Exhibit 10.25
DISTRIBUTION
AGREEMENT
March 10, 2005
This Distribution Agreement (“
Agreement ”) is entered into as of the date first set
forth above (the “ Effective Date ”), between
CoTherix, Inc., a Delaware corporation, having its principal place
of business at 5000 Shoreline Court, Suite 101 South San Francisco,
CA 94080 (“ Client ”), and Cardinal Health PTS,
LLC, a Delaware limited liability company, by and through its
Specialty Pharmaceutical Services group with offices at 15 Ingram
Boulevard, Suite 100, LaVergne, TN 37086 (“ Cardinal
Health ”).
A. Client is, among other things, in
the business of developing and marketing pharmaceutical products in
the United States of America, including the District of Columbia
(the “ Territory ”).
B. Cardinal Health is, among other
things, in the business of distributing pharmaceutical products to
wholesalers, specialty distributors, physicians, clinics,
hospitals, pharmacies, and other health care providers in the
Territory, and of providing information systems and other services
that support its customers’ use of its distribution
capabilities.
C. Client desires to engage Cardinal
Health as its exclusive distribution agent for commercial sales of
Ventavis ® (iloprost) inhalation solution in all
formulations (collectively referred to as the “
Product ”) in the Territory and to perform certain
other services described in this Agreement, all upon the terms and
conditions set forth in this Agreement.
THEREFORE, in consideration of the
mutual conditions and covenants set forth herein, Cardinal Health
and Client (collectively referred to as “ Party
” or “ Parties ”) agree as
follows:
1.
Appointment/Authorization .
1.1 Subject to the terms and
conditions set forth in this Agreement, Client appoints Cardinal
Health, and Cardinal Health accepts the appointment, as
Client’s exclusive distribution agent of the Product in the
Territory to Client’s specialty distributors, which may be
amended by the Client from time to time (collectively, “
Customers ”). Cardinal Health is authorized only to
distribute the Product to such Customers. Cardinal Health
acknowledges that Client will be entering into separate
arrangements with the Customers to distribute the Product to third
parties. Client’s appointment of Cardinal Health as its
exclusive distribution agent to the Customers shall not be deemed
as Client providing Cardinal Health with any rights regarding the
Customers’ ability to distribute the Product pursuant to the
terms of the agreement(s) between Client and such Customer.
Furthermore, Cardinal Health shall not be deemed to be a third
party beneficiary of any such agreement(s) between Client and such
Customer.
1.2 Client shall provide Cardinal
Health with a right of first negotiation with respect to the
distribution of new pharmaceutical products acquired or promoted by
Client in the Territory after the Effective Date, which right shall
be exclusive, for a period of thirty (30) days after Client’s
notice to Cardinal Health that it plans to make such new product
available for distribution. If the parties have not concluded a
definitive agreement with respect to the distribution of the new
product within thirty (30) days from the date of Client’s
notice or if Cardinal Health notifies Client in writing at any
point during such negotiation period that it is not interested or
is unable to distribute such new product(s), then Client shall have
no further obligation with respect to that new product under this
Section 1.2. After the
expiration of the thirty-day exclusivity period,
Client shall provide written notice to Cardinal Health that the
period has expired.
2. Services
.
2.1 Cardinal Health shall provide
the services set forth in the Operating Guidelines, which include,
without limitation, storage, distribution, returns, customer
support, financial support, EDI and system access support (“
Services ”). A copy of the Operating Guidelines is
attached hereto as Exhibit A and incorporated by
reference.
2.2 The Operating Guidelines may be
amended from time to time upon the mutual written agreement of the
Parties; provided, however , that (a) any change,
modification or amendment to the Operating Guidelines may result in
an increase or decrease, or no change at all, in the fees charged
by Cardinal Health in Section 5 and any such mutually agreed fee
revisions will be reflected in an amended Fee Schedule, and (b) if
the parties do not agree on the Fee revision, if any, the Operating
Guidelines shall not be amended.
2.3 Cardinal Health’s Services
shall comply with the Operating Guidelines; provided, however,
Cardinal Health shall have no obligation to comply with the
requirements of Sections [***] or any other Section as mutually
agreed upon by the Parties in writing, if estimated orders, or such
services, that support these orders, to Cardinal Health exceed its
Forecast (as hereinafter defined) by more than [***]. In the event
Client’s shipments of Product to Cardinal Health exceed its
Forecast by more than [***], Cardinal Health shall use reasonable
commercial efforts to meet the requirements referenced above for
such additional Product, but failure to meet such requirements
shall not constitute a default hereunder..
2.4 All Product returns shall be
processed and handled by Cardinal Health in accordance with the
Operating Guidelines; and, any customization or additional return
services requested by Client may require an additional fee as may
be agreed by the Parties in writing in advance.
2.5 Client is solely responsible for
the management of all Product recalls. In the event Product is
subject to recall, or Client, on its own initiative, recalls any
Product, Cardinal Health shall provide assistance to Client upon
request as set forth in the Operating Guidelines, provided
that Client shall pay to Cardinal Health an amount equal to
Cardinal Health’s actual and reasonable costs incurred with
any such recall services. Such costs shall be in addition to the
Fees described in Section 5 below.
3. Product Supply/Client
Responsibilities .
3.1 Client shall deliver Product to
Cardinal Health at Cardinal Health’s facility located at 15
Ingram Boulevard, Suite 100, La Vergne, Tennessee 37086, and/or to
such other distribution facility as may be designated by Cardinal
Health and approved by Client in writing (individually or
collectively, “ Facility ”).
3.2 Client shall be responsible for
delivery of Product to the Facility, including all costs, expenses
and risk of loss associated with such delivery. Title to Product
shall remain with Client at all times, even when Product is stored
or warehoused at the Facility. Client shall at all times insure the
Product for damage, loss, destruction, theft or any such other
property damage (“ Loss ”) as further set forth
in Section 15 below. Except for Loss to the extent resulting from
the gross negligence or willful
***Confidential treatment has been requested as
to certain portions of this agreement. Such omitted confidential
information has been designated by asterisks and has been filed
separately with the Securities and Exchange
Commission***
2
misconduct of Cardinal Health (which Loss shall
be the responsibility of Cardinal Health), Client shall bear all
risk of loss or damage with respect to the Product stored or
warehoused at the Facility.
3.3 Client shall provide Cardinal
Health with a forecast of the volume of Product to be handled by
Cardinal Health under this Agreement, which may be updated by the
Client from time to time but not less often than semi-annually
(“ Forecast ”). There will be two forecasts of
volume (shipments incoming and shipments outgoing). Upon execution
of this Agreement, Client shall deliver to Cardinal Health a
customer list, which sets forth the Product prices (the “
Customer Price List ”). Client shall notify Cardinal
Health of any change in the Customer Price List not less than [***]
hours prior to the effective date of any such change. Cardinal
Health shall implement such price change in accordance with the
Operating Guidelines.
3.4 Cardinal Health shall visually
inspect each shipment of Product received for external damage or
loss in transit and notify Client of any such damage or loss within
a commercially reasonable period of time (but no later than [***]
hours) following discovery. Cardinal Health shall assist by
providing requested information for all necessary carrier claims
and notifications with regard to damaged goods.
4. Information System
Access .
4.1 During the term of this
Agreement and subject to the terms herein, Client may use
password(s) and identification number(s) provided by Cardinal
Health to remotely access Client’s data maintained on
Cardinal Health’s web enabled Operating System Base and
certain support services associated therewith, as further set forth
in the Operating Guidelines (collectively, the “
System ”) provided that such access is used
solely by Client’s employees and contractors and for
Client’s own internal business purposes. Client shall use
that access solely to access Client’s data and shall not
access or attempt to access any other data, systems or software.
Client shall be responsible for all use of the passwords and
identification elements by its employees and contractors and shall
ensure that they are used solely to effect the limited access
authorized herein. The limited license to access the System granted
herein does not include the right to copy, download or otherwise
use any software or non-Client data maintained on the
System.
4.2 The System shall be made
available to Client at the fees set forth in the Fee Schedule. If
Cardinal Health agrees to perform any custom enhancements to the
System requested by Client, such customization services shall be
(i) performed pursuant to a mutually agreed-upon Statement of Work
(“ SOW ”) that sets forth, among other things,
the specifications and timeline for performance and (ii) invoiced
separately pursuant to the terms set forth in Section 5.2 based on
an hourly rate set forth in the Fee Schedule (as defined in Section
5.1) and, prior to such performance, (a) Cardinal Health shall
notify Client of any related increase in the periodic fees
hereunder relative to the ongoing support of the customization and
(b) if Client agrees to such fees, the Parties shall amend the Fee
Schedule in writing and the new fees shall become effective upon
the completion of the customization pursuant to the SOW,
provided , however , that if Client does not agree to
such fees the customization shall not be made available to
Client.
4.3 During the Initial Term and any
renewal term thereafter, Cardinal Health shall (i) employ
reasonable security measures and policies designed to safeguard the
integrity, accessibility, and confidentiality of Client’s
data resident on the System that are at least equivalent to those
employed by Cardinal Health to safeguard the integrity,
accessibility and confidentiality of its own information on the
System, and (ii) establish and maintain reasonable disaster and
emergency recovery plans designed to
***Confidential treatment has been requested as
to certain portions of this agreement. Such omitted confidential
information has been designated by asterisks and has been filed
separately with the Securities and Exchange
Commission***
3
minimize disruption from System operation
interruptions that are at least equivalent to those employed by
Cardinal Health to minimize disruption to Cardinal Health from
System operation interruptions. Cardinal Health shall back up
Client data on a daily basis and provide Client data to Client on a
mutually agreeable basis.
4.4 Client shall not reverse
engineer, reverse assemble, decompile, create derivative works,
modify, or otherwise attempt to derive the source code of any
software on the System, or copy, download, modify, or create
derivative works of such software. Also, Client shall not permit
access to the System or related documentation to any other person
or entity other than Client’s employees and contractors. The
System and all parts thereof, in all of their tangible and
intangible manifestations, all existing or new enhancements,
developments, derivative works, and other modifications to the
System (or any part thereof), and all related proprietary rights,
are and shall remain the exclusive property of Cardinal Health
(except for Client data residing therein, which at all times shall
remain Client’s property and Confidential
Information).
4.5 CARDINAL HEALTH WARRANTS THE
SYSTEM AND SOFTWARE TO THE FULL EXTENT OF THE WARRANTY IT HAS IN
EFFECT FROM THE THIRD PARTY PROVIDER OF THE SYSTEM AND SOFTWARE.
WITHOUT LIMITING THE PRECEDING SENTENCE, THE SYSTEM, THE SOFTWARE
THEREON AND ANY RESULTS OBTAINED THEREFROM ARE PROVIDED ON AN
“AS IS” BASIS, WITHOUT WARRANTY OF ANY KIND, WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. CARDINAL HEALTH MAKES NO
REPRESENTATIONS OR WARRANTIES, EXCEPT AS OTHERWISE PROVIDED HEREIN,
AND HEREBY EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, RELATING DIRECTLY OR INDIRECTLY TO
THE SYSTEM OR ANY PART THEREOF INCLUDING WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE.
4.6 Cardinal Health shall use
reasonable efforts to make the System available for access
twenty-four (24) hours a day, seven (7) days a week absent
scheduled and emergency maintenance periods.
4.7 Notwithstanding anything to the
contrary, in the event of a breach or threatened breach of the
security of the System or unauthorized disclosure of any
information relative to the System, Cardinal Health may revoke or
suspend any or all passwords and identification numbers provided to
Client hereunder for the period of time reasonably necessary for
Cardinal Health to resolve the matter, provided that
Cardinal Health shall otherwise provide access to Client’s
data to Client during such period of revocation or suspension by
promptly responding to Client’s requests for such data by
e-mail or facsimile.
5. Fees.
5.1 As compensation for the
Services, Client shall pay to Cardinal Health the fees (the “
Fees ”) set forth on Exhibit B (the
“ Fee Schedule ”). The parties may amend the Fee
Schedule from time-to-time by mutual written agreement.
5.2 Cardinal Health shall issue an
invoice to Client for the Services rendered under this Agreement or
for any other amounts due on a monthly basis. Payment shall be due
within [***] days of the invoice date and shall be made by wire
transfer or electronic funds transfer (“ EFT ”).
If the invoice is
***Confidential treatment has been requested as
to certain portions of this agreement. Such omitted confidential
information has been designated by asterisks and has been filed
separately with the Securities and Exchange
Commission***
4
not paid within such [***] day period by wire
transfer or EFT, a service charge on the unpaid amount calculated
at the rate of [***]% per month (or the maximum rate permitted by
law if such rate is less than [***]% per month) shall be imposed
until such amount is paid in full.
5.3 The Fees set forth in
Exhibit B shall not be modified during the first year
of the Initial Term. Thereafter, Cardinal Health shall be entitled
to adjust the price not more often than once per contract year, (a)
for the second and third years of the Initial Term by [***] and (b)
for each year thereafter by [***].
5.4 Notwithstanding the terms set
forth above in Section 5.3, if Cardinal Health can reasonably
demonstrate that the costs for providing the Services have
materially increased, or are likely to materially increase in the
coming year due to the adoption of any applicable law or regulation
(or any material change in the interpretation or administration
thereof), or due to unforeseen circumstances beyond Cardinal
Health’s reasonable control, then upon notice from Cardinal
Health, the Parties agree to meet, in person, and negotiate in good
faith a mutually acceptable adjustment to the Fees.
6. Term and Termination
.
6.1 The initial term of this
Agreement shall begin on the Effective Date and shall continue for
a period of three (3) years (the “ Initial Term
”), unless terminated earlier pursuant to this Agreement.
Thereafter, this Agreement shall automatically renew for additional
terms of one (1) year each, unless written notice of termination is
given by either Party at least one hundred eighty (180) days prior
to the end of the Initial Term, or such other term, in which case
this Agreement shall terminate at the end of the then current
term.
6.2 Either party shall have the
right to terminate this Agreement upon one hundred eighty (180)
days prior written notice to the other party, provided that
in the event Client terminates this Agreement, without cause, prior
to the end of the Initial Term, such termination shall be effective
only upon payment by Client to Cardinal Health of a termination fee
of [***] of all remaining monthly fixed Fees set forth on the Fee
Schedule for the remainder of the Initial Term.
6.3 Either Party shall have the
right to terminate this Agreement:
(a) upon a material breach by the
other Party upon thirty (30) days’ prior written notice
unless the breaching party cures the breach within such thirty (30)
day period; provided that, with respect to any failure to
make any payment when due under this Agreement, such period to cure
shall be reduced to ten (10) days; or
(b) immediately in the event of any
proceedings, voluntary or involuntary, in bankruptcy or insolvency,
are commenced by or against the other Party, or a receiver is
appointed for the other Party with or without such other
Party’s consent.
6.4 Termination or expiration of
this Agreement shall not relieve either Party from any liability or
obligation that accrued prior to such termination or expiration.
Upon termination or expiration of this Agreement, all Product shall
be returned to Client or a designee of Client, at Client’s
sole cost and expense. Upon sending or receiving any notice of
termination, Cardinal Health shall cooperate with Client to provide
to Client, as soon as practical but no later than within thirty
(30) days, all records and data utilized in performing Services
under this Agreement and that would otherwise been available to
Client in utilizing the System, in (a) hard copy format and (b) an
accessible and searchable electronic
***Confidential treatment has been requested as
to certain portions of this agreement. Such omitted confidential
information has been designated by asterisks and has been filed
separately with the Securities and Exchange
Commission***
5
database format (such as Excel or some other
readily available and widely used software database) reasonably
acceptable to Client. This Section 6.4 and Sections 12
(Confidentiality) as expressly stated therein, 13
(Indemnification), 14 (Limitation of Liability), 15 (Insurance) to
the extent expressly stated therein, 16 (Dispute Resolution), and
17 (Miscellaneous) shall survive termination or expiration of this
Agreement.
7. Records, Audits and
Requests for Information .
7.1 Cardinal Health shall at all
times keep and maintain records as set forth in the Operating
Guidelines.
7.2 During the Term, Client or its
designee (subject to Confidentiality requirements) shall have the
right during normal business hours (i.e., 8:00 a.m. to 5:00 p.m.
local time), upon fifteen (15) business days prior written notice
to Cardinal Health, to: (a) conduct a physical audit of such parts
of the Facility that relate to Product stored and warehoused at the
Facility under this Agreement; and (b) review and audit Cardinal
Health’s records related to the storage, distribution and
Client’s sale of the Product; provided, however , that
Client’s right to perform any such audits under clause (a)
shall occur no more frequently than once per calendar year at each
Facility, and such audits under clause (b) shall occur no more
frequently than once per calendar year and, with respect to both
clause (a) and (b), as otherwise set forth in the Operating
Guidelines. Client shall be responsible for any breach of
confidentiality by its designee.
7.3 Cardinal Health shall provide to
Client copies, at Client’s expense, of all documents and
information requested by the FDA or by Client in support of
Client’s regulatory filings for the Product. Copies of all
documents to be provided to the FDA in connection with any such
request shall if permitted by law, be provided to Client in advance
if reasonably practicable from a timing perspective or otherwise
within two (2) business days of delivery to the FDA. Cardinal
Health shall notify Client on the same day upon receipt of notice
of any inspection by the FDA directed specifically toward the
Product, and Client shall have the right to have an employee
present at any such inspection, if allowed by law.
7.4 Subject to its confidentiality
obligations to third parties, Cardinal Health shall notify Client
on the same day of receipt, and provide a copy of, any notice of
any FDA or other governmental authority inspection, investigation
or other inquiry, or other material governmental notice or
communication (collectively, an “ Inquiry ”) (a)
relating to the distribution of the Product; or (b) that could
reasonably be expected to have a material affect on Cardinal
Health’s ability to distribute Products or otherwise perform
the Services. The Parties shall reasonably cooperate with each
other during any such Inquiry, subject to their respective
confidentiality obligations to third parties. Cardinal Health shall
discuss with Client any response to observations or notifications
received in connection with any such Inquiry and shall, (a) if
permitted by law, (b) reasonably practicable from a timing
perspective, and (c) subject to confidentiality obligations to
third parties, provide Client an opportunity to comment upon any
proposed response before it is made. Cardinal Health shall provide
Client with copies of all correspondence received by it from, or
filed by it with, any governmental authority to the extent
pertaining to the Product or the distribution by Cardinal Health of
the Product.
8. Compliance With
Laws. Each Party
shall conduct its activities in connection with this Agreement in
compliance with all applicable laws, rules, regulations, and orders
of governmental entities. In the event that one or more Cardinal
Health licenses is revoked and Cardinal Health fails to cure within
thirty (30) days, and individually or in the aggregate, such
revocation result in the material impairment of Cardinal
Health’s ability to fulfill its obligations under this
Agreement, then during such
6
period of time that Cardinal Health’s
performance is materially impaired (“Period of
Impairment”), Client shall have the right to obtain the
affected distribution services from a third party without regard to
the exclusivity provisions contained herein and Cardinal Health
shall not charge Client for Services Client obtains from others.
During any Period of Impairment, Variable Fees and Fixed Fees for
Services actually performed by Cardinal Health shall continue to
apply and Fixed Fees that apply to both Services performed and
services Client obtains from others would be prorated. At the
conclusion of any Period of Impairment, all Services, Fees and
exclusivity provisions shall resume and all other terms and
conditions shall continue.
9. Representations and
Warranties .
9.1 Each Party represents and
warrants to the other that:
(a) it has full power and authority
to enter into this Agreement and perform all obligations and
conditions to be performed by it under this Agreement without any
restriction by any other agreement or otherwise;
(b) the execution, delivery and
performance of this Agreement have been duly authorized by all
necessary corporate action of that Party; and
(c) this Agreement constitutes the
legal, valid and binding obligation of that Party.
9.2 Client further represents and
warrants to Cardinal Health that:
(a) the Product is and shall be
manufactured in conformity with the Food, Drug and Cosmetic Act, as
amended from time to time, and all other applicable laws, rules,
regulations and orders of governmental entities relating to the
manufacture, promotion, sale or distribution of the
Product;
(b) the Product does not violate or
infringe any patent, trademark, trade name or other interest of any
person or entity.
9.3 Cardinal Health represents and
warrants to Client that:
(a) it now has, and shall maintain
in full force and effect during the Initial Term and all renewal
terms thereafter, all federal and state licenses, permits or other
approvals required of Cardinal Health to fulfill its obligations
under this Agreement.
(b) Cardinal Health shall provide to
Client, on an annual basis, a Type II SAS 70 report prepared by an
independent public accounting firm (a “ Report
”). The Report will be dated to cover the annual period
through September 30. The scope of the Report may be limited to a
review of the key systems and processes which are relied upon by
Client. Client may share such Report with its auditors and
contractors subject to confidentiality requirements. The foregoing
notwithstanding, in the event that the applicable public accounting
rules change such that a SAS 70 Type II report is no longer
reasonably required by Client or its public accountants, then
Cardinal Health shall no longer be required to provide such Report.
If Cardinal Health’s and Client’s fiscal years do not
close on the same date, upon request by Client, Cardinal Health
shall provide Client with a letter stating whether during the gap
period there have been any significant changes to the structure or
operation of the internal controls or if
7
anything has come to Cardinal
Health’s attention that would lead Cardinal Health to believe
that the controls are not working effectively.
(c) Cardinal Health shall promptly
notify Client of any action taken against any federal and state
licenses, permits or other approvals required of Cardinal Health to
fulfill its obligations under this Agreement that would affect the
ability of Cardinal Health to meet its obligations under this
Agreement.
10. Taxes.
Client shall pay when due all
sales, use, gross receipts, excise, personal property taxes imposed
by the government associated with the Product (excluding any
personal property tax associated with Cardinal Health’s
equipment used in connection with the Services), and other taxes
now or hereafter imposed by the government as a result of the
transactions contemplated by this Agreement, none of which have
been included in the fees payable to Cardinal Health under this
Agreement; provided that the amounts payable by Client under
this section shall not include taxes based on the net income of
Cardinal Health.
11. Trademarks
.
11.1 Client grants Cardinal Health,
which for purposes of this Section 11 shall include Cardinal
Health’s Affiliates, a non-exclusive privilege to use during
the Initial Term and any renewal term thereafter, the various trade
names, trademarks, service marks and those other word and design
marks that Client associates with the Product (the “ Trade
Names ”) as necessary to perform Services under this
Agreement and for no other purpose.
11.2 Cardinal Health agrees that
Client has the right to control the manner of use or display of the
Trade Names by Cardinal Health. This non-exclusive license is a
limited license and may be terminated at any time by Client upon
the termination of this Agreement. Cardinal Health shall
discontinue the display or use of any Trade Name, or change the
manner in which any such Trade Name is displayed or used, upon
request by Client.
11.3 Cardinal Health further agrees
that:
(a) Cardinal Health shall not use
the Trade Names, or any variant thereof, as the whole or any part
of its title or the name of its business, except upon
Client’s express written consent to such use.
(b) Cardinal Health shall not use
the Trade Names in any manner in connection with an effort to
distribute goods of others, whether or not such goods are
competitive with the Product.
11.4 Upon termination or expiration
of this Agreement, Cardinal Health shall discontinue any and all
use of the Trade Names and any other identification with Client and
shall avoid any statement or implication that it is a distributor
of the Product, and Client shall discontinue any identification
with Cardinal Health and shall avoid any statements or implication
that Cardinal Health is a distributor of the Product, except (1) as
may be necessary for it to fulfill its obligations which survive
termination, (2) for retention of records in accordance with its
records retention policies and (3) as may be required by
law.
11.5 Except as permitted under this
Agreement, (a) Client shall not have the right to use the name of
Cardinal Health or its Affiliates or Cardinal Health’s or its
Affiliates’ trademarks, service marks, logos or other similar
marks in any manner except with the prior written approval of
Cardinal Health, and
8
(b) Cardinal Health shall not have the right to
use the name of Client or its Affiliates or Client’s or its
Affiliates’ trademarks, service marks, logos or other similar
marks in any manner except with the prior written approval of
Client.
11.6 For purposes of this Agreement,
(a) the term “ Affiliate ” means any legal
entity which, during the Term hereof, controls, is controlled by,
or is under common control with, such Party, and (b) the terms
“third party” and “third person” (and their
plural forms) shall not include Affiliates of either Party. For
purposes of this definition, an entity shall be deemed to control
another entity if it owns or controls, directly or indirectly, at
least fifty percent (50%) of the voting interest of all equity
interests of the other entity (or other such comparable ownership
interest for an entity other than a corporation).
12. Confidentiality
.
12.1 Each Party acknowledges that as
a result of this Agreement it may learn and have access to trade
secrets and other confidential and proprietary information of the
other Party through employees, representatives and/or agents acting
on behalf of or subcontracted to either Party (collectively the
“ Representatives ”), including without
limitation, financial information, information regarding business
practices and techniques, and systems and technology information,
or any information identified as confidential in writing by either
Party (the “ Confidential Information ”). Client
acknowledges and agrees that all information and materials related
to the System shall constitute Confidential Information. Without
limiting the foregoing, Cardinal Health acknowledges and agrees
that all information and materials related to (a) Client’s
financial information and data, (b) Product sales and distribution,
(c) Product inventories, and (d) non-public Product pricing
information, shall constitute Client’s Confidential
Information. For purposes of this Agreement, Confidential
Information shall not include information disclosed by one Party to
the other Party to the extent that such information can be proven
by written evidence: (a) to be in the public domain or generally
available in the industry in which the disclosing Party engages in
business without any violation of this Agreement by the other
Party; (b) is already legally known to the other Party or any of
its Affiliates (as defined in Section 11.6) at the time of its
disclosure by the disclosing Party; (c) becomes known to the other
Party or any of its Affiliates from a third party without any
obligation of confidentiality or limitation on use; or (d) is
independently developed by the other Party or any of its Affiliates
prior to the date of its disclosure. The specific material terms of
this Agreement shall be deemed to be the Confidential Information
of each Party. Confidential Information shall not be deemed to be
in the public domain or publicly known or in the receiving
Party’s possession because it is embraced by more general
information in the receiving Party’s possession or because it
is embraced in general terms in publications.
12.2 Neither Party shall, directly
or indirectly, at any time without the other Party’s prior
written consent: (a) disclose to any third person or entity any
Confidential Information of the other Party (whether learned before
or after the date of this Agreement), or (b) use, or permit or
assist any third person or entity to use, any such Confidential
Information, excepting only: (i) disclosures required by law, rule,
regulation or order, as reasonably determined by the disclosing
Party or its legal counsel, (ii) disclosures on a confidential
basis to authorized agents, including but not limited to
accountants, consultants and attorneys, of the disclosing Party,
(iii) disclosures on a confidential basis to directors, officers,
and employees and contractors of, that Party or its Affiliates who
have a reasonable need to know such Confidential Information in the
normal course of business of that Party or any of that
Party’s Affiliates, and (iv) disclosures to potential
investors in or acquirers of that Party (and their respective
independent auditors and outside attorneys under obligation of
confidentiality) who have a reasonable need to know such
Confidential Information; provided that Party and such
potential investors or acquirers have entered into a
confidentiality agreement the provisions of which are as least as
restrictive
9
as the confidentiality provisions hereof, and
that Party remains responsible for any violations of such
confidentiality obligations.
12.3 The obligations of
confidentiality hereunder shall survive the termination of this
Agreement for a period of three (3) years. Upon termination of this
Agreement (for any reason), or upon the other Party’s request
at any time, each Party shall promptly: (a) return to the other
Party all documentation and other materials (including copies of
original documentation or other materials) containing any
Confidential Information of the other Party; or (b) with the other
Party’s consent, which consent will not be unreasonably
withheld, destroy such documentation and other materials, and
certify to the other Party, pursuant to a certificate in form and
substance reasonably satisfactory to the other Party, as to the
destruction of all such documentation and other
materials.
13.
Indemnification. Each Party shall indemnify and hold harmless the
other Party and its parent and Affiliates, and each of their
directors, officers, employees, agents, and representatives from
and against all claims, liabilities, losses, damages, costs, and
expenses, including, without limitation, reasonable
attorneys’ fees (“ Liability ”), to a
third party or property arising directly or indirectly out of any
failure of that Party to perform fully all obligations and
conditions to be performed by that Party pursuant to this Agreement
or any breach of any warranty made by that Party in this Agreement
or the negligence or willful misconduct of that Party. Client
further agrees to indemnify and hold harmless Cardinal Health, its
parent and Affiliates and each of their directors, officers,
employees, agents and representatives from any and all Liability to
a third party arising directly or indirectly out of or relating to
any third party claim, except to the extent such claim arises out
of the negligence or willful misconduct or breach of this Agreement
by Cardinal Health, based upon (i) injury or death to person or
property alleged to have been caused by Client’s Product,
(ii) any violation or infringement of any patent, trademark, trade
name or other interest of any third person concerning the Product,
and (iii) the manufacture, marketing, testing, shipping, sale,
possession or use of Product. All indemnity obligations hereunder
are subject to the Party seeking indemnity (a) providing the
indemnifying party prompt written notice of any such claim (
provided, however, that failure to provide such notice
within a reasonable period of time shall not relieve the
indemnifying party of any of its obligations hereunder except to
the extent the indemnifying party is prejudiced by such failure),
(b) providing reasonable cooperation in connection with the claim,
and (c) not compromising or settling any claim or liability without
the prior written consent of the indemnifying party.
14. Limitation of
Liability. NOTWITHSTANDING THE FOREGOING PROVISIONS OF SECTION
13, OR ANY OTHER PROVISION OF THIS AGREEMENT TO THE
CO
