**Exhibit 10.5**

 

**INFORMATION TECHNOLOGY AGREEMENT**

 

THIS INFORMATION TECHNOLOGY AGREEMENT, dated as of April 29, 2004and effective as of May 1, 2004 (the “Effective Date”), is by and betweenABBOTT LABORATORIES, an Illinois corporation (“Abbott”), and HOSPIRA, INC., aDelaware corporation (“Hospira”).

 

**R E C I T A L S:**

 

**WHEREAS**, the boardof directors of Abbott has determined that it is appropriate and advisable toseparate Abbott’s core hospital products business from its other businesses;

 

**WHEREAS**, in order toeffectuate the foregoing, Abbott and Hospira have entered into a Separation andDistribution Agreement dated as of April 12, 2004 (the “Separation andDistribution Agreement”), which provides, among other things, subject to theterms and conditions set forth therein, for the contribution to Hospira ofcertain assets, the assumption by Hospira of certain liabilities and thedistribution of Hospira common stock to Abbott shareholders, and for theexecution and delivery of certain other agreements in order to facilitate andprovide for the foregoing;

 

**WHEREAS**, in order toensure an orderly transition under the Separation and Distribution Agreement itwill be necessary for each of the Parties (as defined herein) to cooperate toprovide for the separation of various information technology systems andservices that are currently shared between the Parties, are provided by Abbottto Hospira or are planned to be implemented by both Parties; and

 

**WHEREAS**, the Partiesintend that all separation activities to be completed under this Agreementshall be completed by the end of the two-year term of this Agreement.

 

**NOW, THEREFORE**, inconsideration of the mutual agreements, provisions and covenants contained inthis Agreement, and subject to and on the terms and conditions herein setforth, the Parties hereby agree as follows:

 

Section 1.                                            **DEFINITIONS.**

 

For purposes of this Agreement, the following terms shall have thefollowing meanings:

 

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

 

“Abbott Assets” has the meaning set forth in the Separation andDistribution Agreement.

 

“Abbott Business” means all businesses and operations (whether or notsuch businesses or operations are or have been terminated, divested ordiscontinued) conducted prior to the Effective Date by Abbott, the AbbottSubsidiaries, Hospira and the Hospira Subsidiaries, in each case that are notincluded in the Hospira Business.

 

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“Abbott Indemnitee” has the meaning set forth in Section 7(c)(ii).

 

“Abbott Liabilities” has the meaning set forth in the Separation andDistribution Agreement.

 

“Abbott Owned Materials” has the meaning set forth in Section 3(a)(i).

 

“ADR” has the meaning set forth in Section 7(k).

 

“Agreement” means this Information Technology Agreement and each of theSchedules hereto.

 

“Ancillary Agreements” has the meaning set forth in the Separation andDistribution Agreement.

 

“Business Entity” means any corporation, general or limitedpartnership, trust, joint venture, unincorporated organization, limitedliability entity or other entity.

 

“Change of Control Event” has the meaning set forth in Section 7(o).

 

“Charges” has the meaning set forth in Section 2(d)(i).

 

“Consents” means any consents, waivers or approvals from, ornotification requirements to, any Third Parties.

 

“Derivative Work” means a work based on one or more preexisting works,including a condensation, transformation, translation, modification, expansionor adaptation that, if prepared without authorization of the owner of thecopyright of such preexisting work, would constitute a copyright infringementunder applicable law, but excluding the preexisting work.

 

“Developed Materials”****meansany Materials (including software), or any modifications, enhancements orDerivative Works thereof, which (i) are jointly developed by or on behalf ofthe Parties or any of their Subsidiaries in connection with or as part of theServices and (ii) are not otherwise Abbott Owned Materials or Hospira OwnedMaterials.

 

 “Effective Date” has themeaning set forth in the Preamble.

 

“Expiration Date” has the meaning set forth in the Section 5(a).

 

“Governmental Authority” means any supranational, international,national, federal, state, or local court, government, department, commission,board, bureau, agency, official or other regulatory, administrative orgovernmental authority, including the NYSE and any similar self-regulatory bodyunder applicable securities laws or regulations.

 

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

 

“Hospira Business” means the business and operations which are separatedfrom the Abbott Business pursuant to the Separation and Distribution Agreement.

 

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“Hospira Indemnitee” has the meaning set forth in Section 7(c)(i).

 

“Hospira IT Agreement” means any IT Agreement which is held in the nameof Abbott or any Abbott Subsidiary, and which is used exclusively in connectionwith, or relates solely to, the Hospira Business.

 

“Hospira Owned Materials” has the meaning set forth in Section 3(a)(ii).

 

“Indemnitee” means a Hospira Indemnitee or an Abbott Indemnitee.

 

“Information” means information, whether or not patentable orcopyrightable, in written, oral, electronic or other tangible or intangibleforms, including studies, reports, records, books, contracts, instruments,surveys, discoveries, ideas, concepts, know-how, techniques, designs,specifications, drawings, blueprints, diagrams, models, prototypes, samples,flow charts, data, computer data, disks, diskettes, tapes, computer programs orother software, marketing plans, customer names, communications by or toattorneys (including attorney-client privileged communications), memos andother materials prepared by attorneys or under their direction (includingattorney work product), and other technical, financial, employee or businessinformation or data.

 

“Intellectual Property License Agreements” means the IntellectualProperty License Agreements entered into prior to the Effective Date by andbetween the Parties pursuant to the Separation and Distribution Agreement.

 

“IT Agreement” means any software license or Third Party serviceagreement that is: (a) used by either Party or its Subsidiaries (i) to provideServices or Materials under this Agreement; or (ii) used to provide anyinformation technology services under the TSA; or (b) required in connectionwith the operation of the information technology systems and services of theHospira Business.

 

“Materials” shall mean all computing, networking, telecommunicationsand other equipment (firmware and hardware); all software programs andprogramming (and all modifications, replacements, upgrades, enhancements,documentation, materials and media related thereto), including all machinereadable and object code, and all source code, utilities, tools and validationpackages; and all other literary works, other works of authorship,specifications, design documents and analyses, processes, methodologies,programs, program listings, programming tools, user manuals, documentation,reports, drawings, databases, machine readable text and files, data and similaritems.

 

“Month End Rate” means for any currency other than United Statesdollars, the official average monthly rates used by Abbott for conversion ofits monthly financial statements, known as the average B.2.0 rate.  The month end B.2.0 rate is determined bytaking the numbers from the 9:00 a.m. (Central Time) Reuters screen at thesecond to last Abbott Park, Illinois business day of each calendar month (withthe exception of November, when the rate is taken on the last such businessday).  For the Euro, British Pound,Australian Dollar and New Zealand Dollar, the bid rate is used.  For all other currencies, the ask price isused.  An average monthly rate isdetermined by taking the simple average of the prior month book rate and thecurrent month book rate.  If theexchange rates available locally are not reflected on the Reuters screen,Abbott may

 

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choose to approve a deviation allowing the country to report ratesdirectly; provided such deviations are signed and in place in accordance withthe B.2.0 policy.

 

“NYSE” means The New York Stock Exchange, Inc.

 

“Other IT Agreement” means any IT Agreement that is not a Hospira ITAgreement or a Shared IT Agreement.

 

“Parties” means the parties to this Agreement.  “Party” means each Party to this Agreement.

 

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

 

“Prime Rate” means the rate which Citibank N.A. (or its successor oranother major money center commercial bank agreed to by the Parties) announcesas its prime lending rate, as in effect from time to time.

 

“Project Executive” has the meaning set forth in Section 7(e).

 

“Separation and Distribution Agreement” has the meaning set forth inthe Recitals.

 

“Separation Project” means each individual project that is described inthe Separation Projects Plan, and that is or will be described in greaterdetail in one or more Work Schedules.

 

“Separation Projects Plan” means the high level description ofinformation technology separation projects and the associated timeline forcompleting those projects that the Parties will undertake pursuant to thisAgreement to accomplish the separation of the information technology systemsand services, as such initial list is set forth in Schedule A, andas the same may be amended from time to time.

 

“Services” has the meaning set forth in Section 2(a).

 

“Shared IT Agreement” means any IT Agreement that is held in the nameof Abbott or any Abbott Subsidiary, which is used in connection with the AbbottBusiness and the Hospira Business.  Alist of Shared IT Agreements identified by the Parties to date is set forth in Schedule C.

 

“Subsidiary” of any Party means another Business Entity that isdirectly or indirectly controlled by such Party.  As used herein, “control” means the possession, directly orindirectly, of the power to direct or cause the direction of the management andpolicies of such Business Entity, whether through ownership of votingsecurities or other interests, by contract or otherwise.  For the avoidance of doubt, TAPPharmaceutical Products Inc., TAP Finance Inc. and TAP Pharmaceuticals Inc. arenot Subsidiaries of Abbott as that term is used in this Agreement.

 

“Taxes” means all forms of taxation or duties imposed, or required tobe collected or withheld, together with any related interest, penalties orother additional amounts.

 

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“Third Party” means any Person other than Abbott, any Abbott Subsidiary,Hospira and any Hospira Subsidiary.

 

“Third Party Claim” has the meaning set forth in Section 7(c)(vii).

 

“TSA” has the meaning set forth in Section 2(b).

 

“U.S.” or “United States” means the United States of America, includingeach of the 50 states thereof and the District of Columbia, but excludingPuerto Rico and all other territories and possessions.

 

“Work Schedule” means each document in the form set forth in Schedule Bthat is executed by the Parties pursuant to this Agreement, including eachapplicable “RFSS”, “Contract” or similar document referenced on such WorkSchedule, that details the work effort and further describes the Services to beperformed by Abbott and/or Hospira in connection with a particular SeparationProject(s).

 

Section 2.                                            **SERVICES.**

 

(a)                                  SERVICES.  Each of the Parties agrees to provide, orcause its respective Subsidiaries to provide, the applicable services(“Services”) set forth in any Work Schedule to Abbott or Hospira,respectively, and/or any of their Subsidiaries as designated in the WorkSchedule.  Each of the Parties furtheragrees to use good faith in negotiating any Work Schedules which are notcompleted as of the Effective Date. This Agreement is a master agreement. Each of the Parties, respectively, shall be responsible and liable forall the obligations under this Agreement of each of their respectiveSubsidiaries that performs Services hereunder.

 

(b)                                 TRANSITIONSERVICES AGREEMENTS AND CONFLICTS.  TheParties have entered into that certain U.S. Transition Services Agreement andthat certain Ex-U.S. Transition Services Agreement (collectively, the “TSA”)dated as of the same date as this Agreement. The TSA is intended to cover all services described therein that theParties will require to continue to operate their respective businesses afterthe Effective Date, including, without limitation, information technologyservices.  This Agreement is intended tocover all additional work effort that must be performed, and Materials thatmust be developed or procured, to separate the information technology systemsand services that (i) are currently shared between the Parties and/or theirrespective Subsidiaries, (ii) are currently provided by one of the Parties orits Subsidiary to the other Party or one or more of its Subsidiaries under theTSA, or (iii) are to be implemented by mutual agreement of the Parties.  If there is a conflict regarding Servicesprovided under this Agreement, and similar services described in the TSA, thisAgreement shall govern and control over such Services.  If there is a conflict between theprovisions of this Agreement and those of the Separation and DistributionAgreement, this Agreement shall govern and control with respect to the subjectmatter addressed in this Agreement.  Inaddition, if there is a conflict between this Agreement and any IntellectualProperty License Agreement, the Intellectual Property License Agreement shallgovern and control solely with respect to the subject matter of suchIntellectual Property License Agreement.

 

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(c)                                  PERFORMANCEOF SERVICES.

 

(i)                                     Eachof the Parties shall, and shall cause its Subsidiaries to, perform its dutiesand responsibilities hereunder in good faith and in a timely manner.  Neither Abbott nor Hospira, nor any of theirrespective Subsidiaries, shall be liable or held accountable, in damages orotherwise, for any error of judgment or any mistake of fact or law or foranything that Abbott or Hospira, or any of their respective Subsidiaries, doesor refrains from doing in good faith, except in the case of their grossnegligence or willful misconduct.

 

(ii)                                  Nothingin this Agreement shall require either Party or its Subsidiaries to perform orcause to be performed any Service in a manner that would constitute a violationof applicable law.

 

(iii)                               (A)Neither Party nor any of its Subsidiaries will be required to perform or tocause to be performed any of the Services for the benefit of any Third Party orany other Person other than the other Party under this Agreement, and itsSubsidiaries, and (B) EXCEPT AS EXPRESSLY PROVIDED IN AN APPLICABLE WORKSCHEDULE, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL SERVICES ARE PROVIDED ONAN “AS-IS” BASIS, AND THAT EACH PARTY MAKES NO WARRANTIES, EXPRESS OR IMPLIED,WITH RESPECT TO THE SERVICES, AND HEREBY DISCLAIMS ANY REPRESENTATION ORWARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE,NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER.

 

(d)                                 CHARGESFOR SERVICES AND PERFORMANCE OF SEPARATION PROJECTS.

 

(i)                                     EstimatedCharges.  Each Work Schedule shallspecify the Party that shall bear the costs and expenses of the Services,including the acquisition, procurement, leasing or licensing of Materials, andall other costs and expenses associated with a Party completing a particularSeparation Project (all such costs and expenses are collectively referred to asthe “Charges”).  The Charges forcompleting Separation Projects shall be borne by the Parties according to theterms set forth in Schedule D; provided, that the Charges shallexclude any and all amounts for services performed by a Third Party that is notan agent, supplier, subcontractor or independent contractor of the Partyproviding the Services under such Work Schedule.  The Charges set forth in a Work Schedule shall be a goodfaith estimate of the charges for the Services covered by that Work Schedule,and shall neither be binding on the Party providing such estimate nor convertthe Work Schedule into a fixed-price contract.  Any such estimate is for informational purposes only, and theactual fees payable for any Services may be higher or lower than that estimate,with such higher amounts, if applicable, to be paid by the Party responsiblefor such Charges under the applicable Work Schedule.   The Charges shall be calculated in the local currency of theParty providing the Services and shall be translated into U.S. Dollars usingthe Month End Rate for such currency for the applicable month.   In the event that a Local Closing (asdefined under the applicable Transition Marketing and Distribution ServicesAgreement) occurs for any country, but Services are still being provided forthat country under this Agreement, the Parties will negotiate in good faithappropriate modifications to the Charges for such Services.

 

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(ii)                                  ReportingObligations.  The Project Executiveor their designee shall be responsible for overseeing the Separation Projectsand the progress of the Services in light of the estimated Charges.  As described in more detail in eachapplicable Work Schedule, each Party shall report to the other Party regardingthe status of each Separation Project in the manner and with the frequencydescribed in the applicable Work Schedule (including the identification ofany known overages in the estimated Charges and an updated estimate to completesuch Separation Project), and, in any event, no less frequently than monthlyduring the term of this Agreement. Unless otherwise agreed in writing, the Parties shall provide suchreporting using the form of status report attached hereto as Schedule G.

 

(e)                                  CHANGECONTROL PROCEDURES.  During the term ofthis Agreement, Abbott and/or Hospira may desire a change in the scope of theeffort, including modifying, updating and/or refining any Work Schedule orthe Separation Projects Plan.  Requestsfor all changes shall be made in writing and delivered to the appropriateProject Executive.  The ProjectExecutives from both Parties shall review the proposed change and: (i) approveit; (ii) return it with a request for more detail or information; or (iii)reject it.  The Project Executives shallagree on any Charges for such change, including the charges for investigatingsuch change if applicable.  If thechange is authorized, the Parties’ Project Executives shall so indicate inwriting, which writing shall constitute approval for the change and theapplicable Charges.  The writing shallalso indicate the effect that the change will have on the other terms andconditions of the applicable Work Schedule(s). Except as may otherwise be agreed in writing, the Party requesting achange shall compensate the other party for investigating and preparing anyproposed addendum or change to a Work Schedule.

 

(f)                                    TRANSITIONALNATURE OF SERVICES.  The Partiesacknowledge the transitional nature of the Services and agree to cooperate ingood faith and to use commercially reasonable efforts to effectuate a smoothtransition and completion of the Separation Projects.

 

(g)                                 COOPERATION.  In the event that (i) there isnonperformance of any Service as a result of an event described in Section 7(d),or (ii) the provision of a Service would violate applicable law, the Partiesagree to work together in good faith to arrange for an alternative means by whichthe Separation Project may be accomplished.

 

(h)                                 USEOF THIRD PARTIES.

 

(i)                                     THIRDPARTIES USED TO PROVIDE THE SERVICES. Either Party may perform its obligations herein through its Subsidiariesor through agents, suppliers, subcontractors or independent contractors of suchParty, or of its Subsidiaries; provided, that each such agent, supplier,subcontractor or independent contractor (and the individual employees of suchPersons) used by a Party shall be subject to the reasonable prior approval ofthe other Party.  The Parties herebyapprove the use of any of the suppliers listed in Schedule E;provided, however, that each Party reserves the right to reasonably approve orreject individual employees of such suppliers. In addition, if in connection with the provision of Services orMaterials a Party uses any agent, supplier, subcontractor or independentcontractor who has been fired, dismissed or relieved of its obligations by theother Party or its Subsidiary due to poor performance or other cause, the otherParty shall be entitled to cause the hiring Party to promptly remove andreplace such agent, supplier subcontractor or independent contractor.

 

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(ii)                                  THIRDPARTIES USED FOR MATTERS OUTSIDE THE SCOPE OF THE SERVICES.  Each Party shall also have the right toengage agents, suppliers, subcontractors or independent contractors to provideservices that are outside the scope of the Services, provided that such Third Partieswill not, either individually or in connection with one or more other agents,suppliers, subcontractors or independent contractors (including the ThirdParties described in Section 2(h)(i)) materially adversely affectthe Services without the other Party’s reasonable consent; and further,provided that the engaging Party shall be solely responsible for all suchagents, suppliers, subcontractors or independent contractors.

 

(iii)                               TERMSAPPLICABLE TO ALL THIRD PARTIES USED BY A PARTY.  Each Party shall cooperate with and work in good faith with theagents, suppliers, subcontractors and independent contractors engaged by theother Party in connection herewith or in connection with related services thatrequire the cooperation of such Party. Such cooperation may include providing reasonable access to thefacilities, systems, equipment and/or software required by the other Party toprovide the Services or such related services, solely to the extent necessaryfor such agents, suppliers, subcontractors and independent contractors toperform the work assigned to them.  Theengaging Party shall cause all such agents, suppliers, subcontractors andindependent contractors to comply with the other Party’s security andconfidentiality requirements. Notwithstanding anything in this Agreement to the contrary, a Partyshall not be relieved of its obligations under this Agreement by use of anySubsidiaries, agents, suppliers, subcontractors or independent contractors.

 

(i)                                     SECURITYPROCEDURES.  Each Party’s respectivesecurity administration groups shall, subject to the reasonable approval of theother Party, establish and maintain environmental, safety and facilityprocedures, data security procedures and other safeguards against thedestruction, loss, unauthorized access or alteration of systems or Materials ofthe other Party which are (i) no less rigorous than those maintained by a Partyfor its own information of a similar nature, and (ii) adequate to meet therequirements of the other Party’s security policies and applicable law. In the event a Party discovers or is notified of a breach or potentialbreach of security relating to systems or Materials of the other Party, suchParty will expeditiously under the circumstances notify the other Party, andwill cooperate in the investigation and remediation of the effects of suchbreach or potential breach of security.

 

(j)                                     CONSENTS.

 

(i)                                     HospiraIT Agreements.  Subject to theParties obtaining any required Consents, Abbott or the applicable AbbottSubsidiary shall assign to Hospira or the applicable Hospira Subsidiary anyHospira IT Agreement.  The assignmentshall be subject to the terms of the Separation and Distribution Agreement, andthe rights and obligations under such IT Agreement shall be Hospira Assets andHospira Liabilities and, if applicable, Delayed Transfer Assets and DelayedTransfer Liabilities, as such terms are defined in the Separation andDistribution Agreement.  The costs ofobtaining any required Consent in connection with the assignment of any HospiraIT Agreement shall be borne solely by Hospira. If, despite using their commercially reasonable efforts, the Parties areunable to obtain a Consent in connection with a Hospira IT Agreement, then,unless and until such Consent is obtained, the Parties shall use theircommercially reasonable efforts to use mutually acceptable alternativeapproaches to provide the Services or to deliver substantially similar benefitsat the sole cost and expense of Hospira.

 

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(ii)                                  SharedIT Agreements.  Subject to theParties obtaining any required Consents, Abbott or the applicable AbbottSubsidiary shall assign to Hospira or the applicable Hospira Subsidiary thatportion of any Shared IT Agreement that relates to the Hospira Business.  The partial assignment shall be subject tothe terms of the Separation and Distribution Agreement, and the rights andobligations under the assigned portion of such IT Agreement shall be HospiraAssets and Hospira Liabilities and, if applicable, Delayed Transfer Assets andDelayed Transfer Liabilities, as such terms are defined in the Separation andDistribution Agreement.  If, despiteusing their commercially reasonable efforts, the Parties are unable to obtain aConsent in connection with a Shared IT Agreement, then, unless and until suchConsent is obtained, the Parties shall use their commercially reasonableefforts to use mutually acceptable alternative approaches to provide theServices or to deliver substantially similar benefits at the sole cost andexpense of Hospira.  The Parties shallcooperate in obtaining Consents in connection with Shared IT Agreements in amanner which is substantially similar to such Parties’ efforts during the twomonth period prior to the Effective Date (“Assignment Efforts”).  Notwithstanding the foregoing in this Section 2(j)(ii),if the partial assignment of a Shared IT Agreement to Hospira or a HospiraSubsidiary will require a transfer fee to a Third Party (a “Third PartyPayment”), then the Parties will use Assignment Efforts to effect the partialassignment and make the Third Party Payment; provided that Abbott shall beresponsible for such Third Party Payment only if such partial assignment iseffected prior to July 1, 2004 and Hospira shall be responsible for suchThird Party Payment if such partial assignment is effected after June 30,2004.  The use of the term “AssignmentEfforts” in the previous sentence shall not be deemed to limit Abbott’sresponsibility for making Third Party Payments from the Effective Time throughJune 30, 2004.

 

(iii)                               TheParties recognize that the ultimate resolution of assignments of Shared ITAgreements will require the agreement of three (3) parties (i.e., the ThirdParty, Abbott and Hospira) regarding the number of licenses to be assigned, andthat, as of the Effective Date, the number of licenses which Abbott has andwhich Hospira requires is unknown. Accordingly, the Parties agree that the ultimate division of licensesbetween them shall be fair and equitable based upon their usage of theEffective Date.  The Parties agree touse Assignment Efforts and work in good faith to assign the licenses in atimely manner as the number of licenses becomes known, or as the licenseassignments  become critical pathprojects for Hospira.

 

Section 3.                                            **OWNERSHIP AND LICENSE RIGHTS IN MATERIALS.**

 

(a)                                  OWNEDMATERIALS.

 

(i)                                     Abbottshall be the sole and exclusive owner of Materials which are used in connectionwith the Services and are owned by Abbott, or licensed from Third Parties byAbbott, or any of its Subsidiaries, including all enhancements and DerivativeWorks of such Materials, including United States and foreign intellectualproperty rights in such Materials and shall retain all of Abbott’s, itsSubsidiaries’ and Third Party licensors’ rights in such Materials (all such owned,licensed, developed and provided Materials, “Abbott Owned Materials”). Subjectto the terms of any Consents, Abbott grants to Hospira, its Subsidiaries andtheir contractors and agents a non-exclusive, non-transferable, worldwide,limited right and license to use, execute, reproduce, display, perform, modifyand distribute the Abbott Owned Materials for the sole purpose of providingand/or receiving the Services during the term of this Agreement;

 

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provided, that this license does not giveHospira and its Subsidiaries, or their contractors or agents, the right, andHospira and its Subsidiaries, and their contractors and agents, are notauthorized, to sublicense such Materials or use them for the benefit of othercustomers or for any other purpose without Abbott’s prior written consent.  Abbott may, in its sole discretion and uponsuch terms and at such prices as the Parties may agree, grant Hospira a licenseto use the Abbott Owned Materials for other purposes and to sublicense suchMaterials.

 

(ii)                                  Hospirashall be the sole and exclusive owner of Materials which are used in connectionwith the Services and are owned by Hospira, or licensed from Third Parties byHospira, or any of its Subsidiaries, including all enhancements and DerivativeWorks of such Materials, including United States and foreign intellectualproperty rights in such Materials and shall retain all of Hospira’s, itsSubsidiaries’ and Third Party licensors’ rights in such Materials (all suchowned, licensed, developed and provided Materials, “Hospira OwnedMaterials”).  Subject to the terms ofany Consents, Hospira grants to Abbott, its Subsidiaries and their contractorsand agents a non-exclusive, non-transferable, worldwide, limited right andlicense to use, execute, reproduce, display, perform, modify and distribute theHospira Owned Materials for the sole purpose of providing and/or receiving theServices during the term of  thisAgreement; provided, that this license does not give Abbott and itsSubsidiaries or their contractors or agents, the right, and Abbott and itsSubsidiaries, and their contractors and agents, are not authorized, tosublicense such Materials or use them for the benefit of other customers or forany other purpose without Hospira’s prior written consent.  Hospira may, in its sole discretion and uponsuch terms and at such prices as the Parties may agree, grant Abbott a licenseto use the Hospira Owned Materials for other purposes and to sublicense suchMaterials.

 

(b)                                 DEVELOPEDMATERIALS.

 

(i)                                     Ownership.  The Parties shall jointly own allintellectual property rights in all Developed Materials.  The Parties will, without limitation, retainthe right to make, have made, use, lease, import, offer for sale, or sell andpractice methods used in the creation or provision of products or services thatincorporate the Developed Materials to the extent that such actions do notinfringe upon the intellectual property rights of  the other Party.  EachParty shall retain the right to grant non-exclusive licenses to anyintellectual property right in the Developed Materials without any payment oraccounting to the other Party.

 

(ii)                                  CostSharing of Developed Materials. Each Party agrees to pay one-half (1/2) the costs associated withobtaining and perfecting any intellectual property rights in the DevelopedMaterials.  If, within ninety (90) daysof receiving notice from the other Party of payments made by the other Partyassociated with obtaining and perfecting intellectual property rights in thesubject Developed Materials in a particular jurisdiction, a Party subsequentlyfails to provide its share of the costs, it will promptly assign, transfer andconvey to the other Party any and all intellectual property rights in thesubject Developed Materials, and such assignment of rights shall be the payingParty’s sole and exclusive remedy for the assigning Party’s exercise of itsoption not to pay one-half (1⁄2) of the costs of obtaining or perfecting any suchrights in the Developed Materials.  Theassigning Party shall deliver to the other Party, upon request therefor, suchdocumentation and assignments of interest as may be necessary to evidence itsownership and enforce its interests in the assigned rights.  In any event, both Parties agree, at theirown

 

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expense, to cooperate fully with the other Party in obtaining andperfecting intellectual property rights in the Developed Materials, or inassisting in such efforts.

 

(iii)                               EmbeddedMaterials.  To the extent thatAbbott Owned Materials or Hospira Owned Materials are embedded in any DevelopedMaterials by the owner of such Materials, the owner of such Materials shall notbe deemed to have assigned its intellectual property rights in such ownedMaterials to the other Party, but subject to the terms and restrictions of anyConsent, the owner of such embedded Materials hereby grants to the other Partyand its Subsidiaries a worldwide, perpetual, irrevocable, non-exclusive, fullypaid-up license, with the right to grant sublicenses, to use, execute,reproduce, display, perform, modify, enhance, distribute and create DerivativeWorks of such embedded Materials for the benefit and use of the other Party andits Subsidiaries for so long as such Materials remain embedded in suchDeveloped Materials.  Notwithstandingthe foregoing, neither Party shall embed any Abbott Owned Materials or HospiraOwned Materials into Developed Materials without the express written agreementof both Parties to do so, as set forth in the applicable Work Schedule.  In addition, should either Party incorporateinto Developed Materials any intellectual property subject to Third Partypatent, copyright or license rights, any ownership or license rights grantedherein with respect to such Materials shall be limited by and subject to anysuch patents, copyrights or license rights; provided that, prior toincorporating any such intellectual property in any Materials, the Partyincorporating such intellectual property in the Materials has disclosed thisfact and obtained the prior written approval of the other Party and hasobtained any Consents.

 

(iv)                              SourceCode and Documentation.  If eitherParty requests that the source code for particular Materials be placed inescrow for the benefit of the requesting Party, then the Parties shallcooperate in good faith to establish such source code escrow arrangements onterms and conditions that shall be reasonably acceptable to both Parties.

 

(c)                                  GENERALRIGHTS AND OBLIGATIONS REGARDING MATERIALS.

 

(i)                                     CopyrightLegends.** **Each Party agrees to reproduce copyright legends which appearon any portion of the Materials which may be owned by the other Party or ThirdParties.

 

(ii)                                  NoImplied Licenses.  Except asexpressly specified in this Agreement, nothing in this Agreement shall bedeemed to grant to one Party, by implication, estoppel or otherwise, licenserights, ownership rights or any other intellectual property rights in anyMaterials owned by the other Party or any Subsidiary of the other Party.

 

(iii)                               Residuals.  Nothing in this Agreement shall restrict anyemployee or representative of a Party from using general ideas, concepts orknow-how relating to the Services or Materials that are retained solely in theunaided memory of such employee or representative after performing theobligations of a Party under this Agreement, except to the extent that such useinfringes upon any patent, copyright or other intellectual property right of aParty or its Subsidiaries; provided, however, that this Section shall notbe deemed to limit either Party’s obligations under this Agreement with respectto the disclosure or use of confidential Information or Materials of the otherParty.  An individual’s memory isunaided if the individual

 

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has not intentionally memorized the confidential Information or subjectMaterials for the purpose of retaining and subsequently using or disclosing it.

 

(iv)                              RequiredConsents.** **Subject to Section 2(j) above**,**each Party shall, at its own expense, usecommercially reasonable efforts to obtain all Consents necessary in connectionwith (i) in the case of Abbott, all Abbott Owned Materials, and (ii) in thecase of Hospira, all Hospira Owned Materials. Each of the Parties will reasonably cooperate with the other inobtaining such Consents.

 

Section 4.                                            **BILLING; TAXES.**

 

(a)                                  PROCEDURE.  Each Work Schedule shall set forth thetypes of, and where possible, the amount of, Charges that each Party shall befinancially responsible for in connection with the Services and the Materialsto be developed, procured or provided pursuant to a Work Schedule.  Where Charges are to be paid to a ThirdParty for Services or Materials under a Work Schedule, the Party listed as theresponsible Party under the Work Schedule shall pay such Charges directlyto the Third Party.  Where Charges areto be paid to the other Party, the Party who is entitled to reimbursement forServices or other Charges pursuant to a Work Schedule shall issue aninvoice detailing such charges to the other Party.  Amounts payable pursuant to the terms of this Agreement shall bepaid to the invoicing Party on a monthly basis, which amounts shall be duewithin thirty (30) days after the date of invoice.  All amounts due and payable hereunder shall be invoiced and paidin U.S. dollars.

 

(b)                                 LATEPAYMENTS.  Charges not paid when dueshall bear interest at a rate per annum equal to the Prime Rate plus twopercent (2%).

 

(c)                                  TAXES.  The Party who is primarily responsible forpayment for Charges under a particular Work Schedule shall pay any and allTaxes incurred in connection with the Services under that Work Schedule,including all sales, use, value-added and similar Taxes, but excluding Taxesbased on the other Party’s net income. Each Party shall be responsible for all sales, service, value-added,lease, use, personal property, excise, consumption, and other taxes and duties,including VAT, payable by such Party on any goods or services used or consumedby such Party in providing Services where the tax is imposed on such Party’sacquisition or use of such goods or services.

 

(d)                                 NOSET-OFF.  The obligation to pay Chargesor to make any other required payments under this Agreement shall not besubject to any right of offset, set-off, deduction or counterclaim, howeverarising.

 

Section 5.                                            **TERM; TERMINATION OF WORK SCHEDULES; TRANSFERASSISTANCE.**

 

(a)                                  TERM.  This Agreement will expire two (2) yearsafter the Effective Date (the “Expiration Date”).  In the event that, despite commercially reasonable efforts byboth Parties, there are uncompleted Work Orders related to quality controlsystems and other systems subject to regulatory review at the Expiration Date,the Party receiving the Services may elect to extend the term of this Agreementwith respect to those Work Orders to the extent necessary to complete thoseWork Orders as long as that Party continues to use commercially reasonable

 

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efforts to complete those Work Orders. In no event, however, shall any such extension exceed an additional two(2) years.  No later than three (3)months prior to the Expiration Date, the Parties shall meet and confer todiscuss the status of all uncompleted Work Schedules and, where feasible,develop a plan to complete such Work Schedule on or before the ExpirationDate.

 

(b)                                 TERMINATIONOF WORK SCHEDULES.

 

(i)                                     Terminationfor Convenience.  Upon receipt bythe other Party of at least thirty (30) days prior written notice, either Partymay terminate a Work Schedule without the consent of the other Partysolely for the purpose of transferring the control and responsibility for theServices under such Work Schedule to the terminating Party; provided, that(A) the terminating Party shall be solely responsible for completing such WorkSchedule during the term of this Agreement, and (B) upon receipt of suchnotice, the terminated Party shall be released from all responsibility inconnection with the terminated Work Schedule, except as provided in Section 5(b)(ii).

 

(ii)                                  TransferAssistance.  Upon receipt of anotice to terminate a Work Schedule pursuant to Section 5(b)(i),each Party shall provide to the other Party such assistance as is reasonablynecessary to permit the orderly transfer of the Services to be performed undersuch Work Schedule to the terminating Party, including providingreasonable access to any facilities, systems, equipment and/or software beingused by the other Party to provide the Services under the terminated WorkSchedule; provided, that the terminating Party shall comply with the otherParty’s security and confidentiality requirements in connection with suchaccess.

 

Section 6.                                            **CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS.**

 

(a)                                  CONFIDENTIALITYOBLIGATIONS.  Subject to Section 6(c),Abbott, on behalf of itself and each Abbott Subsidiary, and Hospira, on behalfof itself and each Hospira Subsidiary, agrees to hold, and to cause itsrespective directors, officers, employees, agents, accountants, counsel andother advisors and representatives to hold, in strict confidence, with at leastthe same degree of care that applies to Abbott’s confidential and proprietaryinformation pursuant to policies in effect as of the Effective Date, allInformation and Materials concerning the other (or its business) and theother’s Subsidiaries (or their respective businesses) that is either in itspossession (including Information and Materials in its possession prior to theEffective Date) or furnished by the other or the other’s Subsidiaries or theirrespective directors, officers, employees, agents, accountants, counsel andother advisors and representatives at any time pursuant to this Agreement, andshall not use any such Information or Materials other than for such purposes asmay be expressly permitted hereunder, except, in each case, to the extent thatsuch Information or Materials has been (i) in the public domain through nofault of such Party or its Subsidiaries or any of their respective directors,officers, employees, agents, accountants, counsel and other advisors andrepresentatives; (ii) later lawfully acquired from other sources by such Party(or any of its Subsidiaries) which sources are not themselves bound by aconfidentiality obligation; or (iii) independently generated without referenceto any proprietary or confidential Information or Materials of the other Party.

 

(b)                                 NORELEASE, RETURN OR DESTRUCTION.  EachParty agrees not to release or disclose, or permit to be released or disclosed,any such Information or Materials to any other

 

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Person, except its directors, officers, employees, agents, accountants,counsel, lenders, investors and other advisors and representatives who need toknow such Information or Materials, and except in compliance with Section 6(c).  Without limiting the foregoing, when anyInformation or Materials furnished by the other Party after the Effective Datepursuant to this Agreement is no longer needed for the purposes contemplated bythis Agreement, each Party shall, at such Party’s option, promptly afterreceiving a written request from the other Party either return to the otherParty all such Information and Materials in a tangible form (including allcopies thereof and all notes, extracts or summaries based thereon) or certifyto the other Party that it has destroyed such Information and Materials (andsuch copies thereof and such notes, extracts or summaries based thereon).

 

(c)                                  PROTECTIVEARRANGEMENTS.  In the event that eitherParty or any of its Subsidiaries either determines on the advice of its counselthat it is required to disclose any Information or Materials pursuant toapplicable law or the rules or regulations of any Governmental Authority orreceives any demand under lawful process or from any Governmental Authority todisclose or provide Information or Materials of any other Party that is subjectto the confidentiality provisions hereof, such Party shall notify the otherParty prior to disclosing or providing such Information and Materials and shallcooperate at the expense of the requesting Party in seeking any reasonableprotective arrangements requested by such other Party.  Subject to the foregoing, the Party thatreceived such request, or its Subsidiaries, may thereafter disclose or provideInformation and Materials to the extent required by such law (as so advised bycounsel) or by lawful process or such Governmental Authority.

 

Section 7.                                            **MISCELLANEOUS.**

 

(a)                                  MUTUALCOOPERATION.  The Parties and theirrespective Subsidiaries shall cooperate with each other in connection with theperformance of the Services hereunder and the completion of the SeparationProjects, including producing on a timely basis all Information and Materialsthat is reasonably requested with respect to the performance of Services and thecompletion of the Separation Projects, by the end of the term of thisAgreement; provided, however, that such cooperation shall not unreasonablydisrupt the normal operations of the Parties and their respective Subsidiaries.

 

(b)                                 LIMITATIONSON LIABILITY.

 

(i)                                     FOREACH TWELVE (12) MONTH PERIOD DURING WHICH THIS AGREEMENT IS IN EFFECT, THEFIRST SUCH PERIOD COMMENCING ON THE EFFECTIVE DATE AND THE SECOND (AND ANYSUBSEQUENT PERIODS) COMMENCING ON EACH ANNUAL ANNIVERSARY THEREOF, THE MAXIMUMLIABILITY OF EACH PARTY AND ITS SUBSIDIARIES TO, AND THE SOLE REMEDY OF, EACHPARTY AND ANY OF ITS SUBSIDIARIES WITH RESPECT TO ANY AND ALL CLAIMS ARISINGUNDER OR IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE THEORY UPON WHICHTHE LIABILITY IS PREMISED, SHALL NOT EXCEED THE PROFITS OF THE PARTY PROVIDINGTHE SERVICES HEREUNDER, WHICH SHALL BE DEEMED TO BE EQUAL TO THE AMOUNT OF THEMARK-UP RECEIVED BY THE PARTY PROVIDING THE SERVICES DURING SUCH

 

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TWELVE (12) MONTH PERIOD, AS SUCH AMOUNT IS SPECIFIED IN SCHEDULE DAND AS MAY BE ADJUSTED PURSUANT TO THE TERMS OF SCHEDULE D.

 

(ii)                                  INNO EVENT SHALL EITHER PARTY, ITS SUBSIDIARIES OR ITS DIRECTORS, OFFICERS,EMPLOYEES OR AGENTS BE LIABLE TO THE OTHER PARTY FOR INDIRECT, EXEMPLARY,CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES IN CONNECTION WITH THEPERFORMANCE OF THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THEPOSSIBILITY OF SUCH DAMAGES, AND EACH PARTY HEREBY WAIVES ON BEHALF OF ITSELFAND ITS SUBSIDIARIES ANY CLAIM FOR SUCH DAMAGES, INCLUDING ANY CLAIM FORPROPERTY DAMAGE OR LOST PROFITS, WHETHER ARISING IN CONTRACT, TORT OROTHERWISE.

 

(iii)                               Theforegoing limitations on liability in this Section 7(b) shall notapply to:  (i) either Party’s liabilityfor breaches of confidentiality under Section 6 (Confidentiality),and (ii) either Party’s obligations under Section 7(c) (Third PartyClaims).

 

(c)                                  THIRDPARTY CLAIMS AND INFRINGEMENT.

 

(i)                                     Exceptfor Third Party Claims addressed in Section 7(c)(iv) below, Abbottshall indemnify, defend and hold harmless Hospira and its Subsidiaries, andeach of their respective directors, officers and employees, and each of thesuccessors and assigns of any of the foregoing (collectively, the “HospiraIndemnitees”), from and against any and all Third Party claims relating to,arising out of or resulting from Hospira, its Subsidiaries and/or any of theirrespective officers, directors, employees, agents or contractors, furnishing orfailing to furnish the Services or Hospira Owned Materials required to beprovided by Hospira under this Agreement, other than Third Party claims arisingout of gross negligence or willful misconduct of Hospira, its Subsidiariesand/or any of their respective directors, officers, employees, agents or contractors.

 

(ii)                                  Exceptfor Third Party Claims addressed in Section 7(c)(iii) below,Hospira shall indemnify, defend and hold harmless Abbott and its Subsidiaries,and each of their respective directors, officers and employees, and each of thesuccessors and assigns, of any of the foregoing (collectively, the “AbbottIndemnitees”), from and against any and all Third Party claims relating to,arising out of or resulting from Abbott, its Subsidiaries and/or any of theirrespective officers, directors, employees, agents or contractors, furnishing orfailing to furnish the Services or Abbott Owned Materials required to beprovided by Abbott under this Agreement, other than Third Party claims arisingout of gross negligence or willful misconduct of Abbott, its Subsidiariesand/or any of their respective directors, officers, employees, agents orcontractors.

 

(iii)                               Forany Abbott Owned Materials used or provided by Abbott or any Abbott Subsidiaryin connection with Abbott’s or any Abbott Subsidiary’s provision of Serviceshereunder, but excluding any Materials provided or licensed under any HospiraIT Agreement or any Shared IT Agreement, Abbott shall indemnify, defend andhold harmless the Hospira Indemnitees from and against any and all Third Partyclaims alleging that such Materials infringe upon the intellectual propertyrights of any such Third Party.

 

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(iv)                              Forany Hospira Owned Materials used or provided by Hospira or any HospiraSubsidiary in connection with Hospira’s or any Hospira Subsidiary’s provisionof Services hereunder, but excluding any Materials provided or licensed underany Shared IT Agreement, Hospira shall indemnify, defend and hold harmless theAbbott Indemnitees from and against any and all Third Party claims allegingthat such Materials infringe upon the intellectual property rights of any suchThird Party.

 

(v)                                 Inconnection with any Third Party Claim alleging infringement regarding anyMaterials, the indemnifying Party shall have the right in connection with suchaffected Materials to (i) modify or replace the affected Materials so that theyare not infringing; (ii) procure a license for the indemnified Party in theaffected Materials such that use of the affected Materials may continue in therequired manner; or (iii) at the indemnifying Party’s sole option, theindemnifying Party may cease use of the affected Materials, and, subject to anyrights and obligations set forth in Section 2(j), thereafter theParties shall cooperate in good faith and use commercially reasonable effortsto arrive at an alternative solution or workaround that eliminates the need forthe affected Materials.

 

(vi)                              Theindemnification rights and obligations set forth in Sections 7(c)(iii), 7(c)(iv)and 7(c)(v) shall be the sole and exclusive remedy for the indemnifiedParty with respect to claims of infringement of intellectual property rights.

 

(vii)                           Noticeof Third Party Claims.  If at orfollowing the date of this Agreement an Indemnitee receives notice or otherwiselearns of the assertion or commencement by a Person (including any GovernmentalAuthority) other than Abbott or Hospira and their respective Subsidiaries ofany proceeding with respect to which an indemnifying Party may be obligated toprovide indemnification to such Indemnitee pursuant to Section 7(c)(collectively, a “Third Party Claim”), such Indemnitee shall give suchindemnifying Party written notice thereof within twenty (20) days afterbecoming aware of such Third Party Claim. Any such notice must describe the Third Party Claim in reasonabledetail.  Notwithstanding the foregoing,the failure of any Indemnitee or other Person to give notice as provided inthis Section 7(c)(vii) shall not relieve the related indemnifyingParty of its obligations under Section 7(c), except to the extentthat such indemnifying Party is actually prejudiced by such failure to givenotice.

 

(d)                                 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 problems or unavailability of parts,or, in the case of computer systems, any failure in electrical or airconditioning equipment, viruses or similar disabling devices, or breaches ofnetwork or system security.  The Partyclaiming an event of force majeure shall promptly notify the other Party inwriting, and provide full particulars of the cause or event and the date offirst occurrence thereof, as soon as possible after the event and also keep theother Party informed of any further developments.  The Party so affected shall use its commercially reasonableefforts to remove the cause of non-performance, and both the Parties shallresume performance hereunder with the utmost dispatch when such cause isremoved unless this Agreement has previously been terminated under Section 5hereof.

 

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(e)                                  RELATIONSHIPGOVERNANCE.  Each of the Parties shallappoint a separation services project executive or their designee from time totime (each a “Project Executive”) who has responsibility for overseeing thecompletion of the Services, respectively, and who shall have the authority toact on behalf of the Parties, respectively, for all day-to-day matterspertaining to this Agreement.  TheseProject Executives shall meet no less frequently than monthly to review status,consider changes to the Separation Project Plan, review and sign WorkSchedules, discuss, and if possible, resolve disputes, and provide direction tothe team members performing the Services. Additionally, each Party will have the option, but will not beobligated, to designate additional representatives who will be authorized tomake certain decisions (e.g., regarding emergencies) if the Project Executiveis not available.  Each Party shallcooperate with the other by, among other things, making available, asreasonably requested by the other Party, management decisions, Information,Materials, approvals and acceptances so that each Party may accomplish itsobligations and responsibilities hereunder. All transfers of Developed Materials and communications regarding thescope of work shall be accomplished through the Project Executives.  In addition, the Project Executives shall arrangeand chair any progress review meetings, be responsible for ensuring that eachParty’s responsibilities have been met on a timely basis and shall control allchanges to the applicable Work Schedule(s). Either Party may change the persondesignated to be its Project Executives for any Work Schedule at any timeupon written notice to the other Party’s Project Executive.  As of the Effective Date, except asotherwise designated on an applicable Work Schedule, the Parties havedesignated the following positions as the Project Executives for purposes ofthis Agreement:

 

Abbott: Vice President, Information Technology

 

Hospira: Vice President, Information Technology

 

(f)                                    ACCEPTANCE.  Acceptance shall occur when the Services andMaterials described in the Work Schedule meet the agreed upon acceptancecriteria as described in the Work Schedule. If the Services and Materials do not meet the acceptance criteria as setforth in the Work Schedule when they are ready for acceptance evaluation,a Party may give the other Party detailed written notification of thedeficiency or non-conformance within thirty (30) business days of delivery ofthe Services or Materials.  Theproviding Party then shall either correct the deficiency or non-conformance orprovide a plan acceptable for correcting the deficiency ornon-conformance.  If the deficiency ornon-conformance is not corrected or if an acceptable plan for correcting suchdeficiency or non-conformance is not established during such period, then theaggrieved Party may initiate an ADR proceeding pursuant to Section 7(k).

 

(g)                                 AUDITASSISTANCE.

 

(i)                                     Generally.  Each of the Parties and their respectiveSubsidiaries are or may be subject to regulation and audit by governmentalbodies, standards organizations, other regulatory authorities, customers orother parties to contracts with such parties under applicable law and contractprovisions.  If a governmental body,standards organization, other regulatory authority or customer or other Partyto a contract with a Party or a Subsidiary exercises its right to examine oraudit such Party’s or its Subsidiary’s books, records, documents or accountingpractices and procedures pursuant to such applicable law, rules, regulations,standards or contract provisions, the other Party shall provide all assistancerequested by the Party that is subject to the

 

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audit in responding to such audits or requests for information, to theextent that such assistance or information is within the reasonable control ofthe cooperating Party.  The Parties mayexecute a Work Schedule if mutually desired to document the work effortand Charges that may be required in connection with an audit.

 

(ii)                                  Controls.  After the Effective Date and continuing nolonger than required in accordance with the maintaining Party’s applicabledocument retention policies, subject to the provisions of the TSA, each of theParties will maintain in effect, at its own cost and expense, adequate controlsto the extent reasonably necessary to enable the other Party to satisfy itsreporting, accounting, audit and other obligations.

 

(h)                                 INDEPENDENTCONTRACTORS.  The Parties eachacknowledge that they are separate entities, each of which has entered intothis Agreement for independent business reasons.  The relationships of the Parties hereunder are those ofindependent contractors and nothing contained herein shall be deemed to createa joint venture, partnership or any other relationship.

 

(i)                                     NOTHIRD PARTY BENEFICIARIES.  Except asexpressly provided in Section 7(c), the provisions of thisAgreement are solely for the benefit of the Parties and their Subsidiaries andare not intended to confer upon any Person except the Parties any rights orremedies hereunder.  Except for theHospira Indemnitees and the Abbott Indemnitees, there are no Third Partybeneficiaries of this Agreement and this Agreement shall not provide any ThirdParty with any remedy, claim, liability, reimbursement, claim of action orother right in excess of those existing without reference to this Agreement.

 

(j)                                     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.

 

(k)                                  ADRPROCEDURES; EQUITABLE RELIEF.  TheParties acknowledge that from time to time during the term of this Agreement adispute may arise relating to either Party’s rights or obligations under thisAgreement.  The Parties agree that anysuch controversy, dispute or claim (whether arising in contract, tort orotherwise) arising out of or relating in any way to this Agreement (includingthe interpretation or validity of this Agreement), shall be resolved by theAlternative Dispute Resolution (“ADR”) provisions set forth in this Section 7(k)and Schedule F, the result of which shall be binding upon theParties.

 

(i)                                     Notice.  To initiate the ADR process, a Party firstmust send written notice to the other Party in accordance with the provisionsof Section 7(q) describing the dispute and requesting attemptedresolution by good faith negotiations. Good faith negotiations shall be conducted in two stages, with thesecond stage being triggered only if first stage negotiations do not result ina resolution of the dispute.

 

(ii)                                  FirstStage Negotiations.  Followingreceipt of the written notice described in the preceding paragraph, therespective CEOs or Presidents of the Parties shall designate a group of no morethan three individuals, exclusive of counsel, to participate in good faith

 

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negotiations aimed at resolving the dispute.  Within 21 days from receipt of the written notice, the respectivegroups shall meet in-person to conduct good faith negotiations.  By mutual written consent, the Parties mayextend the 21-day period for conducting first stage negotiations.  If the Parties fail to meet within the21-day period or the Parties fail to resolve the dispute during such period,and the period is not extended by mutual written agreement, the Parties shallengage in second stage negotiations as described in the next paragraph.

 

(iii)                               SecondStage Negotiations.  Following theexpiration of the 21-day period described in the preceding paragraph, or anyextension thereof mutually agreed to in writing, if the Parties are unable toresolve the dispute, they shall engage in second stage negotiations.  Second stage negotiations shall be conductedbetween the respective CEOs or Presidents (or their designees) of the Partieswithin 14 days following the conclusion of first stage negotiations.  If the dispute has not been resolved withinthe 14 days provided for second stage negotiations, either Party may initiatean ADR proceeding as provided in Schedule F.  The Parties shall have the right to berepresented by counsel in such a proceeding.

 

Notwithstanding the foregoing, the Parties acknowledge that the breachof Section 3 (Ownership and License Rights in Materials), Section 6(Confidentiality), and/or Section 2(i) (Security Procedures) by oneParty may give rise to irreparable injury to the other Party which is notadequately compensable in damages or at law. Accordingly, the Parties agree that in such event, the non-breachingparty may seek equitable relief to enforce or prevent violation of such Party’srespective rights and/or obligations under those Sections.  Unless otherwise agreed in writing, theParties shall continue to provide Services and honor all other commitmentsunder this Agreement during the course of dispute resolution pursuant to theprovisions of this Section 7(k) and Schedule F withrespect to all matters subject to such dispute, controversy or claim; provided,however, that this obligation shall only exist during the term of thisAgreement.

 

(l)                                     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 Schedules hereto) and not to any particularprovision of this Agreement.  “Section”and “Schedule” references are to the Sections and Schedules to this Agreementunless otherwise specified.  Unlessotherwise stated, all references to any agreement shall be deemed to includethe exhibits, schedules and annexes to such agreement.  The word “including” and words of similarimport when used in this Agreement shall mean “including, without limitation,”unless the context otherwise requires or unless otherwise specified.  The word “or” shall not be exclusive.  Unless otherwise specified in a particularcase, the word “days” refers to calendar days. References herein to this Agreement or any other agreements contemplatedherein shall be deemed to refer to this Agreement or such other agreement as of11:59 pm Eastern Daylight Time on the Effective Date and as such time may beamended thereafter, unless otherwise specified.

 

(m)                               SURVIVAL.  Section 1 (Definitions), Section 3(Billing; Taxes), Section 5 (Confidentiality), Sections 2(b),2(c)(iii), 2(d), 2(e) (with respect to those portions of Schedule Fthat survive termination), 7(b) (Liability), 7(c) (Third PartyClaims), 7(g) (Audit Assistance), and

 

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7(i) (No Third Party Beneficiaries) *through*7(t) (Severability) shallsurvive any expiration or termination of this Agreement.

 

(n)                                 ASSIGNMENT.  This Agreement shall be binding upon andinure to the benefit of the Parties hereto and their respective successors andpermitted assigns; PROVIDED, HOWEVER, that neither Party may assign its rightsor delegate its obligations under this Agreement without the express priorwritten consent of the other Party hereto. Notwithstanding the foregoing, this Agreement shall be assignable byeither Party in whole with the prior written consent of the other Party (whichconsent shall not be unreasonably withheld, delayed or conditioned) inconnection with: (i) a merger or consolidation of such Party if (a) such Partyis not the surviving entity, or (b) such Party’s shareholders constitute lessthan 70% of the surviving shareholders; (ii) the sale of all or substantiallyall of the assets of such Party; or (iii) the acquisition by a Third Party ofat least 30% of the combined voting power of the then-outstanding securities ofsuch Party entitled to vote generally in the election of directors (each suchoccurrence, a “Change of Control Event”), in each case so long as theresulting, surviving or transferee Person assumes all the obligations of theassignor hereunder by operation of law or pursuant to an agreement in form andsubstance reasonably satisfactory to the other Party.  It shall not be deemed to be unreasonable for a Party to withholdconsent to assignment in connection with a Change of Control Event on the basisthat the proposed assignee is a competitor of such Party.  In the event a Party effects a Change ofControl Event without the other Party’s prior written consent to assign thisAgreement as set forth above, the latter Party may terminate this Agreement, inits sole discretion, with effect immediately upon the occurrence of such Changeof Control Event.

 

(o)                                 AMENDMENT.  No amendment to this Agreement shall beeffective unless it is in writing and signed by a duly authorizedrepresentative of each Party or, in the case of an amendment (including anearly termination) of a Work Schedule, signed by the contact listed on theapplicable Work Schedule, or by such contact’s senior management.

 

(p)                                 NOWAIVERS.  No failure or delay of anyParty in exercising any power or right hereunder shall operate as a waiverthereof, nor shall any single or partial exercise of any such right or power,or any abandonment or discontinuance of steps to enforce such a right or power,preclude any other or further exercise thereof or the exercise of any otherright or power.  The rights and remediesof the Parties and their Subsidiaries hereunder are cumulative and are notexclusive of any rights or remedies which they would otherwise have hereunder.  No provision of this Agreement shall bedeemed waived unless such waiver is in writing and signed by the authorizedrepresentative of the Party against whom it is sought to be enforced.

 

(q)                                 NOTICES.  All notices or other communications underthis Agreement must be in writing and shall be deemed to be duly given (i) whendelivered in person, (ii) 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 (iii) two days after deposit with a private expressmail courier, in any such case addressed as follows:

 

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| To Abbott:      |   | Abbott Laboratories  200 Abbott Park Road  Building J46, Department 334  Abbott Park, Illinois 60064-6020  Attn: Vice President, Information Technology  Facsimile Number: (847) 935-3253 |
|-----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |   |                                                                                                                                                                                      |
| with a copy to: |   | Abbott Laboratories  100 Abbott Park Road  Building AP6D, Department 364  Abbott Park, Illinois 60064-6020  Attn: General Counsel  Facsimile Number: (847) 938-1561                       |
|            |   |                                                                                                                                                                                      |
| To Hospira:     |   | Hospira, Inc.  Dept. 98F  275 North Field Drive  Lake Forest, Illinois 60045-5045  Attn:  Vice President, Information  Technology  Facsimile Number: (847) 937-2927                  |
|            |   |                                                                                                                                                                                      |
| with a copy to: |   | Hospira, Inc.  Legal Department  Dept. NLEG  275 North Field Drive  Lake Forest, Illinois 60045-5045  Attn: General Counsel  Facsimile Number: (224) 212-3312                             |

 

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

 

(r)                                    COUNTERPARTS.  This Agreement may be executed in one ormore counterparts (including by means of faxed signature pages), all of whichshall be considered one and the same agreement, and shall become effective whenone or more such counterparts have been signed by each of the Parties anddelivered to the other Party.

 

(s)                                  ENTIREAGREEMENT.  This Agreement and theSchedules hereto contain the entire agreement and understanding between theParties with respect to the subject matter hereof and supersede all prioragreements and understandings, whether written or oral, relating to suchsubject matter; provided, that except as otherwise expressly agreed by theParties.

 

(t)                                    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 been heldinvalid or unenforceable, shall remain in full force and effect and shall in noway be affected, impaired or invalidated thereby, so long as the economic orlegal substance of the transactions contemplated hereby or thereby, as the casemay 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.

 

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**IN WITNESS WHEREOF**,the Parties have executed this Agreement as of the date first written above.

 
| **ABBOTT LABORATORIES** |                                                                         |
|-------------------------|------------------------------------------------------------------------------|
|                    |                                                                         |   |
| By:                     |                                                                         |   |   |
|                    | Name:  Thomas C. Freyman                                                |   |
|                    | Title:   Executive Vice President, Finance  and Chief Financial Officer |   |
|                    |                                                                         |   |
|                    |                                                                         |   |
|                    |                                                                         |   |
| **HOSPIRA, INC.**       |                                                                         |
|                    |                                                                         |   |
| By:                     |                                                                         |   |   |
|                    | Name:  John Arnott                                                      |   |
|                    | Title: Senior Vice President, Global Commercial Operations                   |   |
|                         |                                                                              |  |  |  |

 

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