<PAGE>

                                                                    Exhibit 10.9

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                                                                  EXECUTION COPY

                            MASTER SERVICES AGREEMENT

     This Master Services Agreement (the "Agreement") is made and entered into
this 25th day of July, 2005 (the "Effective Date"), by and between AAI
Development Services, a division of aaiPharma Inc. ("AAI DS") having a place of
business at 2320 Scientific Park Dr., Wilmington, NC 28405 and Xanodyne
Pharmaceuticals, Inc., a Delaware corporation ("Purchaser") having a place of
business at 7300 Turfway Road, Suite 300, Florence, KY 41042. Purchaser and AAI
DS are referred to singly as "Party" and jointly as "Parties" throughout this
Agreement.

                                   BACKGROUND:

     A. aaiPharma Inc., aaiPharma LLC and Purchaser entered into that certain
Asset Purchase Agreement dated the 6th day of May, 2005, as amended as of June
7, 2005 and July 18, 2005 (the "APA").

     B. It is a condition precedent to the Closing that the Parties enter into
this Agreement.

     C. AAI DS is in the business of providing (i) analytical services (MD/MV),
analytical (routine), RTP special analytical services, raw material laboratory
services, physical chemistry testing, stability services (stability setup,
protocol development, storage, analytical testing, and photostability studies),
biotechnology testing, microbiology services, bioanalytical services,
formulation development, specialized manufacturing (pilot scale and clinical
trial material), project management for the aforementioned services, management
of bioavailability/bioequivelance (BA/BE) Phase I clinical trials (including
clinical supplies distribution, pallet storage, study project management, data
management statistics, biostatistics, medical affairs assistance and
pharmacovigilence assistance) (collectively, "Base Services"); (ii) quality
control and assurance assistance (including stability studies oversight and
batch record review), medical affairs assistance and pharmacovigilence
assistance and regulatory reporting assistance services (collectively, the
"Additional Services"); and (iii) management of Phase II, III and IV clinical
trials (including study project management, data management, biostatistics,
medical affairs assistance and pharmacovigilence assistance) (collectively, the
"Additional Clinical Trial Services," and together with the Base Services and
the Additional Services, the "Services").

     D. Purchaser considers the proposed work as critical to its success and
requires that all work performed under this Agreement meet generally accepted
industry standards of quality. Purchaser desires to obtain such Services from
AAI DS throughout the Term (as defined below) of this Agreement in accordance
with the terms set forth herein and in accordance with a defined specification
and scope of work to be mutually agreed upon by the Parties in writing,
including any change orders, as further described below (each hereinafter a
"Service Contract").

<PAGE>

     E. On May 10, 2005, aaiPharma Inc. and certain of its domestic affiliates
(collectively the "Debtors") filed for chapter 11 bankruptcy protection (the
"Bankruptcy Cases") in the Bankruptcy Court for the District of Delaware (Case
No. 05-11341).

     F. The Debtors are authorized to continue to operate their businesses and
manage their properties as debtors in possession pursuant to sections 1107(2)
and 1108 of the Bankruptcy Code.

     NOW THEREFORE, for and in consideration of the mutual covenants and
agreements set forth hereinafter and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
do hereby agree as follows:

                                   ARTICLE I

                               SCOPE OF AGREEMENT

     1.1 Unless it does not have the expertise or resources, as determined by
Purchaser and AAI DS collectively in the exercise of their reasonable judgment,
AAI DS will be engaged to perform one hundred percent (100%) of Purchaser's
requirements for Base Services for the Term with respect to (i) the Marketed
Products, the Lifecycle Products and the New Products, and (ii) pursuant to
Section 3.4 of the APA, any Pain Products containing (a) diclofenac and/or
propoxyphene or (b) an opioid/APAP combination or an opioid/NSAID combination
that Purchaser decides to independently develop (collectively, the "Independent
Pain Products," together with the Marketed Products, the Lifecycle Products and
the New Products, the "Services Products"). Notwithstanding the foregoing,
should AAI DS and Purchaser not be in agreement with respect to whether AAI DS
has the expertise or resources to perform the duties requested, Purchaser shall
make final determination as to which Services are performed by AAI DS, using
Purchaser's reasonable judgment. For avoidance of doubt, Purchaser must engage
AAI DS to perform the Base Services, provided it is deemed to have the proper
expertise and resources, even though Purchaser has the ability and/or expertise
to perform such Base Services on its own behalf by Purchaser's employees.

     1.2 Unless it does not have the expertise or resources, as determined by
Purchaser and AAI DS collectively in the exercise of their reasonable judgment,
AAI DS will be engaged to perform 100% of Purchaser's requirements for
Additional Services for the Term with respect to Services Products.
Notwithstanding the foregoing, should AAI DS and Purchaser not be in agreement
with respect to whether AAI DS has the expertise or resources to perform the
duties requested, Purchaser shall make final determination as to which Services
are performed by AAI DS, using Purchaser's reasonable judgment. For avoidance of
doubt, unlike with respect to the Base Services, Purchaser is not required to
engage AAI DS to perform the Additional Services if Purchaser wishes to perform
such Additional Services on its own behalf by Purchaser's employees.

     1.3 Unless it does not have the expertise or resources, as determined by
Purchaser and AAI DS collectively in the exercise of their reasonable judgment,
AAI DS will be engaged to perform 100% of Purchaser's requirements for
Additional Clinical Trial Services for the Term with respect to Services
Products; provided, however, that (i) for avoidance of doubt, Purchaser


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must engage AAI DS to perform the Additional Clinical Trial Services even though
Purchaser has the ability and/or expertise to perform such Additional Clinical
Trial Services on its own behalf by Purchaser's employees, provided however that
if, taking into account the nature of the project and the capabilities of AAI
DS, Purchaser can reasonably demonstrate the greater likelihood of success of
the project or a greater economic benefit to both Parties, Purchaser will be
permitted to conduct the applicable clinical trial using either internal
resources or a third party, and (ii) in the event Purchaser exercises its rights
to conduct the applicable clinical trial using either internal resources or a
third party under clause (i) of this Section 1.3 with respect to a Services
Product and Sellers are entitled to a royalty under the APA with respect to such
Services Product, Sellers shall be entitled to receive the royalty as if Sellers
or their respective Subsidiaries developed such Services Product all the way up
to commercialization. Notwithstanding the foregoing, in no event will Purchaser
use a price quoted by AAI DS to solicit competitive bids for Additional Clinical
Trial Services. Notwithstanding the foregoing, should AAI DS and Purchaser not
be in agreement with respect to whether Purchaser can reasonably demonstrate the
greater likelihood of success of the project or a greater economic benefit to
both Parties by having the clinical trials performed by internal resources or a
third party, Purchaser shall make such final determination, using Purchaser's
reasonable judgment.

     1.4 The Parties hereby agree to enter into a Service Contract for each
engagement of the performance of Services. Each Service Contract shall include,
among other things, the scope of the Services to be performed, the fees to be
paid by Purchaser to AAI DS for the performance of the Services, and the payment
schedule for those fees. Service Contracts shall be in the form set forth in
Exhibit B attached hereto and incorporated herein by reference.

     1.5 Services provided by AAI DS shall comply in all material respects with
Applicable Laws.

     1.6 The Parties understand that AAI DS shall use commercially reasonable
efforts to initiate, conduct and complete the Services as set forth in a Service
Contract in a timely fashion. Purchaser understands and agrees that completing
the Services as set forth in the Service Contract assumes the full cooperation
of Purchaser as well as other third parties.

                                   ARTICLE II

                             PROJECT IMPLEMENTATION

     2.1 The execution of a Service Contract shall authorize AAI DS to proceed
under the terms and conditions of this Agreement and such Service Contract.

     2.2 AAI DS shall use commercially reasonable efforts to anticipate the
scope of activities necessary to complete Services established by a Service
Contract. However, Service Contracts constitute both Parties' informed estimate
of those Services necessary to satisfactorily complete the project and are based
upon the Parties' then current knowledge of the factual situation as well as the
then current regulatory environment. Therefore, the scope of proposed Services
(and the related fees and timeline) may require modification of the Service
Contract during the course of performance. In the event additional or different
Services are required, AAI DS shall notify Purchaser immediately and shall not
be authorized or required to perform such


                                        3

<PAGE>

modified Services unless and until Purchaser requests such modification in
writing, and AAI DS agrees in writing, to perform such additional or different
Services. If AAI DS does not have the expertise or resources or is otherwise
unable to perform the Services as modified, as determined by Purchaser and AAI
DS collectively in the exercise of their reasonable judgment, Purchaser may
utilize a third party for the performance of such modified Services.
Notwithstanding the foregoing, should AAI DS and Purchaser not be in agreement
with respect to whether AAI DS has the expertise or resources or is otherwise
unable to perform the Services as modified, Purchaser shall make final
determination as to which Services are performed by AAI DS, using Purchaser's
reasonable judgment. If AAI DS is willing to provide such additional or
different Services, AAI DS shall promptly acknowledge Purchaser's written
authorization by issuing a change order for such additional or different
Services.

     2.3 Purchaser shall have the right to review and approve the qualifications
of all personnel AAI DS assigns to perform work under this Agreement and any
Service Contract, such approval not to be unreasonably withheld or delayed.
Purchaser shall also have the right to designate, for good cause, that any such
personnel be removed or replaced. AAI DS may also replace personnel when
necessary and appropriate.

     2.4 AAI DS will use commercially reasonable efforts to complete the agreed
upon Services within the limits set forth in the executed Service Contract. The
Parties will agree upon target timelines for completion of the Services.
However, the Parties recognize that the Services to be provided hereunder are
not subject to precise advance determination, unless otherwise stated in the
Service Contract or otherwise. To the extent there is any discrepancy between
the provisions of this Agreement and a Service Contract, the terms and
conditions of this Agreement shall govern.

     2.5 Acceptance will occur when deliverables under an applicable Service
Contract meet the agreed upon acceptance criteria as described in the applicable
Service Contract. If the deliverables do not meet the acceptance criteria when
they are offered by AAI DS to Purchaser for acceptance, Purchaser will give AAI
DS detailed written notification of the deficiency or non-conformance within
thirty (30) days after receipt of the applicable deliverable. AAI DS then shall,
within thirty (30) days of receipt of such written notification, either correct
the deficiency or non-conformance or provide Purchaser with a plan reasonably
acceptable to Purchaser for correcting that deficiency or non-conformance. If
the deficiency or non-conformance is not corrected or if an acceptable plan is
not established during such period, then, upon request by Purchaser, AAI DS
shall refund Purchaser all fees paid by Purchaser relating to such deliverable
as specified in the applicable Service Contract.

     2.6 The Parties agree that all disputes between them relating to this
Agreement shall be submitted for informal resolution to their respective chief
executive officers and any remaining dispute shall be submitted to a panel of
three arbitrators, with each Party choosing one panel member and the third
member (the "Third Member") chosen by the first two panel members. The Third
Member will be experienced in pharmaceutical development services. The
proceedings shall be conducted in accordance with the Commercial Dispute
Resolution Procedures (the "CDRP") of the American Arbitration Association and
shall be conducted in a location mutually acceptable to the Parties. The award
of the arbitrators shall include a written explanation of their decision, shall
be limited to remedies otherwise available in court and shall


                                        4

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be binding upon the Parties and enforceable in any court of competent
jurisdiction. The panel will set and follow an expedited schedule for the
proceeding so that the panel's final decision and explanation will be issued not
later than 45 days after engagement of the services of the Third Member (unless
extended by mutual agreement of the Parties or by the panel), and shall utilize
"Expedited Procedures" (as defined in the CDRP). The losing party shall pay the
costs of any such arbitration, which costs shall not be Out-of-Pocket Expenses
(as defined in Section 3.7.)

                                   ARTICLE III

                          PAYMENT FOR SERVICES RENDERED

     3.1 The initial prices for the Services are set forth on Exhibit A (the
"Purchase Prices"). Purchaser agrees to pay for Services according to the
applicable Service Contract. A deposit of [**]% of the projected cost of each
project shall be due upon the signing of the applicable Service Contract.

     3.2 AAI DS may increase the Purchase Prices effective as of each January 1
during the Term by the amount equal to the percentage change in the Producers
Price Index, Drugs and Pharmaceuticals, Preparations, ethical (prescription)
(Code 0635) (or any comparable successor index) during the twelve month period
ending on the September 30 immediately preceding the January 1 Purchase Price
adjustment. AAI DS shall provide written notification of any increase in the
Purchase Prices by the November 1 prior to the January 1 effective date of the
increase in Purchase Prices.

     3.3 During the first year of the Initial Term ("Year 1"), Purchaser shall
purchase or offer to purchase, in accordance with this Section 3.3
(collectively, "Acquire") Services from AAI DS for amounts, inclusive of
Out-of-Pocket Expenses (as defined in Section 3.7) ("Service Amounts") that, in
the aggregate, are equal to at least $10,000,000 (the "Year 1 Minimum"). During
the second year of the Initial Term ("Year 2"), Purchaser shall Acquire Service
Amounts that, in the aggregate, are equal to at least $5,000,000 (as may be
adjusted, the "Year 2 Minimum"). During the third year of the Initial Term
("Year 3", and collectively with Year 1 and Year 2, the "Subject Years"),
Purchaser shall Acquire Service Amounts that, in the aggregate, are equal to at
least $5,000,000 (as may be adjusted, the "Year 3 Minimum", and collectively
with the Year 1 Minimum and the Year 2 Minimum, the "Minimum Purchase Amounts");
provided, however, that if on or prior to April 30, 2006, there has been
completion of the appropriate Phase I PK Study or Studies for the Darvocet-N XR
Product and agreement or consent by the FDA to allow the initiation of the Phase
III efficacy studies based on the Phase I data, the Year 2 Minimum and the Year
3 Minimum shall each be $10,000,000 (subject to adjustment as provided for in
Section 3.5 and Section 3.6 (as applicable)).

(a)  The Service Amounts that shall be credited towards Purchaser's satisfaction
     of the Minimum Purchase Amount in each of the Subject Years shall be for
     the actual Services in respect of which payments are accrued during the
     applicable Subject Year plus the Out-of-Pocket Expenses that are invoiced
     to Purchaser by AAI DS during the applicable Subject Year plus any
     Out-of-Pocket Expenses that are invoiced on or prior to 45 days after the
     end of the applicable Subject Year but which relate to the applicable
     Subject Year. The Parties acknowledge and agree that, notwithstanding
     anything herein or in any


                                        5

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     Service Contract to the contrary, AAI DS shall be entitled to invoice, and
     Purchaser shall pay, all Service Amounts that are credited towards
     Purchaser's satisfaction of the Minimum Purchase Amount for an applicable
     Subject Year.

(b)  Each of Purchaser and AAI DS acknowledges and agrees that (i) Services
     which Purchaser has engaged AAI DS to provide with regard to XP12B on and
     after the Effective Date shall be credited towards Purchaser's satisfaction
     of the Minimum Purchase Amount for the applicable Subject Year and (ii) any
     Services performed by AAI DS with regard to the Odyssey Product engaged by
     Purchaser or a third party shall be credited towards Purchaser's
     satisfaction of the Minimum Purchase Amount for the applicable Subject
     Year. For the avoidance of doubt, any out-of-pocket expenses invoiced to a
     third-party by AAI DS related to Services performed for such third-party
     shall only be credited against Purchaser's satisfaction of the applicable
     Minimum Purchase Amount if such out-of-pocket expenses paid by such
     third-party are Out-of-Pocket Expenses, as defined in Section 3.7 below
     (i.e., if Purchaser pays a 20% margin on such Out-of-Pocket Expenses).

(c)  If Purchaser offers to engage AAI DS to provide Services for which AAI DS
     has the expertise and resources to perform, as determined in AAI DS's
     reasonable discretion (solely for purposes of this clause (c)), and AAI DS
     does not choose to perform the Services, an amount equal to the replacement
     cost for the same Services incurred by Purchaser shall be credited towards
     Purchaser's satisfaction of the Minimum Purchase Amount for the applicable
     Subject Year in which such amounts are incurred by Purchaser.

(d)  For the avoidance of doubt, Reimbursable Expenses under the Odyssey
     Co-Development Agreement shall not be credited towards Purchaser's
     satisfaction of any Minimum Purchase Amount, other than Services as
     contemplated in Section 3.3(b) above and out-of-pocket expenses related to
     such Services invoiced by AAI DS that are Out-of-Pocket Expenses (as
     defined in Section 3.7 below). Notwithstanding anything to the contrary
     herein, Purchaser shall not be permitted to credit any amount against any
     Minimum Purchase Amount if (i) AAI DS is determined not to have the
     expertise or resources to perform the Service in accordance with the
     provisions of Article 2 of this Agreement or is otherwise unable to perform
     the Services, or (ii) except as provided in clause (c) of this Section 3.3,
     Purchaser employs or otherwise contracts for a third party to perform the
     Services.

     3.4 In the event that Purchaser does not Acquire in a Subject Year Service
Amounts that, in the aggregate, equal at least the then applicable Minimum
Purchase Amount, Purchaser shall pay to AAI DS, within sixty (60) calendar days
after the end of such Subject Year, the difference between (i) the applicable
Minimum Purchase Amount for such Subject Year and (ii) the amount of the
aggregate Service Amounts that Purchaser has accrued (in respect of Services)
and paid (in respect of Out-of-Pocket Expenses) in respect of such Subject Year.

     3.5 In the event that Purchaser has Acquired in Year 1 Service Amounts
that, in the aggregate, equal more than the Year 1 Minimum, then the amount of
such excess, but not to


                                        6

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exceed twenty percent (20%) of the Year 1 Minimum (i.e., $2 million), shall be
credited towards Purchaser's satisfaction of the Year 2 Minimum.

     3.6 In the event that Purchaser has Acquired in Year 2 Service Amounts
that, in the aggregate, equal more than the Year 2 Minimum, then the amount of
such excess, but not to exceed twenty percent (20%) of the Year 2 Minimum (i.e.,
$1 million or $2 million, as applicable), shall be credited towards Purchaser's
satisfaction of the Year 3 Minimum.

     3.7 In addition, Purchaser will reimburse AAI DS for reasonable and
customary documented out-of-pocket expenses for raw materials which shall be
invoiced by AAI DS to Purchaser at cost plus a 20 percent (20%) handling fee
(the "Raw Material Expenses"). Other out-of-pocket expenses, such as travel and
pass through expenses (e.g., investigator fees), will be expensed at cost on a
"pass through basis" plus a twenty percent (20%) handling fee ("Other Expenses",
and collectively, with the Raw Material Expenses, the "Out-of-Pocket Expenses").
AAI DS shall obtain prior written consent for any individual Other Expense in
excess of $10,000. Purchaser agrees to pay in advance any substantial pass
through expenses.

     3.8 Unless otherwise set forth in the applicable Service Contract, AAI DS
shall invoice Purchaser on a calendar month basis for Services rendered and
expenses incurred during the previous calendar month. Invoices are due and
payable within thirty (30) days of date of invoice. All payments to AAI DS shall
be made in U.S. dollars. Invoice balances not remitted within thirty (30) days
of receipt of invoice shall be subject to a one and one-half percent (1.5%) per
month interest charge. Should any part of the invoice be in dispute, Purchaser
shall pay the remainder of the undisputed amount according to the terms and
conditions described herein while said dispute is being resolved.

     3.9 The fees payable under this Agreement shall not, and shall not be
construed to, include local, state, federal or foreign sales and use taxes, if
any, and any such taxes shall be assumed and paid by Purchaser.

     3.10 AAI DS shall not subcontract any of the Services as set forth in a
Service Contract, other than to an Affiliate of AAI DS, without the prior
written consent of Purchaser, which consent shall not be unreasonably withheld
or delayed.

     3.11 Any amounts payable to Purchaser hereunder, including, without
limitation, claims for indemnification, shall be administrative expense priority
claims in the Bankruptcy Cases pursuant to sections 503 and 507(a)(l) of the
Bankruptcy Code.

     3.12 The obligations of AAI DS under this Agreement or the Service
Contracts shall not be discharged by entry of an order confirming a plan of
reorganization in the Bankruptcy Cases and, pursuant to section 1141 (d)(4) of
the Bankruptcy Code, AAI DS has waived such discharge.


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                                   ARTICLE IV

                              INTELLECTUAL PROPERTY

     4.1 AAI DS hereby assigns to Purchaser all right, title and interest in
Intellectual Property discovered by AAI DS in the course of providing Services
which are directly and solely related to the Services (collectively, the
"Project IP"); provided, that, notwithstanding the foregoing, to the extent such
Project IP relates to, or is an improvement upon, Licensed Assets or Licensed
Intellectual Property (such Project IP, collectively, "Licensed Project IP"), in
lieu of the assignment provided above, AAI DS hereby grants to Purchaser a
non-exclusive, perpetual, transferable, royalty-free license (with a right of
sublicense without consent) in the Territory to all of AAI DS's right, title and
interest in such Licensed Project IP. For purposes of clarity, and
notwithstanding anything in this Agreement or any Service Contract to the
contrary, AAI DS will continue to own any Intellectual Property included in the
Project IP that was owned or independently developed by AAI DS prior to
providing any Services or developed independent of such Services (the "AAI DS
Proprietary Technology") and has the right to use such Intellectual Property in
AAI DS's sole discretion. In the event that Purchaser chooses to further develop
and/or commercialize a technology comprising, in whole or in part, AAI DS
Proprietary Technology, and the AAI DS Proprietary Technology is not already
licensed to Purchaser under the APA, Purchaser must first obtain a license for
such development and/or commercialization from AAI DS, to be memorialized by a
separate writing negotiated in good faith by AAI DS and Purchaser.

     4.2 AAI DS will, at the expense and the written request of Purchaser, do
all reasonable acts and execute all documents as Purchaser may reasonably
request to transfer to and vest in Purchaser the ownership and registration of
all Intellectual Property rights that may exist in such owned Project IP and to
provide such license rights in the Licensed Project IP.

Purchaser acknowledges that AAI DS is in the business of providing Services for
a variety of organizations other than Purchaser. Accordingly, except to the
extent otherwise set forth in the APA, nothing in this Agreement shall preclude
or limit AAI DS from providing Services or developing materials for itself or
other clients, or from utilizing the general knowledge gained during the course
of its performance hereunder, the AAI DS Proprietary Technology or the Licensed
Project IP to perform similar Services for other clients, provided that such
provision of Services or development of materials does not constitute a breach
of confidentiality under Article V herein or any provisions of the APA.

The forgoing terms and provisions of this Article IV are in addition to the
relevant terms and provisions of the APA; provided that, to the extent any of
the terms and provisions set forth in this Article IV are inconsistent with the
terms of the APA, the terms of the APA shall govern.


                                       8

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                                    ARTICLE V

                                 CONFIDENTIALITY

     5.1 Section 8.9(d) of the APA is incorporated herein by reference and shall
be binding on the Parties, and as incorporated herein, shall continue until the
fifth (5th) anniversary of the expiration or earlier termination of this
Agreement.

     5.2 Neither Party (nor any of their respective Affiliates) shall issue any
press release or make any public announcement with respect to this Agreement and
the transactions contemplated hereby without obtaining the prior written consent
of the other Party (such consent not to be unreasonably withheld or delayed),
except as may be required by Applicable Law upon the advice of counsel and only
if the disclosing Party provides the non-disclosing Party with a reasonable
opportunity to first review the release or other public announcement.

                                   ARTICLE VI

                          REPRESENTATION AND WARRANTIES

     6.1 Representations and Warranties of AAI DS. AAI DS hereby represents and
warrants as follows:

     (a) AAI DS shall comply in all material respects with all Applicable Laws
in the performance of the Services.

     (b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby are within AAI DS's powers
and have been duly authorized by all necessary action on the part of AAI DS.
This Agreement has been duly executed and delivered by AAI DS and, assuming the
due execution and delivery hereof by Purchaser and approval by the Bankruptcy
Court, constitutes legal, valid and binding obligations of AAI DS, enforceable
against AAI DS in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws from time to time in effect which affect the enforcement of
creditors' rights generally.

     (c) The execution, delivery and performance by AAI DS of this Agreement
does not and will not (i) contravene or conflict with the organizational
documents of aaiPharma Inc., (ii) contravene or conflict with or constitute a
violation of any Applicable Laws, or (iii) materially breach or constitute a
material default under the provisions of any material contract, agreement or
instrument to which it is a party or by which it is bound.

     (d) AAI DS is not debarred and has not and shall not knowingly and
intentionally use in any capacity the services of any Third Person debarred
under subsections 306(a) or (b) of the Generic Drug Enforcement Act of 1992.

     (e) All Services performed by AAI DS pursuant to this Agreement will meet
generally accepted industry standards of quality.


                                       9

<PAGE>

     (f) AAI DS shall not seek to reject or modify this Agreement or any Service
Contract in the Bankruptcy Cases including, without limitation, pursuant to any
plan of reorganization or liquidation filed in the Bankruptcy Cases and AAI DS
shall not seek to modify this Agreement or any Service Contract in any
subsequent chapter 11 cases commenced under the Bankruptcy Code.

     EXCEPT AS SET FORTH IN THIS SECTION 6.1, AAI DS MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS ALL SUCH
REPRESENTATIONS AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, INFRINGEMENT, TITLE OR FITNESS FOR A PARTICULAR
PURPOSE.

     6.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants as follows:

     (a) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby are within Purchaser's
powers and have been duly authorized by all necessary action on the part of
Purchaser. This Agreement has been duly executed and delivered by Purchaser and,
assuming the due execution and delivery hereof by AAI DS and approval by the
Bankruptcy Court, constitutes legal, valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect which affect the
enforcement of creditors' rights generally.

     (b) The execution, delivery and performance by Purchaser of this Agreement
does not and will not (i) contravene or conflict with the organizational
documents of Purchaser, (ii) contravene or conflict with or constitute a
violation of any Applicable Laws, or (iii) materially breach or constitute a
material default under the provisions of any material contract, agreement or
instrument to which it is a party or by which it is bound.

                                   ARTICLE VII

                                 INDEMNIFICATION

     7.1 By Purchaser. Purchaser hereby indemnifies AAI DS and its directors,
officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and permitted assigns (collectively, the "AAI DS
Indemnified Parties") against and agrees to hold each of them harmless from any
and all losses, liabilities, obligations, damages, costs and expenses ("Losses")
incurred by any AAI DS Indemnified Party to the extent based upon, attributable
to or resulting from: (a) any misrepresentation or breach of warranty made by
Purchaser in this Agreement, (b) any breach of any covenant or agreement made or
to be performed by Purchaser pursuant to this Agreement and/or applicable
Service Contracts, or (c) any Services provided to the Purchaser pursuant to
this Agreement and/or applicable Service Contracts, unless such Losses arise
from claims for which AAI DS would be required to provide indemnification
pursuant to Section 7.2.


                                       10

<PAGE>

     7.2 By AAI DS. AAI DS hereby indemnifies Purchaser and its directors,
officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and permitted assigns (collectively, the "Purchaser
Indemnified Parties") against and agrees to hold each of them harmless from any
and all Losses incurred by any Purchaser Indemnified Party to the extent based
upon, attributable to or resulting from: (a) any misrepresentation or breach of
warranty made by AAI DS in this Agreement and (b) any breach of any covenant or
agreement made or to be performed by AAI DS pursuant to this Agreement and/or
applicable Service Contracts; provided, however, that in no event shall AAI DS
have indemnification obligations in excess of two times the aggregate fees
received by AAI DS under the applicable Service Contracts.

     7.3 Indemnification Procedures

     (a) In the event that any Legal Proceeding shall be instituted or that any
claim or demand shall be asserted by any Person in respect of which payment may
be sought under Section 7.1 or Section 7.2 hereof (regardless of the limitations
set forth in Section 7.2) ("Indemnification Claim"), the indemnified party shall
reasonably and promptly cause written notice of the assertion of any
Indemnification Claim of which it has knowledge which is covered by this
indemnity to be forwarded to the indemnifying party. The indemnifying party
shall have the right, at its sole expense, to be represented by counsel of its
choice, which must be reasonably satisfactory to the indemnified party, and to
defend against, negotiate, settle or otherwise deal with any Indemnification
Claim which relates to any Losses indemnified against hereunder; provided that
the indemnifying party shall have acknowledged in writing to the indemnified
party its unqualified obligation to indemnify the indemnified party as provided
hereunder. If the indemnifying party elects to defend against, negotiate, settle
or otherwise deal with any Indemnification Claim which relates to any Losses
indemnified against hereunder, it shall within twenty (20) Business Days (or
sooner, if the nature of the Indemnification Claim so requires) notify the
indemnified party of its intent to do so. If the indemnifying party elects not
to defend against, negotiate, settle or otherwise deal with any Indemnification
Claim which relates to any Losses indemnified against hereunder, fails to notify
the indemnified party of its election as herein provided or contests its
obligation to indemnify the indemnified party for such Losses under this
Agreement, the indemnified party may defend against, negotiate, settle or
otherwise deal with such Indemnification Claim. If the indemnified party defends
any Indemnification Claim, then the indemnifying party shall reimburse the
indemnified party for any and all Expenses of defending such Indemnification
Claim upon submission of periodic bills. If the indemnifying party shall assume
the defense of any Indemnification Claim, the indemnified party may participate,
at his or its own expense, in the defense of such Indemnification Claim;
provided, however, that such indemnified party shall be entitled to participate
in any such defense with separate counsel at the expense of the indemnifying
party if (i) so requested by the indemnifying party to participate or (ii) in
the reasonable opinion of counsel to the indemnified party a conflict or
potential conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable; and provided,
further, that the indemnifying party shall not be required to pay for more than
one such counsel for all indemnified parties in connection with any
Indemnification Claim. The parties hereto agree to cooperate fully with each
other in connection with the defense, negotiation or settlement of any such
Indemnification Claim. Notwithstanding anything in this Section 7.3 to the
contrary, neither the indemnifying party nor the indemnified party shall,
without the written


                                       11

<PAGE>

consent of the other party, settle or compromise any Indemnification Claim or
permit a default or consent to entry of any judgment unless the claimant and
such party provide to such other party an unqualified release from all liability
in respect of the Indemnification Claim. Notwithstanding the foregoing, if a
settlement offer solely for money damages is made by the applicable third party
claimant, and the indemnifying party notifies the indemnified party in writing
of the indemnifying party's willingness to accept the settlement offer and,
subject to the applicable limitations of Section 7.2, pay the amount called for
by such offer, and the indemnified party declines to accept such offer, the
indemnified party may continue to contest such Indemnification Claim, free of
any participation by the indemnifying party, and the amount of any ultimate
liability with respect to such Indemnification Claim that the indemnifying party
has an obligation to pay hereunder shall be limited to the lesser of (A) the
amount of the settlement offer that the indemnified party declined to accept
plus the Losses of the indemnified party relating to such Indemnification Claim
through the date of its rejection of the settlement offer or (B) the aggregate
Losses of the indemnified party with respect to such Indemnification Claim. If
the indemnifying party makes any payment on any Indemnification Claim, the
indemnifying party shall be subrogated, to the extent of such payment, to all
rights and remedies of the indemnified party to any insurance benefits or other
claims of the indemnified party with respect to such Indemnification Claim.

     (b) After any final judgment or award shall have been rendered by a
Governmental Body of competent jurisdiction and the expiration of the time in
which to appeal therefrom, or a settlement shall have been consummated, or the
indemnified party and the indemnifying party shall have arrived at a mutually
binding agreement with respect to an Indemnification Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the indemnifying party pursuant to this Agreement with respect to
such matter and the indemnifying party shall be required to pay all of the sums
so due and owing to the indemnified party by wire transfer of immediately
available funds within ten (10) Business Days after the date of such notice.

     (c) The failure of the indemnified party to give reasonably prompt notice
of any Indemnification Claim shall not release, waive or otherwise affect the
indemnifying party's obligations with respect thereto except to the extent that
the indemnifying party can demonstrate actual loss and prejudice as a result of
such failure.

     7.4 Disclaimer of Damages. Notwithstanding anything in this Agreement to
the contrary, in no event shall either Party be liable to the other under any
theory, including negligence, for any indirect, incidental, consequential,
special or exemplary damages or lost profits.

     7.5 Exclusive Remedy. The right to indemnification and other rights under
this Article 7 shall constitute Purchaser's (and its Affiliates) and AAI DS's
(and its Affiliates) sole and exclusive remedies with respect to any and all
claims arising under or relating to this Agreement and/or any applicable Service
Contract. In furtherance of the foregoing, each of Purchaser and AAI DS hereby
waives, and shall cause any Affiliates to waive, to the fullest extent permitted
by Applicable Law, any and all rights, claims and causes of action that they may
have against any other Party or its Affiliates in connection with such
transactions, except those arising under Article 7.


                                       12

<PAGE>

                                  ARTICLE VIII

                              TERM AND TERMINATION

     8.1 Unless earlier terminated in accordance with this Article 8, this
Agreement shall take effect and commence on the Effective Date and continue in
effect for seven (7) years ("Initial Term"). In addition, after the expiration
of the Initial Term, the Agreement will automatically renew for consecutive two
(2) year terms ("Renewal Period") until either of the Parties terminates this
Agreement by providing the other Party with at least sixty (60) days' written
notice prior to the end of the Initial Term or applicable Renewal Period. The
Initial Term, together with any Renewal Period(s), is referred to herein as the
"Term".

     8.2 Notwithstanding Section 8.1 herein, this Agreement may be terminated as
follows:

(a)  immediately upon the delivery of written notice by one Party, if the other
     Party materially breaches any of the provisions of this Agreement and such
     breach is not cured within sixty (60) calendar days after the giving of
     written notice thereof (or if cure has been commenced during such period,
     if it is not diligently pursued to completion);

(b)  immediately upon delivery of written notice by one Party, if the other
     Party has been unable to perform its obligations hereunder for one hundred
     twenty (120) calendar days by reason of force majeure (as defined in
     Section 10.11); or

(c)  immediately if (i) the Bankruptcy Court enters an order in the Bankruptcy
     Cases appointing a trustee, examiner with expanded powers or responsible
     officer in the Bankruptcy Cases, (ii) any of the Bankruptcy Cases are
     converted to a case(s) under chapter 7 of the Bankruptcy Code or (iii) the
     Bankruptcy Cases are dismissed.

     8.3 Upon termination or expiration of this Agreement:

(a)  AAI DS shall stop all Services, each Party shall return to the other any
     Confidential Information of such other Party and AAI DS shall transfer all
     Project IP to Purchaser as provided in Section 4.2 of this Agreement upon
     payment by Purchaser as set forth in Section 8.3(b) below.

(b)  Purchaser shall be obligated to pay to AAI DS the cost of all Services
     completed and expenses incurred, as set forth in the relevant Service
     Contract(s) then in effect at the time of termination in accordance with
     the terms and conditions set forth in this Agreement. Purchaser shall be
     obligated to pay for all unused supplies and materials that were ordered by
     AAI DS in order to perform the Services and, upon such payment, Purchaser
     shall be permitted to take delivery of such unused supplies and materials.
     AAI DS shall use commercially reasonable efforts to minimize the costs
     associated with the cessation of Services.

     8.4 AAI DS and Purchaser agree that the following provisions shall survive
the termination of this Agreement: Article IV, Article V, Article VII, Section
8.3, Section 8.4 and Article X.


                                       13

<PAGE>

                                   ARTICLE IX

                               RECORDS AND AUDITS

     9.1 AAI DS agrees to maintain records of all Services performed under this
Agreement in accordance with the FDA archival guidelines. Upon reasonable prior
written notice (not less than fifteen (15) Business Days), during regular
business hours, and at mutually agreed upon times, Purchaser may, at its own
cost and expense, review one time each calendar year AAI DS's quality control
procedures and records, and review the records of AAI DS relating to the
Services performed and expenses incurred to assure compliance with all
provisions of this Agreement, in each case with a representative of AAI DS
present. If Purchaser determines in its reasonable judgment that AAI DS's
quality control procedures and records are not satisfactory or identifies
significant deficiencies or problems with such records or expenses, Purchaser
reserves the right to perform additional visits until remedied.

     9.2 In the event of an inspection by any governmental or regulatory agency
concerning the Services performed hereunder, AAI DS shall notify Purchaser
promptly upon learning of such an inspection, shall supply Purchaser with copies
of any correspondence or portions or correspondence relating to Purchaser's
materials and shall inform Purchaser of the general findings and outcomes of
such inspections. Purchaser shall reimburse AAI DS for actual time and
reasonable expenses incurred by AAI DS in connection with any inspection
pursuant to this Section 9.2 to the extent the inspection is directly related to
the Services performed by AAI DS on behalf of Purchaser. AAI DS shall provide
Purchaser with an invoice detailing such time and expenses. AAI DS shall invoice
Purchaser at its then current rates applicable at the time of such review.
Purchaser shall also be invoiced for any incidental expenses AAI DS incurs
resulting from such review. Payment of such invoice shall be in accordance with
Section 3.8 herein. Notwithstanding the foregoing, in the event that the
inspection determines that Services were not in material compliance with any
Applicable Law, Purchaser shall not be obligated to make any payments for any
expenses related to such inspection.

                                    ARTICLE X

                                  MISCELLANEOUS

     10.1 Successors and Assigns. Neither Party may assign this agreement
without the other Party's prior written consent, which consent shall not be
unreasonably withheld or delayed, except that Purchaser may assign its rights or
obligations hereunder only to an Affiliate or third party that purchases
substantially all of the assets of Purchaser relating to the Services Products
provided that such Affiliate or third party agrees in writing to be bound by all
terms and conditions of this Agreement.

     10.2 Notices. Any notice required or permitted under this Agreement shall
be in writing, shall specifically refer to this Agreement, and shall be sent by
hand, recognized overnight courier, confirmed facsimile transmission, or
registered or certified mail service, postage prepaid, return receipt requested,
to the following addresses or facsimile numbers of the Parties:


                                       14

<PAGE>

     Purchaser:

     Xanodyne Pharmaceuticals, Inc.
     7300 Turfway Road
     Suite 300
     Florence, KY 41042
     Facsimile: (859) 371-7692
     Attention: Thomas P. Jennings, Esq.

     AAI DS:

     President
     aaiPharma Inc.
     2320 Scientific Park Drive
     Wilmington, NC 28405
     Fax: 910-815-2387

     With a copy sent to:

     aaiPharma Inc.
     2320 Scientific Park Dr.
     Wilmington, NC 28409
     Attn: General Counsel
     Fax: (910)815-2387

All notices under this Agreement shall be deemed received (i) upon receipt when
sent by hand, (ii) two (2) Business Days after deposit with a recognized
overnight courier, (iii) upon confirmation of delivery when sent by facsimile
and (iv) five (5) Business Days after deposit in registered or certified mail
service. A party may change its contact information immediately upon written
notice to the other party in the manner provided in this Section.

     10.3 Waiver. No delay on the part of AAI DS or Purchaser in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of either Party of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege hereunder,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. Any provision of this Agreement may
be waived if, and only if, such waiver is in writing and signed by the Party
against whom the waiver is to be effective.

     10.4 Entire Agreement. This Agreement, the APA and the Service Contracts
executed pursuant to this Agreement constitute the entire agreement between the
Parties with respect to the subject matter hereof and supersede all prior
agreements, understanding and negotiations, both written and oral, between the
Parties with respect to the subject matter of this Agreement.

     10.5 Amendment. This Agreement may be modified or amended only by written
agreement of the Parties hereto.


                                       15

<PAGE>

     10.6 Counterparts. This Agreement may be executed by facsimile and in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute a single instrument. This Agreement may be
executed on signature pages exchanged by facsimile, in which event each Party
shall promptly deliver to the others such number of original executed copies as
the others may reasonably request.

     10.7 Governing Law; Jurisdiction.

     (a) This Agreement shall be governed and construed in accordance with the
laws of the State of New York excluding any choice of law rules which may direct
the application of the law of another state.

     (b) Any action or proceeding arising out of or relating to this Agreement
or any of the transactions contemplated hereby may be brought in the United
States District Court for the Southern District of New York, and each of the
Parties irrevocably submits to the exclusive jurisdiction of such court in any
such action or proceeding, waives any objection it may now or hereafter have to
venue or to convenience of forum, agrees that all claims in respect of such
action or proceeding shall be heard and determined only in such court and agrees
not to bring any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby in any other court.

     10.8 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any Party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom, and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar to the terms to
such illegal, invalid or unenforceable provision as may be possible and
reasonably acceptable to the Parties herein. Notwithstanding the foregoing, the
Parties acknowledge that it is their intent that this Agreement and all of the
Service Contracts constitute one agreement and that neither Party may assume
certain Service Contracts and reject other Service Contracts or this Agreement
in any subsequent chapter 11 case.

     10.9 No Third Party Rights. Except as otherwise expressly set forth herein,
no provision of this Agreement shall be deemed or construed in any way to result
in the creation of any rights or obligations in any Person not a Party to this
Agreement.

     10.10 Exhibits. The Exhibits referenced in this Agreement are an integral
part of this Agreement and are incorporated herein by reference.

     10.11 Force Majeure. If either Party is prevented from complying, either
totally or in part, with any of the terms or provisions set forth herein by
reason of force majeure, including, by way of example and not of limitation,
fire, flood, explosion, storm, hurricane, strike, lockout or other labor
dispute, riot, war, rebellion, accidents, acts of God, acts of governmental
agencies


                                       16

<PAGE>

or instrumentalities, failure of suppliers or any other similar or dissimilar
cause, in each case to the extent beyond its control despite its commercially
reasonable efforts to avoid, minimize, and resolve such cause as promptly as
possible, said Party shall (a) provide written notice of same to the other
Party, and (b) subject to the obligations set forth above in this Section 10.11
with respect to said Party's efforts to remove the disability, its obligations
that are prevented from compliance by such force majeure are suspended, without
liability, during such period of force majeure. Said notice shall be provided
within five (5) business days of the occurrence of such event and shall identify
the requirements of this Agreement or such of its obligations as may be
affected. The Party so affected shall give to the other Party a good faith
estimate of the continuing effect of the force majeure condition and the
duration of the affected Party's nonperformance.

     10.12 No Other Relationship. It is expressly agreed that AAI DS, on the one
hand, and Purchaser, on the other hand, shall be independent contractors and
that nothing contained herein shall be deemed to create any joint venture or
partnership between the Parties hereto, and, except as is expressly set forth
herein, neither Party shall have any right by virtue of this Agreement to bind
the other Party in any manner whatsoever.

     10.13 Non-Solicitation. Purchaser agrees that, except as otherwise
permitted by Sections 8.9 and 9.1 of the APA, neither it nor its Affiliates
will, commencing on the date that the Bankruptcy Court enters the Sale Order and
continuing until one (1) year following the expiration or termination of this
Agreement: (i) knowingly hire a person who has been an employee of AAI DS or its
Affiliates during the two (2) years prior to such hiring, or (ii) directly or
indirectly solicit to employ the employees of AAI DS or its Affiliates, provided
that newspaper and internet advertisements to fill job openings shall not be
deemed to be "solicitation" hereunder.

     10.14 Definitions. Capitalized terms used but not otherwise defined herein
shall have the meaning given to them in the APA.


                                       17

<PAGE>

                                        EXECUTION PAGE TO MASTER SERVICES
                                        AGREEMENT

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

                                        XANODYNE PHARMACEUTICALS, INC.


                                        By: /s/ S.A. Stamp
                                            ------------------------------------
                                        Printed Name: S.A. STAMP
                                        Title: CHIEF FINANCIAL OFFICER


                                        AAI DEVELOPMENT SERVICES, A DIVISION OF
                                        AAIPHARMA INC.


                                        By:
                                            ------------------------------------
                                        Printed Name:
                                                      --------------------------
                                        Title:
                                               ---------------------------------

<PAGE>

                                        EXECUTION PAGE TO MASTER SERVICES
                                        AGREEMENT

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

                                        XANODYNE PHARMACEUTICALS, INC.


                                        By:
                                            ------------------------------------
                                        Printed Name:
                                                      --------------------------
                                        Title:
                                               ---------------------------------


                                        AAI DEVELOPMENT SERVICES, A DIVISION OF
                                        AAIPHARMA INC.


                                        By: /s/ Ludo J. Reynders
                                            ------------------------------------
                                        Printed Name: Ludo J. Reynders
                                        Title: President/CEO

<PAGE>

                                    Exhibit A

                                 Purchase Prices

BILLING RATES - NON-CLINICAL

<TABLE>
<CAPTION>
TYPE OF WORK                                              HOURLY RATES
------------                                              ------------
<S>                                       <C>
Analytical (MD/MV)                                                               $[**]
Analytical (Rountine)                                                            $[**]
RTP Special Analytical                                                           $[**]
Biotechnology Testing                                                            $[**]
Project Management                                                               $[**]
Formulations Development                                                         $[**]
Physical Chemistry Testing                                                       $[**]
Manufacturing - Wilmington                                                       $[**]
Manufacturing - Charleston                                                       $[**]
Non-Manufacturing - Charleston                                                   $[**]
Microbiology                                                                     $[**]
Raw Material Laboratory                                                          $[**]
Kansas (BA-HPLC/SBA)                                                             $[**]
Kansas (BA-MS)                                                                   $[**]
Statistics                                                                       $[**]
Regulatory                                                                       $[**]
Validations                                                                      $[**]
CDS Pallet Storage                                                        $[**]/pallet
Stability Set-Up & Protocol Generation                         $[**]/lot/configuration
Stability Storage
(with Analytical Testing)                                $[**]/month/lot/configuration
Photostability Storage                         $[**]/month/lot/configuration, UV & Vis
(ICH, Option 2 with Analytical Testing)
Photostability Storage                    $[**]/month/lot/configuration, Full Spectrum
(ICH, Option 1 with Analytical Testing)
Shipment (Ambient Condition)                                            $[**]/shipment
Shipment (Refrigerated Condition)                                       $[**]/shipment
Lab Support for Darvocet N-100                                                   $[**]
   Raw Material Testing
   Release Testing
BIOAVAILABILITY/BIOEQUIVILENCE (BA/BE)                                        Variable
   Depends Upon:
   Number of Subjects
   Number of Beds Occupied
   Subject Confinement
   Subject Remuneration
</TABLE>

<PAGE>

<TABLE>
<S>                                       <C>
   Blood Draw Schedule
   Number of Return Samples
   Staffing Required
   ADE Profile for the Drug, etc.
</TABLE>

<PAGE>

                                    Exhibit B

                                Service Contract

                                SERVICE CONTRACT

[insert name and address of Client]

Telephone: [insert #]
Fax: [insert #]
Email: [insert address]

SERVICE CONTRACT: [insert SE #]
TITLE:
ISSUED: [insert date]

OBJECTIVE/SCOPE:

[to be completed by contract generator]

SUMMATION OF SERVICES:

[to be completed by contract generator]

<PAGE>

THE TERMS AND PROVISIONS OF THE FOLLOWING ATTACHED APPENDICES ARE INCORPORATED
HEREIN BY REFERENCE AND SHALL BE BINDING ON THE PARTIES:

<TABLE>
<S>            <C>
APPENDIX I     DESCRIPTION OF SERVICES
APPENDIX II    PAYMENT SCHEDULE AND TERMS
APPENDIX III   GENERAL TERMS AND CONDITIONS
</TABLE>

THE SERVICES DESCRIBED IN THIS SERVICE CONTRACT, INCLUDING THE APPENDICES
HERETO, SHALL BE REFERRED TO HEREIN AS THE "SERVICES."

THE PHARMACEUTICAL PRODUCT COVERED BY SERVICES UNDER THIS SERVICE CONTRACT SHALL
BE REFERRED TO HEREIN AS THE "PRODUCT."

THIS SERVICE CONTRACT SHALL BECOME BINDING ON THE PARTIES IF SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF PURCHASER AND RETURNED TO AAI WITHIN 30 DAYS OF THE
DATE HEREOF.

THIS SERVICE CONTRACT IS BEING ENTERED INTO PURSUANT TO THAT CERTAIN MASTER
SERVICES AGREEMENT BETWEEN THE PARTIES DATED ________, 2005 (THE "MASTER
SERVICES AGREEMENT"), AND THE SERVICES PERFORMED HEREUNDER SHALL BE GOVERNED BY
THE TERMS OF THIS SERVICE CONTRACT AND THE MASTER SERVICES AGREEMENT. IN THE
EVENT OF CONFLICT BETWEEN THE TERMS OF THIS SERVICE CONTRACT AND THE MASTER
SERVICES AGREEMENT, THE TERMS OF THE MASTER SERVICES AGREEMENT SHALL GOVERN.

AAIPHARMA, INC. FOR ITS DIVISION,
AAI DEVELOPMENT SERVICES                XANODYNE PHARMACEUTICALS, INC.


-------------------------------------   ----------------------------------------
Reviewed and Approved by:               Printed Name of Authorized
XXXX                                    Representative
Manager


-------------------------------------   ----------------------------------------
Date                                    Signature


-------------------------------------   ----------------------------------------
Reviewed and Approved by:               Date
Michael W. George
Executive Vice President

                                        ----------------------------------------
                                        Purchase Order Number

PLEASE RETURN SIGNED DOCUMENT:


XXXX
Project Manager, Product Development
Group

<PAGE>

AAI DEVELOPMENT SERVICES
2320 SCIENTIFIC DRIVE
WILMINGTON, N.C. 28405
Telephone: XXX.XXX.XXXX
Facsimile: XXX.XXX.XXXX
E-mail: XXXX.XXX@aaidevelopment.com

<PAGE>

                                   APPENDIX I
                             DESCRIPTION OF SERVICES

[to be completed by contract generator]

<PAGE>

                                   APPENDIX II
                           PAYMENT SCHEDULE AND TERMS

The estimated cost for the Services outlined in this Service Contract is
$XXX,XXX plus materials and storage as follows:

<TABLE>
<CAPTION>
DESCRIPTION OF SERVICES   ESTIMATED COST
-----------------------   --------------
<S>                       <C>
                          $
                          $
                          $
TOTAL                     $XXX,XXX
</TABLE>

In addition, Purchaser will be charged for all out-of-pocket costs and/or
expenses associated with the Services outlined herein in accordance with the
Master Services Agreement.

PAYMENT SCHEDULE

<TABLE>
<CAPTION>
PAYMENT              PAYMENT DESCRIPTION               AMOUNT
-------   ------------------------------------------   --------
<S>       <C>                                          <C>
  1       Pre-payment due upon signature of contract   $ XX,XXX
  2       [LIST OTHER MILESTONES]                      $ XX,XXX
  3                                                    $ XX,XXX
             TOTAL                                     $XXX,XXX
</TABLE>

<PAGE>

                                  APPENDIX III
                          GENERAL TERMS AND CONDITIONS

A. REQUIREMENTS. Purchaser will supply AAI DS with this Service Contract, or a
copy of it, signed by the appropriate authorized Purchaser representative.
Purchaser will also supply AAI DS with a purchase order number and prepayment in
the amount of $[XXX,XXX].

B. TERMINATION. Unless earlier terminated pursuant hereto, this Service Contract
shall continue in full force and effect until the Services to be provided
hereunder have been completed. This Service Contract may be terminated
immediately by one party, if the other party materially breaches any of the
provisions of this Service Contract and such breach is not cured within sixty
(60) calendar days after the giving of written notice thereof (or if cure has
been commenced during such period, if it is not diligently pursued to
completion). In the event of such termination, Purchaser will be obligated to
pay the cost of all Services completed and expenses incurred through the date of
such termination in accordance with the terms hereof and for all unused supplies
and materials that were ordered by AAI DS in order to perform the Services, plus
reasonable project shutdown costs.

C. SAFETY INFORMATION. Purchaser warrants that it will provide AAI DS with all
necessary safety information concerning chemical entities it supplies to AAI DS,
to ensure the safe handling, storage, usage, shipment and disposal of such
chemical entities. Purchaser is responsible for labeling and all other
information relevant to the Product.

D. SAMPLES. Unless otherwise designated by Purchaser in writing, any and all
materials received and associated with this Service Contract will be treated as
laboratory testing samples only, not for use in humans. After the final
stability time point, by completion or cancellation of the stability study, AAI
DS will retain any sample overage in the controlled stability storage
environment for a period of two months. After that time the samples will
automatically be returned to Purchaser or destroyed by appropriate means in
Wilmington, NC. Please initial and date one selection:

          Purchaser would like for AAI DS to ___ return ___ destroy the
                               remaining samples.

If the disposition of the samples is not indicated, the samples will be returned
to Purchaser at the end of the two month retain period. All shipping charges
will be Purchaser's responsibility. [ONLY APPLICABLE IF STABILITY STUDIES ARE
INCLUDED IN SERVICES]

<PAGE>

                  FIRST AMENDMENT TO MASTER SERVICES AGREEMENT

     This First Amendment to Master Services Agreement (this "Amendment") is
made by and between AAI Development Services, a division of aaiPharma Inc. ("AAI
DS"), and Xanodyne Pharmaceuticals, Inc. ("Purchaser"), and is effective as of
the ___ day of August, 2005 (the "Amendment Effective Date").

     WHEREAS, AAI DS and Purchaser have entered into that certain Master
Services Agreement dated July 25, 2005 (the "Agreement").

     WHEREAS, AAI DS and Purchaser now desire to amend the Agreement.

     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, AAI DS and Purchaser hereby amend
and modify the Agreement and otherwise agree as follows:

     1. The following sentence shall be added to the end of Section 1.2 of the
Agreement: "Notwithstanding anything in this Agreement or a Service Contract to
the contrary, to the extent the Services to be performed pursuant to a Service
Contract are Additional Services and Purchaser wishes to perform such Additional
Services on its own behalf by Purchaser's employees, then Purchaser may
terminate the applicable Service Contract only with respect to such Additional
Services upon no less than sixty (60) days written notice to AAI DS."

     2. Continuing Effect. Except as otherwise expressly modified and/or amended
herein, the terms and conditions of the Agreement remain in full force and
effect.

     3. Headings; Capitalized Terms. The captions and headings used in this
Amendment are for the convenience of the parties and shall not be utilized to
interpret, construe or define the provisions of the Agreement or this Amendment.
Any capitalized terms used herein and not defined shall have the definitions
assigned to them in the Agreement.

     4. Counterparts; Facsimile. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same document. This Amendment may be
executed by facsimile. The parties agree that facsimile copies of signatures
have the same effect as original signatures.

     DATED as of the Amendment Effective Date, and executed by:

AAI Development Services,               Xanodyne Pharmaceuticals, Inc.
a division of aaiPharma Inc.


By: /s/ Ludo Reynders                   By: /s/ William A. Nuerge
    ---------------------------------       ------------------------------------
Name: Ludo Reynders                     Name: William A. Nuerge
Title: President and CEO                Title: CEO

<PAGE>

                                    EXHIBIT A

                          SERVICES AGREEMENT AMENDMENT

                     AMENDMENT TO MASTER SERVICES AGREEMENT

     This Amendment to the Master Services Agreement ("Amendment") is made by
and between AAIPharma Inc. ("AAI") and Xanodyne Pharmaceuticals, Inc., a
Delaware corporation ("Xanodyne"), and is effective as of the 25th day of May,
2006 (the "Effective Date").

     WHEREAS, Xanodyne and AAI Development Services, a then division of AAI,
entered into the Master Services Agreement, dated July 25, 2005 (the
"Agreement");

     WHEREAS, the AAI Development Services division of AAI has been dissolved,
leaving AAI as the successor in interest of AAI Development Services under the
Agreement; and

     WHEREAS, Xanodyne and AAI desire to amend the Agreement upon the terms and
conditions set forth in this Amendment.

     NOW, THEREFORE, Xanodyne and AAI hereby agree as follows:

     1. Capitalized terms used, but not otherwise defined herein, shall have the
meaning given to them in the Agreement. All references in the Agreement to "AAI
Development Services" are hereby replaced with references to "AAIPharma Inc."
and references to "AAI DS" are hereby replaced with references to "AAI."

     2. The first sentence of Section 3.3 of the Agreement is amended and
restated in its entirety to read as follows: During the first year of the
Initial Term ("Year 1"), Purchaser shall purchase or offer to purchase, in
accordance with this Section 3.3 (collectively, "Acquire") Services from AAI for
amounts, inclusive of Out-of-Pocket Expenses (as defined in Section 3.7)
("Service Amounts") that, in the aggregate, are equal to at least $9,500,000
(the "Year 1 Minimum").

     3. The words "$2 million" in Section 3.5 shall be deleted and replaced with
"$1.9 million".

     4. This Amendment contains the entire agreement of the Parties with respect
to the subject matter covered in this Amendment.

     5. Except as otherwise expressly modified or amended herein, the terms and
conditions of the Agreement remain in full force and effect.

<PAGE>

     6. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute one and the same document. In addition, this document may be executed
by facsimile, and the parties agree that facsimile copies of signatures shall
have the same effect as original signatures.

     7. This Amendment shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and performed in such
State.

                      [Signature Page Immediately Follows]

<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
Effective Date.

XANODYNE PHARMACEUTICALS, INC.          AAIPHARMA INC.


By: /s/ William A. Nuerge               By: /s/ Vito Mangiardi
    ---------------------------------       ------------------------------------
Name: William A. Nuerge                 Name: Vito Mangiardi
Title: CEO                              Title: President, North American
                                               Operations

Dated: 5/18/06                          Dated: 5/25/06


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