EXHIBIT 10.158

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION

Manufacturing and Supply Agreement

 

between  

Schering Aktiengesellschaft

13342 Berlin, Germany

  (hereinafter referred to as “Schering”) and  

Indevus Pharmaceuticals, Inc.

33 Hayden Avenue, Lexington, MA 02421, USA

  (hereinafter referred to as “Indevus”)   Schering and Indevus are sometimes
referred to herein individually as a “Party” and collectively as the “Parties”.

 

WHEREAS, Schering and Indevus have entered into the License Agreement
(hereinafter defined) regarding the development and commercialization of Product
(hereinafter defined) in the Field (hereinafter defined) in the US by Indevus;
and

WHEREAS, upon request of Indevus and subject to the terms of the License
Agreement (hereafter defined), Schering has initiated the development of a [*]);
and

WHEREAS, it is set forth in the License Agreement that the Parties will enter
into good faith negotiations about an agreement for the Manufacturing
(hereinafter defined) and supply of Finished Product as soon as practicable
after signing of the License Agreement consistent with the terms of Article 6 of
the License Agreement.

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

Article 1

Definitions

The following terms, when capitalized, shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined), when used in this Agreement:

1.1 “[*]” shall mean a Product [*] as generally described in Schedule 1.1.

 

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1.2 “[*]” shall mean a Product [*] as generally described in Schedule 1.2.

1.3 “Act” shall mean the United States Food, Drug, and Cosmetic Act of 1938, as
amended, and the rules and regulations promulgated thereunder, or any successor
act, as the same shall be in effect from time to time.

1.4 “Affiliate” shall mean, with respect to a Party, any person, corporation,
firm, joint venture or other entity which, directly or indirectly, through one
or more intermediates, controls, is controlled by or is under common control
with such Party. As used in this definition, “control” means possession of the
power to direct or cause the direction of the management and policies of an
entity, whether through the ownership of the outstanding voting securities or by
contract or otherwise.

1.5 “Agreement” shall mean this Manufacturing and Supply Agreement, including
any exhibits, schedules or attachments attached to this Agreement and any
amendments to any of the foregoing.

1.6 “[*]” shall mean a Product [*] as generally described in Schedule 1.6.

1.7 “Audit Disagreement” shall have the meaning set forth in Section 9.3.

1.8 “Batch” shall mean a specific quantity of Clinical Supplies or Finished
Product that is produced according to a single manufacturing order during the
same cycle of Manufacture.

1.9 “Business Day” shall mean any day that is not a Saturday, a Sunday, a day on
which the New York Stock Exchange is closed, or other day on which banks are
required or authorized by law to be closed in Berlin, Germany.

1.10 “CBE” shall mean “Change Being Effected” as defined in the Act.

1.11 “CFR” shall mean the US Code of Federal Regulations.

1.12 “Change of Control” shall mean that (i) a majority of the outstanding
voting securities of a Party becomes owned by one or more individuals or
entities that did not own a majority of the voting securities of such Party as
of the Effective Date; or (ii) the possession of the power to direct or cause
the direction of the management and policies of a Party, whether through
ownership of the outstanding voting securities or by contract or otherwise
becomes vested in one or more individuals or entities that did not possess such
power as of the Effective Date.

1.13 “Clinical Development” shall mean the conduct of studies of Product in
humans to assess the dosing, safety and/or efficacy of Product.

 

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1.14 “Clinical Supplies” shall mean supplies of Product and, if applicable,
placebo, to be used for the conduct of Development in the Territory.

1.15 “Commercial Forecast” shall have the meaning set forth in Section 4.1.

1.16 “Commercialization” and “Commercialize” shall refer to all activities
relating to the pre-marketing, marketing, distribution, import, sale and offer
for sale of a Product, and the process of Commercialization, respectively.

1.17 “Commercially Reasonable Efforts” shall mean the level of endeavor which a
company in the prescription pharmaceutical industry comparable in size to
Indevus or Schering, as applicable, and active in development and
commercialization of pharmaceutical compositions would ordinarily expend to
accomplish an important objective.

1.18 “Confidential Information” shall have the meaning set forth in
Section 15.1.

1.19 “Contract Quarter” shall mean any period of three (3) consecutive calendar
months commencing with the first day of any January, April, July, or October.

1.20 “Contract Year” shall mean the period commencing on the Effective Date and
ending on December 31, 2006, and each subsequent twelve (12) month period
thereafter during the Agreement Term and any renewal term hereof.

1.21 “Current Good Manufacturing Practices” or the letters “GMP” or “cGMP” means
current good manufacturing practice and standards as provided for (and as
amended from time to time) in (i) the Current Good Manufacturing Practice
Regulations of CFR Title 21, including those regulations set forth in 21 CFR
Parts 210 and 211, (ii) European Community Directive 2003/94/EC (Principles and
guidelines of good manufacturing practice in respect of medicinal products for
human use and investigational medicinal products for human use), and
(iii) applicable ICH Harmonised Tripartite Guidelines, and subject to any
arrangements, additions or clarifications agreed in writing from time to time
between the Parties in the Quality Assurance Agreement.

1.22 “Development” or “Develop” shall mean all activities, or the performance
thereof, relating to Pre-clinical Development and Clinical Development as are
customary for a company in the pharmaceutical industry as part of the process of
obtaining Regulatory Approval.

1.23 “Documentation” shall mean all required shipping documentation, including
bills of lading, and such certificates of analysis and conformance and other
appropriate and required documentation identifying the applicable Batch numbers,
indicating conformance of the shipment with the Specifications, the Quality
Assurance Agreement and all applicable Regulatory Standards.

 

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1.24 “DMF” shall mean a Drug Master File as defined in 21 CFR §314.420,
including all supplements and amendments thereto.

1.25 “Effective Date” shall mean the date when this Agreement has been executed
by authorized representatives of both Parties.

1.26 “FDA” shall mean the US Food and Drug Administration of the Department of
Health and Human Services, or any successor agency with responsibility for
regulating the development, manufacture and sale of human pharmaceutical
products in the US.

1.27 “Field” shall mean any use of a pharmaceutical composition to restore
testosterone concentrations to physiological levels (i) to treat hypogonadism in
men or (ii) to treat any other urological or endocrinological indication in men;
for the avoidance of doubt, [*] shall not be considered an “indication” within
the meaning of this definition.

1.28 “Final Packaging” shall mean the labeling and packaging (as defined in the
Act) of Finished Product, including product carton, package inserts, labels and
associated components accompanying and necessary for use or sale of the Clinical
Supplies or Finished Product in the Territory, as applicable.

1.29 “Finished Product” shall mean [*], provided that Regulatory Approval has
been granted or marketing authorization is being sought for such Product by
Indevus pursuant to a NDA, in either case, Packaged and labeled in a final form
ready for commercial sale and distribution in the Territory.

1.30 “Firm Order” shall have the meaning set forth in Section 4.2.

1.31 “First Commercial Sale” shall mean the date Indevus or an Affiliate or
Sublicensee of Indevus first sells, or otherwise disposes of, commercially, a
Finished Product pursuant to a Regulatory Approval in the Territory.

1.32 “GAAP” shall mean US generally accepted accounting principles.

1.33 “Improvements” shall mean any and all developments, improvements or
enhancements relating to Product including, without limitation, in the
manufacture, formulation, preparation, presentation, means of delivery or
administration, dosage, indication, use or methods of use or packaging.

1.34 “IND” shall mean an Investigational New Drug application filed with FDA
pursuant to 21 CFR 312.1 et seq., as such regulations may be amended from time
to time, the filing of which was or is necessary to commence clinical testing of
Product in the Territory.

1.35 “Initial Payment” shall have the meaning set forth in Section 8.2.2.

1.36“License Agreement” shall mean the License Agreement by and between the
Parties dated as of July 28, 2005.

 

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1.37 “Launch Period” shall mean the period commencing on the First Commercial
Sale and expiring on December 31 of the Year immediately following the Year in
which the First Commercial Sale occurred.

1.38 “Long-acting Testosterone Product” shall mean any pharmaceutical
composition formulated in [*], in each case other than Product introduced in the
Territory by Indevus or any Affiliate or Sublicensee of Indevus.

1.39 “Manufacture” or “Manufacturing” shall mean all operations required to
manufacture or have manufactured for supply to Indevus Clinical Supplies and
Finished Product hereunder including, but not limited to the manufacture,
preparation and processing of drug substance and drug product, filling and
finishing of Finished Product, and Final Packaging, testing, releasing,
handling, storage and Packing of Finished Product, or any step thereof, as the
case may be.

1.40 “NDA” shall mean a New Drug Application as defined in the Act filed with
the FDA, for marketing authorization of Products in the US, including any
supplements or amendments thereto.

1.41 “Net Sales” shall mean with respect to any Product, the gross amount
invoiced by Indevus or its Affiliates or Sublicensee from sales of Product in
the Territory, commencing upon the date of First Commercial Sale, less
deductions for: (a) transportation charges (freight, shipping and distribution),
including insurance actually paid for distribution of Product; (b) sales,
value-added and excise taxes, and other taxes, duties or surcharges paid or
allowed by a selling party and any other governmental charges imposed upon the
sale or use of Product; (c) any other fees paid to distributors, consignees or
agents in connection with the sale of Product; (d) allowances or credits to
customers, not in excess of the selling price of Product, on account of
governmental requirements, rejection, outdating or return of Product;
(e) rebates or premiums granted or allowed to customers in connection with the
sale of Product; (f) trade, quantity, or cash discounts, chargebacks or
retroactive price reductions granted in connection with the sale of Product; and
(g) write offs for bad debts. Net Sales shall be determined at the time such Net
Sales are recognized as revenue in accordance with GAAP by Indevus and all
accounting terms used shall be interpreted in accordance with GAAP.

For the purpose of calculating Indevus’ Net Sales, the Parties recognize that
(i) Indevus' customers may include parties in the chain of commerce who enter
into agreements with Indevus as to price even though legal title to Product does
not pass directly from Indevus to such customers, and even though payment for
such Product is not made by such customers to Indevus, and (ii) in such cases,
chargebacks paid by Indevus to or through a Third Party (such as a wholesaler)
can be deducted by Indevus from gross revenues in order to calculate Indevus'
Net Sales. Sales between Indevus and Affiliates or Sublicensees shall be
excluded from the computation of Net Sales, except where such entities are end
users in which case Net Sales shall include Net Sales to such entities;
provided, however, if such entities are using such Products solely for research
or clinical testing purposes, indigent or other public support programs, then
such sales between Indevus and Affiliates shall be excluded from the computation
of Net Sales.

 

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1.42 “Notional Net Sales Price” or “Notional NSP” shall mean, solely for the
purposes of Section 8.2 and 8.3, an estimate of the Net Sales price of Product
in the Territory at the time of determination, which shall be determined in
accordance with Section 8.2.1.

1.43 “Outside US Change Request” shall have the meaning set forth in
Section 11.1.

1.44 “Pack”, “Packed”, or “Packing” shall mean the operations which comprise the
packing and packaging of Clinical Supplies and Finished Product, as the case may
be, solely for the purpose of shipping such articles in accordance with the Act
and pursuant to this Agreement.

1.45 “Pre-clinical Development” shall mean all activities relating to the
planning and execution of non-human studies conducted in in vitro or in relevant
in vivo animal models directed towards obtaining Regulatory Approval of Product
in the Territory. This includes pre-clinical testing, pharmacokinetics,
toxicology, documentary and medical writing directly related to Pre-clinical
Development activities, and related regulatory affairs.

1.46 “Product” shall mean the pharmaceutical composition containing the
Substance in a [*].

1.47 ”Product Competition” shall be present commencing as of the first calendar
quarter (the “Triggering Quarter”) in which (a) [*] have a market share in the
Territory of [*] or greater of the [*] in such calendar quarter of (i) [*]; and
(ii) such [*], and (b) the [*] in the Territory has decreased by [*] or greater
[*]; provided, however, that Product Competition shall not be deemed to be
present for any calendar quarter after the Triggering Quarter if in such
calendar quarter Long-acting Testosterone Products do not have a market share in
the Territory of [*] or greater of the [*] of (i) [*] and (ii) [*].

1.48 “Quality Assurance Agreement” shall mean the quality assurance agreement
between the Parties in which the responsibilities concerning quality control and
quality assurance of Substance and Finished Product are set forth and which is
attached as Exhibit 1.48, as same may be amended from time to time by mutual
agreement of the Parties.

1.49“Regulatory Authority” shall mean any court, tribunal, arbitrator, agency,
commission, official or other instrumentality of any national, state, county,
city or other political subdivision, that performs a function for such political
subdivision similar to the function performed by the FDA for the US with regard
to the approval, licensing, registration or authorization to test, manufacture,
promote, market, distribute, use, store, import, transport or sell a product in
the defined territory or political subdivisions, or with respect to the approval
of pricing or reimbursement for such product.

 

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1.50 “Regulatory Approval” shall mean any approvals, product and/or
establishment licenses, registrations or authorizations of any Regulatory
Authority necessary for marketing Product in the Field in the Territory.

1.51 “Regulatory Standards” shall mean (i) obtaining and maintaining any and all
permits, licenses, filings and certifications required by the FDA or other
Regulatory Authorities, and compliance with the cGMPs of the FDA or other
Regulatory Authorities, applicable to any Manufacturing or Schering Facilities,
and (ii) any laws, rules, regulations and standards of any Regulatory Authority,
whether within or outside the Territory, that apply to any Manufacturing or
Schering Facilities.

1.52 “Schering Facilities” [*].

1.53 “SEC” shall mean the US Securities and Exchange Commission or any successor
agency.

1.54 “SKU” (Stock Keeping Unit) means a stocking unit comprised of one (1) box
containing one (1) unit of Finished Product or as otherwise agreed to by the
Parties.

1.55 “Specifications” shall mean those specifications that are, as of the
Effective Date, set forth in the IND and attached to the Quality Assurance
Agreement, as such specifications may be amended and set forth in the NDA. The
specifications shall be deemed amended effective upon the date such amended
specifications are set forth in the NDA and the amended specifications shall be
appended to the Quality Assurance Agreement; provided, however that a failure or
delay in effecting any such amendment to this Section 1.55 shall not affect the
revised meaning of this Section 1.55 as of the effective date of the amended
specifications.

1.56 “Steering Committee” shall mean the committee established by the Parties
pursuant to Section 5.1 of the License Agreement.

1.57 “Subcontractor” shall have the meaning set forth in Section 2.8.

1.58 “Sublicensee” shall mean a Third Party to whom Indevus has granted a
license or sublicense to develop, import, use, sell, offer for sale or otherwise
exploit Product in the Territory.

1.59 “Substance” shall mean testosterone undecanoate (TU).

1.60 “Superseded Finished Product” shall have the meaning set forth in
Section 4.1.2.

1.61 “Supply Price” shall have the meaning set forth in Section 8.1.

1.62 “Supply Team” shall have the meaning set forth in Section 7.1.

1.63“Territory” shall mean the US.

 

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1.64 “Third Party” shall mean any entity other than Schering or Indevus and
their respective Affiliates.

1.65 “US” shall mean the United States of America, including the District of
Columbia, and its territories, possessions, and commonwealths, including,
without limitation, the Commonwealth of Puerto Rico.

1.66 “US Change Request” shall have the meaning set forth in Section 11.2.

1.67 “[*]

1.68 “Year” shall mean a calendar year.

Defined terms used herein that are not defined in this Article 1 but are defined
in the License Agreement shall have the meanings ascribed to such terms in the
License Agreement. Where words and phrases are used herein in the singular, such
usage is intended to include the plural forms where appropriate to the context,
and vice versa. The words “including”, “includes” and “such as” are used in
their non-limiting sense and have the same meaning as “including without
limitation” and “including but not limited to”. References to Articles,
Sections, subsections, and clauses are to the same with all their subparts as
they appear in this Agreement.

Article 2

Manufacture and Supply

2.1 General Scope. During the term of this Agreement, and subject to the terms
and conditions set forth in this Agreement, Schering shall Manufacture and
supply or cause to have Manufactured and supplied by an Affiliate or a Third
Party (subject to Section 2.8) to Indevus or Indevus’ designee all of Indevus’
requirements of Clinical Supplies and Finished Product for Clinical Development
and Commercialization, respectively, of Product in the Field in the Territory,
and Indevus shall purchase from Schering, all of Indevus’ requirements of
Clinical Supplies and Finished Product for Clinical Development and
Commercialization, respectively, of Product in the Field in the Territory.

The following scenarios have to be distinguished:

 

(i) In case the FDA only grants Regulatory Approval for the [*] as Finished
Product, Schering will only supply Finished Product in the form of the [*].

 

(ii) In case the FDA only grants Regulatory Approval for the [*] as Finished
Product, Schering will only supply Finished Product in the form of the [*].

 

(iii) In case the FDA only grants Regulatory Approval for the [*] as Finished
Product, Schering will only supply Finished Product in the form of the [*].

 

(iv) In case the FDA grants Regulatory Approval for the [*] as Finished Product,
Schering will only supply Finished Product in the form of the [*].

 

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(v) In case the FDA grants Regulatory Approval for [*] as Finished Product and
the FDA approved prescribing information specifies a distinction between [*],
Schering will supply Finished Product in the form of the [*], as requested by
Indevus from time to time in accordance with the terms of this Agreement.

 

(vi) In case the FDA grants Regulatory Approval for [*] as Finished Product but
the FDA approved prescribing information does not specify a distinction between
[*], then Schering will supply Finished Product in the form of the [*] and,
subject to the following sentence, the [*] as requested by Indevus from time to
time in accordance with the terms of this Agreement. In the event Indevus
requests that Schering supply the [*] under the circumstances provided by this
subsection (vi), such supply will be subject to a minimum purchase obligation of
Indevus of the [*] corresponding to Finished Product from a [*] litre production
campaign per Year and an agreement of the Parties on the payment mechanism with
respect to the supply of such [*] following good faith negotiations.

2.2 Supply of Others. During the term of this Agreement, neither Schering nor
any of its Affiliates shall supply or otherwise make available Product for use
in the Field in the Territory for or on behalf of (or authorize or permit any
Third Party to make Product for or on behalf of) any person or entity other than
Indevus, Indevus’ Affiliates and Sublicensees, provided that this Section 2.2
shall not prohibit Schering from supplying Product for use in the Territory as
set forth in Section 2.5(ii) of the License Agreement.

2.3 DMF. With respect to the DMFs for Substance and Product, Section 3.5 of the
License Agreement is hereby incorporated by reference, as if stated in its
entirety, herein. Schering shall keep current any such DMFs.

2.4 Analytical Technology Transfer. Schering shall, on one instance only,
provide copies or grant access to all necessary documentation and support to
enable successful transfer of analytical test methods to Indevus and/or its
designees.

2.5 Effect of [*]. As contemplated by Section 6.5 of the License Agreement, in
the event of [*], Schering shall have the right to terminate this Agreement on
not less than [*] prior written notice to Indevus and provided that Schering has
to enable the technology transfer of the manufacturing process (including any
required license to intellectual property and know-how) to an alternate
manufacturer of Finished Product designated by Indevus, in accordance with
Section 2.6. In the event of such termination of this Agreement, commencing as
of the effective date of such termination through the expiration of the [*] (as
defined in the License Agreement), in consideration of such technology transfer
and any such required license, Indevus shall pay Schering, at Indevus’
discretion, either (i) reimbursement of the reasonable costs incurred by
Schering for the technology transfer plus a royalty equal to [*] of Net Sales or
(ii) a royalty equal to [*] of Net Sales. In the event of any inconsistency
between the terms of this Section 2.5 and Section 6.5 of the License Agreement,
the terms of this Section 2.5 shall control.

 

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2.6 Technology Transfer Obligations. In addition to the obligations set forth in
Section 2.4, Schering shall, on one instance only, pursuant to Schering’s
obligations to enable the technology transfer as set forth in Sections 2.4, 2.5
or 4.5, as applicable:

2.6.1 provide copies or grant access to Indevus and/or its designees, including
analytical laboratories and the alternate manufacturer (at Indevus’ request)
with the then most current version of all materials, documents describing
intellectual property and know-how, regulatory filings, reagents, expertise,
equipment, data, and other information necessary to Manufacture the Product;

2.6.2 provide to Indevus and/or its designees, including analytical laboratories
and the alternate manufacturer (at Indevus’ request) copies or grant access to
the relevant documentation constituting the required material support, including
specifications as to materials to be used and control methods;

2.6.3 assist Indevus and/or its designees, including analytical laboratories and
the alternate manufacturer (at Indevus’ request) with the working up and use of
the technology and with the training of the alternate manufacturer’s personnel
to the extent reasonably necessary in the Manufacture of Product by the
alternate manufacturer and/or analytical laboratory up to an effort equivalent
of three (3) man months. In this regard, Schering will receive Indevus’ and/or
the alternate manufacturer’s and/or analytical laboratory’s staff, as
applicable, in its premises for certain periods, the term of which will be
agreed by the Parties; and

2.6.4 comply with such other obligations and responsibilities as are necessary
to fully enable Indevus or such alternate manufacturer to undertake the
Manufacturing and Packaging of Finished Product in accordance with the
Specifications.

2.7 Quality Assurance Agreement. The responsibilities of the Parties concerning
the quality of Product shall be set forth in the Quality Assurance Agreement. In
the event the Quality Assurance Agreement contains material provisions that
substantially differ from applicable Regulatory Standards, the Regulatory
Standards shall control. Indevus shall inform Schering about all material
revisions to the applicable Regulatory Standards applicable to Product in the
Territory.

2.8 Subcontractors. The identity and function of each person or entity to whom
Schering subcontracts or otherwise delegates all or any portion of its
obligations hereunder, whether Affiliates of Schering or Third Parties
(collectively, “Subcontractors”) shall be provided to the Supply Team. Schering
shall be entitled to appoint a Subcontractor for the full or partial
Manufacturing and Packing of Clinical Supplies and Finished Product without

 

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Indevus’ prior written consent only in those instances where Indevus would not
be required to notify the FDA of the respective subcontracting. Any
Subcontracting which requires notification of the FDA shall be subject to
Indevus’ prior written consent; such consent not to be withheld unreasonably. In
any event, (i) Schering shall maintain an oversight program whereby Schering
measures and evaluates each Subcontractor’s performance of any Manufacturing
activities; (ii) Schering may subcontract Manufacturing only to a Subcontractor
who, based on Schering’s good faith business judgment and observations, is not
subject to any conditions that might reasonably be expected to impede approval
of such Subcontractor’s site by the FDA, provided, however, that if such site is
the subject of any unresolved Section 483 comments by the FDA that might
reasonably affect Manufacture, then such determination shall be subject to
review by the Supply Team, or such Subcontracting will be effective only after a
successful pre-approval inspection of the Subcontractor’s site by the FDA; and
(iii) any Subcontractor who fails a pre-approval inspection by the FDA with
respect to Product shall be prohibited from performing any Manufacturing
hereunder unless and until all problems and issues identified by the FDA have
been corrected to the satisfaction of the Supply Team. Schering will inform the
Supply Team about such inspections and corrections. Notwithstanding the Supply
Team’s review or approval of any document or activity, Schering shall be and
remain responsible for the performance of any Subcontractor.

Article 3

Product Supply for Clinical Development

3.1 Clinical Supplies. Indevus has received from Schering [*] units of Clinical
Supplies. Indevus will provide to Schering its requirements for any additional
units of Clinical Supplies at least six (6) months prior to anticipated delivery
setting forth the quantity, amount of placebo (if any), the Final Packaging and
the delivery time. The details of delivery will be discussed and agreed upon by
the Parties separately.

3.2 Costs of Clinical Supplies. Schering shall bear the costs for Manufacture of
Clinical Supplies delivered to Indevus up to an amount of [*] units. In the
event Indevus requires Clinical Supplies in excess of [*] units in total such
additional Clinical Supplies shall be supplied to Indevus at the Notional Net
Sales Price, provided that if such additional Clinical Supplies are provided
prior to the Launch Period, then the price for such Clinical Supplies shall be
determined by the Supply Team.

Article 4

Forecasting and Ordering for Commercialization

4.1 Commercial Forecasts.

4.1.1Forecasts. Within five (5) Business Days after the Effective Date and
thereafter within the first five (5) Business Days of each Contract Quarter,
Indevus will provide to Schering a rolling non-binding (except as set forth in
Section 4.3) forecast for (a) prior to Regulatory Approval, six (6) consecutive
Contract

 

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Quarters and (b) commencing with the first Commercial Forecast submitted after
Regulatory Approval, eight (8) consecutive Calendar Quarters, (starting with the
first complete Contract Quarter following the date of the forecast – Q1) of the
estimated quantities of Finished Product in SKUs that Indevus intends to order
(the “Commercial Forecast”) as follows:

 

  •   With respect to the [*] as Finished Product, until Indevus notifies
Schering that it no longer requires the [*];

 

  •   with respect to the [*] as Finished Product, until Indevus notifies
Schering that it no longer requires the [*];

 

  •   with respect to the [*] as Finished Product, until Indevus notifies
Schering that it no longer requires the [*];

 

  •   with respect to [*] as Finished Product, specifying the number of [*],
until Indevus notifies Schering that it no longer requires [*].

For the first two (2) Contract Quarters, the Commercial Forecast shall be made
by month, and for the remaining Contract Quarters, the Commercial Forecast shall
be made by Contract Quarter.

4.1.2 General. The Commercial Forecasts shall be sent by e-mail and facsimile to
Schering’s supply manager. Except as otherwise specifically set forth herein,
all Commercial Forecasts made hereunder shall be made to assist Schering in
planning its production and shall not be Firm Orders or binding purchase orders,
unless as set forth in Section 4.2. Each Commercial Forecast provided by Indevus
shall supersede any previous Commercial Forecast. In the event Indevus notifies
Schering, as provided under Sub-section 4.1.1, that Indevus no longer requires a
particular Finished Product that had been specified in a previous Commercial
Forecast (a “Superseded Finished Product”), any previous Commercial Forecasts
with respect to such Superseded Finished Product shall be deemed void and of no
further force and effect and shall be superseded by the first Commercial
Forecast with respect to Finished Product provided after the date of such
notification by Indevus, which thereafter shall constitute the Commercial
Forecast; provided, however, that (a) in case a Commercial Forecast for the [*]
constitutes a Firm Order, (b) Schering has already started activities to
customize the [*] for Commercialization by Indevus in the Territory at the time
of notification by Indevus, and (c) the respective [*] cannot be used by
Schering outside the Territory, then such Firm Order with respect to the [*]
shall remain in force.

4.2 Firm Orders. Subject to the provisions of Section 4.1.2 and to the extent
consistent with the volume limitations set forth in Section 4.4, the [*] of each
Commercial Forecast submitted after Regulatory Approval, as updated

 

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each Contract Quarter, shall be a non-cancelable, legally binding commitment on
the part of Schering to supply, and on the part of Indevus to purchase, the
quantity of Finished Product as set forth in the Commercial Forecast, each such
[*] commitment being “Firm Orders”. The Parties acknowledge and agree that
Indevus may use validation batches of the [*], manufactured by Schering, to
satisfy all or any portion of Indevus’ requirements for launch quantities of the
[*] as Finished Product, subject to compliance with applicable laws and other
provisions of this Agreement. The Supply Team will discuss the timing of the
initiation of production of validation batches. Accordingly, with respect to
Commercial Forecasts submitted by Indevus prior to Regulatory Approval, only the
quantity, if any, of Finished Product forecasted for the first Contract Quarter
of each Commercial Forecast that exceeds the quantity of validation batches
supplied by Schering shall constitute a Firm Order. Subject to the foregoing
sentence, the minimum size of a Firm Order (consisting of one delivery) shall be
[*] of Finished Product or a Batch size, whichever is lower.

4.3 Purchase Orders. Indevus or its designee shall provide Schering with
purchase orders containing the information as listed in Schedule 4.3 of its
requirements for Finished Product, specifying the required delivery date in each
purchase order. Schering shall acknowledge and provide Indevus with a written
acceptance of each purchase order within five (5) Business Days following
Schering’s receipt thereof. Schering will use Commercially Reasonable Efforts to
comply with any demands for supply of Finished Product in excess of the amounts
of Finished Product set forth in Firm Orders.

4.4 Variation of Commercial Forecast. With every quarterly update of a
Commercial Forecast following Regulatory Approval, Indevus may increase or
decrease:

4.4.1 the forecast of Finished Product for the third Contract Quarter (Q3) of
the Commercial Forecast as that Contract Quarter rolls from Q3 to Q2 (becoming a
Firm Order) by [*] during the Launch Period and [*] for the period thereafter,
and

4.4.2 the forecast for the respective Contract Quarters [*] during the Launch
Period and four through eight (8) for each Year thereafter [*] or ([*], as
applicable) of the Commercial Forecast by [*] during the Launch Period and [*]
for each Year thereafter of the forecast in the Commercial Forecast of the
preceding Contract Quarter

4.4.3 Any variations beyond the limits set forth herein require the mutual
agreement of the Parties. No variation limits set forth in this Section 4.3
shall apply to Commercial Forecasts submitted by Indevus prior to Regulatory
Approval, provided that the forecast for launch quantities of Finished Product
does not exceed the quantities of validation batches supplied by Schering.

 

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4.5 Inability to Supply.

4.5.1 Notice of Inability to Supply. Schering shall immediately notify Indevus
in writing if and when Schering determines that it will be unable to supply
Finished Product under the terms of this Agreement. For purposes of this
Section 4.5, an “Inability to Supply” shall mean: Schering’s failure for any
reason, including force majeure reasons or otherwise, to supply Indevus with
quantities of Finished Product meeting the Specifications and applicable
Regulatory Standards, at least equal to (i) [*] of Finished Product quantities
specified in two (2) consecutive Firm Orders or (ii) [*] of Finished Product
quantities specified in one (1) Firm Order, provided that in (i) and
(ii) Schering has not cured the respective failure (if curable) within ninety
(90) days and further provided that the right to cure (ii) shall not be
applicable after such failure has occurred a second time in two (2) Contract
Years;

4.5.2 Consequences of Inability to Supply. In the case of an Inability to Supply
Schering shall remedy the Inability to Supply, fulfill purchase orders with such
quantities of Finished Product as are available, and resume supplying acceptable
Finished Product to Indevus as soon as is reasonably possible, and/or, upon
Indevus' request, establish and fully cooperate with Indevus to secure adequate
supplies of Finished Product from alternative sources, including locating
qualified third party manufacturers and sources of materials, assuming liability
for any excess manufacturing cost incurred by Indevus, and complying with the
technology transfer obligations set forth in Section 2.6. In the event of any
Inability to Supply, Indevus shall be relieved from its obligations under this
Agreement to purchase any minimum quantities of Finished Product identified in
any outstanding portions of Commercial Forecasts, Firm Orders or purchase orders
or subject to the minimum purchase obligation set forth in Section 8.3 (or any
corresponding obligations set forth in the License Agreement) and shall be
relieved of any further minimum purchase obligations or obligations to provide
Firm Orders unless and until such Inability to Supply is remedied. Except as set
forth in Section 17.5, nothing in this Section 4.5 shall limit any contractual
or other rights or remedies that may be available to Indevus on account of any
Inability to Supply under this Agreement.

Article 5

Packaging and Delivery,

5.1Final Packaging; Packing for Shipment. Indevus shall provide Schering with
specifications for the FDA approved labeling, artwork, drawings and any
additional Final Packaging which shall accompany Finished Product (and which
shall be used by Schering solely for the Manufacture and supply to Indevus or
Indevus’ designee of Finished Product pursuant to this Agreement) sufficient
time in advance to enable Schering to Manufacture Finished Product in due time
prior to the scheduled delivery to Indevus. Schering will establish, update as
necessary and implement processes and procedures designed to

 

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ensure that all Finished Product and Clinical Supplies are labeled and packaged
in accordance with Indevus’ artwork and labeling Specifications and in
accordance with Schering’s technical requirements and standards. Except with the
prior written approval of Indevus, Schering shall not include any other
packaging or inserts with, or affix any other labeling or artwork to, the
Finished Product. Schering will provide shipment preparation and Packing of
Clinical Supplies and Finished Product in accordance with Schering’s technical
requirements, Schering’s standards and with the Quality Assurance Agreement, as
applicable, with details to be discussed in the Supply Team. Indevus shall be
responsible for ensuring that all packaging, labels and labeling including, but
not limited to the package make-up, package inserts and other elements relating
to packaging, labels and labeling as well as all promotional material complies
with all laws and regulations applicable to such packaging, labels and labeling
in the Territory. The Batch coding of Finished Product will be effected in
accordance with the Batch labeling instructions defined by Schering.

5.2 Delivery to Indevus. Schering agrees to deliver Clinical Supplies and
Finished Product [*] Schering Facility to a carrier designated by Indevus at the
delivery dates set forth in the respective purchase order, provided that such
delivery date is at least ninety (90) days and not greater than one hundred
twenty (120) days from the date of such purchase order, subject to the
provisions of this Section 5.2 and Section 5.6. In the event Indevus requests
shipment or delivery that differs from this agreed upon schedule, Indevus will
notify Schering in writing as soon as practicable, but in no event less than two
(2) weeks in advance of the requested date of shipment by Schering and Schering
will use Commercially Reasonable Efforts to comply with Indevus’ request.
Schering will arrange for the delivery of Clinical Supplies or Finished Product
in a manner consistent with good commercial practices, applicable Regulatory
Standards, any agreed-upon shipping specifications and the Quality Assurance
Agreement, as applicable.

Unless otherwise agreed to in advance, deliveries made against Firm Orders will
not exceed the requested quantity of Finished Product by more than [*] nor be
less than [*]) of the requested quantity of Finished Product, provided that
these percentages may be adjusted if required in order to cure cumulative over-
or under- deliveries in the same Contract Year.

5.3 Delivery Times. Schering shall use Commercially Reasonable Efforts to meet
the delivery dates pursuant to Section 5.2 above.

5.4 Title and Risk of Loss. Title and risk of loss with respect to Clinical
Supplies and Finished Product furnished hereunder shall pass to Indevus upon
delivery by Schering of such Clinical Supplies and Finished Product cleared
according to Section 5.2.

5.5 Shelf Life. All Finished Product supplied to Indevus shall have the longest
remaining shelf life reasonably possible.

5.6Documentation; Release of Shipments. Schering will prepare and execute all
reasonably necessary shipping documents, including a Packing

 

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List, Certificate of Analysis, Certificate of Compliance and all other
Documentation required by the Quality Assurance Agreement. Unless otherwise
agreed in writing by the Parties, Schering shall not ship or invoice Indevus for
Finished Product until at least ten (10) Business Days after Schering has
provided Indevus with a Certificate of Analysis, a Certificate of Compliance and
any other release Documentation required by the Quality Assurance Agreement.

Article 6

Regulatory Matters, Recalls and Pharmacovigilance

6.1 General Regulatory Matters. In addition to the specific requirements of this
Article 6 and the Quality Assurance Agreement, Schering shall (i) be responsible
for obtaining and maintaining in good order all site licenses and current
registrations granted by the FDA and any other applicable Regulatory Authority
for the Manufacture of the Clinical Supplies and Finished Product at the
Schering Facility(ies) as contemplated hereunder and will make copies of such
registrations and all related documents available to Indevus and its designee
for inspection during audits upon Indevus’ reasonable request; and (ii) take all
steps necessary to be obtain and maintain FDA approval as a manufacturer of
Finished Product under Indevus’ NDA, and comply with regulations promulgated by
the FDA and any other applicable Regulatory Authority in connection with
Schering’s Manufacture of the Clinical Supplies and Finished Product hereunder.
In addition, Sections 3.4 and 3.5 of the License Agreement are hereby
incorporated by reference, as if stated in their entirety, herein.

6.2 Records. Schering will maintain complete and accurate records and
Documentation of all validation data, stability testing data, batch records,
quality control and testing relating to the Substance and the Finished Product
and the Manufacture, Final Packaging, labeling, testing and shipment thereof.
Records which include the information relating to the Manufacturing, Final
Packaging and quality operation for each lot of Substance and Finished Product
will be prepared by Schering at the time such operations occur. Schering will
prepare, maintain and retain such records in compliance with cGMP’s and other
applicable Regulatory Standards, the Specifications and the Quality Assurance
Agreement, for annual report requirements, and for periods meeting all
applicable regulations of the FDA and make such records and Documentation
available to Indevus upon Indevus’ reasonable request and in accordance with the
Quality Assurance Agreement. The records and Documentation shall be subject to
audit and inspection under this Article 6 and the Quality Assurance Agreement.

6.3 Regulatory Communications and Inspections. Schering shall take all
reasonable steps necessary for the Schering Facilities to obtain and maintain
approval by the FDA as a manufacturer of Finished Product under Indevus’ NDA for
Product. Schering will provide Indevus with reasonable advance notice of any
related FDA inspections (or within five (5) Business Days after any unannounced
contact, inspection or audit commences) and, at the conclusion of such
inspections, provide Indevus in writing with the results and outcome of such
inspection, an estimate of the timeline associated with

 

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correcting any deficiencies identified by such inspection, and copies of any
observations by the FDA (such as 483 comments) that would in any event become
publicly available, including pursuant to The Freedom of Information Act, 5
U.S.C. § 552, as amended, and the HHS Freedom of Information Regulations (45 CFR
Part 5). Indevus shall provide such assistance in connection with such
inspection as may be reasonably requested by Schering. Schering shall discuss
with the Supply Team any comments related to and affecting Schering’s
performance of any Manufacturing activities and shall be responsible for and
shall take appropriate actions to correct in a timely manner any deficiencies
identified by such inspection. Schering shall retain copies in accordance with
Regulatory Standards, and will also inform Indevus in writing as to any written
communications or correspondence between Schering and the FDA relating to
Schering’s activities under this Agreement within five (5) Business Days after
receiving or providing such communication or correspondence.

6.4 Recalls and Other Corrective Actions. The Parties shall advise each other as
soon as reasonably practicable but whenever possible no later than forty-eight
(48) hours in advance of any planned recall, market withdrawals, or other
corrective action related to Product intended to be conducted by either Party or
any of its Affiliates that implicates Product supplied by Schering to Indevus
and shall keep each other informed with respect to the status of any such
actions. Unless regulated otherwise herein, Indevus shall have responsibility
for and shall make all decisions relating to conducting any recall, market
withdrawals, or other corrective action related to Product in the Territory. The
Parties shall consult with each other with respect thereto and Indevus shall
consider in good faith any comments or suggestions of Schering, provided,
however, that nothing herein shall prohibit Indevus, from initiating or
conducting any recall or other corrective action mandated by the FDA or
applicable law. At Indevus’ request, Schering shall provide reasonable
assistance in conducting such recall, market withdrawal or other corrective
action, including, without limitation, providing all pertinent records that
Indevus may reasonably request to assist in effecting such action. Indevus shall
bear any and all costs of any such recall, market withdrawal or other corrective
action with respect to Product in the Territory, except that Schering shall bear
any and all such costs if such recall, market withdrawal or other corrective
action is attributable predominantly to the fault of Schering or results from a
negligent or reckless act or omission or intentional misconduct on the part of
Schering or its Affiliates or the failure of Substance or Product to be
manufactured or shipped by Schering or its Affiliates in compliance with all
applicable laws, rules and regulations, and the Specifications or any breach by
Schering of applicable laws, rules or regulations, or the provisions of this
Agreement.

6.5 Adverse Drug Experiences and Safety Reporting. With respect to adverse drug
experiences and safety reporting, the parties have entered into a
Pharmacovigilance Agreement effective as of August 1, 2006.

 

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Article 7

Supply Team and Escalation Procedure

7.1 Supply Team. Within thirty (30) days after the Effective Date, Schering and
Indevus will establish a team consisting of four (4) members, two
(2) representatives nominated by Schering and two (2) representatives by
Indevus, which team shall discuss and supervise all issues in the Manufacturing
and supply of Product (“Supply Team”). Unless otherwise agreed between the
Parties, the Supply Team will meet quarterly (in person, telephonically or via
videoconference). Either Party may replace any or all of its representatives in
and/or invite other representatives of such Party to attend meetings of the
Supply Team at any time upon written notice to the other Party. Regardless of
the number of individuals attending any Supply Team meeting, Schering and
Indevus shall have a single vote each.

7.2 Escalation Procedure. If any issues or disputes cannot be resolved within
the Supply Team, these issues shall be referred to the Steering Committee for
resolution. The Steering Committee shall decide on these issues. If an issue
escalated by the Supply Team cannot be resolved by the Steering Committee, it
shall be referred to Indevus’ CEO and Schering’s Head of Industrial Operations
and Environment for resolution. If the issue can nevertheless not be resolved it
shall be referred to dispute resolution pursuant to Section 17.11.

7.3 Limitation of Power. Notwithstanding the tasks of the Supply Team and the
Steering Committee herein (and whether or not issues or disputes are able to be
resolved through such process), each Party to this Agreement shall retain the
rights, remedies, powers and discretion granted to it hereunder and its
obligations hereunder, and neither the Supply Team nor the Steering Committee
shall have the power to amend or modify this Agreement, which may be amended or
modified only as provided in Section 17.1.

Article 8

Supply Price, Notional NSP, Payment Terms

8.1 Supply Price.

8.1.1 Subject to the provisions of this Section 8.1, the supply price for
Finished Product shall be [*] (the “Supply Price”, respectively) which shall
incorporate all fully-burdened costs and expenses incurred by Schering or its
designees associated with the Manufacture, procurement, testing, Final
Packaging, Packing, supply and delivery of Finished Product [*] Schering
Facility to a carrier designated by Indevus.

8.1.2 Except as set forth in the following sentence, in the event Schering
develops an Improvement pursuant to Section 6.8.2 of the License Agreement and
Indevus Commercializes such Improvement in the Field in the Territory, then the
Supply Price for the Finished Product of such Improvement shall be
proportionally adjusted to reflect such increased or decreased costs and
expenses.

 

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For the avoidance of doubt, the Supply Price shall remain unchanged in case
Indevus Commercializes (i) an Improvement pursuant to Section 6.8.1 of the
License Agreement and/or (ii) [*].

8.2 Payment Mechanism. With respect to the payment of the Supply Price the
following mechanism shall apply:

8.2.1 Determination of Notional NSP. Indevus shall determine the Notional NSP
(i) for the Launch Period, based on the estimated Net Sales price, at least four
(4) weeks prior to the first delivery and (ii) subsequent to the Launch Period,
by reference to the average Net Sales price of Finished Product in the Territory
as evidenced by the last four reports provided under Section 9.1 (or such lesser
number of reports as have actually been produced as of the date of any
particular determination) and shall provide the Notional NSP to the Steering
Committee.

8.2.2 Initial Payment. Within sixty (60) days after the later of Indevus’
receipt of Finished Product or the related Documentation, Indevus shall pay
Schering an amount equal to the applicable percentage of the Supply Price set
forth in Schedule 8.2.2 which amount shall be calculated, for purposes of this
Section 8.2.2, based on the Notional NSP determined under Section 8.2.1 (the
“Initial Payment”). During the Launch Period the Initial Payment shall be due
ninety (90) days after the later of Indevus’ receipt of Finished Product or the
related Documentation.

8.2.3 Adjustment. Within sixty (60) days after the end of each Contract Quarter
(commencing with the first complete Contract Quarter ending after the date of
First Commercial Sale), Indevus shall calculate and pay Schering the difference
between the Supply Price payable for such Contract Quarter and the Initial
Payment. Such calculation may be included in the report provided for under
Section 9.1. In the event that for any Contract Quarter the Initial Payment
exceeds the Supply Price payable for such Contract Quarter, Indevus will offset
such excess amount from the next Initial Payment due from Indevus hereunder.

8.3Minimum Purchase Obligation. As contemplated by Section 6.7 of the License
Agreement, for the period commencing after the second Royalty Year (as defined
in the License Agreement) and expiring on the earlier of the sixth anniversary
of First Commercial Sale or the commencement of [*], Indevus shall either
(a) for each Royalty Year during such period, purchase from Schering at the
Supply Price, a minimum of [*] of the units of Finished Product that were
purchased in the second Royalty Year; or (b) if the actual quantity of Finished
Product purchased by Indevus for any such Royalty Year is less than such minimum
quantity, pay Schering a supply fee for such Royalty Year equal to the
difference, if any, between (i) the amount that would have been payable to
Schering if the [*] and (ii) the sum of (x) the [*] under Section 7.3.1 of the
License Agreement. In the event of any inconsistency between the provisions of
this Section 8.3 and the provisions of Section 6.7 of the License Agreement, the
provisions of this Section 8.3 shall control.

 

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Article 9

Accounting and Audit

9.1 Net Sales Reports. Within sixty (60) days following the end of each Contract
Quarter commencing with the first complete Contract Quarter ending after the
date of First Commercial Sale, Indevus shall submit to Schering a report
summarizing the Net Sales, the sales quantities of Product and the number of
distributed commercial samples (if any) during the relevant Contract Quarter,
the Supply Price payable for such Contract Quarter, and the difference between
such Supply Price and the Initial Payment under Section 8.2.2.

9.2 Records and Auditing. Indevus shall maintain complete and accurate records
which are relevant to payments under this Agreement and, upon the written
request of Schering with at least ten (10) Business Days’ notice, Indevus shall
permit an independent certified public accounting firm of internationally
recognized standing selected by Schering and consented to by Indevus, to have
access to such records during reasonable business hours for any Contract Year
ending not more than three (3) full Years prior to the date of such request for
examination at Schering’s expense and not more often than once each Year, for
the sole purpose of verifying for Schering the correctness of calculations under
this Agreement. Schering shall bear its own costs related to such audit;
provided, that for any underpayments by Indevus in an amount greater than five
percent (5%) of the amounts owed in the aggregate by Indevus under this
Agreement and the License Agreement for the applicable period or periods being
examined, Indevus shall pay Schering the amount of underpayment, interest on the
amount of the underpayment as provided for in Section 10.2 from the time the
payment was due and the reasonable out-of-pocket costs of such accounting firm.
For any underpayments by Indevus in an amount less than five percent (5%) of the
amounts owed in the aggregate by Indevus for the applicable period or periods
being examined under this Section 9.2, Indevus shall pay Schering the amount of
such underpayment. Any overpayments by Indevus will, at Indevus’ option, be
refunded to Indevus or credited to future payments. The accounting firm shall
disclose to Schering only whether the reports are correct or incorrect and the
specific details concerning any discrepancies. Any records or accounting
information received from Indevus shall be confidential information solely for
the purpose of Section 9.2. Results of any such audit shall be provided to both
Parties and shall be considered Confidential Information as defined in
Section 13.1. Upon the expiration of twenty-four (24) months following the end
of any Contract Year the calculation of amounts owed for such Contract Year
shall be binding and conclusive upon Schering, and Indevus shall be released
from any liability or accountability with respect to payments for such Contract
Year.

9.3 Audit Disagreement. If there is a dispute between the Parties following any
audit pursuant to Section 9.2, either Party may refer the issue (an “Audit
Disagreement”) to an independent certified public accountant for

 

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resolution. In the event an Audit Disagreement is submitted for resolution by
either Party, the Parties shall comply with the following procedures:

 

  (i) The Party submitting the Audit Disagreement for resolution shall provide
written notice to the other that it is invoking the procedures of this
Section 9.3.

 

  (ii) Within thirty (30) Business Days of the giving of such notice, the
Parties shall jointly select a recognized international accounting firm to act
as an independent expert to resolve such Audit Disagreement.

 

  (iii) The Audit Disagreement submitted for resolution shall be described by
the Parties to the independent expert, which description may be in written or
oral form, within ten (10) days of the selection of such independent expert.

 

  (iv) The independent expert shall render a decision on the matter as soon as
possible.

 

  (v) The decision of the independent expert shall be final and binding unless
such Audit Disagreement involves alleged fraud, breach of this Agreement or
construction or interpretation of any of the terms and conditions hereof.

 

  (vi) All reasonable fees and expenses of the independent expert, including any
Third Party support staff, or other costs incurred with respect to carrying out
the procedures specified at the direction of the independent expert in
connection with such Audit Disagreement, shall be borne by each party in inverse
proportion to the disputed amounts awarded to the Party by the independent
expert through such decision. For example, Party A disputes US$ 100, the
independent expert awards Party A US$ 60: Party A must pay forty percent
(40%) and Party B sixty percent (60%) of the independent expert’s costs.

Article 10

Payment Terms

10.1 Payments. Payments due under this Agreement shall be due on such date as
specified in this Agreement and, in the event such date is not a Business Day,
then the next succeeding Business Day, and shall be made by wire transfer of
immediately available funds to a bank account designated by Schering to Indevus
in writing at least ten (10) Business Days before payment is due. Any payments
by Indevus under this Agreement shall be made in US Dollars.

10.2 Interest. Any failure by Indevus to make a payment within ten (10) Business
Days after the date when due, shall obligate Indevus to pay to Schering imputed
interest, the interest period commencing on the due date and ending on the
payment day, at a rate per annum equal to the Prime Rate as publicly announced
by Bank of America on [REUTERS_screen <USPRIME1>] plus [*], or the highest rate
allowed by law, whichever is lower.

 

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The interest calculation shall be based on the [act/360 computation] method. The
interest rate shall be adjusted whenever there is a change in the Prime Rate
quotation on REUTERS screen <USPRIME1> mentioned above. Interest shall be
compounded annually in arrears. Such interest shall be due and payable on the
date of underlying payment is made.

10.3 Taxes. Schering shall pay any and all taxes levied on account of all
payments it receives under this Agreement. If laws or regulations require that
taxes be withheld, Indevus will (a) deduct those taxes from the remittable
payment, (b) timely pay the taxes to the proper taxing authority and (c) send
confirmation of payment to Schering within thirty (30) days of payment to the
relevant taxing authority. Indevus agrees to make all lawful and reasonable
efforts to minimize such taxes to Schering. If Indevus is so required then
Schering and Indevus shall co-operate in all respects and take all reasonable
steps to lawfully reduce to the extent possible payment of any such withholding
taxes. Schering shall provide Indevus prior to any payments under this
Agreement, with all necessary forms or documentation required to claim the
exemption from such withholding taxes.

Article 11

Change Management

11.1 Changes Required by Schering. If, during the course of this Agreement,
Schering wishes or is required by a Regulatory Authority outside the Territory
to make a change to the Specifications, or the Manufacturing process, or the
site of Manufacture of Finished Product; or any other aspects with respect to
Finished Product, which may have an impact on the Regulatory Approval in the
Territory (“Outside US Change Request”); then, prior to the implementation of
any such Outside US Change Request, Schering shall validate the effect of the
change on the Product as required by the Act, provide Indevus detailed
information on the results of such validation, and:

11.1.1 if the change is an annual reportable change, i.e. does not require
approval of or advance notice to the FDA as determined under the Act, Schering
will provide to Indevus the necessary information in a mutually agreed upon
format for Indevus’ annual report;

11.1.2 if the change is a CBE change, a CBE 30 change or a change which requires
prior approval of the FDA (as determined under the Act), Schering shall submit
to Indevus in writing details of the Outside US Change Request before
implementation and the reasons therefore. Indevus shall review such Outside US
Change Request without undue delay and shall respond in writing whether it
consents to it or not. Indevus shall not unreasonably withhold or delay consent
to such Outside US Change Request, provided that if the change is required by a
Regulatory Authority outside the Territory Indevus shall give its consent. If
approved by Indevus, any such changes that require prior approval of the FDA
will not be implemented until such approval is granted by the FDA; and

 

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11.1.3 the determination of the level of reporting required for the US (Annual
Reportable, CBE 0, CBE 30, PAS) for (a) and (b) above shall be made by Schering
in accordance with applicable Regulatory Standards following confirmation or
consultation with the FDA, as appropriate.

11.2 Change Required by Indevus. If, during the course of this Agreement,
Indevus requests, or is required by the FDA to demand, a change to the
Specifications, or the Manufacturing process, or the site of Manufacture of the
Finished Product; or any other aspects with respect to the Finished Product,
(“US Change Request”); then Indevus shall submit to Schering in writing details
of the requested change. Schering shall review such US Change Request without
undue delay and provide Indevus with its likely effect on Schering’s production
systems together with the investments and/or the costs necessary to implement
such a change as well as any impact on the price. If the change is required by
the FDA the Parties will discuss the regulatory basis of such US Change Request.
If Schering believes that meetings should be held with the FDA regarding the
basis of such US Change Request, Indevus will not unreasonably withhold its
consent to do so and Schering will be included in all such meetings. Subject to
approval by Schering which shall not be unreasonably withheld or delayed,
Schering will use Commercially Reasonable Efforts to implement the US Change
Request without undue delay. If the change is not required by the FDA and
Indevus wishes to proceed, subject to approval by Schering, Schering will
implement such US Change Request.

11.3 Packaging and Labeling Changes. If, during the course of this Agreement,
Indevus wishes to change the secondary packaging, the labels or the labeling of
Finished Product, then Indevus shall submit to Schering all information required
therefore including, but not limited to art work and lay out, specifications for
modified packaging, labels and labeling, pharmacological information, usage
instructions and warnings to be applied which, for Finished Product, shall be
consistent with the FDA approved labeling, reasonably in advance of the delivery
date where the changes shall first be implemented. Schering shall review such
proposal in due course (but no more than one (1) month) and, in the event of
doubt, discuss with Indevus its possible effect(s) on Schering’s manufacturing
system including, if such changes are beyond Schering’s capabilities taking into
account the technical requirements, the impact on costs and timelines and the
possible impact on the price of the Finished Product.

11.4 Regulatory Filings of Changes. If a change relates to the DMF(s) Schering
will determine the requirements of the FDA for such a change following
consultation with Indevus. Schering will submit such change to the DMF(s).
Schering will provide to Indevus a revised authorization letter when a change is
made to the DMF(s) and Indevus will submit it to the FDA along with any other
necessary regulatory filings. Besides with respect to the DMF(s) Indevus shall
be responsible for any other filings required by the FDA, and Schering will
reasonably assist Indevus to meet the respective governmental and/or regulatory
requirements which, in Indevus’ judgment, must be fulfilled before
implementation of the respective change.

 

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11.5 Costs. Schering shall bear all costs arising from (a) an Outside US Change
Request; (b) a US Change Request that is required in order to Manufacture and
supply Finished Product as contemplated herein in compliance with the
Specifications or applicable Regulatory Standards or for any Schering Facility
(including that of a Subcontractor) to be approved by the FDA as a manufacturer
of Finished Product under Indevus’ NDA; and/or (c) changes that are primarily
intended to benefit Schering or a Schering Facility, including, but not limited
to process changes, site changes and supplier changes to improve operational
efficiency, effectiveness and risk-management. The costs arising from a change
request by Indevus pursuant to Section 11.3 shall be borne by Indevus. In case a
Product developed under Section 6.8.1 of the License Agreement becomes
available, the costs for implementation of changes pursuant to Section 11.3 to
be borne by Indevus shall not exceed the costs attributable to the respective
Firm Order amounts for the then current Finished Product plus [*] of any excess
costs.

11.6 Disputes on Changes. If the Parties cannot agree upon a change request
pursuant to Sections 11.1 to 11.3 above, the matter will be referred to the
Steering Committee.

Article 12

Non-Compliance

12.1 Inspection by Schering. Schering will analyze each lot of Substance,
Clinical Supplies and Finished Product for compliance with the Specifications.
Schering will send to Indevus a certificate of analysis and a certificate of
compliance (together with any other Documentation required under the Quality
Assurance Agreement) prior to each shipment of Clinical Supplies and/or Finished
Product and, unless otherwise agreed to by the Parties, will not ship Clinical
Supplies or Finished Product until at least ten (10) Business Days after Indevus
receives such Documentation.

12.2Notice of Failure to Meet Specifications. In the event Schering discovers
that any Batch or lot of Finished Product fails to conform to the Specifications
or applicable Regulatory Standards, Schering will notify Indevus within two
(2) Business Days, if such Batch or lot has been shipped to Indevus, of such
failure to meet the Specifications or applicable Regulatory Standards, and of
the nature thereof in detail, and will supply to Indevus such information
related thereto as Indevus may reasonably request, including the results of all
inside and outside laboratory testing and conclusions, if any. At its expense,
Schering shall investigate all such failures promptly, and cooperate with
Indevus in determining the cause for the failure and a corrective action to
prevent future failures. In case a Batch or lot of Substance or Finished Product
fails to conform to the Specifications or applicable Regulatory Standards which
has not been included in Finished Product shipped to Indevus but where it
reasonably could be expected to possibly have a negative impact on Indevus’
supply of Finished Product, the matter will be discussed in the Supply Team.

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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12.3 Non-Compliance. Within thirty (30) Business Days following the receipt by
Indevus or Indevus’ designee at the final distribution point in the Territory of
the later of (a) a shipment of Clinical Supplies or Finished Product; or (b) the
related Documentation, Indevus and/ or its designees shall have the opportunity
to inspect (or to have inspected) such shipment for transport damages, shortage
and, as far as reasonably practicable, any other defects and to perform quality
control and acceptance testing, as required under the Quality Assurance
Agreement, in order to determine whether such Clinical Supplies or Finished
Product conforms to the Specifications. Indevus shall notify Schering of any
such damages, shortage and other reasonably discernible defects discovered by
Indevus promptly following Indevus’ discovery thereof, but in any event within
such thirty (30) Business Day period.

12.4 Procedure as to Non-Compliant Goods.

12.4.1 Non-Compliant Clinical Supplies or Finished Product. Unless otherwise
requested by Schering pursuant to the following sentence, Indevus shall return
non-compliant Clinical Supplies or Finished Product to Schering. Schering may
decide, however, to have an agent inspect such goods for non-compliance while in
the possession of Indevus; Indevus shall then be responsible for storing the
non-compliant Clinical Supplies or Finished Product appropriately for a
reasonable period of time, not to exceed thirty (30) days. If returned to
Schering, the inspection shall be made on return to Schering. If Schering
accepts the Clinical Supplies or Finished Product as being non-compliant and the
Clinical Supplies or Finished Product has not yet been returned to Schering,
Schering shall decide whether such non-compliant Clinical Supplies or Finished
Product shall be returned to Schering or destroyed, subject to applicable laws
and regulations; the costs of such storage, return or destruction shall be borne
by Schering. At Indevus’ option and request, Schering will (i) supply
replacement Finished Product together with the relevant batch record and
certificate of analysis to Indevus at no additional charge within two (2) months
of notification of non-compliance pursuant to Section 12.3 above; (ii) refund
the Initial Payment applicable to the non-compliant Finished Product to Indevus,
or (iii) credit Indevus’ account in an amount equal to the Initial Payment for
the non-compliant Finished Product.

12.4.2 Non-Compliant Documents. Schering shall immediately upon receipt of
Indevus’ notification of non-compliance pursuant to Section 12.3, inspect the
relevant Documentation for non-compliance. If Schering accepts such
Documentation as being non-compliant, Schering shall attempt to remedy the
defect by providing to Indevus compliant Documentation as soon as reasonably
practical. If the defect can only be cured by sending new Clinical Supplies or
Finished Product together with the relevant new batch record, certificate of
analysis, and certificate of compliance, Schering will use Commercially
Reasonable Efforts to supply such replacement products to Indevus at no
additional charge within two (2) months of Indevus’ notification of
non-compliance pursuant to Section 12.3.

 

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12.4.3 Disputes. If there is a dispute as to whether any portion of any shipment
of Clinical Supplies or Finished Product or a batch record or certificate of
analysis is not in compliance, the Parties will attempt to reach a mutually
acceptable resolution of the dispute. If they are unable to do so after a
reasonable period of time (such period not to exceed thirty (30) days from the
date of original notification), such dispute shall be resolved by having an
independent, mutually acceptable, qualified third party examining the respective
Clinical Supplies or Finished Product or batch record or certificate of analysis
which shall be chosen by the Supply Team or the Steering Committee. If this
third party finds the Clinical Supplies or Finished Product or batch record or
certificate of analysis as being non-compliant, Section 12.4.1 Sentences 4 and 5
and Section 12.4.2 Sentences 2 and 3 shall apply. Any out-of-pocket costs
relating to the third party examination shall be borne by the Party which
claimed compliance or non-compliance incorrectly.

Article 13

Representations and Warranties

13.1 General Representations. Each Party hereby represents and warrants to the
other Party as follows:

13.1.1 Such Party is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated;

13.1.2 Such Party has the corporate power and authority and the legal right to
enter into this Agreement and to perform its obligations hereunder and the
execution, delivery and performance by such Party of this Agreement have been
duly authorized by all necessary corporate action. This Agreement has been duly
executed and delivered on behalf of such Party, and constitutes a legal, valid,
binding obligation, enforceable against such Party in accordance with its terms
except as enforceability may be limited by (A) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditor’s
rights generally, or (B) general principles of equity, whether considered in a
proceeding in equity or at law;

13.1.3 All necessary consents, approvals and authorizations of all governmental
authorities and other persons required to be obtained by such Party in
connection with this Agreement have been obtained; and

13.1.4 The execution and delivery of this Agreement and the performance of such
Party’s obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or

 

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regulations or any judgment, injunction, decree, determination or award
presently in effect having applicability to it, and (b) do not conflict with, or
constitute a default under, any agreement of such Party with any Third Party.

13.2 Additional Schering Representations and Warranties. Schering hereby
represents and warrants to Indevus that:

13.2.1 Clinical Supplies or Finished Product (as applicable) will have been
Manufactured in compliance with all applicable laws and regulations, including,
without limitation, the applicable provisions of the Act and regulations
thereunder relating to Manufacture, supply and Product hereunder, including,
without limitation, Current Good Manufacturing Practices, and in compliance with
the specific U.S. regulatory approvals regarding Clinical Supplies or Finished
Product and such quality assurance and quality control practices as are standard
in the US pharmaceutical manufacturing industry;

13.2.2 Clinical Supplies or Finished Product (as applicable) shall conform to
the then current Specifications at the time of delivery to carrier and shall
continue to conform thereto for the shelf-life approved by FDA;

13.2.3 Clinical Supplies or Finished Product (as applicable) will conform to all
covenants and obligations of Schering contained in this Agreement and the
Quality Assurance Agreement (as applicable), each as may be amended from time to
time by mutual agreement of the Parties;

13.2.4 neither Schering nor any of its Subcontractors or any of their respective
employees engaged in performing Schering’s obligations under this Agreement, is,
nor shall it or any of such individuals be at the time of performing any of the
activities to be performed by Schering hereunder, disqualified or debarred by
the FDA for any purpose pursuant to 21 U.S.C Section 355a; and

13.2.5 Clinical Supplies or Finished Product (as applicable) shall not be
manufactured in violation of any applicable federal, state or local laws or
regulations applicable to Product for use in the Territory, in either the
Territory or in the country of Manufacture.

13.3 Effect of Representations and Warranties. It is understood that if the
representations and warranties made by a Party under this Article 13 are not
true and accurate, and the other Party incurs damages, liabilities, costs or
other expenses as a result, the Party making such representations and warranties
shall indemnify and hold the other Party harmless from and against any such
damages, liabilities, costs or other expenses incurred as a result.

 

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13.4 Disclaimer. EXCEPT AS SET FORTH ABOVE, SCHERING MAKES NO OTHER WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, CONCERNING ITS PERFORMANCE HEREUNDER,
INCLUDING ANY WARRANTY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO CLINICAL SUPPLIES OR FINISHED PRODUCT.

Article 14

Indemnification

14.1 Schering. Schering shall indemnify, defend and hold harmless Indevus and
its directors, officers, employees, agents, successors and assigns (each a
“Indevus Indemnitee”) from and against any and all liabilities, damages, losses,
costs or expenses (including reasonable attorneys' and professional fees and
other expenses of litigation and/or arbitration) (a “Liability”) resulting from
a claim, suit or proceeding, including a product liability claim (“Claim”), made
or brought by a Third Party against an Indevus Indemnitee arising out of,
attributable to, or based on any claims alleging (i) any breach by Schering of
the representations and warranties set forth in Section 13.1 or 13.2 except to
the extent caused by the negligence or willful misconduct of Indevus; or
(ii) the negligence or willful misconduct by Schering or any designee of
Schering in exercising or performing any of Schering’s rights or obligations
under this Agreement.

14.2 Indevus. Indevus shall indemnify, defend and hold harmless Schering and its
directors, officers, employees, agents, successors and assigns (each a “Schering
Indemnitee”) from and against any and all liabilities, damages, losses, costs or
expenses (including reasonable attorneys' and professional fees and. other
expenses of litigation and/or arbitration) (a “Liability”) resulting from a
claim, suit or proceeding including a product liability claim (a “Claim”), made
or brought by a Third Party against a Schering Indemnitee, arising out of,
attributable to, or based on any claims alleging (i) any breach by Indevus of
the representations and warranties set forth in Section 13.1, or (ii) any
development, testing, importation, use, marketing, promotion, offer for sale,
sale or other distribution of any Product by Indevus or its Affiliates and
Sublicensee; except in each case to the extent caused by the negligence or
willful misconduct of Schering.

14.3 Procedure. In the event that any Indemnitee intends to claim
indemnification under this Article 14 it shall promptly notify the other Party
(the “Indemnitor”) in writing of such alleged Liability. Failure to provide
prompt notice shall not relieve any Party of the duty to defend or indemnify
unless such failure materially prejudices the defense of any matter. The
Indemnitor shall have the sole right to control the defense and settlement
thereof provided, however, that an Indemnitor shall not, without the written
consent of the other Party, as part of any settlement or compromise (i) admit to
liability on the part of the other Party; (ii) agree to an injunction against
the other Party; or (iii) settle any matter in a manner that separately
apportions fault to the other Party. The Parties further agree that as part of
the settlement of any indemnified Claim, unless otherwise agreed by the
Indemnitees, an Indemnifying Party shall use Commercially Reasonable Efforts to
obtain a full,

 

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complete and unconditional release from the claimant on behalf of the
Indemnitees. The Indemnitee shall cooperate with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability covered
by this Article 14, the Indemnitee shall have a reasonable opportunity to
participate in decision-making with respect to the strategy of such defense, and
the Parties shall reasonably cooperate with each other in connection with the
implementation thereof. The Indemnitee shall not, except at its own cost,
voluntarily make any payment or incur any expense with respect to any Claim
without the prior written consent of the Indemnitor, which the Indemnitor shall
not be required to give. Actions taken by the Indemnitor hereunder shall be
without prejudice to the Indemnitor’s right to contest the Indemnitee’s right to
indemnification and subject to refund in the event the Indemnitor is ultimately
held not to be obligated to indemnify the Indemnitee.

14.4 Survival. This Article 14 shall survive expiry or termination of this
Agreement for any reason.

Article 15

Confidentiality

15.1 Confidential Information. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing, the Parties agree that the receiving
Party shall keep confidential and shall not publish or otherwise disclose to any
Third Party or use for any purpose other than as provided for in this Agreement
any Know-how and other information and materials furnished to it by the other
Party pursuant to this Agreement, or any provisions of this Agreement that are
the subject of an effective order of the SEC granting confidential treatment
(collectively “Confidential Information”), except to the extent that it can be
established by the receiving Party that such Confidential Information:

15.1.1 is or becomes public or available to the general public otherwise than
through the act or default of the receiving Party;

15.1.2 is obtained by the receiving Party from a Third Party who is lawfully in
possession of such Confidential Information and is not subject to an obligation
of confidentiality or non-use owed to the disclosing Party or others;

15.1.3 is previously known to the receiving Party prior to disclosure to the
receiving Party by the disclosing Party under this Agreement, as shown by
written evidence, and is not obtained or derived directly or indirectly from the
disclosing Party;

15.1.4 is disclosed by the receiving Party pursuant to the requirement of law,
provided that the receiving Party has complied with the provisions set forth in
Section 15.3; or

15.1.5 is independently developed by the receiving Party without the use of or
reliance on any Confidential Information provided by the disclosing Party
hereunder, as shown by contemporaneous written evidence.

 

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15.2 Public Domain. For the purposes of this Agreement, specific information
disclosed as part of the Confidential Information shall not be deemed to be in
the public domain or in the prior possession of the receiving Party merely
because it is embraced by more general information in the public domain or by
more general information in the prior possession of the receiving Party.

15.3 Legal Disclosure. If the receiving Party becomes legally required to
disclose any Confidential Information provided by the disclosing Party, the
receiving Party will give the disclosing Party prompt notice of such fact so
that the disclosing Party may seek to obtain a protective order or other
appropriate remedy concerning such disclosure and/or waive compliance with the
non-disclosure provision of this Agreement. The receiving Party will reasonably
cooperate with the disclosing Party in connection with the disclosing Party’s
efforts to obtain any such order or other remedy. If any such order or other
remedy does not fully preclude disclosure or the disclosing Party waives such
compliance, the receiving Party will make such disclosure only to the extent
that such disclosure is legally required and will use its reasonable efforts to
have confidential treatment accorded to the disclosed Confidential Information.

15.4 Permitted Use and Disclosures. Each Party hereto may use or disclose
Confidential Information disclosed to it by the other Party to the extent such
use or disclosure is reasonably necessary in complying with applicable
governmental regulations or otherwise submitting information to Regulatory
Authorities, tax or other governmental authorities, conducting Pre-clinical
Development or Clinical Development, or otherwise exercising its rights
hereunder. If a Party is required to make any such disclosure of another Party's
Confidential Information, other than pursuant to a confidentiality agreement, it
will give reasonable advance notice to the latter Party of such disclosure and,
save to the extent inappropriate in the case of patent applications, will use
its reasonable efforts to secure confidential treatment of such Confidential
Information prior to its disclosure (whether through protective orders or
otherwise).

15.5 Public Disclosure. Except as otherwise required by law or set forth herein,
neither Party shall issue a press release or make any other public disclosure of
the terms of this Agreement without the prior approval of such press release or
public disclosure. Each Party shall submit any such press release or public
disclosure to the other Party to review and approve any such press release or
public disclosure, which approval shall not be unreasonably withheld or delayed.
If the receiving Party does not respond within forty-eight (48) hours from
submission, the press release or public disclosure shall be deemed approved. In
addition, if a public disclosure is required by law, including without
limitation in a filing with the SEC, the disclosing Party shall provide copies
of the disclosure forty-eight (48) hours prior to such filing or other
disclosure for the non-disclosing Party's prior review and comment, provided,
however that such right of review and comment shall only apply for

 

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the first time that specific information is to be disclosed, and shall not apply
to the subsequent disclosure of substantially similar information that has
previously been disclosed unless there have been material developments relating
to Product since the date of the previous disclosure.

15.6 Confidential Terms. Except as expressly provided herein, each Party agrees
not to disclose any terms of this Agreement to any Third Party without the
consent of the other Party which consent shall not be unreasonably withheld or
delayed; except that disclosures may be made as required by securities or other
applicable laws, or to actual or prospective investors or corporate partners, or
to a Party's accountants, attorneys and other professional advisors and that
Indevus may file this Agreement as an exhibit to any filing with the SEC and may
distribute any such filing in the ordinary course of its business, provided,
however, that to the maximum extent allowable by SEC rules and regulations, the
Parties shall be obligated to maintain the confidentiality obligations set forth
herein.

15.7 Publications. Each Party acknowledges the other Party's interest in
publishing its results related to Product to obtain recognition within the
scientific community and to advance the state of scientific knowledge. Each
Party also recognizes the mutual interest in obtaining valid patent protection
and in protecting business interests and trade secret information. Accordingly,
neither Party shall submit for written or oral publication any manuscript,
abstract or the like relating to Product without the prior approval of the other
Party. Any Party proposing to submit such publication shall deliver the proposed
publication or an outline of the oral disclosure at least thirty (30) Business
Days prior to planned submission or presentation (three (3) Business Days review
in the case of meeting abstracts or similar presentations which do not contain
Confidential Information of Schering). At the reasonable request of the other
Party, the submission of such publication may be delayed such that any issues of
patent protection may be addressed. In the absence of any such request, upon
expiration of the applicable period referred to in this Section 15.7 the
publishing Party shall be free to proceed with the publication or presentation.
If the other Party requests modifications to the publication, the publishing
Party shall edit such publication to prevent disclosure of trade secret or
proprietary business information prior to submission of the publication or
presentation. The contribution of each Party, if any, shall be noted in all
publications or presentations by acknowledgment or co-authorship, whichever is
appropriate.

 

  15.8 Survival. This Article 15 will survive expiry or termination of this
Agreement for any reason.

Article 16

Term and Termination

16.1Term. This Agreement shall commence as of the Effective Date and, unless
sooner terminated as provided herein, shall continue in effect until the expiry
of the [*] as defined in the License Agreement.

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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16.2 Termination for Cause. Failure of Indevus or Schering to comply with any of
the respective material obligations and conditions contained in this Agreement
shall entitle the other Party to give the Party in default notice requiring it
to cure such default. If such default is not cured within ninety (90) days after
receipt of such notice, the notifying Party shall be entitled (without prejudice
to any of its other rights conferred on it by the Agreement) to terminate this
Agreement by giving a notice to take effect immediately. Notwithstanding the
foregoing, in the event of a non-monetary default, if the default is not
reasonably capable of being cured within the ninety (90) day cure period by the
defaulting Party and such defaulting Party is making a good faith effort to cure
such default, the notifying Party may not terminate this Agreement, provided
however, that the notifying Party may terminate this Agreement if such default
is not cured within one hundred and eighty (180) days of such original notice of
default. The right of either Party to terminate this Agreement as herein above
provided shall not be affected in any way by its waiver of, or failure to take
action with respect to, any previous default.

16.3 Termination for Change of Control. Schering shall be entitled to terminate
the Agreement upon written notice to Indevus within ninety (90) days after a
Change of Control of Indevus if a direct competitor with respect to Product in
the Field in the Territory acquires control over Indevus.

16.4 Termination for Insolvency. If voluntary or involuntary proceedings by or
against a Party are instituted in bankruptcy or under any insolvency law, or a
receiver or custodian is appointed for such Party, or proceedings are instituted
by or against such Party for corporate reorganization or the dissolution of such
Party, which proceedings, if involuntary, shall not have been dismissed within
sixty (60) days after the date of filing, or if such Party makes an assignment
for the benefit of creditors, or substantially all of the assets of such Party
are seized or attached and not released within sixty (60) days thereafter, the
other Party may immediately terminate this Agreement effective upon notice of
such termination.

16.5 Indevus Rights Not Affected. All rights and licenses granted pursuant to
this Agreement are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the Bankruptcy Code licenses of rights to “intellectual
property” as defined under Section 101(35A) of the Bankruptcy Code. The Parties
agree that each Party shall retain and may fully exercise all of their
respective rights, remedies and elections under the Bankruptcy Code. The Parties
further agree that, in the event of the commencement of a bankruptcy or
reorganization case by or against a Party under the Bankruptcy Code, the other
Party shall be entitled to all applicable rights under Section 365 (including
365(n)) of the Bankruptcy Code. Upon rejection of this Agreement by a Party or a
trustee in bankruptcy for such Party, pursuant to Section 365(n), the other
Party may elect (i) to treat this Agreement as terminated by such rejection or
(ii) to retain its rights (including any right to enforce any exclusivity
provision of this Agreement) to intellectual property (including any embodiment
of such intellectual property) under this Agreement and under any agreement
supplementary to this Agreement for the duration of this Agreement and any
period for which this Agreement could have been

 

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extended by such other Party. Upon written request to the trustee in bankruptcy
or bankrupt Party, the trustee or Party, as applicable, shall (i) provide to the
other Party any intellectual property (including such embodiment) held by the
trustee or the bankrupt Party and shall provide to the other Party a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property and (ii) not
interfere with the rights of the other Party to such intellectual property as
provided in this Agreement or any agreement supplementary to this Agreement,
including any right to obtain such intellectual property (or such embodiment or
duplicates thereof) from a Third Party.

16.6 Effect of Termination and Expiration.

16.6.1 Accrued Rights and Obligations. Termination of this Agreement for any
reason shall not release any Party hereto from any liability which, at the time
of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude either Party
from pursuing any rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement. It is understood and agreed
that monetary damages may not be a sufficient remedy for any breach of this
Agreement and that the non-breaching Party may be entitled to injunctive relief
as a remedy for any such breach.

16.6.2 Survival. The rights and obligations set forth in this Agreement shall
extend beyond the term or termination of this Agreement only to the extent
expressly provided for herein, or to the extent that the survival of such rights
or obligations are necessary to permit their complete fulfillment or discharge.

Article 17

Miscellaneous

17.1 Entire Agreement. This Agreement, together with its Schedules (including
the portions of the License Agreement incorporated by reference herein)
constitutes the entire agreement, both written and oral, between the Parties
with respect to the subject matter hereof, and all prior agreements respecting
the subject matter hereof, either written or oral, expressed or implied, are
merged and canceled, and are null and void and of no effect. No amendment or
change hereof or addition hereto shall be effective or binding on either of the
Parties hereto unless reduced to writing and duly executed on behalf of both
Parties.

17.2 Assignment. This Agreement and any rights and obligations hereunder shall
not be assignable by either Party to any Third Party hereto without the written
consent of the other Party which consent shall not be unreasonably withheld or
delayed; except that either Party may assign this Agreement, without such
consent, to an entity that acquires all or substantially all of its business or
assets to which this Agreement pertains, whether by merger, reorganization,
acquisition, sale, or otherwise. This Agreement shall

 

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be binding upon and inure to the benefit of the Parties and their successors and
assigns. Any successor or permitted assignee shall assume all obligations of its
assignor under this Agreement. Any purported assignment not is accordance with
this Section 17.2 shall be null and void and of no legal effect.

17.3 Independent Contractors. The relationship of the Parties hereto is that of
independent contractors. The Parties hereto are not deemed to be agents,
partners or joint ventures of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.

17.4 Notices. All notices, requests and other communications hereunder shall be
in writing and shall be personally delivered or sent by telecopy or other
electronic facsimile transmission (and promptly confirmed by personal delivery,
registered or certified mail or overnight courier) or by registered or certified
mail, return receipt requested, postage prepaid, or sent by
internationally-recognized overnight courier, in each case to the respective
address specified below, or such other address as may be specified in writing to
the other Party hereto:

 

If to Schering:   If to Indevus:

Schering Aktiengesellschaft

13342 Berlin

Germany

Attn. Legal Department

Fax-No. +49-30-46814086

 

Indevus Pharmaceuticals, Inc.

33 Hayden Avenue, Lexington,

MA 02421

USA

Attn. Glenn L. Cooper, M.D.

Fax-No. +1-781-862-3859

17.5 Force Majeure. Neither Party shall lose any rights hereunder or be liable
to the other Party for damages or losses (except for payment obligations) on
account of failure of performance by the defaulting Party if the failure is
occasioned by war, strike, fire, Act of God, terrorism, earthquake, flood,
lockout, embargo, governmental acts or orders or restrictions or delays or
failures to act, failure of suppliers, or any other reason where failure to
perform is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the non-performing Party and the
non-performing Party has exerted Commercially Reasonable Efforts to overcome
such force majeure; provided, however, that in no event shall a Party be
required to settle any labor dispute or disturbance.

17.6 Severability. In the event that any provisions of this Agreement are
determined to be invalid or unenforceable, the remainder of the Agreement shall
remain in full force and effect without said provision unless the absence of the
invalidated provision(s) adversely affects the substantive rights of the
Parties. In such event the Parties shall, in good faith, negotiate a substitute
valid provision for any provision declared invalid or unenforceable, which shall
most nearly approximate the economic effect and intent of the invalid provision
that it can be reasonably assumed that the Parties would have entered into this
Agreement with the substituted provision. The same shall apply in case of an
omission.

 

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17.7 Waiver. It is agreed that no waiver by either Party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be deemed a
waiver as to any subsequent and/or similar breach or default.

17.8 Compliance with Laws. Each Party shall furnish to the other Party any
information requested or required by that Party during the term of this
Agreement or any extensions hereof to enable that Party to comply with the
requirements of any government agency.

17.9 Further Assurances. At any time or from time to time on and after the date
of this Agreement, either Party shall at the request of the other Party hereto
(i) deliver to the requesting Party any records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
transfer or license, and (iii) take or cause to be taken all such actions, as
the requesting Party may reasonably deem necessary in order for the requesting
Party to obtain the full benefits of this Agreement and the transactions
contemplated hereby.

17.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, US, without giving effect to
the choice of laws provisions thereof.

17.11 Dispute Resolution.

17.11.1 The Parties agree to attempt initially to solve all claims, disputes, or
controversies arising under, out of, or in connection with this Agreement (a
“Dispute”) by conducting good faith negotiations. Any Disputes which cannot be
resolved by good faith negotiation within sixty (60) days, shall be referred, by
written notice from either Party to the other, to the Chief Executive Officer of
Indevus and the Head of the Global Business Unit Gynecology & Andrology of
Schering. Such persons shall negotiate in good faith to achieve a resolution of
the Dispute referred to them within thirty (30) days after such notice is
received by the Party to whom the notice was sent. If such persons are unable to
settle the Dispute between them within thirty (30) days, they shall so report to
the Parties in writing. The Dispute shall then be referred to mediation as set
forth in the following subsection 17.11.2.

17.11.2 Upon the Parties receiving the report of the persons referred to in
subsection 17.11.1 that the Dispute referred to them pursuant to subsection
17.11.1 (a) has not been resolved, the Dispute may be referred to mediation by
written notice from either Party to the other. The mediation shall be conducted
pursuant to the mediation rules of the American Arbitration Association (“AAA”).
In the event Indevus is the claimant, the mediation shall be held in London,
England; in the event Schering is the claimant, the mediation shall be held in
New, York, New York, US. If the Parties have not reached a settlement within
sixty (60) days of the date of the notice of mediation, the Dispute may be
referred to arbitration pursuant to subsection 17.11.3.

 

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17.11.3 If, after the procedures set forth in subsections 17.11.1 and 17.11.2,
the Dispute has not been resolved, and if a Party decides to institute
arbitration proceedings, it shall give written notice to that effect to the
other Party. The Parties shall refrain from instituting the arbitration
proceedings for a period of sixty (60) days following such notice. During such
period, the Parties shall continue to make good faith efforts to amicably
resolve the dispute without arbitration. If the Parties have not reached a
settlement during that period the arbitration proceedings shall go forward and
be conducted in accordance with the then applicable commercial arbitration rules
of the AAA except where modified herein. Each such arbitration shall be
conducted by a panel of three arbitrators with appropriate experience in the
biotechnology or pharmaceutical industry: one arbitrator shall be appointed by
each of Schering and Indevus and the third arbitrator, who shall be the Chairman
of the tribunal, shall be appointed by the two Party-appointed arbitrators. In
the event Indevus is the claimant, the arbitration shall be held in London,
England; in the event Schering is the claimant, the arbitration shall be held in
New York, New York, US. The arbitrators shall have the authority to grant
specific performance. Any award so rendered shall be final and binding and
judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be. In no event shall a
demand for arbitration be made after the date when institution of a legal or
equitable proceeding based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. Each Party shall bear
its own costs and expenses incurred in connection with any arbitration
proceeding and the Parties shall equally share the costs of the mediation and
arbitration levied by the AAA. Any mediation or arbitration proceeding entered
into pursuant to this Section 17.11 shall be conducted in the English language.

17.12 Headings. The captions to the several Sections and Articles hereof are not
a part of this Agreement, but are included merely for convenience of reference
only and shall not affect its meaning or interpretation.

17.13 Counterparts. This Agreement may be executed in two counterparts, each of
which shall be deemed an original and which together shall constitute one
instrument.

IN WITNESS WHEREOF Schering and Indevus have executed this Agreement by their
respective duly authorized representatives.

 

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Schering Aktiengesellschaft

 

   Indevus Pharmaceuticals, Inc. Date    Date By:  

/s/ Klaus Bril

   By:  

/s/ Glenn L. Cooper, M.D.

Print Name:   Klaus Bril    Print Name:   Glenn L. Cooper, M.D. Title:   Head of
Portfolio Management
GBU Gynecology & Andrology    Title:   Chairman and Chief Executive Officer By:
 

/s/ Dr. Hans-Joachim Riedel

     Print Name:   Dr. Hans-Joachim Riedel      Title:   Head of Commercial
Cooperations     

 

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SCHEDULE 1.1

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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SCHEDULE 1.2

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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SCHEDULE 1.6

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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SCHEDULE 1.48

Quality Assurance Agreement

by and between

SCHERING AKTIENGESELLSCHAFT

Müllerstraße 178

13353 Berlin

Germany

(hereinafter referred to as “SCHERING”)

and

INDEVUS PHARMACEUTICALS, INC.

33 Hayden Avenue

Lexington, MA 02421

U.S.A.

(hereinafter referred to as “INDEVUS”)

 

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Preamble

This Quality Assurance Agreement (hereinafter “QAA”) effective as of _____, 2006
(the “Effective Date”) defines the conditions to be fulfilled by SCHERING and
INDEVUS in order to ensure that all aspects of the Manufacture of Substance and
Finished Product under the Manufacturing and Supply Agreement between the
Parties dated as of the Effective Date (the “MSA”) are carried out in accordance
with the Specifications and applicable DMF(s), Current Good Manufacturing
Practices and applicable Regulatory Standards, and established Testing Standards
and Manufacturing Description(s) (each as defined herein or in the MSA).

§ 1 Definitions

“Annual Product Review” shall mean an annual evaluation of the quality standards
of the Substance and Finished Product in order for the Parties to jointly
determine if changes in Specifications, manufacturing or testing procedures are
necessary.

“Executed Batch Record” shall mean production and control records prepared for
each batch of Finished Product produced and shall include complete information
relating to the production and control of each batch.

“Master Batch Record” shall mean written procedures for production and process
control designed to assure that Finished Product has the identity, strength,
quality, and purity they purport or are represented to possess and is used to
ensure uniformity from batch to batch.

“Manufacturing Descriptions” shall mean the written descriptions of
Manufacturing set forth in Appendix 2.

“Packaging Components” shall mean any material employed in the packaging,
including Final Packaging, of a medicinal product, excluding any outer packaging
used for transportation or shipment. Packaging components are referred to as
primary or secondary according to whether or not they are intended to be in
direct contact with the product.

“Starting Material” shall mean the Substance and any other material used in the
production of Finished Product, but excluding Packaging Components.

“Testing Standards” shall mean the written description of the testing methods as
specified in Appendix 1.

All capitalized terms not defined herein but defined in the MSA shall have the
same meanings as ascribed to them in the MSA.

 

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§ 2 Subject Matter of the QAA

The subject-matter of this QAA is to ensure that all aspects of the Manufacture
of Substance and Finished Product under the MSA are carried out in accordance
with the Specifications and applicable DMF(s), cGMP regulations and applicable
Regulatory Standards, and the established Testing Standards and Manufacturing
Description(s).

This QAA governs the rights, duties and responsibilities of SCHERING and INDEVUS
regarding the Manufacture of Substance and Finished Product.

The appendices mentioned in this QAA, and all documents to which reference is
made in the appendices shall become an integral part of this QAA.

SCHERING may comply with any and all obligations under this QAA through a
Subcontractor provided that SCHERING is entitled to subcontract the respective
activity to a Subcontractor pursuant to Section 2.8 of the MSA.

§ 3 Quality System; Validation

SCHERING confirms that it is maintaining (and shall continue to maintain) an
effective pharmaceutical quality system to ensure that the Substance and
Finished Product are Manufactured according to the Specifications and applicable
DMFs and with cGMP regulations and applicable Regulatory Standards.

SCHERING will validate all processes, methods, equipment, utilities, facilities
and computers used in the Manufacture, formulation, Final Packaging, storage,
testing, Packing and shipment of Finished Product in conformity with cGMP
regulations, especially US federal regulation 21CFR211.194(a)(2), and as
required by applicable Regulatory Standards so as to ensure that Manufacturing
is able to commence in accordance with such regulations and standards and in
conformity with the Specifications and applicable DMFs.

SCHERING declares that it is in possession of the Manufacturing authorization(s)
necessary to carry out Manufacture at the time of entering into this QAA.
SCHERING will ensure that this authorization is retained unconditionally during
the term of this QAA and the MSA and will prove such authorization to INDEVUS
when required by submitting relevant documentation to INDEVUS.

§ 4 Instructions for the Manufacture

SCHERING will Manufacture Substance and Finished Product in conformity with the
Specifications and applicable DMFs, with cGMP regulations and applicable
Regulatory Standards, with the Manufacturing Description(s) and with the Testing
Standards.

§ 5 Manufacture of Substance and Finished Product

Those employees of the Parties named as responsible persons for Manufacture,
quality assurance, quality control and Finished Product release as well as
employees

 

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named as contact partners in the logistics function are specified in Appendix 4.
Both Parties must be informed immediately in writing of any changes in the
fields of responsibility of the responsible persons and/or contact partner,
should these occur.

The pharmaceutical responsibilities of the Parties shall be as set out in
Appendix 5.

§ 5.1. Quality Control and Sampling

During Manufacture of Substance and Finished Product(s), SCHERING will draw
representative samples according to cGMP.

SCHERING will sample, store and maintain appropriate reserve samples (identified
by Batch number) (the “Reserve Samples”) of (a) Finished Product, (b) all
Substance used in the production of Finished Product, and (c) all key raw
materials used to Manufacture Substance and Finished Product, in accordance with
cGMPs and other US federal requirements including 21CFR211.170(b) and in each
case with respect to quantities determined by accepted statistical procedures
and stored under conditions and in the same immediate container-closure system
as defined in the Specifications and applicable DMFs.

The Reserve Samples shall also be visually inspected at least once a year for
evidence of deterioration, recording the results of such inspection, as required
by cGMP regulations, especially US federal regulation 21CFR211.170(b). Release
testing will be performed according to the Specifications and applicable DMFs
and to Testing Standards.

Reserve Samples of Starting Materials will be stored until at least one year
after the expiration date of the last Batch of the Finished Product produced
from them. Reserve Samples of every Batch of Finished Product shall be kept for
one year after the expiration date of the respective Batch and in sample
quantities of at least twice the quantity necessary for testing to determine
whether Substance in the Finished Product meets its established Specifications
as defined in the NDA and applicable DMFs, and as required by cGMP regulations,
especially US federal regulation 21CFR211.170(a).

SCHERING shall provide INDEVUS and any Regulatory Authority with reasonable
access to and portions of the Reserve Samples for testing and other purposes
upon reasonable request of INDEVUS.

§ 5.2. Batch Documentation

SCHERING will document the conduct of all the procedural steps stipulated in the
Manufacturing Description as well as all in-process controls in Batch-specific
records as customarily kept by SCHERING. SCHERING will provide INDEVUS with
timely notification of all significant deviations, notes to file, and other
deficiencies that may reasonably be expected to impact the quality of the
Finished Product, as well as all FDA correspondence regarding testing,
Manufacture, Final Packaging, or Packing of the Finished Product. SCHERING will
provide INDEVUS with a complete copy of

 

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the Executed Batch Records of the first [*] Batches of Finished Product. An
English version of the Master Batch Record for Finished Product will be provided
to INDEVUS. Such records will be provided to INDEVUS prior to shipment of such
Batches in accordance with the provisions of Section 5.6 of the MSA.

The records must be accompanied by a Certificate of Compliance (COC) and a
Certificate of Analysis (COA) for the Substance used in Finished Product and the
Finished Product. Deviation and Out of Specification (OOS) reports will be
included if applicable, which detail in writing any problems and deviations
within the Manufacturing process and analytical testing. The accompanying COC,
COA, and deviation and OOS reports will be provided in English.

All additional Batches will be accompanied by some pages of the Executed Batch
Record mutually agreed between the Parties, the COA and the COC for Substance
used in Finished Product and for Finished Product, and, if applicable, deviation
and OOS reports.

SCHERING will retain the complete Batch documentation for at least [*] after the
expiration date of the respective Batch as required by cGMP regulations,
especially US federal regulation 21CFR211.180. SCHERING will provide these
records to INDEVUS on reasonable request.

SCHERING will present Manufacturing and testing documentation to Regulatory
Authorities upon request as appropriate and in the manner required by cGMP
regulations, especially US federal regulation 21CFR211.180(c) and (d). To the
extent not covered by this Section 5.2, the provisions of Section 6.2 of the MSA
shall also govern any records and Documentation.

§ 5.3. Final Packaging; Packing for Shipment

Final Packaging and Packing for shipment shall be governed by Section 5.1 of the
MSA which is hereby incorporated by reference herein, as if stated herein, in
its entirety.

§ 5.4. Release of Finished Product(s)

SCHERING will release the Finished Product for shipment to INDEVUS’ designee, in
accordance with Section 5.6 of the MSA, under SCHERING’s procedures in
accordance with the Specifications and applicable DMFs, cGMP regulations,
especially US federal regulation 21CFR211.165, applicable Regulatory Standards,
and established Testing Standards and Manufacturing Description(s).

INDEVUS shall have the right to inspect (or to have inspected) such shipment for
transport damages, shortage and, as far as reasonably practicable, any other
defects, and to perform quality control and acceptance testing as set forth in
the MSA.

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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§ 6 Stability Testing

SCHERING shall be responsible for conducting the stability testing of the
Substance and of the Finished Product in conformity with cGMP regulations,
especially US federal regulation 21CFR211.166 and ICH guidance Q1A through F,
and with applicable Regulatory Standards, the established Testing Standards and
the stability study protocol as laid out in Appendix 3.

§ 7 Change Management

Change management shall be governed by Article 11 of the MSA, which is hereby
incorporated by reference herein, as if stated herein, in its entirety.

§ 8 Annual Product Review

Following consultation with INDEVUS SCHERING will perform an Annual Product
Review of the quality standards of the Finished Product and to determine the
need for changes in product Specifications or Manufacturing or control
procedures, in conformity with cGMP regulations, especially US federal
regulation 21CFR211.180(e). The content of the Annual Product Review will be
agreed to by both INDEVUS and SCHERING.

§ 9 Inspections and Quality Audits

INDEVUS is entitled to conduct inspections and audits of the SCHERING facilities
in which Substance and Product are Manufactured, including all quality control
procedures and documentation, at normal business hours upon [*] prior written
announcement. Inspections shall not be more than [*], unless there are important
and objective reasons for additional inspections. Requests for such additional
inspections will be accommodated in a timely manner and with reasonable advance
notice.

SCHERING will permit inspections by the FDA at any time upon request. SCHERING
shall notify INDEVUS of the FDA inspections on a timely basis. SCHERING will
provide written information regarding outcomes of the FDA inspections and copies
of observations. Responses to observations of the FDA resulting from inspections
specific to the Substance and Finished Product will be agreed between SCHERING
and INDEVUS to the extent any DMF relating to the Manufacture of Finished
Product to INDEVUS or the NDA is affected. To the extent not covered by this
Section 9, the provisions of Section 6.3 of the MSA shall also govern any
inspections by the FDA.

§ 10 Complaints from the Market

INDEVUS will forward to SCHERING Finished Product complaints about the quality
of the Finished Product(s) after confirming by investigation the details and
authenticity. All authenticated complaints shall be forwarded to SCHERING for
internal investigation; all other complaints, and the results of investigation
determining same, will be maintained by INDEVUS and forwarded to SCHERING upon
request. For authenticated complaints SCHERING shall review without undue delay
the respective Batch documentation, carry out tests to clarify the cause of such
a complaint, its alleged technical defect and present INDEVUS with a response

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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summarizing the results of such investigation. The final response has to be sent
to INDEVUS within [*] of receipt of the Finished Product complaint. For Finished
Product complaints where the nature of the complaint is such that patient safety
could be put at risk, preliminary investigation statements must be available
within [*] of receipt, a final statement must be written without any undue
delay, within [*] at the latest. The final response must also include details on
the confirmed or assumed causes of technical defect(s). SCHERING shall be
responsible for the appropriate measures to prevent the re-occurrence of any
such defects and report such measures in the final response.

If for any reason items remain outstanding, SCHERING will provide periodic
progress updates. SCHERING and INDEVUS shall agree on the frequency on a case by
case basis.

§ 11 Recalls and Other Corrective Actions

Recalls and other corrective actions shall be governed by Section 6.4 of the
MSA, which is hereby incorporated by reference herein, as if stated herein, in
its entirety.

§ 12 Amendments

This QAA and the Appendices hereto may be revised from time to time, but only
upon mutual written agreement of the Parties.

§ 13 Other Provisions

The terms of this QAA are intended to supplement (but not limit) the terms of
the MSA, and with regard to all other issues not mentioned herein including, but
not limited to confidentiality, term and termination, assignment and
severability the respective provisions of the MSA shall apply. In case of
ambiguities between this QAA and the MSA, the latter shall prevail.

 

   Berlin,    INDEVUS    SCHERING       Fr. Dr. Lehne    Hr. Dr. Höfert

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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List of Appendices

to the Quality Assurance Agreement

between INDEVUS and SCHERING

 

•     Specification(s), Testing Standard(s) for Substance and Finished Products

   Appendix 1

•     Manufacturing Description

   Appendix 2

•     Stability Study Protocol for Finished Product

   Appendix 3

•     List of responsible persons and named contact partner

   Appendix 4

•     Pharmaceutical responsibilities

   Appendix 5

 

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Appendix 1

to the Quality Assurance Agreement between SCHERING and INDEVUS

Specification(s), Testing Standard(s) for Substance and Finished Product(s)

 

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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Appendix 2

to the Quality Assurance Agreement between SCHERING and INDEVUS

Manufacturing Description

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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Appendix 3

to the Quality Assurance Agreement between SCHERING and INDEVUS

Stability Study Protocol for Finished Product(s)

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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Appendix 4

to the Quality Assurance Agreement between SCHERING and INDEVUS

List of responsible persons and named contact partner:

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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Appendix 5

to the Quality Assurance Agreement between SCHERING and INDEVUS

Pharmaceutical responsibilities

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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SCHEDULE 4.3

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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SCHEDULE 8.2.2

 

[*]

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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Indevus Pharmaceuticals, Inc.

Attn.: Glenn L. Cooper, M.D.

Chairman, President and CEO

33 Hayden Avenue

Lexington, MA 02421

   Schering AG USA          E:                T:    +49.30.468-               
+49.30.468-    11 11          F:    +49.30.468-    Your Ref.   
Your letter dated    Our Ref. (please indicate when replying)    Date      
RA/vB (6v2509_1)    2006-10-17

Schering/Indevus – License Agreement (Validation Batches)

Dear Dr. Cooper,

Reference is made to the License Agreement between Schering Aktiengesellschaft
(„Schering“) and Indevus Pharmaceuticals, Inc. (“Indevus”) dated July 28, 2005
(as amended by the side letter dated February 20, 2006 – “License Agreement”)
and the discussions regarding the manufacture and usage of the validation
batches. This letter sets forth the terms and conditions for such activities.

 

1. Indevus requests and Schering agrees to manufactures a set of [*] batches for
the Product [*], containing a fill volume of [*] filled with a solution of the
Substance as active pharmaceutical ingredient and excipients [*] for
intramuscular injection whereby each ml solution contains [*] Substance
corresponding to [*] testosterone and each [*] with [*] solution for injection
contains [*] Substance [*] These [*] validation batches for [*] will be
manufactured from [*] of solution containing the Substance each and shall
completely be filled into [*]. It is currently estimated that the amount of [*]
manufactured by the [*] validation batches will be between [*] in total.
Timelines for manufacture of these validation batches will be agreed in the
Supply Team. Following manufacture of such validation batches Schering will
provide to Indevus copies of the respective Certificate of Analysis and the
Certificate of Compliance. The [*] from such validation batches, after
substraction of the [*] described in No. 4, are expected to be available for
commercial use by Indevus under the License Agreement.

 

2. Subject to No. 4, the [*] resulting from the validation batches pursuant to
No. 1 may be used as commercial supply under a Manufacturing and Supply
Agreement between Indevus and Schering dated as of the date hereof
(“Manufacturing and Supply Agreement”). The ordering and delivery with respect
to such [*] (as Finished Product) shall be governed by the terms and conditions
of the Manufacturing and Supply Agreement. It is further understood and agreed
that the decision on the timing of the production of the validation batches will
determine the extent of stability data available at the time of the intended NDA
filing by Indevus.

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

Postal address:

Schering AG

D-13342 Berlin, Germany

For visitors:

Müllerstr. 178, Berlin-Mitte

www.schering.de

  

Executive board:

Arthur Higgins (Chairman)

Werner Baumann

Ulrich Köstlin

Gunnar Riemann

Marc Rubin

  

Chairman of the supervisory board:

Werner Wenning

 

Registered seat: Berlin

Trade register:

AG Charlottenburg 93 HRB 283

  

Commerzbank AG, Berlin

Acct. No. 108 700 600, Bank No. 100 400 00

IBAN: DE72 1004 0000 0108 7006 00

BIC: COBADEFF

Deutsche Bank AG, Berlin

Acct. No. 2415 008, Bank No. 100 700 00

IBAN: DE35 1007 0000 0241 5008 00

BIC: DEUTDEBB

 

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Addressee

   Our Ref.    Date    Page    RA/vB (6v2509_1)    2006-10-17    2

 

3. Indevus agrees to pay an amount of US Dollar [*] manufactured in the
validation batches pursuant to No. 1, provided that Indevus shall not be obliged
to pay more than [*] for the entire amount of [*] manufactured in such
validation batches. Subject to receipt by Indevus of the copies of the
respective Certificates of Analysis and Certificates of Compliance and a visual
inspection by Indevus of the validation batches inventory at Schering, the lump
sum payment for the entire amount of [*] manufactured in such validation batches
shall be paid by Indevus to Schering not before [*] and not later than [*]. This
amount is not refundable but will be off-set against the Initial Payment (as
defined in the Manufacturing and Supply Agreement payable under the
Manufacturing and Supply Agreement).

 

4. Out of the validation batches of [*] produced pursuant to No. 1 above,
Schering will keep an appropriate number of [*] for (i) characterization and
release testing in connection with the process validation and quality control,
(ii) [*] stability testing, (iii) for use as retention samples, and (iv) other
needs as applicable (reference standards etc.). No. 3 shall not apply with
respect to these [*].

 

5. In case Indevus wishes Schering to manufacture validation batches for the [*]
as well, the Parties will negotiate about such validation: Should Schering agree
to manufacture such validation batches, similar terms than for the [*] shall
apply.

 

6. Capitalized terms used in this letter shall have the meaning ascribed to them
in the License Agreement, unless otherwise defined or stated.

 

7. All other terms of the License Agreement shall remain unchanged and in full
force and effect.

To signify acceptance with the above we would kindly ask you to countersign and
return the attached copy of this letter.

With kind regards

Schering Aktiengesellschaft

Dr. Riedel            Dr. Horn

/s/ Dr. Riedel        /s/ Dr. Horn

 

Agreed and accepted for and on behalf of Indevus Pharmaceuticals, Inc.: Date:

/s/ Glenn L. Cooper, M.D.

Glenn L. Cooper, M.D.

 

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[*] CONFIDENTIAL TREATMENT REQUESTED

 

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