**Exhibit 4.42**

 

**MANUFACTURE and SUPPLY AGREEMENT**

 

**THISAGREEMENT** is effective from the 3rd day ofMarch, 2003

 

 
| **BETWEEN:** | **BONE CARE INTERNATIONAL, INC.**, a corporation  incorporated under the laws of Wisconsin, having its head office at 1600  Aspen Commons, Middleton, Wisconsin, U.S.A., 53562, carrying on business as  Bone Care (“**Bone Care**”); |
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| **AND:**     | **DRAXIS PHARMA INC.**, a corporation  incorporated under the laws of Canada having its principal place of business  at 16751 Trans-Canada Highway, Kirkland, Quebec, H9H 4J4 (“**Draxis**”);                                         |

 

 

**WHEREAS**Bone Care desires to have Draxis manufacture and supply the Product listed in Schedule “A”attached hereto in accordance with the provisions of this Agreement;

 

**ANDWHEREAS** the Parties have already agreed upon aproposal with respect to the terms related to the technical transfer activitiesnecessary to transfer the Product to the Facility;

 

**ANDWHEREAS** the Parties now wish to confirm the termsrelated to the ongoing commercial Formulation of the Product at the Facility;

 

**NOWTHEREFORE** in consideration of the mutual covenants andagreements in this Agreement, Bone Care and Draxis agree with each other asfollows:

 

**ARTICLE I**

 

**INTERPRETATION**

 

1.1           **Defined Terms**.      Asused in this Agreement, the following terms have the following meanings unlessthe context clearly requires otherwise:

 

“**Active Ingredient**” means the Product activeingredient (doxercalciferol) supplied by Bone Care to Draxis.

 

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“**Adverse Drug Event Reports**” Means thereport of any adverse event associated with the use of the product in humans,whether or not considered drug related.

 

“**Affiliate(s)**” means with respect to anyParty hereto, any entity which directly or indirectly controls, is controlledby or is under common control with any such Party.  The term “control” means the power to directthe affairs of such entity by reason of ownership of at least fifty percent(50%) of such entity by voting stock, equity interest, contract or otherwise.

 

“**Agreement**” means this Manufacture andSupply Agreement and all schedules and instruments supplemental to or amendingor confirming it.

 

“**Annual Forecasts**” has the meaning ascribedthereto in Section 4.1 (a) hereof.

 

“**Annual Volume Discount Entitlement**” has themeaning ascribed thereto in Section 2.3(d) hereof.

 

“**Batch**” means a production batch of Productas specified in Section 4.4 hereof.

 

“**Business Day(s)**” means any day(s) otherthan Saturday, Sunday or a holiday generally recognized in Canada or the UnitedStates.

 

“**Calendar Year (s)**” means the period January 1through to December 31 of any given yearof the Term, provided that thefirst and last Calendar Years of the Term may be for less than a full twelve(12) month period.

 

“**Capital Plan**” has the meaning ascribed in Section 2.2(c)hereof and referenced in Schedule “F” to this Agreement.

 

“**Commercially Reasonable Efforts**” meansreasonable efforts and resources at least equal to those normally used by, inthe case of Draxis, a prudent pharmaceutical contract manufacturer using suchefforts to perform obligations similar to those which are incumbent upon Draxispursuant to the terms of this Agreement and, in the case of Bone Care, by aprudent purchaser of pharmaceutical products using such efforts to performobligations similar to those which are incumbent upon Bone Care pursuant to theterms of this Agreement.

 

“**Deposit**” has the meaning ascribed theretoin Section 2.1(d) hereof.

 

“**Facility**” means Draxis’ facility located at16751 Trans-Canada Highway, Kirkland, Quebec, Canada and, subject to Bone Care’sprior written approval, such other facilities used by Draxis in the Formulationof Product hereunder.

 

“**FDA**” means the United States Food and DrugAdministration or any successor to it.

 

“**Field Alert Reports**” means any reportedinformation concerning:

 

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(i)        anyincident that causes the drug product or its labeling to be mistaken for, orapplied to, another article; or

 

(ii)       anybacteriological contamination, or any other significant chemical, physical, orother change or deterioration in the distributed drug product, or any failureof one or more of the distributed batches of the drug product to meet thespecifications established for it in the Product NDA.

 

“**Firm Zone**” has the meaning ascribed theretoin Section 4.2 (a) hereof.

 

“**Force Majeure**” has the meaning ascribedthereto in Section 8.2(a) hereof.

 

“**Formulate**” or “**Formulated**” means to effect the operation required in themanufacture, processing, testing, packaging, or storage, as the case may be, ofthe Product by Draxis.

 

“**Formulation**” or “**Formulating**” means any operation required in the manufacture,processing, testing, packaging, labelling, or storage, as the case may be, ofthe Product by Draxis from raw material input through batch release from Draxis’Quality Assurance Department.

 

“**Good Manufacturing Practices**” or “**cGMP**” means current Good ManufacturingPractices and all other applicable laws, regulations and rules in the UnitedStates and Canada related to the Product including, without limitation, as setout in the guidelines published as the Good Manufacturing Practices for DrugManufacturers and Importers by the Health Products and Food Branch of HealthCanada, as amended from time to time, for the manufacture of pharmaceuticalproducts and the Current Good Manufacturing Practices as defined in UnitedStates 21 CFR 210, 211 et. seq., as amended from time to time.  Manufacture of the Product must be incompliance with the cGMP requirements of the country where the Product is to bedistributed.

 

“**Governmental Authority**” or “**Governmental Authorities**” means any court, tribunal,arbitrator, agency, commission, official or other instrumentality of Canada orthe United States, any foreign country or any territory, or any domestic orforeign state, province, country, city or other political subdivision thereof.

 

“**Handling Charges**” means all freight,transportation, insurance, customs duties and brokerage charges relating to theProduct and the movement of the Product.

 

“**HPF**” means both the Therapeutic ProductsDirectorate and the Inspectorate of the Health Products and Food Branch ofHealth Canada, or any successor to it.

 

“**Incoterms 2000**” means the InternationalCommercial Terms published by the International Chamber of Commerce, as amendedfrom time to time, codifying the contractual rules for the interpretation ofstandardized commercial terms for transactions.

 

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Incoterms 2000shall be deemed to have been incorporated by reference in this Agreement exceptin so far as they may conflict with any other provisions of this Agreement inwhich case the Agreement provisions shall prevail.

 

“**Indemnitees**” means either Party, as thecase may be, and that Party’s shareholders, directors, officers, employees,agents and representatives.

 

“**Industry Price Index**” means the ConsumerPrice Index for Canada (P119500), as published by The Bank of Canada, or asuccessor agency, or if this index ceases to be published, the factor providedby any other comparable guide as agreed to by both Parties.

 

“**Law**” means any law, statute, rule,regulation, guideline (including current Good Manufacturing Practices),ordinance or other pronouncement of any Governmental Authority having theeffect of law in Canada, the United States, any foreign country or anyterritory or any domestic or foreign state, province, county, city or otherpolitical subdivision, and which is relevant to the Product Formulatedhereunder.

 

“**Licences**” means the licences issued to BoneCare by the relevant Governmental Authority for the Formulation and manufactureof the Product.

 

“**Losses**” mean any and all damages, fines,fees, settlements, payments, obligations, penalties, deficiencies, losses,including, without limitation, losses of revenues, costs and expenses(including without limitation, interest, court costs, reasonable fees ofattorneys, accountants and other experts and other reasonable expenses oflitigation or other proceedings or of any claim, default or assessment).

 

“**Materials**” mean all raw materials,ingredients, packaging materials and any other materials used in theFormulation of Product by Draxis but excludes the Product Active Ingredient.

 

“**Material Zone**” has the meaning ascribedthereto in Section 4.2(b) hereof.

 

“**Minimum Guarantee**” has the meaning ascribedthereto in Section 2.1 (b) hereof.

 

“**Open Zone**” has the meaning ascribed theretoin Section 4.2(c).

 

“**Party**” means either Bone Care or Draxis,individually; “**Parties**” means BoneCare and Draxis collectively.

 

“**Person(s)**” means any natural person,entity, corporation, general partnership, limited partnership, proprietorship,other business organization, trust, union, association or GovernmentalAuthority.

 

“**Proceeding**” means applicable action, claim,suit, proceeding, arbitration or Governmental Authority action, notification,investigation or audit.

 

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“**Product**” means the product to be Formulatedby Draxis for Bone Care in accordance with the specific terms of thisAgreement, as more particularly described in Schedule “A”**to this Agreement, as such schedule isamended from time to time by mutual agreement of the Parties.

 

“**Price**” means the price for the Productlisted in the attached Schedule “C” to this Agreement, and, thereafter theprice for the Product established in accordance with Section 2.3.

 

**“QualityManual”** means the Bone Care & Draxis. Hectorol® Injection Drug Product QualityManual, attached hereto in Schedule G, the content of which applies toHectorol® Injectiondrug product manufactured by Draxis for Bone Care.

 

“***** Rolling Forecast (s)**” has the meaningascribed thereto in Section 4.1(b) hereof.

 

“**Sample Forecast**” has the meaning ascribedthereto in Section 4.1 hereof and shall be in the form annexed as Schedule “B”to this Agreement.

 

“**Specifications**” means the procedures,requirements (regulatory or otherwise), standards and other items necessary toFormulate the Product, as described in Schedule “D” to this Agreement and,subject to Section 2.4, as may be amended by Bone Care.

 

“**Technical Transfer Terms**” means the agreedupon terms by which the Product is transferred into the Facility forFormulation, the details of which are set in Production Proposal No.SPD-A2-NTS-001.1 entered into between the Parties on April 12, 2002 andattached hereto as Schedule “H”.  Tothe extent of any inconsistency between the Proposal and the Agreement, theAgreement shall govern to the extent of such inconsistency.

 

“**Term**” means the term of this Agreement asdefined in Article VII hereof.

 

1.2           **Incorporation of Schedules**.  Schedules and other documents attached orreferred to in this Agreement are an integral part of the Agreement, includingthe following:

 

Schedule “A”       Descriptionof Product

Schedule “B”        SampleForecast

Schedule “C”        ProductPrice

Schedule “D”        Specifications

Schedule “E”        VolumeDiscount Plan

Schedule “F”        CapitalPlan

Schedule “G”        QualityManual

Schedule “H”        ProductionProposal

 

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1.3           **Accounting Terms**.  Accounting terms not specifically defined inthis Agreement are to be construed in accordance with United States generallyaccepted accounting principles.

 

1.4           **Currency**.  Except as otherwise expressly stated, alldollar amounts referred to in this Agreement are in United States dollars.

 

1.5           **General**.  Section headings in this Agreement arefor convenience only and shall not be used in interpreting this Agreement.  The Agreement shall be read with such changesin gender or number as the context requires.

 

**ARTICLE II**

 

**MANUFACTURING AND SUPPLY**

 

2.1           **Agreement to Formulate Product**.

 

(a)           Inconsideration of the execution of Bone Care’s obligations hereunder, for theduration of this Agreement, Draxis shall Formulate the Product in the Facilityfor Bone Care and supply Product to Bone Care in accordance with the terms andconditions set out in this Agreement, in quantities sufficient to satisfy BoneCare’s requirements as set forth in the Quarterly Rolling Forecast provided toDraxis.

 

(b)           In consideration of theFormulation and supply of Product to Bone Care in accordance with thisAgreement, subject to the provisions of Section 4.3 and 7.2(d) herein,Bone Care shall, for the duration of this Agreement, purchase Product fromDraxis in quantities and on terms of supply in accordance with thisAgreement.  ***

 

 

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***

 

(c)           Subjectto Section 2.4 and the provisions of Schedule “F” of this Agreement,the equipment costs required for the Facility to Formulate the Product shall beborne by Draxis provided, however, that Bone Care will reimburse Draxis forcosts related to purchasing one set of dedicated changed parts (fillingneedles, pistons, etc.) for each ampoule filler required to Formulate theProduct.

 

(d)           ***

 

2.2           **Terms of Supply**.

 

(a)           **Long Term Supply**.  Subject to early termination of thisAgreement in accordance with the provisions of Section 7.2 hereof, Draxisshall Formulate the Product for Bone Care for the duration of this Agreement.

 

(b)           **Raw Materials and Supplies**.  Draxis shall purchase from third parties suchquantities of Materials as Draxis requires to produce the Product to be sold toBone Care hereunder; provided, however, that Bone Care shall supply to Draxisthe Product Active Ingredient for use in Formulating the Product.  Draxis agrees that it shall not use suchActive Ingredient for any other purpose other than Formulating suchProduct.  Draxis shall not sell theProduct to any other person, company or entity other than Bone Care. The costof shipping and delivery of the Active Ingredient to Draxis shall be solelyBone Care’s obligation, provided, however, that Draxis shall take reasonablemeasures to

 

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ensure thatthe Active Ingredient is stored at the Facility in accordance with such ActiveIngredient specifications, in accordance with the requirements set forth inParagraph G entitled “Environmental Requirements – Doxercalciferol Storage” atpage 6 of the Quality Manual, and in accordance with reasonable customaryindustry practice.

 

(c)           **Capital**. Capital requirements and related costs necessary for Draxis to FormulateProduct in accordance with the provisions of the Agreement and the TechnicalTransfer Terms shall be in accordance with the provisions of Schedule “F”(“Capital Plan”).

 

2.3           **Consideration**.

 

(a)           **Price of Product.**  ***

 

(b)           **Price Adjustments**.  ***

 

(c)           **Effective Date of Price Adjustments**.  ***

 

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(d)           **Volume Discount**.  ***

 

(e)           **Payment**. ***

 

(f)            **Taxes**. ***

 

2.4           **Costs of Changes**.

 

Bone Care shall be responsible for costs associated with changesrequired in the Formulation of the Product in order to comply with changes tocGMP occurring after the date of this Agreement or to comply with changes tothe Specifications as amended from time to time by Bone Care, includingadditional validation work required for the Product or any stability testingrequired with respect to such changes. Draxis will be required to provide reasonable documentary proof of suchcosts and the connection between such changes to FDA cGMP or Specifications andthe costs incurred.  Draxis cannot makeany changes to the Specifications without prior written approval by Bone Care.

 

2.5           **Product Format**.

 

Except as otherwise set out in this Section 2.5, Draxis shallFormulate Product in the product and packaging formats described in Schedule “A”for each Product.  Any changes to suchProduct and packaging formats requested by Bone Care shall be subject to theprovisions of Section 2.4 and Article IV hereof.

 

2.6           **Good Manufacturing Practices**.

 

Draxis shall Formulate the Product in accordance with current GoodManufacturing Practices as determined by the Governmental Authorities of thejurisdiction in which the Product will be distributed by Bone Care.  Each Party shall promptly notify the otherupon acquiring knowledge of any new instructions, processes or

 

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specificationsrequired in order to comply with Good Manufacturing Practices, and shallcooperate in agreeing on the best means to comply with any new requirements.

 

2.7**           Inspection**.

 

Draxis shall allow representatives of Bone Care to observe theFormulation of the Product, at mutually agreeable times, for the purpose ofdetermining compliance with applicable laws, regulations andSpecifications.  Such inspection shalltake place during Draxis’ normal business hours and upon prior written noticeto Draxis of a reasonable amount of time, at least ten (10) Business Days,unless otherwise agreed upon by the Parties. Bone Care’s exercise of these rights shall in no way modify or diminishDraxis’ obligations under this Agreement. As set forth in Paragraph AF entitled “Compliance Audits” of the QualityManual,  Bone Care shall also conduct anannual inspection of Draxis’ manufacturing facilities.

 

2.8           **Regulatory Matters**.

 

(a)           Exceptas otherwise provided in this Section 2.8, Bone Care shall be responsiblefor the costs of any regulatory efforts required relating to the Formulation ofthe Product including changes to the Specifications.  For greater certainty, by way of example andwithout limitation, Bone Care shall register and obtain all required Licensesand provide all necessary updates regarding the Product.  Draxis shall be responsible for, and bear anycost associated with, maintaining the Facility in compliance with FDA cGMPstandards.

 

(b)           BoneCare shall prepare and submit any reports related to matters regarding themanufacture and production of the Product required by FDA or any applicableGovernmental Authority including but not limited to Adverse Drug Event Reportsand Field Alert Reports except (a) for reports that Draxis, as a manufacturer,has a nondelegable obligation to submit under law, statute or regulation and(b) reports for which Draxis, following a request made in writing by Bone Care,fails to supply to Bone Care, on a timely basis, all pertinent information inits possession or control for the preparation of such reports (it being furtherunderstood that Bone Care shall make its written request to Draxis in atimeframe which provides Draxis adequate time to supply the said information).Draxis shall advise Bone Care of any occurrence or information associated withProduct manufacturing and production activities that could reasonably beexpected to have adverse regulatory compliance and/or reporting consequences.

 

2.9           **Accounting Audit**.

 

(a)           BoneCare shall, upon not less than ten (10) Business Days’ notice, have the rightto request Draxis to make available to an independent certified public orchartered accountant, selected by Bone Care and reasonably acceptable toDraxis, all relevant books, records and other data which are reasonablynecessary to evaluate any adjustments made pursuant to Sections 2.3 and2.4.  Bone Care may exercise such rightnot more than once in any Calendar Year, and then only with respect toadjustments made during the preceding five Calendar Years.  Such accountant shall agree to disclose toBone Care

 

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only suchinformation as is necessary to determine if the adjustments made pursuant toSections 2.3 and 2.4 were accurate.  Suchaccountant shall also agree to disclose to Draxis the results of its review.

 

(b)           Ifsuch accountant concludes that adjustments made by Draxis were not made inaccordance with this Agreement and resulted in additional expense to Bone Care,Draxis shall refund such amounts plus interest charged at the rate of primeplus two percent per annum, based upon the prime rate in the U.S. marketsprevailing for the period commensurate with the dates of adjustments determinedto be in violation of this Agreement, to Bone Care within thirty (30) days, andDraxis shall reimburse Bone Care for the entire cost of such accountant’s work,including all reasonable expenses, provided that the overcharge to Bone Careexceeds the cost of the accounting audit, otherwise such costs and expensesshall be paid by Bone Care. In addition, if such accountant concludes thatadjustments made by Draxis resulted in Draxis undercharging Bone Care, BoneCare shall pay to Draxis the amount of such undercharge within thirty (30) daysand shall furthermore pay all costs and expenses relating to the accountingaudit.

 

**ARTICLE III**

 

**QUALITY ASSURANCE**

 

3.1           **Testing**.

 

(a)           Testingof Product shall be performed in accordance with the applicable terms of theQuality Manual.

 

(b)           Inthe event that any delivery fails to conform to the Specifications as describedin Schedule “D”, or shall have been Formulated under conditions that donot comply with applicable FDA requirements of the provisions of thisAgreement, Bone Care may reject such shipment by giving written notice toDraxis within sixty (60) days after delivery of the Product specifying the mannerin which such delivery fails to meet the requirements thereof.  Draxis shall have thirty (30) days withinwhich to accept or reject Bone Care’s claims. Bone Care may withhold payment for any delivery of Product which failsto meet the requirements hereof.  Withrespect to claims accepted by Draxis, the invoice covering such shipment willbe revised to reflect that no payment is due on such rejected Product.

 

(c)           Inthe event of a dispute as to Section 3.1(b), such dispute shall beresolved promptly by an independent testing organization of recognized reputewithin the pharmaceutical industry where Bone Care intends to sell the Product,mutually chosen by the Parties, the appointment of which shall not beunreasonably delayed by either Party. The analytical methods used shall comply with FDA cGMP.  Until a dispute is resolved, neither BoneCare nor Draxis will dispose of a non-conforming delivery without prior writtenauthorization from the other Party.  Thefees and costs of the testing organization, and storage and handling of theProduct, shall be borne by the Party determined by such testing organization tohave not fulfilled their respective obligations under this Agreement.  The determination of the testing organizationshall be final and binding upon

 

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theParties.  In the event that paymentregarding a shipment is withheld by Bone Care pursuant to Section 3.1(b)and a dispute that arises regarding that shipment under that Section isresolved in favor of Draxis, Bone Care shall promptly make payment to Draxisfor the full amount of the invoice covering such shipment.  Such payment shall be made notwithstandingany non-compliance of expiration date assignments under Section E of theQuality Manual, which non-compliance is a direct result of the delaysoccasioned by the dispute resolution procedure specified in this Section wherethe dispute is resolved in favor of Draxis. Furthermore, where a dispute isresolved in Draxis’ favour, Bone Care shall assume all risks relating todiminished Product shelf life.

 

3.2           **Reserve****Samples**.  Draxisshall retain for at least one (1) year after the expiration date of each lot orBatch of Product, a file sample properly stored from each such lot or Batch ofProduct Formulated, including market packages, sufficient to perform eachquality control test specified in the Specifications at least two (2)times.  Draxis shall perform an annualinspection of retained samples and shall provide Bone Care with a writtenreport of such inspections.

 

Draxis shallalso maintain as reserve samples 100 ampules obtained proportionately from eachportion of every production lot.  Twenty(20) ampules shall be obtained each from the first  1/4, 1/2,3/4 and final quarter of each Product productionlot.  Upon Bone Care’s written authorization,these samples shall be shipped to Bone Care under temperature monitoredconditions.

 

3.3           **Stability Testing**.  Subject to Section 2.4, Draxis shallhave the sole responsibility, at its expense, for conducting all requiredongoing Product stability studies. Stability testing shall be conducted on the first three (3) commerciallots manufactured for each dosage strength and on at least one lotannually.  Product stability samplesshall be obtained from appropriate lots at Draxis’ facility per Bone Care’swritten sampling plan or a sampling plan agreed upon in writing by the parties.

 

3.4           **Product Batch Release**.  Draxis shall be responsible for the releaseof each production Batch of Product, except to the extent that applicable Lawrequires that Bone Care be so responsible, in which event (and to such extent),Bone Care shall assume such responsibility.

 

3.5**           AdverseDrug Experience Reports, Product Complaints and****Recalls**.  It is acknowledged that the Quality Manualsets out the terms of the Parties’ agreement on the subject matter of this Section 3.5.  Further, as provided in the Quality Manual,the costs of any recall shall, subject to the limitation of liability providedfor in Section 6.7 hereof, be borne by Draxis in the event of a materialbreach of this Agreement by Draxis that results in a Product recall.

 

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**ARTICLE IV**

 

**PRODUCT SUPPLY AND QUANTITIES**

 

4.1           **Forecasts**

 

(a)           **Annual Forecasts**.  By no later than June 30th of eachCalendar Year, Bone Care shall provide Draxis with a twelve (12) month forecastof its Product Formulation requirements for the next Calendar Year (“AnnualForecasts”).  The Annual Forecast shallbe for Draxis’ planning purposes only and Bone Care shall not be responsiblefor any costs or expenses incurred by Draxis pursuant to the Annual Forecasts.

 

(b)           ***** Rolling Forecasts**.  In addition to the Annual Forecasts, ***

 

4.2           **Scheduling**

 

(a)           **Firm Zone**. ***

 

(b)           **Material Zone**. ***

 

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(c)           **Open Zone**. ***

 

4.3           **Failure to Supply**. Draxis shall supplythe quantities of the Product ordered by Bone Care in accordance with the termsof a *** Rolling Forecast and shall deliver Product to Bone Care no later thanthe 25th day of the month preceding the month for which thequantities of Product had been ordered. Subject to Sections 6.2, 6.7 and 8.2 hereof, if Draxis fails to supplythe quantities of the Product ordered by Bone Care in accordance with the termsof a *** Rolling Forecast, Draxis shall undertake expeditiously all reasonablenecessary steps to cure this failure forthwith to the reasonable satisfactionof Bone Care. In the event that Draxis fails to timely deliver Product to BoneCare in accordance with the terms of this Agreement, Bone Care may, at its solediscretion, purchase from any other source or manufacture the quantity of Productnecessary to meet its requirements.

 

4.4           **Batch Size**.  Bone Care shall provide its orders of Productin Draxis’ standard manufacturing Batch sizes for each of the Product asreferenced in Schedule “C” and reflected in the *** Rolling Forecast.  Bone Care acknowledges that costs forrecycling or disposing of the balance of a Batch may be incurred if it ordersProduct in less than standard Batch size, and accordingly, Bone Care agrees toreimburse Draxis for all such reasonable costs incurred by Draxis to the extentthat such costs have not already been included in the invoice price relating tosuch order.  Draxis agrees to try to useCommercially Reasonable Efforts to minimize the costs to Bone Care if it ordersProduct in less than standard Batch size.

 

4.5           **Inventory and Safety Stock**.  Any inventory of Materials held by Draxisbeyond the requirements necessary for delivery of the Product forecasted in theFirm Zone and Material Zone of the *** Rolling Forecast is the soleresponsibility of Draxis, unless such inventory is approved in writing by BoneCare.  Bone Care shall advise Draxis ofthe necessary quantity of safety stock of finished Product required to be heldby Draxis on behalf of Bone Care.  Draxisshall not use any inventory of Active Ingredient for any purpose other thanformulation of the Product.

 

4.6           **Graphic Changes**.  If there is to be any change to any artworkfor Product, at least fourteen (14) weeks prior to the intended first deliverydate of such Product with such changed artwork, Bone Care shall provide toDraxis, at no cost, digital artwork in a format acceptable to Draxis and incompliance with the packaging specifications for such Product.  All one-time costs and expenses associatedwith any such artwork changes shall be the responsibility of Bone Care.  Packaging and label control provisionsrelating to printed supply specifications are set forth in the Quality Manual, Section VI,paragraph B.

 

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**ARTICLE V**

 

**DELIVERY AND TITLE TO PRODUCT**

 

5.1           **Delivery**.

 

(a)           AllProduct Formulated by Draxis hereunder shall be delivered to Bone Care uponrelease of the Product by Draxis’ Quality Assurance Department in accordancewith the provisions of Article III and Section 4.3 of this Agreement.

 

(b)           Draxisshall ship Product ordered by Bone Care pursuant to this Agreement inaccordance with Bone Care’s instructions. Draxis shall arrange for the shipment of the Product (Incoterms 2000),Draxis’ loading dock.  Draxis will selectthe carrier and insurance company on behalf of Bone Care from a list providedby Bone Care and shall retain said carrier and insurance company on behalf ofBone Care in accordance with the terms of this Agreement.  Draxis shall schedule freight pick-up,load the carriers, trailer and complete the documentation and invoice Bone Caredirectly for all Handling Charges..  IfBone Care wishes the delivery of the Product to be on any unique pallets, BoneCare shall, at its own cost and expense, make such pallets available to Draxis.

 

(c)           ***

 

5.2           **Replacement Product**.

 

(a)           Ifthe Parties agree that any Product delivered hereunder fails in whole or inpart to conform to this Agreement, whether by reason of being of quality orquantity not stipulated, or non-compliance with the Specifications (“RejectedProduct”), or if a dispute between the Parties in this regard has been resolvedpursuant to Section 3.1(c) in favor of Bone Care, or for any other reasoncontemplated by Section 3.1, Draxis agrees to use Commercially ReasonableEfforts to expeditiously deliver replacement Product for the Rejected Product (“ReplacementProduct”) within one hundred twenty (120) days of the date Draxis accepts BoneCare’s written notice of rejection or resolution of the dispute, whichever islater.

 

(b)           Ifthe Parties agree that all or part of the Rejected Product may be reworked orreclaimed, Bone Care shall return such Rejected Product to Draxisforthwith.  The expense of such shipmentshall be borne by Draxis.

 

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(c)           Notwithstandingthe existence of a dispute concerning Product rejected by Bone Care, pendingresolution of such dispute, Draxis shall continue to timely deliver additionalProduct of the type and quantity deemed to be rejected under Section 5.2(a) hereof and Bone Care shall be obligated to pay for all such Productdelivered in compliance with the terms of this Agreement.  In the event that it is ultimately determinedthat the Product in dispute was properly rejected by Bone Care, Draxis shallpromptly reimburse to Bone Care any payment that has been made in respect ofsuch Product.

 

5.3           **Right to Manufacture**.

 

Draxis shallnot be required to Formulate or supply Product in accordance with the terms ofthis Agreement as to which:

 

(i)            any Person claims theFormulation or distribution infringes or otherwise violates any Law respectingpatents or trademarks unless Bone Care agrees to indemnify Draxis against anysuch claim;  or

 

(ii)           any GovernmentalAuthority alleges such manufacture or distribution violates any Law.  Bone Care shall provide immediate writtennotice of any such claim of any Governmental Authority to Draxis.

 

Each Partyshall promptly notify the other of any claim received by it that theFormulation or distribution infringes or otherwise violates any Law respectingpatents or trademarks.  The Parties agreeto consult with one another to arrive at a mutually acceptable procedure tocontest any such claim and to set guidelines relating to the acceptable levelsof costs and expenses and reimbursement of same; provided, however, thatnothing contained herein shall prevent Draxis from ceasing to Formulate orsupply Product as required by this Agreement until such time as theinfringement claim is dealt with to its satisfaction unless and until Bone Careagrees to fully indemnify Draxis against such claim and an acceptable proposalfor the reimbursement of Draxis’ costs and expenses is made by Bone Care toDraxis.

 

5.4           **Manufacturing Records**.

 

Draxis shallmaintain true, accurate and complete records regarding the Formulation,testing, and supply of Product as required by Law including, withoutlimitation, information concerning the machinery and equipment used toFormulate the Product, stability information, Formulation information,Product-in-process information and other such relevant and customaryinformation concerning the Product.

 

5.5           **Insurance**.  Bone Care shall be responsible for obtainingappropriate and customary general liability, product liability and recallinsurance with respect to the Product. Draxis shall be responsible forobtaining appropriate and customary general liability insurance with respect tothe Formulation of the Product.  BoneCare shall be responsible for obtaining appropriate and customary generalliability insurance with

 

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respect totransfer of Active Ingredient to Draxis. Draxis shall be responsible for obtaining appropriate and customarygeneral liability insurance with respect to storage of Active Ingredient in theFacility.

 

**ARTICLE VI**

 

**WARRANTIES AND INDEMNITIES**

 

6.1           **Draxis Warranties**.  Draxis warrants and covenants that:

 

(a)           allProduct Formulated and delivered to or at the direction of Bone Care by Draxiswill comply with the Licenses and shall have been Formulated in accordance withand comply with the Specifications and FDA cGMP, and shall not be adulterated;

 

(b)           allquantities of Product supplied to Bone Care hereunder shall be marked by Batchand include expiration dates or otherwise in accordance with Bone Care’sstandard marking procedures;

 

(c)           allMaterials (other than the Active Ingredient supplied by Bone Care) used in theFormulation of Product shall be in compliance with Specifications and FDA cGMP’s;and

 

(d)           allProduct Formulation will include in process and quality control testing toguarantee product quality, acceptability and compliance with Specifications andFDA cGMP.

 

The foregoingrepresentations, warranties and covenants shall survive the execution anddelivery of this Agreement and shall continue in full force and effect for thebenefit of Bone Care.  Suchrepresentations, warranties and covenants are in addition to and not in substitutionfor any representations and warranties made by Draxis to Bone Care or itsassignee pursuant to this Agreement or any other agreement between Bone Careand Draxis or its assignee.

 

6.2           **Bone Care Representations and Warranties**.  Bone Care warrants and covenants that:

 

(a)           itshall obtain and maintain all necessary permits, registrations and Licencesrequired for it to perform its obligations to Draxis under this Agreementincluding, without limitation, submitting all annual periodic reports to therelevant Governmental Authorities with respect to the Product;

 

(b)           itshall provide all information necessary for Draxis to Formulate the Product inaccordance with the Specifications and all applicable Laws including, withoutlimitation, FDA cGMP; and shall make its employees available to respond toquestions concerning such information;

 

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(c)           itshall ensure that Draxis is at all times during the term of the Agreement inpossession of sufficient amounts of Active Ingredient for Draxis to Formulate theProduct in accordance with the Specifications and all applicable Lawsincluding, without limitation, FDA cGMP ;

 

(d)           itshall not request changes to the Specifications that are technically unfeasibleand/or materially burdensome to Draxis;

 

(e)           itshall take reasonable and customary steps to ensure that the Active Ingredientsupplied to Draxis pursuant to the terms of the Agreement comply with theSpecifications and all applicable Laws including, without limitation, FDA cGMP;and

 

(f)            itshall ensure that all packaging and labeling requirements for the Product arein accordance with applicable Law.

 

The foregoingrepresentations, warranties and covenants shall survive the execution anddelivery of this Agreement and shall continue in full force and effect for thebenefit of Draxis.  Such representations,warranties and covenants are in addition to and not in substitution for anyrepresentations and warranties made by Bone Care to Draxis or its assigneepursuant to this Agreement or any other agreement between Bone Care and Draxisor its assignee.

 

6.3           **Government Inspections and Communications**.  Draxis agrees to notify promptly Bone Care ofany inspections of any Governmental Authority pending as of the date hereof oras notice of same may arise, and of any communications to or from anyGovernmental Authority (including the reporting of adverse drug experiences orfield alerts) which might (i) adversely affect Draxis’ ability to perform itsobligations under this Agreement, or (ii) result in an inspection of theFacility regarding Formulation of the Product.

 

6.4           **Indemnity of Draxis**.  Subject to the limitations on liabilityspecified in Section 6.7, Bone Care agrees to indemnify and hold harmlessDraxis for any and all Losses associated with the actions of Bone Care and/orits Affiliates, agents or representatives arising out of or resulting from:

 

(a)           theuse, manufacture, marketing, sale and/or distribution of any or all of theProduct, unless such liability arises as a result of Draxis’ negligent act oromission, breach of warranty or failure to perform a covenant under thisAgreement;

 

(b)           theinfringement by Bone Care of the intellectual property rights of a thirdperson; or

 

(c)           amaterial breach by Bone Care of any of the terms of this Agreement.

 

6.5           **Indemnity of Bone Care**.  Subject to the limitations on liabilityspecified in Section 6.7, Draxis agrees to indemnify and hold harmlessBone Care for any and all

 

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Lossesassociated with the actions of Draxis and/or its Affiliates, agents orrepresentatives arising out of or resulting from:

 

(a)           breachof warranty or failure to perform a covenant under this Agreement; or

 

(b)           amaterial breach by Draxis of any of the terms of this Agreement.

 

6**.**6           **Indemnity Proceedings**.

 

(a)           AnyIndemnitee seeking indemnification under this Agreement (the “Indemnified Party”)shall forthwith notify the other Party (“Indemnitor”) of such matter inwriting.  If a claim by a third party ismade against an Indemnitee, and if the Indemnitee intends to seek indemnitywith respect thereto under this Agreement, the Indemnitee shall promptly (andin any case within thirty (30) days of such claim being made) notify theIndemnitor of such with reasonable particulars. The Indemnitor shall have thirty (30) days after receipt of such noticeto undertake, conduct and control, through counsel of their own choosing(reasonably acceptable to Indemnitee) and at their own expense, the settlementor defense thereof, and the Indemnitee shall cooperate with them in connectiontherewith, except that with respect to settlements entered into by theIndemnitor (i) the consent of the Indemnitee shall be required if thesettlement provides for equitable relief against the Indemnitee, which consentshall not be unreasonably withheld or delayed; and (ii) the Indemnitor shallobtain the release of the Indemnitee.  Ifthe Indemnitor undertakes, conducts and controls the settlement or defense ofsuch claim (i) they shall permit the Indemnitee to participate in such settlementor defense through counsel chosen by the Indemnitee, provided that the fees andexpenses of such counsel shall be borne by the Indemnitee; and (ii) they shallpromptly reimburse the Indemnitee for the full amount of any loss resultingfrom any claim and all related expenses (other than the fees and expenses ofcounsel as aforesaid) incurred by the Indemnitee.  The Indemnitee shall not pay or settle anyclaim so long as the Indemnitor is reasonably contesting any such claim in goodfaith on a timely basis.  Notwithstandingthe two immediately preceding sentences, the Indemnitee shall have the right topay or settle any such claim, provided that in such event it shall waive anyright to indemnity therefor by the Indemnitor.

 

(b)           Withrespect to third party claims, if the Indemnitor does not notify the Indemniteewithin thirty (30) days after the receipt of the Indemnitee’s notice of a claimof indemnity hereunder that it elects to undertake the defense thereof, theIndemnitee shall have the right, but not the obligation, to contest, settle or compromisethe claim in the exercise of its reasonable judgement using counsel of itschoice at the expense of the Indemnitor.

 

(c)           Inthe event of any claim by a third party against an Indemnitee, the defense ofwhich is being undertaken and controlled by the Indemnitor, the Indemnitee willuse all reasonable efforts to make available to the Indemnitor those employeeswhose assistance, testimony or presence is necessary to assist the Indemnitorin evaluation and in defending any such claim; provided that the Indemnitorshall be responsible for the expense associated with any employees madeavailable by the Indemnitee to the Indemnitor

 

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hereunder,which expense shall be equal to an amount to be mutually agreed upon per personper hour or per day or each day or portion thereof that such employees areassisting, and which shall not exceed the actual cost to the Indemniteeassociated with such employees.

 

6.7           **Limitation of Liability**.  ***

 

6.8           **Limited Patent License. **Bone Care grants no licensesto Draxis under Canadian patents owned by or licensed to Bone Care except tothe extent necessary to manufacture Product for Bone Care in accordance withthe specific terms of this Agreement. The license so granted shall be fully paid and nonexclusive and shall terminateupon the termination of this Agreement. Subject to the terms of Section 8.8, Draxis shall have not have theright to (i) assign any such license rights without the written consent of BoneCare, (ii) manufacture Product for any party or for any purpose except asprovided expressly herein, or (iii) sublicense any licenses granted pursuant tothis paragraph.  Except as expresslyprovided herein, Bone Care does not grant to Draxis a license, either expressor implied, to make, use, sell, offer for sale, or import products under anyintellectual property rights, including patent rights, owned by or licensed toBone Care.  Subject to the terms of thisAgreement including, without limitation, the terms of Section 2.1 (b)hereof which set out the guaranteed percentage of annual aggregate Formulationvolumes of Product, Bone Care retains the right to sublicense any and allrights under Canadian patents owns by or licensed to Bone Care to thirdparties.

 

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**ARTICLE VII**

 

**TERM AND TERMINATION**

 

7.1           **Term of Agreement.**

 

This Agreementis effective from the date hereof, and shall continue in effect for five (5)years from such date unless earlier terminated or extended in accordance withthe terms of the Agreement (the “Term”).

 

7.2           **Termination of Agreement**.

 

(a)           EitherParty may terminate the Agreement with written notice to the other Party, ifthe other Party defaults in a material respect in the performance or observanceof any of its obligations under this Agreement and such default continues,unremedied, for a period of sixty (60) Business Days following written noticeof such default to the defaulting Party.

 

(b)           EitherParty may terminate this Agreement upon notice to the other Party, if the otherParty makes an assignment for the benefit of its creditors, is adjudgedbankrupt, becomes insolvent, ceases or threatens to cease to carry on business,files or consents to the filing of a petition in bankruptcy, seeks to takeadvantage of any legislation relating to insolvency, arrangement or relief ofdebtors, winds-up or liquidates, or if any receiver, trustee, liquidator orsimilar official is appointed of such other Party or any of its property.

 

(c)           Followingtermination of this Agreement, Bone Care will have access to any records andBatch samples relating to the Formulation of the Product under thisAgreement.  Termination of this Agreementshall not affect any obligation to pay money, indemnify, reimburse or maintainconfidentiality which either Party may have incurred during the term of thisAgreement.

 

(d)           Withinninety (90) days of the effective date of the termination of this Agreement forany reason, Bone Care may, at its option, purchase at cost any Materials thatDraxis has purchased exclusively for Bone Care in accordance with thisAgreement for the Formulation of the Product. Upon the termination of this Agreement, Bone Care may, at its option,place orders with Draxis for the Formulation of additional Product in order toexhaust existing stocks of Materials. Any Materials associated with the Product that are not purchased by BoneCare pursuant to this Section 7.2(d) shall be disposed of or destroyed inaccordance with Bone Care’ instructions.

 

(e)           Followingtermination of this Agreement, Draxis shall return to Bone Care, in accordancewith the provisions of Section 5.1 hereof, any Materials, ActiveIngredient or equipment that were purchased, or provided, by Bone Care inaccordance with this Agreement for the Formulation of the Product.

 

7.3           **Renewal of Agreement**.  Unless terminated in accordance with Section 7.2hereof, this Agreement shall automatically renew at the end of the Term forfurther successive periods of one year, unless either Party gives writtennotice of non-renewal to the other Party one (1) year prior to the end of theTerm or the end of a renewal period, as the case may be.

 

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**ARTICLE VIII**

 

**MISCELLANEOUS**

 

8.1           **Relationship of the Parties**.  The relationship between Draxis and Bone Carecreated pursuant to this Agreement is intended to be and shall be solely thatof independent contractors.  NeitherParty, nor its employees, agents or representatives, shall under anycircumstances be considered employees, agents, partners, joint venturers orrepresentatives of the other Party. Neither Party, nor its employees, agents or representatives shall act orattempt to act, or represent themselves, directly or by implication, as anemployee, agent, joint venturer, partner or representative of the other Partyor in any manner assume or create, or attempt to assume or create, anyobligation or liability of any kind, express or implied, on behalf of or in thename of the other Party.  No person otherthan Bone Care or Draxis may rely on or enforce any provision of thisAgreement.

 

8.2           **Force Majeure**.

 

(a)           **Defined**.  In this Agreement, “Force Majeure” means anevent or occurrence beyond the reasonable control of a Party which by theexercise of reasonable diligence could not be overcome, including, but notlimited to, strikes, lock-outs, labour disruptions, acts of God, changes in thelaw, restraints of governments, riots, arrests of people, act of war, civildisturbances, rebellion or sabotage, severe breakage of or accident tomachinery, plant or equipment, pipeline or pipe failure, failure of fuel orwater supply or transportation, fire, flood, lightning, ice, epidemic,explosion, defaults by suppliers not caused by the act or omission of theParty, any delay or failure by a Governmental Authority to issue any relevantpermit or order not caused by the act or omission of the Party.

 

(b)           **Notice; Non-Default**.  AParty shall be deemed not to be in default with respect to non-performance ofany of its obligations under this Agreement except for payment obligations, ifand so long as such non-performance is due in whole or in some material way toan event of Force Majeure and that Party has used its commercially reasonableefforts to remove the event of Force Majeure and to perform its obligationsunder the Agreement.  If an event ofForce Majeure occurs, the Party affected shall promptly notify the other Partyof the occurrence of the event, its extent and probable duration.

 

Subject to Section 8.2(c) hereof, if Draxis is unable to supplyBone Care with its requirements of Product by reason of Force Majeure, ForceMajeure shall excuse Draxis’ performance until the Force Majeure has ceased andfor a reasonable period of time thereafter, to allow Draxis to restore itselfto the position it was in with respect to the Formulation of Productimmediately prior to Force Majeure.  Withinthirty (30) days of notification by Draxis that it is able to resume thenecessary supply of the Product to Bone Care, Bone Care shall resume obtainingits requirements of Product from Draxis pursuant to the terms of thisAgreement.  Draxis shall suffer nopenalty or incur any liability for its inability to perform hereunder by reasonof Force Majeure.

 

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(c)           **Termination**.  If a Party’s failure to perform any of itsobligations of Force Majeure has continued for one hundred and twenty (120)days, unless within such period the non-performing Party has begun to remedyits inability to perform, the other Party may, if itself not in default underthe Agreement, terminate this Agreement by providing written notice to thenon-performing Party.  In the event ofsuch termination, both Parties’ respective rights and obligations under thisAgreement shall terminate except for any amounts previously due and owing byone Party to the other and except for any other obligations which thisAgreement expressly provides shall survive termination.

 

8.3           **Further Assurances**.  Each Party will at any time and from time totime, upon the request of the other Party, execute and deliver such furtherdocuments and do such further acts and things as the other Party may reasonablyrequest to evidence, carry out and give full effect to the terms, conditions,intent and meaning of this Agreement.

 

8.4           **Confidentiality**.  During the term of this Agreement and for aperiod of ten (10) years thereafter except as otherwise provided, no Partyshall, without the specific written consent of the other Party, disclose to anythird party (except to governmental health authorities to obtain and maintainthe registrations of the Product or other disclosures required by Law) or usefor its own purposes any information which is received in confidence from theother Party or its agent(s) pursuant to this Agreement concerning the Productor the other Party’s business unless such information:

 

(a)           wasor becomes public through no fault of the receiving Party; or

 

(b)           wassubsequently, lawfully and in good faith obtained by the receiving Party froman independent third party without, to the best of the knowledge of thereceiving Party, a breach of any confidentiality obligations, as shown bydocumentation sufficient to establish the third party as the source of theinformation and not obtained by the third party from the disclosing Party; or

 

(c)           whichreceiving Party can establish, by documented and competent evidence, was knownto that Party prior to the date of disclosure of such information by thedisclosing Party.

 

8.5           **Notices**.  Any notice or other communication made underthis Agreement (other than routine business communication) shall be in writingand shall be properly given:  (i) whendelivered if sent by personal delivery; (ii) when transmitted if sent byfacsimile with confirmation of transmission; or (iii) three days after beingposted if sent by registered mail return receipt requested, addressed:

 
| (a)    | if to  Draxis, to it at: | Draxis  Pharma Inc.              |
|--------|--------------------------|----------------------------------|
|   |                     | 16751 Trans- Canada Highway      |
|   |                     | Kirkland, Quebec, Canada H9H 4J4 |
|   |                     | Facsimile: (514) 694-3841        |
|   |                     |                             |
|   |                     | Attention: President             |

 

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| (b)    | if to Bone  Care, to it at: | Bone Care  International, Inc.            |
|--------|-----------------------------|-------------------------------------------|
|   |                        | Bone Care Centre                          |
|   |                        | 1600 Aspen Commons                        |
|   |                        | Middleton, WI   53562           |
|   |                        | Facsimile: (608) 662-0032                 |
|   |                        |                                      |
|   |                        | Attention:  Vice President,  Finance |

 

A Party maychange its address for notice by notifying the other Party at any time.

 

8.6           **Waiver**. No delay or failure on the part of a Party in exercising any rightsunder this Agreement shall affect any of such Party’s rights.

 

8.7           **Severability**.  Any provision of this Agreement that is heldto be inoperative, unenforceable or invalid in any jurisdiction shall beinoperative, unenforceable or invalid in that jurisdiction without affectingany other provision hereof in that jurisdiction or the operation,enforceability or validity of that provision in any other jurisdiction, and tothis end the provisions hereof are declared to be severable.

 

8.8           **Inurement; Assignment**.  This Agreement is binding on and inures tothe benefit of each Party and its successors and permitted assigns, providedthat neither Bone Care nor Draxis shall assign or otherwise transfer any rightsunder or interest in this Agreement without the other Party’s prior writtenconsent, such consent not to be unreasonably withheld.  Draxis may assign this Agreement to anAffiliate provided all Formulation remains at the Facility, and Draxiscontinues to guarantee the performance obligations of the Affiliate as and to theextent of such obligations required by this Agreement.  Bone Care may also assign this Agreement toan Affiliate provided such Affiliate is of comparable credit-worthiness as BoneCare.

 

8.9           **Entire Agreement**.  Except for the terms of a letter of agreementbearing even date herewith, this Agreement constitutes the entire agreementbetween the Parties and cancels and supercedes any prior understanding andagreements between the Parties with respect ot the matters contained herein.

 

8.10         **Amendments.**  This Agreement may not be modified or amendedexcept by further written statement signed by both Parties.

 

8.11         **Incorporation of Schedules**.  The schedules attached to this Agreement areincorporated by reference herein and made a part hereof.  In the event of any inconsistency that mayexist or arise between the provisions of this Agreement and any provision ofthe Quality Manual attached hereto in Schedule G and the ProductionProposal attached as Schedule H, the parties agree that the terms of thisAgreement shall control.

 

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8.12         **Governing Law**.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Delaware without regardto that State’s conflict of laws principles.

 

8.13         **Counterparts**.  This Agreement may be executed incounterparts, each of which shall be deemed to be an original and whichtogether shall constitute one and the same agreement.

 

**IN WITNESS WHEREOF**,the Parties have executed this Agreement as of the date written above, by theirauthorized officers, who by signing confirm their authority and intention tobind the Party they represent.

 

 
| ** ** | **BONE CARE INTERNATIONAL, INC.** |
|------------|-----------------------------------|
|       |                              |
|       |                              |
|       | Per:                              | /s/ Robert  A. Beckman |   |
|       | Robert A. Beckman                 |
|       | Vice President, Finance and Chief |
|       | Financial Officer                 |
|       |                              |
|       |                              |
| ** ** | **DRAXIS PHARMA INC.**            |
|       |                              |
|       |                              |
|       | Per:                              | /s/ Jim A.  H. Garner |   |
|       | Jim A. H. Garner                  |
|       | President                         |

 

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**SCHEDULE“A”**

 

**DESCRIPTIONOF PRODUCT**

 
| **Product Name**                                     | ** ** | **SKU-NDC#** | ** ** | **Description**                                      | ** ** |
|------------------------------------------------------|------------|--------------|------------|------------------------------------------------------|------------|
|                                                 |       |         |       |                                                 |       |
| Hectorol® Injection  (α-Hydroxyvitamin D2) |       | 64894-840-50 |       | 2 mL ampule  containing  4.0 μg Doxercalciferol |       |

 

 

 

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**SCHEDULE “C”**

 

**PRODUCT PRICE**

 

*******

 

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**SCHEDULE “D”**

 

**Finished Product Specifications**

**Hectorol Injection, 2 μg/mL, in 2 mL ampules**

** **

***

 

Please notethat the method number listed above is a general reference to the latestapproved version of the method.

 

 

 

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**SCHEDULE “E”**

 

**Volume Discount Plan**

 

***

 

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**SCHEDULE “F”**

 

**Capital Plan**

 

***

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*      Theserequirements and quoted costs are based on the above noted assumptions and aregood faith estimates of the capital required for the Facility to Formulate theProduct.  ***

 

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