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EXHIBIT 10.47  

 
 

AMENDED AND RESTATED
  DISTRIBUTION AGREEMENT
  
    TERMS AND CONDITIONS  
    

        This Distribution Agreement ("Agreement") is made and is effective as of January 1, 2007 (the
"Effective Date"), between Reliant Pharmaceuticals, Inc., a Delaware corporation, having its principal place of business at 110 Allen Road,
Liberty Corner, New Jersey 07938 ("Client"), and Priority Healthcare Distribution, Inc., an Indiana corporation, having its principal place of
business at 6272 Lee Vista Boulevard, Orlando, Florida 32822 ("Priority Healthcare") (Client and  Priority Healthcare are each a "Party" and shall collectively be referred to as the
"Parties"). 

        A.    Client
is, among other things, in the business of developing and marketing pharmaceutical products in the continental United States and Puerto Rico (the
"Territory"). 

        B.    Priority
Healthcare is, among other things, in the business of distributing pharmaceutical products to wholesalers, specialty distributors, physicians, clinics,
hospitals, pharmacies, and other health care providers in the Territory, and of providing information systems and other services that support its clients' use of Priority Healthcare's distribution
capabilities, and has represented to Client that it is qualified to render the services contemplated hereby. 

        C.    In
January 2005, Client and Priority Healthcare entered into an agreement under which Client engaged Priority Healthcare as its non-exclusive
distribution agent for trade product, sample product, and promotional materials contained in its product portfolio, as such may change from time to time in the sole discretion of the Client, but only
if such additional products are of the same type and nature (e.g., non-controlled, non-refrigerated) as those products initially distributed for Reliant by Priority Healthcare
(collectively, the "Products"), and to perform information systems and certain other services on a non-exclusive basis (the
"Initial Agreement"). 

        D.    In
October 2005, Express Scripts, Inc. acquired Priority Healthcare and reorganized Priority Healthcare as a wholly-owned, indirect subsidiary of Express
Scripts. 

        E.    The
Parties wish to amend and restate the Initial Agreement as set forth below. 

        THEREFORE,
in consideration of the mutual conditions and covenants set forth herein, Priority Healthcare and Client hereby agree as follows: 

        1.     Appointment/Authorization.

        1.1   Upon
the terms and conditions set forth in this Agreement, Client appoints Priority Healthcare as its non-exclusive distribution agent of Product in the
Territory to Client's customers, including, but not limited to, wholesalers, specialty distributors, physicians, clinics, hospitals, pharmacies, and other health care providers in the Territory
(collectively, "Customers"). 

        1.2   Subject
to the terms and conditions set forth in this Agreement, Priority Healthcare accepts the appointment to represent Client as its authorized
non-exclusive distribution agent of Product to Customers in the Territory and to perform the Services (as hereinafter defined) set forth herein. 

        2.     Services.

        2.1   During
the Term, Priority Healthcare shall perform the Services to the extent requested by Client. As part of the Services Priority Healthcare shall be responsible for
(a) Product storage, Product distribution, Product returns, customer support, financial support, patient assistance program distribution, EDI, and system access support in accordance with the
Operating Guidelines (attached 

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hereto
as Exhibit A); and (b) any additional responsibilities, functions and tasks described in the Operating Guidelines. Such services, responsibilities, functions, and tasks shall
hereinafter be referred to as the "Services." 

        2.2   Priority
Healthcare shall provide the Services in accordance with current industry standards and practices throughout the Term, provided such standards and practices are
not construed to be materially more burdensome than the current level of services provided as of the Effective Date. Priority Healthcare shall endeavor to leverage efficiencies available to Priority
Healthcare to remain current with relevant industry standards. 

        2.3   Priority
Healthcare shall make changes to the Services as Client may reasonably request. Client shall make such requests in writing by submitting to Priority Healthcare
a detailed description of the change it is requesting (a "Change Request"). All Change Requests must be approved by Priority Healthcare prior to becoming effective, which such approval will not be
unreasonably withheld. If Priority Healthcare has a right to have Cient pay additional fees related to the Change Request pursuant to Section 5.4, such fees must be agreed upon in writing prior
to the implementation of any Change Request. Priority Healthcare shall promptly thereafter implement such Change Request in accordance with this Section 2.3 and Section 5.4 herein. Such
Change Request, as amended by any changes thereto agreed by Client, shall become part of the Agreement. 

        2.4   Client
shall provide Priority Healthcare with rolling monthly forecasts of the volume of Product to be handled by Priority Healthcare under this Agreement
("Forecast"). Each Forecast shall provide projections of volumes for each of the three months following the month in which the Forecast is provided.
Except as set forth in Section 2.5, such Forecasts shall not be binding upon Client. 

        2.5   Priority
Healthcare shall perform the Services in accordance with the terms and conditions of this Agreement, including the Operating Guidelines, and at the levels set
forth in the Key Performance Indicators; provided, however, that if for any month Client's volume of Product ordered exceeds its latest Forecast for such month under Section 2.4 by more than
[***] percent ([***]%), Priority Healthcare will not be held responsible for any service delays or failures to the extent that such delays or failures
are attributable to such excess volumes or Client's failure to timely provide Priority Healthcare with monthly forecast projections as described in Section 2.4, as reasonably documented by
Priority Healthcare. For purposes of clarity, Priority Healthcare shall accept orders for such excess volumes and use commercially reasonable efforts to fulfill them in accordance with this Agreement
at the levels set forth in the Key Performance Indicators and avoid any service delays or failures resulting from such excess volumes; provided, however, if Priority Healthcare incurs additional
overtime for personnel in order to satisfy timely handling of the excess volumes, then Client will be billed for the overtime pursuant to the standard bill rates set forth on Exhibit E attached
hereto. 

        2.6   All
product returns shall be processed and handled by Priority Healthcare in accordance with the Operating Guidelines and Client's Returns Goods Policy attached hereto
as Exhibit C ("Product Returns"), as such Return Goods Policy is amended by Client from time to time, but only following Client's provision of notice of such amendments to Priority Healthcare.
Amendments to the Return Goods Policy that result in material changes to the Services will result in additional Fees in accordance with Section 5.4. 

        2.7   Client
is solely responsible for all recalls of Products distributed under this Agreement. In the event Product is subject to recall or Client, on its own initiative,
recalls any Product, Priority Healthcare shall provide reasonable assistance to Client as set forth in the Operating Guidelines, provided that unless the recall results from or is caused by a
negligent or willful omission by Priority Healthcare, Client shall pay to Priority Healthcare an amount equal to the applicable rates described in Exhibit E attached hereto with respect to any
such recall services. Such cost shall be in addition to the Service Fees described in Section 5 below. In the event the recall results from or is caused by a negligent or willful omission by
Priority Healthcare, Priority Healthcare shall provide such assistance at no charge and shall reimburse Client for any relevant actual costs reasonably incurred by Client as a consequence of the
recall resulting from Product distributed under this Agreement. 

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	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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        2.8   Priority
Healthcare shall provide the Services in accordance with all relevant law and the regulatory rules and requirements of pertinent governmental agencies,
including the U.S. Food and Drug Administration (FDA), and as specified in the Priority Healthcare Distribution Good Manufacturing Practices Policies and Procedures Manual drafted by Priority
Healthcare specifically for Client's program and effective March 2, 2007, hereinafter referred to as the "Priority GMP Manual", the Occupational Safety and Health Administration (OSHA), the
Environmental Protection Agency (EPA), the U.S. Department of Transportation (DOT) and the Drug Enforcement Agency (DEA), to the extent that such laws, rules, and regulations apply to activities as
comprised by the Services; such laws, rules and regulations are hereinafter referred to as "Applicable Laws." Except as herein specified, Priority Healthcare will furnish the necessary facilities,
labor, materials, and other resources as required, will devote as much time and attention as necessary to accomplish the Services, and will notify Client immediately upon identifying any inability to
perform the required Services within the specified time periods. Priority Healthcare will perform the Services consistent with the terms of this Agreement, the Key Performance Indicators (see
Exhibit B), and the Operating Guidelines and in accordance with generally accepted procedures applicable to similar types of products. In addition, Priority Healthcare shall keep Client advised
of the status of the Services and permit any representative duly authorized in writing by Client on reasonable notice and during normal business hours to review and observe from time to time said
Services as may be susceptible to normal review. 

        2.9   During
the Term of this Agreement, the warehouse used by Priority Healthcare to provide the Services shall be dedicated exclusively to Client, except as set forth in the
2005 amendment between Client and Priority Healthcare relating to the allocation of warehouse space for non-Reliant purposes ("Warehouse Amendment") or as otherwise agreed to by Client.
The Warehouse Amendment shall remain in effect subsequent to execution of this Agreement, except that the $[***] credit to the fixed monthly service fee specified in the
Warehouse Amendment shall be waived by Reliant for all of 2007. Priority Healthcare shall implement changes to the warehouse as reasonably requested by Client; provided, however, if such changes
constitute a material change, then Client shall be obligated to pay Priority Healthcare additional fees pursuant to Section 5.4. Notwithstanding the generality of the foregoing, costs of
changes required to convert warehouse space from third party use to Client use shall be at Priority Healthcare's cost, except for material changes requested by Reliant that pertain to retrofitting the
space to a state other than as originally existed for Reliant's use. 

        3.     Product Supply/Client Responsibilities.

        3.1   Client
shall deliver (or cause to be delivered) Product to Priority Healthcare at Priority Healthcare's facility located in Groveport, Ohio, or to such other
distribution facility as may be mutually agreed by the Parties ("Facility"). 

        3.2   Client
shall be responsible for delivery of Product to the Facility, including all costs, expenses, and risk of loss and/or damage associated with such delivery. Title
to Product shall remain with Client at all times, even when Product is stored or warehoused at the Facility. Client shall at all times insure the Product for damage, loss, destruction, theft, or any
such other property damage ("Loss") as further set forth in Section 15 below. Except for Loss resulting from (i) the gross negligence or
willful misconduct of Priority Healthcare, or (ii) Priority Healthcare's failure to follow the Operating Guidelines and all Applicable Laws, Client shall bear all risk of loss and/or damage
with respect to the Product stored or warehoused at the Facility. 

        3.3   Client
has delivered to Priority Healthcare a customer list, which sets forth the Product prices (the "Customer Price
List"). Client shall notify Priority Healthcare of any change in the Customer Price List not less than seventy-two (72) hours prior to the effective date of
any such change. Priority Healthcare shall use commercially reasonably efforts to implement such price change in accordance with Client's instruction. 

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	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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        3.4   Priority
Healthcare shall visually inspect each shipment of Product for external damage or loss in transit and shall notify Client of any such damage or loss within a
commercially reasonable period of time following discovery. 

        4.     Information System Access.

        4.1   During
the term of this Agreement and subject to the terms herein, Client may use password(s) and identification number(s) provided by Priority Healthcare to remotely
access Client's data maintained and certain support services associated therewith, as further set forth in the Operating Guidelines (collectively, the
"System"), provided that such access is used solely by Client's employees and for Client's own internal business purposes. Client shall use that access
solely to access Client's data and shall not access or attempt to access any other data, systems, or software. Client shall use commercially reasonable efforts to ensure that all passwords and
identification elements are used solely to effect the limited access authorized herein. The limited license to access the System granted herein does not include the right to copy, download, or
otherwise use any software or non-Client data maintained on the System. Priority Healthcare shall have a right to modify its System from time to time in the ordinary course of business as
it deems commercially reasonable, provided, however, that such modifications do not have a material, adverse effect on Client's program. On an annual basis, and without cost to Client, except with
respect to reproduction of test results as set fort below), Client shall have the right to create and provide to Priority Healthcare test scripts that exercise the functionality of the Priority
Healthcare System. These test scripts shall be pre-approved by Priority Healthcare and executed on an annual basis by Priority Healthcare in conjunction with one or more system releases in
which the production release schedule shall be defined by Priority Healthcare. These test scripts shall be representative of the initial Client setup and associated business rule requirements, as well
as any associated modifications documented through the agreed upon Priority Healthcare-Client change control process. Post execution test results shall be available for Client to receive or review
upon Client's request. All expenses associated with the reproduction of test results shall be borne by the Client. In the event that execution test results are not consistent with Client's reasonable
expectations, Priority Healthcare and Client shall work together in good faith to determine the root cause of the inconsistencies. If Priority Healthcare chooses to migrate Client to a new
distribution platform that is not also used by Priority Healthcare's core wholesale distribution business, Client shall have user acceptance testing rights prior to a production rollout, and upon
completion of such testing, both parties shall share test results and mutually agree to a system rollout timeframe. 

        4.2   The
System shall be made available to Client at the Fees set forth in the Fee Schedule (as defined in Section 5.1 below). If Client desires to have Priority
Healthcare implement reasonable changes to the System, it may do so by submitting a Change Request pursuant to Section 2.3 of this Agreement. Such Change Request must be mutually agreed prior
to implementation and must be reasonably compatible with Priority Healthcare's System. If the Change Request is a material change, Priority Healthcare shall have the right to charge Client for such
changes in accordance with Section 5.4. 

        4.3   During
the term of this Agreement, Priority Healthcare shall employ all commercially reasonable and necessary security measures and policies designed to safeguard the
integrity and confidentiality of Client's data resident on the System and establish and maintain reasonable disaster and emergency recovery plans designed to minimize disruption from System operation
interruptions. In addition, CuraSctipt shall employ such efforts to ensure that Client's data is accessible to it upon request. 

        4.4   Client
shall not reverse engineer, reverse assemble, decompile, create derivative works, modify, or otherwise attempt to derive the source code of any software on the
System or copy, download, modify, or create derivative works of such software. Also, Client shall not permit access to the System or related documentation to any other person or entity not employed by
or affiliated with Client. The System and all parts thereof, in all of their tangible and intangible manifestations, all existing or new enhancements, developments, derivative works, and other
modifications to the System (or any part thereof), and all related proprietary rights, are and shall remain the exclusive property of Priority Healthcare. 

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	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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        4.5   THE SYSTEM, THE SOFTWARE THEREON, AND ANY RESULTS OBTAINED THEREFROM ARE PROVIDED ON AN "AS IS" BASIS, WITHOUT WARRANTY OF ANY KIND, WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. PRIORITY HEALTHCARE MAKES NO REPRESENTATIONS OR WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, RELATING
DIRECTLY OR INDIRECTLY TO THE SYSTEM OR ANY PART THEREOF, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, AND FITNESS FOR A PARTICULAR PURPOSE.

        4.6   Without
limiting the generality of the application of the Key Performance Indicators, Priority Healthcare shall use all commercially reasonable and necessary efforts to
make the System available for access twenty-four (24) hours a day, seven (7) days a week absent scheduled and emergency maintenance periods. 

        4.7   Notwithstanding
anything to the contrary in this Agreement, in the event of a material breach of this Agreement by Client, which remains uncured for a period in excess
of thirty (30) days, Priority Healthcare shall (subject to the proviso set forth below) have the right, following written notice to Client, to revoke or suspend any or all passwords and
identification numbers provided to Client hereunder; provided, however, senior management of both
parties (i.e., Client's Chief Financial Officer and Priority Healthcare's Pharma Services President) shall work in good faith and expeditiously, as appropriate under the circumstances, to address the
concerns prompting the material breach and to determine whether an amicable resolution is feasible in advance of any such suspension. 

        5.     Fees.

        5.1   As
compensation for the Services, Client shall pay to Priority Healthcare the fees (the "Fees") set forth in Exhibit D and Exhibit D-1 (the
"Fee Schedule"). 

        5.2   Priority
Healthcare shall issue an invoice to Client for the Services rendered under this Agreement on a monthly basis in arrears. Payment is due within thirty
(30) days of receipt by Client of the invoice. If any undisputed invoice is not paid within such thirty (30) day period, Priority Healthcare may impose a service charge on the unpaid
amount calculated at the rate of [***]% per month (or the maximum rate permitted by law if such rate is less than [***]% per month) until such amount is
paid in full. Client may withhold payment of amounts it disputes in good faith, and such amounts shall not be subject to this service charge, unless it is ultimately determined that Client withheld
payment that was properly owed under this Agreement (in which case, the service charge shall apply). In the case of a good faith dispute concerning an invoice, the Parties shall continue to perform
hereunder pending resolution of the dispute in accordance with the terms set forth herein; provided, however if such dispute is not resolved within thirty (30) days from the date it was first
discussed by the Parties and such invoice payment is a material amount, then senior management of both parties (i.e., Client's Chief Financial Officer and Priority Healthcare's Pharma Services
President) shall work in good faith and expeditiously, as appropriate under the circumstances, to address the concerns prompting the payment dispute and to determine whether an amicable resolution is
feasible. If such dispute cannot be resolved amicably between the parties, then such dispute shall be submitted to arbitration pursuant to terms and conditions set forth in Section 16.2 of the
Agreement for resolution, and Priority Healthcare shall not be entitled to suspend the Services under this Agreement until the sooner of (i) resolution of the arbitration, or
(ii) forty-five (45) days from the date of Priority Healthcare's original notice of its intention to suspend services. 

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	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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        5.3   The
monthly fixed Fee is reflective of up to [***] pallet spaces. A one time $[***] Fee will be charged for each
additional pallet position beyond [***]. The monthly fixed Fee will be increased by $[***]per pallet position beyond [***].
[***] pallet positions is the minimum pallet position increase. 

        5.4   The
Fees set forth in Section 5.3 and Exhibits D and D-1 shall be fixed for the Term of the Agreement, and changes or additions to the Services shall
not result in additional charges to Client, except pursuant to this Section 5.4 and 5.5 herein or as otherwise expressly stated herein. In the event that a Change Request represents a material
change to the Services, Priority Healthcare shall, within two (2) business days of Client's submission of such Change Request, propose a change to its Fees under this Agreement.  Exhibit E sets
forth many of Priority Healthcare's standard additional rates, which the Parties agree will be used to determine the adjustment to
the Fees in the event of a material change. If the Change Request involves a service for which there is no applicable rate specified on  Exhibit E, then the Parties will mutually agree upon a
standard rate for such service that involves a material change. Client will consider, and
the Parties shall negotiate such a proposed change in Fees in good faith regarding the material change. All such mutually agreed-upon fees relating to the material change shall be deemed a
part of the Fee Schedule for purposes of this Agreement, and shall be memorialized in writing by both Parties. Priority Healthcare shall have no obligation to implement a Change Request involving a
material change prior to mutual agreement of the Fees pursuant to the foregoing. For purposes of this Agreement, the term "material change" means a request that requires: (a) a process or
procedural change that results in an either a one-time or ongoing increase in labor usage; (b) a physical modification to the warehouse facility to support the requested change; or
(c) a system or application change that requires Priority Healthcare's Information Technology department to recompile, modify, or supplement the programming code. 

        5.5   Notwithstanding
the terms set forth above in Section 5.4, if the adoption of any applicable law or regulation (or any material change in the interpretation or
administration thereof), or the occurrence of an unforeseen circumstances beyond Priority Healthcare's reasonable control, results in a material change (as defined in Section 5.4), then
Priority Healthcare shall be entitled to a Fee adjustment, the amount to be mutually agreed upon in good faith by the parties. The parties shall work together in good faith regarding the appropriate
Fee adjustment based on the particular circumstances. Priority Healthcare shall endeavor to leverage efficiencies available to Priority Healthcare to minimize the amount of Fee increase. If the
parties are unable to mutually agree upon the appropriate Fee adjustment, then Client shall have the right to terminate this Agreement within three hundred sixty (360) days upon prior written
notice to Priority Healthcare; provided, if such termination by Client occurs during the four year Term referenced in Section 6.1 below, then Client shall pay
Priority Healthcare [***] through the three hundred sixty day program closeout period, employee severance fees of not more than [***] dollars
($[***]), and [***] months of rent and utilities post program closeout. 

        5.6   Priority
Healthcare and Client will work together in good faith to optimize efficiencies over the term of this Agreement. The Parties will work to share in any
objectively measurable economic benefit derived from such operational efficiencies. 

        5.7   Priority
Healthcare will perform the Services in accordance with the Key Performance Indicators set forth in Exhibit B. In the event Priority Healthcare fails to
meet a particular Key Performance Indicator for two (2) consecutive months, Client may offset a credit against Priority Healthcare's Fees in accordance with Section 5.8, unless Priority
Healthcare can reasonably demonstrate that such failure resulted from (a) the adoption of any applicable law or regulation (or any material change in the interpretation or administration
thereof), (b) unforeseen circumstances beyond Priority Healthcare's reasonable control, or (c) excess Forecast volumes described in Section 2.5 hereof or from Client's failure to
timely provide Priority Healthcare with Forecasts pursuant to Section 2.4 hereof. 

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	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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        5.8   Performance
credits will be instituted on a monthly basis following the second consecutive month for which a Key Performance Indicator has not been met, with the credit
being applied for one month. The amount of such credits are set forth in Exhibit B. Total performance credits for any month shall not exceed [***]% of the Fees payable
under the Agreement for such month. 

        6.     Term and Termination.

        6.1   The
term of this Agreement shall begin on the Effective Date and shall continue for a period of four (4) years (the "Term"), unless terminated earlier or extended
pursuant to this Agreement. Client shall have a one-time right, exercisable at Client's sole discretion, to renew this Agreement for an additional one-year term. 

        6.2   Client
may terminate this Agreement in whole: 

        (a)   for
convenience (that is, without cause and without cost) at any time by providing Priority Healthcare at least seven hundred and twenty (720) days prior written
notice. 

        (b)   for
convenience (that is, without cause and without cost) with three hundred and sixty (360) days notice if Client undergoes a Change of Control. For purposes of
this Agreement, "Change of Control" means any change in the power to dictate the management of and otherwise control Client by a change after the Effective Date in any of: (a) holding directly
or indirectly the majority of the issued share capital or stock (or other ownership interest if not a corporation) of Client ordinarily having voting
rights; (b) directly or indirectly controlling the majority of the voting rights in such entity; or (c) directly or indirectly having the right to appoint or remove directors holding a
majority of the voting rights at meetings of the board of directors of Client; provided, however, an initial public offering of Client, or an internal consolidation or reorganization with another
entity affiliated with Client shall not constitute a "Change of Control" for purposes of this Agreement. 

        (c)   for
cause as of a date set out in a notice of termination issued by Client if Priority Healthcare: (i) commits a material breach of this Agreement, which breach
is not cured within thirty (30) days after notice of breach from Client to Priority Healthcare, or (ii) commits a material breach of this Agreement which is not capable of being cured
within thirty (30) days. With respect to such material breach situation, senior management of both parties (i.e., Client's Chief Financial Officer and Priority Healthcare's Pharma Services
President) shall first work in good faith and expeditiously, as appropriate under the circumstances, to address the concerns prompting the mutual breach and to determine whether an amicable resolution
is feasible in lieu of, and prior to, such termination. If such dispute cannot be resolved amicably between the parties, then, notwithstanding the thirty (30) day termination period above, such
dispute shall be submitted to arbitration pursuant to terms and conditions set forth in Section 16.2 of the Agreement for resolution, and Client shall not be entitled to terminate the Agreement
for cause until the sooner of (i) resolution of the arbitration, or (ii) ninety (90) days from the date of Client's original notice of termination. 

        (d)   immediately
upon notice that Priority Healthcare (or its assets) is the subject of: (i) any bankruptcy or insolvency proceeding (whether voluntary or
involuntary), which in the event of an involuntary proceeding, is not dismissed within sixty (60) days; (ii) a general assignment for the benefit of creditors; or (iii) the
appointment of a receiver, trustee or liquidator. 

        6.3   Not
sooner than December 31, 2007, Client may withdraw from the transaction, on three hundred and sixty (360) days prior written notice, such services,
responsibilities, functions, and tasks other than those required to perform Product distribution. In other words, Client can withdrawal from the Agreement the financial services component upon three
hundred and sixty (360) days notice without penalty. 

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	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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        6.4   Priority
Healthcare may terminate this Agreement in whole: 

        (a)   for
convenience (that is, without cause and without cost) at any time by providing Client at least seven hundred and twenty (720) days prior written notice; and 

        (b)   for
cause as of a date set out in a notice of termination issued by Priority Healthcare if Client: (i) commits a material breach of this Agreement, which breach
is not cured within thirty (30) days after
written notice from Priority Healthcare; or (ii) commits a material breach of this Agreement, which is not capable of being cured within thirty (30) days. With respect to such material
breach situation, senior management of both parties (i.e., Client's Chief Financial Officer and Priority Healthcare's Pharma Services President) shall first work in good faith and expeditiously, as
appropriate under the circumstances, to address the concerns prompting the mutual breach and to determine whether an amicable resolution is feasible in lieu of, and prior to, such termination. If such
dispute cannot be resolved amicably between the parties, then, notwithstanding the thirty (30) day termination period above, such dispute shall be submitted to arbitration pursuant to terms and
conditions set forth in Section 16.2 of the Agreement for resolution, and Priority Healthcare shall not be entitled to terminate the Agreement for cause until the sooner of
(i) resolution of the arbitration, or (ii) ninety (90) days from the date of Priority Healthcare's original notice of termination. 

        6.5   Termination
or expiration of this Agreement does not relieve either Party from any liability or obligation that accrued with respect to Services performed prior to such
termination or expiration. Upon termination or expiration of this Agreement, Priority Healthcare shall return all Product to Client or a designee of Client at Client's sole cost and expense. Following
a notice of termination, Priority Healthcare shall continue to provide the Services in accordance with this Agreement until the effective date of termination, and each Party shall fully satisfy its
respective obligations hereunder until the effective date of termination of this Agreement. 

        6.6   Upon
request by Client, prior to the effective date of termination or expiration, and for a period of six (6) months following the effective date of termination
or expiration, Priority Healthcare shall provide reasonable assistance to Client in the transfer or transition of the Services to Client or to a third party; provided, however, that Priority
Healthcare shall have no obligation to continue to perform the Services after the effective date of termination of expiration unless mutually agreed in writing by the parties. Client will reimburse
Priority Healthcare for such termination and transition assistance pursuant to the rates specified on Exhibit E. 

        6.7.  In
connection with the termination or expiration of this Agreement, and solely to the extent required for Priority Healthcare to transition the Services to Client or to
another provider of the Services without interruption, Priority Healthcare shall provide to Client all data related to the Services at no additional cost to Client;  provided, however, that should Client require
the data in a form other than the then-current 3PL transactional format or shall require archived information, such modifications and data transition shall be subject to the fee schedule
set forth in Exhibit E. 

        6.8   In
the event of termination or expiration of the Agreement, after the expiration of twelve (12) months following the effective date of termination of this
Agreement. Client shall have the right to extend offers of employment to Priority Healthcare personnel involved in providing the Services under the Agreement, and Priority Healthcare will not
interfere with such offers or attempts at employment, but Client shall in no event solicit such employees until expiration of such twelve month period. 

        6.9.  Priority
Healthcare shall, within ten (10) business days of the effective date of termination or expiration, return to Client all information, confidential or
otherwise, relating to Client's Products. Sections 4.5, 6, 7, 12, 13, 14, 16, and 17 herein shall survive termination or expiration of this Agreement. 

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	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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        6.10 In
the event of termination or expiration of the Agreement, Client shall be responsible for all Program related closeout costs, which shall include but are not be
limited to reasonable, necessary and pre-approved incremental IT and Warehouse fees related to program closeout support required to migrate the Client to Client's new vendor on a time and
materials basis. 

        7.     Data, Records and Audits.

        7.1   Priority
Healthcare agrees that any Client data in the possession of Priority Healthcare is and shall remain the property of Client. Priority Healthcare will not utilize
Client data for any purpose other than that of rendering the Services under this Agreement. Priority Healthcare shall not possess or assert any lien or other right against or to Client's data. Without
Client's express written permission, which Client may give or withhold in its sole discretion, no Client data, or any part thereof, shall be sold, assigned, leased, or otherwise disposed of by
Priority Healthcare or commercially exploited by or on behalf of Priority Healthcare, its employees or agents. Upon Client's request, at termination or expiration of this Agreement, Priority
Healthcare shall promptly return current and historical Client data to Client in such a format as Client may reasonably request or, if Client so elects, destroy such data. There shall be no charge for
returning data to Client; provided, however,
that should Client require the data in a form other than the then-current 3PL transactional format or shall require archived information, such modifications and data transition shall be
pursuant to the data fee rates specified on Exhibit E. 

        7.2   Priority
Healthcare shall keep such books and records consistent with its standard business practices sufficient to verify the accuracy and completeness of all Services
and the propriety of Priority Healthcare's Fees. Without limiting the generality of the foregoing, Priority Healthcare shall keep such books and records so as to comply with all Applicable Laws and to
meet client's audit rights under this Agreement. Priority Healthcare shall maintain such books and records for a period of six (6) years beyond the date of the last entry therein. 

        7.3   Priority
Healthcare shall provide to Client and Client's internal or external auditors, inspectors and regulators reasonable access at reasonable times to the Priority
Healthcare facilities, to Priority Healthcare personnel, and to information, records, and documentation relating to the Services (including such information, records and documentation necessary for
the auditors to provide attestations, and report on, internal control assessments made by Client and its management, as required by the Public Company Accounting Reform and Investor Protection Act of
2002 ("Sarbanes-Oxley") and the rules of the PCAOB) for the purpose of performing reasonable audits and inspections of either Priority Healthcare or its
subcontractors providing the Services at any time during the period commencing on the Effective Date and ending on the second (2nd) anniversary of the effective date of termination or expiration,
including: 

        (a)   determining
the accuracy of charges and invoices; 

        (b)   determining
whether Priority Healthcare is in compliance with this Agreement (including the Key Performance Indicators); 

        (c)   auditing
and inspecting the conduct of Priority Healthcare operations and procedures relating to the Services or in Priority Healthcare's performance of the Services;
and 

        (d)   preparing
disclosure documents or financial statements or other accounting or financial reporting documents that Client is required to prepare in order to comply with
all Applicable Law (including the Securities Exchange Act of 1934 and Sarbanes-Oxley). 

        Without
limiting the generality of the foregoing, Priority Healthcare shall provide to Client's regulators and other government entities with jurisdiction reasonable access to Priority
Healthcare facilities, Priority Healthcare personnel, and data and records relating to the Services for the purpose of performing reasonable audits and inspections of either Priority Healthcare or its
subcontractors required by such regulators and entities. 

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

9

 

        Notwithstanding
anything to the contrary in this Agreement, neither Priority nor any of its personnel shall have any obligation, and will not, prepare or create any Sarbanes Oxley
documents or supporting information, or any other Client regulatory information, all of which shall be the sole responsibility of Client. In addition, Client's access to Priority Healthcare personnel
and facilities shall be limited to not more than twenty (20) days per one hundred and eighty day period, with additional access subject to applicable fees stated on
Exhibit E. 

        Client
may not use a competitor of Priority Healthcare to perform an audit under this Section without Priority Healthcare's prior approval; provided, however, the Parties specifically
agree that the audit arms of the major international accounting firms shall not be treated as competitors of Priority Healthcare. Client shall require its auditors and inspectors and regulators to
conduct audits in such a fashion so as to not unreasonably interfere with Priority Healthcare's normal course of business, and to agree to confidentiality provisions equivalent to those set forth in
Section 12 herein. Client shall provide Priority Healthcare with reasonable prior notice of Client's audit, except for audits by a governmental entity in which case Client shall provide such
prior notice as is practical under the circumstances or audits arising from Client's reasonable suspicion of fraud or security audits, in which case no notice is required. 

        7.4.  Priority
Healthcare shall make available promptly to Client the results of any final reviews or final audits conducted by Priority Healthcare, its Affiliates or their
subcontractors, agents or representatives (including internal and external auditors) relating to Priority Healthcare's operating practices and procedures to the extent they result in adverse findings
and are relevant to the Services or any of Priority Healthcare's obligations under the Agreement. Client shall keep all such review s and audits confidential, unless otherwise mutually agreed upon in
writing by the parties; provided, however, that Client may share such reviews and audits with its auditors and agents having a need to review such information in the course of advising and providing
services to Client. 

        7.5   Without
limiting the requirements set forth in Sections 7.1 and 7.2 herein, Priority Healthcare shall furnish or provide to Client an annual SAS 70, Type II report for
its accounting and internal control activities related to the Services provided by Priority Healthcare or its subcontractors, the scope of which shall be set forth in the engagement letter described
in this paragraph. For the 2007 SAS 70, Priority Healthcare will provide Client with a copy of the engagement letter from the firm Priority Healthcare selects to conduct the SAS-70. For
the 2007 SAS-70, the Parties will mutually agree in on the scope of the SAS 70 audit, as confirmed in writing (either e-mail or otherwise) by agreeing to the proposed scope
outlined in the selected firm's engagement letter. In subsequent years, the SAS-70 scope outlined in the 2007 SAS-70 engagement letter will form the basis of future audits,
unless otherwise mutually agreed upon in writing by the parties. With respect to the first Audit Year, the final SAS 70, Type II audit testing shall be completed by December 31, 2007. With
respect to subsequent years after 2007, the SAS 70 Type II audit testing shall be completed by December 1 of that respective year. Priority Healthcare shall have sixty (60) days
following the completion of the applicable audit testing completion date to provide the firm's written report. Priority Healthcare will use commercially reasonable efforts to cause the auditors to
produce the report sooner than the sixty (60) day period, if possible. Should Client decide to engage in a twelve (12) month SAS-70 audit, instead of a six (6) month
audit, an additional $[***] charge shall be payable by Client to Priority Healthcare for each such audit, which shall be in addition to the Fees set forth on the attached Fee
Schedules. 

        7.6   Subject
to the restrictions set forth in Section 7.3 herein, Priority Healthcare shall provide Client's auditors, inspectors and regulators such reasonable
assistance and cooperation as they may reasonably require, including installing and operating audit Software that is compatible with Priority Healthcare's current systems, do not impose a security
risk to such systems, and are not cost-prohibitive to install. 

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

10

 

        7.7.  Promptly
following an audit or inspection, Client and Priority Healthcare shall meet to discuss the findings of the auditors or inspectors, whichever the case may be,
and to develop and agree upon an appropriate and effective manner in which to respond to the deficiencies identified in and changes suggested by the audit report. If an audit reveals an overcharge,
Priority Healthcare shall promptly refund the overcharge. If an audit reveals a deficiency, and Client requests a material change (as defined in Section 5.4) to the Services or Priority
Healthcare's systems or operations to remedy the deficiency, Priority Healthcare shall have the right to charge additional, mutually-agreed fees related to the change pursuant to the terms of
Section 5.4 as a condition to implementing the requested change. If Client objects to paying additional fees in connection with implementing the requested changes after reasonable negotiation,
or the changes requested by Client are not commercially practicable, then Priority Healthcare shall have no obligation to implement the requested changes and Client shall have the right to immediately
terminate this Agreement upon written notice to Priority Healthcare. 

        7.8.  To
the extent the 2007 SAS-70 Expenses (as defined below) exceed $[***], each Party agrees to commit an additional
$[***] toward additional 2007 SAS-70 Expenses, with such expenses to be [***]. Client will be billed for such additional expenses pursuant
to Section 5.2 of this Agreement when incurred by Priority Healthcare, with payment due from Client in accordance with Section 5.2. Neither Party shall have any other obligation to
commit additional amounts to cover the 2007 SAS-70 Expenses. For purposes of this Agreement the term "2007 SAS-70 Expenses" means those expenses incurred by Priority Healthcare
related to the 2007 SAS-70 set-up and testing and any expenses relating to remediation of deficiencies identified as part of the 2007 SAS-70 audit. 

        7.9   If,
and when, a positive SAS-70 Type II opinion has been obtained, thereafter Priority Healthcare shall be responsible for maintaining such good standing in
future SAS-70 Type II audits and opinions, unless any future deficiency is the result of Client's requests, actions, or inactions. 

        8.     Compliance With Laws. Each Party shall conduct its activities in connection with this
Agreement in compliance with all Applicable Laws. 

        9.     Representations and Warranties.

        9.1   Each
Party represents and warrants to the other that: 

        (a)   it
is duly organized, validly existing and in good standing in accordance with the laws of its jurisdiction of organization; 

        (b)   it
has full power and authority to enter into this Agreement and perform all obligations and conditions to be performed by it under this Agreement without any
restriction by any other agreement or otherwise; 

        (c)   the
execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action of that Party; 

        (d)   when
executed by each of the Parties hereto, this Agreement shall be a legal, valid and binding obligation of such party enforceable in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting creditors' rights generally and general principles of equity; 

        (e)   its
execution and delivery and performance of its obligations under this Agreement do not breach, violate, conflict with or contravene in any material respect
(i) its organizational documents, (ii) any laws, rules, regulations, orders, judgments or decrees applicable to or binding upon it or its property, or (iii) any other agreement,
instrument, mortgage, indenture, contract, license or other document to which it is a party or by which it is bound; 

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

11

 

        (f)    it
has obtained all governmental and third party consents and made all filings and notices required in connection with its execution, delivery and performance of this
Agreement, and all such consents, filings and notices remain in full force and effect; and 

        (g)   it
will comply in all material respects with all applicable laws, rules and regulations in the conduct of its responsibilities and activities under this Agreement. 

        9.2   Client
further represents and warrants to Priority Healthcare that the Product: 

        (a)   is
and shall be manufactured in conformity with the Food, Drug and Cosmetic Act, as amended from time to time, and all other applicable laws, rules, regulations, and
orders of governmental entities relating to the manufacture, promotion, sale, or distribution of the Product; and 

        (b)   to
Client's knowledge, does not violate or infringe any patent, trademark, trade name, or other interest of any person or entity. 

        9.3   Priority
Healthcare further represents and warrants to Client: 

        (a)   it
will store, handle and transport the Products, and prepare, maintain and retain all records regarding such matters and its distribution of Products in accordance with
(i) all Applicable Laws and (ii) the Operating Guidelines and Key Performance Indicators specifications and procedures, as such may be revised from time to time upon mutual agreement of
the Parties. 

        (b)   it
now possesses, or shall possess in advance of the commencement of Services hereunder, all requisite permits, licenses (state and federal), governmental approvals and
similar documentation to: (i) perform the Services hereunder throughout the Territory and (ii) operate a facility to conduct the Services contemplated hereunder for drug, biological and
ancillary products. 

        (c)   as
of the Effective Date, neither Priority Healthcare, nor to its knowledge after making reasonable and appropriate inquiries and performing reasonable and appropriate
background checks, any of its personnel has been: subject to debarment or convicted of a crime which could lead to debarment under any Applicable Law, including without limitation, the Federal Food,
Drug and Cosmetic Act, 21 U.S.C. Sec. 335a. Furthermore, Priority Healthcare represents and warrants that, to its knowledge, as of the Effective Date hereof, no claims, actions, proceedings or
investigations that likely would result in such restrictions, exclusions, sanctions or other disciplinary measures are pending or threatened against Priority Healthcare or, to its knowledge after
performing reasonable and appropriate inquiries and performing reasonable and appropriate background checks, any of its personnel. Priority Healthcare will immediately notify Client of any allegations
or investigations of Priority Healthcare or any of its
personnel regarding actual or threatened claims that could lead to debarment, subject to applicable confidentiality constraints arising from applicable law or imposed by governmental agencies. 

        10.   Taxes. Client shall pay when due all sales, use, gross receipts, excise, and personal
property taxes associated with the Product (excluding any personal property tax associated with Priority Healthcare's equipment used in connection with the Services), and other taxes now or hereafter
imposed as a result of the transactions contemplated by this Agreement, none of which have been included in the Fees payable to Priority Healthcare under this Agreement; provided that the amounts
payable by Client under this section shall not include taxes based on the assets, property, gross receipts or net income of Priority Healthcare. 

        11.   Trademarks. Neither Party shall have the right to use the name of the other Party or any
Affiliate of the other Party, or the other Party's or such Affiliates' trademarks, service marks, logos, or other similar marks in any manner except with the prior written approval of that Party;
provided that the foregoing shall not prohibit Priority Healthcare's use of Client's names or marks in connection with the performance of the Services in a manner consistent with this Agreement.
"Affiliate," as used in this Agreement, means any legal entity that, during the Term hereof, controls, is controlled by, or is under common control
with, such Party. For purposes of this definition, an entity shall be deemed to control another entity if it owns or controls, directly or indirectly, at least fifty percent (50%) of the voting
interest of all equity interests of the other entity (or other such comparable ownership interest for an entity other than a corporation). 

        12.   Confidentiality.

        12.1   Each
Party acknowledges that as a result of this Agreement it may learn and have access to trade secrets and other confidential and proprietary
information of the other Party through employees, representatives and/or agents acting on behalf of or subcontracted to either Party (collectively the
"Representatives"), including without limitation, financial information, information regarding business practices and techniques, and systems and
technology information, or any information identified as confidential in writing by either Party (the "Confidential Information"). Client acknowledges
and 

12

 

agrees
that all information and materials related to the System shall constitute Confidential Information. For purposes of this Agreement, Confidential Information shall not include information
disclosed by one Party to the other Party to the extent that such information can be proven, by written objective evidence: (a) to be in the public domain or generally available in the industry
in which the disclosing Party engages in business without any violation of this Agreement by the other Party; (b) to be already legally known to the other Party or any of its Affiliates at the
time of its disclosure by the disclosing Party; (c) to have become known to the other Party or any of its Affiliates from a third party without any obligation of confidentiality or limitation
on use; or (d) to have been independently developed by the other Party or any of its Affiliates prior to the date of its disclosure. The specific material terms of this Agreement shall also be
deemed to be Confidential Information of each Party. Confidential Information shall not be deemed to be in the public domain or publicly known or in the receiving Party's possession because it, or any
uncompiled component(s) of it, is embraced (1) by more general information in the receiving Party's possession or (2) in general terms in publications. 

        12.2   Except
as otherwise provided herein, neither Party shall, directly or indirectly, at any time: (a) disclose to any third person or entity any
Confidential Information of the other Party (whether learned before or after the date of this Agreement), or (b) use, or permit or assist any third person or entity to use, any such
Confidential Information, excepting only: (i) disclosures required by law, rule, regulation or order, as reasonably determined by the disclosing Party or its legal counsel, and
(ii) disclosures on a confidential basis to directors, officers, employees, consultants, financial advisors, accountants, legal counsel, investment bankers, and agents of that Party or its
Affiliates and other parties as may be required by law, who have a reasonable need to know such Confidential Information in the normal course of business of that Party or any of that Party's
Affiliates. 

        12.3   The
obligations of confidentiality hereunder shall survive the termination of this Agreement for a period of three (3) years. Upon termination of
this Agreement (for any reason) each Party shall promptly: (i) return to the other Party all documentation and other materials (including copies of original documentation or other materials)
containing any Confidential Information of the other Party; or (ii) with the other Party's consent, which consent will not be unreasonably withheld, certify to the other Party, pursuant to a
certificate in form and substance reasonably satisfactory to the other Party, as to the destruction of all such documentation and other materials. 

        13.   Indemnification. Each Party shall indemnify and hold harmless the other Party and its parent
and Affiliates, and each of their directors, officers, employees, agents, and representatives from and against all claims, liabilities, losses, damages, costs, and expenses, including, without
limitation, reasonable attorneys' fees (collectively, "Liability"), to a third party arising directly or indirectly out of any failure of that Party to
perform fully all obligations and conditions to be performed by that Party pursuant to this Agreement or any breach of any representation or warranty made by that Party in this Agreement. Client
further agrees to indemnify and hold harmless Priority Healthcare, its parent and Affiliates and each of their directors, officers, employees, agents, and representatives from any and all Liability
arising directly or indirectly out of or relating to (i) injury or death to person or property alleged to have been caused by Client's Product, (ii) any violation or infringement of any
patent, trademark, tradename, or other interest of any person or entity, and (iii) the manufacture, marketing, testing, shipping, sale, possession, or use of Product;  provided, however, Client shall have no liability or be obligated to indemnify Priority Healthcare, it
directors, officers, employees, agents or representatives for any Liabilities which arise due to the gross negligence or willful misconduct of Priority Healthcare, its employees, agents or
representatives. Priority Healthcare further agrees to indemnify and hold harmless Client, its Affiliates and each of their directors, officers, employees, agents and representatives from and against
all Liability, including personal injury and property damage, which may arise as a result of, or in connection with, Priority Healthcare's performance under this Agreement and due to the negligence or
willful misconduct of Priority Healthcare, its employees, agents or representatives. 

        14.   Limitation of Liability. NOTWITHSTANDING THE FOREGOING, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR OTHER SIMILAR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.  

        15.   Insurance. Each Party shall maintain at its expense commercial general liability insurance in a principal amount of
not less than the coverage generally maintained by companies of similar size in its industry. Each Party shall also maintain a product liability policy relating to any use of the Products at any time
after the date of this Agreement with coverage of not less than One Million Dollars ($1,000,000) per occurrence and Five Million Dollars ($5,000,000) in the aggregate, excess of a
self-insured retention. Priority Healthcare's insurance policy requirements are covered under its indirect corporate parent, Express Scripts, Inc. Any Party may elect to suspend its
performance under this Agreement until any insurance required to be maintained by the other Party is in place and such certificates of coverage are provided. 

13

 

        In
the event that any of the required policies of insurance are written on a claims-made basis, then such policies shall be maintained during the entire term of this
Agreement and for a period of not less than five (5) years following the termination or expiration of this Agreement. 

        Each
insurance policy that is required under this Section shall be obtained from an insurance carrier with an A.M. Best rating of at least A-VII. 

        16.   Dispute Resolution.

        16.1   Disputes.
The Parties agree to use good faith efforts to resolve all disputes within ninety (90) days of written
notice that such a dispute exists. If a dispute under this Agreement cannot be resolved by the Parties within such ninety (90) day period, the Parties agree to refer the matter to one executive
from each Party not directly involved in the dispute for review and resolution. A copy of the terms of this Agreement, agreed upon facts and areas of disagreement, and a concise summary of the basis
for each side's contentions will be provided to both executives who shall review the same, confer, and attempt to reach a mutual resolution of the issue within forty-five (45) days
after receipt of the materials referenced above. If the matter has not been resolved within such forty-five (45) day period, either Party may submit the dispute to arbitration in
accordance with Section 16.2 to resolve the dispute. 

        16.2   Arbitration.
Notwithstanding anything to the contrary herein, any dispute
arising pursuant to or in any way related to this Agreement or the transactions contemplated hereby, which cannot be resolved by best efforts negotiation, shall be settled by binding arbitration in
New Jersey, in accordance with the American Arbitration Association's then-existing Arbitration Rules and Procedures, provided, however, that nothing in this Section 16.2 shall
restrict the right of either Party to apply to a court of competent jurisdiction for emergency relief pending final determination of a claim by arbitration in accordance with this Section 16.2.
So long as such arbitration is completed within the requisite 90-day period, neither party shall terminate this Agreement while such emergency application is pending before a court of
competent jurisdiction. Each Party shall pay its own expenses associated with such arbitration, except for the costs of the arbiter, which cost shall be borne equally by the Parties. The decision of
the arbiter, based upon written findings of fact and conclusions of law, shall be binding upon the Parties, and judgment in accordance with that decision may be entered in any court having
jurisdiction thereof. In no event shall the arbiter be authorized to grant any punitive, incidental or consequential damages of any nature or kind whatsoever. Nothing contained in this Agreement shall
be deemed to give the arbiter any authority, power or right to alter, change, amend, modify, add to, or subtract from any of the provisions of this Agreement. The Parties, their representatives, other
participants and the arbiter shall hold the existence, content, and result of mediation and arbitration in confidence to the maximum extent permitted by law. 

        17.   Miscellaneous.

        17.1   CuraScript's
Guarantee of Payment and Performance. CuraScript, Inc. hereby absolutely, irrevocably and unconditionally
guarantees to cause Priority Healthcare to perform all of its obligations under this Agreement, including, without limitation, Priority Healthcare's performance of the Services and the honoring of any
indemnities under this Agreement (collectively, the "Guaranteed Obligations") The obligations of CuraScript contained herein are primary, absolute and unconditional, and shall continue in full force
and effect until the proper payment and performance in accordance with this Agreement, as applicable, of all of the Guaranteed Obligations and are not conditioned upon any attempt first to obtain
payment from Priority Healthcare under this Agreement, or pursuit of any other right or remedy against Priority Healthcare through the commencement of legal proceedings or otherwise. With respect to
its obligations hereunder, CuraScript expressly waives any requirement that Client exhaust any right, power or remedy or proceed first against Priority Healthcare under this Agreement before pursuing
recourse against CuraScript hereunder. CuraScript acknowledges and agrees that its obligations hereunder shall continue in full force and effect, without notice from any other party or Client to
CuraScript in the event the obligations of Priority Healthcare under this Agreement are amended or in any way modified pursuant to the terms of this Agreement or as otherwise mutually agreed by the
Parties, and that the Guaranteed Obligations shall continue and shall apply in full to such amended obligations of Priority Healthcare as though the amended terms had been a part of under this
Agreement from the date of execution hereof. With respect to application of this guaranty, CuraScript shall be afforded the same rights as Priority Healthcare under the Agreement with respect to
enforcement of the terms of this Agreement and the protections available to Priority Healthcare under this Agreement. 

        17.2   Terms
and Conditions Control. In the event of any conflict between a provision of these Terms and Conditions and a provision
set forth in an Exhibit attached hereto, the provision in the terms and conditions of the main body of the Agreement shall control. 

14

 

        17.3   Relationship
of the Parties. The relationship among the Parties is that of independent contractors, and neither Party shall
incur any debts or make any commitments for the other Party except to the extent expressly provided in this Agreement. Nothing in this Agreement is intended to create or shall be construed as creating
between the Parties the relationship of joint venturers, partners, employer/employee, or other agency relationship among the Parties. 

        17.4   Notices.
Any notices required or permitted to be given hereunder shall be delivered by personal delivery, overnight
commercial courier or by certified mail, return receipt requested, at the address of the parties specified below, and shall be effective upon receipt. Either Party may at any time designate another
person or address for the receipt of notice by notifying the other Party in accordance with this Section 17.2. 

	

If to Client:	
 	

If to Priority Healthcare:
	Reliant Pharmaceuticals, Inc.

110 Allen Road

Liberty Corner, NJ 07938

Attn: Anthony Marconi,

Director, Distribution	 	c/o CuraScript, Inc.

6272 Lee Vista Boulevard

Orlando, FL 32822

Attn: General Counsel
	

With a copy to:	
 	

 
	

Reliant Pharmaceuticals, Inc.

110 Allen Road

Liberty Corner, NJ 07938

Attn: General Counsel	
 	

 

        17.5   Governing
Law. This Agreement and all matters or issues related this Agreement shall be governed by the laws of the State of
New Jersey without regard to its choice of law or conflict of laws rules. 

        17.6   Severability.
If any term of this Agreement is declared invalid or unenforceable by a court or other body of competent
jurisdiction, the remaining terms of this Agreement will continue in full force and effect. 

        17.7   Non-Waiver.
No failure by either Party to insist upon strict compliance with any term of this Agreement, to
enforce any right, or to seek any remedy upon any default of the other Party shall affect, or constitute a waiver of, the first Party's right to insist upon strict compliance, to exercise that option,
to enforce that right, or to seek that remedy with respect to that default or any prior, contemporaneous, or subsequent default. No custom or practice of the Parties at variance with any provision of
this Agreement shall effect, or constitute a waiver of, that Party's right to demand strict compliance with all provisions of this Agreement. 

        17.8   Force
Majeure. If the performance of any part of this Agreement by either Party shall be prevented, restricted, interfered
with, or affected for any length of time by fire or other casualty, government restrictions, war, acts of terrorism, riots, strikes or labor disputes, lock out, transportation delays, acts of God, or
any other causes which are beyond the reasonable control of such Party, such Party shall not be responsible for delay or failure of performance of this Agreement for such length of time. 

        17.9   Complete
Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes any contracts,
agreements, or understanding (oral or written) of the Parties with respect to the subject matter hereof. No term of this Agreement may be amended except upon written agreement of both Parties, unless
expressly provided in this Agreement. 

        17.10   Assignment.
Neither Party shall sell, assign, mortgage or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other Party, such consent not to be unreasonably withheld, conditioned or delayed, nor shall any of said rights or obligations be assigned or transferred by
operation of law or otherwise without such consent. Notwithstanding the foregoing, and without the consent of the other Party (a) either Party may assign this Agreement in connection with a
sale of all or substantially all of its assets or equity interests, or to any parent, subsidiary or affiliate; and (b) in the case of Client, it may assign this Agreement in connection with a
merger or a sale of all or substantially all of its assets or equity interests to any third party successor in interest. In the event of any permitted assignment or transfer, the assignee shall agree
to accept and abide by this Agreement. 

        17.11   Publicity.
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. 

15

 

        IN
WITNESS WHEREOF, the undersigned acknowledge and accept the terms of this Agreement and have duly executed this Agreement. 

	

PRIORITY HEALTHCARE DISTRIBUTION, INC.	
 	

RELIANT PHARMACEUTICALS, INC.
	

By	

	
 	

By	

	

Title	

	
 	

Title	

	

Facsimile No. ___________________	
 	

Facsimile No. ___________________
	

FOR PURPOSES OF GUARANTY CURASCRIPT, INC.	
 	

 	

 
	

By	

	
 	

 	

 
	

Title	

	
 	

 	

 

16

  

 
 

Exhibits    
    

	

Exhibit A	
 	

Operating Guidelines
	

Exhibit B	
 	

Key Performance Indicators
	

Exhibit C	
 	

Client Returns Goods Policy
	

Exhibit D	
 	

Fee Schedule (2007)
	

Exhibit D-1	
 	

Fee Schedule (2008 and Subsequent Years)
	

Exhibit E	
 	

Additional Time and Materials Rates

17

 
 
 

EXHIBIT A
  
    OPERATING GUIDELINES
  
    Reliant / Priority Healthcare
  3rd Party Logistics Services
  
    Operating Guidelines    
    

The
Operating Guidelines shall be incorporated into the Distribution Services Agreement between Reliant Pharmaceuticals, Inc. ("Client"), and Priority Healthcare ("Vendor"), dated
January 10, 2005 (the "Agreement"). Capitalized terms not otherwise defined in this Operating Guidelines shall have the same meaning as set forth in the Agreement. 

In
performing its obligations under the Agreement, Vendor will follow these Operating Guidelines. The Operating Guidelines are in addition to the SOPs that have been approved by Client for use by
Vendor in the performance of Services. 

1.0   WAREHOUSING & STORAGE  

	1.1
	Vendor
will maintain its warehouse facility in accordance and comply with all federal, state and local laws, rules and regulations, including current Good Manufacturing Practices
(cGMP) 21 CFR Parts 210 and 211 as promulgated under the FDA.

	1.2
	Vendor
will maintain SOPs appropriate for a pharmaceutical distribution center operating environment. Vendor must submit all SOPs used in the performance of Services under the
Agreement, and any material changes thereto, to Client for Client's approval. All SOPs will be appropriately approved and controlled under the Vendor cGMP quality system.

	1.3
	Vendor
will maintain cGMP compliant documented training programs. These training programs will include training on all SOPs, the Operating Guidelines and the Quality Requirements
Agreement. Client will have the authorization to audit the training records.

	1.4
	Vendor
will comply with all storage, handling and shipping conditions designated by Client for the Product. Storage facility will be maintained with commercially reasonable disaster
recovery plans and back-up systems.

	1.5
	The
Product will be stored by Vendor in accordance with the US Pharmacopia standards. Client shall ensure that the storage requirements are identified on the package label. Client
shall ensure that the storage requirements, lot number and expiry date will be in human readable format and the Product NDC number will be in an acceptable barcode/UPC format on the unit carton.
Product will be stored in areas designed to be continuously monitored and will be periodically validated for the temperature range specified for the Product. Vendor will maintain daily temperature
recordings. Vendor will provide such records to Client upon written request.

	1.6
	Vendor
will report temperature excursions and any deviations to established procedures or Operating Guidelines to Client Quality Assurance within 24 hours from the point of
discovery.

	1.7
	Product
will be stored in an area with secured access, accessible only to authorized Vendor and Client personnel. All Client personnel will be trained and sign off on Vendor Warehouse
code of conduct. A signed copy of such sign off will be retained by Vendor. A log of all warehouse entries will be retained by Vendor. 

18

 

2.0   RECEIVING  

	2.1
	Client
or Client's contract manufacturing agent will arrange transportation services to transfer the Product to Vendor. Client will notify Vendor of the specific delivery schedule.

	2.2
	Each
shipping carton of Client's Commercial Product will be labeled with a barcode representing the Product's NDC number, lot number, and expiration date. This information will also
be in human readable format. Each individual shipping container (unit carton) will have a barcode representing the Product's NDC number and will have the Product lot number and expiration date in
human readable format. (NOTE: Clinical and R&D materials may not contain expiry dating or NDC numbers.) Client Product literature will have a readily visible and distinguishable Reliant code number.

	2.3
	Client's
carrier will contact Vendor to arrange a delivery appointment.

	2.4
	Client
shall retain title and ownership to the Product at all times. Vendor signature on the carrier's bill of lading is an acknowledgement only of Vendor's receipt of Product.

	2.5
	Client
will provide Vendor with a Material Safety Data Sheet for the Product.

	2.6
	Client's
Product will meet the following standards for carton identification, documentation, palletization, and uniformity:

	2.6.1
	Currier
will provide the bill of lading, certificate of analysis and other documentation necessary. Vendor will follow its SOP for receiving Product.

	2.6.2
	Pallets
will meet GMA standards for 40" × 48" × 46" dimensions with four-way entry; will be free of broken boards,
treated for pests, and clean.

	2.6.3
	Receipt
of Product on non-standard pallets may require restacking onto conforming pallets at Client's expense.

	2.6.4
	Palletized
Product must be uniform and consistent with specifications set up in the Product master for the number of cartons and individual units.

	2.7
	Vendor
will receive each shipment into a secure receiving area and perform all requirements as detailed in Vendor's receiving SOP

	2.8
	Vendor
will count and inspect the exterior packaging of the Product, noting any shortages, overages or damage on the carrier bill of lading. Vendor will obtain the carrier's signature
on the bill of lading acknowledging the condition of the Product upon receipt by Vendor.

	2.9
	Vendor
will compare the Client documentation to Vendor's receiving report. Discrepancies will be noted. Vendor Quality Assurance will investigate and report all discrepancies to
Client Quality Assurance within 24 hours of receipt. Client and Vendor will determine corrective actions, if any.

	2.10
	Vendor
will fax or send electronically the respective BOL, shipping documents, Reliant Product Quarantine Log, Checklist for Receiving Samples, and downloaded temp tale data to
Client Quality Assurance for official lot release. Product will be held in quarantine until released in writing by Client Quality Assurance.

	2.11
	Upon
request Vendor will remove certain quantities of product lots from quarantine and ship to Client's designee for quality testing.

	2.12
	Product
in unapproved or quarantine status will be physically segregated and labeled as to its status and/or designated in Vendor's warehouse management system to prevent unapproved
Product from entering approved picking areas of the warehouse. 

19

 
	2.13
	Client
Quality Assurance will fax written or send electronic documentation to Vendor to release the lot from quarantine Product status to approved Product status.

	2.14
	Vendor
will post receipts in the warehouse management system within four business hours of delivery unless count discrepancies, missing paperwork, damage investigation, and other
receiving anomalies interfere with efficient receiving and documentation. Vendor will report this attribute periodically according to Section 21 of the Operating Guidelines.

	2.15
	Vendor
will move Product from the receiving area to Quarantine storage following Vendor SOPs.

	2.16
	Vendor
will ensure that lot integrity is maintained while in storage. 

3.0   INVENTORY  

	3.1
	Inventory
will be received, tracked and controlled on Vendor's warehouse management system by item number, lot number, Client control number, expiration date, quantity, and status.
Vendor's warehouse management system will comply with the provisions of the Priority GMP Manual.

	3.2
	Quarantined
Product will be physically or systematically segregated and appropriately physically or electronically labeled. Quarantined Product will be released from quarantine status
in Vendor's warehouse management system upon written or electronic authorization by Client's Quality Assurance.

	3.3
	Vendor
will assign a unique location for the Product and lot in storage.

	3.4
	Vendor
will perform a daily cycle count on forward pick locations that have had activity during the given day. Vendor will use its commercially reasonable efforts to maintain accurate
and timely inventory records. Vendor will report on cycle count accuracy periodically according to Section 21 of the Operating Guidelines.

	3.5
	Inventory
variances will be investigated by Vendor and reported promptly to Client and in no event later than 24 hours. Corrective actions will be determined jointly by Vendor
and Client.

	3.6
	Vendor
will conduct a complete physical inventory once per calendar year, upon at least fourteen (14) business days advance written notice prior to the start of a physical
inventory, or more frequent if inventory variances exceed the standard of [***] accuracy, as set forth in Section 21 of the Operating Guidelines. Additional physical
inventories may be requested by client during the year presuming at least 14 days notice is provided and client assumes the cost of conducting an additional inventory if additional man hours
are required.

	3.7
	Vendor
will notify Client in accordance with short dated process of all expired or short dated Product.

	3.8
	Vendor will receive returned Product according to Vendor SOP and Client's Returned Goods Policy. Client's Quality Assurance will
determine appropriate disposition of the returned Product. Client's Quality Assurance must be notified prior to disposition of the Product. If the disposition is to destroy the Product, Vendor will
follow Vendor SOPs and subcontract the destruction by means of incineration through a third party supplier. Vendor will provide Client with the Certificate of Destruction. Vendor will provide for all
functions relating to the processing of a return up to and including destruction. All destruction costs will be passed through to Client. 

4.0   DISTRIBUTION  

	4.1
	Orders
approved and available for processing (pick & pack) by 3:00 p.m. Eastern Standard Time Monday through Thursday, and on Fridays if approved by Client, will be
shipped before the close of business the same day ("Standard Hours"). Orders received and processed after 3:00 p.m. Eastern Standard Time will be shipped the following business day. For order
received after 

20

 

Standard
Hours, Vendor will fax a notification to the Customer alerting them that the Product will ship on the following business day. If the day the Product is to be received by the Customer falls on
a holiday or weekend, then the order will be shipped on the next business day which will ensure the Product will not be delivered to Customer on a holiday or weekend. 

	4.2
	Orders
placed within Standard Hours will be shipped to Customer via standard delivery service.

	4.3
	Any
Drop shipment request must be discussed and approved by Reliant. Any additional charges associated with the drop shipment must be charged to client.

	4.4
	Orders
placed outside Standard Hours and in which the Customer has requested delivery for the next day will be defined as emergency orders and will be shipped via priority overnight
delivery. If client approves services requiring overtime, charges will be discussed and if authorized, client will pay additional charges.

	4.5
	Orders
placed during Standard Hours in which the Customer requests priority service (upgrade of shipping service) will be accommodated and Client will cover the cost of the increased
freight charge. This will be accommodated on an exception basis only and not implemented as standard ongoing service for a particular Customer.    Except for instances where expedited
freight shipping is due to request of client cost of expedited freight must be invoiced to customer.

	4.6
	Client
will be responsible for monitoring customer ordering practices. Vendor will establish programs and policies to monitor for and flag suspected speculative ordering patterns.

	4.7
	Recognizing
that order volume may fluctuate from time to time, Vendor will staff to meet [***]% of the rolling forecast provided by Client. Vendor will use
commercially reasonable efforts to meet the shipping schedule outlined herein when order or unit volume exceeds [***] of the rolling average number of orders or units;
provided, however, that Vendor cannot guarantee daily on-time shipping standards will be achieved during such increased activity periods.

	4.8
	Vendor
will measure the timeliness of shipments and will report this attribute periodically according to Section 21 of the Operating Guidelines.

	4.9
	Vendor
will staff the inbound phone line from 8:30 a.m.-5:00p.m. Eastern Standard Time, Monday through Friday, except for the following holidays: Christmas Day, New
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and the day after Thanksgiving. For shipments called in after the carrier's cutoff time (approximately 5:00 p.m. for
overnight airfreight), Vendor will ship the Product the following day, subject to carrier availability.

	4.10
	Vendor's
inventory system will comply with First-to-Expire, First-Out (FEFO) inventory allocation. Any exceptions from FEFO must be approved by
Client in writing prior to shipment.

	4.11
	Vendor
will perform quality verification on all Client shipments by an individual other than the employee who picked the order. Vendor will use commercially reasonable efforts to
pick, check and ship accurately all Customer orders. Vendor will measure picking and shipping accuracy and will report this attribute periodically according to Section 21 of the Operating
Guidelines.

	4.12
	Vendor
and Client will mutually determine and agree in writing on the packaging requirements for shipping the Product. Vendor's Quality Assurance will assist Client and Vendor will
issue appropriate guidelines and cGMP training to the distribution department to assure compliance with Client's specifications. These specific Client specifications will be controlled in the Vendor
cGMP quality system.

	4.13
	Vendor
will provide shipment confirmation information to Client through Vendor's information System on the same business day on which the shipment occurs. 

21

 
	4.14
	Vendor
will manage and provide shipping supplies—including vendor selection, ordering, inventory record keeping, and storage.

	4.15
	An
order will be billed to Client at time of shipment. Shipment for items on backorder will not be billed to Client so long as backorders represent less than 20% of shipment volume. 

5.0   TRANSPORTATION  

	5.1
	Client
will determine a common carrier(s) based on shipment size, destination, freight rates, availability of standard and special services, reliability of delivery, and claim history
among other requirements.

	5.2
	Shipping
charges, including all special charges for insurance, proof of delivery, hazardous materials, service upgrades, and so forth, will be billed directly to Vendor's account with
the carrier and passed through to Client.

	5.3
	Freight
terms for outbound shipments will be F.O.B origin.

	5.4
	Vendor,
at the request of the Client, will provide proof of delivery for specific Customer shipments. Fees charged by carriers for proofs of delivery, if any, will be passed directly
to Client. 

6.0   CUSTOMER SERVICE  

	6.1
	Vendor
will provide a dedicated inbound phone line (or lines) for Client's Customers to phone in purchase orders, for inquiries, and for general information.

	6.2
	Vendor
will staff the inbound phone line from 8:30 a.m.—5:00 p.m. Eastern Standard Time, Monday through Friday, except for the following holidays: Christmas
Day, New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and the day after Thanksgiving.

	6.3
	Vendor
will be responsible for training Vendor's customer service representative(s) and backup representative(s). Client will provide company and Product specific information for
training of the customer service representatives assigned to Client.

	6.4
	Vendor
will be responsible for initial set up and on-going maintenance of Customer master files. The initial Customer master file will be approved and signed by Client.
Client may add Customers by completing the Customer profile form and forwarding to Vendor for system entry. Master file reconciliation process will be developed and approved by both parties. Client
will receive updates of changes (specifications to be provided by Client) made on a daily basis.

	6.5
	Vendor
will accept Customer orders by electronic data interchange (EDI) mail or fax. Vendor will maintain records of all Customer orders. All Customer orders must be in writing or by
EDI. Vendor will not accept telephone orders without a mail or fax confirmation.

	6.6
	Vendor
will use commercially reasonable efforts to answer inbound phone calls within the first thirty (30) seconds, and will report this attribute periodically according to
Section 21 of the Operating Guidelines.

	6.7
	As
a backup to the customer service representatives, a voice mail system will be maintained to collect messages from Customers.

	6.8
	Vendor's
customer service representatives will re-route, via warm transfer, all misdirected calls to the appropriate vendors designated by Client. In the event that a call
cannot be re-routed to a particular vendor (e.g., due to a system outage), the customer service representative should warm transfer the call to the Client's customer service hotline. 

22

 

7.0   ORDER ENTRY  

	7.1
	Client's
minimum order quantity will be provided by Client. Vendor will ensure customer orders meet client's minimum requirements.

	7.2
	Client
will instruct its Customers to place orders based on the contract between Client and Customer.

	7.3
	Vendor
will follow the Client's Customer price list.

	7.4
	Client
will determine when Customers shall pay for premium freight, special handling, and emergency order processing. Client reserves the right to limit quantities, to hold or to
refuse orders. These decisions will be executed by Vendor. It is the responsibility of the Client to monitor Customer ordering practices.

	7.3
	Vendor
will use commercially reasonable efforts to enter orders accurately. Vendor measures the accuracy of orders entered and will report this attribute periodically according to
Section 21 of the Operating Guidelines. 

8.0   CUSTOMER CREDIT  

	8.1
	Client
will establish credit limits for each Customer or groups of Customers.

	8.2
	Vendor's
System will monitor orders and outstanding accounts receivable against the Customer's credit limit and hold orders where credit limits are exceeded. Vendor's system will also
hold orders if customer's past due aging is unsatisfactory. (invoice amount (less deductions)greater than 15 days past due hold order). New Order plus released backorders plus open balance must
be adjudicated against credit limit.

	8.3
	Client
may elect to place a Customer's account on credit hold so that all orders are reviewed prior to shipment. Client can override for specific clients credit check rules specified
above. Client will provide specific customers for which over ride conditions must be established.

	8.4
	Client
will review and approve all Customer orders held for credit limits prior to shipment. 

9.0   PRICING AND TERMS  

	9.1
	Client
will publish terms and conditions of sale to its direct customers. Standard terms are 2% -30 days, net 31 days. Contracted Customers may have
non-standard terms.

	9.2
	Client
will publish list prices for direct customers, which are subject to change from time to time at the sole discretion of Client.

	9.3
	Client
will determine contract prices on a contract-by-contract basis. Client will notify Vendor of such price changes with 24 hour notice for update of
the Vendor system files. Client will develop and forward Customer notifications to Vendor and Vendor will upon clients request provide printing and mailing services on behalf of Client. Charges
related to printing and mailing services will be passed through at vendors cost to client. Need client review

	9.4
	Vendor
will perform system maintenance of pricing and terms. Client will provide to Vendor in writing any changes to prices or terms. Vendor will be responsible for updating the
Vendor system within 24 hours of receipt of such notice or as Client may otherwise instruct.

	9.5
	Vendor
employees are bound by the confidentiality provisions of the Agreement between Vendor and Client and, as such, shall not disclose Client sales data or pricing information
outside the specific Vendor employees who have a need to know of this information in the course of performing their routine job responsibilities. 

23

 
	9.6
	Vendor
will provide the necessary reports within stipulated time frames to ensure Client can comply with the reporting requirements of Medicaid (OBRA), Veterans HealthCare Act, PHS
Covered Entities, and state rebate programs. Client will define reporting requirements against which Vendor will produce the required reports. 

10.0 INVOICING  

	10.1
	Vendor
will use commercially reasonable efforts to mail invoices the morning following shipment of Product, or transmit by electronic data interchange (EDI), where installed, the
same day of shipment of Product, to Customer's billing address.

	10.2
	For
any order shipped after the close of business, the invoice will be prepared and mailed the following business day.

	10.3
	Vendor
will make commercially reasonable effort to process invoices as timely and accurately as possible. Vendor measures invoice accuracy and processing timeliness and will report
this attribute periodically according to the conditions set forth in Section 21 of the Operating Guidelines. 

11.0 CHARGEBACKS  

	11.1
	Vendor
will receive EDI transmissions and forward chargeback related transactions (Client to provide EDI form codes) to Client. 

12.0 ACCOUNTS RECEIVABLE  

	12.1
	Client
will open and maintain a bank lockbox. The bank will receive Customer remittances invoice information on behalf of Client. Customers may remit payment via check, transfer or
EFT.

	12.2
	Client
will provide to vendor access to images of lock box deposits and customer remittance information via client bank's website.

	12.3
	Vendor
will reconcile and apply the cash receipt to the outstanding account receivable within 24 hours of receipt from the bank.

	12.4
	Vendor
will disallow discounts for payments received beyond the payment terms, as indicated by the Postmark date. Vendor will handle the amount of the discount as a balance due on
the Accounts Receivable account.

	12.5
	Vendor's
standard for past due payment collection activity:

	12.5.1
	Initiate
collection call when invoice becomes 8 days past due.

	12.5.2
	Initiate
second collection call at 16 days past due. and continue follow-ups until invoice /deduction has satisfactorily been collected or resolved. At
30 days past due information will be escalated to client.

	12.5.3
	Client
will proved direction to Vendor on all escalated items within 5 business days.Vendor will maintain notes related to collection activities in an Accounts Receivable system
file that will be accessible to Client' authorized personnel.

	12.6
	Vendor
will use commercially reasonable efforts effort to process accounts receivable as timely and accurately as possible. Vendor will measure accounts receivable and collections
activity and report these attribute periodically according to Section 21 of the Operating Guidelines.

	12.7
	Vendor
will post all short payments and/or remittance deductions immediately upon application of customer's payment. Vendor will code the short payment/deduction based on code
schedule provided by client. Vendor will take all appropriate steps to reconcile and resolve satisfactorily all deductions related but not limited to product return differences, chargeback disputes,
cash 

24

 

discounts,
price discrepancy, etc. Items that cannot be reconciled must be escalated to Client for resolution. 

13.0 MONTH-END CLOSE  

	13.1
	Client
will complete its close by the first working day after the last day of the month being closed. Vendor will make every effort to record all transactions for the month being
closed by the close of business on the first working day (day 1) of the following month. (i.e. March activity is posted by the end of the first working day in April.). Vendor will measure and
report this attribute periodically according to Section 21 of the Operating Guidelines.

	13.2
	Cash
received by the bank on the final day of the month, and reported to Vendor in the A.M. transactions of the first working day of the month, will be applied by the end of
business on day 1 to the open receivables for the prior month.

	13.3
	Customer
payments that cannot be resolved by the close of business on day 1 will be communicated to the Client and posted as unapplied cash in the month received. Unapplied cash will
be resolved by Vendor in subsequent month." 

14.0 RETURNED GOODS  

	14.1
	Returns
will be processed in accordance with Client's Returned Goods Policy.

	14.2
	Vendor
will complete the processing of all returns and issue credits (if applicable) within five (5) business days of receipt of the return with the exception that all Returns
received in a calendar month must be processed by last business day of same month.

	14.3
	Vendor
will measure the timeliness of returned goods processing and will report this attribute periodically according to Section 21 of the Operating Guidelines. 

15.0 PRODUCT COMPLAINT RETURNS  

	15.1
	If
the Product is being returned due to a Product complaint, Vendor will obtain the following information from the end customer returning the Product:

	a)
	Name
of product, Strength, and Size, (Bottle count or Fill Volume)

	b)
	Lot
number

	c)
	#
of bottles to be returned.

	d)
	Summary
of the complaint

	e)
	Complainant's
name

	f)
	physician
name

	g)
	fax
number

	h)
	identify
source of product (i.e. Name of Wholesaler or whether it's a PAP Product)

	15.2
	Vendor
will fax instructions for returning the Product to the end customer, which will include, at a minimum, instructions to return the Product a) in a biohazard bag;
b) to Client's Quality Assurance Department; and c) to include the Return Authorization Number provided by Vendor on the outside of the package.

	15.3
	Client
will notify Vendor upon receipt of the Product. Upon notification, Vendor will issue a credit to the wholesaler on the end customer's behalf. The credit will identify the
Return Authorization 

25

 

Number
and the end customer name. The end customer will be responsible for following-up directly with the wholesaler to ensure appropriate credit/replacement has been issued. 

16.0 RECALL ASSISTANCE  

	16.1
	Client
is responsible for management of a recall event.

	16.2
	If
there is a recall or withdrawal of Product, then Vendor agrees to stop shipping recalled lots promptly, and in no event later than twenty-four (24) hours after
Vendor receives written notification of such recall.

	16.3
	If
mutually agreed upon, Vendor shall provide assistance to Client and cooperate fully in any such recall. Client shall pay to Vendor an amount equal to Vendor "s actual costs
incurred with any such recall services. Such cost shall be in addition to the Fees described in Exhibit C to the Agreement. Such assistance shall include but not be limited to:

	16.3.1
	Working
with Client to assist in the development of a recall strategy

	16.3.2
	Contacting
consignees (wholesaler, customers) who may have received affected Product and requesting prompt quarantine of all affected lots pending further disposition instructions
from Vendor or Client.

	16.3.3
	Storage
and control of on-hand inventory of recalled Product.

	16.3.4
	Receipt,
storage and control of returned recalled Product.

	16.3.5
	Documentation
of recalled Product used, destroyed or returned to the distributor through established document systems at Vendor.

	16.3.6
	Preparing
final Recall Report including a copy of all communications, if any, with FDA concerning the recall.

	16.3.7
	Shipment
of samples of recalled Product to Client or a designated testing site for analysis, if applicable.

	16.3.8
	Vendor
shall maintain appropriate cGMP SOPs, and to the extent that they are not in conflict with the Operating Guidelines or cGMPs, Vendor will follow its SOPs with regard to
executing these requirements.

	16.3.9
	Vendor
will be responsible for executing, or otherwise overseeing, the disposition of recalled Product in accordance with the decision set forth by Client's Recall Committee.

	16.4
	Vendor
will provide the necessary recall reports within two hours of notification by Client. Reports will contain, but not be limited to, the following information for each recalled
Product and lot number: all Customer shipments by date, item number, quantity, lot number, and ship to address.

	16.5
	Vendor
shall provide Client Quality Assurance with signed and dated records documenting final disposition of the Product(s). In addition, Vendor will assist with the following
information:

	16.5.1
	Name
and location of distributors involved in the execution of the final disposition of the recalled Product

	16.5.2
	Name
and location of drug destruction sites (if applicable)

	16.5.3
	List
of applicable State or Federal licenses currently required and held for drug transport    and/or disposal for all drug destruction sites (if applicable).

	16.5.4
	Product
disposition method

	16.5.5
	Amount
of Product dispositioned. 

26

 

	16.5.6
	Date
of Product disposition

	16.5.7
	Documentation
from each affected Distributor(s) head of Quality Assurance or designee attesting to the completion of the Product disposition functions and requirements set forth by
Client's Recall Committee. 

17.0 SYSTEMS  

	17.1
	Client
retains ownership to all Client Data in the Vendor System but grants Vendor a limited right to use such Client Data in the performance of its services.

	17.2
	Vendor
will use commercially reasonable efforts to maintain security of the Client Data in files, to segregate them and render them inaccessible to all third parties except those
providing services or systems support hereunder.

	17.3
	Vendor
will provide Client with on-line access to sales information, inventory records, lot tracking, Customer profiles, item maintenance, pricing and terms, and other
business critical data as defined in Vendor's standard reports output.

	17.4
	Vendor
will supply all necessary conversions and interfaces to clients system to support AR, Inventory Control and Costing, Purchasing, General Ledger, Model N. Additional reporting
interfaces and/or conversions may be jointly defined by Client and Vendor.

	17.5
	Vendor
will use commercially reasonable efforts to maintain all Systems within the change control SOPs.

	17.6
	Vendor
will use commercially reasonable efforts to make Vendor's System accessible to the Client 24 hours per day 7 days per week and guaranteed between the hours of
6:00 a.m.—7:00 p.m. Eastern Standard Time, Monday through Friday ("Accessible Hours"), except for routine, scheduled or emergency maintenance. Vendor will provide
48 hours advance notification to Client of a scheduled maintenance which would affect Client's ability to access the System.

	17.7
	Vendor
will use commercially reasonable efforts to ensure that unscheduled System downtime per calendar quarter shall not exceed [***]% of the Accessible
Hours. Vendor will promptly notify Client of any System problem that might affect services and an estimated time for restoration of System access. Vendor will measure system availability and report on
this attribute according to Section 21 of the Operating Guidelines.

	17.8
	Incremental
System backups will be generated on a nightly basis in conjunction with SOP "Backup and Recovery'. Full system backup will be generated on a weekly basis on non business
hours. These backup tapes will be stored either off-site as indicated by the SOP.

	17.9
	PHC
will host and direct as necessary EDI transactions for the client.

	17.10
	Client
will have real time access to Vendor's system dedicated to Client with the ability to create receiving and backorder reports. 

18.0 AUDITS  

	18.1
	Vendor
will assist Client with inspections/audits ordered by the FDA or other governmental or official agencies.

	18.2
	Client
will have the right to conduct audits in accordance with the terms of the Agreement. Vendor will assist Client with such audits.

	18.3
	Vendor
will notify Client promptly of any inspection activity by FDA, DEA or other government agency, as applicable to the Client or Client's Product. 

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

27

 

19.0 QUALITY COUNCIL REPORT  

	19.1
	Vendor
will provide Client with reports on measurable attributes including but not limited to those identified below. Such reports shall be used to track and benchmark performance.

	19.2
	Client
and Vendor will agree to meet periodically to review performance and to develop methods, policies, practices, and procedures that may improve the quality and efficiency of the
Vendor—Client relationship.

	19.3
	Vendor
will use its commercially reasonable efforts to meet or exceed the Client's expectation for performance based on the measured attributes.

	19.4
	Measured
attributes and standards: Performance penalties will be instituted Monthly Based on [***] of not hitting the standard. Total Performance penalties
will not exceed more than [***]% of 

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

28

 

the
Variable Monthly charges relative to order processing. Target date for performance penalties will be 60 days from commencement from trade. 

	Section
 
	 	Performance Attribute
	 	Performance Standard
	 	Credit Threshold
	 	Reporting Frequency
	 	Credit $

	  1.0	 	Temperature excursions	 	[***]	 	[***]	 	Upon occurrence	 	$[***]
	  2.0	 	On-time receipts and data entry	 	[***]	 	[***]	 	Monthly	 	$[***]
	  3.0	 	Cycle count accuracy	 	[***]	 	[***]	 	Monthly	 	$[***]
	  4.0	 	On-time shipping-trade	 	[***]	 	[***]	 	Monthly	 	$[***]
	  4.1	 	On-time shipping-rep	 	[***]	 	[***]	 	Monthly	 	$[***]
	  5.0	 	Picking/shipping accuracy for Bar-coded Items	 	[***]	 	[***]	 	Monthly	 	$[***]
	  5.1	 	Picking/shipping accuracy for NonBar-coded Items	 	[***]	 	[***]	 	Monthly	 	$[***]
	  6.0	 	Answer inbound phone calls within thirty (30) seconds	 	[***]	 	[***]	 	Monthly	 	$[***]
	  6.1	 	Abandon rate	 	[***]	 	[***]	 	Monthly	 	$[***]
	  7.0	 	Order entry accuracy	 	[***]	 	[***]	 	Monthly	 	$[***]
	  8.0	 	Invoicing accuracy	 	[***]	 	[***]	 	Monthly	 	$[***]
	 	 	Invoicing timeliness	 	[***]	 	[***]	 	Monthly	 	$[***]
	  9.0	 	Accounts receivable	 	[***]	 	[***]	 	Monthly	 	$[***]
	11.0	 	Month-End Close	 	[***]	 	[***]	 	Monthly	 	$[***]
	12.0	 	Return goods processing cycle time	 	[***]	 	[***]	 	Monthly	 	$[***]
	13.0	 	System availability	 	[***]	 	[***]	 	Monthly	 	$[***]

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

29

 
 
 

EXHIBIT B
  
    KEY PERFORMANCE INDICATORS    
    

	Section
 
	 	Performance Attribute
	 	Performance Standard
	 	Credit Threshold
	 	Reporting Frequency
	 	Credit $

	  1.0	 	Temperature excursions	 	[***]	 	[***]	 	Upon occurrence	 	$[***]
	  2.0	 	On-time receipts and data entry	 	[***]	 	[***]	 	Monthly	 	$[***]
	  3.0	 	Cycle count accuracy	 	[***]	 	[***]	 	Monthly	 	$[***]
	  4.0	 	On-time shipping-trade	 	[***]	 	[***]	 	Monthly	 	$[***]
	  4.1	 	On-time shipping-rep	 	[***]	 	[***]	 	Monthly	 	$[***]
	  5.0	 	Picking/shipping accuracy for Bar-coded Items	 	[***]	 	[***]	 	Monthly	 	$[***]
	  5.1	 	Picking/shipping accuracy for NonBar-coded Items	 	[***]	 	[***]	 	Monthly	 	$[***]
	  6.0	 	Answer inbound phone calls within thirty (30) seconds	 	[***]	 	[***]	 	Monthly	 	$[***]
	  6.1	 	Abandon rate	 	[***]	 	[***]	 	Monthly	 	$[***]
	  7.0	 	Order entry accuracy	 	[***]	 	[***]	 	Monthly	 	$[***]
	  8.0	 	Invoicing accuracy	 	[***]	 	[***]	 	Monthly	 	$[***]
	 	 	Invoicing timeliness	 	[***]	 	[***]	 	Monthly	 	$[***]
	  9.0	 	Accounts receivable	 	[***]	 	[***]	 	Monthly	 	$[***]
	11.0	 	Month-End Close	 	[***]	 	[***]	 	Monthly	 	$[***]
	12.0	 	Return goods processing cycle time	 	[***]	 	[***]	 	Monthly	 	$[***]
	13.0	 	System availability	 	[***]	 	[***]	 	Monthly	 	$[***]

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

30

 
 
 

EXHIBIT C
  
    CLIENT RETURN GOODS POLICY

 
 

Reliant Pharmaceuticals, Inc.    
    

 
  Return Goods Policy*  
    

 
  RETURNS FROM DIRECT CUSTOMERS    
    

General Information  

	•
	Sales Representatives are not authorized to accept merchandise or to approve the return of
merchandise.

	•
	Returns from direct customers are handled directly by Reliant and should be shipped to 313 Pierce St, Somerset, NJ
08873-1298.

	•
	Credit
will only be authorized if all conditions of this policy are adhered to and product is physically returned as instructed. 

Authorization  

Authorization to return merchandise must be obtained from our designated return goods processor, Pharmagistics or by contacting Reliant Customer Service at
1-800-475-2140. Authorized returns must include:

	•
	A
"Return Goods Authorization Form". Each shipment of return merchandise must contain an Authorization Form

	•
	Preprinted
return authorization shipping labels attached to the outer carton(s). 

Items Not Returnable:  

	A.
	If
not in original package.

	B.
	If
package label has been removed.

	C.
	If
purchased on a non-returnable basis. (e.g. free goods, short-dated merchandise purchased at a discount)

	D.
	If
involved in a fire sale or bankruptcy sale.

	E.
	If
deteriorated because of characteristics beyond the control of manufacturer; e.g., due to improper storage, heat, cold, water, smoke, fire, etc.

	F.
	If
returned more than six (6) months prior to expiration or more than twelve (12) months after the expiration date.

	G.
	Merchandise
damaged in transit—claim should be submitted to carrier.

	H.
	Any
new product, package size, form or strength held for a period of less than six months from the date of introduction.

	I.
	Saleable
items which are deemed to be temporary reductions in warehouse's inventory.

	J.
	Unauthorized
returns. 

31

 

Additional
Comments 

Transportation
charges for returns of merchandise must be prepaid. 

Basis
of credit for returned merchandise will be at the current [***] but never lower than original purchase price. Credit will be issued for partial packages of
merchandise based on a per pill basis if provided by customer or rounded to the lowest 1/4 bottle if not. 

RELIANT PHARMACEUTICALS RESERVES THE RIGHT TO DESTROY WITHOUT RECOURSE ALL RETURNED PACKAGES WHETHER RETURNED WITH OR WITHOUT
AUTHORIZATION.

It is suggested that wholesalers insure all return goods shipments. Reliant Pharmaceuticals cannot be responsible for shipments lost in transit.

	*
	This
version replaces / supersedes all previously published Direct Customer Return Goods Policies. Rev 5/15/2004 

[***]:    Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

32

 
 
 

Reliant Pharmaceuticals, Inc.    
    

 
  Return Goods Policy*  
    

 
  NON-DIRECT CUSTOMERS    
    

General Information  

	•
	Sales Representatives are not authorized to accept merchandise or to approve the return of
merchandise.

	•
	Returns from NON-DIRECT CUSTOMERS SHOULD BE HANDLED VIA YOUR WHOLESALER OR DISTRIBUTOR.

	•
	Credit
will be issued via the wholesaler based on the following conditions and product is physically returned as instructed. 

Authorization  

	•
	Each
shipment of return merchandise must contain an Authorization Form.

	•
	A
"Preprinted Return Authorization" shipping label must be attached to the outer carton(s). 

Items Not Returnable:  

	a)
	If
not in original package.

	b)
	If
package label has been removed.

	c)
	If
purchased on a non-returnable basis. (e.g. free goods, short-dated merchandise purchased at a discount)

	d)
	If
involved in a fire sale or bankruptcy sale.

	e)
	If
deteriorated because of characteristics beyond the control of manufacturer; e.g., due to improper storage, heat, cold, water, smoke, fire, etc.

	f)
	If
returned more than six (6) months prior to expiration or more than twelve (12) months after the expiration date.

	g)
	Merchandise
damaged in transit—claim should be submitted with carrier.

	h)
	Any
new product, package size, form or strength held for a period of less than six months from the date of introduction.

	i)
	Saleable
items which are deemed to be temporary reductions in warehouse's inventory.

	j)
	Unauthorized
returns. 

33

 

Additional
Comment 

Transportation
charges for returns of merchandise must be prepaid. 

Credit
will be issued via the wholesaler and based on retailers agreement with the wholesaler. 

Non-Direct accounts must provide their DEA Registration Number along with their primary wholesaler's name address and account number so that credit
may be given through that wholesaler on behalf of the pharmacy.

RELIANT PHARMACEUTICALS RESERVES THE RIGHT TO DESTROY, WITHOUT RECOURSE, ALL RETURNED PACKAGES WHETHER RETURNED WITH OR WITHOUT
AUTHORIZATION.

It is suggested that all return goods shipments be insured, as Reliant Pharmaceuticals cannot be responsible for shipments lost in transit.

	*
	This
version replaces / supersedes all previously published Non-Direct Customer Return Goods Policies. 

Rev
1 May 2004 

34

 
ATTACHMENT B  

 
 

CARDINAL HEALTH
  
    STANDARD POLICY ON CHARGEBACKS    
    

        The following represents the standard policy of Cardinal Health* ("Cardinal") pertaining to the prior sale of product under contract ("chargebacks") and the
processing, reversal and audits of chargebacks, as well as certain related matters. Depending upon the individual facts and circumstances associated with a supplier's administrative procedures for
chargeback related matters (e.g. the extent of use of EDI, electronic funds transfer, and other factors that contribute to or detract from Cardinal's ability to efficiently deal with chargeback
matters), Cardinal reserves the right to modify any or all of the following terms and conditions. 

I.     Chargeback Processing  

        Cardinal will recognize and administer contracts between suppliers and customers pursuant to which prices at which the customer may purchase certain products have
been established, subject to the continued validity of such contracts in accordance with applicable law and the supplier's compliance with Cardinal's standard policy. Amounts owed by suppliers to
Cardinal relating to chargebacks shall be calculated based upon the wholesale acquisition price of Supplier's product at the date of sale, and shall be paid, or credited, as appropriate, to Cardinal
within seven (7) days following Cardinal's submission of a request for those amounts. In the event that Cardinal notifies Supplier that chargeback amounts owed by Supplier to Cardinal exceed
amounts owed by Cardinal to Supplier (a "Debit Balance") Supplier will remit payment for chargebacks to Cardinal by check or wire transfer until such time that Cardinal notifies Supplier that it is no
longer in a Debit Balance. Legitimate chargeback reconciliation issues should be resolved as soon as practicable with each party responding to the other within 60 days following receipt of
documentation supporting those issues. 

II.    Chargeback Reversals on Contract Customer Returns  

        Upon Cardinal's issuing a credit to a contract customer related to the prior sale of product under contract (for which Cardinal previously billed and collected a
chargeback from the supplier), the chargeback will be reversed and remitted to the supplier only under the following terms and conditions: 

	A.
	Cardinal
must receive back from the customer merchantable product (i.e., Cardinal must be able to return the item to its inventory for resale in the ordinary course of its business
without special preparation, testing, handling or expense).

	B.
	The
customer's return of the product must be due to an error by Cardinal (i.e., item or quantity shipped did not match the item or quantity ordered). Cardinal will not reverse the
chargeback if the return is the result of an ordering or other error of the customer or supplier. 

This
chargeback reversal policy is necessary as the costs of administering the chargeback system of pricing continue to rise. More importantly, this policy will partially compensate Cardinal for its
cost of administering contracts, chargebacks and chargeback reversals, including interpretation of the contract, loading and administering the contract, follow-up required to obtain
renewals for expiring contracts, credit and rebill activities, reconciliation of chargeback differences, cost of handling product returns, inventory and chargeback receivable carrying costs, etc. 

35

 

III.  Supplier Chargeback Audits  

        The supplier shall have the right to audit Cardinal's compliance with the respective contracts in force and related chargeback matters (including compliance with
the chargeback reversal policy stated above) subject to the following terms and conditions: 

	A.
	Chargeback
audits will be limited to twenty four (24)months of historical information as of the date such audit begins.

	B.
	Cardinal
shall have a reciprocal twenty four (24) month period to reconcile any differences that may arise with the supplier related to chargeback issues (including submission
and other errors and regardless of whether such issues arise as part of a supplier chargeback audit). [need Charlie Ernst to explain]

	C.
	Supplier
shall notify Cardinal's Vice President—Controller of an intent to perform an audit at least 30 days prior to beginning the audit, specifying the location to
be audited and the time period to be covered. In the event that such timing is expected to create undue disruption in Cardinal's business, Cardinal shall have the right to delay the start of the audit
for up to 30 additional days.

	D.
	Audits
must be performed by bona fide, permanent employees of the supplier, subject to a confidentiality agreement to be prepared by Cardinal and signed by the supplier and such
employees, prior to beginning the audit.

	E.
	Audits
shall be performed at the Cardinal site that is being audited, or such alternate sites where appropriate records are located as Cardinal may designate.

	F.
	Audits
shall be performed during the normal, customary office hours of the Cardinal site that is being audited.

	G.
	The
existing accounting records of the Cardinal site being audited will be made available for audit, subject to the following limitations:

	1.
	Electronic
data will not be specially created.

	2.
	Cardinal
reserves the right to summarize the contents of all records containing confidential or competitive information.

	H.
	Cardinal
will bill the supplier for any direct and/or out-of-pocket costs incurred in conjunction with a supplier requested audit, unless such audit reflects a
deficiency of 5.0% of the actual amount of the invoice submitted over the audit period, or greater. Amounts billed will be deducted from Cardinal's next payment for current purchases, after completion
of the audit.

	I.
	Any
supplier claims arising from an audit must be supported by specific audit results related to specific transactions. Extrapolation of results from one period to another will not be
accepted.

	J.
	Any
supplier claims arising from an audit must be submitted to Cardinal's Vice President—Controller within 30 days of completing the audit. All claims must be
accompanied by specific supporting details of the transactions that comprise the claim. Cardinal shall then have 60 days to review the claim and advise the supplier of either acceptance or
disagreement. 

IV.    Related Matters  

	A.
	Cardinal
shall be entitled to cash discounts based on the gross invoice price of all goods purchased from the supplier, regardless of whether a chargeback is ultimately claimed by
Cardinal. 

36

 

	B.
	Supplier
shall provide Cardinal with a chargeback advance to cover credit exposure of unsecured credit granted to supplier by Cardinal for chargeback claims and to help effect the
carrying costs involved in the chargeback process, subject to the following terms and conditions:

	1.
	The
chargeback advance shall be not less than an amount equal to one month of chargeback billings based on an average of the most recent six months of billings.

	2.
	On
a quarterly basis, Cardinal will reconcile the amount of the advance against the six-month average billings. If the amount of the advance exceeds the
six-month average billings, then Cardinal shall include the amount of such excess in the next payment made to supplier. If the amount of the advance is less than the six-month
average, Cardinal will deduct the amount of such shortfall from the next payment for current purchases. 

	*
	The
term "Cardinal Health" shall include the following affiliated operating companies: Cardinal Health 110, Inc., formerly known as Whitmire Distribution Corporation, a Delaware
corporation (Folsom, California); Cardinal Health 106, Inc., formerly known as James W. Daly, Inc., a Massachusetts corporation (Peabody, Massachusetts); Cardinal Health
107, Inc., formerly known as National PharmPak Services, Inc., an Ohio corporation (Zanesville, Ohio); Cardinal Health 103, Inc., formerly known as Cardinal Southeast, Inc.
a Mississippi corporation (Richland, Mississippi); Cardinal Health 100, Inc., formerly known as Bindley Western Industries, Inc., an Indiana corporation (Indianapolis, Indiana); Cardinal
Distribution, L.P., an Ohio limited partnership (Dublin, Ohio); and any other subsidiary of Cardinal Health, Inc., an Ohio corporation ("CHI"), as may be designated by CHI, and The Cardinal
Trading Company. 

37

 
 
 

EXHIBIT D
  
    2007 FEE SCHEDULE    
    

	 
	 	 

	Fixed Monthly Charges	 	 	 
	Fixed Monthly Services	 	$	[***]
	 	Receiving, Put Away, and Storage	 	 	 
	 	Inventory Control	 	 	 
	 	Priority Healthcare "Inventory Tracker" Access and Licenses	 	 	 
	 	Quarantine Area Maintenance	 	 	 
	 	Quarantine Testing	 	 	 
	 	Warehousing	 	 	 
	 	Quality Audits	 	 	 
	 	Weekly Inventory	 	 	 
	 	Invoicing & Administration	 	 	 
	 	SAS-70 Audit Services	 	 	 
	Monthly Transaction Fees	 	 	 
	Monthly Trade Transaction Fee Per Order*	 	$	[***]
	 	Customer Service	 	 	 
	 	Order Receipt	 	 	 
	 	Order Entry	 	 	 
	 	Order Processing	 	 	 
	 	Pick, Packing, Staging, Verification, QA and Transport for Shipment	 	 	 
	 	Ordering Manifesting	 	 	 
	* Assumes an average of 1-9 lines per order, if average order exceeds 10 lines during any given month the transaction fee will be increased to $[***]
	Monthly Promo/Sample Transaction Fee Per Order*	 	$	[***]
	* < 25 Average Lines per Order
	Alternative Monthly Promo/Sample Transaction Fee Per Order*	 	$	[***]
	* > 25 Average Lines per Order	 	 	 
	Returns Processing Fee Per Return	 	$	[***]
	Product Receipt	 	 	 
	Product Inspection	 	 	 
	Product Disposition	 	 	 
	 	(Return to inventory, quarantine, return to manufacturer for disposal)	 	 	 
	Data Entry/Processing	 	 	 
	Accounts Receivable Management Monthly Fee (Invoiced Separately)	 	 	 
	Receipts Processing, Collections Management, Reporting Fee	 	$	[***]

EXHIBIT D-1

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

38

 
 
 

Exhibit D-1
  2008 (AND SUBSEQUENT YEARS) FEE SCHEDULE    
    

	 
	 	 

	Fixed Monthly Charges	 	 	 
	Fixed Monthly Services	 	$	[***]
	 	Receiving, Put Away, and Storage	 	 	 
	 	Inventory Control	 	 	 
	 	Priority Healthcare "Inventory Tracker" Access and Licenses	 	 	 
	 	Quarantine Area Maintenance	 	 	 
	 	Quarantine Testing	 	 	 
	 	Warehousing	 	 	 
	 	Quality Audits	 	 	 
	 	Weekly Inventory	 	 	 
	 	SAS-70 Audit Services	 	 	 
	Monthly Transaction Fees	 	 	 
	Monthly Trade Transaction Fee Per Order*	 	$	[***]
	 	Customer Service	 	 	 
	 	Order Receipt	 	 	 
	 	Order Entry	 	 	 
	 	Order Processing	 	 	 
	 	Pick, Packing, Staging, Verification, QA and Transport for Shipment	 	 	 
	 	Ordering Manifesting	 	 	 
	* Assumes an average of 1-9 lines per order, if average order exceeds 10 lines during any given month the transaction fee will be increased to $[***].
	Monthly Promo/Sample Transaction Fee Per Order*	 	$	[***]
	* < 25 Average Lines per Order
	Alternative Monthly Promo/Sample Transaction Fee Per Order*	 	$	[***]
	* > 25 Average Lines per Order	 	 	 
	Returns Processing Fee Per Return	 	$	[***]
	Product Receipt	 	 	 
	Product Inspection	 	 	 
	Product Disposition	 	 	 
	 	(Return to inventory, quarantine, return to manufacturer for disposal)	 	 	 
	Data Entry/Processing	 	 	 
	Accounts Receivable Management Monthly Fee (Invoiced Separately)	 	 	 
	Receipts Processing, Collections Management, Reporting Fee	 	$	[***]

	[***]
	Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

39

 
 
 

EXHIBIT E
  
    Curascript
  Hourly Fee Schedule for 3PL Business Unit    
    

	Function
 
	 	Hourly Bill Rate

	Programmers — Standard Developers	 	$[***]
	Programmers — SAP	 	$[***]
	Programmers — 3rd Party	 	TBD
	Project Management	 	$[***]
	Warehouse Labor — Standard Hours	 	$[***]
	Warehouse Labor — OT Hours	 	$[***]
	Accounts Receivable — Standard Hours	 	$[***]
	Accounts Receivable — OT Hours	 	$[***]
	Customer Support — Standard Hours	 	$[***]
	Customer Support — OT Hours	 	$[***]
	Audit Support per day fee	 	$[***]
	Compliance Support Services per day fee	 	$[***]

40

QuickLinks

AMENDED AND RESTATED DISTRIBUTION AGREEMENT TERMS AND CONDITIONS

Exhibits

EXHIBIT A OPERATING GUIDELINES Reliant / Priority Healthcare 3rd Party Logistics Services Operating Guidelines

EXHIBIT B KEY PERFORMANCE INDICATORS

EXHIBIT C CLIENT RETURN GOODS POLICY

Reliant Pharmaceuticals, Inc.

Return Goods Policy

RETURNS FROM DIRECT CUSTOMERS

Reliant Pharmaceuticals, Inc.

Return Goods Policy

NON-DIRECT CUSTOMERS

CARDINAL HEALTH STANDARD POLICY ON CHARGEBACKS

EXHIBIT D 2007 FEE SCHEDULE

Exhibit D-1 2008 (AND SUBSEQUENT YEARS) FEE SCHEDULE

EXHIBIT E Curascript Hourly Fee Schedule for 3PL Business UnitEXHIBIT 10.48

 

PACKAGING AGREEMENT

 

This Agreement dated this 30th day of
October, 2002, by and between Cardinal Health PTS, Inc., a Delaware corporation
(“Cardinal Health”), having its principal packaging services offices at 3001
Red Lion Road, Philadelphia, Pennsylvania and Reliant Pharmaceuticals, LLC, a
Delaware limited liability company (“Purchaser”), having its principal offices
at 110 Allen Road, Liberty Corner, New Jersey 07938.

 

BACKGROUND

 

A.            Cardinal Health specializes in
packaging and related services for the pharmaceutical industry and has certain
technical and commercial information and know-how relating thereto.

 

B.            Purchaser is a company engaged in
the business of developing and commercializing pharmaceutical products.

 

C.            Purchaser desires to engage Cardinal
Health to provide certain services to Purchaser in connection with the
packaging of certain of Purchaser’s pharmaceutical products.

 

TERMS

 

In
consideration of the mutual promises made by the parties hereto and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound, the parties hereto agree as
follows:

 

1.             DEFINITIONS

 

The following terms as used in this Agreement
shall have the meanings set forth in this Article unless the context clearly
indicates to the contrary:

 

(a)           “Affiliate(s)” shall mean any corporation, firm, partnership
or other entity which controls, is controlled by or is under common control
with a party. For purposes of this definition, “control” shall mean the
ownership of at least fifty percent (50%) of the voting share capital of such
entity or any other comparable equity or ownership interest.

 

(b)           “Agency” shall mean any federal, state or local governmental
regulatory authority involved in regulating any aspect of the development,
market approval, sale, distribution or use of the Product, Packaging or
Packaged Product.

 

(c)           “Applicable Laws” shall mean all laws, statutes, rules,
regulations, and ordinances of any federal, state or local governmental authority,
including without limitation cGMP and the regulations of any Agency.

 

 

(d)           “Anniversary Date” means the date that is twelve consecutive
months subsequent to the Effective Date and each subsequent twelve month
period.

 

(e)           “cGMP” shall mean all the laws, regulations and standards
relating to the manufacture of the Product and the Packaging, including but not
limited to, the FDA current Good Manufacturing Practices, as set forth in Title
21 of the United States Code of Federal Regulations.

 

(f)            “Contract Year” means the twelve consecutive months from the
original Anniversary Date and each subsequent twelve month period.

 

(g)           “Delivery Date” shall mean the date set forth in the
relevant Purchase Order on which Cardinal Health must supply Purchaser with
Packaged Products, accepted by Cardinal Health pursuant to Section 5(c).

 

(h)           “Effective Date” shall mean the date set forth on page 1 of
this Agreement.

 

(i)            “Facility” shall mean Cardinal Health’s facility at 3001 Red
Lion Road, Philadelphia, Pennsylvania.

 

(j)            “FDA” shall mean the United States Food and Drug
Administration, and any successor agency thereto.

 

(k)           “Force Majeure” shall mean any of the following events or
conditions, provided that such event or condition did not exist as of the date
of execution of this Agreement, was not reasonably foreseeable as of such date
and is not reasonably within the control of either party and prevents as a
whole or in material part, the performance by a party of its obligations
hereunder:  acts of state or governmental
action, orders, legislation, regulations, restrictions, priorities or
rationing, riots, disturbance, war (declared or undeclared), strikes, lockouts,
slowdowns, prolonged shortage of energy supplies, interruption of
transportation, embargo (inability to procure or shortage of supply materials,
equipment or production facilities), delay of subcontractors or vendors, fire,
earthquake, flood, hurricane, typhoon, explosion and accident.

 

(l)            “Package/Packaging” shall mean the packaging of the Product
pursuant to the Specifications.

 

(m)          “Packaged Product” shall mean the Product as contained in
the Packaging.

 

(n)           “Product(s)” shall mean the products of Purchaser to be
packaged which are described in the Specifications.

 

(o)           “Purchase Order” shall mean a written document issued by
Purchaser to Cardinal Health in accordance with Section 5 hereof, authorizing    Cardinal Health’s performance of Packaging
and other related services pursuant to the terms of this Agreement.

 

(p)           “Shipment Ready Date” has the meaning specified in Section
3(b).

 

2

 

(q)           “Specifications” shall mean the specifications for the
Packaging mutually agreed to by the parties and set forth in an attachment to
the Purchase Order. The Specifications may be amended or modified only upon the
written agreement of both parties.

 

2.             ENGAGEMENT OF CARDINAL
HEALTH

 

Cardinal
Health agrees to Package the Product and Purchaser agrees to purchase and pay
for the Packaging on the terms and conditions set forth in this Agreement.

 

3.             PAYMENT AND SHIPPING

 

(a)           Shipping.  Subject
to the following provisions, all Packaged Product will be delivered F.O.B. the
Facility. The common carrier shall be selected by Purchaser, and title and risk
of loss of the Packaged Product shall pass to Purchaser upon delivery by
Cardinal Health F.O.B. the Facility. Purchaser shall insure the Packaged
Product in transit.

 

(b)           Payment.
  Cardinal Health shall invoice Purchaser upon Cardinal Health’s
delivery of Packaging to the common carrier specified in Section 3(a) and
Purchaser shall make full payment to Cardinal Health except for amounts
disputed in good faith, at the address specified on the invoice, no later than
thirty (30) days from the date of such invoice; provided, however, that if
Purchaser has not notified Cardinal Health of the shipping instructions within
two business days of Purchaser’s receipt of Cardinal Health’s notice to
Purchaser that the Packaging subject to the applicable Purchase Order has been
completed and is ready to be delivered to a common carrier for delivery to
Purchaser in accordance with the terms of this Agreement (including Section 8)
(the “Shipment Ready Date”), then Cardinal Health may invoice Purchaser for
such Packaging as of the Shipment Ready Date. If Purchaser has not made payment
in full (except for amounts disputed in good faith) by the expiration of such
thirty (30) day period, Cardinal Health may, at its option elect to:  (i) charge a late payment fee on such unpaid
amount equal to one percent (1%) per month of such unpaid amount, (ii) suspend
any further deliveries hereunder until such amounts (except for amounts
disputed in good faith) are paid in full; or (iii) terminate this Agreement in
accordance with and subject to the requirements of Section 13(c)(ii). In the
event of such termination, the terms of Section 13(d) shall apply. In the event
that Purchaser has a good faith dispute over an amount invoiced by Cardinal
Health, Purchaser shall advise Cardinal Health in writing, within thirty (30)
days of the date of such invoice, which amounts are in dispute, a detailed
explanation of its reason for dispute, and copies of written documents in
support of its position, if applicable. If Purchaser does not provide Cardinal
Health with notice of a dispute within thirty (30) days of the date of the
invoice, the invoice will be deemed accepted as correct by Purchaser.

 

(c)           Advance
Payment.  If the Purchaser has not paid Cardinal Health for any
invoice within 90 days of the date of such invoice (except for any amounts
disputed by Purchaser in good faith) and Cardinal Health otherwise determines
in its sole discretion that Purchaser’s credit is impaired, Cardinal Health
shall have the right to require payment in advance before making any further
shipment of the Packaged Products. If Purchaser shall fail, within a reasonable
time, to make such payment in advance, or if Purchaser shall fail to make
payment when due, Cardinal Health shall have the right, at its option, to
suspend any further deliveries hereunder until such 

 

3

 

default
is corrected, without thereby releasing Purchaser from its obligations under
this Agreement.

 

(d)           Failure
to Take Delivery.  If Purchaser fails to take delivery on any
scheduled Delivery Date, Purchaser shall be billed at that time for all
Packaged Product the delivery of which Purchaser fails to take, and on the
first of each month thereafter for reasonable administration and storage costs
of such Packaged Product.

 

4.             PRICE

 

(a)           Fees.  Cardinal
Health shall specify in a written quote its fees for Packaging any particular
Product. If such quote is acceptable to Purchaser, then Purchaser shall issue
to Cardinal Health a Purchase Order for such Packaging and attach a copy of the
quote. The parties agree, however, that a new quote will not be required from
Cardinal Health nor attached by Purchaser to any subsequent Purchaser Order(s)
if such subsequent Purchase Order(s) are identical to a prior Purchase Order
that had a quote attached to it and had been accepted by Cardinal Health. Any
tax (other than Cardinal Health’s income or franchise taxes), however
denominated and measured, imposed upon the Product or upon its manufacture,
Packaging, production, storage, inventory, sale, distribution, transportation,
delivery, use or consumption shall be paid by Purchaser.

 

(b)           Adjustment.  The
fees and cost Cardinal Health charges for the services and products it provides
to Purchaser under this Agreement is subject to adjustment once per Contract
Year, effective on each Anniversary Date of this Agreement, upon thirty (30)
days written notice from Cardinal Health to Purchaser, provided, however, that
any such increase in labor charges shall not exceed [***] percent ([***]%). All
price increases for raw materials and components will be passed through to
Purchaser without any markup in addition to any mark up applied by Cardinal
Health to such raw materials or components immediately prior to any price
increase charged by the suppliers of such raw materials or components. Upon
request, Cardinal Health shall provide reasonable supporting documentation for
such increases.

 

5.             FORECAST, PURCHASE AND SUPPLY

 

(a)           Purchase
and Supply.  During the Term of this Agreement and subject to
subsections (d) and (e) of this Section 5, Purchaser shall purchase and
Cardinal Health shall supply such quantities of Packaged Product as shall be
set forth on Purchase Orders issued by Purchaser to Cardinal Health under this
Agreement.

 

(b)           Forecasts.  Within
ten (10) days after the Effective Date, and thereafter on the first day of each
calendar month during the term of this Agreement, Purchaser will provide
Cardinal Health with a written twelve (12) month rolling forecast (commencing
with the immediately following month) of the quantity of Product which
Purchaser expects to require from Cardinal Health during each of the next
twelve (12) months (“Forecast”). The first three (3) months of such rolling
forecast shall be firm and binding upon Purchaser and Cardinal Health (“Firm 

 

	
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4

 

Commitment”),
and the following nine (9) months shall constitute non-binding good faith
estimates. Purchaser’s first forecast shall include (i) the required Delivery
Date for the binding portion of the forecast, (ii) the quantity of Product to
be delivered and (iii) the lot numbers to be applied to such Product.

 

(c)           Purchase
Order.  Purchaser shall submit Purchase Orders for the Firm
Commitment portion of the Forecast at least sixty (60) days prior to the
requested delivery date. Within ten (10) days of receipt of a Purchase Order
for the Firm Commitment portion of the Forecast, Cardinal Health shall notify
Purchaser in writing of Cardinal Health’s acceptance of such Purchase Order as
a binding order (subject to the requirements of subsections (d) and (e) of
Section 5). Such notification shall, as applicable, also confirm the Delivery
Date or specify alternate Delivery Dates.

 

(d)           Orders
Greater than Forecast.  Cardinal Health shall use its
commercially reasonable efforts within its existing capacity to supply the
quantity of Packaged Product ordered as set forth on the relevant Purchase
Order, regardless of the quantity forecast by Purchaser, subject to the
capacity limitations of Cardinal Health’s Packaging equipment and the Facility;
provided, however, that in the event that the quantity specified in the
Purchase Order does not (i) (x) exceed by 30% the quantity forecast for the
applicable month by the Purchaser and (y) exceed in any event one million
bottles or blisters per month and (ii) Purchaser has notified Cardinal Health
not later than eight (8) weeks before the date Cardinal Health is to begin the
Packaging pursuant to such Purchase Order, then Cardinal Health shall, subject
to subsection (c) of this Section 5, supply the quantity of Packaged Product
ordered as specified in the relevant Purchase Order.

 

(e)           Amendment
of Purchase Orders.  Cardinal Health will use commercially
reasonable efforts to accommodate a request by Purchaser to amend a Purchase
Order to increase or decrease the quantity of Packaged Product to be delivered,
provided, however, that the foregoing shall not affect or diminish Purchaser’s
liability under the Firm Commitment portion of the Forecast, or to amend any
other provision of the Specifications. Notwithstanding anything in this
Agreement to the contrary, and subject to agreement on any pricing increase as
described below, Cardinal Health will agree to amend any particular Purchase
Order once to (i) increase the quantity of Packaged Product to be delivered if
(x) such amendment does not increase the quantity of Packaged Product by more
than 30% of the quantity of Packaged Product specified in the applicable
Purchase Order, (y) the maximum quantity of Packaged Product, after giving
effect to the amendment of such Purchase Order, does not in any event, exceed
one million bottles or blisters per month and (z) Purchaser has notified
Cardinal Health not later than eight (8) weeks before the date Cardinal Health
is to begin the Packaging pursuant to such Purchaser Order and (ii) to decrease
the quantity of Packaged Products to be delivered even with respect to the Firm
Commitment portion of the Forecast provided that the quantity of Packaged
Product under the amended Purchase Order shall be not less than 85% of the
quantity originally specified therein (such difference being the “Shortfall
Packaged Product”) and the Shortfall Packaged Product shall be added to
subsequent Purchase Orders issued by Purchaser within the Contract Year. In the
event such amendment would cause an increase in Cardinal Health’s cost of
performance of Packaging, Cardinal Health shall notify Purchaser of any pricing
increase that would be necessitated by Cardinal Health’s accommodation of such
request and, if Purchaser 

 

5

 

agrees
to such price increase, the prices set forth on the relevant Purchase Order
shall be increased to reflect such increased cost.

 

(f)            Cancellations.  Purchaser
may cancel any Purchase Order by providing Cardinal Health written notice at
least forty-five (45) days prior to the Delivery Date. In the event that
Purchaser cancels any Purchase Order, Purchaser shall reimburse Cardinal Health
for direct costs reasonably incurred by Cardinal Health in connection with
performance of such Purchase Order up to the time of receipt of such notice.

 

(g)           Terms
of Agreement Govern.  No modification or amendment to this
Agreement shall be effected by or result from the receipt, acceptance, signing
or acknowledgement of any party’s purchase orders, Cardinal Health quotations,
invoices, shipping documents or other business forms containing terms or
conditions in addition to or different from the terms and conditions set forth
in this Agreement, and the terms of this Agreement shall supersede any
provision in any Purchase Order, Specification or other document that is in
addition to or inconsistent with the terms of this Agreement.

 

(h)           Savings.  Not
earlier than 60 days and not later than 30 days prior to each Anniversary Date,
representatives of Cardinal Health and Purchaser shall meet at a mutually
convenient location or telephonically to discuss any actual or potential
operational efficiency or savings that Cardinal Health has identified in the
performance of its obligations under this Agreement during the Contract Year. Cardinal
Health and Purchaser shall discuss which, if any, of these operational
efficiencies or savings may be implemented in the upcoming year.

 

6.             COMPLIANCE WITH AGENCY
REGULATIONS

 

The parties
agree to comply in all material respects with all Applicable Laws. Cardinal
Health shall be responsible for all the necessary permits and licenses for
Packaging of the Product; provided, however, that Purchaser shall
have sole responsibility for obtaining and maintaining all registrations,
permits, licenses and authorizations from all Agencies necessary or required
for the sale, distribution, shipping, Packaging with respect to any
requirements therefor specified in the New Drug Application applicable to the
Product (such as materials to be used in the Packaging), marketing, testing,
research, use or entering into commerce of any Product or Packaged Product.

 

7.             FACILITY

 

(a)           Packaging.  Cardinal
Health hereby agrees to perform the Packaging of the Product(s) at its Facility
and shall not Package the Product(s) at any other location without the prior
written consent of Purchaser.

 

(b)           Compliance
with Laws.  Cardinal Health shall comply, in all material
respects (except as provided in the subsequent sentence), with all Applicable
Laws relating to the services to be provided by Cardinal Health under this
Agreement. Without limiting the foregoing, Cardinal Health’s operation of the
Facility (and any other facility to which Purchaser may consent pursuant to
Section 7(a)) and Cardinal Health’s Packaging of the Product(s) shall (i) comply
in all respects with the Food Drug and Cosmetic Act of 1939, as amended from
time to time, and all rules and regulations of the FDA, including, without
limitation, cGMP and (ii) 

 

6

 

comply
in all material respects with all other Applicable Laws; provided, however,
that Purchaser shall have sole responsibility for obtaining and maintaining all
registrations, permits, licenses and authorizations from all Agencies necessary
or required for the sale, distribution, shipping, Packaging with respect to any
requirements therefor specified in the New Drug Application applicable to the
Product (such as materials to be used in the Packaging), marketing, testing,
research, use or entering into commerce of any Product or Packaged Product.

 

(c)           Agency
Inspection.  Cardinal Health hereby agrees to advise Purchaser
promptly; but not later than two business days, of any proposed or, scheduled
or unannounced inspection of the Product(s), Packaged Products or Packaging
process or procedures by any Agency and will, to the extent practicable, permit
Purchaser to be present during any such inspection. If Purchaser is not present
during such an inspection, Cardinal Health shall promptly provide a report of
the results of the inspection to Purchaser.

 

(d)           Purchaser
Technical Representative.  During the term of this Agreement,
Purchaser shall have the right to have one or more technical representatives
present in the area of the Facility where the Packaging is being conducted
during the Packaging process to (i) review the Packaging process; (ii) review
any relevant records in connection with such Packaging process and assess its
compliance with cGMP and the Specifications; and (iii) discuss any related
issues with Cardinal Health’s management personnel. Purchaser’s technical
representatives, when on-site (including during any inspection conducted
pursuant to Section 7(c)), shall comply with Cardinal Health’s rules and
regulations. Purchaser shall indemnify and hold Cardinal Health and its
Affiliates harmless from all liability in accordance with the procedure set
forth in Section 15(c), including claims for workers’ compensation, resulting
from the presence of Purchaser’s technical representatives at the Facility,
except for liability resulting from the gross negligence or intentional
malfeasance of Cardinal Health, which liability Cardinal Health shall indemnify
and hold Purchaser and its Affiliates harmless from in accordance with the
procedure set forth in Section 15(c).

 

(e)           Audit.  Purchaser
shall have the right during normal business hours, and upon reasonable notice
to Cardinal Health, to inspect and audit in a reasonable manner those portions
of the Facility in which Packaging is conducted in order to ensure Cardinal
Health’s compliance with its obligations under this Agreement.

 

(f)            Product
Information.  Purchaser, at its expense, shall furnish Cardinal
Health with all available relevant health, safety and environmental information
concerning the Product to be Packaged by Cardinal Health hereunder, including
without limitation, material safety data sheets.

 

(g)           Product
Loss.  Cardinal Health shall use commercially reasonable efforts
to minimize waste and loss of the Product in the Packaging thereof, subject to
normal manufacturing losses (inclusive of all losses resulting from sampling,
testing and compliance with quality control requirements of Applicable Laws) of
up to five percent (5%) on an average annual basis of all Product delivered to
Cardinal Health. This percentage shall be reviewed six months from the
Effective Date and upon mutual agreement of the parties shall be revised and
documented in writing. Purchaser acknowledges that such range is acceptable for
purposes of Cardinal Health’s performance of its obligations under this
Agreement. Cardinal Health shall reimburse Purchaser for any loss of Product in
excess of the foregoing amount in an amount 

 

7

 

equal
to Purchaser’s direct actual cost for making such replacement Product. Purchaser
will notify Cardinal Health of such costs in the form of a certificate signed
by the Purchaser’s Controller and a copy of the invoice of the manufacturer of
such Product if the manufacturer is an independent third party. Purchaser
acknowledges and agrees that Cardinal Health will not be responsible for
reimbursing Purchaser for any Product loss that arises from a discrepancy in
the amount of Product that Purchaser claims was delivered by or on Purchaser’s
behalf to Cardinal Health, as specified in Purchaser’s or its manufacturer’s
applicable records, and the amount of Product that Cardinal Health can
demonstrate it actually received, as evidenced by the batch records Cardinal
Health maintains for Product reconciliation.

 

8.             QUALITY OF PACKAGING

 

(a)           Sampling
and Testing of Packaged Products.  Cardinal Health is responsible
in all cases for sending Purchaser batch records and samples for Purchaser’s
review. Purchaser is responsible for all sampling and testing of the Packaged
Products to assure that the Packaging and the Packaged Products are in
conformity in all material respects with the Specifications set forth in the
Purchase Order. Prior to delivering any shipment of Packaged Products, Cardinal
Health shall provide Purchaser in all cases with a certificate of conformance
and, additionally, in cases where Cardinal Health has performed any analytical
testing of the Packaged Product, a certificate of analysis, in each case
certifying that the Packaging and Packaged Products conform in all material respects
to the Specifications. Purchaser, upon receipt of Packaged Products from
Cardinal Health, shall have ten (10) business days or, in the case of defects
not readily discernible without opening the Packaging or any components
thereof, until the earlier of (i) thirty (30) days after Purchaser becomes
aware of such defects or (ii) ninety (90) days after Purchaser receives such
Packaged Products to inspect and reject such Packaged Products. Any Packaged
Product that is not rejected by Purchaser within period set forth in the
immediately preceding sentence shall be deemed to have been accepted by
Purchaser. In the event Packaged Products do not conform in all material
respects to the Specifications set forth in the relevant Purchase Order,
Purchaser shall send to Cardinal Health via overnight delivery service or
certified mail, return receipt requested, within three (3) days of discovery of
the defect, a notice of rejection along with samples of the rejected Packaged
Products. Packaged Products that Cardinal Health agrees are defective or
non-conforming will be repackaged by Cardinal Health in accordance with Section
8(b). If Cardinal Health does not agree with Purchaser’s determination that the
Packaging or Packaged Products fail to meet the Specifications in all material
respects, the rejected Packaged Products shall be submitted to a mutually
acceptable third party testing laboratory (which, unless otherwise agreed by
the parties, shall be Lancaster Laboratories), which shall determine whether
such Products conform in all material respects to the Specifications. The
parties agree that such testing laboratory’s determination shall be final. Cardinal
Health shall be responsible for the fees of such third party testing laboratory
if such testing laboratory determines that the Packaging or Packaged Products
fail to meet the Specifications in all material respects and Purchaser shall be
responsible for such fees if such third party testing laboratory determines
that the Packaging and Packaged Products meet the Specifications in all
material respects.

 

(b)           Replacement
of Defective Packaged Products.  Subject to subsection (a),
Cardinal Health shall replace, at its sole expense, all defective or
non-conforming Packaging in excess of normal manufacturing losses for the
Product, as defined in Section 7(g). In the event Cardinal 

 

8

 

Health
is required to replace defective or nonconforming Packaging pursuant to this
Section 8, Cardinal Health shall replace, at its cost, all defective or
nonconforming Packaged Product with conforming Packaged Product. In such event,
Cardinal Health shall supply, at its cost, the Packaging components necessary
to Package replacement Product and Purchaser shall supply to Cardinal Health,
at Purchaser’s expense, the Product necessary to Package the replacement
Product. Notwithstanding the foregoing, if the Product is adulterated or
impaired solely as a result of Cardinal Health’s failure to comply with
Specifications, the applicable certificate of analysis or any Applicable Law,
then Cardinal Health shall be responsible for the cost of the adulterated or
impaired Product necessary for the replacement of Packaging as set forth above,
provided, however, that Cardinal Health’s responsibility shall be limited to
Seventy Five Thousand Dollars ($75,000) per Purchase Order and One Hundred
Fifty Thousand Dollars ($150,000) in the aggregate in any month and that the
cost of the Product and documentation thereof shall be the same as set forth in
Section 7(g), Product Loss. THE OBLIGATION OF CARDINAL HEALTH TO REPLACE
DEFECTIVE OR NONCONFORMING PACKAGING OR PACKAGED PRODUCT SHALL BE PURCHASER’S
EXCLUSIVE REMEDY UNDER THIS AGREEMENT AND IS IN LIEU OF ANY OTHER WARRANTY,
EXPRESS OR IMPLIED. In complying with this Section 8, Cardinal Health shall not
be required to incur any costs or expenses in excess of the Packaging fees paid
by Purchaser to Cardinal Health for the Packaging of the defective Product.

 

9.             LIMITED WARRANTY

 

Cardinal
Health warrants that the Packaging provided hereunder shall comply in all
respects with the Food Drug and Cosmetic Act of 1939, as amended from time to
time, and all rules and regulations of the FDA, including without limitation
cGMP and in all material respects with the Specifications and all other
Applicable Laws. THE LIMITED WARRANTY SET FORTH IN THIS SECTION 9 IS IN LIEU OF
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY AND ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT
FOR THE WARRANTIES EXPRESSED IN THIS SECTION 9, CARDINAL HEALTH MAKES NO OTHER
WARRANTY, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PACKAGING OF THE
PACKAGED PRODUCTS.

 

10.           GENERAL REPRESENTATIONS AND
WARRANTIES

 

(a)           Existence
and Power.  Each Party hereby represents and warrants to the
other Party that such Party (i) is duly organized, validly existing and in good
standing under the laws of the state in which it is organized, (ii) has the
power and authority and the legal right to own and operate its property and assets,
and to carry on its business as it is now being conducted, and (iii) is in
compliance with all requirements of Applicable Laws, except to the extent that
any noncompliance would not materially adversely affect such party’s ability to
perform its obligations under the Agreement.

 

(b)           Authorization
and Enforcement of Obligations.  Each Party hereby represents and
warrants to the other Party that such Party (i) has the power and authority and
the legal right to enter into the Agreement and to perform its obligations
hereunder and (ii) has taken all necessary action on its part to authorize the
execution and delivery of the Agreement and the performance 

 

9

 

of
its obligations hereunder. The Agreement has been duly executed and delivered
on behalf of such Party, and constitutes a legal, valid, binding obligation,
enforceable against such Party in accordance with its terms.

 

(c)           No
Consents.  Each Party hereby represents and warrants to the other
Party that all necessary consents, approvals and authorizations of all Agencies
and other persons required to be obtained by such Party in connection with the
Agreement have been obtained.

 

(d)           No
Conflict.  Each Party hereby represents and warrants to the other
Party that the execution and delivery of the Agreement and the performance of
such party’s obligations hereunder and there under (i) do not conflict with or
violate any requirement of Applicable Laws or any material contractual
obligation of such Party and (ii) do not materially conflict with, or
constitute a material default or require any consent under, any material
contractual obligation of such Party.

 

(e)           Legal
Authority For Sale of Product.  Purchaser has (or will have,
prior to selling any Packaged Product) obtained all permits, licenses or
authorizations from any applicable Agency necessary or required for the sale,
marketing or entering into commerce of any Product.

 

(f)            No
Debarment.  Cardinal Health represents and warrants that it is
not debarred and that Cardinal Health has not and will not use in any capacity
in connection with the providing of Services the services of any individual or
person debarred by the FDA under the provisions of the Generic Drug Enforcement
Act of 1992, as amended, or any other Applicable Laws. If at any time this
warranty is no longer accurate or Cardinal Health receives any notice of
debarment from the FDA that relates to this warranty, Cardinal Health shall
immediately notify Purchaser of such changed circumstances. The attached
Exhibit A, FDA Declaration, reflects the current standing of the Facility
concerning cGMP compliance.

 

11.           INTELLECTUAL PROPERTY.

 

(a)           Purchaser
Representation and License Grant.  Purchaser represents and
warrants to Cardinal Health that Purchaser has all necessary authority and
right, title and interest in and to any patents, inventions and developments
related to the Products and the manufacturing and Packaging of the Products,
and Purchaser hereby grants to Cardinal Health a non-exclusive, royalty-free,
limited license to use any and all of such right, title and interest as may be
necessary for Cardinal Health to perform its obligations under this Agreement.

 

(b)           Infringement.  Purchaser
represents and warrants to Cardinal Health that the work to be performed by
Cardinal Health under this Agreement will not violate or infringe upon any
trademark, tradename, copyright, patent or other rights held by any person or
entity.

 

(c)           Cardinal
Health Representation.  Cardinal Health represents and warrants
to Purchaser that Cardinal Health has all necessary authority, right, title and
interest in any patents, inventions and developments related to Cardinal Health’s
processes for Packaging the Products and the services provided by Cardinal
Health under this Agreement; provided, however, that the foregoing
representation and warranty shall not apply to any processes for Packaging the
Products specified or provided by or on behalf of the Purchaser.

 

10

 

(d)           Trademarks.  Each
Party acknowledges the validity of the title of the other Party to any and all
trademarks that may be used in conjunction with such other party’s performance
of its obligations hereunder. No right, title or interest in and to such
trademarks is granted by this Agreement, and each party agrees not to use the
other party’s trademarks other than in conjunction with such party’s
performance of its obligations hereunder.

 

(e)           Inventions.

 

(i)                                     If Cardinal Health or its agents or
employees make any invention, improvement or modification (whether or not
patentable) to the Product(s) or the use thereof (exclusive of packaging) in
the course of providing services under this Agreement, Cardinal Health shall
promptly disclose such invention, improvement or modification to Purchaser and
assign and/or cause its agents or employees to assign all rights, title and
interest in such invention, improvement or modification to Purchaser. Cardinal
Health shall execute such further documents and take such further actions as
are reasonable or necessary to fully vest in Purchaser such rights, title and
interest. Cardinal Health acknowledges and agrees that nothing in this Section
11(e)(i) shall limit in any way Purchaser’s rights to use, transfer or enjoy in
any way any such invention.

 

(ii)                                  If Purchaser or its agents or
employees make any inventions, improvements or modifications (whether or not
patentable) concerning the processes for the Packaging or the design or
modification of the Packaging of the Product in the course of the business
relationship under this Agreement, Purchaser shall promptly disclose such
invention, improvement or modification to Cardinal Health and assign and/or
cause its agents or employees to assign all rights, title and interest in such
invention, improvement or modification to Cardinal Health. Purchaser shall
execute such further documents and take such further actions as are reasonable
or necessary to fully vest in Cardinal Health such rights, title and interest. Purchaser
acknowledges and agrees that nothing in this Section 11(e)(ii) shall limit in
any way Cardinal Health’s rights to use, transfer or enjoy in any way such
invention.

 

12.           CONFIDENTIALITY

 

(a)           Confidentiality.  Cardinal
Health and Purchaser agree to keep secret and confidential any and all
information of the other party (“Confidential Information”) disclosed by the
other party hereunder or through any prior disclosure and not to disclose such
Confidential Information to any person or entity, except (i) to employees of
each party having a need to know the information in order to fulfill such party’s
obligations hereunder; or (ii) as required by an applicable Agency. The parties
shall use the Confidential Information solely for the purpose of carrying out
the obligations contained in the Agreement. The obligations imposed by this
Section shall not apply to any Confidential Information:

 

(i)                                     which at the time of disclosure is
in the public domain;

 

11

 

(ii)                                  which, after disclosure, becomes
part of the public domain by publication or otherwise, through no fault of the
receiving party;

 

(iii)                               which at the time of disclosure is
already in the receiving party’s possession, except through prior disclosure by
the disclosing party or its Affiliates, and such possession can be properly
documented by the receiving party in its written records, and was not made
available to the receiving party by any person or party owing an obligation of
confidentiality to the disclosing party;

 

(iv)                              which is rightfully made available
to the receiving party from sources independent of the disclosing party;

 

(v)                                 which is required to be disclosed in
the course of litigation or other legal or administrative proceedings; provided
that in all such cases the party receiving the Confidential Information shall,
to the extent permitted, give the other party prompt notice of the pending
disclosure and shall cooperate in such other party’s attempts, at such other
party’s sole expense, to seek an order maintaining the confidentiality of the
Confidential Information; or

 

(vi)                              which is required to be disclosed by
Applicable Laws; provided  that in all such cases the party
receiving the Confidential Information shall, to the extent permitted, give the
other party prompt notice of the pending disclosure and shall cooperate in such
other party’s attempts, at such other party’s sole expense, to seek an order
maintaining the confidentiality of the Confidential Information.

 

(b)           Term.  The
obligation of confidentiality and nonuse set forth in this Section 12 shall
survive for a period of ten (10) years beyond the termination or expiration of
this Agreement.

 

(c)           Ownership
of Confidential Information.  Confidential Information shall
remain the exclusive property of the disclosing party. In no event shall any of
either party’s Confidential Information, technology, know-how, intellectual
property (or rights thereto) become the property of the other party.

 

(d)           Purchaser
shall not release to any third party any non-public information with respect to
the terms of this Agreement without the prior written consent of Cardinal
Health with the exception of disclosure to a third party and/or the third party’s
advisors in connection with an investment in Purchaser, acquisition of or
merger with Purchaser, loan to Purchaser, licensing transaction related to a
pharmaceutical compound or other commercial agreement related to the sale,
marketing or distribution of a pharmaceutical compound, provided that Purchaser
requires said third party to enter into a confidentiality agreement on terms no
less restrictive than those contained herein, that Purchaser also remains
responsible for any disclosure by said third party, and that no disclosure will
be made in any event to any parties that are competitors of Cardinal Health.

 

12

 

13.           TERM AND TERMINATION

 

(a)           Term.  The
term of this Agreement, unless sooner terminated as provided below, shall begin
on the Effective Date and shall continue to the third anniversary of the
Effective Date. The Agreement may be renewed thereafter upon the mutual written
agreement of the parties.

 

(b)           Termination
Upon Notice.  Either party may terminate this Agreement at any
time upon one hundred eighty ( 180) days prior written notice to the other
party.

 

(c)           Immediate
Termination.  Either party shall have the right to immediately
terminate this Agreement if (i) the other party files a petition in bankruptcy,
or enters into an agreement with its creditors, or applies for or consents to
the appointment of a receiver or trustee, or makes an assignment for the
benefit of creditors, or suffers or permits the entry of an order adjudicating
it to be bankrupt or insolvent and such order is not discharged within thirty
(30) days; (ii) if either party materially breaches any of the provisions of
this Agreement, and such breach is not cured within thirty (30) days after the
giving of written notice, the party claiming the breach shall have the right to
terminate this Agreement; or (iii) if any required license, permit or
certificate required of the other party is not approved and/or issued, or is
revoked, by any applicable Agency; provided that such other party may no longer
appeal such decision or reapply or otherwise pursue such permit, license or
certificate. Material breach shall include, without limitation, breach of the
representation contained in section 10(f).

 

(d)           Duties
Upon Termination.  In the event of any termination, other than a
termination by either party as a result of a material breach by the other, Cardinal
Health shall complete delivery of any Packaged Product in accordance with any
Purchase Order open as of the date notice of termination is given hereunder. In
the event of any termination, Cardinal Health shall promptly, after completion
of any deliveries required by the immediately preceding sentence, return (i)
any remaining inventory of materials received from Purchaser or Purchaser’s
suppliers, (ii) all packaging components paid for by Purchaser, (iii) all
remaining inventories of the Product; and (iv) any other Product or material
being stored for Purchaser, to Purchaser at Purchaser’s expense. Cardinal
Health shall have no obligation to return the foregoing until all outstanding
invoices sent by Cardinal Health to Purchaser have been paid in full. Purchaser
shall also be required to pay, at the applicable price set forth in the
relevant Purchase Order for completed but not yet shipped Packaged Products,
Packaged Products in process and Packaged Products shipped but not yet invoiced.
In the event Purchaser breaches or terminates this Agreement or any Purchase
Order (other than as a result of a breach by Cardinal Health), Purchaser will
also be required to pay Cardinal Health for its direct cost of all materials
purchased by Cardinal Health for Packaging required under the Firm Commitment
and, if greater, in addition under any Purchase Orders accepted by Cardinal
Health that have not been used for Packaged Products delivered to Purchaser,
and Purchaser shall also pay an administrative fee of fifteen percent (15%) of
such amount in the event Purchaser breaches this Agreement. Purchaser shall
specify the location in the continental United States to which delivery, at
Purchaser’s expense, of the foregoing is to be made. Confidential Information
exchanged between Purchaser and Cardinal Health shall be promptly returned upon
termination of the Agreement.

 

(e)           Continuing
Obligations.   The rights and obligations of each of the parties
hereto under any provision of this Agreement, which, by its terms, is intended
to survive beyond the 

 

13

 

term
of this Agreement, shall continue notwithstanding the expiration or termination
of this Agreement for any reason.

 

14.           FORCE MAJEURE

 

If Cardinal
Health shall be delayed in making any delivery in whole or in part, by reason
of Force Majeure, such delay shall be excused during the continuance of and to
the extent of such Force Majeure; provided that if, as a consequence of any
such Force Majeure, the total demands for Cardinal Health’s products or
services cannot be supplied by Cardinal Health, Cardinal Health may, at its
option, allocate its available supply among Purchaser and its other customers
on such basis as Cardinal Health may deem fair and practicable, without liability
for any failure to perform this Agreement. Cardinal Health shall promptly
notify Purchaser of the termination of such event. Delivery shall be made and
taken as soon as reasonably possible after the removal of such cause, and the
time for performance of this Agreement shall be extended for a period equal to
the duration of such cause, provided that if such delay exceeds four (4)
months, either party may terminate this Agreement, subject to the duties set
forth in Section 13(d).

 

15.           INDEMNIFICATION

 

(a)           Indemnification
by Purchaser.  Purchaser agrees to indemnify and hold Cardinal
Health and its Affiliates, and their respective agents, employees, officers,
directors and representatives harmless from and against any and all costs,
expenses, liabilities, claims, damages, demands, actions, losses and fees,
including attorneys’ fees and costs, arising from third party claims the result
of (i) Purchaser’s sale, testing, shipping, sale, distribution, possession,
use, marketing or entering into commerce of any Product or Packaged Product,
except to the extent the result of Cardinal Health’s breach of this Agreement
or Cardinal Health’s gross negligence or willful misconduct, (ii) Purchaser’s
gross negligence or willful misconduct, (iii) Purchaser’s breach of this
Agreement, including, without limitation, any representations or warranties
under this Agreement, or (iv) any claim of infringement or alleged infringement
of any third party rights in respect of any Product or Packaged Product.

 

(b)           Indemnification
by Cardinal Health.  Cardinal Health agrees to indemnify and hold
Purchaser and its Affiliates, and their respective agents, employees, officers,
directors and representatives harmless from and against any and all cost,
expenses, liabilities, claims, damages, demands, actions, losses and fees,
including attorneys’ fees and costs, arising from third party claims (i) the
result of Cardinal Health’s breach of this Agreement (including without
limitation any breach of its representations under this Agreement), (ii)
Cardinal Health’s gross negligence or willful misconduct, or (iii) any claim of
infringement or alleged infringement of any third party rights in respect of
any Packaging.

 

(c)           Procedure
for Indemnification.  Upon receiving notice of any claim for
liability under this provision, the indemnified party shall promptly notify the
indemnifying party in writing; provided, however, that failure to give notice
shall not limit or otherwise reduce the indemnity provided for in this
Agreement except to the extent that the indemnifying party is prejudiced
thereby. The indemnifying party may, in its sole discretion, assume and conduct
the legal defense of the indemnified party in, and the settlement of, any suit
that could result in claims under this provision; provided, however,
that the indemnifying party will not, in defense 

 

14

 

of
any such lawsuit, except with the consent of the indemnified party, consent to
the entry of any judgment or enter into any settlement which does not include,
as an unconditional term thereof, the giving by the claimant or plaintiff to
the indemnified party of a release from all liability in respect thereof. If
the indemnifying party assumes the defense and settlement of a suit, the
indemnified party may elect to participate in, but not control, such defense
and settlement through counsel of its choosing and at its own expense. The
indemnification obligations under this Section 15 with respect to any suit are
contingent upon the indemnified party’s reasonable cooperation with the
indemnifying party, as reasonably requested by the indemnifying party, in the
defense and settlement of such suit.

 

16.           INSURANCE

 

(a)           During
the Term, Cardinal Health will obtain and maintain comprehensive general liability
insurance (including broad form general liability, completed operations and
product liability, personal injury liability, blanket contractual liability and
broad form property damage liability) with limits of not less than Five Million
Dollars ($5,000,000) combined single limit for bodily injury and property
damage liability per occurrence and annual aggregate. During the Term, Cardinal
Health will obtain and maintain worker’s compensation insurance as required
under applicable law and employer’s liability insurance with a limit of not
less than One Million Dollars ($1,000,000). With respect to all insurance
coverage required under this Section 17(a):

 

(i)                                     Cardinal Health will furnish
Purchaser with certificates of insurance evidencing at least the required
coverage as soon as practicable after the Effective Date and each anniversary
of the Effective Date during the Term); and

 

(ii)                                  Cardinal Health will endeavor to
have such policy include provisions for at least thirty (30) business days
prior written notice of any materials change or cancellation (whether for
non-payment or otherwise).

 

(b)           Purchaser.  During
the Term, Purchaser will obtain and maintain comprehensive general liability
insurance (including broad form general liability, completed operations and
products liability, personal injury liability, blanket contractual liability
and broad form property damage liability) with limits of not less than Ten
Million Dollars ($10,000,000) combined single limit for bodily injury and
property damage liability per occurrence and annual aggregate, containing a
cross liability or severability of interests clause. During the Term, Purchaser
will obtain and maintain worker’s compensation insurance as required under
applicable law and employer’s liability insurance with a limit of not less than
One Million Dollars ($1,000,000). With respect to such insurance coverage
required under this Section 17(b):

 

(i)                                     Purchaser will furnish Cardinal
Health with certificates of insurance evidencing at least the required coverage
as soon as practicable after the Effective Date and each anniversary of the
Effective Date during the Term; and

 

15

 

(ii)                                  Purchaser will endeavor to have such
policy include provisions for at least thirty (30) business days prior written
notice of any materials change or cancellation (whether for non-payment or
otherwise);

 

(iii)                               the comprehensive general liability
policy shall name Cardinal Health as an additional insured and this provision
shall be evidenced on the above referenced certificate of insurance being
provided to Cardinal Health.

 

17.           NOTICES

 

Notices or other communications required or
permitted by this Agreement shall be given in writing, and shall be deemed to
have been given three days after being deposited in the United States mail,
return receipt requested and postage prepaid, or on the day following delivery
of such notice to a major overnight delivery service. All notices shall be
addressed to the parties as follows:

 

To Cardinal
Health:

Cardinal Health PTS, Inc.

Packaging Group

3001 Red Lion Road

Philadelphia, PA 19114

Attn:  President

with a copy to:

Cardinal Health, Inc.

7000 Cardinal Place

Dublin, OH 43017

Attn:  General Counsel, Cardinal Health
Pharmaceutical

Technologies and Services

To Purchaser:

Reliant Pharmaceuticals, LLC

110 Allen Road

Liberty Corner, New Jersey 07938

Attn:  Director of Manufacturing and
Distribution

with a copy to:

Reliant Pharmaceuticals, LLC

110 Allen Road

Liberty Corner, New Jersey 07938

Attn:  General Counsel

 

16

 

18.           CHOICE OF LAW

 

The laws of
the Commonwealth of Pennsylvania applicable to contracts made and to be
performed in the Commonwealth of Pennsylvania shall govern any dispute arising
out of or under this Agreement.

 

19.           ASSIGNMENT

 

This Agreement
is not assignable by either party except with the written consent of the other
party; provided that either party may assign this Agreement without such
consent to any Affiliate of the assigning party or in connection with the sale
or transfer of all or substantially all of the business or assets of the
assigning party relating to the subject matter of this Agreement.

 

20.           LIMITATION OF LIABILITY

 

(a)           IN
NO EVENT SHALL CARDINAL HEALTH’S TOTAL LIABILITY UNDER THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION ANY OF CARDINAL HEALTH’S INDEMNITY OR OTHER
FINANCIAL OBLIGATIONS UNDER SECTION 15 OR ANY OTHER PROVISION OF THIS
AGREEMENT, EXCEED ONE MILLION DOLLARS ($1,000,000) EXCEPT FOR LIABILITY,
CLAIMS, DEMANDS, ACTIONS, LOSS, COST, EXPENSE OR FEE ARISING FROM THIRD PARTY
CLAIMS FOR INJURY SOLELY CAUSED BY CARDINAL HEALTH’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.

 

(b)           IN
NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL LOSSES, DAMAGES, COSTS OR EXPENSES OF ANY NATURE WHATSOEVER,
INCLUDING WITHOUT LIMITATION, LOSS OF REVENUES, PROFITS, DATA OR USE, WHETHER
IN CONTRACT OR TORT OR BASED ON A WARRANTY, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

21.           ARBITRATION

 

If a claim,
dispute, controversy or disagreement (“Dispute”) arises between the parties in
connection with this Agreement, then the Dispute shall be presented to the
respective presidents of Cardinal Health and Purchaser for their consideration
and resolution. If the presidents cannot reach a resolution of the Dispute,
then such Dispute shall be resolved exclusively by submission to final, binding
and non-appealable arbitration (“Arbitration”). The Arbitration and all
pre-hearing, hearing and post-hearing arbitration procedures, including those
for disclosure and challenge, shall be conducted in accordance with the
Commercial Arbitration Rules (the “Commercial Rules”) of the American
Arbitration Association (the “Association”) in Philadelphia, Pennsylvania. The
substantive law of the Commonwealth of Pennsylvania shall be applied by the
arbitrator to the resolution of the Dispute, provided that the arbitrator shall
base his or her decision on the express terms, covenants and conditions of this
Agreement. The arbitrator shall be bound to make specific findings of fact and
reach conclusions of law, based on the submissions and evidence of the parties,
and shall issue a written decision explaining the basis for the decision and
award. The decision of the arbitrator shall be final and as an “award” within
the meaning of the Commercial Rules and judgment upon the arbitration award may
be 

 

17

 

entered in any court having jurisdiction, as if it were a judgment of
that court. Notwithstanding anything in this Section 21 to the contrary, the
parties shall be entitled to seek at any time during a Dispute injunctive
relief or other equitable remedies with respect to any Dispute from any court
of competent jurisdiction.

 

22.           RELATIONSHIP OF THE PARTIES

 

Nothing
contained in this Agreement shall create a joint venture or partnership between
the parties. Cardinal Health shall be an independent contractor in performing
its obligations. Neither party shall be liable for any of the debts or
obligations of the other and neither party shall have any authority or right to
act for or incur any liability of any kind, express or implied, on the name of
or on behalf of the other party.

 

23.           PUBLICITY

 

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.

 

24.           MISCELLANEOUS

 

(a)           Entire
Agreement.  This Agreement and all Purchase Orders, Purchase
Order notifications, Cardinal Health quotations, and Specifications issued
pursuant to this Agreement, constitute the entire agreement between the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, and there are no warranties, representations or other agreements between
the parties except as specifically set forth herein.

 

(b)           Counterparts,
Signatures by Facsimile.  This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be one and the same
Agreement. Any facsimile signature of any party hereto shall constitute a
legal, valid and binding execution hereof by such party.

 

(c)           Titles.  The
headings appearing at the beginning of the numbered Articles and at the
beginning of paragraphs have been inserted for convenience only and do not
constitute any part of this Agreement.

 

(d)           Modifications.  No
changes, modifications or waivers of any provision of this Agreement shall be
binding unless in writing and signed by a duly authorized representative of
each party.

 

(e)           Severability.  In
the event that any provision of this Agreement shall be determined to be
illegal or unenforceable, that provision will be limited or eliminated to the 

 

18

 

minimum
extent necessary so that this Agreement shall otherwise remain in full force
and effect and enforceable.

 

(f)            Waiver.  The
failure on the part of any party to exercise or enforce any rights conferred
upon it hereunder shall not be deemed to be a waiver of any such rights nor
operate to bar the exercise or enforcement thereof at any time or times
thereafter.

 

(g)           No
Strict Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

 

IN WITNESS
WHEREOF, Purchaser and Cardinal Health have executed
this Agreement on the date first set forth above.

 

 

	
  Reliant Pharmaceuticals, LLC

  	
   

  	
  Cardinal Health PTS, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
  Title:

  	
   

  	
  Title:

  

 

19

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