**Exhibit 4.50**

 

 

**MANUFACTURING AND SUPPLY**

 

**MASTER AGREEMENT**

** **

**BETWEEN**

 

**PFIZER CANADA INC. (“PFIZER”)**

 

**AND**

 

**DRAXIS PHARMA,**

 

**A DIVISION OF DRAXIS SPECIALTY PHARMACEUTICALSINC.**

 

**(an amalgamation of DRAXIS Pharma Inc. andDRAXIMAGE Inc.)**

 

***(“COMPANY”)***

 

**DATED AS OF January 1, 2005**

 

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Table Of Contents

 
| ** **                                                                                             | **Page**                                                                    |
|--------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|
|                                                                                                   |                                                                        |
| Section 1.  Definitions                                                                           | 4                                                                           |
|                                                                                                   |                                                                        |
| Section 2.  Start-Up Activities                                                                   | 10                                                                          |
|                                                                                                   |                                                                        |
| 2.1.                                                                                                   | Start-Up  Activities                                                        | 10 |
| 2.2                                                                                                    | Purchase  and Installation of Equipment, Dedicated Change Parts and Tooling | 11 |
|                                                                                                   |                                                                        |   |
| Section 3  Supply Requirements; Orders; Shipment And Delivery Terms; Reports;  Alternative Supply | 11                                                                          |
|                                                                                                   |                                                                        |   |
| 3.1.                                                                                                   | Agreement  to Supply under Addendum                                         | 11 |
| 3.2.                                                                                                   | Use of  Facility, Equipment, Molds and Tooling                              | 11 |
| 3.4                                                                                                    | Forecasts                                                                   | 12 |
| 3.5                                                                                                    | Firm  Orders; Changes to Firm Orders                                        | 12 |
| 3.6                                                                                                    | Shipment Reports                                                            | 12 |
| 3.7                                                                                                    | Shipping  Instructions/Risk of Loss                                         | 12 |
| 3.8                                                                                                    | Standard  Forms                                                             | 13 |
| 3.9                                                                                                    | Procurement  and Approval of Raw Materials and Ingredients                  | 13 |
| 3.10                                                                                                   | No Third  Party Conflicts                                                   | 14 |
| 3.11                                                                                                   | Product  Samples                                                            | 14 |
| 3.12                                                                                                   | Alternative  Supply                                                         | 15 |
|                                                                                                   |                                                                        |   |
| Section 4.  Price; Payment; Price Adjustments; Taxes                                              | 16                                                                          |
|                                                                                                   |                                                                        |   |
| 4.1                                                                                                    | Purchase  Price                                                             | 16 |
| 4.2                                                                                                    | Changes  in Price                                                           | 16 |
| 4.3                                                                                                    | Cost  Improvement                                                           | 16 |
| 4.5                                                                                                    | Taxes                                                                       | 16 |
| 4.6                                                                                                    | Provision  of Similar Products                                              | 16 |
|                                                                                                   |                                                                        |   |
| Section 5.  Manufacturing Standards And Quality Assurance                                         | 16                                                                          |
|                                                                                                   |                                                                        |   |
| 5.1                                                                                                    | Manufacturing  Standards                                                    | 16 |
| 5.2                                                                                                    | Modifications  in Specifications                                            | 17 |
| 5.3                                                                                                    | Pest  Control                                                               | 17 |
| 5.4                                                                                                    | Storage  and Handling                                                       | 17 |
| 5.5                                                                                                    | Maintenance  of Facility, Equipment and Molds                               | 18 |
| 5.6                                                                                                    | Legal and  Regulatory Filings and Requests                                  | 18 |
| 5.7.                                                                                                   | Analysis  of Materials                                                      | 19 |
| 5.8.                                                                                                   | Quality  Tests and Checks                                                   | 19 |
| 5.9.                                                                                                   | Non-conforming  Materials                                                   | 19 |
| 5.10.                                                                                                  | Non-complying  Product                                                      | 20 |
| 5.11.                                                                                                  | Responsibility  for Rejected and Non-Complying Product                      | 20 |
| 5.12.                                                                                                  | Disposal  of Rejected and Non-Complying Product and Materials               | 20 |

 

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| 5.13.                                                                    | Maintenance  and Retention of Records                                                                                           | 20     |
|--------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|--------|
| 5.14.                                                                    | Quantitative  Defects; Rejection of Product; Replacement of Rejected Shipments                                                  | 21     |
| 5.15.                                                                    | Customer  Complaints and Inquiries                                                                                              | 22     |
| 5.16.                                                                    | Government  Inspections, Seizures and Recalls                                                                                   | 23     |
| 5.17.                                                                    | Quality  Agreement                                                                                                              | 24     |
| 5.18                                                                     | Facility Inspections and Audits                                                                                                 | 24     |
| 5.19                                                                     | Audit of  Financial Books and Inspections                                                                                       | 24     |
| 5.20.                                                                    | Diversion  Issues                                                                                                               | 25     |
| 5.21                                                                     | Waste Disposal                                                                                                                  | 25     |
| 5.23                                                                     | Segregation of Restricted Compounds                                                                                             | 25     |
| 5.24                                                                     | Survival                                                                                                                        | 25     |
|                                                                     |                                                                                                                            |   |
| Section 6.  Representations; Warranties And Covenants               | 26                                                                                                                              |
|                                                                     |                                                                                                                            |   |
| 6.1                                                                      | Representations,  Warranties and Covenants of COMPANY                                                                           | 26     |
| 6.2                                                                      | Representations,  Warranties and Covenants of PFIZER                                                                            | 28     |
| 6.3.                                                                     | Notice of  Material Events                                                                                                      | 29     |
| 6.4.                                                                     | Survival                                                                                                                        | 29     |
|                                                                     |                                                                                                                            |   |
| Section 7.  Environmental Representations, Warranties And Covenants | 29                                                                                                                              |
|                                                                     |                                                                                                                            |   |
| 7.1.                                                                     | Compliance  with Environmental Laws                                                                                             | 29     |
| 7.2.                                                                     | Permits,  Licenses and Authorization                                                                                            | 29     |
| 7.3.                                                                     | Hazardous  Materials and Waste                                                                                                  | 30     |
| 7.4.                                                                     | Generation  of Hazardous Wastes                                                                                                 | 30     |
| 7.5.                                                                     | Diversion  Issues                                                                                                               | 30     |
| 7.6.                                                                     | Health  and Safety Procedure                                                                                                    | 30     |
| 7.7.                                                                     | Training                                                                                                                        | 30     |
| 7.8                                                                      | Environmental  and Health and Safety Reviews                                                                                    | 31     |
| 7.9                                                                      | Prompt  notice to PFIZER of Material Environmental or Health and Safety adverse  impacts upon COMPANY’S ability to perform | 32     |
| 7.10.                                                                    | Survival                                                                                                                        | 32     |
|                                                                     |                                                                                                                            |   |
| Section 8  Ownership; Trademarks; Proprietary                       | 32                                                                                                                              |
|                                                                     |                                                                                                                            |   |
| 8.1.                                                                     | PFIZER’s  Ownership of Intellectual Property; PFIZER Technology and Information                                            | 32     |
| 8.2.                                                                     | Ownership  of Other Property                                                                                                    | 33     |
| 8.3.                                                                     | Limited  Right to Use                                                                                                           | 33     |
| 8.4.                                                                     | Survival                                                                                                                        | 34     |
|                                                                     |                                                                                                                            |   |
| Section 9.  Indemnification                                         | 34                                                                                                                              |
|                                                                     |                                                                                                                            |   |
| 9.1.                                                                     | Indemnification  of PFIZER                                                                                                      | 34     |
| 9.2.                                                                     | Indemnification  of COMPANY                                                                                                     | 34     |
| 9.3.                                                                     | Assertion  of Claim                                                                                                             | 35     |
| 9.5                                                                      | Limitation  on Liability                                                                                                        | 35     |
| 9.4.                                                                     | Survival                                                                                                                        | 35     |
|                                                                     |                                                                                                                            |   |
| Section 10.  Insurance                                              | 35                                                                                                                              |
|                                                                     |                                                                                                                            |   |
| 10.1.                                                                    | Coverage                                                                                                                        | 35     |

 

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| 10.3.                                                                                      | Certificates  of Insurance; Maintenance of Coverage | 36     |
|--------------------------------------------------------------------------------------------|-----------------------------------------------------|--------|
|                                                                                       |                                                |   |
| Section 11.  Pfizer Supply Of Materials(Raw Materials, API Or Packaging)              | 37                                                  |
|                                                                                       |                                                |   |
| 11.1                                                                                       | Supply of  Raw Materials                            | 37     |
| 11.2                                                                                       | Testing                                             | 37     |
| 11.3                                                                                       | Title and  Risk of Loss                             | 37     |
| 11.4                                                                                       | Reimbursement  for Loss of Raw Materials            | 38     |
|                                                                                       |                                                |   |
| Section 12.  Confidential Information                                                 | 38                                                  |
|                                                                                       |                                                |   |
| 12.1                                                                                       | Confidential  Information                           | 38     |
|                                                                                       |                                                |   |
| Section 13.  Term; Termination                                                        | 40                                                  |
|                                                                                       |                                                |   |
| 13.1                                                                                       | Commencement  and Termination of the Agreement      | 40     |
| 13.2                                                                                       | Initial  Term; Term of an Addendum                  | 40     |
| 13.3                                                                                       | Termination  by PFIZER                              | 40     |
| 13.4                                                                                       | Termination  by COMPANY                             | 41     |
| 13.5                                                                                       | Effect of  Termination                              | 41     |
| 13.6                                                                                       | Unused  Materials                                   | 42     |
| 13.7                                                                                       | Return of  Materials, etc. Supplied by PFIZER       | 42     |
|                                                                                       |                                                |   |
| Section 14. Force Majeure                                                             | 43                                                  |
|                                                                                       |                                                |   |
| 14.1                                                                                       | Force Majeure                                       | 43     |
|                                                                                       |                                                |   |
| Section 15. Exclusivity                                                                    | 43                                                  |
|                                                                                       |                                                |   |
| 15.1                                                                                       | Manufacture  of Competing Product                   | 43     |
|                                                                                       |                                                |   |
| Section 16.  Miscellaneous                                                            | 44                                                  |
|                                                                                       |                                                |   |
| 16.1                                                                                       | Relationship  of the Parties                        | 44     |
| 16.2                                                                                       | Successors  and Assigns; Subcontracting             | 44     |
| 16.3                                                                                       | Notice                                              | 44     |
| 16.4                                                                                       | Entire  Agreement                                   | 45     |
| 16.5                                                                                       | Severability                                        | 45     |
| 16.6                                                                                       | Waiver                                              | 46     |
| 16.7                                                                                       | Headings                                            | 46     |
| 16.8                                                                                       | Counterparts                                        | 46     |
| 16.9                                                                                       | Governing  Law                                      | 46     |
| Schedule B    Form of  Addendum                                        | 49                                                  |
| Schedule B-1   Addendum                                                     | 51                                                  |
| Schedule C   PFIZER Owned Equipment, Dedicated Change  Parts and/or Tooling | 54                                                  |
| Schedule D   Approved Carriers                                              | 55                                                  |
| Schedule E    Raw  Materials to be supplied by PFIZER                       | 56                                                  |
| Attachment  A   Canada Product / Price List                                      | 57                                                  |
| Attachment  B   Draft Quality Agreement                                          | 60                                                  |

 

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MANUFACTURING AND SUPPLY MASTER AGREEMENT

 

MANUFACTURING AND SUPPLYMASTER AGREEMENT dated as of January 1, 2005 (“Effective Date”), by PFIZERCANADA INC., a Canadian corporation having its principal office located at17,300 Trans Canada Highway, Kirkland, Quebec, H9J 2M5 (hereinafter “PFIZER”)and DRAXIS PHARMA, a division of DRAXIS Specialty Pharmaceuticals Inc. (anamalgamation of DRAXIS Pharma Inc. and DRAXIMAGE Inc.), a****Canadian****corporation having its principal manufacturing facilities at 16751Trans Canada Highway, Kirkland, Quebec, H9H 4J4 (hereinafter “COMPANY”).

 

WITNESSETH:

 

WHEREAS,PFIZER desires to have COMPANY manufacture and supply PFIZER with product(s) asdefined in Section 1 Definitions below;

 

WHEREAS,COMPANY desires to manufacture and supply PFIZER with such Product(s); and

 

WHEREAS,the parties are willing to carry out the foregoing pursuant to the terms andconditions set forth in this Agreement;

 

NOW,THEREFORE, in consideration of these premises and the covenants, agreements,representations and warranties herein contained, and for other good andvaluable consideration, the receipt and sufficiency of which is herebyacknowledged, the parties hereby agree as follows:

 

SECTION 1.DEFINITIONS.

 

Asused in this Agreement, the following defined terms shall have the meanings setforth below.

 

“ActivePharmaceutical Ingredients” or “API” shall mean the bulk active drugsubstances.

 

“Addendum” shall mean a document in the form of Schedule “B”to this Agreement which incorporates this Agreement by reference and isexecuted by the parties. In the event of a discrepancy between the terms of anAddendum and the terms of this Agreement, the terms of the executed Addendumshall govern.

 

“Affiliate”shall mean, with respect to any Person, any individual, corporation or otherbusiness entity that either directly or indirectly, controls such Person, iscontrolled by such Person, or is under common control by a Parent Company withsuch Person. For purposes of this definition, the term “control” means the possessionof the power to direct or cause the direction of the management and policies ofsuch Person, whether through the ownership of voting securities, by contract orotherwise.

 

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“Agreement”shall mean or refer to either this Manufacturing and Supply Master Agreementand all attachments hereto or be read as referring to an Addendum as either may beamended, supplemented or otherwise modified from time to time, whichever isappropriate given the context, with the expectation that upon incorporating theterms of this Manufacturing and Supply Agreement into an Addendum that the term“Agreement” when used herein will most often refer to an Addendum.

 

“AnnualProduct Review” shall mean the APR prepared by the COMPANY for each Product. EachAPR shall include, but shall not necessarily be limited to, the followinginformation: (i) stability data, (ii) the total number of Productbatches formulated during the APR period, including related analytical data forall Product batches which passed or failed quality or other testing during theAPR period, (iii) an investigation summary in respect of each Productbatch failure, and (iv) a summary of any significant Product processing,packaging or analytical changes. A copy of the final APR for each Product mustbe forwarded by the COMPANY to PFIZER within five (5) Business Days ofcompletion.

 

“BusinessDay” shall mean any day other than Saturday, Sunday or any day on which bankslocated in Canada are authorized or obligated to be closed.

 

“cGMP”shall mean all applicable standards and Laws relating to manufacturingpractices for Products (including ingredients, testing, storage, handling,intermediates, bulk and finished products) promulgated by any GovernmentalAuthority having jurisdiction in the form of laws, regulations,guidelines, advisory opinions and compliance policy guides and currentinterpretations of the authority agency (as applicable to pharmaceuticalproducts and ingredients), as the same may be updated, supplemented oramended from time to time.

 

“Claimor Proceeding” shall mean any claim, action, suit, proceeding or arbitrationincluding any Governmental Authority action, notification, investigation oraudit.

 

“CommercialLaunch Date” shall have the meaning set forth in Section 3.3.

 

 “COMPANY Indemnified Party” shall have themeaning set forth in Section 9.2.

 

“ConfidentialInformation” shall have the meaning set forth in Section 12.1.

 

“EffectiveDate” means the date first appearing in this Agreement.

 

**“EnvironmentalLaw” means any applicable statute, ordinance, rule, regulation code, order,judgment, decree or injunction relating to the protection of the environment,occupational safety and health, or the exposure to, or the use, storage,recycling, treatment, generation, labeling, protection, release or disposal ofHazardous Materials.**

 

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“EnvironmentalLosses” shall mean any and all fines, penalties, costs, liabilities, damages orlosses incurred by PFIZER or an Affiliate of PFIZER, or for which PFIZER or anAffiliate of PFIZER is liable or obligated pursuant to any Environmental Lawand (i) arising out of the COMPANY’s operation or ownership of theFacilities of COMPANY, the facilities of any Affiliate of COMPANY, or thefacilities of any subcontractor of COMPANY or such subcontractor’s Affiliates;or (ii) relating to, arising from, or in any way connected with, thetesting, manufacture, packaging, generation, processing, storage,transportation during processing or outside testing, distribution, treatment,disposal or other handling of Product(s) or Product Materials used in themanufacture, packaging, handling or storage of Product(s), or associatedby-products, Raw Materials, intermediates, Wastes, Releases or returnedProduct(s), by COMPANY, Affiliates of COMPANY, or subcontractors of COMPANY orsuch subcontractor’s Affiliates, or their respective officers, directors,employees, agents or contractors all of which is related to or arising from anyof the services to be provided pursuant to this Agreement.

 

“EnvironmentalRelease” shall mean any release, spill, emission, leaking, pumping, injection,deposit, disposal, discharge, dispersal, leaching or migration into theenvironment, including the movement of Hazardous Materials through the ambientair, soil, subsurface water, groundwater, wetlands, lands or subsurface stratafrom COMPANY’s Facilities, the facilities of Affiliates of COMPANY, or thefacilities of the Subcontractors of COMPANY.

 

“EstimatedStart-Up Costs” shall have the meaning set forth in Section 2.1(a).

 

“Facility”shall mean COMPANY’s manufacturing facility located at 16751 Trans-CanadaHighway, Kirkland, Quebec H9H 4J4 and, subject to PFIZER’s prior writtenapproval, such other facilities used by COMPANY in the manufacture, packagingand storage of (a) Product(s) or (b) Product Materials utilized inthe manufacture of Product(s) hereunder.

 

“FDA”shall mean the United States Food and Drug Administration or any successoragency.

 

“FDAAct” shall mean the Food, Drug and Cosmetic Act, as amended.

 

“FirmOrder Period” shall have the meaning set forth in Section 3.5.

 

“Foodand Drugs Act” shall mean the Canadian Food and Drugs Act, as amended.

 

 “Governmental Authority” shall mean any dulyauthorized court, tribunal, arbitrator, agency, commission, official or otherinstrumentality of any federal, state, province, county, city or otherpolitical subdivision, domestic or foreign.

 

“HazardousMaterial” means any substance, matter, pollutant or contaminant as defined orregulated under applicable Environmental Laws, including, without limitation,toxic, flammable, or explosive materials; asbestos-containing materials,polychlorinated 

 

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biphenyls, or lead-containing materials; and, carcinogenic, mutagenic,or teratogenic materials.

 

“Hazardous Waste” shall mean waste arising from theCOMPANY’s manufacturing, handling or storage of the Product(s) or which isotherwise generated by COMPANY, Affiliates of COMPANY or Subcontractors ofCOMPANY through the implementation of this Agreement, that is defined in, orwhich would be determined to be hazardous waste under, any Environmental Laws.

 

“Health Canada” shall mean the Canadian regulatorybody or any successor agency.

 

“IndemnifiedParty” shall have the meaning set forth in Section 9.3.

 

“IndemnifyingParty” shall have the meaning set forth in Section 9.3.

 

 “Initial Term” shall have the meaning setforth in Section 13.1.

 

“IntellectualProperty” shall mean (a) any processes, trade secrets, inventions,industrial models, designs, methodologies, drawings, formulae, procedures,techniques, clinical data or technical or other information or data,manufacturing, engineering and technical drawings necessary or useful in theregistration, packaging, manufacture, use or sale of the Product(s), and (b) registeredtrade marks, trade mark applications, unregistered marks, trade dress,copyrights, know-how, patents, patent applications, and any and allprovisionals, divisions, continuations, continuations in part, extensions,substitutions, renewals, registrations, revalidations, reissues or additions,including supplementary certificates of protection, of or to any of theaforesaid patents and patent applications, and all foreign counterparts of any,or to any, of the aforesaid patents and patent applications, or any futurepatents or patent applications covering the Product(s) or any componentsthereof or improvements thereof.

 

“Laws”shall mean any law, statute, rule, regulation, guideline (including cGMP),ordinance or other pronouncements of any Governmental or Regulatory Authorityhaving the effect of law in Canada, any applicable foreign country orterritory, or any domestic or foreign state, province, county, city or otherpolitical subdivision, including any applicable Environmental Laws. The laws of Canada shall always be deemed theapplicable law even if the PFIZER Affiliate executing an Addendum is not aCanadian company and/or there is no expectation that Product(s) will be sold inCanada except where to do so would contradict laws of the jurisdiction in whichProduct(s) will be sold.

 

“Losses”shall mean any and all damages, fines, fees, settlements, payments,obligations, penalties, deficiencies, losses, costs and expenses (includingEnvironmental Losses, interest, court costs, reasonable fees of attorneys,accountants and other experts and other reasonable expenses of litigation orother proceedings or of any claim, default or assessment).

 

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“PackagingMaterials” shall mean the packaging components used to package the Product(s)including the Product(s) labeling.

 

“Person”shall mean any natural person, entity, corporation, general or, limitedpartnership, proprietorship, other business organization, trust, union,association or Governmental Authority.

 

“PFIZEREquipment” shall mean the equipment, dedicated change parts, tooling, molds andoperating supplies or other proprietary materials owned by PFIZER and providedby PFIZER to COMPANY for the manufacturing, processing, packaging, labeling,testing, handling or storing of the Products as set out in Schedule “C” asmay be updated from time to time.

 

“PFIZERIndemnified Party” shall have the meaning set forth in Section 9.1.

 

“Price”shall mean the price to be charged by COMPANY for Product(s) manufactured andsupplied hereunder as delivered to PFIZER attached as Attachment “A”, whichprice shall include all of the costs associated with the manufacture,packaging, handling or storing of the Products including, but not limiting thegenerality of the foregoing, all of the following costs:  (i) materials; (ii) manufacturing; (iii) labour;(iv) ***; (v) ***; (vi) ***; (vii) ***; (viii) ***; (ix) ***;(x) ***; (xi) ***; (xii) ***; (xiii) ***; and (xiv) Taxes (excluding GST on theFinished Product(s)) and which Price is fully described in Section 4.1 andmore specifically in Attachment “A” or the Addendum for such Product(s).

 

“ProductMaterials” shall mean Raw Materials and Packaging Materials .

 

“Product(s)”shall mean the finished product(s) as more fully described in theSpecifications contained in Attachment “A” or the Addendum for such product(s)as the same may be varied by the mutual written agreement of the parties fromtime to time.

 

 “Purchase Order” shall mean a written orelectronic form submitted by PFIZER in accordance with the terms of thisAgreement to COMPANY authorizing the manufacture of Product(s).

 

 “Quality Agreement” shall mean thosesupplemental quality provisions set forth in the Quality Agreement amongCOMPANY and PFIZER relating to the Product(s) attached hereto as Attachment B,as the same may be amended or modified from time to time.

 

“QuantitativeDefects” shall mean defects in a shipment of Product(s) resulting from PFIZER’sreceipt of less than the invoiced amount of Product(s) for such shipment.

 

“RawMaterials” shall mean active pharmaceutical ingredient(s) (API(s)) and otheringredients and excipients used in the manufacture of the Products.

 

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“Recall”shall mean a “recall”, “correction” or “market withdrawal” and shall includeany post-sale warning or mailing of information.

 

“RegulatoryApprovals” shall mean any registrations, licenses, authorizations, permits orapprovals (as well as applications with respect to any of the foregoing) issuedby any Governmental Authority in each case required in connection with thepackaging, manufacture, use, distribution, transportation (including export or import)or sale of the Product(s).

 

“SignificantMaterial Cost Change(s)” shall mean a change of plus or minus *** or more inthe aggregate cost of all Product Materials..

 

 “Specifications” shall mean the PFIZERprovided specifications for the manufacture, processing, packaging, labeling,testing and testing procedures, shipping, storage and supply of the Product(s),including all formulae, know-how, Raw Materials requirements, analyticalprocedures and standards of quality control, quality assurance and sanitation,as referenced currently existing manufacturing and packaging instructions andguidelines as well as any generally and properly understood practices requiredby PFIZER (as disclosed in writing by PFIZER from time to time to COMPANY,) oras specifically set out in the Addendum for such Product(s), and as suchSpecifications may be amended, supplemented or otherwise modified by theparties in accordance with Section 5.2 hereof. Where possible, partiesshall refer to code or identifiable item number to address Specifications.

 

“Start-UpActivities” shall have the meaning set forth in Section 2.1(a).

 

“Subcontractors”shall mean those facilities required to conduct services directly linked to themanufacture, packaging, supply and testing of the Product(s). COMPANY engagedSubcontractors shall be approved by PFIZER in advance and shall be licensed,audited, fully insured and compliant with regulations as specified in a writtencontract between COMPANY and Subcontractor.

 

“Term”shall have the meaning set forth in Section 13.2.

 

“Territory”shall mean Canada and those countries set forth in each Addendum, in accordancewith Schedule “B”, including those countries identified in Schedule “B-1”.

 

“Waste”shall mean all wastes which arise from COMPANY’s manufacture, handling orstorage of Product(s) hereunder, or which is otherwise produced by COMPANY,Affiliate of COMPANY or Subcontractor of COMPANY through the implementation ofthis Agreement, including Hazardous Materials and Hazardous Waste.

 

“$”shall mean Canadian dollars unless expressly stated otherwise.

 

Thedefinitions in this Section 1 shall apply equally to both the singular andplural forms of the terms defined. As used in this Agreement, (i) thewords “include”, “includes” and “including” shall be deemed to be followed bythe phrase “without 

 

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limitation”; (ii) the words “hereof”, “herein”, “hereby” andderivatives or similar words refer to this entire Agreement; (iii) allreferences to Attachments shall be deemed references to Sections of thisAgreement and Attachments to this Agreement unless the context shall otherwiserequire; and (iv) whenever this Agreement refers to a number of days, suchnumber shall refer to calendar days unless otherwise specified.

 

SECTION 2.START-UP ACTIVITIES

 

2.1.          Start-UpActivities

 

(a)           COMPANYhereby agrees that (i) by the applicable manufacturing commencement dateset forth in an Addendum, it shall have complied with and completed to the fullsatisfaction of PFIZER all scale-up commercialization and manufacturingstart-up activities with respect to new Product(s), including manufacturingtrials, stability testing, validation protocols, validation, writing ofvalidation reports and Raw Material and finished Products testing, inaccordance with the applicable Addendum, (ii) it shall be responsible formanaging the execution of the manufacturing trials and obtaining Raw Materials,Packaging Materials and inventory for such trials and providing technical,quality and operational resources, and (iii) it shall perform allother activities, preparations, supervision and/or training as is or becomesnecessary to enable COMPANY to commence the manufacturing, packaging, labelingand shipment of Product(s) to PFIZER hereunder all in accordance with theprovisions set out in an Addendum in accordance with Schedule “B” attachedhereto. The activities described in clauses (i), (ii) and (iii) ofthis Section 2.1(a) are collectively referred to herein as the “Start-UpActivities”. Unless otherwise provided in an Addendum, COMPANY shall pay forthe costs associated with such Start-Up Activities. If under an Addendum,PFIZER is to pay for all or some portion of the cost associated with Start-UpActivities, then PFIZER’s obligation with respect to the cost of such Start-UpActivities shall be no more than the estimated start-up costs identified on theapplicable Addendum (“Estimated Start-Up Costs”).

 

(b)           COMPANYshall permit a reasonable number of PFIZER employees to observe and review theStart-Up Activities at the Facility during normal business hours and onreasonable prior written notice. COMPANY shall permit a reasonable number ofPFIZER employees to provide technical assistance and direction at the Facilityin connection with the Start-Up Activities provided, however, that suchassistance and direction shall not reduce or alter COMPANY’s obligationshereunder. The validation reports produced hereunder shall be deemedConfidential Information of PFIZER hereunder and shall not be disclosed byeither party (or by any subcontractor of either party) to any third party,except as permitted under Section 12.

 

(c)           COMPANYagrees to provide all final documentation related to Start-Up Activities toPFIZER for prior approval.

 

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2.2           Purchaseand Installation of Equipment, Dedicated Change Parts and Tooling

 

COMPANYshall be responsible for (i) purchasing, installing and validating at itsFacility all equipment, dedicated change parts and tooling (ii) modificationsto existing equipment, dedicated change parts and/or tooling which arenecessary for the manufacture, packaging, labeling and shipment of Product(s)hereunder and (iii) maintenance of all such equipment, dedicated changeparts and tooling, and all costs and expenses associated therewith inaccordance with the assets set out on Schedule “C”. The installation andmaintenance of the foregoing equipment, dedicated change parts and tooling byCOMPANY shall be done in accordance with all Laws. If pursuant to an Addendum,PFIZER has agreed to pay for or reimburse any cost associated with equipment,dedicated changes parts or tooling, then at the request of PFIZER, COMPANYshall return to PFIZER all equipment, molds, dedicated change parts, tooling andoperating supplies (which shall be considered to be PFIZER Equipment) relatingto any Product(s) that were provided or paid for by PFIZER. If COMPANY mustpurchase equipment and PFIZER has agreed to pay for such equipment as anamortized portion of the Price and an Addendum is terminated prior to COMPANY’srecovery of agreed upon equipment costs, PFIZER shall meet with COMPANY todiscuss a reimbursement schedule of the equipment cost.

 

SECTION 3 SUPPLY REQUIREMENTS; ORDERS; SHIPMENTAND DELIVERY TERMS; REPORTS; ALTERNATIVE SUPPLY.

 

3.1.          Agreementto Supply.

 

The terms of thisAgreement shall be incorporated by reference into each Addendum that may besigned by the parties to govern the supply and manufacture to PFIZER (and/orits Affiliates or designees), of such quantities of Product(s) for theTerritory (or part thereof) as shall be more fully specified in eachAddendum. In the event of a conflict between the terms of any Addendum, and theterms of this Agreement, the terms of the executed Addendum shall prevail. Theexecution by the parties of this Agreement does not obligate them to enter intoany Addendum. Each Addendum, when executed, constitutes a separate and distinctagreement from this Agreement and from any other Addendum executed by the parties.An Affiliate of PFIZER may execute an Addendum with the COMPANY as aseparate agreement and, in such circumstances, all references in this Agreementto PFIZER shall be deemed to be to the relevant Affiliate of PFIZER which shallbe entitled to enforce the agreement constituted by the Addendum in its ownname and shall be solely liable to COMPANY for any obligations and liabilitiesundertaken hereunder.

 

3.2.          Useof Facility, Equipment, Molds and Tooling.

 

All manufacturing,packaging and storage activities shall be carried out by COMPANY, at itsFacility utilizing equipment, molds and tooling in the manner set forth in theSpecifications.

 

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3.3.          CurrentProduction Guidelines; Capacity.

 

Subject to the termshereof, COMPANY shall devote adequate manufacturing capacity to be capable ofproducing, and supplying PFIZER (and/or its Affiliates or designees), thequantity of Product(s) in accordance with the forecasts plus twenty-fivepercent (25%) of such forecast set out in the following provisions of thisAgreement. In addition, for new Products, it is understood and agreed byCOMPANY that it is a material term of this Agreement that COMPANY complete allnecessary packaging, manufacturing and supply arrangements on a schedule whichwill enable PFIZER to commence shipping the amount of new Product(s) set forthin the forecast to its retail customers for the commercial roll out of the newProduct(s) on or before the date set forth in an Addendum for such commerciallaunch (“Commercial Launch Date”).

 

COMPANY agrees to adjustcapacity as commercially reasonably necessary in the event PFIZER’s forecastsincrease significantly, and the parties agree to work together to continuouslymonitor future requirements and the production capabilities of COMPANY toassure one hundred percent (100%) timely manufacture and delivery of Product(s)to PFIZER, on the specified date as set out on the purchase order, is achieved.

 

3.4           Forecasts.

 

***

 

3.5           FirmOrders; Changes to Firm Orders.

 

a)             ***

 

(b)           ***

 

3.6           Reports.

 

(a)           MonthlyUsage Reports: COMPANY shall provide a written report from COMPANY’s SAPinventory system on a monthly basis to PFIZER detailing actual consumption ofPFIZER supplied Raw Materials and Packaging Materials and a detailed quarterlyreconciliation.

 

(b)           Shipment:  On the date of each shipment of Product(s),COMPANY shall submit to PFIZER, via email a report to Supply Chain and theDistribution Centre detailing such information as required in an Addendum inaccordance with Schedule “B” for all Product(s) and more specifically forPolymyxin.

 

3.7           ShippingInstructions/Risk of Loss and Shelf Life.

 

(a)         COMPANYshall ship Product(s) ordered by PFIZER pursuant to Section 3.5, and anyProduct(s) samples requested by PFIZER pursuant to Section 3.11 hereof, ineach case, in accordance with this Section 3.7. COMPANY shall includecertificates of compliance and/or certificates of analysis with all shipmentsof Product(s). The Price 

 

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reflects shipping terms of FOB the Facility (COMPANY’sloading dock) to PFIZER’s designated carrier.

 

(b)           Upon loading Product(s)COMPANY shall ensure that PFIZER’s designated carrier confirms the count andsigns off on the amount of Product(s) being loaded onto the carrier.

 

(c)           Risk of loss and damageto the Product(s) shall pass to PFIZER when the Product(s) is delivered to aPFIZER facility or a PFIZER designated carrier FOB. COMPANY shall coordinatewith PFIZER for the shipment of the Product(s) with a carrier from COMPANY’sFacility to PFIZER’s designated facilities in accordance with shipmentinstructions provided by PFIZER in the Addendum. COMPANY will schedule freightpick up, load the carrier’s trailer and complete documentation all inaccordance with PFIZER’s requirements. See Schedule “D” for approvedcarriers.

 

(d)           Unless otherwisespecified in writing, COMPANY agrees to deliver Products to PFIZER within ***of date of manufacture. PFIZER reserves the right not to accept any Product withless than a remaining shelf life of *** for Products with a minimum of ***shelf life and *** for Products with a minimum of *** shelf life.

 

(e)           Notwithstanding the generality of theforegoing, the above requirement for delivery within *** of the date ofmanufacture shall not apply (i) to those Products for which the COMPANYonly provides packaging services to PFIZER (ie at the date of this Agreementthe bulk *** which is used for the ***); (ii) for those Products which arethe object of Validation/Stability batches; or (iii) those Products whichare subject to an investigation report which ultimately confirms the viabilityof the Product.

 

3.8           StandardForms.

 

In ordering anddelivering the Product(s), PFIZER and COMPANY may employ their standardforms, but nothing in those forms shall be construed to modify, amend orsupplement the terms of this Agreement and any Addendum and, in the case of anyconflict herewith, this Agreement and any Addendum shall prevail.

 

3.9           Procurementand Approval of Product Materials.

 

Subject to Section 3.5,COMPANY shall order sufficient quantities of all Product Materials to enableCOMPANY to manufacture, and to deliver, the Product(s) in accordance withPFIZER’s delivery requirements, as communicated pursuant to Section 3.5All Product Materials used in the manufacture of the Product(s) and thesupplier(s) thereof must be approved in advance in writing by PFIZER whichshall not be unreasonably withheld or delayed. COMPANY may not substituteor otherwise replace any ingredient, Raw Material, Packaging Material and/orany supplier thereof without the prior written consent of PFIZER. COMPANYagrees to provide PFIZER, on a timely basis, all information that PFIZER may reasonablyrequest in order to comply with internal PFIZER procedures regarding approvalof a change in Product Material and/or 

 

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any supplier thereof. Inthe event PFIZER designates certain suppliers, COMPANY shall obtain materialsfrom such suppliers. The costs of (a) such Product Materials and (b) themanagement and procurement of such Product Materials shall be included in thePrice in accordance with the terms of Section 4.1 hereof. PFIZER may chooseto, at its own expense, or for a cost, supply COMPANY with sufficientquantities of Product Materials as described in Schedule “E” attachedhereto as may be amended from time to time, needed for the manufacture ofthe Product(s) specified in the forecasts and Purchase Orders in order to meetPFIZER’s requirements for commercial and/or developmental quantities ofProduct(s) in finished dosage form. At PFIZER’s election, the Raw Materials may bedelivered directly from PFIZER’s vendor to COMPANY at the vendor’s or PFIZER’sexpense. PFIZER or its vendor shall supply COMPANY with a copy of theCertificate of Analysis for the Raw Materials no later than the date ofdelivery of the Raw Materials to COMPANY. At PFIZER’s option, PFIZER may electto supply COMPANY with any, Raw Materials and/or Packaging Materials for theProduct(s). In the event PFIZER elects to do so, PFIZER shall notify COMPANYand COMPANY shall decrease the Price to reflect the reduction in the cost ofthe Product(s) associated with such Raw Materials and/or Packaging Materials. Inaddition, such PFIZER supplied Raw Materials and/or Packaging Materials shallbe the sole property of PFIZER and shall be appropriately handled and stored byCOMPANY at no additional cost. PFIZER supplied Raw Materials and/or PackagingMaterials shall be held in accordance with PFIZER Specifications as set out inthe Quality Agreement. Where PFIZER charges COMPANY for the provision of RawMaterials and/or Packaging Materials, the cost of such Product Materials shallbe included in the Price of the Products in accordance with the terms of Section 4hereof.

 

3.10         NoThird Party Conflicts.

 

COMPANY hereby agreesthat it shall use commercially reasonable efforts to meet the requirements setforth by PFIZER in its forecasts for the supply of Product(s) hereunder. COMPANYfurther agrees that it shall not manufacture, package or process Product(s) foritself or for a third party where to do so will, as a consequence, eitherknowingly delay delivery of PFIZER’s requirements of Product(s) (including anyincreases in PFIZER’s delivery requirements thereof pursuant to the terms of Section 3.5)or violate COMPANY’S obligations pursuant to Section 15 hereof.

 

3.11         ProductSamples.

 

COMPANY shall providePFIZER (or any such other Person as PFIZER shall designate in writing) withrepresentative lot samples of each production batch of Product(s) promptly uponrequest. PFIZER shall be entitled to review, upon reasonable prior writtennotice, all manufacturing records relating to such samples including allanalytical procedures and cleaning validation relating to the equipment used inconnection with the manufacture of the samples. Such Product(s) samples shallbe shipped to PFIZER (or such other Person as PFIZER shall designate inwriting) in accordance with the provisions set forth in Section 3.6 hereof,or as otherwise instructed 

 

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by PFIZER. PFIZER shallpay for such samples at the Price, when invoiced, in accordance with Section 4.4hereof.

 

3.12         AlternativeSupply.

 

COMPANYshall supply PFIZER Product(s) in the Territory in accordance with the terms ofthis Agreement and any Addendum. Nothing in this Agreement or any Addendumshall prevent PFIZER or any of its Affiliates from manufacturing Product(s), orhaving Product(s) manufactured, in amounts in addition to the orders forProduct(s) placed with COMPANY in accordance with this Agreement.

 

a)             In theevent that at any time during the Initial or Extended Term (i) COMPANY is, oranticipates it shall be, unable or unwilling at any time to fill the totalmonthly volume of any Product(s) set forth in PFIZER’s forecasts, as a resultof an event of Force Majeure, or for any other reason, or (ii) anyProduct(s) does not meet or comply with the Specifications as a result ofCOMPANY’s negligence or willful misconduct for a period of at least one (1) monthand COMPANY is not able to remedy such noncompliance within an additional one (1) monthperiod, PFIZER may, in addition to any other rights or remedies hereunder andat its option, either purchase from a third party or manufacture and/or packagefor itself quantities of such Product(s) sufficient to replace any quantitiesof Product(s) which COMPANY is unable or unwilling to supply. COMPANY shallprovide commercially reasonable assistance to PFIZER in arranging for suchalternative suppliers and PFIZER agrees to consider alternative suppliersproposed by COMPANY. COMPANY shall cooperate with, and supply know-how andreasonable technical assistance, including technical personnel, at COMPANY’sreasonable expense, to PFIZER and the alternative supplier and shall assist inthe transfer of know-how to such supplier or PFIZER, and PFIZER shall havecomplete access to the know-how. COMPANY shall provide to PFIZER or itsdesignee (at PFIZER’s option), at COMPANY’s cost, all Packaging Materials, RawMaterials, and PFIZER Equipment, provided or purchased by PFIZER and in thepossession of COMPANY. PFIZER shall require any such alternative supplier withaccess to the know-how to enter into a confidentiality agreement with respectto such know-how.

 

b)            Inthe event that PFIZER shall incur any Losses (including any increase in pricerequired to be paid by PFIZER to an alternative supplier over the thenapplicable price for the relevant Product(s) hereunder) as a result of any failureof COMPANY to supply Product(s) hereunder in accordance with the terms of thisAgreement and any Addendum, in addition to any other remedies available toPFIZER, such Losses may be offset by PFIZER against future payments toCOMPANY hereunder except in the case where PFIZER is directly responsible forsuch delay or failure to supply Product Material.

 

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SECTION 4. PRICE; PAYMENT; PRICE ADJUSTMENTS; TAXES

 

4.1           PurchasePrice.

 

***

 

4.2           Changesin Price

 

***

 

(i)            ***

 

(ii)           ***

 

4.3           CostImprovements.

 

***

 

4.4           PriceAdjustment Due to Significant Material Cost Change.

 

***

 

4.5           Invoices.

 

***

 

4.6           Taxes.

 

***

 

## **4.7**           Provisionof Similar Products.

## ** **

## *******

## ** **

SECTION 5.MANUFACTURING STANDARDS AND QUALITY ASSURANCE.

 

5.1           ManufacturingStandards.

 

a)             COMPANYshall manufacture, and supply, the Product(s) (including disposing of all Wasteand other materials) strictly in accordance with the Specifications, applicableLaws, the Quality Agreement and such quality assurance, trademark usage andother requirements as may be instructed by PFIZER.

 

b)            COMPANYagrees to work with PFIZER to attain and agree upon performance metrics in thearea of quality and service for all Facilities. (i) Delivery Metrics = ***of the quantity orders on the specified dates set out on the Purchase Order. (ii) QualityPerformance = number of recalls; number of rejected batches; number ofdeviations (need to determine if failure is due to a COMPANY issue or a PFIZERissue).

 

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5.2           Modificationsin Specifications.

 

(a)           COMPANYwill not make any changes to its process, Raw Materials, supply sources,manufacturing locations or Facilities (where to do so would impact theProduct(s)) for PFIZER without prior written consent of PFIZER which shall notbe unreasonably withheld or delayed. This includes any changes made that may neednotification to regulatory authorities by PFIZER. Any proposed changes thatcould fall into the categories above, will be discussed with PFIZER.

 

(b)           Inthe event that the Specifications are proposed to be modified, the partyseeking to make such modification shall provide written notice to the otherparty to this Agreement or any Addendum as far in advance as is practicable priorto the proposed effectiveness of such modification, and the parties shalljointly agree on whether and when to implement such modification. To the extentthat such modification results in an increase or decrease in the cost ofmanufacturing and/or packaging the Product(s), the parties shall jointlyexamine and mutually agree upon the consequences thereof and shall makeappropriate adjustments to the Price therefore. Each party shall promptlynotify the other of the date of implementation of any such modification andsuch other party shall use reasonable efforts to promptly acknowledge receiptof such notice and promptly provide a response.

 

5.3           PestControl.

 

Product(s) will bemanufactured in facilities with insect and rodent pest controls adequate to assureno contamination of Product(s). COMPANY’s pest control program will be detailedin a written procedure. Specifically, the pest control procedures willinclude:  Appropriate installation anduse of insectocutors and rodent traps applied in zones of defense againstinvasion for the Facility. At least monthly thorough cleaning of the facility,prohibition of food and drink in production areas, protection of Product(s)from the environment, storage of Product Materials and finished products nocloser than twelve (12) inches from any outside walls, monitoring of flying andcrawling pests, and logs detailing findings and actions taken. The logs will bemade available to PFIZER upon request. All windows in the production buildings,including office windows, must have screens or be permanently bolted closed.

 

Each of these items will be included in writtenoperating procedures, which have been signed by the senior manager of thefacilities involved. Any contamination of Product(s) from flying and crawlinginsects, rodents or other pests is unacceptable for pharmaceutical, animalhealth or consumer healthcare products. Failure to comply with theserequirements will be considered a material breach of the Agreement.

 

5.4           Storageand Handling.

 

COMPANY shall store allProduct Materials and finished product(s) in a clean, dry area, free frominsects and rodents, in a manner to prevent entry of foreign materials. 

 

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Storage and handling ofall Product Materials and finished product(s) shall be strictly in accordancewith the provisions of all applicable Laws, the Quality Agreement, theSpecifications and any written instructions issued by PFIZER. Raw Materialsutilized in connection with the manufacture of the Product(s) shall be used byCOMPANY on a first in, first out basis and shall not be used by COMPANY beyondthe expiration date or the retest date, whichever date is the earlier to occur,as required under applicable Laws, the terms of the Quality Agreement or as designatedor approved by PFIZER. COMPANY agrees to provide storage up to one month afterPFIZER release of the Product(s). COMPANY shall notify PFIZER of its need touse a third party warehouse for any Product(s) or materials, and any suchstorage at such third party warehouse shall be subject to prior writtenapproval by PFIZER, and shall be at the cost of the party requesting to usesuch third party warehouse. PFIZER shall have the right to audit any such thirdparty warehouse upon reasonable prior written notice and during normal businesshours. Where PFIZER requests COMPANY to store Product(s) for more than one (1) monthafter a Product is released to PFIZER, from COMPANY, COMPANY may chargePFIZER a reasonable amount per month for additional storage services.

 

5.5           Maintenanceof Facility, Equipment and Molds.

 

At COMPANY’s cost andexpense, COMPANY shall maintain all equipment, tooling and molds utilized inthe manufacture, packaging and supply of Product(s) hereunder in good operatingcondition and shall maintain its Facility and such equipment, tooling and moldsin accordance with, or in a manner that shall meet the requirements of (i) allapplicable Laws and (ii) all requirements set forth in the Specificationsand the Quality Agreement. In the event that COMPANY fails to, or anticipatesit will fail to, meet any of the foregoing requirements relating to themaintenance of its Facility or any equipment, tooling or molds utilized inconnection herewith, or in the event that COMPANY receives any notice from anyGovernmental Authority relating to its maintenance of, or failure to maintain,its Facility or any equipment, tooling or molds utilized in connectionherewith, for PFIZER Product(s), COMPANY, as the case may be, shallpromptly contact PFIZER (or such other department or person as PFIZER may direct),provide copies of such notice to PFIZER and, if such notice relatesspecifically to the Product(s), the parties will work together in good faith toaddress the problem.

 

5.6           Legaland Regulatory Filings and Requests.

 

COMPANY and PFIZER shallcooperate and be diligent in responding to all requests for information from,and in making all legally required filings with, Governmental Authoritieshaving jurisdiction to make such requests or require such filings. COMPANYshall (a) obtain and comply with all licenses, consents and permits, and (b) complywith all applicable Laws, which may from time to time be required byGovernmental Authorities with respect to its manufacturing and packagingprocesses, the Facility or otherwise to permit the performance of itsobligations hereunder.

 

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5.7.          Analysisof Materials.

 

Prior to use inproduction, COMPANY shall have shipments of Raw Materials analyzed for suchmatters as PFIZER may require in accordance with the Specifications,Quality Agreement, applicable Addenda and standard operating procedures, andCOMPANY shall ensure that all materials conform to the Specifications. COMPANYmay conduct such analyses internally or by an outside laboratory retainedby COMPANY and approved by PFIZER. For purposes of this Agreement, such testsshall be considered routine and shall be included in the Price of theProduct(s). All test results are to be documented in accordance with cGMP andavailable for inspection at PFIZER’s request.

 

5.8.          QualityTests and Checks.

 

COMPANYshall perform all bulk holding stability; manufacturing trials; validation(including, but not limited to, method, process and equipment cleaningvalidation); Raw Material testing; in-process and bulk finished product testsor checks required to assure the quality of the Product(s); and any tests orchecks required by the Specifications, the Quality Agreement, applicableAddendums or applicable Laws or as reasonably requested by PFIZER. For purposesof this Agreement, such tests and/or checks shall be performed by COMPANY ***. Alltests and test results shall be performed, documented *** by COMPANY inaccordance with the Specifications, the Quality Agreement, PFIZER’s instructionsand applicable Laws within *** of the date of manufacture of the Product(s). IfCOMPANY is unable to conduct finished Product(s) release testing in accordancewith agreed upon protocols and in a timely manner, COMPANY shall promptly havethe finished Product(s) release testing conducted by a third party determinedby COMPANY and agreed to by PFIZER *** for the time COMPANY is unable to perform theProduct(s) release testing. All validation protocols and reports are subject tothe prior approval of PFIZER. All technical documentation not presented inEnglish shall be translated into English within one Business Day ***. COMPANYshall review all production records and disposition of each batch of Product(s).If during testing or batch record review, the Product(s) is found not to be inaccordance with the Specifications or applicable Law, COMPANY shall investigatethe production of the Product(s) in a manner specified in writing by PFIZER. COMPANYwill audit each supplier providing Raw Materials in the manufacture of theProduct(s) according to procedures and requirements to be mutually agreed uponby the parties. PFIZER and COMPANY have entered or shall enter into a QualityAgreement, which further details of the quality assurance obligations and responsibilitiesof the parties with respect to the Product(s).

 

5.9.          Non-conformingProduct Materials.

 

If COMPANY uses anynon-conforming Product Materials, or if the Product(s) are not produced inaccordance with Specifications, COMPANY shall be responsible for all lossessuffered or incurred by PFIZER as a result of such use or non-conformance,including any expenses incurred by COMPANY or PFIZER arising out of any Recallof any affected Product(s) or other reasonably necessary corrective measurestaken with 

 

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respect thereto. COMPANYshall be responsible for pursuing all resolutions with the applicable supplierof non-complying Raw Materials and shall keep PFIZER advised of suchresolution.

 

5.10.        Non-complyingProduct(s).

 

COMPANY shall release noProduct(s) for shipment unless such Product(s) strictly comply with theSpecifications; any quality assurance requirements which have been notified inwriting by PFIZER, to the COMPANY; the Quality Agreement; and any otherapplicable provisions of any Addendum and all applicable Laws.

 

5.11.        Responsibilityfor Rejected and Non-Complying Product(s).

 

Product(s) which arerejected or non-compliant pursuant to Section 5.10 or 5.14(b) hereofshall be quarantined and shall be properly tagged and isolated and shall not bereleased without the prior written approval of PFIZER. COMPANY will promptlysubmit to PFIZER a joint report on the non-complying and/or rejectedProduct(s), including the investigation and testing done and the recommendeddisposition. PFIZER shall review such report and notify COMPANY that PFIZERrequests additional data approves the recommended disposition of the Product(s)or will otherwise direct COMPANY as to how the non-complying and rejected Product(s)should be disposed.

 

5.12.        Disposalof Rejected and Non-Complying Product(s) and Product Materials.

 

All Product(s) rejectedpursuant to Section 5.14(b) or for non-compliance pursuant to Section 5.10and all non-conforming Product Materials not able to be used in the manufactureof the Product(s) pursuant to Section 5.9 shall be removed (if applicable)and disposed of by COMPANY, as the case may be, in a manner consistentwith applicable Laws and as approved in advance by PFIZER (such disposal cost tobe at the expense of the party deemed to be responsible therefore pursuant tothe terms of Section 5.9, 5.10, 5.11 or 5.14(b), as the case may be)and all documentation relating to such disposition shall be made available toPFIZER upon request. PFIZER, at its discretion, may be present to witnessthe destruction of rejected or non-complying materials, Product(s) orProduct(s) in process. All printed materials must be defaced or destroyed onsite. No rejected or non-complying Product Materials, Product(s) or Product(s)in process shall be sold as salvage or for any other purpose by COMPANY ordesignees or agents of COMPANY without the prior written approval of PFIZER. UnlessPFIZER otherwise directs, COMPANY shall replace such rejected Product(s) orProduct Materials.

 

5.13.        Maintenanceand Retention of Records.

 

(a)           COMPANYshall maintain detailed records with respect to Product Materials usage andfinished Product(s) production, which records shall include production codedates, and COMPANY shall maintain detailed records with respect to shippinginformation relating to the Product(s), so that Product(s) can be easily tracedin case of a Recall or rejection of Product(s) or materials. Such records shallbe maintained 

 

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for at least one (1) yearbeyond the expiration date of the finished product lot, or as otherwiserequired by applicable law and in accordance with Section II of theQuality Agreement and any other reasonable instructions issued by PFIZER withrespect thereto. Such records shall be sufficient such that COMPANY shall undernormal circumstances be capable of responding to inquiries by PFIZER within one(1) Business Day of notification and shall be able to provide theproduction code date and the location of the Product(s) in question.

 

(b)           COMPANYshall provide to PFIZER an Annual Product Review, as defined herein and inaccordance with the Quality Agreement, including production records, controlcharts, trend analysis, consumer complaints, deviations and reworks, and anyother information PFIZER may reasonably request for purposes of preparingan annual report as required by cGMP with respect to the Product(s).

 

(c)           COMPANYshall provide to PFIZER on a monthly basis, or such other frequency as theparties may mutually agree, production data, including delivery dates,quantities delivered, control charts, trend analysis, consumer complaints,deviations and reworks, and any other information PFIZER may reasonablyrequest for purposes of preparing performance metrics.

 

5.14.        QuantitativeDefects; Rejection of Product(s); Replacement of Rejected Shipments.

 

(a)           PFIZERshall notify COMPANY in writing of any claim relating to Quantitative Defectsin shipments of the Product(s) within ninety (90) days following actual receiptof such shipments by PFIZER. COMPANY shall, at its own expense, provide PFIZERwith any missing quantities of such Product(s) promptly after receipt of noticefrom PFIZER, and shall use commercially reasonable efforts to replace missingquantities not later than thirty (30) days following receipt of notice unlessadditional time is required due to extraneous circumstances requiring a longerlead time for Raw Materials or Packaging Materials. PFIZER shall be obligatedto pay only for actual quantities of Product(s) delivered in the initialshipment (irrespective of the invoiced amount) in accordance with Section 4hereof and shall pay for any missing quantities subsequently delivered byCOMPANY to PFIZER within thirty (30) days of the date such invoice relating tothe delivery of such quantities is received by PFIZER.

 

(b)         Withinninety (90) days following receipt by PFIZER of any shipment of Product(s)hereunder, PFIZER shall have the right to give COMPANY notice of rejection ofany part of such shipment of Product(s) that fail to meet Specifications;provided, however, that there shall be no time restrictions applicable toPFIZER’s provision of notice of rejection of any shipments of Product(s) whereany of the following have occurred or are present:

 

(i)            latentdefects in the shipped Product(s);

 

(ii)           defectsdiscovered by PFIZER’s customers or the end-users of the Product(s);

 

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(iii)          breachby COMPANY of any of its representations, warranties or obligations hereunder.

 

c)             PFIZERmay return any shipments of Product(s) (or portions thereof) rejectedpursuant to this subsection (b) to COMPANY at COMPANY’s expense, andCOMPANY shall replace such rejected Product(s) as soon as practicable at noadditional charge to PFIZER, and in no case later than thirty (30) daysfollowing receipt of PFIZER’s notice of rejection with respect thereto unlessadditional time is required due to extraneous circumstances requiring a longerlead time for Raw Materials or Packaging Materials. In addition to any otherrights or remedies of PFIZER hereunder, PFIZER shall have the right to set offany refund relating to any such rejection of shipped Product(s) againstinvoices otherwise due or that become due to COMPANY. Except in the instancesset forth in clauses (i) and (ii) of this subsection (b),failure on the part of PFIZER to give timely notice of rejection shallmean acceptance by it of the shipment to which the notice of rejection wouldhave otherwise applied.

 

d)            Theprovisions of this Section 5.14 shall survive termination or expiration ofthis Agreement with respect to shipments of Product(s) manufactured by COMPANYthat are received or sold by PFIZER subsequent to the termination or expirationof this Agreement; provided, that subsequent to the termination or expirationof this Agreement, PFIZER, in lieu of having COMPANY replace such rejectedand/or missing quantities of Product(s), may elect in its sole discretionto have COMPANY reimburse PFIZER for the costs (including any applicablefreight charges) associated with the replacement of such rejected and/ormissing quantities of Product(s) by PFIZER or a third party selected by PFIZER.

 

5.15.        CustomerComplaints and Inquiries.

 

a)             SafetyRelated Complaints: COMPANY shall give PFIZER written notice within four (4) BusinessDays of initial receipt of any information it receives regarding the safety ofthe Product(s), including any confirmed or unconfirmed information on adverseevents possibly associated with the use of the Product(s). COMPANY shall notifyPFIZER of any complaint or investigation relating to the Product(s) promptlyupon receipt by COMPANY; provided, that, all complaints concerning suspected oractual Product(s) tampering, contamination or mix-up (e.g., wrong ingredients)shall be delivered to PFIZER within one (1) Business Day of receipt. COMPANYshall provide all assistance requested by PFIZER in investigating customercomplaints regarding the Product(s) (including testing of the Product(s) in accordancewith PFIZER’s specifications at COMPANY’s expense) that, in PFIZER’s reasonableopinion, are related to or arise from the manufacturing of such Product(s). PFIZERshall be responsible for responding to all customers’ complaints relating tothe Product(s) and the record keeping relating thereto. COMPANY and PFIZERshall also comply with the requirements set forth in the Quality Agreementrelating to the investigation of customer complaints.

 

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b)            Non-safetyrelated complaints: COMPANY shall provide all assistance requested by PFIZER ininvestigating non-safety related complaints regarding the Product(s). Responsesto non-safety complaints shall be made within two (2) weeks of receipt ofthe inquiry. PFIZER shall be responsible for responding to all customers’non-safety related inquiries and the record keeping relating thereto.

 

c)             Safetyrelated inquiries: COMPANY shall provide all assistance reasonably requested byPFIZER in investigating safety related customer inquiries regarding theProduct(s). Acknowledgement of safety related consumer inquiries from COMPANYis required within 24 hours of notification by PFIZER. Investigation andresponse to the safety related inquiry is required within one (1) week ofreceipt of the inquiry from COMPANY unless other timing has been mutuallyagreed to by PFIZER and COMPANY. Unless otherwise indicated on any Addendum,PFIZER shall be responsible for responding to all customers’ safety relatedinquiries and the record keeping relating thereto.

 

d)            Non-safetyrelated inquiries: COMPANY shall provide all assistance requested by PFIZER ininvestigating non-safety related customer inquiries regarding the Product(s). Responsesto non-safety consumer inquiries shall be made within two (2) weeks ofreceipt of the inquiry. PFIZER shall be responsible for responding to allcustomers’ non-safety related inquiries and the record keeping relatingthereto.

 

5.16.        GovernmentInspections, Seizures and Recalls.

 

a)             IfHealth Canada or any other Governmental Authority conducts an inspection atCOMPANY’s Facility, seizes any Product(s) and/or Product Materials, requests aRecall of any Product(s), or otherwise notifies COMPANY of any violation orpotential violation of any applicable Law, PFIZER shall be notifiedimmediately, and COMPANY shall take such actions as may be required underthe Specifications or instructed by PFIZER. As applicable, COMPANY shallpromptly send any reports relating to such inspections, Recalls or violationsor potential violations of Law to PFIZER. In the event that any suchGovernmental Authority requests, but does not seize, the Product(s) inconnection with any such inspection, COMPANY, as the case may be (i) shallpromptly notify PFIZER of such request, (ii) if possible, shall satisfysuch request only after receiving PFIZER’s approval, (iii) shall followany reasonable procedures instructed by PFIZER in responding to such requestand (iv) shall promptly send any samples of the Product(s) requested bythe authority to PFIZER.

 

b)            Product(s)Recall. In the event (i) any national government authority or otherregulatory agency issues a request, directive or order that the Product(s) berecalled, or (ii) a court of competent jurisdiction orders such a recall,or (iii) PFIZER reasonably determines after consultation with COMPANY thatthe Product(s) should be recalled because the Product(s) do not conform tothe Specifications, or (iv) PFIZER reasonably determines that theProduct(s) should be recalled for any reason, the parties shall take allappropriate corrective actions. In the event that such recall results from thebreach of COMPANY’s express warranty under Section 6 of this Agreement,COMPANY shall 

 

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reimburse PFIZER for the Total Cost of the Product(s)to include any and all materials supplied by PFIZER, and shall be responsiblefor all the expense of recalling the Product(s) (i.e., shipping charges,man-hours spent arranging and coordinating recall). PFIZER shall also includein recall costs, all costs associated with the distribution of replacementProduct(s).

 

c)             RecallAdministration and Product(s) Returns. PFIZER will be responsible for allreturns and all aspects of any recall except as provided above. Procedures forhandling returns will be covered by communications from PFIZER to COMPANY. PFIZERwill reimburse COMPANY for any and all expenses incurred by COMPANY inprocessing and/or disposing of any returns unless such returns are deemed to bethe responsibility of COMPANY in accordance with above.

 

5.17.        QualityAgreement.

 

Theparties agree to be bound by the Quality Agreement attached hereto asAttachment B. In the event there is a discrepancy between the terms of theQuality Agreement and the other terms of this Agreement or any Addendum, theterms of the Quality Agreement shall govern.

 

5.18.        Facility Inspections and Audits

 

COMPANY shall give access to PFIZER for purposes ofPFIZER auditing its Facilities. PFIZER will provide COMPANY a minimum of thirty(30) days’ written notice of its intent to audit, however PFIZER shall beprovided immediate access to audit for causes that the parties mutually agreerequire immediate attention. COMPANY shall permit a reasonable number of PFIZER’semployees to observe, review and audit the operations at the Facility relatedto the manufacture of the Product(s), including manufacturing and packaging,quality control and quality assurance (including laboratory areas relatedthereto), pack out and shipping, and environmental, health and safety, duringnormal business hours. COMPANY agrees to correct any deficiencies identified byPFIZER in such audits in a mutually agreed upon timeframe.

 

PFIZERwill use reasonable efforts to schedule such audit(s) with COMPANY so as notto coincide with COMPANY’s own audit(s).

 

5.19.        Auditof Financial Books and Inspections.

 

PFIZERand in the case of clause (a), its outside accountants, shall be permitted,during regular business hours and on reasonable prior written notice, to (a) auditthat portion of the financial books and records (in any media form) of COMPANYpertaining to the manufacture and supply of the Product(s) under this Agreementor any Addendum, and (b) physically inspect all Facilities. The outsideaccountants shall agree in writing not to disclose any confidential informationthey have access to during their audit and 

 

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shall only disclose to PFIZER such information as is necessary tocomply with this Section 5.19.

 

PFIZERwill use reasonable efforts to schedule such audit(s) with COMPANY so asnot to coincide with COMPANY’s own audit(s).

 

5.20.        ProductDiversion Issues.

 

COMPANY agrees toimmediately notify PFIZER if at any time it believes that any Product(s) hasbeen lost or stolen, or any Product(s) has been rendered unsaleable.

 

5.21         Waste Disposal.

 

COMPANY shall permit PFIZER’s employees and agents toaudit disposal sites for Waste and Hazardous Materials in accordance with theaudit rights granted by such disposal site, to COMPANY.

 

5.22         Machineability of Packaging Material.

 

Unlessotherwise indicated on an Addendum, PFIZER shall determine and be responsiblefor the text (including any logos or other graphics) for the Packaging Materialused in connection with Product(s). COMPANY shall be responsible for ensuringthat all Packaging Materials are accurate and consistent with PFIZER’sspecifications for such text or graphics including, but not limited to, suchmatters as placement, size and colors. If PFIZER or its designee provides theactual Packaging Material for the Product(s), COMPANY shall inspect suchPackaging Material before use to ensure that it is accurate and promptly notifyPFIZER if there are any errors or deficiencies in such provided Packaging Materials.If COMPANY provides the Packaging Material, then COMPANY shall be responsiblefor ensuring that all such Packaging Material conforms to PFIZER’sspecifications therefore. COMPANY shall also be responsible for ensuring thatall Packaging Material runs efficiently on its machinery.

 

5.23         Segregation of Restricted Compounds.

 

COMPANY shall not use any equipment, dedicated changeparts, molds or tooling that are used to manufacture Product(s) to manufactureproducts containing any of the following compounds: ***

 

5.24         Survival.

 

The obligations ofCOMPANY under Sections 5.11, 5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 5.18, 5.19,5.20 and 5.21 of this Agreement shall survive the expiration or termination ofthis Agreement and any Addendum until one (1) year after the expirationdate of the last batch of Product(s) manufactured hereunder.

 

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SECTION 6.  REPRESENTATIONS; WARRANTIES ANDCOVENANTS.

 

6.1           Representations,Warranties and Covenants of COMPANY.

 

COMPANY herebyrepresents, warrants and covenants to PFIZER as follows:

 

(a)           TheFacility and all equipment, tooling and molds utilized in the manufacture andsupply of Product(s) hereunder by COMPANY are, as of the date hereof, and shallcontinue during the Term of this Agreement and any Addendum to be maintained,in good operating condition. The manufacturing and storage operations utilizedin the production of Product(s) hereunder (including the Facility); theinstallation, operation and maintenance (and repair or replacement, if any) ofthe Facility and the equipment, tooling and molds utilized in connectionherewith; and the procedures and processes (including the installation,operation and performance qualifications and disposal of all Waste) carried outby COMPANY hereunder, have been conducted and carried out, as of the datehereof, and shall continue during the Term of this Agreement and any Addendumto be conducted and carried out, in material compliance with all applicableLaws, including cGMP and health and safety laws.

 

(b)           As of thedate hereof (i) COMPANY is, and during the Term of this Agreement and anyAddendum, COMPANY shall continue to be, in material compliance with allapplicable Laws, and (ii) COMPANY holds, and during the Term of thisAgreement and any Addendum shall continue to hold, all licenses, permits andsimilar governmental authorizations necessary or required for COMPANY toconduct its operations and business in the manner currently conducted and asotherwise contemplated herein.

 

(c)           The Product(s)furnished by COMPANY to PFIZER under this Agreement or any Addendum:

 

(i)            shall beof the quality specified in, and shall conform with, the Specifications,any other quality assurance requirements instructed by PFIZER, the QualityAgreement, the Addendum and all applicable Laws, and shall be manufactured,processed, stored and delivered in conformity with the Specifications, otherquality assurance requirements instructed by PFIZER, the Quality Agreement, theAddendum and all applicable Laws, and shall not contain any material whichmaterial has not been used, handled or stored in accordance with theSpecifications, any other agreed upon quality assurance requirements of PFIZERor the supplier of such material, the Quality Agreement, the Addendum and allapplicable Laws;

 

(ii)           shall notcontain any material that would cause the Product(s) to be adulterated;

 

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(iii)          shallbe free from defects in materials and workmanship; and

 

(iv)           shall, atthe time delivered, have a remaining shelf-life consistent with PFIZER’srequirements as such requirements may evolve over the Term of thisAgreement based upon stability testing and other scientific data and as perspecified in the Addendum.

 

(d)           TheIntellectual Property related to the Product(s), owned or controlled by COMPANYand its Affiliates includes all rights and licenses necessary for COMPANY tomanufacture and supply the Product(s) in accordance with the Specifications asof the date hereof and the manufacturing and use of the Intellectual Propertyowned or controlled by COMPANY and its Affiliates will not infringe theintellectual property rights of any third party.

 

(e)           COMPANY isaware of no patents or any other prior art that invalidates or would invalidateany of the patents included in the Intellectual Property related to theProduct(s), or prevent the issuance, in any country, of any of the patentapplications included in the Intellectual Property. To COMPANY’s knowledge,each patent included in the Intellectual Property was validly issued under thelaws of the country that issued it.

 

(f)            As of thedate hereof, neither COMPANY nor its Affiliates have received a written claimor threat of a claim that the Intellectual Property that is owned or controlledby COMPANY or any Affiliate of COMPANY infringes any third party’s intellectualproperty rights.

 

(g)           COMPANYhas the legal power, authority and right to supply, transfer and grant accessto its know-how pursuant to Section 3.12 hereof.

 

(h)           COMPANY:

 

(i)            is acorporation duly organized, validly existing and in good standing under thelaws of Canada;

 

(ii)           has thepower and authority to conduct its business as currently being conducted and ascontemplated herein;

 

(iii)          hasthe power and authority to make, deliver and perform its obligations underthis Agreement and any Addendum and has taken all necessary action to authorizethe execution, delivery and performance of this Agreement and any Addendum. Noconsent of authorization of, filing with or other act by or in respect of, anyGovernmental or Regulatory Authority or any other Person is or will be requiredin respect of COMPANY in connection with the execution, delivery, performance,validity or enforceability of this Agreement or any Addendum. These Agreementshave been duly executed and delivered on behalf of COMPANY and the respectiveAddenda. This Agreement constitutes the legal, valid 

 

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andbinding obligations of COMPANY enforceable against COMPANY in accordance withits terms; and

 

(iv)          theexecution, delivery and performance of this Agreement and any Addendum byCOMPANY will not violate any agreement or instrument to which COMPANY is aparty.

 

6.2           Representations,Warranties and Covenants of PFIZER.

 

PFIZER herebyrepresents, warrants, and covenants to COMPANY as follows:

 

(a)           it is notsubject to any legal, regulatory, contractual, or other restrictions whichmight enable another person or entity to claim any rights in or to theProduct(s) or any Information;

 

(b)           it is notaware of any adverse claim or threat of claim with respect to any of itsIntellectual Property that may be incorporated into the Product(s).

 

(c)           the use byCOMPANY or its Affiliates of the Intellectual Property, owned or controlled byPFIZER in the performance of COMPANY obligations hereunder, will not infringeon the Intellectual Property rights of any third party.

 

(d)           PFIZERwarrants to COMPANY that all artwork necessary for the procurement of printedmaterials by COMPANY for the packaging of each Product(s) shall comply with allapplicable legal requirements and contains all other information required bylaw. PFIZER warrants to COMPANY that all API supplied by PFIZER comply with theSpecifications and all relevant legal requirements. Should a failure tomaterially conform with such warranty occur prior to the delivery of anyProduct(s), COMPANY shall give PFIZER prompt written notice thereof, and PFIZERshall correct such non-conformity by replacing the non-conforming artwork ormaterial and by indemnifying COMPANY for all costs, losses, and expensesresulting from such non-conformity. COMPANY shall not be liable for delays indelivery of Product(s) where caused by PFIZER.

 

(e)           PFIZER:

 

(i)            is acorporation duly organized, validly existing and in good standing under thelaws of Canada;

 

(ii)           has thepower and authority to conduct its business as currently being conducted and ascontemplated herein;

 

(iii)          hasthe power and authority to make, deliver and perform its obligations underthis Agreement and any Addendum and has taken all necessary action to authorizethe execution, delivery and performance of this Agreement and any Addendum. Noconsent or authorization of, filing with or other act by or in respect of, any 

 

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Governmentalor Regulatory Authority or any other Person is or will be required in respectof PFIZER in connection with the execution, delivery, performance, validity orenforceability of this Agreement or any Addendum. This Agreement and anyAddendum and the respective Addenda have been duly executed and delivered onbehalf of PFIZER. This Agreement constitutes the legal, valid and bindingobligations of PFIZER enforceable against PFIZER in accordance with its terms;and

 

(iv)          theexecution, delivery and performance of this Agreement and any Addendum byPFIZER will not violate any agreement or instrument to which PFIZER is a party.

 

6.3.          Noticeof Material Events.

 

COMPANY hereby agrees topromptly notify PFIZER of any actual events that have or may be reasonablyexpected to have a material adverse effect on any Product(s) or on its abilityto manufacture or supply the Product(s) in accordance with the provisions setforth herein, including any labour difficulties, strikes, shortages inmaterials, plant closings, interruptions in activity and the like.

 

6.4.          Survival.

 

The representations,warranties and obligations of COMPANY and PFIZER under this Section 6shall survive termination or expiration of this Agreement and any Addenduminsofar as they are applicable to the requirements for the Product(s) up untilthe expiration date of the last batch of Product(s) manufactured hereunder.

 

SECTION 7. ENVIRONMENTAL REPRESENTATIONS, WARRANTIES AND COVENANTS.

 

7.1.          Compliancewith Environmental Laws.

 

COMPANY shall perform allof the services provided herein in compliance with all applicable EnvironmentalLaws and shall be solely responsible for all Environmental Losses related tothose services.

 

7.2.          Permits,Licenses and Authorization.

 

COMPANY shall be solelyresponsible for obtaining, and shall obtain, all necessary environmental orother licenses, registrations, certificates, approvals, authorizations orpermits required under Environmental Law and any private permissions, whetheroriginal documents or modifications to existing documents, which are necessaryto perform the services hereunder and shall bear all costs and expensesassociated therewith. COMPANY shall provide copies thereof to PFIZER uponrequest by PFIZER and shall operate in compliance therewith. COMPANY shallprovide

 

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PFIZER with immediate verbal notice, confirmedin writing within twenty-four (24) hours, in the event of revocation ormodification of such documents, or with regard to any other event or regulatoryaction or involvement such as an order or notice, which in materially adverselyimpacts COMPANY’s ability to provide services under this Agreement and anyAddendum.

 

7.3.          HazardousMaterials and Waste.

 

The generation,collection, storage, handling, transportation, movement, and Release of allHazardous Materials and Waste in connection with COMPANY’s, Affiliate ofCOMPANY or subcontractor of COMPANY’s provision of services hereunder, asapplicable, shall be the sole responsibility of COMPANY at it sole cost andexpense.

 

7.4.          Generationof Hazardous Wastes.

 

Without limiting otherlegally applicable requirements, COMPANY shall prepare, obtain, execute andmaintain, as the generator of Hazardous Waste, all registrations, notices,shipping documents and Hazardous Waste manifests required under EnvironmentalLaw and in accordance therewith.

 

7.5.          EnvironmentalWaste Diversion Issues.

 

COMPANY shall beresponsible for developing and implementing all procedures necessary to preventthe diversion of Product(s) from the waste stream, including the rendering ofthe Product(s) unsaleable.

 

7.6.          Healthand Safety Procedure.

 

COMPANY shall be solelyresponsible for implementing and maintaining health and safety procedures forCOMPANY’s testing, manufacturing and handling of the Raw Materials, HazardousMaterials, Waste and Product(s) as provided herein. Such procedures shallcomply with all applicable Environmental Laws. PFIZER shall have noresponsibility for developing, implementing or overseeing COMPANY’s health andsafety program.

 

7.7.          Training.

 

COMPANY shall educate and train all affected employeesand contractors regarding the potential hazards associated with the generationand handling of the Hazardous Materials, Waste and the COMPANY’s manufacturing,analyzing and handling of the Product(s) and the Raw Materials and PackagingMaterials, and on the proper use of engineering controls, process equipment andappropriate personal protective equipment. PFIZER shall have no responsibilityfor educating, training or ensuring knowledge of COMPANY’s employees orcontractors regarding the potential or actual hazards associated with theCOMPANY’s handling of any Hazardous Material or Waste, or on the analyzing,handling and manufacture of the Product(s), or on the proper

 

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use of engineeringcontrols, process equipment and appropriate personal protective equipment.

 

7.8           Environmentaland Health and Safety Reviews.

 

a)             IfPFIZER conducted a pre-contractual review of COMPANY’S environmental and healthand safety management practices, facility(ies), equipment, and operations, andconditioned its willingness to enter into the underlying Agreement upon COMPANY’swillingness to modify such, then COMPANY agrees to maintain any suchmodifications for the duration of this Agreement. COMPANY agrees thatimplementing and maintaining such modifications does not negate its status asan independent contractor; failure to do so shall be considered a materialbreach of this Agreement and any Addendum and grounds for termination upon thenumber of days specified for written notice in the Termination provision of theunderlying Agreement and any Addendum.

 

b)            PFIZERreserves the right to conduct, or cause to be conducted, reviews of COMPANY’Senvironmental and health and safety management practices, Facility, andoperations to determine if COMPANY is fulfilling its obligations under this Section 7.Such reviews may occur only during regular business hours and uponreasonable prior written notice.

 

c)             PFIZERshall, as soon as practicable, share its findings from such reviews withCOMPANY. COMPANY shall correct deficiencies identified by PFIZER as soon ascommercially reasonably possible, and at no expense to PFIZER. Deficiencieswhich must be corrected, may include non-compliance with applicable EnvironmentalLaws which pose significant threats to COMPANY’S ability to fulfill itsobligations to PFIZER under this Agreement or any Addendum, or significantthreats to health, safety, and the environment. COMPANY shall maintain suchchanges for the duration of the underlying Agreement. Failure to correct suchdeficiencies and maintain such corrections for the duration of the underlyingAgreement shall constitute a material breach of this Agreement and grounds fortermination upon 30 days written notice if reasonable steps undertaken tocorrect deficiencies have not been instituted.

 

d)            COMPANYacknowledges that it has no right to rely upon PFIZER’s reviews (or PFIZER’Selection not to perform such reviews) to determine the extent of itscompliance with applicable Environmental Laws. The performance of such a reviewdoes not, in any way, limit (ii) COMPANY’S obligation to indemnify PFIZERpursuant to Section 9 of this Agreement or any Addendum, PFIZER’S right toterminate this Agreement pursuant to Section 13 of this Agreement, or toseek any other remedy pursuant to this Agreement as a result of COMPANY’Sinability to fulfill its contractual obligations to PFIZER.

 

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7.9           Promptnotice to PFIZER of Material Environmental or Health and Safety adverse impactsupon COMPANY’S ability to perform.

 

**NotwithstandingCOMPANY’s obligation to provide environmental and health and safety informationto PFIZER upon request, as described in this Section 7 of this Agreement,COMPANY shall promptly provide notice to PFIZER in writing, within five (5) BusinessDays, in the event it discovers or undertakes any of the following:**

** **

**(i)**    COMPANY’s Material non-compliance with EnvironmentalLaws;

** **

**(ii)**   Any environmental condition or operating practicethat indicates, or may reasonably be believed to present a significantthreat to health, safety, or the environment (including but not limited tomajor incidents such as significant releases of Hazardous Materials to theenvironment);

** **

**Any environmentalcondition or operating practice that indicates or may reasonably bebelieved to present a significant threat to COMPANY’S ability to fulfill itsobligations to PFIZER under this Agreement.**

 

COMPANY representsand warrants that it has completely and accurately disclosed to PFIZER allreasonably relevant environmental and health and safety information, whether ornot specifically requested by PFIZER, during its pre-contract review of COMPANY’sFacility, operations, and environmental and health and safety program. COMPANYagrees to respond promptly to a request from PFIZER to provide informationrelated to environmental and health and safety management at the facility(ies)where COMPANY is performing under this Agreement or any Addendum. Such requestsfor information may include, but are not limited to: requests for copiesof permits, licenses, judicial and administrative orders, consent orders,reports of inspections conducted by a governmental authority, workplacechemical monitoring or emissions tests from workplaces and production unitscontemplated for or used to fulfill COMPANY’s obligations under this Agreementor any Addendum.

 

7.10.        Survival.

 

Therepresentations, warranties and obligations of COMPANY under this Section 7shall survive termination or expiration of this Agreement or any Addenduminsofar as they are applicable to the requirements for the Product(s) up untilthe expiration date of the last batch of each of the Product(s) manufacturedhereunder.

 

SECTION 8OWNERSHIP; TRADEMARKS; PROPRIETARY.

 

8.1.          PFIZER’sOwnership of Intellectual Property; PFIZER Technology and Information.

 

(a)           Itis agreed that PFIZER is the sole owner of the Product(s) and owns or hasrights to the Intellectual Property relating thereto except for patents, andknow-how,

 

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to the extent suchknow-how is owned or controlled as of the Effective Date of this Agreement orany Addendum by COMPANY and/or its respective Affiliates.

 

(b)           Ifany creative ideas, proprietary information, developments, inventions, orimprovements or modifications to the Product(s) or the Intellectual Propertyassociated with the Product(s) (“Improvements”) are developed under thisAgreement or any Addendum by PFIZER or COMPANY, either jointly or severally,and whether or not patentable, such Improvements shall be the exclusiveproperty of PFIZER and shall be held in confidence by COMPANY, as the case may be,for PFIZER’s sole benefit in the development and/or the operation ofmanufacturing processes with respect to the Product(s). COMPANY agrees topromptly disclose such Improvements to PFIZER and to receive the approval ofPFIZER prior to COMPANY’S use of any such Improvements whether relating to themanufacturing, processing and/or packaging of the Product(s) or use of theProduct(s) developed by it or its Affiliates. Any trademarks, trade names,brand names, patents, slogans, logos, copyrights, trade dress, know-how andgoodwill associated with the Product(s) shall be the sole and exclusive propertyof PFIZER. COMPANY shall not have any right or license to use any such rightsat any time before, during or after the Term of this Agreement or any Addendum,except as necessary for the manufacturing, processing and supplying ofProduct(s) for PFIZER hereunder. Any Intellectual Property or information ownedby PFIZER or provided by PFIZER to COMPANY in connection herewith shall not beused by COMPANY, or its Affiliates in the manufacture of any products otherthan the Product(s), or disclosed or made available to any customers ofCOMPANY, or its respective Affiliates, or other third parties without the priorwritten approval of PFIZER.

 

8.2.          Ownershipof Other Property.

 

It is agreed that PFIZERis the sole owner of any and all tools, specifications, blueprints and designssupplied or paid for by PFIZER, and COMPANY shall not use, transfer, loan orpublicize any of the above except as necessary for its performance under thisAgreement or any Addendum.

 

8.3.          LimitedRight to Use.

 

Nothing set forth inthis Agreement or any Addendum shall be construed to grant to COMPANY anytitle, right or interest in or to any trade secret, know-how, trademark, tradedress, trade name, brand name, copyright, patent or other proprietarytechnology owned by or licensed to PFIZER or any of its Affiliates. Anyunauthorized use of said trade secret, know-how, trademarks, trade dress, tradenames, brand names, copyrights, patents or other proprietary technology (unlessotherwise specified herein) shall constitute an infringement thereof and/orviolation of PFIZER’s rights. Use by COMPANY of copyrights, patents or otherproprietary technology owned by or licensed to PFIZER or any of its Affiliatesshall be limited exclusively to its performance of this Agreement or anyAddendum.

 

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8.4.          Survival.

 

The provisions ofSections 8.1, 8.2 and 8.3 shall survive the expiration or termination of thisAgreement or any Addendum.

 

SECTION 9. INDEMNIFICATION.

 

9.1.          Indemnificationof PFIZER.

 

COMPANY shall indemnify,defend and hold PFIZER, its Affiliates and their respective officers,directors, employees and agents (each, a “PFIZER Indemnified Party”) harmlessfrom and against any and all claims, liabilities, lawsuits, or governmentalaction, or Losses suffered, incurred or sustained by any PFIZER IndemnifiedParty, by reason of any Claim or Proceeding to the extent arising out of orresulting from (a) any breach of representations, warranties orobligations of COMPANY under this Agreement (including a breach that results ina Recall of the Product(s), or non-fulfillment of or failure to perform anycovenant or agreement made by COMPANY in this Agreement or any Addendum; (b) anyinjury to any Person or property or death occurring to any employees,subcontractors, agents of COMPANY, or any individuals on the premises ofCOMPANY; (c) any injury to any Person or property or death resulting fromthe possession, use or consumption by any Person of any Product(s) or samplesupplied by COMPANY under this Agreement or any Addendum if caused by COMPANY; (d) anynegligent act or omission on the part of COMPANY, Affiliates of COMPANY oremployees or agents of COMPANY, or its respective Affiliates; or (e) infringementof any third party’s Intellectual Property arising out of the unauthorizedmanufacture, use or sale of the Product(s) or samples. Notwithstanding theforegoing, it is understood and agreed that COMPANY shall not be liable forLosses to the extent such Losses are caused by any act or omission on the part ofPFIZER or the negligence, recklessness, willful misconduct or breach of any ofthe terms of this Agreement by PFIZER or the Pfizer Affiliate that executed theaffected Addendum.

 

9.2.          Indemnificationof COMPANY.

 

PFIZER shall indemnifyand hold COMPANY, its Affiliates and its respective officers, directors,employees and agents (each, a “COMPANY Indemnified Party”) harmless from andagainst any and all claims, liabilities, lawsuits, or governmental action, orLosses suffered, incurred or sustained by any COMPANY Indemnified Party, byreason of any Claim or Proceeding to the extent arising out of or resultingfrom any breach of PFIZER’s representations, warranties or obligations underthis Agreement or any Addendum, or non-fulfillment of or failure to perform anycovenant or agreement made by PFIZER in this Agreement or any Addendum. Notwithstandingthe foregoing, it is understood and agreed that PFIZER shall not be liable forLosses to the extent such Losses are caused by any act or omission on the part ofCOMPANY or the negligence, recklessness, willful misconduct or breach of any ofthe terms of this Agreement by COMPANY, or its respective Affiliates or agents.

 

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9.3.          Assertionof Claim.

 

In the event that anyClaim or Proceeding is asserted or imposed against any party hereto, and suchClaim or Proceeding involves a matter which is subject to a claim forindemnification under this Section 9, then such party (an “IndemnifiedParty”) shall promptly give written notice to the other party (the “IndemnifyingParty”) of such claim, Action or Proceeding, and such Indemnifying Party shallhave the right to join in the defense of said claim, Action or Proceeding, atsuch Indemnifying Party’s own cost and expense, and if the Indemnifying Partyagrees in writing to be bound by and to promptly pay the full amount of anyfinal judgment from which no further appeal may be taken and if theIndemnified Party is reasonably assured of the Indemnifying Party’s ability tosatisfy such agreement, then at the option of the Indemnifying Party, suchIndemnifying Party may take over the defense of such claim, Action orProceeding, except that, in such case, the Indemnified Party shall have theright to approve any attorney or counsel selected by the Indemnifying Party(which approval shall not be unreasonably delayed or withheld) and to join inthe defense of said claim, Action or Proceeding at its own cost and expense. Inno event shall COMPANY institute, settle or otherwise resolve any claim orpotential claim, Action or Proceeding relating to the Product(s) or anytrademarks, patents or other intellectual property of or licensed to PFIZERwithout the prior written consent of PFIZER.

 

9.4           Limitationon Liability.

 

No party to thisAgreement or any Addendum shall be liable to any other party for any indirect,special, consequential or punitive damages or lost profits arising out of orrelating to any of its obligations or duties under this Agreement or anyAddendum.

 

9.5.          Survival.

 

The provisions of this Section 9shall survive termination or expiration of this Agreement or any Addendum.

 

SECTION 10. INSURANCE.

 

10.1.        Coverage.

 

COMPANY shall, as of thedate hereof, obtain and keep in force throughout the Term of this Agreement orany Addendum and for a period of *** from the date of the last delivery ofProduct(s) to PFIZER hereunder, policies of insurance from carriers reasonablyacceptable to PFIZER providing coverage as specified herein. COMPANY shallrequire its subcontractors, to the extent possible hereunder, to provideadequate coverage and any deficiencies in the coverage or policy limits of saidsubcontractors will be the sole responsibility of COMPANY. The provisions ofthis Section 10.1 shall survive the expiration or termination of thisAgreement or any Addendum.

 

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**COMPANYshall maintain during the Term of this Agreement**or any Addendumor amendment or extensionall insurance normally associated withconducting business, such as, but not limited to: worker’s compensationinsurance, employer’s liability insurance, if applicable, comprehensiveliability insurance, comprehensive auto insurance, business interruptioninsurance and commercial blanket bond insurance.

** **

**COMPANYmust be in compliance with:**

** **

(i)    The statutorylimits for all claims under the applicable Federal or Provincial Workers’Compensation Acts or plan;

 

(ii)   VoluntaryCompensation insurance covering all employees not subject to the applicableFederal or Provincial Workers’ Compensation Acts or plan;

 

(iii)  CommercialGeneral Liability Insurance with the following limits and forms/endorsements;

 

Each Occurrence: ***

**Product(s)and Completed Operations Aggregate:   *****

** **

Occurrence form includingpremises and operations coverage, products and completed operations, broad form propertydamage, coverage for independent contractors, personal injury coverage,contractual liability limit.

 

(iv)  ComprehensiveAutomobile and Truck Liability Insurance if not already covered under COMPANY’sGeneral Liability Insurance:

 

*** combined single limit for bodily injury andproperty damage arising out of all owned, non-owned and hired vehicles. Thismust cover all owned and non-owned uninsured and under-insured motorists forautomotive and truck equipment used in the performance of the work under thisAgreement or any Addendum both on and off the worksite, and must include theloading and unloading of same; and

 

(v)   Umbrella (Excess)Liability Coverage (follow form) in an amount not less than *** per occurrenceand in the aggregate.

 

COMPANY will reimbursePFIZER for all costs incurred as a result of defective Product(s) supplied byCOMPANY as a result of COMPANY act, omission or error.

 

10.2         Certificatesof Insurance; Maintenance of Coverage.

 

Where applicable,COMPANY shall submit a certificate of such insurance (which shall include suchinformation as set forth in Section 10.2 to PFIZER for its approval as ofthe date hereof. If such certificate is not furnished within thirty (30) days,PFIZER shall notify COMPANY in writing and give the applicable party thirty(30) days to cure such breach. If such party (or parties, as the case may be)fails to provide the certificate

 

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during such thirty (30) day cure period, PFIZERmay, at its option, immediately terminate this Agreement or any Addendum.

 

SECTION 11. PFIZER SUPPLY OF MATERIALS (RAWMATERIALS, API OR PACKAGING)

 

11.1         Supplyof Materials.

 

As per section 3.9above, PFIZER may choose to, at its own expense, supply COMPANY withsufficient quantities of Product Materials as described in an Addendum, neededfor the manufacture of the Product(s) specified in the forecasts and PurchaseOrders in order to meet PFIZER’s requirements for commercial and/ordevelopmental quantities of Product(s) in finished dosage form. At PFIZER’selection, the Raw Materials may be delivered directly from PFIZER’s vendorto COMPANY at the vendor’s or PFIZER’s expense. PFIZER or its vendor shallsupply COMPANY with a copy of the certificate of analysis for the Raw Materialsno later than the date of delivery of the Raw Materials to COMPANY.

 

11.2         Testing.

 

COMPANY shall undertaketesting of each shipment of Raw Materials if required by the Addendum. If theRaw Materials do not meet the Specifications, COMPANY will immediately inform PFIZERand COMPANY shall be excused from its obligation to supply Product(s) to PFIZERuntil Raw Materials meeting the Specifications are delivered to COMPANY. Uponsuch delivery, COMPANY shall have sixty (60) days in which to supply Product(s)to PFIZER. To the extent COMPANY has existing stock of Raw Materials, whichconforms to the approved Specifications, nothing in the forgoing shall relieveCOMPANY of its obligation to supply Product(s) deriving from such conformingRaw Materials.

 

11.3         Titleand Risk of Loss.

 

(a)           Titleto the Raw Materials supplied by PFIZER shall remain with PFIZER; however ***. COMPANYshall not use Raw Materials supplied by PFIZER for any purposes other thanthose related to the manufacture of the Product(s) for sale pursuant hereto.

 

(b)           The riskof loss or damage to Raw Materials during the storage thereof by COMPANY shallbe ***. In the event of such loss or damage, ***.

 

(c)           COMPANYshall not be obligated to but may insure the Raw Materials and theProduct(s) while such are in COMPANY’s possession, and PFIZER shall cooperatewith COMPANY and its insurers in obtaining insurance coverage.

 

37

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11.4         Reimbursementfor Loss of Raw Materials.

 

COMPANY agrees toreimburse PFIZER for its out of pocket costs per batch pro-rated over theusable portion of the batch if applicable, for any loss of PFIZER supplied (i) RawMaterials; (ii) API; or (iii) Packaging Materials for each batch thatdoes not meet Specifications and therefore cannot be released, provided thatthe loss of such Raw Materials, API or Packaging Materials was caused by, a)the failure of COMPANY to comply with the terms and conditions of the Agreement(including, without limiting the foregoing, the failure to meet theSpecifications); b) the negligence of COMPANY; c) willful misconduct on the part of COMPANY; d) failure tomaintain the Facilities or equipment in a state necessary and capable of performingCOMPANY’s obligations under this Agreement; or e) unable to meet minimumestablished yields as specified in the Addendum. In addition to this payment,COMPANY will be responsible for all manufacturing costs incurred during themanufacture of the failed batch, pro-rated over the usable portion of the batchif applicable. COMPANY shall not be responsible for the above costs if loss ofRaw Materials, API or Packaging Materials was caused by incorrectSpecifications given to COMPANY by PFIZER or as a result of PFIZER’s delay togrant consent to changes sought in accordance with Section 5.2.

 

SECTION 12. CONFIDENTIAL INFORMATION.

 

12.1         ConfidentialInformation.

 

(a)           Inperforming the obligations under this Agreement or any Addendum, each partyshall come in contact with certain confidential and proprietary information ofthe other party (“Confidential Information”). Each party agrees that it will(and will cause each of its representatives, employees and agents to):

 

(i)            usesuch Confidential Information obtained from the other party hereunder only inconnection with the activities to be undertaken by each party as contemplatedhereunder;

 

(ii)           useits best efforts to restrict disclosure of such Confidential Information withinits own organization to those of its employees having a reasonable need toknow; and

 

(iii)          notdivulge to third parties, without the prior written consent of the other party,any Confidential Information obtained from the other party hereunder.

 

(b)           Theforegoing confidentiality obligations shall not apply if and to the extentthat:

 

38

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(i)            theConfidential Information is known to the receiving party prior to obtaining thesame from the disclosing party, as demonstrated by the receiving party’swritten records;

 

(ii)           theConfidential Information is, at the time of disclosure, in the public domain,or comes into the public domain without any fault of the receiving party or itsAffiliates;

 

(iii)          theConfidential Information is obtained by the receiving party from a third partywho is not obligated to keep the Information confidential;

 

(iv)          theConfidential Information is independently developed by the receiving partyand/or by any of its Affiliates, as demonstrated by the receiving party’swritten records; or

 

(v)           thedisclosure of the Confidential Information is required by Law or GovernmentalAuthority.

 

(c)           Uponexpiration or termination of this Agreement or any Addendum, each party shallreturn to the other party, or by mutual agreement, destroy all ConfidentialInformation received from the other party, save and except for one (1) copywhich shall be kept by the Legal Department of each respective party forarchival purposes.

 

(d)           Unlessrequired by Law, court or governmental order or decree, COMPANY agrees not touse or refer to PFIZER’s name, the name of PFIZER’s Affiliates or thisAgreement or any Addendum in any public statements, whether oral or written,including but not limited to, annual reports or shareholder reports, statementsto other customers or prospective customers or other communications, withoutPFIZER’s prior written consent which shall not be unreasonably withheld.

 

(e)           Theprovisions of this Section 12 shall survive the termination or expirationof this Agreement or any Addendum.

 

39

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SECTION 13.  TERM; TERMINATION.

 

13.1         Commencementand Termination of the Agreement.

 

ThisAgreement shall commence on the Effective Date and continue for three (3) years(“Initial Term”). Termination of this Agreement will result in the terminationof any Addendum which has been executed in the interim period.

 

13.2         InitialTerm; Term of an Addendum.

 

Unless terminated in accordance with the provisions ofthis Agreement, the Initial Term shall run concurrently with any Addendum. Followingthe Initial Term PFIZER may extend this Agreement and any Addendum forconsecutive one (1) year periods (“Extended Term”). PFIZER shall provideNotice prior to the expiration or renewal of the Initial Term or any ExtendedTerm. Such Notice shall be provided in writing one (1) year in advance ofsuch termination or extension. COMPANY may provide Notice to PFIZER toterminate the Initial Term of the Agreement or any Addendum or any ExtendedTerm by providing PFIZER with written notice of intent to terminate one (1) yearin advance of such termination. The Initial Term and all Extended Terms of anAddendum shall collectively be the “Term” of an Addendum. This Agreement andany Addendum may be terminated as follows:

 

13.3         Terminationby PFIZER.

 

 (a)          Immediatelyupon written notice to COMPANY if COMPANY makes an assignment for the benefitof its creditors, is adjudged bankrupt, becomes insolvent, ceases or threatensto cease to carry on business, files or consents to the filing of a petition inbankruptcy, seeks to take any advantage of any legislation relating toinsolvency, arrangement or relief of debtors, winds-up or liquidates or if anyreceiver, trustee, liquidator or similar officiate is appointed to COMPANY orany of its property; or

 

(b)           Subjectto subparagraph (d), upon a material breach of this Agreement or any Addendumby COMPANY, if COMPANY fails to cure such breach within thirty (30) days afterreceipt of written notice thereof; or

 

(c)           Uponwritten notice to COMPANY, with immediate effect, if in PFIZER’s reasonableopinion following an inspection pursuant to this Agreement or any Addendum, itis revealed that any Facility fails to comply with cGMP or other requirementsof applicable Law to such an extent that, in PFIZER’s reasonable opinion,COMPANY cannot perform its obligations under this Agreement or anyAddendum; or

 

(d)           Uponwritten notice to COMPANY, with immediate effect, (i) in the event of thedirect or indirect change in ownership or control or corporate reorganizationof

 

40

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COMPANY, which results ina new party or group assuming control of COMPANY, or (ii) if at any time during the Initial or ExtendedTerm of this Agreement or any Addendum, COMPANY becomes an Affiliate of acompetitor of PFIZER, which competitor is a company, supplier and/ordistributor of products competitive with the Product(s). For purposes of thissubsection (d) the term “control” means the possession of the powerto direct or cause the direction of the management and policies of a Personwhether through ownership of voting securities, by contract or otherwise; or

 

(e)           Uponat least one hundred and eighty (180) days prior written notice to COMPANY inthe event that any Product(s) is the subject of a final executed sale agreementbetween PFIZER and a third party or is discontinued by PFIZER for any reason;provided that PFIZER shall comply with the provisions of Section 3.5(b) hereofwith respect to such Product(s); or

 

**(f)**            Upon atleast one (1) year prior written notice to COMPANY for any reason otherthan as set out in (a) to (e) above; provided that, PFIZER shallcompensate COMPANY for Product Materials pursuant to Section 13.5(c) below;or

** **

(g)           Inwhole or in part upon any of the events described in this Agreement or anyAddendum which give rise to a party’s right to terminate, including pursuant toSections 10.3 or 14.1 of this Agreement.

 

13.4         Terminationby COMPANY.

 

(a) Immediately,upon written notice to PFIZER, if PFIZER makes an assignment for the benefit ofits creditors, is adjudged bankrupt, becomes insolvent, ceases or threatens tocease to carry on business, files or consents to the filing of a petition inbankruptcy, seeks to take any advantage of any legislation relating toinsolvency, arrangement or relief of debtors, winds-up or liquidates or if anyreceiver, trustee, liquidator or similar officiate is appointed to PFIZER orany of its property; or

 

(b) Upona material breach of this Agreement by PFIZER if PFIZER fails to cure suchbreach within thirty (30) days after receipt of written notice thereof.

 

13.5         Effectof Termination.

 

(a)           Upona termination pursuant to the provisions of subparagraphs (a), (b), (c), (d),or (g) of Section 13.3, COMPANY shall cooperate with, and grant aperpetual royalty-free license to and/or supply to PFIZER and any alternativesupplier, all necessary Intellectual Property of COMPANY for the manufactureand packaging of the Product(s) at the expense of COMPANY, and COMPANY shall providereasonable assistance (including, but not limited to its personnel) in thetransfer of such Intellectual Property to PFIZER and such alternative supplier,and PFIZER shall have complete access to the COMPANY’S Intellectual Propertyrelating to such Product(s) as long as PFIZER continues to sell the Product(s).

 

41

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(b)           Terminationof this Agreement and/or any Addendum shall not affect any obligation to paymoney due hereunder, indemnify, or maintain confidentiality, which either partyhereto may have incurred during the Initial or any Extended Term hereof. Terminationpursuant to this Section 13 shall be in addition to, and not in place of,a party’s other rights and causes of action which were in existence prior tosuch termination.

 

(c)           Withina reasonable time after PFIZER gives notice of termination pursuant to theprovisions of subparagraphs (e) or (f) of Section 13.3, PFIZERagrees to have discussions with COMPANY regarding mitigation of unrecoverablelosses resulting from amounts paid toward the purchase price of new equipmentand/or Product Materials specific to PFIZER.

 

13.6         UnusedMaterials.

 

Within ninety (90) daysof the effective date of the expiration or termination of this Agreement or anyAddendum by PFIZER for any reason, PFIZER may, at its option, purchase at costany work in process, Raw Materials, or Packaging Materials and any othermaterial that COMPANY has purchased exclusively for PFIZER in accordance withthis Agreement or any Addendum for the production of the Product(s)  (“Product Materials”). In the event of thetermination of this Agreement or any Addendum by PFIZER in accordance withSections 13.3(f) or the termination of this Agreement by COMPANY inaccordance with Section 13.4, PFIZER shall purchase at cost all ProductMaterials purchased in accordance with PFIZER’s Firm Orders submitted pursuantto Section 3.5(a) (subject to any adjustments made to Firm Orderpursuant to Section 3.5(b); provided, however, that PFIZER shall not beobligated to purchase Product Materials purchased to manufacture Product(s)after the Firm Order Period; and provided further, COMPANY uses its reasonablecommercial efforts to exhaust existing stocks of such Product Materials priorto the date of termination unless the parties mutually agree otherwise inwriting. In the event of the termination or expiration of this Agreement or anyAddendum for any other reason, PFIZER shall have no obligation to purchase anyProduct Materials. Upon the expiration or termination of this Agreement for anyreason, PFIZER may also, at its option, place orders with COMPANY for themanufacture and packaging of additional products in order to exhaust existingstocks of Product Materials and shall pay for such Product(s) in accordancewith Section 4.1. Any Product Materials that are not purchased by PFIZERpursuant to this Section 13.6 shall be disposed of or destroyed inaccordance with PFIZER’s instructions, which costs shall be borne by COMPANY,except in the event this Agreement is terminated by PFIZER in accordance withSections 13.3(f) or by COMPANY in accordance with Section 13.4, inwhich case, such costs shall be borne by PFIZER.

 

13.7         Returnof Materials, etc. Supplied by PFIZER.

 

(a)           Uponthe effective date of expiration or termination of this Agreement or anyAddendum for any reason whatsoever, COMPANY shall immediately deliver to PFIZERall Specifications (and copies thereof), artwork, labels, bottles, all premiumsand

 

42

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PFIZER supplied RawMaterials and Packaging Materials and those purchased by PFIZER and Equipmentprovided by, or purchased on behalf of, PFIZER. COMPANY shall maintainownership of all other equipment utilized in connection with the manufactureand packaging of the Product(s). COMPANY will remove all PFIZER Equipment fromthe Facility and have such PFIZER Equipment on its dock ready for PFIZER totransport. All delivery, removal and transportation costs incurred inconnection with this Section 13.7 shall be borne by PFIZER except in theevent PFIZER terminates this Agreement pursuant to Section 13.3 (a), (b),(c), (d) or (g), in which case all such reasonable costs shall be borne byCOMPANY.

 

(b)           Uponthe effective date of expiration or termination of this Agreement or anyAddendum for any reason whatsoever, COMPANY shall also deliver to PFIZER allProduct(s) manufactured hereunder and shall invoice PFIZER in accordance withthe terms of Section 4.1. Any Product(s) quarantined at the time ofexpiration or termination of this Agreement or any Addendum shall be disposedof or destroyed in accordance with PFIZER’s written instructions. Subsequent tothe expiration or termination of this Agreement or any Addendum, the partiesshall continue to be responsible for rejected and non-complying Product(s) andProduct Materials in accordance with the terms of Section 5.12.

 

SECTION 14. FORCE MAJEURE.

 

14.1         Force Majeure.

 

Performance under thisAgreement or any Addendum shall be excused to the extent prevented or delayedby fire, flood, explosion, hydro electric power failures, terrorist actions,governmental acts or regulations, war, any act of God, or by any other similarcircumstances of any character reasonably beyond the control of the party soexcused. The party affected shall promptly notify in writing the non-affectedparty or parties of the event of force majeure and the probable duration of thedelay. Any delay caused by an event of force majeure shall toll the term ofthis Agreement or any Addendum, which shall be extended by the length thereof. Inthe event a force majeure prevents performance by COMPANY for more than one (1) month,PFIZER shall have the right to terminate this Agreement or any Addendum.

 

SECTION 15EXCLUSIVITY.

 

15.1         Manufactureof Competing Product.

 

***

 

43

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SECTION 16.MISCELLANEOUS.

 

16.1         Relationshipof the Parties.

 

The parties shall bedeemed independent contractors with respect to the terms and provisions of thisAgreement and any Addendum and shall not in any respect act as an agent oremployee of the other party. All persons employed by COMPANY in connection withthe manufacture and supply of the Product(s) to PFIZER shall be employees,agents or contractors of COMPANY. Under no circumstances shall employees oragents of COMPANY be deemed to be employees or agents of PFIZER.

 

16.2         Successorsand Assigns; Subcontracting.

 

COMPANY shall not,without the prior written consent of PFIZER, delegate, transfer, convey, assignor pledge this Agreement or any Addendum, in whole or part, or any of itsrights or obligations under this Agreement or any Addendum to any other Person.COMPANY shall not subcontract any obligation or duty owed under this Agreementor any Addendum without the prior written consent of PFIZER. This Agreement andany Addendum shall be binding upon and inure to the benefit of the partieshereto, and subject to the terms of this Section 16.2, its respectivesuccessors, legal representatives and permitted assigns. Any assignment orsubcontract in contravention of this Section 16.2 shall be ineffective andconsidered null and void.

 

16.3         Notice.

 

All notices, requests,demands or other communications to or upon the parties hereto shall be inwriting and, unless otherwise specified herein, deemed to have been given ormade when deposited in the mails, registered mail or certified, return receiptrequested, postage prepaid, or overnight courier or by facsimile transmission,the receipt of which is confirmed by telephone, addressed to the appropriateparty at the following address (or to such other person or address as isspecified elsewhere in this Agreement for specific purposes):

 

If toPFIZER:

PfizerCanada Inc.

365Madawaska Blvd.

Arnprior,Ontario  K7S 3K2

Attention: Manager, Quality Operations

FacsimileNo.:  613-623-1329

 

With acopy to:

 

PfizerInc.

100Route 206 North, P.O. Box 800

Peapack,New Jersey  U.S.A. 07977

 

44

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Attention: Director, Contract Manufacturing, Latin America/Canada

FacsimileNo.:  908-901-1745

 

Andwith a copy to:

 

PfizerCanada Inc., Pfizer Consumer Healthcare division

88McNabb Street

Markham,ON L3R 5L2

Attention: Senior Legal Counsel

FacsimileNo.:  905-968-2008

 

If toCOMPANY:

DRAXISPharma, a Division of DRAXIS Specialty Pharmaceuticals Inc.

 

16751Trans Canada Highway

Kirkland,Quebec  H9H 4J4

Attention: President

FacsimileNo.:  514-694-3841

 

with acopy to:

 

DRAXISHealth Inc.

16751Trans Canada Highway

Kirkland,Quebec   H9H 4J4

Attention:  General Counsel & Secretary

FacsimileNo.:  514-630-7159

 

The above addresses for receipt of notice may bechanged by any party by notice, given as provided herein.

 

16.4         EntireAgreement.

 

This Agreement,including all Addendum and Attachments attached hereto and made a part hereofcontain the entire understanding of the parties, superseding in all respectsany and all prior oral or written agreements or understandings pertaining tothe subject matter hereof. This Agreement, or any Addendum, may be amendedor modified only by written agreement executed by the parties hereto.

 

16.5         Severability.

 

If any provision of thisAgreement or any Addendum is held to be illegal, invalid or unenforceable underany applicable Law, and if the rights or obligations of any party hereto underthis Agreement or any Addendum will not be materially and adversely affectedthereby, (a) such provision will be fully severable, (b) thisAgreement or any Addendum will be construed and enforced as if such illegal,invalid or unenforceable provision had never comprised a part hereof, (c) theremaining provisions of this Agreement or any Addendum will remain in fullforce and effect and will not be affected

 

45

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by the illegal, invalid or unenforceableprovision or by its severance therefrom and (d) in lieu of such illegal,invalid or unenforceable provision, there will be added automatically as a part ofthis Agreement or any Addendum, a legal, valid and enforceable provision assimilar in terms to such illegal, invalid or unenforceable provision as may bepossible.

 

16.6         Waiver.

 

Any term or condition ofthis Agreement or any Addendum may be waived at any time by the party thatis entitled to the benefit thereof, but no such waiver shall be effectiveunless set forth in a written instrument duly executed by or on behalf of theparty or parties waiving such term or condition. No waiver by any party of anyterm or condition of this Agreement or any Addendum, in any one or moreinstances, shall be deemed to be or construed as a waiver of the same or anyother term or condition of this Agreement or any Addendum on any futureoccasion. All remedies, either under this Agreement or any Addendum or by Lawor otherwise afforded, will be cumulative and not alternative.

 

16.7         Headings.

 

Headings in thisAgreement or any Addendum are included for ease of reference only and have nolegal effect.

 

16.8         Counterparts.

 

This Agreement or anyAddendum may be executed in two or more counterparts, each of which shall bedeemed an original and all of which together shall constitute one and the sameinstrument.

 

16.9         GoverningLaw.

 

This Agreement shall begoverned by and construed in accordance with the laws of the Province ofOntario and Canada as applicable, without giving effect to the conflict of lawprinciples thereof.

 

INWITNESS WHEREOF, the parties hereto have caused this Agreement to be dulyexecuted and to be effective as of the date first above written.

 

 
|   | **PFIZER  CANADA INC.,**                 |
|--------|------------------------------------------|
|   | **Pfizer  Consumer Healthcare division** |
|   |                                     |
|   | By:                                      |   /s/ Jon Coleman |   |
|   | Name:                                    | Jon Coleman |
|   | Title:                                   | V.P. &  General Manager, Pfizer  Consumer Healthcare Canada &  Caribbean |
|        |                                          |  |  |  |

 

46

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|   | By:                                                                                                                    |   /s/  Peter Lovery                       |   |
|--------|------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------|
|   | Name:                                                                                                                  | Peter Lovery                                        |
|   | Title:                                                                                                                 | Senior Director of  Finance and  Corporate Services |
|   |                                                                                                                   |
|   |                                                                                                                   |
|   | Acknowledged By:                                                                                                       |
|   |                                                                                                                   |
|   |   /s/  Peter Stevenson                                                                                       |                                                |
|   | Name:                                                                                                                  | Peter Stevenson                                     |
|   | Title:                                                                                                                 | VP Global  Contract Manufacturing,                  |
|   | Procurement and  Pfizer Centre Source                                                                                  |
|   |                                                                                                                   |
|   |                                                                                                                   |
|   | **DRAXIS  PHARMA,**                                                                                                    |
|   | **A  DIVISION OF DRAXIS SPECIALTY  PHARMACEUTICALS INC.** (an  amalgamation of DRAXIS Pharma Inc. and  DRAXIMAGE Inc.) |
|   | ** **                                                                                                             |
|   | ** **                                                                                                             |
|   | By:                                                                                                                    |   /s/  John Durham                        |   |
|   |                                                                                                                   |                                                |   |
|   | Name:                                                                                                                  |   John  Durham                            |   |
|   | Title:                                                                                                                 |  President,  DRAXIS Pharma Division            |   |
|        |                                                                                                                        |                                                     |        |  |  |  |

 

47

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**Schedule “A”**

** **

**Price/PurchaseOrder/Invoicing Requirements:**

 
| 1.1.     | Information to be  contained in Purchase Order                                                                                   |
|----------|----------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                             |
| **1.2.** | **Invoices to be directed to:  Pfizer Canada Inc., Pfizer Consumer Healthcare Division, 88 McNabb Street,  Markham, ON L3R 5L2** |
|     | Attention:  Accounts Payable                                                                                                     |

 
| **Territory** | ** ** | **Product** | ** ** | **Price**  | ** ** | **Item Code #** | ** ** |
|---------------|------------|-------------|------------|------------|------------|---------------------------|------------|
| ** **    | ** ** | ** **  | ** ** | ** ** | ** ** | ** **                | ** ** |
| ** **    | ** ** | ** **  | ** ** | ** ** | ** ** | ** **                | ** ** |
| ** **    | ** ** | ** **  | ** ** | ** ** | ** ** | ** **                | ** ** |

 

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**Schedule “B” .**

** **

**Form of Addendum**

 

**DRAFT**

 

1.     ***

 

2.     ***

 

3.     ***

 

4.     ***

 

5.     ***

 

6.     ***

 

7.     ***

 

8.     ***

 

9.     ***

 

10.   ***

 

11.   ***

 

12.   ***

 
| **Activity / Responsibility** | ** ** | **PFIZER** | ** ** | **COMPANY** | ** ** |
|-----------------------------------------|------------|------------|------------|-------------|------------|
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |

 

49

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| **Activity / Responsibility** | ** ** | **PFIZER** | ** ** | **COMPANY** | ** ** |
|-----------------------------------------|------------|------------|------------|-------------|------------|
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| *******                                 |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |

 
| **DRAXIS  PHARMA, a division**           | **[PFIZER  LEGAL ENTITY]** |
|------------------------------------------|----------------------------|
| **of  DRAXIS Specialty Pharmaceuticals** | ** **                 |
| **Inc.**                                 | ** **                 |
| ** **                               | ** **                 |
|                                     |                       |   |   |
|                                     |                       |   |   |
| Name:                                    |                       | Name: |   |
| Title:                                   |                       | Title: |   |
|                                     |                       |   |   |
|                                     |                       |   |   |
|                                     |                       |   |   |
| Name:                                    |                       | Name: |   |
| Title:                                   |                       | Title: |   |

 

50

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**Schedule B-1 Addendum**.

 

*******

** **

This ADDENDUM dated January 1, 2005 (“EffectiveDate”) is to the Manufacturing and Supply Master Agreement (“Agreement”) datedas of January 1, 2005 by and between

 

DRAXIS PHARMA, a division of Draxis SpecialtyPharmaceuticals Inc. (an amalgamation of Draxis Pharma Inc. and Draximage Inc.)(“Company”) and PFIZER LABORATORIES (PTY) LTD. ***

 

1.             Start-upActivities (Section 2.1)

 

***

 

2.             ShipmentReports (Section 3.6)

 

•      ***

 

3.             Price/ Quantity / Term 

 

•      ***

 

4.             Specifications(Section 5) ***.

 

5.             RawMaterials (Section 11.1)

 

•      ***

 

6.             Descriptionof Work

 

•      ***

 

7.             PurchaseOrder/Invoicing Requirements

 

•      ***

 

8.             Documentsto Accompany Batch Release: ***.

 

9.             CommercialLaunch Date (Section 3.3):  ***.

 

10.           Territory: ***

 

11.           Exclusivity(***):

 

51

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12.           Activity/ResponsibilitySummary:  ***

 
| **Activity / Responsibility** | ** ** | **PFIZER** | ** ** | **COMPANY** | ** ** |
|-----------------------------------------|------------|------------|------------|-------------|------------|
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |

 

52

----

 
| **Activity / Responsibility** | ** ** | **PFIZER** | ** ** | **COMPANY** | ** ** |
|-----------------------------------------|------------|------------|------------|-------------|------------|
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |
| ***                                     |       |       |       |        |       |

 

13.           OtherTerms and Conditions:

 

***

 

14.           Contacts (Excluding QA):

 

***

 

 
| **DRAXIS PHARMA, a division**                | **PFIZER  LABORATORIES (PTY) LTD.** |
|----------------------------------------------|-------------------------------------|
| **of DRAXIS Specialty Pharmaceuticals Inc.** |                                |   |
|                                         |                                |   |
|                                         |                                |   |
| By:                                          | /s/ John Durham                     |   | By: | /s/ A.M.  Bush |   |
|                                         |                                |   |   |   |   |
| Name:                                        | John Durham                         |   | Name: | A.M. Bush |   |
| Title:                                       | President,  DRAXIS Pharma division  |   | Title: | Regional Director |   |
|                                         |                                |   |
|                                         | By:                                 | /s/ John Raney |   |
|                                         |                                |   |
|                                         | Name:                               | John Raney |   |
|                                         | Title:                              | Commercial  Director |   |
|                                              |                                     |  |  |  |  |  |  |  |  |  |

 

With a courtesy copyto:  Pfizer Canada Inc.,

Senior Legal Counsel

Fax: (905) 968-2008

 

And to:

 

DRAXIS Health Inc.

General Counsel andSecretary

Fax: (514) 630-7159

 

53

----

 

**Schedule “C” .**

** **

###### **PFIZEROwned Equipment,**

**Dedicated Change Partsand/or Tooling**

** **

**Tooling:**

** **

1.     ***

 

2.     ***

 

3.     ***

 

4.     ***

 

5.     ***

 

54

----

 

**Schedule “D” .**

** **

#### **Approved Carriers**

 

**AndlauerTransportation Services Inc.**

**Logisti-SolveInc.**

SouthCentral Transport

 

55

----

 

**Schedule “E” .**

** **

**Raw Materials to be supplied byPFIZER. (Section 3.9)**

 

1.     ***

2.     ***

3.     

 

56

----

 

**Attachment A  .**

** **

**Canada Product / PriceList**

** **

**Please see attached.**

 

57

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| ** **                                              | **ATTACHMENT A** |
|---------------------------------------------------------|------------------|
|                                                    |
| **CANADA PRODUCT / PRICE LIST WITH DRAXIS PHARMA INC.** |
| ***                                                     |
|                                                    |
| 08/Jul/2004  16:54                                      | ***              |
|                                                         |                  |  |

 
| **Material** | ** ** | ** ** | ** ** | **2003**    | ** ** | **2004 Pricing** | ** ** | **2004 Pricing** | ** ** | **2004 Pricing** | ** ** |
|--------------|------------|------------|------------|-------------|------------|-----------------------|------------|-----------------------|------------|-----------------------|------------|
| **Number**   | ** ** | ** ** | ** ** | **Pricing** | ** ** | *******               | ** ** | *******               | ** ** | *******               | ** ** |
|         |       |       |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       | ***                   |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       | ***                   |       |
|         |       | ***        |       |        |       |                  |       |                  |       |                  |       |
|         |       |       |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       | ***                   |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |
| ***          |       | ***        |       | ***         |       | ***                   |       | ***                   |       | ***                   |       |
| ***          |       | ***        |       |        |       |                  |       |                  |       |                  |       |

 

58

----

 
|   |   | ***    |   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   |   |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
|   |   |   |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   |   |   |   |   |   |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   |   |   |   |   |   |   |
|   |   | ***    |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | — |   |
| ***    |   | ***    |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   |   |   |   |   |   |   |   |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
| ***    |   | ***    |   | ***    |   | ***    |   | ***    |   | ***    |   |
|   |   |   |   |   |   |   |   |   |   |   |   |

 

----

* Excludes freight, duty and any othercosts.

 

59

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**Attachment B**.**Quality Agreement**

 

 

**QUALITY AGREEMENT**

** **

** **

**BETWEEN**

** **

** **

**PFIZER CANADA INC. (“PFIZER”)**

** **

** **

**AND**

** **

** **

**DRAXIS PHARMA INC. (“COMPANY”)**

** **

** **

**EFFECTIVE DATE:  October 4, 2004**

** **

** **

**DATE OF ISSUE:  September 20, 2004**

 

60

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