Document:

Exhibit 4.42

 

MANUFACTURE and SUPPLY AGREEMENT

 

THIS
AGREEMENT is effective from the 3rd day of
March, 2003

 

 

	
  BETWEEN:

  	
  BONE CARE INTERNATIONAL, INC., a corporation
  incorporated under the laws of Wisconsin, having its head office at 1600
  Aspen Commons, Middleton, Wisconsin, U.S.A., 53562, carrying on business as
  Bone Care (“Bone Care”);

  
	
   

  	
   

  
	
  AND:

  	
  DRAXIS PHARMA INC., a corporation
  incorporated under the laws of Canada having its principal place of business
  at 16751 Trans-Canada Highway, Kirkland, Quebec, H9H 4J4 (“Draxis”);

  

 

 

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

 

AND
WHEREAS the Parties have already agreed upon a
proposal with respect to the terms related to the technical transfer activities
necessary to transfer the Product to the Facility;

 

AND
WHEREAS the Parties now wish to confirm the terms
related to the ongoing commercial Formulation of the Product at the Facility;

 

NOW
THEREFORE in consideration of the mutual covenants and
agreements in this Agreement, Bone Care and Draxis agree with each other as
follows:

 

ARTICLE I

 

INTERPRETATION

 

1.1           Defined Terms.      As
used in this Agreement, the following terms have the following meanings unless
the context clearly requires otherwise:

 

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

 

1

 

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

 

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

 

“Agreement” means this Manufacture and
Supply Agreement and all schedules and instruments supplemental to or amending
or confirming it.

 

“Annual Forecasts” has the meaning ascribed
thereto in Section 4.1 (a) hereof.

 

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

 

“Batch” means a production batch of Product
as specified in Section 4.4 hereof.

 

“Business Day(s)” means any day(s) other
than Saturday, Sunday or a holiday generally recognized in Canada or the United
States.

 

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

 

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

 

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

 

“Deposit” has the meaning ascribed thereto
in Section 2.1(d) hereof.

 

“Facility” means Draxis’ facility located at
16751 Trans-Canada Highway, Kirkland, Quebec, Canada and, subject to Bone Care’s
prior written approval, such other facilities used by Draxis in the Formulation
of Product hereunder.

 

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

 

“Field Alert Reports” means any reported
information concerning:

 

2

 

(i)        any
incident that causes the drug product or its labeling to be mistaken for, or
applied to, another article; or

 

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

 

“Firm Zone” has the meaning ascribed thereto
in Section 4.2 (a) hereof.

 

“Force Majeure” has the meaning ascribed
thereto in Section 8.2(a) hereof.

 

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

 

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

 

“Good Manufacturing Practices” or “cGMP” means current Good Manufacturing
Practices and all other applicable laws, regulations and rules in the United
States and Canada related to the Product including, without limitation, as set
out in the guidelines published as the Good Manufacturing Practices for Drug
Manufacturers and Importers by the Health Products and Food Branch of Health
Canada, as amended from time to time, for the manufacture of pharmaceutical
products and the Current Good Manufacturing Practices as defined in United
States 21 CFR 210, 211 et. seq., as amended from time to time.  Manufacture of the Product must be in
compliance with the cGMP requirements of the country where the Product is to be
distributed.

 

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

 

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

 

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

 

“Incoterms 2000” means the International
Commercial Terms published by the International Chamber of Commerce, as amended
from time to time, codifying the contractual rules for the interpretation of
standardized commercial terms for transactions.

 

3

 

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

 

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

 

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

 

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

 

“Licences” means the licences issued to Bone
Care by the relevant Governmental Authority for the Formulation and manufacture
of the Product.

 

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

 

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

 

“Material Zone” has the meaning ascribed
thereto in Section 4.2(b) hereof.

 

“Minimum Guarantee” has the meaning ascribed
thereto in Section 2.1 (b) hereof.

 

“Open Zone” has the meaning ascribed thereto
in Section 4.2(c).

 

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

 

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

 

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

 

4

 

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

 

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

 

“Quality
Manual” means the Bone Care & Draxis. Hectorol® Injection Drug Product Quality
Manual, attached hereto in Schedule G, the content of which applies to
Hectorol® Injection
drug product manufactured by Draxis for Bone Care.

 

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

 

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

 

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

 

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

 

“Term” means the term of this Agreement as
defined in Article VII hereof.

 

1.2           Incorporation of Schedules.  Schedules and other documents attached or
referred to in this Agreement are an integral part of the Agreement, including
the following:

 

Schedule “A”       Description
of Product

Schedule “B”        Sample
Forecast

Schedule “C”        Product
Price

Schedule “D”        Specifications

Schedule “E”        Volume
Discount Plan

Schedule “F”        Capital
Plan

Schedule “G”        Quality
Manual

Schedule “H”        Production
Proposal

 

5

 

1.3           Accounting Terms.  Accounting terms not specifically defined in
this Agreement are to be construed in accordance with United States generally
accepted accounting principles.

 

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

 

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

 

ARTICLE II

 

MANUFACTURING AND SUPPLY

 

2.1           Agreement to Formulate Product.

 

(a)           In
consideration of the execution of Bone Care’s obligations hereunder, for the
duration of this Agreement, Draxis shall Formulate the Product in the Facility
for Bone Care and supply Product to Bone Care in accordance with the terms and
conditions set out in this Agreement, in quantities sufficient to satisfy Bone
Care’s requirements as set forth in the Quarterly Rolling Forecast provided to
Draxis.

 

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

 

 

6

 

***

 

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

 

(d)           ***

 

2.2           Terms of Supply.

 

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

 

(b)           Raw Materials and Supplies.  Draxis shall purchase from third parties such
quantities of Materials as Draxis requires to produce the Product to be sold to
Bone Care hereunder; provided, however, that Bone Care shall supply to Draxis
the Product Active Ingredient for use in Formulating the Product.  Draxis agrees that it shall not use such
Active Ingredient for any other purpose other than Formulating such
Product.  Draxis shall not sell the
Product to any other person, company or entity other than Bone Care. The cost
of shipping and delivery of the Active Ingredient to Draxis shall be solely
Bone Care’s obligation, provided, however, that Draxis shall take reasonable
measures to

 

7

 

ensure that
the Active Ingredient is stored at the Facility in accordance with such Active
Ingredient specifications, in accordance with the requirements set forth in
Paragraph G entitled “Environmental Requirements – Doxercalciferol Storage” at
page 6 of the Quality Manual, and in accordance with reasonable customary
industry practice.

 

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

 

2.3           Consideration.

 

(a)           Price of Product.  ***

 

(b)           Price Adjustments.  ***

 

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

 

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(d)           Volume Discount.  ***

 

(e)           Payment. 
***

 

(f)            Taxes. 
***

 

2.4           Costs of Changes.

 

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

 

2.5           Product Format.

 

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

 

2.6           Good Manufacturing Practices.

 

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

 

9

 

specifications
required in order to comply with Good Manufacturing Practices, and shall
cooperate in agreeing on the best means to comply with any new requirements.

 

2.7           Inspection.

 

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

 

2.8           Regulatory Matters.

 

(a)           Except
as otherwise provided in this Section 2.8, Bone Care shall be responsible
for the costs of any regulatory efforts required relating to the Formulation of
the Product including changes to the Specifications.  For greater certainty, by way of example and
without limitation, Bone Care shall register and obtain all required Licenses
and provide all necessary updates regarding the Product.  Draxis shall be responsible for, and bear any
cost associated with, maintaining the Facility in compliance with FDA cGMP
standards.

 

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

 

2.9           Accounting Audit.

 

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

 

10

 

only such
information as is necessary to determine if the adjustments made pursuant to
Sections 2.3 and 2.4 were accurate.  Such
accountant shall also agree to disclose to Draxis the results of its review.

 

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

 

ARTICLE III

 

QUALITY ASSURANCE

 

3.1           Testing.

 

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

 

(b)           In
the event that any delivery fails to conform to the Specifications as described
in Schedule “D”, or shall have been Formulated under conditions that do
not comply with applicable FDA requirements of the provisions of this
Agreement, Bone Care may reject such shipment by giving written notice to
Draxis within sixty (60) days after delivery of the Product specifying the manner
in which such delivery fails to meet the requirements thereof.  Draxis shall have thirty (30) days within
which to accept or reject Bone Care’s claims. 
Bone Care may withhold payment for any delivery of Product which fails
to meet the requirements hereof.  With
respect to claims accepted by Draxis, the invoice covering such shipment will
be revised to reflect that no payment is due on such rejected Product.

 

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

 

11

 

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

 

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

 

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

 

3.3           Stability Testing.  Subject to Section 2.4, Draxis shall
have the sole responsibility, at its expense, for conducting all required
ongoing Product stability studies. 
Stability testing shall be conducted on the first three (3) commercial
lots manufactured for each dosage strength and on at least one lot
annually.  Product stability samples
shall be obtained from appropriate lots at Draxis’ facility per Bone Care’s
written sampling plan or a sampling plan agreed upon in writing by the parties.

 

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

 

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

 

12

 

ARTICLE IV

 

PRODUCT SUPPLY AND QUANTITIES

 

4.1           Forecasts

 

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

 

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

 

4.2           Scheduling

 

(a)           Firm Zone. 
***

 

(b)           Material Zone. ***

 

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(c)           Open Zone. 
***

 

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

 

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

 

4.5           Inventory and Safety Stock.  Any inventory of Materials held by Draxis
beyond the requirements necessary for delivery of the Product forecasted in the
Firm Zone and Material Zone of the *** Rolling Forecast is the sole
responsibility of Draxis, unless such inventory is approved in writing by Bone
Care.  Bone Care shall advise Draxis of
the necessary quantity of safety stock of finished Product required to be held
by Draxis on behalf of Bone Care.  Draxis
shall not use any inventory of Active Ingredient for any purpose other than
formulation of the Product.

 

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

 

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ARTICLE V

 

DELIVERY AND TITLE TO PRODUCT

 

5.1           Delivery.

 

(a)           All
Product Formulated by Draxis hereunder shall be delivered to Bone Care upon
release of the Product by Draxis’ Quality Assurance Department in accordance
with the provisions of Article III and Section 4.3 of this Agreement.

 

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

 

(c)           ***

 

5.2           Replacement Product.

 

(a)           If
the Parties agree that any Product delivered hereunder fails in whole or in
part to conform to this Agreement, whether by reason of being of quality or
quantity not stipulated, or non-compliance with the Specifications (“Rejected
Product”), or if a dispute between the Parties in this regard has been resolved
pursuant to Section 3.1(c) in favor of Bone Care, or for any other reason
contemplated by Section 3.1, Draxis agrees to use Commercially Reasonable
Efforts to expeditiously deliver replacement Product for the Rejected Product (“Replacement
Product”) within one hundred twenty (120) days of the date Draxis accepts Bone
Care’s written notice of rejection or resolution of the dispute, whichever is
later.

 

(b)           If
the Parties agree that all or part of the Rejected Product may be reworked or
reclaimed, Bone Care shall return such Rejected Product to Draxis
forthwith.  The expense of such shipment
shall be borne by Draxis.

 

15

 

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

 

5.3           Right to Manufacture.

 

Draxis shall
not be required to Formulate or supply Product in accordance with the terms of
this Agreement as to which:

 

(i)            any Person claims the
Formulation or distribution infringes or otherwise violates any Law respecting
patents or trademarks unless Bone Care agrees to indemnify Draxis against any
such claim;  or

 

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

 

Each Party
shall promptly notify the other of any claim received by it that the
Formulation or distribution infringes or otherwise violates any Law respecting
patents or trademarks.  The Parties agree
to consult with one another to arrive at a mutually acceptable procedure to
contest any such claim and to set guidelines relating to the acceptable levels
of costs and expenses and reimbursement of same; provided, however, that
nothing contained herein shall prevent Draxis from ceasing to Formulate or
supply Product as required by this Agreement until such time as the
infringement claim is dealt with to its satisfaction unless and until Bone Care
agrees to fully indemnify Draxis against such claim and an acceptable proposal
for the reimbursement of Draxis’ costs and expenses is made by Bone Care to
Draxis.

 

5.4           Manufacturing Records.

 

Draxis shall
maintain true, accurate and complete records regarding the Formulation,
testing, and supply of Product as required by Law including, without
limitation, information concerning the machinery and equipment used to
Formulate the Product, stability information, Formulation information,
Product-in-process information and other such relevant and customary
information concerning the Product.

 

5.5           Insurance.  Bone Care shall be responsible for obtaining
appropriate and customary general liability, product liability and recall
insurance with respect to the Product. Draxis shall be responsible for
obtaining appropriate and customary general liability insurance with respect to
the Formulation of the Product.  Bone
Care shall be responsible for obtaining appropriate and customary general
liability insurance with

 

16

 

respect to
transfer of Active Ingredient to Draxis. 
Draxis shall be responsible for obtaining appropriate and customary
general liability insurance with respect to storage of Active Ingredient in the
Facility.

 

ARTICLE VI

 

WARRANTIES AND INDEMNITIES

 

6.1           Draxis Warranties.  Draxis warrants and covenants that:

 

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

 

(b)           all
quantities of Product supplied to Bone Care hereunder shall be marked by Batch
and include expiration dates or otherwise in accordance with Bone Care’s
standard marking procedures;

 

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

 

(d)           all
Product Formulation will include in process and quality control testing to
guarantee product quality, acceptability and compliance with Specifications and
FDA cGMP.

 

The foregoing
representations, warranties and covenants shall survive the execution and
delivery of this Agreement and shall continue in full force and effect for the
benefit of Bone Care.  Such
representations, warranties and covenants are in addition to and not in substitution
for any representations and warranties made by Draxis to Bone Care or its
assignee pursuant to this Agreement or any other agreement between Bone Care
and Draxis or its assignee.

 

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

 

(a)           it
shall obtain and maintain all necessary permits, registrations and Licences
required for it to perform its obligations to Draxis under this Agreement
including, without limitation, submitting all annual periodic reports to the
relevant Governmental Authorities with respect to the Product;

 

(b)           it
shall provide all information necessary for Draxis to Formulate the Product in
accordance with the Specifications and all applicable Laws including, without
limitation, FDA cGMP; and shall make its employees available to respond to
questions concerning such information;

 

17

 

(c)           it
shall ensure that Draxis is at all times during the term of the Agreement in
possession of sufficient amounts of Active Ingredient for Draxis to Formulate the
Product in accordance with the Specifications and all applicable Laws
including, without limitation, FDA cGMP ;

 

(d)           it
shall not request changes to the Specifications that are technically unfeasible
and/or materially burdensome to Draxis;

 

(e)           it
shall take reasonable and customary steps to ensure that the Active Ingredient
supplied to Draxis pursuant to the terms of the Agreement comply with the
Specifications and all applicable Laws including, without limitation, FDA cGMP;
and

 

(f)            it
shall ensure that all packaging and labeling requirements for the Product are
in accordance with applicable Law.

 

The foregoing
representations, warranties and covenants shall survive the execution and
delivery of this Agreement and shall continue in full force and effect for the
benefit of Draxis.  Such representations,
warranties and covenants are in addition to and not in substitution for any
representations and warranties made by Bone Care to Draxis or its assignee
pursuant to this Agreement or any other agreement between Bone Care and Draxis
or its assignee.

 

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

 

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

 

(a)           the
use, manufacture, marketing, sale and/or distribution of any or all of the
Product, unless such liability arises as a result of Draxis’ negligent act or
omission, breach of warranty or failure to perform a covenant under this
Agreement;

 

(b)           the
infringement by Bone Care of the intellectual property rights of a third
person; or

 

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

 

6.5           Indemnity of Bone Care.  Subject to the limitations on liability
specified in Section 6.7, Draxis agrees to indemnify and hold harmless
Bone Care for any and all

 

18

 

Losses
associated with the actions of Draxis and/or its Affiliates, agents or
representatives arising out of or resulting from:

 

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

 

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

 

6.6           Indemnity Proceedings.

 

(a)           Any
Indemnitee seeking indemnification under this Agreement (the “Indemnified Party”)
shall forthwith notify the other Party (“Indemnitor”) of such matter in
writing.  If a claim by a third party is
made against an Indemnitee, and if the Indemnitee intends to seek indemnity
with respect thereto under this Agreement, the Indemnitee shall promptly (and
in any case within thirty (30) days of such claim being made) notify the
Indemnitor of such with reasonable particulars. 
The Indemnitor shall have thirty (30) days after receipt of such notice
to undertake, conduct and control, through counsel of their own choosing
(reasonably acceptable to Indemnitee) and at their own expense, the settlement
or defense thereof, and the Indemnitee shall cooperate with them in connection
therewith, except that with respect to settlements entered into by the
Indemnitor (i) the consent of the Indemnitee shall be required if the
settlement provides for equitable relief against the Indemnitee, which consent
shall not be unreasonably withheld or delayed; and (ii) the Indemnitor shall
obtain the release of the Indemnitee.  If
the Indemnitor undertakes, conducts and controls the settlement or defense of
such claim (i) they shall permit the Indemnitee to participate in such settlement
or defense through counsel chosen by the Indemnitee, provided that the fees and
expenses of such counsel shall be borne by the Indemnitee; and (ii) they shall
promptly reimburse the Indemnitee for the full amount of any loss resulting
from any claim and all related expenses (other than the fees and expenses of
counsel as aforesaid) incurred by the Indemnitee.  The Indemnitee shall not pay or settle any
claim so long as the Indemnitor is reasonably contesting any such claim in good
faith on a timely basis.  Notwithstanding
the two immediately preceding sentences, the Indemnitee shall have the right to
pay or settle any such claim, provided that in such event it shall waive any
right to indemnity therefor by the Indemnitor.

 

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

 

(c)           In
the event of any claim by a third party against an Indemnitee, the defense of
which is being undertaken and controlled by the Indemnitor, the Indemnitee will
use all reasonable efforts to make available to the Indemnitor those employees
whose assistance, testimony or presence is necessary to assist the Indemnitor
in evaluation and in defending any such claim; provided that the Indemnitor
shall be responsible for the expense associated with any employees made
available by the Indemnitee to the Indemnitor

 

19

 

hereunder,
which expense shall be equal to an amount to be mutually agreed upon per person
per hour or per day or each day or portion thereof that such employees are
assisting, and which shall not exceed the actual cost to the Indemnitee
associated with such employees.

 

6.7           Limitation of Liability.  ***

 

6.8           Limited Patent License.  Bone Care grants no licenses
to Draxis under Canadian patents owned by or licensed to Bone Care except to
the extent necessary to manufacture Product for Bone Care in accordance with
the specific terms of this Agreement. 
The license so granted shall be fully paid and nonexclusive and shall terminate
upon the termination of this Agreement. 
Subject to the terms of Section 8.8, Draxis shall have not have the
right to (i) assign any such license rights without the written consent of Bone
Care, (ii) manufacture Product for any party or for any purpose except as
provided expressly herein, or (iii) sublicense any licenses granted pursuant to
this paragraph.  Except as expressly
provided herein, Bone Care does not grant to Draxis a license, either express
or implied, to make, use, sell, offer for sale, or import products under any
intellectual property rights, including patent rights, owned by or licensed to
Bone Care.  Subject to the terms of this
Agreement including, without limitation, the terms of Section 2.1 (b)
hereof which set out the guaranteed percentage of annual aggregate Formulation
volumes of Product, Bone Care retains the right to sublicense any and all
rights under Canadian patents owns by or licensed to Bone Care to third
parties.

 

20

 

ARTICLE VII

 

TERM AND TERMINATION

 

7.1           Term of Agreement.

 

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

 

7.2           Termination of Agreement.

 

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

 

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

 

(c)           Following
termination of this Agreement, Bone Care will have access to any records and
Batch samples relating to the Formulation of the Product under this
Agreement.  Termination of this Agreement
shall not affect any obligation to pay money, indemnify, reimburse or maintain
confidentiality which either Party may have incurred during the term of this
Agreement.

 

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

 

(e)           Following
termination of this Agreement, Draxis shall return to Bone Care, in accordance
with the provisions of Section 5.1 hereof, any Materials, Active
Ingredient or equipment that were purchased, or provided, by Bone Care in
accordance with this Agreement for the Formulation of the Product.

 

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

 

21

 

ARTICLE VIII

 

MISCELLANEOUS

 

8.1           Relationship of the Parties.  The relationship between Draxis and Bone Care
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 representatives 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 Bone Care or Draxis may rely on or enforce any provision of this
Agreement.

 

8.2           Force Majeure.

 

(a)           Defined.  In this Agreement, “Force Majeure” means an
event or occurrence 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, arrests of people, act of war, civil
disturbances, rebellion or sabotage, severe breakage of or accident to
machinery, plant or equipment, pipeline or pipe failure, failure of fuel or
water supply or transportation, fire, flood, lightning, ice, epidemic,
explosion, defaults by suppliers not caused by the act or omission of the
Party, any delay or failure by a Governmental Authority to issue any relevant
permit or order not caused by the act or omission of the Party.

 

(b)           Notice; 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 except for payment obligations, 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 its 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.

 

Subject to Section 8.2(c) hereof, if Draxis is unable to supply
Bone Care with its requirements of Product by reason of Force Majeure, Force
Majeure shall excuse Draxis’ performance until the Force Majeure has ceased and
for a reasonable period of time thereafter, to allow Draxis to restore itself
to the position it was in with respect to the Formulation of Product
immediately prior to Force Majeure.  Within
thirty (30) days of notification by Draxis that it is able to resume the
necessary supply of the Product to Bone Care, Bone Care shall resume obtaining
its requirements of Product from Draxis pursuant to the terms of this
Agreement.  Draxis shall suffer no
penalty or incur any liability for its inability to perform hereunder by reason
of Force Majeure.

 

22

 

(c)           Termination.  If a Party’s failure to perform any of its
obligations of Force Majeure has continued for one hundred and twenty (120)
days, unless within such period the non-performing Party has begun to remedy
its inability to perform, the other Party may, if itself not in default under
the Agreement, terminate this Agreement by providing written notice 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.

 

8.3           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.

 

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

 

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

 

(b)           was
subsequently, lawfully and in good faith obtained by the receiving Party from
an independent third party without, to the best of the knowledge of the
receiving Party, a breach of any confidentiality obligations, as shown by
documentation sufficient to establish the third party as the source of the
information and not obtained by the third party from the disclosing Party; or

 

(c)           which
receiving Party can establish, by documented and competent evidence, was known
to that Party prior to the date of disclosure of such information by the
disclosing Party.

 

8.5           Notices.  Any notice or other communication made under
this Agreement (other than routine business communication) shall be in writing
and shall be properly given:  (i) when
delivered if sent by personal delivery; (ii) when transmitted if sent by
facsimile with confirmation of transmission; or (iii) three days after being
posted if sent by registered mail return receipt requested, addressed:

 

	
  (a)

  	
  if to
  Draxis, to it at:

  	
  Draxis
  Pharma Inc.

  
	
   

  	
   

  	
  16751 Trans- Canada Highway

  
	
   

  	
   

  	
  Kirkland, Quebec, Canada H9H 4J4

  
	
   

  	
   

  	
  Facsimile: (514) 694-3841

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: President

  

 

23

 

	
  (b)

  	
  if to Bone
  Care, to it at:

  	
  Bone Care
  International, Inc.

  
	
   

  	
   

  	
  Bone Care Centre

  
	
   

  	
   

  	
  1600 Aspen Commons

  
	
   

  	
   

  	
  Middleton, WI   53562

  
	
   

  	
   

  	
  Facsimile: (608) 662-0032

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:  Vice President,
  Finance

  

 

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

 

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

 

8.7           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.

 

8.8           Inurement; Assignment.  This Agreement is binding on and inures to
the benefit of each Party and its successors and permitted assigns, provided
that neither Bone Care nor Draxis shall assign or otherwise transfer any rights
under or interest in this Agreement without the other Party’s prior written
consent, such consent not to be unreasonably withheld.  Draxis may assign this Agreement to an
Affiliate provided all Formulation remains at the Facility, and Draxis
continues to guarantee the performance obligations of the Affiliate as and to the
extent of such obligations required by this Agreement.  Bone Care may also assign this Agreement to
an Affiliate provided such Affiliate is of comparable credit-worthiness as Bone
Care.

 

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

 

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

 

8.11         Incorporation of Schedules.  The schedules attached to this Agreement are
incorporated by reference herein and made a part hereof.  In the event of any inconsistency that may
exist or arise between the provisions of this Agreement and any provision of
the Quality Manual attached hereto in Schedule G and the Production
Proposal attached as Schedule H, the parties agree that the terms of this
Agreement shall control.

 

24

 

8.12         Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to that State’s conflict of laws principles.

 

8.13         Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and which
together shall constitute one and the same agreement.

 

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.

 

 

	
   

  	
  BONE CARE INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Robert
  A. Beckman

  	
   

  
	
   

  	
  Robert A. Beckman

  
	
   

  	
  Vice President, Finance and Chief

  
	
   

  	
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DRAXIS PHARMA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Jim A.
  H. Garner

  	
   

  
	
   

  	
  Jim A. H. Garner

  
	
   

  	
  President

  

 

25

SCHEDULE
“A”

 

DESCRIPTION
OF PRODUCT

 

	
  Product Name 

  	
   

  	
  SKU-NDC#

  	
   

  	
  Description

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hectorol® Injection

  (α-Hydroxyvitamin D2)

  	
   

  	
  64894-840-50

  	
   

  	
  2 mL ampule
  containing

  4.0 μg Doxercalciferol

  	
   

  

 

 

 

26

 

SCHEDULE “C”

 

PRODUCT PRICE

 

***

 

27

 

SCHEDULE “D”

 

Finished Product Specifications

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

 

***

 

Please note
that the method number listed above is a general reference to the latest
approved version of the method.

 

 

 

28

 

SCHEDULE “E”

 

Volume Discount Plan

 

***

 

29

 

SCHEDULE “F”

 

Capital Plan

 

***

*      These
requirements and quoted costs are based on the above noted assumptions and are
good faith estimates of the capital required for the Facility to Formulate the
Product.  ***

 

30Exhibit 4.43

 

August 25, 2004

 

 

BY
PERSONAL DELIVERY

 

Mr. Dan Brazier

316 Lori Avenue

Stouffville (Ontario)  L4A 6C2

 

Re:
Employment Agreement

 

Dear Dan:

 

By this letter we hereby
confirm that your employment agreement with Draxis Health Inc. dated April 27,
2004 (the “Employment Agreement”) is amended as follows:

 

•                  By deleting and replacing paragraphs
1 and 2 of Section 13 as follows:

 

If at the end of two
years of service (which period shall be deemed to commence as of July 1, 2003)
you determine, solely at your discretion, that the position of Senior Vice
President Corporate Development and Strategic Planning is not satisfactory for
you, during that window (which shall be deemed to be the period between June 1,
2005 to December 31, 2005) it is agreed between the parties that your
termination payment shall be the sum of $390,000 less any required deductions,
which sum represents the termination payment DRAXIS would have paid to you
following the Shire Transaction.

 

In addition, if your
employment is terminated without cause during the period commencing July 21,
2003 and ending December 31, 2005, your termination payment shall be equal to
two times your Base Salary at that date, less any required deductions.  In addition to said salary payment, DRAXIS
shall pay you the following amounts: (i) all outstanding vacation pay and any
earned but unpaid salary up to the date of such termination within two weeks of
the date of termination; (ii) reimburse you for any business expenses incurred
by you up to and including the date of such termination following provision by
you of applicable receipts; and (iii) ensure it has complied with all statutory
obligations imposed by the Ontario Employment
Standards Act.  This payment
shall be guaranteed and shall not be subject to set off or deduction as a
result of your obtaining alternate employment following such termination or
otherwise mitigating any damages arising from such termination.  In all other instances, the following
Termination Provisions shall prevail:

 

All of the other terms and conditions of your Employment
Agreement remain unchanged.  We would ask
that you confirm your acceptance of these modifications by signing the
duplicate of this letter.

 

 

If you have any questions concerning these
modifications, please do not hesitate to communicate with the undersigned.

 

Regards,

 

DRAXIS HEALTH INC.

 

 

Dr. Martin Barkin

President and Chief
Executive Officer

 

 

I hereby confirm having read the above mentioned
modifications to my employment agreement dated April 27, 2004 and hereby
confirm my acceptance of said modifications.

 

Signed this      
day of             ,
2004 at                    .

 

 

	
   

  	
   

  
	
  Dan
  Brazier

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