**Exhibit 10.2**

** **

TAX SHARING AGREEMENT

 

between

 

 

ABBOTT LABORATORIES

 

on behalf of itself

 

and the ABBOTT AFFILIATES

 

and

 

 

HOSPIRA, INC.

 

on behalf of itself

 

and the HOSPIRA AFFILIATES

 

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TAX SHARING AGREEMENT

 

This TaxSharing Agreement (the “Agreement”) is entered into as of the                  day of                  ,2004, between Abbott Laboratories (“Abbott”), an Illinois corporation, andHospira, Inc. (“Hospira”), a Delaware corporation.

 

R E C I T A L S:

 

WHEREAS, theboard of directors of Abbott has determined that it is appropriate andadvisable to: (i) separate Abbott’s core hospital business from Abbott’sremaining businesses (the “Separation”), which will include the transfer of theassets (including interests in intangible assets and stock of subsidiaries)used in connection with the core hospital business to Hospira (the“Contribution”); and (ii) following the Separation, make a distribution, on apro rata basis, to holders of common shares, without par value, of Abbott(together with the associated preferred stock purchase rights) of all of theoutstanding shares of common stock, par value $0.01 per share, of Hospira(together with the associated preferred stock purchase rights), owned by Abbott(the “Distribution”) (the date of such Distribution, the “Distribution Date”);and

 

WHEREAS,Abbott and Hospira intend that the Contribution and Distribution and certainother transactions effected as part of the Separation qualify as Tax-free underSections 355, 361, and 368 of the Internal Revenue Code of 1986, as amended(the “Code”);

 

WHEREAS, as ofthe date hereof, Abbott is the common parent of an affiliated group of domesticcorporations, including Hospira, that has elected to file consolidated U.S.federal income Tax Returns and, as a result of the Distribution, neitherHospira nor any of its Affiliates will be a member of such group after theclose of the Distribution Date;

 

WHEREAS,Abbott and Hospira desire to allocate the responsibilities for various Taxesand to provide for certain additional Tax matters;

 

NOW,THEREFORE, in consideration of the mutual agreements, provisions and covenantscontained in this Agreement, Abbott and Hospira (each on behalf of itself, eachof its Affiliates as of the Effective Time, and its future Affiliates) herebyagree as follows:

 

**Article I.****                                               DEFINITIONS**

 

Section 1.01                                Definitions.  Reference is made to Section 5.13 regardingthe interpretation of certain words and phrases used in this Agreement.  In addition, for the purpose of thisAgreement, the following terms shall have the meanings set forth below.

 

 “Abbott” has the meaning set forth in the Preamble.

 

“Abbott Group” means Abbott andall Affiliates of Abbott other than any member of the Hospira Group.

 

“Affiliate” means any entitythat is directly or indirectly under the Control of the entity in question.

 

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“After-Tax Amount” means, withrespect to any payment under this Agreement, an additional amount necessary toreflect the increase in Tax that would result from the receipt or accrual ofany payment, using the maximum statutory rate (or rates, in the case of an itemthat affects more than one Tax) applicable to the recipient of such payment forthe relevant Tax periods, whether or not an actual increase occurs, andreflecting any Tax savings available to the recipient.

 

“Agreement” has the meaning setforth in the Preamble.

 

“Bahamian Distribution” has themeaning ascribed to such term in Section 3.01(a).

 

“Business Entity” means anycorporation, general or limited partnership, trust, joint venture,unincorporated organization, limited liability entity or other entity.

 

“Closing Date” means, for anycountry, the date the TMDS Agreement for that country terminates.

 

“Code” has the meaning ascribedto such term in the second WHEREAS clause hereof.

 

“Contribution” has the meaningascribed to such term in the first WHEREAS clause hereof.

 

“Control” means the possession,directly or indirectly, of the power to direct or cause the direction of themanagement and policies of an entity, whether through ownership of votingsecurities, by contract or otherwise.

 

“Corresponding Portion of theTax Detriment” means the product of the Tax Detriment and a fraction thenumerator of which is the amount of the related Tax Benefit for a taxableperiod and the denominator of which is the sum of the related Tax Benefits forall of the relevant taxable periods.

 

“Covered Transaction Tax” hasthe meaning ascribed to such term in Section 3.01(a).

 

“Determination” means (i) with respectto U.S. federal income Tax, a “determination” as defined in Section 1313(a) ofthe Code or execution of an Internal Revenue Service Form 870AD and, withrespect to a Tax other than U.S. federal income Tax, any final determination ofliability for such Tax that, under applicable law, is not subject to furtherappeal, review, or modification through proceedings or otherwise, (ii) theexpiration of a statute of limitations for making an assessment or filing aclaim of refund, or (iii) the payment of, or incurring liability for, Tax withrespect to which the party paying or incurring such Tax determines that noaction should be taken to recoup such payment or contest such liability.

 

“Distribution” has the meaningascribed to such term in the first WHEREAS clause hereof.

 

“Distribution Agreement” meansthe Separation and Distribution Agreement entered into by and between Abbottand Hospira as the same may be amended.

 

“Distribution Date” has themeaning ascribed to such term in the first WHEREAS clause hereof.

 

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“EBA” means the EmployeeBenefits Agreement entered into by and between Abbott and Hospira as the samemay be amended.

 

“Effective Time” means 11:59p.m. Eastern Time on the Distribution Date.

 

“Employment Taxes” meanswithholding, payroll, social security, workers compensation, unemployment,disability, and other similar taxes imposed by any Tax Authority, and anyinterest, penalties, additions to tax, or additional amounts with respect tothe foregoing imposed on any taxpayer or consolidated, combined, or unitarygroup of taxpayers.

 

“Governmental Authority” meansany supranational, international, national, federal, state, or local court,government, department, commission, board, bureau, agency, official or otherregulatory, administrative or governmental authority, including The New YorkStock Exchange, Inc. and any similar self-regulatory body under applicablesecurities laws or regulations.

 

“Hospira” has the meaning setforth in the Preamble.

 

“Hospira Group” means Hospiraand all Affiliates of Hospira.

 

“ICO Agreement” means theInternational Commercial Operations Agreement entered into by and betweenAbbott and Hospira as the same may be amended.

 

“Indemnified Party” has themeaning ascribed to such term in Section 5.17(a).

 

“Indemnifying Party” has themeaning ascribed to such term in Section 5.17(a).

 

“Internal Distribution” has themeaning ascribed to such term in Section 3.01(b).

 

“IRS” means the United StatesInternal Revenue Service.

 

“Local Closing” means thetransactions that occur on the Closing Date.

 

“Parties” means the parties tothis Agreement.

 

“Person” means any:  (i) individual; (ii) Business Entity; or(iii) Governmental Authority.

 

“Post-Distribution Period”means any taxable period or portion of a taxable period beginning after theDistribution Date.

 

“Pre-Distribution Period” meansany taxable period or portion of a taxable period ending on or before theDistribution Date.

 

“Prime Rate” means the ratewhich Citibank N.A. (or its successors or another major money center commercialbank agreed to by the parties) announces from time to time as its prime lendingrate, as in effect from time to time.

 

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“Private Letter Ruling” means theprivate letter ruling issued by the IRS on December 4, 2003, in connection withthe Contribution, Distribution, and related transactions, including the requestfor such rulings together with all supplemental filings and exhibits theretosubmitted to the IRS on behalf of Abbott or its subsidiaries in connectiontherewith.

 

“Puerto Rican Ruling” means theruling, if any, issued by the Treasury Department of Puerto Rico pursuant tothe ruling request  filed on behalf ofAbbott, Abbott Laboratories de Puerto Rico, Inc., Hospira, and Hospira PuertoRico LLC on March 19, 2004 with respect to the Puerto Rican Transaction,together with all supplemental filings and exhibits thereto.

 

“Puerto Rican Transaction” hasthe meaning ascribed to such term in Section 3.01(a).

 

“Remitting Party” has themeaning ascribed to such term in Section 5.17(b).

 

“Responsible Party” has themeaning ascribed to such term in Section 5.17(b).

 

“Section 355(e) Event” has themeaning ascribed to such term in Section 3.01(b).

 

“Separation” has the meaningascribed to such term in the first WHEREAS clause hereof.

 

“Specified  Action” has the meaning ascribed to suchterm in Section 4.02(b).

 

“Straddle Period” means anytaxable period beginning on or before the Distribution Date and ending afterthe Distribution Date.

 

“Tax” means:  (i) any income, net income, gross income,gross receipts, profits, capital stock, franchise, property, ad valorem, stamp,excise, severance, occupation, service, sales, use, license, lease, transfer, import,export, customs duties, value added, alternative minimum, estimated or othersimilar tax (including any fee, assessment, or other charge in the nature of orin lieu of any tax) imposed by any Tax Authority, and any interest, penalties,additions to tax or additional amounts with respect to the foregoing imposed onany taxpayer or consolidated, combined or unitary group of taxpayers; and (ii)any Employment Tax.

 

“Tax Authority” means, withrespect to any Tax, the governmental entity or political subdivision thereofthat imposes such Tax, and the agency (if any) charged with the collection ofsuch Tax for such entity or subdivision.

 

“Tax Benefit” means thereduction in Tax that should result from any item of loss, deduction, or credit(or any other item), whether or not an actual reduction in Tax occurs,including any interest with respect thereto or interest that would have beenpayable but for such item, net of any Tax on such interest.  For purposes of calculating the amount ofany Tax Benefit, the maximum statutory rate (or rates, in the case of an itemthat affects more than one Tax) applicable to each item of income, gain, loss,deduction, or credit (or any other item) shall be used.

 

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“Tax Contest” means an audit,review, examination, or any other administrative or judicial proceeding withthe purpose or effect of redetermining any Tax (including any administrative orjudicial review of any claim for refund).

 

“Tax Detriment” means theincrease in Tax that should result from any item of income or gain (or anyother item), whether or not an actual increase in Tax occurs, including anyinterest with respect thereto, net of any Tax savings attributable to suchinterest.  For purposes of calculatingthe amount of any Tax Detriment, the maximum statutory rate (or rates, in thecase of an item that affects more than one Tax) applicable to each item ofincome, gain, loss, deduction, or credit (or any other item) shall be used.

 

“Tax Package” means theinformation and documents in the possession of the Hospira Group that arereasonably necessary for the preparation of a Tax Return of the Abbott Groupwith respect to a Pre-Distribution Period, assembled in all material respectsin accordance with the standards that Abbott has heretofore applied to  divisions and Affiliates.

 

“Tax Records” means all recordsrelating to any Tax, including without limitation  Tax Returns, journal vouchers, cash vouchers, general ledgers,material contracts, Tax Return workpapers and schedules, appraisal reports,authorizations for expenditures, and documents relating to rulings or otherDeterminations by any Tax Authority.

 

“Tax Return” means any reportof Tax due, any claims for refund of Tax paid, any information return withrespect to Tax, any election made with respect to Tax, or any other similarreport, statement, declaration, or document required to be filed under the Codeor other law with respect to Tax, including any attachments, exhibits, or othermaterials submitted with any of the foregoing, and including any amendments orsupplements to any of the foregoing for any taxpayer or consolidated, combined,or unitary group of taxpayers.

 

“TMDS Agreement” means any ofthe Transition Marketing and Distribution Services Agreements by and betweenHospira and an Abbott Affiliate as the same may be amended.

 

“Third Party” means any Personother than Abbott, any Abbott Affiliate, Hospira and any Hospira Affiliate.

 

“Transition Period Tax” has themeaning ascribed to such term in Section 3.02.

 

“U.S. Transferred Employee” hasthe meaning set forth in the Employee Benefits Agreement by and between Abbottand Hospira.

 

**Article II.****                                           RESPONSIBILITYFOR TAX**

** **

Section 2.01                                Responsibilityfor Tax.

 

### (a)               Except as specifically provided in anyof the agreements contemplated by the Distribution Agreement, including the EBAwith respect to Employment Taxes, Abbott shall be responsible for, and shallindemnify and hold harmless the Hospira Group from any liability for (i) anyTax imposed by any Tax Authority on Abbott or an Abbott

 

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### Affiliate, including Hospira and all Hospira Affiliates, for anyPre-Distribution Period, except any Covered Transaction Tax for which Hospirais responsible under Section 3.01(b); and (ii) any Tax imposed by any TaxAuthority on any member of the Abbott Group for any Post-Distribution Period,except any Transition Period Tax for which Hospira is responsible under Section3.02.

###  

### (b)              Except as specifically provided in any ofthe agreements contemplated by the Distribution Agreement, including the EBAwith respect to Employment Taxes, Hospira shall be responsible for, and shallindemnify and hold harmless the Abbott Group from any liability for (i) any Taximposed by any Tax Authority on Hospira or a Hospira Affiliate for anyPost-Distribution Period; (ii) any Covered Transaction Tax for which Hospira isresponsible under Section 3.01(b); and (iii) any Transition Period Tax forwhich Hospira is responsible under Section 3.02.

###  

### (c)               The responsibility for any Tax incurredin a Straddle Period by any member of the Hospira Group shall be allocatedbetween the Pre-Distribution Period and the Post-Distribution Period as if suchmember closed its financial accounting records as of the Effective Time anddetermined the Tax attributable to the Pre-Distribution Period by applying themethod of tax accounting that has historically been used for the business ofsuch member.

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Section 2.02                                Refunds,Tax Benefits, and Other Allocations

 

### (a)               Refunds and Carrybacks.

###  

#### (i)             Abbott Refunds.  Except as provided in Section 2.02(a)(iv) below, Abbott shall beentitled to all refunds (including refunds paid by means of a credit againstother or future Tax liabilities) and credits with respect to any Tax for whichAbbott is responsible under Section 2.01(a).

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#### (ii)          Hospira Refunds.  Hospira shall be entitled to all refunds (including refunds paidby means of a credit against other or future Tax liabilities) and credits withrespect to any Tax for which Hospira is responsible under Section 2.01(b).

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#### (iii)       Payment of Refunds.  Except as provided in Section 2.02(a)(iv), Hospira shall forwardto Abbott, or reimburse Abbott for, any refunds due Abbott (pursuant to theterms of this Section 2.02(a)) after receipt thereof (less any Tax Detrimentattributable to such refunds), and Abbott shall forward to Hospira, orreimburse Hospira for, any refunds due Hospira (pursuant to the terms of thisSection 2.02(a)) after receipt thereof (less any Tax Detriment attributable tosuch refunds).  In the case of a refundreceived in the form of a credit against other or future Tax liabilities,reimbursement with respect to such refund shall be due in each case on the duedate for payment of the Tax against which such refund has been credited.  Any payment required to be made pursuant tothis Section 2.02(a)(iii) shall be made within thirty (30) days of the receiptof the refund.  If Abbott reasonably sorequests, Hospira, at Abbott’s expense, shall file for and pursue any refund towhich Abbott is entitled under this Section 2.02(a).  If Hospira reasonably so

 

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#### requests, Abbott, at Hospira’s expense, shall file for and pursue anyrefund to which Hospira is entitled under this Section 2.02(a).  The Party making a payment pursuant to thisSection 2.02(a)(iii) must deliver with the payment a statement describing  in reasonable detail the basis for thecalculation of the amount being paid.

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#### (iv)      Carrybacks.

####  

##### 1)              TheHospira Group shall be entitled to any refund of Abbott’s Tax for aPre-Distribution Period resulting from carrying back any item of loss,deduction or credit that arises in any Post-Distribution Period of Hospira onlyto the extent that (A) Abbott has no item of loss, deduction, or credit thatcan be carried back to such taxable period and (B) such carryback does not havea material adverse impact on Abbott, as reasonably determined by Abbott.  If Abbott receives any such refund, it shall pay the portion thereof to whichHospira is entitled within thirty (30) days of receipt of such refund ifHospira’s portion is $100 million or less. If Hospira’s portion is more than $100 million, then Abbott shall paythe initial $100 million within thirty (30) days of receipt of such refund, andany amounts in excess of $100 million shall be paid within thirty (30) days ofthe later of (C) a Determination with respect to Abbott’s Tax for suchPre-Distribution Period or (D) a Determination with respect to Hospira’s Taxfor the Post-Distribution Period that gave rise to the refund received byAbbott; *provided, however*, thatif Hospira provides Abbott with a letter of credit in a form reasonablyacceptable to Abbott and issued by a major money center commercial bankreasonably acceptable to Abbott not expiring before the later of clause (C) or(D) of this Section 2.02(a)(iv)(1), then Abbott shall pay to Hospira thatportion of the refund covered by the letter of credit no later than thirty (30)days after receipt of the refund or of the letter of credit, whichever islater.

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##### 2)              IfHospira has a loss or other Tax attribute for any Post-Distribution Period thatis to be carried back to any Pre-Distribution Period, Hospira shall notifyAbbott that such item should be carried back. Such notification shall include a description in reasonable detail ofthe grounds for the refund and the amount thereof, and a certification by anappropriate officer of Hospira setting forth Hospira’s belief, based on athorough examination of the facts and Tax law relating to the Tax treatment ofsuch item, that the Tax treatment of such item is supported by “substantialauthority” within the meaning of Section 6662 of the Code (and the TreasuryRegulations thereunder) or, where applicable, any analogous provision of stateor local law.  Abbott, at Hospira’sexpense, shall cooperate with Hospira in connection with the filing andprocessing of any Hospira carryback and shall provide Hospira with copies ofall correspondence related thereto.

 

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##### 3)              IfAbbott pays any amount to Hospira under Section 2.02(a)(iv)(1) and, as a resultof a subsequent Determination, Hospira is not entitled to all or any part ofsuch amount, Abbott shall notify Hospira of the amount to be repaid to Abbottand provide a description in reasonable detail of the manner in which suchamount was calculated.  Hospira shallpay such amount to Abbott within thirty (30) days of such notification.

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##### 4)              Anypayment required to be made by Abbott pursuant to this Section 2.02(a)(iv)shall bear interest at the Prime Rate plus two percent from the date a refundis received by Abbott.  Any paymentrequired to be made by Hospira pursuant to this Section 2.02(a)(iv) shall bearinterest at the Prime Rate plus two percent beginning thirty (30) days afterAbbott notifies Hospira of the amount to be repaid.  Such interest shall be paid at the same time as the payment towhich it relates.

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### (b)              Effect of Audit Adjustments.

###  

### Notwithstanding Section 2.01 —

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#### (i)             Payments by Hospira to Abbott.  Except as provided in Sections 3.01(b)and  3.02, if as a result of aDetermination, any adjustment shall be made to any Tax Return relating, inwhole or in part, to Tax for which any member of the Abbott Group is responsible,and if such adjustment results in both (x) a Tax Detriment to any member of theAbbott Group for any taxable period and (y) a Tax Benefit to any member of theHospira Group for any Post-Distribution Period, then Hospira shall pay toAbbott an amount equal to the lesser of the Tax Benefit for each taxable periodand the Corresponding Portion of the Tax Detriment.

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#### (ii)          Payments by Abbott to Hospira.  If as a result of a Determination, anyadjustment shall be made to any Tax Return relating, in whole or in part, toTax for which the Hospira Group is responsible, and if such adjustment resultsin both (x) a Tax Detriment to any member of the Hospira Group for anyPost-Distribution Period and (y) a Tax Benefit to any member of the AbbottGroup for any taxable period, then Abbott shall pay to Hospira an amount equalto the lesser of the Tax Benefit for such taxable period and the CorrespondingPortion of the Tax Detriment.

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#### (iii)       Timing of Payments.  Any payment required to be made pursuant to this Section 2.02(b),shall be made the later of (x) thirty (30) days after the Determination thatresults in such payment pursuant to this Section 2.02(b) and (y) the due dateof the Tax Return that includes the Tax Benefit that gives rise to therequirement for such payment.

 

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### (c)               Other Allocations

###  

#### (i)             Research and Experimentation Credit BasePeriod. Abbott shall reasonably make the allocations to Hospira required underSection 41(f)(3) of the Code.  Hospiraagrees that it shall not file any Tax Return that is inconsistent with theamount of qualified research expenditures and gross receipts allocated to it byAbbott.

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#### (ii)          Allocation of Earnings and Profits.  The allocation of earnings and profitsbetween Abbott and Hospira shall be reasonably determined by Abbott pursuant toSection 312(h) of the Code and the Treasury Regulations thereunder.  A preliminary allocation of earnings andprofits through December 31, 2002, shall be provided no later than forty-five(45) days after Abbott receives the allocation from the public accounting firmthat prepares such allocation, but no later than September 30, 2004.  The allocation of earnings and profits fromJanuary 1, 2003, through the Distribution Date shall be provided no later thanDecember 31, 2005.

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#### (iii)       Revised Allocations.  The allocations made under this Section 2.02(c) shall be revisedby Abbott to reflect each subsequent Determination that affects suchallocations for any Pre-Distribution Period. Each revised calculation shall be provided to Hospira within 120 days ofthe Determination to which the revision relates.

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#### (iv)      Review of Allocations.  Hospira shall have the right to review the accuracy, but not themethodology, of any allocation made under this Section 2.02(c).  Hospira shall notify Abbott of anydisagreement within forty-five (45) days of being notified of anyallocation.  Any dispute shall beresolved pursuant to the procedures provided by this Agreement.

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Section 2.03                                OptionDeductions.

 

### (a)               Except as provided in Section 2.03(b),upon the exercise of any option to purchase Abbott stock, Abbott shall claimany Tax deduction attributable to such exercise on its Tax Returns and Hospirashall not claim such deduction on its Tax Returns.  On the exercise of any option to purchase Hospira stock, Hospirashall claim any Tax deduction attributable to such exercise on its Tax Returnsand Abbott shall not claim such deduction on its Tax Returns.

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### (b)              Abbott and Hospira agree to file all TaxReturns on the basis that (i) any Abbott restricted stock and (ii) any optionto purchase Abbott stock held by an employee of Hospira was granted to suchindividual by Abbott in connection with the performance of services forAbbott.  To the extent any Tax deductionclaimed by Abbott attributable to the exercise of such options is disallowed toAbbott, and a Tax Authority makes a Determination that Hospira is entitled tosuch deduction, Abbott shall notify Hospira of the receipt of suchDetermination, promptly after receipt thereof, and Hospira shall pay to Abbottthe lesser of the amount of Hospira’s Tax Benefit and the amount of Abbott’scorresponding Tax Detriment in accordance with Section 2.02(b).  To the extent any Tax deduction claimed byHospira attributable to the exercise of an option to purchase Hospira stock is

 

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### disallowed to Hospira, and a Tax Authority makes a Determination thatAbbott is entitled to such deduction, Hospira shall notify Abbott of thereceipt of such Determination, promptly after receipt thereof, and Abbott shallpay to Hospira the lesser of the amount of Abbott’s Tax Benefit and the amountof Hospira’s corresponding Tax Detriment in accordance with Section2.02(b).  The provisions of this Section2.03 shall apply *mutatis mutandis*to restricted shares, disqualifying dispositions to which Section 421(c) of theCode applies, and other equity based compensation.

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Section 2.04                                TaxReturns.

 

### (a)               Abbott shall prepare and timely file allTax Returns for Pre-Distribution Periods for Abbott and all of its Affiliates,including Hospira and all of its Affiliates, and all Tax Returns for StraddlePeriods for all members of the Abbott Group. In connection with each federal, state, local, and foreign Tax Returnthat is required under this Agreement to be filed by Abbott for taxable periodsending in 2004, Hospira shall provide Abbott, no later than November 30, 2004,with a Tax Package for the purpose of preparing such Tax Return.  Hospira shall provide a supplemental TaxPackage with respect to each such Tax Return, if necessary, no later thanJanuary 31, 2005, and Hospira shall timely furnish to Abbott additional Taxinformation and documents as Abbott may reasonably request.  With respect to any information required tobe provided by Hospira pursuant to this Section 2.04(a), (i) Abbott shallutilize such information in the preparation of the appropriate Tax Returns asprovided by Hospira, except to the extent (a) Hospira provides its priorwritten consent to change any such information, or (b) Abbott determines ingood faith that such information is inaccurate or incomplete in a materialrespect, and (ii) Hospira agrees to indemnify and hold harmless Abbott and itsAffiliates from and against any cost, fine, penalty, or other expense of anykind attributable to the misconduct or negligence of Hospira or any of itsAffiliates in supplying Abbott with inaccurate or incomplete information.  An appropriate officer of Hospira shallprovide a certification that, to such officer’s best knowledge and belief, anyand all information provided pursuant to this Section 2.04(a) is accurate andcomplete.  If Hospira fails to provideany information required by this Section 2.04(a) within the time periodspecified, Abbott may file the applicable Tax Returns based on the informationavailable at the time such Tax Returns are due and Hospira shall indemnify andhold harmless Abbott and its Affiliates from Taxes or other costs imposed onAbbott or any of its Affiliates but only to the extent resulting from Hospira’sfailure to provide such information in a timely manner.  In addition, Hospira shall provide Abbottwith all documents and information, and make available employees and officersof Hospira and Hospira Affiliates as Abbott reasonably requests to prepare andfile any Tax Return for any Pre-Distribution Period (including any claims forrefunds described in Section 2.02(a)) or to conduct any Tax Contest withrespect to any such Tax Return.

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### (b)              Hospira shall prepare and timely file allTax Returns for Straddle Periods for all members of the Hospira Group.  If Abbott is responsible under Section2.01(a) for a portion of any Tax reported on a Straddle Period Tax Return forany member of the Hospira Group, Hospira shall provide Abbott with a copy ofsuch Tax Return at least thirty (30) days prior to its due date.  Abbott shall notify Hospira of anydisagreement within 20 days of Abbott’s receipt of such Tax Return.  Any dispute shall be resolved pursuant tothe

 

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### procedures provided by this Agreement.

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### (c)               Hospira shall not file (or allow anymember of the Hospira Group to file) any amended Tax Return for anyPre-Distribution Period.

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### (d)              Abbott shall  provide Hospira with notice of any Tax election that Abbottintends to file for any member of the Hospira Group on any Tax Return for anyPre-Distribution Period within forty-five (45) days before such Tax Return willbe filed.  Hospira shall have the rightto review such elections and request, within 15 days of such notice, that analternative election be made.   IfAbbott reasonably determines that such alternative election will not result inany increased Tax liability or reduced Tax attribute of Abbott or any AbbottAffiliate, Abbott shall comply with such request.

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Section 2.05                                Cooperation,Exchange of Information, and Tax Records.

 

### (a)               Cooperation and Exchange ofInformation.  Each Party shall provideto the other such cooperation and information as reasonably may be requested inconnection with (i) filing any Tax Return, amended return or claim for refund,(ii) determining a liability for Tax or a right to a refund of Tax, or (iii)participating in or conducting any Tax Contest.  Such cooperation and information shall include providing copiesof relevant Tax Records.  Each Partyshall devote the personnel and resources necessary in order to carry out thisSection 2.05(a) and shall make its employees available on a mutually convenientbasis to provide explanations of any documents or information providedhereunder.  Each Party shall carry outits responsibilities under this Section 2.05(a) charging to the other only theout-of-pocket costs actually incurred. Any information obtained under this Section 2.05(a) shall be kept instrict confidence, with at least the same degree of care that applies toAbbott’s confidential and proprietary information pursuant to policies ineffect as of the Effective Time, except as otherwise may be necessary inconnection with the filing of Tax Returns or claims for refund or in conductingan audit or other proceeding.  Hospirashall execute all necessary or appropriate forms, including powers of attorney,reasonably requested by Abbott in connection with any action taken by Abbottpursuant to this Agreement.

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### (b)              Record Retention.  Each of Abbott and Hospira shall retain allTax Records in its possession as of the Effective Time relating to anyPre-Distribution Period that are relevant to the other Party for purposesdescribed in Section 2.05(a) until such time as the other Party shall consentto the disposition of such Tax Records, which consent shall not be withheldunreasonably.

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Section 2.06                                TaxContests.

 

### (a)               Notice. Each Party shall provide prompt notice to the other Party of any pendingor threatened Tax audit, assessment, or proceeding, or other Tax Contest, ofwhich it becomes aware, related to Tax for which it is indemnified by the otherParty hereunder.  Such notice shallcontain factual information (to the extent known) describing any

 

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### asserted Tax liability in reasonable detail and shall be accompanied bycopies of any notice and other documents received from any Tax Authority withrespect to any such matters.  If anIndemnified Party has knowledge of an asserted Tax liability with respect to amatter for which it is to be indemnified hereunder and such Party fails to givethe Indemnifying Party prompt notice of such asserted Tax liability, then (i)if the Indemnifying Party is precluded from contesting the asserted Taxliability in any forum as a result of the failure to give prompt notice, theIndemnifying Party shall have no obligation to indemnify the Indemnified Partyfor any Tax resulting from such assertion of Tax liability, and (ii) if theIndemnifying Party is not precluded from contesting the asserted Tax liabilityin any forum, but such failure to give prompt notice results in a monetarydetriment to the Indemnifying Party, then any amount that the IndemnifyingParty is otherwise required to pay the Indemnified Party pursuant to thisAgreement shall be reduced by the amount of such detriment.

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### (b)              Control of Tax Contests.

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#### (i)             Hospira. Hospira shall have full responsibility and discretion in conducting,including settling, any Tax Contest involving a Tax for which it is responsibleunder Section 2.01(b), except for any Tax Contest involving any CoveredTransaction Tax for which Hospira is responsible under Section 3.01(b) and anyTransition Period Tax for which Hospira is responsible under Section 3.02.

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#### (ii)          Abbott. Abbott shall have full responsibility and discretion in conducting,including settling, any Tax Contest involving (x) any Tax for which it isresponsible under Section 2.01(a), (y) any Covered Transaction Tax for whichHospira is responsible under Section 3.01(b), except as provided in paragraph(iii), below and (z) any Transition Period Tax for which Hospira is responsibleunder Section 3.02.  Abbott shallconsult in good faith with Hospira in connection with any Tax Contest describedin clauses (y) or (z) of this Section 2.06(b)(ii).

####  

#### (iii)       Covered Transaction Taxes.  Hospira shall have the right to participatein the conduct of a Tax Contest related to any Covered Transaction Tax as aresult of the application of Section 355(e) of the Code if, and only if, (x)Hospira has acknowledged in writing its liability for such Covered TransactionTax, (y) Hospira shall have provided Abbott with a letter of credit in a formreasonably acceptable to Abbott and issued by a major money center commercialbank reasonably acceptable to Abbott, not expiring before a Determination hasoccurred with respect to Abbott’s Tax for the Post-Distribution Period thatgave rise to the Covered Transaction Tax at issue, and in an amount equal tothe maximum amount of Covered Transaction Tax at issue in the Tax Contest and(z) no Tax Return of any member of the Abbott Group with respect to which anymember of the Abbott Group may reasonably be viewed as having an actual orpotential liability for any Tax not indemnified against by Hospira is held openas a result of such Tax Contest.  Abbottshall not settle any Tax Contest described in this paragraph (iii) without theconsent of Hospira, which consent shall not be unreasonably withheld.

 

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**Article III.****                                       TRANSACTIONSTAX**

** **

Section 3.01                                TransactionsTax.

 

### (a)               General.  Except as otherwise provided in Section 3.01(b), Abbott shall beresponsible for, and shall indemnify and hold harmless the Hospira Group fromany and all (i) liabilities sustained by Abbott or Hospira as a result of theDistribution failing to qualify as Tax-free to the Abbott shareholders pursuantto Section 355(a) of the Code, and (ii) federal, state, local, and foreign Taximposed by any Tax Authority on Abbott or any Abbott Affiliate as a result of(w) the failure of any of the transactions described in the Private LetterRuling to be treated as provided in such ruling; (x) the failure of thedistribution of the stock of Hospira Ltd., a Bahamas corporation, (the“Bahamian Distribution”) to qualify for Tax-free treatment under Sections 355and 361 of the Code; (y) the failure of any of the transactions described inthe Puerto Rican Ruling (the “Puerto Rican Transaction”) to be treated asprovided in such ruling; and (z) the inclusion, or taking into account, of anyincome or gain by Abbott or its Affiliates (including any member of the HospiraGroup) under Treasury Regulations Section 1.1502-13 or 1.1502-19 (or anycorresponding provisions of other applicable Tax laws) as a result of the Distribution(collectively “Covered Transaction Tax”).

###  

### (b)              Inconsistent Acts and Events.  Hospira shall be responsible for, and shallindemnify and hold harmless the Abbott Group from and against any liabilityfor, any Covered Transaction Tax (including without limitation reasonableattorney fees and other costs incurred in connection therewith) resulting from(i) any breach by any member of the Hospira Group of any of the representationsor covenants under Article IV hereof, (ii) any Specified  Action performed by any member of theHospira Group (whether or not Section 4.02(e) is complied with), and (iii) anySection 355(e) Event with respect to Hospira (whether or not such Section355(e) Event is caused by a Specified Action).  A Section 355(e) Eventwith respect to Hospira means any event, involving the stock of Hospira or aHospira Affiliate or assets of any member of the Hospira Group, that causes theDistribution, the distribution described in the Private Letter Ruling by AbbottLaboratories, Inc. of the stock of Hospira Worldwide, Inc. (the “InternalDistribution”), or the Bahamian Distribution to be a taxable event to anymember of the Abbott Group as the result of the application of Section 355(e)of the Code.

###  

Section 3.02                                TransitionPeriod Tax.  Notwithstanding Section2.02(b)(i), if, as a result of a Determination, any member of the Abbott Groupincurs a Tax Detriment for a Post-Distribution Period with respect to anytransaction undertaken pursuant to any of the TMDS Agreements or the ICOAgreement, other than a transaction to effect a Local Closing, Hospira shall beresponsible for, and shall indemnify and hold harmless the Abbott Group fromand against any liability for, an amount equal to 50 percent of the sum of suchTax Detriment, reasonable attorney fees, and other costs incurred with respectthereto (the “Transition Period Tax”) whether or not any Tax Benefit results toany member of the Hospira Group; *provided, however*, if, at any time thereis: (i) a merger or consolidation of Hospira; (ii) the sale of all orsubstantially all of the assets of Hospira; or (iii) the acquisition by a ThirdParty of at least 30 percent of the combined voting power of thethen-outstanding securities of Hospira entitled to vote generally in the

 

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election of directors, Hospirashall indemnify Abbott for 100 percent of any Transition Period Tax withrespect to which a Determination occurs after the occurrence of the eventdescribed in clauses (i) through (iii) above, unless (a) the resulting,surviving, or transferee Person described above in clauses (i) through (iii)above assumes all the obligations of Hospira hereunder by operation of law orpursuant to an agreement and (b) Abbott consents to such assumption, (whichconsent shall not be withheld unreasonably). It shall not be deemed to be unreasonable for Abbott to withhold consenton the basis that the Person proposing to make such assumption is a competitorof Abbott.

##  

**Article IV.****                                      REPRESENTATIONSAND COVENANTS**

** **

## Section 4.01                                Representations.

##  

### (a)               Abbott represents that, as of the dateof this Agreement, neither it nor any of its Affiliates knows of any fact thatwould jeopardize the Tax treatment of the transactions provided by the PrivateLetter Ruling or the Puerto Rican Ruling, or that otherwise would result in aCovered Transaction Tax.

###  

### (b)              Hospira represents that, as of the dateof this Agreement, neither it nor any of its Affiliates knows of any fact thatwould jeopardize the Tax treatment of the transactions provided by the PrivateLetter Ruling or the Puerto Rican Ruling, or that otherwise would result in aCovered Transaction Tax.

###  

### (c)               Abbott represents that, as of the dateof this Agreement, neither it nor any of its Affiliates has any plan orintention to take any action that is inconsistent with the Tax treatment of thetransactions provided by the Private Letter Ruling or the Puerto Rican Ruling,or that otherwise would result in a Covered Transaction Tax.

###  

### (d)              Hospira represents that, as of the date ofthis Agreement, neither it nor any of its Affiliates has any plan or intentionto take any action that is inconsistent with the Tax treatment of thetransactions provided by the Private Letter Ruling or the Puerto Rican Ruling,or that otherwise would result in a Covered Transaction Tax.

###  

### (e)               Hospira represents that, as of the dateof this Agreement, neither it nor any of its Affiliates has entered into anyagreement, understanding, arrangement, or substantial negotiation with respectto any transaction or event (including stock issuances, option grants, capitalcontributions, acquisitions, and changes in the voting power of any of itsstock), that may cause Section 355(e) of the Code to apply to the Distribution,the Internal Distribution, or the Bahamian Distribution.

###  

### (f)                 Abbott represents that, as of the dateof this Agreement, neither it nor any member of the Abbott Group has enteredinto any agreement, understanding, arrangement, or substantial negotiation withrespect to any transaction or event (including stock issuances, option grants,capital contributions, acquisitions, and changes in the voting power of any ofits stock), that may cause Section 355(e) of the Code to apply to theDistribution, the Internal Distribution, or the Bahamian Distribution.

 

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## Section 4.02                                Covenants.

##  

### (a)               Successor Employer.  In connection with the Distribution, Abbottand Hospira covenant and agree to treat Hospira as a “successor employer”pursuant to the alternate procedures in Revenue Procedure 96-60 for payroll Taxreporting purposes.  Hospira shallassume reporting responsibilities for filing Forms W-2 and other payroll Taxforms for the U.S. Transferred Employees for the entire 2004 calendaryear.  Abbott covenants and agrees tocooperate in the administration and implementation of the alternate proceduresfor successor payroll processing provided by Revenue Procedure 96-60 and not toreport such compensation on any basis inconsistent therewith to anygovernmental authority.  Hospiracovenants and agrees to indemnify and reimburse Abbott for any costs ofresponding to any notices received from any governmental authority, the costsof defending the position that Hospira qualifies as a “successor employer”before any governmental agency, and any additional Taxes, fines, penalties,and/or interest imposed on Abbott if such position ultimately is found to beincorrect.

###  

### (b)              Conduct. Hospira covenants and agrees that it shall not take, and it shall causeits Affiliates to refrain from taking, any action that reasonably may beexpected to result in any increased Tax liability or reduced Tax attribute ofany member of the Abbott Group.  Thisincludes taking any action that is inconsistent with the Tax treatment of thetransactions provided by the Private Letter Ruling or the Puerto Rican Ruling(any such action, including any action referred to in Section 4.02(b)(i)through (iii), is referred to in this Agreement as a “Specified  Action”). Without limiting the foregoing:

###  

#### (i)             Specified Actions.  Any time before the second anniversary ofthe Distribution Date, Hospira shall not (and shall cause its Affiliates tonot) (A) liquidate, merge, or consolidate with or into any corporation that wasnot already wholly owned by Hospira or by a wholly owned subsidiary of Hospiraprior to such transaction; (B) issue any of its capital stock in one or moretransactions, other than (i) issuances to employees, directors, or independentcontractors in connection with the performance of services for Hospira (thatare not excessive by reference to the services performed) which issuanceseither (x) are with respect to the exercise of options of Hospira that aresubstituted for Abbott options or (y) satisfy the requirements of TreasuryRegulations Section 1.355-7T(d)(6) to not be treated for purposes of Section355(e) of the Code to be part of a plan or series of related transactions thatincludes the Distribution, the Internal Distribution, or the BahamianDistribution, or (ii) issuances of stock to a retirement plan qualified underSection 401(a) or 403(a) of the Code in a transaction that satisfies therequirements of Treasury Regulations Section 1.355-7T(d)(7); (C) redeem,purchase, or otherwise reacquire any of its capital stock in one or more transactions;(D) change the voting rights of any of its stock; (E) issue any options toacquire Hospira Shares other than options that satisfy the requirements ofTreasury Regulations Section 1.355-7T(e)(3)(ii); (F) sell, exchange,distribute, or otherwise dispose of, other than in the ordinary course ofbusiness, all or a substantial part of the assets of any of the trades orbusinesses relied on to satisfy Section 355(b) of the Code; or (G) discontinueor cause to be discontinued the active conduct of any of the trades orbusinesses relied on to satisfy Section

 

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#### 355(b) of the Code. Notwithstanding the foregoing, clauses (A) through (E) of this Section4.02(b)(i) shall not apply unless there are transactions described in suchclauses any time before the second anniversary of the Distribution Date thatresult in one or more Persons acquiring directly or indirectly stockrepresenting, in the aggregate, 25 percent or greater interest in Hospira (asdefined in Sections 355(d)(4) and 355(e) of the Code).

####  

#### (ii)          No Inconsistent Actions.  Regardless of any change in circumstances,Hospira covenants and agrees that it shall not take any action (and it shallcause its Affiliates to refrain from taking any action) that is inconsistentwith any factual statements or representations in the Private Letter Ruling orthe Puerto Rican Ruling on or before the second anniversary of the DistributionDate other than as permitted in this Section 4.02.  For this purpose an action is considered inconsistent with arepresentation if the representation states that there is no plan or intentionto take such action.

####  

#### (iii)       Section 355(e). Without in any manner limiting paragraph (i) or (ii) of Section 4.02(b),Hospira covenants and agrees that, through the second anniversary of theDistribution Date, it shall refrain from entering into (and it shall cause itsAffiliates to refrain from entering into) any agreement, understanding,arrangement, or substantial negotiation with respect to any transaction orevent (including stock issuances, option grants, capital contributions,acquisitions, or changes in the voting power of any of its stock), that couldreasonably be expected to cause Section 355(e) of the Code to apply to theDistribution, the Internal Distribution, or the Bahamian Distribution.

####  

### (c)               Amended or Supplemental Rulings.  Hospira covenants and agrees that it shallrefrain from filing, and it shall cause its Affiliates to refrain from filing,a request for any amendment or supplement to the Private Letter Ruling or thePuerto Rican Ruling subsequent to the Distribution Date without the consent ofAbbott, which consent shall not be withheld unreasonably.

###  

### (d)              Tax Returns.  Each of Abbott and Hospira covenants and agrees that it shallrefrain from taking, and it shall cause its Affiliates to refrain from taking,any position on a Tax Return that is inconsistent with (i) the Tax treatment ofthe transactions provided by the Private Letter Ruling, (ii) the Contributionqualifying for Tax-free treatment under Sections 361 and 368 of the Code, (iii)the Tax treatment of the transactions provided by the Puerto Rican Ruling, (iv)the payment obligations of the TMDS Agreements and the ICO Agreement, (v) theallocation of the benefits and burdens of Hospira assets and liabilitiespursuant to Section 2.03 of the Distribution Agreement and Sections 2.2 and 3.1of the ICO Agreement, or (vi) the documents effecting any transactionundertaken in connection with the Separation that is not addressed by thePrivate Letter Ruling.

###  

### (e)               Exception.  Notwithstanding the foregoing, Hospira shall be permitted to takean action inconsistent with Section 4.02(b), if, prior to taking such action,Hospira provides notification to Abbott of its plans with respect to suchaction and promptly responds to any inquiries by Abbott following suchnotification, and (unless Abbott agrees otherwise

 

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### in writing) either:

###  

#### (i)             In the case of the Distribution or theInternal Distribution, Hospira obtains a supplemental ruling with respect tothe action from the Internal Revenue Service that is reasonably satisfactory toAbbott (except that Hospira shall not submit any supplemental ruling request ifAbbott determines in good faith that filing such request could have amaterially adverse effect on Abbott), on the basis of facts and representationsconsistent with the facts at the time of such action, that such action will notaffect the Tax treatment of the transactions provided by the Private LetterRuling,

####  

#### (ii)          In case of the Distribution, the InternalDistribution, or the Bahamian Distribution, Hospira obtains an opinion,reasonably acceptable to Abbott, of an independent nationally recognized Taxcounsel, reasonably acceptable to Abbott, on the basis of facts andrepresentations consistent with the facts at the time of such action, that suchaction will not affect the Tax treatment of the transactions provided by thePrivate Letter Ruling or the intended Tax treatment of the BahamianDistribution, or

####  

#### (iii)       In case of the Puerto Rican Transaction, Hospiraobtains:

####  

#### (a)          a supplemental ruling with respect to theaction from the Puerto Rican Tax Authority that is reasonably satisfactory toAbbott (except that Hospira shall not submit any supplemental ruling request ifAbbott determines in good faith that filing such request could have amaterially adverse effect on Abbott or any of its Affiliates), or

####  

#### (b)         an opinion, reasonably acceptable to Abbott,of an independent Tax counsel, reasonably acceptable to Abbott,

####  

#### on the basis of facts and representations consistent with the facts atthe time of such action, that such action will not affect the Tax treatment ofthe transactions provided by the Puerto Rican Ruling.

####  

Notwithstanding anything to the contrary inthis Agreement, Hospira shall be responsible for, and shall indemnify Abbottand hold Abbott harmless from, any Covered Transaction Tax resulting from aSpecified  Action of Hospira or any ofHospira’s Affiliates, regardless of whether the exception of this Section4.02(e) is satisfied with respect to such act.

 

## Section 4.03                                NoContinuing Liability for Former Members.

##  

### (a)               Abbott Affiliates.  If an Abbott Affiliate ceases to be a memberof the Abbott Group as a result of a sale or exchange of all of the stock ofsuch member, other than an exchange for which the consideration received byAbbott is the stock of Abbott or an Abbott Affiliate, the departing AbbottAffiliate shall be released from its obligations under this Agreement upon itsdeparture from the Abbott Group.

 

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### (b)              Hospira Affiliates.  If a Hospira Affiliate ceases to be a memberof the Hospira Group as a result of a sale or exchange of all of the stock ofsuch member, other than an exchange for which the consideration received byHospira is the stock of Hospira or a Hospira Affiliate, the departing HospiraAffiliate shall be released from its obligations under this Agreement upon itsdeparture from the Hospira Group; provided, however, that no member of theHospira Group shall be released from any obligations under Section 2.01(b)(ii)hereof unless approved in writing by Abbott, which approval shall not beunreasonably withheld.

###  

**Article V.****                                          MISCELLANEOUSPROVISIONS**

** **

## Section 5.01                                Counterparts;Entire Agreement; Corporate Power; Facsimile Signatures.

##  

### (a)               Counterparts.  This Agreement may be executed in one or more counterparts, allof which shall be considered one and the same agreement.

###  

### (b)              Entire Agreement.  This Agreement and the exhibits heretocontain the entire agreement between the Parties with respect to the subjectmatter hereof, supersede all previous agreements, negotiations, discussions,writings, understandings, commitments and conversations with respect to suchsubject matter and there are no agreements or understandings between theParties other than those set forth or referred to herein.  Notwithstanding any other provisions in theDistribution Agreement or any other agreement entered into in connection with theDistribution (except the EBA) to the contrary, in the event and to the extentthat there is a conflict between the provisions of this Agreement and theprovisions of the Distribution Agreement or any other agreement entered into inconnection with the Distribution (except the EBA), the provisions of thisAgreement shall control.

###  

### (c)               Corporate Power.  Abbott represents on behalf of itself and,to the extent applicable, each Abbott Affiliate and Hospira represents onbehalf of itself and, to the extent applicable, each Hospira Affiliate asfollows:

###  

#### (i)             each such Person has the requisitecorporate or other power and authority and has taken all corporate or otheraction necessary in order to execute, deliver and perform this Agreement towhich it is a Party and to consummate the transactions contemplated hereby andthereby; and

####  

#### (ii)          this Agreement to which it is a Party hasbeen duly executed and delivered by it and constitutes a valid and bindingagreement of it enforceable in accordance with the terms thereof.

####  

### (d)              Facsimile Signatures.  Each Party acknowledges that it and theother Party may execute this Agreement or amendment hereto by facsimile, stampor mechanical signature.  Each Partyexpressly adopts and confirms each such facsimile, stamp or mechanicalsignature made in its respective name as if it were a manual signature, agreesthat it shall not assert that any such signature is not adequate to bind suchParty to the same extent as if it were signed manually and agrees that at thereasonable request of the other Party at any time it

 

18

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### shall as promptly as reasonably practicable cause this Agreement or anyamendment hereto to be manually executed (any such execution to be as of thedate of the initial date thereof).

###  

## Section 5.02                                GoverningLaw.  This Agreement shall be governedby and construed and interpreted in accordance with the laws of the State ofIllinois irrespective of the choice of laws principles of the State ofIllinois, as to all matters, including matters of validity, construction,effect, enforceability, performance and remedies.

##  

## Section 5.03                                Assignability.  This Agreement shall be binding upon andinure to the benefit of the Parties, respectively, and their respectivesuccessors and permitted assigns; provided, however, that neither Partymay assign its rights or delegate its obligations under this Agreement withoutthe express prior written consent of the other Party hereto.  Notwithstanding the foregoing, thisAgreement shall be assignable in whole in connection with a merger orconsolidation or the sale of all or substantially all of the assets of a Partyso long as the resulting, surviving or transferee Person assumes all theobligations of the relevant Party thereto by operation of law or pursuant to anagreement in form and substance reasonably satisfactory to the other Party.

##  

## Section 5.04                                ThirdParty Beneficiaries.  The provisions ofthis Agreement are solely for the benefit of the Parties and their respectiveAffiliates, after giving effect to the Distribution, and are not intended toconfer upon any Person except the Parties and their respective Affiliates,after giving effect to the Distribution, any rights or remedies hereunder; and(b) there are no other third party beneficiaries of this Agreement and thisAgreement shall not provide any other third party with any remedy, claim,liability, reimbursement, claim of action or other right in excess of thoseexisting without reference to this Agreement.

##  

## Section 5.05                                Notice.  All notices or other communications underthis Agreement must be in writing and shall be deemed to be duly given: (a)when delivered in person; (b) upon transmission via confirmed facsimiletransmission, provided that such transmission is followed by delivery of aphysical copy thereof in person, via U.S. first class mail, or via a privateexpress mail courier; or (c) two days after deposit with a private express mailcourier, in any such case addressed as follows:

##  

If to Abbott,to:

 

AbbottLaboratories100 Abbott Park RoadBuilding AP6D, Dept. 364Abbott Park, IL  60064-6020Facsimile: (847) 938-6277Attention: General Counsel

 

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With a copyto:

 

AbbottLaboratories100 Abbott Park RoadD-367 AP6DAbbott Park, IL  60064-6057Facsimile: Attention: Vice President-Tax

 

If to Hospira,to:

 

Hospira, Inc.Legal DepartmentDept. NLEG275 N. Field DriveP.O. Box 5045Lake Forest, Illinois 60045-5045Facsimile: (224) 212-3312Attention: General Counsel

 

With a copy to:

 

Hospira, Inc.275 N. Field DriveLake Forest, Illinois 60045Facsimile:Attention: Vice President – Tax.

 

Any Party may, by notice to theother Party, change the address to which such notices are to be given.

 

## Section 5.06                                Severability.  If any provision of this Agreement or theapplication thereof to any Person or circumstance is determined by a court ofcompetent jurisdiction to be invalid, void or unenforceable, the remainingprovisions hereof or thereof, or the application of such provision to Personsor circumstances or in jurisdictions other than those as to which it has beenheld invalid or unenforceable, shall remain in full force and effect and shallin no way be affected, impaired or invalidated thereby, so long as the economicor legal substance of the transactions contemplated hereby or thereby, as thecase may be, is not affected in any manner adverse to any Party.  Upon such determination, the Parties shallnegotiate in good faith in an effort to agree upon a suitable and equitableprovision to effect the original intent of the Parties.

##  

## Section 5.07                                ForceMajeure.  Neither Party shall be deemedin default of this Agreement to the extent that any delay or failure in theperformance of its obligations under this Agreement results from any causebeyond its reasonable control and without its fault or negligence, such as actsof God, acts of Governmental Authority, embargoes, epidemics, war, riots,insurrections, acts of terrorism, fires, explosions, earthquakes, floods,unusually severe weather conditions, labor

 

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## problems orunavailability of parts, or, in the case of computer systems, any failure inelectrical or air conditioning equipment. In the event of any such excused delay, the time for performance shallbe extended for a period equal to the time lost by reason of the delay.

##  

## Section 5.08                                Headings.  The article, section and paragraph headingscontained in this Agreement are for reference purposes only and shall notaffect in any way the meaning or interpretation of this Agreement.

##  

## Section 5.09                                Survivalof Covenants.  The covenants, releases,indemnities, representations and warranties contained in this Agreement, andliability for the breach of any obligations contained herein, shall survive theEffective Time and shall remain in full force and effect thereafter.

##  

## Section 5.10                                Affiliates.  Abbott shall cause to be performed, andhereby guarantees the performance of, all actions, agreements and obligationsset forth herein to be performed by any member of the Abbott Group and Hospirashall cause to be performed, and hereby guarantees the performance of, allactions, agreements and obligations set forth herein to be performed by anymember of the Hospira Group.

##  

## Section 5.11                                Waiversof Default.  Waiver by either Party ofany default by the other Party of any provision of this Agreement shall not bedeemed a waiver by the waiving Party of any subsequent or other default, norshall it prejudice the rights of the other Party.

##  

## Section 5.12                                Amendments.  No provisions of this Agreement shall bedeemed amended, supplemented or modified unless such amendment, supplement ormodification is in writing and signed by an authorized representative of bothParties.  No provisions of thisAgreement shall be deemed waived unless such waiver is in writing and signed bythe authorized representative of the Party against whom it is sought to beenforced.

##  

## Section 5.13                                Interpretation.  Words in the singular shall be deemed toinclude the plural and vice versa and words of one gender shall be deemed toinclude the other genders as the context requires.  The terms “hereof,” “herein,” and “herewith” and words of similarimport shall, unless otherwise stated, be construed to refer to this Agreementas a whole (including all of the Exhibits hereto) and not to any particularprovision of this Agreement.  Article,Section, and Exhibit references are to the Articles, Sections, and Exhibits tothis Agreement unless otherwise specified. Unless otherwise stated, all references to any agreement shall be deemedto include the exhibits to such agreement. The word “including” and words of similar import when used in thisAgreement shall mean “including, without limitation,” unless the contextotherwise requires or unless otherwise specified.  The word “or” shall not be exclusive.  Unless otherwise specified in a particular case, the word “days”refers to calendar days.  Referencesherein to this Agreement shall be deemed to refer to this Agreement as of theEffective Time and as it may be amended thereafter, unless otherwisespecified.  References to theperformance, discharge or fulfillment of any liability in accordance with itsterms shall have meaning only to the extent such liability has terms.

##  

## Section 5.14                                Advisors.  Abbott may select any Tax Counsel inconnection with the Distribution, which may include Mayer, Brown, Rowe &Maw LLP, Baker & McKenzie and McDermott, Will & Emery.  Hospira acknowledges, for itself and eachHospira Affiliate, that

 

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Mayer, Brown, Rowe & MawLLP, Baker & McKenzie and McDermott, Will & Emery have acted only inthe capacity as counsel to Abbott, and not as counsel to Hospira or any HospiraAffiliate, in connection with this Agreement and the provisions contemplatedherein.

##  

## Section 5.15                                MutualDrafting.  This Agreement shall bedeemed to be the joint work product of the Parties and any rule of constructionthat a document shall be interpreted or construed against a drafter of suchdocument shall not be applicable.

##  

## Section 5.16                                DisputeResolution.  Any and all disputesbetween Abbott and Hospira arising out of any provision of this Agreement shallbe resolved through the procedures provided in the Master ADR Agreementattached hereto as Exhibit 1.

##  

## Section 5.17                                Payments.

##  

### (a)               Procedure for Requesting and MakingIndemnification Payments.  On theoccurrence of an event for which a Party is entitled to receive indemnificationhereunder, such Party (the “Indemnified Party”) shall send the other Party (the“Indemnifying Party”) an invoice requesting payment accompanied by a statementdescribing in reasonable detail the amount owed and the particulars relatingthereto.  Unless a provision in thisAgreement specifically provides a different time for payment, the IndemnifyingParty shall pay to the Indemnified Party any payment it owes to the IndemnifiedParty under this Agreement within thirty (30) days after the receipt of theinvoice for such payment.

###  

### (b)              Procedure for Making Other Payments.  If a Party is responsible for any Tax underSection 2.01 (the “Responsible Party”) and such Tax must be remitted by theother Party (the “Remitting Party”), the Remitting Party shall send theResponsible Party an invoice requesting payment accompanied by a statement describingin reasonable detail the amount owed and the particulars relating thereto.  Unless a provision in this Agreementspecifically provides a different time for payment, the Responsible Party shallpay to the Remitting Party any payment it owes to the Remitting Party underthis Agreement no later than thirty (30) days before the Remitting Party mustremit the Tax to the appropriate Tax Authority.

###  

### (c)               Character of Payments.  For Tax purposes, the Parties agree to treatany payment pursuant to this Agreement in the same manner as a capitalcontribution by Abbott to Hospira or an adjustment to the Contribution made inthe last taxable period beginning before the Distribution and, accordingly, asnot includible in the gross income of the recipient and not deductible by thepayor.  If pursuant to a Determinationit is determined that the receipt or accrual of any payment made under thisAgreement is subject to any Tax, the Party making such payment shall beresponsible for the After-Tax Amount with respect to such payment.  The failure of a Party to include anAfter-Tax Amount in a demand for payment pursuant to this Agreement shall notbe deemed a waiver by the Party of its right to receive an After-Tax Amountwith respect to such payment.

###  

### (d)              Interest on Late Payments.  Unless a provision in this Agreementspecifically provides otherwise, any payment required to be made pursuant tothis Agreement that is not made on or before the due date for such paymentshall bear interest from the date after the due

 

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### date to and including the date of payment at the Prime Rate plus twopercent.  Such interest shall be paid atthe same time as the payment to which it relates.  Any interest payable pursuant to this paragraph that is not paidwhen due shall bear interest at the Prime Rate plus two percent.

 

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**IN WITNESS WHEREOF**,the Parties have executed and delivered this Agreement as of the day and yearfirst written above.

 
|   | **ABBOTT LABORATORIES**                                                     |   |
|--------|-----------------------------------------------------------------------------|--------|
|   |                                                                        |   |
|   |                                                                        |   |
|   | By:                                                                         |   |   |   |
|   | Name: Thomas  C. Freyman                                                    |   |
|   | Title:  Executive Vice President, Finance and  Chief Financial Officer |   |
|   |                                                                        |   |
|   | **HOSPIRA, INC.**                                                           |   |
|   |                                                                        |   |
|   |                                                                        |   |
|   | By:                                                                         |   |   |   |
|   | Name:  Christopher B. Begley                                                |   |
|   | Title: Chief  Executive Officer                                             |   |

 

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