EX-10.A: AMENDMENT TO AGREEMENT DATED 9/26/2001



 



Exhibit 10(a)



SCHERING               







	 	 	 
	D. Geoffrey Shulman, CEO	 	
                                                 Schering AG
	
	
	
	

	DUSA Pharmaceuticals, Inc.	 	 
	
	
	
	

	181 University Avenue	 	
Note: Certain portions of this document have been marked
	
	
	
	

	Suite 1208	 	
"[c.i.]” to indicate that confidential treatment has been
	
	
	
	

	Toronto, Ontario M5H 3M7	 	
requested for this confidential information. The confidential
	
	
	
	

	 	 	
portions have been omitted and filed separately with the
	
	
	
	

	Canada	 	
Securities and Exchange Commission




	 	 	 	 	 	 	 	 	 
		 	 	 	 	 	 	 	 
	
	
	
	

	Your Ref	 	
Your letter dated
	 	Our Ref. (please indicate when replying)
	 	Telephone: +49-30-468 14707
	 	Date
	
	
	
	

	 	 	 	 	RA/vB/ (1b2305-2)
	 	                      +49-30-468-1111
	 	2001-09- 26
	
	
	
	

	 	 	 	 	 	 	Telefax: +49-30-468 14086	 	 



Dear Dr. Shulman:


We are writing in response to your correspondence dated July 26, 2001 and our
subsequent conversations concerning our proposal dated July 3, 2001. We
believe, as I am sure you do, that it is in our mutual interest to resolve
certain issues that have arisen with respect to the Marketing, Development and
Supply Agreement by and between Schering Aktiengesellschaft (“Schering”) and
DUSA Pharmaceuticals, Inc. (“DUSA”) dated November 22, 1999 (the “Agreement”).
Accordingly, we have set forth our proposals in the form of a letter agreement
below.


Capitalized terms used herein, that are not defined, shall have those meanings
ascribed to them in the Agreement unless their context clearly dictates
otherwise.



	1.	 	Schering and Berlex Laboratories, Inc. (“Berlex”) recognize that at
Berlex’s request, DUSA had instructed its manufacturer of Applicators,
North Safety Products (“North”), to produce a lesser quantity of
Applicators than had been originally forecasted and ordered under the
Agreement. DUSA represents that this action has created a situation
requiring the payment to North of underutilization charges. Schering and
Berlex are agreeable to compensate DUSA for certain of these expenses
incurred by DUSA as a result of this change order. This sum is reflected
in the amount specified in paragraph 6 below. DUSA agrees that it shall
[c.i.] for [c.i.] or [c.i.] or [c.i.] of any [c.i.] Schering or Berlex
resulting from [c.i.] of [c.i.] and [c.i.] pursuant to Sections 9.3 and
9.4 of the Agreement through and including the date of this letter. It is
further agreed that, except as stated immediately above, neither Schering
nor Berlex shall be responsible, in whole or in part, for any obligations
DUSA may have to its suppliers as a result of its ordering lesser
quantities of supplies and products than had been anticipated or agreed
upon, including but not limited to North, through and including the
calendar year 2002.
	 
	2.	 	The parties agree that the payments made by Schering to DUSA for all
Initial Product ordered and received through and including the date of
this letter agreement, shall be deemed to satisfy Schering’s payment
obligation set forth in Section 10.6.1 of the Agreement. For all purchase
orders following the date of this letter, DUSA shall invoice Schering for
its full Cost of Goods under the terms of the Agreement.



Postal address: Schering AG, D-13342 Berlin, Germany • For visitors:
Berlin-Wedding, Mollerstresse 175 • Cable: Scheringchernie Berlin • Internet


Executive board: Hubertus Erien (Chairman), Klaus Pohle (Vice-Chairman), Ulrich
Kòetlin, Lutz Lingnau, Gontor Stock • Chairman of the supervisory board:
Giuseppe Vita • Registered seal: Berlin • Trade register: AG Charlottenburg
93 HR9 283 • Commerzbank AG, Berlin, Account No. 108700600, Bank prefix No.
100 400 00 • BHF-Bank AG, Berlin, Account No. 70045224,
Bank prefix No. 100 202 00 • Deuteche Bank AG, Berlin, Account No. 2415008,
Bank prefix No. 100 700 00


 







 


SCHERING               






	 	 	 	 	 	 	 
	Address	 	Our Ref	 	Date	 	Page
	
	
	
	

	DUSA Pharmaceuticals	 	
RA/vB/ (1b2305-2)
	 	2001-09-26
	 	2
	Dr. Geoffrey Shulman	 	

	 	
	 	




	3.	 	Effective as of the Execution Date, the Guaranty, the Security Agreement
and the Secured Line of Credit Promissory Note between Schering and DUSA,
each dated November 22, 1999, are deemed void and shall be of no force or
effect and all references thereto in the Agreement and in the Light Source
Agreement by and between Schering and DUSA (the “Light Source Agreement”)
shall be deemed to have been deleted.
	 
	4.	 	Schering and DUSA agree to cooperate on developing future BLU-U®
forecasts, with the intent that DUSA will maintain a reasonable inventory
of Light Sources in relation to the actual rate of BLU-U® placements at
that respective time. In addition, any excess inventory remaining at the
end of each half calendar year can be used by DUSA to fulfill Schering
orders for the next half calendar year, at DUSA’s discretion.
	 
	5.	 	DUSA shall continue to be responsible for the supply of Collaboration
Products pursuant to the terms and conditions set forth in the Agreement.
DUSA shall be relieved of its specific obligation to use reasonable
efforts to undertake the manufacture of the Applicator itself or
qualifying a second source of supply by the end of [c.i.], as set forth in
the penultimate sentence of Section 9.10.1 of the Agreement. DUSA shall
use its best efforts to qualify itself as the primary manufacturer and
supplier of the Initial Product within six (6) months following the date
North ceases production. Also, DUSA agrees to maintain a sufficient
supply safety stock of Collaboration Product during the period of time
North ceases production until the date DUSA commences full-scale
production. DUSA shall be obligated to qualify a second source of supply
not later than [c.i.] following the date Schering notifies DUSA that
[c.i.] or more Kerasticks® have been [c.i.] from [c.i.] during the
preceding [c.i.] and that there have been at least [c.i.] of growth.
Notwithstanding any other provision of the Agreement or this letter
agreement to the contrary or otherwise, during the period prior to the
manufacture and continuing supply by DUSA of Initial Product in its own
manufacturing facility or in a successor third-party contractor’s facility
(i.e. other than North’s) for twelve (12) consecutive months, DUSA shall
[c.i.] to Schering for [c.i.], including, but not limited to, [c.i.],
attributable to DUSA’s failure to supply Schering’s requirements of
Finished Product ordered pursuant to Section 9.4 of the Agreement. Once
such time period has lapsed the provisions of Section 9.12.4 shall again
apply.
	 
	6.	 	In consideration of the foregoing, Schering agrees to pay to DUSA, not
later than thirty (30) days following the execution by DUSA of this letter
agreement, as presented, the sum of one million ($1,000,000) dollars.
	 
	7.	 	The Agreement shall hereby be deemed amended solely to the extent
necessary to comply with the terms set forth above.



 







 


SCHERING               






	 	 	 	 	 	 	 
	Address	 	Our Ref	 	Date	 	Page
	
	
	
	

	DUSA Pharmaceuticals	 	
RA/vB/ (1b2305-2)
	 	2001-09-26
	 	3
	Dr. Geoffrey Shulman	 	

	 	
	 	



If you are in agreement with the above, please so indicate by signing both
original versions of this letter and have one original returned to Schering.


Sincerely,


Schering Aktiengesellschaft



	 	 	 	 
	/s/ C. Zieler	 	
/s/ U. Wollny
	Claus Zieler	 	
Dr. Wollny
	Managing Director	 	
Project Manager
	Center of Dermatolody	 	 



Agreed and Accepted:


Date:


/s/ Geoffrey Shulman            

DUSA Pharmaceuticals, Inc.

Geoffrey Shulman