CO-MARKETING AGREEMENT



        This
Co-Marketing Agreement (this “Agreement”) is made effective _________,
2004 (the “Effective Date”), between Cardinal Health 103, Inc., Cardinal
Health 106, Inc. and Cardinal Health 110, Inc. (individually and collectively,
“Cardinal Health”), with its principal place of business at 7000 Cardinal
Place, Dublin, Ohio 43017, Attn: Mas Kang, facsimile number (614) 757-5331, and Medical
Technology Systems, Inc. (“MTS”), with its principal place of business at
12920 Automobile Boulevard, Clearwater, Florida 33762, Attn: Todd Siegel, facsimile number
(727) 576-6311. Each of Cardinal Health 103, Inc., Cardinal Health 106, Inc. and Cardinal
Health 110, Inc. shall be jointly and severally liable for the obligations of Cardinal
Health under this Agreement. 




Recitals



        WHEREAS,
MTS manufactures, markets and sells the equipment and supplies to be used in packaging
pharmaceutical products set forth on Exhibit A (collectively, the
“Products”), which are the subject of this Agreement. 



        WHEREAS,
Cardinal Health is a pharmaceutical wholesaler with hospital/managed care, alternate care,
group purchasing organization and retail customers. 



        WHEREAS,
MTS desires Cardinal Health to provide certain marketing and sales services with respect
to the Products, and Cardinal Health desires to provide such services, all as more fully
described below. 



        NOW,
THEREFORE, the parties hereby agree as follows: 



            
         §1.       
          Exclusive Appointment; Acceptance of Appointment. 



            
                      a.    
           
          Upon the terms and conditions set forth in this Agreement, MTS hereby appoints
          Cardinal Health as its exclusive marketer for the Products solely to the
          entities set forth on Exhibit B attached hereto (hereinafter referred to
          as, “Strategic Customers”). In addition, MTS shall grant to
          Cardinal Health a first right of refusal to market, sell and distribute under
          the terms of this Agreement (i.e., add to Exhibit A) any MTS product not
          currently covered by this Agreement or any product that MTS develops during the
          Term (as hereinafter defined) of this Agreement for a period of thirty (30) days
          after notice from MTS that such product is available for general release;
          provided, however, this right of first refusal shall only apply to products that
          are substantially similar to the Products, are intended for use by the same type
          of customers as the Strategic Customers and do not compete with any product
          manufactured or marketed by Cardinal Health or any of its affiliates. 



            
                      b.       
          Cardinal Health hereby accepts such appointment and shall, at its own expense
          (except as otherwise set forth in this Agreement), use its best efforts to
          promote, market and sell the Products to the Strategic Customers. 










            
                      c.       
          Notwithstanding anything to the contrary that may be contained in this
          Agreement, but subject to the proposal process described in Section 6, MTS may
          market, sell and/or distribute the Products to Strategic Customers to which
          Cardinal Health presents a proposal but fails, within one hundred eighty (180)
          days after first providing such proposal, to enter into an agreement with
          Cardinal Health to obtain the Products, or the Strategic Customer provides
          written notice of rejection of the proposal prior to the expiration of such one
          hundred eighty (180) day period; provided, however, the pricing offered by MTS
          to such Strategic Customer for the Products shall not be more favorable than the
          pricing offered to Cardinal Health under this Agreement. Cardinal Health shall
          provide to MTS immediate notice of a Strategic Customer’s rejection of a
          proposal. 



            
                      d.       
          In the event that a Strategic Customer terminates its relationship with Cardinal
          Health and Cardinal Health removes the Products provided to such Strategic
          Customer, MTS may not, for a period of six (6) months from the date of such
          termination, market, sell or distribute the Products to such Strategic Customer.
          For a period of thirty (30) days from the date of termination of the agreement
          between Cardinal Health and the Strategic Customer, MTS shall have the right to
          purchase from Cardinal Health the Products removed from such Strategic Customer
          for an amount equal to (i) the fair market value of such Products (based on a
          five (5) year straight-line depreciation formula), or (ii) Cardinal
          Health’s remaining obligation on such Products, whichever is greater. 



            
                      e.       
          During the Term of this Agreement, neither party shall enter into an agreement
          with a competitor of the other party to market, sell, provide and/or obtain the
          Products, or new products developed by a party during the term of this Agreement
          that are substantially similar to the Products. A list of each party’s
          competitors is set forth on Exhibit C attached hereto. Notwithstanding
          the foregoing, Cardinal Health retains the right to provide services similar to
          those provided by Cardinal Health under this Agreement to Affiliates or
          subsidiaries of Cardinal Health that may manufacture or supply products similar
          to the Products or that compete with the Products. Further notwithstanding the
          foregoing, MTS or its Affiliates may enter into an agreement with a competitor
          of Cardinal Health to sell packaging supplies and labels, and other products
          that are not substantially similar to the Products or are not intended for use
          by the same type of customers as the Strategic Customers. Except as otherwise
          set forth in this Agreement, during the Term of this Agreement, MTS shall not,
          directly or indirectly, solicit or engage in negotiations or discussions with,
          disclose any of the terms of this Agreement to, accept any offer from, furnish
          any information to, or otherwise cooperate, assist or participate with, any
          person or organization (other than Cardinal Health and its representatives and
          Affiliates) regarding the provision to MTS of the services as described herein.
          For the purposes of this Agreement, “Affiliate” means, with respect to
          any entity, any other entity Controlling, Controlled by or under common Control
          with such entity, and “Control” and its derivatives means the legal,
          beneficial or equitable ownership, directly or indirectly, of at least fifty
          percent (50%) of the aggregate of all voting equity interests in an entity or
          equity interests having the right to at least fifty percent (50%) of the profits
          of an entity or, in the event of dissolution, to at least fifty percent (50%) of
          the assets of an entity and, in the case of a partnership, also includes the
          holding by an entity of the position of sole general partner. 



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           §2.       
          Term and Termination. 



            
                      a.       
          This Agreement shall commence as of the Effective Date and continue for a period
          of five (5) years (the “Initial Term”), unless earlier
          terminated in accordance with the provisions hereof. Thereafter, this Agreement
          will automatically renew for one (1)-year periods (“Renewal
          Term”) unless written notice of non-renewal is provided by either party
          at least ninety (90) days prior to the end of the Initial Term or the applicable
          Renewal Term. The Initial Term and any Renewal Term(s) shall be collectively
          referred to as the “Term.” 



            
                      b.       
          In the event either party breaches any of its representations, warranties,
          certifications or obligations under this Agreement, and such breach remains
          uncured for thirty (30) days after receipt by the non-breaching party of written
          notice thereof, then in addition to any and all other rights and remedies it may
          have, the non-breaching party may terminate this Agreement immediately upon
          written notice. 



            
                      c.       
          Notwithstanding the foregoing, either party may terminate this Agreement at any
          time without cause upon providing not less than ninety (90) days prior written
          notice thereof to the other party, provided that in the event that Cardinal
          Health exercises its right to terminate the Agreement pursuant to this Section
          2(c), the restrictions on MTS in Sections 1(d), (e) and (f) shall expire sixty
          (60) days after Cardinal Health provides such notice to MTS. 



            
                      d.       
          In the event of a Change in Control (as hereinafter defined) of MTS, Cardinal
          Health may, in its sole discretion, terminate this Agreement immediately upon
          written notice to MTS. “Change in Control” shall mean: (i) a change in
          the record or beneficial ownership of securities of MTS representing fifty
          percent (50%) or more of (A) the economic interest in MTS or (B) the voting
          power in the election of directors of MTS; (ii) the sale or other transfer of
          all or substantially all of the assets of MTS (including without limitation the
          sale or other transfer of assets or earning power aggregating more than fifty
          percent (50%) of the assets or earning power of MTS) or the merger or other
          consolidation of MTS into any other person or entity, with the result of such
          merger or other consolidation being that MTS is not the survivor; (iii) a
          liquidation or dissolution of MTS; or (iv) a transaction or series of related
          transactions having, directly or indirectly, the same effect as any of the
          foregoing. 



          
            §3.       
          Product Sales. 



            
                      a.       
          Cardinal Health’s affiliate, Cardinal Health 111, Inc., will purchase the
          Products from MTS at the prices set forth on Exhibit D attached hereto
          (unless otherwise agreed in writing by MTS), pursuant to mutually agreed upon
          terms and conditions as set forth in the Product purchase agreement(s) between
          Cardinal Health 111, Inc. and MTS for sale or lease to the Strategic Customers
          (each such agreement, a “Product Purchase Agreement”). Cardinal
          Health retains the sole right to determine the terms and conditions, including,
          but not limited to, pricing, under which to sell, license and/or lease the
          Products to the Strategic Customers; provided, however, the terms and conditions
          (excluding price and payment terms) of such sale, license or lease shall at, a
          minimum, match the terms and conditions required of Cardinal Health 111, Inc. by
          MTS in the Product Purchase Agreement. 



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                      b.       
          Except as otherwise set forth on Exhibit D or as otherwise mutually
          agreed between the parties, MTS represents and warrants that, as of the
          Effective Date of this Agreement, the Product prices set forth on Exhibit D are
          not greater than the prices offered to or paid by other customers of MTS
          (excluding the MTS National Accounts as hereinafter defined) for the Products.
          If at any time during the Term of this Agreement, MTS offers or enters into an
          agreement with any other person or entity, excluding those MTS customers (the
          “MTS National Accounts”) specified on Exhibit C,
          purchasing the Products at prices more favorable than those set forth on Exhibit
          D, this Agreement shall be amended to adjust the Product prices set forth on
          Exhibit D prospectively to match the more favorable prices. MTS and Cardinal
          Health shall review these MTS National Accounts and the circumstances
          surrounding their exclusion from this “best price” warranty to
          determine their continued applicability. 



            
                      c.       
          Strategic Customers shall receive priority from MTS with regard to field and
          customer service calls and installation scheduling as, and to the extent, set
          forth in the Product Purchase Agreement. 



            
                      d.       
          Unless otherwise specified in an applicable Product Purchase Agreement: 



            
                      
                  1.       
          Payment terms for the OnDemand® system are 33% of the purchase price is due
          upon execution of the Product Purchase Agreement, 33% of the purchase price is
          due upon delivery, and the remaining 34% of the purchase price is due thirty
          (30) days after installation. Payments for all other Products are due 30 days
          after shipment. Cardinal Health shall be responsible for all freight charges.
          The Products will be shipped to Cardinal Health or the Strategic Customer,
          F.O.B. shipping point, unless otherwise provided in a Product Purchase
          Agreement. 



            
                      
                  2.       
          If Cardinal Health fails to make any payment due under the Product Purchase
          Agreement on or before the due date, then (without prejudice to its other rights
          and remedies) MTS may charge Cardinal Health interest (both before and after
          judgement) on the undisputed amount unpaid, at the annual rate of 18% or the
          maximum rate permitted by law, whichever is less, from time to time until
          payment is made in full. Time for payment shall be of the essence. Cardinal
          Health shall provide notice of any disputed amounts to MTS within ten (10) days
          of receipt of the invoice, including a reasonable explanation of Cardinal
          Health’s good-faith basis for the dispute. 



            
                      
                  3.       
          Cardinal Health shall be responsible for all federal, state, provincial,
          municipal and value added or other taxes which are now or may hereafter be
          required in connection with or imposed upon or are in relation to the price
          payable in connection with the ownership, lease, license, bailment, rental or
          use of the Products or any component thereof. 




         §
4.       Training.



            
                      a.       
          MTS shall provide to Cardinal Health, at no charge and on mutually agreed dates
          and locations, on-site and/or off-site Product training sessions for Cardinal
          Health’s sales personnel. Cardinal Health shall assume all expenses,
          including travel and lodging, for Cardinal Health personnel attending such
          training sessions. 



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                      b.       
          MTS shall provide, at its own expense, periodic site visits and additional
          “refresher” training to Strategic Customers that utilize an OnDemand
          or MTS Series Product as may be further set forth in the Product Purchase
          Agreement(s). 



           
           §5.       
          Sales Materials and Other Marketing. 



            
                      a.       
          Cardinal Health shall develop and print, at its own cost and expense, all sales
          literature, promotional materials and similar items necessary for the promotion
          of the Products (the “Sales Materials”) based on information
          provided by MTS (the “Sales Information”). Prior to each use
          thereof, Cardinal Health shall submit all Sales Materials to MTS for its review
          and approval, such approval not to be unreasonably withheld. Cardinal Health
          shall modify any Sales Materials that MTS notifies Cardinal Health in writing
          does not conform, in any material respect, to MTS marketing standards within
          five (5) business days of receiving notice of such non-conformity from MTS. MTS
          shall inform Cardinal Health if any material changes occur which warrant changes
          in the Sales Materials so that said Sales Materials continue to remain compliant
          with this Section 5. 



            
                      b.       
          MTS warrants and represents that, to the best of its knowledge, the Sales
          Information, as originally provided by MTS, and the Sales Materials directly
          developed from such Sales Information without modification or combination, when
          approved by MTS, are true and accurate and do not infringe on any third
          party’s intellectual property right (including patent, trademark, service
          mark, copyright, trade dress, trade secret and other proprietary rights). 



            
                      c.       
          Cardinal Health warrants and represents that, to the best of its knowledge, the
          Sales Materials, as originally provided to MTS for approval, and excluding the
          Sales Information as originally provided by MTS, are true and accurate and do
          not infringe on any third party’s intellectual property right (including
          patent, trademark, service mark, copyright, trade dress, trade secret and other
          proprietary rights). 



            
                      d.       
          Except with regard to MTS Property or Proprietary Rights (as hereinafter
          defined), MTS shall have no proprietary right in the Sales Materials prepared by
          Cardinal Health. MTS shall have no right to use the Sales Materials prepared by
          Cardinal Health without Cardinal Health’s prior written consent. To the
          extent permitted by this Agreement, each party shall: (i) use all Sales
          Materials and Sales Information provided by the other party solely for purposes
          of performing their respective obligations hereunder; (ii) take all steps
          necessary to ensure that no person or entity has or will have unauthorized
          access to any of the Sales Materials and Sales Information; and (iii) not
          reproduce, modify or translate, or permit to be reproduced, modified or
          translated, any of the Sales Materials and Sales Information provided hereunder,
          or any portion thereof. 



            
                      e.       
          Cardinal Health and MTS will each provide opportunities to the other to
          participate in trade shows and other industry meetings, as applicable. Each
          party will be responsible for its expenses incurred in attending such events,
          including, but not limited to, admission fees, travel and lodging. 



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                      f.       
          Cardinal Health and MTS will co-develop additional marketing materials (i.e.,
          testimonials, effectiveness studies) and press releases or other market
          communications as may be mutually agreed upon. 



            
                      g.       
          Cardinal Health shall not make any promises or representations or give any
          warranties, guarantees or indemnities in respect of the Products except such as
          may be expressly authorized in writing by MTS. 



          
            §6.       
          Strategic Customer Proposals. 



            
                      a.       
          In order to add additional Strategic Customers to Exhibit A, each party may
          identify potential customers for the Products and suggest them as proposed
          Strategic Customers (each, a “Proposed Strategic Customer”) by
          entering the Proposed Strategic Customer in MTS’ lead tracking system. The
          proposing party will provide the other party with contact and other information
          and/or use commercially reasonable good faith efforts to arrange telephone
          conferences and meetings with the Proposed Strategic Customer to facilitate the
          parties’ evaluation of the Proposed Strategic Customer’s against
          mutually agreed qualification criteria for such Proposed Strategic
          Customer’s use of the Products. If the Proposed Strategic Customer meets
          such criteria, the Proposed Strategic Customer will be considered a
          “Strategic Customer” for the purposes of this Agreement. If the
          Proposed Strategic Customer does not meet such criteria, the Proposed Strategic
          Customer will be considered outside the scope of this Agreement. 



            
                      b.       
          The Program Managers (as hereinafter defined) shall use commercially reasonable,
          good faith efforts to jointly develop selling strategies and timelines for each
          Strategic Customer. Cardinal Health shall have primary responsibility for
          developing and presenting proposals for Strategic Customers; provided, however,
          MTS shall provide information and support in the development and presentation of
          such proposals as reasonably requested by Cardinal Health. The content and
          structure, including, not limited to the price of the Products, shall be
          determined solely by Cardinal Health. In the event MTS has a proposal pending
          with any Strategic Customer prior to execution of this Agreement, MTS shall
          provide Cardinal Health with a copy of that proposal, including applicable
          Product pricing. 



            
                      c.       
          MTS shall provide to Cardinal Health, for purposes of developing the proposals,
          an estimate of the fees associated with MTS’ freight, installation,
          facility, interface, service, supplies and other life-cycle costs associated
          with the Products. MTS shall not provide this information directly to the
          Strategic Customer, unless authorized by Cardinal Health. In addition, MTS
          shall, at its own expense, perform and/or provide all site inspections, sales
          support, customer demonstrations, and facility visits in support of Cardinal
          Health’s proposal. 



            
                      d.       
          Only Cardinal Health’s Senior Vice President – Alternate Care Sales,
          Executive Vice President – Health Systems Sales and Marketing (in
          conjunction with local field sales management) shall be authorized to present
          proposals that include MTS’ OnDemand® system. Only Cardinal Health
          sales management (i.e., Business Development Managers, Leader® Regional
          Managers, Sales Managers and Regional Sales Directors) shall be authorized to
          present proposals that include the MTS 350, 400 and 500 systems. Only Cardinal
          Health Sales Directors (or their authorized designees) shall be authorized to
          present proposals that include the Autobond®, Gemini, Surebond and
          Deblistering systems. 



6











            
                      e.       
          Cardinal Health shall promptly notify MTS in writing and in advance of all
          proposals to Strategic Customers and Prospective Strategic Customers, and all
          related meetings with such entities, and give MTS a reasonable opportunity to
          attend any such proposal presentation or meeting. Cardinal Health shall also
          provide MTS with quarterly sales forecasts, progress reports and sales reports
          with respect to sales initiatives for such Strategic Customers and Prospective
          Strategic Customers. 



          
            §7.       
          Steering Committee and Program Managers. 



            
                      a.       
          A steering committee shall be formed that consists of both Cardinal Health and
          MTS senior-level representatives (the “Steering Committee”).
          The Steering Committee shall meet on a quarterly basis, or as otherwise mutually
          agreed, at a mutually agreed upon location to establish goals and objectives of
          this Agreement and monitor performance under this Agreement, including but not
          limited to, sales and sales pipeline reporting; sales, service and customer
          issues; modifications to Exhibit B (Strategic Customers), Exhibit C
          (Competitors) and Exhibit D (Product Pricing); review of new programs, products
          and services; review of any other changes that would affect this Agreement; and
          review of MTS product forecasts for the Products. 



            
                      b.       
          Each party shall designate an employee to act as program manager (the
          “Program Manager”). The Program Managers shall serve as the
          primary point of contact under this Agreement on a day to day basis, and perform
          such other duties as may be mutually agreed upon. 



           
           §8.       
          Reserved. 



          
           §9.       
          Injunctive Relief. Each party acknowledges and agrees that the other
          party’s remedies at law for any violation or attempted violation by such
          party of any of its obligations under this Agreement would be inadequate and
          agrees that, in the event of any such violation or attempted violation, such
          other party shall be entitled to seek a temporary restraining order, temporary
          and permanent injunctions, and other equitable relief, without the necessity of
          posting any bond or proving any actual damage, in addition to all other rights
          and remedies which may be available to such other party from time to time. 



             
         §10.     
          Alternative Dispute Resolution. The parties shall use reasonable efforts
          to amicably settle, as appropriate, all disputes, controversies, or differences,
          which may arise between them. The parties agree that any dispute, controversy or
          difference that arises in connection with the Agreement, excluding those
          relating to a breach of Section 12, Confidential Information, of this Agreement,
          noncompliance with applicable law, or for which either party has the right to
          and desires to terminate this Agreement, shall first be presented to the
          respective presidents of MTS and Cardinal Health, or their designees, for
          resolution. If no resolution is reached, then such dispute shall be settled by
          three (3) arbitrators; one to be selected by MTS, one to be selected by Cardinal
          Health and the third to be selected by the two (2) arbitrators, in a binding,
          non-reviewable and non-appealable alternate dispute resolution process to be
          conducted in accordance with the rules of the American Arbitration Association.
          The existence of the dispute, the dispute resolution process and the
          arbitrators’ award shall be maintained confidential, provided that the
          arbitrators’ award may be entered as a final judgment in any court having
          jurisdiction. The arbitration shall take place in Atlanta, Georgia or such other
          mutually agreeable location, and shall apply the governing law of this
          Agreement. This process shall be the sole mechanism and forum of such
          controversy or dispute, unless otherwise expressly set forth in this Agreement.
          The provisions of this Section 10 shall not apply to those instances in which
          either party is entitled to seek injunctive relief pursuant to the terms of this
          Agreement and desires to do so. 



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            §11.     
          Proprietary Rights. 



            
                      a.
               
          Cardinal Health acknowledges that MTS and/or its licensor(s) is the owner of all
          rights, title, and interests in and to all proprietary materials and information
          (including Sales Information) that may be provided to Cardinal Health under this
          Agreement (collectively, the “MTS Property”), including without
          limitation all related patent, copyright, trademark, and other intellectual
          property rights (collectively, the “Proprietary Rights”). The
          MTS Property (in all its tangible and intangible manifestations), the
          Proprietary Rights, and all existing or new enhancements, developments,
          concepts, methods, techniques, know-how, processes, adaptations, derivative
          works, ideas, and expressions of ideas relating to the MTS Property are and will
          remain the exclusive property of MTS or its licensor(s). Except as expressly
          provided in this Agreement, Cardinal Health will have no right, title, or
          interest in the MTS Property or any Proprietary Rights. Cardinal Health will not
          make any claim or representation of ownership of the MTS Property or any right
          or interest therein (except a license, if any, granted to Cardinal Health to
          perform its obligations under this Agreement) , or permit or facilitate the
          performance of any act that is in violation of this Agreement or which might
          jeopardize the Proprietary Rights. Nothing in this Agreement constitutes a
          waiver of any rights of MTS under the U.S. or international patent, copyright or
          trademark laws or any other Federal, state or other law. 



            
                      b.       
          Upon termination of all or any portion of this Agreement for any reason,
          Cardinal Health’s rights with respect to MTS Property which is related to
          the terminated portion of this Agreement will automatically expire, and Cardinal
          Health shall immediately return such MTS Property to a return location specified
          by MTS. 



          
            §12.     
          Confidential Information. 



            
                      a.       
          Neither party shall, in any manner or at any time, directly or indirectly,
          disclose any of the other party’s Confidential Information (defined below)
          to any person, firm, association, organization or entity, or use, or permit or
          assist any person, firm, association, organization, or entity (other than the
          other party or its Permitted Recipients, as defined below) to use, any such
          Confidential Information, excepting only disclosures (1) required by law, as
          reasonably determined by the party disclosing such Confidential Information (the
          “Disclosing Party”) or otherwise deemed advisable by its legal
          counsel, or (2) made on a confidential basis to the Disclosing Party’s
          shareholders, directors, officers, employees (limited to those who need to know
          such Confidential Information in connection with the fulfillment by the
          Disclosing Party of its obligations under this Agreement), and legal,
          accounting, financial, investment and other professional advisors (collectively,
          the “Permitted Recipients”); provided that each party shall (A)
          make its Permitted Recipients aware of the requirements of this Agreement, (B)
          take reasonable steps to prohibit disclosure of such Confidential Information by
          any Permitted Recipient to any other person or entity except another Permitted
          Recipient, including without limitation at least such steps as that Party
          customarily takes to protect its own Confidential Information, and (C) be
          responsible and liable for any disclosure or use of such Confidential
          Information by any of its Permitted Recipients, except disclosures or uses
          permitted by this Agreement. 





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                      b.       
          For purposes of this Agreement, “Confidential Information” of a
          party shall mean all terms and conditions contained in this Agreement, all trade
          secrets, proprietary data, patient information, Strategic Customer data, and
          other information of a confidential nature relating directly or indirectly to
          that party or its business, including without limitation financial, tax,
          accounting, pricing and other information regarding business operations or
          structure; information relating to proprietary systems and processes;
          information relating to relationships with customers, suppliers, employees,
          independent contractors and other third parties; business plans, ideas,
          concepts, policies and procedures; marketing and advertising methods or
          practices; client lists and information regarding fees and prices for services
          or products; and any and all other information which that party is obligated to
          treat as confidential pursuant to any law or any agreement or course of dealing
          by which that party is bound; provided that Confidential Information shall not
          include the existence of this Agreement and information which (i) is or becomes
          generally known or available to the public or within the industry to which such
          information relates and did not become so known through the breach of this
          Agreement by either party, (ii) is lawfully acquired from a third party without
          any breach of any confidentiality restriction, (iii) is already in the
          possession of a party at the time it is disclosed to that party by the other
          party, or (iv) was or is independently developed by or for the other party
          without reference to the Confidential Information as evidenced by the receiving
          party’s written records. 



            
                      c.       
          Upon the written request of either party at any time, the other party shall
          promptly either, in the requesting party’s sole discretion, deliver to the
          requesting party or destroy all documents and other materials which contain any
          Confidential Information of the requesting party and which are in the other
          party’s possession or under its reasonable control. 



          
            §13.    
          Independent Contractor. The relationship between the parties is that of
          independent contractors. This Agreement does not establish or create any
          employment, franchise, partnership, joint venture, agency or other similar legal
          relationship between the parties, an employer-employee relationship between MTS
          and any employee of Cardinal Health, or an express or implied license grant by
          either party to the other party under any patent, trademark, copyright, trade
          secret, or other intellectual property right except for the limited rights
          necessary for the other party to satisfy its obligations under this Agreement.
          Neither party shall have any authority or power to bind the other party, to
          create any liability against the other party, or to incur any obligations on
          behalf of the other party in any way or for any purpose, except as expressly
          authorized in or pursuant to this Agreement, and neither party shall hold itself
          out as having any such authority. 



          
            §14.     
          Representations and Warranties. Each party represents and warrants to the
          other party that it has the right to enter into this Agreement. TO THE FULLEST
          EXTENT PERMITTED UNDER APPLICABLE LAW, AND EXCEPT FOR THE EXPRESS WARRANTIES SET
          FORTH IN THIS AGREEMENT, EACH PARTY DISCLAIMS ALL OTHER WARRANTIES, TERMS OR
          CONDITIONS, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
          INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES, TERMS OR CONDITIONS REGARDING
          MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR
          SATISFACTORY QUALITY. 




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            §15.     
          Indemnification. 



            
                      a.       
          Each party (the “indemnitor”) shall defend, indemnify and hold
          harmless the other party, its subsidiaries and affiliates, and their directors,
          officers, employees, and agents (individually and collectively, the
          “indemnitee”), from and against all third-party claims against,
          and any related losses, liabilities or damages (including reasonable
          attorneys’ fees and expenses) that are incurred by the indemnitee as a
          result of bodily injury, death or physical damage to real or tangible personal
          property (excluding software or systems), to the extent such injury, death or
          damage is caused by the negligent act or willful misconduct of the indemnitor in
          the performance of the indemnitor’s responsibilities in connection with
          this Agreement. 



            
                      b.       
          MTS shall further defend, indemnify and hold harmless Cardinal Health, its
          subsidiaries and affiliates, and their directors, officers, employees, and
          agents from and against all third-party claims against, and any related losses,
          liabilities or damages (including reasonable attorneys’ fees and expenses)
          that are incurred by Cardinal Health, directly or indirectly, as a result of or
          arising from (i) any failure by MTS to perform and observe fully all obligations
          and conditions to be performed or observed by MTS under this Agreement, (ii) any
          breach by MTS of any representation or warranty contained in this Agreement,
          (iii) any intellectual property infringement actions (including patent,
          trademark, service mark, copyright, trade dress, trade secret and other
          proprietary rights) brought by a third party in connection with the Sales
          Information as originally provided to Cardinal Health by MTS, and (iv) any
          inaccuracy in the Sales Information as originally provided by MTS to Cardinal
          Health for the Sales Materials. Notwithstanding the foregoing, MTS shall have no
          indemnification obligations under this Section 15(b) to the extent that any such
          obligation arises from or is attributable to: (1) compliance with any designs,
          specifications or instructions Cardinal Health hereafter specifically requests
          MTS to comply with; (2) any alteration or replacement by Cardinal Health or any
          third party of any Sales Materials as approved by MTS, or any Sales Information
          MTS provides to Cardinal Health (unless MTS makes such alteration or
          replacement); or (3) the use of the Sales Information or Sales Materials in
          combination with other materials not provided by MTS. 



            
                      c.       
          Cardinal Health shall further defend, indemnify and hold harmless MTS, its
          subsidiaries and affiliates, and their directors, officers, employees, and
          agents from and against all third-party claims against, and any related losses,
          liabilities or damages (including reasonable attorneys’ fees and expenses)
          that are incurred by MTS, directly or indirectly, as a result of or arising from
          (i) any failure by Cardinal Health to perform and observe fully all obligations
          and conditions to be performed or observed by Cardinal Health under this
          Agreement, (ii) any breach by Cardinal Health of any representation or warranty
          contained in this Agreement, (iii) any intellectual property infringement
          actions (including patent, trademark, service mark, copyright, trade dress,
          trade secret and other proprietary rights) brought by a third party in
          connection with Cardinal Health’s marketing, distribution and/or use of the
          Sales Materials, except to the extent such action is related to the Sales
          Information originally provided by MTS; and (iii) Cardinal Health’s misuse
          or alteration of the Sales Materials as approved by MTS. 



10 









            
                      d.       
          The indemnitor’s obligation to indemnify and hold harmless the indemnitee
          pursuant to this Section 15 is subject to the indemnitee (i) having given
          indemnitor prompt written notice of the claim or of the commencement of the
          related action, as the case may be, (ii) permitting the indemnitor to
          exclusively defend, compromise, settle or appeal any such damage claim or
          judgment, (iii) providing the indemnitor with all available information,
          assistance and cooperation, at the indemnitor’s expense, to enable the
          indemnitor to defend, compromise, settle or appeal any such damage claim or
          judgment, and (iv) being able to participate in the defense or appeal, at its
          own expense (such expense not being indemnified) with attorneys of its own
          choice. The indemnitee shall not enter into any settlement of the claim without
          the indemnitor’s prior written consent, such consent not to be unreasonably
          withheld. 



          
            §16.    
          Limitations on Liability. 



            
                      a.       
          UNDER NO CIRCUMSTANCES WILL EITHER PARTY, EACH PARTY’S AFFILIATES, OR THEIR
          RESPECTIVE OFFICERS, PARTNERS, DIRECTORS, OR EMPLOYEES, OR THIRD PARTY
          PROVIDERS, BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL
          (EXCLUDING THOSE CONSEQUENTIAL DAMAGES ARISING FROM EACH PARTY’S
          INDEMNIFICATION OBLIGATIONS AS TO THIRD PARTY CLAIMS AS SET FORTH IN SECTION 15
          ABOVE), EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST
          PROFITS AND LOST DATA, REGARDLESS OF WHETHER A PARTY IS ADVISED OF THE
          POSSIBILITY OF SUCH DAMAGES OR WHETHER SUCH DAMAGES COULD HAVE BEEN FORESEEN OR
          PREVENTED BY EITHER PARTY. 



            
                      b.       
          FURTHER, EXCEPT WITH RESPECT TO EACH PARTY’S INDEMNIFICATION OBLIGATIONS
          SET FORTH IN SECTION 15, AND EXCLUDING THOSE DAMAGES ARISING OUT OF A BREACH OF
          A PARTY’S CONFIDENTIALITY OBLIGATIONS AS SET FORTH IN SECTION 12, IN NO
          EVENT WILL THE AGGREGATE LIABILITY OF EITHER PARTY, EACH PARTY’S AFFILIATES
          OR THEIR RESPECTIVE OFFICERS, PARTNERS, DIRECTORS, EMPLOYEES AND THIRD PARTY
          PROVIDERS TO THE OTHER PARTY ARISING OUT OF OR IN CONNNECTION WITH THIS
          AGREEMENT EXCEED TWO MILLION DOLLARS ($2,000,000). 



          
            §17.    
          Non-Solicitation. During the Term of this Agreement, and for a period of
          one (1) year thereafter, neither party will, directly or indirectly, solicit for
          employment any employee of the other party or any of the other party’s
          affiliates. However, this will not prohibit either party from employing persons
          who (i) approach the hiring party on their own initiative or in response to
          public advertising by the hiring party without any direct or indirect
          solicitation or encouragement from the hiring party, or (ii) are solicited on
          behalf of the hiring party by persons involved in employment searches who have
          no access to the Agreement and who conduct the solicitation on their own
          initiative without direction on the basis of any agreement. 




11










          
            §18.     
          Insurance. 



            
                       a.       
          Each party hereto shall, at all times, maintain the following insurance
          coverages during the term of this Agreement: 



            
                           
              1.       
          Workers’ Compensation insurance with statutory limits on its employees; 



            
                           
              2.       
          Employer’s Liability — $1,000,000 per accident; 



            
                           
              3.       
          Commercial General Liability — $1,000,000 per occurrence; 



            
                           
              4.       
          Product and Completed Operations Liability — $5,000,000 per occurrence; 



            
                           
              5.       
          Business Auto Liability including Hired and Non-Owned Autos — $1,000,000
          per accident. 



            
                      b.       
          Each party shall furnish the other party with certificates of insurance
          evidencing the above coverages upon request. Such certificates or policies shall
          be in a form and underwritten by a carrier and/or placed through such
          party’s standard broker. Cardinal Health may self-insure any or a portion
          of the required insurance. 



          
            §19.    
          Notices. All notices and other communications under this Agreement to
          either party shall be in writing and shall be deemed given when (a) delivered
          personally to that party, (b) telecopied (which is confirmed) to that party at
          the telecopy number for that party set forth at the beginning of this Agreement,
          (c) mailed by certified mail (return receipt requested) to that party at the
          address for that party set forth at the beginning of this Agreement, or (d)
          delivered to Federal Express, UPS, or any similar express delivery service for
          delivery the next business day to that party at that address. Either party may
          change its address or telecopy number for notices under this Agreement by giving
          the other party notice of such change. 



          
            §20.     
          Taxes; Compliance With Laws. 



            
                      a.       
          Cardinal Health will retain sole responsibility for collecting and remitting any
          sales, use, excise, gross receipts, or other federal, state, or local taxes or
          other assessments and related interest and penalties related thereto with
          respect to the sales made by and services rendered by Cardinal Health hereunder. 



            
                      b.       
          Each party represents and warrants to the other that it complies with and shall
          comply with federal and state laws and regulations applicable to its respective
          business in performing its obligations hereunder. 



          
            §21.    
          Announcements. Neither party shall issue any press release or other
          public announcement, verbally or in writing, referring to the other party or any
          entity which it controls, is controlled by or under common control of
          such party, without the consent of such other party. Nothing contained herein
          shall limit the right of either party to issue a press release or public
          announcement if, in the opinion of such party’s counsel, such press release
          or public announcement is required pursuant to state or federal securities laws,
          rules or regulations, or other applicable laws, in which case the party required
          to make the press release or public announcement shall use its commercially
          reasonable efforts to obtain the approval of the other party as to the form,
          nature and extent of the press release or public announcement prior to issuing
          the press release or making the public announcement. 



12 











          
            §22.     
          Force Majeure. The parties’ obligations under this Agreement will be
          excused (other than payment obligations) if and to the extent that any delay or
          failure to perform such obligations is due to fire or other casualty, product or
          material shortages, strikes or labor disputes, transportation delays, change in
          business conditions (other than insignificant changes), manufacturer
          out-of-stock or delivery disruptions, acts of God, seasonal supply disruptions,
          or other causes beyond the reasonable control of the affected party, provided
          that the effects of such causes could not have been reasonably circumvented or
          avoided by, such party. 



          
            §23.     
          Non-Waiver. The failure of either party to enforce any provision of this
          Agreement will not be considered a waiver of any future right to enforce such
          provision. 



          
            §24.     
          Complete Agreement. This Agreement contains the entire agreement between
          the parties and supersedes all other agreements and understandings between the
          parties with respect to the subject matter of this Agreement. No alterations,
          additions, or other changes to this agreement shall be made or be binding unless
          made in writing and signed by both parties. 



          
            §25.     
          Governing Law; Invalid Provisions; Severability. This Agreement shall be
          governed by and construed in accordance with the laws of the State of New York.
          If this Agreement, or one or more of the provisions hereof, is held invalid,
          illegal, or unenforceable within any governmental jurisdiction or subdivision
          thereof, this Agreement or any such provision or provisions will not as a
          consequence thereof be deemed to be invalid, illegal, or unenforceable in any
          other governmental jurisdiction or subdivision thereof. If any provision of this
          Agreement is invalid, illegal or unenforceable, such invalidity, illegality or
          unenforceability will not affect any other provision of this Agreement. This
          Agreement will be construed as if such invalid, illegal or unenforceable
          provision had never been contained herein; and there will be deemed substituted
          such other mutually agreed upon provision as will most nearly accomplish the
          intent of MTS and Cardinal Health to the extent permitted by applicable law. If
          any part of this Agreement is determined to be invalid or declared null and void
          by any court of competent jurisdiction, then such part will be reformed, if
          possible, to conform to the law and, in any event, the remaining part of this
          Agreement will remain in full force and effect. 



          
            §26.     
          Successors; Assignment. This Agreement shall be binding upon, inure to
          the benefit of, and be enforceable by and against the parties and their
          respective successors and assigns. Neither this Agreement nor any of the rights,
          interests, or obligations under this Agreement shall be transferred or assigned
          by either of the parties without the prior written consent of the other party,
          which consent shall not be unreasonably withheld. 




[SIGNATURE PAGE FOLLOWS]



 13









	MEDICAL TECHNOLOGY SYSTEMS, INC.	  	CARDINAL HEALTH 103, INC.
	 	  	  	  	 
	By:	________________________________	 	By:	________________________________
	 	 	 	 	 
	Name:	________________________________	 	Name:	________________________________
	 	 	 	 	 
	Title:	________________________________	 	Title:	________________________________
	 	 	 	 	 
	Date:	________________________________	 	Date:	________________________________
	 	 	 	 	 
	 	  	CARDINAL HEALTH 106, INC.
	 	  	  	  	 
	 		 	By:	________________________________
	 	 	 	 	 
			 	Name:	________________________________
	 	 	 	 	 
			 	Title:	________________________________
	 	 	 	 	 
			 	Date:	________________________________
	 	 	 	 	 
	 	  	CARDINAL HEALTH 110, INC.
	 	  	  	  	 
	 		 	By:	________________________________
	 	 	 	 	 
			 	Name:	________________________________
	 	 	 	 	 
			 	Title:	________________________________
	 	 	 	 	 
			 	Date:	________________________________
	 	 	 	 	 





14 










EXHIBIT A 



Products 



OnDemandTM System
Products 




		
	Item #	Product Description
	  OD4-A-S	  Fully Automated Single Dose
	  OD4-SA-S	  Semi Automated Single Dose
	  OD4-SA-SS	  Semi Automated Select Seal
	  OD4-SA-U	  Semi Automated Unit Dose
	  OD4-SA-C7	  Semi Automated Care 7
	  OD4-SA-M28T	  Semi Automated Multi Dose
	  OD4-SA-M28R	  Semi Automated Multi Dose









MTS Pre-Pack Equipment Products 



		
	Item #	Product Description
	100-15	Gemini Sealer
	100-19	4-UP Autobond Sealer
	100-20	3-UP Autobond Sealer
	100-21	2-UP Autobond Sealer
	100-35	MTS-350
	100-40	MTS-400
	100-60	Deblister Machine
	100-73	Surebond Sealer
	100-80	MTS-500
	100-84	Rena Conveyor
	100-85	Label Printer Applicator





15 












EXHIBIT C 




Competitors



Cardinal Health Competitors 


	AmerisourceBergen 

	McKesson 

	Morris Dickson 

	Walsh 

	Dohmen 

	Harvard 

	Kinray 

	Rochester Drug 

	Owens & Minor 

	Omnicell 

	Other businesses whose primary source of revenue, 50% or greater, are derived from drug wholesaling services. 





MTS Competitors 


	Rx Systems 

	Drug Package 

	AutoMed 

	Shorewood 

	Jones Packaging 

	Useful Products 

	Opus 

	Medicine on Time 

	Specialty Carts 

	Artromick (excluding medical carts) 

	Euclid 







MTS National Accounts 



	Omnicare - Covington, KY
   
	PharMerica - Tampa, FL
   
	 Neighborcare - Baltimore, MD
   
	 Kindred - Louisville, KY