**Exhibit 10.7**

 

**EXECUTION COPY**

 

**TRANSITION MARKETING AND DISTRIBUTION SERVICES AGREEMENT**

 

**THISTRANSITION MARKETING AND DISTRIBUTION SERVICES AGREEMENT**, dated as ofApril     , 2004, is by and between Hospira, Inc., aDelaware corporation (“Hospira”) and                       ,a               corporationwith its principal place of business as provided in Schedule 7 ofthis Agreement (“Distributor”) and is effective as of the Effective Time(as defined below).

 

WHEREAS, the board ofdirectors of Abbott (as defined below) has determined that it is appropriateand advisable to separate its core hospital products business from Abbott’sother businesses by contributing the core hospital products business andrelated assets to Hospira and distributing the shares of Hospira to theshareholders of Abbott, so that the core hospital products business will beowned by Hospira;

 

WHEREAS, the transfer toHospira of the Delayed Ex-U.S. Commercial Assets (as defined below) and theDelayed Ex-U.S. Commercial Liabilities (as defined below) within the Territory(as defined below) cannot be accomplished until Hospira obtains regulatoryapprovals for the transfer of the marketing authorizations for the Products (asdefined below) and establishes its own operations in the Territory; and

 

WHEREAS, Hospira andDistributor have agreed that, until the transfer of the marketingauthorizations for the Products to Hospira is accomplished and Hospiraestablishes its own operations in the Territory, Distributor shall promote,market, distribute and sell the Products within the Territory for Hospira, butwithout assuming the commercial risks associated with such activities, andHospira shall assume the commercial risks associated with Distributor’spromotional, marketing, distributing and selling activities.

 

NOW, THEREFORE, inconsideration of the premises and the mutual covenants contained herein, theParties hereto agree as follows:

 

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1.             **DEFINITIONS. **Capitalized terms used herein have the meanings ascribed to them in theSeparation and Distribution Agreement (as defined below) unless otherwisedefined herein.  Reference is made to Section 8.11regarding the interpretation of certain words and phrases used in thisAgreement (as defined below).  Inaddition, for the purpose of this Agreement, the following terms shall have themeanings set forth below.

 

“2004 Plan” means the2004 plan attached as Schedule 1 of this Agreement.

 

“Abbott” means AbbottLaboratories, an Illinois corporation.

 

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

 

“Activities” meansany Additional Activities, Distributor Activities, Enhanced Activities or NewActivities.

 

“Additional Activities”has the meaning set forth in Section 4.1(a) of this Agreement.

 

“Adjusted Plan for 2005”means the 2004 Plan adjusted for expected inflation for 2005 in the country inwhich the Distributor maintains its principal place of business with the amountof such adjustment to be determined by Abbott no later than August 31,2004 by requesting from each of three (3) major money center commercial banksan estimate of inflation rates for 2005 for such country and averaging theresponses received from such banks; provided that if not all banksrespond for such country, then the average shall be taken using the dataprovided by the responding banks.

 

“Adjusted Plan for 2006”means the Adjusted Plan for 2005 adjusted for expected inflation for 2006 inthe country in which the Distributor maintains its principal place of businesswith the amount of such adjustment to be determined by Abbott no later thanAugust 31, 2005 by requesting from each of three (3) major money centercommercial banks an estimate of inflation rates for 2006 for such country andaveraging the responses received from such banks; provided that if notall banks respond for such country, then the average shall be taken using thedata provided by the responding banks.

 

“Agreement” meansthis Transition Marketing and Distribution Services Agreement and each of theSchedules hereto.

 

“Book Value” means,for any Delayed Ex-U.S. Commercial Liability, the recorded amount of suchDelayed Ex-U.S. Commercial Liability in the accounting books of Distributor as

 

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ofa particular date, calculated in accordance with Distributor’s policies andprocedures as in effect at such time.

 

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

 

“Change of Control Event”has the meaning set forth in Section 8.5 of this Agreement.

 

“Closing Date” hasthe meaning set forth in Section 7.1 of this Agreement.

 

“Closing Report” hasthe meaning set forth in Section 7.4 of this Agreement.

 

“Delayed Ex-U.S.Commercial Assets” means: (i) the Hospira Assets (other than DelayedEx-U.S. Manufacturing Assets) that are held by Distributor as of the EffectiveTime; and (ii) the Hospira Assets that are held by Distributor of the typedescribed in subsection (v) of the definition of Hospira Assets in theSeparation and Distribution Agreement.

 

“Delayed Ex-U.S.Commercial Liabilities” means: (i) the Hospira Liabilities (other thanDelayed Ex-U.S. Manufacturing Liabilities) of Distributor that remainoutstanding as of the Effective Time; and (ii) the Hospira Liabilities ofDistributor of the type described in subsection (vi) of the definition ofHospira Liabilities in the Separation and Distribution Agreement.

 

“Distribution Date”means the date determined by the board of directors of Abbott, in its solediscretion, for the consummation of the Distribution.

 

“Distributor Activities”has the meaning set forth in Section 4.1(a) of this Agreement.

 

“Enhanced Activities”has the meaning set forth in Section 4.1(b) of this Agreement.

 

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

 

“Factored Assets” hasthe meaning set forth in Section 7.2 of this Agreement.

 

“Factored Liabilities”has the meaning set forth in Section 7. 2 of this Agreement.

 

“Factoring Adjustment”means the difference resulting from subtracting: (a) the present discountedvalue of the Net Book Value of the Factored Assets, the Book Value of theFactored Liabilities and the Book Value of the intercompany trade payablesrelated to the Products outstanding as of the Closing Date, calculatedutilizing the Local Interest Rate for the period from the Closing Date throughthe remaining portion of the remittance terms as set forth on

 

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column one of Schedule 2of this Agreement; from (b) the Net Book Value of the Factored Assets, the BookValue of the Factored Liabilities and the Book Value of the intercompany tradepayables related to the Products outstanding as of the Closing Date.

 

“Fixed Fee Retainer”means the following monthly payments payable in local currency: (i) for eachmonth of the period commencing on the date after the Distribution Date andending on November 30, 2004, one hundred five percent (105%) of theexpenses included in the 2004 Plan for each such month; (ii) for each month ofthe period commencing on December 1, 2004 and ending on November 30,2005, one hundred five percent (105%) of the expenses for each such month inthe Adjusted Plan for 2005; and (iii) for each month during the periodcommencing on December 1, 2005 and ending on the last day of the Term, onehundred five percent (105%) of the expenses for each such month in the AdjustedPlan for 2006.

 

“Guidelines” has themeaning set forth in Section 4.4 of this Agreement.

 

“Hospira” has themeaning set forth in the Recitals.

 

“Hospira Subsidiary”means any Subsidiary of Hospira. For greater clarity, the Transferred Entitiesshall be deemed to have been Hospira Subsidiaries at all times prior to theEffective Time.

 

“Local Closing” hasthe meaning set forth in  Section 7.1of this Agreement.

 

“Local Interest Rate”means the prevailing local per annum interest rate for ninety (90) dayborrowings as in effect on the Distribution Date in the country in whichDistributor maintains its principal place of business, determined on a basisconsistent with Abbott’s treasury policies and procedures as of theDistribution Date.

 

“Net Asset Value”means the difference between the Net Book Value of the Delayed Ex-U.S.Commercial Assets and the Book Value of the Delayed Ex-U.S. CommercialLiabilities held by Distributor as of a particular date.

 

“Net Book Value”means, for any Delayed Ex-U.S. Commercial Asset, the recorded costs of suchDelayed Ex-U.S. Commercial Asset in the accounting books of the Distributor,adjusted for related valuation reserves, amortization and depreciation, as of aparticular date, calculated in accordance with Distributor’s policies andprocedures as in effect at such time.

 

“New Activities” hasthe meaning set forth in Section 4.1(d) of this Agreement.

 

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“Notice of Local Closing”has the meaning set forth in Section 6.2 of this Agreement.

 

“Parties” means theparties to this Agreement.

 

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

 

“Products” has themeaning set forth in Section 2.1 of this Agreement.

 

“Purchase Price” hasthe meaning set forth in Section 7.3 of this Agreement.

 

“Purchaser” meansHospira or a Hospira Subsidiary or designee that shall purchase the DelayedEx-U.S. Commercial Assets and assume the Delayed Ex-U.S. Commercial Liabilitiesat the Local Closing.

 

“Separation andDistribution Agreement” means the Separation and Distribution Agreement byand between Abbott and Hospira dated April 12, 2004.

 

“Subsidiary” of anyParty means another Business Entity that is directly or indirectly controlledby such Party.  As used herein,“control” means the possession, directly or indirectly, of the power to director cause the direction of the management and policies of such Business Entity,whether through ownership of voting securities or other interests, by contractor otherwise.  For the avoidance ofdoubt, TAP Pharmaceutical Products Inc., TAP Finance Inc. and TAPPharmaceuticals Inc. are not Subsidiaries of Abbott as that term is used inthis Agreement.

 

“Term” has themeaning set forth in Section 6.1 of this Agreement.

 

“Territory” has themeaning set forth in Section 2.2 of this Agreement.

 

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

 

“Transition ServicesPeriod” means the period from the Effective Time until the earlier of: (i)the Closing Date; and (ii) except as otherwise provided in Section 8.1of this Agreement, the second anniversary of the Distribution Date.

 

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2.             **DISTRIBUTION**

 

2.1           Products.  For purposes of thisAgreement, “Products” means the Hospira Products that are sold in theTerritory by Distributor as of the Effective Time and such other products thatare added by the Parties pursuant to the provisions of this Agreement.

 

2.2           Territory.  Hospira hereby appointsDistributor, and Distributor hereby accepts such appointment, to promote,market, distribute and sell the Products within the country or countries listedon Schedule 3  of thisAgreement (the “Territory”) in its own name, acting as Hospira’snon-exclusive distributor.

 

2.3           Distribution Channels. Distributor has the right to promote, market, distribute and sell theProducts to customers in the Territory through all channels of distributioneither by itself or by way of any Third Parties, including wholesalers,sub-distributors and agents.  Thepromotion, marketing, distribution or sale of Products by any Third Party shallrequire the prior written consent of Hospira unless: (i) such Third Party wasengaged in the promotion, marketing, distribution or sale of the Products priorto the Effective Time; or (ii) Distributor is obtaining analogous services forAbbott products from such Third Party. Distributor shall not grant to any wholesalers, sub-distributors oragents any rights greater than those that are granted by Hospira to Distributorunder this Agreement.

 

2.4           Independent Contractor. Each of the Parties hereby acknowledges that the Parties are separateentities, each of which has entered into this Agreement for independentbusiness reasons.  The relationship ofthe Parties hereunder is that of independent contractors and nothing containedherein shall be deemed to create a joint venture, partnership or any otherrelationship.

 

2.5           Performance by Subsidiaries.  Allrights and obligations of a Party under or pursuant to this Agreement may beexercised, satisfied, met or fulfilled, in whole or in part, by such Partydirectly or, in the case of Distributor, by any Abbott Subsidiary and, in thecase of Hospira, by any Hospira Subsidiary.

 

3.             **PURCHASE OF PRODUCTS ANDTERMS OF SALE**

 

3.1           Orders; Terms and Conditions. Distributor shall purchase from Hospira, and Hospira shall sell toDistributor, such quantities of Products as Distributor may order from time totime pursuant to the terms of this Agreement. The price, terms and conditions of each sale of Products to Distributorshall be agreed from time to time by

 

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Distributor andHospira.  Any provisions in anypreprinted order form or order document used by Hospira or Distributor areexplicitly rejected and shall be null and void and of no force or effect.

 

3.2           Payments.  (a) During each month of theTerm, Hospira shall pay to Distributor the Fixed Fee Retainer and such otheramounts as described in Schedule 4 of this Agreement.

 

(b)              Distributor shall pay Hospira the amountsdescribed in Schedule 4 of this Agreement under the terms andconditions described therein.

 

(c)              Hospira hereby authorizes Distributor tooffset the amounts due from Hospira to Distributor under subsection (a)from the amounts due from Distributor to Hospira undersubsection (b).  If the differenceresulting from such offset is a positive number, Distributor shall pay suchdifference to Hospira in accordance with Schedule 4 of thisAgreement.  If such difference is anegative number, Hospira shall pay such difference to Distributor in accordancewith Schedule 4 of this Agreement.

 

3.3           Late Payments.  Allamounts due under this Agreement that are not paid when due shall bear interestat a rate per annum equal to the sum of: (i) Local Interest Rate; and (ii) twopercent (2%).

 

4.             **DISTRIBUTOR’S ACTIVITIES**

 

4.1           Distributor Activities.  (a)   During the Term, Distributor shall perform regulatory,pharmacovigilance, promotional, marketing, distribution and selling activitiesfor the Products in the Territory in a manner that is: (i) substantiallysimilar in nature, quality and timeliness to those services contemplated by theParties in preparing the 2004 Plan; (ii) consistent with the Guidelines, theAbbott Code of Business Conduct and applicable local laws; and (iii) subject toHospira’s commercially reasonable instructions with respect to such activities(the “Distributor Activities”). Nothing in this Agreement shall require either of the Parties to performor cause to be performed any Activities in a manner that would constitute aviolation of applicable laws, the marketing authorizations for the Products orthe Abbott Code of Business Conduct.

 

(b)           Subject to Section 4.1(c), Distributor shall perform anyDistributor Activities for the distribution of Product that are of a naturecontemplated by the Parties in preparing the 2004 Plan but are of a volume thatexceeds that contemplated by the

 

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2004 Plan (“AdditionalActivities”) without the need for a prior written request by Hospira.  If Hospira requests in writing thatDistributor perform: (i) Distributor Activities other than for the distributionof Product; or (ii) services or activities related to the Products that are ofa nature contemplated by the Parties in preparing the 2004 Plan but are of aquality or timeliness that exceed those contemplated by the Parties inpreparing the 2004 Plan (collectively, the “Enhanced Activities”),subject to Section 4.1(c), Distributor shall provide such EnhancedActivities to the extent Distributor believes in its reasonable judgment thatit can provide such Enhanced Activities without disruption of its otherbusiness.

 

(c)           Hospira shall reimburse Distributor for one hundred five percent (105%)of any incremental costs incurred by Distributor in providing any AdditionalActivities or Enhanced Activities, including all fixed costs and employment andemployee-related costs incurred to provide such Additional Activities orEnhanced Activities (notwithstanding anything to the contrary in the EmployeeBenefits Agreement between Abbott and Hospira).  Prior to hiring or assigning any incremental employee to providesuch Additional Activities or Enhanced Activities or incurring any fixed costsin connection with such Additional Activities or Enhanced ActivitiesDistributor shall notify Hospira in writing of its intention to do so, andHospira shall have fifteen (15) days to either provide the written agreement ofits Vice President and General Manager, International Commercial Operations orhis designee to the hiring or assignment of such incremental employee orincurring any such fixed costs or to withdraw or modify its request forEnhanced Activities such that, in the reasonable judgment of  Distributor, no additional employee isrequired and no fixed cost will be incurred. Distributor shall have no liability for failing to perform anyAdditional Activities that are the subject of any such notice for any periodprior to its receipt of Hospira’s written agreement to the hiring or assignmentof incremental employees or incurrence of fixed costs.  If Hospira does not respond to such notice,it will be deemed to have withdrawn its request for that portion of theEnhanced Activities to be performed by an incremental employee or as to whichsuch fixed costs relate, and Distributor shall have no obligation to performthe Additional Activities for which such incremental employees were to be hiredor assigned or fixed costs were to be incurred.

 

(d)           During the Term, Hospira may identify services or activities related tothe Products that Hospira would like Distributor to provide to Hospira thatwere not of the nature contemplated by the Parties as Distributor Activities inpreparing the 2004 Plan (“New Activities”).   The Parties shall negotiate in good faith the nature of andcosts for

 

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providing such NewActivities; provided, however, that Distributor shall have noobligation to provide any New Activities unless it otherwise agrees in writing,including with respect to the cost of such New Activities.

 

4.2           Proration.  In the event of any partialpayment of any invoice covering both Hospira Products and other products ofDistributor, the amount collected by Distributor from the customer shall beallocated to Hospira in the same proportion that the amount of the invoice forthe Products bears to the total amount of the invoice.  Any interest recovered or out-of-pocketexpenses incurred in connection with the collection of an invoice covering bothProducts and other products of Distributor shall be allocated to Hospira in thesame proportion that the amount of the invoice for the Products bears to thetotal invoice.

 

4.3           Disclaimer.  (a)  EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTYACKNOWLEDGES AND AGREES THAT ALL SERVICES AND PRODUCTS ARE PROVIDED ON AN“AS-IS” BASIS AND DISTRIBUTOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, ANDHEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FORANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER; and(b) notwithstanding anything to the contrary herein: (i) Distributor shall notbe required to perform or cause to be performed any Activities or any otherservice or activity for the benefit of any Party other than Hospira and anyHospira Subsidiary; and (ii) Distributor shall have no obligation to Hospirafor any Liabilities relating to, arising out of, or resulting from theActivities except to the extent that such Liabilities relate to, arise out ofor result from (A) Distributor’s gross negligence or willful misconduct or (B)Distributor’s payment obligations pursuant to this Agreement.

 

4.4           Adherence to Guidelines. Each of Hospira and Distributor hereby agrees and covenants that duringthe Term it shall adhere to the guidelines for Distributor Activities set forthin Schedule 5 of  thisAgreement (the “Guidelines”).

 

5.             **INDEMNIFICATION**

 

5.1           Indemnification by Hospira. Hospira shall, to the fullest extent permitted by law, indemnify, defendand hold Distributor harmless against and in respect of any Liabilitiesrelating to, arising out of, or resulting from: (i) Distributor’s performanceof this

 

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Agreement; (ii) the DelayedEx-U.S. Commercial Assets and Delayed Ex-U.S. Commercial Liabilities held byDistributor; and (iii) any failure by Purchaser to perform any obligations ofPurchaser contemplated under this Agreement, including the failure by Purchaserto effect a Local Closing under Article 7 of this Agreement; provided,however, that Hospira shall not be required to indemnify Distributor tothe extent any Liabilities relate to, arise out of, or result from the grossnegligence or willful misconduct of Distributor in performing this Agreement.

 

5.2           Indemnification by Distributor. Distributor shall, to the fullest extent permitted by law, indemnify,defend and hold harmless Hospira against and in respect of any Liabilitiesrelating to, arising out of, or resulting from the gross negligence or willfulmisconduct of Distributor in performing this Agreement.

 

6.             **EFFECTIVE TIME AND TERM**

 

6.1           Term.  This Agreement shall becomeeffective at the Effective Time and shall remain in effect for a term expiringon the second anniversary of the Distribution Date unless: (i) terminated byHospira on an earlier date by initiating the Local Closing in accordance withthe provisions of Section 6.2; or (ii) extended due to an event offorce majeure in accordance with Section 8.1 (the “Term”).

 

6.2           Local Closing. Hospira shall be entitled to initiate a Local Closing at any time duringthe Term by giving Distributor at least ninety (90) days’ prior written noticeof such Local Closing (the “Notice of Local Closing”).  Hospira shall identify the name and addressof the Purchaser at least ninety (90) days prior to the Local Closing.

 

6.3           Survival. The provisions of Section 4.3, Article 5, Section 8.3,Section 8.4, Section 8.5, Section 8.6, Section 8.8,Section 8.9, Section 8.10, Section 8.11 andSection 8.12 of this Agreement, any outstanding payment obligationsunder Article 3 or Section 4.1(c) and any outstandingpayment, invoicing and wind down obligations under Article 7 shallsurvive the termination of this Agreement and shall remain in full force andeffect thereafter.

 

7.             **PURCHASE OF ASSETS ANDASSUMPTION OF LIABILITIES**

 

7.1           Local Closing. Except as otherwise provided in Section 7.5 below, at theexpiration or termination of the Term pursuant to Article 6, therewill be a local closing (the “Local Closing”) to evidence andeffectuate: (i) transfer of all legal title to and physical possession of allthe Delayed Ex-U.S. Commercial Assets owned by Distributor

 

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(other than the FactoredAssets) as of the date of the Local Closing (the “Closing Date”) toPurchaser; and (ii) the assumption by Purchaser of all Delayed Ex-U.S.Commercial Liabilities of Distributor (other than Factored Liabilities andintercompany trade payables related to the Products) outstanding as of theClosing Date.  Any Delayed Ex-U.S.Commercial Liabilities that are included in the calculation of the Fixed FeeRetainer shall not be considered Delayed Ex-U.S. Commercial Liabilities as ofthe Closing Date and shall be paid in accordance with the provisions of Section 7.6of this Agreement.  The Closing Datemust occur following the close of business on the last business day of a monthand must occur on or before the last day of the Term.

 

7.2           Factored Assets and Factored Liabilities.  AnyDelayed Ex-U.S. Commercial Assets or Delayed Ex-U.S. Commercial Liabilities(such as trade receivables and certain Third Party Liabilities) that cannot belegally or practically transferred to or assumed by Purchaser at the LocalClosing  (respectively, the “FactoredAssets” and “Factored Liabilities”) and intercompany trade payablesrelated to the Products: (i) shall not be included as part of the DelayedEx-U.S. Commercial Assets and the Delayed Ex-U.S. Commercial Liabilities to betransferred to Purchaser; (ii) shall not be considered as Hospira Assets orHospira Liabilities after the Local Closing; and (iii) shall be retained byDistributor.  In order to reflect thetime value of money, the Parties shall calculate the Factoring Adjustment.

 

7.3           Asset Purchase and Liability Assumption.  On theClosing Date, Distributor shall sell, transfer, convey and deliver toPurchaser, and Purchaser shall purchase and accept delivery of, all DelayedEx-U.S. Commercial Assets owned by Distributor (other than Factored Assets) asof the Closing Date and Purchaser shall accept, assume and agree faithfully toperform, discharge and fulfill the Delayed Ex-U.S. Commercial Liabilities ofDistributor (other than Factored Liabilities and intercompany trade payablesrelated to the Products) outstanding as of the Closing Date in exchange for apurchase price equal to: (i) the Net Asset Value of the Delayed Ex-U.S.Commercial Assets and Delayed Ex-U.S. Commercial Liabilities transferred as ofthe Closing Date; plus (ii) the Factoring Adjustment (the “Purchase Price”). The Purchase Price shall be paid inaccordance with the provisions of Section 7.4 below.

 

7.4           Invoice and Payment. Within twenty (20) days following the Closing Date, Distributor shall(a) prepare and deliver to each of Hospira and Purchaser a report (the “ClosingReport”) setting forth: (i) a list identifying all of the Delayed Ex-U.S.Commercial Assets and Delayed Ex-U.S. Commercial Liabilities transferred to or

 

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assumed by Purchaser at theLocal Closing which shall contain the information regarding such DelayedEx-U.S. Commercial Assets and Delayed Ex-U.S. Commercial Liabilities, and be insuch format or formats, as is available from the books and records ofDistributor; (ii) the Net Book Value of all Delayed Ex-U.S. Commercial Assetstransferred by Distributor to Purchaser at the Local Closing and the Book Valueof all Delayed Ex-U.S. Commercial Liabilities assumed by Purchaser at the LocalClosing; (iii) the Net Book Value of the Factored Assets and the Book Value ofthe Factored Liabilities; (iv) the Book Value of the intercompany tradepayables related to the Products; (v) the amount of the Factoring Adjustment;and (vi) the Purchase Price; and (b) provide an invoice to Purchaser statingthe Purchase Price plus any applicable value added Taxes, sales Taxes ortransfer Taxes or any similar Taxes payable by Purchaser in accordance with theprovisions of applicable law.  Purchasershall pay the amount so invoiced within thirty (30) days from the date ofDistributor’s invoice.  The PurchasePrice plus any applicable Taxes shall be paid in the local currency of thecountry in which Distributor has its principal place of business in accordancewith payment instructions to be provided by Distributor.

 

7.5           Failure to Close. Subject to the provisions of Section 8.1, if Hospira doesnot provide Notice of Local Closing at least ninety (90) days prior to the endof the Term, the following shall be applicable as of the end of the Term:

 

(a)           Except as otherwise provided in Section 7.5(d) below,Distributor shall not have any responsibility, liability or obligation toHospira with respect to the Delayed Ex-U.S. Commercial Assets and DelayedEx-U.S. Commercial Liabilities in the Territory;

 

(b)           Within twenty (20) days following the end of the Term, Distributorshall provide an invoice to Hospira indicating the Purchase Price calculated asif the Local Closing had taken place as of the end of the Term and Hospirashall pay the invoice within thirty (30) days from the date of such invoice;

 

(c)           As of the end of the Term, Distributor shall immediately cease allActivities related to the Products, except to the extent necessary forDistributor to satisfy its remaining contracts, commitments or other legalobligations in the Territory related to the Products; and

 

(d)           Subject to the provisions of Section 7.5(c), Distributorshall proceed to liquidate all the Delayed Ex-U.S. Commercial Assets existingas of the

 

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end of the Term and pay allDelayed Ex-U.S. Commercial Liabilities outstanding as of the end of the Termand, following the completion of the wind down activities, to remit theproceeds from such wind down to Hospira, net of Delayed Ex-U.S. CommercialLiabilities and the costs incurred by Distributor in connection with such winddown activities.  Any proceeds resultingfrom such wind down activities shall be remitted to Hospira in the localcurrency of the country in which Distributor has its principal place of businessin accordance with payment instructions to be provided by Hospira.

 

7.6           Payment of Final Amounts. Distributor shall provide to Hospira a report indicating any amountsaccrued but not yet paid as of the Closing Date in accordance with theprovisions of Section 3.2 by the first business day after theDistributor shall be obligated to submit a D.1.1. to Abbott headquarters inaccordance with Abbott’s policies and procedures in effect at such time.  Hospira or Distributor, as applicable, shallpay the net amount reflected on such report on the next Netting Date followingthe end of the period that begins with the date of such report and ends thirtydays thereafter.

 

7.7           Wind Down of Tenders.  TheParties hereby agree that the Parties shall enter into good faith negotiationsprior to the end of the Term to reach agreement on winding down all tendercontracts: (i) that cover Products; and (ii) the term of which extends past theend of the Term.

 

8.             **MISCELLANEOUS.**

 

8.1           Force Majeure. Neither Party shall be deemed in default of this Agreement to the extentthat any delay or failure in the performance of its obligations under thisAgreement results from any cause beyond its reasonable control and without itsfault or negligence, such as acts of God, acts of a Governmental Authority,embargoes, epidemics, war, riots, insurrections, acts of terrorism, fires,explosions, earthquakes, floods, unusually severe weather conditions, laborproblems or unavailability of parts, or, in the case of computer systems, anyfailure in electrical or air conditioning equipment.  In the event of any such excused delay, the time for performanceshall be extended for a period equal to the time lost by reason of the delay.  Notwithstanding the foregoing, the LocalClosing shall not be delayed pursuant to this Section beyond the date thatis thirty (30) months after the Effective Time.

 

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8.2           Counterparts. This Agreement may be executed in one or more counterparts, all of whichshall be considered one and the same agreement.

 

8.3           Governing Law. This Agreement shall be governed by and construed and interpreted inaccordance with the laws of the State of Illinois irrespective of the choice oflaws principles of the State of Illinois, as to all matters, including mattersof validity, construction, effect, enforceability, performance and remedies.

 

8.4           Dispute Resolution.  Anycontroversy, dispute or claim (whether arising in contract, tort or otherwise)arising out of or relating in any way to this Agreement shall be resolvedpursuant to the procedures set forth in Schedule 6 of thisAgreement.  Unless otherwise agreed inwriting, the Distributor shall continue to perform Activities in accordancewith the provisions of this Agreement during the course of any dispute, but inno event shall such Activities extend beyond the second anniversary of theDistribution Date, unless the Local Closing is delayed under Section 8.1.

 

8.5           Assignability. This Agreement shall be binding upon and inure to the benefit of theParties hereto and their respective successors and permitted assigns; provided,however, that neither Party may assign its rights or delegate itsobligations under this Agreement without the express prior written consent ofthe other Party hereto.  Notwithstandingthe foregoing, this Agreement shall be assignable by either Party in whole withthe prior written consent of the other Party (which consent shall not beunreasonably withheld, delayed or conditioned) in connection with: (i) a mergeror consolidation of such Party if (a) such Party is not the surviving entity,or (b) such Party’s shareholders constitute less than 70% of the survivingshareholders; (ii) the sale of all or substantially all of the assets of suchParty; or (iii) the acquisition by a Third Party of at least 30% of thecombined voting power of the then-outstanding securities of such Party entitledto vote generally in the election of directors (each such occurrence, a “Changeof Control Event”), in each case so long as the resulting, surviving ortransferee Person assumes all the obligations of the assignor hereunder byoperation of law or pursuant to an agreement in form and substance reasonablysatisfactory to the other Party.  It shallnot be deemed to be unreasonable for a Party to withhold consent to assignmentin connection with a Change of Control Event on the basis that the proposedassignee is a competitor of such Party. In the event a Party effects a Change of Control Event without the otherParty’s prior written consent to assign this Agreement as set forth above, thelatter Party may terminate this Agreement, in its sole discretion, with effectimmediately upon the occurrence of such Change of Control Event.

 

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8.6           Notices.  All notices or othercommunications under this Agreement must be in writing and shall be deemed tobe duly given: (i) when delivered in person; (ii) upon transmission viaconfirmed facsimile transmission, provided that such transmission is followedby delivery of a physical copy thereof in person, via U.S. first class mail, orvia a private express mail courier; or (iii) two (2) days after deposit with aprivate express mail courier, in any such case addressed as set forth on Schedule 7of this Agreement.  Any Party may, bynotice to the other Party, change the address to which such notices are to begiven.

 

8.7           Severability.  Ifany provision of this Agreement or the application thereof to any entity orperson or circumstance is determined by a court of competent jurisdiction to beinvalid, void or unenforceable, the remaining provisions hereof, or theapplication of such provision to any entity or person or circumstances or injurisdictions other than those as to which it has been held invalid or unenforceable,shall remain in full force and effect and shall in no way be affected, impairedor invalidated thereby, so long as the economic or legal substance of thetransactions contemplated hereby is not affected in any manner adverse to anyParty.  Upon such determination, theParties shall negotiate in good faith in an effort to agree upon such asuitable and equitable provision to effect the original intent of the Parties.

 

8.8           Waivers of Default. Waiver by either Party of any default by the other Party of anyprovision of this Agreement shall not be deemed a waiver by the waiving Partyof any subsequent or other default, nor shall it prejudice the rights of theother Party.

 

8.9           Headings.  The article, section andparagraph headings contained in this Agreement are for reference purposes onlyand shall not affect in any way the meaning or interpretation of thisAgreement.

 

8.10         Amendments.  No provisions of thisAgreement shall be deemed amended, supplemented or modified unless suchamendment, supplement or modification is in writing and signed by theauthorized representative of both Parties. No provisions of this Agreement shall be deemed waived unless suchwaiver is in writing and signed by the authorized representative of the Partyagainst whom it is sought to be enforced.

 

8.11         Interpretation. Words in the singular shall be deemed to include the plural and viceversa and words of one gender shall be deemed to include the other genders asthe context requires.  The terms“hereof,” “herein,” and “herewith” and words of similar import shall, unlessotherwise stated, be construed to refer to this Agreement as a whole

 

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(including all of theSchedules hereto) and not to any particular provision of this Agreement.  Article, section, andschedule references are to the articles, sections, 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 shall be deemed to refer to thisAgreement as of the Effective Time and as it may be amended thereafter, unlessotherwise specified.

 

8.12         Mutual Drafting. This Agreement shall be deemed to be the joint work product of theParties and any rule of construction that a document shall be interpreted orconstrued against a drafter of such document shall not be applicable.

 

*     *    *     *

 

IN WITNESS WHEREOF, theParties have caused this Transition Marketing and Distribution ServicesAgreement to be executed as of the date first written above.

 
| **[Distributor]** |   | **Hospira,  Inc.** |
|-------------------|--------|--------------------|
|              |   |               |
|              |   |               |
| By:               |   | By:                |
| Title:            |   | Title:             |

 

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