Exhibit 10.1


 


U.S. TRANSITION SERVICES AGREEMENT


 


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


 


R E C I T A L S:


 


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


 


WHEREAS, in
order to effectuate the foregoing, Abbott and Hospira have entered into a
Separation 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 to
Hospira of certain assets, the assumption by Hospira of certain liabilities and
the distribution of Hospira common stock to Abbott shareholders, and for the
execution and delivery of certain other agreements in order to facilitate and provide
for the foregoing; and


 


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


 


NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants
contained herein, and subject to and on the terms and conditions herein set
forth, the Parties hereby agree as follows:


 


Section 1.                            DEFINITIONS.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Distribution
Date” means the date on which Abbott distributes as a dividend to its
shareholders all of the outstanding shares of Hospira common stock as set forth
in the Separation and Distribution Agreement.


 

















 


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


 


“Governmental
Authority” means any supranational, international, national, federal, state, or
local 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 applicable
securities laws or regulations.


 


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


 


“Hospira
Subsidiary” 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-client
privileged communications), memos and other materials prepared by attorneys or
under their direction (including attorney work product), and other technical,
financial, employee or business information or data.


 


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


 


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


 


“Omitted
Services” 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 money
center commercial bank agreed to by the Parties) announces as its prime lending
rate, as in effect from time to time.


 


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


 


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


 


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


 


“Service
Period” means, with respect to any Service, the period commencing on the
Distribution Date and ending on the earlier of (i) the date the Purchaser
terminates the


 


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


 


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


 


“Subsidiary”
of any Party means another Business Entity that is directly or indirectly
controlled by such Party.  As used
herein, “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Business
Entity, whether through ownership of voting securities or other interests, by
contract or otherwise.  For the
avoidance of doubt, TAP Pharmaceutical Products Inc., TAP Finance Inc. and TAP
Pharmaceuticals Inc. are not Subsidiaries of Abbott as that term is used in
this Agreement.


 


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


 


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


 


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


 


Section 2.                            SERVICES.


 


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


 


(b)           OMITTED SERVICES;
ADDITIONAL SERVICES.


 


(i)            If during the term of
this Agreement, a Party identifies a service that the other Party previously
provided to such Party prior to the Distribution Date, but such service was
inadvertently omitted from the Services set forth on the Schedules hereto (such
service an “Omitted Service”), then upon the prior written consent of the Party
that would be the Provider of such Omitted Service, which consent shall not be
unreasonably withheld, such Omitted Service shall be added and considered as
part of the Services.  The Parties shall
cooperate and act in good faith to create a Schedule for each Omitted
Service in the form attached hereto as Exhibit A.


 


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(ii)           From time to time after
the Distribution Date, the Parties may identify additional services that are
not Omitted Services that one Party will provide to the other Party in
accordance with the terms of this Agreement (the “Additional Services” and,
together with the Initial Services and any added Omitted Services, the
“Services”).  The Parties shall
cooperate and act in good faith to create a Schedule for each Additional
Service in the form attached hereto as Exhibit A.  Notwithstanding the foregoing, neither Party
shall have any obligation to agree to provide Additional Services.


 


(c)           PERFORMANCE OF
SERVICES.


 


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


 


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


 


(iii)          Nothing in this
Agreement shall require a Provider to perform or cause to be performed any
Service in a manner that would constitute a violation of applicable laws or the
Abbott Code of Business Conduct.


 


(iv)          No Provider shall be
obligated to perform or to cause to be performed any Service in a volume or
quantity which exceeds the planned 2004 volumes or quantities of analogous
services to be performed for the applicable Purchaser without reference to the
transactions contemplated by the Separation and Distribution Agreement.  A Purchaser may request a higher volume or
quantity of such historical volumes or quantities of a Service, which request
the 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 to
the applicable Schedule for such Service.


 


(v)           (1) Neither Provider
nor any of its Subsidiaries will be required to perform or to cause to be performed
any of the Services for the benefit of any Third Party or any other Person
other than the applicable Purchaser or its Subsidiaries, and (2) EXCEPT AS
EXPRESSLY PROVIDED IN SECTION 2(c), EACH PARTY ACKNOWLEDGES AND
AGREES THAT ALL SERVICES AND PRODUCTS ARE PROVIDED ON AN “AS-IS” BASIS AND THAT
EACH PROVIDER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE
SERVICES AND PRODUCTS, AND HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR ANY
OTHER WARRANTY WHATSOEVER.


 


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(d)           CHARGES FOR
SERVICES.  The charges for the Services
shall be determined in accordance with Exhibit B (the “Charges”).


 


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


 


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


 


(g)           COOPERATION.  In the event that (i) there is
nonperformance 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 Parties
agree to work together in good faith to arrange for an alternative means by
which the applicable Purchaser may obtain, at the Purchaser’s sole cost, the
Services so affected.


 


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


 


Section 3.                            BILLING;
TAXES.


 


(a)           PROCEDURE.  Charges for the Services shall be charged to
and payable by the Purchaser.  Amounts
payable 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 due
within thirty (30) days after the date of invoice.  All amounts due and payable hereunder shall be invoiced and paid
in U.S. dollars.


 


(b)           LATE PAYMENTS.  Charges not paid when due shall bear
interest 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 Taxes
incurred in connection with the applicable Provider’s provision of the
Services, including all sales, use, value-added, and similar Taxes, but
excluding Taxes based on such Provider’s net income.


 


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


 


Section 4.                            TERM
AND TERMINATION.


 


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


 


(b)           EARLY TERMINATION.  Each Purchaser shall have the right at any
time during the term of this Agreement to terminate its obligation to purchase
any individual Service, upon the giving of an advance written notice to the
Provider 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)           INFORMATION
TRANSMISSION.  On or prior to the last
day of each relevant Service Period, the Provider shall use commercially reasonable
efforts and shall cause its Subsidiaries to use commercially reasonable efforts
to support any transfer of Information concerning the relevant Services to the
applicable Purchaser.  If requested by
the Purchaser, the Provider shall deliver and shall cause its Subsidiaries to
deliver to the applicable Purchaser, within such time periods as the Parties
may reasonably agree, all Information received or computed for the benefit of
such Purchaser during the Service Period, in electronic and/or hard copy form;
provided, however, that (i) the Provider shall not have any obligation to
provide or cause to provide Information in any non-standard format, and (ii)
the Provider and its Subsidiaries shall be reimbursed for their reasonable
out-of-pocket costs for providing Information in any format other than its
standard format.


 


Section 5.                            CONFIDENTIALITY;
PROTECTIVE ARRANGEMENTS.


 


(a)           ABBOTT AND HOSPIRA
OBLIGATIONS.  Subject to Section 5(c),
Abbott, on behalf of itself and each Abbott Subsidiary, and Hospira, on behalf
of itself and each Hospira Subsidiary, agrees to hold, and to cause its
respective directors, officers, employees, agents, accountants, counsel and
other advisors and representatives to hold, in strict confidence, with at least
the same degree of care that applies to Abbott’s confidential and proprietary
information pursuant to policies in effect as of the Distribution Date, all
Information concerning the other (or its business) and the other’s Subsidiaries
(or their respective businesses) that is either in its possession (including
Information in its possession prior to the Distribution Date) or


 


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furnished by
the other or the other’s Subsidiaries or their respective directors, officers,
employees, agents, accountants, counsel and other advisors and representatives
at any time pursuant to this Agreement, and shall not use any such Information
other 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 public
domain through no fault of such Party or its Subsidiaries or any of their
respective directors, officers, employees, agents, accountants, counsel and
other advisors and representatives; (ii) later lawfully acquired from other
sources by such Party (or any of its Subsidiaries), which sources are not
themselves bound by a confidentiality obligation; or (iii) independently
generated without reference to any proprietary or confidential Information of
the other Party.


 


(b)           NO RELEASE; RETURN OR
DESTRUCTION.  Each Party agrees not to
release or disclose, or permit to be released or disclosed, any Information
addressed in Section 5(a) to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives who need to know such Information, and except in compliance
with Section 5(c) and Schedule 1.01(n) to the
Separation and Distribution Agreement. 
Without limiting the foregoing, when any Information furnished by the
other Party after the Distribution Date pursuant to this Agreement is no longer
needed for the purposes contemplated by this Agreement, each Party shall, at
such Party’s option, promptly after receiving a written request from the other
Party either return to the other Party all such Information in a tangible form
(including all copies thereof and all notes, extracts or summaries based
thereon) 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)           PROTECTIVE
ARRANGEMENTS.  In the event that either
Party or any of its Subsidiaries either determines on the advice of its counsel
that it is required to disclose any Information pursuant to applicable law or
the rules or regulations of any Governmental Authority or receives any demand
under lawful process or from any Governmental Authority to disclose or provide
Information of any other Party that is subject to the confidentiality
provisions hereof, such Party shall notify the other Party prior to disclosing
or providing such Information and shall cooperate at the expense of the
requesting Party in seeking any reasonable protective arrangements requested by
such other Party.  Subject to the
foregoing, the Party that received such request, or its Subsidiaries, may
thereafter 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 respective
Subsidiaries shall cooperate with each other in connection with the performance
of the Services hereunder, including producing on a timely basis all
Information that is reasonably requested with respect to the performance of
Services and the transition of Services at the end of the term of this
Agreement; provided, however, that such cooperation shall not unreasonably
disrupt the normal operations of the Parties and their respective Subsidiaries.


 


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(b)           LIMITATIONS ON
LIABILITY.


 


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


 


(ii)           IN NO EVENT SHALL
EITHER PARTY, ITS SUBSIDIARIES OR ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS
BE LIABLE TO THE OTHER PARTY FOR INDIRECT, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT, EVEN
IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND EACH
PARTY HEREBY WAIVES ON BEHALF OF ITSELF AND ITS SUBSIDIARIES ANY CLAIM FOR SUCH
DAMAGES, INCLUDING ANY CLAIM FOR PROPERTY DAMAGE OR LOST PROFITS, WHETHER
ARISING IN CONTRACT, TORT OR OTHERWISE.


 


(iii)          The foregoing
limitations on liability in this Section 6(b) shall not apply
to:  (1) either Party’s liability for
breaches of confidentiality under Section 5 (Confidentiality), and
(2) either Party’s obligations under Section 6(c) (Third Party
Claims).


 


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


 


(d)           TITLE TO INTELLECTUAL
PROPERTY.  Each Purchaser acknowledges
that it will acquire no right, title or interest (including any license rights
or rights of use) in any intellectual property which is owned or licensed by
any Provider, by reason of the provision of the Services provided
hereunder.  No Purchaser will remove or
alter any copyright, trademark, confidentiality or other proprietary notices
that appear on any intellectual property owned or licensed by any Provider, and
each 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 intellectual
property owned or licensed by any Provider, and each Purchaser shall promptly
notify such Provider of any such attempt, regardless of whether by Purchaser or
any Third Party, of which Purchaser becomes aware.


 


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(e)           FORCE MAJEURE.  Neither Party shall be liable to the other
if, and to the extent that, the performance or delay in performance of any of
its obligations under this Agreement is prevented, restricted, delayed or
interfered with due to circumstances beyond the reasonable control of such
Party, including, but not limited to, government legislation, fires, floods,
explosions, epidemics, accidents, acts of God, wars, riots, strikes, lockouts
or other concerted acts of workers and/or acts of government.  The Party claiming an event of force majeure
shall promptly notify the other Party in writing, and provide full particulars
of the cause or event and the date of first occurrence thereof, as soon as
possible after the event and also keep the other Party informed of any further
developments.  The Party so affected
shall use its commercially reasonable efforts to remove the cause of non-performance,
and both the Parties shall resume performance hereunder with the utmost
dispatch when such cause is removed unless this Agreement has previously been
terminated under Section 4 hereof.


 


(f)            INDEPENDENT
CONTRACTORS.  The Parties each
acknowledge that they are separate entities, each of which has entered into
this Agreement for independent business reasons. The relationships of the
Parties hereunder are those of independent contractors and nothing contained
herein shall be deemed to create a joint venture, partnership or any other relationship.


 


(g)           NO THIRD PARTY
BENEFICIARIES.  Except as expressly
provided in Section 6(c), the provisions of this Agreement are
solely for the benefit of the Parties and their Subsidiaries and are not
intended to confer upon any Person except the Parties any rights or remedies
hereunder. Except for the Provider Indemnitees, there are no Third Party
beneficiaries of this Agreement and this Agreement shall not provide any Third
Party with any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.


 


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


 


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


 


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


 


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(ii)           First Stage Negotiations.  Following receipt of the written notice
described in the preceding paragraph, the respective CEOs or Presidents of the
Parties shall designate a group of no more than three individuals, exclusive of
counsel, to participate in good faith negotiations aimed at resolving the
dispute.  Within 21 days from receipt of
the written notice, the respective groups shall meet in-person to conduct good
faith negotiations.  By mutual written
consent, the Parties may extend the 21-day period for conducting first stage
negotiations.  If the Parties fail to
meet within the 21-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 shall engage in second stage negotiations as described in the next
paragraph.


 


(iii)          Second Stage
Negotiations.  Following the
expiration of the 21-day period described in the preceding paragraph, or any
extension thereof mutually agreed to in writing, if the Parties are unable to
resolve the dispute, they shall engage in second stage negotiations between the
respective CEOs or Presidents (or their designees) of the Parties.  If the dispute has not been resolved within
14 days following the conclusion of first stage negotiations, either Party may
initiate an ADR proceeding as provided in Exhibit C.  The Parties shall have the right to be
represented by counsel in such a proceeding.


 


Notwithstanding
the foregoing, the Parties acknowledge that the breach of Section 5
(Confidentiality) by one Party may give rise to irreparable injury to the other
Party which is not adequately compensable in damages or at law.  Accordingly, the Parties agree that in such
event, the non-breaching party may seek equitable relief to enforce or prevent
violation of such Party’s respective rights and/or obligations under those
Sections.  Unless otherwise agreed in
writing, the Parties shall continue to provide Services and honor all other
commitments under this Agreement during the course of dispute resolution
pursuant to the provisions of this Section 6(i) and Exhibit C
with respect to all matters subject to such dispute, controversy or claim;
provided, however, that this obligation shall only exist during the term of
this Agreement.


 


(j)            INTERPRETATION.  Words in the singular shall be deemed to
include the plural and vice versa and words of one gender shall be deemed to
include the other genders as the context requires.  The terms “hereof,” “herein,” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole (including all of the Schedules and 
Exhibits hereto and thereto) and not to any particular provision of this
Agreement.  Section, Exhibit and
Schedule references are to the Sections, Exhibits, and Schedules to this
Agreement unless otherwise specified. 
Unless otherwise stated, all references to any agreement shall be deemed
to include the exhibits, schedules and annexes to such agreement.  The word “including” and words of similar
import 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 particular
case, the word “days” refers to calendar days. 
References herein to this Agreement or any other agreements contemplated
herein shall be deemed to refer to this Agreement or such other agreement as of
11:59pm Eastern Daylight Time on the Distribution Date and as such time may be
amended 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) (Title
to Intellectual Property), and 6(g) (No Third Party Beneficiaries) through  6(r) (Severability), shall
survive any expiration or termination of this Agreement.


 


(l)            AMENDMENT;
ASSIGNMENT.  This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns; PROVIDED, HOWEVER, that neither
Party may assign its rights or delegate its obligations under this Agreement
without the express prior written consent of the other Party hereto.  Notwithstanding the foregoing, this
Agreement shall be assignable by either Party in whole with the prior written
consent of the other Party (which consent shall not be unreasonably withheld,
delayed or conditioned) in connection with: (i) a merger or 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 surviving shareholders; (ii) the
sale of all or substantially all of the assets of such Party; or (iii) the
acquisition by a Third Party of at least 30% of the combined voting power of
the then-outstanding securities of such Party entitled to vote generally in the
election of directors (each such occurrence, a “Change of Control Event”), in
each case so long as the resulting, surviving or transferee Person assumes all
the obligations of the assignor hereunder by operation of law or pursuant to an
agreement in form and substance reasonably satisfactory to the other
Party.  It shall not be deemed to be unreasonable
for a Party to withhold consent to assignment in connection with a Change of
Control Event on the basis that the proposed assignee is a competitor of such
Party.  In the event a Party effects a
Change of Control Event without the other Party’s prior written consent to
assign this Agreement as set forth above, the latter Party may terminate this
Agreement, in its sole discretion, with effect immediately upon the occurrence
of such Change of Control Event.


 


(m)          AUDIT ASSISTANCE.  Each of the Parties and their respective
Subsidiaries are or may be subject to regulation and audit by governmental
bodies, standards organizations, other regulatory authorities, customers or
other parties to contracts with such Parties under applicable law and contract
provisions.  If a governmental body,
standards organization, other regulatory authority or customer or other party
to a contract with a Party or a Subsidiary of a Party exercises its right to
examine or audit such Party’s or its Subsidiary’s books, records, documents or
accounting practices and procedures pursuant to such applicable law, rules,
regulations, standards or contract provisions and such audit or examination
relates to the Services, the other Party shall provide, at the sole cost and
expense of the requesting Party, all assistance requested by the Party that is
subject to the audit in responding to such audits or requests for information,
to the extent that such assistance or information is within the reasonable
control of the cooperating Party and is related to the Services.


 


(n)           NO WAIVERS.  No failure or delay of any Party in
exercising any power or right hereunder shall operate as a waiver thereof, 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 other
right or power.  The rights and remedies
of the Parties and their Subsidiaries hereunder are cumulative and are not
exclusive of any rights or remedies which they would otherwise have
hereunder.  No provision of this
Agreement may be waived except pursuant to a writing executed by the waiving
Party.


 


11

















 


(o)           NOTICES.  All notices or other communications under
this Agreement must be in writing and shall be deemed to be duly given (i) when
delivered in person, (ii) upon transmission via confirmed facsimile
transmission, provided that such transmission is followed by delivery of a
physical copy thereof in person, via U.S. first class mail, or via a private
express mail courier, or (iii) two days after deposit with a private express
mail courier, in any such case addressed as follows:


 


If to Abbott,
to:


Abbott
Laboratories


100 Abbott
Park Road


Building AP6D,
Dept. 364


Abbott Park,
Illinois  60064-6020


Attn:  General Counsel


Facsimile:  (847) 938-1561


 


If to Hospira,
to:


Hospira, Inc.


Legal
Department


Dept. NLEG;


275 North
Field 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 to
be given.


 


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


 


(q)           ENTIRE AGREEMENT.  This Agreement and the Exhibits and
Schedules hereto contain the entire agreement and understanding between the
Parties with respect to the subject matter hereof and supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments
and conversations with respect to such subject matter and there are no agreements
or understandings between the Parties other than those set forth or referred to
herein or therein.  Notwithstanding any
other provisions in this Agreement to the contrary, in the event and to the
extent that there is a conflict between the provisions of this Agreement and
the provisions of the Separation and Distribution Agreement, the provisions of
this Agreement shall control.


 


(r)            SEVERABILITY.  If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof or thereof, or the application of such provision to Persons
or circumstances or in jurisdictions 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


 


12

















 


affected,
impaired or invalidated thereby, so long as the economic or legal substance of
the transactions contemplated hereby or thereby, as the case may be, is not
affected in any manner adverse to any Party. 
Upon such determination, the Parties shall negotiate in good faith in an
effort to agree upon such a suitable and equitable provision to effect the
original intent of the Parties.


 


13

















 


IN WITNESS
WHEREOF, the Parties have executed this Agreement to be executed 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:
  Christopher B. Begley

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
					



 


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