**Exhibit 4.68**

** **

**MANUFACTURE AND SUPPLY AGREEMENT**

 

**BETWEEN**

 

**DRAXIS PHARMA,**

**A division of DRAXIS SPECIALTYPHARMACEUTICALS INC.**

 

**AND JOHNSON & JOHNSON CONSUMERCOMPANIES, INC.**

 

**AS OF SEPTEMBER 4, 2007**

 

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| ARTICLE 1 - – DEFINITIONS                                                 | 3      |
|--------------------------------------------------------------------------------|--------|
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| ARTICLE 2 - TECHNICAL TRANSFER; SUPPLY OF  PRODUCT                             | 8      |
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| ARTICLE 3 - PRICES FOR PRODUCT AND ***                                         | 9      |
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| ARTICLE 4 - FORECASTS; ORDERS; SUPPLIERS;  RAW MATERIAL TRANSPORTATION         | 14     |
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| ARTICLE 5 - ADDITIONAL UNDERSTANDINGS OF  THE PARTIES                          | 20     |
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| ARTICLE 6 - IMPROVEMENTS AND CHANGES TO PRODUCTS                               | 25     |
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| ARTICLE 7 - TERM                                                               | 26     |
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| ARTICLE 8 - TERMINATION                                                        | 27     |
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| ARTICLE 9 - DELIVERY; INVENTORY                                                | 30     |
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| ARTICLE 10 - INSPECTION                                                        | 32     |
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| ARTICLE 11 - QUALITY/LABEL  VERIFICATION/DEFECTIVE PRODUCT/INSPECTIONS/TESTING | 33     |
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| ARTICLE 12 - FAILURE TO SUPPLY; FORCE  MAJEURE                                 | 39     |
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| ARTICLE 13 - INSURANCE                                                         | 41     |
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| ARTICLE 14 - LABELING; ARTWORK; PROPRIETARY  RIGHTS                            | 42     |
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| ARTICLE 15 - CONFIDENTIALITY                                                   | 43     |

 

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| ARTICLE 16 - PUBLIC ANNOUNCEMENTS           | 43     |
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| ARTICLE 17 - REPRESENTATIONS AND WARRANTIES | 45     |
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| ARTICLE 18 - COMPLIANCE                     | 47     |
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| ARTICLE 19 - INDEMNIFICATION                | 48     |
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| ARTICLE 20 - MISCELLANEOUS                  | 50     |

 

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MANUFACTURINGAND SUPPLY AGREEMENT

 

This Manufacturing and Supply Agreement (the “Agreement”), is enteredinto as of September 4, 2007 (the “Effective Date”), by and betweenJohnson & Johnson Consumer Companies, Inc., a New Jerseycorporation (“Buyer”), and DRAXIS Pharma, a division of DRAXIS SpecialtyPharmaceuticals Inc., a Canadian corporation (“Manufacturer”).  Buyer and Manufacturer are each a “Party” andare collectively, the “Parties”.

 

WHEREAS, Buyer has certain Products (as hereinafter defined) which itdesires to have manufactured for it;

 

WHEREAS, Manufacturer is in the business of manufacturing products;

 

WHEREAS, Buyer desires to haveManufacturer manufacture the Products pursuant to the terms of this Agreement;and

 

WHEREAS, Manufacturer desires to manufacture such Products for Buyerpursuant to the terms of this Agreement in exchange for a Price (as hereinafterdefined) for each such Product.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants andagreements hereinafter set forth, the parties hereto agree as follows:

 

**ARTICLE 1 -– DEFINITIONS**

 

As used throughout this Agreement, each of the following terms shallhave the respective meaning set forth below:

 

1.01         ***

 

1.02         “Affiliate”of a Party means any entity which directly or indirectly controls, iscontrolled by or is under common control with such Party.

 

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1.03         “BusinessDay” or “Business Days” means any day other than Saturday, Sunday or a holidaygenerally recognized in Canada or the United States.

 

1.04         “BuyerIntellectual Property” means any and all Intellectual Property relating to theProducts or their formulation that was (i) owned by Buyer at the EffectiveDate or (ii) was developed or acquired after the Effective Date.  Buyer Intellectual Property does not includeManufacturer IP.

 

1.05         “Carrier(s)”shall mean third parties that transport Raw Materials to the Facility andincludes both Directed Materials Carrier(s) and Other Materials Carriers.

 

1.06         “cGMPs”mean the current Good Manufacturing Practices stipulated or promulgated fromtime to time by Regulatory Authorities (as hereinafter defined) that areapplicable to the manufacturing, production and supply of a Product in theTerritory (as hereinafter defined).

 

1.07         “ConfidentialInformation” shall include all confidential or proprietary information given toone Party by the other Party, or otherwise acquired by such Party in itsperformance of this Agreement, relating to such other Party or any of itsAffiliates, including information regarding any of the products of such otherParty or any of its Affiliates, information regarding its advertising,distribution, marketing or strategic plans or information regarding its costs,productivity or technological advances, information regarding the Price of theProducts, and the terms of this Agreement.

 

1.08         ***

 

1.09         ***

 

1.10         “Currency”means US Dollars.

 

1.11         “Damages”shall mean any and all direct damages, liabilities, claims, costs, charges,judgments and expenses (including reasonable attorneys’ fees).

 

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1.12         “DirectedSuppliers” or “Directed Materials Carriers” shall mean any Supplier that Buyerhas specified to be used for Raw Materials or Transportation of Raw Materialsto the Manufacturer.

 

1.13         ***

 

1.14         “Facilities”shall mean the buildings and locations approved by the Buyer where theManufacturer will store Raw Materials and produce Product for the Buyer whichshall be the facility located at 16751 Trans-Canada Highway in Montreal,Quebec  H9H 4J4 and the secondarypackaging facility to be located in the Province of Québec.

 

1.15         “Facilities’Improvements” shall mean the structural improvements to the actual physicalFacilities (e.g., moving walls, heating, etc.) required to supportmanufacturing of Buyer’s Products as agreed upon with Buyer.  ***.

 

1.16         “FDA”means the United States Food and Drug Administration, or any successor to it.

 

1.17         ***

 

1.18         “HPFBI”means the Health Products and Food Branch Inspectorate of Health Canada, or anysuccessor to it.

 

1.19         “Improvement(s)”means any change, improvement, modification or development to the Products, theSpecifications, the Raw Materials or the method or process of manufacture orproduction of the Products.

 

1.20         “IntellectualProperty” shall mean the intellectual property, trade secrets, know how,technology and information, whether or not protected by patents, including anyImprovements to any Product, that are required in order to make any Product.

 

1.21         “ManufacturerIP” means all intellectual property, trade secrets, know-how, technology andinformation, whether or not protected by patents, owned by Manufacturer priorto and as of the Effective Date and all intellectual property, trade secrets,know-how, 

 

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technology and information, whether or not protected by patents, solelydeveloped by or solely acquired by Manufacturer after the Effective Dateindependent of the performance of its obligations under this Agreement; andprovided that such intellectual property does not utilize nor is it based uponany Buyer Intellectual Property; and provided further such Manufacturer IP isnot used to make the Product.

 

1.22         ***.

 

1.23         ***

 

1.24         “OtherSuppliers” or “Other Materials Carriers” shall mean any supplier that theManufacturer has specified to be used for Raw Materials or Transportation ofRaw Materials to the Manufacturer.

 

1.25         “Price”means on a Product by Product basis the sum of the ***, the appropriate RawMaterials Price, the ***, the ***, and the Transportation Cost, if any, asapplicable to such Product.

 

1.26         “Product”shall mean each of those products (in final finished form) set forth on ScheduleA to this Agreement attached hereto and incorporated herein, manufacturedand packaged in accordance with the Specifications (hereinafter defined).

 

1.27         “QualityAgreement” means the agreement executed by the Parties on May 15, 2007****and attached hereto as Schedule B andincorporated herein****and which setsforth certain obligations and responsibilities each Party has with respect tocertain quality provisions and procedures, as such may be amended or replacedfrom time to time by mutual written agreement of the Parties.

 

1.28         “RawMaterials” shall mean all the materials, chemicals, components, and packagingrequired to manufacture and package the Products in accordance with theSpecifications.

 

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1.29         “RawMaterials Price” shall mean the price that Manufacturer shall charge Buyer forthe cost of Raw Materials as set forth on Schedule C hereto.  The Raw Materials Price for any specific RawMaterial from a Directed Supplier shall be the DPB Price and the Other SupplierPrice with respect to Other Suppliers.

 

1.30         “RegulatoryAuthority” means all governmental agencies or authorities regulating themanufacture, packaging, sale, shipment or storage of any Product in theTerritory.

 

1.31         “Specifications”mean the specifications for each Product and the Raw Materials, including,without limitation, the specifications for the design, composition, productsafety assurance, manufacture, packaging and quality control of the Productsand the Raw Materials, as set forth in Buyer’s global specification system (orsuch future system that Buyer implements)and as supplied to the Manufacturer onthe Effective Date and as the same may hereafter be modified by Buyer inaccordance with Section 5.05 or Article 6.

 

1.32         “Supplier”means third parties who sell Raw Materials to the Manufacturer and includesboth Directed Suppliers and Other Suppliers

 

1.33         ***

 

1.34         ***

 

1.35         “TechnicalTransfer Program” shall mean the series of efforts by which the Product istransferred from site where Product was manufactured prior to the EffectiveDate to the Facilities.  This work andthese efforts include, but are not limited to: transfer of testing methods; Product process development andmanufacturing of Products; optimization of the manufacturing process;generating all protocols and reports; and any other activities associated withthe transfer of Product.   The TechnicalTransfer Program will be determined successful and completed upon receipt ofapproval from the FDA and Health Canada for the manufacturing site change andthe FDA’s and Health Canada’s approval of the manufacturing processes for allthe Products and the Buyer’s approval of the Products produced during Validation**.**

 

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1.36         “Territory”means United States and Canada.

 

1.37         “TransportationCost” shall have the meaning set forth in Section 3.06.

 

1.38         “Validation”means all activities associated with verifying that the manufacturing systems,equipment, processes and facilities produce Product that consistently meetsBuyer Specifications, and in accordance with cGMPs.

 

**ARTICLE 2 - TECHNICAL TRANSFER; SUPPLY OFPRODUCT**

 

2.01         TechnicalTransfer Program.  Prior to the Supplyof Product hereunder, Manufacturer will implement and complete, to Buyer’ssatisfaction, the Technical Transfer Program. In connection with such efforts, Manufacturer shall, including withoutlimitation, do the following:

 

(a)           TechnicalTransfer Resources.  Manufacturerwill secure and make available the services of a sufficient number of itsqualified personnel to perform tasks related to the Technical Transfer Programto the satisfaction of Buyer and to ensure satisfaction of the timelines setforth in Schedule F (the “Technical Transfer Timelines”).  Manufacturer shall prioritize theavailability of such personnel for the Technical Transfer Program over otherprojects and commitments that Manufacturer may have either internally or withthird parties.  Manufacturer will usediligent efforts to execute the work plans associated with the TechnicalTransfer Program and shall report any anticipated or actual significantdeviations therefrom as soon as possible. Such reporting shall not waive any other rights and remedies availableto Buyer in connection with such failure by Manufacturer.  The Parties shall participate in periodicconferences to review the status of the Technical Transfer Program.  It is agreed by the Buyer that any delay byManufacturer to meet said timelines will not be deemed a breach by Buyer.

 

(b)  Activities and Deliverables.  Manufacturer shall perform the activities andprovide the deliverables as set forth in Schedule F.   Manufacturer and Buyer shall jointly work 

 

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towards achieving key milestones as outlined in Schedule F. Changes tokey milestone dates shall be jointly agreed upon by Buyer and Manufacturer.

 

(c)  Qualification of Equipment:  Manufacturer shall order, receive and qualifyall Equipment required to manufacture, test or package Product in a timelymanner that supports transfer of Products to Manufacturer in accordance withthe schedule set forth on Schedule  F.   For the avoidance of doubt, the Manufacturerwill finance the purchase of the Equipment through *** and such amount shallnot be incorporated into, or combined with, the ***.

 

(d) ***

 

2.02  Supply of Product.  During the Term of this Agreement and subjectto the terms herein, Manufacturer shall manufacture, package and supply Buyerwith those quantities of Product as ordered by Buyer and on the date specifiedby Buyer, and Buyer shall purchase from Manufacturer such quantities ofProducts, subject to the ordering procedures set forth in Article 4 andthe provisions set forth in Section 12.02. Both Parties agree to collaborate to implement (1) an integratedreplenishment planning process that closely links supply and marketplace demandand (2) a weekly schedule attainment performance metric. Buyer agrees thatit shall pay for any software or other resource required if the integratedreplenishment planning process is an automated one.

 

**ARTICLE 3 - PRICES FOR PRODUCT AND *****

 

3.01         Price and OtherFees.  Throughout the Term of theAgreement, Manufacturer shall invoice Buyer the Price for each Product orderedand delivered to Buyer in accordance with the terms herein.   Manufacturer shall also invoice Buyer forthe *** and  ***  separate from Price in accordance with theterms herein.

 

3.02         ***

 

(a) ***

 

(b) ***

 

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3.03  Raw Materials Price.  The price that Manufacturer shall chargeBuyer for the cost of the Raw Materials purchased from the Directed Suppliersis the designated price set forth on Schedule C  (each a “DPB Price”).  *** Once Buyer has finalized the pricing for the Raw Materials to bepurchased from Directed Suppliers: (a) Buyer shall amend Schedule Caccordingly to reflect such prices, (b) such pricing shall be effectiveimmediately upon Buyer’s completion of Schedule C, and (c) the precedingsentence shall no longer be in effect at such time.  The price that Manufacturer shall chargeBuyer for the cost of the Raw Materials purchased from the Other Suppliers isthe designated price set forth on Schedule C (each an “Other SupplierPrice,”) as amended from time to time in accordance with the provisions of ScheduleC.  Manufacturer will not chargeBuyer for any Raw Materials that have not been incorporated into Productdelivered to Buyer in accordance with Article 4, or which Raw Materialswere not purchased in accordance with Section 4.04(a).  The Raw Materials Prices are subject toadjustment as expressly provided herein.

 

3.04         ***

 

3.05         ***

 

3.06         TransportationCost.  The cost that the Manufacturershall charge Buyer for the transportation of Raw Materials to, from or withinits Facilities, if any, is the amount set forth on Schedule C.  The cost that Manufacturer shall charge Buyerfor the transportation of Raw Materials is calculated as a percentage of theRaw Material Cost.  For greater clarity,all shipment of Products to Buyer shall be at the sole cost of the Buyer as setforth in Section 11.12(a).

 

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3.07         ***

 

3.08         Price Adjustments.

 

(a) Price Adjustments for Actual Costs Raw Materials andTransportation Costs.

 

(i)            *Directed Suppliers, and Directed Materials Carriers.*  In the event a Directed Supplier or DirectedMaterials Carrier seeks to adjust the cost to Manufacturer of the Raw Materialsor the cost of transporting such Raw Materials, as the case may be, theManufacturer shall notify Buyer prior to the purchase or transportation of suchRaw Materials at an adjusted price. Manufacturer shall not purchase or transport such Raw Materials at theadjusted price unless (x) Buyer provides its prior written approval toManufacturer to purchase or transport, as applicable, such Raw Materials atsuch new price or (y) Manufacturer can substantiate to Buyer thatManufacturer was required to purchase or transport such Raw Material in advanceof Buyer’s approval to fulfill Buyer’s applicable Purchase Orders or forecastedbut not yet ordered Product and avoid a delay in Buyer’s requested deliverydate of Product.  Manufacturer will notpurchase any such Other Supplier Raw Material for which there is not yet anagreed upon price set forth on Schedule C, unless (x) Buyerprovides its prior written approval to purchase such Raw Materials at aparticular price or (y) Manufacturer can substantiate to Buyer thatManufacturer was required to purchase such Raw Material in advance of Buyer’sapproval to fulfill Buyer’s applicable Purchase Orders or forecasted but notyet ordered Product and avoid a delay in delivering Product to Buyer inaccordance with Buyer’s requested delivery date of Product.

 

(ii)           *****

 

(iii)          *****

 

(iv)          *****

 

(b)           Adjustmentsto the Raw Materials Price. Annually, Buyer may notify Manufacturer of adjustments to the DPB Pricesand the Parties shall execute an amendment to this Agreement adjusting ScheduleC accordingly.  Annually, the Partiesshall consider any adjustment to the Other Supplier Prices proposed byManufacturer, only if Manufacturer has negotiated in good faith with itssuppliers to obtain a fair market price for such Raw Materials.  

 

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Upon Buyer’s written request,Manufacturer shall provide Buyer with written documentation that supports andverifies the basis for any such adjustment. In furtherance of this Section 3.08, Buyer may also produce writtenverifiable documentation as to a reduction, if any, in the costs of such RawMaterials, and the Parties shall adjust such costs accordingly.

 

(c)           ***

 

(d)           ***

 

(e)           ***

 

(f)            Adjustments to the Transportation Cost.

 

(i) Annually, the Parties will review the Transportation Costs forCarriers.  In an effort to continuallyimprove price and efficiency, Buyer shall have the right at any time throughoutthe year to locate a Carrier for the transportation of any of the Raw Materialsthat Buyer obtains from the Directed Suppliers. If Buyer locates such a carrier, Buyer shall so notify Manufacturer, andBuyer shall have the right to insist that Manufacturer utilize such Carrier,which shall thereafter be a Directed Materials Carrier, for such Raw Materials.The change in Carrier must be made within a mutually agreed upon timeperiod.  **  *****

 

(ii) Annually,the Parties shall consider any proposals presented by the Manufacturer toadjust the Transportation Costs based upon actual costs which the Carrierscharge the Manufacturer provided that Manufacturer has negotiated in good faithwith such Carriers to obtain a fair market price for the transportation of suchRaw Materials.  Upon Buyer’s writtenrequest, Manufacturer shall provide Buyer with written documentation thatsupports and verifies the basis for any such adjustment.  In furtherance of this Section 3.08,Buyer may produce written verifiable documentation as to the reduction, if any,in the costs of the transportation of Raw Materials and the Parties shalladjust such costs accordingly

 

(g) ***

 

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3.09  Pricefor New Products.

 

(a)           Inthe event Buyer has notified Manufacturer in accordance with Section 5.11that it desires to add another product to Schedule A and Manufacturerhas indicated a willingness to negotiate the terms for such new product, theParties will negotiate the Price for such new product in good faith.  Manufacturer shall provide a price for eachnew Product utilizing the same methodology as was used in Schedule A.  If the Parties reach mutual agreement uponthe Price and all other necessary terms, the Parties shall execute an amendmentto this Agreement amending Schedule A and Schedule C to includesuch new product and Raw Materials and the corresponding Price.

 

(b)           Manufacturer shall provide product marketedstability, product development, test method transfer and Validation for eachnew Product.  The parameters of each suchproduct marketed stability, product development, test method transfer andValidation shall be established and approved by Buyer. Manufacturer shallprovide a price for each new Product utilizing same methodology as used inSchedule A.  The Buyer shall not beresponsible for paying any incremental charges in support of the productmarketed stability, product development, test method transfer and Validation ofa new or existing Product at the Facility without Buyer’s prior writtenapproval.

 

3.10         PaymentTerms.  Payment terms with respect toall invoices issued between Manufacturer and Buyer in accordance with the termsherein shall be forty-five (45) calendar days net invoice date and shall besubject to the other terms of this Section 3.10.  Payment will be issued on the 45thday.  Manufacturer shall remit only oneinvoice in the amount of the Price for each Product shipped pursuant to theterms herein, which invoice shall be consistent with Buyer’s format and shallprovide the level of detail as requested by Buyer.  Manufacturer shall not invoice Buyer forProduct that has been manufactured but which has either not been shipped to theBuyer in accordance with the terms herein or has been shipped to 

 

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Buyer contrary to the termsherein, regardless of the reason. Manufacturer shall not issue any separate invoices to Buyer for thecomponents of the Price of any Product. To the extent Buyer disputes an invoice or any portion thereof, Buyershall notify Manufacturer of its dispute and shall pay only the undisputedportion, if any, of such invoice until the settlement of the dispute.

 

3.11         ***  If the total aggregate value of conversion ofall WIP Product and Product set forth in such Forecast for such 24 month period***.

 

3.12   ***  The Parties recognize and agree that Affiliates of Buyer may beexecuting a similar version of this Agreement. *** .

 

3.13 ***

 

3.14 ***

 

3.15  ***

 

**ARTICLE 4 - FORECASTS; ORDERS; SUPPLIERS; RAW MATERIAL TRANSPORTATION**

 

4.01                           Forecasts

 

(a)   Forecasts:  By the first week of each calendar monthduring the Term, Buyer (or Buyer’s designee on behalf of Buyer) shall submit arolling forecast by Product as set forth on Schedule A, of Buyer’s anticipateddemand of Product for the next twelve (12) consecutive months, commencing withthe following month to which such forecast is sent (each, a “Forecast”).  The Forecast shall show demand on a monthlybasis, and for the first three months shall state the dates of delivery forsuch Product.  The Forecast, includingthe required delivery dates, are non-binding except for the first month of eachForecast (the “Purchase Order”), which shall constitute a bindingpurchase order for the quantity of Product stated in the Forecast for suchmonth and a binding date of delivery for such Product. In the event thatManufacturer has failed to receive an updated Forecast by the first week of

 

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any calendar month, Manufacturer shall notify Buyer of such failureand, if Buyer has not responded with an updated Forecast within five (5) BusinessDays of such notice, the most recent Forecast shall be regarded as current.

 

4.02  ***

 

***

 

4.03         ***

 

(a)           ***Order is less than one month, or if Manufacturer is unable to fulfill such ordersbecause a Directed Supplier is in default of supplying the Manufacturer or hassupplied Raw Materials that do not meet Specifications unless, in either case,Directed Supplier’s default or failure is a result of Manufacturer or a problemthat the Directed Supplier is having with the Manufacturer) is a materialbreach of Manufacturer’s obligations. Provided that Raw Materials and WIPProduct are available, Manufacturer will make reasonable commercial efforts ingood faith to meet delivery requests that are less than one month from the dateof issuance of a Purchase Order.

 

4.04         RawMaterials.

 

(a) *Ordering.*

 

* *(i)           In order forManufacturer to meet its obligation to supply Product under this Agreement,Buyer and Manufacturer agree that Manufacturer must order Raw Materials inaccordance with the defined lead times *** Manufacturer is authorized to procure and shall be entitled to orderonly those quantities of Raw Materials required to manufacture those Productsas in accordance to Section 4.02 in order that Manufacturer will be ableto comply with Buyer’s delivery dates for Buyer’s actual and such anticipatedProduct requirements.  To the extentManufacturer must order a Raw Material to manufacture Product requested byBuyer through a Purchase Order or anticipated Product requirements and such RawMaterial is one which the Parties have agreed Manufacturer will order in bulkor in minimum order quantities as required 

 

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by the Supplier in order toobtain certain pricing benefits, then Manufacturer shall order not the amountof Raw Material required solely for such particular Purchase Order oranticipated Product requirements, but rather shall order the minimum in bulk orwhole quantity of such Raw Material (as required by the Supplier) to maintainthe favorable pricing benefits, subject to the Buyer’s consent as required.

 

(ii)           Manufactureragrees that it is responsible for, and shall administer the procurement of theRaw Materials on a daily basis in accordance with the terms herein.  Manufacturer’s responsibilities in connectionwith the purchasing and procurement of the Raw Materials from the Suppliers,including Directed Suppliers, in accordance with the terms herein, shallinclude, without limitation: transporting, receiving, inspecting, testing andstoring the Raw Materials; maintaining sufficient administration, workingcapital, insurance, information systems, material management and suppliermetrics to track that the Supplier is delivering the quantity and quality ofRaw Materials requested by Manufacturer and such Raw Materials meet theSpecifications; ensuring that adequate supplies of Raw Materials are availableat all times throughout the Term of the Agreement, subject to the provisions ofSection 4.04(a)(i); ensuring that such Raw Materials are purchased andprocured from the appropriate Supplier; paying the Supplier in accordance withsuch Supplier’s terms (and in any event not more than forty five days afterreceipt of invoice from a Directed Supplier); ensuring that each Raw Materialis transported by the appropriate Carrier; paying Carriers as required; andresolving all supply issues that arise in connection with such Supplier.  If there is a failure to supply issue with aDirected Supplier as a result of a Directed Supplier having a Force MajeureEvent or a Directed Supplier fails to deliver the appropriate quantity andquality of Raw Materials ***. Significant quality issues with a Raw Material purchased from a DirectedSupplier must be communicated to the Buyer’s Quality Assurance Departmentwithin three (3) Business Days of the Manufacturer’s 

 

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incoming inspection.   ***. In the event that there is no satisfactory resolution of the supply issue,***.

 

(b) *Directed Pure BuyProgram. *Manufactureracknowledges that the Buyer has arrangements with several suppliers for certainRaw Materials. Schedule C sets forth a list of the Raw Materials and thesuppliers from whom Buyer has arranged such Raw Material to be purchased (each,a “Directed Supplier”, collectively, the “Directed Suppliers”).  Manufacturer agrees (i) it will notinterfere with or impede in any manner such relationships, (ii) topurchase each of the Raw Materials designated to be obtained from a DirectedSupplier only from such Directed Supplier, (iii) to inform the DirectedSupplier as to which Raw Materials are being purchased for incorporation intothe Products, (iv) to purchase the Raw Materials from Directed Supplier atthe DPB Price only (unless the Buyer has specifically authorized theManufacturer otherwise) and (v) to keep all DPB Prices confidential and tonot share such information with third parties unless required to disclose bylaw, court order or order of a regulatory authority. Buyer shall negotiate theterms of its arrangement with each Directed Supplier directly, including,without limitation, the price that the Directed Supplier shall charge theManufacturer for the Raw Material and the Minimum Order Quantities.  Upon completion of such agreements and priorto the first production of any Product using any such Raw Materials the Partiesshall execute an amendment to this Agreement amending Schedule C toincorporate such DPB Price ***.   IfManufacturer receives a rebate, deduction or discount for any Raw Materialspurchased from a Directed Supplier which are to be used for the Products,Manufacturer shall make such rebate, deduction or other discount available toBuyer in accordance with the variance calculations.  Buyer must pre-approve any change in orderpattern. ***.

 

(c)           OtherRaw Materials*.*

 

(i)*           *Forthose Raw Materials listed on Schedule C which are not to be procuredfrom a Directed Supplier, Manufacturer shall negotiate its own agreements with 

 

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suppliers of its choice forsuch Raw Materials (each an “Other Supplier” and together the “OtherSuppliers”,) and shall comply with such contractual arrangements with suchOther Supplier, subject to the terms herein.   If Manufacturer receives a rebate, deduction or discount for any suchRaw Materials to be used for the Products, Manufacturer shall make such rebate,deduction or other discount related to the Products 100% available to Buyer.

 

(ii)           Tothe extent a Raw Material for an Other Supplier is added to Schedule Csubsequent to the Effective Date, the Parties agree that Manufacturer shallidentify any such Other Supplier for such Raw Material, negotiate a purchaseprice for such Raw Material and obtain the prior written approval of Buyerbefore engaging or committing to use such Supplier.  If Buyer believes that such Supplier’s priceis acceptable, the Parties will execute an amendment to this Agreement,amending Schedule C to reflect such Other Supplier Price for such RawMaterial. If Buyer believes that an Other Supplier’s price is inconsistent withthe market or is otherwise unacceptable, then Buyer shall have the opportunityto locate its own Supplier for such Raw Material and insist that theManufacturer use such Supplier for the Raw Material and Buyer shall beresponsible for qualifying such Supplier at its own costs.  Buyer shall then negotiate the terms of itsarrangement with such Directed Supplier in accordance with Section 4.04(b).  Upon completion of such negotiations andprior to the initial production of the Product (or if such Product has beenproduced previously, then prior to the first production following theadjustments made to Schedule C in accordance with Section 4.04(d))using such Raw Material, Manufacturer and Buyer shall execute an amendment tothis Agreement, amending Schedule C to reflect that Manufacturer shallpurchase such Raw Material only through the Directed Supplier identified on theamended Schedule C and shall charge Buyer the DPB Price.  ***.

 

(d)           UnilateralAmendments to Schedule C*.*  Buyer shall be permitted to unilaterallychange Schedule C, without the approval or consent of Manufacturer inorder to, (i) 

 

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to add new Raw Materials thatwill be necessary or delete Raw Materials that have become obsolete, in eithercase, because of a change to the Specifications or (ii) to change theavailability of a Raw Material from a Directed Supplier to an Other Supplier orfrom an Other Supplier to a Directed Supplier, ***  Buyer shall send a written notice toManufacturer informing Manufacturer of any amendments to Schedule C andattaching such amended Schedule C. Upon Manufacturer’s receipt of Buyer’s written notice and the revised ScheduleC, such Schedule C shall be so amended without the need for bothParties to execute an amendment in accordance with Section 20.05.  In the event Buyer’s amendment reflects thata new or currently utilized Raw Material will be available through a DirectedSupplier, Manufacturer shall negotiate terms with such Directed Supplier inaccordance with Section 4.04(b).  Inthe event Buyer’s amendment reflects that a particular Raw Material will nolonger be available through a Directed Supplier or that a new Raw Material willnot be available through a Directed Supplier, then Manufacturer shall locate anOther Supplier for such Raw Material and shall follow the selection, approvaland negotiation process as set forth in Section 4.04(c).

 

(e)  *** To the extent Manufacturer has purchased Raw Materials in accordancewith the requirements set forth in Section 4.04(a), but subsequent to suchpurchase and prior to the conversion of such Raw Material into Product or WIPProduct, ***.

 

(f)  ***

 

*(g)Transportation ofRaw Materials.*

 

(i)             Priorto the initial purchase of any Raw Material from a Directed Supplier, Buyershall have the option of specifying a Carrier who will transport such RawMaterial to the Facility (a “Directed Materials Carrier”). The Manufacturershall negotiate it’s own agreements with the Carrier that is responsible fortransporting such Raw Materials to the Facilities.  If the Manufacturer receives a discount ordeduction for any such Transportation 

 

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Costs for the Raw Materials,Manufacturer shall make such discount or deduction available to Buyer inaccordance with the variance calculations described in Schedule E.

 

4.05   Electronic Data Exchange.  Manufacturer agrees to cooperate with Buyerin identifying and implementing an electronic interface that will allow formutual direct exchange of forecast and inventory data.  If Manufacturer incurs costs (includingincremental personnel) associated with implementing this electronic interface,it will be at the expense of the Buyer and the Parties will mutually agree on apayment schedule.

 

4.06         ForwardVisibility.  At the commencement ofevery month, Manufacturer shall provide the Suppliers with forward visibilityof the Buyer’s Forecast for six-month intervals which Manufacturer shalltranslate into Raw Material requirements as follows: (a) the firstthirteen (13) weeks of the Forecast (showing demand on a weekly basis) and (b) thosethree (3) months of the Forecast following the first thirteen weeks(showing demand on a monthly basis).  Atthe commencement of month one and month seven of each year during the Term, inaddition to the forecasting described in the immediately preceding sentence,Manufacturer will also provide the Suppliers with a twelve (12) month Forecast(showing demand on a monthly basis).

 

4.07         Conflicts.  To the extent of any conflict orinconsistency between this Agreement and any purchase order, purchase orderrelease, confirmation, acceptance, *** or any similar document, the terms ofthis Agreement shall govern. In ordering and delivering the Products pursuanthereto, Manufacturer and Buyer may employ their standard forms, but nothing inthose forms shall be construed to modify, amend or supplement the terms of thisAgreement and, in the case of any conflict herewith, the terms of thisAgreement shall prevail.

 

**ARTICLE 5 - ADDITIONAL UNDERSTANDINGS OF THE PARTIES**

 

5.01         OtherAffiliates.  If any other Affiliateof Buyer desires to purchase Products from Manufacturer under the terms of thisAgreement, then, upon the execution of a copy of this Agreement by suchAffiliate, Manufacturer shall accord such Affiliate all of the

 

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benefits hereof and treat such affiliate as a “Buyer” for the purposesof this Agreement.  To the extentManufacturer is having a manufacturing, scheduling or resource allocationconflict as between Buyer and one of its Affiliates, and such conflict is aresult solely of the demands of these two businesses, and there is no thirdparty that is also imposing manufacturing, scheduling or resource allocationdemands upon Manufacturer, then Buyer shall resolve such issue between Buyerand its Affiliate.  If the result of suchconflict is not solely as a result of the demands between Buyer and one of itsAffiliates, Manufacturer shall be obligated to manage such conflict.  The intent of this section is not thatManufacturer will allocate one portion of time to all of Buyer’s and itsAffiliates’ businesses, and not otherwise impact or impede their allocations toother non-Affiliated parties.

 

5.02   Exclusive Rights.  The parties agree that Buyer owns all theIntellectual Property Rights,****andexcept as set forth in Section 5.03, Manufacturer and its Affiliates haveno rights to use such Intellectual Property Rights.  Except as otherwise permitted herein, duringthe Term of the Agreement, Manufacturer shall supply Buyer on an exclusivebasis with the Products that Buyer will sell in the Territory and neitherManufacturer nor any of its Affiliates shall sell or distribute, or allow thesale or distribution by any third party of, the Products (or any Improvement orproduct line extension thereto) anywhere. Following the termination or expiration of this Agreement, neitherManufacturer nor any of its Affiliates shall have any rights to manufacture,sell or distribute, or allow manufacturing, sale or distribution by any thirdparty of the Products (or any Improvement or line extension thereto) set forthin Schedule A.

 

5.03         Grantof Sublicense.

 

(a) Solely to the extent necessary to enable Manufacturer tomanufacture and package the Products for Buyer in accordance with the termsherein, Buyer hereby grants Manufacturer a royalty-free, non-exclusivesublicense without the right to grant further sublicenses under any and allapplicable patents and other Intellectual Property Rights owned or 

 

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controlled by or licensed toBuyer or any of Buyer’s Affiliates to make and package the Products, which grantcannot be sublicensed.  Nothing hereinshall give Manufacturer any right to use any of Buyer’s or Buyer’s AffiliatesIntellectual Property Rights used in connection with the Products or trademarksor trade names that may appear on the labeling for the Products, except formanufacturing Products and completing the packaging labels for the Products asspecified in the Specifications.  Exceptas provided above, Manufacturer shall not obtain any right, title or interestin any of Buyer or Buyer’s Affiliates Intellectual Property Rights or trademarkor any other trademark designation or tradename by virtue of this Agreement orManufacturer’s performance of its obligations hereunder.

 

(b)           TheParties agree that Buyer owns or controls the copyright, trade dress and allother intellectual property rights used in connection with the packagingmaterials for the Products**.**

 

5.04         CompetingProducts.  Manufacturer recognizesand acknowledges that Buyer and its Affiliates have been, and will continue tobe, actively involved in the fields in which the Products are sold.  Manufacturer acknowledges that Buyer and itsAffiliates market, sell and distribute products which compete directly with theProducts, and may continue to market, sell and distribute these and other competingproducts throughout the Term of this Agreement, either inside or outside theTerritory.  Manufacturer acknowledgesthat Buyer and its Affiliates may have such products manufactured internally orby a third party, including, without limitation, a third party that is acompetitor of Manufacturer’s. Additionally, Manufacturer acknowledges that throughout the Term, Buyerand its Affiliates may manufacture Products, or have Products manufactured by athird party, either inside or outside the Territory, and Buyer and itsAffiliates shall have the right to market, sell and distribute, or havemarketed, sold or distributed such Products outside the Territory.

 

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5.05         Specifications.  The Parties acknowledge and agree that Buyerwill need to make changes to the Specifications throughout the Term of theAgreement.  Buyer shall make any suchchanges that it so requires to the Specifications and such changes shall beassessed upon receipt by Manufacturer for implementation timing withconfirmation of such receipt by Manufacturer.  Such change shall be electronically communicated to Manufacturer throughthe Buyer’s global specifications system.  If Manufacturer has any objections to the modified Specifications,Manufacturer must notify Buyer in writing within fifteen (15) Business Days ofreceipt of Specification change.  IfManufacturer objects, then the Parties shall meet as soon as possiblethereafter to discuss Manufacturer’s objections.  If such change or modification will causeManufacturer to incur additional costs and Manufacturer objects to incurringsuch cost, then Manufacturer shall so specify that reason in its notificationto Buyer.  Buyer and Manufacturer shallthen mutually agree upon an implementation strategy to the satisfaction of bothParties.

 

5.06         Cooperation.  Manufacturer shall provide Buyer or anyRegulatory Authority with any data and information in Manufacturer’s possessionrelating to the Products or the Facility and its manufacture and qualitycontrol procedures that may be reasonably necessary to enable Buyer to obtainany governmental approvals mentioned under Section 5.07.

 

5.07         RegulatoryApproval.  As of the Effective Dateand throughout the Term, Manufacturer has and will have all permits,establishment and facility licenses required by Regulatory Authorities that arenecessary for Manufacturer to manufacture the Products (including storagethereof), save and except for those permits required by Manufacturer for thesecondary packaging Facility which shall be obtained prior to commencingsecondary packaging activities in said Facility, and provide Products to Buyerin accordance with the terms herein.  Inthe event of any change in the Raw Materials or manufacturing processes solelywith respect to the Products during the Term of the Agreement that has beenrequested by Buyer or is required 

 

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by law and which change is not required for, or applicable to, anyother product which Manufacturer manufactures or may manufacture, Manufacturerwill be responsible for securing any Regulatory Approvals that are necessary toimplement such change in its Facility and Buyer will be responsible for securingany Regulatory Approvals that are necessary to implement such change in theProducts ***.  For the purposes ofclarification and the avoidance of doubt, if any such change is applicable to,or will impact any other product that Manufacturer manufactures, thenManufacturer shall make such change and obtain all necessary RegulatoryApprovals, ***.

 

5.09         Back-upSupply.  Manufacturer recognizes,acknowledges and agrees that during the Term, Buyer and its Affiliates mayshare the Specifications, Intellectual Property Rights, process specifications,technical information as well as any other data or information, exclusive of*** and any other financial information pertaining directly to Manufacturer,that may be useful or necessary in connection with manufacturing, packaging,producing and storing the Products with another party (which may be acompetitor of Manufacturer) for such other party to qualify its facility sothat such party may manufacture and produce Product that meets theSpecifications if so requested by Buyer. Manufacturer further recognizes, acknowledges and agrees that during theTerm Buyer may so request that such party manufacture, package, validate,produce and store such qualified Product and perform stability testing and anyother tests on such Product that Buyer deems necessary or appropriate to ensurethat such party is able to manufacture validated and qualified Product thatcomplies with the Specifications.  Buyeragrees that during the Term it will not purchase any Product from suchmanufacturer for sale to a third party in the Territory (e.g., Failure toSupply), except as otherwise permitted in accordance with the terms herein orif the Agreement is terminated or expires.

 

5.10         Facilities.  Manufacturer represents and warrants thatthroughout the Term of the Agreement all Products will be manufactured,packaged and stored at the Facilities. Manufacturer will not manufacture, package or store the Products or theRaw Materials at any 

 

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other location throughout the Term of the Agreement without prior written authorization from Buyerwhich shall not be unreasonably withheld. The Parties agree that Buyer shall not be deemed unreasonable inwithholding its consent if it is not able to validate another facility at thetime, whether due to resource constraints or inability to justify additionalcosts associated therewith.

 

5.11         ManufacturerResponsibilities.  Without limitingany of Manufacturer’s responsibilities herein, and to the extent furtherenumerated elsewhere in the Agreement in accordance therewith, the Partiesagree that included within the Price of the Product, Manufacturer shall do thefollowing: (a) all complaint investigation and reporting; (b) analyticaland microbiological release testing for component, chemical, bulk and Productas indicated on Specifications (c) pure-buy administration (e.g., suppliermanagement, audits, other activities and tools necessary to maintain efficientsupplier relations, etc.); (d) storage for all Raw Materials in accordancewith required specifications and temperature guidelines; (e) transportationfor all incoming Raw Materials; (f) input and maintenance of allSpecifications, including test methods, Raw Materials, component, WIP andProduct Specifications; (g) perform root cause/corrective action and tracktrends on all Product non-conformances in accordance with Buyer’s requirements;and (h) provide the lead role in troubleshooting and addressing day-to-daytechnical issues in manufacturing, testing and validation with the exceptionof  testing of the ***.

 

5.12  ***

 

5.13  ***

 

**ARTICLE 6 - IMPROVEMENTS AND CHANGES TOPRODUCTS**

 

6.01         Improvements.Each year during the Term of this Agreement, Buyer’s intention is to reducePrice for each upcoming year by *** over the preceding year’s total aggregatePrice for all Products through the Buyer’s cost improvement program (“CIPProgram”).

 

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Manufacturer and Buyer agree to work together, using their jointcommercially reasonable efforts, to strive to reduce the net Price of theProduct(s) by ***  during eachtwelve (12) month period during the Term and any Extended Term.  Manufacturer and Buyer will agree upon anySpecification changes resulting from such cost improvements.  At each quarterly meeting (which is to beheld in person), Manufacturer agrees to have developed and to submit to Buyerat that meeting a written plan for cost improvement opportunities under thisAgreement or any Addendum. ***  In theevent that the cost improvement requires capital investment or other costsassociated with manufacturing or testing of Raw Materials or Product, or otherqualification work, ***.

 

**ARTICLE 7 - TERM**

 

7.01         InitialTerm.  The initial term of thisAgreement (the “Initial Term”) shall commence on the date hereof andremain in effect until December 31, 2013, unless sooner terminated asexpressly provided under the term of this Agreement.

 

7.02         OptionalExtension.  Buyer, at its soleoption, may extend this Agreement for up to two additional years after theexpiration of the Initial Term by giving Manufacturer at least eighteen (18)months prior written notice prior to the expiration of current Agreement.   Price will be calculated based on actualcosts of conversion labor, Raw Materials, overhead and other components oftotal cost.  “Term” shall mean theInitial Term plus any optional extensions exercised by Buyer in accordance withthis Section 7.02.

 

7.03         AdditionalTerm:  Should Buyer enter intoanother Agreement with the Manufacturer upon completion of Term, Manufacturerand Buyer agree to negotiate the Price of the Products for said additional term(the “Additional Term”) prior to one hundred and eighty (180) days of thecommencement of said Additional Term. Manufacturer agrees to adjust Price 

 

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based on actual costs of conversion labor, Raw Materials, overhead andother components of total cost.

 

7.04  ***  (a) ***

 

(b)           ***

 

(c)           ***

 

**ARTICLE 8 - TERMINATION**

 

8.01         Breach.  (a) This Agreement may be terminated,prior to the expiration of its Term, by either Party by giving written noticeof its intent to terminate and stating the grounds therefore if the other Partyshall materially breach or materially fail in the observance or performance ofany representation, warranty, guarantee, covenant or obligation under thisAgreement, including, without limitation, the Quality Agreement.  The Party receiving the notice shall havethirty (30) Business Days from the date of receipt thereof to cure, or toinitiate a cure reasonably acceptable to the non-breaching Party, if suchbreach or failure is not curable within thirty (30) Business Days of the breachor failure (the “Additional Cure Period”). In the event such breach or failure is cured, the notice shall be of noeffect and the Agreement shall continue on in full force and effect.  In the event (i) such breach or failureis not cured within such thirty (30) Business Days period or (ii) if aParty initiates a cure within thirty (30) Business Days for a breach or failurethat cannot reasonably be cured within thirty (30) Business Days, but fails toeffect the cure within the Additional Cure Period then the Agreement shallterminate at the end of the Additional Cure Period.  If Manufacturer fails to receive an “Acceptable”rating on any quality audit conducted by Buyer or any of its Affiliates, or byanother party at Buyer’s direction, and fails to provide a corrective actionplan acceptable to Buyer or Affiliate, or fails to

 

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implement such corrective actions in the period agreed upon by Buyer orAffiliate, such failure is a breach of this Agreement.  If Manufacturer fails to maintain anacceptable compliance status with the FDA and any other applicable regulatoryagency, such failure shall be a breach of this Agreement.

 

(b) This Agreement may be terminated in accordance with Section 12.01.

 

(c) Notwithstanding Manufacturer’s right to cure a breach inaccordance with Section 8.01(a), in the event that Manufacturer has***  Buyer so decides to sendManufacturer a notice of termination for breach.  The Agreement shall terminate uponManufacturer’s receipt of such notice. Example: ***.

 

8.02         TerminationWithout Period of Cure. Notwithstanding Section 8.01, Buyer may also terminate thisAgreement without allowing Manufacturer the thirty (30) Business Day period tocure any such breach or failure in accordance with Section18.02 or 18.03.

 

8.03         Insolvency,Etc.  This Agreement may beterminated, prior to the expiration of its Term, upon fifteen (15) calendardays written notice by either Party: (i) in the event that the other Partyhereto shall (1) apply for or consent to the appointment of, or the takingof possession by, a receiver, custodian, trustee or liquidator of itself or ofall or a substantial part of its property, (2) make a general assignmentfor the benefit of its creditors, (3) commence a voluntary case under theUnited States Bankruptcy Code, as now or hereafter in effect (the “BankruptcyCode”) or similar legislation in Canada, (4) file a petition seeking totake advantage of any law (the “Bankruptcy Laws”) relating to bankruptcy,insolvency, reorganization, winding-up, or composition or readjustment ofdebts, (5) fail to controvert in a timely and appropriate manner, oracquiesce in writing to, any petition filed against it in any involuntary caseunder the Bankruptcy Code or similar legislation in Canada, or (6) takeany corporate action for the purpose of effecting any of the foregoing; or (ii) if a proceeding or case shall be commenced against the other Party hereto inany court of competent jurisdiction, seeking (1) its liquidation,

 

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reorganization, dissolution or winding-up, or the composition orreadjustment of its debts, (2) the appointment of a trustee, receiver,custodian, liquidator or the like of the Party or of all or any substantialpart of its assets, or (3) similar relief under any Bankruptcy Laws, or anorder, judgment or decree approving any of the foregoing shall be entered andcontinue unstayed for a period of 60 days; or an order for relief against theother Party hereto shall be entered in an involuntary case under the BankruptcyCode or similar Canadian legislation.

 

**8.04         Changein Control.  Buyer may, but is notrequired to, terminate this Agreement upon written notice to Manufacturer (orits successor) in the event that an entity other than Manufacturer has gainedcontrol of more than fifty percent (50%) of the ownership of Manufacturer orcontrol of management; or more than fifty percent (50%) of Manufacturer’sassets have been transferred by any person or entity or affiliated group; orManufacturer has merged or amalgamated with or into another party (even ifManufacturer is the surviving entity), except in the context of a corporatereorganization in which the ultimate control of the Manufacturer remains thesame as of the date hereof.  Such terminationwill be effective immediately upon Manufacturer’s receipt of written noticefrom Buyer informing Manufacturer of Buyer’s termination of the Agreement.  Manufacturer must send Buyer written noticeof any such change in control or ownership or transfer of assets, merger oramalgamation within five (5) Business Days of such event.  Manufacturer agrees to periodically provideinformation to Buyer including, but not limited to, assets, liabilities,income, expenses, and equity in the event that Manufacturer is acquired orcontrolled by a private owner or limited number of owners.  This information will be used by Buyer toassess Manufacturer’s financial health in order to ensure appropriateallocation of new Products and on-going reliability of supply for existingProducts.**

 

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8.05         TerminationWithout Cause. ***

 

8.06         Effectof Termination.

 

(a)           *Damages. *Notwithstandingthe termination of this Agreement for any reason, each Party hereto shall beentitled to recover any and all Damages which such Party shall have sustainedby reason of the breach by the other Party hereto of any of the terms of thisAgreement.  Termination of this Agreementfor any reason shall not release either Party hereto from any liability whichat such time has already accrued or which thereafter accrues from a breach ordefault prior to such expiration or termination, nor affect in any way thesurvival of any other right, duty or obligation of either Party hereto which isexpressly stated elsewhere in this Agreement to survive such termination.  In the case of a termination under Section 8.02above, the Buyer may pursue any remedy available in law or in equity withrespect to such breach, subject to the terms of Section 20.01 (“Arbitration”)and Section 20.02 (“Mediation”).

 

(b) *****.

 

(c) *****

 

**ARTICLE 9 - DELIVERY; INVENTORY.**

 

9.01         Delivery.  All charges for packing, inter-plant hauling,storage and bar coding and Raw Material transportation to the Facilities, areincluded in the Price unless otherwise agreed to by the Parties. Buyer shall beresponsible for costs incurred by Manufacturer for custom pallets or packagingthat Buyer agrees, prior to incurring any such costs, is not standard or commonto industry requirement. Buyer may provide a Carrier routing guide forManufacturer to use with all shipments of Product and Raw Materials transportedby Buyer’s Directed Materials Carriers. Unless otherwise agreed to by both Parties or a Product shipment islate, short, defective or otherwise incomplete or not in compliance with the termsherein, Buyer shall pay all delivery charges for Product shipped from theFacilities to the destination as directed by Buyer.  If a Product shipment is late, short,defective or otherwise incomplete or not in compliance with the terms herein,then Buyer may use expedited shipping and Manufacturer shall be responsible forall shipping costs and expenses incurred by Buyer in connection 

 

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therewith, except if the Product shipment is late, short or otherwiseincomplete because Buyer’s Directed Supplier of Raw Materials was late indelivery of Raw Materials (and such delay was not caused by or as a result ofManufacturer) or such Raw Materials were defective.  If the Manufacturer accepts a Purchase Orderfrom Buyer outside the Firm Zone with prior notice to Buyer that incrementalshipping charges will be incurred, Buyer shall be responsible for anyincremental shipping expenses.  Allshipments must be accompanied by a legible Load Packing List and a VICS standardbill of lading. Manufacturer agrees to promptly forward the a copy of bill oflading and other shipping receipt for each shipment in accordance with Buyer’swritten instructions.  Manufacturerfurther agrees to promptly render, after delivery of goods or performance ofservices, correct and complete invoices to Buyer.

 

9.02         Shipment.Manufacturer will pack all Product ordered hereunder in a manner suitable forshipment and sufficient to enable the Product to withstand the effects ofshipping, including handling, during loading and unloading and in compliancewith applicable shipment guidelines and specifications as provided in writingto Manufacturer by Buyer in order to avoid damage to Product.  Product must be shipped on pallets and inaccordance with Buyer Specifications, and all Product shipped on the palletmust be of the same universal product code (“UPC”) and lot number.  The risk of loss with respect to Productshall remain with Manufacturer until such time that Product leaves the Facilityon the designated Carrier, at which time, the risk of loss for the Productshall transfer to Buyer.  Buyer shallprovide claims responsibility while the Product is in transit from leaving theFacility to unloading at the Buyer’s facility or such other location asdesignated by Buyer as the point of delivery. Manufacturer shall be responsible for arranging for the pick-up ofshipments of Product with the designated Carrier.

 

9.03         Inventory.  Manufacturer will maintain inventory ofProducts on a first-in, first-out basis. Manufacturer and Buyer agree to cooperate to improve the process forordering Products.

 

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9.04         Technology andStandards.  Manufacturer shallconform to Buyer Specifications regarding labeling of Product shipments.  Throughout the Term, Manufacturer may berequired to provide specific labeling information including “smart labels”,which would encompass all pertinent data via a barcode or other. Manufactureragrees to provide any necessary systems and equipment for compliance with suchrequirement and to comply with such requirement, if so requested to do so byBuyer, at Buyer’s cost.  Manufacturerwill implement and incur the expense for any systems and hardware that isneeded to implement, uphold or remain consistent with industry practices andstandards.

 

**ARTICLE 10 - INSPECTION**

 

10.01                     Facilities.

 

(a)           Buyer Audit.  Manufacturer grants Buyer the right to auditor to appoint third parties to audit, at any reasonable time during normalbusiness hours, the Facilities and the documentation demonstrating Manufacturer’ssatisfactory performance of, and performance with, its manufacturingobligations under this Agreement.  Buyerwill notify Manufacturer at least twenty (20) Business Days in advance of suchan audit. Buyer may exercise such right not more than once in any calendar yearsave and except for situations where a single audit or event revealssignificant concerns from the perspective of Buyer, acting reasonably, thatrequire appropriate additional audit follow-up.   Any third party appointed by Buyer toperform such an audit shall at all times be bound by obligations ofconfidentiality and non-disclosure of Manufacturer’s confidential informationand agree to disclose to Buyer only such information as is necessary todetermine if Manufacturer is performing its manufacturing obligations inaccordance with this Agreement.   It isfurthermore agreed that the on-site availability of Buyer or such third partyshall have no bearing on Manufacturer’s production schedule as Manufacturershall be authorized and entitled to proceed with same in the absence of Buyer’srepresentative.  Buyer shall makereasonable efforts to leverage audits or consolidate auditing activities withother 

 

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Affiliates in order to minimize auditing activities atManufacturer.  Audit results will beprovided to Manufacturer by Buyer to the extent Buyer deems appropriate.

 

(b)           Inspection byGovernmental Authorities. Manufacturer shall permit inspections of the Facility by GovernmentalAuthorities of all relevant territories (such as the FDA, HPFBI or equivalentforeign regulatory authorities) with respect to the fulfillment of anyrequirement for any License or as otherwise necessary to fulfill theobligations herein during the Term of this Agreement and, if necessary,thereafter.

 

10.02       Records. Buyershall have the right to audit Manufacturer’s records relating to itsperformance under this Agreement. Manufacturer shall maintain all batch records and other manufacturingand analytical records, all records of shipments of Product and all validationdata and other applicable records for the greater of (a) as required byapplicable law and regulation or (b) the time periods set forth in theQuality Agreement.  Manufacturer shallmake such data available to Buyer and Regulatory Authorities upon Buyer’sreasonable request or if required by law.

 

**ARTICLE 11 - QUALITY/LABELVERIFICATION/DEFECTIVE PRODUCT/INSPECTIONS/TESTING**

 

11.01       Quality.   Mutualquality roles and responsibilities are defined in the Quality Agreement andeach Party shall fulfill such responsibilities.

 

11.02       Electronic LabelVerification.  Manufacturer shallelectronically scan every Product to ensure that the label and any labeled RawMaterial (i.e.:  printed tube, carton,patient information circular and any other pre-printed Raw Material) utilizedin the manufacture of the Product meet Specifications for such Product beforeallowing Product to be shipped from the Facility.  If the label or labeled Raw Materials are notaccurate, Manufacturer will not allow such Product to be shipped to Buyer.  Buyer and Manufacturer agree that therequirements for 

 

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electronic label verification may change over the Term of theAgreement.  Buyer will notifyManufacturer of any such changes in writing, and the Parties shall negotiate aneffective date for such changes in good faith. In the event there are costs involved for any change requested by Buyer,this will be the sole responsibility of the Buyer.

 

11.03       Disposition ofDefective Product.  Without prejudiceto any other remedy that Buyer may have, Manufacturer shall replace at its owncost and expense, including reimbursement of freight and disposition costsincurred by Buyer, Product that fails to comply with the Specifications or hasany such defects, except if such defects or failure to comply withSpecifications is due to improper storage or handling by a Designated or OtherCarrier, Buyer, Buyers Affiliates, or any customers of the Buyer. Buyer shallnotify Manufacturer of the existence and nature of any non-compliance or defectand Manufacturer shall have a reasonable opportunity, not to exceed ten (10) BusinessDays from receipt of notification, to inspect such defective Product which ten (10) BusinessDays shall commence as of the date the Manufacturer receives such allegedlydefective Product.****Buyer shallhave no obligation to pay for any Product that is subject to such a claim ofnon-compliance or defect and Manufacturer shall reimburse Buyer for all direct,out-of-pocket costs incurred by Buyer in connection with such Product,including, without limitation, shipping of the Product and disposition costs,except if such defects or failure to comply with Specifications is due toimproper storage or handling by a Designated Carrier, Buyer or any customers ofthe Buyer.  Buyer will control thedisposition process.  If Manufacturerfails to so inspect such defective Product, Buyer may dispose of such defectiveProduct as it sees fit and Manufacturer shall promptly (1) reimburse Buyerfor all direct, out-of-pocket costs incurred by Buyer in connection with suchProduct, including without limitation, shipping of the Product and dispositionand (2) replace such defective Product at its own cost and expense.

 

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11.04                     Independent Testing. If,after Manufacturer’s inspection of such Product, the Parties disagree as to theProduct’s conformance to the Specifications or whether the Product has such adefect, either Party may deliver the Product to an independent third-partylaboratory, mutually and reasonably acceptable to both Parties, for analyticaltesting to confirm the Product’s conformance to the Specifications or thepresence or absence of defects. All costs associated with such third-partytesting shall be at Buyer’s expense unless the tested Product is deemed by suchthird-party to be defective or not in compliance with the Specifications, inwhich case all such costs, including reimbursement of freight and dispositioncosts, shall be promptly paid by Manufacturer. For greater clarity, if theProduct is not found to be defective or is found in compliance with theSpecifications, Buyer shall reimburse Manufacturer for all freight andtransportation costs and all late fees, if the Product Price has not been paidin accordance with the terms of Section 3.10 herein. No payment forProduct by Buyer or any third-party agent of Buyer shall constitute acceptanceby Buyer thereof, nor shall any inspection or testing be in lieu orsubstitution of any obligation of Manufacturer for testing, inspection andquality control as provided in the Specifications or under applicable local,state, provincial or federal laws, rules, regulations, standards, codes orstatutes.

 

11.05                     Disposition of Defective RawMaterials. Manufacturer shall inspect all Raw Materials upon arrival at theFacility. Manufacturer shall be responsible for ensuring that defective RawMaterials are identified upon receipt and Buyer shall be responsible forresolving any issues (quality or otherwise) that arise in connection with theRaw Materials directly with the Suppliers. Manufacturer shall not invoice Buyerfor, nor shall Buyer be liable to Manufacturer for, any defective RawMaterials.

 

11.06                     Reports. Upon Buyer’swritten request, Manufacturer shall from time to time promptly provide Buyerwritten reports relating to any aspects of the Product that are identified inthe Specifications. Notwithstanding the immediately preceding sentence, 

 

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Manufacturer shall provideBuyer (without a written request) with those reports identified in the QualityAgreement which Manufacturer is obligated thereunder to provide to Buyer.

 

11.07                     Corrective Action. In theevent any governmental agency having jurisdiction shall request or order, or ifBuyer shall determine to undertake, any corrective action with respect to anyProduct (or any finished product containing or contained in any Product),including any recall, corrective action or market action, and the cause or basisof such recall or action is attributable solely to a breach by Manufacturer ofany of its warranties, guarantees, representations, obligations or covenantscontained herein, then Manufacturer shall be liable, and shall reimburse Buyerfor the reasonable costs of such action including the cost of any Product (orany finished product containing or contained in any Product) which is affectedthereby.

 

11.08                     Product Complaints. In theevent Manufacturer receives any Product complaints, Manufacturer shall immediatelynotify Buyer of such complaint and in no event more than two (2) BusinessDays after receipt of such complaint.

 

11.09                     Regulatory Inspections. Inthe event the Facility is the subject of an inspection by any RegulatoryAuthority or any other duly authorized agency of any national, state,provincial or local government directly relating to the manufacturing,packaging or warehousing of the Product, WIP Product or the Raw Materials,Manufacturer shall notify Buyer within two (2) Business Days of learningof such inspection Manufacturer agrees to promptly notify Buyer of anyinspection by any Regulatory Authority pending as of the date hereof or asnotice of same may arise and shall keep Buyer informed of the resolution of thematter with the relevant Governmental Authority. Manufacturer shall supplyBuyer with copies of any correspondence or portions of correspondence to theextent relating to the Products, WIP Products or the Raw Materials, includingany communications to or from any Regulatory Authority (including the reportingof adverse drug experiences or field alerts) which might adversely affectManufacturer’s ability to perform its obligations under this Agreement.

 

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Manufacturer shall be authorizedto redact all information not pertaining to the Products. In the eventManufacturer receives any regulatory letter or written comments from anyRegulatory Authority in connection with manufacturing and packaging of theProducts hereunder, it shall provide Buyer with a copy of each suchcommunication. To the extent Manufacturer is required to submit anycorrespondence to a Regulatory Authority that relates to the manufacture,packaging or warehousing of the Product, WIP Products or the Raw Materials,Manufacturer shall provide Buyer with a copy of such correspondence as far inadvance of its submission to such Regulatory Authority as possible and Buyershall have the opportunity to review and comment upon such correspondence, butin no event shall Buyer review hinder submission of correspondence to suchRegulatory Authority in the allotted time period.

 

**11.10**                     Testing.Manufacturer shall perform all marketed Product stability testing and othertesting and release activities in accordance with the Specifications, cGMPs,the Quality Agreement and the other terms of this Agreement. Manufacturer shallprovide Buyer with a copy of all test results.

** **

**11.11**                     Safety. Manufacturershall enforce safety procedures for its manufacturing, packaging and storing ofthe Products, WIP Products and Raw Materials and handling and disposal of wasterelating thereto that comply with all federal, state, provincial and localenvironmental and occupational safety and health requirements. Manufacturerwill pass all safety audits performed by, or at the request of, Buyer with an “Acceptable”rating. Failure to do so, or to remedy any failures identified in the safetyaudit within a mutually agreed upon timeframe to the Buyer’s satisfaction shallbe a breach of this Agreement. Such responsibilities shall include the properdisposal of waste in an appropriate manner consistent with the nature of thewaste and at a permitted disposal facility.

** **

**11.12**                     Storage.To the extent any Product, WIP Product or Raw Material is stored, Manufacturershall store such Product, WIP Product and Raw Material in a controlled 

 

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**environment that meets the Specifications, cGMPs and all otherapplicable laws, rules and regulations in the Territory, and has been pre-approvedby the Buyer. Manufacturer will implement and enforce security precautions toprevent unauthorized access to the Products, WIP Products and Raw Materialswhile in the control of Manufacturer.**

** **

**(a)**                                  Shipping Responsibilities. The Products ordered by Buyer pursuant to thisAgreement shall be deemed delivered by Manufacturer to Buyer once delivered onthe Facilities’ loading docks EX WORKS (Incoterms 2000). Shipment of theProducts shall be at Buyer’s sole cost and expenses. Buyer shall be liable forany and all transportation charges, including without limitation freight,duties and taxes levied in connection with the supply of Products and shipmentof same. Manufacturer shall arrange for the shipment of the Products inaccordance with Buyer’s instructions. Buyer shall select and retain the Carrierand insurance company for shipping of the Products in accordance with the termsof this Agreement. Buyer shall provide Manufacturer with its Carrier’s name andaccount number and its insurance company contact information. Manufacturer willschedule freight pick up with Buyer’s selected Carrier and complete thedocumentation on behalf of Buyer for each shipment of Product by using Buyer’saccount number. All costs and invoices shall be charged by Buyer’s selectedCarrier directly to Buyer for all third party costs related to same.

** **

**(b)**                                 Transfer of Title. Notwithstanding anything to the contrary, title to and risk for theProducts supplied to Buyer under this Agreement passes to Buyer EX WORKS(Incoterms 2000) Manufacturer’s Facilities loading docks, at the time theProducts are placed on the Facilities’ loading docks at Buyer’s disposal, notcleared for export and not loaded on any collecting vehicle. Manufacturer shallnot be liable to Buyer for the costs of loss of any kind arising out of or inrelation to damage to or loss of the Products, however caused, which occursafter title to and risk for the Products passes to Buyer, nor shall anyliability of Buyer to Manufacturer under this Agreement be diminished orextinguished by reason of such loss or 

 

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**damage. For greater certainty, Buyer shall be liable for all costs andrisks of loss while Products are in transit.**

** **

11.13                     Shortages. Manufacturershall notify Buyer in writing of any shortage in any shipment of Product (whencompared to the amount claimed in the invoice for such shipment) within ***after delivery of such shipment. Buyer shall notify Manufacturer in writing ofany shortage in any shipment of Product (when compared to the amount claimed inthe invoice for such shipment) within *** of receipt of shipment by Buyer. Manufacturershall refund to Buyer the Price paid for the quantity of the shortfall.

 

**ARTICLE 12 - FAILURE TO SUPPLY; FORCE MAJEURE**

 

12.01                     Force Majeure Events. Ifeither Party is prevented from performing any of its obligations hereunder dueto any cause which is beyond the non-performing Party’s reasonable control,including fire, explosion, flood, or other acts of God; acts, regulations, orlaws of any government; war or civil commotion; strike, lock-out or labordisturbances; or failure of public utilities or common Carriers, riots, arrestsof people, terrorist actions, rebellion or sabotage, failure of fuel or watersupply or ice, lightning, epidemic, hydro electric power failures, or any delayor failure by a Governmental Authority to issue any relevant permit or ordernot caused by the act or omission of the Party (a “Force Majeure Event”),such non-performing Party shall not be liable for breach of this Agreement withrespect to such non-performance to the extent any such non-performance is dueto a Force Majeure Event. The non-performing Party is required to provideimmediate written notice to the other Party of the Force Majeure Event. Suchnon-performance will be excused for three months under these conditions or aslong as such event shall be continuing (whichever occurs sooner), provided thatthe non-performing Party gives immediate written notice to the other Party ofthe Force Majeure Event.

 

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Furthermore, suchnon-performing Party shall exercise all commercially reasonable efforts toeliminate the Force Majeure Event and to resume performance of its affectedobligations as soon as practicable. If Manufacturer has a Force MajeureEvent that remains unresolved after ninety (90) days, then Buyer may choose,but shall not be obligated, to terminate the Agreement with such termination tobe effective thirty (30) days following Manufacturer’s receipt of writtennotice from Buyer of such termination, without payment of any penalty, exceptfor any payment owed and outstanding to Manufacturer at said date or for anyRaw Materials or other Materials ordered at request of Buyer during said periodand reimbursement for any outstanding payment of the ***.

 

12.02                     Failure to Supply.

 

In the event that any of the following occur: (a) Manufacturernotifies Buyer in accordance with Section 4.03 that Manufacturer will notbe able to fulfill Buyer’s Purchase Order as requested by Buyer and whichPurchase Order was requested in accordance with the terms herein (e.g., Buyer’srequested dates for delivery of Purchase Orders must comply with therequirements in Article 4 (except for those Purchase Orders that could notbe completed as a result of Direct Supplier’s failure to supply as described inSection 4.03(a) ; (b) Manufacturer fails to fulfill the PurchaseOrder in accordance with the terms herein; (c) Buyer has sent Manufacturera notice of termination in accordance with Section 8.01 or 8.02(regardless of whether or not Manufacturer is attempting to correct such breachthat triggered Buyer’s notice within Manufacturer’s thirty (30) day cureperiod); or (d) Manufacturer is otherwise unable or unwilling to supplyProduct that complies with the requirements herein in such quantities as Buyershall request and in compliance with the delivery periods set forth in theapplicable Purchase Order (whether due to the occurrence of a Force MajeureEvent or otherwise) (each of (a) through (d) are referred to as a “Failureto Supply”), then (i) immediately following such Failure to SupplyBuyer may, in addition to any other rights and remedies hereunder, purchaseProduct from another manufacturer

 

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or manufacture such Product for itself; (ii) Manufacturer shall provide Buyer and such other manufacturerwith assistance, as reasonably requested, in connection with such manufacturer’sor Buyer’s efforts to supply such Product to Buyer; (iii) Buyer shall haveno obligation to purchase such ordered Product from Manufacturer for sale ordistribution in the Territory or otherwise until any contractual obligationsthat Buyer has assumed in connection with producing the same or obtaining suchsubstitute source of supply shall have terminated or if Buyer opts tomanufacture internally, until Buyer can reasonably resume purchasing Productfrom Manufacturer without any additional cost to Buyer; (iv) Buyer shallhave no obligation to affirmatively terminate any such contractual arrangementsor, if Buyer opted to manufacture Product internally, cease manufacturinginternally prior to such time that Buyer could revert to Manufacturer withoutincurring any cost; and (v) Manufacturer shall make available to Buyer orits designee access to all technical and proprietary materials, information andtechniques necessary or helpful for Buyer to procure required Raw Materials orProduct or arrange an alternative supplier of Raw Materials or Product. Notwithstandinganything to the contrary contained in this Agreement, in the event that Buyershall make or have made Product, pursuant to this Section 12.02, Buyershall be permitted to disclose to any third party any Confidential Informationas is reasonably necessary in connection with such activities (subject to suchthird party agreeing in writing to be bound by the terms of Article 15hereof), save and except for the direct labour (variable costs), fixed overheadcosts and profit margins of the Manufacturer.

 

**ARTICLE 13 - INSURANCE**

 

Manufacturer agrees to procure and maintainin full force and effect during the Term of this Agreement valid andcollectible insurance policies in connection with its activities ascontemplated hereby which policies shall be in compliance with Schedule Dattached hereto and incorporated herein. Upon Buyer’s request, Manufacturershall provide to Buyer a certificate 

 

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of coverage or other writtenevidence reasonably satisfactory to Buyer of such insurance coverage.

 

**ARTICLE 14 - LABELING; ARTWORK; PROPRIETARY RIGHTS**

 

14.01                     Packaging. Buyer shall havethe right to determine the appearance and text of any labeling and packagingused in connection with any Product or any finished product containing orcontained in any Product. If there is to be change to any artwork for anyProduct, at least sixteen (16) weeks prior to the intended first delivery dateof such Product with such changed artwork, Buyer shall provide to the Manufacturer,at no cost, digital artwork in a format acceptable to the Manufacturer and incompliance with the packaging specifications for such Product. ***.

 

14.02                     Intellectual Property. Manufactureracknowledges that Buyer is the exclusive owner of and has all rights to thetrademarks, tradedress, copyrights, slogans, artwork and all other intellectualproperty that appear on or are otherwise used in connection with the sale anduse of the Products. Any inventions, improvements or ideas relating to the subjectmatter of this Agreement, which are conceived and/or reduced to practice by theManufacturer in connection with or during its performance under this Agreementshall be the property of the Buyer. Manufacturer will, without expense to Buyerother than reasonable payment for time involved and any actual expensesincurred, execute, acknowledge and deliver to Buyer all documents required byBuyer to protect such inventions, improvements or ideas by patent or otherwisein any and all countries of the world and to vest title to said patents,inventions, improvements or ideas in Buyer, and further render such assistanceto Buyer as may be required in any patent office proceeding or litigationinvolving said inventions, improvements or ideas.

 

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**ARTICLE 15 - CONFIDENTIALITY**

 

Neither Party shall use or disclose to thirdparties any Confidential Information of the other (except to comply with itsobligations under this Agreement) and each Party shall ensure that its and itsAffiliates’ employees, officers, representatives and agents shall not use ordisclose to third parties any Confidential Information and upon the terminationof this Agreement shall return to the other or destroy all ConfidentialInformation in written or electronic form, save and except for one copy to bekept for archival purposes by the legal department of each Party to determinecompliance with the obligations herein. Confidential Information shall notinclude information that (i) was already known to receiving Party at thetime of its receipt thereof or is independently developed by receiving Party,as evidenced by its written records, (ii) is disclosed to receiving Partyafter its receipt thereof by a third party who, receiving Party in good faithbelieves, has a right to make such disclosure without violating any obligationof confidentiality or (iii) is or becomes part of the public domainthrough no fault of receiving Party.

 

**ARTICLE 16 - PUBLIC ANNOUNCEMENTS**

 

16.01                     Publicity. (a) TheParties hereto covenant and agree that, except as provided for herein below,each will not from and after the date hereof make, issue or release any publicannouncement, press release, statement or acknowledgment of the existence of,or reveal publicly the terms, conditions and status of, the transactionscontemplated herein, without the prior written consent of the other Party as tothe content and time of release of and the media in which such statement orannouncement is to be made; provided, however, that in the case ofannouncements, statements, acknowledgments or revelations which either Party isrequired by applicable law, regulation, court order or order of a regulatoryauthority to make, issue or release, the making, issuing or releasing of anysuch announcement, statement, acknowledgment or revelation by the Party sorequired to do so by law shall not constitute a breach of this Agreement ifsuch Party shall have given, to the extent reasonably possible, not less thantwo (2) calendar

 

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days prior notice to the otherParty, and shall have attempted, to the extent reasonably possible, to clearsuch announcement, statement, acknowledgment or revelation with the other Party.The discloser shall however not be prevented from complying with said courtorder, order of a regulatory authority, regulatory or applicable law if theParty whose Information is being disclosed does not seek an appropriate orderwithin the prescribed delay for the discloser to comply with the court orregulatory order, or applicable requiring disclosure. Manufacturer shall notuse the name of Buyer or any of its Affiliates for advertising or promotionalpurposes without the prior written consent of Buyer. In furtherance of theforegoing, Manufacturer shall not originate any publicity or otherannouncement, written or oral, whether to the public, the press, the trade,Buyer’s or Manufacturer’s customers or otherwise, relating to this Agreement orthe existence of an arrangement between the parties, without the prior writtenapproval of Buyer, except if such announcement is required by law, regulation,court order or order of a regulatory authority.

 

(b) The Parties acknowledge thatManufacturer may be required to file this Agreement as an exhibit to its Form 20-Ffiling and its Canadian Annual Information Form filings in 2008 orthereafter as a material contract. If Manufacturer’s US counsel (or Canadiancounsel for the Canadian filings) determines that in its legal opinion inwriting such a filing must be made, Manufacturer will seek confidentialtreatment for this Agreement and shall use all reasonable efforts to protectthe confidentiality of this Agreement. Provided Manufacturer is successful in itsefforts to obtain confidential treatment for this Agreement, Manufacturer shallprovide Buyer with a sufficient opportunity to review the redacted version ofthe Agreement before submission; and to the extent Manufacturer is able to doso by law, Manufacturer will incorporate Buyer’s comments.

 

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**ARTICLE17 - REPRESENTATIONS AND WARRANTIES**

 

17.01       Warranties. Manufacturer represents and warrants to Buyer that all Product suppliedin connection with this Agreement shall be free from defects in material andworkmanship and shall be manufactured and provided in accordance and conformitywith the Specifications and in compliance with this Agreement and allapplicable legal requirements, including, without limitation, cGMPs.  Manufacturer represents and warrants that itshall comply with all present and future statutes, laws, ordinances andregulations relating to the manufacture, packaging, storage and supply of theProducts being provided hereunder, including, without limitation, thoseenforced by the United States Food and Drug Administration (includingcompliance with good manufacturing practices) and other applicable RegulatoryAuthority.  Manufacturer represents andwarrants that it will hold all licenses, permits and similar governmentalauthorizations necessary or required for Manufacturer to conduct its operationsand business and manufacture the Products throughout the Term.  Manufacturer represents and warrants that anyProducts that have been stored until delivery or WIP Products and/or RawMaterials stored until use, shall have been stored under appropriate and secureconditions and in accordance with cGMPs and any other requirements in suchTerritory.  Manufacturer represents andwarrants that Product supplied in connection with this Agreement will not containany WIP Product and Raw Materials that have not been tested, used or stored inaccordance with the Specifications, quality assurance standards instructed byBuyer and all applicable governmental standards.  Manufacturer represents and warrants that itwill maintain all equipment used in connection with the manufacturing,packaging and supplying of Product hereunder in good working condition and inaccordance with all applicable laws, rules and regulations.

 

17.02       Execution and Performance of Agreement.  Manufacturer and Buyer each represents to theother that it has full right, power and authority to enter into and perform itsobligations under this Agreement. Manufacturer and Buyer each further represents and warrants 

 

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to the other that the performance of itsobligations under this Agreement will not result in a violation or breach of,and will not conflict with or constitute a default under any agreement,contract, commitment or obligation to which such Party or any of its Affiliatesis a Party or by which it is bound.

 

17.03       Buyer Representations andWarranties.

 

(a)           Representationsand Warranties.  Buyer represents andwarrants to Manufacturer that:

 

(i)            it shall obtain and maintain allnecessary permits, registrations and licenses required for it to perform itsobligations under this Agreement;

 

(ii)           to the best of Buyer’s knowledge themanufacturing of the Products by Manufacturer to Buyer pursuant to thisAgreement will not constitute an infringement, misappropriation or violation ofany Intellectual Property of a third party;

 

(iii)          it shall provide the Specificationsnecessary to manufacture the Products in accordance with the terms herein toManufacturer and shall provide such other information Buyer deems necessary(e.g., validation protocol) for Manufacturer to manufacture the Products inaccordance with the terms herein and, upon reasonable notice from Manufacturer,Buyer shall make certain of its employees available to Manufacturer to respondto questions about such information; and

 

(iv) Buyershall carry and keep in good force during the term of this Agreement insurancecoverage in such form and amount as a reasonable party in similar circumstanceswould carry and keep in order to fulfill its obligations hereunder. Buyer shallsubmit a certificate of such insurance (which shall include such information)to Manufacturer for its approval within thirty (30) days of the date ofsignature of this Agreement.  If suchcertificate is not furnished within thirty (30) days, Manufacturer shall notifyBuyer in writing and give Buyer thirty (30) days to 

 

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curesuch breach.  If Buyer fails to providethe certificate during such thirty (30) day cure period, Manufacturer may, atits option, immediately terminate this Agreement or any amendment thereof.

 

**ARTICLE18 -COMPLIANCE**

** **

18.01       Compliance with Certain Laws.  Manufacturer agrees to comply at all timeswith all laws, executive orders, rules and regulations of all governmentsand legislative authorities having jurisdiction over its business andactivities. Specifically, Manufacturer agrees to comply with the applicableprovisions of any federal or provincial law and all executive orders, rules andregulations issued thereunder, whether now or hereafter in force, prohibitingdiscrimination against any employee or applicant for employment because ofrace, color, religion, sex or national origin; prohibiting discriminationagainst any employee or applicant for employment because of physical or mentalhandicap; and any fair labor acts, laws or rules.

 

18.02       Compliance with Policy on the Employment of Young Persons.Manufacturer and its officers have read and understand the Johnson &Johnson Policy on the Employment of Young Persons (the “Policy”).  In the manufacture and supply of all Productshereunder, Manufacturer shall employ young persons only as permitted by thePolicy.  Manufacturer shall permitrepresentatives of Buyer to enter Manufacturer’s premises at any reasonabletime, and Manufacturer shall ensure that representatives of Buyer shall bepermitted to enter the premises of any subcontractor involved in themanufacture or supply of any Products (or component thereof) at any reasonabletime, in order to inspect relevant employment, health and safety records and toobserve the manufacturing process. Manufacturer (and its subcontractors) shall maintain the recordsnecessary to demonstrate compliance with the Policy and shall provide to Buyera written certification of such compliance annually during the Term of thisAgreement.  If Manufacturer shall fail tocomply with this Section, then Buyer shall have the right to terminate thisAgreement forthwith, effective upon 10 days’ prior written notice, and 

 

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withoutpayment of any penalty or termination fee, save and except any amount owed andoutstanding ***.

 

18.03       Compliance with Environmental, Safety, and IndustrialHygiene.  With respect to allenvironmental, safety and industrial hygiene matters related to Manufacturer’sactivities under this Agreement, Manufacturer shall (a) certify materialcompliance with all applicable laws and regulations issued by federal,provincial and local authorities, (b) inform Buyer promptly of anysignificant adverse event (e.g., fires, explosions, accidental discharges), (c) informBuyer promptly of any allegations or findings of material violations ofapplicable laws or regulations, (d) allow Buyer to inspect the Facilitiesif notified of adverse event, such inspections to be at reasonable times andupon reasonable written notice.  IfManufacturer shall fail to comply with any of the conditions in this Section,then Buyer shall have the right to terminate this Agreement forthwith,effective upon ten (10) Business Days’ prior written notice, and withoutpayment of any penalty or termination fee, save and except any amount owed andoutstanding ***.

 

**ARTICLE19 -INDEMNIFICATION**

** **

19.01       Indemnification by Manufacturer.  Manufacturer shall indemnify and holdharmless Buyer (and its Affiliates) from and against any and all directdamages, liabilities, claims, costs, charges, judgments and expenses (includingreasonable attorneys’ fees) (collectively “Damages”) that may be sustained,suffered or incurred by Buyer (or its Affiliates), arising directly from or byreason of (a) the breach by Manufacturer of any warranty, representation,covenant or agreement made by Manufacturer in this Agreement; or (b) actualor alleged injury to person or property or death occurring to any ofManufacturer’s employees, subcontractors, invitees, agents or individuals onManufacturer’s premises; (c) any Product that does not conform to theSpecifications and other requirements set forth herein; 

 

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(d) Manufacturer’s manufacture, packaging orsupply of Products under this Agreement if not in accordance with theSpecifications; or (e) Manufacturer’s negligence or willful misconduct.

 

19.02       Indemnification by Buyer.  Buyer shall indemnify and hold harmlessManufacturer (and its Affiliates) from and against any and all Damages, thatmay be sustained, suffered or incurred by Manufacturer (or its Affiliates)arising directly from or by reason of (a) the breach by Buyer of anywarranty, representation, covenant or agreement made by Buyer in thisAgreement, (b) Buyer’s negligence or willful misconduct, (c) anyactual or alleged injury to person or property or death occurring to any ofBuyer’s employees, invitees, agents or individuals while on Manufacturer’spremises due to the negligence of said employees, invitees, agents orindividuals or (d) a claim that the sale of the Product infringes,misappropriates or violates another party’s patented intellectual property.

 

19.03       Claims.  Eachindemnified Party agrees to give the indemnifying Party prompt written noticeof any matter upon which such indemnified Party intends to base a claim forindemnification (an “Indemnity Claim”) under this Article 19.  The indemnifying Party shall have the rightto participate jointly with the indemnified Party in the indemnified Party’sdefense, settlement or other disposition of any Indemnity Claim.  With respect to any Indemnity Claim relatingsolely to the payment of money damages and which could not result in the indemnifiedParty’s becoming subject to injunctive or other equitable relief or otherwiseadversely affect the business of the indemnified Party in any manner, and as towhich the indemnifying Party shall  haveacknowledged in writing the obligation to indemnify the indemnified Partyhereunder, the indemnifying Party shall have the sole right to defend, settleor otherwise dispose of such Indemnity Claim, on such terms as the indemnifyingParty, in its sole discretion, shall deem appropriate; provided that the indemnifyingParty shall provide reasonable evidence of its ability to pay any damagesclaimed and with respect to any such settlement shall obtain the writtenrelease of the indemnified Party from the Indemnity Claim.  The indemnifying Party shall obtain

 

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the written consent of the indemnified Partyprior to ceasing to defend, settling or otherwise disposing of any IndemnityClaim if as a result thereof the indemnified Party would become subject toinjunctive or other equitable relief or the business of the indemnified Partywould be adversely affected in any manner.

 

19.04       NEITHER PARTY SHALL BE ENTITLED TO SEEKPUNITIVE, INDIRECT, EXEMPLARY, CONSEQUENTIAL OR SPECIAL DAMAGES INCLUDING LOSSOF PROFITS FROM THE OTHER.

 

**ARTICLE20 -MISCELLANEOUS**

** **

20.01       Arbitration.           (a) Any dispute, claimor controversy arising from or related in any way to this Agreement or theinterpretation, application, breach, termination or validity thereof, includingany claim of inducement of this Agreement by fraud or otherwise, will besubmitted for resolution to arbitration pursuant to the rules thenpertaining of the CPR Institute for Dispute Resolution for Non-AdministeredArbitration (available at www.cpradr.org/arb-rules.htm), or successor (“CPR”),except where those rules conflict with these provisions, in which casethese provisions control.  Thearbitration will be held in New Jersey.

 

(b) The panel shallconsist of three arbitrators chosen from the CPR Panels of Distinguished Neutrals(or, by agreement, from another provider of arbitrators) each of whom is alawyer with at least 15 years experience with a law firm or corporate lawdepartment of over 25 lawyers or who was a judge of a court of generaljurisdiction.  In the event the aggregatedamages sought by the claimant are stated to be less than ***, and theaggregate damages sought by the counterclaimant are stated to be less than ***,and neither side seeks equitable relief, then a single arbitrator shall bechosen, having the same qualifications and experience specified above.  Each arbitrator shall be neutral,independent, disinterested, impartial and shall abide by The 

 

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CPR-Georgetown Commission Proposed Model Rule forthe Lawyer as Neutral available at www.cpradr.org/cpr-george.html.

 

(c) The Parties agreeto cooperate (1) to attempt to select the arbitrator(s) by agreementwithin 45 days of initiation of the arbitration, including jointly interviewingthe final candidates, (2) to meet with the arbitrator(s) within 45days of selection and (3) to agree at that meeting or before uponprocedures for discovery and as to the conduct of the hearing which will resultin the hearing being concluded within no more than nine (9) months afterselection of the arbitrator(s) and in the award being rendered within 60days of the conclusion of the hearings, or of any post-hearing briefing, whichbriefing will be completed by both sides within 45 days after the conclusion ofthe hearings.

 

(d) In the event theParties cannot agree upon selection of the arbitrator(s), the CPR will selectarbitrator(s) as follows: CPR shall provide the Parties with a list of noless than 25 proposed arbitrators (15 if a single arbitrator is to be selected)having the credentials referenced above. Within 25 days of receiving such list, the Parties shall rank at least65% of the proposed arbitrators on the initial CPR list, after exercising causechallenges.  The Parties may theninterview the five candidates (three if a single arbitrator is to be selected)with the highest combined rankings for no more than one hour each and,following the interviews, may exercise one peremptory challenge each.  The panel will consist of the remaining threecandidates (or one, if one arbitrator is to be selected) with the highestcombined rankings.  In the event theseprocedures fail to result in selection of the required number of arbitrators,CPR shall select the appropriate number of arbitrators from among the membersof the various CPR Panels of Distinguished Neutrals, allowing each sidechallenges for cause and three (3) peremptory challenges each.

 

(e) In the event the Parties cannot agree upon procedures fordiscovery and conduct of the hearing meeting the schedule set forth inparagraph c above, then the arbitrator(s) shall set dates

 

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for the hearing, any post-hearing briefing, and the issuance of theaward in accord with the paragraph c schedule.  The arbitrator(s) shall provide fordiscovery according to those time limits, giving recognition to theunderstanding of the Parties that they contemplate reasonable discovery,including document demands and depositions, but that such discovery be limitedso that the paragraph c schedule may be met without difficulty. In noevent will the arbitrator(s), absent agreement of the Parties, allow more thana total of ten days for the hearing or permit either side to obtain more than atotal of 40 hours of deposition testimony from all witnesses, including bothfact and expert witnesses, or serve more than 20 individual requests fordocuments, including subparts, or 20 individual requests for admission orinterrogatories, including subparts.  Multiplehearing days will be scheduled consecutively to the greatest extent possible.

 

(f) The arbitrator(s) mustrender their award by application of the substantive law of New Jersey and arenot free to apply “amiable compositeur” or “natural justice and equity.”  The arbitrator(s) shall render a writtenopinion setting forth findings of fact and conclusions of law with the reasonstherefor stated.  A transcript of theevidence adduced at the hearing shall be made and shall, upon request, be madeavailable to either Party.  Thearbitrator(s) shall have power to exclude evidence on grounds of hearsay,prejudice beyond its probative value, redundancy, or irrelevance and no awardshall be overturned by reason of such ruling on evidence.  To the extent possible, the arbitrationhearings and award will be maintained in confidence.

 

(g) In the event thepanel’s award exceeds *** in monetary damages or includes or consists ofequitable relief, or rejects a claim in excess of that amount or for thatrelief, then the losing Party may obtain review of the arbitrators’ award ordecision by a single appellate arbitrator (the “Appeal Arbitrator”) selectedfrom the CPR Panels of Distinguished Neutrals by agreement or, failingagreement within seven working days, pursuant to the selection procedures

 

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specified in paragraph d above. If CPRcannot provide such services, the Parties will together select another providerof arbitration services that can.  NoAppeal Arbitrator shall be selected unless he or she can commit to rendering adecision within forty-five days following oral argument as provided in thisparagraph.  Any such review must beinitiated within thirty (30) days following the rendering of the awardreferenced in paragraph (f) above.

 

(h) The Appeal Arbitratorwill make the same review of the arbitration panel’s ruling and its bases thatthe U.S. Court of Appeals of the Circuit where the arbitration hearings areheld would make of findings of fact and conclusions of law rendered by adistrict court after a bench trial and then modify, vacate or affirm thearbitration panel’s award or decision accordingly, or remand to the panel forfurther proceedings.  The AppealArbitrator will consider only the arbitration panel’s findings of fact andconclusions of law, pertinent portions of the hearing transcript andevidentiary record as submitted by the Parties, opening and reply briefs of theParty pursuing the review, and the answering brief of the opposing Party, plusa total of no more than four (4) hours of oral argument evenly dividedbetween the Parties.  The Party seekingreview must submit its opening brief and any reply brief within seventy-five(75) and one hundred thirty (130) days, respectively, following the date of theaward under review, whereas the opposing Party must submit its responsive briefwithin one hundred ten (110) days of that date. Oral argument shall take place within five (5) months after thedate of the award under review, and the Appeal Arbitrator shall render adecision within forty-five (45) days following oral argument.  That decision will be final and not subjectto further review, except pursuant to the Federal Arbitration Act.

 

(i) The Parties consentto the jurisdiction of the Federal District Court for the district in which thearbitration is held for the enforcement of these provisions and the entry ofjudgment on any award rendered hereunder (including after review by the AppealArbitrator

 

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where such an appeal is pursued). Should suchcourt for any reason lack jurisdiction, any court with jurisdiction shall actin the same fashion.

 

(j) Each Party has theright before or, if the arbitrator(s) cannot hear the matter within anacceptable period, during the arbitration to seek and obtain from theappropriate court provisional remedies such as attachment, preliminaryinjunction, replevin, etc. to avoid irreparable harm, maintain the statusquo, or preserve the subject matter of the arbitration.

 

a.                                       EACH PARTYHERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY.

 

b.                                      EACH PARTYHERETO WAIVES ANY CLAIM TO PUNITIVE, EXEMPLARY, CONSEQUENTIAL, SPECIAL ORINDIRECT DAMAGES INCLUDING LOSS OF PROFITS FROM THE OTHER.

 

c.                                       EACH PARTYHERETO WAIVES ANY CLAIM FOR ATTORNEYS’ FEES AND COSTS AND PREJUDGMENT INTERESTFROM THE OTHER.

 

20.02       Mediation.  (a) Any dispute, controversy or claimarising out of or related to this agreement, or the interpretation,application, breach, termination or validity thereof, including any claim ofinducement by fraud or otherwise, which claim would, but for this provision, besubmitted to arbitration shall, before submission to arbitration, first bemediated through non-binding mediation in accordance with The CPR MediationProcedure then in effect of the CPR Institute for Dispute Resolution (CPR)available at www.cpradr.org/m_proced.htm, except where that procedure conflictswith these provisions, in which case these provisions control.  The mediation shall be conducted in Trenton,New Jersey and shall be attended by a senior executive with authority toresolve the dispute from each of the operating companies that are Parties.

 

(b) The mediator shallbe neutral, independent, disinterested and shall be selected from aprofessional mediation firm such as ADR Associates or JAMS/ENDISPUTE or CPR.

 

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(c) The Parties shallpromptly confer in an effort to select a mediator by agreement.  In the absence of such an agreement within 10days of initiation of the mediation, the mediator shall be selected by CPR asfollows: CPR shall provide the parties with a list of at least 15 names fromthe CPR Panels of Distinguished Neutrals. Each Party shall exercise challengesfor cause, two peremptory challenges, and rank the remaining candidates within5 Business Days  of receiving the CPRlist.  The Parties may together interviewthe three top-ranked candidates for no more than one hour each and, after theinterviews, may each exercise one peremptory challenge.  The mediator shall be the remaining candidatewith the highest aggregate ranking.

 

(d) The mediator shallconfer with the Parties to design procedures to conclude the mediation withinno more than 45 days after initiation. Under no circumstances may the commencement of arbitration under Section 20.01above be delayed more than 45 days by the mediation process specified hereinabsent contrary agreement of the parties.

 

(e) Each Party agreesnot to use the period or pendency of the mediation to disadvantage the otherParty procedurally or otherwise.  Nostatements made by either side during the mediation may be used by the other orreferred to during any subsequent proceedings.

 

(f) Each Party has theright to pursue provisional relief from any court, such as attachment,preliminary injunction, replevin, etc., to avoid irreparable harm, maintain thestatusquo, or preserve the subject matter of the arbitration,even though mediation has not been commenced or completed.

 

20.03.      Relationship of the Parties.  The relationship of Buyer and Manufacturerestablished by this Agreement is that of independent contractors, and nothingcontained herein shall be construed to (i) give either Party any right orauthority to create or assume any obligation of any kind on behalf of the otheror (ii) constitute the Parties as partners, joint venturers, co-owners orotherwise as participants in a joint or common undertaking.

 

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20.04       Resources.  Buyer and Manufacturer recognize and agreethat their respective employees are valuable members of their respectiveorganizations.  In the event Manufactureror Buyer desires to directly solicit for employment or employ one of such Buyer’semployees or Manufacturer’s employees, as the case may be, then Manufacturershall, if possible under the circumstances, notify Buyer in advance of suchemployment and vice versa.  Failure to sonotify shall not be a breach of this Agreement. This provision shall have no impact on the indirect solicitation ofeither Party’s employees and shall impose no obligations or requests forcooperation in connection with such indirect solicitation (e.g., employment adsin any medium, calls from employment agencies, etc.).

 

20.05       Entire Agreement.  It is the mutual desire and intent of theParties to provide certainty as to their respective future rights and remediesagainst each other by defining the extent of their mutual undertakings asprovided herein.  The Parties have, inthis Agreement and the schedules which are attached hereto and are incorporatedherein by reference, incorporated all representations, warranties, covenants,commitments and understandings on which they have relied in entering into thisAgreement, and, except as provided for herein, neither Party makes any covenantor other commitment to the other concerning its future action.  Manufacturer acknowledges that anydiscussions that Manufacturer and its employees and representatives have hadwith Buyer and its employees and representatives and any commitments thateither Party may have made in the course of making the business arrangementscovered by this Agreement and negotiating the terms hereof, are not binding onthe Parties if not specifically included in this Agreement.  Accordingly, this Agreement (i) constitutesthe entire agreement and understanding between the Parties with respect to thesubject matter hereof and there are no promises, representations, conditions,provisions or terms related thereto other than those set forth in thisAgreement and (ii) supersedes all previous understandings, agreements andrepresentations

 

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betweenthe Parties, written or oral.  Nomodification, change or amendment to this Agreement shall be effective unlessin writing signed by each of the Parties hereto, except as otherwisespecifically permitted herein.

 

20.06       Headings. The Article and Section headingscontained in this Agreement are for reference purposes only and shall notaffect in any way the meaning and interpretation of this Agreement.

 

20.07       Notices.  All notices and other communicationshereunder shall be in writing.  Allnotices hereunder of an Indemnity Claim, a Force Majeure Event, default orbreach hereunder, or, if applicable, termination or renewal of the Term hereof,or any other notice of any event or development material to this Agreementtaken as a whole, shall be delivered personally, or sent by national overnightdelivery service or postage pre-paid registered or certified mail, and shall bedeemed given:  when delivered, if bypersonal delivery or overnight delivery service, provided such delivery is on aBusiness Day and if not, then on the next Business Day; or if so sent by mail, five(5) Business Days after deposit in the mail, and shall be addressed:

 

if toManufacturer, to it at:16751 Trans Canada Highway

 
|            | Kirkland, Québec, Canada H9H 4J4  |
|-----------------|----------------------------------------|
|            | Attn: President                        |
|            | Facsimile:***                          |
|            |                                   |
| with a copy to: | DRAXIS  Health Inc.                    |
|            | 16751  Trans Canada Highway            |
|            | Kirkland,  Québec, Canada H9H 4J4 |
|            | Attn:  General Counsel and Secretary   |
|            | Facsimile:***                          |

 

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| If to Buyer:    | Johnson &  Johnson Consumer Companies, Inc. |
|-----------------|-----------------------------------------------------------|
|            | 199  Grandview Road                                       |
|            | Skillman,  NJ 08558                                       |
|            | Attention:  Director, Contract Manufacturing              |
|            |                                                      |
| With a copy to: | Johnson &  Johnson                               |
|            | Office  of General Counsel                                |
|            | One  Johnson & Johnson Plaza                     |
|            | New  Brunswick, NJ 08933                                  |
|            | Attn:***                                                  |

 

orto such other place as either Party may designate by written notice to the otherin accordance with the terms hereof.  Allother notices or requests for agreements or approvals by one Party to anotherwhich are of an operational nature shall be sent to in accordance with ScheduleG.

 

20.08       Failure to Exercise.  The failure of either Party to enforce at anytime for any period any provision hereof shall not be construed to be a waiverof such provision or of the right of such Party thereafter to enforce each suchprovision, nor shall any single or partial exercise of any right or remedyhereunder preclude any other or further exercise thereof or the exercise of anyother right or remedy.  Remedies providedherein are cumulative and not exclusive of any remedies provided at law.

 

20.09       Assignment and Subcontractors.  This Agreement may not be assigned by Buyerwithout the prior written consent of the Manufacturer, except that Buyer mayassign its rights and/or obligations hereunder to any of its Affiliates or to asuccessor to its business without Manufacturer’s consent. Manufacturer acknowledgesthat Buyer has entered into this Agreement after consideration of the uniquetalent, experience and particular attributes of 

 

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Manufacturerto manufacture and supply the Product. Therefore, this Agreement and all rights and obligations hereunder arepersonal to Manufacturer and may not be assigned or transferred by Manufacturerwithout the express written consent of Buyer, which consent may be withheld orgiven in Buyer’s discretion, except for any corporate reorganization of theManufacturer in which the ultimate control of the Manufacturer shall be thesame as the control on the Effective Date for which no consent shall benecessary. Any such assignment or attempted assignment or transfer in theabsence of the prior written consent of Buyer shall be void and without effectat the option of the Buyer.  Subject tothe foregoing sentence, this Agreement shall bind and inure to the benefit ofthe Parties hereto and their respective successors and assigns.  Manufacturer shall not subcontract any partof the manufacturing, packaging or supplying of the Products, testingprocedures or any of its other obligations hereunder to a third party withoutthe prior written consent of Buyer which shall not be unreasonably withheld ordelayed.

 

20.10       Severability.   In the eventthat any one or more of the provisions (or any part thereof) contained in thisAgreement or in any other instrument referred to herein, shall, for any reason,be held to be invalid, illegal or unenforceable in any respect, then to themaximum extent permitted by law, such invalidity, illegality orunenforceability shall not affect any other provision of this Agreement or anyother such instrument.  Any term orprovision of this Agreement which is invalid, illegal or unenforceable in anyjurisdiction shall, to the extent the economic benefits conferred by thisAgreement to both Parties remain substantially unimpaired, not affect thevalidity, legality or enforceability of any of the terms or provisions of thisAgreement in any other jurisdiction.

 

20.11       FurtherAssurances.  Upon reasonable requestfrom Buyer therefor, Manufacturer shall provide to Buyer, promptly, any Product samples, manufacturing information andother information as is necessary for Buyer to complete or obtain U.S. orforeign registration (including reimbursement arrangements) or approval in anyterritory where

 

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Buyer is allowed to sell product or use technology. TheProduct samples shall be provided at the Price and the delivery costs for sameshall be at the sole expense of the Buyer.

 

20.12       Counterparts.  This Agreementmay be executed in one or more counterparts, each of which shall be deemed anoriginal, but all of which together shall constitute one and the sameinstrument.

 

20.13       Expenses.  Each Party shall pay all of its own fees andexpenses (including all legal, accounting and other advisory fees) incurred inconnection with the negotiation and execution of this Agreement and thearrangements contemplated hereby.

 

20.14       Survival.   The final sentence of Section 5.02, Section 8.06,and Articles 11, 14, 15, 16, 17, 19 and 20 shall survive the termination ofthis Agreement in accordance with the respective terms thereof.  Following the termination or expiration,Manufacturer shall continue to provide marketed stability storage of Productsand testing for Products produced at Manufacturer’s Facilities as outlined inProduct Specifications.  Manufacturershall invoice Buyer for such services in the amount indicated on Schedule A ona per-occurrence basis.

 

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IN WITNESS WHEREOF, theparties hereto have caused this Agreement to be executed by their dulyauthorized respective representatives as of the day and year firstabove written.

 

 

JOHNSON &JOHNSON CONSUMER COMPANIES, INC.

 

 
| By:    | /s/***                       |   |   |   |
|--------|------------------------------|--------|--------|--------|
|   |                         |   |   |
| Name:  | ***                          |   |   |   |
|   |                         |   |   |
| Title: | Vice  President, Procurement |   |   |   |
|        |                              |        |        |        |  |  |  |

 

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DRAXISPHARMA,

 

adivision of DRAXIS Specialty Pharmaceuticals Inc.

 

 
| By:    | /s/***    |   |   |
|--------|-----------|--------|--------|
|   |      |   |
| Name:  | ***       |   |   |
|   |      |   |
| Title: | President |   |   |
|        |           |        |        |  |  |

 

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