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                                                                   EXHIBIT 10.12

                               SEVERANCE AGREEMENT

            THIS AGREEMENT is entered into as of the 1st day of July, 2004 by
and between Bone Care International, Inc., a Wisconsin corporation, and Jeffrey
J. Freitag (the "Executive").

                               W I T N E S S E T H

            WHEREAS, the Executive currently serves as a key employee of the
Company (as defined in Section 1) and his services and knowledge are valuable to
the Company in connection with the management of one or more of the Company's
principal divisions, departments or subsidiaries; and

            WHEREAS, the Board (as defined in Section 1) has determined that it
is in the best interests of the Company and its stockholders to secure the
Executive's continued services and to ensure the Executive's continued
dedication and objectivity in the event of any threat or occurrence of, or
negotiation or other action that could lead to, or create the possibility of, a
Change in Control (as defined in Section 1) of the Company, without concern as
to whether the Executive might be hindered or distracted by personal
uncertainties and risks created by any such possible Change in Control, and to
encourage the Executive's full attention and dedication to the Company, the
Board has authorized the Company to enter into this Agreement.

            NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements herein contained, the Company and the Executive
hereby agree as follows:

            1.    DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings set forth below:

            (a)   "Board" means the Board of Directors of the Company.

            (b)   "Cause" means:

                  (1)   a material breach by the Executive of those duties and
      responsibilities of the Executive which do not differ in any material
      respect from the duties and responsibilities of the Executive during the
      90-day period immediately prior to a Change in Control (other than as a
      result of incapacity due to physical or mental illness) which is
      demonstrably willful and deliberate on the Executive's part, which is
      committed in bad faith or without reasonable belief that such breach is in
      the best interests of the Company and which is not remedied in a
      reasonable period of time after receipt of written notice from the Company
      specifying such breach;

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                  (2)   the commission by the Executive of a felony involving
      moral turpitude;

                  (3)   the commission by the Executive of theft, fraud, breach
      of trust or any significant act of dishonesty involving the Company or its
      subsidiaries; or

                  (4)   the significant violation by the Executive of the
      Company's code of business conduct and ethics or any statutory or common
      law duty of loyalty to the Company or its subsidiaries which is
      demonstrably willful and deliberate on the Executive's part.

            (c)   "Change in Control" means:

                  (1)   the acquisition by any individual, entity or group (a
      "Person"), including any "person" within the meaning of Section 13(d)(3)
      or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
      "Exchange Act"), of beneficial ownership within the meaning of Rule 13d-3
      promulgated under the Exchange Act, of 50% or more of either (i) the then
      outstanding shares of common stock of the Company (the "Outstanding Common
      Stock") or (ii) the combined voting power of the then outstanding
      securities of the Company entitled to vote generally in the election of
      directors (the "Outstanding Voting Securities"); excluding, however, the
      following: (A) any acquisition directly from the Company (excluding any
      acquisition resulting from the exercise of an exercise, conversion or
      exchange privilege unless the security being so exercised, converted or
      exchanged was acquired directly from the Company), (B) any acquisition by
      the Company, (C) any acquisition by an employee benefit plan (or related
      trust) sponsored or maintained by the Company or any corporation
      controlled by the Company or (D) any acquisition by any corporation
      pursuant to a transaction which complies with clauses (i), (ii) and (iii)
      of subsection (3) of this Section (1)(c); provided further that, for
      purposes of clause (B), if any Person (other than the Company or any
      employee benefit plan (or related trust) sponsored or maintained by the
      Company or any corporation controlled by the Company) shall become the
      beneficial owner of 50% or more of the Outstanding Common Stock or 50% or
      more of the Outstanding Voting Securities by reason of an acquisition by
      the Company and such Person shall, after such acquisition by the Company,
      become the beneficial owner of any additional shares of the Outstanding
      Common Stock or any additional Outstanding Voting Securities and such
      beneficial ownership is publicly announced, such additional beneficial
      ownership shall constitute a Change in Control;

                  (2)   individuals who, as of the date hereof, constitute the
      Board (the "Incumbent Board") cease for any reason to constitute at least
      a majority of such Board; provided, that any individual who becomes a
      director of the Company subsequent to the date hereof whose election, or
      nomination for election by the Company's stockholders, was approved by the
      vote of at least a majority of the directors then comprising the Incumbent
      Board shall be deemed to have been a member of the Incumbent Board; and
      provided further, that any individual who was initially elected as a
      director of the Company as a result of an actual or threatened
      solicitation by a Person other than the Company for the purpose of
      opposing a solicitation by any other Person with respect to the election
      or removal of directors, or any other actual or threatened solicitation of

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      proxies or consents by or on behalf of any Person other than the Board
      shall not be deemed a member of the Incumbent Board; or

                  (3)   the consummation of a reorganization, merger or
      consolidation or sale or other disposition of all or substantially all of
      the assets of the Company (a "Corporate Transaction"); excluding, however,
      a Corporate Transaction pursuant to which (i) all or substantially all of
      the individuals or entities who are the beneficial owners, respectively,
      of the Outstanding Common Stock and the Outstanding Voting Securities
      immediately prior to such Corporate Transaction will beneficially own,
      directly or indirectly, more than 50% of, respectively, the outstanding
      shares of common stock, and the combined voting power of the outstanding
      securities entitled to vote generally in the election of directors, as the
      case may be, of the corporation resulting from such Corporate Transaction
      (including, without limitation, a corporation which as a result of such
      transaction owns Company or all or substantially all of the Company's
      assets either directly or indirectly) in substantially the same
      proportions relative to each other as their ownership, immediately prior
      to such Corporate Transaction, of the Outstanding Common Stock and the
      Outstanding Voting Securities, as the case may be, (ii) no Person (other
      than the Company, any employee benefit plan (or related trust) sponsored
      or maintained by the Company or any corporation controlled by the Company
      or the corporation resulting from such Corporate, and any Person which
      beneficially owned, immediately prior to such Corporate Transaction,
      directly or indirectly, 50% or more of the Outstanding Common Stock or the
      Outstanding Voting Securities, as the case may be) will beneficially own,
      directly or indirectly, 50% or more of, respectively, the outstanding
      shares of common stock of the corporation resulting from such Corporate
      Transaction or the combined voting power of the outstanding securities of
      such corporation entitled to vote generally in the election of directors
      and (iii) individuals who were members of the Incumbent Board will
      constitute at least a majority of the members of the board of directors of
      the corporation resulting from such Corporate Transaction.

            (d)   "Code" means the Internal Revenue Code of 1986, as amended.

            (e)   "Company" means Bone Care International, Inc. a Wisconsin
corporation.

            (f)   "Date of Termination" means:

                  (1)   the effective date on which the Executive's employment
      by the Company terminates as specified in a prior written notice by the
      Company or the Executive, as the case may be, to the other, delivered
      pursuant to Section 11 or

                  (2)   if the Executive's employment by the Company terminates
      by reason of death, the date of death of the Executive.

            (g)   "Good Reason" means, without the Executive's express written
consent, the occurrence of any of the following events after a Change in
Control:

                  (1)   any of (i) the assignment to the Executive of any duties
      inconsistent in any material respect with the Executive's duties or
      responsibilities with the Company immediately prior to such Change in
      Control, (ii) a change in the

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      Executive's titles or offices with the Company as in effect immediately
      prior to such Change in Control or (iii) any removal or involuntary
      termination of the Executive from the Company otherwise than as expressly
      permitted by this Agreement;

                  (2)   a reduction by the Company in the Executive's rate of
      annual base salary as in effect immediately prior to such Change in
      Control or as the same may be increased from time to time thereafter;

                  (3)   any requirement of the Company that the Executive be
      based anywhere other than at the facility where the Executive is located
      at the time of the Change in Control;

                  (4)   the failure of the Company to continue in effect any
      employee benefit plan or compensation plan in which the Executive is
      participating immediately prior to such Change in Control, unless the
      Executive is permitted to participate in other plans providing the
      Executive with substantially comparable benefits, or the taking of any
      action by the Company which would adversely affect the Executive's
      participation in or materially reduce the Executive's benefits under any
      such plan; or

                  (5)   the failure of the Company to obtain the assumption
      agreement from any successor as contemplated in Section 10(b).

                  For purposes of this Agreement, any good faith determination
      of Good Reason made by the Executive shall be conclusive; provided,
      however, that an isolated, insubstantial and inadvertent action taken in
      good faith and which is remedied by the Company promptly after receipt of
      written notice thereof given by the Executive shall not constitute Good
      Reason.

            (h)   "Nonqualifying Termination" means a termination of the
Executive's employment:

                  (1)   by the Company for Cause,

                  (2)   by the Executive for any reason other than a Good
      Reason,

                  (3)   as a result of the Executive's death or

                  (4)   by the Company due to the Executive's absence from his
      duties with the Company on a full-time basis for at least 180 consecutive
      days as a result of the Executive's incapacity due to physical or mental
      illness.

            (i)   "Termination Period" means the period of time beginning with a
Change in Control and ending on the earlier to occur of:

                  (1)   two years following such Change in Control and

                  (2)   the Executive's death.

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            2.    OBLIGATIONS OF THE EXECUTIVE. The Executive agrees that in the
event any person or group attempts a Change in Control, he shall not voluntarily
leave the employ of the Company without Good Reason

            (a)   until such attempted Change in Control terminates or

            (b)   if a Change in Control shall occur, until 90 days following
such Change in Control. For purposes of clause (a) of the preceding sentence,
Good Reason shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.

            3.    PAYMENTS UPON TERMINATION OF EMPLOYMENT.

            (a)   If during the Termination Period the employment of the
Executive shall terminate, other than by reason of a Nonqualifying Termination,
then the Company shall pay to the Executive (or the Executive's beneficiary or
estate) within 30 days following the Date of Termination, as compensation for
services rendered to the Company:

                  (1)   a cash amount equal to the sum of (i) the Executive's
      full annual base salary from the Company through the Date of Termination,
      to the extent not theretofore paid, (ii) the Executive's annual bonus in
      an amount at least equal to the highest annualized (for any fiscal year
      consisting of less than 12 full months or with respect to which the
      Executive has been employed by the Company for less than 12 full months)
      bonus paid or payable, including by reason of any deferral, to the
      Executive by the Company in respect of the three fiscal years of the
      Company (or such portion thereof during which the Executive performed
      services for the Company if the Executive shall have been employed by the
      Company for less than such three fiscal year period) immediately preceding
      the fiscal year in which the Change in Control occurs, multiplied by a
      fraction, the numerator of which is the number of days in the fiscal year
      in which the Change in Control occurs through the Date of Termination and
      the denominator of which is 365 or 366, as applicable, and (iii) any
      compensation previously deferred by the Executive (together with any
      interest and earnings thereon) and any accrued vacation pay, in each case
      to the extent not theretofore paid; plus

                  (2)   a lump-sum cash amount (subject to any applicable
      payroll or other taxes required to be withheld pursuant to Section 5) in
      an amount equal to (i) the Executive's highest annual base salary from the
      Company in effect during the 12-month period prior to the Date of
      Termination, plus (ii) the Executive's highest annualized (for any fiscal
      year consisting of less than 12 full months or with respect to which the
      Executive has been employed by the Company for less than 12 full months)
      bonus, paid or payable, including by reason of any deferral, to the
      Executive by the Company in respect of the five fiscal years of the
      Company (or such portion thereof during which the Executive performed
      services for the Company if the Executive shall have been employed by the
      Company for less than such five fiscal year period) immediately preceding
      the fiscal year in which the Change in Control occurs, provided, that any
      amount paid pursuant to this Section 3(a)(2) shall be paid in lieu of any
      other amount of severance relating to salary or bonus continuation to be
      received by the Executive upon

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      termination of employment of the Executive under any severance agreement,
      plan, policy or arrangement of the Company.

            (b)   For a period of eighteen months commencing on the Date of
Termination, the Company shall continue to keep in full force and effect all
policies of medical, accident, disability and life insurance with respect to the
Executive and his dependents with the same level of coverage, upon the same
terms and otherwise to the same extent as such policies shall have been in
effect immediately prior to the Date of Termination and the Company shall pay
all costs of the continuation of such insurance coverage.

            (c)   For a period of twelve months commencing on the Date of
Termination, the Executive shall receive outplacement assistance services from
an outplacement agency selected by the Executive and the Company shall pay all
costs of such services; provided that such costs shall not exceed $15,000 in the
aggregate.

            (d)   If during the Termination Period the employment of the
Executive shall terminate by reason of a Nonqualifying Termination, then the
Company shall pay to the Executive within 30 days following the Date of
Termination, a cash amount equal to the sum of:

                  (1)   the Executive's full annual base salary from the Company
      through the Date of Termination, to the extent not theretofore paid, and

                  (2)   any compensation previously deferred by the Executive
      (together with any interest and earnings thereon) and any accrued vacation
      pay, in each case to the extent not theretofore paid.

            4.    CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. (a) Anything in
this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 4) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. Notwithstanding the foregoing provisions of this Section 4(a), if
it shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the Executive, after taking into account the Payments and the Gross-Up
Payment, would not receive a net after-tax benefit (taking into account both
income taxes and any Excise Tax) which is at least ten percent (10%) greater
than the net after-tax proceeds to the Executive resulting from an elimination
of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an
amount (the "Reduced Amount") that is one dollar less than the smallest amount
that would give rise to any Excise Tax, then no Gross-Up Payment shall be made
to the Executive and the Payments, in the aggregate, shall be reduced to the
Reduced Amount.

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            (b)   Subject to the provisions of Section 4(c), all determinations
required to be made under this Section 4, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by the Company's
public accounting firm (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control, the Executive shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 4, shall be paid by the Company to the Executive within five days of the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 4(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

            (c)   The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 10 business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:

                  (1)   give the Company any information reasonably requested by
      the Company relating to such claim,

                  (2)   take such action in connection with contesting such
      claim as the Company shall reasonably request in writing from time to
      time, including, without limitation, accepting legal representation with
      respect to such claim by an attorney reasonably selected by the Company,

                  (3)   cooperate with the Company in good faith in order
      effectively to contest such claim, and

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                  (4)   permit the Company to participate in any proceedings
      relating to such claim; provided, however, that the Company shall bear and
      pay directly all costs and expenses (including additional interest and
      penalties) incurred in connection with such contest and shall indemnify
      and hold the Executive harmless, on an after-tax basis, for any Excise Tax
      or income tax (including interest and penalties with respect thereto)
      imposed as a result of such representation and payment of costs and
      expenses. Without limitation on the foregoing provisions of this Section
      4(c), the Company shall control all proceedings taken in connection with
      such contest and, at its sole option, may pursue or forgo any and all
      administrative appeals, proceedings, hearings and conferences with the
      taxing authority in respect of such claim and may, at its sole option,
      either direct the Executive to pay the tax claimed and sue for a refund or
      contest the claim in any permissible manner, and the Executive agrees to
      prosecute such contest to a determination before any administrative
      tribunal, in a court of initial jurisdiction and in one or more appellate
      courts, as the Company shall determine; provided further, that if the
      Company directs the Executive to pay such claim and sue for a refund, the
      Company shall advance the amount of such payment to the Executive on an
      interest-free basis and shall indemnify and hold the Executive harmless,
      on an after-tax basis, from any Excise Tax or income tax (including
      interest or penalties with respect thereto) imposed with respect to such
      advance or with respect to any imputed income with respect to such
      advance; and provided further, that any extension of the statute of
      limitations relating to payment of taxes for the taxable year of the
      Executive with respect to which such contested amount is claimed to be due
      is limited solely to such contested amount. Furthermore, the Company's
      control of the contest shall be limited to issues with respect to which a
      Gross-Up Payment would be payable hereunder and the Executive shall be
      entitled to settle or contest, as the case may be, any other issue raised
      by the Internal Revenue Service or any other taxing authority.

            (d)   If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 4(c), the Executive becomes entitled to
receive, and receives, any refund with respect to such claim, the Executive
shall (subject to the Company's complying with the requirements of Section 4(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 4(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

            5.    WITHHOLDING TAXES. The Company may withhold from all payments
due to the Executive (or his beneficiary or estate) hereunder all taxes which,
by applicable federal, state, local or other law, the Company is required to
withhold therefrom.

            6.    REIMBURSEMENT OF EXPENSES. If any contest or dispute shall
arise under this Agreement involving termination of the Executive's employment
with the Company or involving the failure or refusal of the Company to perform
fully in accordance with the terms hereof, the Company shall reimburse the
Executive, on a current basis, for all legal fees and

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expenses, if any, incurred by the Executive in connection with such contest or
dispute, together with interest thereon at a rate equal to the prime rate, as
published under "Money Rates" in The Wall Street Journal from time to time, but
in no event higher than the maximum legal rate permissible under applicable law,
such interest to accrue from the date the Company receives the Executive's
statement for such fees and expenses through the date of payment thereof;
provided, however, that in the event the resolution of any such contest or
dispute includes a finding denying, in total, the Executive's claims in such
contest or dispute, the Executive shall be required to reimburse the Company,
over a period of 12 months from the date of such resolution, for all sums
advanced to the Executive pursuant to this Section 6.

            7.    OPERATIVE EVENT. Notwithstanding any provision herein to the
contrary, no amounts shall be payable hereunder unless and until there is a
Change in Control at a time when the Executive is employed by the Company.

            8.    TERMINATION OF AGREEMENT.

            (a)   This Agreement shall be effective on the date hereof and shall
continue until terminated by the Company as provided in Section 8(b); provided,
however, that this Agreement shall terminate in any event upon the earlier to
occur of (i) termination of the Executive's employment with the Company prior to
a Change in Control and (ii) the Executive's death.

            (b)   The Company shall have the right prior to a Change in Control,
in its sole discretion, pursuant to action by the Board, to approve the
termination of this Agreement; provided, however, that no such action shall be
taken by the Board during any period of time when the Board has knowledge that
any person has taken steps reasonably calculated to effect a Change in Control
until, in the opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control; and provided further, that in no event
shall this Agreement be terminated in the event of a Change in Control.

            9.    SCOPE OF AGREEMENT. Nothing in this Agreement shall be deemed
to entitle the Executive to continued employment with the Company or its
subsidiaries and, if the Executive's employment with the Company shall terminate
prior to a Change in Control, then the Executive shall have no further rights
under this Agreement; provided, however, that any termination of the Executive's
employment following a Change in Control shall be subject to all of the
provisions of this Agreement.

            10.   SUCCESSORS; BINDING AGREEMENT.

            (a)   This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or substantially all
of the assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.

            (b)   The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in Section 10(a), it will cause
any successor or transferee

                                      - 9 -
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unconditionally to assume, by written instrument delivered to the Executive (or
his beneficiary or estate), all of the obligations of the Company hereunder.
Failure of the Company to obtain such assumption prior to the effectiveness of
any such merger, consolidation or transfer of assets shall be a breach of this
Agreement and shall entitle the Executive to compensation and other benefits
from the Company in the same amount and on the same terms as the Executive would
be entitled hereunder if the Executive's employment were terminated following a
Change in Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any such merger,
consolidation or transfer becomes effective shall be deemed the Date of
Termination.

            (c)   This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amounts would be payable to the Executive
hereunder had the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to such person or persons appointed in writing by the Executive to
receive such amounts or, if no person is so appointed, to the Executive's
estate.

            11.   NOTICES.

            (a)   For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five days after deposit in the
United States mail, certified and return receipt requested, postage prepaid,
addressed

                  (1)   if to the Executive, to 729 Swallowtail Dr., Madison, WI
      53562, and if to the Company, to Bone Care International, 1600 Aspen
      Commons, Middleton, WI 53562, attention Paul L. Berns with a copy to the
      Secretary, or

                  (2)   to such other address as either party may have furnished
      to the other in writing in accordance herewith, except that notices of
      change of address shall be effective only upon receipt.

            (b)   A written notice of the Executive's Date of Termination by the
Company or the Executive, as the case may be, to the other, shall (i) indicate
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated and (iii) specify the termination date (which date
shall be not less than 15 days after the giving of such notice). The failure by
the Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive's or the Company's rights hereunder.

            12.   FULL SETTLEMENT; RESOLUTION OF DISPUTES.

            (a)   The Company's obligation to make any payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-

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off, counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or
not the Executive obtains other employment.

            (b)   If there shall be any dispute between the Company and the
Executive in the event of any termination of the Executive's employment, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause, that the
determination by the Executive of the existence of Good Reason was not made in
good faith, or that the Company is not otherwise obligated to pay any amount or
provide any benefit to the Executive and his dependents or other beneficiaries,
as the case may be, under Sections 3(a) and 3(b), the Company shall pay all
amounts, and provide all benefits, to the Executive and his dependents or other
beneficiaries, as the case may be, that the Company would be required to pay or
provide pursuant to Sections 3(a) and 3(b) as though such termination were by
the Company without Cause or by the Executive with Good Reason; provided,
however, that the Company shall not be required to pay any disputed amounts
pursuant to this Section 12(b) except upon receipt of an undertaking by or on
behalf of the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.

            13.   EMPLOYMENT WITH SUBSIDIARIES. Employment with the Company for
purposes of this Agreement shall include employment with any corporation or
other entity in which the Company has a direct or indirect ownership interest of
50% or more of the total combined voting power of the then outstanding
securities of such corporation or other entity entitled to vote generally in the
election of directors.

            14.   GOVERNING LAW; VALIDITY. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Wisconsin without regard to
the principle of conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which other provisions shall remain in
full force and effect.

            15.   COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original and both of which
together shall constitute one and the same instrument.

            16.   MISCELLANEOUS. No provision of this Agreement may be modified
or waived unless such modification or waiver is agreed to in writing and signed
by the Executive and by a duly authorized officer of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by the
Executive or the Company to insist upon strict compliance with any provision of
this Agreement or to assert any right the Executive or the Company may have
hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this

                                     - 11 -
<PAGE>

Agreement. Except as otherwise expressly set forth in this Agreement, the rights
of, and benefits payable to, the Executive, his estate or his beneficiaries
pursuant to this Agreement are in addition to any rights of, or benefits payable
to, the Executive, his estate or his beneficiaries under any other employee
benefit plan or compensation program of the Company.

            IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and the Executive has
executed this Agreement as of the day and year first above written.

                                          BONE CARE INTERNATIONAL, INC.

                                          By: /S/ PAUL L. BERNS
                                              -----------------------------
                                              Paul L. Berns

                                          /S/ JEFFREY J. FREITAG
                                          ---------------------------------
                                              Jeffrey J. Freitag

Subscribed and Sworn to before me
this 1st day of July, 2004.

/S/ TAMMIE PROCHASKA
-----------------------------------
Tammie Prochaska, Notary Public

My commission expires 6/17/07.

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