Document:

Exhibit 10.7

 

EXECUTION VERSION

 

LUXEMBOURG INTERNATIONAL COMMERCIAL OPERATIONS AGREEMENT

 

BY AND BETWEEN

 

ABBOTT INVESTMENTS LUXEMBOURG S.à r.l.

 

AND

 

ABBVIE INVESTMENTS S.à r.l.

 

DATED AS OF DECEMBER 31, 2012

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
2
    
	
 
    	
 
    	
 
    
	
Section 1.01.
    	
Definitions
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II INTERNATIONAL   TRANSITION PERIOD
    	
8
    
	
 
    	
 
    	
 
    
	
Section 2.01.
    	
Legal Title
    	
8
    
	
Section 2.02.
    	
Treatment of Deferred AbbVie Local Businesses
    	
8
    
	
Section 2.03.
    	
Operation of Deferred AbbVie Local Businesses
    	
9
    
	
Section 2.04.
    	
Deferred AbbVie Business Report
    	
9
    
	
Section 2.05.
    	
Aggregate Net Amount
    	
10
    
	
Section 2.06.
    	
Services Affiliates
    	
10
    
	
Section 2.07.
    	
Reporting; Disputes; Aggregate Net Amount Payment Mechanics
    	
11
    
	
Section 2.08.
    	
Late Payments
    	
15
    
	
Section 2.09.
    	
Accounting Calendar
    	
15
    
	
Section 2.10.
    	
Disclaimer of Representations and Warranties
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE III TRANSFER OF   DEFERRED ABBVIE LOCAL BUSINESSES
    	
17
    
	
 
    	
 
    	
 
    
	
Section 3.01.
    	
General
    	
17
    
	
Section 3.02.
    	
Transfer to AbbVie Local Entity
    	
17
    
	
Section 3.03.
    	
Transfer to Distributor
    	
18
    
	
Section 3.04.
    	
Deferred AbbVie Balance Sheet
    	
20
    
	
Section 3.05.
    	
Sale or Wind-Down
    	
20
    
	
Section 3.06.
    	
Proceeds from Local Closing
    	
21
    
	
Section 3.07.
    	
Local Income Taxes
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE IV TERM
    	
22
    
	
 
    	
 
    	
 
    
	
Section 4.01.
    	
Term
    	
22
    
	
Section 4.02.
    	
Survival
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE V DISPUTE RESOLUTION
    	
23
    
	
 
    	
 
    	
 
    
	
Section 5.01.
    	
Dispute Resolution
    	
23
    
	
Section 5.02.
    	
Continuation of Commitments
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE VI MISCELLANEOUS
    	
23
    
	
 
    	
 
    	
 
    
	
Section 6.01.
    	
Confidentiality
    	
23
    

 

i

 

	
Section 6.02.
    	
Protective Arrangements
    	
24
    
	
Section 6.03.
    	
Counterparts; Entire Agreement; Corporate Power; Facsimile   Signatures
    	
25
    
	
Section 6.04.
    	
Governing Law
    	
26
    
	
Section 6.05.
    	
Assignability
    	
26
    
	
Section 6.06.
    	
Third Party Beneficiaries
    	
26
    
	
Section 6.07.
    	
Notices
    	
26
    
	
Section 6.08.
    	
Severability
    	
27
    
	
Section 6.09.
    	
Force Majeure
    	
28
    
	
Section 6.10.
    	
No Set Off
    	
28
    
	
Section 6.11.
    	
Responsibility for Expenses
    	
28
    
	
Section 6.12.
    	
Headings
    	
28
    
	
Section 6.13.
    	
Waivers of Default
    	
28
    
	
Section 6.14.
    	
Amendments
    	
29
    
	
Section 6.15.
    	
Interpretation
    	
29
    
	
Section 6.16.
    	
Public Announcements
    	
29
    
	
Section 6.17.
    	
Specific Performance
    	
29
    
	
Section 6.18.
    	
Mutual Drafting
    	
29
    

 

ii

 

THIS LUXEMBOURG INTERNATIONAL COMMERCIAL OPERATIONS AGREEMENT, dated as of December 31, 2012, is by and between Abbott Investments Luxembourg S.à r.l., a company organized and existing under the laws of Luxembourg (“Abbott Luxembourg”) and AbbVie Investments S.à r.l., a company organized and existing under the laws of Luxembourg (“AbbVie Luxembourg”).

 

RECITALS:

 

WHEREAS, Abbott Laboratories, an Illinois corporation (“Abbott”), announced its plan to separate (the “Separation”) into two publicly traded companies, one in diversified medical products and the other in research-based pharmaceuticals. The diversified medical products company shall consist of Abbott and its Affiliates’ (as defined herein) existing diversified medical products portfolio, including its branded generic pharmaceutical, devices, diagnostic and nutritional businesses, and shall retain the Abbott name. The research-based pharmaceutical company shall include Abbott and its Affiliates’ current portfolio of proprietary pharmaceuticals and biologics and shall bear the new name “AbbVie”;

 

WHEREAS, in connection with the Separation, Abbott and AbbVie Inc., a Delaware corporation (“AbbVie”), have entered into a Separation and Distribution Agreement (as may be amended from time to time, the “Separation and Distribution Agreement”) to govern the overall terms of the Separation;

 

WHEREAS, Abbott Luxembourg is an indirect Subsidiary (as defined herein) of Abbott and the direct or indirect parent of each of the Abbott Subsidiaries (as defined herein) listed on Schedule 1.01(a) hereto (each, an “Abbott Local Entity”);

 

WHEREAS, as of the Effective Time (as defined herein), AbbVie Luxembourg shall be a Subsidiary of AbbVie;

 

WHEREAS, it is in the framework of the Separation that Abbott Luxembourg and AbbVie Luxembourg have entered into that certain Common Terms of Demerger, dated as of September 19, 2012 (the “Luxembourg Demerger Plan”), pursuant to which, among other things, the beneficial interest to the AbbVie Assets and the AbbVie Liabilities of the AbbVie Business (each as defined herein) conducted by the Abbott Local Entities has been demerged to AbbVie Luxembourg;

 

WHEREAS, pursuant to the terms of the Luxembourg Demerger Plan and in accordance with the terms of the Separation and Distribution Agreement, due to the requirements of applicable Laws, the need to obtain certain consents from local Governmental Authorities (as defined herein) or for other business reasons, Abbott Luxembourg and AbbVie Luxembourg have agreed (a) to defer until after the Distribution Date (as defined herein) the transfer of legal title to the Assets (as defined herein) and the assumption of the Liabilities (as defined herein) of each Deferred AbbVie Local Business (as defined herein) from the Abbott Local Entities to AbbVie Luxembourg or any AbbVie Local Entity (as defined herein) and (b) (i) to transfer, as of the effective time of the demerger pursuant to the Luxembourg Demerger Plan, beneficial title to all AbbVie Assets of each Abbott Local Entity, including the right to regularly receive the benefits with respect to each Deferred AbbVie Local Business earned by the Local Abbott

 

 

Entities, to AbbVie Luxembourg and (ii) that AbbVie Luxembourg shall assume the applicable Liabilities of each Abbott Local Entity as beneficial owner of each Deferred AbbVie Local Business;

 

WHEREAS, pursuant to the Luxembourg Demerger Plan, the consideration for the transfer of beneficial ownership of each Deferred AbbVie Local Business to AbbVie Luxembourg was satisfied by the issuance of shares by AbbVie Luxembourg to Abbott International Luxembourg S.à r.l as part of the demerger of Abbott Luxembourg;

 

WHEREAS, Abbott Luxembourg and AbbVie Luxembourg agree that the transfer of each Deferred AbbVie Local Business to the applicable AbbVie Local Entity or distributor shall not ultimately result in the payment of further consideration by AbbVie Luxembourg or the applicable AbbVie Local Entity as a consequence of the purchase price for each such Deferred AbbVie Local Business being reimbursed by Abbott Luxembourg to AbbVie Luxembourg in accordance with Section 3.06; and

 

WHEREAS, each of Abbott Luxembourg and AbbVie Luxembourg desires to describe these and certain other arrangements between Abbott Luxembourg and AbbVie Luxembourg during and at the conclusion of the International Operations Transition Period (as defined herein).

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement (as defined herein), the Parties (as defined herein) hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.                          Definitions. Reference is made to Section 6.15 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; provided that where such term is defined to have the meaning set forth in the Separation and Distribution Agreement and such definition includes the term “Party”, then “Party” as used in the definition of such term in the Separation and Distribution Agreement shall be construed to have the meaning set forth in this Agreement.

 

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

 

“Abbott Local Entity” has the meaning set forth in the Recitals.

 

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

 

“Abbott Mark-Up Amount” has the meaning set forth in Schedule 2.05(b).

 

“Abbott Subsidiary” means any Business Entity that is a Subsidiary (or a branch or representative office thereof) of Abbott prior to, at or after the Effective Time (other than AbbVie or an AbbVie Subsidiary).

 

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

 

“AbbVie Assets” has the meaning set forth in the Separation and Distribution Agreement.

 

“AbbVie Business” has the meaning set forth in the Separation and Distribution Agreement.

 

“AbbVie Business Expenses” has the meaning set forth in Section 2.06(a)(i).

 

“AbbVie Liabilities” has the meaning set forth in the Separation and Distribution Agreement.

 

“AbbVie Local Entity” means each AbbVie Subsidiary or designee that acquires legal title to any Assets or Liabilities of a Deferred AbbVie Local Business in accordance with the terms of this Agreement.

 

“AbbVie Logistics” means AbbVie Logistics B.V., a private company with limited liability, organized and existing under the laws of the Netherlands, having its corporate seat in Zwolle, the Netherlands, with its office address at Meeuwenlaan 4, 8011 BZ Zwolle, the Netherlands and registered with the Trade Register of the Chambers of Commerce under number 54910765.

 

“AbbVie Luxembourg” has the meaning set forth in the Preamble.

 

“AbbVie Pro Forma Balance Sheet” has the meaning set forth in the Separation and Distribution Agreement.

 

“AbbVie Subsidiary” means any Business Entity that is a Subsidiary (or branch or representative office thereof) of AbbVie prior to or after the Effective Time, including the Transferred Entities, which shall be deemed to have been AbbVie Subsidiaries at all times prior to, at and after the Effective Time.

 

“Accrued Taxes” has the meaning set forth in Schedule 2.05(b).

 

“Actual Tax Amount” has the meaning set forth in Schedule 2.05(b).

 

“Adjustment Dispute Notice” has the meaning set forth in Section 2.07(f)(ii)(2).

 

“Adjustment Notice” has the meaning set forth in Section 2.07(f)(i).

 

“Affiliate” has the meaning set forth in the Separation and Distribution Agreement.

 

“Aggregate AbbVie Business Expenses” has the meaning set forth in Schedule 2.05(b).

 

“Aggregate Mark-Up Fee” has the meaning set forth in Schedule 2.05(b).

 

“Aggregate Monthly Cash Decrease” has the meaning set forth in Schedule 2.05(b).

 

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“Aggregate Monthly Cash Increase” has the meaning set forth in Schedule 2.05(b).

 

“Aggregate Net Amount” has the meaning set forth in Schedule 2.05(b).

 

“Agreement” means this Luxembourg International Commercial Operations Agreement and each of the Schedules and Exhibits hereto.

 

“Assets” has the meaning set forth in the Separation and Distribution Agreement.

 

“Average Rate” means the exchange rate determined by taking the simple average of the prior month Book Rate and the current month Book Rate.

 

“Book Rate” means for any currency other than US Dollars, the official monthly rates used by Abbott for conversion of its monthly balance sheet. The Book Rate is determined by taking the foreign exchange rates from the Bloomberg screen at the second to last Business Day of each calendar month.  For the Euro, British Pound, Australian Dollar and New Zealand Dollar, the bid rate is used.  For all other currencies, the ask price is used.  If the exchange rates available locally are not reflected on the Bloomberg screen, Abbott may choose to approve a deviation allowing the country to report rates directly; provided that such deviations are signed and in place in accordance with the Abbott B.2.0 policy.

 

“Brazilian Local Entity” means Abbott Laboratorios do Brasil Ltda., a private company with limited liability, organized and existing under the laws of Brazil, with its registered office address at Rua Michigan, 735, Sao Paolo, Brazil 4566-905 and registered with the Brazilian Ministry of Revenue under CNPJ number 56.998.701/0001-16.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which Abbott shall be closed for business in accordance with Abbott’s internal accounting calendar.

 

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

 

“Change of Control” has the meaning set forth in the Separation and Distribution Agreement.

 

“Consents” means any consents, waivers or approvals from, or notification requirements to, any Third Parties.

 

“Conveyance and Assumption Instruments” has the meaning set forth in the Separation and Distribution Agreement.

 

“Conveyance Taxes” means all transfer, documentary, recording, sales, use, registration, stamp, value added, goods and services and other similar Taxes (including all applicable real estate transfer Taxes, but excluding any Taxes based on or attributable to income or capital gains), together with any notarial and registry fees and recording costs imposed by any Tax Authority or other Governmental Authority in connection with the transactions contemplated by this Agreement.

 

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“Deferred AbbVie Balance Sheet” has the meaning set forth in Section 3.04(a).

 

“Deferred AbbVie Business Report” has the meaning set forth in Section 2.04(a).

 

“Deferred AbbVie Local Business” means the AbbVie Business conducted by each Abbott Local Entity from the Effective Time until the consummation of the applicable Local Closing.

 

“Dispute” has the meaning set forth in Section 5.01.

 

“Dispute Notice” has the meaning set forth in Section 2.07(b)(ii).

 

“Distribution Date” has the meaning set forth in the Separation and Distribution Agreement.

 

“Effective Time” means 12:01 a.m. Eastern Time on the Distribution Date.

 

“Employment Taxes” means withholding, payroll, social security, workers’ compensation, unemployment, disability, and any similar tax imposed by any Tax Authority or social security 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.

 

“Exchange Rate” means the exchange rate between the applicable Local Currency and US Dollars as observed by Bloomberg (ask rate or, if the Local Currency is in Euros, bid rate) at 8:00a.m. Central Time Chicago on any given day.

 

“Ex-US Transition Services Agreement” has the meaning set forth in Schedule 2.05(b).

 

“Final Closing Date” has the meaning set forth in Section 4.01(a).

 

“Force Majeure” means, with respect to a Party, an event beyond the control of such Party (or any Person acting on its behalf), which by its nature could not reasonably have been foreseen by such Party (or such Person), or, if it could reasonably have been foreseen, was unavoidable, and includes acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities, other national or international calamities or acts of terrorism or failures of energy sources or distribution or transportation facilities.  Notwithstanding the foregoing, the receipt by a Party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such Party’s response thereto shall not be deemed an event of Force Majeure.

 

“GAAP” means U.S. generally accepted accounting principles as applied by Abbott.

 

“Governmental Authority” means any supranational, international, national, federal, state, provincial or local court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority, including the NYSE and any similar self-regulatory body under applicable securities Laws.

 

5

 

“Income Tax Benefit” means the amount of Taxes measured by income that would be reduced as a result of a loss incurred upon the consummation of a Local Closing, or of an increase in Tax basis resulting from a Local Closing, as determined in accordance with GAAP and the principles set forth in Section 3.07.

 

“Independent Accounting Firm” has the meaning set forth in Section 2.07(d).

 

“Information” has the meaning set forth in the Separation and Distribution Agreement.

 

“International Operations Transition Period” means the period commencing on the Effective Time and ending on the Final Closing Date (except as otherwise provided under Section 4.01(b)).

 

“Law” means any supranational, international, national, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income Tax treaty), license, permit, authorization, approval, Consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case enacted, promulgated issued or entered by a Governmental Authority.

 

“Liabilities” has the meaning set forth in the Separation and Distribution Agreement.

 

“Local Buy-Sell Entity” means each of the Abbott Local Entities that is not a Services Affiliate.

 

“Local Closing” has the meaning set forth in Section 3.01.

 

“Local Closing Date” has the meaning set forth in Section 3.01.

 

“Local Currency” has the meaning set forth in Section 3.02(c).

 

“Local Income Tax” has the meaning set forth in Section 3.07.

 

“Luxembourg Demerger Plan” has the meaning set forth in the Recitals.

 

“Mark-Up Fee” has the meaning set forth in Section 2.06(a)(ii).

 

“Monthly Cash Decrease”  has the meaning set forth in Schedule 2.05(b).

 

“Monthly Cash Increase” has the meaning set forth in Schedule 2.05(b).

 

“Notice” means any written notice, request demand or other communication specifically referencing this Agreement and given in accordance with Section 6.07.

 

“Net Proceeds” has the meaning set forth in Section 3.06(b).

 

“Parties” means the parties to this Agreement.

 

“Person” means: any (a) individual; (b) Business Entity; or (c) Governmental Authority.

 

6

 

“Personal Data” means data that can be used by itself or in combination with other available data to identify a specific individual.

 

“Prime Rate” has the meaning set forth in the Separation and Distribution Agreement.

 

“Report” has the meaning set forth in Section 2.07(a)(ii).

 

“Representative” has the meaning set forth in Section 6.01(a).

 

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

 

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

 

“Services Affiliate” means each of the Abbott Local Entities listed on Schedule 1.01(b).

 

“Stored Records” has the meaning set forth in the Separation and Distribution Agreement.

 

“Subsidiary” or “subsidiary” means, with respect to any Person, any Business Entity of which such Person: (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such Business Entity; (ii) the total combined equity interests; or (iii) the capital or profit interests, in the case of a partnership; or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

 

“Tax” means: (a) 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 (b) any Employment Tax.

 

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

 

“Tax Return” means any report of Tax due or similar report or document required to be filed under applicable Law with respect to any Tax for any taxpayer or consolidated, combined or unitary basis under applicable Law with the relevant Tax Authority.

 

“Tax Sharing Agreement” has the meaning set forth in the Separation and Distribution Agreement.

 

“Third Party” means any Person other than the Parties or any of their respective Subsidiaries.

 

7

 

“Transferred Entities” has the meaning set forth in the Separation and Distribution Agreement.

 

“Transition Committee” has the meaning set forth in the Separation and Distribution Agreement.

 

“Unresolved Disputes” has the meaning set forth in Section 2.07(d).

 

“Venezuelan Local Entity” means Abbott Laboratories C.A., a private company with limited liability, organized and existing under the laws of Venezuela, with its registered office address at Calle Los Laboratorios, Edificio Centro Gerencial Los Cortijos, Urbanización Los Cortijos de Lourdes, Caracas 1070, Venezuela, and registered with the First Commercial Registry of the Judicial Circuit of the former Federal District and Miranda State with the Taxpayer Registry Number (RIF) J-00083649-3.

 

ARTICLE II

 

INTERNATIONAL TRANSITION PERIOD

 

Section 2.01.                          Legal Title.  Legal title to all of the AbbVie Assets that are held as of the Effective Time by any Abbott Local Entity, and all of the AbbVie Liabilities of any Abbott Local Entity that are outstanding as of the Effective Time, shall remain with such Abbott Local Entity until the consummation of the applicable Local Closing pursuant to Article III, if any.

 

Section 2.02.                          Treatment of Deferred AbbVie Local Businesses.

 

(a)                                 From and after the Effective Time until the consummation of the applicable Local Closing pursuant to Article III: (a) the Deferred AbbVie Local Businesses shall be held by each Abbott Local Entity  on behalf of and for the benefit of AbbVie Luxembourg; (b) Abbott Luxembourg, an Abbott Local Entity or, where applicable, a designee shall pay, perform and discharge fully the Liabilities of the Deferred AbbVie Local Businesses; and (c) insofar as reasonably practicable and to the extent permitted by applicable Law, Abbott Luxembourg, an Abbott Local Entity or, where applicable, a designee shall manage and operate each Deferred AbbVie Local Business in accordance with this Agreement and take such other actions as may reasonably be requested by AbbVie Luxembourg so that all of the benefits and Liabilities attributable to the Deferred AbbVie Local Businesses, including use, risk of loss, potential for gain and dominion, and control and command over such Deferred AbbVie Local Businesses, shall inure from and after the Effective Time to AbbVie Luxembourg.

 

(b)                                 If, after giving effect to the transactions contemplated by this Agreement, the Parties determine that the intent of the Parties set forth in Section 2.02(a) has not been achieved, the Parties shall use their commercially reasonable efforts to mutually agree upon alternative arrangements to implement the purposes and intent of the Parties set forth in Section 2.02(a).

 

8

 

Section 2.03.                          Operation of Deferred AbbVie Local Businesses.

 

(a)                                 In furtherance of Section 2.02(a), Abbott Luxembourg shall use, or cause the applicable Abbott Local Entity to use, commercially reasonable efforts to manage and operate each Deferred AbbVie Local Business as may reasonably be requested by AbbVie Luxembourg from time to time. Unless otherwise instructed by AbbVie Luxembourg,  Abbott Luxembourg shall cause each Abbott Local Entity to operate the applicable Deferred AbbVie Local Business in a manner that is based on past practice and that is substantially similar in nature, quality and timeliness to the analogous operations conducted by the applicable Abbott Local Entity prior to the Effective Time. Abbott Luxembourg shall cause each Abbott Local Entity to perform its duties and responsibilities hereunder in good faith.

 

(b)                                 Nothing in this Agreement shall require Abbott Luxembourg to cause any Abbott Local Entity to operate any Deferred AbbVie Local Business to the extent the manner of such operations would constitute a violation of applicable Laws, the Abbott Code of Business Conduct or any existing Contract with a Third Party. If Abbott Luxembourg is or becomes aware of any such restriction on an Abbott Local Entity, Abbott Luxembourg shall use commercially reasonable efforts to promptly provide Notice of any such restriction to AbbVie Luxembourg.  The Parties agree to cooperate and use commercially reasonable efforts to obtain any necessary Consents required under any existing Contract with a Third Party to allow an Abbott Local Entity to operate the applicable Deferred AbbVie Local Business in accordance with the standards set forth in this Section 2.03. Any costs and expenses incurred by any Party in connection with obtaining any such Consent that is required to allow any Abbott Local Entity to operate any Deferred AbbVie Local Business shall be borne by AbbVie Luxembourg.  If the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Consent or the operation of a Deferred AbbVie Local Business by an Abbott Local Entity would constitute a violation of applicable Laws or the Abbott Code of Business Conduct, Abbott Luxembourg shall use commercially reasonable efforts in good faith to cause the Abbott Local Entity to operate the applicable Deferred AbbVie Local Business in a manner as closely as possible to the standards described in this Section 2.03 that would apply absent the exception provided for in the first sentence of this Section 2.03(b).

 

(c)                                  Except as expressly provided in this Agreement, Abbott Luxembourg shall not cause any Abbott Local Entity to operate any Deferred AbbVie Local Business for the benefit of any Third Party or any other Person other than AbbVie Luxembourg or the applicable AbbVie Local Entity.

 

Section 2.04.                          Deferred AbbVie Business Report.

 

(a)                                 Not later than thirty (30) days after the Distribution Date, Abbott Luxembourg shall prepare and deliver to AbbVie Luxembourg a financial report (the “Deferred AbbVie Business Report”) setting forth the AbbVie Assets and AbbVie Liabilities of each Deferred AbbVie Local Business held by each Abbott Local Entity as of the Effective Time. The Deferred AbbVie Business Report shall be prepared on a country-by-country basis in the applicable Local Currency in accordance with GAAP applied on a basis consistent with the AbbVie Pro Forma Balance Sheet and with the same level of detail as used by Abbott in the

 

9

 

preparation of Abbott’s monthly financial reporting package and the standard financial reports used by Abbott on the Distribution Date.

 

(b)                                 If AbbVie Luxembourg disagrees with any amount set forth in the Deferred AbbVie Business Report, AbbVie Luxembourg shall give Notice to Abbott Luxembourg within thirty (30) days of receipt of the Deferred AbbVie Business Report stating the specific reasons for its disagreement. If Abbott Luxembourg and AbbVie Luxembourg are unable to resolve any disagreement, the disagreement shall be resolved pursuant to the procedures set forth in Section 2.07(d) and Section 2.07(e).

 

Section 2.05.                          Aggregate Net Amount.

 

(a)                                 Subject to Section 2.07 and Section 2.08, if on a monthly basis during the International Operations Transition Period, in connection with the operation of the Deferred AbbVie Local Businesses during such period:

 

(i)                                     the Aggregate Net Amount is a positive number, Abbott Luxembourg (on behalf of all Abbott Local Entities) shall remit to AbbVie Luxembourg the Aggregate Net Amount derived from the operation of the Deferred AbbVie Local Business by all of the Abbott Local Entities; or

 

(ii)                                  the Aggregate Net Amount is a negative number, AbbVie Luxembourg shall remit to Abbott Luxembourg the Aggregate Net Amount advanced for the operation of the Deferred AbbVie Local Business by all of the Abbott Local Entities.

 

(b)                                 The Aggregate Net Amount shall be calculated in accordance with the principles set forth on Schedule 2.05(b).

 

Section 2.06.                          Services Affiliates.

 

(a)                                 Not later than the fifteenth (15th) day of each calendar month during the International Operations Transition Period, and, in the calendar month immediately following the last calendar month of the International Operations Transition Period if the results of all operations of the Deferred AbbVie Local Business prior to the expiration of the International Operations Transition Period have not been included in the Aggregate Net Amount for a prior calendar month, each Services Affiliate for whom a Local Closing has not occurred, or for whom a Local Closing has occurred but for whom the results of all operations of the Deferred AbbVie Local Business prior to such Local Closing have not been included in the Aggregate Net Amount for a prior calendar month, shall prepare and deliver to AbbVie Logistics, or the applicable Affiliate of AbbVie Luxembourg, an invoice setting forth the following:

 

(i)                                     the total costs and expenses incurred by such Services Affiliate to operate the Deferred AbbVie Local Business for the prior calendar month (the “AbbVie Business Expenses”); and

 

(ii)                                  the amount of the mark-up of the costs and expenses in (i) (each a “Mark-Up Fee”).

 

10

 

(b)                                 AbbVie Logistics, or the applicable Affiliate of AbbVie Luxembourg, shall, pursuant to the terms of the applicable promotional and other services agreement entered into between AbbVie Logistics or the applicable Affiliate of AbbVie Luxembourg and each Services Affiliate, pay to the applicable Services Affiliate the amount invoiced pursuant to Section 2.06(a) within forty-five (45) days from the date of the invoice by wire transfer (or such other timing or method of payment as may be agreed pursuant to the terms of the applicable promotional and other services agreement between AbbVie Logistics or the applicable Affiliate of AbbVie Luxembourg and the applicable Services Affiliate).

 

Section 2.07.                          Reporting; Disputes; Aggregate Net Amount Payment Mechanics.

 

(a)                                 Not later than the eleventh (11th) Business Day of each calendar month during the International Operations Transition Period, and, in the calendar month immediately following the last calendar month of the International Operations Transition Period if the results of all operations of each Deferred AbbVie Local Business prior to the expiration of the International Operations Transition Period have not been included in the Aggregate Net Amount for a prior calendar month, Abbott Luxembourg shall prepare and deliver to AbbVie Luxembourg in writing, for each Abbott Local Entity for whom a Local Closing has not occurred, or for whom a Local Closing has occurred but for whom the results of all operations of the Deferred AbbVie Local Business prior to such Local Closing have not been included in the Aggregate Net Amount for a prior calendar month, in each case attributable to the Deferred AbbVie Local Business operated by the applicable Abbott Local Entity for the prior calendar month, each of the following:

 

(i)                                     a profit and loss statement, a balance sheet, and a cash flow statement (prepared using the indirect method); and

 

(ii)                                  a report (each, a “Report”) setting forth:

 

(1)                 the Aggregate Net Amount;

 

(2)                 the Monthly Cash Increase or the Monthly Cash Decrease, as applicable, for each Local Buy-Sell Entity;

 

(3)                 the Aggregate Monthly Cash Increase and the Aggregate Monthly Cash Decrease;

 

(4)                 the Mark-Up Fee, the AbbVie Business Expenses and the Abbott Mark-Up Amount for each Services Affiliate; and

 

(5)                 the Aggregate Mark-Up Fee and the Aggregate AbbVie Business Expenses.

 

Each profit and loss statement, balance sheet, cash flow statement and Report shall be prepared in accordance with the principles set forth on Schedule 2.05(b) and, to the extent not inconsistent with such principles, in accordance with GAAP applied on a basis consistent with the AbbVie Pro Forma Balance Sheet, Abbott’s historical accounting policies, procedures and conventions, and with the same level of detail as used by Abbott in the

 

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preparation of Abbott’s monthly financial reporting package and the standard financial reports used by Abbott on the Distribution Date. Each profit and loss statement, balance sheet and cash flow statement shall include amounts specifically identifiable to the Deferred AbbVie Local Business segregated in unique AbbVie accounts within the Abbott Local Entity’s financial systems.

 

(b)                                 Within seven (7) days after the delivery of each Report, AbbVie Luxembourg shall deliver to Abbott Luxembourg a Notice in which AbbVie Luxembourg shall either:

 

(i)                                     agree in writing with the Aggregate Net Amount, in which case such calculation shall, subject to Section 2.07(d) and Section 2.07(e) (as each relates to an Adjustment Dispute Notice), Section 2.07(f) and Section 2.07(g), be final and binding on the Parties; or

 

(ii)                                  dispute the Aggregate Net Amount (or a component thereof) by delivering to Abbott Luxembourg a Notice (a “Dispute Notice”) setting forth in reasonable detail the basis for such dispute and certifying that such disputed Aggregate Net Amount (or a component thereof) is being disputed in good faith.

 

For purposes of this Section 2.07(b), AbbVie Luxembourg may only deliver a Dispute Notice on the basis that Abbott Luxembourg’s calculation of the Aggregate Net Amount (or a component thereof): (1) was not in accordance with the principles set forth on Schedule 2.05(b); (2) was not in accordance with, to the extent not inconsistent with the principles set forth on Schedule 2.05(b), GAAP applied on a basis consistent with the AbbVie Pro Forma Balance Sheet; or (3) contains mathematical errors in its calculation.

 

(c)                                  If AbbVie Luxembourg fails to take either of the foregoing actions within ten (10) days after delivery of the Report, then AbbVie Luxembourg shall be deemed to have irrevocably accepted the Aggregate Net Amount, in which case, the Aggregate Net Amount shall, subject to Section 2.07(d) and Section 2.07(e) (as each relates to an Adjustment Dispute Notice), Section 2.07(f) and Section 2.07(g), be final and binding on the Parties.

 

(d)                                 If AbbVie Luxembourg timely delivers a Dispute Notice to Abbott Luxembourg, either Party timely delivers an Adjustment Dispute Notice to the other Party pursuant to Section 2.07(f), or there is otherwise a dispute between the Parties with respect to the matters set forth in Section 2.04(b) or Section 3.04(b), then Abbott Luxembourg and AbbVie Luxembourg shall attempt in good faith, for a period of thirty (30) days, to resolve the dispute between the Parties. Any resolution by Abbott Luxembourg and AbbVie Luxembourg during such thirty (30) day period as to any items in dispute shall be final and binding on the Parties.  If Abbott Luxembourg and AbbVie Luxembourg do not resolve all such items in dispute by the end of such thirty (30) day period, then Abbott Luxembourg and AbbVie Luxembourg shall engage a mutually agreeable independent accounting firm of recognized national standing, which firm is not the regular auditing firm of either Abbott or AbbVie, and shall submit to such independent accounting firm the remaining items in dispute (the “Unresolved Disputes”) for resolution. If Abbott Luxembourg and AbbVie Luxembourg are unable to jointly select such independent accounting firm within fifteen (15) days after such thirty (30) day period, Abbott Luxembourg,

 

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on the one hand, and AbbVie Luxembourg, on the other hand, shall each select an independent accounting firm of recognized national standing in the United States of America and each such selected accounting firm shall select a third independent accounting firm of recognized national standing, which firm is not the regular auditing firm of either Abbott or AbbVie; provided, however, that if either Abbott Luxembourg, on the one hand, or AbbVie Luxembourg, on the other hand, fail to select such independent accounting firm during such fifteen (15) day period, then the Parties agree that the independent accounting firm selected by the other Party shall be the independent accounting firm selected by the Parties for purposes of this Section 2.07 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).  The Independent Accounting Firm shall act as an accounting expert, but not as an arbitrator, to determine based solely on the provisions of this Section 2.07 (or Section 2.04(b) or Section 3.04(b), as applicable) and the presentations by Abbott Luxembourg and AbbVie Luxembourg, and not by independent review, only the Unresolved Disputes and only as to whether such amounts were arrived at in conformity with Section 2.07 and Schedule 2.05(b) (or Section 2.04(b) or Section 3.04(b), as applicable). Abbott Luxembourg and AbbVie Luxembourg shall instruct the Independent Accounting Firm to render its determination with respect to the Unresolved Disputes in a written report that specifies the conclusions of the Independent Accounting Firm as to each Unresolved Dispute. Abbott Luxembourg and AbbVie Luxembourg shall each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within ten (10) days after referral of the Unresolved Disputes to such firm or as soon thereafter as reasonably practicable.  The Independent Accounting Firm’s determination as set forth in its report shall be final and binding on the Parties. The fees and expenses of the Independent Accounting Firm shall be shared by Abbott Luxembourg and AbbVie Luxembourg in inverse proportion to the relative amounts of the amount in dispute determined to be for the account of Abbott Luxembourg and AbbVie Luxembourg, respectively.

 

(e)                                  For purposes of complying with this Section 2.07, Abbott Luxembourg and AbbVie Luxembourg shall furnish to each other and to the Independent Accounting Firm such work papers and other documents and information relating to the Unresolved Dispute as the Independent Accounting Firm may request and are available to that Party (or its independent public accountants) and shall be afforded the opportunity to present to the Independent Accounting Firm any material related to the Unresolved Dispute and to discuss any items relating to the Unresolved Dispute with the Independent Accounting Firm. The Parties shall require that the Independent Accounting Firm enter into a reasonable engagement letter and customary confidentiality agreement with respect to the work papers and other documents and information provided to the Independent Accounting Firm pursuant to this Section 2.07.

 

(f)                                   (i)  Within sixty (60) days after the expiration of the ten (10) day period set forth in Section 2.07(b), either Party may deliver to the other Party a Notice (an “Adjustment Notice”) in which such Party disputes the Aggregate Net Amount (or a component thereof) previously determined and agreed upon pursuant to Section 2.07(b) or Section 2.07(c), which such Adjustment Notice shall set forth in reasonable detail the basis for such dispute and certifying that such dispute and the resulting proposed adjustment to the Aggregate Net Amount is being disputed in good faith. Any dispute included in a Dispute Notice delivered by AbbVie Luxembourg to Abbott Luxembourg pursuant to Section 2.07(b) that is either (i) resolved between the Parties pursuant to Section 2.07(d) or (ii) determined by the Independent

 

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Accounting Firm pursuant to Section 2.07(d) as an Unresolved Dispute may not, in either case, be included as an item in any Adjustment Notice.

 

(ii)  Within twenty (20) days after the delivery of any Adjustment Notice, the Party receiving the Adjustment Notice shall either:

 

(1)  agree in writing with the proposed adjustment to the Aggregate Net Amount, in which case such adjustment shall be final and binding on the Parties; or

 

(2)  dispute the proposed adjustment to the Aggregate Net Amount (or a component thereof) by delivering to the Party who issued the Adjustment Notice a Notice (an “Adjustment Dispute Notice”) setting forth in reasonable detail the basis for such dispute and certifying that such dispute with respect to the proposed adjustment to the Aggregate Net Amount (or a component thereof) is being disputed in good faith.

 

For purposes of this Section 2.07(f), a Party may only deliver an Adjustment Notice or an Adjustment Dispute Notice on the basis that the calculation of the Aggregate Net Amount (or a component thereof) previously determined and agreed upon pursuant to Section 2.07(b) or Section 2.07(c), or the proposed adjustment thereto, as applicable: (x) was not in accordance with the principles set forth on Schedule 2.05(b); (y) was not in accordance with, to the extent not inconsistent with the principles set forth on Schedule 2.05(b), GAAP applied on a basis consistent with the AbbVie Pro Forma Balance Sheet; or (z) contains mathematical errors in its calculation.

 

(g)                                  If the Party receiving an Adjustment Notice fails to take either of the foregoing actions within twenty (20) days after delivery of such Adjustment Notice, then such Party shall be deemed to have irrevocably accepted the proposed adjustment to the Aggregate Net Amount, in which case, such adjustment to the Aggregate Net Amount shall be final and binding on the Parties.

 

(h)                                 (i)  Not later than three (3) days following determination of the Aggregate Net Amount (other than with respect to the portion of the Aggregate Net Amount subject to an Unresolved Dispute): (A) if the Aggregate Net Amount (other than with respect to the portion of the Aggregate Net Amount subject to an Unresolved Dispute) is a positive number, AbbVie Luxembourg shall deliver a settlement statement to Abbott Luxembourg stating the Aggregate Net Amount (excluding the portion of the Aggregate Net Amount subject to an Unresolved Dispute); and (B) if the Aggregate Net Amount (other than with respect to the portion of the Aggregate Net Amount subject to an Unresolved Dispute) is a negative number, Abbott Luxembourg shall deliver a settlement statement to AbbVie Luxembourg stating the Aggregate Net Amount (excluding the portion of the Aggregate Net Amount subject to an Unresolved Dispute).

 

(ii)  Not later than three (3) days following the Independent Accounting Firm’s determination of any Unresolved Dispute: (1) if the determination of the Independent Accounting Firm results in an increase to the Aggregate Net Amount that was subject to such Unresolved Dispute, AbbVie Luxembourg shall deliver a settlement statement to Abbott Luxembourg stating the amount of such increase, and (2) if the determination of the Independent

 

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Accounting Firm results in a decrease to the Aggregate Net Amount that was subject to such Unresolved Dispute, Abbott Luxembourg shall deliver a settlement statement to AbbVie Luxembourg stating the amount of such decrease.

 

(iii)  Not later than three (3) days following determination of any adjustment to the Aggregate Net Amount previously determined and agreed upon pursuant to Section 2.07(b) or Section 2.07(c): (A) if the adjustment to the Aggregate Net Amount results in an Aggregate Net Amount that is greater than the Aggregate Net Amount previously determined and agreed upon pursuant to Section 2.07(b) or Section 2.07(c), AbbVie Luxembourg shall deliver a settlement statement to Abbott Luxembourg stating the amount of the adjustment; and (B) if the adjustment to the Aggregate Net Amount results in an Aggregate Net Amount that is less than the Aggregate Net Amount previously determined and agreed upon pursuant to Section 2.07(b) or Section 2.07(c), Abbott Luxembourg shall deliver a settlement statement to AbbVie Luxembourg stating the amount of the adjustment.

 

(iv)  Abbott Luxembourg or AbbVie Luxembourg, as applicable, shall pay the amount stated on all settlement statements by wire transfer (or such other method of payment as may be agreed between the Parties) in US Dollars no later than the earlier of (1) five (5) days from the date of the applicable settlement statement, or (2) the last day of the calendar month in which the applicable settlement statement was delivered that banks in Luxembourg are open for business.

 

The Parties shall use their commercially reasonable efforts, and shall co-operate in good faith, to ensure that the Aggregate Net Amount is paid by Abbott Luxembourg or AbbVie Luxembourg, as applicable, within the same calendar month as the Report setting forth such Aggregate Net Amount is prepared and delivered by Abbott Luxembourg to AbbVie Luxembourg pursuant to Section 2.07(a)(ii).

 

Section 2.08.                          Late Payments.  Any amount not paid when due pursuant to this Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within sixty (60) days of the date of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the Prime Rate plus two percent (2%), or the maximum legal rate, whichever is lower.

 

Section 2.09.                          Accounting Calendar.  AbbVie Luxembourg acknowledges that it has received a copy of Abbott’s internal accounting calendar for 2013 from Abbott Luxembourg. Prior to the commencement of each subsequent Abbott internal accounting calendar year during the International Operations Transition Period, Abbott Luxembourg shall make available to AbbVie Luxembourg a copy of Abbott’s internal accounting calendar for such Abbott internal accounting calendar year.

 

Section 2.10.                          Disclaimer of Representations and Warranties.

 

(a)                                 EACH OF ABBOTT LUXEMBOURG (ON BEHALF OF ITSELF AND EACH OF ITS SUBSIDIARIES) AND ABBVIE LUXEMBOURG (ON BEHALF OF ITSELF AND EACH OF ITS SUBSIDIARIES) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO PARTY TO THIS AGREEMENT OR OTHERWISE,

 

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IS: (X) REPRESENTING OR WARRANTING TO ANY OTHER PARTY HERETO IN ANY WAY AS TO (I) THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY; (II) ANY APPROVALS OR NOTIFICATIONS REQUIRED IN CONNECTION HEREWITH; (III) THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY; (IV) THE ABSENCE OF ANY DEFENSES TO OR RIGHT OF SETOFF AGAINST OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY PROCEEDING OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF EITHER PARTY; OR (V) THE LEGAL SUFFICIENCY OF ANY CONVEYANCE AND ASSUMPTION INSTRUMENTS TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING OF SUCH CONVEYANCE AND ASSUMPTION INSTRUMENTS: OR (Y) IS MAKING ANY OTHER REPRESENTATIONS OR GRANTING ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE. EXCEPT AS MAY EXPRESSLY BE SET FORTH IN THIS AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (A) ANY CONVEYANCE AND ASSUMPTION INSTRUMENT MAY PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ALL SECURITY INTERESTS; AND (B) ANY NECESSARY CONSENTS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS, AGREEMENTS, SECURITY INTERESTS OR JUDGMENTS ARE NOT COMPLIED WITH.

 

(b)                                 (i) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL SERVICES AND PRODUCTS ARE PROVIDED ON AN “AS-IS” BASIS, THAT EACH PARTY ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES, AND THAT EACH PARTY MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES AND PRODUCTS, AND HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER; and (ii) notwithstanding anything to the contrary herein, Abbott Luxembourg and the Abbott Local Entities shall have no obligation to AbbVie Luxembourg or the AbbVie Local Entities for any Liabilities relating to, arising out of, or resulting from the performance of their respective obligations pursuant to this Agreement except to the extent that such Liabilities relate to, arise out of, or result from (1) gross negligence, willful misconduct or fraud of Abbott Luxembourg or an Abbott Local Entity or (2) any payment obligation of Abbott Luxembourg or any Abbott Local Entity pursuant to this Agreement.

 

(c)                                  Each of Abbott Luxembourg (on behalf of itself and each of the Abbott Local Entities) and AbbVie Luxembourg (on behalf of itself and each of the AbbVie Local Entities) further understands and agrees that if the disclaimer of express or implied representations and warranties contained in this Section 2.10 is held unenforceable or is unavailable for any reason under the Laws of any jurisdiction outside the United States or if,

 

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under the Laws of a jurisdiction outside the United States, both Abbott Luxembourg or any of the Local Abbott Entities, on the one hand, and AbbVie Luxembourg or any of the Local AbbVie Entities, on the other hand, are jointly or severally liable for any Liability of the Deferred AbbVie Local Business or any other Liability of the Abbott Local Entity, respectively, then, the Parties intend that, notwithstanding any provision to the contrary under the Laws of such foreign jurisdictions, the provisions of this Agreement (including the disclaimer of all representations and warranties, allocation of Liabilities among the Parties and their respective Subsidiaries, releases, indemnification and contribution of Liabilities) shall prevail for any and all purposes among the Parties and, the Abbott Local Entities and the AbbVie Local Entities, as applicable.

 

ARTICLE III

 

TRANSFER OF DEFERRED ABBVIE LOCAL BUSINESSES

 

Section 3.01.                          General.  With respect to the Deferred AbbVie Local Business of each Abbott Local Entity, on or before the end of the International Operations Transition Period: (a) AbbVie Luxembourg or an AbbVie Local Entity shall obtain legal title to the Assets and the Liabilities of such Deferred AbbVie Local Business from such Abbott Local Entity; (b) AbbVie Luxembourg shall elect that such Assets and Liabilities of such Deferred AbbVie Local Business be transferred to a distributor; or (c) at the request of AbbVie Luxembourg before the date that is ninety (90) days prior to the end of the International Operations Transition Period, or in accordance with Section 3.05(b) and Section 3.05(c), the applicable Abbott Local Entity shall sell to a Third Party or wind-down the Assets and the Liabilities of such Deferred AbbVie Local Business (each of (a), (b) and (c), a “Local Closing”). AbbVie Luxembourg shall be entitled to initiate a Local Closing by providing Abbott Luxembourg at least ninety (90) days prior Notice of the anticipated date of consummation of such Local Closing; provided, however, that, except with respect to a Local Closing pursuant to Section 3.05, the actual closing date for any Local Closing shall be mutually agreed upon in advance between Abbott and AbbVie (the “Local Closing Date”).

 

Section 3.02.                          Transfer to AbbVie Local Entity.

 

(a)                                 If AbbVie Luxembourg initiates a Local Closing and elects to exercise its right to obtain legal title to the Assets and the Liabilities of the Deferred AbbVie Local Business from an Abbott Local Entity, such right shall be transferred by AbbVie Luxembourg to a duly formed AbbVie Local Entity.  At such Local Closing, the Abbott Local Entity holding legal title to the Assets and Liabilities of the applicable Deferred AbbVie Local Business shall sell, transfer, convey and deliver to the applicable AbbVie Local Entity, and the applicable AbbVie Local Entity shall purchase and accept delivery of, all such Assets and the applicable AbbVie Local Entity shall accept, assume and agree faithfully to perform, discharge and fulfill all such Liabilities in exchange for a purchase price equal to the fair market value of such Deferred Local AbbVie Business as of the Local Closing Date. The Conveyance and Assumption Instruments for a Local Closing shall be substantially in the same form as those used by the Parties or their respective Subsidiaries, as applicable, in connection with the contribution, assignment, transfer, conveyance and delivery of the Assets and the transfer of the Liabilities of the AbbVie Business prior to the Distribution Date. Unless otherwise agreed by Abbott and AbbVie following the Effective Time, the Local Closing with respect to each of the Brazilian Local Entity and the

 

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Venezuelan Local Entity shall be consummated in accordance with the plans attached hereto as Exhibit A and Exhibit B, respectively.

 

(b)           Subject to Section 3.04, no later than fifteen (15)  days (or such lesser number of days as mutually agreed in writing by the Parties) prior to the Local Closing Date pursuant to Section 3.02(a), Abbott Luxembourg shall deliver to AbbVie Luxembourg and the applicable AbbVie Local Entity a report prepared by an internationally recognized public accounting firm setting forth the fair market value for the applicable Deferred AbbVie Local Business in accordance with the valuation methodologies applied by such an internationally recognized public accounting firm in connection with the contribution, assignment, transfer, conveyance and delivery of the Assets and the transfer of the Liabilities for the applicable AbbVie Business prior to the Distribution Date.

 

(c)           If applicable Law permits an Affiliate of the applicable AbbVie Local Entity to pay the purchase price (whether to an Affiliate of the applicable Abbott Local Entity or the applicable Abbott Local Entity), then AbbVie Luxembourg may elect to pay the purchase price plus any applicable Conveyance Taxes on behalf of the applicable AbbVie Local Entity to the applicable Abbott Local Entity or Abbott Luxembourg, as elected by Abbott Luxembourg pursuant to the following sentence.  If applicable Law permits an Affiliate of the applicable Abbott Local Entity to receive the purchase price on behalf of the applicable Abbott Local Entity, then Abbott Luxembourg may elect to receive the purchase price plus any applicable Conveyance Taxes on behalf of the applicable Abbott Local Entity.  The purchase price plus any applicable Conveyance Taxes shall be paid by or on behalf of the AbbVie Local Entity to the Abbott Local Entity or Abbott Luxembourg on the applicable Local Closing Date in accordance with payment instructions to be provided in writing by Abbott Luxembourg.  If paid by the applicable AbbVie Local Entity, the purchase price plus any applicable Conveyance Taxes shall be paid at the election of Abbott Luxembourg in US Dollars or the local currency of the jurisdiction in which the applicable Abbott Local Entity selling the Assets and the Liabilities of the Deferred AbbVie Local Business has its principal place of business (“Local Currency”) by converting the applicable US Dollar amount to Local Currency using the Exchange Rate published two (2) days prior to the applicable Local Closing Date.  If paid by AbbVie Luxembourg, the purchase price plus any applicable Conveyance Taxes shall be paid in US Dollars. For purposes of this Section 3.02(c), the amount of applicable Conveyance Taxes to be paid by AbbVie Luxembourg or the AbbVie Local Entity to Abbott Luxembourg or the Abbott Local Entity, as the case may be, shall be limited to those Conveyance Taxes for which AbbVie or its Subsidiaries is responsible under the Tax Sharing Agreement.

 

Section 3.03.         Transfer to Distributor.

 

(a)           If AbbVie Luxembourg initiates a Local Closing and elects to exercise its right to appoint a distributor to operate the Deferred Local AbbVie Business such right may be transferred by AbbVie Luxembourg to an Affiliate of AbbVie Luxembourg. At such Local Closing, the Abbott Local Entity holding legal title to the Assets and Liabilities of the applicable Deferred AbbVie Local Business shall sell, transfer, convey and deliver to the applicable distributor, and the applicable distributor shall purchase and accept delivery of, all such Assets and the applicable distributor shall accept, assume and agree faithfully to perform, discharge and fulfill all such Liabilities in exchange for a purchase price equal to the fair market value of such

 

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Deferred Local AbbVie Business as of the Local Closing Date, or, to the extent that not all of the Assets and Liabilities of the Deferred Local AbbVie Business are to be acquired by the distributor, the fair market value of the applicable Assets and Liabilities as of the Local Closing Date. If any distributor requires that the applicable Abbott Local Entity indemnify such distributor in connection with the purchase of the applicable Assets and the assumption of the applicable Liabilities of the Deferred Local AbbVie Business, then AbbVie Luxembourg shall indemnify the applicable Abbott Local Entity for any actions or claims brought against such Abbott Local Entity by the distributor pursuant to such indemnification, provided, however, that the applicable Abbott Local Entity shall (i) not provide any indemnification to any distributor without the prior written consent of AbbVie Luxembourg; and (ii) shall use commercially reasonable efforts limit the scope of any such indemnification.

 

(b)           Subject to Section 3.04, no later than fifteen (15)  days (or such lesser number of days as mutually agreed in writing by the Parties) prior to the Local Closing Date, Abbott Luxembourg shall deliver to AbbVie Luxembourg and the applicable distributor a report prepared by an internationally recognized public accounting firm setting forth the fair market value for the applicable Deferred AbbVie Local Business as of the Local Closing Date, or, to the extent that not all of the Assets and Liabilities of the Deferred Local AbbVie Business are to be acquired by the distributor, the fair market value of the applicable Assets and Liabilities as of the Local Closing Date.

 

(c)           The purchase price plus any applicable Conveyance Taxes shall be paid by or on behalf of the distributor to the Abbott Local Entity on the applicable Local Closing Date in accordance with payment instructions to be provided in writing by the applicable Abbott Local Entity.  The purchase price plus any applicable Conveyance Taxes shall be paid by or on behalf of the distributor in US Dollars or in Local Currency converted from the US Dollar amount using the Exchange Rate published two (2) days prior to the applicable Local Closing Date.

 

(d)           If AbbVie Luxembourg initiates a Local Closing and reaches a mutual agreement with an Abbott Local Entity that such Abbott Local Entity shall be appointed as the distributor to operate the applicable Deferred Local AbbVie Business pursuant to a separate customary distribution agreement and for a period extending beyond the International Operations Transition Period, then Abbott Luxembourg shall acquire such right from AbbVie Luxembourg in exchange for a purchase price equal to the fair market value of such Deferred Local AbbVie Business as of the Local Closing Date, or, to the extent that not all of the Assets and Liabilities of the Deferred Local AbbVie Business are to be acquired by the Abbott Local Entity distributor, the fair market value of the applicable Assets and Liabilities as of the Local Closing Date. At such Local Closing, the Abbott Local Entity holding legal title to the Assets and Liabilities of the applicable Deferred AbbVie Local Business shall be appointed as the distributor to operate the applicable Deferred Local AbbVie Business pursuant to an agreement other than this Agreement, the Local Abbott Entity shall retain title to such Assets and the Local Abbott Entity shall faithfully perform, discharge and fulfill all such Liabilities in exchange for its appointment as distributor of such Deferred Local AbbVie Business. The purchase price  shall be paid by Abbott Luxembourg to AbbVie Luxembourg on the applicable Local Closing Date in accordance with payment instructions to be provided in writing by AbbVie Luxembourg.  The purchase price shall be paid by Abbott Luxembourg in US Dollars converted from the Local Currency using the Exchange Rate published two (2) days prior to the applicable Local Closing Date.

 

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(e)           If the distributor is either a Third Party or an Abbott Subsidiary and such distributor fails to reach an agreement with AbbVie Luxembourg to acquire all Assets, and assume all Liabilities, of a Deferred Local AbbVie Business, Abbott Luxembourg shall proceed to take such actions in accordance with Section 3.05 as are reasonably necessary to (i) sell to a Third Party the remaining Assets and Liabilities of the Deferred Local AbbVie Business, or (ii) wind-down and liquidate all of the remaining Assets and pay all of the remaining Liabilities of such Deferred AbbVie Local Business which are not acquired or assumed (as applicable) by the distributor.

 

Section 3.04.         Deferred AbbVie Balance Sheet.  In the event of a Local Closing under Section 3.02 or Section 3.03:

 

(a)           not later than sixty (60) days (or such lesser number of days as mutually agreed in writing by the Parties) prior to the Local Closing Date, Abbott Luxembourg shall prepare and deliver to AbbVie Luxembourg a pro forma balance sheet (the “Deferred AbbVie Balance Sheet”) setting forth the Assets and Liabilities of the Deferred AbbVie Local Business held by applicable Abbott Local Entity as at the last day of Abbott’s most recent financial quarter. The Deferred AbbVie Balance Sheet shall be prepared in accordance with generally accepted accounting principles of the jurisdiction in which the applicable Abbott Local Entity selling the Assets and the Liabilities of the Deferred AbbVie Local Business has its principal place of business, applied on a basis consistent with the AbbVie Pro Forma Balance Sheet and with the same level of detail as used by Abbott in the preparation of Abbott’s monthly financial reporting package and the standard financial reports used by Abbott on the Distribution Date; and

 

(b)           if AbbVie Luxembourg disagrees with any amount set forth in the Deferred AbbVie Balance Sheet, AbbVie Luxembourg shall provide Notice to Abbott Luxembourg within ten (10) days of receipt of such Deferred AbbVie Balance Sheet stating the specific reasons for its disagreement.  If Abbott Luxembourg and AbbVie Luxembourg are unable to resolve any disagreement, the disagreement shall be resolved pursuant to the procedures set forth in Section 2.07(d) and Section 2.07(e).

 

Section 3.05.         Sale or Wind-Down.

 

(a)           If, before the date that is ninety (90) days prior to the end of the International Operations Transition Period, AbbVie Luxembourg initiates a Local Closing and requests that Abbott Luxembourg or the applicable Abbott Local Entity sell to a Third Party one or more of the Assets and Liabilities of a Deferred AbbVie Local Business or wind-down a Deferred AbbVie Local Business, then the following shall apply:

 

(i)            Abbott Luxembourg or the applicable Abbott Local Entity shall proceed to make such commercially reasonable efforts in order to sell to a Third Party one or more of the Assets and Liabilities of the applicable Deferred AbbVie Local Business or wind-down the applicable Deferred AbbVie Local Business and liquidate all of the remaining Assets and pay all of the remaining AbbVie Liabilities of such applicable Deferred AbbVie Local Business; and

 

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(ii)           AbbVie Luxembourg shall make such commercially reasonable efforts, and shall co-operate in good faith, to assist Abbott Luxembourg or the applicable Abbott Local Entity with such sale or wind-down for the applicable Deferred AbbVie Local Business.

 

(b)           If a Local Closing has not taken place pursuant to Section 3.02, Section 3.03 or Section 3.05(a) for any Abbott Local Entity on or before the date that is ninety (90) days prior to the end of the International Operations Transition Period, Abbott Luxembourg shall deliver to AbbVie Luxembourg a Notice setting forth (i) the name of the Abbott Local Entity or Abbott Local Entities holding any remaining Deferred AbbVie Local Business; (ii) the estimated fair market value of each such remaining Deferred AbbVie Local Business; and (iii) the nature of all Assets and Liabilities of each such remaining Deferred AbbVie Local Business.

 

(c)           If AbbVie Luxembourg has not delivered Abbott Luxembourg a Notice within ten (10) days of receiving the Notice from Abbott Luxembourg pursuant to Section 3.05(b) that it desires to acquire the Assets and the Liabilities of each such remaining Deferred AbbVie Local Business, then the following shall apply:

 

(i)            Abbott Luxembourg or the applicable Abbott Local Entity shall proceed to make such commercially reasonable efforts in order to sell to a Third Party one or more of the Assets and Liabilities of each applicable Deferred AbbVie Local Business or wind-down each Deferred AbbVie Local Business and liquidate all of the remaining Assets and pay all of the remaining AbbVie Liabilities of each such Deferred AbbVie Local Business;

 

(ii)           AbbVie Luxembourg shall make such commercially reasonable efforts, and shall co-operate in good faith, to assist Abbott Luxembourg or the applicable Abbott Local Entity with such sale or wind-down for each applicable Deferred AbbVie Local Business; and

 

(iii)          following the expiration of the International Operations Transition Period, except as set forth in Section 3.05(c)(i), Abbott Luxembourg and the Abbott Local Entities shall not have any responsibility, Liability or obligation to AbbVie Luxembourg with respect to all of the Assets and all of the Liabilities of each remaining Deferred AbbVie Local Business.

 

Section 3.06.         Proceeds from Local Closing.

 

(a)           Within five (5) days of the receipt of the funds by Abbott Luxembourg or an Abbott Local Entity pursuant to Section 3.02(c), Section 3.03(c) or Section 3.05 in connection with a Local Closing, Abbott Luxembourg shall remit to AbbVie Luxembourg an amount equal to the Net Proceeds in accordance with payment instructions to be provided in writing by AbbVie Luxembourg. The Net Proceeds shall be paid in US Dollars converted from Local Currency using the Exchange Rate published two (2) days prior to the applicable Local Closing Date.

 

(b)           “Net Proceeds” shall mean the funds received by Abbott Luxembourg or the applicable Abbott Local Entity pursuant to Section 3.02(c), Section 3.03(c) or Section 3.05 less (i) all remaining AbbVie Liabilities held by the applicable Abbott Local Entity and the costs incurred by the applicable Abbott Local Entity in connection with the sale or wind-down

 

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activities, (ii) the aggregate amount of Conveyance Taxes received, if any, that are the responsibility of AbbVie or its Subsidiaries under the Tax Sharing Agreement, and (iii) the amount of any applicable Conveyance Taxes to be paid by a distributor to Abbott Luxembourg or the applicable Abbott Local Entity in the case of a Local Closing described in Section 3.03(a), but only to the extent that such Conveyance Taxes would have been the responsibility of AbbVie or its Subsidiaries under the Tax Sharing Agreement had an AbbVie Local Entity and not the distributor acquired the Assets and Liabilities of the Deferred AbbVie Local Business.

 

(c)           Within five (5) days of consummation of a Local Closing pursuant to Section 3.02(c), Section 3.03(c) or Section 3.05, if the Net Proceeds is a negative number, AbbVie Luxembourg shall pay to Abbott Luxembourg an amount in full settlement of the negative Net Proceeds in accordance with payment instructions to be provided in writing by Abbott Luxembourg. The Net Proceeds shall be paid in US Dollars converted from Local Currency using the Exchange Rate published two (2) days prior to the applicable Local Closing Date.

 

Section 3.07.         Local Income Taxes.  Any income Taxes (the “Local Income Tax”) incurred by the Abbott Local Entity attributable to, resulting from, or arising out of, any gain attributable to the transfer of the Deferred AbbVie Local Business at the Local Closing shall be reimbursed by AbbVie Luxembourg to Abbott Luxembourg; provided that: (a) the amount of such reimbursement shall not exceed the lesser of the applicable Income Tax Benefit and the amount of applicable Local Income Tax; and (b) the Income Tax Benefit and the Local Income Tax shall be determined using the highest Tax rate of the applicable Abbott Local Entity (and not a rate determined solely for the Deferred AbbVie Local Business) in effect at the time of Local Closing. In the case of any loss incurred by the Abbott Local Entity attributable to, resulting from, or arising out of, the transfer of the Deferred AbbVie Local Business at the Local Closing, Abbott Luxembourg shall pay to AbbVie Luxembourg the amount of the Income Tax Benefit realized by the Local Abbott Entity from such loss; provided that the amount of the Income Tax Benefit of the loss shall be determined using the highest Tax rate of the applicable Abbott Local Entity (and not a rate determined solely for the Deferred AbbVie Local Business) in effect for the calendar year of the Local Closing. Any amount due under this Section 3.07 shall be paid in US Dollars within thirty (30) days of the filing of the relevant income Tax Return by the Local Abbott Entity that includes the Local Closing using the applicable Average Rate at the time such payment is made.

 

ARTICLE IV

 

TERM

 

Section 4.01.         Term.

 

(a)           Except as provided in Section 4.01(b), this Agreement shall become effective at the Effective Time and shall remain in effect for a term expiring on the earlier of (i) the date of the consummation of the last Local Closing for the applicable Abbott Local Entity and (ii) the second (2nd) anniversary of the Distribution Date (the “Final Closing Date”).

 

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(b)           Solely with respect to the Local Closing related to the Deferred AbbVie Local Business of the Brazilian Local Entity, this Agreement shall become effective at the Effective Time and shall remain in effect for a term expiring on the earlier of (i) the date of the consummation of the Local Closing for the Brazilian Local Entity and (ii) the third (3rd) anniversary of the Distribution Date.

 

Section 4.02.         Survival. The provisions of Section 2.06, Section 2.07, Section 2.08, Section 2.10, Section 3.03(e), Section 3.05, Section 3.06, this Section 4.02, Article V and Article VI of this Agreement, any outstanding payment obligations under Article II and any outstanding payment and wind-down obligations under Article III shall survive the termination of this Agreement and shall remain in full force and effect thereafter.

 

ARTICLE V

 

DISPUTE RESOLUTION

 

Section 5.01.         Dispute Resolution. Other than as set forth in Section 2.07, in the event of any controversy, dispute or claim (a “Dispute”) arising out of or relating to either Party’s rights or obligations under this Agreement (whether arising in contract, tort or otherwise) or otherwise arising out of or relating in any way to this Agreement (including the interpretation or validity of this Agreement), such Dispute shall be resolved in accordance with the dispute resolution process referred to in Section 7.01 to the Separation and Distribution Agreement.

 

Section 5.02.         Continuation of Commitments.  Unless otherwise agreed in writing, the Parties shall, and shall cause their respective Subsidiaries to, continue to honor all commitments under this Agreement to the extent required by this Agreement during the course of dispute resolution pursuant to the provisions of this Article V with respect to all matters related to such Dispute.

 

ARTICLE VI

 

MISCELLANEOUS

 

Section 6.01.         Confidentiality.

 

(a)           Confidentiality.  From and after the Effective Time, subject to Section 6.02 and except as contemplated by or otherwise provided in this Agreement, Abbott Luxembourg, on behalf of itself and each of the Abbott Local Entities, and AbbVie Luxembourg, on behalf of itself and each of the AbbVie Local Entities, agrees to hold, and to cause its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives (each, a “Representative”) to hold, in strict confidence, with at least the same degree of care that applies to Abbott’s confidential and proprietary information pursuant to policies in effect as of the Effective Time, all confidential and proprietary information concerning the other Party (or its business) and the other Party’s Subsidiaries (or their respective businesses) that is either in its possession (including confidential and proprietary information in its possession prior to the Effective Time) or furnished by the other Party or the other Party’s Subsidiaries or their respective Representatives at any time pursuant to this Agreement, and shall

 

23

 

not use any such confidential and proprietary information other than for such purposes as may be expressly permitted hereunder, except, to the extent that such confidential and proprietary information has been: (i) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any of its Subsidiaries or any of their respective Representatives in violation of this Agreement; (ii) later lawfully acquired from other sources by such Party or any of its Subsidiaries, which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary information; or (iii) independently developed or generated without reference to or use of the respective proprietary or confidential information of the other Party or any of its Subsidiaries.  If any confidential and proprietary information of one Party or any of its Subsidiaries is disclosed to another Party or any of its Subsidiaries in connection with providing services to such first Party or any of its Subsidiaries under this Agreement, then such disclosed confidential and proprietary information shall be used only as required to perform such services.

 

(b)           No Release.  Each Party agrees (i) not to release or disclose, or permit to be released or disclosed, any information addressed in Section 6.01(a) to any other Person, except its Representatives who need to know such information in their capacities as such, and except in compliance with Section 6.02 and (b) to use commercially reasonable efforts to maintain any such information in accordance with Section 6.03 of the Separation and Distribution Agreement.

 

(c)           Third-Party Information; Privacy and Data Protection Laws.  Each Party acknowledges that it and its respective Subsidiaries may presently have and, following the Effective Time, may gain access to or possession of confidential or proprietary information of, or personal information relating to, Third Parties (i) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or the other Party’s Subsidiaries, on the other hand, prior to the Effective Time; or (ii) that, as between the two Parties, was originally collected by the other Party or the other Party’s Subsidiaries and that may be subject to and protected by privacy, data protection or other applicable Laws.  As provided in more detail in a data protection agreement to be entered into between Abbott and AbbVie as of the Effective Time, each Party agrees that it shall hold, protect and use, and shall cause its Subsidiaries and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary information of, or personal information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or the other Party’s Subsidiaries, on the one hand, and such Third Parties, on the other hand.

 

Section 6.02.         Protective Arrangements.  In the event that either Party or any of its Affiliates is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) by any Governmental Authority or pursuant to applicable Law to disclose or provide any confidential or proprietary information of the other Party that is subject to the confidentiality provisions hereof, or to disclose or provide any Personal Data that it processes on behalf of the other Party in accordance with the data protection agreement to be entered into between Abbott and AbbVie as of the

 

24

 

Effective Time, such Party shall, unless prohibited by such request or requirement of the applicable Governmental Authority or under applicable Law, provide the other Party with Notice of such request or demand as promptly as practicable under the circumstances so that such other Party shall have an opportunity to seek an appropriate protective order, at such other Party’s own cost and expense.  In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such Law (as so advised by counsel) or by lawful process or such Governmental Authority.

 

Section 6.03.         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, the Separation and Distribution Agreement, the Luxembourg Demerger Plan and the exhibits and schedules hereto and thereto 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 or therein.   It is the intention of the Parties that the Conveyance and Assumption Instruments shall be consistent with the terms of this Agreement. In the event of any conflict between the Conveyance and Assumption Instruments and this Agreement, the provisions of this Agreement shall control.  The Parties agree that the Conveyance and Assumption Instruments are not intended and shall not be construed in any way to enhance, modify or decrease any of the rights or obligations of Abbott Luxembourg, any Abbott Local Entity, AbbVie Luxembourg or any AbbVie Local Entity from those contained in this Agreement.

 

(c)           Corporate Power.  Abbott Luxembourg represents on behalf of itself and, to the extent applicable, each Abbott Local Entity and AbbVie Luxembourg represents on behalf of itself and, to the extent applicable, each AbbVie Local Entity 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 and to consummate the transactions contemplated hereby; and

 

(ii)           this Agreement 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)           Signatures and Delivery.  Each Party acknowledges that it and the other Party may execute this Agreement by manual, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement.  Each Party expressly adopts and confirms a stamp or mechanical signature (regardless of whether delivered

 

25

 

in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it shall not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it shall as promptly as reasonably practicable cause each such Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

 

Section 6.04.         Governing Law.  This Agreement shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware, irrespective of the choice of Laws and principles of the State of Delaware, as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies.

 

Section 6.05.         Assignability.  This Agreement shall be binding upon and inure to the benefit of the Parties 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, no such consent shall be required for the assignment of a Party’s rights and obligations under this Agreement in whole in connection with a Change of Control 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. Nothing herein is intended to, or shall be construed to, prohibit either Party or any of its Subsidiaries from being party to or undertaking a Change of Control.

 

Section 6.06.         Third Party Beneficiaries.  The provisions of this Agreement are solely for the benefit of the Parties, the Abbott Local Entities and the AbbVie Local Entities  and their respective permitted successors and assigns, and are not intended to confer upon any Person except the Parties, the Abbott Local Entities and the AbbVie Local Entities and their permitted successors and assigns, any rights or remedies hereunder; and 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 6.07.         Notices.  All Notices shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a Notice):

 

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If to Abbott Luxembourg:

 

Abbott Investments Luxembourg S.a.r.l.

Regus Luxembourg City Centre

Suite 123

26, boulevard Royal

L-2449 Luxembourg

Grand Duchy of Luxembourg

Attn:  Treasurer, Logistics
 Facsimile:  +352 22 99 99 54 99

 

with a copy to (which shall not constitute Notice):

 

Abbott Laboratories
 100 Abbott Park Road
 Abbott Park, Illinois  60064-6020
 Attn:  General Counsel 
 Facsimile: (847) 937-3966

 

If to AbbVie Luxembourg:

 

AbbVie Investments S.a.r.l.

Regus Luxembourg City Centre

Suite 120

26, boulevard Royal

L-2449 Luxembourg

Grand Duchy of Luxembourg

Attn:  Treasurer, Logistics

Facsimile:  +352 22 99 99 54 99

 

with a copy to (which shall not constitute Notice):

 

AbbVie Inc. 
 1 North Waukegan Road
 North Chicago, Illinois 60064
 Attn:  General Counsel
 Facsimile: (847) 935-3294

 

Either Party may, by Notice to the other Party, change the address to which such Notices are to be given.

 

Section 6.08.         Severability.  In the event that any one or more of the terms or provisions of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement, or the application of such term or provision to Persons or circumstances or in jurisdictions other than those as to which it has been determined to be invalid, illegal or unenforceable, and the Parties shall use their commercially reasonable efforts to substitute one or

 

27

 

more valid, legal and enforceable terms or provisions into this Agreement which, insofar as practicable, implement the purposes and intent of the Parties.  Any term or provision of this Agreement held invalid or unenforceable only in part, degree or within certain jurisdictions shall remain in full force and effect to the extent not held invalid or unenforceable to the extent consistent with the intent of the parties as reflected by this Agreement.  To the extent permitted by applicable Law, each Party waives any term or provision of Law which renders any term or provision of this Agreement to be invalid, illegal or unenforceable in any respect.

 

Section 6.09.         Force Majeure.  Neither Party shall be deemed in default of this Agreement for failure to fulfill any obligation so long as and to the extent to which any delay or failure in the fulfillment of such obligations is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. 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.  A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide Notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as reasonably practicable.  Notwithstanding the foregoing, the Final Closing Date shall not be delayed pursuant to this Section 6.09 beyond the date that is thirty (30) months after the Distribution Date for all Local Closings, except for a Local Closing related to the Deferred AbbVie Local Business of the Brazilian Local Entity where such Final Closing Date shall not be delayed pursuant to this Section 6.09 beyond the date that is forty two (42) months after the Distribution Date.

 

Section 6.10.         No Set Off.  Except as expressly contemplated by this Agreement or mutually agreed to in writing by the Parties, neither Party nor any of its Affiliates shall have any right of set off or other similar rights with respect to (a) any amounts received pursuant to this Agreement, or (b) any other amounts claimed to be owed to the other Party or any of its Affiliates arising out of this Agreement.

 

Section 6.11.         Responsibility for Expenses.  Except as otherwise expressly set forth in this Agreement, or as otherwise agreed to in writing by the Parties, each Party shall bear its own costs and expenses incurred or accrued during the International Operations Transition Period; provided that all fees and expenses incurred or accrued by Abbott or AbbVie with respect to any legal, tax, valuation or other advisor engaged by Abbott or AbbVie upon the joint consent of Abbott and AbbVie solely in connection with the preparation for, and consummation of, a Local Closing (other than a sale or wind-down pursuant to Section 3.05) shall be shared equally, on terms to be agreed from time to time, between Abbott and AbbVie.

 

Section 6.12.         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 6.13.         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 waiving Party.

 

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Section 6.14.         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 6.15.         Interpretation.  Words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires.  The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules 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 date on which it is executed and as it may be amended, modified or supplemented 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. If the Liability does not have terms, the reference shall mean performance, discharge or fulfillment of such Liability.

 

Section 6.16.         Public Announcements.  From and after the Effective Time, Abbott Luxembourg and AbbVie Luxembourg shall consult with each other before issuing, and give each other the opportunity to review and comment upon, that portion of any press release or other public statements that relates respect to the transactions contemplated by this Agreement, and shall not issue any such press release or make any such public statement prior to such consultation, except (a) as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system; or (b) as otherwise set forth on Schedule 9.16 to the Separation and Distribution Agreement.

 

Section 6.17.         Specific Performance.  In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.  The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, may be inadequate compensation for any loss and that any defense in any Proceeding for specific performance that a remedy at Law would be adequate is waived.

 

Section 6.18.         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.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.

 

 

	
ABBOTT   INVESTMENTS LUXEMBOURG S.à r.l.
    	
 
    	
ABBVIE   INVESTMENTS S.à r.l.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Thomas C. Freyman
    	
 
    	
By:   
    	
/s/   William J. Chase
    
	
 
    	
Name:
    	
Thomas   C. Freyman
    	
 
    	
 
    	
Name:
    	
William   J. Chase
    
	
 
    	
Title:
    	
Authorized   Representative
    	
 
    	
 
    	
Title:
    	
Authorized   Representative
    

 

[Signature Page to Luxembourg International Commercial Operations Agreement]

 

 

Schedule 1.01(a)

 

Abbott Local Entities

 

	
Abbott Subsidiary Company Name
    	
 
    	
Jurisdiction
    
	
Abbott Drustvo sa Odgranicenom odgovornoscu   za trgovinu l usluge (Bosnia)
    	
 
    	
Bosnia
    
	
Abbott   Laboratorios do Brasil Ltda.
    	
 
    	
Brazil
    
	
Abbott   Healthcare Costa Rica, S.A.
    	
 
    	
Costa   Rica
    
	
Abbott   Laboratories d.o.o
    	
 
    	
Croatia
    
	
Abbott   Limited Egypt LLC
    	
 
    	
Egypt
    
	
Abbott,   S.A. de C.V.
    	
 
    	
El   Salvador
    
	
Abbott   Laboratorios, S.A.
    	
 
    	
Guatemala
    
	
Abbott   India Ltd.
    	
 
    	
India
    
	
P.T.   Abbott Indonesia
    	
 
    	
Indonesia
    
	
Abbott   Medical Laboratories Limited
    	
 
    	
Israel
    
	
Abbott Laboratories Baltics SIA
    	
 
    	
Latvia
    
	
UAB   Abbott Laboratories
    	
 
    	
Lithuania
    
	
Abbott   Laboratories Pakistan Ltd
    	
 
    	
Pakistan
    
	
Abbott   Laboratories
    	
 
    	
Philippines
    
	
Abbott Laboratories d.o.o
    	
 
    	
Slovenia
    
	
Abbott   Laboratories Limited
    	
 
    	
Thailand
    
	
Abbott   Ukraine LLC
    	
 
    	
Ukraine
    
	
Abbott   Laboratories, C.A.
    	
 
    	
Venezuela
    
	
Each branch or representative office of   Abbott Laboratories SA (Switzerland) to the extent that such branch or   representative office has Assets and Liabilities  related to the AbbVie Business, including any clinical trial agreements entered into by Abbott Laboratories SA (Switzerland) which are   performed by such branch or representative office.
    	
 
    	
Each jurisdiction in which a branch or   representative office of Abbott Laboratories SA (Switzerland) has Assets and   Liabilities of the AbbVie Business.
    

 

Any other Abbott Subsidiary not listed on this Schedule 1.01(a) as determined by, and agreed between, Abbott and AbbVie, as being an Abbott Local Entity shall be treated as an Abbott Local Entity, including any Abbott Subsidiaries in the following jurisdictions: Afghanistan, Azerbaijan, Bahamas, Barbados, jurisdictions within the Carribean, Dominican Republic, Honduras, Jamaica, Lebanon, Namibia, Nicaragua, Panama, Serbia, Suriname and Trinidad & Tobago.

 

 

Schedule 1.01(b)

 

Services Affiliates

 

	
Abbott Subsidiary Company Name
    	
 
    	
Jurisdiction
    
	
Abbott   Drustvo sa Odgranicenom odgovornoscu za trgovinu l usluge (Bosnia)
    	
 
    	
Bosnia
    
	
Abbott Laboratories d.o.o
    	
 
    	
Croatia
    
	
Abbott, S.A. de C.V.
    	
 
    	
El   Salvador
    
	
Abbott Laboratories Baltics SIA
    	
 
    	
Latvia
    
	
UAB   Abbott Laboratories
    	
 
    	
Lithuania
    
	
Abbott Laboratories d.o.o
    	
 
    	
Slovenia
    
	
Abbott   Ukraine LLC
    	
 
    	
Ukraine
    
	
Each branch or representative office of   Abbott Laboratories SA (Switzerland) to the extent that such branch or   representative office has Assets and Liabilities  related to the AbbVie Business, including any clinical trial agreements entered into by Abbott Laboratories SA (Switzerland) which are   performed by such branch or representative office.
    	
 
    	
Each jurisdiction in which a branch or   representative office of Abbott Laboratories SA (Switzerland) has Assets and Liabilities   of the AbbVie Business.
    

 

Any other Abbott Subsidiary not listed on this Schedule 1.01(b) as determined by, and agreed between, Abbott and AbbVie, as being a Services Affiliate shall be treated as a Services Affiliate, including, any Abbott Subsidiaries in the following jurisdictions: Afghanistan, Azerbaijan, Bahamas, Barbados, jurisdictions within the Carribean, Dominican Republic, Honduras, Jamaica, Lebanon, Namibia, Nicaragua, Panama, Serbia, Suriname and Trinidad & Tobago.

 

 

Schedule 2.05(b)

 

Accounting Principles

 

“Abbott Mark-Up Amount” means an amount equal to 3% of all expenses incurred by a Services Affiliate attributable to the operation of the Deferred AbbVie Local Business during the International Operations Transition Period for items that would have otherwise constituted services provided by such Services Affiliate under the Ex-U.S. Transition Services Agreement if the Local Closing for such Services Affiliate had taken place prior to the Distribution Date, which such amount represents a portion of the Mark-Up Fees for the applicable Services Affiliate.

 

“Aggregate AbbVie Business Expenses” means (a) the sum of all AbbVie Business Expenses in respect of all Services Affiliates for whom a Local Closing has not occurred plus (b) the sum of all AbbVie Business Expenses in respect of all Services Affiliates for whom a Local Closing has occurred but such AbbVie Business Expenses have not been included in the Aggregate Net Amount for a prior calendar month.

 

“Aggregate Mark-Up Fee” means (a) the sum of all Mark-Up Fees in respect of all Services Affiliates for whom a Local Closing has not occurred; plus (b) the sum of all Mark-Up Fees in respect of all Services Affiliates for whom a Local Closing has occurred but such Mark-Up Fees have not been included in the Aggregate Net Amount for a prior calendar month minus; (c) the sum of all Abbott Mark-Up Amounts in respect of all Services Affiliates for whom a Local Closing has not occurred minus; (d) the sum of all Abbott Mark-Up Amounts in respect of all Services Affiliates for whom a Local Closing has occurred but such Mark-Up Fees have not been included in the Aggregate Net Amount for a prior calendar month.

 

“Aggregate Monthly Cash Decrease” means (a) the sum of all Monthly Cash Decreases in respect of all Local Buy-Sell Entities for whom a Local Closing has not occurred; plus (b) the sum of all Monthly Cash Decreases in respect of all Local Buy-Sell Entities for whom a Local Closing has occurred but such Monthly Cash Decreases have not been included in the Aggregate Net Amount for a prior calendar month.

 

“Aggregate Monthly Cash Increase” means (a) the sum of all Monthly Cash Increases in respect of all Local Buy-Sell Entities for whom a Local Closing has not occurred; plus (b) the sum of all Monthly Cash Increases in respect of all Local Buy-Sell Entities for whom a Local Closing has occurred but such Monthly Cash Increases have not been included in the Aggregate Net Amount for a prior calendar month.

 

“Aggregate Net Amount” means (a) the Aggregate Monthly Cash Increase; minus (b) the Aggregate Monthly Cash Decrease; plus (c) the Aggregate Mark-Up Fee.

 

“Ex-U.S. Transition Services Agreement” means the Ex-U.S. Transition Services Agreement entered into prior to the Effective Time by and between Abbott, AbbVie and certain of their respective Affiliates.

 

“Monthly Cash Decrease” means for each calendar month during the International Operations Transition Period, the cash advanced to each Deferred AbbVie Local Business held

 

 

by a Local Buy-Sell Entity for whom a Local Closing has not occurred, or for whom a Local Closing has occurred but such Monthly Cash Decrease has not been included in the Aggregate Net Amount for a prior calendar month, which such amount shall be reflected in the cash flow statement for such Local Buy-Sell Entity as the “Net decrease in cash” and which such amount shall be converted from Local Currency to US Dollars using the Book Rate.

 

“Monthly Cash Increase” means for each calendar month during the International Operations Transition Period, the cash derived from each Deferred AbbVie Local Business held by a Local Buy-Sell Entity for whom a Local Closing has not occurred, or for whom a Local Closing has occurred but such Monthly Cash Increase has not been included in the Aggregate Net Amount for a prior calendar month, which such amount shall be reflected in the cash flow statement for such Local Buy-Sell Entity as the “Net increase in cash” and which such amount shall be converted from Local Currency to US Dollars using the Book Rate.

 

2.                                      In calculating, for each Local Buy-Sell Entity, the Monthly Cash Increase or the Monthly Cash Decrease, as applicable, the following shall be taken into account:

 

(a)           Each of the profit and loss statement, balance sheet and cash flow statement provided in accordance with Section 2.07(a) shall be prepared in accordance with the principles set forth in this Schedule 2.05(b) and, to the extent not inconsistent with such principles, in accordance with GAAP applied on a basis consistent with the AbbVie Pro Forma Balance Sheet, Abbott’s historical accounting policies, procedures and conventions, and with the same level of detail as used by Abbott in the preparation of Abbott’s monthly financial reporting package and the standard financial reports used by Abbott on the Distribution Date. Such financial statements shall include amounts specifically attributable to the Deferred AbbVie Local Business segregated in unique AbbVie accounts within the Local Buy-Sell Entity’s financial systems.

 

(b)           The net income of the Deferred Local AbbVie Business of each Local Buy-Sell Entity reflected in the profit and loss statement shall be calculated in accordance with the principles set forth in this Schedule 2.05(b) and, to the extent not inconsistent with such principles, in accordance with GAAP applied on a basis consistent with the AbbVie Pro Forma Balance Sheet and Abbott’s historical accounting policies, procedures and conventions.  The net income of the Deferred Local AbbVie Business of each Local Buy-Sell Entity shall be converted from Local Currency to US Dollars using the Average Rate.

 

(c)           The Assets and Liabilities attributable to the Deferred AbbVie Local Business of each Local Buy-Sell Entity reflected in the balance sheet shall be converted from Local Currency to US Dollars using the Book Rate.

 

(d)           In calculating the net income of each Local Buy-Sell Entity: (i) a mark-up of 3% shall be added to all expenses incurred by such Local Buy-Sell Entity attributable to the operation of the Deferred AbbVie Local Business during the International Operations Transition Period for items that would have otherwise constituted services provided by such Local Buy-Sell Entity under the Ex-U.S. Transition Services Agreement if the Local Closing for such Local Buy-Sell Entity had taken place prior to the Distribution Date; and (ii) a mark-up of 10% shall be added to all expenses incurred by such Local Buy-Sell Entity attributable to the operation of the

 

 

Deferred AbbVie Local Business during the International Operations Transition Period for items that would have otherwise constituted services provided by such Local Buy-Sell Entity under a contract manufacturing agreement if the Local Closing for such Local Buy-Sell Entity had taken place prior to the Distribution Date.  All other expenses attributable to the operations of the Deferred AbbVie Local Business incurred by each Local Buy-Sell Entity during the International Operations Transition Period (for example, salaries of employees of the Deferred AbbVie Local Business) shall not be subject to a mark-up when calculating the net income of such Local Buy-Sell Entity.

 

(e)           The portion of the interest expense on any loans entered into by a Local Buy-Sell Entity attributable to the operation of the Deferred AbbVie Local Business shall be taken into account for purposes of calculating the Monthly Cash Increase or the Monthly Cash Decrease, as applicable, for such Local Buy-Sell Entity. If any interest expense on any such loan is included in the calculation of the Monthly Cash Increase or the Monthly Cash Decrease for the applicable Local Buy-Sell Entity, then the applicable cash proceeds and loan Liability with respect to such loan attributable to the operation of the Deferred AbbVie Local Business shall be (i) included as an Asset and a Liability of the Deferred AbbVie Local Business of the applicable Local Buy-Sell Entity, and (ii) included in the calculation of the Monthly Cash Increase or Monthly Cash Decrease for the applicable Local Buy-Sell Entity. If any loan Liability with respect to the operation of the Deferred AbbVie Local Business remains outstanding as of the Local Closing Date, then such loan Liability shall be repaid in full by AbbVie Luxembourg or an Affiliate of AbbVie Luxembourg as part of the consummation of the Local Closing for such Local Buy-Sell Entity. Subject to the application of the foregoing, AbbVie Luxembourg may deliver a Notice to Abbott Luxembourg or the Venezuelan Local Entity requesting that the Venezuelan Local Entity enter into a loan agreement in the amount specified in such Notice, the proceeds of which to be used for the operation of the Deferred AbbVie Local Business.

 

(f)            The portion of the cost of the Local Buy-Sell Entity entering into financial hedging arrangements attributable to the operation of the Deferred AbbVie Local shall be taken into account for purposes of calculating the Monthly Cash Increase or the Monthly Cash Decrease, as applicable, for such Local Buy-Sell Entity.

 

(g)           The portion of the exchange gain or exchange loss incurred by the Local Buy-Sell Entity attributable to the operation of the Deferred AbbVie Local Business shall be taken into account for purposes of calculating the Monthly Cash Increase or the Monthly Cash Decrease, as applicable, for each Local Buy-Sell Entity.

 

(h)           If there is a dispute between the Parties in respect of any amount set forth in the Deferred AbbVie Business Report relating to the AbbVie Assets and AbbVie Liabilities of a Deferred AbbVie Local Business of a Local Buy-Sell Entity, the Monthly Cash Increase or Monthly Cash Decrease in respect of such Local Buy-Sell Entity shall be excluded from the calculation of the Aggregate Monthly Cash Increase or the Aggregate Monthly Cash Decrease until such time as the dispute has been resolved in accordance with Section 2.04(b) or Section 2.07(d) and Section 2.07(e). Upon resolution of the dispute, the Monthly Cash Increase(s) or Monthly Cash Increase(s) in respect of the Deferred AbbVie Local Business of such Local Buy-Sell Entity for all calendar months since the Distribution Date shall each be included in the

 

 

calculation of the next Aggregate Monthly Cash Increase or the Aggregate Monthly Cash Decrease.

 

(i)            In determining the amount of the Monthly Cash Increase or Monthly Cash Decrease, as applicable, of any Deferred AbbVie Local Business, any income Taxes accrued but unpaid attributable to such Deferred AbbVie Local Business (the “Accrued Taxes”) for such  period shall be determined using the statutory rates required by GAAP.   Except as provided below, no further adjustments shall be made for the difference, if any, between the Accrued Taxes for any Tax year and the actual amount paid with respect to such Taxes for such Tax year attributable to such Deferred AbbVie Local Business determined using the highest Tax rate of the applicable Abbott Local Entity (and not a rate determined solely for the Deferred AbbVie Local Business) (the “Actual Tax Amount”).  Within a reasonable period of time following the filing of the income Tax Return by an Abbott Local Entity that includes the results of the Deferred AbbVie Local Business, in whole or in part, (a) if the Actual Tax Amount with respect to the Deferred AbbVie Local Business is greater than the Accrued Taxes during such Tax year, AbbVie Luxembourg shall pay Abbott Luxembourg the amount of such difference, and (b) if the Actual Tax Amount with respect to the Deferred AbbVie Local Business is less than the Accrued Taxes during such Tax year, Abbott Luxembourg shall pay AbbVie Luxembourg the amount of such difference. All amounts paid by AbbVie Luxembourg or Abbott Luxembourg pursuant to the preceeding sentence shall be paid in US Dollars converted from Local Currency to US Dollars using the Average Rate in effect at the time such payment is made. All Taxes attributable to the operation of each Deferred AbbVie Local Business shall be calculated on a standalone basis.

 

(j)            To the extent that GAAP rules are modified by the Financial Accounting Standards Board during the International Operations Transition Period, the net income of the Deferred Local AbbVie Business of each Local Buy-Sell Entity reflected in the profit and loss statement shall be calculated, and each profit and loss statement, balance sheet and cash flow statement provided in accordance with Section 2.07(a) shall be prepared, in accordance with the principles set forth in this Schedule 2.05(b) and, to the extent not inconsistent with such principles, in accordance with GAAP applied on a basis consistent with the AbbVie Pro Forma Balance Sheet as updated to reflect such modifications to the GAAP rules and Abbott’s historical accounting policies, procedures and conventions.

 

3.                                      No interest shall be payable by AbbVie Luxembourg to Abbott Luxembourg in respect of the Assets of a Deferred AbbVie Local Business held by the Abbott Local Entities during the International Operations Transition Period.

 

 

Exhibit A

 

Brazilian Plan

 

Abbott Laboratórios do Brasil Ltda. transfers its Deferred AbbVie Local Business to a newly formed sister company of Abbott Laboratórios do Brasil Ltda (AbbVie Farmacêutica Ltda) in a demerger transaction. Following the completion of the demerger transaction, subsidiaries indirectly owned by AbbVie Inc. acquire the quotas of AbbVie Farmacêutica Ltda.

 

 

Exhibit B

 

Venezuelan Plan

 

Abbott Laboratories, CA contributes the Deferred AbbVie Local Business to a newly formed subsidiary (AbbVie Pharmaceuticals SCA) in exchange for shares. Following the completion of the contribution, a Dutch subsidiary indirectly owned by AbbVie Inc. acquires the shares of AbbVie Pharmaceuticals SCA.Exhibit 10.8

 

EXECUTION VERSION

 

INFORMATION TECHNOLOGY AGREEMENT

 

DATED AS OF DECEMBER 31, 2012

 

by and between

 

ABBOTT LABORATORIES

 

and

 

ABBVIE INC.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I. DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II. SERVICES
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Services
    	
4
    
	
Section 2.02
    	
Transition Services Agreements and Conflicts
    	
5
    
	
Section 2.03
    	
Performance of Services
    	
5
    
	
Section 2.04
    	
Charges for Services and Performance of Separation Projects
    	
6
    
	
Section 2.05
    	
Change Control Procedures
    	
7
    
	
Section 2.06
    	
Transitional Nature of Services
    	
7
    
	
Section 2.07
    	
Cooperation
    	
7
    
	
Section 2.08
    	
Use of Third Parties
    	
7
    
	
Section 2.09
    	
Security Procedures
    	
8
    
	
Section 2.10
    	
Consents
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE III. OWNERSHIP AND   LICENSE RIGHTS IN MATERIALS
    	
9
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Owned Materials
    	
9
    
	
Section 3.02
    	
Developed Materials
    	
10
    
	
Section 3.03
    	
General Rights and Obligations Regarding Materials
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE IV. BILLING; TAXES
    	
11
    
	
 
    	
 
    
	
Section 4.01
    	
Procedure
    	
11
    
	
Section 4.02
    	
Late Payments
    	
12
    
	
Section 4.03
    	
Taxes
    	
12
    
	
Section 4.04
    	
No Set-Off
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE V. TERM; TERMINATION OF   WORK PLANS; TRANSFER ASSISTANCE
    	
12
    
	
 
    	
 
    
	
Section 5.01
    	
Term
    	
12
    
	
Section 5.02
    	
Termination of Work Plans
    	
13
    
	
Section 5.03
    	
Post-Termination Services
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE VI. CONFIDENTIALITY;   PROTECTIVE ARRANGEMENTS
    	
14
    
	
 
    	
 
    
	
Section 6.01
    	
Confidentiality Obligations
    	
14
    
	
Section 6.02
    	
No Release, Return or Destruction
    	
14
    
	
Section 6.03
    	
Third-Party Information; Privacy or Data Protection Laws
    	
14
    
	
Section 6.04
    	
Protective Arrangements
    	
15
    

 

i

 

	
ARTICLE VII. MISCELLANEOUS
    	
15
    
	
 
    	
 
    
	
Section 7.01
    	
Mutual Cooperation
    	
15
    
	
Section 7.02
    	
Limitations on Liability
    	
15
    
	
Section 7.03
    	
Indemnification Procedures
    	
16
    
	
Section 7.04
    	
Force Majeure
    	
16
    
	
Section 7.05
    	
Acceptance
    	
16
    
	
Section 7.06
    	
Audit Assistance
    	
17
    
	
Section 7.07
    	
Survival of Covenants
    	
17
    
	
Section 7.08
    	
Title to Intellectual Property
    	
17
    
	
Section 7.09
    	
Subsidiaries
    	
17
    
	
Section 7.10
    	
Headings
    	
17
    
	
Section 7.11
    	
Independent Contractors
    	
17
    
	
Section 7.12
    	
No Third Party Beneficiaries
    	
18
    
	
Section 7.13
    	
Governing Law
    	
18
    
	
Section 7.14
    	
Disputes; Equitable Relief
    	
18
    
	
Section 7.15
    	
Interpretation
    	
18
    
	
Section 7.16
    	
Survival
    	
19
    
	
Section 7.17
    	
Assignment
    	
19
    
	
Section 7.18
    	
Amendment
    	
19
    
	
Section 7.19
    	
Waivers of Default
    	
19
    
	
Section 7.20
    	
Notices
    	
19
    
	
Section 7.21
    	
Counterparts
    	
20
    
	
Section 7.22
    	
Entire Agreement
    	
20
    
	
Section 7.23
    	
Corporate Power
    	
21
    
	
Section 7.24
    	
Signatures and Delivery
    	
21
    
	
Section 7.25
    	
Severability
    	
21
    
	
Section 7.26
    	
Further Assurances
    	
21
    
	
Section 7.27
    	
Public Announcements
    	
22
    
	
Section 7.28
    	
Mutual Drafting
    	
22
    

 

ii

 

THIS INFORMATION TECHNOLOGY AGREEMENT, dated as of December 31, 2012 and effective as of the Effective Time, is by and between ABBOTT LABORATORIES, an Illinois corporation (“Abbott”), and ABBVIE INC., a Delaware corporation (“AbbVie”).

 

RECITALS:

 

WHEREAS, the board of directors of Abbott has determined that it is appropriate and advisable to separate Abbott’s research-based pharmaceuticals business from its other businesses;

 

WHEREAS, in order to effectuate the foregoing, Abbott and AbbVie have entered into a Separation and Distribution Agreement, dated as of November 28, 2012 (the “Separation and Distribution Agreement”), which provides for, among other things, the contribution from Abbott to AbbVie of certain assets, the assumption by AbbVie of certain Liabilities from Abbott, the distribution by Abbott of AbbVie common stock to Abbott shareholders, and the execution and delivery of certain other agreements in order to facilitate and provide for the foregoing, in each case subject to the terms and conditions set forth therein;

 

WHEREAS, in order to ensure an orderly transition under the Separation and Distribution Agreement it will be necessary for each of the Parties (as defined herein) to cooperate to provide for the separation of various information technology systems and services that are currently shared between the Parties, are provided by one Party to the other or are planned to be implemented by both Parties; and

 

WHEREAS, the Parties intend that all separation activities to be completed under this Agreement shall be completed by the end of the two-year term of this Agreement.

 

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

 

ARTICLE I.

 

DEFINITIONS.

 

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

 

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

 

“Abbott Business” has the meaning set forth in the Separation and Distribution Agreement.

 

 “Abbott GIS Standard Rates” means the list of hourly charges agreed upon by Abbott Global Information Services and Abbott’s finance and business organization for the provision of information technology services by Abbott Global Information Services personnel to business units and divisions of Abbott, for the period commencing January 1, 2013 and ending December 31, 2013, as such rates are adjusted or amended from time to time.

 

 

“Abbott Owned Materials” has the meaning set forth in Section 3.01(a).

 

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

 

“AbbVie Business” has the meaning set forth in the Separation and Distribution Agreement.

 

“AbbVie IT Agreement” means any IT Agreement which is held in the name of Abbott or any Abbott Subsidiary, and which is used exclusively in connection with, or relates solely to, the AbbVie Business.

 

“AbbVie Owned Materials” has the meaning set forth in Section 3.01(b).

 

“Agreement” means this Information Technology Agreement and each of the Schedules hereto.

 

“Ancillary Agreements” has the meaning set forth in the Separation and Distribution Agreement.

 

“Approved Supplier List” means the list of suppliers approved by Abbott GIS for work on the Parties’ information technology systems and services, as of the Effective Time.

 

“Assignment Efforts” has the meaning set forth in Section 2.10(b).

 

“Change of Control” has the meaning set forth in the Separation and Distribution Agreement.

 

“Charges” has the meaning set forth in Section 2.04(a).

 

“Consents” has the meaning set forth in the Separation and Distribution Agreement.

 

“Derivative Work” means a work based on one or more preexisting works, including a condensation, transformation, translation, modification, expansion or adaptation that, if prepared without authorization of the owner of the copyright of such preexisting work, would constitute a copyright infringement under applicable law, but excluding the preexisting work.

 

“Developed Materials” means any Materials (including software), or any modifications, enhancements or Derivative Works thereof, which (a) are jointly developed by or on behalf of the Parties or any of their Subsidiaries in connection with or as part of the Services and (b) are not otherwise Abbott Owned Materials or AbbVie Owned Materials.

 

“Effective Time” has the meaning set forth in the Separation and Distribution Agreement.

 

“Expiration Date” has the meaning set forth in the Section 5.01.

 

“Governmental Authority” has the meaning set forth in the Separation and Distribution Agreement.

 

“Group A Work Plan” has the meaning set forth in Section 2.04(a)(i).

 

2

 

“Group B Work Plan” has the meaning set forth in Section 2.04(a)(ii).

 

“Group C Work Plan” has the meaning set forth in Section 2.04(a)(iii).

 

 “IT Agreement” means any software license or Third Party service agreement that is:  (a) used by either Party or its Subsidiaries (i) to provide Services or Materials under this Agreement; or (ii) used to provide any information technology services under the TSA; or (b) required in connection with the operation of the information technology systems and services of the AbbVie Business.

 

“Liabilities” has the meaning set forth in the Separation and Distribution Agreement.

 

“Materials” shall mean all computing, networking, telecommunications and other equipment (firmware and hardware); all software programs and programming (and all modifications, replacements, upgrades, enhancements, documentation, materials and media related thereto), including all machine readable and object code, and all source code, utilities, tools and validation packages; and all other literary works, other works of authorship, specifications, design documents and analyses, processes, methodologies, programs, program listings, programming tools, user manuals, documentation, reports, drawings, databases, machine readable text and files, data and similar items.

 

“Parties” means the parties to this Agreement.

 

“Party” means each Party to this Agreement.

 

“Person” has the meaning set forth in the Separation and Distribution Agreement.

 

“Primary Beneficiary” means, with respect to Services set forth in any Work Plan, the Party for which the provision of such Services would facilitate such Party’s ability to operate independently.

 

“Prime Rate” has the meaning set forth in the Separation and Distribution Agreement.

 

“Provider” has the meaning set forth in Section 5.01.

 

“Provider Upgrade Charges” has the meaning set forth in Section 2.04(a)(i).

 

“Recipient” has the meaning set forth in Section 5.01.

 

“Representative” has the meaning set forth in Section 6.01.

 

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

 

“Separation Project” means each individual project that is described in the Separation Projects Plan, and that is or will be described in greater detail in one or more Work Plans.

 

“Separation Projects Plan” means the high level description of information technology separation projects and the associated timeline for completing those projects that the Parties will undertake pursuant to this Agreement to accomplish the separation of the information technology 

 

3

 

systems and services, as such initial list is set forth in Schedule A, and as the same may be amended from time to time.

 

“Service Extension” has the meaning set forth in Section 5.01.

 

“Services” means the services related to the separation of Abbott’s and AbbVie’s information technology systems and services.

 

“Shared IT Agreement” means any IT Agreement that is held in the name of Abbott or any Abbott Subsidiary, which is used in connection with the Abbott Business and the AbbVie Business.

 

“Subsidiary” has the meaning set forth in the Separation and Distribution Agreement.

 

“Taxes” has the meaning set forth in the Separation and Distribution Agreement.

 

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

 

“TSA” has the meaning set forth in Section 2.02.

 

“TSA Service” has the meaning set forth in Section 2.04(a)(i).

 

“U.S.” or “United States” has the meaning set forth in the Separation and Distribution Agreement.

 

“Work Plan” means each document in the form set forth in Schedule B that is executed by the Parties pursuant to this Agreement, including each applicable “RFSS”, “Contract” or similar document referenced on such Work Plan, that details the work effort and further describes the Services to be performed by Abbott and/or AbbVie in connection with a particular Separation Project(s).

 

ARTICLE II.

 

SERVICES.

 

Section 2.01          Services.  Each of the Parties agrees to provide, or cause its respective Subsidiaries to provide, the applicable Services set forth in any Work Plan to Abbott or AbbVie, respectively, and/or any of their Subsidiaries, as designated in the Work Plan.  Each of the Parties further agrees to use good faith in negotiating any Work Plans which are not completed as of the date hereof.  The Parties will cooperate in good faith to identify any additional services that may be reasonably required to facilitate a smooth transition and, for each such service, will:  (a) negotiate one or more Work Plans setting forth the service, with the terms thereof to be determined by the Parties and (b) amend the Separation Projects Plan to include the service, to the extent necessary.  This Agreement is a master agreement.  Each of the Parties, respectively, shall be responsible and liable for all the obligations under this Agreement of each of their respective Subsidiaries that performs Services hereunder.

 

4

 

Section 2.02          Transition Services Agreements and Conflicts.  The Parties have entered into that certain U.S. Transition Services Agreement and that certain Ex-U.S. Transition Services Agreement (collectively, the “TSA”) dated as of the same date as this Agreement.  The TSA is intended to cover all services described therein that the Parties will require to continue to operate their respective businesses after the Effective Time including, without limitation, information technology services.  This Agreement is intended to cover the additional work effort that must be performed, and Materials that must be developed or procured, to separate the information technology systems and services that (a) are provided by one of the Parties or one or more of its Subsidiaries, to the other Party or one or more of its Subsidiaries, under the TSA, (b) are shared at the Effective Time between the Parties and/or their respective Subsidiaries or (c) are to be implemented by mutual agreement of the Parties.  If there is a conflict regarding Services provided under this Agreement, and similar services described in the TSA, this Agreement shall govern and control over such Services.  If there is a conflict between the provisions of this Agreement and those of the Separation and Distribution Agreement, this Agreement shall govern and control with respect to the subject matter addressed in this Agreement.

 

Section 2.03          Performance of Services.

 

(a)           Each of the Parties shall, and shall cause its Subsidiaries to, perform its duties and responsibilities hereunder in good faith and in a timely manner.  Neither Abbott nor AbbVie, nor any of their respective Subsidiaries, shall be liable or held accountable, in damages or otherwise, for any error of judgment or any mistake of fact or law or for anything that Abbott or AbbVie, or any of their respective Subsidiaries, does or refrains from doing in good faith, except in the case of their gross negligence or willful misconduct.

 

(b)           Nothing in this Agreement shall require either Party or its Subsidiaries to perform or cause to be performed any Service in a manner that would constitute a potential violation of applicable law, the Abbott Code of Business Conduct or any existing contract or agreement with a Third Party.  If either Party is or becomes aware of any such potential violation, then such Party shall use commercially reasonable efforts to promptly send a Notice to the other Party of any such restriction.

 

(c)           (i) Neither Party nor any of its Subsidiaries will be required to perform or to cause to be performed any of the Services for the benefit of any Third Party or any other Person other than the other Party under this Agreement, and its Subsidiaries, and (ii) EXCEPT AS EXPRESSLY PROVIDED IN AN APPLICABLE WORK PLAN, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL SERVICES ARE PROVIDED ON AN “AS-IS” BASIS, THAT EACH PARTY ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES PROVIDED TO IT AND THAT EACH PARTY MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES, AND HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER.

 

(d)           Each Party shall have the right to engage agents, suppliers, subcontractors or independent contractors to provide services that are outside the scope of the Services, 

 

5

 

provided that neither Party nor such Third Parties will, either individually or in connection with one or more other agents, suppliers, subcontractors or independent contractors (including the Third Parties described in Section 2.08(a), materially adversely affect the Services without the other Party’s reasonable consent; and provided, further, that the engaging Party shall be solely responsible for all such agents, suppliers, subcontractors or independent contractors.

 

Section 2.04          Charges for Services and Performance of Separation Projects.

 

(a)           Charges; Estimates.  Each Work Plan shall specify the Party that shall bear the costs and expenses of the Services, including the acquisition, procurement, leasing or licensing of Materials, and all other costs and expenses associated with a Party completing a particular Separation Project (all such costs and expenses are collectively referred to as the “Charges”).  Unless agreed otherwise in writing by the Parties, the Charges set forth on a Work Plan shall be allocated as follows:

 

(i)            If a Work Plan sets forth services to be performed in order to separate the information technology systems and services that are provided by one of the Parties or one or more of its Subsidiaries, to the other Party or one or more of its Subsidiaries, under the TSA (each such system or service, a “TSA Service” and each such Work Plan, a “Group A Work Plan”), then the Party that is the “Recipient” of the TSA Service under the TSA (or in the case of a TSA Service provided to a Subsidiary of one of the Parties, the Party whose Subsidiary is the recipient of the TSA Service) shall be solely responsible for the Charges set forth on that Group A Work Plan; provided, however, that the Provider shall be solely responsible for any Charges with respect to that Group A Work Plan that are incurred in order to optimize, enhance or upgrade the Provider’s own information technology systems or services (“Provider Upgrade Charges”).

 

(ii)           If a Work Plan is not a Group A Work Plan and is intended to establish an information technology system or service that one Party does not possess at the Effective Time (a “Group B Work Plan”), then such Party shall be solely responsible for the Charges set forth on that Group B Work Plan; provided, however, that the Provider shall be solely responsible for any Provider Upgrade Charges with respect to such Group B Work Plan.

 

(iii)          If a Work Plan is intended to provide both Parties with an information technology system or service (a “Group C Work Plan”), then the Parties shall cooperate to apportion the applicable Charges specified on that Group C Work Plan between the Parties in a manner that is fair to each Party.

 

Any dispute or disagreement over the Charges for a Service or whether a Work Plan is a Group A Work Plan, a Group B Work Plan or a Group C Work Plan shall be resolved pursuant to Section 7.14(a).  The Charges for completing Separation Projects shall be borne by the Parties according to terms to be agreed upon by the parties, which terms will be determined annually on the basis of the Abbott GIS Standard Rates (as applied to both Abbott and AbbVie) and as adjusted in accordance with historical practice; provided, that the Charges shall exclude any and all amounts for services performed by a Third Party that is not an agent, supplier, subcontractor or independent contractor of the Party providing the Services under such Work Plan.

 

6

 

The Charges set forth in a Work Plan shall be a good faith estimate of the charges for the Services covered by that Work Plan, and shall neither be binding on the Party providing such estimate nor convert the Work Plan into a fixed-price contract.  Any such estimate is for informational purposes only, and the actual fees payable for any Services may be higher or lower than that estimate, with such higher amounts, if applicable, to be paid by the Party responsible for such Charges under the applicable Work Plan.  The Charges shall be calculated and billed in the local currency of the Party providing the Services.

 

(b)           Reporting Obligations.  The Parties shall be responsible for overseeing the Separation Projects and the progress of the Services in light of the estimated Charges.  Each Party shall report to the other Party regarding the status of each Separation Project in the manner and with the frequency described in the applicable Work Plan (including the identification of any known overages in the estimated Charges and an updated estimate to complete such Separation Project), and, in any event, no less frequently than monthly during the term of this Agreement.  Unless otherwise agreed in writing, the Parties shall provide such reporting using the form of status report attached hereto as Schedule C.

 

Section 2.05          Change Control Procedures.  During the term of this Agreement, Abbott and/or AbbVie may desire a change in the scope, timing and/or charges for the effort, including modifying, updating and/or refining any Work Plan or the Separation Projects Plan.  Requests for all changes shall be made in writing and delivered to the Parties.  The Parties shall review the proposed change and:  (a) approve it; (b) return it with a request for more detail or information; or (c) reject it.  The Parties shall agree on any Charges for such change, including the charges for investigating such change if applicable.  If the change is authorized, the Parties shall so indicate in writing, which writing shall constitute approval for the change and the applicable Charges.  The writing shall also indicate the effect that the change will have on the other terms and conditions of the applicable Work Plan(s).

 

Section 2.06          Transitional Nature of Services.  The Parties acknowledge the transitional nature of the Services and agree to cooperate in good faith and to use commercially reasonable efforts to effectuate a smooth transition and completion of the Separation Projects.

 

Section 2.07          Cooperation.  In the event that (a) there is nonperformance of any Service as a result of an event described in Section 7.04, or (b) the provision of a Service would violate applicable law, the Parties agree to work together in good faith to arrange for an alternative means by which the Separation Project may be accomplished.

 

Section 2.08          Use of Third Parties.

 

(a)           Third Parties Used to Provide the Services.  Either Party may perform its obligations herein through its Subsidiaries or through agents, suppliers, subcontractors or independent contractors of such Party, or of its Subsidiaries; provided that each such agent, supplier, subcontractor or independent contractor (and the individual employees of such Persons) used by a Party shall be subject to the reasonable prior approval of the other Party.  The Parties hereby approve the use of any of the suppliers listed on the Approved Supplier List; provided, however, that each Party reserves the right to reasonably approve or reject individual employees of such suppliers.  In addition, if in connection with the provision of Services or Materials

 

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a Party uses any agent, supplier, subcontractor or independent contractor who has been fired, dismissed or relieved of its obligations by the other Party or its Subsidiary due to poor performance or other cause, the other Party shall be entitled to cause the hiring Party to promptly remove and replace such agent, supplier subcontractor or independent contractor.

 

(b)           Terms Applicable to All Third Parties Used By a Party.  Each Party shall cooperate with and work in good faith with the agents, suppliers, subcontractors and independent contractors engaged by the other Party in connection herewith or in connection with related services that require the cooperation of such Party.  Such cooperation may include providing reasonable access to the facilities, systems, equipment and/or software required by the other Party to provide the Services or such related services, solely to the extent necessary for such agents, suppliers, subcontractors and independent contractors to perform the work assigned to them.  The engaging Party shall cause all such agents, suppliers, subcontractors and independent contractors to comply with the other Party’s security and confidentiality requirements and technical policies and procedures.  Notwithstanding anything in this Agreement to the contrary, a Party shall not be relieved of its obligations under this Agreement by use of any Subsidiaries, agents, suppliers, subcontractors or independent contractors.

 

Section 2.09          Security Procedures.  Each Party’s respective security administration groups shall, subject to the reasonable approval of the other Party, establish and maintain environmental, safety and facility procedures, data security procedures and other safeguards against the destruction, loss, unauthorized access or alteration of systems or Materials of the other Party which are (a) no less rigorous than those maintained by a Party for its own information of a similar nature and (b) adequate to meet the requirements of the other Party’s security policies and applicable law.  In the event a Party discovers or is notified of a breach or potential breach of security relating to systems or Materials of the other Party, such Party will expeditiously under the circumstances notify the other Party, and will cooperate in the investigation and remediation of the effects of such breach or potential breach of security at its own expense.

 

Section 2.10          Consents.

 

(a)           AbbVie IT Agreements.  Subject to the Parties obtaining any required Consents, Abbott or the applicable Abbott Subsidiary shall assign to AbbVie or the applicable AbbVie Subsidiary any AbbVie IT Agreement.  The assignment, and the costs of obtaining any required Consent in connection with the assignment, shall be subject to the terms of the Separation and Distribution Agreement, and the rights and obligations under such IT Agreement shall be AbbVie Assets and AbbVie Liabilities and, if applicable, Delayed Transfer Assets and Delayed Transfer Liabilities, as such terms are defined in the Separation and Distribution Agreement.  If, despite using their commercially reasonable efforts, the Parties are unable to obtain a Consent in connection with an AbbVie IT Agreement, then, unless and until such Consent is obtained, the Parties shall use their commercially reasonable efforts to use mutually acceptable alternative approaches to provide the Services or to deliver substantially similar benefits at the sole cost and expense of AbbVie.

 

(b)           Shared IT Agreements.  Subject to the Parties obtaining any required Consents, Abbott or the applicable Abbott Subsidiary shall assign to AbbVie or the applicable AbbVie Subsidiary that portion of any Shared IT Agreement that relates to the AbbVie Business.

 

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The partial assignment, and the costs of obtaining any required Consent in connection with the partial assignment, shall be subject to the terms of the Separation and Distribution Agreement, and the rights and obligations under the assigned portion of such IT Agreement shall be AbbVie Assets and AbbVie Liabilities and, if applicable, Delayed Transfer Assets and Delayed Transfer Liabilities, as such terms are defined in the Separation and Distribution Agreement.  If, despite using their commercially reasonable efforts, the Parties are unable to obtain a Consent in connection with a Shared IT Agreement, then, unless and until such Consent is obtained, the Parties shall use their commercially reasonable efforts to use mutually acceptable alternative approaches to provide the Services or to deliver substantially similar benefits.  The Parties shall use their commercially reasonable efforts to cooperate in obtaining Consents in connection with Shared IT Agreements (“Assignment Efforts”).  Following the Effective Time, and the foregoing in this Section 2.10(b) notwithstanding, any transfer fee to a Third Party to allow joint-use by Abbott and AbbVie of a Shared IT Agreement prior to the partial assignment of such Shared IT Agreement shall be split equally between Abbott and AbbVie.

 

ARTICLE III.

 

OWNERSHIP AND LICENSE RIGHTS IN MATERIALS.

 

Section 3.01          Owned Materials.

 

(a)           Abbott shall be the sole and exclusive owner of Materials which are used in connection with the Services and are owned by Abbott, or licensed from Third Parties by Abbott or any of its Subsidiaries, including all enhancements and Derivative Works of such Materials, including United States and foreign intellectual property rights in such Materials, and shall retain all of Abbott’s, its Subsidiaries’ and Third Party licensors’ rights in such Materials (all such owned, licensed, developed and provided Materials, “Abbott Owned Materials”).  Subject to the terms of any Consents, Abbott grants to AbbVie, its Subsidiaries and their contractors and agents a non-exclusive, non-transferable, worldwide, limited right and license to use, execute, reproduce, display, perform, modify and distribute the Abbott Owned Materials for the sole purpose of providing and/or receiving the Services during the term of this Agreement; provided that this license does not give AbbVie and its Subsidiaries, or their contractors or agents, the right, and AbbVie and its Subsidiaries, and their contractors and agents, are not authorized, to sublicense such Materials or use them for the benefit of other customers or for any other purpose without Abbott’s prior written consent.  Abbott may, in its sole discretion and upon such terms and at such prices as the Parties may agree, grant AbbVie a license to use the Abbott Owned Materials for other purposes and to sublicense such Materials.

 

(b)           AbbVie shall be the sole and exclusive owner of Materials which are used in connection with the Services and are owned by AbbVie, or licensed from Third Parties by AbbVie or any of its Subsidiaries, including all enhancements and Derivative Works of such Materials, including United States and foreign intellectual property rights in such Materials and shall retain all of AbbVie’s, its Subsidiaries’ and Third Party licensors’ rights in such Materials (all such owned, licensed, developed and provided Materials, “AbbVie Owned Materials”).  Subject to the terms of any Consents, AbbVie grants to Abbott, its Subsidiaries and their contractors and agents a non-exclusive, non-transferable, worldwide, limited right and license to use, execute, reproduce, display, perform, modify and distribute the AbbVie Owned

 

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Materials for the sole purpose of providing and/or receiving the Services during the term of this Agreement; provided that this license does not give Abbott and its Subsidiaries or their contractors or agents, the right, and Abbott and its Subsidiaries, and their contractors and agents, are not authorized, to sublicense such Materials or use them for the benefit of other customers or for any other purpose without AbbVie’s prior written consent.  AbbVie may, in its sole discretion and upon such terms and at such prices as the Parties may agree, grant Abbott a license to use the AbbVie Owned Materials for other purposes and to sublicense such Materials.

 

Section 3.02          Developed Materials.

 

(a)           Ownership.  The Parties shall jointly own all intellectual property rights in all Developed Materials.  The Parties will, without limitation, retain the right to make, have made, use, lease, import, offer for sale, or sell, have sold and practice methods used in the creation or provision of products or services that incorporate the Developed Materials to the extent that such actions do not infringe upon the intellectual property rights of the other Party.  Each Party shall retain the right to grant non-exclusive licenses to any intellectual property right in the Developed Materials without any payment or accounting to the other Party.

 

(b)           Cost Sharing of Developed Materials.  The Parties shall mutually agree on whether and in which countries to file and prosecute patent applications covering all jointly owned intellectual property in the Developed Materials, and to maintain patents granted thereunder.  Each party shall have an opportunity to review and comment on any such filings prior to submission and to discuss the strategy for preparing, filing, prosecuting, maintaining and defending any such patent applications or resulting patents, and the Parties shall share equally any out-of-pocket costs and expenses incurred with respect to such actions.

 

(c)           Embedded Materials.  To the extent that Abbott Owned Materials or AbbVie Owned Materials are embedded in any Developed Materials by the owner of such Materials, the owner of such Materials shall not be deemed to have assigned its intellectual property rights in such owned Materials to the other Party, but subject to the terms and restrictions of any Consent, the owner of such embedded Materials hereby grants to the other Party and its Subsidiaries a worldwide, perpetual, irrevocable, non-exclusive, fully paid-up license, with the right to grant sublicenses, to use, execute, reproduce, display, perform, modify, enhance, distribute and create Derivative Works of such embedded Materials for the benefit and use of the other Party and its Subsidiaries for so long as such Materials remain embedded in such Developed Materials.  Notwithstanding the foregoing, neither Party shall embed any Abbott Owned Materials or AbbVie Owned Materials into Developed Materials without the express written agreement of both Parties to do so, as set forth in the applicable Work Plan.  In addition, should either Party incorporate into Developed Materials any intellectual property subject to Third Party patent, copyright or license rights, any ownership or license rights granted herein with respect to such Materials shall be limited by and subject to any such patents, copyrights or license rights; provided that, prior to incorporating any such intellectual property in any Materials, the Party incorporating such intellectual property in the Materials has disclosed this fact and obtained the prior written approval of the other Party and has obtained any Consents.

 

(d)           Source Code and Documentation.  If either Party requests that the source code for particular Materials be placed in escrow for the benefit of the requesting Party, then

 

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the Parties shall cooperate in good faith to establish such source code escrow arrangements on terms and conditions that shall be reasonably acceptable to both Parties.

 

Section 3.03          General Rights and Obligations Regarding Materials.

 

(a)           Copyright Legends.  Each Party agrees to reproduce copyright legends which appear in the ordinary course on any portion of the Materials which may be owned by the other Party or Third Parties.

 

(b)           No Implied Licenses.  Except as expressly specified in this Agreement, nothing in this Agreement shall be deemed to grant to one Party, by implication, estoppel or otherwise, license rights, ownership rights or any other intellectual property rights in any Materials owned by the other Party or any Subsidiary of the other Party.

 

(c)           Residuals.  Nothing in this Agreement shall restrict any employee or representative of a Party from using general ideas, concepts or know-how relating to the Services or Materials that are retained solely in the unaided memory of such employee or representative after performing the obligations of a Party under this Agreement, except to the extent that such use infringes upon any patent, copyright or other intellectual property right of a Party or its Subsidiaries; provided, however, that this Section shall not be deemed to limit either Party’s obligations under this Agreement with respect to the disclosure or use of confidential information or Materials of the other Party.  An individual’s memory is unaided if the individual has not intentionally memorized the confidential information or subject Materials for the purpose of retaining and subsequently using or disclosing it.

 

(d)           Required Consents.  Each Party shall use commercially reasonable efforts to obtain all Consents necessary in connection with (i) in the case of Abbott, all Abbott Owned Materials, and (ii) in the case of AbbVie, all AbbVie Owned Materials.  Each of the Parties will reasonably cooperate with the other in obtaining such Consents.

 

ARTICLE IV.

 

BILLING; TAXES.

 

Section 4.01          Procedure.  Each Work Plan shall set forth (a) the types of, (b) where possible, an estimate of, and (c) an allocation of, the Charges that each Party will be financially responsible for in connection with the Services and the Materials to be developed, procured or provided pursuant to a Work Plan.  Where Charges are to be paid to a Third Party for Services or Materials under a Work Plan, the Party listed as the responsible Party under the Work Plan shall pay such Charges directly to the Third Party.  Where Charges are to be paid to the other Party, the Party who is entitled to reimbursement for Services or other Charges pursuant to a Work Plan shall issue an invoice detailing such charges to the other Party.  Amounts payable pursuant to the terms of this Agreement shall be paid to the invoicing Party on a monthly basis, which amounts shall be due within thirty (30) days after the date of invoice.  All amounts due and payable hereunder shall be invoiced and paid in U.S. dollars.

 

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Section 4.02          Late Payments.  Charges not paid when due pursuant to this Agreement shall bear interest at a rate per annum equal to the Prime Rate plus two percent (2%), or the maximum legal rate whichever is lower.

 

Section 4.03          Taxes.  The Party invoiced for Charges under a particular Work Plan shall be responsible for and pay any and all Taxes incurred in connection with the Services under that Work Plan, including all sales, use, value-added and similar Taxes, but excluding Taxes based on the other Party’s net income and non-income Taxes imposed on the other Party for goods or services used or consumed in providing the services.  Notwithstanding anything to the contrary in the previous sentence or elsewhere in this Agreement, the Recipient shall be entitled to withhold from any payments to the Provider any such Taxes that Recipient is required by Law to withhold and shall pay such Taxes to the applicable Tax Authority.

 

Section 4.04          No Set-Off.  Except as mutually agreed to in writing by Abbott and AbbVie, no Party or any of its Subsidiaries shall have any right of set off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or (b) any other amounts claimed to be owed to the other Party or any of its Subsidiaries arising out of this Agreement.

 

ARTICLE V.

 

TERM; TERMINATION OF WORK PLANS; TRANSFER ASSISTANCE.

 

Section 5.01          Term.  This Agreement will expire two (2) years after the Effective Time (the “Expiration Date”).  In the event that, despite commercially reasonable efforts by both Parties, there are uncompleted Work Plans at the Expiration Date, the Party receiving Services pursuant to the uncompleted Work Plan (the “Recipient”) may elect to extend the term of this Agreement one time with respect to a Group A Work Plan or Group B Work Plan (any such extension, a “Service Extension”) by notifying the Party providing Services (the “Provider”) no later than three (3) months prior to the Expiration Date.  The term of this Agreement may only be extended with respect to an uncompleted Group C Work Plan by mutual agreement.

 

(a)           If the requested Service Extension is for a period of twelve (12) months or less past the Expiration Date and the applicable services are not set forth in a Group C Work Plan, then the Provider shall be obligated to provide such requested Service Extension and the Parties shall in good faith (i) negotiate the terms of an amendment to the applicable Work Plan, which amendment shall be consistent with the terms of the applicable Service, and (ii) determine the costs and expenses (which shall not include any Charges payable under this Agreement), if any, that would be incurred by the Provider or the Recipient, as the case may be, in connection with the provision of such Service Extension, which costs and expenses shall be determined pursuant to Section 2.04(a), except that all references to “Service” therein shall refer to the Service Extension.

 

(b)           If the requested Service Extension is for a period of longer than twelve (12) months past the Expiration Date or the applicable services are set forth in a Group C Work Plan, then the Parties shall determine whether the Provider shall provide the applicable Service for the requested Service Extension period.  If the Parties determine that the Provider shall provide such Service during the requested Service Extension period, then the Parties shall in

 

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good faith (i) negotiate the terms of an amendment to the applicable Work Plan, which amendment shall be consistent with the terms of the applicable Service and promptly provide a copy thereof to the Parties, and (ii) determine the costs and expenses (which shall not include any Charges payable under this Agreement), if any, that would be incurred by the Provider or the Recipient, as the case may be, in connection with the provision of such Service Extension, which costs and expenses shall be determined pursuant to Section 2.04(a).  Each amended Work Plan, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such amendment and any Services provided pursuant to such Service Extensions shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.  The Parties acknowledge and agree that (A) there may be interdependencies among the Services being provided under this Agreement, (B) the ability to extend the provision of a particular Service in accordance with this Agreement may be dependent on the extension of another Service, (C) upon the request of either Party, the Parties shall determine whether any such interdependencies exist with respect to the particular Service that the Recipient is seeking to extend in accordance with this Section 5.01 and (D) to the extent the Parties have determined that such interdependencies exist, the Parties shall negotiate in good faith to amend the applicable Work Plan relating to such other Service, which amendment shall be consistent with the terms of comparable Services.

 

(c)           No later than three (3) months prior to the Expiration Date, the Parties shall meet and confer to discuss the status of all uncompleted Work Plans and, where feasible, develop a plan to complete such Work Plans on or before the Expiration Date.

 

Section 5.02          Termination of Work Plans.

 

(a)           Termination for Convenience.  Upon receipt by the Provider of at least ninety (90) days’ prior written notice, the Recipient under a Group A Work Plan or Group B Work Plan may terminate such Work Plan without the consent of the Provider; provided that (i) the Recipient shall be solely responsible for completing such Work Plan during the term of this Agreement, (ii) upon receipt of such notice, the Provider shall be released from all responsibility in connection with the terminated Work Plan, except as provided in Section 5.02(b), and (iii) the Recipient shall reimburse the Provider for any incremental costs or fees actually incurred by the non-terminating Party as a result of such early termination (e.g., fixed charges that are not cancellable without a charge or fee and which would have been offset by payment to the Provider of Charges set forth in the terminated Work Plan).

 

(b)           Transfer Assistance.  Upon receipt of a notice to terminate a Work Plan pursuant to Section 5.02(a), each Party shall provide to the other Party such assistance as is reasonably necessary to permit the orderly transfer of the Services to be performed under such Work Plan to the terminating Party, including providing reasonable access to any facilities, systems, data equipment and/or software being used by the other Party to provide the Services under the terminated Work Plan; provided that the terminating Party shall comply with the other Party’s security and confidentiality requirements in connection with such access.

 

(c)           Termination of Group C Work Plans.  A Party may terminate a Group C Work Plan only with the prior written consent of the other Party.

 

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Section 5.03          Post-Termination Services.  No later than nine (9) months after the Effective Time, the Parties shall discuss in good faith the possibility of AbbVie receiving from Abbott, following termination of the TSA and expiration of this Agreement, information technology services of a type and nature to be discussed.  Neither party shall have any obligation to agree to any such services.

 

ARTICLE VI.

 

CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS.

 

Section 6.01          Confidentiality Obligations.  Subject to Section 6.03 and except as contemplated by or otherwise provided in this Agreement, Abbott, on behalf of itself and each of the Abbott Subsidiaries, and AbbVie, on behalf of itself and each of the AbbVie Subsidiaries, agrees to hold, and to cause its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives (each, a “Representative”) to hold, in strict confidence, with at least the same degree of care that applies to Abbott’s confidential and proprietary information pursuant to policies in effect as of the date hereof, all confidential and proprietary information and Materials concerning the other Party (or its business) and the other Party’s Subsidiaries (or their respective businesses) that is either in its possession (including confidential and proprietary information and Materials in its possession prior to the date hereof) or furnished by the other Party or the other Party’s Subsidiaries or their respective Representatives at any time pursuant to this Agreement, and shall not use any such confidential and proprietary information or Materials other than for such purposes as may be expressly permitted hereunder or thereunder, except, in each case, to the extent that such confidential and proprietary information or Materials has been:  (a) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any of its Subsidiaries or any of their respective Representatives in violation of this Agreement; (b) later lawfully acquired from other sources by such Party or any of its Subsidiaries, which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary information or Materials; or (c) independently developed or generated without reference to or use of the respective proprietary or confidential information or Materials of the other Party or any of its Subsidiaries.  If any confidential and proprietary information or Materials of one Party or any of its Subsidiaries is disclosed to another Party or any of its Subsidiaries in connection with providing services to such first Party or any of its Subsidiaries under this Agreement, then such disclosed confidential and proprietary information and Materials shall be used only as required to perform such services.

 

Section 6.02          No Release, Return or Destruction.  Each Party agrees not to release or disclose, or permit to be released or disclosed, any such information or Materials to any other Person, except its Representatives who need to know such information or Materials, and except in compliance with Section 6.03.  Information or Materials furnished by the other Party after the Effective Time pursuant to this Agreement shall be subject to the provisions of Section 6.03 of the Separation and Distribution Agreement.

 

Section 6.03          Third-Party Information; Privacy or Data Protection Laws.  Each Party acknowledges that it and its respective Subsidiaries may presently have and, following the Effective Time, may gain access to or possession of confidential or proprietary information of, or personal

 

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information relating to, Third Parties (a) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or the other Party’s Subsidiaries, on the other hand, prior to the date hereof; or (b) that as between the two Parties, was originally collected by the other Party or the other Party’s Subsidiaries and that may be subject to and protected by privacy, data protection or other applicable laws.  As may be provided in more detail in this Agreement, each Party agrees that it shall hold, protect and use, and shall cause its Subsidiaries and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary information of, or personal information relating to, Third Parties in accordance with privacy, data protection or other applicable laws and the terms of any agreements that were either entered into before the date hereof or affirmative commitments or representations that were made before the date hereof by, between or among the other Party or the other Party’s Subsidiaries, on the one hand, and such Third Parties, on the other hand.

 

Section 6.04          Protective Arrangements.  In the event that either Party or any of its Subsidiaries is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) by any Governmental Authority or pursuant to applicable Law to disclose or provide any confidential or proprietary information or Materials of the other Party, as applicable, that is subject to the confidentiality provisions hereof, such Party shall provide the other Party with notice of such request or demand as promptly as practicable under the circumstances so that such other Party shall have an opportunity to seek an appropriate protective order, at such other Party’s own cost and expense.  In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such law (as so advised by counsel) or by lawful process or such Governmental Authority.

 

ARTICLE VII.

 

MISCELLANEOUS.

 

Section 7.01          Mutual Cooperation.  The Parties and their respective Subsidiaries shall cooperate with each other in connection with the performance of the Services hereunder and the completion of the Separation Projects, including producing on a timely basis all information and Materials that are reasonably requested with respect to the performance of Services and the completion of the Separation Projects, by the end of the term of this Agreement; provided, however, that such cooperation shall not unreasonably disrupt the normal operations of the Parties and their respective Subsidiaries; and, provided, further, that this Section 7.01 shall not require either Party to incur any out-of-pocket costs or expenses unless and except as expressly provided in this Agreement or otherwise agreed to in writing by the Parties.

 

Section 7.02          Limitations on Liability.

 

(a)           THE LIABILITIES OF EACH PARTY AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS

 

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AGREEMENT FOR ANY ACT OR FAILURE TO ACT IN CONNECTION HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE SALE, DELIVERY, PROVISION OR USE OF ANY SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT EXCEED SUCH PARTY’S PROFITS FOR PERFORMING SERVICES HEREUNDER, WHICH SHALL BE DEEMED TO BE EQUAL TO THE AMOUNT OF THE MARK-UP RECEIVED BY SUCH PARTY DURING THE PREVIOUS TWELVE (12) MONTH PERIOD.

 

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

 

(c)           The foregoing limitations on Liability in this Section 7.02 shall not apply (i) to either Party’s Liability for breaches of confidentiality under ARTICLE VI (Confidentiality) or (ii) in respect of any Liability arising out of or in connection with the gross negligence, willful misconduct, or fraud of or by the Party to be charged.

 

Section 7.03          Indemnification Procedures.  The provisions of Article IV of the Separation and Distribution Agreement shall govern claims for indemnification under this Agreement; provided that, for purposes of this Section 7.03, in the event of any conflict between the provisions of Article IV of the Separation and Distribution Agreement and this ARTICLE VII, the provisions of this Agreement shall control.

 

Section 7.04          Force Majeure.  Neither Party shall be deemed in default of this Agreement for failure to fulfill any obligation so long as and to the extent to which any delay or failure in the fulfillment of such obligations is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure.  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.  A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide Notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as reasonably practicable.

 

Section 7.05          Acceptance.  Acceptance shall occur when the Services and Materials described in the Work Plan meet the agreed upon acceptance criteria as described in the Work Plan.  If the Services and Materials do not meet the acceptance criteria as set forth in the Work Plan when they are ready for acceptance evaluation, a Party may give the other Party detailed written notification of the deficiency or non-conformance within thirty (30) business days of delivery of the Services or Materials.  The providing Party then shall either correct the deficiency or 

 

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non-conformance or provide a plan acceptable for correcting the deficiency or non-conformance.  If the deficiency or non-conformance is not corrected or if an acceptable plan for correcting such deficiency or non-conformance is not established during such period, then the aggrieved Party shall follow the procedures for dispute resolution set forth in Section 7.14.

 

Section 7.06          Audit Assistance.  Each of the Parties and their respective Subsidiaries are or may be subject to regulation and audit by a Governmental Authority, standards organizations, customers or other parties to contracts with such Parties or their respective Subsidiaries under applicable law, standards or contract provisions.  If a Governmental Authority, standards organization, customer or other party to a contract with a Party or its Subsidiary exercises its right to examine or audit such Party’s or its Subsidiary’s books, records, documents or accounting practices and procedures pursuant to such applicable law, standards or contract provisions, and such examination or audit relates to the Services, then the other Party shall provide, at the sole cost and expense of the requesting Party, all assistance reasonably requested by the Party that is subject to the examination or audit in responding to such examination or audits or requests for information, to the extent that such assistance or information is within the reasonable control of the cooperating Party and is related to the Services

 

Section 7.07          Survival of Covenants.  Except as expressly set forth in this Agreement, the covenants and other agreements contained in this Agreement, and Liability for the breach of any obligations contained herein, shall survive the date hereof and shall remain in full force and effect thereafter.

 

Section 7.08          Title to Intellectual Property.  Except as expressly provided for under the terms of this Agreement, each Party acknowledges that it shall acquire no right, title or interest (including any license rights or rights of use) in any intellectual property which is owned or licensed by the other Party, by reason of the provision of the Services provided hereunder.  No Party shall remove or alter any copyright, trademark, confidentiality or other proprietary notices that appear on any intellectual property owned or licensed by the other Party, and it shall reproduce any such notices on any and all copies thereof.  No Party shall attempt to decompile, translate, reverse engineer or make excessive copies of any intellectual property owned or licensed by the other Party, and it shall promptly notify such other Party of any such attempt, regardless of whether by it or any Third Party, of which it becomes aware.

 

Section 7.09          Subsidiaries.  Abbott shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by a Subsidiary of Abbott, and AbbVie shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by a Subsidiary of AbbVie.

 

Section 7.10          Headings.  The 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 7.11          Independent Contractors.  The Parties each acknowledge that they are separate entities, each of which has entered into this Agreement for independent business reasons.

 

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The relationships of the Parties hereunder are those of independent contractors and nothing contained herein shall be deemed to create a joint venture, partnership or any other relationship.

 

Section 7.12          No Third Party Beneficiaries.  The provisions of this Agreement are solely for the benefit of the Parties and their Subsidiaries and are not intended to confer upon any Person except the Parties any rights or remedies hereunder; and there are no 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 7.13          Governing Law.  This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware irrespective of the choice of laws principles of the State of Delaware, as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies.

 

Section 7.14          Disputes; Equitable Relief.

 

(a)           In the event of any dispute, controversy or claim arising out of or relating to the transactions contemplated by this Agreement, or the validity, interpretation, breach or termination of any provision of this Agreement, or calculation or allocation of the costs of any Service, including claims seeking redress or asserting rights under any law, such dispute, controversy or claim shall be resolved in accordance with the dispute resolution process referred to in Schedule 7.01 to the Separation and Distribution Agreement.

 

(b)           Subject to the foregoing provisions of this Section 7.14, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.  The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, may be inadequate compensation for any loss and that any defense in any Proceeding for specific performance that a remedy at Law would be adequate is waived.

 

Section 7.15          Interpretation.  Words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires.  The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules hereto) and not to any particular provision of this Agreement.  Section and Schedule references are to the 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 or any Ancillary Agreement shall be deemed to refer to this Agreement or

 

18

 

such Ancillary Agreement as of the date such agreement is executed and as it may be amended thereafter, unless otherwise specified.

 

Section 7.16          Survival.  ARTICLE I (Definitions), Section 2.02 (Transition Services Agreements and Conflicts), Section 2.03(c) (Performance of Services), Section 2.04 (Charges), ARTICLE IV (Billing; Taxes), ARTICLE VI (Confidentiality), Section 7.02 (Limitations on Liability), Section 7.06 (Audit Assistance), and Section 7.12 (No Third Party Beneficiaries) through Section 7.28 (Mutual Drafting) shall survive any expiration or termination of this Agreement.

 

Section 7.17          Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.  This agreement shall not be assigned without the prior written consent of Abbott and AbbVie, except that:

 

(a)           each Party may assign all of its rights and obligations under this Agreement to any of its Subsidiaries; provided, however, that no such assignment shall release the assigning Party from any Liability under this Agreement; and

 

(b)           in connection with (i) either Party’s divestiture of all or substantially all of its assets to a Third Party or (ii) a Change of Control of either Party, such Party, as applicable, may assign to such Third Party its rights and obligations under this Agreement; provided, however, that (A) no such assignment shall release the assigning Party from any Liability under this Agreement, (B) any and all costs and expenses incurred by either Party in connection with such assignment (including in connection with clause (C) of this proviso) shall be borne solely by the assigning Party, and (C) the Parties shall in good faith negotiate any amendments to this Agreement, including the Schedules to this Agreement, that may be reasonably necessary or appropriate in order to assign such Services.

 

Section 7.18          Amendment.  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 or, in the case of an amendment, supplement or modification (including an early termination) of a Work Plan, signed by the contact listed, or by an authorized representative of the functional area indicated, on the applicable Work Plan.  No provisions of this Agreement shall be deemed waived unless such waiver is in writing and signed by the authorized representative of the Party or relevant Subsidiary against whom it is sought to be enforced or, in the case of a waiver of a provision in a Work Plan, signed by the contact listed, or by an authorized representative of the functional area indicated, on the applicable Work Plan, or by such contact’s senior management.

 

Section 7.19          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 waiving Party.

 

Section 7.20          Notices.  All notices or other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or

 

19

 

certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice):

 

If to Abbott:

 

Abbott Laboratories
 100 Abbott Park Road
 Building AP6D, Dept. 364
 Abbott Park, Illinois 60064-6020
 Attn:  Vice President, Information Technology
 Facsimile:  (847) 935-3253

 

With a copy to:

 

Abbott Laboratories
 100 Abbott Park Road
 Building AP6D, Dept. 364
 Abbott Park, Illinois 60064-6020
 Attn:  General Counsel
 Facsimile:  (847) 935-3294

 

If to AbbVie:

 

AbbVie Inc. 
 1 North Waukegan Road
 North Chicago, Illinois 60064
 Attn:  Vice President, Information Technology
 Facsimile:  (847) 938-8810

 

With a copy to:

 

AbbVie Inc. 
 1 North Waukegan Road
 North Chicago, Illinois 60064
 Attn:  General Counsel
 Facsimile:  (847) 936-0410

 

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

 

Section 7.21          Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement.

 

Section 7.22          Entire Agreement.  This Agreement and the Exhibits and Schedules hereto contain the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties other than those set forth or referred to herein

 

20

 

or therein.  Notwithstanding any other provisions in this Agreement to the contrary, in the event and to the extent that there is a conflict between the provisions of this Agreement and the provisions of the Separation and Distribution Agreement, the provisions of this Agreement shall control with respect to the subject matter addressed in this Agreement.

 

Section 7.23          Corporate Power.  Abbott represents on behalf of itself and, to the extent applicable, each Abbott Subsidiary, and AbbVie represents on behalf of itself and, to the extent applicable, each AbbVie Subsidiary as follows:

 

(a)           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 and to consummate the transactions contemplated hereby; and

 

(b)           this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof.

 

Section 7.24          Signatures and Delivery.  Each of Abbott and AbbVie acknowledges that it may execute this Agreement by manual, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement.  Each of Abbott and AbbVie expressly adopts and confirms a stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it shall not assert that any such signature or delivery is not adequate to bind it to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it shall as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date hereof) and delivered in person, by mail or by courier.

 

Section 7.25          Severability.  In the event that any one or more of the terms or provisions of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or the application of such term or provision to Persons or circumstances or in jurisdictions other than those as to which it has been determined to be invalid, illegal or unenforceable, and the Parties shall use their commercially reasonable efforts to substitute one or more valid, legal and enforceable terms or provisions into this Agreement which, insofar as practicable, implement the purposes and intent of the Parties.  Any term or provision of this Agreement held invalid or unenforceable only in part, degree or within certain jurisdictions shall remain in full force and effect to the extent not held invalid or unenforceable to the extent consistent with the intent of the parties as reflected by this Agreement.  To the extent permitted by applicable Law, each party waives any term or provision of Law which renders any term or provision of this Agreement to be invalid, illegal or unenforceable in any respect.

 

Section 7.26          Further Assurances.  Each Party hereto shall take, or cause to be taken, any and all reasonable actions, including the execution, acknowledgment, filing and delivery of

 

21

 

any and all documents and instruments that any other Party hereto may reasonably request in order to effect the intent and purpose of this Agreement and the transactions contemplated hereby.

 

Section 7.27          Public Announcements.  Except for the press releases and other public statements set forth in Schedule 9.16 to the Separation and Distribution Agreement, the Parties shall consult with each other before they or any of their Subsidiaries issue, and give each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement, and the Parties shall not, and shall cause their respective Subsidiaries not to, issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system.

 

Section 7.28          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.

 

*        *        *        *        *

 

22

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

 

 

	
ABBOTT LABORATORIES
    	
 
    	
ABBVIE   INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Thomas C. Freyman
    	
 
    	
By:
    	
/s/   Richard A. Gonzalez
    
	
Name:
    	
Thomas   C. Freyman
    	
 
    	
Name:
    	
Richard   A. Gonzalez
    
	
Title:
    	
Executive   Vice President, Finance
    	
 
    	
Title:
    	
Chairman   of the Board and
    
	
 
    	
and   Chief Financial Officer
    	
 
    	
 
    	
Chief   Executive Officer
    
							

 

[Signature Page to Information Technology Agreement]

 

 

Schedule A

 

IT Separation Project Plans

 

	
Separation Project
    	
 
    	
Anticipated
   Start Date
    	
 
    	
Anticipated
   Completion Date
    
	
Create   AbbVie International Back Office.
    	
 
    	
Q1 2013
    	
 
    	
Q1 2015
    
	
Establish   AbbVie global network infrastructure, including help desk, WAN, LAN, border,   telecom, and network identify services.
    	
 
    	
Q1 2013
    	
 
    	
Q1 2015
    
	
Establish   the U.S. ERP system.
    	
 
    	
Q1 2013
    	
 
    	
Q1 2014
    
	
Establish   AbbVie collaboration environment, including email, calendaring, intranet   portal, and collaboration tools.
    	
 
    	
Q1 2013
    	
 
    	
Q1 2015
    
	
Evaluate   and change as required branding in all AbbVie in scope applications, systems,   and documents.
    	
 
    	
Q1 2013
    	
 
    	
Q1 2015
    
	
Establish   an AbbVie global data center structure.
    	
 
    	
Q1 2013
    	
 
    	
Q1 2015
    

 

 

Schedule B

 

Form of Work Plan (Project Initiation Document)

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
  Project   Name:
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
  Project   ID:
    	
 
    	
 
    	
Group:
    	
   A   B   C
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
  Project   Governance:
    	
 
    	
 
    	
 
    
	
  Abbvie   Business
     Owner
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
Name   of Approver
    	
 
    	
 
    	
 
    
	
 
    	
Title,   Department
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
  Project   Governance:
    	
 
    	
 
    	
 
    
	
  Abbott   Business
     Owner
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
Name   of Approver
    	
 
    	
 
    	
 
    
	
 
    	
Title,   Department
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
  Project   Governance:
    	
 
    	
 
    	
 
    
	
  AbbVie   IT Function
     Lead
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
Name   of Approver
    	
 
    	
 
    	
 
    
	
 
    	
Title,   Department
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
  Project   Governance:
    	
 
    	
 
    	
 
    
	
  Abbott   IT Function
     Lead
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
Name   of Approver
    	
 
    	
 
    	
 
    
	
 
    	
Title,   Department
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

1

 

	
  Project   Governance:
    	
 
    	
 
    	
 
    
	
  Project   Manager
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
Name   of Approver
    	
 
    	
 
    	
 
    
	
 
    	
Title,   Department
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
  Project   Governance:
    	
 
    	
 
    	
 
    
	
  PMO   Transition Lead
    	
(to   be completed by Provider’s Transition PMO)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
Name   of Approver
    	
 
    	
 
    	
 
    
	
 
    	
Title,   Department
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
							

 

1.             GROUP (Circle the appropriate letter)

 

Group A means the TSA Service Recipient pays for the entire work plan except for any optimization, enhancement or upgrade the Service Provider makes in concert with the Work Plan for its own benefit/use (the “Provider Upgrade Charges”). Group B means the party requesting a new system or service will pay for the entire work plan subject to the Provider Upgrade Charges caveat of Group A. Group C items result in the two parties coming to mutual agreement on a cost sharing agreement.

 

2.             DESCRIPTION

 

Describe the project.

 

3.             OBJECTIVES

 

State project Objectives.  Use business (rather than technical) terminology whenever possible.  Example:  “Consolidate International Sales each Month.”  Be as specific as possible.

 

4.             SCOPE

 

Use this section to identify those areas, activities and systems that are in the scope of this project.  Also identify activities and areas that are excluded from the project.

 

Examples:  User demographics, internal and external Customers, Systems and/or processes that are impacted, Volume (i.e. transactions per period) metrics, Delphi, COP

 

5.             START/END DATES

 

·

 

2

 

6.             DEPENDENCIES

 

List related / dependent Dis-Synergies and Transition Service Agreements (TSA) below.  Briefly describe the nature of the dependency/relationship.

 

Dependent / Related Projects

 

	
Project/TSA ID
    	
 
    	
Description
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Newco###
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Newco###
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Newco###
    	
 
    	
 
    	
 
    

 

7.             ALTERNATIVES AND APPROACH

 

Describe alternatives considered and the selected approach

 

8.             CHARGES

 

	
Project Cost Component
    	
 
    	
Abbott or
   AbbVie
   Charge
    	
 
    	
Capital
    (in
   $000s)
    	
 
    	
Expense
    (in
   $000s)
    	
 
    	
Total
    (in
   $000s)
    	
 
    	
Ongoing
   Cost
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

9.             TSA ADJUSTMENTS

 

Identify TSA(s) that could be partially or fully terminated as a result of this Work Plan and the associated charges that would require adjustment.

 

	
TSA(s) ####
    	
 
    	
TSA Impact Description
    	
 
    	
Partial/Full
    	
 
    	
Charge
   Adjustment
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

10.          TRANSITION TO SUPPORT PLAN

 

Include details on the planned support model at time of project completion.

 

3

 

11.          ACCEPTANCE CRITERIA

 

Describe the acceptance criteria that will be used to evaluate the delivered service and when achieved will end this work plan.

 

12.          CHANGE HISTORY

 

List the changes to this work plan.

 

	
Nbr
    	
 
    	
Approval
   Date
    	
 
    	
Change Description
    	
 
    	
Budget
   Impact
    	
 
    	
Schedule
   Impact
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

4

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