Common use of SUPPLEMENTARY WORKING CAPITAL RULES Clause in Contracts

SUPPLEMENTARY WORKING CAPITAL RULES. 3.1 This paragraph 3 comprises supplementary specific rules, principles, policies and practices applicable to the preparation of the Working Capital to be set forth in each Closing Statement. For the avoidance of doubt, each of the specific rules, principles, policies and practices set out in paragraph 1 and 2 shall be equally applicable to the Working Capital. 3.2 For each of the Sellers, the Working Capital of each of their Joint Venture Entities shall be included within the calculation of Working Capital only if such Joint Venture Entities are consolidated into the relevant Seller’s Group accounts, and the amount of any such Joint Venture Entities Working Capital shall be calculated as if such Joint Venture Entity is wholly-owned by a member of that Seller’s Group. 3.3 In relation to the France Business for each Seller and, in respect of GlaxoSmithKline only, the Netherlands Business, if one or, in respect of GlaxoSmithKline only, both business(es) is (are) not transferred to the Purchaser under the terms of this Agreement at Closing, the Working Capital relating to such business (or businesses) shall not be included in the determination of Working Capital at the Effective Time. If that France Business or, in respect of GlaxoSmithKline only, the Netherlands Business is (are) Transferred to the Purchaser after Closing, then a further adjustment shall be made to the Closing Statement on the assumption that the France Business and/or, in respect of GlaxoSmithKline only, the Netherlands Business were included in the Closing Statement taking the relevant items for the relevant business as of the date they transferred to the Purchaser. Any adjustment arising as a result of including the France Business or, in respect of GlaxoSmithKline only, the Netherlands Business in the Closing Statement after the date of Closing shall be agreed and paid on the same basis as the Closing Statement was agreed and payment in respect thereof made. 3.4 Part 3 of this Schedule 12 sets forth, for illustrative purposes only a computation of the Working Capital of Novartis’s and GlaxoSmithKline’s Working Capital as of the close of business on 31 December 2013. 250 Part 3 Illustrative Closing Statement Part A - GlaxoSmithKline Target Group Companies’ Cash Balances (Cash & cash equivalents) [ ] Intra-Group Non-Trade Receivables (Total financing and loans to subsidiaries / JV), comprising: [ ] [●] [ ] Third Party Indebtedness, comprising: Financial Debt – long term [ ] Financial Debt – short term [ ] Intra-Group Non-Trade Payables [ ] Financing from subsidiaries / JV: [ ] [●] [ ] Loans from subsidiaries / JV: [ ] [●] [ ] Employee Benefit Indemnification Amount Tax Adjustment, comprising [ ] Current income tax receivables [ ] Income taxes payable [ ] VAT [ ] Intra-Group Trading Balances Intra-group Trade Receivables [ ] 251 Transferred Accounts Receivables1 [ ] Intra-group Trade Payables [ ] Transferred Accounts Payables2 [ ] Adjustment (if any) [ ] Net Working Capital (*) [ ] Inventory [ ] Trade Receivables [ ] Trade Payables [ ] Working Capital Adjustment [ ] Balancing payment required: 2 That are payable to any member of GlaxoSmithKline’s Group (other than a Target Group Company) by a Business Seller of GlaxoSmithKline’s Group 252 Part B - Novartis Target Group Companies’ Cash Balances (BS01_180 Cash & cash equivalents) [ ] Intra-Group Non-Trade Receivables (BS01_050 Total financing and loans to subsidiaries / JV), comprising: [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] Third Party Indebtedness, comprising: [ ] BS01_511 Financial Debt – long term [ ] BS01_651 Financial Debt – short term [ ] Intra-Group Non-Trade Payables [ ] BS01_516 Financing from subsidiaries / JV: [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] BS01_518 Loans from subsidiaries / JV: [ ] [***] [ ] Employee Benefit Indemnification Amount *** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately with the Securities and Exchange Commission. 253 Tax Adjustment, comprising [ ] BS13_190 Current income tax receivables [ ] BS01_660 Income taxes payable [ ] BS14_120 Taxes other than income taxes [ ] BS13_108 Value added tax receivable apply [ ] Intra-Group Trading Balances [ ] BS01_130 Receivables own BU – Corporate [ ] BS01_140 Receivables other BU’s [ ] BS01_620 Payables own BU – Corporate [ ] BS01_630 Payables other BU’s [ ] Adjustment (if any) [ ] Net Working Capital (*) [ ] BS01_110 Total inventories [ ] BS01_120 Trade receivables (3rd parties and AC) [ ] BS01_610 Trade payables (3rd parties and AC) [ ] Net Working Capital [ ] Working Capital Adjustment [ ] Balancing payment required: [ ] 254 Part 4 Illustrative Working Capital Statement Part A – Novartis All amounts in US$ thousands Illustrative Net Working Capital as per Dec 31, 2013 BS01_110 Total inventories [***] BS01_120 Trade receivables (3rd parties and AC) [***] BS01_610 Trade payables (3rd parties and AC) [***] Illustrative Net Working Capital Part B – GlaxoSmithKline All amounts in GBP millions Illustrative Net Working Capital as per Dec 31, 2013 Inventory [***] Third Party Trade Receivables [***] Third Party Trade Payables [(***)] Illustrative Net Working Capital [***] *** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately with the Securities and Exchange Commission. 255 Schedule 13 Warranties given under Clause 9.1

SUPPLEMENTARY WORKING CAPITAL RULES. 3.1 This paragraph 3 comprises supplementary specific rules, principles, policies and practices applicable to the preparation of the Working Capital to be set forth in each Closing Statement. For the avoidance of doubt, each of the specific rules, principles, policies and practices set out in paragraph 1 and 2 shall be equally applicable to the Working Capital. 3.2 For each of the Sellers, the Working Capital of each of their Joint Venture Entities shall be included within the calculation of Working Capital only if such Joint Venture Entities are consolidated into the relevant Seller’s Group accounts, and the amount of any such Joint Venture Entities Working Capital shall be calculated as if such Joint Venture Entity is wholly-owned by a member of that Seller’s Group. 3.3 In relation to the France Business for each Seller and, in respect of GlaxoSmithKline only, the Netherlands Business, if one or, in respect of GlaxoSmithKline only, both business(es) is (are) not transferred to the Purchaser under the terms of this Agreement at Closing, the Working Capital relating to such business (or businesses) shall not be included in the determination of Working Capital at the Effective Time. If that France Business or, in respect of GlaxoSmithKline only, the Netherlands Business is (are) Transferred to the Purchaser after Closing, then a further adjustment shall be made to the Closing Statement on the assumption that the France Business and/or, in respect of GlaxoSmithKline only, the Netherlands Business were included in the Closing Statement taking the relevant items for the relevant business as of the date they transferred to the Purchaser. Any adjustment arising as a result of including the France Business or, in respect of GlaxoSmithKline only, the Netherlands Business in the Closing Statement after the date of Closing shall be agreed and paid on the same basis as the Closing Statement was agreed and payment in respect thereof made. 3.4 Part 3 of this Schedule 12 sets forth, for illustrative purposes only a computation of the Working Capital of Novartis’s and GlaxoSmithKline’s Working Capital as of the close of business on 31 December 2013. 250 Part 3 Illustrative Closing Statement Part A - GlaxoSmithKline Target Group Companies’ Cash Balances (Cash & cash equivalents) [ ] Intra-Group Non-Trade Receivables (Total financing and loans to subsidiaries / JV), comprising: [ ] [●] [ ] Third Party Indebtedness, comprising: Financial Debt – long term [ ] Financial Debt – short term [ ] Intra-Group Non-Trade Payables [ ] Financing from subsidiaries / JV: [ ] [●] [ ] Loans from subsidiaries / JV: [ ] [●] [ ] Employee Benefit Indemnification Amount Tax Adjustment, comprising [ ] Current income tax receivables [ ] Income taxes payable [ ] VAT [ ] Intra-Group Trading Balances Intra-group Trade Receivables [ ] 251 Transferred Accounts Receivables1 [ ] Intra-group Trade Payables [ ] Transferred Accounts Payables2 [ ] Adjustment (if any) [ ] Net Working Capital (*) [ ] Inventory [ ] Trade Receivables [ ] Trade Payables [ ] Working Capital Adjustment [ ] Balancing payment required: 2 That are payable to any member of GlaxoSmithKline’s Group (other than a Target Group Company) by a Business Seller of GlaxoSmithKline’s Group 252 Part B - Novartis Target Group Companies’ Cash Balances (BS01_180 Cash & cash equivalents) [ ] Intra-Group Non-Trade Receivables (BS01_050 Total financing and loans to subsidiaries / JV), comprising: [ **] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] Third Party Indebtedness, comprising: [ ] BS01_511 Financial Debt – long term [ ] BS01_651 Financial Debt – short term [ ] Intra-Group Non-Trade Payables [ ] BS01_516 Financing from subsidiaries / JV: [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] BS01_518 Loans from subsidiaries / JV: [ ] [***] [ ] Employee Benefit Indemnification Amount *** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately with the Securities and Exchange Commission. 253 Tax Adjustment, comprising [ ] BS13_190 Current income tax receivables [ ] BS01_660 Income taxes payable [ ] BS14_120 Taxes other than income taxes [ ] BS13_108 Value added tax receivable apply [ ] Intra-Group Trading Balances [ ] BS01_130 Receivables own BU – Corporate [ ] BS01_140 Receivables other BU’s [ ] BS01_620 Payables own BU – Corporate [ ] BS01_630 Payables other BU’s [ ] Adjustment (if any) [ ] Net Working Capital (*) [ ] BS01_110 Total inventories [ ] BS01_120 Trade receivables (3rd parties and AC) [ ] BS01_610 Trade payables (3rd parties and AC) [ ] Net Working Capital [ ] Working Capital Adjustment [ ] Balancing payment required: [ ] 254 Part 4 Illustrative Working Capital Statement Part A – Novartis All amounts in US$ thousands Illustrative Net Working Capital as per Dec 31, 2013 BS01_110 Total inventories [***] BS01_120 Trade receivables (3rd parties and AC) [***] BS01_610 Trade payables (3rd parties and AC) [***] Illustrative Net Working Capital Part B – GlaxoSmithKline All amounts in GBP millions Illustrative Net Working Capital as per Dec 31, 2013 Inventory [***] Third Party Trade Receivables [***] Third Party Trade Payables [(***)] Illustrative Net Working Capital [***] *** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately with the Securities and Exchange Commission. 255 Schedule 13 Warranties given under Clause 9.1]

SUPPLEMENTARY WORKING CAPITAL RULES. 3.1 This paragraph 3 comprises supplementary specific rules, principles, policies and practices applicable to the preparation of the Working Capital to be set forth in each Closing Statement. For the avoidance of doubt, each of the specific rules, principles, policies and practices set out in paragraph 1 and 2 shall be equally applicable to the Working Capital. 3.2 For each of the Sellers, the Working Capital of each of their Joint Venture Entities shall be included within the calculation of Working Capital only if such Joint Venture Entities are consolidated into the relevant Seller’s Group accounts, and the amount of any such Joint Venture Entities Working Capital shall be calculated as if such Joint Venture Entity is wholly-owned by a member of that Seller’s Group. 3.3 In relation to the France Business for each Seller and, in respect of GlaxoSmithKline only, the Netherlands Business, if one or, in respect of GlaxoSmithKline only, both business(es) is (are) not transferred to the Purchaser under the terms of this Agreement at Closing, the Working Capital relating to such business (or businesses) shall not be included in the determination of Working Capital at the Effective Time. If that France Business or, in respect of GlaxoSmithKline only, the Netherlands Business is (are) Transferred to the Purchaser after Closing, then a further adjustment shall be made to the Closing Statement on the assumption that the France Business and/or, in respect of GlaxoSmithKline only, the Netherlands Business were included in the Closing Statement taking the relevant items for the relevant business as of the date they transferred to the Purchaser. Any adjustment arising as a result of including the France Business or, in respect of GlaxoSmithKline only, the Netherlands Business in the Closing Statement after the date of Closing shall be agreed and paid on the same basis as the Closing Statement was agreed and payment in respect thereof made. 3.4 Part 3 of this Schedule 12 sets forth, for illustrative purposes only a computation of the Working Capital of Novartis’s and GlaxoSmithKline’s Working Capital as of the close of business on 31 December 2013. 250 Part 3 Illustrative Closing Statement Part A - GlaxoSmithKline Target Group Companies’ Cash Balances (Cash & cash equivalents) [ ] Intra-Group Non-Trade Receivables (Total financing and loans to subsidiaries / JV), comprising: [ ] [●] [ ] Third Party Indebtedness, comprising: Financial Debt – long term [ ] Financial Debt – short term [ ] Intra-Group Non-Trade Payables [ ] Financing from subsidiaries / JV: [ ] [●] [ ] Loans from subsidiaries / JV: [ ] [●] [ ] Employee Benefit Indemnification Amount Tax Adjustment, comprising [ ] Current income tax receivables [ ] Income taxes payable [ ] VAT [ ] Intra-Group Trading Balances Intra-group Trade Receivables [ ] 251 Transferred Accounts Receivables1 [ ] Intra-group Trade Payables [ ] Transferred Accounts Payables2 [ ] Adjustment (if any) [ ] Net Working Capital (*) [ ] Inventory [ ] Trade Receivables [ ] Trade Payables [ ] Working Capital Adjustment [ ] Balancing payment required: 2 That are payable to any member of GlaxoSmithKline’s Group (other than a Target Group Company) by a Business Seller of GlaxoSmithKline’s Group 252 Part B - Novartis Target Group Companies’ Cash Balances (BS01_180 Cash & cash equivalents) [ ] Intra-Group Non-Trade Receivables (BS01_050 Total financing and loans to subsidiaries / JV), comprising: [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] Third Party Indebtedness, comprising: [ ] BS01_511 Financial Debt – long term [ ] BS01_651 Financial Debt – short term [ ] Intra-Group Non-Trade Payables [ ] BS01_516 Financing from subsidiaries / JV: [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] [***] [ ] BS01_518 Loans from subsidiaries / JV: [ ] [***] [ ] Employee Benefit Indemnification Amount *** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately with the Securities and Exchange Commission. 253 Tax Adjustment, comprising [ ] BS13_190 Current income tax receivables [ ] BS01_660 Income taxes payable [ ] BS14_120 Taxes other than income taxes [ ] BS13_108 Value added tax receivable apply [ ] Intra-Group Trading Balances [ ] BS01_130 Receivables own BU – Corporate [ ] BS01_140 Receivables other BU’s [ ] BS01_620 Payables own BU – Corporate [ ] BS01_630 Payables other BU’s [ ] Adjustment (if any) [ ] Net Working Capital (*) [ ] BS01_110 Total inventories [ ] BS01_120 Trade receivables (3rd parties and AC) [ ] BS01_610 Trade payables (3rd parties and AC) [ ] Net Working Capital [ ] Working Capital Adjustment [ ] Balancing payment required: [ ] 254 Part 4 Illustrative Working Capital Statement Part A – Novartis All amounts in US$ thousands Illustrative Net Working Capital as per Dec 31, 2013 BS01_110 Total inventories [***] BS01_120 Trade receivables (3rd parties and AC) [***] BS01_610 Trade payables (3rd parties and AC) [***] Illustrative Net Working Capital Part B – GlaxoSmithKline All amounts in GBP millions Illustrative Net Working Capital as per Dec 31, 2013 Inventory [***] Third Party Trade Receivables [***] Third Party Trade Payables [(***)] Illustrative Net Working Capital [***] *** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately with the Securities and Exchange Commission. 255 Schedule 13 Warranties given under Clause 9.1.