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Exhibit 4.24    
  

STOCK PURCHASE AGREEMENT  

 among  

 CENTERPULSE USA HOLDING CO.,  

 CENTERPULSE LTD.  

 and  

 MICROVENA CORPORATION  

 for  

 Purchase of all of the Outstanding Shares of Capital Stock of  

 Sulzer IntraTherapeutics, Inc.  

 Dated as of August 30, 2002  

  

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	DEFINITIONS	 	1
	 	Section 1.01	 	Certain Defined Terms	 	1
	 	Section 1.02	 	Other Defined Terms	 	5
	ARTICLE II	 	PURCHASE AND SALE	 	6
	 	Section 2.01	 	Purchase and Sale of the Shares	 	6
	 	Section 2.02	 	Purchase Price	 	6
	 	Section 2.03	 	Closing	 	6
	 	Section 2.04	 	Closing Deliveries by Seller	 	6
	 	Section 2.05	 	Closing Deliveries by Purchaser	 	6
	 	Section 2.06	 	Adjustment of Purchase Price	 	7
	ARTICLE III	 	REPRESENTATIONS AND WARRANTIES OF SELLER	 	8
	 	Section 3.01	 	Incorporation and Authority of Seller	 	8
	 	Section 3.02	 	Incorporation of ITI	 	9
	 	Section 3.03	 	Capital Stock of ITI; No Subsidiaries	 	9
	 	Section 3.04	 	No Conflict	 	9
	 	Section 3.05	 	Consents and Approvals	 	9
	 	Section 3.06	 	Financial Information	 	9
	 	Section 3.07	 	Absence of Undisclosed Liabilities, Etc.	 	10
	 	Section 3.08	 	Absence of Certain Changes or Events	 	10
	 	Section 3.09	 	Litigation	 	11
	 	Section 3.10	 	Compliance with Laws; Certain Regulatory Matters	 	11
	 	Section 3.11	 	Licenses and Permits	 	11
	 	Section 3.12	 	Environmental Matters	 	12
	 	Section 3.13	 	Intellectual Property Rights	 	12
	 	Section 3.14	 	Material Contracts	 	13
	 	Section 3.15	 	Property	 	14
	 	Section 3.16	 	Benefit Plans and Employee Arrangements	 	15
	 	Section 3.17	 	Taxes	 	16
	 	Section 3.18	 	Brokers	 	17
	 	Section 3.19	 	Insurance	 	17
	 	Section 3.20	 	Transactions with Directors, Officers and Affiliates	 	18
	 	Section 3.21	 	Change in Ownership	 	18
	 	Section 3.22	 	Labor Matters	 	18
	 	Section 3.23	 	Assets of ITI	 	19
	 	Section 3.24	 	Inventories	 	19
	 	Section 3.25	 	Receivables and Payables	 	19
	 	Section 3.26	 	Products and Warranties	 	20
	 	Section 3.27	 	Illegal or Unauthorized Payments; Political Contributions	 	20
	 	Section 3.28	 	[Estimates, Projections and Forecasts	 	20
	 	Section 3.29	 	[No Implied Representations and Warranties	 	20
	ARTICLE IV	 	REPRESENTATIONS AND WARRANTIES OF PURCHASER	 	21
	 	Section 4.01	 	Incorporation and Authority of Purchaser	 	21
	 	Section 4.02	 	No Conflict	 	21
	 	Section 4.03	 	Consents and Approvals	 	21
	 	Section 4.04	 	Litigation	 	21
	 	Section 4.05	 	Investment Purpose	 	21
	 	Section 4.06	 	Financing	 	21

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	 	Section 4.07	 	Brokers	 	21
	ARTICLE V	 	ADDITIONAL AGREEMENTS	 	22
	 	Section 5.01	 	Conduct of Business Prior to the Closing	 	22
	 	Section 5.02	 	Investigation; Confidentiality	 	23
	 	Section 5.03	 	Access to Information	 	24
	 	Section 5.04	 	Books and Records	 	25
	 	Section 5.05	 	Satisfaction of Conditions Precedent; Regulatory and Other Authorizations; Notices and Consents	 	25
	 	Section 5.06	 	Notification to Governmental Authorities	 	26
	 	Section 5.07	 	Non-Competition	 	26
	 	Section 5.08	 	Intercompany Arrangements	 	27
	 	Section 5.09	 	Insurance Coverage	 	27
	 	Section 5.10	 	Transition Services	 	27
	 	Section 5.11	 	No Negotiations	 	27
	 	Section 5.12	 	Sulzer Orthopedics Settlement Arrangement	 	28
	 	Section 5.13	 	Insurance	 	28
	 	Section 5.14	 	Tax Lien	 	28
	 	Section 5.15	 	Non-Solicit	 	28
	 	Section 5.16	 	Further Action	 	28
	ARTICLE VI	 	EMPLOYEE MATTERS	 	28
	 	Section 6.01	 	Continuation of Benefits	 	28
	 	Section 6.02	 	Cash Compensation	 	29
	 	Section 6.03	 	Termination of ITI's Participation in Seller's Plans	 	29
	 	Section 6.04	 	Severance	 	29
	 	Section 6.05	 	401(k) Plan	 	29
	 	Section 6.06	 	COBRA	 	29
	ARTICLE VII	 	TAX MATTERS	 	29
	 	Section 7.01	 	Indemnity	 	29
	 	Section 7.02	 	Tax Returns and Payments	 	30
	 	Section 7.03	 	Refunds	 	31
	 	Section 7.04	 	Contests	 	31
	 	Section 7.05	 	Cooperation and Exchange of Information	 	32
	 	Section 7.06	 	Conveyance Taxes	 	32
	 	Section 7.07	 	Miscellaneous	 	32
	ARTICLE VIII	 	CONDITIONS TO CLOSING	 	33
	 	Section 8.01	 	Conditions to Obligations of Seller	 	33
	 	Section 8.02	 	Conditions to Obligations of Purchaser	 	33
	ARTICLE IX	 	INDEMNIFICATION	 	36
	 	Section 9.01	 	Survival of Representations and Warranties	 	36
	 	Section 9.02	 	Indemnification by Purchaser	 	36
	 	Section 9.03	 	Indemnification by Seller	 	38
	ARTICLE X	 	TERMINATION AND WAIVER	 	40
	 	Section 10.01	 	Termination	 	40
	 	Section 10.02	 	Effect of Termination	 	41
	 	Section 10.03	 	Waiver	 	41
	ARTICLE XI	 	GENERAL PROVISIONS	 	41
	 	Section 11.01	 	Expenses	 	41
	 	Section 11.02	 	Notices	 	41
	 	Section 11.03	 	Public Announcements	 	42
	 	Section 11.04	 	Headings	 	42

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	 	Section 11.05	 	Severability	 	42
	 	Section 11.06	 	Entire Agreement	 	42
	 	Section 11.07	 	Assignment; Fulfillment of Obligations	 	43
	 	Section 11.08	 	No Third Party Beneficiaries	 	43
	 	Section 11.09	 	Amendment	 	43
	 	Section 11.10	 	Governing Law	 	43
	 	Section 11.11	 	Counterparts	 	43
	 	Section 11.12	 	Disclosure Schedule	 	43
	 	Section 11.13	 	Currency	 	43
	 	Section 11.14	 	Specific Performance	 	43
	 	Section 11.15	 	Waiver of Jury Trial	 	43
	 	Section 11.16	 	Centerpulse Guarantee	 	43

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        STOCK PURCHASE AGREEMENT, dated as of August 30, 2002, between CENTERPULSE USA HOLDING CO., a Delaware corporation ("Seller"),
MICROVENA CORPORATION, a Minnesota corporation ("Purchaser") and, with respect to Section 11.16 only, CENTERPULSE LTD., a corporation
organized under the laws of Switzerland ("Centerpulse"). 

W I T N E S S E T H:  

        WHEREAS, Seller owns all of the issued and outstanding shares of capital stock (the "Shares") of Sulzer
IntraTherapeutics, Inc., a Minnesota corporation ("ITI"); and 

        WHEREAS,
Purchaser wishes to purchase from Seller, and Seller desires to sell to Purchaser, the Shares, upon the terms and subject to the conditions set forth herein. 

        NOW,
THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, Seller and Purchaser hereby agree as follows: 

ARTICLE I  

DEFINITIONS 

        Section 1.01    Certain Defined Terms.    As used in this Agreement, the following terms shall have the
following meanings: 

        "Action" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority, and for
purposes of Section 3.09 only, includes any similar actions before any arbitrator or mediator of any nature whatsoever. 

        "Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified Person. 

        "Affiliated Organization" is any other "person" within the meaning of Section 7701(a)(1) of the Code, that together with ITI is
considered a single employer pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 3(5) or 4001(b)(1) of ERISA. 

        "Agreement" or "this Agreement" means this Stock Purchase Agreement, dated as of
August 30, 2002, between Seller, Purchaser, and with respect to Section 11.16 only, Centerpulse (including the Exhibits hereto and the Disclosure Schedule) and all amendments hereto made
in accordance with the provisions hereof. 

        "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed
in The City of New York. 

        "Bylaws" means the bylaws of any corporation organized under the law of any State of the United States of America and any equivalent
document of any corporation or entity organized under the laws of another jurisdiction, as amended or restated through the date hereof or the Closing Date, as the case may be. 

        "Charter" means the Certificate of Incorporation or Formation, Articles of Incorporation or Organization or other organizational document
of a corporation or limited liability company organized under the laws of any State of the United States of America and any equivalent document of a corporation, limited liability company or other
similar entity organized under the laws of another jurisdiction, as amended or restated through the date hereof or the Closing Date, as the case may be. 

        "Clinical Application Research Studies" means post-approval clinical studies of market-released products that do not require
an Investigational Device Exemption from the FDA. 

        "Closing Balance Sheet" means ITI's audited balance sheet (including the related notes and schedules thereto), to be prepared pursuant to
Section 2.06(a) and to be dated as of the end of the day immediately preceding the Closing Date. 

 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by contract or credit agreement or otherwise. 

        "Disclosure Schedule" means the Disclosure Schedule delivered by Seller to Purchaser, dated as of the date hereof. 

        "Encumbrance" means any security interest, pledge, mortgage, lien, claim, charge, restriction, limitation or encumbrance. 

        "Environmental Law" means any federal, state, or local statute, regulation, ordinance, order, decree, or other requirement of law
promulgated by a governmental entity relating to protection of human health or welfare, natural resources or the environment or to the identification, transportation, handling, discharge, emission,
treatment, storage, or disposal of any pollutant, contaminant, hazardous or solid waste, or any hazardous or toxic substance or material. Without limiting the generality of the foregoing,
Environmental Laws shall include, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Toxic
Substances Control Act, 15 U.S.C. § 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. 300(f) et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and
the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq.; each as amended, together with the regulations promulgated thereunder, permits issued thereunder, and analogous state
and local statutes, regulations and ordinances. 

        "ERISA" means the United States Employee Retirement Income Security Act of 1974, as amended. 

        "FDA" means the United States Food and Drug Administration. 

        "Governmental Authority" means any government, governmental, regulatory or administrative authority, agency or commission or any court,
tribunal, or judicial, quasi-judicial or arbitral body. 

        "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority. 

        "Hazardous Substance" means any toxic or hazardous substance or wastes, petroleum or petroleum products, asbestos or other pollutants, as
defined under applicable Environmental Laws. 

        "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder. 

        "Income Taxes" means all Taxes based, measured or computed by reference to net income. 

        "Indebtedness" means, with respect to any Person, (a) all indebtedness of such Person, whether or not contingent, for borrowed
money, (b) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (c) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person, (d) all obligations of such Person as lessee under leases that have been or should be, in accordance with U.S. GAAP,
recorded as capital leases, (e) all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities and (f) all Indebtedness of others
referred to in clauses (a) through (e) above guaranteed directly or indirectly by such Person. 

        "Intellectual Property" means all of the following: (i) inventions (whether patentable or unpatentable and whether or not reduced
to practice), all improvements thereto, all patent disclosures, 

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and all patents and patent applications, together with all reissues, continuations, continuations-in-part, divisions, extensions and reexaminations thereof, including all U.S.
applications and international counterparts; (ii) trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith; (iii) copyrightable works, all copyrights, and
all applications, registrations and renewals in connection therewith; (iv) mask works and all applications, registrations and renewals in connection therewith; (v) trade secrets and
confidential business information (including, without limitation, ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques,
technical data, test data, clinical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans and proposals) together with all underlying documentation (e.g., laboratory notebooks evidencing conception and reduction
to practice activities, prototyping, etc.); (vi) computer software (including object code, source code, data and related documentation); (vii) Internet Websites, including domain name
registrations and content and software included therein; (viii) all other proprietary rights; (ix) all rights to recover for past infringements of any of the foregoing; and
(x) all copies and tangible embodiments thereof (in whatever form or medium). 

        "Knowledge" means, with respect to Seller, the actual knowledge of Urs Kamber, Dennis Wallach, Kevin Dillon, Fred Kornahrens, Paula
Norbom, John Adams and Maureen Pistulka, and, solely with respect to Section 3.13 and Section 9.03(a), Kenneth Barrow and Paul Thompson, or such knowledge that any of such individuals
would have upon an inquiry into the matters to which such phrase pertains that a reasonable person in the position of such individual would have made in similar circumstances. 

        "Law" means any federal, state, canton, provincial, local or national statute, law, ordinance, regulation, rule, code, order or other
requirement or rule of law. 

        "Material Adverse Effect" means any change in or effect which, individually or in the aggregate with all other such changes and effects,
is materially adverse to ITI's assets, liabilities, financial condition or to the results of ITI's operations or prospects taken as a whole or that could have a material adverse effect on the ability
of Purchaser to conduct the business of ITI following the Closing as such business is conducted on the date hereof or the ability of Purchaser to exercise full rights of ownership of ITI or its assets
or business following the Closing, except for any such changes or effects resulting from (a) the identity or character of Purchaser, (b) changes in general economic or political
conditions or the securities markets or (c) changes after the date of this Agreement in conditions, generally applicable to Persons engaged in the design, manufacture, marketing, sale or
distribution of medical devices, including, without limitation, (i) changes in Laws (or interpretations thereof by any Governmental Authority) generally applicable to such Persons and
(ii) changes in U.S. GAAP or international accounting standards. 

        "Medical Product Regulatory Authority" means any Governmental Authority that is concerned principally with the safety, efficacy,
reliability or manufacture of medical products. 

        "Owned Intellectual Property" means all Intellectual Property (other than Licensed Intellectual Property) in and to which ITI holds, or
has a right to hold, right, title and interest including, without limitation, all Intellectual Property set forth on Exhibit 1.01(a). 

        "Permitted Encumbrances" means (a) liens for Taxes and assessments not yet payable, (b) liens for Taxes, assessments and
charges and other claims, the validity of which is being contested in good faith, (c) imperfections of title, liens, security interests and other encumbrances the existence of which,
individually or in the aggregate, do not interfere with the current use of the property encumbered thereby, (d) inchoate mechanics', materialmen's and similar liens for construction in progress
and
(e) workmen's, repairmen's, warehousemen's and carriers' liens arising in the ordinary course of business. 

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        "Person" means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization
or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. 

        "Pre-Closing Taxable Period" means (i) any taxable period ending on or before the Closing Date and (ii) with
respect to any Straddle Period, the portion of such Taxable period that begins before the Closing Date and that includes the Closing Date. 

        "Specified Actions" means (i) Actions alleging that ITI is infringing upon the Intellectual Property of any other Person,
(ii) Actions against ITI alleging that any individual suffered bodily injuries resulting from a defect in or malfunction of any product manufactured or sold by ITI and (iii) Actions
concerning Laws or Governmental Orders, including without limitation Actions governing the use, manufacture, sale and/or distribution of medical products with which ITI has involvement. 

        "Straddle Period" means any taxable period beginning before and ending after the Closing Date. 

        "Sulzer Orthopedics Settlement Arrangement" means the Class Action Settlement Agreement dated March 13, 2002 by and among Sulzer
Orthopedics, Inc., Sulzer Medica AG, Sulzer AG and Class Counsel on behalf of Class Representatives in re: Sulzer Hip Prosthesis and Knee Prosthesis Liability Litigation MDL Docket
No. 01-CV-9000 (MDL No. 1401), as the same may be amended from time to time. 

        "Tax" or "Taxes" means (a) all taxes, charges, fees, levies, duties, imposts or
other similar assessments, including income, gross receipts, ad valorem, excise, real property, personal property, windfall profit, sales, use, transfer, stamp, licensing, withholding, employment,
payroll, minimum, estimated and franchise taxes imposed by the United States or any federal, state, canton, provincial, local or national government, or any subdivision, agency or other similar Person
of the United States or any such government and (b) any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any such tax
or taxes. 

        "Tax Return" means any form, return or report of or relating to Taxes. 

        "Taxing Authority" means the United States Internal Revenue Service and any other federal, state, canton, provincial, local, national or
other Governmental Authority having the power to impose a Tax or Taxes. 

        "U.S. GAAP" means United States generally accepted accounting principles and practices as in effect from time to time and applied
consistently throughout the periods involved. 

        "Working Capital" of ITI as of any date means ITI's current assets less ITI's liabilities, the amounts of which shall be determined in
accordance with U.S. GAAP; provided, however, that notwithstanding U.S. GAAP, for purposes of calculating Working Capital based on the Reference Balance
Sheet and the Closing Balance Sheet, the following adjustments shall be made: (i) any cash and cash equaivalents shall not be included, (ii) all intercompany balances shall not be
included in ITI's accounts receivable, (iii) prepaid expenses relating to ITI's corporate name change shall not be included in ITI's prepaid expenses, (iv) the amount of the accrued
liability reserve for the shutdown of the Kasota facility will be a credit amount of $251,043 on both the Reference Balance Sheet and the Closing Balance Sheet, (v) the amount of the current
portion of the accrued liability reserve for excess capacity will be a credit amount of $331,185 on both the Reference Balance Sheet and the Closing Balance Sheet, (vi) the amount of the
long-term portion of the accrued liability reserve for excess capacity will be a credit amount of $667,421 on both the Reference Balance Sheet and the Closing Balance Sheet,
(vii) all intercompany payables shall be eliminated and (viii) any accruals for retention bonuses (including without limitation any such bonuses due employees or former employees of ITI
pursuant to understandings or agreements with such individuals that were made in connection with Seller's 

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acquisition of ITI) and change of control payments payable solely as a result of the consummation of the transactions contemplated hereby (or solely as a result of the consummation of the
transactions contemplated hereby and the passage of time) shall not be included as a liability on the Reference Balance Sheet but shall be included as a liability on the Closing Balance Sheet. 

        Section 1.02    Other Defined Terms.    The following terms shall have the meanings defined for such terms in
the Sections set forth below: 

	Term:
 
	 	Section:

	401(k) Plan Participants	 	Section 6.04
	Base Purchase Price	 	Section 2.02
	Benefit Plans	 	Section 3.16
	Biologics	 	Section 8.02
	Centerpulse	 	Preamble
	Closing	 	Section 2.03
	Closing Date	 	Section 2.03
	Coating Applications	 	Section 8.02
	Coating Disclosures	 	Section 8.02
	Compensation Plan	 	Section 3.16
	Competing Revenues	 	Section 5.07
	Competitive Products	 	Section 5.07
	Confidentiality Agreement	 	Section 5.02
	Defined Benefit Pension Plan	 	Section 3.16
	Designated Amount	 	Section 9.03
	Diversified Company	 	Section 5.08
	Eligible Diversified Company	 	Section 5.07
	Employee Arrangements	 	Section 3.16
	Final Tax Amount	 	Section 7.02
	Foreign Seller Retirement Plan	 	Section 3.16
	Government Antitrust Authority	 	Section 5.05
	Independent Accounting Firm	 	Section 2.06
	Insurance Evidence	 	Section 5.13
	Inventory	 	Section 3.24
	ITI	 	Recitals
	ITI Employees	 	Section 3.16
	ITI Financial Statements	 	Section 3.06
	ITI Interim Financial Statement	 	Section 3.06
	Leased Real Property	 	Section 3.15
	Lehman	 	Section 3.18
	Licensed Intellectual Property	 	Section 3.13
	Losses	 	Section 9.02
	Material Contracts	 	Section 3.14
	Multiemployer Plan	 	Section 3.16
	NLRB	 	Section 3.22
	Non-Competition Period	 	Section 5.08
	PBGC	 	Section 3.16
	Pension Plan	 	Section 3.16
	Plan	 	Section 3.16
	Purchase Price	 	Section 2.02
	Purchaser	 	Preamble
	Purchaser Indemnified Party	 	Section 9.03

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	Purchaser Plan	 	Section 6.04
	Purchaser Transition Services Agreement	 	Section 5.10
	Purchaser's Accountants	 	Section 2.06
	Purchaser's Threshold Amount	 	Section 9.02
	Reference Balance Sheet	 	Section 2.06
	Retention Bonuses	 	Recitals
	Seller	 	Preamble
	Seller Benefit Plans	 	Section 3.16
	Seller 401(k) Plan	 	Section 6.04
	Seller Indemnified Party	 	Section 9.02
	Seller Transition Services Agreement	 	Section 5.10
	Seller's Accountants	 	Section 2.06
	Seller's Threshold Amount	 	Section 9.03
	Shares	 	Recitals
	Straddle Period Return	 	Section 7.02
	Tax Items	 	Section 7.02
	Tax Indemnified Party	 	Section 7.04
	Tax Indemnifying Party	 	Section 7.04
	Welfare Plan	 	Section 3.16

ARTICLE II  

PURCHASE AND SALE 

        Section 2.01    Purchase and Sale of the Shares.    Upon the terms and subject to the conditions of this
Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver the Shares to Purchaser, free and clear of all Encumbrances, and Purchaser shall purchase the Shares. 

        Section 2.02    Purchase Price.    The aggregate purchase price for the Shares shall be Ninety Five Million
Dollars ($95,000,000) in cash (the "Base Purchase Price"), subject to adjustment as provided in Section 2.06 (the Base Purchase Price, as so
adjusted, being the "Purchase Price"). 

        Section 2.03    Closing.    Upon the terms and subject to the conditions of this Agreement, the sale and
purchase of the Shares shall take place at a closing (the "Closing") to be held at the offices of Oppenheimer Wolff & Donnelly LLP, 45 South
Seventh Street, 33rd Floor, Minneapolis, Minnesota at
10:00 a.m. Minneapolis local time on the third Business Day following the satisfaction or waiver of all conditions to the obligations of the parties set forth in Article VIII, or at such
other place or at such other time or on such other date as Seller and Purchaser may mutually agree upon (the day on which the Closing takes place being the "Closing
Date"). 

        Section 2.04    Closing Deliveries by Seller.    At the Closing, Seller shall deliver or cause to be delivered
to Purchaser: 

        (a)  certificates
representing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank; and 

        (b)  the
certificates and other documents required to be delivered pursuant to Section 8.02. 

        Section 2.05    Closing Deliveries by Purchaser.    At the Closing, Purchaser shall deliver or cause to be
delivered to Seller: 

        (a)  the
Base Purchase Price by wire transfer of immediately available funds to the account or accounts designated in writing by Seller to Purchaser at least two Business
Days prior to the Closing; and 

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        (b)  the
certificates and other documents required to be delivered pursuant to Section 8.01. 

        Section 2.06    Adjustment of Purchase Price.    The Purchase Price shall be subject to adjustment after the
Closing as specified in this Section 2.06: 

        (a)    Closing Balance Sheet.    As promptly as practicable, but in any event within 60 calendar days after the
Closing Date, Seller shall deliver to Purchaser the Closing Balance Sheet, together with a report thereon of PricewaterhouseCoopers (the "Seller's
Accountants"), stating that the Closing Balance Sheet was prepared in accordance with U.S. GAAP applied on a basis consistent with the preparation of the Reference Balance
Sheet. 

        (b)    Disputes.    (i) Subject to clause (ii) of this Section 2.06(b), the Closing Balance Sheet
delivered by Seller to Purchaser shall be deemed to be, and shall be, final, binding and conclusive on the parties hereto. 

        (ii)  Purchaser
may dispute any amounts reflected on or omitted from the Closing Balance Sheet or any other matter involving either the Reference Balance Sheet or the Closing
Balance Sheet, so long such dispute is a matter that may be addressed by the Independent Accounting Firm in accordance with the standards set forth below; provided,
however, that Purchaser shall have notified Seller in writing of each disputed item, specifying the amount thereof in dispute and/or the nature of the dispute and setting
forth, in reasonable detail, the basis for such dispute, within 20 Business Days of Seller's delivery of the Closing Balance Sheet to Purchaser; provided further,
however, that Purchaser may only dispute matters relating to the Closing Balance Sheet if the nature and/or amounts of the disputed matters are such that if all disputed
matters were resolved in Purchaser's favor, the Base Purchase Price under this Section 2.06 could be adjusted by at least $75,000. In the event of such a dispute, Seller's Accountants, together
with Seller, and Ernst & Young LLP (the "Purchaser's Accountants"), together with Purchaser, shall attempt to reconcile their differences, and
any resolution by them as to any disputes shall be final, binding and conclusive on the parties hereto. If the Persons named in the preceding sentence are unable to resolve any such dispute within 25
Business Days of Seller's receipt of Purchaser's notification of a dispute, Seller's Accountants and Purchaser's Accountants shall submit the items remaining in dispute or the nature of the dispute
for resolution to an independent accounting firm of international reputation mutually acceptable to Seller and Purchaser (the "Independent Accounting
Firm"), which shall, within 25 Business Days after such submission, determine and report to Seller and Purchaser upon such remaining disputed items, and such report shall be
final, binding and conclusive on Seller and Purchaser. In resolving any such disputes, the Independent Accounting Firm shall use the following standards: (i) first, the definition of Working
Capital set forth in this Agreement shall control, (ii) second, to the extent not inconsistent with clause (i), U.S. GAAP shall control, and (iii) third, to the extent not
inconsistent with clauses (i) and (ii), the principles used to prepare the Reference Balance Sheet shall control. Any amounts payable pursuant to this Section 2.06 which are not in
dispute shall be paid in accordance with paragraph (c) of this Section 2.06, notwithstanding that other amounts may remain in dispute. The fees and disbursements of the Independent
Accounting Firm shall be allocated to Purchaser in the same proportion that the aggregate amount of such remaining disputed items so submitted to the Independent Accounting Firm that is unsuccessfully
disputed by Purchaser (as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed items so submitted, and the balance shall be paid by Seller. In
acting under this Agreement, the Independent Accounting Firm shall be entitled to the privileges and immunities of arbitrators. 

        (c)    Base Purchase Price Adjustment.    The Closing Balance Sheet shall be deemed final for the purposes of this
Section 2.06 upon the earlier of (i) the failure of Purchaser to notify Seller of 

7

 

a dispute within 20 Business Days of Seller's delivery of the Closing Balance Sheet to Purchaser or (ii) the resolution of all disputes pursuant to Section 2.06(b)(ii). Within three
Business Days of the Closing Balance Sheet being deemed final, a Base Purchase Price adjustment shall be made as follows: 

          (i)  in
the event that the amount of Working Capital reflected on the Closing Balance Sheet is less than $(1,875,422), such amount being derived from ITI's balance sheet at
June 28, 2002, as adjusted, a copy of which is attached hereto as Exhibit 2.06(c) (the "Reference Balance Sheet"), then the Base Purchase
Price shall be adjusted downward in an amount equal to such shortfall, and Seller shall, within three Business Days of such determination, pay such amount to Purchaser by wire transfer in immediately
available funds; and 

        (ii)  in
the event that the amount of Working Capital reflected on the Closing Balance Sheet exceeds $(1,875,422), then the Base Purchase Price shall be adjusted upward in an
amount equal to the amount of such excess, and Purchaser shall, within three Business Days of such determination, pay the amount of such excess to the Person designated in writing by Seller by wire
transfer in immediately available funds. 

        (d)    Interest.    Any payment required to be made by Seller or Purchaser pursuant to Section 2.06(c) shall
bear interest from the Closing Date through the date of payment at an interest rate equal to the London Interbank Offered Rate for three-month Eurodollar deposits in effect from time to time. 

        (e)    Access.    Purchaser shall provide Seller and Seller's Accountants with reasonable access during normal
business hours to the books, records, facilities and employees of ITI, and shall cooperate fully with Seller and Seller's Accountants, to the reasonable extent required by Seller and Seller's
Accountants in order to prepare the Closing Balance Sheet. 

ARTICLE III  

REPRESENTATIONS AND WARRANTIES OF SELLER 

        Except
as set forth in the correspondingly numbered section of the Disclosure Schedule (or in any other section of the Disclosure Schedule such that the applicability of such disclosure
to the relevant representation and warranty in another section is obvious), Seller hereby represents and warrants to Purchaser that: 

        Section 3.01    Incorporation and Authority of Seller.    Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery by Seller of this Agreement, the performance by Seller of its obligations hereunder, and the consummation by Seller of the
transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller, and (assuming due
authorization, execution and delivery by Purchaser) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to
general equitable principles and except as enforceability of this Agreement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application
relating to creditor's rights. 

8

   
        Section 3.02    Incorporation of ITI.    ITI is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota. ITI is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which the property owned, leased, or
operated by it or the nature of its business makes such qualification necessary. Copies of ITI's Charter and Bylaws previously delivered to Purchaser were complete and accurate when delivered and
remain complete and accurate in all respects. ITI has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as now conducted and presently
proposed to be conducted. 

        Section 3.03    Capital Stock of ITI; No Subsidiaries.    

        (a)  The
authorized capital stock of ITI consists of 1,000 shares of common stock, $0.01 par value per share, all of which are currently issued and outstanding. 

        (b)  There
are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments obligating Seller or ITI to issue or sell any shares of
capital stock of, or equity interests in ITI. The Shares constitute all of the issued and outstanding shares of capital stock of ITI and are owned of record and beneficially solely by Seller, free and
clear of all Encumbrances. All of the Shares have been duly authorized and validly issued and are fully paid and nonassessable and were not issued in violation of any preemptive rights. There are no
voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. 

        (c)  ITI
does not own of record or beneficially, directly or indirectly, any rights to acquire any capital stock or any other securities, interests or investments in any
other Person other than investments which constitute cash or cash equivalents. 

        Section 3.04    No Conflict.    Assuming that all consents, approvals, authorizations and other actions
described in Section 3.05 have been obtained and all filings and notifications described in Section 3.05 have been made, and except as set forth in Section 3.05 of the Disclosure
Schedule and except as may result from any facts or circumstances relating solely to Purchaser or an Affiliate thereof, the execution, delivery and performance of this Agreement by Seller do not and
will not (i) violate or conflict with the Charter and Bylaws of Seller or ITI, (ii) conflict with or violate any Law or Governmental Order applicable to Seller or ITI,
(iii) result in any breach of, result in the imposition of any fees or penalties under, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become
a
default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Material Contract, (iv) result in the creation of any Encumbrance on (x) the
Shares or (y) the properties or assets of ITI or (v) result in the cancellation, modification, revocation or suspension of any license or permit held by ITI, except in any such case for
any violations, conflicts, breaches, defaults, cancellations, modifications, revocations, suspensions, or other matters which would not have a Material Adverse Effect. 

        Section 3.05    Consents and Approvals.    Except as set forth in Section 3.05 of the Disclosure
Schedule, the execution, delivery and performance of this Agreement by Seller do not and will not require any consent, approval, authorization or other action by, or filing with or notification to,
any Governmental Authority or any other Person, except (i) the notification requirements of the HSR Act and the requirements of any other applicable antitrust or merger control Laws,
(ii) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by Seller of the
transactions contemplated by this Agreement and would not have a Material Adverse Effect, and (iii) as may be necessary as a result of any facts or circumstances relating solely to Purchaser or
any of its Affiliates. 

        Section 3.06    Financial Information.    Set forth in Section 3.06 of the Disclosure Schedule is a true
and complete copy of the unaudited balance sheet of ITI as of June 28, 2002 (the "ITI Interim  

9

 

 Financial Statement") and the related unaudited statements of income and cash flows for the six months then ended, and the unaudited balance sheet of ITI at
December 31, 2001 and December 31, 2000 and the related statements of income and cash flows for ITI for each of the years then ended (collectively, the "ITI
Financial Statements"). The ITI Interim Financial Statement and the ITI Financial Statements (i) were prepared in accordance with the books of account and other
financial records of ITI and Seller, (ii) except as noted in Section 3.06 of the Disclosure Schedule, have been prepared in accordance with U.S. GAAP, (iii) are complete and
correct in all material respects and fairly present the financial position of ITI as of the respective dates thereof and the results of operations (and income or loss) and changes in cash flow for the
periods covered thereby, and (iv) can be legitimately reconciled with the financial statements and the financial records maintained and the accounting methods applied by ITI and Seller for
federal income tax purposes. 

        Section 3.07    Absence of Undisclosed Liabilities, Etc.    There are no liabilities or Indebtedness of ITI,
known or unknown, absolute or contingent, except (a) liabilities disclosed in Section 3.07 of the Disclosure Schedule and which, to the extent required by U.S. GAAP, will be reflected or
reserved against in the Closing Balance Sheet, (b) liabilities which will be reflected or reserved against in the Closing Balance Sheet, or (c) liabilities which individually or in the
aggregate would not have a Material Adverse Effect. Except as shown in the ITI Interim Financial Statement or on Section 3.07 of the Disclosure Schedule, ITI is not directly or indirectly
liable upon or with respect to (by discount, repurchase agreements or otherwise), or obliged in any other way to provide funds in respect of, or to guarantee or assume, any debt, obligation or
dividend of any Person, except endorsements in the ordinary course of business in connection with the deposit, in banks or other financial institutions, of items for collection. 

        Section 3.08    Absence of Certain Changes or Events.    Since December 31, 2001, the business of ITI
has been conducted in the ordinary course consistent with past practice and there has not been: (i) any change in the condition and repair of the assets of ITI such that such condition and
repair are inconsistent with the uses in which such assets are presently employed, ordinary wear and tear excepted; (ii) a failure to replenish inventories and supplies of ITI in the ordinary
course of business consistent with past practice; (iii) a purchase commitment by ITI inconsistent with past practice or in excess of the normal, ordinary and usual requirements; (iv) any
acquisition (by merger, consolidation or acquisition of stock or assets) by ITI of any Person or other business organization or division thereof; (v) any sale or transfer by ITI of any of its
assets, other than sales of inventory in the ordinary course of business consistent with past practice and sales of other assets not in excess of $25,000 and in the ordinary course of business,
(vi) any cancellation of any debt in excess of $50,000 owed to ITI or any claims of ITI or any waiver by ITI of any rights under any contract or agreement, (vii) any disposition or
license by ITI of any patents, trademarks or copyrights or any patent, trademark or copyright applications or waiver by ITI of any rights with respect thereto, (viii) any grant by ITI of an
increase in the compensation or benefits of its employees other than increases in accordance with past practice in an amount not exceeding 110% of the compensation paid to such employee in 2001 or
entry by ITI into any employment or severance agreement or arrangement with any of them, (ix) any capital expenditure by ITI in excess of $50,000, (x) any material loss, damage,
destruction or other casualty to or condemnation of the assets or properties of ITI (other than any for which insurance awards have been received or guaranteed), (xi) any loss of the
employment, services or benefits of any key employee of ITI, (xii) any incurrence by ITI of any material obligation or liability (whether absolute, accrued, contingent or otherwise) except in
the ordinary course of business consistent with past practice, (xiv) any Encumbrance placed upon any of ITI's assets, properties or rights, except Encumbrances for Taxes not yet due and payable
and Encumbrances arising in the ordinary course of business that do not, individually or in the aggregate, interfere with the use, operation, enjoyment or marketability of any of its assets,
properties or rights, (xv) a write down of the value of any inventory or write off as uncollectible of any of ITI's accounts receivable or any portion thereof not reflected in the ITI Interim
Financial Statement, (xvi) any discontinuation in the sale of any products or product line or program of 

10

 

ITI or (xvii) any event or occurrence which could reasonably be expected to have a Material Adverse Effect. 

        Section 3.09    Litigation.    Except as set forth in Section 3.09 of the Disclosure Schedule, as of the
date hereof and, solely with respect to the Specified Actions, as of the Closing Date, there are no Actions pending or, to the Knowledge of Seller, threatened against ITI. As of the date hereof, and,
solely with respect to the Specified Actions, as of the Closing Date, there are no Actions pending or, to the Knowledge of Seller, threatened against Seller or any of Seller's Affiliates other than
ITI or any of its Affiliates, including Centerpulse, involving, affecting or relating to ITI, the assets, properties or rights of ITI or the transactions contemplated by this Agreement or that could
otherwise give rise to any liability on the part of ITI nor is there any reasonable basis known to Seller for any such Action. ITI is not subject to any outstanding Governmental Order which negatively
affects in any material respect or might negatively affect in any material respect the business, assets, properties or rights of ITI. 

        Section 3.10    Compliance with Laws; Certain Regulatory Matters.    (a) The business of ITI is being
conducted in compliance with all Laws and Governmental Orders governing the manufacture, sale and distribution of medical products that are applicable to ITI (and the business of ITI is being
conducted in all material respects in compliance with all other Laws and Governmental Orders applicable thereto), and neither Seller nor ITI has received any notice to the effect that the business of
ITI is not in compliance
with any applicable Law. Notwithstanding the foregoing, the representations and warranties in this Section 3.10 do not apply to licenses and permits, environmental matters, intellectual
property rights, employee benefit matters and Taxes, which matters are covered exclusively in Section 3.11, Section 3.12, Section 3.13, Section 3.16 and
Section 3.17, respectively. 

        (b)  Neither
Seller nor ITI has received any notice from the FDA or any other federal, state or foreign regulatory agency questioning its manufacturing practices or
threatening to revoke or curtail any product clearance or approval, and neither Seller nor ITI is aware of any intent to deliver any such notice. Section 3.10(b) of the Disclosure Schedule
contains a complete list of all products currently being developed by ITI, with an indication of which products require the approval of, premarket notification to, or listing with, the FDA or any
other United States federal or state or foreign governmental agency or bureau under any existing law, regulation or policy, specifying the type of approval, premarket notification or listing required.
None of the products identified (or required to be identified) on Section 3.10(b) of the Disclosure Schedule has been the subject of any voluntary or involuntary recall or, to the Knowledge of
Seller, any governmental investigation other than routine inspections of ITI's facilities. All United States and international regulatory approvals or premarket notifications therefor are owned by and
registered in the name of ITI and are in full force and effect. All documentation, correspondence, reports, data, analyses and certifications relating to or regarding any medical devices of ITI, filed
with or delivered by or on behalf of ITI to any Governmental Authority were in all material respects true and accurate when so filed or delivered, and nothing has come to the attention of ITI or
Seller that would cause ITI or Seller to reasonably conclude that such documentation, correspondence, reports, data, analyses and certifications do not remain true and correct. 

        Section 3.11    Licenses and Permits.    ITI (i) currently holds all governmental licenses, permits and
authorizations (the "Licenses and Permits") necessary for the current use, occupancy and operation of its business, and is in compliance with all
material terms of such Licenses and Permits (other than such License or Permit the failure of which to obtain would not have a Material Adverse Effect, it being understood that any failure to obtain
any required License or Permit from any Medical Product Regulatory Authority shall be deemed to have caused a Material Adverse Effect), and (ii) has made all required filings with, or
notifications to, all Medical Product Regulatory Authorities pursuant to applicable requirements of all Laws applicable to ITI's business. Each such License and Permit has been duly obtained, is valid
and in full force and effect, and is not subject to any pending or, to the 

11

 

knowledge of Seller and ITI, threatened administrative or judicial proceeding to revoke, cancel, suspend or declare such License and Permit invalid in any respect. The consummation of the
transactions contemplated by this Agreement will not result in the termination or suspension of any License or Permit. Notwithstanding the foregoing, the representations and warranties in this
Section 3.11 do not apply to environmental matters, intellectual property rights, employee benefit matters and Taxes, which matters are covered exclusively in Section 3.12,
Section 3.13, Section 3.16 and Section 3.17, respectively. 

        Section 3.12    Environmental Matters.    (a) ITI: (i) is not in violation of, and has not
violated, any Environmental Law and has not received notice that any such violation exists, except for such violations that would not, when aggregated with other violations of Environmental Laws,
result in ITI incurring aggregate expenses in excess of $50,000 as a result of such violation; (ii) ITI has not placed, deposited
or released any Hazardous Substances upon or under any real property leased by ITI, except in compliance with Environmental Laws, except for such violations that would not, when aggregated with other
violations of Environmental Laws, result in ITI incurring aggregate expenses in excess of $50,000 as a result of such violation; (iii) ITI has no liability for environmental
clean-up, removal, remediation or damages and will have no liability for environmental clean-up, removal, remediation or damages relating to any act or omission that occurred
prior to the Closing Date or any circumstances that existed as of the Closing Date; and (iv) ITI has not received notice from any Governmental Authority (other than notices that have been fully
complied with or withdrawn) requiring the removal of any alleged Hazardous Substance, or advising of any pending or contemplated search or investigation of any real property owned or leased by or on
behalf of ITI. 

        (b)  ITI
has been issued, and will maintain until the date of the Closing, all required federal, state and local permits, licenses, certificates and approvals with respect to
its properties relating to (i) air emissions, (ii) discharges to surface water or groundwater, (iii) noise emissions, (iv) solid or liquid waste disposal, or (v) the
use, generation, storage, transportation or disposal of Hazardous Substances. 

        (c)  ITI
has not disposed of, transported or arranged for the disposal or transportation of any Hazardous Substance at or to any facility with respect to which ITI will be
liable for undertaking or paying for any environmental investigation or any other action to respond to the release or threatened release of any Hazardous Substance or will be required to pay natural
resource damages. Seller has provided Purchaser with copies of all (i) notices, demands, claims or actions pursuant to any Environmental Law, and (ii) reports, data or other
documentation in ITI's or Seller's possession or control related to all investigations, audits or assessments of environmental conditions at property owned, operated or leased by ITI and ITI's
compliance with Environmental Law. 

        Section 3.13    Intellectual Property Rights.    (a) Section 3.13(a) of the Disclosure Schedule
sets forth a list of: (i) all patents, patent applications, trademark applications and trademark registrations owned by ITI; (ii) all patents, patent applications, trademark applications
and trademark registrations licensed to ITI (the "Licensed Intellectual Property"); (iii) all licenses pursuant to which any Intellectual
Property of ITI is licensed or sublicensed to a third party; and (iv) any intellectual property rights owned, licensed or otherwise subject to control of ITI as of February 1, 2001 which
ITI has assigned, licensed or otherwise transferred to any Person other than ITI. 

        (b)  Except
as set forth on Schedule 3.13(b) of the Disclosure Schedule, the Owned Intellectual Property and the Licensed Intellectual Property constitute all of the
Intellectual Property that ITI has used in the conduct of its business since February 1, 2001, currently uses in the conduct of its business and is necessary to the continued operation of the
business of ITI in a manner consistent with the business of ITI as it is being operated on the date hereof, and to the Knowledge of Seller, the Owned Intellectual Property and the Licensed
Intellectual Property constitute all of the Intellectual Property necessary to the future conduct of the business as contemplated by Seller and ITI as presented by Seller and ITI to Purchaser. 

12

 

        (c)  Except
as would not have a Material Adverse Effect and except as set forth in Section 3.13 of the Disclosure Schedule: (i) neither Seller nor ITI has
received notice from any third party regarding any assertion or claim challenging the validity of any Intellectual Property used in ITI's business; (ii) neither Seller nor ITI has received
notice from any third party regarding any assertion or claim of any actual or potential infringement by ITI of any intellectual property rights of any third party; (iii) to the Knowledge of
Seller, no third party is engaging in any activity that infringes upon the Owned Intellectual Property or the Licensed Intellectual Property; and (iv) neither Seller nor ITI has received
written notice from any third party calling patents to the attention of Seller or ITI regarding any products of ITI. 

        (d)  All
of the Owned Intellectual Property is owned free and clear of any Encumbrance other than Permitted Encumbrances. To the Knowledge of Seller, there are no claims by
others adverse to such ownership, either in whole or in part, nor, to the Knowledge of Seller, is there any legitimate claim that could be raised in the future which challenges such ownership. 

        (e)  All
employees of ITI who develop Intellectual Property in connection with their employment with ITI have assigned all such Intellectual Property to ITI under valid and
enforceable assignment agreements. ITI has taken reasonable steps in accordance with normal industry practice to maintain the confidentiality of its trade secrets and other confidential Intellectual
Property. To the Knowledge of Seller, (i) no Person has misappropriated any material trade secrets or other material confidential Intellectual Property used by ITI; (ii) no employee,
independent contractor or agent of ITI has misappropriated any trade secrets of any other Person in the course of such performance as an employee, independent contractor or agent; and (iii) no
employee, independent contractor or agent of ITI is in material default or breach of any term of any employment agreement, non-disclosure agreement, assignment of invention agreement or
similar agreement or contract relating in any way to the protection, ownership, development, use or transfer of Intellectual Property that is used by ITI. 

        (f)    The
consummation of the transactions contemplated by this Agreement will not prohibit ITI from using any of the Owned Intellectual Property or Licensed Intellectual
Property in a manner substantially similar to its current use by ITI in its business. In each case in which ITI has acquired from any person ownership of any Intellectual Property rights, except as to
rights under which ITI has been granted a license, ITI has obtained a valid and enforceable assignment which is sufficient to irrevocably transfer all rights in such Intellectual Property to ITI, and
ITI has recorded each such assignment with the relevant Governmental Authorities and patent offices. 

        Section 3.14    Material Contracts.    (a) Section 3.14 of the Disclosure Schedule lists the
following contracts, commitments and agreements to which ITI is a party or which constitutes part of the property or assets of ITI as of the date of this Agreement (the "Material Contracts"): 

        (i)    any
contract or agreement (excluding routine checking account overdraft agreements involving petty cash amounts) under which ITI has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee) Indebtedness in excess of $100,000 to Persons or under which Seller or any of its
Affiliates has granted a security interest or lien on any of the properties or assets of ITI, whether tangible or intangible, to secure such Indebtedness; 

        (ii)  any
lease of personal property to which ITI is a party or which constitutes property or an asset of ITI involving an annual expense in excess of $100,000 that is not
cancelable within 90 calendar days; 

        (iii)  any
contract or agreement containing covenants limiting ITI's freedom to engage in any line of business or to compete with any Person; 

        (iv)  all
active contracts and agreements providing for Clinical Application Research Studies or research and development agreements; 

13

 

        (v)  any
contract or agreement granting to any Person any right to market, distribute or resell any product of ITI, or to represent ITI's business with respect to any such
product, or act as agent for ITI in connection with the marketing, distribution or sale of any product of ITI's business, that, in any case, is not cancelable within 90 calendar days without ITI being
obligated to pay any penalties or other fees upon a cancellation; 

        (vi)  any
contract or agreement between ITI and Seller or any of its Affiliates, (other than contracts and agreements relating to intercompany debt which will be paid off
prior to the Closing); 

        (vii) any
contract or agreement establishing any joint venture, strategic alliance or other collaboration that is material to ITI's business; 

        (viii)  any
lease of real property to which ITI is a party; 

        (ix)  any
contract or agreement for the purchase or sale by ITI of products or services that, by its terms, calls for the payment or receipt by ITI of an amount in excess of
$100,000 during 2002 or in excess of $200,000 over the term of such contract or agreement or under which ITI has actually paid or received in 2002 an amount in excess of $100,000, with an indication
of which of such contracts or agreements is not cancelable within 90 calendar days without ITI being obligated to pay any penalties or other fees upon a cancellation; 

        (x)  any
sole source supply contract for the purchase of a raw material or a component that is otherwise not generally available and that is used in the manufacture of any of
ITI's products, which products during the fiscal year ended December 31, 2001 had sales in excess of $100,000; 

        (xi)  all
contracts or agreements with any present or former officer, employee or consultant of ITI pursuant to which such officer, employee or consultant is currently
entitled or expected to receive compensation or any other benefit; 

        (xii)   all
collective bargaining or other labor or union contracts or agreements, if any; and 

        (xiii)  any
other agreement, whether or not made in the ordinary course of business, which is material to ITI or the conduct of its business, or the absence of
which could have a Material Adverse Effect. 

        (b)  ITI
is not, and to the Knowledge of Seller the other party(ies) thereto are not, in material breach or material violation of, or material default under, any of the
Material Contracts. Each Material Contract is a valid agreement, arrangement or commitment of ITI enforceable against ITI in accordance with its terms and, assuming due authorization, execution and
delivery by the other party(ies) thereto, is, and will not, as a result of the transactions contemplated hereby, cease to be, a valid agreement, arrangement or commitment of each other party thereto,
enforceable in all material respects against each such party in accordance with its terms, subject to general equitable principles and except as enforceability of any Material Contract may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to creditor's rights. Seller has made available to Purchaser true and complete
copies of all Material Contracts. 

        Section 3.15    Property.    ITI does not own any real property. Set forth in Section 3.15 of the
Disclosure Schedule is a complete list of all real property leased by ITI ("Leased Real Property"). ITI has a valid leasehold interest in all Leased
Real Property, free and clear of all Encumbrances other than Permitted Encumbrances. All Leased Real Property is in good condition and repair, ordinary wear and tear excepted, and is useable in the
ordinary course of business consistent with past practice. ITI has not sold, assigned or transferred all or any part of its leasehold interests in the Leased Real Property. Neither ITI nor Seller has
received any notice from any utility company or municipality of any fact or condition which could result in the discontinuation of presently available or otherwise necessary sewer, water, electric,
gas, telephone or other utilities or services for any of the Leased Real 

14

 

Property. The Leased Real Property, all improvements thereon and thereto, and the operations therein conducted conform to all applicable health, fire, insurance, environmental, safety, zoning and
building laws, ordinances and administrative regulations, permits and other regulations (including, without limitation, the Americans with Disabilities Act) except for possible nonconforming uses or
violations as would not have a Material Adverse Effect and neither Seller nor ITI has received any notice to the contrary. Except as set forth in Section 3.15 of the Disclosure Schedule, each
Leased Real Property is
occupied and used by ITI pursuant to and in conformity with a validly issued certificate of occupancy which currently remains in effect. 

        Section 3.16    Benefit Plans and Employee Arrangements.    

        (a)  Set
forth in Section 3.16 of the Disclosure Schedule is a list of: 

        (i)    each
"employee benefit plan" (as defined in Section 3(3) of ERISA) for which ITI sponsors, maintains, contributes to, is required to contribute to or has or could
have any liability of any nature, whether known or unknown, direct or indirect, fixed or contingent, or otherwise ("Benefit Plans"); and 

        (ii)  each
bonus plan, incentive plan, stock plan or any other current or deferred compensation (other than current salary or wages paid in the form of cash), separation,
retention, severance, change-in-control, paid time off or similar agreement, arrangement or policy, or any individual employment, consulting or personal service agreement
(other than a Benefit Plan) established, maintained or contributed to by ITI or under which ITI is a party or ITI currently has or could have any obligation or any liability of any nature, whether
known or unknown, direct or indirect, fixed or contingent or otherwise ("Employee Arrangements"). 

        (b)  With
respect to each Benefit Plan and Employee Arrangement, Seller has delivered to Purchaser true and complete copies of the following, if applicable: (i) the
most recent summary plan description for each Benefit Plan for which a summary plan description is required (including any summary of material modifications or any summaries communicated to
participants), currently in effect with respect to each Benefit Plan or Employee Arrangement, (ii) such Benefit Plan or Employee Arrangement, and each trust agreement or other agreements or
contracts evidencing any funding vehicle with respect to any Benefit Plan or Employee Arrangement; (iii) the three most recent annual reports (Form 5500) filed with the IRS; and
(iv) the most recent determination letter issued by the IRS with respect to any Benefit Plan intended to be qualified under Section 401(a) of the Code. 

        (c)  Each
Benefit Plan and Employee Arrangement has been operated and administered in compliance with its terms, ERISA, the Code and any other applicable Law. All
contributions and all payments required to have been made under any Benefit Plan or Employee Arrangement have been timely and properly made. ITI has made adequate provisions for reserves or accruals
in accordance with generally accepted accounting principles to meet contribution, benefit or funding obligations arising under applicable law or the terms of any Benefit Plan or Employee Arrangement
or related agreement. There will be no change on or before Closing Date to the terms of any Benefit Plan or Employee Arrangement or any documents with respect thereto which will result in an increase
in the benefit liabilities of ITI under such Benefit Plan or Employee Arrangement, except as may be required by law. 

        (d)  Each
Benefit Plan that is operated as a plan that is qualified under the provisions of Section 401(a) of the Code satisfies in form and operation all applicable
qualification requirements, except as would not have a Material Adverse Effect. 

        (e)  ITI
does not have any liability or obligation, whether known or unknown, direct or indirect, fixed or contingent or otherwise, with respect to (i) any
"multiemployer plan" described in Sections 3(37) or 4001(a)(3) of ERISA; (ii) any defined benefit plan described in Section 3(35) of ERISA; or (iii) any pension plan subject to
the requirements of Title IV of the ERISA or Section 412 of the 

15

 

Code, in each case with respect to any such plan that is or has been maintained, contributed to or sponsored by ITI, the Seller or any Affiliated Organization. 

        (f)    ITI
does not maintain, contribute to or has or could have any liability of any nature, whether known or unknown, direct or indirect, fixed or contingent, or otherwise,
to provide medical, health, life or other welfare benefits for present or future terminated employees or their spouses or dependents, other than as required by Part 6 of Subtitle B of Title I
of ERISA or any comparable state law. 

        (g)  There
are no facts or circumstances which could, directly or indirectly, subject ITI to any (i) excise tax or other liability under Chapters 43, 46 or 47 of the
Code, (ii) penalty, tax or other liability under Chapter 68 of Subtitle F of the Code or (iii) any civil penalty, damages or other liabilities arising under Section 502 of ERISA. 

        (h)  There
are no pending or, to the Knowledge of the Seller, threatened audits, investigations, claims, suits, grievances or other proceedings and there are no facts that
could give rise thereto, involving, directly or indirectly, any Benefit Plan or Employee Arrangement, or any rights or benefits thereunder, other than the ordinary and usual claims for benefits by
participants, dependents or beneficiaries. 

        (i)    Except
to the extent disclosed in Section 3.16(i) of the Disclosure Schedule, the transactions contemplated herein do not result in any payment (whether of
severance pay or otherwise), forgiveness of debt, distribution, increase in benefits, obligation to fund, or the acceleration of accrual, vesting, funding or payment of any contribution or benefit
under any Benefit Plan or Employee Arrangement. 

        (j)    Except
to the extent specifically disclosed in Section 3.16(j) of the Disclosure Schedule, no amount that could be received (whether in cash or property or the
vesting of property) as a result of any of the transactions contemplated by this Agreement by any employee, officer, or director of ITI who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any Benefit Plan or Employee Arrangement currently in effect would be an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code). 

        Section 3.17    Taxes.    (a) (i) ITI or Seller has timely filed or will have timely filed Tax
Returns relating to ITI for any taxable period ending on or before the Closing Date, taking into account any extension of time to file granted thereto; (ii) with respect to
non-Income Taxes, except for such Taxes for which provision has been made on the Closing Balance Sheet, all such Taxes relating to ITI for all taxable periods or portions thereof ending on
or before the Closing Date (whether or not shown to be payable on such Tax Returns) have been or will be paid, and (iii) except for Taxes for which provision has been made on the Closing
Balance Sheet, all Taxes relating to ITI required to be paid on or before the Closing Date (whether or not shown to be payable on such Tax Returns) have been or will be paid. 

        (b)  (i)
There is no claim or assessment pending against ITI or Seller for any alleged deficiency in Taxes relating to ITI or for Taxes for which ITI may be held liable
(including under Treasury Regulation § 1.1502-6 or analogous state or foreign provisions), and Seller has not been notified in writing of any audit or investigation with
respect to any liability for Taxes for which ITI may be liable; and (ii) there are no agreements in effect to extend the period of limitations for the assessment or collection of any Tax
relating to ITI. 

        (c)  Except
as described in Section 5.14, there are no liens for Taxes (other than for current Taxes not yet due and payable) on any assets of ITI. 

16

   
        (d)  ITI has withheld and paid all Taxes required to have been withheld and paid (including, without limitation, withholding of Taxes under Sections 1441 and 1442 of the
Code) in connection with amounts paid or owing to any employee, foreign person, creditor or independent contractor and has not failed to treat as "employees" any individual providing services to ITI
who would be classified as an "employee" under the applicable rules and regulations of any Taxing Authority with respect to such classification. 

        (e)  ITI
(i) has not agreed to make, nor is ITI required to make, any adjustment under Section 481 of the Code by reason of a change in accounting method and
(ii) is not a "consenting corporation" within the meaning of Section 341(f)(1) of the Code. 

        (f)    ITI
is not involved in, subject to, or a party to any joint venture, partnership, contract or other arrangement that is treated as a "partnership" for federal, state,
local or foreign income Tax purposes. 

        (g)  ITI
has not made any payments, is not obligated to make any payments, or is not a party to any contract that requires it to make or give rise to any payments that are
not deductible as a result of the provisions set forth in Section 280G of the Code or the Treasury Regulations thereunder or that would result in an excise tax to the recipient of any such
payment under Section 4999 of the Code. 

        (h)  ITI
is not nor has it ever been a United States real property holding corporation within the meaning of Section 897(c)(1)(A)(ii) of the Code. Seller is a
"United States person" within the meaning of Code Section 7701(a)(30). 

        (i)    ITI
is not a party to or bound by any obligations under any tax sharing, tax allocation, tax indemnity or similar agreement or arrangement. ITI has never been either a
"distributing" or "controlled" corporation (as such terms are defined in Section 355(a)(1) of the Code) in a transaction structured to qualify as a tax-free distribution under
Section 355 of the Code. 

        (j)    No
claim, notice or inquiry has been made in writing by any Tax Authority in a jurisdiction where ITI, or any Person on its behalf, does not currently file a Tax
Return that it may be subject to Tax by such jurisdiction. 

        (k)  No
property of ITI is "tax-exempt use property" within the meaning of Section 168(h) of the Code. 

        (l)    ITI
is not party to any lease made pursuant to former Section 168(f)(8) of the Internal Revenue Code of 1954; 

        Section 3.18    Brokers.    Except for Lehman Brothers
("Lehman"), no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Seller or ITI. Seller is solely responsible for the fees and expenses of Lehman. 

        Section 3.19    Insurance.    

        (a)  Section 3.19
of the Disclosure Schedule lists the fidelity bonds and the aggregate coverage amount and type and generally applicable deductibles of all policies
of title, liability, fire, casualty, business interruption, workers' compensation and other forms of insurance insuring ITI and its assets, properties and operations. Seller has furnished to Purchaser
a true, complete and accurate copy of all such policies and bonds. All such policies and bonds are in full force and effect, underwritten by financially sound and reputable insurers, and are
sufficient for all applicable requirements of law and will continue in full force and effect through the Closing and the consummation of the transactions contemplated hereby shall not give rise to any
right of any insurer under such policies and bonds to deny coverage thereunder. Neither ITI nor any of its Affiliates, including Seller and Centerpulse, is in default under any provisions of any such
policy of insurance nor has ITI or any of its Affiliates, including Seller and Centerpulse, received notice of cancellation of any such insurance. There is no 

17

 

claim by ITI pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. 

        (b)  ITI
presently has commercial general liability insurance coverage, which includes products liability insurance coverage, which is presently in full force and effect as
to each policy period from the time ITI was formed as an entity up through and including the Closing Date. ITI's commercial general liability insurance coverage consists of written insurance policies
underwritten by insurers who are, as of the date hereof, financially sound and reputable, with each such policy having an annual aggregate limit of at least $5 million and each such policy
will, by its terms and without further premiums being paid, provide for such coverage for all times after the Closing. No specific policy with respect ITI's commercial general liability insurance
coverage has any claim against it, except as otherwise disclosed on Section 3.19(b) of the Disclosure Schedule. Seller has delivered, or will deliver no later than five (5) business days
after the date hereof, to Purchaser all insurance policies under which ITI is a named insured or is otherwise an insured, even if Seller is likewise an insured under any such policy and ITI is not a
specifically named insured. Seller has not taken and will not take any action at any point in time, including after the Closing Date, to alter, impede or otherwise modify ITI's status as an insured
with
respect to any insurance policies presently in effect; provided, however, that Seller may take actions which may cause ITI not to accrue additional
rights under insurance policies after the Closing Date. With respect to the commercial general liability policies presently covering ITI, Seller is not aware of any facts, circumstances, insurance
policy provision, or insurance policy condition (1) that would prevent ITI from continuing to be an insured presently and up through, including and after the Closing Date or (2) that
would otherwise alter ITI's status as an insured under any insurance policies presently in effect. 

        Section 3.20    Transactions with Directors, Officers and Affiliates.    Except as set forth in
Section 3.20 of the Disclosure Schedule, ITI is not a party to any agreement or arrangement with any of the directors, officers or shareholders of ITI or any of its Affiliates or any family
member of any of the foregoing under which it: (i) leases any real or personal property (either to or from such Person), (ii) licenses technology (either to or from such Person),
(iii) is obligated to purchase any tangible or intangible asset from or sell such asset to such Person, (iv) purchases products or services from such Person, (v) pays or receives
commissions, rebates or other payments from such Person or (vi) provides or receives any other material benefit, other than the payment of salaries and provision of employee benefits in
connection with the employment or engagement of such individuals. ITI does not employ as an employee or engage as a consultant any family member of any of the directors, officers or shareholders of
ITI or any of its Affiliates. Except as a shareholder of ITI, no Affiliate of ITI owns or has any rights in or to any of the assets, properties or rights used by ITI in the ordinary course of its
business. 

        Section 3.21    Change in Ownership.    To the Knowledge of Seller, the consummation of the transactions
contemplated by this Agreement will not result in any material adverse change in the business of ITI or in the loss of the benefits of any material relationship with any supplier. 

        Section 3.22    Labor Matters.    

        (a)  ITI
is not a party to any collective bargaining agreement or other labor union contract applicable to employees of ITI nor does ITI or Seller know of any activities and
proceedings of any labor union to organize any such employees. 

        (b)  (i)
ITI is in compliance with all applicable Laws relating to employment and employment practices, wages, hours, and terms and conditions of employment, except for such
violations that would not, when aggregated with other violations of such Laws, result in ITI incurring aggregate expenses in excess of $50,000 as a result of such violation; (ii) there is no
unfair labor practice charge or complaint pending before the National Labor Relations Board ("NLRB") relating to ITI; (iii) there is no labor
strike, material slowdown or material work stoppage or lockout pending or, to the Knowledge of Seller, 

18

 

threatened against or affecting ITI, and ITI has not experienced any strike, material slowdown or material work stoppage, lockout or other collective labor action by or with respect to employees of
ITI since January 1, 1999; (iv) there is no representation claim or petition pending before the NLRB or any similar foreign agency and no question concerning representation exists
relating to the employees of ITI; (v) there are no charges with respect to or relating to ITI pending before the Equal Employment
Opportunity Commission or any state, local or foreign agency responsible for the prevention of unlawful employment practices; (vi) neither ITI nor Seller has received notice from any national,
state, local or foreign agency responsible for the enforcement of labor or employment laws of an intention to conduct an investigation of ITI and no such investigation is in progress and
(vii) there are no controversies pending, or to the Knowledge of Seller, threatened, between ITI and any of its employees or former employees, which controversies could have a Material Adverse
Effect. 

        (c)  Attached
to Section 3.22 of the Disclosure Schedule is a complete and accurate list of the name, position, starting employment date, current annual salary and
bonus and commissions earned through July 31, 2002 of each current employee of ITI. 

        Section 3.23    Assets of ITI.    

        (a)  Except
as set forth in Section 3.23 of the Disclosure Schedule, the assets, properties and rights of ITI constitute all of the assets and rights which are used in
the operations of ITI and which are reasonably necessary or required for the conduct of the business of ITI as currently conducted or presently proposed to be conducted. There are no defects in such
assets or other conditions relating to such assets which materially and adversely affect the operation or value of such assets. All of the material tangible assets owned by ITI are in good condition
and repair, ordinary wear and tear excepted, and are useable in the ordinary course of business consistent with past practice. There are no material assets, properties, rights or interests of any kind
or nature that ITI has been using, holding or operating in its business or that was reflected in the ITI Interim Financial Statement that will not be used, held or owned by ITI immediately following
the Closing. 

        (b)  ITI
has good and marketable title, free and clear of any Encumbrances (other than Permitted Encumbrances) or a valid leasehold interest under enforceable leases in, all
of the assets, properties and rights of ITI. 

        Section 3.24    Inventories.    

        (a)  All
inventories, including without limitation costs incurred in connection with raw materials, work-in-process and finished goods, reflected in
the ITI Interim Financial Statement are valued at the lower of cost or market. Except to the extent reflected in a reserve on the Closing Balance Sheet, all inventory of ITI (the
"Inventory"): (i) is of a quality and quantity usable in the ordinary course of the business of ITI, and the present quantities of Inventory of
ITI are reasonable in light of ITI's historical operations; and (ii) with respect to Inventory which is finished goods Inventory ready for shipment, the delivery and sale of such finished goods
Inventory will meet in the aggregate the stricter of industry or ITI's specifications applicable to such Inventory. 

        (b)  The
Inventory of ITI which consists of work-in-process is being completed on schedule and there are no forfeitures, chargebacks or penalties
which have been or will be incurred due to the failure of ITI to complete the work-in-process in a timely manner. 

        Section 3.25    Receivables and Payables.    

        (a)  ITI
has good right, title and interest in and to all its accounts and notes receivable and trade notes and trade accounts reflected in the ITI Interim Financial
Statement and those acquired and generated since the date of the ITI Interim Financial Statement (except for those paid since the date of the ITI Interim Financial Statement), except for Permitted
Encumbrances. All of such accounts and notes receivable, trade notes and trade accounts constitute valid and enforceable claims of ITI arising 

19

 

from bona fide transactions in the ordinary course of business, and as of the date hereof there are no claims, refusals to pay or other rights of set-off against any thereof, and as of
the date hereof none of such accounts and notes receivable, trade notes and trade accounts are more than ninety (90) days past due; provided,  however,
that to the extent this representation is not true as of the Closing Date appropriate reserves will be made on the books and records of ITI to
the extent consistent with the past practices of ITI in effect since January 1, 2002. 

        (b)  All
accounts payable and notes payable by ITI arose in connection with bona fide transactions in the ordinary course of business and no such account payable or note
payable is delinquent by more than ninety (90) days in its payment. 

        Section 3.26    Products and Warranties.    (a) Except for obligations to repair or replace any product
pursuant to express written warranties given by ITI in the ordinary course of business and the forms of which are attached to Section 3.26 of the Disclosure Schedule and except for warranties
from third party manufacturers which are passed through to customers and for which ITI could not have any liability and except to the extent of any reserves therefor that will be included in the
Closing Balance Sheet: (i) each product or service sold, leased, delivered or rendered by ITI prior to the Closing Date, was at the time of sale or service, as applicable, in conformity in all
material respects with all applicable contractual commitments and all applicable express and implied by Law warranties, and meets or exceeds in all material respects the standards required by all Laws
and (ii) no product or service sold, leased, delivered or rendered by ITI on or prior to the Closing Date is subject to any guaranty, warranty, or other indemnity beyond the applicable standard
terms and conditions of sale or lease or service and any express warranties attached to Section 3.26 of the Disclosure Schedule. 

        (b)  Other
than warranty claims for which reserves will be included in the Closing Balance Sheet in amounts which are adequate to cover all future warranty expenses and
liability for any product sold by ITI prior to the Closing Date or service previously provided by ITI prior to the Closing Date, ITI could not have any liability for any such products or services
including without limitation any liability or obligation arising out of any injury to individuals or property as a result of the ownership, possession, or use of any product sold, leased, or delivered
or service provided by ITI. 

        Section 3.27    Illegal or Unauthorized Payments; Political Contributions.    Neither ITI nor, to the Knowledge
of Seller, any of the officers, directors, employees, agents or other representatives of ITI has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or
services, whether or not in contravention of applicable law, (a) as a kickback or bribe to any Person or (b) to any political organization, or the holder of or any aspirant to any
elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of ITI. 

        Section 3.28    Estimates, Projections and Forecasts.    All estimates, projections and other forecasts, plans
and budget information that has been previously provided to Purchaser or its representatives by Seller or its representatives were prepared in good faith and all of such estimates, projections and
other forecasts, plans and budget information continue to represent Seller's good faith belief as to the matters covered thereby. 

        Section 3.29    No Implied Representations and Warranties.    Neither Seller nor ITI is making any
representation or warranty whatsoever, express or implied, except those representations and warranties of Seller or ITI explicitly set forth in this Agreement or any certificate contemplated hereby
and delivered to Purchaser in connection herewith. 

20

 

ARTICLE IV  

REPRESENTATIONS AND WARRANTIES OF PURCHASER 

        Purchaser
hereby represents and warrants to Seller that: 

        Section 4.01    Incorporation and Authority of Purchaser.    Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of incorporation and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Purchaser of this Agreement, the performance by Purchaser of its obligations hereunder and the
consummation by Purchaser of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Purchaser. This Agreement has been duly executed and
delivered by Purchaser, and (assuming due authorization, execution and delivery by Seller and Centerpulse) this Agreement constitutes a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject to general equitable principles and except as enforceability of this Agreement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general application relating to creditor's rights. 

        Section 4.02    No Conflict.    Assuming that all consents, approvals, authorizations and other actions
described in Section 4.03 have been obtained and all filings and notifications described in Section 4.03 have been made, and except as may result from any facts or circumstances relating
solely to Seller or ITI, the execution, delivery and performance by Purchaser of this Agreement do not and will not (i) violate or conflict with the Charter or Bylaws of Purchaser,
(ii) conflict with or violate any Law or Governmental Order applicable to Purchaser or (iii) result in any breach of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which Purchaser or any of its subsidiaries is a party or by which any of their assets or properties is bound, except in any such
case for any violations, conflicts, breaches, defaults or other matters that would not prevent or materially delay the consummation by Purchaser of the transactions contemplated hereby. 

        Section 4.03    Consents and Approvals.    The execution, delivery and performance by Purchaser of this
Agreement do not and will not require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority, except (i) the notification
requirements of the HSR Act and the requirements of any applicable non-United States antitrust or merger control Laws, (ii) where failure to obtain such consent, approval,
authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by Purchaser of the transactions contemplated by this Agreement and
(iii) as may be necessary as a result of any facts or circumstances relating solely to Seller or ITI. 

        Section 4.04    Litigation.    There are no Actions pending or, to the knowledge of Purchaser, threatened
against Purchaser that are reasonably likely to prevent or materially delay the consummation by Purchaser of the transactions contemplated by this Agreement. 

        Section 4.05    Investment Purpose.    Purchaser is acquiring the Shares solely for the purpose of investment
and not with a view to, or for offer or sale in connection with, any distribution thereof. 

        Section 4.06    Financing.    Purchaser, as of the Closing Date, will have sufficient funds to consummate the
transactions contemplated hereby, including, without limitation, payment of the Purchase Price. 

        Section 4.07    Brokers.    No broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser. 

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ARTICLE V  

ADDITIONAL AGREEMENTS 

        Section 5.01    Conduct of Business Prior to the Closing.    Seller covenants and agrees that, between the date
of this Agreement and the Closing Date, except as set forth in Section 5.01 of the Disclosure Schedule or as contemplated by any other provision of this Agreement, unless Purchaser shall
otherwise agree in writing: 

        (a)  Seller
shall cause ITI to conduct its business in the ordinary course in a manner substantially consistent with past practice and to use all reasonable efforts to
preserve its business substantially intact and to preserve ITI's current relationships with its customers, suppliers and other Persons with which it has significant business relationships;  provided,
however, that no action by ITI with respect to matters specifically addressed by any provision
of Section 5.01(b) shall be deemed a breach of this Section 5.01(a) unless such action would constitute a breach of any such provision of Section 5.01(b); 

        (b)  Seller
shall not cause, and shall not permit, ITI to: 

          (i)  amend
ITI's Charter or Bylaws or permit ITI to merge or consolidate, or obligate itself to do so, with or into any other entity; 

        (ii)  issue
or sell any shares of capital stock of, or other equity interests in ITI or securities convertible into or exchangeable for such shares or equity interests or
permit the sale or transfer of any of ITI's property or assets, except for sales of inventory in the ordinary course of business consistent in all material respects with past practice and sales of
other assets not in excess of $25,000 in the aggregate; 

        (iii)  declare,
set aside, make or pay any dividend or other distribution, payable in stock, property or otherwise (other than in cash), with respect to any capital stock of
ITI; 

        (iv)  establish
or increase any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the
granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan for the benefit of any employee of ITI, or otherwise
increase the compensation payable or to become payable to any officers of ITI or key ITI employees, except as may be required by Law or by existing contractual arrangements;  provided, however, that any such establishment or increase that
will not, when aggregated with all other such establishments or increases that occur after the date hereof and before the Closing, result in ITI or Purchaser incurring expenses in excess of $50,000
shall be permitted; 

        (v)  enter
into any employment or severance agreement with any ITI employees, adopt or enter into any collective bargaining agreement covering ITI employees, except as may be
required by Law or by a Material Contract; 

        (vi)  acquire
(including, without limitation, by merger, consolidation or acquisition of stock or assets) any corporation, partnership, limited liability company or other
entity; 

      (vii)  assume,
guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except in the
ordinary course of business consistent in all material respects with past practice in an amount of less than $50,000; 

      (viii)  make
a purchase commitment inconsistent with past practice or in excess of the normal, ordinary and usual requirements and in any event greater than $50,000 in the
aggregate, except that ITI may submit any change purchase orders to EuroFlex Schuessler 

22

 

GmbH, provided that such orders do not increase the aggregate amount due to EuroFlex Schuessler GmbH as of the date hereof; 

        (ix)  make
any change in any method of accounting or accounting practice or policy used by ITI other than changes that are required by U.S. GAAP; 

        (x)  incur
any Indebtedness in excess of $50,000 in the aggregate; 

        (xi)  enter
into any transaction other than in the ordinary course of business consistent with past practice; 

      (xii)  fail
to keep in full force and effect insurance comparable in amount and scope to coverage maintained on the date hereof; 

      (xiii)  make,
change or revoke any election or method of accounting with respect to Taxes directly relating to ITI; 

      (xiv)  enter
into any closing or other agreement or settlement to which ITI is a party; 

      (xv)  enter
into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(b); 

      (xvi)  subject
any of the assets, properties or rights of ITI, or any part thereof, to any Encumbrance or suffer such to exist, other than such Encumbrance as may arise in
the ordinary course of business consistent with past practice or any Encumbrance which is discharged at or prior to Closing; 

    (xvii)  make
or commit to make any capital expenditure in excess of $50,000; 

    (xviii)  settle,
release or forgive any claim or litigation involving, affecting or relating to ITI, the assets, properties or rights of ITI or the transactions contemplated
by this Agreement or waive any right related thereto, other than any forgiveness or settlement of any trade claims not in excess of $25,000 and so long as ITI is not required to make any admission of
liability; 

      (xix)  make,
enter into, modify in any material respect, amend in any material respect or terminate any Material Contract; 

      (xx)  acquire
any assets, raw materials or properties, or enter into any other transaction, other than in the ordinary course of business consistent with past practice; or 

      (xxi)  take
any other action that would cause any of the representations and warranties made by Seller in this Agreement not to remain true and correct. 

        Section 5.02    Investigation; Confidentiality.    (a) Without in any way limiting or qualifying the
representations, warranties and covenants made by Seller herein, Purchaser acknowledges and agrees that it (i) has made its own inquiry and investigation into, and based thereon has formed an
independent judgment concerning, ITI and (ii) has had independent legal, financial and technical advice relating to ITI and the terms of this Agreement and the documents to be executed pursuant
hereto. 

        (b)  The
terms of the letter agreement dated as of June 21, 2002 (the "Confidentiality Agreement") between Lehman, as
agent for Seller, and Purchaser are incorporated by reference herein and shall continue in full force and effect until the Closing, at which time the Confidentiality Agreement and the obligations of
Purchaser thereunder shall terminate; provided, however, that the Confidentiality Agreement shall not
terminate with respect to that portion of the Evaluation Material (as defined in the Confidentiality Agreement) that is described on Exhibit 5.02(b) hereto. If this Agreement, is, for any
reason, terminated prior to the Closing Date, the Confidentiality Agreement shall continue in full force and effect thereafter in accordance with its terms. 

23

 

        (c)  Following
the Closing, Seller agrees to, and will cause its agents, representatives, Affiliates, employees, officers and directors to, (i) treat and hold as
confidential (and not disclose or provide access to any Person), in a manner consistent with its practices prior to the date hereof, all information concerning ITI that was previously treated by
Seller and its Affiliates as confidential, (ii) in the event that Seller or any such agent, representative, Affiliate, employee, officer or director becomes compelled by Law (including any
requirement of the New York Stock Exchange or the Swiss Exchange) to disclose any such information, provide Purchaser with prompt written notice of such requirement so that Purchaser may seek a
protective order or other remedy or waive compliance with this Section 5.02(b), and (iii) in the event that such protective order or other remedy is not obtained or is not available, or
Purchaser waives compliance with this Section 5.02(b), furnish only that portion of such confidential information that is legally required to be provided and use all reasonable efforts to
obtain assurances that confidential treatment will be accorded such information; provided, however, that
this sentence shall not apply to any information that, at the time of disclosure, is available publicly and was not disclosed in breach of this Section 5.02(b) by Seller, its agents,
representatives, Affiliates, employees, officers or directors. 

        Section 5.03    Access to Information.    (a) From the date hereof until the Closing Date, upon
reasonable notice, Seller shall, and shall cause ITI and each of their respective officers, directors, employees, auditors and agents to, (i) afford the officers, employees and authorized
agents and representatives of Purchaser reasonable access, during normal business hours, to the offices, properties, books and records of ITI; and (ii) furnish to the officers, employees and
authorized agents and representatives of Purchaser such additional financial and operating data and other information regarding ITI as Purchaser may from time to time reasonably request;  provided, however, that such investigation shall not unreasonably interfere with any of the businesses or operations of Seller or any of its Affiliates. 

        (b)  In
order to facilitate the resolution of any claims made by or against or incurred by Seller or any Affiliate or for which Seller or any of its Affiliates remains liable
other than any claims made by Purchaser or ITI or claims made against Purchaser or ITI by Seller or its Affiliates and in order to exchange information pursuant to Section 7.05, Purchaser shall
after the Closing Date, upon reasonable notice, (i) afford the officers, employees and authorized agents and representatives of Seller reasonable access, during normal business hours, to the
offices, properties, books and records of Purchaser concerning ITI; (ii) furnish to the officers, employees and authorized agents and representatives of Seller such additional financial and
other information regarding ITI as Seller or such officers, employees and authorized agents and representatives may from time to time reasonably request; and (iii) make available to Seller the
employees of Purchaser in respect of ITI whose assistance, testimony
or presence is necessary to assist Seller in evaluating any such claims and in defending such claims, including the presence of such persons as witnesses in hearings or trials for such purposes;  provided,
however, that such investigation shall not unreasonably interfere with the business or operations of Purchaser or any of its Affiliates.
 

        (c)  Notwithstanding
the foregoing, Seller shall not be required, prior to the Closing Date, to disclose, or cause the disclosure of, to the officers, employees or authorized
agents or representatives of Purchaser (or provide access to any offices, properties, books or records of Seller or any of its Affiliates that could result in the disclosure to such persons or others
of) any confidential information relating to pricing and marketing plans, to the extent that Seller reasonably believes on the basis of consultation with legal counsel that disclosure of such
information would create a significant risk of a violation of any antitrust or competition Law, nor shall Seller be required to permit or cause others to permit the officers, employees or authorized
agents or representatives of Purchaser to copy or remove from the offices or properties of Seller or any of its Affiliates any documents, drawings or other materials that might reveal any such
confidential information. 

24

   
        Section 5.04    Books and Records.    (a) Except as otherwise provided in Article VII, Purchaser
agrees that it shall preserve and keep all books and records in respect of ITI in Purchaser's possession for a period of at least six years from the Closing Date. 

        (b)  If,
in order properly to prepare documents required to be filed with Governmental Authorities or its financial statements or required under any applicable Law, it is
necessary that either party hereto (or any of their respective Affiliates) or any successors be furnished with additional information relating to ITI and such information is in the possession of the
other party hereto or any of its Affiliates, such party agrees to use its commercially reasonable efforts to furnish such information to such other party as soon as reasonably practicable, at the cost
and expense of the party being furnished such information. 

        Section 5.05    Satisfaction of Conditions Precedent; Regulatory and Other Authorizations; Notices and
Consents.    (a) Seller and Purchaser shall use all reasonable efforts to cause the satisfaction of the conditions precedent contained in Article VIII.
Each party hereto shall use all reasonable efforts to obtain all authorizations, consents, orders and approvals of all Governmental Authorities that may be or become necessary for its and its
Affiliates' execution and delivery of, and the performance of their obligations pursuant to, this Agreement and shall cooperate fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. Each party hereto agrees to make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions
contemplated hereby as promptly as practicable, and in any event within ten Business Days of the date hereof, and to supply promptly any additional information and documentary material that may be
requested pursuant to the HSR Act. The parties hereto acknowledge that time shall be of the essence in this Agreement and agree not to take any action or omit to take any action that will have the
effect of unreasonably delaying, impairing or impeding the receipt of any required authorizations, consents, orders or approvals. 

        (b)  Without
limiting the generality of Purchaser's and Seller's undertakings pursuant to Section 5.05(a), Purchaser and Seller shall each: 

          (i)  use
its commercially reasonable efforts to eliminate any concerns on the part of any Governmental Authority with jurisdiction over the enforcement of any applicable
antitrust laws, anti-competition or similar laws ("Government Antitrust Authority") regarding the legality under any antitrust Law,
anti-competition or similar Law of Purchaser's acquisition of ITI; 

        (ii)  use
its commercially reasonable efforts to prevent the entry in a judicial or administrative proceeding brought under any antitrust Law, anti-competition or
similar Law by any Government Antitrust Authority or any other party of any permanent or preliminary injunction or other Governmental Order that would make consummation of the acquisition of ITI in
accordance with the terms of this Agreement unlawful or that would prevent or delay such consummation; 

        (iii)  use
its commercially reasonable efforts to, in the event that such an injunction or order has been issued in such a proceeding, vacate, modify or suspend such
injunction or order so as to permit such consummation on a schedule as close as possible to that contemplated by this Agreement; and 

        (iv)  use
its commercially reasonable efforts to avoid or eliminate each and every impediment under any antitrust Law that may be asserted by any Government Antitrust
Authority or any other party to the consummation of the acquisition of ITI by Purchaser in accordance with the terms of this Agreement. 

        (c)  Nothing
in this Section 5.05 shall require any of the parties hereto, or any of their Affiliates, to make arrangements for, or to effect, (i) the
cessation, sale or other disposition of particular assets or categories of assets or businesses or (ii) license any asset (including any Intellectual Property Right). 

25

 

        (d)  Seller
shall give promptly such notices to third parties and use reasonable efforts to obtain such third party consents (not including the consents of any Governmental
Authorities) as may be necessary in connection with the transactions contemplated by this Agreement; provided that Seller and its Affiliates shall not be required to make any payment to any such
Person to induce such Person to grant such consent or waiver. 

        Section 5.06    Notification to Governmental Authorities.    Purchaser shall, as promptly as practicable after
the Closing, and in any event not later than the earlier of (i) 60 calendar days after the Closing Date and (ii) the expiration date of the applicable notification period, notify each
Governmental Authority which requires such notification and (x) which is responsible for the regulatory supervision and administration of ITI or (y) which otherwise requires notification
of the transactions contemplated by this Agreement, all of which such Governmental Authorities Seller has listed on Schedule 5.06 attached hereto. 

        Section 5.07    Non-Competition.    For a period of five years after the Closing Date (the
"Non-Competition Period"), except as otherwise permitted by ITI in writing and except for the sale by Centerpulse or a Person controlled,
directly or indirectly, by Centerpulse of items manufactured by ITI for time periods prior to the time, if ever, until ITI instructs Centerpulse in writing to cease such sales efforts, neither
Centerpulse nor any Person controlled, directly or indirectly, by Centerpulse will (A) manufacture, sell or distribute any product that competes directly or indirectly with any products that
are manufactured,
sold or distributed as part of ITI's business on the Closing Date or which are being designed and/or are under development on the Closing Date or which ITI worked on the design and/or development of
at any time prior to the Closing Date (such products, the "Competitive Products") or (B) manufacture, use, distribute or sell, or have
manufactured, sold or distributed, any drug coated device which is deployed through a body orifice or percutaneously by accessing a luminal space (such as a blood vessel) in a body with a puncture or
small incision through which a catheter, wire, or other such device can be inserted; provided, however, that the foregoing (x) shall not apply to
the businesses of Vascutek Ltd., Sulzer Vascutek USA Inc., Sulzer Cardiovascular GmbH, Sulzer Carbomedics, Inc. and its Subsidiaries, Sulzer Carbomedics International Holding Co.
and its Subsidiary and Sulzer Cardiovascular BV, as such businesses are currently conducted as of the date hereof or prohibit any of such entities from manufacturing, selling or distributing any
product currently under development by such entity as shown by the written records of such entity or prohibit Centerpulse and Persons controlled directly or indirectly by Centerpulse from selling, in
the aggregate per year, up to $200,000 in products manufactured by Vascutek Ltd. or Sulzer Carbomedics, Inc. and (y) shall not prohibit Seller or any Affiliate of Seller from
(i) acquiring, directly or indirectly, securities of any Person traded in a public market that sells any Competitive Products; provided that Seller and its Affiliates do not, in the aggregate,
own more than 5% of any class of securities of such Person; or (ii) acquiring a company or a business that has multiple lines of business, some of which do not involve the manufacture, sale,
distribution, development or design of a Competitive Product (a "Diversified Company") and that both (x) has less than 15% of its gross revenues
(based on the most recently completed twelve months preceding the date of acquisition) attributable to the manufacture, sale or distribution of Competitive Products ("Competing
Revenues") and (y) has less than $20,000,000 of Competing Revenues for the most recently completed twelve months preceding the date of acquisition (an
"Eligible Diversified Company"); provided, however that Seller or an Affiliate may acquire a Diversified
Company that is not an Eligible Diversified Company so long as Seller or its Affiliate, as applicable, divests itself within 12 months of its acquisition of such Diversified Company or the
assets of such Diversified Company that sells Competitive Products and provided further, however, that in the event that Seller or any Affiliate of
Seller acquires an Eligible Diversified Company but, after such acquisition and prior to the termination of the Non-Competition Period, the gross revenues generated by such Eligible
Diversified Company (or any successor thereto) from the manufacture, sale or distribution of Competitive Products exceeds 15% of its gross revenues or more than $20,000,000 during any consecutive
twelve month period, then Seller or its Affiliate shall divest itself, within 

26

 

12 months of the Eligible Diversified Company (or successor thereto) exceeding such threshold, of such Eligible Diversified Company or the assets of such Eligible Diversified Company that
sells Competitive Products. Seller acknowledges and agrees that any violation of this Section 5.07 will cause substantial and irreparable harm to ITI and Purchaser that may not be quantifiable
and for which no adequate remedy would exist at law and accordingly injunctive relief shall be available for any violation of this Section 5.07. In the event that ITI instructs Centerpulse or a
Person controlled, directly or indirectly, by Centerpulse to cease selling items manufactured by ITI pursuant to the first sentence of this Section 5.07, Centerpulse or such Person may
nonetheless continue to sell such products unless ITI agrees to repurchase from Centerpulse or such Person such products at the same price at which they were sold by ITI to Centerpulse or such Person. 

        Section 5.08    Intercompany Arrangements.    Prior to the Closing Date, Seller shall cause any contract or
arrangement that is disclosed (or should have been disclosed) in Section 3.14(a)(vi) of the Disclosure Schedule, other than those contracts or arrangements set forth in
Section 5.08 of the Disclosure Schedule, to be terminated or otherwise amended to exclude ITI as a party thereto. 

        Section 5.09    Insurance Coverage.    Effective 12:01 a.m. on the Closing Date, ITI and the property
and assets thereof shall cease to be insured by Seller's or its Affiliates' (other than ITI's) insurance policies for periods after the Closing Date; provided, however, that neither Seller nor any of
Seller's Affiliates shall take any actions so as to prejudice any rights ITI may have under such policies as such rights exist as of 12:00 a.m. on the Closing Date. 

        Section 5.10    Transition Services.    Following the Closing Date, Seller shall provide, or cause to be
provided, to Purchaser certain services which are currently provided by Seller and its Affiliates to ITI, all as more fully set forth in a transition services agreement (the
"Seller Transition Services Agreement") to be entered into by Seller and Purchaser as of the Closing Date, which Seller Transition Services Agreement
will provide for the provision to ITI by Seller and its Affiliate of the services set forth on Schedule 5.10 on customary terms and conditions and for a fee not to exceed reasonable rates for
such services and not to exceed, in any event, the rates set forth on Schedule 5.10. 

        Section 5.11    No Negotiations.    (a) From and after the date hereof and until the earlier to occur of
the Closing Date or the termination of this Agreement pursuant to Article X, Seller shall not, and shall not permit or cause any of the officers, directors or other Affiliates of Seller, or any
Persons acting on behalf of Seller or its Affiliates to, directly or indirectly, encourage, solicit, engage in discussions or negotiations with, or provide any information to, any Person or group
(other than Purchaser or its representatives) concerning any merger, sale of assets, purchase or sale of shares of capital stock or similar transaction involving ITI or any other transaction that
(i) could reasonably be expected to impede or interfere with the transactions contemplated hereby, (ii) could reasonably be expected to materially dilute the benefits to Purchaser of the
transactions contemplated hereby, (iii) could reasonably be expected to delay the consummation of the transactions contemplated hereby or (iv) or that is otherwise inconsistent with the
transactions contemplated hereby or propose to enter into or agree to endorse any such transaction. Seller shall promptly communicate to Purchaser any inquiries or communications concerning any such
transaction which Seller may receive or of which Seller may become aware. Upon execution of this Agreement, Seller will immediately terminate all discussions with any Person (other than Purchaser)
concerning any such transaction, and will request that such Person promptly return any confidential information furnished by Seller in connection therewith. Seller will not waive any provision of any
confidentiality, standstill or similar agreement entered into with any Person (other than Purchaser), and will enforce all such agreements in accordance with their terms. 

        (b)  In
the event that (i) Seller violates the provisions of Section 5.11(a), (ii) this Agreement is terminated and the transactions contemplated by this
Agreement are not consummated and (iii) within six months after this Agreement is terminated, Seller either consummates a transaction or series of 

27

 

transactions, or enters into any agreement to consummate a transaction or series of transactions whereby (A) any Person, other than an Affiliate of Seller, acquires 50% or more of the
outstanding shares of voting stock of ITI, (B) there is a merger or other business combination involving ITI pursuant to which any Person, other than an Affiliate of Seller, acquires securities
representing 50% or more of the aggregate voting power of all outstanding securities of the company surviving the merger or business combination, or (C) any other transaction pursuant to which
any Person, other than an Affiliate of Seller, acquires control of assets of ITI having a fair market value equal to 20% or more of the fair value of all of the assets of ITI immediately prior to such
a transaction (other than a sale of
inventory in the ordinary course of business), then, upon the consummation of any such transaction or upon the execution of such an agreement, Seller shall promptly pay to Purchaser a fee equal to the
amount of the fair market value of all the total consideration received or receivable by Seller and/or any of its Affiliates in connection with such transaction to the extent such fair market value
amount exceeds $95,000,000, but in no event shall such fee payable to Purchaser exceed $5,000,000. 

        Section 5.12    Sulzer Orthopedics Settlement Arrangement.    As soon as practicable after the date hereof,
Seller shall use its reasonable best efforts to (i) have ITI removed as a party to the Sulzer Orthopedics Settlement Arrangement and to take such actions as are necessary so that ITI shall have
no liability or obligation of any kind thereunder and (ii) remove all liens against the assets of ITI that relate to its obligations under the Sulzer Orthopedics Settlement Arrangement and file
appropriate notice of termination of such liens in all applicable jurisdictions. 

        Section 5.13    [Intentionally Omitted].    

        Section 5.14    Tax Lien.    As soon as practicable after the date hereof, Seller will use its reasonable
efforts to cause the tax liens filed by the Internal Revenue Service on April 25, 2002 and April 26, 2002 (Lien Nos. 41243500 and 410243499, respectively) to be removed and to fully
satisfy the obligations underlying such liens. 

        Section 5.15    Non-Solicit.    Neither Seller nor any of its Affiliates shall, directly or
indirectly, for a period of two (2) years after the Closing Date take any action, other than with the prior written consent of Purchaser, to induce any Person who is an employee of ITI as of
the date hereof or who becomes an employee of ITI after the date hereof, to leave the employ of ITI; provided, however, that nothing contained herein
shall prohibit or restrict the ability of Seller and its Affiliates to (i) make general solicitations for employees through print, radio and television advertising or otherwise in a public
forum and (ii) hire Paula Norbom. 

        Section 5.16    Further Action.    Each of the parties hereto shall execute and deliver such documents and
other papers and take such further action as may be reasonably required to carry out the provisions hereof and to make effective the transactions contemplated hereby. 

ARTICLE VI  

EMPLOYEE MATTERS 

        Section 6.01    Continuation of Benefits.    Each individual employed by ITI as of the Closing Date (an
"ITI Employee") will be eligible to participate in the employee benefit plans maintained by Purchaser for similarly situated employees of Purchaser
("Purchaser's Plans"), subject to any eligibility requirements applicable to such plans. Purchaser shall provide, or shall cause ITI to provide, each
ITI Employee and his or her eligible dependents who, immediately prior to the Closing Date were participants in a Benefit Plan that is a group medical plan, with coverage as of the Closing Date under
Purchaser's group medical plan subject to the eligibility requirements under such group medical plan. For purposes of eligibility service and vesting service, but not benefit accrual (except
calculation of severance payments under Purchaser's severance plan), each ITI Employee shall be credited under each Purchaser Plan (including, but not limited to, Purchaser's group medical plan) with
the years of service 

28

 

such ITI Employee had completed with ITI and its Affiliates as of the Closing Date, using information supplied by Seller to Purchaser on the Closing Date or as soon thereafter as possible. To the
extent required by applicable Law, Purchaser will cause coverage to be provided with respect to pre-existing conditions for ITI Employees who participate in Purchaser's group medical plan
under such medical plans. 

        Section 6.02    Cash Compensation.    For a period of one year following the Closing Date, Purchaser shall
ensure that each ITI employee shall, so long as such employee continues to remain employed with ITI, continue to be paid base salary at no lower a rate than that in effect on the Closing Date with
respect to such employee; provided, however, that nothing in this Section 6.02 shall restrict Purchaser from terminating the employment of any employee of ITI in its sole discretion. 

        Section 6.03    Termination of ITI's Participation in Seller's Plans.    Seller shall take all necessary
actions to terminate ITI's status as a participating employer in all Benefit Plans sponsored by Seller, such termination to be effective as of the Closing Date. 

        Section 6.04    401(k) Plan.    Effective as of the Closing Date, all ITI Employees as of such date who are
participants ("401(k) Plan Participants") in the Sulzer Medica USA Inc. Retirement Plan (the "the Seller 401(k)
Plan") shall no longer accrue benefits under the Seller 401(k) Plan and Seller shall take all actions necessary to achieve this result. As of the Closing Date, Seller shall
cause each such 401(k) Plan Participant to be fully vested in such person's account balance in the Seller 401(k) Plan, and will take all actions necessary in order for each 401(k) Plan Participant to
be allowed to receive a distribution of such individual's account balance after the Closing Date. 

        Section 6.05    COBRA.    Seller shall be responsible for, and shall hold Purchaser harmless from, all
liability for giving notification of and providing health care continuation coverage to current and former employees of ITI (and their other "qualified beneficiaries") who are entitled to such notice
and continuation coverage with respect to any "qualifying event" that occurred on or before the Closing Date, all within the meaning of Part 6 of Title I of ERISA and Section 4980B of
the Code. 

ARTICLE VII  

TAX MATTERS 

        Section 7.01    Indemnity.    (a) With respect to the sale of the Shares, Seller agrees to indemnify and
hold harmless Purchaser against the following Taxes and, except as otherwise provided in Section 7.04, against any loss, damage, liability or expense, including reasonable fees for attorneys
and other outside consultants, incurred in contesting or otherwise in connection with any such Taxes: (i) Taxes imposed on ITI with respect to any Pre-Closing Taxable Period,
including any Taxes imposed on ITI with respect to the Straddle Period that are allocable, pursuant to Section 7.01(b), to the Pre-Closing Taxable Period; (ii) Taxes imposed
on any member of any affiliated group (other than ITI) with which ITI files or has filed a Tax Return on a consolidated, combined or unitary basis for a taxable period beginning before the Closing
Date (including under Treasury Regulation §1.1502-6 or analogous state or foreign provisions); and (iii) Taxes imposed on ITI as a result of any breach of warranty or
misrepresentation under Section 3.17. Notwithstanding the forgoing, with respect to non-Income Taxes, the Seller shall only be required to make a payment pursuant to this
section 7.01(a) to the extent such Taxes exceed the amount reserved for Taxes on the Closing Balance Sheet. 

        (b)  In
the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Tax that is allocable to the Pre-Closing Taxable Period
shall be: 

          (i)  in
the case of Taxes that are either (x) based upon or related to income or receipts, or (y) imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible) (other than conveyances pursuant to this Agreement, as provided 

29

 

under Section 7.06), deemed equal to the amount which would be payable if the Straddle Period taxable year ended with the Closing Date; and 

        (ii)  in
the case of Taxes imposed on a periodic basis with respect to any of ITI's assets or otherwise measured by the value of any item, deemed to be the amount of such
Taxes for the entire Straddle Period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period), multiplied by a fraction the
numerator of which is the number of calendar days in the Straddle Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period. 

        Section 7.02    Tax Returns and Payments.    (a) Seller shall cause to be included in Seller's
consolidated federal income Tax Returns (and the federal, state, local, canton, provincial or national income Tax Returns of any jurisdiction in which Seller or an Affiliate of Seller files
consolidated, combined, group or unitary
income Tax Returns) for all Pre-Closing Taxable Periods, all items of income, gain, loss, deduction and credit or other items (collectively, "Tax
Items") of ITI which are required to be included therein, shall file timely all such Tax Returns with the appropriate Taxing Authorities and shall timely pay all Taxes due with
respect to the periods covered by such Tax Returns. 

        (b)  With
respect to each Tax Return covering a taxable period ending on or before the Closing Date that is required to be filed after the Closing Date for, by or with
respect to ITI (other than the Tax Returns described in Section 7.02(a)), Seller shall cause such Tax Return to be prepared, shall cause to be included in such Tax Return all Tax Items required
to be included therein, and shall cause the original of such Tax Return to be delivered, to Purchaser at least ten calendar days prior to the due date (including extensions) of such Tax Return.
Purchaser shall cause such Tax Return to be properly executed and returned to Seller at least five calendar days prior to the due date (including extensions of such Tax Return). Seller shall cause
such Tax Return to be timely filed and shall remit the amount of any Taxes shown as due on such Tax Return to the appropriate Taxing Authority. 

        (c)  With
respect to each Tax Return covering a Straddle Period that is required to be filed for, by or with respect to ITI (a "Straddle Period
Return"), other than the Tax Returns described in Section 7.02(a), Purchaser shall cause such Straddle Period Return to be prepared and shall cause to be included in
such Straddle Period Return all Tax Items required to be included therein. Purchaser shall determine in accordance with the provisions of Section 7.01(b), subject to review and agreement by
Seller, the portion, if any, of the Tax due with respect to the period covered by such Straddle Period Return which is attributable to the Pre-Closing Taxable Period. At least 30 calendar
days prior to the due date (including extensions) of such Straddle Period Return, Purchaser shall deliver to Seller a copy of such Straddle Period Return along with Purchaser's calculation of the
amount of Tax attributable to the Pre-Closing Taxable Period. Purchaser shall cause ITI to file timely such Straddle Period Return with the appropriate Taxing Authority and to pay timely
the amount of Taxes shown to be due on such Straddle Period Return. 

        (d)  When
all such Straddle Period Returns have been filed, Purchaser shall prepare a statement within 10 calendar days after the filing of the final Straddle Period Return
showing the aggregate amount of Taxes allocable to the Pre-Closing Taxable Period as reflected on such Straddle Period Returns (the "Final Tax
Amount") and shall submit such statement to Seller for review and agreement by the parties hereto. Upon agreement by the parties on the Final Tax Amount, to the extent the
Final Tax Amount exceeds the aggregate amount of Taxes previously paid by Seller with respect to any Straddle Period, Seller shall promptly pay to Purchaser such excess amount to the extent such
excess is not reflected on the Closing Balance Sheet. To the extent the aggregate amount of Taxes previously paid by Seller or an Affiliate of Seller with respect to any Straddle Period is greater
than the Final Tax Amount, Purchaser shall promptly pay Seller such excess amount. 

        (e)  All
Tax Returns to be prepared pursuant to this Section 7.02 shall be prepared in a manner consistent with practices followed in prior years except for changes
required by Law. 

30

 

        Section 7.03    Refunds.    Any Tax refund (including any interest with respect thereto) relating to ITI for
any taxable period prior to the Closing Date (except for any refund included on the Closing Balance Sheet, which shall be the property of Purchaser, and if paid to Seller, shall be paid over promptly
to Purchaser) shall be the property of Seller, and if received by Purchaser or ITI shall be paid over promptly to Seller. Purchaser shall elect not to carry back any loss or credit arising after the
Closing Date to a taxable period beginning before the Closing Date. 

        Section 7.04    Contests.    (a) If a claim shall be made by any Taxing Authority that, if successful,
would result in the indemnification of a party (the "Tax Indemnified Party") under this Article VII, the Tax Indemnified Party shall promptly
notify the party (the "Tax Indemnifying Party") obligated under this Article VII to indemnify the Tax Indemnified Party in writing of such fact;  provided,
however, that a failure to give such notice shall not affect the Tax Indemnified Party's right to indemnification under this
Article VII except to the extent, if any, that, but for such failure, the Tax Indemnifying Party could have avoided all or a portion of the Tax liability in question. Such notice shall contain
factual information (to the extent known to the Tax Indemnified Party) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from
any Taxing Authority in respect of such asserted Tax liability. 

        (b)  The
Tax Indemnifying Party shall determine the method of any contest of any claim under Section 7.04(a) and shall control the conduct thereof. If the contest or
appeal of such claim requires that all or a portion of the contested Taxes (or a bond in respect thereof) be paid as a jurisdictional prerequisite, the Tax Indemnifying Party shall advance to the Tax
Indemnified Party the amount of such Taxes or fee for such bond (but in no event shall the amount of such advance exceed the Tax Indemnifying Party's liability under this Agreement). The Tax
Indemnified Party shall take such action in connection with contesting such claim as the Tax Indemnifying Party shall request in writing from time to time, including the selection of counsel and
experts and the execution of powers of attorney; provided, however, that the Tax Indemnified Party shall not be required to take any such action,
unless, within 30 calendar days after delivery of the notice required by Section 7.04(a) to the Tax Indemnifying Party (or such earlier date that any payment of Taxes is due by the Tax
Indemnified Party but in no event earlier than five calendar days after the Tax Indemnifying Party's receipt of such notice), the Tax Indemnifying Party requests that such claim be contested and
agrees to pay to or on behalf of the Tax Indemnified Party any and all reasonable out-of-pocket costs and expenses incurred by the Tax Indemnified Party in connection with
contesting such claim, including, without limitation, the reasonable fees of outside advisors, attorneys and accountants. The Tax Indemnified Party shall not be required to make any payment of such
claim for at least 30 calendar days (or such shorter period as may be required by applicable Law) after the delivery of the notice required by this subsection, shall timely give to the Tax
Indemnifying Party any information reasonably requested by the Tax Indemnifying Party relating to such claim, and otherwise shall cooperate with the Tax Indemnifying Party in order to contest
effectively any such claim. 

        (c)  Subject
to the provisions of Section 7.04(b), the Tax Indemnified Party shall enter into a settlement of such contest with the applicable Taxing Authority or
prosecute such contest to a determination in a court, all as the Tax Indemnifying Party may request. 

        (d)  Promptly
after the extent of the liability of the Tax Indemnified Party with respect to a claim shall be established by the final judgment or decree of a court or a
final and binding settlement with a Taxing Authority having jurisdiction thereof, the Tax Indemnifying Party shall pay the Tax Indemnified Party the amount of any Taxes to which the Tax Indemnified
Party may become entitled by reason of the provisions of this Section 7.04. 

        (e)  Notwithstanding
anything to the contrary in this Article VII, any interest, penalties, fines, assessments or additions to any Tax resulting from or attributable
to the failure of the Tax Indemnified Party to act in a timely manner, including in filing Tax Returns, responding to Tax audits or other 

31

 

inquiries or making payments shall not be indemnifiable hereunder and shall be the sole responsibility of the Tax Indemnified Party. 

        (f)    The
indemnification provided in this Article VII shall be the sole remedy for any claim in respect of Taxes. In the event of a conflict between the provisions of
this Article VII and any other provisions of this Agreement, the provisions of this Article VII shall control. 

        Section 7.05    Cooperation and Exchange of Information.    Upon the terms set forth in Section 5.03 of
this Agreement, Seller and Purchaser will provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return, amended Tax Return or
claim for refund, determining a liability for Taxes or a right to a refund of Taxes, or participating in or conducting any audit or other proceeding in respect of Taxes. Such cooperation and
information shall include, among other things, providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings
or other determinations by Taxing Authorities. Seller and Purchaser shall make their respective employees and the employees of their Affiliates available on a basis mutually convenient to both parties
to provide explanations of any documents or information provided hereunder. Each of Seller and Purchaser shall retain all Tax Returns, schedules and work papers, records and other documents in its
possession relating to Tax matters of ITI for each taxable period first ending after the Closing Date and for all prior taxable periods until the later of (i) the expiration of the period of
limitations for the assessment of Taxes applicable to the relevant taxable periods to which such Tax Returns and other documents relate, without regard to extensions except to the extent notified by
the other party in writing of such extensions for the respective Tax periods, or (ii) six years following the due date (without extension) for such Tax Returns. Any information obtained under
this Section 7.05 shall be kept confidential in accordance with Section 5.02 except as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in
conducting an audit or other proceeding. 

        Section 7.06    Conveyance Taxes.    Seller shall be liable for and shall hold Purchaser harmless against any
real property transfer or gains, sales, use, transfer, value added, stock transfer, and stamp taxes, any transfer, recording, registration, and other fees, and any similar Taxes which become payable
in connection with the transactions contemplated by this Agreement, and shall file such applications and documents as shall permit any such Tax to be assessed and paid on or prior to the Closing Date
in accordance with any available pre-sale filing procedure. Purchaser shall execute and deliver all instruments and certificates necessary to enable Seller to comply with the foregoing. 

        Section 7.07    Miscellaneous.    (a) Seller and Purchaser agree to treat all payments made by either of
them to or for the benefit of the other (including any payments to ITI) under this Article VII, under other indemnity provisions of this Agreement and for any misrepresentations or breaches of
warranties or covenants as adjustments to the Purchase Price or as capital contributions for Tax purposes and that such treatment shall govern for purposes hereof except to the extent that the Laws of
a particular jurisdiction provide otherwise. 

        (b)  Any
Tax sharing agreement or arrangement between Seller and ITI shall be deemed to be canceled at the Closing with respect to ITI unless terminated prior to the Closing. 

        (c)  Notwithstanding
any provision in this Agreement to the contrary, the obligations of Seller to indemnify and hold harmless Purchaser and ITI pursuant to this
Article VII, and the representations and warranties contained in Section 3.17, shall terminate at the close of business on the 60th calendar day following the expiration of the period of
limitations for the assessment of Taxes applicable to the Tax liabilities in question. 

        (d)  For
purposes of this Article VII, "Purchaser" and "Seller", respectively, shall include each member of the affiliated group of corporations of which it is or
becomes a member (other than ITI, except to the extent expressly referenced). 

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   ARTICLE VIII  

CONDITIONS TO CLOSING 

        Section 8.01    Conditions to Obligations of Seller.    The obligations of Seller to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: 

        (a)    Representations and Warranties: Covenants.    The representations and warranties of Purchaser contained in this
Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing, with the same force and effect as if made as of
the Closing, other than such representations and warranties as are made as of another date which such representations and warranties shall be true and correct in all material respects as of such date;
provided, however, that for purposes of determining if a representation or warranty is true and correct in all material respects, any reference in such representation or warranty to "material" and /or
"Material Adverse Effect" shall be disregarded; the covenants and agreements contained in this Agreement to be complied with by Purchaser at or before the Closing shall have been complied with in all
material respects; and Seller shall have received a certificate of Purchaser to such effect signed by a duly authorized officer thereof; 

        (b)    Competition Waiting Period.    Any waiting period (and any extension thereof) under the HSR Act applicable to
the transactions contemplated hereby shall have expired or shall have been terminated, and all consents, authorizations, orders and approvals required pursuant to any antitrust or competition Law in
any jurisdiction which is material to ITI's business shall have been obtained; and 

        (c)    No Order.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or
Governmental Order (whether temporary, preliminary or permanent) which is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise restraining or
prohibiting consummation of such transactions. 

        (d)    License Agreement.    ITI shall have entered, immediately prior to the Closing, into an agreement with
Biologics in form and substance satisfactory to Purchaser which shall provide, among other terms, that Biologics shall have a fully paid, irrevocable, worldwide, transferable, sublicensable,
nonexclusive license to use the Additional Assigned Biologics Intellectual Property in all fields of use except for the Excluded Field of Use and except for future improvements and modifications
related to the Additional Assigned Biologics Intellectual Property which are made by ITI subsequent to the Closing Date. "Excluded Field of Use" shall
mean the field related to intraluminal stent technology. 

        Section 8.02    Conditions to Obligations of Purchaser.    The obligations of Purchaser to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: 

        (a)    Representations and Warranties; Covenants.    The representations and warranties of Seller contained in this
Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing, with the same force and effect as if made as of
the Closing, other than such representations and warranties as are made as of another date, which such representations and warranties shall be true and correct in all material respects as of such
date; provided, however, that for purposes of determining if a representation or warranty is true and correct in all material respects, any reference in such representation or warranty to "material"
and/or "Material Adverse Effect" shall be disregarded; the covenants and agreements contained in this Agreement to be complied with by Seller and/or ITI at or before the Closing shall have been
complied with in all material respects. 

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        (b)    Competition Waiting Period.    Any waiting period (and any extension thereof) under the HSR Act applicable to
the transactions contemplated hereby shall have expired or shall have been terminated and all consents, authorizations, orders and approvals required pursuant to any antitrust or competition Law in
any jurisdiction which is material to ITI's business shall have been obtained. 

        (c)    No Order.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or
Governmental Order (whether temporary, preliminary or permanent) which is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise restraining or
prohibiting consummation of such transactions. 

        (d)    Consents.    All consents, waivers, authorizations and approvals of any Person required in connection with the
execution, delivery and performance of this Agreement and set forth on Schedule 8.02(d) shall have been duly obtained and shall be in full force and effect on the Closing Date. 

        (e)    Opinion.    Purchaser shall have received the opinions of McDermott, Will & Emery, counsel to Seller,
Seller's local Minnesota counsel, and Bär & Karrer, counsel to Centerpulse, dated the Closing Date, in form attached hereto as Exhibit 8.02(e). 

        (f)    Assignment Agreement.    ITI shall have entered, immediately prior to the Closing, into an agreement with
Sulzer Biologics, Inc. ("Biologics") in form and substance satisfactory to Purchaser which shall provide, among other terms, that
(i) Biologics shall assign, at no cost to ITI, all its rights, title and interests in the two patent applications described on Exhibit 8.02(f) (the "Coating
Applications") and the Intellectual Property described therein and in the three disclosures described on Exhibit 8.02(f) (the "Coating
Disclosures") and the Intellectual Property described therein, (ii) Biologics shall assign and transfer possession to ITI, at no cost to ITI, all documentation
concerning the research, development, testing, specifying, manufacturing, or use of the concepts, devices or methods disclosed in the Coating Applications and/or Coating Disclosures together with all
documentation concerning the conception and reduction to practice of the inventions described therein or related thereto, including notebooks of the applicable inventor(s), (iii) Biologics
will, at no cost to ITI, provide reasonable cooperation and assistance to ITI to allow it to prosecute the patent applications related to the Coating Applications and to file and prosecute patent
applications related to the Coating Disclosures, (iv) Biologics shall assign to ITI, at no cost to ITI, all Intellectual Property owned by Biologics, in addition to the Intellectual Property
embodied in the Coating Applications and Coating Disclosures, or its licenses to Intellectual Property which relates to the research, development, testing, specifying, manufacturing, or use of drug
coatings or carriers for drug coatings for use on a device which is deployed through a body orifice or percutaneously by accessing a luminal space (such as a blood vessel) in a body with a puncture or
small incision through which a catheter, wire or other such device can be inserted (the "Additional Assigned Biologics Intellectual Property"),
(v) Biologics shall assign and transfer possession to ITI, at no cost to ITI, all documentation concerning the research, development, testing, specifying, manufacturing or use of drug coatings
or carriers for drug coatings encompassed within the Additional Assigned Biologics Intellectual Property including lab notebooks of the inventors of any possible inventions described therein;
provided, however, that in the event Biologics requires access to the documentation regarding the Additional Assigned Biologics Intellectual Property which is necessary to the reasonable conduct of
its business Biologics shall make written request to ITI for its consent to such access giving the reasons such access is necessary, why it is necessary, and what documentation is needed, the consent
of ITI shall not be unreasonably withheld provided that such access will be granted only at reasonable times during regular business hours and Biologics shall use the documentation for the stated
purpose only and agree such access shall be subject to terms of confidentiality, (vi) Biologics will cooperate to identify, collect and assemble the Additional Assigned Biologics Intellectual
Property and the 

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documentation regarding same for transfer to ITI at Closing, and (vii) Purchaser agrees that the Additional Assigned Biologics Intellectual Property shall not be licensed or assigned to others
for use in the field of orthopedics. 

        (g)    License Agreement.    ITI shall have entered, immediately prior to the Closing, into an agreement with
Biologics, Centerpulse USA Inc. and subsidiaries and affiliates thereof in form and substance satisfactory to Purchaser which shall provide, among other terms, that ITI shall have a fully paid,
irrevocable, worldwide nonexclusive license to all Intellectual Property owned or licensed (to the extent such entities can sublicense such Intellectual Property) by Biologics, Centerpulse USA Inc or
their affiliates other than the Additional Assigned Intellectual Property and Intellectual Property embodied in the Coating Applications and/or Coating Disclosures, for purposes of making, having
made, using
and selling drug coated devices in the Field of Use. Field of Use shall mean the research, development, testing, specifying, manufacturing, or use of drug coatings or carriers for drug coatings for
use on a device which is deployed through a body orifice or percutaneously by accessing a luminal space (such as a blood vessel) in a body with a puncture or small incision through which a catheter,
wire or other such device can be inserted; provided, however, that in the event that the license described in this Section 8.02(g) is assigned to others (including an assignment by operation of
law in the event ITI is acquired by another Person), the Field of Use shall, upon such assignment, be automatically deemed amended to exclude the use of the Intellectual Property covered by such
license in the fields of orthopedics, dental and spine care. 

        (h)    Biologics Employees.    ITI shall have entered into agreements or understandings with each of C.P. Pathak and
Rama Akella to employ such individuals after the Closing on terms and conditions acceptable to Purchaser or will have entered into a consulting agreement with Biologics or such individuals in form and
substance satisfactory to Purchaser which such consulting agreement would allow for ITI to receive such services that would have been provided by such individuals had they been employed by ITI. 

        (i)    Releases by Directors and Officers.    There shall have been delivered to the Purchaser releases, substantially
in the form of Exhibit 8.02(i), by the executive officers and directors of ITI of all claims against ITI except for compensation and expenses payable to such officers and directors up to the
Closing Date for the then current pay period. 

        (j)    Insurance.    Purchaser shall have received evidence that the representations and warranties in
Section 3.19(b) are true and correct in all respects which such evidence shall include, without limitation, all polices referenced therein (the "Insurance
Evidence"); provided, however, that in the event that Purchaser does not notify Seller within fifteen (15) business days after the later of (i) the date hereof or
(ii) the first date on which all Insurance Evidence has been provided to Purchaser that the condition has not been satisfied, then this condition 8.02(j) shall be deemed satisfied and provided
further, however, that if Purchaser does provide notice to Seller prior to the end of such fifteen (15) business day period that either (i) the Insurance Evidence has not been received
or (ii) Purchaser believes that the representations and warranties in Section 3.19(b) are not true and correct in all respects, then Seller shall have thirty (30) calendar days to
either (i) put in place such insurance coverage so as to cause such representations and warranties to be true and correct or (ii) provide the Insurance Evidence and if Seller fails to do
so, then Purchaser may terminate this Agreement after such thirty (30) calendar day period has expired. 

        (k)    No Material Adverse Change.    During the period from the date hereof to the Closing Date, there shall not have
occurred any Material Adverse Effect; provided, however, that in no event shall any Action relating to an Excluded IP Claim be deemed to be a Material Adverse Effect for purposes of this
Section 8.02(k). 

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        (l)    Resignations by Directors and Officers.    There shall have been delivered to Purchaser resignations by all of
the directors of ITI and from each officer of ITI as is requested by Purchaser. 

        (m)    Release From Settlement Agreement.    Purchaser shall have received evidence that is satisfactory to Purchaser
in its sole discretion that (i) (x) ITI shall have been removed as a party to the Sulzer Orthopedics Settlement Arrangement and that ITI has, and shall have, no liability or obligation of any
kind thereunder and (y) all liens against the assets of ITI that relate to the Sulzer Orthopedics Settlement Arrangement shall have been removed and all appropriate termination of lien
documents shall have been filed in all applicable jurisdictions and evidence thereof shall have been delivered to Purchaser or (ii) ITI's liability and obligations under the Sulzer Orthopedics
Settlement Agreement have been otherwise defeased and that ITI will have no liability under the Sulzer Orthopedics Settlement Agreement. 

        (n)    Certificate.    Purchaser shall have received a certificate of Seller signed by a duly authorized officer of
Seller certifying as to the fulfillment of the conditions set forth in Sections 8.02(a), 8.02(c) and 8.02(l). 

ARTICLE IX  

INDEMNIFICATION 

        Section 9.01    Survival of Representations and Warranties.    Subject to the limitations and other provisions
of this Agreement (including, without limitation, Section 7.07(c) hereof), the representations and warranties of the parties hereto contained herein shall survive the Closing and shall remain
in full force and effect for a period of eighteen months after the Closing Date; provided, however, that (i) the representations and warranties contained in Sections 3.12 (Environmental
Matters), 3.16 (Employee Benefits Matters) and 3.17 (Taxes) shall survive until the date that is thirty (30) days after the date on which the applicable statutes of limitation expire for such
matters, (ii) the representations and warranties contained in Section 3.13 (Intellectual Property Rights) shall survive until the date that is five (5) years from the Closing
Date, (iii) the representations and warranties contained in Section 3.03 (Capital Stock of ITI) shall survive forever and (iv) the representations and warranties contained in
Section 3.19(b) (Insurance) shall survive until such time as no claims can be made under the policies referred to in Section 3.19(b). The covenants of the parties hereto contained in
this Agreement shall survive the Closing and the consummation of the transactions contemplated by this Agreement. 

        Section 9.02    Indemnification by Purchaser.    (a) Purchaser agrees, subject to the other terms and
conditions of this Agreement, to indemnify Seller and its Affiliates, officers, directors, employees, agents, successors and assigns (each a "Seller Indemnified
Party") against and hold them harmless from all liabilities, losses, damages, claims, costs and expenses (including reasonable attorney's fees) (collectively,
"Losses") actually incurred by them arising out of (i) the breach of any representation or
warranty of Purchaser herein, (ii) the breach of any covenant or agreement of Purchaser herein (other than Article VII, it being understood that the sole remedy for breach thereof shall
be pursuant to Article VII), and (iii) except as otherwise provided herein, the conduct of the business of ITI following the Closing. Notwithstanding anything in Article IX to the
contrary, no claim may be asserted nor may any action be commenced against Purchaser pursuant to Section 9.02(a)(i), unless written notice of such claim or action is received by Purchaser
describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such
claim or action is based ceases to survive as set forth in Section 9.01. 

        (b)  Notwithstanding
anything in this Agreement to the contrary, no claim may be made against Purchaser for indemnification pursuant to
Section 9.02(a)(i) unless the aggregate of Losses for which Seller Indemnified Parties are entitled to indemnity under such Section 9.02(a)(i) shall exceed $750,000 

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(the "Purchaser's Threshold Amount"), it being understood that once the Purchaser's Threshold Amount is exceeded, the Seller Indemnified Parties shall
be entitled to receive the aggregate of all such claims from the first dollar of Losses. Notwithstanding anything in this Agreement to the contrary, no Seller Indemnified Party shall be indemnified
pursuant to Section 9.02(a)(i) if, and to the extent that, the aggregate of all Losses of the Seller Indemnified Parties for which the Purchaser Indemnified Parties previously shall have
received indemnification pursuant to Section 9.02(a)(i) shall have exceeded $25,000,000. 

        (c)  Payments
by Purchaser pursuant to Section 9.02(a) shall be limited to the amount of any Loss that remains after deducting therefrom any Tax benefit to the Seller
Indemnified Parties and any insurance proceeds and any indemnity, contribution or other similar payment actually recovered by the Seller Indemnified Parties from any third party with respect thereto.
A Tax benefit will be considered to be recognized by the Seller Indemnified Parties for purposes of this Section 9.02 in the Tax period in which the indemnity payment occurs, and the amount of
the Tax benefit shall be determined by the Seller Indemnified Party's actual tax rate, after any deduction or other allowances reportable with respect to a payment hereunder, at the time such
indemnity payment is made. For purposes of calculating the amount of any Losses incurred in connection with any breach by Purchaser of any representation or warranty or breach or nonfulfillment by
Purchaser of any covenant, any and all references to material or Material Adverse Effect shall be disregarded. 

        (d)  A
Seller Indemnified Party shall give Purchaser prompt written notice of any claim, assertion, event or proceeding by or in respect of a third party of which such Seller
Indemnified Party has knowledge concerning any Loss as to which such Seller Indemnified Party may request indemnification hereunder; provided, however, that the failure to give such notice shall not
relieve Purchaser from any Liability or obligation pursuant to this Section 9.02 unless and only to the extent that Purchaser is prejudiced thereby. Purchaser shall have the right to assume
and, at the request of Seller shall have the obligation to assume, through counsel reasonably acceptable to Seller, the defense or settlement of any such claim or proceeding at its own expense. If
Purchaser elects or is required to assume the defense of any such claim or proceeding, Seller Indemnified Party may participate in such defense, but in such case the expenses of Seller Indemnified
Party shall be paid by Seller Indemnified Party. The Seller Indemnified Party shall provide Purchaser with reasonable access to its records and personnel relating to any such claim, assertion, event
or proceeding during normal business hours and shall otherwise cooperate with
Purchaser in the defense or settlement thereof, and Purchaser shall reimburse Seller Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith;
provided, however, that neither Purchaser nor a Seller Indemnified Party shall be required pursuant to this Section 9.02 to disclose any privileged information or any attorney work product. If
Purchaser elects or is required to assume the defense of any such claim or proceeding, Seller Indemnified Party shall not pay, or permit to be paid, any part of any claim or demand arising from such
asserted liability unless Purchaser consents in writing to such payment or unless a final judgment from which no appeal may be taken by or on behalf of Purchaser is entered against Seller Indemnified
Party for such liability. If Purchaser shall fail to undertake any such defense, Seller Indemnified Party shall have the right to undertake the defense or settlement thereof, at Purchaser's expense.
Purchaser may not settle any such claim or demand without the prior written consent to such settlement by Seller. 

        (e)  Except
as expressly set forth in this Agreement, Purchaser is not making any representation, warranty, covenant or agreement with respect to the matters contained
herein. Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of Seller, after the
consummation of the purchase and sale of the Shares as contemplated by this Agreement, to rescind this Agreement or any of the transactions contemplated hereby. 

        (f)    Seller
hereby acknowledges and agrees that (except in the case of fraud, in which Seller reserves any and all rights and remedies available to it) its sole and exclusive
remedy with respect to 

37

 

any and all claims relating to the subject matter of this Agreement and the transactions contemplated hereby shall be pursuant to the indemnification provisions set forth in Article VII and in
this Article IX and specific performance as contemplated by Section 11.14. In furtherance of the foregoing, Seller hereby waives, to the fullest extent permitted under applicable Law,
any and all rights, claims and causes of action it may have against Purchaser or any of its Affiliates arising under or based upon any Law (including, without limitation, any such rights, claims or
causes of action arising under or based upon common law or otherwise) with respect to any and all claims relating to the subject matter of this Agreement and the transactions contemplated hereby
except as set forth in the preceding sentence (except in the case of fraud, in which case Seller reserves any and all rights and remedies available to it). 

        Section 9.03    Indemnification by Seller.    (a) Seller agrees, subject to the other terms and
conditions of this Agreement, to indemnify Purchaser and its Affiliates, officers, directors, employees, agents, successors and assigns (each a "Purchaser Indemnified
Party") against and hold them harmless from all Losses actually incurred by them arising out of (i) the breach of any representation or warranty of Seller herein other
than a breach of Section 3.19(b) and other than any breach of the representation and warranty set forth in Section 3.13(c)(iv) to the extent such breach relates to matters
involving the subject patents of the Excluded IP Claims, (ii) the breach of any covenant or agreement of Seller herein (other than Section 3.17 and Article VII, it being
understood that the sole remedy for breach of such representations, warranties, covenants and agreements shall be pursuant to Article VII), (iii) the litigation referenced on
Section 3.09 of the Disclosure Schedule other than the Excluded IP Claims, (iv) the tax lien described in Section 5.14 above and any obligation underlying such tax lien,
(v) any claim made pursuant to Seller's and ITI's obligations to provide employee benefits pursuant to Section 6.08 of the Agreement and Plan of Merger among Sulzer Medica USA Holding
Co., Elver Acquisition
Corporation, and Intratherapeutics, Inc., dated as of January 5, 2001, (vi) any claim made against ITI, or for which ITI may have liability, under the Sulzer Orthopedics
Settlement Arrangement or relating to the release of ITI from the Sulzer Orthopedics Settlement Arrangement and/or the facts and circumstances relating thereto, (vii) any infringement, or
alleged infringement, by ITI or for which ITI could have liability that occurred, or is alleged to have occurred, at any time prior to Closing, of any Intellectual Property of any Third Party for
which Seller has Knowledge, other than (x) the matter described as Items 1, 2, 3 and 4 on Section 3.07 of the Disclosure Schedule (relating to the Cordis Patent) and (y) the
matter described as Item 7 on Section 3.07 of the Disclosure Schedule (relating to the Jervis Patent) (the matters referenced in clauses (x) and (y) the "Excluded IP Claims"),
(viii) any Action against ITI, or for which ITI may have liability, which is first asserted, or threatened to be asserted, after the date of this Agreement and prior to the Closing, other than
Actions relating to the Excluded IP Claims and (ix) any breach of the representations and warranties set forth in Section 3.19(b). Notwithstanding anything in this Article IX to
the contrary, (A) no claim may be asserted nor may any action be commenced against Seller pursuant to Section 9.03(a)(i) unless written notice of such claim or action is received
by Seller describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on
which such claim or action is based ceases to survive as set forth in Section 9.01 and (B) no claim may be asserted nor may any action be commenced against Seller pursuant to
Section 9.03(a)(vii) unless written notice of such claim or action is received by Seller describing in reasonable detail the facts and circumstances with respect to the subject matter of
such claim or action on or prior to the date that is three (3) years from the Closing Date. 

        (b)  Notwithstanding
anything in this Agreement to the contrary, no claim may be made against Seller for indemnification pursuant to Section 9.03(a)(i) or
Section 9.03(a)(vii) unless the aggregate of Losses for which Purchaser Indemnified Parties are entitled to indemnity under such Section 9.03(a)(i) and/or
Section 9.03(a)(vii) exceed $750,000 (the "Seller's Threshold Amount"), it being understood that once the Seller's Threshold Amount is
exceeded, the Purchaser Indemnified Parties shall be entitled to receive the aggregate of all such claims from the first dollar of Losses. 

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Notwithstanding anything in this Agreement to the contrary, no Purchaser Indemnified Party shall be indemnified pursuant to Section 9.03(a)(i) or Section 9.03(a)(vii) if,
and to the extent that, the aggregate of all Losses of the Purchaser Indemnified Parties for which the Purchaser Indemnified Parties previously shall have received indemnification pursuant to
Section 9.03(a)(i) and/or Section 9.03(a)(vii), shall have exceeded $25,000,000. In addition, no claim may be made against Seller for indemnification pursuant to this
Section 9.03 with respect to any individual item of Loss, if such claim otherwise was raised (whether or not accepted) in connection with the Purchase Price adjustment procedures set forth in
Section 2.06. Notwithstanding anything in this Agreement to the contrary, no Purchaser Indemnified Party shall be indemnified pursuant to Section 9.03(a)(ix) for a breach of
Section 3.19(b) that is applicable to a specific policy year if, and to the extent that, the aggregate of all Losses of the Purchaser Indemnified Parties for which the Purchaser Indemnified
Parties previously shall have received indemnification pursuant to Section 9.03(a)(ix) relating to a breach of Section 3.19(b) with respect to such policy year shall have exceeded
$5,000,000. 

        (c)  Payments
by Seller pursuant to Section 7.01(a) and Section 9.03(a) shall be limited to the amount of any Loss that remains after deducting therefrom
(i) any Tax benefit to the Purchaser Indemnified Parties, (ii) any insurance proceeds and any indemnity, contribution or other similar payment actually recovered by the Purchaser
Indemnified Parties from any third party with respect thereto at the time the indemnification payment becomes due, and (iii) any reserves provided for the item in question in
the Closing Balance Sheet. A Tax benefit will be considered to be recognized by the Purchaser Indemnified Party for purposes of Section 7.01(a) and this Section 9.03 in the Tax period in
which the indemnity payment occurs, and the amount of the Tax benefit shall be determined by reference to the Purchaser Indemnified Party's actual tax rate, after any deduction or other allowances
reportable with respect to a payment hereunder, at the time such indemnity payment is made. For purposes of calculating the amount of any Losses incurred in connection with any breach by Seller of any
representation or warranty or breach or nonfulfillment by Seller of any covenant, any and all references to material or Material Adverse Effect shall be disregarded. 

        (d)  A
Purchaser Indemnified Party shall give Seller prompt written notice of any claim, assertion, event or proceeding by or in respect of a third party of which such
Purchaser Indemnified Party has knowledge concerning any Loss as to which such Purchaser Indemnified Party may request indemnification hereunder; provided, however, that the failure to give such
notice shall not relieve Seller from any liability or obligation pursuant to this Section 9.03 unless and only to the extent that Seller is prejudiced thereby. Seller shall have the right to
assume and, at the request of Purchaser shall have the obligation to assume, through counsel reasonably acceptable to Purchaser, the defense or settlement of any such claim or proceeding at its own
expense. If Seller elects or is required to assume the defense of any such claim or proceeding, the Purchaser Indemnified Party may participate in such defense, but in such case the expenses of such
Purchaser Indemnified Party shall be paid by such Purchaser Indemnified Party. A Purchaser Indemnified Party shall provide Seller with reasonable access to its records and personnel relating to any
such claim, assertion, event or proceeding during normal business hours and shall otherwise cooperate with Seller in the defense or settlement thereof, and Seller shall reimburse Purchaser Indemnified
Party for all its reasonable out-of-pocket expenses in connection therewith; provided, however, that neither a Purchaser Indemnified Party nor Seller shall be required pursuant
to this Section 9.03 to disclose any privileged information or any attorney work product. If Seller elects or is required to assume the defense of any such claim or proceeding, Purchaser
Indemnified Party shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability unless Seller consents in writing to such payment or unless a final judgment
from which no appeal may be taken by or on behalf of Seller is entered against such Purchaser Indemnified Party for such liability. If Seller shall fail to undertake any such defense, Purchaser
Indemnified Party shall have the right to undertake the defense or settlement thereof, at Seller's expense. Seller may not settle any such claim or demand without the prior written consent to such
settlement by Purchaser. 

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        (e)  Purchaser
hereby acknowledges and agrees that (except in the case of fraud or willful breach of any representation, warranty or covenant, in which case Purchaser
reserves any and all rights and remedies available to it) its sole and exclusive remedy with respect to any and all claims relating to the subject matter of this Agreement and the transactions
contemplated hereby shall be pursuant to the indemnification provisions set forth in Article VII and in this Article IX and specific performance as contemplated by Section 11.14.
In furtherance of the foregoing, Purchaser hereby waives, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action it may have against Seller or any of its
Affiliates arising under or based upon any Law (including, without limitation, any such rights, claims or causes of action arising under or based upon common law or otherwise) with respect to any and
all claims relating to the subject matter of this Agreement and the transactions contemplated hereby except as set forth in the preceding sentence (except in the case of fraud, in which case Purchaser
reserves any and all rights and remedies available to it). 

        (f)    Except
as expressly set forth in this Agreement, Seller is not making any representation, warranty, covenant or agreement with respect to the Shares, the business of ITI
or any other matter contained herein. Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on
the part of Purchaser, after the consummation of the purchase and sale of the Shares as contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby. 

        (g)  In
seeking to indemnity from a Seller Indemnified Party, a Purchaser Indemnified Party shall be entitled to use any and all information learned by Purchaser or any of
its Affiliates or representatives without regard to the provisions of the Community of Interest Agreement by and between Purchaser and Seller dated August 18, 2002 and the parties agree that to
the extent this Section 9.03(g) is inconsistent with the provisions of such Community of Interest Agreement, this Section 9.03(g) shall control. 

ARTICLE X  

TERMINATION AND WAIVER 

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

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

        (b)  by
either Seller or Purchaser, if the Closing shall not have occurred on or prior to November 30, 2002; provided,  however, that the right to terminate
this Agreement under this Section 10.01 shall not be available to any party whose failure to fulfill any
obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur prior to such date; or 

        (c)  by
either Seller or Purchaser, in the event of the issuance of a final, nonappealable Governmental Order restraining or prohibiting the transactions contemplated hereby;
or 

        (d)  by
Purchaser if, between the date hereof and the time scheduled for the Closing, Seller shall not have complied in all material respects with any material covenant or
agreement to be complied with by it and contained in this Agreement; or 

        (e)  by
Seller if, between the date hereof and the time scheduled for the Closing, Purchaser shall not have complied in all material respects with any material covenant or
agreement to be complied with by it and contained in this Agreement. 

40

   
        Section 10.02    Effect of Termination.    In the event of termination of this Agreement as provided in
Section 10.01, this Agreement shall forthwith become void and there shall be no further liability on the part of any party hereto (i) except as set forth in Section 5.02(b), and
Section 5.11(b), if applicable and Section 11.01 and Section 11.16, and (ii) nothing herein shall relieve either party from liability for any breach hereof. 

        Section 10.03    Waiver.    Either party hereto may (i) extend the time for the performance of any of
the obligations or other acts of the other party hereto, (ii) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered
pursuant hereto or (iii) waive compliance with any of the agreements of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party to be bound thereby. 

ARTICLE XI  

GENERAL PROVISIONS 

        Section 11.01    Expenses.    Except as otherwise specified in this Agreement, all costs and expenses,
including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid
by the party incurring such costs and expenses, whether or not the Closing shall have occurred. 

        Section 11.02    Notices.    All notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this
Section 11.02): 

        (a)  if
to Seller: 

Centerpulse
USA Holding Co.

3 East Greenway Plaza

Suite 1600

Houston, TX 77046-0391

Telecopy No.: (713) 561-6380

Attention: David Wise, Esq. 

with
copies to: 

Centerpulse Ltd.

Andreasstrasse 15

8052 Zurich

Switzerland

Telecopy No.: 011-41-1-306-96-97

Attention: Christian Stambach 

and

McDermott,
Will & Emery

50 Rockefeller Plaza, 11th Floor

New York, New York 10020-1605

Telecopy No.: (212) 547-5444

Attention: Spencer D. Klein, Esq.

41

 

        (b)  if
to Purchaser: 

Microvena
Corporation

1861 Buerkle Road,

White Bear Lake, MN 55110-5246

Attention: Paul Buckman, President and Chief Executive Officer

Facsimile: (651) 777-4962

and 

Microvena
Corporation

1861 Buerkle Road,

White Bear Lake, MN 55110-5246

Attention: Cecily Hines, Vice President and General Counsel

Facsimile: (651) 777-4962 

with
copies to: 

Oppenheimer
Wolff & Donnelly LLP

Plaza VII, 45 South Seventh Street, Suite 3300

Minneapolis, MN 55402-1609

Attention: Kevin Klemz, Esq.

Facsimile: (612) 607-7100 

and

Willkie
Farr & Gallagher

787 Seventh Avenue

New York, NY 10019

Attention: Steven J. Gartner, Esq.

Facsimile: (212) 728-8111 

        Section 11.03    Public Announcements.    No party to this Agreement shall make, or cause to be made, any press
release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party,
which such consent shall not be unreasonably withheld or delayed, and the parties shall cooperate as to the timing and contents of any such press release or public announcement. 

        Section 11.04    Headings.    The descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of this Agreement. 

        Section 11.05    Severability.    If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of
being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 

        Section 11.06    Entire Agreement.    This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, other than the Confidentiality Agreement, with respect to the subject matter
hereof. 

42

 

        Section 11.07    Assignment; Fulfillment of Obligations.    (a) This Agreement shall not be assigned
without the express written consent of Seller and Purchaser (which consent may be granted or withheld in the sole discretion of Seller and Purchaser), except that either party hereto may assign its
rights hereunder to a wholly owned subsidiary of such party and Purchaser may assign its rights hereunder to any Affiliate of Purchaser; provided,  however,
that any such assignment shall not relieve the assigning party of its obligations hereunder; and provided further that any assignment by
Purchaser or Seller hereunder to any of its wholly owned subsidiaries shall cease to be effective if such subsidiary ceases to be a wholly owned subsidiary of Purchaser or Seller, as the case may be. 

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

        Section 11.08    No Third Party Beneficiaries.    Except as set forth in Article IX relating to the
Seller Indemnified Parties or the Purchaser Indemnified Parties, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 

        Section 11.09    Amendment.    This Agreement may not be amended or modified except by an instrument in writing
signed by, or on behalf of, Seller and Purchaser. 

        Section 11.10    Governing Law.    This Agreement shall be governed by the laws of the State of New York. All
actions and proceedings arising out of or relating to this Agreement shall be heard and determined in any New York State or federal court sitting in the City of New York, County of New York, and the
parties hereto hereby irrevocably submit to the exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive any defense of an inconvenient forum to the maintenance of
any such action or proceeding. 

        Section 11.11    Counterparts.    This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 

        Section 11.12    Disclosure Schedule.    The parties hereto acknowledge that certain matters set forth in the
Disclosure Schedule are included for informational purposes only, notwithstanding the fact that, because they do not rise above applicable materiality thresholds or otherwise, they would not be
required to be set forth therein by the terms of this Agreement and that disclosure of such matters shall not be taken as an admission by Seller or any of its Affiliates that such disclosure is
required to be made under the terms of any provision of this Agreement and in no event shall the disclosure of such matters be deemed or interpreted to broaden or otherwise amplify the representations
and warranties contained in this Agreement. Disclosure of any fact or item in a section of the Disclosure Schedule shall be deemed to be disclosed with respect to any other section of the Disclosure
Schedule where the applicability of such disclosure to such other section of the Disclosure Schedule is obvious. 

        Section 11.13    Currency.    Unless otherwise specified in this Agreement, all references to currency,
monetary values and dollars set forth herein shall mean United States dollars and all payments hereunder shall be made in United States dollars. 

        Section 11.14    Specific Performance.    The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity. 

        Section 11.15    Waiver of Jury Trial.    Each of the parties hereto irrevocably and unconditionally waives
trial by jury in any legal action or proceeding relating to this Agreement or the transactions contemplated hereby and for any counterclaim therein. 

        Section 11.16    Centerpulse Guarantee.    Centerpulse hereby absolutely and unconditionally guaranties to
Purchaser, as and for its own debt, the prompt performance of each and all of Seller's obligations under this Agreement, in each case when and as the same shall become due and payable and/or
performable. 

[Signature
Page follows] 

43

        IN WITNESS WHEREOF, Seller, Purchaser and with respect to Section 11.16 only, Centerpulse, have caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized. 

	

 	
 	

CENTERPULSE USA HOLDING CO.
	

 	
 	

By:	

/s/  GABOR-PAUL ONDO      

	 	 	 	Name:	Gabor-Paul Ondo
	 	 	 	Title:	Sole Director
	

 	
 	

CENTERPULSE LTD. (as to Section 11.16 only)
	

 	
 	

By:	

/s/  M. LINK      

	 	 	 	Name:	Dr. M. Link
	 	 	 	Title:	CEO
	

 	
 	

By:	

/s/  URS KAMBER      

	 	 	 	Name:	U. Kamber
	 	 	 	Title:	CFO
	

 	
 	

MICROVENA CORPORATION
	

 	
 	

By:	

/s/  PAUL BUCKMAN      

	 	 	 	Name:	Paul Buckman
	 	 	 	Title:	President/CEO

 
 

Exhibit 1.01(a)    
  

Owned Intellectual Property  

INTRATHERAPEUTICS U.S. ISSUED PATENTS

July 2002  

	 
	 	Serial No./

Filing Date
	 	Patent No./

Issue Date
	 	Title

	1.	 	08/710,245

9/13/96	 	5,911,752

6/15/99	 	Method For Collapsing a Stent
	2.	 	07/827,031

1/24/92	 	5,246,445

9/21/93	 	Device for the Treatment of Constricted Ducts in Human Bodies
	3.	 	08/060,397

5/10/93	 	5,372,600

12/13 94	 	Stent Delivery Systems
	4.	 	09/049,486

3/27/98	 	6,132,460

10/17/00	 	Stent
	5.	 	09/069,347

4/29/98	 	6,132,461

10/17/00	 	Stent with dual support structure
	6.	 	09/545,810

4/7/00	 	6,358,274

3/19/02	 	Stent
	7.	 	09/404,418

9/23/99	 	6,254,631

7/3/01	 	Stent with enhanced friction
	8.	 	29/135,732

1/18/01	 	458,679

6/11/02	 	Handle for a medical device delivery system
	9.	 	N/A	 	4,665,906

519/87	 	Medical Devices incorporating Sim Alloy Elements
	10.	 	N/A	 	5,067,957

11/26/91	 	Method of inserting medical devices incorporating Sim Alloy Elements
	11.	 	N/A	 	5,190,546

3/2/93	 	Medical Devices Incorporating Sim Alloy elements
	12.	 	N/A	 	5,597,378

1/28/97	 	Medical Devices Incorporating Sim Alloy elements
	13.	 	08/845,780

4/25/97	 	5,776,142

7/7/98	 	Controllable Stent Delivery System and Method
	14.	 	08/843,793

4/21/97	 	5,782,838

7/21/98	 	Cytoscope Delivery System
	15.	 	09/169,246

10/9/98	 	6,019,779

2/1/00	 	Multi-Filar Coil Medical Stent

	16.	 	09/551,479

4/18/00	 	6,371,953

4/16/02	 	Temporary Stent System
	17.	 	08/803,324

2/21/97	 	6,371,979

4/16/02	 	Vascular and Coronary Stents
	18.	 	940,523

9/4/92	 	5,437,288

8/1/95	 	Flexible Catyheter Guidewire
	19.	 	329,691

10/26/94	 	5,573,520

11/12/96	 	Flexible Tubular Device For Use in Medical Applications
	20.	 	08/455,331

5/31/95	 	5,741,429

4/21/98	 	Flexible Tubular Device For Use in Medical Applications
	21.	 	08/645,607	 	6,027,863

2/22/00	 	Method For Manufacturing A Tubular Medical Devise (As Amended)
	22.	 	08/16,666

3/13/97	 	5,815,904

10/6/98	 	Method for Making A Stent
	23.	 	08/985,810

12/05/97	 	6,033,394

3/7/00	 	Catheter Support Structure
	24.	 	09/146,933

9/3/98	 	6,022,343

2/8/00	 	Bridged Coil Catheter Support Structure
	25.	 	08/472,464

6/7/95	 	5,964,771

10/12/99	 	Temporary Stent System
	26.	 	09/136,249

8/19/98	 	6,090,115

7/18/00	 	Temporary Stent System
	27.	 	08/720,946

10/4/96	 	5,891,057

4/6/99	 	Carotid Artery Angioplasty Guiding System
	28.	 	09/255,836

2/23/99	 	6,086,548

7/11/00	 	Carotid Artery Angioplasty Guiding System and Method
	29.	 	09/049,244

3/27/98	 	6,107,004

8/22/00	 	Method For Making a Tubular Stent For Use in Medical Applications
	30.	 	09/085,834

12/5/97	 	6,110,164

8/29/00	 	Guideless Catheter
	31.	 	09/185,769

11/3/98	 	6,273,876

8/14/01	 	Catheter segments having circumferential supports with axial projection
	32.	 	09/185,211

11/3/98	 	6,290,692

9/18/01	 	Catheter support structure
	33.	 	09/109,554

7/2/98	 	6,203,732

3/20/01	 	Method for manufacturing intraluminal device

 
 

INTRATHERAPEUTICS U.S. PATENT STATUS REPORT
  July 2002    
  

	M&G

File No.
	 	Serial No./

Filing Date
	 	Continuing Data
	 	Title
	 	Current

Status
	 	Summary

	11576.17-US-C1	 	09/545,246

4/7/00	 	CON of 09/069,347

(M&G 11576.17-US-11)	 	Stent with Dual Support Structure	 	Response to Office Action due 8/6/02	 	A stent with cells defined by undulating double struts. Also, a stent with cells defined by 4 double struts. Further, a stent with expandable cells defined at least in part by double struts.
	

11576.17-US-12	
 	

09/765,725

1/18/01	
 	

CIP of 09/545,810

(M&G 11576.17-US-C2)	
 	

Stent	
 	

Filed Amendment 3/5/02; awaiting response from Patent Office	
 	

Stent with undulating struts having longitudinal segments with tapered widths. Also, a stent with taper of strut segments selected to control length of stent upon expansion. Further, no shrink stent.
	

11576.38-US-C1	
 	

09/879,425

6/12/01	
 	

 	
 	

Stent with Enhanced Friction	
 	

Awaiting Office Action	
 	

Stent with roughened inner surface
	

11576.50-US-01	
 	

09/765,721

1/18/01	
 	

 	
 	

Grip For Stent Delivery System	
 	

Awaiting first Office Action	
 	

Stent delivery system with rotatable handle. Also, claims for ergonomic handle.
	

11576.51-US-01	
 	

09/765,719

1/18/01	
 	

 	
 	

Stent Delivery System with Spacer Member	
 	

Awaiting first Office Action	
 	

Delivery system with inner and outer catheters radially spaced by a spacer member.
	

11576.51-US-11	
 	

09/954,763

9/17/01	
 	

 	
 	

Catheter System With Spacer Member	
 	

Awaiting first Office Action	
 	

 
	
 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 

	

11576.51-US-01

(formerly 11576.50-US-11)	
 	

09/795,047

2/26/01	
 	

 	
 	

Implant Delivery System With Interlock	
 	

Filed Response to Restriction Requirement 4/26/02; awaiting response from Patent Office	
 	

A stent delivery system with interlock structure within 5 millimeters of proximal end of stent. Also, delivery system with male interlock structures at end of stent.
	

11576.55-US-11	
 	

09/954,555

9/17/01	
 	

 	
 	

Implant Delivery System With Interlock	
 	

Awaiting first Office Action	
 	

A stent delivery system with claims specifying that interlock is within 5 mm of cell defining portion.
	

11576.62-US-01	
 	

Awaiting

5/30/02	
 	

 	
 	

Microcatheter	
 	

Awaiting first Office Action	
 	

 
	

SBI-082	
 	

09/991,235

10/22/01	
 	

 	
 	

Stent Coatings Containing HMG-CoA Reductase Inhibitors	
 	

 	
 	

 
	

SBI-095	
 	

09/991,235

10/22/01	
 	

 	
 	

Liquid and Low Melting Coatings for Stents (Cross-Reference to Related Applications)	
 	

 	
 	

Continuation-in-part

of Stent Coatings Containing HMG-CoA Reductase Inhibitors.
	

11576.29-US-F1	
 	

08/827,672

4/10/97	
 	

FWC of 08/394,799

M&G 11576.29-US-01)

  

CPA filed 2/4/98	
 	

Hollow Stent	
 	

Status Inquiry filed 9/27/99; Filed Communication to the Group Director 6/8/00.	
 	

A coil stent with the member forming the coil made of a hollow tube arranged in a helical pattern.
	

11576.33-US-01	
 	

09/067,665

4/28/98	
 	

 	
 	

Braided Stent	
 	

Response to Office Action due 6/22/02	
 	

A stent including a bundle of interwoven strands that are helically wound to form an elongate coil
	
 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 

	

11576.56-US-01	
 	

09/955,351

9/17/01	
 	

 	
 	

Stent with Offset Cell Geometry	
 	

Awaiting first Office Action	
 	

A stent with circumferential offset members connecting the peaks of axially adjacent supports.
	

11576.41-US-01	
 	

09/570,659

5/15/00	
 	

 	
 	

Emboli Filter	
 	

Response to Office Action due 6/15/02	
 	

Emboli filter with actuator having a plurality of elastic loops
	

11576.43-US-C1	
 	

09/580,766

5/30/0	
 	

CON of 09/255,836

M&G 11576.43-US-D1	
 	

Carotid Artery Angioplasty Guiding System and Method	
 	

Awaiting Office Action	
 	

 
	

11576.52-US-01	
 	

09/793,668

2/26/01	
 	

 	
 	

Stent Retention Mechanism	
 	

Filed Response to Restriction Requirement 5/10/02; awaiting response from Patent Office	
 	

Delivery system with balloon having protruding stent retainer

Trademarks for Sulzer IntraTherapeutics Inc.  

        Listed below are the current trademarks and their registration status as of: April 1. 2002. 

	US Version	 	OUS Version
	IntraCoil® self-expanding peripheral stent	 	IntraCoil® self-expanding peripheral stent
	IntraStent® biliary endoprosthesis	 	IntraStent® peripheral endoprosthesis
	IntraStent® LP biliary endoprosthesis	 	IntraStent® LP peripheral endoprosthesis
	IntraStent® DoubleStrutTM biliary endoprosthesis	 	IntraStent® DoubleStrutTM peripheral endoprosthesis
	IntraStent® DoubleStrutTM LD biliary endoprosthesis	 	IntraStent® DoubleStrutTM LD peripheral endoprosthesis
	IntraStent® MegaTM LD biliary endoprosthesis	 	IntraStent® MegaTM LD peripheral endoprosthesis
	IntraStent® MaxTM LD biliary endoprosthesis	 	IntraStent® MaxTM LD peripheral endoprosthesis
	IntraStent® DoubleStrutTM XS biliary endoprosthesis	 	IntraStent® DoubleStrutTM XS peripheral endoprosthesis
	IntraStent® DoubleStrutTM ParaMountTM premounted biliary endoprosthesis	 	IntraStent® DoubleStrutTM ParaMountTM premounted stent delivery system
	IntraStent® DoubleStrutTM ParaMountTM XS premounted biliary endoprosthesis	 	IntraStent® DoubleStrutTM ParaMountTM XS premounted stent delivery system
	Micro-GripTM internal finish	 	Micro-GripTM internal finish
	Protégé TM self-expanding nitinol stent, biliary system	 	Protégé TM self-expanding nitinol stent
	StarPortTM delivery technology	 	StarPortTM delivery technology
	TransTaperTM cell design	 	TransTaperTM cell design
	EX.P.R.T. TM exact placement release technology	 	EX.P.R.T. TM exact placement release technology
	IntraTherapeutics®*	 	IntraTherapeutics®*

*NOTE:    IntraTherapeutics®
is also a registered trademark of Sulzer IntraTherapeutics Inc. and should be followed by the ® when not used in the full ITI Logo
format (including the "bug") or if not followed by ", Inc.". 

QuickLinks

Exhibit 4.24

TABLE OF CONTENTS

Exhibit 1.01(a)

INTRATHERAPEUTICS U.S. PATENT STATUS REPORT July 2002QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.25    
  

SHARE AND ASSET PURCHASE AGREEMENT  

Among  

 CENTERPULSE (UK) HOLDINGS LTD.,  

 CENTERPULSE USA HOLDING CO.,  

 CENTERPULSE GERMANY HOLDING GmbH,  

 CENTERPULSE AG  

 and  

 TERUMO CORPORATION  

 Dated as of October 3, 2002  

  

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	ARTICLE I	 	DEFINITIONS	 	1
	 	Section 1.01	 	Certain Defined Terms	 	1
	 	Section 1.02	 	Other Defined Terms	 	5
	 	Section 1.03	 	Miscellaneous	 	6
	ARTICLE II	 	PURCHASE AND SALE	 	6
	 	Section 2.01	 	Purchase and Sale of the Shares	 	6
	 	Section 2.02	 	Purchase and Sale of the Assets	 	6
	 	Section 2.03	 	Purchase Price; Purchase Price Allocation	 	6
	 	Section 2.04	 	Closing	 	6
	 	Section 2.05	 	Foreign Closings	 	7
	 	Section 2.06	 	Closing Deliveries by Seller	 	7
	 	Section 2.07	 	Closing Deliveries by Purchaser	 	8
	 	Section 2.08	 	Adjustment of Purchase Price	 	8
	ARTICLE III	 	REPRESENTATIONS AND WARRANTIES OF SELLER	 	10
	 	Section 3.01	 	Incorporation and Authority of Seller	 	10
	 	Section 3.02	 	Incorporation of the Target Companies	 	10
	 	Section 3.03	 	Share Capital of Target Companies; No Subsidiaries	 	10
	 	Section 3.04	 	Sufficiency of Assets	 	11
	 	Section 3.05	 	No Conflict	 	11
	 	Section 3.06	 	Consents and Approvals	 	11
	 	Section 3.07	 	Financial Information	 	11
	 	Section 3.08	 	Absence of Undisclosed Liabilities	 	11
	 	Section 3.09	 	Absence of Certain Changes or Events	 	12
	 	Section 3.10	 	Fair Trading	 	12
	 	Section 3.11	 	Litigation	 	13
	 	Section 3.12	 	Compliance with Laws; Certain Regulatory Matters	 	13
	 	Section 3.13	 	Licenses and Permits	 	13
	 	Section 3.14	 	Environmental Matters	 	14
	 	Section 3.15	 	Books and Records	 	14
	 	Section 3.16	 	Grants	 	14
	 	Section 3.17	 	Condition and Use of Fixed Assets	 	14
	 	Section 3.18	 	Intellectual Property Rights	 	14
	 	Section 3.19	 	Material Contracts	 	15
	 	Section 3.20	 	Insurances	 	17
	 	Section 3.21	 	Real Property	 	17

i

 

	 	Section 3.22	 	Employees and Workers	 	17
	 	Section 3.23	 	Employee Benefit Matters—U.K.	 	18
	 	Section 3.24	 	Employee Benefit Matters—U.S.	 	18
	 	Section 3.25	 	Taxes	 	19
	 	Section 3.26	 	Solvency	 	19
	 	Section 3.27	 	Brokers	 	19
	 	Section 3.28	 	No Implied Representations and Warranties	 	19
	 	Section 3.29	 	JLL Contract	 	20
	 	Section 3.30	 	Inventory	 	20
	 	Section 3.31	 	Product Liability	 	20
	 	Section 3.32	 	Notice of Developments	 	20
	 	Section 3.33	 	Computer Systems	 	21
	ARTICLE IV	 	REPRESENTATIONS AND WARRANTIES OF PURCHASER	 	21
	 	Section 4.01	 	Incorporation and Authority of Purchaser	 	21
	 	Section 4.02	 	No Conflict	 	21
	 	Section 4.03	 	Consents and Approvals	 	21
	 	Section 4.04	 	Litigation	 	21
	 	Section 4.05	 	Investment Purpose	 	22
	 	Section 4.06	 	Financing	 	22
	 	Section 4.07	 	Brokers	 	22
	ARTICLE V	 	ADDITIONAL AGREEMENTS	 	22
	 	Section 5.01	 	Conduct of Business Prior to the Closing	 	22
	 	Section 5.02	 	Investigation; Confidentiality	 	23
	 	Section 5.03	 	Access to Information	 	24
	 	Section 5.04	 	Books and Records	 	25
	 	Section 5.05	 	Satisfaction of Conditions Precedent; Regulatory and Other Authorizations; Notices and Consents	 	25
	 	Section 5.06	 	Notification to Governmental Authorities	 	26
	 	Section 5.07	 	Non-Competition	 	26
	 	Section 5.08	 	Intercompany Arrangements	 	27
	 	Section 5.09	 	Insurance Coverage	 	27
	 	Section 5.10	 	Transition Services	 	27
	 	Section 5.11	 	Continued Grafts Employees	 	27
	 	Section 5.12	 	Further Action	 	27
	 	Section 5.13	 	German Newco	 	27
	ARTICLE VI	 	EMPLOYEE MATTERS	 	28
	 	Section 6.01	 	Continuation of Benefits—Target Companies	 	28
	 	Section 6.02	 	Employment of Continued Grafts Employees	 	28

ii

 

	 	Section 6.03	 	Cash Compensation	 	28
	 	Section 6.04	 	Severance	 	28
	 	Section 6.05	 	Pension Schemes	 	28
	 	Section 6.06	 	401(k) Plan	 	28
	 	Section 6.07	 	Purchaser Plans	 	29
	 	Section 6.08	 	Retention Bonuses	 	29
	ARTICLE VII	 	CONDITIONS TO CLOSING	 	29
	 	Section 7.01	 	Conditions to Obligations of Seller	 	29
	 	Section 7.02	 	Conditions to Obligations of Purchaser	 	30
	ARTICLE VIII	 	INDEMNIFICATION	 	30
	 	Section 8.01	 	Survival of Representations and Warranties	 	30
	 	Section 8.02	 	Indemnification by Purchaser	 	30
	 	Section 8.03	 	Indemnification by Seller	 	32
	ARTICLE IX	 	TERMINATION AND WAIVER	 	34
	 	Section 9.01	 	Termination	 	34
	 	Section 9.02	 	Effect of Termination	 	34
	 	Section 9.03	 	Waiver	 	35
	ARTICLE X	 	GENERAL PROVISIONS	 	35
	 	Section 10.01	 	Expense	 	35
	 	Section 10.02	 	Notices	 	35
	 	Section 10.03	 	Public Announcements	 	36
	 	Section 10.04	 	Headings	 	36
	 	Section 10.05	 	Severability	 	36
	 	Section 10.06	 	Entire Agreement	 	36
	 	Section 10.07	 	Assignment; Fulfillment of Obligations	 	36
	 	Section 10.08	 	No Third Party Beneficiaries	 	37
	 	Section 10.09	 	Amendment	 	37
	 	Section 10.10	 	Rights Cumulative and Other Matters	 	37
	 	Section 10.11	 	Governing Law	 	37
	 	Section 10.12	 	Counterparts	 	37
	 	Section 10.13	 	Disclosure Letter	 	37
	 	Section 10.14	 	Currency	 	37
	 	Section 10.15	 	Specific Performance	 	37

iii

        SHARE AND ASSET PURCHASE AGREEMENT, dated as of October 3, 2002, among CENTERPULSE (U.K.) HOLDING LIMITED, a company organized under the laws of Scotland
("Seller"), CENTERPULSE USA HOLDING CO., a Delaware corporation ("CUH"), CENTERPULSE GERMANY HOLDING
GmbH, a company organized under the laws of Germany ("CGHG") CENTERPULSE AG, a company organized under the laws of Switzerland, and TERUMO CORPORATION,
a corporation organized under the laws of Japan ("Purchaser"). 

 
 

W I T N E S S E T H:    
  

        WHEREAS, Seller, through its wholly owned subsidiary, affiliated companies and related companies, agencies and distributors is engaged in the design, manufacture,
marketing, sale and distribution of vascular graft products (the "Grafts Business"); 

        WHEREAS,
Seller wishes to sell to Purchaser, and Purchaser wishes to purchase from Seller, the Grafts Business, upon the terms and conditions set forth herein; 

        WHEREAS,
as part of the sale of the Grafts Business by Seller and the purchase of the Grafts Business by Purchaser hereunder, Seller, CUH and CGHG will sell to Purchaser the entire
issued share capital of or the outstanding shares of capital stock, as the case may be (collectively, the "Shares") of (i) Vascutek Limited, a
company incorporated under the laws of Scotland ("VAK"), (ii) Sulzer Vascutek USA Inc., a Delaware corporation
("VAKUS"), (iii) a new company organized under the laws of Germany (to be incorporated following the execution of this Agreement and prior to
Closing) and which is to own that part of the Grafts Business which at the date of this Agreement is owned by Sulzer Cardiovascular GmbH ("CVD") (VAKUS
and CVD being the "Affiliated Companies" and, together with VAK, the "Target Companies"); and 

        WHEREAS,
as part of the sale of the Grafts Business by Seller and the purchase of the Grafts Business by Purchaser hereunder, Seller will cause to be sold to Purchaser certain assets of
the Grafts Business held by certain related companies set forth on the Schedule of Related Companies hereto (the "Related Companies"). 

        NOW,
THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, Seller and Purchaser hereby agree as follows: 

 
 

ARTICLE I    
    
    DEFINITIONS    

        Section 1.01    Certain Defined Terms.    As used in this Agreement, the following terms shall have the
following meanings: 

        "Action" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. 

        "Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified Person. 

        "Agreement" or "this Agreement" means this Share and Asset Purchase Agreement, dated as of
October 3, 2002, among Seller, CUH, CGHG, Centerpulse AG, and Purchaser (including the Schedules, the Tax Deed and the Disclosure Letter) and all amendments hereto made in accordance with the
provisions hereof. 

        "Balance Sheet Date" means the date of the Reference Balance Sheet. 

        "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed
in New York, New York, Tokyo, Japan or London, England. 

 

        "Bylaws" means the bylaws of any corporation organized under the law of any State of the United States of America and any equivalent
document of any corporation or entity organized under the laws of another jurisdiction, as amended or restated through the date hereof or the Closing Date, as the case may be. 

        "Charter" means the Certificate of Incorporation or Formation, Articles of Incorporation or Organization or other organizational document
of a corporation or limited liability company organized under the laws of any State of the United States of America and any equivalent document of a corporation, limited liability company or other
similar entity organized under the laws of another jurisdiction, as amended or restated through the date hereof or the Closing Date, as the case may be. 

        "Clinical Application Research Studies" means post-approval clinical studies of market-released products that do not require
an Investigational Device Exemption from the FDA. 

        "Closing Balance Sheet" means the Grafts Business balance sheet (including the related notes and schedules thereto), to be prepared
pursuant to Section 2.08(a) and to be dated as of the Closing Date. 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Continued Grafts Employees" means employees of a Related Company who service the Grafts Business and who are to be employed by Purchaser
or its designee as of the Closing, all of whom are listed on Section 6.02 of the Disclosure Letter. 

        "Continuing Directors" means those directors of the Target Companies who are remaining on the relevant board of directors after the
Closing Date. 

        "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by contract or credit agreement or otherwise. 

        "Disclosure Letter" means the First Disclosure Letter or the Second Disclosure Letter, as the case may be. 

        "Dollars" means U.S. Dollars. 

        "Encumbrance" means any security interest, pledge, mortgage, lien or encumbrance. 

        "Environmental Law" means any Law that regulates, establishes standards or requirements, or concerns liability with respect to the
environment, natural resources, safety, or health of humans or other organisms, including with respect to the manufacture, distribution in commerce and use of Hazardous Substances. 

        "ERISA" means the United States Employee Retirement Income Security Act of 1974, as amended. 

        "FDA" means the United States Food and Drug Administration. 

        "First Disclosure Letter" means the disclosure letter from Seller to Purchaser dated the date of this Agreement. 

        "German Sale Agreement" means the agreement to be entered into between CGHG and Purchaser (or such other person as Purchaser shall
nominate) in relation to the sale to Purchaser or its designee of the shares of CVD. 

        "Governmental Authority" means any government, governmental, regulatory or administrative authority, agency or commission or any court,
tribunal, or judicial, quasi-judicial or arbitral body. 

2

 

        "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority. 

        "Hazardous Substance" means any toxic or hazardous substance or wastes, petroleum or petroleum products, asbestos or other pollutants, as
defined under applicable Environmental Laws. 

        "Indebtedness" means, with respect to any Person, (a) all indebtedness of such Person, whether or not contingent, for borrowed
money, (b) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (c) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by such Person, (d) all obligations of such Person as lessee under leases that have been or should be, in accordance
with U.K. GAAP, recorded as capital leases, (e) all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities and (f) all Indebtedness
of others referred to in clauses (a) through (e) above guaranteed directly or indirectly by such Person. 

        "Intellectual Property" means (a) patents, patent registrations and patent applications and all rights therein,
(b) trademarks, service marks, trade dress, logos, whether or not registered, and registrations and applications for registration thereof, (c) copyrights (registered or otherwise) and
registrations and applications for registration thereof and (d) trade secrets and confidential, technical or business information including know-how, manufacturing and production
processes and techniques. 

        "JLL Contract" means the distribution agreement between VAK and Japan Lifeline Co. Ltd. 

        "Key Employees" means the individuals listed on Section 3.22(c) of the Disclosure Letter. 

        "Knowledge" means, with respect to Seller, the actual knowledge of Roshan Maini or Frank Carroll, and in addition with respect to
Section 3.18 of this Agreement only, Timothy Ashton and Kenneth Barrow. 

        "Law" means any federal, state, canton, provincial, local or national statute, law, ordinance, regulation, rule, code, order or other
requirement or rule of law. 

        "Material Adverse Effect" means any change in or effect which individually or in the aggregate with all other such changes and effects, is
materially adverse to the financial condition or to the results of operations of the Grafts Business taken as a whole, except for any such changes or effects resulting from (a) this Agreement
or the transactions contemplated hereby or the announcement thereof, (b) changes in general economic or political conditions or the securities markets or (c) changes, after the date of
this Agreement, in conditions generally applicable to Persons engaged in the design, manufacture, marketing, sale or distribution of medical devices of the nature designed, manufactured, marketed,
sold and distributed by the Target Companies and the Related Companies, including, without limitation, (i) changes in Laws (or interpretations thereof by any Governmental Authority) generally
applicable to such Persons and (ii) changes in U.K. GAAP or in international accounting standards. 

        "Medical Product Regulatory Authority" means any Governmental Authority that is concerned principally with the safety, efficacy,
reliability or manufacture of medical products. 

        "Nominated Account" means an account or accounts notified to Purchaser by Seller at least two Business Days prior to the Closing Date. 

        "Owned Intellectual Property" means all Intellectual Property in and to which any Target Company holds, or has a right to hold, right,
title and interest. 

        "Owned Real Property" means the real property owned by any Target Company, together with all buildings and other structures, facilities or
improvements currently or hereafter located thereon. 

        "Pension Schedule" means the pensions schedule attached to and forming part of this Agreement. 

3

 

        "Permitted Encumbrances" means (a) liens for Taxes and assessments not yet payable, (b) liens for Taxes, assessments and
charges and other claims, the validity of which is being contested in good faith, (c) imperfections of title, liens, security interests and other encumbrances the existence of which,
individually and in the aggregate, do not interfere with the current use of the property encumbered thereby, (d) inchoate mechanics', materialmen's and similar liens for construction in
progress and (e) workmen's, repairmen's, warehousemen's and carriers' liens arising in the ordinary course of business. 

        "Person" means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization
or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. 

        "Pre-Closing Taxable Period" means (i) any Taxable period ending on or before the Closing Date and (ii) with
respect to any Straddle Period, the portion of such Taxable period that begins before the Closing Date and that includes the Closing Date. 

        "Second Disclosure Letter" means the disclosure letter from Seller to Purchaser to be dated the Closing Date. 

        "Seller Warranties" means the warranties set out in Article III of this Agreement. 

        "Straddle Period" means any Taxable period beginning before and ending after the Closing Date. 

        "Sulzer Orthopedics Settlement Arrangement" means the Class Action Settlement Agreement dated March 13, 2002 by and among Sulzer
Orthopedics, Inc., Sulzer Medica AG, Sulzer AG and Class Counsel on behalf of Class Representatives in re: Sulzer Hip Prosthesis and Knee Prosthesis Liability Litigation MDL Docket
No. 01-CV-9000 (MDL No. 1401), as the same may be amended from time to time. 

        "Tax" or "Taxes" means (a) all taxes, charges, fees, levies, duties, imposts or
other similar assessments, including income, capital gains, gross receipts, ad valorem, excise, real property, personal property, windfall profit, sales, use, transfer, stamp, licensing, withholding,
employment, payroll, minimum, estimated and franchise taxes imposed by any federal, state, canton, provincial, local or national government, or any subdivision, agency or other similar Person of any
such government and (b) any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any such tax or taxes. 

        "Tax Deed" means the deed of indemnity substantially in the form attached hereto relating to Tax liabilities of the Target Companies. 

        "Tax Return" means any form, return or report of or relating to Taxes. 

        "Taxing Authority" means any federal, state, canton, provincial, local, national or other Governmental Authority of any jurisdiction
having the power to impose a Tax or Taxes. 

        "U.K. GAAP" means United Kingdom generally accepted accounting principles and practices as in effect from time to time and applied
consistently throughout the periods involved. 

        "Working Capital" of the Grafts Business as of any date means the Grafts Business' current assets minus the Grafts Business' current
liabilities (such current assets and current liabilities as indicated on the Reference Balance Sheet provided in Section 1.01 of the Disclosure Letter) and not including any accruals for
P.A.Y.E. or N.I.C. 

4

 

        Section 1.02    Other Defined Terms.    The following terms shall have the meanings defined for such terms in
the Sections set forth below: 

	Term:
 
	 	Section:

	401(k) Plan Participants	 	Section 6.06
	Affiliated Companies	 	Recitals
	Base Purchase Price	 	Section 2.03
	CGHG	 	Recitals
	Closing	 	Section 2.04
	Closing Date	 	Section 2.04
	Competitive Business	 	Section 5.07
	Confidentiality Agreement	 	Section 5.02
	CUH	 	Recitals
	CVD	 	Recitals
	Designated Amount	 	Section 8.03
	Diversified Company	 	Section 5.07
	Foreign Agreements	 	Section 2.05
	Foreign Closing	 	Section 2.05
	Government Antitrust Authority	 	Section 5.05
	Grafts Business	 	Recitals
	Grafts Business Financial Statements	 	Section 3.087
	Independent Accounting Firm	 	Section 2.08
	Lehman	 	Section 3.27
	Losses	 	Section 8.02
	Material Contracts	 	Section 3.19
	Non-Competition Period	 	Section 5.07
	Purchase Price	 	Section 2.03
	Purchaser	 	Preamble
	Purchaser Indemnified Party	 	Section 8.03
	Purchaser Plan	 	Section 6.06
	Purchaser Transition Services Agreement	 	Section 5.10
	Purchaser's Accountants	 	Section 2.08
	Reference Balance Sheet	 	Section 3.08
	Related Assets and Liabilities	 	Section 2.02
	Related Companies	 	Recitals
	Seller	 	Preamble
	Seller 401(k) Plan	 	Section 6.06
	Seller Indemnified Party	 	Section 8.02
	Seller Transition Services Agreement	 	Section 5.10
	Seller's Accountants	 	Section 2.08
	Seller's Threshold Amount	 	Section 8.03
	Selling Entities	 	Section 3.01
	Shares	 	Recitals
	Target Companies	 	Recitals
	Treaty	 	Section 3.10
	VAK	 	Recitals
	VAKUS	 	Recitals
	VAKUS Benefit Plans	 	Section 3.24

5

 

        Section 1.03    Miscellaneous.    In this Agreement, where the context admits: 

        (a)  every
reference to a particular statutory provision or other Law shall be construed also as a reference to all other Laws made under the Law referred to, and to all such
Laws as amended, re-enacted, consolidated or replaced or as their application or interpretation is affected by other Laws from time to time, and whether before or after the date of this
Agreement; 

        (b)  references
to clauses, schedules and exhibits are references to clauses of and schedules and exhibits to this Agreement, references to paragraphs are unless otherwise
stated, references to paragraphs of the letter in which the reference appears, and references to this Agreement include the schedules and exhibits; 

        (c)  references
to the singular shall include the plural and vice versa and references to the masculine, the feminine and the neuter shall include each other such gender; and 

        (d)  general
words shall not be given a restrictive meaning because they are followed by words which are particular examples of the acts, matters or things covered by the
general words and the word "including" shall be construed without limitation. 

 
 

ARTICLE II    
    
    PURCHASE AND SALE    

        Section 2.01    Purchase and Sale of the Shares.    Upon the terms and subject to the conditions of this
Agreement, at the Closing, Seller, CUH and CGHG shall, and shall cause the Persons who own of record any of the Shares to, sell, assign, transfer, convey and deliver the Shares to Purchaser, free and
clear of all Encumbrances, and with full title guarantee, and Purchaser shall purchase the Shares. 

        Section 2.02    Purchase and Sale of the Assets.    Upon the terms and subject to the conditions of this
Agreement, at the Closing, Seller shall cause the Related Companies to sell, assign, transfer, convey and deliver the assets and liabilities of the Grafts Business held by the Related Companies and to
be set forth on the Closing Balance Sheet hereto (collectively, the "Related Assets and Liabilities") to Purchaser or its designee, with the benefit of
full title guarantee in respect of owned assets, and Purchaser or its designee shall purchase and assume the Related Assets and Liabilities. Other than the Related Assets and Liabilities, no assets or
liabilities of the Related Companies are being sold, assigned, transferred or conveyed by the Related Companies pursuant to this Agreement, and
Purchaser or its designee is not purchasing or assuming any assets or liabilities other than the Related Assets and Liabilities. 

        Section 2.03    Purchase Price; Purchase Price Allocation.    (a) The aggregate purchase price for the
Shares and the Related Assets and Liabilities shall be $170,000,000 in cash (the "Base Purchase Price"), subject to adjustment as provided in
Section 2.08 (the Base Purchase Price, as so adjusted, being the "Purchase Price"). 

        (b)  The
Purchase Price shall be allocated among the Shares and the Related Assets and Liabilities in accordance with Schedule 2.03. 

        Section 2.04    Closing.    Upon the terms and subject to the conditions of this Agreement, the sale and
purchase of the Shares shall take place at a closing (the "Closing") to be held at the offices of McDermott, Will & Emery, 7 Bishopsgate, London,
EC2N 3AR, England at 10:00 A.M. London time on the later of (i) November 15, 2002 and (ii) the third Business Day following the satisfaction or waiver of all conditions to
the obligations of the parties set forth in Article VII, or at such other place or at such other time or on such other date as Seller and Purchaser may mutually agree upon in writing (the day
on which the Closing takes place being the "Closing Date"). 

6

 

        Section 2.05    Foreign Closings.    Except as may be otherwise mutually agreed by the parties, to the extent
that any closing of the sale and purchase of any of the Shares or any of the Related Assets and Liabilities is required to occur at a place outside of the United Kingdom (whether by reason of notarial
deed or otherwise), such a closing (a "Foreign Closing") shall take place, and the executed closing documents shall be held in escrow by the agent
mutually appointed by Seller and Purchaser, on or prior to the Closing (but not prior to the satisfaction of all of the conditions set forth in Article VII relating to such Foreign Closing and
the conditions contained in the Foreign Agreements (as defined below)) at such times and places as may be agreed by Seller and Purchaser. The agent shall hold all such executed documents until such
time as it is advised in a writing signed by Seller and Purchaser that the transactions contemplated hereby have been consummated or terminated. Upon consummation of the transactions contemplated
hereby, the agent shall deliver to each party one fully executed set of the documents that were being held in escrow by the agent. If the transactions contemplated hereby are terminated, the agent
shall deliver to each party the documents executed by such party that were held in escrow by the agent. 

        In
certain instances the sellers of certain of the Shares and the Related Assets and Liabilities will execute with Purchaser a separate acquisition agreement as may be required with
respect to the Shares and the Related Assets and Liabilities (the "Foreign Agreements"). The Foreign Agreements are intended to serve only as the
operative documents of transfer, and such Foreign Agreements do not alter, modify or amend in any way any of the terms or provisions of this Agreement, including, without limitation, terms and
provisions relating to representations and warranties and indemnification. To the
extent that any conflict exists between any of the terms of any of the Foreign Agreements and this Agreement, the terms of this Agreement shall control. 

        Section 2.06    Closing Deliveries by Seller.    At the Closing, Seller shall deliver or cause to be delivered
to Purchaser: 

        (a)  duly
executed stock transfer forms in relation to the VAK Shares in favor of Purchaser (or to Purchaser's order) together with the relevant share certificates (or an
indemnity therefor in terms reasonably agreeable to Purchaser); 

        (b)  certificates
representing the VAKUS Shares duly endorsed in blank or accompanied by stock powers duly executed in blank; 

        (c)  certificates
representing the CVD Shares duly endorsed in favor of Purchaser or such other documents as may be required to transfer the CVD shares to Purchaser (or as it
shall direct); 

        (d)  the
Tax Deed duly executed by Seller; 

        (e)  the
certificates and other documents required to be delivered pursuant to Section 7.02; 

        (f)    the
resignations of the directors of the Target Companies (except for the Continuing Directors); 

        (g)  the
German Sale Agreement, duly notarized; 

        (h)  the
Related Assets and Liabilities, and/or those documents required in order to effect the transfer and assignment of the Related Assets and Liabilities to Purchaser, in
a form agreed, duly executed by the applicable Selling Entity; and including where applicable the Continued Grafts Employees. 

        (i)    the
Disclosure Letter in the agreed form initialed by or on behalf of the Selling Entities. 

7

 

        Section 2.07    Closing Deliveries by Purchaser.    At the Closing, Purchaser shall deliver to Seller: 

        (a)  the
Base Purchase Price by wire transfer of immediately available funds to the Nominated Account; 

        (b)  the
certificates and other documents required to be delivered pursuant to Section 7.01; and 

        (c)  the
Tax Deed duly executed by Purchaser; 

        (d)  CVD
shall have been incorporated and shall have acquired, or will acquire simultaneously herewith, that part of the Grafts Business owned as of the date of this
Agreement by Sulzer Cardiovascular GmbH; 

        (e)  the
German Sale Agreement, duly notarized; 

        (f)    such
documents as may be required in order to effect the transfer and assignment of the Related Assets and Liabilities, in a form to be agreed, duly executed by
Purchaser (or such other party as Purchaser shall nominate) and including where applicable the Continued Grafts Employees; and 

        (g)  the
Disclosure Letter in the agreed form, initialed by or on behalf of Purchaser. 

        Section 2.08    Adjustment of Purchase Price.    The Purchase Price shall be subject to adjustment after the
Closing as specified in this Section 2.08: 

        (a)    Closing Balance Sheet.    As promptly as practicable, but in any event within 60 calendar days after the
Closing Date, Seller shall deliver to Purchaser the Closing Balance Sheet, together with a statement from PricewaterhouseCoopers (the "Seller's
Accountants"), stating that the Closing Balance Sheet was prepared in accordance with U.K. GAAP (except as otherwise noted therein) applied on a basis consistent with the
preparation of the Reference Balance Sheet. 

        (b)    Disputes.    (i) Subject to clause (ii) of this Section 2.08(b), the Closing Balance
Sheet delivered by Seller to Purchaser shall be deemed to be, and shall be, final, binding and conclusive on the parties hereto. 

8

  

        (ii)  Purchaser
may dispute any amounts reflected on the Closing Balance Sheet, but only on the basis that the amounts reflected on the Closing Balance Sheet were not arrived
at in accordance with U.K. GAAP or such other applicable GAAP or International Accounting Standards applied on a basis consistent with the preparation of the Reference Balance Sheet;  provided,
however, that Purchaser shall have notified Seller and Seller's Accountants in writing of each
disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such dispute, within 30 Business Days of Seller's delivery of the Closing Balance Sheet
to Purchaser. In the event of such a dispute, Seller's Accountants, together with Seller, and KPMG (the "Purchaser's Accountants"), together with
Purchaser, shall attempt to reconcile their differences, and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties hereto. If the Persons named in the
preceding sentence are unable to resolve any such dispute within 40 Business Days of Seller's delivery of the Closing Balance Sheet to Purchaser and the items remaining in dispute are such that the
Purchase Price would be adjusted by at least £66,000, Seller's Accountants and Purchaser's Accountants shall submit the items remaining in dispute for resolution to an independent
accounting firm of international reputation mutually acceptable to Seller and Purchaser (the "Independent Accounting Firm"), which shall, within 30
Business Days after such submission, determine and report to Seller and Purchaser upon such remaining disputed items, and such report shall be final, binding and conclusive on Seller and Purchaser. If
the Seller and Purchaser shall not have agreed to the identity of such Independent Accounting Firm within 10 Business Days, then the Independent Accounting Firm shall be appointed by the President of
the Institute of Chartered Accountants of England and Wales. If the items successfully disputed by Purchaser are such that the Base Purchase Price would be adjusted by less than £66,000,
the items shall be deemed to be resolved in favor of Seller and shall not result in any adjustment of the Base Purchase Price. Any amounts payable pursuant to this Section 2.08 which are not in
dispute shall be paid in accordance with paragraph (c) of this Section 2.08, notwithstanding that other amounts may remain in dispute. The fees and disbursements of the Independent
Accounting Firm shall be allocated to Purchaser in the same proportion that the aggregate amount of such remaining disputed items so submitted to the Independent Accounting Firm that is unsuccessfully
disputed by Purchaser (as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed items so submitted, and the balance shall be paid by Seller. The
Independent Accounting Firm shall act as experts and not as arbitrators and their decision shall be final and binding. 

        (c)    Base Purchase Price Adjustment.    The Closing Balance Sheet shall be deemed final for the purposes of this
Section 2.08 upon the earlier of (i) the failure of Purchaser to notify Seller of a dispute within 30 Business Days of Seller's delivery of the Closing Balance Sheet to Purchaser or
(ii) the resolution of all disputes pursuant to Section 2.08(b)(ii). Within three Business Days of the Closing Balance Sheet being deemed final, a Base Purchase Price adjustment shall be
made as follows: 

          (i)  in
the event that the amount of Working Capital reflected on the Closing Balance Sheet is less than £6,491,000, then the Base Purchase Price shall be
adjusted downward in an amount equal to such
shortfall, and Seller shall, within three Business Days of such determination, pay such amount converted into Dollars pursuant to 2.08(d) below to Purchaser by wire transfer in immediately available
funds; and 

        (ii)  in
the event that the amount of Working Capital reflected on the Closing Balance Sheet exceeds £6,491,000, then the Base Purchase Price shall be adjusted
upward in an amount equal to the amount of such excess, and Purchaser shall, within three Business Days of such determination, pay the £ amount of such excess converted into Dollars
pursuant to 

9

 

Section 2.08(d) to the Person designated in writing by Seller by wire transfer in immediately available funds. 

        (d)    Interest; Exchange Rate.    Any payment required to be made by Seller or Purchaser pursuant to
Section 2.08(c) shall bear interest from the Closing Date through the date of payment at an interest rate equal to the London Interbank Offered Rate for three-month Eurodollar deposits in
effect from time to time. All amounts on the Reference Balance Sheet and the Closing Balance Sheet shall be stated in pounds sterling. Any conversion of the amount specified in pounds sterling
described in 2.08(c) into Dollars shall be at the Noon Buying Rate as specified by Citibank N.A. on the Closing Date. 

        (e)    Access.    Purchaser shall provide Seller and Seller's Accountants with reasonable access during normal
business hours to the books, records, facilities and employees of the Grafts Business, and shall cooperate fully with Seller and Seller's Accountants, to the extent required by Seller and Seller's
Accountants in order to prepare the Closing Balance Sheet. 

 
 

ARTICLE III    
    
    REPRESENTATIONS AND WARRANTIES OF SELLER    

        Except
as fairly disclosed in the Disclosure Letter, Seller hereby represents and warrants to Purchaser that: 

        Section 3.01    Incorporation and Authority of Seller.    Seller and each Person selling Shares or Related
Assets and Liabilities (collectively, the "Selling Entities") is a corporation duly organized, validly existing under the laws of its jurisdiction of
incorporation. Seller has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The
execution and delivery by Seller, CUH and CGHG of this Agreement, the performance by Seller of its obligations hereunder, and the consummation by Seller of the transactions contemplated hereby have
been duly authorized by all requisite corporate action on the part of Seller.
This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Purchaser) this Agreement constitutes a legal, valid and binding obligation of
Seller, CUH and CGHG, enforceable against Seller, CUH and CGHG in accordance with its terms, subject to general equitable principles and except as enforceability of this Agreement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to creditor's rights. 

        Section 3.02    Incorporation of the Target Companies.    Each Target Company is a corporation duly
incorporated and validly existing under the laws of its jurisdiction of incorporation. Each Target Company is duly qualified and in good standing to do business as a foreign corporation in each
jurisdiction in which the property owned, leased, or operated by it or the nature of its business makes such qualification necessary. 

        Section 3.03    Share Capital of Target Companies; No Subsidiaries.    (a) The authorized share capital
or, as the case may be, capital stock of each Target Company and the issued share capital, or, as the case may be, the outstanding shares of capital stock of each Target Company is set forth in
Section 3.03 of the Disclosure Letter. 

        (b)  There
are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments obligating Seller, any Selling Entity or any Target
Company to issue or sell any shares of capital stock of, or equity interests in any Target Company. The Shares constitute all of the issued and outstanding share capital or outstanding shares of
capital stock of the Target Companies (as applicable) and are owned of record and beneficially solely by Seller and its Affiliates, free and clear of all Encumbrances. All of the Shares have been duly
authorized and validly issued and are fully paid and, where applicable, nonassessable and were not issued in violation of any preemptive 

10

 

rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. 

        (c)  No
Target Company beneficially owns, directly or indirectly, any equity or equity derivative interests in any other Person. 

        Section 3.04    Sufficiency of Assets.    Except as set forth in the Disclosure Letter, the assets of the
Target Companies as of the date hereof and the Related Assets and Liabilities constitute all of the assets used in the Grafts Business. 

        Section 3.05    No Conflict.    Assuming that all consents, approvals, authorizations and other actions
described in Section 3.06 have been obtained and all filings and notifications described in Section 3.06 have been made, and except as set forth in Section 3.05 of the Disclosure
Letter and except as may result from any facts or circumstances relating solely to Purchaser or an Affiliate thereof, the execution, delivery and
performance of this Agreement by Seller do not and will not, (i) violate or conflict with the Charter and Bylaws of any Selling Entity or any Target Company; (ii) conflict with or
violate any Law or Governmental Order applicable to any Selling Entity or any Target Company; (iii) result in any breach of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Material Contract; or (iv) result in the
creation of any Encumbrance on (x) the Shares or (y) the properties or assets of any Target Company or the Related Assets and Liabilities, except in any such case for any violations,
conflicts, breaches, defaults or other matters which would not have a Material Adverse Effect or prevent or materially delay the consummation by Seller of the transactions contemplated hereby. 

        Section 3.06    Consents and Approvals.    The execution, delivery and performance of this Agreement by Seller
do not and will not require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority, except (i) the notification requirements of
any applicable antitrust or merger control Laws, (ii) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or
materially delay the consummation by Seller of the transactions contemplated by this Agreement and would not have a Material Adverse Effect; and (iii) as may be necessary as a result of any
facts or circumstances relating solely to Purchaser or any of its Affiliates. 

        Section 3.07    Financial Information.    

        (a)  Set
forth in Section 3.07 of the Disclosure Letter is a true and complete copy of the unaudited balance sheet of the Grafts Business as of August 23, 2002
(the "Reference Balance Sheet"). The Reference Balance Sheet was prepared (i) in accordance with the requirements of all relevant Laws and
International Accounting Standards ("IAS"), (ii) from the books and records of the Target Companies and, where relevant, the Selling Entities, and (iii) are not materially misleading. 

        (b)  The
audited accounts of VAK for the year ending December 31, 2001 and the year ending December 31, 2000 (i) were prepared in accordance with the
requirements of all relevant Laws and UK GAAP on bases consistent with those used in preparing the audited accounts of VAK for the three previous accounting periods, and (ii) show a true and
fair view of the assets and liabilities of VAK as at December 31, 2001 or December 31, 2000 (as applicable). 

        Section 3.08    Absence of Undisclosed Liabilities.    There are no liabilities of the Grafts Business of a
nature required to be reflected on a balance sheet prepared in accordance with U.K. GAAP, except (a) liabilities set forth in or otherwise disclosed in the Disclosure Letter;
(b) liabilities reflected or reserved against in the Closing Balance Sheet or referred to in the notes thereto; and (c) liabilities which would not have a Material Adverse Effect. 

11

 

        Section 3.09    Absence of Certain Changes or Events.    Since December 31, 2001, the Grafts Business
has been conducted in the ordinary course consistent with past practice and, except as would not reasonably be expected to have a Material Adverse Effect, there has not been: (i) any change in
the condition and repair of the assets of the Grafts Business such that such condition and repair are inconsistent with the uses in which such assets are presently employed, ordinary wear and tear
excepted; (ii) a failure to replenish inventories and supplies of the Grafts Business in the ordinary course of business consistent with past practice; (iii) a purchase commitment by any
Target Company inconsistent with past practice or in excess of the normal, ordinary and usual requirements; (iv) any acquisition (by merger, consolidation or acquisition of stock or assets) by
any Target Company of any Person or other business organization or division thereof for consideration in excess of $500,000 individually or $1,000,000 in the aggregate; or (v) any event or
occurrence which, to the Knowledge of Seller, has had or will have a Material Adverse Effect. 

        Section 3.10    Fair Trading.    (a) No agreement, practice or arrangement carried on in connection
with or in relation to the Grafts Business to which the Seller, any of the Target Companies or any of the Related Companies is or has in the 5 years prior to the date of this Agreement been a
party or, (i) is in breach of or would on the expiry or withdrawal of any applicable transitional period provided for under Schedule 13 Competition Act 1998 be in breach of the Chapter I
or the Chapter II prohibition as defined in the Competition Act 1998; (ii) infringes Article 81 of the Treaty establishing the European Community (as amended from time to time (the
"Treaty")) constitutes an abuse of dominant position contrary to Article 82 of the Treaty or infringes any regulation or other enactment made
under Article 83 and/or Article 308 of the Treaty or is or has bean the subject of any enquiry, complaint, investigation or proceeding in respect thereof; (iii) has been notified
to the Director General of Fair Trading (or any "regulator" as that term is defined in s.54 Competition Act 1998) pursuant to the Competition Act 1998 or to the Competition Directorate-General of the
Commission of the European Communities (the "European Commission") and/or to the EFTA Surveillance Authority; (iv) is or has been the subject of
an enquiry, complaint, investigation, proceeding, reference or report under the Fair Trading Act 1973, the Competition Act 1998 or the Competition Act 1980 or has constituted an
anti-competitive practice within the meaning of that Act; (v) is or ought to have been registered in accordance with the provisions of the Restrictive Trade Practices Acts 1976 and
1977 or contravened the provisions of the Resale Prices Act 1976 or is or has been the subject of any enquiry, complaint, investigation or proceeding under any of those Acts; (vi) is by virtue
of its terms or by virtue of any practice for the time being carried on in connection therewith a "Consumer Trade Practice" within the meaning of s.13 Fair Trading Act 1973 and susceptible to or under
reference to the Consumer Protection Advisory Committee or the subject matter of a report to the Secretary of State or the subject matter of an Order by the Secretary of State under the provisions of
Part II of that Act; or (vii) infringes any other competition, restrictive trade practice, anti-trust, fair trading or consumer protection Law applicable in any jurisdiction
in which the Seller has assets employed in the Business or carries on or intends to carry the Business or in which the activities of the Business may have an effect. 

        (b)  In
relation to the Grafts Business there has not been given any assurance or undertaking (written or oral) to the Restrictive Practices Court, the Director General of
Fair Trading, the Competition Commission, the Secretary of State for Trade and Industry, the European Commission, the EFTA Surveillance Authority or the Courts of the European Communities, or to any
other Authority and is not subject to or in default or contravention of any such assurance or undertaking or any Article, Act, decision, direction, regulation, order or other instrument or undertaking
relating to any matter referred to in this Section 3.10. 

        (c)  None
of the activities of the Business as currently conducted could give rise to the imposition of any anti-dumping duty or other sanction under any trade
regulation Law in respect of any products manufactured by the Business in recognized market-economy countries or in which the Business trades from such countries. 

12

 

        (d)  No
anti-dumping duty or other sanction under any trade regulation Law is or has been in force in any area in which the Grafts Business is carried on or
intended to be carried on in respect of products manufactured by the Grafts Business or in which the Grafts Business trades. 

        (e)  No
undertaking has been given to any Authority under any anti-dumping or other trade regulation Law in relation to the Grafts Business. 

        (f)    The
Seller is not and has not been in receipt of any aid in relation to the Grafts Business which could be construed as falling within Article 87(1) of the Treaty
other than existing aid as that term is defined in Council Regulation 659/99/EC. 

        (g)  The
Seller is not and has not been in relation to the Grafts Business the subject of an enquiry, complaint, investigation, proceeding or review in relation to the
receipt or alleged receipt by it of any aid or alleged aid or the misuse by it of any aid received by it and the Seller is not aware of any pending or threatened enquiry, complaint, investigation,
proceeding or review in relation to any such matters. 

        (h)  The
Seller is not a party to or involved in the award of any contract or any other engagement undertaken or to be undertaken by the Grafts Business of whatever nature
which was awarded or is proposed to be awarded in breach of any Law or administrative practice relating to the procurement of works, goods or services or which has been, is or could reasonably be the
subject of an enquiry, complaint, investigation, proceeding or review in relation to such matters. 

        (i)    The
Seller is not aware of any pending or threatened enquiry, complaint, investigation, proceeding or review in relation to any matter described in paragraph (f)
above. 

        Section 3.11    Litigation.    Except as set forth in Section 3.11 of the Disclosure Letter, there are
no current Actions or, to the Knowledge of Seller, threatened Actions against any Target Company or any Related Company, that are reasonably likely to have a Material Adverse Effect or prevent or
materially delay
the consummation of the transactions contemplated by this Agreement. To the Knowledge of Seller, no Target Company nor any Related Company is subject to any outstanding Governmental Order which,
insofar as can be reasonably foreseen, would have a Material Adverse Effect. 

        Section 3.12    Compliance with Laws; Certain Regulatory Matters.    Except as would not reasonably be expected
to have a Material Adverse Effect, the Grafts Business is being conducted in compliance with all Laws and Governmental Orders applicable thereto, and to the Knowledge of Seller, neither any Selling
Entity nor any Target Company nor any Related Company has received any written notice to the effect that the Grafts Business is not in compliance with any applicable Law. Notwithstanding the
foregoing, the representations and warranties in this Section 3.12 do not apply to licenses and permits, environmental matters, intellectual property rights, employee benefit matters and Taxes,
which matters are covered exclusively in Section 3.13, Section 3.14, Section 3.23 and 3.24 and Section 3.18, respectively. 

        Section 3.13    Licenses and Permits.    Except as would not reasonably be expected to have a Material Adverse
Effect, each Target Company and each Related Company (i) currently holds all governmental licenses, permits and authorizations necessary for the current use, occupancy and operation of its
business (or the portions thereof that relate to the Grafts Business), and is in compliance with all such permits, licenses and approvals, and (ii) has made all required filings with, or
notifications to, all Medical Product Regulatory Authorities pursuant to applicable requirements of all Laws applicable to the Grafts Business. Notwithstanding the foregoing, the representations and
warranties in this Section 3.13 do not apply to environmental matters, intellectual property rights, employee benefit matters and Taxes, which matters are covered exclusively in
Section 3.14, Section 3.24 and Section 3.25, respectively. 

13

 

        Section 3.14    Environmental Matters.    (a) To the Knowledge of Seller, except as would not have a
Material Adverse Effect, no Target Company nor any Related Company: (i) is in violation of any Environmental Law nor has it received notice that any such violation exists; (ii) has
placed, deposited or released any Hazardous Substances upon or under any real property owned or leased by it, except in compliance with Environmental Laws or in such amounts the costs of compliance
with which or results of which would not have a Material Adverse Effect; and (iii) has received notice from any Governmental Authority (other than notices that have been fully complied with or
withdrawn) requiring the removal of any alleged Hazardous Substance, or advising of any pending or contemplated search or investigation of any real property owned or leased by Seller, the costs of
compliance with which or results of which could have a Material Adverse Effect. 

        (b)  Each
Target Company and each Related Company has been issued, and will maintain until the date of the Closing, all required federal, state and local permits, licenses,
certificates and approvals with respect to its properties relating to, (i) air emissions; (ii) discharges to surface water or groundwater; (iii) noise emissions; (iv) solid
or liquid waste disposal; or (v) the use, generation, storage, transportation or disposal of Hazardous Substances. 

        Section 3.15    Books and Records.    Except with respect to Tax matters which are covered in
Section 3.25 and the Tax Deed, all the books and records which are to be delivered or otherwise made available to the Purchaser in accordance with the terms of this Agreement: 

        (a)  have,
in all material respects, been fully, properly and accurately maintained on a consistent basis and are and will at the Closing Date be up to date and, in all
material respects, contain true, complete and accurate records of all aspects of the Grafts Business to which they relate and of all matters required by Law to be entered therein; 

        (b)  do
not contain or reflect any material inaccuracies or discrepancies; and 

        (c)  are,
in all material respects, within the possession and control of the relevant Target Company or Related Company. 

        Section 3.16    Grants.    Except for those grants disclosed in Section 3.05 of the Disclosure Letter,
neither Seller, nor the Target Companies nor the Related Companies nor the Selling Entities have applied for or received any grant or other financial assistance from any Authority in relation to the
Grafts Business. Full particulars of all such grants and other financial assistance are given in the Disclosure Letter and there are no circumstances which might lead to the whole or part of any such
grant or other financial assistance becoming repayable or forfeited. 

        Section 3.17    Condition and Use of Fixed Assets.    Each of the fixed assets of the Grafts Business is in all
material respects: 

        (a)  in
good repair and condition (taking into account its age and level of use), is in satisfactory working order and has been regularly and properly serviced and maintained
and none is dangerous, inefficient, obsolete or in need of renewal or replacement; 

        (b)  not
unsafe, dangerous or in such a physical condition as to materially contravene the terms of any contract (express or implied) between Seller and any of its employees,
customers or any other person, and does not materially contravene or infringe any Law applicable to Seller or any obligation to which it is subject or breach any duty of care which it owes; 

        (c)  capable
of being properly used over its estimated useful life for the requirements of the Grafts Business for the same purposes and to no lesser extent than heretofore;
and 

        (d)  not
surplus to the current or proposed requirements of the Grafts Business. 

        Section 3.18    Intellectual Property Rights.    (a) The Target Companies and the Related Companies are
the sole legal and beneficial owners free from Encumbrances of the Owned Intellectual Property of 

14

 

the Grafts Business set out in Section 3.18 of the Disclosure Letter and (where such property is capable of registration) the registered proprietor thereof and own no other Intellectual
Property in relation to the Grafts Business. 

        (b)  No
third party has been authorized to make any use whatsoever of any Owned Intellectual Property used in the Grafts Business. 

        (c)  Except
as set forth in the Disclosure Letter all the Intellectual Property used in the Grafts Business is owned by the Target Companies or the Related Companies. 

        (d)  To
the Knowledge of Seller and except as set forth in the Disclosure Letter, none of the Intellectual Property rights listed in the Disclosure Letter is being used,
claimed, applied for, opposed or attacked by any person. 

        (e)  To
the Knowledge of Seller, there is no infringement of the Intellectual Property rights listed in the Disclosure Letter or of any rights relating to them by any person. 

        (f)    There
are no outstanding claims against Seller, the Target Companies or the Related Companies for infringement of any Intellectual Property or of any rights relating to
it used (or which has been used) in the Grafts Business and no such claims have been settled by the giving of any undertakings which remain in force. 

        (g)  Confidential
information and know-how used in the Grafts Business is kept strictly confidential. To the Knowledge of Seller, no such confidentiality having
been breached. Seller has not disclosed (except in the ordinary course of its business) any of its know-how, trade secrets or lists of customers to any other person. All application and
renewal fees, costs, charges and taxes required for the maintenance or protection of the Intellectual Property rights listed in the Disclosure Letter have been duly paid on time and all other steps so
required have been taken and none of such rights is subject to any existing challenge or attack by a third party or Authority. 

        (h)  The
Intellectual Property agreements listed in the Disclosure Letter are all the agreements relating to Intellectual Property to which the Target Companies or Related
Companies (in relation only to the Grafts Business) is a party and each of them is valid and binding and Seller is not in material breach of any such agreement. 

        (i)    All
persons retained or employed in the Grafts Business who in the course of their work in the Grafts Business will or might reasonably be expected to bring into
existence Intellectual Property or things protected by Intellectual Property are, so far as is reasonably practicable, individually bound by agreements with Seller whereby all Intellectual Property
which such persons may bring into existence during their work in the Grafts Business vests in the Target Companies (or Related Companies as applicable) and all such agreements contain terms which, so
far as is reasonably practicable, prevent such persons disclosing any confidential information about the Grafts Business. None of the Intellectual Property used in the Grafts Business is subject to
compulsory licensing or the granting of any licenses of right nor, to the Knowledge of Seller, will it become so by operation of Law. 

        (j)    The
Grafts Business does not use on its letterhead, brochures, sales literature or vehicles, nor does it otherwise carry on its business under, any name other than the
name(s) set out in the Disclosure Letter. 

        Section 3.19    Material Contracts.    (a) Section 3.19 of the Disclosure Letter lists the
following contracts, commitments and agreements with respect to the Grafts Business as of the date of this Agreement (the "Material Contracts"): 

          (i)  any
contract or agreement (excluding routine checking account overdraft agreements involving petty cash amounts) under which any Target Company has created, incurred,
assumed or guaranteed (or may create, incur, assume or guarantee) Indebtedness in excess of $500,000 to 

15

 

Persons not Affiliated with Seller or under which Seller or any of its Affiliates has granted a security interest or lien on any of the properties or assets of any Target Company, whether tangible or
intangible, to secure such Indebtedness; 

        (ii)  any
lease of personal property which constitutes property or an asset of the Grafts Business involving an annual expense in excess of $500,000 that is not cancelable
within 90 calendar days; 

        (iii)  any
contract or agreement containing covenants limiting any Target Company's freedom to engage in any line of business or to compete with any Person; 

        (iv)  all
active contracts and agreements providing for Clinical Application Research Studies; 

        (v)  any
contract or agreement granting to any Person any right to market, distribute or resell any product of the Grafts Business, or to represent the Grafts Business with
respect to any such product, or act as agent for the Grafts Business in connection with the marketing, distribution or sale of any product of the Grafts Business, that, in any case, is not cancelable
within 90 calendar days; 

        (vi)  any
contract or agreement between any Target Company or any Related Company (to the extent it relates to the Grafts Business) and Seller or any of its Affiliates,
(other than contracts and agreements relating to intercompany debt); 

      (vii)  any
contract or agreement establishing any joint venture, strategic alliance or other collaboration that is material to the Grafts Business; 

      (viii)  any
lease of real property to which the Grafts Business is a party involving annual expense in excess of $500,000 that is not cancelable within 90 calendar days; 

        (ix)  any
contract or agreement for the purchase or sale by the Grafts Business of products or services during the fiscal year ended December 31, 2001 that resulted
in, or during the fiscal year ending December 31, 2002 reasonably is expected to result in, purchases or sales by the Grafts Business in excess of $500,000 and that is not cancelable within 90
calendar days; 

        (x)  any
sole source supply contract for the purchase of a raw material or a component that is otherwise not generally available and that is used in the manufacture of any of
the products of the Grafts Business, which products during the fiscal year ended December 31, 2001 had sales in excess of $500,000; 

        (xi)  all
contracts or agreements with any present or former officer, employee or consultant of the Grafts Business pursuant to which such officers, employees or consultants
are currently entitled or expected to receive compensation in excess of $150,000 on an annual basis; and 

      (xii)  all
collective bargaining or other labor or union contracts or agreements, if any. 

        (b)  To
the Knowledge of Seller, the Grafts Business is not, as of the date of this Agreement, in material breach or material violation of, or material default under, any of
the Material Contracts. Each Material Contract is, as of the date of this Agreement, a valid agreement, arrangement or commitment of the Grafts Business enforceable against the applicable constituent
corporation of the Grafts Business in accordance with its terms and, to the Knowledge of Seller, is, as of the date of this Agreement and will
not, as a result of the transactions contemplated hereby, cease to be, a valid agreement, arrangement or commitment of each other party thereto, enforceable in all material respects against each such
party in accordance with its terms, subject to general equitable principles and except as enforceability of any Material Contract may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application relating to creditor's rights. 

16

 

        Section 3.20    Insurances.    (a) Set forth in Section 3.20 of the Disclosure Letter is a list
of the insurance policies in which Seller, the Target Companies or the Related Companies has an interest in relation to the Grafts Business (the
"Insurances"), copies of which have been provided to Purchaser as of the date hereof. The Insurances afford to the Grafts Business adequate cover
against fire and such other risks as persons carrying on a similar business as the Grafts Business commonly cover by insurance. 

        (b)  All
the Insurances are in full force and effect and will be maintained in full force without alterations and there are no premiums in arrears in respect of such
Insurances. There are no known circumstances which might lead to any liability under any of the Insurances being avoided by the insurers or the premiums being materially increased. The Insurances
contain no special or unusual terms, restrictions or rates of premium. There is no claim outstanding under any of the Insurances and Seller is unaware of any circumstances likely to give rise to a
claim or (if Seller were to seek to renew the Insurances) of any circumstances which might cause any of the insurers to refuse to renew them. 

        Section 3.21    Real Property.    Set forth in Section 3.21 of the Disclosure Letter is a complete list
of all of the real property owned or leased by the Target Companies. Any real property owned by any Target Company is owned free and clear of Encumbrances other than Permitted Encumbrances. The Target
Companies have a valid leasehold in all real property leased by the Target Companies free and clear of all Encumbrances other than Permitted Encumbrances. 

        Section 3.22    Employees and Workers.    (a) As promptly as practicable after the date of this
Agreement, Seller will provide true and complete details of the names, ages and lengths of continuous service of all of the employees of the Grafts Business and by reference to each of them the
remuneration payable, notice period, holiday entitlement and other benefits provided to each employee or any person connected with him or the agency supplying him and (without limiting the generality
of the foregoing) include particulars of all profit sharing, incentive, bonus, commission arrangements and any other benefit to which each employee is entitled or which is regularly provided or made
available to him in any case whether legally binding or not. 

        (b)  To
the Knowledge of Seller, there are no subsisting contracts for the provision by any person of any consultancy services to the Grafts Business except for those set
forth on Section 3.09 of the Disclosure Letter. 

        (c)  To
the Knowledge of Seller, none of the Key Employees has given notice terminating his contract of employment or engagement or has been or is to be withdrawn by the
agency supplying him. 

        (d)  To
the Knowledge of Seller, none of the employees of the Grafts Business is under notice of dismissal. 

        (e)  To
the Knowledge of Seller, none of the employees of the Grafts Business belongs or has belonged at any material time to an independent trade union recognized by the
Target Companies or Related Companies. 

        (f)    To
the Knowledge of Seller, there are no employee representatives representing all or any of the employees of the Grafts Business. 

17

  

        (g)  To the Knowledge of Seller, there is no plan, scheme, commitment, policy, custom or practice (whether legally binding or not) relating to redundancy affecting any of the
employees of the Grafts Business more generous than the statutory redundancy requirements in the relevant jurisdiction. 

        (h)  To
the Knowledge of Seller, there is no working arrangement, practice, policy or procedure in relation to the Grafts Business which contravenes the Working Time
Regulations 1998 or such other European equivalent of the Working Time Regulations as may be applicable. 

        (i)    To
the Knowledge of Seller, there is no hourly paid employee employed to work in the Grafts Business who is now paid less than the statutory minimum applicable under the
National Minimum Wage Act 1998. 

        (j)    All
employees of the Grafts Business performing services in the United States are employed by VAKUS. 

        (k)  All
share incentive arrangements under which employees of the Grafts Business have received all awards pursuant to their employment by the Grafts Business (the "Share
Schemes") have been disclosed. To the Knowledge of Seller, all Share Schemes have been operated in compliance with their rules and with all applicable Laws and regulations. The UK Sulzer Medica
Approved Savings Related Share Option Plan is a savings related share option scheme approved by the UK Inland Revenue; to the Knowledge of Seller, it has at all times been operated in accordance with
its rules and Seller is not aware of any reason why the UK Inland Revenue would withdraw its approval. 

        Section 3.23    Employee Benefit Matters—U.K.    Employee benefit plans of the Target Companies
that are subject to the laws of the United Kingdom, (i) are exempt approved schemes within the meaning of Section 592 of the Income and Corporation Taxes Act 1988 and there is no reason
why approval may be withdrawn; and (ii) are contracted out schemes within the meaning of the Pension Schemes Act 1993 and there is in force contracting out certificates covering Seller and VAK,
as applicable, and there is no reason why any such certificates should be cancelled. Every person who has had at any time the right to join, or apply to join, any benefit plan described in the
immediately preceding sentence has been properly advised of that right. No person is excluded from membership of any such plan or from the benefits thereunder in contravention of Article 141 of
the Treaty of Rome, the Pension Act 1995 or other applicable Laws or the requirements or provisions of such plans. 

        Section 3.24    Employee Benefit Matters—U.S.    (a) Set forth in Section 3.24 of
the Disclosure Letter is a list of each "employee benefit plan" (as defined in Section 3(3) of ERISA) and all other material employee benefit, bonus, incentive, deferred compensation, stock
purchase, stock option, severance, change in control and fringe benefit plans (other than any employment or personnel policy, practice or procedure) maintained, or contributed to, by VAKUS or any of
its Affiliates for current or former employees or directors of VAKUS or for other individuals performing personal services for the Grafts Business in the United States, or with respect to which VAKUS
could incur liability under Section 4069, 4201 or 4212(c) of ERISA (collectively, the "VAKUS Benefit Plans"). With respect to each VAKUS Benefit
Plan, Seller has made available to Purchaser a true and complete copy of the following: (i) the most recent summary plan description for each VAKUS Benefit Plan for which a summary plan
description is required; (ii) such VAKUS Benefit Plan, and each trust agreement relating to such VAKUS Benefit Plan; (iii) the most recent annual report (Form 5500) filed with the
IRS; and (iv) the most recent determination letter issued by the IRS with respect to any VAKUS Benefit Plan qualified under Section 401(a) of the Code. 

        (b)  To
the Knowledge of Seller, VAKUS Benefit Plans have been operated and administered in compliance in all material respects with the terms of such VAKUS Benefit Plans,
ERISA, the Code and any other applicable Law. With respect to any VAKUS Benefit Plan that is intended to qualify under Section 401(a) of the Code, the plan has received a favorable
determination letter as to its qualification taking into account all "GUST"-required amendments (or such a letter has been applied for within the 

18

 

applicable remedial amendment period), and nothing has occurred, whether by action or failure to act, that would cause the loss of such qualification or result in material costs under the Internal
Revenue Service's Employee Plans Compliance Resolution System. 

        (c)  There
is no agreement, plan or arrangement covering any employee or independent contractor or former employee or independent contractor of VAKUS that, considered
individually or considered collectively with any other such agreement, plan or arrangement, will, or could reasonably be expected to, give rise directly or indirectly to the payment of any amount that
would not be deductible pursuant to Section 280G of the Code or that would be subject to an excise tax under Section 4999 of the Code. 

        (d)  Except
as set forth in Section 3.24 of the Disclosure Letter, there are no outstanding agreements or arrangements providing for severance payments with respect to
any VAKUS employees. 

        Section 3.25    Taxes.    (a) (i) Each Target Company has timely filed or will timely file all
material Tax Returns for any period ending on or before the Closing Date, taking into account any extension of time to file granted thereto; and (ii) except for Taxes for which provision has
been made on the Closing Balance Sheet, all Taxes shown to be payable on such Tax Returns have been or will be paid on a timely basis. 

        (b)  (i) There
is no claim or assessment pending against any Target Company for any alleged deficiency in Taxes and no Target Company has been notified in writing of
any audit or investigation with respect to any liability of the Grafts Business for Taxes for which it may be liable; and (ii) there are no agreements in effect to extend the period of
limitations for the assessment or collection of any Tax relating to any Target Company. 

        Section 3.26    Solvency.    (a) No order has been made, petition presented or resolution passed for
the winding up of any Selling Entity or any of the Target Companies and no meeting has been convened for the purpose of winding up any of them. No Selling Entity has in the last two years been a party
to any transaction which could be avoided in a winding up. 

        (b)  No
steps have been taken for the appointment of an administrator or receiver (including an administrative receiver) in respect of any Selling Entity or any of the Target
Companies. 

        (c)  Neither
the Selling Entities, nor any of the Target Companies has made or proposed any arrangement or composition with its creditors or any class of its creditors; 

        (d)  Neither
the Selling Entities, nor any of the Target Companies is insolvent, or unable to pay its debts within the meaning of the applicable insolvency legislation and
has not stopped paying its debts as they fall due. 

        (e)  No
distress, execution or other process has been levied against any Selling Entity, or any of the Target Companies. No unsatisfied judgment is outstanding against any
Selling Entity or any of the Targeted Companies. 

        (f)    No
floating charge created by any Selling Entity or any of the Target Companies has crystallized. 

        (g)  No
event analogous to any of the foregoing has occurred in or outside the United Kingdom. 

        Section 3.27    Brokers.    Except for Lehman Brothers
("Lehman"), no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Seller or any Target Company. Seller is solely responsible for the fees and expenses of Lehman. 

        Section 3.28    No Implied Representations and Warranties.    No Selling Entity nor any
Target Company is making any representation or warranty whatsoever, express or implied, except those representations and warranties of Seller explicitly set forth in this Agreement or any certificate  

19

 

 contemplated hereby and delivered to Purchaser in connection herewith. Subject to the foregoing, the Shares, the assets and business of the Target Companies and the Related Assets and Liabilities
being acquired by Purchaser at the Closing as a result of this Agreement and the transactions contemplated hereby shall be acquired by Purchaser on an "as is, where is" basis and in their present
condition, and Purchaser shall rely solely upon its own examination thereof. In any event, except as explicitly set forth herein none of the Selling Entities, the Target Companies nor any of their
respective officers, directors, stockholders, employees, Affiliates or representatives, as the case may be, has made or is making any representation, express or implied, as to the value of any asset
or business being so acquired, or any warranty of merchantability, suitability or fitness for a particular purpose or quality, or as to the condition or workmanship thereof, or as to the absence of
any defects therein, whether latent or patent.

        Section 3.29    JLL Contract.    The copy of the JLL Contract attached to the Disclosure Letter is a true and
complete copy of the JLL Contract and there are no written amendments or variations and to the Knowledge of Seller, oral amendments or variations, to the JLL Contract or other written agreements or
arrangements and, to the Knowledge of Seller, oral agreements or arrangements, between Seller and VAK. 

        Section 3.30    Inventory.    (a) All finished goods included in the inventory are in good condition,
meet in all material respects all relevant statutory, regulatory and industry-accepted standards and contractual specifications and are capable of being sold in the ordinary course of the Grafts
Business in accordance with their current price list without discount, rebate or allowance to a purchaser. No material part of the inventory is obsolete, redundant (being out of fashion or demand) or
slow moving. 

        (b)  The
levels of raw materials, partly and fully finished goods, packaging and promotional material are included in the transactions contemplated by this Agreement are
sufficient for the normal requirements of the Grafts Business and are adequate (but not excessive) in relation to the current and anticipated trading requirements of the Grafts Business as a whole. 

        Section 3.31    Product Liability.    (a) There is no current or pending claim in respect of Product
Liability, to the Knowledge of Seller, threatened in writing against or expected by Seller or any of its Affiliates in relation to the Grafts Business and to the Knowledge of Seller there are no
circumstances which are likely to give rise to any such claim. For this purpose, "Product Liability" means a liability arising out of death, personal
injury or damage to property caused by a defective product or defective services sold, supplied or provided in the course of the Grafts Business on or prior to the date of this Agreement. 

        (b)  Within
the four years prior to the Closing Date, there has not been either (i) implanted, or (ii) sold any product or service which, to the Knowledge of
Seller (x) is, was, or will become, in any material
respect faulty or defective; or (y) does not comply in any material respect with any warranty or representation expressly or impliedly made by or on behalf of Seller in respect of it or with
all applicable Laws, standards and requirements in respect thereof, provided, however, that in the case of such sold products referred to in
(ii) above, this warranty is only given in respect of those sold products that have been implanted within the period ending 90 days after the Closing Date. 

        (c)  To
the Knowledge of Seller, there has not been received a prohibition notice, a notice to warn or a suspension notice under the Consumer Protection Act 1987 in relation
to any product or service of the Grafts Business. 

        Section 3.32    Notice of Developments.    To the Knowledge of Seller, Seller has not received a notice in
writing with respect to any Material Contracts or any material ongoing supply or distribution relationship of an intention to terminate or not renew any such contract or terminate such supply or
distribution relationship. 

20

 

        Section 3.33    Computer Systems.    (i) Except as has not had a Material Adverse Effect, the hardware
and software of the Grafts Business have not in the past three years unduly interrupted or hindered the running or operation of the Grafts Business, and except as would not be reasonably expected to
have a Material Adverse Effect, have no defects in operation which so affect the Grafts Business; and (ii) the computer systems have reasonably adequate capability and capacity for all of the
processing and functions required by the Grafts Business as of the Closing Date. 

 
 

ARTICLE IV    
    
    REPRESENTATIONS AND WARRANTIES OF PURCHASER    

        Purchaser
hereby represents and warrants to Seller that: 

        Section 4.01    Incorporation and Authority of Purchaser.    Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of incorporation and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Purchaser of this Agreement, the performance by Purchaser of its obligations hereunder and the
consummation by Purchaser of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Purchaser. This Agreement has been duly executed and
delivered by Purchaser, and (assuming due authorization, execution and delivery by Seller, CUH and CGHG) this Agreement
constitutes a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to general equitable principles and except as enforceability of this
Agreement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to creditor's rights. 

        Section 4.02    No Conflict.    Assuming that all consents, approvals, authorizations and other actions
described in Section 4.03 have been obtained and all filings and notifications described in Section 4.03 have been made, and except as may result from any facts or circumstances relating
solely to the Selling Entities or the Target Companies, the execution, delivery and performance by Purchaser of this Agreement do not and will not, (i) violate or conflict with the Charter or
Bylaws of Purchaser; (ii) conflict with or violate any Law or Governmental Order applicable to Purchaser or; (iii) result in any breach of, or constitute a default (or event which with
the giving of notice or lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other instrument to which Purchaser or any of its subsidiaries is a party or by which any of their assets or properties is bound,
except in any such case for any violations, conflicts, breaches, defaults or other matters that would not prevent or materially delay the consummation by Purchaser of the transactions contemplated
hereby. 

        Section 4.03    Consents and Approvals.    The execution, delivery and performance by Purchaser of this
Agreement do not and will not require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority except, (i) the notification
requirements any applicable antitrust or merger control Laws; (ii) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification; would not
prevent or materially delay the consummation by Purchaser of the transactions contemplated by this Agreement; and (iii) as may be necessary as a result of any facts or circumstances relating
solely to the Selling Entities or the Target Companies. 

        Section 4.04    Litigation.    There are no current Actions pending or, to the knowledge of Purchaser, Actions
threatened against Purchaser that are reasonably likely to prevent or materially delay the consummation by Purchaser of the transactions contemplated by this Agreement. 

21

 

        Section 4.05    Investment Purpose.    Purchaser is acquiring the Shares solely for the purpose of investment
and not with a view to, or for offer or sale in connection with, any distribution thereof. 

        Section 4.06    Financing.    Purchaser has adequate funds available to pay the Base Purchase Price. 

        Section 4.07    Brokers.    Except for Nomura International plc
("Nomura"), no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser. Purchaser is solely responsible for the fees and expenses of Nomura. 

 
 

ARTICLE V    
    
    ADDITIONAL AGREEMENTS    

        Section 5.01    Conduct of Business Prior to the Closing.    Seller covenants and agrees that, between the date
of this Agreement and the Closing Date, except as set forth in Section 5.01 of the Disclosure Letter or as contemplated by any other provision of this Agreement, unless Purchaser shall
otherwise agree in writing: 

        (a)  Seller
shall cause the Grafts Business to be conducted in the ordinary course in a manner substantially consistent with past practice and to use all reasonable efforts
to preserve the Grafts Business substantially intact and to preserve current relationships with customers and suppliers of, and other Persons whose significant business relationships with, the Grafts
Business; provided, however, that no action by any Selling Entity or any Target Company with respect to matters specifically addressed by any provision
of Section 5.01(b) or Section 5.01(c) shall be deemed a breach of this Section 5.01(a) unless such action would constitute a breach of any such provision of Section 5.01(b)
or Section 5.01(c), as applicable; 

        (b)  Seller
shall not permit, and Seller shall ensure that no Selling Entity permits, any Target Company to: 

          (i)  amend
its Charter or Bylaws or permit it to merge or consolidate, or obligate itself to do so, with or into any other entity; 

        (ii)  issue
or sell any shares of capital stock of, or other equity interests in such Target Company or securities convertible into or exchangeable for such shares or equity
interests or permit the sale or transfer of any property or assets of such Target Company, except for sales of assets in the ordinary course of business consistent in all material respects with past
practice and other asset sales for consideration aggregating not more than $500,000; 

        (iii)  declare,
set aside, make or pay any dividend or other distribution, payable in stock, property or otherwise (other than in cash), with respect to any of its capital
stock except in the ordinary course of business and consistent in all material respects with past practice; 

        (iv)  establish
or materially increase any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or otherwise increase the
compensation payable or to become payable to any officers or key employees of any Target Company, except in the ordinary course of business or as may be required by Law or by existing contractual
arrangements; 

        (v)  enter
into any employment or severance agreement with any employees of such Target Company, adopt or enter into any collective bargaining agreement covering employees of
any Target Company, except in the ordinary course of business or as may be required by Law or by existing contractual arrangements; 

22

 

        (vi)  acquire
(including, without limitation, by merger, consolidation or acquisition of stock or assets) any corporation, partnership, limited liability company, other
business organization or any division thereof for consideration aggregating more than $1,000,000; 

      (vii)  assume,
guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except in the
ordinary course of business consistent in all material respects with past practice in an amount in excess of $500,000; 

      (viii)  make
a purchase commitment inconsistent with past practice or in excess of the normal, ordinary and usual requirements; 

        (ix)  make
any change in any method of accounting or accounting practice or policy used by any Target Company other than changes that are required by U.K. GAAP or the
generally accepted accounting principles in effect in the country in which such Target Company is based; 

        (x)  incur
any Indebtedness in excess of $250,000 in the aggregate, except Indebtedness to Seller or any Affiliate of Seller; or 

        (xi)  enter
into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(b). 

        (c)  Seller
shall ensure that no Selling Entity: 

          (i)  sells
or transfers any Related Assets and Liabilities, except for sales in the ordinary course of business consistent in all material respects with past practice; 

        (ii)  establishes
or materially increases any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock option, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or otherwise increases the
compensation payable or to become payable to any Continued Grafts Employee, except in the ordinary course of business or as may be required by Law or by existing contractual arrangements; or 

        (iii)  enters
into any employment or severance agreements with any Continued Grafts Employee, or adopt or enter into any collective bargaining agreement covering Continued
Grafts Employees, except in the ordinary course of business or as may be required by Law. 

        Section 5.02    Investigation; Confidentiality.    (a) Purchaser acknowledges and agrees that it,
(i) has made its own inquiry and investigation into, and based thereon has formed an independent judgment concerning the Grafts Business; (ii) has been furnished with or given adequate
access to such information about the Grafts Business as it has requested; (iii) has had independent legal, financial and technical advice relating to the Grafts Business and the terms of this
Agreement and the documents to be executed pursuant hereto; and (iv) will not assert any claim against Seller or any of its Affiliates or any of Seller's or its Affiliates' respective
directors, officers, employees, agents, stockholders, consultants, investment bankers, accountants, counsel or representatives, or hold Seller or any such persons liable, for any inaccuracies,
misstatements or omissions with respect to information (other than the representations and warranties of Seller contained in this Agreement) furnished by Seller or such persons concerning Seller or
the Grafts Business. Any implied warranty or similar rights applicable to any of the transactions contemplated hereby under the Law of any jurisdiction is hereby expressly and irrevocably waived by
Purchaser to the fullest extent permitted by such Law, and Purchaser agrees that it shall not seek to enforce any such implied warranties or similar rights. 

        (b)  In
connection with Purchaser's investigation of the Grafts Business, Purchaser has received certain estimates, projections and other forecasts, and certain plan and
budget information. Purchaser 

23

 

acknowledges that there are uncertainties inherent in attempting to make such estimates, projections, forecasts, plans and budgets, that Purchaser is familiar with such uncertainties, that Purchaser
is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates,
projections, forecasts, plans and budgets so furnished to it, and that Purchaser will not assert any claim against Seller or any of its Affiliates or any of Seller's or its Affiliates' respective
directors, officers, employees, agents, stockholders, consultants, investment bankers, accountants, counsel or representatives, or hold Seller or any such persons liable with respect thereto.
Accordingly, Seller makes no representation or warranty with respect to any estimates, projections, forecasts, plans or budgets referred to in this Section 5.02. 

        (c)  The
terms of the letter agreement dated as of June 25, 2002 (the "Confidentiality Agreement") between Lehman, as
agent for Seller, and Purchaser are incorporated by reference herein and shall continue in full force and effect until the Closing, at which time the Confidentiality Agreement and the obligations of
Purchaser under this Section 5.02(c) shall terminate; provided, however, that the Confidentiality Agreement shall not terminate with respect to
that portion of the Evaluation Material (as defined in the Confidentiality Agreement) that is not exclusively related to the transactions contemplated by this Agreement. If this Agreement, is, for any
reason, terminated prior to the Closing Date, the Confidentiality Agreement shall continue in full force and effect thereafter in accordance with its terms. Potential insurers of Purchaser shall be
deemed to be "Representatives" for purposes of the Confidentiality Agreement. 

        (d)  Following
the Closing, Seller agrees to, and will cause its agents, representatives, Affiliates, employees, officers and directors to, (i) treat and hold as
confidential (and not disclose or provide access to any Person), in a manner consistent with its practices prior to the date hereof, all information concerning the Grafts Business that was previously
treated by Seller and its Affiliates as confidential; (ii) in the event that Seller or any such agent, representative, Affiliate, employee, officer or director becomes compelled by Law
(including any requirement of the New York Stock Exchange or the Swiss Exchange) to disclose any such information, provide Purchaser with prompt written notice of such requirement so that Purchaser
may seek a protective order or other remedy or waive compliance with this Section 5.02(d); and (iii) in the event that such protective order or other remedy is not obtained or is not
available, or Purchaser waives compliance with this Section 5.02(d), furnish only that portion of such confidential information that is legally required to be provided and use all reasonable
efforts to obtain assurances that confidential treatment will be accorded such information; provided, however, that this sentence shall not apply to any
information that, at the time of disclosure, is available publicly and was not disclosed in breach of this Section 5.02(d) by Seller, its agents, representatives, Affiliates, employees,
officers or directors. Anything in this Section 5.02(d) to the contrary notwithstanding, Seller and its agents, representatives, Affiliates, employees, officers and directors shall have the
right to use and disclose confidential information described in this Section 5.02(d) to the extent such confidential information is necessary for the conduct of the business of Seller and its
Affiliates. 

        Section 5.03    Access to Information.    (a) From the date hereof until the Closing Date, upon
reasonable notice, Seller shall, and shall cause the Target Companies and each of their respective officers, directors, employees, auditors and agents to, (i) afford the officers, employees and
authorized agents and representatives of Purchaser reasonable access, during normal business hours, to the offices, properties, books and records of the Target Companies and the Related Assets and
Liabilities; and (ii) furnish to the officers, employees and authorized agents and representatives of Purchaser such additional financial and operating data and other information regarding the
Target Companies and the Related Assets and Liabilities as Purchaser may from time to time reasonably request; provided, however, that such
investigation shall not unreasonably interfere with any of the businesses or operations of Seller or any of its Affiliates. 

24

  

        (b)  In order to facilitate the resolution of any claims made by or against or incurred by Seller or any Affiliate or for which Seller or any of its Affiliates remains
liable, after the Closing Date and in order to exchange information pursuant to Section 5.03, upon reasonable notice, Purchaser shall (i) afford the officers, employees and authorized
agents and representatives of Seller reasonable access, during normal business hours, to the offices, properties, books and records of Purchaser concerning the Target Companies; (ii) furnish to
the officers, employees and authorized agents and representatives of Seller such additional financial and other information regarding the Target Companies as Seller or such officers, employees and
authorized agents and representatives may from time to time reasonably request; and (iii) make available to Seller the employees of Purchaser in respect of the Target Companies whose
assistance, testimony or presence is necessary to assist Seller in evaluating any such claims and in defending such claims, including the presence of such persons as witnesses in hearings or trials
for such purposes; provided, however, that such investigation shall not unreasonably interfere with the business or operations of Purchaser or any of
its Affiliates. 

        (c)  Notwithstanding
the foregoing, Seller shall not be required, prior to the Closing Date, to disclose, or cause the disclosure of, to the officers, employees or authorized
agents or representatives of Purchaser (or provide access to any offices, properties, books or records of Seller or any of its Affiliates that could result in the disclosure to such persons or others
of) any confidential information relating to pricing and marketing plans, to the extent that Seller reasonably believes that disclosure of such information would create a significant risk of a
violation of any antitrust or competition Law, nor shall Seller be required to permit or cause others to permit the officers, employees or authorized agents or representatives of Purchaser to copy or
remove from the offices or properties of Seller or any of its Affiliates any documents, drawings or other materials that might reveal any such confidential information. 

        Section 5.04    Books and Records.    (a) Except as otherwise provided in Article VII, Purchaser
agrees that it shall preserve and keep all books and records in relation to the period prior to the Closing Date in respect of the Target Companies in Purchaser's possession for a period of at least
six years from the Closing Date. After such six-year period, before Purchaser shall dispose of any of such books and records, at least 90 calendar days' prior written notice to such effect
shall be given by Purchaser to Seller, and Seller shall be given an opportunity during such 90-day period, at its cost and expense, to remove and retain all or any part of such books and
records as Seller may select. During such six-year period, duly authorized representatives of Seller shall, upon reasonable notice, have access thereto during normal business hours to
examine, inspect and copy such books and records. 

        (b)  If,
in order properly to prepare documents required to be filed with Governmental Authorities or its financial statements or required under any applicable Law, it is
necessary that either party hereto (or any of their respective Affiliates) or any successors be furnished with additional information relating to
the Target Companies and such information is in the possession of the other party hereto or any of its Affiliates, such party agrees to use its best efforts to furnish such information to such other
party as soon as reasonably practicable, at the cost and expense of the party being furnished such information. 

        Section 5.05    Satisfaction of Conditions Precedent; Regulatory and Other Authorizations; Notices and
Consents.    (a) Seller and Purchaser shall use all reasonable efforts to cause the satisfaction of the conditions precedent contained in Article VII.
Each party hereto shall use all reasonable efforts to obtain all authorizations, consents, orders and approvals of all Governmental Authorities that may be or become necessary for its and its
Affiliates' execution and delivery of, and the performance of their obligations pursuant to, this Agreement and shall cooperate fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. Each party hereto agrees to make any appropriate filing pursuant to relevant anti-trust, anti-competition and merger control
Laws with respect to the transactions contemplated hereby as promptly as practicable, and in any event within ten Business Days of the date hereof, and to supply promptly any additional information
and documentary material that may be requested pursuant to such Laws. The parties hereto acknowledge 

25

 

that time shall be of the essence in this Agreement and agree not to take any action or omit to take any action that will have the effect of unreasonably delaying, impairing or impeding the receipt
of any required authorizations, consents, orders or approvals. 

        (b)  Without
limiting the generality of Purchaser's undertakings pursuant to Section 5.05(a), Purchaser shall: 

          (i)  take
promptly any or all of the following actions to the extent necessary to eliminate any concerns on the part of any Governmental Authority with jurisdiction over the
enforcement of any applicable antitrust laws, anti-competition, merger control or similar laws ("Government Antitrust Authority") regarding
the legality under any antitrust, anti-competition, merger control or similar Law of Purchaser's acquisition of the Target Companies and the Related Assets and Liabilities: entering into
negotiations, providing information, making proposals, entering into and performing agreements or submitting to judicial or administrative orders, or selling or otherwise disposing of, or holding
separate (through the establishment of a trust or otherwise) particular assets or categories of assets of the Grafts Business or Purchaser or any of its subsidiaries or Affiliates; 

        (ii)  use
its best efforts to prevent the entry in a judicial or administrative proceeding brought under any antitrust, anti-competition, merger control or
similar Law by any Government Antitrust Authority or any other party of any permanent or preliminary injunction or other Governmental Order that would make consummation of the acquisition of the
Target Companies and the Related Assets and Liabilities in accordance with the terms of this Agreement unlawful or that would prevent or delay such consummation, including, without limitation, taking
the steps contemplated by Section 5.05(b)(i); 

        (iii)  take
promptly, in the event that such an injunction or order has been issued in such a proceeding, any and all steps, including, without limitation, the appeal
thereof, the posting of a bond or the steps
contemplated by Section 5.05(b)(i), necessary to vacate, modify or suspend such injunction or order so as to permit such consummation on a schedule as close as possible to that contemplated by
this Agreement; and 

        (iv)  take
promptly all other actions and do all other things necessary and proper to avoid or eliminate each and every impediment under any anti-trust,
anti-competition or merger control Law that may be asserted by any Government Antitrust Authority or any other party to the consummation of the acquisition of the Target Companies and the
Related Assets and Liabilities by Purchaser in accordance with the terms of this Agreement. 

        (c)  Seller
shall give promptly such notices to third parties and use reasonable efforts to obtain such third party consents (not including the consents of any Governmental
Authorities) as may be necessary in connection with the transactions contemplated by this Agreement; provided that Seller and its Affiliates shall not be required to make any payment to any such
Person to induce such Person to grant such consent or waiver. 

        Section 5.06    Notification to Governmental Authorities.    Purchaser shall, as promptly as practicable after
the Closing, and in any event not later than the earlier of (i) 60 calendar days after the Closing Date and (ii) the expiration date of the applicable notification period, notify each
Governmental Authority which requires such notification and (x) which is responsible for the regulatory supervision and administration of each of the Target Companies or (y) which
otherwise requires notification of the transactions contemplated by this Agreement. 

        Section 5.07    Non-Competition.    In consideration of the covenants given by Purchaser herein,
Centerpulse AG agrees that, for a period of two years after the Closing Date (the "Non-Competition Period"), neither Centerpulse AG nor any
Person controlled by Centerpulse AG will: (a) own, control or operate an entity that is in the business of developing, manufacturing, distributing or selling vascular grafts (the
"Competitive Business"); provided, however, that the foregoing shall not prohibit Seller or any 

26

 

Person controlled by Seller from (i) acquiring, directly or indirectly, securities of any Person traded in a public market that participates in a Competitive Business; provided that Seller and
its Affiliates do not, in the aggregate, own more than 5% of any class of securities of such Person; or (ii) acquiring a company (the "Diversified
Company") or a business (x) having not more than 25% of its gross revenues attributable to a Competitive Business, or (y) having more than 25% of its gross
revenues attributable to a Competitive Business, so long as, with respect to such Diversified Company or business acquired that shall have derived more than 25% of its gross revenues from a
Competitive Business, Seller shall have divested itself within 12 months of its acquisition of such Diversified Company of the assets of such Diversified Company that constitute the Competitive
Business; or (b) either on its own account or in conjunction with or on behalf of any other person, in connection with any Competitive Business, endeavor to entice away from any of the Target
Companies or Related Companies any person who as at the date of this Agreement is (or within the one year period prior to the date of this Agreement has been) a client or customer of the Grafts
Business; or (c) either on its own account or in conjunction with or on behalf of any other person, in connection with any Competitive Business solicit or endeavor to entice away any person who
at the date of this Agreement is an officer, manager, senior employee
agent or consultant of any of the Target Companies or Related Companies; provided, however, that in the case of the Related Companies this restriction
shall only apply in relation to those officers, managers, senior employees, agents or consultants engaged in the Grafts Business. 

        Section 5.08    Intercompany Arrangements.    Prior to the Closing Date, Seller shall cause any contract or
arrangement that is disclosed (or should have been disclosed) in Section 3.19(a)(vi) of the Disclosure Letter, other than those contracts or arrangements set forth in Section 5.08
of the Disclosure Letter, to be terminated or otherwise amended to exclude any Target Company as a party thereto. 

        Section 5.09    Insurance Coverage.    Effective 12:01 a.m. on the Closing Date, each Target Company and
the property and assets thereof shall cease to be insured by any Selling Entity's (other than such Target Company's) insurance policies, and Purchaser shall have no rights with respect to any such
policy. 

        Section 5.10    Transition Services.    Following the Closing Date, Seller shall provide, or cause to be
provided, to Purchaser, and Purchaser shall provide, or cause to be provided, to Seller and its Affiliates, certain services which are currently provided by Seller and its Affiliates to the Target
Companies or by the Target Companies to the other businesses of Seller and its Affiliates, all as more fully set forth in a transition services agreement in a form to be agreed to between Seller and
Purchaser (the "Seller Transition Services Agreement") and in a transition services agreement in a form to be agreed to between Seller and Purchaser
(the "Purchaser Transition Services Agreement"), respectively, each to be entered into by Seller and Purchaser as of the Closing Date, and which cover,
among other things, the items specified on Schedule 5.10 of the Disclosure Letter. 

        Section 5.11    Continued Grafts Employees.    Seller shall use reasonable efforts to comply with the advice of
counsel in connection with notification and consultation with Continued Grafts Employees. 

        Section 5.12    Further Action.    Each of the parties hereto shall execute and deliver such documents and
other papers and take such further action as may be reasonably required to carry out the provisions hereof and to make effective the transactions contemplated hereby. 

        Section 5.13    German Newco.    CGHG shall procure the incorporation of CVD (which shall be a direct or
indirect subsidiary of CGHG) and shall procure the acquisition by CVD of the Grafts Business of Sulzer Cardiovascular GmbH prior to, or simultaneously with, Closing. 

27

 

 
 

ARTICLE VI    
    
    EMPLOYEE MATTERS    

        Section 6.01    Continuation of Benefits—Target Companies.    For a period of two years after the
Closing Date (or such longer period as may be required by Law), Purchaser shall provide, or cause each Target Company to provide, each current employee and former employee of such Target Company with
benefits (including, without limitation, retirement and welfare benefits) that are no less favorable than the benefits provided under the applicable employee benefit plans applicable to such employee
as in effect at the Closing Date. To the extent that service is relevant for vesting or benefit calculations or allowances (including, without limitation, entitlements to vacation and sick days) under
any plan or arrangement maintained in order to provide the benefits described in the previous sentence, such plan or arrangement shall credit such Target Company's employees for service at or prior to
the Closing Date. Without limiting the foregoing, Purchaser shall also provide, or shall cause each Target Company to provide, each employee of such Target Company (and their eligible dependants) with
coverage as of the Closing Date under Purchaser's group medical plan with immediate eligibility and no pre-existing condition limitations. 

        Section 6.02    Employment of Continued Grafts Employees.    (a) Seller shall take action to procure
the transfer of the Continued Grafts Employees effective as of the Closing Date. Purchaser or its wholly-owned subsidiary shall assume or retain and be responsible for the employment (including any
employment contracts) of the Continued Grafts Employees and Purchaser shall take any and all actions necessary or appropriate (if any) to continue the employment of such Continued Grafts Employees and
Purchaser shall assume or retain all obligations and liabilities relating to their employment under local laws and practices without Seller or any of its Affiliates having any liability to any such
employees for severance, redundancy, termination, payment in lieu of notice, indemnity or other payments to any of such employees by reason of or as a result of the actions contemplated by this
Agreement. 

        (b)  Effective
as of the Closing Date, Purchaser shall establish and qualify or register with applicable regulatory authorities employee benefit plans for, or shall extend
existing Purchaser employee benefit plans, programs, policies and arrangements to, the Continued Grafts Employees which are in accordance with local Law and which provide benefits, for not less then
two years following the Closing Date, to the Continued Grafts Employees which are substantially similar in the aggregate to those provided to the Continued Grafts Employees immediately prior to the
Closing Date. 

        Section 6.03    Cash Compensation.    For a period of one year following the Closing Date, Purchaser shall
ensure that each employee of the Target Companies and each Continued Grafts Employee shall continue to be paid base salary at no lower a rate than that in effect on the Closing Date with respect to
such employee. 

        Section 6.04    Severance.    For a period of one year following the Closing Date, Purchaser shall, or shall
cause the Target Companies to, maintain severance policies, programs and arrangements that are substantially identical to, and no less favorable than, the severance policies, programs and arrangements
applicable to employees of the Target Companies and the Continued Grafts Employees as of the Closing Date. 

        Section 6.05    Pension Schemes.    Certain matters in relation to the pension schemes shall be handled as
specified in the Pension Schedule. 

        Section 6.06    401(k) Plan.    Effective as of the Closing Date, all persons employed by VAKUS as of such date
who are participants ("401(k) Plan Participants") in the Sulzer Medica USA Inc. Retirement Plan (the "Seller 401(k)
Plan") shall no longer accrue benefits under the Seller 401(k) Plan and Seller shall take all actions necessary to achieve this result. As of the Closing Date, Seller shall
cause each such 401(k) Plan Participant to be fully vested in such person's account balance in the Seller 401(k) Plan. As soon as practicable following the Closing Date, Seller shall cause the Seller
401(k) Plan 

28

 

to make available to each 401(k) Plan Participant a distribution of his or her account balance under such plan. On or as soon as practicable following the Closing Date (but no later than
60 days thereafter), Purchaser shall establish or make available to the 401(k) Plan Participants a savings plan intended to be qualified under Sections 401(a) and 401(k) of the Code (the
"Purchaser Plan"), which shall (i) take into account service performed for the Target Company prior to the Closing Date for purposes of
eligibility and vesting under such plan, and (ii) accept rollover contributions of lump sum distributions made from the Seller 401(k) Plan for those 401(k) Plan Participants who elect to make
such rollover contributions. Such rollover contributions may include outstanding loans from the Seller 401(k) Plan to the 401(k) Plan Participants. 

        Section 6.07    Purchaser Plans.    Except as otherwise specifically provided for herein or in the Pensions
Schedule, effective as of the Closing Date, current and former employees of the Target Companies and Continued Grafts Employees who, as of the Closing Date are not employed by Seller or its
Affiliates, shall cease to be active participants in any employee benefit plans maintained by Seller and its Affiliates. 

        Section 6.08    Retention Bonuses.    Seller agrees that those retention bonus payments payable to the
individuals listed on Section 6.08 of the Disclosure Letter pursuant to retention bonus agreement relating to the transaction contemplated by this Agreement are for the account of Seller and
Seller agrees to indemnify and hold harmless Purchaser (or its Affiliates, as the case may be) in respect of any liability to the employees listed on Section 6.08 of the Disclosure Letter in
respect of those retention bonus payments. The parties agree to do all such things as may be required to give effect to the provisions of this clause. 

 
 

ARTICLE VII    
    
    CONDITIONS TO CLOSING    

        Section 7.01    Conditions to Obligations of Seller.    The obligations of Seller to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: 

        (a)  Representations and Warranties; Covenants.    The representations and warranties of Purchaser contained in this
Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing, with the same force and effect as if made as of
the Closing, other than such representations and warranties as are made as of another date, except in any case as would not materially and adversely affect the consummation of the transactions
contemplated by this Agreement; the covenants and agreements contained in this Agreement to be complied with by Purchaser at or before the Closing shall have been complied with in all material
respects; and Seller shall have received a certificate of Purchaser to such effect signed by a duly authorized officer thereof; 

        (b)  Competition Waiting Period.    Any waiting period (and any extension thereof) under any anti-trust,
anti-competition and merger control Laws applicable to the transactions contemplated hereby shall have expired or shall have been terminated, and all consents, authorizations, orders and
approvals required pursuant to any antitrust or competition Law in any jurisdiction which is material to the Grafts Business shall have been obtained; 

        (c)  No Order.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or
Governmental Order (whether temporary, preliminary or permanent) which is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise restraining or
prohibiting consummation of such transactions; and 

        (d)  Release from Settlement Agreement.    Purchaser shall have received evidence that is satisfactory to Purchaser
in its sole discretion that (i) (x) the Target Companies and the Related 

29

 

Assets and Liabilities shall have been removed as parties to the Sulzer Orthopedics Settlement Arrangement and that there shall be no liability or obligation of any kind related thereto and
(y) all liens against the assets of the Target Companies and the Related Assets and Liabilities shall have been removed and all appropriate termination of such lien(s) shall have been filed in
all applicable jurisdictions, and evidence thereof shall have been delivered to Purchaser or (ii) the Target Companies'
liability and obligations under the Sulzer Orthopedics Settlement Agreement have been otherwise defeased and there shall be no liability under the Sulzer Orthopedics Settlement Agreement, in respect
of the Target Companies and the Related Assets and Liabilities. 

        Section 7.02    Conditions to Obligations of Purchaser.    The obligations of Purchaser to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: 

        (a)  Representations and Warranties; Covenants.    The representations and warranties of Seller contained in this
Agreement shall have been true and correct when made and shall be true and correct as of the Closing, with the same force and effect as if made as of the Closing, other than such representations and
warranties as are made as of another date, except in any case as would not materially and adversely affect the consummation of the transactions contemplated by this Agreement and have a Material
Adverse Effect; the covenants and agreements contained in this Agreement to be complied with by Seller at or before the Closing shall have been complied with in all material respects; and Purchaser
shall have received a certificate of Seller to such effect signed by a duly authorized officer thereof; 

        (b)  Competition Waiting Period.    Any waiting period (and any extension thereof) under the any
anti-trust, anti-competition and merger control Laws applicable to the transactions contemplated hereby shall have expired or shall have been terminated and all consents,
authorizations, orders and approvals required pursuant to any antitrust or competition Law in any jurisdiction which is material to the Grafts Business shall have been obtained; 

        (c)  No Order.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or
Governmental Order (whether temporary, preliminary or permanent) which is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise restraining or
prohibiting consummation of such transactions; 

        (d)  Asset Closings.    In respect of the closing of the purchase of Related Assets and Liabilities only, the
Closing shall have occurred or occur simultaneously therewith; and 

        (e)  Consultation with Continued Grafts Employees.    Seller shall have informed and consulted with the Continued
Grafts Employees in each relevant jurisdiction in connection with the transactions contemplated by this Agreement. 

 
 

ARTICLE VIII    
    
    INDEMNIFICATION    

        Section 8.01    Survival of Representations and Warranties.    Subject to the limitations and other provisions
of this Agreement, the representations and warranties of the Seller set forth in Article III and the representations and warranties of Purchaser set forth in Article IV herein shall
survive the Closing and shall remain in full force and effect until March 31, 2004. 

        Section 8.02    Indemnification by Purchaser.    (a) Purchaser agrees, subject to the other terms and
conditions of this Agreement, to indemnify Seller and its Affiliates, officers, directors, employees, agents, successors and assigns (each a "Seller Indemnified
Party") against and hold them harmless from all liabilities, losses, damages, claims, costs and expenses (including reasonable attorney's fees) (collectively,
"Losses") actually incurred by them arising out of, (i) the breach of any of the Purchaser Warranties herein; (ii) the breach of any
covenant or agreement of Purchaser herein (other than the 

30

 

Tax Deed and Pension Schedule (other than Section 9(C) "Sex equality")), it being understood that the sole remedy for breach thereof shall be pursuant to the Tax Deed or Pension Schedule
(other than Section 9(C) "Sex equality"), as the case may be); and (iii) the conduct of the business of the Grafts Business following the Closing. Notwithstanding anything in
Article VIII to the contrary, no claim may be asserted nor may any action be commenced against Purchaser pursuant to Section 8.02(a)(i), unless written notice of such claim or action is
received by Purchaser describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or
warranty on which such claim or action is based ceases to survive as set forth in Section 8.01. 

        (b)  Notwithstanding
anything in this Agreement to the contrary, no claim may be made against Purchaser for indemnification pursuant to Section 8.02(a)(i) with
respect to any individual item of Loss or items of Losses arising out of substantially similar facts and circumstances, unless such item or items of Losses exceed $100,000 (the
"Designated Amount") and no claim may be made against Purchaser pursuant to Section 8.02(a)(i) unless the aggregate of all such Losses of
the Seller Indemnified Parties referred to in Section 8.02(a)(i) shall exceed $1,000,000 (the "Purchaser's Threshold Amount"), after which
all indemnifiable Losses shall be payable, and not only the amount in excess of the Purchaser's Threshold Amount. Notwithstanding anything in this Agreement to the contrary, no Seller Indemnified
Party shall be indemnified pursuant to Section 8.02(a)(i) if, and to the extent that, the aggregate of all Losses of the Seller Indemnified Parties for which the Purchaser Indemnified
Parties previously shall have received indemnification pursuant to Section 8.02(a)(i) shall have exceeded 10% of the Base Purchase Price. 

        (c)  Payments
by Purchaser pursuant to Section 8.02(a) shall be limited to the amount of any Loss that remains after deducting therefrom any Tax benefit to the Seller
Indemnified Parties and any insurance proceeds and any indemnity, contribution or other similar payment recoverable by the Seller Indemnified Parties from any third party with respect thereto. A Tax
benefit will be considered to be recognized by the Seller Indemnified Parties for purposes of this Section 8.02 in the Tax period in which the indemnity payment occurs, and the amount of the
Tax benefit shall be determined by assuming that the Seller Indemnified Party is in the maximum applicable statutory Tax bracket after any deduction or other allowances reportable with respect to a
payment hereunder. 

        (d)  Any
Seller Indemnified Party shall give Purchaser prompt written notice of any claim, assertion, event or proceeding by or in respect of a third party of which such
Seller Indemnified Party has knowledge concerning any Loss as to which such Seller Indemnified Party may request indemnification hereunder; provided,
however, that the failure to give such notice shall not relieve Purchaser from any Liability or obligation pursuant to this Section 8.02 unless and only to the extent
Purchaser is materially prejudiced thereby. Purchaser shall have the right to assume, through counsel reasonably acceptable to Seller, the defense or settlement of any such claim or proceeding at its
own expense. If Purchaser elects to assume the defense of any such claim or proceeding, the Seller Indemnified Party may participate in such defense, but in such case the expenses of the Seller
Indemnified Party shall be paid by such Seller Indemnified Party, the Seller Indemnified Party shall provide Purchaser with reasonable access to its records and personnel relating to any such claim,
assertion, event or proceeding during normal business hours and shall otherwise cooperate with Purchaser in the defense or settlement thereof, and Purchaser shall reimburse such Seller Indemnified
Party for all the reasonable out-of-pocket expenses of such Seller Indemnified Party in connection therewith; provided, however,
that neither Seller nor Purchaser shall be required pursuant to this Section 8.02 to disclose any privileged information or any attorney work product. If Purchaser elects to assume the defense
of any such claim or proceeding, the Seller Indemnified Party shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability, unless Purchaser consents in
writing to such payment or unless Purchaser, subject to the last sentence of this Section 8.02(d), withdraws from the defense of such asserted liability, or unless a final judgment from which
no appeal may be taken by or on behalf of Purchaser is entered against the Seller Indemnified 

31

 

Party for such liability. If Purchaser shall fail to undertake any such defense, the Seller Indemnified Party shall have the right to undertake the defense or settlement thereof, at Purchaser's
expense. If the Seller Indemnified Party assumes the defense of any such claim or proceeding pursuant to this Section 8.02(d) and proposes to settle such claim or proceeding prior to a final
judgment thereon or to forgo appeal with respect thereto, then the Seller Indemnified Party shall give Purchaser prompt written notice thereof and Purchaser shall have the right to participate in the
settlement or assume or reassume the defense of such claim or proceeding. 

        (e)  Seller
hereby acknowledges and agrees that (except in the case of fraud, in which Seller reserves any and all rights and remedies available to it) its sole and exclusive
remedy with respect to any and all claims relating to the subject matter of this Agreement and the transactions contemplated hereby shall be pursuant to the indemnification provisions set forth in the
Tax Deed and in this Article VIII and specific performance as contemplated by Section 10.15. In furtherance of the foregoing, Seller hereby waives, to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action it may have against Purchaser or any of its Affiliates arising under or based upon any Law (including, without limitation, any such
rights, claims or causes of action arising under or based upon common law or otherwise) with respect to any and all claims relating to the subject matter of this
Agreement and the transactions contemplated hereby except as set forth in the preceding sentence (except in the case of fraud, in which case Seller reserves any and all rights and remedies available
to it). 

        (f)    Except
as expressly set forth in this Agreement, Purchaser is not making any representation, warranty, covenant or agreement with respect to the matters contained
herein. Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of Seller, after the
consummation of the purchase and sale of the Shares as contemplated by this Agreement, to rescind this Agreement or any of the transactions contemplated hereby. 

        (g)  Notwithstanding
anything to the contrary contained herein, Purchaser shall not be liable to or otherwise responsible to any other Person for consequential, incidental or
punitive damages or for diminution in value or lost profits that arise out of or related to this Agreement or the performance or breach thereof. 

        Section 8.03    Indemnification by Seller.    (a) Seller agrees, subject to the other terms and
conditions of this Agreement, to indemnify Purchaser and its Affiliates, officers, directors, employees, agents, successors and assigns (each a "Purchaser Indemnified
Party") against and hold them harmless from all Losses actually incurred by them arising out of (i) the breach of any representation or warranty of Seller herein and
(ii) the breach of any covenant or agreement of Seller herein (other than Section 3.25, the Tax Deed and Pension Schedule (other than Section 9(C) "Sex equality")), it being
understood that the sole remedy for breach of such representations, warranties, covenants and agreements shall be pursuant to the Tax Deed or Pension Schedule (other than Section 9(C) "Sex
equality"), as the case may be). Notwithstanding anything in this Article VIII to the contrary, no claim may be asserted nor may any action be commenced against Seller pursuant to
Section 8.03(a)(i) unless written notice of such claim or action is received by Seller describing in reasonable detail the facts and circumstances with respect to the subject matter of
such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 8.01. 

        (b)  Notwithstanding
anything in this Agreement to the contrary, no claim may be made against Seller for indemnification pursuant to Section 8.03(a)(i) with
respect to any individual item of Loss or items of Losses arising out of substantially similar facts and circumstances, unless such item or items of Losses exceed $100,000 (the
"Designated Amount") and no claim may be made against Seller pursuant to Section 8.03(a)(i) unless the aggregate of all such Losses of the
Purchaser Indemnified Parties referred to in Section 8.03(a)(i) shall exceed $1,000,000 (the "Seller's Threshold Amount"), after which 

32

 

all indemnifiable Losses shall be payable, and not only the amount in excess of the Seller's Threshold Amount. Notwithstanding anything in this Agreement to the contrary, no Purchaser Indemnified
Party shall be indemnified pursuant to Section 8.03(a)(i) if, and to the extent that, the aggregate of all Losses of the Purchaser Indemnified Parties for which the Purchaser Indemnified
Parties previously shall have received indemnification pursuant to Section 8.03(a)(i), together with the aggregate of all amounts with respect to Taxes for which Purchaser previously shall have
received indemnification pursuant to Section 8.03(a)(i), shall have exceeded 10% of the Base Purchase Price. In addition, no claim may be
made against Seller for indemnification pursuant to this Section 8.03 with respect to any individual item of Loss, if such claim otherwise was raised (whether or not accepted) in connection
with the Purchase Price adjustment procedures set forth in Section 2.08. 

        (c)  Payments
by Seller pursuant to Section 8.03(a) shall be limited to the amount of any Loss that remains after deducting therefrom (i) any Tax benefit to the
Purchaser Indemnified Parties; (ii) any insurance proceeds and any indemnity, contribution or other similar payment recoverable by the Purchaser Indemnified Parties from any third party with
respect thereto (other than in respect of insurance proceeds received from the Purchaser's warranty and indemnity insurance policy in relation to this Agreement); and (iii) any reserves
provided for the item in question in the Closing Balance Sheet. A Tax benefit will be considered to be recognized by the Purchaser Indemnified Party for purposes of this Section 8.03 in the Tax
period in which the indemnity payment occurs, and the amount of the Tax benefit shall be determined by assuming that Purchaser Indemnified Party is in the maximum applicable statutory Tax bracket
after any deduction or other allowances reportable with respect to a payment hereunder. 

        (d)  A
Purchaser Indemnified Party shall give Seller prompt written notice of any claim, assertion, event or proceeding by or in respect of a third party of which such
Purchaser Indemnified Party has knowledge concerning any Loss as to which such Purchaser Indemnified Party may request indemnification hereunder; provided,
however, that the failure to give such notice shall not relieve Seller from any Liability or obligation pursuant to this Section 8.03 unless and only to the extent that
Seller is materially prejudiced thereby. Seller shall have the right to assume, through counsel reasonably acceptable to Purchaser, the defense or settlement of any such claim or proceeding at its own
expense. If Seller elects to assume the defense of any such claim or proceeding, Purchaser Indemnified Party may participate in such defense, but in such case the expenses of Purchaser Indemnified
Party shall be paid by Purchaser Indemnified Party. Purchaser Indemnified Party shall provide Seller with reasonable access to its records and personnel relating to any such claim, assertion, event or
proceeding during normal business hours and shall otherwise cooperate with Seller in the defense or settlement thereof, and Seller shall reimburse Purchaser Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith; provided, however, that neither Purchaser nor Seller shall be required pursuant
to this Section 8.03 to disclose any privileged information or any attorney work product. If Seller elects to assume the defense of any such claim or proceeding, Purchaser Indemnified Party
shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability unless Seller consents in writing to such payment or unless Seller, subject to the last
sentence of this Section 8.03(d), withdraws from the defense of such asserted liability or unless a final judgment from which no appeal may be taken by or on behalf of Seller is entered against
Purchaser Indemnified Party for such liability. If Seller shall fail to undertake any such defense, Purchaser Indemnified Party shall have the right to undertake the defense or settlement thereof, at
Seller's expense. If Purchaser Indemnified Party assumes the defense of any such claim or proceeding pursuant to this Section 8.03(d) and proposes to settle such claim or proceeding prior to a
final judgment thereon or to forgo any appeal with respect thereto, then Purchaser Indemnified Party shall give Seller prompt written notice thereof and Seller shall have the right to participate in
the settlement or assume or reassume the defense of such claim or proceeding. 

33

  

        (e)  Purchaser hereby acknowledges and agrees that (except in the case of fraud, in which case Purchaser reserves any and all rights and remedies available to it) its sole
and exclusive remedy with respect to any and all claims relating to the subject matter of this Agreement and the transactions contemplated hereby shall be pursuant to the indemnification provisions
set forth in the Tax Deed and in this Article VIII and specific performance as contemplated by Section 10.15. In furtherance of the foregoing, Purchaser hereby waives, to the fullest
extent permitted under applicable Law, any and all rights, claims and causes of action it may have against Seller or any of its Affiliates arising under or based upon any Law (including, without
limitation, any such rights, claims or causes of action arising under or based upon common law or otherwise) with respect to any and all claims relating to the subject matter of this Agreement and the
transactions contemplated hereby except as set forth in the preceding sentence (except in the case of fraud, in which case Purchaser reserves any and all rights and remedies available to it). 

        (f)    Except
as expressly set forth in this Agreement, Seller is not making any representation, warranty, covenant or agreement with respect to the Shares, the Grafts Business
or any other matter contained herein. Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on
the part of Purchaser, after the consummation of the purchase and sale of the Shares as contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby. 

        (g)  Purchaser
acknowledges that it is not aware at the date of this Agreement (or the Closing Date as applicable) of any breach of the representations and warranties given
by the Seller in Article III, except for those matters set forth in the Disclosure Letter. 

        (h)  Notwithstanding
anything to the contrary contained herein, Seller shall not be liable to or otherwise responsible to any other Person for consequential, incidental or
punitive damages or for diminution in value or lost profits that arise out of or relate to this Agreement or the performance or breach thereof. 

 
 

ARTICLE IX    
    
    TERMINATION AND WAIVER    

        Section 9.01    Termination.    This Agreement may be terminated at any time prior to the Closing: 

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

        (b)  by
either Seller or Purchaser, if the Closing shall not have occurred prior to March 31, 2003, provided, however,
that the right to terminate this Agreement under this Section 9.01 shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of,
or shall have resulted in, the failure of the Closing to occur prior to such date; or 

        (c)  by
either Seller or Purchaser, in the event of the issuance of a final, nonappealable Governmental Order restraining or prohibiting the transactions contemplated hereby;
or 

        (d)  by
Purchaser if, between the date hereof and the time scheduled for the Closing, Seller shall not have complied in all material respects with any material covenant or
agreement to be complied with by it and contained in this Agreement; or 

        (e)  by
Seller if, between the date hereof and the time scheduled for the Closing, Purchaser shall not have complied in all material respects with any material covenant or
agreement to be complied with by it and contained in this Agreement. 

        Section 9.02    Effect of Termination.    (a) (i) In the event of the termination of this Agreement by
the Seller prior to the Closing pursuant to Section 9.01(b), or 9.01(e), Purchaser shall as soon as 

34

 

practicable thereafter reimburse Seller for all of its reasonably documented out-of-pocket costs and expenses (including attorney's fees) incurred in connection with this
Agreement and in pursuit of the transactions contemplated hereby in cash, by wire transfer in immediately available funds to an account designated in writing by Seller and (ii) in the event of
the termination of this Agreement by the Purchaser prior to the Closing pursuant to Section 9.01(b) or 9.01(d), Seller shall as soon as practicable thereafter reimburse Purchaser for all of its
reasonably documented out-of-pocket costs and expenses (including attorney's fees) incurred in connection with this Agreement and in pursuit of the transactions contemplated
hereby in cash, by wire transfer in immediately available funds to an account designated in writing by Purchaser; provided, however, that any failure to
satisfy the closing condition specified in Section 7.01(d) shall not result in any payment by Seller pursuant to this Section 9.02(a)(ii). 

        (b)  In
the event of termination of this Agreement as provided in Section 9.01, this Agreement shall forthwith become void and there shall be no further liability on
the part of any party hereto (i) except
as set forth in Section 5.02(c), Section 8.02(a) and Section 10.01, and (ii) nothing herein shall relieve either party from liability for any breach hereof. 

        Section 9.03    Waiver.    Either party hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other party hereto; (ii) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant
hereto or; (iii) waive compliance with any of the agreements of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound thereby. 

 
 

ARTICLE X    
    
    GENERAL PROVISIONS    

        Section 10.01    Expense.    Except as otherwise specified in this Agreement, all costs and expenses,
including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid
by the party incurring such costs and expenses, whether or not the Closing shall have occurred. 

        Section 10.02    Notices.    All notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this
Section 10.02): 

        (a)  if
to any Selling Entity: 

Centerpulse
(U.K.) Holding Limited

Newmans Avenue

Inchinnan

GB-Renfrewshire

PA4 9RR

Scotland UK

Telecopy No.: 44 141 812 5555

Attention: Roshan Maini 

with
a copy to: 

McDermott,
Will & Emery

50 Rockefeller Plaza, 11th Floor

New York, New York 10020-1605

35

 

Telecopy No.: (212) 547-5444

Attention: Spencer D. Klein, Esq. 

        (b)  if
to Purchaser: 

Terumo
Corporation

2-44-1, Hatagaya, Shibuya-Ku

Tokyo, 151-0072 Japan

Telecopy No.: 81 3 (3374) 8168

Attention: Koji Nakao 

with
a copy to: 

Simmons &
Simmons

CityPoint

One Ropemaker Street

London EC2Y 955

Telecopy No.: 44 20 7628 2070

Attention: Isabella MH Roberts 

        Section 10.03    Public Announcements.    Except as required by Law or by the requirements of any securities
exchange on which the securities of a party hereto are listed, no party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the
transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party, and the parties shall cooperate as to the timing and contents of any
such press release or public announcement. 

        Section 10.04    Headings.    The descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of this Agreement. 

        Section 10.05    Severability.    If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 

        Section 10.06    Entire Agreement.    This Agreement, together will all the agreements entered into pursuant
hereto, constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, other than the
Confidentiality Agreement, with respect to the subject matter hereof. 

        Section 10.07    Assignment; Fulfillment of Obligations.    (a) This Agreement shall not be assigned
without the express written consent of Seller and Purchaser (which consent may be granted or withheld in the sole discretion of Seller and Purchaser), except that either party hereto may assign its
rights hereunder to a wholly owned subsidiary of such party; provided, however, that any such assignment shall not relieve the assigning party of its
obligations hereunder; and provided further that any assignment by Purchaser hereunder to any of its wholly owned subsidiaries shall cease to be
effective if such subsidiary ceases to be a wholly owned subsidiary of Purchaser. 

36

 

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

        Section 10.08    No Third Party Beneficiaries.    Subject to the provisions of Article VIII relating to
the Seller Indemnified Parties or the Purchaser Indemnified Parties, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Except
as provided in Article VIII, no person who is not a party to this Agreement shall have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. 

        Section 10.09    Amendment.    This Agreement may not be amended or modified except by an instrument in writing
signed by, or on behalf of, Seller and Purchaser. 

        Section 10.10    Rights Cumulative and Other Matters.    (a) Except as otherwise provided in this
Agreement, the rights, powers, privileges and remedies provided in this Agreement are cumulative and are not exclusive of any rights, powers, privileges or remedies provided by law or otherwise. 

        (b)  No
failure to exercise nor any delay in exercising any right, power, privilege or remedy under this Agreement shall in any way impair or affect the exercise thereof or
operate as a waiver thereof in whole or in part. 

        (c)  No
single or partial exercise of any right, power, privilege or remedy under this Agreement shall prevent any further or other exercise thereof or the exercise of any
other right, power, privilege or remedy. 

        Section 10.11    Governing Law.    This Agreement shall be governed by the laws of England and Wales. The
parties hereto hereby irrevocably submit to the exclusive jurisdiction of the courts of England and Wales in any action or proceeding to enforce this Agreement or arising out of or relating to this
Agreement and irrevocably waive any objection to such proceedings on the grounds of an inconvenient forum. 

        Section 10.12    Counterparts.    This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 

        Section 10.13    Disclosure Letter.    The parties hereto acknowledge that certain matters set forth in the
Disclosure Letter are included for informational purposes only, notwithstanding the fact that, because they do not rise above applicable materiality thresholds or otherwise, they would not be required
to be set forth therein by the terms of this Agreement and that disclosure of such matters shall not be taken as an admission by Seller or any of its Affiliates that such disclosure is required to be
made under the terms of any provision of this Agreement and in no event shall the disclosure of such matters be deemed or interpreted to broaden or otherwise amplify the representations and warranties
contained in this Agreement. Disclosure of any fact or item in a section of the Disclosure Letter shall be deemed to be disclosed with respect to any other applicable section whether or not an
explicit cross-reference appears. 

        Section 10.14    Currency.    Unless otherwise specified in this Agreement, all references to currency,
monetary values and dollars set forth herein shall mean United States (U.S.) Dollars and all payments hereunder shall be made in United States Dollars. 

        Section 10.15    Specific Performance.    The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity. 

[Signature
Page follows] 

37

   
        IN WITNESS WHEREOF, Seller, CUH, CGHG and Purchaser have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. 

	

 	
 	

CENTERPULSE USA HOLDING CO.
	

 	
 	

By:	

/s/  GABOR-PAUL ONDO      

	 	 	 	Name:	Gabor-Paul Ondo
	 	 	 	Title:	President
	

 	
 	

CENTERPULSE USA HOLDING CO.
	

 	
 	

By:	

/s/  ROSHAN MAINI      

	 	 	 	Name:	Roshan Maini
	 	 	 	Title:	President
	

 	
 	

By:	

/s/  FRANK CARROLL      

	 	 	 	Name:	Frank Carroll
	 	 	 	Title:	Vice President of Finance and Human Resources
	

 	
 	

CENTERPULSE (UK) HOLDINGS LTD.
	

 	
 	

By:	

/s/  URS KAMBER      

	 	 	 	Name	Urs Kamber
	 	 	 	Title	Managing Director
	

 	
 	

By:	

/s/  MARCEL BAUCKHAGE      

	 	 	 	Name:	Marcel Bauckhage
	 	 	 	Title:	Managing Director

38

 

	

 	
 	

In Respect of Section 5.07 only:
	

 	
 	

CENTERPULSE AG
	

 	
 	

By:	

/s/  URS KAMBER      

	 	 	 	Name:	Urs Kamber
	 	 	 	Title:	Chairman and Chief Executive Officer
	

 	
 	

By:	

/s/  MAX LINK      

	 	 	 	Name:	Max Link
	 	 	 	Title:	Chief Financial Officer
	

 	
 	

TERUMO CORPORATION
	

 	
 	

By:	

/s/  KOJI NAKAO      

	 	 	 	Name:	Koji Nakao
	 	 	 	Title:	Director and Managing Executive Officer, President, Cardiovascular

39

  

 
 

SCHEDULE OF AFFILIATED COMPANIES    
  

Sulzer
Cardiovascular GmbH,

a company organized under the laws of the Federal Republic of Germany 

Sulzer
Vascutek USA Inc.,

a corporation incorporated in the State of Delaware 

40

 
 
 

SCHEDULE OF RELATED COMPANIES    
  

Sulzer
Cardiovascular SA,

a company organized under the laws of France 

Sulzer
Cardiovascular AG,

a company organized under the laws of Switzerland 

Sulzer
Medica Canada Inc.,

a company organized under the laws of Canada 

Sulzer
Cardiovascular BV,

a company organized under the laws of the Netherlands 

Sulzer
Medica Australia Pty Ltd.,

a company organized under the laws of Australia 

41

QuickLinks

Exhibit 4.25

TABLE OF CONTENTS

W I T N E S S E T H

ARTICLE I DEFINITIONS

ARTICLE II PURCHASE AND SALE

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER

ARTICLE V ADDITIONAL AGREEMENTS

ARTICLE VI EMPLOYEE MATTERS

ARTICLE VII CONDITIONS TO CLOSING

ARTICLE VIII INDEMNIFICATION

ARTICLE IX TERMINATION AND WAIVER

ARTICLE X GENERAL PROVISIONS

SCHEDULE OF AFFILIATED COMPANIES

SCHEDULE OF RELATED COMPANIES

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