Exhibit 10.40


 


Certain portions of this Exhibit have been omitted
pursuant to a request for confidentiality. 
Such omitted portions, which are marked with brackets [   ] and an asterisk*, have been separately
filed with the Commission.


 


 


SYNDICATED SALES FORCE AGREEMENT


 


This SYNDICATED SALES
FORCE AGREEMENT (“Agreement”) is dated as of August 1, 2005 (“Effective
Date”) by and between Cardinal Health PTS, LLC (“Cardinal Health”) with a place
of business at 7000 Cardinal Place, Dublin, Ohio, and Acorda Therapeutics, Inc.
(“Acorda”), having a principal place of business at 15 Skyline Drive,
Hawthorne, NY 10532.


 


Background Information


 


Acorda develops,
distributes and sells pharmaceutical products, and Cardinal Health provides
pharmaceutical representatives who Detail (as hereinafter defined)
pharmaceutical products for third parties.  Acorda desires Cardinal Health to provide
representatives to Detail certain products as determined and directed by Acorda
in the geographical territory hereinafter specified, pursuant to the terms and
conditions of this Agreement, and Cardinal Health desires to provide the
Representatives and perform such services pursuant to the terms and conditions
set forth in this Agreement.


 


The parties hereby agree
as follows:


 


ARTICLE I

DEFINITIONS


 


1.1.          Definitions.
 The following terms when used in this
Agreement shall, except where the context otherwise requires, have the
following meanings:


 


(a)           “Act”
means the Federal Food, Drug and Cosmetic Act, as amended, and the rules and
regulations promulgated thereunder from time to time.


 


(b)           “Adverse
Event” or “AE” means any undesirable event or experience associated with the
use of the Product(s), whether or not expected and whether or not considered
related to or caused by the Product(s), including, but not limited to, an event
or experience that occurs in the course of the use of the Product(s) in
professional practice, from overdoses whether accidental or intentional, from
abuse, from withdrawal, or from a failure of expected pharmacological or
biological therapeutic action of the Product(s).  This includes but is not limited to data from
clinical trials, post-marketing reports, registries, surveys, etc.


 


(c)           “Affiliate”
means any corporate or non-corporate business entity that controls, is controlled
by, or is under common control with a party to this Agreement.  A corporation or non-corporate business entity
shall be regarded as in control of another entity if it directly or indirectly
owns or controls more than fifty percent (50%) of the voting equity of the
other entity, or (i) in the absence of the ownership or control of more
than fifty percent (50%) of the voting equity of an entity or (ii) in the
case of a non-corporate business entity, if it possesses directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation or non-corporate business entity, as applicable.


 

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(d)           “Agency”
means any governmental authority in the Territory with regulatory, enforcement
or other oversight, authority or jurisdiction over the Products, the Program,
or any of the actions or transactions contemplated by this Agreement,
including, without limitation, the FDA.


 


(e)           “Authorized
Request” means a request received on a sample request form conforming with all
of the requirements of the PDMA, including bearing the requester’s verified
name, address, professional title, State license or authorization number (or
Drug Enforcement Administration number, as applicable) and telephone number,
together with the date of the request and the name of the product, strength and
quantity to deliver (which information has been verified by a subcontractor of
Cardinal Health with the appropriate State authority to confirm that the Target
Customer requesting the drug sample is licensed or authorized under State law
to prescribe the product).


 


(f)            “Contract
Year” shall refer to each 12 month period beginning, with respect to the First
Contract Year, on the Program Launch Date, and with respect to all subsequent
Contract Years, on the anniversary date of the Program Launch Date of this
Agreement.


 


(g)           “Detail”
means an interactive, face-to-face visit by a Representative with a Target
Customer or his or her legally empowered designee in the Territory, during
which the Product(s), including its FDA-approved indicated uses, safety,
effectiveness, contraindications, side effects, warnings and other relevant
characteristics of the Product(s) (as defined herein) are described by the
Representative in a fair and balanced manner consistent with the requirements
of all Laws and SOPs (each as defined herein), and using, as necessary or
desirable and to the extent available, the Product Labeling (as defined
herein), the Product Promotional Materials (as defined herein) and the Product
samples. “Product Detail” means Detail of a Product between Target Customer and
Representative.  When used as a verb,
“Detail” or “Detailing” shall mean to engage in a Detail as defined in this Section 1.1(g).


 


(h)           “FDA”
means the United States Food and Drug Administration and any successor agency
having substantially the same functions.


 


(i)            “Laws”
means any and all federal and state laws, statutes, codes, rules regulations,
policies and guidelines applicable to the Program, the Product(s), the
performance of the Detailing and the other services and obligations under this
Agreement and the transaction contemplated hereby, including but not limited to
the Act, the PDMA, the PhRMA Code, the Medicare and Medicaid Anti-Kickback Act
(42 U.S.C. § 1320a-7b(a)), the Civil False Claims Act (31 U.S.C. § 3729(a)),
Sections 1128A, 1128B, and 1877 of the Social Security Act (42 U.S.C. §§ 1320a-7a,
-7b, and 1395nn), the Health Care Fraud Act (18 U.S.C. § 1347), the
Criminal False Claims Act (18 U.S.C. § 287) and the American Medical
Association Gifts to Physicians from Industry Guidelines, each as amended from
time to time and including all regulations, rules, policies and guidelines
promulgated thereunder.


 


2

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(j)            “Manager”
means an individual hired by and retained as an employee of Cardinal Health to
supervise activities of Representatives under this Agreement, including
district sales managers, regional sales directors, a national sales director,
and a project manager.


 


(k)           “PDMA”
means the Prescription Drug Marketing Act of 1987, as amended, and the rules and
regulations promulgated thereunder from time to time.


 


(l)            “PhRMA
Code” means the Code on Interactions with Healthcare Professionals, as adopted
by the Pharmaceutical Research and Manufacturers of America, as amended from
time to time.


 


(m)          “Primary
Detail” means a Detail in which a particular product is the first product to be
detailed during a visit to a particular Target Customer.


 


(n)           “Product”
means each of the pharmaceutical products to be Detailed by Representatives and
marketed by Acorda as set forth on attached Schedule 1.1(n) and such other
products as may be mutually agreed between the parties and added to Schedule 1.1(n)
attached hereto.


 


(o)           “Product
Labeling” means all labels and other written, printed, or graphic matter
provided by Acorda to accompany or be included in each package of the Product
including without limitation (i) any container or wrapper utilized with a
Product, or (ii) Product package inserts.


 


(p)           “Product
Promotional Materials” means all written, printed or graphic material provided
by Acorda, including Product Labeling, intended for use by Representatives
during a Detail, including visual aids, file cards, premium items, clinical
studies, reprints, drug information updates and any other promotional support
items that Acorda deems necessary or appropriate to conduct the Program.  Product Promotional Materials shall include
materials describing FDA-approved indicated uses, safety, effectiveness,
contraindications, side effects, warnings and other relevant characteristics of
a Product.  Acorda shall have the right
from time to time to add, remove or replace items in the collection of Product
Promotional Materials upon written notice of such change to Cardinal Health.


 


(q)           “Program”
means the program of Detailing to be conducted by the Representatives pursuant
to this Agreement and during the Term of this Agreement, as defined in Section 14.1.


 


(r)            “Program
Launch Date” means the first Monday following completion of the Acorda Training
Program (as defined in Section 6.1).


 


(s)           “Representative”
and “Representatives” mean an individual hired by and retained as an employee
of Cardinal Health to conduct Detailing of Products in connection with the
Program.  As sometimes used in this
Agreement, “Representatives” shall also include “Managers” if the context so
requires.


 


3

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(t)            “SOPs”
mean all of the combined standard operating procedures and policies of Cardinal
Health that are applicable to the Program, the Product(s), the performance of
the Detailing, the other services and obligations under this Agreement and all
of the transactions contemplated hereby (including but not limited to policies
and procedures designed to ensure compliance with all Laws); provided, however,
that for purposes of this Agreement, any and all Written Instructions agreed
upon by the parties pursuant to and as defined in Section 2.3(e) of Article II,
shall be binding upon Cardinal Health and accorded the same force and effect as
if they were incorporated within the definition of SOPs hereunder.


 


(u)           “Sub-Territory”
shall mean any portion of the Territory served by the Representatives as of the
Effective Date of the Agreement or otherwise agreed upon by the parties.


 


(v)           “Target”
or “Target Customer” means a physician in the Sub-Territories within the Family
Practice, General Practice, and/or Internal Medicine Physician target audience
as identified from time to time by Acorda during the Term of this Agreement.


 


(w)          “Territory”
means the states and territories of the United States of America, as divided
into the Sub-Territories.


 


(x)            “Year
One” means the 12-month period commencing on August 1, 2005 and ending on July 31,
2006.


 


(y)           “Year
Two” means the 12-month period commencing on August 1, 2006 and ending on July 31,
2007.


 


ARTICLE II

APPOINTMENT OF CARDINAL HEALTH; GENERAL SCOPE OF ACTIVITIES


 


2.1.          Detailing.


 


(a)           Targeted Customers.  Cardinal Health shall use its syndicated
sales force of 162 Representatives to engage in Product Detail activities in
the Territory.  Cardinal Health shall assign
Representatives for each of the 4,000 Target Customers, in such numbers, and in
such Sub-Territories as shall be designated by Acorda from time to time during
the Term of this Agreement.  Each
Representative shall make Product Details on his or her assigned Target
Customers based on the general direction given by Acorda’s management team and
as mutually agreed to by Cardinal Health. 
If requested by a Target Customer, Representatives shall be authorized
to provide samples of the Product(s) in accordance with Article VII.  Unless otherwise agreed to by the parties in
writing, all Details of the Product will be Primary Details.  In addition, the Representatives shall not be
permitted during the Term of this Agreement to Detail any products competing
with Acorda’s Product(s) to any of the Target Customers.  The appointment of Cardinal Health by Acorda
under this Agreement is on a non-exclusive basis and Acorda shall at all times
retain the right to promote the Product(s) by whomever, wherever, to whomever and
by whatever method it chooses.


 


4

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


2.2.          Managers.  Cardinal Health will provide an adequate
number of Managers as mutually agreed upon by the parties prior to the
execution of this Agreement to supervise the activities of Representatives.


 


2.3.          Scope
of Activities.  The parties shall
perform the following activities in connection with the Program:


 


(a)           Cardinal
Health shall have sole and exclusive authority to discipline or terminate the
employment of Cardinal Representatives and the Managers.  At Acorda’s request, Cardinal Health shall
cause any Cardinal Representative to immediately cease Detailing the Product
based on substantial non-performance or non-insignificant compliance violations
as evidenced in performance evaluations or a finding of non-compliance with the
terms of this Agreement (including but not limited to, failure to follow
Detailing procedures, to comply with Laws or SOPs, or to follow Acorda’s
Written Instructions).  Cardinal shall
either substitute a new Representative to replace any disqualified
Representative or re-assign the Sub-Territory of other Representatives in order
to ensure that the Target Customers of any disqualified Representative are
Detailed by other Representatives. 
Cardinal shall ensure that no substitute Representative shall commence
Detailing without completing the training required under Article VI.


 


(b)           Cardinal
Health shall cause each Representative and Manager to attend and successfully
complete the Acorda Training Program (as defined in Section 6.1)
(including but not limited to training sessions to be conducted by Acorda for
each of the Product(s)) and pass the proficiency test specified in Section 6.1(b),
prior to participating in the Program. 
Cardinal shall be responsible for ensuring that any Representative or
Manager who has not successfully completed all such training requirements shall
not Detail the Product(s) or supervise the sales force (as applicable).


 


(c)           Cardinal
Health’s district Managers shall periodically accompany Representatives on
Details, conduct field evaluations of the Representatives and the Program,
including time supervision, Territory management and reporting, and provide a
copy of all such evaluations to Acorda’s coordinator of the Program (or other
Acorda representative).  At Acorda’s
request, Cardinal Health shall be available to discuss the evaluations with
Acorda, and permit an Acorda representative to accompany the Representatives on
Details.


 


(d)           At
the request of Cardinal Health, Acorda shall provide Cardinal Health, without
cost, with Product Promotional Materials for the performance and supervision of
Detailing.  In light of the at risk fee
arrangement contemplated by this Agreement, Acorda shall use its reasonable
commercial efforts to maintain and supply Product Promotional Materials for the
Representatives to perform Details in accordance with the SOPs.  For avoidance of doubt, Acorda shall be
deemed to have used reasonable commercial efforts as described in the preceding
sentence if its failure to maintain and supply Product Promotional Materials
arises from problems in the production or delivery of Product Promotional
Materials or delay in or lack of approval by a third party, including, without
limitation, FDA.  Acorda shall be solely
responsible for the preparation, content and method of distribution of the
Product Promotional Materials.  Acorda or
its distributor shall be responsible for distributing the Product samples


 


5

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


directly to the Representatives, as described in Article VII.  In connection with the Detailing of the
Product(s), the Representatives shall use only the Product Promotional
Materials provided by Acorda; and under no circumstances shall Cardinal Health
or the Representatives develop, create, or use any other promotional material
or literature, or materials or other promotional materials of any kind, for the
Detailing of the Product(s).  Acorda will
coordinate with Cardinal Health to replenish supplies of Product Promotional
Material when depleted.  Acorda shall
advise Cardinal Health immediately of any inaccuracy or incompleteness of the
Product Promotional Materials, and upon such notice Cardinal Health and the
Representatives shall immediately cease the use of any portion or all of the
Product Promotional Materials so identified by Acorda, and either destroy or
return such Product Promotional Materials to Acorda, at Acorda’s instruction
and expense.


 


(e)           Cardinal
Health shall instruct the Representatives to limit their verbal statements and
claims regarding the Product(s), including but not limited to statements
regarding efficacy and safety, to those authorized by Acorda (as specified
during the Acorda Training Program) and that are consistent with the Product
Promotional Materials.  The Representatives
shall not add, delete or modify Acorda’s approved claims of efficacy or safety
in the Detailing of the Product(s), nor make any changes (including underlining
or otherwise highlighting any language or adding any notes thereto) in the
Product Promotional Materials. 
Representatives shall not make any disparaging, untrue or misleading
statements about Acorda or any of its Affiliates, employees, competitors or
competing products, or intentionally omit to make any statement necessary to
avoid making any such statement false or misleading.  Representatives shall Detail the Product(s)
in strict adherence to all Laws, SOPs and all written instructions agreed upon
by the parties in writing at any time during the course of the Program, whether
presented during the Acorda Training Program (as defined below), during any
follow-up training, or at any other time (collectively, the “Written
Instructions”).  Cardinal Health shall
not unreasonably withhold or delay its approval and implementation of any
reasonable written instructions proposed by Acorda and, in the case of
instructions that relate to the Product, Cardinal Health shall timely implement
all reasonable written instructions proposed by Acorda.  Acorda shall ensure that all the Written
Instructions comply with all applicable Laws; Cardinal Health shall ensure that
all SOPs comply with all applicable Laws.


 


(f)            The
Representatives shall remain under the direct authority and control of Cardinal
Health, but shall cooperate with Acorda and shall follow the advice and
direction related to Detail activities on the Product(s) from Acorda and
Cardinal Health mutually.  Acorda shall
make all decisions with respect to the overall strategy in connection with the
Detailing of the Product(s) to the Target Customers.  Any Acorda personnel interacting with
Cardinal Health Representatives shall not discipline the Representatives or
implement terms or conditions of employment or personnel policies and/or
practices with respect to the Representatives or otherwise control the daily
activities of Representatives.


 


(g)           Cardinal
Health shall at its sole cost and expense supply Representatives and Managers
with fleet vehicles for their use in performing and supervising the
Detailing.  Acorda shall reimburse
Cardinal Health for all reasonable out-of-pocket costs and expenses of
Representatives and Managers in connection with Acorda Training Program and the
POA meetings (as defined in Article VI) if such programs and meetings have
been approved in


 


6

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


advance in writing by Acorda.  Acorda and Cardinal Health shall establish a
mutually acceptable budget for the costs and expenses referenced in this
subparagraph 2.3(g) for each Sub-Territory, and Cardinal Health shall
obtain prior written approval for any such costs or expenses that exceed the
budget.


 


(h)           Acorda
shall periodically provide Cardinal Health with data on Product sales in the
Territory during the Term as of this Agreement for Cardinal Health’s use in
performing this Agreement.  Acorda shall
also provide Cardinal Health with such other sales and marketing information
concerning the Product(s) as Acorda shall deem appropriate, in its sole
discretion.  Any information which Acorda
elects to share with Cardinal Health under this Section 2.3(h) shall
be limited to provision of such information only to the extent allowable under
Acorda’s agreements with third parties providing such information to
Acorda.  All information provided by
Acorda, its officers, agents or representatives shall be deemed Confidential
Information belonging to Acorda and shall be treated in accordance with Article 13
hereof.


 


(i)            Unless
otherwise approved in writing by Acorda, the Representatives and Managers shall
not invite any Target Customer, or any member of his or her staff or any other
health care professional, to any promotional or educational events or
activities, or provide any meals, trips or entertainment, or provide any gifts
or remuneration in any form, kind or amount to any of them.  In the event Acorda hereafter authorizes the
Representatives as a group to engage in such promotional or educational
activities, Acorda shall so inform Cardinal Health in writing and establish
policies, guidelines, training requirements and budgets that must be observed
in conducting such activities and agreed to by Cardinal Health.


 


2.4.          Orders
for Products.  Acorda shall be solely
and exclusively responsible for establishing the terms and conditions of the
sale of the Product(s), including without limitation, the price at which the
Product(s) will be sold, whether sales of the Product(s) will be subject to any
discounts, the method of distribution of the Product(s), and whether any credit
will be granted or refused in connection with the sale or return of any
Product(s).  Acorda shall be exclusively
responsible for accepting and filling all purchase orders for the Product(s),
billing and returns for the Product(s), and all other activities in connection
with the sale and delivery of the Product(s), other than Detailing.  If Cardinal Health or the Representatives
receive an order for the Product(s) or are informed that any entity that wishes
to place an order, they shall immediately transmit such order or request to
Acorda for further handling and communications with the submitter of the order
or request, including acceptance or rejection, which shall be in Acorda’s sole
discretion.


 


2.5.          Representatives’
Activity.


 


(a)           Subject
to Acorda’s obligations and representations and warranties in this Agreement,
any breach of the terms of this Agreement on the part of the Representatives or
Managers (both individually and as a group) shall be deemed to be a breach of
this Agreement by Cardinal Health. 
Notwithstanding the foregoing, any acts or omissions of the
Representatives or Managers pursuant to the direction, control or supervision
of Acorda or its employees or


 


7

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


agents shall not be deemed to be negligent or wrongful
acts or omissions of Cardinal Health that constitute a breach of this
Agreement.


 


(b)           Each
party shall notify the other in writing as promptly as practicable of any such
alleged breach on the part of the Representatives or Managers of which it
becomes aware.  Acorda shall provide
Cardinal Health with a reasonable opportunity to remedy such breach to the
extent provided in Section 14.4.


 


2.6.          Vacancies/Turnover.  In the event of a Representative vacancy due
to resignation, reassignment or termination of a Representative, Cardinal
Health shall use its best efforts to fill any such vacancy within a six (6) week
period.  Due to the fee structure under
this Agreement, the agreed-upon Service Fees (as defined below) will not be
reduced by any Representative vacancy, provided that all missed Details are
made up within a reasonable period of time. 
In the event any such vacancy continues for longer than six (6) weeks,
Cardinal Health shall reassign Representatives to ensure that no more than six (6) weeks
passes between Details of any Target Customer as a result of any such vacancy.


 


2.7.          Management
Reports.  Cardinal Health shall
provide Acorda with written monthly and other reports in the form and substance
as reasonably agreed to by the parties, including but not limited to those set
forth in Schedule 2.7.  Such reports
shall be provided within fifteen (15) days after the end of the period covered
by such report or as otherwise mutually agreed to by the parties.  At the request of Acorda, Cardinal Health
shall furnish Acorda at reasonable times such documentation as Acorda
reasonably requests for purposes of verifying the accuracy of any report.  Cardinal Health shall also provide Acorda
with periodic oral reports including but not limited to weekly conference calls
and Manager’s reports.


 


2.8.          Project
Manager.  Cardinal Health shall
appoint a project Manager to serve as a liaison between Cardinal Health,
Representatives and Acorda regarding the performance by Cardinal Health, the
Representatives and Acorda of their respective obligations under this
Agreement.


 


ARTICLE III

COMPENSATION


 


3.1.          Amount
and Time of Payment.  Subject to the
achievement of certain gross sales receipts for the Product(s) during the Term
of this Agreement, as further described in Schedule 3.1, Acorda shall pay
to Cardinal Health the fees set forth in Schedule 3.1 attached hereto and
incorporated by reference (the “Services Fee”), which shall be payable as set
forth in the payment schedule set forth therein.


 


3.2.          Reimbursement
of Expenses.  All expenses of
Cardinal Health for which Acorda is obligated to reimburse Cardinal Health
under Schedule 3.1 subsection ”Direct Pass Through Costs” of this
Agreement, including but not limited to reasonable costs and expenses in
connection with Acorda Training Program and the POA meetings under Section 2.3(g),
shall be paid by Acorda within thirty (30) days after Cardinal Health has
submitted a statement to Acorda itemizing such expenses with reasonable
supporting documentation and original receipts.


 


8

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS


 


4.1.          By
Cardinal Health.  Cardinal Health
represents, warrants, and covenants to Acorda, on behalf of itself and each of
its Representatives and Managers, as of execution of this Agreement and during
the term of this Agreement, as follows:


 


(a)           that
Cardinal Health and the Representatives shall perform the Detailing,
supervisory, reporting and Product sample-related services in a professional
and timely manner;


 


(b)           that
Cardinal Health shall comply with all Laws and SOPs in conducting the Program
and performing its services and obligations under this Agreement;


 


(c)           when
on Acorda’s premises or on the premises of Acorda’s clients or any Target
Customer, Cardinal Health and the Representatives shall comply with all of
Acorda’s or such client’s or Target Customer’s policies regarding the conduct
of visitors of which Cardinal Health (including the Representatives and
Managers) are aware;


 


(d)           that
Cardinal Health is under no obligation to any third party that would prevent
the execution of this Agreement or interfere with its performance under this
Agreement, and it agrees promptly to inform Acorda of any event or change in
circumstances which may reasonably be expected to negatively affect Cardinal
Health’s ability to perform its obligations hereunder in the manner
contemplated by the parties;


 


(e)           that
neither Cardinal Health nor any Representative or Manager has been debarred
pursuant to the Act, been excluded from participating in a federal health care
program, including without limitation the Medicare or Medicaid programs, or
otherwise been disciplined, censured or fined by any federal or state Agency;
and if hereafter any of them is subsequently debarred under the Act, excluded
from a federal health care program or disciplined, censured or fined, or if any
of them receive notice of any pending proceeding in which such debarment,
exclusion, discipline, censure or fine could be imposed, Cardinal Health agrees
immediately to notify Acorda thereof; and


 


(f)            Cardinal
Health shall neither disclose to Acorda, nor induce Acorda to use any secret or
confidential information or material belonging to third parties.


 


4.2.          By
Acorda.  Acorda represents, warrants,
and covenants to Cardinal Health, as of execution of this Agreement and during
the term of this Agreement, as follows:


 


(a)           that
Acorda is under no obligation to any third party that would prevent the
execution of this Agreement or interfere with its performance under this
Agreement, and it agrees promptly to inform Cardinal Health of any event or
change in circumstances which may reasonably be expected to negatively affect
Acorda’s ability to perform its obligations hereunder in the manner
contemplated by the parties;


 


9

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(b)           that
Acorda shall comply with all Laws and SOPs with respect to the manufacture and
use of the Product(s) and their sale and Acorda’s performance of its
obligations under this Agreement;


 


(c)           that
the Product Promotional Materials are not false or misleading, and are in
compliance with the Act and all rules and regulations of the FDA;


 


(d)           to
the knowledge of Acorda, the manufacture, sale and distribution of the
Product(s) do not and will not during the Term of this Agreement, infringe any
valid patent or other proprietary rights of third parties, and the Product(s)
have all necessary governmental approvals and may be lawfully Detailed by
Cardinal Health and sold by Acorda; and


 


(e)           that
Acorda has not been debarred pursuant to the Act, been excluded from
participating in a federal health care program, including without limitation
the Medicare or Medicaid programs, or otherwise been disciplined, censured or
fined by any federal or state Agency; and if hereafter Acorda is subsequently
debarred under the Act, excluded from a federal health care program or
disciplined, censured or fined, or if Acorda receives notice of any pending
proceeding in which such debarment, exclusion, discipline, censure or fine
could be imposed, Acorda agrees immediately to notify Cardinal Health thereof.


 


ARTICLE V

STATUS OF CARDINAL HEALTH AND THE REPRESENTATIVES


 


5.1.          Cardinal
Health Independent Contractor.  The
relationship of Cardinal Health to Acorda hereunder is strictly as an
independent contractor.  Representatives
and Managers of Cardinal Health performing services hereunder shall not be, and
shall not be considered to be, employees of Acorda for any purpose, and shall
at all times remain employees of Cardinal Health.  Neither party shall have any responsibility
for the hiring, termination, compensation, benefits or other conditions of
employment of the other party’s employees.


 


5.2.          No
Acorda Benefits.  The Managers and
Representatives are not eligible to participate in any benefits programs or
sales bonuses offered by Acorda to its employees, or in any pension plans,
profit sharing plans, insurance plans or any other employee benefit plans
offered from time to time by Acorda to its employees, provided that the
Representatives shall be eligible to participate in Acorda incentive programs
if so requested by Acorda and approved by Cardinal Health.  Cardinal Health acknowledges and agrees that
Acorda does not, and will not, maintain or procure any worker’s compensation or
unemployment compensation insurance for or on behalf of the Managers or
Representatives.  Cardinal Health
acknowledges and agrees that it shall be solely responsible for paying all
salaries, wages, benefits and other compensation which its employees (including
Representatives and Managers) may be entitled to receive in connection with the
performance of the services hereunder and otherwise.


 


5.3.          Sales,
Use and Excise Taxes.  If any state
or local government or other taxing authority determines that sales, use or
excise Taxes (“Taxes”) (excluding income and employee related taxes,
withholding and contributions) are applicable to Cardinal Health’s performance
hereunder, Cardinal Health shall promptly accrue and Acorda shall pay such
Taxes on behalf of


 


10

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Cardinal Health to the appropriate taxing authorities,
provided that Acorda shall have the right to challenge the applicability or
amount of such Taxes and Cardinal Health will cooperate with any such
challenge.  In addition, Acorda shall be
responsible for the payment of any applicable Taxes related to Acorda’s supply
to Cardinal Health of Product Promotional Materials and Product Samples.


 


5.4.          No
Joint Venture.  Nothing contained in
this Agreement shall be construed as creating a joint venture or, as granting
to either party the authority to bind or contract any obligations in the name
of or on the account of the other party or to make any guarantees or warranties
on behalf of the other party.


 


ARTICLE VI

TRAINING


 


6.1.          Training
Programs.


 


(a)           Acorda
shall provide on-line and/or home study materials to the Managers and
Representatives as well as conduct a national training program for the
Representatives and Managers prior to the commencement of the Program, each of
which shall include such medical, technical and related legal and regulatory
information about the Product(s) and such training to familiarize the
Representatives and Managers with Acorda’s specific sales strategies and
guidelines, if any (to the extent different from those of Cardinal Health) as
Acorda deems necessary and appropriate (collectively, the “Acorda Training
Program”).  Cardinal Health shall be
responsible for ensuring that all Managers and Representatives have been
trained with respect to the SOPs, general legal and regulatory compliance
programs, training relating to sales of pharmaceutical drugs, general sales and
promotion techniques and strategies, and Adverse Event (as defined in Article XI)
reporting (collectively, the “Cardinal Health Training Requirements”).  Cardinal Health shall arrange for all
Representatives and Managers to have successfully passed the Cardinal Health
Training Requirements prior to the completion of the Acorda Training Program.  Cardinal Health shall assist Acorda with the
Acorda Training Program only to the extent requested by Acorda.  In addition to the foregoing, Cardinal Health
and Acorda shall jointly develop a plan of action (“POA”) covering the sales
strategy to be implemented in the Program, and conduct joint presentations and
meetings with the Representatives and Managers with respect thereto.  After the commencement of the Program, Acorda
and Cardinal Health shall cooperate in order to ensure that all replacement
Managers and Representatives who join the Program after its Launch Date shall
complete all training required under this Article VI.


 


(b)           In
order to qualify for assignment in a Sub-Territory, a Representative must
demonstrate thorough knowledge of the Product(s) by passing Acorda’s approved
Product(s) tests at a level of proficiency acceptable to Acorda and agreed to
by Cardinal Health.


 


6.2.          Acorda
Assistance.  During the term of this
Agreement, Acorda shall make available to Cardinal Health, free of charge, a
number of Acorda’s sales training and marketing personnel (as deemed reasonably
appropriate by Acorda) to assist Cardinal Health’s Representatives and Managers
with respect to the Training Program and additional orientation and any ongoing
training for the Representatives and Managers.


 


11

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


ARTICLE VII

SAMPLES


 


7.1.          Provision
of Samples.  If requested by a Target
Customer, the Representatives shall be authorized to provide Product samples
during a Detail pursuant to an Authorized Request.  Acorda or its distributor shall provide
samples of the Product(s) to the Representatives in accordance with Acorda’s
directions relating to sampling.  Acorda
shall determine the quantity and types of samples to be provided to the
Representatives, and the method and schedule of distribution of the
samples (including but not limited to any applicable per physician sample
limits), and provide Written Instructions related thereto, as necessary.  The Representatives shall be solely
responsible for managing the storage, handling and distribution of the samples
to the Target Customers and for requesting additional samples to replenish
their supplies.  Cardinal Health shall be
responsible for preparing periodic, collective sample requisition requests
covering all of the Representatives’ sampling supplies, and for paying all of
the costs for the storage, handling, distribution and other related costs
relating to the samples.  All samples
shall be stored and handled by Acorda and the Representatives in compliance
with the PDMA and all other Laws, SOPs and Acorda’s Written Instructions.  Acorda shall cooperate with the
Representatives to replenish Product sample supplies when depleted; provided
however, that Acorda’s failure for any reason to supply Product samples shall
not be a breach of Acorda’s obligations under this Agreement, nor shall it
excuse Cardinal Health from conducting Product Detailing as required under this
Agreement.


 


7.2.          SOPs
and Sample Accountability Program. 
Cardinal Health has established and shall maintain internal SOPs
relating to drug sampling which shall ensure that all of its Representatives
receive, store, handle, track and distribute drug samples in compliance with
Laws (including but not limited to the PDMA) and with prudent management
practices.  The SOPs comply with all Laws
and include, among other things, its Sample Materials Distribution Instructions
and sample accountability program. 
Cardinal Health shall conduct ongoing training of its Representatives
and Managers to familiarize them with its SOPs, and monitor their compliance
therewith.  The SOPs (including the
sample accountability program) require, among other things, compliance with the
following procedures:


 


(a)           all
samples are stored and handled in a clean, secure environment at room
temperature (or as otherwise required by Product Labeling);


 


(b)           Cardinal
Health maintains appropriate inventory tracking records and controls;


 


(c)           all
damaged, expired or shop-worn samples are returned or destroyed (at Acorda’s
instruction);


 


(d)           Acorda
and its distributor are informed in writing within 72 hours of receipt of any
sample shipment that contains damaged, expired, unusable or missing items
(specifying the number of such affected items);


 


12

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(e)           Cardinal
Health and its Representatives distribute samples only upon receipt of an
Authorized Request;


 


(f)            Cardinal
Health and its Representatives maintain sample distribution records, including
retaining a hard copy of each Authorized Request bearing the requestor’s
signature, as well as a copy of the corresponding receipt of the sample
(recording the name, address, professional title and signature of the person
receiving the sample);


 


(g)           Cardinal
Health and its Representatives monitor all Authorized Requests in order to
ensure that no practitioner receives (whether pursuant to one or more requests)
an aggregate number of samples in excess of any monthly or other limitation
imposed by Law, or any SOP; provided that Acorda will be contacted on a
case-by-case basis if a request is received which, if fulfilled, would exceed
any such applicable limit, and Acorda’s instructions followed with respect
thereto;


 


(h)           Cardinal
Health and its Representatives refrain from selling or trading, or offering to
sell or trade, any samples;


 


(i)            Cardinal
Health uses its best efforts to maintain a 100% sample request-to- inventory
reconciliation; and


 


(j)            Cardinal
Health generates quarterly reports for Acorda (in form and content agreed to by
the parties), containing at a minimum the information specified under “Sample
Inventory Report” in Schedule 2.7, and conducts monthly sample
reconciliations to be reported on a quarterly basis within 30 days of the end
of the quarter.


 


7.3.          Ownership;
Return of Samples.  Cardinal Health
acknowledges and agrees that Acorda’s delivery and consignment of Product
samples to Cardinal Health and the Representatives does not constitute transfer
of ownership therein, and that Acorda shall retain title to all samples until
such time as they are legally distributed to a Target Customer.  Cardinal Health further agrees that, within
30 days following the termination or expiration of this Agreement, or within 30
days from the termination or removal from the Program of a Representative
(unless such Representative has been hired or retained by Acorda), or upon
Acorda’s request at any time during the Term, Cardinal Health shall return, and
cause the Representatives to return, to Acorda any unused Product samples
provided to Cardinal Health by Acorda or its designated distributor.  Acorda shall pay or reimburse Cardinal Health
for all costs and expenses in connection with the storage and shipment of
returned samples.


 


ARTICLE VIII

TRADEMARKS AND INTELLECTUAL PROPERTY RIGHTS


 


The Product(s) shall be
Detailed by Cardinal Health’s Representatives under trademarks and logos owned
by or licensed to Acorda or an Affiliate of Acorda.  This Agreement does not constitute a grant to
Cardinal Health of any license, property right or interest in the Product(s) or
any materials comprising part of the Acorda Training Program, or any trademarks
or other intellectual property right which Acorda or an Affiliate of Acorda
owns or uses with respect to


 


13

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


the Product(s),
the Acorda Training Program, or to the name or business style of Acorda.  Cardinal Health and the Representatives shall
use the Acorda Training Program materials and the Product Promotional Materials
only for the purposes of this Agreement, and all copyright and other
intellectual property rights in the Acorda Training Program materials and the
Product Promotional Materials shall remain with Acorda.


 


ARTICLE IX

COMMUNICATIONS; MONITORING THE PROGRAM


 


9.1.          Communications
from Third Parties.  Except as
provided under Article XI hereof, Cardinal Health and its Representatives
shall use their best efforts to promptly advise Acorda of all comments,
statements, requests and inquiries of any Target Customer, the medical
profession or any other third parties relating to either the Program or the
Product(s) that are not otherwise addressed by the Product Promotional
Materials (“Third Party Communications”), of which Cardinal Health (including
the Representatives and Managers) becomes aware.  All responses to such Third Party
Communications shall be handled solely by Acorda, in its sole judgment.  Cardinal Health shall provide reasonable assistance
to Acorda to the extent requested by Acorda, and at Acorda’s cost and expense,
to fully respond to such Third Party Communications.


 


9.2.          Government
Agencies.  Cardinal Health shall
notify Acorda of all communications received by it or any Representative or
Manager from any government Agencies, including but not limited to the FDA,
concerning the Product(s) or the Program (and including without limitation,
communications relating to any AE or other safety issue) (“Agency
Communications”) within twenty-four hours of receiving such communication, by
transmitting any written documentation and/or a written synopsis of any oral
discussion, to a person designated by Acorda for such purpose.  All responses to any Agency Communication
shall be the sole responsibility of Acorda and handled by it in its sole
judgment.  Cardinal Health shall assist
Acorda with respect to responding to such Agency Communications to the extent
requested by Acorda, and at Acorda’s cost and expense.  Cardinal Health shall use its best efforts to
provide Acorda with any documents or information reasonably requested by Acorda
for purposes of responding to any Agency Communications within 24 hours of
Acorda’s request.


 


9.3.          Acorda
Communications.  In addition to
Detailing, Cardinal Health shall assist Acorda with respect to Acorda’s
communications (as reasonably requested by Acorda and at Acorda’s cost and
expense) within the Territory and shall regularly advise Acorda of market,
economic, regulatory and other developments of which Cardinal Health (including
the Representatives and Managers) may become aware which may affect the sale of
the Product(s) in the Territory.


 


9.4.          Appointment
of Coordinators.  The parties shall
each appoint an authorized coordinator of the Program mutually-acceptable to
each other (“Coordinators”) between whom all communications required or desired
to be given will be sent and between whom Detailing activities will be
coordinated.  Each party may replace its
Coordinator at any time, upon notice to the other party.  Initially during the Term, the Coordinators
for Acorda and Cardinal Health shall be Michael Hilton and Richard Denfrund,
respectively.


 


14

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


9.5.          Review
of Results.  The parties shall meet
periodically, but at least once per calendar quarter, to review and discuss the
actual results compared to the marketing plans for Detailing of the
Product(s).  Acorda shall share with
Cardinal Health the Gross Sales (as defined in Schedule 3.1) data, as well
as any other reports, audits and other data it deems appropriate (in its sole
discretion) relative to the Program.


 


ARTICLE X

INSURANCE


 


10.1.        Cardinal
Health Insurance Coverage.  Cardinal
Health shall maintain insurance coverage as follows, or shall maintain
self-insurance sufficient to meet its indemnity obligations hereunder:


 


(a)           Workers’
Compensation insurance with statutory limits of liability and Employer’s
Liability insurance in accordance with the statutory requirements of the states
in which the services are to be rendered;


 


(b)           Commercial
General Liability insurance, including completed operations and products
liability, with a combined single limit of $10,000,000; and


 


(c)           Automobile
liability insurance with a combined single limit of $5,000,000.


 


All of the foregoing
insurance policies shall cover claims on an “occurrence” basis and not on a
“claims made” basis in order to assure that incidents occurring during the Term
of this Agreement are covered under the policies even though the resulting
claim is not brought until after this Agreement has expired or has been
terminated.


 


10.2.        Acorda
Insurance Coverage.  Acorda shall
maintain Commercial General Liability insurance (primary and seconds coverage
combined), including completed operations, with a combined single limit of at
least $10,000,000 or shall maintain self-insurance sufficient to meet its
indemnity obligations hereunder.


 


10.3.        Certificates
of Insurance.  Each Party shall,
within fifteen (15) days after request by the other party, furnish a
Certificate of Insurance as evidence of the foregoing insurance.  Each party will use reasonable commercial
efforts to obtain an agreement from each insurer that such insurer will
endeavor to provide the other party thirty (30) days’ prior written notice of
any cancellation or material change of the insurance coverage required by this
Article.


 


ARTICLE XI

ADVERSE EVENT REPORTING AND REGULATORY MATTERS


 


11.1.        Immediate
Notification. Cardinal Health shall notify Medcom Solutions, at telephone
number (510) 595-8183, facsimile number (800) 367-5109, e-mail Acorda@medcomsol.com
(“Medcom”) or such other entity as designated by Acorda, in writing, as soon as
reasonably practicable but in no event more than 24 hours after it or any
Representative or Manager obtains or learns of any information relating to an
Adverse Event concerning any Product(s), including but not limited to any
package complaint or other complaints regarding any side effect, injury,
toxicity or sensitivity reaction or any


 


15

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


unexpected incidence of severity thereof associated
with the clinical uses, studies, investigations, tests and marketing of the

Product(s), whether or not determined to be attributable to the
Product(s).  Cardinal Health shall also
notify Medcom (or other designee) within 24 hours of any other adverse experience,
i.e., any unfavorable and unintended change in the structure (signs), function
(symptoms) or chemistry (laboratory data) of the body temporally associated
with the use of the Product(s), whether or not considered related thereto.  As part of such notification, Cardinal Health
shall forward to Medcom (or other designee) any related information, including,
but not limited to, initial and follow up reports, that becomes known to
Cardinal Health or any Representative or Manager from any source in any form as
soon as it becomes available, but in any event within 24 hours of becoming
aware of such information.  Cardinal
Health shall cooperate with all reasonable requests by Acorda to ensure that an
AE is sufficiently investigated, including, but not limited to seeking
additional information relating to an AE and contacting the initial reporter of
an AE.


 


11.2.        Threatened
Agency Action.  Cardinal Health shall
immediately notify Acorda in writing of any information that Cardinal Health
(including the Representatives and Managers) may obtain or learn regarding any
threatened or pending action by an Agency which may affect either the
Product(s) or the Program (including but not limited to Product recalls).  Cardinal Health shall, at the request of
Acorda and at the cost and expense of Acorda, cooperate with Acorda in
formulating a procedure for taking appropriate action in response to such
information; provided, however, that the appropriate responsive action to be
taken shall be decided exclusively by Acorda to the extent the information
regarding the threatened or pending action relates in whole or in part to the
Product(s) (as determined by Acorda in its sole judgment).  Unless compelled by law, Cardinal Health
shall not respond to an Agency without the prior written consent of Acorda.


 


11.3.        Training
Requirements.  The Cardinal Health
Training Requirements shall include appropriate instructions for
Representatives as to handling of information received or obtained subject to
Sections 11.1 and 11.2.


 


ARTICLE XII

RETURN/RECALL


 


12.1.        Returned
Products.  Acorda shall be
responsible for handling all returned Product(s), including any applicable
shipment costs and compensation or credit for the returned Product(s).  Any Product(s) inadvertently returned to
Cardinal Health shall be shipped by it to Acorda or in accordance with its
directions, in compliance with Acorda’s returned goods policy, and Cardinal
Health shall advise Acorda of the name and address of the person or entity
making the return and the reason given therefor, if any.  Acorda shall reimburse Cardinal Health’s
reasonable and documented shipping and other costs in connection with the
handling of such returned Product(s) within 45 days of delivery to Acorda of
Cardinal Health’s statement for such costs. 
Upon Acorda’s request, Cardinal Health shall provide Acorda with
documentation relating to any costs incurred by Cardinal Health in connection
with any returned Product(s).


 


12.2.        Recalled
Products.  At Acorda’s request,
Cardinal Health shall assist Acorda in obtaining, receiving and collecting any
Product(s) (including Product samples) that have been


 


16

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


recalled, and any costs reasonably incurred by
Cardinal Health with respect to participating in any such recall shall be
reimbursed by Acorda within 45 days of delivery to Acorda of Cardinal Health’s
statement for such costs, except in the event Cardinal Health’s actions under
this Agreement are responsible for the recall, in which case Cardinal Health
shall indemnify, defend and hold harmless Acorda and its officers, directors,
employees, agents and Affiliates for all costs and liabilities associated with
such a recall.  Only Acorda or an Agency
with proper jurisdiction shall have the authority to make any determination to
recall a Product.


 


ARTICLE XIII

CONFIDENTIAL INFORMATION


 


13.1.        Confidential
Information.  Each party acknowledges
and agrees that it will have access to, or become acquainted with, Confidential
Information of the other party in the course of the performance of services under
this Agreement.  For the purposes of this
Agreement, “Confidential Information” shall mean any information and materials
of either party or any of their respective Affiliates, which gives such party
an advantage over its competitors who do not possess such information and
constitutes valuable trade secrets, or information or materials which a party
otherwise considers to be confidential and/or proprietary that was revealed to
the other party as a result of entering into or performing its obligations under
this Agreement, including but not limited to, information which relates to
Product(s), the Program, Target Customers, designs, methods, research and
development, discoveries, improvements, documents, trade secrets, proprietary
rights, business affairs or employee information.  Confidential Information shall not include
any information that, as demonstrated by satisfactory evidence:


 


(a)           Was
known to the receiving party prior to execution of this Agreement without an
obligation to keep it confidential;


 


(b)           Was
lawfully obtained by the receiving party from a third party without any
obligation of confidentiality;


 


(c)           Is,
at the time of disclosure, in the public domain;


 


(d)           Becomes
part of the public domain after disclosure by publication or otherwise, except
by breach of this Agreement;


 


(e)           Is
developed by or for the receiving party independently and apart from the
disclosing party’s Confidential Information; or


 


(f)            Is
otherwise knowledge possessed by the receiving party or its employees without
access or reference to the disclosing party’s Confidential Information as the
result of their industry experience or education.


 


13.2.        Handling
of Confidential Information.  Each
party agrees that it will use its best efforts to protect the secrecy of, and
avoid disclosure or use of, any Confidential Information of the other
party.  Such measures shall include, but
not be limited to, the highest degree of care that such party utilizes to
protect its own Confidential Information of a similar nature.  Each party agrees to notify the other in
writing of any misuse or misappropriation of the other party’s


 


17

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Confidential Information.  Except as otherwise required by law, each
party shall keep all Confidential Information in confidence and shall not, at
any time during the Term hereof or for a period of ten (10) years from the
termination of this Agreement, without the disclosing party’s prior written
consent, disclose or otherwise make available, directly or indirectly, any
Confidential Information to anyone other than the receiving party’s employees
who need to know the same in the performance of their services and obligations
hereunder; provided, however, that Cardinal Health may also disclose Acorda’s
Confidential Information to its Affiliates which have a need to know the same
in the performance of the services hereunder. 
Each party shall use the Confidential Information only in connection
with the performance of their services and obligations hereunder and for no
other purpose.  Each party shall inform
its employees, and in the case of Cardinal Health, its Affiliates, of the trade
secret, proprietary and confidential nature of the Confidential Information,
and each party shall be directly responsible for any breaches of the provisions
of this Article by any such employees and Affiliates.


 


13.3.        No
Rights Granted.  The disclosure of
Confidential Information shall not be construed as or constitute an express or
implied grant of any intellectual property rights to the receiving party in
such Confidential Information, including but not limited to any right, title,
interest, or license in or to such Confidential Information.  All Confidential Information shall at all
times remain the property of the disclosing party.


 


13.4.        No
Representations.  Except as otherwise
expressly stated in this Agreement, a party disclosing any of its Confidential
Information shall not be deemed to make any representation or warranty, express
or implied, as to the accuracy or completeness of such Confidential
Information, and such disclosing party will not have any liability for any
errors or omissions therein.


 


ARTICLE XIV

TERM AND TERMINATION


 


14.1.        Term.  This Agreement shall take effect on the
Effective Date and shall continue in effect until July 31, 2007 (the
“Term”), unless terminated earlier as set forth herein.  This Agreement shall be renewable only upon
the written agreement by both parties.


 


14.2.        Termination
Without Cause.  Subject to Sections
14.7 and 17.14, and with the exception of Periods 1 and 2 (as defined in Schedule 3.1),
either party shall have the right to terminate this Agreement with no further
obligation at any time after Period 2 for any or no reason on sixty (60) days
prior written notice to the other party. 
Neither party shall have the right to terminate under this Section until
the completion of Period 2.


 


14.3.        Bankruptcy:
Insolvency.  Either party may
terminate this Agreement upon notice to the other upon the occurrence of: (a) the
entry of a decree or order for relief by a court of proper jurisdiction in an
involuntary case of the other party under the Federal Bankruptcy Code, as now
constituted or hereafter amended, or any other applicable federal or state
insolvency or other similar laws, and the continuance of any such decree or
order in effect for a period of sixty (60) consecutive days; or (b) the
filing by the other party of a petition for relief under the Federal


 


18

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Bankruptcy Code, as now constituted or hereafter
amended, or any other applicable federal or state insolvency or similar laws.


 


14.4.        Termination
For Breach.  Subject to Section 14.7
and other continuing obligations under Section 17.14, either party may
terminate this Agreement in the event of a material breach of the other party’s
obligations under this Agreement, provided that such breach has not been cured
within thirty (30) days after written notice thereof from the non-breaching
party.


 


14.5.        Termination
Due To Regulatory And Other Problems. 
If the Product is not being marketed due to regulatory problems, court or
administrative proceedings, product liability claims, recalls, raw materials
shortages, or other reasons, then, subject to Sections 14.7 and 17.14, either
party may terminate this Agreement upon thirty (30) days’ prior written notice
to the other.


 


14.6.        Termination:
Phase Out or Transition.  In the
event that this Agreement is terminated pursuant to Sections 14.2 through 14.5,
and at Acorda’s request, the parties shall discuss in good faith an appropriate
phase-out of Cardinal Health’s Detailing activities, or, if so requested by
Acorda, Cardinal Health shall provide its full cooperation and assistance in
transitioning the Program and services as reasonably requested by Acorda,
including by agreeing to promptly deliver its work in progress, data, files, reports,
materials relating to the Program and all Product Promotional Materials and
samples in its possession and control to such successor agency or to Acorda (at
Acorda’s election).


 


14.7.        Termination:
Continuing Rights.  The termination
or expiration of this Agreement shall not affect the validity and
enforceability of any right or obligation of either party hereunder that
accrued prior to, and was outstanding on, the termination or expiration
date.  Without limiting the foregoing,
the termination or expiration of this Agreement shall not affect any rights or
obligations of any party under this Agreement which are stated to survive such
termination pursuant to Section 17.14 hereof.


 


14.8.        Final
Settlement upon Early Termination. 
Promptly after the early termination of this Agreement, the parties
shall cooperate in order to jointly calculate the amount of any final Service
Fees that may have been earned by, or due from, Cardinal Health as of the
termination date.  The amount of such
Service Fees, if any, that have been earned, or that must be refunded, by
Cardinal Health shall be calculated as follows:


 


(a)           Termination by Cardinal Health
For Cause or Regulatory Problems.


 


(i)            Period 1 & 2.  If this Agreement is terminated by Cardinal
Health during Period 1 or 2 (as defined in Schedule 3.1) pursuant to (a) Section 14.4,
or (b) Section 14.5 due to a regulatory or other problem caused by a
person or entity other than Cardinal Health, then Acorda shall pay Cardinal
Health the Prorated Payment (defined in Section 14.8(c)(v))


 


(ii)           Period 3.  If this Agreement is terminated by Cardinal
Health during Period 3 (as defined in Schedule 3.1) pursuant to (a) Section 14.4,
or (b) Section 14.5


 


19

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


due to a regulatory or other problem caused by a person or entity other
than Cardinal Health and the Gross Sales up to the date of termination are at
least sixty percent (60%) of the Annual Baseline Forecast, then Acorda shall
pay Cardinal Health the Prorated Payment (defined in Section 14.8(c)).


 


(iii)          Period 4.  If this Agreement is terminated by Cardinal
Health during Period 4 (as defined in Schedule 3.1) pursuant to (a) Section 14.4,
or (b) Section 14.5 due to a regulatory or other problem caused by a
person or entity other than Cardinal Health and the Gross Sales up to the date
of termination are at least eighty-five percent (85%) of the Annual Baseline
Forecast, then Acorda shall pay Cardinal Health in accordance with the payment schedule set
forth in Schedule 3.1 notwithstanding that this Agreement was terminated
before the entire year had been completed. 
For example, if Gross Sales as of the date of termination are 90% of the
Annual Baseline Forecast, then Acorda shall pay Cardinal Health the amount due
if Gross Sales for the entire year were 90% of the Annual Baseline Forecast.


 


(iv)          No Effect on Other Remedies.  Payments under this subsection, if any, shall
be payment for services rendered and shall not be deemed to be a payment in
settlement of any claims that either party may have against the other party under
this Agreement.  Each party shall retain
all rights and remedies available to it at law or in equity.


 


(b)           Termination by Acorda For Cause or Regulatory
Problems.


 


(i)            Period 1 & 2.  If this Agreement is terminated by Acorda
during Period 1 or 2 (as defined in Schedule 3.1) pursuant to (a) Section 14.4,
or (b) Section 14.5 due to a regulatory or other problem caused or
contributed to by Cardinal Health, then Acorda shall not be obligated to make
any payments to Cardinal Health for Services rendered under this Agreement or
pay Cardinal Health the Prorated Payment (defined in Section 14.8(c)).


 


(ii)           Period 3.  If this Agreement is terminated by Acorda
during Period 3 (as defined in Schedule 3.1) pursuant to (a) Section 14.4,
or (b) Section 14.5 due to a regulatory or other problem caused or
contributed to by Cardinal Health and the Gross Sales up to the date of
termination are at least sixty percent (60%) of the Annual Baseline Forecast,
then Acorda shall pay Cardinal Health the Prorated Payment (defined in Section 14.8(c)).


 


(iii)          Period 4.  If this Agreement is terminated by Acorda
during Period 4 (as defined in Schedule 3.1) pursuant to (a) Section 14.4,
or (b) Section 14.5 due to a regulatory or other problem caused by
Cardinal Health and the Gross Sales up to the date of termination are at least eighty-five
percent (85%) of the Annual Baseline Forecast, then Acorda shall pay Cardinal
Health in accordance with the payment schedule set forth in Schedule 3.1
notwithstanding that this Agreement was terminated before the entire year had
been completed.  For example, if Gross
Sales as of the date of termination are 90% of the Annual Baseline Forecast,
then Acorda shall pay Cardinal Health the amount due if Gross Sales for the
entire year were 90% of the Annual Baseline Forecast.


 


20

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(iv)          No Effect on Other Remedies.  Payments under this Subsection shall be
payment for services rendered and shall not be deemed to be a payment in
settlement of any claims that either party may have against the other party
under this Agreement.  Each party shall
retain all rights and remedies available to it at law or in equity.


 


(c)           Calculation of Prorated Payment.  For purposes of this Section 14.8, the
amount of any “Prorated Payment” shall be calculated as set forth below.  The parties agree that the provisions of this
Subsection (c) only provide the method of calculating payments that
are due under Subsections of Section 14.8 specifically requiring payment
of the Prorated Payment and shall not create or serve as the basis for an
entitlement to any payment not otherwise provided for in Section 14.8.


 


(i)            determine
the exact number of days elapsed from the beginning of the Contract Year
through the termination date, and divide this number by 365 (the “Pro-ration
Fraction”);


 


(ii)           multiply
the Pro-ration Fraction by the Annual Baseline Forecast (as defined in Schedule 3.1)
in effect for that Contract Year (the “Prorated Baseline Forecast”);


 


(iii)          calculate
the aggregate Gross Sales (as defined in Schedule 3.1) from the beginning
of the Contract Year through the termination date, based upon data from NDC
Health (as defined hereafter) (“Gross Sales to Date”); and


 


(iv)          calculate
the percentage of the Prorated Baseline Forecast that such Gross Sales to Date
represent (the “Prorated Percentage Result”).


 


(v)           If the
Prorated Percentage Result is more than sixty percent (60%) but less
than eighty-five (85%) then the amount of the Prorated Payment shall be paid by
Acorda in an amount equal to (1) sixty percent (60%) (2) multiplied
by the Pro-Ration Fraction, (3) minus the sum total of all interim
Advances already paid to Cardinal Health in respect of prior Periods (as
defined in Schedule 3.1) of such Contract Year.  After payment of such amount, no further
Service Fees or Interim Advances shall be paid under this Agreement.


 


(vi)          If the
Prorated Percentage Result is equal to or exceeds eighty-five (85%) then
a payment shall be paid by Acorda in an amount equal to (1) the Service
Fee that would have been payable if aggregate Gross Sales for the entire
Contract Year were equal to the same Prorated Percentage Result (as set forth
in Schedule 3.1), (2) multiplied by the Pro-ration Fraction, (3) minus
the sum total of all Interim Advances already paid to Cardinal Health in
respect of prior Periods (as defined in Schedule 3.1) of such Contract
Year.  After payment of such amount, no
further Service Fees or Interim Advances shall be paid under this Agreement.


 


(d)           Termination by Either Party Without Cause.  Neither party shall have the right to
terminate pursuant to Section 14.2 at any time during Periods 1 and
2.  Thereafter, if this


 


21

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Agreement is terminated by either party in accordance
with Section 14.2, then the final Service Fee amount that may be due
hereunder shall be calculated as follows.


 


(i)            If this
Agreement is terminated by Acorda pursuant to Section 14.2, and the Gross
Sales as of the date of termination are at least sixty (60%) of the Annual
Baseline Forecast then Cardinal Health shall receive a final Service Fee
payment, if any is due, in an amount equal to:


 


(A)          if Acorda
terminates during Period 3, an amount equal to one hundred twenty-five (125%)
of the Prorated Payment (if any); and


 


(B)           if Acorda
terminates during Period 4, an amount equal to the Prorated Payment (if any).


 


(ii)           If this
Agreement is terminated by Cardinal Health pursuant to Section 14.2 and
the Gross Sales as of the date of termination are at least eighty-five (85%) of
the Annual Baseline Forecast, then it shall receive a final Service Fee
payment, if any is due, in an amount equal to:


 


(A)          if Cardinal
Health terminates during Period 3, an amount equal to seventy-five (75%) of the
Prorated Payment (if any); and


 


(B)           if
Cardinal Health terminates during Period 4, an amount equal to the Prorated
Payment (if any).


 


(iii)          After
payment of any final Service Fee determined to be due in accordance with the
foregoing, no further Services Fees or Interim Advances shall be paid under
this Agreement.


 


(e)           All
payments made to Cardinal Health under this section shall be subject to a
“true-up” as provided in Section 3.D. of Schedule 3.1.


 


14.9.        Termination:
Return of Materials.  Within sixty
(60) days following the termination or expiration of this Agreement, Cardinal
Health shall return to Acorda all Confidential Information (including but not
limited to customer lists and Target Customer information), Product Promotional
Materials, Product samples, marketing plans, forms, territory lists, reports
and any and all other tangible items provided to Cardinal Health or the
Representatives by Acorda, or prepared by or for Cardinal Health or the
Representatives based upon, incorporating or summarizing any of the foregoing
information or materials.


 


ARTICLE XV

RECORDKEEPING; AUDIT RIGHTS


 


15.1.        Cardinal
Health Record Keeping: Inspection and Audit by Acorda.  Cardinal Health shall keep accurate records
in sufficient detail (and in compliance with all Laws) as to its services and
performance under this Agreement (including but not limited to specifics
regarding actual Details made, Product samples distributed, occurrences
involving noncompliance with


 


22

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


SOPs, and AE incidents reported to it and relayed to
Acorda) as well as relating to the costs and expenses for which Acorda must
reimburse Cardinal Health under this Agreement as specified under “Direct
Pass-Through Expenses” in Schedule 3.1. 
Upon Acorda’s reasonable request made at any time or from time to time
during, or within two (2) years after, the Term of this Agreement, or at
any time hereafter that there shall be an investigation, subpoena or proceeding
undertaken, issued or pending by an Agency involving Acorda, the Product(s),
the Program or this Agreement, then at Acorda’s expense, Cardinal Health shall
permit Acorda’s designated employees or agents to have access during ordinary
business hours to such records in order to verify the accuracy thereof.  Acorda and its designated employees or agents
shall maintain in confidence all such records of Cardinal Health.  In addition, upon request by Acorda, Cardinal
Health shall also grant Acorda, without charge, reasonable access to each
facility at which Cardinal Health stores or handles any Product samples, so
that Acorda or its designee can conduct a physical inventory and reconciliation
of the samples.  The rights set forth in
this Article 15 shall not limit Cardinal Health’s obligation to provide
the oral and written reports and notices, and to support all expense
reimbursement requests with documentation, as otherwise provided in this Agreement.


 


15.2.        Overstatements.  If any such examination or audit pursuant to Section 15.1
reveals that the amount of Direct Pass-Through Expenses have been overstated,
then any excess payment made to Cardinal Health based upon such overstatement
shall be offset against any sums then payable or thereafter payable to Cardinal
Health, or promptly refunded to Acorda, at Acorda’s election.  Acorda shall pay the fees and expenses of the
employee or agent engaged to perform the audit, unless such audit reveals a
discrepancy of five percent (5%) or more for the period examined which is to
the disadvantage of Acorda, in which case Cardinal Health shall pay all
reasonable costs and expenses incurred by Acorda in the course of making such
determination, including the fees and expenses of the employee or agent.


 


ARTICLE XVI

INDEMNIFICATION


 


16.1.        Definitions.  As used in this Article 16 and this
Agreement, “Damages” shall mean all liabilities, damages, assessments, levies,
losses, fines, penalties, costs, and expenses, including, without limitation,
reasonable attorneys’, accountants’, investigators’, and experts’ fees and
expenses, sustained or incurred as a result of any third party claims, suits,
liabilities, or actions of any nature.


 


16.2.        Indemnification
by Cardinal Health.  Cardinal Health
shall indemnify, defend and hold Acorda, its Affiliates, directors, officers,
employees and agents harmless from and against any and all Damages (except to
the extent such Damages are due to the negligence, omission or intentional wrongful
actions of Acorda or the material breach of this Agreement by Acorda) directly
or indirectly arising from or related to:


 


(a)           Cardinal
Health’s breach of or failure to comply with any of its obligations under this
Agreement;


 


23

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(b)           any
inaccuracy in or breach or failure of any representation, warranty, or covenant
made by Cardinal Health in this Agreement;


 


(c)           any
negligent or wrongful act or omission on the part of Cardinal Health or its
employees or agents (including the Representatives and Managers);


 


(d)           Cardinal
Health’s violation of or failure to comply with all Laws, SOPs and Acorda
Written Instructions relating to the promotion, distribution and sale of the
Product(s), sample handling and distribution, the Cardinal Health Training
Requirements, the Program and this Agreement;


 


(e)           Detailing
of the Product(s);


 


(f)            any
federal or state claim or assessment for nonpayment or late payment by Cardinal
Health of any tax or contribution based on Cardinal Health’s income,
employee-related tax liabilities or withholding, or the status of any
Representatives or Managers as employees of Cardinal Health; or


 


(g)           any
claims or liabilities based on injury to persons or property, regardless of
when such claim or liability is asserted or incurred, resulting from or arising
out of any Representative’s or Manager’s actions or inactions while performing
the Detailing or supervising activities (including but not limited to
accidents, trespass or violation of civil ordinances).


 


16.3.        Indemnification
by Acorda.  Acorda shall indemnify,
defend and hold Cardinal Health and its Affiliates, directors, officers,
employees and agents harmless from and against any and all Damages (except to
the extent such Damages are due to the negligence, omission or intentional
wrongful actions of Cardinal Health or the material breach of this Agreement by
Cardinal Health), directly or indirectly arising from or related to:


 


(a)           Acorda’s
breach of or failure to comply with any of its obligations under this
Agreement;


 


(b)           any
inaccuracy in or breach or failure of any representation, warranty, or covenant
made by Acorda in this Agreement;


 


(c)           any
negligent or wrongful act or omission on the part of Acorda or its employees or
agents;


 


(d)           Acorda’s
violation of or failure to comply with all Laws relating to the manufacture,
sale, distribution, possession and use of the Product(s), the Program, the
Product Promotional Materials, the Acorda Training Program, and this Agreement;


 


(e)           use
by Cardinal Health of the Acorda Training Program or the Product Promotional
Materials in accordance with the SOPS, Written Instructions, and the terms of
this Agreement;


 


24

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


(f)            any
claims or liabilities for injury to or death of persons or harm to property,
regardless of when such claim or liability is asserted or incurred, resulting
from or arising out of the manufacture, use, sale, distribution or possession
of the Product(s), or a manufacturing design or defect of the Product(s), or
any failure to warn or inadequacy of warning regarding the Product(s);


 


(g)           Acorda’s
failure to pay when due or to reimburse Cardinal Health for any Taxes (as
defined in Section 5.3);


 


(h)           any
negligent or wrongful acts or omissions on the part of Acorda with respect to
Cardinal Health’s employees or Representatives; or


 


(i)            the
use by Cardinal Health, in the performance of its duties hereunder and as
specified or directed by Acorda, of any trademark, trade name, copyright,
patent or other rights which use actually or allegedly infringes on the rights
of any third party.


 


16.4.        Indemnification
Procedures.  A party (the
“Indemnitee”) which intends to claim indemnification under this Article 16
shall promptly notify the other party (the “Indemnitor”) in writing of any
pending or threatened action, claim or liability in respect of which the
Indemnitee or any of its employees or agents are entitled to
indemnification.  The Indemnitee shall
permit, and shall cause its employees and agents to permit, the Indemnitor at its
discretion, to settle any such action, claim or liability and agrees to the
complete control of such defense or settlement by the Indemnitor; provided,
however, that such settlement or defense does not require the Indemnitee to
admit to any liability, adversely affect the lndemnitee’s rights hereunder or
impose any obligations on the Indemnitee in addition to those set forth in this
Agreement.  The Indemnitee and its
employees and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any such action, claim or
liability which is the subject of indemnification.  The Indemnitee shall have the right, but not
the obligation, to be represented by counsel of its own selection and at its
own expense in connection with any indemnified claim.


 


16.5.        Limitation
on Liability.  Except in the event of
(i) Cardinal Health’s gross negligence or willful misconduct, or (ii) any
liability arising from negligent operation of an automobile by a Representative
or Manager or operation of an automobile in violation of applicable laws, in
which case there shall be no limitation of liability, the total liability of
Cardinal Health under this Agreement shall not exceed an amount equal to the
maximum total amount of Service Fees that would be paid to Cardinal Health
under this Agreement if Gross Sales exceeded 134.99% of the Annual Baseline
Forecasts over the Term of this Agreement.


 


16.6.        No
Consequential Damages.  Except with
respect to any criminal or civil fines or penalties that may be imposed on a
party hereunder, notwithstanding any provision of this Agreement to the
contrary, neither party shall be liable to the other on any theory of liability
for any special, indirect, incidental, exemplary, punitive or consequential
damages, including but not limited to lost profits, in connection with or as a
result of the transactions contemplated by this Agreement, it being the
intention of the parties that they be liable only for actual and direct damages
proven in a court of competent jurisdiction.


 


25

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


16.7.        Insurance
Offset.  For the avoidance of doubt,
no Indemnitee under this Agreement shall be required to make a claim under any
of its insurance policies with respect to Damages which the Indemnitor is
required to indemnify the Indemnitee under this Agreement and may at any time
withdraw any claims which it has filed with an insurer.  Notwithstanding the foregoing, for purposes
of calculating the amount of indemnifiable Damages hereunder, the total amount
of Damages incurred by the Indemnitee shall be adjusted to account for any (a) insurance
payments or proceeds actually received by the Indemnitee in connection with the
occurrence of the event which resulted in the incurrence of the Damages, as
well as any related increase in insurance premiums thereafter payable by the
Indemnitee, and (b) any tax gain or loss that will result from the
occurrence of such event or from its receipt payment of the indemnification
payment hereunder.


 


ARTICLE XVII

MISCELLANEOUS


 


17.1.        No
Waiver: Cumulative Remedies.  No failure
or delay on the part of either party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy
hereunder.  No waiver of any provision
hereof shall be effective unless in writing and signed by the party giving such
waiver.  The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.


 


17.2.        Captions.  Article and Section headings used
in this Agreement are for convenience only and shall not affect the
construction of this Agreement.


 


17.3.        Governing
Law.  This Agreement shall be
construed and the respective rights of the parties hereto determined according
to the substantive laws of the State of New York, exclusive of conflict of laws
principles.


 


17.4.        Severability.  If any provision of this Agreement or any
other document delivered under this Agreement is prohibited or unenforceable in
any jurisdiction, it shall be ineffective in such jurisdiction only to the
extent of such prohibition or unenforceability, and such prohibition or
unenforceability shall not invalidate the balance of such provision to the
extent it is not prohibited or enforceable nor the remaining provisions hereof,
nor render unenforceable such provision in any other jurisdiction.  In the event any provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the parties hereto shall
use their best efforts to substitute a valid, legal and enforceable provision
which, insofar as practical, implements the purposes hereof.


 


17.5.        Entire
Agreement: Modification.  This
Agreement contains the entire and exclusive agreement between the parties in
respect of the subject matter hereof and supersedes and cancels all previous
agreements, negotiations, commitments and writings between the parties hereto
in respect of the subject matter hereof. 
Except as provided herein, this Agreement may not be changed or modified
in any manner or released, discharged, abandoned or otherwise


 


26

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


terminated unless in writing and signed by the duly
authorized officers or representatives of the parties.


 


17.6.        Notices.  Any notice or request required or desired to
be given in connection with this Agreement shall be deemed to have been
sufficiently given if sent by pre-paid registered or certified mail or
facsimile transmission to the intended recipient at the address set forth below
or such other address as may have been furnished in writing by the intended
recipient to the sender.  The date of
mailing or facsimile transmission shall be deemed to be the effective date on
which notice was given, provided that all facsimile transmissions shall contain
a provision requiring the intended recipient to confirm receipt and no
facsimile transmission shall be effective unless confirmation of its receipt is
received within twenty-four hours of its transmission.


 


All notices shall be
addressed to:


 


If to
Acorda, to:


Acorda
Therapeutics, Inc.


15
Skyline Drive


Hawthorne,
NY 10532


Fax:
(914) 347-4560


Attention:   Chief Operating Officer


 


If to
Cardinal Health, to:


Cardinal
Health


7000
Cardinal Place


Dublin,
Ohio 43017


Fax:  (614) 757-6000


Attention:      Thomas Dimke


Senior
Vice President, Contract Sales and Marketing Services


 


17.7.        Execution
in Counterparts.  Agreement may be
executed in counterparts, each of which, when executed and delivered, shall be
deemed to be an original and all of which together shall constitute one and the
same document.


 


17.8.        Assignment.  This Agreement may not be assigned or
transferred by a party without the prior written consent of the other party
hereto, which consent shall not be unreasonably delayed or withheld.  Any such assignment shall not materially or
adversely affect the rights or obligations of either party to this Agreement.


 


17.9.        Public
Announcements.  Neither party will
make any press release or other public disclosure regarding this Agreement or
the transactions contemplated hereby without the other party’s express prior
written consent, except as required under applicable law or by any governmental
agency, in which case the party required to make the press release or public
disclosure shall use commercially reasonable efforts to obtain the approval of
the other party as to the form, nature and extent of the press release or
public disclosure prior to issuing the press release or making the public
disclosure.


 


17.10.      Maintenance
of Records.  Cardinal Health and
Acorda each agree that throughout the Term of this Agreement and for a period
of six years after the termination or expiration of this Agreement, each will
maintain records and otherwise establish procedures to assure compliance with
all regulatory, professional, and other applicable legal requirements which
relate to the Detailing and marketing of the Product(s) and if applicable, with
the other services and activities to be performed hereunder.


 


27

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


17.11.      Force
Majeure.  Failure of either party
hereto to fulfill or perform its obligations under this Agreement shall not
subject such party to any liability if such failure is caused or occasioned by,
without limitation, acts of God, acts of the public enemy, fire, explosion,
flood, drought, war, riot, sabotage, embargo, strikes or other labor disputes
(which strikes or disputes need not be settled), compliance with any order,
regulation, or request of government, or by any other event or circumstance of
like or different character to the foregoing beyond the reasonable control and
without the fault or negligence of such party (a “Force Majeure Event”)
provided such party uses reasonable efforts to remove such Force Majeure Event
and gives the other party prompt notice of the existence of such Force Majeure
Event.  No Force Majeure Event shall
serve to delay or excuse any payment by one party to the other then due and
owing.


 


17.12.      Compliance.  Cardinal Health and Acorda agree to undertake
all their respective obligations under this Agreement in material conformance
with all Laws.  By entering into this
Agreement, it is not the intent of the parties to enter into any financial
relationship or arrangement prohibited under state or federal fraud or abuse
regulations, including but not limited to Sec. 1128B(b) of the Social
Security Act, and any regulations promulgated thereunder, nor do the parties
hereto have any belief that the relationship and compensation arrangement
provided in this Agreement is prohibited. 
Neither party shall assert against the other that the compensation
arrangement provided in this Agreement is grounds for voiding the Agreement or
rendering the Agreement unenforceable.


 


17.13.      Survival.  The terms and provisions of Sections 2.5,
3.1, 3.3, 5.1, 5.2, 5.3, 5.4, 7.5, Articles VIII, IX, XI, XII and XIII,
Sections 14.7 through 14.10, Article XV, XVI, Section 17.3, 17.5,
17.9, 17.10, 17.12 and 17.13 hereof shall survive the termination of this
Agreement, whether such termination occur by expiration of the Term or by early
termination hereof.


 


*  *  * 
*  *


 


Signature Page Follows


 


28

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized
officers. 


 


	
  CARDINAL HEALTH
  PTS, LLC

  	
  ACORDA
  THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Thomas G.
  Dimke

  	
   

  	
  By:

  	
  /s/ Mary Fisher

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Thomas G. Dimke

  	
   

  	
  Name:

  	
  Mary Fisher

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP & GM
  CHCSS

  	
   

  	
  Title:

  	
  COO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  September 15,
  2005

  	
   

  	
  Date:

  	
  September 15,
  2005

  	
   

  
										



 


29

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Schedule 1.1(n)


 


List of Products


 


Zanaflex®
Capsules


 


30

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Schedule 2.7


 


Form of Management Report


 


	
  Report Name

  	
   

  	
  Description

  	
   

  	
  Frequency

  
	
  Territory
  Assignment Report

  	
   

  	
  Lists the
  Representatives and Managers covering each region and Sub-Territory. If a
  Sub-Territory is vacant, the report will indicate the date when the
  Sub-Territory became vacant and what alternate coverage is being applied
  (i.e. District Manager, Adjacent Rep, etc.) In addition, the report will
  indicate the current turnover rate.

  	
   

  	
  Monthly

  
	
  Territory
  Coverage Report

  	
   

  	
  For each
  Sub-Territory, the report provides the call statistics:

  	
   

  	
  Monthly and
  Quarterly

  
	
   

  	
   

  	
  •Percentage of
  call to Target Customers

  	
   

  	
   

  
	
   

  	
   

  	
  •Percentage of
  samples delivered to Target Customers

  	
   

  	
   

  
	
   

  	
   

  	
  •Average number
  of calls/day (calculated on a six month moving average).

  	
   

  	
   

  
	
   

  	
   

  	
  The report is summarized
  at the Regional and National levels.

  	
   

  	
   

  
	
  Sales Statistics
  Report

  	
   

  	
  For each
  Sub-Territory, based on NDC Health Information Services data, the report will
  show:

  	
   

  	
  Monthly and
  Quarterly

  
	
   

  	
   

  	
  •New Rx

  	
   

  	
   

  
	
   

  	
   

  	
  •Total Rx

  	
   

  	
   

  
	
   

  	
   

  	
  •Percent Change
  for New Rx

  	
   

  	
   

  
	
   

  	
   

  	
  •Percent Change
  for Total Rx

  	
   

  	
   

  
	
   

  	
   

  	
  •New Market
  Share Percent Change

  	
   

  	
   

  
	
   

  	
   

  	
  •Total Market
  Change Percent Change

  	
   

  	
   

  
	
   

  	
   

  	
  •Sales dollars
  per Sub-Territory

  	
   

  	
   

  
	
   

  	
   

  	
  •Percent change
  for sales dollars per Sub-Territory.

  	
   

  	
   

  
	
   

  	
   

  	
  The report is
  summarized at the Regional and National levels.

  	
   

  	
   

  
	
  Sample Inventory
  Report

  	
   

  	
  For each
  Sub-Territory, the report will document all the sample distribution
  activities. The report will reflect the following:

  	
   

  	
  Quarterly

  
	
   

  	
   

  	
  For each SKU:

  	
   

  	
   

  
	
   

  	
   

  	
  •Period
  beginning balance

  	
   

  	
   

  
	
   

  	
   

  	
  •Total shipments
  received

  	
   

  	
   

  
	
   

  	
   

  	
  •Total samples
  dropped

  	
   

  	
   

  
	
   

  	
   

  	
  •Total samples
  returned to distributor

  	
   

  	
   

  
	
   

  	
   

  	
  •Total
  adjustments

  	
   

  	
   

  
	
   

  	
   

  	
  •Period ending
  balance

  	
   

  	
   

  
	
   

  	
   

  	
  •Total variance
  (units / percent)

  	
   

  	
   

  
	
   

  	
   

  	
  The report is
  summarized at the Regional and National levels.

  	
   

  	
   

  
	
  Sample Inventory
  Exception Report

  	
   

  	
  The report will
  provide details on variances and adjustments related to the distribution of
  samples if any has occurred.

  	
   

  	
  Quarterly

  



 


 


31

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Schedule 3.1


 


Detail and Payment Schedule


 


Section 1.  Detail
Schedule:


 


Cardinal Health will deploy syndicated sales Representatives to deliver
the agreed number of Exclusive Details at the agreed upon frequency to Acorda
Target Customers.


 


Cardinal Health will deliver a minimum of 32,000 Exclusive Details per
year for a period of two years based on the following schedule for Year One:


 


	
  Month

  	
   

  	
  Number of Exclusive Details

  
	
  August, 2005

  	
   

  	
  2,666 Exclusive Details

  
	
  September, 2005

  	
   

  	
  2,666 Exclusive Details

  
	
  October, 2005

  	
   

  	
  2,666 Exclusive Details

  
	
  November, 2005

  	
   

  	
  2,666 Exclusive Details

  
	
  December, 2005

  	
   

  	
  2,666 Exclusive Details

  
	
  January, 2006

  	
   

  	
  2,666 Exclusive Details

  
	
  February, 2006

  	
   

  	
  2,666 Exclusive Details

  
	
  March, 2006

  	
   

  	
  2,666 Exclusive Details

  
	
  April, 2006

  	
   

  	
  2,666 Exclusive Details

  
	
  May, 2006

  	
   

  	
  2,666 Exclusive Details

  
	
  June, 2006

  	
   

  	
  2,666 Exclusive Details

  
	
  July, 2006

  	
   

  	
  2,666 Exclusive Details

  



 


 


Section 2.              Service
Fees and Payment Schedule:


 


A.            Service
Fees.  Except as otherwise expressly
provided in Section 14.9 and Section 5 of this Schedule 3.1, Cardinal Health’s
sole compensation for providing the Details and the Services will be to receive
fee payments from Acorda (the “Service Fees”) only if and to the extent
Acorda’s annual Gross Sales (as defined below) for each of Year One and Year
Two achieve a minimum of eighty-five percent (85%) of the annual Gross Sales
forecasts (as described in this Schedule) for both such Years, as specified in
advance in writing by the parties (the “Annual Baseline Forecast”) for each
Contract Year of this Agreement, as set forth in Section 2(B) of this Schedule.  Acorda shall pay the Service Fees due, if
any, in accordance with Section 3 of this Schedule 3.1.


 


B.            Annual
and Periodic Baseline Forecasts.  In
order to provide for a periodic payment schedule of Service Fees for Cardinal
Health, the Annual Baseline Forecast for each Contract Year will be divided
into four unequal portions, each corresponding to a period (a “Period”) of a
Contract Year (the “Periodic Baseline Forecasts”).  The Annual Baseline Forecast and the Periodic
Baseline Forecasts applicable to Year One of this Agreement are set forth
below.  The Annual Baseline Forecast and
Periodic Baseline Forecasts for Year Two of the Agreement will be agreed by the
parties in writing at least sixty (60) days prior to the start of Year Two, and
those forecast numbers will become effective, along with any other agreed
changes in targeting and number of Details to be delivered, upon the
commencement of Year Two.


 


For the avoidance of doubt “Gross Sales” means total actual gross sales
of the Product by Acorda, without any deductions, that are directly
attributable to prescriptions for the Product written by Target Customers
during the Term of this Agreement.  To
determine the value of each prescription to be credited to Cardinal Health,
Acorda will apply Wholesale Acquisition Cost (WAC) pricing to Target Customer
prescriptions.  Prescription data will be
based on syndicated third party data to be provided by NDC Health Information
Services (Arizona) Inc.  (“NDC Health”).


 


i               Annual Baseline Forecast.  The Annual Baseline Forecast for Year One is [*
* *], and the amount of Service Fees that may be earned by Cardinal Health in
respect of Gross Sales for Year One shall be calculated based upon the
following table:


 


	
  Gross Sales Achievement at End of Year One

  	
   

  	
  Amount
  of Service Fees

  
	
  85-89.9% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  90-94.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  95-99.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  100-100.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  101-104.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  105-109.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  110-114.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  115-119.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  120-124.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  125-129.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  
	
  130-134.99% of Annual Baseline Forecast

  	
   

  	
  [* * *]

  



 


No
Service Fees shall be earned by or payable to Cardinal Health in respect of
Year One if Gross Sales for Year One are less than eighty-five percent (85%) of
the Annual Baseline Forecast for Year One.


 


ii.             Periodic Baseline Forecasts.
The Periodic Baseline Forecasts for Year One have been allocated as follows:


 


	
  Period
  One: August 1, 2005 - September 30, 2005:

  	
   

  	
  [***]

  	
   

  
	
  Period Two: October 1, 2005 -
  December 31, 2005:

  	
   

  	
  [***]

  	
   

  
	
  Period Three: January 1, 2006 -
  March 31, 2006:

  	
   

  	
  [***]

  	
   

  
	
  Period Four: April 1, 2006- July 31,
  2006:

  	
   

  	
  [***]

  	
   

  



 


Section 3.              Services Fees and Interim
Advances.


 


A.            Earning Service Fees. Except
as provided for in section 14.8, if the total Gross Sales for a Contract
Year are less than eighty-five percent (85%) of the Annual Baseline Forecast,
Acorda shall not owe Cardinal Health any Service Fees under this Agreement. If
the total Gross Sales for a Contract Year are eighty-five percent (85%) or more
of the Annual Baseline Forecast, Acorda shall pay Cardinal Health Service Fees
in an amount agreed upon by the parties in writing based on total Gross Sales
for a Contract Year as a percentage of the applicable Annual Baseline Forecast
for such Year. The amount to be paid to Cardinal Health, if any, during the
first Contract Year is set forth in Section 2(b)(i) of this
Schedule 3.1. Cardinal Health acknowledges that achievement of individual
Periodic Baseline Forecasts of Gross Sales shall not constitute satisfaction of
the conditions required in order to earn Service Fees or a portion thereof. The
Periodic Baseline Forecasts are used herein solely as interim milestones in
order to permit Cardinal Health to receive interim advances from Acorda against
potential future Service Fees that may be earned (the “Interim Advances”).
Interim Advances, if payable, shall be paid up to three times within Year One
(after the close of Periods One, Two and Three), and the amount of each Advance
shall be determined as described in Section 3(B) below. For Year One,
Cardinal Health will be eligible to receive Interim Advances after each of the
first three Periods in Year One only if total Gross Sales aggregated from
Program Launch to the close of such Period meet or exceed 85% of the Periodic
Baseline Forecast for such Period.


 


B.            Payment of Interim Advances and
Final Payment. The amount of Interim Advance payable to Cardinal Health
with respect to any Period during Year One shall be calculated as follows:


 


(i)            calculate
the aggregate Gross Sales for the Period (or Contract Year in the case of the
final payment), based upon data provided by NDC Health (represented in the
column labeled “A” on Schedule 1);


 


(ii)           determine
the percentage of Periodic Baseline Forecast (or Baseline Forecast in the case
of the final payment) for the Period that such aggregate Gross Sales represent
(“Percentage Result”, which is represented in the column labeled “B” on
Schedule 1) ;


 


(iii)          determine
the total amount of Service Fee that would be payable if aggregate Gross Sales
for the entire current Contract Year were equal to the same Percentage Result
as for that Period (“Annualized Payout”, which is represented in the column
labeled “C” on Schedule 1);


 


(iv)          multiply
the applicable Annualized Payout amount by twenty-five percent (0.25) (the
“Unadjusted Interim Amount” amount for that Period, which is represented in the
column labeled “D” on Schedule 1); and


 


(v)           multiply
the Unadjusted Interim Amount by seventy-five percent (0.75) (the “Interim
Advance”, which is represented in the column labeled “E” on Schedule 1).


 


Each Interim Advance
shall be paid within thirty days of receipt of invoice from Cardinal Health.


 


C.            Interim Advance Payment Table.  Attached hereto as Schedule 1 is an
Interim Advance payment table that provides illustrations of Interim Advance
calculations under various Gross Sales achievement scenarios, applying the
calculation method set forth in the immediately preceding
Section 3(B).  Schedule 1
provides examples for illustration purposes only.  For clarity, the 25% remaining from the Unadjusted
Interim Amount after calculation of the Interim Advance in accordance with
Section 3.B.(v), above, is represented in Schedule 1 as the
“Corporate Pool” and will only be paid, if due, at the end of the Contract
Year.


 


D.            Calculation of Service Fees.  Upon the completion of each Contract Year,
Cardinal Health shall, in cooperation with Acorda, calculate the total Service
Fees due for such Contract Year using the formula set forth in
Section 3.B. of this Schedule 3.1, except that only steps
(i) through (iii) of Section 3(B), above, shall be
required.  Acorda shall pay the total
amount due, less any Interim Advances actually paid to Cardinal Health, within
thirty days of receipt of an invoice from Cardinal Health for such amount.  If the total Interim Advances actually paid
to Cardinal Health during such Contract Year are greater than the amount
actually due to Cardinal Health, Cardinal Health shall refund the overpayment
to Acorda within thirty days of receipt of an invoice from Acorda for such
amount.


 


E.             No Year-on-Year Adjustments.  There shall be no adjustments or carry-overs
in respect of Gross Sales or Forecasts from Year One to Year Two under this
Agreement.


 


F.             No Additional Payments.  Other than the Service Fees that may be
earned as described above and the Direct Pass-Through Expenses described below,
Acorda shall not be required to make any other payments of any kind to Cardinal
Health in consideration of its services under this Agreement.


 


G.            Field Pool.  In each instance where Service Fee is paid to
Cardinal Health hereunder, Cardinal Health shall reserve twelve and one-half
percent (12.5%) of such amount for distribution as part of its quarterly bonus
program among its Representatives and Managers. The allocation of such bonus
reserve among the Representatives and Managers shall be decided solely by
Cardinal Health, in its discretion.


 


Section 4.              Summary
of Services to be Provided by Cardinal Health.  Set forth below is a summary of the services
to be provided by Cardinal Health hereunder (collectively, the “Services”):


 


•              Detailing
of the Product(s)


•              Recruitment
for any turnover during Program for both sales Representatives and Managers


•              Payment
of salary, bonus, payroll taxes, benefits, and fleet cars for sales
Representatives and Managers.


•              Territory
travel expenses for sales Representatives and Managers


•              Project
management team that includes the following shared resources: national sales
director, account executive, operations manager, human resources coordinator,
Acorda services manager, information services manager, financial services
manager, sales trainer and a help desk


•              Assist
in Acorda Program Training and joint responsibility for POA meetings (including
meeting planning & logistics, Program agenda and strategy)


•              Sole
responsibility for Cardinal Health Training Requirements (including but not
limited to selling skills training)


•              On-going
Representative training (does not include Acorda Training Program T&E)


•              Call
reporting


•              Data
management & reporting services


•              Monthly
reporting package and quarterly reviews


•              Project
administration (supplies, postage and printing) & operational support


•              Sample
storage, handling, management and distribution responsibilities


•              Collective
sample requisition reports on behalf of all Representatives


 


Section 5.              Direct
Pass-Through Expenses of Acorda.  The
following are the sole expenses for which Acorda shall reimburse Cardinal
Health under this Agreement.  Such
expenses shall be reimbursed whether or not Acorda owes Cardinal Health any
Service Fees in accordance with the Agreement and this Schedule 3.1.


 


32

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


•              Actual
travel and meeting expenses for all required participation in any Acorda
Training Program and subsequent POA meetings, including the Program launch
meeting.


•              Cost
of Additional Promotional Activities.  To
the extent Acorda hereafter approves additional Representative promotional
activities for the Program, the parties will agree first in writing upon and
manage a budget based upon promotional programs, per Section 2.3(i) of
the Agreement.


•              Actual
costs of sample storage, handling and distribution responsibilities


 


33

















 


Certain portions of this Exhibit have been
omitted pursuant to a request for confidentiality.  Such omitted portions, which are marked with
brackets [   ] and an asterisk*, have
been separately filed with the Commission.


 


 


Schedule 1


 


Interim Advance Payment Table


 


[to be
attached]


 


34