Exhibit 10.6

** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.

CONFIDENTIAL

LOGO [g66430img001.jpg]

EXHIBIT No. 11 TO THE

RESEARCH AND DEVELOPMENT AGREEMENT BETWEEN

COBRA BIOLOGICS LTD. AND

AUXILIUM PHARMACEUTICALS, INC. DATED FEBRUARY 24, 2005

THIS AGREEMENT (“Agreement”) is made as of the 14th day of July, 2006 by and
between COBRA BIOLOGICS LTD, a wholly owned subsidiary of COBRA BIOMANUFACTURING
Plc, located at The Science Park, Keele ST5 5SP, United Kingdom (hereinafter
“COBRA”) and AUXILIUM PHARMACEUTICALS, INC., a Delaware corporation having a
principal place of business at 40 Valley Stream Parkway, Malvern, Pennsylvania
19355 (hereinafter, “AUXILIUM”). COBRA and AUXILIUM may be referred to as a
“Party” or, collectively, as “Parties.”

RECITALS

WHEREAS, AUXILIUM is engaged in the research, development, marketing and sale of
pharmaceutical products;

WHEREAS, COBRA is in the business of and has appropriate facilities for
providing certain services to the pharmaceutical industry and others;

WHEREAS, AUXILIUM and COBRA are parties to a Research and Development Agreement
dated February 24, 2005, sub-agreements known as “Exhibit No. 9” dated June 28,
2005 and “Exhibit No. 10” dated February 8, 2006, and a Quality Agreement dated
January 11, 2006;

WHEREAS, AUXILIUM and COBRA now wish to terminate Exhibit No. 9 and enter into
this Agreement for COBRA to provide certain services (the “Services”) to
AUXILIUM;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, and INTENDING TO BE LEGALLY BOUND HEREBY, the Parties agree as follows:

I. DEFINITIONS

The following terms, as used herein, shall have the following meanings:

“Act” shall mean the United States Federal Food Drug and Cosmetic Act, the
Medicines Act 1968 and Council Directive 2001/83/EEC and applicable regulations.

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CONFIDENTIAL

 

“Affiliate” means, when used with reference to a Party, any Person directly or
indirectly Controlling, Controlled by or under common Control with a Party.

“Agreement” means this Agreement including its Appendices, Schedules and
Attachments, if any, as amended from time to time according to and under the
terms and conditions of this Agreement.

“Applicable Laws” means all applicable laws, orders and regulations, including,
without limitation, cGMP, of any governmental authority with jurisdiction over a
Party’s activities in connection with this Agreement.

“AUXILIUM Assets” means all tooling, gauges, machinery, measuring equipment,
assembly equipment, other capital equipment, and associated spare parts
specifically funded and/or supplied by AUXILIUM for the Manufacture of the
Product. Any leasehold improvement, in a COBRA facility, funded in whole or in
part by AUXILIUM is not an AUXILIUM Asset.

“Batch Accompanying Documents” shall mean batch documentation material as
defined in the Quality Agreement, Section 8.

“Batch Records,” “Batch Manufacture Records” and “BMR” shall mean product batch
records as defined in the Quality Agreement, Section 7.2.

“Best Efforts” shall mean the reasonable level of effort and resource which
would be used by a party in relation to a certain activity which it would apply
to achieving the aim of that activity if it was seeking to achieve that aim for
itself taking account of reasonableness, cost, timescale, resource utilization
and the commercial position.

“BLA” means a Biological License Application submitted under the Act to permit
commercial sale of Product in the United States or a comparable marketing
license in another country outside the United States.

“Certificate of Analysis” means a certificate supplied at the time of delivery
of Product, which states details of the relevant Product batch(es) covered by
the certificate, contains agreed manufacturing data and confirms that the
Product meets all of the requirements of the Product Specification and the
Quality Agreement.

 

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“Certificate of Conformity” means a certificate supplied with delivered Product,
which states details of the relevant Product Batch(es) covered by the
certificate and states conformance to the Product Specification and the Quality
Agreement.

[“**********”] means [********************************************
**************************.]

“Commercially Reasonable Efforts” means, with respect to a Party, the efforts
and resources which would be used by that Party relating to a certain activity
or activities, consistent with its normal business practices, which are
consistent with the general level of effort and resources in the pharmaceutical
industry.

“Competing Product” shall mean any product containing
[*****************************************************************] that is not
the Product.

“Control”, “Controlling,” and “Controlled by” mean the direct or indirect
ownership of over 50% of the outstanding voting securities of an entity, or the
right to receive over 50% of the profits or earnings of a person, or the right
to control the policy decisions of a person.

“Deliverables” and “Key Deliverables” shall mean the activities, Services and
products listed as AUXILIUM Deliverables and/or COBRA Deliverables in the
Development Program Chart, attached hereto as Appendix “A”.

“Development Program” shall mean the Services, activities, and Deliverables as
set forth in the Development Program Chart.

“Effective Date” shall mean April 1, 2006.

“Exhibit No. 9” shall mean the sub-agreement between COBRA and AUXILIUM dated
June 28, 2005 which is an exhibit to, and subject to, the R & D Agreement.

“Exhibit No. 10” shall mean the sub-agreement between COBRA and AUXILIUM dated
February 8, 2006 which is an exhibit to, and subject to, the R & D Agreement.

“Facility” shall mean COBRA’s facility located at [**************************
***************************************]

“FDA” means the United States Food and Drug Administration or any successor
regulatory agency.

 

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“Force Majeure” means any delay or default in performing hereunder if such delay
or default is caused by conditions beyond the control of a party including, but
not limited to Acts of God, Government restrictions (including the denial or
cancellation of any export or other necessary license), wars, insurrections,
explosion, disease, weather, civil strike, riot, power failure, fire and/or any
other cause beyond the reasonable control of the party whose performance is
affected.

“FTE” shall mean full-time employee or a worker whose productivity or
involvement in the project is equivalent to a full-time employee.

“FTE man month” shall mean the time, productivity and involvement in the project
equivalent to one month of a full-time employee.

“GBP” shall mean the Pound sterling, the official currency of the United
Kingdom.

“GMP” and “cGMP” shall both mean current Good Manufacturing Practice, the US
federal regulations setting minimum quality requirements that drug and biologics
manufacturers must meet, as well as the “Rules Governing Medicinal Products in
the European Union – volume 4 – Good Manufacturing Practices.”

“Party” or “Parties” means either COBRA or AUXILIUM, or both, as the context may
require.

“Person” or “Persons” means any corporation, partnership, joint venture or
natural person.

“Process Validation” shall mean establishing documented evidence which provides
a high degree of assurance that a specific process will consistently produce a
product meeting its predetermined specifications and quality attributes.

“Product” or “Products” means
[*********************************************************************].

“Quality Agreement” means the agreement between AUXILIUM and COBRA dated
January 11, 2006 which defines the technical, operational and regulatory
requirements and responsibilities of each Party with respect to the practices to
be followed to ensure Product quality, and as may be amended from time to time
by written agreement between the Parties.

“Raw Materials” means all starting materials or those materials used in process
to manufacture the final drug substance.

“R & D Agreement” shall mean the Research and Development Agreement signed
February 24, 2005, effective September 15, 2004.

“Services” shall mean the services and work to be performed by COBRA as set
forth in the Development Program Chart.

 

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CONFIDENTIAL

 

“SOP” means standard operating procedure.

“Specifications” means the intermediate specifications, drug substance
specifications and drug product specifications for the Product established by
AUXILIUM and agreed to by COBRA, attached hereto as Appendix “B”. Any changes to
the Specifications will be determined by the Management Steering Committee. No
changes may be made to the Specifications without Auxilium’s written approval.
In no event shall any changes be made to Specifications after the filing of a
BLA.

“Term” means the term of this Agreement as provided in Section IX.A.

“Third Party” means any Person or entity other than COBRA, AUXILIUM or their
respective Affiliates.

“Validation” shall mean the process of proving the functionality, reliability,
reproducibility and robustness of procedures, test methods, utilities and
equipment in accordance with the current good manufacturing practices under the
Act.

II. SERVICES AND PAYMENTS

A. COBRA Obligations. COBRA shall use its Best Efforts to provide to AUXILIUM
the “Cobra Deliverables” listed, and according to the schedule, in the
Development Program Chart (Appendix A), but this is subject to Section II.B and
AUXILIUM providing its deliverables.

B. AUXILIUM Obligations. AUXILIUM shall use Commercially Reasonable Efforts to
provide completion of all “Auxilium Deliverables” listed, and according to the
schedule, in the Development Program Chart (Appendix A).

 

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C. Payments

1. [****] Engineering Run

(a) COBRA estimates its maximum total costs for the [****] Engineering Run will
be [************]. This is based upon a maximum of [**] FTE man months,
including required staff, additional staff for an accelerated schedule, training
of additional staff for future processes related to the Services, and other
one-time costs. This is also based upon a certain number of FTE man months for
COBRA staff outside of AUXILIUM’s core program that would otherwise be serving
other COBRA customers (“Tied FTEs”). COBRA agrees that in no event shall total
costs for the [****] Engineering Run exceed [************]. Cobra will use Best
Efforts to use as few FTE man months as possible in achieving its Deliverables.

(b) Stability Program

(1) COBRA will complete the stability program for the [****] Engineering Run.
The stability program for the [****] Engineering Run includes [**] stability
pulls over a [********] time period, as set forth in Appendix “C”. The cost of
the [****] Engineering Run (as set forth in Section II.C.1.(a) above) includes
completion of all stability pulls for the [****] Engineering Run scheduled for
calendar year 2006 ([********]).

(2) The cost to be charged by COBRA for all stability pulls for the [****]
Engineering Run scheduled for calendar years 2007, 2008 and 2009 ([********]) is
not included in the cost of the [****] Engineering Run and shall not exceed
[****** ***] per stability pull (hereinafter “Stability Pull Price”); provided,
however, that the parties may adjust the Stability Pull Price for calendar years
2008 and 2009 in accordance with the provisions of Section X (Economic Price
Adjustment) below. All stability work will be invoiced on completion of each
stability pull and invoices are payable within 15 days of receipt of invoice by
AUXILIUM.

(3) AUXILIUM reserves the right, at the sole discretion of AUXILIUM, to transfer
at any time any uncompleted stability program work from COBRA to a third party.
In the event AUXILIUM transfers uncompleted stability program work from COBRA to
a third party, COBRA will promptly provide cooperation and assistance, at
reasonable cost, and AUXILIUM shall have no further payment obligations to COBRA
for the uncompleted and transferred stability program work.

 

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CONFIDENTIAL

 

(c) COBRA will charge AUXILIUM for the [****] Engineering Run at a rate of
[**********] (the “FTE Rate”) per FTE man month. COBRA will invoice AUXILIUM
monthly for the [****] Engineering Run. Payments are due fifteen (15) days from
date of receipt of the invoice by AUXILIUM. COBRA shall provide supporting
documentation to detail how all charged FTE man months, including the Tied FTEs,
were calculated, with sufficient detail for AUXILIUM to determine the number of
employees used, the time spent, the nature and significance of the time spent
and the tasks performed. The parties will agree on the form of supporting
documentation.

(d) The maximum limits placed on costs in this Section II.C.1 shall not include
Raw Materials, consumables and AUXILIUM Assets. The costs quoted in this Section
of the Agreement are exclusive of sales taxes and as such COBRA reserves the
right to charge any sales/transaction tax to AUXILIUM.

2. GMP Run

(a) The cost to be charged by COBRA for the [****] GMP Run will be
[***********]. COBRA agrees that in no event shall the total costs for the
[****] GMP Run exceed [***********].

(b) Stability Program.

(1) The cost to be charged by COBRA for the [****] GMP Run does not include the
stability program for the [****] GMP Run. In the event the parties agree that
COBRA will perform the stability program for the [****] GMP Run, the cost to be
charged by COBRA for all stability pulls shall not exceed [****** ***] per
stability pull (hereinafter “Stability Pull Price”); provided, however, that the
parties may adjust the Stability Pull Price for calendar years 2008 and 2009 in
accordance with the provisions of Section X (Economic Price Adjustment) below.
All stability work will be invoiced on completion of each stability pull and
invoices are payable within 15 days of receipt of invoice by AUXILIUM.

(2) AUXILIUM reserves the right, at the sole discretion of AUXILIUM, to transfer
at any time any uncompleted stability program work from COBRA to a third party.
In the event AUXILIUM transfers uncompleted stability program work from COBRA to
a third party, COBRA will promptly provide cooperation and assistance, at
reasonable cost, and AUXILIUM shall have no further payment obligations to COBRA
for the uncompleted and transferred stability program work.

(c) COBRA will invoice AUXILIUM the fixed price of the [****] GMP Run as
follows: one third of the fixed price upon thaw of the vial(s) of cells; one
third of the fixed price upon completion of the bulk drug substance manufacture
; and one third of the fixed price upon final QA release of the batch. Payments
are due fifteen (15) days from the date of receipt of invoice by AUXILIUM.

 

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CONFIDENTIAL

 

(d) The costs quoted in this Section II.C.2 of the Agreement include all
Services necessary to prepare for and perform the [****] GMP Run. The maximum
limits placed on costs in this Section II.C.2 shall not include Raw Materials,
consumables and AUXILIUM Assets. The costs quoted in this Section of the
Agreement are exclusive of sales taxes and as such COBRA reserves the right to
charge any sales/transaction tax to AUXILIUM.

(e) For purposes of termination under Section IX.B.2 of this Agreement, the
[****] GMP Run shall begin when COBRA issues Batch Manufacture Records for the
[****] GMP Run (which shall not occur more than one (1) week prior to thaw of
the working cell bank to begin the [****] GMP Run) and shall end when the batch
of drug substance produced by the [****] GMP Run has final release.

3. BLA Batch Runs I, II and III

(a) The cost to be charged by COBRA for each of the BLA Batch Runs will be
[***********]. COBRA agrees that in no event shall the total costs for each BLA
Batch Run exceed [***********].

(b) Stability Program.

(1) The cost to be charged by COBRA for the BLA Batch Runs does not include the
stability program for the BLA Batch Runs. In the event the parties agree that
COBRA will perform the stability program for the BLA Batch Runs, the cost to be
charged by COBRA for all stability pulls shall not exceed [***********] per
stability pull (hereinafter “Stability Pull Price”); provided, however, that the
parties may adjust the Stability Pull Price for calendar years 2008 and 2009 in
accordance with the provisions of Section X (Economic Price Adjustment) below.
All stability work will be invoiced on completion of each stability pull and
invoices are payable within 15 days of receipt of invoice by AUXILIUM.

(2) AUXILIUM reserves the right, at the sole discretion of AUXILIUM, to transfer
at any time any uncompleted stability program work from COBRA to a third party.
In the event AUXILIUM transfers uncompleted stability program work from COBRA to
a third party, COBRA will promptly provide cooperation and assistance, at
reasonable cost, and AUXILIUM shall have no further payment obligations to COBRA
for the uncompleted and transferred stability program work.

(c) COBRA will invoice AUXILIUM the fixed price of each BLA Batch Run as
follows: one third of the fixed price upon thaw of the vial(s) of cells; one
third of the fixed price upon completion of the bulk drug substance manufacture
; and one third of the fixed price upon final QA release of the batch. Payments
are due fifteen (15) days from the date of receipt of invoice by AUXILIUM.

 

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CONFIDENTIAL

 

(d) The costs quoted in this Section II.C.3 of the Agreement include all
Services necessary to prepare for and perform each BLA Batch Run. The maximum
limits placed on costs in this Section II.C.3 shall not include Raw Materials,
consumables and AUXILIUM Assets. The costs quoted in this Section of the
Agreement are exclusive of sales taxes and as such COBRA reserves the right to
charge any sales/transaction tax to AUXILIUM.

(e) For purposes of termination under Section IX.B.2 of this Agreement, each BLA
Batch Run shall begin when COBRA issues Batch Manufacture Records for each such
BLA Batch Run (which shall not occur more than one (1) week prior to thaw of the
working cell bank to begin that BLA Batch Run) and shall end when the batch of
drug substance produced by that BLA Batch Run has final release.

4. Process Validation

(a) COBRA will provide AUXILIUM a fixed price quote for the Process Validation
no later than thirty (30) days before Process Validation studies are to be
initiated by COBRA.

(b) No work shall be initiated by COBRA on Process Validation without AUXILIUM’s
express written consent to the respective fixed price quote.

5. Quarterly Estimates

COBRA and AUXILIUM shall agree on a quarterly estimate of all costs and related
activities for each quarter. COBRA shall provide to AUXILIUM quarterly estimates
of all costs and related activities expected to be incurred for Services in the
next ninety (90) day period no later than forty five (45) days before the
beginning of each quarter. The first such quarterly estimate (for the quarter
beginning July 1, 2006) shall be provided by COBRA and agreed by July 12, 2006.
The subsequent quarterly estimates shall be agreed between COBRA and AUXILIUM 45
days before the start of the quarter to which they relate.

6. Raw Materials

(a) AUXILIUM will be responsible for the cost of all Raw Materials necessary in
the performance of the Services. Where possible the purchases will be made by
Cobra.

(b) The parties will determine and agree on the estimated total cost for all Raw
Materials for one (1) [****] batch of the Product (“Total Batch Materials
Cost”), as well as the estimated total cost of Raw Materials for a multi-batch
of the Product (“Total Multi-Batch Materials Cost”).

 

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CONFIDENTIAL

 

(c) COBRA shall provide to AUXILIUM a monthly list of all purchases of Raw
Materials. Invoices shall be due upon receipt. AUXILIUM shall approve all
invoices within three (3) business days after AUXILIUM’s receipt.

(d) COBRA shall provide to AUXILIUM monthly reports of all Raw Materials
purchased in the past thirty (30) days, as well as monthly projections of Raw
Materials expected to be purchased in the next ninety (90) days.

(e) In the event purchases of Raw Materials exceed the Total Batch Materials
Cost or Total Multi-Batch Materials Cost by more than five percent (5%), COBRA
shall provide AUXILIUM with prompt notice. All purchases of Raw Materials in
excess of the Total Batch Materials Cost or Total Multi-Batch Materials Cost
(+5%) must be pre-approved by AUXILIUM in writing within 3 – 5 business days of
receipt by AUXILIUM. In the event AUXILIUM does not respond to such notice
within 5 business days of receipt, such purchases shall be deemed approved by
AUXILIUM.

(f) Effective March 1, 2006, COBRA may charge AUXILIUM [****] per order up to a
limit of [***********] per order for COBRA’s costs in negotiating, purchasing
and processing Raw Materials for this project under the Agreement. Raw Materials
purchased by AUXILIUM will be exempt from the [****] handling fee. However
AUXILIUM is responsible after March 1, 2006 for all import fees/duties and
associated costs for receipt of Raw Materials sent from the US. These charges
and the cost of purchase of such Raw Materials by Auxilium are over and above
the Monthly Payments.

(g) COBRA will use Commercially Reasonable Efforts to ensure the security of the
Raw Materials necessary in the performance of Services

D. Inability to Perform

1. COBRA shall promptly notify AUXILIUM in writing of any anticipated delay or
of any circumstance(s) rendering it unable to perform or complete the Services
in the manner or time described in the Development Program Chart.

2. If achievement of any Deliverable is delayed by more than thirty (30) days
due to no fault of either Party, the parties will negotiate in good faith to
reach a new schedule for Deliverables in the Development Program Chart.

3. If achievement of any Deliverable is delayed by more than forty-five
(45) days due to the failure of a Party to perform, the other Party may
negotiate in good faith to reach a new schedule for Deliverables in the
Development Program Chart or the other party may instead terminate this
Agreement in accordance with Section IX.B.1.(a).

 

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CONFIDENTIAL

 

E. Regulatory Inspection

1. In the event that COBRA receives a Notice of Inspection (an “Inspection
Notice”), or in the event of an unscheduled or unannounced visit or inspection
(collectively referred to as “Inspection”) from the FDA or any other regulatory
authority which has jurisdiction regarding the subject matter of this Agreement,
regarding the Product or the development or manufacture of the Product, COBRA
shall: (i) notify AUXILIUM promptly of such Inspection Notice and/or Inspection,
use Commercially Reasonable Efforts to ensure that AUXILIUM shall have the
opportunity to be present during any such Inspection, and promptly communicate
with AUXILIUM the substance and urgency of such Inspection Notice, and/or
Inspection, and any related information; (ii) in the event, AUXILIUM is not
present and the Inspection directly relates to the Product or the development or
manufacture of the Product, COBRA shall keep AUXILIUM informed of the progress
of the Inspection on a daily basis; and (iii) provide to AUXILIUM a copy of all
documents, directly related to the Product or the development or manufacture of
the Product, produced for, or given to, the FDA or other regulatory authority
pursuant to such Inspection Notice and/or Inspection. Notwithstanding anything
herein to the contrary, AUXILIUM’s participation in any regulatory audit or
Inspection at COBRA or its Affiliates will be limited only to discussions
directly and/or materially related to the Product or the development or
manufacture of the Product.

2. In the event that AUXILIUM receives any material communication or Notice from
the FDA or any other regulatory authority which relates to the Product and
directly and/or materially affects the obligations of COBRA under this Agreement
(“Regulatory Notice”),AUXILIUM shall: (i) notify COBRA promptly of such
Regulatory Notice; (ii) keep COBRA informed of the progress regarding the
Regulatory Notice, including any Inspection; and (iii) provide to COBRA a copy
of all documents provided to the FDA or other regulatory authority pursuant to
such Regulatory Notice.

3. COBRA shall notify AUXILIUM, within one (1) business day of receipt of any
alleged violations or deficiencies relating to the Facility and the development
or manufacture of the Product noted by a regulatory authority. As soon as
reasonably practicable following receipt of any alleged violations, COBRA shall
provide to AUXILIUM copies of all relevant portions of any notice of
observations or potential violations as well as a copy of its response thereto.

4. COBRA shall consult AUXILIUM before providing any written response, from an
audit observation, to the FDA or any other regulatory authority in connection
with the development or manufacture of the Product.

5. COBRA shall at all times comply with all requirements in the Quality
Agreement, which is incorporated herein by reference.

 

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CONFIDENTIAL

 

F. Access to Facilities/Audits

At all reasonable times during normal business hours:

1. COBRA will allow AUXILIUM’s [*****************] or [***] designated successor
access to applicable areas of COBRA’s research, development, manufacturing,
warehousing and testing facilities which are dedicated to the Services under
this Agreement, being the rooms involved in the development and/or manufacture
of the Product and offices, except for facilities under audit by a client other
than AUXILIUM.

2. AUXILIUM’s other authorized representatives may visit COBRA’s facilities upon
reasonable notification.

3. Quality Audits. AUXILIUM shall have access to COBRA’s Facility upon
reasonable advance notice to inspect COBRA’s facilities and records to the
extent AUXILIUM deems appropriate to enable AUXILIUM to verify compliance by
COBRA with its obligations under this Agreement.

G. Disposal

1. Disposal of all waste products created during the development or manufacture
of the Product and related testing of the Product shall be conducted by COBRA in
accordance with applicable laws at its expense.

2. Disposal of obsolete or out-of-specification inventory, such as, without
limitation, expired Materials, out-of-date components or other obsolete
components of the Product and Product shall be conducted by COBRA in accordance
with Applicable Laws at COBRA’s expense.

 

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III. INVESTMENT AND ASSETS

A. AUXILIUM Assets:

1. AUXILIUM will be responsible for the cost of all AUXILIUM Assets necessary in
the performance of Services. The parties will determine and agree on the
estimated total cost for all AUXILIUM Assets necessary to purchase for
completion of the Services in the Development Program (“Total Asset Cost”).

2. As soon as possible, COBRA will provide AUXILIUM with quotes for all proposed
AUXILIUM Asset purchases. Purchases must be paid by AUXILIUM to COBRA prior to
purchase by COBRA, with payment deemed as AUXILIUM approval.

3. Effective March 1, 2006, COBRA may charge AUXILIUM [****] per order up to a
limit of [***********] per order for COBRA’s costs in negotiating, purchasing
and processing AUXILIUM Assets for this project under the Agreement. AUXILIUM
Assets purchased by AUXILIUM will be exempt from the [****] handling fee.

4. COBRA shall provide to AUXILIUM monthly reports of all AUXILIUM Assets
purchased in the past thirty (30) days, as well as monthly projections of all
AUXILIUM Assets expected to be purchased in the next ninety (90) days.

5. In the event purchases of AUXILIUM Assets exceed the Total Asset Cost by more
than five percent (+5%), COBRA shall provide AUXILIUM with prompt notice. All
purchases of AUXILIUM Assets in excess of the Total Asset Cost plus 5% must be
pre-approved by AUXILIUM in writing within 3 to 5 business days of receipt.

6. Where possible the purchases of AUXILIUM Assets will be made by AUXILIUM in
the USA and shipped to COBRA. AUXILIUM will be responsible for all taxes, import
duties and fees.

7. COBRA will use Commercially Reasonable Efforts to ensure the security of the
Auxilium Assets necessary in the performance of Services. COBRA shall have no
title or ownership interest in any AUXILIUM Assets. COBRA may not sell, lease,
encumber or dispose of any AUXILIUM Assets or otherwise impair AUXILIUM’s rights
therein and shall at all times keep any AUXILIUM Assets marked in a way that
clearly indicates to COBRA’s personnel, representatives and agents and any Third
Party/ies that the AUXILIUM Assets are the property of AUXILIUM. It is upon the
mutual consent of both Parties that AUXILIUM Assets will be used in the
Manufacture of the Products. AUXILIUM Assets shall be used exclusively, unless
otherwise agreed by AUXILIUM in writing, for the development and manufacture and
of the Product. AUXILIUM shall retain all right title and interest in and to the
AUXILIUM Assets. AUXILIUM Assets shall be returned to AUXILIUM upon expiration
or termination of the Agreement.

 

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8. Maintenance and Repair. COBRA undertakes to maintain and be responsible for
any AUXILIUM Assets and safeguard them from deterioration (except for reasonable
wear and tear), theft and damage. COBRA shall bear the cost associated with the
labor required to perform routine and preventive maintenance on AUXILIUM
equipment to ensure it is always in working order and in a state of good repair.
Any catastrophic repair or other equipment failure requiring the intervention of
a qualified Third Party technician shall be at AUXILIUM’s cost. AUXILIUM shall
bear the cost of all parts associated with the maintenance and repair of
AUXILIUM equipment including the maintenance of a spare parts inventory at
COBRA. Furthermore, AUXILIUM will also bear the cost of overhauling AUXILIUM
equipment, at AUXILIUM’s sole discretion, as the equipment approaches the end of
its useful life. All labor and spare parts to be funded by AUXILIUM shall be
submitted by COBRA in writing for prior approval.

9. Return. Upon expiration or termination of this Agreement COBRA shall return
any AUXILIUM Assets to AUXILIUM or its designee at AUXILIUM’s expense. Further,
upon expiration or termination of this Agreement, COBRA shall provide AUXILIUM
with technology transfer assistance from personnel skilled in such manufacturing
operations at AUXILIUM’s cost, subject to reasonable and customary rates typical
in the industry.

10. Insurance. It is COBRA’s responsibility to insure all AUXILIUM Assets and
AUXILIUM-owned materials at COBRA. COBRA shall be responsible, at its sole
discretion, for the insurance of any AUXILIUM Assets and AUXILIUM owned
materials placed at COBRA. AUXILIUM shall be a named-insured on the COBRA
insurance policy soley for AUXILIUM Assets, Raw Materials and Product which are
owned by AUXILIUM. In the case of Materials purchased by AUXILIUM for use in the
development or manufacture of the Product, these shall become the property of
COBRA upon the initial utilization of any such material for Manufacture.

 

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B. COBRA Investments.

1. Except as specifically set forth in this Agreement, COBRA will bear the cost
of all labor, materials, equipment and facilities required to perform the
Services in the Development Program Chart.

2. COBRA will provide sufficient FTE’s for successful completion of the
Development Program, as agreed by the Management Steering Group. The allocation
of day-to-day human resource needs will be determined by the Operations
Committee.

3. Subject to AUXILIUM’s obligations as set out above, COBRA is responsible for
all the capital investments and expense costs related to the expansion,
preparation and maintenance of the Facility and Facility services unless
otherwise agreed due to unique requirements of AUXILIUM. Specifically and
without limitation, this encompasses all work related to the construction,
purchase, installation, modification, and commissioning of facilities,
utilities, process equipment, computer systems, and the peripheral equipment/
furnishings required by the operation. In addition, COBRA shall be responsible
for, at its expense, maintenance of the Facility according to cGMP standards,
and the purchase of all equipment other than the AUXILIUM Assets.

 

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IV. VALIDATION

A. AUXILIUM Assets.

1. COBRA shall be responsible for qualification and validation of any AUXILIUM
Assets. The validation of AUXILIUM Assets and all protocols and reports thereof
shall be subject to AUXILIUM’s written approval. AUXILIUM will be responsible
for the cost of validation of AUXILIUM assets.

2. The validation, qualification, and maintenance of AUXILIUM assets shall meet
all Applicable Laws and regulatory standards for products of this class.

B. Analytical Methods Validation.

1. AUXILIUM shall be responsible at its cost for analytical methods validation
for drug substance and drug product.

C. Facility Infrastructure.

1. COBRA shall be responsible for validation, and the cost of validation, of
Facility infrastructure including but not limited to water system, HVAC and
building(s)

2. The validation, qualification, and maintenance of the Facility shall meet all
Applicable Laws and regulatory standards for products of this class.

D. All Other.

1. With the exception of AUXILIUM Assets validation and analytical methods
validation, COBRA shall be responsible for all validation necessary for the
proper completion of Services in the Development Program including, but not
limited to, Facility infrastructure validation, cleaning, Raw Material methods,
vendor, and method transfer validation. The costs of all such validation shall
be borne by COBRA.

 

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V. PROJECT MANAGEMENT

A Participation

1. COBRA

(a) [***********] or [***] designated successor will be committed full-time to
COBRA’s efforts to complete the Services.

(b) COBRA representatives from manufacturing, quality assurance, and quality
control and/or their back-up persons shall be available to AUXILIUM during cGMP
campaigns.

2. AUXILIUM

(a) AUXILIUM may fully participate in the organization and management of the
Development Program and Services contemplated by this Agreement.

B. Committees

The Development Program will be managed via the following formal committees.

1. Management Steering Group (“MSG”)

(a) The function of the MSG is to oversee the Operations Committee and to make
strategic decisions on the direction of the Development Program.

(b) The MSG shall meet at regularly scheduled intervals, and not less than one
(1) time per month, alternating between Malvern and Keele as may be agreed
between COBRA and AUXILIUM.

(c) The MSG will be comprised of key managers associated with the Development
Program. The following persons will be standing members of MSG:
[**********************************************************
**************************.]

(d) In the event a consensus cannot be reached by the MSG, the issue shall be
submitted to the parties’ respective CEO’s for discussion and resolution. In the
event the CEO’s cannot reach a consensus, AUXILIUM has decision-making
authority, and AUXILIUM will be responsible for (and COBRA shall not be liable
for) all resulting increases in costs and/or changes to timescales where
AUXILIUM exercises its decision making authority.

 

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2. Operations Committee (“OC”)

(a) The OC will be responsible for day –to-day management and coordination of
the Development Program and for reporting progress to the MSG.

(b) The OC will be comprised of managers and team leaders selected by the MSG.
The following persons will be standing members of OC:
[**************************************************************************************************
************************************************]. In the event a consensus
cannot be reached, AUXILIUM has decision-making authority.

3. Joint Quality Assurance Committee (“QAC”)

(a) The QAC shall meet (in person or by telephone conference) at regular
intervals, and not less than one (1) time per week.

(b) The QAC will identify, agree and implement a Quality Plan with the objective
of obtaining FDA approval. The Quality Plan must be implemented by [***********]
at the latest.

(c) The QAC will be comprised of key managers from AUXILIUM and COBRA
responsible for quality assurance.

 

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VI. FUTURE DEVELOPMENTS

A. [**********] Project

1. COBRA is currently independently engaged in a research program aimed at
developing [***************************************] outside of this Agreement
and the R&D Agreement with Auxilium (*********************** ************]).
COBRA shall use Commercially Reasonable Efforts to advance the [*************].
COBRA shall summarize all activities and developments regarding the
[*************] in quarterly reports to AUXILIUM.

2. COBRA grants to AUXILIUM (to the extent that COBRA is free to do so) an
exclusive option to a worldwide exclusive license from COBRA (with sub-licensing
rights) of the intellectual property rights of COBRA utilized in or derived from
the [*************] for the purposes of commercial use solely in relation to the
[******************************************] as the bulk active material which
is expressed from the [**************************************] or any other
[*******] strain used to express [*****************************] based on the
following terms:

(a) Such license shall be conditional upon COBRA and AUXILIUM entering into a
non-exclusive long term supply agreement for manufacture of AUXILIUM’s (and its
sub-licensee’s) worldwide requirements for
[************************************************************************************************].
Entering such a long term supply agreement is contingent upon COBRA’s ability to
demonstrate regulatory readiness, manufacturing capacity and ability to offer
competitive pricing, and the parties’ ability to negotiate mutually agreeable
terms and conditions for such an agreement.

(b) AUXILIUM may grant sub-licenses of its rights to such intellectual property
rights on condition that the sub-license only relates to and forms part of a
license of other intellectual property rights and/or know how by AUXILIUM to its
sub-licensee for that sub-licensee to be able to produce, market and sell a
particular proprietary bio-pharmaceutical product of AUXILIUM derived from the
[*************] and prohibits any further sub-licensing by the sub-licensee;

(c) the [***********************************************
*************************] is commercialized by AUXILIUM within a reasonable
period after the exercise of the option and completion of the development and
registration; and

(d) COBRA and AUXILIUM agree to negotiate in good faith the terms of such
license.

 

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B. [******]

1. Pursuant to “Exhibit No. 10” [**************************** ***************],
COBRA is attempting to produce [***********************
***********************************************]

2. COBRA will perform the Services in the Development Program as well as COBRA
Proposal 0684, exclusively for AUXILIUM.

3. Section 5 (Intellectual Property) of the R & D Agreement is incorporated
herein as if set forth at length.

C. Confidentiality

Section 3 (Confidentiality) of the R & D Agreement is incorporated herein as if
set forth at length.

D. Intellectual Property

Section 5 (Intellectual Property) of the R & D Agreement is incorporated herein
as if set forth at length.

E. Exclusivity.

1. During the Term and for [**************] thereafter, neither COBRA nor any of
its Affiliates shall, except as otherwise set forth and provided in this
Agreement, directly or indirectly develop, manufacture, market, sell, detail or
promote any Competing Product. Furthermore, while performing services for
AUXILIUM, including but not limited to the services in the Development Program
Chart, the [********] Project to the extent it relates to the Product and the
[******] services in “Exhibit No. 10,” COBRA agrees not to accept any contract,
or otherwise perform any services that presents a conflict of interest with the
work being performed for AUXILIUM

2. Consideration for Exclusivity

(a) In consideration for the exclusive rights and restrictions granted in
Section VI.E.1, AUXILIUM hereby grants COBRA an option to enter a non-exclusive
long-term manufacturing agreement before the end of [*****************] with
AUXILIUM for AUXILIUM’s, its Affiliates and its licensees for the Product.
Execution of a long term manufacturing agreement is contingent upon COBRA’s
ability to demonstrate regulatory readiness, manufacturing capacity and ability
to offer competitive pricing, and the parties’ ability to negotiate mutually
agreeable terms and conditions and to execute a definitive long-term
manufacturing agreement by [***********] for such an agreement.

 

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(b) In the event the parties have not executed a long term manufacturing
agreement which meets the requirements of Section VI.E.2.(a) above, and the
parties have not extended or replaced this Agreement, then in consideration for
the exclusive rights and restrictions granted in Section VI.E.1, AUXILIUM shall,
for the duration of this Agreement and for [***************] thereafter, pay to
COBRA (net of any deductions or withholding) the sum of [************] per annum
or part year following the first commercial sale of the Product anywhere in the
world or the termination of this Agreement (whichever is earlier).

3. The exclusive rights and restrictions granted in Section VI.E.1 are
contingent upon the payment of the consideration promised in Section VI.E.2. On
termination of a long term manufacturing agreement referred to in Section
VI.E.2.(a) for reasons other than Cobra’s breach of contract or market
withdrawal of Product for regulatory reasons, AUXILIUM will be obliged to make
the payments stated in Section VI.E.2.(b). However, AUXILIUM shall not be
obliged to make such payments if the long term manufacturing agreement is
terminated by AUXILIUM for COBRA’s breach of contract, and AUXILIUM will also
not be liable to make such payments for a period of [*********] if the Product
is withdrawn from the market for regulatory reasons; provided, however, at the
end of such [*********] period AUXILIUM may either resume such payments for the
remainder of the duration of the exclusive rights and restrictions granted in
Section VI.E.1 in which case they shall continue to apply, or elect to cease the
payments at the end of such [*********] period or anytime thereafter in which
case the exclusive rights and restrictions granted in Section VI.E.1 shall cease
to apply. Any failure of payment or other consideration in VI.E.2 by AUXILIUM
will result in the exclusive rights and restrictions granted in Section VI.E.1
ceasing to apply.

 

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VII. REPRESENTATIONS AND WARRANTIES

A. Mutual Representations. Each of the Parties hereto represents, warrants and
covenants:

1. It is a corporation or entity duly organized and validly existing under the
laws of the state or other jurisdiction of its incorporation or formation.

2. The execution, delivery and performance of this Agreement by such Party has
been duly authorized by all requisite corporate or entity action.

3. It has the power and authority to execute and deliver this Agreement and
perform its obligations hereunder.

4. The execution, delivery and performance by such Party of this Agreement does
not and will not conflict with or result in breach of the terms and provisions
of any other agreement or constitute a default under (i) a loan agreement,
guaranty, financing agreement, affecting a product or other agreement or
instrument binding or affecting it or its property; (ii) the provisions of its
charter or operative documents or bylaws; or (iii) any order, writ, injunction
or decree of any court or governmental authority entered against it or by which
any of its property is bound.

5. The execution, delivery and performance of this Agreement by such Party does
not require the consent, approval or authorization of, or notice, declaration,
filing or registration with, any governmental or regulatory authority and the
execution, delivery and performance of this Agreement does not violate any law,
rule or regulation applicable to such Party.

B. COBRA Representations and Warranties. COBRA hereby represents warrants and
covenants:

1. All Services performed and all Product produced pursuant to this Agreement
will conform and perform in accordance with the Specifications and the Quality
Agreement and shall be free from material defects in materials and workmanship,
and will have been Manufactured, Labeled, Packaged, and Tested and shipped in
compliance with the Quality Agreement, cGMP and all Applicable Laws.

2. To COBRA’s knowledge, it has not and will not use the services of any persons
debarred under 21 U.S.C. § 335(a) or (b) in any capacity associated with or
related to the Manufacture of the Product.

3. Neither COBRA nor any of its officers or employees has been convicted of a
felony under the U.S. federal law for conduct relating to the development or
approval, including the process for development or approval, of any drug
product, new drug application or abbreviated new drug application and neither
COBRA nor any of its officers or employees has been convicted of a felony under
the U.S. federal law for conduct relating to the regulation of any product under
the Act.

 

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4. COBRA warrants that any AUXILIUM Assets will be maintained in working
condition, safe, secure and in conditions which are suitable for such equipment
and adequate to prevent any deterioration, subject to reasonable wear and tear.
COBRA further warrants that the maintenance to be carried out according to the
instruction manual developed by the supplier of the machinery, and, in any case,
at least to the same level of care as COBRA takes of its own capital equipment
and tooling as required to fulfil its obligations under this Agreement. Any and
all costs related thereto, for the agreed life of such AUXILIUM Assets, shall be
borne according to Section III.A.

C. AUXILIUM Representations and Warranties

1. AUXILIUM’s Specifications related to the Product conform to all applicable
regulatory and legal requirements and will continue to conform during the term
of the Agreement.

2. AUXILIUM has the right to contract with COBRA for the Manufacture of the
Product.

3. Any AUXILIUM Assets provided to COBRA by AUXILIUM will be in good working
condition and properly maintained and meet all safety and regulatory standards
applicable to COBRA’s use of such AUXILIUM Assets.

VIII. INSURANCE AND INDEMNIFICATION

A. Each Party will, at all times during the Term of this Agreement, maintain in
full force and effect, for the benefit of itself and each other, commercial
general liability insurance coverage of not less than two million dollars
($2,000,000.00) each occurrence combined single limit and bodily injury/property
damage, and five million dollars ($5,000,000) aggregate liability limits. Each
insurer shall name the other as an additional insured or principal and provide
the other party with a certificate of insurance evidencing that the coverage is
current and in full force and effect. Neither Party can terminate or cancel such
insurance without giving the other Party thirty (30) days prior written notice.

B. Section 12 (Indemnification) of the R & D Agreement is incorporated herein as
if set forth at length.

C. Delivery and Title. Each shipment of Product will be shipped to a single
destination in the US designated by AUXILIUM. AUXILIUM may change the
destination for each shipment of Product by informing COBRA in advance of
dispatch. Each shipment of Product will be shipped by COBRA CIP (INCOTERMS 2000)
so that COBRA shall pay for insurance and shipping costs. AUXILIUM shall
reimburse COBRA for shipping costs only.

 

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IX. TERM AND TERMINATION

A. Term.

This Agreement shall commence on the Effective Date and will continue in force
until December 31, 2006, unless sooner terminated pursuant to the terms of this
Agreement.

B. Termination.

 

  1. Either Party may terminate this Agreement:

 

  (a) for material breach if such material breach is not cured by the breaching
Party within thirty (30) days following written notice of such breach from the
non-breaching Party. Any termination of this Agreement in accordance with this
provision shall be effective as of the date of receipt by the breaching Party of
a written notice of termination from the non-breaching Party;

 

  (b) immediately if the other Party becomes subject to bankruptcy or
insolvency.

 

  2. AUXILIUM shall have the right to terminate this Agreement at anytime
effective upon written notice to COBRA, or a later effective date if stated in
the written notice.

 

  (a) Subject to Section IX.B.2(c) below, in the event that AUXILIUM terminates
this Agreement pursuant to this Section IX.B.2 after the [****] GMP run begins
but before it is completed, then COBRA shall complete, and Auxilium shall pay
for, only the [****] GMP run, and no further Services shall be provided or costs
incurred except as may be provided for elsewhere in this Agreement (for example,
technology transfer and stability programs).

 

  (b) Subject to Section IX.B.2(c) below, in the event that AUXILIUM terminates
this Agreement pursuant to this Section IX.B.2 after any BLA Batch run begins
but before that run is completed, then COBRA shall complete, and Auxilium shall
pay for, only the BLA Batch run in progress, and no further Services shall be
provided or costs incurred except as may be provided for elsewhere in this
Agreement (for example, technology transfer and stability programs).

 

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  (c) If AUXILIUM terminates this Agreement after the [****] GMP run or any BLA
Batch run begins but before it is completed because of (i) COBRA’s breach of
contract, (ii) COBRA’s inability to perform (Section II.D), (iii) serious
technical issue(s) which would prohibit continuation of the run, or (iv) serious
regulatory issue(s) which would prohibit continuation of the run, then COBRA
shall NOT complete such run, AUXILIUM shall pay only for Services completed
through the effective date of termination, and no further Services shall be
provided or costs incurred except as may be provided for elsewhere in this
Agreement (for example, technology transfer and stability programs).

 

  3. COBRA shall have the right to terminate this Agreement at anytime effective
upon 120 days prior written notice to AUXILIUM if before September 1, 2006, and
upon 100 days prior written notice to AUXILIUM if on or after September 1, 2006.

 

  4. Fee for Early Termination: In the event that AUXILIUM terminates this
Agreement pursuant to Section IX.B.2, then in addition to any outstanding
amounts yet to be paid for Services already provided by COBRA, AUXILIUM shall
pay COBRA a termination fee based on a rate of [*******] per day for the first
[***] days of the potential notice period and [*******] per day for last [**]
days of the potential notice period for each day less than [***] days’ notice
given by AUXILIUM to COBRA down to a minimum of no fee ($0) if AUXILIUM
provides more than [***] days written notice, and the maximum fee being
[***************************************] if AUXILIUM provides no advance
notice. By way of example if AUXILIUM gave [***] days notice it would pay [**]
days at [*******] per day, and if AUXILIUM gave [*] days notice it would pay
[***] days at [*******] per day plus [**] days at [*****] per day.

 

  5. In the event that AUXILIUM terminates this Agreement pursuant to Section
IX.B.(a) or (b), AUXILIUM shall have no further payment obligations to COBRA
except for amounts outstanding for Services already provided.

C. Effect of Termination.

In the event either Party gives notice of termination, the terms of this
Agreement shall remain in full force and effect (to the extent applicable)
through the date of expiration or termination, and any provision of this
Agreement which by its terms is intended to survive the termination of this
Agreement pursuant to Section XI will survive the termination or expiration of
this Agreement and remain in full force and effect

 

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thereafter. By way of example, and not by limitation, COBRA’s obligations to
complete the stability program for the [****] Engineering Run ([**] stability
pulls over [*** *******]), and AUXILIUM’s obligation to pay COBRA for the
stability program for the [****] Engineering Run, shall survive termination or
expiration of this Agreement. By way of further example, the same shall apply to
the rights, restrictions, obligations and consideration set forth in Section
VI.E.

D. Technology Transfer.

1. COBRA shall provide AUXILIUM with technology transfer assistance of COBRA’s
know how to AUXILIUM or a Third Party from COBRA personnel skilled in the
development or manufacture of the Product upon expiration or termination of this
Agreement for any reason, in the event COBRA is unable to perform for more than
sixty (60) consecutive calendar days, including an event of Force Majeure in
excess of sixty (60) consecutive days, or upon AUXILIUM’s request for no cause.
Technology transfer assistance shall be limited to specific services requested
and approved by AUXILIUM, and shall be provided by COBRA employees designated by
COBRA and approved by AUXILIUM.

2. Such technology transfer shall include all technical information necessary
for the performance of the Services, including, without limitation, (i) chemical
and other scientific data, (ii) processes and analytic methodology used in
validation, stability testing and other testing or analysis, and (iii) all other
know how, data, technical information and all other information necessary to
manufacture the Product. Any disclosure to or use of such technical information
by a Third Party will be subject to appropriate confidentiality and use
restrictions being agreed with COBRA.

3. Costs:

(a) AUXILIUM will bear the costs associated with technology transfer, at
reasonable and customary rates: (i) in the event of expiration of this Agreement
; (ii) if AUXILIUM terminates this Agreement pursuant to Section IX.B.2;
(iii) if COBRA terminates the Agreement pursuant to Section IX.B.1.(a) or (b);
(iv) upon AUXILIUM’s request for technology transfer for no cause; or (v) if
COBRA is unable to perform for more than sixty (60) consecutive calendar days
due to Force Majeure.

(b) COBRA will bear the costs associated with such technology transfer if:
(i) AUXILIUM terminates this Agreement pursuant to Section IX.B.1.(a) or (b);
(ii) if COBRA terminates this Agreement pursuant to Section IX.B.3; or (iii) if
COBRA is unable to perform for more than sixty (60) consecutive calendar days
for reasons other than due to Force Majeure.

 

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X. Economic Price Adjustment

A. This Section applies to the Stability Pull Price referenced in Sections
II.C.1, 2 and 3 above. This Section is not applicable to any other prices or
payments which are the subject of this Agreement.

B. COBRA will adjust the Stability Pull Price (increase or decrease) using the
directions and formula identified below and provide written notice to AUXILIUM
of same. COBRA must submit the documentation that shows how it arrived at the
adjusted price along with a letter of explanation. Unless there is a dispute,
the adjusted Stability Pull Price shall become a new term of this Agreement.

C. The increase or decrease is based upon fluctuations in the latest published
copy of the Consumer Price Index for all urban consumers as published by the U
S. Department of Labor, Bureau of Labor Statistics, Washington, D.C. 20212. The
index is also available through the Internet at the Bureau of Labor Statistics
web site at http://stats.bls.gov/.

D. 1. Price adjustments using the CPI involve changing the Stability Pull Price
by the percent change in the level of the CPI between the annual reference
period and a subsequent time period. This is calculated by first determining the
index point change between the two periods and then the percent change. The
price adjustment shall be calculated as follows:

2. For the 2008 adjustment, obtain the Base Index that is the CPI for the month
of September 2006. Calculate the Index Point Change by subtracting the Base
Index from the CPI value for September 2007. The Index Point Change is then
divided by the Base Index and this result is then multiplied by 100 to equal the
Percent of Adjustment that is the price adjustment value. This Percent of
Adjustment (increase or decrease) shall be applied to the Stability Pull Price,
and shall be effective for calendar year 2008. The adjusted 2008 Stability Pull
Price shall become the base index for the next subsequent Stability Pull Price
adjustment period.

3. For the 2009 adjustment, obtain the Base Index that is the CPI for the month
of September 2007. Calculate the Index Point Change by subtracting the Base
Index from the CPI value for September 2008. The Index Point Change is then
divided by the Base Index and this result is then multiplied by 100 to equal the
Percent of Adjustment that is the price adjustment value. This Percent of
Adjustment (increase or decrease) shall be applied to the 2008 adjusted
Stability Pull Price and shall be effective for calendar year 2009.

 

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XI. SURVIVAL

The provisions of Sections: I; II.E, F and G; III.A.7, 8 and 9; VI.A, B, C, D,
and E; VII.A, B and C; IX.C and D; XI; and XII shall survive expiration or
termination of this Agreement. In addition, COBRA’s obligation to complete the
stability program for the [****] Engineering Run ([**] stability pulls over
[*********]), AUXILIUM’s obligation to pay COBRA for the stability program for
the [****] Engineering Run, and all provisions relating to the Stability Pull
Price and adjustments thereto, shall survive the expiration or termination of
this Agreement. The same shall apply to the rights, restrictions, obligations
and consideration set forth in Section VI.E.

XII. ADDITIONAL TERMS

A. No Waiver. A waiver by either Party of a breach or violation of any provision
of this Agreement will not constitute or be construed as a waiver of any
subsequent breach or violation of that provision or as a waiver of any breach or
violation of any other provision of this Agreement.

B. Severability. Any of the provisions of this Agreement which are determined to
be invalid or unenforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability in such jurisdiction, without
rendering invalid or unenforceable the remaining provisions hereof or affecting
the validity or unenforceability of any of the terms of this Agreement in any
other jurisdiction.

C. Headings and Titles. Any headings and titles used in this Agreement are for
convenience or reference only and shall not affect its construction or
interpretation

D. No Third Party Benefits. Nothing in this Agreement, express or implied, is
intended to confer on any person other than the Parties hereto or their
permitted assigns, any benefits, rights or remedies. Neither COBRA nor AUXILIUM
may assign this Agreement or any rights hereunder or delegate the performance of
any duties hereunder without the prior written approval of the other party,
which approval shall not be unreasonably delayed or withheld; provided, however,
that without such consent, AUXILIUM may assign this Agreement to a purchaser to
an affiliate or in connection with the transfer or sale of all or substantially
all of its assets, stock or business, or to any new entity resulting from its
merger, consolidation or combination with or into another entity.

E. Choice of Law, Jurisdiction, Venue. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to provisions of conflicts of law. Any lawsuit arising from or
related to this Agreement shall be brought exclusively before the United States
District Court for the Eastern District of Pennsylvania or any Commonwealth
court sitting in Chester County, Pennsylvania, and each party hereby consents to
the jurisdiction of any such court.

 

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F. Counterparts. This Agreement shall become binding when any one or more
counterparts hereof, individually or taken together, shall bear the signatures
of each of the Parties hereto. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against the Party
whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument.

G. Entire Agreement. This Agreement is the entire agreement between the Parties
regarding the subject matter herein, and supersedes all prior existing
understandings between the Parties relating to the subject matter hereof. This
Agreement may not be modified except in writing signed by a duly authorized
representative of each of the Parties. No course of dealing or usage of trade
may be used to modify the terms and conditions herein.

H. Other Agreements. Precedence of Agreement. All other terms and conditions of
the R & D Agreement dated February 24, 2005, as well as the Quality Agreement
dated January 11, 2006, are incorporated by reference as if fully set forth
herein. Unless otherwise expressly agreed in writing by a duly authorized
representative of each of the Parties, the terms outlined in this Agreement
shall prevail over any terms and conditions outlined in any other agreement. The
parties hereby terminate the agreement of June 28, 2005 (“Exhibit No. 9”).

IN WITNESS WHEREOF, the Parties hereto have duly executed this Manufacturing and
Supply Agreement as of the date first above written.

 

COBRA BIOLOGICS, LTD.   AUXILIUM PHARMACEUTICALS, INC. By:  

/s/ David Thatcher

  By:  

/s/ Gerri Henwood

Name:   David Thatcher   Name:   Gerri Henwood Title:   CEO   Title:   CEO

 

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CONFIDENTIAL

 

APPENDIX A

 

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Development Program Chart

 

Month

  

Auxilium Deliverables

  

Cobra Deliverables

[****]       [*****]   

1. [*************** ****************** ****************** ******************
****************** **************** ]

 

2. [*************** ****************** **************** ********]

  

1. [********************** ************************]

 

2. [******************]

[***** ***** ]    [**************** ***************** *****************
***************** **************** *****]    [************************
*************************] [****]   

1. [*************** ****************** ****************** ******************
****************** *****************]

 

2. [*************** ****************** **************** *****************
***************** *****************]

  

1. [********************** ************************ *************************
*************************]

 

2. [****************** ************************ ***********************]

 

3. [********************** ************************ *************************
*************************]

[****]   

1. [*************** ****************** ****************** *****************]

 

2. [*************** ****************** ****************]

   1. [********************** *************]

 

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[****]     

1. [********************** ************************ *************************
*******]

 

2. [****************** ***********************]

 

3. [********************** ************************* *************************]

[****]     

1. [********************** ************************** *******]

 

2. [****************** *********************** **********************
*********************** ********************** *********************
**********************]

 

3. [**********************]

[****]     

1. [********************** ************************ *************************
************************ ************************ *************************
************************ ************************* *************************
*************************]

 

2. [*******************]

 

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[****]     

1. [********************** ************************ *************************
************************ ************************ *************************
************************ ************************* *************************
*************************]

 

2. [*******************]

[****]     

1. [********************** ************************ ************************]

 

2. [******************* ***********************]

[****]     

1. [********************** ************************ *************************
************************ ************************* *************************
***********]

 

2. [******************* ***********************]

 

3. [******************* *************]

[***** **** ****]      [*********************] [***** **** ****]     
[*********************] [***** **** ****]      [*********************]

 

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CONFIDENTIAL

 

APPENDIX B

 

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CONFIDENTIAL

 

Provisional Intermediate Specification

[**********]

[***********************************************************************************************************

****************************************************************]

 

Test

  

Method

   Specification       [*****]    [*****] [**********************]   

[**********]

   [********************
*******************]    [********************
*******************] [************************]   

[**********]

   [*********]    [*********] [********************** *********************
***********]   

[**********]

   [***************
***********]    [***************
***********] [********************** ********************* **************]   

[**********]

   [*************]    [*************] [**********************
********************* **************]   

[**********]

   [*****************
*****]    [**********] [********************** *********************
**************]   

[**********]

   [**********]    [*****************
*****] [********************** ********************* *********************
**********************]   

[**********]

   [***************
********************]    [***************
********************] [********************** *********************
********************** ******************* **************]   

[**********]

   [**********]    [**********] [********************** *********************
********************** ******************* **************]   

[**********]

   [**********]    [**********] [********************** *********************
********************** ******************* **************]   

[**********]

   [**********]    [**********] [**************** ***************]   

[**********]

   [*****************]    [*****************] [**********]   

[*********]

   [**********]    [**********]

[***********************************************************************]

 

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[********************************]   [****************************] Date:
6/9/2006   Date: 6/9/2006 [*****************]   [***************]
[****************]   [**************************] [***************]  
[**************************] [********************************]   Date: 6/9/2006
  [*************************]   [****************************]  
[**************************]  

 

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Provisional Drug Substance Specification

[***********]

[***********************************************************************************************************

***********************************************************************]

 

Test

  

Method

   Specification       [******]    [******] [***********************]   

[**********]

   [*******************************
***********************] [************************ *****************]   

[**********]

   [********] [***********************]   

[**********]

   [************] [************************ ************************
*************************]   

[**********]

   [*************
******************
*******]    [*****************
*******************] [************************ ************************]   

[**********]

   [*************] [************************ ************************ ******]   

[**********]

   [*************
**********]    [*************] [************************
************************ ***]   

[**********]

   [*************]    [****************
**********] [********************]   

[**********]

   [*****] [******************]   

[**********]

   [********] [************************ ************************
******************* ***********************]   

[**********]

   [***************
*********************] [************************ *************************
************************ ***********************]   

[**********]

   [*******************************
****************************
************************* ] [************************ ************************
******************* **************** ************************]   

[**********]

   [***********] [************************ *************************
************************ ***********************]   

[**********]

   [***********] [************************ *****************]   

[**********]

   [**********] [*********]   

[******]

   [********]

[*********************************************************************]

 

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[********************************]   [****************************] Date:
6/9/2006   Date: 6/9/2006 [*****************]   [***************]
[****************]   [**************************] [***************]  
[**************************] [********************************]   Date: 6/9/2006
  [*************************]   [****************************]  
[**************************]  

 

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CONFIDENTIAL

 

Provisional Drug Product Specification (for Pre-Clinical Batch)

[*********]

[*********************************************

*************************************************************************************************

******************************************

****************************]

 

Test

  

Method

  

Specification

[******************* **************]    [**********]    [********]
[*******************]    [**********]    [*****************************]
[**********************]    [**********]    [********] [*******************
******************** *********************** **************]    [**********]   

[***************

************************** *******************

**************]

[******************* *************** **************]    [**********]   
[************] [******************* *************** **************]   
[**********]    [*****************] [******************* ***************
**************]    [**********]    [*********************] [*******************
******************** **************** *********************** **************]   
[**********]   

[**************

********************]

[******************* ******************** *********************
******************* **************]    [**********]   

[*************************

*********************

*************************

*********************]

[******************* ******************** ********************* *********
*************** **************]    [**********]    [*************]

 

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CONFIDENTIAL

 

[********************************]    [****************************] Date:
6/9/2006    Date: 6/9/2006 [*****************]    [***************]
[****************]    [**************************] [***************]   
[**************************] [********************************]    Date:
6/9/2006    [*************************]    [****************************]   
[**************************]   

 

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CONFIDENTIAL

 

APPENDIX C

 

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CONFIDENTIAL

 

Auxilium Pharmaceuticals Inc.

[**************************************]

[********************************]

 

1. TESTING SCHEDULE

The following table indicates when samples will need to be removed from storage
for analysis. [******************************************************
********************]

 

Storage Conditions

   Time Points (Months)    [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]

[******** ****]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[*******************]

 

2. TESTS PERFORMED

The table below outlines the stability tests that will be performed at each time
point. All tests will be performed by [**********************************
**********************************************************************************]

 

Test Method

  

Test Method
Number

   Time Points (Months)       [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]  
[*]   [*]   [*]   [*]   [*]

[*********]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[***]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[**********]

[*********** *******]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[*********]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[***]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[***]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[******* *****]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[******* *****]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[***]

  

[*************]

   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]   [*]

[*********]

  

[*************]

   [*]                         [*]

[***************]

 

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CONFIDENTIAL

 

Auxilium Pharmaceuticals Inc.

[**************************************]

[********************************]

 

3. ACCEPTANCE CRITERIA

Stability results are to be compared to [*************************
***********************] Note, based on the tests performed as part of this
stability protocol only the following specifications will be used in the
comparison. Since the AA4500 Drug Substance is [****************************
***********************], the [**************] listed below may have one
specification for [********************************************
******************************] depending on [*********************].

 

Test Method

  

Test Method
Number

  

Specification

     

[***************]

  

[***************]

[***********]    [***********]   
[****************************************************] [***]    [***********]   
[***********] [***********]    [***********]    [***************************
****************]    [*************************** ****************] [*********]
   [***********]   

[***************************************************

**************************************************]

[***]    [***********]    [****************************************] [***]   
[***********]    [************************] [**********]    [***********]   
[************************]    [***] [***********]    [***********]    [***]   
[****************************] [***]    [***********]    [********]
[***********]    [***********]    [***********]

 

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CONFIDENTIAL

 

Auxilium Pharmaceuticals Inc.

[**************************************]

[********************************]

 

1. TESTING SCHEDULE

The following table indicates when samples will need to be removed from storage
for analysis. [*******************************************************
*************************]

 

Storage Conditions

   Time Points (Months)      [*]     [*]     [*]     [*]     [*]     [*]     [*]
    [*]     [*]     [*]     [*]     [*]     [*]   [***]    [ *]   [ *]   [ *]  
[ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]

[*********************]

 

2. TESTS PERFORMED

The table below outlines the stability tests that will be performed at each time
point. All tests will be performed by [****************************].
[*********************************]

 

Test Method

  

Test Method
Number

   Time Points (Months)         [*]     [*]     [*]     [*]     [*]     [*]    
[*]     [*]     [*]     [*]     [*]     [*]     [*]   [**********]   
[**********]    [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [
*]   [ *]   [ *]   [ *] [***]    [**********]    [ *]   [ *]   [ *]   [ *]   [
*]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]

[**********]

[******** ******]

   [**********]    [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]
  [ *]   [ *]   [ *]   [ *] [********]    [**********]    [ *]   [ *]   [ *]   [
*]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *] [***]   
[**********]    [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [
*]   [ *]   [ *]   [ *] [***]    [**********]    [ *]   [ *]   [ *]   [ *]   [
*]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *] [******** ******]   
[**********]    [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [
*]   [ *]   [ *]   [ *] [******** ******]    [**********]    [ *]   [ *]   [ *]
  [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *] [***]   
[**********]    [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [ *]   [
*]   [ *]   [ *]   [ *]

[*********************]

 

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CONFIDENTIAL

 

Auxilium Pharmaceuticals, Inc.

[**************************************]

[********************************]

 

3. ACCEPTANCE CRITERIA

Stability results are to be compared to [*******************************
**********]. Note, based on the tests performed as part of this stability
protocol only the following specifications will be used in the comparison. Since
the AA4500 Drug Product [************************************* ************],
the [***************] listed below may have one specification for
[**************************************************** *************] depending
on [***********************].

 

Test Method

  

Test Method
Number

  

Specification

[************ *********]    [************]    [**********] [**************
********]    [************]   
[*************************************************] [***]    [************]   
[****************] [*********]    [************]   
[*******************************************************
**************************] [*********]    [************]   
[*******************************************************
***************************************************] [***]    [************]   
[**************************************] [***]    [************]   
[***********************] [************]    [************]   
[***********************]    [***] [************]    [************]    [***]   
[************************] [***]    [************]    [**************]

 

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