Exhibit 4.6


 


AGREEMENT FOR PURCHASE AND
SALE OF STOCK OF


 


EON LABS, INC.


 


by and between


 


NOVARTIS CORPORATION,


 


as PURCHASER,


 


SANTO HOLDING (DEUTSCHLAND)
GMBH,


 


as SELLER,


 


 


 


AND, FOR THE PURPOSES OF SECTION 12
ONLY, NOVARTIS AG


 


Dated as of February 20,
2005


 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
  Index of Defined Terms

  	
  iii

  
	
  Recitals

  	
  1

  
	
   

  	
   

  
	
  1.

  	
  Purchase and Sale of Stock

  	
  2

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Purchase Price; Payment

  	
  2

  
	
   

  	
  2.1

  	
  Purchase Price

  	
  2

  
	
   

  	
  2.2

  	
  Payment

  	
  2

  
	
   

  	
  2.3

  	
  Interest

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Closing; Closing Date

  	
  2

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and Warranties of Seller

  	
  2

  
	
   

  	
  4.1

  	
  Capacity of Seller

  	
  3

  
	
   

  	
  4.2

  	
  Ownership of the Stock

  	
  3

  
	
   

  	
  4.3

  	
  Authorization of Agreement

  	
  3

  
	
   

  	
  4.4

  	
  Non-Contravention

  	
  3

  
	
   

  	
  4.5

  	
  Approvals and Consents

  	
  4

  
	
   

  	
  4.6

  	
  Certain Representations Relating to the
  Company

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Representations and Warranties of Purchaser
  and Parent

  	
  4

  
	
   

  	
  5.1

  	
  Capacity of Purchaser

  	
  4

  
	
   

  	
  5.2

  	
  Authorization of Agreement

  	
  5

  
	
   

  	
  5.3

  	
  Non-Contravention

  	
  5

  
	
   

  	
  5.4

  	
  Approvals and Consents

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Additional Covenants of Seller and
  Purchaser

  	
  5

  
	
   

  	
  6.1

  	
  Covenants of Seller Prior to Closing

  	
  5

  
	
   

  	
  6.2

  	
  Deliveries at Closing

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Best Efforts

  	
  6

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Conditions to Obligations of Purchaser

  	
  7

  
	
   

  	
  8.1

  	
  Representations and Warranties of Seller to
  be True; Compliance with Covenants

  	
  7

  
	
   

  	
  8.2

  	
  Hexal Purchase Agreement; Company Merger
  Agreement

  	
  7

  
	
   

  	
  8.3

  	
  Consents; No Impediments

  	
  7

  
	
   

  	
  8.4

  	
  No Injunction

  	
  8

  
	
   

  	
  8.5

  	
  Deliveries

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Conditions to Obligations of Seller

  	
  8

  
	
   

  	
  9.1

  	
  Representations and Warranties of Purchaser
  and Parent to be True; Compliance with Covenants

  	
  8

  



 


i

















 


	
   

  	
  9.2

  	
  No Injunction

  	
  8

  
	
   

  	
  9.3

  	
  Deliveries

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Indemnification.

  	
  8

  
	
   

  	
  10.1

  	
  Exclusion of Statutory Law

  	
  8

  
	
   

  	
  10.2

  	
  Indemnification by Seller

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  General Provisions

  	
  9

  
	
   

  	
  11.1

  	
  Termination

  	
  9

  
	
   

  	
  11.2

  	
  Effect of Termination

  	
  10

  
	
   

  	
  11.3

  	
  Amendment of Agreement

  	
  10

  
	
   

  	
  11.4

  	
  Contents of Agreement; Integration; Parties
  in Interest; Assignment, etc.

  	
  10

  
	
   

  	
  11.5

  	
  Governing Law; Jurisdiction

  	
  10

  
	
   

  	
  11.6

  	
  Severability

  	
  10

  
	
   

  	
  11.7

  	
  Notices

  	
  11

  
	
   

  	
  11.8

  	
  Counterparts

  	
  11

  
	
   

  	
  11.9

  	
  Expenses

  	
  12

  
	
   

  	
  11.10

  	
  No Third Party Beneficiaries

  	
  12

  
	
   

  	
  11.11

  	
  Language

  	
  12

  
	
   

  	
  11.12

  	
  Assignment

  	
  12

  
	
   

  	
  11.13

  	
  Headings

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Obligation of Controlling Shareholder

  	
  12

  



 


ii

















 


INDEX


 


	
  Agreement

  	
  Forepart

  
	
  Closing

  	
  3

  
	
  Closing Date

  	
  3

  
	
  Common Stock

  	
  Recitals

  
	
  Company

  	
  Recitals

  
	
  Company Merger Agreement

  	
  Recitals

  
	
  Company Reports

  	
  4.6(b)

  
	
  HSR

  	
  5.4

  
	
  Hexal Purchase Agreement

  	
  Recitals

  
	
  Organizational Documents

  	
  4.4

  
	
  Parent

  	
  Forepart

  
	
  Parties

  	
  Forepart

  
	
  Party

  	
  Forepart

  
	
  Purchase Price

  	
  2.1

  
	
  Purchaser

  	
  Forepart

  
	
  Purchaser Indemnified Parties

  	
  10.1

  
	
  Seller

  	
  Forepart

  
	
  Shares

  	
  Recitals

  



 


iii

















 


AGREEMENT FOR
PURCHASE AND SALE OF STOCK


 


THIS AGREEMENT FOR PURCHASE AND SALE OF STOCK (this “Agreement”) dated
as of February 20, 2005 is executed by and between:


 


Novartis
Corporation, a company organized under the laws of the State of New York (“Purchaser”)
with its principal office located at 608 Fifth Avenue, New York, NY 10020 USA;


 


Santo Holding
(Deutschland) GmbH, a limited liability company organized under the laws of
Germany, with its principal office located at Königstrasse 1A, 70173 Stuttgart
(Germany) (“Seller”); and


 


for the
purposes of Section 12 only, Novartis AG, a company organized under the
laws of Switzerland (“Parent”) with its principal office located at
Lichtstrasse 35, Basel, Switzerland.


 


Purchaser,
Seller and Parent are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.” 


 


RECITALS


 


WHEREAS, Seller owns 60,000,000 (sixty 
million) shares of common stock, par value $ 0.01 (“Common Stock”), of
Eon Labs, Inc., a corporation organized under the laws of the State of
Delaware (the “Company”) with its principal office at 199 Marcus Avenue, Lake
Success, NY 11042 USA, which represents approximately 67.5% of the issued and
outstanding capital stock of the Company; and


 


WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, all of the shares of Common Stock owned by Seller and all
other rights relating thereto (the “Shares”) upon the terms and conditions
hereinafter set forth;


 


WHEREAS, simultaneously with the execution hereof, an affiliate of
Parent is entering into an Agreement and Plan of Merger with the Company
providing for the purchase by Purchaser (or an affiliate thereof) of the
remaining shares of Common Stock not owned by Seller at a price per share of
Common Stock equal to U.S. $31.00 (thirty one U.S. dollars on the terms and
subject to the conditions set forth therein (the “Company Merger Agreement”);


 


WHEREAS, simultaneously with the execution hereof, Novartis
(Deutschland) GmbH, Obere Turnstrasse 8-10, D-90327 Nürnberg (Germany) is
entering into a Share and Partnership Interest Sale and Transfer Agreement
(Notarial Deed of [February 16/17, 2005, Allg. Prot. 2005/1 of the notary
public Prof. Dr. Daniel Staehelin, Basel with Dr. Andreas Strüngmann,
Mrs. Susan Strüngmann, Mrs. Nicole Strüngmann und Mr. Florian
Strüngmann, all [Address Redacted], Dr. Thomas Strüngmann, Mrs. Cornelia
Strüngmann, Mr. Fabian Strüngmann, Mrs. Janina Strüngmann, Mrs. Fiona
Strüngmann, and Mr. Felix Strüngmann, all [Address Redacted], relating to
the acquisition by Purchaser of shares in A+T


 


1

















 


Vermögensverwaltung GmbH as well as partnership interests in A+T
Holding GmbH & Co. KG, on the terms and subject to the conditions set
forth therein (the “Hexal Purchase Agreement”);


 


NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants hereinafter set forth, intending to be legally bound, the Parties
agree as follows:


 


1.                                       Purchase
and Sale of Stock.


 


Subject to the terms and conditions of this Agreement, at Closing (as
defined below), (a) Seller shall sell, transfer, assign and deliver the
Shares to Purchaser (or its designee); and (b) Purchaser (or its designee)
shall purchase the Shares from Seller.


 


2.                                       Purchase
Price; Payment.


 


2.1                                 Purchase
Price.


 


The purchase price for the Shares (the “Purchase Price”) shall be €
1.300.000.000 (Euro one billion three hundred million).


 


2.2                                 Payment.


 


At Closing, Purchaser (or its designee) shall pay to Seller the
Purchase Price in immediately available Euro by wire transfer to such account
as designated by Seller, which designation shall occur at least three (3) business
days prior to the Closing Date (as defined below).


 


2.3                               Interest.


 


The Purchase
Price shall bear interest per annum as from January 1st , 2005
until the date of payment based on three months EURIBOR (Euro Interbank
Offering Rate) as of the Closing Date plus one percent. Any interest shall be
due and payable together with the principal amount to which it relates.




3.                                       Closing;
Closing Date.


 


Unless otherwise agreed to by Purchaser and Seller, the closing (“Closing”)
of the purchase and sale of the Shares shall take place within 10 (ten)
business days following the date on which all of the conditions to Closing set
forth in Sections 8 and 9 hereto (other than closing deliveries) shall have
been satisfied or waived (such date, the “Closing Date”).


 


4.                                       Representations
and Warranties of Seller.


 


Seller represents and warrants to Purchaser and Parent as follows:


 


2

















 


4.1                                 Capacity
of Seller.


 


Seller is a limited liability company duly organized and validly
existing under the laws of Germany, with full power, authority and capacity to (a) own
and hold the Shares; and (b) enter into, deliver and perform all of its
obligations under this Agreement.


 


4.2                                 Ownership
of the Stock.


 


All of the Shares have been duly authorized and validly issued, and are
fully paid up, and are owned by Seller free and clear of any and all
encumbrances or third party rights of any kind. 
There is no outstanding obligation on the part of Seller to make any
additional contributions to the share capital of the Company.  There are no outstanding options, warrants or
other rights of any kind, including any right of conversion, pre-emption or
right of first refusal entitling any person to acquire from Seller any
Shares.  No proxy has been given,
appointed or granted which is still effective with respect to any of the
Shares, and Seller has sole power of disposition with respect to the Shares.  Upon delivery of the certificates for the
Shares at the Closing as provided herein, Seller will transfer to Purchaser
valid title to the Shares, free and clear of any liens, security interests,
pledges or encumbrances of any kind.


 


4.3                                 Authorization
of Agreement.


 


Seller has taken all necessary action on its part to authorize the
execution and delivery of this Agreement and the performance of its obligations
hereunder, and this Agreement is a valid and binding agreement and obligation
of Seller enforceable against Seller in accordance with its terms.


 


4.4                                 Non-Contravention.


 


Neither the execution, delivery or performance of this Agreement by
Seller, nor the consummation by it of the transactions contemplated hereby,
shall constitute a violation of or permit the termination of, or create, or
cause the acceleration of the maturity of any debt, obligation or liability of
Seller or result in the creation or imposition of any security interest, lien,
or other encumbrance upon any of the Shares under:  (a) any term or provision of the charter
documents or other similar organizational documents (the “Organizational
Documents” ) of Seller; (b) any loan, note or other agreements of Seller
with third parties; (c) any statute or law applicable to Seller; or (d) any
order, arbitration award, judgment or decree by which Seller is bound, nor
shall it result in a default under any provision, term or condition of any
understanding, arrangement, agreement or other instrument or commitment or
order of any court to which Seller is a party or by which Seller is bound,
which in any such case would adversely affect the value of the Shares or the
ability of Seller to fulfill its obligations under this Agreement.


 


3

















 


4.5                                 Approvals
and Consents.


 


No approvals or consents of, or applications or notices to, third
persons or entities are necessary for the lawful consummation by Seller of the
transactions contemplated by this Agreement.


 


4.6                                 Certain
Representations Relating to the Company.


 


To Seller’s best knowledge (nach bestem Wissen):


 


(a)                                  The representations and
warranties made by the Company in the Company Merger Agreement that are
qualified by materiality or material adverse effect (or words of similar
effect) are true and correct, and the representations and warranties made by
the Company in the Company Merger Agreement that are not qualified by
materiality or material adverse effect (or words of similar effect) are true
and correct in all material respects.


 


(b)                                 The Company has filed with the
U.S. Securities and Exchange Commission all reports required to be so filed
(the “Company Reports”), and the Company Reports (including the financial
statements included or incorporated therein) comply in all material respects
with the applicable requirements of the U.S. securities laws and with
applicable accounting standards and, as of their respective dates (or, if
amended, as of the date of such amendment), did not contain any untrue
statement of a material fact or material omission.


 


(c)                                  The financial statements
included or incorporated in the Company Reports fairly present, in all material
respects, the consolidated financial position and results of operations of the
Company and its subsidiaries as of their respective dates in accordance with
U.S. generally accepted accounting principles consistently applied during the
periods involved (except as may be noted therein).


 


(d)                                 Since December 31, 2003,
except as disclosed in the Company Reports filed prior to the date hereof, (i) the
Company has conducted its business only in the ordinary course and has not engaged
in any material transaction other than in the ordinary course, and (ii) there
has not been any event, occurrence, discovery or development which would,
individually or in the aggregate, reasonably be expected to result in a
material adverse effect on the business, financial condition or results of
operations of the Company.


 


5.                                       Representations
and Warranties of Purchaser and Parent.


 


Each of Purchaser and Parent represents and warrants to Seller as
follows:


 


5.1                                 Capacity
of Purchaser.


 


It is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and has full
corporate power and authority to enter into, deliver and perform all of its
obligations under this Agreement.


 


4

















 


5.2                                 Authorization
of Agreement.


 


It has taken all necessary corporate action on its part to authorize
the execution and delivery of this Agreement and the performance of its
obligations hereunder, and this Agreement is a valid and binding agreement and
obligation of it, enforceable against it in accordance with its terms.


 


5.3                                 Non-Contravention.


 


Neither the execution, delivery or performance of this Agreement by it,
nor the consummation by Purchaser of the transactions contemplated hereby,
shall constitute a violation of or permit the termination of, or create, or
cause the acceleration of the maturity of any debt, obligation or liability of
it under: (a) its Organizational Documents; (b) any loan, note or
other agreements of it with third parties; (c) any statute or law
applicable to it; or (d) any order, arbitration award, judgment or decree
by which it is bound, nor shall it result in a default under any provision,
term or condition of any understanding, arrangement, agreement or other
instrument or commitment or order of any court to which it is a party or by
which it is bound which in any such case would adversely affect its ability to
fulfill its obligations under this Agreement.


 


5.4                                 Approvals
and Consents.


 


No approvals or consents of, or applications or notices to, third
persons or entities are necessary for the lawful consummation by Purchaser of
the transactions contemplated by this Agreement other than pursuant to the Hart
Scott Rodino Antitrust Improvements Act of 1976, as amended and the regulations
promulgated thereunder terminated (the “HSR Act”).


 


6.                                       Additional
Covenants of Seller and Purchaser.


 


Seller covenants and agrees with Purchaser and Parent, until Closing,
as follows:


 


6.1                                 Covenants
of Seller Prior to Closing.


 


(a)                                  Seller shall not: (i) sell,
assign or otherwise dispose of, or pledge, subject to lien or otherwise
encumber any of the Shares; (ii) grant any proxies or powers of attorney,
deposit any securities of the Company into a voting trust or enter into a voting
agreement with respect to any securities of the Company, or any interest in any
of the Shares, except with or to Purchaser (or its designee); (iii) take
any action that would make any representation or warranty, contained herein,
untrue or incorrect; or (iv) agree to do any of the foregoing.


 


(b)                                 Seller shall use its best
efforts (nach besten Kräften bemühen) to cause
the Company to operate diligently in the ordinary course of business,
consistent with past practice, and shall cause the Company to fulfill its
covenants and obligations under the Company Merger Agreement.  Without limiting the foregoing, specifically,
Seller shall use best efforts (nach besten Kräften
bemühen) to cause the Company not to:


 


5

















 


(i)                                    modify
or amend its Organizational Documents in any way that would or would be
reasonably expected to adversely affect the consummation of the transactions contemplated
by this Agreement including the timing therefor;


 


(ii)                                 incur
any indebtedness for borrowed money that cannot be repaid or retired within 30
(thirty) days at no penalty;


 


(iii)                              (1) 
declare, set aside or pay any dividends on, or make any other distributions in
respect of, any of its capital stock, other than dividends and distributions by
any subsidiary of the Company to the Company; (2) split, combine or
reclassify any of its capital stock, or issue or authorize the issuance of any
other securities, including in respect of, in lieu of or in substitution for
shares of its capital stock; (3) purchase, redeem or otherwise acquire any
shares of its capital stock or any rights, warrants or options to acquire any
such shares or other securities; or (4) take any action to transfer value
from the Company to Seller or its other affiliates;


 


(iv)                             extend,
modify, terminate, amend or enter into any contract with any affiliate of the
Company, except pursuant to intercompany transactions in the ordinary course;
or


 


(v)                                authorize
or commit to do or agree to take, whether in writing or otherwise, any of the
foregoing actions.


 


(c)                                  Seller shall cause Dr. Thomas
Strüngmann to remain in his current position as an officer of the Company
through the Closing.


 


(d)                                 Seller shall inform Purchaser
and Parent promptly if it learns of any event, fact or circumstance, including
a breach of one or more of its representations and warranties, that may result
in one or more conditions to Purchaser’s and Parent’s obligations to effect the
Closing not being satisfied.


 


6.2                                 Deliveries
at Closing.


 


(a)                                  At the Closing, Seller shall
deliver, or cause to be delivered, to Purchaser (or its designee) the
certificates representing the Shares duly endorsed in the name of Purchaser (or
its designee), free and clear of all options, liens, claims, charges,
restrictions and other encumbrances of any nature whatsoever; and


 


(b)                                 At the Closing, Purchaser shall,
or shall cause one or more of its affiliates to, deliver the Purchase Price to
Seller, as provided in Section 2


 


7.                                       Best
Efforts.


 


Seller and Purchaser each hereby agree that they will cooperate and use
their respective best efforts (nach besten Kräften
bemühen) to fulfill the conditions precedent to each other party’s
obligations hereunder, including securing as promptly as practicable all
consents, approvals, waivers and authorizations required in connection with the
purchase and sale of the Shares.


 


6

















 


8.                                       Conditions
to Obligations of Purchaser.


 


The obligations of Purchaser under this Agreement shall be subject to
the satisfaction on or before the Closing Date of each of the following
conditions unless previously waived in writing by Purchaser:


 


8.1                                 Representations
and Warranties of Seller to be True; Compliance with Covenants.


 


The representations and warranties of Seller contained in this
Agreement that are qualified as to materiality or material adverse effect (or
words of similar effect) shall be true and accurate at and as of the Closing
Date as if made as of such date, and the representations and warranties that
are not qualified by materiality or material adverse effect (or words of
similar effect) shall be true and accurate in all material respects as of the
Closing Date as if made as of such date. 
Seller shall have performed and complied with, in all material respects,
all obligations and covenants required by this Agreement to be performed or
complied with by Seller prior to or on the Closing Date.


 


8.2                                 Hexal
Purchase Agreement; Company Merger Agreement.


 


The closing of the transactions contemplated by the Hexal Purchase
Agreement shall have been consummated or shall be consummated contemporaneously
with the Closing.


 


As of the Closing Date, the representations and warranties of the
Company contained in the Company Merger Agreement that are qualified as to
materiality or material adverse effect (or words of similar effect) shall be
true and accurate at and as of the Closing Date as if made as of such date, and
the representations and warranties that are not qualified by materiality or
material adverse effect (or words of similar effect) shall be true and accurate
in all material respects as of the Closing Date as if made as of such
date.  The Company shall have performed
and complied with, in all material respects, all obligations and covenants
required by the Company Merger Agreement to be performed or complied with by
the Company prior to or on the Closing Date.


 


8.3                                 Consents;
No Impediments.


 


All consents necessary to consummate the purchase and sale of the
Shares (including, without limitation, expiration of all applicable waiting
periods under the HSR Act) shall have been received in form and substance
reasonably satisfactory to Purchaser and no further consents or approval shall
be required, and no impediments shall exist, to the consummation of the transactions
contemplated by the Company Merger Agreement. 
There shall be nothing preventing the closing of the tender offer
provided for in the Company Merger Agreement from occurring contemporaneously
with the Closing.


 


7

















 


8.4                                 No
Injunction.


 


No governmental entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation, or
non-appealable judgment, decree, injunction or other order that is in effect on
the Closing Date and prohibits the consummation of the Closing.


 


8.5                                 Deliveries.


 


Purchaser shall have received the certificates representing the Shares
and all other documents required hereunder to be submitted by Seller to
Purchaser at the Closing.


 


9.                                       Conditions
to Obligations of Seller.


 


The obligations of Seller under this Agreement shall be subject to the
satisfaction on or before the Closing Date of each of the following conditions
unless previously waived in writing by Seller:


 


9.1                                 Representations
and Warranties of Purchaser and Parent to be True; Compliance with Covenants.


 


The representations and warranties of Purchaser and Parent contained
within this Agreement shall be true and accurate as of the Closing Date as if
made as of such date. Purchaser and Parent shall have performed and complied
with, in all material respects, all obligations and covenants required by this
Agreement to be performed or complied with by each of them prior to or on the
Closing Date.


 


9.2                                 No
Injunction.


 


No governmental entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation, or
non-appealable judgment, decree, injunction or other order that is in effect on
the Closing Date and prohibits the consummation of the Closing.


 


9.3                                 Deliveries.


 


Seller shall have received the Purchase Price required to be paid by
Purchaser pursuant to Section 2.


 


10.                                 Indemnification.


 


10.1                           Exclusion
of Statutory Law.


 


Seller and the Purchaser hereby expressly exclude the applicability of
Sections 434 to 453 German Civil Code (Bürgerliches Gesetzbuch,
BGB) as well as any and all statutory warranty claims there under.
Seller and the Purchaser further agree that the representations and warranties
made by Seller in Section 4 hereto,


 


8

















 


in particular, do not qualify as guarantees (Beschaffenheitsgarantien)
within the meaning of Sections 443, 444 German Civil Code (Bürgerliches
Gesetzbuch, BGB) and that the consequences of any breach of the
representations and warranties set forth in Section 4 hereto are
exclusively governed by the terms and conditions of this Agreement.


 


Furthermore Seller and the Purchaser confirm that the limitations to
the representations and warranties as specified in this Section 10 (and by
way of reference in the Hexal Purchase Agreement) or otherwise in this
Agreement shall form an integral part of the representations and warranties and
that the representations and warranties set forth in Section 4 hereto are
only given subject to such provisions and limitations


 


10.2                           Indemnification
by Seller.


 


Seller hereby agrees that it shall indemnify, defend and hold harmless
Parent, Purchaser, their affiliates, and their respective directors, officers,
shareholders, partners, employees and representatives and their heirs,
successors and assigns (the “Purchaser Indemnified Parties”) from, against and
in respect of any Losses incurred or suffered by or asserted against any of the
Purchaser Indemnified Parties, directly or indirectly relating to or arising
out of (a) any breach of any representation or warranty made by Seller
contained in this Agreement and (b) any breach of any covenant or
agreement of Seller contained in this Agreement, in each case (a) and (b) to
the same extent, on the same terms and conditions and subject to the same
limitations (including, without limitation, survival periods, deductibles and
caps (expressed as a percentage of the Purchase Price)) and procedures as
Purchaser and its affiliates are indemnified for such matters in the Hexal
Purchase Agreement; provided that in the event of any Loss, Seller shall be
responsible under this Agreement only for the amount of Loss equal to the total
amount of such Loss multiplied by a fraction, the numerator of which is the
number of Shares and the denominator of which is the total number of shares of
Common Stock outstanding as of immediately prior to the Closing.


 


11.                                 General
Provisions.


 


11.1                           Termination.


 


This Agreement may be terminated and the transactions contemplated by
it may be abandoned at any time prior to Closing:


 


(a)                                  by mutual written consent of
Seller and Purchaser; or


 


(b)                                 by either Seller or Purchaser on
or after December 31, 2005 if the Closing shall not have theretofore
occurred; provided, however, that the terminating party is not in material
breach of its obligations hereunder or under the Hexal Purchase Agreement.


 


9

















 


11.2                           Effect
of Termination.


 


In the event of the termination of this Agreement in accordance with Section 11.1,
this Agreement shall thereafter become void and of no further effect, and no
party hereto shall have any liability to the other party hereto or their
respective affiliates, directors, officers or employees, except that nothing in
this Section 11.2 will relieve any party from liability for any breach of
this Agreement prior to such termination, for which liability the provisions of
Articles 10 and 11 shall remain in effect in accordance with the provisions of
such Articles.


 


11.3                           Amendment
of Agreement.


 


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 each of the parties hereto, 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.  The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by applicable law.


 


11.4                           Contents
of Agreement; Integration; Parties in Interest; Assignment, etc.


 


This Agreement and the documents referred to herein set forth the
entire understanding of the Parties with respect to the subject matter
hereof.  Any previous agreements or
understandings, representations or warranties between the Parties, or
information exchanged by and regarding the subject matter hereof, are merged
into and superseded by this Agreement. 
The terms and conditions of this Agreement shall be binding upon and
inure to the benefit of and, to the extent provided herein, be enforceable by
the respective successors and assigns of the Parties.


 


11.5                           Governing
Law; Jurisdiction.


 


This Agreement shall be governed by the laws of the Federal Republic of
Germany.  The exclusive place of venue
shall be Munich.  To the extent that any
of the parties are not businessmen (Kaufleute) this
clause as to the exclusive place of venue shall only apply in the cases of Section 38
para 3 no. 2 and Section 38 para 2 German Civil Procedure Code (ZPO).


 


11.6                           Severability.


 


In the event that any portion of this Agreement shall be declared by
any court of competent jurisdiction to be invalid, illegal or unenforceable,
such portion shall be deemed severed from this Agreement and the remaining
parts hereof shall remain in full force and effect as fully as if those such
invalid, illegal or unenforceable portions had never been a part of this Agreement.


 


10

















 


11.7                           Notices.


 


Any notice that a Party is required or permitted to give pursuant to
this Agreement shall be in writing and shall be effective upon receipt.  Such notices shall be sent by facsimile to
the facsimile numbers specified below, unless notice of a change of facsimile
is given in writing, and shall be confirmed in writing, hand-delivered or sent
by public mail or private delivery service, with evidence of receipt in each
instance, to the addresses specified below unless notice of a change of address
is given in writing:


 


If to Seller:


 


Santo Holding
(Deutschland) GmbH, 

Königstrasse 1A

D-70173 Stuttgart


 


Tel. +49 711
292660

Fax +49 711 2260910


 


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


 


Dr. Thomas
Strüngmann

[Address Redacted]


 


Tel. [Redacted]

Fax. [Redacted]


 


If to Purchaser or Parent:


 


Novartis AG

General Counsel

Lichtstraße 35

4056 Basel, Schweiz

Tel.: +41 61
324 24 28

Fax.: +41 61 324 3731


 


11.8                           Counterparts.


 


This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall be considered
one and the same agreement.


 


11

















 


11.9                           Expenses.


 


Except as provided in Section 11, Purchaser and Seller shall each
pay its own taxes, costs and expenses (without limitation, costs, expenses and
fees of its investment bankers, legal counsel, accountants, financial advisors,
and other consultants and agents) in the negotiation, preparation and
implementation of this Agreement and all transactions contemplated herein.


 


11.10                     No Third
Party Beneficiaries.


 


Except as provided for herein, this Agreement shall not convey any rights
on a person not a party hereto.


 


11.11                     Language.


 


This Agreement has been executed only in the English language.


 


11.12                     Assignment.


 


Neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Party without the prior written consent of the other
Party; provided, however, that Purchaser shall have the right to assign this
Agreement and any of the rights (but not the obligations) hereunder to any
affiliate thereof.


 


11.13                     Headings.


 


The heading references herein 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.


 


12.                                 Obligation
of Controlling Shareholder.


 


Whenever in this Agreement performance of or compliance with a covenant
or obligation is expressed to be required by Purchaser, Parent shall cause
Purchaser to perform or comply with such covenant or obligation, such that any
failure of Purchaser to perform or comply with any such covenant or obligation
shall be deemed to be a breach of such covenant or obligation by Parent.


 


[Signature page follows]


 


12

















 


IN WITNESS WHEREOF, each of the Parties has
caused this Agreement to be duly executed as of the day and year first written above.


 


	
   

  	
  SANTO
  HOLDING (DEUTSCHLAND) GMBH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ WOLFGANG
  BOORBERG

  	
   

  
	
   

  	
  Wolfgang
  Boorberg

  
	
   

  	
  (Authorized
  Signatory)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOVARTIS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JÖRG
  WALTHER

  	
   

  
	
   

  	
  Jörg Walther

  
	
   

  	
  (Authorized
  Signatory)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOVARTIS AG

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ URS
  BAERLOCHER

  	
   

  
	
   

  	
  Urs
  Baerlocher

  
	
   

  	
  (Authorized
  Signatory)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JÖRG
  WALTHER

  	
   

  
	
   

  	
  Jörg Walther

  
	
   

  	
  (Authorized
  Signatory)

  



 


 


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for Purchase and Sale of Stock Signature Page]