Document:

Exhibit 10.2

GUARANTY

GUARANTY, dated as
of August 25, 2006 made by Kraft Foods Inc., a corporation organized and
existing under the laws of the State of Virginia (“Kraft”), in favor of Citibank International plc (“Citibank”), as agent for and representative
of (the “Administrative Agent”)
the financial parties (the “Lenders”)
party to the Credit Agreement referred to below.

For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce the Lenders to
make Advances under the Credit Agreement dated as of August 25, 2006 (as
amended, supplemented and otherwise modified from time to time, the “Credit Agreement”) by and among Sheffield
Investments, S.L. (the “Borrower”),
the initial lenders named therein, the Administrative Agent and Citigroup
Global Markets Limited and UBS Securities LLC as joint lead arrangers and joint
bookrunners, Kraft agrees as follows:

1.             Guaranty. Kraft hereby
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all obligations of
the Borrower now or hereafter existing under the Loan Documents, whether for
principal, interest, fees, expenses or otherwise (such obligations being the “Obligations”), and any and all expenses
(including counsel fees and expenses) incurred by the Administrative Agent or
the Lenders in enforcing any rights under this Guaranty.

2.             Guaranty Absolute. Kraft
guarantees that the Obligations will be paid strictly in accordance with the
terms of the Credit Agreement, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or the Lenders with respect thereto. The
liability of Kraft under this Guaranty shall be absolute and unconditional
irrespective of:

(a)           any lack of validity, enforceability
or genuineness of any provision of the Credit Agreement or any other agreement
or instrument relating thereto;

(b)           any change in the time, manner or place
of payment of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to departure from the Credit
Agreement;

(c)           any exchange, release or
non-perfection of any collateral, or any release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the
Obligations; or

(d)           any manner of application of
Collateral, or proceeds thereof, to all or any of the Obligations, or any
manner of sale or other disposition of any Collateral for all or any of the
Obligations (and Kraft acknowledges that the Liens on the Collateral under the
Bank Account Charge in favor of the Secured Parties have been (or shortly will
be) released by the Collateral Agent to the Borrower);

(e)           any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the Borrower or
Kraft.

This Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Obligations is rescinded or must otherwise be
returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.

 

3.             Waiver.

(a)           Kraft hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty and any requirement that the Administrative Agent
or any Lender protect, secure, perfect or insure any security interest or lien
or any property subject thereto or exhaust any right or take any action against
the Borrower or any other Person or any collateral.

(b)           Kraft hereby irrevocably waives any
claims or other rights that it may now or hereafter acquire against the
Borrower that arise from the existence, payment, performance or enforcement of
Kraft’s obligations under this Guaranty or the Credit Agreement, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Administrative Agent or any Lender against the Borrower or any
collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right
to take or receive from the Borrower, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account
of such claim, remedy or right. If any amount shall be paid to Kraft in
violation of the preceding sentence at any time prior to the later of the cash
payment in full of the Obligations and all other amounts payable under this
Guaranty and the Termination Date, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent to be credited and applied to the Obligations and
all other amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Credit Agreement and this Guaranty, or to be
held as collateral for any Obligations or other amounts payable under this
Guaranty thereafter arising. Kraft acknowledges that it will receive direct and
indirect benefits from the financing provided to the Borrower pursuant to the
Credit Agreement and this Guaranty and that the waiver set forth in this
Section 3(b) is knowingly made in contemplation of such benefits.

4.             Conditions to Effectiveness.
This Guaranty shall have no force or effect until the Extension Date; provided,
however, that Sections 14 through 24 shall have effect upon the
execution of this Guaranty by each party hereto.

5.             Time and Place of Payment.
Kraft shall make each payment hereunder, without set-off or counterclaim, not
later than 11:00 A.M. (New York City time) on the day when due to the
Administrative Agent, at the Administrative Agent Account in same day funds.

6.             Right of Set-Off. Upon (a)
the occurrence and during the continuance of any Loan Event of Default and (b)
the making of the request or the granting of the consent specified by Section
6.2 of the Credit Agreement to authorize the Administrative Agent to declare
the Advances due and payable pursuant to the provisions of Section 6.2 of the
Credit Agreement, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of Kraft against any and all of the Obligations now or
hereafter existing under this Guaranty, whether or not such Lender shall have
made any demand under this Guaranty and although such Obligations may be
unmatured. Each Lender shall promptly notify Kraft after any such set-off and
application, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
and its affiliates under this Section 6 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its affiliates may have.

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7.             Representations and Warranties:
Kraft represents and warrants as of the Extension Date as follows:

(a)           It is a corporation duly organized,
validly existing and in good standing under the laws of Virginia.

(b)           The execution, delivery and
performance of this Guaranty are within its corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i) its
charter or by-laws or (ii) in any material respect, any law, rule, regulation
or order of any court or governmental agency or any contractual restriction
binding on or affecting it.

(c)           No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
it of this Guaranty.

(d)           This Guaranty is a legal, valid and
binding obligation of Kraft enforceable against Kraft in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other laws affecting
creditors’ rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.

(e)           As reported in Kraft’s Annual Report
on Form 10-K for the year ended December 31, 2005, the consolidated balance
sheets of Kraft and its Subsidiaries as of December 31, 2005 and the
consolidated statements of earnings of Kraft and its Subsidiaries for the year
then ended fairly present, in all material respects, the consolidated financial
position of Kraft and its Subsidiaries as at such date and the consolidated
results of the operations of Kraft and its Subsidiaries for the year ended on
such date, all in accordance with accounting principles generally accepted in
the United States. Except as disclosed in Kraft’s Annual Report on Form 10-K for
the year ended December 31, 2005, in Kraft’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2006 and in any current Report on Form 8-K filed
subsequent to December 31, 2005 but prior to the date hereof, since December
31, 2005 there has been no material adverse change in such position or
operations.

(f)            There is no pending or threatened
action or proceeding affecting it or any of its Subsidiaries before any court,
governmental agency or arbitrator (a “Proceeding”)
(i) that purports to affect the legality, validity or enforceability of this
Guaranty or (ii) except for Proceedings disclosed in Kraft’s Annual Report on
Form 10-K for the year ended December 31, 2005, in Kraft’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2006, any current Report on form 8-K
filed subsequent to December 31, 2005 but prior to the date hereof, and, with
respect to Proceedings commenced after the date of the most recent such
document but prior to the date hereof, a certificate delivered to the Lenders,
that may materially adversely affect the financial position or results of
operations of Kraft and its Subsidiaries taken as a whole.

(g)           It owns directly or indirectly all of
the shares in the Borrower.

8.             Affirmative Covenants: So
long as any Advance under the Credit Agreement shall remain unpaid or any
Lender shall have any Commitment under the Credit Agreement, Kraft will:

(a)           Compliance with Laws, Etc.
Comply, and cause each Major Subsidiary to comply, in all material respects,
with all applicable laws, rules, regulations and orders (such compliance to
include, without limitation, complying with ERISA and paying before the same
become delinquent all taxes, assessments and governmental charges imposed upon
it or upon its property except to the extent contested in good faith), 

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noncompliance with which
would materially adversely affect the financial condition or operations of
Kraft and its Subsidiaries taken as a whole.

(b)           Maintenance of Net Worth.
Maintain total shareholders’ equity on the consolidated balance sheet of Kraft
and its Subsidiaries of not less than $20,000,000,000.

(c)           Reporting Requirements.
Furnish to the Lenders:

(i)            as
soon as available and in any event within 60 days after the end of each of the
first three quarters of each fiscal year of Kraft, an unaudited interim
condensed consolidated balance sheet of Kraft and its Subsidiaries as of the
end of such quarter and unaudited interim condensed consolidated statements of
earnings of Kraft and its Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, certified by
the chief financial officer of Kraft;

(ii)           as
soon as available and in any event within 100 days after the end of each fiscal
year of Kraft, a copy of the consolidated financial statements for such year
for Kraft and its Subsidiaries, audited by PricewaterhouseCoopers LLP (or other
independent auditors which, as of the date of this Agreement, are one of the “big four” accounting firms);

(iii)          all
reports which Kraft sends to any of its shareholders and copies of all reports
on Form 8-K (or any successor forms adopted by the Securities and Exchange
Commission) that Kraft files with the Securities and Exchange Commission;

(iv)          as
soon as possible and in any event within five days after the occurrence of each
Event of Default and each event which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default, continuing on the date of
such statement, a statement of the chief financial officer or treasurer of
Kraft setting forth details of such Event of Default or event and the action
which Kraft has taken and proposes to take with respect thereto; and

(v)           such
other information respecting the condition or operations, financial or
otherwise, of Kraft or any Major Subsidiary as any Lender through the
Administrative Agent may from time to time reasonably request.

In lieu of furnishing the
Lenders the items referred to in clauses (i), (ii) and (iii) above, Kraft may
make such items available on the internet at www.kraft.com (which website
includes an option to subscribe to a free service alerting subscribers by
e-mail of new Securities and Exchange Commission filings) or any successor or
replacement website thereof, or by similar electronic means.

9.             Negative Covenants. So long
as any Advance shall remain unpaid under the Credit Agreement or any Lender
shall have any Commitment under the Credit Agreement, Kraft will not:

(a)           Liens, Etc. Create or suffer
to exist, or permit any Major Subsidiary to create or suffer to exist, any
lien, security interest or other charge or encumbrance (other than operating
leases and licensed intellectual property), or any other type of preferential
arrangement (“Liens”), upon or
with respect to any of its properties, whether now owned or hereafter acquired,
or assign, or permit any Major Subsidiary to assign, any right to receive
income, in each case to secure or provide for the payment of any Debt of any
Person, other than:

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(i)            Liens
upon or in property acquired or held by it or any Major Subsidiary in the
ordinary course of business to secure the purchase price of such property or to
secure indebtedness incurred solely for the purpose of financing the
acquisition of such property;

(ii)           Liens
existing on property at the time of its acquisition (other than any such lien
or security interest created in contemplation of such acquisition);

(iii)          Liens
existing on the date hereof securing Debt;

(iv)          Liens
on property financed through the issuance of industrial revenue bonds in favor
of the holders of such bonds or any agent or trustee therefor;

(v)           Liens
existing on property of any Person acquired by Kraft or any Major Subsidiary;

(vi)          Liens
securing Debt in an aggregate amount not in excess of 15% of Consolidated
Tangible Assets;

(vii)         Liens
upon or with respect to “margin stock”
as that term is defined in Regulation U;

(viii)        Liens
in favor of Kraft or any Major Subsidiary;

(ix)           precautionary
Liens provided by Kraft or any Major Subsidiary in connection with the sale,
assignment, transfer or other disposition of assets by Kraft or such Major
Subsidiary which transaction is determined by the Board of Directors of Kraft
or such Major Subsidiary to constitute a “sale”
under accounting principles generally accepted in the United States; or

(x)            any
extension, renewal or replacement of the foregoing, provided that (A)
such Lien does not extend to any additional assets (other than a substitution
of like assets), and (B) the amount of Debt secured by any such Lien is not
increased.

(b)           Mergers, Etc. Consolidate with
or merge into, or convey or transfer its properties and assets substantially as
an entirety to, any Person, or permit any Subsidiary directly or indirectly
owned by it to do so, unless, immediately after giving effect thereto, no
Default or Event of Default would exist and, in the case of any merger or
consolidation to which it is a party, the surviving corporation is Kraft or was
a Subsidiary of Kraft immediately prior to such merger or consolidation, which
is organized and existing under the laws of the United States of America or any
State thereof, or the District of Columbia. The surviving corporation of any
merger or consolidation involving Kraft shall assume all of Kraft’s obligations
under this Guaranty (including without limitation with respect to Kraft’s
obligations, the covenants set forth in Section 8 and 9) by the execution and
delivery of an instrument in form and substance satisfactory to the Required
Lenders.

10.           Continuing Guaranty. This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until payment in full (after the Termination Date) of the Obligations and all
other amounts payable under this Guaranty, (b) be binding upon Kraft, its
successors and assigns, and (c) inure to the benefit of and be enforceable by
the Lenders, the Administrative Agent and their respective successors,
transferees and assigns. Without limiting the generality of clause (c) of the
immediately preceding sentence, any Lender may assign or otherwise transfer all
or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes held by it) to any other Person, and
such other Person shall thereupon become vested 

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with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as and
to the extent provided in Section 8.07 of the Credit Agreement.

11.           Guaranty Events of Default.
Each of the following events (each a “Guaranty
Event of Default”) shall constitute an Event of Default:

(a)           Any representation or warranty made
or deemed to have been made by Kraft herein or by Kraft (or any of its
officers) in connection with this Guaranty shall prove to have been incorrect
in any material respect when made or deemed to have been made; or

(b)           Kraft shall fail to perform or
observe (i) any term, covenant or agreement contained in Section 8(b) or 9(b),
(ii) any term, covenant or agreement contained in Section 9(a) if such failure
shall remain unremedied for 15 days after written notice thereof shall have
been given to Kraft by the Administrative Agent or any Lender or (iii) any
other term, covenant or agreement contained in this Guaranty on its part to be
performed or observed if such failure shall remain unremedied for 30 days after
written notice thereof shall have been given to Kraft by the Administrative
Agent or any Lender; or

(c)           Kraft or any Major Subsidiary shall
fail to pay any principal of or premium or interest on any Debt which is
outstanding in a principal amount of at least $100,000,000 in the aggregate
(but excluding Debt arising under this Guaranty or the Credit Agreement) of
Kraft or such Major Subsidiary, as the case may be, when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt unless adequate provision for any such payment has been made in form and
substance satisfactory to the Required Lenders; or any Debt of Kraft or any
Major Subsidiary which is outstanding in a principal amount of at least
$100,000,000 in the aggregate (but excluding Debt arising under this Guaranty
or the Credit Agreement) shall be declared to be due and payable, or required
to be prepaid (other than by a scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated maturity
thereof unless adequate provision for the payment of such Debt has been made in
form and substance satisfactory to the Required Lenders; or

(d)           Kraft or any Major Subsidiary shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against Kraft or any Major Subsidiary seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property, and, in the case of any such proceeding instituted against it (but
not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against it or the appointment of a receiver, trustee, custodian or other
similar official for it or for any of its property constituting a substantial
part of the property of Kraft and its Subsidiaries taken as a whole) shall
occur; or Kraft or any Major Subsidiary shall take any corporate action to
authorize any of the actions set forth above in this subsection (d); or

(e)           Any judgment or order for the payment
of money in excess of $100,000,000 shall be rendered against Kraft or any Major
Subsidiary and there shall be any period of 60 consecutive days during which a
stay of enforcement of such unsatisfied judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

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(f)            Kraft or any ERISA Affiliate shall
incur, or shall be reasonably likely to incur, liability in excess of
$500,000,000 in the aggregate as a result of one or more of the following: (i)
the occurrence of any ERISA Event; (ii) the partial or complete withdrawal of
Kraft or any ERISA Affiliate from a Multiemployer Plan; or (iii) the
reorganization or termination of a Multiemployer Plan; provided, however,
that no Guaranty Default or Guaranty Event of Default under this Section 11(f)
shall be deemed to have occurred if Kraft or any ERISA Affiliate shall have
made arrangements satisfactory to the PBGC or the Required Lenders to discharge
or otherwise satisfy such liability (including the posting of a bond or other
security).

12.           Taxes. Any and all payments
made by Kraft hereunder shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto (“Taxes”). If any Taxes are required to be
withheld from any amounts payable hereunder, the amounts so payable shall be
increased to the extent necessary to yield (after payment of all Taxes) the
amounts payable hereunder in the full amounts so to be paid.

13.           Kraft’s Credit Decision, Etc.
Kraft has, independently and without reliance on the Administrative Agent and
based on such documents and information as Kraft has deemed appropriate, made
its own credit analysis and decision to enter into this Guaranty. Kraft has
adequate means to obtain from the Borrower on a continuing basis information
concerning the financial condition, operations and business of the Borrower,
and Kraft is not relying on the Administrative Agent or any other Lender to
provide such information now or in the future. Kraft acknowledges that it will
receive substantial direct and indirect benefit from the extensions of credit
contemplated by this Guaranty.

14.           Certain Defined Terms. (a)
Each capitalized term utilized in this Guaranty that is not defined herein
shall have the meaning set forth in the Credit Agreement. As used in this
Guaranty, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):

“Board” means the Board of Governors of the
Federal Reserve System of the United States (or any successor).

“Consolidated Tangible Assets” means the
total assets appearing on a consolidated balance sheet of Kraft and its
Subsidiaries, less goodwill and other intangible assets and the minority
interests of other Persons in such Subsidiaries, all as determined in
accordance with accounting principles generally accepted in the United States,
except that if there has been a material change in an accounting principle as
compared to that applied in the preparation of the financial statements of
Kraft and its Subsidiaries as at and for the year ended December 31, 2005, then
such new accounting principle shall not be used in the determination of
Consolidated Tangible Assets. A material change in an accounting principle is
one that, in the year of its adoption, changes Consolidated Tangible Assets at
any quarter in such year by more than 10%.

“Debt” means (a) indebtedness for borrowed
money or for the deferred purchase price of property or services, whether or
not evidenced by bonds, debentures, notes or similar instruments, (b)
obligations as lessee under leases that, in accordance with accounting
principles generally accepted in the United States, are recorded as capital
leases, and (c) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of any other Person of the kinds referred to in clause (a) or (b)
above.

“Default” means Guaranty Default or Loan
Default.

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“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.

“ERISA Affiliate” means any Person that for
purposes of Title IV of ERISA is a member of Kraft’s controlled group, or under
common control with Kraft, within the meaning of Section 414 of the Internal
Revenue Code.

“ERISA Event” means (a) (i) the occurrence
with respect to a Plan of a reportable event, within the meaning of Section
4043 of ERISA, unless the 30-day notice requirement with respect thereto has
been waived by the Pension Benefit Guaranty Corporation (or any successor) (“PBGC”), or (ii) the requirements of
subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) of
such section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph
(9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days; (b)
the application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d)
the cessation of operations at a facility of Kraft or any of its ERISA
Affiliates in the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by Kraft or any of its ERISA Affiliates from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions set forth in Section
302(f)(1)(A) and (B) of ERISA to the creation of a lien upon property or rights
to property of Kraft or any of its ERISA Affiliates for failure to make a
required payment to a Plan are satisfied; (g) the adoption of an amendment to a
Plan requiring the provision of security to such Plan, pursuant to Section 307
of ERISA; or (h) the termination of a Plan by the PBGC pursuant to Section 4042
of ERISA, or the occurrence of any event or condition described in Section 4042
of ERISA that constitutes grounds for the termination of, or the appointment of
a trustee to administer, a Plan.

“Event of Default” means Guaranty Event of
Default or Loan Event of Default.

“Guaranty Default” means any event specified
in Section 11 that would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.

“Guaranty Event of Default” has the meaning
specified in Section 11.

“Indemnified Party” has the meaning
specified in Section 17(b).

“Liens” has the meaning specified in Section
9(a).

“Loan Default” means Default as defined in
the Credit Agreement.

“Loan Event of Default” means Event of
Default as defined in the Credit Agreement.

“Major Subsidiary” means any Subsidiary (a)
more than 50% of the voting securities of which is owned directly or indirectly
by Kraft, (b) which is organized and existing under, or has its principal place
of business in, the United States or any political subdivision thereof, Canada
or any political subdivision thereof, any country which is a member of the
European Union on the date hereof (other than Greece, Portugal or Spain) or any
political subdivision thereof, or Switzerland, Norway or Australia or any of
their respective political subdivisions, and (c) which has at any time total
assets (after intercompany eliminations) exceeding $1,000,000,000.

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“Multiemployer Plan” means a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, to which Kraft or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions, such plan being maintained pursuant to one or more
collective bargaining agreements.

“Multiple Employer Plan” means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of Kraft or any ERISA Affiliate and at least one
Person other than Kraft and the ERISA Affiliates or (b) was so maintained and
in respect of which Kraft or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.

“Obligations” has the meaning specified in
Section 1.

“Person” means an individual, partnership,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability company or other
entity, or a government or any political subdivision or agency thereof.

“Plan” means a Single Employer Plan or a
Multiple Employer Plan.

“Regulation U” means Regulation U of the
Board, as in effect from time to time.

“Single Employer Plan” means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of Kraft or any ERISA Affiliate and no Person other
than Kraft and the ERISA Affiliates or (b) was so maintained and in respect of
which Kraft or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.

“Subsidiary” of any Person means any
corporation of which (or in which) more than 50% of the outstanding capital
stock having voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

(b)           Accounting Terms. All
accounting terms not specifically defined herein shall be construed in accordance
with accounting principles generally accepted in the United States of America,
except that if there has been a material change in an accounting principle
affecting the definition of an accounting term as compared to that applied in
the preparation of the financial statements of Kraft as of and for the year
ended 31 December 2005, then such new accounting principle shall not be used in
the determination of the amount associated with that accounting term. A
material change in an accounting principle is one that, in the year of its
adoption, changes the amount associated with the relevant accounting term for
any quarter in such year by more than 10%.

15.           Amendments, Etc. No amendment
or waiver of any provision of this Guaranty, nor consent to any departure by
Kraft therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Administrative Agent (acting with any Lender consents
required under the Credit Agreement), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

16.           Notices, Etc. (a) Addresses.
All notices and other communications provided for hereunder shall be in writing
(including telecopier communication) and mailed, telecopied, or delivered, as
follows:

 9
 

 

if to Kraft:

Kraft Foods Inc.

Three Lakes Drive

Northfield, Illinois 60093

Attention: Secretary

Fax number: (847) 646-2950

if to Citibank, as
Administrative Agent:

Citibank International plc

Loans Agency Office, 2nd Floor

4 Harbour Exchange Square

London E14 9GE

England

Attention: Ian Hayton/Sonia Gosparini

Fax number: +44 208 636 3824/3825

or, at such other address
as shall be designated by such party in a written notice to the other parties.

(b)           Effectiveness of Notices. All
such notices and communications shall, when mailed or telecopied, be effective
when deposited in the mail or telecopied, respectively. Delivery by telecopier
or other electronic communication of an executed counterpart of any amendment
or waiver of any provision of this Guaranty or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.

17.           Costs and Expenses;
Indemnification.

(a)           Costs and Expenses. Kraft
agrees to pay on demand all reasonable costs and expenses in connection with
the preparation, execution, delivery, administration (excluding any cost or
expenses for administration related to the overhead of the Administrative
Agent), modification and amendment of this Guaranty, the Credit Agreement and
the documents to be delivered hereunder and thereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent, with respect thereto and with respect to advising the
Administrative Agent, as to its rights and responsibilities under this
Guaranty, the Credit Agreement, and all costs and expenses of the Lenders and
the Administrative Agent, if any (including, without limitation, reasonable
counsel fees and expenses of the Lenders and the Administrative Agent), in
connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Guaranty, the Credit Agreement and the other
documents to be delivered hereunder and thereunder. Notwithstanding the foregoing,
in no event shall this Section 17(a) constitute a guaranty of the repayment of
any Advance or any interest thereon.

(b)           Indemnification. Kraft agrees
to indemnify and hold harmless the Administrative Agent and each Lender and
each of their respective affiliates, control persons, directors, officers,
employees, attorneys and agents (each, an “Indemnified
Party”) from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
disbursements of counsel) which may be incurred by or asserted against any
Indemnified Party, in each case in connection with or arising out of, or in
connection with the preparation for or defence of, any investigation,
litigation, or proceeding (i) related to any transaction or proposed
transaction (whether or not consummated) in which any proceeds of any Borrowing
are applied or proposed to be applied, directly or indirectly, by any Borrower,
whether or not such Indemnified Party is a party to such transaction or (ii)
related to the Borrower’s entering into the Credit Agreement, Kraft’s entering
into this Guaranty, or to any actions or omissions of the Borrower or Kraft,
any of their respective Subsidiaries or affiliates (other than Altria Group,
Inc. and its non-Kraft Subsidiaries or affiliates) or any of its or their
respective officers, directors, employees or agents in connection therewith, in

 10
 

 

each case whether or not
an Indemnified Party is a party thereto and whether or not such investigation,
litigation or proceeding is brought by Kraft or the Borrower or any other
Person; provided, however, that Kraft shall not be required to
indemnify any such Indemnified Party from or against any portion of such
claims, damages, losses, liabilities or expenses that is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnified Party.
Notwithstanding the foregoing, in no event shall this Section 17(b) constitute
a guaranty of the repayment of any Advance or any interest thereon.

(c)           Survival. Without prejudice to
the survival of any of the other agreements of Kraft under this Guaranty or any
of the other Loan Documents, the agreements and obligations of Kraft contained in
Section 1 (with respect to enforcement expenses) and the last sentence of
Section 2 shall survive the payment in full of the Obligations and all of the
other amounts payable under this Guaranty.

18.           Binding Effect. This Guaranty
shall be binding upon and inure to the benefit of Kraft, the Administrative
Agent and each Lender and their respective successors and assigns, except that
Kraft shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.

19.           Disclosure of Information. Any
Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to the Credit Agreement, disclose to an
assignee or participant or proposed assignee or participant, any information
relating to Kraft furnished to such Lender by or on behalf of Kraft; provided
that, prior to any such disclosure, the assignee or participant or proposed
assignee or participant shall agree to preserve the confidentiality of any
confidential information relating to Kraft received by it from such Lender.

20.           No Waiver; Remedies. No
failure on the part of any Lender or any Agent to exercise, and no delay in
exercising, any right under this Guaranty shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.

21.           Governing Law. This Guaranty
shall be governed by, and construed in accordance with, the laws of the State
of New York.

22.           Execution in Counterparts.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Guaranty by telecopier or other electronic communication shall be
effective as delivery of a manually executed counterpart of this Guaranty.

23.           Jurisdiction, Etc.

(a)           Submission to Jurisdiction;
Service of Process. Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York state court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Guaranty, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York
state court or, to the extent permitted by law, in such federal court. Kraft
hereby further irrevocably consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties hereto by
registered or certified mail, postage prepaid, to Kraft at its 

 11
 

 

address specified
pursuant to Section 16. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Guaranty shall affect any right that any party may
otherwise have to serve legal process in any other manner permitted by law or
to bring any action or proceeding relating to this Guaranty in the courts of
any jurisdiction.

(b)           Waivers. Each of the parties
hereto irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Guaranty in any New York state or federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

24.           Confidentiality. None of the
Agents nor any Lender shall disclose any confidential information relating to
Kraft to any other Person without the consent of Kraft, other than (a) to such
Agent’s or such Lender’s affiliates and their officers, directors, employees,
agents and advisors and, as contemplated by Section 19, to actual or
prospective assignees and participants, and then, in each such case, only on a
confidential basis; provided, however, that such actual or
prospective assignee or participant shall have been made aware of this Section
24 and shall have agreed to be bound by its provisions as if it were a party to
this Guaranty, (b) as required by any law, rule or regulation or judicial
process, and (c) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking or other financial
institutions. Notwithstanding any other provision in this Guaranty, the
Administrative Agent hereby confirms that Kraft (and any employee, officer, representative
or agent thereof) shall not be limited from disclosing the U.S. tax treatment
or U.S. tax structure of the transaction.

[Remainder of page
intentionally left blank]

 12

 

IN WITNESS WHEREOF, Kraft
and the Administrative Agent have caused this Guaranty to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date
first written above.

	
  

  	
  KRAFT FOODS INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ James Dollive

  
	
   

  	
   

  	
  Name: J. Dollive

  
	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  
	
   

  	
  CITIBANK INTERNATIONAL plc,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Paul Gibbs

  
	
   

  	
   

  	
  Name: Paul Gibbs

  
	
   

  	
   

  	
  Title: Vice PresidentExhibit
10.16

DATED APRIL 12, 2006

Between

SMF
MANAGEMENT CONSULTANTS B.V.

(as
Purchaser)

and

BLYTH
HOLDING B.V.

(as
Seller)

and

BLYTH,
INC.

(as
Guarantor)

and

JOHANNES
VAN TOL

SHARE SALE AND PURCHASE AGREEMENT

 

 1
 

 

THIS
SHARE SALE AND PURCHASE AGREEMENT is made on this 12th day of
April, 2006 (the “Agreement”)

Between:

(1)                                  SMF MANAGEMENT CONSULTANTS B.V. a private limited liability
company organized and existing under the laws of The Netherlands (the “Purchaser”). The Purchaser is a subsidiary of Nijenveste
Holding B.V. with its principal place of business at Dijkstraat 14, 7121ET
Aalten, The Netherlands;

and

(2)                                  BLYTH, INC., a corporation organized and existing under the
laws of the state of Delaware, United States of America, with its principal
place of business at One East Weaver Street, Greenwich, CT 06831, United States
of America (“Blyth”);

and

(3)                                  BLYTH HOLDING B.V., a
private limited liability company organized and existing under the laws of The
Netherlands with its registered office in Tilburg and its principal place of
business at Gesworenhoekseweg 8, 5047 TM in Tilburg, The
Netherlands (the “Seller”);

and

(4)                                  JOHANNES VAN TOL, a private individual, residing at
Dijkstraat 14, 7121 ET, Aalten, The Nethertlands (“Van Tol”),

WHEREAS :

(A)                              Seller
is the legal and beneficial owner of the entire issued share capital of
Kaemingk B.V., a private limited liability company organized and existing under
the laws of The Netherlands with its registered office at Amsterdam and its
principal place of business at Broekstraat 13, 7122 MN, Aalten, The Netherlands
(the “Company”);

(B)                                The
Company is in the business of designing and selling Christmas and spring items;

(C)                                Van
Tol, being the ultimate owner of the Purchaser, sold the Company through his
holding company, Nijenveste Holding B.V., to the Seller pursuant to the
Original Agreement and has remained the managing director of the Company for
the entire period through the Closing Date; and

(D)                               The
Seller and the Purchaser have agreed that the Seller shall sell and transfer to
the Purchaser and the Purchaser shall purchase and acquire from Seller 100% of
the total issued share capital of the Company, consisting of 2000 shares,
nominal value €45.00 per share, numbered 1 to 2000 (the “Shares”), for the consideration and on the
terms and subject to the conditions contained in this Agreement.

 2
 

 

(E)                                 Blyth,
being the sole shareholder of the Seller, has agreed to guarantee the
obligations of the Seller.

THEREFORE IT IS HEREBY AGREED as follows:

ARTICLE 1 - DEFINITIONS AND INTERPRETATION

1.1                                 Definitions.
In this Agreement, unless the context otherwise requires the words and
expressions used in this Agreement shall have the meanings set out in Schedule 1.

1.2                                 Headings. Headings are inserted for convenience only and shall not affect the
construction of this Agreement.

ARTICLE 2 - SALE AND PURCHASE OF SALE SHARES

2.1                                 Sale
and Purchase. The Seller hereby, subject to the terms and conditions of the
Agreement, sells (“verkoopt”) the Shares to
Purchaser, and Purchaser hereby, subject to the terms and conditions of this
Agreement, purchases (“koopt”) the
Shares from the Seller.

2.2                                 Transfer.
At Closing, the Seller agrees to transfer (“leveren”) to
Purchaser the Shares and the Purchaser agrees to accept the transfer of the
Shares from the Seller.

ARTICLE 3 – CONSIDERATION FOR THE SHARES

3.1                                Purchase
Price. The consideration for the Shares payable by Purchaser to Seller
shall consist of a fixed amount payable at Closing (the “Consideration”).

3.2                                Consideration
payable at Closing. The
Consideration payable by Purchaser to Seller at Closing shall, subject to
reduction as provided in Article 3.4, be €34,000,000 (Thirty Four Million Euro),
all of which shall be paid at Closing to the Seller.

3.3                                Payment.
The Consideration shall be satisfied by payment in cash by the Purchaser to the
Seller on the Closing Date.

3.4                                Adjustment
of Consideration. The Consideration shall be reduced by the amount owing
from Seller to Purchaser under Article 5.1.3. of the Original Agreement, which
Purchaser agrees shall fully and finally satisfy of any and all amounts owing
from Seller to Purchaser under Article 5.1. of the Original Agreement in
connection with the Deed of Assignment. The amount to be reduced is €5,500,000
(Five Million, Five Hundred Thousand Euros).

 3
 

 

ARTICLE 4 – CLOSING

4.1                                 Time
and Place of Closing. Closing shall take place at the offices of NautaDutilh
N.V., Strawinskylaan 1999, 1077 XV, Amsterdam, The Netherlands, at 10:00 a.m. on April 12,
2006 or at such other place and time as shall be mutually agreed between the
Parties, where all (and not some only) of the events described in this Article
4 shall occur.

4.2                                 Seller’s
Closing obligations. At Closing, the Seller shall:

(a)                       deliver or
cause to be delivered to the Purchaser:

(i)                           the original Shareholders Register;

(b)                      execute:

(i)                           the
Notarial Transfer Deed;

(ii)                        the Escrow
Termination Instructions;

(c)                       cause:

(i)                           the Company to execute the Notarial Transfer Deed;

(d)                      authorize the civil law notary executing the
Notarial Transfer Deed to make the relevant entries in the Shareholders
Register.

4.3                                 Purchaser’s
Closing Obligations. At Closing, and upon the delivery of the items set out
in Article 4.2 above, the Purchaser shall:

(a)                       execute the
Notarial Transfer Deed;

(b)                      instruct the
civil law notary of NautaDutilh N.V. (who, prior to Closing, shall have
received from the Purchaser an amount equal to the Consideration on its third
party account) to pay the Consideration to a bank account designated by the
Seller (or as otherwise be designated by the Seller in writing), and Seller’s
receipt thereof shall be an absolute discharge therefor.

4.4                               Seller’s
and Purchaser’s Post- Closing Obligations.

Within four months after
Closing Date, Purchaser and Seller shall determine in good faith the
Intercompany Receivable and shall promptly make payment thereof.

 4.5                              Non-Compliance. If
the Seller or Purchaser fails to perform any action required from it under
Article 4.2 or 4.3, the other Party may, at its option and without prejudice to
any of its other rights and claims (including, also if this Agreement is
terminated, any right to payment of damages):

(a)                                  demand
that the defaulting Party performs the relevant actions on a day and

 4
 

 

at a time to be
determined by the non-defaulting Party; or

(b)                                 terminate
this Agreement by written notice (without any liability towards the defaulting
Party).

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES

5.1                                 Warranties
of the Seller. The Seller represents, warrants and undertakes (“verklaart, staat er voor in en garandeert”) to and with the
Purchaser that each of the Warranties is at the date of this Agreement true and
accurate.

ARTICLE 6 - REMEDIES FOR BREACHES

6.1                                 Breaches
and Infringements. In the event of an infringement (“inbreuk”)
of any of the Warranties given by the Seller or in the event of a default (“tekortkoming”) in the compliance (“nakoming”)
by the Seller of any other obligations under this Agreement (collectively: a “Breach”), the Seller shall reimburse and hold harmless (“schadeloos stellen”) either the Purchaser or the Company (at
the option of the Purchaser) for all damages, losses, reasonable costs and
expenses (“Damages”) suffered by the Purchaser or
the Company as a result of the Breach, without prejudice to other statutory
rights of the Purchaser.

6.2                                 Damages.
The Parties agree that the Damages shall include the amount necessary to put
the Purchaser – or at the option of the Purchaser, the Company – in a position
similar to the position the Purchaser or Company would have been in without the
relevant Breach

6.3                                 Claim
on behalf of the Company. It is expressly understood that if and to the
extent an event gives rise to a Claim under more than one Warranty, the
Purchaser shall be entitled to file a Claim under any such breached Warranty as
it may deem fit, on its own behalf and/or on behalf of the Company as third
party beneficiary of the right to be reimbursed and held harmless pursuant to
this Article 6, provided, however, that it cannot claim reimbursement of the
same Damages twice. Also, for the avoidance of doubt it is expressly confirmed
and understood that where this Article 6 refers to “Damages suffered by the
Purchaser or the Company”, such damages shall not be deemed to have been doubly
incurred by both the Purchaser and the Company, which means that any Damages
suffered for which the Company is reimbursed cannot be claimed twice by the
Purchaser, and vice versa.

6.4                                 Additional
Indemnity. In addition, and without prejudice to Article 6.1, the Seller
shall indemnify and hold the Purchaser and
the Company harmless from any and all Damages arising out of or in
connection with all liability of the Company for Taxes attributable to tax
periods ending on or before the Closing Date, to the extent not reserved
against in the Company’s balance sheet it being understood and agreed that (i)
the threshold as set forth in Article 6.7 shall not apply and (ii) in the event
the Tax

 5
 

 

authorities have
performed a full Tax audit in respect of a financial year and all Tax
liabilities arising out of such Tax audit have been fully and finally settled
by the Company, the liability of the Seller under this Article 6.4 shall be
extinguished for (a) the Tax liabilities for which such Tax audit was performed
and (b) such financial year (only).

6.5.                              Limitation of Liability. Subject to Article 6.8, the aggregate
amount to which the Purchaser shall be subject pursuant to this Agreement shall
be limited to €5,000,000.

6.6                                Survival. Subject to Article 6.8, all
Warranties shall survive the Closing Date for three (3) years.

6.7                                Threshold.

(i)                                    The Purchaser
shall not be entitled to seek indemnification for any Claim for Breach unless
the total amount of Damages arising from such Breach exceeds €25,000;

(ii)                                 Subject to Article
6.8, the Purchaser agrees not to enforce any Claim until the aggregate amount
of all indemnifiable Claims exceeds €250,000 and then the Purchaser shall be
entitled to recover all Claims from the first Euro.

6.8                                 Qualifications to Limitations. If in any case a
Claim has arisen by reason of:

(i)                                     fraud or wilful concealment or dishonesty or deliberate non-disclosure
on the part of the Seller prior to the date of this Agreement; or

(ii)                                  the Seller not having good and unencumbered title to any of the Shares
(other than as a result of a breach by Purchaser in the Original Agreement);

(iii)                               the Seller or any
signatory on its behalf being claimed not to have had legal authority or
capacity to enter into the Agreement or any agreement ancillary thereto;

then in any such case
none of the limitations set forth in Articles 6.5, 6.6 and 6.7 shall apply.

6.9                                 Events
after Closing. No Claim by Purchaser for any Breach shall
arise to the extent that the Claim arises as a result of (i) any change in the
accounting principles applied by the Company subsequent to Closing, or of (ii)
any changes in applicable laws or regulations after Closing or of (iii) a new
interpretation of existing laws by a court or other public authority in a
judgement or decision published after Closing.

6.10                           Payments
received. If the Seller has made a payment for damages and
the Purchaser or the Company simultaneously therewith or subsequently thereto
receives any benefit (tax, insurance or otherwise) other than from the Seller
which would not have been received but for the circumstance giving rise to the
Claim in respect of which the payment for damages was made by the Seller, the
Purchaser shall, once it or the

 6
 

 

Company has received the benefit, forthwith repay
to the Seller an amount equal to the lesser of the amount of such benefit and
the amount paid by the Seller.

6.11                          Claim
Procedure.

(a)                                 The
Purchaser shall give the Seller written notice (the “Indemnification
Notice”) of any facts and the circumstances giving rise to a Claim
within 30 days of the Purchaser’s becoming aware of the facts and circumstances
giving rise to such Claims. However, failure of the Purchaser to give such
notice within such 30-day period shall not relieve the Seller of its liability
with respect to such Claim except to the extent that Purchaser’s failure to
give notice within such period causes damages to Seller.

(b)                                If
the Claim relates to a claim or the commencement of an action or proceeding by
a Third Party against the Company and/or the Purchaser, then the Seller shall
have, upon request within sixty (60) days after receipt of the Indemnification
Notice (but not in any event after the settlement or compromise of such Claim),
the right to defend, at its own expense and by its own counsel, any such matter
involving the asserted liability of the Company and/or the Purchaser; provided,
however, that if the Company and/or the Purchaser determines that there is a
reasonable probability that a Claim may materially and adversely affect it, it
shall at its own discretion have the right to defend (with the participation of
the Seller, if the Seller so elects), compromise or settle such claim or suit,
provided however the Seller has been timely informed of settlement negotiations.
If the Seller shall decide that it will not defend, at its own expense and by
its own counsel, any such matter involving the asserted liability of the
Company and/or the Purchaser and the Company and/or the Purchaser shall incur
costs directly or indirectly relating to this decision of the Seller, the
Purchaser shall have full recourse against the Seller as to the costs incurred.

(c)                                 If
the Claim does not relate to a claim or the commencement of an action or
proceeding by a Third Party, the Seller shall have thirty (30) days after
receipt of the Indemnification Notice during which it shall have the right to
object to the subject matter and the amount of the Claim set forth in the
Indemnification Notice by delivering written notice thereof to the Purchaser.
If the Seller does not so object within such thirty-day period, it shall be
conclusively deemed to have agreed that it is obligated to indemnify Purchaser
for the matters set forth in the Indemnification Notice. If the Seller sends
notice to the Purchaser objecting to the matters set forth in the
Indemnification Notice, the Seller and the Purchaser shall use their best
efforts to settle the Claim. If the Seller and the Purchaser are unable to
settle the Claim, the matter shall be resolved in the manner set forth in
Article 12.2 of this Agreement.

 7
 

 

ARTICLE 7 – NON-COMPETITION

7.1.                              Blyth
and the Seller hereby undertake towards both the Purchaser and the Company that
they will not themselves or allow any of the companies of their group without
the prior written consent of the Purchaser,

(a)                                  use
the name “Kaemingk” or any abbreviation thereof or any combination including
such name, or the logo of the Company.

(b)                                 persuade
or cause, or attempt to persuade any employee or any distributor or commercial
agent of the Company to terminate his relationship with the Company, or employ
or engage any such person within 1 (one) year after Closing, or take any action
that may result in the impairment of the relationship between such employee or
distributor or commercial agent and the Company;

7.2.                             The
Purchaser and Van Tol hereby undertake towards the Seller that they will not
themselves or allow any of the companies of their group without the prior
written consent of the Seller,

(a)                                  persuade
or cause, or attempt to persuade any employee or any distributor or commercial
agent of Blyth or a company belonging to Blyth’s group to terminate his
relationship with Blyth or a company belonging to Blyth’s group, or employ or
engage any such person within 1 (one) year after Closing, or take any action
that may result in the impairment of the relationship between such employee or
distributor or commercial agent and Blyth or a company belonging to Blyth’s
group;

ARTICLE 8 – MISCELLANEOUS

8.1                                 Parties’
Costs. Each Party to this Agreement shall pay its own costs and
disbursements of and incidental to this Agreement and the sale and purchase of
the Shares, provided that all costs associated with the Notarial Transfer Deed
shall be borne by the Purchaser. The Company shall not pay any fees or other
costs of outside advisors in connection with the transactions contemplated
hereby.

8.2                                 Notices.
Each notice, demand or other communication given or made under this Agreement
shall be in writing and delivered or sent to the relevant Party at its address
or fax number set out below (or such other address or fax number as the
addressee has by five (5) days’ prior written notice specified to the other
Parties):

	
  To the Seller:

  	
  Blyth Holding B.V.

  
	
   

  	
  c/o Blyth, Inc.

  
	
   

  	
  One East Weaver
  Street

  
	
   

  	
  Greenwich, CT
  06831

  

 

 8
 

 

 

	
  

  	
  United States of
  America

  
	
   

  	
  Telephone No: +1
  203 552 6617

  
	
   

  	
  Facsimile No: +1
  203 552 4644

  
	
   

  	
  Attention:
  Marcia Pontius

  
	
   

  	
   

  
	
  With a copy to:

  	
  Baker & McKenzie, Attorneys at Law

  
	
   

  	
  Postbus 2720

  
	
   

  	
  1000 CS
  Amsterdam

  
	
   

  	
  The Netherlands

  
	
   

  	
  Telephone No:
  +31 20 55 17 555

  
	
   

  	
  Fascimile No:
  +31 20 626 79 49

  
	
   

  	
  Attention:
  Jeroen Hoekstra

  
	
   

  	
   

  
	
  To the Purchaser:

  	
  SMF Management Consultants

  
	
   

  	
  Dijkstraat 14,
  7121 ET Aalten,

  
	
   

  	
  The Netherlands

  
	
   

  	
  Telephone No: +
  31 543 47 31 51

  
	
   

  	
  Facsimile No: +
  31 543 47 34 68

  
	
   

  	
   

  
	
  With a copy to:

  	
  NautaDutilh N.V.

  
	
   

  	
  G.J. Rooijens

  
	
   

  	
  Weena 750

  
	
   

  	
  3014 DA
  Rotterdam

  
	
   

  	
  The Netherlands

  
	
   

  	
  Telephone No:
  +31 10 224 0272

  
	
   

  	
  Facsimile No:
  +31 10 224 0055

  

Any notice, demand or
other communication so addressed to the relevant Party shall be deemed to have
been delivered (a) if given or made by letter, when actually delivered to the
relevant address; and (b) if given or made by fax, when dispatched.

8.3                                 Waiver.
No failure or delay by the Purchaser in exercising any right, power or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. Without limiting the foregoing,
no waiver by the Purchaser of any breach by the Seller of any provision hereof
shall be deemed to be a waiver of any subsequent breach of that or any other
provision hereof.

8.4                                 Assignment.
This Agreement and the rights thereunder shall be assignable only by the
Purchaser.

8.5                                 Entire
Agreement. This Agreement (together with any documents referred to herein
or executed contemporaneously or at Closing by the Parties in connection
herewith) constitutes the whole agreement between the Parties and supersedes
any previous agreements or arrangements between them relating to the subject
matter of this Agreement and it is expressly declared that no variations of
this Agreement shall be effective unless made in writing and executed by the
Parties.

8.6                                 Continuity
of obligations. All the provisions of this Agreement shall remain in full

 9
 

 

force and effect
notwithstanding Closing (except insofar as they set out obligations that have
been fully performed at Closing).

8.7                                 Severability. If any provision or part of a provision of this Agreement shall be,
or be found by any authority or court of competent jurisdiction to be, invalid
or unenforceable, such invalidity or unenforceability shall not affect the
other provisions or parts of such provisions of this Agreement, all of which
shall remain in full force and effect.

8.8                                 Other Rights and Remedies. Any right of termination conferred upon the
Purchaser hereby shall be in addition to and without prejudice to all other
rights and remedies available to it (and, without prejudice to the generality
of the foregoing, shall not extinguish any right to damages to which the
Purchaser may be entitled in respect of the breach of this Agreement) and no
exercise or failure to exercise such a right of termination shall constitute a
waiver by the Purchaser of any such other right or remedy.

8.9                                 Further acts. Upon and after Closing the Seller and the Purchaser shall do and
execute or cause to be done and executed all such further acts, deeds,
documents and things as may be necessary to give effect to the terms of this
Agreement. 

8.10                           Merger Committee. The Parties have notified the Merger Committee
pursuant to the Fusiegedragsregels 2000 (Schedule
4).

8.11                           Interpretation. This Agreement shall constitute an allocation of risks between
the parties. The Parties deem the security they may derive from the provisions
of this Agreement essential.

8.12                           Waiver of Rights. To the extent permitted
by law, the Parties hereby waive their rights under Articles 6:228 through
6:230 and 6:265 through 6:272, respectively, of the Civil Code to rescind (ontbinden) or nullify (vernietigen) on the ground of mistake (dwaling) (which shall include a partial
amendment of this Agreement based upon an alleged mistake), or demand in legal
proceedings the rescission (ontbinding)
or nullification (vernietiging)
of this Agreement.

8.13                           Exclusivity of Remedies. The Purchaser hereby
confirms that with respect to Article 7:17 of the Dutch Civil Code, this
Agreement and the Warranties which are included herein, are Purchaser’s
expectancy with respect to this Agreement, as contemplated by Article 7:17.

8.14                           To the extent this is
reasonably required by the Seller, the Purchaser shall procure that the Company
shall without delay provide to the Seller such information and access to, and
copies of, the corporate books and records of each of the Company, and provide
such other assistance (e.g., by making available employees to provide
additional information and explanation
of any materials so provided) as may reasonably be requested by the Seller, as
being necessary or incidental to the Seller in properly fulfilling its
obligations pursuant to Tax laws and regulations or otherwise dealing with Tax
affairs in respect of the period prior to the Closing Date. If with respect to
the period prior to the Closing Date the Company is notified of a Tax audit, or
receives an assessment or other correspondence from the Tax authorities, the
Purchaser shall (and the Purchaser shall procure that the Company shall)
promptly inform the Seller, and the

 10
 

 

Seller and the Purchaser and
the Company shall consult with each other and seek agreement on the appropriate
course of action, taking into account the best interests of the Seller.

8.15                           Original Agreement. The Parties agree that the
Original Agreement will terminate immediately upon Closing, as the Company is
to be sold and will be transferred by the Seller to the Purchaser subject to
Closing. Parties acknowledge that each Party has fulfilled its obligations under
the Original Agreement and each Party hereby waives any right it may have under
the Original Agreement.

ARTICLE 9 – RESTRICTION ON ANNOUNCEMENTS

9.1                                 Each of the Parties hereto undertake that
prior to Closing and thereafter it will not (save as required by law) make any
announcement in connection with this Agreement, unless the other Party hereto
shall have given its written consent to such announcement (which consent may
not be unreasonably withheld and may be given either generally or in a specific
case or cases and may be subject to conditions), it being expressly understood
that Seller may disclose this Agreement in a Current Report on Form 8-K to be
filed with the Securities and Exchange Commission within four business days of
the execution of this Agreement and in such other forms as shall be required to
be filed with the Securities and Exchange Commission.

ARTICLE 10 – CONFIDENTIAL
INFORMATION

10.1                           Non-disclosure. The Parties undertake that they shall treat as strictly confidential
all Confidential Information received or obtained by them or their employees,
agents or advisers as a result of entering into or performing this Agreement
including information relating to the provisions of this Agreement, the
negotiations leading up to this Agreement, the subject matter of this Agreement
or the business or affairs of each of the Parties or any member of their group
and subject to the provisions of Article 10.2 that they will not at any time
hereafter make use of or disclose or divulge to any person any such
Confidential Information and shall use their best endeavours to prevent the
publication or disclosure of any such information.

10.2                           Exceptions. The restrictions contained in Article 10.1 shall not apply so as to
prevent the Parties from making any disclosure required by law or by any
securities exchange or supervisory or regulatory or governmental body pursuant
to rules to which the relevant Party is subject or from making any disclosure
to any professional adviser for the purposes of obtaining advice (provided
always that the provisions of this Article shall apply to and the Parties shall
procure that they apply to, and are observed in relation to, the use or
disclosure by such professional adviser of the information provided to him) nor
shall the restrictions apply in respect of any information which comes into the
public domain otherwise than by a breach of this Article by the Parties.

 11
 

 

ARTICLE 11 – GUARANTOR

Blyth as Guarantor.
Blyth hereby irrevocably and unconditionally guarantees (i) the due performance
by the Seller of its respective obligations under, and compliance by the Seller
with the terms of, this Agreement, and (ii) the full and prompt payment when
due of all obligations and liabilities of the Seller to the Purchaser under
this Agreement. The obligations of Blyth hereunder shall constitute a direct, primary and
unconditional liability to pay on demand to the Purchaser any sum or sums which
the Seller may be or become liable to pay hereunder without the need for any
claim or recourse on the part of the Purchaser against the Seller.

ARTICLE 12 – GOVERNING LAW AND JURISDICTION 

12.1                           Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of The Netherlands.

12.2                           Forum.
All disputes arising in connection with this Agreement, or further agreements
or contracts resulting thereof, shall be submitted to the competent court in
Amsterdam (subject to appeal as provided by law).

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IN
WITNESS WHEREOF this Agreement has been executed on the day
and year first above written.

	
  SELLER:

  
	
  BLYTH HOLDING
  B.V.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  By:

  
	
  Title:

  
	
   

  
	
   

  
	
  PURCHASER:

  
	
  SMF MANAGEMENT
  CONSULTANTS B.V.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  By: Neijenveste
  Holding B.V.

  
	
  Title: managing
  director

  
	
  By: Mr. J. van
  Tol

  
	
  Title: managing
  director

  
	
   

  
	
   

  
	
  GUARANTOR:

  
	
  BLYTH, INC.

  
	
   

  
	
   

  	
   

  
	
  By:

  
	
  Title:

  
	
   

  
	
   

  
	
  And exclusively
  for Article 7 (Non-Competition):

  
	
   

  
	
  JOHANNES VAN TOL

  

 

 13

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