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As filed with the Securities and Exchange Commission on September 4, 2012

File No. 001-35565

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 2 to

Form 10

GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

AbbVie Inc.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  32-0375147
(I.R.S. employer
Identification number)

1 North Waukegan Road,
North Chicago, Illinois

(Address of principal executive offices)

 

60064
(Zip Code)

847-937-6100
(Registrant's telephone number, including area code)

        Securities to be registered pursuant to Section 12(b) of the Act:

Title of Each Class to be so Registered   Name of Each Exchange on which Each Class is to be
Registered
Common Stock, par value $0.01 per share   New York Stock Exchange

        Securities to be registered pursuant to Section 12(g) of the Act: None

   



ABBVIE INC.

INFORMATION REQUIRED IN REGISTRATION STATEMENT
CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT
AND ITEMS OF FORM 10

        Certain information required to be included herein is incorporated by reference to specifically identified portions of the body of the information statement filed herewith as Exhibit 99.1. None of the information contained in the information statement shall be incorporated by reference herein or deemed to be a part hereof unless such information is specifically incorporated by reference.

Item 1.    Business.

        The information required by this item is contained under the sections of the information statement entitled "Information Statement Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," "Certain Relationships and Related Person Transactions," and "Where You Can Find More Information." Those sections are incorporated herein by reference.

Item 1A.    Risk Factors.

        The information required by this item is contained under the section of the information statement entitled "Risk Factors." That section is incorporated herein by reference.

Item 2.    Financial Information.

        The information required by this item is contained under the sections of the information statement entitled "Unaudited Pro Forma Combined Financial Statements," "Selected Historical Combined Financial Data," and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Those sections are incorporated herein by reference.

Item 3.    Properties.

        The information required by this item is contained under the section of the information statement entitled "Business—Manufacturing Capabilities and Operations." That section is incorporated herein by reference.

Item 4.    Security Ownership of Certain Beneficial Owners and Management.

        The information required by this item is contained under the section of the information statement entitled "Security Ownership of Certain Beneficial Owners and Management." That section is incorporated herein by reference.

Item 5.    Directors and Executive Officers.

        The information required by this item is contained under the section of the information statement entitled "Management." That section is incorporated herein by reference.

Item 6.    Executive Compensation.

        The information required by this item is contained under the sections of the information statement entitled "Compensation Discussion and Analysis" and "Executive Compensation." Those sections are incorporated herein by reference.

Item 7.    Certain Relationships and Related Transactions.

        The information required by this item is contained under the sections of the information statement entitled "Management" and "Certain Relationships and Related Person Transactions." Those sections are incorporated herein by reference.



Item 8.    Legal Proceedings.

        The information required by this item is contained under the section of the information statement entitled "Business—Legal Proceedings." That section is incorporated herein by reference.

Item 9.    Market Price of, and Dividends on, the Registrant's Common Equity and Related Stockholder Matters.

        The information required by this item is contained under the sections of the information statement entitled "Dividend Policy," "Capitalization," "The Separation and Distribution," and "Description of AbbVie's Capital Stock." Those sections are incorporated herein by reference.

Item 10.    Recent Sales of Unregistered Securities.

        The information required by this item is contained under the sections of the information statement entitled "Description of Indebtedness" and "Description of AbbVie's Capital Stock—Sale of Unregistered Securities." Those sections are incorporated herein by reference.

Item 11.    Description of Registrant's Securities to be Registered.

        The information required by this item is contained under the sections of the information statement entitled "Dividend Policy," "The Separation and Distribution," and "Description of AbbVie's Capital Stock." Those sections are incorporated herein by reference.

Item 12.    Indemnification of Directors and Officers.

        The information required by this item is contained under the section of the information statement entitled "Description of AbbVie's Capital Stock—Limitations on Liability, Indemnification of Officers and Directors, and Insurance." That section is incorporated herein by reference.

Item 13.    Financial Statements and Supplementary Data.

        The information required by this item is contained under the section of the information statement entitled "Index to Financial Statements" and the financial statements referenced therein. That section is incorporated herein by reference.

Item 14.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

        None.

Item 15.    Financial Statements and Exhibits.

(a)    Financial Statements

        The information required by this item is contained under the section of the information statement entitled "Index to Financial Statements" and the financial statements referenced therein. That section is incorporated herein by reference.


(b)    Exhibits

        See below.

        The following documents are filed as exhibits hereto:

Exhibit
Number
  Exhibit Description
  2.1   Form of Separation and Distribution Agreement by and between Abbott Laboratories and AbbVie Inc.†

 

3.1

 

Form of Amended and Restated Certificate of Incorporation of AbbVie Inc.**

 

3.2

 

Form of Amended and Restated By-Laws of AbbVie Inc.**

 

10.1

 

Form of U.S. Transition Services Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.2

 

Form of Ex-U.S. Transition Services Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.3

 

Form of Tax Sharing Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.4

 

Form of Special Products Master Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.5

 

Form of Employee Matters Agreement by and between Abbott Laboratories and AbbVie Inc.*

 

10.6

 

Form of International Commercial Operations Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.7

 

Form of Luxembourg International Commercial Operations Agreement by and between Abbott Investments Luxembourg S.à.r.l. and AbbVie Investments S.à.r.l.**

 

10.8

 

Form of Information Technology Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.9

 

Form of Patent License Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.10

 

Form of Inventory Trademark License Agreement by and between Abbott Laboratories and AbbVie Inc.**

 

10.11

 

Form of Finished Goods Supply Agreements by and between Abbott Laboratories and AbbVie Inc.**

 

10.12

 

Form of Contract Manufacturing Agreements by and between Abbott Laboratories and AbbVie Inc.**

 

10.13

 

Form of Packaging Agreements by and between Abbott Laboratories and AbbVie Inc.**

 

10.14

 

Form of Agreement Regarding Change in Control*

 

10.15

 

Form of AbbVie Inc. 2013 Incentive Stock Program*

 

10.16

 

Form of AbbVie Inc. 2013 Management Incentive Plan*

 

10.17

 

Form of AbbVie Inc. 2013 Performance Incentive Plan*

 

10.18

 

Form of AbbVie Inc. 401(k) Supplemental Plan*

 

10.19

 

Form of AbbVie Inc. Deferred Compensation Plan*

 

10.20

 

Form of AbbVie Inc. Non-Employee Directors' Fee Plan*

 

10.21

 

Form of AbbVie Inc. Supplemental Pension Plan*

Exhibit
Number
  Exhibit Description
  21.1   Subsidiaries of AbbVie Inc.*

 

99.1

 

Information Statement of AbbVie Inc., preliminary and subject to completion, dated September 4, 2012.**

*
To be filed by amendment.

**
Filed herewith.

Previously filed.


SIGNATURES

        Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

    ABBVIE INC.

 

 

By:

 

/s/ RICHARD A. GONZALEZ

        Name:   Richard A. Gonzalez
        Title:   Chairman of the Board and Chief Executive Officer

Date: September 4, 2012




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ABBVIE INC.
INFORMATION REQUIRED IN REGISTRATION STATEMENT CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10
SIGNATURES

Exhibit 3.1

 

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ABBVIE INC.

 

AbbVie Inc., a corporation organized and existing under the laws of the State of Delaware, pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, as it may be amended (the “DGCL”), hereby certifies as follows:

 

1.             The name of this corporation is AbbVie Inc.  The original Certificate of Incorporation was filed on April 10, 2012.

 

2.             This Amended and Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL and by the written consent of its sole stockholder in accordance with Section 228 of the DGCL.

 

3.             This Amended and Restated Certificate of Incorporation restates and amends the original Certificate of Incorporation to read in its entirety as follows:

 


 

ARTICLE I
NAME OF CORPORATION

 

The name by which the corporation is to be known is AbbVie Inc. (the “Corporation”).

 

ARTICLE II
REGISTERED OFFICE; REGISTERED AGENT

 

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.  The name of its registered agent at such address is The Corporation Trust Company.  The Corporation may have such other offices, either within or without the State of Delaware, as the Board of Directors of the Corporation (the “Board of Directors”) may designate or as the business of the Corporation may from time to time require.

 

ARTICLE III
PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

ARTICLE IV
STOCK

 

Section 1.  Authorized Stock.  The total number of shares of capital stock that the Corporation shall have authority to issue is [·] shares, consisting of (a) [·] shares of common

 

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stock, par value $0.01 per share (the “Common Stock”), and (b) [·] shares of preferred stock, par value $0.01 per share (the “Preferred Stock”).

 

Section 2.  Common Stock.  Except as may otherwise be provided in this Amended and Restated Certificate of Incorporation, in a Preferred Stock Designation (as hereinafter defined), or as required by law, the holders of outstanding shares of Common Stock shall have the right to vote on all questions to the exclusion of all other stockholders, each holder of record of Common Stock being entitled to one vote for each share of Common Stock standing in the name of the stockholder on the books of the Corporation.

 

Section 3.  Preferred Stock.  Shares of Preferred Stock may be issued from time to time in one or more series.  The Board of Directors (or any committee to which it may duly delegate the authority granted in this Article IV) is hereby empowered to authorize the issuance from time to time of shares of Preferred Stock in one or more series, for such consideration and for such corporate purposes as the Board of Directors (or such committee thereof) may from time to time determine, and by filing a certificate (hereinafter referred to as a “Preferred Stock Designation”) pursuant to applicable law of the State of Delaware as it presently exists or may hereafter be amended to establish from time to time for each such series the number of shares to be included in each such series and to fix the designations, powers, rights and preferences of the shares of each such series, and the qualifications, limitations and restrictions thereof to the fullest extent now or hereafter permitted by this Amended and Restated Certificate of Incorporation and the laws of the State of Delaware, including, without limitation, voting rights (if any), dividend rights, dissolution rights, conversion rights, exchange rights and redemption rights thereof, as shall be stated and expressed in a resolution or resolutions adopted by the Board of Directors (or such committee thereof) providing for the issuance of such series of Preferred Stock.  Each series of Preferred Stock shall be distinctly designated.  The authority of the Board of Directors with respect to each series of Preferred Stock shall include, but not be limited to, determination of the following:

 

(i)                     the designation of the series, which may be by distinguishing number, letter or title;

 

(ii)                  the number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding);

 

(iii)               the amounts payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative;

 

(iv)              dates at which dividends, if any, shall be payable;

 

(v)                 the redemption rights and price or prices, if any, for shares of the series;

 

(vi)              the terms and amount of any sinking fund provided for the purchase or redemption of shares of the series;

 

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(vii)           the amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;

 

(viii)        whether the shares of the series shall be convertible into or exchangeable for shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made;

 

(ix)                restrictions on the issuance of shares of the same series or of any other class or series; and

 

(x)                   the voting rights, if any, of the holders of shares of the series.

 

ARTICLE V
TERM

 

The term of existence of the Corporation shall be perpetual.

 

ARTICLE VI
BOARD OF DIRECTORS

 

Section 1.  Number of Directors.  Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the total number of directors that the Corporation would have if there were no vacancies (the “Whole Board”).

 

Section 2.  Classes of Directors.  Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the directors shall be divided, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible, with the term of office of the first class to expire at the 2013 annual meeting of stockholders, the term of office of the second class to expire at the 2014 annual meeting of stockholders and the term of office of the third class to expire at the 2015 annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified.  At each annual meeting of stockholders, commencing with the 2013 annual meeting, (a) directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified, and (b) if authorized by a resolution of the Board of Directors, directors may be elected to fill any vacancy on the Board of Directors, regardless of how such vacancy shall have been created.

 

Section 3.  Vacancies.  Subject to applicable law and the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, and unless the Board

 

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of Directors otherwise determines, vacancies resulting from death, resignation, retirement, disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled only by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, and in the event that there is only one director remaining in office, by such sole remaining director, and directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been appointed expires and until such director’s successor shall have been duly elected and qualified.

 

Section 4.  Removal.  Subject to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, any director, or the entire Board of Directors, may be removed from office at any time but only for cause by the affirmative vote of the holders of at least a majority of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors.

 

ARTICLE VII
STOCKHOLDER ACTION

 

Section 1.  Stockholder Action by Written Consent.  Subject to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

 

Section 2.  Special Meetings of Stockholders.  Subject to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, special meetings of stockholders may only be called by or at the direction of the Chairman of the Board of Directors, the Chief Executive Officer, any President, or the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board.  At any special meeting of the stockholders, only such business shall be conducted or considered as shall have been properly brought before the meeting pursuant to the Corporation’s notice of meeting.  To be properly brought before a special meeting, proposals of business must be (a) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, or (b) otherwise properly brought before the special meeting, by or at the direction of the Board of Directors.

 

ARTICLE VIII
AMENDMENTS TO BY-LAWS

 

In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the By-laws of the Corporation (the “By-laws”) may be altered, amended or repealed, in whole or in part, and new By-laws may be adopted, (i) by the affirmative vote of shares representing a majority of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors; provided, however, that any proposed alteration, amendment or repeal of, or the adoption of any By-law inconsistent with, Sections 2.2, 2.12, 3.2, 3.3, 3.10 or 3.11, Article VII or Article X of the By-laws (in each case, as in effect on the date hereof), or the alteration, amendment or repeal of, or the adoption of any provision

 

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inconsistent with this sentence, may only be made by the affirmative vote of shares representing not less than eighty percent (80%) of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors; and provided further, however, that in the case of any such stockholder action at a meeting of stockholders, notice of the proposed alteration, amendment, repeal or adoption of the new By-law or By-laws must be contained in the notice of such meeting, or (ii) by action of the Board of Directors of the Corporation; provided, however, that the case of any such action at a meeting of the Board of Directors, notice of the proposed alteration, amendment, repeal or adoption of the new By-law or By-laws must be given not less than two days prior to the meeting.

 

ARTICLE IX
DIRECTOR LIABILITY

 

To the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended, a director of the Corporation shall not be personally liable either to the Corporation or to any of its stockholders for monetary damages for breach of fiduciary duty as a director.  Any amendment or modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.  If the DGCL hereafter is amended to further eliminate or limit the liability of a director, then a director of the Corporation, in addition to the circumstances in which a director is not personally liable as set forth in the preceding sentence, shall not be liable to the fullest extent permitted by the amended DCGL.

 

ARTICLE X
FORUM AND VENUE

 

Unless the Board of Directors otherwise determines, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer of the Corporation to the Corporation or the Corporation’s stockholders, creditors or other constituents, (iii) any action asserting a claim against the Corporation or any director or officer of the Corporation arising pursuant to any provision of the DGCL or the Amended and Restated Certificate of Incorporation or By-laws (as either may be amended from time to time), or (iv) any action asserting a claim against the Corporation or any director or officer of the Corporation governed by the internal affairs doctrine; provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the State of Delaware.

 

ARTICLE XI
AMENDMENTS

 

In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware as they presently exist or may hereafter be amended, subject to any limitations contained elsewhere in this Amended and Restated Certificate of Incorporation, the Corporation may from time to time adopt, amend or repeal any provisions of this Amended and Restated

 

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Certificate of Incorporation; provided, however, that any proposed alteration, amendment or repeal of, or the adoption of any provision inconsistent with, Article VI and Article VII of this Amended and Restated Certificate of Incorporation (in each case, as in effect on the date hereof), or the alteration, amendment or repeal of, or the adoption of any provision inconsistent with this sentence, may only be made by the affirmative vote of shares representing not less than eighty percent (80%) of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors.

 

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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of Incorporation this the day of            , 2012.

 

 

ABBVIE INC.

 

 

 

By:

 

 

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Exhibit 3.2

 

AMENDED AND RESTATED BY-LAWS
OF
ABBVIE INC.

 

Incorporated under the Laws of the State of Delaware

 


 

These Amended and Restated By-laws (the “By-laws”) of AbbVie Inc., a Delaware corporation, are effective as of [·], 2012 and hereby amend and restate the previous by-laws of AbbVie Inc., which are hereby deleted in their entirety and replaced with the following:

 

ARTICLE I
OFFICES AND RECORDS

 

Section 1.1  Delaware Office.  The registered office of AbbVie Inc. (the “Corporation”) in the State of Delaware shall be located in the City of Wilmington, County of New Castle, and the name and address of its registered agent is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware  19904.

 

Section 1.2  Other Offices.  The Corporation may have such other offices, either inside or outside the State of Delaware, as the Board of Directors of the Corporation (the “Board of Directors”) may designate or as the business of the Corporation may from time to time require.

 

Section 1.3  Books and Records.  The books and records of the Corporation may be kept inside or outside the State of Delaware at such place or places as may from time to time be designated by the Board of Directors.

 

ARTICLE II
STOCKHOLDERS

 

Section 2.1  Annual Meeting.  The annual meeting of the stockholders of the Corporation shall be held on such date and at such place and time as may be fixed by resolution of the Board of Directors.

 

Section 2.2  Special Meeting.  Subject to the rights of the holders of any series of stock having a preference over the Common Stock of the Corporation as to dividends, voting or upon liquidation (“Preferred Stock”) with respect to such series of Preferred Stock, special meetings of the stockholders may be called only by the Chairman of the Board, the Chief Executive Officer, any President, or the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies (the “Whole Board”).

 

Section 2.3  Place of Meeting.  The Board of Directors or the Chairman of the Board, as the case may be, may designate the place of meeting for any annual or special meeting of the stockholders.  If no designation is so made, the place of meeting shall be the principal office of the Corporation.

 



 

Section 2.4  Notice of Meeting.  Written or printed notice, stating the place, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered by the Corporation not less than ten (10) days nor more than sixty (60) days before the date of the meeting, either personally, by electronic transmission in the manner provided in Section 232 of the General Corporation Law of the State of Delaware (as it may be amended, the “DGCL”) (except to the extent prohibited by Section 232(e) of the DGCL) or by mail, to each stockholder of record entitled to vote at such meeting.  If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his or her address as it appears on the stock transfer books of the Corporation.  If notice is given by electronic transmission, such notice shall be deemed to be given at the times provided in the DGCL.  Such further notice shall be given as may be required by law.  Meetings may be held without notice if all stockholders entitled to vote are present, or if notice is waived by those not present in accordance with Section 8.4 of these By-laws.  Any previously scheduled meeting of the stockholders may be postponed, and, unless the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) otherwise provides, any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting of stockholders.

 

Section 2.5  Quorum and Adjournment.  Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the outstanding shares of the Corporation entitled to vote generally in the election of directors (the “Voting Stock”), represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum of such class or series for the transaction of such business.  The Chairman of the Board of Directors or the President may adjourn the meeting from time to time, whether or not there is a quorum.  No notice of the time and place of adjourned meetings need be given except as required by law.  The stockholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

 

Section 2.6  Proxies.  At all meetings of stockholders, a stockholder may vote by proxy executed in writing (or in such manner prescribed by the DGCL) by the stockholder, or by his or her duly authorized attorney in fact.

 

Section 2.7  Order of Business.

 

(A)          Annual Meetings of Stockholders.  At any annual meeting of the stockholders, only such nominations of persons for election to the Board of Directors shall be made, and only such other business shall be conducted or considered, as shall have been properly brought before the meeting.  For nominations to be properly made at an annual meeting, and proposals of other business to be properly brought before an annual meeting, nominations and proposals of other business must be:  (a) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise

 

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properly made at the annual meeting, by or at the direction of the Board of Directors or (c) otherwise properly requested to be brought before the annual meeting by a stockholder of the Corporation in accordance with these By-laws.  For nominations of persons for election to the Board of Directors or proposals of other business to be properly requested by a stockholder to be made at an annual meeting, a stockholder must (i) be a stockholder of record at the time of giving of notice of such annual meeting by or at the direction of the Board of Directors and at the time of the annual meeting, (ii) be entitled to vote at such annual meeting and (iii) comply with the procedures set forth in these By-laws as to such business or nomination.  The immediately preceding sentence shall be the exclusive means for a stockholder to make nominations or other business proposals (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and included in the Corporation’s notice of meeting) before an annual meeting of stockholders.

 

(B)          Special Meetings of Stockholders.  At any special meeting of the stockholders, only such business shall be conducted or considered, as shall have been properly brought before the meeting pursuant to the Corporation’s notice of meeting.  To be properly brought before a special meeting, proposals of business must be (a) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, or (b) otherwise properly brought before the special meeting, by or at the direction of the Board of Directors.

 

Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (i) is a stockholder of record at the time of giving of notice of such special meeting and at the time of the special meeting, (ii) is entitled to vote at the meeting, and (iii) complies with the procedures set forth in these By-laws as to such nomination.  The immediately preceding sentence shall be the exclusive means for a stockholder to make nominations (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Corporation’s notice of meeting) before a special meeting of stockholders.

 

(C)          General.  Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, the Chairman of any annual or special meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with these By-laws and, if any proposed nomination or other business is not in compliance with these By-laws, to declare that no action shall be taken on such nomination or other proposal and such nomination or other proposal shall be disregarded.

 

Section 2.8  Advance Notice of Stockholder Business and Nominations.

 

(A)          Annual Meeting of Stockholders.  Without qualification or limitation, subject to Section 2.8(C)(4) of these By-laws, for any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.7(A) of these By-laws, the stockholder must have given timely notice thereof (including, in the case of nominations, the completed and signed questionnaire, representation and agreement required

 

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by Section 2.9 of these By-laws), and timely updates and supplements thereof, in writing to the Secretary, and such other business must otherwise be a proper matter for stockholder action.

 

To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation.  In no event shall any adjournment or postponement of an annual meeting, or the public announcement thereof, commence a new time period for the giving of a stockholder’s notice as described above.

 

Notwithstanding anything in the immediately preceding paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased by the Board of Directors, and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.8(A) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

 

In addition, to be considered timely, a stockholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.

 

(B)          Special Meetings of Stockholders.  Subject to Section 2.8(C)(4) of these By-laws, in the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any stockholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, provided that the stockholder gives timely notice thereof (including the completed and signed questionnaire, representation and agreement required by Section 2.9 of these By-laws), and timely updates and supplements thereof, in writing, to the Secretary.

 

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To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.  In no event shall any adjournment or postponement of a special meeting of stockholders, or the public announcement thereof, commence a new time period for the giving of a stockholder’s notice as described above.

 

In addition, to be considered timely, a stockholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting, any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.

 

(C)     Disclosure Requirements.

 

(i)            To be in proper form, a stockholder’s notice (whether given pursuant to Section 2.7(A) or 2.7(B) of these By-laws) to the Secretary must include the following, as applicable.

 

(1)           As to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, a stockholder’s notice must set forth:  (i) the name and address of such stockholder, as they appear on the Corporation’s books, of such beneficial owner, if any, and of their respective affiliates or associates or others acting in concert therewith, (ii) (A) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, or any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Corporation, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Corporation, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the Corporation, whether or not such instrument, contract or right shall be subject to settlement in the underlying class or series of shares of the Corporation, through the delivery of cash or other property, or otherwise, and without

 

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regard to whether the stockholder of record, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right, or any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation (any of the foregoing, a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any class or series of shares of the Corporation, (D) any agreement, arrangement, understanding, relationship or otherwise, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, involving such stockholder, directly or indirectly, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder with respect to any class or series of the shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares of the Corporation (any of the foregoing, a “Short Interest”), (E) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership, (G) any performance-related fees (other than an asset-based fee) that such stockholder or members of such stockholder’s immediate family sharing the same household are entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, (H) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such stockholder, and (I) any direct or indirect interest of such stockholder in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), and (iii) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement and form of proxy or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;

 

(2)           If the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, a stockholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth:  (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder and beneficial owner, if any, in such business, (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such proposal or business includes a proposal to amend the by-laws of the Corporation, the text of the proposed amendment), and (iii) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder;

 

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(3)           As to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board of Directors, a stockholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth:  (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 or any successor provision promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

 

(4)           With respect to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board of Directors, a stockholder’s notice must, in addition to the matters set forth in paragraphs (a) and (c) above, also include a completed and signed questionnaire, representation and agreement required by Section 2.9 of these By-laws.  The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

 

(ii)           For purposes of these By-laws, “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

 

(iii)          Notwithstanding the provisions of these By-laws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this By-law; provided, however, that any references in these By-laws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the separate and additional requirements set forth in these By-laws with respect to nominations or proposals as to any other business to be considered pursuant to Section 2.7 of these By-laws.

 

(iv)          Nothing in these By-laws shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these By-laws.  Subject to Rule 14a-8 under the Exchange Act, nothing in these By-laws shall be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in

 

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the Corporation’s proxy statement any nomination of director or directors or any other business proposal.

 

Section 2.9  Submission of Questionnaire, Representation and Agreement.  To be eligible to be a nominee for election or reelection as a director of the Corporation, a person nominated by a shareholder for election or reelection to the Board of Directors must deliver (in accordance with the time periods prescribed for delivery of notice under Section 2.8 of these By-laws) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request), and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, (C) will comply with the Corporation’s stock ownership guidelines for directors, if any, and has disclosed therein whether all or any portion of securities of the Corporation were purchased with any financial assistance provided by any other person and whether any other person has any interest in such securities, and (D) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply, with all applicable corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation publicly disclosed from time to time, and (E) will abide by the requirements of Section 2.10 of these By-laws.

 

Section 2.10  Procedure for Election of Directors; Required Vote.

 

(A)          Except as set forth below, election of directors at all meetings of the stockholders at which directors are to be elected shall be by ballot, and, subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, a majority of the votes cast at any meeting for the election of directors at which a quorum is present shall elect directors.  For purposes of this By-law, a majority of votes cast shall mean that the number of shares voted “for” a director’s election exceeds 50% of the number of votes cast with respect to that director’s election.  Votes cast shall include direction to withhold authority in each case and exclude abstentions with respect to that director’s election.  Notwithstanding the foregoing, in the event of a “contested election” of directors, directors shall be elected by the vote of a plurality of the votes cast at any meeting for the election of directors at which a quorum is present.  For purposes of this By-law, a “contested election” shall mean any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected, with the determination thereof being made by the Secretary as of the close of the applicable notice of nomination period set forth in Section 2.8 of these

 

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By-laws or under applicable law, based on whether one or more notice(s) of nomination were timely filed in accordance with said Section 2.8; provided, however, that the determination that an election is a “contested election” shall be determinative only as to the timeliness of a notice of nomination and not otherwise as to its validity.  If, prior to the time the Corporation mails its initial proxy statement in connection with such election of directors, one or more notices of nomination are withdrawn such that the number of candidates for election as director no longer exceeds the number of directors to be elected, the election shall not be considered a contested election, but in all other cases, once an election is determined to be a contested election, directors shall be elected by the vote of a plurality of the votes cast.

 

(B)          If a nominee for director who is an incumbent director is not elected and no successor has been elected at such meeting, the director shall promptly tender his or her resignation to the Board of Directors in accordance with the agreement contemplated by clause (E) of Section 2.9 of these By-laws.  The Nominations and Governance Committee shall make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation, or whether other action should be taken.  The Board of Directors shall act on the tendered resignation, taking into account the Nominations and Governance Committee’s recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from the date of the certification of the election results.  The Nominations and Governance Committee in making its recommendation, and the Board of Directors in making its decision, may each consider any factors or other information that it considers appropriate and relevant.  The director who tenders his or her resignation shall not participate in the recommendation of the Nominations and Governance Committee or the decision of the Board of Directors with respect to his or her resignation.  If such incumbent director’s resignation is not accepted by the Board of Directors, such director shall continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal.  If a director’s resignation is accepted by the Board of Directors pursuant to this By-law, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 3.9 of these By-laws or may decrease the size of the Board of Directors pursuant to the provisions of Section 3.2 of these By-laws.

 

(C)          Except as otherwise provided by law, the Certificate of Incorporation, or these By-laws, in all matters other than the election of directors, the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the matter shall be the act of the stockholders.

 

Section 2.11  Inspectors of Elections; Opening and Closing the Polls.

 

(A)          The Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors may, but does not need to, include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof.  One or more persons may be designated as alternate inspectors to replace any inspector who fails to act.  If no inspector or alternate has been appointed to act or is able to act at a

 

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meeting of stockholders, the Chairman of the meeting shall appoint one or more inspectors to act at the meeting.  Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.  The inspectors shall have the duties prescribed by law.

 

(B)          The Chairman of the meeting shall be appointed by the inspector or inspectors to fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting.

 

Section 2.12  No Stockholder Action by Written Consent.  Subject to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

 

ARTICLE III
BOARD OF DIRECTORS

 

Section 3.1  General Powers.  The business and affairs of the Corporation shall be managed under the direction of the Board of Directors.  In addition to the powers and authorities by these By-laws expressly conferred upon them, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws required to be exercised or done by the stockholders.

 

Section 3.2  Number, Tenure and Qualifications.  Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Whole Board.  No decrease in the number of authorized directors constituting the Whole Board shall shorten the term of any incumbent director.

 

Section 3.3  Classes of Directors.  Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the directors shall be divided, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible, with the term of office of the first class to expire at the 2013 annual meeting of stockholders, the term of office of the second class to expire at the 2014 annual meeting of stockholders and the term of office of the third class to expire at the 2015 annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified.  At each annual meeting of stockholders, commencing with the 2013 annual meeting, (a) directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified, and (b) if authorized by a resolution of the Board of Directors, directors may be elected to fill any vacancy on the Board of Directors, regardless of how such vacancy shall have been created.

 

Section 3.4  Regular Meetings.  A regular meeting of the Board of Directors shall

 

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be held without other notice than this By-law immediately after, and at the same place as, the Annual Meeting of Stockholders.  The Board of Directors may, by resolution, provide the time and place for the holding of additional regular meetings without other notice than such resolution.

 

Section 3.5  Special Meetings.  Special meetings of the Board of Directors shall be called at the request of the Chairman of the Board of Directors, the Chief Executive Officer or a majority of the Board of Directors then in office.  The person or persons authorized to call special meetings of the Board of Directors may fix the place and time of the meetings.

 

Section 3.6  Notice.  Notice of any special meeting of directors shall be given to each director at his or her business or residence in writing by hand delivery, first-class or overnight mail or courier service, telegram, email or facsimile transmission, or orally by telephone.  If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least five (5) days before such meeting.  If by telegram, overnight mail or courier service, such notice shall be deemed adequately delivered when the telegram is delivered to the telegraph company, or the notice is delivered to the overnight mail or courier service company at least twenty-four (24) hours before such meeting.  If by email, facsimile transmission, telephone or by hand, such notice shall be deemed adequately delivered when the notice is transmitted at least twelve (12) hours before such meeting.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice of such meeting, except for amendments to these By-laws, as provided under Section 10.1 of these By-laws.  A meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 8.4 of these By-laws.

 

Section 3.7  Action by Consent of Board of Directors.  Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee.  Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 3.8  Conference Telephone Meetings.  Members of the Board of Directors, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

 

Section 3.9  Quorum.  Subject to Section 3.9 of these By-laws, a whole number of directors equal to at least a majority of the Whole Board shall constitute a quorum for the transaction of business, but if at any meeting of the Board of Directors there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without further notice.  The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.  The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal

 

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of enough directors to leave less than a quorum.

 

Section 3.10  Vacancies.  Subject to applicable law and the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, and unless the Board of Directors otherwise determines, vacancies resulting from death, resignation, retirement, disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled only by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, and in the event that there is only one director remaining in office, by such sole remaining director, and directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been appointed expires and until such director’s successor shall have been duly elected and qualified.

 

Section 3.11  Removal.  Subject to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of a majority of the outstanding shares of Voting Stock, voting together as a single class.

 

Section 3.12  Records.  The Board of Directors shall cause to be kept a record containing the minutes of the proceedings of the meetings of the Board of Directors and of the stockholders, appropriate stock books and registers and such books of records and accounts as may be necessary for the proper conduct of the business of the Corporation.

 

ARTICLE IV
COMMITTEES

 

Section 4.1  Appointment.  A majority of the Board of Directors may create one or more committees and appoint members of the Board of Directors to serve on the committee or committees.  Each committee shall have one or more members, who serve at the pleasure of the Board of Directors.  The Board of Directors shall designate one member of each committee to be chairman of the committee.  The Board of Directors shall designate a secretary of each committee who may be, but need not be, a member of the committee or the Board of Directors.  Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.  Each committee shall keep regular minutes and report to the Board of Directors when required.

 

Section 4.2  Committee Meetings.  A majority of any committee shall constitute a quorum and the act of the majority of the members of a committee present at a meeting at which a quorum is present shall be the act of such committee.  A committee may act by unanimous consent in writing without a meeting.  Committee meetings may be called by the Chairman of the Board of Directors, the chairman of the committee, or any two of the committee’s members. The time and place of committee meetings shall be designated in the notice of such meeting.  Notice of each committee meeting shall be given to each committee member.  Each Committee shall keep minutes of its proceedings.

 

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Section 4.3  Executive Committee.  The Board of Directors shall appoint an Executive Committee.  A majority of the members of the Executive Committee shall be selected from those Directors who satisfy the independence requirements of the Corporation’s Corporate Governance Guidelines.  The Executive Committee may exercise, subject to applicable provisions of law, all the powers of the Board of Directors in the management of the business and affairs of the Corporation when the Board of Directors is not in session.

 

Section 4.4  Audit Committee.  The Board of Directors shall appoint an Audit Committee.  The composition of the members and the duties of such committee shall be as set forth in the Audit Committee Charter.

 

Section 4.5  Compensation Committee.  The Board of Directors shall appoint a Compensation Committee.  The composition of the members and the duties of such committee shall be as set forth in the Compensation Committee Charter.

 

Section 4.6  Nominations and Governance Committee.  The Board of Directors shall appoint a Nominations and Governance Committee.  The composition of the members and the duties of such committee shall be as set forth in the Nominations and Governance Committee Charter.

 

Section 4.7  Public Policy Committee.  The Board of Directors shall appoint a Public Policy Committee.  The composition of the members and the duties of such committee shall be as set forth in the Public Policy Committee Charter.

 

ARTICLE V
OFFICERS

 

Section 5.1  Officers.  The officers of the Corporation (“Officers”) shall be the Chairman of the Board of Directors, the Chief Executive Officer, one or more Presidents, one or more Executive, Group or Senior Vice Presidents, one or more Vice Presidents, a Treasurer, a Secretary, a Controller, a General Counsel and such Assistant Treasurers and Assistant Secretaries as the Board of Directors may elect or the Chairman of the Board may appoint.  Any two offices may be held by the same person.

 

Section 5.2  Election and Term of Office.  The Board of Directors may elect any Officer.  The Chairman of the Board may appoint any Vice President, a Controller, a Treasurer, a Secretary and any Assistant Treasurers and Assistant Secretaries.  The Officers of the Corporation shall be elected or appointed annually.  Each year, the Board of Directors shall elect Officers at the first meeting of the Board of Directors held after the annual meeting of shareholders.  If the Board of Directors does not elect Officers at such meeting, such election shall be held as soon thereafter as conveniently may be.  Each year, immediately following the election of Officers by the Board of Directors or as soon thereafter as conveniently may be, the Chairman of the Board shall appoint such additional Officers within the scope of the Chairman’s authority as the Chairman deems necessary or appropriate.  Vacancies or new offices may be filled at any time as set forth in Section 5.4 of this Article V.  Each Officer shall hold office until his or her successor shall have been duly elected or appointed and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided.

 

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Section 5.3  Removal of Officers.  Any Officer may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby.  Any Officer appointed by the Chairman of the Board may be removed by the Chairman whenever, in the Chairman’s judgment, the best interests of the Corporation will be served thereby.

 

Section 5.4  Vacancies.  A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term.  A vacancy in any office appointed by the Chairman of the Board may be filled by the Chairman of the Board for the unexpired portion of the term.

 

Section 5.5  Chairman of the Board of Directors; Chief Executive Officer.  The Chairman shall preside at all meetings of the Board of Directors and the shareholders.  The Chief Executive Officer shall be responsible for the overall management of the Corporation subject to the direction of the Board of Directors.

 

Section 5.6  President.  Each President shall be the Chief Operating Officer of a major area of the Corporation’s activities and shall perform such duties as may be prescribed by the Board of Directors or the Chief Executive Officer.

 

Section 5.7  Executive, Group and Senior Vice Presidents.  Each Executive, Group, or Senior Vice President shall be responsible for supervising and coordinating a major area of the Corporation’s activities subject to the direction of the Chief Executive Officer or a President.

 

Section 5.8  Vice Presidents.  Each of the Vice Presidents shall be responsible for those activities designated by an Executive, Group, or Senior Vice President, a President, the Chief Executive Officer, or the Board of Directors.

 

Section 5.9  Treasurer.  The Treasurer shall administer the investment, financing, insurance and credit activities of the Corporation.

 

Section 5.10  Secretary.  The Secretary will be the custodian of the corporate records and of the seal of the Corporation, will countersign certificates for shares of the Corporation, and in general will perform all duties incident to the office of the Secretary.  The Secretary shall have the authority to certify the By-laws, resolutions of the shareholders and the Board of Directors and committees thereof, and other documents of the Corporation as true and correct copies hereof.

 

Section 5.11  Controller.  The Controller will conduct the accounting activities of the Corporation, including the maintenance of the Corporation’s general and supporting ledgers and books of account, operating budgets, and the preparation and consolidation of financial statements.

 

Section 5.12  General Counsel.  The General Counsel will be the chief consultant of the Corporation on legal matters and will supervise all matters of legal import concerning the interests of the Corporation.

 

Section 5.13  Assistant Treasurer.  The Assistant Treasurer shall, in the absence or

 

14



 

incapacity of the Treasurer, perform the duties and exercise the powers of the Treasurer, and shall perform such other duties as shall from time to time be given to him or her by the Treasurer.

 

Section 5.14  Assistant Secretary.  The Assistant Secretary shall, in the absence or incapacity of the Secretary, perform the duties and exercise the powers of the Secretary, and shall perform such other duties as shall from time to time be given to him or her by the Secretary.  The Assistant Secretary shall be, with the Secretary, keeper of the books, records, and the seal of the Corporation, and shall have the authority to certify the By-laws, resolutions and other documents of the Corporation.

 

Section 5.15  General Powers of Officers.  The Chairman of the Board, the Chief Executive Officer, any President, and any Executive, Group or Senior Vice President, may sign without countersignature any deeds, mortgages, bonds, contracts, reports to public agencies, or other instruments whether or not the Board of Directors has expressly authorized execution of such instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-laws solely to some other Officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed.  Any other Officer of this Corporation may sign contracts, reports to public agencies, or other instruments which are in the regular course of business and within the scope of his or her authority, except where signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-laws to some other Officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed.

 

ARTICLE VI
STOCK CERTIFICATES AND TRANSFERS

 

Section 6.1  Certificated and Uncertificated Stock; Transfers.  The interest of each stockholder of the Corporation may be evidenced by certificates for shares of stock in such form as the appropriate officers of the Corporation may from time to time prescribe or be uncertificated.

 

The shares of the stock of the Corporation shall be transferred on the books of the Corporation, in the case of certificated shares of stock, by the holder thereof in person or by his or her attorney duly authorized in writing, upon surrender for cancellation of certificates for at least the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require; and, in the case of uncertificated shares of stock, upon receipt of proper transfer instructions from the registered holder of the shares or by such person’s attorney duly authorized in writing, and upon compliance with appropriate procedures for transferring shares in uncertificated form.  No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

 

The certificates of stock shall be signed, countersigned and registered in such manner as the Board of Directors may by resolution prescribe, which resolution may permit all or any of the

 

15


 

signatures on such certificates to be in facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

 

Notwithstanding anything to the contrary in these By-laws, at all times that the Corporation’s stock is listed on a stock exchange, the shares of the stock of the Corporation shall comply with all direct registration system eligibility requirements established by such exchange, including any requirement that shares of the Corporation’s stock be eligible for issue in book-entry form.  All issuances and transfers of shares of the Corporation’s stock shall be entered on the books of the Corporation with all information necessary to comply with such direct registration system eligibility requirements, including the name and address of the person to whom the shares of stock are issued, the number of shares of stock issued and the date of issue.  The Board of Directors shall have the power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of shares of stock of the Corporation in both the certificated and uncertificated form.

 

Section 6.2  Lost, Stolen or Destroyed Certificates.  No certificate for shares of stock in the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed or stolen, except on production of such evidence of such loss, destruction or theft and on delivery to the Corporation of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board of Directors or any financial officer may in its or his or her discretion require.

 

Section 6.3  Record Owners.  The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.

 

Section 6.4  Transfer and Registry Agents.  The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.

 

ARTICLE VII
INDEMNIFICATION

 

Section 7.1  Indemnification.

 

(A)          Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “Proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was, at any time during which this By-law is in effect (whether or not such person continues to serve in such capacity at the time any indemnification or advancement of expenses pursuant hereto is sought or at the time

 

16



 

any Proceeding relating thereto exists or is brought), a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, trustee, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation (hereinafter, a “Covered Person”), whether the basis of such Proceeding is alleged action in an official capacity as a director or officer or while serving as a director, officer, trustee, employee or agent, shall be indemnified and held harmless by the Corporation (and any successor of the Corporation by merger or otherwise) to the fullest extent authorized by the DGCL as the same exists or may hereafter be amended or modified from time to time (but, in the case of any such amendment or modification, only to the extent that such amendment or modification permits the Corporation to provide greater indemnification rights than said law permitted the Corporation to provide prior to such amendment or modification), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties (including those arising under the Employee Retirement Income Security Act of 1974) and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such Covered Person in connection with such Proceeding and such indemnification shall continue as to a person who has ceased to be a director, officer, trustee, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (A) of Section 7.3, the Corporation shall not be required to indemnify any such person (or his or her heirs, executors or personal or legal representatives) seeking indemnification in connection with a Proceeding (or part thereof) initiated by such person unless such Proceeding (or part thereof) was authorized or consented to by the Board of Directors.

 

(B)          To obtain indemnification under this By-law, a claimant shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification.  Upon written request by a claimant for indemnification, a determination, if required by applicable law, with respect to the claimant’s entitlement thereto shall be made as follows:  (1) if requested by the claimant, by Independent Counsel (as hereinafter defined), or (2) if no request is made by the claimant for a determination by Independent Counsel, (i) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (ii) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the claimant, or (iii) if a quorum of Disinterested Directors so directs, by a majority vote of the stockholders of the Corporation.  In the event the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected by the Board of Directors unless there shall have occurred within two years prior to the date of the commencement of the Proceeding for which indemnification is claimed a “Change in Control” as

 

17



 

defined in the [AbbVie Inc. 2013 Incentive Stock Program], in which case the Independent Counsel shall be selected by the claimant unless the claimant shall request that such selection be made by the Board of Directors.  If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within ten (10) days after such determination.

 

Section 7.2  Mandatory Advancement of Expenses.  To the fullest extent authorized by the DGCL as the same exists or may hereafter be amended or modified from time to time (but, in the case of any such amendment or modification, only to the extent that such amendment or modification permits the Corporation to provide greater rights to advancement of expenses than said law permitted the Corporation to provide prior to such amendment or modification), each Covered Person shall have (and shall be deemed to have a contractual right to have) the right, without the need for any action by the Board of Directors, to be paid by the Corporation (and any successor of the Corporation by merger or otherwise) the expenses incurred in connection with any Proceeding in advance of its final disposition, such advances to be paid by the Corporation within twenty (20) days after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, that if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter, the “Undertaking”) by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal (a “final disposition”) that such director or officer is not entitled to be indemnified for such expenses under this By-law or otherwise.

 

Section 7.3  Claims.

 

(A)          (1) If a claim for indemnification under this Article VII is not paid in full by the Corporation within thirty (30) days after a written claim pursuant to Section 7.1(B) of these By-laws has been received by the Corporation, or (2) if a request for advancement of expenses under this Article VII is not paid in full by the Corporation within twenty (20) days after a statement pursuant to Section 7.2 of these By-laws and the required Undertaking, if any, have been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim for indemnification or request for advancement of expenses and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim.  It shall be a defense to any such action that, under the DGCL, the claimant has not met the standard of conduct which makes it permissible for the Corporation to indemnify the claimant for the amount claimed or that the claimant is not entitled to the requested advancement of expenses, but (except where the required Undertaking, if any, has not been tendered to the Corporation) the burden of proving

 

18



 

such defense shall be on the Corporation.  Neither the failure of the Corporation (including its Board of Directors, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, Independent Counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

(B)          If a determination shall have been made pursuant to Section 7.1(B) of these By-laws that the claimant is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced pursuant to paragraph (A) of this Section 7.3.

 

(C)          The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to paragraph (A) of this Section 7.3 that the procedures and presumptions of this By-law are not valid, binding and enforceable and shall stipulate in such proceeding that the Corporation is bound by all the provisions of this By-law.

 

Section 7.4  Contract Rights; Amendment and Repeal; Non-exclusivity of Rights.

 

(A)          All of the rights conferred in this Article VII, as to indemnification, advancement of expenses and otherwise, shall be contract rights between the Corporation and each Covered Person to whom such rights are extended that vest at the commencement of such Covered Person’s service to or at the request of the Corporation and (x) any amendment or modification of this Article VII that in any way diminishes or adversely affects any such rights shall be prospective only and shall not in any way diminish or adversely affect any such rights with respect to any actual or alleged state of facts, occurrence, action or omission occurring prior to the time of such amendment or modification, or Proceeding previously or thereafter brought or threatened based in whole or in part upon any such actual or alleged state of facts, occurrence, action or omission, and (y) all of such rights shall continue as to any such Covered Person who has ceased to be a director or officer of the Corporation or ceased to serve at the Corporation’s request as a director, officer, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, as described herein, and shall inure to the benefit of such Covered Person’s heirs, executors and administrators.

 

(B)          All of the rights conferred in this Article VII, as to indemnification, advancement of expenses and otherwise, (i) shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-laws, agreement, vote of stockholders or Disinterested Directors or otherwise and (ii) cannot be terminated by the Corporation, the Board of Directors or the stockholders of the Corporation with respect to a person’s service prior to the date of such termination.

 

Section 7.5  Insurance, Other Indemnification and Advancement of Expenses.

 

(A)          The Corporation may maintain insurance, at its expense, to protect itself and any current or former director, officer, employee or agent of the Corporation or another

 

19



 

corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.  To the extent that the Corporation maintains any policy or policies providing such insurance, each such current or former director or officer, and each such agent or employee to which rights to indemnification have been granted as provided in paragraph (B) of this Section 7.5, shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage thereunder for any such current or former director, officer, employee or agent.

 

(B)          The Corporation may, to the extent authorized from time to time by the Board of Directors or the Chief Executive Officer, grant rights to indemnification and rights to advancement of expenses incurred in connection with any Proceeding in advance of its final disposition, to any current or former employee or agent of the Corporation to the fullest extent of the provisions of this By-law with respect to the indemnification and advancement of expenses of current or former directors and officers of the Corporation.

 

Section 7.6  Definitions.  For purposes of this By-law:

 

(A)          “Disinterested Director” means a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the claimant.

 

(B)          “Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s rights under this By-law.

 

Section 7.7  Notice.  Any notice, request or other communication required or permitted to be given to the Corporation under this By-law shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary.

 

Section 7.8  Severability.  If any provision or provisions of this By-law shall be held to be invalid, illegal or unenforceable for any reason whatsoever:  (1) the validity, legality and enforceability of the remaining provisions of this By-law (including, without limitation, each portion of any paragraph of this By-law containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this By-law (including, without limitation, each such portion of any paragraph of this By-law containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

ARTICLE VIII
MISCELLANEOUS PROVISIONS

 

Section 8.1  Fiscal Year.  The fiscal year of the Corporation shall begin on the

20



 

first day of January and end on the thirty-first day of December of each year.

 

Section 8.2  Dividends.  The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the Certificate of Incorporation.

 

Section 8.3  Seal.  The corporate seal shall have enscribed thereon the words “Corporate Seal”, the year of incorporation and around the margin thereof the words “AbbVie Inc. - Delaware.”

 

Section 8.4  Waiver of Notice.  Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of the DGCL or these By-laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.  Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or the Board of Directors or committee thereof need be specified in any waiver of notice of such meeting.

 

Section 8.5  Audits.  The accounts, books and records of the Corporation shall be audited upon the conclusion of each fiscal year by an independent certified public accountant selected by the Board of Directors, and it shall be the duty of the Board of Directors to cause such audit to be done annually.

 

Section 8.6  Resignations.  Any director or any officer, whether elected or appointed, may resign at any time by giving written notice of such resignation to the Chairman of the Board, the President, or the Secretary, and such resignation shall be deemed to be effective as of the close of business on the date said notice is received by the Chairman of the Board, the President, or the Secretary, or at such later time as is specified therein.  No formal action shall be required of the Board of Directors or the stockholders to make any such resignation effective.

 

ARTICLE IX
CONTRACTS, PROXIES, ETC.

 

Section 9.1  Contracts.  Except as otherwise required by law, the Certificate of Incorporation or these By-laws, any contracts or other instruments may be executed and delivered in the name and on the behalf of the Corporation by such officer or officers of the Corporation as the Board of Directors may from time to time direct.  Such authority may be general or confined to specific instances as the Board may determine.  The Chairman of the Board, the Chief Executive Officer, any President, and any Executive, Group or Senior Vice President may execute bonds, contracts, deeds, leases and other instruments to be made or executed for or on behalf of the Corporation.  Subject to any restrictions imposed by the Board of Directors or the Chairman of the Board, the President or any Vice President of the Corporation may delegate contractual powers to others under his or her jurisdiction, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.

 

Section 9.2  Proxies.  Unless otherwise provided by resolution adopted by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, a President, an Executive,

 

21



 

Group or Senior Vice President may from time to time appoint an attorney or attorneys or agent or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as the holder of stock or other securities in any other corporation, any of whose stock or other securities may be held by the Corporation, at meetings of the holders of the stock or other securities of such other corporation, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he or she may deem necessary or proper in the premises.

 

ARTICLE X
AMENDMENTS

 

Section 10.1  AmendmentsThese By-laws may be altered, amended or repealed, in whole or in part, and new By-laws may be adopted (i) by the affirmative vote of the shares representing a majority of the votes entitled to be cast by the Voting Stock; provided, however, that any proposed alteration, amendment or repeal of, or the adoption of any By-law inconsistent with, Section 2.2, 2.12, 3.2, 3.3, 3.10 or 3.11, Article VII or this Article X of these By-laws (in each case, as in effect on the date hereof), by the stockholders shall require the affirmative vote of shares representing not less than eighty percent (80%) of the votes entitled to be cast by the Voting Stock; and provided further, however, that in the case of any such stockholder action at a meeting of stockholders, notice of the proposed alteration, amendment, repeal or adoption of the new By-law or By-laws must be contained in the notice of such meeting, or (ii) by action of the Board of Directors of the Corporation; provided, however, that the case of any such action at a meeting of the Board of Directors, notice of the proposed alteration, amendment, repeal or adoption of the new By-law or By-laws must be given not less than two days prior to the meeting.  The provisions of this Section 10.1 are subject to any provisions requiring a greater vote that are set forth in the Certificate of Incorporation.

 

22




Exhibit 10.1

 

FORM OF U.S. TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

ABBOTT LABORATORIES

 

AND

 

ABBVIE INC.

 

DATED AS OF [·], 2012

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I   DEFINITIONS

1

 

 

Section 1.01.

Definitions

1

 

 

 

ARTICLE II   SERVICES

4

 

 

Section 2.01.

Initial Services

4

Section 2.02.

Omitted Services; Excluded Services; Additional Services

4

Section 2.03.

Performance of Services

5

Section 2.04.

Charges for Services

6

Section 2.05.

Reimbursement for Out-of-Pocket Expenses

7

Section 2.06.

Changes to Services

7

Section 2.07.

Transitional Nature of Services

7

Section 2.08.

Use of Third Parties to Provide Services

7

 

 

 

ARTICLE III   OTHER ARRANGEMENTS

8

 

 

Section 3.01.

Access

8

 

 

 

ARTICLE IV   BILLING; TAXES

9

 

 

Section 4.01.

Procedure

9

Section 4.02.

Late Payments

10

Section 4.03.

Taxes

10

Section 4.04.

No Set-Off

10

 

 

 

ARTICLE V   TERM AND TERMINATION

10

 

 

Section 5.01.

Term

10

Section 5.02.

Early Termination

10

Section 5.03.

Reduction of Services

11

Section 5.04.

Extension of Services

12

Section 5.05.

Effect of Termination

12

Section 5.06.

Information Transmission

13

 

 

 

ARTICLE VI   CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

13

 

 

Section 6.01.

Abbott and AbbVie Obligations

13

Section 6.02.

No Release

14

Section 6.03.

Third Party Information; Privacy or Data Protection Laws

14

Section 6.04.

Protective Arrangements

14

 

 

 

ARTICLE  VII LIMITED LIABILITY AND INDEMNIFICATION

15

 

i



 

TABLE OF CONTENTS
(continued)

 

Section 7.01.

Limitations on Liability

15

Section 7.02.

Obligation to Re-Perform; Liabilities

15

Section 7.03.

Third Party Claims

16

Section 7.04.

Indemnification Procedures

16

 

 

 

ARTICLE VIII   TRANSITION COMMITTEE

16

 

 

Section 8.01.

Establishment

16

Section 8.02.

General Principles

16

 

 

 

ARTICLE IX   MISCELLANEOUS

16

 

 

Section 9.01.

Mutual Cooperation

16

Section 9.02.

Title to Intellectual Property

17

Section 9.03.

Force Majeure

17

Section 9.04.

Independent Contractors

17

Section 9.05.

Third Party Beneficiaries

17

Section 9.06.

Governing Law

18

Section 9.07.

Dispute Resolution

18

Section 9.08.

Specific Performance

18

Section 9.09.

Interpretation

18

Section 9.10.

Headings

19

Section 9.11.

Amendment

19

Section 9.12.

Assignability

19

Section 9.13.

Audit Assistance

19

Section 9.14.

Survival of Covenants

20

Section 9.15.

Subsidiaries

20

Section 9.16.

Waivers of Default

20

Section 9.17.

Notices

20

Section 9.18.

Counterparts

21

Section 9.19.

Entire Agreement

21

Section 9.20.

Corporate Power

21

Section 9.21.

Signatures and Delivery

21

Section 9.22.

Severability

21

Section 9.23.

Further Assurances

22

Section 9.24.

Public Announcements

22

Section 9.25.

Mutual Drafting

22

 

ii



 

THIS U.S. TRANSITION SERVICES AGREEMENT, dated as of [·], is by and between ABBOTT LABORATORIES, an Illinois corporation (“Abbott”), and ABBVIE INC., a Delaware corporation (“AbbVie”).

 

R E C I T A L S:

 

WHEREAS, the board of directors of Abbott has determined that it is appropriate and advisable to separate Abbott’s 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 [·], 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 (as defined in the Separation and Distribution Agreement) from Abbott, the distribution by Abbott of AbbVie common stock to Abbott shareholders, and the execution and delivery of this Agreement and certain other agreements in order to facilitate and provide for the foregoing, in each case subject to the terms and conditions set forth therein; and

 

WHEREAS, in order to ensure an orderly transition under the Separation and Distribution Agreement, it shall be necessary for each of the Parties (as defined herein) to provide to the other the Services (as defined herein) for a transitional period.

 

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

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.                          Definitions.  Reference is made to Section 9.09 regarding the interpretation of certain words and phrases used in this Agreement.  In addition, for the purpose of this Agreement, the following terms shall have the meanings set forth below:

 

Abbott” has the meaning set forth in the Preamble.

 

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

 

AbbVie” has the meaning set forth in the Preamble.

 

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

 

Additional Service” has the meaning set forth in Section 2.02(c).

 

Agreement” means this U.S. Transition Services Agreement and each of the Schedules and Exhibits hereto.

 



 

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

 

Charges” has the meaning set forth in Section 2.04.

 

Dispute” has the meaning set forth in Section 9.07(a).

 

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

 

Excluded Service” has the meaning set forth in Section 2.02(b).

 

Force Majeure” has the meaning set forth in the Separation and Distribution Agreement.

 

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

 

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

 

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

 

Initial Services” has the meaning set forth in Section 2.01.

 

Interest Payment” has the meaning set forth in Section 4.02.

 

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

 

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

 

Notice” means any written notice, request, demand or other communication specifically referencing this Agreement and given in accordance with Section 9.17.

 

Omitted Service” has the meaning set forth in Section 2.02(a).

 

Parties” means the parties to this Agreement.

 

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

 

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.

 

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

 

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

 

Provider” means, with respect to any Service, the entity or entities identified on the applicable subsection of Schedule 1 hereto as the “Service Provider.”

 

Provider Indemnitees” has the meaning set forth in Section 7.03.

 

Recipient” means, with respect to any Service, the entity or entities identified on the applicable subsection of Schedule 1 hereto as the “Service Recipient.”

 

Reinstated Service” has the meaning set forth in Section 2.02(b).

 

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

 

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

 

Service Baseline Period” has the meaning set forth in Section 2.03(c).

 

Service Extension” has the meaning set forth in Section 5.04(a).

 

Service Period” means, with respect to any Service, the period commencing on the later of (a) the Effective Time and (b) the date on which any Omitted Service, Excluded Service or Additional Service becomes a “Service” pursuant to the terms of this Agreement, and ending on the earlier of (i) the date the Recipient terminates the provision of such Service pursuant to Section 5.02, and (ii) the termination date (measured as the number of months from the Effective Time) specified with respect to such Service on the subsection of Schedule 1 hereto applicable to such Service, unless extended pursuant to Section 5.04.

 

Services” means the Initial Services, Omitted Services, Reinstated Services and Additional Services.

 

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

 

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

 

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

 

Third Party” has the meaning set forth in the Separation and Distribution Agreement.

 

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

 

ARTICLE II

 

SERVICES

 

Section 2.01.                          Initial Services.  Commencing as of the Effective Time, the Provider agrees to provide, or to cause one of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient, the applicable services (the “Initial Services”) set forth on each of the subsections of Schedule 1 hereto.

 

Section 2.02.                          Omitted Services; Excluded Services; Additional Services.

 

(a)                                 If, following the Effective Time and during the term of this Agreement, a Party identifies a service that, prior to the Effective Time, the other Party or any of its Subsidiaries provided to the identifying Party or any of its Subsidiaries, but such service was inadvertently omitted from the Services set forth on Schedule 1 hereto (each such service, an “Omitted Service”), then the other Party shall use commercially reasonable efforts to provide, or to cause one of its Subsidiaries to provide, any such Omitted Service to the identifying Party and its Subsidiaries; provided that the other Party shall not be obligated to provide any Omitted Service if it does not, in its reasonable judgment, have adequate resources to provide such Omitted Service or if the provision of such Omitted Service would significantly disrupt the operation of its businesses.  The Parties shall cooperate and act in good faith to create a supplemental subsection of Schedule 1 hereto for each Omitted Service in the form attached hereto as Exhibit A.  The Parties shall (i) amend Schedule 1 hereto to include the Omitted Service and (ii) promptly deliver a copy of such amendment to the Transition Committee.  Each supplemental subsection of Schedule 1 hereto, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such agreement and the Omitted Services set forth therein shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

(b)                                 If, following the Effective Time and during the term of this Agreement, a Party identifies a service that, prior to the Effective Time, the other Party or any of its Subsidiaries provided to the identifying Party or any of its Subsidiaries, but the Parties had mutually agreed that such service would not be provided under the terms of this Agreement (each such service, an “Excluded Service”), then the Transition Committee shall consider whether the other Party shall provide such Excluded Service to the identifying Party or any of its Subsidiaries under the terms of this Agreement.  If the Transition Committee determines that the other Party shall provide such Excluded Service to the identifying Party (each such Excluded Service, a “Reinstated Service”), then the Transition Committee will act in good faith to create a supplemental subsection of Schedule 1 hereto for each Reinstated Service in the form attached hereto as Exhibit A.  The Parties shall (i) amend Schedule 1 hereto to include the Reinstated Service and (ii) promptly deliver a copy of such amendment to the Transition Committee.  Each supplemental subsection of Schedule 1 hereto, as approved by the Transition Committee, shall be deemed part of this Agreement as of the date of such agreement and the Reinstated Services set

 

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forth therein shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

(c)                                  If, following the Effective Time and during the term of this Agreement, a Party identifies a service, other than an Omitted Service or an Excluded Service, that it desires for the other Party or any of its Subsidiaries to provide to the identifying Party or any of its Subsidiaries (each such service, an “Additional Service”), then the other Party shall consider such request, in conjunction with the Transition Committee; provided that nothing shall require the other Party to provide such Additional Service to the identifying Party.  If the other Party consents to providing an Additional Service to the identifying Party, then the Parties shall cooperate and act in good faith to create a supplemental subsection of Schedule 1 hereto for each such Additional Service in the form attached hereto as Exhibit A.  The Parties shall (i) amend Schedule 1 hereto to include the Additional Service and (ii) promptly deliver a copy of such amendment to the Transition Committee.  Each supplemental subsection of Schedule 1 hereto, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such agreement and the Additional Services set forth therein shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

Section 2.03.                          Performance of Services.

 

(a)                                 The Provider shall perform and cause its Subsidiaries to perform all Services to be provided by the Provider in a manner that is based on its past practice and that is substantially similar in nature, quality and timeliness to the analogous services provided by Abbott or any of its Subsidiaries to Abbott or its applicable functional group or Subsidiary prior to the Effective Time.  The Provider shall, and shall cause its Subsidiaries to, perform its duties and responsibilities hereunder in good faith.

 

(b)                                 Nothing in this Agreement shall require the Provider to perform or cause to be performed any Service to the extent the manner of such performance would constitute a violation of applicable Laws, the Abbott Code of Business Conduct or any existing contract or agreement with a Third Party.  If the Provider is or becomes aware of any such restriction on the Provider, the Provider shall use commercially reasonable efforts to promptly send a Notice to the Recipient of any such restriction.  The Parties each agree to cooperate and use commercially reasonable efforts to obtain any necessary Third Party consents required under any existing contract or agreement with a Third Party to allow the Provider to perform or cause to be performed any Service in accordance with the standards set forth in this Section 2.03(b).  Any costs and expenses incurred by any Party or any of its Subsidiaries in connection with obtaining any such Third Party consent that is required to allow the Provider to perform or cause to be performed (i) any Service (other than an Additional Service) shall be split between the Provider and the Recipient in accordance with such Parties’ respective utilization of the applicable Service at such time (except with respect to fees imposed by Third Parties to allow joint participation by the Provider and the Recipient under information technology contracts and licenses, which fees shall be split equally between the Provider and the Recipient) and (ii) any Additional Service shall be solely the responsibility of the Recipient.  If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Third Party consent or the performance of such Service by the Provider would continue to constitute a violation of applicable Laws or the Abbott Code of Business Conduct, the Provider shall use

 

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commercially reasonable efforts in good faith to provide such Services 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)                                  The Provider shall not be obligated to perform or to cause to be performed any Service in a volume or quantity in any calendar year that exceeds the highest volumes or quantities of analogous services provided to Abbott or its applicable functional group or Subsidiary during calendar year 2012, as set forth in the 2012 plan (without reference to the transactions contemplated by the Separation and Distribution Agreement) (the “Service Baseline Period”).  If the Recipient requests that the Provider perform or cause to be performed any Service in a volume or quantity that exceeds the highest volumes or quantities of analogous services that were provided to Abbott or its applicable functional group or Subsidiary during the Service Baseline Period, then: (i) if such higher volume or quantity results from fluctuations occurring in the ordinary course of business of the Recipient, the Provider shall use commercially reasonable efforts to provide such requested higher volume or quantity; and (ii) if such higher volume or quantity results from any other source, including an acquisition, merger, purchase or other business combination by the Recipient, the Transition Committee shall determine whether the Provider will be required to provide such requested higher volume or quantity.  If the Transition Committee determines that the Provider shall provide the requested higher volume or quantity then such higher volume or quantity shall be documented in a written agreement signed by the Recipient and the Provider who shall promptly provide a copy of such written agreement to the Transition Committee.  Each amended subsection of Schedule 1 hereto, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such agreement and the volume or quantity increases set forth in such written agreement shall be deemed a part of the “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

(d)                                 (i) Neither the Provider nor any of its Subsidiaries shall 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 Recipient or its Subsidiaries, and (ii) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 2.03, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL SERVICES AND PRODUCTS ARE PROVIDED ON AN “AS-IS” BASIS, THAT THE RECIPIENT ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES, AND THAT THE PROVIDER MAKES NO REPRESENTATIONS OR 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.

 

(e)                                  Each Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement.  No Party shall knowingly take any action in violation of any such applicable Law that results in Liability being imposed on the other Party.

 

Section 2.04.                          Charges for Services.  The Recipient shall pay the Provider of such Services a monthly fee for the Services (or category of Services, as applicable) (each fee

 

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constituting a “Charge” and, collectively, “Charges”), which Charges shall be agreed to by the Parties from time to time.  During the term of this Agreement, the amount of a Charge for any Services may adjust to the extent of:  (a) any adjustments mutually agreed to by the Parties; (b) any Charges applicable to any Omitted Services, Reinstated Services or Additional Services; and (c) in accordance with Section 2.08, any proportional adjustment in the rates or charges imposed by any Third Party provider that is providing Services.  Together with any monthly invoice for Charges, the Provider shall provide the Recipient with reasonable documentation, including any additional documentation reasonably requested by the Recipient to the extent such documentation is in the Provider’s or its Subsidiaries’ possession or control, to support the calculation of such Charges.

 

Section 2.05.                          Reimbursement for Out-of-Pocket Expenses.  The Recipient shall reimburse the Provider for reasonable out-of-pocket costs and expenses incurred by the Provider or any of its Subsidiaries in connection with providing the Services (including reasonable travel-related expenses) to the extent that such costs and expenses are not reflected in the Charges for such Services; provided, however, that any such cost or expense not consistent with historical practice between the Parties for any Service (including business travel and related expenses) shall require advance approval of the Recipient.  Any authorized travel-related expenses incurred in performing the Services shall be incurred and charged to the Recipient in accordance with the Provider’s then applicable business travel policies.

 

Section 2.06.                          Changes to Services.  Except as provided in Section 2.08 and subject to the performance standards set forth in this Article II, the Provider may make changes from time to time in the manner of performing the Services as required under Section 2.03(a) if the Provider is making similar changes in performing analogous services for itself and if the Provider furnishes to the Recipient reasonable prior Notice (in content and timing) respecting such changes.  No such change shall affect the timeliness or quality of, or the Charges for, the applicable Service.  If any such change by the Provider reasonably requires the Recipient to incur incremental costs and expenses in order to continue to receive and utilize the applicable Services in the same manner as the Recipient was receiving and utilizing such Service prior to such change, the Provider shall be required to reimburse the Recipient for all such reasonable costs and expenses.  Upon request, the Recipient shall provide the Provider with reasonable documentation, including any additional documentation reasonably requested by the Provider to the extent such documentation is in the Recipient’s or its Subsidiaries’ possession or control, to support the calculation of such incremental costs and expenses.

 

Section 2.07.                          Transitional Nature of Services.  The Parties acknowledge the transitional nature of the Services and agree to cooperate in good faith and to use commercially reasonable efforts to effectuate a smooth transition of the Services from the Provider to the Recipient (or its designee).

 

Section 2.08.                          Use of Third Parties to Provide Services.  The Provider may perform its obligations to provide a Service through agents, subcontractors or independent contractors, provided that the delegation of performance of the applicable Service does not impact the timeliness or quality of such Service, in accordance with the following:

 

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(a)                                  Provider is Currently Using Third Parties as of the Effective Time.  If, as of the Effective Time, (i) the Provider is obtaining analogous services for itself from agents, subcontractors or independent contractors, or (ii) the Provider is obtaining services from agents, subcontractors or independent contractors which services the Provider shall only provide to the Recipient under this Agreement and the Provider shall not otherwise require such analogous services for itself during the term of this Agreement, then the Charges for the applicable Services the Provider is obtaining from such Third Parties may be adjusted proportionally by the Provider pursuant to Section 2.04(c) to reflect any adjustment in the rates or charges imposed by the Third Party that is providing such Services; or

 

(b)                                 Provider Elects to Switch to Third Parties After the Effective Time.

 

(i)                                     If, following the Effective Time, the Provider elects to obtain analogous services for itself from agents, subcontractors or independent contractors (A) the Provider shall furnish to the Recipient reasonable prior Notice (in content and timing) respecting such use of Third Parties, and (B) the Charges for the applicable Services the Provider is obtaining from such Third Parties may be adjusted proportionally by the Provider pursuant to Section 2.04(c) to reflect any adjustment in the rates or charges imposed by the Third Party that is providing such Services; and

 

(ii)                                  If, however, following the Effective Time, the Provider is not obtaining analogous services for itself from agents, subcontractors or independent contractors (A) the Provider shall furnish to the Recipient reasonable prior Notice (in content and timing) respecting such use of Third Parties, and (B) the Charges for the applicable Services the Provider is providing through such Third Parties appointed following the Effective Time may not be adjusted by the Provider as a result of any adjustments in the rates or charges imposed by such Third Parties.

 

Notwithstanding the foregoing, the Provider shall not be relieved of its obligations under this Agreement by use of such agents, subcontractors or independent contractors.

 

ARTICLE III

 

OTHER ARRANGEMENTS

 

Section 3.01.                             Access.

 

(a)                                  AbbVie shall, and shall cause its Subsidiaries to, allow Abbott and its Subsidiaries and their respective Representatives reasonable access to the facilities of AbbVie and its Subsidiaries that is necessary for Abbott and its Subsidiaries to fulfill their obligations under this Agreement.  In addition to the foregoing right of access, AbbVie shall, and shall cause its Subsidiaries to, afford Abbott, its Subsidiaries and their respective Representatives, upon reasonable advance notice, reasonable access during normal business hours to the facilities, Information, systems, infrastructure and personnel of AbbVie and its Subsidiaries as reasonably necessary for Abbott to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the Services being provided by AbbVie or its Subsidiaries, including in connection with verifying compliance with

 

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Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably interfere with any of the business or operations of AbbVie or any of its Subsidiaries and (ii) in the event that AbbVie determines that providing such access could be commercially detrimental, violate any Law or agreement, or waive any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit such access in a manner that avoids any such harm or consequence.  Abbott agrees that all of its and its Subsidiaries’ employees shall, and that it shall use commercially reasonable efforts to cause its Representatives’ employees to, when on the property of AbbVie and its Subsidiaries, or when given access to any facilities, Information, systems, infrastructure or personnel of AbbVie and its Subsidiaries, conform to the policies and procedures of AbbVie and any of its Subsidiaries, as applicable, concerning health, safety, conduct and security which are made known to Abbott from time to time.

 

(b)                                 Abbott shall, and shall cause its Subsidiaries to, allow AbbVie and its Subsidiaries and their respective Representatives reasonable access to the facilities of Abbott and its Subsidiaries that is necessary for AbbVie and its Subsidiaries to fulfill their obligations under this Agreement.  In addition to the foregoing right of access, Abbott shall, and shall cause its Subsidiaries to, afford AbbVie, its Subsidiaries and their respective Representatives, upon reasonable advance notice, reasonable access during normal business hours to the facilities, Information, systems, infrastructure, and personnel of Abbott and its Subsidiaries as reasonably necessary for AbbVie to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the Services being provided by Abbott or its Subsidiaries, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably interfere with any of the business or operations of Abbott or any of its Subsidiaries and (ii) in the event that Abbott determines that providing such access could be commercially detrimental, violate any Law or agreement, or waive any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit such access in a manner that avoids any such harm or consequence.  AbbVie agrees that all of its and its Subsidiaries’ employees shall, and that it shall use commercially reasonable efforts to cause its Representatives’ employees to, when on the property of Abbott and its Subsidiaries, or when given access to any facilities, Information, systems, infrastructure or personnel of Abbott and its Subsidiaries, conform to the policies and procedures of Abbott and any of its Subsidiaries, as applicable, concerning health, safety, conduct and security which are made known to AbbVie from time to time.

 

ARTICLE IV

 

BILLING; TAXES

 

Section 4.01.                             Procedure.  Charges for the Services shall be charged to and payable by the Recipient.  Amounts payable pursuant to the terms of this Agreement shall be paid by wire transfer (or such other method of payment as may be agreed between the Parties) to the Provider, as directed by the Provider, on a monthly basis, which amounts shall be due within sixty (60) 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 (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 2%, or the maximum legal rate, whichever is lower (the “Interest Payment”).

 

Section 4.03.                             Taxes.  Without limiting any provisions of this Agreement, the Recipient shall bear any and all Taxes and other similar charges (and any related interest and penalties) imposed on, or payable with respect to, any fees or charges, including any Charges, payable by it pursuant to this Agreement, including all sales, use, value-added, and similar Taxes, but excluding Taxes based on the Provider’s net income.  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 the 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 AND TERMINATION

 

Section 5.01.                             Term.  This Agreement shall commence at the Effective Time and shall terminate upon the earlier to occur of:  (a) the last date on which either Party is obligated to provide any Service to the other Party in accordance with the terms of this Agreement; or (b) the mutual written agreement of the Parties to terminate this Agreement in its entirety.  Unless otherwise terminated pursuant to Section 5.02, this Agreement shall terminate with respect to any Service at the close of business on the last day of the Service Period for such Service.  To the extent that the Provider’s ability to provide a Service is dependent on the continuation of a specified Service, the Provider’s obligation to provide such dependent Service shall terminate automatically with the termination of such supporting Service.

 

Section 5.02.                             Early Termination.  Without prejudice to the Recipient’s rights with respect to a Force Majeure, the Recipient may from time to time terminate this Agreement with respect to the entirety of any individual Service but not a portion thereof:

 

(a)                                  for any reason or no reason, upon the giving of an advance Notice to the Provider of such Service not less than the shorter of (i) one hundred eighty (180) days, or (ii) one-half the original Service Period for such Service; provided, however, that any such termination may only be effective as of the last day of a month; or

 

(b)                                 if the Provider of such Service has failed to perform any of its material obligations under this Agreement with respect to such Service, and such failure shall continue to exist forty five (45) days after receipt by the Provider of Notice of such failure from the Recipient; provided, however, that any such termination may only be effective as of the last day

 

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of a month; and provided, further, that the Recipient shall not be entitled to terminate the Agreement with respect to the applicable Service if, as of the end of such forty five (45)-day period, there remains a good faith Dispute between the Parties (undertaken in accordance with the terms of Section 9.07) as to whether the Provider has cured the applicable breach.

 

The Provider may terminate this Agreement with respect to any individual Service, but not a portion thereof, at any time upon prior Notice to the Recipient if the Recipient has failed to perform any of its material obligations under this Agreement relating to such Services, including making payment of Charges for such Service when due, and such failure shall continue uncured for a period of forty five (45) days after receipt by the Recipient of a Notice of such failure from the Provider; provided, however, that any such termination may only be effective as of the last day of a month; and provided, further, that the Provider shall not be entitled to terminate the Agreement with respect to the applicable Service if, as of the end of such forty five (45)-day period, there remains a good faith Dispute between the Parties (undertaken in accordance with the terms of Section 9.07) as to whether the Recipient has cured the applicable breach.  The relevant subsection of Schedule 1 hereto shall be updated to reflect any terminated Service.  The Parties acknowledge and agree that (A) there may be interdependencies among the Services being provided under this Agreement, (B) upon the request of either Party, the Transition Committee shall determine whether (1)  any such interdependencies exist with respect to the particular Service that a Party is seeking to terminate in accordance with this Section 5.02 and (2) the Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by the termination of another Service in accordance with Section 5.02 prior to the expiration of the period of the maximum duration for such Service, and (C) in the event that the Transition Committee has determined that such interdependencies exist and that the Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by the termination of another Service in accordance with Section 5.02 prior to the expiration of the period of the maximum duration for such Service, the Parties shall negotiate in good faith to amend the applicable subsection of Schedule 1 hereto relating to such impacted continuing Service, which amendment shall be consistent with the terms of comparable Services.

 

Section 5.03.                             Reduction of Services.  The Recipient may from time to time request a reduction in part of the scope or amount of any Service; provided that any such reduction may only take effect as of the end of a month.  If requested to do so by the Recipient, the Transition Committee shall discuss in good faith appropriate adjustments to the relevant Charges in light of all relevant factors.  If, after such discussions, the Transition Committee does not approve any requested reduction of the scope or amount of any Service and the relevant Charges in connection therewith, then (a) there shall be no change to the Charges under this Agreement and (b) unless the Parties otherwise agree in writing, there shall be no change to the scope or amount of any Services under this Agreement.  If, after such discussions, the Transition Committee approves any reduction of Service, such reduction of Service shall be documented in a written agreement executed on behalf of the Recipient and the Provider and a copy of such written agreement shall promptly be provided to the Transition Committee.  Additionally, in connection with any such reduction of Service, the Transition Committee may approve an appropriate reduction to the Charges related to the applicable reduced Service.

 

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Section 5.04.                             Extension of Services.

 

(a)                                  The Recipient may request to extend the Service Period of any Service (each such extension, a “Service Extension”) one time for each Service (unless the Transition Committee shall authorize additional extensions) by providing the Provider of such Service with advance Notice not less than the shorter of (i) one hundred eighty (180) days, or (ii) one-half of the original Service Period for such Service.

 

(b)                                 If the Recipient is requesting a Service Extension for a particular Service for the first time and the requested Service Extension is for a period of twelve (12) months or less past the originally scheduled expiration of the Service Period for the applicable Service, 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 subsection of Schedule 1 hereto, 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 borne solely by the Recipient.  If (A) the requested Service Extension is for a period of longer than twelve (12) months past the originally scheduled expiration of the Service Period for the applicable Service or (B) the Recipient has previously requested a Service Extension for the particular Service that the Recipient is currently requesting a Service Extension, then the Transition Committee shall determine whether the Provider shall provide the applicable Service for the requested Service Extension period.  If the Transition Committee determines that the Provider shall provide such Service during the requested Service Extension period, then the Parties shall in good faith (1) negotiate the terms of an amendment to the applicable subsection of Schedule 1 hereto, which amendment shall be consistent with the terms of the applicable Service and promptly provide a copy thereof to the Transition Committee, and (2) 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 borne solely by the Recipient.  Each amended subsection of Schedule 1 hereto, as agreed to in writing by the Parties or the Transition Committee, as applicable, shall be deemed part of this Agreement as of the date of such agreement 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 (w) there may be interdependencies among the Services being provided under this Agreement, (x) the Provider’s ability to extend the provision of a particular Service in accordance with this Agreement may be dependent on the extension of another Service, (y) upon the request of either Party, the Transition Committee 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 5.04 and (z) to the extent the Transition Committee has determined that such interdependencies exist, the Parties shall negotiate in good faith to amend the applicable subsection of Schedule 1 hereto relating to such other Service, which amendment shall be consistent with the terms of comparable Services.

 

Section 5.05.                             Effect of Termination.  Upon the termination of any Service pursuant to this Agreement, the Provider of the terminated Service shall have no further obligation to

 

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provide the terminated Service, and the Recipient shall have no obligation to pay any future Charges relating to any such Service; provided, however, that the Recipient shall remain obligated to the Provider for the Charges owed and payable in respect of Services provided prior to the effective date of termination for such Service.  In connection with the termination of any Service, the provisions of this Agreement not relating solely to such terminated Service shall survive any such termination, and in connection with a termination of this Agreement, Article I, this Article V, Article VII and Article IX, all confidentiality obligations under this Agreement and Liability for all due and unpaid Charges, shall continue to survive indefinitely.

 

Section 5.06.                             Information Transmission.  The Provider, on behalf of itself and its respective Subsidiaries, shall use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the Recipient, in accordance with Section 6.01(a) of the Separation and Distribution Agreement, any Information received or computed by the Provider for the benefit of the Recipient concerning the relevant Service during the Service Period; provided, however, that, except as otherwise provided for under the terms of the Information Technology Agreement (a) the Provider shall not have any obligation to provide or cause to provide Information in any non-standard format, (b) the Provider and its Subsidiaries shall be reimbursed for their reasonable costs in accordance with Section 6.01(c) of the Separation and Distribution Agreement for creating, gathering, copying, transporting and otherwise providing such Information, and (c) the Provider shall use commercially reasonable efforts to maintain any such Information in accordance with Section 6.03 of the Separation and Distribution Agreement.

 

ARTICLE VI

 

CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

 

Section 6.01.                             Abbott and AbbVie Obligations.  Subject to Section 6.04, 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 Representatives to hold, in strict confidence, with at least the same degree of care that applies to Abbott’s confidential and proprietary Information pursuant to policies in effect as of the 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 not use any such confidential and proprietary Information other than for such purposes as may be expressly permitted hereunder, except, in each case, to the extent that such confidential and proprietary Information 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 (c) 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 Abbott or any of its Subsidiaries is disclosed to AbbVie or any of its

 

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Subsidiaries in connection with providing the Services, then such disclosed confidential and proprietary Information shall be used only as required to perform the Services.  If any confidential and proprietary Information of AbbVie or any of its Subsidiaries is disclosed to Abbott or any of its Subsidiaries in connection with providing the Services, then such disclosed confidential and proprietary Information shall be used only as required to perform such Services.

 

Section 6.02.                             No Release.  Each Party agrees (a) not to release or disclose, or permit to be released or disclosed, any Information addressed in Section 6.01 to any other Person, except its Representatives who need to know such Information in their capacities as such, and except in compliance with Section 6.04 and (b) to use commercially reasonable efforts to maintain any such Information in accordance with Section 6.03 of the Separation and Distribution Agreement.

 

Section 6.03.                             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 (a) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and another Party or another Party’s Subsidiaries, on the other hand, prior to the Effective Time; or (b) that, as between the Parties, was originally collected by another Party or another 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 such other Party or such 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 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 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.

 

14



 

ARTICLE VII

 

LIMITED LIABILITY AND INDEMNIFICATION

 

Section 7.01.                             Limitations on Liability.

 

(a)                                  SUBJECT TO SECTION 7.02, THE LIABILITIES OF THE PROVIDER AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS 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 THE PROVIDER’S PROFITS FOR PERFORMING SERVICES HEREUNDER, WHICH SHALL BE DEEMED TO BE EQUAL TO THE AMOUNT OF THE MARK-UP RECEIVED BY THE PROVIDER DURING THE PREVIOUS TWELVE (12) MONTH PERIOD.

 

(b)                                 IN NO EVENT SHALL EITHER PARTY, ITS SUBSIDIARIES OR THEIR RESPECTIVE 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, ITS SUBSIDIARIES AND ITS REPRESENTATIVES 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 7.01 shall not apply to either Party’s Liability for breaches of confidentiality under Article VI or either Party’s obligations under Section 7.03.

 

(d)                                 The limitations in Section 7.01(a) and Section 7.01(b) shall not apply 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 7.02.                             Obligation to Re-Perform; Liabilities.  In the event of any breach of this Agreement by the Provider with respect to the provision of any Services (with respect to which the Provider can reasonably be expected to re-perform in a commercially reasonable manner), the Provider shall (a) promptly correct in all material respects such error, defect or breach or re-perform in all material respects such Services at the request of the Recipient and at the sole cost and expense of the Provider and (b) subject to the limitations set forth in Section 7.01, reimburse the Recipient and its Subsidiaries and Representatives for Liabilities attributable to such breach by the Provider.  The remedy set forth in this Section 7.02 shall be the sole and exclusive remedy of the Recipient for any such breach of this Agreement.  Any request for re-performance in accordance with this Section 7.02 by the Recipient must be in writing and specify in reasonable detail the particular error, defect or breach, and such request must be made no more than one (1)

 

15



 

month from the later of the date on which such breach occurred and the date on which such breach was reasonably discovered by the Recipient.

 

Section 7.03.                             Third Party Claims.  The Recipient shall indemnify, defend and hold harmless the Provider, its Subsidiaries and each of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the “Provider Indemnitees”), from and against any and all claims of Third Parties relating to, arising out of or resulting from the Provider’s furnishing or failing to furnish the Services provided for in this Agreement, other than (a) Third Party claims arising out of the gross negligence, willful misconduct or fraud of any Provider Indemnitee and (b) as set forth in Section 2.03(b).

 

Section 7.04.                             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 7.04, 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.

 

ARTICLE VIII

 

TRANSITION COMMITTEE

 

Section 8.01.                             Establishment.  Pursuant to the Separation and Distribution Agreement, Abbott and AbbVie shall establish the Transition Committee.  The Transition Committee shall have the authority to establish one or more subcommittees from time to time as it deems appropriate to monitor and manage matters arising out of or resulting from this Agreement.

 

Section 8.02.                             General Principles.  In furtherance of the foregoing and notwithstanding any provision in this Agreement to the contrary, each Party acknowledges and agrees that the Transition Committee shall have the right to review and amend any prior actions taken, decisions made or amendments or modifications agreed to, by the Parties, and to proscribe that the Parties take such actions or make such amendments or modifications as the Transition Committee deems appropriate in order to effect the intent and purpose of this Agreement and the transactions contemplated hereby.  Each Party shall take, or cause to be taken, any and all reasonable actions that the Transition Committee may reasonably request to carry out the intent and purpose of this Article VIII.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.01.                             Mutual Cooperation.  The Parties and their respective Subsidiaries shall cooperate with each other in connection with the performance of the Services hereunder; 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 9.01 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.

 

16



 

Section 9.02.                             Title to Intellectual Property.  Except as expressly provided for under the terms of this Agreement, the Recipient 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 Provider, by reason of the provision of the Services provided hereunder.  The Recipient shall not remove or alter any copyright, trademark, confidentiality or other proprietary notices that appear on any intellectual property owned or licensed by the Provider, and the Recipient shall not reproduce any such notices on any and all copies thereof.  The Recipient shall not attempt to decompile, translate, reverse engineer or make excessive copies of any intellectual property owned or licensed by the Provider, and the Recipient shall promptly notify the Provider of any such attempt, regardless of whether by the Recipient or any Third Party, of which the Recipient becomes aware.

 

Section 9.03.                             Force Majeure.  No 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 unless this Agreement has previously been terminated under Article V or under this Section 9.03.  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 Recipient or the Provider 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 unless this Agreement has previously been terminated under Article V or under this Section 9.03.  During the period of a Force Majeure, the Recipient shall be (i) relieved of the obligation to pay Charges for such Service(s) throughout the duration of such Force Majeure and (ii) entitled to permanently terminate such Service(s) (and shall be relieved of the obligation to pay Charges for such Service(s) throughout the duration of such Force Majeure) if a Force Majeure shall continue to exist for more than thirty (30) consecutive days, it being understood that the Recipient shall not be required to provide any advance notice of such termination to the Provider.

 

Section 9.04.                             Independent Contractors.  The Parties each acknowledge that they are separate entities, each of which has entered into this Agreement for independent business reasons.  The relationships of the Parties hereunder are those of independent contractors and nothing contained herein shall be deemed to create a joint venture, partnership or any other relationship.  Employees performing services hereunder do so on behalf of, under the direction of, and as employees of, the Provider, and the Recipient shall have no right, power or authority to direct such employees.

 

Section 9.05.                             Third Party Beneficiaries.  Except as provided in Article VII with respect to Provider Indemnitees, (a) the provisions of this Agreement are solely for the benefit of the Parties, their Subsidiaries and their permitted successors and assigns, and are not intended to confer upon any other Person except the Parties, their Subsidiaries and their permitted successors and assigns, any rights or remedies hereunder; and (b) there are no other Third Party beneficiaries of this Agreement and this Agreement shall not provide any other Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.

 

17


 

Section 9.06.                          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 9.07.                          Dispute Resolution.

 

(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 (each, a “Dispute”), Abbott and AbbVie agree that the Transition Committee (or such other Persons as the Transition Committee may designate) shall negotiate in good faith in an attempt to resolve such Dispute amicably.  If such Dispute has not been resolved by the Transition Committee within fifteen (15) days after the initial Notice of the Dispute (or such longer period as the Parties may agree), then such Dispute shall be resolved in accordance with the dispute resolution process referred to in Section 7.01 to the Separation and Distribution Agreement.

 

(b)                                 In any Dispute regarding the amount of a Charge, if such Dispute is finally resolved pursuant to the dispute resolution process set forth or referred to in Section 9.07(a) and it is determined that the Charge that the Provider has invoiced the Recipient, and that the Recipient has paid to the Provider, is greater or less than the amount that the Charge should have been, then (i) if it is determined that the Recipient has overpaid the Charge, the Provider shall within five (5) business days after such determination reimburse the Recipient an amount of cash equal to such overpayment, plus the Interest Payment, accruing from the date of payment by the Recipient to the time of reimbursement by the Provider; and (ii) if it is determined that the Recipient has underpaid the Charge, the Recipient shall within five (5) business days after such determination reimburse the Provider an amount of cash equal to such underpayment, plus the Interest Payment, accruing from the date such payment originally should have been made by the Recipient to the time of payment by the Recipient.

 

Section 9.08.                          Specific Performance.  Subject to Section 9.07, 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.  Unless otherwise agreed in writing, the Parties shall continue to provide Services and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of Section 9.07 and this Section 9.08 with respect to all matters subject to such Dispute; provided, however, that this obligation shall only exist during the term of this Agreement.

 

Section 9.09.                          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

 

18



 

context requires.  The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules and Exhibits hereto and thereto) and not to any particular provision of this Agreement.  Section, Exhibit and Schedule references are to the Sections, Exhibits, and Schedules to this Agreement unless otherwise specified.  Unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement.  The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified.  The word “or” shall not be exclusive.  Unless otherwise specified in a particular case, the word “days” refers to calendar days.  References herein to this Agreement or any other agreements contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the Effective Time and as it may be amended thereafter, unless otherwise specified.  References to the performance, discharge or fulfillment of any Liability in accordance with its terms shall have meaning only to the extent such Liability has terms.  If the Liability does not have terms, the reference shall mean performance, discharge or fulfillment of such Liability.

 

Section 9.10.                          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 9.11.                          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 each of Abbott and AbbVie.  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 9.12.                          Assignability.  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) the Recipient’s divestiture of all or substantially all of its assets to a Third Party or (ii) a Change of Control of the Recipient, the Recipient may assign to such Third Party its rights and obligations as the Recipient with respect to the Services provided to the Recipient under this Agreement; provided, however, that (x) no such assignment shall release the assigning Party from any Liability under this Agreement, (y) any and all costs and expenses incurred by either Party in connection with such assignment (including in connection with clause (z) of this proviso) shall be borne solely by the Recipient, and (z) the Parties shall in good faith negotiate any amendments to this Agreement, including the Exhibits and Schedules to this Agreement, that may be necessary or appropriate in order to assign such Services.

 

Section 9.13.                          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,

 

19



 

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 9.14.                          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 Effective Time and shall remain in full force and effect thereafter.

 

Section 9.15.                          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 an Abbott Subsidiary 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 an AbbVie Subsidiary.

 

Section 9.16.                          Waivers of Default.  Waiver by a 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 9.17.                          Notices.  All Notices 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, by facsimile or electronic transmission 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):

 

If to Abbott, to:

 

Abbott Laboratories

100 Abbott Park Road

Building AP6D, Dept. 364

Abbott Park, Illinois 60064-6020

Attn: [·]

 

If to AbbVie, to:

 

AbbVie Inc.
1 North Waukegan Road
North Chicago, Illinois 60064

Attn: [·]

 

20



 

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

 

Section 9.18.                          Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement.

 

Section 9.19.                          Entire Agreement.  This Agreement and the exhibits and schedules hereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties other than those set forth or referred to herein 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.

 

Section 9.20.                          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 9.21.                          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 9.22.                          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

 

21



 

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 9.23.                          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 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 9.24.                          Public Announcements.  From and after the Effective Time, the Parties shall consult with each other before issuing, 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 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 9.25.                          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 caused this Agreement to be executed by their duly authorized representatives.

 

 

ABBOTT LABORATORIES

 

ABBVIE INC.

 

 

 

 

 

 

By:

 

 

By:

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

[Signature Page – U.S. Transition Services Agreement]

 




Exhibit 10.2

 

EX-U.S. TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

ABBOTT LABORATORIES

 

AND

 

ABBVIE INC.

 

DATED AS OF [·], 2012

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I  DEFINITIONS

1

 

 

 

Section 1.01.

Definitions

1

 

 

 

ARTICLE II  SERVICES

4

 

 

 

Section 2.01.

Initial Services

4

Section 2.02.

Omitted Services; Excluded Services; Additional Services

4

Section 2.03.

Performance of Services

5

Section 2.04.

Charges for Services

7

Section 2.05.

Reimbursement for Out-of-Pocket Expenses

7

Section 2.06.

Changes to Services

7

Section 2.07.

Transitional Nature of Services

8

Section 2.08.

Use of Third Parties to Provide Services

8

Section 2.09.

Joinder Agreement

9

 

 

 

ARTICLE III  OTHER ARRANGEMENTS

9

 

 

 

Section 3.01.

Access

9

 

 

 

ARTICLE IV  BILLING; TAXES

10

 

 

 

Section 4.01.

Procedure

10

Section 4.02.

Late Payments

10

Section 4.03.

Taxes

10

Section 4.04.

No Set-Off

10

 

 

 

ARTICLE V  TERM AND TERMINATION

11

 

 

 

Section 5.01.

Term

11

Section 5.02.

Early Termination

11

Section 5.03.

Reduction of Services

12

Section 5.04.

Extension of Services

12

Section 5.05.

Effect of Termination

13

Section 5.06.

Information Transmission

13

 

 

 

ARTICLE VI  CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

14

 

 

 

Section 6.01.

Abbott and AbbVie Obligations

14

Section 6.02.

No Release

14

Section 6.03.

Third Party Information; Privacy and Data Protection Laws

14

Section 6.04.

Protective Arrangements

15

 

 

 

ARTICLE VII LIMITED LIABILITY AND INDEMNIFICATION

15

 

 

Section 7.01.

Limitations on Liability

15

 

i



 

TABLE OF CONTENTS
(continued)

 

 

 

Page

 

 

 

Section 7.02.

Obligation to Re-Perform; Liabilities

16

Section 7.03.

Third Party Claims

16

Section 7.04.

Indemnification Procedures

16

 

 

 

ARTICLE VIII  TRANSITION COMMITTEE

17

 

 

 

Section 8.01.

Establishment

17

Section 8.02.

General Principles

17

 

 

 

ARTICLE IX  MISCELLANEOUS

17

 

 

 

Section 9.01.

Mutual Cooperation

17

Section 9.02.

Title to Intellectual Property

17

Section 9.03.

Force Majeure

17

Section 9.04.

Independent Contractors

18

Section 9.05.

Third Party Beneficiaries

18

Section 9.06.

Governing Law

18

Section 9.07.

Dispute Resolution

18

Section 9.08.

Specific Performance

19

Section 9.09.

Interpretation

19

Section 9.10.

Headings

20

Section 9.11.

Amendment

20

Section 9.12.

Assignability

20

Section 9.13.

Audit Assistance

20

Section 9.14.

Survival of Covenants

21

Section 9.15.

Subsidiaries

21

Section 9.16.

Waivers of Default

21

Section 9.17.

Notices

21

Section 9.18.

Counterparts

21

Section 9.19.

Entire Agreement

21

Section 9.20.

Corporate Power

22

Section 9.21.

Signatures and Delivery

22

Section 9.22.

Severability

22

Section 9.23.

Attorney-in-Fact

23

Section 9.24.

Further Assurances

23

Section 9.25.

Public Announcements

23

Section 9.26.

Mutual Drafting

24

 

ii



 

THIS EX-U.S. TRANSITION SERVICES AGREEMENT, dated as of [·], is by and between ABBOTT LABORATORIES, an Illinois corporation (“Abbott”) and ABBVIE INC., a Delaware corporation (“AbbVie”), and each of their respective Subsidiaries (as defined herein) who execute a Joinder Agreement (as defined herein) in accordance with the terms and provisions of this Agreement (as defined herein).

 

R E C I T A L S:

 

WHEREAS, the board of directors of Abbott has determined that it is appropriate and advisable to separate Abbott’s 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 [·], 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 (as defined in the Separation and Distribution Agreement) from Abbott, the distribution by Abbott of AbbVie common stock to Abbott shareholders, and the execution and delivery of this Agreement and certain other agreements in order to facilitate and provide for the foregoing, in each case subject to the terms and conditions set forth therein; and

 

WHEREAS, in order to ensure an orderly transition under the Separation and Distribution Agreement, it shall be necessary for each Provider (as defined herein) to provide to the applicable Recipient (as defined herein) the Services (as defined herein) for a transitional period.

 

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

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.                          Definitions. Reference is made to Section 9.09 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 Preamble.

 

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

 

AbbVie” has the meaning set forth in the Preamble.

 



 

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

 

Additional Service” has the meaning set forth in Section 2.02(c).

 

Agreement” means this Ex-U.S. Transition Services Agreement, each of the Schedules and Exhibits hereto and each Joinder Agreement executed in accordance with Section 2.09.

 

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

 

Charges” has the meaning set forth in Section 2.04.

 

Commencement Date” means, with respect to a given Recipient and the applicable Provider, the date set forth under the heading “Commencement Date” on Schedule 1 to the applicable Joinder Agreement executed by such Recipient and the applicable Provider.

 

Dispute” has the meaning set forth in Section 9.07(a).

 

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

 

Excluded Service” has the meaning set forth in Section 2.02(b).

 

Force Majeure” has the meaning set forth in the Separation and Distribution Agreement.

 

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

 

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

 

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

 

Initial Services” has the meaning set forth in Section 2.01.

 

Interest Payment” has the meaning set forth in Section 4.02.

 

Joinder Agreement” has the meaning set forth in Section 2.09.

 

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

 

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

 

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Notice” means any written notice, request, demand or other communication specifically referencing this Agreement and given in accordance with Section 9.17.

 

Omitted Service” has the meaning set forth in Section 2.02(a).

 

Parties” means the parties to this Agreement, including all Abbott Subsidiaries and AbbVie Subsidiaries who execute a Joinder Agreement pursuant to Section 2.09.

 

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

 

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.

 

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

 

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

 

Provider” means, with respect to any Service, the entity or entities who have executed a Joinder Agreement and is or are identified therein as the “Provider,” or Abbott or AbbVie, as the case may be, if they are identified as the “Provider” in any Joinder Agreement.

 

Provider Indemnitees” has the meaning set forth in Section 7.03.

 

Recipient” means, with respect to any Service, the entity or entities who have executed a Joinder Agreement and is or are identified therein as the “Recipient,” or Abbott or AbbVie, as the case may be, if they are identified as the “Recipient” in any Joinder Agreement.

 

Reinstated Service” has the meaning set forth in Section 2.02(b).

 

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

 

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

 

Service Baseline Period” has the meaning set forth in Section 2.03(c).

 

Service Extension” has the meaning set forth in Section 5.04(a).

 

Service Period” means, with respect to any Service provided to a given Recipient, the period commencing on the later of (a) the Commencement Date for such Service and (b) the date on which any Omitted Service, Excluded Service or Additional Service becomes a “Service” pursuant to the terms of this Agreement, and ending on the earlier of (i) the date the

 

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Recipient terminates the provision of such Service pursuant to Section 5.02 and (ii) the second anniversary of the Effective Time, unless extended pursuant to Section 5.04.

 

Services” means, with respect to a given Recipient, the Initial Services and the applicable Omitted Services, Reinstated Services and Additional Services for such Recipient.

 

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

 

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

 

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

 

Third Party” has the meaning set forth in the Separation and Distribution Agreement.

 

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

 

ARTICLE II

 

SERVICES

 

Section 2.01.                          Initial Services. Effective as of the commencement of the Service Period, the applicable Provider shall provide, or Abbott or AbbVie, as applicable, shall cause one or more of its other Subsidiaries to provide, to the applicable Recipient, the services (the “Initial Services”) indicated with an “X” on Schedule 1 of the applicable Joinder Agreement for such Recipient and as described in greater detail on the subsections of Exhibit A hereto.

 

Section 2.02.                          Omitted Services; Excluded Services; Additional Services.

 

(a)                                 If, following the Effective Time and during the term of this Agreement, a Party identifies a service that, prior to the Effective Time, another Party or any of its Subsidiaries provided to the identifying Party, but such service was inadvertently omitted from the Services set forth on Schedule 1 of the applicable Joinder Agreement (each such service, an “Omitted Service”), then such other Party shall use commercially reasonable efforts to provide, or to cause one of its Subsidiaries to provide, any such Omitted Service to the identifying Party; provided that such other Party shall not be obligated to provide any Omitted Service if it does not, in its reasonable judgment, have adequate resources to provide such Omitted Service or if the provision of such Omitted Service would significantly disrupt the operation of its businesses.  Abbott and AbbVie shall cooperate and act in good faith to create a supplemental subsection of Exhibit A hereto for each Omitted Service in the form attached hereto as Exhibit B.  The applicable Provider and Recipient shall (i) amend Schedule 1 of the applicable Joinder Agreement to include such Omitted Service and (ii) promptly deliver a copy of such amendment to the Transition Committee.  Each such supplemental subsection of Exhibit A hereto and each such amended Schedule 1 to such Joinder Agreement shall be deemed part of this Agreement as of the date of such agreement and the Omitted Services set forth therein shall be deemed

 

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“Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

(b)                                 If, following the Effective Time and during the term of this Agreement, a Party identifies a service that, prior to the Effective Time, another Party or any of its Subsidiaries provided to the identifying Party, but Abbott and AbbVie had mutually agreed that such service would not be provided under the terms of this Agreement (each such service, an “Excluded Service”), then the Transition Committee shall consider whether such other Party shall provide such Excluded Service to the identifying Party under the terms of this Agreement.  If the Transition Committee determines that such other Party shall provide such Excluded Service to the identifying Party (each such Excluded Service, a “Reinstated Service”), then the Transition Committee will act in good faith to create a supplemental subsection of Exhibit A hereto for each Reinstated Service in the form attached hereto as Exhibit B.  The applicable Provider and Recipient shall (i) amend Schedule 1 of the applicable Joinder Agreement to include such Reinstated Service and (ii) promptly deliver a copy of such amendment to the Transition Committee.  Each such supplemental subsection of Exhibit A hereto and each such amended Schedule 1 to such Joinder Agreement shall be deemed part of this Agreement as of the date of such agreement and the Reinstated Services set forth therein shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

(c)                                  If, following the Effective Time and during the term of this Agreement, a Party identifies a service, other than an Omitted Service or an Excluded Service, that it desires for another Party or any of its Subsidiaries to provide to the identifying Party (each such service, an “Additional Service”), then such other Party shall consider such request, in conjunction with the Transition Committee; provided that nothing shall require such other Party to provide such Additional Service to the identifying Party.  If such other Party consents to providing an Additional Service to the identifying Party, then Abbott and AbbVie shall cooperate and act in good faith to create a supplemental subsection of Exhibit A hereto for each Additional Service in the form attached hereto as Exhibit B. The applicable Provider and Recipient shall (i) amend Schedule 1 of the applicable Joinder Agreement to include such Additional Service and (ii) promptly deliver a copy of such amendment to the Transition Committee.  Each such supplemental subsection of Exhibit A hereto and each such amended Schedule 1 to such Joinder Agreement shall be deemed part of this Agreement as of the date of such agreement and the Additional Services set forth therein shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

Section 2.03.                          Performance of Services.

 

(a)                                 Each Provider shall perform and cause its Subsidiaries to perform all Services to be provided by such Provider in a manner that is based on its past practice and that is substantially similar in nature, quality and timeliness to the analogous services provided by Abbott to the Abbott Subsidiaries prior to the Commencement Date.  Each Provider shall, and shall cause its Subsidiaries to, perform its duties and responsibilities hereunder in good faith.

 

(b)                                 Nothing in this Agreement shall require a Provider to perform or cause to be performed any Service to the extent the manner of such performance would constitute a

 

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violation of applicable Laws, the Abbott Code of Business Conduct or any existing contract or agreement with a Third Party.  If the Provider is or becomes aware of any such restriction on the Provider, the Provider shall use commercially reasonable efforts to promptly send a Notice to the Recipient of any such restriction.  The Parties agree to cooperate and use commercially reasonable efforts to obtain any necessary Third Party consents required under any existing contract or agreement with a Third Party to allow the Provider to perform or cause to be performed any Service in accordance with the standards set forth in this Section 2.03.  Any costs and expenses incurred by any Party or any of its Subsidiaries in connection with obtaining any such Third Party consent that is required to allow the Provider to perform or cause to be performed (i) any Service (other than an Additional Service) shall be split between the Provider and the Recipient in accordance with such Parties’ respective utilization of the applicable Service at such time (except with respect to fees imposed by Third Parties to allow joint participation by the Provider and the Recipient under information technology contracts and licenses, which fees shall be split equally between the Provider and the Recipient) and (ii) any Additional Service shall be solely the responsibility of the Recipient.  If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Third Party consent or the performance of such Service by the Provider would continue to constitute a violation of applicable Laws or the Abbott Code of Business Conduct, the Provider shall use commercially reasonable efforts in good faith to provide such Services 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)                                  No Provider shall be obligated to perform or to cause to be performed any Service in a volume or quantity in any calendar year that exceeds the highest volumes or quantities of analogous services provided to the applicable Recipient during calendar year 2012, as set forth in the 2012 plan (without reference to the transactions contemplated by the Separation and Distribution Agreement) (the “Service Baseline Period”).  If a Recipient requests that the Provider perform or cause to be performed any Service in a volume or quantity that exceeds the highest volumes or quantities of analogous services that were provided to such Recipient during the Service Baseline Period, then: (i) if such higher volume or quantity results from fluctuations occurring in the ordinary course of business of such Recipient, the applicable Provider shall use commercially reasonable efforts to provide such requested higher volume or quantity; and (ii) if such higher volume or quantity results from any other source, including an acquisition, merger, purchase or other business combination by such Recipient, the Transition Committee shall determine whether the applicable Provider will be required to provide such requested higher volume or quantity.  If the Transition Committee determines that the Provider shall provide the requested higher volume or quantity then such higher volume or quantity shall be documented in a written agreement signed by the applicable Recipient and Provider who shall promptly provide a copy of such written agreement to the Transition Committee.  The volume or quantity increases set forth in such written agreement shall be deemed a part of the “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

(d)                                 (i) Neither the Provider nor any of its Subsidiaries shall be required to perform or to cause to be performed any of the Services for the benefit of any Third Party or any other Person other than the applicable Recipient, and (ii) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 2.03, EACH PARTY ACKNOWLEDGES AND AGREES

 

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THAT ALL SERVICES AND PRODUCTS ARE PROVIDED ON AN “AS IS” BASIS, THAT EACH RECIPIENT ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES, AND THAT EACH PROVIDER MAKES NO REPRESENTATIONS OR 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.

 

(e)                                  Each Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement.  No Party shall knowingly take any action in violation of any such applicable Law that results in Liability being imposed on any other Party.

 

Section 2.04.                          Charges for Services. Each Recipient of Services shall pay to the Provider of such Services a monthly fee for the Services (or category of Services, as applicable) (each fee constituting a “Charge” and, collectively, “Charges”), which Charges shall be agreed to by the Parties from time to time.  During the term of this Agreement, the amount of a Charge for any Services may adjust to the extent of:  (a) any adjustments mutually agreed to by the Parties; (b) any Charges applicable to any Omitted Services, Reinstated Services or Additional Services; and (c) in accordance with Section 2.08, any proportional adjustment in the rates or charges imposed by any Third Party provider that is providing Services.  Together with any monthly invoice for Charges, the Provider shall provide the Recipient with reasonable documentation, including any additional documentation reasonably requested by the Recipient to the extent such documentation is in the Provider’s or its Subsidiaries’ possession or control, to support the calculation of such Charges.

 

Section 2.05.                          Reimbursement for Out-of-Pocket Expenses. The Recipient shall reimburse the Provider for reasonable out-of-pocket costs and expenses incurred by the Provider or any of its Subsidiaries in connection with providing the Services (including reasonable travel-related expenses) to the extent that such costs and expenses are not reflected in the Charges for such Services; provided, however, that any such cost or expense not consistent with historical practice between the Parties for any Service (including business travel and related expenses) shall require advance approval of the Recipient.  Any authorized travel-related expenses incurred in performing the Services shall be incurred and charged to the Recipient in accordance with the Provider’s then applicable business travel policies.

 

Section 2.06.                          Changes to Services. Except as provided in Section 2.08 and subject to the performance standards set forth in this Article II, each Provider may make changes from time to time in the manner of performing the Services as required under Section 2.03(a) if such Provider is making similar changes in performing analogous services for itself and if such Provider furnishes to the applicable Recipient reasonable prior Notice (in content and timing) respecting such changes; provided, however, that no Provider may modify any of its accounting policies that would directly or indirectly impact the Services without the prior written consent of the applicable Recipient (such consent not to be unreasonably withheld or delayed).  No such change shall affect the timeliness or quality of, or the Charges for, the applicable Service.  If any such change by the Provider reasonably requires the Recipient to incur incremental costs and

 

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expenses in order to continue to receive and utilize the applicable Services in the same manner as the Recipient was receiving and utilizing such Service prior to such change, the Provider shall be required to reimburse the Recipient for all such reasonable costs and expenses.  Upon request, the Recipient shall provide the Provider with reasonable documentation, including any additional documentation reasonably requested by the Provider to the extent such documentation is in the Recipient’s or its Subsidiaries’ possession or control, to support the calculation of such incremental costs and expenses.

 

Section 2.07.                          Transitional Nature of Services. The Parties acknowledge the transitional nature of the Services and agree to cooperate in good faith and to use commercially reasonable efforts to effectuate a smooth transition of the Services from the Provider to the Recipient (or its designee).

 

Section 2.08.                          Use of Third Parties to Provide Services. Each Provider may perform its obligations to provide a Service through agents, subcontractors or independent contractors, provided that the delegation of performance of the applicable Service does not impact the timeliness or quality of such Service, in accordance with the following:

 

(a)                                 Provider is Currently Using Third Parties as of the Effective Time.  If, as of the Effective Time, (i) a Provider is obtaining analogous services for itself from agents, subcontractors or independent contractors, or (ii) a Provider is obtaining services from agents, subcontractors or independent contractors which services the Provider shall only provide to the Recipient under this Agreement and the Provider shall not otherwise require such analogous services for itself during the term of this Agreement, then the Charges for the applicable Services such Provider is obtaining from such Third Parties may be adjusted proportionally by such Provider pursuant to Section 2.04(c) to reflect any adjustment in the rates or charges imposed by the Third Party that is providing such Services; or

 

(b)                                 Provider Elects to Switch to Third Parties After the Effective Time.

 

(i)                                     If, following the Effective Time, a Provider elects to obtain analogous services for itself from agents, subcontractors or independent contractors (A) such Provider shall furnish to the applicable Recipient reasonable prior Notice (in content and timing) respecting such use of Third Parties, and (B) the Charges for the applicable Services such Provider is obtaining from such Third Parties may be adjusted proportionally by such Provider pursuant to Section 2.04(c) to reflect any adjustment in the rates or charges imposed by the Third Party that is providing such Services; and

 

(ii)                                  If, however, following the Effective Time, the Provider is not obtaining analogous services for itself from agents, subcontractors or independent contractors (A) such Provider shall furnish to the applicable Recipient reasonable prior Notice (in content and timing) respecting such use of Third Parties, and (B) the Charges for the applicable Services such Provider is providing through such Third Parties appointed following the Effective Time may not be adjusted by such Provider as a result of any adjustments in the rates or charges imposed by such Third Parties.

 

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Notwithstanding the foregoing, the Provider shall not be relieved of its obligations under this Agreement by use of such agents, subcontractors or independent contractors.

 

Section 2.09.                          Joinder Agreement. Each of Abbott and AbbVie shall cause their respective Subsidiaries who are to provide or receive Services to become a party to this Agreement and adopt this Agreement with the same force and effect as if it were originally a party hereto by executing a Joinder Agreement substantially in the form attached as Exhibit C hereto (each, a “Joinder Agreement”).  Each such Joinder Agreement pursuant to this Section 2.09 shall be deemed part of this Agreement as of the date of such Joinder Agreement.

 

ARTICLE III

 

OTHER ARRANGEMENTS

 

Section 3.01.                          Access.

 

(a)                                 AbbVie shall, and shall cause its Subsidiaries to, allow Abbott and its Subsidiaries and their respective Representatives reasonable access to the facilities of AbbVie and its Subsidiaries that is necessary for Abbott and its Subsidiaries to fulfill their obligations under this Agreement.  In addition to the foregoing right of access, AbbVie shall, and shall cause its Subsidiaries to, afford Abbott, its Subsidiaries and their respective Representatives, upon reasonable advance notice, reasonable access during normal business hours to the facilities, Information, systems, infrastructure and personnel of AbbVie and its Subsidiaries as reasonably necessary for Abbott to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the Services being provided by AbbVie or its Subsidiaries, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably interfere with any of the business or operations of AbbVie or any of its Subsidiaries and (ii) in the event that AbbVie determines that providing such access could be commercially detrimental, violate any Law or agreement, or waive any attorney-client privilege, then Abbott and AbbVie shall use commercially reasonable efforts to permit such access in a manner that avoids any such harm or consequence.  Abbott agrees that all of its and its Subsidiaries’ employees shall, and that it shall use commercially reasonable efforts to cause its Representatives’ employees to, when on the property of AbbVie and its Subsidiaries, or when given access to any facilities, Information, systems, infrastructure or personnel of AbbVie and its Subsidiaries, conform to the policies and procedures of AbbVie and any of its Subsidiaries, as applicable, concerning health, safety, conduct and security which are made known to Abbott from time to time.

 

(b)                                 Abbott shall, and shall cause its Subsidiaries to, allow AbbVie and its Subsidiaries and their respective Representatives reasonable access to the facilities of Abbott and its Subsidiaries that is necessary for AbbVie and its Subsidiaries to fulfill their obligations under this Agreement.  In addition to the foregoing right of access, Abbott shall, and shall cause its Subsidiaries to, afford AbbVie, its Subsidiaries and their respective Representatives, upon reasonable advance notice, reasonable access during normal business hours to the facilities, Information, systems, infrastructure, and personnel of Abbott and its Subsidiaries as reasonably necessary for AbbVie to verify the adequacy of internal controls over information technology,

 

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reporting of financial data and related processes employed in connection with the Services being provided by Abbott or its Subsidiaries, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably interfere with any of the business or operations of Abbott or any of its Subsidiaries and (ii) in the event that Abbott determines that providing such access could be commercially detrimental, violate any Law or agreement, or waive any attorney-client privilege, then Abbott and AbbVie shall use commercially reasonable efforts to permit such access in a manner that avoids any such harm or consequence.  AbbVie agrees that all of its and its Subsidiaries’ employees shall, and that it shall use commercially reasonable efforts to cause its Representatives’ employees to, when on the property of Abbott and its Subsidiaries, or when given access to any facilities, Information, systems, infrastructure or personnel of Abbott and its Subsidiaries, conform to the policies and procedures of Abbott and any of its Subsidiaries, as applicable, concerning health, safety, conduct and security which are made known to AbbVie from time to time.

 

ARTICLE IV

 

BILLING; TAXES

 

Section 4.01.                          Procedure. Charges for the Services shall be charged to and payable by the Recipient.  Amounts payable pursuant to the terms of this Agreement shall be paid by wire transfer (or such other method of payment as may be agreed between the Recipient and the Provider) to the Provider, as directed by the Provider, on a monthly basis, which amounts shall be due within sixty (60) days after the date of invoice.  All amounts due and payable hereunder shall be invoiced and paid in the local currency of the Provider.

 

Section 4.02.                          Late Payments. Charges 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 2%, or the maximum legal rate, whichever is lower (the “Interest Payment”).

 

Section 4.03.                          Taxes. Without limiting any provisions of this Agreement, the Recipient shall bear any and all Taxes and other similar charges (and any related interest and penalties) imposed on, or payable with respect to, any fees or charges, including any Charges, payable by it pursuant to this Agreement, including all sales, use, value-added, and similar Taxes, but excluding Taxes based on such Provider’s net income.  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 the 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 another Party or any of its Subsidiaries arising out of this Agreement.

 

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ARTICLE V

 

TERM AND TERMINATION

 

Section 5.01.                          Term. With respect to each Recipient and the applicable Provider of the applicable Services, this Agreement shall commence on the commencement of the applicable Service Period and shall terminate upon the earlier to occur of:  (a) the last date on which such Provider is obligated to provide any Service to such Recipient in accordance with the terms of this Agreement; or (b) the mutual written agreement of Abbott and AbbVie to terminate this Agreement in its entirety.  Unless otherwise terminated pursuant to Section 5.02, this Agreement shall terminate with respect to any Service for a given Recipient at the close of business on the last day of the Service Period for such Service for such Recipient.

 

Section 5.02.                          Early Termination. Without prejudice to a Recipient’s rights with respect to a Force Majeure, a Recipient may from time to time terminate this Agreement with respect to the entirety of any individual Service but not a portion thereof:

 

(a)                                 for any reason or no reason, upon the giving of an advance Notice to the Provider of such Service not less than the shorter of (i) one hundred eighty (180) days, or (ii) one-half the original Service Period for such Service; provided, however, that any such termination may only be effective as of the last day of a month; or

 

(b)                                 if the Provider of such Service has failed to perform any of its material obligations under this Agreement with respect to such Service, and such failure shall continue to exist forty five (45) days after receipt by the Provider of Notice of such failure from the Recipient; provided, however, that any such termination may only be effective as of the last day of a month; and provided, further, that the Recipient shall not be entitled to terminate the Agreement with respect to the applicable Service if, as of the end of such forty five (45)-day period, there remains a good faith Dispute between such Provider and Recipient (undertaken in accordance with the terms of Section 9.07) as to whether the Provider has cured the applicable breach.

 

A Provider may terminate this Agreement with respect to any individual Service, but not a portion thereof, at any time upon prior Notice to the Recipient if the Recipient has failed to perform any of its material obligations under this Agreement relating to such Services, including making payment of Charges for such Service when due, and such failure shall continue uncured for a period of forty five (45) days after receipt by the Recipient of a Notice of such failure from the Provider; provided, however, that any such termination may only be effective as of the last day of a month; and provided, further, that the Provider shall not be entitled to terminate this Agreement with respect to the applicable Service if, as of the end of such forty five (45)-day period, there remains a good faith Dispute between such Provider and Recipient (undertaken in accordance with the terms of Section 9.07) as to whether the Recipient has cured the applicable breach.  If a Provider has terminated a Service in accordance with the previous sentence, the Provider shall, without the consent of the Recipient, amend Schedule 1 of the applicable Joinder Agreement to reflect any terminated Service by removing the “X” with respect to such terminated Service for such Recipient and shall promptly deliver a copy of such amendment to the Transition Committee.  The Parties acknowledge and agree that (A) there may

 

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be interdependencies among the Services being provided under this Agreement, (B) upon the request of a Party, the Transition Committee shall determine whether (1) any such interdependencies exist with respect to the particular Service that such Party is seeking to terminate in accordance with this Section 5.02 and (2) the Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by the termination of another Service in accordance with Section 5.02 prior to the expiration of the period of the maximum duration for such Service, and (C) in the event that the Transition Committee has determined that such interdependencies exist and that the Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by the termination of another Service in accordance with Section 5.02 prior to the expiration of the period of the maximum duration for such Service, the applicable Provider and Recipient shall negotiate in good faith to amend Schedule 1 of the applicable Joinder Agreement relating to the termination dates of such impacted Services and shall promptly deliver a copy of such amendment to the Transition Committee. Each such amended Joinder Agreement pursuant to this Section 5.02 shall be deemed part of this Agreement as of the date of such amendment.

 

Section 5.03.                          Reduction of Services. A Recipient may from time to time request a reduction in part of the scope or amount of any Service; provided that any such reduction may only take effect as of the end of a month.  If requested to do so by a Recipient, the Transition Committee shall discuss in good faith appropriate adjustments to the relevant Charges in light of all relevant factors.  If, after such discussions, the Transition Committee does not approve any requested reduction of the scope or amount of any Service and the relevant Charges in connection therewith, then (a) there shall be no change to the Charges under this Agreement and (b) unless the applicable Recipient and Provider otherwise agree in writing, there shall be no change to the scope or amount of any Services under this Agreement.  If, after such discussions, the Transition Committee approves any reduction of Service, such reduction of Service shall be documented in a written agreement executed on behalf of the applicable Recipient and Provider and a copy of such written agreement shall promptly be provided to the Transition Committee.  Additionally, in connection with any such reduction of Service, the Transition Committee may approve an appropriate reduction to the Charges related to the applicable reduced Service.

 

Section 5.04.                          Extension of Services.

 

(a)                                 The Recipient may request to extend the Service Period of any Service (each such extension, a “Service Extension”) one time for each Service unless the Transition Committee shall authorize additional extensions, by providing the Provider of such Service with advance Notice not less than the shorter of (i) one hundred eighty (180) days, or (ii) one-half of the original Service Period for such Service.

 

(b)                                 If the Recipient is requesting a Service Extension for a particular Service for the first time and the requested Service Extension is for a period of twelve (12) months or less past the originally scheduled expiration of the Service Period for the applicable Service, then the Provider shall be obligated to provide such requested Service Extension and the applicable Recipient and Provider shall in good faith (i) negotiate the terms of an amendment to the applicable Joinder Agreement and promptly provide a copy thereof to the Transition Committee, which amendment shall be consistent with the terms of the applicable Service, and (ii) determine

 

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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 borne solely by the Recipient.  If (A) the requested Service Extension is for a period of longer than twelve (12) months past the originally scheduled expiration of the Service Period for the applicable Service or (B) the applicable Recipient has previously requested a Service Extension for the particular Service that the Recipient is currently requesting a Service Extension, then the Transition Committee shall determine whether the Provider shall provide the applicable Service for the requested Service Extension period.  If the Transition Committee determines that the Provider shall provide such Service during the requested Service Extension period, then the applicable Recipient and Provider shall in good faith (1) negotiate the terms of an amendment to Schedule 1 of the applicable Joinder Agreement and promptly provide a copy thereof to the Transition Committee, which amendment shall be consistent with the terms of the applicable Service, and (2) 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 borne solely by the Recipient.  The Parties acknowledge and agree that (w) there may be interdependencies among the Services being provided under this Agreement, (x) the Provider’s ability to extend the provision of a particular Service in accordance with this Agreement may be dependent on the extension of another Service, (y) upon the request of a Party, the Transition Committee 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 5.04 and (z) to the extent the Transition Committee has determined that such interdependencies exist, the applicable Provider and Recipient shall negotiate in good faith to amend Schedule 1 of the applicable Joinder Agreement relating to the termination dates of such impacted Services and shall promptly deliver a copy of such amendment to the Transition Committee.  Each such amended Joinder Agreement pursuant to this Section 5.04 shall be deemed part of this Agreement as of the date of such amendment.

 

Section 5.05.                          Effect of Termination. Upon the termination of any Service for any Recipient pursuant to this Agreement, the Provider of the terminated Service shall have no further obligation to provide the terminated Service to such Recipient, and such Recipient shall have no obligation to pay any future Charges relating to any such Service; provided, however, that the Recipient shall remain obligated to the relevant Provider for the Charges owed and payable in respect of Services provided prior to the effective date of termination for such Service.  In connection with the termination of any Service, the provisions of this Agreement not relating solely to such terminated Service shall survive any such termination, and in connection with a termination of this Agreement, Article I, this Article V, Article VII and Article IX, all confidentiality obligations under this Agreement and Liability for all due and unpaid Charges, shall continue to survive indefinitely.

 

Section 5.06.                          Information Transmission. The Provider, on behalf of itself and its respective Subsidiaries, shall use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the Recipient, in accordance with Section 6.01(a) of the Separation and Distribution Agreement, any Information received or computed by the Provider for the benefit of such Recipient concerning the relevant Service during the Service Period; provided, however, that, except as otherwise provided for under the terms of the

 

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Information Technology Agreement (a) the Provider shall not have any obligation to provide or cause to provide Information in any non-standard format, (b) the Provider and its Subsidiaries shall be reimbursed for their reasonable costs in accordance with Section 6.01(c) of the Separation and Distribution Agreement for creating, gathering, copying, transporting and otherwise providing such Information, and (c) the Provider shall use commercially reasonable efforts to maintain any such Information in accordance with Section 6.03 of the Separation and Distribution Agreement.

 

ARTICLE VI

 

CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

 

Section 6.01.                          Abbott and AbbVie Obligations. Subject to Section 6.04, 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 Representatives to hold, in strict confidence, with at least the same degree of care that applies to Abbott’s confidential and proprietary Information pursuant to policies in effect as of the 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 such other Party or such 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 other than for such purposes as may be expressly permitted hereunder, except, in each case, to the extent that such confidential and proprietary Information 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 (c) independently developed or generated without reference to or use of the respective proprietary or confidential Information of such other Party or any of its Subsidiaries.  If any confidential and proprietary Information of Abbott or any of its Subsidiaries is disclosed to AbbVie or any of its Subsidiaries in connection with providing the Services, then such disclosed confidential and proprietary Information shall be used only as required to perform the Services.  If any confidential and proprietary Information of AbbVie or any of its Subsidiaries is disclosed to Abbott or any of its Subsidiaries in connection with providing the Services, then such disclosed confidential and proprietary Information shall be used only as required to perform such Services.

 

Section 6.02.                          No Release. Each Party agrees (a) not to release or disclose, or permit to be released or disclosed, any Information addressed in Section 6.01 to any other Person, except its Representatives who need to know such Information in their capacities as such, and except in compliance with Section 6.04, and (b) to use commercially reasonable efforts to maintain any such Information in accordance with Section 6.03 of the Separation and Distribution Agreement.

 

Section 6.03.                          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

 

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personal 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 another Party or another Party’s Subsidiaries, on the other hand, prior to the Effective Time; or (b) that, as between the Parties, was originally collected by another Party or another 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 such other Party or such 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 any 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 of another Party that is subject to the confidentiality provisions hereof, or to disclose or provide any Personal Data that it processes on behalf of another Party in accordance with the data protection agreement to be entered into between Abbott and AbbVie as of the Effective Time, such Party shall, unless prohibited by such request or requirement of the applicable Governmental Authority or under applicable Law, provide such 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

 

LIMITED LIABILITY AND INDEMNIFICATION

 

Section 7.01.                          Limitations on Liability.

 

(a)                                 SUBJECT TO SECTION 7.02, THE LIABILITIES OF EACH PROVIDER AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS 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 THE PROVIDER’S PROFITS FOR

 

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PERFORMING SERVICES HEREUNDER, WHICH SHALL BE DEEMED TO BE EQUAL TO THE AMOUNT OF THE MARK-UP RECEIVED BY THE PROVIDER DURING THE PREVIOUS TWELVE (12) MONTH PERIOD.

 

(b)                                 IN NO EVENT SHALL ANY PARTY, ITS SUBSIDIARIES OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO ANY 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, ITS SUBSIDIARIES AND ITS REPRESENTATIVES 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 7.01 shall not apply to any Party’s Liability for breaches of confidentiality under Article VI or any Party’s obligations under Section 7.03.

 

(d)                                 The limitations in Section 7.01(a) and Section 7.01(b) shall not apply 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 7.02.                          Obligation to Re-Perform; Liabilities. In the event of any breach of this Agreement by any Provider with respect to the provision of any Services (with respect to which the Provider can reasonably be expected to re-perform in a commercially reasonable manner), the Provider shall (a) promptly correct in all material respects such error, defect or breach or re-perform in all material respects such Services at the request of the Recipient and at the sole cost and expense of the Provider and (b) subject to the limitations set forth in Section 7.01, reimburse the Recipient and its Subsidiaries and Representatives for Liabilities attributable to such breach by the Provider.  The remedy set forth in this Section 7.02 shall be the sole and exclusive remedy of the Recipient for any such breach of this Agreement.  Any request for re-performance in accordance with this Section 7.02 by the Recipient must be in writing and specify in reasonable detail the particular error, defect or breach, and such request must be made no more than one (1) month from the later of the date on which such breach occurred and the date on which such breach was reasonably discovered by the Recipient.

 

Section 7.03.                          Third Party Claims. Each Recipient shall indemnify, defend and hold harmless the applicable Provider, its Subsidiaries and each of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the “Provider Indemnitees”), from and against any and all claims of Third Parties relating to, arising out of or resulting from the Provider’s furnishing or failing to furnish the Services provided for in this Agreement, other than (a) Third Party claims arising out of the gross negligence, willful misconduct or fraud of any Provider Indemnitee and (b) as set forth in Section 2.03(b).

 

Section 7.04.                          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 7.04, in the event of any conflict between

 

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the provisions of Article IV of the Separation and Distribution Agreement and this Article VII, the provisions of this Agreement shall control.

 

ARTICLE VIII

 

TRANSITION COMMITTEE

 

Section 8.01.                          Establishment. Pursuant to the Separation and Distribution Agreement, Abbott and AbbVie shall establish the Transition Committee.  The Transition Committee shall have the authority to establish one or more subcommittees from time to time as it deems appropriate to monitor and manage matters arising out of or resulting from this Agreement.

 

Section 8.02.                          General Principles. In furtherance of the foregoing and notwithstanding any provision in this Agreement to the contrary, each Party acknowledges and agrees that the Transition Committee shall have the right to review and amend any prior actions taken, decisions made or amendments or modifications agreed to, by the Parties, and to proscribe that the Parties take such actions or make such amendments or modifications as the Transition Committee deems appropriate in order to effect the intent and purpose of this Agreement and the transactions contemplated hereby.  Each Party shall take, or cause to be taken, any and all reasonable actions that the Transition Committee may reasonably request to carry out the intent and purpose of this Article VIII.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.01.                          Mutual Cooperation. The Parties and their respective Subsidiaries shall cooperate with each other in connection with the performance of the Services hereunder; 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 9.01 shall not require any 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 Abbott and AbbVie.

 

Section 9.02.                          Title to Intellectual Property. Except as expressly provided for under the terms of this Agreement, each Recipient 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 any Provider, by reason of the provision of the Services provided hereunder.  No Recipient shall remove or alter any copyright, trademark, confidentiality or other proprietary notices that appear on any intellectual property owned or licensed by any Provider, and each Recipient shall reproduce any such notices on any and all copies thereof.  No Recipient shall attempt to decompile, translate, reverse engineer or make excessive copies of any intellectual property owned or licensed by any Provider, and each Recipient shall promptly notify such Provider of any such attempt, regardless of whether by the Recipient or any Third Party, of which the Recipient becomes aware.

 

Section 9.03.                          Force Majeure. No 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

 

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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 unless this Agreement has previously been terminated under Article V or under this Section 9.03.  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 applicable Recipient or Provider 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 unless this Agreement has previously been terminated under Article V or under this Section 9.03.  During the period of a Force Majeure, the Recipient shall be (i) relieved of the obligation to pay Charges for such Services(s) throughout the duration of such Force Majeure and (ii) entitled to permanently terminate such Service(s) (and shall be relieved of the obligation to pay Charges for such Services(s) throughout the duration of such Force Majeure) if a Force Majeure shall continue to exist for more than thirty (30) consecutive days, it being understood that the Recipient shall not be required to provide any advance notice of such termination to the Provider.

 

Section 9.04.                          Independent Contractors. The Parties each acknowledge that they are separate entities, each of which has entered into this Agreement for independent business reasons.  The relationships of the Parties hereunder are those of independent contractors and nothing contained herein shall be deemed to create a joint venture, partnership or any other relationship.  Employees performing services hereunder do so on behalf of, under the direction of, and as employees of, the applicable Provider, and the applicable Recipient shall have no right, power or authority to direct such employees.

 

Section 9.05.                          Third Party Beneficiaries. Except as provided in Article VII with respect to Provider Indemnitees, (a) the provisions of this Agreement are solely for the benefit of the Parties, their Subsidiaries and their permitted successors and assigns, and are not intended to confer upon any other Person except the Parties, their Subsidiaries and their permitted successors and assigns, any rights or remedies hereunder; and (b) there are no other Third Party beneficiaries of this Agreement and this Agreement shall not provide any other Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.

 

Section 9.06.                          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 9.07.                          Dispute Resolution.

 

(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 (each, a “Dispute”), the Parties agree that the Transition Committee (or such other Persons as the Transition Committee may designate) shall negotiate in good faith in an attempt to resolve such Dispute

 

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amicably.  If such Dispute has not been resolved by the Transition Committee within fifteen (15) days after the initial Notice of the Dispute (or such longer period as the Parties to such Dispute may agree), then such Dispute shall be resolved in accordance with the dispute resolution process referred to in Section 7.01 to the Separation and Distribution Agreement.

 

(b)                                 In any Dispute regarding the amount of a Charge, if such Dispute is finally resolved pursuant to the dispute resolution process set forth or referred to in Section 9.07(a) and it is determined that the Charge that the Provider has invoiced the Recipient, and that the Recipient has paid to the Provider, is greater or less than the amount that the Charge should have been, then (i) if it is determined that the Recipient has overpaid the Charge, the Provider shall within five (5) business days after such determination reimburse the Recipient an amount of cash equal to such overpayment, plus the Interest Payment, accruing from the date of payment by the Recipient to the time of reimbursement by the Provider; and (ii) if it is determined that the Recipient has underpaid the Charge, the Recipient shall within five (5) business days after such determination reimburse the Provider an amount of cash equal to such underpayment, plus the Interest Payment, accruing from the date such payment originally should have been made by the Recipient to the time of payment by the Recipient.

 

Section 9.08.                          Specific Performance. Subject to Section 9.07, 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.  Unless otherwise agreed in writing, the Parties shall continue to provide Services and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of Section 9.07 and this Section 9.08 with respect to all matters subject to such Dispute; provided, however, that this obligation shall only exist during the term of this Agreement.

 

Section 9.09.                          Interpretation. Words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires.  The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules and Exhibits hereto and thereto) and not to any particular provision of this Agreement.  Section, Exhibit and Schedule references are to the Sections, Exhibits, and Schedules to this Agreement unless otherwise specified.  Unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement.  The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified.  The word “or” shall not be exclusive.  Unless otherwise specified in a particular case, the word “days” refers to calendar days.  References herein to this Agreement or any other agreements contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the Effective Time and as it may be amended thereafter, unless otherwise specified.  References to the performance, discharge or fulfillment of any Liability in accordance

 

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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 9.10.                          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 9.11.                          Amendment. Except with respect to the execution of any Joinder Agreement, or the amendment, supplementation or modification thereof in accordance with the terms and provisions of such Joinder Agreement, 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 each of Abbott and AbbVie.  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 9.12.                          Assignability. 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) the divestiture of all or substantially all of the assets of a Recipient to a Third Party or (ii) a Change of Control of the Recipient, the applicable Recipient may assign to such Third Party its rights and obligations as a Recipient with respect to the Services provided to such Recipient under this Agreement; provided, however, that (x) no such assignment shall release the assigning Party from any Liability under this Agreement, (y) any and all costs and expenses incurred by any Party in connection with such assignment (including in connection with clause (z) of this proviso) shall be borne solely by the Recipient, and (z) Abbott and AbbVie shall in good faith negotiate any amendments to this Agreement, including the Exhibits and Schedules to this Agreement, that may be necessary or appropriate in order to assign such Services.

 

Section 9.13.                          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 Parties 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.

 

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Section 9.14.                          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 Effective Time and shall remain in full force and effect thereafter.

 

Section 9.15.                          Subsidiaries. Abbott shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein and in any Joinder Agreement to be performed by an Abbott Subsidiary and AbbVie shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein and in any Joinder Agreement to be performed by an AbbVie Subsidiary.

 

Section 9.16.                          Waivers of Default. Waiver by any Party of any default by another 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 9.17.                          Notices. All Notices 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, by facsimile or electronic transmission 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 as set forth in the applicable Joinder Agreement (or at such other address for a Party as shall be specified in a Notice):

 

If to Abbott, to:

 

Abbott Laboratories
100 Abbott Park Road
Building AP6D, Dept. 364
Abbott Park, Illinois  60064-6020
Attn: [
·]

 

If to AbbVie, to:

 

AbbVie Inc.
1 North Waukegan Road
North Chicago, Illinois 60064
Attn: [
·]

 

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

 

Section 9.18.                          Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement.

 

Section 9.19.                          Entire Agreement. This Agreement, the Joinder Agreements, 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

 

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and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein.  Notwithstanding any other provisions in this Agreement to the contrary, in the event and to the extent that there is a conflict between the provisions of this Agreement and the provisions of the Separation and Distribution Agreement, the provisions of this Agreement shall control.

 

Section 9.20.                          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 9.21.                          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 9.22.                          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.

 

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Section 9.23.                          Attorney-in-Fact. Each Abbott Subsidiary that executes a Joinder Agreement designates and appoints Abbott as such Party’s agent and attorney-in-fact with full power and authority to act for and on behalf of such Party in the absolute discretion of Abbott, and each AbbVie Subsidiary that executes a Joinder Agreement designates and appoints AbbVie as such Party’s agent and attorney-in-fact with full power and authority to act for and on behalf of such Party in the absolute discretion of AbbVie, in each case with respect to all matters relating to this Agreement, including execution and delivery of any amendment, supplement or modification of this Agreement and any waiver of any claim or right arising out of this Agreement, agreeing on the Charges from time to time and any adjustments thereto, and, in general, to do all things and to perform all acts, including executing and delivering all agreements, certificates, receipts, instructions, and other instruments contemplated by or deemed advisable to effectuate the provisions of this Section 9.23.  In addition, the Parties agree that:

 

(a)                                 This appointment and grant of power and authority is coupled with an interest and is in consideration of the mutual covenants made in this Agreement and is irrevocable and will not be terminated by any act of any Abbott Subsidiary or AbbVie Subsidiary that is a Party or by operation of Law or by the occurrence of any other event.  Each Abbott Subsidiary that is a Party hereby consents to the taking of any and all actions and the making of all decisions required or permitted to be taken or made by Abbott pursuant to this Section 9.23, and each AbbVie Subsidiary that is a Party hereby consents to the taking of any and all actions and the making of all decisions required or permitted to be taken or made by AbbVie pursuant to this Section 9.23.  Each Abbott Subsidiary that is a Party agrees that Abbott shall have no obligation or Liability to any Person for any action taken or omitted by Abbott in good faith, and each AbbVie Subsidiary that is a Party agrees that AbbVie shall have no obligation or Liability to any Person for any action taken or omitted by AbbVie in good faith; and

 

(b)                                 Abbott shall be entitled to rely upon any document or other paper delivered by AbbVie as being authorized by each AbbVie Subsidiary that is a Party, and AbbVie shall be entitled to rely upon any document or other paper delivered by Abbott as being authorized by each Abbott Subsidiary that is a Party.

 

Section 9.24.                          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 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 9.25.                          Public Announcements. From and after the Effective Time, Abbott and AbbVie shall consult with each other before issuing, 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 shall not 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.  No other Provider or Recipient shall issue any press release or other public statement with respect to the transactions contemplated by this Agreement without the prior written consent of Abbott and AbbVie.

 

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Section 9.26.                          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 LABORATORIES

 

ABBVIE INC.

 

 

 

 

 

 

By:

 

 

By:

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

[Signature Page – Ex-U.S. Transition Services Agreement]

 




Exhibit 10.3

 

FORM OF TAX SHARING AGREEMENT

 

Between

 

ABBOTT LABORATORIES

 

on behalf of itself

 

and the ABBOTT AFFILIATES

 

and

 

ABBVIE INC.

 

on behalf of itself

 

and the ABBVIE AFFILIATES

 



 

TAX SHARING AGREEMENT

 

This Tax Sharing Agreement (the “Agreement”) is entered into as of the                    day of                   , 2012, between Abbott Laboratories (“Abbott”), an Illinois corporation, and AbbVie Inc. (“AbbVie”), a Delaware corporation.

 

R E C I T A L S:

 

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

 

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

 

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

 

WHEREAS, certain Tax liabilities will be incurred in connection with the transactions involved in the Separation, Contribution and Distribution, including transactions occurring after the Effective Date;

 

WHEREAS, Abbott and AbbVie desire to allocate the responsibilities for various Taxes described in the fourth WHEREAS clause and to provide for certain additional Tax matters;

 

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

 

ARTICLE I.   DEFINITIONS

 

Section 1.01                            Definitions.  Reference is made to Section 5.01 of this Agreement and Section 9.15 of the Distribution Agreement regarding the interpretation of certain words

 

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and phrases used in this Agreement. Capitalized terms used in this Agreement and not defined in this Section 1.01 shall have the meanings assigned to them in the Distribution Agreement. In addition, for the purpose of this Agreement, the following terms shall have the meanings set forth below.

 

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

 

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

 

“Abbott Park Lease” means the lease agreement regarding Abbott Park entered into by and between Abbott and AbbVie in connection with the Separation as the same may be amended.

 

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

 

“AbbVie Group” means AbbVie and all Affiliates of AbbVie other than members of the Abbott Group.

 

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

 

“Accounts Payable U.S. Services BSP Transition Services Lead Sheet” means the Accounts Payable U.S. Services BSP Transition Services Lead Sheet attached to the U.S. Transition Services Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“EMA” means the Employee Matters Agreement, as set forth in the Distribution Agreement.

 

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

 

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

 

“Foreign Tax Credit Reporting Position” has the meaning ascribed to such term in Section 4.02(g)(ii).

 

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

 

“ICO Agreement” means any International Commercial Operations Agreement, as set forth in the Distribution Agreement.

 

“Income Reporting Position has the meaning ascribed to such term in Section 4.02(g)(ii).

 

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

 

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

 

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

 

“IRS” means the United States Internal Revenue Service.

 

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“Other Tax Ruling” means each ruling (other than the Private Letter Ruling) issued by a Tax Authority pursuant to a ruling request filed on behalf of Abbott and/or an Abbott Affiliate prior to the Effective Date with respect to a transaction or transactions undertaken in connection with the Separation, Contribution and Distribution, together with all supplemental filings and exhibits thereto.

 

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

 

“Parties” means the parties to this Agreement.

 

“Payment Reporting Position” has the meaning ascribed to such term in Section 4.02(g)(ii).

 

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

 

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

 

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

 

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

 

“Private Letter Ruling” means the private letter ruling issued by the IRS on [                      , 2012], in connection with the Separation, Contribution, Distribution, and related transactions, including the request for such rulings together with all supplemental filings and exhibits thereto submitted to the IRS on behalf of Abbott or its subsidiaries in connection therewith.

 

“Remitting Party” has the meaning ascribed to such term in Section 5.05(b).

 

“Responsible Party” has the meaning ascribed to such term in Section 5.05(b).

 

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

 

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

 

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

 

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

 

“Tax” means: (i) any income, net income, gross income, gross receipts, profits, capital stock, franchise, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, customs duties, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any Tax Authority, and any interest, penalties, additions to tax or additional amounts with respect to the foregoing imposed on

 

4



 

any taxpayer or consolidated, combined or unitary group of taxpayers; and (ii) any Employment Tax.

 

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

 

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

 

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

 

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

 

“Tax Opinion” means the opinion on the United States federal income taxation of certain matters involved in the Separation and the Distribution provided by Baker McKenzie LLP to Abbott.

 

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

 

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

 

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

 

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“Third Party” has the meaning set forth in the Distribution Agreement.

 

“U.S. Payroll Processing & Services BSP Transition Services Lead Sheet” means the U.S. Payroll Processing & Services BSP Transition Services Lead Sheet attached to the U.S. Transition Services Agreement.

 

“U.S. Transferred Employee” has the meaning set forth in the EMA by and between Abbott and AbbVie.

 

“U.S. Transition Services Agreement” means the U.S. Transition Services Agreement set forth in the Distribution Agreement.

 

ARTICLE II.   RESPONSIBILITY FOR TAX

 

Section 2.01                            Responsibility for Tax.

 

(a)                        Except as specifically provided in any of the agreements contemplated by the Distribution Agreement, including the EMA with respect to Employment Taxes, Abbott shall be responsible for, and shall indemnify and hold harmless the AbbVie Group from any liability for (i) any Tax imposed by any Tax Authority on Abbott or an Abbott Affiliate, including AbbVie and all AbbVie Affiliates, for any Pre-Distribution Period, except (x) any Covered Transaction Tax for which AbbVie is responsible under Section 3.01(b) and (y) any non-income Tax imposed on AbbVie or any AbbVie Affiliate for such period; (ii) notwithstanding Section 2.01(a)(i)(y), any Tax (other than an income Tax)  imposed on Abbott or any Abbott Affiliate arising from, or attributable to, any transfer of assets or liabilities in the Separation and including such transfers contemplated to occur after the Effective Time except to the extent recoupable by AbbVie or any AbbVie Affiliate, (iii) notwithstanding Section 2.01(a)(i)y), any Employment Taxes imposed on Abbott or any Affiliate arising as a transferee of employees of AbbVie or any AbbVie Affiliate in connection with the Separation, and (iv) any Tax imposed by any Tax Authority on any member of the Abbott Group for any Post-Distribution Period.

 

(b)                        Except as specifically provided in any of the agreements contemplated by the Distribution Agreement, including the EMA with respect to Employment Taxes, AbbVie shall be responsible for, and shall indemnify and hold harmless the Abbott Group from any liability for (i) any Tax imposed by any Tax Authority on AbbVie or a AbbVie Affiliate for any Post-Distribution Period; (ii) any Covered Transaction Tax for which AbbVie is responsible under Section 3.01(b); (iii) any non-income Tax imposed on AbbVie or any AbbVie Affiliate for any Pre-Distribution Period, including Employment Taxes imposed on AbbVie or any AbbVie Affiliate as a transferee of employees of Abbott or any Abbott Affiliate in connection with the Separation (iv) any Tax (other than an income Tax) imposed on AbbVie or any AbbVie Affiliate arising from, or attributable to, any transfer of assets or

 

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liabilities in the Separation and including such transfers contemplated to occur after the Effective Time except to the extent recoupable by Abbott or any Abbott Affiliate, and (v) any Tax imposed on Abbott or an Abbott Affiliate as a result of an action undertaken, or a failure to act, by AbbVie or an AbbVie Affiliate after the Effective Time (other than described in Section 2.01(d)).

 

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

 

(d)                        With respect to a Deferred AbbVie Local Business:  (i) the U.S. federal income Tax treatment of payments under any ICO Agreement is described in Section 4.02(g)(i); (ii) the U.S. federal income Tax treatment of the income of the Deferred AbbVie Local Business while it is held by Abbott or any Abbott Affiliate following the Distribution Date is described in Section 4.20(g)(ii); (iii) the responsibility for transfer Taxes arising or attributable to the transfer of a Delayed AbbVie Local Business to AbbVie or an AbbVie Affiliate following the Distribution Date is addressed in Section 2.01(a) and (b); and (iv) the responsibility for, and allocation of, non-U.S. income Taxes arising from the transfer of the assets and liabilities of a Delayed AbbVie Local Business to AbbVie or an AbbVie Affiliate (or other disposition thereof) is set forth in the ICO Agreements.

 

Section 2.02                            Refunds, Tax Benefits, and Other Allocations

 

(a)                        Refunds and Carrybacks.

 

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

 

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

 

(iii)                     Payment of Refunds.  Except as provided in Section 2.02(a)(iv), AbbVie shall forward to Abbott, or reimburse Abbott for, any refunds due Abbott (pursuant to the terms of this Section 2.02(a)) after receipt thereof (less any Tax Detriment attributable to such refunds), and Abbott shall forward to AbbVie, or reimburse AbbVie for, any refunds due AbbVie (pursuant to the terms of this Section 2.02(a)) after receipt

 

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thereof (less any Tax Detriment attributable to such refunds).  In the case of a refund received in the form of a credit against other or future Tax liabilities, reimbursement with respect to such refund shall be due in each case on the due date for payment of the Tax against which such refund has been credited.  Any payment required to be made pursuant to this Section 2.02(a)(iii) shall be made within thirty (30) days of the receipt of the refund.  If Abbott reasonably so requests, AbbVie, at Abbott’s expense, shall file for and pursue any refund to which Abbott is entitled under this Section 2.02(a).  If AbbVie reasonably so requests, Abbott, at AbbVie’s expense, shall file for and pursue any refund to which AbbVie is entitled under this Section 2.02(a).  The Party making a payment pursuant to this Section 2.02(a)(iii) must deliver with the payment a statement describing in reasonable detail the basis for the calculation of the amount being paid.

 

(iv)                    Carrybacks.

 

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

 

2)                            If AbbVie has a loss or other Tax attribute for any Post-Distribution Period that is to be carried back to any Pre-Distribution Period, AbbVie shall notify Abbott that such item should be carried back.  Such notification shall include a description in reasonable detail of the grounds for the refund and the amount thereof, and a certification by an appropriate officer of AbbVie setting forth AbbVie’s belief, based on a thorough

 

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examination of the facts and Tax law relating to the Tax treatment of such item, that (A) the Tax treatment of such item is supported by “substantial authority” within the meaning of Section 6662 of the Code (and the Treasury Regulations thereunder) or, where applicable, any analogous provision of state, local or foreign law and (B) the transaction has economic substance for purposes of Section 7701 of the Code and any analogous provision of state, local or foreign law.  Abbott, at AbbVie’s expense, shall cooperate with AbbVie in connection with the filing and processing of any AbbVie carryback and shall provide AbbVie with copies of all correspondence related thereto.

 

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

 

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

 

(b)                        Effect of Audit Adjustments.

 

Notwithstanding Section 2.01 —

 

(i)                           Payments by AbbVie to Abbott.  Except as provided in Sections 3.01(b) and 3.02, if as a result of a Determination, any adjustment shall be made to any Tax Return relating, in whole or in part, to Tax for which any member of the Abbott Group is responsible, and if such adjustment results in both (x) a Tax Detriment to any member of the Abbott Group for any taxable period and (y) a Tax Benefit to any member of the AbbVie Group for any Post-Distribution Period, then AbbVie shall pay to Abbott an amount equal to the lesser of the Tax Benefit for each taxable period and the Corresponding Portion of the Tax Detriment.  For the avoidance of doubt, this Section 2.02(b)(i) shall apply to any adjustment under Section 482 of the Code or any similar provisions increasing the amount of payments received or

 

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deemed received by Abbott or any Abbott Affiliate under the Abbott Park Lease.

 

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

 

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

 

(c)                         Other Allocations

 

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

 

(ii)                        Allocation of Earnings and Profits.  The allocation of earnings and profits between Abbott and AbbVie and between their Affiliates in the case of any Internal Distribution shall be reasonably determined by Abbott pursuant to Section 312(h) of the Code and the relevant Treasury Regulations under the Code.  A preliminary allocation of earnings and profits through December 31, 2012, shall be provided no later than forty-five (45) days after Abbott receives the allocation from the public accounting firm that prepares such allocation.

 

(iii)                     Treatment of Tax Attributes.  Abbott shall in good faith advise AbbVie in writing of the portion, if any, of the Tax attributes, including overall foreign loss or consolidated, combined or unitary attributes, which Abbott determines shall be allocated or apportioned to the AbbVie Group under applicable Law. AbbVie and all members of the AbbVie Group shall prepare all Tax Returns in accordance with such written notice. In the event that any temporary or final amendments to Treasury Regulations are promulgated after the date of this Agreement that provide for any election to apply such regulations retroactively, then any such election shall be made only to the extent that Abbott and AbbVie collectively agree to make such election. As soon as

 

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practicable after receipt of a written request from AbbVie, Abbott shall provide copies of any studies, reports, and workpapers supporting the Tax attributes, including earnings and profits, allocable to the AbbVie Group. For the absence of doubt, Abbott shall not be liable to AbbVie or any member of the AbbVie Group for any failure of any determination under this Section 2.0(c) to be accurate under applicable Law.

 

(iv)                    Certain Section 59(e) Elections.  Abbott, in its sole discretion, may timely make or cause to be made an election pursuant to Section 59(e) of the Code to capitalize and amortize over ten years all or a portion of the qualified research and experimental expenditures of the Transferred Businesses reflected on the original Abbott federal consolidated income Tax Return for the 2012 tax year

 

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

 

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

 

Section 2.03                            Option Deductions.  Solely the member of the Abbott Group or AbbVie Group for which the relevant individual is currently employed or, if such individual is not currently employed by a member of either group, was most recently employed, at the time of the vesting, exercise, disqualifying disposition, payment or other relevant taxable event, as appropriate, in respect of equity awards and other incentive compensation of such individual described in Section 6.01(a) of the EMA, shall be entitled to claim any income Tax deduction in respect of such equity awards and other incentive compensation on its respective Tax Return associated with such event.  To the extent any Tax deduction that is described in the first sentence of this Section 2.03 and claimed by any member of the Abbott Group is disallowed to any and all members of the Abbott Group and a Tax Authority makes a Determination that a member of the AbbVie Group is entitled to such deduction, Abbott shall notify AbbVie of the receipt of such Determination, promptly after receipt thereof, and AbbVie shall pay to Abbott the lesser of the amount of its Tax Benefit and the amount of the corresponding Tax Detriment in accordance with Section 2.02(b).  To the extent any Tax deduction that is described in the first sentence of this Section 2.03 and claimed by any member of the AbbVie Group is disallowed to any and all members of the AbbVie Group and a Tax Authority makes a Determination that a member of the Abbott Group is entitled to such deduction, AbbVie shall notify Abbott of the receipt of such Determination, promptly after receipt thereof, and Abbott shall pay to

 

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AbbVie the lesser of the amount of its Tax Benefit and the amount of the corresponding Tax Detriment in accordance with Section 2.02(b).

 

Section 2.04                            Tax Returns.

 

(a)                        Except as provided in Section 2.04(b), Abbott shall prepare and timely file all Tax Returns for Pre-Distribution Periods for Abbott and all of its Affiliates, including AbbVie and all of its Affiliates, and all Tax Returns for Straddle Periods for all members of the Abbott Group.  In connection with each federal, state, local, and foreign Tax Return that is required under this Agreement to be filed by Abbott for taxable periods ending in 2012, AbbVie shall timely furnish to Abbott Tax information and documents as Abbott may reasonably request.  With respect to any information required to be provided by AbbVie pursuant to this Section 2.04(a), (i) Abbott shall utilize such information in the preparation of the appropriate Tax Returns as provided by AbbVie, except to the extent (a) AbbVie provides its prior written consent to change any such information, or (b) Abbott determines in good faith that such information is inaccurate or incomplete in a material respect, and (ii) AbbVie agrees to indemnify and hold harmless Abbott and its Affiliates from and against any cost, fine, penalty, or other expense of any kind attributable to the misconduct or negligence of AbbVie or any of its Affiliates in supplying Abbott with inaccurate or incomplete information.  An appropriate officer of AbbVie shall provide a certification that, to such officer’s best knowledge and belief, any and all information provided pursuant to this Section 2.04(a) is accurate and complete.  If AbbVie fails to provide any information required by this Section 2.04(a) within the time period specified, Abbott may file the applicable Tax Returns based on the information available at the time such Tax Returns are due and AbbVie shall indemnify and hold harmless Abbott and its Affiliates from Taxes or other costs imposed on Abbott or any of its Affiliates but only to the extent resulting from AbbVie’s failure to provide such information in a timely manner.  In addition, AbbVie shall provide Abbott with all documents and information, and make available employees and officers of AbbVie and AbbVie Affiliates as Abbott reasonably requests to prepare and file any Tax Return for any Pre-Distribution Period or Straddle Period (including any claims for refunds described in Section 2.02(a)) or to conduct any Tax Contest with respect to any such Tax Return.  [If AbbVie is responsible under Section 2.01 for a portion of any Tax reported on a Tax Return prepared under this Section 2.04(a) by Abbott, Abbott shall provide AbbVie with a copy of such Tax Return at least thirty (30) days prior to its due date.  AbbVie shall notify Abbott of any disagreement within 20 days of AbbVie’s receipt of such Tax Return.  Any dispute shall be resolved pursuant to the procedures provided by this Agreement.  AbbVie shall be solely responsible for preparing and timely filing all Tax Returns relating to non-income taxes of AbbVie or any AbbVie Affiliate for a Pre-Distribution Period and shall prepare and timely file all Tax Returns for Straddle Periods for all members of the AbbVie Group.  If Abbott is responsible under Section 2.01(a) for a portion of any Tax reported

 

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on a Straddle Period Tax Return for any member of the AbbVie Group, AbbVie shall provide Abbott with a copy of such Tax Return at least thirty (30) days prior to its due date.  Abbott shall notify AbbVie of any disagreement within 20 days of Abbott’s receipt of such Tax Return.  Any dispute shall be resolved pursuant to the procedures provided by this Agreement.

 

(b)                        AbbVie shall not file (or allow any member of the AbbVie Group to file) any amended Tax Return for any Pre-Distribution Period other than a Tax Return relating to non-income Taxes of the AbbVie or any AbbVie Affiliate but only with the consent of Abbott, which consent shall not be unreasonably denied.

 

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

 

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

 

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

 

(b)                        Record Retention.  Each of Abbott and AbbVie shall retain all Tax Records in its possession as of the Effective Time relating to any Pre-Distribution Period that are relevant to the other Party for purposes described in Section

 

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2.05(a) until such time as the other Party shall consent to the disposition of such Tax Records, which consent shall not be withheld unreasonably.

 

Section 2.06                            Tax Contests.

 

(a)                        Notice.  Each Party shall provide prompt notice to the other Party of any pending or threatened Tax audit, assessment, or proceeding, or other Tax Contest, of which it becomes aware, related to Tax for which it is indemnified by the other Party hereunder.  Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority with respect to any such matters.  If an Indemnified Party has knowledge of an asserted Tax liability with respect to a matter for which it is to be indemnified hereunder and such Party fails to give the Indemnifying Party prompt notice of such asserted Tax liability, then (i) if the Indemnifying Party is precluded from contesting the asserted Tax liability in any forum as a result of the failure to give prompt notice, the Indemnifying Party shall have no obligation to indemnify the Indemnified Party for any Tax resulting from such assertion of Tax liability, and (ii) if the Indemnifying Party is not precluded from contesting the asserted Tax liability in any forum, but such failure to give prompt notice results in a monetary detriment to the Indemnifying Party, then any amount that the Indemnifying Party is otherwise required to pay the Indemnified Party pursuant to this Agreement shall be reduced by the amount of such detriment.

 

(b)                        Control of Tax Contests.

 

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

 

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

 

(iii)                     Covered Transaction Taxes.  AbbVie shall have the right to participate in the conduct of a Tax Contest related to Covered Transactions Taxes

 

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

 

(c)                         Election.  If as a result of an adjustment to Abbott’s Tax Return from a Tax Contest, an election is available under IRS Revenue Procedure 99-32, 1999-2 C.B. 296, (or successor guidance or regulations) that would allow an AbbVie Affiliate to transfer cash to AbbVie (or other AbbVie Affiliate) tax-free for U.S. federal income Tax purposes, such election shall be made by Abbott unless Abbott determines, in its sole discretion, that making such election will result in an adverse Tax consequence, including the loss of a Tax Benefit, for it or any of its Affiliates.

 

ARTICLE III.   TRANSACTIONS TAX

 

Section 3.01                            Transactions Tax.

 

(a)                        General.  Except as otherwise provided in Section 3.01(b), Abbott shall be responsible for, and shall indemnify and hold harmless the AbbVie Group from any and all (i) liabilities sustained by Abbott or AbbVie as a result of the Distribution failing to qualify as Tax-free to the Abbott shareholders pursuant to Section 355(a) of the Code, and (ii) federal, state, local, and foreign Tax imposed by any Tax Authority on Abbott or any Abbott Affiliate as a result of (x) the failure of any of the transactions described in the Private Letter Ruling or Tax Opinion (including each Internal Distribution) to be treated as provided in such ruling or opinion; (y) the failure of any of the transactions described in the Other Tax Rulings (each an “Other Transaction”) to be treated as provided in such rulings; and (z) the inclusion, or taking into account, of any income or gain by Abbott or its Affiliates (including any member of the AbbVie Group) under Treasury Regulations Section 1.1502-13 or 1.1502-19 (or any corresponding provisions of other applicable Tax laws) as a result of the Separation and Distribution (each of subclauses (i) through (ii), a “Covered Transaction Tax”).

 

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(b)                        Inconsistent Acts and Events.  AbbVie shall be responsible for, and shall indemnify and hold harmless the Abbott Group from and against any liability for, any Covered Transaction Tax (including without limitation reasonable attorney fees and other costs incurred in connection therewith) or any other Tax resulting from (i) any breach by any member of the AbbVie Group of any of the representations or covenants under Article IV hereof, (ii) any Specified Action performed by any member of the AbbVie Group (whether or not Section 4.02(e) is complied with), (iii) any Section 355(e) Event with respect to AbbVie or an AbbVie Affiliate (whether or not such Section 355(e) Event is caused by a Specified Action), and (iv) any gain recognized or recapture of income (including under any gain recognition agreement entered into by Abbott or any Abbott Affiliate in accordance with Treasury Regulations Section 1.367(a)-8) in relation to an action, or failure to act, of a member of the AbbVie Group arising under any Tax Law.

 

A Section 355(e) Event with respect to AbbVie or a member of the AbbVie Group means any event, involving the stock of AbbVie or an AbbVie Affiliate or assets of any member of the AbbVie Group, that causes the Distribution or any distribution described in the Private Letter Ruling or Tax Opinion of the stock of foreign and U.S. subsidiaries for which rulings or opinions were requested (each an “Internal Distribution”) to be a taxable event to any member of the Abbott Group as the result of the application of Section 355(e) of the Code

 

ARTICLE IV.   REPRESENTATIONS AND COVENANTS

 

Section 4.01                            Representations.

 

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

 

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

 

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

 

(d)                        AbbVie represents that, as of the date of this Agreement, neither it nor any of its Affiliates has any plan or intention to take any action that is inconsistent with the Tax treatment of the transactions provided by the Private Letter

 

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Ruling, the Other Tax Rulings or Tax Opinion or that otherwise would result in a Covered Transaction Tax.

 

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

 

Section 4.02                            Covenants.

 

(a)                        Successor Employer.  Effective for all payments of wages and other compensation starting on and after the date of the Distribution, Abbott and AbbVie covenant and agree that Abbott will control the payments of wages and other compensation to all of the U.S. Transferred Employees and independent contractors as of 2013 and through the duration of Abbott’s obligations under the U.S. Payroll Processing & Services Lead Sheet and the Accounts Payable U.S. Services BSP Transition Services Lead Sheet, each of which are attached to the U.S. Transition Services Agreement, and Abbott shall assume responsibilities for performing required withholdings of Federal, state and local income Taxes and the employee share of FICA from all payments made by Abbott on behalf of AbbVie pursuant to this Section 4.02, coordinating with AbbVie’s designated brokers which handle exercises of stock options, vesting of restricted stock and other payments of stock compensation so as to ensure correct processing of withholdings and other payroll Taxes owed with respect to such compensation, calculating the employer-shares of payroll Taxes owed with respect to all such compensation, and depositing such Taxes under AbbVie’s Employer Identification Number (“EIN”).  Abbott and AbbVie further agree that, as part of its responsibilities for processing all such compensation, Abbott will file all Forms W-2 and other payroll tax forms for the U.S. Transferred Employees as of 2013 and for the duration of Abbott’s obligations under the U.S. Payroll Processing & Services BSP Transition Services Lead Sheet and the Accounts Payable U.S. Services BSP Transition Services Lead Sheet, will file all Forms 1099, where required, reporting all other payments to persons contracting with AbbVie, and will file all Forms 940, 941 and 945 and state or local equivalents of such forms, as required, under AbbVie’s name, address, and EIN.  AbbVie covenants and agrees to cooperate with the administration and implementation of these compensation payments and Tax deposit and filing procedures, and to reimburse Abbott both for all such payments of compensation and payroll taxes described above, and for Abbott’s costs of processing this compensation and filing these Tax Returns.  AbbVie further covenants and agrees to indemnify and reimburse Abbott for the costs of responding to any notices from any government authority, and for any additional Taxes, fines, interest and/or penalties imposed on Abbott with respect to any deficiencies in any deposits or filings made by Abbott in

 

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performing the compensation payment, withholding, depositing and Tax form filing functions described above.

 

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

 

(i)                           Specified Actions.  Any time before the second anniversary of the Distribution Date, AbbVie shall not (and shall cause its Affiliates to not) (A) liquidate, merge, or consolidate with or into any corporation that was not already wholly owned by AbbVie or by a wholly owned subsidiary of AbbVie prior to such transaction; (B) issue any of its capital stock in one or more transactions, other than (i) issuances to employees, directors, or independent contractors in connection with the performance of services for AbbVie (that are not excessive by reference to the services performed) which issuances either (x) are with respect to the exercise of options of AbbVie that are substituted for Abbott options or (y) satisfy Safe Harbor VIII of Treasury Regulations Section 1.355-7(d) to not be treated for purposes of Section 355(e) of the Code to be part of a plan or series of related transactions that includes the Distribution or the Internal Distributions or (ii) issuances of stock that satisfy Safe Harbor IX of Treasury Regulations Section 1.355-7(d); (C) redeem, purchase, or otherwise reacquire any of its capital stock in one or more transactions; (D) change the voting rights of any of its stock; (E) issue any options to acquire AbbVie Shares other than options that satisfy Safe Harbor VIII of Treasury Regulations Section 1.355-7(e)(3)(ii); (F) sell, exchange, distribute, or otherwise dispose of, other than in the ordinary course of business, all or a substantial part of the assets of any of the trades or businesses relied on to satisfy Section 355(b) of the Code; or (G) discontinue or cause to be discontinued the active conduct of any of the trades or businesses relied on to satisfy Section 355(b) of the Code.  Notwithstanding the foregoing, clauses (A) through (E) of this Section 4.02(b)(i) shall not apply unless there are transactions described in such clauses any time before the second anniversary of the Distribution Date that result in one or more Persons acquiring directly or indirectly stock representing, in the aggregate, 25 percent or greater interest in AbbVie (as defined in Sections 355(d)(4) and 355(e) of the Code).  This Section 4.02(b)(i) and the application thereof is intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or regulations

 

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promulgated under Section 355(e) of the Code shall be incorporated in this definition and its interpretation.

 

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

 

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

 

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

 

(d)                        Tax Returns.  Each of Abbott and AbbVie covenants and agrees that it shall refrain from taking, and it shall cause its Affiliates to refrain from taking, any position on a Tax Return that is inconsistent with (i) the Tax treatment of the transactions provided by the Private Letter Ruling or Tax Opinion, (ii) the External and Internal Contributions qualifying for Tax-free treatment under Section 361, (iii) the Tax treatment of the transactions provided by the Other Tax Rulings, (iv) the allocation of the benefits and burdens of AbbVie assets and liabilities pursuant to Sections 2.03 and 2.04 of the Distribution Agreement, (v) the reporting positions set forth in Section 4.02(g) of this Agreement regarding the ICO Agreement, or (vi) the documents effecting any transaction undertaken in connection with the Separation that is not addressed by the Private Letter Ruling, any Other Tax Ruling or Tax Opinion.

 

(e)                         Exception.  Notwithstanding the foregoing, AbbVie shall be permitted to take an action inconsistent with Section 4.02(b), if, prior to taking such action, AbbVie provides notification to Abbott of its plans with respect to such

 

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action and promptly responds to any inquiries by Abbott following such notification, and (unless Abbott agrees otherwise in writing) either:

 

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

 

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

 

(iii)                     In case of the Other Transactions, AbbVie obtains:

 

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

 

(b)                        an opinion, reasonably acceptable to Abbott, of an independent Tax counsel, reasonably acceptable to Abbott, on the basis of facts and representations consistent with the facts at the time of such action, that such action will not affect the Tax treatment of the transactions provided by the Other Tax Rulings.

 

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

 

(f)                          Duty to Mitigate Recognition or Recapture of Income. Prior to any event that may result in recognition or recapture of income (including under any gain recognition agreement entered into pursuant to Treasury Regulations Section 1.367(a)-8), Abbott and AbbVie shall use (and shall cause the members of the Abbott Group and AbbVie Group, respectively, to use) all commercially

 

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reasonably efforts to eliminate such gain recognition or recapture of income or otherwise avoid or minimize the impact thereof to the other party, including by the execution of an appropriate gain recognition agreement pursuant to Treasury Regulations Section 1.367(a)-8.

 

(g)                         ICO Agreement

 

(i)                           Deferred AbbVie Local Business.  A payment made under an ICO Agreement in connection with the transfer and acquisition of a Deferred AbbVie Local Business by AbbVie or an AbbVie Affiliate following the Distribution Date and the corresponding payment by Abbott or an Abbott Affiliate to AbbVie or an AbbVie Affiliate shall be characterized for U.S. income Tax purposes and on any related Tax Return as the purchase by Abbott or the relevant Abbott Affiliate, as the case may be, of the Deferred AbbVie Local Business of the Abbott Affiliate operating such business following the Distribution Date in exchange for such Abbott Affiliate transferring the Deferred AbbVie Local Business to the AbbVie Affiliate (the “Reporting Position”) occurring on the Distribution Date.  The Parties agree that if a Tax Authority challenges the Reporting Position, the Parties will jointly defend such position until a Determination.  If the Determination with respect to such challenge does not confirm the Reporting Position, the Party receiving a Tax Benefit as a result of such Determination shall pay the amount of such Tax Benefit to the other Party incurring the Tax Detriment, if any, under the principles of Section 2.02(b) hereof but in no event exceeding the amount of such Tax Detriment.

 

(ii)                        Other Payments and Income.  The payment by Abbott or any Abbott Affiliate or by AbbVie or any AbbVie Affiliate under Section 2.05 or Section 2.6 of any ICO Agreement shall be characterized for U.S. income Tax purposes, as paid by or received by Abbott or any Abbott Affiliate in its capacity as agent of AbbVie or any AbbVie Affiliate with respect to the Deferred AbbVie Local Business (the “Payment Reporting Position”).  AbbVie or the relevant AbbVie Affiliate shall account for the net income of the Deferred AbbVie Local Business following the Distribution Date for U.S. federal income Tax purposes and on the relevant U.S. federal income Tax Returns and Abbott or the relevant Abbott Affiliate shall not report such income for purposes of filing their U.S. federal income Tax Returns (the “Income Reporting Position”).  Any foreign Taxes paid with respect to the income of the Deferred AbbVie Local Business shall be, for all U.S. income Tax purposes, for the account of AbbVie or the relevant AbbVie Affiliate and Abbott or the relevant AbbVie Affiliate shall not claim such foreign income Taxes for U.S. income Tax purposes on any Tax Return (the “Foreign Tax Credit Reporting Position”).  The Parties further agree to defend the Payment Reporting Position, the Income Reporting Position and the Foreign Tax Credit Reporting Position if challenged

 

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by the IRS until a Determination.  If the Determination does not confirm the relevant position, and such Determination results in a Tax Detriment to a Party and a Tax Benefit to the other Party, the Party receiving the Tax Benefit shall pay the amount of such Tax Benefit to the other Party incurring the Tax Detriment under the principles of Section 2.01(b) hereof but in no event exceeding the amount of such Tax Detriment.

 

Section 4.03                            No Continuing Liability for Former Members.

 

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

 

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

 

ARTICLE V.   MISCELLANEOUS PROVISIONS

 

Section 5.01                            Incorporation by Reference.  The following sections of the Distribution Agreement are hereby incorporated into this Agreement by reference: Section 9.01. Counterparts; Entire Agreement; Corporate Power; Signatures and Delivery, Section 9.02. Governing Law, Section 9.03. Assignability, Section 9.04. Third Party Beneficiaries, Section 9.06. Severability, Section 9.07. Force Majeure, Section 9.10. Headings, Section 9.11. Survival of Covenants, Section 9.12. Subsidiaries, Section 9.13. Waivers of Default, and Section 9.14. Amendments, Section 9.15. Interpretation, and Section 9.18. Mutual Drafting.

 

Section 5.02                            Notice.  All notices or other communications under this Agreement must be in writing and shall be deemed to be duly given: (a) when delivered in person; (b) upon transmission via confirmed facsimile transmission, provided that such transmission is followed by delivery of a physical copy thereof in person, via U.S. first class mail, or via a private express mail courier; or (c) two days after deposit with a private express mail courier, in any such case addressed as follows:

 

If to Abbott, to:

 

Abbott Laboratories

100 Abbott Park Road

 

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Building AP6D, Dept. 364

Abbott Park, IL 60064-6020

Facsimile: (847) 938-6277

Attention: General Counsel

 

With a copy to:

Abbott Laboratories

100 Abbott Park Road

Building AP6D, Dept. 367

Abbott Park, IL 60064-6057

Facsimile: (847) 935-3346

Attention: Vice President-Tax

 

If to AbbVie, to:

AbbVie Inc.

1 North Waukegan Road

North Chicago, Illinois 60064

Facsimile:

Attention: General Counsel

 

With a copy to:

AbbVie Inc.

1 North Waukegan Road

North Chicago, Illinois 60064

Facsimile:

 

Attention: Vice President-Tax.  Any Party may, by notice to the other Party, change the address to which such notices are to be given.

 

Section 5.03                            Advisors.  Abbott has selected Baker & McKenzie and Wachtell, Lipton, Rosen & Katz as counsel in connection with the Distribution.  AbbVie acknowledges, for itself and each AbbVie Affiliate, that Baker & McKenzie and Wachtell, Lipton, Rosen & Katz are acting in the capacity as counsel to Abbott and as counsel to AbbVie, in connection with this Agreement and the provisions contemplated herein.

 

Section 5.04                            Dispute Resolution.  Any and all disputes between Abbott and AbbVie arising out of any provision of this Agreement shall be resolved through the procedures provided in Schedule 7.01 of the Distribution Agreement.

 

Section 5.05                            Payments.

 

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

 

23



 

different time for payment, the Indemnifying Party shall pay to the Indemnified Party any payment it owes to the Indemnified Party under this Agreement within thirty (30) days after the receipt of the invoice for such payment.

 

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

 

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

 

(d)                        Interest on Late Payments.  Unless a provision in this Agreement specifically provides otherwise, any payment required to be made pursuant to this Agreement that is not made on or before the due date for such payment shall bear interest from the date after the due date to and including the date of payment at the Prime Rate plus two percent.  Such interest shall be paid at the same time as the payment to which it relates.  Any interest payable pursuant to this paragraph that is not paid when due shall bear interest at the Prime Rate plus two percent.

 

24



 

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

 

 

Abbott Laboratories

 

 

 

 

 

By:

 

 

 

Title

 

 

 

 

 

 

 

AbbVie Inc.

 

 

 

 

 

 

 

By:

 

 

 

Title

 

 

25




Exhibit 10.4

 

SPECIAL PRODUCTS MASTER AGREEMENT

 

BY AND BETWEEN

 

ABBOTT LABORATORIES

 

AND

 

ABBVIE INC.

 

DATED AS OF [·]

 



 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

ARTICLE I

DEFINITIONS

1

 

 

 

Section 1.01

 

Definitions

1

 

 

 

 

ARTICLE II

ABBVIE SPECIAL PRODUCTS ASSETS

12

 

 

 

Section 2.01

 

AbbVie Special Products Assets

12

 

 

 

 

Section 2.02

 

Liabilities

12

 

 

 

 

Section 2.03

 

Disclaimer of Representations and Warranties

12

 

 

 

 

Section 2.04

 

Further Assurances

13

 

 

 

 

ARTICLE III

GRANT OF RIGHTS

14

 

 

 

Section 3.01

 

Grant of Rights to Abbott

14

 

 

 

 

Section 3.02

 

Grant of Rights to AbbVie

15

 

 

 

 

Section 3.03

 

Sublicense Rights

17

 

 

 

 

Section 3.04

 

Obligation with Respect to Affiliates and Subsidiaries

17

 

 

 

 

Section 3.05

 

In-Licensed Intellectual Property

17

 

 

 

 

Section 3.06

 

Third Party License Agreements

17

 

 

 

 

ARTICLE IV

INTELLECTUAL PROPERTY RIGHTS

19

 

 

 

Section 4.01

 

Disclosure of Improvements and Special Products Know-How

19

 

 

 

 

Section 4.02

 

Ownership

19

 

 

 

 

Section 4.03

 

Prosecution of Patent Rights

19

 

 

 

 

Section 4.04

 

Prosecution Costs

20

 

 

 

 

Section 4.05

 

Prosecution Cooperation

21

 

 

 

 

Section 4.06

 

Notice of Issuance

21

 

 

 

 

Section 4.07

 

Matters Involving Infringement

22

 

 

 

 

Section 4.08

 

Third Party Infringement Suit

22

 

 

 

 

ARTICLE V

GOVERNANCE

22

 

 

 

ARTICLE VI

DEVELOPMENT MATTERS

22

 

 

 

Section 6.01

 

Development Rights and Responsibilities

22

 

 

 

 

Section 6.02

 

Development Activities for Special Products

22

 

 

 

 

Section 6.03

 

Development Activities for New Products

24

 

i



 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

ARTICLE VII

COMMERCIALIZATION MATTERS

24

 

 

 

Section 7.01

 

Abbott Territory

24

 

 

 

 

Section 7.02

 

AbbVie Territory

25

 

 

 

 

ARTICLE VIII

MANUFACTURING MATTERS

26

 

 

 

Section 8.01

 

Supply

26

 

 

 

 

Section 8.02

 

Cooperation

26

 

 

 

 

ARTICLE IX

REGULATORY MATTERS

27

 

 

 

Section 9.01

 

Ownership of Regulatory Approvals

27

 

 

 

 

Section 9.02

 

Allocation of Regulatory Responsibilities

27

 

 

 

 

Section 9.03

 

Sharing of Correspondence with Governmental Authorities

28

 

 

 

 

Section 9.04

 

Pharmacovigilance and Medical Inquiries

28

 

 

 

 

Section 9.05

 

Labeling Changes

28

 

 

 

 

Section 9.06

 

Notification or Information

28

 

 

 

 

Section 9.07

 

Recalls

29

 

 

 

 

ARTICLE X

INDEMNIFICATION

30

 

 

 

Section 10.01

 

Indemnification by AbbVie

30

 

 

 

 

Section 10.02

 

Indemnification by Abbott

30

 

 

 

 

Section 10.03

 

Indemnification Obligations Net of Insurance Proceeds and Other Amounts

30

 

 

 

 

Section 10.04

 

Procedures for Indemnification of Third Party Claims

31

 

 

 

 

Section 10.05

 

Additional Matters

33

 

 

 

 

Section 10.06

 

Right of Contribution

35

 

 

 

 

Section 10.07

 

Remedies Cumulative

35

 

 

 

 

Section 10.08

 

Survival of Indemnities

35

 

 

 

 

Section 10.09

 

Covenant Not to Sue

35

 

 

 

 

ARTICLE XI

CONFIDENTIALITY

35

 

 

 

Section 11.01

 

Confidentiality

35

 

 

 

 

Section 11.02

 

Protective Arrangements

37

 

ii



 

TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

Section 11.03

 

Other Permitted Disclosures

37

 

 

 

 

ARTICLE XII

DISPUTE RESOLUTION

38

 

 

 

Section 12.01

 

Disputes

38

 

 

 

 

ARTICLE XIII

TERM

39

 

 

 

Section 13.01

 

Term

39

 

 

 

 

Section 13.02

 

Expiration

39

 

 

 

 

Section 13.03

 

Survival

39

 

 

 

 

ARTICLE XIV

MISCELLANEOUS

40

 

 

 

Section 14.01

 

Counterparts; Entire Agreement; Corporate Power; Facsimile Signatures

40

 

 

 

 

Section 14.02

 

Governing Law

41

 

 

 

 

Section 14.03

 

Assignability

41

 

 

 

 

Section 14.04

 

Third Party Beneficiaries

41

 

 

 

 

Section 14.05

 

Notices

42

 

 

 

 

Section 14.06

 

Severability

42

 

 

 

 

Section 14.07

 

Force Majeure

43

 

 

 

 

Section 14.08

 

No Set Off

43

 

 

 

 

Section 14.09

 

Responsibility for Expenses

43

 

 

 

 

Section 14.10

 

Headings

43

 

 

 

 

Section 14.11

 

Subsidiaries

43

 

 

 

 

Section 14.12

 

Waivers of Default

43

 

 

 

 

Section 14.13

 

Amendments

44

 

 

 

 

Section 14.14

 

Interpretation

44

 

 

 

 

Section 14.15

 

Public Announcements

44

 

 

 

 

Section 14.16

 

Specific Performance

44

 

 

 

 

Section 14.17

 

Mutual Drafting

45

 

iii



 

THIS SPECIAL PRODUCTS MASTER AGREEMENT, dated as of [·], is by and between ABBOTT LABORATORIES, an Illinois corporation (“Abbott”), and ABBVIE INC., a Delaware corporation (“AbbVie”).

 

R E C I T A L S:

 

WHEREAS, Abbott and AbbVie have entered into that certain Separation and Distribution Agreement dated as of [· ] (the “Separation Agreement”) that, among other things, sets forth the terms and conditions pursuant to which the AbbVie Business (as defined in the Separation Agreement) is separated from the Abbott Business (as defined in the Separation Agreement) (the “Separation”);

 

WHEREAS, each of Abbott and AbbVie has determined that it is necessary and advisable in connection with the Separation to allocate ownership of certain intellectual property, permits, approvals and other Assets (as defined in the Separation Agreement) relating to, and responsibilities for, certain Special Products (as defined herein); and

 

WHEREAS, Abbott and AbbVie desire to set forth the terms and conditions that shall govern the allocation of rights and responsibilities of Abbott and AbbVie with respect to the Special Products.

 

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 14.13 regarding the interpretation of certain words and phrases used in this Agreement.  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Separation Agreement.  In addition, for the purpose of this Agreement, the following terms shall have the meanings set forth below.

 

Abbott” has the meaning set forth in the Preamble.

 

Abbott Indemnitees” means: (i) Abbott and each Abbott Subsidiary; (ii) each of the respective past, present and future directors, officers, employees or agents of the entities described in (i) above, in each case in their respective capacities as such; and (iii) each of the heirs, executors, administrators, successors and assigns of any of the foregoing.

 

Abbott Indemnity Obligations” means all Liabilities to the extent such Liabilities relate to, arise out of or result from, directly or indirectly, any of the following items:

 

(i)            any Abbott Special Products Liability;

 



 

(ii)           any failure of Abbott or an Abbott Subsidiary or any other Person to pay, perform or otherwise promptly discharge any Abbott Special Products Liabilities in accordance with their terms, whether prior to, at or after the Effective Time;

 

(iii)          except as otherwise set forth in any applicable Special Products Ancillary Agreement, the conduct of any business, operation or activity by or on behalf of Abbott or an Abbott Subsidiary from and after the Effective Time with respect to Special Products; and

 

(iv)          any breach by Abbott or an Abbott Subsidiary of this Agreement or any Special Products Ancillary Agreement.

 

Abbott In-Licensed Intellectual Property” means any In-Licensed Intellectual Property Controlled by Abbott or any Abbott Subsidiary.

 

Abbott New Product Know-How” means any Know-How Controlled by Abbott or any Abbott Subsidiary to the extent such Know-How is related to the research, Development, Manufacture, use, or Commercialization of a New Product (but that does not also relate to a Special Product).

 

Abbott New Product Patents” means any Patent Controlled by Abbott or any Abbott Subsidiary that covers the Development, Manufacture, use or Commercialization of a New Product (but that does not also cover a Special Product).

 

Abbott Special Products Clinical Development Data” means, with respect to a given Special Product, any Clinical Development Data Controlled by Abbott or any Abbott Subsidiary and existing as of the Effective Time relating to such Special Product or generated by or on behalf of Abbott or any Abbott Subsidiary during the term of this Agreement in the course of conducting Clinical Development with respect to such Special Product.  Abbott Special Products Clinical Development Data does not include any Clinical Development Data that constitutes an AbbVie Special Products Asset and is conveyed to AbbVie or any of its Subsidiaries pursuant to the Separation Agreement.

 

Abbott Special Products Liabilities” means the Liabilities (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time) relating to, arising out of or resulting from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time relating to a Special Product, in each case that are not AbbVie Special Products Liabilities or AbbVie Indemnity Obligations.

 

Abbott Special Products Patents” means any Patent Controlled by Abbott or any Abbott Subsidiary that covers the Development, Manufacture, use or Commercialization of a Special Product.  Abbott Special Products Patents do not include any Patents that constitute AbbVie Special Products Assets and are conveyed to AbbVie or any of its Subsidiaries pursuant to the Separation Agreement.

 

2



 

Abbott Special Products Regulatory Documentation” means any Regulatory Documentation Controlled by Abbott or any Abbott Subsidiary to the extent such Regulatory Documentation relates to a Special Product.  Abbott Special Products Regulatory Documentation does not include any Regulatory Documentation that constitutes AbbVie Special Products Assets and is conveyed to AbbVie or any of its Subsidiaries pursuant to the Separation Agreement.

 

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

 

Abbott Territory” means anywhere in the world other than the AbbVie Territory.

 

AbbVie” has the meaning set forth in the Preamble.

 

AbbVie Indemnitees” means: (i) AbbVie and each AbbVie Subsidiary; (ii) each of the respective past, present and future directors, officers, employees or agents of the entities described in (i) above, in each case in their respective capacities as such; and (iii) each of the heirs, executors, administrators, successors and assigns of any of the foregoing.

 

AbbVie Indemnity Obligations” means all Liabilities to the extent such Liabilities relate to, arise out of or result from, directly or indirectly, any of the following items:

 

(i)            any AbbVie Special Products Liability;

 

(ii)           any failure of AbbVie or an AbbVie Subsidiary or any other Person to pay, perform or otherwise promptly discharge any AbbVie Special Products Liabilities in accordance with their terms, whether prior to, at or after the Effective Time;

 

(iii)          except as otherwise set forth in any applicable Special Products Ancillary Agreement, the conduct of any business, operation or activity by or on behalf of AbbVie or an AbbVie Subsidiary from and after the Effective Time with respect to Special Products; and

 

(iv)          any breach by AbbVie or an AbbVie Subsidiary of this Agreement or any Special Products Ancillary Agreement.

 

AbbVie In-Licensed Intellectual Property” means any In-Licensed Intellectual Property Controlled by AbbVie or any AbbVie Subsidiary.

 

AbbVie New Product Know-How” means any Know-How Controlled by AbbVie or any AbbVie Subsidiary to the extent such Know-How is related to the research, Development, Manufacture, use, or Commercialization of a New Product (but that does not also relate to a Special Product).

 

AbbVie New Product Patents” means any Patent Controlled by AbbVie or any AbbVie Subsidiary that covers the Development, Manufacture, use or Commercialization of a New Product (but that does not also cover a Special Product).

 

3



 

AbbVie Special Products Assets” has the meaning set forth in Section 2.01.

 

AbbVie Special Products Clinical Development Data” means, with respect to a given Special Product, any Clinical Development Data Controlled by AbbVie or any AbbVie Subsidiary and existing as of the Effective Time relating to such Special Product (including that Clinical Development Data that constitutes an AbbVie Special Products Asset and is conveyed to AbbVie or any of its Subsidiaries pursuant to the Separation Agreement) or generated by or on behalf of AbbVie or any AbbVie Subsidiary during the term of this Agreement in the course of conducting Clinical Development with respect to such Special Product.

 

AbbVie Special Products Liabilities” means the Liabilities (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time) relating to, arising out of or resulting from (i) actions, inactions, or omissions by or on behalf of Abbott or any Abbott Subsidiary occurring or existing prior to the Effective Time, or (ii) conditions, events, facts or circumstances occurring or existing prior to the Effective Time, in each of clauses (i) and (ii) with respect to: (A) the AbbVie Special Products Assets; (B) the Commercialization of, or in connection with the Commercialization of, a Special Product in the AbbVie Territory; (C) the provision of a Special Product pursuant to a compassionate use, patient name or similar program in both the AbbVie Territory and the Abbott Territory; (D) the Manufacture of, or in connection with the Manufacture of, a Special Product at a site transferred to AbbVie or an AbbVie Subsidiary or held by a Transferred Entity as part of the Separation; or (E) the Development of, or in connection with the Development of, a Special Product at a site transferred to AbbVie or an AbbVie Subsidiary or held by a Transferred Entity as part of the Separation.

 

AbbVie Special Products Patents” means any Patent Controlled by AbbVie or any AbbVie Subsidiary that covers the Development, Manufacture, use or Commercialization of a Special Product, including those Patents that constitute AbbVie Special Products Assets and are conveyed to AbbVie or any of its Subsidiaries pursuant to the Separation Agreement.

 

AbbVie Special Products Regulatory Documentation” means any Regulatory Documentation Controlled by AbbVie or any AbbVie Subsidiary to the extent such Regulatory Documentation relates to a Special Product, including that Regulatory Documentation that constitutes an AbbVie Special Products Asset and is conveyed to AbbVie or any of its Subsidiaries pursuant to the Separation Agreement.

 

AbbVie Subsidiary” means any Business Entity that is a Subsidiary of AbbVie prior to, at, 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.

 

AbbVie Territory” means: (i) for all Special Products other than Luvox®, Advicor® and Simcor®, the United States; (ii) for Luvox®, Japan; and (iii) for Advicor® and Simcor®, the entire world except Canada.

 

4



 

Act” means the United States Federal Food, Drug, and Cosmetic Act, as amended, and the rules, regulations, guidelines, guidances and requirements promulgated thereunder, as may be in effect from time to time.

 

ADR” has the meaning set forth in Section 12.01(a).

 

Affiliate” (including, with a correlative meaning, “affiliated”) means, when used with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person.  For the purpose of this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”), when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise.  The Parties agree that, prior to, at or after the Effective Time and for purposes of this Agreement and the Special Products Ancillary Agreements, neither AbbVie nor any of the AbbVie Subsidiaries, including the Transferred Entities (as defined in the Separation Agreement), shall be deemed to be an Affiliate of Abbott or any of the Abbott Subsidiaries, and neither Abbott nor any of the Abbott Subsidiaries shall be deemed to be an Affiliate of AbbVie or any of the AbbVie Subsidiaries.

 

Agreement” means this Special Products Master Agreement and each of the Schedules and Exhibits hereto.

 

Ancillary Agreement” has the meaning set forth in the Separation Agreement.

 

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

 

Clinical Development” means those pre-clinical and clinical activities, including post Regulatory Approval studies that are necessary or reasonably useful to obtain or maintain Regulatory Approval for a product for an indication, including testing in animals for purposes of obtaining or maintaining a Regulatory Approval.

 

Clinical Development Data” means all data and results (including pre-clinical and clinical trial results) generated by or on behalf of either Party, or their respective Subsidiaries, from the conduct of Clinical Development whether prior to or after the Effective Time.

 

Commercialization” means, with respect to a Special Product or New Prod