Exhibit 10.2


 


TAX SHARING AGREEMENT


 


between


 


 


ABBOTT LABORATORIES


 


on behalf of itself


 


and the ABBOTT AFFILIATES


 


and


 


 


HOSPIRA, INC.


 


on behalf of itself


 


and the HOSPIRA AFFILIATES


 

















 


TAX SHARING AGREEMENT


 


This Tax
Sharing Agreement (the “Agreement”) is entered into as of the
                  
day of
                  ,
2004, between Abbott Laboratories (“Abbott”), an Illinois corporation, and
Hospira, Inc. (“Hospira”), a Delaware corporation.


 


R E C I T A L S:


 


WHEREAS, the
board of directors of Abbott has determined that it is appropriate and
advisable to: (i) separate Abbott’s core hospital business from Abbott’s
remaining businesses (the “Separation”), which will include the transfer of the
assets (including interests in intangible assets and stock of subsidiaries)
used in connection with the core hospital business to Hospira (the
“Contribution”); and (ii) following the Separation, make a distribution, on a
pro rata basis, to holders of common shares, without par value, of Abbott
(together with the associated preferred stock purchase rights) of all of the
outstanding shares of common stock, par value $0.01 per share, of Hospira
(together with the associated preferred stock purchase rights), owned by Abbott
(the “Distribution”) (the date of such Distribution, the “Distribution Date”);
and


 


WHEREAS,
Abbott and Hospira intend that the Contribution and Distribution and certain
other transactions effected as part of the Separation qualify as Tax-free under
Sections 355, 361, and 368 of the Internal Revenue Code of 1986, as amended
(the “Code”);


 


WHEREAS, as of
the date hereof, Abbott is the common parent of an affiliated group of domestic
corporations, including Hospira, that has elected to file consolidated U.S.
federal income Tax Returns and, as a result of the Distribution, neither
Hospira nor any of its Affiliates will be a member of such group after the
close of the Distribution Date;


 


WHEREAS,
Abbott and Hospira desire to allocate the responsibilities for various Taxes
and to provide for certain additional Tax matters;


 


NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants
contained in this Agreement, Abbott and Hospira (each on behalf of itself, each
of its Affiliates as of the Effective Time, and its future Affiliates) hereby
agree as follows:


 


Article I.                                               DEFINITIONS


 


Section 1.01                                Definitions.  Reference is made to Section 5.13 regarding
the interpretation of certain words and phrases used in this Agreement.  In addition, for the purpose of this
Agreement, the following terms shall have the meanings set forth below.


 


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


 


“Abbott Group” means Abbott and
all Affiliates of Abbott other than any member of the Hospira Group.


 


“Affiliate” means any entity
that is directly or indirectly under the Control of the entity in question.


 


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“After-Tax Amount” means, with
respect to any payment under this Agreement, an additional amount necessary to
reflect the increase in Tax that would result from the receipt or accrual of
any payment, using the maximum statutory rate (or rates, in the case of an item
that affects more than one Tax) applicable to the recipient of such payment for
the relevant Tax periods, whether or not an actual increase occurs, and
reflecting any Tax savings available to the recipient.


 


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


 


“Bahamian Distribution” has the
meaning ascribed to such term in Section 3.01(a).


 


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


 


“Closing Date” means, for any
country, the date the TMDS Agreement for that country terminates.


 


“Code” has the meaning ascribed
to such term in the second WHEREAS clause hereof.


 


“Contribution” has the meaning
ascribed to such term in the first WHEREAS clause hereof.


 


“Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through ownership of voting
securities, by contract or otherwise.


 


“Corresponding Portion of the
Tax Detriment” means the product of the Tax Detriment and a fraction the
numerator of which is the amount of the related Tax Benefit for a taxable
period and the denominator of which is the sum of the related Tax Benefits for
all of the relevant taxable periods.


 


“Covered Transaction Tax” has
the meaning ascribed to such term in Section 3.01(a).


 


“Determination” means (i) with respect
to U.S. federal income Tax, a “determination” as defined in Section 1313(a) of
the Code or execution of an Internal Revenue Service Form 870AD and, with
respect to a Tax other than U.S. federal income Tax, any final determination of
liability for such Tax that, under applicable law, is not subject to further
appeal, review, or modification through proceedings or otherwise, (ii) the
expiration of a statute of limitations for making an assessment or filing a
claim of refund, or (iii) the payment of, or incurring liability for, Tax with
respect to which the party paying or incurring such Tax determines that no
action should be taken to recoup such payment or contest such liability.


 


“Distribution” has the meaning
ascribed to such term in the first WHEREAS clause hereof.


 


“Distribution Agreement” means
the Separation and Distribution Agreement entered into by and between Abbott
and Hospira as the same may be amended.


 


“Distribution Date” has the
meaning ascribed to such term in the first WHEREAS clause hereof.


 


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“EBA” means the Employee
Benefits Agreement entered into by and between Abbott and Hospira as the same
may be amended.


 


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


 


“Employment Taxes” means
withholding, payroll, social security, workers compensation, unemployment,
disability, and other similar taxes 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 New York
Stock Exchange, Inc. and any similar self-regulatory body under applicable
securities laws or regulations.


 


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


 


“Hospira Group” means Hospira
and all Affiliates of Hospira.


 


“ICO Agreement” means the
International Commercial Operations Agreement entered into by and between
Abbott and Hospira as the same may be amended.


 


“Indemnified Party” has the
meaning ascribed to such term in Section 5.17(a).


 


“Indemnifying Party” has the
meaning ascribed to such term in Section 5.17(a).


 


“Internal Distribution” has the
meaning ascribed to such term in Section 3.01(b).


 


“IRS” means the United States
Internal Revenue Service.


 


“Local Closing” means the
transactions that occur on the Closing Date.


 


“Parties” means the parties to
this Agreement.


 


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


 


“Post-Distribution Period”
means any taxable period or portion of a taxable period beginning after the
Distribution Date.


 


“Pre-Distribution Period” means
any taxable period or portion of a taxable period ending on or before the
Distribution Date.


 


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


 


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“Private Letter Ruling” means the
private letter ruling issued by the IRS on December 4, 2003, in connection with
the Contribution, Distribution, and related transactions, including the request
for such rulings together with all supplemental filings and exhibits thereto
submitted to the IRS on behalf of Abbott or its subsidiaries in connection
therewith.


 


“Puerto Rican Ruling” means the
ruling, if any, issued by the Treasury Department of Puerto Rico pursuant to
the ruling request  filed on behalf of
Abbott, Abbott Laboratories de Puerto Rico, Inc., Hospira, and Hospira Puerto
Rico LLC on March 19, 2004 with respect to the Puerto Rican Transaction,
together with all supplemental filings and exhibits thereto.


 


“Puerto Rican Transaction” has
the meaning ascribed to such term in Section 3.01(a).


 


“Remitting Party” has the
meaning ascribed to such term in Section 5.17(b).


 


“Responsible Party” has the
meaning ascribed to such term in Section 5.17(b).


 


“Section 355(e) Event” has the
meaning ascribed to such term in Section 3.01(b).


 


“Separation” has the meaning
ascribed to such term in the first WHEREAS clause hereof.


 


“Specified  Action” has the meaning ascribed to such
term in Section 4.02(b).


 


“Straddle Period” means any
taxable period beginning on or before the Distribution Date and ending after
the Distribution Date.


 


“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.


 


“Tax Benefit” means the
reduction in Tax that should result from any item of loss, deduction, or credit
(or any other item), whether or not an actual reduction in Tax occurs,
including any interest with respect thereto or interest that would have been
payable but for such item, net of any Tax on such interest.  For purposes of calculating the amount of
any Tax Benefit, the maximum statutory rate (or rates, in the case of an item
that affects more than one Tax) applicable to each item of income, gain, loss,
deduction, or credit (or any other item) shall be used.


 


4

















 


“Tax Contest” means an audit,
review, examination, or any other administrative or judicial proceeding with
the purpose or effect of redetermining any Tax (including any administrative or
judicial review of any claim for refund).


 


“Tax Detriment” means the
increase in Tax that should result from any item of income or gain (or any
other item), whether or not an actual increase in Tax occurs, including any
interest with respect thereto, net of any Tax savings attributable to such
interest.  For purposes of calculating
the amount of any Tax Detriment, the maximum statutory rate (or rates, in the
case of an item that affects more than one Tax) applicable to each item of
income, gain, loss, deduction, or credit (or any other item) shall be used.


 


“Tax Package” means the
information and documents in the possession of the Hospira Group that are
reasonably necessary for the preparation of a Tax Return of the Abbott Group
with respect to a Pre-Distribution Period, assembled in all material respects
in accordance with the standards that Abbott has heretofore applied to  divisions and Affiliates.


 


“Tax Records” means all records
relating to any Tax, including without limitation  Tax Returns, journal vouchers, cash vouchers, general ledgers,
material contracts, Tax Return workpapers and schedules, appraisal reports,
authorizations for expenditures, and documents relating to rulings or other
Determinations by any Tax Authority.


 


“Tax Return” means any report
of Tax due, any claims for refund of Tax paid, any information return with
respect to Tax, any election made with respect to Tax, or any other similar
report, statement, declaration, or document required to be filed under the Code
or other law with respect to Tax, including any attachments, exhibits, or other
materials submitted with any of the foregoing, and including any amendments or
supplements to any of the foregoing for any taxpayer or consolidated, combined,
or unitary group of taxpayers.


 


“TMDS Agreement” means any of
the Transition Marketing and Distribution Services Agreements by and between
Hospira and an Abbott Affiliate as the same may be amended.


 


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


 


“Transition Period Tax” has the
meaning ascribed to such term in Section 3.02.


 


“U.S. Transferred Employee” has
the meaning set forth in the Employee Benefits Agreement by and between Abbott
and Hospira.


 


Article II.                                           RESPONSIBILITY
FOR TAX


 


Section 2.01                                Responsibility
for Tax.


 


(a)               Except as specifically provided in any
of the agreements contemplated by the Distribution Agreement, including the EBA
with respect to Employment Taxes, Abbott shall be responsible for, and shall
indemnify and hold harmless the Hospira Group from any liability for (i) any
Tax imposed by any Tax Authority on Abbott or an Abbott


 


5

















 


Affiliate, including Hospira and all Hospira Affiliates, for any
Pre-Distribution Period, except any Covered Transaction Tax for which Hospira
is responsible under Section 3.01(b); and (ii) any Tax imposed by any Tax
Authority on any member of the Abbott Group for any Post-Distribution Period,
except any Transition Period Tax for which Hospira is responsible under Section
3.02.


 


(b)              Except as specifically provided in any of
the agreements contemplated by the Distribution Agreement, including the EBA
with respect to Employment Taxes, Hospira shall be responsible for, and shall
indemnify and hold harmless the Abbott Group from any liability for (i) any Tax
imposed by any Tax Authority on Hospira or a Hospira Affiliate for any
Post-Distribution Period; (ii) any Covered Transaction Tax for which Hospira is
responsible under Section 3.01(b); and (iii) any Transition Period Tax for
which Hospira is responsible under Section 3.02.


 


(c)               The responsibility for any Tax incurred
in a Straddle Period by any member of the Hospira Group shall be allocated
between the Pre-Distribution Period and the Post-Distribution Period as if such
member closed its financial accounting records as of the Effective Time and
determined the Tax attributable to the Pre-Distribution Period by applying the
method of tax accounting that has historically been used for the business of
such member.


 


Section 2.02                                Refunds,
Tax Benefits, and Other Allocations


 


(a)               Refunds and Carrybacks.


 


(i)             Abbott Refunds.  Except as provided in Section 2.02(a)(iv) below, Abbott shall be
entitled to all refunds (including refunds paid by means of a credit against
other or future Tax liabilities) and credits with respect to any Tax for which
Abbott is responsible under Section 2.01(a).


 


(ii)          Hospira Refunds.  Hospira shall be entitled to all refunds (including refunds paid
by means of a credit against other or future Tax liabilities) and credits with
respect to any Tax for which Hospira is responsible under Section 2.01(b).


 


(iii)       Payment of Refunds.  Except as provided in Section 2.02(a)(iv), Hospira shall forward
to Abbott, or reimburse Abbott for, any refunds due Abbott (pursuant to the
terms of this Section 2.02(a)) after receipt thereof (less any Tax Detriment
attributable to such refunds), and Abbott shall forward to Hospira, or
reimburse Hospira for, any refunds due Hospira (pursuant to the terms of this
Section 2.02(a)) after receipt thereof (less any Tax Detriment attributable to
such refunds).  In the case of a refund
received in the form of a credit against other or future Tax liabilities,
reimbursement with respect to such refund shall be due in each case on the due
date for payment of the Tax against which such refund has been credited.  Any payment required to be made pursuant to
this Section 2.02(a)(iii) shall be made within thirty (30) days of the receipt
of the refund.  If Abbott reasonably so
requests, Hospira, at Abbott’s expense, shall file for and pursue any refund to
which Abbott is entitled under this Section 2.02(a).  If Hospira reasonably so


 


6

















 


requests, Abbott, at Hospira’s expense, shall file for and pursue any
refund to which Hospira is entitled under this Section 2.02(a).  The Party making a payment pursuant to this
Section 2.02(a)(iii) must deliver with the payment a statement describing  in reasonable detail the basis for the
calculation of the amount being paid.


 


(iv)      Carrybacks.


 


1)              The
Hospira Group shall be entitled to any refund of Abbott’s Tax for a
Pre-Distribution Period resulting from carrying back any item of loss,
deduction or credit that arises in any Post-Distribution Period of Hospira only
to the extent that (A) Abbott has no item of loss, deduction, or credit that
can be carried back to such taxable period and (B) such carryback does not have
a material adverse impact on Abbott, as reasonably determined by Abbott.  If Abbott 
receives any such refund, it shall pay the portion thereof to which
Hospira is entitled within thirty (30) days of receipt of such refund if
Hospira’s portion is $100 million or less. 
If Hospira’s portion is more than $100 million, then Abbott shall pay
the initial $100 million within thirty (30) days of receipt of such refund, and
any amounts in excess of $100 million shall be paid within thirty (30) days of
the later of (C) a Determination with respect to Abbott’s Tax for such
Pre-Distribution Period or (D) a Determination with respect to Hospira’s Tax
for the Post-Distribution Period that gave rise to the refund received by
Abbott; provided, however, that
if Hospira provides Abbott with a letter of credit in a form reasonably
acceptable to Abbott and issued by a major money center commercial bank
reasonably acceptable to Abbott not expiring before the later of clause (C) or
(D) of this Section 2.02(a)(iv)(1), then Abbott shall pay to Hospira that
portion of the refund covered by the letter of credit no later than thirty (30)
days after receipt of the refund or of the letter of credit, whichever is
later.


 


2)              If
Hospira has a loss or other Tax attribute for any Post-Distribution Period that
is to be carried back to any Pre-Distribution Period, Hospira shall notify
Abbott that such item should be carried back. 
Such notification shall include a description in reasonable detail of
the grounds for the refund and the amount thereof, and a certification by an
appropriate officer of Hospira setting forth Hospira’s belief, based on a
thorough examination of the facts and Tax law relating to the Tax treatment of
such item, that the Tax treatment of such item is supported by “substantial
authority” within the meaning of Section 6662 of the Code (and the Treasury
Regulations thereunder) or, where applicable, any analogous provision of state
or local law.  Abbott, at Hospira’s
expense, shall cooperate with Hospira in connection with the filing and
processing of any Hospira carryback and shall provide Hospira with copies of
all correspondence related thereto.


 


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3)              If
Abbott pays any amount to Hospira under Section 2.02(a)(iv)(1) and, as a result
of a subsequent Determination, Hospira is not entitled to all or any part of
such amount, Abbott shall notify Hospira of the amount to be repaid to Abbott
and provide a description in reasonable detail of the manner in which such
amount was calculated.  Hospira shall
pay such amount to Abbott within thirty (30) days of such notification.


 


4)              Any
payment required to be made by Abbott pursuant to this Section 2.02(a)(iv)
shall bear interest at the Prime Rate plus two percent from the date a refund
is received by Abbott.  Any payment
required to be made by Hospira pursuant to this Section 2.02(a)(iv) shall bear
interest at the Prime Rate plus two percent beginning thirty (30) days after
Abbott notifies Hospira of the amount to be repaid.  Such interest shall be paid at the same time as the payment to
which it relates.


 


(b)              Effect of Audit Adjustments.


 


Notwithstanding Section 2.01 —


 


(i)             Payments by Hospira to Abbott.  Except as provided in Sections 3.01(b)
and  3.02, if as a result of a
Determination, any adjustment shall be made to any Tax Return relating, in
whole or in part, to Tax for which any member of the Abbott Group is responsible,
and if such adjustment results in both (x) a Tax Detriment to any member of the
Abbott Group for any taxable period and (y) a Tax Benefit to any member of the
Hospira Group for any Post-Distribution Period, then Hospira shall pay to
Abbott an amount equal to the lesser of the Tax Benefit for each taxable period
and the Corresponding Portion of the Tax Detriment.


 


(ii)          Payments by Abbott to Hospira.  If as a result of a Determination, any
adjustment shall be made to any Tax Return relating, in whole or in part, to
Tax for which the Hospira Group is responsible, and if such adjustment results
in both (x) a Tax Detriment to any member of the Hospira Group for any
Post-Distribution Period and (y) a Tax Benefit to any member of the Abbott
Group for any taxable period, then Abbott shall pay to Hospira an amount equal
to the lesser of the Tax Benefit for such taxable period and the Corresponding
Portion of the Tax Detriment.


 


(iii)       Timing of Payments.  Any payment required to be made pursuant to this Section 2.02(b),
shall be made the later of (x) thirty (30) days after the Determination that
results in such payment pursuant to this Section 2.02(b) and (y) the due date
of the Tax Return that includes the Tax Benefit that gives rise to the
requirement for such payment.


 


8

















 


(c)               Other Allocations


 


(i)             Research and Experimentation Credit Base
Period. Abbott shall reasonably make the allocations to Hospira required under
Section 41(f)(3) of the Code.  Hospira
agrees that it shall not file any Tax Return that is inconsistent with the
amount of qualified research expenditures and gross receipts allocated to it by
Abbott.


 


(ii)          Allocation of Earnings and Profits.  The allocation of earnings and profits
between Abbott and Hospira shall be reasonably determined by Abbott pursuant to
Section 312(h) of the Code and the Treasury Regulations thereunder.  A preliminary allocation of earnings and
profits through December 31, 2002, shall be provided no later than forty-five
(45) days after Abbott receives the allocation from the public accounting firm
that prepares such allocation, but no later than September 30, 2004.  The allocation of earnings and profits from
January 1, 2003, through the Distribution Date shall be provided no later than
December 31, 2005.


 


(iii)       Revised Allocations.  The allocations made under this Section 2.02(c) shall be revised
by Abbott to reflect each subsequent Determination that affects such
allocations for any Pre-Distribution Period. 
Each revised calculation shall be provided to Hospira within 120 days of
the Determination to which the revision relates.


 


(iv)      Review of Allocations.  Hospira shall have the right to review the accuracy, but not the
methodology, of any allocation made under this Section 2.02(c).  Hospira shall notify Abbott of any
disagreement within forty-five (45) days of being notified of any
allocation.  Any dispute shall be
resolved pursuant to the procedures provided by this Agreement.


 


Section 2.03                                Option
Deductions.


 


(a)               Except as provided in Section 2.03(b),
upon the exercise of any option to purchase Abbott stock, Abbott shall claim
any Tax deduction attributable to such exercise on its Tax Returns and Hospira
shall not claim such deduction on its Tax Returns.  On the exercise of any option to purchase Hospira stock, Hospira
shall claim any Tax deduction attributable to such exercise on its Tax Returns
and Abbott shall not claim such deduction on its Tax Returns.


 


(b)              Abbott and Hospira agree to file all Tax
Returns on the basis that (i) any Abbott restricted stock and (ii) any option
to purchase Abbott stock held by an employee of Hospira was granted to such
individual by Abbott in connection with the performance of services for
Abbott.  To the extent any Tax deduction
claimed by Abbott attributable to the exercise of such options is disallowed to
Abbott, and a Tax Authority makes a Determination that Hospira is entitled to
such deduction, Abbott shall notify Hospira of the receipt of such
Determination, promptly after receipt thereof, and Hospira shall pay to Abbott
the lesser of the amount of Hospira’s Tax Benefit and the amount of Abbott’s
corresponding Tax Detriment in accordance with Section 2.02(b).  To the extent any Tax deduction claimed by
Hospira attributable to the exercise of an option to purchase Hospira stock is


 


9

















 


disallowed to Hospira, and a Tax Authority makes a Determination that
Abbott is entitled to such deduction, Hospira shall notify Abbott of the
receipt of such Determination, promptly after receipt thereof, and Abbott shall
pay to Hospira the lesser of the amount of Abbott’s Tax Benefit and the amount
of Hospira’s corresponding Tax Detriment in accordance with Section
2.02(b).  The provisions of this Section
2.03 shall apply mutatis mutandis
to restricted shares, disqualifying dispositions to which Section 421(c) of the
Code applies, and other equity based compensation.


 


Section 2.04                                Tax
Returns.


 


(a)               Abbott shall prepare and timely file all
Tax Returns for Pre-Distribution Periods for Abbott and all of its Affiliates,
including Hospira and all of its Affiliates, and all Tax Returns for Straddle
Periods for all members of the Abbott Group. 
In connection with each federal, state, local, and foreign Tax Return
that is required under this Agreement to be filed by Abbott for taxable periods
ending in 2004, Hospira shall provide Abbott, no later than November 30, 2004,
with a Tax Package for the purpose of preparing such Tax Return.  Hospira shall provide a supplemental Tax
Package with respect to each such Tax Return, if necessary, no later than
January 31, 2005, and Hospira shall timely furnish to Abbott additional Tax
information and documents as Abbott may reasonably request.  With respect to any information required to
be provided by Hospira pursuant to this Section 2.04(a), (i) Abbott shall
utilize such information in the preparation of the appropriate Tax Returns as
provided by Hospira, except to the extent (a) Hospira provides its prior
written consent to change any such information, or (b) Abbott determines in
good faith that such information is inaccurate or incomplete in a material
respect, and (ii) Hospira agrees to indemnify and hold harmless Abbott and its
Affiliates from and against any cost, fine, penalty, or other expense of any
kind attributable to the misconduct or negligence of Hospira or any of its
Affiliates in supplying Abbott with inaccurate or incomplete information.  An appropriate officer of Hospira shall
provide a certification that, to such officer’s best knowledge and belief, any
and all information provided pursuant to this Section 2.04(a) is accurate and
complete.  If Hospira fails to provide
any information required by this Section 2.04(a) within the time period
specified, Abbott may file the applicable Tax Returns based on the information
available at the time such Tax Returns are due and Hospira shall indemnify and
hold harmless Abbott and its Affiliates from Taxes or other costs imposed on
Abbott or any of its Affiliates but only to the extent resulting from Hospira’s
failure to provide such information in a timely manner.  In addition, Hospira shall provide Abbott
with all documents and information, and make available employees and officers
of Hospira and Hospira Affiliates as Abbott reasonably requests to prepare and
file any Tax Return for any Pre-Distribution Period (including any claims for
refunds described in Section 2.02(a)) or to conduct any Tax Contest with
respect to any such Tax Return.


 


(b)              Hospira shall prepare and timely file all
Tax Returns for Straddle Periods for all members of the Hospira Group.  If Abbott is responsible under Section
2.01(a) for a portion of any Tax reported on a Straddle Period Tax Return for
any member of the Hospira Group, Hospira shall provide Abbott with a copy of
such Tax Return at least thirty (30) days prior to its due date.  Abbott shall notify Hospira of any
disagreement within 20 days of Abbott’s receipt of such Tax Return.  Any dispute shall be resolved pursuant to
the


 


10

















 


procedures provided by this Agreement.


 


(c)               Hospira shall not file (or allow any
member of the Hospira Group to file) any amended Tax Return for any
Pre-Distribution Period.


 


(d)              Abbott shall  provide Hospira with notice of any Tax election that Abbott
intends to file for any member of the Hospira Group on any Tax Return for any
Pre-Distribution Period within forty-five (45) days before such Tax Return will
be filed.  Hospira shall have the right
to review such elections and request, within 15 days of such notice, that an
alternative election be made.   If
Abbott reasonably determines that such alternative election will not result in
any increased Tax liability or reduced Tax attribute of Abbott or any Abbott
Affiliate, Abbott shall comply with such request.


 


Section 2.05                                Cooperation,
Exchange of Information, and Tax Records.


 


(a)               Cooperation and Exchange of
Information.  Each Party shall provide
to the other such cooperation and information as reasonably may be requested in
connection with (i) filing any Tax Return, amended return or claim for refund,
(ii) determining a liability for Tax or a right to a refund of Tax, or (iii)
participating in or conducting any Tax Contest.  Such cooperation and information shall include providing copies
of relevant Tax Records.  Each Party
shall devote the personnel and resources necessary in order to carry out this
Section 2.05(a) and shall make its employees available on a mutually convenient
basis to provide explanations of any documents or information provided
hereunder.  Each Party shall carry out
its responsibilities under this Section 2.05(a) charging to the other only the
out-of-pocket costs actually incurred. 
Any information obtained under this Section 2.05(a) shall be kept 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 Effective Time, except as otherwise may be necessary in
connection with the filing of Tax Returns or claims for refund or in conducting
an audit or other proceeding.  Hospira
shall execute all necessary or appropriate forms, including powers of attorney,
reasonably requested by Abbott in connection with any action taken by Abbott
pursuant to this Agreement.


 


(b)              Record Retention.  Each of Abbott and Hospira shall retain all
Tax Records in its possession as of the Effective Time relating to any
Pre-Distribution Period that are relevant to the other Party for purposes
described in Section 2.05(a) until such time as the other Party shall consent
to the disposition of such Tax Records, which consent shall not be withheld
unreasonably.


 


Section 2.06                                Tax
Contests.


 


(a)               Notice. 
Each Party shall provide prompt notice to the other Party of any pending
or threatened Tax audit, assessment, or proceeding, or other Tax Contest, of
which it becomes aware, related to Tax for which it is indemnified by the other
Party hereunder.  Such notice shall
contain factual information (to the extent known) describing any


 


11

















 


asserted Tax liability in reasonable detail and shall be accompanied by
copies of any notice and other documents received from any Tax Authority with
respect to any such matters.  If an
Indemnified Party has knowledge of an asserted Tax liability with respect to a
matter for which it is to be indemnified hereunder and such Party fails to give
the Indemnifying Party prompt notice of such asserted Tax liability, then (i)
if the Indemnifying Party is precluded from contesting the asserted Tax
liability in any forum as a result of the failure to give prompt notice, the
Indemnifying Party shall have no obligation to indemnify the Indemnified Party
for any Tax resulting from such assertion of Tax liability, and (ii) if the
Indemnifying Party is not precluded from contesting the asserted Tax liability
in any forum, but such failure to give prompt notice results in a monetary
detriment to the Indemnifying Party, then any amount that the Indemnifying
Party is otherwise required to pay the Indemnified Party pursuant to this
Agreement shall be reduced by the amount of such detriment.


 


(b)              Control of Tax Contests.


 


(i)             Hospira. 
Hospira shall have full responsibility and discretion in conducting,
including settling, any Tax Contest involving a Tax for which it is responsible
under Section 2.01(b), except for any Tax Contest involving any Covered
Transaction Tax for which Hospira is responsible under Section 3.01(b) and any
Transition Period Tax for which Hospira is responsible under Section 3.02.


 


(ii)          Abbott. 
Abbott shall have full responsibility and discretion in conducting,
including settling, any Tax Contest involving (x) any Tax for which it is
responsible under Section 2.01(a), (y) any Covered Transaction Tax for which
Hospira is responsible under Section 3.01(b), except as provided in paragraph
(iii), below and (z) any Transition Period Tax for which Hospira is responsible
under Section 3.02.  Abbott shall
consult in good faith with Hospira in connection with any Tax Contest described
in clauses (y) or (z) of this Section 2.06(b)(ii).


 


(iii)       Covered Transaction Taxes.  Hospira shall have the right to participate
in the conduct of a Tax Contest related to any Covered Transaction Tax as a
result of the application of Section 355(e) of the Code if, and only if, (x)
Hospira has acknowledged in writing its liability for such Covered Transaction
Tax, (y) Hospira shall have provided Abbott with a letter of credit in a form
reasonably acceptable to Abbott and issued by a major money center commercial
bank reasonably acceptable to Abbott, not expiring before a Determination has
occurred with respect to Abbott’s Tax for the Post-Distribution Period that
gave rise to the Covered Transaction Tax at issue, and in an amount equal to
the maximum amount of Covered Transaction Tax at issue in the Tax Contest and
(z) no Tax Return of any member of the Abbott Group with respect to which any
member of the Abbott Group may reasonably be viewed as having an actual or
potential liability for any Tax not indemnified against by Hospira is held open
as a result of such Tax Contest.  Abbott
shall not settle any Tax Contest described in this paragraph (iii) without the
consent of Hospira, which consent shall not be unreasonably withheld.


 


12

















 


Article III.                                       TRANSACTIONS
TAX


 


Section 3.01                                Transactions
Tax.


 


(a)               General.  Except as otherwise provided in Section 3.01(b), Abbott shall be
responsible for, and shall indemnify and hold harmless the Hospira Group from
any and all (i) liabilities sustained by Abbott or Hospira as a result of the
Distribution failing to qualify as Tax-free to the Abbott shareholders pursuant
to Section 355(a) of the Code, and (ii) federal, state, local, and foreign Tax
imposed by any Tax Authority on Abbott or any Abbott Affiliate as a result of
(w) the failure of any of the transactions described in the Private Letter
Ruling to be treated as provided in such ruling; (x) the failure of the
distribution of the stock of Hospira Ltd., a Bahamas corporation, (the
“Bahamian Distribution”) to qualify for Tax-free treatment under Sections 355
and 361 of the Code; (y) the failure of any of the transactions described in
the Puerto Rican Ruling (the “Puerto Rican Transaction”) to be treated as
provided in such ruling; and (z) the inclusion, or taking into account, of any
income or gain by Abbott or its Affiliates (including any member of the Hospira
Group) under Treasury Regulations Section 1.1502-13 or 1.1502-19 (or any
corresponding provisions of other applicable Tax laws) as a result of the Distribution
(collectively “Covered Transaction Tax”).


 


(b)              Inconsistent Acts and Events.  Hospira shall be responsible for, and shall
indemnify and hold harmless the Abbott Group from and against any liability
for, any Covered Transaction Tax (including without limitation reasonable
attorney fees and other costs incurred in connection therewith) resulting from
(i) any breach by any member of the Hospira Group of any of the representations
or covenants under Article IV hereof, (ii) any Specified  Action performed by any member of the
Hospira Group (whether or not Section 4.02(e) is complied with), and (iii) any
Section 355(e) Event with respect to Hospira (whether or not such Section
355(e) Event is caused by a Specified 
Action).  A Section 355(e) Event
with respect to Hospira means any event, involving the stock of Hospira or a
Hospira Affiliate or assets of any member of the Hospira Group, that causes the
Distribution, the distribution described in the Private Letter Ruling by Abbott
Laboratories, Inc. of the stock of Hospira Worldwide, Inc. (the “Internal
Distribution”), or the Bahamian Distribution to be a taxable event to any
member of the Abbott Group as the result of the application of Section 355(e)
of the Code.


 


Section 3.02                                Transition
Period Tax.  Notwithstanding Section
2.02(b)(i), if, as a result of a Determination, any member of the Abbott Group
incurs a Tax Detriment for a Post-Distribution Period with respect to any
transaction undertaken pursuant to any of the TMDS Agreements or the ICO
Agreement, other than a transaction to effect a Local Closing, Hospira shall be
responsible for, and shall indemnify and hold harmless the Abbott Group from
and against any liability for, an amount equal to 50 percent of the sum of such
Tax Detriment, reasonable attorney fees, and other costs incurred with respect
thereto (the “Transition Period Tax”) whether or not any Tax Benefit results to
any member of the Hospira Group; provided, however, if, at any time there
is: (i) a merger or consolidation of Hospira; (ii) the sale of all or
substantially all of the assets of Hospira; or (iii) the acquisition by a Third
Party of at least 30 percent of the combined voting power of the
then-outstanding securities of Hospira entitled to vote generally in the


 


13

















 


election of directors, Hospira
shall indemnify Abbott for 100 percent of any Transition Period Tax with
respect to which a Determination occurs after the occurrence of the event
described in clauses (i) through (iii) above, unless (a) the resulting,
surviving, or transferee Person described above in clauses (i) through (iii)
above assumes all the obligations of Hospira hereunder by operation of law or
pursuant to an agreement and (b) Abbott consents to such assumption, (which
consent shall not be withheld unreasonably). 
It shall not be deemed to be unreasonable for Abbott to withhold consent
on the basis that the Person proposing to make such assumption is a competitor
of Abbott.


 


Article IV.                                      REPRESENTATIONS
AND COVENANTS


 


Section 4.01                                Representations.


 


(a)               Abbott represents that, as of the date
of this Agreement, neither it nor any of its Affiliates knows of any fact that
would jeopardize the Tax treatment of the transactions provided by the Private
Letter Ruling or the Puerto Rican Ruling, or that otherwise would result in a
Covered Transaction Tax.


 


(b)              Hospira represents that, as of the date
of this Agreement, neither it nor any of its Affiliates knows of any fact that
would jeopardize the Tax treatment of the transactions provided by the Private
Letter Ruling or the Puerto Rican Ruling, or that otherwise would result in a
Covered Transaction Tax.


 


(c)               Abbott represents that, as of the date
of this Agreement, neither it nor any of its Affiliates has any plan or
intention to take any action that is inconsistent with the Tax treatment of the
transactions provided by the Private Letter Ruling or the Puerto Rican Ruling,
or that otherwise would result in a Covered Transaction Tax.


 


(d)              Hospira represents that, as of the date of
this Agreement, neither it nor any of its Affiliates has any plan or intention
to take any action that is inconsistent with the Tax treatment of the
transactions provided by the Private Letter Ruling or the Puerto Rican Ruling,
or that otherwise would result in a Covered Transaction Tax.


 


(e)               Hospira represents that, as of the date
of this Agreement, neither it nor any of its Affiliates has entered into any
agreement, understanding, arrangement, or substantial negotiation with respect
to any transaction or event (including stock issuances, option grants, capital
contributions, acquisitions, and changes in the voting power of any of its
stock), that may cause Section 355(e) of the Code to apply to the Distribution,
the Internal Distribution, or the Bahamian Distribution.


 


(f)                 Abbott represents that, as of the date
of this Agreement, neither it nor any member of the Abbott Group has entered
into any agreement, understanding, arrangement, or substantial negotiation with
respect to any transaction or event (including stock issuances, option grants,
capital contributions, acquisitions, and changes in the voting power of any of
its stock), that may cause Section 355(e) of the Code to apply to the
Distribution, the Internal Distribution, or the Bahamian Distribution.


 


14

















 


Section 4.02                                Covenants.


 


(a)               Successor Employer.  In connection with the Distribution, Abbott
and Hospira covenant and agree to treat Hospira as a “successor employer”
pursuant to the alternate procedures in Revenue Procedure 96-60 for payroll Tax
reporting purposes.  Hospira shall
assume reporting responsibilities for filing Forms W-2 and other payroll Tax
forms for the U.S. Transferred Employees for the entire 2004 calendar
year.  Abbott covenants and agrees to
cooperate in the administration and implementation of the alternate procedures
for successor payroll processing provided by Revenue Procedure 96-60 and not to
report such compensation on any basis inconsistent therewith to any
governmental authority.  Hospira
covenants and agrees to indemnify and reimburse Abbott for any costs of
responding to any notices received from any governmental authority, the costs
of defending the position that Hospira qualifies as a “successor employer”
before any governmental agency, and any additional Taxes, fines, penalties,
and/or interest imposed on Abbott if such position ultimately is found to be
incorrect.


 


(b)              Conduct. 
Hospira covenants and agrees that it shall not take, and it shall cause
its Affiliates to refrain from taking, any action that reasonably may be
expected to result in any increased Tax liability or reduced Tax attribute of
any member of the Abbott Group.  This
includes taking any action that is inconsistent with the Tax treatment of the
transactions provided by the Private Letter Ruling or the Puerto Rican Ruling
(any such action, including any action referred to in Section 4.02(b)(i)
through (iii), is referred to in this Agreement as a “Specified  Action”). 
Without limiting the foregoing:


 


(i)             Specified Actions.  Any time before the second anniversary of
the Distribution Date, Hospira shall not (and shall cause its Affiliates to
not) (A) liquidate, merge, or consolidate with or into any corporation that was
not already wholly owned by Hospira or by a wholly owned subsidiary of Hospira
prior to such transaction; (B) issue any of its capital stock in one or more
transactions, other than (i) issuances to employees, directors, or independent
contractors in connection with the performance of services for Hospira (that
are not excessive by reference to the services performed) which issuances
either (x) are with respect to the exercise of options of Hospira that are
substituted for Abbott options or (y) satisfy the requirements of Treasury
Regulations Section 1.355-7T(d)(6) to not be treated for purposes of Section
355(e) of the Code to be part of a plan or series of related transactions that
includes the Distribution, the Internal Distribution, or the Bahamian
Distribution, or (ii) issuances of stock to a retirement plan qualified under
Section 401(a) or 403(a) of the Code in a transaction that satisfies the
requirements of Treasury Regulations Section 1.355-7T(d)(7); (C) redeem,
purchase, or otherwise reacquire any of its capital stock in one or more transactions;
(D) change the voting rights of any of its stock; (E) issue any options to
acquire Hospira Shares other than options that satisfy the requirements of
Treasury Regulations Section 1.355-7T(e)(3)(ii); (F) sell, exchange,
distribute, or otherwise dispose of, other than in the ordinary course of
business, all or a substantial part of the assets of any of the trades or
businesses relied on to satisfy Section 355(b) of the Code; or (G) discontinue
or cause to be discontinued the active conduct of any of the trades or
businesses relied on to satisfy Section


 


15

















 


355(b) of the Code. 
Notwithstanding the foregoing, clauses (A) through (E) of this Section
4.02(b)(i) shall not apply unless there are transactions described in such
clauses any time before the second anniversary of the Distribution Date that
result in one or more Persons acquiring directly or indirectly stock
representing, in the aggregate, 25 percent or greater interest in Hospira (as
defined in Sections 355(d)(4) and 355(e) of the Code).


 


(ii)          No Inconsistent Actions.  Regardless of any change in circumstances,
Hospira covenants and agrees that it shall not take any action (and it shall
cause its Affiliates to refrain from taking any action) that is inconsistent
with any factual statements or representations in the Private Letter Ruling or
the Puerto Rican Ruling on or before the second anniversary of the Distribution
Date other than as permitted in this Section 4.02.  For this purpose an action is considered inconsistent with a
representation if the representation states that there is no plan or intention
to take such action.


 


(iii)       Section 355(e). 
Without in any manner limiting paragraph (i) or (ii) of Section 4.02(b),
Hospira covenants and agrees that, through the second anniversary of the
Distribution Date, it shall refrain from entering into (and it shall cause its
Affiliates to refrain from entering into) any agreement, understanding,
arrangement, or substantial negotiation with respect to any transaction or
event (including stock issuances, option grants, capital contributions,
acquisitions, or changes in the voting power of any of its stock), that could
reasonably be expected to cause Section 355(e) of the Code to apply to the
Distribution, the Internal Distribution, or the Bahamian Distribution.


 


(c)               Amended or Supplemental Rulings.  Hospira covenants and agrees that it shall
refrain from filing, and it shall cause its Affiliates to refrain from filing,
a request for any amendment or supplement to the Private Letter Ruling or the
Puerto Rican Ruling subsequent to the Distribution Date without the consent of
Abbott, which consent shall not be withheld unreasonably.


 


(d)              Tax Returns.  Each of Abbott and Hospira covenants and agrees that it shall
refrain from taking, and it shall cause its Affiliates to refrain from taking,
any position on a Tax Return that is inconsistent with (i) the Tax treatment of
the transactions provided by the Private Letter Ruling, (ii) the Contribution
qualifying for Tax-free treatment under Sections 361 and 368 of the Code, (iii)
the Tax treatment of the transactions provided by the Puerto Rican Ruling, (iv)
the payment obligations of the TMDS Agreements and the ICO Agreement, (v) the
allocation of the benefits and burdens of Hospira assets and liabilities
pursuant to Section 2.03 of the Distribution Agreement and Sections 2.2 and 3.1
of the ICO Agreement, or (vi) the documents effecting any transaction
undertaken in connection with the Separation that is not addressed by the
Private Letter Ruling.


 


(e)               Exception.  Notwithstanding the foregoing, Hospira shall be permitted to take
an action inconsistent with Section 4.02(b), if, prior to taking such action,
Hospira provides notification to Abbott of its plans with respect to such
action and promptly responds to any inquiries by Abbott following such
notification, and (unless Abbott agrees otherwise


 


16

















 


in writing) either:


 


(i)             In the case of the Distribution or the
Internal Distribution, Hospira obtains a supplemental ruling with respect to
the action from the Internal Revenue Service that is reasonably satisfactory to
Abbott (except that Hospira shall not submit any supplemental ruling request if
Abbott determines in good faith that filing such request could have a
materially adverse effect on Abbott), on the basis of facts and representations
consistent with the facts at the time of such action, that such action will not
affect the Tax treatment of the transactions provided by the Private Letter
Ruling,


 


(ii)          In case of the Distribution, the Internal
Distribution, or the Bahamian Distribution, Hospira obtains an opinion,
reasonably acceptable to Abbott, of an independent nationally recognized Tax
counsel, reasonably acceptable to Abbott, on the basis of facts and
representations consistent with the facts at the time of such action, that such
action will not affect the Tax treatment of the transactions provided by the
Private Letter Ruling or the intended Tax treatment of the Bahamian
Distribution, or


 


(iii)       In case of the Puerto Rican Transaction, Hospira
obtains:


 


(a)          a supplemental ruling with respect to the
action from the Puerto Rican Tax Authority that is reasonably satisfactory to
Abbott (except that Hospira shall not submit any supplemental ruling request if
Abbott determines in good faith that filing such request could have a
materially adverse effect on Abbott or any of its Affiliates), or


 


(b)         an opinion, reasonably acceptable to Abbott,
of an independent Tax counsel, reasonably acceptable to Abbott,


 


on the basis of facts and representations consistent with the facts at
the time of such action, that such action will not affect the Tax treatment of
the transactions provided by the Puerto Rican Ruling.


 


Notwithstanding anything to the contrary in
this Agreement, Hospira shall be responsible for, and shall indemnify Abbott
and hold Abbott harmless from, any Covered Transaction Tax resulting from a
Specified  Action of Hospira or any of
Hospira’s Affiliates, regardless of whether the exception of this Section
4.02(e) is satisfied with respect to such act.


 


Section 4.03                                No
Continuing Liability for Former Members.


 


(a)               Abbott Affiliates.  If an Abbott Affiliate ceases to be a member
of the Abbott Group as a result of a sale or exchange of all of the stock of
such member, other than an exchange for which the consideration received by
Abbott is the stock of Abbott or an Abbott Affiliate, the departing Abbott
Affiliate shall be released from its obligations under this Agreement upon its
departure from the Abbott Group.


 


17

















 


(b)              Hospira Affiliates.  If a Hospira Affiliate ceases to be a member
of the Hospira Group as a result of a sale or exchange of all of the stock of
such member, other than an exchange for which the consideration received by
Hospira is the stock of Hospira or a Hospira Affiliate, the departing Hospira
Affiliate shall be released from its obligations under this Agreement upon its
departure from the Hospira Group; provided, however, that no member of the
Hospira Group shall be released from any obligations under Section 2.01(b)(ii)
hereof unless approved in writing by Abbott, which approval shall not be
unreasonably withheld.


 


Article V.                                          MISCELLANEOUS
PROVISIONS


 


Section 5.01                                Counterparts;
Entire Agreement; Corporate Power; Facsimile Signatures.


 


(a)               Counterparts.  This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement.


 


(b)              Entire Agreement.  This Agreement and the exhibits hereto
contain the entire agreement between the Parties with respect to the subject
matter hereof, 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.  Notwithstanding any other provisions in the
Distribution Agreement or any other agreement entered into in connection with the
Distribution (except the EBA) 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 Distribution Agreement or any other agreement entered into in
connection with the Distribution (except the EBA), the provisions of this
Agreement shall control.


 


(c)               Corporate Power.  Abbott represents on behalf of itself and,
to the extent applicable, each Abbott Affiliate and Hospira represents on
behalf of itself and, to the extent applicable, each Hospira Affiliate as
follows:


 


(i)             each such Person has the requisite
corporate or other power and authority and has taken all corporate or other
action necessary in order to execute, deliver and perform this Agreement to
which it is a Party and to consummate the transactions contemplated hereby and
thereby; and


 


(ii)          this Agreement to which it is a Party has
been duly executed and delivered by it and constitutes a valid and binding
agreement of it enforceable in accordance with the terms thereof.


 


(d)              Facsimile Signatures.  Each Party acknowledges that it and the
other Party may execute this Agreement or amendment hereto by facsimile, stamp
or mechanical signature.  Each Party
expressly adopts and confirms each such facsimile, stamp or mechanical
signature made in its respective name as if it were a manual signature, agrees
that it shall not assert that any such signature is not adequate to bind such
Party to the same extent as if it were signed manually and agrees that at the
reasonable request of the other Party at any time it


 


18

















 


shall as promptly as reasonably practicable cause this Agreement or any
amendment hereto to be manually executed (any such execution to be as of the
date of the initial date thereof).


 


Section 5.02                                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.


 


Section 5.03                                Assignability.  This Agreement shall be binding upon and
inure to the benefit of the Parties, respectively, 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 in whole in connection with a merger or
consolidation or the sale of all or substantially all of the assets of a Party
so long as the resulting, surviving or transferee Person assumes all the
obligations of the relevant Party thereto by operation of law or pursuant to an
agreement in form and substance reasonably satisfactory to the other Party.


 


Section 5.04                                Third
Party Beneficiaries.  The provisions of
this Agreement are solely for the benefit of the Parties and their respective
Affiliates, after giving effect to the Distribution, and are not intended to
confer upon any Person except the Parties and their respective Affiliates,
after giving effect to the Distribution, any rights or remedies hereunder; and
(b) there are no other third party beneficiaries of this Agreement and this
Agreement shall not provide any other third party with any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.


 


Section 5.05                                Notice.  All notices or other communications under
this Agreement must be in writing and shall be deemed to be duly given: (a)
when delivered in person; (b) 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 (c) 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, IL  60064-6020

Facsimile: (847) 938-6277

Attention: General Counsel


 


19

















 


With a copy
to:


 


Abbott
Laboratories

100 Abbott Park Road

D-367 AP6D

Abbott Park, IL  60064-6057

Facsimile: 

Attention: Vice President-Tax


 


If to Hospira,
to:


 


Hospira, Inc.

Legal Department

Dept. NLEG

275 N. Field Drive

P.O. Box 5045

Lake Forest, Illinois 60045-5045

Facsimile: (224) 212-3312

Attention: General Counsel


 


With a copy to:


 


Hospira, Inc.

275 N. Field Drive

Lake Forest, Illinois 60045

Facsimile:

Attention: Vice President – Tax.


 


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


 


Section 5.06                                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 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 a suitable and equitable
provision to effect the original intent of the Parties.


 


Section 5.07                                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 Governmental Authority, embargoes, epidemics, war, riots,
insurrections, acts of terrorism, fires, explosions, earthquakes, floods,
unusually severe weather conditions, labor


 


20

















 


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.


 


Section 5.08                                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.


 


Section 5.09                                Survival
of Covenants.  The covenants, releases,
indemnities, representations and warranties contained in this Agreement, and
liability for the breach of any obligations contained herein, shall survive the
Effective Time and shall remain in full force and effect thereafter.


 


Section 5.10                                Affiliates.  Abbott shall cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations
set forth herein to be performed by any member of the Abbott Group and Hospira
shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements and obligations set forth herein to be performed by any
member of the Hospira Group.


 


Section 5.11                                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.


 


Section 5.12                                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 an 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.


 


Section 5.13                                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 Exhibits hereto) and not to any particular
provision of this Agreement.  Article,
Section, and Exhibit references are to the Articles, Sections, and Exhibits to
this Agreement unless otherwise specified. 
Unless otherwise stated, all references to any agreement shall be deemed
to include the exhibits 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.  References to the
performance, discharge or fulfillment of any liability in accordance with its
terms shall have meaning only to the extent such liability has terms.


 


Section 5.14                                Advisors.  Abbott may select any Tax Counsel in
connection with the Distribution, which may include Mayer, Brown, Rowe &
Maw LLP, Baker & McKenzie and McDermott, Will & Emery.  Hospira acknowledges, for itself and each
Hospira Affiliate, that


 


21

















 


Mayer, Brown, Rowe & Maw
LLP, Baker & McKenzie and McDermott, Will & Emery have acted only in
the capacity as counsel to Abbott, and not as counsel to Hospira or any Hospira
Affiliate, in connection with this Agreement and the provisions contemplated
herein.


 


Section 5.15                                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.


 


Section 5.16                                Dispute
Resolution.  Any and all disputes
between Abbott and Hospira arising out of any provision of this Agreement shall
be resolved through the procedures provided in the Master ADR Agreement
attached hereto as Exhibit 1.


 


Section 5.17                                Payments.


 


(a)               Procedure for Requesting and Making
Indemnification Payments.  On the
occurrence of an event for which a Party is entitled to receive indemnification
hereunder, such Party (the “Indemnified Party”) shall send the other Party (the
“Indemnifying Party”) an invoice requesting payment accompanied by a statement
describing in reasonable detail the amount owed and the particulars relating
thereto.  Unless a provision in this
Agreement specifically provides a different time for payment, the Indemnifying
Party shall pay to the Indemnified Party any payment it owes to the Indemnified
Party under this Agreement within thirty (30) days after the receipt of the
invoice for such payment.


 


(b)              Procedure for Making Other Payments.  If a Party is responsible for any Tax under
Section 2.01 (the “Responsible Party”) and such Tax must be remitted by the
other Party (the “Remitting Party”), the Remitting Party shall send the
Responsible Party an invoice requesting payment accompanied by a statement describing
in reasonable detail the amount owed and the particulars relating thereto.  Unless a provision in this Agreement
specifically provides a different time for payment, the Responsible Party shall
pay to the Remitting Party any payment it owes to the Remitting Party under
this Agreement no later than thirty (30) days before the Remitting Party must
remit the Tax to the appropriate Tax Authority.


 


(c)               Character of Payments.  For Tax purposes, the Parties agree to treat
any payment pursuant to this Agreement in the same manner as a capital
contribution by Abbott to Hospira or an adjustment to the Contribution made in
the last taxable period beginning before the Distribution and, accordingly, as
not includible in the gross income of the recipient and not deductible by the
payor.  If pursuant to a Determination
it is determined that the receipt or accrual of any payment made under this
Agreement is subject to any Tax, the Party making such payment shall be
responsible for the After-Tax Amount with respect to such payment.  The failure of a Party to include an
After-Tax Amount in a demand for payment pursuant to this Agreement shall not
be deemed a waiver by the Party of its right to receive an After-Tax Amount
with respect to such payment.


 


(d)              Interest on Late Payments.  Unless a provision in this Agreement
specifically provides otherwise, any payment required to be made pursuant to
this Agreement that is not made on or before the due date for such payment
shall bear interest from the date after the due


 


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date to and including the date of payment at the Prime Rate plus two
percent.  Such interest shall be paid at
the same time as the payment to which it relates.  Any interest payable pursuant to this paragraph that is not paid
when due shall bear interest at the Prime Rate plus two percent.


 


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IN WITNESS WHEREOF,
the Parties have executed and delivered this Agreement as of the day and year
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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