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Exhibit 4.16    
  

	CANADA

	S U P E R I O R C O U R T

(Class Action)
	 	

	PROVINCE OF QUÉBEC

DISTRICT OF MONTREAL

NO: 500-06-000130-019	HONORABLE JUSTICE DUVAL HESLER
 L'ASSOCIATION D'AIDE AUX VICTIMES DES PROTHÈSES DE LA HANCHE / THE HIP IMPLANTS VICTIMS' AID ASSOCIATION

 -and-

 CORA COHEN
	 	Petitioners
	 	vs.

 CENTERPULSE ORTHOPEDICS INC.
 (formerly known as SULZER ORTHOPEDICS INC.)

-and-

 CENTERPULSE LTD.
 (formerly known as SULZER MEDICA LTD)
	 	Respondents

SETTLEMENT AGREEMENT  

L'ASSOCIATION
D'AIDE AUX VICTIMES DES PROTHÈSES DE LA HANCHE / THE HIP IMPLANTS VICTIMS' AID ASSOCIATION and CORA COHEN, in their capacity as Petitioners and designated person
("Petitioners") and Centerpulse Orthopedics Inc. (formerly known as Sulzer Orthopedics Inc. and Centerpulse Ltd (formerly known as
Sulzer Medica Ltd) as Respondents (collectively, the "Parties") hereby enter into this Settlement Agreement (the
"Agreement") providing for the settlement of all of the Claims described below, pursuant to the terms and conditions set forth below, subject to the
approval of the Court of the province of Quebec. 

WHEREAS
a motion for authorization to institute class action has been filed against the Respondents in Canada by Petitioners. 

WHEREAS
Petitioners Counsel in Canada have conducted settlement negotiations with Counsel for the Respondents. 

WHEREAS
the parties agreed to settle the Class Action according to the Terms and Conditions set forth in the document dated May 7th, 2002 in Cleveland, Ohio, as appears from Annex
I attached hereto. 

WHEREAS
the U.S. Settlement of the Class Action in the Re inter op hip prosthesis product liability litigation, case no. 01-CV9000 (MDL no. 1401). U.S. district Court,
Northern District of Ohio, Eastern Division, was executed by various parties and was approved by the Honorable Justice Kathleen M. O'Malley, as appears from Annex II attached hereto. 

WHEREAS,
this Settlement Agreement shall not be construed as evidence of or as an admission by Respondents or released parties of any liability or wrongdoing whatsoever or as an admission by the
Petitioners or any member of the Canadian Settlement Class of any lack of merit in their claims. 

 

WHEREAS
the Class Action has been authorized against Centerpulse Orthopedics Inc. (formerly known as Sulzer Orthopedics Inc.)and Centerpulse Ltd (formerly known as Sulzer
Medica Ltd), conditional upon approval of the present settlement by the Superior Court, District of Montreal, Quebec, the whole as appears from the Court record in present case
no. 500-06-000130-019. 

WHEREAS
the Parties agree that any member of the Canadian Settlement Class have the right to exclude themselves ("opt out") from this Agreement under Sections 1005, 1007 and 1008 of the  Code of Civil Procedure.

WHEREAS
based upon a review of all of the facts and the law applicable to claims of the Canadian Settlement Class, considering the burdens, expense and time of litigation, including the risks and
uncertainties associated with protracted trials and appeals, as well as the fair, cost-effective and assured method of resolving claims of the members of the Canadian Settlement Class
provided in this Agreement, Petitioners and Petitioners' counsel have concluded that this Agreement provides substantial benefits to and is fair, reasonable, adequate and in the best interests of the
Canadian Settlement Class. 

WHEREAS
the Respondents have similarly concluded that this Agreement is desirable in order to avoid the time, risk and expense of defending multiple and protracted litigation, and to resolve finally
and completely the pending and potential claims of the members of the Canadian Settlement Class. 

WHEREAS
the parties hereto have agreed to settle the Class Action (the "Class Action Settlement" or "Settlement"), subject to the approval of the Superior Court, District of Montreal, Quebec, with
respect to any member of the Canadian Settlement Class as herein defined which resolves, on the terms set forth in this Settlement Agreement, Settled Claims against Respondents and other Released
Parties arising from the Affected Products. 

NOW,
THEREFORE, Respondents and Petitioners hereby agree, subject to Final Approval and other conditions, all as set forth below, that the Unrevised Affected Product Recipient Fund, Affected Product
Revision Surgery Fund, and Extraordinary Injury Fund shall be established, from which the benefits described herein will be paid to the Approved Claimants of the proposed Canadian Settlement
Class, and that the Settled Claims against Respondents and other Released Parties, as defined herein, will be settled, compromised and released, in accordance with the following conditions. 

1.    DEFINITIONS

Unless
the specific context of a particular Section of this Agreement calls for another interpretation, the following terms, as used in this Agreement and its Annexes, shall have the meanings set
forth below. Terms used in the singular shall be deemed to include the plural, and vice versa. Masculin pronouns and references shall be deemed to include the feminine, and vice versa, where
appropriate. 

"$" shall mean US dollars. All amounts mentioned herein are in US dollars, it being understood that the Canadian equivalent will be determined by the
exchange rate of the Bank of Canada on the day of the Final Approval. 

"Additional Non-Affected Product Revision Surgery" shall mean a surgery not the result of trauma, performed to remove and/or replace a
product that is not an Affected Product after a Non-Affected Product Revision Surgery and prior to the date that is three hundred and sixty-five (365) days after the
initial Affected Product Revision Surgery with respect to the same hip. 

"Affected Products" shall mean (i) Inter-OpTM Acetabular shells ("Inter-Op Shells") identified in Centerpulse
Orthopedics Inc.'s (Sulzer Orthopedics Inc.) Safety Alert dated December 5, 2000 as identified by lot numbers on Annex I of the US Settlement Agreement, which forms part of Annex
II hereto, which identification is hereby incorporated by reference—to the exclusion however of any reference to the Tibial Baseplate lot numbers (pages 37 to 42),
(ii) Inter-Op Shells that are otherwise 

2

 

identified by lot numbers on Annex I of the US Settlement Agreement, which forms part of Annex II hereto, which identification is hereby incorporated by reference—to the exclusion however
of any reference to the Tibial Baseplate lot numbers (pages 37 to 42) and (iii) reprocessed Inter-Op Shells ("Reprocessed Inter-Op Shells") identified by lot
numbers on Annex II of the US Settlement Agreement, which forms part of Annex II hereto, which identification is hereby incorporated by reference—to the exclusion however of any reference
to the Tibual Baseplate lot numbers (pages 37 to 42); 

"Affected Product Recipients" shall mean persons who are citizens or residents of Canada, in whose bodies one or more Affected Products have been or are
now implanted in an operation or other surgical procedure, whether or not any such Affected Product has been or may in the future be removed. 

"Affected Product Related" shall mean arising out of, based upon, relating to, or involving an Affected Product. 

"Affected Product Revision Surgery" or "APRS" shall mean surgical removal and/or replacement of an
Affected Product for reason other than trauma. 

"Affected Product Revision Surgery Fund" shall have the meaning set forth in Section 5. 

"Approved Claimant" shall mean an Eligible Claimant whose claim the Claims Administrator has approved for payment. 

"Canadian Settlement Class" shall mean all Affected Product Recipients who were citizens or residents of Canada as of the date they received the
Affected Product, who have or may have claims with respect to injuries, whether or not manifested, and who meet the following conditions: 

Affected
Product Recipients who have an unsatisfied claim with respect to an Inter-Op Shell arising out of (i) an APRS performed prior to the date that is the earlier of the Final
Approval Date and June 5, 2003 with respect to an Inter-Op Shell (other than a Reprocessed Inter-Op Shell) or September 8, 2004 with respect to a Reprocessed
Inter-Op Shell and/or (ii) facts that exist prior to the date that is the earlier of the Final Approval Date and June 5, 2003 with respect to an Inter-Op Shell
(other than a Reprocessed Inter-Op Shell) or September 8, 2004 with respect to a Reprocessed Inter-Op Shell, that may be a basis for such Settlement Class Members to
receive benefits under this Agreement. 

Affected
Product Recipients who have an unsatisfied claim with respect to an Inter-Op Shell (other than a Reprocessed Inter-Op Shell) arising out of (i) implantation of
an Inter-Op Shell (other than a Reprocessed Inter-Op Shell), (ii) an APRS performed on or scheduled after the Final Approval Date but prior to June 5, 2003,
providing that such scheduled APRS take place on or before June 5, 2004 and/or (iii) facts that exist on or after the Final Approval Date but prior to June 5, 2003 that may be a
basis for such Settlement Class Members to receive benefits under this Agreement. 

Affected
Product Recipient who have an unsatisfied claim with respect to a Reprocessed Inter-Op Shell arising out of (i) implantation of a Reprocessed Inter-Op Shell,
(ii) an APRS performed on or scheduled after the Final Approval Date but prior to September 8, 2004, providing that such scheduled APRS take place on or before September 8, 2005
and/or (iii) facts that exist on or after the Final Approval Date but prior to September 8, 2004 that may be the basis for such Settlement Class Members to receive benefits under this
Agreement. 

Spouses
of Affected Product Recipients who have undergone Affected Product Revision Surgery. 

3

 

The
Canadian Settlement Class specifically excludes any person or entity that entered into a settlement with Respondents and/or any of the Released Parties related to claims arising out of the
implantation of an Affected Product. 

"Claim Forms" means the Unrevised Affected Product Recipient Fund Benefits Claim Form, the Affected Products Revision Surgery Fund Benefits Claim Form,
the Extraordinary Injury Fund Benefits Claim Form and the Spouses Benefits Claim Form and any additional documentation required thereby. 

"Claims Administrator" shall mean Crawford Expertises Canada and/or its agents who shall administer claims for benefits and make determinations and
payments under this Settlement Agreement, being located at 404 Decarie Boulevard, Suite 300, Montreal (Saint-Laurent) Quebec, H4L 5E6, telephone number (514) 748-7300, fax
number (514) 748-2228 and e-mail c/o Marcel Lacoste: Marcel.Lacoste@crawco.ca. 

"Class Action" shall mean the class action proceedings filed in Quebec Superior Court in L'Association d'aide aux
victimes des prothèses de la hanche / The hip implants victims' aid Association and Cora Cohen vs. Sulzer Orthopedic Inc. et
als, (Case no. 500-06-000130-019). 

"Court" shall mean the Quebec Court which has jurisdiction over the class action, namely the Superior Court for the district of Montreal. 

"Covered Revision Surgery" or "CRS" shall mean an Affected Product Revision Surgery. 

"Eligible Claimant" shall mean Settlement Class Members who received "Affected Products", as well as spouses of Affected Product Recipients who have
undergone an APRS, except those excluded below, who timely and properly take the actions required under this Agreement to participate herein, including submitting registration forms, acceptable
product identification documentation, claim forms, supporting medical documentation and/or other documentation required pursuant to the present Agreement. 

"Eligible Claimant" excludes any Settlement Class Members who is a member of the U.S. Settlement Class, whether registered or not to participate
therein; has accepted and accepts compensation from any of the Respondents and/or Released Parties with respect to an Affected Product other than under this Agreement; has released, by settlement,
judgment, court order or otherwise, the Respondents and/or the Released Parties or any of them with respect to an Affected Product; has had any of his proceedings, suits, demands and/or actions
against the Respondents and/or the Released Parties with respect to an Affected Product dismissed; or has instituted any legal proceedings, suits, demands and/or actions against the Respondents and/or
the Released Parties with respect to an Affected Product and who is still pursuing and/or who has not abandoned any such legal proceedings, suits, demands and/or actions against the Respondents and/or
the Released Parties with respect to an Affected Product. 

"Extraordinary Injury" shall mean those injuries and/or conditions as defined in Annex IV, "Hip Matrix Levels" IV, V, VI, VII, VIII and IX of the U.S.
Settlement Agreement, which forms part of Annex II hereto, which definitions are hereby incorporated by reference, it being understood however that the amounts/figures contained in the relevant
Sections and Annexes of the U.S. Settlement are replaced by those provided in Section 5.1.1., and more particularly Sections 5.1.1.1. (c) and 5.1.1.5. and its annexes and that any
benefit a Class Member can receive under Levels IV, V, VI, VII, VIII and IX mentioned above are up to a maximum $150,000 US per level. 

"Extraordinary Injury Fund" shall have the meaning set forth in Section 5. 

"Final Approval" shall mean that judgment approving the present Settlement which is no longer subject to appeal and/or from which all appeals have been
exhausted. 

"Funding date" shall have the meaning set forth in Section 5.1. 

4

 

"Funds" means, collectively, the Unrevised Affected Product Recipient Fund, Affected Product Revision Surgery Fund and Extraordinary Injury Fund. 

"Non-Affected Product Revision Surgery" or "NAPRS" shall mean a surgery (not indicated as a result of trauma) that was performed to remove
and/or replace a product that is not an Affected Product within one-hundred and eighty (180) days of an Affected Product Revision Surgery in respect of a hip that previously
underwent an Affected Product Revision Surgery. 

"Notice of Approval Hearing" shall mean the notice advising members of the Canadian Settlement Class of the hearing to approve this Agreement, as more
particularly described in Section 2 of this Agreement. 

"Notice of Court Approval" shall mean the notice advising members of the Canadian Settlement Class of the Court's approval of this Agreement, as more
particularly described in Section 3 of this Agreement. 

"Opt-Out Form" means the Opt-Out Form (Annex V hereto) and any additional documentation required thereby. 

"Opt-Out Deadline" shall mean the date one (1) month after first publication of the Notice of Court Approval or such other time
period that may be approved by the Court. 

"Released Parties" shall mean: 

	(i)
	Centerpulse
Orthopedics Inc. (formerly known as Sulzer Orthopedics Inc.) and each of its affiliates, and each of its other past, present
and future parent companies and direct or indirect subsidiaries, together with each of their respective past, present and future directors, officers, employees, affiliates, insurers, joint venturers
and agents, including without limitation, sales agents;

	(ii)
	Sulzer
AG, Centerpulse Ltd. (formerly known as Sulzer Medica Ltd.), Centerpulse Orthopedics Ltd. (formerly known as Sulzer
Orthopedics Ltd) and each of their affiliates, and each of their past, present and future parent companies and direct or indirect subsidiaries, together with each of their respective past,
present and future directors, officers, employees, affiliates, insurers, joint venturers and agents, including without limitation, sales agents;

	(iii)
	Sulzer
Canada Inc., Certerpulse Orthopedics Canada Inc. (formerly known as Sulzer Orthopedics Canada Inc.) and Sulzer Medica
Canada Inc., and each of their affiliates, and each of their past, present and future parent companies and direct or indirect subsidiaries, together with each of their respective past, present
and future directors, officers, employees, affiliates, insurers, joint ventures and agents, including without limitation, sales agents;

	(iv)
	Winterthur
and all of its past, present and future parent companies and direct or indirect subsidiaries, its and their respective past, present and
future directors, officers, employees, affiliates, insurers and agents;

	(v)
	all
surgeons who implanted an Affected Product and affiliated physicians or physician groups; provided, that such surgeons, physicians or physician
groups shall only be Released Parties hereunder to the extent that their alleged liability arises from or relates to the recommendation, selection or use of an Affected Product, notwithstanding the
legal theory on which such alleged liability is premised (including, but not limited to, breach of control, negligence, res ipsa loquitor, intentional or negligent misrepresentation, intentional tort,
fraud, deceit, civil conspiracy, violation of statute, consumer fraud and deceptive trade practices, failure to disclose or warn, any product liability theories, any breach of warranty theories,
agency, alter ego, joint venture, partnership, joint enterprise, medical malpractice, or any combination thereof) and notwithstanding the pre-implantation conduct alleged to give rise to 

5

 

such
liability (including, but not limited to, failure to disclose information about a financial relationship with a company or business organization, failure to acquire a patient's informed consent
due to the failure to disclose information about the condition of or defect in an Affected Product or a financial relationship with a company or business organization, participation in the design,
testing, promotion, marketing); provided further, that the foregoing shall not preclude claims based on such surgeons', physicians' or physician groups' for independent negligence in the treatment of
the patient and such claim is not based on the recommendation, selection or use of an Affected Product. (Examples of such claims for "independent negligence" for which a surgeon is not released may
include, but not be limited to, the following: (1) leaving a foreign object in the patient during surgery; (2) failure to adequately suture the surgical wound; or (3) inadequate
disclosure, monitoring or treatment in the post-operative period. Further, as it relates to an Affected Product Recipient's ability to pursue such claims against a surgeon, physician or
physician group for independent acts of negligence not based on the recommendation, selection or use of an affected product, this provision is not meant to preclude such a claimant from pursuing
exemplary or punitive damages for such independent acts of negligence to the extent allowed by applicable law, but simply recognizes the possibility, however remote, under law that negligent conduct
may rise to the level of recklessness, willfulness or other indicia of intent or state of mind to support the imposition of exemplary or punitive damages); and 

	(vi)
	organized
medical specialty organizations, raw material or other suppliers of Sulzer of materials, machines or equipment used in the manufacture of the
Affected Products, distributors of the Affected Products, and any other person or entity involved in the design, manufacture, distribution, implant or explant of an Affected Product and all insurers
of the foregoing. 

"Respondents' Counsel" shall mean Robinson Sheppard Shapiro. 

"Reversionary Period" shall be the time between the date on which the Initial Payment is made as provided in Section 5.1 and the expiration of
Respondents' reversionary interest as provided in Section 5.4. 

"Settled Claims" shall mean any and all claims, past, present or arising in the future, including assigned claims, whether known or unknown, asserted or
unasserted, regardless of the legal theory, by any or all members of the Canadian Settlement Class arising out of or relating to the Affected Products or their implantation. These "Settled Claims"
include, without limitation and by way of example, all claims for
damages or remedies of whatever kind or nature, known or unknown, that are now recognized by law or that may be created or recognized in the future by statute, regulation, judicial decision, or in any
other manner, for: 

	(i)
	pecuniary,
non-pecuniary, personal, corporal, material injury and/or bodily injury, damage, death, fear of disease or injury, mental or
physical pain or suffering, emotional or mental or moral harm, or loss of enjoyment of life, or inconvenience;

	(ii)
	loss
of wages, income, earnings, and earning capacity, medical expenses, doctor, hospital, nursing, drug bills, or other health care expenses;

	(iii)
	loss
of support, services, consortium, companionship, society or affection, or damage to familial relations, by spouses, parents, children, other
relatives or "significant others";

	(iv)
	wrongful
death and survival actions;

	(v)
	medical
screening and monitoring, injunctive and declaratory relief;

	(vi)
	consumer
fraud, unfair business practices, deceptive trade practices, unjust enrichment, and other similar claims whether arising under statute,
regulation, or judicial decision; 

6

 

	(vii)
	compensatory
damages, punitive, exemplary, statutory and other damages or penalties of any kind including, without limitation, economic or business;
and

	(viii)
	pre-judgment
or post judgment interest. 

"Settlement Amount" shall mean all monies payable by the Respondents under this Agreement. 

"Settlement Class Members" shall mean all Members of the Canadian Settlement Class, except those Members who have exercised their right to opt out under
the terms of this Agreement on or before the
Opt-Out Deadline, or who are deemed to have opted out under, amongst other things, Section 1008 of the Code of Civil Procedure. 

"Settlement Class Counsel" shall mean Kugler Kandestin/Jean-Jules Fiset, avocat-attorney. 

"Spouse" shall mean a person who was married or who was co-habitating, in a Common-Law fashion, for at least six months with an
Approved Claimant at the time such Claimant underwent an APRS. 

"Termination Period" shall have the meaning set forth in Section 17, and more particularly, Section 17.2; 

"Unrevised Affected Product Recipient Fund" shall have the meaning set forth in Section 5. 

"U.S. Settlement" shall mean the class action inre inter op hip prosthesis product liability litigation, Case No. 1 2.01-CV90 00(MDM
docket) No. 14 (01). U.S. district Court, Northern District of Ohio, Eastern Division, settlement executed into by various parties as approved by the Honorable Kathleen M. O'Malley, the whole
as appears from Annex II hereto. 

"Winterthur" means Winterthur Swiss Insurance Company, a limited company organized under the laws of Switzerland and its
successor-in-interest XL Winterthur International Insurance Switzerland, its insurance subsidiaries, together with their respective subsidiaires and affiliated companies. 

2.    NOTICE OF APPROVAL HEARING

	2.1
	Promptly
after execution of this Agreement, the Parties shall advise the Court of this Agreement and shall initiate a motion before the Court for one or more orders which by their
terms shall:

	(a)
	Approve
the form, contents and method of dissemination of the notice advising all members of the Canadian Settlement Class of a hearing to approve this Agreement ("Notice of Approval
Hearing");

	(b)
	Ascribe,
for the purposes of issuing the Notice of Approval Hearing, the status of representatives and designated person to the named Petitioners;

	(c)
	Describe,
for the purposes of issuing the Notice of Approval Hearing, the group to whose members the Notice of Approval Hearing will be given;

	(d)
	Schedule
the date of the Approval Hearing for the purposes of settlement only; 

	2.2
	Subject
to the Court's approval, the form, contents and method of dissemination of the Notice of Approval Hearing shall be as described in Annex III to this Agreement.

	2.3
	Once
the Order(s) described herein have been obtained, Settlement Class Counsel shall disseminate the Notice of Approval Hearing to all members of the Canadian Settlement Class, the
whole at Respondents' costs. 

3.    APPROVAL HEARING  

	3.1
	Following
the dissemination of the Notice of Approval Hearing and the scheduling of the Approval Hearing, the Parties shall seek the Court's approval of this Agreement and shall
consent to authorization of the Class Action for the purpose of this Agreement. 

7

 
	3.2
	Subject
to the Court's approval, the order or judgment of approval of this Agreement shall:

	(a)
	Authorize
the Class Action;

	(b)
	Describe
the group as all persons who are or may be members of the Canadian Settlement Class;

	(c)
	Ascribe
the status of representative and/or designated person to Petitioners;

	(d)
	Approve
this Agreement and order the Parties and all members of the Canadian Settlement Class to comply with it;

	(e)
	Declare
that this Agreement constitutes a "transaction" pursuant to Article 1025 of the Code of Civil Procedure which is binding upon the Parties and upon all members of the
Canadian Settlement Class;

	(f)
	Order
that the deadline for opting out from the Canadian Settlement Class be a date one (1) month following the first publication of the Notice of Court Approval or such other
time period as may be approved by the court ("Opt-Out Deadline");

	(g)
	Declare
that, subject to Article 1008 of the Code of Civil Procedure, any member of the Canadian Settlement Class who have not
opted out from the Canadian Settlement Class by submitting a properly completed Opt-Out Form to the Claims Administrator by the Opt-Out Deadline shall be bound by this
Agreement and judgment of approval;

	(h)
	Declare
that this Agreement is reasonable, fair and adequate, and in the best interests of the Canadian Settlement Class;

	(i)
	Order
publication of the Notice of Court Approval as well as the form, contents and method of its dissemination;

	(j)
	Confirm
the appointment of the Claims Administrator;

	(k)
	Enter
such other orders as are needed to effectuate the terms of the Settlement Agreement;

	(l)
	Bar
and enjoin all members of the Canadian Settlement Class (other than one who opts out and/or is deemed to have opted out as per the above) entitled to benefits hereunder from
asserting and/or continuing to prosecute against Respondents or against any other Released Parties any and all Settled Claims which the member of the Canadian Settlement Class (other than one who opts
out and/or is deemed to have opted out as per the above) had, has, or may have in the future. 

	3.3
	Subject
to the Court's approval, the Parties agree that the Class Action will be authorized, only for the purpose of this Agreement, pursuant to Sections 1003, 1005 and 1025 of the  Code of Civil Procedure. In
the event this Agreement is terminated, the Parties agree the Class Action will require class authorization through the
ordinary procedures and nothing shall prevent Respondents and the
Released Parties from contesting or opposing class authorization in this action or in any other action or for any other purpose.

	3.4
	Once
this Agreement has been approved and the Class Action has been authorized pursuant to this Agreement, the Settlement Class Counsel shall disseminate the Notice of Court Approval
to Canadian Class Members, the whole at Respondents' costs. 

8

   4.    ENTITLEMENT TO COMPENSATION  

Only
Approved Claimants shall be entitled to receive compensation as defined and described in this Agreement. 

The
parties agree that all of the amounts being paid to or on behalf of Approved Claimants pursuant to the terms of this Settlement Agreement, are being paid as damages (other than punitive or
exemplary damages) on account of alleged personal physical injuries or alleged physical sickness of Settlement Class Members, including physical injuries or physical sickness resulting from alleged
emotional harm. 

5.    BENEFITS FUNDS  

	5.1
	ESTABLISHMENT OF BENEFIT FUNDS

        The
settlement amount shall be paid as follows: 

	(a)
	An
initial payment of $1,600,000.00 US made into the Affected Product Revision Surgery Fund to be made within fourteen (14) days after Final Approval of this Agreement by way
of payment in trust to the Claims Administrator;

	(b)
	An
initial payment of $450,000.00 US made into the Unrevised Affected Product Recipient Fund to be made within fourteen (14) days after the Court's Final Approval of this
Agreement by way of payment in trust to the Claims Administrator;

	(c)
	An
initial payment of $450,000.00 US made into the Extraordinary Injury Fund to be made within fourteen (14) days after Final Approval of this Agreement by way of payment in
trust to the Claims Administrator;

	(d)
	A
second payment, if necessary, once any given fund is exhausted and the Claims Administrator provides written notice of same to Respondents, Respondents' attorneys and Settlement
Class Counsel as well as written notice of the fact that further Eligible Claimant under the particular fund have been approved. Such second payment, if necessary, shall be made within thirty
(30) days of demand;

	5.1.1
	Payment categories schedule and related issues

5.1.1.1    Payment
categories 

The
Amount to which any Approved Claimant is entitled, without duplication, is the following: 

	(a)
	Single
Affected Product Revision Surgery: $75,000 US;

	(b)
	Two
Affected Product Revision Surgeries: $100,000 US;

	(c)
	Claimants
who receive more than two Affected Product Revision Surgeries or have Extraordinary Injuries: $150,000 US, it being understood that any benefits a Settlement Class Member
can receive under the Hip Matrix Levels IV, V, VI, VII, VIII, IX, as long as they qualify hereunder, will amount to a maximum of $150,000 US;

	(d)
	The
amount(s) provided in the terms and/or conditions as defined in Annex IV, Hip Matrix Levels I, II, III of the US Settlement, which form part of Annex II hereto, which terms and/or
conditions are hereby incorporated by reference, providing 

9

 

however
that any such Claimants qualify therefor and that the amounts/figures contained therein are modified as follows: 

	•
	as
for Matrix Level I (Revision Surgery Indicated But for a Medical Condition), the benefits that a Settlement Class Member will receive are up to $56,250
US;

	•
	as
for Matrix Level II (Non-Removal Surgery), the benefits that a Settlement Class Member will receive will be up to $16,875 US for each such
procedure that he/she undergoes, not to exceed $42,187.50 US in the aggregate;

	•
	as
for Matrix Level III (Non-Affected Product Revision Surgery and Additional Non-Affected Product Revision Surgeries), the benefits
a Settlement Class Member will receive are up to $37,500 US for a NAPRS and will receive up to $18,750 US for each Additional Non-Affected Product Revision Surgery performed on or before
the date that is three hundred and sixty-five (365) days after the date of his/her APRS, not to exceed $93,750 US in the aggregate; 

	(e)
	Spouses
of Approved Claimants who underwent one or more APRS: $1,000 US;

	(f)
	Unrevised
Affected Product Recipients: $1,000 US. 

5.1.1.2    Benefits
payable to any Approved Claimants out of the Unrevised Affected Product Recipient Fund 

	(a)
	Approved
Claimants who have not undergone Affected Product Revision Surgery shall be entitled to receive a total payment of $1,000 US, payable by the date that is the later of the
30th day following the Funding Date and the date the Claims Administrator makes a final determination with respect to such Settlement Class Member (or if such final determination is
appealed in accordance with Section 11, the date on which all such appeals are exhausted).

	(b)
	Amounts
paid to any Approved Claimants pursuant to Sections 5.1.1.2 (a) above shall be paid out of the Unrevised Affected Product Recipient Fund. 

5.1.1.3    Benefits
payable to any Approved Claimants out of the Affected Product Revision Surgery Fund 

	(a)
	Approved
Claimants who have undergone or who undergo Affected Product Revision Surgery shall be entitled to receive total payment of (i) $75,000 US for such Affected Product
for which such Settlement Class Member undergoes one (1) Affected Product Revision Surgery and (ii) $100,000 US for two (2) Affected Product Revision Surgeries or
(iii) $150,000.00 US for three (3) or more Affected Product Revision Surgeries, payable by the date that is the later of the 30th day following the Funding
Date and the date the Claims Administrator makes a final determination with respect to such Approved Claimant (or if such final determination is appealed in accordance with Section 11, the date
on which all such appeals are exhausted);

	(b)
	Payments
made pursuant to Section 5.1.1.3. (a) with respect to Affected Product Revision Surgeries (i) undergone by Approved Claimants in respect of
Inter-Op Shells (other than Reprocessed Inter-Op Shells) prior to the Final Judicial Approval Date and prior to June 5, 2003 and/or an APRS performed on or scheduled
after the Final Approval Date but prior to June 5, 2003, providing that such scheduled APRS takes place on or before June 5, 2004, (ii) undergone by Approved Claimants in respect
of Reprocessed Inter-Op Shells prior to the Final Judicial Approval Date and prior to September 8, 2004 and/or an APRS performed on or scheduled after the Final Approval Date but
prior to September 8, 2004, providing that such scheduled 

10

 

APRS
takes place on or before September 8, 2005, shall be made as follows: by the date that is the later of the 30th day following the Funding Date and the date of the Claims
Administrator makes a final determination with respect to such Approved Claimant (or if such final determination is appealed in accordance with Section 11, the date on which all such appeals
are exhausted); 

	(c)
	Amounts
paid to any Approved Claimants pursuant to Section 5.1.1.3 (a) shall be paid out of the Affected Product Revision Surgery Fund;

	(d)
	Payments
made pursuant to Section 5.1.1.1 (d), as the case may be, the whole as per the determination of the Claims Administrator. Amounts paid to any Approved Claimants
pursuant to Section 5.1.1.1 d) shall be paid out of the Affected Product Revision Surgery Fund. 

5.1.1.4    Spousal
payments 

	(a)
	The
Spouse of an Approved Claimant who is entitled to payment in accordance with Sections 5.1.1.1 (a), (b) or (c) shall be entitled to receive a cash payment of $1,000
US to be paid no later than the date the payment is made to such Approved Claimant. Such payments shall be payable out of the Affected Product Revision Surgery Fund. 

5.1.1.5    Benefits
payable to Approved Claimants out of the Extraordinary Injury Fund; 

	(a)
	Approved
Claimants who have Extraordinary Injuries shall be entitled to receive a total payment of $150,000 US payable by the date that is the later of the 30th day
following the Funding Date and the date the Claim Administrator makes a Final Determination with respect to such Approved Claimant or
if such Final Determination is appealed in concordance with Section 11, the date on which all such appeals are exhausted;

	(b)
	Payments
made pursuant to Section 5.1.1.5. (a) with respect to Affected Product Revision Surgeries (i) undergone by Approved Claimants in respect of
Inter-Op Shells (other than Reprocessed Inter-Op Shells) prior to June 5, 2003 and/or an APRS performed on or scheduled after the Final Approval Date but prior to
June 5, 2003, providing that such scheduled APRS takes place on or before June 5, 2004, (ii) undergone by Approved Claimants in respect of Reprocessed Inter-Op Shells
prior to September 8, 2004 and/or an APRS performed on or scheduled after the Final Approval Date but prior to September 8, 2004, providing that such scheduled APRS takes place on or
before September 8, 2005, shall be made as follows: by the date that is the later of the 30th day following the Funding Date and the date of the Claims Administrator makes a final
determination with respect to such Approved Claimant (or if such final determination is appealed in accordance with Section 11, the date on which all such appeals are exhausted);

	(c)
	Amounts
paid to any Approved Claimant pursuant to Section 5.1.1.5. (a) shall be paid out of the Extraordinary Injury Fund. 

5.1.1.6    No
duplication of benefit payments. 

	(a)
	No
Approved Claimant shall be entitled to duplicative benefits under Section 5.1.1. and all payments received by any Approved Claimant shall be deducted from amounts due for
any subsequent benefit for which such Approved Claimant qualifies under this Settlement in accordance with Section 11.3.4 hereunder. 

11

 

	5.2
	NO MODIFICATION OF SETTLEMENT AMOUNT OR ACCELERATION OF PAYMENT SCHEDULE

The
Respondents' obligation to pay under this Agreement is limited to the amounts set forth in Sections 5, 6, 7 and 11. In no event shall the Respondents be required to make payments at any time
earlier than the times specified in Section 5.1 or in an amount that exceeds the sums specified in the above-mentioned Sections.. 

	5.3
	ADMINISTRATION OF SETTLEMENT FUNDS

	(a)
	The
Initial Payments shall be made to Claims Administrator in trust and shall be maintained and invested in an interest bearing trust account in United States currency at a Canadian
Chartered Bank, in the province of Quebec, Canada, and administered by the Claims Administrator under the supervision of the Court. The Initial Payments shall be maintained and invested in such manner
consistent with that of a prudent and reasonable administrator. The Initial Payments, together with any accrued interest thereon, may be used for payment of reasonable expenses, approved by the Court,
associated with the issuance and dissemination of the Notice of Approval Hearing, the Notice of Court Approval, including payments to the Claims Administrator. In no event may the Initial Payment be
expended for any other purpose prior to the expiration of the Reversionary Period.

	(b)
	The
Second Payment, if necessary, shall also be made to the Claims Administrator to be held by him in trust, in an interest bearing trust account in United States currency at a
Canadian Chartered Bank, in the province of Quebec, Canada, until the expiration of the Reversionary Period. The Second Payment shall be maintained and invested in such a manner consistent with
prudent and reasonable administrator. No portion of the Second Payment, or interest thereon, may be expended prior to the expiration of the Reversionary Period, except as necessary for administrative
expenses and then only with the express written consent of Respondents' Counsel. At the expiration of the Reversionary Period, the balance of any amount shall be remitted to the Claims Administrator
in trust to be maintained and invested in an interest bearing trust account at a Canadian Chartered Bank, in the province of Quebec, Canada, and administered by the Claims Administrator under the
terms of this Agreement and under the supervision of the Court. 

	5.4
	RESPONDENTS' REVERSIONARY INTEREST

	5.4.1
	Respondents
shall retain a reversionary interest in all payments made by Respondents under this Agreement, together with interest and earnings accrued thereon.

	5.4.2
	More
particularly, should any monies paid out by Respondents pursuant to the present Agreement remain in the Claims Administrator's trust account as at October 15, 2005 and
such monies have not as at that time been paid out to Approved Claimants, all such monies and interest thereon shall be immediately remitted by the Claims Administrator to Respondents' Counsel in
trust upon written request by the latter, with copy to Settlement Class Counsel save and except for any amounts payable to Approved Claimants approved by the Claims Administrator as at that date.

	5.4.3
	That
should there remain any monies in the Claims Administrator's trust account subsequent to the above referred to date, such monies shall be immediately remitted back to
Respondents' Counsel written request, with copy to Settlement Class Counsel; 

	5.5
	EFFECT OF TERMINATION

In
the event this Agreement is terminated, as provided in Section 17, all payments made by Respondents shall be immediately returned to Respondents, together with interest and earnings accrued
thereon, less the amounts already expended for the benefit of the Canadian Settlement 

12

 

Class pursuant to Section 5 of this Agreement and less any amounts expended pursuant to Sections 6 and 7 of this Agreement. 

6.    COSTS AND EXPENSES  

	6.1
	Respondents
will be responsible for paying all costs and expenses related to the present Settlement regarding notice and publication, as well as all costs of the Claims Administrator. 

7.    SETTLEMENT CLASS COUNSEL FEES  

	7.1
	Respondents
shall contribute the amount of $140,000 US to pay Settlement Class Counsel as part of Settlement Class Counsel fees. Half of this amount, namely $70,000 US shall be paid
within thirty (30) of the Final Approval and the other half, i.e. $70,000 US, shall be paid within five (5) days of the expiry of the delay contained in Section 17.2 b) and
as long as Respondents have not terminated this Agreement in accordance to said Section. The remainder of Class Counsel fees shall be 25% of all amounts paid to Approved Claimants. Respondents'
responsibility for such class counsel fees shall, in any event, be limited to payment of the above $140,000 US.

	7.2
	Settlement
Class Counsel in Canada and the Petitioners undertake and warrant that they obtained no financing or monies from the Fonds d'aide aux recours collectifs. 

8.    APPOINTMENT OF CLAIMS ADMINISTRATOR  

	8.1
	The
Claims Administrator shall process and classify the Opt-Outs Form (Annex IV), the Claim Forms (Annex V), Product Identification documentation and Supporting Medical
Documentation, assign the status of Approved Claimant to Eligible Claimants and thereafter pay Approved Claimants as provided in this Agreement and under the authority of the Court.

	8.2
	The
Claims Administrator must sign a confidentiality statement by which it shall agree to keep confidential any information concerning members of the Canadian Settlement Class and
shall institute procedures to assure that the identity of all members of the Canadian Settlement Class and all information regarding their claims, will be kept confidential and not be provided to
persons except as required by law and as may otherwise be required under this Agreement.

	8.3
	The
Claims Administrator and any Claims Officers shall be subject to removal by the Court for cause. 

9.    PROCEDURES AND DEADLINES FOR EXCLUSION, REGISTRATION AND CLAIMS  

	9.1
	PROCEDURES AND DEADLINES FOR EXCLUSION

Members
of the Canadian Settlement Class will have the right to exclude themselves ("opt out") from this Agreement and from the Canadian Settlement Class by submitting the required Opt-Out
Form to the Claims Administrator pursuant to the opt-out procedure determined by the Court. Members of the Canadian Settlement Class who elect to opt out shall be excluded from this
Agreement and from the Canadian Settlement Class. Such opt-out rights must be exercised by the Opt-Out Deadline. Subject to Section 1008 of the  Code of Civil Procedure, any Member of the Canadian
Settlement Class who does not submit a properly completed Opt-Out Form to the Claims
Administrator by the Opt-Out Deadline shall be considered a member of the Canadian Settlement Class and shall be bound by the terms of this Agreement. 

	9.2
	ELIGIBILITY FOR CLAIMING BENEFITS

Subject
to the Court's approval, eligibility requires proper completion and execution of the Claim Forms, including swearing that the Eligible Claimant is not a member of the U.S. Settlement Class, 

13

 

whether registered or not to participate therein, has not registered or otherwise attempted to register in order to participate in the U.S. Settlement; has not accepted nor agreed to accept
compensation from any of the Respondents and/or the Released Parties with respect to the Affected Products and/or Settled Claims other than under this Agreement; has not released, by settlement,
judgment, court order or otherwise, the Respondents and/or the Released Parties or any of them with respect to an Affected Product and has not had his action(s) against the Respondents and/or the
Released Parties with respect to the Affected Products or Settled Claims dismissed. 

Furthermore,
any such Eligible Claimant must swear that he/she has not instituted any legal proceedings, suits, demands and/or actions against the Respondents and/or the Released Parties with respect
to an Affected Product and that, in the event that he/she has instituted any such proceedings, suits, demands and/or actions, will not be pursuing same or will be abandoning them and provide the
Claims Administrator with the proper papers proving same. 

	9.3
	CLAIM FORMS

The
Claim Forms are designated to enable an Eligible Claimant to make a claim for compensation. Subject to the Court's approval the Claim Forms shall be in the form attached hereto as Annex V. 

10.  CLAIMS PROCESSING  

	10.1
	GENERAL PROCESSING GUIDELINES

	(a)
	The
Claims Administrator shall promptly process Opt-Out Forms as received and shall comply, amongst other things, with the provisions of Section 17.2 of this
Agreement;

	(b)
	In
the event that, during claims processing, the Claims Administrator finds that technical deficiencies exist in a Settlement Class Member's Claim Forms or other documentation, the
Claims Administrator shall notify via registered mail the Settlement Class Members and Settlement Class Counsel of the technical deficiencies, and shall allow the Settlement Class Members
forty-five (45) days from the date of receipt of such notice to correct the deficiencies. If the deficiencies are not corrected within the forty-five (45) day
period, the Claims Administrator shall reject the claim; 

	10.2
	APPROVAL OR REJECTION OF CLAIMS

	(a)
	In
order for an Eligible Claimant to become an Approved Claimant, the Claims Administrator must be satisfied and certify that:

	(i)
	the
Eligible Claimant forwarded a properly completed and executed Claim Forms to the Claims Administrator by October 15, 2005;

	(ii)
	the
Eligible Claimant's Product Identification documentation was forwarded to the Claims Administrator by October 15, 2005 and such
documentation meets the criteria outlined in this Agreement;

	(iii)
	the
Eligible Claimant forwarded a properly completed and executed Claim Forms to the Claims Administrator by October 15, 2005;

	(iv)
	The
Eligible Claimant's Supporting Medical Documentation was forwarded to the Claims Administrator by October 15, 2005 and such documentation
establishes that she has or had one, two or more APRS's or as the case may be one or more NAPRS's and meets the criteria outlined in this Agreement; and 

14

 

	(v)
	the
Eligible Claimant otherwise meets the criteria and prerequisite for compensation set forth in this Agreement; 

	(b)
	The
Claims Administrator shall notify via registered mail Eligible Claimants as well as Settlement Class Counsel and Respondents' counsel, as to the acceptance or rejection of the
former's claims no later than sixty (60) days from receipt by the Claims Administrator of the above referred to documentation, as well as all reasons in the event that the claim is rejected;

	(c)
	Subject
to Section 5.1.1. and following, the Claims Administrator shall promptly make arrangements to pay Approved Claimants. 

11.  APPEAL OF CLAIMS  

	11.1
	PROCEDURE

An
Eligible Claimant and/or Respondents shall be granted thirty (30) days from the date they receive notification pursuant to Section 10.2 (b) to appeal either the acceptance or
rejection of the claim. Such appeal will be on the basis of written submissions and/or oral representations. The appeals will be submitted to and decided by the Honourable Judge Duval Hesler of the
Superior Court of Quebec or any other Judge so appointed for that purpose. Respondents' Counsel and Settlement Class Counsel shall be given notice of any such appeal so that they may make
representations if they so choose. 

	11.2
	FINAL DECISION

The
judgment of the Superior Court respecting any appeal from the Claims Administrator's decision is final and binding and shall not be subject to any further appeal, revision or review whatsoever. 

	11.3
	CLAIMS ADMINISTRATION

	11.3.1
	Unrevised Affected Product Recipient Fund

	(a)
	Settlement
Class Members claiming benefits under Section 5.1.1.1. (f) must submit a Claim Forms for payment of benefits out of the Unrevised Affected Product Recipient
Fund (a "Unrevised Affected Product Recipient Fund Benefits Claim Form"), attached hereto as forming part of Annex V.

	(b)
	In
addition, Settlement Class Members must provide documentation evidencing the implantation of an Affected Product in the form of proper product identification and operation report
or physician's records.

	(c)
	If
Settlement Class Members subsequently undergo an Affected Product Revision Surgery, qualifying the Settlement Class Members for benefits under Sections 5.1.1.1. (a), (b),
(c) and (d), the Settlement Class Members may submit an Affected Product Revision Surgery Fund Benefits Claim Form, attached hereto as Annex V and may also qualify for additional benefits. 

	11.3.2
	Affected Product Revision Surgery Fund

	(a)
	Settlement
Class Members claiming benefits under Sections 5.1.1.3. must submit a Claim Forms for payment of benefits out of the Affected Product Revision Surgery Fund (an "Affected
Product Revision Surgery Fund Benefits Claim Form"), attached hereto as Annex V

	(b)
	In
addition, each Settlement Class Members must provide the following documentation: (i) documentation evidencing the implantation of an Affected Product;
(ii) documentation 

15

 

evidencing
the removal of an Affected Product in the form of an operation report or physician's records; 

	(c)
	If
the Settlement Class Members develop a condition(s) or sustain a complication(s) as defined in Annex IV "Hip Matrix Levels" IV, V, VI, VII, VIII or IX of the U.S. Settlement,
identified herein as being an Extraordinary Injury, said Settlement Class Members may also submit an Extraordinary Injury Fund Benefits Claim Form (as defined in Section 11.3.3.
(a) below); 

	11.3.3
	Extraordinary Injury Fund

	(a)
	Settlement
Class Members claiming benefits under Section 5.1.1.1. (c), but only for Extraordinary Injury, must submit a Claim Forms for payment of benefits out of the
Extraordinary Injury Fund (an "EIF Claim Form"), attached hereto as Annex V;

	(b)
	In
addition to the applicable Form, Settlement Class Members must provide the following documentation: (i) medical records and/ or other documentation evidencing the
condition(s) and/or complication(s) that form the basis of the claim for EIF Benefits. 

	11.3.4
	Special Clause

Should
any Settlement Class Members initially qualify for payment under one category or Fund and subsequently qualify for payment under another category or Fund, all previous payments made under the
category or Fund for which such members had previously qualified shall be credited against any payment due under any subsequent category or Fund. 

	11.4
	SPOUSAL CLAIMANTS

	(a)
	Settlement
Class Members claiming benefits as a Spouse must submit a Claim Forms for payment of benefits out of the Affected Product Revision Surgery Fund (the "Spousal Benefits Claim
Form"), attached hereto as Annex V.

	(b)
	A
completed Spousal Benefits Claim Form must be submitted within the time periods prescribed for the Affected Product Recipient's claim for benefits. A spousal Claimant is only
entitled to Settlement benefits if the Affected Product Recipient who underwent Affected Product Revision Surgery timely submits and is ultimately entitled to benefits pursuant to the present
Agreement. 

12.  EXCLUSIVE REMEDY / DISMISSAL OF ACTION  

	12.1
	EXCLUSIVE REMEDY

This
Agreement shall be the exclusive remedy for any and all Settlement Class Members with respect to Affected Product and Settled Claims. Neither the Respondents nor any Released Parties shall be
subject to liability or expense of any kind to any Settlement Class Members with respect to any Affected Product and/or Settled Claims. Upon expiration of the time to appeal, if an appeal lies, from
the Order of Judgment and approving this Agreement, or on the date on which all appeals have been exhausted and the Settlement approved, whichever is later, each of the Settlement Class Members shall
be forever barred from continuing, initiating, asserting or prosecuting any Settled Claim. 

	12.2
	The
Parties agree that no Settlement Class Members shall recover, directly or indirectly, any sums from Respondents or any other Released Parties other than those received under this
Settlement Agreement. 

16

 
	12.3
	SETTLEMENT OUT OF COURT OF ACTION

Upon
expiration of the time to appeal, if an appeal lies, from the Order or Judgment approving this Agreement, or on the date on which all appeals have been exhausted and the Settlement approved, and
upon payment by Respondents of the Settlement Amount, the Parties will file a Declaration of Settlement out of Court declaring the action settled out of Court for all legal purposes, in
capital, interest, additional indemnity and costs; 

13.  RELEASES / THIRD PARTY CLAIMS  

	13.1
	RELEASE AND SETTLED CLAIMS AGAINST RESPONDENTS AND RELEASED PARTIES

Upon
expiration of the time to appeal, if an appeal lies, from the order or judgment approving this Agreement, or on the date on which all appeals have been exhausted and the Settlement approved,
every Settled Claim shall be conclusively compromised, settled, released and discharged, and Settlement Class Members shall forever release and discharge the Respondents' and all Released Parties from
any past, present and future claims, actions, demands and liabilities of any nature whatsoever relating to such Settled claims. Such releases and discharges shall remain effective regardless of
changes in the circumstances or condition of Respondents and the other Released Parties or any Settlement Class Members, discovery of new or additional facts, or changes in applicable law. The
releases and discharges herein shall extinguish any claims for contribution and/or indemnification against Respondents and the other Released Parties. 

14.  RETENTION OF RECORDS / RIGHT OF REVIEW  

The
Claims Administrator shall retain all records relating to the claims. Respondents' Counsel and/or the Respondents and/or any of the Released Parties and/or their insurers may, at their expense,
upon seven (7) day written notice to Settlement Class Counsel, inspect Claims Administrator's records, including but limited to Canadian Settlement Class Members' medical records, upon
reasonable notice. Respondents' Counsel and the Respondents' insurers shall maintain the confidentiality of opt-out and claims information to the extent necessary to protect the identity
and privacy of individual Settlement Class Members. 

15.  SUBMISSIONS TO THE COURT BY THE CLAIMS ADMINISTRATOR  

All
submissions, requests or motions made to the Court by the Claims Administrator shall be served upon Settlement Class Counsel and Respondents' Counsel no later than fifteen (15) days prior
to the date of hearing. 

16.  REMITTANCE OF REMAINDER OF FUNDS  

The
Claims Administrator shall remit back to Respondents and/or Respondents' Counsel, any and all remaining funds and any and all interest generated at such time as provided by Section 5.4
and/or at any other date which the Court may see fit to determine upon request from Respondents and/or the Respondents' Counsel; 

17.  TERMINATION OF THIS AGREEMENT

	17.1
	DEFENDANTS' RIGHT OF TERMINATION

If
there are more than five (5) opt-outs by any of the members of the Canadian Settlement Class who underwent Affected Product Revision Surgery or more than fifteen
(15) opt-outs by any members of the Canadian Settlement Class who are Unrevised Affected Product Recipients from the Class Action Settlement, Respondents shall have the right to
terminate and withdraw from this 

17

 

Settlement Agreement at their sole discretion by giving written notice to the Court and to the Settlement Class Counsel. 

	17.2
	PROCEDURES AND TIME FOR TERMINATION

	(a)
	The
Claims Administrator shall provide Respondents' Counsel and Settlement Class Counsel with access to all information submitted by opt-outs as information is received.
Within fifteen (15) days following the Opt-Out Deadline, the Claims Administrator shall notify, via registered mail, Respondents' Counsel and Settlement Class Counsel of the total
number of members of the Canadian Settlement
Class who have opted out of this Agreement and indicate how many of said Opt-Outs have undergone an Affected Product Revision Surgery (APRS);

	(b)
	Respondents
may exercise their right to terminate the Agreement by providing written notice to Settlement Class Counsel and to the Court within ten (10) days from the date of
which the Claims Administrator informs Respondents' Counsel of the number of members of the Canadian Settlement Class who have opted out of this Agreement; 

	17.3
	NOTICE TO MEMBERS OF THE CANADIAN SETTLEMENT CLASS

In
the event that the Respondents exercise their right of termination, Notice of Termination shall be given to the members of the Canadian Settlement Class by way of public notice and also
individually to all members of the Canadian Settlement Class who have registered and/or submitted a claim with the Claims Administrator. The content and method of dissemination of the Notice of
Termination shall be determined by the Court. Any costs associated with the Notice of Termination shall be paid by the Respondents. 

	17.4
	AUTOMATIC TERMINATION OF THE AGREEMENT

This
Agreement shall, without notice, be automatically terminated if the Court declines to approve this Settlement Agreement or, in the event of an appeal, if the Court's approval order is not
affirmed; 

	17.5
	EFFECT OF TERMINATION

In
the event that this Agreement is terminated, the authorization of the Class Action as well as the approval of this Agreement by the Court, shall be null and void and this Agreement shall have no
further force and effect and shall not be used or referred to in any litigation involving any of the Parties and/or members of the Canadian Settlement Class; 

18.  MISCELLANEOUS PROVISIONS  

	18.1
	ONGOING JURISDICTION

Court
shall, inter alia, retain exclusive and continuing jurisdiction over the Parties, all Settlement Class Members, Respondents and the other Released
Parties, and over this Settlement Agreement with respect to, inter alia, the performance of the terms and conditions hereof, to assure that all disbursements are properly made in accordance with the
terms of the Settlement Agreement, and to interpret and enforce the terms and conditions of this Settlement Agreement. Other than provided herein, the Court shall have the power to approve the
designation, appointment and removal of the Claims Administrator and its agents, and the execution of contracts as necessary and appropriate to assure the administration of this Settlement Agreement.
Any dispute that arises under this Settlement Agreement shall be submitted to the Court. If any dispute is so submitted, each party concerned shall be entitled to fifteen (15) days' written
notice (or otherwise as the Court may for good cause direct) and the opportunity to submit evidence and to be heard on oral argument as the Court may direct. 

18

 
	18.2
	Each
Approved Claimant who is entitled to receive benefits under this Settlement Agreement shall be required, as a further condition to receive benefits hereunder, to execute and
deliver an individual release, which shall be in the form attached hereto as Annex VI.

	18.3
	Any
information provided by or regarding any member of the Canadian Settlement Class, or otherwise obtained pursuant to this Settlement Agreement shall be kept confidential and shall
not be disclosed except to appropriate persons to the extent necessary to process Claims or provide benefits under this Settlement Agreement or as otherwise expressly provided in this Settlement
Agreement (including, but not limited to, information to be released in connection with the "registry". All members of the Canadian Settlement Class shall be deemed to have consented to the disclosure
of this information for these purposes.

	18.4
	This
Settlement Agreement shall be binding on the successors and assigns of the Parties.

	18.5
	The
Parties to the Settlement, including Respondents, the other Released Parties, or any members of the Canadian Settlement Class, shall not seek to introduce and/or offer the terms
of the Settlement Agreement, any statement, transaction or proceeding in connection with the negotiation, execution or implementation of this Settlement Agreement, any statements in the Notice
documents delivered in connection with this Settlement Agreement, stipulations, agreements, or admissions made or entered into in connection with the fairness hearing or any finding of fact or
conclusion of law made by the Court, or otherwise rely on the terms of this Settlement Agreement, in any judicial proceeding, except insofar as it is necessary to enforce the terms of the Settlement
Agreement (or in connection with the determination of any income tax liability of a party hereto, if necessary). If any member of the Canadian Settlement Class who is not entitled to benefits
hereunder seeks to introduce and/or offer any of the matters described herein in any proceeding, the restrictions of this Section 18.6 shall not be applicable to the Released Parties with
respect to such members. If any member of the Canadian Settlement Class who has timely and properly opted out seeks to introduce and/or offer any of the
matters described herein in any proceeding, the restrictions of this Section 18.6 shall not be applicable to the Released Parties with respect to any such members.

	18.6
	Neither
this Settlement Agreement nor any Annex, document or instrument delivered hereunder nor any of the statements in the notice documents in connection herewith, nor any
statement, transaction or proceeding in connection with the negotiation, execution or implementation of this Settlement Agreement, is intended to be or shall be construed as or deemed to be evidence
of an admission or concession by Respondents or the Released Parties of any liability or wrongdoing or of the truth of any allegations asserted by any plaintiff against it or them, or as an admission
by the Petitioner or any members of the Canadian Settlement Class of any lack of merit in their claims, and no such statement, transaction or proceeding shall be admissible in evidence for any such
purpose except for purposes of obtaining approval of this Settlement Agreement in this or any other proceeding.

	18.7
	The
headings of the Sections and paragraphs of this Settlement Agreement are included for convenience only and shall not be deemed to constitute part of this Settlement Agreement or
to affect its construction.

	18.8
	Any
form or other documentation required to be submitted under this Settlement Agreement shall be deemed timely if received on or before the date by which it is required to be
submitted under this Settlement Agreement.

	18.9
	No
provision of this Settlement Agreement or any Annex hereto is intended to create any third party beneficiary to this Settlement Agreement. 

19

 

19.  ENTIRE AGREEMENT  

This
Agreement, including all Annexes attached hereto, constitutes the entire agreement by and among the Parties with regard to the subject of this Agreement and shall supersede any previous
agreements and understandings between the Parties with respect to the subject matter of this Agreement. This Agreement may not be modified or amended except in writing signed by all Parties hereto and
subject to the Court's approval; 

20.  OTHER ORIGINALS  

This
Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument; 

21.  NOTIFICATION  

Any
notification, request, instruction or other document to be given by any party to this Agreement to any other party to this Agreement (other than class notification) shall be in writing and
delivered personally or sent by registered mail, postage prepaid, if to the Petitioners, to the attention of Settlement Class Counsel Kugler Kandestin (Suite 2101, 1 Place Ville-Marie, Montreal QC
H3B 2C6) and Jean-Jules Fiset, avocat-attorney (71 Saint-Pierre, 7th Floor, P.O. Box 245, Station B, Québec QC G1K 7A9), and, if to the
Respondents, to the attention of François Marseille at Robinson Sheppard Shapiro (Suite 4600, 800 Victoria Square, Montreal QC H4Z 1H6); 

22.  DATES  

Dates
referred to in this Agreement may be altered only with the consent of the Parties and with the approval of the Court; 

23.  GOVERNING LAW  

This
Settlement Agreement shall be governed by and construed in accordance with the laws of Quebec. 

24.  TRANSACTION  

This
Agreement is a transaction in virtue of Article 2631 of the Civil Code of Quebec and Article 1025 of the Code
of Civil Procedure. 

25.  GENERAL  

In
order to become effective, this Settlement Agreement must receive final judicial approval, as well as the necessary approval from the boards of directors of Centerpulse Ltd. and of
Centerpulse Orthopedics Inc. 

26.  FRENCH TRANSLATION  

A
French translation of this Agreement and all Annexes attached thereto shall be prepared by Respondents at their costs and be made available to Canadian Class Members. In the event there are any
differences between the two versions of this Agreement, the English version shall take precedence. 

20

 

27.  FRENCH LANGUAGE CLAUSE  

Les
parties ont convenu que cette entente soit rédigée en anglais. 

	DATED THIS 7th DAY OF MAY, 2002.
	 	 
	Settlement Class Counsel	 
	 	/s/  KUGLER KANDESTIN      
KUGLER KANDESTIN

General partnership
	 	 
	 	 
	 	/s/  JEAN-JULES FISET      
Jean-Jules Fiset, avocat-attorney
	 	 
	 	 
	Respondents' Counsel	ROBINSON SHEPPARD SHAPIRO
 General partnership

Per:
	 	 
	 	 
	 	/s/  FRANÇOIS MARSEILLE      
 François Marseille
	 	 
	 	 
	 	/s/  JEAN-PIERRE SHEPPARD      
 Jean-Pierre Sheppard
	 	 
	 	 
	 	CENTERPULSE ORTHOPEDIC INC.
 Per:
	 	 
	 	 
	 	/s/  DAVID WISE      
 David Wise, Secretary
	 	 
	 	 
	 	CENTERPULSE LTD. Per:
	 	 
	 	 
	 	/s/  FRANÇOIS MARSEILLE      
 Mtre. François Marseille

As per a Power of Attorney

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Exhibit 4.20    
  

        6 July 2001

	Separation Agreement
	

 	
 	

 
	

 	
 	

 
	between
	

 	
 	

 
	

 	
 	

 
	Sulzer AG, Zürcherstrasse 12, 8400 Winterthur
	 	 	 
	hereinafter "SUAG"
	

 	
 	

 
	and
	

 	
 	

 
	Sulzer Medica AG, Zürcherstrasse 12, 8400 Winterthur
	 	 	 
	hereinafter "MEAG"
	 	 	 

  

 
 

TABLE OF CONTENTS    
  

	 
	 
	 
	 	Page

	A.	SEPARATION	 	2
	 	1	General Principles	 	2
	 	2	General Shareholders' Meeting of MEAG	 	2
	 	3	Intellectual Property Rights and Use of the Name of SUAG	 	2
	 	4	Services and Cooperation Agreements	 	3
	 	5	Fiduciary Holdings	 	4
	B.	INDEMNITY ARRANGEMENT	 	5
	 	6	Rightful Claimants	 	5
	 	7	Mutual Compensation for Business Liabilities	 	5
	 	8	Mutual Compensation for Tax Liabilities	 	5
	 	9	Mutual Compensation for Prospectus Liabilities	 	6
	 	10	Procedure Related to Third Party Claims	 	6
	C.	MISCELLANEOUS	 	7
	 	11	Costs	 	7
	 	12	Conditions	 	7
	 	13	Access to Books and Records	 	7
	 	14	Announcements	 	7
	 	15	Non-Assignment	 	7
	 	16	Changes and Modifications of the Agreement	 	7
	 	17	Notices	 	8
	 	18	Obligations of SUAG and MEAG	 	8
	 	19	Applicable Law and Arbitration Clause	 	8

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PREAMBLE  

	•
	On
4 July 1997 SUAG and MEAG executed a master agreement (the "Master Agreement"), attached to the
Separation Agreement as Appendix A, which covers the main issues concerning the relationship between SUAG and MEAG in connection with the reorganization of MEAG undertaken at that time.

	•
	The
SUAG shareholders have resolved at their ordinary shareholders' meeting on 19 April 2001 to spin off the MEAG shares held by SUAG to the SUAG
shareholders ("Separation") whereby each SUAG shareholder shall receive two MEAG shares per one SUAG share.

	•
	At
the time of the execution of this Agreement, SUAG holds 74 percent of MEAG's share capital. The remaining 26 percent are held by the public.

	•
	Prior
to the signing of this Agreement SUAG has transferred 73 percent of the share capital of MEAG to a new legal entity called Sulzer Newco AG
("Newco") as a contribution in kind.

	•
	Based
on a resolution to decrease the share capital of SUAG and to pay out a dividend in kind, the SUAG shareholders receive two Newco shares per SUAG share.
However, because of the merger of Newco and MEAG resulting in the dissolution of Newco, the SUAG shareholders will not receive Newco shares but MEAG shares. 

 

	A.
	 SEPARATION 

 
	1
	 General Principles

	1.1
	As a general rule, the relevant provisions of the Master Agreement shall continue to govern the relationship between the parties during
and after the Separation, unless otherwise agreed in this Agreement.

	1.2
	The parties undertake to take all steps necessary to implement the Separation and to carry on the business in such a way as to prevent
it from being negatively affected by the Separation.

	1.3
	The parties shall use all commercially reasonable efforts to effect the Separation immediately after the extraordinary shareholders'
meeting (see section 2). 

	2
	 General Shareholders' Meeting of MEAG

	2.1
	Prior to the Separation MEAG shall hold an extraordinary shareholders' meeting.

	2.2
	The extraordinary shareholders' meeting of MEAG shall resolve on the following items:

	(a)
	election of new members of the board of directors (Verwaltungsräte);

	(b)
	modification of the articles of association pursuant to the agenda of the extraordinary shareholders' meeting of 9 July, 2001. 

	3
	 Intellectual Property Rights and Use of the Name of SUAG

	3.1
	MEAG shall continue to have the right to use the names "Sulzer", "Sulzer Medica" and "Sulzermedica" as trademark, part of the corporate
name and/or trade name in accordance with the existing license agreements (see Master Agreement III.2). The licenses for the use of the names Sulzer", "Sulzer Medica" and "Sulzermedica" and the
licence agreements in relation to trademarks, if any, shall in any case continue to be valid until 30 June 2003. In any case, the license fees according to the existing license agreements are
to be paid as long as the use of the rights continues.

	3.2
	As of 30 June 2003 MEAG shall discontinue the use of the names Sulzer", "Sulzer Medica" and "Sulzermedica"; however, existing
products may still be disposed of or used respectively. This also applies to other purposes of use (tools, labels, documentations etc.), but not where MEAG uses "Sulzer" as a corporate name, i.e.
particularly on letterheads, buildings etc. No license fees are owed after 30 June 2003.

	3.3
	Furthermore, the parties agree that, in general, all intellectual property rights related to the MEAG Business (according to the
definition in section 3.7), including patents, trademarks, models, patterns, copyrights, know how etc. shall be transferred to MEAG or to a MEAG group company designated by MEAG as at the date
of Separation. To this effect, SUAG assigns as of the date of the Separation the respective intellectual property rights free of charge to MEAG or the MEAG group company respectively, it being
understood that MEAG shall bear any costs related to such transfer. To the extent that pursuant to the laws applicable to an intellectual property right further actions are necessary for the transfer
of such right (e.g. registration), SUAG undertakes to cooperate at any time. It is at MEAG's discretion whether and when the registrations or modifications of existing registrations shall be effected
in the individual case. SUAG shall continue, against payment of the related expenses, to ensure the maintenance and administration of the intellectual property rights on behalf and for the account of
MEAG. Both parties may terminate this mandate agreement upon 6 months' written notice.

	3.4
	Moreover, MEAG and each MEAG group company has the right to exclusively use among others the following trademarks in the medical
technology business on the agreed terms: Protasul, Sulmesh, Metasul. Furthermore, as a general rule, where MEAG or a MEAG group company is currently using a trademark with the component "Sul", it
shall be entitled to continue using it in future. Moreover, MEAG has the right to request the transfer of the respective trademark to MEAG or to a MEAG group company. As long as any of such 

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trademarks
has not been transferred to MEAG or to a MEAG group company, MEAG or the respective MEAG group company shall have the exclusive right to use it in the MEAG Business, unless the respective
trademark is currently used by SUAG in the SUAG Business. Conversely, SUAG has the right to continue using the trademarks related to the MEAG Business which SUAG is currently using. 

	3.5
	In relation to patents held by the parties, the Master Agreement shall apply.

	3.6
	The parties shall procure that all license agreements entered into with third parties with regard to intellectual property rights
relevant for the MEAG Business shall be transferred to MEAG, to the extent this has not been effected already. In case a third party does not grant a consent required for the assumption of an
agreement by MEAG, the parties agree on a solution among each other which allows the commercial transfer of the relevant rights and obligations to MEAG anyhow.

	3.7
	"MEAG Business" shall mean all business activities of MEAG and of its group companies in relation to the development, manufacturing and
distribution of joint, vascular, dental or heart implants, traumatology implants and cardiovascular products as well as biotechnological products and forging, in particular for the aviation and
automobile industry ("Sulzer Forging"). "SUAG Business" shall mean all business activities that have been or are being conducted by SUAG or by a SUAG group company or by a predecessor of any of these
companies prior or after the completion of this Agreement, except for the activities concerning the MEAG Business. 

	4
	 Services and Cooperation Agreements

	4.1
	All existing contracts, agreements and other forms of cooperation between the parties and their group companies shall be continued
unless otherwise agreed by the parties in this Separation Agreement.

	4.2
	The following agreements shall be annulled as of the indicated date:

	(a)
	Administration and Service Agreement (Verwaltungsdienstleistungs-Vertrag) (dated 26
March 1993 pursuant to Annex 4.2.a) as of 31 July 2001;

	(b)
	Research and Development Agreements (Forschungs- und
Entwicklungsverträge) between MEAG group companies and Sulzer Innotec AG (pursuant to Annex 4.2b) as of 31 December 2001;

	(c)
	Biomaterials Agreement dated 1 January 1996 with retroactive effect as of 1 January 2000 which shall be replaced at the
same time by the Dissolution Agreement and the Assignment Agreement pursuant to Annex 4.2.c. 

	4.3
	With the termination of all R&D cost sharing agreements mentioned under section 4.2(b), MEAG waives any rights and claims
(including Innotec Patents) which are governed by these agreements. MEAG guarantees for the years 2002 and 2003 a minimum volume of direct research- and development and/or service assignments to the
present Sulzer Innotec in the amount of CHF 3 million per year, provided that and insofar as SUAG ensures that such research, development and other services meet the current quality standards.

	4.4
	Subject to separate agreements, services, including administrative services, shall mutually be rendered (a) on the terms
currently valid (excluding apportionments), or, if no such terms are available, (b) at prevailing market conditions (arm's length) or, if no such
market conditions are ascertainable, (c) at cost (excluding general overhead) plus a 5 percent margin. 

The
existing lease agreements between the parties and their group companies shall be continued unchanged. The sale of premises in which any of the parties or their group companies in leasing space is
permitted only if the purchaser takes over the lease agreement. Furthermore, SOAG Oberwinterthur shall have the preferential right to purchase the manufacturing and office premises no. 540 and
541. Moreover, SOAG Oberwinterthur shall also have the option to lease additional space pursuant to the letter of intent in Annex 4.4. 

3

 

and to extend the term of the existing lease agreements until 31 December 2005. The extension option has to be exercised in writing not later than 12 months prior to the termination of
the respective lease agreement or, as far as lease agreements are concerned which are not limited in time, not later than 31 December 2003. 

	4.5
	SUAG and MEAG will continue to run the apprenticeship affairs like in the past, except for matters involving costs. With effect as of 1
August 2001 MEAG shall pay the actual costs for education of the apprentices employed by MEAG or any of its group companies, it being understood that the costs to be paid by MEAG per apprentice
shall not exceed those to be paid by SUAG. SUAG and MEAG intend to restructure the apprenticeship affairs as of 1 January 2002 and to transfer these affairs into the legal form of an
association (Verein) which will be founded for that purpose. In the unfortunate and unintended event that it should be decided collectively not to
transfer the apprenticeship affairs in Winterthur into the legal structure of an association and if, as a consequence, restructuring costs should arise, the following shall apply: MEAG and SUAG shall
jointly define the content and scope of the restructuring; MEAG and SUAG shall bear the restructuring costs proportionally; the mechanism to allocate costs shall be determined jointly on a
case-by-case basis at the given time.

	4.6
	The parties agree that MEAG shall procure new insurance coverage for the MEAG Business with effect as of the date of Separation, and
SUAG shall assist MEAG in order to maintain adequate insurance coverage and to avoid gaps in the insurance coverage.

	4.7
	Concerning product liability insurance events, the provisions of the Master Agreement shall apply.

	4.8
	The parties shall coordinate their efforts in seeking commercially reasonable and adequate solutions with software-licensors, in
particular through sublicenses (as far as possible and commercially reasonable), the assignment of licenses or negotiations with regard to separate license agreements.

	4.9
	MEAG shall enter into an agreement with the pension fund of SUAG not later than at the date of the Separation to ensure coverage of the
current employees of MEAG and its group companies and new employees of MEAG and its group companies. The relevant agreement shall be attached hereto as Annex 4.9.

	4.10
	SUAG is currently conducting negotiations with IBM in relation to the right to dispose over and use the IP addresses used so far by
SUAG and MEAG and their respective group companies. Insofar and to the extent SUAG will be able to establish the right to dispose over and use these IP addresses, SUAG undertakes to grant MEAG the
right to use a portion of these IP addresses in proportion to the part already used. 

	5
	 Fiduciary Holdings

	5.1
	The parties agree that MEAG shall acquire the company "Sulzer Australia Pty" after the spin off of the industry business. For this
purpose, the parties have entered into a separate purchase agreement.

	5.2
	The relevant fiduciary shall account for the fiduciary holdings in accordance with the accounting rules for fiduciaries, i.e. as
off-balance-sheet items. Conversely the other party must account the respective fiduciary holdings as if they were already transferred to it.

	5.3
	The fiduciary shall hold and manage the fiduciary holdings pursuant to the instructions of the other party. If no such instructions
have been given or are available the fiduciary shall manage the business as required by the ordinary course of business. The other party undertakes to hold the fiduciary free of any harm incurred by
the fiduciary in connection with the performance of its duties as a fiduciary, to the extent that such harm is not attributable to gross negligence or wilful misconduct of the fiduciary. In this case,
the fiduciary shall indemnify the other party. 

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	5.4
	The fiduciary shall be reimbursed for all expenses, costs and taxes incurred in connection with the fiduciary holdings. The fiduciary
shall receive a fee at prevailing market conditions for its services. If the parties cannot agree on such fee, the fee shall be calculated at costs plus 2 per cent margin. 

	B.
	 INDEMNITY ARRANGEMENT 

 
	6
	 Rightful Claimants

	6.1
	Only SUAG and MEAG shall be the rightful claimants entitled to recovery under this Agreement; SUAG and MEAG shall, however, have the
right to assign their right for recovery to other group companies.

	6.2
	SUAG undertakes to resolve any claims or disputes between SUAG and MEAG or between any SUAG group company and any MEAG group company in
relation to any matter in the ambit of this Agreement in accordance with the provisions of this Agreement.

	6.3
	MEAG undertales to resolve any claims or disputes between MEAG and SUAG or between any MEAG group company and any SUAG group company in
relation to any matter in the ambit of this Agreement in accordance with the provisions of this Agreement. 

	7
	 Mutual Compensation for Business Liabilities

	7.1
	SUAG undertakes to hold MEAG harmless and indemnify it for all costs, damages, expenses and other obligations which arose or will arise
in connection with the SUAG Business (pursuant to the definition in section 3.7.) or as a consequence of the conduct of the SUAG Business.

	7.2
	MEAG undertakes to hold SUAG harmless and indemnify it for all costs, damages, expenses and other obligations which arose or will arise
in connection with the MEAG Business (pursuant to the definition in section 3.7.) or as a consequence of the conduct of the MEAG Business.

	7.3
	SUAG and MEAG shall be entitled to such recovery notwithstanding that any costs, damages, expenses or obligations have been incurred
prior to the execution of this Agreement.

	7.4
	To the extent SUAG or MEAG are indemnified for the incurred costs, damages, expenses and other obligations by third parties (including
insurance companies), no right to indemnification and recovery shall exist, unless the injured party (SUAG or MEAG) has waived the respective insurance claim in favour and for the benefit of the other
party. 

	8
	 Mutual Compensation for Tax Liabilities

	8.1
	SUAG undertakes to hold MEAG harmless and indemnify it for tax liabilities and costs which arose or will arise in connection with the
SUAG Business or as a consequence of the conduct of the SUAG Business.

	8.2
	MEAG undertakes to hold SUAG harmless and indemnify it for tax liabilities and costs which arose or will arise in connection with the
MEAG Business or as a consequence of the conduct of the MEAG Business.

	8.3
	All tax liabilities arising as a consequence of a SUAG Specified Event, as set forth in clause 8.7, shall be borne by SUAG.

	8.4
	All tax liabilities arising as a consequence of a MEAG Specified Event, as set forth in clause 8.7, shall be borne by MEAG.

	8.5
	All tax liabilities arising as a consequence of a SUAG Specified Event as well as of a MEAG Specified Event shall be borne by the
parties collectively in the proportion by which their respective Specified Events have contributed to the tax liabilities in question.

	8.6
	SUAG shall be entitled to all tax refunds that are related to the SUAG Business. MEAG shall be entitled to all tax refunds that are
related to the MEAG Business. 

5

 

	8.7
	A "SUAG Specified Event" shall mean any of the following:

	(a)
	any acts, matters or activities by any member of the SUAG Group which result in a tax liability for any members of the MEAG Group on
the grounds of non-compliance with covenants or conditions contained in the relevant tax rulings or of deviations from factual descriptions on which the relevant tax rulings are based,
including the ones dated 28 February 2001 (Federal Tax Administration / Division Federal Direct Tax, Withholding Tax and Stamp Duty) and dated 2 March 2001 (Tax Administration of the
Canton of Zurich) based on the tax working paper dated 25 February 2001 (including amendments) concerning the Separation or which otherwise jeopardizes the tax free treatment of the Separation
of MEAG;

	(b)
	any actions, circumstances or activities which relate to the restructuring (with the subsequent IPO) in the year 1997, according to the
arrangements of the Master Agreement. 

	8.8
	A "MEAG Specified Event" shall mean any of the following:

	(a)
	any acts, matters or activities by any member of the MEAG Group which result in a tax liability for any members of the SUAG Group on
the grounds of non-compliance with covenants or conditions contained in the relevant tax rulings or of deviations from factual descriptions on which the relevant tax rulings are based,
including the ones dated 28 February 2001 (Federal Tax Administration / Division Federal Direct Tax, Withholding Tax and Stamp Duty) and dated 2 March 2001 (Tax Administration of the
Canton of Zurich) based on the tax working paper dated 25 February 2001 (including amendments) concerning the Separation or which otherwise jeopardizes the tax free treatment of the Separation
of MEAG;

	(b)
	any actions, circumstances or activities which relate to the restructuring (with the subsequent IPO) in the year 1997, according to the
arrangements of the Master Agreement. 

	9
	 Mutual Compensation for Prospectus Liabilities

	9.1
	SUAG undertakes to hold MEAG harmless and indemnify it for costs, damages, expenses and other obligations, which arise out of a SUAG
Publication.

	9.2
	MEAG undertakes to hold SUAG harmless and indemnify it for costs, damages, expenses and other obligations, which arise out of a MEAG
Publication.

	9.3
	"SUAG Publication" shall mean any document or part of a document as far as the
information contained therein originated from SUAG or from a SUAG group company. "MEAG Publication" shall mean any document or part of a document as far
as the information contained therein originated from MEAG or from a MEAG group company. 

	10
	 Procedure Related to Third Party Claims

	10.1
	Subject to the special provisions in Annex 10.1. and sections 10.2. to 10.4. below, the provisions of Section V.2 of the Master
Agreement shall apply.

	10.2
	The parties shall have unrestricted access to all information with respect to claims and lawsuits related to porous coated products
(CsTi-technology) which show symptoms of early loosening and which have been developed, manufactured or distributed by subsidiaries of MEAG. The parties shall inform each other immediately
about new facts and developments in connection with such claims and lawsuits.

	10.3
	The parties shall coordinate their activities with respect to such claims and lawsuits and shall determine the litigation strategy
with the objective to arrive at a solution which is satisfactory for both parties. SUAG will use its best efforts to minimize costs and expenses (including attorney's fees). As a rule SUAG shall not
conduct its own fact-finding investigation. The litigation strategy will ultimately be determined by MEAG. 

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	10.4
	Settlements shall include both parties, their subsidiaries, directors, managements, and agents and shall provide for a release to the
largest possible extent for both parties, their subsidiaries, directors, managements, and agents. 

	C.
	 MISCELLANEOUS 

 
	11
	 Costs

	11.1
	SUAG and MEAG shall share the costs which they have to bear in connection with the separation and the defense against Incentive
Capital AG's takeover attempt as follows:

	•
	MEAG:
US$10,500,000.—

	•
	SUAG:
US$17,500,000.— 

The
costs in relation to the change of MEAG's name shall be borne by MEAG. 

	11.2
	In the event that this Agreement should not be executed, the costs accrued in connection with the Separation shall be born by both
parties equally. 

	12
	 Conditions

	12.1
	The fulfilment of this Agreement is subject to the following conditions precedent:

	(a)
	Approval of the items on the agenda by the general shareholders' meeting of MEAG of 9 July 2001;

	(b)
	Registration in the commercial register of the capital decrease of SUAG resolved with regard to the Separation. 

	12.2
	Upon common resolution, the board of directors of MEAG and SUAG may waive the above mentioned conditions precedent and determine that
this Agreement shall be implemented even though the respective condition precedent has not occurred. 

	13
	 Access to Books and Records

SUAG
and MEAG will provide each other with reasonable access to books, records, documents and information relevant for the exercise of their respective rights and obligations towards third parties.
Each party will keep such books, records, documents and information for at least ten years after the date of Separation. 

	14
	 Announcements

Until
the Separation date, the parties shall consult with each other and coordinate notifications relating to the Separation which are addressed to the public, their shareholders, their employees, the
authorities, or the stock exchanges. 

	15
	 Non-Assignment

Subject
to agreements to the contrary, the rights and obligations of the parties under this Agreement are not assignable. 

	16
	 Changes and Modifications of the Agreement

	16.1
	Changes to this Agreement must be made in writing.

	16.2
	If at all possible, each provision of this Agreement shall be interpreted so that it is valid and enforceable under applicable law. If
a provision of this Agreement should be unenforceable or invalid, it shall only lapse to the extent that it is unenforceable or invalid and shall be otherwise replaced by a valid and enforceable
provision which a party acting in good faith would regard as an adequate commercial alternative to the provision which is invalid or unenforceable. The other provisions of this Agreement shall remain
binding and in force under all circumstances. 

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	17
	 Notices

Notices
in connection with this Agreement shall be legally effected and binding if they are communicated in writing or by facsimile to the following addresses: 

	(a)
	In the case of SUAG:                Secretary General, fax no. 052/262 00 22

	(b)
	In the case of MEAG:                Secretary General, fax no. 052/262 00 59.

	18
	 Obligations of SUAG and MEAG

Wherever
a provision of this Agreement provides for any obligation, whether express or implied, of SUAG or of MEAG, the respective party shall ensure that all entities of its respective group performs
the said obligation pursuant to the terms and conditions set forth in this Agreement. 

	19
	 Applicable Law and Arbitration Clause

	19.1
	This Agreement is subject to Swiss law.

	19.2
	Any disputes arising out of this Agreement between the parties, shall be submitted to a three-member ad hoc arbitration tribunal based
in Winterthur with each party nominating one arbitrator. The chairman of the arbitration tribunal shall be nominated by the party's arbitrators. 

If
a party has not nominated its arbitrator within 30 days from receiving notice of the arbitration, that party's arbitrator shall be appointed by the President of the Zurich Chamber of
Commerce. If the arbitrators nominated by the parties are unable to agree on a chairman within 60 days, the chairman shall be appointed by the President of the Zurich Chamber of Commerce. 

	Winterthur, 6 July 2001	 	 
	 	 	 
	Sulzer AG	 	Sulzer Medica AG
	

 	
 	

 
	

 	
 	

 
	/s/ Roman Beran
	 	/s/ H. Georg Hahnloser

	

 	
 	

 
	/s/ Kurt Hägi
	 	/s/ Vanessa Oelz

8

 

Index of Annexes  

	Annex A	Master Agreement as of 4 July 1997
	

Annex 4.2 a)	

Administration and Service Agreement (Verwaltungsdienstleistungsvertrag)
	

Annex 4.2 b)	

R&D Cost-Sharing Agreement
	

Annex 4.2 c)	

Dissolution Agreement / Assignment Agreement
	

Annex 4.4	

Leased space SOAG Winterthur
	

Annex 4.6	

Memo as of 27 June 2001 regarding personal and property insurances
	

Annex 4.9	

Agreement on pension funds (Pensionskassen-Anschlussvertrag)

9

 

Annex 4.4 to the Separation Agreement  

between
Sulzer AG, Zürcherstrasse 12, 8400 Winterthur ("SUAG") and Sulzer Medica AG, Zürcherstrasse 12, 8400 Winterthur
("MEAG") 

With
reference to section 4.4 of the Separation Agreement SUAG and MEAG have agreed on the following with regard to the additional needs of Sulzer Orthopädie AG
("SOAG") for office and production space at the location of SOAG on the industry area in Oberwinterthur: 

In
order to ensure the current location of SOAG in Oberwinterthur for a medium- up to long-term, SOAG presumably requires approx. 2,000 square meter additional office space and approx.
3,000 square meter additional production space within the next 1 to 5 years. 

Currently
unrented office and production space is available in the existing buildings nos. 579, 615 (production), 530, 622, 731 (office) on the industry area in Oberwinterthur. SUAG acknowledges that
MEAG herewith declares its interest in such space for the benefit of SOAG. Additionally, or as
alternative during the transition period to the occupancy described above, SOAG intends—whereby the necessary parking space must be ensured—to expand the office building 540
and the production building 541 as well as the office pavilion 577 (addition of storey). 

SUAG
shall primarily consider MEAG in case all or part of such space is intended to be rented or sold to a third party and shall at the same time give MEAG or SOAG respectively the opportunity to
submit an offer to rent or purchase. 

10

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