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Exhibit 4.6    
    

 
  EXECUTION COPY    
    

Agreement

As
of 14 December 2006 

(this
"Agreement") 

Between 

Novartis AG

Lichtstrasse 35

4056 Basel

Switzerland 

(the
"Seller") 

and

Nestlé S.A.

Avenue Nestlé, 55

1800 Vevey

Switzerland 

(the
"Buyer") 

Concerning 

the
Sale and Purchase of 

the
Seller's Medical Nutrition Business 

 
 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	 
	 	Page

	1.	 	DEFINITIONS AND INTERPRETATION	 	1
	 	 	1.1	 	Definitions	 	1
	 	 	1.2	 	Interpretation	 	17
	2.	 	SALE AND PURCHASE	 	17
	 	 	2.1	 	Objects of Sale and Purchase	 	17
	 	 	2.2	 	Assumption and Exclusion of Liabilities	 	22
	 	 	2.3	 	Purchase Price	 	24
	 	 	2.4	 	Intercompany Indebtedness	 	26
	 	 	2.5	 	Licenses for Certain Know-How	 	 
	3.	 	TRANSITIONAL SERVICES	 	27
	4.	 	REPRESENTATIONS AND WARRANTIES OF THE SELLER	 	27
	 	 	4.1	 	Organization, Authority and Qualification of the Companies	 	27
	 	 	4.2	 	Organization and Authority of the Seller	 	28
	 	 	4.3	 	Capital Stock of the Companies	 	28
	 	 	4.4	 	Ownership of the Shares	 	29
	 	 	4.5	 	No Conflict	 	29
	 	 	4.6	 	Financial Statements; Other Liabilities	 	00
	 	 	4.7	 	Statutory Accounts	 	30
	 	 	4.8	 	Agreements	 	00
	 	 	4.9	 	Insurance	 	32
	 	 	4.10	 	Real Property	 	32
	 	 	4.11	 	Personnel	 	33
	 	 	4.12	 	Employee Plans	 	34
	 	 	4.13	 	Taxes	 	36
	 	 	4.14	 	No Material Adverse Effects	 	37
	 	 	4.15	 	Conduct of Business Since 30 September 2006	 	37
	 	 	4.16	 	Litigation and Other Proceedings; Orders	 	39
	 	 	4.17	 	Licenses and Permits	 	39
	 	 	4.18	 	Environmental Matters	 	39
	 	 	4.19	 	Governmental Consents and Approvals	 	41
	 	 	4.20	 	Intellectual Property and Know-How	 	41
	 	 	4.21	 	Tangible Personal Property	 	43
	 	 	4.22	 	Assets	 	43
	 	 	4.23	 	Compliance with Legal Requirements	 	43
	 	 	 	 	 	 	 

i

 

	 	 	4.24	 	Business Products	 	44
	 	 	4.25	 	Brokers	 	44
	5.	 	REPRESENTATIONS AND WARRANTIES OF THE BUYER	 	44
	 	 	5.1	 	Organization and Authority	 	44
	 	 	5.2	 	No Conflict	 	45
	 	 	5.3	 	Governmental Consents	 	45
	 	 	5.4	 	Financing of the Transactions	 	45
	6.	 	INDEMNIFICATION	 	46
	 	 	6.1	 	Indemnification by the Seller	 	46
	 	 	6.2	 	Indemnification by the Buyer	 	48
	 	 	6.3	 	Survival and Notice of Claims	 	49
	 	 	6.4	 	Remedies	 	50
	 	 	6.5	 	Third Party Claims	 	50
	 	 	6.6	 	Tax Indemnification	 	51
	 	 	6.7	 	Tax Refunds	 	52
	 	 	6.8	 	Tax Contests	 	52
	 	 	6.9	 	Tax Returns and Payments	 	53
	 	 	6.10	 	Treatment of Indemnity Payments	 	53
	 	 	6.11	 	No Duplicative Adjustments	 	53
	7.	 	OTHER COVENANTS OF THE PARTIES	 	54
	 	 	7.1	 	Access to Information Prior to the Closing Date	 	54
	 	 	7.2	 	Access to Information After the Closing Date	 	54
	 	 	7.3	 	Investigation	 	55
	 	 	7.4	 	Employee and Related Matters	 	55
	 	 	7.5	 	Insurance	 	58
	 	 	7.6	 	Further Action	 	59
	 	 	7.7	 	Regulatory and Other Authorizations	 	60
	 	 	7.8	 	Non-Competition	 	63
	 	 	7.9	 	Conduct of the Business	 	65
	 	 	7.10	 	Termination of Intra-Group Agreements	 	67
	 	 	7.11	 	Notifications	 	67
	 	 	7.12	 	Bulk Transfer Laws	 	67
	 	 	7.13	 	Conveyance Taxes; Proration of Taxes and Certain Charges	 	67
	 	 	7.14	 	Real Estate Matters	 	68
	 	 	7.15	 	Litigation Support	 	69
	 	 	 	 	 	 	 

ii

 

	 	 	7.16	 	Trade Notifications	 	69
	 	 	7.17	 	Interim Financial Statements	 	69
	 	 	7.18	 	Tax Election	 	69
	8.	 	CONDITIONS PRECEDENT; WAIVER; TERMINATION	 	70
	 	 	8.1	 	Conditions Precedent to Performance of the Parties	 	70
	 	 	8.2	 	Conditions Precedent to Performance of the Seller	 	71
	 	 	8.3	 	Conditions Precedent to Performance of the Buyer	 	72
	 	 	8.4	 	Waiver; Determination of Satisfaction of Conditions	 	72
	 	 	8.5	 	Termination	 	72
	9.	 	CLOSING	 	73
	 	 	9.1	 	Closing Date	 	73
	 	 	9.2	 	Delivery	 	73
	 	 	9.3	 	Discharge of Previous Board Members	 	74
	 	 	9.4	 	Use of NOVARTIS Trademark	 	75
	10.	 	MISCELLANEOUS	 	75
	 	 	10.1	 	Entire Agreement	 	75
	 	 	10.2	 	Transaction Costs	 	75
	 	 	10.3	 	Modifications	 	75
	 	 	10.4	 	Notices	 	76
	 	 	10.5	 	Public Announcements	 	76
	 	 	10.6	 	Severability	 	76
	 	 	10.7	 	Assignment	 	77
	 	 	10.8	 	Schedules and Exhibits	 	77
	 	 	10.9	 	Confidentiality Agreement	 	77
	 	 	10.10	 	Translation of Currencies	 	77
	 	 	10.11	 	Governing Law	 	78
	 	 	10.12	 	Specific Performance	 	78
	 	 	10.13	 	Dispute Resolution	 	78
	 	 	10.14	 	Counterparts; Facsimile Signature	 	78
	 	 	10.15	 	Further Assurances	 	78
	 	 	10.16	 	Rights Cumulative	 	79

iii

 
 
 

LIST OF SCHEDULES    
    

	Schedule 1(a)(i)	 	Asset Selling Subsidiaries
	Schedule 1(a)(ii)	 	Business Products
	Schedule 1(a)(iii)	 	Data Room Index
	Schedule 1(a)(iv)	 	Permitted Encumbrances
	Schedule 1(a)(v)(A)	 	Persons with Seller's Knowledge
	Schedule 1(a)(v)(B)	 	Due Inquiry Individuals
	Schedule 1(a)(vi)	 	Share Selling Subsidiaries
	Schedule 1(a)(vii)	 	Working Capital
	Schedule 1(a)(viii)	 	Works Councils
	Schedule 1(a)(ix)	 	Calculation of Net Debt Position as of 31 October 2006
	Schedule 2.1(j)(i)	 	Transferred Leased Real Property
	Schedule 2.1(j)(vii)	 	Separate Intellectual Property
	Schedule 2.1(k)(v)	 	Additional Excluded Assets
	Schedule 2.1(k)(xii)	 	Excluded Agreements
	Schedule 2.3(g)	 	Allocation of Purchase Price
	Schedule 3	 	Transitional Services
	Schedule 4.3	 	Capital Stock of the Companies
	Schedule 4.6(a)	 	Financial Statements
	Schedule 4.6(b)	 	Notes to Financial Statements
	Schedule 4.8(a)	 	Material Contracts
	Schedule 4.8(b)	 	Conflicts
	Schedule 4.9	 	Insurance
	Schedule 4.10(a)	 	Owned Real Property
	Schedule 4.10(b)	 	Leased Real Property
	Schedule 4.10(c)	 	Real Property Encumbrances
	Schedule 4.11(a)(i)	 	Collective Bargaining Agreements
	Schedule 4.11(a)(ii)	 	Labor Proceedings
	Schedule 4.11(b)	 	Agreements in Respect of Thirty-Five (35) Hour Work Week
	Schedule 4.11(c)	 	Transaction Compensation Arrangements
	Schedule 4.12(a)	 	Employee Benefit Plans
	Schedule 4.12(c)	 	Employee Benefit Plans Compliance
	Schedule 4.12(f)	 	Employee Benefit Plan Proceedings
	Schedule 4.12(g)(i)	 	Accelerated Benefits
	Schedule 4.12(g)(ii)	 	Benefit Commitments
	Schedule 4.12(h)	 	Welfare Benefit or Insurance
	Schedule 4.12(i)	 	Plan Amendments
	Schedule 4.13	 	Tax Matters
	Schedule 4.15	 	Conduct of Business
	Schedule 4.16	 	Litigation and Other Proceedings; Orders
	Schedule 4.17	 	Governmental Permits
	Schedule 4.18	 	Environmental Matters
	Schedule 4.19	 	Governmental Consents and Approvals
	Schedule 4.20(a)(i)	 	Intellectual Property; Record and Beneficial Ownership
	Schedule 4.20(a)(ii)	 	Intellectual Property Ownership Exceptions
	Schedule 4.20(b)	 	Adverse Claims to Intellectual Property
	Schedule 4.20(c)	 	Know-How
	Schedule 4.20(d)	 	Confidentiality of Know-How
	 	 	 

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	Schedule 4.20(e)	 	Violations Against Intellectual Property or Know-How Owned by Third Parties
	Schedule 4.22(a)	 	Sufficiency of Assets
	Schedule 4.22(c)	 	Known or Anticipated Capital Expenditures
	Schedule 4.23	 	Compliance with Legal Requirements
	Schedule 4.24	 	Product Registrations
	Schedule 5.3	 	Buyer Governmental Consents and Approvals
	Schedule 7.4	 	Transferred Employee Benefit Plan Principles
	Schedule 7.4(c)	 	Employment Agreements for Senior Employees
	Schedule 7.9	 	Conduct of the Business Between the Signing and the Closing Date
	Schedule 7.10(b)	 	Transitional Services to Be Provided to the Seller
	Schedule 7.10(c)	 	Intra-Group Agreements Not Terminated as of the Closing Date
	Schedule 8.1	 	Required Regulatory Approvals
	Schedule 9.2(a)(iv)	 	Company Directors to Resign Effective as of the Closing Date

 
 

LIST OF EXHIBITS    
    

	Exhibit 1(a)	 	Form of Assignment of Lease
	Exhibit 1(b)	 	Form of Assignment of Governmental Permits
	Exhibit 1(c)	 	Form of Assignment of Product Registrations
	Exhibit 1(d)	 	Form of Assignment of Separate Intellectual Property
	Exhibit 1(e)	 	Form of Bill of Sale, Assignment and Assumption Agreement
	Exhibit 1(f)	 	Forms of Intellectual Property License Agreements
	Exhibit 2.1	 	Form of Share Purchase Agreement
	Exhibit 3	 	Form of Transition Services Agreement

v

 
 

AGREEMENT    
    

Preamble:  

        WHEREAS, the Seller directly or indirectly owns all of the issued and outstanding share capital (the
"Shares") of (i) Novartis Nutrition GmbH ("Nutrition GmbH Austria"), (ii) Novartis
Nutrition S.A.S. ("Nutrition S.A.S."), (iii) Novartis Nutrition GmbH (Germany) ("Nutrition GmbH
Germany"), (iv) Novartis Nutrition K.K. ("Nutrition K.K."), (v) Novartis Medical Nutrition (Sweden) AB
("Nutrition AB") and (vi) Novartis Nutrition Corporation ("Nutrition Corporation") (collectively,
the "Companies"), and of the Asset Selling Subsidiaries (as defined below); 

        WHEREAS, the Seller directly and indirectly through certain of its direct and indirect subsidiaries, including the Companies and the Asset
Selling Subsidiaries, is engaged in the business (such business, as conducted in its entirety by the Seller and its direct and indirect subsidiaries, the "Medical Nutrition
Business" or the "Business") of developing, manufacturing, marketing, distributing and selling enteral nutrition and oral
nutrition products and medical devices related to enteral nutrition at various locations around the world; for the avoidance of doubt, the Business does not include any business or activities
conducted by Gerber or Novartis OTC and Transitional Services activities of the Affiliates of Seller; 

        WHEREAS, it is expected that the assets and corresponding liabilities relating to the operation of the Business in each of Canada, Brazil
and Italy may be transferred to separate entities incorporated in each of the respective jurisdictions prior to Closing (such transactions being referred to as the
"Spin-Offs"); and 

        WHEREAS, the Seller, either directly or through an Affiliate, wishes to sell to the Buyer, and the Buyer wishes to purchase, either
directly or through the Buyer Designated Affiliate, from the Seller, the Business, including the Shares and the Purchased Assets (as defined hereafter), and in connection therewith the Buyer is
willing to assume from the Seller all of the Assumed Liabilities (as defined hereafter), all upon the terms and subject to the conditions set forth herein; 

        NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, and the mutual agreements and covenants hereinafter set forth, the Buyer and the Seller hereby agree as follows: 

1.     DEFINITIONS AND INTERPRETATION  

	1.1
	Definitions. For purposes of this Agreement, including the Preamble, the following terms have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the terms defined): 

	"Accounting Principles"	 	The accounting principles, methods and policies specified in the Seller's accounting manual for the years ended 2004, 2005 and 2006, respectively, which are consistent with International Financial Reporting
Standards.
	

"Acquired Business"	
 	

Any business acquired by the Seller or any of its Affiliates, or with which the Seller or any of its Affiliates effects a merger, consolidation or other business combination, or any partnership or joint venture in which the Seller or any of its
Affiliates has a majority interest, in each case after the Closing Date.
	

"Affiliate"	
 	

With respect to any specified Person, any other Person that controls, is controlled by or is under common control with such Person (it being understood that a Person will be deemed to "control" another
Person, for purposes of this definition, if such Person directly or indirectly has the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities of such other Person,
 through contract or otherwise).
	 	 	 

 

	

"Agreement"	
 	

As defined on the title page.
	

"Ancillary Agreements"	
 	

The Assignments of Leases, the Assignment of Governmental Permits, the Assignment of Product Registrations, the Assignment of Separate Intellectual Property, the Bills of Sale, the Transition Services Agreement, the Intellectual Property License
Agreements and the Share Purchase Agreements, in each case to be executed and delivered at Closing in accordance with the terms hereof.
	

"Assets"	
 	

The Purchased Assets and the assets and properties of the Companies.
	

"Asset Selling Subsidiaries"	
 	

The subsidiaries of the Seller listed in Schedule 1(a)(i), which term shall include the Brazilian Subsidiary and the Italian Subsidiary, if the Spin-Offs for Italy and Brazil have not been completed as
of the Closing Date.
	

"Assignment of Governmental Permits"	
 	

The Assignment of Governmental Permits to be executed by the Seller or one or more of its Affiliates at the Closing with respect to the Governmental Permits used by the Seller and the Asset Selling Subsidiaries exclusively in the conduct of the
Business as currently conducted, substantially in the form of Exhibit 1(b).
	

"Assignment of Product Registrations"	
 	

The Assignment of Product Registrations to be executed by the Seller or one or more of its Affiliates at the Closing with respect to the Product Registrations, substantially in the form of Exhibit 1(c).
	

"Assignment of Separate Intellectual Property"	
 	

The Assignment of Separate Intellectual Property to be executed by the Seller at the Closing, substantially in the form of Exhibit 1(d).
	

"Assignments of Lease"	
 	

The Assignments of Lease to be executed by the Seller or one of its Affiliates at the Closing with respect to each parcel of Leased Real Property leased by an Asset Selling Subsidiary and listed in Schedule 2.1(j)(i),
substantially in the form of Exhibit 1(a).
	

"Assumed Liabilities"	
 	

As defined in Section 2.2(a).
	

"Base Purchase Price"	
 	

As defined in Section 2.3(a).
	

"Benefits Transition Agreement"	
 	

As defined in Section 7.4(l).
	

"Bills of Sale"	
 	

The Bill of Sale, Assignment and Assumption Agreements to be executed by the Seller or one or more of its Affiliates at the Closing, substantially in the form of Exhibit 1(e), together with such
amendments or modifications thereto as are customary in the jurisdiction in which the Purchased Assets are located.
	

"Brazilian Subsidiary"	
 	

Novartis Biociencias S.A.
	

"Business"	
 	

As defined in the Preamble.
	

"Business Day"	
 	

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 Basel, Switzerland.
	 	 	 

2

 

	

"Business Employees"	
 	

The employees who are on the payroll or treated as though they are on the payroll of the Business as of the Closing Date and to whom the Buyer will offer employment in accordance with Section 7.4(a).
	

"Business Employee Plan"	
 	

Any Novartis Plan which covers any current or former Business Employees.
	

"Business Orders"	
 	

As defined in Section 4.16.
	

"Business Products"	
 	

Goods produced, distributed, marketed or sold by the Business on the Closing Date under the brand names listed in Schedule 1(a)(ii), or otherwise.
	

"Buyer"	
 	

As defined on the title page.
	

"Buyer Designated Affiliate"	
 	

As defined in Section 10.7.
	

"Buyer Incurred Damages"	
 	

As defined in Section 6.1(a).
	

"Buyer's Clinical Nutrition Business"	
 	

The business conducted by the Buyer and its Affiliates (including by using assets, properties and rights used by the relevant business unit(s) of the Buyer and its Affiliates) of developing, manufacturing, marketing, distributing and selling enteral
nutrition products (including both branded and unbranded products and also tube feed and sip feed products) and clinical oral nutrition products (including both branded and unbranded products and includes all packaging types), in both the
institutional and retail channels, and medical devices related to enteral nutrition.
	

"Cash Pooling Loans"	
 	

As defined in Section 2.4.
	

"Closing"	
 	

As defined in Section 9.1.
	

"Closing Date"	
 	

As defined in Section 9.1.
	

"Closing Date Net Debt"	
 	

As defined in Section 2.3(d).
	

"Closing Date Working Capital"	
 	

As defined in Section 2.3(d).
	

"Code"	
 	

The United States Internal Revenue Code of 1986, as amended.
	

"Commissioner"	
 	

As defined in Section 8.1(a).
	

"Companies"	
 	

As defined in the Preamble, including from after the consummation of the relevant Spin-Offs, Nutrition Canada, Nutrition Italy and Nutrition Brazil.
	

"Companies' Intellectual Property"	
 	

As defined in Section 4.20(a).
	

"Companies' Know-How"	
 	

All Know-How owned by the Companies.
	

"Competition Act"	
 	

As defined in Section 4.19.
	

"Confidentiality Agreement"	
 	

As defined in Section 10.1.
	

"Contest"	
 	

As defined in Section 6.8(b).
	

"Corporate Balance Sheet Items"	
 	

As defined in Section 4.6(a).
	

"Current Assets"	
 	

The aggregate amount in US dollars of current assets included in accordance with the Accounting Principles consistently applied in the line items specified under the caption "Assets" in Schedule 1(a)(vii), to the extent not included in the calculation of the Net Debt Position.
	 	 	 

3

 

	

"Current Liabilities"	
 	

The aggregate amount in US dollars of current liabilities included in accordance with the Accounting Principles consistently applied in the line items specified under the caption "Liabilities" in Schedule 1(a)(vii)
, to the extent not included in the calculation of the Net Debt Position.
	

"Data Room"	
 	

The documents and information relating to the Business made available through 12 December 2006 to the Buyer, its Affiliates, directors, officers, employees, advisers or agents through a virtual data room, an index of the contents of which is set
forth in Schedule 1(a)(iii).
	

"De Minimis"	
 	

As defined in Section 6.1(b).
	

"Determination Date"	
 	

As defined in Section 2.3(e).
	

"Directive"	
 	

Within the European Union, any legislation, regulation, enactment, agreement or other instrument implementing the provisions of EC Directives No 77/187 dated 14 February 1977 (as modified by EC Directive 98/50/EC) or 2001/23/EC dated 12 March 2001 or
legislation having equivalent effect, and in other jurisdictions, any federal, state or local legislation, regulation, enactment, agreement or other instrument having equivalent effect.
	

"Employment Transfer Date"	
 	

As defined in Section 7.4(a).
	

"Encumbrance"	
 	

Any security interest, pledge, hypothecation, mortgage or lien, other than any licenses of Intellectual Property.
	

"Environmental Law"	
 	

Any national, state, provincial, municipal, county, city, local or similar statute, law, constitution, ordinance, regulation, rule, code, order, consent decree, directive or judgment, as in effect on the Closing Date relating directly or indirectly
to (i) the environmental aspects of product approvals; (ii) the protection of the environment or natural resources (including air, water vapor, surface water, sediments, groundwater, drinking water supply, wastewater treatment, surface or subsurface
land); or (iii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, recycling, release or disposal of, Hazardous Substances.
	

"Environmental Liabilities"	
 	

Any claim, demand, order, suit, obligation, liability, cost (including the cost of any investigation, testing, compliance or remedial action), loss or expense (including reasonable and incurred attorney's and consultant's fees and expenses) arising
out of, relating to or resulting from any Environmental Law or environmental, health or safety matter or condition, including natural resources, and related in any way to the Assets or to this Agreement or its subject matter, in each case whether
arising or incurred before, at or after the Closing.
	

"Environmental Permits"	
 	

Any permit, approval, license or other authorization required by a Governmental Authority under or issued by a Governmental Authority pursuant to any applicable Environmental Law.
	 	 	 

4

 

	

"Estimated Closing Net Debt"	
 	

As defined in Section 2.3(b).
	

"Estimated Closing Net Debt Statement"	
 	

As defined in Section 2.3(b).
	

"European Commission"	
 	

The Commission of the European Communities.
	

"Even Santé Prepayment"	
 	

The prepayment advanced by Nutrition S.A.S. in the amount reflected on the balance sheet of the Business as of the Closing Date pursuant to that certain Supply and Development Agreement, dated 27 May 2003, by and between Even Santé Industrie
S.A.S. and Nutrition S.A.S., as replaced and superceded by the Supply and Development Agreement, effective 1 January 2007, by and between Even Santé Industrie S.A.S. and Novartis Consumer Health S.A.
	

"Excluded Agreements"	
 	

As defined in Section 2.1(k)(xii).
	

"Excluded Assets"	
 	

As defined in Section 2.1(k).
	

"Excluded Liabilities"	
 	

As defined in Section 2.2(b).
	

"Excluded Taxes"	
 	

(i) All Taxes relating to the Purchased Assets or the Business for any Pre-Closing Period; (ii) all Taxes imposed on or payable by any Company for any Pre-Closing Period; (iii) with respect to Straddle Periods, Taxes imposed on any Company that are
allocable, pursuant to Section 6.6(a), to the portion of such period ending on the Closing Date; (iv) Taxes attributable to a taxable period (or portion of a taxable period) ending on or before the Closing Date for which any Company is held liable by
reason of having been a member of a consolidated, combined or unitary group with any Seller (or any Affiliate of a Seller) prior to the Closing (v) all Taxes of any Person (other than a Company) imposed on any Company as a transferee or successor, by
contract or pursuant to any law, rule, or regulation for a taxable period ending on or before the Closing Date; and (vi) all Taxes resulting from "excess parachute payments" as defined in section 280G of the Code (without regard to subsection
280G(b)(4)) payable as a result of the transactions contemplated by this Agreement, including (A) the Tax cost of not being permitted to take a Tax deduction for such payments, (B) the reimbursement to a Business Employee for such Taxes, and (C) any
gross-up or other payment made to a Business Employee for such Taxes; provided, however, that Excluded Taxes will not include Taxes (A) resulting from any
act, transaction or omission of the Buyer or any Company occurring after the Closing that is not in the ordinary course of business, (B) attributable to Buyer's failure to satisfy any of its obligations pursuant to this Agreement or (C) subject to
Section 7.18, resulting from any elections filed by the Buyer or its Affiliates (including, after the Closing, the Companies), other than any such elections made at the request of Seller.
	

"Final Closing Statement"	
 	

The statement setting forth the calculation of the Closing Date Net Debt and Closing Date Working Capital that is final and binding on the parties, either through the Buyer being deemed to have accepted the Initial Closing Statement, through
agreement by the parties or through the action of the Independent Accountants in the manner set forth in Section 2.3(e).
	 	 	 

5

 

	

"Financial Statements"	
 	

As defined in Section 4.6(a).
	

"Forms"	
 	

As defined in Section 7.18(b).
	

"Gerber"	
 	

Gerber Products Company, a business unit of the Seller that is engaged primarily in the research and development, manufacturing, marketing, distribution and sales of products in the infant and toddler nutrition and development business.
	

"Governmental Authority"	
 	

Any federal, national, state, local, cantonal, municipal, international or multinational government, governmental, regulatory or administrative authority, agency or commission, or any court, tribunal, or judicial or arbitral body of competent
jurisdiction.
	

"Governmental Permits"	
 	

Any permit, approval, license or other authorization required by a Governmental Authority under or issued by a Governmental Authority pursuant to any applicable Legal Requirement, with the exception of Environmental Laws.
	

"Hazardous Substance"	
 	

Any waste, material, chemical, or substance in any form that is regulated, controlled or defined as hazardous, toxic, or a pollutant under any applicable Environmental Law including all materials regulated as capable of causing harm or injury to
human health or the environment, including oils, petroleum, polychlorinated biphenyls, petroleum products and constituents, and asbestos.
	

"HSR Act"	
 	

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

"Incidental Business"	
 	

As defined in Section 7.8(c).
	

"Indemnified Party"	
 	

As defined in Section 6.5(a).
	

"Indemnifying Party"	
 	

As defined in Section 6.5(a).
	

"Independent Accountants"	
 	

Ernst & Young LLP or such other internationally recognized accounting firm as agreed by both the Seller and the Buyer.
	

"Initial Closing Statement"	
 	

As defined in Section 2.3(d).
	

"Intellectual Property"	
 	

(i) U.S., foreign and international design and utility patents and patent applications (including all re-exams, reissues, divisions, continuations, continuations-in-part, and extensions of any patent or patent application), industrial designs
(registered and unregistered) and applications for registration of industrial designs, including all rights, to the extent permitted by applicable Legal Requirements, to file corresponding applications in any country in the world; (ii) copyrights
(registered and unregistered), copyright applications, design rights, design right registrations; (iii) trademarks, trademark applications, service marks and trade dress, business names and trade names, whether registered, unregistered or existing at
common law, including the goodwill associated therewith; (iv) Web sites; and (v) except as may contain the Retained Marks, domain names and domain name applications.
	 	 	 

6

 

	

"Intellectual Property License Agreements"	
 	

The Intellectual Property License Agreements to be executed between the Seller and the Buyer (or their designees) at the Closing, substantially in the form of Exhibit 1(f).
	

"Intercompany Indebtedness"	
 	

As defined in Section 2.4.
	

"Interest Amount"	
 	

As defined in Section 2.3(j).
	

"Interim Financial Statements"	
 	

As defined in Section 4.6(a).
	

"Inventory"	
 	

The inventories, wherever located and as of the Closing Date, of raw materials, work in progress, finished Business Products and packaging and labeling material exclusively used or held for use exclusively in the operation or conduct of the Business,
other than those of the Companies.
	

"IRS"	
 	

The Internal Revenue Service of the United States.
	

"Italian Subsidiary"	
 	

Novartis Consumer Health SpA
	

"Know-How"	
 	

Each of the following items as they relate to the development, manufacturing, sale and distribution of the Business Products and exist in a written or electronically saved form: all confidential or proprietary information, including all product
composition data and specifications, recipes, packaging specifications, research and development data as well as purchasing and marketing data and procedures, technologies in development, instructions, formulae and information, manufacturing drawings,
 engineering drawings, manuals, designs, lab journals, notebooks, schematics, blue prints, research and development reports, technical information, design and engineering specifications, including those related to products under
development.
	

"Leased Real Property"	
 	

As defined in Section 4.10(b).
	

"Legal Requirement"	
 	

Any federal, national, state, local, cantonal, international, multinational or administrative order, law, ordinance, regulation, statute or treaty.
	

"Liabilities"	
 	

Any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Legal Requirement, Proceeding or any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any Governmental Authority and those arising under any contract, agreement, arrangement, commitment or undertaking.
	

"Loss"	
 	

As defined in Section 6.1(a).
	

"Material Adverse Effect"	
 	

Any event, circumstance, change in or effect on the Business that, individually or in the aggregate, is materially adverse to the results of operations or the financial condition of the Business taken as a whole; provided, however, that the following events, circumstances, changes or effects shall not be taken into account in determining whether a "Material
Adverse Effect" has occurred: (i) those fully and fairly disclosed to the Buyer by the Seller in the Data Room prior to the Signing Date; (ii) those caused by, arising out of or attributable to the general political or
economic environment or affecting the securities markets generally; (iii) those caused by, arising out of or attributable to the announcement of the sale of the Business, the execution of this Agreement, or the consummation of the transactions
contemplated hereby; (iv) those that generally affect the industries in which the Business operates (including legal and regulatory changes); (v) those caused by, arising out of or attributable to acts of terrorism or war (whether or not declared);
or (vi) those caused by any action or inaction of the Seller, any Selling Subsidiary or any Company pursuant to or in accordance with this Agreement or any Ancillary Agreements or pursuant to a request or at the direction of the Buyer.
	 	 	 

7

 

	

"Material Contracts"	
 	

As defined in Section 4.8(a).
	

"Mead Johnson Deposit"	
 	

The deposit advanced by Nutrition Corporation in the amount reflected on the balance sheet of the Business as of the Closing Date pursuant to that certain Supply Agreement between Mead Johnson & Company and Nutrition Corporation, as successor by
operation of law to Novartis Medical Health, Inc., dated 13 February 2004.
	

"Medical Nutrition Business"	
 	

As defined in the Preamble.
	

"Net Debt Difference"	
 	

As defined in Section 2.3(f)(i).
	

"Net Debt Position"	
 	

To the extent not included in the calculation of the Working Capital, the amount equal to the difference between (A) the aggregate amount in US dollars of bank debt and other financial indebtedness of the Companies owing to Third Parties for borrowed
money, including the amount of any recourse factored receivables, and other Liabilities treated as indebtedness (other than Plan Liabilities) in accordance with the Accounting Principles, but excluding Taxes, trade receivables or payables, accruals
and provisions, each as included in accordance with the Accounting Principles consistently applied in the line items specified under the caption "Debt" in Schedule 1(a)(ix), less
(B) the amount in US dollars of cash (including bank deposits), marketable securities, and other cash equivalents held by the Companies, less (C) the Mead Johnson Deposit, the
Even Santé Prepayment and the Office Lease Deposit, each as included in accordance with the Accounting Principles consistently applied in the line items specified under the caption "Cash" in Schedule 1(a)(ix)
.
	

"Novartis Deutschland"	
 	

As defined in Section 2.1(c).
	

"Novartis Finance"	
 	

As defined in Section 2.1(f).
	

"Novartis France"	
 	

As defined in Section 2.1(b).
	

"Novartis Japan"	
 	

As defined in Section 2.1(d).
	

"Novartis OTC"	
 	

A business unit of the Seller that is engaged primarily in the research and development, manufacturing, marketing, distribution and sales of self-medication products.
	

"Novartis Plan"	
 	

Any Plan that Seller or any of its Subsidiaries has sponsored, maintained or been required to contribute to for the benefit of any current or former employees, directors or consultants of Seller or any of its Subsidiaries, and their predecessors, and
with respect to which Seller or any of its Subsidiaries has any Liability (whether known or unknown and whether accrued, absolute, contingent or otherwise).
	 	 	 

8

 

	

"Novartis Products"	
 	

Goods produced, distributed, marketed or sold by the Seller or its Affiliates (other than the Business Products).
	

"Novartis Sverige"	
 	

As defined in Section 2.1(e).
	

"Nutrition AB"	
 	

As defined in the Preamble.
	

"Nutrition AB Shares"	
 	

As defined in Section 2.1(e).
	

"Nutrition Brazil"	
 	

A separate legal entity to be incorporated prior to Closing by the Seller in the Federative Republic of Brazil.
	

"Nutrition Brazil Shares"	
 	

As defined in Section 2.1(h).
	

"Nutrition Canada"	
 	

Novartis Nutrition Canada Inc.
	

"Nutrition Canada Shares"	
 	

As defined in Section 2.1(g).
	

"Nutrition Corporation"	
 	

As defined in the Preamble.
	

"Nutrition Corporation Shares"	
 	

As defined in Section 2.1(f).
	

"Nutrition GmbH Austria"	
 	

As defined in the Preamble.
	

"Nutrition GmbH Austria Shares"	
 	

As defined in Section 2.1(a).
	

"Nutrition GmbH Germany"	
 	

As defined in the Preamble.
	

"Nutrition GmbH Germany Shares"	
 	

As defined in Section 2.1(c).
	

"Nutrition Italy"	
 	

Novartis Medical Nutrition S.r.l.
	

"Nutrition Italy Shares"	
 	

As defined in Section 2.1(i).
	

"Nutrition Japan Shares"	
 	

As defined in Section 2.1(d).
	

"Nutrition K.K."	
 	

As defined in the Preamble.
	

"Nutrition K.K. Shares"	
 	

As defined in Section 2.1(d).
	

"Nutrition S.A.S."	
 	

As defined in the Preamble.
	

"Nutrition S.A.S. Shares"	
 	

As defined in Section 2.1(b).
	

"Office Lease Deposit"	
 	

The deposit in connection with the lease by the Business of office space at 71 Nishi Azabu 28 Mori Building, Tokyo, Japan.
	

"Owned Real Property"	
 	

As defined in Section 4.10.
	

"Pension Plan Liability"	
 	

$36,000,000.
	

"Permitted Encumbrances"	
 	

Mechanics', carriers', workmen's, repairmen's, materialmen's or other like liens arising or incurred in the ordinary course of business in respect of Liabilities which are not delinquent; liens for Taxes, assessments and charges and other claims not
yet due and payable, or the validity of which are being contested in good faith; imperfections of title, liens, easements, covenants, rights of way or other restrictions on use the existence of which would not materially adversely affect the value of
the relevant property or which do not materially impair the use of the property or asset subject thereto for its current purpose and other Encumbrances identified in Schedule 1(a)(iv).
	 	 	 

9

 

	

"Permitted Restrictions"	
 	

Encumbrances that do not adversely affect the ownership interest in, or the value or use of, such asset for its current purposes.
	

"Person"	
 	

Individuals or entities, including any corporation, limited liability company, joint venture, trust, body corporate (wherever located), unincorporated association, partnership or other entity.
	

"Plan"	
 	

Any employee benefit plan, scheme, program, agreement, arrangement, commitment or understanding of any kind (written or unwritten), including without limitation any bonus, incentive, stock, stock option, phantom stock, equity-based compensation,
deferred compensation, change in control, vacation, sick leave, retention, severance, salary continuation, defined benefit or defined contribution retirement, pension, savings, profit sharing, supplemental retirement, medical, dental, vision, life
insurance, accident, disability, long-term care, retiree medical or other welfare or fringe benefit plan, scheme, or program (together with any trust, escrow or other agreement related thereto), and including any "employee
benefit plan" as defined in Section 3(3) of ERISA.
	

"Pre-Closing Period"	
 	

Any taxable period, and the portion of any Straddle Period, ending on or before the Closing Date.
	

"Proceeding"	
 	

Any action, suit, claim, inquiry or legal or administrative proceeding or arbitration or other alternative dispute resolution proceeding or formal investigation (whether civil, criminal or administrative) by or before any Governmental
Authority.
	

"Product Liabilities"	
 	

With respect to Business Products, all Liabilities resulting from actual or alleged harm, injury, damage or death to persons, property or business, irrespective of the legal theory asserted.
	

"Product Registrations"	
 	

Registrations of Business Products existing on the Closing Date, made or filed with Governmental Authorities under applicable Legal Requirements held by (i) the Companies or (ii) the Seller or the Asset Selling Subsidiaries and related exclusively to
the Business, including Uniform Product Codes.
	

"Purchase Price"	
 	

As defined in Section 2.3(b).
	

"Purchase Price Bank Account"	
 	

A bank account to be designated by the Seller in a written notice to the Buyer at least five (5) Business Days before the Closing.
	

"Purchased Assets"	
 	

As defined in Section 2.1(j).
	

"Real Property"	
 	

As defined in Section 4.10(b).
	

"Real Property Lease"	
 	

The leases relating to material Leased Real Property.
	

"Receivables"	
 	

Other than those of the Companies, any and all accounts receivable, notes and other amounts receivable from Third Parties, including customers, to the extent arising exclusively from the Business before the Closing Date, whether or not in the
ordinary course, together with any unpaid financing charges accrued thereon.
	 	 	 

10

 

	

"Reference Working Capital"	
 	

The amount of $145,000,000.
	

"Regulations"	
 	

The Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes.
	

"Restricted Activities"	
 	

As defined in Section 7.8(a).
	

"Retained Marks"	
 	

As defined in Section 9.4.
	

"Section 338(h)(10) Election"	
 	

As defined in Section 7.18(b).
	

"Seller"	
 	

As defined on the title page.
	

"Seller Accounts"	
 	

As defined in Section 2.4.
	

"Seller Incurred Damages"	
 	

As defined in Section 6.2(a).
	

"Seller Insurance"	
 	

As defined in Section 7.5.
	

"Seller Loans"	
 	

As defined in Section 2.4.
	

"Seller's Knowledge"	
 	

The actual knowledge of the Persons listed in Schedule 1(a)(v)(A) after due inquiry of the individuals listed in Schedule 1(a)(v)(B).
	

"Selling Subsidiaries"	
 	

The Asset Selling Subsidiaries and the Share Selling Subsidiaries.
	

"Senior Employee"	
 	

As defined in Section 4.15(c).
	

"Separate Intellectual Property"	
 	

As defined in Section 2.1(j)(vii).
	

"September 2006 Statement of Net Assets"	
 	

As defined in Section 4.6.
	

"Share Purchase Agreements"	
 	

The Share Purchase Agreements to be executed between the Seller, the Selling Subsidiaries and the Buyer (or their designees) at the Closing, substantially in the form of Exhibits 2.1.
	

"Shares"	
 	

As defined in the Preamble, and which term shall be deemed to include, from and after the date of the consummation, if any, of the applicable Spin-Off, all of the outstanding capital stock of Nutrition Canada, Nutrition Italy and Nutrition
Brazil.
	

"Share Selling Subsidiaries"	
 	

The Subsidiaries of the Seller listed in Schedule 1(a)(vi).
	

"Significant Countries"	
 	

United States, Spain, Germany, Japan, Canada, France, Australia, Italy, Taiwan and Brazil.
	

"Signing Date"	
 	

The date of this Agreement set forth on the title page.
	

"Spin-Offs"	
 	

As defined in the Preamble.
	

"Statutory Accounts"	
 	

The audited statutory accounts of: (i) Nutrition SAS, Nutrition GmbH Germany and Nutrition AB for the fiscal years ended 31 December 2004 and 2005 and (ii) Nutrition GmbH Austria for the fiscal year ended 31 December 2005.
	

"Straddle Period"	
 	

Any taxable period beginning on or prior to the Closing Date and ending after the Closing Date.
	 	 	 

11

 

	

"Subsidiary"	
 	

With respect to any Person, any corporation, partnership, joint venture or other legal entity of which such Person (either alone or together with any other subsidiary) owns, directly or indirectly, more than 50% of the capital stock (or equivalent),
the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation, partnership, joint venture or other legal entity.
	

"Sustagen Trademark Agreement"	
 	

That certain License Agreement between Novartis Consumer Health Australia Pty. Ltd. and Mead Johnson & Company, dated 18 October 2001.
	

"Tangible Personal Property"	
 	

As defined in Section 2.1(j)(ii).
	

"Tax" or "Taxes"	
 	

All taxes, duties, levies or imposts imposed by any Governmental Authority on or with respect to any income (including capital gains), capital, gross receipts, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, workers' compensation, property (including real property and personal
property), sales, use, transfer, registration or value-added taxes, stamp duties, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other
manner, including any interest, penalty, surcharge, fine or addition thereto.
	

"Tax Returns"	
 	

Any and all filings, returns, reports and forms required to be filed with a Governmental Authority with respect to Taxes.
	

"Third Party"	
 	

With respect to any specified Person, any other Person who is not an Affiliate of such specified Person.
	

"Threshold"	
 	

As defined in Section 6.1(c).
	

"Title Commitments"	
 	

As defined in Section 7.14.
	

"Transferred Employee"	
 	

As defined in Section 7.4(a).
	

"Transferred Plan"	
 	

Any Business Employee Plan or portion thereof (including any liabilities thereof), as may be transferred to, or retained by, the Companies, the Buyer or any of its Subsidiaries, in accordance with Section 7.4 and Schedule
7.4.
	

"Transition Services Agreement"	
 	

The Transition Services Agreement to be executed between the Seller and the Buyer (or their designees) at the Closing, substantially in the form of Exhibit 3.
	

"Transitional Services"	
 	

As defined in Section 3.
	

"U.S. Parent"	
 	

Novartis Corporation.
	

"Watson Wyatt Report"	
 	

As defined in Schedule 7.4.
	

"Working Capital"	
 	

Current Assets minus Current Liabilities.
	

"Working Capital Difference"	
 	

As defined in Section 2.3(f)(iii).
	

"Works Councils"	
 	

The works councils listed in Schedule 1(a)(viii).
	 	 	 

12

 

	

"2005 Financial Statements"	
 	

As defined in Section 4.6(a).
	

"2004 Financial Statements"	
 	

As defined in Section 4.6(a).
	

"$" or "US dollars"	
 	

The valid currency of the United States of America.

	1.2
	Interpretation. Except to the extent that the context otherwise requires:

	(i)
	when
a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated;

	(ii)
	the
table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

	(iii)
	whenever
the words "include", "includes" or "including" are used in this Agreement, they are deemed to be followed by the words "without limitation";

	(iv)
	the
words "hereof", "herein" and "hereunder" and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this
Agreement;

	(v)
	all
terms defined in this Agreement have the defined meaning when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein; and

	(vi)
	the
use of "or" is not intended to be exclusive unless expressly indicated otherwise. 

2.     SALE AND PURCHASE  

2.1   Objects of Sale and Purchase  

Subject
to and in accordance with the terms and conditions of this Agreement, at the Closing the Seller and the Buyer, respectively, will take the following actions: 

	(a)
	Sale and Purchase of Nutrition GmbH Austria: The Seller will, or will cause its relevant Affiliate to, sell and the Buyer or a Buyer
Designated Affiliate will purchase from the Seller all of the issued and outstanding shares of Nutrition GmbH Austria (the "Nutrition GmbH Austria
Shares") free and clear of any Encumbrances, pursuant to an agreement in the form attached as Exhibit 2.1.

	(b)
	Sale and Purchase of Nutrition S.A.S.: The Seller will cause Novartis Group France SA, a direct wholly owned subsidiary of the Seller
("Novartis France"), to sell and the Buyer or a Buyer Designated Affiliate will purchase from Novartis France all of the issued and outstanding shares
of Nutrition S.A.S. (the "Nutrition S.A.S. Shares") free and clear of any Encumbrances, pursuant to an agreement in the form attached as  Exhibit 2.1.

	(c)
	Sale and Purchase of Nutrition GmbH Germany: The Seller will cause Novartis Deutschland GmbH, a direct wholly owned subsidiary of the
Seller ("Novartis Deutschland"), to sell and the Buyer or a Buyer Designated Affiliate will purchase from Novartis Deutschland all of the issued and
outstanding shares of Nutrition GmbH Germany (the "Nutrition GmbH Germany Shares") free and clear of any Encumbrances, pursuant to an agreement in the
form attached as Exhibit 2.1.

	(d)
	Sale and Purchase of Nutrition K.K.: The Seller will cause Novartis Holding Japan K.K., a direct wholly owned subsidiary of the Seller
("Novartis Japan"), to sell and the Buyer or a Buyer Designated Affiliate will purchase from Novartis Japan all of the issued and outstanding shares of
Nutrition K.K. (the "Nutrition Japan Shares") free and clear of any Encumbrances, pursuant to an agreement in the form attached as  Exhibit 2.1.

13

  

	(e)
	Sale and Purchase of Nutrition AB: The Seller will cause Novartis Sverige Participations AB, a direct wholly owned subsidiary of the
Seller ("Novartis Sverige"), to sell and the Buyer or a Buyer Designated Affiliate will purchase from Novartis Sverige all of the issued and outstanding
shares of Nutrition AB (the "Nutrition AB Shares") free and clear of any Encumbrances, pursuant to an agreement in the form attached as  Exhibit 2.1.

	(f)
	Sale and Purchase of Nutrition Corporation: The Seller will cause Novartis Finance Corporation, an indirect wholly owned subsidiary of
the Seller ("Novartis Finance"), to sell and the Buyer or a Buyer Designated Affiliate will purchase from Novartis Finance all of the issued and
outstanding shares of Nutrition Corporation (the "Nutrition Corporation Shares") free and clear of any Encumbrances, pursuant to an agreement in the
form attached as Exhibit 2.1.

	(g)
	Sale and Purchase of Nutrition Canada: If as of the Closing Date the Spin-Off to Nutrition Canada has occurred, the Seller
will sell and the Buyer or a Buyer Designated Affiliate will purchase from the Seller all of the issued and outstanding shares of Nutrition Canada (the "Nutrition Canada
Shares") free and clear of any Encumbrances, pursuant to an agreement in the form attached as Exhibit 2.1.

	(h)
	Sale and Purchase of Nutrition Brazil: If as of the Closing Date Nutrition Brazil has been established and the Spin-Off to
Novartis Brazil has occurred, the Seller will sell and the Buyer or a Buyer Designated Affiliate will purchase from the Seller all of the issued and outstanding shares of Nutrition Brazil (the
"Nutrition Brazil Shares") free and clear of any Encumbrances, pursuant to an agreement in the form attached as  Exhibit 2.1.

	(i)
	Sale and Purchase of Nutrition Italy: If as of the Closing Date the Spin-Off to Nutrition Italy has occurred, the Seller
will sell and the Buyer or a Buyer Designated Affiliate will purchase from the Seller all of the issued and outstanding shares of Nutrition Italy (the "Nutrition Italy
Shares") free and clear of any Encumbrances, pursuant to an agreement in the form attached as Exhibit 2.1.

	(j)
	Sale and Purchase of the Assets: The Seller will sell, assign, transfer, convey and deliver, or cause to be sold, assigned,
transferred, conveyed and delivered, to the Buyer or a Buyer Designated Affiliate, and the Buyer or a Buyer Designated Affiliate will purchase from the Seller free and clear of any Encumbrances, other
than Permitted Encumbrances, all of the Seller's and the Asset Selling Subsidiaries' rights, title and interest in and to the following assets to the extent used by the Seller and the Asset Selling
Subsidiaries in the conduct of the Business (the "Purchased Assets"):

	(i)
	all
rights in respect of the Leased Real Property leased by the Asset Selling Subsidiaries and listed in  Schedule 2.1(j)(i) (to the extent transferable);

	(ii)
	all
furniture, fixtures, office and other equipment, and other items of tangible personal property, including spare parts, supplies, tools, machinery and vehicles, used by the
Seller, the Asset Selling Subsidiaries or any other Affiliate of the Seller at the locations at which the Business is currently conducted, or otherwise owned or held by the Asset Selling Subsidiaries
at the Closing and used exclusively in the Business or otherwise reflected on the balance sheet of the Business, including, in particular, if Nutrition Brazil has not been established and such assets
are not transferred thereto prior to the Closing Date, the equipment and machinery used in the Business as currently conducted in the Federative Republic of Brazil (the
"Tangible Personal Property");

	(iii)
	the
Inventory;

	(iv)
	the
Receivables; 

14

 

	(v)
	the
books of account, general, financial and personnel records, invoices, shipping records, product files, product dossiers (including, but not limited to, health economics dossiers),
supplier lists, customer lists and files, correspondence, proprietary information and records and other documents, records and files and any rights thereto, and Tax Returns (and supporting schedules,
workpapers and related documents) relating exclusively to the Business;

	(vi)
	the
goodwill of the Seller and the Asset Selling Subsidiaries related exclusively to the Business;

	(vii)
	all
rights to the Intellectual Property owned, utilized or licensed by or to the Seller, the Asset Selling Subsidiaries or any other Affiliate of the Seller which is used
exclusively in or otherwise exclusively related to the Business and the Know-How used primarily in or otherwise primarily related to the Business (the "Separate
Intellectual Property"), including the Intellectual Property listed in Schedule 2.1(j)(vii);

	(viii)
	the
sales and promotional literature, and other sales-related materials;

	(ix)
	the
rights of the Seller and the Asset Selling Subsidiaries under the contracts, licenses, agreements and commitments of the Seller and the Asset Selling Subsidiaries exclusively
related to the Business (to the extent such contracts are transferable);

	(x)
	the
Governmental Permits, including the Product Registrations (to the extent transferable);

	(xi)
	the
databases and software programs, source codes and manuals owned or used by, or licensed to, the Seller or the Asset Selling Subsidiaries and used exclusively in the Business (to
the extent transferable);

	(xii)
	all
express or implied warranties from suppliers to the Business to the extent that they relate exclusively to the Purchased Assets (to the extent transferable);

	(xiii)
	all
prepaid expenses, and lease and utility and similar deposits of the Seller and any Asset Selling Subsidiary and any and all deposits, prepayments and other security held by the
Seller and any Asset Selling Subsidiary, which in each case relate exclusively to the Business, together with all claims, causes of action, rights of recovery, rights of set-off and rights
of recoupment related exclusively to the Business, other than any of the foregoing related to the Excluded Assets or the Excluded Liabilities; and

	(xiv)
	all
other assets of the Seller and the Asset Selling Subsidiaries used exclusively in the Business, other than the Excluded Assets and the assets, properties and rights owned or
held by the Seller or the Asset Selling Subsidiaries that are required to be retained by the Seller or the Asset Selling Subsidiaries for the purpose of providing Transitional Services to the Buyer
and its Affiliates after the Closing Date pursuant to the Transitional Services Agreement. 

The
Purchased Assets shall include all assets, properties and rights of the Seller and the Asset Selling Subsidiaries reflected on the September 2006 Statement of Net Assets. Purchased Assets
shall not include assets sold, disposed of or depleted in the ordinary course of business or as required, permitted or contemplated by this Agreement. 

	(k)
	Notwithstanding
anything in Section 2.1(j) to the contrary, the Seller will not sell, convey, assign, transfer or deliver, nor cause to be sold, conveyed, assigned, transferred
or delivered, to the Buyer, and the Buyer will not purchase, and the Purchased Assets will not include, nor will the Companies hold as of the Closing Date, the Seller's, any Company's or any Asset 

15

 

Selling
Subsidiary's right, title and interest in or to any of the following (the "Excluded Assets"): 

	(i)
	the
Purchase Price Bank Account;

	(ii)
	any
cash, marketable securities, and negotiable instruments and other cash equivalents of the Seller, any Company or any Asset Selling Subsidiary on hand, in lock boxes, in financial
institutions or elsewhere as of the Closing Date, including all cash residing in any collateral cash account securing any obligation or contingent obligation of the Seller, any Company or any
Affiliate of the Seller;

	(iii)
	any
rights to Tax refunds, credits or similar benefits attributable to Excluded Taxes;

	(iv)
	the
company seal, minute books, charter documents, stock or equity record books and such other books and records as pertain to the organization, existence or capitalization of the
Seller or the Asset Selling Subsidiaries, as well as any other records or materials relating to the Seller or the Asset Selling Subsidiaries generally and not involving or related to the Purchased
Assets or the operations of the Business;

	(v)
	any
right, property or asset that is listed or described in Schedule 2.1(k)(v);

	(vi)
	any
intercompany receivables (i.e., receivables from any Company or any Asset Selling Subsidiary owing to the Seller or any Affiliate of the Seller), other than accounts receivable
incurred in the ordinary course of business in connection with the sale of Business Products;

	(vii)
	any
rights in respect of the Intercompany Indebtedness;

	(viii)
	the
Retained Marks;

	(ix)
	all
rights of the Seller and its Affiliates under this Agreement and the Ancillary Agreements;

	(x)
	Tax
Returns (and supporting schedules, workpapers and related documents), other than those relating exclusively to the Business;

	(xi)
	any
rights under the Seller Insurance; or

	(xii)
	subject
to Section 7.6(d) and (e), any rights of the Asset Selling Subsidiaries under any contracts that are not transferable at Closing and that are listed in  Schedule 2.1(k)(xii) (the
"Excluded Agreements"). 

The
Seller shall, if it deems such transfer to be necessary, at its sole cost and expense, take (or cause to be taken) such action (including preparing any necessary transfer documentation therefor)
as is necessary to transfer, no later than the Closing Date, the Excluded Assets from the Companies for such consideration or no consideration as may be determined by the Seller. The Seller shall
provide the Buyer with evidence of the foregoing transfers at the request of the Buyer. The transfer and conveyance of the Excluded Assets from the Companies to the Seller or its designee shall be
completed
in a manner which does not result in any Liability of the Companies which is required to be discharged by the Companies after the Closing Date. 

2.2   Assumption and Exclusion of Liabilities  

	(a)
	Upon
the terms and subject to the conditions set forth in this Agreement, the Buyer will assume, and agree to pay, perform and discharge when due, any and all of the Liabilities of
the Seller and the Asset Selling Subsidiaries to the extent relating to or arising exclusively out of the Business or the Purchased Assets, other than the Excluded Liabilities set forth in 

16

 

Section 2.2(b)
below (the "Assumed Liabilities"). The Assumed Liabilities include, but are not limited to, the following: 

	(i)
	all
Liabilities of the Seller or any Asset Selling Subsidiary arising under the contracts assumed by the Buyer;

	(ii)
	all
Liabilities for product warranty service claims relating to Business Products and all Product Liabilities;

	(iii)
	all
Liabilities in respect of any and all accounts payable and the accrued vacation, sick leave, workers' compensation claims and insurance claims of, in each case, the Transferred
Employees;

	(iv)
	all
Environmental Liabilities.

	(v)
	all
intercompany Liabilities (i.e., payables by any Company or any Asset Selling Subsidiary to the Seller or any Affiliate of the Seller), to the extent incurred in the ordinary
course of business for the purchase of products used exclusively in the Business;

	(vi)
	all
Taxes relating to the Companies, the Purchased Assets or the Business other than Excluded Taxes; and

	(vii)
	all
Liabilities with respect to the Transferred Plans.

	(b)
	The
Seller will retain, and will be responsible for paying, performing and discharging when due, and the Buyer will not assume or have any responsibility for, the following
Liabilities, whether belonging to the Seller, the Companies or the Asset Selling Subsidiaries (collectively, the "Excluded Liabilities"):

	(i)
	all
Excluded Taxes;

	(ii)
	all
Liabilities relating to or arising out of the Excluded Assets;

	(iii)
	the
Seller's and its Affiliate's obligations under this Agreement and the Ancillary Agreements and any Liability to Goldman Sachs & Co. arising in connection with this
Agreement and the transactions contemplated hereby;

	(iv)
	all
Liabilities for intercompany accounts payable, other than trade payables arising in the ordinary course of business from the sale of products by the Seller or an Affiliate of the
Seller to a Company or an Asset Selling Subsidiary to the extent related exclusively to the Business;

	(v)
	all
Intercompany Indebtedness;

	(vi)
	other
than Transferred Plans or except as otherwise expressly provided in Section 7.4, all Liabilities related to the Seller's, the Companies' or the Asset Selling
Subsidiaries' sponsorship of, maintenance of, contribution to or other obligations with respect to any Plan;

	(vii)
	any
Liabilities related to the Spin-Offs, including, without limitation, any Tax and severance Liabilities; and

	(viii)
	all
Liabilities of the Seller or the Asset Selling Subsidiaries that do not relate exclusively to the Business. (c) The Buyer shall indemnify the Seller and its Affiliates
for and hold them harmless against all Assumed Liabilities (without limitation to the Buyer's rights under Section 6.1 with respect to breaches of representations and warranties) and the Seller
shall indemnify the Buyer and its Affiliates for and hold them harmless from all Excluded Liabilities. 

17

 

2.3   Purchase Price  

	(a)
	The
purchase price for the Shares, the Purchased Assets and the covenant in Section 7.8 will be $2,525,000,000, exclusive of any applicable value added tax less the Pension
Plan Liability (the "Base Purchase Price").

	(b)
	No
later than five (5) Business Days prior to the Closing Date, the Seller will deliver to the Buyer an estimate of the Net Debt Position as of the Closing Date (the
"Estimated Closing Net Debt"), together with a statement setting forth the calculation thereof (the "Estimated Closing Net Debt
Statement"). The Base Purchase Price will be adjusted (as so adjusted, the "Purchase Price") (i) upward, US dollar for US
dollar, by the Estimated Closing Net Debt in the event that such amount is negative and (ii) downward, US dollar for US dollar, by the Estimated Closing Net Debt in the event that such amount
is positive.

	(c)
	The
Buyer will pay the Purchase Price in full to the Seller at the Closing, in US dollars, by electronic transfer in immediately available funds to the Purchase Price Bank Account.

	(d)
	No
later than sixty (60) Business Days after the Closing Date, the Seller will prepare and deliver to the Buyer a statement of (A) Net Debt Position as of the close of
business on the Closing Date (the "Closing Date Net Debt") and (B) Working Capital as of the close of business on the Closing Date (the
"Closing Date Working Capital"), which shall set forth the Seller's determination of the Closing Date Net Debt and the Closing Date Working Capital
prepared in a manner consistent with the Accounting Principles and, with respect to the Closing Date Net Debt, in a manner consistent with the preparation of the Estimated Closing Net Debt Statement
(the "Initial Closing Statement"). At all reasonable times during the forty-five (45) days immediately following the Buyer's receipt
of the Initial Closing Statement, the Buyer and its representatives shall be permitted to review the Seller's records relating to the Initial Closing Statement, and the Seller shall make reasonably
available the individuals responsible for the preparation of the Initial Closing Statement in order to respond to the inquiries of the Buyer related thereto.

	(e)
	The
Buyer will notify the Seller in writing of any disputed item, specifying the amount in dispute and setting forth, in reasonable detail, the basis for such dispute, within
forty-five (45) days of the Seller's delivery of the Initial Closing Statement to the Buyer. The Buyer may dispute any amount reflected in the Initial Closing Statement, but only on
the basis that such disputed amount is either arithmetically inaccurate or was not prepared in the manner consistent with (or failed to take into account items required by) the Accounting Principles,
or, with respect to the Closing Date Net Debt, was not arrived at in the manner consistent with the preparation of the Estimated Closing Net Debt Statement. The Buyer agrees that the failure to notify
the Seller of a dispute within such period will be conclusively deemed to be an acceptance by the Buyer of the Initial Closing Statement and will constitute a waiver of any right of the Buyer to
dispute the Initial Closing Statement for purposes of this Agreement. In the event of a dispute, the Seller and the Buyer will use their reasonable best efforts to reconcile their differences. If the
Seller and the Buyer are unable to reach a resolution within fifteen (15) Business Days after receipt by the Seller of the Buyer's written notice of dispute, the items remaining in dispute will
be submitted to the Independent Accountants. The Seller and the Buyer will make available to the Independent Accountants such business records and explanations relating to, and access to personnel of
the Seller, the Buyer and the Companies involved in the preparation of, the Initial Closing Statement, as may reasonably be required by the Independent Accountants to make their final determination.
The Independent Accountants will be directed to resolve the disputed items within thirty (30) days after such disputed items are referred to them, and their decision will be final and binding
on the parties hereto. The Seller and the Buyer will each bear fifty percent (50%) of the fees and expenses 

18

 

of
the Independent Accountants. The Initial Closing Statement will be deemed final and binding on the parties hereto and shall be deemed the Final Closing Statement upon the earliest of (i) the
date the Buyer is deemed to have accepted the Initial Closing Statement in accordance with this Section 2.3(e), (ii) the resolution of all disputes pursuant to this Section 2.3(e)
by the Seller and the Buyer or (iii) the resolution of all disputes pursuant to this Section 2.3(e) by the Independent Accountants (such earliest date being the
"Determination Date"). 

	(f)
	Within
five (5) Business Days after the Determination Date, a Purchase Price adjustment shall be made as follows:

	(i)
	in
the event that the difference between the Closing Date Net Debt (as set forth on the Final Closing Statement) and the Estimated Closing Net Debt (as set forth on the Estimated
Closing Net Debt Statement) (the "Net Debt Difference") is negative, the Buyer will pay to the Seller the amount of the Net Debt Difference, together
with the Interest Amount;

	(ii)
	in
the event that the Net Debt Difference is positive, the Seller will pay to the Buyer the amount of the Net Debt Difference, together with the Interest Amount;

	(iii)
	in
the event that the difference between the Reference Working Capital and the Closing Date Working Capital (as set forth on the Final Closing Statement) (the
"Working Capital Difference") is negative in an amount of at least $3,000,000, the Buyer will pay to the Seller the amount of the Working Capital
Difference, together with the Interest Amount; and

	(iv)
	in
the event that the Working Capital Difference is positive in an amount of at least $3,000,000, the Seller will pay to the Buyer the amount of the Working Capital Difference,
together with the Interest Amount.

	(g)
	The
Base Purchase Price will be allocated in accordance with Schedule 2.3(g), subject to adjustment as set forth in
Section 2.3(b). In the event the Purchase Price is adjusted pursuant to Section 2.3(f), the Seller will, no later than five (5) Business Days after the Determination Date, prepare
and deliver to the Buyer a revised allocation schedule that reflects such adjustment and is consistent with the Closing Date Net Debt and the Working Capital Position in the Final Closing Statement
attributed to the Companies. Neither the Buyer nor the Seller or any of their respective Affiliates will file any Tax Return or otherwise take any position or agree to take any position that is
inconsistent with the allocation contemplated by this Section 2.3(g) without prior notice and consultation with the other party.

	(h)
	The
Buyer agrees that following the Closing through the date on which payment, if any, is made by either party pursuant to Section 2.3(f) or if the Final Closing Statement
indicates that no such payment is required, then through the date on which the Final Closing Statement becomes effective, it will not take any actions with respect to any accounting books, records,
policies or procedures on which the Final Closing Statement is to be based that would make it impossible or impracticable to calculate the Net Debt Position or the Working Capital in the manner and
utilizing the methods required hereby.

	(i)
	The
Buyer agrees to permit full access to the books and records of the Companies and the Business to the extent relevant to the determination of the Net Debt and the Closing Date
Working Capital to the Seller (and its advisors and/or agents), following the date on which the Buyer delivers the Initial Closing Statement to the Seller through the date on which the Final Closing
Statement become effective. 

19

 

	(j)
	Any
payment required to be made by the Buyer or the Seller pursuant to Section 2.3(f), if any, will bear interest at a rate of five percent (5%) per annum, calculated from the
Closing Date until the date of payment (the "Interest Amount"). All payments required to be made pursuant to Section 2.3(f) together with
interest payable pursuant to this Section 2.3(j) shall be made in full in US dollars by electronic transfer of immediately available funds to the bank account designated in writing by the party
receiving the payment no later than the fifth Business Day after the Determination Date.

	(k)
	To
the extent an amount with respect to any asset or liability is included in the calculation of the Net Debt Position, such amount shall not be included in the calculation of the
Working Capital. To the extent an amount with respect to any asset or liability is included in the calculation of Working Capital, such amount shall not be included in the calculation of the Net Debt
Position. 

2.4   Intercompany Indebtedness  

Prior
to the Closing, the Seller will discharge, or will cause to be discharged (i) the aggregate amount of all outstanding loans to, and cash deposits with, the Companies from the Seller or
any of its Affiliates (other than the Companies) (excluding balances arising from ordinary trading activities) (the "Seller Loans"), together with any
interest thereon for the period ending on and including the Closing Date,
(ii) the aggregate amount of all amounts payable by the Companies net of any amounts receivable thereby under cash pooling arrangements between each Company, on the one hand, and the Seller or
any of its Affiliates, on the other hand (the "Cash Pooling Loans"), (iii) the aggregate amount of intercompany open accounts of the Seller or
any of its Affiliates with the Companies (the "Seller Accounts") and (iv) together with interest thereon and accrued charges relating thereto for
the period ending on and including the Closing Date, in each case, as a repayment of such Seller Loans, Cash Pooling Loans and Seller Accounts (the aggregate amount of the Seller Loans, the Cash
Pooling Loans and the Seller Accounts and all interests and charges accrued thereon for the period ending on and including the Closing Date are referred to as the "Intercompany
Indebtedness"). 

2.5   Licenses for Certain Know-How  

	(a)
	To
the extent that the Business currently uses any Know-How which is not transferred to the Buyer or the Buyer Designated Affiliates under or pursuant to this Agreement,
but which is owned or held under license (with the right to grant sublicenses) by the Seller or any of its Affiliates, the Seller shall, and shall cause its respective Affiliates to, grant the Buyer
and the Buyer Designated Affiliates a perpetual, world-wide, royalty-free, irrevocable license (in customary form) to use such Know-How solely in the Business as it
is currently conducted.

	(b)
	To
the extent that the Seller and any of its Affiliates (other than the Companies) currently use, other than with respect to the Business, any Know-How which is
transferred to Buyer or the Buyer Designated Affiliates under or pursuant to this Agreement, the Buyer shall, and shall cause its respective Buyer Designated Affiliates to, grant the Seller and its
respective Affiliates a perpetual, world-wide, royalty-free, irrevocable license (in customary form) to use such Know-How in the business that currently makes use
of the Know-How as such business is currently conducted. 

3.     TRANSITIONAL SERVICES  

The
Seller will provide to the Buyer transitional services listed in Schedule 3 (the "Transitional
Services"), pursuant to a transition services agreement substantially in the form attached as Exhibit 3. 

20

 

4.     REPRESENTATIONS AND WARRANTIES OF THE SELLER  

The
Seller hereby represents and warrants to the Buyer, as of the Signing Date and as of the Closing Date, as follows: 

4.1   Organization, Authority and Qualification of the Companies  

Each
Company is duly organized, validly existing and, in jurisdictions where the concept is recognized, in good standing under the laws of its respective jurisdiction of organization and has the
necessary corporate power and authority to own its assets and properties and carry on its business as currently conducted, except where the failure to be so organized, existing and in good standing
would not (a) adversely affect the ability of the Seller to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement or (b) materially
adversely affect the ability of each Company to conduct the Business as it is currently conducted. Each Company and each Asset Selling Subsidiary is licensed or qualified to do business in each
jurisdiction where the nature of the properties owned, leased or operated by it and the business transacted by it requires such licensing or qualification, except where the failure to be qualified or
licensed would not, individually or in the aggregate, have a Material Adverse Effect. 

4.2   Organization and Authority of the Seller  

	(a)
	The
Seller is a corporation duly organized and validly existing under the laws of Switzerland and has all necessary corporate power and authority to enter into this Agreement and the
Ancillary Agreements to which it is a party, and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. Each Selling Subsidiary is or
will be as of the Closing Date a corporation duly organized and validly existing under the laws of its jurisdiction or organization and has or will have as of the Closing Date all requisite power and
authority to enter into any Ancillary Agreement to which it is or will become a party, and to perform its obligations thereunder and to consummate the transactions contemplated thereby. The execution
and delivery of this Agreement and the Ancillary Agreements by the Seller and each Selling Subsidiary, the performance by the Seller and each Selling Subsidiary of its obligations hereunder and
thereunder and the consummation by the Seller and each Selling Subsidiary of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of
the Seller and have been or will be as of the Closing Date duly authorized by all requisite corporate action on the part of each Selling Subsidiary.

	(b)
	This
Agreement has been, and upon their execution the Ancillary Agreements will have been, duly executed and delivered by the Seller and each Selling Subsidiary, as applicable, and
(assuming due authorization, execution and delivery by the Buyer) constitutes, and upon their execution the Ancillary Agreements will constitute, a legal, valid and binding obligation of the Seller
and each Selling Subsidiary, as applicable, enforceable against the Seller and each Selling Subsidiary, as applicable, in accordance with their respective terms. 

4.3   Capital Stock of the Companies  

Schedule 4.3 lists for each Company true and complete information regarding all of the authorized, issued and outstanding shares of capital stock
of such Company and the current record and beneficial ownership of such shares. If Nutrition Canada, Nutrition Italy and Nutrition Brazil are formed on or prior to the Closing Date,  Schedule 4.3 will be updated prior to the Closing Date to reflect the ownership of all of the outstanding capital stock of those Persons. As of
the date of this Agreement, the Business is conducted through the Seller, the Companies, the Asset Selling 

21

 

Subsidiaries
or the Seller's Affiliates providing Transitional Services and no other Person. The Companies do not have any Subsidiaries or an ownership interest in any other Person. 

4.4   Ownership of the Shares  

	(a)
	As
of the Signing Date and as of the Closing Date, (i) the Seller owns beneficially and of record the Nutrition GmbH Austria Shares, (ii) Novartis France owns
beneficially and of record the Nutrition S.A.S. Shares, (iii) Novartis Deutschland owns beneficially and of record the Nutrition GmbH Germany Shares, (iv) Novartis Japan owns beneficially and
of record the Nutrition K.K. Shares, (v) Novartis Sverige owns beneficially and of record the Nutrition AB Shares and (vi) Novartis Finance owns beneficially and of record the Nutrition Corporation
Shares, in each case, free and clear of all Encumbrances. The Shares are validly issued, fully paid and non-assessable and were not issued in violation of any preemptive rights. There are
no options, warrants, convertible securities or other rights, agreements, arrangements or commitments relating to the Shares or any other securities of the Companies obligating the Seller, any Company
or any of the Seller's Affiliates to issue, sell, purchase, redeem or otherwise acquire any equity interest in any Company. There are no voting trusts, shareholder agreements, proxies or other
agreements in effect with respect to the voting or transfer of the Shares.

	(b)
	As
of the Closing Date, if the Spin-Offs contemplated for each of Canada, Italy and Brazil shall have occurred, the Seller or one of its wholly owned Subsidiaries will
own, beneficially and of record, all of the Nutrition Canada Shares, the Nutrition Italy Shares and the Nutrition Brazil Shares free and clear of any Encumbrances. The Nutrition Canada Shares, the
Nutrition Italy Shares and the Nutrition Brazil Shares, upon issuance (if issued) and as of the Closing Date, will be validly issued, fully paid and non-assessable and will not have been
issued in violation of the preemptive rights of any Person. 

4.5   No Conflict  

Assuming
that all consents, approvals, authorizations and other actions described in Schedule 4.8(b), Section 4.19 and  Schedule 4.19 have been
obtained, all filings and notifications described in Section 4.19 or listed in  Schedule 4.19 have been made and any applicable waiting period has expired or been terminated, and except as may
result from any facts or
circumstances relating solely to the Buyer or any of its Affiliates, neither the execution or delivery by the Seller of this Agreement nor the execution or delivery by the Seller or any Selling
Subsidiary of any Ancillary Agreement to which it is a party, or the performance by the Seller of its obligations under this Agreement or by the Seller or any Selling Subsidiary of its obligations
under any Ancillary Agreement to which it is a party, or the consummation of the transactions contemplated hereby or thereby will (a) result in any breach of any provision of the certificate of
incorporation or by-laws (or other similar organizational documents) of the Seller, any Company or any Selling Subsidiary, (b) result in any material breach of, or constitute a
default under, any Material Contract or judgment to which the Seller, any Company or any Selling Subsidiary is a party or by which it is bound or (c) violate any applicable material Legal
Requirement,
other than such breaches, defaults or violations which would not, in the case of clause (b), (i) materially and adversely affect the ability of the Seller to carry out its obligations under,
and to consummate the transactions contemplated by, this Agreement and the Ancillary Agreements or (ii) otherwise have a Material Adverse Effect. 

4.6   Financial Statements; Other Liabilities  

	(a)
	Schedule 4.6(a)
contains: (i) the unaudited combined statement of net assets of the Business (excluding items dealt with at the Seller's corporate level, such as
financial indebtedness, 

22

 

pensions
and certain tax related matters ("Corporate Balance Sheet Items") as of 31 December 2005, and the related unaudited combined statement
of operating income of the Business for the year ended 31 December 2005 (the "2005 Financial Statements"), (ii) the unaudited combined
statement of net assets of the Business (excluding Corporate Balance Sheet Items) as of 31 December 2004, and the related unaudited combined statement of operating income of the Business for
the year ended 31 December 2004 (the "2004 Financial Statements") and (iii) the unaudited combined statement of net assets of the Business
(excluding Corporate Balance Sheet Items) as of 30 September 2006 (the "September 2006 Statement of Net Assets"), and the related
unaudited combined statement of operating income of the Business for the ninemonth period ended 30 September 2006 (the "Interim Financial
Statements" and, together with the 2005 Financial Statements, 2004 Financial Statements and the Corporate Balance Sheet Items as of 30 September 2006, 31
December 2005 and 31 December 2004, the "Financial Statements"). 

	(b)
	The
Financial Statements (i) were prepared in accordance with the books of account and other financial records of the Business (except as may be indicated in the notes thereto
or in Schedules 4.6(a) and 4.6(b)) and the Accounting Principles and (ii) present fairly, in all
material respects, the combined financial position and the combined results of operations of the Business as of the dates thereof or for the periods covered thereby in conformity with the Accounting
Principles, consistently applied.

	(c)
	Except
as set forth in the September 2006 Statement of Net Assets, Schedule 4.6(a), there was no material
"off-balance sheet" financial indebtedness relating to the Business as of the date of the September 2006 Statement of Net Assets. 

4.7   Statutory Accounts  

The
balance sheets included in the Statutory Accounts were prepared in accordance with applicable statutory requirements of the relevant jurisdictions in effect as of the date of their preparation. 

4.8   Agreements  

	(a)
	Schedule 4.8(a) lists all material distribution contracts, franchise contracts, leases, supply and Third Party manufacturing
contracts, joint venture, partnership and stockholder agreements, advertising and sponsorship contracts, debt agreements, guarantees and related security agreements, non-competition
contracts, Third Party management contracts, asset purchase agreements and other material agreements of the Business, except for those agreements and contracts that are not held by the Companies or
the Asset Selling Subsidiaries and that do not relate exclusively to the Business (and together with the contracts identified in  Schedule 4.11(a)(i), collectively the "Material Contracts"). For purposes of this
Section 4.8, "material" means:

	(i)
	brokerage,
distribution, sales agency and franchise contracts with an annual turnover or financial commitment, on an individual basis, exceeding $8,000,000;

	(ii)
	leases
of personal property with an annual payment, on an individual basis, exceeding $2,500,000;

	(iii)
	supply
and Third Party manufacturing contracts and binding purchase or sale commitments with a total annual payment or financial commitment, on an individual basis, exceeding
$8,000,000;

	(iv)
	all
joint venture, partnership and stockholder agreements that involve a sharing of profits, losses, costs or liabilities with a Third Party irrespective of the value of the
contract; 

23

 

	(v)
	advertising
and sponsorship contracts with commitments, on an individual basis, exceeding $4,000,000;

	(vi)
	agreements
under which any Company has incurred, assumed or guaranteed any indebtedness for borrowed money, sale and leaseback agreements and factoring agreements and related
security agreements, on an individual basis, exceeding $5,000,000;

	(vii)
	contracts
or commitments restricting any Company or an Asset Selling Company (to the extent that the same would constitute a Purchased Asset) from engaging in or competing in any
line of business;

	(viii)
	contracts
for the management of any business owned by a Third Party;

	(ix)
	agreements
for the sale or purchase of any assets of the Business other than in the ordinary course of business, or for the grant of any options or preferential rights to purchase
any assets, property or rights of the Business (other than inventory), in each case, for consideration in excess of $8,000,000 or under which the Company or any Asset Selling Subsidiary has any
continuing obligation;

	(x)
	research
and development agreements with total annual payments or financial commitments, on an individual basis, exceeding $2,500,000;

	(xi)
	material
license agreements pursuant to which the Seller, any Company, any Asset Selling Subsidiary or any Affiliate of the Seller licenses any Intellectual Property used exclusively
in the Business to or from any Third Party;

	(xii)
	executory
contracts for capital expenditures with total annual payments or financial commitments, on an individual basis, exceeding $4,000,000; and (xiii) any other agreement
that requires an annual payment of more than $2,500,000 during the current term of such agreement or, with respect to the conduct of the Business in Significant Countries, which any Company or Asset
Selling Subsidiary is not able to terminate on twelve (12) months' notice or less without penalty.

	(b)
	Except
as disclosed in Schedule 4.8(b), the execution and delivery of this Agreement by the Seller does not, and the performance
of this Agreement by the Seller and the Selling Subsidiaries will not, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time would
become a default) under, require any consent under, or give to others any rights of termination, acceleration or cancellation of, any of the Material Contracts other than (i) those conflicts,
breaches, defaults or events of default that would not materially adversely affect the aggregate value of such Material Contracts to the Business or otherwise have a Material Adverse Effect and
(ii) (A) those consents, the failure of which to obtain, and (B) the rights of termination, acceleration or cancellation, the exercise of which, would not materially adversely
affect the aggregate value of such Material Contracts to the Business or otherwise have a Material Adverse Effect.

	(c)
	None
of the Asset Selling Subsidiaries or the Companies is, in breach of, or default under, any of the Material Contracts to which it is a party and, to the Seller's Knowledge, no
other party to any Material Contract is in breach thereof or default thereunder other than those breaches that would not materially adversely affect the aggregate value of such Material Contracts to
the Business or otherwise have a Material Adverse Effect. 

4.9   Insurance  

Except
as disclosed in Schedule 4.9, all material properties of the Companies are currently covered by insurance or self insurance or programs in such types and amounts as are consistent with 

24

 

customary
practices and standards of companies engaged in businesses similar to the Business and applicable Legal Requirements. 

4.10 Real Property  

	(a)
	Schedule 4.10(a) lists each parcel of real property owned by the Companies (the "Owned Real
Property"). None of the Seller, the Asset Selling Subsidiaries or any other Affiliate of the Seller owns any material real property which is used exclusively in the Business.

	(b)
	Schedule 4.10(b) lists each parcel of real property leased by the Companies or, to the extent used exclusively in the conduct of
the Business as currently conducted, the Asset Selling Subsidiaries (the "Leased Real Property" and, together with the Owned Real Property, the
"Real Property").

	(c)
	Except
as disclosed in Schedule 4.10(c), the Companies own all of the Owned Real Property free and clear of all Encumbrances,
other than Permitted Encumbrances.

	(d)
	Each
lease relating to material Leased Real Property is a valid agreement enforceable against the relevant Company or Asset Selling Subsidiary and, to the Seller's Knowledge, against
the other parties thereto. None of the relevant Companies or Asset Selling Subsidiaries is in material default or breach, or has received a written notice alleging that it is in material default or
breach, under any lease relating to the material Leased Real Property and, to the Seller's Knowledge, none of the other parties to such leases is in material default or breach thereunder.

	(e)
	None
of the Companies or Asset Selling Subsidiaries has received a written notice from any Governmental Authority or any Third Party that any of the Real Property listed in  Schedule 4.10(a) and
Schedule 4.10(b) is not in compliance with all applicable Legal
Requirements, except for such failures to comply that would not, individually or in the aggregate, have a Material Adverse Effect or materially adversely affect (i) the ability of the Seller to
carry out its obligations under, and to consummate the transactions contemplated by, this Agreement, (ii) the ability of the Companies or the Asset Selling Subsidiaries to conduct the Business
as currently conducted or (iii) the value or the use of such Real Property for its current purposes. None of the Companies or Asset Selling Subsidiaries has received a written threat of
condemnation or similar proceeding relating to the Real Property listed in Schedule 4.10(a) and Schedule 4.10(b)  or any portion thereof. The Real
Property represents the entirety of the material real property currently used exclusively in the Business. 

4.11 Personnel  

	(a)
	Schedule 4.11(a)(i) lists the collective bargaining agreements applicable to the Business Employees and to which any of
the Companies or the Asset Selling Subsidiaries (in respect of the Business Employees) is a party that are material to the Business. Within forty-five (45) days after the Signing
Date, the Seller will deliver to the Buyer an updated Schedule 4.11(a)(i) which shall list all collective bargaining agreements applicable
to the Business Employees and to which any of the Companies or the Asset Selling Subsidiaries (in respect of Business Employees) is a party. To the Seller's Knowledge, no collective bargaining
agreement is currently being negotiated by any of the Companies or the Asset Selling Subsidiaries to the extent related to the Business. Except as set forth in  Schedule 4.11(a)(ii), there are no:
(i) strikes, lockouts or material stoppages or work slowdowns pending or, to the Seller's Knowledge,
threatened against or involving the Companies or the Asset Selling Subsidiaries to the extent related to the Business; or (ii) material unfair labor practice charges, grievances or complaints
or material judicial or administrative proceedings pending or, to the 

25

 

Seller's
knowledge, threatened by or on behalf of any Business Employees to the extent related to the Business. 

	(b)
	Schedule 4.11(b) lists all of the agreements to which any of the Companies or any Asset Selling Subsidiary is a party that
provides for the reduction of any Business Employee's work week to thirty-five (35) hours.

	(c)
	Except
as set forth in Schedule 4.11(c), no Business Employee has a right to any extra income or bonus payment from any Company
or Asset Selling Subsidiary as a result of the execution of, or consummation of the transactions contemplated by, this Agreement and, except as disclosed in  Schedule 4.11(c), no Employee has a
legal and contractual right to any enhanced redundancy or severance payment from any Company or Asset Selling
Subsidiary arising solely from the execution of, or consummation of the transactions contemplated by, this Agreement. 

4.12 Employee Plans  

	(a)
	Schedule 4.12(a) Within forty-five (45) days after the Signing Date, the Seller will deliver to the Buyer  Schedule 4.12(a),
which will list each Business Employee Plan (other than de minimis Plans) in
effect on the Signing Date and each Subsidiary of Seller with Business Employees covered by such plan, as well as the nation or territory each such plan covers (and whether such plan provides for
retiree medical or other retiree welfare benefits), and also separately will list each other material Business Employee Plan in effect within the preceding two (2) years.

	(b)
	With
respect to each Business Employee Plan (other than de minimis Plans) in effect on the Signing Date, the Seller will make available
to the Buyer within sixty (60) days after the Signing Date, to the extent applicable, complete and accurate copies of: (i) each plan document, trust, insurance contract and amendment to
each of them; (ii) summaries of material terms provided, or required to be provided under applicable Legal Requirements, to participants and beneficiaries; (iii) solely with respect to
the Transferred Plans, licenses, certificates, stamps, letters (including favorable determination letters) or similar items issued by a governmental, quasi-governmental or administrative organization
approving its form or required for its lawful maintenance or operation; (iv) solely with respect to the Transferred Plans, the most recently filed governmental report or reports; and
(v) solely with respect to the Transferred Plans for which all of the liability is being transferred to the Buyer, the two most recent financial, actuarial, valuation and similar reports. The
Seller shall provide the Buyer with a written description of the material terms of any Business Employee Plan which is not in written form.

	(c)
	Except
as disclosed in Schedule 4.12(c), each Transferred Plan has been maintained, operated and administered in compliance in
all material respects with its terms and the applicable Legal Requirements of the relevant jurisdiction (including the requirements for any funding and Tax-favored treatment intended for
such plan or applicable to plans of its type). To the Seller's knowledge, no event, transaction or condition exists or has occurred that is reasonably likely to result in the loss or material
limitation of such Tax-favored treatment.

	(d)
	All
material contributions, premiums and benefit payments in respect of the Transferred Employees under or in connection with the Business Employee Plans due prior to the date hereof
have been timely made.

	(e)
	There
have been no acts or omissions by any party with respect to the Business Employee Plans which have given rise to or may give rise to material fines, penalties, taxes or related
charges under applicable Legal Requirements for which after the Closing Date the Companies, Buyer or any of its other Subsidiaries could reasonably be expected to be liable. 

26

  

	(f)
	Except
as set forth in Schedule 4.12(f), there are no actions, suits, claims (other than routine claims for benefits) or
investigations pending or, to Seller's Knowledge, threatened, involving any Business Employee Plan or their assets for which after the Closing Date the Companies, Buyer or any of its other
Subsidiaries could reasonably be expected to incur any material Liability and no event, transaction or condition exists or has occurred which could give rise to any such actions, suits, claims (other
than routine claims for benefits) or investigations. The Companies have no material Liability with respect to any Plan other than for contributions, payments or benefits due in the ordinary course of
business under the current Business Employee Plans.

	(g)
	Except
as set forth in Schedule 4.12(g)(i), neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any material payment becoming due on or after the Closing Date to any director, officer, employee, or former employee under any Transferred
Plan, (ii) materially increase any benefits otherwise payable under any Transferred Plan, (iii) result in any acceleration of the time of payment or vesting of any material benefits
under any Transferred Plan, or (iv) with respect to any of the Business Employees subject to taxation by the United States, result in any excess parachute payments (as defined in
Section 280G of the Code (without regard to subsection 280G(b)(4))). Except as set forth in Schedule 4.12(g)(ii), the Company and its
Subsidiaries have made no agreement, undertaking or commitment with any employee, director, officer, service provider or agent (whether written or oral) to make such person fully or partially whole
with respect to any adverse Tax consequences relating to any Transferred Plan.

	(h)
	Except
as set forth in Schedule 4.12(h) or in the Watson Wyatt Report, no Transferred Plan provides any post retirement medical,
dental, vision, life, disability or other welfare benefits or insurance coverage except as required by Legal Requirements.

	(i)
	Except
as set forth in Schedule 4.12(i), the Companies and all other sponsors of the Transferred Plans have retained the right
to unilaterally amend or terminate each Transferred Plans to the fullest extent reasonably permitted by the Legal Requirements of the relevant jurisdiction. The Seller will deliver
Schedule 4.12(i) to the Buyer within forty-five (45) days after the Signing Date. 

4.13 Taxes  

Except
as set forth in Schedule 4.13 and as solely limited to Taxes relating to Germany, France, the United States, Canada, Austria, Sweden and
Japan: 

	(a)
	all
material Tax Returns that are required to be filed on or before the Closing Date by or on behalf of each Company and each Asset Selling Subsidiary (insofar as relates to the
Purchased Assets) have been, or will be, timely filed; each such Tax Return is true and correct or will be true and correct when filed in all material respects; and all Taxes shown to be due and
payable on such Tax Returns have been, or will be, timely paid;

	(b)
	there
are no outstanding written agreements or waivers extending the statute of limitations applicable to any such Tax Return (other than extensions of time to file Tax Returns
obtained in the ordinary course) or, in the case of any Asset Selling Subsidiary, to the extent related to the Purchased Assets, which agreements or waivers could reasonably be expected to result in a
Liability for a material amount of Taxes;

	(c)
	all
material Taxes which each Company and each Asset Selling Subsidiary is required by applicable Legal Requirements to withhold or collect with respect to the Business, including
sales and use taxes, and amounts required to be withheld for Taxes of Business Employees, 

27

 

have
been duly withheld or collected and, to the extent required, have been paid over to the proper Governmental Authorities or are held in separate bank accounts for such purpose; 

	(d)
	no
Purchased Asset nor any Share to be sold by a Selling Subsidiary which is "foreign person" within the meaning of Section 1445
of the Code is a "United States Real Property Interest" within the meaning of Section 897(c)(1) of the Code;

	(e)
	no
election under U.S. Treasury Regulation Section 301.7701-3 of the Code has been filed with respect to any Company;

	(f)
	since
1 January 2005, with respect to each Company, no written claim has been made by a Governmental Authority in a jurisdiction where such Company has not filed Tax Returns
that the Company is or may be subject to material taxation by that jurisdiction;

	(g)
	none
of the Companies (A) has been a member of an Affiliated Group filing a consolidated U.S. federal income Tax Return (other than a group the common parent of which was the
U.S. Parent) or (B) has any material Liability for the Taxes of any Person under Reg. §1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor or by contract; and

	(h)
	since
May 14, 2002, Nutrition Corporation has not distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was governed in
whole or in part by Section 355 of the Code.

	(i)
	For
U.S. federal income tax reporting purposes, Nutrition Corporation is and will be on the Closing Date a member of the "consolidated
group" (within the meaning of Section 1502 of the Code and the accompanying Treasury resolutions).

	(j)
	The
Seller and Nutrition Corporation have made a valid election to file a consolidated U.S. federal income tax return. 

4.14 No Material Adverse Effects  

Since
30 September 2006 through the earlier of (i) 31 August 2007 and (ii) the Closing Date, there has been no Material Adverse Effect. 

4.15 Conduct of Business Since 30 September 2006  

Except
as disclosed in Schedule 4.15, the Business has been conducted in the ordinary and usual course, consistent with past practice since 30
September 2006 and, in particular, there has not been any Material Decision or Action other than those set forth in Schedule 4.15. For the
purpose hereof, "Material Decision or Action" shall mean any decision or action, to the extent it relates to the Business, of the Companies and the
Asset Selling Subsidiaries, to: 

	(a)
	(x) acquire
any material assets or make any material capital or financial investments other than in the ordinary course of its business operations consistent with past practice
or (y) dispose of any assets, in each case, for consideration, individually, in excess of $4,000,000 or, in the aggregate, in excess of $10,000,000, other than in the ordinary course of its
business operations consistent with past practice;

	(b)
	except
for increases in accordance with past practices not in excess of 3% in the aggregate or as may be required by any Legal Requirement or pursuant to any contracts or agreements
existing as the date hereof and disclosed to the Buyer, increase the compensation or other benefits payable to Business Employees or accelerate any rights or benefits attributed to such Business
Employees; 

28

 

	(c)
	terminate
the employment of any Business Employee whose annual gross remuneration is in excess of $250,000 (a "Senior Employee") or
materially alter the existing terms of his or her employment or enter into any severance, retention or change of control agreement with any Senior Employee;

	(d)
	create
any Encumbrance on (x) shares of capital stock or (y) any assets or properties, other than Permitted Encumbrances;

	(e)
	incur
additional indebtedness (other than drawings on existing lines of credit) or issue rights to acquire any debt securities issued by it or repurchase or prepay any indebtedness or
enter into any arrangement having the economic effect of any of the foregoing; Purchase Agreement 38

	(f)
	with
respect to the Companies, issue shares, other voting securities, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities or otherwise make any changes to its capital stock;

	(g)
	with
respect to the Companies, pay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)
or legal proceedings for payments in excess of $2,500,000 other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in
accordance with the terms of liabilities recognized or disclosed in the Financial Statements;

	(h)
	waive
the benefits of, agree to modify in any manner detrimental to any Company or any Asset Selling Subsidiary, terminate, release any Person from or fail to enforce any material
confidentiality, non-competition, standstill or similar agreement to which any Company or Asset Selling Subsidiary is a party or of which any Company or Asset Selling Subsidiary is a
beneficiary in relation to the Business;

	(i)
	enter
into, terminate or amend any Material Contract or Real Property Lease (or other similar contract, which if in effect on the Signing Date, would constitute a Material Contract or
Real Property Lease), other than in the ordinary course of business;

	(j)
	incur,
prior to the Signing Date, any damage or destruction to any assets or properties exclusively related to the Business (whether or not covered by insurance) having a value of in
excess of $4,000,000, individually, and $10,000,000 in the aggregate, and, between the Signing Date and the Closing Date $20,000,000 in the aggregate;

	(k)
	enter
into or adopt, or amend any bonus, profit sharing, stock option, stock appreciation, restricted stock pension retirement, deferred compensation, retention, severance or other
employee benefit agreement, trust, plan or fund or other arrangement for the benefit of Business Employees, other than any such plans or arrangements that are to be retained by the Seller following
the Closing;

	(l)
	made
any material Tax election or any settlement or compromise with any material federal, state or local Tax liability, in each case, related to the Business;

	(m)
	modify
in any material respect the Accounting Principles; and

	(n)
	authorize,
or commit, resolve or agree to take, any of the foregoing actions. 

4.16 Litigation and Other Proceedings; Orders  

	(a)
	Except
as listed in Schedules 4.11(a)(ii), 4.12(f),  4.13, 4.16,
4.18 and  4.20(b), there are no Proceedings involving a claim in excess of $2,500,000 against any Company or any Asset Selling Subsidiary primarily related
to the
Business. Except as set forth in Schedule 4.16, since 30 September 2006, neither the Seller nor any Company or any Asset Selling
Subsidiary has 

29

 

received
a written product liability claim or initiated a product recall in respect of the quality or fitness for use of any material amount of Business Products (it being understood and agreed that a
product return in the ordinary course of business does not constitute a product liability claim). 

	(b)
	Except
as set forth in Schedule 4.16, to the Seller's Knowledge, none of the Seller, any Company or any Asset Selling Subsidiary
is subject, in connection with the Business, to any order, judgment, decree, injunction, stipulation, settlement agreement or consent decree of or with any court or other Governmental Authority that
imposes any material obligations on the Business (the "Business Orders"). Except as set forth in  Schedule 4.16, no Company or Asset Selling Subsidiary
has entered into any settlement or compromise related to the Business for which the Buyer
or its Affiliates, including from and after the Closing, the Companies may have continuing obligations after the Closing Date. Except as set forth in  Schedule 4.16, the Seller, the Companies and
the Asset Selling Subsidiaries are currently, and since 1 January 2006 have, operated, the
Business in material compliance with the Business Orders. 

4.17 Licenses and Permits  

        The Companies and the Asset Selling Subsidiaries possess all material Governmental Permits necessary for the conduct of the Business as currently conducted, a
complete list of which (other than the Environmental Permits) will be delivered to the Buyer by the Seller prior to the Closing Date. Except as set forth in  Schedule 4.17, to the Seller's Knowledge,
 none of the Seller, any Company or any Asset Selling Subsidiary has received written notice that any
Governmental Authority intends to revoke or rescind any material Governmental Permit related to the Business. The Business as currently conducted complies in all material respects with the
Governmental Permits. 

4.18 Environmental Matters  

	(a)
	Except
as disclosed in Schedule 4.18:

	(i)
	to
the Seller's Knowledge, the Companies and the relevant Asset Selling Subsidiaries to the extent related to the conduct of the Business as currently conducted, and during the two
(2) year period immediately preceding the date hereof, the Business has been conducted in material compliance with all applicable Environmental Laws;

	(ii)
	to
the Seller's Knowledge, all material Environmental Permits required under all applicable Environmental Laws for the continued operation of the Business have been obtained, are
valid, and an accurate and complete list of such Environmental Permits will be delivered to the Buyer by the Seller prior to the Closing Date;

	(iii)
	none
of the Real Property is involved in or subject to any material pending or, to the Seller's Knowledge, threatened suit, prosecution, investigation, consent decree or consent
agreement, notice of possible violation, inquiry or proceeding by or before any court or Governmental Authority under any Environmental Law;

	(iv)
	to
the Seller's Knowledge, no Person or Governmental Authority has asserted any requests or demands in amounts material to the Business for damages, costs or expenses, demands,
causes of action or claims arising out of or due to the emission, disposal, discharge or other release of any Hazardous Substances, or arising out of or due to any injury to human health or the
environment by reason of the current or past condition or operation of any facility, or for offsite treatment, storage or disposal of Hazardous Substances transported from the Real Property; 

30

 

	(v)
	there
is no environmental condition, situation or incident on, at, under, in or concerning any Real Property that could give rise to any material Environmental Liability under any
Environmental Laws; and

	(vi)
	the
Companies and the relevant Asset Selling Subsidiaries have made available to the Buyer true and complete copies of all material written environmental assessments, correspondence,
reports, data, analyses and compliance audits that have been prepared by or on behalf of the Companies and the relevant Asset Selling Subsidiaries with respect to the Real Property or any property
formerly owned, operated or leased by the Companies and the relevant Asset Selling Subsidiaries, in each case to the extent prepared since January 1, 2004 and in the Companies' or the relevant
Asset Selling Subsidiaries' possession or control.

	(b)
	The
Buyer acknowledges that (i) the representations and warranties contained in this Section 4.18 are the only representations and warranties being made with respect to
compliance with or liability under any Environmental Law or with respect to any environmental matters, including natural resources, related in any way to the Business or to this Agreement or its
subject matter and (ii) no other representation contained in this Agreement will apply to any such matters and no other representation and warranty, express or implied, is being made with
respect thereto. 

4.19 Governmental Consents and Approvals  

No
consent, approval, license, permit, order or authorization of, or registration, declaration or filing with or permit from, any Governmental Authority is required to be obtained or made by or with
respect to the Seller or any Seller Subsidiary in connection with the execution and performance of this
Agreement or the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, other than (i) compliance with and filings under the HSR Act,
(ii) compliance under the Council Regulation (EC) No. 139/2004, as amended, or, in the event of a referral by the European Commission pursuant to Art. 9 of the same regulation, the
transactions contemplated by this Agreement can be lawfully consummated pursuant to the applicable national competition laws of the member states to which the transactions have been referred,
(iii) if applicable, compliance with and filings under the Investment Canada Act and the Competition Act (Canada) ("Competition Act"),
(iv) any additional consents and filings required under any other applicable antitrust or competition law or regulation, except (x) where the failure to obtain any such consent,
approval, authorization or action, or to make any such filing or notification, would not prevent or materially delay the consummation by the Seller of the transactions contemplated by this Agreement,
(y) where the failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not have a Material Adverse Effect or (z) as may be
necessary as a result of any facts or circumstances relating solely to the Buyer or any of its Affiliates, and (v) as disclosed in  Schedule 4.19. 

4.20 Intellectual Property and Know-How  

	(a)
	Schedule 4.20(a)(i) lists (i) all Intellectual Property that is the subject of a registration or application for
registration, which is currently used exclusively in the Business and that (x) is owned or licensed by the Companies (the "Companies' Intellectual
Property") or (y) is Separate Intellectual Property and (ii) the record and beneficial owners of all such Companies' Intellectual Property and Separate
Intellectual Property. The Companies' Intellectual Property and the Separate Intellectual Property constitute all of the Intellectual Property that is used by the Seller, the Companies or the Asset
Selling Subsidiaries exclusively in the Business. Except as disclosed in Schedule 4.20(a)(ii), (x) the Seller or an Asset Selling
Subsidiary, as applicable, owns all right and interest in, and all title to, the Separate Intellectual Property free and clear 

31

 

of
any Encumbrances, other than Permitted Restrictions, and (y) the relevant Companies own all rights and interest in, and have all title to, the Companies' Intellectual Property free and clear
of all Encumbrances, other than Permitted Restrictions. 

	(b)
	To
the Seller's Knowledge, there are no facts or circumstances that would render any of the Companies' Intellectual Property or the Separate Intellectual Property invalid,
unenforceable or non-assignable. Except as disclosed in Schedule 4.20(b), since 1 January 2004 neither the Seller nor, to the
Seller's Knowledge, any Company or Asset Selling Subsidiary has received a written claim that the Companies' Intellectual Property or the Separate Intellectual Property is invalid, unenforceable or
non-assignable, nor has any such claim been asserted in any pending or, to the Seller's Knowledge, threatened litigation or proceeding before any Governmental Authority, and none of the
Companies' Intellectual Property or the Separate Intellectual Property is subject to any pending or, to the Seller's Knowledge, threatened proceedings for infringement, opposition, cancellation or
revocation. All registration or application fees necessary to maintain the Companies' Intellectual Property and the Separate Intellectual Property have been paid, all necessary renewal applications
have been filed and all other material steps necessary for maintenance have been taken, other than such fees, renewal applications and steps the failure of which to pay, file or take would not, in the
aggregate, materially adversely affect the value or use of the Companies' Intellectual Property or the Separate Intellectual Property.

	(c)
	Except
as disclosed in Schedule 4.20(c), the relevant Companies own all right and interest in, and all title to, the Companies'
Know-How free and clear of any Encumbrances other than Permitted Restrictions and the Seller or an Affiliate of the Seller owns all right and interest in, and all title to, all other
Know-How used primarily in the Business free and clear of any Encumbrances other than Permitted Restrictions.

	(d)
	Except
as disclosed in Schedule 4.20(d) or as would not, individually or in the aggregate, materially adversely affect the value
or use of the Companies' Know-How since 1 January 2004, the Companies have taken reasonable steps in accordance with normal industry practice to maintain the confidentiality of the
Companies' confidential information, including the Companies' Know-How, and the Seller and its Affiliates have taken all steps that are reasonably necessary to protect all other
Know-How used primarily in the Business.

	(e)
	Except
as disclosed in Schedule 4.20(e), to the Seller's Knowledge, the conduct of the Business as currently conducted does not
violate any license or agreement, infringe, misappropriate or otherwise violate any Intellectual Property or Know-How owned by a Third Party.

	(f)
	To
the Seller's Knowledge, no Person has infringed the Company's Intellectual Property, the Separate Intellectual Property and/or the Companies' Know-How rights.

	(g)
	Since
1 January 2006, to the Seller's Knowledge, there have been no material breaches of the Business's security procedures or any material attempted or successful unauthorized
incidents of access, use, disclosure, modification, or destruction of information or interference with systems operations in any information system or database of the Business, including any such
breach or incident that required or requires notice to any Third Party. 

4.21 Tangible Personal Property  

The
Seller and the relevant Asset Selling Subsidiaries own, lease or have the legal right to use all of the Tangible Personal Property free and clear of all Encumbrances, except for Permitted
Encumbrances. 

32

 

4.22 Assets  

	(a)
	Except
as set forth in Schedule 4.22(a), each of the Seller, the Asset Selling Subsidiaries and the Companies owns, leases or
has the legal right to use all the properties and assets, including the Companies' Intellectual Property, the Separate Intellectual Property, the Company Know-How, the Know-How
of the Seller and its Affiliates, the Owned Real Property, the Leased Real Property and the Tangible Personal Property, used exclusively in the conduct of the Business as crrently conducted and, with
respect to contract rights, is a party to and enjoys the right to the benefits of all contracts, agreements and other arrangements used by the Seller, the Asset Selling Subsidiaries and the Companies
exclusively in the conduct of the Business as currently conducted.

	(b)
	The
Assets, together with the rights the Buyer will have under the Ancillary Agreements, constitute (i) all the properties, assets and rights used exclusively in, and
(ii) all such properties, assets and rights as are necessary for the continued conduct of, the Business as currently conducted by the Seller, the Companies and the Asset Selling Subsidiaries.

	(c)
	Except
as set forth in Schedule 4.22(c) or disclosed to the Buyer by the Seller prior to the Signing Date, there are no known or
anticipated material requirements to make material capital expenditures to allow the Business to continue to operate in the ordinary course of business. 

4.23 Compliance with Legal Requirements  

        Except with respect to Legal Requirements arising under (i) Environmental Laws (which are the subject of Section 4.18), (ii) Product
Registrations (which are the subject of Section 4.24), (iii) employee benefits (which are the subject of Section 4.12), and except as set forth in  Schedule 4.23, to the Seller's
Knowledge, the Companies and the Asset Selling Subsidiaries are in material compliance with all Legal Requirements
applicable to the conduct of the Business, and since 1 January 2006, to the Seller's Knowledge, none of the Seller, any Company or any Asset Selling Subsidiary has received written notice from
a Governmental Authority of any material violations with respect to Legal Requirements applicable to the ownership or operation of the Business, or any notice that any material facility of the
Business is not in material compliance with applicable Legal Requirements or requires any material improvement, modification or alteration in order to lawfully continue any aspect of the operations
conducted at the facility. 

4.24 Business Products  

	(a)
	Prior
to the Closing Date, the Seller will deliver to the Buyer a true and complete list of all Product Registrations granted to the Companies and the Asset Selling Subsidiaries in
respect of the Business Products, and the jurisdiction in which each such Product Registration was issued or granted. Except as specified in  Schedule 4.24, the Seller, the Companies and the Asset
Selling Subsidiaries are the exclusive owners of the Product Registrations and none of
them have granted any right of reference with respect thereto to any Third Party. Prior to the Closing Date, Seller will deliver to the Buyer a true and complete list of all Business Products that are
eligible for reimbursement from health care Governmental Authorities.

	(b)
	The
Business has not manufactured or sold a product prior to the Closing Date that will result in a material Product Liability. 

4.25 Brokers  

Except
for Goldman Sachs & Co., 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 

33

 

this
Agreement based upon or arising from arrangements made on behalf of the Seller and its Affiliates. The Seller is solely responsible for any fees, commissions and expenses or other amounts which
are or may become payable to Goldman Sachs & Co. in connection with this Agreement. 

5.     REPRESENTATIONS AND WARRANTIES OF THE BUYER  

The
Buyer hereby represents and warrants to the Seller, as of the Signing Date and as of the Closing Date, as follows: 

5.1   Organization and Authority  

The
Buyer is a corporation duly organized, validly existing and in good standing under the laws of Switzerland and has all necessary corporate power and authority to enter into this Agreement and the
Ancillary Agreements to which it is a party and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Ancillary Agreements by the Buyer or the Buyer Designated Affiliates, as applicable, the performance by each of them of their respective obligations hereunder and thereunder and
the consummation by the Buyer and the Buyer Designated Affiliates of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of the
Buyer and, in the case of the Buyer Designated Affiliates, will have been duly authorized by all requisite corporate action on the part of the Buyer Designated Affiliates as of the Closing. This
Agreement has been, and upon their execution the Ancillary Agreements will have been, duly executed
and delivered by the Buyer and the Buyer Designated Affiliates and (assuming due authorization, execution and delivery by the Seller) constitutes, and upon their execution the Ancillary Agreements
will constitute, a legal, valid and binding obligation of the Buyer and the Buyer Designated Affiliates enforceable against the Buyer and the Buyer Designated Affiliates in accordance with their
respective terms. 

5.2   No Conflict  

Assuming
the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions referred to in Section 5.3, neither the execution and delivery by the
Buyer of this Agreement and by the Buyer and the Buyer Designated Affiliates of the Ancillary Agreements to which the Buyer or each Buyer Designated Affiliate is a party, nor the performance by the
Buyer or each Buyer Designated Affiliate of its obligations hereunder or thereunder, or the consummation of the transactions contemplated hereby or thereby will (a) result in any breach of any
provision of the Buyer's or each Buyer Designated Affiliates' respective certificate of incorporation or by-laws (or other similar organizational documents), (b) result in any
breach of, or constitute a default under, any contract or judgment to which the Buyer or a Buyer Designated Affiliate is a party or by which it is bound, or (c) violate any applicable Legal
Requirement, other than such breaches, defaults or violations which would not, individually or in the aggregate, prevent or materially delay the consummation by the Buyer or the Buyer Designated
Affiliates of the transactions contemplated by this Agreement and the Ancillary Agreements. 

5.3   Governmental Consents  

The
execution and delivery of this Agreement by the Buyer do not, and the performance of this Agreement and the Ancillary Agreements by the Buyer and the Buyer Designated Affiliates will not, require
any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority other than (i) compliance with and filings under the HSR Act and
(ii) compliance under the Council Regulation (EC) No. 139/2004, as amended, or, in the event of a referral by the European Commission pursuant to Art. 9 of the same regulation, the
transactions contemplated by this Agreement can be lawfully consummated pursuant to the 

34

 

applicable
national competition laws of the member states to which the transactions have been referred, (iii) any additional consents and filings required under any other applicable antitrust
or competition law or regulation, except where the 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 the Buyer or any Buyer Designated Affiliate of the transactions contemplated by this Agreement and the Ancillary Agreements, and (iv) as described in  Schedule 5.3.  

5.4   Financing of the Transactions  

The
Buyer has and on the Closing Date will have sufficient immediately available funds to pay, in cash, the Purchase Price and all other amounts payable pursuant to this Agreement and the Ancillary
Agreements or otherwise necessary to consummate the transactions contemplated hereby and thereby. 

6.     INDEMNIFICATION  

6.1   Indemnification by the Seller  

	(a)
	General Principle: In the event of any breach of any representation or warranty by the Seller contained in Section 4 of this
Agreement, the Seller will indemnify the Buyer, other than indemnification for Taxes (which will be governed solely by Section 6.6), for all losses, costs, damages and expenses (including but
not limited to reasonable attorneys' fees) (each, a "Loss") suffered by the Buyer and its Affiliates including, from and after the Closing, the
Companies, within the limits of this Section 6.1 net of (i) any insurance or other recoveries payable to the Buyer in connection with the facts giving rise to the right of
indemnification and (ii) any Tax benefits attributable to the incurrence or payment of the incurred Losses (the "Buyer Incurred Damages"). The
Buyer will use, and will cause each Company to use, commercially reasonable efforts to mitigate any such Buyer Incurred Damages. Any positive, incidental, special, indirect or consequential damages,
and any other action or relief, including a right of rescission or revocation of this Agreement, loss of future revenue or income, or loss of business reputation or opportunity, and any remedies based
on a potential breach of a duty to negotiate in good faith (culpa in contrahendo) or based on a theory of material error
(Grundlagenirrtum), is expressly excluded.

	(b)
	De Minimis: No Buyer Incurred Damages may be claimed by the Buyer or will be reimbursable by the Seller or will be included in
calculating the aggregate Buyer Incurred Damages set forth in Section 6.1(c) other than Buyer Incurred Damages in excess of $500,000 (the "De
Minimis") resulting from any single claim or aggregated claims arising out of the same facts, events or circumstances; provided that the foregoing limitation shall not apply to
any Buyer Incurred Damages arising from a breach of the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4 and 4.25.

	(c)
	Threshold: The Seller's liability for indemnification under this Section 6.1, excluding liabilities arising in respect of
breaches of Sections 4.18 and 4.24(b), will apply only to Buyer Incurred Damages which, in the aggregate and subject to the De Minimis, exceed $45,000,000 (the
"Threshold") and then only to the extent the amount of such Buyer Incurred Damages exceeds the Threshold in total; provided that the foregoing
limitation shall not apply to any Buyer Incurred Damages arising from a breach of the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4 and 4.25. The Seller's liability for
indemnification under this Section 6.1 arising from breaches of the representations and warranties of the Seller set forth in Sections 4.18 and 4.24(b) will apply only to the Buyer Incurred
Damages which, in the 

35

 

aggregate
and subject to the De Minimis, exceed $15,000,000 and then only to the extent the amount of such Buyer Incurred Damages exceeds $15,000,000. 

	(d)
	Maximum Recovery: Notwithstanding anything in this Agreement to the contrary, the Seller's liability for indemnification under this
Section 6.1 will not exceed 30% of the Purchase Price; provided that the foregoing limitation shall not apply to any Buyer Incurred Damages
arising from a breach of the representations and warranties set forth in Sections 4.1, 4.2, 4.3 and 4.4.

	(e)
	Exclusions: The liability of the Seller under this Section 6.1 will be excluded:

	(i)
	if
and to the extent that the facts or circumstances giving rise to the Buyer Incurred Damages have been fully and fairly disclosed in writing in the documents or other materials
contained in the Data Room;

	(ii)
	if
the Seller has, within sixty (60) days following receipt of the Buyer's notice of the breach of a representation or warranty, remedied such breach; or

	(iii)
	if
and to the extent that the Buyer and/or its Affiliates have been reimbursed for such Buyer Incurred Damages by a Third Party (including reimbursement under any insurance policy
net of the amount by which insurance premiums have been increased as a result of the claim);

	(iv)
	if
and to the extent that such Buyer Incurred Damages arise from, or are increased by, the enactment of any new legislation (including Tax legislation), or the amendment of any
existing laws or rules (including Tax law) after the Closing Date;

	(v)
	if
and to the extent that such Buyer Incurred Damages arise from, or are increased by, any act or omission by the Buyer or its Affiliates or, following the Closing Date, by the
Companies other than in the ordinary course of business; or

	(vi)
	if
and to the extent that allowance, provision or reserve in respect of any specific Buyer Incurred Damages was made in the Financial Statements, but only up to the amount of such
allowance, provision or reserve.

	(f)
	Subsequent Receipt: If the Seller reimburses the Buyer or any Company for Buyer Incurred Damages and the Buyer or any Company
subsequently recovers from, or is reimbursed by, a Third Party (including any insurer or Tax authority), in whole or in part, for matters related to the same subject matter of such Buyer Incurred
Damages, the Buyer will, or will cause the relevant Company to, promptly repay to the Seller the lesser of:

	(i)
	the
amount equal to the amount recovered from such Third Party less any out-of-pocket costs and expenses (including the amount insurance premiums have
increased as a result of such claim) incurred by the Buyer or any Company in recovering the same; or

	(ii)
	the
amount paid by the Seller in respect of such claim. 

6.2   Indemnification by the Buyer  

	(a)
	General Principle: In the event of any breach of any representation or warranty by the Buyer contained in Section 5 of this
Agreement, the Buyer will indemnify the Seller for all Losses suffered by the Seller within the limits of this Section 6.2 net of (i) any insurance or other recoveries payable to the
Seller in connection with the facts giving rise to the right of indemnification and (ii) any Tax benefits attributable to the incurrence or payment of the incurred losses, costs, damages and
expenses (the "Seller Incurred Damages"). The Seller will use and will cause its Affiliates to use commercially reasonable efforts to mitigate any such
Seller Incurred Damages. Any positive, incidental, special, indirect or consequential damages, and any other action or relief, including a right of rescission or revocation of this Agreement, 

36

 

loss
of future revenue or income, or loss of business reputation or opportunity, and any remedies based on a potential breach of a duty to negotiate in good faith (culpa in
contrahendo) or based on a theory of material error (Grundlagenirrtum), is expressly excluded. 

	(b)
	De Minimis: No Seller Incurred Damages may be claimed by the Seller or will be reimbursable by the Buyer or will be included in
calculating the aggregate Incurred Damages set forth in Section 6.2(c) other than Seller Incurred Damages in excess of the De Minimis resulting from any single claim or aggregated claims
arising out of the same facts, events or circumstances.

	(c)
	Threshold: The Buyer's liability for indemnification under this Section 6.2 will apply only to Seller Incurred Damages which, in
the aggregate and subject to the De Minimis, exceed the Threshold and then only to the extent the amount of such Seller Incurred Damages exceeds the Threshold in total.

	(d)
	Maximum Recovery: Notwithstanding anything in this Agreement to the contrary, the Buyer's liability for indemnification under this
Section 6.2 will not exceed 30% of the Purchase Price.

	(e)
	Exclusions: The liability of the Buyer under this Section 6.2 will be excluded:

	(i)
	if
the Buyer has, within sixty (60) days following receipt of the Seller's notice of the breach of a representation or warranty, remedied such breach;

	(ii)
	if
and to the extent that the Seller and/or its Affiliates have been reimbursed for such Seller Incurred Damages by a Third Party (including reimbursement under any insurance policy
net of the amount by which insurance premiums have been increased as a result of the claim); or

	(iii)
	if
and to the extent that such Seller Incurred Damages arise from, or are increased by, the enactment of any new legislation (including Tax legislation), or the amendment of any
existing laws or rules (including Tax law) after the Closing Date.

	(f)
	Subsequent Receipt: If the Buyer reimburses the Seller for Seller Incurred Damages and the Seller subsequently recovers from or is
reimbursed by a Third Party (including any insurer or Tax authority), in whole or in part, for matters related to the same subject matter of such Seller Incurred Damages, the Seller will promptly
repay to the Buyer the lesser of:

	(i)
	the
amount equal to the amount recovered from such Third Party less any out-of-pocket costs and expenses (including the amount insurance premiums have
increased as a result of such claim) incurred by the Seller in recovering the same; or

	(ii)
	the
amount paid by the Buyer in respect of such claim. 

6.3   Survival and Notice of Claims  

	(a)
	The
representations and warranties of the parties contained in Section 4 and Section 5 of this Agreement will survive until the eighteenth (18th) month anniversary of
the Closing Date; provided, however, that (i) any claim for indemnification arising under or in
connection with a breach of a representation or warranty set forth in Sections 4.1, 4.2, 4.3 and 4.4 and 4.13 (i) and (j) will survive until ninety (90) days after the expiration
of the applicable statute of limitations, (ii) any claim for indemnification arising under or in connection with a breach of a representation or warranty set forth in Sections 4.18 and 4.24(b)
shall survive until the third (3rd) anniversary of the Closing Date and (iii) any claim for indemnification arising under or in connection with a breach of a representation or warranty set
forth in Section 4.13 (a) through (h) shall terminate as of the Closing Date, and, provided further, that any claim made with
reasonable specificity by the party seeking to be indemnified within the time periods set forth in this Section 6.3 will survive until such claim is finally and fully resolved. 

37

 

No
claim may be asserted nor may any Proceeding be commenced against either party for breach of any representation or warranty contained herein, unless written notice of such claim or Proceeding is
received by such party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or Proceeding on or prior to the date on which the representation or
warranty on which such claim or Proceeding is based ceases to survive as set forth in this Section 6.3. 

	(b)
	A
party seeking indemnification under this Section 6 will give the other party notice of any matter which such indemnified party has determined has given or could give rise to
a right of indemnification under this Agreement, within sixty (60) days of such determination, stating the amount of the Loss, if known, and method of computation thereof, and containing a
reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises. The failure to provide such notice within the specified time period shall not
relieve the indemnifying party of any obligation in respect of the claim except to the extent that the indemnifying party shall have been prejudiced thereby. 

6.4   Remedies  

The
Buyer and the Seller acknowledge and agree that (i) following the Closing, the indemnification provisions of Section 6.1 and Section 6.2 (and with respect to Taxes,
Section 6.6) will be the sole and exclusive remedies of the Buyer and the Seller for any breach by the other party of the representations and warranties in this Agreement, and
(ii) anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein will give rise to any right on the part of the Buyer or
the Seller, after the Closing, to rescind this Agreement or any of the transactions contemplated hereby. Each party hereto will take all reasonable steps to mitigate its Losses upon and after becoming
aware of any event which could reasonably be expected to give rise to any Losses. 

6.5   Third Party Claims  

	(a)
	If
any claim is made against the Companies, the Seller, the Selling Subsidiaries or the Buyer that, if sustained, would give rise to indemnification under Sections 6.1 or 6.2 of this
Agreement, the Seller or the Buyer, as the case may be (the "Indemnified Party"), will promptly notify the other party (the
"Indemnifying Party") in writing of the claim and will afford the Indemnifying Party, or its designee, the opportunity to defend or to settle the claim
at the Indemnifying Party's sole expense. The Indemnifying Party will have the right to defend or, subject to clause (b) below, settle, at its own expense and with counsel of its choice, any
such matter involving the asserted liability of the Indemnified Party, if the Indemnifying Party promptly gives written notice of its intention to do so to the Indemnified Party.

	(b)
	In
the event that the Indemnifying Party exercises the right to undertake any such defense against any Third Party claim as provided above, the Indemnified Party may participate in
such defense at its own expense. The Indemnified Party will cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all
witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably requested by the Indemnifying
Party. Similarly, in the event that the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party claim, the Indemnifying Party will cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying Party's expense, all such witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as is reasonably requested by the Indemnified Party. No such Third Party claim may be settled by the Indemnifying Party without
the prior 

38

 

written
consent of the Indemnified Party unless such settlement provides for a full and unconditional release of the Indemnified Party. If the Indemnifying Party elects to direct the defense of any
such Third Party claim, the Indemnified Party will not pay, or permit to be paid, any part of such Third Party claim unless the Indemnifying Party consents in writing to such payment, or unless the
Indemnifying Party withdraws from the defense of such Third Party claim or unless a final judgment, from which no appeal may be taken by or on behalf of the Indemnifying Party, is entered against the
Indemnified Party for such Third Party claim. 

6.6   Tax Indemnification  

The
rights and obligations of the parties with respect to indemnification for any and all Taxes will be governed solely by this Section 6.6. 

	(a)
	General Principle: Subject to the provisions of this Section 6.6, the Seller will indemnify the Buyer for Excluded Taxes, net of
any Tax benefits attributable to the incurrence or payment of such Taxes, and the Buyer shall be responsible for all other Taxes relating to the Companies, the Purchased Assets and the Business.

	(b)
	Allocation: With respect to any Tax that is payable with respect to a Straddle Period, the amount of such Tax allocable to the
Pre-Closing Period will be deemed equal to the Tax that would be payable if the taxable period ended with the Closing Date; provided,  however, that, in the
case of a Tax imposed on a periodic basis and measured by the level of any item (such as a capital Tax), the amount of such Tax
allocable to the Pre-Closing Period will be determined by multiplying the Tax by a fraction the numerator of which is the number of calendar days in the portion of the period ending on the
Closing Date and the denominator of which is the number of calendar days in the entire taxable period.

	(c)
	Exclusions: Notwithstanding anything to the contrary herein, the liability of the Seller to indemnity for Excluded Taxes under this
Section 6.6 will not apply if and to the extent that such Taxes arise from or are increased by any act or omission by the Buyer or its Affiliates, or following the Closing Date, by any Company
other than in the ordinary course of business, or to the extent that, as of the Closing Date, such Taxes have been properly collected or withheld in accordance with applicable law but not yet remitted
to the relevant Governmental Authority.

	(d)
	Survival/Exclusivity: The obligation of the Seller to indemnify the Buyer for Excluded Taxes under this Section 6.6 will
terminate on the date which is ninety (90) days after the expiration of the statute of limitations with respect to such Taxes.

	(e)
	Indemnification
payments by the Seller of any Taxes due under this Section 6.6 will be made within thirty (30) days following written notice by the Buyer that payment of
any amounts to the appropriate Governmental Authority is due, provided that the Seller will not be required to make any payment earlier than two
(2) days before such Taxes are due to the appropriate Governmental Authority. Upon request by the Seller, the Buyer will deliver to the Seller reasonable documentary evidence that such Taxes
are due and payable. In the case of any Tax that is contested in accordance with the provisions of Section 6.8, payment of such Tax to the appropriate Governmental Authority will be considered
due no earlier than the date a final determination to such effect is made by the appropriate Governmental Authority or a court of proper jurisdiction. 

6.7   Tax Refunds  

The
Seller will be entitled to any Tax refund, credit or similar benefit relating to the Companies, the Purchased Assets or the Business for any Pre-Closing Period (including, for the
avoidance of 

39

 

doubt,
any such credit relating to a Pre-Closing Period obtained through a reduction in Tax liability for a taxable period ending after the Closing Date). If the Buyer or any of its
Affiliates or, following the Closing, any Company receives any such refund or credit, the Buyer will pay to the Seller (or cause to be paid to the Seller) the amount of such refund or credit within
five (5) Business Days of the earlier of receipt or entitlement thereto. The Buyer will, if the Seller so requests and at the Seller's expense, file (or cause to be filed) a claim for any Tax
refunds or Tax credits that are allocable to the Seller hereunder. 

6.8   Tax Contests  

	(a)
	After
the Closing, the Buyer will promptly notify the Seller in writing of the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim on the
Buyer or any Company, which if determined adversely to the taxpayer or after the lapse of time, would be grounds for indemnification by the Seller under Section 6.6. Such notice will contain
factual information (to the extent known to the Buyer) describing the asserted Tax liability in reasonable detail and will include copies of any notice or other document received from the relevant
taxing authority in respect of any such asserted Tax liability. If the Buyer fails to give the Seller prompt notice of an asserted Tax liability, then (i) if the Seller is precluded by the
failure to give prompt notice from contesting the asserted Tax liability in both the administrative and judicial forums, the Seller will not have any obligation to indemnify for any loss arising out
of such asserted Tax liability, and (ii) if the Seller is not so precluded from contesting but such failure to give prompt notice results in a detriment to the Seller, any amount by which the
Seller is otherwise required to indemnify the Buyer with respect to such liability will be reduced by the amount of such detriment.

	(b)
	The
Seller may elect to direct, through counsel of its own choosing and at its own expense, any audit, claim for refund and administrative or judicial proceeding involving any
asserted Tax liability with respect to which indemnity may be sought by the Buyer (a "Contest"). If the Seller elects to direct the Contest of an
asserted Tax liability, the Seller will, within ten (10) Business Days of receipt of the notice of asserted Tax liability, notify the Buyer of its intent to do so, and the Buyer will cooperate
and will cause any Company, as the case may be, to cooperate, at the Seller's expense, in each phase of such Contest. The Seller may not settle or compromise any claim that would reasonably be
expected to result in additional material Taxes for the account of the Buyer or its Affiliates for a Post-Closing Period without the prior consent of the Buyer (which consent will not be
unreasonably withheld or delayed). If the Seller does not elect to direct the Contest, the Buyer may assume control of the Contest; provided, however, that the Buyer may not settle or compromise any
asserted Tax liability without the prior written consent of the Seller (which consent will not be unreasonably withheld or delayed). 

6.9   Tax Returns and Payments  

From
and after the Closing, the Buyer will prepare and file or otherwise furnish to the appropriate party (or cause to be prepared and filed or so furnished) in a timely manner all Tax Returns
relating to the Companies and the Purchased Assets, except for (i) income and similar Tax Returns of the Asset Selling Subsidiaries, and (ii) Tax Returns for which any Company joins in
filing on a consolidated, combined, unitary or similar basis with the Seller or any of its Affiliates (other than a Company) for a taxable period ending on or prior to, or including, the Closing Date.
Tax Returns filed by the Buyer for any Pre-Closing Period or Straddle Period will be prepared in a manner consistent with past practices employed by the Seller with respect to the
Companies and the Purchased Assets. The Buyer and the Seller will consult with each other prior to filing any material Tax Returns for a Pre-Closing Period or Straddle Period. With respect
to any Tax Return required 

40

 

to
be filed with respect to any Company or the Purchased Assets after the Closing Date, and as to which an Excluded Tax is allocable to the Seller, the Buyer will provide the Seller with a copy of
such completed Tax Return and a statement indicating the amount of Tax shown on such Tax Return that is allocable to the Seller at least twenty (20) days prior to the due date (including any
extension thereof) for the filing of such Tax Return, and the Seller will have the ability to review and comment on such Tax Return and statement prior to the filing of such Tax Return. The Seller and
the Buyer will, in any event, consult with each other and attempt in good faith to resolve any issues arising from the Seller's review of any such Tax Return and statement prepared by the Buyer. 

6.10 Treatment of Indemnity Payments  

The
Seller and the Buyer agree to treat all payments made under the indemnity provisions of this Agreement, and for any misrepresentations or breaches of warranties or covenants, as adjustments to the
Purchase Price. 

6.11 No Duplicative Adjustments  

Notwithstanding
anything to the contrary contained in this Agreement, to the extent that an adjustment has been made to the Purchase Price or any other payments are made hereunder in respect of any
matter relating to or arising out of this Agreement, such matter will, to the extent of such adjustment or other payment, not constitute a breach of any representation, warranty, covenant or agreement
contained herein, and the Buyer will not be entitled to any indemnification with respect thereto. 

7.     OTHER COVENANTS OF THE PARTIES  

7.1   Access to Information Prior to the Closing Date  

From
the Signing Date until the Closing Date, upon reasonable notice, the Seller will, and will cause each Selling Subsidiary, Company and each of their respective officers, employees and other
representatives, (i) to afford the Buyer and its representatives reasonable access, during normal business hours, to the offices, properties and books and records of each Company and
(ii) to furnish to the representatives of the Buyer such additional information regarding the Companies, and the Business as the Buyer and its representatives may from time to time reasonably
request; provided, however, that such investigation will be made upon reasonable notice, during normal
business hours, and in a manner that will not unreasonably interfere with the conduct of the business of the Seller, the Selling Subsidiaries, the Companies or the Business, and will not include any
right by the Buyer or its representatives to investigate or collect any samples of air, surface water, groundwater or soil at or from such properties. Notwithstanding anything to the contrary in this
Agreement, the Seller will not be required to disclose any information to the Buyer if such disclosure would, in the Seller's sole
discretion, (i) cause significant competitive harm to the Business if the transactions contemplated hereby are not consummated, (ii) jeopardize any attorney-client privilege or other
legal privilege or (iii) contravene any applicable Legal Requirement, fiduciary duty or binding agreement entered into prior to the Signing Date. 

7.2   Access to Information After the Closing Date  

Each
party agrees that it will cooperate with and make available (including the right to make, at the requesting party's expense, photocopies) to the other party, during normal business hours, all
books and records and information (without substantial disruption of their respective businesses) retained and remaining in existence after the Closing Date relating to the Companies, the Purchased
Assets, the Assumed Liabilities or the conduct of the Business prior to the Closing 

41

 

Date.
Such cooperation and information will include providing copies of, among other things, relevant Tax Returns or portions thereof, together with accompanying schedules and related work papers and
documents relating to rulings or other determinations by Tax authorities. Each party will make its employees available on a mutually convenient basis to provide explanations of any documents or
information provided hereunder. Each party will retain all books and records relating to the Business and each Company for a period ending after the Closing Date until the earlier of (i) the
applicable period specified in such party's document retention policy or Tax law, or (ii) ten (10) years following the Closing Date;  provided, however, that if either party decides to destroy any such books and records prior to the tenth
(10th) anniversary of the Closing Date, such party will notify the other at least ninety (90) calendar days in advance of destroying any such books and records in order to provide the other
party the opportunity, at such party's cost and expense, to access (in accordance with this Section 7.2) and remove and retain all or any part of such books and records as such party may
select. Any information obtained hereunder will be kept confidential, 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. The party requesting any such information will bear all reasonable out-of-pocket costs and expenses (including but not limited to reasonable attorneys'
fees, but excluding reimbursement for salaries and employee benefits) incurred in connection with providing such information. 

7.3   Investigation  

	(a)
	The
Buyer acknowledges and agrees that it has made its own inquiry and investigation and has formed an independent judgment concerning the Companies, the Purchased Assets, the Assumed
Liabilities and the Business.

	(b)
	In
connection with the Buyer's investigation of the Companies, the Purchased Assets, the Assumed Liabilities and the Business, the Buyer has received from the Seller certain
projections, forecasts and other planning and budget information for the Business. The Buyer acknowledges that there are uncertainties inherent in attempting to make such projections, forecasts, plans
and budgets, that the Buyer is familiar with such uncertainties, that the Buyer 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 the Buyer will not assert any claim against the Seller and/or any entity which is part of the Business and/or any of their employees or
agents, respectively, or hold any such entities and/or Persons liable with respect thereto.

	(c)
	The
Buyer acknowledges and agrees that, except for the representations and warranties contained in this Agreement, the Seller does not make any other representations or give any other
warranties, express or implied. 

42

   7.4   Employee and Related Matters  

	(a)
	The
transfer of employment of all Business Employees who are covered by the Directive shall be governed by the Directive. To the extent that the employment relationship of a Business
Employee does not transfer by operation of applicable Legal Requirements, including the Directive as of the Closing Date, the Buyer will, or will cause a Buyer Designated Affiliate to, offer each of
the Business Employees an employment position (or, in the case of the Companies, continued employment) that is suitable and appropriate for such employee's level of qualification and substantially
equivalent to their current employment role and purpose. Each such Business Employee who accepts such offer of employment (or continued employment) and commences or continues such employment, and all
Business Employees whose employment transfers automatically to the Buyer or a Buyer Designated Affiliate, is referred to in this Agreement as a "Transferred
Employee". The Transferred Employees are intended to be transferred with the Business. For any Transferred Employee, the date such employment shall be transferred (the
"Employment Transfer Date") shall be 12:01 a.m. on: the day immediately following the Closing Date. In the event that the Companies have any
employees who are not Business Employees (i.e., employee seconded to an Affiliate), the Seller and the Companies shall take all commercially reasonable steps necessary for such employees to be
transferred to the Seller or its Subsidiaries (other than the Companies) on or prior to the Closing Date, and on and after the Closing Date, the Seller and its Subsidiaries shall hold the Buyer and
its Affiliates (including the Companies) harmless from all future Liabilities and responsibilities with respect to such employees.

	(b)
	As
of the Closing Date, the only Business Employee Plans which shall be sponsored or maintained by the Buyer or its Affiliates (including the Companies) shall be the Transferred
Plans, as determined in accordance with the general principles set forth in Schedule 7.4. At the Employment Transfer Date, each Transferred
Employee will cease to be an active participant under any Novartis Plans, except as may be provided pursuant to an applicable Benefits Transition Agreement and except for the Transferred Plans. Each
Transferred Employee will receive credit for services with the Seller, the Selling Subsidiaries and the Companies and their Affiliates and predecessors under the Buyer's employee benefit plans in
which each such Transferred Employee participates for purposes of eligibility and vesting (but not for purposes of benefit accrual, except to the extent required by applicable Legal Requirements or
the principles set forth in Schedule 7.4) to the same or similar extent as such Transferred Employee was entitled immediately prior to the
Closing to credit for such service under the corresponding plans of the Seller, the Selling Subsidiaries and the Companies and their Affiliates and predecessors;  provided, however, that in no event will such credit result in the duplication of benefits or the
funding thereof.

	(c)
	For
a period of not less than two (2) years from the Closing Date, the Buyer will, or will cause the Buyer Designated Affiliates to, provide to each Transferred Employee,
starting on his or her Employment Transfer Date, salary or wages, opportunities for commission, bonuses, incentive compensation and employee benefits (including pension benefits) that are of
economically similar value, in the aggregate, to those paid or provided to such Transferred Employee immediately prior to the Closing, but disregarding any special bonus or incentive payments made to
any Transferred Employees in connection with the transactions contemplated by this Agreement. The provision of any such employee benefits (including pension benefits) shall be, at the option of the
Buyer, through arrangements operated by the Companies, the Transferred Plans or other arrangements maintained or adopted by the Buyer or the Buyer Designated Affiliates. The transfer to, or retention
by, the Companies, the Buyer or any of its Subsidiaries of any Transferred Plan, and any related transfer of assets and liabilities, shall be subject to and in accordance with the general principles
set forth in 

43

 

 Schedule 7.4 and shall conform with Legal Requirements, including the Directive, as applicable. Nothing in this Agreement shall be construed as requiring the Buyer or
the Buyer Designated Affiliates to make an offer of employment on any basis other than an employment-at-will basis where applicable, or to continue to employ any Transferred
Employee for any particular period after the Closing Date, except as may be provided in the employment agreements listed in Schedule 7.4(c). 

	(d)
	The
Buyer or a Buyer Designated Affiliate will perform and discharge for its own account all salaries and wages, and all contributions due under the Transferred Plans or any Plans
which it or they extend to the Transferred Employees, in either case accruing for services by a Transferred Employee on and after the Closing Date (or if later the Employment Transfer Date for such
Transferred Employee). On and after the Closing Date, the Seller and its Subsidiaries shall hold the Buyer and its Affiliates (including the Companies) harmless from all past, present or future
Liabilities and responsibilities with respect to all Business Employee Plans, except for the Transferred Plans and except as may otherwise be provided in an applicable Benefits Transition Agreement.

	(e)
	Effective
as of the Closing Date, the Seller and its Subsidiaries shall amend any Business Employee Plan which is not a Transferred Plan and which provides pension, retirement,
retirement savings or similar benefits, to the extent necessary to fully vest the Transferred Employees in such benefits.

	(f)
	If,
in any jurisdiction, there are no applicable local Legal Requirements which will operate to transfer the employment of a Business Employee automatically to the Buyer or a Buyer
Affiliate on Closing (including the Directive), and express consent to the transfer of the employment of a Business Employee to the Buyer or a Buyer Designated Affiliate is required of any Business
Employees, the Seller shall seek to obtain such consent after the signing of this Agreement and prior to the Closing Date. Where such consent is obtained, the Seller or the applicable Asset Selling
Subsidiary shall release such Transferred Employees from their employment with the Seller or the Asset Selling Subsidiary, as applicable, as of the Closing Date and the Buyer will, or will cause a
Buyer Designated Affiliate to, offer each such Business Employee an employment position that is suitable and appropriate for such employee's level of qualification and substantially equivalent to
their current employment role and purpose.

	(g)
	In
the event that a Business Employee to whom the first sentence of paragraph (f) above applies does not consent to the transfer of his or her employment to the Buyer or a
Buyer Designated Affiliate, the Seller shall (i) retain such Business Employee in the Seller's employ or in the employ of an Affiliate of the Seller, (ii) be responsible for all costs
resulting from such continued employment and (iii) indemnify and hold harmless the Buyer in respect of the same. (h) In the case of automatic transfers of Business Employees covered by
the Directive, the Seller shall grant the Transferred Employees such time period, if any, as may be provided under the Directive (such time period to start as provided under the Directive) to decline
the transfer of their employment to the Buyer or the applicable Buyer Designated Affiliate. If any Business Employee declines to be transferred to the Buyer or the relevant Buyer Designated Affiliate,
the legal consequences shall be those provided for under the Directive. (i) The Seller and its Subsidiaries shall use commercially reasonable efforts to conduct themselves with respect to the
Transferred Employees in any respect so as to avoid any labour dispute, dispute with works councils, unions and the like. The Seller and the Asset Selling Subsidiaries and the Buyer and the Buyer
Designated Affiliates shall, where required by the Directive or other applicable Legal Requirements, or in accordance with the provisions of any collective bargaining agreement, inform and consult
with employees, trade unions, works councils or other employee representatives regarding the contemplated transfers and fulfill any obligations 

44

 

to
notify and/or obtain any consent from any relevant Governmental Authority or other person in respect of the contemplated transfers of the Transferred Employees. 

	(j)
	Prior
to the Closing Date, the Seller shall deliver to the Buyer a schedule that lists for each Business Employee with an annual base salary in excess of $250,000, including each
employee on leave of absence: (i) name; (ii) employer; (iii) years of service; (iv) job title; and (v) current base salary or hourly wage, except where the
furnishing of such information would result in a violation of applicable Legal Requirements, in which case such information shall be furnished to the Buyer when authorized under applicable Legal
Requirements and the Seller shall use commercially reasonable efforts to provide the Buyer with any other information reasonably necessary to effectuate the orderly transition of the Transferred
Employees from the Seller to the Buyer.

	(k)
	The
provisions of this Section 7.4 shall, where applicable, be subject to completion of the mandatory employee and works council consultation procedures in accordance with
applicable Legal Requirements.

	(l)
	The
Buyer and the Seller agree to cooperate fully and to use all commercially reasonable efforts to permit the Buyer to establish by the Closing all Plans necessary for it to provide
the level of benefits from and after the Closing required by this Section 7.4. If in any jurisdiction the Buyer, notwithstanding using all commercially reasonable efforts, is unable to
establish one or more Plans, the Seller shall make available transitional benefit coverage for a period of time not in excess of 6 months after the date that the information with respect to the
Business Employee Plans is made available to the Buyer in accordance with Section 4.12(b) pursuant to an agreement on terms similar to the Transition Services Agreement (a
"Benefits Transition Agreement"), it being understood and agreed that the Buyer shall reimburse the Seller for one hundred percent (100%) of customary
cost for services and benefits (including costs and expenses of obtaining actuarial calculations and funding for past services, if applicable) provided pursuant to the Benefits Transition Agreement
from the Closing until the date that is six (6) months following the Signing Date (if the Closing has occurred prior to such six (6) month anniversary) and thereafter at one hundred
fifteen percent (115%) of such cost. 

7.5   Insurance  

Effective
as of 23:59 CET on the Closing Date, the Companies, the Purchased Assets and, except as provided under Section 7.4, the Transferred Employees will cease to be insured by the insurance
policies, binders of insurance, programs of self-insurance or similar arrangement maintained by the Seller and its Affiliates (the "Seller
Insurance"). From and after the Closing, the Buyer undertakes to obtain and maintain effective insurance policies or binders of insurance, programs of
self-insurance or similar arrangements with respect to the Companies, the Purchased Assets and the Transferred Employees. With respect to the Seller Insurance coverage written on an
"occurrence basis", the Seller will have no liability for occurrences which take place on or after 23:59 CET on the Closing Date. With respect to the
Seller Insurance coverage written on a "claims made basis", the Seller will have no liability for claims made after 23:59 CET on the Closing Date. 

7.6   Further Action  

	(a)
	Each
of the parties to this Agreement will execute and deliver such documents and other papers, and, subject to Section 7.7, shall take such further actions and do or cause to
be done all things necessary, proper or advisable under applicable Legal Requirements, as may be reasonably required to carry out the provisions hereof and to give effect to the transactions
contemplated hereby and by the Ancillary Agreements. 

45

 

	(b)
	The
Seller and the Buyer will, and the Seller will cause the Companies and the Selling Subsidiaries to, undertake to cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns and any audit, litigation or other proceedings in order to safeguard their interests vis-à-vis Third
Parties.

	(c)
	During
the period between the Signing Date and the Closing Date, the Seller and the Buyer, subject to Section 7.7, will use all commercially reasonable efforts to take, or to
cause to be taken, all appropriate action, to do or cause to be done all things necessary, proper or advisable under applicable Legal Requirements, and to execute and deliver such documents and other
papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement, including to cause the Companies and the
Asset Selling Subsidiaries, as applicable, to obtain all requisite consents of or waivers from Third Parties with respect to the agreements listed in  Schedule 4.8(b).

	(d)
	There
shall be excluded from the transactions contemplated to occur at Closing by this Agreement, the assignment or transfer of any agreement, lease, license, permit or right which is
not assignable or transferable without the consent of any Person other than the Seller, the Asset Selling Subsidiaries or their Affiliates, to the extent that any such consent shall not have been
given or obtained prior to the Closing, provided, however, that each of the Seller or the Asset Selling
Subsidiaries shall have the continuing obligation after the Closing to use commercially reasonable efforts to endeavor to obtain all necessary consents to the assignment or transfer thereof (provided
that the Seller and the Asset Selling Subsidiaries shall not be required to commence any litigation or offer or grant any financial accommodation to any Third Party), and upon obtaining the requisite
Third Party consent thereto, the underlying agreement, lease, license, permit or right, if otherwise includable in the Purchased Assets or the transactions contemplated hereby, shall be transferred
and assigned to the Buyer or the Buyer Designated Affiliate hereunder. To the extent that the sale of the Shares of any Company causes a breach of any agreement, lease, license, permit or right or
gives any Person other than the Companies the ability to terminate any such agreement, lease, license, permit or right, the Seller shall use reasonable commercial efforts to obtain the consent of any
Third Parties required to prevent such breach or termination.

	(e)
	In
the event that any waiver, consent or approval required to be obtained, cannot for any reason be given or obtained on or prior to the Closing Date in order to permit the valid
transfer of all right, title and interest of the Seller or any Asset Selling Subsidiary in any agreement, lease, license, permit or right which is not assignable or transferable without the consent or
waiver of a third Person, then the Buyer shall or shall cause the Buyer Designated Affiliate to perform the obligations under such agreements, leases, licenses, permits or rights and the Seller or the
applicable Asset Selling Subsidiary shall enter into or be deemed to have entered into such leases, licenses, distribution agreements, subleases, sublicenses or other interim arrangements, and shall
cooperate with the Buyer as may be necessary to provide the Buyer with the benefit of the use of the applicable Purchased Asset on substantially the same economic terms until such time as the waiver,
consent or approval is obtained. The foregoing shall require the Seller to enter into such arrangements as shall be reasonably requested by the Buyer in order to allow the Buyer or a Buyer Designated
Affiliate to sell the products permitted to be sold under the Sustagen Trademark Agreement from and after the Closing Date.

	(f)
	In
the event any contract, license, agreement or commitment is held by the Seller or any Asset Selling Subsidiary and does not relate exclusively to the Business, the Seller shall use
reasonable best efforts to provide the benefits of such contract, license, agreement or commitment to the Buyer until such time as the Buyer can obtain a separate agreement that 

46

 

provides
substantially the same benefits. In the event any contract, license, agreement or commitment that does not relate exclusively to the Business is assigned by the Seller or any of its
Affiliates to the Buyer, the Buyer shall use reasonable best efforts to provide the benefits of such contract, license agreement or commitment to the Seller until such time as the Seller can obtain a
separate agreement that provides substantially the same benefits. 

7.7   Regulatory and Other Authorizations  

	(a)
	The
Seller and the Buyer will (i) use their reasonable best efforts to obtain (or cause the Selling Subsidiaries or Companies to obtain) as promptly as practicable all
authorizations, consents, orders, actions and approvals, and to make all filings with and to give all notices to all Governmental Authorities required to consummate the transactions contemplated by
this Agreement, (ii) cooperate fully with the other party hereto in promptly seeking to obtain all such authorizations, consents, orders, actions and approvals and to make all such filings and
give such notices and (iii) provide such other information to any Governmental Authority as such Governmental Authority may reasonably request in connection therewith. Each party hereto agrees
to make promptly (but in no event later than ten (10) Business Days after the Signing Date) its filing pursuant to the HSR Act and to supply as promptly as practicable to the appropriate
Governmental Authorities any information and documentary material that may be reasonably requested pursuant to the HSR Act. The Buyer hereto agrees to make as promptly as practicable its filing
required to be made with the European Commission with respect to the transactions contemplated by this Agreement and to supply as promptly as practicable to the European Commission any additional
information and documentary material that may be reasonably requested. Each party hereto agrees to make promptly its filing, if applicable, under the Investment Canada Act and the Competition Act and
to supply as promptly as practicable to the appropriate Governmental Authorities any information and documentary material that may be reasonably requested pursuant to the Investment Canada Act or the
Competition Act. The Buyer will pay all fees or make other payments to any Governmental Authority in order to obtain any such authorizations, consents, orders or approvals.

	(b)
	In
addition, provided that the Buyer shall not be required to take any action that would have a material adverse effect on the Business and the Buyer's Clinical Nutrition Business as
currently conducted, taken as a whole, the Buyer agrees to use its best efforts to avoid or eliminate each and every impediment under any antitrust, competition or trade regulation Legal Requirement
that may be asserted by any antitrust or competition Governmental Authority or any other party so as to enable the parties hereto to close the transactions contemplated by this Agreement as promptly
as practicable, including negotiating, committing to and effecting as promptly as practicable by consent decree, hold separate orders, or otherwise, the sale, divestiture or disposition of such of the
Buyer's Clinical Nutrition Business assets, properties or businesses (or assets, properties or rights of the Buyer and its Affiliates used in the Buyer's Clinical Nutrition Business) or of the Assets,
properties or businesses to be acquired by it pursuant hereto, and the entrance into such other arrangements, as are necessary in order to avoid the entry of, and the commencement of litigation
seeking the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order in any suit or proceeding, which would otherwise have the effect of materially
delaying or preventing the consummation of the transactions contemplated by this Agreement. In addition, provided that the Buyer shall not be required to take any action that would have a material
adverse effect on the Business and the Buyer's Clinical Nutrition Business as currently conducted, taken as a whole, the Buyer shall use its best efforts to defend through litigation on the merits any
claim asserted in court by any party in order to avoid entry of, or 

47

 

to
have vacated or terminated, any decree, order or judgment (whether temporary, preliminary or permanent) that would prevent the Closing prior to 31 December 2007. 

	(c)
	The
Seller and the Buyer will each promptly notify the other party of any communication that it or any of its Affiliates receives from any Governmental Authority relating to the
matters that are the subject of this Agreement and permit, when practicable, the other party to review in advance any proposed communication by such party to any Governmental Authority. Neither the
Seller nor the Buyer will agree to participate in any meeting with any Governmental Authority in respect of any filings, investigation (including any settlement of the investigation), litigation, or
other inquiry unless it consults with the other party in advance and, to the extent permitted by such Governmental Authority, gives the other party the opportunity to attend and participate at such
meeting. The parties to this Agreement will coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other party may reasonably request in
connection with the foregoing (i.e., in particular, in relation to all necessary merger control proceedings worldwide) and in seeking early termination of any applicable waiting periods, including
under the HSR Act. The Seller and the Buyer will provide each other with copies of all correspondence, filings or communications between them or any of their representatives, on the one hand, and any
Governmental Authority or members of its staff, on the other hand, with respect to this Agreement and the transactions contemplated by this Agreement; provided, however, that materials may be redacted
(x) to remove references concerning the valuation of the Business or the Purchased Assets, (y) as necessary to comply with contractual arrangements, and (z) as necessary to
address reasonable privilege or confidentiality concerns; however, both parties shall assess on a case-by-case basis in good faith whether the redacted information may be
exchanged between outside competition counsel for the purpose of any merger control proceedings.

	(d)
	The
Buyer shall not enter into any transaction, or any agreement to effect any transaction (including any merger or acquisition) that might reasonably be expected to prevent, hinder
or delay the consummation of the transactions contemplated hereby or to make it more difficult, or to increase the time required, to: (i) obtain the expiration or termination of the waiting
period under the HSR Act, or any other applicable antitrust or competition law or regulation, applicable to the transactions contemplated by this Agreement, (ii) avoid the entry of, the
commencement of litigation seeking the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order that would materially delay or prevent the completion of
the transaction contemplated hereby, or (iii) obtain all authorizations, consents, orders and approvals of Governmental Authorities necessary for the consummation of the transactions
contemplated by this Agreement.

	(e)
	The
Buyer and the Seller will, or will cause their respective Affiliates to, (i) notify their respective employees in respect of whom notification is required under applicable
Legal Requirements or by contract of the transactions contemplated by this Agreement and the Ancillary Agreements, and (ii) to the extent required under applicable Legal Requirements, continue
to consult with the Works Councils or, if necessary, worker delegations or recognized unions with respect to the consummation of the transactions contemplated by this Agreement and the Ancillary
Agreements. 

48

 

7.8   Non-Competition  

	(a)
	Subject
to Section 7.8(b), for a period of two (2) years commencing on the Closing Date, neither the Seller nor any of its Affiliates will directly or indirectly engage
in the development, manufacture, marketing, distribution or sale of:

	(i)
	any
enteral nutrition product (which shall include both branded and unbranded products and also includes tube feed and sip feed products) and fortified food product that is or is
intended to be sold in the hospital, nursing home and home care channels in any country that is directly competitive with any Business Product (or successor products to any such Business Product)
marketed, distributed or sold in the hospital, nursing home and home care channels in any country;

	(ii)
	any
oral nutrition product (which shall include both branded and unbranded products and shall include all packaging types) marketed, distributed or sold in:

	(A)
	the
pharmacy channel in Australia, Brazil, Canada, Finland, France, Germany, Hong Kong, Japan, India, Italy, Mexico, Norway, Spain, Sweden, Taiwan, United Kingdom, Turkey, Portugal,
Greece, Malta, Cyprus, Poland, Russia, Ukraine and all countries in Eastern Europe, Singapore, Malaysia, Philippines, Thailand, Vietnam, China and the United States (including Puerto Rico);

	(B)
	the
retail channel (which for the purposes of this Section 7.8 shall include mass market, grocery, drugstore, health stores and specialty retail) in Australia, Canada, Mexico
and the United States (including Puerto Rico) Turkey, Portugal, Greece, Malta, Cyprus, Poland, Russia, Ukraine and all countries in Eastern Europe, Singapore, Malaysia, Philippines, Thailand, Vietnam,
China; and

	(C)
	the
hospital, nursing home and home care channels in any country that is directly competitive with any Business Product existing on the Closing Date (or successor products to any such
Business Product) marketed, distributed or sold by the Business; or

	(iii)
	any
medical device related to enteral nutrition that is or is intended to be sold in the hospital, nursing home and home care channels in any country, that is directly competitive
with any Business Product existing on the Closing Date (or successor products to any such Business Product) marketed, distributed or sold in the hospital, nursing home and home care channels in any
country (the activities set forth in Section 7.8(a)(i) through (iii) being, collectively, the "Restricted Activities").

	(b)
	The
prohibitions contained in Section 7.8(a) will not be construed to prohibit or restrict, subject to the terms and conditions of the Intellectual Property License Agreements,

	(i)
	the
rights of the Seller, Novartis OTC or any of their Affiliates (other than the Companies) in and to the names "Benefiber",
"Benefibra" or "Novafibra" and all research and development, manufacturing, marketing, promotion
(including marketing and promotion to healthcare professionals), distribution or sales by the Seller, Novartis OTC or any of their Affiliates (other than the Companies) of current or future
"Benefiber", "Benefibra" and "Novafibra" products in the
retail or pharmacy channel, including the use of partially hydrolised guar gum in the manufacturing of "Benefiber",
"Benefibra" and "Novafibra" products, except as in direct competition with existing Boost with Benefiber
products in such channel (including, without limitation, food, drug, mass and internet channels);

	(ii)
	the
rights of the Seller, Novartis OTC or any of their Affiliates (other than the Companies) to continue, extend or expand its existing concentrated vitamins and mineral 

49

 

supplements
research and development, manufacturing, marketing, promotion, distribution or selling activities in the hospital, nursing, home, home care, pharmacy and retail channels, including by
extending or expanding such existing activities to any products developed, manufactured, marketed, promoted, distributed or sold by the Seller or any of its Affiliates (other than the Companies); and 

	(iii)
	the
rights of the Seller, Gerber or any of their Affiliates (other than the Companies) to engage in the research and development, manufacturing, marketing, promotion, distribution
or sales of any products in connection with or related to their pediatric nutrition business in the retail and pharmacy channels. 

For
the avoidance of doubt, the prohibitions set forth in Section 7.8(a) apply only to the Seller and its Affiliates as of the Signing Date, and will have no effect on Third Parties. 

For
the purpose of this Section 7.8(b), "vitamins and mineral supplements" shall have the meaning given to those terms in the FDA Guidelines for
Vitamin and Mineral Food Supplements CAC7GL 55 -2005. 

	(c)
	The
restrictions set forth in Section 7.8(a) shall not apply to any Acquired Business that at the time of the acquisition is engaged in the Restricted Activities if the
consolidated annual turnover directly attributable to such Restricted Activities in the previous fiscal year constitutes less than ten percent (10%) of the consolidated annual turnover of such
Acquired Business during the same period (an "Incidental Business"). In the event that such annual turnover attributable to such Restricted Activities
constitutes more than an Incidental Business, the business activities of such Restricted Activities will nevertheless be excluded from the prohibitions set forth in Section 7.8(a);  provided that
the Seller or its Affiliates sell or otherwise dispose of such Restricted Activities within six (6) months after the consummation
of the transaction with such Acquired Business.

	(d)
	For
a period of one (1) year from the Closing Date, the Seller shall not, and shall cause its Affiliates not to, hire any Transferred Employee identified on  Schedule 4.11(c) or solicit for hire
any other Transferred Employee, provided, that this covenant
shall not apply to general advertisements for employment not targeted at the Transferred Employees, or to the hiring of persons who respond to such general advertisements or who contact the Seller or
any of its Affiliates at their initiative or the hiring or solicitation for hire any Transferred Employee that the Buyer or an Affiliate of the Buyer has previously terminated or as otherwise may be
agreed by the Seller and the Buyer.

	(e)
	In
addition to any other remedies that may be available to the Buyer at law or in equity, the Buyer shall be entitled to have all of the rights under this Section 7.8
specifically performed and shall have the right to obtain preliminary and permanent injunctive relief to secure the performance or to prevent a breach of this Section 7.8. 

7.9   Conduct of the Business  

	(a)
	Except
as may be necessary to comply with applicable Legal Requirements, as specifically contemplated by this Agreement or as disclosed in  Schedule 7.9, from the Signing Date until the Closing Date, the
Seller will, and will cause the Companies and the Selling Subsidiaries to:

	(i)
	use
commercially reasonable efforts to preserve the relationships with customers, suppliers, employees and others having business dealings with the Business and the Companies; and

	(ii)
	conduct
the activities of the Business in the ordinary and usual course of business. 

50

 

	(b)
	Except
as described in Schedule 7.9 or as otherwise contemplated by this Agreement or as may be necessary to comply with
applicable Legal Requirements, the Seller covenants and agrees that, between the Signing Date and the Closing Date, without the prior written consent of the Buyer, none of the Seller, the Selling
Subsidiaries (to the extent it relates exclusively to the Business) or the Companies will:

	(i)
	(A)
issue or sell any capital stock, notes, bonds or other securities of any Company (or any option, warrant or other right to acquire the same) or (B) redeem any of the
capital stock of any Company;

	(ii)
	except
as part of the Closing arrangements agreed with the Buyer to replace Intercompany Indebtedness with Third Party indebtedness, incur any indebtedness to Third Parties for
borrowed money in excess of $8,000,000 individually or $25,000,000 in the aggregate, provided, however,
that this clause (ii) will not apply to the Seller or the Selling Subsidiaries so long as the indebtedness incurred is not an Assumed Liability or is otherwise secured by any Asset (if the
security interest is not released as of the Closing Date);

	(iii)
	amend
or restate the certificate of incorporation or by-laws (or other similar organizational documents) of any Company;

	(iv)
	grant
or announce any increase in the salaries, bonuses or other benefits payable to any Business Employee, adopt any new Plans or amend or modify any existing Plans with respect to
the Business, in each case, other than as required by applicable Legal Requirements, pursuant to any plans, programs or agreements existing on the Signing Date or other ordinary increases consistent
with past practices not in excess of 3% in the aggregate;

	(v)
	change
any method of accounting or accounting practice or policy used by the Seller or any Selling Subsidiary (in either case, as it relates exclusively to the Business) or any
Company, other than such changes required by the applicable generally accepted accounting principles or unless required by law;

	(vi)
	fail
to exercise any rights of renewal with respect to any material Leased Real Property that by its terms would otherwise expire;

	(vii)
	settle
or compromise any material claims or debts relating exclusively to the Business;

	(viii)
	acquire,
dispose of, assign, lease or pledge (if the security interest is not released as of the Closing Date) any material Asset outside of the ordinary course of business and
consistent with past practice;

	(ix)
	enter
into, amend any material term of, or waive any material right under, any Material Contract or Real Property Lease other than in the ordinary course and other than any customer
contracts;

	(x)
	organize
any Subsidiary or acquire the capital stock of any Person or any equity or ownership interest in any Person, or form a joint venture with a Third Party;

	(xi)
	make
any material Tax election or settle or compromise any material federal, state or local Tax Liability, in each case to the extent related exclusively to the Business;

	(xii)
	since
30 September 2006 with respect to the Companies, incur any financial indebtedness, whether accrued, contingent or otherwise, that would not have to be reflected in the
Final Closing Statements; and 

51

 

	(xiii)
	agree
to take any of the actions specified in Sections 7.9(b)(i)-(xii), except as contemplated by this Agreement and the Ancillary Agreements. 

7.10 Termination of Intra-Group Agreements  

Except
with respect to (a) the Transition Services Agreement, (b) the agreements in respect of services to be provided by or arrangements between any Company to the Seller and its
Affiliates (other than the Companies) as listed in Schedule 7.10(b) and (c) the agreements listed in  Schedule 7.10(c), the Seller will, and
will cause the Companies to, terminate, effective as of the Closing Date, all agreements between the
Seller or any of its Affiliates (other than the Companies), on the one hand, and any Company, on the other hand. 

7.11 Notifications  

Until
the Closing, each party hereto will promptly notify the other party in writing of any fact, change, condition, circumstance or occurrence or nonoccurrence of any event of which it is aware that
will or is reasonably likely to result in any of the conditions set forth in Article 8 of this Agreement becoming incapable of being satisfied;  provided, however, that the delivery of any notice pursuant to this Section 7.11 will not limit
or otherwise affect the remedies available hereunder to the party receiving such notice. In addition, the Seller shall, five (5) Business Days prior to the Closing Date, deliver to the Buyer
modifications, changes or updates to the Schedules in order to disclose or take into account facts, matters or circumstances which arise or occur between the date of this Agreement and the Closing
Date. No updated information provided to the Buyer in accordance with this Section 7.11 shall be deemed to cure any breach of representation, warranty or covenant made in this Agreement, except
for breaches resulting from changes in the Schedules affecting the representation and warranties arising out of the ordinary course of Business or as required, permitted or
contemplated by this Agreement, in which case such breach will be deemed to be cured and will not be indemnifiable under Section 6.1.  

7.12 Bulk Transfer Laws  

The
Buyer hereby waives compliance by the Seller with any applicable bulk sale or any so-called "bulk transfer law" of any jurisdiction in
connection with the sale of the Purchased Assets to the Buyer. 

7.13 Conveyance Taxes; Proration of Taxes and Certain Charges  

	(a)
	The
Buyer shall be liable for, shall hold the Seller, the Selling Subsidiaries, the Companies and their Affiliates harmless against, and agrees to pay any and all sales, use, value
added, transfer, stamp, stock transfer, real property transfer or gains and similar Taxes that may be imposed upon, or payable or collectible or incurred in connection with, this Agreement and the
transactions contemplated hereby. The Buyer and the Seller agree to cooperate in the execution and delivery of all instruments and certificates necessary to enable the Buyer or the Seller to comply
with any pre-Closing filing requirements. Notwithstanding anything to the contrary contained herein, this Section 7.13(a) is not intended to apply to any income Taxes payable by the
Seller as a result of the transactions contemplated by this Agreement or to any Taxes payable in connection with the Spin-Offs. (b) Except as provided in Section 7.13(a), all
real property Taxes, personal property Taxes or similar ad valorem obligations levied with respect to the Purchased Assets for any Straddle Period, whether imposed or assessed before or after the date
of the Closing, shall be prorated between the Seller and the Buyer as of 11:59 p.m. on the date of the Closing. If any Taxes subject to proration are paid by the Buyer, on the one hand, or the
Seller, on the other hand, the proportionate amount of such Taxes paid (or in the event a refund of any portion of such Taxes previously paid is received, such 

52

 

refund)
shall be paid promptly by (or to) the other after the payment of such Taxes (or promptly following the receipt of any such refund). 

	(c)
	The
prorations pursuant to this Section 7.13 may be calculated after the date of the Closing, as each item to be prorated (including any such Tax, obligation, assessment,
charge, refund, reimbursement, rent installment, fee or revenue) accrues or comes due, provided that, in any event, any such proration shall be calculated not later than 30 days after the party
requesting proration of any item obtains the information required to calculate such proration of such item. 

7.14 Real Estate Matters  

As
soon as practical after the Signing Date, the Seller and the Buyer will cooperate in obtaining, for the Owned Real Property located in the United States, a title commitment for each parcel of Owned
Real Property (the "Title Commitments") issued by a title company of recognized international or domestic standing, providing a commitment to insure the
applicable Owned Real Property for such amount as shall be reasonably requested by the Buyer. The Title Commitments shall identify the Buyer or a Buyer Designated Affiliate (which may be a Company) as
the proposed insured party, and shall be accompanied by copies of all documents referred to in the Title Commitment (which shall include for the United States an ALTA/ACSM land title survey dated
within six (6) months of the Closing Date that contains the following Table A items from the standards for such surveys: 1, 2, 3, 4, 7(a), 7(b)(1), 7(b)(2), 7(c), 8, 9, 10, 11(a) 16 and 18),
and in the case of the Owned Real Property located in the United States, will be in the Form of an ALTA Owner's Policy, 1970 Form B (or in such other customary form in any other jurisdiction
where any Owned Real Property is located). The Title Commitment shall be subject only to the standard exclusions from coverage and the Permitted Exceptions. The Title Commitments shall include
commitments to issue the following endorsements: owner's comprehensive; zoning 3.1 with parking coverage; survey; access to a named street; and tax parcel. The cost of the issuance of any title
insurance policy shall be for the account of the Buyer. 

7.15 Litigation Support  

For
a period of twenty-four (24) months following the Closing Date, the Buyer and the Seller shall, and shall cause their respective Affiliates to, reasonably cooperate with each
other in the defense or settlement of all Liabilities (including Product Claims) or lawsuits involving the Business for which they have responsibility under this Agreement by providing the other party
and such party's legal counsel and other designated Persons reasonable assets to their respective books and records and other information related to the Business as such other party may reasonably
request, to the extent the same are maintained or under control of the requested party. The requesting party shall reimburse the other party for all reasonable out-of-pocket
expenses paid to Third Parties in performing its obligations under this Section 7.15. 

7.16 Trade Notifications  

The
Buyer and the Seller shall jointly determine the method and content of the notifications to customers of the transfer of the Business to the Buyer and the Buyer Designated Affiliates. The Buyer
and the Seller agree that said notifications are to provide sufficient advance notification of the sale and the plans associated therewith, with the objective of minimizing any distribution of the
Business. 

53

 

7.17 Interim Financial Statements  

The
Seller shall provide the Buyer, as soon as the same are available in final form after the end of each calendar month prior to the Closing Date, monthly statements of results for the Business
prepared by the Seller in customary form. 

7.18 Tax Election  

	(a)
	Tax Balance Sheet. Following the Closing Date, the Seller and the Buyer shall reasonably cooperate to calculate (i) the tax
basis in the assets and liabilities of Nutrition Corporation and (ii) the tax basis in the stock of Nutrition Corporation. The Buyer and the Seller shall mutually select an independent
accounting firm for purposes of determining these calculations (which shall be at the Buyer's expense). Subject to the Seller's consent, and to the extent permitted by applicable Legal Requirements,
the independent accounting firm so selected shall commence its work prior to the Closing.

	(b)
	Section 338(h)(10) Election. At the election of the Buyer, which shall be furnished to the Seller in writing no later than one
hundred and twenty (120) days after the Closing Date, each of the Seller and the Buyer shall cause an authorized person to make a valid and timely joint election under Section 338(h)(10)
of the Code and a similar election under any applicable state or local income tax law for Nutrition Corporation (the "Section 338(h)(10)
Election"). Thereafter, the Seller and the Buyer shall cooperate in the preparation and execution of Internal Revenue Service Form 8023 and any similar forms under
applicable state or local tax law (the "Forms"). The Buyer shall timely file the Forms with the relevant taxing authorities. The Buyer shall duly and
timely file the Forms as prescribed by Treasury Regulation §1.338(h)(10)-1 or the corresponding provisions of applicable state, local or foreign income tax Law, and deliver
evidence of such filings to the Seller. The Buyer shall and the Seller shall cause U.S. Parent to timely file Internal Revenue Service Form 8883. If a Section 338(h)(10) Election is
made, the Seller and the Buyer shall agree upon an allocation of the "adjusted deemed sale price" among the assets of Nutrition Corporation in
accordance with Section 338 of the Code and the Treasury Regulations promulgated thereunder in a manner consistent with Section 2.3(g). The term "adjusted deemed
sale price" shall be based on the portion of Purchase Price allocated to the Shares of Nutrition Corporation and shall otherwise be determined in accordance with
Section 338 of the Code and the Treasury Regulations promulgated thereunder. The Buyer and the Seller and their respective Affiliates shall file Tax Returns (including Internal Revenue Service
Form 8883 or any successor form) consistent with this allocation. To the extent that interest accrues or an Adjustment Amount occurs, the Parties shall promptly make appropriate adjustments to
such allocations.

	(c)
	Payment of Taxes. In the event that the Buyer exercises its election to cause the Seller to make a Section 338(h)(10) Election,
the Buyer agrees to indemnify and hold the Seller harmless for the excess of the Taxes for which the Seller is liable solely as a result of the Section 338(h)(10) Election over the Taxes that
the Seller would have incurred if the Section 338(h)(10) Election had not been made (including, without limitation, any Taxes arising as a result of an audit by the Internal Revenue Service or
another taxing authority). Initial payment under this Section 7.18(c) shall be made, for estimated income Tax purposes, within three (3) Business Days prior to the relevant estimated
payment dates. In connection with later claims for indemnity under this Section 7.18, the Seller agrees to provide a detailed explanation for the amount of Taxes owed when making such further
claim. Notwithstanding anything to the contrary in this Agreement, the obligation of the Buyer to indemnify the Seller under this Section 7.18 will not be subject to the limitations and
conditions of Section 6 hereof, and shall survive until ninety (90) days after the expiration of the statute of limitations with respect to such Taxes. 

54

 

8.     CONDITIONS PRECEDENT; WAIVER; TERMINATION  

	8.1
	Conditions Precedent to Performance of the Parties The obligations of the parties to consummate the transactions contemplated by this
Agreement are subject to fulfillment or waiver, at or prior to the Closing, of each of the following conditions:

	(a)
	Regulatory Requirements: (i) Any waiting period (and any extension thereof) under the HSR Act applicable to the transactions
contemplated hereby will have expired and any investigations relating to the sale hereunder that may have been opened by either the Department of Justice or the Federal Trade Commission by means of a
request for additional information have been terminated, (ii) if the European Commission has jurisdiction to examine the transactions contemplated by this Agreement, a decision will have been
adopted by the European Commission pursuant to Council Regulation (EC) 139/2004, as amended, declaring that such transactions are compatible with the common market (either unconditionally or subject
to the fulfillment of certain conditions or obligations) or compatibility will have been deemed under Article 10(6) of the European Commission Merger Regulation,  provided that if a referral is made
by the European Commission to one or more member states of the European Community pursuant to Art. 9 of Council
Regulation (EC) 139/2004, as amended, then (A) the approval of such member state under the applicable national competition laws of such member state or (B) the expiration or termination
of any applicable waiting period without any injunction or restraining order having been made shall be required, (iii) if the transactions contemplated by this Agreement are notifiable pursuant
to Part IX of the Competition Act, (A) an advance ruling certificate shall have been issued in accordance with Section 102 of the Competition Act by the Commissioner of
Competition (the "Commissioner") appointed under the Competition Act or (B) the Buyer shall have been advised in writing by the Commissioner that
the Commissioner is of the view, at that time, that, in effect, grounds do not exist to initiate proceedings before the Competition Tribunal under the merger provisions of the Competition Act in
respect of the transactions contemplated by this Agreement and that any terms and conditions attached to any such advice shall be acceptable to the Seller acting reasonably (a
"no-action letter") and either the Commissioner shall have issued a waiver under Section 113(c) of the Competition Act of the
obligation to notify the Commissioner under Part IX of the Competition Act or the waiting period under Section 123 of the Competition Act shall have expired or been waived; and
(iv) any consents, authorizations, orders, approvals, declarations and filings required under any other applicable antitrust or competition law or regulation and identified in  Schedule 8.1,
will have been made or obtained.

	(b)
	No Order: No Governmental Authority will have enacted, issued, enforced or entered into any statute, rule, regulation, injunction or
other order (whether temporary, preliminary or permanent) that 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; provided, however, that prior to asserting
non-satisfaction of this Section 8.1(b), the Buyer must have complied with its obligations under Sections 7.6 and 7.7. 

8.2   Conditions Precedent to Performance of the Seller  

        The obligations of the Seller to consummate the transactions contemplated by this Agreement will be subject to the fulfillment or written waiver, at or prior to
the Closing, of the following condition: 

	(a)
	Agreements and Covenants: The agreements and covenants contained in this Agreement to be complied with by the Buyer on or before the
Closing will have been complied with in all material respects. 

55

 

8.3   Conditions Precedent to Performance of the Buyer  

The
obligations of the Buyer to consummate the transactions contemplated by this Agreement will be subject to the fulfillment or written waiver, at or prior to the Closing, of the following
conditions: 

	(a)
	Agreements and Covenants: The agreements and covenants contained in this Agreement to be complied with by the Seller on or before the
Closing will have been complied with in all material respects; and

	(b)
	Material Adverse Effect. No Material Adverse Effect shall have occurred since the Signing Date through the earlier of (i) 31
August 2007 and (ii) the Closing Date, and no event or events shall have occurred prior to such date that could reasonably be expected to have a Material Adverse Effect;  provided, however, that the condition set forth in this Section 8.3(b) (but not the
representation in Section 4.14) shall be deemed to be satisfied and shall terminate on 31 August 2007 if the Closing shall not have occurred prior to such date. 

8.4   Waiver; Determination of Satisfaction of Conditions  

The
Buyer may waive all or any of the conditions set forth in Section 8.3, the Seller may waive all or any of the conditions set forth in Section 8.2, but neither the Buyer nor the
Seller may waive the conditions set forth in Section 8.1 without the prior written consent of the other party. 

8.5   Termination  

	(a)
	This
Agreement may be terminated at any time prior to the Closing:

	(i)
	by
either the Seller or the Buyer if the Closing has not occurred by 31 December 2007; provided,  however, that the right to terminate this Agreement
under this Section 8.5(a)(i) will not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or has resulted in, the failure of the Closing to occur by this date, including, in particular, the Buyer's failure to fulfill its
obligations under Section 7.7(b); or

	(ii)
	by
either the Seller or the Buyer in the event that any Governmental Authority has enacted, issued, enforced or entered into any statute, rule, regulation, injunction or other order,
restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement that will have become final and nonappealable; provided,  however, that the Buyer's right to terminate this Agreement under this Section 8.5(a)(ii) will not be available to the Buyer if the Buyer
has failed to fulfill any of its obligations under Section 7.7(b); or

	(iii)
	by
the mutual written consent of the Seller and the Buyer.

	(b)
	In
the event of termination of this Agreement under Section 8.5(a) by written notice to the other party, this Agreement will become void and there will be no liability on the
part of either party to this Agreement except (i) that Sections 8.5(b), 10.2, 10.4, 10.5, 10.9, 10.11 and 10.12 will survive any termination of this Agreement and (ii) that nothing in
this Agreement will relieve either party from liability for any prior breach of this Agreement. 

9.     CLOSING  

9.1   Closing Date  

The
Closing will take place at a time and place to be mutually agreed between the parties on the fifth (5th) Business Day, or a date otherwise mutually agreed between the parties, following the 

56

 

satisfaction
(or deemed satisfaction as contemplated by Section 8.3(b)) or waiver of all conditions precedent to the performance of the parties set forth in Sections 8.1, 8.2 and 8.3 (the
"Closing Date"). On the Closing Date, the parties will complete the exchange of documents and the payment of the Purchase Price as outlined in
Section 9.2 below (the "Closing"). 

9.2   Delivery  

	(a)
	At
the Closing, the Seller will deliver or cause to be delivered:

	(i)
	certificates
representing the Shares, duly endorsed in blank, or accompanied by stock powers duly executed in blank and with all required stock transfer tax stamps affixed;

	(ii)
	executed
counterparts of each Share Purchase Agreement, duly executed by each Share Selling Subsidiary;

	(iii)
	the
Assignment of Separate Intellectual Property, duly executed by the Seller and each of the Affiliates of Seller who are registered owners of the Separate Intellectual Property;

	(iv)
	the
Assignment of Product Registrations, duly executed by the Seller or such Affiliate of the Seller which is a registered holder of the Product Registrations;

	(v)
	separate
Bills of Sale, duly executed by each of the Asset Selling Subsidiaries;

	(vi)
	the
Intellectual Property License Agreements, duly executed by the Seller;

	(vii)
	the
Transition Services Agreement, duly executed by each entity providing Transitional Services on behalf of the Buyer and the Buyer Designated Affiliates;

	(viii)
	a
receipt for the Purchase Price and the payment of the Intercompany Indebtedness;

	(ix)
	resignation
letters of the directors of each Company listed in Schedule 9.2(a)(iv), effective as of the Closing Date;

	(x)
	a
certificate of a duly authorized officer of the Seller certifying as to the matters set forth in Section 8.3(a); and

	(xi)
	such
other instruments, in form and substance reasonably satisfactory to the Buyer, as may be reasonably requested by the Buyer to effect the transfer of the Purchased Assets to the
Buyer or evidence such transfer on the public records, in each case duly executed by the Seller or its Affiliates, as applicable, provided,  however, that
the Seller and its Affiliates will not be required to incur any costs or expenses or make any filings or take any other action to give
effect to such transfers.

	(b)
	Upon
the Seller's presentation of the documents in Section 9.2(a), the Buyer or a Buyer Designated Affiliate will:

	(i)
	countersign
and thereby execute each Share Purchase Agreement, the Assignment of Lease, the Assignment of Product Registrations, the Assignment of Separate Intellectual Property, the
Bills of Sale, the Transition Services Agreement, and the Intellectual Property License Agreements;

	(ii)
	deliver
a certificate of a duly authorized officer of the Buyer certifying as to the matters set forth in Section 8.2(a);

	(iii)
	deliver
the Purchase Price by electronic transfer of cash in immediately available funds to the Purchase Price Bank Account; and

	(iv)
	execute
and deliver such other instruments, in form and substance satisfactory to the Seller, as may be requested by the Seller to effect the assumption by the Buyer or a 

57

 

Buyer
Designated Affiliate of the Assumed Liabilities and to evidence such assumption in the public records. 

	(c)
	Upon
confirmation by the bank designated by the Seller that the funds in the amount of the Purchase Price and the Intercompany Indebtedness have been credited to the Seller's account,
the parties will exchange all documents enumerated above. 

9.3   Discharge of Previous Board Members  

The
Buyer undertakes to convene extraordinary shareholders' meetings or such similar meetings of each Company promptly after the Closing, and to cause the shareholders or such similar meetings of each
Company to approve the discharge of the previous members of the board of directors of such Companies. 

9.4   Use of NOVARTIS Trademark  

The
Buyer will, within twelve (12) months of the Closing, remove or obliterate the trademark NOVARTIS, together with all variations thereof and all trademarks, service marks, domain names,
trade names, trade dress, corporate names and other identifiers of source containing, incorporating or associated with any of the foregoing (the "Retained
Marks") from all of the existing stocks of signs, letterheads, advertisements and promotional materials, and other documents and materials transferred to the Buyer or cease
using such materials. The Buyer will ensure that nothing is done or omitted to be done by it or its Affiliates that would or might bring the NOVARTIS name or any of the Retained Marks into disrepute,
or prejudice or endanger any application or registration thereof, including defacing, altering or adding to the presentation of the NOVARTIS name or any of the Retained Marks or using them on or in
relation to materials other than those acquired by it pursuant to this Agreement. Except as expressly provided in this Agreement, no other right to use the NOVARTIS trademark or any of the Retained
Marks is granted by the Seller to the Buyer, whether by implication or otherwise. 

10.   MISCELLANEOUS  

10.1 Entire Agreement  

	(a)
	This
Agreement, together with the Schedules, Exhibits and all documents referred to herein, constitutes the entire agreement between the parties with respect to the subject matter of
this Agreement and supersedes any and all prior agreements, negotiations, correspondence, undertakings, understandings and communications of the parties with respect to the subject matter of this
Agreement, with the exception of the confidentiality agreement between the parties dated 27 June 2006 (the "Confidentiality Agreement"), to which
Section 10.9 applies.

	(b)
	This
Agreement constitutes an umbrella agreement for all of the Ancillary Agreements. In case of any conflict between the terms of this Agreement and the terms of any Ancillary
Agreement or other document delivered in accordance with this Agreement, the terms of this Agreement will govern. 

10.2 Transaction Costs  

Except
as otherwise provided herein, the parties to this Agreement will pay their own costs and expenses (including legal, accounting and other fees) relating to this Agreement. Any notary fees and/or
registration costs will be borne by the Buyer. 

58

 

10.3 Modifications  

This
Agreement, including this undertaking itself, may not be amended or modified except by a document in writing duly executed by the parties hereto. The parties agree that they jointly negotiated
and prepared this Agreement and the agreements contemplated hereby and that neither this Agreement nor any agreements contemplated hereby will be construed against any party on the grounds that such
party prepared or drafted the same. 

10.4 Notices  

Notices
hereunder will be in writing in the English language. Notices will be deemed to have been received (a) upon receipt of a registered letter, (b) the next Business Day following
proper deposit with an internationally recognized express overnight delivery service, or (c) upon confirmation of a facsimile transmission. Notices will be addressed as follows: 

	 	 	If to the Seller:	 	Novartis AG

Lichtstrasse 35

4056 Basel

Switzerland

Attention: General Counsel

Facsimile: +41 61 324 78 26
	

 	
 	

If to the Buyer:	
 	

Nestlé S.A.

Avenue Nestlé, 55

1800 Vevey

Switzerland

Attention: General Counsel

Facsimile: +41 21 924 4592
	

 	
 	

With a copy to:	
 	

Mayer, Brown, Rowe & Maw LLP

71 South Wacker Drive

Chicago, Illinois 60603

Attention: David A. Carpenter

Facsimile: (312) 701-7711

or
to such other address as may be hereafter communicated in writing by the Seller to the Buyer or vice versa in a notice given in accordance with this Section 10.4. 

10.5 Public Announcements  

Except
as required by Legal Requirements or by the requirements of any stock exchange on which the securities of a party hereto are listed, no party to this Agreement will 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 prior notification to the other
party, and the parties to this Agreement will cooperate as to the form, timing and contents of any such press release, public announcement or disclosure. 

10.6 Severability  

Each
provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement will be held to be unenforceable or
invalid under applicable law, such provision will be ineffective only to the extent of such unenforceability or invalidity, and the parties will negotiate in good faith to modify this Agreement so
that the unenforceable or invalid provision is replaced by such valid and enforceable provision 

59

 

which
the parties consider, in good faith, to match as closely as possible the invalid or unenforceable provision and to achieve the same or a similar economic effect and to give effect to the
parties' original intent. The remaining provisions of this Agreement will continue to be binding and in full force and effect. 

10.7 Assignment  

No
party hereto may assign, in whole or in part, or delegate all or any part of its rights, interests or obligations under this Agreement without the prior written consent of the other party. Any
assignment or delegation made without such consent will be void. 

Notwithstanding
the foregoing, the Buyer shall be entitled to designate any one of its Affiliates that is directly or indirectly wholly owned (each a "Buyer Designated
Affiliate") to be the purchaser or transferee of some or all of the Shares or the Purchased Assets (and to be a counterparty to one or more of the Ancillary Agreements),  provided that no such designation shall release the Buyer from its obligations under this Agreement. The Buyer shall be responsible for and shall pay or
reimburse the Selling Subsidiaries for any incremental Tax liabilities and other reasonable
out-of-pocket costs and expenses resulting solely from the substitution of a Buyer Designated Affiliate for the Buyer as the purchaser of Shares or Assets in accordance with
this Section 10.7. 

10.8 Schedules and Exhibits  

Each
Schedule and Exhibit referenced herein is hereby incorporated into this Agreement as if set forth in full herein. Schedules and Exhibits so incorporated need to be physically attached hereto.
Notwithstanding anything to the contrary contained in the Schedules or in this Agreement, the information and disclosures contained in any Schedule will be deemed to be disclosed and incorporated by
reference in any other Schedule as though fully set forth in such other Schedule. 

10.9 Confidentiality Agreement  

The
terms of the Confidentiality Agreement are hereby incorporated herein by reference and will continue in full force and effect until the Closing Date, at which time the Buyer's obligations to the
Seller under the Confidentiality Agreement will terminate, with the exception of Paragraph 6 of the Confidentiality Agreement. If, however, the transactions contemplated by this Agreement and
the Ancillary Agreements are not consummated, the Confidentiality Agreement will remain in full force and effect, in which case neither party will declassify said information. 

10.10 Translation of Currencies  

In
the event that the parties need to convert currencies under this Agreement, the relevant exchange rate will be determined based on the rate two (2) Business Days preceding the applicable
determination date as published in the Financial Times under the heading "Currencies and Interest Rates" of the "Dollar Spot
Forward Against the Dollar" tables, in the column "Closing mid-point". 

10.11 Governing Law  

This
Agreement will be governed by and construed in accordance with the laws (without regard for principles of conflict of laws) of Switzerland with the exclusion of the Vienna Convention on the
International Sale of Goods dated 11 April 1980. 

10.12 Specific Performance  

The
Buyer acknowledges and agrees that the Seller would be irreparably damaged if the provisions of Section 7.7(b) are not performed in accordance with their terms and that any breach of 

60

 

Section 7.7(b)
and the non-consummation of the transactions contemplated hereby by the Buyer could not be adequately compensated in all cases by monetary damages alone. Accordingly,
in addition to any other right or remedy to which the Seller may be entitled, at law or equity, it shall be entitled to enforce Section 7.7(b) and require the Buyer to consummate the Closing as
contemplated hereby in any court by a decree of specific performance. 

10.13 Dispute Resolution  

Any
party hereto will give the other party written notice of any and all disputes arising out of or in connection with the present Agreement. The parties will attempt to resolve all such disputes
promptly by negotiations between their respective executive officers who have authority to settle such disputes. If any such dispute has not been resolved by such negotiation within
forty-five (45) days after the receipt of written notice of such dispute, such dispute will be finally settled under the Rules of Arbitration of the International Chamber of
Commerce (Paris) by three (3) arbitrators appointed in accordance with such Rules, with the Buyer and the Seller each appointing one arbitrator, and the arbitrators so elected appointing the
president of the tribunal within thirty (30) days. The proceedings will be held in English. The place of arbitration will be Zurich, Switzerland. 

10.14 Counterparts; Facsimile Signature  

This
Agreement is executed in one (1) or more counterparts, by original or facsimile signature, each of which will be deemed an original, but all of which will constitute one and the same
instrument. 

10.15 Further Assurances  

Upon
the reasonable request of the Buyer, the Seller will, for a period of 18 months from the Closing Date, (i) execute and deliver, or cause to be executed and delivered, to the Buyer
or a Buyer Designated Affiliate, and will assist the Buyer in obtaining from any necessary Third Parties (including, without limitation, Mead Johnson & Company), such other documents, deeds,
releases, assignments and other instruments as may be necessary to complete the transfer and assignment to the Buyer or the Buyer Designated Affiliates of, and to vest in the Buyer or a Buyer
Designated Affiliate, title to, each of the Purchased Assets and the Shares, and to otherwise carry out the purposes of this Agreement; provided, that
the Seller's obligation with respect to the transfer of Intellectual Property pursuant to the foregoing provision will be for a period of three (3) years from the Closing Date;  provided,
further, that the Seller and its Affiliates will not be required to incur any costs and
expenses (other than notarization and legalization costs that will be reimbursed by the Buyer) or make any filings or take any other action to give effect to such transfers and (ii) assist the
Buyer, or a Buyer Designated Affiliate, in obtaining the transfer of Product Registrations, including procuring the cooperation of any necessary Third Parties. Upon the reasonable request of the
Seller, the Buyer will on or after the Closing Date, execute and deliver, or cause to be executed and delivered, to the Seller or its designee, such documents, deeds, releases, assignments and other
instruments as may be necessary to complete the transfer and assignment to the Seller or designee of, and to invest in the Seller or such designee, title to, each of the Excluded Assets or other
assets transferred by the Seller or an Asset Selling Subsidiary that are not Purchased Assets, and to otherwise carry out the purposes of this Agreement. 

10.16 Rights Cumulative  

All
rights and remedies of each of the parties under this Agreement will be cumulative, and the exercise of one or more rights or remedies will not preclude the exercise of any other right or remedy
available under this Agreement or applicable law. All claims arising under the Ancillary 

61

 

Agreements
(other than the Intellectual Property License Agreements and the Transition Services Agreement) may not be brought under such Ancillary Agreement and shall be resolved solely in accordance
with Section 10.13 of this Agreement, but only to the extent that such claims constitute valid claims under this Agreement. 

62

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

	 	 	NOVARTIS AG
	

 	
 	
By:	

/s/  RAYMUND BREU      
 Raymund Breu
 Authorized Signatory
	

 	
 	

By:	

/s/  JOERG WALTHER      
 Joerg Walther
 Authorized Signatory
	

 	
 	

NESTLÉ S.A.
	

 	
 	

By:	

/s/  JAMES M. SINGH      
 James M. Singh
 Senior Vice President

QuickLinks

Exhibit 4.6

EXECUTION COPY

TABLE OF CONTENTS

LIST OF SCHEDULES

LIST OF EXHIBITS

AGREEMENT<pre>

Exhibit 10.53

     Independent Contractor Agreement dated as of December 1, 2006 between
               the Registrant and Trimark Associates Inc.

                     INDEPENDENT CONTRACTOR AGREEMENT

This Agreement is entered into as of December 1, 2006 (the "Effective Date"), by
and between Trimark Associates Inc. ("Company") a California corporation, and
Conectisys Corp., a California corporation with principal business offices in 89
Valencia, CA 91355. ("Conectisys") (Collectively the "Parties").

1.      Term of Agreement. This Agreement will become effective on the date
stated above, and will continue in effect until the Services provided for in
this Agreement have been fully performed or until this Agreement is terminated
as provided below (the "Term").

2.      Services of Independent Contractor. Independent Contractor agrees to
provide, at its own expense, employees or subcontractors ("Consultants") to
perform the services described in individual Task Orders, which shall be
attached as Exhibits to this Agreement, as further defined by Company from time-
to-time during the Term of this Agreement (the "Services"). Independent
Contractor represents that it has Consultants with the qualifications and skills
necessary to perform the Services, and that all Services will be performed in a
competent, professional manner, in accordance with the standards of care, skill
and diligence observed by similar professionals performing such services.
Independent Contractor further agrees to assign Consultants that match the
requirements set by Company, and Independent Contractor will honor all
reasonable requests by Company to remove and replace any Consultant upon request
by the Company. Independent Contractor has discretion for the manner in which
the work under this Agreement will be performed, subject to Company's acceptance
of the work performed. Independent Contractor will determine the method,
details, and means of performing the Services, and will furnish all materials,
equipment and supervisory services necessary to perform the Services.
Independent Contractor represents and warrants that all Services will be
performed in accordance with all applicable laws. Independent Contractor will
work with Company to schedule Consultant's holidays and discretionary time off
at least four weeks in advance. If the Consultant becomes unavailable because of
death, ill health, or injury, Independent Contractor will replace the Consultant
within a reasonable time.

3.      Compensation and Reimbursement of Expenses. The Company shall pay
Independent Contractor for the Services performed pursuant to the terms set
forth in Task Orders to this Agreement. Company will reimburse Independent
Contractor for all Consultants' reasonable out-of-pocket expenses supported by
adequate documentation for costs of travel (airfare, cab fare, auto rental or
local mileage) and accommodations incurred as a result of, and in the course of,
performing Services for the Company ("Expenses"). Consultant shall request and
obtain prior written approval of the Company for any lodging Expense exceeding
$125 per night (rack rate, taxes excluded) and any air travel. Independent
Contractor shall invoice Company on a monthly basis and shall provide receipts
for any expenses above $25 for all Expenses to be reimbursed. Independent
Contractor agrees to submit such invoices and receipts within sixty (60) days
after the Services were performed and/or the Expenses were incurred. Independent
Contractor further agrees that the Company will not have any liability
whatsoever for any Services performed or Expenses incurred if Independent
Contractor fails to submit an invoice and/or receipt to the Company within the
sixty (60) day period. Company shall invoice the client for reimbursement of
such Expenses in its next monthly invoice. Company shall pay Independent
Contractor for such Expenses within ten (10) days after Company receives
reimbursement for such Expenses from the client.

4.      Relationship of the Parties. Independent Contractor is entering into
this Agreement as, and shall continue to be, an independent contractor. Under no
circumstances shall Independent Contractor or any Consultant become an employee,
partner, agent or principal of the Company while this Agreement is in effect.
Subject to the terms and conditions of Sections 7 and 11 of this Agreement,
Independent Contractor and each Consultant may represent, perform services for,
and contract with as many additional clients, persons or companies as
Independent Contractor sees fit. Independent Contractor understands and agrees
that Consultants are not entitled to the rights or benefits afforded to the
Company's employees, including disability or unemployment insurance, worker's
compensation, medical insurance, sick leave, or any other employment benefit.
Independent Contractor is responsible for providing, at its own expense,
disability, worker's compensation, unemployment and other insurance, as well as
all licenses and permits usual or necessary for Independent Contractor and its
Consultants to perform the Services. Independent Contractor shall provide
orientation to its Consultants explaining the relationship of the parties as
agreed to herein.

5.      Company's Cooperation. Company agrees to comply with all reasonable
requests for, and to provide access to, all documents and information reasonably
necessary to the performance of Independent Contractor's duties under this
Agreement.

6.      Independent Contractor's Tax Obligations. Independent Contractor is
responsible for paying when due all income taxes, including estimated taxes,
incurred as a result of the compensation paid by Company to Independent
Contractor. On request, Independent Contractor will provide the Company with
written records demonstrating that Independent Contractor has fulfilled all of
its legal obligations, including timely payment of all taxes and estimated taxes
for each Consultant employed by Independent Contractor. Independent Contractor
agrees to indemnify the Company for any claims, costs, losses, fees, penalties,
interest, or damages suffered by the Company resulting from the Independent
Contractor's failure to comply with this provision and for all claims by any
Consultant against Company.

7.      Confidentiality and Nondisclosure of Company Information.

(a)     Confidential Information. As used in this Agreement, Confidential
Information means all information and materials of Company (or any information
or materials provided in confidence by a third party) disclosed, directly or
indirectly, either orally or in writing, to Independent Contractor or
Consultant, including all business and marketing plans, financial data,
compensation information, pricing and cost information, client and prospective
client lists and client and prospective client-related information, product and
software development information, systems integration and technical information,
know-how, programming, models, strategies, analyses, databases, methods,
techniques and processes. Without limiting the generality of the foregoing,
Confidential Information includes all computer software, source code, object
code, software specifications, user interfaces, graphic displays, operating
manuals, and databases; information and materials relating to computer software,
features or enhancements now existing or under development or consideration; and
confidential customer, financial and business information. Independent
Contractor acknowledges that information need not be labeled as "confidential"
to qualify as Confidential Information.

(b)     Exclusion. Confidential Information does not include information that
Independent Contractor can demonstrate: (a) is now or hereafter becomes, through
no act or failure to act on the part of Independent Contractor or Consultant,
generally known to the public; (b) was known by Independent Contractor or
Consultant prior to receiving such information or materials from Company; or (c)
is independently developed by Independent Contractor or Consultant without
using, incorporating, referencing, recreating or relying upon any of the
Confidential Information.

(c)     Nondisclosure and Nonuse. Independent Contractor acknowledges that,
while performing Services for the Company, Independent Contractor and Consultant
will have access to and be provided with Confidential Information. Independent
Contractor and Consultant will at all times during and after the term of this
Agreement hold in strict confidence and not directly or indirectly disclose or
use, or assist or facilitate any other person to disclose or use, any
Confidential Information. Notwithstanding the foregoing, Independent Contractor
understands that Independent Contractor and Consultant may use Confidential
Information only to the extent necessary to perform the Services set forth in
the Task Orders to this Agreement. If at any time Independent Contractor or
Consultant becomes aware of any possibility that Confidential Information is at
risk of being publicly disclosed, Independent Contractor will immediately give
written Notice to the Company so that reasonable efforts can be made to maintain
the secrecy of the Confidential Information. Independent Contractor will require
each Consultant to sign the Confidentiality and Non-Disclosure Agreement
attached hereto as Exhibit B prior to disclosing any Confidential Information to
Consultant.

8.      Inventions and Original Works. Unless otherwise specified in a Task
Order, Independent Contractor and Company agrees that all right, title, and
interest in and to any and all software, original works of authorship,
developments, concepts, improvements, designs, discoveries, inventions, ideas,
trademarks or trade secrets, whether or not patentable or registrable under
copyright or similar laws (collectively referred to as "Inventions"), which
exist prior to this Agreement remain the property of the Independent Contractor.
Independent Contractor agrees that any Inventions which have originated by the
Independent Contractor for purposes of fulfilling this Agreement, which
Independent Contractor or Consultant may solely or jointly conceive or develop
or reduce to practice, or cause to be conceived or developed or reduced to
practice, during the term of this Agreement shall be and are hereby mutually
assigned to the Company, or its designee, and Independent Contractor except for
any Inventions which: (1) Independent Contractor or Consultant developed
entirely on its own time without using the Company's equipment, supplies,
facilities, or Confidential Information; (2) are unrelated to the Company's
business; and (3) do not result from any work the Independent Contractor or
Consultant performed for the Company. Independent Contractor further agrees to
assist Company, at Company's expense, to execute all documents and take all
actions to vest title in Company and to effect the assignment upon request and
to obtain patents or copyrights for any Inventions, including but not limited
to: (1) providing, if requested, all data, plans, specifications, descriptions,
documentation, and other information; (2) requiring its Consultants to execute,
if requested, all applications, oaths, assignments and all other instruments and
papers which Company shall deem necessary; and (3) assisting Company in
completing any applications or registrations relating to such Inventions.
Independent Contractor acknowledges and agrees that the decision whether or not
to commercialize or market any Invention is within the Company's sole discretion
and that no royalty or other compensation of any kind will be due to Independent
Contractor or Consultant as a result of the Company's efforts to commercialize
or market any such Invention. Nothing contained in this Agreement shall be
construed to apply to Independent Contractor's Inventions that existed prior to
the Effective Date of this Agreement, and all such Inventions remain the
property of Independent Contractor. If Independent Contractor performs services
or delivers work product to Company that includes material not assigned to
Company pursuant to this Section, Independent Contractor grants Company a fully-
paid, perpetual, non-exclusive, unlimited license to modify, copy and use all
such material.

9.      Returning Company Documents and Computer Files. Upon termination of this
Agreement, and upon request of Company, Independent Contractor agrees to deliver
to the Company (and not keep in Independent Contractor's or Consultant's
possession, recreate, copy or deliver to anyone else) any and all computer
files, software, e-mail messages, notes, memoranda, reports, records, data,
spreadsheets, presentations, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, equipment, devices, and any other materials,
documents or property, including any reproductions of all such items, belonging
to, obtained by or prepared by Independent Contractor or its Consultants during
the term of this Agreement or otherwise belonging to the Company, its successors
or assigns.

10.     Non-Solicitation of Company Employees. During the term of this Agreement
and for a period of one year after the termination of this Agreement for any
reason, Company and Independent Contractor agree that neither Company,
Independent Contractor nor any Consultant will solicit, induce, recruit or
encourage directly or indirectly (nor will Company, Independent Contractor or
Consultant direct, encourage or assist anyone else to solicit, induce, recruit
or encourage) any of the employees of the Company or Independent Contractor to
terminate their employment with Company or Independent Contractor or to work
elsewhere without prior written consent from the Company or the Independent
Contractor.

11.     Non-Interference with Company's Prospective Business Relationships.
Independent Contractor and Consultant understand that performing Services
pursuant to this Agreement may require Independent Contractor or Consultant to
contact directly or otherwise establish business relationships with individuals
and entities that are customers, vendors, business partners or clients of the
Company, and that Independent Contractor or Consultant may become aware of the
identity of such persons and of the Company's Confidential Information related
to such persons. Independent Contractor and Consultant understand that the
Company has made efforts to maintain the secrecy and confidentiality of such
Confidential Information, which includes among other things, proprietary and
confidential technical, marketing, sales and other business information about
the Company's customers, vendors, business partners and clients. Independent
Contractor and Consultant understand and agree that such Confidential
Information provides the Company with a competitive advantage in establishing
and maintaining existing and prospective business relationships and that
disclosure or use of such Confidential Information would unfairly impair or
interfere with the Company's ability to conduct its business profitably and
would result in irreparable harm to the Company. Independent Contractor and
Consultant agree that during the term of this Agreement and for a period of one
year immediately following the termination of the Agreement for any reason,
neither Independent Contractor nor Consultant will directly or indirectly
solicit or divert, or attempt to solicit or divert, from the Company, any
customers, vendors, business partners or clients, nor will Independent
Contractor or Consultant directly or indirectly interfere with or assist any
other person in interfering with the existing or prospective contracts,
arrangements, or business relationships of the Company with its customers,
vendors, business partners and clients.

12.     Insurance. Independent Contractor shall maintain the following minimum
insurance coverage during the term of this Agreement:

(a)     Worker's Compensation. Independent Contractor agrees to provide worker's
compensation insurance for its employees, subcontractors and agents, and agrees
to hold harmless and indemnify the Company for any and all claims arising out of
any injury, disability, or death of any of Independent Contractor's employees,
subcontractors or agents.

(b)     Liability Insurance. Independent Contractor agrees to maintain an
Employer's Liability Policy of insurance in the minimum amount of $1,000,000, a
Commercial General Liability Policy of $1,000,000 and an Automobile Liability
Policy of $1,000,000.

13.     Indemnity. Independent Contractor agrees to indemnify, defend, and hold
Company free and harmless from all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including
interest, penalties, attorneys' fees, and costs, that Company may incur or
suffer as a result of or related to Independent Contractor or its Consultant's
willful misconduct, negligence, breach or failure to perform any of the
representations, warranties or obligations contained in this Agreement by
Independent Contractor or Consultant.

14.     Assignment. Neither this Agreement nor any duties or obligations under
this Agreement may be assigned by Independent Contractor or Company without the
prior written consent of the other Party.

15.     Termination of Agreement.

(a)     Expiration of Agreement. Unless otherwise terminated as provided in this
Agreement, this Agreement will continue in effect until the Services described
in the Task Orders to this Agreement have been fully and completely performed
and shall then terminate unless renewed in writing by both parties.

(b)     Termination on Notice. Notwithstanding any other provision of this
Agreement, either Party may terminate this Agreement at any time and for any
reason or for no reason by giving fifteen (15) days' written Notice to the other
Party.

16.     General Provisions.

(a)     Notices. All notices, requests, demands and other communications
hereunder ("Notices") must be in writing and shall be deemed to have been fully
given and received when delivered personally, when transmitted by facsimile, one
business day after being deposited for next-day delivery with a nationally
recognized overnight delivery service, or three days after being mailed by first
class mail, charges and postage prepaid, to the Party to receive such Notice at
such Party's address set forth below or any other address that such Party may
specify by Notice to the other Party.

(b)     Severability. The invalidity or unenforceability of any provision, word,
phrase, clause, sentence, paragraph or section hereof shall in no way affect the
validity or enforceability of any other provision, word, phrase, clause,
sentence, paragraph or section hereof, and any such invalid or unenforceable
provision that is overbroad in scope, duration or coverage, shall be deemed
narrowed to the broadest term permitted by applicable law and shall be enforced
as narrowed. If one or more of the provisions in this Agreement is deemed
invalid or unenforceable, then the remaining provisions will continue in full
force and effect.

(c)     Governing Law and Forum Selection. This Agreement shall be construed and
interpreted according to the laws of the State of California not including,
however, rules relating to choice or conflicts of law. Any dispute arising out
of or relating in any way to the subject matter of this Agreement shall solely
be venued in Sacramento, California, and the parties hereby irrevocably submit
to the jurisdiction and venue of a court in Sacramento, California having
subject matter jurisdiction.

(d)     Attorneys' Fees. If any dispute between or among either of the Parties
hereto or any of their respective affiliates should result in litigation, the
prevailing Party or Parties in such dispute shall be entitled to recover from
the other Party or Parties all reasonable fees, costs and expenses of enforcing
any right of the prevailing Party or Parties, including, without limitation,
reasonable attorneys' fees and expenses, all of which shall be deemed to have
accrued on the commencement of such action and shall be paid whether or not such
action is prosecuted to judgment. Any judgment or order entered in such action
shall contain specific provision for the recovery of attorneys' fees and costs
incurred in enforcing such judgment and an award of prejudgment interest from
the date of the breach at the maximum rate allowed by law. For the purposes of
this Section 16, (a) attorneys' fees shall include, without limitation, fees
incurred in post-award or post-judgment motions, contempt proceedings,
garnishment, levy, and debtor and third Party examinations, discovery, and
bankruptcy litigation, and (b) prevailing Party shall mean the Party that is
determined in the proceeding to have prevailed or who prevails by dismissal,
default or otherwise.

(e)     Successors. This Agreement shall inure to the benefit of and bind the
Company and the Independent Contractor, and their respective successors,
assigns, legatees, devisees and personal representatives.

(f)     Entire Agreement. This Agreement contains the entire agreement of the
Company and the Independent Contractor with respect to the subject matter
contained herein and supersedes all prior negotiations, correspondence,
understandings and agreements between them with respect to the subject matter
hereof, including any other Confidentiality Agreements, Independent Contractor
Agreements or similar agreements that may have previously been executed by the
parties.

(g)     Survival. All agreements, representations, warranties and
acknowledgments contained in Sections 6, 7, 8, 9, 10, 11 and 13 shall survive
any termination of this Agreement.

(h)     Written Modifications. This Agreement may only be amended with the
written consent of the parties, and no oral waiver or amendment shall be
effective under any circumstances whatsoever.

THE DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES ACKNOWLEDGE AND AGREE THAT
THEY HAVE CAREFULLY READ AND UNDERSTAND ALL OF THE FOREGOING AND HAVE EXECUTED
THIS AGREEMENT EFFECTIVE AS OF THE DATE FIRST WRITTEN ABOVE.

CONECTISYS CORPORATION
24307 Magic Mountain Pkwy, Suite #41
Valencia, CA 91355

By: /S/ ROBERT SPIGNO                   January 17, 2007
   --------------------------------
   Robert Spigno / Chairman and CEO

Trimark Associates Inc.
193 Blue Ravine Road #120
Folsom, CA 95630

By: /S/ MARK MOROSKY
   --------------------------------     January 17, 2007
   Mark Morosky / President

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