TRANSITION SERVICES AGREEMENT

 

 

                          TRANSITION SERVICES AGREEMENT

 

      This Transition Services Agreement (the "Agreement") is entered into as of

May 1, 2005 by and between Hospira, Inc., a Delaware corporation ("Hospira"),

and ICU Medical (Utah), Inc., a Delaware corporation ("Medical").

 

                                    RECITALS

 

      A. Hospira and ICU Medical, Inc., a Delaware corporation ("ICU") have

entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") dated

as of February 25, 2005, providing for the purchase by ICU of certain assets of

Hospira, and a Manufacturing, Commercialization and Development Agreement (the

"MCDA") dated as of February 25, 2005, providing for, among other things, the

manufacture of certain products by ICU and the sale of such products to Hospira.

 

      B. Pursuant to the Assignment and Assumption Agreement dated February 25,

2005, ICU has assigned, granted, sold, conveyed and transferred all of its

right, title and interest in and to the Asset Purchase Agreement and the MCDA to

Medical, ICU's wholly-owned subsidiary, and Medical has assumed and agreed to

observe and perform all of the duties, terms, provisions and covenants in

connection therewith.

 

      C. This Agreement is one of the "Transaction Documents" contemplated by

the Asset Purchase Agreement, and the Closing under the Asset Purchase Agreement

is occurring simultaneously with the delivery of this Agreement.

 

      D. To ensure that the Acquired Assets are transferred to Medical in an

orderly fashion and that the Parties are able to perform under the MCDA as

required, Hospira and Medical wish to provide for certain transition services on

the terms set forth herein.

 

      NOW, THEREFORE, in consideration of the covenants contained herein, in the

Asset Purchase Agreement and in the MCDA, and for other good and valuable

consideration, the receipt and adequacy of which are hereby acknowledged, the

Parties agree as follows:

 

                             ARTICLE I DEFINITIONS.

 

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

following meanings:

 

      1.1 "Agreement" has the meaning set forth in the Preamble.

 

      1.2 "Asset Purchase Agreement" has the meaning set forth in the Recitals.

 

      1.3 "Business Entity" means any corporation, general or limited

partnership, trust, joint venture, unincorporated organization, limited

liability entity or other entity.

 

      1.4 "Charge" and "Charges" have the meanings set forth in Section 2.4.

 

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      1.5 "Facility" has the meaning set forth in the MCDA

 

      1.6 "FBEC" shall mean the Fully Burdened Employee Cost and shall equal the

cost of the applicable employee including payroll, bonuses, fringe benefits,

travel, depreciation of personal computers, floor space, communication charges

and other applicable costs in accordance with Hospira's historical practices.

The total FBEC shall not exceed two times the base compensation for the

applicable employee.

 

      1.7 "Governmental Body" - means any: nation, state, county, city, town or

other jurisdiction; federal, state, local municipal, foreign or other

government; or governmental or quasi-governmental authority, including any

agency, branch, department, board, commission, court, tribunal, other entity or

official exercising governmental or quasi-governmental authority.

 

      1.8 "Hospira" has the meaning set forth in the Preamble.

 

      1.9 "Hospira Subsidiary" means any Subsidiary of Hospira.

 

      1.10 "ICU" has the meaning set forth in the Recitals.

 

      1.11 "ICU Subsidiary" means any Subsidiary of ICU.

 

      1.12 "Information" means information, whether or not patentable or

copyrightable, in written, oral, electronic or other tangible or intangible

forms, including studies, reports, records, books, contracts, instruments,

surveys, discoveries, ideas, concepts, know-how, techniques, designs,

specifications, drawings, blueprints, diagrams, models, prototypes, samples,

flow charts, data, computer data, disks, diskettes, tapes, computer programs or

other software, marketing plans, customer names, communications by or to

attorneys (including attorney-client privileged communications), memos and other

materials prepared by attorneys or under their direction (including attorney

work product), and other technical, financial, employee or business information

or data.

 

      1.13 "Initial Services" has the meaning set forth in Section 2.1.

 

      1.14 "MCDA" has the meaning set forth in the Recitals hereto.

 

      1.15 "Medical" has the meaning set forth in the Preamble.

 

      1.16 "Person" means any: (i) individual; (ii) Business Entity; or (iii)

Governmental Authority.

 

      1.17 "Parties" means Medical and Hospira.

 

      1.18 "Prime Rate" means the rate which Citibank N.A. (or its successor or

another major money center commercial bank agreed to by the Parties) announces

as its prime lending rate, as in effect from time to time.

 

      1.19 "Provider" means, with respect to any Service, the entity or entities

identified on the applicable Schedule as the "Provider."

 

 

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      1.20 "Provider Indemnities" has the meaning set forth in Section 5.3.

 

      1.21 "Purchaser" means, with respect to any Service, the entity or

entities identified on the applicable Schedule as the "Purchaser."

 

       1.22 "Service Term" means, with respect to any Service, the term specified

on the Schedule applicable to such Service.

 

      1.23 "Services" has the meaning set forth in Section 2.2.

 

      1.24 "Subsidiary" of any Party means another Business Entity that is

directly or indirectly controlled by such Party. As used herein, "control" means

the possession, directly or indirectly, of the power to direct or cause the

direction of the management and policies of such Business Entity, whether

through ownership of voting securities or other interests, by contract or

otherwise.

 

      1.25 "Third Party" means any Person other than Medical, ICU, any ICU

Subsidiary, Hospira and any Hospira Subsidiary.

 

                              ARTICLE II SERVICES.

 

      2.1 Initial Services. Commencing on the date hereof, the Party designated

as the Provider on the Schedules hereto agrees to provide, or with respect to

any service to be provided by a Subsidiary of such Party, to cause such

Subsidiary to provide, to the Party designated as the Purchaser on the Schedules

hereto, or with respect to any service to be provided to a Subsidiary of such

Party, to such Subsidiary, the applicable services (the "Initial Services") set

forth on TSA #1 through TSA #19 attached hereto.

 

       2.2 Additional Services. From time to time after the date hereof, the

Parties may identify additional services that one Party will provide to the

other Party in accordance with the terms of this Agreement (the "Additional

Services" and, together with the Initial Services, the "Services"). The Parties

shall cooperate and act in good faith to create a Schedule for each Additional

Service on commercially reasonable terms. Notwithstanding the foregoing, neither

Party shall have any obligation to agree to provide Additional Services until a

Schedule for such Additional Services has been agreed to by the Parties in

writing.

 

      2.3 Performance Of Services.

 

            (a) Each Provider shall perform, or cause its Subsidiaries to

      perform, all Services to be provided by such Provider in a commercially

      reasonable manner.

 

            (b) Neither Provider nor any of its Subsidiaries shall be liable or

      held accountable, in damages or otherwise, for any error of judgment or

      any mistake of fact or law or for anything that the Provider or any of its

      Subsidiaries does or refrains from doing in good faith hereunder, except

      in the case of its gross negligence or willful misconduct, and except that

      Medical shall perform the Design-a-Set for Pumps services to be provided

      by Medical to Hospira in conformity and subject to the provisions of

      Sections 3.4, 3.5 and 3.6 of the MCDA.

 

 

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            (c) Nothing in this Agreement shall require a Provider to perform or

      cause to be performed any Service in a manner that would constitute a

      violation of applicable laws.

 

            (d) Neither Provider nor any of its Subsidiaries will be required to

      perform or to cause to be performed any of the Services for the benefit of

      any Third Party or any other Person other than the applicable Purchaser or

      its Subsidiaries.

 

      2.4 Charges For Services. The charges for each Service, if any, shall be

determined as set forth on the applicable Schedule (each a "Charge" and together

the "Charges").

 

      2.5 Changes To Services. Except as provided in Section 2.8 below, each

Provider may make changes from time to time in the manner of performing the

Services if such Provider is making similar changes in performing analogous

services for itself and if such Provider furnishes to the applicable Purchaser

substantially the same notice (in content and timing) as such Provider shall

furnish to its own organization respecting such changes. No such change shall

affect the Charges for the applicable Service.

 

      2.6 Transitional Nature Of Services. The Parties acknowledge the

transitional nature of the Services and agree to cooperate in good faith and to

use commercially reasonable efforts to effectuate a smooth transition of the

Services from the Provider to the Purchaser (or its designee).

 

      2.7 Cooperation. In the event that (i) there is nonperformance of any

Service as a result of an event described in Section 5.4, or (ii) the provision

of a Service would violate applicable law, the