Form F-3ASR - Automatic shelf registration statement of securities of well-known seasoned issuers

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As filed with the Securities and Exchange Commission on September 16, 2024

Registration No. 333-     ​

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form F-3

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933​

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Novartis AG (Exact name of Registrant as specified in its charter)​

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Novartis Capital Corporation (Exact name of Registrant as specified in its charter)

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Switzerland (State or other jurisdiction of incorporation or organization)​

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Delaware (State or other jurisdiction of incorporation or organization)

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Not Applicable (I.R.S. Employer Identification No.)​

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26-3086456 (I.R.S. Employer Identification No.)

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Lichtstrasse 35 4056 Basel, Switzerland [phone] (Address and telephone number of Registrant’s principal executive offices)

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One Health Plaza East Hanover, New Jersey 07936 [phone] (Address and telephone number of Registrant’s principal executive offices)

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Novartis Services, Inc.
US Corporate and Finance Legal
One Health Plaza
East Hanover, NJ 07936
[phone]

(Name, address and telephone number of agent for service)

Copies of all communications to:

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Karen L. Hale Christian Rehm, Ph.D. Novartis AG Lichtstrasse 35 CH-4056 Basel Switzerland [phone]

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John B. Meade Yasin Keshvargar Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 [phone]

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Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☒

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company. ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

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The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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PROSPECTUS

Novartis Capital Corporation​

Debt Securities​

Fully and Unconditionally Guaranteed by​

Novartis AG​

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We may offer debt securities from time to time in one or more series through this prospectus. The debt securities will be issued by Novartis Capital Corporation, a wholly-owned indirect subsidiary of Novartis AG, and will be fully and unconditionally guaranteed by Novartis AG.

We will provide the specific terms of the debt securities we offer in one or more supplements to this prospectus. You should read this prospectus and any related prospectus supplement or free writing prospectus carefully before you invest in our debt securities. Our debt securities may be denominated in U.S. dollars or in any other currencies, currency units or composite currencies as we may designate.

We may offer these debt securities through underwriters, agents or dealers or directly to institutional purchasers. The accompanying prospectus supplement or free writing prospectus will set forth the names of any underwriters or agents and any applicable commissions or discounts. The prospectus supplement or free writing prospectus will also set forth the proceeds we will receive from any sale of debt securities and the intended use thereof.

Investing in our debt securities involves certain risks. See “Risk Factors” on page 3 to read about certain factors you should consider before investing in our debt securities.

Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus or any accompanying prospectus supplement or free writing prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is September 16, 2024.

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​	​	​	Page				​
About this Prospectus	​	​	​	​	1	​	​
Where You Can Find More Information	​	​	​	​	1	​	​
Incorporation of Certain Documents by Reference	​	​	​	​	2	​	​
Presentation of Financial Information	​	​	​	​	2	​	​
Risk Factors	​	​	​	​	3	​	​
Forward-Looking Statements	​	​	​	​	3	​	​
Use of Proceeds	​	​	​	​	5	​	​
Novartis AG	​	​	​	​	6	​	​
Novartis Capital Corporation	​	​	​	​	7	​	​
Legal Ownership of Debt Securities	​	​	​	​	8	​	​
Description of Debt Securities	​	​	​	​	10	​	​
Tax Considerations	​	​	​	​	17	​	​
Plan of Distribution	​	​	​	​	18	​	​
Legal Matters	​	​	​	​	19	​	​
Experts	​	​	​	​	19	​	​
Limitations on Enforcement of U.S. Laws	​	​	​	​	20	​	​

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Neither we nor any underwriters or agents have authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus or in any related prospectus supplement or free writing prospectus prepared by or on behalf of us or to which we have referred you. Neither we nor any underwriters or agents have authorized anyone else to provide you with different or additional information. You should not assume that the information in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date on the front cover of these documents. We are not making an offer of these securities in any state or other jurisdiction where the offer or sale is not permitted.

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. This prospectus does not include all of the information contained in the registration statement of which it is a part. Under this shelf registration process, we may sell any combination of the debt securities described in this prospectus in one or more offerings.

This prospectus provides you with a general description of the debt securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering and the offered debt securities. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to that offering and the offered debt securities. Those terms and information may vary from the terms described in this prospectus. As a result, the summary description of the debt securities in this prospectus is subject to, and qualified by reference to, the descriptions of the particular terms of any debt securities contained in any related prospectus supplement or free writing prospectus. The prospectus supplement or free writing prospectus may also add, update or change information contained in this prospectus. You should read each of this prospectus, any related prospectus supplement and any free writing prospectus together with the additional information described under the headings “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference”. If there are any inconsistencies between the information contained in this prospectus and the information contained in any prospectus supplement or free writing prospectus, the information in the prospectus supplement or free writing prospectus, as applicable, will prevail.

Any debt securities issued by Novartis Capital Corporation will be fully and unconditionally guaranteed by Novartis AG, a stock corporation (Aktiengesellschaft) incorporated under the laws of Switzerland. The term “guarantor” refers to Novartis AG. Unless the context requires otherwise, the terms “we”, “our”, “us”, “Novartis” and similar words or phrases in this prospectus refer to Novartis AG and its consolidated affiliates. However, each Novartis affiliate is legally separate from all other Novartis affiliates and manages its business independently through its respective board of directors or similar supervisory body or other top local management body, if applicable.

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, we are required to file or furnish reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We have filed with the SEC a “shelf” registration statement (including amendments and exhibits to the registration statement) on Form F-3 under the Securities Act of 1933, as amended (the “Securities Act”). This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. We have omitted parts of the registration statement in accordance with the rules and regulations of the SEC. For more details about us and the securities that may be offered by this prospectus, you may examine the registration statement on Form F-3 and the exhibits filed with it at the website provided in the previous paragraph.

We maintain a corporate website at www.novartis.com. The reference to our website is an inactive textual reference only, and information contained therein or connected thereto is not incorporated into this prospectus or the registration statement of which it forms a part.

 

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The rules of the SEC allow us to incorporate by reference information in this prospectus, which means that we disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference in this prospectus is considered to be a part of this prospectus. Any statement made in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other subsequently filed document that is also incorporated or deemed to be incorporated by reference in this prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus. This prospectus incorporates by reference the documents listed below:

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our Annual Report on Form 20-F for the year ended December 31, 2023; and

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our Reports on Form 6-K furnished to the SEC on April 23, 2024 (only with respect to (i) the information under “R&D update — key developments from the first quarter” and “Novartis proposes Dr. Giovanni Caforio as Chair of the Board of Directors at the AGM in 2025” in Exhibit 99.1 thereto and (ii) Exhibit 99.2 thereto), July 18, 2024 (only with respect to (i) the information under “R&D update — key developments from the second quarter” and “2025 Annual General Meeting” in Exhibit 99.1 thereto and (ii) Exhibit 99.2 thereto) and August 8, 2024 (only with respect to the first two full paragraphs of the Media & Investor Release included therein).

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All subsequent annual reports on Form 20-F that we file with the SEC after the date hereof and prior to the termination or expiration of the registration statement of which this prospectus forms a part shall be incorporated by reference. We may incorporate by reference any reports on Form 6-K that we furnish to the SEC that we specifically identify in such form or in any applicable prospectus supplement as being incorporated by reference into this prospectus or such prospectus supplement after the date hereof and prior to the completion of an offering of securities under this prospectus.

You can obtain any of the filings incorporated by reference in this prospectus through us or from the SEC through the SEC’s website at www.sec.gov. Our filings with the SEC, including our Annual Reports on Form 20-F and Reports on Form 6-K and exhibits incorporated in and amendments to those reports, are also available free of charge on our website (www.novartis.com) as soon as reasonably practicable after they are filed with, or furnished to, the SEC. The reference to our website is an inactive textual reference only, and information contained therein or connected thereto is not incorporated into this prospectus or the registration statement of which it forms a part. We will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of any or all the reports or documents incorporated by reference in this prospectus at no cost, upon written or oral request to us at any of the following addresses:

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Novartis International AG Investor Relations P.O. Box CH-4002 Basel Switzerland Tel: [phone] E-mail: [e-mail]

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Novartis Services, Inc. Investor Relations One Health Plaza East Hanover, NJ 07936 USA Tel: [phone] E-mail: [e-mail]

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PRESENTATION OF FINANCIAL INFORMATION

We present our consolidated financial statements in U.S. dollars and in accordance with International Financial Reporting Standards® (“IFRS”) Accounting Standards as issued by the International Accounting Standards Board. When we refer to “$”, we mean U.S. dollars. Except where noted, all financial information is presented in accordance with IFRS.

 

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RISK FACTORS

Investing in our debt securities involves certain risks. You should read “Risk Factors” on pages 9 – 20 of our annual report on Form 20-F for the year ended December 31, 2023, which is incorporated by reference in this prospectus, or similar sections in subsequent filings incorporated by reference in this prospectus, for a discussion of certain factors you should consider before investing in our debt securities. You should also read any risks described in any prospectus supplement or free writing prospectus related to a specific offering of our debt securities.

FORWARD-LOOKING STATEMENTS

This prospectus and the information incorporated by reference in this prospectus contain certain forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act and the United States Private Securities Litigation Reform Act of 1995, as amended. Other written materials filed with or furnished to the SEC by Novartis, as well as other written and oral statements made to the public, may also contain forward-looking statements. Forward-looking statements can be identified by words such as “potential”, “expected”, “will”, “planned”, “pipeline”, “outlook”, “may”, “could”, “would”, “anticipate”, “seek” or similar terms, or by express or implied discussions regarding potential new products, potential new indications for existing products, or regarding potential future revenues from any such products or indications; or regarding the potential outcome, or financial or other impact on Novartis, of any of the transactions described; or regarding the potential impact of share buybacks; or regarding potential future sales or earnings of Novartis or potential shareholder returns; or regarding potential future credit ratings of Novartis; or by discussions of strategy, plans, expectations or intentions. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth or implied in the forward-looking statements. You should not place undue reliance on forward-looking statements.

In particular, our expectations could be affected by, among other things:

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Uncertainties regarding the success of key products, commercial priorities and strategy;

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Uncertainties in the research and development of new healthcare products, including clinical trial results and additional analysis of existing clinical data, and the use of new and disruptive technologies, including artificial intelligence (AI);

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Global trends toward healthcare cost-containment, including new laws and regulations, ongoing government, payer and general public pricing and reimbursement pressures and requirements for increased pricing transparency;

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Our ability to realize the strategic benefits, operational efficiencies or opportunities expected from our external business opportunities;

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Our ability to realize the intended benefits of our separation of Sandoz into a new publicly traded standalone company;

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Our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products that commenced in prior years and is expected to continue this year;

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Our performance on environmental, social and governance matters;

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Uncertainties in the development or adoption of potentially transformational digital technologies and business models;

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Uncertainties regarding potential significant breaches of information security or disruptions of our information technology systems;

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Uncertainties surrounding the implementation of our new IT projects and systems;

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Our reliance on outsourcing key business functions to third parties;

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Uncertainties regarding actual or potential legal proceedings, including, among others, litigation and other legal disputes with respect to our recent transactions, product liability litigation, litigation and investigations regarding sales and marketing practices, intellectual property disputes and government investigations generally;

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Safety, quality, data integrity or manufacturing issues;

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Our ability to identify, attract, integrate, develop and retain key personnel and qualified individuals for critical roles;

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Regulatory actions or delays or government regulation generally, including potential regulatory actions or delays with respect to the development of our products;

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Our ability to comply with evolving regulatory requirements and meet societal expectations concerning environmental, social and governance matters;

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Our ability to comply with cybersecurity and data privacy laws and regulations, and uncertainties regarding potential significant breaches of data privacy;

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Our ability to adapt to major geopolitical and macroeconomic developments, including the effects of and efforts to mitigate pandemic diseases such as COVID-19, and the impact of the war in certain parts of the world;

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Uncertainties involved in predicting shareholder returns;

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Uncertainties regarding the effects of recent and anticipated future changes in tax laws and their application to us;

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Uncertainties regarding future global exchange rates; and

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Uncertainties regarding our supply chain and future demand for our products.

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Some of these and other risks and factors are discussed in more detail in our current Form 20-F on file with the SEC, including under “Part I — Item 3. Key Information — Item 3.D. Risk factors”, “Part I — Item 4. Information on the Company” and “Part I — Item 5. Operating and Financial Review and Prospects”. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this prospectus or in the documents incorporated herein by reference as anticipated, believed, estimated or expected. We provide the information in this prospectus, any applicable prospectus supplement or free writing prospectus and any document incorporated herein by reference as of the relevant filing date. We do not intend, and do not assume any obligation, to update any information or forward-looking statements set out in any such documents as a result of new information, future events or otherwise.

 

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USE OF PROCEEDS

Unless we tell you otherwise in a prospectus supplement or free writing prospectus, we will use the net proceeds from the sale of the debt securities described in this prospectus for our general corporate purposes outside of Switzerland, which may include the refinancing of existing short- and long-term indebtedness or investing the net proceeds in marketable securities as part of our liquidity management process.

 

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NOVARTIS AG

Novartis AG was incorporated on February 29, 1996 under the laws of Switzerland as a stock corporation (Aktiengesellschaft) with an indefinite duration. On December 20, 1996, our predecessor companies, Ciba-Geigy AG and Sandoz AG, merged into this new entity, creating Novartis. Novartis AG is domiciled in and governed by the laws of Switzerland. Its registered office is located at Novartis AG, Lichtstrasse 35, CH-4056 Basel, Switzerland, and its telephone number is [phone].

Novartis is an innovative medicines company. Our purpose is to reimagine medicine to improve and extend people’s lives. Our strategy is to focus on high-value, innovative medicines that alleviate society’s greatest disease burdens through technology leadership in R&D and novel access approaches. To support our strategy, we have clear focus areas where we commit most of our time, energy and resources. These core therapeutic areas are cardiovascular, renal and metabolic; immunology; neuroscience; and oncology.

In 2023, Novartis achieved net sales from continuing operations of USD 45.4 billion, and net income from continuing operations amounted to USD 8.6 billion. Headquartered in Basel, Switzerland, we employed 76,057 full-time equivalent employees as of December 31, 2023. Our products are sold in approximately 130 countries around the world.

Beginning in September 2023, we reorganized our operations into the following five organizational units:

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Biomedical Research is our innovation engine, focused on creating new ways of fighting disease and turning scientific breakthroughs into new medicines with the potential to change lives.

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Development oversees the development of potential new medicines through clinical trials to confirm their safety and efficacy, and steers the way to regulatory approval for use by patients.

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Operations manufactures and delivers our medicines to customers, while also overseeing the global functions of IT, procurement and real estate services.

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The two commercial units, US and International, focus on their respective geographic areas. They work with customers to provide innovative medicines and services that improve treatment options and raise the quality of care for patients.

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Our shares are listed on the SIX Swiss Exchange under the symbol “NOVN” and on the New York Stock Exchange (NYSE) in the form of American Depositary Receipts (ADRs) representing American Depositary Shares (ADSs) under the symbol “NVS”.

 

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NOVARTIS CAPITAL CORPORATION

Novartis Capital Corporation is a wholly-owned indirect subsidiary of Novartis AG and was incorporated as a corporation under the laws of Delaware on July 23, 2008. It exists for the purpose of issuing debt securities, the proceeds of which will be invested by it in marketable securities or advanced to, or otherwise invested in, subsidiaries or affiliates of Novartis AG. The principal office of Novartis Capital Corporation is located at One Health Plaza, East Hanover, New Jersey 07936, USA.

 

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LEGAL OWNERSHIP OF DEBT SECURITIES

“Street Name” and Other Indirect Holders

We generally will not recognize investors who hold debt securities in accounts at banks or brokers as legal holders of those debt securities. Holding securities in accounts at banks or brokers is called holding in “street name”. If an investor holds debt securities in street name, we recognize only the bank or broker or the financial institution the bank or broker uses to hold the debt securities. These intermediary banks, brokers and other financial institutions pass along principal, interest and other payments on the debt securities, either because they agree to do so in their customer agreements or because they are legally required to do so. If you hold debt securities in street name, you should check with your own institution to find out:

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how it handles payments and notices with respect to securities;

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whether it imposes fees or charges;

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how it would handle voting if ever required;

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how and when you should notify it to exercise on your behalf any rights or options that may exist under the debt securities;

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whether and how you can instruct it to send you securities registered in your own name so you can be a direct holder as described below; and

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how it would pursue rights under the debt securities if there were a default or other event triggering the need for holders to act to protect their interests.

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Registered Holders

Our obligations, as well as the obligations of the trustee and those of any third parties employed by us or the trustee, extend only to persons who are registered as holders of debt securities. As noted above, we do not have obligations directly to you if you hold in street name or through other indirect means, either because you choose to hold debt securities in that manner or because the debt securities are issued in the form of global securities as described below. For example, once we make payment to the registered holder, we have no further responsibility for the payment even if that holder is legally required to pass the payment along to you but does not do so.

Global Securities

A global security is a special type of indirectly held security. If we choose to issue debt securities in the form of global securities, the ultimate beneficial owners of the debt securities will be indirect holders. We do this by requiring that the global security be registered in the name of a financial institution we select and by requiring that the debt securities represented by the global security not be registered in the name of any other holder except in the special situations described below. The financial institution that acts as the sole registered holder of the global security is called the depositary. Any person wishing to own a debt security may do so indirectly through an account with a broker, bank or other financial institution that in turn has an account with the depositary. The applicable prospectus supplement or free writing prospectus will indicate whether your series of debt securities will be issued only as global securities.

Transfers of debt securities represented by the global security will be made only on the records of the depositary or its nominee by transferring such debt securities from the account of one broker, bank or financial institution to the account of another broker, bank or financial institution. These transfers are made electronically only and are also known as book-entry transfers. Securities in global form are sometimes also referred to as being in book-entry form.

As an indirect holder, your rights relating to a global security will be governed by the account rules of your broker, bank or financial institution and of the depositary, as well as general laws relating to securities transfers. We will not recognize you as a holder of debt securities and instead will deal only with the depositary that holds the global security.

You should be aware that if debt securities are issued only in the form of a global security:

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except in very limited circumstances described below, you will not have any right to have debt securities registered in your own name;

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you cannot receive physical certificates for your interest in the debt securities;

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you will be a street name holder and must look to your own broker, bank or financial institution for payments on the debt securities and protection of your legal rights relating to the debt securities;

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you may not be able to sell interests in the debt securities to some insurance companies and other institutions that are required by law to own securities in the form of physical certificates;

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the depositary’s policies will govern payments, transfers, exchanges and other matters relating to your indirect interest in the global security. We and the trustee will have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in the global security. We and the trustee also will not supervise the depositary in any way; and

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the depositary will require that indirect interests in the global security be purchased or sold within its system using same-day funds for settlement.

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In a few special circumstances described below, the global security will terminate and the indirect interests in it will be exchanged for registered debt securities represented by physical certificates. After that exchange, the choice of whether to hold debt securities in registered form or in street name will be up to you. You must consult your broker, bank or financial institution to find out how to have your interests in debt securities transferred to your name, so that you will be a registered holder.

Unless we specify otherwise in the applicable prospectus supplement or free writing prospectus, the special circumstances for termination of a global security are:

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when the depositary notifies us that it is unwilling or unable to continue as depositary and we do not or cannot appoint a successor depositary within 90 days;

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the depositary ceases to be a clearing agency registered under the Exchange Act and we do not appoint a successor depositary within 90 days;

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an event of default has occurred and is continuing and beneficial owners representing a majority in principal amount of the applicable series of debt securities have advised the depositary to cease acting as the depositary; or

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we decide we do not want to have the debt securities of that series represented by a global security.

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The prospectus supplement or free writing prospectus may also list additional circumstances for terminating a global security that would apply only to the particular series of debt securities covered by the applicable prospectus supplement or free writing prospectus. When a global security terminates, the depositary (and not us or the trustee) is responsible for deciding the names of the institutions that will be the initial registered holders.

The Term “Holder” as Used in this Prospectus and Elsewhere

In the descriptions of the debt securities included in this prospectus and any prospectus supplement or free writing prospectus, when we refer to the “holder” of a given debt security as being entitled to certain rights or payments, or being permitted to take certain actions, we are in all cases referring to the registered holder of the debt security.

While you would be the registered holder if you held a certificated security registered in your name, it is likely that the holder will actually be either the broker, bank or other financial institution where you have your street name account, or, in the case of a global security, the depositary. If you are an indirect holder, you will need to coordinate with the institution through which you hold your interest in a debt security in order to determine how the provisions involving holders described in this prospectus and any prospectus supplement or free writing prospectus will actually apply to you. For example, if the debt security in which you hold a beneficial interest in street name can be repaid at the option of the holder, you cannot exercise the option yourself by following the procedures described in the applicable prospectus supplement or free writing prospectus. Instead, you would need to cause the institution through which you hold your interest to take those actions on your behalf. Your institution may have procedures and deadlines different from or additional to those described in the applicable prospectus supplement or free writing prospectus relating to the debt security.

 

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DESCRIPTION OF DEBT SECURITIES

This section describes the general terms that may apply to any debt securities that we may offer pursuant to this prospectus. The specific terms of any offered debt securities, and the extent to which the general terms described in this section apply to those debt securities, will be described in the related prospectus supplement or free writing prospectus at the time of the offer.

General

As used in this prospectus, “debt securities” means the debentures, notes, bonds, guarantees and other evidences of indebtedness that Novartis Capital Corporation issues, Novartis AG fully and unconditionally guarantees and the trustee authenticates and delivers under the indenture (as defined below). The debt securities will be direct unsecured obligations of Novartis Capital Corporation and will rank equally and ratably without preference among themselves and at least equally with all of the other unsecured and unsubordinated indebtedness of Novartis Capital Corporation. The guarantees will be direct unsecured obligations of Novartis AG and will rank equally and ratably without preference among themselves and at least equally with all other unsecured and unsubordinated guarantees and indebtedness of Novartis AG.

The debt securities will be issued in one or more series under an indenture (the “indenture”), dated as of February 10, 2009, among Novartis Capital Corporation, Novartis Securities Investment Ltd. and Novartis Finance S.A., as issuers, HSBC Bank USA, National Association, as trustee, and Novartis AG, as guarantor. Even though they are issuers under the indenture, Novartis Securities Investment Ltd. and Novartis Finance S.A. will not be offering any of the debt securities being registered on the Registration Statement on Form F-3 of which this prospectus forms a part. The indenture is qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

This prospectus briefly outlines the provisions of the indenture and the description included herein is qualified in its entirety by reference to the indenture. The terms of the indenture include both those stated in the indenture and those made part of the indenture by the Trust Indenture Act. The indenture has been filed as an exhibit to the registration statement of which this prospectus forms a part, and you should read the indenture for provisions that may be important to you, as well as any supplemental indentures and/or officer’s certificates to the extent such documents describe terms applicable to a series of debt securities that differ from or are additional to the terms of the indenture.

The indenture does not contain any covenants or other provisions designed to protect holders of the debt securities against a reduction in the creditworthiness of Novartis AG or Novartis Capital Corporation in the event of a highly leveraged transaction or that would prohibit other transactions that might adversely affect holders of the debt securities.

Issuances in Series

The indenture does not limit the amount of debt securities that may be issued. The debt securities may be issued in one or more series with the same or various maturities, at a price of 100% of their principal amount or at a premium or a discount. Not all debt securities of any one series need be issued at the same time, and, unless otherwise provided, any series may be reopened, without the consents of the holders of debt securities of that series, for issuances of additional debt securities of that series. Except in the limited circumstances described below under “— Covenants — Limitation on Liens”, the debt securities will not be secured by any property or assets of Novartis AG or Novartis Capital Corporation.

The terms of any authorized series of debt securities will be described in a prospectus supplement or free writing prospectus. These terms will include some or all of the following:

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the title, aggregate principal amount and denominations of the debt securities;

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the date or dates on which principal will be payable;

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the percentage of the principal amount at which the debt securities will be issued and whether the debt securities will be “original issue discount” securities for U.S. federal income tax purposes. If original issue discount debt securities are issued (generally, securities that are issued at a substantial

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discount below their principal amount), the special U.S. federal income tax and other considerations of a purchase of original issue discount debt securities will be described;

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the rate or rates, which may be fixed or variable, at which the debt securities will bear interest;

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the interest payment dates;

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any optional or mandatory redemption terms;

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whether any sinking fund is required;

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the currency in which the debt securities will be denominated or principal, premium or interest will be payable, if other than U.S. dollars;

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whether the debt securities are to be issued as individual certificates to each holder or in the form of global certificates held by a depositary on behalf of beneficial owners;

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information describing any book-entry features;

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the names and duties of any co-trustees, depositaries, authenticating agents, paying agents, transfer agents or registrars for any series;

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the applicability of the defeasance and covenant defeasance provisions described in this prospectus, or any modifications of those provisions;

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any deletions from, modifications of or additions to the events of default or covenants with respect to the debt securities; and

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any other terms, conditions, rights or preferences of the debt securities.

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The prospectus supplement or free writing prospectus relating to any series of debt securities may add to or change statements contained in this prospectus. The applicable prospectus supplement or free writing prospectus may also include, if applicable, a discussion of certain U.S. federal income tax and Swiss income tax considerations.

Novartis AG Guarantees

Debt securities issued by Novartis Capital Corporation will be fully and unconditionally guaranteed by Novartis AG. If for any reason Novartis Capital Corporation does not make any required payment in respect of its debt securities when due, whether on the normal due date, on acceleration, redemption or otherwise, Novartis AG will cause the payment to be made to, or to the order of, the trustee. The holder of a guaranteed debt security will be entitled to payment under the applicable guarantee of Novartis AG without taking any action whatsoever against Novartis Capital Corporation.

Payment and Transfer

The debt securities will be issued only as registered securities, which means that the name of the holder will be entered in a register that will be kept by the trustee or another agent appointed by us. Unless stated otherwise in a prospectus supplement or free writing prospectus, and except as described under “— Book-Entry System” below, payments of principal, interest and additional amounts (as described in the applicable prospectus supplement or free writing prospectus), if any, will be made at the office of the paying agent or agents named in the applicable prospectus supplement or free writing prospectus or by check mailed to registered holders at the address appearing in the register.

Unless other procedures are described in a prospectus supplement or free writing prospectus and except as described under “— Book-Entry System” below, you will be able to transfer registered debt securities at the office of the transfer agent or agents named in the applicable prospectus supplement or free writing prospectus. You may also exchange registered debt securities at the office of the transfer agent for an equal aggregate principal amount of registered debt securities of the same series having the same maturity date, interest rate and other terms as long as the debt securities are issued in authorized denominations.

Neither we nor the trustee will impose any service charge for any transfer or exchange of a debt security; however, we may ask you to pay any taxes or other governmental charges in connection with a transfer or exchange of debt securities.

 

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Consolidation, Merger, Sale, Lease or Conveyance

Novartis AG and Novartis Capital Corporation have agreed in the indenture not to consolidate with or merge with or into any other person or sell, lease, convey or otherwise dispose of all or substantially all of their respective properties and assets to any person (except that Novartis Capital Corporation may merge with or into Novartis AG and Novartis AG may merge with or into Novartis Capital Corporation), unless:

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Novartis AG or Novartis Capital Corporation, as the case may be, is the continuing person, or the successor expressly assumes by supplemental indenture their respective obligations under the indenture;

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the continuing person is organized and validly existing under the laws of (i) if the continuing person is a successor to Novartis Capital Corporation, Delaware or Switzerland, (ii) if the continuing person is a successor to Novartis AG, the United States or Switzerland or (iii) in any case, a jurisdiction that is a member country of the Organization for Economic Cooperation and Development (or any successor) and, if it is not organized and validly existing under the laws of (x) in the case of Novartis Capital Corporation, Delaware, (y) in the case of Novartis AG, the United States or (z) in any case, Switzerland, the continuing person agrees by supplemental indenture to be bound by an additional amounts covenant comparable to that described in the applicable prospectus supplement or free writing prospectus with respect to taxes imposed in the continuing person’s jurisdiction of organization (in which case the continuing person will benefit from a redemption option for tax reasons comparable to that described in the applicable prospectus supplement or free writing prospectus);

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immediately after the transaction, no default or event of default under the debt securities has occurred and is continuing; and

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Novartis AG or Novartis Capital Corporation, as applicable, delivers to the trustee an officer’s certificate and, if neither Novartis AG nor Novartis Capital Corporation, as applicable, is the continuing person, an opinion of counsel, in each case stating, among other things, that the transaction and the supplemental indenture, if required, comply with these provisions and the indenture.

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Covenants

Limitation on Liens

Novartis Capital Corporation and Novartis AG have agreed in the indenture, for so long as any debt securities are outstanding, not to create or have outstanding any lien upon the whole or any part of its assets, present or future (including any uncalled capital), in order to secure any existing or future relevant indebtedness (as this term is defined below) or to secure any guarantee or indemnity in respect thereof without in any such case at the same time securing the debt securities equally and ratably with such relevant indebtedness (or any guarantee or indemnity in respect thereof) or creating such other security approved by Novartis Capital Corporation and/or Novartis AG (as the case may be) and the holders of a majority in principal amount of all affected series of debt securities, voting as one class.

The restrictions on liens will not apply to:

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liens arising by operation of law; and

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liens on the assets of any person existing at the time such person is merged with or into or consolidated with Novartis AG.

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For purposes of the limitation on liens covenant, the term “relevant indebtedness” means any loan or other indebtedness in the form of, or represented or evidenced by, bonds, debentures, notes or other securities that are or are capable of being quoted, listed or traded on any stock exchange or in any securities market or over-the-counter market. For purposes of the limitation on liens covenant, “assets” refers to assets of Novartis Capital Corporation and Novartis AG, respectively, and does not include the assets of their respective subsidiaries.

Additional Covenants

We may be subject to additional covenants, including restrictive covenants in respect of one or more particular series of debt securities. Such additional covenants will be set forth in the applicable prospectus

 

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supplement or free writing prospectus and, to the extent necessary, in the supplemental indenture, officer’s certificate and/or board resolution relating to such series of debt securities.

Events of Default

The events of default with respect to a series of debt securities will be set forth in the applicable prospectus supplement or free writing prospectus and, to the extent necessary, in the supplemental indenture, officer’s certificate and/or board resolution relating to such series of debt securities.

For purposes of the definition of “event of default”, the term “indebtedness” means any indebtedness for monies borrowed or raised including, without limitation, any debenture, note, bond or like security.

An event of default with respect to a particular series of debt securities will not necessarily constitute an event of default with respect to any other series of debt securities.

The trustee may withhold notice to the holders of debt securities of any default (except in the payment of principal, premium or interest) if it, in good faith, considers such withholding of notice to be in the best interests of the holders. A default is any event which is an event of default described above or would be an event of default but for the giving of notice or the passage of time.

If an event of default occurs and continues, the trustee or the holders of the aggregate principal amount of the debt securities specified below may require us to repay immediately, or accelerate:

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the entire principal of the debt securities of such series; or

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if the debt securities are original issue discount securities, such portion of the principal as may be described in the applicable prospectus supplement or free writing prospectus.

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If the event of default occurs because of a default in a payment of principal or interest on the debt securities of any series, then the trustee or the holders of at least 25% of the aggregate principal amount of debt securities of that series can accelerate that series of debt securities. If the event of default occurs because of a failure to perform any other covenant in the indenture or any covenant for the benefit of one or more, but not all, of the series of debt securities, then the trustee or the holders of at least 25% of the aggregate principal amount of debt securities of all series affected, voting as one class, can accelerate all of the affected series of debt securities. If the event of default occurs because of bankruptcy proceedings, then all of the debt securities under the indenture will be accelerated automatically. Therefore, except in the case of a default on a payment of principal or interest on the debt securities of your series or a default due to our bankruptcy or insolvency, it is possible that you may not be able to accelerate the debt securities of your series because of the failure of holders of other series to take action.

The holders of a majority of the aggregate principal amount of the debt securities of all affected series, voting as one class, can rescind this accelerated payment requirement or waive any past default or event of default or allow noncompliance with any provision of the indenture. However, they cannot waive a default in payment of principal of, premium, if any, or interest on any of the debt securities when due otherwise than as a result of acceleration.

After an event of default, the trustee must exercise the same degree of care a prudent person would exercise under the circumstances in the conduct of her or his own affairs. Subject to these requirements, the trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any holders, unless the holders offer the trustee reasonable indemnity. If they provide this reasonable indemnity, the holders of a majority in principal amount of all affected series of debt securities, voting as one class, may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any power conferred upon the trustee, for any series of debt securities. However, the trustee may refuse to follow any direction that conflicts with law or the indenture or is unduly prejudicial to the rights of other holders.

No holder will be entitled to pursue any remedy with respect to the indenture unless the trustee fails to act for 60 days after it is given:

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notice of default by that holder;

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•

a written request to enforce the indenture by the holders of not less than 25% in principal amount of all outstanding debt securities of any affected series; and

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an indemnity to the trustee, satisfactory to the trustee;

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and during this 60-day period the holders of a majority in principal amount of all outstanding debt securities of such affected series do not give a direction to the trustee that is inconsistent with the enforcement request. These provisions will not prevent any holder of debt securities from enforcing payment of the principal of (and premium, if any) and interest on the debt securities at the relevant due dates.

If an event of default with respect to a series of debt securities occurs and is continuing, the trustee will mail to the holders of those debt securities a notice of the event of default within 90 days after it occurs. However, except in the case of a default in any payment in respect of a series of debt securities, the trustee shall be protected in withholding notice of an event of default if it determines in good faith that this is in the interests of the holders of the relevant debt securities.

Modification of the Indenture

In general, we may modify our rights and obligations and those of the holders under the indenture if the holders of a majority in aggregate principal amount of the outstanding debt securities of each series affected by the modification consent to such modification. However, the indenture provides that, unless each affected holder agrees, an amendment cannot:

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make any adverse change to any payment term of a debt security such as extending the maturity date, extending the date on which we have to pay interest or make a sinking fund payment, reducing the interest rate, reducing the amount of principal or additional amounts payable, changing the currency in which we have to make any payment of principal, premium or interest, modifying any redemption or repurchase right, or right to convert or exchange any debt security, to the detriment of the holder and impairing any right of a holder to bring suit for payment;

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waive any payment default;

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reduce the percentage of the aggregate principal amount of debt securities needed to make any amendment to the indenture or to waive any covenant or default; or

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make any other change to the amendment provisions of the indenture, except to increase any percentage or to provide that certain other provisions of the indenture cannot be modified or waived without the consent of the holders of each outstanding debt security affected thereby.

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However, if Novartis Capital Corporation, Novartis AG and the trustee agree, the indenture may be amended without notifying any holders or seeking their consent for any of the following purposes:

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to cure any ambiguity, defect or inconsistency in the indenture; provided that such amendment or supplement shall not materially and adversely affect the interests of the holders;

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to comply with sections of the indenture governing when Novartis AG or Novartis Capital Corporation may merge or consolidate or sell, lease, convey or otherwise dispose of all or substantially all of its properties and assets;

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to comply with any requirements of the SEC in connection with the qualification of the indenture under the Trust Indenture Act;

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to evidence and provide for the acceptance by a successor trustee of appointment under the indenture with respect to the debt securities of any or all series;

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to establish the form or forms or terms of the debt securities of any series or of the coupons appertaining to such debt securities as permitted under the indenture;

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to provide for uncertificated debt securities and to make all appropriate changes for such purpose;

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to provide for a further guarantee from a third party on outstanding debt securities of any series and the debt securities of any series that may be issued under the indenture;

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to change or eliminate any provision of the indenture; provided that any such change or elimination will become effective only when there are no outstanding debt securities of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision;

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to supplement any of the provisions of the indenture to such extent as will be necessary to permit or facilitate the defeasance and discharge of any series of debt securities pursuant to the indenture; provided that any such action will not adversely affect the interests of the holders of such or any other series of debt securities in any material respect; or

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to make any change that does not materially and adversely affect the rights of any holder of the debt securities.

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Defeasance

The term defeasance means discharge from some or all of the obligations under the indenture. Subject to the requirements of the indenture, if we deposit with the trustee sufficient cash or government securities to pay the principal, interest, any premium and any other sums due to the stated maturity date or a redemption date of the debt securities of a particular series, then at our option:

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we will be discharged from our respective obligations with respect to the debt securities of such series; or

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we will no longer be under any obligation to comply with the restrictive covenants, if any, contained in the indenture and any supplemental indenture or board resolution with respect to the debt securities of such series, and the events of default relating to failures to comply with covenants will no longer apply to us.

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If this happens, the holders of the debt securities of the affected series will not be entitled to the benefits of the indenture except for registration of transfer and exchange of debt securities and replacement of lost, stolen or mutilated debt securities. Instead, the holders will only be able to rely on the deposited funds or obligations for payment.

Novartis Capital Corporation must deliver to the trustee an opinion of counsel to the effect that the deposit and related defeasance would not cause the holders of the debt securities to recognize income, gain or loss for U.S. federal income tax purposes. Novartis Capital Corporation may, in lieu of an opinion of counsel, deliver a ruling to such effect received from or published by the U.S. Internal Revenue Service.

Book-Entry System

Debt securities may be issued under a book-entry system in the form of one or more global securities. The global securities will be registered in the name of a depositary or its nominee and deposited with that depositary or its custodian. Unless stated otherwise in the applicable prospectus supplement or free writing prospectus, The Depository Trust Company, New York, New York, or DTC, will be the depositary if a depositary is used.

DTC has advised us as follows:

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DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act;

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DTC was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions, such as through transfers and pledges, among its participants in such securities through electronic book-entry changes to accounts of its participants, thereby eliminating the need for physical movement of securities certificates;

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DTC’s participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC;

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access to DTC’s book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly; and

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the DTC rules applicable to its participants are on file with the SEC.

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According to DTC, the foregoing information with respect to DTC has been provided to the financial community for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind.

Following the issuance of a global security in registered form, the depositary will credit the accounts of its participants with the debt securities upon our instructions. Only persons who hold directly or indirectly through financial institutions that are participants in the depositary can hold beneficial interests in the global securities. Since the laws of some jurisdictions require certain types of purchasers to take physical delivery of such securities in definitive form, you may encounter difficulties in your ability to own, transfer or pledge beneficial interests in a global security.

So long as the depositary or its nominee is the registered owner of a global security, we and the trustee will treat the depositary as the sole owner or holder of the debt securities for purposes of the indenture. Therefore, except as set forth below, you will not be entitled to have debt securities registered in your name or to receive physical delivery of certificates representing the debt securities. Accordingly, you will have to rely on the procedures of the depositary and the participant in the depositary through whom you hold your beneficial interest in order to exercise any rights of a holder under the indenture. We understand that under existing practices, the depositary would act upon the instructions of a participant or authorize that participant to take any action that a holder is entitled to take.

We will make all payments of principal, interest and additional amounts (as described in the applicable prospectus supplement or free writing prospectus), if any, on the debt securities to the depositary. It is expected that the depositary will then credit participants’ accounts proportionately with these payments on the payment date and that the participants will in turn credit their customers’ accounts in accordance with their customary practices. Neither we nor the trustee will be responsible for making any payments to participants or customers of participants or for maintaining any records relating to the holdings of or payments to participants and their customers, and you will have to rely on the procedures of the depositary and its participants.

Global securities are generally not transferable. Physical certificates will be issued to beneficial owners in lieu of a global security only in the special circumstances described in the sixth paragraph under the heading “Legal Ownership of Debt Securities — Global Securities”.

Information Concerning the Trustee

HSBC Bank USA, National Association is the trustee under the indenture. The trustee will be required to perform only those duties that are specifically set forth in the indenture, except when a default has occurred and is continuing with respect to the debt securities. After a default, the trustee must exercise the same degree of care that a prudent person would exercise under the circumstances in the conduct of her or his own affairs. Subject to these requirements, the trustee will be under no obligation to exercise any of the powers vested in it by the indenture at the request of any holder of debt securities unless the holder offers the trustee indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by exercising those powers.

Governing Law

The debt securities, the related guarantees and the indenture will be governed by and construed in accordance with the laws of the State of New York.

 

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TAX CONSIDERATIONS

The applicable prospectus supplement or free writing prospectus will describe certain tax considerations in connection with the acquisition, ownership and disposal of the particular series of debt securities being offered thereby.

 

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PLAN OF DISTRIBUTION

We may sell the debt securities through agents, underwriters, dealers or directly to purchasers, through any combination of the foregoing methods or through any other method permitted by applicable law.

Our agents may solicit offers to purchase the debt securities.

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We will name any agent involved in offering or selling the debt securities, and any commissions that we will pay to the agent, in the applicable prospectus supplement or free writing prospectus.

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Unless we indicate otherwise in the relevant prospectus supplement or free writing prospectus, our agents will act on a best efforts basis for the period of their appointment.

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Our agents may be deemed to be underwriters under the Securities Act of any of our debt securities that they offer or sell.

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We may use an underwriter or underwriters in the offer or sale of the debt securities.

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If we use an underwriter or underwriters, we will execute an underwriting agreement with the underwriter or underwriters at the time that we reach an agreement for the sale of the debt securities.

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We will include the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the terms of the transactions, including the compensation the underwriters and dealers will receive, in the relevant prospectus supplement or free writing prospectus.

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The underwriters will use the relevant prospectus supplement or free writing prospectus to sell the debt securities.

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If we use an underwriter or underwriters, the underwriter or underwriters will acquire the debt securities for their own account and may resell the debt securities in one or more transactions, including negotiated transactions. These sales will be made at a fixed price or at varying prices determined at the time of the sale.

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We may use one or more dealers to sell the debt securities.

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If we use a dealer, we, as principal, will sell the debt securities to the dealer.

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The dealer will then sell the debt securities to the public at varying prices that the dealer will determine at the time it sells the debt securities.

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We will include the name of the dealer and the terms of our transactions with the dealer in the relevant prospectus supplement or free writing prospectus.

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We may solicit directly offers to purchase the debt securities, and we may directly sell the debt securities to institutional or other investors. We will describe the terms of our direct sales in the relevant prospectus supplement or free writing prospectus.

We may indemnify agents, underwriters and dealers against certain liabilities, including liabilities under the Securities Act. Our agents, underwriters and dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us or our subsidiaries and affiliates in the ordinary course of business.

We may authorize our agents and underwriters to solicit offers by certain institutions to purchase the relevant securities at the public offering price under delayed delivery contracts.

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If we use delayed delivery contracts, we will disclose that we are using them in the relevant prospectus supplement or free writing prospectus and will tell you when we will demand payment and delivery of the debt securities under the delayed delivery contracts.

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These delayed delivery contracts will be subject only to the conditions that we set forth in the relevant prospectus supplement or free writing prospectus.

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We will indicate in the relevant prospectus supplement or free writing prospectus the commission that underwriters and agents soliciting purchases of the debt securities under delayed delivery contracts will be entitled to receive.

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LEGAL MATTERS

The validity of certain securities and certain other matters with respect to Swiss law will be passed upon for us by Advestra AG, Zurich, Switzerland. The validity of certain securities and certain matters with respect to U.S. federal and New York State law will be passed upon for us by Davis Polk & Wardwell LLP, New York, New York.

EXPERTS

The consolidated financial statements of Novartis AG as of December 31, 2023 and 2022, and each of the years in the two-year period ended December 31, 2023, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2023 have been incorporated by reference herein in reliance upon the report of KPMG AG, Switzerland, an independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.

The financial statements for the year ended December 31, 2021 incorporated in this prospectus by reference to the Annual Report on Form 20-F for the year ended December 31, 2023 have been so incorporated in reliance on the report of PricewaterhouseCoopers AG, Switzerland, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers AG is a member of EXPERTsuisse — Swiss Expert Association for Audit, Tax and Fiduciary.

 

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LIMITATIONS ON ENFORCEMENT OF U.S. LAWS

Because Novartis AG is a Swiss company headquartered in Switzerland, many of our directors and executive officers (as well as certain directors, managers and executive officers of Novartis Capital Corporation), and certain experts named in this prospectus, reside outside the United States, and all or a substantial portion of our assets and the assets of such persons are located outside the United States. As a result, it may be difficult for you to serve legal process on us or our directors and executive officers (as well as certain directors, managers and executive officers of Novartis Capital Corporation) or have any of them appear in a U.S. court. In addition, U.S. investors may find it difficult in a lawsuit based on the civil liability provisions of the U.S. federal securities laws to enforce in U.S. courts or outside the United States judgments obtained against those persons in U.S. courts, to enforce in U.S. courts judgments obtained against those persons in courts in jurisdictions outside the United States, or to enforce against those persons in Switzerland, whether in original actions or in actions for the enforcement of judgments of U.S. courts, civil liabilities based solely upon the U.S. federal securities laws. In addition, awards for punitive damages in actions brought in the United States or elsewhere may be unenforceable in Switzerland.

 

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 8.   Indemnification of Directors and Officers

Novartis AG

Under Swiss law, directors and senior officers acting in violation of their statutory duties — whether dealing with bona fide third parties or performing any other acts on behalf of the corporation — may become liable to the corporation, its shareholders and (in bankruptcy) its creditors for damages. The directors’ liability is joint and several but only to the extent the damage is attributable to each director based on wilful or negligent violation of duty. If the board of directors lawfully delegated the power to carry out day-to-day management to a different corporate body, such as the executive committee, the board of directors is not vicariously liable for the acts of the members of the executive committee. Instead, the directors can be held liable for their failure to properly select, instruct or supervise the executive committee members. If directors and officers enter into a transaction on behalf of the corporation with bona fide third parties in violation of their statutory duties, the transaction is nevertheless valid as long as it is not excluded by the corporation’s business purpose.

Under Swiss law, a corporation may indemnify a director or officer of the corporation against losses and expenses (unless arising from his gross negligence or wilful misconduct), including attorney’s fees, judgments, fines and settlement amounts actually and reasonably incurred in a civil or criminal action, suit or proceeding by reason of having been the representative of or serving at the request of the corporation.

Novartis AG’s articles of incorporation do not contain provisions regarding the indemnification of directors and officers but according to general principles of Swiss employment law, an employer may, under certain circumstances, be required to indemnify an employee against losses and expenses incurred by him in the execution of his duties under the employment agreement, unless the losses and expenses arise from the employee’s gross negligence or wilful misconduct.

We currently maintain directors’ and officers’ insurance for our directors and officers as well as officers and directors of certain of our subsidiaries.

Novartis Capital Corporation

Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify directors and officers, as well as other employees and individuals, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person was or is made a party by reason of such person being or having been a director or officer of such corporation. The statute provides that it is not exclusive of other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise.

Article VIII of the Certificate of Incorporation and Section 4 of Article VIII of the By-Laws of Novartis Capital Corporation currently provide that Novartis Capital Corporation will indemnify directors and officers to the extent permitted by law. Under the By-Laws, the directors and officers of Novartis Capital Corporation are indemnified, to the extent permitted by law and subject to certain limitations, against all costs reasonably incurred by any such director or officer in an action or proceeding to which he or she was made a party by reason of being an officer and/or director of (a) Novartis Capital Corporation or (b) if at Novartis Capital Corporation’s request, an organization of which it is a shareholder or creditor.

Item 9.   Exhibits

The exhibits of the registration statement are listed in the Exhibit Index to this registration statement and are incorporated by reference herein.

 

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Item 10.   Undertakings

(a)   The undersigned Registrants hereby undertake:

(1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)   To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii)   To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)   To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;

provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by Novartis AG pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.

(2)   That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)   In the case of Novartis AG, to file a post-effective amendment to this registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided, that Novartis AG includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act or Item 8.A. of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the SEC by Novartis AG pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement.

(5)   That, for the purpose of determining liability under the Securities Act to any purchaser:

(i)   Each prospectus filed by the Registrants pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was deemed part of and included in this registration statement; and

(ii)   Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of this registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a)

 

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of the Securities Act shall be deemed to be part of and included in this registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of this registration statement relating to the securities in this registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in this registration statement or prospectus that is part of this registration statement or made in a document incorporated or deemed incorporated by reference into this registration statement or prospectus that is part of this registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in this registration statement or prospectus that was part of this registration statement or made in any such document immediately prior to such effective date.

(6)   That, for the purpose of determining liability of the Registrants under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned Registrants undertake that in a primary offering of securities of the undersigned Registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrants will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)   Any preliminary prospectus or prospectus of the undersigned Registrants relating to the offering required to be filed pursuant to Rule 424;

(ii)   Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrants or used or referred to by the undersigned Registrants;

(iii)   The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrants or their securities provided by or on behalf of the undersigned Registrants; and

(iv)   Any other communication that is an offer in the offering made by the undersigned Registrants to the purchaser.

(b)   The undersigned Registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of Novartis AG’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)   Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

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EXHIBIT INDEX

Exhibit No.	​	​	Description of Document	​
1.1	​	​	Form of Underwriting Agreement Standard Provisions	​
1.2	​	​	Form of Terms Agreement (included as Annex I to Exhibit 1.1)	​
4.1	​	​	Indenture, dated as of February 10, 2009, among Novartis Capital Corporation, Novartis Securities Investment Ltd. and Novartis Finance S.A., as issuers, Novartis AG, as guarantor, and HSBC Bank USA, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Registrants’ Registration Statement on Form F-3 (File Nos. 333-207004, 333-207004-01 and 333-207004-02), filed with the Securities and Exchange Commission on September 18, 2015)	​
4.2	​	​	Form of Guaranteed Debt Security	​
5.1	​	​	Opinion of Davis Polk & Wardwell LLP, special U.S. counsel to Novartis AG and Novartis Capital Corporation	​
5.2	​	​	Opinion of Advestra AG, special Swiss counsel to Novartis AG	​
23.1	​	​	Consent of Davis Polk & Wardwell LLP (included in Exhibit 5.1)	​
23.2	​	​	Consent of Advestra AG (included in Exhibit 5.2)	​
23.3	​	​	Consent of KPMG AG	​
23.4	​	​	Consent of PricewaterhouseCoopers AG	​
24.1	​	​	Powers of Attorney (included on the signature pages of this registration statement)	​
25.1	​	​	Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of HSBC Bank USA, National Association with respect to the Indenture, dated as of February 10, 2009	​
107	​	​	Filing Fee Exhibit	​

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant, Novartis AG, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Basel, on the 16th day of September, 2024.

Novartis AG

By:   

/s/ VASANT NARASIMHAN, M.D.

​

​

Name:

Vasant Narasimhan, M.D.

​

Title:

Chief Executive Officer

​

By:   

/s/ HARRY KIRSCH

​

​

Name:

Harry Kirsch

​

Title:

Chief Financial Officer

​

Each person whose signature appears below hereby constitutes and appoints Vasant Narasimhan, M.D., Harry Kirsch, Karen L. Hale, Christian Rehm, Ph.D. and Daniel Weiss, jointly and severally, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, and supplements to this Registration Statement on Form F-3 (and any and all additional registration statements, including registration statements filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they or he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

​	Signature	​	​	Title	​	​	Date	​
​	/s/ VASANT NARASIMHAN, M.D. ​ Vasant Narasimhan, M.D.	​	​	Chief Executive Officer (principal executive officer)	​	​	September 16, 2024	​
​	/s/ HARRY KIRSCH ​ Harry Kirsch	​	​	Chief Financial Officer (principal financial and accounting officer)	​	​	September 16, 2024	​
​	/s/ JOERG REINHARDT, PH.D. ​ Joerg Reinhardt, Ph.D.	​	​	Chairman of the Board of Directors	​	​	September 16, 2024	​
​	/s/ SIMON MORONEY, D.PHIL. ​ Simon Moroney, D.Phil.	​	​	Vice Chairman of the Board of Directors	​	​	September 16, 2024	​
​	/s/ NANCY C. ANDREWS, PH.D. ​ Nancy C. Andrews, PH.D.	​	​	Director	​	​	September 16, 2024	​

 

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​	Signature	​	​	Title	​	​	Date	​
​	/s/ TON BUECHNER ​ Ton Buechner	​	​	Director	​	​	September 16, 2024	​
​	/s/ PATRICE BULA ​ Patrice Bula	​	​	Director	​	​	September 16, 2024	​
​	/s/ ELIZABETH DOHERTY ​ Elizabeth Doherty	​	​	Director	​	​	September 16, 2024	​
​	/s/ BRIDGETTE HELLER ​ Bridgette Heller	​	​	Director	​	​	September 16, 2024	​
​	/s/ DANIEL HOCHSTRASSER ​ Daniel Hochstrasser	​	​	Director	​	​	September 16, 2024	​
​	/s/ FRANS VAN HOUTEN ​ Frans van Houten	​	​	Director	​	​	September 16, 2024	​
​	/s/ ANA DE PRO GONZALO ​ Ana de Pro Gonzalo	​	​	Director	​	​	September 16, 2024	​
​	/s/ CHARLES L. SAWYERS, M.D. ​ Charles L. Sawyers, M.D.	​	​	Director	​	​	September 16, 2024	​
​	/s/ WILLIAM T. WINTERS ​ William T. Winters	​	​	Director	​	​	September 16, 2024	​
​	/s/ JOHN D. YOUNG ​ John D. Young	​	​	Director	​	​	September 16, 2024	​
​	/s/ JAIME HUERTAS ​ Jaime Huertas	​	​	Authorized Representative in the United States	​	​	September 16, 2024	​

 

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Pursuant to the requirements of the Securities Act of 1933, the registrant, Novartis Capital Corporation, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Basel, on the 16th day of September, 2024.

Novartis Capital Corporation

By:   

/s/ EDUARD MARTI

​

​

Name:

Eduard Marti

​

Title:

President & Treasurer (principal executive officer and principal financial and accounting officer)

​

Each person whose signature appears below hereby constitutes and appoints Vasant Narasimhan, M.D., Harry Kirsch, Karen L. Hale, Christian Rehm, Ph.D. and Daniel Weiss, jointly and severally, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, and supplements to this Registration Statement on Form F-3 (and any and all additional registration statements, including registration statements filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they or he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

​	Signature	​	​	Title	​	​	Date	​
​	/s/ DANIEL WEISS ​ Daniel Weiss	​	​	Chairman of the Board of Directors	​	​	September 16, 2024	​
​	/s/ EDUARD MARTI ​ Eduard Marti	​	​	Director, President & Treasurer (principal executive officer and principal financial and accounting officer)	​	​	September 16, 2024	​

 

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Exhibit 1.1

 

NOVARTIS CAPITAL CORPORATION

 

Debt Securities

 

Fully and Unconditionally Guaranteed by

 

NOVARTIS AG

 

UNDERWRITING AGREEMENT STANDARD PROVISIONS

 

To the representatives of the several Underwriters

named from time to time in Schedule I to the applicable

Terms Agreement

 

Ladies and Gentlemen:

 

From time to time Novartis Capital Corporation, a corporation incorporated under the laws of Delaware (the “Issuer”), and Novartis AG, a stock corporation (Aktiengesellschaft) incorporated under the laws of Switzerland, as guarantor (the “Guarantor”), propose to enter into one or more Terms Agreements (each a “Terms Agreement”) substantially in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and subject to the terms and conditions stated herein, to issue and sell to the firms named in Schedule I to the applicable Terms Agreement (such firms constituting the “Underwriters” with respect to such Terms Agreement and the securities specified therein), certain of the Issuer’s debt securities (the “Debt Securities”) specified in Schedule II to such Terms Agreement (with respect to such Terms Agreement, the “Designated Debt Securities”). The Debt Securities will be fully and unconditionally guaranteed by the Guarantor as to payment of principal and interest (the “Guarantees” and, together with the Debt Securities, the “Securities”). The Designated Debt Securities and the related Guarantees (the “Designated Guarantees”) that will be issued and sold pursuant to any applicable Terms Agreement are collectively referred to herein as the “Designated Securities” with regard to such Terms Agreement.

 

The terms and rights of any particular issuance of Designated Securities shall be as specified in the Terms Agreement relating thereto, and such Designated Securities shall be issued under the Indenture, dated February 10, 2009 (the “Indenture”), among the Issuer, Novartis Securities Investment Ltd., Novartis Finance S.A., the Guarantor and HSBC Bank USA, National Association, as Trustee (the “Trustee”).

 

 

 

 

This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuer, the Guarantor and the Representatives (as defined below), or any Underwriter, with respect to the subject matter hereof.

 

1.            Particular sales of Designated Securities may be made from time to time to the Underwriters of such Designated Securities, for whom the firm(s) designated as representative(s) of the Underwriters of such Securities in the Terms Agreement relating thereto will act as representatives (the “Representatives”). The term “Representatives” also refers to the firm(s) acting as representative(s) of the Underwriters and to Underwriters who act without any firm being designated as their representative. This Agreement shall not be construed as an obligation of the Issuer to sell any of the Debt Securities, as an obligation of the Guarantor to issue any Guarantees or as an obligation of any of the Underwriters to purchase any Securities. The obligation of the Issuer to issue and sell any of the Debt Securities, the obligation of the Guarantor to issue any of the Guarantees and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Terms Agreement with respect to the Designated Securities specified therein. Each Terms Agreement shall specify the aggregate principal amount of the Designated Securities, the initial public offering price of such Designated Securities, the purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of such Designated Securities, the names of the Representatives of such Underwriters and the principal amount of such Designated Securities to be purchased by each Underwriter and shall set forth the date, time and manner of delivery of such Designated Securities and payment therefor. The Terms Agreement shall also specify (to the extent not set forth in the Indenture and the registration statement and prospectus with respect thereto) the terms of such Designated Securities. A Terms Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic or electronic communications or any other rapid transmission device designed to produce a written record of communications transmitted, as set forth in Section 21 herein. The obligations of the Underwriters under this Agreement and each Terms Agreement shall be several and not joint.

 

2.            The Issuer and the Guarantor, severally and jointly, represent and warrant to, and agree with, each of the Underwriters that:

 

(a)          The registration statement on Form F-3 (Registration No. 333-                          ) in respect of the Securities has been filed with the Securities and Exchange Commission (the “Commission”); such registration statement and any amendments thereto filed prior to the date of the applicable Terms Agreement, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus contained therein, became effective on filing with the Commission in such form; the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of the applicable Terms Agreement, is hereafter called the “Basic Prospectus”; any preliminary prospectus relating to the Designated Securities (including any preliminary prospectus supplement) included in such registration statement or filed with the Commission pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the “Act”), being hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in such registration statement, at the time such parts became effective, but excluding Form T-1 and including any prospectus supplement relating to the Designated Securities that is filed with the Commission and deemed by virtue of Rule 430B under the Act to be part of such registration statement, each as amended at the time such part of the registration statement became effective being hereinafter called the “Registration Statement”; “Applicable Time” is the time specified as such in the applicable Terms Agreement; “Effective Date” shall mean each date and time that the Registration Statement and any post-effective amendments or amendments thereto became or becomes effective; any reference herein to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 6 of Form F-3 under the Act, as of the date of such Basic Prospectus, any Preliminary Prospectus or Prospectus, as the case may be, and any post-effective amendments to the Registration Statement; any reference to any amendment or supplement to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Basic Prospectus, any Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated by reference in such Basic Prospectus, any Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Guarantor filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective Date of the Registration Statement that is incorporated by reference in the Registration Statement; the Basic Prospectus, as supplemented by the prospectus supplement specifically relating to the Designated Securities filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing, is hereinafter called the “Prospectus”; and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission and no order preventing or suspending the use of the Basic Prospectus, any Preliminary Prospectus, the Prospectus or the Pricing Disclosure Package (as defined below) together with any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Designated Securities (an “Issuer Free Writing Prospectus”) has been issued and no proceeding for that purpose has been initiated or threatened by the Commission;

 

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(b)          The documents incorporated by reference in the Pricing Disclosure Package (as defined below) and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the applicable rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Pricing Disclosure Package or the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Issuer or the Guarantor by an Underwriter of Designated Securities through the Representatives expressly for use in the Pricing Disclosure Package or the Prospectus as amended or supplemented, as the case may be, relating to such Designated Securities; and no such documents will have been filed with the Commission following the Commission’s close of business on the business day immediately prior to the date of the applicable Terms Agreement and prior to the execution of the applicable Terms Agreement, except as set forth on Schedule III to the applicable Terms Agreement;

 

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(c)          The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects, to the requirements of the Act and the Trust Indenture Act of 1939, as amended the “Trust Indenture Act”), and the rules and regulations of the Commission thereunder; the Registration Statement and any amendment thereto do not and will not, as of the applicable Effective Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, not misleading; and the Prospectus and any amendment or supplement thereto do not and will not, as of its date and as of the Time of Delivery, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made not misleading; provided, however, that this representation and warranty shall not apply to (i) any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Issuer or the Guarantor by an Underwriter of Designated Securities through the Representatives expressly for use in the Registration Statement or the Prospectus as amended or supplemented relating to such Designated Securities or (ii) that part of the Registration Statement which shall constitute the statement of eligibility and qualification (Form T-1) under the Trust Indenture Act;

 

(d)          The (i) Basic Prospectus, the Preliminary Prospectus, if any, used most recently prior to the Applicable Time, as supplemented by the final term sheet prepared and filed pursuant to Section 5(a) hereof as of the Applicable Time and listed on Schedule V to the applicable Terms Agreement together with the Issuer Free Writing Prospectus listed in Schedule III(a) (if any) to the applicable Terms Agreement and any other free writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Pricing Disclosure Package (collectively, the “Pricing Disclosure Package”) and (ii) each electronic road show, if any, when taken together as a whole with the Pricing Disclosure Package, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed on Schedule III (if any) to the applicable Terms Agreement will not conflict with the information contained in the Registration Statement, the Basic Prospectus, the Preliminary Prospectus, if any, used most recently prior to the Applicable Time or the Prospectus; provided, however, that this representation and warranty shall not apply to (i) any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Issuer or the Guarantor by an Underwriter of Designated Securities through the Representatives expressly for use in any such Issuer Free Writing Prospectus or the Pricing Disclosure Package or (ii) that part of the Registration Statement which shall constitute the statement of eligibility and qualification (Form T-1) under the Trust Indenture Act;

 

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(e)          Neither the Issuer nor the Guarantor is or will be at the time of the Terms Agreement, an “ineligible issuer,” as defined in Rule 405 under the Act;

 

(f)           The consolidated financial statements (and the notes thereto) and schedules, if any, of the Guarantor and its consolidated subsidiaries incorporated by reference in or filed with and as a part of the Registration Statement, the Pricing Disclosure Package and the Prospectus present fairly, in all material respects, the consolidated financial position as of the respective dates and the consolidated results of operations and cash flows for the respective periods covered thereby of the Guarantor and its consolidated subsidiaries in conformity with International Financial Reporting Standards applied on a consistent basis throughout the periods involved, otherwise than as set forth in the Pricing Disclosure Package;

 

(g)          The unaudited condensed interim consolidated financial statements (and the notes thereto) and schedules, if any, of the Guarantor and its consolidated subsidiaries incorporated by reference in or filed with and as a part of the Registration Statement, the Pricing Disclosure Package and the Prospectus present fairly, in all material respects, the consolidated financial position as of the respective dates and the consolidated results of operations and cash flows for the respective periods covered thereby of the Guarantor and its consolidated subsidiaries in conformity with International Financial Reporting Standards applied on a consistent basis throughout the periods involved, otherwise than as set forth in the Pricing Disclosure Package;

 

(h)          Since the latest date as of which information is given in the Pricing Disclosure Package there has not been any material change in the consolidated shareholders’ equity or consolidated long-term debt of the Guarantor and its subsidiaries taken as a whole, or any material adverse change, or any development reasonably likely to result in a prospective material adverse change in or affecting the financial position, shareholders’ equity or results of operations of the Guarantor and its subsidiaries taken as a whole, otherwise than as set forth in the Pricing Disclosure Package;

 

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(i)           To the best of the Issuer’s and the Guarantor’s knowledge, after due inquiry, and other than as set forth in the Pricing Disclosure Package and the Prospectus, there are no material legal or governmental or regulatory proceedings pending or threatened to which the Guarantor or any of its subsidiaries is a party or of which any property of the Guarantor or any of its subsidiaries is the subject that are required to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus and are not so described and there are no statutes or regulations that are required to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus and are not so described;

 

(j)           The Designated Debt Securities have been duly authorized by the Issuer and, when executed and authenticated in accordance with the Indenture and delivered to and paid for by the Underwriters, will constitute valid and binding obligations of the Issuer entitled to the benefits provided by the Indenture; the Designated Guarantees have been duly authorized by the Guarantor and, upon due issuance, authentication and delivery of the Designated Debt Securities and due endorsement of the Designated Guarantees, the Designated Guarantees will have been duly executed, issued and delivered and will constitute valid and binding obligations of the Guarantor entitled to the benefits provided by the Indenture; the Indenture has been duly authorized, executed and delivered by the Issuer and the Guarantor and (assuming the due authorization, execution and delivery thereof by the Trustee), constitutes a valid and binding obligation of the Issuer and the Guarantor, enforceable in accordance with its terms, subject to the effects of applicable bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally and equitable principles of general applicability; the Indenture has been duly qualified under the Trust Indenture Act; the Designated Securities conform in all material respects to the description thereof contained in the Pricing Disclosure Package and the Prospectus as amended or supplemented; and the applicable Terms Agreement has been duly authorized, executed and delivered by the Issuer and the Guarantor;

 

(k)          The issue and sale of the Designated Securities and the compliance by the Issuer and the Guarantor with the Indenture, this Agreement and the Terms Agreement relating to the Designated Securities and the consummation by the Issuer and the Guarantor of the transactions contemplated herein and therein will not contravene (x) any of the terms or provisions of any indenture, mortgage, deed of trust, loan agreement or other similar agreement or instrument to which the Issuer or the Guarantor or any of their subsidiaries is a party or by which the Issuer or the Guarantor or any of their subsidiaries is bound, (y) any statute of the United States, Switzerland or the state of Delaware or any political subdivision thereof, or any order, rule or regulation known to the Issuer or the Guarantor of any court or of any governmental agency or body in the United States, Switzerland or the state of Delaware or any political subdivision thereof, or (z) the charter or by-laws (or similar organizational documents) of the Issuer or the Guarantor, except in the case of clauses (x) and (y) above for such contraventions which would not affect the validity or binding nature of the Designated Securities or have a material adverse effect on the financial position, shareholders’ equity or results of operations of the Guarantor and its consolidated subsidiaries considered as a whole (a “Material Adverse Effect”);

 

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(k)          The Issuer is organized and validly existing under the laws of the state of Delaware, and the Guarantor is organized and validly existing as a stock corporation (Aktiengesellschaft) under the laws of Switzerland, each with power and authority to own their properties and conduct their business as described in the Pricing Disclosure Package and the Prospectus except as would not have a Material Adverse Effect;

 

(l)           No consent, approval, authorization, order, registration or qualification of or with any court or any governmental agency or body described in (j) above is required for the issue and sale of the Designated Securities by the Issuer in the manner contemplated herein or the consummation of the other transactions contemplated by this Agreement, the Terms Agreement or the Indenture by the Issuer and the Guarantor except (i) as have been obtained under the Act and the Trust Indenture Act and (ii) as may be required in connection with the offer and sale of the Designated Securities by the securities or Blue Sky laws of the various states or the securities laws of any jurisdiction outside the United States in which the Designated Securities are offered and sold;

 

(m)          Neither the Issuer nor the Guarantor is, or after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Pricing Disclosure Package and the Prospectus will be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended;

 

(n)          KPMG which has audited certain financial statements of the Guarantor and its subsidiaries and the Guarantor’s internal control over financial reporting and management’s assessment thereof, is an independent registered public accounting firm with respect to the Guarantor as required by the Act and the applicable rules and regulations of the Commission thereunder; and PricewaterhouseCoopers AG, which have audited certain financial statements of the Guarantor and its subsidiaries and the Guarantor’s internal control over financial reporting and management’s assessment thereof, was an independent registered public accounting firm with respect to the Guarantor as of February 1, 2022 and during the period covered by the financial statements on which PricewaterhouseCoopers AG reported as required by the Act and the applicable rules and regulations of the Commission thereunder;

 

(o)          Except as otherwise disclosed in the Guarantor’s Registration Statement, Pricing Disclosure Package or Prospectus, the Guarantor and its subsidiaries maintain “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); and such disclosure controls and procedures are effective at the reasonable assurance level to perform the functions for which they were established; and

 

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(p)          Except as otherwise disclosed in the Guarantor’s Registration Statement, Pricing Disclosure Package or Prospectus, neither the Issuer, the Guarantor nor any of the Guarantor’s consolidated subsidiaries nor, to the knowledge of the Issuer or the Guarantor, any director, officer, agent, employee or affiliate of the Issuer, the Guarantor or any of the Guarantor’s consolidated subsidiaries, is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), the European Union or His Majesty’s Treasury (“HMT”); and the Issuer and the Guarantor will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity in violation of any sanctions administered by OFAC.

 

3.            Upon the execution of the Terms Agreement applicable to any Designated Securities and authorization by the Representatives of the release of such Designated Securities, the several Underwriters propose to offer such Designated Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented.

 

4.            Designated Securities to be purchased by each Underwriter pursuant to the Terms Agreement relating thereto, in such authorized denominations and registered in such names as the Representatives may request upon at least twenty-four hours’ prior notice to the Issuer and the Guarantor, shall be delivered by or on behalf of the Issuer and the Guarantor to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor in same day funds, payable to the order of the Issuer in the funds specified in such Terms Agreement, all at the place and time and date specified in such Terms Agreement or at such other place and time and date as the Representatives and the Issuer may agree upon in writing, such time and date being herein called the “Time of Delivery” for such Securities. The Securities will be delivered by the Issuer to the Representatives in the form of one or more global Securities, representing all of the Securities, which will be registered in the name of a nominee for The Depository Trust Company (“DTC”) and deposited on behalf of the Underwriters with Cede & Co. as custodian for DTC, for credit to the respective participant accounts of the Underwriters unless otherwise directed by you.

 

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5.            The Issuer and the Guarantor agree with each of the Underwriters of any Designated Securities:

 

(a)          To prepare in consultation with the Representatives the Prospectus, as amended and supplemented in relation to the applicable Designated Securities, in a form approved by the Representatives, which approval the Representatives agree they will not unreasonably withhold, and to file such Prospectus pursuant to Rule 424(b) under the Act prior to the earlier of (i) the Time of Delivery relating to the applicable Designated Securities and (ii)  the Commission’s close of business on the second business day following the execution and delivery of the Terms Agreement relating to the applicable Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement, the Pricing Disclosure Package or Prospectus (as each may have been amended or supplemented) after the date of the Terms Agreement relating to such Securities and prior to the Time of Delivery without prior consultation with the Representatives for such Securities; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; if requested by you prior to the Applicable Time, to prepare a final term sheet, containing solely a description of the Designated Securities, in a form substantially as set forth in Schedule V to the applicable Terms Agreement and which shall be attached to the applicable Terms Agreement and approved by the Representatives, and to file such term sheet pursuant to Rule 433(d) under the Act within the time required by such Rule; to file promptly all other material required to be filed by the Issuer or the Guarantor with the Commission pursuant to Rule 433(d) under the Act; to file promptly all reports and any definitive proxy or information statements required to be filed by the Issuer or the Guarantor with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required in connection with the offering or sale of such Designated Securities, and during such same period to advise the Representatives, promptly after the Issuer or the Guarantor receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of such Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to use promptly its reasonable best efforts to obtain its withdrawal;

 

(b)          Promptly from time to time to use its reasonable best efforts to qualify such Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may reasonably request and to pay all expenses (including reasonable fees and disbursements of counsel) in connection with such qualification and in connection with the determination of the eligibility of such Securities for investment under the laws of such jurisdictions as the Representatives may designate and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities; provided, however, that in connection therewith neither the Issuer nor the Guarantor shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or to take any other action which would subject it to service of process in suits in any jurisdiction or to become subject to taxation in any jurisdiction other than those arising out of the offering or sale of the Designated Securities in such jurisdiction;

 

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(c)          To furnish the Underwriters, without charge, with a copy of the Registration Statement, with copies of the Prospectus and any Issuer Free Writing Prospectus as amended or supplemented, including the exhibits and materials, if any, incorporated by reference therein, in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a prospectus is required (or, in lieu thereof, the notice referred to in Rule 173(a) under the Act) at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Designated Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; provided, however, if any Underwriter is required to deliver a prospectus in connection with sales of any of the Designated Securities at any time nine months or more after the time of issue of the Prospectus, upon their request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;

 

(d)          To make generally available to the Guarantor’s security holders and to the Representatives as soon as practicable, but in any event not later than eighteen months after the effective date (as defined in Rule 158(c) under the Act) of the Registration Statement, an earnings statement of the Guarantor and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Guarantor, Rule 158); and

 

(e)          During the period beginning from the date of the Terms Agreement for such Designated Securities and continuing to and including the earlier of (i) the termination of trading restrictions for such Designated Securities, as notified to the Issuer and the Guarantor by the Representatives and (ii) the Time of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed (as applicable) by the Issuer or the Guarantor which mature more than one year after such Time of Delivery and which are denominated in U.S. dollars and substantially similar to such Designated Securities, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld.

 

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6.            (a) Each Underwriter represents and agrees that it shall not use, refer to or distribute any “free writing prospectus” (as defined in Rule 405 under the Act, a “Free Writing Prospectus”) except:

 

(i)            a Free Writing Prospectus that (i) is not an Issuer Free Writing Prospectus, and (ii) contains only information describing the preliminary terms of the Securities or their offering or otherwise permitted under Rule 134 under the Act;

 

(ii)           a Free Writing Prospectus as shall be agreed in writing with the Issuer and the Guarantor that is not distributed, used or referenced by such Underwriter in a manner reasonably designed to lead to its broad unrestricted dissemination (including any electronic road show) unless the Issuer and the Guarantor consent to such dissemination and such Free Writing Prospectus is listed on Schedule III to the applicable Terms Agreement; provided that an Underwriters’ internal communications with its own sales force shall not be covered by this clause (ii); and

 

(b)          Notwithstanding Section 6(a) above, each of the Issuer and the Guarantor hereby agrees that the Underwriters may distribute to investors one or more Free Writing Prospectus that contain only the final terms of the Securities (including, for the avoidance of doubt, in the form of Bloomberg communications) substantially in the form set forth in Schedule V to the applicable Terms Agreement and that such Free Writing Prospectus substantially in the form set forth in Schedule V to the applicable Terms Agreement will be filed by the Issuer and the Guarantor in accordance with Rule 433(d) under the Act and shall be considered an Issuer Free Writing Prospectus for purposes of this Agreement.

 

(c)          Each of the Issuer and the Guarantor agrees that, unless it has obtained or will obtain the prior written consent of the Representatives, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the Act) required to be filed by the Issuer or the Guarantor with the Commission or retained by the Issuer or the Guarantor under Rule 433 under the Act, provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the free writing prospectus included in Schedule III to the applicable Terms Agreement. Any such free writing prospectus consented to by the Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.” Each of the Issuer and the Guarantor agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus (including the final terms of the Securities as set forth in Schedule V to the applicable Terms Agreement) as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and recordkeeping.

 

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(d)          Each of the Issuer and the Guarantor agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Disclosure Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Issuer or the Guarantor will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Issuer or the Guarantor by an Underwriter through the Representatives expressly for use therein.

 

7.            Each of the Issuer and the Guarantor covenants and agrees with the several Underwriters that the Issuer and the Guarantor will pay or cause to be paid the following: (i) except as provided in the proviso contained in Section 5(c) hereof, the fees, disbursements and expenses of counsel and accountants of the Issuer and the Guarantor in connection with the registration of the Designated Securities under the Act and the qualification of any indenture related to the Designated Securities under the Trust Indenture Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Prospectus and amendments and supplements thereto, the Pricing Disclosure Package and any Issuer Free Writing Prospectus and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Pricing Disclosure Package, any indenture related to the Designated Securities, any Blue Sky and legal investment memoranda and any other documents in connection with the offering, purchase, sale and delivery of the Designated Securities; (iii) all expenses in connection with the qualification of the Designated Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable fees, disbursements and expenses of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Designated Securities; (v) any filing fees incident to any required review by the Financial Industry Regulatory Authority, Inc. of the terms of the sale of the Designated Securities; (vi) the cost of preparing the Securities and of the delivery of the Designated Securities to the Underwriters; (vii) the fees and expenses of any Trustee and any agent of any Trustee and the fees and disbursements of counsel for any Trustee in connection with any Indenture and the Securities; and (viii) except as provided in the proviso contained in Section 5(c) hereof, all other reasonable costs and expenses incident to the performance of their obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, Section 9 and Section 13 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Designated Securities by them, and any advertising expenses connected with any offers they may make.

 

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8.            The obligations of the Underwriters of any Designated Securities under the Terms Agreement relating to such Designated Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of the Issuer in or incorporated by reference in the Terms Agreement relating to such Designated Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct in all material respects, the condition that the Issuer shall have performed in all material respects its obligations hereunder theretofore to be performed, and the following additional conditions:

 

(a)          The final term sheet contemplated by Section 5(a) hereof in relation to the applicable Designated Securities, any other material required to be filed pursuant to Rule 433 under the Act in relation to the applicable Designated Securities shall have been filed within the applicable time period prescribed for such filings by Rule 433 under the Act and the Prospectus as amended or supplemented in relation to the applicable Designated Securities shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission and no order suspending or preventing the use of the Basic Prospectus, any Preliminary Prospectus, any documents which are part of the Pricing Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives’ reasonable satisfaction;

 

(b)          United States counsel for the Underwriters shall have furnished to the Representatives such opinion or opinions, dated the Time of Delivery for such Designated Securities, with respect to the validity of the Indenture, the Designated Securities, the Registration Statement, the Pricing Disclosure Package, the Prospectus as amended or supplemented and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. Such counsel shall be entitled to state that they have assumed that any document referred to in their opinion and executed by the Guarantor has been duly authorized, executed and delivered pursuant to Swiss law and, as to all matters of Swiss law, their opinion is given in reliance upon, and is subject to the qualifications set forth in, the opinions of counsel for the Guarantor required by subsection (c) of this Section 8;

 

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(c)          Swiss counsel for the Guarantor shall have furnished to the Representatives a written opinion, dated the Time of Delivery for such Designated Securities, in form and substance reasonably satisfactory to the Representatives;

 

(d)          United States counsel for the Issuer and the Guarantor shall have furnished to the Representatives a written opinion, dated the Time of Delivery for such Designated Securities, in form and substance reasonably satisfactory to the Representatives;

 

(e)          United States counsel for the Issuer and the Guarantor, shall have furnished to the Representatives a written 10b-5 letter, dated the Time of Delivery for such Designated Securities, in form and substance reasonably satisfactory to the Representatives;

 

(f)           On the date of the applicable Terms Agreement and at the Time of Delivery for such Designated Securities, KPMG AG and PricewaterhouseCoopers AG, which have each audited certain of the financial statements of the Guarantor and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, shall have each furnished to the Representatives a letter or letters, dated as of each such date and in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus as amended or supplemented and as to such other matters as the Representatives may reasonably request; and

 

(g)          The Issuer and the Guarantor shall have furnished or caused to be furnished to the Representatives certificates, dated the Time of Delivery for the Designated Securities, of officers of the Issuer and the Guarantor satisfactory to the Representatives as to the accuracy of the representations and warranties in all material respects of the Issuer and the Guarantor, respectively, in this Agreement and the Terms Agreement at and as of the Time of Delivery, as to the performance in all material respects by the Issuer of all of its obligations hereunder to be performed prior to such Time of Delivery, and as to the matters set forth in Sections 8(a) and 12(i) hereof.

 

9.            (a) The Issuer and the Guarantor jointly and severally will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, the Pricing Disclosure Package, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, including the information in the final term sheet filed in accordance with Section 5(a) of this Agreement and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state there in a material fact required to be stated there in or necessary to make the statements there in not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Issuer and the Guarantor shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Issuer or the Guarantor by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities.

 

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(b)          Each Underwriter severally and not jointly will indemnify and hold harmless the Issuer and the Guarantor against any losses, claims, damages or liabilities to which the Issuer or the Guarantor may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, the Pricing Disclosure Package, or any Issuer Free Writing Prospectus and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto, the Pricing Disclosure Package, or any Issuer Free Writing Prospectus and any other prospectus relating to the Securities, or any amendment or supplement in reliance upon and in conformity with written information furnished to the Issuer or the Guarantor by such Underwriter through the Representatives expressly for use therein; and will, reimburse the Issuer and the Guarantor for any legal or other expenses reasonably incurred by the Issuer or the Guarantor in connection with investigating or defending any such action or claim as such expenses are incurred.

 

(c)          Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, promptly notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. It is understood that the indemnifying party shall not, in connection with any action or related actions in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm for all such indemnified parties. The indemnifying party shall not be liable for any settlement of any action effected without its written consent, unless such settlement (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. If settled with such consent, or under the conditions laid out in (i) and (ii), the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement.

 

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(d)          To the extent that the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Guarantor on the one hand and the Underwriters of the Designated Securities on the other from the offering of the Designated Securities to which loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Issuer and the Guarantor on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Issuer and the Guarantor on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Issuer bear to the total underwriting discounts and commissions received by such Underwriters, in each case as set forth in the table on the cover page of the Prospectus as amended and supplemented. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or the Guarantor on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Issuer, the Guarantor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.

 

16

 

 

(e)          The obligations of the Issuer and the Guarantor under this Section 9 shall be in addition to any liability which the Issuer or the Guarantor may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act and to the Underwriters’ affiliates, directors and officers; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Issuer and the Guarantor, the duly authorized representative of the Issuer and the Guarantor in the United States, and to each person, if any, who controls the Issuer or the Guarantor within the meaning of the Act or the Exchange Act.

 

10.          (a) If any Underwriter shall default in its obligation to purchase the Designated Securities which it has agreed to purchase under the Terms Agreement relating to such Designated Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Designated Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Designated Securities, then the Issuer and the Guarantor shall be entitled to a further period of thirty-six hours within which to procure another party or other parties reasonably satisfactory to the Representatives to purchase such Designated Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify the Issuer and the Guarantor that the Representatives have so arranged for the purchase of such Designated Securities, or the Issuer or the Guarantor notifies the Representatives that it has so arranged for the purchase of such Designated Securities, the Representatives or the Issuer or the Guarantor shall have the right to postpone the Time of Delivery for such Designated Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Issuer and the Guarantor agree to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Terms Agreement with respect to such Designated Securities.

 

17

 

 

(b)          If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives, the Issuer or the Guarantor as provided in subsection (a) above, the aggregate principal amount of such Designated Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated Securities, then the Issuer and the Guarantor shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Designated Securities which such Underwriter agreed to purchase under the Terms Agreement relating to such Designated Securities and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Designated Securities which such Underwriter agreed to purchase under such Terms Agreement) of the Designated Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

(c)          If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives, the Issuer or the Guarantor as provided in subsection (a) above, the aggregate principal amount of the Designated Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Securities, as referred to in subsection (b) above, or if the Issuer or the Guarantor shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Designated Securities of a defaulting Underwriter or Underwriters, then the Terms Agreement relating to such Designated Securities shall thereupon terminate, without liability on the part of any non-defaulting Underwriter, the Issuer or the Guarantor, except for the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

18

 

 

11.          The respective indemnities, agreements, representations, warranties and other statements of the Issuer, the Guarantor and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter or the Issuer or the Guarantor, the duly authorized representative of the Issuer or the Guarantor in the United States or any officer or director or controlling person of the Issuer or the Guarantor, and shall survive delivery of and payment for the Designated Securities.

 

12.          Any Terms Agreement shall be subject to termination in the absolute discretion of the Representatives, after consultation with the Issuer and the Guarantor, if, since the respective dates as of which information is given in the Pricing Disclosure Package in the case of clause (i) below, or subsequent to the Applicable Time and prior to the Time of Delivery of the Designated Securities, in the case of clauses (ii) through (vii) below, (i) there shall have been a material adverse change, or any development which in the reasonable judgment of the Issuer or the Guarantor will result in a material adverse change, in the business, properties or financial condition of the Guarantor and its consolidated subsidiaries considered as a whole, otherwise than as set forth or contemplated in the Pricing Disclosure Package; (ii) there shall have occurred a downgrading in the rating accorded the Guarantor’s senior debt securities by Moody’s Investor Services, Inc. (“Moody’s”) or S&P Global Ratings (“S&P”) or, in the event that the Guarantor’s senior debt securities are not rated by either Moody’s or S&P, by another “nationally recognized statistical rating organization” as such term is defined by the Commission under Section 3(a)(62) of the Exchange Act; (iii) any such organization shall have publicly announced that it has under surveillance or review or has changed its outlook with respect to its rating of the Securities or of any other senior debt securities or preferred stock of or guaranteed by the Guarantor (other than an announcement with positive implications of a possible upgrading); (iv) trading in securities generally on the New York Stock Exchange or the SIX Swiss Exchange or any other exchange where the Designated Securities are listed or intended to be listed shall have been suspended or materially limited; (v) trading of the common shares or American Depositary Receipts of the Guarantor is suspended (other than temporarily or for technical reasons) on the SIX Swiss Exchange or the New York Stock Exchange, respectively; (vi) a general moratorium on commercial banking activities in the State of New York shall have been declared by either Federal or New York State authorities or a general moratorium on commercial banking activities in Switzerland shall have been declared by authorities in Switzerland; (vii) there shall have occurred the outbreak or escalation of hostilities involving the United States or Switzerland or the declaration by the United States or Switzerland of a national emergency or war; or (viii) there shall have occurred any change in financial markets or other national or international calamity or crisis of such magnitude and severity in its effect on the financial markets, as, in any such case described in clauses (i) through (viii) above, in the judgment of the Representatives, after consultation with the Guarantor, to make it impracticable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Pricing Disclosure Package and the Prospectus, as amended or supplemented relating to such Securities.

 

19

 

 

13.          If any Terms Agreement shall be terminated by the Underwriters of the Designated Securities pursuant to clause (i) of Section 12 hereof or because of any failure or refusal on the part of the Issuer or the Guarantor to comply with the terms or to fulfill any of the conditions of the Terms Agreement, or if for any reason either the Issuer or the Guarantor shall be unable to perform its obligations under the Terms Agreement, the Issuer and the Guarantor will reimburse the Underwriters of such Securities for all out-of-pocket expenses (including the fees and disbursements of counsel) reasonably incurred by the Underwriters in connection with the Designated Securities.

 

Notwithstanding the termination of any Terms Agreement the provisions of Sections 9, 10 and 11 hereof shall remain in effect.

 

14.          In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties here to shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Terms Agreement.

 

All statements, requests, notices and agreements hereunder shall be in writing (including by electronic means), and if to the Underwriters shall be delivered or sent as directed in the applicable Terms Agreement; and if to the Issuer and the Guarantor shall be delivered or sent by mail, telex or facsimile transmission to its address set forth in the Registration Statement, Attention: Group General Counsel, or such other address as the Issuer or the Guarantor shall notify in writing to the Representatives; provided, however, that any notice to an Underwriter of Designated Securities pursuant to Section 9(c) hereof shall be delivered or sent to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to Issuer and the Guarantor by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

 

15.          This Agreement and each Terms Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Issuer, the Guarantor and, to the extent provided in Section 9 and Section 11 hereof, the officers and directors of the Issuer and the Guarantor and each person who controls the Issuer or the Guarantor or any Underwriter and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Terms Agreement. No purchaser of any of the Designated Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

 

16.          The Issuer and the Guarantor acknowledge and agree that (i) the purchase and sale of any Designated Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Issuer and the Guarantor, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as principal and not as an agent or fiduciary of the Issuer or the Guarantor, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Issuer or the Guarantor with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Issuer or the Guarantor on other matters) or any other obligation to the Issuer or the Guarantor except the obligations expressly set forth in this Agreement and (iv) the Issuer and the Guarantor have consulted its own legal and financial advisors to the extent it deemed appropriate. The Issuer and the Guarantor agree that they will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Issuer or the Guarantor, in connection with such transaction or the process leading thereto.

 

20

 

 

17.          (a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

(b)          In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

 

“Covered Entity” means any of the following:

 

(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

“U.S. Special Resolution Regime” means each of (i) the U.S. Federal Deposit Insurance Act, as amended and the regulations promulgated thereunder and (ii) Title II of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended and the regulations promulgated thereunder.

 

21

 

 

18.            The Issuer hereby appoints Novartis Services, Inc., One Health Plaza, East Hanover, NJ 07936, as its authorized agent (the “Authorized Agent”) upon which process may be served in any action based on this Agreement which may be instituted in any State or Federal court in The City, County and State of New York by any Underwriter and expressly accepts the jurisdiction of any such court in respect of such action. Such appointment shall be irrevocable for a period of seven (7) years from the date hereof unless and until a successor Authorized Agent shall be appointed and such successor shall accept such appointment. The Issuer will take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment or appointments in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Issuer (mailed or delivered as aforesaid) shall be deemed, in every respect, effective service of process upon the Issuer. Notwithstanding the foregoing, any action based on this Agreement or any Terms Agreement may be instituted by any Underwriter against the Guarantor in any competent court in Switzerland.

 

19.          Time shall be of the essence of each Terms Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

 

20.          This Agreement and each Terms Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

21.          This Agreement and each Terms Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Delivery of this Agreement or any Terms Agreement by one party to any other party may be made by facsimile, electronic mail (including any electronic signature complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) or other transmission method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

22

 

 

ANNEX I

 

Terms Agreement

 

[Name(s) of Representative(s),]

 

As Representatives of the several Underwriters
named in Schedule I hereto,

 

Ladies and Gentlemen:

 

Novartis Capital Corporation (the “Issuer”) proposes, subject to the terms and conditions stated in this Terms Agreement (this “Agreement”) and in the Underwriting Agreement Standard Provisions, a copy of which is attached hereto as Annex A (the “Underwriting Agreement”), to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”) the Debt Securities specified in Schedule II hereto (the “Designated Debt Securities”). The Designated Debt Securities will be fully and unconditionally guaranteed by Novartis AG (the “Guarantor”) as to payment of principal and interest (the “Designated Guarantees” and, together with the Designated Debt Securities, the “Designated Securities”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein [, as modified by this Agreement,] shall be deemed to have been made at and as of the date of this Agreement, provided that each representation and warranty which refers to the Basic Prospectus, Pricing Disclosure Package or the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty only as of the date of this Agreement in relation to the Basic Prospectus, Pricing Disclosure Package or the Prospectus, as amended or supplemented, relating to the Designated Securities which are the subject of this Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of each of the Underwriters of the Designated Securities pursuant to Section 14 of the Underwriting Agreement and the address of the Representatives referred to in such Section 14 are set forth at the end of Schedule II hereto. Schedule III sets forth each Issuer Free Writing Prospectus that is part of the Pricing Disclosure Package and any additional documents incorporated by reference into the Pricing Disclosure Package that were filed with the Commission subsequent to the Commission’s close of business on the business day immediately prior to the date of this Agreement. Schedule IV sets forth all documents that the Issuer, the Guarantor and the Representatives agree are to be included in the Pricing Disclosure Package. The final term sheets prepared in accordance with Section 5(a) of the Underwriting Agreement are attached hereto as Schedule V.

 

The “Applicable Time” means [  ] [a.m./p.m.] New York time on the date hereof.

 

A-1

 

 

An amendment of the Registration Statement, or a supplement to the Basic Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.

 

Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Issuer agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Issuer, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto.

 

All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail or facsimile transmission to [           ], Attention: [           ], Tel: [          ], Fax: [          ]; and if to the Issuer or the Guarantor shall be delivered or sent by mail or facsimile transmission to Novartis AG, Lichtstrasse 35, CH-4056 Basel, Switzerland, Attention: Karen L. Hale, Chief Legal Officer and Christian Rehm Ph.D., Head Corporate and Finance Legal, Tel: [phone], or such other address as the Issuer or the Guarantor shall notify in writing to the Representatives; provided, however, that any notice to an Underwriter of Designated Securities pursuant to Section 9(c) of the Underwriting Agreement shall be delivered or sent to such Underwriter at its address set forth in its Underwriters’ Questionnaire, which address will be supplied to the Issuer or the Guarantor by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

 

If the foregoing is in accordance with your understanding, please sign and return to us [One for the Issuer and [each of] the Representatives plus one for each counsel] counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters, the Issuer and the Guarantor. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Issuer and the Guarantor for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.

 

This Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Delivery of this Agreement by one party to any other party may be made by facsimile, electronic mail (including any electronic signature complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) or other transmission method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

A-2

 

 

	Very truly yours,
	NOVARTIS CAPITAL CORPORATION
	By:
		Name:
		Title:
	NOVARTIS AG
	By:
		Name:
		Title:
	By:
		Name:
		Title:

 

A-3

 

 

Accepted as of the date hereof:

 

By each of the Representatives

 

[NAME OF REPRESENTATIVE]
By:
	Name:
	Title:

 

A-4

 

 

SCHEDULE I

  

Underwriter			Principal Amount of Designated Securities to be Purchased
[Name(s) of Representative(s)]		$
[Names of other Underwriters]		$
Total		$

 

I-1

 

 

SCHEDULE II

 

Title of Designated Securities:

 

[%] [Floating Rate][Zero Coupon][Notes][Debentures] due

 

Aggregate principal amount:

 

[$] aggregate principal amount of the Designated Securities

 

Price to Public:

 

% of the principal amount of the Designated Securities, plus accrued interest from                to                [and accrued amortization, if any, from                to          ]

 

Purchase Price by Underwriters:

 

% of the principal amount of the Designated Securities, plus accrued interest from                to                [and accrued amortization, if any, from                to             ]

 

Expenses:

 

[The Underwriters agree to reimburse on a pro rata basis, based on ratio of the principal amount of securities purchased to the total principal amount of securities sold, the Issuer and the Guarantor for their expenses for the offering of the Designated Securities in the aggregate amount of $[          ] and shall pay such amount at the time of settlement of the Designated Securities.]

 

Additional Agreement of the Underwriters:

 

[Each of the Underwriters has agreed that it will not offer, sell, or deliver any of the Designated Securities, directly or indirectly, or distribute the Prospectus or any other offering material relating to the Designated Securities, in or from any jurisdiction except under circumstances that will, to the Underwriters’ knowledge and belief, result in compliance with the applicable laws.]

 

Specified funds for payment of purchase price:

 

[Federal Reserve funds]

 

Indenture:

 

Indenture dated February 10, 2009 (the “Indenture”), among the Issuer, Novartis Securities Investment Ltd., Novartis Finance S.A., the Guarantor and HSBC Bank USA, National Association, as Trustee

 

II-1

 

 

Maturity:

 

The [%] [Floating Rate][Zero Coupon][Notes][Debentures] will mature on [ ]

 

Interest Rate:

 

[%] [Floating Rate][See Floating Rate Provisions]

 

Interest Payment Date:

 

[months and dates]

 

Redemption Provisions:

 

[No provisions for redemption]

 

[The Designated Securities may be redeemed, otherwise than through the sinking fund, in whole or in part at the option of the Issuer, in the amount of [$] or an integral Multiple thereof,

 

[on or after            ,      at the following redemption prices (expressed in percentages of principal amount).

 

If [redeemed on or before            ,           %, and if] redeemed during the 12-month period beginning                                            ,

 

	Year		Redemption Price

 

and thereafter at 100% of their principal amount, together in each case with accrued interest to the redemption date.]

 

[on any interest payment date falling in or after            ,             at the election of the Issuer, at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption].

 

[Other possible redemption provisions, such as mandatory redemption upon occurrence of certain events or redemption for changes in tax law]

 

[Restriction on refunding]

 

II-2

 

 

[The Issuer may redeem the Designated Securities, prior to [            ] (the date that is [            ] month[s] prior to the scheduled maturity date for the Designated Securities) (the “par call date”), in whole or in part, at its option at any time and from time to time at a redemption price equal to the greater of

 

(i) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Designated Securities matured on the par call date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate (as defined in the Preliminary Prospectus relating to the Designated Securities) plus [            ] basis points less (b) interest accrued to the date of redemption; and

 

(ii) 100% of the principal amount of the Designated Securities to be redeemed.

 

plus, in either case, accrued and unpaid interest thereon to the redemption date.

 

At any time on or after the par call date, the Designated Securities will be redeemable at the Issuer’s option, in whole or in part, at any time and from time to time at a redemption price equal to 100% of the principal amount of the Designated Securities to be redeemed on that redemption date, together with, in each case, accrued and unpaid interest to, but excluding, the redemption date.

 

In the event of changes in withholding taxes applicable to payments of interest on the Designated Securities in Switzerland or another Relevant Taxing Jurisdiction (as defined in the Indenture) but excluding, for this purpose, the United States, the Issuer may redeem the Designated Securities in whole (but not in part) at any time, at a price equal to 100% of their principal amount plus accrued and unpaid interest to, but excluding, the redemption date.

 

Notice of any redemption will be mailed or electronically delivered (or otherwise transmitted in accordance with the depositary’s procedures) at least 10 days but not more than 60 days before the redemption date to each holder of Designated Securities to be redeemed.]

 

Sinking Fund Provisions:

 

[No sinking fund provisions]

 

[The Designated Securities are entitled to the benefit of a sinking fund to retire [$]                          principal amount of Designated Securities on      in each of the years     through     at 100% of their principal amount                          plus accrued interest] [, together with [cumulative] [noncumulative] redemptions at the option of the Issuer to retire an additional [$]                          principal amount of Designated Securities in the years through      at 100% of their principal amount plus accrued interest].

 

[If Securities are extendable debt Securities, insert—]

 

II-3

 

 

Other provisions:

 

[As provided in the Pricing Disclosure Package.]

 

Time of Delivery:

 

[Delivery of the Designated Securities will be made against payment therefore on or about [         ], which is the [third] business day after the date hereof.]

 

Closing Location for Delivery of Securities:

 

Names and addresses of Representatives:

 

Designated Representatives:
Address for Notices, etc.:

 

[Other Terms]*

 

*            A description of particular tax, accounting or other unusual features (such as the addition of event risk language) of the Securities should be set forth, or referenced to an attached and accompanying description, if necessary to ensure agreement as to the terms of the Securities to be purchased and sold. Such a description might appropriately be in the form in which such features will be described in the Prospectus Supplement for the offering.

 

II-4

 

 

SCHEDULE III

 

Issuer Free Writing Prospectus that is part of the Pricing Disclosure Package, if any:

 

[Pricing Term Sheet dated [           ].]

 

Additional Documents Incorporated by Reference, if any:

 

[None.][           ]

 

III-1

 

 

SCHEDULE IV

 

Pricing Disclosure Package:

 

[Basic Prospectus dated [●], 2024]

 

[Preliminary Prospectus Supplement dated [          ]]

 

[Pricing Term Sheet dated [          ]]

 

IV-1

 

 

SCHEDULE V

 

[Final Pricing Term Sheets]

 

V-1

 

 

SCHEDULE VI

 

(a) Free Writing Prospectus:

 

[Electronic road show]

 

VI-1

 

 

Exhibit 4.2

 

FORM OF GUARANTEED DEBT SECURITY

 

THIS SECURITY IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), OR A NOMINEE OF DTC, WHICH MAY BE TREATED BY THE COMPANY, THE GUARANTOR, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

REGISTERED NO. [  ]		PRINCIPAL AMOUNT: $[  ]
CUSIP NO. [  ]
ISIN NO. [  ]

 

NOVARTIS CAPITAL CORPORATION

 

[ ]% NOTES DUE [ ]

 

FULLY AND UNCONDITIONALLY GUARANTEED BY

 

NOVARTIS AG

 

Novartis Capital Corporation, a corporation organized under the laws of the State of Delaware (hereinafter called the Company, which term shall include any successor entity under the Indenture), for value received, hereby promises to pay to Cede & Co., as nominee for DTC, or registered assigns, upon presentation, the principal sum of [ ] Dollars ($[ ]) (or such other amount set forth on the Schedule of Increases or Decreases in the Global Security attached hereto) on [                 ,           ] (the Maturity Date) and to pay interest thereon from [                 ,           ] or from the most recent interest payment date to which interest has been paid or duly provided for, semi-annually in arrears on [                    ] and [                    ] in each year (each an Interest Payment Date), commencing on [                 ,           ], at the rate of [ ]% per annum, until the entire Principal hereof is paid or made available for payment.

 

The interest so payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Record Date for such interest, which shall be [                    ] or [                    ] (whether or not a Business Day (as defined below)), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Record Date, and may either be paid to the Person in whose name this Security is registered at the close of business on a special record date for the payment of defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series at least 15 calendar days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

Payment of the Principal of and interest on and any Additional Amounts in respect of this Global Security will be paid to DTC for the purpose of permitting DTC to credit the Principal and interest received by it in respect of this Global Security to the accounts of the beneficial owners thereof; provided, however, that if this Security is not a Global Security, payment of the Principal of, interest on and Additional Amounts, if any, in respect of this Security will be made at the office or agency of the Trustee in The City of New York, or elsewhere as provided in the Indenture, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; and provided, further, that at the option of the Company payment of interest may be made by (a) check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (b) transfer to an account of the Person entitled thereto located inside the United States.

 

 

 

 

If an Interest Payment Date or redemption date (including an Optional Make Whole Redemption Date (as defined on the reverse hereof)), or the Maturity Date, as the case may be, would fall on a day that is not a Business Day, then the Interest Payment Date or redemption date (including an Optional Make Whole Redemption Date), or the Maturity Date, as the case may be, will be postponed to the next succeeding Business Day, but no additional interest shall be paid unless the Company fails to make payment on such next succeeding Business Day.

 

Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in The City of New York are authorized or obligated by law, regulation or executive order to be closed and on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in Zurich, Switzerland.

 

Additional provisions of this Security are set forth following the signature page hereof, which provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

2

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed this [  ] day of [  ] [  ].

 

	NOVARTIS CAPITAL CORPORATION
	By:
	Name:
	Title:

 

3

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one or all of the Securities of the series designated “[ ]% Notes due [ ]” pursuant to the within-mentioned Indenture.

 

	HSBC BANK USA, NATIONAL ASSOCIATION,
	as Trustee
	By:
	Authorized Signatory

 

4

 

 

GUARANTEE

 

OF

 

NOVARTIS AG

 

For value received, Novartis AG, a stock corporation (Aktiengesellschaft) incorporated under the laws of Switzerland, having its principal executive offices at Lichtstrasse 35, CH-4056 Basel, Switzerland (the Guarantor, which term includes any Person as a successor Guarantor under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee on behalf of each such Holder the due and punctual payment of the Principal of, interest on and any Additional Amounts payable in respect of such Security and the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether on the Maturity Date, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein. In case of the failure of Novartis Capital Corporation, a corporation organized under the laws of the State of Delaware (the Company, which term includes any successor Person under such Indenture), to punctually make any such payment of Principal, interest or Additional Amounts or any such sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether on the Maturity Date or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company.

 

The indebtedness evidenced by this Guarantee is ranked equally and pari passu with all other unsecured and unsubordinated indebtedness of the Guarantor.

 

The Guarantor hereby agrees that its obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security or the Trustee or any other circumstance that may otherwise constitute a legal or equitable discharge of a guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the Principal of such Security, or increase the interest rate thereon, or alter the stated Maturity Date thereof, or increase the Principal of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Article 7 of such Indenture. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the Principal of, interest on and Additional Amounts payable in respect of such Security. This Guarantee is a guarantee of payment and not of collection.

 

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Company in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the Principal of, interest on and Additional Amounts payable in respect of all Securities of the same series issued under such Indenture shall have been paid in full.

 

No reference herein to such Indenture and no provision of such Indenture shall alter or impair the guarantees of the Guarantor, which are absolute and unconditional, of the due and punctual payment of the Principal of, interest on and Additional Amounts payable in respect of, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

 

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

 

All terms used in this Guarantee but not defined herein shall have the meanings assigned to them in such Indenture.

 

THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

5

 

 

IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed this [  ] day of [  ] [  ].

 

	NOVARTIS AG,
	as the Guarantor
	By:
	Name:
	Title:
	By:
	Name:
	Title:

 

6

 

 

[REVERSE OF SECURITY]

 

This Security is one or all of a duly authorized issue of securities of the Company (herein called the Securities) issued and to be issued in one or more series under an Indenture, dated as of February 10, 2009 (herein called the Indenture), among the Company, Novartis Securities Investment Ltd., Novartis Finance S.A., Novartis AG, as guarantor (the Guarantor), and HSBC Bank USA, National Association, as trustee (herein called the Trustee, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one or all of the series designated as the “[ ]% Notes due [ ].”

 

Additional Amounts are payable by the Company or the Guarantor, as applicable, as set forth in Section 4.5 of the Indenture, except that no Additional Amounts will be payable with respect to Taxes for or on account of any withholding or deduction imposed under the U.S. Internal Revenue Code of 1986, as amended, any U.S. Treasury Regulations or other guidance issued or agreements entered into thereunder, any official written interpretations thereof or any law implementing an intergovernmental approach thereto.

 

As provided in and subject to the provisions of the Indenture, the Securities in this series are redeemable in whole but not in part, at the discretion of the Company and at a redemption price equal to the Principal plus accrued but unpaid interest to, but excluding, the date of redemption (each such redemption, a Tax Redemption), if: (a) the Company determines that as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of a Relevant Taxing Jurisdiction, or any change in the application or official interpretation of such laws, regulations or rulings, or any change in the application or official interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which any such Relevant Taxing Jurisdiction is a party, the Company would be required to pay Additional Amounts with respect to such series of Securities on the next succeeding Interest Payment Date and the payment of such Additional Amounts cannot be avoided by the use of reasonable measures available to the Company or the Guarantor, or withholding tax has been or would be required to be withheld with respect to interest income received or receivable by the Company directly from the Guarantor (or any affiliate) and such withholding tax obligation cannot be avoided by the use of reasonable measures available to the Company or the Guarantor (or any affiliate) or (b) the Company determines, based upon an opinion of independent counsel of recognized standing selected by the Company, that, as a result of any action taken by any legislative body of, taxing authority of, or any action brought in a court of competent jurisdiction in, a Relevant Taxing Jurisdiction, whether or not such action was taken or brought with respect to the Company or the Guarantor, there is a substantial probability that the circumstances described in subsection (a) above would exist; provided, however, that no such notice of redemption may be given earlier than 90 calendar days prior to the earliest date on which the Company would be obligated to pay such Additional Amounts. The Company or the Guarantor will also pay to each Holder, or make available for payment to each such Holder, on the redemption date any Additional Amounts resulting from the payment of such redemption price.

 

In the event of a Tax Redemption, notice of such Tax Redemption to the Holders of Securities of any series to be redeemed in whole but not in part at the option of the Company shall be given by mailing notice of such Tax Redemption by first class mail, postage prepaid, at least 10 calendar days and not more than 60 calendar days prior to the date fixed for redemption to such Holders of Securities of such series at their last addresses as they shall appear upon the Security Register of the Company.

 

The Company, at its option at any time and from time to time [prior to [                 ,           ] (the Par Call Date)], may redeem the Securities (each such redemption, an Optional Make Whole Redemption), in whole or in part, at a redemption price (the Optional Make Whole Redemption Price) (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of (i) (a) the sum of the present values of the Remaining Scheduled Payments of principal and interest thereon discounted to the date of such Optional Make Whole Redemption (each such date, an Optional Make Whole Redemption Date), assuming such Securities matured on the Par Call Date, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus [          ] basis points less (b) interest accrued to the date of redemption; and (ii) 100% of the principal amount of such Securities to be so redeemed, plus in either case, accrued and unpaid interest thereon to the Optional Make Whole Redemption Date. [On or after the Par Call Date, the Company may redeem the Securities (each such redemption, an Optional Par Redemption), in whole or in part, at any time and from time to time, at a redemption price (the Optional Par Redemption Price) equal to 100% of the principal amount of such Securities to be so redeemed, plus accrued and unpaid interest thereon to the date of such Optional Par Redemption (each such date, an Optional Par Redemption Date).] Notwithstanding the foregoing, installments of interest on Securities that are due and payable on the Interest Payment Dates falling on or prior to an Optional Make Whole Redemption Date [or Optional Par Redemption Date, as applicable,] will be payable on the Interest Payment Date to Holders as of the close of business on the relevant Record Date according to the Securities and the Indenture. In connection with an Optional Make Whole Redemption, the following defined terms shall apply.

 

7

 

 

Treasury Rate means, with respect to any Optional Make Whole Redemption Date, the yield determined by the Company in accordance with the following two paragraphs.

 

The Treasury Rate shall be determined by the Company after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the redemption date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily)—H.15” (or any successor designation or publication) (H.15) under the caption “U.S. government securities–Treasury constant maturities–Nominal” (or any successor caption or heading) (H.15 TCM). In determining the Treasury Rate, the Company shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the redemption date to the Par Call Date (the Remaining Life); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields – one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life – and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the redemption date.

 

If on the third business day preceding the redemption date H.15 TCM is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such redemption date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date, as applicable. If there is no United States Treasury security maturing on the Par Call Date, but there are two or more United States Treasury securities with a maturity date equally distant from the applicable par call date, one with a maturity date preceding the Par Call Date, and one with a maturity date following the Par Call Date, the Company shall select the United States Treasury security with a maturity date preceding the Par Call Date. If there are two or more United States Treasury securities maturing on the Par Call Date, or two or more United States Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more United States Treasury securities the United States Treasury security that is trading closest to par based upon the average of the bid and asked prices for such United States Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable United States Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of the principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.

 

Remaining Scheduled Payments means, with respect to each Security to be so redeemed, the remaining scheduled payments of Principal thereof and interest thereon (not including any portion of such payments of interest accrued and unpaid to, but excluding, the Optional Make Whole Redemption Date)[, that would be due if the Security matured on the Par Call Date].

 

The Company’s actions and determinations in determining the Optional Make Whole Redemption Price [or Optional Par Redemption Price, as applicable,] shall be conclusive and binding for all purposes, absent manifest error.

 

Notice of any Optional Make Whole Redemption [or Optional Par Redemption] will be mailed or electronically delivered (or otherwise transmitted in accordance with the depositary’s procedures) at least 10 calendar days but not more than 60 calendar days before the Optional Make Whole Redemption Date [or Optional Par Redemption Date, as applicable,] to each Holder of the Securities to be so redeemed. Any redemption may, at the Company’s discretion, be subject to one or more conditions precedent. Any related written notice of redemption will describe the conditions precedent and, at the Company’s discretion, will indicate that the redemption date may be delayed or the written notice rescinded if all such conditions precedent have not been satisfied or waived by the Company. In the case of a partial redemption, selection of the Securities for redemption will be made pro rata, by lot or by such other method as the Trustee in its sole discretion deems appropriate and fair. No Securities of any series of a principal amount of $2,000 or less will be redeemed in part. If any Security is to be redeemed in part only, the notice of redemption that relates to such Security will state the portion of the principal amount of the applicable Security to be redeemed. A new Security in a principal amount equal to the unredeemed portion of the applicable Security will be issued in the name of the holder of such Security upon surrender for cancellation of such original Security. For so long as any Securities are registered in the name of the DTC (or another depository), the redemption of such Security shall be done in accordance with the policies and procedures of the depositary.

 

8

 

 

Unless the Company defaults in payment of the Optional Make Whole Redemption Price [or Optional Par Redemption Price, as applicable,] on and after the Optional Make Whole Redemption Date [or Optional Par Redemption Date, as applicable,], interest will cease to accrue on the Securities or portions thereof called for redemption.

 

The Indenture contains provisions for defeasance of (a) the entire indebtedness of this Security and (b) certain restrictive covenants and the related defaults and Events of Default applicable to the Company and the Guarantor, in each case, upon compliance by the Company and the Guarantor with certain conditions set forth in the Indenture, which provisions apply to this Security.

 

Notwithstanding Section 7.1 of the Indenture, only if one or more of the following Events of Default with respect to the Securities of this series shall occur and be continuing may the Principal of the Securities of this series be declared due and payable in the manner and with the effect provided in the Indenture:

 

·

default in the payment of all or any part of the Principal (or premium, if any) of any of the [  ]% Notes due [  ]when the same becomes due and payable at maturity, upon acceleration, redemption or mandatory repurchase, including as a sinking fund installment, or otherwise, and such default continues for more than two Business Days;

 

·

default in the payment of any interest on, or any Additional Amounts payable in respect of, any of the [  ]% Notes due [  ] when the same becomes due and payable, and such default continues for a period of 30 calendar days;

 

·

default or breach of any other covenant or agreement of the Company or the Guarantor in this Indenture with respect to any of the [  ]% Notes due [  ] (other than a covenant or agreement a default in whose performance or whose breach is specifically dealt with elsewhere in Section 7.1 of the Indenture), and such default or breach continues for a period of 90 calendar days after there has been given to the Company and the Guarantor by the Trustee or to the Company, the Guarantor and the Trustee by the Holders of 25% or more in aggregate principal amount of the Securities of such series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

 

·

an encumbrancer or a receiver or a person with similar functions appointed for execution (in Switzerland a Liquidator or Konkursverwalter) taking possession of the whole or any substantial part of the assets or undertaking of the Company or the Guarantor or a distress, execution or other process being levied or enforced upon or sued out against a substantial part of the property or assets of the Company or the Guarantor and not being paid, discharged, removed or stayed within 30 calendar days;

 

·

the Company or the Guarantor stopping payment or ceasing business (except in each case in circumstances previously approved by the Holders of a majority in Principal (or, if any Securities are Original Issue Discount Securities, such portion of the Principal of the Securities of the relevant series as may then be accelerated under Section 7.2 of the Indenture) of the outstanding Securities of all series affected (all such series voting as one class);

 

·

the Company becoming bankrupt or insolvent or entering into a moratorium or making a general assignment for the benefit of its creditors;

 

·

the Guarantor becoming bankrupt or insolvent (or is obliged to notify the court of its financial situation in accordance with Article 725 (2) of the Swiss Code of Obligations) or entering into a provisional or definitive moratorium (provisorische or definitive Nachlassstundung) or making a general arrangement with its creditors (Nachlassvertrag);

 

·

an order being made or effective resolution passed for the winding-up or dissolution of the Company or the Guarantor except (i) a winding-up or dissolution, the terms of such winding-up or dissolution having previously been approved by the Holders of a majority in Principal (or, if any Securities are Original Issue Discount Securities, such portion of the Principal of the Securities of the relevant series as may then be accelerated under Section 7.2 of the Indenture) of the outstanding Securities of all series affected (all such series voting as one class) or (ii) a winding-up or dissolution in connection with any consolidation, merger, sale, lease or conveyance in accordance with Section 5 of the Indenture; or

 

·

if the Guarantee with respect to any of the [  ]% Notes due [  ] ceases to be, or is claimed by the Guarantor not to be, in full force and effect.

 

9

 

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of all such affected series at the time outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request and, for 60 calendar days after receipt of such notice, request and offer of indemnity, the Trustee shall have failed to institute any such proceeding, and, during such 60-calendar-day period, the Trustee shall not have received from the Holders of a majority in principal amount of the Securities of this series at the time outstanding a direction inconsistent with such request. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Securities under the Indenture at any time by the Company, the Guarantor and the Trustee with the consent of the Holders of not less than a majority in principal amount of the outstanding Securities affected by such amendment. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company or the Guarantor, or both, with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

The Company may, from time to time, without the consent of the Holders of the Securities, increase the principal amount of the Securities by issuing additional Securities in the future on the same terms and conditions as the Securities in all respects, except for any differences in the issue date, issue price and first payment of interest thereon, and with the same CUSIP number as the Securities. The Securities and any additional Securities shall rank equally and ratably and shall be treated as a single series for all purposes under the Indenture. The Company will not issue any additional Securities unless such additional Securities are fungible with the Securities for U.S. federal income tax purposes.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place of payment where the Principal and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Guarantor and the Trustee for the Securities duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denomination and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations set forth therein, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Company, the Guarantor, the Trustee, or any such agent shall be affected by notice to the contrary.

 

10

 

 

The obligations of the Company and the Guarantor under the Indenture and this Security and all documents delivered in the name of the Company or the Guarantor, as the case may be, in connection herewith and therewith do not and shall not constitute personal obligations of the directors, officers, employees, agents or shareholders of the Company or the Guarantor or any of them, and shall not involve any claim against or personal liability on the part of any of them, and all persons including the Trustee shall look solely to the assets of the Company and the Guarantor for the payment of any claim thereunder or for the performance thereof and shall not seek recourse against such directors, officers, employees, agents or shareholders of the Company or the Guarantor or any of them or any of their personal assets for such satisfaction. The performance of the obligations of the Company and the Guarantor under the Indenture and this Security and all documents delivered in the name of the Company or the Guarantor, as the case may be, in connection therewith shall not be deemed a waiver of any rights or powers of the Company or the Guarantor or their respective directors or shareholders under the Company’s or the Guarantor’s respective Articles of Incorporation.

 

All terms used in this Security but not defined herein shall have the meanings assigned to them in the Indenture.

 

THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused “CUSIP” numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Securities, and reliance may be placed only on the other identification numbers printed hereon.

 

11

 

 

SCHEDULE OF INCREASES OR DECREASES IN THE GLOBAL SECURITY

 

 

The initial outstanding principal amount of this Global Security is $__________. The following increases or decreases in this Global Security have been made:

 

Date of Exchange		Amount of  decreases in  Principal Amount of this Global Security		Amount of increases in  Principal Amount of this Global Security		Principal amount of this Global Security following such decreases or increases		Signature of authorized signatory of Trustee

 

12

 

 

ASSIGNMENT AND TRANSFER FORM

 

FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(Please Print or Typewrite Name and Address, including Zip Code, of Assignee)
the within Security of Novartis Capital Corporation and
	hereby does irrevocably constitute and appoint
attorney to transfer said Security on the books kept for the registration thereof with full power of substitution in the premises

 

Dated:
Signature

 

NOTICE: The signature to this assignment must correspond with the name as it appears on the first page of the within Security in every particular, without alteration or enlargement or any change whatever.

 

Signature Guaranteed:

 

NOTICE: Signature(s) must be guaranteed by an “eligible guarantor institution” that is a member or participant in a “signature guarantee program” (e.g., the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program and the New York Stock Exchange Medallion Program).

 

13

 

Exhibits 5.1 and 23.1

 

OPINION OF DAVIS POLK & WARDWELL LLP

 

September 16, 2024

 

Novartis AG
Lichtstrasse 35
4056 Basel
Switzerland

 

Novartis Capital Corporation
1 Health Plaza
East Hanover, New Jersey 07936

 

Ladies and Gentlemen:

 

Novartis Capital Corporation, a Delaware corporation (the “Company”), and Novartis AG, a stock corporation organized under the laws of Switzerland (the “Guarantor”), are filing with the Securities and Exchange Commission a Registration Statement on Form F-3 (the “Registration Statement”) and the related Prospectus (the “Prospectus”) for the purpose of registering under the Securities Act of 1933, as amended (the “Securities Act”), the Company’s debt securities (the “Notes”) and the guarantees thereof by the Guarantor (the “Guarantees” and, together with the Notes, the “Securities”). The Securities may be issued pursuant to an indenture, among Novartis Capital Corporation, Novartis Securities Investment Ltd. and Novartis Finance S.A., as issuers, Novartis AG, as guarantor, and HSBC Bank USA, National Association, as trustee (the “Trustee”), dated as of February 10, 2009 (the “Indenture”).

 

We, as your counsel, have examined originals or copies of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion.

 

In rendering the opinions expressed herein, we have, without independent inquiry or investigation, assumed that (i) all documents submitted to us as originals are authentic and complete, (ii) all documents submitted to us as copies conform to authentic, complete originals, (iii) all documents filed as exhibits to the Registration Statement that have not been executed will conform to the forms thereof, (iv) all signatures on all documents that we reviewed are genuine, (v) all natural persons executing documents had and have the legal capacity to do so, (vi) all statements in certificates of public officials and officers of the Company and the Guarantor that we reviewed were and are accurate and (vii) all representations made by the Company and the Guarantor as to matters of fact in the documents that we reviewed were and are accurate.

 

Based upon the foregoing, and subject to the additional assumptions and qualifications set forth below, we advise you that, in our opinion, assuming the Indenture has been duly authorized, executed and delivered by the Trustee, the Guarantor and each other party thereto; the specific terms of a particular series of Notes and any Guarantees endorsed thereon have been duly authorized and established in accordance with the Indenture; and such Notes and any Guarantees endorsed thereon have been duly authorized, executed, authenticated, issued and delivered in accordance with the Indenture and the applicable underwriting or other agreement against payment therefor, such Notes will constitute valid and binding obligations of the Company and each of the related Guarantees will constitute valid and binding obligations of the Guarantor, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability, and may be subject to possible judicial or regulatory actions giving effect to governmental actions or foreign laws affecting creditors' rights, provided that we express no opinion as to the (x) effect of fraudulent conveyance, fraudulent transfer or similar provision of applicable law on the conclusions expressed above or (y) validity, legally binding effect or enforceability of any provision that permits holders to collect any portion of stated principal amount upon acceleration of the Notes to the extent determined to constitute unearned interest.

 

 

 

 

In connection with the opinions expressed above, we have assumed that, at or prior to the time of the delivery of any Securities, (i) the Board of Directors of the Company and the Board of Directors of the Guarantor, as the case may be, shall have duly established the terms of the Notes and the Guarantees and duly authorized the issuance and sale of the Securities and such authorization shall not have been modified or rescinded; (ii) (1) the Company shall remain validly existing as a corporation in good standing under the laws of the State of Delaware and (2) the Guarantor is, and shall remain, validly existing as a stock corporation organized under the laws of Switzerland; (iii) the Registration Statement shall have become effective and such effectiveness shall not have been terminated or rescinded; (iv) the Indenture, the Notes and the Guarantees are each valid, binding and enforceable agreements of each party thereto (other than as expressly covered above in respect of the Company and the Guarantor); and (v) there shall not have occurred any change in law affecting the validity or enforceability of such Security. We have also assumed that the terms of any Security whose terms are established subsequent to the date hereof and the issuance, execution, delivery and performance by the Company or the Guarantor of any such Security (a) are within their corporate powers, (b) do not contravene, or constitute a default under, (1) the certificate incorporation, by-laws or other constitutive documents of the Company or (2) the articles of incorporation, organizational regulations or other constitutive documents of the Guarantor, (c) require no action by or in respect of, or filing with, any governmental body, agency or official and (d) do not contravene, or constitute a default under, any provision of applicable law or public policy or regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon the Company or the Guarantor.

 

We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York and the General Corporation Law of the State of Delaware. Insofar as the foregoing opinion involves matters governed by the laws of Switzerland, we have relied, without independent inquiry or investigation, on the opinion of Advestra AG delivered to you today.

 

 

 

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement referred to above and further consent to the reference to our name under the caption “Legal Matters” in the Prospectus. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

 

Very truly yours,

 

/s/ Davis Polk & Wardwell LLP

 

 

 

Exhibit 5.2

 

 

 

Advestra AG, Uraniastrasse 9, 8001 Zurich

 

Novartis AG
Lichtstrasse 35
4056 Basel
Switzerland

 

Novartis Capital Corporation
1 Health Plaza

East Hanover, NJ 07936

United States

 

Zurich, 16.09.2024

 

Novartis AG – Form F-3 Registration Statement – Swiss Opinion Letter

 

Ladies and Gentlemen,

 

We have been instructed by Novartis AG (the "Guarantor"), in connection with the registration under the United States Securities Act of 1933, as amended (the "Securities Act"), on Form F-3 (the "Registration Statement") of an unspecified aggregate principal amount of debt securities (the "Debt Securities") to be issued by Novartis Capital Corporation (the "Issuer"), and to be fully and unconditionally guaranteed by the Guarantor as to payment of principal and interest pursuant to guarantees issued by the Guarantor from time to time (the "Guarantees" and together with the Debt Securities, the "Guaranteed Debt Securities" and each a "Guaranteed Debt Security").

 

This legal opinion relates to Swiss law in effect on the date hereof and such laws and their interpretation are subject to change. In the absence of explicit statutory law or established case law, we base our opinions on our independent professional judgement. We express no opinion on any matter governed by the laws of any other jurisdiction. We do not assume any obligation to inform you of any facts or changes of law or the interpretation thereof occurring or coming to our attention after the date of this legal opinion, and which might have an impact on any matters addressed in our opinions.

 

1.

Documents

 

In arriving at the opinions expressed in section 3, we have exclusively examined and relied on the following documents (each a "Document"):

 

(a)

A pdf copy of the Registration Statement dated 16 September 2024 (the "Registration Statement");

 

Advestra AG ▪  Uraniastrasse 9 ▪ 8001 Zurich ▪ T [phone] ▪ [e-mail] ▪ www.advestra.ch ▪ CHE-385.508.136MWST

 

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Novartis AG – Form F-3 Registration Statement – Swiss Opinion Letter

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(b)

A pdf copy of the executed indenture dated 10 February 2009 among the Issuer, Novartis Securities Investment Ltd. and Novartis Finance S.A., (as issuers), the Guarantor and HSBC Bank USA, National Association (as Trustee) attached as Exhibit 4.1 to the Registration Statement (the "Indenture");

 

(c)

The form of Guaranteed Debt Security attached as Exhibit 4.2 to the Registration Statement (the "Form of Guaranteed Debt Security");

 

(d)

An extract from the Commercial Register of the Canton of Basel-Stadt in respect of the Guarantor, certified by such Commercial Register as of 13 September 2024 (the "Extract");

 

(e)

The articles of association of the Guarantor dated 5 March 2024, certified by the Commercial Register of the Canton of Basel-Stadt as of 13 September 2024 to correspond to the latest version filed with such Commercial Register (the "Articles");

 

(f)

A pdf copy of the Guarantor’s Regulations of the Board of Directors, its Committees and the Executive Committee of the Guarantor internal organizational regulations effective 12 December 2007 and in their version dated 7 March 2023 (collectively, the "Organizational Regulations");

 

(g)

A pdf copy of the Chairman’s Committee Charter of the Guarantor effective 12 December 2007 (the "Charter");

 

(h)

A copy of the Management Authorization Levels of the Guarantor effective 1 July 2008 (the "Authorization Levels" and together with the Organizational Regulations and the Charter, the "Internal Regulations");

 

(i)

A pdf copy of the excerpt of the minutes of meetings of Guarantor’s the board of directors regarding the authorization of the filing of the Registration Statement, the issuance of Guaranteed Debt Securities and the Guarantee, dated 27 August 2024 (the "Minutes"); and

 

(j)

A pdf copy of the resolutions of the Chairman’s Committee of the Guarantor dated 20 August 2008 regarding, inter alia, the execution of the Indenture (as defined below) to the extent the Guarantor is a party thereof (the "Chairman Committee Resolution").

 

We have not reviewed or examined any document other than the Documents listed above or any non-Swiss statutes and regulations, including those cross-referenced in any of the Documents and have not made any further enquiries or conducted any due diligence.

 

2.

Assumptions

 

In arriving at the opinions expressed in section 3, we have assumed (with your permission and without verification) each of the following (each an "Assumption"):

 

(a)

All Documents submitted to us as copies conform to their respective originals and such originals are complete and authentic.

 

(b)

All signatures (whether manuscript or electronic) on the Documents are the genuine signatures of the individuals concerned and were affixed, inserted or provided by such individuals, each individual has consented to the release of his or her signature, and the form of each such signature (whether manuscript or electronic) is accepted for purposes of due execution of such Documents under all relevant laws other than Swiss law.

 

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Novartis AG – Form F-3 Registration Statement – Swiss Opinion Letter

16.09.2024

 

(c)

All Documents remain in full force and effect as of the date of this legal opinion and have not been amended, revoked, rescinded or affected by any action subsequent to their execution or taking and the Registration Statement would be filed and become effective in the form reviewed by us.

 

(d)

The information contained in the Extract is correct and up to date as of the date of this legal opinion in all respects relevant to our opinions.

 

(e)

The Articles and the Internal Regulations were complete, up to date and in full force and effect as of the date of this legal opinion or the date of the Indenture, respectively.

 

(f)

The Minutes are a true record of the proceedings described therein in duly convened, constituted and quorate meetings of the board of directors of the Guarantor, and the resolutions set out therein were validly passed.

 

(g)

The Minutes and the Chairman Committee Resolution have been duly passed in accordance with Swiss law, the Articles, the Internal Regulations and (i) the Charter, the Authorization Levels and the Organizational Regulations dated January 2008 were validly in force and effect at the date of passing of the Chairman Committee Resolution and (ii) the Regulations dated 7 March 2023 were validly in force and effect at the date of passing of the resolutions contained in the Minutes.

 

(h)

The Issuer is a (directly or indirectly) wholly-owned subsidiary company of the Guarantor.

 

(i)

The Guarantor did not pass a resolution for its dissolution, winding-up or liquidation and the Guarantor is a going concern; no petition has been presented or order made by a court or other competent authority for the dissolution, winding-up, liquidation, bankruptcy, moratorium, composition with creditors or administration of the Guarantor; no receiver, trustee in bankruptcy, administrator or similar officer has been appointed in relation to the Guarantor or any of its assets or revenues; the Guarantor is not insolvent (zahlungsunfähig) or overindebted (überschuldet) in the sense of article 725b CO; and no insolvency or over-indebtedness is threatening or expected.

 

(j)

All parties to the Indenture entered into the Indenture for bona fide commercial reasons, at arm's-length commercial terms and as a result of bona fide negotiations; the terms and conditions of the Indenture are in the best interest of all parties thereto; and the Indenture reflects the true intent and the entire agreement among the parties thereto.

 

(k)

None of the directors or officers of any party to the Indenture or any individual who has executed the Indenture on behalf of any party has or had a conflict of interest with such party in respect of the Indenture or any related documents or transactions, or otherwise lacks capacity, that would preclude such director, officer or individual from validly representing (or granting a power of attorney in respect of the Indenture or any related documents) such party.

 

(l)

Unless expressly opined on herein, all representations and warranties made in the Documents as well as all information contained in the Documents and all statements made to us in connection with the Documents are true and accurate as of the date they were made.

 

(m)

The Guarantor did not enter into any other agreement or arrangement which would impair its capacity, power and authority to enter into, and perform its obligations under, the Indenture.

 

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Novartis AG – Form F-3 Registration Statement – Swiss Opinion Letter

16.09.2024

 

(n)

All authorizations, approvals, licenses, consents, filings, registrations, notarizations, notices, publications, exemptions or other requirements of or with governmental, judicial or other public bodies and authorities which may be necessary under any applicable laws or regulations (other than those of Switzerland) in connection with the entry into and performance of any Document have been obtained, made or fulfilled in due time and remain (and, where relevant, will remain) in full force and effect, any related conditions have been fulfilled and any related covenants have been and will be complied with.

 

(o)

There was no judicial or administrative order which would prevent the entry into, or the performance of the transactions contemplated by, any Document by the Guarantor.

 

(p)

The Guaranteed Debt Securities, when issued, will conform to the Form of Guaranteed Debt Security, the Indenture and the descriptions of the Guaranteed Debt Securities contained in the Registration Statement, the Guarantees, when issued, will be endorsed upon such Guaranteed Debt Securities and the text of the Guarantees will conform the "Guarantee of Novartis AG" as included in the Form of Guaranteed Debt Security.

 

(q)

To the extent any Document has to be executed or any obligation has to be performed under any applicable law other than Swiss law or in any jurisdiction outside Switzerland, such execution and performance has not been and will not be illegal, invalid or unenforceable by virtue of the laws of such jurisdiction.

 

(r)

No laws and regulations other than those of Switzerland affect any of the conclusions stated in this legal opinion.

 

(s)

There are no facts, circumstances or events not reflected in the Documents that would be relevant to our opinions.

 

3.

Opinion

 

Based upon the Assumptions and subject to the Qualifications (as defined below), we are of the opinion that under Swiss law as currently in force and interpreted (and to the extent it depends on such laws):

 

(a)

The Guarantor is a company limited by shares (Aktiengesellschaft) incorporated and validly existing under Swiss law.

 

(b)

The Guarantor has and had at each relevant time, the necessary corporate capacity and power to execute and file the Registration Statement, and to enter into and to perform its obligations under the Indenture and the Guarantees.

 

(c)

The Guarantor has taken all necessary corporate action to authorize the execution and delivery of the Indenture.

 

4/6

Novartis AG – Form F-3 Registration Statement – Swiss Opinion Letter

16.09.2024

 

4.

Qualifications

 

The opinions expressed in section 3 are subject to the effects of Swiss (a) laws on debt enforcement and insolvency (including laws in respect of bankruptcy, moratoria, protective or securing measures and composition or administration proceedings, and provisions for the avoidance of transactions made to the detriment of or creating a preference among creditors and similar laws affecting the rights of creditors and secured parties in general), (b) laws and principles of general application (including the prohibition of the abuse of rights (Rechtsmissbrauch), protection against excessive commitment, the principle of good faith (Grundsatz von Treu und Glauben), rules in respect of contracting under the influence of error, fraud, misrepresentation, threat or duress, exploitation, insufficiently determined undertakings, impossibility of performance, set-off and material alteration of relevant circumstances (clausula rebus sic stantibus)), (c) public policy considerations and (d) laws and rules of civil procedure as applicable to creditors and debtors or claimants and defendants generally. We express no opinion herein as to any matter of accounting, auditing or taxation, or as to any regulatory or commercial matter. Our opinions expressed in section 3 above are further subject to the following qualifications and limitations (each a "Qualification"):

 

(a)

Our opinions expressed in section 3 are strictly limited to matters governed by Swiss law and thus to opinions on certain Swiss law matters.

 

(b)

In referring to the terms of agreements or other documents, we express no opinion on whether and to what extent these are sufficiently specific or leave room for interpretation which may become a matter of the discretion of the courts.

 

(c)

Except as explicitly stated otherwise in section 3, we express no opinion on the accuracy of any representation, warranty, calculation, valuation, or statement of fact (or factual background assumed) as may be contained in the documents examined, or any factual backgrounds therein assumed, or on the question whether any conditions therein stated have been fulfilled.

 

(d)

Except as explicitly stated herein, we express no opinion as to whether the Registration Statement is accurate, true, correct, complete and not misleading. In particular, we express no opinion on whether the Registration Statement provides sufficient information for investors to reach an informed assessment of the Issuer and the Guaranteed Debt Securities. In addition, we have not been responsible for investigating or verifying the accuracy of the facts contained in the Registration Statement.

 

(e)

We do not express any opinion herein about the choice of law or the submission to the jurisdiction as set forth in, or to the enforceability of judgements relating to the Indenture and the Guaranteed Debt Securities.

 

5.

Reliance, Disclosure and Governing Law

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and consent to the reference to Advestra AG in the Registration Statement under "Legal Matters". In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

 

This opinion is furnished by us, as special Swiss legal counsel to the Guarantor, in connection with the filing of the Registration Statement, and, except as provided in the immediately preceding paragraph, is not to be used, circulated, quoted or otherwise referred to for any other purpose without our express written permission, or relied upon by any other person. This opinion is strictly limited to the matter stated in it and does not apply by implication to any other matters. We do not assume any obligation to inform you of any facts or circumstances occurring or coming to our attention subsequently to the date of this letter and which might have an impact on any matters addressed in our opinions given herein.

 

In this legal opinion, Swiss legal concepts are expressed in English terms and not in their original terms in an official language of Switzerland. The concepts concerned may not be identical to the concepts described by the same English terms as they exist under the laws of other jurisdictions.

 

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Novartis AG – Form F-3 Registration Statement – Swiss Opinion Letter

16.09.2024

 

This legal opinion letter shall be governed by and construed in accordance with Swiss law. This legal opinion letter may only be relied upon on the express condition that any issues of interpretation arising hereunder will be governed by Swiss law and this legal opinion letter shall be subject to the exclusive jurisdiction of the courts of the city of Zurich (Zurich 1), Switzerland.

 

Yours sincerely,

 

/s/ A. Weber
Advestra AG

 

6/6

 

 

Exhibit 23.3

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated January 30, 2024, with respect to the consolidated financial statements of Novartis AG, and the effectiveness of internal control over financial reporting, incorporated herein by reference and to the reference to our firm under the heading “Experts” in the prospectus.

 

/s/ KPMG AG

Basel, Switzerland

September 16, 2024

 

 

 

 

Exhibit 23.4

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the incorporation by reference in this Registration Statements on Form F-3 of Novartis AG of our report dated February 1, 2022, except for the effects of discontinued operations discussed in Note 1 to the consolidated financial statements, which is as of January 30, 2024, relating to the financial statements, which appears in Novartis AG’s Annual Report on Form 20-F for the year ended December 31, 2023. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

/s/ PricewaterhouseCoopers AG

 

Basel, Switzerland

September 16, 2024

 

 

 

Exhibit 25.1

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST

INDENTURE ACT OF 1939 OF A CORPORATION

DESIGNATED TO ACT AS TRUSTEE

 

CHECK IF AN APPLICATION TO DETERMINE

ELIGIBILITY OF A TRUSTEE PURSUANT TO

SECTION 305(b)(2) ___

 

HSBC Bank USA, National Association

(Exact name of trustee as specified in its charter)

 

	N/A	20-1177241
	(Jurisdiction of incorporation	(I.R.S. Employer
	or organization if not a U.S.	Identification No.)
	national bank)
	66 Hudson Blvd East
	New York, New York	10001
	(Address of principal executive offices)	(Zip Code)

 

Thomas Mackay, Director

HSBC Bank USA, National Association

66 Hudson Blvd East

New York, New York 10001

Tel: [phone]

(Name, address and telephone number of agent for service)

 

Novartis Capital Corporation

(Exact name of obligor as specified in its charter)

 

	Delaware (State or other jurisdiction of incorporation or organization)	26-3086456 (I.R.S. Employer Identification No.)
	One Health Plaza East Hanover, New Jersey (Address of principal executive offices)	07936 (Zip Code)

 

Novartis AG

(Exact name of registrant as specified in its charter)

 

	Switzerland (State or other jurisdiction of incorporation or organization)	Not Applicable (I.R.S. Employer Identification No.)
	Lichtstrasse 35 4056 Basel, Switzerland (Address of principal executive offices)	(Zip Code)

 

Debt Securities

(Title of Indenture Securities)

 

 

 

 

 

 

General

 

Item 1. General Information.

 

Furnish the following information as to the trustee:

 

(a)  Name and address of each examining or supervisory authority to which it is subject.

 

Comptroller of the Currency, New York, NY.

 

Federal Deposit Insurance Corporation, Washington, D.C.

 

Board of Governors of the Federal Reserve System, Washington, D.C.

 

(b) Whether it is authorized to exercise corporate trust powers.

 

Yes.

 

Item 2. Affiliations with Obligor.

 

If the obligor is an affiliate of the trustee, describe each such affiliation.

 

None

 

Items 3-15. Not Applicable

 

 

 

 

Item 16. List of Exhibits

 

Exhibit

 

T1A(i)	(4)	Copy of the Amended and Restated Articles of Association of HSBC Bank USA, National Association and as amended and restated as of November 7, 2022.
T1A(ii)	(2)	Certificate of the Comptroller of the Currency dated July 1, 2004 as to the authority of HSBC Bank USA, National Association to commence business.
T1A(iii)	(1)	OCC Certification of Fiduciary Powers dated February 20, 2019 for HSBC Bank USA, National Association
T1A(iv)	(4)	Copy of the existing By-Laws of HSBC Bank USA, National Association.
T1A(v)		Not applicable.
T1A(vi)	(3)	Consent of HSBC Bank USA, National Association required by Section 321(b) of the Trust Indenture Act of 1939.
T1A(vii)		Copy of the latest report of condition of the trustee (June 30, 2024), published pursuant to law or the requirement of its supervisory or examining authority.
T1A(viii)		Not applicable.
T1A(ix)		Not applicable.

 

(1)

Exhibit previously filed with the Securities and Exchange Commission with Registration No. 333-236366 and incorporated herein by reference thereto.

 

(2)

Exhibit previously filed with the Securities and Exchange Commission with Registration No. 333-118523 and incorporated herein by reference thereto.

 

(3)

Exhibit previously filed with the Securities and Exchange Commission with Registration No. 333-243528 and incorporated herein by reference thereto.

 

(4)

Exhibit previously filed with the Securities and Exchange Commission with Registration No. 333-269690 and incorporated herein by reference thereto.

 

[Signature Page Follows]

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, HSBC Bank USA, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York on the 12th day of September, 2024.

 

	HSBC BANK USA, NATIONAL ASSOCIATION
	By:	/s/ Kevin Glatting
		Kevin Glatting
		Assistant Vice President

 

 

 

 

Exhibit T1A(vii)

 

Consolidated Report of Condition of

 

HSBC Bank USA, National Association

of Tysons, VA 22102

and Foreign and Domestic Offices,

at the close of business June 30, 2024, filed in accordance with 12 U.S.C. §161 for National Banks.

 

		Dollar Amounts
		In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin		$	880,719
Interest-bearing balances		$	29,201,777
Securities:
Held-to-maturity securities		$	15,130,714
Available-for-sale debt securities		$	26,907,458
Equity securities with readily determinable fair values not held for trading		$	118,015
Federal funds sold and securities purchased under agreements to resell:
Federal funds sold in domestic offices		$	0
Securities purchased under agreements to resell		$	1,318,406
Loans and lease financing receivables:
Loans and leases held for sale		$	206,700
Loans and leases, held for investment		$	56,936,789
LESS: Allowance for credit losses on loans and leases		$	540,933
Loans and leases held for investment, net of allowance		$	56,395,856
Trading assets		$	21,899,868
Premises and fixed assets (including capitalized leases)		$	610,194
Other real estate owned		$	2,520
Investments in unconsolidated subsidiaries and associated companies		$	6,120
Direct and indirect investments in real estate ventures		$	0
Intangible assets		$	477,046
Other assets		$	5,892,317
Total assets		$	159,047,710
LIABILITIES
Deposits:
In domestic offices		$	124,422,083
Noninterest-bearing		$	25,144,928
Interest-bearing		$	99,277,155
In foreign offices, Edge and Agreement subsidiaries, and IBFs		$	7,514,282
Noninterest-bearing		$	0
Interest-bearing		$	7,514,282
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased in domestic offices		$	0
Securities sold under agreements to repurchase		$	848,721
Trading liabilities		$	3,188,140
Other borrowed money
(includes mortgage indebtedness and obligations under capitalized leases)		$	2,393,086
Subordinated notes and debentures		$	1,455,905
Other liabilities		$	3,379,008
Total liabilities		$	143,201,225
EQUITY CAPITAL
Perpetual preferred stock and related surplus		$	1,500,000
Common stock		$	2,001
Surplus (exclude all surplus related to preferred stock)		$	13,048,369
Retained earnings		$	3,384,245
Accumulated other comprehensive income		$	2,088,130
Other equity capital components		$	0
Total bank equity capital		$	15,846,485
Noncontrolling (minority) interests in consolidated subsidiaries		$	0
Total equity capital		$	15,846,485
Total liabilities, and equity capital		$	159,047,710

 

 

 

Calculation of Filing Fee Tables

F-3

NOVARTIS AG

Table 1: Newly Registered and Carry Forward Securities

		Security Type	Security Class Title	Fee Calculation or Carry Forward Rule	Amount Registered	Proposed Maximum Offering Price Per Unit	Maximum Aggregate Offering Price	Fee Rate	Amount of Registration Fee	Carry Forward Form Type	Carry Forward File Number	Carry Forward Initial Effective Date	Filing Fee Previously Paid in Connection with Unsold Securities to be Carried Forward
Newly Registered Securities
Fees to be Paid	1	Debt	Debt Securities	457(r)				0.0001476
Fees to be Paid	2	Debt	Guarantees of Debt Securities	457(r)				0.0001476
Fees Previously Paid
Carry Forward Securities
Carry Forward Securities
			Total Offering Amounts:				$ 0.00		$ 0.00
			Total Fees Previously Paid:						$ 0.00
			Total Fee Offsets:						$ 0.00
			Net Fee Due:						$ 0.00

Offering Note

1	(1) In accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, as amended (the "Securities Act"), Novartis AG and Novartis Capital Corporation (collectively, the "Registrants") are deferring payment of all of the registration fee. Registration fees will be paid subsequently on a "pay as you go" basis. The Registrants will calculate the registration fee applicable to an offer of securities pursuant to this Registration Statement based on the fee payment rate in effect on the date of such fee payment. (2) An indeterminate aggregate initial offering price and number or amount of the securities of each identified class is being registered as may from time to time be issued at indeterminate prices, including securities that may be issued upon exercise, conversion, settlement or exchange of any securities offered hereunder.
2	(1) In accordance with Rules 456(b) and 457(r) under the Securities Act, the Registrants are deferring payment of all of the registration fee. Registration fees will be paid subsequently on a "pay as you go" basis. The Registrants will calculate the registration fee applicable to an offer of securities pursuant to this Registration Statement based on the fee payment rate in effect on the date of such fee payment. (2) No separate consideration will be received for the guarantees of securities being registered. In accordance with Rule 457(n), no registration fee is payable with respect to such guarantees.

Submission	Sep. 13, 2024
Submission [Line Items]
Central Index Key	0001114448
Registrant Name	NOVARTIS AG
Form Type	F-3
Submission Type	F-3ASR
Fee Exhibit Type	EX-FILING FEES

Offerings	Sep. 13, 2024
Offering: 1
Offering:
Fee Previously Paid	false
Rule 457(r)	true
Security Type	Debt
Security Class Title	Debt Securities
Fee Rate	0.01476%
Offering Note	(1) In accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, as amended (the "Securities Act"), Novartis AG and Novartis Capital Corporation (collectively, the "Registrants") are deferring payment of all of the registration fee. Registration fees will be paid subsequently on a "pay as you go" basis. The Registrants will calculate the registration fee applicable to an offer of securities pursuant to this Registration Statement based on the fee payment rate in effect on the date of such fee payment. (2) An indeterminate aggregate initial offering price and number or amount of the securities of each identified class is being registered as may from time to time be issued at indeterminate prices, including securities that may be issued upon exercise, conversion, settlement or exchange of any securities offered hereunder.
Offering: 2
Offering:
Fee Previously Paid	false
Rule 457(r)	true
Security Type	Debt
Security Class Title	Guarantees of Debt Securities
Fee Rate	0.01476%
Offering Note	(1) In accordance with Rules 456(b) and 457(r) under the Securities Act, the Registrants are deferring payment of all of the registration fee. Registration fees will be paid subsequently on a "pay as you go" basis. The Registrants will calculate the registration fee applicable to an offer of securities pursuant to this Registration Statement based on the fee payment rate in effect on the date of such fee payment. (2) No separate consideration will be received for the guarantees of securities being registered. In accordance with Rule 457(n), no registration fee is payable with respect to such guarantees.

Fees Summary	Sep. 13, 2024 USD ($)
Fees Summary [Line Items]
Total Offering	$ 0.00
Previously Paid Amount	0.00
Total Fee Amount	0.00
Total Offset Amount	0.00
Net Fee	$ 0.00

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