Document:

Exhibit 4.69

 

Execution Copy

 

US$12,200,000

 

CREDIT AGREEMENT

 

Dated as of September 4, 2007

 

between

 

DRAXIS PHARMA, a division of DRAXIS SPECIALTY
PHARMACEUTICALS INC.

 

as Borrower

 

and

 

JOHNSON & JOHNSON FINANCE
CORPORATION

 

as Lender

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  REPRESENTATIONS AND WARRANTIES

  	
  11

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1.1

  	
  Existence;
  Power:

  	
  11

  
	
   

  	
  2.1.2

  	
  Subsidiaries:

  	
  11

  
	
   

  	
  2.1.3

  	
  Authorization
  and Enforceability:

  	
  11

  
	
   

  	
  2.1.4

  	
  Breach:

  	
  11

  
	
   

  	
  2.1.5

  	
  Litigation:

  	
  12

  
	
   

  	
  2.1.6

  	
  Compliance
  with Applicable Laws:

  	
  12

  
	
   

  	
  2.1.7

  	
  Governmental
  Consents; No Required Filing:

  	
  12

  
	
   

  	
  2.1.8

  	
  Taxes:

  	
  12

  
	
   

  	
  2.1.9

  	
  Financial
  Statements:

  	
  12

  
	
   

  	
  2.1.10

  	
  No Event of
  Default:

  	
  12

  
	
   

  	
  2.1.11

  	
  Ownership of
  Property; Location of Places of Business; Liens:

  	
  13

  
	
   

  	
  2.1.12

  	
  Environmental
  Matters:

  	
  13

  
	
   

  	
  2.1.13

  	
  No Stamp
  Tax:

  	
  14

  
	
   

  	
  2.1.14

  	
  Insurance:

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  THE CREDIT FACILITIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  INTEREST

  	
  16

  
	
   

  	
   

  	
   

  
	
   

  	
  4.2.1

  	
  Overdue
  Principal, Interest or Other Amounts

  	
  16

  
	
   

  	
  4.2.2

  	
  Payment:

  	
  17

  
	
   

  	
  4.3.1

  	
  Nominal Rate
  of Interest:

  	
  17

  
	
   

  	
  4.3.2

  	
  Interest Act
  (Canada) Disclosure:

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V
  PAYMENT, TAXES, INCREASED COSTS, EVIDENCE OF INDEBTEDNESS AND NOTES

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  5.2.1

  	
  Order of
  Application:

  	
  18

  
							

 

i

 

	
   

  	
  5.2.2

  	
  Event of
  Default:

  	
  18

  
	
   

  	
  5.3.1

  	
  No set-off;
  no withholding:

  	
  18

  
	
   

  	
  5.3.2

  	
  Increased
  Rate of Interest:

  	
  19

  
	
   

  	
  5.3.3

  	
  Tax Credit:

  	
  19

  
	
   

  	
  5.3.4

  	
  Survival of
  Obligations:

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI
  PREDISBURSEMENT CONDITIONS

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1.1

  	
  Conditions
  Precedent to Initial Borrowing:

  	
  20

  
	
   

  	
  6.1.2

  	
  Conditions
  Precedent to each Borrowing:

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII
  COVENANTS OF THE BORROWER

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1.1

  	
  Payment
  Covenant:

  	
  23

  
	
   

  	
  7.1.2

  	
  Corporate
  Existence:

  	
  23

  
	
   

  	
  7.1.3

  	
  Conduct of
  Business and Supply Agreement:

  	
  23

  
	
   

  	
  7.1.4

  	
  Compliance
  with Laws:

  	
  23

  
	
   

  	
  7.1.5

  	
  Insurance:

  	
  23

  
	
   

  	
  7.1.6

  	
  Financial
  Statements and Information:

  	
  24

  
	
   

  	
  7.1.7

  	
  Access:

  	
  25

  
	
   

  	
  7.1.8

  	
  Environmental
  Matters:

  	
  25

  
	
   

  	
  7.1.9

  	
  To Register:

  	
  25

  
	
   

  	
  7.1.10

  	
  To Maintain
  Security:

  	
  25

  
	
   

  	
  7.1.11

  	
  Change of Name, New Locations:

  	
  25

  
	
   

  	
  7.2.1

  	
  Negative
  Pledge:

  	
  26

  
	
   

  	
  7.2.2

  	
  Sale of
  Assets:

  	
  26

  
	
   

  	
  7.2.3

  	
  No
  Modification to Corporate Structure:

  	
  26

  
	
   

  	
  7.2.4

  	
  Unauthorized
  Uses of the Credit Facilities:

  	
  27

  
	
   

  	
  7.2.5

  	
  Location of
  Charged Property:

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  REIMBURSEMENT OF EXPENSES AND INDEMNITY 

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX
  OTHER TAXES 

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  EVENTS OF DEFAULT

  	
  29

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1.1

  	
  Failure to
  Pay:

  	
  29

  

 

ii

 

	
   

  	
  10.1.2

  	
  Representations
  and Warranties:

  	
  29

  
	
   

  	
  10.1.3

  	
  Other
  Breaches:

  	
  29

  
	
   

  	
  10.1.4

  	
  Bankruptcy:

  	
  29

  
	
   

  	
  10.1.5

  	
  Invalidity
  or Unenforceability:

  	
  30

  
	
   

  	
  10.1.6

  	
  Cross-Default:

  	
  30

  
	
   

  	
  10.1.7

  	
  Seizure:

  	
  31

  
	
   

  	
  10.1.8

  	
  Change of
  ownership:

  	
  31

  
	
   

  	
  10.1.9

  	
  Ceasing to
  carry on business or termination of Supply Agreement:

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI
  REMEDIES

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII
  WAIVER OF DEFAULT

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  SUCCESSORS AND ASSIGNS

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV
  SET-OFF

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV
  JUDGMENT CURRENCY AND JUDICIAL PROCEEDINGS

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI
  GOVERNING LAW

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII
  NOTICE

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVIII
  MISCELLANEOUS

  	
  36

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  1.1(A)

  	
  Borrower
  Hypothec

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  1.1(B)

  	
  Equipment

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  1.1(C)

  	
  Permitted
  Encumbrances

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  2.1.5

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  2.1.11

  	
  Locations of
  Head Offices and Places of Business

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2.1.12

  	
  Environmental
  Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  7.1.1.7

  	
  Closing
  Certificate of Compliance

  	
   

  
	
   

  	
   

  	
   

  
					

 

iii

 

THIS
CREDIT AGREEMENT dated as of September 4, 2007 is made

 

	
  BETWEEN

  	
  DRAXIS PHARMA, a division of
  DRAXIS SPECIALTY PHARMACEUTICALS INC., a corporation amalgamated under the laws of Canada and having
  its head office at 16751 Trans-Canada Autoroute, Kirkland, Quebec,
  Canada, H9H 4J4 (the “Borrower”)

  
	
   

  	
   

  
	
  AND

  	
  JOHNSON & JOHNSON
  FINANCE CORPORATION, a corporation
  incorporated under the laws of the State of New Jersey and having a
  place of business at 501 George Street, New Brunswick,
  New Jersey, U.S.A. 08901 (the “Lender”)

  

 

WHEREAS the Borrower has requested the Lender to make Credit Facilities
available to the Borrower of up to US$12,200,000; and

 

WHEREAS the Lender has agreed to provide the Aggregate Commitment to the
Borrower, subject to the terms and conditions set forth in this Agreement;

 

WHEREAS
the Borrower, acting in accordance
with the terms of the Supply Agreement, is entitled to receive certain service
fee payments and will apply such payments to repay the Loans;

 

THEREFORE, in consideration of the premises, the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                   Definitions

 

In this
Agreement and the Schedules, as well as in all notices pursuant to this
Agreement, unless something in the subject matter or context is inconsistent
therewith, the following words and phrases shall have the following meanings:

 

“Advance” means a disbursement of funds to the Borrower pursuant to Section 3.4;

 

“Affiliate” means with respect to any Person, any other Person which, directly
or indirectly, controls or is controlled by, or is under common control with,
such Person, and for the purposes of this definition, “control”
(including, with correlative meanings, the terms “controlled
by” and “under common control with”)
means the power, directly or indirectly to direct or cause the direction of the
management and policies of any Person, whether through the ownership of shares
or by contract or otherwise; and without restricting the above, one Person
shall be deemed to be affiliated with another Person if one of them is the
Subsidiary of the other or both are Subsidiaries of the same Person, and if two
Persons are affiliated with the same Person at the same time, they are each
deemed to be affiliated with each other;

 

 

“Aggregate
Commitment” means the aggregate of
the Facility A Total Commitment and the Facility B Total Commitment;

 

“Agreement” or “Credit Agreement” means this
credit agreement, including the Schedules, as the same may be amended,
modified, supplemented or restated from time to time;

 

“Applicable
Law” means, in respect of any Person,
property, transaction or event, all present or future applicable laws,
statutes, regulations, treaties, judgments and decrees and (whether or not
having the force of law) all applicable official directives, rules, guidelines,
orders and policies of any federal, provincial, state, regional, municipal or
local governmental or regulatory or administrative bodies having authority over
any of the parties hereto and all applicable orders and decrees of courts and
arbitrators;

 

“Assignee” has the meaning set forth in Section 13.3;

 

“Auditors” means a recognized independent firm or recognized independent firms
of reputable chartered or public accountants acceptable to the Lender;

 

“Availability
Period” means the period commencing
on the Formal Date and ending on December 31, 2008;

 

“Availability
Period Maturity Date” means the last
day of the Availability Period;

 

“Borrower” has the meaning set forth in the description of the parties on the
first page of this Agreement and includes its successors and permitted
assigns;

 

“Borrower
Hypothec” means that certain
first-ranking deed of hypothec granted by the Borrower in favour of the Lender
in the amount of Cdn$5,000,000 and charging all of the Borrower’s right, title
and interest in and to the Equipment, as security for the Borrower’s
Indebtedness, obligations and liabilities under or in connection with
Facility A, in form and substance similar to the deed of hypothec attached
hereto as Schedule 1.1(A), as such deed of
hypothec may be amended, restated, supplemented or otherwise modified from time
to time;

 

“Borrower’s Account” means
for all deposits by the Lender of the proceeds of each Borrowing made
hereunder, the following account maintained by the Borrower:

 

Pay
to:

***

For
credit to:

***

 

For
final payment to:

Draxis Pharma

a division of
Draxis Specialty Pharmaceuticals Inc.

***

 

2

 

or such other
place(s) or account(s) as may be agreed upon by the Lender and the
Borrower from time to time;

 

“Borrowing” means a utilization, and “Borrowings”
means the aggregate of the utilizations at the relevant time by the Borrower of
the Credit Facilities by way of the Loans; the total amount of “Borrowings” outstanding at any time is the aggregate amount
of all Loans outstanding at that time;

 

“Bridge Loan” means the loan in the amount of US$1,200,000
made by the Lender in favour of the Borrower pursuant to the terms and
conditions of a bridge loan agreement dated as of May 1, 2007 (as
amended) between the Borrower and the Lender, a promissory note issued by the
Borrower in favour of the Lender on May 1, 2007 (as amended) ***, the
whole in order to finance the acquisition by the Borrower of certain Equipment;

 

“Business
Day” means any day other than
Saturday, Sunday and any other day which, in Montreal, Province of Quebec,
Atlanta, Georgia, or New York, New York, is a legal holiday or a day on which
commercial banks in Montreal, Province of Quebec, Atlanta, Georgia, or New
York, New York, as the case may be, are required or authorized by law or by
local proclamation to close;

 

“Capital
Stock” means any and all shares,
interests (including membership interests and partnership interests) or other
equivalents (however designated and whether voting or non-voting) of capital
stock of a corporation, any and all equivalent or similar ownership interests
in a Person (other than a corporation) and any and all warrants or options or
other arrangement to purchase any of the foregoing, whether now outstanding or
issued after the due date hereof;

 

“Capitalized
Lease” means, with respect to a
Person, any lease or other arrangement relating to property or assets which
would be required to be accounted for as a capital lease obligation on a
balance sheet of such Person if such balance sheet were prepared in accordance
with GAAP; the amount of any Capitalized Lease at any date shall be the amount
of the obligation in respect thereof which would be included within such
balance sheet;

 

“Charged
Property” means any and all present
and future movable or personal and immovable or real property of the Borrower
now or at any time hereafter affected by the Liens created by the Security
Documents;

 

“Consolidated” means produced by aggregating the relevant financial statements or
accounts of the Subsidiaries of a Person on a line-by-line basis
(i.e.:  adding together corresponding items of assets, liabilities,
revenues and expenses) with the relevant financial statements or accounts of
such Person, eliminating inter-company balances and transactions and providing
for any minority interest in Subsidiaries, all in accordance with GAAP;

 

“Counsel” means, with regard to the Lender, a barrister or solicitor or firm
of barristers or solicitors or other legal counsel retained or employed by the
Lender and with regard to the 

 

3

 

Borrower, a
barrister or solicitor or firm of barristers or solicitors or other legal
counsel retained or employed by the Borrower and acceptable to the Lender;

 

“Credit
Facilities” means, collectively, each
of Facility A and Facility B, and “Credit
Facility” means any one of them;

 

“Default” means any event or circumstance which constitutes an Event of
Default or which, with the giving of notice, the making of any determination or
the lapse of time or any combination thereof, would, unless cured or waived,
become an Event of Default;

 

“Drawdown
Date” means a Business Day notified
by the Borrower to the Lender pursuant to Section 3.4, as being a date on
which the Borrower has requested a Borrowing to be made available to the
Borrower;

 

“DRAXIS
Health” means DRAXIS Health Inc., a
corporation incorporated under the laws of Canada and having its head office at
6870 Goreway Drive, Mississauga, Ontario, Canada, L4V 1P1, and
includes its successors and permitted assigns;

 

“Environmental
Affiliate” means with respect to any
Person, another Person whose liability for any Environmental Claim the first
Person has retained, assumed or otherwise become liable for, either
contractually or by operation of law. 
All references to compliance by or liabilities of an Environmental
Affiliate herein pertain only to those specific liabilities that the Borrower
has retained, assumed, or become liable for and not to the entire business of
the Environmental Affiliate;

 

“Environmental
Claims” means any and all material
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of non-compliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any Environmental
Permit (hereinafter in this definition, “Claims”)
including without limitation:

 

(a)                                  any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and

 

(b)                                 any and all Claims by any third party, including a citizens group or
employee, seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment or alleging non compliance with any Environmental Law;

 

“Environmental
Laws” means all Applicable Laws
relating to pollution or protection of human health, Hazardous Materials or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata, emissions, discharges, releases or
threatened releases of Hazardous Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials);

 

4

 

“Environmental
Permit” means any permit, approval,
identification number, license or other authorization required under any
Environmental Law;

 

“Equipment”
means any and all now owned and hereafter acquired manufacturing and
related equipment of the Borrower to be used by the Borrower for the purpose of
manufacturing the Products, including, without limitation, the Equipment
described in Schedule 1.1(B);

 

“Event
of Default” means any of the events
or circumstances set out in Section 10.1;

 

“Facility
A” means the term credit facility
made available to the Borrower by the Lender pursuant to Section 3.2;

 

“Facility
A Total Commitment” means a maximum
of US$4,200,000, to the extent not cancelled, reduced or otherwise terminated
as herein provided;

 

“Facility
B” means the term credit facility
made available to the Borrower by the Lender pursuant to Section 3.2;

 

“Facility
B Total Commitment” means a maximum
of US$8,000,000, to the extent not cancelled, reduced or otherwise terminated
as herein provided;

 

“Facility
Total Commitment” means, as
applicable, the Facility A Total Commitment or the Facility B Total
Commitment;

 

“Federal
Funds Effective Rate” means, for any
day, an interest rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
in the United States of America arranged by federal funds brokers, as published
for such day (or if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day in New York City, N.Y.,
U.S.A., the average of the quotations for such day in respect of such
transactions received by the Lender from three federal funds brokers of
recognized standing selected by it;

 

“Formal
Date” means the date set forth in Section 18.10;

 

“GAAP” means generally accepted accounting principles in effect from time
to time in Canada, applicable to the relevant period, applied in a consistent
manner from period to period;

 

“Hazardous Materials” means
any contaminant, pollutant or substance that causes harm or degradation to the
surrounding environment or injury to human health and, without restricting the
generality of the foregoing, includes any pollutant, contaminant, waste,
hazardous waste, deleterious substance or dangerous good present in such
quantity or state that it contravenes any Environmental Laws or gives rise to
any liability or obligation under any Environmental Law;

 

“Indebtedness” of any Person means, without duplication, (in each case, whether
such obligation is with full or limited recourse):

 

5

 

(a)                                  all debts and liabilities of such Person which in accordance with
GAAP would be recorded in determining total liabilities shown on the liability
section of the balance sheet of such Person,

 

(b)                                 all obligations of such Person evidenced by a bond, debenture, note
or other similar instrument,

 

(c)                                  all obligations of such Person to pay the deferred purchase price of
property or services (except a trade account payable that arises in the
ordinary course of business) or the balance of payments due in respect of
acquisitions or investments,

 

(d)                                 all obligations of such Person as lessee under a Capitalized Lease,

 

(e)                                  all obligations of such Person to reimburse any other Person in
respect of amounts drawn or drawable under any letter of credit or under any
bankers’ or trade acceptance issued by such other Person, whether contingent or
non-contingent,

 

(f)                                    all obligations of such Person to purchase, redeem, retire, decrease
or otherwise make any payment in respect of any Capital Stock of or other
ownership or profit interest in such Person or any other Person, valued, in the
case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends,

 

(g)                                 all obligations of such Person under securities lending agreements
and securities repurchase or reverse repurchase agreements;

 

(h)                                 all obligations of such Person to repurchase or buy back goods sold
to another Person in connection with, or in support of, financing granted by a
lender or other financier to such other Person;

 

(i)                                     all Indebtedness of others secured by a Lien on any asset of such
Person, and

 

(j)                                     all Indebtedness of others guaranteed by such Person;

 

“Indemnitees” has the meaning set forth in Section 8.2;

 

“ITA” means the Income Tax Act (Canada) and the regulations promulgated
thereunder, as amended, supplemented or re-enacted from time to time;

 

“JJCCI” means Johnson & Johnson Consumer Companies, Inc. and
includes its successors and permitted assigns;

 

“Judgment
Conversion Date” has the meaning set
forth in Section 15.1;

 

“Judgment
Currency” has the meaning set forth
in Section 15.1;

 

6

 

 

“Lender” has the meaning set forth in the description of the parties on the
first page of this Agreement and includes its successors and assigns;

 

“Lender’s
Account for Payments” means, for all
payments from the Borrower to the Lender pursuant to the terms and conditions
hereof, the following account maintained by the Lender, to which payments and
transfers are to be effected as follows:

 

***

***

or such other place(s) or
account(s) as may be agreed upon by the Lender and the Borrower from time
to time;

 

“Lien” means any hypothec, security interest, mortgage, pledge, prior
claim, lien, claim, charge, cession, transfer, assignment or encumbrance of
whatever kind or nature (including servitudes and restrictions as to the use of
property) that secures the payment of any Indebtedness or liability or the
observance or performance of any obligation, including any title retention
agreement, lessor’s interest under a Capitalized Lease or analogous instrument
in, of, or on any asset or property or the income or profits therefrom of a
Person;

 

“Loan Documents” means this Agreement, each of the Security Documents and each
document, certificate, instrument or agreement entered into or to be entered
into in respect of the Credit Facilities by or between the Borrower and the
Lender, as same may from time to time be amended, restated, supplemented or
otherwise modified and “Loan Document”
means any of the foregoing individually;

 

“Loans” means at any given time, the aggregate of the loans made available
by the Lender to, or to the order of, the Borrower under the Credit Facilities
and “Loan” means any one of them;

 

“Losses” shall have the meaning set forth in Section 8.2;

 

“Material Adverse Effect” means any event, development or circumstance which has had or would
reasonably be expected to have:

 

(a)                                  a material adverse effect on the business, assets, properties,
operations or condition (financial or otherwise) of the Borrower, or

 

(b)                                 a material adverse effect on the ability of the Borrower to timely
pay any amounts due under the Loan Documents or to fulfil any other covenant or
obligation of a material nature arising under the Loan Documents, or

 

(c)                                  a material adverse effect on the validity or enforceability of any
of the Loan Documents or the rights and remedies of the Lender under any of the
Loan Documents;

 

7

 

“Maturity Date” means, in respect of Facility A and Facility B, the last
day of the Repayment Period;

 

“Obligations” means all obligations, indebtedness and liabilities (monetary or
otherwise, present or future, direct or indirect, due or to become due, whether
absolute or contingent, matured or unmatured) of the Borrower arising under or
in connection with any Loan Document;

 

“Permitted Encumbrances” means the encumbrances on assets of the Borrower listed in Schedule 1.1(C);

 

“Person” or “Persons” has the meaning set
forth in Section 1.4;

 

“Premises” means the premises of the Borrower consisting of its production
facilities located at 16751 TransCanada
Highway, Montreal, Quebec, and its secondary facilities in the Province of
Quebec, at which all of the Equipment shall be installed for the
purpose of manufacturing the Products;

 

“Products” means any and all products from time to time manufactured by the
Borrower and delivered to JJCCI pursuant to the terms and conditions of the
Supply Agreement;

 

“Properties” means the real or immovable properties now or hereafter owned or
occupied by the Borrower;

 

“Purchase
Money Lien” means:

 

(a)                                  any Lien created, issued or assumed to secure Indebtedness or a
trade account arising in the ordinary course of business, in each case in a
principal amount not in excess of the value of the underlying property, granted
as security as a part of, or issued or incurred to provide funds to pay, the
purchase price of any real or immovable property or personal or movable
property, provided that such Lien is limited to the property so acquired and is
created, issued or assumed substantially concurrently with the acquisition of
such property; and

 

(b)                                 any renewal, refunding or extension of any such Lien securing
Indebtedness or a trade account arising in the ordinary course of business, in
each case in a principal amount not in excess of the unpaid principal amount of
the Indebtedness or trade account secured thereby immediately prior to such
renewal, refunding or extension;

 

“Repayment Period” means the period commencing on the day immediately after the
Availability Period Maturity Date and ending on the fifth (5th)
anniversary of such day;

 

“Repayment Schedule” means the repayment schedule in respect of the repayment by the
Borrower to the Lender during the Repayment Period of all amounts owing under
or in connection with the Credit Facilities, including, without limitation, the
principal amount of all outstanding Borrowings under Facility A and
Facility B, the interest and fees related thereto and all other amounts
owing hereunder or under any other Loan Document, such repayment schedule to
provide for a lump sum payment by the Borrower to the Lender in December 2008
in an 

 

8

 

amount to be mutually agreed
upon between the parties and the balance of all of the aforesaid amounts owing
under or in connection with the Credit Facilities to be due and payable by the
Borrower to the Lender in equal consecutive monthly instalments on the fifth (5th)
day of each calendar month during the Repayment Period;

 

“Schedules” means the schedules to this Agreement as the same may be amended,
modified, supplemented or restated from time to time pursuant to the terms of
this Agreement;

 

“Security Documents” means, collectively, the Borrower Hypothec  and
any other security granted from time to time in favour of the Lender as
security for the obligations of the Borrower under this Agreement and the other
Loan Documents, as same may be from time to time amended, restated,
supplemented or otherwise modified from time to time;

 

“Subsidiary” means, with respect to any Person, any other Person (a) Capital Stock of which having ordinary voting power
to elect a majority of the board of directors (or other person having similar
functions) or (b) other ownership interests
of which ordinarily constituting a majority voting interest are at the time,
directly or indirectly, owned or controlled by such first Person, or by one or
more of its Subsidiaries, or by such first Person and one or more of its
Subsidiaries; unless otherwise specified, “Subsidiary”
means a direct or indirect Subsidiary of DRAXIS Health;

 

“Supply Agreement” means that certain Manufacture and Supply Agreement dated as of September 4, 2007 between the
Borrower and JJCCI, as same may be amended, restated, supplemented or otherwise
modified from time to time;

 

“Tax” includes all present and future taxes, levies, imposts, stamp
taxes, duties, charges to tax, fees, deductions, withholdings and any
restrictions or conditions resulting in a charge to tax and all penalty,
interest and other payments on or in respect thereof, imposed, assessed, levied
or collected under the laws of any country or any political subdivision thereof
or by any governmental agency or body or taxing authority thereof;

 

“Termination Date” means the date all Obligations are indefeasibly paid in full in
cash and the Aggregate Commitment is permanently terminated;

 

“US Dollars”, “Dollars” the symbols “US$” and “$”, “United States Dollars” and “lawful
money of the United States” each means lawful currency of the United
States of America  in immediately
available funds; and

 

“US Prime Rate” in effect on any day means the greater of (a) the
US Prime Rate for corporate loans, as published in The Wall
Street Journal for such day; and (b) the
rate of interest per annum that is the annual rate of interest equal to the sum
of the Federal Funds Effective Rate then in effect plus 1⁄2 of 1 % per
annum, as adjusted from time to time without notice to the Borrower; the
parties hereto acknowledge that the “US Prime Rate”
is an index rate and is not necessarily intended to be the lowest or best rate
of interest charged to other customers in connection with extensions of credit.

 

9

 

Section 1.2                                   Headings
and Table of Contents

 

The headings of the Articles,
Sections, Subsections or paragraphs herein and the table of contents are
inserted for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.

 

Section 1.3                                   References

 

Unless the context otherwise
requires or unless otherwise provided, all references to Sections, Subsections,
Articles and Schedules are to Sections, Subsections, and Articles of and
Schedules to, this Agreement.  The words “hereto”, “herein”, “hereof”, “hereunder” and
similar expressions mean and refer to this Agreement.

 

Section 1.4                                   Rules of
Interpretation

 

In this Agreement, unless the
context otherwise requires or unless otherwise provided,

 

(a)                                  the singular includes the plural and vice versa,

 

(b)                                 “month” means a
calendar month,

 

(c)                                  “person” or “Person” includes any individual, sole proprietorship,
corporation, partnership, trust, unincorporated organization, mutual company,
joint stock company, limited liability company, or other entity, estate, union,
employee organization, government or any agency or political subdivision
thereof, and

 

(d)                                 “in writing” or “written” includes printing, typewriting or any electronic
means of communication capable of being legibly reproduced at the point of
reception, including telecopier or telegraph, but excluding electronic mail.

 

Section 1.5                                   Accounting
Terms and Computations

 

Each accounting term used in
this Agreement has the meaning assigned to it under GAAP unless otherwise
defined herein and reference to any balance sheet item or income statement item
means such item as computed from the applicable statement prepared in
accordance with GAAP.

 

All financial statements
required to be delivered hereunder shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved.

 

Section 1.6                                   Time

 

Except where otherwise
indicated in this Agreement, any reference 
to a time shall mean local time in the City of Montreal, Province of
Quebec.

 

10

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.1                                   Representations
and Warranties of the Borrower

 

The Borrower represents and
warrants to the Lender that:

 

2.1.1                                             Existence; Power:  the Borrower (a) is a
corporation which is duly amalgamated, validly existing and in good standing
under the laws of its jurisdiction of amalgamation and in any other
jurisdiction in which the failure to qualify would reasonably be expected to
have a Material Adverse Effect, (b) is
duly qualified and has the necessary corporate power and authority (i) to execute, deliver, and perform its obligations
under each of the Loan Documents, and (ii) to
carry on its business and (c) holds
all requisite governmental licenses, permits and other approvals the failure to
hold which would reasonably be expected to have a Material Adverse Effect;

 

2.1.2                                             Subsidiaries:  all of the outstanding Capital Stock of the Borrower is owned,
directly or indirectly, by DRAXIS Health;

 

2.1.3                                             Authorization and Enforceability:  the execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents have been duly authorized by all
necessary actions and each of this Agreement and the other Loan Documents
constitutes (or when executed and delivered will constitute) valid and legally
binding obligations of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors’ rights generally and by the effect of the
principles of equity;

 

2.1.4                                             Breach:  neither
the execution and delivery of this Agreement or other Loan Documents by the
Borrower nor compliance with the terms and provisions hereof or thereof will:

 

(a)                                  conflict with, violate, or result in a breach of any of the terms,
conditions or provisions of any Applicable Law binding on or affecting the
Borrower, or any order, injunction, decree, determination or award of any court
or any governmental department, body, commission, board, bureau, agency or
instrumentality applicable to the Borrower, in each case which would reasonably
be expected to have a Material Adverse Effect,

 

(b)                                 conflict with, violate, result in a breach of, or constitute a
default under, (i) any charter or by-law
provision of the Borrower or (ii) to
the extent that failure to so comply would reasonably be expected to have a
Material Adverse Effect, any loan agreement, loan or trust indenture, trust
deed, or any other similar agreement or instrument to which the Borrower is a
party or by which it is bound, or

 

11

 

(c)                                  result in the creation of a Lien upon any of the properties, assets
or revenues of the Borrower (other than in favour of the Lender under the
Security Documents);

 

2.1.5                                             Litigation:  save as disclosed in Schedule 2.1.5,
there are no actions, suits or arbitration proceedings and there are no legal
proceedings (including without limitation insolvency proceedings and
Environmental Claims) pending or, to the knowledge of the Borrower, threatened,
involving the Borrower before any court or administrative agency or tribunal of
any country or jurisdiction which, separately or in the aggregate, would
reasonably be expected to have a Material Adverse Effect;

 

2.1.6                                             Compliance with Applicable Laws:  the Borrower and its businesses and operations are in compliance
with all Applicable Laws, the non-compliance with which would reasonably be
expected to have a Material Adverse Effect;

 

2.1.7                                             Governmental Consents; No Required
Filing:  no consent, authorization or
approval or other action by, and no notice to or filing or registration with,
any governmental authority or regulatory body is required which has not been
obtained for the due execution, delivery and performance by the Borrower of
this Agreement or the other Loan Documents or to ensure the legality, validity,
binding nature and enforceability thereof, except for registrations required in
respect of the Security Documents;

 

2.1.8                                             Taxes:  the
Borrower has filed when due with the appropriate governmental agencies all tax
returns, reports and statements required to be filed by the Borrower and has
paid when due all Taxes due and payable on or before the due date thereof
(other than Taxes, the payment of which is being contested in good faith by
appropriate proceedings and in respect of which adequate reserves have been made
in the books of the Borrower) and, in the case of Taxes not yet due or payable,
has made adequate provision for such Taxes in its books and records in
accordance with GAAP, except where the failure to make such filings, pay such
Taxes or provide such reserves would not reasonably be expected to have a
Material Adverse Effect;

 

2.1.9                                             Financial Statements:  (a) the audited Consolidated and unaudited unconsolidated financial
statements of DRAXIS Health and its Subsidiaries for the fiscal year ended December 31, 2006 and the
unaudited Consolidated and unconsolidated financial statements of DRAXIS Health
and its Subsidiaries for the fiscal quarter ended June 30, 2007 which have been provided to the
Lender prior to the Formal Date are complete and present fairly, in accordance
with GAAP, the Consolidated and unconsolidated financial position of DRAXIS
Health and its Subsidiaries at such date and the Consolidated results of
operations, retained earnings and, as applicable, changes in financial position
or cash flows of DRAXIS Health and its Subsidiaries, for such fiscal year and (b) since December 31,
2006, there has been no change in the Consolidated financial
condition of DRAXIS Health and its Subsidiaries from that set forth in the said
Consolidated financial statements which would reasonably be expected to have a
Material Adverse Effect;

 

2.1.10                                      No Event of Default:  there exists no Default or Event of Default and the Borrower is not
in default under any material undertaking, agreement or instrument in respect of

 

12

 

Indebtedness
of the Borrower which default would reasonably be expected to have a Material
Adverse Effect;

 

2.1.11                                      Ownership
of Property; Location of Places of Business; Liens:

 

(a)                                  the Borrower has good and marketable title to all of its property
except where the failure to have such title would not reasonably be expected to
have a Material Adverse Effect, and all of the Charged Property is free and
clear of all Liens, except Permitted Encumbrances;

 

(b)                                 Schedule 2.1.11 sets
forth, in respect of the Borrower, the location of (i) its
chief executive office, head office and/or registered office (ii) its other places of business and (iii) all locations where it shall keep, maintain,
consign or store the Charged Property;

 

(c)                                  once executed and duly registered,
the Security Documents shall create in favour of the
Lender a first ranking Lien on the properties and assets purported to be
charged thereunder.

 

2.1.12                                      Environmental Matters:  except as set forth in Schedule 2.1.12 hereto, to the best knowledge and
belief of the Borrower after due enquiry:

 

(i)                                     the use of any contaminant, waste
material (hazardous or other) or other substance on the Properties and the
emission, transportation or disposal of such substances in or onto the
Properties into the environment or by or allowed by the Borrower or any of its
Environmental Affiliates or by prior occupants of the Properties has at all
times been effected in compliance with all applicable Environmental Laws;

 

(ii)                                  the operations and activities of the
Borrower and its Environmental Affiliates and the use of the Properties by the
Borrower and its Environmental Affiliates including the construction and
modification of any building or equipment on the Properties have been effected
in compliance with all applicable Environmental Laws and Environmental Permits;

 

(iii)                               no contaminant, waste material
(hazardous or other) or other substance has been released or spilled into the
environment from the Properties which has not been cleaned up in conformity
with all applicable Environmental Laws and to the satisfaction of the
appropriate authorities;

 

(iv)                              there are no pending or threatened
Environmental Claims against the Borrower or any of its Environmental
Affiliates;

 

(v)                                 neither the Borrower nor any of its
Environmental Affiliates is undertaking, and has not completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any actual
or threatened release, discharge or disposal of Hazardous Materials at any of
the Properties or any other site, location or operation, either 

 

13

 

voluntarily
or pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law; and all Hazardous Materials generated,
used, treated, handled or stored at, or transported to or from, any Properties
or any property formerly owned or operated by the Borrower or any of its
Environmental Affiliates have been disposed of in a manner not reasonably
expected to result in material liability to the Borrower or any of its
Environmental Affiliates;

 

with the exception of any matter or matters
that could not reasonably be expected to, separately or in the aggregate, have
a Material Adverse Effect;

 

2.1.13                                      No Stamp Tax:  neither this Agreement nor any other Loan Document is subject to any
execution, stamp or similar tax; and

 

2.1.14                                      Insurance:  the
Borrower maintains insurance coverage as is customary for companies operating
in a business similar to that of the Borrower, all in conformity with the
requirements of Section 7.1.5 and all premiums and other sums of money
currently payable for that purpose have been paid.

 

Section 2.2                                   Materiality
and Survival of Warranties

 

All representations and
warranties of the Borrower contained herein, and in each other Loan Document or
in any certificate or material delivered to the Lender hereunder or pursuant to
any of the other Loan Documents shall be deemed to have been relied upon by the
Lender notwithstanding any investigation heretofore or hereafter made by the
Lender or by its Counsel or by any other representative of the Lender and all
such representations and warranties shall be deemed to be given on the date of
this Agreement and, except for the representations and warranties set forth in Section 2.1.9
(which shall be read as if they referred to the most recent financial
statements delivered to the Lender pursuant to Section 7.1.6), on each
Drawdown Date with the same effect, subject to and to the extent consistent
with the transactions contemplated hereby, as if made at and as of each such
date by reference to the facts and circumstances then prevailing.

 

ARTICLE III

 

THE
CREDIT FACILITIES

 

Section 3.1                                   Obligations
of the Lender

 

Relying on each of the
representations and warranties set out in Article II and subject to the
terms and conditions herein contained, the Lender agrees to make the Aggregate
Commitment available to the Borrower.

 

Section 3.2                                   Facilities
A and B

 

The Lender hereby establishes
in favour of the Borrower Facility A and Facility B, being
non-revolving term credit facilities. 
The Borrower may request Borrowings from the Lender 

 

14

 

under Facility A and
Facility B during the Availability Period only in an aggregate principal
amount not to exceed the Facility A Total Commitment and the
Facility B Total Commitment, respectively, and to be disbursed by way of
several Advances during the Availability Period, subject to the terms and
conditions of this Agreement.  The amount
of any Borrowings under Facility A or Facility B which is repaid may
not be reborrowed.  Any amount of the
Facility A Total Commitment or the Facility B Total Commitment that
is undrawn by the Borrower as of the Availability Period Maturity Date shall
automatically be cancelled and shall no longer be available for Borrowings and
the Lender’s Facility Total Commitments shall be reduced accordingly.

 

Section 3.3                                   Purposes
of Advances

 

Facility A shall be used
by the Borrower solely to finance the acquisition and installation in the
Premises of the Equipment. 
Facility B shall be used by the Borrower solely to finance the cost
of transfer of the technology required for the pre-validation work at the
Premises in support of the manufacture by the Borrower of the Products.

 

Section 3.4                                   Manner
of Borrowing

 

Subject to the provisions of
this Agreement and provided no Default or Event of Default has occurred and is
continuing (without having been cured or waived as provided herein), the
Borrower may from time to time during the Availability Period request
Borrowings from the Lender up to the amount of the Facility A Total
Commitment or Facility B Total Commitment, as the case may be, which must
be in a minimum amount of US$250,000, and in whole multiples of US$50,000, in
excess thereof, upon (i) giving
irrevocable written notice to the Lender at least by 12:00 noon fifteen
(15) Business Days prior to the Drawdown Date, specifying the amount of the
proposed Borrowing, the Business Day of the proposed Borrowing and the
applicable Credit Facility and (ii) providing
the Lender with the commercial invoices and such other supporting documentation
in respect of the proposed Borrowing as the Lender may reasonably request, and
subject to the terms hereof, the Lender shall make each Advance available to
the extent that on the relevant Drawdown Date, the Aggregate Commitment
remaining unadvanced and uncancelled hereunder and, as appropriate, the amount
remaining unadvanced and uncancelled under the applicable Facility Total
Commitment is, in each case, then sufficient to allow for the requested
Borrowing.

 

Section 3.5                                   Mandatory
Repayment of Borrowings under the Credit Facilities

 

During the Availability Period, there shall
be no scheduled payments of principal or interest in respect of Borrowings
under Facility A or Facility B, but interest shall accrue from day to
day on the outstanding balance of such Borrowings in accordance with Section 4.1
and such accrued interest shall be capitalized and added to the outstanding
balance of such Borrowings as of the Availability Period Maturity Date.  Upon the expiry of the Availability Period,
the Lender shall 

forthwith provide the Borrower with the Repayment
Schedule.  During the Repayment Period,
all amounts owing under or in connection with the Credit Facilities, including,
without 

 

15

 

limitation, the principal amount of all
outstanding Borrowings under Facility A and Facility B (including,
for greater certainty, the capitalized interest set forth above), the interest
and fees related thereto and all other amounts owing hereunder or under any
other Loan Document shall be fully and finally paid by the Borrower to the
Lender in accordance with and on the dates specified by the Repayment Schedule
and no later than the Maturity Date, whereupon the Credit Facilities shall be
permanently cancelled and the Lender’s commitment in respect of the Credit
Facilities shall automatically be reduced to zero and terminated. In addition,
all amounts owing under or in connection with the Credit Facilities shall be
repaid by the Borrower upon termination of the Supply Agreement.***

 

Section 3.6                                   Deposit
of Proceeds of Loans

 

The Lender shall deposit the
proceeds of each Borrowing made by the Borrower on a Drawdown Date to the
Borrower’s Account.

 

Section 3.7                                   Bridge
Loan

 

The parties hereto acknowledge
and agree that as of the Formal Date, the Bridge Loan, consisting of US$1,200,000
principal amount and US$27,369.86 accrued interest, shall be deemed to be an
outstanding Loan under Facility A of this Agreement, the whole without
novation.

 

ARTICLE IV

 

INTEREST

 

Section 4.1                                   Interest
on the Loans

 

The rate of interest applicable
to each outstanding Borrowing shall be the rate per annum equal to the US Prime
Rate in effect on the Drawdown Date in respect of such Borrowing less 0.75%
until the date at which the Lender provides the Borrower with the Repayment
Schedule.  Thereafter, the rate of
interest applicable to each outstanding Borrowing shall be the rate per annum
equal to the US Prime Rate in effect on the date at which the Lender provides
the Borrower with the Repayment Schedule less 0.75%.  Such interest shall accrue from day to day
from the applicable Drawdown Date until the date on which repayment in full of
each Borrowing is received by the Lender, shall be payable in arrears in
accordance with this Agreement and shall be calculated on the daily outstanding
balance of each Borrowing on the basis of the actual number of days elapsed
(including the first day but excluding the last day of any period of time
during which such Loans are outstanding) in a year of 365 or 366 days, as the
case may be.

 

Section 4.2                                   Interest
on Overdue Amounts

 

4.2.1               Overdue Principal,
Interest or Other Amounts  (a) Upon a default in the
payment of principal due under this Agreement, the Borrower shall pay interest
on all such principal at a 

 

16

 

rate per annum
equal to the interest rate which would otherwise be applicable to such
principal if it were not in default, increased, to the fullest extent permitted
by Applicable Law, by 2% per annum, and (b) upon a
default in the payment of interest or any other amounts due under this
Agreement or any of the other Loan Documents, the Borrower shall pay interest
on such overdue interest or other amounts at a rate per annum equal to the rate
which would be applicable to a Borrowing if it were requested on the due date
of such interest or other amounts, increased, to the fullest extent permitted
by Applicable Law, by 2% per annum;

 

4.2.2               Payment:  in
each case under Section 4.2.1,
interest shall be payable on demand and shall be calculated on a daily basis
and compounded monthly from the date such amount becomes due and payable for so
long as such amount remains unpaid and on the basis of a year of 365 or 366
days, as the case may be.

 

All interest provided for in
this Agreement shall be payable both before and after maturity, default and
judgment.

 

Section 4.3                                   Computation
of Interest for Interest Act (Canada) Purposes

 

4.3.1               Nominal Rate of
Interest:  Unless otherwise stated, wherever in this
Agreement reference is made to a rate of interest “per annum”
or a similar expression is used, such interest shall be calculated on the basis
of a calendar year of 365 or 366 days, as the case may be, and using the
nominal rate method of calculation and shall not be calculated using the
effective rate method of calculation or  any
other basis that gives effect to the principle of deemed reinvestment of
interest; and

 

4.3.2               Interest Act (Canada)
Disclosure:  for the purpose of the Interest Act (Canada)
and disclosure thereunder, whenever interest to be paid hereunder is to be calculated
on the basis of a year of 360 days or any other period of time that is less
than a calendar year, the yearly rate of interest to which the rate determined
pursuant to such calculation is equivalent is the rate so determined multiplied
by the actual number of days in the calendar year in which the same is to be
ascertained and divided by either 360 or such other period of time, as the case
may be.

 

ARTICLE V

 

PAYMENT,
TAXES, INCREASED COSTS, EVIDENCE

OF INDEBTEDNESS AND NOTES

 

Section 5.1                                   Place
of Payment of Principal, Interest and Charges

 

Except as otherwise
specifically provided herein, all payments of principal, interest, additional
interest, fees and other charges to be made by the Borrower to the Lender
pursuant to this Agreement shall be made for value on the day such amount is
due or, if such day is not a Business Day, on the Business Day next following,
by electronic transfer of moneys to the appropriate Lender’s Account for
Payments.  Any amounts received by the
Lender from the Borrower after 12:00 noon on any Business Day shall be applied
on the next following Business Day to the appropriate payment, repayment or
prepayment due on such day.  Until so
applied,

 

17

 

 interest shall continue to accrue as provided
in this Agreement on the amount of such payment, repayment or prepayment.

 

Section 5.2                                   Application
of Payments

 

5.2.1                                             Order of Application:  All payments made by or on behalf of the Borrower pursuant to this
Agreement prior to the occurrence of an Event of Default shall be applied by
the Lender in the following order:

 

(a)                                  to amounts due pursuant to Section 8.1, as and by way of
expenses,

 

(b)                                 to amounts due pursuant to Section 8.2, as and by way of
indemnity,

 

(c)                                  to amounts due pursuant to Section 4.2, as and by way of
default interest on overdue amounts,

 

(d)                                 to amounts due pursuant to Section 4.1, as and by way of
interest,

 

(e)                                  to amounts due pursuant to Section 3.5 as and by way of
principal, and

 

(f)                                    in payment of any other amounts then due and payable by the Borrower
hereunder or under any of the other Loan Documents;

 

5.2.2                                             Event of Default:  after the occurrence and during the continuance of an Event of
Default, all payments made by or on behalf of the Borrower pursuant to this
Agreement and the other Loan Documents and all sums received or realized on
account of amounts owing hereunder or under the other Loan Documents shall be
paid to and be appropriated and applied proportionately by the Lender towards
the obligations of the Borrower under all Credit Facilities as the Lender may
decide and any such appropriation and application shall override any
appropriations or applications made by the Borrower.

 

Section 5.3                                   Manner
of Payment and Taxes

 

5.3.1                                             No set-off; no withholding:  The Borrower shall make all payments to the Lender pursuant to this
Agreement and the other Loan Documents to which it is a party without set-off,
compensation or counterclaim, free and clear of, and exempt from, and without
deduction for or on account of, any Tax except to the extent required by
Applicable Law.  If a deduction or
withholding is required by Applicable Law, the Borrower shall:

 

(a)                                  pay or cause to be paid to the appropriate authority the amount of
the withholding or deduction by no later than the latest date permitted by that
authority (including any extension of time granted by that authority) or, in
the case of a Tax the payment of which is being contested prior to the date on
which such Tax is due and payable, by no later than the date on which the
authority requires the Tax to be paid,

 

18

 

(b)           Produce to the Lender not
later than 30 days after that payment a receipt of that authority evidencing
that it has received the proper amount from the Borrower,

 

(c)           pay such sums to the Lender
as may be necessary so that the net amount received by the Lender after all
required deductions or withholdings (including deductions and withholdings for
or on account of Taxes on any sums payable under this Section) will not be less
than the amount the Lender would have received had no such deduction or withholding
been required, and

 

(d)           if any Tax based on or
measured by the overall net income of the Lender is payable with respect to the
additional payments under paragraph (c) above, promptly following written
request by the Lender accompanied by adequate supporting calculation (which
shall be evidence of the amount of incremental Taxes herein referred to, in the
absence of manifest error), the Borrower shall pay to the Lender an additional
amount equal to the Tax payable by the Lender;

 

5.3.2               Increased Rate of
Interest:  if
the Borrower is prevented by operation of law or otherwise from paying or
causing to be paid to the Lender such sums as it may be required to pay in
accordance with Section 5.3.1, the applicable rates of interest or amount
due will be increased to the rates or amount necessary to yield and to remit to
the Lender the net amount in the appropriate currency equal to the full amount
it would have received had such Tax not been so deducted or withheld;

 

5.3.3               Tax Credit:  if, as a result of any deduction or
withholding the Borrower makes any payment of any additional amounts
to the Lender under sections 5.3.1 and 5.3.2 
and the Lender, in its sole reasonable opinion, determines that it has
received or has been granted a credit against, or relief, or remission for, or
repayment of any tax paid or payable by it in respect of or which takes account
of the deduction, withholding or other matter giving rise to such payment, the
Lender will, to the extent it determines that it can do so without prejudice to
the retention of the amount of such credit, relief, remission or repayment,
promptly after the time at which the Lender actually received the benefit of
the relevant credit, relief, remission or repayment, as determined by it, pay
to the Borrower such amount as the Lender, in its sole reasonable opinion,
determines to be attributable to such deduction or withholding or other matter
and which will leave it (after such payment) in a position which it determines
to be no better or worse than it would have been if the Borrower had not been
required to make such deduction or withholding or if such other matter had not
arisen, provided however, that the Borrower shall indemnify and hold harmless
the Lender against any disallowance of any credit, relief, remission or
repayment in respect of which the Lender has made a payment to the Borrower.
Nothing herein contained shall (a) interfere
with the right of the Lender to arrange its taxes or other affairs in whatever
manner it may think fit, (b) oblige
the Lender to disclose any information relating to its taxes or other affairs
or any other computation thereof, (c) require
the Lender to do anything that it may determine would or may prejudice its
ability to benefit from any other credit, relief or remission for or repayment
to which it may be entitled, or (d) require
the Lender to give any priority as to

 

19

 

the
order in which it may allocate to any Person or class of Persons any such
credit, relief, remission or repayment.

 

5.3.4               Survival of Obligations:  the
obligations of the Borrower under this Section 5.3 to effect payments of
further sums in connection with the imposition of Taxes shall, if such sums or
Taxes have not been paid, survive the payment of principal and interest on all
the Borrowings, the termination of the Aggregate Commitment and the
satisfaction of all other liabilities owed to the Lender pursuant to the Loan
Documents.

 

Section 5.4            Evidence
of Indebtedness

 

The Lender
shall open and maintain in its books, accounts and records evidencing the
Borrowings made available by the Lender under this Agreement.  The Lender shall record therein the amount of
each Borrowing made available by it by way of Loans and shall record therein
each payment of principal on account thereof and shall record all other amounts
becoming due to the Lender under this Agreement, including interest and all
payments on account thereof.  Such
accounts and records maintained by the Lender will constitute, in the absence
of manifest error, prima facie evidence of the Indebtedness and other
liabilities of the Borrower owing to the Lender pursuant to this Agreement, the
date of each Borrowing made available by the Lender and the amount thereof and
the amounts which and the dates on which the Borrower has made payments to the
Lender  from time to time on account of
the principal thereof and interest thereon.

 

Notwithstanding
the foregoing, the omission of the Lender to maintain any such accounts or
records, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest and fees) the Borrowings in
accordance with the terms of this Agreement.

 

ARTICLE VI

PREDISBURSEMENT CONDITIONS

 

Section 6.1            Predisbursement
Conditions

 

The obligation
of the Lender to make available to the Borrower the initial and subsequent
Borrowings hereunder is subject to and conditional upon each of the following
terms and conditions first having been satisfied:

 

6.1.1               Conditions Precedent to Initial Borrowing:  the satisfaction of each of the terms and conditions hereinafter set
forth and, as the case may be, delivery to the Lender, in form and substance
satisfactory to the Lender, of:

 

6.1.1.1             a duly executed copy of this Agreement,

 

6.1.1.2             a duly executed copy of the Supply Agreement,

 

20

 

6.1.1.3             a duly certified copy of the constating documents and by-laws of the
Borrower certified by a responsible officer of the Borrower, accompanied by
good standing or equivalent certificates issued by the appropriate governmental
body of the Borrower’s jurisdiction of incorporation and principal place of
business,

 

6.1.1.4             a duly certified copy of a resolution or resolutions of the board of
directors relating to the authority of the Borrower to execute and deliver and
perform its obligations under the Loan Documents and all other instruments,
agreements, certificates and papers and other documents provided for or
contemplated by the Loan Documents and the manner in which and by whom the
foregoing documents are to be executed and delivered, certified by a
responsible officer of the Borrower,

 

6.1.1.5             a certificate of the Borrower setting forth specimen signatures of
the individuals authorized to sign on its behalf the Loan Documents and the
instruments, agreements, certificates, papers and other documents provided for
or contemplated by the Loan Documents,

 

6.1.1.6             a certificate of compliance of the Chief Financial Officer of the
Borrower in form and substance substantially as set forth in Schedule 7.1.1.7 confirming the accuracy of the
representations and warranties contained herein, the absence of any Default or
Event of Default and that since the date of the most recent quarterly
Consolidated and unconsolidated financial statements of DRAXIS Health and the
Borrower, there has been no change in the financial condition of DRAXIS Health
or the Borrower which could have a Material Adverse Effect,

 

6.1.1.7             in the case of any Borrowing under Facility B, a written
statement from JJCCI confirming that the pre-validation work that has been
carried out at the Premises in support of the manufacture by the Borrower of
the Products is in accordance with the terms and conditions of the Supply
Agreement;

 

6.1.1.8             the favourable opinions of Counsel to the Borrower, as to the status
and capacity of the Borrower, its authority and legal right to enter into and
perform its obligations under this Agreement, as to the validity, binding
effect and enforceability against it of this Agreement and as to such other
matters as the Lender may reasonably require,

 

6.1.1.9             results of current searches of public records under all applicable
jurisdictions relating to Lien filings and registrations disclosing no Liens on
the Charged Property other than Permitted Encumbrances;

 

6.1.1.10           confirmation from Draxis Health that the hypothec referred to in
paragraph (f) of Schedule 1.1(c) Permitted Encumbrances, is
subordinated

 

21

 

to the rights of the Lender under the Security
Documents on terms and conditions satisfactory to the Lender;

 

6.1.1.11           copies
of certificates of insurance evidencing the enforceability and the
effectiveness of all insurance covering the Borrower and required to be
maintained by the Borrower pursuant to Section 7.1.5 and evidencing the
insurance referred to above naming the Lender as additional insured and, if
appropriate, as loss payee and notices acknowledged by the Borrower’s insurers
notifying such insurers of the security granted by the Borrower to the Lender
under the Security Documents;

 

6.1.1.12           a duly executed copy of the Borrower Hypothec and evidence of the
due registration, recording or filing of the Borrower Hypothec in all
jurisdictions necessary to protect or perfect the Liens created thereby; and  the
favourable opinions of Counsel to the Borrower, as to the status and capacity
of the Borrower, its authority and legal right to enter into and perform its
obligations under the Security Documents, as to the validity, binding effect
and enforceability against it of the Security Documents, and as to the
perfection of the Liens created under the Security Documents in favour of the
Lender.

 

6.1.1.13           such other documentation as may be reasonably required by the
Lender;

 

6.1.2               Conditions Precedent to each Borrowing:  the obligation of the Lender to make any Borrowing available to any
Borrower is subject to the following conditions:

 

6.1.2.1             the representations and warranties of the Borrower contained in this
Agreement shall be true and correct as at each Drawdown Date, other than the
representations and warranties set forth in Section 2.1.9 (which shall be
read as if they referred to the most recent financial statements delivered to
the Lender pursuant to Section 7.1.6),

 

6.1.2.2             the Lender shall have received the timely notice of Borrowing
required pursuant to Section 3.4,

 

6.1.2.3             no Default or Event of Default shall have occurred and be continuing
(provided that if any Default or Event of Default shall have been waived as
provided herein, such Default or Event of Default shall not be deemed to exist
or continue in respect of the particular instance having been waived or during
the waiver period, as applicable),

 

6.1.2.4             in the case of any Borrowing under Facility B, a written
statement from JJCCI confirming that the pre-validation work that has been
carried out at the Premises in support of the manufacture by the Borrower of
the Products is in accordance with the terms and conditions of the Supply
Agreement, and

 

22

 

6.1.2.5             the sum of the aggregate outstanding principal amount of all Loans (i) under Facility A does not exceed the
Facility A Total Commitment; (ii) under
Facility B does not exceed the Facility B Total Commitment; and (iii) under Facility A and Facility B does
not exceed the Aggregate Commitment.

 

Section 6.2            Waiver
of Conditions Precedent

 

The terms and
conditions of Section 6.1 are inserted for the sole benefit of the Lender
and may be waived by the Lender, in whole or in part, with or without terms or
conditions, in respect of all or any portion of the Borrowings without
prejudicing the rights of the Lender to assert such terms and conditions in
whole or in part in respect of any other Borrowing.

 

ARTICLE VII

COVENANTS
OF THE BORROWER

 

Section 7.1            Affirmative
Covenants of the Borrower

 

While any
amount remains outstanding under the Loan Documents or the Lender has any
obligations under any of the Loan Documents or the Lender has any commitment
hereunder, the Borrower covenants and agrees with the Lender that, unless
otherwise consented to in writing by the Lender:

 

7.1.1               Payment Covenant:  it will duly and punctually pay all sums of money due and payable by
it under the terms of this Agreement and any other Loan Document at the times
and places, in the currencies, and in the manner specified;

 

7.1.2               Corporate Existence:  subject to Section 7.2.3, it will do or cause to be done all
things necessary to preserve and maintain its corporate or other existence and,
if applicable and to the extent the absence or loss thereof would reasonably be
expected to have a Material Adverse Effect, all of its other franchises,
licenses, rights, privileges, consents, government approvals and other
approvals;

 

7.1.3               Conduct of Business and Supply Agreement:  it will (i) conduct
its business in a proper and efficient manner in accordance with normal
industry standards, (ii) keep
proper books or records and accounts and (iii) perform
all its obligations under the Supply Agreement;

 

7.1.4               Compliance with Laws:  it will comply with all Applicable Laws, including without
limitation, all Environmental Laws, non-compliance with which would reasonably
be expected to have a Material Adverse Effect, and obtain and maintain all
necessary material Environmental Permits the lack of which would reasonably be
expected to have a Material Adverse Effect;

 

7.1.5               Insurance:  it
will:

 

(a)           maintain with financially sound, independent and reputable insurers
policies of insurance covering the full risk of loss of the Charged Property,
and that

 

23

 

name the Lender as loss payee and include a
mortgage clause acceptable to the Lender,

 

(b)           duly and punctually pay or cause to be paid the premiums and other
sums of money payable in connection with such insurance,

 

(c)           after an Event of Default has occurred and while such Event of
Default is continuing, hold separate from all other funds, all insurance
proceeds received. The Borrower will make an offer to the Lender to repay the
outstanding loan with the received insurance proceeds,

 

(d)           promptly deliver to the Lender from time to time upon reasonable
request such information relating to the insurances required to be maintained
under this Section 7.1.5, including the entire insurance policies or, at
the discretion of the Lender, insurers’ certificates of insurance addressed to
the Lender confirming that such insurance is in effect and that the Lender may
rely on such certificates;

 

7.1.6               Financial Statements and
Information:  it
will furnish or cause to be furnished to the Lender:

 

(a)           Quarterly Financial Statements:  as soon as practicable and in any event within
45 days after the close of each quarterly accounting period in each fiscal
year of DRAXIS Health, the unaudited Consolidated balance sheets of DRAXIS
Health and the related Consolidated statements of income, retained earnings and
cash flows for such quarterly period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly period, setting forth in each case
in comparative form the figures for the corresponding periods of the previous
fiscal year, subject to normal year-end auditing adjustments, as well as the
unconsolidated unaudited financial statements of the Borrower;

 

(b)           Year-End Financial Statements; Accountants’
Certificate:  as soon as available
and in any event within 90 days after the end of each fiscal year of
Draxis Health:

 

(i)            the audited Consolidated balance sheet of DRAXIS Health as at the
end of such fiscal year and the related Consolidated statements of income,
retained earnings and cash flows for such fiscal year, setting forth in
comparative form the figures as at the end of and for the previous fiscal year,
accompanied by an audit report of the Auditors, which report shall include an
opinion of such Auditors which opinion shall not be qualified in any material
respect and shall state that such financial statements were prepared in
accordance with GAAP and that the audit by such Auditors in connection with
such financial statements has been made in accordance with generally accepted
auditing standards, and

 

24

 

(ii)           the unconsolidated and unaudited financial statements of the
Borrower, together with the consolidating work sheet incorporating all the
Subsidiaries of DRAXIS Health, the whole prepared in accordance with GAAP;

 

(c)           Requested Information:  from time to time and promptly upon request of the
Lender, such information regarding the Loan Documents or the loans, business,
assets, liabilities, financial condition, results of operations or business
prospects of the Borrower as the Lender may reasonably request;

 

(d)           Notice of Defaults and Material Adverse Effect:  promptly after the Borrower obtains knowledge of any
event or condition specified hereunder, notice of any Default or Event of
Default or event or circumstance which has had or would reasonably be expected
to have a Material Adverse Effect.

 

7.1.7               Access:  it will permit the Lender
and any Person designated in writing from time to time by the Lender including,
without limitation, independent accountants, at the Borrower’s expense, on
reasonable written notice and at such reasonable time or times as will not
interfere with the normal operations of the Borrower (a) to
visit and inspect any of the properties of the Borrower where the Charged
Property is located or that otherwise relate to this Agreement or the other
Loan Documents, (b) to discuss the affairs,
finances and accounts of the Borrower that relate to this Agreement or the
other Loan Documents with its officers and (c) to
examine the books of account, records, reports and other documents of the
Borrower that relate to this Agreement or the other Loan Documents;

 

7.1.8               Environmental Matters:  it will
comply with Section 18.03 of the Supply Agreement;

 

7.1.9               To Register:  it will, at its
expense, cooperate to the extent necessary to register the Security Documents
without delay, at every office where the registration or recording thereof may
from time to time, in the reasonable opinion of Counsel to the Lender, be of
material advantage in preserving and protecting the interests of the Lender,
and to assist the Lender in such ways as may be necessary to allow the Lender
to register any renewals thereof;

 

7.1.10             To Maintain Security:  it will do,
observe and perform or cause to be done, observed and performed, at is expense,
all of its obligations and all matters and things necessary or expedient to be
done, observed and performed by virtue of Applicable Laws for the purpose of
creating, perfecting or maintaining the Liens once created under the Security
Documents as valid, effective and perfected, first priority Liens over all the
Charged Property (subject only to Permitted Encumbrances) and including
obtaining necessary consents in relation thereto from time to time; and

 

7.1.11             Change of Name, New
Locations:  it
will advise the Lender in writing not less than 30 days before the Borrower

 

(a)           makes any change to its
name or

 

25

 

(b)           changes the location of its
chief executive office, head office or principal place of business or acquires
any new places of business, other than those set forth in Schedule 2.1.11;

 

Before any
such change of name or of such location or before any acquisition of another
place of business (whether by purchase, lease or otherwise) by the Borrower,
the Borrower shall provide the Lender with such financing statements, charges,
assignments, hypothecs, security interests, other Security Documents and legal
opinions as the Lender may reasonably require in order to assure and maintain
perfected, first priority Liens on the Charged Property, and to assure access
thereto.

 

Section 7.2            Negative
Covenants of the Borrower

 

While any
amount remains outstanding under the Loan Documents or the Lender has any
obligations under any of the Loan Documents or the Lender has any commitment
hereunder, the Borrower covenants and agrees with the Lender that:

 

7.2.1               Negative Pledge:  it will not,
directly or indirectly, at any time, assume, create, incur or suffer to exist
any Lien upon any of the Charged Property, whether now owned or hereafter
acquired, or upon any income or profits therefrom, other than Permitted
Encumbrances;

 

7.2.2               Sale of Assets:  it will not sell,
alienate, assign, lease or otherwise dispose of any of the Charged Property,
whether now owned or possessed or hereafter acquired or possessed, or enter
into any sale and leaseback transaction with respect to any of the Charged
Property, or, except as provided in the Supply Agreement, grant any option or
other right to purchase, lease or otherwise acquire any of the Charged
Property;

 

7.2.3               No Modification to
Corporate Structure:  it
will not, directly or indirectly, (A) wind-up,
liquidate or dissolve its business, affairs or assets or enter into any
transaction of reorganization, amalgamation, merger or consolidation, or
convey, sell, lease or otherwise dispose of all or any substantial part of its
business, property or assets (or agree to do any of the foregoing at any future
time) except that the Borrower may merge into, reorganize with, liquidate into,
amalgamate with or convey, lease or transfer all or substantially all of its
assets to any other Person, provided that, immediately after giving effect to
the transaction, (w) no event or circumstance
shall have occurred and be continuing which constitutes a Default or Event of
Default, (x) the resulting entity or the
Person which acquires such assets is bound by the provisions of the Loan
Documents by operation of law or pursuant to an agreement in form and substance
satisfactory to the Lender, (y) the
Lender receives an opinion of counsel acceptable to the Lender confirming that
the resulting entity or the Person which acquires such assets is bound by the
Loan Documents and (z) the
rights and remedies of the Lender under the Loan Documents are not adversely
affected by such transaction, (B) modify
the corporate structure of the Borrower in any manner which may be adverse to
the rights and interests of the Lender or (C) modify
the constating documents of the Borrower in any manner which may be adverse to
the rights and interests of the Lender;

 

26

 

7.2.4               Unauthorized Uses of the
Credit Facilities:  it
will not use the Credit Facilities or any proceeds of Borrowings for any
purpose other than in accordance with Section 3.3;

 

7.2.5               Location of Charged
Property:  it
will not move any of the Charged Property to any location other than those set
forth in Schedule 2.1.11.

 

ARTICLE VIII

 REIMBURSEMENT OF EXPENSES AND INDEMNITY

 

Section 8.1            Reimbursement
of Expenses

 

The Borrower
will reimburse the Lender within 30 days after written request is made,
with interest after such 30 day period at a rate per annum equal to the rate of
interest that would apply to a Borrowing made at such time increased by 2% per
annum for any and all expenditures which the Lender may from time to time make,
lay out or expend in providing protection in respect of insurance, discharge of
Liens, Taxes, dues, assessments, governmental charges, fines and penalties
lawfully imposed, repairs, Counsel’s fees and other matters as the Borrower is
obligated in the Loan Documents to provide, but fail to provide after written
request is made.  Such obligations to
reimburse the Lender shall be an additional indebtedness due from the Borrower
and shall be payable by the Borrower within 30 days after demand.  The Lender though permitted so to do shall be
under no obligation to the Borrower to make any such expenditure and the making
thereof by the Lender shall not relieve the Borrower of any default in that
respect.

 

Section 8.2            Indemnity

 

Whether or not
a Default or an Event of Default has occurred, the Borrower solidarily
covenants and undertakes to indemnify, defend, protect and hold harmless the
Lender, its Affiliates and their respective directors, officers, employees,
advisors and agents (collectively, the “Indemnitees”)
against and from all losses, damages (including punitive damages), expenses,
liabilities, obligations, penalties, actions, judgments, suits, claims, costs,
expenses and disbursements (including reasonable Counsel’s and consultants’
fees and disbursements) (hereinafter, “Losses”) which
any Indemnitee may sustain or incur as a consequence of or in connection with
(including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defence in connection therewith):

 

(a)           any use made by the
Borrower or proposed to be made by the Borrower of the proceeds of the Credit
Facilities,

 

(b)           the occurrence of a Default
or an Event of Default,

 

(c)           the Loan Documents or any
transaction contemplated thereby, or

 

(d)           the actual or alleged
presence of Hazardous Materials on, under or in any Properties or the escape,
seepage, leakage, spillage, discharge, emission or release from, any Property
or into or upon any land, the atmosphere, or any watercourse, body of water or
wetland,

 

27

 

of any Hazardous Materials or any
Environmental Claim relating to the Borrower or any of the Properties or
arising out of the use of any of the Properties,

 

in each case
except to the extent such Losses are found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnitee’s
gross fault or intentional fault.

 

In the case of
an investigation, litigation or proceeding to which the indemnity described in
this Section 8.2 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by the Borrower, its
shareholders, Affiliates or creditors or an Indemnitee, or an Indemnitee is
otherwise a party thereto.  The Borrower
further agrees that no Indemnitee shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Borrower or any of its
Subsidiaries or Affiliates or its security holders or creditors arising out of,
related to or in connection with the Credit Facilities, except for direct, as
opposed to consequential or punitive, damages determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnitee’s gross fault or intentional fault.

 

Section 8.3            Survival
of Indemnification Obligations

 

Without
prejudice to the survival or termination of any other agreement of the Borrower
under the Loan Documents, the provisions of and undertakings and
indemnification set forth under Section 8.1 and Section 8.2 shall
survive the payment of principal and interest on all Borrowings, the
termination of the Aggregate Commitment and the satisfaction of all other
liabilities owed to the Lender pursuant to the Loan Documents.

 

ARTICLE IX

 OTHER TAXES

 

Section 9.1            Other
Taxes

 

The Borrower
covenants and agrees that it will pay any documentary, stamp or other Taxes
(including interest and penalties) which may be payable or determined to be
payable by any governmental or taxation authority in respect of the execution
and delivery of the Loan Documents to which it is a party or the performance of
the terms and provisions of such Loan Documents, and will save the Lender
harmless against any loss or liability resulting from non-payment or delay in
payment of any such documentary, stamp or other Taxes.

 

Section 9.2            Survival
of Obligations

 

The obligation
of the Borrower under Section 9.1 to pay the Taxes referred to therein
shall, if such Taxes have not been paid, survive the payment of principal and
interest on all Borrowings, the termination of the Aggregate Commitment and the
satisfaction of all other liabilities owed to the Lender pursuant to the Loan
Documents.

 

28

 

ARTICLE X

EVENTS OF DEFAULT

 

Section 10.1         Events of Default

 

The occurrence
of any one or more of the following events or circumstances shall constitute an
Event of Default under this Agreement:

 

10.1.1             Failure to Pay:  any
payment of principal of or interest on any of the Loans or of fees or any other
amounts owing under the Loan Documents shall not be made when and as due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) and in accordance with the terms of this Agreement and, except in
the case of payments of principal, such failure shall continue for three (3) Business
Days;

 

10.1.2             Representations
and Warranties:  any representation or warranty made by the Borrower in any of the
Loan Documents shall prove at any time to have been materially incorrect or
misleading in any material respect, as at the date made or deemed to have been
made;

 

10.1.3             Other Breaches:  the
Borrower shall default in the performance or observance of or failure in
respect of:

 

(a)           any
term, covenant, condition or agreement contained in Section 7.2 (other
than Section 7.2.1),

 

(b)           any
term, covenant, condition or agreement contained in Section 7.2.1 and such
default shall continue unremedied for a period of three (3) Business Days
after the earlier of the date on which (y) the
Borrower shall have actual knowledge of such default and (z) notice
shall have been given by the Lender to the Borrower requiring that such default
be cured.

 

(c)           any
term, covenant, condition or agreement contained in this Agreement (other than Section 7.1.1
or Section 7.2 or any other term, covenant, condition or agreement a
default in the performance or observance of which is elsewhere in this Section 10.1
specifically dealt with) or any other Loan Document and such default, if
capable of being remedied within the hereinafter mentioned 30-day period, shall
continue unremedied for a period of 30 days after the earlier of the date
on which (y) the Borrower shall have actual
knowledge of such default and (z) notice
shall have been given by the Lender to the Borrower requiring that such default
be cured; or

 

(d)           making
an offer under Section 7.1.5(c);

 

10.1.4             Bankruptcy:

 

(a)           Voluntary:  the Borrower shall (i) commence
any proceedings (including a notice of intention or a proposal under the
Bankruptcy and Insolvency Act

 

29

 

(Canada) and an application for a compromise
or arrangement under the Companies’ Creditors Arrangement Act (Canada) or any
successor or equivalent legislation), (ii) file
a petition seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or composition
or adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in any proceedings or involuntary case under such bankruptcy laws or
other laws, (iv) apply for, or consent
to, or fail to contest in a timely and appropriate manner, the appointment of,
or the taking of possession by, a receiver, custodian, trustee, liquidator or
the like of itself or of a substantial part of its assets, domestic or foreign,
(v) admit in writing its inability
to pay, or generally not be paying, its debts (other than those that are the
subject of bona fide disputes) as they become due, (vi) make
a general assignment for the benefit of creditors, or (vii) take
any corporate or partnership or other action for the purpose of effecting any
of the foregoing; or

 

(b)           Involuntary:  (i) any
proceedings or case shall be commenced against the Borrower seeking (y) relief under the laws referred to above in
paragraph (a) of this Section 10.1.4
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or composition
or adjustment of debts, or (z) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Borrower, and such proceedings or case shall continue undismissed and unstayed
for a period of 60 days, or (ii) an
order granting the relief requested in such proceedings or case against the
Borrower shall be made, granted or entered;

 

10.1.5             Invalidity or
Unenforceability:  a court of competent jurisdiction shall render a judgment or order,
or any law, ordinance, decree or regulation shall be enacted, the effect of
which is to render any material provision of the Loan Documents invalid, not
binding or unenforceable or any Loan Document shall cease to be in full force
and effect and valid and enforceable, provided that if such matter is (in the
sole opinion of the Lender) capable of being remedied, the Borrower shall have
failed, within 30 days thereafter, to furnish or cause to be furnished to
the Lender replacement documents evidencing and, where applicable, securing the
Indebtedness under the Loan Documents which are adequate in the opinion of the
Lender;

 

10.1.6             Cross-Default:  the
Borrower fails to observe or perform any term, covenant or agreement under the
Supply Agreement or the Borrower fails to pay when due or upon demand, in the
case of monies payable on demand, or at maturity, or within any applicable
period of grace, any Indebtedness in an amount or amounts in the aggregate in
excess of US$5,000,000 (or the equivalent amount thereof in other currencies),
or fails to observe or perform any term, covenant or agreement by which it is
bound evidencing or securing any Indebtedness in an amount or amounts in the
aggregate in excess of US$5,000,000 (or the equivalent amount thereof in other
currencies) and, as a result, the holder or holders, or beneficiary or
beneficiaries, thereof or of any such obligations issued thereunder cause or
are entitled to cause the acceleration of the maturity thereof or of any such
obligations;

 

30

 

10.1.7             Seizure:  an
encumbrancer takes possession of any part of the assets of the Borrower having
an aggregate value in excess of US$5,000,000 or a seizure, distress or
execution, or notice of intention to exercise a hypothecary or secured right or
any similar process is levied, filed or enforced thereagainst and remains
unsatisfied for a period of 20 days, in respect of personal or movable
property, or 30 days, in respect of real or immovable property, except if
such seizure, distress, execution, notice of intention or other similar process
is an interim process prior to judgment in which case the cure period shall be
30 days, in respect of personal or movable property, or 60 days, in
respect of real or immovable property;

 

10.1.8             Change of ownership:  (a) except as permitted under Section 7.2.3, DRAXIS Health ceases
to own, either directly or indirectly all of the outstanding Capital Stock of
the Borrower or (b) a change of control of
DRAXIS Health occurs whereby the holders of DRAXIS Health’s Capital Stock
immediately before such change of control transaction cease to own at least 50%
plus one of the outstanding voting rights (on a fully diluted basis) in respect
of DRAXIS Health’s Capital Stock immediately after such change of control
transaction; or

 

10.1.9             Ceasing to
carry on business or termination of Supply Agreement:  (a) the Borrower ceases or threatens to cease to carry on in the
ordinary course its business or a substantial part thereof, except as the
result of a reorganization permitted by Section 7.2.3 or (b) the Supply Agreement is terminated, with cause, by
JJCCI.

 

Section 10.2         Acceleration

 

Upon the
occurrence and during the continuance of any Event of Default other than one
described in Section 10.1.4, the Lender may declare the Aggregate
Commitment to be terminated and reduced to zero and thereby terminate the right
of the Borrower to apply for further Borrowings, and in addition the Lender may
by written notice to the Borrower declare all Indebtedness and liabilities of
the Borrower outstanding to the Lender hereunder to be immediately due and
payable without presentation, presentment, demand, protest or other notice of
any kind, all of which are expressly waived by the Borrower, provided that the
Aggregate Commitment and the right of any Borrower to apply for further
Borrowings shall automatically be terminated and all Indebtedness and
liabilities of the Borrower to the Lender outstanding hereunder shall be
immediately due and payable without any written notice to the Borrower as provided
above and without any other presentation, presentment, demand, protest or other
notice of any kind if an Event of Default has occurred in respect of the
Borrower pursuant to Section 10.1.4. 
In such event, the Borrower shall pay immediately to the Lender all
amounts owing or payable by it under this Agreement and the other Loan
Documents.  ***

 

Section 10.3         Notices

 

Save as
otherwise expressly provided for herein, no notice or mise en demeure of any
kind shall be required to be given to the Borrower by the Lender for the
purpose of putting the Borrower in default, the Borrower being in default by
the mere lapse of time allowed for the performance of an obligation or by the
mere happening of an event or circumstance constituting an Event of Default.

 

31

 

ARTICLE XI

REMEDIES

 

Section 11.1         Remedies Cumulative

 

Subject to Section 12.1
and for greater certainty, it is expressly understood and agreed that the
rights and remedies of the Lender under this Agreement or any other Loan
Document are cumulative and are in addition to and not in substitution for any
rights or remedies provided by law; any single or partial exercise by the
Lender of any right or remedy for a default or breach of any term, covenant, condition
or agreement herein contained shall not be deemed to be a waiver of or to
alter, affect or prejudice any other right or remedy or other rights or
remedies to which the Lender may be lawfully entitled for the same default or
breach, and any waiver by the Lender of the strict observance, performance or
compliance with any term, covenant, condition or agreement herein contained,
and any indulgence granted by the Lender, shall be deemed not to be a waiver of
that or any subsequent default.

 

The Lender may,
to the extent permitted by Applicable Law, bring suit at law, in equity or
otherwise for any available relief or purpose including but not limited to (a) the specific performance of any covenant or
agreement contained in this Agreement or in any other document given pursuant
to or incidental to this Agreement, (b) an
injunction against a violation of any of the terms hereof or thereof, (c) the exercise of any power granted hereby or thereby
or by law, or (d) obtaining and enforcing
judgment for any and all amounts due in respect of the Borrowings or amounts
otherwise due hereunder or under any documents given in connection with this
Agreement or the other Loan Documents.

 

ARTICLE XII

WAIVER OF DEFAULT

 

Section 12.1         Waiver of Default

 

(a)           If at
any time after the occurrence of an Event of Default, the Borrower offers to
cure completely all Events of Default and to pay all expenses, advances and
damages to the Lender  consequent on such
Event of Default, with interest at the rates then applicable to the respective
outstanding Borrowings, then the Lender may, but shall not be obligated to,
accept such offer and payment, but such action shall not affect any subsequent
Event of Default or impair any rights consequent thereon;

 

(b)           no
waiver by the Lender of any Event of Default shall in any way be, or be
construed to be, a waiver of any future or subsequent Event of Default, to the
extent permitted by Applicable Law; and

 

(c)           no
Event of Default may be waived or discharged orally but (in each case) only by
an instrument in writing signed by the Lender.

 

32

 

ARTICLE XIII

SUCCESSORS AND ASSIGNS

 

Section 13.1         Benefit and Burden of this Agreement

 

This Agreement
shall inure to the benefit of and be binding on the parties hereto, their
respective successors and any permitted assignees or transferees of some or all
of the parties’ rights or obligations hereunder.

 

Section 13.2         Assignment by the Borrower

 

The Borrower
shall not assign or transfer all or any part of its rights or obligations
hereunder or under the other Loan Documents without the prior written consent
of the Lender.

 

Section 13.3         Assignment by the Lender

 

The Lender may, at no cost to the Borrower,
assign all or any part of its rights to, and may have its obligations in
respect of the Credit Facilities assumed by any other Person (the “Assignee”); provided that no such assignment may be
effected to a Person other than an Affiliate of the Lender without the written
consent of the Borrower, which consent in each case shall not be unreasonably
withheld, and provided further that (i) notwithstanding
the foregoing, the Lender may, without the consent of the Borrower, assign all
or part of its rights or obligations under the Loan Documents to any of its
Affiliates and (ii) if an Event of Default
shall have occurred and not been waived, such consent from the Borrower shall
not be required.  Subject to the
foregoing, an assignment shall become effective when the Borrower has been
notified of it by the Lender and has received from the Assignee an undertaking
(addressed to the Lender and the Borrower) to be bound by this Agreement and to
perform the obligations assigned to it. 
Any such Assignee shall be and be treated as the Lender for all purposes
of this Agreement, shall be entitled to the full benefit hereof and of all the
Loan Documents and shall be subject to the obligations hereunder to the same
extent as if it were an original party in respect of the rights or obligations
assigned to it, and the Lender shall be released and discharged accordingly and
to the same extent.

 

Section 13.4         Disclosure

 

The Lender may
disclose to any prospective Assignee, on a confidential basis, such information
concerning the Borrower as it considers appropriate.

 

ARTICLE XIV

SET-OFF

 

Section 14.1         Set-off

 

The Lender is
authorized (but not obligated) at any time or from time to time, either before
the occurrence of a Default or an Event of Default or thereafter, without
notice to the Borrower or to

 

33

 

any other
Person, any such notice being expressly waived by the Borrower, to set off,
compensate and apply any Indebtedness, obligation or liability at any time
owing or payable by the Lender to or for the credit of or the account of the
Borrower against and on account of the Indebtedness, obligations and
liabilities of the Borrower owing or payable to the Lender under this Agreement
or the other Loan Documents, irrespective of currency (which may be converted
for this purpose at the “rate of exchange”
as set forth in Section 15.1) and of whether or not the Lender has made
any demand under this Agreement or the other Loan Documents and whether or not
these obligations and liabilities of the Borrower, or any of them, have
matured.  Any such set-off by the Lender,
as contemplated by the prior sentence, shall constitute complete satisfaction
of the applicable obligation or liability owing to the Borrower by the Lender
on a dollar for dollar basis.  The
provisions of this Section 14.1 shall not restrict such rights as the
Lender may be entitled to without relying upon the provisions of this
Agreement.

 

ARTICLE XV

JUDGMENT CURRENCY AND JUDICIAL PROCEEDINGS

 

Section 15.1         Judgment Currency

 

If for the
purpose of obtaining judgment in any court in any jurisdiction with respect to
any Loan Document, it becomes necessary to convert into the currency of such
jurisdiction (herein called the “Judgment Currency”)
any amount due hereunder in any currency other than the Judgment Currency, then
conversion shall be made at the rate of exchange prevailing on the Business Day
preceding (a) the date of actual payment of
the amount due, in the case of proceedings in the courts of any jurisdiction
that will give effect to such conversion being made on such day, or (b) the day on which the judgment is given, in the case
of proceedings in the courts of the Province of Quebec or of any other
jurisdiction (the applicable date as of which such conversion is made pursuant
to this Section being hereinafter called the “Judgment Conversion
Date”).  For this purpose, “rate of exchange” means the rate at which the Bank of
Canada would be prepared on the relevant date to sell the currency of the
amount due hereunder against the Judgment Currency.  In the event that there is a change in the
rate of exchange prevailing between the Judgment Conversion Date and the date
of payment of the amount due, the Borrower will, on the date of payment, pay
such additional amounts (if any) as may be necessary to ensure that the amount
paid on such date is the amount in the Judgment Currency which, when converted
at the rate of exchange prevailing on the date of payment, is the amount then
due under the relevant Loan Document in US Dollars.  Any additional amount due under this Section 15.1
will be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of this Agreement or any
other Loan Document.

 

Section 15.2         Judicial Proceedings

 

Any judicial
proceeding brought against the Borrower with respect to any claim or dispute
related to this Agreement may be brought in any court of competent jurisdiction
in the City of Montreal, Province of Quebec, and, by execution and delivery of
this Agreement, the Borrower, to the extent permitted by Applicable Law, (a) accepts generally and unconditionally, and submits
to the nonexclusive jurisdiction of such courts and any related court of appeal
and

 

34

 

irrevocably
agrees to be bound by any final judgment rendered thereby in connection with
any claim or dispute related to this Agreement and (b) irrevocably
waives any objection it may now or hereafter have as to any such proceeding
having been brought in such a court or that such a court is an inconvenient
forum.  Nothing herein shall limit the
right of the Lender to bring proceedings against the Borrower in the courts of
any other jurisdiction.  THE BORROWER AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING ANY CLAIM OR DISPUTE
RELATED TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

 

ARTICLE XVI

GOVERNING LAW

 

Section 16.1         Governing Law

 

The parties
agree that this Agreement is conclusively deemed to be made under, and for all
purposes to be governed by and construed in accordance with, the laws of the
Province of Quebec and federal laws of Canada applicable therein.

 

ARTICLE XVII

NOTICE

 

Section 17.1         Address for Notice

 

Unless
otherwise provided in this Agreement, any demand, request or notice to be given
under this Agreement shall be given by delivering the same or by mailing, by
registered mail, postage prepaid or by telecopying the same, addressed (a) in the case of the Borrower, as indicated opposite
its name on the signature pages of this Agreement and (b) in
the case of the Lender, as indicated opposite its name on the signature pages of
this Agreement, or (c) to
such other address as may be notified by any party to the others pursuant to Section 17.2.  The parties agree that any and all reports to
be provided by the Borrower to the Lender pursuant to the terms and conditions
of this Agreement may also be sent by electronic transmission to a designated
representative of the Lender.

 

Section 17.2         Notice

 

Any such
demand, request or notice sent as aforesaid shall be deemed to have been
received by the party to whom it is addressed (a) upon
receipt, if delivered or sent by registered mail, (b) if
telecopied before 3:00 p.m. on a Business Day, on that day provided a
clear transmission report is received by the sender and if telecopied after
3:00 p.m. on a Business Day, on the Business Day next following the date
of transmission, provided, however, that in the event normal mail service or
telecopier service shall be interrupted by strike, force majeure or other
cause, then the party sending the demand, request or notice shall utilize any
other mode of communication which shall ensure prompt receipt of such demand,
request or notice by the other party or parties.

 

35

 

ARTICLE XVIII

MISCELLANEOUS

 

Section 18.1         Severability

 

Any provision
of this Agreement which is or becomes prohibited or unenforceable in any
jurisdiction does not invalidate, affect or impair the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction does
not invalidate or render unenforceable such provision in any other
jurisdiction.

 

Section 18.2         Survival of Representations and Undertakings

 

The
representations and warranties made by the Borrower in Article II of this
Agreement and the covenants, undertakings and agreements contained in this
Agreement survive the execution and delivery of this Agreement and continue in
full force and effect until the full payment and satisfaction of all
liabilities and obligations of the Borrower to the Lender under this Agreement
and the termination of the Aggregate Commitment.

 

Section 18.3         Whole Agreement

 

This Agreement
and the other Loan Documents constitute the whole and entire agreement between
the parties hereto with respect to the subject matter hereof, and, save as
contemplated herein, cancel and supersede any prior offers, agreements,
undertakings, declarations and representations, written or verbal in respect
thereof.

 

Section 18.4         Amendments

 

Any amendment, modification or waiver of any
provision of this Agreement or consent to any departure by the Borrower from
any provision of this Agreement must be in writing and will be effective only
in the specific instance, for the specific purpose and for the specific length
of time for which it is given.

 

Notwithstanding
the foregoing paragraph, the Lender is hereby authorized to correct any
typographical error or other error of an editorial nature in this Agreement and
to substitute such corrected text in the counterparts of this Agreement,
provided that such corrections do not modify in any manner the meaning or the
interpretation of this Agreement.

 

Section 18.5         Interest Limitation

 

The parties
agree that no provision of this Agreement or any other Loan Document shall have
the effect of imposing on the Borrower any obligation to pay interest (as such
term is defined in Section 347 of the Criminal Code of Canada) at a rate
in excess of 60% per annum, taking into account all other amounts which must be
taken into account for the purpose thereof; and, to such extent, the Borrower’s
obligation to pay interest hereunder is so limited.

 

36

 

Section 18.6         Counterparts

 

This Agreement
may be executed in any number of counterparts, each of which when executed and
delivered is an original but all of which taken together constitute one and the
same instrument; any party may execute this Agreement by signing any
counterpart of it and may communicate such signing by telecopier or otherwise.

 

Section 18.7         Further Assurances

 

Each party
hereto shall do all such further acts and execute and deliver all such further
documents as shall be reasonably required in order to fully perform and carry
out the terms of this Agreement.

 

Section 18.8         Good Faith and Fair Consideration

 

The Borrower
acknowledges and declares that it has entered into this Agreement freely and of
its own will.  In particular, the
Borrower acknowledges that this Agreement was negotiated by it and the Lender
in good faith.

 

Section 18.9         Term of Agreement

 

The term of
this Agreement is until the later of the termination of the Aggregate
Commitment and payment in full of all the obligations of the Borrower incurred
pursuant to this Agreement.

 

Section 18.10       Formal Date

 

This Agreement
shall bear the formal date of September 4, 2007,
notwithstanding the actual date of execution thereof by the parties hereto and
may be referred to as bearing such date.

 

Section 18.11       USA Patriot Act

 

The Lender
hereby notifies the Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it
is required to obtain, verify and record information that identifies the
Borrower which information includes the name and address of the Borrower and
other information that will allow the Lender to identify the Borrower in
accordance with said Act.

 

Section 18.12       Language

 

The parties
hereto confirm that they have requested that this Agreement and all documents
and notices contemplated hereby be drawn up in the English language.  Les parties aux présentes  confirment avoir requis
que cette convention et tous les documents et avis qui y sont envisagés soient
rédigés en langue anglaise.

 

[Signature Pages Follow]

 

37

 

IN
WITNESS WHEREOF the parties hereto
have caused this Agreement to be duly executed as of September 4, 2007.

 

 

	
  Address:

  	
   

  	
  DRAXIS
  PHARMA, a division of DRAXIS

  SPECIALTY PHARMACEUTICALS INC.

  
	
  16751
  TransCanada Highway

  	
   

  	
   

  
	
  Kirkland,
  Quebec

  	
   

  	
  By:

  	
  /s/ ***

  
	
  H9H 4J4

  	
   

  	
  Name:    ***

  
	
   

  	
   

  	
  Title:      Secretary

  
	
  Attention:     President Draxis Pharma

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tel:      ***

  	
   

  	
   

  
	
  Fax:     ***

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DRAXIS
  Health Inc.

  	
   

  	
   

  
	
  6870 Goreway
  Drive,

  	
   

  	
   

  
	
  2nd Floor

  	
   

  	
   

  
	
  Mississauga,
  Ontario

  	
   

  	
   

  
	
  L4V 1P1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:     General
  Counsel 

  	
   

  	
   

  
	
   

  	
  and
  Secretary

  	
   

  	
   

  
	
  Tel:     ***

  	
   

  	
   

  
	
  Fax:     ***

  	
   

  	
   

  
					

 

(Signature Page to Credit Agreement)

 

 

	
  Address:

  	
   

  	
  JOHNSON &
  JOHNSON FINANCE

  CORPORATION

  
	
  Johnson & Johnson Finance

  	
   

  	
   

  
	
  Corporation

  	
   

  	
  By:

  	
  /s/ ***

  
	
  501 George Street

  	
   

  	
  Name:    ***

  
	
  New Brunswick, NJ 08901

  	
   

  	
  Title:      General
  Manager

  
	
  U.S.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:     General Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tel:    ***

  	
   

  	
   

  
	
  Fax:    ***

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Johnson & Johnson

  	
   

  	
   

  
	
  One Johnson & Johnson Plaza

  	
   

  	
   

  
	
  New Brunswick, NJ 08933

  	
   

  	
   

  
	
  U.S.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:    General Counsel

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax:    ***

  	
   

  	
   

  

 

(Signature Page to Credit Agreement)Exhibit 4.70

 

 

 

 

 

 

 

 

DISTRIBUTION AGREEMENT

 

BETWEEN

 

 

 

DRAXIMAGE LLC

 

 

 

AND

 

 

 

MEDI-PHYSICS INC.

 

dba GE HEALTHCARE

 

 

 

 

 

 

 

 

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE 1 - INTERPRETATION

  	
  1

  
	
  1.01

  	
  Definitions

  	
  1

  
	
  1.02

  	
  Headings

  	
  3

  
	
  1.03

  	
  Extended Meanings

  	
  3

  
	
  1.04

  	
  Schedules

  	
  4

  
	
  ARTICLE 2 - APPOINTMENT - LICENSE

  	
  4

  
	
  2.01

  	
  Appointment

  	
  4

  
	
  2.02

  	
  License

  	
  4

  
	
  2.03

  	
  Restrictions

  	
  4

  
	
  ARTICLE 3 - TERMS OF SALE

  	
  5

  
	
  3.01

  	
  Forecast

  	
  5

  
	
  3.02

  	
  Orders

  	
  5

  
	
  3.03

  	
  Delivery by DRAXIMAGE

  	
  6

  
	
  3.04

  	
  Quality and Labelling

  	
  6

  
	
  3.05

  	
  Customer Rejection

  	
  6

  
	
  3.06

  	
  Audit Rights

  	
  7

  
	
  ARTICLE 4 - PRICE AND PAYMENT

  	
  7

  
	
  4.01

  	
  Price

  	
  7

  
	
  4.02

  	
  Taxes and Duties

  	
  7

  
	
  4.03

  	
  Payment Terms

  	
  8

  
	
  4.04

  	
  Retail Price

  	
  8

  
	
  ARTICLE 5 - DUTIES OF DISTRIBUTOR

  	
  8

  
	
  5.01

  	
  Duties

  	
  8

  
	
  5.02

  	
  Limitations

  	
  9

  
	
  ARTICLE 6 - ADVERSE EVENTS — RECALLS - PHARMACOVIGILANCE

  	
  10

  
	
  6.01

  	
  Adverse Events

  	
  10

  
	
  6.02

  	
  Recalls

  	
  10

  
	
  6.03

  	
  Pharmacovigilance

  	
  10

  
	
  ARTICLE 7 - WARRANTIES

  	
  11

  
	
  7.01

  	
  Representations and Warranties

  	
  11

  
	
  ARTICLE 8 - INDEMNITIES — LIMITATION OF LIABILITY

  	
  12

  
	
  8.01

  	
  Indemnities

  	
  12

  
	
  8.02

  	
  Conditions

  	
  13

  
	
  8.03

  	
  Records

  	
  13

  
	
  8.04

  	
  Limitation of Liability

  	
  13

  
	
  8.05

  	
  Limitation on Warranties

  	
  14

  
	
  ARTICLE 9 - RELATIONSHIP

  	
  15

  
	
  9.01

  	
  Independent Contractors

  	
  15

  
	
  9.02

  	
  Confidentiality

  	
  15

  
	
  ARTICLE 10 - Force Majeure

  	
  15

  
	
  10.01

  	
  Definition

  	
  15

  
	
  10.02

  	
  Non-default

  	
  15

  
	
  10.03

  	
  Cessation of Force Majeure

  	
  16

  
	
  10.04

  	
  Termination

  	
  16

  
	
  ARTICLE 11 - TERM - TERMINATION

  	
  16

  

 

i

 

 

	
  11.01

  	
  Term

  	
  16

  
	
  11.02

  	
  Termination

  	
  16

  
	
  ARTICLE 12 - INSURANCE

  	
  17

  
	
  12.01

  	
  Product Liability Insurance

  	
  17

  
	
  12.02

  	
  All Risk Insurance

  	
  18

  
	
  ARTICLE 13 - GOVERNING LAW - JURISDICTION

  	
  18

  
	
  13.01

  	
  Governing Law

  	
  18

  
	
  13.02

  	
  Jurisdiction

  	
  18

  
	
  ARTICLE 14 - GENERAL

  	
  20

  
	
  14.01

  	
  Subcontract

  	
  20

  
	
  14.02

  	
  Notice

  	
  20

  
	
  14.03

  	
  Further Assurances

  	
  21

  
	
  14.04

  	
  Entire Agreement

  	
  21

  
	
  14.05

  	
  Amendment and Waiver

  	
  21

  
	
  14.06

  	
  Benefit of the Agreement

  	
  21

  
	
  14.07

  	
  Assignment

  	
  21

  
	
  14.08

  	
  Severability

  	
  22

  
	
  14.09

  	
  Survival

  	
  22

  
	
  14.10

  	
  Language

  	
  22

  

 

ii

 

 

 

 

DISTRIBUTION AGREEMENT

 

	
  THIS AGREEMENT
  is effective from the 20th day of December 2007.

  
	
   

  	
   

  	
   

  
	
  B E T W E E N:

  	
   

  	
  DRAXIMAGE LLC, a corporation
  incorporated under the laws of the State of Delaware.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter referred to as “DRAXIMAGE”),

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  MEDI-PHYSICS INC. doing
  business as GE Healthcare, a corporation incorporated under the laws of the
  State of Delaware, USA, having its principal office at 3350 North Ridge
  Avenue, Arlington Heights, Illinois U.S.A 60004,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter referred to as the “Distributor”),

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (each a “Party”
  and together the “Parties”).

  

 

ARTICLE 1 - INTERPRETATION

 

1.01         Definitions

 

In this Agreement, unless
something in the subject matter or context is inconsistent therewith:

 

(1)           “Affiliate” means any Person which controls,
is controlled by, or is under common control with another Person. A Person
shall be regarded as “controlling” another Person for the purposes of this
Agreement if it owns more than fifty (50%) of the voting share capital of the
other Person or if it has the legal power to direct the general management of
the other Person;

 

(2)           “Agreement” means this agreement, including
its preamble, and all amendments made hereto by written agreement of the Parties;

 

(3)           “Applicable Laws” means, in relation to any
Person, property, transaction or event, all applicable provisions in effect at
the relevant time (or mandatory applicable provisions) of federal, provincial,
territorial, state, local or foreign laws, statutes, rules, regulations,
directives and orders of all Regulatory Authorities, and all judgments, orders,
decrees, decisions, rulings or awards of all Regulatory Authorities to which
the Person in question is a party or by which it is bound or having application
to the Person, property, transaction or event;

 

(4)           “API” means Active Pharmaceutical
Ingredient;

 

(5)           “Average Selling Price” (or “ASP”) shall mean ***

 

 

(6)           “Business Day” or “Business Days” means any day other than
Saturday, Sunday or a holiday generally recognized in Germany, or in the United
States;

 

(7)           “Commercially Reasonable Efforts” means ***

 

(8)           “Current Good Manufacturing Practices” or “cGMP” or “GMP”
means, as applicable in accordance with the Territory in which the Product is
distributed in, the practices set out in the regulations (or “regulatory
requirements”) for the manufacture of pharmaceutical products and the Current
Good Manufacturing Practices as defined in United States 21 CFR 210, et seq.,
as amended from time to time;

 

(9)           “Distributor’s Canadian Radiopharmacy Network”
means the ***

 

(10)         “Effective Date” means the date at which
DRAXIMAGE receives a Marketing Authorization for the Product from the FDA and
the main patent for CardioliteÒ has expired in
the U.S. ***

 

(11)         “FDA” means the United States Food and Drug
Administration, or any successor to it;

 

(12)         “Force Majeure” has the meaning set out in Section 10.01;

 

(13)         “GEHC Price” means ***

 

(14)         “Goodwill”
means the goodwill associated with the Product within the Territory;

 

(15)         “Initial Term”
has the meaning set out in Section 11.01(1);

 

(16)         “Intellectual Property”
shall mean, whether or not reduced to writing, all inventions, all rights to
inventions, patents, patent applications and issued patents, copyright, copyright
applications and registrations, processes, licenses, Marketing and Distribution
Know-How (as hereinafter defined), technology, data, chemical structures,
formulae, customer lists, discoveries, trade secrets, proprietary information
and all other rights and intellectual property now or hereafter owned or held
and used by DRAXIMAGE or any of its Affiliates with respect to the Product in
the Territory.

 

(17)         “Marketing and
Distribution Know-How” shall mean all readily available know-how,
information, data, knowledge, discoveries, trade secrets, works, data,
analytical reference materials and confidential or proprietary processes
relating to the Product or to the promotion, distribution or sale of the
Product in the Territory, and other information owned or developed by, in the
possession of, known to or used within the Territory by either Party, or any of
its Affiliates prior to the Effective Date or during the term of this
Agreement, that is reasonably required by Distributor in order to promote, distribute
and sell the Product in the Territory. Without limiting the generality of the
foregoing, Marketing and Distribution Know-How shall include all customer
lists, market research data and reports, customer segmentation reports, detail
pieces and any other marketing information relating to the promotion,
distribution or sale of the Product in the Territory;

 

 

 

(18)         Marketing Authorizations”
means the Marketing Authorizations for the Product in the Territory specified
in Schedule 1, including but not limited to any and all authorizations,
licenses and compliance with all Applicable Laws;

 

(19)         “Net Sales”
means the price received by the Distributor for sale of the Product, excluding
applicable sales taxes, customs
fees, duties and freight costs;

 

(20)         “Person” means
an individual, corporation, company, co-operative, partnership organization or
any similar entity;

 

(21)         “Product” means
DRAXIMAGEÒ Sestamibi manufactured and supplied by DRAXIMAGE or its
designated subcontractors and any other product hereafter included as a Product
by written agreement of the Parties, as further described in Schedule 1;

 

(22)         “Quality Agreement”
means that quality agreement to be entered into between the Parties within
ninety (90) days of the date of execution of this Agreement;

 

(23)         “Registration
Documentation”  means
the Drug Identification Number (DIN) or similar drug product identification,
regulatory dossiers, data, results of clinical or other trials or
investigations and the like, if any, submitted as part of any application for
the Marketing Authorizations and which is in the possession of DRAXIMAGE at any
time during the course of this Agreement, including, without limitation, the
drug master file and all information and data submitted to any provincial,
state or federal or private insurance authorities or price control or licensing
bodies;

 

(24)         “Regulatory Authority”
means any federal, provincial, territorial, state, local or foreign government
agency, board, tribunal, court, commission or authority and includes, without
limitation, the FDA, having authority over the purchase, manufacture, storage,
handling, packaging, labelling, disposal, marketing, distribution or sale of
the Product;

 

(25)         “Regulatory Requirements”
means any rules, regulations, directives, policies, guidelines and orders of
any Regulatory Authority, including, without limitation, current good
manufacturing practice and any Applicable Laws;

 

(26)         “Renewed Term”
shall have the meaning set out in Section 11.01(2);

 

(27)         “Specifications”
means the specifications of the Product attached hereto as Schedule 2, as
amended from time to time by DRAXIMAGE upon prior notice to the Distributor;

 

(28)         “Term” means,
collectively, the Initial Term and any Renewed Term, as the case may be;

 

(29)         “Territory”
means the United States of America, including its territories;

 

(30)         “Trade-marks”
means the trade-marks, trade names and trade dress for the Product (whether
registered or not), the details of which are set out in Schedule 3;

 

 

 

(31)         “Warranties”
means the representations, warranties and covenants given by DRAXIMAGE to the
Distributor as set out in Schedule 4; and

 

(32)         “$” means US
dollars.

 

1.02         Headings

 

The
division of this Agreement into Articles and Sections and the insertion of
headings are for convenience of reference only and do not affect the
construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”,
“hereunder” and similar expressions refer to this Agreement and not to any
particular Article, Section or other portion hereof and include any
agreement supplemental hereto.  Unless
something in the subject matter or context is inconsistent therewith,
references herein to Articles and Sections are to Articles and Sections of this
Agreement.

 

1.03         Extended Meanings

 

In this
Agreement words importing the singular number include the plural and vice
versa, words importing any gender include all genders and words importing
persons include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations.

 

1.04         Schedules

 

The
following are the Schedules attached hereto and deemed to be part hereof:

 

                           ***

 

ARTICLE 2 -
APPOINTMENT - LICENSE

 

2.01         Appointment

 

(1)           Subject to the terms and conditions of this Agreement and
with effect from the Effective Date, DRAXIMAGE hereby appoints, and the
Distributor hereby accepts its appointment, as the exclusive distributor of the
Product in the Territory and to Distributor’s Canadian Radiopharmacy
Network for the Term of the Agreement.  ***

 

(2)           The
Distributor recognizes and agrees that it shall not be able to offer for sale
or sell the Product in Canada to its Canadian Radiopharmacy Network until
DRAXIMAGE has received Health Canada approval for same and that the main
Canadian patent for CardioliteÒ has expired and
that consequently, DRAXIMAGE may sell the Product to Distributor ***

 

(3)           Except
with the prior written approval of DRAXIMAGE,
and as provided herein, the
Distributor shall not be empowered by its appointment hereunder or otherwise,
to act on behalf of or bind DRAXIMAGE or to make any express or implied representation
or give any warranty on the Product or otherwise on behalf of DRAXIMAGE.

 

(4)           ***

 

 

 

2.02         License

 

(1)           DRAXIMAGE grants Distributor an exclusive,
non-transferable, right and license to use, copy and reproduce in the Territory
(i) the Intellectual Property, (ii) the Goodwill and (iii) the
Registration Documentation, solely for marketing, promoting, distributing and
selling the Product, provided that any such use or display complies with
DRAXIMAGE’s then-current trade-mark usage guidelines as provided by DRAXIMAGE
to the Distributor in writing.

 

(2)           The Distributor acknowledges that DRAXIMAGE will have and
retain all worldwide right, title and interest in and to the Intellectual
Property, the Goodwill and the Registration Documentation. All use of the
Trademarks by the Distributor and the Goodwill generated thereby shall be owned
and enure to the benefit of DRAXIMAGE. 
DRAXIMAGE may terminate the rights granted in this Section 2.02 if,
in its reasonable discretion, the Distributor’s use of the Trade-marks
tarnishes, blurs or dilutes the quality or Goodwill associated with the
Trade-marks.

 

(3)           All rights not expressly granted in this Section 2.02
are hereby reserved.

 

2.03         Restrictions

 

(1)           The Distributor agrees that it will not use the
Trade-marks (i) as any part of the name under which the Distributor
carries on business or (ii) in combination with any other name or symbol,
word(s), logo or mark so as to form a composite mark or a new mark. The
Distributor will not attempt to register any of the Trade-marks or any other
mark confusingly similar thereto.

 

(2)           The Distributor shall
provide to DRAXIMAGE at least thirty (30) days in advance a copy of all
proposed marketing and advertising material proposed to be used in respect of
the Product or the Trade-marks, all of which material must be approved in
writing by DRAXIMAGE before it can be used by the Distributor in order for
DRAXIMAGE to control the proper use of the trademarks and the proper
description of the Product.

 

ARTICLE 3 -
TERMS OF SALE

 

3.01         Forecasts

 

(1)           The Distributor shall provide DRAXIMAGE with a mutually agreed ***  forecast of the purchasing volume of Product (i) within
*** days of the Effective Date and thereafter each ***  of the Term (the “Annual Forecast”) and (ii) at
the beginning of each calendar quarter.

 

(2)           ***

 

3.02         Orders

 

(1)           ***

 

 

 

(2)           DRAXIMAGE or its authorized subcontractor shall use
its best commercial efforts to fill such orders.  DRAXIMAGE shall promptly inform the Distributor
of the unavailability of any Product.

 

(3)           DRAXIMAGE shall inform the Distributor in writing within
five (5) Business Days of the receipt of an order of its acceptance, refusal or non-execution of
such order transmitted by the Distributor.

 

(4)           All orders accepted by DRAXIMAGE shall be final.

 

3.03         Inability to Supply

 

(1)           ***

 

(2)           ***

 

(3)           ***

 

(4)           ***

 

(a)                                  ***

 

(b)                                 ***

 

(c)                                  ***

 

(d)                                 ***

 

(5)           ***

 

3.04         Minimum Volumes

 

(1)           ***

 

(2)           ***

 

(3)           ***

 

(4)           ***

 

3.05         Delivery by DRAXIMAGE

 

(1)           DRAXIMAGE or its authorized subcontractor shall deliver
any orders placed by the Distributor and accepted by DRAXIMAGE in accordance
with Section 3.02(3) within thirty (30) days of the acceptance of
said orders, except due to exceptional circumstances.

 

(2)           DRAXIMAGE or its authorized subcontractor shall inform the
Distributor of any anticipated delay in the delivery of the Product.

 

 

 

(3)           ***

 

(4)           ***

 

3.06         Quality and Labelling

 

(1)           Upon delivery of the Product in accordance with Section 3.05(3), the
Distributor shall conduct a visual inspection of said Product. If the
Distributor reasonably believes that any shipment of the Product fails to meet
the Specifications upon delivery, the Distributor shall notify DRAXIMAGE or its
authorized subcontractor within two (2) Business Days after delivery and,
at the cost of DRAXIMAGE, may return the Product to DRAXIMAGE or its authorized
subcontractor. DRAXIMAGE shall, pursuant to the Distributor’s directions,
either replace the Product or refund the price of such returned Product to the
Distributor.

 

(2)           Any dispute between the Parties regarding the conformity or non-conformity
of Product to the Specifications shall be submitted to an independent
laboratory, to be agreed upon by the Parties. 
The decision of said
laboratory shall be binding on both Parties with the fees of said laboratory to
be borne either by DRAXIMAGE if the concerned shipment does not correspond to
the Specifications or by the Distributor in any other event.

 

(3)           The Product shall be labeled as set
forth in Schedule 5 attached herewith. 
The Distributor shall not change the labeling without the prior written
consent of DRAXIMAGE, except if mandatory because of an applicable regulatory
requirement.

 

(4)           The Product to be
sold by the Distributor to the Distributor’s Canadian Radiopharmacy Network
shall have a distinct label in compliance with applicable Canadian legislation.

 

3.07         Customer Rejection

 

(1)           The Distributor shall immediately inform DRAXIMAGE in the
event that a customer rejects the delivery of the Product ordered. Upon
DRAXIMAGE’s written authorization, the Distributor shall request from the
shipper that the Product be returned to a location to be designated in writing
by DRAXIMAGE.

 

(2)           In the event that the Product which is returned is
deteriorated or expired Product, and provided that such return results from
DRAXIMAGE’s failure to comply with the requirements set forth under this
Agreement, DRAXIMAGE shall (i) credit the Distributor for the price it has
invoiced to the Distributor for Product and (ii) bear all costs and losses
related to the returned Product, including its destruction. Subject to the
above, the Distributor shall, upon written request and at DRAXIMAGE’s expense,
destroy any Product which is returned to the Distributor.

 

3.08         Audit Rights

 

(1)           Not more than once in any twelve (12) month period, upon
ten (10) Business Days’ notice, DRAXIMAGE shall be entitled through an
independent auditor, accountant or other representative:

 

 

 

 

                                                to conduct during the term of this Agreement, or any renewal
thereof, an inspection of the Distributor’s facilities and warehousing in
accordance with the terms of the Quality Agreement in order to verify the
proper storage of the Product in accordance with the terms and conditions of
this Agreement;

 

                                                to review and verify, during the term of this Agreement, or
any renewal thereof, and for *** all of the records kept and maintained by the
Distributor relating to the Distributor’s activities in connection with this
Agreement, including but not limited to ***

 

(2)           The inspection and review described in Section 3.08(1) shall
be at DRAXIMAGE’s expense, unless such review indicates a breach of the terms
and conditions of this Agreement by the Distributor, in which case the
Distributor shall pay DRAXIMAGE’s expenses in performing such review within
fifteen (15) days of a receipt of an invoice for same and DRAXIMAGE shall have
the right in its sole discretion to terminate this Agreement in accordance with
Section 11.02(1).

 

ARTICLE 4 -
PRICE AND PAYMENT

 

4.01         Price

 

The prices payable for all
Products purchased by the Distributor from DRAXIMAGE are set forth in Schedule
7.

 

4.02         Incentives

 

Schedule 8 provides a list
of applicable rebates on the GEHC Price in the event that the Distributor
purchases certain quantities of Products in a given year during the Initial
Term.

 

4.03         Taxes and Duties

 

The Distributor agrees to pay, in addition to
the price, all sales taxes, duties and other similar indirect taxes and
charges, domestic and international, where properly levied.

 

4.04         Payment Terms

 

The Distributor must pay
for the Products within *** days  from
the date of invoice on the terms set out in the invoice. Payment of all amounts
due to DRAXIMAGE shall in no event be delayed due to late payment to the
Distributor by its customers.  All
amounts payable to DRAXIMAGE for Product shall be paid in US dollars to such
Person at such address, electronic or otherwise, as shall be specified by
DRAXIMAGE by notice to the Distributor.

 

4.05         Retail Price

 

Subject to any restrictions
contained in this Agreement, the Parties agree that the Distributor shall be
free to make decisions in connection with its marketing activities, including
the price of the Product, in an autonomous and independent manner.

 

4.06         Marketing Conditions

 

***

 

4.07         Reconciliation

 

***

 

ARTICLE 5 -
DUTIES OF DISTRIBUTOR AND DRAXIMAGE

 

5.01         Duties

 

A - DISTRIBUTOR

 

(1)           The Distributor will use its Commercially Reasonable
Efforts to make available and to sell the Product in the Territory and, without
limiting the generality of the foregoing, will fill orders for the Product.

 

(2)           Upon a request from Distributor, DRAXIMAGE shall provide
to Distributor such sales promotional material, displays and other merchandise
as DRAXIMAGE may currently have on hand, at its expense.

 

(3)           The Distributor shall:

 

                                                advise DRAXIMAGE of any matter that Distributor determines
will affect sales in the Territory and of any material customer complaints;

 

                                                deliver Product to customers of Product in the Territory.

 

                                                provide suitable facilities and cGMP warehousing to store
and handle Product delivered to the Distributor;

 

                                                maintain ***

 

                                                list the Product availability on its product catalogues and
website, if applicable, for the Nuclear Pharmacies product offering; and

 

                                                ***

 

(4)           The Distributor shall notify DRAXIMAGE within
four (4) Business Days of any information
that it may receive, from time to time, regarding any threatened or pending
action by any competent authority which the Distributor determines may affect
the safety or efficacy claims of the Product or the continued marketing of
same.

 

(5)           The Distributor shall keep accurate sales records in
accordance with applicable standards to enable rapid recall of the Product, if
such recall is necessary.

 

 

 

(6)           The Distributor shall provide within forty-five (45) days
of the beginning of each calendar quarter a written sales report to DRAXIMAGE
relating to the previous calendar quarter which shall
include a breakdown by number of units of Product sold and sales to each of the
distribution channels ***

 

(7)           The Distributor shall promptly refer to DRAXIMAGE all
inquiries received by it concerning the use or administration of the Product by
or to third parties.

 

B —
DRAXIMAGE

 

(1)           DRAXIMAGE shall be responsible for filing and maintaining
the ANDA and all supplemental applications.

 

5.02         Limitations

 

(1)           The Distributor will confine its sales of Product to the
Territory and will not, directly or indirectly, deliver any Product to any
place outside the Territory or knowingly sell any Product for delivery to any
such place.  The Product is manufactured
in Europe and is subject to European export control laws.  Any Product received in the United States is
thereafter also subject to United States export control laws and economic
sanctions regulations.  The Distributor
will indemnify and hold DRAXIMAGE and its Affiliates, employees, directors,
officers and shareholders, harmless against any claims asserted against, or
costs or damages incurred or paid by, DRAXIMAGE which arise or result from the
Distributor’s failure or alleged failure to comply with applicable
export-related laws or regulations.

 

(2)           ***

 

(3)           ***

 

(4)           The Distributor shall not sell or distribute any Product
which has an expired shelf life.

 

(5)           Unless otherwise approved in writing by DRAXIMAGE, the
Distributor shall not make any statement about the Product other than those set
forth in DRAXIMAGE official labelling for the Product, as approved by the
competent Regulatory Authority. For greater clarity, the Distributor will not
make any statement whatsoever with respect to off-label use of the Product.

 

ARTICLE 6 -
ADVERSE EVENTS — RECALLS - PHARMACOVIGILANCE

 

6.01         Adverse Events

 

The Distributor shall
inform DRAXIMAGE immediately, and in any event within four (4) Business Days of all reports of adverse drug events, coming to the
Distributor’s knowledge with regard to the Product regardless of the origin of
such reports. The Parties shall inform each other without delay if any measure
is necessary to remove or to minimize any risk with respect to a 

 

 

 

specific production lot or
preparation of a Product.  However,
DRAXIMAGE shall be responsible for all follow up procedures with regard to any
adverse drug event.

 

6.02         Recalls

 

(1)           If, for any reason, it shall become necessary to trace
back or recall any particular batch of the Product, or to identify the customer
or customers to whom any unit from such batch has been delivered, the
Distributor shall co-operate with DRAXIMAGE in doing so.

 

(2)         In the event that either Party has reason to believe that
one or more lots of the Product should be recalled or withdrawn from
distribution in the Territory, such Party shall immediately notify the other
Party in writing or by telephone if the notice is to be given on a day other
than a Business Day. To the extent permitted by the circumstances, the Parties
shall confer together before initiating any recall in order to exchange any
relevant information, but the decision as to whether or not to initiate a
recall of the Product in the Territory shall be taken by DRAXIMAGE.  In this respect, DRAXIMAGE shall have the
right, at any time, to recall any of the Product promptly by giving notice to
the Distributor by telephone (to be immediately confirmed in writing, by
facsimile or courier) and the Distributor shall upon receipt of such notice,
immediately cease and desist from further selling and for distributing the
Product to be returned to the Distributor and shipped back to DRAXIMAGE
pursuant to DRAXIMAGE’s instructions.  If
the Distributor deems there is a situation that necessitates a recall and
advises DRAXIMAGE of same and DRAXIMAGE does not respond to Distributor’s
inquiry regarding same within twenty-four (24) hours notice of the receipt of
the written notice by Distributor, then the Distributor shall be entitled to
initiate a recall of the Product.  In
such event, Distributor shall advise DRAXIMAGE of all procedures taken and all
related information.  However both
parties agree to work together in good faith to reach a mutually agreed upon
decision in each case where a recall may be necessary.

 

If the
recall is required because of a modification or withdrawal of an approval from
a Regulatory Authority or of a negligent act or omission of DRAXIMAGE,
DRAXIMAGE shall promptly reimburse the Distributor for the cost and expense of
such recall, and, at DRAXIMAGE’s option, DRAXIMAGE shall replace the recalled
Product or refund the purchase price (as referenced in Schedule 7 hereto) of
such recalled Product. If the recall is required because of a negligent act or
omission of the Distributor in connection with the handling, refrigeration,
storage or distribution of the Product, then such recall shall be conducted by
the Distributor at its sole cost and expense and the Distributor shall not be
entitled to any such replacements or refunds from DRAXIMAGE. If such recall is
required because of a joint act or omission of the Parties, the Distributor
shall conduct the recall and the Parties shall negotiate in good faith an
appropriate allocation of the cost and expense of such recall.

 

6.03         Pharmacovigilance

 

(1)           Except as already provided in Section 6.01, the
Parties agree that DRAXIMAGE shall be responsible for all pharmacovigilance and
compliance obligations in connection with this Product in the Territory.  DRAXIMAGE shall be the contact for the FDA
and any other applicable regulatory agency.

 

 

 

 

ARTICLE 7 -
WARRANTIES

 

7.01         Representations and Warranties

 

(1)           Each Party hereby represents, warrants and covenants to
the other as follows, such representations, warranties and covenants having
full force and effect for the benefit of the other Party throughout the term of
the Agreement:

 

                                                it is duly incorporated, organized and validly existing and
in good standing under the laws of jurisdiction of incorporation;

 

                                                it has full right and authority to enter into and deliver
this Agreement;

 

                                                this Agreement has been duly executed and
delivered by it, and is a valid and binding obligation of such party
enforceable in accordance with its terms;

 

                                                it has not entered into any contract,
arrangement or understanding with any other Person or entity, that does or may
impair or diminish its ability to fully perform, be responsible for and meet
all the obligations and liabilities to it set forth in this Agreement; and

 

                                                it is not aware at the date of signature of this Agreement
of anything within its reasonable control which might or will adversely affect
its ability to fulfil its obligations under this Agreement.

 

(2)           The Distributor hereby represents, warrants and covenants
to DRAXIMAGE as follows, such representations, warranties and covenants having
full force and effect for the benefit of DRAXIMAGE throughout the term of the
Agreement:

 

                                                it has and/or will acquire and maintain all
necessary and appropriate authorizations, licenses, permits and permissions to
fully perform, be responsible for and meet all the obligations and liabilities
relating to it set forth in this Agreement;

 

                                                it has and will maintain adequate
facilities and cGMP warehousing for the Product, in accordance with the storage
instructions set out in the Specifications. The Distributor shall keep the
Product in good condition and free from any damage and contamination that would
detract from the appeareance and/or performance of the Product; and

 

                                                it has, and its officers and directors
have, no pending or anticipated litigation, action or proceeding before any
court, tribunal or Person relating to any matter or thing that may affect its
ability to fully perform, be responsible for and meet all 

 

 

 

the obligations
and liabilities set forth in this Agreement or that DRAXIMAGE believes, acting
reasonably, would reflect poorly on Distributor’s standing within the business
community.

 

(3)           DRAXIMAGE hereby represents, warrants and covenants to the
Distributor as set out in Schedule 4 (the “Warranties”),
such representations, warranties and covenants having full force and effect for
the benefit of the Distributor through the term of the Agreement.

 

(4)           The provisions of Sections 8.04 and 8.05 hereof shall
operate to limit the liability of DRAXIMAGE under the Warranties and such
limitation shall apply equally to any claim which may be brought by any
permitted assignee of the benefit of the Warranties.

 

ARTICLE 8 -
INDEMNITIES — LIMITATION OF LIABILITY

 

8.01         Indemnities

 

(1)           DRAXIMAGE shall indemnify the Distributor and its
Affiliates, and their respective directors, officers and employees, and defend
and save each of them harmless, from and against any and all losses, damages,
liabilities, costs and expenses (including reasonable lawyers’ fees and
expenses) in connection with any and all suits, investigations, claims or
demands (collectively, “Losses”)
arising from or occurring as a result of:

 

                                                ***

 

                                                ***

 

                                                ***

 

                                                ***

 

                                                ***

 

(2)           The Distributor shall indemnify DRAXIMAGE and Affiliates
and their respective directors, officers and employees, and defend and save
each of them harmless, from and against any and all Losses arising from or
occurring as a result of:

 

                                                ***

 

                                                ***

 

                                                ***

 

                                                ***

 

 

 

 

8.02         Conditions

 

(1)           It shall be a condition of the Party giving the
indemnification (the “Indemnifier”)
being liable to indemnify the other Party (the “Indemnified”) under the provisions of Section 8.01 that:

 

                                                the Indemnified promptly notifies the Indemnifier of any
claim made against it in relation to such matters;

 

                                                the Indemnified shall not accept any compromise or
settlement nor take any other material steps in relation to the subject of such
claim without the prior approval in writing of the Indemnifier, such approval
not to be unreasonably withheld; and

 

                                                the Indemnified shall (subject to being indemnified by the
Indemnifier in a form reasonably satisfactory to the Indemnified against all
costs and expenses) allow the Indemnifier and its insurers to have the conduct
of any defence to, or settlement or compromise of, any such claim and give the
Indemnifier all assistance that the Indemnifier reasonably requires in
connection therewith.

 

8.03         Records

 

(1)           During the term of this Agreement and for a period of
seven (7) years thereafter, Distributor shall keep records sufficient to
enable DRAXIMAGE to verify Distributor’s compliance with the terms and
conditions of the Agreement.

 

(2)           If an Indemnified Party is seeking indemnification
pursuant to this Article 8 in respect of a third party claim, the
Indemnified Party shall provide the Indemnifier with access to and copies of
any information in the Indemnified Party’s possession as the Indemnifier may
reasonably require in order to enable it to defend such claim, and the Indemnifier
shall hold such information as may have been transferred to it pursuant to this
Agreement in safe custody and shall not destroy any such information for a
period of at least seven (7) years from the Effective Date of this
Agreement without the prior approval of the Indemnified Party.

 

8.04         Limitation of Liability

 

***

 

8.05         Limitation on Warranties

 

(1)           Where the grounds for a claim against DRAXIMAGE under the
Warranties arises in respect of or in connection with a claim by, or alleged
liability to, a third party:

 

(a)                                  The Distributor shall not accept any compromise or
settlement nor take any other material steps in relation to the subject of such
claim without the prior approval in writing of DRAXIMAGE, such approval not to
be unreasonably withheld; and

 

(b)                                 The Distributor shall (subject to being indemnified by
DRAXIMAGE in a form reasonably satisfactory to the Distributor against all
costs and expenses) allow 

 

 

 

DRAXIMAGE and its insurers to have
the conduct of any defence to, or settlement or compromise of, any such claim
and give DRAXIMAGE all assistance that DRAXIMAGE reasonably requires in
connection therewith.

 

(2)           Where the Distributor has any claim against any third
party in relation to any matter in respect of which there shall have been a breach
of the Warranties or where the Distributor receives any claim from a third
party which may result in the Distributor having a claim under the Warranties,
DRAXIMAGE shall be entitled to take any action and require the Distributor to
take any action it may reasonably request to prosecute or resist such claim, as
the case may be, in the name of the Distributor (if appropriate), but at the
expense of DRAXIMAGE, and DRAXIMAGE shall further be entitled at its own
expense to have the conduct of any appeal, dispute, application for deferment
and other forms of objection, compromise or defence and of any incidental
negotiations and the Distributor shall give DRAXIMAGE such co-operation, access
and assistance for the purpose of considering, prosecuting or resisting, as the
case may be, such claim as  DRAXIMAGE may
reasonably require.

 

(3)           If DRAXIMAGE shall have made a payment in respect of a
claim under the Warranties and the Distributor shall subsequently receive from
a third party, or under the terms of any insurance policy, a sum which would
have reduced the liability of DRAXIMAGE in respect of such claim had such sum
been received prior to payment by DRAXIMAGE, the Distributor shall repay to
DRAXIMAGE such amount as is equal to the sum subsequently received (after
having deducted the reasonable costs and expenses, if any, incurred in
recovering such sum) provided that the amount so repaid shall not exceed the
amount of the payment made by DRAXIMAGE.

 

(4)           The Distributor acknowledges that no representations, undertakings
or warranties, express or implied, are given by DRAXIMAGE in relation to the
Product other than expressly contained or referred to in this Agreement or in
any other document referred to in this Agreement.

 

ARTICLE 9 -
RELATIONSHIP

 

9.01         Independent Contractors

 

(1)           The relationship between DRAXIMAGE and the Distributor
created pursuant to this Agreement is intended to be and shall be solely that
of independent contractors. Neither Party, nor its employees, agents or
representatives shall under any circumstances be considered employees, agents,
partners, joint venturers or representatives of the other Party. Neither Party,
nor its employees, agents or representative shall act or attempt to act, or
represent themselves, directly or by implication, as an employee, agent, joint
venturer, partner or representative of the other Party or in any manner assume
or create, or attempt to assume or create, any obligation or liability of any
kind, express or implied, on behalf of or in the name of the other Party.  No Person other than DRAXIMAGE or Distributor
may rely on or enforce any provision of this Agreement.

 

(2)           The Distributor has no authority to adjust or negotiate or
settle any claims or demands against DRAXIMAGE or to bind DRAXIMAGE in any
respect.

 

 

 

9.02         Confidentiality

 

This
Agreement is subject to the Mutual Confidential Disclosure Agreement entered
into between *** and the *** (“CDA”)
which is incorporated herein by reference and attached hereto as Schedule 9;
provided, however, that the Parties agree that (i) the provisions of the
CDA shall apply to all information and data provided by either Party or their
agent(s) in confidence or as confidential and (ii) the definition of
“Purpose” therein shall be extended to include the performance of each of
DRAXIMAGE LLC and the Distributor obligations under this Agreement.

 

ARTICLE
10 - FORCE MAJEURE

 

10.01       Definition

 

In this Agreement, “Force  Majeure”
means the following events or occurrences beyond the reasonable control of a
Party which by the exercise of reasonable diligence could not be overcome,
including, but not limited to, strikes, lock-outs, labour disruptions, acts of
God, changes in the law, restraints of governments, riots, acts of war, civil
disturbances, terrorist actions, rebellion or sabotage, pipeline or pipe
failure, failure of fuel or water supply or transportation fire, flood, ice,
lightning, epidemic, explosion, hydro-electric power failures, defaults by
third party suppliers, not caused by the act or omission of the Party or any delay
or failure by a Regulatory Authority to issue any relevant permit or order not
caused by the act or omission of the Party.

 

10.02       Non-default

 

A Party shall be deemed not
to be in default with respect to non-performance of any of its obligations
under this Agreement, if and so long as such non-performance is due in whole or
in some material way to an event of Force Majeure and that Party has used
Commercially Reasonable Efforts to remove the event of Force Majeure and to
perform its obligations under the Agreement. 
If an event of Force Majeure occurs, the Party affected shall promptly
notify the other Party of the occurrence of the event, its extent and probable
duration and shall use all reasonable endeavours to bring the Force Majeure
event to a close or to find a solution by which the Agreement may be performed
despite the continuance of the Force Majeure event.

 

10.03       Cessation of Force Majeure

 

Subject to Section 10.02,
if a Party is unable to comply with its obligations under this Agreement by
reason of Force Majeure, Force Majeure shall excuse such Party’s performance
until the Force Majeure has ceased and for a reasonable period of time
thereafter, to allow said Party to restore itself to the position it was
immediately prior to the Force Majeure.    The Party subject to the Force Majeure event
shall suffer no penalty or incur any liability for its inability to perform
hereunder by reason of Force Majeure.

 

 

 

10.04       Termination

 

If a Party fails to perform
any of its obligations under this Agreement by reason of Force Majeure and such
non-performance continues for a period of ninety (90)  days from the first occurrence of the event of Force Majeure,
the other Party may, if itself is not in default under the Agreement, terminate
this Agreement by providing written notice to that effect to the non-performing
Party.  In the event of such termination,
both Parties’ respective rights and obligations under this Agreement shall
terminate except for any amounts previously due and owing by one Party to the
other and except for any other obligations which this Agreement expressly
provides shall survive termination.

 

ARTICLE 11 -
TERM - TERMINATION

 

11.01       Term

 

(1)           This Agreement will commence on the date of signature hereof and continue
in effect for a period of three (3) years from the Effective Date (the
“Initial Term”), except that it is understood and agreed by the Distributor
that the supply of Products by DRAXIMAGE to the Distributor shall not commence
prior to the Effective Date and that the Distributor may not sell or offer for
sale the Product prior to the Effective Date.

 

(2)           This Agreement shall be automatically renewed for successive periods of ***
each (“Renewed Term”) following the expiration of the Initial Term, unless
otherwise indicated by either Party to the other with a prior *** written
notice.

 

11.02       Termination

 

(1)           ***

 

(2)           ***

 

***

 

    ***

 

    ***

 

    ***

 

***

 

***

 

***

 

DRAXIMAGE shall
deliver such residual quantities of the Product to Distributor in
accordance with the terms set forth in Article 3 hereof.

 

 

 

(3)                   Each
Party may terminate this Agreement, upon written notice:

 

                                                if the other Party breaches
or fails to observe or perform any obligations set out in this Agreement and
fails to cure such breach with fifteen (15) Business Days written notice or any
longer cure period mutually agreed to between the Parties;

 

                                                if the other Party fails to
perform its obligations under this Agreement by reason of Force Majeure as set
out in Section 10.04.

 

(4)           DRAXIMAGE may terminate
this Agreement forthwith by notice to the Distributor if:

 

                                                the Distributor ceases
distribution of the Product;

 

                                                the Distributor ceases to
carry on business or sells the assets pertaining to the business of
distributing Product or becomes insolvent or commences any proceedings or any
proceedings are commenced against it under any bankruptcy or insolvency
legislation or makes an assignment for the benefit of its creditors or proposes
a compromise or arrangement to its creditors or if a receiver of its assets or
any substantial part thereof is appointed.

 

(5)           ***

 

(6)           Upon expiration or
termination of this Agreement for any reason whatsoever:

 

                                                the Distributor shall
immediately cease to market, promote, distribute and sell the Product, unless
otherwise agreed in writing by DRAXIMAGE;

 

                                                the rights and licenses
granted to the Distributor under this Agreement will automatically terminate;

 

                                                the Distributor shall cease
using the Trade-marks and thereafter refrain from holding itself out as an
authorized Distributor of DRAXIMAGE;

 

                                                DRAXIMAGE shall be entitled
to market, promote, distribute and sell the Product to any Person  in the Territory either directly or
indirectly;

 

                                                DRAXIMAGE may repurchase all
of the Distributor’s inventory of Product that meet the applicable
Specifications at the prices paid therefor by the Distributor.

 

                                                the Distributor will return
all paper and electronic copies of all promotional material and other
information relating to the Product and all Intellectual Property to DRAXIMAGE
within thirty (30) days of the expiration or termination of the Agreement.

 

 

 

ARTICLE 12 - INSURANCE

 

12.01       Product Liability
Insurance

 

DRAXIMAGE agrees to
maintain product liability insurance in such form, amount and effect so as to
fulfil its obligations hereunder to the Distributor’s reasonable satisfaction,
but in no event shall such coverage be less than ***. Upon the Distributor’s
request, DRAXIMAGE shall provide the Distributor with certificates of insurance
attesting the existence of such insurance. 
***

 

12.02       All Risk Insurance

 

The Distributor agrees
to maintain all risk and general liability insurance in such form, amount and
effect so as to fulfil its obligations hereunder to DRAXIMAGE’s reasonable
satisfaction, but in no event shall such coverage be less than ***.  Upon DRAXIMAGE’s request, the Distributor
shall provide DRAXIMAGE with certificates of insurance attesting the existence
of such insurance.  ***

 

ARTICLE 13 - GOVERNING LAW - JURISDICTION

 

13.01       Governing Law

 

This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable therein, without regard to its choice
of law principles.

 

13.02       Jurisdiction

 

(1)           Throughout the Term, the
Parties will always attempt in good faith to resolve any disputes arising with
respect to the Agreement.  In the event
that a dispute cannot be resolved by consensus after initial informal
discussion between the Parties, such dispute shall be referred to the
Presidents of DRAXIMAGE and Distributor (collectively, the “Negotiators”), who
shall discuss the matter and attempt in good faith to reach an amicable
solution to the dispute.  Should the
Negotiators, within thirty (30) days of their first meeting (whether by phone
or in person) with respect to the dispute fail to resolve the dispute (the
“Settlement Date”), the matter shall proceed to mediation as described below.

 

(2)           In the event the dispute is
not resolved in accordance with Section 13.02(1), the Parties shall then
attempt in good faith to resolve any significant controversy, claim, or dispute
arising out of or relating to this Agreement or any significant breach thereof
through mediation with a mutually agreed mediator.  If the mediation of such dispute does not
commence within thirty (30) days (or such other period of time mutually agreed
upon by the Parties) of the receipt of a written request for such mediation by
the other Party, or if the dispute is not resolved within thirty (30) days (or
such other period of time mutually agreed upon by the Parties) of commencing
such mediation, or if the Party against which a claim has been asserted refuses
to attend such mediation, or the Parties are unable to agree upon a mediator,
then either Party may proceed to litigation, as provided for in Section 13.02(4),
other than with respect to a Payment Dispute (as defined below).

 

 

 

(3)           Disputes with respect to
terms of payment as set out in Article 4 (a “Payment Dispute”) shall be
settled by Arbitration as set forth below.

 

                                                Any party having a claim,
conflict or disagreement (“Claimant”) will forward a written notice
(“arbitration notice”) to the other Parties containing:

 

                                                A reasonably detailed
description of the claim, conflict or disagreement to be submitted to
arbitration; and

 

                                                The name, address and
profession of the Person proposed as an arbitrator.

 

                                                the other Parties will have
ten (10) days from the receipt of the arbitration notice to send the
Claimant a notice confirming their acceptance or refusal to submit the conflict
or disagreement to arbitration. If the Parties do not answer within that
deadline, they will be considered as having refused the arbitration process. If
the Parties accept to submit the dispute or disagreement to arbitration, they
must send along with their confirmation of acceptance a notice confirming the
suggested arbitrator or else, the name, address and profession of the Person
proposed as second arbitrator. If, while accepting the arbitration process, the
other Parties do not oppose the Claimant’s choice of arbitrator and do not
identify a second arbitrator in the above-mentioned delay, they will be
considered as having accepted the proposed arbitrator, who will act alone.  Failing the agreement on one arbitrator or
the default appointment of one arbitrator, the two arbitrators proposed by the
Parties shall select a third arbitrator as chairperson and the dispute shall be
heard by an arbitral panel of three arbitrators.

 

                                                The hearing of Parties in
dispute must take place within thirty (30) days following the receipt of the
arbitration notice.  The ruling of the
arbitrator must be rendered in writing and communicated to the Parties at the
latest twenty (20) days after the hearing of Parties in dispute. Any ruling
thus rendered is final and without possible appeal and, as soon as approved by
the Court, enforceable against the Parties. The arbitration costs are entirely
paid by the Party against whom the judgment is rendered unless the arbitrator
determine otherwise.

 

                                                For the purposes of any
arbitration in accordance with this section 10, the single arbitrator or, as applicable,
the arbitration tribunal has all the powers of court of original general
jurisdiction, except those exclusively reserved to such a tribunal.
Notwithstanding the above, the Parties retain their recourse to the common law
tribunals in matters of injunction.

 

(4)           Only in the event that a
dispute, other than a Payment Dispute, is not resolved through mediation, as
provided above, may the Parties resort to litigation.  Any dispute arising between the Parties
relating to this Agreement shall be subject to the exclusive jurisdiction and
venue of the courts sitting in New York, County, New York.  The Parties hereby waive any objection which
they may have now or hereafter to the laying of venue of proceedings in said courts
and to any claim that such proceedings have been brought in an inconvenient
forum, and further irrevocably agree that a judgment or order in any such
proceedings shall be conclusive and 

 

 

binding upon each of them and may be enforced in the courts of any other
jurisdiction.  Each party hereby submits
to the personal jurisdiction of the courts sitting in New York County for these
purposes.  In addition, any arbitration
conducted in relation to this Agreement shall be conducted in New York County.

 

ARTICLE 14 - GENERAL

 

14.01       Subcontract

 

The Distributor shall not delegate or subcontract any or all
of its obligations or responsibilities hereunder without the prior written
consent of DRAXIMAGE, at its sole discretion. Any permitted delegation or
subcontract of any of the Distributor’s obligations or responsibilities under
the Agreement shall not relieve the Distributor of any of its liability for any
breach or default by such delegate or subcontractor, and the Distributor shall
be liable therefor as if the Distributor had committed such breach or default
itself.

 

14.02       Notice

 

Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and shall be given by personal
delivery, by registered mail or by fax (with an original to follow by personal
delivery or registered mail) addressed to the recipient as follows:

 

	
  To:

  	
   

  	
  DRAXIMAGE LLC

  c/o
  Darby & Darby P.C.

  7 World Trade Center - 250 Greenwich Street

  New York, New York 

  10007-0042 U.S.A.

   

  
	
   

  	
   

  	
  Attention: 

  	
  ***

  
	
   

  	
   

  	
  Fax No.:

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  DRAXIS HEALTH INC.

  16751 Trans-Canada Highway

  Kirkland, Québec H9H 4J4

  
	
   

  	
   

  	
  Attention:

  	
  General Counsel and Secretary 

  
	
   

  	
   

  	
  Fax No.:

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  
	
  To:

  	
   

  	
  MEDI-PHYSICS INC. 

  3350
  North Ridge Avenue 

  Arlington Heights, Illinois 60004  

  
	
   

  	
   

  	
  Attention:

  	
  *** 

  
	
   

  	
   

  	
  Fax No.:

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  General Counsel  

  GE Healthcare — Medical Diagnostics 

  101 Carnegie Center

  Princeton, NJ 08540

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax No.:

  	
  ***

  

 

or to such other address, individual or fax number as may be designated by
notice given by either party to the other. 
Any demand, notice or other communication given by personal delivery
shall be conclusively deemed to have been given on the day of actual delivery
thereof and, if given by registered mail, on the 5th Business Day
following the deposit thereof in the mail and, if given by fax, on the day of
transmittal thereof if given during the normal business hours of the Recipient
and on the business day during which such normal business hours next occur if
not given during such hours on any day. 
If the party giving any demand, notice or other communication knows or
ought reasonably to know of any difficulties with the postal system which might
affect the delivery of mail, any such demand, notice or other communication
shall not be mailed but shall be given by personal delivery or by fax.

 

14.03       Further Assurances

 

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

 

14.04       Entire Agreement

 

(1)           This Agreement, and any
and all Schedules attached thereto, supersedes any prior agreements between the
Parties as to the subject matter of the Agreement, whether oral or in writing,
and contains the entire understanding between the Parties as to the subject
matter of the Agreement.

 

(2)           There are no
representations, warranties, terms, conditions, undertakings or collateral
agreements, express, implied or statutory, between the Parties other than as
set forth in this Agreement.  In the
event of any conflict between the provisions of this Agreement and the
provisions of any purchase order made by the Distributor hereunder, the
provisions of this Agreement will prevail.

 

14.05       Amendment and Waiver

 

No modification of or amendment to this Agreement will be
valid or binding unless set forth in writing and duly executed by both of the
Parties hereto and no waiver of any breach of any term or provision of this
Agreement will be effective or binding unless made in writing and signed by the
party purporting to give the same and, unless otherwise provided, will be
limited to the specific breach waived.

 

 

 

14.06       Benefit of the Agreement

 

This Agreement will enure to the benefit of and be binding
upon the respective successors and permitted assigns of the Parties hereto.

 

14.07       Assignment

 

***

 

14.08       Severability

 

Any provision of this Agreement that is held to be inoperative,
unenforceable or invalid in any jurisdiction shall be inoperative,
unenforceable or invalid in that jurisdiction without affecting any other
provision hereof in that jurisdiction or the operation, enforceability or
validity of that provision in any other jurisdiction, and to this end the
provisions hereof are declared to be severable.

 

14.09       Survival

 

The following provisions shall survive the expiration or termination of
this Agreement: Sections 3.08, 4.04, 5.01(5), 5.02(1), 6.01, 6.02, 8.01 to
8.05, 9.02, 11.02(6), 13.01 and 13.02.

 

14.10       Language

 

The Parties recognize having requested that the Agreement
and all documents pertaining hereto be drafted in the English language. Les parties reconnaissent avoir exigé que ce contrat et tous
les documents qui y sont relatifs soient rédigés en langue anglaise.

 

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

 

	
  DRAXIMAGE LLC

  
	
   

  	
   

  
	
  Per:

  	
  /s/***

  	
   

  
	
   

  	
  ***

  
	
   

  	
  ***

  
	
   

  	
   

  
	
  MEDI-PHYSICS INC.,

  
	
  doing business as GE HEALTHCARE

  
	
   

  	
   

  
	
  Per:

  	
  /s/***

  	
   

  
	
   

  	
  ***

  
	
   

  	
  ***

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