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Exhibit 10.3
EXCLUSIVE DISTRIBUTION AGREEMENT
This
Exclusive Distribution Agreement ("AGREEMENT") is made as of
12:01
A.M., April 1, 2004 (the "EFFECTIVE DATE"),
between Adams Laboratories, a Texas
corporation, having its principal place of
business at 14801 Sovereign Road,
Fort Worth, TX 76145 ("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, the District of Columbia
and Puerto Rico (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 products
referred to in Exhibit A in all
formulations (collectively, the "PRODUCT"),
and such other pharmaceutical
products agreed to by the parties in the
Territory and to perform certain other
services described in this Agreement, all
upon the terms and conditions set
forth in this Agreement. However, during
the first six (6) months following the
Effective Date of this Agreement, Client
shall have the right to transfer the
return goods processing to another
party.
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 Upon
the terms and conditions set forth in this Agreement, Client
appoints Cardinal Health as its exclusive
distribution agent of Product in the
Territory to Client's customers, including,
but not limited to, wholesalers,
specialty distributors, physicians,
clinics, hospitals, pharmacies and other
health care providers in the Territory
(collectively, "CUSTOMERS").
1.2
Subject to the terms and conditions set forth in this
Agreement,
Cardinal Health accepts the appointment to
represent Client as its authorized
exclusive distribution agent of Product to
Customers in the Territory.
1.3 Right
of First Refusal.
(a) Client shall provide Cardinal Health with a right of first
negotiation and refusal with respect to the
distribution of new pharmaceutical
products acquired or promoted by Client in
the Territory after the Effective
Date. Client shall grant Cardinal Health an
exclusive right of negotiation with
respect to the distribution of such new
product for a period of thirty (30) days
after Client's notice to Cardinal Health
that such new product will be available
for distribution. If the parties have not
reached an agreement with respect to
the distribution of the new product within
thirty (30) days from the date of
Client's notice, and entered into a
definitive agreement within thirty (30) days
thereafter, or if Cardinal Health notifies
Client in writing at any point during
such negotiation period that it is not
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interested or unable to distribute such new
product(s), then Client shall have
no further obligation with respect to that
new product under this Section 1.3.
(b) Notwithstanding the foregoing, if the Parties negotiate in
good
faith but are unable to reach an agreement
with respect to terms regarding the
distribution of the new product, then after
the expiration of the period
identified above, and provided that Client
enters into negotiations with a third
party to provide such services, Client
shall present to Cardinal Health a
definitive letter of intent or bona fide
offer from another source to provide
such services, and a copy of such terms,
assumptions and conditions (a
"COMPETING OFFER") and Cardinal Health
shall be provided the opportunity, for a
period of not less than twenty (20) days
after receipt of such notice and
documentation of such Competing Offer, to
meet the Competing Offer on
substantially similar terms. If Cardinal
Health substantially meets the
Competing Offer, then Client shall enter
into a definitive agreement upon such
terms and conditions. If Cardinal Health
does not substantially meet the
Competing Offer, then Client may obtain
such services from the third party in
accordance with the terms of the Competing
Offer.
2.
SERVICES.
2.1
Cardinal Health shall provide the services set forth in the
preliminary 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 B and incorporated by
reference. It being understood that the
Parties will agree upon mutually acceptable
final Operating Guidelines and any
adjustments to Fees related to changes in
the Operating Guidelines within thirty
(30) days after the effective date of this
Agreement and such final Operating
Guidelines shall be inserted as Exhibit B
in lieu of the current Exhibit B.
2.2 The
Operating Guidelines may be amended from time to time upon the
mutual written agreement of the Parties;
provided, however, that any change,
modification or amendment to the Operating
Guidelines may result in an increase
in the fees charged by Cardinal Health in
Section 5.
2.3
Cardinal Health's services shall comply with the Operating
Guidelines,
provided Client's shipments of Product to
Cardinal Health do not exceed its
Forecast (as hereinafter defined) by more
than twenty-five percent (25%).
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 shall be performed at an
additional fee as agreed by the
Parties.
2.5 Client
is solely responsible for 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 as set forth in the
Operating Guidelines, provided that Client
shall pay to Cardinal Health an
amount equal to Cardinal Health's
reasonable actual costs incurred with any such
recall services. Such cost shall be in
addition to the Service Fees described in
Section 5 below.
3. PRODUCT
SUPPLY/CLIENT RESPONSIBILITIES.
3.1 Client
shall deliver Product for the first twelve months of this
Agreement, exclusively to Cardinal Health's
facility at 800 Industrial Blvd.,
Suite 100, Grapevine, TX 76051 ("Grapevine
Facility"). After the first twelve
months of this Agreement, Client may upon a
minimum of thirty (30) days notice
to Cardinal Health deliver mutually
agreeable quantities of Product to Cardinal
Health's
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facility at 15 Ingram Blvd., Suite 100,
LaVergne, TN 37086 ("LaVergne
Facility"). Whichever or both of the
Grapevine Facility and/or LaVergne Facility
are receiving Product shall be the
"Facility" under this Agreement.
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 resulting
solely from the gross negligence or willful
misconduct 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, not less often
than semi-annually ("FORECAST"). 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
forty-eight (48) hours prior to the
effective date of any such change. Cardinal
Health shall use commercially
reasonably efforts to implement such price
change in accordance with Client's
instruction. Notwithstanding the foregoing,
Client shall provide the initial
Forecast no later than thirty (30) days
after the Effective Date of this
Agreement.
3.4
Cardinal Health shall visually inspect each shipment of Product
for
external damage or loss in transit and
notify Client of any such damage or loss
within a commercially reasonable period of
time following discovery.
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 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 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 billed
separately based on an hourly rate set
forth in the Fee Schedule (as defined in
Section 5) and prior to such performance
Cardinal Health shall notify Client of
any related increase in the periodic fees
hereunder relative to the ongoing
support of the customizations.
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* Omitted information is the subject of a
request for confidential treatment
pursuant to Rule 406 under the
Securities Act of 1933 and has been filed
separately with the Securities and
Exchange Commission.
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4.3 During
the term of this Agreement, Cardinal Health shall employ
reasonable security measures and policies
designed to safeguard the integrity,
accessibility, and confidentiality of
Client's data resident on the System and
establish and maintain reasonable disaster
and emergency recovery plans designed
to minimize disruption from System
operation interruptions.
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. 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.
4.5 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, AND HEREBY EXPRESSLY DISCLAIMS
ALL 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
Client's
breach of any of Cardinal Health's security
policies or of the confidentiality
provisions in this Agreement, Cardinal
Health may revoke or suspend any or all
passwords and identification numbers
provided to Client hereunder.
5.
FEES.
5.1 As
compensation for the Services, Client shall pay to Cardinal
Health
the fees (the "FEES") set forth on EXHIBIT
C (the "FEE SCHEDULE").
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 is due within twenty (20) days of
the invoice date. If the Invoice is
not paid within such twenty (20) day
period, a service charge on the unpaid
amount calculated at the rate of 1.5% per
month (or the maximum rate permitted
by law if such rate is less than 1.5% per
month) shall be imposed until such
amount is paid in full.
5.3 The Fees
shall be held firm for the first contract year. Thereafter,
Cardinal Health shall adjust the price not
more often than once per contract
year by the * of (i) the increase in the
Producer Price Index - All Commodities
published by the United States Department
of Labor, Bureau of Statistics, as
amended from time to time ("Index") or *
percent (*%) if the Index increase is
less than * percent (*%), or (ii) * percent
(*%). For purposes of sub-Section
(i), the base point shall be the index
level on the first day of the contract
year.
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* Omitted information is the subject of a
request for confidential treatment
pursuant to Rule 406 under the
Securities Act of 1933 and has been filed
separately with the Securities and
Exchange Commission.
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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 good faith and negotiate 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 ninety (90) 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 This
Agreement may be terminated:
(a) by either Party 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 to
Cardinal Health of * percent (*%) of
remaining fixed Fees set forth on the Fee
Schedule for the remainder of the
Initial Term, it being understood that
there be no additional damages for such
termination, and provided that if Cardinal
Health terminates this Agreement,
without cause, prior to the end of the
Initial Term, such termination shall only
be effective upon payment to Client of an
amount which is equal to * Dollars
($*) multiplied by a fraction *, it being
understood that there be no additional
damages for such termination. For example,
if Cardinal Health terminated
effective *.
(b) by either party upon the breach by the other Party of a
material
provision of this Agreement and that
Party's failure to cure such breach within
thirty (30) days following written notice
thereof from the non-breaching Party,
provided that, with respect to any failure
to make any payment when due under
this Agreement, such period to cure shall
be reduced to fifteen (15) days; or
(c) by either party immediately upon notice to the other Party
following the commencement of any
bankruptcy or insolvency proceeding (whether
voluntary or involuntary) with respect to
such other Party or its assets, which
in the event of an involuntary proceeding,
is not dismissed within sixty (60)
days, the general assignment for the
benefit of creditors by such other Party,
or the appointment of a receiver, trustee
or liquidator by or for such other
Party.
6.3
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
unless the termination is a result of a
breach by Cardinal Health in which case
Cardinal Health will pay the Product return
expenses. Sections 13 and 14 shall
survive termination or expiration of this
Agreement.
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* Omitted information is the subject of a
request for confidential treatment
pursuant to Rule 406 under the
Securities Act of 1933 and has been filed
separately with the Securities and
Exchange Commission.
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7. AUDITS.
No more than twice per calendar year, Client or its designee
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 solely to Product stored and
warehoused at the Facility under this
Agreement; and (b) review and audit records
that relate solely to the storage
and distribution of the Product. Without
limiting the foregoing, records review
may include, at Client's option, a review
of Product receiving, storage,
picking, packing, shipping and related
quality records and/or Client's Customer
records including Customer orders and
Customer accounts receivable. Cardinal
Health and Client agree to participate in
quarterly business reviews.
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.
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 the
Product:
(a) 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) does not violate or infringe any patent, trademark, tradename
or
other interest of any person or entity.
10. TAXES.
Client shall pay when due all sales, use, gross receipts,
excise, personal property taxes 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 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. Neither Party shall have the right to use the name of
the
other Party or any Affiliate of the other
Party, or the other Party's or such
Affiliates' trademarks, service marks,
logos, or other similar marks in any
manner except with the prior written
approval of that Party; provided that the
foregoing shall not prohibit Cardinal
Health's use of Client' names or marks in
connection with the performance of the
Services in a manner consistent with this
Agreement. In the event Cardinal Health
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uses Client's trademarks or tradenames,
Cardinal Health shall identify such as
the property of Client. Moreover, Cardinal
Health may not use any third party
trademarks or tradenames with the Products
without prior written approval of
Client. "AFFILIATE," as used in this
Agreement, means any legal entity which,
during the Term hereof, controls, is
controlled by, or is under common control
with, such 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. 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 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: (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,
and (ii) disclosures on a confidential
basis to directors, officers, employees,
and agents 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.
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) each
Party shall promptly: (i) 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 (ii) with the other Party's
consent, which consent will not be
unreasonably withheld, 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,
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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.
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
arising directly or indirectly out of
or relating to (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, tradename or other interest of
any person or entity relating to
Client's Product, and (iii) the
manufacture, marketing, testing, shipping, sale,
possession or use of Product, provided said
Liability is not solely attributable
to Cardinal Health's negligence or
intentional misconduct.
14.
LIMITATION OF LIABILITY. NOTWITHSTANDING THE FOREGOING PROVISIONS
OF
SECTION 13, OR ANY OTHER PROVISION OF THIS
AGREEMENT TO THE CONTRARY, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR ANY CONSEQUENTIAL (SPECIFICALLY
EXCEPTING THOSE CONSEQUENTIAL DAMAGES
ARISING FROM EACH PARTY'S OBLIGATION TO
INDEMNIFY THE OTHER FOR LIABILITY ARISING
OUT OF OR RELATING TO THIRD PARTY
CLAIMS IN ACCORDANCE WITH SECTION 13
ABOVE), INCIDENTAL, INDIRECT, SPECIAL, OR
OTHER SIMILAR DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT.
FURTHER, IN NO EVENT SHALL CARDINAL
HEALTH'S TOTAL LIABILITY UNDER THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION
ANY OF CARDINAL HEALTH'S INDEMNITY OR
OTHER FINANCIAL OBLIGATIONS UNDER SECTION
13 OR ANY OTHER PROVISION OF THIS
AGREEMENT, EXCEED THE TOTAL FEES PAID BY
CLIENT TO CARDINAL HEALTH FOR THE
SERVICES WHICH WERE INVOLVED IN CAUSING ANY
CLAIMS, DAMAGES, LOSSES, COSTS OR
EXPENSES.
15.
INSURANCE. Client shall, at its own cost and expense, obtain
and
maintain in full force and effect the
following insurance during the term of
this Agreement.
(a) Products and Completed Operations Liability Insurance
covering
the Product included in this Agreement with
per-occurrence limits of not less
than $5,000,000; and
(b) All-Risk Property Insurance, including transit coverage, in
an
amount determined by Client in its sole
discretion covering Client's property
while it is at the Cardinal Health facility
or in transit to or from the
Cardinal Health facility. Client's all-risk
property insurance shall apply to
all losses and be primary (with respect
both to any insurance issued to Cardinal
Health and to any deductible amount or
self-insured amount retained by Cardinal
Health) except for losses resulting solely
from the gross negligence or
intentional misconduct of Cardinal
Health.
In the event that any of the required
policies of insurance are written on a
claims made basis, then such policies shall
be maintained during the entire term
of this Agreement and for a period of not
less than five (5) years following the
termination or expiration of this
Agreement.
Client shall obtain a waiver from any
insurance carrier with whom Client carries
Property Insurance releasing its
subrogation rights against Cardinal Health
except for losses resulting solely from the
gross negligence or intentional
misconduct of Cardinal Health. Client shall
not seek reimbursement for any
property claim, or portion thereof, that is
not fully recovered from insurance
except for losses resulting solely from the
gross negligence or intentional
misconduct of Cardinal Health.
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Cardinal Health, LLC, and its Affiliates
shall be named as additional insureds
under the Products and Completed Operations
Liability insurance policies as
respects the products and completed
operations outlined in this Agreement. Such
insurance shall be primary (with respect
both to any insurance issued to
Cardinal Health and to any self-insured
amount retained by Cardinal Health) for
the additional insureds' liability for
damage arising out of those products and
completed operations for which they have
been added as additional insureds.
Client shall furnish certificates of
insurance for all of the above noted
policies and required additional insured
status to Cardinal Health as soon as
practicable after the Effective Date of the
Agreement and upon renewal of any
such policies. Each insurance policy that
is required under this Section shall
be obtained from an insurance carrier with
an A.M. Best rating of at least
A-VII.
16.
DISPUTE RESOLUTION. The Parties agree to use good faith efforts
to
resolve all disputes within sixty (60) days
of written notice that such a
dispute exists. If dispute under this
Agreement cannot be resolved by the
Parties within such sixty (60) day period,
the Parties agree to refer the matter
to one executive from each Party not
directly involved in the dispute for review
and resolution. A copy of the terms of this
Agreement, agreed upon facts and
areas of disagreement, and a concise
summary of the basis for each side's
contentions will be provided to both
executives who shall review the same,
confer, and attempt to reach a mutual
resolution of the issue within forty-five
(45) days after receipt of the materials
referenced above. If the matter has not
been resolved within such forty-five
(45
