. Certain Matter. Pfizer shall, at its sole cost and expense, conduct and
control the management of the Remedial Action with respect to the matter
described in Schedule 9.11 in the manner prescribed by Section 9.09 and 9.10
hereof. The parties agree that, with respect to such matter, any and all
notification requirements set forth in Sections 9.03(a) and 9.09(a)(i) shall be
deemed satisfied and accordingly waive any and all claims based upon the
adequacy or sufficiency of notice relating to such matter. It being understood
that in the event that Pfizer’s conduct of Remedial Action at the nearby
Diagnostics Facility caused certain Hazardous Materials currently being
remediated at that facility (collectively, “Diagnostic

 

62

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

Hazardous Materials”) to become present at the Healon Facility in violation of
applicable Environmental Laws, then Pfizer’s responsibility for Remedial Action
under this Section 9.11 shall be deemed to include the Diagnostics Hazardous
Materials as well. The parties hereby waive all notice requirements with respect
to Remedial Action conduct pursuant to the discovery, if occurring, of
Diagnostics Hazardous Materials at the Healon Facility.

 

9.12. Procedures and Limitations for Corrective Actions.

 

(a) With respect to matters covered under subparagraph (iii) of the definition
of Excluded Environmental Liabilities that are subject to indemnification
hereunder, Purchaser shall have the right, consistent with applicable
Environmental Law and subject to the limitations in this Agreement and as set
forth herein, to determine and implement the appropriate actions to correct any
failures to comply with applicable Environmental Law in effect as of the Closing
Date. Purchaser shall consult with Pfizer in all material respects in connection
with undertaking said corrective actions; shall provide Pfizer with copies of
all material correspondence submitted to and received by any governmental
authorities with respect to such matters; and shall provide Pfizer with a
reasonable opportunity to comment on any material, prior to their submissions to
governmental authorities, with respect to such matters, including corrective
action proposals.

 

(b) Without limiting the foregoing, Pfizer shall not be obligated to indemnify
Purchaser for those costs incurred in connection with the implementation of a
corrective action that are in excess of the costs that would be incurred to
achieve the minimum corrective action required to comply with applicable
Environmental Law in effect as of the Closing Date, provided, that (i) the
minimum corrective action for purposes of this section shall be sufficient to
allow Purchaser to operate the Facilities in a manner and at a level of
production that is consistent with the operations of the Facilities during the
12 month period prior to the date of this Agreement and (ii) notwithstanding the
foregoing subclause (i), Pfizer’s obligations under this Section 9.12, shall be
only up to an maximum aggregate amount in respect to all such indemnifiable
corrective action items of $5,000,000. It being understood that to the extent
that Purchaser chooses to implement a corrective action that goes beyond this
standard, including, without limitation, implementing a corrective action that
allows for an expansion in operations at a Facility or that is required to
achieve compliance with Environmental Law that does not become applicable to a
Facility until after the Closing Date, Pfizer shall not be responsible for the
additional or excess costs associated with such corrective action.

 

(c) For avoidance of doubt, corrective action contemplated by this Section 9.12
and within the meaning of the subparagraph (iii) of the definition of Excluded
Environmental Liabilities (i) shall include the emissions reduction measure(s),
if any, required to be implemented at the Groningen Facility by the competent
Governmental Authority pursuant to its review of the Groningen VOC Emissions
Study. The application of conditions and limitations of this Section 9.12 to
this subsection (c)(i) shall be without regard to the Groningen Facility’s
compliance, or the lack thereof, with those Environmental Law and Environmental
Permit requirements applicable to those emissions that are the subject of the
Groningen VOC Emissions Study at the time of the selection of the reduction
measures; and (ii) shall not include any Remedial Action.

 

63

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

9.13. No Consequential Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, NO PARTY TO THIS AGREEMENT SHALL BE LIABLE TO OR OTHERWISE
RESPONSIBLE TO ANY OTHER PARTY HERETO OR ANY AFFILIATE OF ANY OTHER PARTY HERETO
FOR CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES OR FOR DIMINUTION IN VALUE OR
LOST PROFITS THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR
BREACH HEREOF OR ANY LIABILITY RETAINED OR ASSUMED HEREUNDER.

 

ARTICLE X

TERMINATION

 

10.01. Termination. This Agreement may be terminated at any time prior to the
Closing:

 

(a) by written agreement of Purchaser and Pfizer, acting as agent for the Seller
Corporations;

 

(b) by either Purchaser or Pfizer, by giving written notice of such termination
to the other party, if the Closing shall not have occurred on or prior to
December 31, 2004 (the “Outside Date”); provided, however, that if on the
Outside Date the condition to Closing set forth in Section 5.01(b) shall not
have been satisfied but all other conditions to Closing shall be satisfied or
shall be capable of being satisfied upon satisfaction of the condition to
Closing set forth in Section 5.01(b), then the Outside Date shall be extended to
March 31, 2005 if Parent or Pfizer notifies the other on or prior to December
31, 2004 of its election to extend the Outside Date to March 31, 2005; provided,
further, that the right to terminate this Agreement under this Section 10.01(b)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the primary cause of, or resulted in, the failure
of the Closing to have occurred on or before such date;

 

(c) by either Purchaser or Pfizer if any court of competent jurisdiction or
other competent Governmental Authority of the United States of America, the
United Kingdom, Germany, Italy, Spain, Sweden or the Netherlands shall have
issued a Governmental Order or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such Governmental Order or other action shall have become final
and non-appealable; or

 

(d) by Pfizer, by giving five (5) Business Days prior written notice of such
termination to Purchaser at any time subsequent to September 30, 2004, if the
Closing shall not have occurred on or prior to the date of Pfizer’s notification
solely as a result of the non-satisfaction of Section 5.01(a) or Section 5.01(b)
hereof and Pfizer reasonably and in good faith believes, after consulting with
counsel, that there is a reasonable likelihood that Purchaser and Pfizer will
not be able to satisfy the conditions set forth in Section 5.01(a) and Section
5.01(b) hereof prior to the Outside Date.

 

64

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

10.02. Effect of Termination.

 

(a) If this Agreement is terminated in accordance with Section 10.01, this
Agreement shall thereafter become null and void and have no effect, and no party
hereto shall have any liability to the other party hereto or their respective
Affiliates, directors, officers or employees, except for the obligations of the
parties hereto contained in this Section 10.02 and in Sections 8.01(a)
(“Information and Documents”), 11.01 (“Notices”), 11.07 (“Public Disclosure”),
11.08 (“Return of Information”), 11.09 (“Expenses”) and 11.11 (“Governing Law;
Jurisdiction”) hereof, and except that nothing herein will relieve any party
from Liability for any breach of any covenant set forth in this Agreement prior
to such termination.

 

(b) If this Agreement is terminated and at such time any party is in material
breach of or default under any term or provision hereof, such termination shall
be without prejudice to, and shall not affect, any and all rights to damages
that the other party may have hereunder or otherwise under applicable Law. The
damages recoverable by the non-defaulting party shall include all attorneys’
fees reasonably incurred by such party in connection with the transactions
contemplated hereby.

 

(c) If this Agreement is terminated pursuant to Section 10.01(d), then Pfizer
shall reimburse Purchaser for all of Purchaser’s reasonable out-of-pocket
expenses, up to an aggregate maximum amount of $5,000,000, incurred in
connection with the transactions contemplated hereby through the period up to
and including the date upon which the termination occurs, such amount to be
payable by wire transfer of immediately available funds promptly following
Pfizer’s receipt of adequate documentation of such expenses.

 

(d) If this Agreement is terminated in accordance with Section 10.01, (i)
Purchaser agrees that the prohibition in the Confidentiality Agreement
restricting Purchaser’s ability to solicit any Employee to join the employ of
Purchaser or any of its Affiliates shall be extended to a period of 1 year from
the date of termination of this Agreement, and (ii) Pfizer agrees that the
prohibition in Section 8.09(b) restricting Pfizer’s ability to solicit any
Employee to join the employ of Pfizer or any of its Affiliates shall be extended
to a period of 1 year from the date of termination of this Agreement.

 

ARTICLE XI

MISCELLANEOUS

 

11.01. Notices. All notices or other communications hereunder shall be deemed to
have been duly given and made if in writing and if served by personal delivery
upon the party for whom it is intended, if delivered by registered or certified
mail, return receipt requested, or by a national courier service, or if sent by
facsimile,

 

65

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

provided that the facsimile is promptly confirmed by telephone confirmation
thereof, to the Person at the address set forth below, or such other address as
may be designated in writing hereafter, in the same manner, by such Person:

 

To any Seller Corporation:

 

Pfizer Inc.

235 East 42nd Street

New York, NY 10017

Telephone: (212) 733-4935

Facsimile: (212) 808-8924

Attn: David Reid, Esq.

Special Legal Advisor

 

with a copy (which shall not constitute notice) to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Telephone: 212-310-8702

Facsimile: 212-310-8007

Attn: Raymond O. Gietz, Esq.

 

To Purchaser:

 

Advanced Medical Optics, Inc.

1700 E. St. Andrew Place

Santa Ana, California 92799

Telephone: (714) 247-8200

Facsimile: (714) 247-8679

Attn: General Counsel

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue

Los Angeles, California 90071

Telephone: (213) 687-5000

Facsimile: (213) 687-5600

Attn: Brian J. McCarthy, Esq.

 

11.02. Amendment; Waiver. Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Purchaser and Pfizer, or in the case of a waiver,
by the party against whom the waiver is to be effective. No failure or delay by
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.

 

11.03. Assignment. No party to this Agreement may assign any of its rights or
obligations under this Agreement including by sale of stock, operation of Law in
connection with

 

66

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

a merger or sale of all or substantially all of the assets of such party without
the prior written consent of the other party hereto, except that Purchaser may
without such consent assign its rights to purchase the Shares and the Purchased
Assets hereunder to one or more of its Affiliates; provided, however, that no
such assignment by Purchaser shall relieve Purchaser of any of its obligations
hereunder.

 

11.04. Entire Agreement. This Agreement (including all Schedules and Exhibits
hereto) contains the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, except for (i)
the Confidentiality Agreement which will remain in full force and effect for the
term provided for therein and (ii) any written agreement of the parties that
expressly provides that it is not superseded by this Agreement.

 

11.05. Fulfillment of Obligations; Cooperation.

 

(a) Any obligation of any party to any other party under this Agreement, which
obligation is performed, satisfied or fulfilled by an Affiliate of such party,
shall be deemed to have been performed, satisfied or fulfilled by such party.

 

(b) On or after the Closing Date, the parties shall, on request, cooperate with
one another by furnishing any additional information, executing and delivering
any additional documents and instruments, including contract assignments, and
doing any and all such other things as may be reasonably required by the parties
or their counsel to consummate or otherwise implement the transactions
contemplated by this Agreement.

 

(c) Pfizer agrees to execute transfer documents for all Intellectual Property
rights, in a recordable form provided by Purchaser for each jurisdiction where
such property is registered, at, or as soon as practicable following, Closing.
Pfizer shall have the continuing obligation after Closing, with its reasonable
out-of-pocket expenses to be reimbursed by Purchaser, to use commercially
reasonable efforts to cooperate with Purchaser in the registration of the
transfers for, and/or in the enforcement of, and/or maintenance of any
Intellectual Property rights after Closing until such transfers are completed
pursuant to the requirements of each jurisdiction. Following Closing, Purchaser
shall pay the expenses of preparing and recording such transfers, to the extent
they have not been provided at Closing.

 

(d) Prior to the Closing, Pfizer will provide to Purchaser access and
cooperation as described in Schedule 11.05(d).

 

11.06. Parties in Interest. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. Except as expressly provided in Article IX hereof, nothing in this
Agreement or the Ancillary Agreements, express or implied, is intended to confer
upon any Person other than Purchaser or Pfizer, or their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement or the
Ancillary Agreements.

 

11.07. Public Disclosure. Notwithstanding anything to the contrary in this
Agreement, each party to this Agreement hereby agrees with the other party
hereto that, except as may be required to comply with the requirements of any
applicable Laws, and the rules and

 

67

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

regulations of each stock exchange upon which the securities of one of the
parties is listed, if any, no press release or similar public announcement or
communication shall, if prior to the Closing, be made or caused to be made
concerning the execution or performance of this Agreement unless the parties
shall have consulted in advance with respect thereto.

 

11.08. Return of Information. If for any reason whatsoever the transactions
contemplated by this Agreement are not consummated, Purchaser shall promptly
return to Pfizer all books and records furnished by Pfizer, any other Seller
Corporation, any Conveyed Company or any of their respective Affiliates, agents,
employees or representatives (including all copies, summaries and abstracts, if
any, thereof) in accordance with the terms of the Confidentiality Agreement.

 

11.09. Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated by this Agreement are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the party incurring such
expenses. Notwithstanding the foregoing and Section 8.04(b), all Taxes
(including any value added taxes but excluding any Income Taxes or any interest,
penalties, surtax or other similar Tax imposed with respect to such Income
Taxes) and fees (including notarial fees) incurred solely as a result of the
transfer of the Shares and the Purchased Assets shall be paid by the Person
liable therefor, but the Liability for such Taxes and fees as between Pfizer and
Purchaser shall be borne as follows: (a) in respect of any such Taxes and fees
that are refundable or in respect of which a credit is, or becomes, available,
by Purchaser and (b) in respect of any other such Taxes or fees not falling
within subclause (a) above, equally by Pfizer, on the one hand, and Purchaser,
on the other hand; provided, however, that (i) if any such Tax or any other Tax
or fee from which there otherwise could have been a refund or a credit becomes
payable or non-refundable as a result of Purchaser’s failing to register or
become liable for such Tax or fee, such Tax or fee shall be borne solely by
Purchaser, (ii) the parties acknowledge that no Dutch or Swedish value-added Tax
will be charged on the transfer of the Shares and (iii) the sale of real
property taking place as part of the Healon Business Dropdown shall be governed
by the Real Property Sale Agreement (attached as Exhibit I hereto). Each party
shall use reasonable efforts to obtain any available exemption from, or recovery
or refund with respect to any assessment of, transfer taxes and to cooperate
with the other party in providing any information or documentation that may be
necessary to obtain such exemption or recovery. Pfizer or Purchaser, as the case
may be, shall on demand reimburse the other for its share of any such Taxes or
fees paid by the other in accordance with this Section 11.09.

 

11.10. Schedules. Pfizer shall have the right to amend or supplement, within 20
days after the date of this Agreement, Schedules 2.02(h), 6.03(b)(ii), 6.07,
6.10(c), 6.12(a), 6.13(b), 6.14(c), 6.17(g)(i), 6.17(g)(ii), 6.17(h) and 6.20 to
reflect disclosures required by differences in the relevant sections between the
draft of this Agreement (entitled “Bid Form Agreement”) and this Agreement;
provided, however, that with respect to Schedules 6.17(g)(i), 6.17(g)(ii) and
6.17(h), Pfizer shall only have the right to amend or supplement such Schedules
within 10 days after the date of this Agreement. The disclosure of any matter in
any Schedule to this Agreement, as may be amended or supplemented prior to the
Closing, shall be deemed to be a disclosure for all purposes of this Agreement,
but shall not be deemed to constitute an admission by Pfizer or Purchaser, or to
otherwise imply, that any such matter is material for the purposes of this
Agreement.

 

68

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

11.11. Governing Law; Jurisdiction.

 

(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law rules of
such state.

 

(b) With respect to any suit, action or proceeding relating to this Agreement
(each, a “Proceeding”), each party hereto irrevocably (i) agrees and consents to
be subject to the jurisdiction of the United States District Court for the
Southern District of New York or any New York State court sitting in New York
City and (ii) waives any objection which it may have at any time to the laying
of venue of any Proceeding brought in any such court, waives any claim that such
Proceeding has been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceeding, that such court does not have
any jurisdiction over such party. Purchaser hereby irrevocably designates,
appoints and empowers CT Corporation System, with offices located in New York,
New York, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf service of any legal process, summons notices
and documents which may be served in any such Proceeding. If for any reason CT
Corporation System is unable or unwilling to continue to act as such designee,
appointee and agent, Purchaser agrees to immediately appoint a successor
designee, appointee and agent in New York City acceptable to Pfizer.

 

11.12. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other party, it
being understood that both parties need not sign the same counterpart.

 

11.13. Headings. The heading references herein and the table of contents hereto
are for convenience purposes only, do not constitute a part of this Agreement
and shall not be deemed to limit or affect any of the provisions hereof.

 

11.14. Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any term or other
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid, illegal or unenforceable, (i) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (ii) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity, illegality or unenforceability, nor shall
such invalidity, illegality or unenforceability affect the validity or
enforceability of such provision, or the application thereof, in any other
jurisdiction.

 

[Signature page follows]

 

69

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

IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be
executed as of the date first written above.

 

PFIZER INC.

By:

 

    /s/ DAVID L. SHEDLARZ

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

   

Name:

   

Title:

ADVANCED MEDICAL OPTICS, INC.

By:

 

    /s/ RICHARD A. MEIER

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

   

Name: Richard A. Meier

   

Title:   EVP & CFO

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

[Exhibits and Schedules Intentionally Omitted]