**Exhibit 4.38**

 

CONFIDENTIAL COPY

 

**DISTRIBUTIONAGREEMENT**

 

This DistributionAgreement (this “Agreement”) is entered into this 12th day of July,2000, by and between Draximage, Inc., a Canadian corporation (“Draximage”), and Syncor InternationalCorporation, a Delaware corporation (“Syncor”).

 

WHEREAS, Draximagemanufactures Sodium Iodide I-131 solution (the “Product”) for oraladministration;

 

WHEREAS, Syncor is in thebusiness of compounding, marketing and selling radiopharmaceuticals; and

 

WHEREAS, Draximage wishesto grant, and Syncor wishes to obtain, the right to market, sell and distributethe Product in the Territory (as defined below) under the terms and conditionshereof;

 

NOW, THEREFORE, inconsideration of mutual covenants, agreements and conditions set forth herein,the parties hereby agree as follows:

 

**1.****                                      DEFINITIONS**

 

A.                                   “CalibrationDate” shall have the meaning ascribed to it in Section 4B.

 

B.                                     “FirstSale” shall have the meaning ascribed to it in Section 3.

 

C.                                     “InitialTerm” shall have the meaning ascribed to it in Section 3.

 

D.                                    “Product”shall mean Sodium Iodide I-131 solution for oral administration, formulated inaccordance with the product specifications described on Exhibit A attachedhereto, whether labeled as generic, private or other label.

 

E.                                      “Territory” shall mean all the states,territories and possessions of the United States of America and PuertoRico.

 

F.                                      “Trade” shall mean commercialradiopharmacies, hospitals, clinics and other private and governmental healthinstitutions in the Territory.

 

G.                                     “Trademarks” shall mean all those trademarksowned by Draximage and associated with the Product.

 

H.                                    “IndependentRadiopharmacies” shall mean ***

 

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**2.****                                      APPOINTMENT**

 

A.                                   Grant.   Draximagehereby appoints Syncor as its authorized distributor to market, sell anddistribute the Product to the Trade in the Territory. For purposes of theappointment, Syncor shall be entitled to compound unit doses for, anddistribute the Product in bulk form to, end users, such as hospitals, clinicsand mobile imaging services, as well as to distribute the Product to thirdparty radiopharmacy operators. ***

 

B.                                     Acceptanceof Appointment.   Syncor hereby accepts this appointment asdistributor for the Product in the Territory.

 

**3.****                                      TERM**

 

Subject to the provisionsof Section 11, this Agreement shall remain in effect from the date hereofuntil five years after Draximage makes the first sale of the Product to Syncor(the “First Sale”) after the Product has been approved by the U.S. Food andDrug Administration (the “FDA”) for commercial sale as an oral therapy solutionin the United States (such five-year period hereinafter referred to as the “InitialTerm”). This Agreement shall be automatically renewed for additional three-yearterms at the end of the Initial Term or any renewal term, as the case may be,unless either party notifies the other party at least six (6) months priorto the expiration of the Initial Term or a renewal term, as the case may be,that it does not intend to renew this Agreement upon expiration.

 

**4.****                                      RESPONSIBILITIESOF SYNCOR**

 

A.                                   ComplianceWith Regulations.   Syncor shall obtain, and shall maintainin good standing, all required permits and licenses necessary or advisable todistribute the Product in the Territory. Syncor shall comply with all laws, rules andregulations in force in the Territory, including those covering the sale of,and the payment for, the Product.

 

B.                                     StandingOrder Quantity.  Syncor shallpurchase from Draximage a *** sufficient to calibrate at least 20 Curies of theProduct by the time of the Calibration Date, at the purchase price set forth inSection 6 below.  The Product shallbe calibrated for noon on each *** that the Product is delivered to Syncor (the“Calibration Date”), except for Product shipped on the *** pursuant to Section 5Dherein, which shall be calibrated for ***. The maximum pre-calibration period for any shipment of Product shall befive (5) days from the date the shipment is shipped by Draximage.

 

C.                                     ShippingContainers.   Syncor shall provideDraximage, at Syncor’s expense, sufficient quantities of shielded shippingcontainers to be used by Draximage to transport

 

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shipments of the Productfrom its Kirkland, Quebec manufacturing facility to the destinations designatedby Syncor.

 

**5.****                                      RESPONSIBILITIESOF DRAXIMAGE**

 

A.                                   Draximageshall manufacture, package and label, store and ship the Product in a mannerappropriate for the Product and consistent with all applicable United StatesFederal, state, and local laws, rules, and regulations, including but notlimited to those regulations established by the FDA and the U.S. NuclearRegulatory Commission.

 

B.                                     Draximageshall use its best efforts to obtain as soon as reasonably possible, but beforeSeptember 30, 2000, the approval from the FDA for the commercial sale ofthe Product in the U.S., and to have its manufacturing facility in Kirkland,Quebec be fully licensed by the FDA to produce the Product for sale in the U.S.

 

C.                                       Draximage shall ensure that each Productconforms to the specifications described on Exhibit A attached hereto andto Draximage’s then current technical specifications or other descriptivematerials supplied by Draximage for the Product, and is not adulterated or misbrandedwithin the meaning of the U.S. Food, Drug and Cosmetic Act, 21 U.S.C. Sec. 201 etseq.

 

D.                                      Draximage shall make *** shipments of theProduct to Syncor on ***. The total quantity shipped to Syncor each *** shallequal Syncor’s ***. Draximage shall ship to Syncor ***, provided that on eachshipping day the quantity of Product shall not exceed current activitypossession limits as measured on the day of calibration. Shipments of theProduct to Syncor shall commence *** of the approval from the FDA for thecommercial sale of the Product.

 

E.                                        Draximageshall maintain in its facility a ***surplus of the Product equal to *** requirements to cover potential spot orders.Syncor shall not be responsible for the costs and expenses to manufacture andstore such surplus stock, it being understood that Syncor’s sole obligationwith respect to such surplus is the payment for any quantities of the Productactually ordered by Syncor from such stock.

 

F.                                        At the request of Syncor, Draximage shallprovide supplies of technical sales aids, such as an approved Productmonograph, to Syncor in quantities appropriate in light of Syncor’s sales ofthe Product in the Territory.

 

G.                                       ***

 

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**6.****                                  ****PRICE**

 

Syncor’s price for any standing order and spot orderpurchases shall be as follows:

 
| *****  Minimum**                      | ** ** | ** **                       | ** ** |
|---------------------------------------|------------|----------------------------------|------------|
| **Standing  Order Quantity (Curies)** | ** ** | **Price Per MilliCurie (U.S.$)** | ** ** |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |
| ***                                   |       | ***                              |       |

 

All prices are permilliCurie as of the Calibration Date. ***

 

***

 

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**7.****                                      ORDERS;TERMS OF SALE**

 

Syncor shall order from Draximage such quantities of the Product as arenecessary to fulfill the requirements of the Trade in the Territory. Draximagewill ship such quantities of the Product, FOB Draximage’s facility, either toSyncor or to third party end users or other customers as agreed upon by Draximageand Syncor.

 

**8.****                                     ****PAYMENT TERMS**

 

                ***

 

**9.****                                      REGISTRATIONAND LABELING**

 

A.                                   In the event that local laws or regulationsprevent Draximage from filing product registration application(s), or ifDraximage otherwise decides not to file any such application(s) on its ownbehalf, at the direction of Draximage, Syncor hereby agrees to file and maintainproduct registration application(s) on behalf of Draximage at Draximage’sexpense.

 

B.                                     Syncor agrees and recognizes that Draximageis the sole owner of the registration in the Territory of the Product,regardless of whether any of these registrations is in the name of Syncor or athird party. In the event of termination of this Agreement, Syncor will returnall copies of any registration application(s) and accompanying documentation inits possession to Draximage. At the request of Draximage, whether during thependency of this Agreement or after termination, Syncor shall legally transferany and all Product registration(s), to Draximage or its designee, and shallprovide full support to Draximage to facilitate the prompt execution of suchlegal transfer. Draximage shall reimburse Syncor for any costs incurred bySyncor in connection with effecting such transfer.

 

**10.****                               PRODUCTRECALLS**

 

In the event that Draximage determines, after consultation with Syncor,that a Product recall in the Territory is necessary, then Syncor shall take allactions appropriate in order to recall said Product Draximage shall reimburseSyncor for all out-of-pocket expenses associated with any such recall caused inwhole or in part by the negligence of Draximage or by Draximage’s failure tomanufacture, package, label, store or ship Product in accordance with therequirements of this Agreement; provided, however, that if any Product recallor withdrawal is caused in part by the negligence of Syncor, such directout-of-pocket expenses shall be apportioned between Draximage and Syncor inrelation to each party’s respective negligent acts or omissions.

 

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**11.****                             ****TERMINATION RIGHTS**

 

Upon breach of any term of this Agreement, the breaching party will begiven an opportunity to cure such breach within thirty (30) days after writtennotice of the breach is delivered to the breaching party. Both parties herebyagree that failure to remedy any such breach within this time period willconstitute sufficient grounds for termination without any further notice.Syncor may also terminate this Agreement upon thirty (30) days’ prior writtennotice if Draximage is unable to begin regular shipments of the Product toSyncor by December 31, 2000.

 

**12.****                               CONFIDENTIALINFORMATION**

 

A.                                   Duringthe duration of this Agreement and for a period of two (2) years from thedate of termination or expiration hereof, Syncor and Draximage agree to hold instrict confidence, and shall use all reasonable efforts to maintain the secrecyof, any and all information disclosed by the other and either identified inwriting as confidential or by its proprietary and non-public nature should betreated as confidential (“Confidential Information”), and shall not discloseany such Confidential Information to a third party without the express, writtenconsent of the disclosing party, with the exception of the following: (i) informationwhich, at the time of disclosure, is in the public domain; (ii) informationwhich, after disclosure, becomes part of the public domain by publication orotherwise, other than by breach of this Agreement by the receiving party; (iii) informationthat the receiving party can establish by competent proof was in its possessionat the time of disclosure and was not acquired, directly or indirectly, fromthe disclosing party; (iv) information that the receiving party obtainsfrom a third party, provided, however, that such information was not obtainedby said third party, directly or indirectly, from the disclosing party under anobligation of confidentiality toward the disclosing party; and (v) informationthat the receiving party can establish by competent proof was independentlydeveloped by persons in its employ or otherwise who had no contact with andwere not aware of the content of the Confidential Information.

 

B.                                 The receiving party shall not use theConfidential Information for any purpose other than in connection withexercising its rights and fulfilling its obligations hereunder. The receivingparty will not disclose any such Confidential Information to any person otherthan to its officers or employees, and only then if they have a clear need toknow such Confidential Information in connection with the performance of theirprofessional responsibilities.

 

C.                                 The receiving party shall take all reasonablesteps, including but not limited to those steps taken to protect its owninformation, data or other tangible or intangible property that it regards asproprietary or confidential, to insure that the Confidential Information is notdisclosed or duplicated for the use of any third party, and shall take allreasonable steps to prevent its officers and employees, or any others having accessto the Confidential Information, from disclosing or making unauthorized use ofany Confidential Information, or from committing any acts or making anyomissions that may result in a violation of this Agreement.

 

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D.                                    Title to, and all rights emanating from theownership of, all Confidential Information disclosed under this Agreement shallremain vested in the disclosing party. Upon written request of the disclosingparty, the receiving party shall return promptly to the disclosing party allwritten materials and documents, as well as any computer software or othermedia, in their possession, made available or supplied by the disclosing partyto the receiving party that contains Confidential Information, together withany copies thereof, except that the receiving party may retain one copy of eachsuch document or other media for archival purposes, subject to protection andnon-disclosure in accordance with the terms of this Agreement.

 

E.                                      The receiving party agrees that thedisclosure of Confidential Information without the express written consent ofthe disclosing party will cause irreparable harm to the disclosing party, andthat any breach or threatened breach of this Agreement by the receiving party willentitle the disclosing party to injunctive relief, in addition to any otherlegal remedies available to it, in any court of competent jurisdiction.

 

**13.****                               TRADEMARKS**

 

A.                                   Syncor shall have the right to resell theProduct in packages bearing the Trademarks and the right to use the Trademarksin promotional materials related to the Product. The rights granted to Syncorhereunder shall in no way affect Draximage’s ownership of such Trademarks. Noother right, title or interest in the Trademarks is established hereby, andnothing herein shall be construed to grant any right or license to Syncor touse the Draximage trademark, or the name Draximage, other than as specificallyset forth herein.

 

B.                                     Syncor shall not make any use or take anyaction with respect to the Trademarks to prejudice or infringe Draximage’srights thereto including the use of any confusingly similar trademark, andshall forthwith, upon objection by Draximage, desist from any use thereof oraction therewith which is in violation of this Agreement.

 

C.                                     Upontermination of this Agreement, Syncor will cease all use of the Trademarks.

 

D.                                    Inthe event of any claim or litigation by a third party against Syncor alleging thatany of the Trademarks imitates or infringes a trademark of such third party oris invalid, Syncor shall promptly give notice of such claims or litigation toDraximage and Draximage shall assume responsibility for, and control of, thehandling, defense, or settlement thereof.

 

**14.****                              ****WARRANTY**

 

Draximage warrants that each Product supplied hereunder is free fromdefects in material and workmanship and conforms to the technicalspecifications for the Product. DRAXIMAGE MAKES NO OTHER WARRANTY, EXPRESSED ORIMPLIED, WITH

 

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RESPECT TO THE PRODUCT,INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULARPURPOSE.

 

**15.****                               INDEMNIFICATION**

 

A.                                   Draximageshall indemnify and hold Syncor, its parent companies, affiliates and subsidiaries,and the officers, directors and employees of each of them, harmless from anyand all liability, including liability for death or personal injury, and costs,losses and expenses, including reasonable attorneys’ fees, that stem from anyProduct that was damaged or defective at the time of delivery to Syncor, orresulting from the negligence or recklessness or willful misconduct ofDraximage.

 

B.                                     Syncor shall indemnify and hold Draximage,its parent companies, affiliates and subsidiaries, and the officers, directorsand employees of each of them, harmless from any and all liability, includingliability for death or personal injury, and costs, losses and expenses, includingreasonable attorneys’ fees, that stem from its negligence, recklessness orwillful misconduct in the compounding, sale, marketing and distribution of theProduct.

 

C.                                     Inthe event that the negligence, recklessness or willful misconduct of each of Draximageand Syncor contributes materially to any such liability, cost, loss or expense stemmingfrom any Product supplied or distributed and sold hereunder, then Draximage andSyncor each shall be responsible for that portion of said liability, cost, lossor expense to which such negligence, recklessness or willful misconductcontributed.

 

D.                                    Draximageshall indemnify and hold Syncor, its parent companies, affiliates and subsidiaries,and the officers, directors and employees of each of them, harmless from anyand all liability stemming from any claim of patent, trademark, copyright ortrade secret infringement based upon the otherwise permissible distribution andsale of the Product under the terms of this Agreement.

 

E.                                      Inthe event that one party receives notice of a claim, lawsuit, or liability for which it is entitled to indemnificationby the other party, the party receiving notice shall give prompt notificationto the indemnifying party. The party being indemnified shall cooperate fullywith the indemnifying party throughout the pendency of the claim, lawsuit orliability, and the indemnifying party shall have complete control over theconduct and disposition of the claim, lawsuit, or liability.

 

F.                                      Titleto and risk of loss of the Product purchased by Syncor pursuant to this Agreementshall pass to Syncor upon delivery by Draximage of the Product in question tothe carrier designated by Syncor for the purpose of shipping the Product to itscustomers.

 

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**16.****                               MISCELLANEOUS**

 

A.                                   Headings.   The headings and captions used herein are forthe convenience of the parties only and are not to be construed to define,limit or affect the construction or interpretation hereof.

 

B.                                     Severability.   In the event that any provision of thisAgreement is found to be invalid or unenforceable, then the offending provisionshall not render any other provision of this Agreement invalid orunenforceable, and all other provisions shall remain in full force and effectand shall be enforceable, unless the provisions which have been found to beinvalid or unenforceable shall substantially affect the rights or obligationsgranted or undertaken by either party.

 

C.                                     Entire Agreement.  This Agreement, together with any schedules attached hereto which arehereby fully incorporated by reference, contains the entire agreement of the partiesregarding the subject matter hereof and supersedes all prior agreements,understandings or conditions (whether oral or written) regarding the same. ThisAgreement may not be changed, modified, amended or supplemented except by awritten instrument signed by both parties.

 

D.                                    Assignability.  This Agreement and the rights hereundermay not be assigned or transferred by either party without the prior writtenconsent of the other party hereto (other than for rights to payment), providedhowever, that either party may assign this Agreement to a person or entity whoacquires all or substantially all of the assets or business of a party, whetherby sale, merger, or otherwise. In the event that this Agreement is assigned, itshall be binding upon and inure to the benefit of the parties and theirrespective successors and assigns.

 

E.                                      Further Assurances.  Each party hereto agrees to execute, acknowledge and deliver suchfurther instruments, and to take such other actions, as may be necessary or appropriatein order to carry out the purposes and intent of this Agreement.

 

F.                                      Notices and Reports.   Allnotices, consents or approvals required by this Agreement shall be in writingand sent by certified or registered air mail, postage prepaid or by facsimileor cable (confirmed by such certified or registered mail) to the parties at thefollowing addresses or such other addresses as may be designated in writing bythe respective parties.

 

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If to Draximage:

 

Draximage, Inc.

16751 TransCanada Highway

Kirkland, Quebec H9H 4J4

Canada

Attention: President

 

If to Syncor:

 

Syncor International Corporation

6464 Canoga Avenue

Woodland Hills, CA 91367

Attention: General Counsel

 

Noticesshall be deemed effective on the date of mailing.

 

G.                                     Relationshipsof the Parties.   Both parties are independent contractors underthis Agreement. Nothing contained in this Agreement is to be construed so as toconstitute Draximage and Syncor as partners or agents with respect to thisAgreement. Neither party hereto shall have any express or implied right orauthority to assume or create any obligations on behalf of, or in the name of,the other party or to bind the other party to any contract, agreement orundertaking with any third party.

 

H.                                    Waiver.   The waiver by either party ofa breach of any provisions contained herein shall be effective only if made inwriting and shall in no way be construed as a waiver of any succeeding breachof such provision or the waiver of the provision itself.

 

I.                                         Applicable Law.   ThisAgreement shall be governed by and construed in accordance with the laws of theState of California, without regard to the conflicts of laws provisionsthereof.

 

J.                                        Force Majeure.   A party shall not be liable for nonperformanceor delay in performance (other than of obligations regarding any payments or ofconfidentiality) caused by any event reasonably beyond the control of suchparty including, without limitation, wars, hostilities, revolutions, riots,civil disturbances, national emergencies, strikes, lockouts, unavailability ofsupplies, epidemics, fires, floods, earthquakes, other forces of nature,explosions, embargoes, or any other Acts of God, or any laws, proclamations,regulations, ordinances, or other acts or orders of any court, government orgovernmental agency, and the inability of such party to obtain material fromits suppliers or to obtain equipment or transportation, for the time duringwhich such conditions continued, and for a reasonable time thereafter.Purchases and deliveries of the Product under this Agreement may at eitherparty’s option be suspended, in whole or in part, during the period of thecontinuance of such cause or event. Any occurrence of force majeure shall bereported promptly to the other party.

 

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K.                                    Counterparts.  This Agreement may be executed inmultiple shall be considered and shall have the force and effect of anoriginal.

 

L.                                      Language.  The parties declare that they haverequired that this Agreement and any documents relating thereto be drawn up inthe English language. Les parties aux presentes declarent qu’elles ont exigeque cette entente et tous les documents y afferant soient rediges en langueanglaise.

 

IN WITNESS WHEREOF, bytheir duly authorized representatives, the parties have executed this Agreementas of the day and year first above written.

 
| **SYNCOR INTERNATIONAL  CORPORATION** | **DRAXIMAGE, INC.**               |
|---------------------------------------|-----------------------------------|
|                                  |                              |
|                                  |                              |
| By:                                   | /s/ John S. Baumann               |   | By: | /s/ R. M. Doré |   |
| Name:                                 | John  S. Baumann                  |   | Name: | R.  M. Doré | ** ** |
| Title:                                | Senior  Vice President & |   | Title: | President |   |
|                                  | General  Counsel                  |   |   |   |
|                                       |                                   |  |  |  |  |  |  |

 

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**EXHIBIT A**

 

**Product Specification**.

 

***

 

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