EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement (the “
Agreement
”) is made as of this 6
th
day of August,
2015 (the “
Effective Date
”), between SCILEX Pharmaceuticals, Inc., a Delaware corporation
with an address of 101 Lindenwood Drive, Suite 225, Malvern, PA 19355 (“
Client
”), and
Cardinal Health 105, Inc., an Ohio corporation, with a place of business at 15 Ingram
Boulevard, Suite 100, LaVergne, Tennessee, 37086 (“
Cardinal Health
”) each individually a
(“
Party
”) and collectively (the “
Parties
”).
RECITALS
A.Client is, among other things, in the business of developing and marketing
pharmaceutical products in the United States, its territories, possessions and commonwealths
(“
Territory
”).
B.Cardinal Health 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 its distribution capabilities.
C.Client desires to engage Cardinal Health as its exclusive third party logistics
distribution agent for commercial sales of those pharmaceutical Products manufactured and/or
marketed by Client and set forth on
Exhibit A
(collectively, “
Product
”), and to perform certain
other services described in this Agreement, all upon the terms and conditions set forth in this
Agreement.
THEREFORE
, in consideration of the mutual covenants, terms and conditions set
forth below, the Parties agree as follows:
ARTICLE 1
APPOINTMENT/AUTHORIZATION
1.1Appointment. Subject to the terms and conditions set forth in this Agreement, during the
term of this Agreement, Client appoints Cardinal Health as its exclusive third party logistics
distribution agent and as an authorized distributor of record 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
”).
1.2Acceptance of Appointment. Subject to the terms and conditions set forth in this
Agreement, Cardinal Health accepts the appointment to represent Client as its exclusive third
party logistics distribution agent and as an authorized distributor of record of Product to
Customers in the Territory.
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ARTICLE 2
SERVICES
2.1Services. Cardinal Health shall provide the services set forth in the Statement of Work
(“
SOW
”), which include, without limitation, storage, distribution, returns, customer support,
financial support, EDI and system access support (“
Services
”). The SOW shall be finalized
and mutually agreed upon between the Parties at least thirty (30) days prior to commercial
launch of Product. Once finalized, a copy of the SOW shall be attached hereto as
Exhibit B
and incorporated by reference.
2.2Statement of Work. The SOW may be amended from time to time upon the mutual written
agreement of the Parties; provided, however, that any change, modification or amendment to
the SOW may result in an increase or decrease in the Fees (as defined in Article 5).
2.3Compliance to Statement of Work. Cardinal Health’s services shall comply with the SOW
for up to […***…] of Client’s Forecast (defined below). If (i) Client’s shipments of Product
to Cardinal Health or (ii) Client’s Customers’ Product orders exceed Client’s Forecast by more
than […***…], Cardinal Health shall use commercially reasonable efforts to meet the
requirements of the SOW, provided however, that Client acknowledges that Cardinal Health
may not be able to meet all guidelines relating to response and shipping times.
2.4Product Returns. All Product returns shall be processed and handled by Cardinal Health in
accordance with the SOW; and any customization or additional return services requested by
Client shall be performed at an additional fee as agreed by the Parties.
2.5Product Recalls. Client is solely responsible for all Product recalls, provided however that
Cardinal Health shall be responsible for Product recalls to the extent arising from Cardinal
Health’s negligence or willful misconduct, subject to the terms of this Agreement. In the event
Product is subject to recall, or Client, on its own initiative, recalls any Product, Cardinal Health
shall provide assistance to Client as set forth in the SOW and as mutually agreed upon, provided
that, other than with respect to Product recalls arising from Cardinal Health’s negligence or
willful misconduct, for which Cardinal Health shall be responsible, Client shall pay to Cardinal
Health an amount equal to Cardinal Health’s actual costs incurred with any such recall
services. Such cost shall be in addition to the Fees described in Article 5 below.
ARTICLE 3
PRODUCT SUPPLY/CLIENT RESPONSIBILITIES
3.1Facility. Client shall deliver Product to Cardinal Health at Cardinal Health’s facility located
at 15 Ingram Boulevard, LaVergne, TN 37086, or to such other distribution facility as may be
designated by Cardinal Health to Client in writing (“
Facility
”).
3.2Delivery and Title. Client shall be responsible for delivery of Product to and from the
Facility, including all costs, expenses and risk of loss 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 Article 13 below. Except for Loss
resulting solely from the gross negligence or willful misconduct of Cardinal Health, Client
shall bear all risk of loss or damage with respect to the Product.
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3.3Forecast and Price List.
A.Forecast. Client shall provide Cardinal Health with a forecast of the volume of
Product to be handled by Cardinal Health under this Agreement, not less often than semi-
annually (“
Forecast
”). All forecasts, including the Forecast, are used for the express purpose
of operational planning. In the event of a variance from the Forecast […***…] or a change in
core business that could reasonably be expected to have a material effect upon the obligations
of either Party hereunder, the Party so affected may notify the other Party that it wishes to
negotiate an appropriate adjustment to the Fees. The Parties must meet within thirty (30) days
of such notification to discuss the merits and implementation of any such adjustment and during
such meeting, the Parties shall negotiate in good faith. If the Parties are unable to come to a
resolution regarding any such adjustment, the Party originally proposing the adjustment may
terminate this Agreement upon one hundred eighty days (180) prior written notice to the other
Party.
B.Price List. Upon execution of this Agreement, Client shall deliver to Cardinal Health
a customer list, which sets forth the Product prices (the “
Customer Price List
”). Client shall
notify Cardinal Health of any change in the Customer Price List not less than seventy-two
(72) hours prior to the effective date of any such change. Cardinal Health shall implement such
price change in accordance with Client’s reasonable instruction.
3.4Shipment Inspection. Cardinal Health shall visually inspect each shipment of Product for
external damage or loss in transit and notify Client […***…] of any such evident damage or
loss as provided in the SOW.
ARTICLE 4
INFORMATION SYSTEM ACCESS
4.1Access. During the Term of this Agreement and subject to the terms herein, Client may use
password(s) and identification number(s) provided by Cardinal Health to remotely access
Client’s data maintained on Cardinal Health’s web enabled Operating System Base and certain
support services associated therewith, as further set forth in the SOW (collectively, the
“
System
”) provided that such access is used solely by Client’s employees and consultants 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 be responsible for all use of the passwords and identification elements
and shall ensure that they 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.
4.2Fees. The System shall be made available to Client at the fees set forth in the Fee
Schedule. If Cardinal Health agrees to perform any custom enhancements to the System
requested by Client, such customization services shall be billed separately based on an hourly
rate set forth in the Fee Schedule (as defined in Article 5) and prior to such performance,
Cardinal Health shall notify Client of any related increase in the periodic Fees hereunder
relative to the ongoing support of the customizations.
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4.3Security. During the term of this Agreement, Cardinal Health shall employ reasonable
security measures and policies designed to safeguard the integrity, accessibility, 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. Such measures shall be no less secure than those utilized by Cardinal Health to
protect its own confidential information.
4.4Client Obligations. 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. 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 Cardinal Health.
4.5Disclaimer.
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. CARDINAL HEALTH 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.
4.6System Availability. Cardinal Health shall use reasonable 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.
4.7Suspension of Access. Notwithstanding anything to the contrary, in the event of a breach
or a threatened breach of any term of this Agreement, Cardinal Health may revoke or suspend
any or all passwords and identification numbers provided to Client hereunder.
4.8SSAE 16 Report. Cardinal Health shall provide to Client, on an annual basis, a Statement
on Standards for Attestation Engagements (“
SSAE 16
”) report prepared by an independent
public accounting firm (a “
Report
”). The scope of the Report may be limited to a review of
the key systems and processes which are relied upon by Client. Client may share such Report
with its auditors and contractors subject to confidentiality requirements. The foregoing
notwithstanding, in the event that the applicable public accounting rules change such that the
SSAE 16 report is no longer reasonably required by Client or its public accountants, then
Cardinal Health shall no longer be required to provide such Report. If Cardinal Health’s and
Client’s fiscal years do not close on the same date, upon request by Client, Cardinal Health
shall provide Client with a letter stating whether during the gap period there have been any
significant changes to the structure or operation of the internal controls or if anything has come
to Cardinal Health’s attention that would lead Cardinal Health to believe that the controls are
not working effectively.
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ARTICLE 5
PRICING AND PAYMENT TERMS
5.1Fees. As compensation for the Services, Client shall pay to Cardinal Health the fees
(“
Fees
”) set forth on
Exhibit C
(“
Fee Schedule
”) attached hereto and incorporated by
reference.
5.2Invoices. Cardinal Health shall issue an invoice to Client for the Services rendered under
this Agreement or for any other amounts due on a monthly basis. Payment is due within
[…***…] days of the invoice date via EFT (electronic funds transfer). If the invoice is not
paid within such […***…] day period, Cardinal Health may, at its option elect to (i) impose a
service charge on the unpaid amount calculated at the rate of 1% per month (or the maximum
rate permitted by law if such rate is less than 1% per month) until such amount is paid in full
and/or (ii) suspend any further Services until such invoice is paid in full.
5.3Fee Adjustment.
A.The Fees shall be held firm for the first contract year. Thereafter, Cardinal Health
will evaluate the fee schedule and may adjust the fees not more often than once per contract
year by three percent (3%).
B.Notwithstanding the terms set forth above in Section 5.3(A), if Cardinal Health can
reasonably demonstrate that the costs for providing the Services have materially increased, or
are likely to materially increase in the coming year due to the adoption of any applicable law
or regulation (or any material change in the interpretation or administration thereof), or due to
unforeseen circumstances beyond Cardinal Health’s reasonable control, then upon notice from
Cardinal Health, the Parties agree to meet in good faith and negotiate a mutually acceptable
adjustment to the Fees.
5.4Taxes. 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 Cardinal
Health’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 Cardinal Health under this Agreement; provided that the
amounts payable by Client under this section shall not include taxes based on the net income
of Cardinal Health.
ARTICLE 6
TERM AND TERMINATION
6.1Term. The Initial Term of this Agreement shall begin on the Effective Date and shall
continue for a period of three (3) years following the first shipment of FDA-approved Product
to a commercial customer (“
Initial Term
”), unless terminated earlier pursuant to this
Agreement. Thereafter, this Agreement shall automatically renew for additional terms of one
(1) year each (each, a “
Renewal Term
,” and together with the Initial Term, the “
Term
”),
unless written notice of termination is given by either Party at least thirty (30) days prior to the
end of the Initial Term or any Renewal Term.
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6.2Termination. Either Party shall have the right to immediately terminate this Agreement if:
(A)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 any order adjudicating
it to be bankrupt or insolvent and such order is not discharged within sixty (60) days; or
(B)the other 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; provided,
however, that (i) in the case of a breach that cannot be cured within thirty (30) days, the Parties
agree to meet in good faith and within thirty (30) days after the giving of written notice,
formulate a mutually agreeable plan to cure such breach within a reasonable period of time;
and (ii) in the case of a failure of Client to make payments in accordance with the terms of this
Agreement, Cardinal Health may terminate this Agreement if such payment breach is not cured
within ten (10) days following Client’s receipt of a written notice of non-payment to Client
from Cardinal Health.
6.3Effect of Termination. Expiration or termination of this Agreement shall be without
prejudice to any rights or obligations that accrued to the benefit of either Party prior to such
expiration or termination. Client shall pay Cardinal Health for all Services performed up to the
date of termination, and shall reimburse Cardinal Health for all costs and expenses incurred,
and all non-cancelable commitments made, in the performance of Services. Upon termination
or expiration of this Agreement, all Product shall be returned to Client or a designee of Client,
at Client’s sole cost and expense.
ARTICLE 7
REGULATORY
7.1Audits. No more than once per calendar year, or more frequently solely to the extent
required by applicable regulatory authorities, Client or its designee shall have the right during
normal business hours (
i.e.,
8:00 a.m. to 5:00 p.m. local Facility time), to conduct a complete
quality audit upon thirty (30) business days prior written notice to Cardinal Health. Client shall
have the right to conduct for cause audits immediately if necessary to ensure Product safety or
if otherwise necessary to implement or support a Product recall.
7.2Compliance with Laws. Each Party shall conduct its activities in connection with this
Agreement in compliance with all applicable United States laws, rules, regulations and
guidelines.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1Cardinal Health. Cardinal Health represents and warrants to Client that, unless otherwise
agreed to by the Parties, Cardinal Health shall perform Services in accordance with this
Agreement, the SOW, and applicable United States laws, rules, regulations and guidelines.
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8.2Client. Client represents, warrants and covenants to Cardinal Health that:
A.Product. The Product shall not be adulterated or misbranded as provided in the Food,
Drug and Cosmetic Act, as amended from time to time;
B.Promotion. Client’s activities relating to the promotion, sale and distribution of the
Product shall comply with all applicable laws, rules, regulations and guidelines;
C.No Infringement. It has all necessary authority and right, title and interest in and to
any intellectual property related to each Product or that is otherwise provided by Client under
this Agreement;
D.Safe Handling Instructions. It has provided all safe handling instruction, health and
environmental information and material safety data sheets applicable to the Product or to any
materials supplied by Client in writing in sufficient time for review and training by Cardinal
Health prior to delivery; and
8.3Mutual. Each Party represents and warrants to the other Party that:
A.Existence and Power. 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. Such Party (i) has the power and
authority and the legal right to enter into this Agreement and to perform its obligations
hereunder and (ii) has taken all necessary action on its part to authorize the execution and
delivery of this Agreement and the performance of its obligations hereunder;
C.Execution and Delivery. This 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;
D.No Consents. All necessary consents, approvals and authorizations of all regulatory
authorities and other persons required to be obtained by such Party in connection with the
Agreement have been obtained; and
E.No Conflict. The execution and delivery of this Agreement and the performance of
such Party’s obligations hereunder (i) do not conflict with or violate any requirement of
applicable laws; and (ii) do not materially conflict with, or constitute a material default or
require any consent under, any contractual obligation of such Party.
8.4Limitations. THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
ARTICLE 8 ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND
WARRANTIES MADE BY EACH PARTY TO THE OTHER AND NEITHER PARTY
MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES OF
ANY KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A
PARTICULAR PURPOSE.
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ARTICLE 9
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 Cardinal Health’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 which, 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).
ARTICLE 10
CONFIDENTIALITY AND NON-USE
10.1Mutual Obligation. Cardinal Health and Client agree that they shall not use the other
Party’s Confidential Information (defined below) except as necessary for the receiving Party
to perform its obligations under this Agreement or disclose the other Party’s Confidential
Information to any third Party without the prior written consent of the other Party except as
required by law, regulation or court or administrative order; provided, however, that prior to
making any such legally required disclosure, the Party making such disclosure shall give the
other Party as much prior notice of the requirement for and contents of such disclosure as is
practicable under the circumstances. Notwithstanding the foregoing, each Party may disclose
the other Party’s Confidential Information to any of its Affiliates that (A) need to know such
Confidential Information for the purpose of performing under this Agreement, (B) are advised
of the contents of this article, and (C) agree to be bound by the terms of this article.
10.2Definition. As used in this Agreement, the term “
Confidential Information
” includes all
such information furnished by Cardinal Health or Client, or any of their respective
representatives or Affiliates, to the other or its representatives or Affiliates in connection with
the services or performance of this Agreement, whether furnished before, on or after the date
of this Agreement and furnished in any form, including but not limited to written, verbal, visual,
electronic or in any other media or manner. Confidential Information includes all proprietary
technologies, know-how, trade secrets, discoveries, inventions and any other intellectual
property (whether or not patented), analyses, compilations, business or technical information
and other materials prepared by either Party, or any of their respective representatives,
containing or based in whole or in part on any such information furnished by the other Party or
its representatives. Confidential Information also includes the existence of this Agreement and
its terms.
10.3Exclusions. Notwithstanding Section 10.2, Confidential Information does not include
information that (A) is or becomes generally available to the public other than as a result of a
breach of this Agreement, or (B) is already known by the receiving Party at the time of
disclosure as evidenced by the receiving Party’s written records, or (C) becomes available to
the receiving Party on a non-confidential basis from a source that is entitled to disclose it on a
non-confidential basis, or (D) was or is independently developed by or for the receiving Party
without reference to the Confidential Information, as evidenced by the receiving Party’s written
records.
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10.4No Implied License. The receiving Party shall obtain no right of any kind or license under
any patent application or patent by reason of this Agreement. All Confidential Information
shall remain the sole property of the Party disclosing such information or data.
10.5Return of Confidential Information. Upon termination of this Agreement, the receiving
Party shall, upon request, promptly return within thirty (30) days all such information,
including any copies thereof, and cease its use or, at the request of the disclosing Party, shall
promptly destroy the same and certify such destruction to the disclosing Party; except for a
single copy thereof, which may be retained for the sole purpose of determining the scope of
the obligations incurred under this Agreement.
10.6Survival. The Parties intend for this Article 10 to supersede that certain Confidentiality
Agreement between the parties dated the 27
th
day of January, 2015. The obligations of this
Article 10 shall terminate five (5) years from the expiration of this Agreement; provided that
with respect to Confidential Information that constitutes a trade secret under the laws of any
jurisdiction, and which is labeled in writing as a “Trade Secret”, such rights and obligations
will survive such expiration until, if ever, such Confidential Information loses its trade secret
protection other than due to an act or omission of the recipient or its representatives.
ARTICLE 11
INDEMNIFICATION
11.1Indemnification by Cardinal Health. Cardinal Health shall indemnify and hold harmless
Client, its Affiliates, and their respective directors, officers, employees and agents (“
Client
Indemnitees
”) from and against any and all suits, claims, losses, demands, liabilities, damages,
costs and expenses (including reasonable attorney’ fees) in connection with any suit, demand
or action by any third party (“
Liabilities
”) arising out of or resulting from (A) any breach of
its representations, warranties or obligations set forth in this Agreement or (B) any negligence
or willful misconduct by Cardinal Health, except to the extent that any of the foregoing arises
out of or results from any Client Indemnitee’s negligence, willful misconduct or breach of this
Agreement.
11.2Indemnification by Client. Client shall indemnify and hold harmless Cardinal Health, its
Affiliates, and their respective directors, officers, employees and agents (“
Cardinal Health
Indemnitees
”) from and against all Liabilities arising out of or resulting from (A) any breach
of its representations, warranties or obligations set forth in this Agreement; (B) any
manufacture, sale, promotion, distribution, shipping, use of or exposure to the Product or any
materials supplied by Client, including, without limitation, product liability or strict liability;
(C) Client’s exercise of control over the Services to the extent that Client’s instructions or
directions violate applicable law; (D) any actual or alleged infringement or violation of any
patent, trade secret, copyright, trademark or other proprietary rights concerning the Product or
provided by Client; or (E) any negligence or willful misconduct by Client, except to the extent
that any of the foregoing arises out of or results from any Cardinal Health Indemnitee’s
negligence, willful misconduct or breach of this Agreement.
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11.3Indemnification Procedures. All indemnification obligations in this Agreement are
conditioned upon the Party seeking indemnification: (A) promptly notifying the indemnifying
Party of any claim or liability of which the Party seeking indemnification becomes aware
(including a copy of any related complaint, summons, notice or other instrument); provided,
however, that failure to provide such notice within a reasonable period of time shall not relieve
the indemnifying Party of any of its obligations hereunder except to the extent the indemnifying
Party is prejudiced by such failure; (B) reasonably cooperating with the indemnifying Party in
the defense of any such claim or liability (at the indemnifying Party’s expense); and (C) not
compromising or settling any claim or liability without prior written consent of the
indemnifying Party.
ARTICLE 12
LIMITATIONS OF LIABILITY
12.1CARDINAL HEALTH’S TOTAL LIABILITY UNDER THIS AGREEMENT,
WHETHER IN CONTRACT OR TORT, INCLUDING WITHOUT LIMITATION ANY OF
CARDINAL HEALTH’S INDEMNITY OR OTHER FINANCIAL OBLIGATIONS UNDER
ARTICLE 11, SHALL NOT EXCEED […***…].
12.2NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
PERFORMANCE UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION,
LOSS OF REVENUES, PROFITS OR DATA, WHETHER IN CONTRACT OR TORT,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
12.3NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE
LIMITATIONS IN THIS ARTICLE 12 SHALL NOT LIMIT CLIENT’S LIABILITY OR
RESPONSIBILITY RELATING TO A BREACH OF ITS OBLIGATIONS UNDER
ARTICLE 4 HEREIN.
ARTICLE 13
INSURANCE
13.1Insurance Policies. During the term of this Agreement, Client shall obtain and maintain
the following insurance with limits not less than those specified below:
A.Products and Completed Operations Liability Insurance covering the Products
included in this Agreement with a limit of $5,000,000 per occurrence;
B.All-Risk Property Insurance, including transit coverage, in an amount equal to full
replacement value covering Client’s property while it is at the Facility or in transit to or from
the Facility. Client’s all-risk property insurance shall apply to all losses and be primary (with
respect both to any insurance issued to Cardinal Health and to any deductible amount or self-
insured amount retained by Cardinal Health) except for losses resulting solely from the gross
negligence or intentional misconduct of Cardinal Health.
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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.
13.2Waiver. Client shall obtain a waiver from any insurance carrier with whom Client carries
Property Insurance releasing its subrogation rights against Cardinal Health except for losses
resulting solely from the gross negligence or intentional misconduct of Cardinal Health. Client
shall not seek reimbursement for any property claim, or portion thereof that is not fully
recovered from Client’s property insurance except for losses resulting solely from the gross
negligence or intentional misconduct of Cardinal Health.
13.3Additional Insured Status. Cardinal Health, Inc., and its Affiliates shall be named as
additional insureds under the Products and Completed Operations Liability insurance policies
as respects the Products and completed operations outlined in this Agreement. Such insurance
shall be primary (with respect both to any insurance issued to Cardinal Health and to any self-
insured amount retained by Cardinal Health) with regard to Cardinal Health’s liability for
damage arising out of those products for which they have been added as additional
insureds. Such additional insurance status shall continue during the term and, if the policies
are written on a claims made basis, shall continue for not less than five (5) years following
termination or expiration of this Agreement.
13.4Certificates. Client shall furnish certificates of insurance to Cardinal Health evidencing
the required insurance and additional insured status as soon as practicable after the Effective
Date and within thirty (30) days after renewal of such policies. Such certificates shall state that
Client’s insurers will endeavor to provide thirty (30) days written notice of any cancellation
prior to the policy(ies) expiration date(s). Each insurance policy that is required under this
article shall be obtained from an insurance carrier with an A.M. Best rating of at least A-VII.
ARTICLE 14
NOTICES
All notices and other communications hereunder shall be in writing and shall be deemed given:
(A) when delivered personally; (B) when delivered by facsimile transmission (receipt
verified); (C) when received or refused, if mailed by registered or certified mail (return receipt
requested), postage prepaid; or (D) when delivered if sent by express courier service, to the
Parties at the following addresses (or at such other address for a Party as shall be specified by
like notice; provided, that notices of a change of address shall be effective only upon receipt
thereof):
To Client:
Scilex Pharmaceuticals, Inc.
301 Lindenwood Drive, Suite 300
Malvern, PA 19355
Attn: Thom Brough
With a copy to:
Scilex Pharmaceuticals, Inc.
301 Lindenwood Drive, Suite 300
Malvern, PA 19355
Attn: Legal Department
Facsimile: […***…]
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To Cardinal Health:
Cardinal Health 105, Inc.
Specialty Pharmaceutical Services
15 Ingram Boulevard, Suite 100
LaVergne, TN 37086
Attn: VP, Third-Party Logistics Services
With a copy to:
Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
Attn: Associate General Counsel
Facsimile: […***…]
ARTICLE 15
MISCELLANEOUS
15.1Entire Agreement; Amendments. This Agreement, the attachments and any amendments
thereto constitute the entire understanding between the Parties and supersede 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 otherwise provided in this Agreement.
15.2Captions. The captions in this Agreement are for convenience only and are not to be
interpreted or construed as a substantive part of this Agreement
15.3Further Assurances. The Parties agree to execute, acknowledge and deliver such further
instruments and to take all such other incidental acts as may be reasonably necessary or
appropriate to carry out the purpose and intent of this Agreement.
15.4No Waiver. Failure by either Party to insist upon strict compliance with any term of this
Agreement in any one or more instances shall not be deemed to be a waiver of its rights to
insist upon such strict compliance with respect to any subsequent failure.
15.5Severability. 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 shall continue
in full force and effect.
15.6Independent Contractors. The relationship of 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,
co-partners, employer/employee or principal and agent.
15.7Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the Parties, their successors and permitted assigns. Neither Party may assign this Agreement,
in whole or in part, without the prior written consent of the other Party, except that either Party
may, without the other Party’s consent, assign this Agreement to an Affiliate or to a successor
to substantially all of the business or assets of the assigning company to which this Agreement
relates.
12
15.8Governing Law. This Agreement shall be governed by and construed under the laws of
the State of Tennessee, excluding its conflicts of law provisions.
The United Nations
Convention on Contracts for the International Sale of Goods shall not apply to this
Agreement
.
15.9Dispute Resolution. If any dispute, controversy or disagreement arises between the Parties
(“
Dispute
”), such Dispute shall be presented to the respective presidents or senior executives
of Cardinal Health and Client for their consideration and resolution. If such Parties cannot
reach a resolution of the Dispute within sixty (60) days, either Party may submit the Dispute to
a court of appropriate jurisdiction.
15.10Prevailing Party. In any dispute resolution proceeding between the Parties in connection
with this Agreement, the prevailing Party shall be entitled to its reasonable attorney’s fees and
costs in such proceeding.
15.11Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument. Any photocopy, facsimile or electronic reproduction of the executed Agreement
shall constitute an original.
15.12Publicity. Neither Party shall 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.
15.13Survival. The rights and obligations of the Parties shall continue under Articles 10
(Confidentiality and Non-Use), to the extent expressly stated therein, 11 (Indemnification), 12
(Limitations of Liability), 13 (Insurance), to the extent expressly stated therein, 14 (Notice)
and 15 (Miscellaneous) and Section 6.4 (Effect of Termination), notwithstanding expiration or
termination of this Agreement.
15.14Force Majeure. Except as to payments required under this Agreement, neither Party shall
be liable in damages for, nor shall this Agreement be terminable or cancelable by reason of,
any delay or default in such Party’s performance hereunder if such default or delay is caused
by events beyond such Party’s reasonable control including, but not limited to, acts of God,
regulation or law or other action or failure to act of any government or agency thereof, war or
insurrection, civil commotion, destruction of production facilities or materials by earthquake,
fire, flood or storm, labor disturbances, epidemic, or failure of suppliers, public utilities or
common carriers; provided however, that the Party seeking relief hereunder shall immediately
notify the other Party of such cause(s) beyond such Party’s reasonable control. The Party that
may invoke this section shall use all reasonable endeavors to reinstate its ongoing obligations
to the other. If the cause(s) shall continue unabated for one hundred eighty (180) days, then
both Parties shall meet to discuss and negotiate in good faith what modifications to this
Agreement should result from this force majeure.
13
IN WITNESS WHEREOF
, the undersigned have caused their duly authorized representative
to execute this Agreement effective as of the date first written above.
CARDINAL HEALTH 105, INC.
SCILEX PHARMACEUTICALS,
INC.
By:
/s/ David Cheetham
By:
/s/ William Pedranti
David Cheetham
Print Name:
William Pedranti
Division President
Title:Chief Operating Officer
Date:
Aug 18, 2015
Date:Aug 25, 2015
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EXHIBIT A
LIST OF PRODUCTS
15
EXHIBIT B
STATEMENT OF WORK
16
