exv10w2



 






Exhibit 10.2




AMENDMENT TO DISTRIBUTION AGREEMENT



THIS
AMENDMENT TO DISTRIBUTION AGREEMENT (“Amendment”) is
entered into as of December 22, 2005 (the
“Effective Date”), by and between Connetics Corporation (“Connetics”) and Cardinal Health, Inc.
(“Cardinal”). Connetics and Cardinal entered into a Distribution Agreement dated December 1, 2004
(“Agreement”). The Parties desire to amend the Agreement in the manner set forth in this
Amendment. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such
terms in the Agreement.




AGREEMENT





	1.	 	The following definitions in Article 1 of the Agreement are hereby deleted and replaced in
their entirety as follows:






Commitment Period. “Commitment Period” means January 1, 2006 through
December 31, 2007, unless this Agreement is terminated earlier under the
provisions of Article 4.




NLC Program. “NLC Program” means Cardinal’s National Logistics Center,
combining a centralized, single-shipping point for all Products and improved
inventory management and shipping services.




Term. “Term” means the date first written above, through and including
December 31, 2007, unless this Agreement is terminated earlier under the
provisions of Article 4.




	2.	 	The following bullet-point is hereby added to Section 2.1 of the Agreement:






	 	•	All other NLC Program administrative services.






	3.	 	Subsection (c) is hereby added to Section 2.2 of the Agreement as follows:






	 	 	
(c) All other NLC Program distribution administrative
services.






	4.	 	Section 2.3.3 of the Agreement is hereby deleted and replaced in its entirety with the
following:






2.3.3 Monthly Purchase. Cardinal and Connetics will jointly use best efforts to
adjust inventory levels maintained by Cardinal to accurately reflect Product demand.
Cardinal shall purchase Product from Connetics monthly and
[**]




	5.	 	The bullet-points in Section 2.5.1 are hereby deleted in their entirety, and a new sentence
is hereby added following the bullet-points, as follows:






•     On hand inventory level by distribution center and any other
location and/or facility where Products are stored and/or warehoused through
the NLC Program (including brokerage locations); and





•     On order inventory level by distribution center and any other
location and/or facility where Products are stored and/or warehoused through
the NLC Program (including brokerage locations); and




**
Portions of this exhibit have been omitted and filed separately with
the SEC. Confidential treatment has been requested with respect to
the omitted portions.



 









 






•     Sales out by distribution center and any other location and/or
facility where Products are stored and/or warehoused through the NLC Program
(including brokerage locations)




Cardinal shall also provide Connetics quarterly morgue reports that must be
received by Connetics no later than the last week of each calendar quarter
during the Commitment Period.




	6.	 	The following sentence is hereby added as the last sentence of Section 3.1(c) of the
Agreement:






     (c)     The Parties agree that the benefit described above will equal
[**] of total Product purchases during any
period of the Commitment Period in which on hand inventory levels
[**]




	7.	 	Section 3.1(c)(ii) is hereby deleted and replaced in its entirety as follows:






     [**]




	8.	 	A new Section 3.5 is hereby added to the Agreement and shall read as follows:






3.5     NLC Program. In exchange for the terms and conditions set forth in this
Amendment, Connetics hereby agrees to participate in the NLC Program through
the Commitment Period. Such participation shall commence as of January 1,
2006 and shall be subject to a separate agreement between the Parties.




**
Portions of this exhibit have been omitted and filed separately with
the SEC. Confidential treatment has been requested with respect to
the omitted portions.




 









 






	9.	 	The first sentence of Article 4 of the Agreement is hereby deleted and replaced in its
entirety with the following:






This Agreement shall remain in full force through December 31, 2007, unless
terminated earlier in accordance with this Article 4.




	10.	 	Section 5.2.1 of the Agreement is hereby deleted and replaced in its entirety with the
following:






5.2.1     Protection of Confidential Information. During the Term of
this Agreement, each Party, its respective agents, employees and
representatives (collectively, the “receiving party”) may receive or have
access to confidential materials and information of the other Party (the
“disclosing party”). All such materials and information (including, but not
limited to the terms of this Agreement, Product information and demand, the
purchase plan set forth in Section 2.3.3, Inventory Reports, Sales Reports,
operations, methods, strategies, formulas, price lists, discount programs,
incentives, rebates, records of unit movement for Products, shipping and
warehousing, and confidential proprietary information from third parties),
are collectively referred to as “Confidential Information” and constitute
the property of the disclosing party. During the Term of this Agreement and
for a period of one (1) year thereafter the receiving party shall not use or
disclose to third persons (“Third Persons”) any such Confidential
Information without the disclosing party’s prior written consent, excepting
(a) disclosures made on a confidential basis to and use by the directors,
officers, employees, and agents of the receiving party who have a reasonable
need to know such information in connection with the receiving party’s
performance of this Agreement and who are bound to the receiving party by
the same obligations of confidentiality that receiving party is bound under
this Agreement; receiving party shall be responsible for compliance by such
directors, officers, employees, and agents with the terms of this Agreement,
(b) disclosures that are required by law, as reasonably determined by the
receiving party or its legal counsel, or are made on a confidential basis to
the receiving party’s attorneys, accountants, and other professional
advisors in connection with matters relating to this Agreement, and (c)
routine disclosures in the normal course of business, including to IMS/DDD
or similar organizations. The Parties intend “Third Persons” to be defined
and construed in the broadest possible fashion and to specifically include,
but not be limited to, all analysts or other persons in the financial
community.




	11.	 	Exhibit A — Products of the Agreement is hereby deleted in its entirety and replaced with a
revised Exhibit A-1 — Products attached to this Amendment.






	12.	 	The remaining provisions of the Agreement shall continue in full force and effect as though
fully set forth in this Amendment. Any conflict between the provisions of this Amendment and
the Agreement shall be resolved in favor of this Amendment.





[Remainder of Page Intentionally Left Blank]




 









 







The Parties have duly executed this Amendment as of the day first written above.




	 	 	 	 	 	 	 	 	 
	CARDINAL HEALTH, INC.	 	 	 	CONNETICS CORPORATION
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Frank Segrave
	 	 	 	By:
	 	/s/ John L. Higgins
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	Frank Segrave
	 	 	 	Name:
	 	John L. Higgins
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	Senior Vice President
	 	 	 	Title:
	 	Chief Financial Officer
	 

	 	 
	 	 	 	 	 	 





 









 






Exhibit A-1




Products




	 	 	 	 	 	 	 	 	 
	 	 	Product	 	NDC	 	Size	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Evoclin

Evoclin

Luxiq

Luxiq

Luxiq

Olux

Olux

Soriatane

Soriatane
	 	63032-0061-50

63032-0061-00

63032-0021-50

63032-0021-00

63032-0021-011

63032-0031-50

63032-0031-00

63032-0090-25

63032-0091-25
	 	50GM

100GM

50GM

100GM

50GM

50GM

100GM

10MG

25MG