Exhibit 4.23


 


Subscription and Underwriting Agreement


 


 


dated as of


September 27, 2002


 


 


by and between


Centerpulse
Ltd.,


 


Andreasstrasse 15


8050 Zurich, Switzerland


 


(hereinafter the “Company”)


 


and


 


UBS
AG,


 


acting through its business
group UBS Warburg


Europastrasse 1


8152 Opfikon, Switzerland


 


(hereinafter the “Global
Coordinator”)


 


and


 


InCentive
Capital AG


 


Baarerstrasse 8


6300 Zug, Switzerland


 


(hereinafter “InCentive”)


 


(InCentive and the Global
Coordinator together referred to as the “Underwriters”)


 


1

















 


WHEREAS, the Company proposes
to conduct a capital increase with a rights offering to its existing
shareholders (Kapitalerhöhung mit Bezugsangebot an die bisherigen Aktionäre)
(the “Offering”)
pursuant to which the holders (the “Existing Shareholders”) of existing shares
of the Company (the “Old Shares”), subject to applicable
securities laws, have the right to subscribe pro rata (the “Preemptive
Rights”) for 1’822’408 newly issued shares with a nominal value of
CHF 30 each (the “Offered Shares” and, together with the Old
Shares, the “Shares”) to be offered by the Company.


 


WHEREAS, InCentive is a major
shareholder of the Company, holding as of September 24, 2002, through its
wholly-owned subsidiary InCentive Investment (Jersey) Ltd. (the “Jersey
Subsidiary”) 1’173’934 shares in the Company (corresponding to 11.73
% of the Company’s registered issued share capital), call options covering
478,000 shares (corresponding to 4.78% of the Company’s registered issued share
capital), and having granted through the Jersey Subsidiary put options covering
111,000 shares (corresponding to 1.11% of the Company’s registered issued share
capital).


 


WHEREAS, InCentive is prepared
(i) to subscribe for such number of Offered Shares as correspond to its
Preemptive Rights with respect to the shares held at the close of business on
the day before the ex-Preemptive Rights Date (as defined below) (the “InCentive
Shares”) in accordance with the terms of the Offering and (ii) to
subscribe for and underwrite that portion of Offered Shares for which
Preemptive Rights are not exercised by existing shareholders or new investors
having acquired the respective Preemptive Rights (the “Remaining Offered Shares”) up
to such number of Remaining Offered Shares as correspond, together with such
number of Offered Shares for which Preemptive Rights have been exercised by
InCentive, to 1’428’571 Offered Shares being approximately 78% of the aggregate
number of Offered Shares and to a maximum aggregate underwriting commitment of
CHF 200 million, respectively.


 


WHEREAS, the Global Coordinator
is prepared (i) to subscribe for and underwrite that portion of Offered Shares
for which Preemptive Rights have been exercised by existing shareholders (except
for InCentive and its subsidiaries) and new investors having acquired
Preemptive Rights, with an undertaking to allocate such Offered Shares to the
existing shareholders (except for InCentive and its subsidiaries) and new
investors having acquired Preemptive Rights, subject to compliance with
applicable securities laws and (ii) if any Remaining Offered Shares have not
been subscribed for following InCentive’s subscription for such shares, to
subscribe for and underwrite such Remaining Offered Shares up to an amount
corresponding to 393’837 Offered Shares being approximately 22% of the
aggregate number of the Offered Shares.


 


WHEREAS, Offered Shares sold in
the United States shall be sold only in the form of restricted American
depositary shares (the “Restricted ADSs”), with each such Offered
Share represented by ten Restricted ADSs. Except as the context may otherwise
require, references herein to the “Offered Shares” shall include the Offered
Shares and Restricted ADSs.


 


WHEREAS, the Restricted ADSs
are to be issued pursuant to a restricted deposit agreement (the “Restricted
Deposit Agreement”), dated on or before the Settlement Date, among
the Company, Citibank N.A., as depositary (the “Depositary”), and the holders
from time to time of the restricted American depositary receipts (the “Restricted
ADRs”) issued by the Depositary and evidencing the Restricted ADSs.


 


WHEREAS, all sales in the
United States by UBS AG, acting through its business group UBS Warburg, will be
made through its U.S. broker-dealer affiliates (the “Selling Agents”),


 


2

















 


which shall be registered as
broker-dealers under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).


 


WHEREAS, application has been
made to list the Offered Shares on the main board of the SWX Swiss Exchange (“SWX”)
and to admit the Preemptive Rights to trading at the SWX.


 


WHEREAS, the Global Coordinator
and the Company have entered into a mandate agreement dated September 13, 2002
(the “Mandate
Agreement”).


 


WHEREAS, the Global Coordinator
and InCentive have entered into an agreement dated September 13, 2002 (the “InCentive
Agreement”) regarding certain undertakings of InCentive with respect
to the Offering.


 


WHEREAS, the Global Coordinator
will act as lead underwriter and will represent InCentive before the Company
and third parties.


 


WHEREAS, the Company has
prepared an offering and listing circular to be dated September 29, 2002 (the “Offering
Circular”) relating to the Offering and the listing of the Offered
Shares on the SWX.


 


NOW, THEREFORE, the parties
agree as follows:


 


1.               Capital Increase,
Subscription and Underwriting of Offered Shares


 


1.1                                 Resolutions
on Authorizing the Capital Increase. The Company confirms that (i)
the ordinary shareholders’ meeting held on May 17, 2002 authorized the board of
directors to issue up to 4,000,000 fully paid in registered shares (the “Authorized
Capital”) and (ii) the board of directors on September 27, 2002
approved an increase in the share capital of the Company under such Authorized
Capital from CHF 300’247’110 by CHF 54’672’240 to CHF 354’919’350 (the “Capital
Increase”) by issuing 1’822’408 Offered Shares with a nominal value
of CHF  30 (Ermächtigungsbeschluss). The
board of directors will implement the Capital Increase pursuant to Section 1.4.


 


1.2                                 Subscription
of Offered Shares. The Company agrees to issue, and each of the Global
Coordinator and InCentive, severally and not jointly, undertakes with the
Company, on the basis of the representations and warranties contained herein,
subject to the conditions stated herein and in view of the board of directors
of the Company having to resolve on the implementation of the Capital Increase
(the “Capital
Increase Resolution”) (Feststellungsbeschluss), to subscribe, on
or by October 9, 2002 (the “Capital Increase Date”), for up to such
number of Offered Shares at their nominal value and in the proportions set
forth below opposite its name, with the exact number of Offered Shares to be
subscribed for by each of the Global Coordinator and InCentive to be determined
by the Global Coordinator on behalf of the Underwriters no later 13:00 (Swiss
time) on the Last Exercise Date (as defined below), with the Global Coordinator
to subscribe for Offered Shares for which Preemptive Rights will have been
exercised by Existing Shareholders (except for InCentive and its subsidiaries)
and new investors having acquired Preemptive Rights in order to allocate such
Offered Shares to the holders of Preemptive Rights who have exercised their
Preemptive Rights and for only those Remaining Offered Shares that have not
been subscribed for following InCentive’s subscription for Remaining Offered
Shares, and to deliver the corresponding subscription forms substantially in
the form of Schedule


 


3

















 


1.2 to the notary public notarizing the
Capital Increase Resolution no later than 13:00 (Swiss time) on the Capital
Increase Date.  It is understood and agreed that InCentive’s obligation to
subscribe for Remaining Offered Shares shall be first in priority, i.e., the
Global Coordinator shall be obliged to subscribe for any Remaining Offered
Shares only if and to the extent that the Remaining Offered Shares exceed the
total number of Offered Shares underwritten by InCentive and provided that
InCentive shall have fulfilled its underwriting obligations.  In fulfilling its underwriting obligations
pursuant to this Agreement, InCentive may act through the Jersey Subsidiary.


 


 


	
  Underwriters

  	
   

  	
  Number of
  Offered

  Shares underwritten

  	
   

  	
  Approximately

  Percentage of Offered

  Shares underwritten

  	
   

  
	
  Global
  Coordinator

  	
   

  	
  393’837

  	
   

  	
  22

  	
  %

  
	
  InCentive

  	
   

  	
  1’428’571

  	
   

  	
  78

  	
  %

  
	
  Total

  	
   

  	
  1’822’408

  	
   

  	
  100

  	
  %

  



 


1.3                                Transfer of the Nominal
Amount.


 


(a)           The
Global Coordinator on behalf of the Underwriters undertakes with the Company
subject to the terms and conditions set forth herein:


 


(i)  to deposit or cause to be
deposited same day funds for value on the Capital Increase Date (as defined
below), in the total amount of CHF 54’672’240 (the “Total Nominal Amount”) with
Zürcher Kantonalbank, Postfach, CH-8010 Zurich (“ZKB”) in a blocked account
for the Capital Increase (Kapitaleinzahlungskonto)  in
favor of the Company; and


 


(ii)  to cause ZKB to issue and
deliver a written confirmation of payment of the Total Nominal Amount to the
notary public notarizing the Capital Increase Resolution no later than 13:00
(Swiss time) on the Capital Increase Date.


 


(b)  InCentive shall pay on the
Settlement Date to the Global Coordinator the nominal value of each Offered Share
subscribed for by InCentive. The Global Coordinator shall have the right to
debit InCentive’s account no. 230-P0448910.0 with UBS AG.


 


1.4                                Capital Increase Resolution.
On the Capital Increase Date, the Company’s board of directors shall
immediately upon receipt of the subscription forms:


 


(a)                         pass the Capital Increase
Resolution (Feststellungsbeschluss)
and make all amendments to the Company’s articles of association necessary in
connection with the implementation of the Capital Increase; and


 


(b)                       file the Capital Increase
Resolution along with the relevant attachments thereto with the Commercial
Register of the Canton of Zurich (the “Commercial Register”) immediately after
this meeting of the board of directors.


 


4

















 


1.5                                Use of Total Nominal Amount.
The Total Nominal Amount deposited on the blocked account for the Capital
Increase (Kapitaleinzahlungskonto)
shall, immediately following registration of the Capital Increase by the
Commercial Register, be transferred to an interest-free account of the Company
with UBS AG as follows:


 


At UBS AG,
Zurich,


bank clearing
no. 230


for the
account no. 403,736,30D of the


Company


 


The Company agrees that the Total Nominal Amount will remain deposited
and blocked with UBS AG until the earlier of (i) the Settlement Date (as
defined below), on which date such amount shall be released in accordance with
Section 4.3, or (ii) if an Event of Non-Completion (as defined below) occurs,
the date of receipt by the Underwriters of the proceeds of (a) the Capital
Reduction pursuant to Section 14.1(a) or (b) the options pursuant to Sections
14.1(b) and 14.1(c) (each the “Nominal Amount Payment Date”).


 


On the Nominal Amount Payment Date, the Total Nominal Amount deposited
with UBS AG, Zurich, for the account of the Company shall be released in same
day funds in such account as the Company may designate to UBS AG no later than
two business days prior to the Nominal Amount Payment Date.


 


1.6                                Documentation and Issue of Offered
Shares. Promptly after the registration of the Capital Increase by
the Commercial Register, but no later than on the first trading date, 08.00
(Swiss time), the Company shall:


 


(a)                        deliver to each of InCentive,
the Global Coordinator, the SWX, SIS SegaInterSettle AG, the Swiss securities
clearing corporation (“SIS”) and ShareCommServices AG, the
Company’s share register (“ShareComm”), a copy of a certified excerpt
from the Commercial Register along with a copy of the Company’s amended
articles of association evidencing the registration of the Capital Increase;
and


 


(b)                       take all steps necessary to
ensure that the Offered Shares will be (i) issued and delivered immediately
following the registration of the Capital Increase to the Global Coordinator
(ii) duly recorded with SIS and (iii) freely transferable. Accordingly, the
Company shall give the necessary instructions to SIS and ShareComm. The Global
Coordinator shall take reasonable and customary steps to assist in the
foregoing.


 


2.              The
Offering


 


2.1                                Terms of the Offering.  Holders of Preemptive Rights, except holders
of Preemptive Rights located in the United States (or in any other jurisdiction
where the exercise of the Preemptive Rights by such holders would be prohibited
by applicable law or regulation), will be entitled to purchase two (2) Offered
Shares at CHF 140 each (the “Offer Price”) for every 11 Preemptive
Rights held. Preemptive Rights will be traded on the SWX. The Shares will be
first traded ex-Preemptive Rights on October 3, 2002 (the “ex-Preemptive Rights Date”).
The trading period for the Preemptive Rights


 


5

















 


will commence
on October 3, 2002 and end on October 8, 2002, at 17:00 (Swiss time). The
exercise period (the “Exercise Period”) for the Preemptive Rights
will commence on October 3, 2002, and end on October 9, 2002 at 12:00 noon
(Swiss time) (the “Last Exercise Date”). To the extent
Preemptive Rights are not exercised prior to or on the Last Exercise Date, the
Preemptive Rights will lapse without compensation.


 


The record date for the determination of Shareholders entitled to
Preemptive Rights is October 1, 2002.


 


2.2                                Delivery and Settlement.
Delivery to and payment of the Offered Shares by the holders having exercised
Preemptive Rights shall occur on October 15, 2002.


 


2.3                                Expired Preemptive Right Claims.  The Company shall assume full liability and
shall indemnify and hold harmless the Underwriters with respect to any claims
made by the owners of expired Preemptive Rights.


 


3.              Listing


 


3.1                                The Company confirms
that it has authorized the Global Coordinator’s filing of the application for
the Offered Shares to be listed on the SWX and application for the Preemptive
Rights to be admitted to trading at the SWX. On the Capital Increase Date the
Company shall have delivered to the SWX and the Global Coordinator a letter in
the form of Schedule 3.1.


 


3.2                                The Company will
deliver to the Global Coordinator two copies of the Offering Circular duly
signed by the Company and to the SWX copies of the Offering Circular as
required by the Listing Rules of the SWX (the “SWX Listing Rules”) and will
take such other steps as may be required for the purpose of obtaining a
listing.


 


4.              Settlement


 


4.1                                Settlement Date. The time
and date of payment of the Offer Price net commission and expenses (the “Settlement”)
shall be on October 15, 2002 (the “Settlement Date”). Any documents to be
delivered at the Settlement Date by or on behalf of the parties pursuant to
Section 12 will be delivered at the offices of Cleary, Gottlieb, Steen &
Hamilton, City Place House, 55 Basinghall St., London, England, EC2V 5EH.


 


4.2                                Settlement Actions. At the
Settlement the following actions shall be taken:


 


(a)               The Global Coordinator shall pay to the
Company the aggregate Offer Price payable for each Offered Share subscribed for
by the Global Coordinator less the nominal amount for each Offered Shares
subscribed for by the Global Coordinator, less any commissions, fees and
expenses payable to the Global Coordinator or InCentive pursuant to Section 10,
less any VAT, turnover or other taxes and stock exchange levies, by crediting
same-day funds in CHF to the Company’s account with UBS AG, Zurich, clearing
no. 230, account no. 40373630D.


 


6

















 


(b)              InCentive shall pay to the Company the
aggregate Offer Price payable for each Offered Share subscribed for by
InCentive less the nominal amount for each Offered Share subscribed for by
InCentive, less any VAT, turnover or other taxes and stock exchange levies, by
crediting same-day funds in CHF to the Company’s account with UBS AG, Zurich,
clearing no. 230, account no. 40373630D.


 


(c)               InCentive shall pay to the Global
Coordinator the nominal value of each Offered Share subscribed for by InCentive
in accordance with Section 1.3(b).


 


(d)              The number of Offered Shares to be
subscribed for by each of InCentive and the Global Coordinator hereunder shall
be delivered by or on behalf of the Company to the Global Coordinator through
the facilities of SIS.


 


(e)               Subject to (i) delivery of all of the
Offered Shares to the Global Coordinator by the Company in accordance with
Section 4.2(d) above and (ii) payment of the nominal value of each Offered
Share subscribed for by InCentive to the Global Coordinator by InCentive in
accordance with Section 1.3(b), the Global Coordinator shall deliver such
number of Offered Shares subscribed for by InCentive into InCentive’s share
deposit no. 230-P0448910.1 (at UBS AG, Zurich, bank clearing no. 230).


 


4.3                                Unblocking of Company’s Account with
UBS AG. Upon payment of the amount and delivery of the Offered
Shares referred to in Section 4.2(c) above, the Global Coordinator will unblock
the account of the Company with UBS referred to in Section 1.5 and will
transfer the amounts in such account in accordance with Section 1.5 hereof.


 


5.              Representations
and Warranties of the Company


 


The Company represents and warrants to, and agrees with, each of the
Global Coordinator and InCentive as of the date hereof, the Capital Increase
Date and the Settlement Date that:


 


(a)     Disclosure. The
Offering Circular has been prepared in connection with the Offering. The
Offering Circular contains all material information with respect to the Company
and its subsidiaries (the “Group”) and the Offered Shares (including
all information which, according to the particular nature of the Company and of
the Offered Shares, is in the Company’s view necessary to enable investors to
make an informed assessment of the assets and liabilities, financial position,
profits and losses and prospects of the Company, the Group and of the rights
attaching to the Offered Shares); and the Offering Circular is and any
amendments or supplements thereto will be, as of their respective dates, true
and accurate in all material respects, and do not and will not, as of their
respective dates, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made, in light of the circumstances under which they were made, not
misleading; and the Offering Circular contains all material information
concerning any actual transactions or agreements or, to the best of the
Company’s knowledge, potential transactions or agreements, involving the
Company and/or the Group and


 


7

















 


any director, shareholder or affiliate of the
Company; provided, however, that with respect to the Global Coordinator and
InCentive the representations and warranties made in this paragraph shall not
apply to any statements or omissions in the Offering Circular relating to the
Global Coordinator or InCentive in its capacity as an underwriter made in
reliance upon and in conformity with information furnished to the Company by or
on behalf of the Global Coordinator (which information is set forth in
(Schedule 5(a).1); and provided, further, however, that with respect to
InCentive the representations and warranties made in this paragraph shall not
apply to any statements or omissions in the Offering Circular relating to made
in reliance upon and in conformity with information furnished to the Company by
or on behalf of InCentive (which information is set forth in Schedule 5(a).2);


 


(b)     Takeovers.
Although the Company is not presently negotiating any transaction with any third
party proposing to launch an offer for all or a substantial part of its Shares
and no substantiated bids have been addressed to the Company in recent weeks,
there have been approaches in the year 2002 by third parties which the Board of
Directors considered insufficient and not in the best interest of shareholders
at the time.


 


(c)    
Requirements
of the SWX. The Offering Circular contains all particulars and
information required by, and complies with, applicable legal requirements and
rules and regulations of the SWX and otherwise complies with the requirements
of Swiss law, in particular, according to Article 652a of the Swiss Code of
Obligations and all other regulations to the extent applicable to the issue of
the Offered Shares;


 


(d)     Corporate
Existence of the Company. The Company has been duly incorporated and
is validly existing as a corporation under the laws of Switzerland, has no
pending bankruptcy, composition or similar proceedings pending against it in
its jurisdiction of incorporation, is not in liquidation or receivership.  The Company has full power and authority to
own or lease and operate its properties and conduct its business as described
in the Offering Circular, and has been duly qualified as a foreign corporation
for the transaction of business under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business that requires such
qualification, or except where such fault would not have a material adverse
effect on the financial condition, business, properties, results of operations
or business prospects of the Company and its subsidiaries taken as a whole (a “Material
Adverse Effect”);


 


(e)     Corporate
Existence of Subsidiaries. Each of the Company’s subsidiaries has
been duly incorporated and is validly existing as a corporation under the laws
of its respective jurisdiction of incorporation, has no pending bankruptcy,
composition or similar proceedings pending against it in its jurisdiction of
incorporation, is not in liquidation or receivership and has full power and
authority to own or lease and operate its properties and conduct its business
as described in the Offering Circular, and has been duly qualified as a foreign
corporation for the transaction of business under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business
that requires such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; except where such fault would not have a Material Adverse Effect;


 


8

















 


(f)      Agreement. The
Company has full right, power and authority to enter into this Agreement; this
Agreement has been duly authorized, executed and delivered by the Company and
constitutes valid and legally binding obligations of the Company and is
enforceable in accordance with its terms, subject to the effect of bankruptcy,
insolvency and other similar laws relating to or affecting creditors’ rights
generally and to general equity principles, and subject to mandatory provisions
of Swiss corporate law (Articles 659, 678 and 680 of the Swiss Code of
Obligations);


 


(g)     Share
Capital. As at the date indicated in the Offering Circular, the
Company has the outstanding, authorized and conditional share capital described
therein, and all of the issued share capital of the Company has been duly and
validly authorized and issued in accordance with Swiss law and the Company’s
Articles of Incorporation, and is fully paid and non-assessable and conforms to
the description of the share capital of the Company contained in the Offering
Circular; and all of the issued share capital of each  subsidiary of the Company has been duly and validly authorized
and issued, is fully paid and non-assessable and, except for directors’
qualifying shares, if any, and except as set forth in the Offering Circular or
as provided for by the terms of the commitment from UBS AG to lend the Company
USD 635 million in the form of a credit facility (or as provided for by the
agreement for such facility) (the “Credit Facility”, is owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims except where such fault would not 
have a Material Adverse Effect; all of the shares of the Company,
including the Offered Shares, have been or will be at the date indicated in the
Offering Circular duly listed and admitted for trading on the SWX;  there are no
outstanding securities convertible into or exchangeable for, or warrants, rights
or options to purchase from the Company, or obligations of the Company to issue
any sharesor any other class of share capital of the Company (except as set
forth in the Offering Circular);


 


(h)     The Offered
Shares. The issuance of the Offered Shares will have been duly and
validly authorized on or prior to the date indicated in the Offering Circular,
and, when delivered and paid for in the manner contemplated by this Agreement
and the terms of the Preemptive Rights will have been duly and validly issued
and fully paid and non-assessable and will conform to the description of the
Offered Shares contained in the Offering Circular; there are no restrictions on
transfers of the Offered Shares pursuant to Swiss law or the Company’s articles
of association (Statuten) of the Company or otherwise, other than such as
described in the Offering Circular; the shareholders of the Company have no
further subscription, preemptive or other rights to acquire the Offer Shares
other than those described in the Offering Circular; the shareholders meeting
of May 17, 2002 has validly acted to authorize the Board of Directors of the
Company to issue the Offered Shares and the respective resolution has not been
challenged by a dissenting shareholder in court;


 


(i)      Consents. All
consents, approvals, authorizations, orders, registrations, clearances or
qualifications of or with any court or governmental agency or body or any stock
exchange authorities (the “Governmental Agency”) having jurisdiction
over the Company or any of its subsidiaries or any of their properties (the “Governmental
Authorizations”) required, for the execution and delivery by the
Company of this Agreement, for the issue or offering of the Offered Shares or
the consummation of the


 


9

















 


other transactions contemplated by this
Agreement to be duly and validly authorized have been obtained or made and are
in full force and effect;


 


(j)      Dividends.
All dividends and other distributions declared and payable on the share capital
of the Company may under the current laws and regulations of Switzerland be
paid to the shareholders of the Company in Swiss francs that may be converted
into foreign currency that may be freely transferred out of Switzerland, and
except as set forth in the Offering Circular under “Taxation”, all such
dividends and other distributions will not be subject to withholding or other
taxes under the laws and regulations of Switzerland and are otherwise free and
clear of any tax, withholding or deduction in Switzerland and without the
necessity of obtaining any Governmental Authorization in Switzerland;


 


(k)     No
Conflicts—Company. The execution and delivery of this Agreement, the
issue and sale of the Offered Shares and the use of the proceeds of the sale of
the Offered Shares as described in the Offering Circular, the consummation of
the transactions herein and therein contemplated do not, or will not on or
prior to the Capital Increase Date or on the Settlement Date, subject to
mandatory provisions of Swiss corporate law (Articles 659, 678 and 680 of the
Swiss Code of Obligations), conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, the documents
constituting the Company.  The execution
and delivery of this Agreement, the issue and sale of the Offered Shares and
the use of the proceeds of the sale of the Offered Shares as described in the
Offering Circular, the consummation of the transactions herein and therein
contemplated do not, or will not on or prior to the Capital Increase Date or on
the Settlement Date subject to mandatory provisions of Swiss corporate law
(Articles 659, 678 and 680 of the Swiss Code of Obligations), (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under any indenture, mortgage, deed of trust, lease, loan
agreement or other agreement or instrument to which the Company is a party or
by which the Company is bound or to which any of the property or assets of the
Company is subject or Swiss law or any statute or any order, rule or regulation
of any Governmental Agency having jurisdiction over the Company, or (ii)
infringe any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental body or court, domestic or foreign,
having jurisdiction over the Company or any of its properties or assets or
(iii) infringe the rules of any stock exchange on which securities of the
Company are listed, except where such conflict, breach, violation, default or
infringement would not have a Material Adverse Effect;


 


(l)      No
Conflicts—Subsidiaries. The execution and delivery of this
Agreement, the issue and sale of the Offered Shares and the use of the proceeds
of the sale of the Offered Shares as described in the Offering Circular, the
consummation of the transactions herein and therein contemplated do not, or
will not on or prior to the Capital Increase Date or on the Settlement Date,
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) the documents constituting
the Company’s subsidiaries, or (ii) any indenture, mortgage, deed of trust,
lease, loan agreement or other agreement or instrument to which any of the
Company’s subsidiaries is a party or by which any of the Company’s subsidiaries
is bound or to which any of the property or assets of the Company’s
subsidiaries is


 


10

















 


subject, except where such  breach, violation or default would not have
a Material Adverse Effect, nor will such action result in any violation of the
provisions of the Articles of Incorporation of any of the Company’s
subsidiaries, Swiss law or any statute or any order, rule or regulation of any
Governmental Agency having jurisdiction over any of the Company’s subsidiaries,
or infringe any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental body or court, domestic or foreign,
having jurisdiction over any of the properties or assets of any of the
Company’s subsidiaries or infringe the rules of any stock exchange on which
securities of any of the Company or its subsidiaries are listed, except any
such conflict, breach or default that would not  have a  Material Adverse
Effect;


 


(m)    General
Compliance. Neither the Company nor any of its subsidiaries is in
violation of its Articles of Association or other constituent documents;
neither the Company nor any of its subsidiaries is in violation, conflict or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, except any such conflict,
breach of default that would not  have
a  Material Adverse Effect;


 


(n)     No
Manipulation. Neither the Company nor any of its subsidiaries has
taken, directly or indirectly, any action which was designed to or which has constituted
or which would reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Offered Shares other than in compliance with applicable law,
including Regulation M under the Exchange Act;


 


(o)     Financial
Statements. The consolidated balance sheets, cash flow statements,
shareholders’ equity statement and income statements of the Company (including
the notes thereto) included in the Offering Circular have been prepared in
accordance with International Accounting Standards (“IAS”), with the applicable
provisions of the Swiss Code of Obligations and  reconciled with generally accepted accounting principles
consistently applied in the United States (“U.S. GAAP”) and (i) present
fairly the financial position of the Company and its subsidiaries, as at the
end of each of the relevant financial periods, and the results of operations
and changes in financial position and cashflows of the Company and its
subsidiaries for each such period; (ii) have been prepared after due and
careful inquiry by the Company and, where applicable, its subsidiaries, and on
a consistent basis with IAS and, where applicable, in the manner applicable
under U.S. GAAP, (ii) comply as to form in all material respects with the
applicable requirements of IAS and, where applicable, in the manner applicable
under U.S. GAAP and (iii) make proper provision, in accordance with IAS and,
where applicable, in the manner applicable under U.S. GAAP, for all
liabilities, whether deferred or contingent. Since December 31, 2001, other
than as disclosed in the Offering Circular, there has been no change (nor any
development  or event involving a
prospective change of which the Company is, or might reasonably be expected to
be, aware) which is or would reasonably be expected to be materially adverse to
the condition (financial or other), prospects, results of operations or general
affairs of the Company or the Group, as the case may be;


 


11

















 


(p)     Internal
Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific authorization,
and (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with IAS and to maintain accountability for
assets;


 


(q)     Ordinary
Course of Business. Neither the Company nor any of its subsidiaries
has sustained, since the date of the latest audited financial statements
included in the Offering Circular, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Offering Circular;
and, since the respective dates as of which information is given in the
Offering Circular, there has not been any change in the share capital  (other
than pursuant to the grant or exercise of preemptive rights described in the
Offering Circular) of the Company or any of its subsidiaries, or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
shareholders’ equity or prospects or results of operations of the Company and
its subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Offering Circular; the Company and its subsidiaries are not in breach of
the terms of, or in default under, any instrument, agreement or order to which
it is a party or by which it or its property is bound, except where such loss,
interferance, change or breach would not have a Material Adverse Effect;


 


(r)      Properties. The
Company and its subsidiaries have good and legal title to all real property and
good and legal title to all such other personal property and assets owned by
them, in each case free and clear of all liens, encumbrances and defects except
such as are described in the Offering Circular or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries;


 


(s)     Legal
Proceedings. Other than as set forth in the Offering Circular, there
are no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if reasonably expected to be determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect, taken as a whole, and, to the
best of the Company’s knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by others; and the
Company and its subsidiaries have no continuing liabilities with respect to the
proceedings described under “Business - Litigation” in the Offering Circular
that have not been provisioned for; and neither it nor its subsidiaries is
involved in or the subject of any current or pending investigation or
proceedings (whether administrative, regulatory or otherwise) whether in
Switzerland or elsewhere, except where such investigation or proceedings would
not have a Material Adverse Effect;


 


12

















 


(t)      Insurance
Matters. All material assets and material undertakings of the
Company and each of its subsidiaries of an insurable nature, including product
liability, are and have at all material times been adequately insured and the
Company and each of its subsidiaries are now and have at all material times
been adequately covered against accident, damage, injury, third party loss and
product liability in such amounts as are to the Company’s knowledge prudent and
customary in the business the Company and its subsidiaries are engaged; and
neither the Company nor any of its subsidiaries has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurance as may be
necessary to continue its businesses at a cost that would not have a Material
Adverse Effect;


 


(u)     Intellectual
Property. Other than as specifically described in the Offering
Circular, to the best of the Company’s knowledge, each of the Company and its
subsidiaries owns or possesses or can acquire on reasonable terms adequate
rights to use pursuant to license, sublicense, agreement or permission all
patents, patent applications, trademarks, service marks, trade names, design
rights, copyrights, trade secrets and other know-how rights, proprietary rights
and processes (in each case whether registered or unregistered and including
applications for registration) arising or subsisting anywhere in the world (“Intellectual
Property”) necessary for the operation of the business of the
Company and its subsidiaries as described in the Offering Circular. In respect
of Intellectual Property devised, developed or created by or on behalf of the
Company, which the Company desires to own, or which is used, or which the
Company expects to use, in the Company’s current or future business, or which
is necessary for the operation of the business of the Company and its
subsidiaries as described in the Offering Circular, the Company has taken all
steps necessary to secure assignments of or obtain adequate rights to use such
Intellectual Property from its employees and third party creators of that
Intellectual Property (including employees and contractors of such third party
creators, if any); to the best of the Company’s knowledge, none of the
technology or other Intellectual Property employed by or necessary for the
operation of the Company or any of its subsidiaries has been obtained or is
being used by the Company or any of its subsidiaries in violation of any law or
any contractual or fiduciary obligation binding upon the Company, any of its
subsidiaries or any of their respective directors or executive officers or any
of their respective employees or consultants, except where such violation would
not have a Material Adverse Effect. Except as specifically described in the
Offering Circular, to the best of the Company’s knowledge, neither the Company
nor any of its subsidiaries has interfered with, infringed upon,
misappropriated or violated any Intellectual Property of any third party and
the continued operation of the business of the Company and its subsidiaries as
described in the Offering Circular will not result in the same where any such
event or circumstance would have a Material Adverse Effect.  Except as specifically described in the
Offering Circular, to the best of the Company’s knowledge, the Company and its
subsidiaries have not received and do not expect to receive any charge,
complaint, claim, demand or notice alleging any such interference,
infringement, misappropriation or violation (including any claim that the
Company or any of its subsidiaries must take a license of or refrain from using
any Intellectual Property of any third party) that would have a Material
Adverse Effect, and there are no actions, suits or judicial proceedings pending
relating to Intellectual Property to which the Company or any of its
subsidiaries is subject, and no such actions, suits or judicial


 


13

















 


proceedings are threatened by Governmental
Agencies or other third parties, and the Company is unaware of any facts which
would form a reasonable basis for any such claims. Except as specifically
described in the Offering Circular, to the best of the Company’s knowledge,
there is no patent or published patent application to which the Company does
not have rights which contains claims that dominate or may dominate any
Intellectual Property described in the Offering Circular as being owned by or
licensed to the Company or that interferes with the issued or pending claims of
any such Intellectual Property.  Except
as specifically described in the Offering Circular, to the best of the
Company’s knowledge, there is and has been no infringement, interference,
misappropriation or violation by any third parties of any Intellectual Property
owned by the Company or any of its subsidiaries that would have a Material
Advise Effect.  The Company and its
subsidiaries have taken and will maintain reasonable measures to prevent the
unauthorized use dissemination or publication of its trade secrets, proprietary
information and other confidential information;


 


(v)     Employment
Matters. No material labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company, is
threatened;


 


(w)    Tax. Except
as otherwise disclosed in the Offering Circular (other than with respect to tax
on income, profits or gains from commissions, discounts or sales proceeds with
respect to the sale of Offered Shares or Restricted ADSs by any Underwriter
that is subject to income or gain tax in the ordinary course of business in
Switzerland), the Company and each of its subsidiaries has been and continues
to be in compliance with all applicable laws and regulations relating to tax,
except where its failure to be in such compliance would not have a Material
Adverse Effect; and the Company has no reason to believe that it or any of its
subsidiaries will incur any additional tax charges in respect of past tax
periods, except as disclosed in the Offering Circular; no stamp or other
issuance or transfer taxes or duties and no capital gains, withholding or other
taxes are payable by or on behalf of the Global Coordinator to Switzerland or
any political subdivision or taxing authority thereof or therein in connection
with (i) the sale and delivery by the Company of the Offered Shares or
Restricted ADSs to or for the account of the Global Coordinator, (ii)
commissions earned with respect to the sale of the Offered Shares or Restricted
ADSs or (iii) the sale and delivery by the Global Coordinator of the Offered
Shares or Restricted ADSs to the initial purchasers thereof, in each case in
accordance with the terms of this Agreement;


 


(x)     Investment
Company Act. The Company is not and, after giving effect to the
offering and sale of the Offered Shares, will not be an “investment company”
within the meaning of the U.S. Investment Company Act of 1940, as amended (the
“Investment
Company Act”);


 


(y)     Permits/Licenses/Authorizations.
Except as disclosed in the Offering Circular, the Company and each of its
subsidiaries have all licenses, franchises, permits, authorizations, approvals
and orders and other concessions of and from all Governmental Agencies that are
necessary to own or lease their properties and conduct their businesses as
described in the Offering Circular, except where such fault would not
reasonably be expected to have a Material Adverse Effect;


 


14

















 


(z)     Substantial
U.S. Market Interest. There is no substantial U.S. market interest
(within the meaning of Regulation S under the Securities Act) in the ordinary
shares of the Company, and there is not, as of the date of this Agreement,
substantial U.S. market interest (within the meaning of Regulation S under the
Securities Act) in the Preemptive Rights;


 


(aa)   Foreign
Private Issuer. The Company is a “foreign private issuer” (as such
term is defined in the rules and regulations of the Exchange Act);


 


(bb)  Directed
Selling Efforts.  Neither the Company nor any person acting on its
or their behalf has offered or sold or will offer or sell the Preemptive Rights
or the Offered Shares by means of any directed selling efforts within the
meaning of Rule 903 under the Securities Act, and the Company has complied and
will comply with the offering restriction requirements of such Rule 903; provided,
however, that the Global Coordinator, acting through its Selling
Agents, may offer and deliver Preemptive Rights and may offer and sell Offered
Shares in the United States, provided that such Offered Shares may be sold only
in the form of Restricted ADSs to persons who the Global Coordinator reasonably
believes are “qualified institutional buyers” within the meaning of Rule 144A
under the Securities Act in transactions not subject to the registration
requirements of the Securities Act who provide to it and to the Company a
letter in the form of Exhibit A hereto and that, in connection with each such
sale, the Global Coordinator has taken or will take reasonable steps to ensure
that the purchaser of such Restricted ADSs is aware that such sale is being
made in a transaction not subject to registration under the Securities Act; and


 


(cc)   General
Solicitation and General Advertising. Neither the Company nor any
person acting on its behalf has offered or sold or will offer or sell the
Preemptive Rights or the Offered Shares by any form of general solicitation or
general advertising, including but not limited to the methods described in Rule
502(c) under the Securities Act.


 


6.              Undertakings
of the Company


 


6.1                                Taxes. The Company will pay
any stamp or other issuance or transfer taxes, capital gains, withholding or
other taxes (other than tax on income, profits or gains from commissions,
discounts or sales proceeds with respect to the sale of Offered Shares or
Restricted ADSs by any Underwriter that is subject to income or gain tax in the
ordinary course of business in Switzerland) payable to Switzerland or any
political subdivision or taxing authority thereof or therein in connection with
(i) the sale and delivery by the Company of the Offered Shares or Restricted
ADSs to or for the account of the Global Coordinator, (ii) commissions earned
with respect to the sale of the Offered Shares or Restricted ADSs or (iii) the
sale and delivery by the Global Coordinator of the Offered Shares or Restricted
ADSs to the initial purchasers thereof, in each case in accordance with the
terms of this Agreement.


 


6.2                                Delivery of Offering Circular. The
Company confirms that it has prepared the Offering Circular and authorizes the
Global Coordinator to distribute copies of the Offering Circular in connection
with the Offering and undertakes to deliver to the


 


15

















 


Underwriters, without charge, on the Business Day (whereby “Business Day”
shall mean any day (other than a Saturday or Sunday) on which banks are open
for business in Zurich) following the date hereof and hereafter from time to
time as requested, such number of copies of the Offering Circular as the
Underwriters may reasonably request.


 


6.3                                Amendments to the Offering Circular.
If at any time prior to completion of the distribution of the Offered Shares or
the Settlement Date any event shall have occurred as a result of which the
Offering Circular, as then amended or supplemented, would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they are made
when such Offering Circular is delivered, not misleading in a material respect
or if for any other reason it shall be necessary to amend or supplement the
Offering Circular, the Company will notify the Underwriters, and, upon request
from the Global Coordinator, will prepare and furnish without charge to the
Underwriters as many copies as the Global Coordinator may from time to time
reasonably request of an amended Offering Circular or a supplement to the
Offering Circular which will correct such statement or omission, and will take
such steps as may be reasonably requested by the Global Coordinator to remedy
and/or publicize such amendment or supplement to the Offering Circular.


 


6.4                                Notification of Material Changes.
The Company will notify the Underwriters promptly of any material change
affecting any of its representations and warranties (including, but not limited
to, any considered, intended or actual Tender Offer it becomes aware of),
agreements and indemnities herein at any time prior to payment being made to
the Company on the Settlement Date.


 


6.5                                Listing on the SWX. In
connection with the application to list the Offered Shares on the SWX and to
admit the Preemptive Rights to trading at the SWX, the Company will furnish
from time to time any and all documents, instruments, information and
undertakings, publish all advertisements or other material that may be
necessary in order to effect such listing and admittance and maintain such
listing and admittance and take all other such actions as may be required by
the Swiss Admission Board in order to comply with the requirements of the SWX
Listing Rules.


 


6.6                                Provisions of Documents to the
Underwriters. For a period of 
two years from the Settlement Date, the Company will furnish to the
Underwriters copies of each document filed on a public basis by the Company
with the SWX including any notices under the ad-hoc publicity rules of the SWX,
and copies of financial statements and other periodic reports that the Company
may furnish generally to its shareholders.


 


6.7                                Coordination of Announcements.
Between the date hereof and the Settlement Date (both dates inclusive), the
Company will, and will cause its subsidiaries and all other parties acting on
its behalf so far as practical, with regard to applicable laws and regulations
and the requirements of the SWX, to notify and consult with the Global Coordinator
prior to issuing any public announcement concerning, or which is likely to be
material in the context of the offering and distribution of the Offered Shares
taken as a whole.


 


16

















 


6.8                                Use of Proceeds. The Company
will use the net proceeds of the issue and sale of the Offered Shares to
finance part of its obligations under the Settlement Agreement (as defined in
the Offering Circular) and otherwise in respect of the Implant Litigation (as
defined in the Offering Circular).


 


6.9                                Clear Market. The Company
will not for a period of 180 calendar days after the Settlement Date, (i)
issue, or announce the intent to issue, any shares or securities convertible or
exchangeable into shares or representing rights to subscribe for shares, or
enter into transactions with a similar economic effect, and it will not (ii)
create, or announce the intent to create, any authorized capital or new
conditional capital, except as required under mandatory Swiss law or in
relation to conditional capital for shares to be issued upon exercise of
options granted to employees according to stock option plans described in the
Offering Circular, or in connection with the CCI (as defined in the Offering
Circular), without the prior written consent of the Global Coordinator.


 


6.10                          Issuance of the CCI. If the
Offering is completed and the Company has received funds in the amount of USD
635 million (subject to adjustment pursuant to the terms of a commitment from
UBS AG or pursuant to a credit agreement reflecting such commitment) under a
credit facility then the Company undertakes not to issue the CCI, in whole or
in part.


 


6.11                          Restricted ADS Election.
Prior to the end of the Exercise Period, the Company undertakes to enter into
the Restricted Deposit Agreement, which agreement shall provide that the Global
Coordinator may, from time to time, deposit any or all of its Offered Shares
with the Depositary in exchange for an equivalent amount of Restricted
ADSs.  Such Restricted ADSs will be in
physical, definitive form, and in such authorized denominations and registered
in such names as the Global Coordinator requests.  The Company undertakes to comply with the Restricted Deposit
Agreement so that Restricted ADRs evidencing Restricted ADSs will be executed
(and, if applicable, countersigned) and issued by the Depositary against the
receipt of Offered Shares from time to time by the Depositary.


 


6.12                          Stabilization and Manipulation. The
Company will not ( and will cause its subsidiaries not to) take, directly or
indirectly, any action which is designed to or which has constituted or which
would reasonably be expected to cause or result in stabilization or
manipulation or of the price of any security of the Company to facilitate the
sale or resale of the Offered Shares other than in accordance with applicable
law, including Regulation M under the Exchange Act.


 


7.              Representations,
Warranties and Undertakings of InCentive and the Global Coordinator


 


7.1                                 Each
of InCentive and the Global Coordinator, severally and not jointly,
acknowledges that no action has been or will be taken in any jurisdiction by
the Company that would permit a public offering of the Offered Shares, or
possession or distribution of the Offering Circular or any other offering or
publicity material relating to the Offered Shares, in any country or
jurisdiction where action for that purpose is required (including the United
States, the United Kingdom, Canada, Japan, the Netherlands, Australia and South
Africa) other than Switzerland, and each of


 


17

















 


InCentive and
the Global Coordinator will comply with all applicable laws and regulations in
each jurisdiction in which it acquires, offers, sells or delivers Preemptive
Rights or Offered Shares or has in its possession or distributes the Offering
Circular or any such other material.  


 


7.2                                 Each
of InCentive and the Global Coordinator, severally and not jointly, represents
and warrants to, and agrees with, the Company, that it will not offer or sell
the Preemptive Rights or the Offered Shares except in accordance with
Regulation S under the Securities Act and that, in connection therewith, (i) it
will not offer or sell the Preemptive Rights or the Offered Shares by any form
of directed selling efforts within the meaning of Regulation S under the
Securities Act, and (ii) it will not offer or sell the Preemptive Rights or the
Offered Shares by any form of general solicitation or general advertising,
including but not limited to the methods described in Rule 502(c) under the
Securities Act.


 


Nothwithstanding
the foregoing, the Global Coordinator may offer and deliver the Preemptive
Rights, and to the extent it so offers and sells, represents that and agrees
with the Company that, it will only offer and sell the Offered Shares in the
United States so long as such Offered Shares are sold only in the form of
Restricted ADSs to persons who it reasonably believes are “qualified
institutional buyers” within the meaning of Rule 144A under the Securities Act
in transactions not subject to the registration requirements of the Securities
Act who provide to it and to the Company a letter in the form of Exhibit A
hereto and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Restricted ADSs is aware
that such sale is being made in a transaction not subject to registration under
the Securities Act.


 


7.3                                 Each
of InCentive and the Global Coordinator, severally and not jointly, represents
and warrants to, and agrees with, the Company, that it:  (i) it will not offer or sell and, prior to
the expiry of a period of six months from the Settlement Date, will not offer
or sell any Offered Shares to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has only communicated
and caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets Act
2000 (“FSMA”)) received by it in connection with the issue or sale of any
Preemptive Rights or Offered Shares in circumstances in which section 21(1) of
the FSMA does not apply to the Company; and (iii) it has complied and will
comply with all applicable provisions of the FSMA with respect to anything done
by it in relation to the Preemptive Rights or Offered Shares in, from or
otherwise involving the United Kingdom.  


 


7.4                                 Each
of InCentive and the Global Coordinator, severally and not jointly, represents
and warrants to, and agrees with, the Company, that it will only offer, sell,
deliver or transfer, directly or indirectly, Preemptive Rights or Offered
Shares in the Netherlands to individuals who, or legal entities which, trade or
invest in securities in the conduct of a profession or trade (including banks,
investment banks, securities


 


18

















 


firms,
insurance companies, pension funds, other institutional investors, and treasury
deparments and finance companies of large enterprises.


 


7.5                                 Each
of InCentive and the Global Coordinator agrees with the Company that any
stabilization activities engaged in relating to the offer and sale of Offered
Shares shall be performed in accordance with all applicable laws and
regulations.  


 


8.              Undertakings
of InCentive


 


8.1.


 


(a)               Coordination of Announcements. Between the
date hereof and the Settlement Date (both dates inclusive), InCentive will, and
will cause its subsidiaries and all other parties acting on its behalf so far
as practical, with regard to applicable laws and regulations and the
requirements of the SWX, to notify and consult with the Global Coordinator
prior to issuing any public announcement concerning, or which is likely to be
material in the context of, the offering and distribution of the Offered Shares
taken as a whole.


 


(b)              No Trading of Preemptive Rights with respect to
InCentive Shares. InCentive shall not sell its Preemptive Rights
with respect to InCentive Shares during the Exercise Period.


 


9.              Agreement
Among Underwriters


 


9.1                                Lead Underwriter. The Global
Coordinator is hereby authorized on behalf of the Underwriters to conduct the
negotiation of, and to enter into, any agreements related to this Agreement,
and to agree any variation in the terms of performance of this Agreement that,
in its reasonable judgment, will not have a material adverse effect on the
interest of the of the Underwriters.


 


9.2                                Costs. Each Underwriter
shall bear its own costs and expenses incurred in connection with the Offering,
except as provided for in Section 10 below.


 


9.3                                Representations and Warranties.
Each of InCentive and the Global Coordinator hereby gives to each other the
same representations and warranties given by the Underwriters to the Company as
set forth in Section 7.


 


10.        Commission
/ Fees and Expenses


 


10.1                          Commissions of Global Coordinator.
In consideration of the obligations undertaken herein by the Global Coordinator
the Company covenants and agrees with the Global Coordinator to pay, in
addition to its other obligations hereunder, the following commissions (the “Commissions”):


 


19

















 


(a)               a base commission of 1.45% on the
aggregate Offer Price for all Offered Shares (number of Offered Shares times
Offer Price) for the managing, structuring and exercising the Offering;


 


(b)              an underwriting commission of 1.25% on
the Global Coordinator’s underwriting commitment of CHF 55’137’120 (= CHF
689’214);


 


(c)               an incentive commission of 0.75% on the
aggregate Offer Price for all Offered Shares (number of Offered Shares times
Offer Price) at the sole discretion of the Company; and


 


(d)              a reimbursement commission of 0.25% on
the aggregate Offer Price for all Offered Shares (number of Offered Shares
times Offer Price) for banking system costs.


 


The Global Coordinator is authorized to set off the total amount of the
Commissions (including those payable to InCentive) established at that time
from the Company’s net proceeds and invoice the remaining amounts to the
Company at a later time.


 


10.2                          Commission of InCentive. In
consideration of the obligations undertaken herein by InCentive the Company
covenants and agrees with InCentive to pay, in addition to its other obligations
hereunder, an  underwriting commission
of 1.25% on InCentive’s underwriting commitment of CHF 200’000’000 (= CHF
2’500’000).


 


10.3                          Fees and Expenses. The
Company covenants and agrees with the Global Coordinator to pay, in addition to
its other obligations hereunder, the following:


 


(a)               all expenses in connection with the
preparation, printing and filing of the Offering Circular, listing publications
and any amendments and supplements thereto and the mailing and delivering of
copies thereof to the Underwriters;


 


(b)              the costs and expenses of the Global
Coordinator in connection with the preparation of materials for “road show”
presentations to be made to existing shareholders and prospective investors
(including, without limitation, costs for one accompanying banker and one sales
representative of the Global Coordinator);


 


(c)               such expenses and listing fees as
required in connection with the listing of the Offered Shares on the SWX and
the admittance of the Preemptive Rights to trading at the SWX;


 


(d)              the documented out-of-pocket expenses
reasonably incurred by the Global Coordinator in connection with the
transaction contemplated by this Agreement;


 


(e)               the fees and disbursements of the
international legal counsel up to USD 700,000 (including advice in
connection with the Credit Facility, but not including advice and fees for
security arrangements in connection with such Credit Facility, which, to the
extent such advice and fees result in USD 700,000 being exceeded, shall be
paid by the Company upon being provided with appropriate documentation thereof)
and Swiss legal counsel up to USD 100,000 of the Global Coordinator in


 


20

















 


connection with the Offering, the Credit Facility and the security
arrangements thereunder;


 


(f)                 the fees and expenses of its own
outside legal counsel, including without limitation patent counsel to the
Company, financial and other advisors in connection with the transactions
contemplated herein;


 


(g)              the fees and expenses of the Company’s
independent accountants for services rendered in connection with the
transactions contemplated hereby;


 


(h)              costs and expenses in connection with the
statement and/or recommendation to be obtained by the relevant takeover
authorities; and


 


(i)                  all other costs and expenses incident
to the performance of its obligations hereunder.


 


Such fees and
expenses shall be payable upon request of the Global Coordinator as invoiced in
accordance with the Mandate Agreement. The Global Coordinator is authorized to
set off the total amount of such fees and expenses established at that time
from the Company’s net proceeds (provided that it has agreed in writing with
the Company in advance the amount of such set offs) and the fees payable to
InCentive pursuant to Section 10.4 and invoice the remaining amounts to the
Company at a later time.


 


All payments
by the Company under this Agreement will be made without set-off or
counterclaim, and free and clear of and without deduction or withholding for or
on account of, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature. If any such deduction or
withholding is required by law in any jurisdiction to be made in connection
with any such payment, the Company will increase the amount paid so that the
full amount of such payment is received by the payee as if no such deduction or
withholding had been made.


 


10.4                          Fees and Expenses of InCentive.
The Company covenants and agrees with InCentive to pay, in addition to its other
obligations hereunder, CHF 250,000 for fees and expenses of InCentive incurred
in connection with the transactions contemplated herein.


 


11.                                 Indemnification


 


11.1                          The Company (the “Indemnifying
Party”) undertakes with each of InCentive and  the Global Coordinator (for itself, its
affiliated companies and on behalf of its employees, directors, officers, and
such U.S. persons (if any) who control such Global Coordinator for the purposes
of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each an
“Indemnified
Party”) that it will indemnify and hold harmless each Indemnified
Party from and against any and all 
losses, liabilities, costs, claims, damages, expenses or demands
(including but not limited to, legal costs and expenses) (a “Loss”),
joint or several, which that Indemnified Party may incur or which may be made
against that Indemnified Party arising out of or in relation to or in
connection with any  breach or alleged  breach of the representations and warranties
of the Company set out in this Agreement or any untrue statement or alleged
untrue


 


21

















 


statement of a material fact contained in the Offering Circular, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading and will reimburse each Indemnified Party on demand an amount equal
to such Loss; provided, however, that with respect to both the Global
Coordinator and InCentive this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information regarding the Global
Coordinator or InCentive in its capacity as Underwriter furnished to the
Company by the Global Coordinator expressly for use in the Offering Circular
(or any amendment thereto); provided, further, however, that with respect to
InCentive this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information regarding InCentive furnished to the
Company by InCentive expressly for use in the Offering Circular (or any
amendment thereto) . The amount paid or payable to an Indemnified Party as a
result of a Loss shall include any legal or other expenses incurred by such
Indemnified Party in connection with investigating or defending such claim.
This indemnity will be in addition to any liability which the Company may
otherwise have.


 


Notwithstanding the foregoing, each of InCentive and the Global
Coordinator agrees, severally and not jointly, that it will indemnify and hold
harmless the Company, its employees, directors, and officers to the same extent
as the Company will indemnify and hold harmless the Global Coordinator or
InCentive as set out in this Section 11, but only with reference to the
information furnished to the Company by each of  the Global Coordinator or InCentive, respectively, for use in the
Offering Circular.


 


11.2                          If any action, claim or
demand shall be brought or asserted against any Indemnified Party hereunder,
and with respect to which indemnity may be sought hereunder, such Indemnified
Party shall promptly notify the Indemnifying Party in writing and the
Indemnifying Party shall assume the defence thereof, including the employment
of legal advisers reasonably satisfactory to such Indemnified Party and payment
of all  fees and expenses. Any
Indemnified Party shall have the right to employ separate legal advisers in any
such action and participate in the defence thereof, but the fees and expenses
of such legal advisers shall be at the expense of such Indemnified Party unless
(i) the employment of such legal advisers shall have been specifically
authorized in writing by the Indemnifying Party, (ii) the Indemnifying Party
shall have failed to assume the defence and employ legal advisers or (iii) the
named persons to any such action include both such Indemnified Party and the
Indemnifying Party and such Indemnified Party shall have been advised that
there may be one or more legal defences available to it which are different
from or additional to those available to the Indemnifying Party (in which case
the Indemnifying Party shall not have the right to assume the defence on behalf
of such Indemnified Party). It being understood, however, that the Indemnifying
Party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of legal advisers


 


22

















 


for all
Indemnified Parties (in addition to any local counsel), and that all such  fees 
and expenses shall be reimbursed 
when they are incurred. In the case of any separate firm of legal
advisers for the Indemnified Parties, such firm of legal advisers shall be
designated by such Indemnified Party. The Indemnifying Party shall not be
liable for any settlement of any such action effected without its written
consent but, if settled with the written consent of the Indemnifying Party, the
Indemnifying Party agrees to indemnify and hold harmless the Indemnified Party
from and against any loss or liability by reason of such settlement. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Party is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party, unless such
settlement included an unconditional release of such Indemnified Party from all
liability on claims that are the subject of such proceeding.


 


12.        Conditions
Precedent


 


The obligation of the Global Coordinator and of InCentive to subscribe,
underwrite and to pay for the Offered Shares is subject to the following
conditions precedent:


 


12.1                          Offering Circular. Upon the
signing of this Agreement two copies of the Offering Circular shall have been
delivered to the Global Coordinator and InCentive, duly signed by the Company.


 


12.2                          Comfort Letter. Immediately
preceding the signing of this Agreement, on the Capital Increase Date and on
the Settlement Date, there shall have been delivered to the Global Coordinator
and InCentive letters, dated the date of this Agreement (or the date of the
Offering Circulars), the Capital Increase Date and the Settlement Date,
respectively, from PricewaterhouseCoopers AG, auditors to the Company,
substantially in the forms set forth in Schedule 12.2.


 


12.3                          Officers’ Certificates. On
and dated the date of this Agreement, the Capital Increase Date and the
Settlement Date, there shall have been delivered to the Global Coordinator and
InCentive an officer’s certificate of the Company in the form of Schedule
12.3, executed by two duly authorized officers of the Company, signed on
behalf of the Company.


 


12.4                          Legal Opinions and Other Documents.
On and dated the date of this Agreement (or the date of the Offering Circular),
the Capital Increase Date and the Settlement Date, there shall have been
delivered to the Global Coordinator and InCentive, each in the agreed form as
attached in the Schedules 12.4 (a-f) hereto (provided that (d) and (e)
are to be delivered only on the Settlement Date):


 


(a)   a disclosure letter and a legal opinion from
Bär & Karrer, Swiss legal counsel to the Company;


 


(b)   a legal opinion from Lenz & Staehelin,
Swiss legal counsel to the Global Coordinator;


 


(c)   a 10b-5 letter from Cleary Gottlieb, U.S.
legal counsel to the Global Coordinator;


 


23

















 


(d)         a
legal opinion from Cleary Gottlieb, U.S. legal counsel to the Global
Coordinator, regarding the exemption from registration under the Securities Act
of the Offered Shares;


 


(e)          a
legal opinion from Weil Gotshal & Manges, U.S. legal counsel to the
Company, regarding, among other things, (i) the exemption from registration
under the Securities Act of the Offered Shares, (ii) the statements contained
in the Offering Circular under the caption “Taxation—United States Federal
Income Tax Considerations”, insofar as they purport to describe U.S. federal
statutes, rules and regulations, and subject to the limitations set forth
therein, constitute a fair summary thereof, (iii) the legally valid, binding
and enforceable status of the Restricted Deposit Agreement and (iv)
“Description of Restricted American Depositary Receipts” sections of the
Offering Circular;


 


(f)            a
disclosure letter from Shook, Hardy & Bacon LLP, U.S. legal counsel to the
Company; and


 


(g)         such
other resolutions, consents authorities and documents relating to the offer and
sale of the Offered Shares, as the Global Coordinator, on behalf of the
Underwriters, may reasonably require.


 


12.5                          No Material Adverse Change.
At the Capital Increase Date and the Settlement Date, there shall not have
occurred any change, or any development or event involving a prospective
change, in the business, condition (financial or other), properties, prospects
or results of the operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Offering Circular, whether or not arising in
the ordinary course of business, which, in the sole discretion of the Global
Coordinator (after consultation, if practicable, with InCentive and the
Company), is material and adverse and which makes it, in the sole discretion of
the Global Coordinator (after consultation, if practicable, with InCentive and
the Company), impracticable to or inadvisable to subscribe for and underwrite
the Offered Shares on the terms and in the manner contemplated in the Offering
Circular.


 


12.6                          SWX Listing. The listing of
the Offered Shares on the SWX and the admittance of the Preemptive Rights to
trading at the SWX shall have been granted.


 


12.7                          Termination of this Agreement.
If any of the conditions set forth in this Section 12 is not satisfied on or
prior to the Settlement Date, then the Global Coordinator shall have the right
to terminate this Agreement in accordance with Section 13 and 14. The Global
Coordinator, on behalf of the Underwriters, may at its discretion, however,
waive compliance with the whole or any part of this Section.


 


13.        Termination


 


13.1                          Notwithstanding anything
contained herein, the Global Coordinator, on behalf of the Underwriters, may,
by notice to the Company, terminate this Agreement at any time on or prior to
the Settlement Date in any of the following circumstances:


 


24

















 


(a)               if there shall have come to the notice
of the Underwriters any breach of, or any event rendering untrue or incorrect
in any  respect, any of the warranties
and representations contained in Section 5 or any  failure to perform any of the Company’s undertakings or agreements
in this Agreement;


 


(b)              if any of the conditions precedent
specified in Section 12 has not been satisfied or waived by the Global
Coordinator; or


 


(c)               if, (A) (i) trading generally shall have
been suspended or materially limited on or by the SWX, (ii) the relevant
authorities shall have declared a general moratorium on commercial banking
activities in Switzerland, the United Kingdom or the United Sates, (iii) there
shall have occurred a general crisis in international exchange markets or (iv)
there shall have occurred any  outbreak
or  escalation of hostilities or
any  act of terrorism involving the
United States, the United Kingdom or Switzerland or the declaration by the
United States, the United Kingdom or Switzerland of a national emergency or war
or any change in financial markets or any calamity or crisis or any change or
development involving a prospective change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls that, in the Global Coordinator’s judgment (after
consultation, if practicable, with InCentive and the Company), is material and
adverse or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, the United
Kingdom or Switzerland and (B) in the case of any of the events specified in
this Section 13.1(c)(A)(i) through (iv) such event, singly or together with any
other such event, makes it, in the Global Coordinator’s sole judgment,
impracticable or inadvisable to subscribe for and underwrite the Offered Shares
on the terms and in the manner contemplated in the Offering Circular.


 


13.2                          Survival. Upon such notice
being given on or prior to the Settlement Date, this Agreement shall terminate
and be of no further effect and no party shall be under any liability to any
other in respect of this Agreement, except for obligations and liabilities
already incurred or accrued, and except that the Company shall remain liable as
provided under Sections 10, 11 and 14(i) provided, however, that the Global
Coordinator shall use its reasonable best efforts to transfer to a bank or
other financial intermediary the administrative functions it is carrying out in
connection with the execution of the transactions contemplated hereby.


 


14.        Effects
of Termination on Offered Shares


 


14.1                          Event of Non-Completion. If
there is a termination of this Agreement prior to the Settlement Date pursuant
to Section 12.7 or 13 or if the delivery of the Offered Shares to the Global
Coordinator is not completed on the Settlement Date or if the Offering
contemplated herein is not consummated for any other reason (each an “Event of
Non-Completion”) and the Capital Increase has occurred and been
registered, then, unless the Company and the Global Coordinator otherwise agree
in writing within ten calendar days after the Event on Non-Completion, the
following shall apply:


 


25

















 


(a)               The Company and InCentive shall cause to
be held a shareholders’ meeting of the Company in which the shareholders of the
Company shall resolve on a reduction of the registered issued share capital of
the Company from CHF 354’919’350 to CHF 300’247’110 (the “Capital Reduction”) by
cancellation of the Offered Shares against repayment of the Total Nominal
Amount of the Offered Shares to the Underwriters. Prior to such shareholders’
meeting, the auditors of the Company shall confirm in writing, pursuant to
Article 732 para. 2 of the Swiss Code of Obligations, that the claims of the
Company’s creditors are covered notwithstanding the Capital Reduction. The Capital
Reduction shall be effected in accordance with the provisions of Swiss
statutory law, in particular Articles 732 ff. of the Swiss Code of Obligations
and shall be consummated at the earliest date possible by entry in the
Commercial Register. The proceeds of the Capital Reduction, being CHF
54’672’240 (such amount representing the aggregate par value of the Offered
Shares) shall be in the form of a cash payment to be made to the Underwriters
having subscribed for such Offered Shares as set forth in Section 1.2.


 


(b)              If (i) the Capital Reduction is not
resolved within 40 business days after the Global Coordinator’s request, or
(ii) the auditors of the Company have not provided the confirmation referred to
in Section 14.1(a) prior to such shareholders’ meeting, or (iii) the Capital
Reduction has not been recorded in the Commercial Register within 120 calendar
days after the Global Coordinator having requested the Capital Reduction, or
(iv) the Underwriters have not received the proceeds of the Capital Reduction
within 120 calendar days after having requested the Capital Reduction and
further provided the Company has not exercised its Call Option pursuant to
Section 14.1(c) below and paid to the Underwriters the Total Nominal Amount
plus costs and expenses as set out in Section 14.1(d)(ii), then the Global
Coordinator and InCentive shall have the right, but no obligation, and always
provided that the Capital Reduction has not yet occurred, to sell at their own
discretion all or any number of the Offered Shares subscribed by them to a
third party. If the aggregate proceeds of such sale exceed the Total Nominal
Amount plus costs and expenses as set out in Section 14.1(d)(ii) (the “Surplus”),
the Company shall be entitled to receive the Surplus.


 


(c)               Call Option. Before the occurrence of an
event described in subsection (i) through (iv) of Section 14.1(b) and further
provided that the Capital Reduction has not yet occurred and the Underwriters
have not yet received the proceeds of such Capital Reduction, the Company shall
have the right (the “Call Option”) to request in writing that
the Global Coordinator and InCentive deliver the Offered Shares to an account
specified by the Company against payment of a total of CHF 54’672’240 plus
expenses as set out in Section 14.1(d)(ii).


 


(d)              Costs and Expenses. The Company shall
bear:


 


(i)             all costs incidental to the Capital
Reduction, including but not limited to notarization costs, costs of the
Commercial Register and costs of publication of the Capital Reduction;


 


(ii)          the costs of the Global Coordinator and
InCentive incurred in connection with the Capital Reduction respectively the
Call Option (including, but not


 


26

















 


limited, to (I) taxes, (II) default interest at the statutory rate of
5%, calculated on a 30/360 basis from the date of the Event of Non-Completion
until the date of payment of proceeds to the Underwriters, and (III) reasonable
out-of-pocket expenses of the Underwriters and their respective counsels).


 


(e)               If an Event of Non-Completion occurs
after the registration of the Capital Increase and before the Settlement Date,
the Global Coordinator, having paid the Total Nominal Amount of all the Offered
Shares in accordance with Section 1.3(a), shall debit InCentive’s cash account
no. 230-P0448910.0 (at UBS AG, Zurich, bank clearing no. 230) in the amount of
the nominal value of each Offered Share subscribed for by InCentive and deliver
in return the respective number of Offered Shares into InCentive’s share
deposit no. 230-P0448910.0 (at UBS AG, Zurich, bank clearing no. 230).


 


The Company further undertakes to indemnify the Global Coordinator and
InCentive for, and to hold the Global Coordinator and InCentive harmless from,
any costs, expenses, third party claims and liabilities, actual or contingent,
that may be incurred by or made against the Global Coordinator, InCentive or
any third party in connection with the Capital Reduction.


 


14.2                          If an Event of Non-Completion
occurs after the Global Coordinator having deposited the Total Nominal Amount
but before registration of the Capital Increase, the Company shall procure that
the Total Nominal Amount plus accrued interest, if any, on such amount, while
deposited with ZKB is refunded to the Global Coordinator upon first demand as
soon as possible.


 


15.         Notices


 


Any notice or
communication under or in connection with this Agreement shall be in writing
and shall be delivered personally or sent by mail or facsimile transmission:


 


to the Company
at:


 


Centerpulse
Ltd.


Andreasstrasse
15


CH-8050 Zürich


 


Attn.:                Christian
Stambach/Marcel Bauckhage


Facsimile:         +41
1 306 96 97


 


 


to InCentive at:


 


InCentive
Capital AG


c/o InCentive
Asset Management AG


Tödistrasse 36


CH-8002 Zürich


 


27

















 


Attn.:                      René
Braginsky / Thomas Wyler


Facsimile:               +41 1 205
93 05


 


to the Global
Coordinator at:


 


UBS Warburg


Europastrasse
1


CH-8152
Ofpikon


 


Attn.:                      CFCM
Legal


Facsimile:               +41 1 239
48 09


 


16.         Changes and Amendments to
This Agreement


 


Changes and
amendments to this Agreement, including this Section 16 will only be valid if
made in writing and signed by each of the Company, InCentive and the Global
Coordinator.


 


17.         Applicable Law and
Jurisdiction


 


17.1                          Applicable Law. This
Agreement shall be governed by and construed in accordance with the laws of
Switzerland.


 


17.2                          Jurisdiction. Each of the
Company, InCentive and the Global Coordinator hereby agrees to the venue of
Zurich 1 and irrevocably submits to the non-exclusive jurisdiction of the
Commercial Court of the Canton of Zurich (Handelsgericht Zürich), with reserve of
appeals to the Swiss Federal Supreme Court (Schweizerisches Bundesgericht) to settle
any disputes which may arise out of or in connection with this Agreement or the
transactions contemplated thereby. Irrespective of the foregoing, the
Underwriters shall have the right to initiate legal proceedings against the
Company before any other court in which any suit, action or other proceedings
of any type whatsoever has been brought against any of the Underwriters.


 


28

















 


So Agreed as of September 27,
2002:


 


 


The Company:


 


Centerpulse Ltd.


 


 


	
  By:

  	
   /s/ Marcel Bauckhage

  	
   

  	
  By:

  	
   /s/ Christian Stambach

  	
   

  
	
  Name: Marcel
  Bauckhage

  	
  Name:
  Christian Stambach

  
	
  Title    Head Corporate Treasury

  	
  Title:   VP. Head Legal & Compliance

  



 


 


InCentive:


 


InCentive Capital AG


 


 


	
   

  	
   

  	
   

  	
   

  	
  By Proxy

  	
   

  
	
  By:

  	
   /s/ Thomas Wyler

  	
   

  	
  By:

  	
   /s/ Romeo Cerutti

  	
   

  
	
  Name: Thomas
  Wyler

  	
  Name: Romeo
  Cerutti

  
	
  Title

  	
  Title:

  



 


 


The Global Coordinator:


 


UBS AG acting through
its business group UBS Warburg


 


 


	
  By:

  	
   /s/ [Illegible]

  	
   

  	
  By:

  	
   /s/ David M. [Illegible]

  	
   

  
	
  Name:
  [Illegible]

  	
  Name: David
  M. [Illegible]

  
	
  Title

  	
  Title:

  



 


29

















 


EXHIBIT A


 


Form of Investor
Letter


 


[Form of Exercising US QIB Investor Letter]


 


[Letterhead of eligible US Investor]


 


[Date]


 


Centerpulse Ltd.


Andreasstrasse 15


8050 Zurich


Switzerland


 


Attention: Dr. Christian
Stambach


Facsimile No.: +41 / 1 / 306 96
97


 


UBS Warburg LLC, Stamford


 


Attention:  Dennis Kelly


Fax: +1 203 719 8303


 


Please also fax copies:


 


UBS AG


8098 Zurich


Switzerland


 


Attention: Florence Andermatt,
ONJ7/OP8E – Emissionen Schweiz


Facsimile No.: +41 / 1 / 235 23
44


 


To whom it may concern


 


Re:  Purchase
of                  shares,
nominal value of CHF 30 each (“Shares”), of Centerpulse Ltd in the form of
restricted American depositary shares  (“Restricted ADSs”) pursuant to the
exercise
of                  preemptive
rights


 


30

















 


 


Dear Sirs,


 


In connection
with our purchase of
            Shares
pursuant to the exercise of
            pre-emptive
rights, we hereby represent, agree and acknowledge as follows:


 


1.             We are the beneficial owner of the
pre-emptive rights that we are exercising and acknowledge that the Shares
issuable upon exercise will be issued in the form of Restricted ADSs and will
remain in the form of restricted ADSs for so long as the securities are
“restricted securities” under Rule 144 of the Securities Act of 1933 as amended
(the “Securities Act”).  Accordingly, we
hereby instruct that such Shares be transferred to Citibank N.A. — Zurich
Branch as custodian for Citibank, N.A., depositary for the Restricted ADS
facility.  The Restricted ADSs to which
we are we entitled should be issued and delivered as follows:


 


Registration
Name:


 


Address:


 


Physical ADSs
to be delivered by Citibank, N.A. to:


 


 


Name of
Custodian Bank:


Address:


Contact Name:


Tel. No.:


Tax ID number:


 


2.             We hereby authorize and therefore
expressly release from Swiss banking secrecy any Depotbank, nominee,
custodian or other financial intermediary through which we hold our Shares to
provide the Company and UBS AG with a copy of this letter and such information
regarding our identity and holding of Shares (including pertinent account
information and details of our identity and contact information) as is
necessary or appropriate to facilitate our exercise of our preemptive rights.


 


3.             We understand that the Restricted
ADSs and the restricted shares represented hereby are not being and will not be
registered under the Securities Act, are being offered and sold to us in a
transaction that is exempt from the registration requirements of the Securities
Act and are “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act.


 


4.             We have has not taken up the
Restricted ADSs as a result of any general solicitation or general advertising,
including advertisements, articles, notices, or other communications published
in any newspaper, magazine or similar media or broadcast over radio or
television; or any seminar or meeting whose attendees have been invited by
general solicitation or general advertising.


 


31

















 


5.             We have received a copy of the
Offering Circular dated 29 September, 2002 (the “Offering Circular”) relating
to the Restricted ADSs, and we agree that we have held and will hold the
Offering Circular in confidence, it being understood that the Offering Circular
received by us is solely for our use and is not to be redistributed or
duplicated by us; in making any purchase of Restricted ADSs, we are relying
only on the Offering Circular and not on any other information or
representation concerning the Company; we agree that no person responsible for
the Offering Circular or any part of it will have any liability for any such
information.


 


6.             We confirm that we are a qualified
institutional buyer (as defined in Rule 144A under the Securities Act).


 


7.             We have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Restricted ADSs, and we are able to
bear the economic risk of investment in the Restricted ADSs.


 


8.             We are acquiring the Restricted
ADSs for our own account and not with a view to any distribution of the
Restricted ADSs, subject, nevertheless, to the understanding that the
disposition of our property shall at all times be and remain within our
control.


 


9.             We understand that the Restricted
ADSs will be delivered to us in certificated form and each certificate will
bear a legend substantially to the following effect:


 


“THE
RESTRICTED ADSs EVIDENCED HEREBY AND THE RESTRICTED SHARES REPRESENTED THEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY JURISDICTION.  THE RESTRICTED ADSs
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DELIVERED EXCEPT
(A) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (B) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR (C) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS
OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.”


 


and that such
certificates will be reissued without the foregoing legend only in the event of
a disposition of the Restricted ADSs in accordance with the provisions of
paragraph 10 below (save in the case where the Restricted ADSs remain
“restricted securities” within the meaning of Rule 144(a)(3) under the Securities
Act (“Rule 144(a)(3)”) following the transaction).


 


10.           We agree that in the event that at
some future time we wish to dispose of any of the Restricted ADSs, we will not
do so unless such disposition is made in accordance with any applicable
securities laws of any state of the United States and we certify that either:


 


32

















 


(a)           we have transferred,
or will have transferred, the Restricted ADSs evidenced by the Restricted ADR
in a transaction exempt from the registration requirements of the Securities
Act under Rule 144(e) or Rule 144(k) (a “Rule 144 Transaction”) and enclose
therewith an opinion of counsel reasonably satisfactory to the ADS depositary
(the “Depositary”) and the Company which states that the transfer is exempt
from the registration requirements of the Securities Act and that the American
Depositary Shares to be issued upon transfer are freely transferable; or


 


(b)           we have transferred,
or will have transferred, the Restricted ADSs evidenced by the Restricted ADR
in an offshore transaction in accordance with Rule 904 of Regulation S under
the Securities Act (a “Reg S Transaction”); or


 


(c)           we have transferred,
or will have transferred, the Restricted ADSs evidenced by the Restricted ADR
in a transaction exempt from the registration requirements of the Securities
Act other than a Rule 144 Transaction or a Reg S Transaction and enclose
therewith an opinion of counsel reasonably satisfactory to the Depositary and
the Company which states that the transfer is exempt from the registration
requirements of the Securities Act.


 


11.           We understand that, so long as the
Restricted ADSs remain “restricted securities” within the meaning of Rule
144(a)(3), we may request cancellation of Restricted ADSs in exchange for the
Shares only if  we certify to the
Company that either:


 


(a)           we have sold or
otherwise transferred, or agreed to sell or otherwise transfer and at or prior
to the time of withdrawal will have sold or otherwise transferred, the
Restricted ADSs or the Shares represented thereby in an offshore transaction in
accordance with Rule 904 of Regulation S under the Securities Act; or


 


(b)           we have sold or
otherwise transferred, or agreed to sell or otherwise transfer and at or prior
to the time of withdrawal will have sold or otherwise transferred, the
Restricted ADSs or the Shares evidenced thereby in a transaction exempt from
registration pursuant to Rule 144(e) or Rule 144(k) under the Securities Act, provided
that in connection with such transfer, we have delivered or will deliver
an opinion of U.S. counsel reasonably satisfactory to the Depositary and the
Company to the effect that the transfer is exempt from the registration
requirements of the Securities Act.


 


12.           We expect to receive from the Company
a certain number of Restricted ADSs each representing one-tenth (0.1) of one
Share.  For the express benefit of the
Depositary and with the intention that the Depositary rely hereon, we confirm
and agree that:


 


33

















 


(a)           we understand that
the Restricted ADSs to be delivered to it will be issued under the terms of the
Restricted Deposit Agreement (as defined in the Offering Circular);


 


(b)           we agree to be bound
by the terms of the Restricted Deposit Agreement and by the terms of the legend
set forth therein; and


 


(c)           we understand and
agree that the Restricted ADSs delivered to us are not identical to or fungible
with the ADSs issued under the terms of the Deposit Agreement and as such, they
may not, so long as such Restricted ADS are issued pursuant to the Restricted
Deposit Agreement, be entitled to all the rights and benefits of holders of
ADRs under the Deposit Agreement (the “Deposit Agreement”) that are not
restricted ADRs.


 


If you have any questions on how to complete this form, please contact
Dennis Kelly at UBS Warburg, Stamford (Tel. No. +1 203 719 7636) or Florence
Andermatt at UBS AG, Zurich (Tel. No. +41 / 1 / 235 23 44).


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Investor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized Officer)

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Contact Tel.:

  



 


34

















 


Please return this letter to:


 


UBS Warburg


 


Florence Andermatt


Fax: +41 / 1 / 235 23 44


 


The Company


 


Dr. Christian Stambach


Fax: +41 / 1 / 306 96 97


 


AND


 


Citibank, N.A.


ADR Department


111 Wall Street, 20th Floor


New York, NY 10021


Attention: Mark Gherzo


 


35

















 


[Form of Exercising US QIB Investor Letter]


 


[Letterhead of eligible US Investor]


 


[Date]


 


Centerpulse Ltd.


Andreasstrasse 15


8050 Zurich


Switzerland


 


Attention: Dr. Christian
Stambach


Facsimile No.: +41 / 1 / 306 96
97


 


UBS Warburg LLC, Stamford


 


Attention:  Dennis Kelly


Fax: +1 203 719 8303


 


Please also fax copies:


 


UBS AG


8098 Zurich


Switzerland


 


Attention: Florence Andermatt,
ONJ7/OP8E – Emissionen Schweiz


Facsimile No.: +41 / 1 / 235 23
44


 


To whom it may concern


 


 


Re:  Purchase
of             shares,
nominal value of CHF 30 each (“Shares”), of Centerpulse Ltd in
the form of restricted American depositary shares  (“Restricted ADSs”)
pursuant to the exercise of
           preemptive
rights


 


IF
THE EXERCISING HOLDER IS EXERCISING RIGHTS IN RESPECT OF CENTREPULSE
UNRESTRICTED ADRS HELD BY IT. NOTICE OF EXERCISE AND PAYMENT AMOUNTS (IN
U.S.DOLLARS) MUST BE SENT TO CITIBANK, N.A. VIA (A) FAX (FAX. NUMBER (212) 825
53 98) BY 3:00 P.M. (NEW YORK TIME), FRIDAY, OCTOBER 4, 2002 AND (B) OVERNIGHT
COURIER, HAND DELIVERY, OR MAIL TO THE ADDRESS AT THE END OF THIS LETTER.  PLEASE CONTACT CITIBANK, N.A. AT MARK
GHERZO, 212 / 657 14 03, TO OBTAIN THE APPROPRIATE ADS EXERCISE FORMS. FAILIURE
TO MEET THIS DEADLINE WILL RESULT IN THE RIGHTS BEING SOLD BY CITIBANK, N.A.
AND THE PROCEEDS, IF ANY, BEING CREDITED TO YOUR ACCOUNT.


 


36

















 


Dear Sirs,


 


In connection
with our purchase of
             Shares
pursuant to the exercise of
            
pre-emptive rights, we hereby represent, agree and acknowledge as follows:


 


1.                                                 existing
American Depositary Shares (“ADSs”) representing
                                                
existing Ordinary Shares issued under the Deposit Agreement, dated July 14,
1997, by and among the Company, Citibank, N.A. and the holders from time to
time of ADRs issued thereunder, are held on our behalf by


 


(1)


and the relevant account
details for such beneficial holder and contact details for such holder’s
custodian are as follows:


 


; and       


we wish to take up our
preemptive rights with respect to
                                    
existing Ordinary Shares represented by our ADSs.


 


2.             We are the beneficial owner of the
pre-emptive rights that we are exercising and acknowledge that the Shares
issuable upon exercise will be issued in the form of Restricted ADSs and will
remain in the form of restricted ADSs for so long as the securities are
“restricted securities” under Rule 144 of the Securities Act of 1933 as amended
(the “Securities Act”).  Accordingly, we
hereby instruct that such Shares be transferred to Citibank N.A. – Zurich
Branch as custodian for Citibank, N.A., depositary for the Restricted ADS facility.  The Restricted ADSs to which we are we
entitled should be issued and delivered as follows:


 


Registration
Name:


 


Address:


 


Physical
restricted ADSs to be delivered by Citibank, N.A. to:


Name of
registered holder:


Address:


Contact Name:


Tel. No.:


Fax No.:


Tax ID letter:


 












(1) Insert (i) name of
applicable custodian(s), including name and participant number of DTC
participants through which  you as
benficial holder hold ADSs, (ii) a contact person at the DTC participant and
contact details and (iii) any other information relating to any intervening
custodians between the DTC participant and you necessary to enable Citibank to
identify your ADS holdings, or if relvant, the name of the registered holder.
If registered in more than one name, provide a separate Schedule A, which
identifies for preceding sentence.


 


37

















 


3.             We hereby authorize and therefore
expressly release from Swiss banking secrecy any Depotbank, nominee,
custodian or other financial intermediary through which we hold our Shares to
provide the Company and UBS AG with a copy of this letter and such information
regarding our identity and holding of Shares (including pertinent account
information and details of our identity and contact information) as is
necessary or appropriate to facilitate our exercise of our preemptive rights.


 


4.             We understand that the Restricted
ADSs and the restricted shares represented hereby are not being and will not be
registered under the Securities Act, are being offered and sold to us in a
transaction that is exempt from the registration requirements of the Securities
Act and are “restricted securities” within the meaning of Rule 144(a)(3) under
the Securities Act.


 


5.             We have not taken up the Restricted
ADSs as a result of any general solicitation or general advertising, including
advertisements, articles, notices, or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television; or
any seminar or meeting whose attendees have been invited by general
solicitation or general advertising.


 


6.             We have received a copy of the
Offering Circular dated 27 September, 2002 (the “Offering Circular”) relating
to the Restricted ADSs, and we agree that we have held and will hold the Offering
Circular in confidence, it being understood that the Offering Circular received
by us is solely for our use and is not to be redistributed or duplicated by us;
in making any purchase of Restricted ADSs, we are relying only on the Offering
Circular and not on any other information or representation concerning the
Company; we agree that no person responsible for the Offering Circular or any
part of it will have any liability for any such information.


 


7.             We confirm that we are a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act).


 


8.             We have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Restricted ADSs, and we are able to
bear the economic risk of investment in the Restricted ADSs.


 


9.             We are acquiring the Restricted
ADSs for our own account and not with a view to any distribution of the
Restricted ADSs, subject, nevertheless, to the understanding that the
disposition of our property shall at all times be and remain within our
control.


 


10.           We understand that the Restricted
ADSs will be delivered to us in certificated form and each certificate will
bear a legend substantially to the following effect:


 


“THE
RESTRICTED ADSs EVIDENCED HEREBY AND THE RESTRICTED SHARES REPRESENTED THEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY JURISDICTION.  THE RESTRICTED ADSs
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR


 


38

















 


DELIVERED EXCEPT (A) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (C) PURSUANT
TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER APPLICABLE JURISDICTIONS.”


 


and that such
certificates will be reissued without the foregoing legend only in the event of
a disposition of the Restricted ADSs in accordance with the provisions of
paragraph 10 below (save in the case where the Restricted ADSs remain
“restricted securities” within the meaning of Rule 144(a)(3) under the Securities
Act (“Rule 144(a)(3)”) following the transaction).


 


11.           We agree that in the event that at
some future time we wish to dispose of any of the Restricted ADSs, we will not
do so unless such disposition is made in accordance with any applicable
securities laws of any state of the United States and we certify that either:


 


(a)           we have transferred,
or will have transferred, the Restricted ADSs evidenced by the Restricted ADR
in a transaction exempt from the registration requirements of the Securities
Act under Rule 144(e) or Rule 144(k) (a “Rule 144 Transaction”) and enclose
therewith an opinion of counsel reasonably satisfactory to the ADS depositary
(the “Depositary”) and the Company which states that the transfer is exempt
from the registration requirements of the Securities Act and that the American
Depositary Shares to be issued upon transfer are freely transferable; or


 


(b)           we have transferred,
or will have transferred, the Restricted ADSs evidenced by the Restricted ADR
in an offshore transaction in accordance with Rule 904 of Regulation S under
the Securities Act (a “Reg S Transaction”); or


 


(c)           we have transferred,
or will have transferred, the Restricted ADSs evidenced by the Restricted ADR
in a transaction exempt from the registration requirements of the Securities
Act other than a Rule 144 Transaction or a Reg S Transaction and enclose
therewith an opinion of counsel reasonably satisfactory to the Depositary and
the Company which states that the transfer is exempt from the registration
requirements of the Securities Act.


 


12.           We understand that, so long as the
Restricted ADSs remain “restricted securities” within the meaning of Rule
144(a)(3), we may request cancellation of Restricted ADSs in exchange for the
Shares only if  we certify to the
Depositary and the Company that either:


 


(a)           we have sold or
otherwise transferred, or agreed to sell or otherwise transfer and at or prior
to the time of withdrawal will have


 


39

















 


sold or
otherwise transferred, the Restricted ADSs or the Shares represented thereby in
an offshore transaction in accordance with Rule 904 of Regulation S under the Securities
Act; or


 


(b)           we have sold or
otherwise transferred, or agreed to sell or otherwise transfer and at or prior
to the time of withdrawal will have sold or otherwise transferred, the
Restricted ADSs or the Shares evidenced thereby in a transaction exempt from
registration pursuant to Rule 144(e) or Rule 144(k) under the Securities Act, provided
that in connection with such transfer, we have delivered or will deliver
an opinion of U.S. counsel reasonably satisfactory to the Depositary and the
Company to the effect that the transfer is exempt from the registration
requirements of the Securities Act.


 


13.           We expect to receive from the Company
a certain number of Restricted ADSs each representing one-tenth (0.1) of one
Share.  For the express benefit of the
Depositary and with the intention that the Depositary rely hereon, we confirm
and agree that:


 


(a)           we understand that
the Restricted ADSs to be delivered to it will be issued under the terms of the
Restricted Deposit Agreement (as defined in the Offering Circular);


 


(b)           we agree to be bound
by the terms of the Restricted Deposit Agreement and by the terms of the legend
set forth therein; and


 


(c)           we understand and
agree that the Restricted ADSs delivered to us are not identical to or fungible
with the ADSs issued under the terms of the Deposit Agreement and as such, they
may not, so long as such Restricted ADS are issued pursuant to the Restricted
Deposit Agreement, be entitled to all the rights and benefits of holders of
ADRs under the Deposit Agreement that are not restricted ADRs.


 


If you have
any questions on how to complete this form, please contact Dennis Kelly at UBS
Warburg, Stamford (Tel. No. +1 203 719 7636) or Florence Andermatt at UBS AG,
Zurich (Tel. No. +41 / 1 / 235 23 44).


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Investor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized Officer)

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Contact Tel.:

  



 


40

















 


Please return this letter to:


 


UBS AG


 


Florence Andermatt


ONJ7/OP8E Emissionen Schweiz


Fax: +41 / 1 / 235 23 44


 


The Company


 


Dr. Christian Stambach


Fax: +41 / 1 / 306 96 97


 


AND


 


Citibank, N.A.


ADR Department


111 Wall Street, 20th Floor


New York, NY 10021


Attention: Mark Gherzo


 


41

















 


SCHEDULE 1.2


Form of Subscription
forms


 


ZEICHNUNGSSCHEIN


 


Bezugnehmend auf die uns
bekannten Statuten der Centerpulse AG mit Sitz in Zürich (insbesondere deren
Artikel 3b in der Fassung gemäss Beschluss der ordentlichen Generalversammlung
vom 17. Mai 2002), auf den Beschluss des Verwaltungsrates dieser Gesellschaft
vom 27. September 2002 betreffend eine genehmigte Kapitalerhöhung um CHF [ • ] sowie auf den
Emissionsprospekt (“Offering and Listing Circular”) vom 29. September 2002
zeichnen wir hiermit


 


[
•  ]
Namenaktien zu je CHF 30.– Nennwert


 


zum Gesamtausgabepreis von CHF
[ •
] und verpflichten uns bedingungslos, eine dem Ausgabebetrag entsprechende
Einlage zu leisten.


 


Diese Zeichnung bleibt
verbindlich bis zum [ • ] 2002.


 


 


[Zürich], den [ • ]


 


 


UBS AG [ / InCentive Investment
(Jersey) Ltd ]:


 


 


 


	
   

  	
   

  	
   

  	
   

  



 


42

















 


SCHEDULE 3.1


 


Form of Letter to SWX


 


 


(Letterhead
of Centerpulse Ltd.)


 


 


SWX Swiss Exchange


Admission Board


Selnaustrasse 30


P.O. Box


8021 Zurich


 


 


Zurich, October •, 2002


 


 


Declaration addressed to the Admission Board
of the SWX Swiss Exchange


 


 


Ladies and Gentlemen:


 


Centerpulse Ltd., Zurich, as
issuer and applicant for the


 


•
new registered shares Centerpulse Ltd. with nominal value of CHF 30 each,
out of a capital increase in the ratio 1 new for •
old registered shares with nominal value of CHF 30 each


 


(Security no. 654485 / ISIN CH006544859)


 


declares herewith that it has
instructed UBS AG, acting through its business group UBS Warburg, as Global
Co-ordinator for this issue and as its representative, recognized by the SWX
Swiss Exchange (the “SWX”), to apply for the listing (the “Listing”) on the SWX
in accordance with the Listing Rules of the SWX (“Listing Rules”). In this
connection, Centerpulse Ltd. declares that:


 


1.               the
responsible bodies of Centerpulse Ltd. are in agreement with the Listing;


 


2.               the prospectus and the Listing notice
are complete pursuant to the Listing Rules;


 


43

















 


3.               there has been no material deterioration
of its assets and liabilities, financial position, profits and losses and
prospects since publication of the prospectus;


 


4.               it is in agreement with the disclosure
obligations pursuant to Chapter IV and the system of sanctions pursuant to
Chapter VII of the Listing Rules and is prepared to subject itself to the
procedures and decisions of the Appeals Court pursuant to Art. 83 of the
Listing Rules;


 


5.               it bears the costs for the Listing
according to the regulations of the SWX.


 


Yours faithfully,


 


 


Centerpulse Ltd.


 


44

















 


SCHEDULE 5(a).1


 


 


Copies of this Offering
Circular are available free of charge in Switzerland at the offices of UBS Warburg,
Corporate Finance and Capital Markets Legal Services, at Europastrasse 1, CH-8152
Opfikon, Switzerland (Tel.:  +41 1 239
4703, Fax:  +41 1 239 2111, E-mail:
swiss-prospectus@ubsw.com).


 


45

















 


SCHEDULE 5(a).2


 


 


Management


 


Board of Directors


 


René Braginsky                          53             Member                           2002                         2005


 


René Braginsky: René
Braginsky is the chief executive officer and delegate of the board of directors
of InCentive Capital AG, which is the Company’s largest shareholder. He was
Director of the Institutional Investors division of Bank Sal. Oppenheim jr.
& Cie (Schweiz) AG between 1980 and 1999. Before that, he worked for three
years at Bank Vontobel. In 1969, he started his financial career in the
brokerage department of Union Bank of Switzerland, where he spent seven years
and worked in Paris, London, New York and Houston. Mr. Braginsky co-founded
InCentive Investment AG in 1985.


 


Major
Shareholders


 


As of September 24, InCentive
Capital AG (Baarerstrasse 8, 6301 Zug, Switzerland) held, through its
wholly-owned subsidiary InCentive Investment (Jersey) Ltd. (Lister House, The
Parade, St.Helier, Jersey), 1,173,934 registered shares of the Company
(corresponding to 11.73% of the Company’s registered issued share capital). In
addition to this shareholding, InCentive Capital AG, through InCentive
Investment (Jersey) Ltd., held as of that date call options covering 478,000
registered shares of the Company (corresponding to 4.78% of the Company’s
registered issued share capital) and had granted put options covering 111,000
registered shares of the Company (corresponding to 1.11% of the Company’s
registered issued share capital).


 


Mr. René Braginsky, who is a
member of the Company’s Board of Directors (see “Management3⁄4Board
of Directors”), serves as delegate of the board of directors and chief
executive officer of InCentive Capital AG and owns 20% of that company’s share
capital. He also owns 100% of the share capital of InCentive Asset Management
Ltd., which acts as investment manager for InCentive Capital AG and for its
subsidiary InCentive Investment (Jersey) Ltd.


 


46

















 


SCHEDULE 12.2


 


Form of Comfort
Letter


 


September 27, 2002


 


 


Centerpulse
Ltd.


Andreasstrasse 15


CH —
8050 Zürich


Switzerland


 


and


 


UBS
AG, acting through its business group UBS Warburg


Europastrasse 1


CH-8152 Opfikon


Switzerland


 


as
representative


of
the several underwriters


 


RE: Offering of shares (the “Shares”) with a nominal value of
CHF 30 of Centerpulse Ltd. inside the United States


 


Ladies
and Gentlemen:


 


We
have audited the consolidated financial statements of Centerpulse Ltd.
(formerly Sulzer Medica Ltd.) (the “Company”) and subsidiaries (the “Group”) as
of December 31, 2001 and 2000 and for each of the three years in the period
ended December 31, 2001, included in the offering circular of 1,822,408 Shares with
a nominal value of CHF 30 of the Company. 
Our report with respect thereto is also included in the offering
circular.  The offering circular dated
September 29, 2002 is herein referred to as the Offering Circular.  We have audited the financial statements
Sulzer Medica Ltd. (Parent Company) as of and for the year ended December 31,
2001, included in the Offering Circular. 
Our report with respect thereto is also included in the Offering
Circular.   We have reviewed the
unaudited condensed consolidated financial statements of the Group as of June
30, 2002 and for the six-month period ended June 30, 2002, included in the
Offering Circular.  Our report with
respect thereto (which contains a going concern explanatory paragraph that
describes the Group’s substantial working capital deficit arising from its
obligations under a settlement agreement for which it had not obtained
unconditional long-term financing, discussed in note 11 to the unaudited
condensed consolidated financial statements) is also included in the Offering
Circular.


 


 


47

















 


This
letter is being furnished in reliance upon your representation to us that:


 


(a)  You are knowledgeable  with respect to  the due diligence  review
process  that would be performed if  this placement of securities were being
registered pursuant to the Securities Act of 1933 (the Act).


 


(b)  In connection  with  the offering  of Shares, the  review process you  have
performed is substantially  consistent
with the due  diligence review  process that  you would have  performed
if this placement  of securities  were being registered  pursuant to the Act.


 


In connection with the Offering Circular:


 


1.   We are independent certified public
accountants with respect to the Company under Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants, and its rulings and interpretations, and within the meaning of the
Swiss legislation including the listing rules of the SWX Swiss Exchange.


 


2.   In our opinion, the consolidated financial
statements comply as to form in all material respects with the listing rules of
the SWX Swiss Exchange.


 


3.   We have not audited
any financial statements of the Group as of any date or for any period
subsequent to December 31, 2001; although we have conducted  an audit for the year  ended 
December 31, 2001,  the purpose
(and therefore the scope) of the audit was 
to enable us to express an opinion on the consolidated financial
statements as of   December 31, 2001 and
for the year then ended, but not on the financial statements for any interim
period within that year.   Therefore, we
are unable to and do not express any opinion on the unaudited condensed
consolidated balance sheet as of June 30, 2002 and  the  unaudited  condensed 
consolidated statements  of  income,  
of  shareholders’ equity and
of  cash  flows  for the six-month
periods ended  June 30, 2002 and 2001
included in the Offering Circular,  or
on the financial position, results of operations, or cash flows as of any date
or for any period  subsequent to
December  31, 2001.


 


4.   For purposes of this letter we have read the 2002 minutes of the
meetings of the shareholders, the Board of Directors, the Corporate Governance
Committee, the Finance and Audit Committee and the Management Development and
Compensation Committee of the Group as set forth in the minute books as of
September 27, 2002, officials of the Company having advised us that the minutes
of all such meetings through  that date
were  set forth  therein (except for the  minutes of the  September 27, 2002 Board of Directors meeting which were not
approved in final form, for which drafts were provided to us; officials of the
Company have represented that such drafts include all substantive actions  taken at such  meeting),  and have
carried out other procedures to September 25, 2002 (our work did not
extend  to the period from September 26,
2002  to  September 27, 2002, inclusive), as follows:


 


48

















 


With respect to the period
from  July 1, 2002 to  August 31, 2002, we have:


 


(i)  read the unaudited consolidated financial
data  of the  Group for July and August of both 2002 and 2001, furnished us by
the Company, officials  of the Company
having  advised us that no  such financial data as of any date or for
any period subsequent to  August 31, 2002, were available; and


 


(ii)  inquired of 
certain officials of the  Company
who have responsibility for financial and accounting  matters whether the 
unaudited financial  data
referred  to in (i)  is 
stated on a  basis substantially
consistent  with   that  
of  the   audited   consolidated
financial statements included in the Offering Circular.


 


The foregoing procedures do
not constitute an audit conducted in accordance with generally accepted
auditing standards, auditing standards promulgated by the Swiss profession or
with the International Standards on Auditing issued by the International
Federation of Accountants (IFAC).  
Also, they would not necessarily reveal matters of significance with
respect to the comments in the following paragraph.  Accordingly, we make no representations regarding the sufficiency
of the foregoing procedures for your purposes.


 


5.   Nothing came to our attention as a result of the foregoing
procedures, however, that caused us to believe that:


 


(i)
at  August 31, 2002, there  was any 
change in capital stock or increase 
in  long-term  debt of 
the  Group as compared with
amounts shown on the  June 30, 2002
unaudited condensed consolidated balance 
sheet included in  the Offering
Circular,  or (ii) for the period from
July 1, 2002 to  August 31, 2002,  there was any decrease, as compared to the
corresponding  period  in the 
preceding year,  in total
consolidated net sales, except that the unaudited consolidated balance sheet as
of August 31, 2002, which we were furnished by the Company, showed an increase
from June 30, 2002, in capital stock as follows (amounts shown in CHF
thousands):


 


	
   

  	
   

  	
  Capital
  Stock

  	
   

  
	
  June 30, 2002

  	
   

  	
  300,247

  	
   

  
	
  August 31, 2002

  	
   

  	
  300,319

  	
   

  



 


 


6.   As mentioned in 4, Company officials have advised us that no
consolidated financial data as of any date or for any period subsequent to
August 31, 2002, are available; accordingly, the procedures carried out by us
with respect to changes in financial statement items after August 31, 2002,
have, of necessity, been even more limited than those with respect to the
periods referred to in 4.  We have
inquired of certain officials of the Company who have responsibility for
financial and accounting matters whether (i) at September 25, 2002 there was
any change in the capital stock or increase in long-term


 


 


49

















 


debt of the Group as
compared with amounts shown on the June 30, 2002 unaudited condensed
consolidated balance sheet included in the Offering Circular or (ii) for the
period from July 1, 2002 to September 25, 2002, there was any decrease, as
compared with the corresponding period in the preceding year, in total
consolidated net sales.   On the basis
of these inquiries and our reading of the minutes as described in 4, nothing
came to our attention that caused us to believe that there was any such change,
except as described in the following sentence. We have been informed by
officials of the Company that there continues to be an increase in capital
stock as follows (amounts shown in CHF thousands):


 


	
   

  	
   

  	
  Capital
  Stock

  	
   

  
	
  June 30, 2002

  	
   

  	
  300,247

  	
   

  
	
  September 25, 2002

  	
   

  	
  300,697

  	
   

  



 


 


7.    For purposes of this
letter, we have also read the items identified by you in Appendix 1, which
includes copies of certain pages of the Offering Circular, and have performed
the following procedures, which were applied as indicated with respect to the
symbols explained below:


(A)     We compared the amount or percentage with a
corresponding amount or percentage included in the Group’s consolidated
financial statements included in the Offering Circular, and found such amounts
or percentages to be in agreement after giving effect to aggregation or
rounding, if applicable.  However, we
make no comment with respect to classification or reasons given for changes
between periods, where applicable.


 


(B)                  We recomputed the amount, percentage or
ratio based on the corresponding amount, percentage or ratio in the Group’s
consolidated financial statements included in the Offering Circular and found
them to be in agreement after giving effect to aggregation or rounding, if
applicable.  However, we make no comment
with respect to classification or reasons given for changes between periods,
where applicable.


 


(C)                  We compared or recomputed the
corresponding amount, percentage or ratio with the corresponding amount,
percentage or ratio included in or derived from the Group’s accounting records
based on such accounting records and found it to be in agreement after giving
effect to aggregation or rounding, if applicable.  However, we make no comment with respect to classification or
reasons given for changes between periods, where applicable.


 


(D)                 We recomputed the amount based on the related
amounts in a schedule prepared by the Group from its accounting records, giving
effect to rounding where applicable.  We
a) compared the amounts on the schedule to corresponding amounts appearing in
the accounting records and found such amounts to be in agreement and b)
determined that the schedule was mathematically accurate. However, we make no
comment with 


 


50

















 


                                  respect to classification or reasons given for changes between periods,
where applicable.


 


(E)      With
respect to research and development expenditures, we compared or recomputed the
amount to the corresponding amount in the Group’s audited consolidated
financial statements included in the Offering Circular and found them to be in
agreement after giving effect to aggregation or rounding. However, we make no
comment as to the nature or classification of such expenditures.


 


(F)                   With respect to “EBITDA”, we compared EBITDA to
calculations provided by the Group and found them to be in agreement after giving
effect to aggregation and rounding.  We
compared the calculations to the description of EBITDA included in the
footnotes to the Summary Financial Data and found them to be in agreement.  We compared and agreed the amounts used in
the calculations to the Group’s consolidated financial statements included in
the Offering Circular, or to amounts included in or derived from the Group’s
accounting records, as applicable. 
However, we make no comment as to the appropriateness of the Group’s
definition of EBITDA.


 


(G)      [Tickmark reference not used]


 


(H)      We compared the amount or percentage with
a corresponding amount or percentage included in the Group’s unaudited
condensed consolidated financial statements included in the Offering Circular,
and found such amounts or percentages to be in agreement after giving effect to
aggregation or rounding, if applicable. 
However, we make no comment with respect to classification or reasons
given for changes between periods, where applicable.


 


(I)       We recomputed the amount, percentage or
ratio based on the corresponding amount, percentage or ratio in the Group’s
unaudited condensed consolidated financial statements included in the Offering
Circular and found them to be in agreement after giving effect to aggregation
or rounding, if applicable.  However, we
make no comment with respect to classification or reasons given for changes
between periods, where applicable.


 


(J)       With respect to research and development
expenditures, we compared or recomputed the amount to the corresponding amount
in the Group’s unaudited condensed consolidated financial statements included
in the Offering Circular and found them to be in agreement after giving effect
to aggregation or rounding. However, we make no comment as to the nature or
classification of such expenditures.


 


51

















 


(K)      With respect to “EBITDA”, we compared
EBITDA to calculations provided by the Company and found them to be in
agreement after giving effect to aggregation and rounding.  We compared the calculations to the
description of EBITDA included in the footnotes to the Summary Financial Data
and found them to be in agreement.  We
compared and agreed the amounts used in the calculations to the Group’s
unaudited consolidated condensed financial statements included in the Offering
Circular, or to amounts included in or derived from the Group’s accounting
records, as applicable.  However, we
make no comment as to the appropriateness of the Company’s definition of
EBITDA.


 


(L)      For the Capitalization Table we compared
the amounts and numbers of shares listed under the caption “Actual” with the
corresponding amount in the Group’s unaudited consolidated condensed financial
statements included in the Offering Circular and found them to be in agreement
after giving effect to aggregation or rounding, if applicable.  We compared the amounts and numbers of
shares listed under the caption “As Adjusted,” adjusted for the issuance of the
securities to be offered by means of the Offering Circular and for the proposed
use of the proceeds thereof, as described under “Use of Proceeds,” with the
amounts and numbers of shares shown under the caption “As Adjusted” and found
such amounts and numbers of shares to be in agreement. However, we make no
comments regarding the reasonableness of the “Use of Proceeds” or whether such
use will actually take place.


 


8.   The procedures enumerated in paragraph 7 do not constitute an
audit conducted in accordance with generally accepted auditing standards, auditing standards promulgated by the
Swiss profession or with the International Standards on Auditing issued by the
International Federation of Accountants (IFAC). Accordingly, we make no
representations regarding the sufficiency of the foregoing procedures for your
purposes.


 


9.   It should be understood that we make no
representations regarding questions of legal interpretation or regarding the
sufficiency for your purposes of the procedures enumerated in paragraph 7;
also, such procedures would not necessarily reveal any material misstatement of
the amounts or percentages listed above. Further, we have addressed ourselves
solely to the foregoing data as set forth in the Offering Circular and make no
representations regarding the adequacy of disclosure or regarding whether any
material facts have been omitted.


 


10.   This letter is solely for the information
of the addressees and to assist UBS AG, acting through its business group UBS
Warburg, as representative of the several underwriters, in conducting and
documenting its investigation of the affairs of the Company in connection with
the offering of the Shares covered by the Offering Circular, and it is not to
be used, circulated, quoted, or otherwise referred to for any other purpose,
including but not limited to the registration, purchase or sale of securities,
nor is it to be filed with or  referred
to  in 
whole or  in part  in the 
Offering Circular  or any other
document, except that reference may be made to it in the Underwriting Agreement
or  in any list of closing  documents pertaining to the offering of the
securities covered by the Offering Circular.


 


52

















 


11.  This letter is intended for use within the United States
in connection with the offering or sale of Shares. It is not to be used in any
other jurisdiction whatsoever.


 


Yours
very truly,


 


 


PricewaterhouseCoopers Ltd.


 


 


 


 


	
   

  	
   

  	
   

  
	
  R. Rausenberger

  	
   

  	
  St. Haag

  



 


 


53

















 


Appendix 1


 


Copies of
certain pages of the Offering Circular


 


 


 


 


54

















 


SCHEDULE 12.3


 


Form of Officers’
Certificate


 


Officer’s Certificate


[On the Letterhead of Centerpulse Ltd.]


 


UBS AG,
acting through its business group UBS Warburg


Europastrasse 1


CH-8152 Zurich- Opfikon


 


InCentive Capital AG


Baarerstrasse 8


CH-6300 Zug


 


[ • ], 2002


 


Dear Sirs


 


CENTERPULSE LTD.

Offering of •
Registered Shares of Centerpulse Ltd. (the “Offering”)


 


We refer to the underwriting
and subscription agreement entered into between Centerpulse Ltd. (“Centerpulse”),
UBS AG, acting through its business group UBS Warburg (“UBS Warburg”), and InCentive
Capital AG (“InCentive”) (UBS Warburg and InCentive are together referred
to as the “Underwriters”), dated September 27, 2002 (the “Underwriting
Agreement”).


 


Capitalised terms used in this
Certificate shall have the same meaning as set forth in the Underwriting
Agreement.


 


The undersigned, Dr. Max Link
and Urs Kamber, hereby certify that they are the authorized signatories of
Centerpulse, and that as such, they are authorized to execute and deliver this
Certificate on behalf of Centerpulse and, with reference to the Underwriting
Agreement, further certify, represent and warrant on behalf of Centerpulse as
follows:


 


1.                             The representations and
warranties of Centerpulse contained in the Underwriting Agreement, which relate
to Centerpulse and its subsidiaries, continue to be true as of the date of this
Officer’s Certificate.


 


2.                             Centerpulse has not
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labour dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and since the
respective dates as of which information is given in the Offering Circular,
there has not been any change in the registered issued share capital of
Centerpulse, or the incurring of any new third-party financial debt outside of
the ordinary course of business, taken as a whole, or any


 


55

















 


material
adverse change, or any development or event involving a prospective material
adverse change in or affecting the business, management, consolidated financial
condition, shareholders’ equity, properties, prospects  or results of operations of Centerpulse and
its subsidiaries, taken as a whole, otherwise than as set forth in the Offering
Circular.


 


 


Yours faithfully,


 


Centerpulse Ltd. 


 


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Dr. Max Link, CEO Centerpulse Ltd.)

  	
  (Urs Kamber, CFO Centerpulse Ltd.)

  



 


56

















 


SCHEDULE 12.4(a)


 


Form of Disclosure
Letter and Form of Legal Opinion from Bär & Karrer


 


UBS AG, acting through


its business group UBS Warburg


Europastrasse 1


CH-8152 Opfikon


 


on behalf of the Underwriters


named in the Underwriting


Agreement


 


Zurich, 29 September 2002


32287/166//X1035517


 


Ladies and Gentlemen,


 


We are acting as Swiss legal
counsel to Centerpulse AG, a Swiss company limited by shares (the “Company”),
in connection with an offering by the Company in accordance with the offering
circular dated 29 September 2002 (the “Offering Circular”) relating to a share
capital increase by way of an offering of preemptive rights to subscribe for registered
shares with a nominal value of CHF 30 each (the “Offering”). This letter is furnished
to you pursuant to Section 12.4(a) of the subscription and underwriting agreement
dated 27 September 2002 between the Company, UBS AG and Incentive Capital AG
(the “Underwriting Agreement”). Capitalized terms used herein and not otherwise
defined have the meaning assigned to such terms in the Offering Circular.


 


Because the primary purpose of
our professional engagement was not to establish or confirm factual matters or
financial, accounting or statistical information, and because many
determinations involved in the preparation of the Offering Circular are of a
wholly or partially non-legal character or relate to legal matters outside the
scope of our opinion letter to you of even date herewith, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering 


 


57

















 


Circular, and we make no
representation that we have independently verified the accuracy, completeness
or fairness of such statements.


 


In the course of our acting as
counsel to the Company in connection with the Company’s preparation of the
Offering Circular, we participated in conferences and telephone conversations
with directors, officers and other representatives of the Company,
representatives of U.S. counsel to the Company, representatives of the Company’s
independent auditors, representatives of the underwriters and representatives
of Swiss and U.S. counsels to the underwriters, during which conferences and
conversations the contents of the Offering Circular were discussed, and we
reviewed certain corporate records and documents furnished to us by the
Company.


 


Based on our participation in
such conferences and conversations, our review of such records and documents as
described above, a disclosure letter of Weil, Gotshal & Manges as U.S.
counsel to the Company with respect to matters addressed to therein, and
attached as annex hereto, and the experience we have gained in our legal
practice, we advise you that no information has come to our attention which
leads us to believe that the Offering Circular (except the financial statements
and schedules and other financial data as well as matters relating to Implant
Litigation in North America included therein, as to which we express no view)
as of the date thereof or hereof, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.


 


We are furnishing this letter
to you solely for your benefit in connection with the Offering. This letter is
not to be used, circulated, quoted or otherwise referred to for any other
purpose.


 


Yours faithfully,


 


 


BÄR & KARRER


 


58

















 


Draft of 

September 27, 2002


 


Form of WGM
Disclosure Letter


(subject to Opinion
Committee Review)


 


September [28], 2002


 


Bär & Karrer


Seefeldstrasse 19


CH-8024 Zurich


Switzerland


 


 


Dear Sirs:


 


We have acted
as special counsel to Centerpulse Ltd. (the “Company”) in connection with the
preparation of the Offering Circular, dated September [28], 2002, (the
“Offering Circular”) relating to the capital increase by way of a rights
offering (the “Offering”) of shares with a nominal value of CHF 30 each of the
Company.


 


In so acting,
we have examined originals or copies (certified or otherwise identified to our
satisfaction) of the Offering Circular and such corporate records, agreements,
documents and other instruments, and such certificates or comparable documents
of public officials and of officers and representatives of the Company, and
have made such inquiries of such officers and representatives, as we have
deemed relevant and necessary as a basis for the opinions hereinafter set
forth.


 


In our
examinations, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies and the authenticity
of the originals of such latter documents. 
As to all questions of fact material to this letter that have not been
independently established, we have relied upon certificates or comparable
documents of officers and representatives of the Company.


 


This letter is
based upon information that we gained in the course of the services described
herein, considered in the light of our understanding of the Securities Act of
1933, as amended (the “Securities Act”), and the experience we have gained
under the Securities Act through our practice in the field.  In evaluating the laws of Switzerland, we
have relied upon, and subject to the qualifications set forth therein, the
opinion of Bär & Karrer, Swiss counsel to the Company dated today and
delivered to UBS AG (“UBS”) on behalf of the Underwriters named in the
Subscription and Underwriting Agreement (the “Underwriting Agreement”) among
Centerpulse Ltd., UBS, and InCentive Captial AG, dated September 27, 2002 with
respect to a share capital increase by way of an offering of preemptive rights
to subscribe for shares with nominal value of CHF 30 each.  We are providing this letter to you solely
for the purpose of your rendering a disclosure letter to UBS on behalf of the
Underwriters named in the Underwriting Agreement.


 


59

















 


We have
participated in conferences with directors, officers and other representatives
of the Company, representatives of Bär & Karrer, representatives of the
Company’s independent auditors, representatives of the underwriters and
representatives of Swiss and US counsel to underwriters at which the Offering
Circular was discussed, and, although we have not independently verified and
are not passing upon and assume no responsibility for the accuracy,
completeness or fairness of the statements contained in the Offering Circular
no facts have come to our attention that have led us to believe that the
Offering Circular, as of the date hereof, contains an untrue statement of
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they are made,
not misleading (it being understood that we express no view with respect to the
financial statements and related notes and the other financial, statistical and
accounting data included in the Offering Circular or excluded therefrom).


 


This letter is
rendered solely for your benefit in connection with the transactions described
herein.  This letter may not be used or
relied upon by any other person, nor may this letter or any copies hereof be
furnished to a third party, filed with a governmental agency, quoted, cited or
otherwise referred to without our prior written consent.


 


 


Very truly
yours,


 


60

















 


 


UBS AG, acting through


its business group UBS Warburg


Europastrasse 1


CH-8152 Opfikon


 


on behalf of the Underwriters


named in the Underwriting


Agreement


 


Zurich, 29 September 2002


 


Ladies and Gentlemen,


 


We have acted as Swiss counsel
to Centerpulse AG, a Swiss company limited by shares (the “Company”), in
connection with an offering by the Company pursuant to an offering circular
dated 29 September 2002 (the “Offering Circular”) relating to a share capital
increase by way of an offering of preemptive rights to subscribe for registered
shares with a nominal value of CHF 30 each (the “Offering”). This letter is
furnished to you pursuant to Section 12.4(a) of the subscription and
underwriting agreement dated 27 September 2002 between the Company, UBS AG and
Incentive Capital AG (the “Underwriting Agreement”).


 


Capitalized terms used and not
defined herein are used herein as defined in the Underwriting Agreement.


 


I.              Documents
examined


 


In arriving at
the opinions under Section III below we have examined the following documents:


 


61

















 


(a)           Copies of the
following certified extracts from the respective commercial registers:


 


•                  for the Company
dated 26 September 2002;


 


•                  for Centerpulse
Management AG dated 26 September 2002, Sulzer Ortopedics Ltd dated 26 September
2002, Sulzer Orthopedics (Switzerland) Ltd dated 26 September 2002, Sulzer
Cardiovascular AG dated 26 September 2002 (the “Subsidiaries”).


 


(b)                                Copies of the articles
of association of the Company and the Subsidiaries in their latest versions as
confirmed by the respective commerical registers as of 27 September 2002 (in
relation to the Company) and 26 September 2002 (in relation to the
Subsidiaries).


 


(c)                                 Copy of the Company’s
organisational rules as approved by a board resolution as of 28 August 2002,
together with the duly signed minutes of this board meeting.


 


(d)                                Copies of the share
registers of each of the Subsidiaries dated 26 September 2002.


 


(e)                                 Minutes of the
resolutions taken at the shareholders’ meeting of the Company as of 17 May
2002.


 


(f)                                   Copies of the
following resolutions of the board of directors (Verwaltungsrat) of the
Company authorizing, inter alia, the Offering and the signing
of the Agreement:


 


•                 resolutions
of the board of directors of the Company dated 12 September 2002;


 


•                 resolutions
of the board of directors of the Company dated 27 September 2002.


 


(g)                                Copy of the Offering
Circular dated 29 September 2002.


 


(h)                                Copy of the decision of
the SWX Swiss Exchange dated 26 September 2002 on the listing and admission of
the Company’s Offered Shares for trading on the main board (Hauptsegment)
of the SWX Swiss Exchange and the admission for trading of the Preemptive
Rights at the SWX Swiss Exchange (the “Admission Decision”).


 


62

















 


(i)                                    Copy of the
following executed agreements (collectively referred to as the “Agreements”):


 


•                  the Underwriting
Agreement;


 


•                  a copy of a
draft marked as PBWT DRAFT – 9/18/02 of the restricted deposit agreement, to be
dated as of 9 October 2002 (the “Restricted Deposit Agreement”) among the
Company, Citibank N.A. as depositary, and the owners and beneficial owners from
time to time of restricted American Depositary Receipts representing Restrited
ADSs.


 


(h)                                 Confirmations in
writing by the Company’s Head Legal and Compliance International and the Head
Treasury dated 27 September 2002 to the effect that the Company’s fiscal year
corresponds to the calendar year and that neither the Company nor the
Subsidiaries have received from the debt collection office a threat of
bankruptcy (“Konkursandrohung”).


 


II.            Assumptions


 


In rendering this Opinion, we have assumed:


 


(a)                        the genuineness of all
signatures, and factual information given in connection with the Agreements
submitted to us;


 


(b)                       the authenticity of any
agreements, certificates, instruments and documents submitted to us as
originals;


 


(c)                        the conformity to the originals
of any agreements, certificates, instruments and documents submitted to us as
copies;


 


(d)                       due execution and delivery of
the Agreements by the parties thereto other than the Company by persons with
the requisite signing authority conferred upon them in accordance with
applicable law, the respective articles of association and any internal
regulations of each such party to such Agreements;


 


(e)                        that all representations made
and warranties given by any parties to the Agreements submitted to us are true
and accurate as to matters of fact;


 


(f)                          that the data contained in
the copies of the extracts of the commercial registers, articles of association
and share registers enumerated under Section I. (a), (b) and (c) above
respectively is still true and correct;


 


(g)                       that the sale and offering of
the Offered Shares will be conducted in the manner as described in the Offering
Circular and the Agreements;


 


63

















 


(h)                       that  any conditions under the Admission Decision have been or will be
duly met by the parties concerned;


 


(i)                           the respective parties to
the Agreements other than the Company have the capacity, power and authority to
execute, deliver and perform such agreements;


 


(j)                           that all authorizations,
approvals, consents, licenses, exemptions and other requirements, other than
those required by Swiss law, for the legality, validity and enforceability of
the Agreements have been duly obtained prior to the signing of such agreements
and are and will remain in full force and effect and that any related
conditions to which the parties thereto are subject have been satisfied.


 


III.                                 Opinion


 


Based on the foregoing assumptions and subject to the qualifications
set out under Section IV hereinafter, we are of the opinion that:


 


(a)                                each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of
Switzerland and has the corporate power and authority to own its property, hold
subsidiaries and transact business in Switzerland as described in the Offering
Circular; neither the Company nor any of the Subsidiaries have received a
threat of bankruptcy (“Konkursandrohung”) from the debt
collection office;


 


(b)                               the
issued and outstanding nominal share capital of the Company conforms as to
legal matters to the description thereof contained in the Offering Circular,
and all of the issued shares of capital stock of the Company have been duly and
validly authorised and issued, and are fully paid and non-assessable;


 


(c)                                if and when the Board of Directors of the Company will have
resolved to implement the capital increase relating to the Offering and the
registration of the capital increase will have been made with the commercial
register, the Company’s share capital will be validly increased and the Offered
Shares will be validly issued;


 


(d)                               the
offering and the sale of the Offered Shares and the execution and performance
by the Company of its obligations under the Agreements will not result in any
violation by the Company of (i) Swiss law or (ii) the Company’s articles of
association or organizational rules;


 


64

















 


(e)                                each of the Agreements has been duly authorized and insofar
as Swiss law governs the formalities of execution and delivery thereof,
executed and delivered by the Company, and the Underwriting Agreement, which is
governed by Swiss law, constitutes a valid and legally binding agreement of the
Company, enforceable in accordance with its terms;


 


(f)                                  all approvals, authorizations, consents or registrations of
or with any court or governmental agency or self-regulatory body required under
Swiss law for the issue and sale of the Offered Shares and the trading of the
Preemptive Rights have been obtained or made;


 


(g)                               the
Offering Circular contains all information items (headings) required by and is
in accordance with applicable Swiss law and the listing rules of the SWX Swiss
Exchange;


 


(h)                               the
Company’s agreement to the choice of Swiss law as the law governing the
Underwriting Agreement is valid and binding and would be upheld by the Swiss
courts, and the submission of the Company to the non-exclusive jurisdiction of
the Commercial Court of the Canton of Zurich (Handelsgericht Zürich) and
the jurisdiction of any other court in which any suit, action or other
proceedings arising out of or in connection with the Underwriting Agreement has
been brought against any of the Underwriters is valid and legally binding on
the Company and would be upheld by the Swiss courts;


 


(i)                                   under the present laws of Switzerland, cash dividends and
other cash distributions declared and payable in Swiss francs may be converted
into any other convertible currency in Switzerland and except for certain
restrictions with respect to certain jurisdictions subject to international and
national sanctions such as e.g. Iraq may be transferred from Switzerland and,
except as set forth in the Offering Circular, all cash dividends to holders of
Shares and ADSs who are non-residents of Switzerland will not be subject to
Swiss income, withholding or other taxes and are otherwise free and clear of
any other tax, duty, withholding or deduction in Switzerland and may be paid
without the necessity of obtaining any governmental authorization or further
approval of the SWX Swiss Exchange;


 


(j)                                   the statements in the Offering Circular under the captions
“The Company” — Incorporation, Company Name and Registered Office/Past
Corporate Events/Business Purpose”/Fiscal Year/Subsidiaries and Shareholdings”
(“Subsidiaries and Shareholdings” only with respect to the Subsidiaries as


 


65

















 


defined herein), “Taxation – Taxation of Investments in Shares in Switzerland”
and “Share Capital and Shares”, in each case insofar as such statements purport
to summarize statutory or regulatory provisions of Swiss law or the Company’s
articles of association or organisational rules or the Subsidiaries’ articles
of association referred to therein, fairly summarize the matters referred to
therein in all material respects and insofar are true and correct in all
material respects and not misleading;


 


(k)                        other than as described in the
Offering Circular (and other than as borne by the Company), no ad valorem
stamp duty, stamp tax, stamp duty reserve tax or issue, documentary,
certification or other similar tax is payable to any government department or
other taxing authority of or in Switzerland in connection with the allocation
of the Preemptive Rights, the sale and delivery by the Company of the Offered
Shares to or for the respective account of the Global Coordinator or the sale
and delivery by the Global Coordinator of the Offered Shares to the initial
purchasers thereof.


 


IV.                                Qualifications


 


The above opinions are subject to the following qualifications:


 


(a)                                We are members of the Zurich Bar and do not hold ourselves to
be experts in any laws other than the laws of Switzerland. Accordingly, our
Opinion is confined to Swiss law and in particular the legal position of the Company
under Swiss law.


 


(b)                       Our Opinion is based on the
Assumptions under Section II hereinbefore and confined to our review of the documents
referred to under Section I above and Swiss  law as existing and interpreted at the
date of this Opinion. We do not opine as to any facts or circumstances
occurring or coming to our attention subsequent to the date hereof.


 


(c)                        Our Opinion is subject to the
fact that the nature and enforcement of obligations may be affected by lapse of
time, failure to take action or laws (including, without limitation, laws
relating to bankruptcy, fraudulent transfer, insolvency, liquidation,
receivership, moratorium, reorganization and reconstruction) and defenses
generally relating to or affecting creditors’ rights and to the general equity
principles including the abuse of rights.


 


66

















 


(d)                       Enforceability may be also limited
with respect to the indemnification and contribution undertaking provided by
the Company which might apply if a court considers the act of the indemnified
person as being willful or grossly negligent.


 


(e)                        Our Opinion is further subject
to the qualification that the indemnification and contribution obligations of
the Company under the Underwriting Agreement are subject to (A) Art. 678 and
680 of the Swiss Code of Obligations (“CO”), which provisions prohibit the
repayment to the Company’s shareholders (or to third parties affiliated to a
shareholder) of (a) the capital surplus (agio) and (b) the nominal share
capital of the Company; and (B) public policy considerations in connection with
Art. 20 and Art. 21 CO and Art. 2 para. 2 of the Swiss Civil Code as well as
other general principles of equity. In view of these provisions, a holding
company may not redeem its paid-in share capital and general reserves in the
amount of one fifth of the paid-in share capital. It is controversial, however,
to what extent the prohibitions and limitations expressed above also apply to
indemnities given in connection with an underwriting and it is our best belief
that courts would not apply the above rules to payments under the aforementioned
indemnities that are made out of the Company’s unrestricted capital surplus. If
the courts were, however, to apply these rules, certain undertakings and
indemnities of the Company may not be enforceable against the Company.


 


(f)                          We express no opinion on the
conformity of the Offering, the sale of the Offered Shares and the execution
and performance by the Company of its obligations under the Agreements with the
principle of equal treatment as a matter of Swiss law.


 


(g)                       In this Opinion, Swiss legal
concepts are expressed in English terms and not in their original Swiss terms.
The concepts concerned may not be identical to the concepts described by the
same English terms as they exist under the laws of other jurisdictions. This
Opinion may, therefore, only be relied upon subject to the reservation that any
issues of interpretation or liability arising hereunder will be governed by
Swiss law and be brought before a Swiss court.


 


(h)                       Our Opinion is subject to the
following general qualifications:


 


(a)                        no opinion is expressed as to
the accuracy of the representations and warranties on facts set out in the
documents reviewed or the factual background assumed therein except as
expressly otherwise stated elsewhere in this opinion letter;


 


67

















 


(b)                       for enforcement proceedings in
Switzerland a judgment expressed in a currency other than Swiss Francs will
have to be converted into Swiss Francs;


 


(c)                        the transmission of judicial
documents, including service of process, in a manner other than provided by the
Hague Convention on Signification and Notification Abroad of Judicial and
Extrajudicial Acts in Civil or Commercial Matters of November 15, 1965 could be
held invalid by a court in Switzerland despite a Swiss party having consented
to such service and notification; and the enforceability of a foreign judgment
rendered against the Company is subject to the limitations set forth in (a) the
Lugano Convention on Jurisdiction and Enforcement of Judgments in Civil and
Commercial Matters of September 16, 1988, (b) such other treaties to which
Switzerland is bound and (c) the Swiss Federal Act on Private International
law.


 


This Opinion is rendered solely
to the persons to whom it is addressed for the purpose of the transaction
described herein. This letter is not to be used, circulated, quoted or
otherwise referred to for any other purpose and may only be relied upon on
condition that it shall be governed by and construed in accordance with the
laws of Switzerland. It may not be used, circulated, quoted, referred to or
relied upon by any person other than the persons to whom it is addressed nor
for any other purpose without our prior written consent in each instance. 


 


 


Yours faithfully,


 


 


BÄR & KARRER


 


68

















 


SCHEDULE 12.4(b)


 


Form of Legal Opinion
from Lenz & Staehelin


 


 


Confidential


UBS
AG acting through its business group UBS Warburg


Europastrasse 1


CH -
8152 Opfikon


Switzerland


 


(the
“Global Coordinator”)


 


on
behalf of the Underwriters


named
in the Underwriting Agreement


 


 


Zurich, September [•], 2002 [October [•], 2002]


 


Centerpulse
Ltd. / Capital Increase with Rights Offering (the “Offering”)


 


Ladies
and Gentlemen:


 


We have acted as Swiss counsel for the Global Coordinator in connection
with the Offering of Centerpulse Ltd. (the “Company”) as described further in
the Subscription and Underwriting Agreement and the Offering Circular (as
defined below). Capitalized terms used and not defined herein are used herein
as defined in the Subscription and Underwriting Agreement (as defined below).


 


1.                                      For the purposes of this opinion below we
have examined and relied on the fol­lowing documents:


 


(i)                                     a
copy of an extract from the commercial register of the Canton of Zurich (the
“Commercial Register”) regarding the Company dated [in the 1st Opinion:
September 26, 2002 [in the 2nd Opinion: October [•], 2002] [in der 3rd Opinion: October
[•], 2002(the
“Register Extract”);


 


(ii)                                  a
copy of the articles of association (Statuten) of the Company dated May 17,
2002 shown on the Register Extract as being the most recent articles of
association filed with the Commercial Register [2nd and 3rd Opinion: a copy
of the articles of association (Statuten) of the Company dated October [•], 2002 shown on the
Register Extract as being the most recent articles of association filed with
the Commercial Register] (the “Articles of Association”), and a copy of the
organizational regulations (Organisationsreglement) of the Company
(the “Organizational Regulations”) along with a copy of the resolution of the
Company’s Board of Directors dated August 22, 2002 approving the Organizational
Regulations;


 


69

















 


(iii)                               a
copy of (a) the notarized deed dated May 17, 2002 regarding the resolutions of
the shareholders meeting of the Company with respect to the creation of
authorized share capital (genehmigtes Aktienkapital) (the
“Shareholders Meeting’s Resolution”), (b) the resolutions of the Board of
Directors dated September 27, 2002 regarding the increase of the share capital
from CHF 300’247’110 by CHF [•]
to CHF [•] (the
“Capital Increase”) (Erhöhungsbeschluss) and (c) of the
resolution of the Board dated September 27, 2002 regarding the approval of the
Subscription and Underwriting Agreement (as defined below) and the
authorization for execution, [in the 2nd and 3rd 
Opinion and (d) of the notarized deed dated October [9], 2002
of the Board of Directors of the Company regarding the implementation of the
Capital Increase (Feststellungsbeschluss)  and (e) of the subscription forms signed
by the Global Coordinators and InCentive Capital AG (“InCentive”),
respectively];


 


(iv)                              a
copy of the Offering and Listing Circular dated September [•], 2002 (the “Offering Circular”);


 


(v)                                a
signed copy of the subscription and underwriting agreement dated September 27,
2002( the “Subscription and Underwriting Agreement”);


 


(vi)                             copies
of excerpts from the relevant commercial registers regarding (a) Centerpulse
Management Ltd., Zurich, (b) Sulzer Orthopedics Ltd., Baar, (c) Centerpulse Orthopedics
(Switzerland) Ltd, Münsingen, and (d) Sulzer Cardiovascular Ltd., Baar
(together the “Swiss Subsidiaries”), each dated September 26, 2002, and copies
of the articles of associations of each of the Swiss Subsidiaries shown on the
relevant register extract as being the most recent articles of association
filed with such relevant commercial register;


 


(vii)                          a copy
of the letter by the SWX Admission Board of the SWX Swiss Exchange addressed to
UBS Warburg dated September 26, 2002 in relation to the admission of the
Preemptive Rights to trading and the listing of the Offered Shares on the SWX
Swiss Exchange (the “SWX Letter”)].


 


2.                                      In rendering this
opinion, we have assumed:


 


(i)                                    the genuineness of
all signatures;


 


(ii)                                 the authenticity of
all agreements, certificates, instruments and documents submitted to us as
originals;


 


(iii)                              the completeness of and
conformity to the originals of all agreements, certificates, instruments and
documents submitted to us as copies;


 


(iv)                             the valid existence of
each of the parties to the Subscription and Underwriting Agreement under any
applicable law (other than the Company);


 


(v)                                the Offering to be
conducted in the manner as described in the Offering Circular and the
Subscription and Underwriting Agreement;


 


70

















 


(vi)                             the performance of any
obligations under the Subscription and Underwriting Agreement, being required
to be performed in any jurisdiction outside Switzerland, not to be illegal or
unenforceable by virtue of the laws of such jurisdiction;


 


(vii)                          the due authorization of the
Subscription and Underwriting Agreement and any other documents or instruments
by the parties thereto (other than the Company) and the due execution of the
Subscription and Underwriting Agreement and any other documents or instruments
by the parties thereto by persons who were duly authorized by each party to the
Subscription and Underwriting Agreement;


 


(viii                           the conditions under the SWX
Letter having been, or to be duly met by the parties concerned;


 


(ix)                               each of the Swiss
Subsidiaries being a direct or indirect wholly owned subsidiary of the Company;


 


(x)                                  the Shareholders
Meeting’s Resolutions not being challenged by a dissenting shareholder in court
pursuant to Art. 706 et seq. of the Swiss Code of Obligations (CO).


 


We have not investigated any representations
or warranties made by the parties pursuant to the Subscription and Underwriting
Agreement and any statements setting forth in the Offering Circular, except to
the extent that such representations and warranties and statements are
explicitly covered by the opinion expressed below.


 


 


3.                                      Based on the
foregoing and subject to the qualifications set out herein, we are of the
opinion that:


 


(i)                                     The
Company and each of the Swiss Subsidiaries is a stock corporation (Aktiengesellschaft)
validly existing under the laws of Switzerland and has the corporate power and
authority under its articles of association and, with respect to the Company
the Organizational Regulations, to own its properties and to conduct its
business in the manner described in the Offering Circular.


 


(ii)                                  [in the 1st
Legal Opinion: Upon the resolution of the Board of Directors of the
Company regarding the implementation of the Capital Increase and the
registration of the Capital Increase with the Commercial Register, the
Company’s share capital will be validly increased and the Offered Shares
validly issued.]


 


[in
the 2nd and 3rd Legal Opinion: The Offered Shares have been validly
issued and conform to the description of the Offered Shares in the Offering
Circular.]


 


(iii)                               Under
the Articles of Association and the Organization Regulations, the Company has
the corporate power to enter into the Subscription and Underwriting Agreement.


 


71

















 


(iv)                              The
Subscription and Underwriting Agreement have been duly authorized by the
Company. Except for the capital reduction to be resolved by a shareholders’
meeting in an Event of Non-Completion (as defined in the Subscription and
Underwriting Agreement), no further authorization by any shareholders’ meeting
of the Company is required in connection with the execution, delivery and
performance of the Agreement.


 


(v)                                 The
obligations of the Company under the Subscription and Underwriting Agreement are
valid and legally binding and are enforceable in accordance with their
respective terms against the Company.


 


(vi)                              The
execution, delivery and performance by the Company of its obligations under the
Subscription and Underwriting Agreement does not violate any provisions of the
Articles of Association and the Organizational Regulations.


 


(vii)                                                  The
statements set forth in the Offering Circular under the captions (a) “The
Company” with respect to “Incorporation, Company Name and Registered Office”,
“Past Corporate Events”, “Business Purpose”, “Fiscal Year”, “Subsidiaries and
shareholdings” with respect to the Swiss Subsidiaries, (b) “Share Capital and
Shares”, with respect to “Share Capital Structure”, “Form of Shares”, Transfer
of Shares”, “Shareholders’ Meetings, “Preemptive Rights”, Borrowing Power”,
“Conflict of Interest”, “Repurchase of Shares” with respect to the first
paragraph, “Notices”, “Duration and Liquidation”, “Mandatory Bid Rules”,
“Notification and Disclosure of Major Share Interests”, and (c) “Taxation” with
respect to “Taxation of Investments in Shares in Switzerland”, to the extent
that such statements relate to matters of Swiss law or the Articles of
Association or of the Organizational Regulations, are true and correct in all
material respects and not misleading.


 


(ix)                                The
Offering Circular contains all the information items (headings) required by and
is in accordance with Art. 652a CO and the listing rules of the SWX Swiss
Exchange in relation to the contents of a offering and listing circular for
shares, and pursuant to the SWX Letter, subject to the conditions (Auflagen)
set forth therein, the Preemptive Rights have been admitted to trading, and the
Offered Shares approved for listing on the SWX Swiss Exchange.


 


(x)                                   The
Company’s agreement to the choice of Swiss law as the law governing the
Subscription and Underwriting Agreement is valid and binding and would be
upheld by the Swiss courts, and the submission of the Company to the
non-exclusive jurisdiction of the Commercial Court of the Canton of Zurich (Handelsgericht
Zürich) and the jurisdiction of any other court in which any suit,
action or other proceedings arising out of or in connection with the
Subscription and Underwriting Agreement has been brought against any of the
Underwriters (as defined in the Subscription and Underwriting Agreement) is
valid and legally binding on the Company in Switzerland and would be upheld by
the Swiss courts.


 


4.                                      The
foregoing opinions are subject to the following qualifications:


 


(i)                                    We
express no opinion with respect to any laws other than the laws of Switzerland
in effect on the date hereof.


 


72

















 


(ii)                                 Enforceability
of the Subscription and Underwriting Agreement may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights in general.


 


Enforceability may further be limited to the indemnification
undertaking provided by the Company if a court considers that the indemnified
person has acted willfully or by gross negligence (as set out in Art. 100 CO).


 


(iii)                              Specific
performance of the parties’ obligations under the Subscription and Underwriting
Agreement may not be available in all instances but only damages upon proof of
the damage suffered.


 


(iv)                             The
indemnities given by the Company to the Global Coordinator (and InCentive, and
similar obligations of the Company pursuant to the Sub­scription and Underwrit­ing
Agreement, may not be enforce­able due to man­datory provisions of Swiss
company law (Art. 678 and Art. 680 (2) CO) prohib­iting the repayment of the
paid-in share capital to sharehold­ers.


 


(v)                                The
Company’s obligation to conduct a capital reduction in an Event of
Non-Completion (as defined in the Subscription and Un­derwriting Agreement) may
not be valid, binding and enforceable due to man­datory provisions of Swiss
company law as such obligation might be beyond the corporate powers of the
Company given that such capital reduction has to be resolved by a shareholders
meeting.


 


(vi)                             The
Company’s obligation to purchase the Offered Shares from the Global Coordinator
(and InCentive) in an Event of Non-Com­pletion (as defined in the Subscription
and Underwriting Agreement) is subject to Article 659 (1) CO pursuant to which
a company is only al­lowed to pur­chase its own shares to the extent it has
freely disposable eq­uity (frei verwendbares Eigenkapital) in the
amount of the purchase price of such shares and if the total nominal value of
the purchased shares does not ex­ceed 10% of the nominal share capital of the
company acquiring own shares and (ii) Article 680 (2) CO pursuant to which the
sharehold­ers may not reclaim the amount paid in.


 


(vii)                          Following
the prevailing view in Switzerland, preemptive rights (Be­zugsrechte) not exercised
by existing shareholders have to be used by the Company’s Board of Directors in
the interest of the Company and in compliance with the equal treatment rules of
Swiss company law. To the extent that the allocation of Offered Shares for
which Preemptive Rights are not exercised in the Offering to the Global
Coordinator and InCentive is not in the interest of the Company or violates the
equal treatment rules of Swiss company law, the Board of Directors may become
liable for damages.


 


(viii)                       The
non-granting of Preemptive Rights and the subsequent non-alloca­tion of Offered
Shares to shareholders of the Company who are not allo­cated Preemptive Rights
or Offered Shares in the Offering due to appli­cable for­eign se­curities laws
prohibiting such allocation may violate the equal treatment rules and the
provisions regarding preemptive rights of Swiss company law,


 


73

















 


and as a consequence thereof, the Board of Director may be­come liable
for the damages caused to such sharehold­ers.


 


(ix)                               The
Company’s obligation regarding the clear market provision set forth in the
Subscription and Underwriting Agreement may not be valid, binding and
enforceable due to man­datory provisions of Swiss company law as such
obligation might be beyond the corporate powers of the Company given that the
issue of new shares and the creation of author­ized and/or conditional share
capital has to be re­solved by a shareholders meeting.


 


(x)                                  While
under the Swiss Federal Withholding Tax Act as interpreted and applied at
present the Company is not required to make any deduction for Swiss With­holding
Tax (Verrechnungssteuer)
on any payments which it is, or may be re­quired to make under the Subscription
and Underwriting Agreement, we cannot exclude the risk, that in view of Section
14 of the Swiss Withholding Tax Act the undertakings of the Company to make all
payments without deduction of Swiss With­holding Tax and to gross-up its
payments accordingly, may be consid­ered unen­forceable in case that at any
time such payments should become subject to any Swiss With­holding Tax
requirement.


 


(xi)                               The
enforceability of a foreign judgement (if any) rendered against the Company is
subject to the limitations set forth in the Lugano Convention on Jurisdiction
and Enforcement of Judgements in Civil and Commercial Matters of September 16,
1988, such other treaties to which Switzerland is bound, and the Swiss Federal
Act on Private International Law (Bun­desgesetz über das internationale Privatrecht).


 


(xii)                            We
express no opinion on the correctness or completeness of the Offer­ing Circular
other than as expressly set forth above.


 


(xiii)                         in the 1st
Legal Opinion: The due and timely registration of the Capital
Increase as provided for in the Subscription and Underwriting Agreement inter alia
depends on the proceedings before the Commercial Register, and no assurance can
be given that the registration of the Capi­tal In­crease will occur on October
[10], 2002 before 8:00 CET as provided for in the Sub­scription and
Underwriting Agreement. Further, it has to be noted that according to the SWX
Letter, the extract from the Commercial Register evidencing the registration of
the Capital Increase has to be delivered to the SWX on October 9, 16.00 at the
latest.


 


This opinion is solely addressed to you and solely in connection with
the transactions contemplated by the Subscription and Underwriting Agreement.
This opinion is not to be used, circulated, quoted, relied on, or otherwise
referred to for any other purpose without our prior written consent.


 


This opinion shall be governed by and construed in accordance with the
laws of Switzerland.


 


 


Yours
sincerely,


 


74

















 


Lenz
& Staehelin


 


 


Patrick
Schleiffer


 


75

















 


SCHEDULE 12.4(c)


 


Form of 10b-5 Letter
from Cleary, Gottlieb, Steen & Hamilton


 


 


Writer’s Direct Dial:  +44 207
614 2226


 


September 29,
2002


 


UBS AG, acting through


its business group UBS Warburg


As Representative of the
several Underwriters


Europastrasse 1


CH-8152 Opfikon


Zurich, Switzerland


 


Ladies and Gentlemen:


 


We have acted
as U.S. counsel to you in connection with the offering by Centerpulse AG, a
company limited by shares (Aktiengesellschaft), incorporated with
limited liability under the laws of Switzerland (the “Company”), pursuant to an
offering circular dated September 29, 2002 (the “Offering Circular”) of rights
to subscribe for common shares, par value CHF 30 per share (the “Offering”).  This letter is furnished to you pursuant to
Section 12.4(c) of the underwriting agreement dated September 27, 2002  among the Company, UBS Warburg and InCentive
Capital AG.


 


Because the
primary purpose of our professional engagement was not to establish or confirm
factual matters or financial, accounting or statistical information, and
because many determinations involved in the preparation of the Offering
Circular are of a wholly or partially non-legal character or relate to legal
matters outside the scope of our opinion letter to you of even date herewith,
we are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Offering Circular
and we make no representation that we have independently verified the accuracy,
completeness or fairness of such statements.


 


However, in
the course of our acting as counsel to you in connection with the Company’s
preparation of the Offering Circular, we participated in conferences and telephone
conversations with representatives of the Company, representatives of Swiss
counsel to the Company, representatives of U.S. counsel to the Company,
representatives of independent public accountants for the Company,
representatives of Swiss counsel to you and your representatives, during which
conferences and conversations the contents of the Offering Circular were
discussed, and we reviewed certain corporate records and documents furnished to
us by the Company.


 


Based on our
participation in such conferences and conversations and our review of such
records and documents as described above, our understanding of the U.S. federal
securities laws and the experience we have gained in our practice thereunder,
we advise you that no information has come to our attention that causes us to
believe that the Offering Circular (except the financial statements and
schedules and other financial data included therein, as to which we express no
view), as of the date thereof or hereof, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact


 


76

















 


necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.


 


We are
furnishing this letter to you, as Representative of the several Underwriters,
solely for the benefit of the Underwriters in connection with the
Offering.  This letter is not to be
used, circulated, quoted or otherwise referred to for any other purpose.


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  CLEARY,
  GOTTLIEB, STEEN & HAMILTON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Ashar Qureshi, a Partner

  	
   

  



 


77

















 


SCHEDULE 12.4(d)


Form of Opinion from
Cleary, Gottlieb, Steen & Hamilton


 


 


Writer’s Direct Dial:  +44 207
614 2226


 


September 29,
2002


 


UBS AG, acting through


its business group UBS Warburg


As Representative of the
several Underwriters


Europastrasse 1


CH-8152 Opfikon


Zurich, Switzerland


 


We have acted
as U.S. counsel to UBS Warburg in connection with the offering by Centerpulse
AG, a company limited by shares (Aktiengesellschaft), incorporated with
limited liability under the laws of Switzerland (the “Company”), pursuant to an
offering circular dated September 29, 2002 (the “Offering Circular”), of rights
to subscribe for common shares, par value CHF 30 per share (such rights, the
“Rights”, such shares, the “Shares”, and such offering, the “Offering”).  This letter is furnished to you pursuant to
Section 12.4(d) of the underwriting agreement dated September 27, 2002 among
the Company, UBS Warburg and InCentive Capital AG (the “Underwriting
Agreement”).


 


It is our
opinion that no registration of the Rights or the Shares under the U.S.
Securities Act of 1933 is required for the issuance of the Rights and the
initial offer and sale of the Shares by UBS Warburg in the manner contemplated
by the Underwriting Agreement.  In
rendering the foregoing opinion, we have assumed the accuracy of the
representations and warranties, and compliance with the agreements, contained
in the Underwriting Agreement.


 


We are
furnishing this letter to you, as Representative of the several Underwriters,
solely for the benefit of the Underwriters in connection with the
Offering.  This letter is not to be
used, circulated, quoted or otherwise referred to for any other purpose.


 


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  CLEARY,
  GOTTLIEB, STEEN & HAMILTON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Ashar Qureshi, a Partner

  	
   

  



 


Subscription and Underwriting
Agreement re: Centerpulse Ltd. dated as of September 27, 2002


 


78

















 


SCHEDULE 12.4(e)


 


Form of Legal Opinion
from Weil, Gotshal & Manges


 


 


Draft of


September 27, 2002


 


Form of WGM legal
opinion

(subject to opinion committee review)


 


September 27, 2002


 


UBS AG,


acting through its business
group UBS Warburg


on behalf of the Underwriters
named


in the Underwriting Agreement
defined below


2 Finsbury Avenue


London


EC2M 2PP


 


Ladies and Gentlemen:


 


We have acted
as special United States counsel to Centerpulse Ltd. (the “Company”) in
connection with its rights offering (the “Rights Offering”) of [registered]
shares of the Company with a nominal value of CHF 30 each (the “Shares”) to be
delivered in the form of Shares or restricted American Depositary Shares
(“Restricted ADSs”), each Restricted ADS representing
        Shares pursuant to the Subscription
and Underwriting Agreement dated September 27, 2002 (the “Underwriting
Agreement”), among the Company, UBS AG and InCentive Capital AG.  The Restricted ADSs are to be issued
pursuant to a restricted deposit agreement, dated as of October 9 (the
“Restricted Deposit Agreement”), among the Company, Citibank N.A. as depositary
(the “Depositary”), and the holders from time to time of restricted American
Depositary Receipts representing Restricted ADSs.


 


In so acting,
we have examined originals or copies (certified or otherwise identified to our
satisfaction) of the Offering Circular (the “Offering Circular”) of the
Company, dated September 27, 2002, the Underwriting Agreement, the Restricted
Deposit Agreement and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such
inquiries of such officers and representatives, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.


 


In our
examinations, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents.  As to all questions of fact material to this
opinion that have not been


 


 


Subscription and Underwriting
Agreement re: Centerpulse Ltd. dated as of September 27, 2002


 


79

















 


independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Company.


 


Based on the
foregoing, and subject to the qualifications stated herein, we are of the
opinion that:


 


1.             Assuming (i) compliance with the restrictions and
procedures set forth in written guidelines prepared by Weil, Gotshal &
Manges LLP and addressed to the Company and UBS Warburg in the issuance of
rights and offer and sale of the Shares, (ii) the representations and
warranties of the Company contained in Section • of the Underwriting
Agreement are true, correct and complete, (iii) compliance by the Company with
their respective covenants and agreements set forth in Sections • and • of the Underwriting Agreement,
(iv) the representations and warranties of the Underwriters contained in Section
• of the
Underwriting Agreement are true, correct and complete, (v) the Underwriters
complied with the offering and transfer restrictions set forth in the
Underwriting Agreement and in the Offering Circular, (vi) the accuracy of the
representations and warranties made by purchasers to whom the Underwriters
initially resell the Shares and compliance with the deemed undertakings made in
the section captioned “Transfer Restrictions” by such purchasers in each case
as set forth in the Offering Circular and (vii) that purchasers to whom the
Underwriters initially resell the Shares receive a copy of the Offering
Circular, it is not necessary in connection with the offer and sale of the
Shares and Restricted ADSs to the Underwriters pursuant to the Underwriting
Agreement [and
the initial resale of the Shares and Restricted ADSs] as described in the
Offering Circular, to register the Shares or Restricted ADSs under the
Securities Act of 1933, as amended.


 


2.             The statements in the Offering Circular under the
caption “Taxation—United States Federal Income Tax Considerations” insofar as
they relate to provisions of United States federal tax laws therein described,
and subject to the limitations set forth therein fairly summarize the matters
set forth therein in all material aspects.


 


3.             Assuming the due authorization, execution and delivery
of the Restricted Deposit Agreement by the Company under Swiss law, the
Restricted Deposit Agreement has been duly executed and delivered by the
Company under the laws of New York and, assuming the due authorization,
execution and delivery of the Restricted Deposit Agreement by the Depositary
and further assuming that each of the Depositary and the Company has full
power, authority and legal right to enter into and perform its obligations
thereunder, the Restricted Deposit Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
affecting creditors’ rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforceability is sought in a proceeding at law or in equity).


 


4.             Upon due issuance by the Depositary of the Restricted
ADRs evidencing the Restricted ADSs being delivered as of the date hereof
against the deposit of Shares in respect thereof in accordance with the provisions
of the Restricted Deposit Agreement,


 


80

















 


such Restricted ADRs will be
duly and validly issued and persons in whose names such Restricted ADRs are
registered on the books of the Depositary maintained for such purpose will be
entitled to the rights specified in such Restricted ADRs and the Restricted
Deposit Agreement.


 


The opinions
expressed herein are limited to the federal laws of the United Sates, and we
express no opinion as to the effect on matters covered by this letter of the
laws of any other jurisdiction.


 


The opinions
expressed herein are rendered solely for your benefit in connection with the
transactions described herein.  Those
opinions may not be used or relied upon by any other person, nor may this
letter or any copies hereof be furnished to a third party, filed with a
governmental agency, quoted, cited or otherwise referred to without our prior
written consent.


 


Very truly
yours,


 


Weil, Gotshal
& Manges LLP


 


81

















 


SCHEDULE 12.4(f)


 


Form of Legal Opinion
from Shook, Hardy & Bacon LLP


 


 


	
   

  	
  

  	
   

  
	
  GENEVA

  HOUSTON

  KANSAS CITY

  LONDON

  MIAMI

  	
  1010 GRAND BOULEVARD, 5TH FLOOR

  POST OFFICE BOX 15607

  KANSAS CITY, MISSOURI 64106-0607

  TELEPHONE (816) 474-6550 z FACSIMILE
  (816) 842-3190

  	
  NEW ORLEANS

  OVERLAND PARK

  SAN FRANCISCO

  TAMPA

  WASHINGTON, D.C.

  



 


 


September 29, 2002


 


 


UBS AG


As Global Coordinator of the
Several Underwriters


 


 


Ladies and Gentlemen:


 


We have acted as National
Litigation Counsel to Sulzer Orthopedics, Inc., a U.S. corporation (“Sulzer
Orthopedics”), a wholly owned subsidiary of Centerpulse LTD., a Swiss
Aktiengesellschaft (“Parent”), in connection with certain litigation in the
United States involving allegedly defective Inter-Opä
hip implants and NKII Tibial Baseplateâ knee implants
manufactured by Sulzer Orthopedics. 
This letter is being delivered to you pursuant to the Underwriting
Agreement, dated September 27, 2002 regarding the purchase of certain
registered shares of the Parent (the “Offered Shares”).


 


We have examined the Offering
and Listing Circular of the Parent dated September 29, 2002 (the “Offering
Circular”).  Capitalized terms not
otherwise defined in this letter shall have the meanings ascribed thereto in
the Offering Circular.  In addition, we
have examined certain records of Sulzer Orthopedics relating to the matters
covered by the opinions set forth in the numbered paragraph below and have made
such other investigations as we have deemed necessary in connection with the
opinion set forth in such numbered paragraph.


 


Based upon such examination and
review, and subject to the other qualifications and limitations set forth
herein, we are of the opinion that:


 


1.             To our knowledge, the statements set forth in the
paragraph headings “Implant and Related Litigation – Litigation in the
United States” under the caption “BUSINESS OF CENTERPULSE – Litigation”
of the Offering Circular and in the paragraph heading “Recent Developments – Implant
Litigation and Settlement Agreement” under the caption “MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS”
(collectively, the “Covered


 


Subscription and Underwriting
Agreement re: Centerpulse Ltd. dated as of September 27, 2002


 


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Sections”), solely to the
extent they pertain to matters involving the Implant Litigation in the United
States to which Sulzer Orthopedics is a party and for which we act as primary
legal counsel of record to Sulzer Orthopedics (the “Litigation”), accurately
describe the matters referred to therein in all material respects.


 


As we have discussed, we are
primary legal counsel to Sulzer Orthopedics with respect to the
Litigation.  We are not corporate,
securities or regulatory counsel to Sulzer Orthopedics or the Parent in
connection with the preparation of the Offering Circular and as such express no
opinion regarding statements made in the Offering Circular concerning insurance
coverage, manufacturing processes or other matters not pertaining solely to the
Litigation.


 


We have not independently
verified the accuracy, completeness or fairness of the statements made or
included in the Offering Circular and take no responsibility therefor, except
as and to the extent set forth in paragraph 1 above, subject to the
qualifications and limitations set forth herein.


 


Subject to the qualifications
and limitations set forth herein, no facts have come to our attention which
would lead us to believe that, as of the date hereof, the descriptions of the
Litigation in the Offering Circular under the Covered Sections contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.


 


The opinions contained in this
letter merely constitute expressions of our professional judgment regarding the
matters of law addressed herein.  We are
expressing no opinion regarding, nor are we endorsing or adopting as our own
opinion, any particular statement of opinion or belief attributed to Sulzer
Orthopedics or the Parent in the Offering Circular.   We are expressing no opinion regarding, nor are we predicting or
guaranteeing, the outcome of any litigation. 
Further, we are expressing no opinion regarding the effect of the
outcome, whether financial or otherwise, of any litigation on Sulzer
Orthopedics, the Parent or the Offered Shares.


 


We have not considered and
express no opinion as to the laws of any jurisdiction other than the laws of
the United States of America.


 


This opinion letter is rendered
to you in connection with the above described transactions and we specifically
do not render any opinions pertaining to any matter not expressly stated
herein.  This opinion letter may not be
relied upon by you for any other purpose, or relied upon by, or furnished to,
any other person, firm or corporation without our prior written consent.


 


Very truly
yours,


 


 


Shook, Hardy
& Bacon L.L.P.


 


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