**Exhibit 10.1**

 

**U.S. TRANSITION SERVICES AGREEMENT**

 

THIS U.S.TRANSITION SERVICES AGREEMENT, dated as of April 16, 2004 and effective asof May 1, 2004,  is by and betweenABBOTT LABORATORIES, an Illinois corporation (“Abbott”), and HOSPIRA, INC., aDelaware corporation (“Hospira”).

 

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

 

WHEREAS, theboard of directors of Abbott has determined that it is appropriate andadvisable to separate Abbott’s core hospital products business from its otherbusinesses;

 

WHEREAS, inorder to effectuate the foregoing, Abbott and Hospira have entered into aSeparation and Distribution Agreement dated as of April 12, 2004 (the“Separation and Distribution Agreement”), which provides, among other things,subject to the terms and conditions set forth therein, for the contribution toHospira of certain assets, the assumption by Hospira of certain liabilities andthe distribution of Hospira common stock to Abbott shareholders, and for theexecution and delivery of certain other agreements in order to facilitate and providefor the foregoing; and

 

WHEREAS, inorder to ensure an orderly transition under the Separation and DistributionAgreement it will be necessary for each of the Parties to provide to the otherthe Services described herein for a transitional period of up to two (2) years.

 

NOW,THEREFORE, in consideration of the mutual agreements, provisions and covenantscontained herein, and subject to and on the terms and conditions herein setforth, the Parties hereby agree as follows:

 

Section 1.                            DEFINITIONS.

 

For purposesof this Agreement,  the following termsshall have the following meanings:

 

“Abbott” hasthe meaning set forth in the Preamble.

 

“AbbottSubsidiary” means any Subsidiary of Abbott other than Hospira and any HospiraSubsidiary.

 

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

 

“BusinessEntity” means any corporation, general or limited partnership, trust,  joint venture, unincorporated organization,limited liability entity or other entity.

 

“Charges” hasthe meaning set forth in Section 2(d).

 

“DistributionDate” means the date on which Abbott distributes as a dividend to itsshareholders all of the outstanding shares of Hospira common stock as set forthin the Separation and Distribution Agreement.

 

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“EmploymentTax” means withholding, payroll, social security, workers compensation,unemployment, disability and any similar tax imposed by any Tax Authority, andany interest, penalties, additions to tax or additional amounts with respect tothe foregoing imposed on any taxpayer or consolidated, combined or unitarygroup of taxpayers.

 

“GovernmentalAuthority” means any supranational, international, national, federal, state, orlocal court, government, department, commission, board, bureau, agency,official or other regulatory, administrative or governmental authority,including the NYSE and any similar self-regulatory body under applicablesecurities laws or regulations.

 

“Hospira” hasthe meaning set forth in the Preamble.

 

“HospiraSubsidiary” means any Subsidiary of Hospira.

 

“Information”means information, whether or not patentable or copyrightable, in written,oral, electronic or other tangible or intangible forms, 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 or other software, marketing plans,customer names, communications by or to attorneys (including attorney-clientprivileged communications), memos and other materials prepared by attorneys orunder their direction (including attorney work product), and other technical,financial, employee or business information or data.

 

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

 

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

 

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

 

“Parties”means the parties to this Agreement.

 

“Prime Rate”means the rate which Citibank N.A. (or its successor or another major moneycenter commercial bank agreed to by the Parties) announces as its prime lendingrate, as in effect from time to time.

 

“Provider”means, with respect to any Service, the entity or entities identified on theapplicable Schedule as the “Service Provider.”

 

“Purchaser”means, with respect to any Service, the entity or entities identified on theapplicable Schedule as the “Service Purchaser.”

 

“Separationand Distribution Agreement” shall have the meaning set forth in the Recitals.

 

“ServicePeriod” means, with respect to any Service, the period commencing on theDistribution Date and ending on the earlier of (i) the date the Purchaserterminates the

 

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provision ofsuch Service pursuant to Section 4(b), or (ii) the termination date(measured as the number of months from the Distribution Date) specified withrespect to such Service on the Schedule applicable to such Service, unlessextended pursuant to Section 4(a).

 

“Services” hasthe meaning set forth in Section 2(b)(ii).

 

“Subsidiary”of any Party means another Business Entity that is directly or indirectlycontrolled by such Party.  As usedherein, “control” means the possession, directly or indirectly, of the power todirect or cause the direction of the management and policies of such BusinessEntity, whether through ownership of voting securities or other interests, bycontract or otherwise.  For theavoidance of doubt, TAP Pharmaceutical Products Inc., TAP Finance Inc. and TAPPharmaceuticals Inc. are not Subsidiaries of Abbott as that term is used inthis Agreement.

 

“Tax”means:  (i) any income, net income,gross income, gross receipts, profits, capital stock, franchise, property, advalorem, stamp, excise, severance, occupation, service, sales, use, license,lease, transfer, import, export, customs duties, value added, alternativeminimum, estimated or other similar tax (including any fee, assessment, or othercharge in the nature of or in lieu of any tax) imposed by any Tax Authority,and any interest, penalties, additions to tax or additional amounts withrespect to the foregoing imposed on any taxpayer or consolidated, combined orunitary group of taxpayers; and (ii) any Employment Tax.

 

“TaxAuthority” means, with respect to any Tax, the governmental entity or politicalsubdivision thereof that imposes such Tax, and the agency (if any) charged withthe collection of such Tax for such entity or subdivision.

 

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

 

Section 2.                            SERVICES.

 

(a)           INITIAL SERVICES.  Commencing on the Distribution Date, theParty designated as the Provider on the Schedules hereto agrees to provide, orwith respect to any service to be provided by a Subsidiary of such Party, tocause such Subsidiary to provide, to the Party designated as the Purchaser onthe Schedules hereto, or with respect to any service to be provided to a Subsidiaryof such Party, to such Subsidiary, the applicable services (the “InitialServices”) set forth on Schedule 1 through Schedule 179hereto.

 

(b)           OMITTED SERVICES;ADDITIONAL SERVICES.

 

(i)            If during the term ofthis Agreement, a Party identifies a service that the other Party previouslyprovided to such Party prior to the Distribution Date, but such service wasinadvertently omitted from the Services set forth on the Schedules hereto (suchservice an “Omitted Service”), then upon the prior written consent of the Partythat would be the Provider of such Omitted Service, which consent shall not beunreasonably withheld, such Omitted Service shall be added and considered aspart of the Services.  The Parties shallcooperate and act in good faith to create a Schedule for each OmittedService in the form attached hereto as Exhibit A.

 

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(ii)           From time to time afterthe Distribution Date, the Parties may identify additional services that arenot Omitted Services that one Party will provide to the other Party inaccordance with the terms of this Agreement (the “Additional Services” and,together with the Initial Services and any added Omitted Services, the“Services”).  The Parties shallcooperate and act in good faith to create a Schedule for each AdditionalService in the form attached hereto as Exhibit A.  Notwithstanding the foregoing, neither Partyshall have any obligation to agree to provide Additional Services.

 

(c)           PERFORMANCE OFSERVICES.

 

(i)            Each Provider shallperform and cause its Subsidiaries to perform all Services to be provided bysuch Provider in a manner which is substantially similar in nature, quality andtimeliness to the analogous services provided by the applicable Provider to theapplicable Purchaser prior to the Distribution Date.

 

(ii)           Each Provider shall,and shall cause its Subsidiaries to, perform its duties and responsibilitieshereunder in good faith based on its past practices.  Neither Provider nor any of its Subsidiaries shall be liable orheld accountable, in damages or otherwise, for any error of judgment or anymistake of fact or law or for anything that the Provider or any of itsSubsidiaries does or refrains from doing in good faith hereunder, except in thecase of its gross negligence or willful misconduct.

 

(iii)          Nothing in thisAgreement shall require a Provider to perform or cause to be performed anyService in a manner that would constitute a violation of applicable laws or theAbbott Code of Business Conduct.

 

(iv)          No Provider shall beobligated to perform or to cause to be performed any Service in a volume orquantity which exceeds the planned 2004 volumes or quantities of analogousservices to be performed for the applicable Purchaser without reference to thetransactions contemplated by the Separation and Distribution Agreement.  A Purchaser may request a higher volume orquantity of such historical volumes or quantities of a Service, which requestthe applicable Provider may accept or reject in its sole discretion.  If the Provider agrees to such a request,the Parties shall cooperate and act in good faith to make any modifications tothe applicable Schedule for such Service.

 

(v)           (1) Neither Providernor any of its Subsidiaries will be required to perform or to cause to be performedany of the Services for the benefit of any Third Party or any other Personother than the applicable Purchaser or its Subsidiaries, and (2) EXCEPT ASEXPRESSLY PROVIDED IN SECTION 2(c), EACH PARTY ACKNOWLEDGES ANDAGREES THAT ALL SERVICES AND PRODUCTS ARE PROVIDED ON AN “AS-IS” BASIS AND THATEACH PROVIDER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THESERVICES AND PRODUCTS, AND HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY OFMERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR ANYOTHER WARRANTY WHATSOEVER.

 

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(d)           CHARGES FORSERVICES.  The charges for the Servicesshall be determined in accordance with Exhibit B (the “Charges”).

 

(e)           CHANGES TOSERVICES.  Except as provided in Section 2(h)below, each Provider may make changes from time to time in the manner ofperforming the Services if such Provider is making similar changes inperforming analogous services for itself and if such Provider furnishes to theapplicable Purchaser substantially the same notice (in content and timing) assuch Provider shall furnish to its own organization respecting suchchanges.  No such change shall affectthe Charges for the applicable Service.

 

(f)            TRANSITIONAL NATURE OFSERVICES.  The Parties acknowledge thetransitional nature of the Services and agree to cooperate in good faith and touse commercially reasonable efforts to effectuate a smooth transition of theServices from the Provider to the Purchaser (or its designee).

 

(g)           COOPERATION.  In the event that (i) there isnonperformance of any Service as a result of an event described in Section 6(e),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 bywhich the applicable Purchaser may obtain, at the Purchaser’s sole cost, theServices so affected.

 

(h)           USE OF THIRD PARTIES TOPROVIDE THE SERVICES.  Each Provider mayperform its obligations through its Subsidiaries or, if such Provider isobtaining analogous services for itself from agents, subcontractors orindependent contractors, the Provider may perform its obligations hereunderthrough the use of agents, subcontractors or independent contractors, if suchProvider furnishes to the applicable Purchaser substantially the same notice(in content and timing) as such Provider shall furnish to its own organizationrespecting such use of Third Parties. If the Provider is not obtaining analogous services for itself fromThird Parties, the Provider may perform its obligations hereunder through theuse of agents, subcontractors or independent contractors only upon obtainingthe prior written consent of the Purchaser. Notwithstanding the foregoing, the Provider shall not be relieved of itsobligations under this Agreement by use of such Subsidiaries, agents,subcontractors or contractors. Delegation of performance of any Service by a Provider in accordancewith this Section 2(h) shall not affect the Charges for theapplicable Service.

 

Section 3.                            BILLING;TAXES.

 

(a)           PROCEDURE.  Charges for the Services shall be charged toand payable by the Purchaser.  Amountspayable pursuant to the terms of this Agreement shall be paid to the Provider,as directed by the Provider, 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)           LATE PAYMENTS.  Charges not paid when due shall bearinterest at a rate per annum equal to the Prime Rate plus two percent (2%).

 

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(c)           TAXES.  Each Purchaser shall pay any and all Taxesincurred in connection with the applicable Provider’s provision of theServices, including all sales, use, value-added, and similar Taxes, butexcluding Taxes based on such Provider’s net income.

 

(d)           NO SET-OFF.  A Purchaser’s obligation to make anyrequired payments under this Agreement shall not be subject to any unilateralright of offset, set-off, deduction or counterclaim, however arising.

 

Section 4.                            TERMAND TERMINATION.

 

(a)           TERM.  Unless otherwise terminated pursuant to Section 4(b),this Agreement will terminate with respect to any Service at the close ofbusiness on the last day of the Service Period for such Service.  Notwithstanding the foregoing, the Purchasermay elect to extend the Service Period for any Service by providing theProvider of such Service with written notice within the shorter of (i) onehundred eighty (180) days, or (ii) one-half of the original Service Period forsuch Service; provided, however, that no Service Period, including anyextension thereof, will continue for longer than two (2) years after theDistribution Date.  This Agreement willterminate two (2) years after the Distribution Date.

 

(b)           EARLY TERMINATION.  Each Purchaser shall have the right at anytime during the term of this Agreement to terminate its obligation to purchaseany individual Service, upon the giving of an advance written notice to theProvider of such Service within the shorter of (i) one hundred eighty (180)days, or (ii) one-half the original Service Period for such Service.

 

(c)           INFORMATIONTRANSMISSION.  On or prior to the lastday of each relevant Service Period, the Provider shall use commercially reasonableefforts and shall cause its Subsidiaries to use commercially reasonable effortsto support any transfer of Information concerning the relevant Services to theapplicable Purchaser.  If requested bythe Purchaser, the Provider shall deliver and shall cause its Subsidiaries todeliver to the applicable Purchaser, within such time periods as the Partiesmay reasonably agree, all Information received or computed for the benefit ofsuch Purchaser during the Service Period, in electronic and/or hard copy form;provided, however, that (i) the Provider shall not have any obligation toprovide or cause to provide Information in any non-standard format, and (ii)the Provider and its Subsidiaries shall be reimbursed for their reasonableout-of-pocket costs for providing Information in any format other than itsstandard format.

 

Section 5.                            CONFIDENTIALITY;PROTECTIVE ARRANGEMENTS.

 

(a)           ABBOTT AND HOSPIRAOBLIGATIONS.  Subject to Section 5(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 Distribution Date, allInformation concerning the other (or its business) and the other’s Subsidiaries(or their respective businesses) that is either in its possession (includingInformation in its possession prior to the Distribution Date) or

 

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furnished bythe other or the other’s Subsidiaries or their respective directors, officers,employees, agents, accountants, counsel and other advisors and representativesat any time pursuant to this Agreement, and shall not use any such Informationother than for such purposes as may be expressly permitted hereunder, except,in each case, to the extent that such Information has been (i) in the publicdomain through no fault of such Party or its Subsidiaries or any of theirrespective directors, officers, employees, agents, accountants, counsel andother advisors and representatives; (ii) later lawfully acquired from othersources by such Party (or any of its Subsidiaries), which sources are notthemselves bound by a confidentiality obligation; or (iii) independentlygenerated without reference to any proprietary or confidential Information ofthe other Party.

 

(b)           NO RELEASE; RETURN ORDESTRUCTION.  Each Party agrees not torelease or disclose, or permit to be released or disclosed, any Informationaddressed in Section 5(a) to any other Person, except itsdirectors, officers, employees, agents, accountants, counsel and other advisorsand representatives who need to know such Information, and except in compliancewith Section 5(c) and Schedule 1.01(n) to theSeparation and Distribution Agreement. Without limiting the foregoing, when any Information furnished by theother Party after the Distribution Date pursuant to this Agreement is no longerneeded for the purposes contemplated by this Agreement, each Party shall, atsuch Party’s option, promptly after receiving a written request from the otherParty either return to the other Party all such Information in a tangible form(including all copies thereof and all notes, extracts or summaries basedthereon) or certify to the other Party that it has destroyed such Information(and such 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 pursuant to applicable law orthe rules or regulations of any Governmental Authority or receives any demandunder lawful process or from any Governmental Authority to disclose or provideInformation of any other Party that is subject to the confidentialityprovisions hereof, such Party shall notify the other Party prior to disclosingor providing such Information and shall cooperate at the expense of therequesting Party in seeking any reasonable protective arrangements requested bysuch other Party.  Subject to theforegoing, the Party that received such request, or its Subsidiaries, maythereafter disclose or provide Information to the extent required by such law(as so advised by counsel) or by lawful process or such Governmental Authority.

 

Section 6.                            MISCELLANEOUS.

 

(a)           MUTUAL COOPERATION.  The Parties and their respectiveSubsidiaries shall cooperate with each other in connection with the performanceof the Services hereunder, including producing on a timely basis allInformation that is reasonably requested with respect to the performance ofServices and the transition of Services at 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.

 

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(b)           LIMITATIONS ONLIABILITY.

 

(i)            FOR EACH TWELVE (12)MONTH PERIOD DURING WHICH THIS AGREEMENT IS IN EFFECT, THE FIRST SUCH PERIODCOMMENCING ON THE DISTRIBUTION DATE AND THE SECOND SUCH PERIOD COMMENCING ONTHE ONE YEAR ANNIVERSARY THEREOF, THE MAXIMUM LIABILITY OF THE PROVIDER AND ITSSUBSIDIARIES TO, AND THE SOLE REMEDY OF, THE PURCHASER AND ANY OF ITSSUBSIDIARIES WITH RESPECT TO ANY AND ALL CLAIMS ARISING UNDER OR IN CONNECTIONWITH THIS AGREEMENT, REGARDLESS OF THE THEORY UPON WHICH THE LIABILITY ISPREMISED, SHALL NOT EXCEED THE PROVIDER’S PROFITS FOR PERFORMING SERVICESHEREUNDER, WHICH SHALL BE DEEMED TO BE EQUAL TO THE AMOUNT OF THE MARK-UPRECEIVED BY THE PROVIDER DURING SUCH TWELVE (12) MONTH PERIOD AS SET FORTH ON EXHIBITB AND AS MAY BE ADJUSTED PURSUANT TO THE TERMS OF EXHIBIT B.

 

(ii)           IN NO EVENT SHALLEITHER PARTY, ITS SUBSIDIARIES OR ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTSBE LIABLE TO THE OTHER PARTY FOR INDIRECT, EXEMPLARY, INCIDENTAL, CONSEQUENTIALOR PUNITIVE DAMAGES IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT, EVENIF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND EACHPARTY HEREBY WAIVES ON BEHALF OF ITSELF AND ITS SUBSIDIARIES ANY CLAIM FOR SUCHDAMAGES, INCLUDING ANY CLAIM FOR PROPERTY DAMAGE OR LOST PROFITS, WHETHERARISING IN CONTRACT, TORT OR OTHERWISE.

 

(iii)          The foregoinglimitations on liability in this Section 6(b) shall not applyto:  (1) either Party’s liability forbreaches of confidentiality under Section 5 (Confidentiality), and(2) either Party’s obligations under Section 6(c) (Third PartyClaims).

 

(c)           THIRD PARTYCLAIMS.  Each Purchaser shall indemnify,defend and hold harmless the Provider, its Subsidiaries and each of theirrespective directors, officers and employees, and each of the successors andassigns of any of the foregoing (collectively, the “Provider Indemnitees”),from and against any and all claims of Third Parties relating to, arising outof or resulting from the Provider’s furnishing or failing to furnish theServices provided for in this Agreement, other than Third Party claims arisingout of the gross negligence or willful misconduct of any Provider Indemnitee.

 

(d)           TITLE TO INTELLECTUALPROPERTY.  Each Purchaser acknowledgesthat it will acquire no right, title or interest (including any license rightsor rights of use) in any intellectual property which is owned or licensed byany Provider, by reason of the provision of the Services providedhereunder.  No Purchaser will remove oralter any copyright, trademark, confidentiality or other proprietary noticesthat appear on any intellectual property owned or licensed by any Provider, andeach Purchaser shall reproduce any such notices on any and all copies thereof.  No Purchaser will attempt to decompile,translate, reverse engineer or make excessive copies of any intellectualproperty owned or licensed by any Provider, and each Purchaser shall promptlynotify such Provider of any such attempt, regardless of whether by Purchaser orany Third Party, of which Purchaser becomes aware.

 

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(e)           FORCE MAJEURE.  Neither Party shall be liable to the otherif, and to the extent that, the performance or delay in performance of any ofits obligations under this Agreement is prevented, restricted, delayed orinterfered with due to circumstances beyond the reasonable control of suchParty, including, but not limited to, government legislation, fires, floods,explosions, epidemics, accidents, acts of God, wars, riots, strikes, lockoutsor other concerted acts of workers and/or acts of government.  The Party claiming an event of force majeureshall promptly notify the other Party in writing, and provide full particularsof the cause or event and the date of first occurrence thereof, as soon aspossible after the event and also keep the other Party informed of any furtherdevelopments.  The Party so affectedshall use its commercially reasonable efforts to remove the cause of non-performance,and both the Parties shall resume performance hereunder with the utmostdispatch when such cause is removed unless this Agreement has previously beenterminated under Section 4 hereof.

 

(f)            INDEPENDENTCONTRACTORS.  The Parties eachacknowledge that they are separate entities, each of which has entered intothis Agreement for independent business reasons. The relationships of theParties hereunder are those of independent contractors and nothing containedherein shall be deemed to create a joint venture, partnership or any other relationship.

 

(g)           NO THIRD PARTYBENEFICIARIES.  Except as expresslyprovided in Section 6(c), the provisions of this Agreement aresolely for the benefit of the Parties and their Subsidiaries and are notintended to confer upon any Person except the Parties any rights or remedieshereunder. Except for the Provider 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 or otherright in excess of those existing without reference to this Agreement.

 

(h)           GOVERNING LAW.  This Agreement shall be governed by andconstrued and interpreted in accordance with the laws of the State of Illinoisirrespective of the choice of laws principles of the State of Illinois, as toall matters, including matters of validity, construction, effect,enforceability, performance and remedies.

 

(i)            ADR PROCEDURES;EQUITABLE RELIEF.  The Partiesacknowledge that from time to time during the Term of this Agreement acontroversy, dispute or claim may arise relating to either Party’s rights orobligations under this Agreement.  TheParties agree that any such controversy, dispute or claim (whether arising incontract, tort or otherwise) arising out of or relating in any way to thisAgreement (including the interpretation or validity of this Agreement), shallbe resolved by the Alternative Dispute Resolution (“ADR”) provisions set forthin this Section 6(i) and Exhibit C, the result of whichshall be binding upon the Parties.

 

(i)            Notice.  Prior to initiating an ADR proceeding, aParty first must send written notice to the other Party in accordance with theprovisions of Section 6(o) describing the dispute and requestingattempted resolution by good faith negotiations.  Good faith negotiations shall be conducted in two stages, withthe second stage being triggered only if first stage negotiations do not resultin a resolution of the dispute.

 

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(ii)           First Stage Negotiations.  Following receipt of the written noticedescribed in the preceding paragraph, the respective CEOs or Presidents of theParties shall designate a group of no more than three individuals, exclusive ofcounsel, to participate in good faith negotiations aimed at resolving thedispute.  Within 21 days from receipt ofthe written notice, the respective groups shall meet in-person to conduct goodfaith negotiations.  By mutual writtenconsent, the Parties may extend the 21-day period for conducting first stagenegotiations.  If the Parties fail tomeet within the 21-day period or the Parties fail to resolve the dispute duringsuch period, and the period is not extended by mutual written agreement, theParties shall engage in second stage negotiations as described in the nextparagraph.

 

(iii)          Second StageNegotiations.  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 between therespective CEOs or Presidents (or their designees) of the Parties.  If the dispute has not been resolved within14 days following the conclusion of first stage negotiations, either Party mayinitiate an ADR proceeding as provided in Exhibit C.  The Parties shall have the right to berepresented by counsel in such a proceeding.

 

Notwithstandingthe foregoing, the Parties acknowledge that the breach of Section 5(Confidentiality) by one Party may give rise to irreparable injury to the otherParty which is not adequately compensable in damages or at law.  Accordingly, the Parties agree that in suchevent, the non-breaching party may seek equitable relief to enforce or preventviolation of such Party’s respective rights and/or obligations under thoseSections.  Unless otherwise agreed inwriting, the Parties shall continue to provide Services and honor all othercommitments under this Agreement during the course of dispute resolutionpursuant to the provisions of this Section 6(i) and Exhibit Cwith respect to all matters subject to such dispute, controversy or claim;provided, however, that this obligation shall only exist during the term ofthis Agreement.

 

(j)            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 and Exhibits hereto and thereto) and not to any particular provision of thisAgreement.  Section, Exhibit andSchedule references are to the Sections, Exhibits, and Schedules to thisAgreement unless otherwise specified. Unless otherwise stated, all references to any agreement shall be deemedto include the 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 of11:59pm Eastern Daylight Time on the Distribution Date and as such time may beamended thereafter, unless otherwise specified.

 

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(k)           SURVIVAL.  Section 1 (Definitions), Section 3(Billing; Taxes), Section 5 (Confidentiality), Sections 2(c)(v),6(b) (Liability), 6(c) (Third Party Claims), 6(d) (Titleto Intellectual Property), and 6(g) (No Third Party Beneficiaries) *through*6(r) (Severability), shallsurvive any expiration or termination of this Agreement.

 

(l)            AMENDMENT;ASSIGNMENT.  This Agreement shall bebinding upon and inure to the benefit of the Parties hereto and theirrespective successors and permitted assigns; PROVIDED, HOWEVER, that neitherParty may assign its rights or delegate its obligations under this Agreementwithout the express prior written consent of the other Party hereto.  Notwithstanding the foregoing, thisAgreement shall be assignable by either Party in whole with the prior writtenconsent of the other Party (which consent shall not be unreasonably withheld,delayed or conditioned) in connection with: (i) a merger or consolidation of suchParty if (a) such Party is not the surviving entity, or (b) such Party’sshareholders constitute less than 70% of the surviving shareholders; (ii) thesale of all or substantially all of the assets of such Party; or (iii) theacquisition by a Third Party of at least 30% of the combined voting power ofthe then-outstanding securities of such Party entitled to vote generally in theelection of directors (each such occurrence, a “Change of Control Event”), ineach case so long as the resulting, surviving or transferee Person assumes allthe obligations of the assignor hereunder by operation of law or pursuant to anagreement in form and substance reasonably satisfactory to the otherParty.  It shall not be deemed to be unreasonablefor a Party to withhold consent to assignment in connection with a Change ofControl Event on the basis that the proposed assignee is a competitor of suchParty.  In the event a Party effects aChange of Control Event without the other Party’s prior written consent toassign this Agreement as set forth above, the latter Party may terminate thisAgreement, in its sole discretion, with effect immediately upon the occurrenceof such Change of Control Event.

 

(m)          AUDIT ASSISTANCE.  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 of a Party exercises its right toexamine or audit such Party’s or its Subsidiary’s books, records, documents oraccounting practices and procedures pursuant to such applicable law, rules,regulations, standards or contract provisions and such audit or examinationrelates to the Services, the other Party shall provide, at the sole cost andexpense of the requesting Party, all assistance requested by the Party that issubject to the audit in responding to such audits or requests for information,to the extent that such assistance or information is within the reasonablecontrol of the cooperating Party and is related to the Services.

 

(n)           NO WAIVERS.  No failure or delay of any Party inexercising any power or right hereunder shall operate as a waiver thereof, norshall any single or partial exercise of any such right or power, or anyabandonment 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 havehereunder.  No provision of thisAgreement may be waived except pursuant to a writing executed by the waivingParty.

 

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(o)           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:

 

If to Abbott,to:

AbbottLaboratories

100 AbbottPark Road

Building AP6D,Dept. 364

Abbott Park,Illinois  60064-6020

Attn:  General Counsel

Facsimile:  (847) 938-1561

 

If to Hospira,to:

Hospira, Inc.

LegalDepartment

Dept. NLEG;

275 NorthField Drive

Lake Forest,IL 60045-5045

Attn:  General Counsel

Facsimile:  (224) 212-3312

 

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

 

(p)           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.

 

(q)           ENTIRE AGREEMENT.  This Agreement and the Exhibits andSchedules hereto contain the entire agreement and understanding between theParties with respect to the subject matter hereof and supersede all previousagreements, negotiations, discussions, writings, understandings, commitmentsand conversations with respect to such subject matter and there are no agreementsor understandings between the Parties other than those set forth or referred toherein or therein.  Notwithstanding anyother provisions in this Agreement to the contrary, in the event and to theextent that there is a conflict between the provisions of this Agreement andthe provisions of the Separation and Distribution Agreement, the provisions ofthis Agreement shall control.

 

(r)            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

 

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affected,impaired or invalidated thereby, so long as the economic or legal substance ofthe transactions contemplated hereby or thereby, as the case may be, is notaffected in any manner adverse to any Party. Upon such determination, the Parties shall negotiate in good faith in aneffort to agree upon such a suitable and equitable provision to effect theoriginal intent of the Parties.

 

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IN WITNESSWHEREOF, the Parties have executed this Agreement to be executed as of the datefirst 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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