EX-10.2 3 d381653dex102.htm FORM OF TRANSITIONAL SERVICES AGREEMENT FORM OF TRANSITIONAL SERVICES AGREEMENT
Exhibit 10.2
FORM OF TRANSITIONAL SERVICES AGREEMENT
This Transitional Services Agreement (this “Agreement”) is entered into this day of , 201[ ] by and between PFIZER INC., a Delaware corporation (“Pfizer”) and Zoetis Inc., a Delaware corporation (the “Company”) (each, a “Party” and collectively, the “Parties”).
ARTICLE I
“Breaching Party” shall have the meaning set forth in Section 4.2(c).
“Costs” means Internal Costs and Third Party Costs, collectively.
“Effective Date” shall have the meaning set forth for such term in the Separation Agreement.
“EU VAT Directive” shall mean Council Directive 2006/112/EC.
“Excluded Services” shall have the meaning set forth in Section 2.1.
“Exit Plan” shall have the meaning set forth in Section 2.8.
“Information System Addition” shall have the meaning set forth in Section 2.3(b).
“Internal Costs” means all FTE (full time equivalent) rates for employees of Pfizer or its Affiliates in the provision of the Services, together with overhead costs and other relevant indirect internal costs attributable to the performance of the Services, collectively.
“Monthly Service Fee” shall have the meaning set forth in Section 5.1(a).
“Non-Breaching Party” shall have the meaning set forth in Section 4.2(c).
“Pfizer Managed Control or Process” shall have the meaning set forth in Section 2.11.
“Proceeding” shall have the meaning set forth in Section 9.1.
“Service Change” shall have the meaning set forth in Section 2.5(b).
“Service Exit Costs” means any Costs reasonably incurred by Pfizer or its Affiliates in planning and executing the migration of Services to the Company or a third party service provider, including joint migration planning, data extraction, final data migration, and de-commissioning or removal of any Information System Addition.
“Service Fee” shall have the meaning set forth in Section 5.1(a).
“Service Functional Lead” shall have the meaning set forth in Section 2.4.
“Service Noncompliance” shall mean Pfizer’s failure to provide the Services in the manner set forth in Section 2.2(a) after receipt of written notice from the Company specifying the details of such noncompliance and Pfizer’s failure to cure such noncompliance as soon as reasonably practicable but not later than fifteen (15) Business Days after Pfizer’s receipt of such notice; provided, that notwithstanding the foregoing, a Service Noncompliance shall not be deemed to occur if and to the extent Pfizer is not able to provide the Services as a result of (i) acts, omissions or contingencies not under its control or (ii) the Company’s breach of this Agreement.
“Services” shall have the meaning set forth in Section 2.1.
“Set-Up Costs” means any Costs incurred by Pfizer or its Affiliates after the date hereof in connection with preparation activities reasonably required to make the Services available to the Company.
“Term” shall have the meaning set forth in Section 4.1.
“Third-Party Costs” means all payments to Third Parties, other Third-Party costs or fees, and any other out-of-pocket expenses reasonably determined to be attributable to the provision of the Services.
“TSA Executive” shall have the meaning set forth in Section 2.4.
“TSA Manager” shall have the meaning set forth in Section 2.4.
“VAT” shall mean, in relation to any jurisdiction within the European Union, the value added tax provided for in the EU VAT Directive and charged under the provisions of any national legislation implementing that directive or Directive 77/388/EEC together with legislation supplemental thereto and, in relation to any other jurisdiction, the equivalent Tax (if any) in that jurisdiction.
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ARTICLE II
SERVICES; STANDARD OF PERFORMANCE
SECTION 2.2 Standard and Manner of Performance.
(a) Pfizer shall provide the Services with reasonable skill and care. Notwithstanding the foregoing and without limiting any other provision of this Agreement (including any schedule, exhibit or appendix hereto) unless otherwise agreed by the Parties in writing, the standard of care for provision of Services shall be no less than the level of skill and care as is currently being provided to the Animal Health Business and has been provided in the twelve (12) months preceding the Effective Date.
(b) Pfizer shall have the right to perform its obligations under this Agreement through one or more of its Affiliates, and each of the foregoing may hire third party service providers, subcontractors and consultants to perform any of Pfizer’s obligations hereunder, including to provide all or part of any Service hereunder; provided, however, that Pfizer shall in all cases retain responsibility for the provision to the Company Group of the Services in accordance with this Agreement.
(c) As between the Parties, except as otherwise agreed by the Parties in writing, Pfizer shall have sole discretion and authority with respect to designating, employing, assigning, compensating and discharging personnel and third party service providers in
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connection with performance of the Services. All such personnel and third party service providers so assigned to perform the Services shall be appropriately skilled and qualified to do so as reasonably determined by Pfizer.
(d) Notwithstanding anything to the contrary herein, no member of the Pfizer Group shall be required to expand or modify any facilities, incur any capital expenditures, acquire any additional equipment or software or retain any specific personnel or third party service providers in connection with its obligation to provide Services hereunder.
SECTION 2.3 Protection of Pfizer Information Systems.
(a) In providing information technology Services to the Company Group, Pfizer shall have the right to implement reasonable processes under which there will be no greater threat to Pfizer’s information technology operating environment than would exist in the absence of the provision of such Services.
(b) If, in connection with the provision of any Services under this Agreement, Pfizer implements any information technology connections, firewalls or the like (“Information System Additions”) specifically in connection with the provision of such Services and that would not have otherwise been implemented in the absence of the provision of the Services, the costs of implementing such measures shall be borne by the Company, unless specifically provided otherwise in a schedule, exhibit or appendix hereto or otherwise agreed to in writing by Pfizer.
(a) Pfizer shall be required to provide the Services only for the benefit of the members of the Company Group, only to the same scope, and only for the same volume of
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(b) To the extent that either Party desires a change to the term and/or scope of a Service (a “Service Change”) and such proposed Service Change is not governed by the foregoing Section 2.5(a), such Party may submit such proposed Service Change in writing to the TSA Manager of the other Party. Any Service Change may only be implemented upon the mutual written consent of both Parties (including, if applicable, an agreement in writing by both Parties of the increase or decrease in costs for such Service Change).
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parties. Additionally, all members of the Company Group shall cooperate with and assist Pfizer in obtaining any consent, authorization, order or approval of, or any exemption by, any third party required to be obtained or made by Pfizer (or its Affiliates or third party service providers or subcontractors) for the performance of Pfizer’s obligations under this Agreement; provided that neither Party shall be obligated to incur any cost to obtain any such consent, authorization, order, approval or exemption, except that if any monies must be expended to pay for a consent, authorization, order, approval or exemption, or for the assignment of or for the purchase of any Intellectual Property or other assets to provide the Services to the Company Group, such costs shall be borne by the Company. If Pfizer is unable to obtain any required consents, authorizations, orders, approvals or exemptions, the Parties shall use commercially reasonable efforts to (a) negotiate in good faith reasonable modifications of the Services such that such consents, authorizations, orders, approvals or exemptions are not required and (b) implement such modifications. Pfizer will not be in breach of this Agreement as a result of any non-performance of, or other effect upon, any applicable Services as a result of any failure to obtain any such consent, so long as it has otherwise complied with this Section 2.7. For the avoidance of doubt, if any consent, authorization, order, approval or exemption is required to be obtained or made with respect to any third party relationship for the receipt of Services, the Company shall be solely responsible for obtaining any such consent, authorization, order, approval or exemption, at its sole cost and expense.
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(a) The Company agrees that it shall timely provide to the Pfizer Group, at no cost to Pfizer, access to such personnel, facilities, assets and information, books and records of the Company Group, and provide timely decisions, approvals and acceptances, in each case as may be reasonably necessary to enable Pfizer to perform its obligations under this Agreement in a timely and efficient manner.
(b) Without limiting the foregoing in this Section 2.9, each Party shall use commercially reasonable efforts to cooperate with the other Party in all matters relating to the provision and receipt of the Services and to minimize the expense, distraction and disturbance to each Party, and shall perform all obligations hereunder timely and in good faith and in accordance with principles of fair dealing. Such cooperation shall include (i) the execution and delivery of such further instruments or documents as may be reasonably requested by the other Party to enable the full performance of each Party’s obligations hereunder and (ii) notification of the other Party in advance of any changes to a Party’s operating environment or personnel, and working with the other Party to minimize the effect of such changes.
(a) The Services provided hereunder may be provided to all members of the Company Group and the receipt of the Services may involve the Company Group’s third party service providers, subcontractors and consultants. The Company shall be responsible for its Affiliates’, and its and their third party service providers’, subcontractors’ and consultants’, compliance with the terms and conditions of this Agreement.
(b) The Company acknowledges and agrees that Pfizer shall not, and may refuse to, provide any Service to the extent that the provision of such Service would require any member of the Pfizer Group, or any of its directors, officers, employees, agents or Subsidiaries, to violate (i) any applicable Laws (including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010) or (ii) any Pfizer policies and/or procedures. Pfizer and the Company shall at all times comply with all applicable Laws in connection with the Services.
(c) Unless otherwise agreed by the Parties in writing, the Company shall and shall cause each member of the Company Group receiving Services hereunder to follow the policies, procedures and practices with respect to the Services followed by Pfizer, including those in effect immediately prior to the Effective Date and any changes to such policies, procedures and practices required due to changes in applicable Law (or changes in the interpretation or enforcement of applicable Law) or due to the Separation following the Separation. Without limiting the foregoing, the Company shall and shall cause each member of the Company Group receiving Services hereunder to continue to follow Pfizer Corporate Policy 202 (Anti-Bribery and Anti-Corruption), Pfizer Corporate Procedure 215 (International Anti-Bribery and Anti-Corruption) and any local implementing Standard Operating Procedures (“SOPs”) with respect to the Services. Where the Company or any member of the Company Group lacks access to specific Pfizer systems or resources identified in Pfizer Corporate Procedure 215 or implementing SOPs, the Company shall make reasonable efforts to create and maintain substitute systems or resources. Without limiting the foregoing, in connection with Services related to reimbursement of personnel time or expenses, the Company agrees that it shall audit and monitor such reimbursements for improper activity. Without limiting the
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foregoing, the Company shall comply with all Pfizer policies, procedures and regulations relating to continuity of business, computer and network security measures and data encryption, including any security requirements reasonably requested by Pfizer. The Company shall comply with and shall cause each member of the Company Group to comply at all times with all applicable Laws in connection with the Services and the operation of the AH Business from and after the Effective Date.
(d) During the Term, the Company shall not incorporate in any database to which the Company is provided with access hereunder any data or other information regarding any compounds that are owned by, or otherwise subject to the rights of, any Third Party.
(e) Prior to the Distribution, if effected, the Parties shall discuss in good faith, any amendments or modifications of this Section 2.10 reasonably requested by either the Company or Pfizer in light of the Services then being performed and the relevant compliance policies and procedures adopted and implemented by the Company.
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agreed to by Pfizer in advance in writing in each instance, and, if any such remediation or modification (to the extent so agreed by Pfizer) is primarily for the benefit of the Company, the Company shall reimburse any Costs incurred by Pfizer or its Affiliates in connection therewith.
ARTICLE III
ARTICLE IV
(a) Any Service may be terminated, in whole or in part, by either Party by obtaining the written agreement of the other Party.
(b) The Company may terminate, in whole only, the provision of any Service by notifying Pfizer in writing at least ninety (90) days (or any longer period that may be set forth in Exhibit A with respect to a given Service) in advance of such termination; provided, however, that, except as specifically provided otherwise in a schedule, exhibit or appendix hereto, no such notice may be given until the sixtieth (60th) day following the Effective Date. For clarity, partial reduction in the provision of any Service may only be made with the prior written consent of Pfizer pursuant to Section 4.2(a).
(c) Either Party (the “Non-Breaching Party”) may terminate this Agreement at any time upon prior written notice to the other Party (the “Breaching Party”) if the Breaching Party has failed (other than pursuant to Section 10.8) to perform any of its material obligations under this Agreement, and such failure shall have continued without cure for a period of thirty (30) days (or with respect to any failure by the Company to make any payment as provided for under this Agreement five (5) days) after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate this Agreement. For the avoidance of doubt, the Company’s obligations under Section 2.10 shall be deemed to be material obligations under this Agreement.
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SECTION 4.3 Effect of Expiration and Termination; Accrued Rights; Survival.
(a) Expiration and termination of this Agreement, in part or in its entirety, shall not extinguish any rights or obligations that have accrued to the benefit of either Party prior to such expiration or termination (as applicable), including any rights of Pfizer to receive payment under Section 5.1 hereof.
(b) The following provisions of this Agreement, together with all other provisions of this Agreement that expressly specify that they survive, shall survive expiration and termination of this Agreement, in part or in its entirety: Article III, Article VIII, Article IX and Article X, and Sections 4.3, 5.2, and 7.1. For the avoidance of doubt, Pfizer shall be under no obligation to provide any technical support for any migrated data, systems or applications following the termination date of any Service in respect thereof except to the extent that the need for technical support is a direct result of Pfizer’s breach of this Agreement.
ARTICLE V
(a) The Company shall pay to Pfizer in accordance with the terms of this Agreement: (i) the Set-Up Costs, (ii) the Service Exit Costs, and (iii) a monthly fee for each Service provided to the Company and its Affiliates hereunder in accordance with the charges for such Service set forth in Exhibit A (the “Monthly Service Fees”, and together with the Set-Up Costs, Service Exit Costs, the “Service Fees”). To the extent that any Third-Party Costs are not reflected in Pfizer’s calculation of the Service Fee under this Section 5.1(a), such Third-Party Costs shall be in addition to the Service Fee. For clarity, all Third-Party Costs will be passed through to the Company at Pfizer’s or its Affiliates’ cost without markup in accordance with this Article V.
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reasonably incurred by Pfizer to hire or retain necessary employees to provide Services, which costs shall be for the account of the Company and shall be reimbursed by the Company to Pfizer in accordance with Section 5.1(a), Section 6.1, and Section 6.2, and shall be subject to prior written approval of the Company if they exceed $50,000 individually or $250,000 in the aggregate.
(c) Unless otherwise agreed by the Parties in writing, if following the second anniversary of the Effective Date, the Company requests that the Term of a Service be extended for three (3) months or more, or the Company fails to exit a Service upon the expiration of the Term of such Service, then all Service Fees payable on or after the original termination date of, and with respect to, such Service, shall be subject to a ten percent (10%) surcharge for six (6) months and a fifteen percent (15%) surcharge thereafter. For the avoidance of doubt, such surcharge shall also be applied to any xxxx-up on Internal Costs pursuant to Section 5.1(b). This Section 5.1(c) shall not be construed to create any obligation on Pfizer to provide any Service beyond the Term of such Service set forth on Exhibit A.
(a) Service Fees set forth on Exhibit A are exclusive of any VAT chargeable with respect to the supply of the Services to the Company or a member of the Company Group under this Agreement, and VAT, as appropriate, shall be added to the amount invoiced pursuant to this Agreement. In the event of any amendment to VAT legislation or for any other reason the sums invoiced without VAT in accordance with this Agreement become or are subject to VAT, then the applicable invoices shall be deemed to be exclusive of VAT (if any) and the Company or the member of the Company Group receiving such invoices shall, in addition to the sums payable, pay Pfizer, or its invoicing Affiliate, on receipt of a valid VAT invoice, the full amount of VAT chargeable thereon.
(b) The Company or the applicable member of the Company Group shall be responsible for all goods and services, value added, sales, use, gross receipts, business, consumption and other similar taxes, levies and charges (other than income taxes) imposed by applicable taxing authorities attributable to the supply of Services to the Company Group or any payment hereunder, whether or not such taxes, levies or charges are shown on any invoices. If Pfizer or its applicable Affiliate is required to pay any part of such taxes, levies or charges, the Company shall, or shall cause the applicable member of the Company Group to, reimburse Pfizer or its applicable Affiliate for such taxes, levies and charges.
(c) In the event that applicable Law requires that an amount in respect of any taxes, levies or charges be withheld from any payment by the Company (or the applicable member of the Company Group) to Pfizer (or its applicable Affiliate) under this Agreement the amount payable to Pfizer (or its applicable Affiliate) shall be increased as necessary so that, after the Company (or the applicable member of the Company Group) has withheld amounts required by applicable Law, Pfizer (or its applicable Affiliate) receives an amount equal to the amount it would have received had no such withholding been required, and the Company (or the applicable member of the Company Group) shall withhold such taxes, levies or charges and pay such withheld amounts over to the applicable taxing authority in accordance with the requirements of the applicable Law and provide Pfizer (or its applicable Affiliate) with a receipt confirming such
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payment. Pfizer shall reasonably cooperate with the Company to determine whether any such deduction or withholding applies to the Services, and if so, shall further reasonably cooperate to minimize applicable withholding taxes.
(d) Each Party shall, and shall use commercially reasonable efforts to cause all members of its respective Group to, cooperate and reach mutual agreement with the other Party in all matters relating to (i) identification of the jurisdiction(s) in which each Service provided under this Agreement is performed or received, (ii) any allocation required by applicable Law between the site of performance and the site of receipt with respect to each such Service and (iii) timely notifying the other Party with respect to any changes to such jurisdiction(s) with respect to each such Service. Further, Pfizer and the Company will reasonably cooperate with one another to reduce any applicable withholding Tax to the extent allowed under applicable Law.
(e) Cross-border Services to be performed hereunder may fall within Article 44 of the EU VAT Directive or the relevant equivalent national provision or any similar provision applying outside the European Union, such that the Company (or the applicable member of the Company Group), and not Pfizer nor its applicable Affiliate, is obliged to account for VAT chargeable in relation to the Services. In such case, the Company hereby agrees that with respect to each applicable jurisdiction, the Company will itself, or will cause the applicable member of the Company Group to, account for VAT in its own jurisdiction on the performance of such cross-border Services made to it hereunder and that Pfizer will (to the extent legally possible), or will cause its applicable Affiliate to (to the extent legally possible), issue invoices without local VAT. The Company agrees that with respect to each such jurisdiction, the Company will, or will cause the applicable member of the Company Group to, provide on request to Pfizer or the invoicing Affiliate of Pfizer, a valid VAT registration number and certificate (or equivalent documentation) in the jurisdiction with respect to the receipt of such cross-border Services.
ARTICLE VI
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ARTICLE VII
INTELLECTUAL PROPERTY AND DATA
SECTION 7.1 Ownership of Intellectual Property and Data.
(a) Pfizer shall be the sole and exclusive owner of all Intellectual Property that it or any member of the Pfizer Group, or any of its or their third party service providers, subcontractors and consultants, creates under this Agreement, including any modifications to its systems and software, and any Intellectual Property created in performance of the Services (except as expressly provided in Section 7.1(b)). The Company shall be the sole and exclusive owner of all Intellectual Property it creates under this Agreement.
(b) All data collected or created pursuant to a Service and on behalf of the Company shall be owned by the Company, except that Pfizer shall own technical data generated or created in providing the Services that relate to the operation of Pfizer’s business infrastructure.
(c) To the extent that any right, title or interest in or to any Intellectual Property or data vests in a member of a Group, by operation of law or otherwise, in a manner contrary to the agreed upon ownership as set forth in this Agreement, either Pfizer or the Company, as applicable, shall, and hereby does, on behalf of itself and such member of its Group, perpetually and irrevocably assign to the other Party or a member of such Party’s Group any and all such right, title and interest throughout the world in and to such Intellectual Property and data, free and clear of all liens and encumbrances, without the need for any further action by any Group. Except as set forth in Section 7.1(a) and Section 7.1(b), Pfizer, on the one hand, and the Company, on the other hand, retains all right, title and interest in and to their respective Intellectual Property and data, and no other license or other right, express or implied, is granted to any member of either Group to the other Group’s intellectual property or data under this Agreement.
(a) Pfizer hereby grants to the Company Group a non-exclusive, non-sublicensable, non-transferable, limited license to use during the Term the Intellectual Property provided by Pfizer to the Company Group under this Agreement, solely to the extent required to receive the Services.
(b) The Company hereby grants to the Pfizer Group a non-exclusive, non-sublicensable, non-transferable, limited license to use during the Term the Intellectual Property provided to the Pfizer Group by the Company under this Agreement, solely to the extent required to provide the Services.
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ARTICLE VIII
LIMITATIONS OF LIABILITY; THIRD PARTY CLAIMS
SECTION 8.1 Limitations of Liability.
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OR IN THE SEPARATION AGREEMENT OR IN ANY OTHER ANCILLARY AGREEMENT, NEITHER PARTY MAKES ANY EXPRESS REPRESENTATIONS OR WARRANTIES, AND NO REPRESENTATION OR WARRANTY SHALL BE IMPLIED UNDER THIS AGREEMENT OR AT LAW, WITH RESPECT TO THIS AGREEMENT, THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT OR OTHERWISE, INCLUDING WARRANTIES OF HABITABILITY, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, NON-INFRINGEMENT, VALIDITY AND ENFORCEABILITY, AND ALL OTHER WARRANTIES ARISING UNDER THE UNIFORM COMMERCIAL CODE (OR SIMILAR FOREIGN LAWS).
ARTICLE IX
ARTICLE X
SECTION 10.1 Counterparts; Entire Agreement; Corporate Power.
(a) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party. Execution of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic copy of a signature shall be deemed to be, and shall have the same effect as, executed by an original signature.
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(b) This Agreement, the Separation Agreement, the other Ancillary Agreements, and the exhibits, the schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter. There are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein or therein.
(c) In the event of any inconsistency between this Agreement and the R&D Agreement, to the extent such conflict relates to or is in connection with (i) intellectual property ownership, (ii) intellectual property access or use rights, or (iii) confidentiality, the R&D Agreement shall control. In the event of any inconsistency between this Agreement and any exhibit, schedule or appendix hereto the provisions of the exhibit, schedule or appendix will control.
SECTION 10.3 Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the Laws (other than Section 5–1401 and 5–1402 of the New York General Obligations Law) of the State of New York.
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If to Pfizer, to:
Pfizer Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Executive Vice President and General Counsel
with a copy to:
[ ]
If to the Company to:
Zoetis Inc.
[ ]
with a copy to:
[ ]
Any Party may, by notice to the other Party, change the address to which such notices are to be given.
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SECTION 10.15 Submission to Jurisdiction; Waivers. With respect to any Action relating to or arising out of this Agreement, subject to the provisions of ARTICLE IX, each Party to this Agreement irrevocably (a) consents and submits to the exclusive jurisdiction of the courts of the State of New York and any court of the United States located in the Borough of Manhattan in New York City, (b) waives any objection which such Party may have at any time to the laying of venue of any Proceeding brought in any such court, waives any claim that such Proceeding has been brought in an inconvenient forum and further waives the right to object, with respect to such Proceeding, that such court does not have jurisdiction over such Party and (c) consents to the service of process at the address set forth for notices in Section 10.6; provided, however, that such manner of service of process shall not preclude the service of process in any other manner permitted under applicable Law.
[Signature page follows.]
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IN WITNESS WHEREOF, the Parties have caused this Transitional Services Agreement to be executed by their duly authorized representatives.
PFIZER INC. | ||
By: |
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Name: | ||
Title: | ||
ZOETIS INC. | ||
By: |
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Name: | ||
Title: |
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