Exhibit 10.7


 


EXECUTION COPY


 


TRANSITION MARKETING AND DISTRIBUTION SERVICES AGREEMENT


 


THIS
TRANSITION MARKETING AND DISTRIBUTION SERVICES AGREEMENT, dated as of
April     , 2004, is by and between Hospira, Inc., a
Delaware corporation (“Hospira”) and                       ,
a               corporation
with its principal place of business as provided in Schedule 7 of
this Agreement (“Distributor”) and is effective as of the Effective Time
(as defined below).


 


WHEREAS, the board of
directors of Abbott (as defined below) has determined that it is appropriate
and advisable to separate its core hospital products business from Abbott’s
other businesses by contributing the core hospital products business and
related assets to Hospira and distributing the shares of Hospira to the
shareholders of Abbott, so that the core hospital products business will be
owned by Hospira;


 


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


 


WHEREAS, Hospira and
Distributor have agreed that, until the transfer of the marketing
authorizations for the Products to Hospira is accomplished and Hospira
establishes its own operations in the Territory, Distributor shall promote,
market, distribute and sell the Products within the Territory for Hospira, but
without assuming the commercial risks associated with such activities, and
Hospira shall assume the commercial risks associated with Distributor’s
promotional, marketing, distributing and selling activities.


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein, the
Parties hereto agree as follows:


 

















 


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


 


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


 


“Abbott” means Abbott
Laboratories, an Illinois corporation.


 


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


 


“Activities” means
any Additional Activities, Distributor Activities, Enhanced Activities or New
Activities.


 


“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 in
which the Distributor maintains its principal place of business with the amount
of such adjustment to be determined by Abbott no later than August 31,
2004 by requesting from each of three (3) major money center commercial banks
an estimate of inflation rates for 2005 for such country and averaging the
responses received from such banks; provided that if not all banks
respond for such country, then the average shall be taken using the data
provided by the responding banks.


 


“Adjusted Plan for 2006”
means the Adjusted Plan for 2005 adjusted for expected inflation for 2006 in
the country in which the Distributor maintains its principal place of business
with the amount of such adjustment to be determined by Abbott no later than
August 31, 2005 by requesting from each of three (3) major money center
commercial banks an estimate of inflation rates for 2006 for such country and
averaging the responses received from such banks; provided that if not
all banks respond for such country, then the average shall be taken using the
data provided by the responding banks.


 


“Agreement” means
this Transition Marketing and Distribution Services Agreement and each of the
Schedules hereto.


 


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


 


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of
a particular date, calculated in accordance with Distributor’s policies and
procedures 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” has
the meaning set forth in Section 7.1 of this Agreement.


 


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


 


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


 


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


 


“Distribution Date”
means the date determined by the board of directors of Abbott, in its sole
discretion, 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” has
the 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 discounted
value of the Net Book Value of the Factored Assets, the Book Value of the
Factored Liabilities and the Book Value of the intercompany trade payables
related to the Products outstanding as of the Closing Date, calculated
utilizing the Local Interest Rate for the period from the Closing Date through
the remaining portion of the remittance terms as set forth on


 


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


 


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


 


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


 


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


 


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


 


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


 


“Local Interest Rate”
means the prevailing local per annum interest rate for ninety (90) day
borrowings as in effect on the Distribution Date in the country in which
Distributor maintains its principal place of business, determined on a basis
consistent with Abbott’s treasury policies and procedures as of the
Distribution 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. Commercial
Liabilities held by Distributor as of a particular date.


 


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


 


“New Activities” has
the 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 the
parties to this Agreement.


 


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


 


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


 


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


 


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


 


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


 


“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.


 


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


 


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


 


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


 


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


 


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2.             DISTRIBUTION


 


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


 


2.2           Territory.  Hospira hereby appoints
Distributor, and Distributor hereby accepts such appointment, to promote,
market, distribute and sell the Products within the country or countries listed
on Schedule 3  of this
Agreement (the “Territory”) in its own name, acting as Hospira’s
non-exclusive distributor.


 


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


 


2.4           Independent Contractor. 
Each of the Parties hereby acknowledges that the Parties are separate
entities, each of which has entered into this Agreement for independent
business reasons.  The relationship of
the Parties hereunder is that of independent contractors and nothing contained
herein shall be deemed to create a joint venture, partnership or any other
relationship.


 


2.5           Performance by Subsidiaries.  All
rights and obligations of a Party under or pursuant to this Agreement may be
exercised, satisfied, met or fulfilled, in whole or in part, by such Party
directly or, in the case of Distributor, by any Abbott Subsidiary and, in the
case of Hospira, by any Hospira Subsidiary.


 


3.             PURCHASE OF PRODUCTS AND
TERMS OF SALE


 


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


 


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Distributor and
Hospira.  Any provisions in any
preprinted order form or order document used by Hospira or Distributor are
explicitly rejected and shall be null and void and of no force or effect.


 


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


 


(b)              Distributor shall pay Hospira the amounts
described in Schedule 4 of this Agreement under the terms and
conditions described therein.


 


(c)              Hospira hereby authorizes Distributor to
offset the amounts due from Hospira to Distributor under subsection (a)
from the amounts due from Distributor to Hospira under
subsection (b).  If the difference
resulting from such offset is a positive number, Distributor shall pay such
difference to Hospira in accordance with Schedule 4 of this
Agreement.  If such difference is a
negative number, Hospira shall pay such difference to Distributor in accordance
with Schedule 4 of this Agreement.


 


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


 


4.             DISTRIBUTOR’S ACTIVITIES


 


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


 


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


 


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


 


(c)           Hospira shall reimburse Distributor for one hundred five percent (105%)
of any incremental costs incurred by Distributor in providing any Additional
Activities or Enhanced Activities, including all fixed costs and employment and
employee-related costs incurred to provide such Additional Activities or
Enhanced Activities (notwithstanding anything to the contrary in the Employee
Benefits Agreement between Abbott and Hospira).  Prior to hiring or assigning any incremental employee to provide
such Additional Activities or Enhanced Activities or incurring any fixed costs
in connection with such Additional Activities or Enhanced Activities
Distributor shall notify Hospira in writing of its intention to do so, and
Hospira shall have fifteen (15) days to either provide the written agreement of
its Vice President and General Manager, International Commercial Operations or
his designee to the hiring or assignment of such incremental employee or
incurring any such fixed costs or to withdraw or modify its request for
Enhanced Activities such that, in the reasonable judgment of  Distributor, no additional employee is
required and no fixed cost will be incurred. 
Distributor shall have no liability for failing to perform any
Additional Activities that are the subject of any such notice for any period
prior to its receipt of Hospira’s written agreement to the hiring or assignment
of 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 the
Enhanced Activities to be performed by an incremental employee or as to which
such fixed costs relate, and Distributor shall have no obligation to perform
the Additional Activities for which such incremental employees were to be hired
or assigned or fixed costs were to be incurred.


 


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


 


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providing such New
Activities; provided, however, that Distributor shall have no
obligation 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 partial
payment of any invoice covering both Hospira Products and other products of
Distributor, the amount collected by Distributor from the customer shall be
allocated to Hospira in the same proportion that the amount of the invoice for
the Products bears to the total amount of the invoice.  Any interest recovered or out-of-pocket
expenses incurred in connection with the collection of an invoice covering both
Products and other products of Distributor shall be allocated to Hospira in the
same proportion that the amount of the invoice for the Products bears to the
total invoice.


 


4.3           Disclaimer.  (a)  EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY
ACKNOWLEDGES AND AGREES THAT ALL SERVICES AND PRODUCTS ARE PROVIDED ON AN
“AS-IS” BASIS AND DISTRIBUTOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND
HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR
ANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER; and
(b) notwithstanding anything to the contrary herein: (i) Distributor shall not
be required to perform or cause to be performed any Activities or any other
service or activity for the benefit of any Party other than Hospira and any
Hospira Subsidiary; and (ii) Distributor shall have no obligation to Hospira
for any Liabilities relating to, arising out of, or resulting from the
Activities except to the extent that such Liabilities relate to, arise out of
or 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 during
the Term it shall adhere to the guidelines for Distributor Activities set forth
in Schedule 5 of  this
Agreement (the “Guidelines”).


 


5.             INDEMNIFICATION


 


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


 


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


 


6.             EFFECTIVE TIME AND TERM


 


6.1           Term.  This Agreement shall become
effective at the Effective Time and shall remain in effect for a term expiring
on the second anniversary of the Distribution Date unless: (i) terminated by
Hospira on an earlier date by initiating the Local Closing in accordance with
the provisions of Section 6.2; or (ii) extended due to an event of
force 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 during
the Term by giving Distributor at least ninety (90) days’ prior written notice
of such Local Closing (the “Notice of Local Closing”).  Hospira shall identify the name and address
of 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 and
Section 8.12 of this Agreement, any outstanding payment obligations
under Article 3 or Section 4.1(c) and any outstanding
payment, invoicing and wind down obligations under Article 7 shall
survive the termination of this Agreement and shall remain in full force and
effect thereafter.


 


7.             PURCHASE OF ASSETS AND
ASSUMPTION OF LIABILITIES


 


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


 


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


 


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


 


7.3           Asset Purchase and Liability Assumption.  On the
Closing Date, Distributor shall sell, transfer, convey and deliver to
Purchaser, and Purchaser shall purchase and accept delivery of, all Delayed
Ex-U.S. Commercial Assets owned by Distributor (other than Factored Assets) as
of the Closing Date and Purchaser shall accept, assume and agree faithfully to
perform, discharge and fulfill the Delayed Ex-U.S. Commercial Liabilities of
Distributor (other than Factored Liabilities and intercompany trade payables
related to the Products) outstanding as of the Closing Date in exchange for a
purchase 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 of
the Closing Date; plus (ii) the Factoring Adjustment (the “Purchase Price”).
 The Purchase Price shall be paid in
accordance 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 “Closing
Report”) 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 the
Local Closing which shall contain the information regarding such Delayed
Ex-U.S. Commercial Assets and Delayed Ex-U.S. Commercial Liabilities, and be in
such format or formats, as is available from the books and records of
Distributor; (ii) the Net Book Value of all Delayed Ex-U.S. Commercial Assets
transferred by Distributor to Purchaser at the Local Closing and the Book Value
of all Delayed Ex-U.S. Commercial Liabilities assumed by Purchaser at the Local
Closing; (iii) the Net Book Value of the Factored Assets and the Book Value of
the Factored Liabilities; (iv) the Book Value of the intercompany trade
payables related to the Products; (v) the amount of the Factoring Adjustment;
and (vi) the Purchase Price; and (b) provide an invoice to Purchaser stating
the Purchase Price plus any applicable value added Taxes, sales Taxes or
transfer Taxes or any similar Taxes payable by Purchaser in accordance with the
provisions of applicable law.  Purchaser
shall pay the amount so invoiced within thirty (30) days from the date of
Distributor’s invoice.  The Purchase
Price plus any applicable Taxes shall be paid in the local currency of the
country in which Distributor has its principal place of business in accordance
with payment instructions to be provided by Distributor.


 


7.5           Failure to Close. 
Subject to the provisions of Section 8.1, if Hospira does
not provide Notice of Local Closing at least ninety (90) days prior to the end
of 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 to
Hospira with respect to the Delayed Ex-U.S. Commercial Assets and Delayed
Ex-U.S. Commercial Liabilities in the Territory;


 


(b)           Within twenty (20) days following the end of the Term, Distributor
shall provide an invoice to Hospira indicating the Purchase Price calculated as
if the Local Closing had taken place as of the end of the Term and Hospira
shall 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 all
Activities related to the Products, except to the extent necessary for
Distributor to satisfy its remaining contracts, commitments or other legal
obligations in the Territory related to the Products; and


 


(d)           Subject to the provisions of Section 7.5(c), Distributor
shall proceed to liquidate all the Delayed Ex-U.S. Commercial Assets existing
as of the


 


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end of the Term and pay all
Delayed Ex-U.S. Commercial Liabilities outstanding as of the end of the Term
and, following the completion of the wind down activities, to remit the
proceeds from such wind down to Hospira, net of Delayed Ex-U.S. Commercial
Liabilities and the costs incurred by Distributor in connection with such wind
down activities.  Any proceeds resulting
from such wind down activities shall be remitted to Hospira in the local
currency of the country in which Distributor has its principal place of business
in accordance with payment instructions to be provided by Hospira.


 


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


 


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


 


8.             MISCELLANEOUS.


 


8.1           Force Majeure. 
Neither Party shall be deemed in default of this Agreement to the extent
that any delay or failure in the performance of its obligations under this
Agreement results from any cause beyond its reasonable control and without its
fault 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, labor
problems or unavailability of parts, or, in the case of computer systems, any
failure in electrical or air conditioning equipment.  In the event of any such excused delay, the time for performance
shall be extended for a period equal to the time lost by reason of the delay.  Notwithstanding the foregoing, the Local
Closing shall not be delayed pursuant to this Section beyond the date that
is 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 which
shall be considered one and the same agreement.


 


8.3           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.


 


8.4           Dispute Resolution.  Any
controversy, dispute or claim (whether arising in contract, tort or otherwise)
arising out of or relating in any way to this Agreement shall be resolved
pursuant to the procedures set forth in Schedule 6 of this
Agreement.  Unless otherwise agreed in
writing, the Distributor shall continue to perform Activities in accordance
with the provisions of this Agreement during the course of any dispute, but in
no event shall such Activities extend beyond the second anniversary of the
Distribution 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 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.


 


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8.6           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 (2) days after deposit with a
private express mail courier, in any such case addressed as set forth on Schedule 7
of this Agreement.  Any Party may, by
notice to the other Party, change the address to which such notices are to be
given.


 


8.7           Severability.  If
any provision of this Agreement or the application thereof to any entity or
person or circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to any entity or person 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 affected, impaired
or invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby 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.


 


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


 


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


 


8.10         Amendments.  No provisions of this
Agreement shall be deemed amended, supplemented or modified unless such
amendment, supplement or modification is in writing and signed by the
authorized representative of both Parties. 
No provisions of this Agreement shall be deemed waived unless such
waiver is in writing and signed by the authorized representative of the Party
against whom it is sought to be enforced.


 


8.11         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


 


15

















 


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


 


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


 


*     *    
*     *


 


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


 


	
  [Distributor]

  	
   

  	
  Hospira,
  Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  
	
  Title:

  	
   

  	
  Title:

  



 


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