Exhibit 10.18


 


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.


 


RXPEDITE


ACORDA
MARKETING SERVICES AGREEMENT


 


This Marketing Services Agreement (the “Agreement”) is
made effective as of September 19, 2003 (the “Effective Date”), by and
between Cardinal Health PTS, Inc., a corporation with offices at 7000 Cardinal
Place, Dublin, Ohio 43017 (“Cardinal Health”) and Acorda Therapeutics, Inc., a
Delaware corporation having its principal place of business at 15 Skyline
Drive, Hawthorne, New York 10532 
(“Client”).


 


Background Information


 


A.                                    Cardinal
Health and its affiliates are engaged in the business of providing contract
marketing, promotion, communication, sales and other related services to the
pharmaceutical industry.  Cardinal
Health may perform such services directly or through one of its affiliates.


 


B.                                    Cardinal
Health 401, Inc. and inChord Communications, Inc. (“inChord”) have together
developed the RxPedite Program,
pursuant to which they are able to provide pharmaceutical drug manufacturers
with comprehensive outsourced marketing communications, selling and
distribution/manufacturing capabilities to facilitate and enhance the
commercialization of clients’ pharmaceutical products.


 


C.                                    Client
is currently developing a product known as Fampridine
SR, a therapy to improve neurological function in spinal cord
injuries (the “Product”), and wishes to outsource certain commercialization
services available under the RxPedite
Program, as set forth in this Agreement.


 


Statement of Agreement


 


The parties hereby acknowledge the accuracy of the
Background Information and agree as follows:


 


§1.                               Appointment/Exclusivity.


 


(a)                                  Cardinal
Health will provide medical education and sales force services to Client with
respect to the Product as may be requested from time-to-time by Client and
agreed to by Cardinal Health (collectively, the “Services”).  Client hereby appoints Cardinal Health as
the exclusive “Agency of Record” for medical education and sales force services
relating to the Product and agrees that during the Term (as defined in
Section 14(a)) it will not grant any other person or entity the right to
provide medical education and sales force services relating to the Product
anywhere in the United States; subject, however, to Section 1(b)
below.  In the event Client desires
other commercialization services offered by Cardinal Health, such as drug development,
manufacturing, storage, distribution, product return or recall, analytical or
packaging services, the parties will negotiate the terms of such services in
good faith.


 


(b)                                  The
parties acknowledge and agree that, notwithstanding any other provision of this
Agreement, Client may enter into one or more collaboration or partnership
agreements or other similar arrangements with third parties during the Term
with respect to the


 


1

















 


development and
commercialization of the Product (each, a “Partnering Agreement”).  In any such event, Client will exercise all
reasonable efforts to cause Cardinal Health to be selected as the vendor of
choice for all or substantially all Services, with respect to the Product, to
the extent that such Services are outsourced. 
If Cardinal Health is selected as the vendor for all or any portion of
such Services, the parties will, if necessary, modify any then-current
Workplans (as defined in Section 3(a)) including the Budgets therein, to
reflect the modified Services as a result of such Partnering Agreement. If,
despite the exercise by Client of all reasonable efforts to cause Cardinal
Health to be selected as the vendor of choice, Cardinal Health is not selected
to be the vendor of a substantial portion of the Services with respect to the
Product in the United States as a result of the Partnering Agreement, then
Cardinal Health will no longer be the Agency of Record for the Services
relating to the Product, and either party may terminate this Agreement in
accordance with the provisions of Sections 14(d) and 14(f).


 


§2.                               Services.


 


(a)                                  Cardinal
Health will, from time-to-time and/or upon request by Client during the Term,
prepare and provide to Client, one or more proposed workplans (each, a
“Proposed Workplan”) outlining the specific Services that Cardinal Health
proposes to perform on Client’s behalf or that Client requests Cardinal Health
to perform on its behalf.  Such Services
may include, but are not limited to: 
(i) recruiting and hiring specialty sales representatives appropriately
qualified with the level of education and experience necessary for promoting
the Product, (ii)  training and
maintaining specialty sales representatives for the Product, (iii) establishing
a sales force of specialty sales representatives in the United States to
promote the Product (the “Sales Force”), and (iv)  providing medical education services.


 


(b)                                  Each
Proposed Workplan provided to Client pursuant to Section 2(a) will
include, at a minimum, a detailed summary of the specific Services to be
provided by Cardinal Health and Cardinal Health’s good faith estimate of the
anticipated fees and costs (a “Budget”) associated with all projects
(“Projects”) to be undertaken by Cardinal Health under such Proposed
Workplan.  Client may request additional
information to be included in a Proposed Workplan and Cardinal Health will use
all reasonable efforts to provide such additional information.  Each Proposed Workplan will be submitted for
Client’s approval under the procedures described in Section 3 below.


 


(c)                                  Following
approval by both parties of a Proposed Workplan for one or more Projects (as
provided in Section 3(a)), Cardinal Health will, subject to Client’s
direction and instruction or any amendment of the approved Workplan in
accordance with Section 7, perform or coordinate the performance of those
Services that are included in such Workplan. Cardinal Health will exercise all
reasonable efforts to perform the Services on a timely basis and within the
Budget, and Client will exercise all reasonable efforts to assist Cardinal
Health in doing so by making available to Cardinal Health all information
pertaining to the Product that is necessary for Cardinal Health’s performance
of such Services and cooperating with Cardinal Health in expediting its review
of all materials submitted by Cardinal Health for Client’s approval.


 


(d)                                  Cardinal
Health will perform the Services under this Agreement through various
affiliates of Cardinal Health.  During
the Term, Cardinal Health agrees that the specific


 


2

















 


Cardinal Health
affiliates providing Services to Client under this Agreement will refrain from
providing medical education and sales force services for any product that competes
against the Product and has substantially the same indication as the Product,
without first obtaining Client’s written consent, which shall not be
unreasonably withheld.  For purposes of
clarification, the foregoing restriction shall not restrict any Cardinal Health
affiliate which is not providing Services to Client under this Agreement from
providing medical education and sales force services to any other customer for
products that compete against the Product.


 


§3.                               Client
Approval.


 


(a)                                  Each
Proposed Workplan submitted to Client by Cardinal Health in Section 2 is
subject to the review and written approval of Client prior to the time Cardinal
Health or any of its affiliates incur liability to third parties in connection
with the Projects contained in such Proposed Workplan.  Once a Proposed Workplan is approved by both
parties, such approved workplan shall be referred to as a “Workplan,” and it
shall govern the performance for Client of the Services covered by such
Workplan.  For clarity, neither Cardinal
Health nor its affiliates will perform any Services or incur any expenses with
respect to such Services, and Client will not be obligated to pay for any
Services, except in accordance with a Workplan that has been approved by
Client.


 


(b)                                  All
drafts of any proposed journal advertisements, training materials, media copy,
advertisements or other promotional material used to promote the Product
(collectively, the “Promotional Material”) will be submitted to Client for
review at least two (2) weeks prior to publication or use whenever practicable
; provided, however, that the arties understand and agree that such two (2)
week period will necessarily be shortened from time to time to reflect special
deadlines and circumstances not within the reasonable control of Cardinal
Health.  Client shall be solely
responsible for reviewing and approving the content of all Promotional Material
and related Services prior to use of such Promotional Material and performance
of related Services to make certain that all content in such Promotional
Material and any and all related Services comply with all federal, state and
local laws and all applicable industry standards and practices generally
applicable to Cardinal Health’s and Client’s industry, including, without
limitation, any applicable research guidelines, ethics and standards
established by the American Medical Association, the Food and Drug
Administration (“FDA”), the standards and guidelines outlined in the PhRMA
Code, the standards and guidelines outlined in the Office of Inspector General
(OIG) Guidance, and the Federal Food, Drug and Cosmetic Act and the regulations
promulgated thereunder (collectively, “Laws”). 
Client hereby acknowledges that Cardinal Health shall not conduct a
legal review of the content of the Promotional Materials and/or related
Services and that Cardinal Health is relying solely on Client to make certain
that the content of Promotional Material and related Services comply with all
Laws.  Cardinal Health will ensure that
the content of the final copy of Promotional Material and related Services is
identical to the draft content of such Promotional Material and related
Services as approved by Client.


 


(c)                                  Client
will have the right to make any editorial changes it desires prior to
publication or use, with any charge for such change to be consistent with the
budget procedures outlined in Section 3(d) below; provided, however, that
Client must notify Cardinal Health in writing of either its approval or
disapproval and/or required editing of Promotional Material as


 


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.


 


promptly as
practicable, but in no event less than forty-eight (48) hours prior to the
planned publication or use.


 


(d)                                  The
initial Budget for a specific Project included in a Workplan will necessarily
include fee and cost estimates based upon initial concepts and preliminary
estimates, and Cardinal Health will be authorized to commence work and incur
expenses on that particular Project based upon Client’s approval of the
Workplan containing such initial Budget and up to an amount not to exceed
[* * *] of the fees and costs in such approved Budget.  Cardinal Health will submit a revised Budget
to Client at any time during performance of a Project if fees and costs for
such Project are anticipated to exceed the initial Budget by more than
[* * *], and this revised estimate must be approved by Client in
writing before work on such Project continues. 
Once final concepts for a Project are approved and final fee and cost
estimates can be obtained, Cardinal Health will submit a final Budget for
Client’s written approval if the initial Budget needs to be increased by more
than [* * *] as a result of such final cost estimates.  Cardinal Health will use all reasonable
efforts to complete the Services within the approved Budget.  In the case where, despite such efforts,
cost estimates to complete the Services exceed the initial Budget by more than
[* * *], Cardinal Health agrees to negotiate with Client in good
faith a revised Budget that is acceptable to both parties.  In any event, Client’s written approval is
required prior to any increase of the Budget for a Project by more than
[* * *] from the initial Budget and for any further increases
thereafter.


 


§4.                               Joint
Commercialization Committee. 
Promptly following the Effective Date, a joint commercialization
committee (the “Committee”) will be formed consisting of an equal number of
representatives, such number to be mutually agreed by the parties, from each of
Client, Cardinal Health, and inChord. 
Each party may replace any of its representatives at any time, and from
time to time, by giving written notice to the other party.  The Committee will be chaired by a Client
representative, and the Committee will meet at such locations as reasonably
determined by the chair to discuss and coordinate the overall marketing and
sales strategy for the Product, relevant Workplans and Budgets therein
associated with the Product, and any other relevant topics relating to the
commercialization of the Product.  The
Committee will convene at least four (4) times annually or more frequently as
the parties deem necessary and meetings may be held by audio or video
teleconference, with the consent of each party; provided that at least one (1) meeting per calendar year
shall be held in person.  The parties
agree that the purpose of the Committee is solely to provide a forum for the
parties to discuss, monitor and coordinate activities and communications
relating to the performance of the Services and provide recommendations
relating thereto to the parties.  The Committee
does not have the authority to approve or modify Workplans or Budgets, or to
amend this Agreement.


 


§5.                               Cardinal
Health Compensation.  In
consideration for the Services that are rendered to Client under this
Agreement, Cardinal Health will invoice Client and Client will pay Cardinal
Health as follows:


 


(a)                                  As
compensation for performance by Cardinal Health and its affiliates of the
Services, Client will pay a fee (the “Cardinal Health Fee”) for each Project as
specified in the approved Budget for such Project.  Such Cardinal Health Fee for the Services performed in a
particular month will be determined as follows:


 


4

















 


(i)                                    Total
fees for such Services shall be calculated based on the applicable Cardinal
Health and its affiliates’ rates as set forth in the applicable Budget; and


 


(ii)                                Such
total fees then shall be reduced by the amount (if any) of the pre-determined
discount amount to which Client is entitled (any such discount, a “Discount
Amount”), where such Discount Amount will be determined as described in the
Discount Matrix attached as Exhibit A, and such discounted fees shall be the
“Cardinal Health Fee” for such Project for such month.


 


(b)                                  The
Cardinal Health Fee for each Project will be invoiced to Client by Cardinal
Health on a monthly basis promptly after the beginning of each month as
specified in the approved Budget, and Client will pay each such invoice within
thirty (30) days of receipt thereof.  Each
such invoice will specify with reasonable detail all the charges for Services,
and the basis for any Discount Amount used in arriving at the Cardinal Health
Fee.


 


(c)                                  All
Discount Amounts actually allowed will be aggregated and, if applicable, paid
to Cardinal Health by Client in accordance with the terms and conditions
contained in the Discount Payment Matrix attached as Exhibit B.


 


(d)                                  Client
will reimburse Cardinal Health for actual, verifiable costs incurred for
obtaining from third parties any printing, photography, market research, selling
aids, direct mail, reference material, color graphic reproductions, exhibit
panels, honoraria, conference/meeting expenses and other products, services and
supplies purchased by Cardinal Health on behalf of Client for a Project under
this Agreement (“Client Reimbursable Expenses”) without Cardinal Health
mark-up, provided, however, that the aggregate costs for such Client
Reimbursable Expenses are included in the Budget of the relevant Workplan
approved in advance by Client and is subject to the provisions of
Section 3(d) with respect to any increase in such costs. Fifty percent
(50%) of the estimated Client Reimbursable Expenses for each Workplan (as set
forth in the applicable Budget) will be invoiced by Cardinal Health upon
Client’s approval of the Workplan, and the balance of the Client Reimbursable
Expenses will be invoiced on a monthly basis after such initial advance payment
has been fully credited against actual costs incurred (as shown by invoices
provided and credits shown), as such expenses are incurred by Cardinal Health,
or as otherwise agreed to by the parties as specified in the Budget.  Client will pay each such invoice within
thirty (30) days of receipt thereof.


 


(e)                                  Client
will reimburse Cardinal Health for its reasonable, verifiable travel expenses
(including, without limitation, transportation, lodging and meals), fax,
photocopying, telephone, overnight or other delivery, postage, shipping and
other expenses associated with the performance of Services under this Agreement
(“Out-of-Pocket Expenses”), without any Cardinal Health mark-up.  An estimate of the Out-of-Pocket Expenses
for each Project shall be included in the Budget of the relevant Workplan
approved in advance by Client and is subject to the provisions of
Section 3(d) with respect to any increase in such expenses. Out-of-Pocket
Expenses will be invoiced by Cardinal Health on a monthly basis, as incurred,
and Client will pay each such invoice within thirty (30) days of receipt
thereof.


 


(f)                                    Sales,
use and other taxes will be included in the Budget and reimbursed by Client in
a similar manner to other expenses associated with each Project; provided,
however,


 


5

















 


that Cardinal
Health will be responsible for all federal, state and local taxes imposed on
Cardinal Health’s income or in connection with the employment of Cardinal
Health’s full or part-time employees.


 


§6.                               Payment
Terms.  Cardinal Health will submit
invoices to Client on a monthly basis or as otherwise agreed by the parties in writing.  Payment terms will be net thirty (30) days
from the date of the receipt, with interest accruing on any late payment at the
rate of one and one-half percent (1.5%) per month until paid.  Cardinal Health will provide Client with
appropriate supporting detail with each invoice to allocate expenses by Project
and the specific activities undertaken in such Project.  All payments due under Section 5 will
be made payable to: the Cardinal Health
entity named on the relevant invoice and mailed to the address set forth
on such Cardinal Health invoice.  Client
and Cardinal Health will meet periodically to review projected fees and costs
compared to actual fees and costs on all Projects, and appropriate adjustments
will be made to Workplans as necessary from time to time to reflect mutually
approved changes in the scope of the work to be performed.


 


§7.                               Amending
Workplans.  Subject to the terms of
this Section 7, Client reserves the right to modify or cancel any
previously approved Workplan.  In such
event, Cardinal Health will promptly take all reasonable steps necessary or
appropriate to carry out Client’s instructions; provided, however, that Client
will continue to be responsible for paying Cardinal Health for (a) all work
performed and expenses incurred prior to Cardinal Health’s receipt of
notification of such change, provided that such work and expenses were incurred
by Cardinal Health on Client’s behalf in accordance with the relevant Workplan
approved by Client, (b) all non-cancelable commitments incurred by Cardinal
Health prior to its receipt of notification of such change, provided that such
commitments were incurred by Cardinal Health on Client’s behalf in accordance
with the relevant Workplan approved by Client, (c) all expenses incurred by
Cardinal Health in carrying out Client’s revised instructions, and (d) any
other cancellation or other similar fees specifically agreed to by the parties
in a Workplan, if any.  Notwithstanding
the foregoing, Client may not modify or cancel Projects in a fashion that would
be inconsistent with Agency’s role as the exclusive “Agency of Record” under
Section 1.


 


§8.                               Ownership
of Technology; Work Made For Hire. 
Client will maintain ownership and maintenance of the NDA, all
clinical/scientific data  and any other
information related to the Product.


 


(a)                                  Work
Product.  Cardinal Health agrees and
acknowledges that, unless otherwise agreed to by the parties in a Workplan,
Client will own all right, title and interest in and to all ideas, artwork,
illustrations, audiovisual works, audio recordings, images, photographs, video,
graphics, multimedia works, on-line products, sounds, text, notes, sketches,
drawings, reports, inventions and Promotional Material, whether patentable or
copyrightable, or other copyrightable works conceived or created by Cardinal
Health or Cardinal Health’s affiliates or third party subcontractors in the
course of performing the Services pursuant to this Agreement and which are
accepted and paid for by Client (collectively, the “Work Product”).  Such Work Product will be deemed “works made
for hire,” and in any event, Cardinal Health hereby assigns to Client, and
shall cause its affiliates and subcontractors (as applicable) to assign to
Client, all right, title and interest in and to such Work Product and all
intellectual property rights related thereto. 
If Work Product is lost, damaged, or destroyed while in Cardinal
Health’s custody or


 


6

















 


control, Cardinal
Health will be liable to Client for the replacement cost of such Work
Product.  Upon Client’s request at any
time during the Term or thereafter, Cardinal Health will promptly transfer all
Work Product to Client.


 


(b)                                  Brand
Features.  Subject to retained third
party rights disclosed to Client in advance in accordance with Section 9,
all trademark(s), trade name(s), logo(s), slogan(s), and advertising plan(s)
that are created by Cardinal Health and/or its affiliates for Client and which
are accepted and paid for by Client under this Agreement (the “Brand Features”)
will be the property of Client and regarded as “works made for hire.” Cardinal
Health will not adopt, suggest or recommend the use of any Promotional Material
or Brand Feature of which Cardinal Health knows, or in the exercise of
reasonable diligence, should know, is identical to or confusingly similar to
that being used by a third party. 
Cardinal Health hereby assigns to Client, and shall cause its affiliates
and subcontractors (as applicable) to assign to Client, all of its rights,
title and interest to such items, together with all of the goodwill associated
therewith, subject only to reserved third party rights.


 


(c)                                  Further
Acts.  Cardinal Health and its
affiliates shall cooperate with Client or its designee(s), both during and
after the Term, to execute such documents and take such other actions as Client
deems necessary for Client to obtain ownership and to apply for, secure, and
maintain copyright, trademark or other proprietary protection of Work Product
and Brand Features in the United States and/or worldwide.  Cardinal Health will not be responsible for
initiating any such application, but will cooperate with Client as reasonably
requested.  Client will pay or reimburse
Cardinal Health for any out-of-pocket expenses associated with such
cooperation.  If Client is unable  for any reason to secure Cardinal Health’s
signature to any document required to apply for or execute any copyright,
trademark or other applications with respect to any Work Product or Brand
Features, Cardinal Health hereby irrevocably designates and appoints Client and
its duly authorized officers and agents as its agents and attorneys in fact to
act for and on Cardinal Health’s behalf to execute and file any such
application and to do all other lawfully permitted acts to further the issuance
of copyrights, trademarks or other rights thereon with the same legal force and
effect as if executed by Cardinal Health.


 


(d)                                  Cardinal
Health Proprietary Material. 
Project tracking software, algorithms, and other intellectual property
owned by Cardinal Health and/or one or more Cardinal Health affiliates and used
by Client in connection with the Services (“Cardinal Health Proprietary
Material”) will remain the sole property of Cardinal Health at all times.  Cardinal Health shall, prior to the use of
any Cardinal Health Proprietary Material in the course of providing the
Services, notify Client of such use. 
Client agrees to discontinue the use and return to Cardinal Health all
Cardinal Health Proprietary Material promptly following termination of this
Agreement.


 


§9.                               Third
Party Approvals.


 


(a)                                  Cardinal
Health will be responsible for obtaining appropriate consents, authorizations
and approvals from third parties for use of approved Promotional Material
prepared by Cardinal Health in connection with the Services; provided, however,
that Client will maintain its own medical affairs personnel (including
physicians and staff) to review and support the marketing and sales efforts
(including Promotional Material) on behalf of the Product and


 


7

















 


will be
responsible for obtaining and providing all appropriate consents,
authorizations and approvals in connection with materials provided to Cardinal
Health for inclusion in the Promotional Materials and for scientific or medical
papers or scientific consultation required in connection with the Promotional
Material and the Services rendered by Cardinal Health.  Client will have sole and exclusive
authority for managing all regulatory affairs associated with the Product
including, but not limited to: (i) all necessary government filings and
approvals for the Product; (ii) adverse event reporting to the FDA; (iii)
product recalls; (iv) all clinical development associated with the Product; and
(v) communications with regulatory authorities. Client will promptly
communicate to Cardinal Health all regulatory and other information relevant to
Cardinal Health’s performance of Services in connection with the Product.


 


(b)                                  Certain
Promotional Material may contain the intellectual property of third parties
that Cardinal Health has the right to use pursuant to a license granted to
Cardinal Health (or its affiliates), or other arrangement between a third party
and Cardinal Health (or its affiliates). 
Such license or other arrangement between a third party and Cardinal
Health (or its affiliates) may permit Client to use such intellectual property
only in connection with a specific Project or campaign, and would require
additional payments for any different or extended use by Client.  Cardinal Health will obtain approval from
the relevant third party as required under the relevant license or arrangement
for use of such third party intellectual property in specific Projects for Client.  Cardinal Health will notify Client prior to
use of any such third party intellectual property in a specific Project of any
material conditions or limitations relating to such use, including but not
limited to any conditions or limitations which, if breached, will obligate
Client to pay additional fees or charges. 
Client will be solely responsible for any fees or other charges
associated with its different or extended use of intellectual property so
licensed from a third party in breach of the applicable conditions or
limitations of such use; provided that Client will not be responsible for such
fees or charges if Cardinal Health fails to notify Client in writing in advance
of its use of any third party intellectual property and the conditions and
limitations related thereto.  Cardinal
Health makes no representations with regard to use of Promotional Material
outside of the United States; however, Cardinal Health will use all reasonable
efforts to obtain such rights for Client if requested to do so.


 


§10.                        Right
of First Negotiation.


 


(a)                                  Product
Related Compounds.  If Client
controls or materially influences decisions regarding Services and is not
restricted by a Partnering Agreement, Client agrees during the Term that
Cardinal Health will be designated as the Agency of Record and perform those
Services required by Client with respect to future indications for the Product.


 


(b)                                  Other
Compounds.  If Client controls or
materially influences decisions regarding use of Services with respect to a
molecule, compound or product described at the end of this Section 10(b)
and is not restricted by a Partnering Agreement with respect to such molecule,
compound or product, Client agrees during the Term to provide Cardinal Health
with an exclusive right of negotiation for a period of sixty (60) days following
delivery to Cardinal Health of a request for proposal and related background
materials (“RFP”) to provide Services, provided that such Services are
necessary and will be outsourced.  The
molecules, compounds or products that are subject of the foregoing rights are:
(i) products resulting from Client’s other molecules or compounds in
development, (ii) products resulting from molecules or compounds


 


8

















 


which Client
purchases, licenses or otherwise assumes rights from a third party, or (iii)
any pharmaceutical human therapeutic product that Client purchases, licenses or
otherwise assumes commercialization rights from a third party.


 


§11.                        Indemnification.  Each party will indemnify the other as
follows:


 


(a)                                  Cardinal
Health will indemnify, defend and hold Client and its officers, directors,
agents, employees and affiliates (collectively, the “Client Group”) harmless
from and against any liabilities, damages, losses or expenses, including
reasonable attorneys’ fees, any of them may sustain or incur as a result of any
claim, suit or proceeding (“Claim”) made, brought or threatened by third
parties and based upon or resulting from (i) Cardinal Health’s or its
affiliate’s negligence, willful misconduct or breach of this Agreement,
including but not limited to, Cardinal Health’s breach of its representations
and warranties under this Agreement or any Workplan and (ii) any Work Product
or Brand Features that are alleged to constitute plagiarism, idea
misappropriation, or that infringe third party intellectual property
rights.  Cardinal Health’s obligations
under this section include all time charges and expenses (including
reasonable attorneys’ fees) incurred in connection with any subpoena, discovery
demand or other directive having the force of law or any governmental inquiry
served upon Client that relates to Cardinal Health or its business.  The provisions of this paragraph will not
apply to a Claim to the extent that such Claim arises as a result of the
negligence or willful misconduct of Client or any member of the Client Group or
Client’s breach of this Agreement.


 


(b)                                  Client
will indemnify, defend and hold Cardinal Health and its officers, directors,
agents, employees and affiliates (collectively, the Cardinal Health Group”)
harmless from and against any Claim made, brought or threatened by third
parties and based upon or resulting from (i) Client’s or its affiliates’
negligence, willful misconduct or breach of this Agreement including but not
limited to, Client’s breach of its representations and warranties under this
Agreement; (ii) any product liability or other Claim based upon the use or
efficacy of any Product; (iii) the manufacture, sale, or distribution of the
Product, (iv) content of Promotional Material that has been provided by Client
or approved by Client in advance of publication; and (v) any use of Promotional
Material by Client outside the scope of any third party license of which
Cardinal Health has notified Client in accordance with Section 9(b). Client’s
obligations under this section include all time charges and expenses
(including reasonable attorneys’ fees) incurred in connection with any
subpoena, discovery demand or other directive having the force of law or any
governmental inquiry served upon Cardinal Health that relates to Client or its
business. The provisions of this paragraph will not apply to a Claim to the
extent such Claim arises as a result of the negligence or willful misconduct of
Cardinal Health or any member of the Cardinal Health Group or any Cardinal
Health Group member’s breach of this Agreement.


 


(c)                                  Each
party’s agreement to indemnify, defend and hold the other party harmless is
conditioned on the indemnified party (i) providing prompt written notice to the
indemnifying party of any Claim subject to indemnification under this
Section 11; (ii) permitting the indemnifying party to assume full
responsibility to investigate, prepare for and defend against any such Claim,
(iii) assisting the indemnifying party, at the indemnifying party’s reasonable
expense, in the investigation of, preparation for and defense of any Claim, and
(iv) not compromising or settling such Claim without the indemnifying party’s
written consent.


 


9

















 


§12.                        Confidential
Information.  Neither party will,
during the Term and for a period of five (5) years thereafter, without the
other party’s prior written consent, disclose to any third party any of the
other party’s Confidential Information, except that either party may disclose
the other party’s Confidential Information to its affiliates, inChord and
inChord affiliates solely as necessary for their performance of the Services,
provided that the party conveying the other party’s Confidential Information
will inform each recipient of the confidential nature of such information and
will use all reasonable efforts to cause each recipient to receive and hold
such information in accordance with the terms of this Agreement.  Each party will, during the Term and for a
period of five (5) years thereafter, keep the other party’s Confidential
Information secret and confidential, will use reasonable efforts to cause its
affiliates, employees, representatives and agents to keep such Confidential
Information secret and confidential, and will take reasonable precautions to
prevent any use or disclosure of such Confidential Information except in the
performance of the Services in accordance with the terms of this Agreement.


 


(a)                                  For
purposes of this Agreement, “Confidential Information” means  information disclosed hereunder by, or on
behalf of, Cardinal Health or Client to the other party, whether of a
technical, business or other nature, including but not limited to non-public
information which relates to Cardinal Health’s (including its affiliates) or
Client’s trade secrets, product or service offerings, proprietary rights or
business affairs.


 


(b)                                  Exceptions
to Confidential Information. 
Confidential Information does not include any information that, as
evidenced by competent written proof: (i) was known to the receiving party
prior to its disclosure by the disclosing party; (ii) is lawfully obtained by
the receiving party from a third party, as a matter of right and without
restriction on disclosure; (iii) is disclosed in public literature or becomes
generally available to the public through no violation of this Agreement by the
receiving party; or (iv) was independently developed or obtained by the
receiving party without violation of this Agreement.


 


(c)                                  Permitted
Disclosures. Notwithstanding the foregoing, a party may disclose
Confidential Information of the other party to third parties to the extent such
disclosure is required by order of a court, government agency or the like
having competent jurisdiction; provided that, in the event such
information is required to be disclosed pursuant to this Section 12(c),
the party required to make such disclosure will promptly notify the other party
prior to such disclosure, will disclose only what is reasonably necessary to
comply with such order, and will use reasonable efforts to cooperate with such
other party to allow assertion of whatever exclusions, exemptions or
confidential treatment that may be available to it under applicable law or
regulation.


 


(d)                                  It
is understood and agreed that Cardinal Health may list Client as one of its
RxPedite clients when furnishing proposals to other prospective clients or in
client listings in trade publications and directories.


 


§13.                        Force
Majeure.  Neither party will be
liable to the other for failure to perform when and as specified in this
Agreement (exclusive of payment obligations) if such failure to perform is
caused by war, fire, flood, strike, labor dispute, public disaster, accident,
serious illness, act of God, act of terrorism, act of governmental authority
(including rule or regulation),


 


10

















 


or other similar
contingencies (a “Force Majeure”) beyond the reasonable control of the
non-performing party and which materially interferes with such party’s ability
to perform its obligations hereunder. 
In the event of such a Force Majeure, the party so affected will be
excused from performance hereunder for the period of time attributable to the
Force Majeure; provided that such party uses and continues to use all
reasonable efforts to overcome such Force Majeure.


 


§14.                        Termination.


 


(a)                                  The
term of this Agreement will commence on the Effective Date and continue for a
period equal to the longer of: (i) five (5) years thereafter, or (ii)
twenty-four (24) months following the Program Launch, unless terminated earlier
pursuant to the termination provisions below, or extended by written agreement
of the parties.  The term “Program
Launch” will mean the first Monday after completion of the Training Program (as
defined in Section 3.1 of the Workplan for Detailing Services) by at least
fifty (50) of the Representatives.  As
used herein, “Term” will mean the term of this Agreement as specified above.


 


(b)                                  Either
party will have the right to effect an early termination of this Agreement if
the other party breaches any material obligation of this Agreement and fails to
cure such breach as provided herein. 
Following a material breach, the non-breaching party will provide the
breaching party with written notice of the specific reason or reasons for the
non-breaching party’s intention to terminate the Agreement early, and will
provide the breaching party with (i) sixty (60) days to correct any
non-performance or breach other than non-payment, or (ii) thirty (30) days to correct
such breach in the case of non-payment. 
If the breaching party fails to correct the specified non-performance or
breach within the time period specified in the foregoing sentence (or, in the
case of a breach other than non-payment, if such breach is not reasonably
capable of cure within sixty (60) days, the breaching party fails to commence
cure of the specified non-performance within sixty (60) days and diligently
pursue completion of the cure thereafter), then the non-breaching party may
immediately effect an early termination this Agreement upon written notice to
the breaching party.


 


(c)                                  Either
party may terminate this Agreement effective upon written notice to the other
party, if the other party becomes insolvent or admits in writing its inability
to pay its debts as they become due, files a petition for bankruptcy, makes an
assignment for the benefit of its creditors or has a receiver, trustee or other
court officer appointed for its properties or assets.


 


(d)                                  Either
party may terminate this Agreement under the circumstances described in
Section 1(b) upon sixty (60) days prior written notice to the other party.


 


(e)                                  Upon
termination of this Agreement for any reason, Cardinal Health will cease work
on all Projects and will give to Client a written report on the status of all
Services. Each party will cooperate with the other and make reasonable efforts
to facilitate a smooth and efficient transition of all pending Projects to
Client or a successor agency designated by Client.  Client will pay Cardinal Health for all work performed and
expenses incurred prior to the effective date of termination of this Agreement
and for all non-cancelable commitments incurred by Cardinal Health prior to
such time.  Any funds previously paid to
Cardinal Health by Client


 


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.


 


which are in
excess of compensation and/or expenses to which Cardinal Health is entitled
through the termination of this Agreement will be promptly returned to Client.


 


(f)                                    Upon
termination of this Agreement pursuant to Section 14(d), Client will pay
to Cardinal Health the following amounts: 
(i) if such termination is effected by Client prior to Product launch or
within six (6) months thereafter, then the sum of (1) the Aggregate Discount
Amounts (as such term is defined in Exhibit A) actually given by Cardinal
Health, and (2) a premium payment in the amount of [**] of the Aggregate
Discount Amounts actually given by Cardinal Health and (ii) if such termination
is effected by Client at any time more than six (6) months after the date of
Product launch, then the sum of (1) the Aggregate Discount Amounts actually
given by Cardinal Health and not already repaid in accordance with the
Repayment Rate set forth in Exhibit B and (2) a premium payment in the amount
of [***] of the Aggregate Discount Amounts actually given by Cardinal
Health.  Client will pay the total
amount due under this Section 14(f) in four (4) equal quarterly
installments, the first of which is due on the first day of the calendar
quarter immediately following the effective date of termination under
Section 14(d).


 


§15.                        Records
and Audit.  For a period of two (2)
years following the termination of this Agreement, each party will maintain
records, in commercially reasonable form, detail, and accuracy, relating to the
Services, Product revenues, and other information reasonably relevant to the
calculation of the Cardinal Health Fees and Discount Amounts.  During the Term and for a period of two (2)
years thereafter, each party agrees that it will provide relevant information
and access to relevant records to an independent third party accountant upon
reasonable prior notice and during normal business hours for the purpose of
inspection, examination and audit. All examinations of records will take place
at the site at which the records are regularly kept and will be at the
examining party’s sole expense.


 


§16.                        Limitation
of Liability.  IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL,
INDIRECT, CONSEQUENTIAL OR SIMILAR DAMAGES (INCLUDING BUT NOT LIMITED TO
DAMAGES FOR INDIRECT LOSS OF PROFITS, LOSS OF BUSINESS REPUTATION OR THE LIKE)
ARISING DIRECTLY OR INDIRECTLY OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.


 


§17.                        Insurance.


 


(a)                                  Cardinal
Health.  Cardinal Health shall, at
its own cost and expense, obtain and maintain in full force and effect the
following insurance during the Term: (i) Commercial General Liability insurance
with per-occurrence and general aggregate limits of not less than one million
dollars ($1,000,000); (ii) Workers’ Compensation and Employer’s Liability
Insurance with statutory limits for Workers’ Compensation and Employer’s
Liability insurance limits of not less than one million dollars ($1,000,000);
(iii) Professional Services Errors & Omissions Liability Insurance with per
claim and aggregate limits of not less than ten million dollars
($10,000,000).  In the event that any of
the required policies of insurance are written on a claims made basis, then
such policies shall be maintained during the Term and for a period of not less
than three (3) years following the termination or expiration of this
Agreement.  Cardinal Health shall obtain
a waiver from any insurance carrier with whom Cardinal Health carries


 


12

















 


Workers’
Compensation insurance releasing its subrogation rights against Client.  Client shall be named as an additional
insured under the Commercial General Liability insurance policies.  Cardinal Health shall furnish certificates
of insurance for all of the above noted policies and required additional
insured status to Client as soon as practicable after the Effective Date of the
Agreement and upon renewal of any such policies.  Each insurance policy that is required under this
Section shall be obtained from an insurance carrier with an A.M. Best
rating of at least A- VII.


 


(b)                                  Client
Insurance.  Client shall, at its own
cost and expense, obtain and maintain in full force and effect the following
insurance during the Term: (i) Products and Completed Operations Liability
Insurance with per-occurrence and general aggregate limits of not less than ten
million dollars ($10,000,000); and (ii) Workers’ Compensation and Employer’s
Liability Insurance with statutory limits for Workers’ Compensation and
Employer’s Liability insurance limits of not less than one million dollars
($1,000,000).  In the event that any of
the required policies of insurance are written on a claims made basis, then
such policies shall be maintained during the entire Term and for a period of
not less than three (3) years following the termination or expiration of this
Agreement.  Client shall obtain a waiver
from any insurance carrier with whom Client carries Workers’ Compensation
insurance releasing its subrogation rights against Cardinal Health.  Cardinal Health shall be named as additional
insureds under the Products and Completed Operations Liability insurance
policies.  Client shall furnish
certificates of insurance for all of the above noted policies and required
additional insured status to Cardinal Health as soon as practicable after the
Effective Date of the Agreement and upon renewal of any such policies.  Each insurance policy that is required under
this Section shall be obtained from an insurance carrier with an A.M. Best
rating of at least A- VII.


 


§18.                        Representations
and Warranties.  


 


(a)          Mutual
Representations and Warranties. 
Each party hereby represents and warrants that:


 


(i)                                    such
party is duly organized and validly existing under the laws of the state of its
organization and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof;


 


(ii)                                such
party is duly authorized to execute and deliver this Agreement and to perform
its obligations hereunder;


 


(iii)                            this
Agreement is a legal and valid obligation binding upon such party and
enforceable in accordance with its terms;


 


(iv)                               the
execution, delivery and performance of this Agreement by such party does not
conflict with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound; and


 


(v)                                   such
party will perform the Services set forth herein in conformance with applicable
federal, state and local laws and regulations including, but not limited to,
the regulations and guidelines of the Food, Drug and Cosmetic Act.


 


13

















 


(b)          Cardinal
Health Representations and Warranties.  
Cardinal Health hereby represents and warrants that:


 


(i)                                    all
Work Product and Brand Features will be original works of Cardinal Health, its
affiliates or its third party subcontractors;


 


(ii)                                Cardinal
Health and its affiliates will obtain all rights and licenses to any toolsets
or other software embedded in Work Product, which rights shall extend to Client
(subject to Section 9(b));


 


(iii)                            Cardinal
Health and its affiliates will not create Work Product or Brand Features that
Cardinal Health knows or reasonably should have known, infringes the
intellectual property rights of a third party;


 


(iv)                               Cardinal
Health and its affiliates will not grant, directly or indirectly, any rights or
interest to third parties whatsoever in Work Product or Brand Features without
the prior written approval of Client;


 


(v)                                   Cardinal
Health and its affiliates (1) are not currently involved in any litigation, and
is unaware of any pending litigation proceedings, relating to its role in the
provision of medical education and sales force services for any third party
with respect to a pharmaceutical product; and (2) have not received any
warnings from the FDA (or any regulatory body in a country other than the
United States) relating to medical education and sales force services it has
provided to third parties with respect to a pharmaceutical product; and


 


(vi)                               Cardinal
Health and its affiliates will not employ, contract with or retain any person
in any capacity to perform Services under this Agreement if such a person is
debarred by the FDA under 21 U.S.C. § 335(a) or disqualified as described in 21
C.F.R. §812.119.


 


§19.                        Notice.  All notices required or permitted to be
given under this Agreement must be in writing and will be addressed to the
appropriate party at the address specified below or  such other address as may be specified by a party in writing in
accordance with this Section 19, and will be deemed to have been duly
given (a) when received, if hand-delivered or sent by a reputable overnight
courier service, (b) five (5) business days after mailing, if mailed by
first-class certified or registered mail, postage prepaid, return receipt
requested, or (c) when received as evidenced by confirmation of transmission,
if sent by facsimile, provided that the sender calls and notifies the recipient
prior to sending such facsimile.


 


Cardinal Health PTS, Inc.


Healthcare Marketing Services


1800 Valley Road


Wayne, New Jersey 07470


Attention: 
Chief Financial Officer


Tel:  (973)
709-3003


Fax:  (973)
709-3203


 


14

















 


Acorda Therapeutics, Inc.


15 Skyline Drive


Hawthorne, NY 10532


Attention: Director of
Contracts and Grants


Tel:  (914) 347-4300


Fax (914) 347-4560


 


§20.                        Complete
Agreement.  This Agreement,
including the exhibits attached hereto and each Workplan, contain the entire
agreement between the parties and supersede all prior or contemporaneous
discussions, negotiations, representations, or agreements relating to the
subject matter herein.  No changes to
this Agreement will be made or be binding on any party unless made in writing
and signed by an authorized representative of each party to this Agreement.


 


§21.                        Alternate
Dispute Resolution.  If a dispute,
controversy or disagreement (“Dispute”) arises between the parties in
connection with this Agreement, then the Dispute shall be presented to the
respective president or senior executive of Cardinal Health and Client for
their consideration and resolution. If such executives cannot reach a
resolution of the Dispute within forty-five (45) days of such referral, then
such Dispute shall be resolved by binding Alternative Dispute Resolution in
accordance with the then existing commercial arbitration rules of The CPR
Institute for Dispute Resolution (“CPR”), 366 Madison Avenue, New York, NY
10017. Arbitration shall be conducted in New York, New York.


 


§22.                        Jurisdiction.  This Agreement will be governed by the laws
of the State of New York without regard to conflicts of laws principles.


 


§23.                        No
Benefit to Others.  The
representations, warranties, covenants and agreements contained in this
Agreement are for the sole benefit of the parties hereto and their affiliates,
successors and assigns, and they shall not be construed as conferring any
rights on any other persons.


 


§24.                        Severability.  Any provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  To the extent legally permissible, the
parties shall use good faith efforts to agree to replace any invalid or
unenforceable provision of this Agreement with a valid provision that shall
implement as much as permitted the commercial intent of the invalid or unenforceable
provision.


 


§25.                        Subcontractors.  Cardinal Health will be permitted to enter
into subcontracts for the provision of portions of the Services to be supplied
under this Agreement with the prior written approval by Client (subject to
Section 28, and with such approval not to be unreasonably withheld),
provided that such right to subcontract will not remove or limit Cardinal
Health’s duties, rights, obligations, or liabilities to Client under this
Agreement.  Any agreements entered into
by Cardinal Health with third party subcontractors for the performance of
Services under this Agreement shall, at a minimum, provide for ownership and
allocation of intellectual property rights with respect to Work Product and
Brand Features and for obligations of


 


15

















 


confidentiality
and non-use of Confidential Information that are consistent with the intent and
terms of this Agreement.  Cardinal
Health will ensure that each subcontractor who has contributed to Work Product
or Brand Features will execute an assignment to Cardinal Health of all of such
subcontractor’s right, title and interest in and to such Work Product or Brand
Features to enable compliance by Cardinal Health with the assignment
obligations of Section 8 with respect thereto.


 


§26.                        Successors
and Assigns.  Neither party will be
permitted to assign or transfer its rights, duties or obligations under this
Agreement without the prior written consent of the other party, which consent
will not be unreasonably withheld. 
Notwithstanding the foregoing, upon the occurrence of a sale of the
Product, merger, consolidation or other similar corporate transaction affecting
either party (a “Special Event”), the benefits and obligations of this
Agreement shall automatically pass to the successor entity without prior
written consent of the other party; provided, however, that if, following a
Special Event affecting Client (a) Cardinal Health’s continued performance of
Services would result in an impermissible conflict as defined in
section 2(d) with one or more of its other clients, Cardinal Health may
effect an early termination of this Agreement without penalty upon delivery to
Client of written notice specifying in detail such impermissible conflict, in
which case, the provisions of Section 14(e) will apply, or (b) Client may
terminate this Agreement in accordance with the provisions of
Section 14(d) and 14(f).


 


§27.                        Publicity.  Except as provided in Section 12,
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.


 


§28.                        Performance
by Affiliates.  Cardinal Health may
have certain of its affiliates perform certain Services on its behalf, and
Cardinal Health hereby covenants that its affiliates which will be providing
certain of the Services under this Agreement are bound by this Agreement and
guarantees the performance by such Cardinal Health affiliates of obligations
assigned to Cardinal Health under this Agreement, and shall cause such Cardinal
Health affiliates to comply with the terms and conditions of this Agreement in
connection with such performance.  Any
breach by such affiliates of any of Cardinal Health’s obligations under this
Agreement shall be deemed a breach by Cardinal Health, and Client may proceed
directly against Cardinal Health without any obligation to first proceed
against such affiliates.


 


§29.                        No
Implied Rights or Licenses.  The
parties agree that neither party transfers to the other party by operation of
this Agreement any patent right, copyright right, trademark right or other
proprietary right (including any right with respect to the Product), except as
specifically provided herein.


 


§30.                        Survival.  Sections 8, 11 (as to any Claims arising
from the parties’ performance during the Term), 12, 14(e), 14(f), 15, 16, 21,
22, 26, 28 and 30 shall survive termination of this Agreement.


 


16

















 


§31.                        Miscellaneous.


 


(a)                                  This
Agreement may be executed in two (2) or more counterparts, each of which shall
be binding as of the date first written above, and all of which shall
constitute one and the same instrument. 
Each such copy shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.


 


(b)                                  Cardinal
Health is retained by Client only for the purposes and to the extent provided
for under this Agreement, and Cardinal Health will for all purposes under this
Agreement be deemed an independent contractor and not an employee, partner or
joint venturer with Client or Cardinal Health.


 


(c)          No
covenant or condition of this Agreement will be waived except by written
consent of Client and Cardinal Health. The omission, or delay, by either party
at any time to enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof, by the other
party, shall not be a waiver of any such right or remedy to which the party is
entitled.  Any waiver by a party of the
breach by the other party of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by either party.


 


[Remainder of page intentionally left blank.]


 


17

















 


IN WITNESS WHEREOF, the parties to this Agreement,
each by a duly authorized representative, have executed this Agreement as of
the Effective Date.


 


 


	
  CARDINAL HEALTH:

  	
  CLIENT:

  
	
  Cardinal Health PTS,
  Inc.

  	
  Acorda Therapeutics,
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Anthony Cherichella

  	
   

  	
  By:

  	
  /s/
  Mary Fisher

  	
   

  
	
   

  	
   

  
	
  Print
  Name:

  	
  Anthony
  Cherichella

  	
   

  	
  Print
  Name:

  	
  Mary Fisher

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  	
  Title:

  	
  Vice President of Commercial Operations

  	
   

  
												



 


18

















 


Exhibit A


 


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.


 


DISCOUNT
MATRIX


 


(i)                                    In
determining the Cardinal Health Fee for Services performed during “Period 1” of
the Agreement beginning as of the Effective Date and continuing through the
First Milestone, Client will be entitled to a Discount Amount of [**] of the
total amount charged for such Services in accordance with the applicable
Budget.  As used herein, the First Milestone
will be the completion of the Product’s Phase III pivotal Trial 1 for spinal
cord injuries (“SCI”).  As used in this
Exhibit A, the term “completion” of a clinical trial means completion of
conducting the trial, analyzing all data and results of such trial, and
preparing the final and complete report of such analyzed data.  Period 1 is currently estimated to include
the period from the Effective Date through [**].


 


(ii)                                In
determining the Cardinal Health Fee for Services performed during “Period 2” of
the Agreement beginning as of the end of Period 1 and continuing through the
Second Milestone, Client will be entitled to a Discount Amount within the range
of [***] of the total amount charged for such Services in accordance with the
applicable Budget, where the actual percentage within this range will be based
on the study findings relative to those identified parameters of promotional
success for the Product as described in the Target Product Profile (“TPP”)
attached as Exhibit C. As used herein, the Second Milestone will be the
completion of the Product’s Phase III pivotal Trial 2 for SCI.  Period 2 is currently estimated to include
the period from [***].


 


(iii)                            In
determining the Cardinal Health Fee for Services performed during “Period 3” of
the Agreement beginning as of the end of Period 2 and continuing through the
Third Milestone, Client will be entitled to a Discount Amount within the range
of [***] of the total amount charged for such Services in accordance with the
applicable Budget, where the actual percentage within this range will be based
on the TPP study findings as described in Exhibit C. As used herein, the Third
Milestone will be the NDA submission for SCI. 
Period 3 is currently estimated to include the period from [***].


 


(iv)                               In
determining the Cardinal Health Fee for Services performed during “Period 4” of
the Agreement beginning as of the end of Period 3 and continuing through the
Fourth Milestone, Client will be entitled to a Discount Amount within the range
of [***] of the total amount charged for such Services in accordance with the
applicable Budget, where the actual percentage within this range will be based
on the TPP study findings as described in Exhibit C. As used herein, the Fourth
Milestone will be FDA approval of the Product for the SCI indication.  Period 4 is currently estimated to include
the period from [***].


 


(v)                                   In
determining the Cardinal Health Fee for Services performed during “Period 5” of
the Agreement beginning as of the end of Period 4 and continuing through the
Fifth Milestone, Client will be entitled to a Discount Amount within the range
of [***] of the total amount charged for such Services in accordance with the
applicable Budget, where the actual percentage within this range will be based
on the TPP study findings as described in


 


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.


 


Exhibit C. As used
herein, the Fifth Milestone will be the six-month anniversary of the Product’s
launch for SCI indication.  Period 5 is
currently estimated to include the period from [***].


 


(vi)                               In
determining the Cardinal Health Fee for Services performed during “Period 6” of
the Agreement beginning as of the end of Period 5 and continuing through the
end of the Term, Client will pay as Cardinal Health Fees the total amount
charged for such Services in accordance with the applicable Budget and will not
be entitled to any Discount Amount from such fees.  Period 6 is currently estimated to include the period from
May 2006 through the end of the Term.


 


“Aggregate Discount
Amount” means the total aggregate amount of all Discount Amounts actually
allowed by Cardinal Health during Period 2 through Period 5.  The Aggregate Discount Amount will be “at
risk.”  Such amount will be earned by
and payable to Cardinal Health at the Repayment Rate described in the Discount
Payment Matrix in Exhibit B, such rate will be based on the Product’s quarterly
revenue performance during the twelve (12) month period following the Product’s
launch.


 


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.


 


Exhibit B


 


DISCOUNT
PAYMENT MATRIX


 


Contract Exhibit B


 


DISCOUNT PAYMENT DESCRIPTION


 


The “Actual Prescription Targets” means actual filled prescriptions of
the Product, as measured by IMS, and the Repayment Rate will be based on
comparing the actual filled prescriptions of the Product during the particular
time period(s) with the Actual Prescription Target(s) during such period(s).
The Actual Prescription Target for the period is [***] prescriptions. 


 


Client agrees to make certain repayments to CHS, as percentages of the
Aggregate Discount Amount, based on the actual filled prescriptions of the
Product during the four quarterly periods immediately following the launch of
the Product (such consecutive three month periods referred to as “Q1,” “Q2,”
“Q3,” and “Q4.”), and the applicable Repayment Rate.  Such repayments by Client to CHS shall be made, using the
applicable Repayment Rate determined as above, in four quarterly installments,
with the first such payment occurring on the six month anniversary of the
Product launch and with subsequent payments made on the ninth, twelfth, and
fifteenth month anniversaries of the launch of the Product, in accordance with
the following procedure: 


 


(1)  The first such payment will be determined by
applying the Q1 Repayment Rate (the “Q1 Rate”) – which is determined by
comparing the actual filled prescriptions of the Product made during Q1, with
Actual Prescriptions Target for Q1 – to one quarter of the Aggregate Discount
Amount, according to the following formula. The Actual Prescription Target for
Q1 is [***] prescriptions.


1st Repayment = (1/4)(Aggregate Discount Amount)(Q1 Rate)


 


(2)  The second such payment will be determined
by applying the Q2 Repayment Rate (the “Q2 Rate”) – which is determined by
comparing the aggregate actual filled prescriptions of the Product made during
Q1 and Q2, with sum of the Actual Prescriptions Targets for Q1 and Q2 – to one
half of the Aggregate Discount Amount, less the 1st Repayment,
according to the following formula. The Actual Prescription Target for Q2 is
[***] prescriptions.


2nd Repayment = (1/2)(Aggregate Discount Amount)(Q2 Rate) –
1st Repayment; In the event the 2nd Repayment is negative, then CHS
will pay Client the amount of the 2nd Repayment.


 


(3)  The third such payment will be determined by
applying the Q3 Repayment Rate (the “Q3 Rate”) – which is determined by
comparing the aggregate actual filled prescriptions of the Product made during
Q1, Q2, and Q3 with sum of the Actual Prescriptions Targets for Q1, Q2, and Q3
– to three quarters of the Aggregate Discount Amount, less the 1st
Repayment and the 2nd Repayment, according to the following formula.
The Actual Prescription Target for Q3 is [***] prescriptions.


3rd Repayment = (3/4)(Aggregate Discount Amount)(Q3 Rate) –
1st Repayment –2nd Repayment; In the event the 3rd
Repayment is negative, then CHS will pay Client the amount of the 3rd Repayment.



 


(4)  The fourth and final such payment will be
based on applying the Q4 Repayment Rate (the “Q4 Rate”) – which is determined
by comparing the aggregate actual filled prescriptions of the Product made
during Q1, Q2, Q3, and Q4, with sum of the Actual Prescriptions Targets for Q1,
Q2, Q3, and Q4 – to the total Aggregate Discount Amount, less the 1st
Repayment, 2nd Repayment and 3rd Repayment, according to
the following formula. The Actual Prescription Target for Q4 is [***]
prescriptions.


4th Repayment = (Aggregate Discount Amount)(Q4 Rate) – 1st
Repayment –2nd Repayment – 3rd Repayment; In the event
the 4th Repayment is negative, then CHS will pay Client the amount of the 4th
Repayment.


 


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.


 


Contract Exhibit B


 


	
   

  	
   

  	
  RANGE

  	
   

  	
  Fees

  	
   

  	
  DISCOUNTS

  	
   

  
	
  Milestone

  	
   

  	
  Low

  	
   

  	
  High

  	
   

  	
   

  	
  Low

  	
   

  	
  High

  	
   

  
	
  1st Phase 3*

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  
	
  2nd Phase 3

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  
	
  NDA Filing

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  
	
  NDA Approval

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  
	
  Launch + 6

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [********]

  	
   

  	
  [********]

  	
   

  



 


	
  Low Discount

  	
   

  
	
   

  	
   

  	
  Quarterly

  	
   

  	
  Cumulative

  	
   

  	
  % of Target

  	
   

  	
  Repayment %

  	
   

  	
  Repayment $

  	
   

  
	
  Q1

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  Q2

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  Q3

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  Q4

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  TOTAL

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  



 


	
  High Discount

  	
   

  	
   

  
	
   

  	
   

  	
  Quarterly

  	
   

  	
  Cumulative

  	
   

  	
  % of Target

  	
   

  	
  Repayment %

  	
   

  	
  Repayment $

  	
   

  
	
  Q1

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  Q2

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  Q3

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  Q4

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  
	
  TOTAL

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  	
  [****]

  	
   

  



 


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.


 




	
  Low

  	
   

  	
  High

  	
   

  	
  Payment

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  






 


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.


 


Exhibit C


 


TARGET
PRODUCT PROFILE MATRIX


 


[****]


 


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.


 


[****]


25